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]

Core Viewpoint - SRM Entertainment, Inc. has received a 180-day extension from Nasdaq to regain compliance with the minimum bid price requirement of $1 per share, allowing the company until October 20, 2025, to meet this requirement [1][2] 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 multi-billion-dollar entertainment franchises and are distributed globally at various attractions, including Walt Disney Parks and Resorts and Universal Parks and Destinations [3] - SRM's design team has created specialty products for notable landmarks and events, including exclusive items like the Sip With Me cups featuring licensed characters [3] Strategic Focus - The company is committed to executing its strategic roadmap, which includes expanding product lines, entering new distribution channels, and driving consistent revenue growth [2] - The CEO emphasized that this focused approach should positively impact SRM's stock price in the long run [2]

Core Viewpoint - SRM Entertainment, Inc. maintains a robust business model that allows it to navigate current trade conditions effectively, particularly through its manufacturing in China and the transfer of shipping responsibilities to customers [1][2][4]. Group 1: Business Model and Operations - SRM's business model includes passing the title of products to customers, which mitigates the impact of shipping, tariffs, and other duty-related expenses [1]. - The company holds approximately $800,000 in inventory of proprietary products in the U.S., which includes popular items like plush toys and drinkware, providing a buffer against supply chain disruptions [1]. - SRM services a diverse customer base across various entertainment sectors, which aids in managing trade-related disruptions [2]. Group 2: Customer Demand and Product Popularity - The company continues to receive re-orders from major theme park customers, indicating strong demand for its themed merchandise [3]. - International theme park customers are not affected by U.S. tariffs, further supporting SRM's sales [3]. Group 3: Strategic Initiatives - SRM is actively expanding its manufacturing capacity into new countries and exploring domestic manufacturing solutions to enhance product quality and supply chain efficiency [4]. - The company is confident in maintaining strong customer relationships despite the evolving trade landscape, with a focus on flexibility through its domestic inventory [5]. Group 4: Product Offerings - SRM designs and manufactures custom merchandise for major theme parks and entertainment venues, with products based on popular multi-billion-dollar franchises [6]. - The company has developed exclusive products like the Sip With Me cups, featuring licensed characters, which are positioned for success in the market [6].

Core Viewpoint - SRM Entertainment has a robust business model that allows it to navigate current trade conditions effectively, particularly through its manufacturing in China and the transfer of shipping responsibilities to customers [1][2]. Group 1: Business Model and Operations - SRM's business model includes passing the title of products to customers, which helps mitigate risks associated with shipping and tariffs [1]. - The company maintains a domestic inventory valued at approximately $800,000, which includes key products like plush toys and drinkware, providing a buffer against supply chain disruptions [1]. - SRM services a diverse customer base across various entertainment sectors, enhancing its ability to manage trade-related disruptions [2]. Group 2: Customer Demand and Product Strategy - The company continues to receive re-orders from major theme park customers, indicating strong demand for its themed merchandise [3]. - International theme park customers are not affected by U.S. tariffs, which supports SRM's sales [3]. - SRM is expanding its manufacturing capacity into new countries and exploring domestic manufacturing options to maintain product quality and competitive pricing [4]. Group 3: Future Outlook and Strategic Initiatives - The CEO of SRM expressed confidence in maintaining strong customer relationships amid evolving trade conditions, highlighting the readiness of products for the upcoming Smurfs movie release [5]. - The company is focused on proactive strategies to mitigate the impact of tariffs, ensuring continued strong operations and product delivery [4].

