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 June 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 August 05, 2024, there were 10,415,500 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	10

Item 4.	Controls and Procedures	10

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	11

Item 1A	Risk Factors	11

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	11

Item 3	Defaults Upon Senior Securities	12

Item 4.	Mine Safety Disclosures	12

Item 5.	Other Information	12

Item 6.	Exhibits	12

SIGNATURES		13

	Page

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

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

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

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

Notes to the Financial Statements (Unaudited)	F-6

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

Assets
Cash	$	1,452,773		$	2,980,741
Account receivable		724,110			707,035
Inventory		737,980			307,005
Prepaid expenses and deposits		341,419			468,687
Other current assets		41,930			34,144
Total current assets		3,298,212			4,497,612

Fixed assets, net of depreciation		61,480			45,462
Total assets	$	3,359,692		$	4,543,074

Liabilities
Accounts Payable	$	65,399		$	126,451
Accrued and other liabilities		239,022			292,425
Total Liabilities		304,421			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 10,265,500 and 9,765,500 issues and outstanding at June 30, 2024 and December 31, 2023, respectively		1,027			977
Additional paid-in capital		6,166,615			4,805,117
Accumulated earnings (deficit)		(3,588,871	)		(1,357,896	)
Common Stock Payable		476,500			676,000
Total Shareholders’ Equity (Deficit)		3,055,271			4,124,198

Total Liabilities and Shareholders’ Equity (Deficit)	$	3,359,692		$	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

					Common			Additional
	Common Stock				Stock			Paid-In		Accumulated
	Shares		Amount		Payable			Capital		Deficits			Total
Balance, December 31, 2023		9,765,500	$	977	$	676,000		$	4,805,117	$	(1,357,896	)	$	4,124,198
Balance		9,765,500	$	977	$	676,000			4,805,117	$	(1,357,896	)	$	4,124,198
Stock issued from common stock payable		200,000		20		(354,000	)		353,980		-			-
Stock issued for services		200,000		20		-			283,980		-			284,000
Fair value of options granted to Officers, Directors and Employees		-		-		-			573,548		-			573,548
Net loss for the three months ended March 31, 2024		-		-		-			-		(1,710,004	)		(1,710,004	)
Balance, March 31, 2024		10,165,500		1,017		322,000			6,016,625		(3,067,900	)		3,217,742
Common stock payable		-		-		154,500								154,500
Stock issued for services		100,000		10		-			149,990		-			150,000
Net loss for the six months ended June 30, 2024		-		-		-			-		(520,971	)		(520,971	)
Balance June 30, 2024		10,265,500	$	1,027	$	476,500		$	6,166,615	$	(3,588,871	)	$	3,055,271
Balance		10,265,500	$	1,027	$	476,500		$	6,166,615	$	(3,588,871	)	$	3,055,271

	2024			2023
	Six Months Ended June 30,
	2024			2023
Cash flows from operating activities:
Net (loss)	$	(2,230,975	)	$	190,020
Adjustment to reconcile net loss to operating activities
Common stock issued for services		434,000			-
Common stock payable		154,500			-
Fair value of Officer, Director and Employee options		573,548			-
Depreciation		7,246			1,485
Changes in operating assets and liabilities:
Accounts receivable		(17,075	)		(45,606	)
Inventory		(430,975	)		(96,363	)
Prepaid expenses		127,268			537,597
Accounts payable		(61,052	)		(327,682	)
Accrued expenses		(53,403	)		131,748
Other assets		(7,786	)		67,829

Net cash provided by (used in) operating activities		(1,504,704	)		459,028

Cash flows from investing activities:
Cash paid for fixed assets		(23,264	)		(107,589	)

Cash (used in) investing activities		(23,264	)		(107,589	)

Financing activities:
Cash loaned to affiliates		-			(125,750	)
Advance from Parent - Jupiter Wellness		-			38,188
Cash (used in) financing activities		-			(87,562	)

Net increase (decrease) in cash and cash equivalents		(1,527,968	)		263,877

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	$	1,452,773		$	717,393

SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest	$	-		$	-
Cash paid for income taxes	$	-		$	-

	●	identify the contract with a customer;

	●	identify the performance obligations in the contract;

	●	determine the transaction price;

	●	allocate the transaction price to performance obligations in the contract; and

	●	recognize revenue as the performance obligation is satisfied.

	June 30,			December 31,
	2024			2023
Asset
Molds	$	56,425		$	43,161
Computer equipment and software		21,285			11,285
Fixed assets, gross		77,710			54,446
Accumulated depreciation		(16,230	)		(8,984	)
Total assets, net of depreciation	$	61,480		$	45,462

						Market
						Price on		Computed
	Number of		Term	Exercise		Grant		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

	For the Three Months Ended June 30,					For the Six Months Ended June 30,
	2024			2023		2024			2023
Numerator:
Net income (loss)	$	(520,971	)	$	228,022	$	(2,230,975	)	$	190,020

Denominator:
Denominator for basic earnings per share - Weighted- average common shares issued and outstanding during the period		10,187,753			6,500,000		10,126,764			6,500,000
Denominator for diluted earnings per share		10,187,753			6,500,000		10,126,764			6,500,000
Basic (loss) per share	$	(0.05	)	$	0.04	$	(0.22	)	$	0.03
Diluted (loss) per share	$	(0.05	)	$	0.04	$	(0.22	)	$	0.03

	Three Months Ended June 30,						Six Months Ended June 30,
	2024			2023			2024			2023
Revenue
Sales	$	1,507,927		$	2,341,955		$	2,514,284		$	3,428,843
Cost of Sales		1,183,261			1,833,934			2,026,071			2,685,000
Gross profit		324,666			508,021			488,213			743,843

Operating expense
General and administrative expenses		851,142			258,072			2,729,695			509,656
Operating income (loss)		(526,476	)		249,949			(2,241,482	)		234,187

Other income / (expense)
Interest income		5,505			313			10,507			313
Interest expense		-			(22,240	)		-			(44,480	)

Total other income (expense)		5,505			(21,927	)		10,507			(44,167	)

Net income (loss)	$	(520,971	)	$	228,022		$	(2,230,975	)	$	190,020

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: August 12, 2024	Chief Executive Officer
	(Principal Executive Officer)

SEC Form 10-Q filed by SRM Entertainment Inc.