# EDGAR Filing Document

**Accession Number:** 0001956744
**File Stem:** 0001493152-23-003734
**Filing Date:** 2023-2
**Character Count:** 869502
**Document Hash:** ee4ffc2fed5cc7bb01efb72dd40ef1c6
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001493152-23-003734.hdr.sgml**: 20230531

**ACCESSION NUMBER**: 0001493152-23-003734

**CONFORMED SUBMISSION TYPE**: DRS/A

**PUBLIC DOCUMENT COUNT**: 21

**FILED AS OF DATE**: 20230206

**DATE AS OF CHANGE**: 20230206

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** SRM Entertainment, Inc.
- **CENTRAL INDEX KEY:** 0001956744
- **STANDARD INDUSTRIAL CLASSIFICATION:** GAMES, TOYS & CHILDREN'S VEHICLES (NO DOLLS & BICYCLES) [3944]
- **IRS NUMBER:** 320686534
- **STATE OF INCORPORATION:** NV
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** DRS/A
- **SEC ACT:** 1933 Act
- **SEC FILE NUMBER:** 377-06502
- **FILM NUMBER:** 23591677

**BUSINESS ADDRESS:**
- **STREET 1:** 1061 E. INDIANTOWN RD.
- **STREET 2:** STE 110
- **CITY:** JUPITER
- **STATE:** FL
- **ZIP:** 33477
- **BUSINESS PHONE:** 407-230-8100

**MAIL ADDRESS:**
- **STREET 1:** 1061 E. INDIANTOWN RD.
- **STREET 2:** STE 110
- **CITY:** JUPITER
- **STATE:** FL
- **ZIP:** 33477

**As confidentially submitted to the Securities and Exchange Commission on February 6, 2023**, **pursuant to the Jumpstart Our Business Startups Act of 2012.**

 **This Amendment No. 1 to Draft Registration Statement has not been publicly filed with the Securities and Exchange Commission and all information herein remains strictly confidential.**

**Registration No. 333-** 

**UNITED STATES** 

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM S-1**

**REGISTRATION STATEMENT** 

***UNDER***

***THE SECURITIES ACT OF 1933***

**SRM ENTERTAINMENT, INC.**

**(Exact name of Registrant as specified in its charter)** 

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| | | |
|:---|:---|:---|
| **Nevada** | **3944** | **32-0686534** |
| **(State or other Jurisdiction of**<br> **Incorporation or Organization)** | **(Primary Standard Industrial**<br> **Classification Code Number)** | **(I.R.S. Employer**<br> **Identification Number)** |

---

**1061 E Indiantown Road, Suite 110**

**Jupiter, FL 33477**

**407-230-8100** 

**(Address, including zip code, and telephone number, including area code, of Registrant's principal executive offices)** 

**Richard Miller**

**Chief Executive Officer** 

**1061 E Indiantown Road, Suite 110**

**Jupiter, FL 33477**

**407-230-8100**

**(Name, address, including zip code, and telephone number, including area code, of agent for service)** 

 ****

***With Copies to:***

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| | |
|:---|:---|
| **Arthur Marcus, Esq.**<br> **Sichenzia Ross Ference LLP**<br> **1185 Avenue of the Americas**<br> **New York, New York 10036**<br> **Tel: (212) 930-9700**<br> **Fax: (212) 930-9725** | **David E. Danovitch, Esq.**<br> **Angela Gomes, Esq.** <br> **Sullivan & Worcester LLP**<br> **1633 Broadway**<br> **New York, NY 10019**<br> **Tel: (212) 660-3060**<br> **Fax: (202) 660 3001** |

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**Approximate date of commencement of proposed sale to the public**: As soon as practicable after this registration statement becomes effective.

If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box. ☐

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act of 1933, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act of 1933, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act of 1933, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 under the Securities Exchange Act of 1934:

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

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐

**The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.**

<u>EXPLANATORY NOTE</u>

This Registration Statement relates to the (i) the distribution of an aggregate 2,000,000 shares of common stock, par value $0.0001 per share ("Common Stock"), of SRM Entertainment, Inc. ("we", "us", "our" or the "Company"), upon the effective date of this Registration Statement by Jupiter Wellness, Inc. to its stockholders and certain of its warrant holders of record as of the close of business on____, 2023; and (ii) the sale of shares of our Common Stock in an underwritten public offering.

The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the U.S. Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities, nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

SUBJECT TO COMPLETION

PRELIMINARY PROSPECTUS DATED FEBRUARY 6, 2023

**PROSPECTUS**

**SRM ENTERTAINMENT, INC.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Shares of Common Stock** 

This is a firm commitment initial public offering of shares of common stock, par value $0.0001 per share ("Common Stock"), of SRM Entertainment, Inc. ("we", "us", "our" or the "Company"), currently a wholly owned subsidiary of Jupiter Wellness, Inc. ("Jupiter Wellness"), based on an assumed public offering price of $, which is the midpoint of the range discussed below. We are offering all of the shares of Common Stock being offering by this prospectus. The registration statement of which this prospectus forms a part also relates to the registration of an aggregate of 2,000,000 shares of our Common Stock to be distributed by Jupiter Wellness on the date of this prospectus to its stockholders and certain of its warrant holders of record as of the close of business on____, 2023.

We anticipate the initial public offering price per share of Common Stock will be between US$ and US$ . The number of shares of Common Stock offered in this prospectus and all other applicable information has been determined based on an assumed public offering price of $ per share of Common Stock, which is the midpoint of the above range. The actual public offering price of the shares of Common Stock will be determined between the Underwriters and us at the time of pricing, considering our historical performance and capital structure, prevailing market conditions, and overall assessment of our business. Therefore, the assumed public offering price per share of Common Stock used throughout this prospectus may not be indicative of the actual public offering price for the shares of Common Stock (see "*Determination of Offering Price*" for additional information).

Currently, no public market exists for our Common Stock. We have applied to list our Common Stock for trading on The Nasdaq Capital Market ("Nasdaq") under the symbol "[●]."

We cannot guarantee that we will be successful in listing our Common Stock on Nasdaq. However, the consummation of this offering and the distribution are contingent on our Common Stock being approved for listing by Nasdaq. We will not consummate this offering or the distribution unless our Common Stock is so listed.

We are an "emerging growth company" as defined in the Jumpstart Our Business Startups Act (the "JOBS Act") and, as such, have elected to comply with certain reduced disclosure requirements for this prospectus and may elect to comply with certain reduced public company reporting requirements for future filings.

