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 September 30, 2024

☐	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

SRM ENTERTAINMENT, INC.

(Exact name of registrant as specified in charter)

Nevada		32-0686534
(State or other jurisdiction		(IRS Employer
of incorporation or organization)		Identification No.)

1061 E. Indiantown Road, Suite 110
Jupiter, FL		33477
(Address of principal executive offices)		(Zip Code)

(407) 230-8100

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol		Name of exchange on which registered
Common Stock, $.0001 par value per share		SRM		Nasdaq

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☐ YES ☒ NO

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ YES ☐ NO

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) ☐ YES ☒ NO

As of November 12, 2024, there were 13,876,477 shares of the registrant’s common stock outstanding.

FORM 10-Q TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION

Item 1.	Financial Statements	F-1

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	4

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	11

Item 4.	Controls and Procedures	11

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	12

Item 1A	Risk Factors	12

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	12

Item 3	Defaults Upon Senior Securities	13

Item 4.	Mine Safety Disclosures	13

Item 5.	Other Information	13

Item 6.	Exhibits	13

SIGNATURES		14

SRM Entertainment, Inc. Financial Statements for the Nine Months ended September 30, 2024 and 2023	Page

Condensed Consolidated Balance Sheets as of September 30, 2024 (Unaudited) and December 31, 2023 (Audited)	F-2

Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2024 and 2023 (Unaudited)	F-3

Condensed Consolidated Statements of Changes in Shareholders’ Equity (Deficit) for the Nine Months Ended September 30, 2024 and 2023 (Unaudited)	F-4

Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2024 and 2023 (Unaudited)	F-5

Notes to the Financial Statements (Unaudited)	F-6

	September 30,			December 31,
	2024			2023
	(Unaudited)			(Audited)

Assets
Cash	$	1,026,396		$	2,980,741
Account receivable		544,189			707,035
Inventory		843,880			307,005
Prepaid expenses and deposits		357,023			468,687
Other current assets		34,430			34,144
Total current assets		2,805,918			4,497,612

Intangible assets (net of amortization) – Related Party		2,868,892			-
Fixed assets, net of depreciation		56,680			45,462
Total assets	$	5,731,490		$	4,543,074

Liabilities
Accounts Payable	$	689,284		$	126,451
Accrued and other liabilities		261,430			292,425
Secured loan (net) from Related Party		1,508,877			-
Total liabilities		2,459,591			418,876

Shareholders’ Equity (Deficit)
Preferred stock, $0.0001 par value, 10,000,000 shares authorized of which none are issued		-			-
Common stock, $0.0001 par value, 100,000,000 shares authorized 12,165,000 and 9,765,000 issues and outstanding at September 30, 2024 and December 31, 2023, respectively		1,217			977
Additional paid-in capital		7,666,425			4,805,117
Accumulated earnings (deficit)		(4,717,743	)		(1,357,896	)
Common Stock Payable		322,000			676,000
Total Shareholders’ Equity (Deficit)		3,271,899			4,124,198

Total Liabilities and Shareholders’ Equity (Deficit)	$	5,731,490		$	4,543,074


					Common		Additional
	Common Stock				Stock		Paid-In			Accumulated
	Shares		Amount		Payable		Capital			Deficits			Total
Balance, December 31, 2022		6,500,000	$	650	$	-	$	(699,207	)	$	695,963		$	(2,594	)
Net loss for the three months ended March 31, 2023		-		-		-		-			(38,002	)		(38,002	)
Balance March 31, 2023		6,500,000		650		-		(699,207	)		657,961			(40,596	)
Net income for the three months ended June 30, 2023		-		-		-		-			228,022			228,022
Balance June 30, 2023		6,500,000		650		-		(699,207	)		885,983			187,426
Stock payable for services		-		-		934,800								934,800
Net proceeds from public offering		1,250,000		125		-		5,168,325						5,168,450
Acquisition of SRM Entertainment Ltd		1,700,000		170		-		(350,471	)					(350,301	)
Net loss for the three months ended September 30, 2023		-		-		-		-			(1,486,749	)		(1,486,749	)
Balance September 30, 2023		9,450,000	$	945	$	934,800	$	4,118,647		$	(600,766	)	$	4,453,626


