Tron Inc S-1/A, filed Jul 28, 2023

Tron Inc. (TRON)

S-1/A 2023-07-28

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Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

	Per Share	Total
Public offering price	$	$
Underwriting discount⁽¹⁾	$	$
Proceeds, before expenses, to us	$	$

	Page
PROSPECTUS SUMMARY	1
TRADEMARKS, TRADE NAMES AND SERVICE MARKS	14
INDUSTRY AND MARKET DATA	14
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS	14
THE DISTRIBUTION	16
RISK FACTORS	19
USE OF PROCEEDS	42
DIVIDEND POLICY	43
CAPITALIZATION	44
DILUTION	45
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS	47
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	51
BUSINESS	59
MANAGEMENT	64
DIRECTORS	65
EXECUTIVE COMPENSATION	69
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS	74
PRINCIPAL STOCKHOLDERS	79
DESCRIPTION OF CAPITAL STOCK	80
SHARES ELIGIBLE FOR FUTURE SALE	84
MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE DISTRIBUTION AND OF HOLDING AND DISPOSING OF OUR COMMON STOCK	86
UNDERWRITING	92
LEGAL MATTERS	98
EXPERTS	98
WHERE YOU CAN FIND MORE INFORMATION	98
INDEX TO COMBINED FINANCIAL STATEMENTS	F-1

	●	we may present only two years of audited financial statements and only two years of related Management’s Discussion and Analysis of Financial Condition and Results of Operations;

	●	not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, as amended, or the Sarbanes-Oxley Act;

	●	reduced disclosure obligations regarding executive compensation in our periodic reports, proxy statements and registration statements; and

	●	exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval

	●	The distribution does not qualify as a transaction that is tax-free for U.S. federal income tax purposes, therefore, Jupiter Wellness and its stockholders and warrant holders could be subject to significant tax liabilities.

	●	Some of our directors and executive officers own Jupiter Wellness Common Stock or options to acquire Jupiter Wellness Common Stock and hold positions with Jupiter Wellness, which could cause conflicts of interest, or the appearance of conflicts of interest, that result in our not acting on opportunities we otherwise may have.

	●	Delay or failure of our retailers, distributors, manufacturers, and other channel partners to purchase at their historic volumes or at the volumes that they or we forecast.

	●	Seasonal shifts in end-market demand for our products may negatively impact our sales.

	●	Bad or extreme weather conditions and forecasts of bad or mixed weather conditions, which may be due to climate change, can adversely impact attendance at parks where our products are sold.

	●	SRM depends on key personnel and may not be able to hire, retain, and integrate sufficient qualified personnel to maintain and expand its business.

	●	COVID-19 resulted in economic conditions which adversely affected our parks, which may continue to have an adverse impact on our business, financial condition or results of operations.

	●	Future sales, or the perception of future sales, of our Common Stock, including by Jupiter Wellness, may depress the price of our Common Stock.

	●	The market price of our Common Stock may be highly volatile, and you could lose all or part of your investment.

Issuer		SRM Entertainment, Inc.

Common Stock offered by us in this offering ⁽¹⁾		1,250,000 shares of Common Stock (1,437,500 shares of Common Stock if the Representative exercises in full its option to purchase additional shares of Common Stock), at an assumed initial public offering price of $5.00 per share.

Common Stock to be held by Jupiter Wellness immediately after this offering		6,500,000 shares of Common Stock (which includes 2,000,000 shares to be distributed to Jupiter Wellness stockholders and certain warrant holders of record as of the close of business on July 7, 2023).

Common Stock to be outstanding immediately after this offering		9,450,000 shares of Common Stock (9,637,500 shares of Common Stock if the Representative exercises in full its option to purchase additional shares of Common Stock), at an assumed initial public offering price of $5.00 per share.

Over-allotment option		We have granted the Representative an option for a period of 45 days after the date of this prospectus to purchase up to additional shares of Common Stock solely to cover over-allotments, if any, at the public offering price.

Representative’s Warrants		We have agreed to issue to the Representative or its designees Representative’s Warrants exercisable beginning on a date that is 180 days following the commencement of sales pursuant to this prospectus and will expire five years from the date of such commencement of sales to purchase up to 4% of the number of shares of Common Stock sold in this offering, including any shares of Common Stock sold upon exercise of the Representative’s over-allotment option, at an exercise price equal to 120% of the initial public offering price. The shares of Common Stock underlying the Representative’s Warrants are also being registered pursuant to the registration statement of which this prospectus forms a part. For additional information regarding our arrangement with the underwriters, please see “Underwriting” on page 92 of this prospectus.

