PART I - FINANCIAL INFORMATION [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) Presents unaudited consolidated financial statements for June 30, **2025**, and December 31, **2024**, including balance sheets, operations, equity, cash flows, and notes [Consolidated Balance Sheets](index=6&type=section&id=Consolidated%20Balance%20Sheets) Snapshot of **assets**, **liabilities**, and **equity** as of **June 30, 2025**, and **December 31, 2024**, showing increased **total assets** from digital asset investment Consolidated Balance Sheets | **Metric** | **June 30, 2025 (Unaudited)** | **December 31, 2024 (Audited)** | | :----------------------------------- | :-------------------------- | :-------------------------- | | **Cash** | **$5,298,142** | **$1,352,373** | | **Total current assets** | **$7,295,518** | **$3,462,457** | | **Investment in digital assets – Related Party** | **$102,198,840** | - | | **Total assets** | **$112,196,561** | **$6,307,303** | | **Total Liabilities** | **$751,576** | **$1,016,352** | | **Total Shareholders' Equity (Deficit)** | **$111,444,985** | **$5,290,951** | [Consolidated Statements of Operations](index=7&type=section&id=Consolidated%20Statements%20of%20Operations) Details revenues, costs, and **net income/loss**, shifting from **loss** to **income** due to **unrealized digital asset gains** Consolidated Statements of Operations | **Metric** | **Three Months Ended June 30, 2025** | **Three Months Ended June 30, 2024** | **Six Months Ended June 30, 2025** | **Six Months Ended June 30, 2024** | | :--------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | **Sales** | **$1,342,929** | **$1,507,927** | **$2,432,563** | **$2,514,284** | | **Gross profit** | **$292,203** | **$324,666** | **$558,738** | **$488,213** | | **Operating loss** | **$(744,203)** | **$(526,476)** | **$(1,391,578)** | **$(2,241,482)** | | **Unrealized gain on digital asset investment** | **$2,154,071** | - | **$2,154,071** | - | | **Net income (loss)** | **$1,467,855** | **$(520,971)** | **$821,269** | **$(2,230,975)** | | **Basic Net (loss) per share** | **$0.07** | **$(0.05)** | **$0.04** | **$(0.22)** | | **Fully diluted Net (loss) per share** | **$0.01** | **$(0.05)** | **$0.00** | **$(0.22)** | [Consolidated Statements of Changes in Shareholders' Equity (Deficit)](index=8&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Shareholders%27%20Equity%20(Deficit)) Outlines **equity** changes, reflecting increased **paid-in capital** from preferred stock and digital asset investments Consolidated Statements of Changes in Shareholders' Equity (Deficit) | **Metric** | **June 30, 2025** | **December 31, 2024** | | :--------------------------------- | :------------ | :---------------- | | **Series B Preferred Stock** (Shares) | **100,000** | - | | **Series B Preferred Stock** (Amount) | **$10** | - | | **Common Stock** (Shares) | **27,425,983** | **15,956,477** | | **Common Stock** (Amount) | **$2,743** | **$1,596** | | **Additional Paid-In Capital** | **$115,996,204** | **$10,195,598** | | **Accumulated earnings (deficit)** | **$(4,875,972)** | **$(5,697,241)** | | **Total Shareholders' Equity (Deficit)** | **$111,444,985** | **$5,290,951** | - Issuance of **100,000 Series B Preferred Stock** shares for **$100,000,000** in **digital assets** (**TRX tokens**) significantly increased **additional paid-in capital**[72](index=72&type=chunk)[82](index=82&type=chunk) [Consolidated Statements of Cash Flows](index=11&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Presents **cash flows** from operating, investing, and financing activities, showing a **net cash increase** from financing Consolidated Statements of Cash Flows | **Metric** | **Six Months Ended June 30, 2025** | **Six Months Ended June 30, 2024** | | :--------------------------------------- | :----------------------------- | :----------------------------- | | **Net Income (loss)** | **$821,269** | **$(2,230,975)** | | **Net cash provided by (used in) operating activities** | **$(165,653)** | **$(1,504,704)** | | **Cash flows (used in) investing activities** | - | **$(23,264)** | | **Cash (used in) financing activities** | **$4,111,422** | - | | **Net increase (decrease) in cash and cash equivalents** | **$3,945,769** | **$(1,527,968)** | | **Cash and cash equivalents at the end of the period** | **$5,298,142** | **$1,452,773** | | **Fair value of preferred shares issued for digital assets** | **$100,000,000** | - | [Notes to the Financial Statements](index=12&type=section&id=Notes%20to%20the%20Financial%20Statements) Provides detailed information on organization, accounting policies, financial items, capital structure, and subsequent events [Note 1 - Organization and Business Operations](index=12&type=section&id=Note%201%20-%20Organization%20and%20Business%20Operations) **Tron Inc.** is a **NASDAQ-listed Nevada corporation** with a **Hong Kong subsidiary**, focusing on merchandise and **TRX token** holdings - **Tron Inc.** (formerly **SRM Entertainment, Inc.