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WINTER PARK, FL – SRM Entertainment, Inc. (NASDAQ:SRM), a renowned manufacturer of licensed media-themed merchandise with a market capitalization of $7.46 million, announced today a private investment in public equity (PIPE) financing agreement that is slated to yield about $5 million in gross proceeds. The funds, which are subject to customary fees and expenses, are intended for general corporate purposes, including working capital. According to InvestingPro data, this financing comes at a crucial time as the company has been quickly burning through cash, with negative EBITDA of $3.09 million in the last twelve months.
The agreement involves the sale of 5,000 shares of Series A Convertible Preferred Stock, which can be converted into a total of 10 million shares of common stock at a price of $0.50 per share. Additionally, the company is issuing warrants that grant the right to purchase up to 10 million shares of common stock, with certain ownership limitations. The purchase price for each share of Series A Convertible Preferred Stock, coupled with one warrant, is $1,000. This financing comes as SRM’s stock has experienced significant volatility, with shares down over 70% in the past year. InvestingPro analysis indicates the stock is currently trading slightly above its Fair Value, with 10 additional exclusive insights available to subscribers.
The warrants are exercisable immediately upon issuance at an exercise price of $0.65 per share and are set to expire two years from the date they are issued. Dominari Securities LLC served as the exclusive placement agent for the transaction.
SRM Entertainment has committed to registering the shares that may be issued upon the conversion of the preferred stock and upon the exercise of the warrants with the Securities and Exchange Commission (SEC), allowing for their future resale. These securities have not been registered under the Securities Act of 1933 and were offered solely to accredited investors.
The company, known for designing and manufacturing custom merchandise for major theme parks and entertainment venues, distributes its products globally, including at Disney Parks and Resorts, Universal Parks and Destinations, and other attractions. SRM’s portfolio includes specialty toys and souvenirs based on high-profile entertainment franchises. Financial metrics from InvestingPro show the company maintains a healthy current ratio of 3.66, though revenue has declined by 22.63% in the last twelve months amid challenging market conditions.
This financial move is based on a press release statement and is not an offer to sell or a solicitation for the purchase of SRM Entertainment securities. The offering of these securities is prohibited in any jurisdiction where such an action would contravene local securities laws without proper registration or exemptions.
In other recent news, SRM Entertainment, Inc. has been granted an additional 180 days by Nasdaq to comply with its minimum bid price rule. The company now has until October 20, 2025, to maintain a closing bid price of at least $1.00 per share for a minimum of ten consecutive business days. SRM Entertainment currently meets all other initial listing standards on the Nasdaq Capital Market, except for the bid price requirement. The company remains optimistic about its strategic direction, which includes expanding its innovative product lines and distribution channels. CEO Rich Miller expressed confidence in these initiatives to drive revenue growth. SRM Entertainment’s products are well-known in major theme parks and entertainment venues globally. Additionally, the company holds exclusive patents for its specialty items. Investors are advised to review the risk factors detailed in the company’s SEC filings.
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