**Investing in the shares of Common Stock involves risks that are described in the "<u>Risk Factors</u>" section beginning on page 21 of this prospectus.**

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

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) In
 addition to the underwriting discount, we have also agreed to reimburse EF Hutton, division of Benchmark Investments, LLC, the representative
 of the underwriters (the "Representative"), for certain expenses, and to provide a non-accountable expense allowance
 equal to 1.0% of the gross proceeds of this offering payable to the Representative. We have also agreed to issue warrants to purchase
 up to shares of our Common Stock, equal to 5.0% of the aggregate number of
 shares of Common Stock sold in this offering (including shares of Common Stock to cover over-allotments, if any), to the Representative
 exercisable for shares of Common Stock at a per share price equal to 100% of the initial public offering price of the shares of Common
 Stock offered hereby (the "Representative's Warrants"). See the section titled "*Underwriting* "
 beginning on page 95 of this prospectus for additional information regarding total underwriter compensation.

The Representative may also exercise their option to purchase up to an additional shares of Common Stock from us, at the public offering price, less the underwriting discount, for 45 days after the date of this prospectus.

**Neither the U.S. Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.** 

The underwriters expect to deliver the shares of Common Stock against payment on , 2023.

*Sole Book-Running Manager* 

**EF HUTTON** 

division of Benchmark Investments, LLC

The date of this prospectus is , 2023.

**TABLE OF CONTENTS** 

---

| | |
|:---|:---|
|  | **Page** |
| [PROSPECTUS SUMMARY](#ao_001) | 1 |
| [TRADEMARKS, TRADE NAMES AND SERVICE MARKS](#ao_002) | 14 |
| [INDUSTRY AND MARKET DATA](#ao_003) | 14 |
| [CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS](#ao_004) | 14 |
| [THE DISTRIBUTION](#ao_005) | 16 |
| <br> [RISK FACTORS](#ao_006) | 21 |
| [USE OF PROCEEDS](#vj_001) | 45 |
| [DIVIDEND POLICY](#vj_002) | 46 |
| [CAPITALIZATION](#vj_003) | 47 |
| [DILUTION](#vj_004) | 48 |
| [UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS](#vj_006) | 50 |
| [MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](#vj_007) | 55 |
| [BUSINESS](#bus_001) | 63 |
| [MANAGEMENT](#vj_008) | 68 |
| [DIRECTORS](#vj_009) | 69 |
| [EXECUTIVE COMPENSATION](#ah_001) | 72 |
| [CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS](#ah_002) | 76 |
| [PRINCIPAL STOCKHOLDERS](#ah_003) | 84 |
| [DESCRIPTION OF CAPITAL STOCK](#ah_004) | 85 |
| [SHARES ELIGIBLE FOR FUTURE SALE](#ah_005) | 90 |
| [MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES FOR NON-U.S. HOLDERS OF OUR COMMON STOCK](#ah_006) | 92 |
| [UNDERWRITING](#ah_007) | 95 |
| [LEGAL MATTERS](#ah_008) | 100 |
| [EXPERTS](#ah_009) | 100 |
| [WHERE YOU CAN FIND MORE INFORMATION](#ah_010) | 100 |
| [INDEX TO COMBINED FINANCIAL STATEMENTS](#kuj_008) | F-1 |

---

You should rely only on the information contained in this prospectus or contained in any free writing prospectus filed with the U.S. Securities and Exchange Commission (the "SEC"). We have not and the underwriters have not authorized anyone to provide you with any information other than that contained in this prospectus or in any free writing prospectus prepared by or on behalf of us and filed with the SEC. We and the underwriters take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. We are offering to sell, and seeking offers to buy, shares of our Common Stock only in jurisdictions where such offers and sales are permitted. The information in this prospectus or any free writing prospectus is accurate only as of its date, regardless of its time of delivery or the time of any sale of shares of our Common Stock. Our business, financial condition, results of operations and prospects may have changed since that date.

Information contained in, and that can be accessed through our website, https://www.srmentertainment.com/, shall not be deemed to be part of this prospectus or incorporated herein by reference and should not be relied upon by any prospective investors for the purposes of determining whether to purchase the shares of Common Stock offered hereunder. The registration statement of which this prospectus forms a part also relates to the registration of an aggregate of 2,000,000 shares of our Common Stock to be distributed by Jupiter Wellness on the date of this prospectus to Jupiter Wellness stockholders and certain warrant holders of record as of the close of business on____, 2023.

i

**PROSPECTUS SUMMARY** 

*This summary highlights certain information about us and this offering and the distribution contained elsewhere in this prospectus, but it is not complete and does not contain all of the information you should consider before investing in shares of our Common Stock. In addition to this summary, you should read this entire prospectus carefully, including the risks of investing in shares of our Common Stock and the other information discussed in the section titled "Risk Factors," and the financial statements and the related notes included elsewhere in this prospectus, before making an investment decision. This summary contains forward-looking statements that involve risks and uncertainties. Our actual results may differ significantly from the results discussed in the forward-looking statements as a result of certain factors, including those set forth in the sections titled "Risk Factors" and "Cautionary Statement Regarding Forward-Looking Statements."*

 

*We describe in this prospectus the businesses that will be contributed to us by Jupiter Wellness as part of our separation from Jupiter Wellness as if they were our businesses for all historical periods described. Please see the section titled "Certain Relationships and Related Party Transactions—Relationship with Jupiter Wellness—Arrangements between Jupiter Wellness and Our Company" for a description of this separation. Our historical financial statements, which are discussed below, are prepared on a stand-alone basis in accordance with U.S. generally accepted accounting principles ("GAAP") and are derived from Jupiter Wellness's consolidated financial statements and accounting records using the historical results of operations and assets and liabilities attributed to our operations, and include allocations of expenses from Jupiter Wellness. Our historical results are not necessarily indicative of our results in any future period.*

 

*As used in this prospectus, the terms "SRM," the "Company," "we," "us" and "our" may, depending on the context, refer to SRM Entertainment, Inc., SRM Entertainment Limited, to the SRM segment of Jupiter Wellness, Inc. as described more particularly under "Certain Relationships and Related Party Transactions—Relationship with Jupiter Wellness—Historical Relationship with Jupiter Wellness" or to SRM Entertainment, Inc., SRM Entertainment Limited, and its consolidated subsidiaries after giving effect to the separation described under "Certain Relationships and Related Party Transactions—Relationship with Jupiter Wellness—Arrangements between Jupiter Wellness and Our Company." As used in this prospectus, the term "Jupiter Wellness" refers to Jupiter Wellness, Inc.* 

**Overview**

SRM is a trusted toy and souvenir designer and developer, selling into the world's largest theme parks and entertainment venues. For over 30 years, SRM has developed, manufactured and supplied the entertainment and amusement park industry with exclusive products that are often only available to consumers inside SRM's worldwide customer base venues such as Walt Disney Parks and Resorts, Universal Studios, SeaWorld, Six Flags, Great Wolf Lodge, Dollywood and Merlin Entertainment.

