UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 or ☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________ to ______________ Commission File Number 001-41768 TRON INC. (Exact name of registrant as specified in charter) Nevada 32-0686534 (State or other jurisd ...

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]

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)

Core Insights - SRM Entertainment has secured three major new toy programs with a leading theme park, based on a global movie franchise that has grossed over $5 billion globally [1] - The partnership was awarded due to SRM's existing product successes, creativity, innovation, and competitive pricing [1] - The new movie-themed products will be exclusive to the theme park's global locations, enhancing SRM's reputation as a trusted manufacturing partner [1] Company Overview - SRM Entertainment designs, develops, and manufactures custom merchandise, including toys and souvenirs for major theme parks and entertainment venues [3] - The company’s products are based on award-winning multi-billion-dollar entertainment franchises and are distributed worldwide at various attractions, including Walt Disney Parks and Resorts and Universal Parks and Destinations [3] - SRM's design team has created specialty dolls, plush toys, and other products for notable landmarks and events, showcasing their ability to deliver high-quality merchandise [3] Product Development - The new line of collectible toys is inspired by an acclaimed film franchise, ensuring authenticity and global appeal [2] - SRM's design team is recognized for bringing characters and toys to life, providing unique merchandise experiences for millions of visitors [2] - The exclusive products are expected to resonate with fans worldwide, highlighting SRM's creative manufacturing capabilities [3]