Use of proceeds		We estimate that the net proceeds from this offering, after deducting the underwriting discount and estimated offering expenses payable by us, will be $5,281,250 (or $6,073,438, if the Representative’s option to purchase additional shares is exercised in full), at an assumed initial public offering price of $5.00 per share. We intend to use the net proceeds of this offering for the development of licensed goods, expansion of SRM products, increased deposits, accounts receivable and inventory, marketing, advertising, and trade shows, general administrative expenses, repayment of the note payable to Jupiter Wellness, and general corporate purposes. See the section titled “Use of Proceeds.”

Risk factors		You should read the “Risk Factors” section of this prospectus for a discussion of factors to consider carefully before deciding to invest in shares of our Common Stock.

Stock exchange symbol		We have applied to list our Common Stock for trading on Nasdaq under the symbol “SRM.” No assurance can be given that our Common Stock will be approved for listing on Nasdaq and neither this offering nor the distribution will be completed if our Common Stock is not approved for listing.

Lock-Up Agreements		We, along with our directors, officers, Jupiter Wellness and certain of its directors and officers, have agreed not to offer for sale, issue, sell, contract to sell, pledge or otherwise dispose of any of our Common Stock for a period of 90 days from the date of closing of this offering. See “Underwriting.”

(1)	The number of shares of our Common Stock to be outstanding following this offering is based on 8,200,000 shares of our Common Stock outstanding as of July 27, 2023, which include the issuance of 6,500,000 shares of Common Stock to Jupiter Wellness on May 31, 2023, in connection with the separation, assumes no exercise of the Representative’s option to purchase up to 187,500 additional shares of our Common Stock, and no exercise of the Representative’s Warrants to purchase up to 57,500 shares of Common Stock and excludes approximately 1,500,000 shares of our Common Stock reserved for issuance under our equity incentive plan for our employees and directors.

	Unless otherwise indicated, this prospectus reflects and assumes no exercise by the Representative of its over-allotment option and no exercise of the Representative’s Warrants.

Distributing Company		Jupiter Wellness is distributing an aggregate of 2,000,000 shares of SRM, a toy design & manufacturing company for the biggest entertainment companies in the world, including Disney and Universal.

Distributed Company		SRM is currently a majority owned subsidiary of Jupiter Wellness. Please see “Business” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for information concerning this business.

Distribution Ratio		Each holder of Jupiter Wellness Common Stock and each holder of certain warrants issued in Jupiter Wellness’ public offering in July 2021 (the “July Warrants”) will receive a distribution of one share of our Common Stock for every 19.35 shares of Jupiter Wellness Common Stock held or underlying the July Warrants held, each as of the record date.

Securities to be Distributed		A total of 2,000,000 shares of our Common Stock will be distributed to Jupiter Wellness stockholders and certain warrant holders of record as of the close of business on July 7, 2023. The shares of our Common Stock to be distributed are being registered pursuant to the registration statement of which this prospectus forms a part and will be eligible for immediate resale, except for 230,804 shares to be issued to certain affiliates. Jupiter Wellness stockholders will not be required to pay for the shares of our Common Stock to be received by them in the distribution, or to surrender or exchange shares of Jupiter Wellness Common Stock in order to receive our Common Stock, or to take any other action in connection with the distribution. Please see “The Distribution” for information concerning the breakdown of the distribution of securities.

Fractional Shares		Fractional shares of our Common Stock will not be distributed. The number of shares to be received will be rounded down to the nearest whole share of Common Stock.

Distribution Agent, Transfer Agent and Registrar for the Shares		VStock Transfer, LLC will be the distribution agent, transfer agent and registrar for the shares of our Common Stock.

Record Date		The record date is the close of business, New York City time, on July 7, 2023.

Distribution Date		July ___, 2023 (or such other later date on which the registration statement of which this prospectus forms a part is declared effective).

Material U.S. Federal Income Tax Consequences of the Distribution		Holders of shares of Jupiter Wellness Common Stock on the Record Date and the holders of the July Warrants should consult with their own tax advisors. Certain transactions related to the Distribution will be taxable transactions and could result in the recognition of income or gain by Jupiter Wellness and by the Jupiter Wellness stockholders and holders of the July Warrants. Recipients of shares in the Distribution should consult their own tax advisors with respect to the tax effects of the Distribution. See “The Distribution — Material U.S. Federal Income Tax Consequences of the Distribution.”