Our business is built on the principle that almost everyone is a fan of something and the evolution of pop culture is leading to increasing opportunities for fan loyalty. We create whimsical, fun and unique products that enable fans to express their affinity for their favorite "something"—whether it is a movie, TV show, favorite celebrity, or favorite restaurant. We infuse our distinct designs and aesthetic sensibility into a wide variety of product categories, including figures, plush, accessories, apparel, and homewares. We believe we sit at the nexus of pop culture—content providers value us for our broad network of retail customers, retailers value us for our portfolio of pop culture products and pop culture insights, and consumers value us for our distinct, stylized products and the content they represent.

Pop culture pervades modern life and almost everyone is a fan of something. Today, more quality content is available and technology innovation has made content accessible anytime, anywhere. As a result, the breadth and depth of pop culture fandom resembles, and in many cases exceeds, the type of fandom previously associated only with sports. Everyday interactions at home, work or with friends are increasingly influenced by pop culture.

We have invested strategically in our relationships with key constituents in pop culture. Content providers value us for our broad network of retail customers and retailers value us for our pop culture products, pop culture insights and ability to drive consumer traffic. Consumers, who value us for our distinct, stylized products, remain at the center of everything we do.

**Content Providers**: We have licensing relationships with many established content providers, and our products appear in venues such as Walt Disney Parks and Resorts, Universal Studios, SeaWorld, Six Flags, Great Wolf Lodge, Dollywood and Merlin Entertainment. We currently have licenses with Smurfs and Zoonicorn LLC, from which we can create multiple products based on each character within. Content providers trust us to create unique, stylized extensions of their intellectual property that extend the relevance of their content with consumers through ongoing engagement, helping to maximize the lifetime value of their content.

**Retail Channels**: We can provide our retail customers a customized product mix designed to appeal to their particular customer bases. Theme parks and the entertainment industry recognize the opportunity presented by the demand for pop culture products and are continuing to dedicate space to our products and the pop culture category. We believe meaningful traffic to our products will continue because our products have their own built-in fan base, are refreshed regularly creating a "treasure hunt" shopping experience for consumers and are often supplemented with exclusive products that are at the forefront of pop culture.

**Consumers**: Fans are increasingly looking for ways to express their affinity for and engage with their favorite pop culture content. Over time, many of our consumers evolve from occasional buyers to more frequent purchasers, whom we categorize as enthusiasts or collectors. We create products to appeal to a broad array of fans across consumer demographic groups—men, women, boys and girls—not a single, narrow demographic. We currently offer an array of products that sell across several categories. Our products are generally priced between $2.50 and $50.00, which allows our diverse consumer base to express their fandom frequently and impulsively. We continue to introduce innovative products designed to facilitate fan engagement at different price points and styles.

We have developed a nimble and low-fixed cost production model. The strength of our management team and relationships with content providers, retailers and third-party manufacturers allows us to move from product concept to a new product tactfully. As a result, we can dynamically manage our business to balance current content releases and pop culture trends with timeless content based on classic movies, such as Harry Potter or Star Wars. This has allowed us to deliver significant growth while lessening our dependence on individual content releases.

**Our History** 

SRM Entertainment Limited was incorporated in Hong Kong on January 14, 1981 ("SRM Limited"). Jupiter Wellness acquired SRM Limited in November 2020. In April 2022, the Company was formed to acquire SRM Limited. SRM supplies the amusement park industry with exclusive products that are intended to be sold in amusement parks. For over 30 years, SRM has developed, manufactured and supplied the amusement park industry with exclusive products that are often only available to consumers inside the relevant amusement park. SRM principally produces battery-operated products for theme parks and entertainment venues, such as Disney Parks and Resorts, Disney Stores, Universal Resorts, SeaWorld, Sesame Place, Busch Gardens, Merlin Entertainment and Madison Square Garden. SRM has developed products in conjunction with suppliers of products for core licenses, such as Harry Potter, Frozen, Marvel and Star Wars. SRM develops and distributes toys, plush and hydration products to retailers worldwide. SRM develops product strategies in order to bring product concepts to reality.

**Our Market Opportunity** 

We believe we are well-positioned to extend our current market leadership to the broader retail market as we continue to launch new product lines and services.

**How We Plan to Grow** 

Our goal is to continue to develop innovative products and concepts alongside well-known brands and licensed trademarks. The key elements of our growth strategy to achieve this goal is to enter expanding categories of products, and develop and grow the licensed Sip with Me line of hydration products to be designed and sold into retail outlets and theme parks worldwide.

We are positioning SRM to capture new market share in the global toy market. Our branded products are designed to educate through interactive content fostering, social and emotional growth, health and wellness, and love and respect for the environment and all creatures. We sell toys for franchises, such as the Wizarding World of Harry Potter, Star Wars, Avatar, Men in Black, Transformers, Despicable Me, Nintendo, Sesame Street, and Toy Story. In addition, we are currently developing new product lines for Smurfs and Zoonicorn franchises. The U.S. retail sales of toys increased by 13%, totaling $28.6 billion in 2021 compared to $25.4 billion in 2020 as reported by the NPD Group's retail tracking service on January 27, 2021.

Our core business opportunities are to continue selling and developing innovative products for theme parks and current customers, adding licensed character hydration and dinnerware from the Smurfs and Zoonicorn set to current assortments.

 ***Long-term Growth Strategy***. We plan to further develop the Sip with Me product assortment by adding stainless water bottles, plush back packs and journals and notepads in the second quarter of 2023; melamine in the first quarter of 2023; and light up drinkware and vinyl figures in the fourth quarter of 2023 or the first quarter of 2024. All of the aforementioned products have been designed and manufactured, except for plush back packs which have completed the design phase and scheduled for production and delivery in the second quarter of 2023.

We have signed license agreements with Smurfs and Zoonicorn for our Sip with Me product assortments to sell in retail markets beginning in 2023. Our marketing goals include animal character products creating a "collect all" mentality and distributing Sip with Me and other product assortments to gift representative groups nationally.

Recent revenues were $2,665,827 for the fiscal year ended December 31, 2021 and $2,958,199 for the fiscal year ended December 31, 2020. For the nine months ended September 30, 2022, revenues were $5,199,807. Sales were negatively impacted by the pandemic closures of theme parks in 2020 and 2021 and have improved in 2022. We plan to sell our proprietary brands and designs into new channels: convenience stores, additional venues and museums, and theme restaurants.

We plan to grow brand awareness for SRM products through direct and indirect marketing and form a lasting relationship with our end-users throughout their journey from product discovery through the entire lifecycle of ownership. We also plan on developing new sales channels, in addition to our current retail footprint, to address commercial vertical opportunities beyond the theme-park and entertainment industry.

