SRM Entertainment(SRM) - 2025 Q1 - Quarterly Report

PART I - FINANCIAL INFORMATION Financial Statements 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 $6.34 million and cash flow used in operations[31] Consolidated Balance Sheet Highlights (Unaudited) | Account | March 31, 2025 ($) | 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 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][106] - 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][110] - The company raised approximately $1.7 million in a registered direct offering in December 2024 and approximately $1.04 million in another offering in October 2024[101][109] Q1 2025 vs Q1 2024 Performance | Metric | Three Months ended March 31, 2025 ($) | 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] - 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] Quantitative and Qualitative Disclosures About Market Risk 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] Controls and Procedures 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] - 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] PART II - OTHER INFORMATION Legal Proceedings The company reports no legal proceedings - None[150] Risk Factors 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] Unregistered Sales of Equity Securities and Use of Proceeds The company reports no unregistered sales of equity securities during the period - None[152] Defaults Upon Senior Securities The company reports no defaults upon senior securities - None[154] Mine Safety Disclosures This item is not applicable to the company's business - Not applicable[155] Other Information The company reports no other information - None[156] Exhibits 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]