SRM Entertainment Inc.

06/16/2025 | Press release | Distributed by Public on 06/16/2025 15:28

Material Agreement (Form 8-K)

Item 1.01 Entry into a Material Definitive Agreement.

On June 16, 2025, SRM Entertainment, Inc. (the "Company") entered into a Securities Purchase Agreement (the "Securities Purchase Agreement") with an institutional investor entity (the "Investor") for a private investment in public equity (the "PIPE Offering") of 100,000 shares of its Series B Convertible Preferred Stock par value $0.0001 per share (the "Series B Preferred Stock"), convertible into 200,000,000 shares of common stock, par value $0.0001 (the "Common Stock"), at a conversion price of $0.50 per share of Common Stock, and warrants (the "PIPE Warrants") to acquire up to 220,000,000 shares of Common Stock. The PIPE Warrants issued in the PIPE Offering are exercisable immediately upon issuance at an exercise price of $0.50 per share and will expire two years from the date of issuance. The 100,000 shares of Series B Preferred Stock are referred to herein as the "Preferred Stock Shares."

The issuance of the Preferred Stock Shares and the PIPE Warrants occurred on June 16, 2025.

On or before June 30, 2025, the Investor will pay the $100 million purchase price for the Preferred Stock Shares and Warrants in the form of TRON tokens (the "Consideration Tokens"), based on the closing price of TRON tokens on June 15, 2025. The Consideration Tokens will be held in the custodian wallet account designated and controlled by the Company's Board of Directors (the "Board").

The Preferred Stock Shares cannot be converted into more than 19.99% of the currently outstanding shares of Common Stock until stockholder approval of such an issuance is obtained.

The Company entered into an Advisory Agreement with Justin Sun along with the issuance of the Preferred Stock Shares and the PIPE Warrants (the "Sun Advisory Agreement"). Mr. Justin Sun's father, Weike Sun is the sole shareholder of the Investor and was appointed as a member of the Board in connection with the PIPE Offering

The conversion price and exercise price and number of shares of Common Stock issuable upon conversion or exercise of the Preferred Stock Shares and the PIPE Warrants, as the case may be is subject to appropriate adjustment in the event of stock dividends, stock splits, reorganizations or similar events affecting the Common Stock and the conversion price or exercise price. In the event of certain fundamental transactions, the holder of the PIPE Warrants will have the right to receive the Black Scholes Value (as defined in the PIPE Warrants) of its PIPE Warrants calculated pursuant to a formula set forth in the PIPE Warrants, payable in cash. There is no trading market available for the Preferred Stock Shares or the PIPE Warrants on any securities exchange or nationally recognized trading system. The Company does not intend to list the Preferred Stock Shares or PIPE Warrants on any securities exchange or nationally recognized trading system.

Dominari Securities, LLC acted as placement agent (the "Placement Agent") in connection with the PIPE Offering, pursuant to that certain Placement Agency Agreement, dated as of June 16, 2025, between the Company and the Placement Agent, pursuant to which the Company paid the Placement Agent for certain out-of-pocket expenses, including for reasonable expenses and legal fees of $50,000.

In addition, pursuant to an Advisory Agreement with an entity associated with American Ventures (the investor in the previously disclosed May 2025 Series A preferred stock offering) (the "American Ventures Agreement"), the Company issued a warrant to American Ventures (the "American Ventures Warrants") with substantially the same terms as the PIPE Warrants except that the American Ventures Warrants are exercisable for five years and do not reference the Securities Purchase Agreement.

The securities being offered and sold by the Company in the PIPE Offering and the American Ventures Warrants have not been registered under the Securities Act of 1933, as amended (the "Securities Act"), and may not be offered or sold in the United States absent registration with the Securities and Exchange Commission (the "SEC") or an applicable exemption from such registration requirements. The securities were offered only to accredited investors.

SRM Entertainment Inc. published this content on June 16, 2025, and is solely responsible for the information contained herein. Distributed via SEC EDGAR on June 16, 2025 at 21:28 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at support@pubt.io