SRM Entertainment Announces $5 Million Private Placement
SRM Entertainment (NASDAQ: SRM) has secured a $5 million private placement through a PIPE financing agreement with an institutional investor. The deal involves selling 5,000 shares of Series A Convertible Preferred Stock, convertible into 10 million common shares at $0.50 per share, along with warrants to purchase an additional 10 million shares at $0.65 per share. The warrants will be exercisable immediately and expire in two years.
The purchase price was set at $1,000 per unit, consisting of one preferred share and one warrant. Dominari Securities LLC served as the sole placement agent. The company plans to use the net proceeds for general corporate purposes and working capital.
SRM Entertainment (NASDAQ: SRM) ha ottenuto un finanziamento privato di 5 milioni di dollari tramite un accordo PIPE con un investitore istituzionale. L'operazione prevede la vendita di 5.000 azioni di Serie A Preferred Convertible, convertibili in 10 milioni di azioni ordinarie al prezzo di 0,50 dollari per azione, insieme a warrant per l'acquisto di ulteriori 10 milioni di azioni a 0,65 dollari per azione. I warrant saranno esercitabili immediatamente e scadranno dopo due anni.
Il prezzo di acquisto è stato fissato a 1.000 dollari per unità, ciascuna composta da un'azione preferred e un warrant. Dominari Securities LLC ha agito come unico agente di collocamento. La società intende utilizzare i proventi netti per scopi aziendali generali e capitale circolante.
SRM Entertainment (NASDAQ: SRM) ha asegurado una colocación privada de 5 millones de dólares mediante un acuerdo de financiación PIPE con un inversor institucional. El acuerdo implica la venta de 5,000 acciones de la Serie A Convertible Preferred Stock, convertibles en 10 millones de acciones comunes a 0,50 dólares por acción, junto con warrants para comprar 10 millones de acciones adicionales a 0,65 dólares por acción. Los warrants serán ejercitables de inmediato y expirarán en dos años.
El precio de compra se estableció en 1,000 dólares por unidad, que consta de una acción preferente y un warrant. Dominari Securities LLC actuó como único agente colocador. La empresa planea usar los ingresos netos para propósitos corporativos generales y capital de trabajo.
SRM Entertainment (NASDAQ: SRM)는 기관 투자자와의 PIPE 금융 계약을 통해 500만 달러 규모의 사모 배정을 확보했습니다. 이번 거래는 5,000주의 시리즈 A 전환 우선주를 주당 0.50달러에 보통주 1,000만 주로 전환할 수 있으며, 추가로 주당 0.65달러에 1,000만 주를 매수할 수 있는 워런트도 포함됩니다. 워런트는 즉시 행사 가능하며 2년 후 만료됩니다.
매입 가격은 우선주 1주와 워런트 1개로 구성된 단위당 1,000달러로 책정되었습니다. Dominari Securities LLC가 단독 배정 대행사로 참여했습니다. 회사는 순수익금을 일반 기업 목적과 운전자본으로 사용할 계획입니다.
SRM Entertainment (NASDAQ : SRM) a obtenu un placement privé de 5 millions de dollars via un accord de financement PIPE avec un investisseur institutionnel. L'accord porte sur la vente de 5 000 actions privilégiées convertibles de série A, convertibles en 10 millions d'actions ordinaires au prix de 0,50 $ par action, ainsi que des bons de souscription permettant d'acheter 10 millions d'actions supplémentaires à 0,65 $ par action. Les bons de souscription sont exerçables immédiatement et expirent dans deux ans.
Le prix d'achat a été fixé à 1 000 $ par unité, comprenant une action privilégiée et un bon de souscription. Dominari Securities LLC a agi en tant qu'agent unique de placement. La société prévoit d'utiliser les produits nets à des fins générales d'entreprise et pour le fonds de roulement.
SRM Entertainment (NASDAQ: SRM) hat eine Privatplatzierung in Höhe von 5 Millionen US-Dollar durch eine PIPE-Finanzierungsvereinbarung mit einem institutionellen Investor gesichert. Der Deal umfasst den Verkauf von 5.000 Aktien der Serie A Convertible Preferred Stock, die in 10 Millionen Stammaktien zu 0,50 US-Dollar pro Aktie umwandelbar sind, sowie Warrants zum Kauf von weiteren 10 Millionen Aktien zu 0,65 US-Dollar pro Aktie. Die Warrants sind sofort ausübbar und laufen in zwei Jahren ab.
Der Kaufpreis wurde auf 1.000 US-Dollar pro Einheit festgesetzt, bestehend aus einer Vorzugsaktie und einem Warrant. Dominari Securities LLC fungierte als alleiniger Platzierungsagent. Das Unternehmen plant, die Nettoerlöse für allgemeine Unternehmenszwecke und Betriebskapital zu verwenden.