**Recent Developments**

In April 2022, the Company was formed by the below listed founders (the "Founders") with verbal agreements regarding the management and equity participation in the acquisition of SRM Limited.

From November 28, 2022 to December 7, 2022, we executed subscription agreements pursuant to which we issued an aggregate of 1,700,000 outstanding shares of our Common Stock to the following Founders of the Company: Richard Miller, Chief Executive Officer & Director, 600,000 shares; Brian S. John, Secretary and Chairman, 300,000 shares; Taft Flittner, President, 300,000 shares; Doug McKinnon, 200,000 shares; Markita Russell, 100,000 shares; and Debbie McDaniel-Hand, Vice President of Production Development and Operations, 200,000 shares.

**Jupiter Wellness Ownership and Our Separation from Jupiter Wellness**

Currently, and at all times prior to the date of this prospectus, we are and will be an operating segment of Jupiter Wellness. Upon the completion of this offering, we expect that Jupiter Wellness will own the majority (%) of our outstanding Common Stock (or % if the Representative exercises in full its option to purchase additional shares of Common Stock). Following this offering, our operations and those of Jupiter Wellness will be operated separately, although we expect that Jupiter Wellness will continue to consolidate our financial results into their financial statements as owners of % of our outstanding Common Stock.

Prior to the effective date of the registration statement of which this prospectus forms a part, we will enter into an agreement (the "separation agreement") with Jupiter Wellness that will govern the separation of our business from Jupiter Wellness and various interim arrangements. The separation agreement will be in effect prior to the effective date of the registration statement of which this prospectus forms a part. The separation agreement will provide for, among other things, the transfer from Jupiter Wellness to us of assets and the assumption by us of liabilities comprising our business. For more information regarding the assets and liabilities to be transferred to us, see our unaudited pro forma condensed combined financial statements and the related notes included elsewhere in this prospectus.

On December 9, 2022, we also entered into a stock exchange agreement (the "Exchange Agreement") with Jupiter Wellness. We expect to consummate the transactions contemplated by the Exchange Agreement immediately prior to the effective date of this registration statement of which this prospectus forms a part. Pursuant to the Exchange Agreement, we will issue to Jupiter Wellness 7,300,000 shares of our Common Stock (representing 81.1% of our outstanding Common Stock) in exchange for 2 ordinary shares of SRM Limited (representing all of the issued and outstanding shares of SRM Limited).

Jupiter Wellness will distribute 2,000,000 of the shares of our Common Stock it receives pursuant to the Exchange Agreement to holders of Jupiter Wellness common stock (the "Jupiter Wellness Common Stock") and certain warrant holders of record as of the close of business on____, 2023.

In this prospectus, references to the "contribution" refer to Jupiter Wellness's transfer to us (in connection with certain reorganization transactions) of the assets and liabilities related to our business, and the term "separation" refers to the separation of our business from Jupiter Wellness's other businesses (including the contribution), along with the effectiveness of the separation agreement between us and Jupiter Wellness.

See the section titled "*Certain Relationships and Related Party Transactions—Relationship with Jupiter Wellness*" for a more detailed discussion of the separation agreement. Our separation from Jupiter Wellness will be made in the context of a parent-subsidiary relationship and will be entered into in the overall context of our separation from Jupiter Wellness. The terms of the separation agreement may be more or less favorable to us than if they had been negotiated with unaffiliated third parties. See the section titled "*Risk Factors—Risks Related to Our Separation from Jupiter Wellness*."

The registration statement of which this prospectus forms a part also registers the distribution by Jupiter Wellness of 2,000,000 shares of our Common Stock it owns to its stockholders in a transaction that is generally expected to be tax-free for U.S. federal income tax purposes (the "distribution"). Under current tax law, Jupiter Wellness must retain beneficial ownership of at least 80% of our combined voting power and 80% of each class of nonvoting capital stock, if any is outstanding, until immediately prior to such distribution in order to so qualify. To preserve the tax-free treatment of the separation and distribution, the separation agreement includes certain covenants and restrictions to ensure that, until immediately prior to the distribution, Jupiter Wellness will retain beneficial ownership of at least 80% of our combined voting power and 80% of each class of nonvoting capital stock, if any is outstanding. Jupiter Wellness has no obligation to effect a distribution of any of its remaining ownership interest, and it may retain its ownership interest in us indefinitely or dispose of all or a portion of its ownership interest in us in a sale or other transaction. Any such distribution or other disposition by Jupiter Wellness of its remaining interest in us (each, an "other disposition") would be subject to market, tax and legal considerations, final approval by the Jupiter Wellness board of directors (the "Jupiter Wellness Board") and other customary requirements.

Under current law, the distribution could be rendered taxable to Jupiter Wellness and its stockholders as a result of certain post-distribution acquisitions of our shares or assets. For example, the distribution may result in taxable gain to Jupiter Wellness under Section 355(e) of the Internal Revenue Code of 1986, as amended (the "Code"), if the distribution were later deemed to be part of a plan (or series of related transactions) pursuant to which one or more persons acquire, directly or indirectly, shares representing a 50% or greater interest (by vote or value) in us. To preserve the tax-free treatment of the separation and distribution, we intend to agree in the separation agreement that we and our subsidiaries will be subject to certain restrictions during the two-year period following the distribution that are intended to prevent the distribution, together with certain related transactions, from failing to qualify as a transaction that is generally tax-free for U.S. federal income tax purposes under Sections 355 and 368(a) (1)(D) of the Code. Specifically, during such period, except in specific circumstances or unless Jupiter Wellness waives our obligation to comply with such restrictions, we expect that we and our subsidiaries will generally be prohibited from: (i) ceasing to conduct certain businesses, (ii) entering into certain transactions or series of transactions pursuant to which all or a portion of our Common Stock would be acquired or all or a portion of certain of our and our subsidiaries' assets would be acquired, (iii) liquidating, merging or consolidating with any other person, (iv) issuing equity securities beyond certain thresholds, (v) repurchasing our stock other than in certain open-market transactions or (vi) taking or failing to take any other action that would cause the distribution, together with certain related transactions, to fail to qualify as a transaction that is generally tax-free for U.S. federal income tax purposes under Section 355 and 368(a)(1)(D) of the Code. These restrictions may limit our ability to pursue certain equity issuances, strategic transactions or other transactions that may maximize the value of our business, but which would result in Jupiter Wellness owning less than 50% of our Common Stock.

Jupiter Wellness has no obligation to pursue or consummate any further disposition of its ownership interest in us by any specified date or at all.