**) is a **Nevada corporation**, listed on **NASDAQ**, incorporated on **April 22, 2022**. Its **wholly-owned subsidiary**, **SRM Ltd**, was incorporated in **Hong Kong** on **January 23, 1981**[28](index=28&type=chunk) - The company's **business operations** include designing, developing, and manufacturing **custom merchandise** (**toys and souvenirs**) for **theme parks and entertainment venues**, and holding **TRON** (**TRX tokens**), which constitutes the **largest public ownership of TRX tokens**[29](index=29&type=chunk) [Note 2 - Significant Accounting Policies](index=12&type=section&id=Note%202%20-%20Significant%20Accounting%20Policies) Outlines policies for **emerging growth company** status, recent accounting pronouncements, revenue, digital assets, and related parties - The Company is an '**emerging growth company**' and has elected not to opt out of the extended transition period for complying with new or revised financial accounting standards, which may affect **comparability** with other public companies[31](index=31&type=chunk)[32](index=32&type=chunk) - The Company adopted **ASU 2023-07 (Segment Reporting)** for fiscal years beginning after **December 15, 2023**, and **ASU 2023-08 (Accounting for and Disclosure of Crypto Assets)** effective **January 1, 2025**, requiring **crypto assets** to be recognized at **fair value** with changes in **net income**[36](index=36&type=chunk)[37](index=37&type=chunk) - **Digital assets** (**TRX tokens**) are accounted for at **fair value**, with changes recognized in **net income**, and are classified as current or noncurrent based on intended holding period and liquidity. **Staking activities** with **JustLend DAO** result in **sTRX liquid staking tokens**, measured at **fair value**, with appreciation considered **unrealized staking income**[42](index=42&type=chunk)[43](index=43&type=chunk)[59](index=59&type=chunk) - The Company operates **two operating segments**: (i) the design, manufacture, and sale of **toys** to premier **theme parks** and (ii) a **Digital Asset Treasury Strategy** using **TRX Tokens**[66](index=66&type=chunk) [Note 3 – Inventory](index=18&type=section&id=Note%203%20%E2%80%93%20Inventory) Provides **inventory** balances for finished goods at reporting periods Inventory | **Metric** | **June 30, 2025** | **December 31, 2024** | | :------- | :------------ | :---------------- | | **Inventory** | **$731,934** | **$783,800** | [Note 4 - Accounts Receivable](index=18&type=section&id=Note%204%20-%20Accounts%20Receivable) Details **accounts receivable** balances at reporting periods Accounts Receivable | **Metric** | **June 30, 2025** | **December 31, 2024** | | :--------------- | :------------ | :---------------- | | **Accounts receivable** | **$637,013** | **$794,158** | [Note 5 – Prepaid Expenses](index=18&type=section&id=Note%205%20%E2%80%93%20Prepaid%20Expenses) Outlines the composition and balances of **prepaid expenses** and deposits Prepaid Expenses | **Metric** | **June 30, 2025** | **December 31, 2024** | | :-------------------------- | :------------ | :---------------- |\n| **Total prepaid expenses** | **$318,669** | **$488,746** | | **Deposits on orders** | **$128,769** | **$396,489** | | **Prepaid insurance** | **$116,968** | **$33,382** | | **Other expenses** | **$72,932** | **$58,875** | [Note 6 - Investment in digital assets – held by an Affiliate](index=18&type=section&id=Note%206%20-%20Investment%20in%20digital%20assets%20%E2%80%93%20held%20by%20an%20Affiliate) Describes significant **TRX token** investment, acquired via preferred stock, staked, and generating **unrealized gains** - On **June 16, 2025**, the Company acquired **365,096,845 TRX tokens** for **$100,000,000** by issuing **Series B Convertible Preferred Stock** and warrants[72](index=72&type=chunk) - The **TRX tokens** were staked through an affiliate, resulting in **297,543,246 sTRX liquid staking tokens**[72](index=72&type=chunk) Investment in Digital Assets | **Metric** | **Fair Value** | | :-------------------------------- | :--------- | | **Balance at December 31, 2024** | **$ -** | | **Receipt of TRX tokens** | **$100,000,000** | | **Change in fair value** | **$2,154,071** | | **Unrealized income from staking TRX** | **$44,769** | | **Balance at June 30, 2025** | **$102,198,840** | - Potential conflicts of interest exist due to directors' affiliations with **BiT Global** (custodian of Treasury Wallet) and the **TRON blockchain ecosystem** (e.g., **Weike Sun** is father of **Justin Sun**, founder of **TRON**; **Mr. Liu** is senior advisor to **Tron DAO**; **Mr. Yang** holds senior positions for **Tronscan**)[76](index=76&type=chunk) [Note 7 - Investment in Gameverse Interactive Corp](index=18&type=section&id=Note%207%20-%20Investment%20in%20Gameverse%20Interactive%20Corp) Details the company's **equity investment** in **Gameverse Interactive Corp** through a **stock exchange** - On **January 24, 2025**, the Company exchanged **500,000 shares** of its restricted **common stock** for **132,000 shares** of **Gameverse Interactive Corp's** restricted **common stock**, valued at **$190,500**[74](index=74&type=chunk) [Note 8 – Fixed Assets and Other Assets](index=18&type=section&id=Note%208%20%E2%80%93%20Fixed%20Assets%20and%20Other%20Assets) Provides a breakdown of **fixed assets**, **net of depreciation**, including **tooling, molds, and computer equipment** Fixed Assets and Other Assets | **Asset Category** | **June 30, 2025** | **December 31, 2024** | | :----------------------- | :------------ | :---------------- | | **Tooling and Molds** | **$73,325** | **$56,425** | | **Computer equipment and software** | **$21,285** | **$21,285** | | **Total** | **$94,610** | **$77,710** | | **Accumulated depreciation** | **$(44,322)** | **$(29,431)** | | **Net Fixed Assets** | **$50,288** | **$48,279** | [Note 9 – Intangible Assets and Secured Note – Related Party](index=19&type=section&id=Note%209%20%E2%80%93%20Intangible%20Assets%20and%20Secured%20Note%20%E2%80%93%20Related%20Party) Details **intangible asset** acquisition and **secured note** repayment, including **waived interest** - On **September 3, 2024**, the Company acquired assets related to the movie '**The Kid**' from **Suretone Entertainment, Inc.