Financial Performance - The company reported a net loss of $4,339,345 for the year ended December 31, 2024, compared to a net loss of $2,053,859 for 2023, reflecting an increase in losses of approximately 111%[149] - Revenues for the year ended December 31, 2024, were $4,311,382, a decrease of 25.3% from $5,760,533 in 2023[165] - Total operating expenses for 2024 were $5,194,576, an increase of 54.1% from $3,371,309 in 2023[166] - Net loss for the year ended December 31, 2024, was $4,339,345, compared to a net loss of $2,053,859 in 2023, representing an increase in losses of 111.1%[170] Share Information - The weighted average number of shares outstanding increased from 7,688,523 in 2023 to 11,623,191 in 2024, resulting in a basic loss per share of $0.37 for 2024 compared to $0.27 for 2023[149] Tax and Assets - The company has a deferred tax asset of $1,377,232 for 2024, fully offset by a valuation allowance, compared to $497,655 for 2023[156] Acquisitions - The acquisition of SRM Ltd and SRM Inc occurred on August 14, 2023, with financial statements prepared using Reverse Acquisition Accounting[132] Revenue Generation - The company generates revenue from the sale of products directly to end users or distributors, recognizing revenue when control of goods is transferred[141] - The company has established licensing relationships with major content providers, including Walt Disney and Universal Studios, enhancing its product offerings[137] - The company’s products are priced between $2.50 and $50.00, allowing for frequent consumer engagement across diverse demographic groups[138] Production and Management - The company has developed a low-fixed cost production model, enabling dynamic management of product offerings in response to pop culture trends[139] - The company has no allowance for doubtful collections recognized during the years ended December 31, 2024, and 2023, indicating effective receivables management[152] Compensation and Expenses - Stock-based compensation in 2024 amounted to $1,861,743, significantly higher than $427,702 in 2023, reflecting increased investor relations and public awareness efforts[167][168] Cash Flow - Cash and cash equivalents as of December 31, 2024, were approximately $1,352,373, a decrease of 54.6% from $2,980,741 in 2023[173] - Net cash used in operating activities for 2024 was $2,856,359, compared to $766,877 in 2023, indicating a worsening cash flow situation[174] - Net cash provided by financing activities in 2024 was $1,501,255, down from $3,687,058 in 2023, reflecting reduced capital raised[175][176] - Net cash used in investing activities in 2024 was $273,264, compared to $392,956 in 2023, indicating a decrease in investment outflows[177] Future Plans - The company plans to benefit from the opening of a new theme park in Orlando in 2025, which is expected to generate increased revenues[165] - The company is in commercialization mode while developing next-generation products and expanding its product lines[172]

Core Insights - SRM Entertainment, Inc. will showcase its latest toy innovations at the 119th Toy Fair in New York City from March 1 to March 4, 2025 [1] - The company aims to capture the imagination of retailers and consumers with its new product offerings [2] Product Innovations - The new interactive light sticks are designed for immersive experiences, allowing users to customize colors and patterns via a custom app, ideal for concerts and special events [2] - Light-up bracelets are introduced to enhance experiences at concerts and theme parks, featuring multiple light modes and colors [3] - The company will launch officially licensed Smurfs collectible Sip with Me drinking cups in July 2025, coinciding with the release of the Smurfs Movie [4] - SRM is expanding its line of plush backpack clips with new designs, allowing children to personalize their backpacks [5] Industry Engagement - The Toy Fair is a significant event for SRM, providing opportunities to connect with key decision-makers in the toy and merchandise sector [6] - The event is expected to generate new business and drive growth for the company [6] Company Overview - SRM Entertainment designs and manufactures custom merchandise, including toys 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 [7] - SRM's design team has created specialty products for various attractions, enhancing the visitor experience [8]

Core Insights - SRM Entertainment has no immediate plans to raise capital despite receiving numerous inquiries from investors [1] - The company has relocated its headquarters to Winter Park, Florida, to better serve key theme park customers [1] - SRM Entertainment launched its official X account to enhance communication with shareholders and provide updates on company developments [2] Company Overview - SRM Entertainment designs, develops, and manufactures custom merchandise, including toys and souvenirs for major theme parks and entertainment venues [4] - 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 [4] - SRM's design team has created specialty products for notable landmarks and events, including exclusive-patented Sip With Me cups featuring popular characters [4]