Relationship Between Jupiter Wellness and Us After the Distribution		Following the distribution, we will be a separate public company from Jupiter Wellness. The Amended and Restated Exchange Agreement governs the separation. The Amended and Restated Exchange Agreement will also govern our relationship with Jupiter Wellness following the distribution. We may become party to other arrangements with Jupiter Wellness and its subsidiaries. See “Certain Relationships and Related Party Transactions — Relationship with Jupiter Wellness.”

Overlapping Directors and Officers and Potential Conflicts of Interest		There is an overlap between certain officers of the Company and of Jupiter Wellness. Brian John serves as CEO and Director of Jupiter Wellness and Secretary and Chairman of SRM. Mr. Douglas McKinnon serves as CFO of Jupiter Wellness and CFO of SRM. Prior to the completion of this offering, Jupiter Wellness expects to appoint a new CFO, and upon appointment, Mr. McKinnon will serve solely as CFO of SRM. Christopher Marc Melton and Gary Herman each serve as a Director of Jupiter Wellness and SRM.

		The overlapping directors and officers (the “Overlap Persons”) may have actual or apparent conflicts of interest with respect to matters involving or affecting each company. In addition, after the distribution, certain of our directors and officers will continue to own stock and/or stock options or other equity awards of Jupiter Wellness. These ownership interests could create actual, apparent or potential conflicts of interest when these individuals are faced with decisions that could have different implications for our Company and for Jupiter Wellness and its subsidiaries.

		In addition, the Company may engage in material business transactions with Jupiter Wellness.

		See “Certain Relationships and Related Party Transactions” and “Description of Capital Stock”

Post-Distribution Dividend Policy		We currently do not contemplate paying any cash dividends to our shareholders and intend to use all available funds to grow our operations. The declaration and payment of future dividends to holders of our Common Stock will fall within the sole discretion of our Board and will depend upon many factors, including our financial condition, earnings, and capital requirements of our business, legal requirements (including potential changes to tax laws), regulatory constraints, industry practice and other factors that the Board deems relevant. We cannot guarantee that we will continue to pay any dividend even if we commence the payment of dividends.

	●	our ability to continue as a going concern;
	●	fluctuations in our results of operations and stock price over time;
	●	our ability to introduce or acquire new products or services that achieve broad market acceptance;
	●	our ability to compete with our peers, certain of which have substantially greater resources than we do;
	●	the concentration of our purchaser base in traditional and online retailers and wholesale distributors, our ability to retain such retailers and distributors and our potential exposure in the event of the consolidation of retailers or concentration of retail market share;
	●	potential quality problems, including defects or errors, with our current and future products and services;
	●	the typical decrease of the average selling prices of our products over the sales cycle of the product, which may impact our revenue and gross margin;
	●	global economic conditions;
	●	changes in U.S. and international tax policy, including changes that adversely affect customs, tax or duty rates, as well as income tax legislation and regulations that affect the countries where we conduct business;
	●	the volatility of our stock price, which may result in your investment in our Common Stock to suffer a decline in value;
	●	our ability to manage our manufacturing and supply requirements and the ability of our manufacturing and supply sources to meet the needs of our business;
	●	our reliance on a limited number of third-party manufacturers;
	●	our ability to retain the services of key personnel;
	●	our ability to secure and protect our intellectual property rights;

	●	successful implementation of the separation of SRM’s toy sales and manufacturing businesses from Jupiter Wellness’s ongoing operations following the separation;
	●	our exposure to international markets;
	●	future litigation matters, including litigation regarding intellectual property rights;
	●	our ability to manage our sales channel inventory and product mix;
	●	failure to achieve the expected benefits from and successfully execute the separation;
	●	potential tax liabilities that may arise as a result of the separation or the distribution;
	●	operating as an independent publicly traded company, including compliance with applicable laws and regulations;
	●	our status as an emerging growth company; and
	●	the effects of future sales, or perceptions of future sales of our Common Stock.

