SRM Entertainment Inc
For the period ended Jun 30, 2024. Filed Aug 12, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 12, 2024
TRON$1.41+4.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-10.
0001493152-24-018638
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-12.
0001493152-24-031263
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 60 previous paragraphs and 68 current paragraphs.
50 unchanged; 5 reworded; 12 added; 4 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 3 previous and 3 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (12)
Current report
For the three and six-months months ended June 30, 2024 and 2023
Current report
Three months ended June 30, 2024 compared to 2023
Current report
The Company had sales of $1,507,927 and $2,341,955 for the three months ended June 30, 2024 and 2023. The decrease in sales is due to declines in attendance at our customers theme parks. Gross margins were reasonably consistent at 21.5% for the three months ended June 30, 2024 versus 21.7% for June 30, 2023.
Current report
Operating expenses totaled $851,142 and $258,072 for the three months ended June 30, 2024 and 2023, respectively. Operating expenses for the three months ended June 30, 2024 included (i) marketing expenses of $11,848, (ii) legal and professional fees of $274,000, (iii) rent and utilities of $7,935, (iv) depreciation of $4,359, (v) general and administrative expenses of $413,407 and (vi) stock based compensation of $139,593. Operating expenses for the three months ended June 30, 2023 included (i) marketing expenses of $2,019, (ii) legal and professional fees of $42,270, (iii) rent and utilities of $2,820, (iv) depreciation of $902, (v) general and administrative expenses of $210,061 and (vi) no stock based compensation. The increase in expenses is a result of being a stand-alone public company which includes all of the additional costs related to a small public company during 2024 versus being a wholly owned subsidiary of a larger company in 2023.
Current report
During the three months ended June 30, 2024, the Company generated net interest income of $5,505 as a result of higher cash balances in 2024 due to the Company’s IPO in 2023 versus a net interest expense of $21,927 in 2023 which was due to interest bearing loans to its Parent prior to the Company’s IPO.
Current report
Six months ended June 30, 2024 compared to 2023
Current report
Revenues and Cost of Sales
Current report
The Company had sales of $2,514,284 and $3,428,843 for the six months ended June 30, 2024 and 2023. The decrease in sales is due to declines in attendance at our customers’ theme parks. Gross margins were lower than expected in the first quarter of 2024 due to increased manufacturing costs which decreased our six months’ margin to 19.4% compared to 21.7% for the six months ended June 30, 2023.
Current report
Operating expenses totaled $2,729,695 and $509,656 for the six months ended June 30, 2024 and 2023, respectively. Operating expenses for the six months ended June 30, 2024 included (i) marketing expenses of $32,251, (ii) legal and professional fees of $717,637, (iii) rent and utilities of $17,581, (iv) depreciation of $7,246, (v) general and administrative expenses of $792,932 and (vi) stock based compensation of $1,162,048. Operating expenses for the six months ended June 30, 2023 included (i) marketing expenses of $11,470, (ii) legal and professional fees of $42,270, (iii) rent and utilities of $4,057, (iv) depreciation of $1,485, (v) general and administrative expenses of $450,374 and (vi) no stock based compensation. The increase in expenses is a result of being a stand-alone public company which includes all of the additional costs related to a small public company during 2024 versus being a wholly owned subsidiary of a larger company in 2023.
Current report
During the six months ended June 30, 2024, the Company generated net interest income of $10,507 as a result of higher cash balances in 2024 due to the Company’s IPO in 2023 versus a net interest expense of $44,167 in 2023 which was due to interest bearing loans to its Parent prior to the Company’s IPO.
Current report
Income/Losses
Current report
Net losses were $2,230,975 for the six months June 30, 2024 compared to net income of $190,020 in 2023.
Removed paragraphs (4)
Previous report
The following table provides selected financial data about us for the three months ended March 31, 2024 and 2022, respectively.
Previous report
The Company had sales of $1,006,357 and $1,086,888 for the three months ended March 31, 2024 and 2023. Our gross margins decreased by 5.4% which primarily was attributable to increased manufacturing costs without a corresponding increase in product pricing.
Previous report
Operating expenses for the three months ended March 31, 2024 and 2023 were $1,878,553 and $251,584, respectively. The increase was due to new expenses primarily related to increased cost of being public which increased Board of Director fees, accounting and auditing fees, legal and professional fees totaling $443,274, stock based compensation of $536,000 to consultants and investor relations and the fair value of options granted to officers, directors and employees of the Company totaling $486,455.
Previous report
The Company had interest income of $5,002 and interest expense of $22,240, respectively for the three months ended March 31, 2024 and 2023.