We believe, and Jupiter Wellness has advised us that it believes, that the separation, this offering and the distribution will provide a number of benefits to our business and to Jupiter Wellness' business. These intended benefits include improving the strategic and operational flexibility of both companies, increasing the focus of the management teams on their respective business operations and allowing each company to adopt the capital structure, investment policy and dividend policy best suited to its financial profile and business needs, and providing each company with its own equity currency to facilitate acquisitions and to better incentivize management. In addition, as we will be a stand-alone company, potential investors will be able to invest directly in our business.

**Company Information** 

We were incorporated in Nevada on April 22, 2022. On November 30, 2020, Jupiter Wellness acquired all of the capital stock of SRM Limited. Our principal executive offices are at 1061 E Indiantown Road, Suite 110 Jupiter, FL 33477, and our telephone number is 407-230-8100. Our website is <u>https://www.srmentertainment.com</u>. The information and other content contained in, or accessible through, our website are not part of, and is not incorporated into, this prospectus, and investors should not rely on any such information in deciding whether to invest in our Common Stock.

**Implications of Being an Emerging Growth Company and Smaller Reporting Company**

As a company with less than $1.235 billion in revenue during our last fiscal year, we qualify as an "emerging growth company," as defined in the Jumpstart Our Business Startups Act (the "JOBS Act"). Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended (or the "Securities Act"), for complying with new or revised accounting standards. Thus, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.

An emerging growth company may also take advantage of reduced reporting requirements that are otherwise applicable to public companies. These provisions include, but are not limited to:

● 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

We may take advantage of these provisions until the last day of our fiscal year following the fifth anniversary of the date of the first sale of our common equity securities pursuant to an effective registration statement under the Securities Act, which such fifth anniversary will occur in 2026. However, if certain events occur prior to the end of such five-year period, including if we become a "large accelerated filer," our annual gross revenues exceed $1.235 billion or we issue more than $1.0 billion of non-convertible debt in any three-year period, we will cease to be an emerging growth company prior to the end of such five-year period.

We have elected to take advantage of certain of the reduced disclosure obligations regarding executive compensation in this prospectus and, as long as we continue to qualify as an emerging growth company, we may elect to take advantage of this and other reduced burdens in future filings. As a result, the information that we provide to our stockholders may be different than you might receive from other public reporting companies in which you hold equity interests.

We are also a "smaller reporting company," as defined under SEC Regulation S-K. As such, we also are exempt from the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act and also are subject to less extensive disclosure requirements regarding executive compensation in our periodic reports and proxy statements. We will continue to be deemed a smaller reporting company until our public float exceeds $75 million on the last day of our second fiscal quarter in the preceding fiscal year.

**Implications of Being a "Controlled Company" under Nasdaq Listing Rules**

Jupiter Wellness currently beneficially owns 81.1% of SRM. Our Founders currently beneficially own 18.9% of SRM. The aforementioned provides Jupiter Wellness with 81.1% of the voting power of our voting stock and the Founders with 18.9% of the voting power of SRM. Upon the closing of this offering, Jupiter Wellness will beneficially own approximately % of the shares of Common Stock and % of the voting power of our voting stock (approximately % if the over-allotment is exercised in full) and our Founders will own collectively % of the voting power of our voting stock upon the closing of this offering (approximately % if the over-allotment is exercised in full) and Jupiter Wellness will remain the majority shareholder. We currently meet the definition of a "controlled company" under the corporate governance standards for Nasdaq listed companies and for so long as we remain a "controlled company" under this definition, we are eligible to utilize certain exemptions from the corporate governance requirements of Nasdaq, including the requirements (i) that a majority of the Board consist of independent directors, (ii) to have a governance committee that is composed entirely of independent directors with a written charter addressing the committee's purpose and responsibilities, (iii) to have a compensation committee that is composed entirely of independent directors with a written charter addressing the committee's purpose and responsibilities, (iv) that the compensation committee consider certain independence factors when engaging legal counsel and other committee advisors and (v) for an annual performance evaluation of the governance and compensation committees.

**Risk Factor Summary**

*You should consider carefully the risks and uncertainties described in this prospectus before investing in our securities. These risks are discussed more fully in the section titled "Risk Factors" following this summary. If any of these risks actually occur, our business, financial condition or results of operations would likely be materially adversely affected. These risks include, but are not limited to, the following:*

 

**Risks Related to the Distribution and Our Separation from Jupiter Wellness**

● The terms of the separation agreement in connection with the separation may limit our ability to take certain actions, which may prevent us from pursuing opportunities to raise capital, acquire other businesses or provide equity incentives to our employees, which could impair our ability to grow.

● Jupiter Wellness's interests may conflict with our interests and the interests of our other stockholders. Conflicts of interest between us and Jupiter Wellness could be resolved in a manner unfavorable to us and our other stockholders.

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● If the distribution, together with certain related transactions, does not qualify as a transaction that is generally tax-free for U.S. federal income tax purposes, Jupiter Wellness, us and our stockholders could be subject to significant tax liabilities, and, in certain circumstances, we could be required to indemnify Jupiter Wellness for material taxes and other related amounts pursuant to indemnification obligations under the separation agreement.

● Some of our directors and executive officers own Jupiter Wellness Common Stock, restricted shares of 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.

**Risks Related to Our Business** 

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● 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.

● Failure to successfully implement new initiatives or meet product introduction schedules can have an adverse effect on SRM's business, financial condition, and results of operations.

● 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.

**Risks Related to This Offering and Ownership of Our Common Stock**

● No market currently exists for our Common Stock. We cannot assure you that an active trading market will develop for our Common Stock.

● 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.

● We are a "controlled company" within the meaning of the Nasdaq listing rules and may follow certain exemptions from certain corporate governance requirements that could adversely affect our public shareholders.

● Concentration of ownership among our existing principal stockholder, executive officers, directors and their affiliates may prevent new investors from influencing significant corporate decisions.

**The Offering** 

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| **Issuer** | SRM Entertainment, Inc. |

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| **Common Stock offered by us in this offering** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares of Common Stock (shares of Common Stock if the Representative exercises in full its option to purchase additional shares of Common Stock). |

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| **Common Stock to be held by Jupiter Wellness immediately after this offering** | 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____, 2023.  |

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| **Common Stock to be outstanding immediately after this offering** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares (shares of Common Stock if the Representative exercises in full its option to purchase additional shares of Common Stock). |

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| **Underwriters' option** | We have granted the underwriters 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. |

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| **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 approximately $ million (or approximately $ million if the underwriters' option to purchase additional shares is exercised in full), based on an assumed public offering price of $ per share, the midpoint of the price range set forth on the cover page of this prospectus. 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*."  |

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| **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. |

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| **Stock exchange symbol** | We have applied to list our Common Stock for trading on Nasdaq under the symbol "[●]." No assurance can be given that our application will be approved. |
| **Lock-Up Agreements** | We, along with our directors, officers and all stockholders except those receiving Common Stock in the distribution, 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 180 days from the date of this prospectus. See "Underwriting" beginning on page 95. |

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Unless otherwise indicated, all references to the number and percentage of shares of Common Stock outstanding and percentage ownership information are based on our "pro forma shares of Common Stock," in each case following this offering and the separation and assuming the following:

● there is no exercise of the underwriters' option to purchase up to additional shares of our Common Stock; and

● no exercise of Representative's Warrants.