- Secured $5 million in additional funding for working capital
- Warrants priced at $0.65, representing a 30% premium to the conversion price
- Significant potential dilution with 10 million new shares from preferred stock conversion
- Additional potential dilution of 10 million shares from warrant exercise
- Conversion price of $0.50 may indicate a discount to market price
Insights
SRM raised $5M through convertible preferred stock at unfavorable terms, suggesting financial distress and significant dilution for existing shareholders.
SRM Entertainment's $5 million PIPE financing reveals concerning details about the company's financial position. The structure of this deal—selling convertible preferred stock at a $0.50 conversion price with accompanying warrants at $0.65—suggests the company needed capital urgently and had to offer extremely favorable terms to attract investors.
The 10 million potential new shares from the preferred stock conversion plus another 10 million potential shares from warrant exercises represent substantial dilution risk. This financing could more than double the company's outstanding shares, severely diluting existing shareholders' ownership percentages.
Most concerning is the conversion price of $0.50, which typically indicates the company's stock is trading at depressed levels. The short 2-year expiration on the warrants suggests investors wanted a quick timeline to realize potential gains, further indicating low confidence in SRM's long-term prospects.
The use of proceeds for "general corporate purposes, including working capital" rather than specific growth initiatives often signals the funds are needed for ongoing operations rather than expansion. This typically indicates cash flow problems rather than strategic investment.
Dominari Securities acting as the sole placement agent—rather than a syndicate of banks—suggests limited interest from the investment banking community. Overall, while this financing provides needed capital, the terms reveal significant weakness in SRM's market position and financial health.
Winter Park, Florida, May 22, 2025 (GLOBE NEWSWIRE) -- SRM Entertainment, Inc. (Nasdaq: SRM) (“SRM” or the “Company”), a leading provider of creative and high-quality licensed media-themed merchandise, announces today that it has entered into a securities purchase agreement with an institutional investor for a private investment in public equity (“PIPE”) financing that is expected to result in gross proceeds to the Company of approximately
The Company intends to use the net proceeds from the offering for general corporate purposes, including working capital.
Pursuant to the terms of the securities purchase agreement, the Company is selling an aggregate of 5,000 shares of its Series A Convertible Preferred Stock, convertible into an aggregate of 10 million shares of common stock at a conversion price of
Dominari Securities LLC acted as the sole placement agent for the PIPE financing.
The securities being offered and sold by the Company in the private placement have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or state securities laws 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. The Company has agreed to file one or more registration statement with the Securities and Exchange Commission (“SEC”) covering the resale of the unregistered shares issuable upon the conversion of the Series A Convertible Preferred Stock and the shares issuable upon exercise of the warrants.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
About SRM Entertainment, Inc.
SRM Entertainment designs, develops, and manufactures custom merchandise which includes toys and souvenirs for the world's largest theme parks and other entertainment venues. Many of SRM’s creative products are based on award winning multi-billion-dollar entertainment franchises that are featured in popular movies and books. SRM products are distributed worldwide at Walt Disney Parks and Resorts, Universal Parks and Destinations, United Parks and Resorts – SeaWorld, Six Flags and other attractions. SRM’s products are offered alongside popular rides and attractions in theme parks, zoos, aquariums, and other entertainment venues. SRM’s design team developed specialty dolls, plush and toys for one of New York City’s landmarks that features a popular holiday show. SRM’s design team is credited with creating popular products which have been successfully sold at specialty theme park events. SRM’s exclusive-patented Sip With Me cups feature fun, kid friendly Zoo, Sea and animal themed characters as well as licensed characters from Smurfs, ICEE and Zoonicorn.
Caution Regarding Forward-Looking Statements
Certain statements in this announcement are forward-looking statements. Investors can identify these forward-looking statements by words or phrases such as “may,” “will,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,” “believe,” “is/are likely to,” “potential,” “continue” or other similar expressions. These statements are subject to uncertainties and risks including, but not limited to, the risk factors discussed in the Risk Factors and in the Management’s Discussion and Analysis of Financial Condition and Results of Operations sections of our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and other reports filed with the SEC and available at www.sec.gov. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and the Company cautions investors that actual results may differ materially from the anticipated results and encourages investors to review other factors that may affect its future results in the Company’s filings with the SEC. The Company undertakes no obligation to update or revise publicly any forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations that arise after the date hereof, except as may be required by law. The forward-looking statements contained herein are made only as of the date hereof.
Media and Investor Relations
Info@SRMentertainment.com
(407)-230-8100
website: SRMentertainment.com
FAQ
What is the size of SRM Entertainment's private placement announced in May 2025?
What is the conversion price for SRM's Series A Convertible Preferred Stock?
How many shares could be issued from SRM's May 2025 private placement?
What are the terms of the warrants in SRM Entertainment's 2025 PIPE financing?
How does SRM plan to use the proceeds from the private placement?