** (a related party) for **$2,893,000**, paid via cash, restricted **common stock**, and a **$1,500,000 secured promissory note**[78](index=78&type=chunk)[79](index=79&type=chunk) - The **secured note** was fully paid off by **June 14, 2025**, and **$41,877** in accrued interest was waived and recorded as an adjustment to **additional paid-in capital**[79](index=79&type=chunk) Amortization Expense | **Metric** | **Six Months Ended June 30, 2025** | **Year Ended December 31, 2024** | | :------------------- | :----------------------------- | :--------------------------- | | **Amortization expense** | **$144,650** | **$96,433** | [Note 10 - Capital Structure](index=20&type=section&id=Note%2010%20-%20Capital%20Structure) Describes authorized and outstanding stock, recent issuances, conversions, and **capital structure** impact - As of **June 30, 2025**, the Company had **10,000,000 authorized preferred shares** (**$0.0001 par value**), with **1,000,000** designated as **Series A** and **100,000** as **Series B**[80](index=80&type=chunk) - In **May 2025**, **5,000 Series A Preferred shares** were issued for **$5,000,000** (net **$4,591,392**) and subsequently converted into **8,928,571 common shares**[81](index=81&type=chunk) - On **June 16, 2025**, **100,000 Series B Preferred shares** were issued for **$100,000,000** in **digital assets**, convertible into **200,000,000 common shares**, and warrants for **220,000,000 common shares**[82](index=82&type=chunk) - The issuances of **Series A** and **B Preferred Stock** resulted in a **change of control** of the Company[85](index=85&type=chunk) Capital Structure | **Metric** | **June 30, 2025** | **December 31, 2024** | | :--------------------------------------- | :------------ | :---------------- | | **Common Stock Issued and Outstanding** | **27,425,983** | **15,956,977** | | **Common Stock Payable** | **$322,000** | **$790,998** | [Note 11 – Options](index=22&type=section&id=Note%2011%20%E2%80%93%20Options) Details **stock options** granted to officers, directors, and employees, including **exercise prices, terms, and compensation expense** - During the **six months ended June 30, 2025**, the Company granted **2,025,000 options** to Directors with **exercise prices** ranging from **$0.56** to **$0.68**, resulting in an expense of **$460,821**[100](index=100&type=chunk) - The **fair value** of options was measured using the **Black-Scholes valuation model**[101](index=101&type=chunk) Stock Options Granted | **Reporting Date** | **Number of Options** | **Term (Years)** | **Exercise Price** | **Market Price on Grant Date** | **Volatility Percentage** | **Fair Value** | | :------------- | :---------------- | :----------- | :------------- | :------------------------- | :-------------------- | :--------- | | **02/21/2024** | **995,000** | **2.5** | **$1.21** | **$1.21** | **62.6%** | **$573,548** | | **12/31/2024** | **25,000** | **5.0** | **$0.63** | **$0.63** | **86.4%** | **$11,045** | | **01/07/2025** | **375,000** | **2.5** | **$0.68** | **$0.68** | **75.0%** | **$119,635** | | **5/22/2025** | **1,650,000** | **2.5** | **$0.56** | **$0.52** | **64.5%** | **$341,186** | [Note 12 - Segment Reporting](index=23&type=section&id=Note%2012%20-%20Segment%20Reporting) Identifies **two reportable segments: toy business and digital assets**, with respective revenues and **gross profits** - The Company has **two reportable segments**: (i) the **toy business** (design, development, and manufacture of **toys and souvenir items**) and (ii) **digital assets** (investing for growth and staking tokens for income)[103](index=103&type=chunk) - **Gross profit** (**loss**) is the segment performance measure used by the **CODM** (**CEO**, **Richard Miller**)[104](index=104&type=chunk) Segment Performance | **Metric** | **June 30, 2025** | **June 30, 2024** | | :-------------------------------- | :------------ | :------------ | | **Revenue from Toy sales** | **$2,432,563** | **$2,514,284** | | **Cost of sales** | **$1,873,825** | **$2,026,071** | | **Gross profit (Toy segment)** | **$558,738** | **$488,213** | | **Unrealized Gain on digital asset investments** | **$2,154,071** | - | | **Unrealized income from staking activities** | **$44,769** | - | | **Total income from digital assets** | **$2,198,840** | - | | **Operating (expenses)** | **$(1,950,316)** | **$(2,729,695)** | | **Net interest income** | **$14,007** | **$10,507** | | **Net Income (loss)** | **$821,269** | **$(2,230,975)** | [Note 13 - Commitments and Contingencies](index=23&type=section&id=Note%2013%20-%20Commitments%20and%20Contingencies) States **no material legal proceedings or claims** are known that could **adversely affect financial position** - Management is not aware of any pending or threatened litigation that could have a **material adverse effect** on the company's **financial position**, **results of operations**, or **liquidity**[107](index=107&type=chunk) [Note 14 – Subsequent Events](index=23&type=section&id=Note%2014%20%E2%80%93%20Subsequent%20Events) Discloses **post-June 30, 2025 events**, including **warrant exercises, S-3 filing, and stockholder approvals** - Subsequent to **June 30, 2025**, **5,678,000 warrants** were exercised, generating **$3,690,700** in proceeds[108](index=108&type=chunk) - On **July 28, 2025**, the Company filed an **S-3 Registration Statement** to offer and sell up to **$1,000,000,000** in various securities[108](index=108&type=chunk)[109](index=109&type=chunk) - Stockholders approved a **change in control** via the issuance of **Series B Preferred Stock** and warrants to an institutional investor (making them the largest shareholder with over **20%** of **common stock**) and an amendment to increase **authorized common stock** from **100,000,000** to **1,000,000,000 shares**, effective **August 14, 2025**[110](index=110&type=chunk)[111](index=111&type=chunk)[114](index=114&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management's perspective on **financial condition**, operations, **business segments**, **strategic developments**, and performance [General Overview](index=25&type=section&id=General%20Overview) **Tron Inc.** is a **NASDAQ-listed Nevada corporation**; recent **PIPE offerings** and name change reflect a **TRON blockchain treasury strategy** - **Tron Inc.** (formerly **SRM Entertainment, Inc.**) is a **Nevada corporation**, listed and traded on **NASDAQ**, incorporated on **April 22, 2022**, with **SRM Entertainment Limited** as a **wholly-owned subsidiary**[121](index=121&type=chunk) - Recent **May** and **June 2025 PIPE Offerings**, name change to '**Tron Inc.**', and ticker change to '**TRON**' signify a **strategic transformation** to align with the **TRON blockchain ecosystem** and a **Tron-focused treasury strategy**[122](index=122&type=chunk)[165](index=165&type=chunk)[166](index=166&type=chunk) [Business](index=26&type=section&id=Business) Operates a **TRX Tokens Treasury strategy** for **long-term holdings and staking**, plus a **traditional toy and souvenir business** - The **TRX Tokens Treasury strategy** involves acquiring **TRX tokens** through **debt/equity issuances** or **liquid assets**, viewing them as **long-term holdings**, and potentially generating **income streams through staking**[125](index=125&type=chunk)[126](index=126&type=chunk) - The company currently holds **365,096,845 TRX tokens** with **no dispositions to date**[127](index=127&type=chunk) - The **toy and souvenir business** designs and develops **custom merchandise** for major **theme parks** (e.g., **Walt Disney Parks**, **Universal Studios**) and **entertainment venues**, leveraging **pop culture trends** and **licensed intellectual property**[128](index=128&type=chunk)[129](index=129&type=chunk)[133](index=133&type=chunk) [Recent Developments](index=27&type=section&id=Recent%20Developments) Two significant **PIPE offerings** in **May** and **June 2025** led to **board changes, executive agreement amendments**, and a **name/ticker symbol change** - **May 2025 PIPE Offering**: Issued **5,000 Series A Convertible Preferred Stock** shares (convertible into **8,928,571 common shares**) and warrants for **$5 million** gross proceeds, used for **general corporate and working capital purposes**[136](index=136&type=chunk)[137](index=137&type=chunk) - **June 2025 PIPE Offering**: Issued **100,000 Series B Convertible Preferred Stock** shares (convertible into **200,000,000 common shares**) and warrants for **$100 million**, paid in **TRX tokens**, with the investor's sole shareholder (**Weike Sun**) appointed to the Board[143](index=143&type=chunk)[144](index=144&type=chunk)[145](index=145&type=chunk) - **Board Changes**: **Hans Haywood**, **Gary Herman**, and **Douglas McKinnon** resigned from the Board. **Weike Sun** (Chairman), **Zhihong Liu** (senior advisor to **Tron DAO**), and **Zi Yang** (senior positions for **Tronscan**) were appointed[156](index=156&type=chunk)[157](index=157&type=chunk)[158](index=158&type=chunk)[159](index=159&type=chunk)[160](index=160&type=chunk)[161](index=161&type=chunk) - **Employment Agreement Amendments**: **Executive compensation** for **incentive/bonus payments** will now be measured solely against the **licensed consumer products business**, not **TRON** (**TRX tokens**)-related operations[163](index=163&type=chunk) - **Name and Symbol Change**: Effective **July 17, 2025**, the company changed its name to '**Tron Inc.**' and its **NASDAQ ticker symbol** to '**TRON**' to reflect its **strategic transformation** into a **TRON treasury strategy company**[165](index=165&type=chunk)[166](index=166&type=chunk) [Significant Accounting Policies and Estimates](index=31&type=section&id=Significant%20Accounting%20Policies%20and%20Estimates) Reiterate **key policies**, including **emerging growth company** status, **revenue recognition**, and recent pronouncements - The Company is an '**emerging growth company**' and has elected to use the extended transition period for new accounting standards, which may impact **financial statement comparability**[167](index=167&type=chunk)[168](index=168&type=chunk) - **Revenue** is recognized when **control of goods or products is transferred to a customer**, typically upon **FOB shipping point**, with **no specific right of return, refund, or warranty**[174](index=174&type=chunk)[175](index=175&type=chunk) - The Company adopted **ASU 2023-07 (Segment Reporting)** for fiscal years beginning after **December 15, 2023**, and **ASU 2023-08 (Accounting for and Disclosure of Crypto Assets)** effective **January 1, 2025**[183](index=183&type=chunk)[185](index=185&type=chunk) [Results of Operations](index=35&type=section&id=Results%20of%20Operations) Shift