● The number of pro forma shares of Common Stock excludes approximately 1,500,000 shares of our Common Stock reserved for issuance under our equity incentive plan for our employees and directors.

**The Distribution**

Please see "The Distribution" for a more detailed description of the matters described below.

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.

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| Distributed Company | SRM is 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. |

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| Distribution Ratio | Each holder of Jupiter Wellness Common Stock (including 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 seventeen shares of Jupiter Wellness Common Stock held or underlying the July Warrants on the record date.  |

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| 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____, 2023. The shares of our Common Stock to be distributed are registered herein and will be eligible for immediate resale. 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.  |

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| Fractional Shares | Fractional shares of our Common Stock will not be distributed. Fractional shares of our Common Stock will be aggregated and sold in the public market by the transfer and distribution agent, and stockholders will receive a cash payment in lieu of a fractional share. The aggregate net cash proceeds of these sales will be distributed ratably to holders of Jupiter Wellness Common Stock who would otherwise have received fractional interests. These proceeds generally will be taxable to those stockholders. |

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| 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 , 2023 |

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Distribution Date 11:59 p.m., New York City time, on , 2023.

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| Material U.S. Federal Income Tax Consequences of the Distribution | Jupiter Wellness expects to obtain an opinion from Sichenzia Ross Ference LLP substantially to the effect that, among other things, the distribution by Jupiter Wellness of our Common Stock to the holders of Jupiter Wellness Common Stock will qualify as a tax-free distribution under the Code. The Distribution is expected to qualify as a tax-free distribution for U.S. federal income tax purposes for Jupiter Wellness and its stockholders with respect to SRM stock that is distributed with respect to the stock of Jupiter Wellness and, except to the extent a stockholder receives cash in lieu of fractional shares of our Common Stock, no income, gain or loss will be recognized by, and no amount will be included in the income of, such holder upon the receipt of shares of our Common Stock pursuant to the Distribution. The opinion and the above discussed consequences do not apply to the distribution of SRM Common Stock with respect to the July Warrants, and holders of July Warrants should consult with their own tax advisors. Certain transactions related to the Distribution that are not addressed by the opinion could result in the recognition of income or gain by Jupiter Wellness. The opinion will rely on factual representations and reasonable assumptions, which, if incorrect or inaccurate, may jeopardize the ability to rely on such opinion. The opinion will not be binding on the Internal Revenue Service ("IRS") or the courts. See "*The Distribution — Material U.S. Federal Income Tax Consequences of the Distribution*." |

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Sichenzia Ross Ference LLP has acted as our special tax counsel, has reviewed this summary and is of the opinion that the discussion contained herein is a fair and accurate summary in all material respects.<br>

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| Relationship Between Jupiter Wellness and Us After the Distribution | Following the Distribution, we will be a separate public company. We and Jupiter Wellness will enter into a separation agreement for the purpose of accomplishing the distribution of our Common Stock to the Jupiter Wellness stockholders. The separation agreement will govern our relationship with Jupiter Wellness subsequent to the Distribution and provide for the allocation of employee benefit, tax and some other liabilities and obligations attributable to periods prior to, at and after the Distribution. We will be party to other arrangements with Jupiter Wellness and its subsidiaries. See "*Certain Relationships and Related Party Transactions — Relationship with Jupiter Wellness*."  |

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| 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. Christopher Marc Melton and Gary Herman each serve as a Director of Jupiter Wellness and SRM. |

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| 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. |
| The Company may engage in material business transactions with Jupiter Wellness. The Company will renounce its rights to certain business opportunities and the Company's amended and restated articles of incorporation will provide that no Overlap Person will be liable to the Company or its stockholders for breach of any fiduciary duty that would otherwise occur by reason of the fact that any such individual directs a corporate opportunity (other than certain limited types of opportunities set forth in our amended and restated articles of incorporation) to Jupiter Wellness instead of the Company, or does not refer or communicate information regarding such corporate opportunities to the Company. These provisions in our amended and restated articles of incorporation will also expressly validate certain contracts, agreements, arrangements and transactions (and amendments, modifications or terminations thereof) between the Company and Jupiter Wellness and, to the fullest extent permitted by law, will provide that the actions of the Overlap Persons in connection therewith are not breaches of fiduciary duties owed to the Company, any of its subsidiaries or their respective stockholders. |

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See "*Certain Relationships and Related Party Transactions" and "Description of Capital Stock"*

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| 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. |

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**TRADEMARKS, TRADE NAMES AND SERVICE MARKS**

We have the license for use of various trademarks, trade names and service marks in our business, including the trademarked name, Sip with Me Characters™, and license agreements with Smurfs and Zoonicorn. For convenience, we may not include the SM,® or™ symbols, but such omission is not meant to indicate that we would not protect our intellectual property rights to the fullest extent allowed by law. Any other trademarks, trade names or service marks referred to in this prospectus are the property of their respective owners.

**INDUSTRY AND MARKET DATA**

This prospectus contains estimates and other statistical data made by independent parties and by us relating to market size and growth and other data about our industry. We obtained the industry and market data in this prospectus from our own research as well as from industry and general publications, surveys and studies conducted by third parties. This data involves a number of assumptions and limitations and contains projections and estimates of the future performance of the industries in which we operate that are subject to a high degree of uncertainty, including those discussed in "Risk Factors." We caution you not to give undue weight to such projections, assumptions and estimates. Further, industry and general publications, studies and surveys generally state that they have been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information. While we believe that these publications, studies and surveys are reliable, we have not independently verified the data contained in them. In addition, while we believe that the results and estimates from our internal research are reliable, such results and estimates have not been verified by any independent source.

**CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS**

This prospectus includes forward-looking statements that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this prospectus, including statements regarding our industry, position, goals, strategy, future operations, future financial position, business strategy and plans, future revenues, estimated costs, prospects, margins, profitability, capital expenditures, liquidity, capital resources, plans and objectives of management, including those made in the sections titled "*Prospectus Summary*," "*Risk Factors*," "*Management's Discussion and Analysis of Financial Condition and Results of Operations*" and "*Business*," are forward-looking statements. The words "anticipate," "believe," "estimate," "likely," "expect," "intend," "may," "plan," "predict," "project," "forecast," "target," "potential," "will," "would," "could," "should," "continue," "contemplate," "might," "objective," "ongoing," "seek" and similar expressions, as they relate to us, are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs, including current expectations and assumptions regarding, as of the date such statements are made, our future operating performance and financial condition, including our separation from Jupiter Wellness, the expected timetable for the separation and the distribution and our future financial and operating performance, strategic and competitive advantages, leadership and future opportunities, as well as the economy and other future events or circumstances. Our expectations and assumptions include, without limitation, internal forecasts and analyses of current and future market conditions and trends, management plans and strategies, operating efficiencies and economic conditions, and risks and uncertainties described in the section titled "*Risk Factors*" and elsewhere in this prospectus. These risks and uncertainties include, without limitation:

● 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;

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● the failure of the Company to satisfy its obligations under the agreements it will enter into in connection with the distribution;

● 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.

In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this prospectus may not occur and actual results could differ materially from those anticipated or implied in the forward-looking statements. We believe the factors identified above are important factors, but not necessarily all of the important factors, that could cause actual results to differ materially from those expressed in any forward-looking statement made by us.

You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements. In addition, neither we nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame, or at all. These forward-looking statements speak only as of the date of this prospectus. Except as required by law, we assume no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future.

See the section titled "*Risk Factors*" for a more complete discussion of the risks and uncertainties mentioned above and for discussion of other risks and uncertainties. All forward-looking statements attributable to us are expressly qualified in their entirety by these cautionary statements as well as others made in this prospectus and hereafter in our other filings with the U.S. Securities and Exchange Commission (the "SEC") and public communications. You should evaluate all forward-looking statements made by us in the context of these risks and uncertainties.

**THE DISTRIBUTION** 

 

*The discussion in this prospectus of the Distribution is subject to, and qualified by reference to, the separation agreement and other definitive documents, forms of which are filed as exhibits to the registration statement that contains this prospectus and are incorporated by reference into this prospectus.* 

**General** 

On December 9, 2022, we entered into the Exchange Agreement with Jupiter Wellness. The Exchange Agreement will be consummated immediately prior to the effective date of this Registration Statement of which this prospectus forms a part. Pursuant to the Exchange Agreement, we will issue to Jupiter Wellness 7,300,000 shares of our Common Stock (representing 81.1% of our outstanding Common Stock) in exchange for 2 ordinary shares of SRM Limited (representing all of the issued and outstanding shares of SRM Limited).

From November 28, 2022 to December 7, 2022, we issued 1,700,000 outstanding shares of our Common Stock to the following management and insiders of SRM: Richard Miller, Chief Executive Officer & Director, 600,000 shares; Brian S. John, Secretary and Chairman, 300,000 shares; Taft Flittner, President, 300,000 shares; Doug McKinnon, 200,000 shares; Markita Russell, 100,000 shares; and Debbie McDaniel-Hand, Vice President of Production Development and Operations, 200,000 shares.

Prior to the effective date of the registration statement of which this prospectus forms a part, we will enter into the separation agreement with Jupiter Wellness that will govern the separation of our business from Jupiter Wellness and various interim arrangements. The separation agreement will be in effect prior to the effective date of the registration statement of which this prospectus forms a part. The separation agreement will provide for, among other things, the transfer from Jupiter Wellness to us of assets and the assumption by us of liabilities comprising our business.

Jupiter Wellness will distribute 2,000,000 of our outstanding shares of Common Stock to Jupiter Wellness stockholders and certain warrant holders of record as of the close of business on____, 2023.

We refer to this distribution of securities as the "*Distribution*."

In the Distribution, based on the number of Jupiter Wellness Common Stock and the July Warrants outstanding as of , 2023, each holder of Jupiter Wellness Common Stock and the July Warrants will receive a distribution of one share of our Common Stock for every seventeen shares of Jupiter Wellness Common Stock or shares of Jupiter Wellness Common Stock underlying the July Warrants held as of the close of business, New York City time, on , 2023, which we refer to as the record date.

**Manner of Effecting the Distribution** 

The general terms and conditions relating to the Distribution are set forth in the separation agreement between us and Jupiter Wellness. Under the separation agreement, the Distribution will be effective upon the effectiveness of this registration statement. For most Jupiter Wellness stockholders who own Jupiter Wellness Common Stock in registered form on the record date and for holders of the July Warrants our transfer and distribution agent will credit their shares of our Common Stock to book entry accounts established to hold these shares. Our transfer and distribution agent will send these stockholders a statement reflecting their ownership of our Common Stock. Book-entry refers to a method of recording stock ownership in our records in which no physical certificates are used. For stockholders who own Jupiter Wellness Common Stock through a broker or other nominee, their shares of our Common Stock will be credited to these stockholders' accounts by the broker or other nominee. As further discussed below, fractional shares will not be distributed. Following the Distribution, stockholders whose shares are held in book entry form may request that their shares of our Common Stock be transferred to a brokerage or other account at any time, as well as delivery of physical stock certificates for their shares, in each case without charge.

JUPITER WELLNESS STOCKHOLDERS WILL NOT BE REQUIRED TO PAY FOR SHARES OF OUR COMMON STOCK RECEIVED 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. NO VOTE OF JUPITER WELLNESS STOCKHOLDERS IS REQUIRED OR SOUGHT IN CONNECTION WITH THE DISTRIBUTION, AND JUPITER WELLNESS STOCKHOLDERS HAVE NO APPRAISAL RIGHTS IN CONNECTION WITH THE DISTRIBUTION.

Fractional shares of our Common Stock will not be issued to Jupiter Wellness stockholders as part of the Distribution or credited to book entry accounts. In lieu of receiving fractional shares, each holder of Jupiter Wellness Common Stock who would otherwise be entitled to receive a fractional share of our Common Stock will receive cash for the fractional interest, which generally will be taxable to such holder. An explanation of the tax consequences of the Distribution can be found below in the subsection captioned "— *Material U.S. Federal Income Tax Consequences of the Distribution*." The transfer and distribution agent will, as soon as practicable after the Distribution date, aggregate fractional shares of our Common Stock into whole shares and sell them in the open market at the prevailing market prices and distribute the aggregate proceeds, net of brokerage fees, ratably to stockholders otherwise entitled to fractional interests in our Common Stock. The amount of such payments will depend on the prices at which the aggregated fractional shares are sold by the transfer and distribution agent in the open market shortly after the Distribution date. The Distribution of SRM Common Stock in respect of the July Warrants is expected to be taxable to both Jupiter Wellness and holders of the July Warrants. See "*The Distribution — Material U.S. Federal Income Tax Consequences of the Distribution*."