	Nine Months Ended September 30
	2024			2023
Cash flows from operating activities:
Net (loss)	$	(3,359,847	)	$	(1,296,729	)
Adjustment to reconcile net loss to operating activities
Common stock issued for services		791,000			934,800
Fair value of Officer, Director and Employee options		573,548			-
Depreciation and amortization		36,154			3,764
Changes in operating assets and liabilities:
Accounts receivable		162,846			(68,882	)
Inventory		(536,875	)		40,913
Prepaid expenses		111,664			19,701
Accounts payable		562,833			(157,481	)
Accrued expenses		(22,118	)		77,440
Other assets		(286	)		33,685
Net cash provided by (used in) operating activities		(1,681,081	)		(412,789	)

Cash flows from investing activities:
Cash paid for fixed assets		(23,264	)		(42,780	)
Cash paid for Intangible Assets to Related Party		(250,000	)		-
Acquisition		-			(350,301	)
Cash (used in) investing activities		(273,264	)		(393,081	)

Financing activities:
Net cash received from initial IPO		-			5,168,450
Loans to affiliates		-			7,699
Cash payment on promissory note		-			(1,488,966	)
Cash provided by (used in) financing activities		-			3,687,183

Net increase (decrease) in cash and cash equivalents		(1,954,345	)		2,881,313

Cash and cash equivalents at the beginning of the period		2,980,741			453,516

Cash and cash equivalents at the end of the period	$	1,026,396		$	3,334,829

SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest	$	-		$	55,847
Cash paid for income taxes	$	-		$	-
NON-CASH ITEMS
Promissory Note issued for intangible assets	$	1,500,000		$	-
Common stock issued for intangible assets	$	1,143,000		$	-

	September 30,			December 31
	2024			2023
Fixed Assets
Tooling and Molds	$	56,425		$	43,161
Computer equipment and software		21,285			11,285
Total fixed assets		77,710			54,446
Accumulated depreciation		(21,030	)		(8,984	)
Net fixed assets	$	56,680		$	45,462

	Number of		Term		Exercise		Market Price on Grant		Computed Volatility			Fair
Reporting Date	Options		(Years)		Price		Date		Percentage			Value
10/24/2023		90,000		2.5	$	1.61	$	0.80		86	%	$	73,702
02/21/2024		970,000		2.5	$	1.21	$	1.21		77	%	$	573,548

	Three Months Ended September 30,						Nine Months Ended September 30,
	2024			2023			2024			2023
Numerator
Net income (loss)	$	(1,128,872	)	$	(1,486,749	)	$	(3,359,847	)	$	(1,296,729	)

Denominator:
Denominator for basic earnings per share - Weighted- average common issued and outstanding during the period		10,581,558			8,007,065			10,389,770			7,007,875
Denominator for diluted earnings per share		10,581,558			8,007,065			10,389,770			7,007,875

Basic (loss) per share	$	(0.10	)	$	(0.19	)	$	(0.32	)	$	(0.19	)
Diluted (loss) per share	$	(0.10	)	$	(0.19	)	$	(0.32	)	$	(0.19	)

Exhibit Number		Description
(31)		Rule 13a-14 (d)/15d-14d) Certifications
31.1		Section 302 Certification by the Principal Executive Officer
31.2		Section 302 Certification by the Principal Financial Officer and Principal Accounting Officer
(32)		Section 1350 Certifications
32.1 *		Section 906 Certification by the Principal Executive Officer
32.2		Section 906 Certification by the Principal Financial Officer and Principal Accounting Officer
101*		Interactive Data File
101.INS		Inline XBRL Instance Document
101.SCH		Inline XBRL Taxonomy Extension Schema Document
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase document
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

	SRM Entertainment, Inc.

	/s/ Richard Miller
	Richard Miller
Dated: November 13, 2024	Chief Executive Officer (Principal Executive Officer)

SEC Form 10-Q filed by SRM Entertainment Inc.