	●	corporate opportunities;

	●	the impact that operating or capital decisions (including the incurrence of indebtedness) relating to our business may have on Jupiter Wellness’s consolidated financial statements and/or current or future indebtedness (including related covenants);

	●	business combinations involving us;

	●	our dividend and stock repurchase policies;

	●	compensation and benefit programs and other human resources policy decisions;

	●	management stock ownership;

	●	decisions involving the Amended and Restated Exchange Agreement relating to the separation;

	●	the payment of dividends on our Common Stock; and

	●	determinations with respect to our tax returns.

	●	tax, employee benefit, and other matters arising from the separation;

	●	the nature, quality and pricing of services Jupiter Wellness agrees to provide to us; and

	●	sales and other disposals by Jupiter Wellness of all or a portion of its ownership interest in us.

	●	changes in the pricing policies of, or the introduction of new products by, us or our competitors;

	●	introductions of new technologies and changes in consumer preferences that result in either unanticipated or unexpectedly rapid product category shifts;

	●	slow or negative growth in the toy, souvenir, theme park, and related markets;

	●	seasonal shifts in end-market demand for our products;

	●	delays in the introduction of new products by us or market acceptance of these products;

	●	unanticipated decreases or delays in purchases of our products by our significant retailers, distributors and other channel partners;

	●	supply constraints from our vendors;

	●	unanticipated increases in costs, including air freight, associated with shipping and delivery of our products;

	●	the inability to maintain stable operations by our suppliers and other parties with whom we have commercial relationships;

	●	discovery of security vulnerabilities in our products, services or systems, leading to negative publicity, decreased demand or potential liability;

	●	foreign currency exchange rate fluctuations in the jurisdictions where we transact sales and expenditures in local currency;

	●	excess levels of inventory and low turns;

	●	changes in or consolidation of our sales channels and wholesale distributor relationships or failure to manage our sales channel inventory and warehousing requirements;

	●	delay or failure to fulfill orders for our products on a timely basis;

	●	delay or failure of our retailers, distributors and other channel partners to purchase at their historic volumes or at the volumes that they or we forecast;

	●	changes in tax rates or adverse changes in tax laws that expose us to additional income tax liabilities;

	●	changes in U.S. and international tax policy, including changes that adversely affect customs, tax or duty rates, as well as income tax legislation and regulations that affect the countries where we conduct business;

	●	operational disruptions, such as transportation delays or failure of our order processing system, particularly if they occur at the end of a fiscal quarter;

	●	disruptions or delays related to our financial and enterprise resource planning systems;

	●	our inability to accurately forecast product demand, resulting in increased inventory exposure;

	●	allowance for doubtful accounts exposure with our existing retailers, distributors and other channel partners and new retailers, distributors and other channel partners, particularly as we expand into new international markets;

	●	geopolitical disruption, including sudden changes in immigration policies, leading to disruption in our workforce or delay or even stoppage of our operations in manufacturing, transportation, technical support and research and development;

	●	terms of our contracts with channel partners or suppliers that cause us to incur additional expenses or assume additional liabilities;

	●	an increase in price protection claims, redemptions of marketing rebates, product warranty and stock rotation returns or allowance for doubtful accounts;

	●	litigation involving alleged patent infringement;

	●	epidemic or widespread product failure, or unanticipated safety issues, in one or more of our products;

	●	failure to effectively manage our third-party customer support partners, which may result in customer complaints and/or harm to the SRM brand;

	●	our inability to monitor and ensure compliance with our code of ethics, our anti-corruption compliance program and domestic and international anti-corruption laws and regulations, whether in relation to our employees or with our suppliers or retailers, distributors or other channel partners;

	●	labor unrest at facilities managed by our third-party manufacturers;

	●	workplace or human rights violations in certain countries in which our third-party manufacturers or suppliers operate, which may affect the SRM brand and negatively affect our products’ acceptance by consumers;

	●	unanticipated shifts or declines in profit by geographical region that would adversely impact our tax rate;

	●	failure to implement and maintain the appropriate internal controls over financial reporting, which may result in restatements of our financial statements; and

	●	any changes in accounting rules.

	●	our channel partner agreements generally do not require minimum purchases;

	●	our retailers, distributors and other channel partners can stop purchasing and stop marketing our products at any time; and

	●	our channel partner agreements generally are not exclusive.

	●	changes in tax laws or the regulatory environment;

	●	changes in accounting and tax standards or practices;

	●	changes in the composition of operating income by tax jurisdiction; and

	●	our operating results before taxes.

