PIPE Offerings - The Company raised approximately $5 million from the May 2025 PIPE Offering, issuing 5,000 shares of Series A Convertible Preferred Stock convertible into 8,928,571 shares of Common Stock at a conversion price of $0.56 per share[150]. - The June 2025 PIPE Offering involved the issuance of 100,000 shares of Series B Convertible Preferred Stock, convertible into 200,000,000 shares of Common Stock at a conversion price of $0.50 per share, with warrants to acquire up to 220,000,000 shares of Common Stock[157]. - The company completed a $100,000,000 private investment in public equity (PIPE Offering), issuing 100,000 shares of Series B Convertible Preferred Stock, convertible into 200,000,000 shares of common stock[182]. - The May PIPE Offering raised aggregate proceeds of $4,592,344 net of associated costs and fees, involving 5,000 shares of Series A Convertible Preferred Stock convertible into 8,928,571 shares of Common Stock[222]. - The June PIPE Offering involved 100,000 shares of Series B Convertible Preferred Stock, convertible into 200,000,000 shares of Common Stock, with a purchase price of $100 million paid in TRX tokens[223]. - The May Investor exercised all 8,928,571 of the May PIPE Warrants for aggregate proceeds of $5,803,571 during July through September 2025[224]. - The June Investor exercised the June PIPE Warrants for 312,500,100 TRX tokens valued at $110,000,000 on August 27, 2025[224]. - The exercise price for the May PIPE Warrants is set at $0.65 per share, while the June PIPE Warrants have an exercise price of $0.50 per share[150][157]. Financial Performance - For the three months ended September 30, 2025, the company reported a net income of $12,174,266, compared to a net loss of $1,128,872 for the same period in 2024[192]. - Revenue for the three months ended September 30, 2025, was $1,104,293, a 25.9% increase from $876,392 in the same period of 2024[209]. - Revenue for the nine months ended September 30, 2025, was $3,536,856, compared to $3,390,676 for the same period in 2024, reflecting a 4.3% increase[215]. - Gross profit for the three months ended September 30, 2025, was $297,898, up from $196,518 in 2024, indicating a 51.5% increase[209]. - Operating expenses for the three months ended September 30, 2025, were $954,646, down 28.2% from $1,328,851 in 2024[211]. - Net income for the nine months ended September 30, 2025, was $12,995,535, compared to a net loss of $3,359,847 in 2024[218]. - Operating expenses for the nine months ended September 30, 2025, were $2,904,962, a decrease of 28.3% from $4,058,546 in 2024[216]. - Unrealized gain on digital asset investment for the three months ended September 30, 2025, was $13,959,967, with unrealized income from digital assets at $2,258,770[212]. - Deferred tax liability as of September 30, 2025, was approximately $3,454,510, primarily due to unrealized gains on digital assets[200]. Shareholder Information - The weighted average number of shares of common stock outstanding during the three months ended September 30, 2025, was 110,045,018, significantly up from 10,581,558 in the same period of 2024[193]. - The basic earnings per share for the three months ended September 30, 2025, was $0.11, a recovery from a loss of $0.11 in the same period of 2024[193]. - The company increased the total number of authorized shares of common stock from 100,000,000 to 1,000,000,000 as part of the Charter Amendment approved on June 15, 2025[182]. - A total of 1,270,000 shares of common stock were issued in connection with options exercised, generating total proceeds of $696,007 during the nine months ended September 30, 2025[225]. Corporate Strategy and Operations - The Company plans to use proceeds from the PIPE offerings for general corporate and working capital purposes[151]. - The Company has adopted a Treasury Reserve Policy to manage its treasury assets, primarily consisting of TRX tokens and cash assets exceeding working capital requirements[139]. - The Company aims to accumulate TRX tokens over the long term without setting a specific target for the amount held[140]. - The Company has developed a low-fixed cost production model, allowing it to adapt quickly to market trends and content releases[149]. - The company believes inflation has had a negligible effect on operations and can offset inflationary increases by increasing sales and improving efficiency[219]. Cash and Working Capital - As of September 30, 2025, the company had approximately $10,603,681 in cash and cash equivalents, an increase of $9,251,308 from $1,352,373 as of December 31, 2024[220]. - The company's working capital as of September 30, 2025, was approximately $11,928,163, reflecting an increase of $9,482,058 from $2,446,105 at December 31, 2024[220]. - Net cash used in operating activities during the nine months ended September 30, 2025, totaled $1,015,685, a decrease from $1,681,081 used during the same period in 2024[221]. Business Relationships - The Company has established licensing relationships with major content providers, including Walt Disney Parks and Resorts and Universal Studios, to enhance its toy and souvenir business[147]. - The average price range for the Company's products is between $2.50 and $50.00, catering to a diverse consumer base[148]. Corporate Changes - The company underwent a name change to "Tron Inc." and changed its trading symbol to "TRON" on the Nasdaq Capital Market effective July 17, 2025[179]. - The company appointed three new board members, including Weike Sun as Chairman, as part of the changes associated with the PIPE Offering[172]. - The company is classified as an "emerging growth company," allowing it to take advantage of certain exemptions from reporting requirements[187]. - The company reported no cash equivalents as of September 30, 2025, or December 31, 2024[191].
SRM Entertainment(SRM) - 2025 Q3 - Quarterly Report