from **net loss** in **2024** to **net income** in **2025**, driven by **unrealized digital asset gains** despite slightly lower sales Three Months Ended June 30, 2025 vs. 2024 | **Metric** | **2025** | **2024** | **Change** | | :---------------------- | :----------- | :----------- | :------- | | **Sales Revenue** | **$1,342,929** | **$1,507,927** | **-11.07%** | | **Gross profit** | **$292,203** | **$324,666** | **-10.00%** | | **Operating (expense)** | **$(1,036,406)** | **$(851,142)** | **+21.76%** | | **Total other income** | **$2,212,058** | **$5,505** | **+40,100%** | | **Net income (loss)** | **$1,467,855** | **$(520,971)** | **N/A (swing to profit)** | Six Months Ended June 30, 2025 vs. 2024 | **Metric** | **2025** | **2024** | **Change** | | :---------------------- | :----------- | :----------- | :------- | | **Sales Revenue** | **$2,432,563** | **$2,514,284** | **-3.25%** | | **Gross profit** | **$558,738** | **$488,213** | **+14.44%** | | **Operating (expense)** | **$(1,950,316)** | **$(2,729,695)** | **-28.55%** | | **Total other income** | **$2,212,847** | **$10,507** | **+20,961%** | | **Net income (loss)** | **$821,269** | **$(2,230,975)** | **N/A (swing to profit)** | - The **decrease in sales revenue** for both periods is primarily attributed to the **expansion of a major theme park opening** in **Orlando** in **2025**, with an expectation of **future benefit from associated publicity**[189](index=189&type=chunk)[196](index=196&type=chunk) - **Significant unrealized gain on digital asset investment** (**$2,154,071**) and **unrealized income from staking activities** (**$44,769**) were **key drivers** for the **positive net income** in **2025**[191](index=191&type=chunk)[198](index=198&type=chunk) [Impact of Inflation](index=37&type=section&id=Impact%20of%20Inflation) Management believes inflation has had a **negligible effect**, offset by **increasing sales and improving operating efficiency** - **Inflation** has had a **negligible effect on operations** since inception, and the company aims to offset it by **increasing sales and improving operating efficiency**[200](index=200&type=chunk) [Off Balance Sheet Arrangements](index=37&type=section&id=Off%20Balance%20Sheet%20Arrangements) The company has **no off-balance sheet arrangements, financings, or relationships with unconsolidated entities** - The Company has **no off-balance sheet arrangements, financings, or other relationships with unconsolidated entities or variable interest entities**[201](index=201&type=chunk) [Liquidity and Capital Resources](index=37&type=section&id=Liquidity%20and%20Capital%20Resources) **Liquidity significantly improved** by **June 30, 2025**, with **increased cash and working capital** from **private placements and warrants** Liquidity and Capital Resources | **Metric** | **June 30, 2025** | **December 31, 2024** | **Change** | | :-------------------- | :------------ | :---------------- | :------- | | **Cash and cash equivalents** | **$5,298,142** | **$1,352,373** | **+$3,945,769** | | **Working capital** | **$6,543,942** | **$2,446,105** | **+$4,097,837** | - **Net cash used in operating activities decreased significantly** to **$165,653** for the **six months ended June 30, 2025**, compared to **$1,504,704** in the prior year[202](index=202&type=chunk) - **Financing activities generated $4,111,422** in cash, including **$4,592,344** net proceeds from the **May PIPE Offering** and **$341,186** from **stock option exercises**, partially offset by **$500,000 promissory note payment** and **$325,000 legal fees** for the **June PIPE transaction**[203](index=203&type=chunk)[205](index=205&type=chunk)[206](index=206&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=38&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a **smaller reporting company**, **Tron Inc.** is **exempt from market risk disclosures** - As a '**smaller reporting company**,' **Tron Inc.** is **not required to provide quantitative and qualitative disclosures about market risk**[207](index=207&type=chunk) [Item 4. Controls and Procedures](index=38&type=section&id=Item%204.%20Controls%20and%20Procedures) Management deems **disclosure controls effective**, with **no material changes in internal control over financial reporting** - The company's **disclosure controls and procedures** are designed to provide reasonable assurance and are deemed effective by certifying officers[208](index=208&type=chunk) - **No material changes in internal control over financial reporting** were identified during the **six months ended June 30, 2025**, and the **year ended December 31, 2024**[209](index=209&type=chunk) - Management acknowledges that control systems provide only reasonable, not absolute, assurance due to inherent limitations and resource constraints[210](index=210&type=chunk) PART II - OTHER INFORMATION [Item 1. Legal Proceedings](index=39&type=section&id=Item%201.%20Legal%20Proceedings) The company reports **no material legal proceedings** - There are **no legal proceedings**[212](index=212&type=chunk) [Item 1A. Risk Factors](index=39&type=section&id=Item%201A.%20Risk%20Factors) As a **smaller reporting company**, **Tron Inc.** is **not required to provide risk factor disclosures** - As a '**smaller reporting company**,' **Tron Inc.