Financial Performance - The Company reported a net loss of $1,710,004 for the three months ended September 30, 2024, compared to a net loss of $38,002 for the same period in 2023, resulting in a basic loss per share of $0.17[104] - For the three months ended March 31, 2024, the Company reported sales of $1,006,357, a decrease from $1,086,888 in the same period of 2023, reflecting a decline of approximately 7.4%[118] - Gross profit for the three months ended March 31, 2024, was $163,547, down from $235,822 in 2023, indicating a decrease of about 30.6%[118] - The Company incurred a net loss of $1,710,004 for the three months ended March 31, 2024, compared to a net loss of $38,002 in 2023, representing a significant increase in losses[122] - Gross margins decreased by 5.4% due to increased manufacturing costs without a corresponding increase in product pricing[119] - Interest income for the three months ended March 31, 2024, was $5,002, while interest expense was $22,240, indicating a net interest expense of $17,238[121] IPO and Share Issuance - The Company completed an IPO, selling 1,250,000 shares at $5.00 per share, generating gross proceeds of approximately $6.25 million and net proceeds of approximately $5.3 million after expenses[97] - Following the separation from Jupiter Wellness, Inc., the Company issued 6,500,000 shares of common stock, representing 79.3% of the outstanding shares post-issuance[96] - The weighted average number of common shares outstanding increased from 6,500,000 in 2023 to 10,043,522 in 2024[104] Operating Expenses - Total operating expenses surged to $1,878,553 for the three months ended March 31, 2024, compared to $251,584 in 2023, marking an increase of approximately 646.5%[120] - The increase in operating expenses was primarily due to costs associated with being a public company, including $443,274 in fees and $536,000 in stock-based compensation[120] Company Structure and Ownership - As of March 31, 2024, Jupiter owns approximately 35% of the Company's common stock[86] - The Company is classified as an "emerging growth company," allowing it to take advantage of certain reporting exemptions[99] Product and Market Strategy - The Company has a diverse product range priced between $2.50 and $50.00, catering to a broad consumer demographic[94] - The Company has established licensing relationships with major content providers, including Walt Disney Parks and Resorts and Universal Studios, enhancing its product offerings[93] - The Company aims to leverage its low-fixed cost production model to dynamically manage product releases and capitalize on pop culture trends[95] Tax and Accounting - The deferred tax asset as of March 31, 2024, was approximately $847,803, fully offset by a valuation allowance due to the Company's lack of earnings history[111] - The Company has not identified any recent accounting pronouncements that apply to its operations[116]
SRM Entertainment(SRM) - 2024 Q1 - Quarterly Report