SRM Entertainment, Inc. reported its financial results for the three and nine months ended September 30, 2024, revealing significant changes in revenue, profitability, and strategic developments compared to the previous fiscal period.

For the three months ended September 30, 2024, the company generated sales of $876,392, a decline from $1,128,062 in the same period of 2023. This decrease was attributed to reduced attendance at customer theme parks. Gross profit for the quarter was $196,518, down from $229,350 year-over-year, although gross margins improved to 22.4% from 20.3%. Operating expenses decreased to $1,328,851 from $1,717,777, primarily due to reductions in legal and professional fees and the absence of stock-based compensation in 2023. The net loss for the quarter was $(1,128,872), an improvement from a net loss of $(1,486,749) in Q3 2023.

For the nine months ended September 30, 2024, total sales were $3,390,676, down from $4,556,905 in the same period of 2023. Gross profit for this period also decreased to $684,731 from $973,192, with gross margins declining to 20.2% from 21.4%, impacted by increased manufacturing costs. Operating expenses surged to $4,058,546, significantly higher than $2,227,433 in 2023, reflecting the costs associated with being a public company. The net loss for the nine months was $(3,359,847), compared to $(1,296,729) in the prior year.

The company’s total assets increased to $5,731,490 as of September 30, 2024, from $4,543,074 at the end of 2023. However, total current assets decreased to $2,805,918, with cash on hand significantly reduced to $1,026,396 from $2,980,741. The company reported a secured loan from a related party amounting to $1,508,877.

Strategically, SRM Entertainment completed an asset purchase agreement with Suretone Entertainment, Inc. on September 3, 2024, acquiring assets related to the movie "The Kid" for $2,893,000. The payment structure included $250,000 in cash, 1,500,000 restricted shares, and a secured promissory note of $1,500,000. The company also issued 900,000 shares for services and 1,500,000 shares for asset purchases during the nine months ended September 30, 2024.

Overall, SRM Entertainment's financial performance reflects challenges in revenue generation and increased operational costs, alongside strategic acquisitions aimed at enhancing its market position.