** is **not required to provide risk factors**[213](index=213&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=39&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Details **unregistered equity sales** for services and an **equity investment** during **H1 2025** - During the **six months ended June 30, 2025**, the Company issued **75,000 shares** of **common stock** for services rendered, valued at **$44,387**[214](index=214&type=chunk) - The Company also issued **500,000 shares** of **common stock** as an **equity investment** in **Gameverse Inc.**, valued at **$190,500**[214](index=214&type=chunk) [Item 3. Defaults Upon Senior Securities](index=39&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reports **no defaults upon senior securities** - There are **no defaults upon senior securities**[215](index=215&type=chunk) [Item 4. Mine Safety Disclosures](index=39&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) **Mine safety disclosures are not applicable** to the company's operations - **Mine Safety Disclosures are not applicable**[216](index=216&type=chunk) [Item 5. Other Information](index=39&type=section&id=Item%205.%20Other%20Information) Updates on **capital structure**, including **preferred stock filings**, **increased authorized common stock**, and **change of control approval** - The Company filed **Amended & Restated Certificate of Designation of Series A Preferred Stock** (**May 23, 2025**) and **Certificate of Designation of Series B Preferred Stock** (**June 16, 2025**)[217](index=217&type=chunk) - As of **July 30, 2025**, **authorized capital** includes **100,000,000 common shares** and **10,000,000 preferred shares** (**1,000,000 Series A**, **100,000 Series B**). Outstanding shares: **33,468,011 common**, no **Series A preferred**, **100,000 Series B preferred**[218](index=218&type=chunk) - Stockholders approved a potential **change in control** via a **$100,000,000 PIPE Offering** to an institutional investor, involving **Series B Preferred Stock** convertible into **200,000,000 common shares** and warrants for **220,000,000 common shares**[219](index=219&type=chunk) - Stockholders also approved an amendment to increase **authorized common stock** from **100,000,000** to **1,000,000,000 shares**[219](index=219&type=chunk) - **Common Stock** holders have dividend rights (subject to preferred stock), **one vote per share**, no preemptive rights, and liquidation distribution rights after preferred stock[224](index=224&type=chunk)[225](index=225&type=chunk)[226](index=226&type=chunk)[227](index=227&type=chunk) - **Series A Preferred Stock** has a stated value of **$1,000 per share**, dividend rights equal to **common stock** on an as-if-converted basis, and voting rights based on a **$0.56 conversion price**[228](index=228&type=chunk)[229](index=229&type=chunk)[230](index=230&type=chunk) - **Series B Preferred Stock** has a stated value of **$1,000 per share**, voting rights based on a **$0.50 conversion price** (limited to **19.99%** of outstanding **common stock** without further approval), dividend rights equal to **common stock** on an as-if-converted basis, and liquidation preference over other preferred and **common stock**[231](index=231&type=chunk)[232](index=232&type=chunk)[233](index=233&type=chunk)[234](index=234&type=chunk) [Item 6. Exhibits](index=42&type=section&id=Item%206.%20Exhibits) Lists **all exhibits filed with Form 10-Q**, including **certificates, warrants, agreements, and certifications** - **Exhibits** include **Amended and Restated Certificate of Designation of Series A Preferred Stock**, **Certificate of Designation of Series B Preferred Stock**, various forms of **Common Stock Purchase Warrants** and **Placement Agent Warrants**[235](index=235&type=chunk) - Also included are **Securities Purchase Agreements**, **Placement Agency Agreement**, **Registration Rights Agreement**, **Sun Advisory Agreement**, **American Ventures Agreement**, and **Amendment No. 1 to Employment Agreements** for key officers[235](index=235&type=chunk) - **Certifications** required by **Rule 13a-14(d)/15d-14(d)** and **Section 906 of the Sarbanes-Oxley Act of 2002** are attached as **Exhibits 31.1, 31.2, 32.1, and 32.2**[235](index=235&type=chunk)[236](index=236&type=chunk) SIGNATURES [SIGNATURES](index=44&type=section&id=SIGNATURES) The report is **duly signed** on behalf of **Tron Inc.** by its **Principal Executive Officer**, **Richard Miller** - The report is **signed** by **Richard Miller**, **Chief Executive Officer** and **Principal Executive Officer**, on **August 08, 2025**[239](index=239&type=chunk)[240](index=240&type=chunk)

Company Overview - SRM Entertainment, Inc. has changed its corporate name to Tron Inc. to align with its transformation into a TRON treasury strategy company, effective July 17, 2025 [1] - The company will also change its ticker symbol to "TRON" on the Nasdaq Capital Market [1] - Tron Inc. is the largest publicly traded corporate holder of TRX, currently holding over 365 million TRX tokens [2] Corporate Strategy - The transition to Tron Inc. marks a pivotal moment in the company's strategy to enhance long-term value through Tron treasury management [3] - The CEO believes that TRX will play a critical role in building a next-generation global payment rail and a more inclusive financial infrastructure [3] Industry Context - TRON, founded in 2017, is a decentralized blockchain that supports smart contracts and decentralized applications, offering lower fees and faster transaction times compared to leading blockchains like Bitcoin and Ethereum [4] - As of July 13, 2025, TRON hosts approximately 81.7 billion in US dollar stablecoins [4]