Reworded paragraphs (5)
Previous wording
SRM. Entertainment Limited (“SRM Ltd”), is a limited company incorporated in the Hong Kong, now a Special Administrative Region of the People’s Republic of China, on January 23, 1981. SRM Entertainment, Inc. (“SRM Inc”) is a Nevada corporation and was incorporated on April 22, 2022. On August 14, 2023, SRM Inc merged with SRM Ltd. The merger of SRM Inc and SRM Ltd has been accounted for as a Reverse Acquisition (seeBasis of Presentation below). The combined SRM Inc and SRM Ltd are collectively referred to as the Company.
Current wording
SRM. Entertainment Limited (“SRM Ltd”), is a limited company incorporated in the Hong Kong, now a Special Administrative Region of the People’s Republic of China, on January 23, 1981. SRM Entertainment, Inc. (“SRM Inc”) is a Nevada corporation and was incorporated on April 22, 2022. On August 14, 2023, SRM Inc merged with SRM Ltd. The merger of SRM Inc and SRM Ltd has been accounted for as a Reverse Acquisition (seeBasis of Presentationbelow). The combined SRM Inc and SRM Ltd are collectively referred to as the Company.
Previous wording
The accompanying financial statements are presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of US Securities and Exchange Commission (“SEC”). The merger of SRM Ltd and SRM Inc occurred on August 14, 2023. The financial statements are prepared using Reverse Acquisition Accounting and as such, for legal purposes SRM Inc was the acquiring company and for GAAP accounting, SRM Ltd was the acquiring company. Therefore, the financial statements are presented using the historical financial statements of SRM Ltd and 6,500,000 shares of common stock owned by Jupiter. The combined SRM Inc and SRM Ltd are collectively referred to as the Company.
Current wording
The accompanying financial statements are presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of US Securities and Exchange Commission (“SEC”). The merger of SRM Ltd and SRM Inc occurred on August 14, 2023. The financial statements are prepared using Reverse Acquisition Accounting and as such, for legal purposes SRM Inc was the acquiring company and for GAAP accounting, SRM Ltd was the acquiring company. Therefore, the financial statements are presented using the historical financial statements of SRM Ltd and 6,500,000 shares of common stock owned by Jupiter. The combined SRM Inc and SRM Ltd are collectively referred to as the “Company” or “SRM.”
Previous wording
The accompanying financial statements are presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of US Securities and Exchange Commission (“SEC”). The acquisition of SRM Ltd and SRM Inc occurred on August 14, 2023. The financial statements are prepared using Reverse Acquisition Accounting and as such, for legal purposes SRM Inc was the acquiring company and for GAAP accounting, SRM Ltd was the acquiring company. Therefore, the financial statements are presented using the historical financial statements of SRM Ltd.. The combined SRM Inc and SRM Ltd are collectively referred to as the Company.
Current wording
The accompanying financial statements are presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of US Securities and Exchange Commission (“SEC”). The acquisition of SRM Ltd and SRM Inc occurred on August 14, 2023. The financial statements are prepared using Reverse Acquisition Accounting and as such, for legal purposes SRM Inc was the acquiring company and for GAAP accounting, SRM Ltd was the acquiring company. Therefore, the financial statements are presented using the historical financial statements of SRM Ltd.. The combined SRM Inc and SRM Ltd are collectively referred to as the Company or SRM.
Previous wording
The Company’s deferred tax asset at March 31, 2024 and December 31, 2023 consisted of net operating loss carry forwards calculated using effective tax rates (20.6% average of China and US rates) equating to approximately $847,803 and $497,655 respectively, less a valuation allowance in the amount of approximately $847,803 and $497,655, respectively. Because of the Company’s lack of earnings history, the deferred tax asset has been fully offset by a valuation allowance in the three months ended March 31, 2024 and years ended December 31, 2023.
Current wording
The Company’s deferred tax asset at June 30, 2024 and December 31, 2023 consisted of net operating loss carry forwards calculated using effective tax rates (20.6% average of China and US rates) equating to approximately $957,375 and $497,655 respectively, less a valuation allowance in the amount of approximately $954,375 and $497,655, respectively. Because of the Company’s lack of earnings history, the deferred tax asset has been fully offset by a valuation allowance at June 30, 2024 and December 31, 2023.
Previous wording
Net losses were $1,710,004 and $38,002 for the three months March 31, 2024 and 2023.
Current wording
Net losses were $520,971 for the three months June, 2024 compared to net income of $228,022 in 2023.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Operating Expenses and Other Income (Expense)
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
For the three months ended March 31, 2024 and 2023