Tron Goes Public: SRM Entertainment Merger with TRON (Tron IPO via Reverse Merger)

SRM Entertainment, Inc. (Nasdaq: SRM) is a Nevada corporation, headquartered in Winter Park, Florida, and was incorporated on April 22, 2022. It operates alongside its wholly owned Hong Kong subsidiary, SRM Entertainment Limited, which was established in January 1981. Over the years, SRM has built a reputation designing, developing, and manufacturing custom merchandise, ranging from plush toys to specialty dolls, for the world’s top theme parks and entertainment venues.

The company holds licensing relationships with major content providers such as Walt Disney Parks and Resorts, Universal Parks and Destinations, SeaWorld, Six Flags, Cedar Fair, Herschend Family Entertainment, and Merlin Entertainment. It also boasts licenses with Smurfs, ICEE and Zoonicorn, allowing it to extend popular entertainment franchises into collectible souvenirs and immersive fan experiences. SRM’s products generally retail between $2.50 and $50.00, catering to both impulse buyers and dedicated collectors.

Prior to the reverse merger, SRM closed a $5 million PIPE financing in May 2025, issuing 5,000 shares of Series A Convertible Preferred Stock, convertible into roughly 8.9 million common shares at $0.56 per share, along with warrants exercisable at $0.65 per share, to support general corporate operations and working capital needs.

Understanding the Reverse Merger

A reverse merger allows a private company’s assets or business strategy to merge into an existing public shell, bypassing the time and expense of a traditional initial public offering. In this case, interests tied to the TRON blockchain merged into SRM’s public vehicle, setting the stage for a rebranding as Tron Inc and positioning the company as a publicly listed blockchain enterprise .

On June 16, 2025, SRM entered into a Securities Purchase Agreement with an institutional investor for a $100 million private investment in public equity . Under the SPA, SRM will issue 100,000 shares of Series B Convertible Preferred Stock, each convertible into 2,000 common shares at $0.50 per share - yielding up to 200 million common shares on full conversion . Simultaneously, the company granted 220 million warrants to purchase common shares at $0.50 each, exercisable immediately, expiring two years from the issuance date .

A critical protective feature caps conversion of the preferred shares at no more than 19.99 percent of outstanding common stock without prior stockholder approval, safeguarding existing shareholders from excessive dilution. The SPA also outlines customary anti-dilution adjustments in the event of stock splits, dividends or other corporate actions affecting common stock.

Terms of the Securities Purchase Agreement

Key terms of the transaction include:

• Payment in TRX: On or before June 30, 2025, the $100 million purchase price will be remitted entirely in TRON tokens (TRX) at the June 15 closing price. The tokens will be held in a custodial wallet governed by Tron Inc’s board of directors .

• Name Change to Tron Inc: Upon closing, SRM will officially change its corporate name to Tron Inc, aligning the public shell with its new blockchain focus .

• Placement Agent: Dominari Securities LLC acted as the exclusive placement agent, and the company agreed to cover certain out-of-pocket expenses, including $50,000 in legal fees .

• Registration Obligations: The securities have not been registered under the Securities Act of 1933 and were offered only to accredited investors. Tron Inc has agreed to file registration statements with the SEC to facilitate the resale of shares issuable upon conversion or exercise of the warrants.

The SPA issuance took place on the same day as execution, June 16, 2025, marking a swift transition from negotiating table to execution.

Justin Sun’s Advisory Role

Concurrently with the PIPE deal, Tron Inc entered into an Advisory Agreement with Justin Sun, the founder of the TRON blockchain. Sun will provide strategic guidance, leveraging his extensive network, deep understanding of decentralized finance, and hands-on experience growing TRON into one of the world’s leading Layer-1 protocols.

To strengthen governance, Weike Sun, Justin’s father and the sole shareholder of the investor entity, has been appointed to Tron Inc’s board of directors in connection with the offering. This alignment ensures that the advisory and investment interests are closely coordinated with the company’s long-term strategic vision.