Core Insights - SRM Entertainment, Inc. has successfully staked its treasury holdings of 365,096,845 TRON (TRX) tokens, enhancing staking yield to up to 10% per annum through JustLend [2][3] - The company aims to create long-term value for shareholders by leveraging the global adoption of cryptocurrency and blockchain technology [3][4] - SRM plans to implement a dividend policy and change its name to TRON Inc. to align with its new strategic direction [3][4] Company Strategy - The company has appointed Weike Sun as Chairman of the Board and entered into an agreement with TRON Blockchain Founder Justin Sun for strategic advisory [3] - SRM's treasury strategy is designed to unlock new value for shareholders, particularly as blockchain technology gains wider adoption [4] - The company focuses on cross-border settlement in US dollar stablecoin, positioning itself as an industry leader [4] Industry Context - TRON, founded in 2017, is a decentralized blockchain that supports smart contracts and decentralized applications, known for lower fees and faster transaction times compared to Bitcoin and Ethereum [6] - As of June 29, 2025, TRON hosts approximately 80.7 billion in US dollar stablecoins, indicating its significant role in the cryptocurrency market [6]

Group 1 - SRM Entertainment has seen a cumulative increase of 661.38% this week [1] - The previous largest weekly increase for the company since its listing in August 2023 was 56.00% in November of the same year [1] - Media reports indicate that Tron, owned by Sun Yuchen, will complete its listing through a reverse merger with the Nasdaq-listed SRM [1]

Core Insights - Dominari Holdings Inc. announced a $100 million equity investment for SRM Entertainment, with the potential for a total investment of $210 million upon full warrant exercise [1][2] - Justin Sun, founder of the TRON blockchain, will join SRM as an advisor, indicating a strategic partnership [2] - The investment will enable SRM to initiate a TRON Token Treasury Strategy, capitalizing on the growing adoption of blockchain and digital assets [4] Company Overview - SRM Entertainment designs and manufactures custom merchandise for major theme parks and entertainment venues, distributing products worldwide [7] - The company’s products are based on popular entertainment franchises and include specialty items like the patented Sip With Me cups [7] Industry Context - The transaction highlights increasing institutional confidence in blockchain technology as a foundational layer for global finance [4] - TRON, founded in 2017, supports smart contracts and decentralized applications, focusing on low-cost, high-speed transactions, particularly for stablecoin transfers [3]

Group 1 - SRM Entertainment maintains over 300% increase, reaching a daily high of $6.70 [1] - Sun Yuchen's Tron plans to pursue a "backdoor listing" [1]

Core Insights - SRM Entertainment, Inc. has entered into a Securities Purchase Agreement for a $100,000,000 equity investment to initiate a TRON Token Treasury Strategy, with Justin Sun as an advisor [1][4] - The investment will involve issuing 100,000 shares of Series B Convertible Preferred Stock, convertible into 200 million shares of common stock at a price of $0.50 per share, along with 220 million warrants [2] - The strategic investment is valued at $210,000,000 upon full exercise of the warrants, aimed at creating long-term value for shareholders through blockchain adoption [4] Company Overview - SRM Entertainment designs and manufactures custom merchandise for major theme parks and entertainment venues, distributing products worldwide [9] - The company is associated with multi-billion-dollar entertainment franchises featured in popular media [9] TRON Blockchain Overview - TRON is a decentralized blockchain founded in 2017, supporting smart contracts and decentralized applications, known for lower fees and faster transaction times compared to Bitcoin and Ethereum [10] - As of June 15, 2025, TRON hosts approximately 78.7 billion in US dollar stablecoins [10] - TRON aims to be the preferred protocol for on-chain settlement, with over 310 million international user accounts and average daily transactions exceeding $20 billion [5][6]

Core Viewpoint - SRM Entertainment, Inc. has successfully closed a private investment in public equity (PIPE) financing, raising gross proceeds of $5 million from an institutional investor [1][2]. Group 1: Financing Details - The company sold 5,000 shares of Series A Convertible Preferred Stock, which can be converted into approximately 8,928,571 shares of common stock at a conversion price of $0.56 per share [2]. - Each unit sold consists of one share of Series A Convertible Preferred Stock and one warrant, priced at $1,000 per unit, with the warrants exercisable at $0.65 per share for two years [2]. - The net proceeds from the offering will be used for general corporate purposes, including working capital [2]. Group 2: Company Overview - SRM Entertainment designs and manufactures licensed media-themed merchandise, including toys and souvenirs for major theme parks and entertainment venues [6]. - The company’s products are based on popular multi-billion-dollar entertainment franchises and are distributed globally at various attractions, including Walt Disney Parks and Resorts and Universal Parks and Destinations [6]. - SRM's design team has created specialty products for notable landmarks and events, including exclusive items featuring licensed characters [6].