	●	whether we achieve our anticipated corporate objectives;

	●	changes in financial or operational estimates or projections;

	●	termination of the lock-up agreement or other restrictions on the ability of our stockholders and other security holders to sell shares after this offering; and

	●	general economic or political conditions in the United States or elsewhere.

	●	actual or anticipated fluctuations in our results of operations or our competitors’ operating results;

	●	actual or anticipated changes in the growth rate of the amusement park market and entertainment industry, our growth rates or our competitors’ growth rates;

	●	conditions in the financial markets in general or changes in general economic conditions;

	●	changes in governmental regulation, including taxation and tariff policies;

	●	interest rate or currency exchange rate fluctuations;

	●	our ability to forecast or report accurate financial results; and

	●	changes in stock market analyst recommendations regarding our Common Stock, other comparable companies or our industry generally.

●	Development of Licensed Goods: Manufacture and Inventory		500,000
●	Expansion SRM Products: Design, Manufacture and inventory		150,000
●	Increased deposits, accounts receivable and inventory		1,250,000
●	Marketing, advertising & trade shows		200,000
●	General & Administrative expenses		750,000
●	Repayment of Note and other payable to Jupiter Wellness⁽¹⁾		1,500,000
●	General working capital		931,250
		$	5,281,250

	●	on an actual basis;

	●	on a pro forma basis to give effect to the transactions described in the section titled “Unaudited Pro Forma Condensed Combined Financial Statements”; and

	●	on a pro forma as adjusted basis to give effect to (i) the transactions described in the section titled “Unaudited Pro Forma Condensed Combined Financial Statements” and (ii) the issuance of 1,250,000 shares of Common Stock in this offering at an assumed public offering price of $5.00 per share, and the receipt of net proceeds of $5,281,250 in this offering, assuming no exercise of the Representative’s over-allotment option or the Representative’s Warrants.

	As of March 31, 2023
	Actual (unaudited)			Pro Forma⁽²⁾ (unaudited)			Pro Forma as Adjusted⁽³⁾ (unaudited)

Cash and cash equivalents	$	8,715		$	268,546		$	4,059,456

Loan from Jupiter Wellness & Affiliate		22,823			1,490,340			-

Equity:
Common Stock, $0.0001 par value (100,000,000 authorized, issued and outstanding: 1,700,000 actual⁽¹⁾, 8,200,000 pro forma⁽²⁾ and 9,450,000 pro forma as adjusted⁽³⁾		170			820			945
Subscriptions receivable
Retained earnings (deficit)		(9,278	)		657,961			657,961

Additional paid-in capital		-			(708,485	)		4,572,640
Total Equity (Deficit)		(9,108	)		(49,704	)		5,231,546

Total capitalization	$	13,715		$	1,440,636		$	5,231,546

(1)	Actual shares of common stock represents the 1,700,000 shares issued to the Founders.
(2)	Pro forma shares of Common Stock of 8,200,000 shares represents the 1,700,000 shares issued to the Founders and the 6,500,000 shares issued pursuant to the Amended and Restated Exchange Agreement. The pro forma balances of retained earnings (deficit) reflect the common control transaction with SRM Limited as the successor company.
(3)	Pro forma as adjusted shares of common stock include shares issued in this offering.

Assumed initial price to public per share	$	5.00
Pro forma net tangible book value per share as of March 31, 2023⁽¹⁾	$	(0.01	)
Increase per share attributable to existing shareholders⁽²⁾	$	0.56
Pro forma as adjusted net tangible book value per share after this offering⁽³⁾	$	0.55
Dilution per share to new investors	$	4.45

(1)	Represents the net tangible book value of the combined total assets (total assets less intangible assets) less total liabilities divided by 8,200,000 shares of Common Stock which includes 1,700,000 shares of Common Stock issued to the Founders and 6,500,000 shares of Common Stock issued to Jupiter Wellness in connection with the separation.
(2)	Represents the difference between pro forma as adjusted net tangible book value per share after this offering and pro forma net tangible book value per share as of March 31, 2023.
(3)	Determined by dividing (i) pro forma as adjusted net tangible book value, which is our pro forma net tangible book value plus the cash proceeds of this offering at an assumed initial public offering price of $5.00 per share, and after deducting the underwriting discount and estimated offering expenses payable by us, by (ii) the total number of our shares of Common Stock to be outstanding following this offering.

