SRM Entertainment announces strategic PIPE investment

SRM Entertainment, Inc., a manufacturer specializing in games, toys, and children’s vehicles, has entered into a significant financial agreement with an institutional investor. The company, headquartered in Winter Park, FL, whose stock has surged over 1,350% year-to-date to $9.19, announced today that it has entered into a Securities Purchase Agreement for a private investment in public equity (PIPE) offering. According to InvestingPro data, the company’s stock has shown significant momentum, with particularly strong returns over the past week.

The PIPE offering includes 100,000 shares of SRM Entertainment’s Series B Convertible Preferred Stock, which are convertible into 200,000,000 shares of common stock at a conversion price of $0.50 per share. Additionally, the company issued warrants to acquire up to 220,000,000 shares of common stock, exercisable immediately at $0.50 per share, expiring two years from the date of issuance. With a current market capitalization of $25 million and a WEAK overall financial health score according to InvestingPro, this capital raise comes at a crucial time for the company.

The transaction, which occurred today, will see the investor pay the $100 million purchase price in TRON tokens by June 30, 2025, based on their closing price as of June 15, 2025. The tokens will be held in a custodian wallet controlled by the company’s Board of Directors.

The Preferred Stock Shares cannot be converted into more than 19.99% of the currently outstanding shares of common stock until stockholder approval is obtained. Furthermore, in connection with the PIPE Offering, the company entered into an Advisory Agreement with Justin Sun, and Weike Sun, the sole shareholder of the investor, was appointed to the Board.

The securities involved in the PIPE offering have not been registered under the Securities Act of 1933 and were offered only to accredited investors. SRM Entertainment does not intend to list the Preferred Stock Shares or PIPE Warrants on any securities exchange.

This strategic financial move comes with several corporate changes, including the resignation of three board members and the appointment of Weike Sun as Chairman of the Board, along with Zhihong Liu and Zi Yang as board members.

The full details of the agreements and amendments related to the PIPE Offering are available in the exhibits filed with this report. The information presented is based on a press release statement.

In other recent news, SRM Entertainment is making significant moves with its plans to merge with Tron’s digital asset platform, orchestrated by Dominari Securities. This reverse merger will see Tron going public in the U.S., with the new entity being named Tron Inc. As part of this development, Tron will inject up to $210 million of token assets into the newly formed company. In addition, SRM Entertainment has announced a $100 million equity investment to initiate a TRON Token Treasury Strategy, appointing Justin Sun, the founder of the TRON blockchain, as an advisor. The company plans to change its name to Tron Inc., issuing convertible preferred stock and warrants as part of the strategic investment valued at $210 million if all warrants are exercised. Furthermore, SRM Entertainment secured $5 million through a private investment in public equity (PIPE) deal, aimed at general corporate purposes. The company has also received a 180-day extension from Nasdaq to comply with the minimum bid price rule, allowing it more time to maintain a closing bid price of at least $1.00 per share. These developments reflect SRM Entertainment’s strategic direction and focus on expanding its product lines and distribution channels.

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