Core Viewpoint - SRM Entertainment, Inc. has entered into a PIPE financing agreement expected to generate approximately $5 million in gross proceeds for the company [1] Group 1: Financing Details - The company is selling 5,000 shares of Series A Convertible Preferred Stock, convertible into 10 million shares of common stock at a conversion price of $0.50 per share [3] - Each share of Series A Convertible Preferred Stock and one warrant is priced at $1,000, with warrants exercisable at $0.65 per share for two years [3] - Dominari Securities LLC acted as the sole placement agent for the PIPE financing [4] Group 2: Use of Proceeds - The net proceeds from the offering will be used for general corporate purposes, including working capital [2] Group 3: Company Overview - SRM Entertainment designs and manufactures licensed media-themed merchandise, including toys and souvenirs for major theme parks and entertainment venues [7] - The company’s products are based on popular multi-billion-dollar entertainment franchises and are distributed globally at various attractions [7]

[PART I - FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) [Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements for Q1 2025, highlighting a reduced net loss and auditor's going concern doubt due to a $6.34 million accumulated deficit - The company's auditors have raised doubt about its ability to continue as a going concern due to accumulated deficits of **$6.34 million** and cash flow used in operations[31](index=31&type=chunk) Consolidated Balance Sheet Highlights (Unaudited) | Account | March 31, 2025 ($) | December 31, 2024 ($) | | :--- | :--- | :--- | | **Total Current Assets** | $3,030,587 | $3,462,457 | | **Total Assets** | **$5,810,762** | **$6,307,303** | | **Total Liabilities** | $828,046 | $1,016,352 | | **Total Shareholders' Equity** | **$4,982,716** | **$5,290,951** | Consolidated Statement of Operations Highlights (Unaudited) | Metric | Three Months Ended Mar 31, 2025 ($) | Three Months Ended Mar 31, 2024 ($) | | :--- | :--- | :--- | | Sales | $1,089,634 | $1,006,357 | | Gross Profit | $266,535 | $163,547 | | Operating Expenses | $913,910 | $1,878,553 | | **Net Loss** | **($646,586)** | **($1,710,004)** | | **Basic & Diluted Loss Per Share** | **($0.04)** | **($0.17)** | Consolidated Statement of Cash Flows Highlights (Unaudited) | Cash Flow Activity | Three Months Ended Mar 31, 2025 ($) | Three Months Ended Mar 31, 2024 ($) | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | ($206,514) | ($1,170,367) | | Net Cash Used in Financing Activities | ($249,929) | $0 | | **Net Decrease in Cash** | **($456,443)** | **($1,170,367)** | | **Cash at End of Period** | **$895,930** | **$1,810,374** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2025 performance, highlighting an 8.3% revenue increase, reduced operating expenses, a decreased net loss, and recent corporate activities including financing and a Nasdaq listing deficiency - The company received a deficiency letter from Nasdaq on October 21, 2024, for its stock price falling below the **$1.00** minimum bid requirement, with a deadline of April 21, 2025, to regain compliance[104](index=104&type=chunk)[106](index=106&type=chunk) - On September 3, 2024, the company acquired assets related to the movie "The Kid" from Suretone Entertainment, Inc., a related party, for **$2.89 million**, paid through cash, stock, and a secured promissory note[67](index=67&type=chunk)[110](index=110&type=chunk) - The company raised approximately **$1.7 million** in a registered direct offering in December 2024 and approximately **$1.04 million** in another offering in October 2024[101](index=101&type=chunk)[109](index=109&type=chunk) Q1 2025 vs Q1 2024 Performance | Metric | Three Months ended March 31, 2025 ($) | Three Months ended March 31, 2024 ($) | | :--- | :--- | :--- | | Sales | $1,089,634 | $1,006,357 | | Gross Profit | $266,535 | $163,547 | | Operating Expense | ($913,910) | ($1,878,553) | | Net Loss | ($646,586) | ($1,710,004) | - The decrease in operating expenses was primarily due to a significant reduction in stock-based compensation, which was **$147,780** in Q1 2025 compared to **$1,022,455** in Q1 2024[137](index=137&type=chunk) - As of March 31, 2025, the company had **$895,930** in cash and cash equivalents, a decrease of **$456,443** from December 31, 2024, with working capital at **$2.2 million**[141](index=141&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=29&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exempt from this disclosure requirement as it qualifies as a "smaller reporting company" - As a "smaller reporting company", SRM Entertainment, Inc. is not required to provide the information required by this Item[144](index=144&type=chunk) [Controls and Procedures](index=29&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded the company's disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting during the quarter - The Company's certifying officers have concluded that the Company's disclosure controls and procedures are effective in reaching a reasonable level of assurance[146](index=146&type=chunk) - There were no changes in internal control over financial reporting during the three months ended March 31, 2025, that materially affected, or are reasonably likely to materially affect, internal controls[147](index=147&type=chunk) [PART II - OTHER INFORMATION](index=31&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) [Legal Proceedings](index=31&type=section&id=Item%201.%20Legal%20Proceedings) The company reports no legal proceedings - None[150](index=150&type=chunk) [Risk Factors](index=31&type=section&id=Item%201A.%20Risk%20Factors) The company is exempt from this disclosure requirement as it qualifies as a "smaller reporting company" - As a "smaller reporting company", SRM Entertainment, Inc. is not required to provide the information required by this Item[151](index=151&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=31&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reports no unregistered sales of equity securities during the period - None[152](index=152&type=chunk) [Defaults Upon Senior Securities](index=32&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reports no defaults upon senior securities - None[154](index=154&type=chunk) [Mine Safety Disclosures](index=32&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's business - Not applicable[155](index=155&type=chunk) [Other Information](index=32&type=section&id=Item%205.%20Other%20Information) The company reports no other information - None[156](index=156&type=chunk) [Exhibits](index=32&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including officer certifications and Interactive Data Files (XBRL) for financial reporting - The exhibits filed with this report include Section 302 and Section 906 certifications by the Principal Executive Officer and Principal Financial Officer, as well as Interactive Data Files (Inline XBRL)[157](index=157&type=chunk)