	Shares Purchased						Total Consideration						Weighted- Average Price Per
	Number			Percent			Amount			Percent			Share
Jupiter Wellness		6,500,000	⁽¹⁾		68.8	%	$	1,379,237	⁽²⁾		18.1	%	$	0.21
Founder shares		1,700,000			18.0	%		170			00.0	%		0.00
Investors participating in this offering		1,250,000			13.2	%		6,250,000			81.9	%		5.00
Total		9,450,000			100.0	%	$	7,629,407			100.0	%	$	0.81

(1)	Represents the total number of shares of Common Stock issued to Jupiter Wellness in connection with the Share Exchange.
(2)	Represents the total consideration paid by Jupiter Wellness for its purchase of the shares of Common Stock of SRM Limited.

	SRM Inc.			SRM Limited			Pro Forma Adjustments			Pro Forma

ASSETS
Current assets:
Cash and cash equivalents	$	8,715		$	259,831		$	-		$	268,546
Accounts receivable, net		-			851,000			-			851,000
Inventory		-			137,069			-			137,069
Prepaid expenses and deposits		5,000			576,869			-			581,869
Other current assets		-			51,780			-			51,780
Loans to affiliate		-			21,449			(21,449	)		-
Total current assets		13,715			1,897,998			-			1,890,264
Property and equipment, net		-			34,829			-			34,829

Total assets	$	13,715		$	1,932,827		$	(21,449	)	$	1,925,093

LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	-		$	232,888		$	-		$	232,888
Loans from Jupiter Wellness		1,374			1,488,966			-			1,490,340
Loans from Affiliate		21,449			-			(21,449	)		-
Accrued liabilities		-			251,569			-			251,569
Total liabilities		22,823			1,973,423			-			1,974,797
Equity^(1):
Common Stock, $0.0001 par value, 100,000,000 authorized shares, 1,700,000 issued and outstanding on historical basis and 8,200,000 issued and outstanding shares on a pro forma basis⁽²⁾		170			-			650			820
Additional paid-in capital		-			(698,557	)		(9,928	)		(708,485	)
Retained Earnings (Deficit)		(9,278	)		657,961			9,278			657,961

Total equity (deficit)		(9,108	)		(40,596	)		-			(49,704	)

Total liabilities and equity	$	13,715		$	1,932,827		$	(21,449	)	$	1,925,093

	SRM Inc.			SRM Limited			Pro Forma Adjustments			Pro Forma

Revenue	$	-		$	1,086,888		$	-		$	1,086,888
Cost of revenue		-			851,066			-			851,066
Gross profit		-			235,822			-			235,822
Operating expenses		(7,705	)		(251,584	)		-			(259,289	)
Other income and interest expense, net		-			(22,240	)		-			(22,240	)
Net Income (loss)	$	(7,705	)	$	(38,002	)	$	-		$	(45,707	)
Pro forma net income (loss) per share:
Basic		-	⁽²⁾		-	⁽²⁾		-	⁽²⁾	$	(0.01	)
Diluted		-	⁽²⁾		-	⁽²⁾		-	⁽²⁾	$	(0.01	)
Pro forma weighted-average shares used to compute net income (loss) per share⁽²⁾:
Basic		-	⁽²⁾		-	⁽²⁾		-	⁽²⁾		8,200,000
Diluted		-	⁽²⁾		-	⁽²⁾		-	⁽²⁾		8,200,000

	(1)	On December 9, 2022, we entered into the Exchange Agreement with Jupiter Wellness to govern the separation of our business from Jupiter Wellness. On May 26, 2023, we entered into the Amended and Restated Exchange Agreement to include additional information regarding the distribution and separation of our business from Jupiter Wellness. Pursuant to the Amended and Restated Exchange Agreement, on May 31, 2023, we issued to Jupiter Wellness 6,500,000 shares of our Common Stock (representing 79.3% of our outstanding Common Stock post-exchange) in exchange for the 2 ordinary shares of SRM Limited owned by Jupiter Wellness (representing all of the issued and outstanding ordinary shares of SRM Limited).

	(2)	The pro forma weighted average shares used to compute income (loss) per share includes the 1,700,000 Founders shares and the 6,500,000 shares issued to Jupiter Wellness pursuant to the Amended and Restated Exchange Agreement. The income/(loss) per share and weighted average share information is not meaningful for SRM Inc. and SRM Limited in the context of the table since the weighted average shares were 1,700,000 and 2, respectively.