Kartoon Studios, Inc. Goodwill & Intangibles Disclosure
Note 9: Intangible Assets, net
Intangible Assets, net
The Company had the following intangible assets (in thousands) with their weighted average remaining amortization period (in years):
Intangible Assets, net
| Weighted Average Remaining Amortization | As of December 31, | |||||||||||
| Period | 2025 | 2024 | ||||||||||
| Customer Relationships | 4.5 | $ | 17,325 | $ | 17,325 | |||||||
| Digital Networks | 12.3 | 803 | 803 | |||||||||
| Trade Names | 65.4 | 9,198 | 9,970 | |||||||||
| Intangible Assets, gross | 27,326 | 28,098 | ||||||||||
| Less Accumulated Amortization | (7,833 | ) | (5,822 | ) | ||||||||
| Foreign Currency Translation Adjustment | (1,889 | ) | (2,554 | ) | ||||||||
| Intangible Assets, net | $ | 17,604 | $ | 19,722 | ||||||||
During the years ended December 31, 2025 and December 31, 2024, the Company recorded intangible asset amortization expense of $2.0 million and $2.0 million, respectively.
Pursuant to ASC 350-30, General Intangibles Other than Goodwill, the Company evaluates its intangible assets periodically to determine whether events or changes in circumstances indicate that their carrying values may not be recoverable. During the year ended December 31, 2025, changes in the Company’s financial projections triggered a reassessment of both its definite- and indefinite-lived intangible assets for potential impairment. Based on this analysis, the Company recorded an impairment charge of $0.8 million, recognized as Impairment of Intangible Assets within Operating Expenses in the consolidated statement of operations. The impairment related to the Frederator and Wow Tradenames, which are indefinite-lived intangible assets, due to a reduction in the estimated present value of their expected future cash flows. No impairment charges were recognized in the prior year ended December 31, 2024.
Expected future amortization of intangible assets subject to amortization as of December 31, 2025 is as follows (in thousands):
| Fiscal Year: | ||||
| 2026 | $ | 2,039 | ||
| 2027 | 2,039 | |||
| 2028 | 2,039 | |||
| 2029 | 2,039 | |||
| 2030 | 669 | |||
| Thereafter | 4,054 | |||
| Total | $ | 12,879 | ||
As of December 31, 2025, $4.7 million of the Company’s intangible assets related to the acquired trade names from the Wow acquisition had indefinite lives and are not subject to amortization.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 31, 2026 | Showing above |
| 2024 | Mar 31, 2025 | |
| 2023 | Apr 9, 2024 | |
| 2022 | Apr 13, 2023 | |
| 2019 | Mar 30, 2020 | |
| 2018 | Apr 1, 2019 | |
| 2017 | Apr 2, 2018 | |
| 2016 | Mar 31, 2017 | |
About Goodwill & Intangibles Disclosures
Goodwill and intangible asset disclosures reveal the premium paid in acquisitions and how management assesses whether that premium retains its value. Since goodwill is no longer amortized under US GAAP, the annual impairment test is the only mechanism that adjusts carrying values downward — making the assumptions behind that test critically important for investors.
Key signals: a history of goodwill impairments suggests management consistently overpays for acquisitions. Watch the gap between reporting unit fair value and carrying amount — when fair value exceeds carrying amount by less than 10-20%, a small decline in business performance could trigger a write-down. For finite-lived intangibles, examine useful life assumptions across customer relationships, technology, and trade names; aggressive estimates inflate near-term earnings. Compare total intangibles-to-total-assets ratios against peers to assess acquisition dependency. Rising goodwill as a percentage of equity can signal balance sheet fragility.