Building the TRX Treasury Strategy

The heart of Tron Inc’s post-merger blueprint is its TRX Treasury Strategy, designed to harness the benefits of a decentralized network while generating tangible returns for shareholders. Key components include:

• TRX Acquisition: The initial $100 million equity infusion in TRX tokens forms the core treasury. These tokens will remain on Tron’s blockchain under board-approved custody .

• Staking Program: Tron Inc plans to stake its TRX holdings, participating as a network validator or delegator to earn staking rewards. These rewards can compound over time, creating a recurring income stream beyond traditional product sales .

• Dividend Policy: Once the staking program achieves stable and predictable yields, Tron Inc intends to implement a dividend policy that distributes a portion of those rewards to common shareholders, offering direct crypto-native returns .

• Upside from Warrants: Full exercise of the 220 million warrants at $0.50 per share would raise an additional $110 million, bringing the total potential TRX treasury to $210 million and enhancing long-term value creation .

This treasury strategy aligns Tron Inc with broader trends in decentralized finance, tapping into the $78.7 billion US dollar stablecoin supply on TRON and the network’s daily on-chain volume exceeding $20 billion .

Implications for Investors & the Blockchain Ecosystem

• Shareholder Upside: Investors gain exposure to both equity in a public company and the potential yields from staking native digital assets.

• Moderated Dilution: The 19.99 percent conversion cap protects against excessive dilution, preserving value for existing shareholders.

• Regulatory Framework: While offerings were limited to accredited investors, Tron Inc is proactively filing SEC registration statements to facilitate liquidity and compliance.

• Network-Leading Metrics: TRON’s low fees, high throughput and robust stablecoin ecosystem position Tron Inc for growth as decentralized finance and digital payments gain mainstream adoption .

• Risks: Token price volatility, regulatory shifts in cryptocurrency markets and execution risks around staking operations warrant careful consideration.

Wrapping Up

The reverse merger of SRM Entertainment into Tron Inc marks a bold evolution from physical merchandise to blockchain finance. With $100 million in TRX tokens secured, a clear staking-driven dividend policy, and Justin Sun’s advisory backing, Tron Inc is poised to capture the convergence of entertainment and decentralized finance.

Looking Ahead

• June 30, 2025: Completion of TRX token deposit.

• Q3 2025: Launch of staking operations and initial reward distributions.

• Q4 2025: SEC registration statements effective, enabling broader trading of conversion shares and warrants.

• 2026: Potential dividend payouts and exploration of additional blockchain partnerships.

Frequently Asked Questions

What is a reverse merger and how does it apply here?

A reverse merger is when a private entity merges into a public shell, enabling the private business to become publicly listed without a traditional IPO. SRM issued new preferred shares and warrants, adopted the Tron Inc name, and injected TRX tokens into its treasury, effectively merging with TRON interests.

How will the $100 million be paid and managed?

The investor will pay directly in TRX tokens by June 30, 2025, based on the June 15 closing price. Tokens will be secured in a board-controlled custodian wallet and deployed into staking.

What role does Justin Sun play?

Justin Sun serves as a strategic advisor, guiding Tron Inc’s growth initiatives, connecting the company to the broader TRON community and providing industry expertise.

What happens if warrants are fully exercised?

Warrant exercise would inject $110 million more in capital, raising the total potential TRX treasury to $210 million and reinforcing Tron Inc’s balance sheet.

When can shareholders expect dividends?

Tron Inc aims to initiate dividends once its TRX staking operations produce consistent rewards, targeted for late 2025 or early 2026.

TRON IPO

TRON IPO

Financial Disclaimer

This article is for informational purposes only and does not constitute an offer or solicitation to buy or sell securities. Investing in securities and blockchain tokens involves substantial risk, including the potential loss of principal. Readers should consult their own financial, legal and tax advisors before making any investment decisions. None of the information herein is intended as legal, tax or investment advice.