In order to be entitled to receive shares of our Common Stock in the Distribution, Jupiter Wellness stockholders and July Warrants must be stockholders of record of Jupiter Wellness Common Stock or the July Warrants at the close of business, New York City time, on the record date, , 2023.

**Reasons for the Distribution** 

The Jupiter Wellness board of directors has determined that the separation of our business from the other business of Jupiter Wellness is in the best interests of Jupiter Wellness and its stockholders. The potential benefits considered by the Jupiter Wellness board of directors in making the determination to consummate the Distribution included the following:

● to provide each of Jupiter Wellness and the Company with increased flexibility to fully pursue and fund its business plan, including capital expenditures, investments and acquisitions that would be more difficult to consider or effectuate in the absence of the Distribution. This increased financial flexibility reflects the belief that investors in a company with the mix of assets that each of Jupiter Wellness and the Company will own following the Distribution will be more receptive to strategic initiatives that Jupiter Wellness and the Company may respectively pursue;

● to create distinct and clear financial profiles and compelling investment cases. Investment in one or the other company may appeal to investors with different goals, interests and expectations. The Distribution will allow investors to make independent investment decisions with respect to Jupiter Wellness and the Company and may result in greater alignment between the interests of each company's stockholder base and the characteristics of its respective business, capital structure and financial results;

● to create independent equity securities and increased strategic opportunities. The Distribution will afford Jupiter Wellness and the Company the ability to offer their independent equity securities to the capital markets and enable each standalone company to use its own industry-focused stock to pursue portfolio enhancing acquisitions or other strategic opportunities that are more closely aligned with each company's strategic goals and expected growth opportunities;

● to facilitate incentive compensation arrangements for employees of each business more directly tied to the performance of the relevant company's business and enhance employee hiring and retention by, among other things, improving the alignment of management and employee incentives with performance and growth objectives of each of Jupiter Wellness and the Company; and

● to increase the aggregate value of the stock of Jupiter Wellness and the Company above the value that the stock of Jupiter Wellness would have had if it had continued to represent an interest in both the businesses of Jupiter Wellness and the Company, so as to: (i) allow each company to use its stock to pursue and achieve strategic objectives, including evaluating and effectuating acquisitions and increasing the long-term attractiveness of equity compensation programs in a significantly more efficient and effective manner with significantly less dilution to existing stockholders; and (ii) allow each company to offer a more focused investment profile to investors.

The Jupiter Wellness board of directors also considered several factors that have a negative effect on Jupiter Wellness as a result of the Distribution. The Jupiter Wellness Common Stock may come under initial selling pressure as certain Jupiter Wellness stockholders sell their shares because they are not interested in holding an investment in the remaining business of Jupiter Wellness. In addition, the Distribution would separate from Jupiter Wellness the business and assets of the Company, which represent significant value. Finally, following the Distribution, Jupiter Wellness and its remaining business may need to absorb certain corporate and administrative costs previously allocated to SRM.

The Jupiter Wellness board of directors considered certain aspects of the Distribution that may be adverse to the Company. The Company's Common Stock may come under initial selling pressure as certain Jupiter Wellness stockholders sell their shares in the Company because they are not interested in holding an investment in the Company's business. As a result of the Distribution, the Company will bear significant incremental costs associated with being a publicly-held company and may need to absorb certain corporate and operational support costs previously allocated to Jupiter Wellness. Refer to the "Unaudited Pro Forma Condensed Combined Consolidated Financial Information" section for further details.

**Results of the Distribution** 

After the Distribution, we will be a stand-alone public company. Immediately after the Distribution, we expect to have approximately holders of record of our Common Stock and approximately shares of Common Stock outstanding, based on the number of stockholders of record and outstanding shares of Jupiter Wellness Common Stock and the July Warrants on . The actual number of shares to be distributed will be determined on the record date.

In connection with the Distribution, we will enter into the separation agreement with Jupiter Wellness, covering such areas as employee matters, tax and other services.

The Distribution will not affect the number of outstanding shares of Jupiter Wellness Common Stock or any rights of Jupiter Wellness stockholders.

**Material U.S. Federal Income Tax Consequences of the Distribution** 

The following is a summary of the material U.S. federal income tax consequences of the Distribution to us, Jupiter Wellness and Jupiter Wellness stockholders. This summary is based on the Code, the regulations promulgated under the Code by the Department of the Treasury, and interpretations of such authorities by the courts and the IRS, all as of the date of this prospectus and all of which are subject to change at any time, possibly with retroactive effect. Unless otherwise noted, this summary is limited to holders of Jupiter Wellness Common Stock that are U.S. holders, as defined below, that hold their shares of Jupiter Wellness Common Stock as capital assets, within the meaning of Section 1221 of the Code. Further, except as otherwise provided herein, this summary does not discuss all tax considerations that may be relevant to holders of Jupiter Wellness Common Stock in light of their particular circumstances, nor does it address the consequences to holders of Jupiter Wellness Common Stock subject to special treatment under the U.S. federal income tax laws, such as tax-exempt entities, partnerships (including arrangements treated as partnerships for U.S. federal income tax purposes), persons who acquired such shares of Jupiter Wellness Common Stock pursuant to the exercise of employee stock options or otherwise as compensation. Each stockholder's individual circumstances may affect the tax consequences of the Distribution. Sichenzia Ross Ference LLP has acted as our special tax counsel, has reviewed this summary and is of the opinion that the discussion contained herein is a fair and accurate summary in all material respects.

For purposes of this summary, a "U.S. holder" is a beneficial owner of Jupiter Wellness Common Stock that is, for U.S. federal income tax purposes:

● an individual who is a citizen or a resident of the United States;

● a corporation, or other entity taxable as a corporation for U.S. federal income tax purposes, created or organized under the laws of the United States or any state or political subdivision thereof;

● an estate, the income of which is subject to United States federal income taxation regardless of its source; or

● a trust, if (i) a court within the United States is able to exercise primary jurisdiction over its administration and one or more U.S. persons have the authority to control all of its substantial decisions, or (ii) it has a valid election in place under applicable U.S. Department of Treasury regulations to be treated as a U.S. person.

A "non-U.S. holder" is a beneficial owner of Jupiter Wellness Common Stock that is not a U.S. holder for U.S. federal income tax purposes.

If a partnership (including any arrangement treated as a partnership for U.S. federal income tax purposes) holds shares of Jupiter Wellness Common Stock, the tax treatment of a partner in the partnership generally will depend upon the status of the partner and the activities of the partnership. A partner of a partnership holding shares of Jupiter Wellness Common Stock should consult its tax advisor regarding the tax consequences of the Distribution.

Jupiter Wellness expects to obtain an opinion from Sichenzia Ross Ference LLP substantially to the effect that, among other things, the distribution by Jupiter Wellness of our Common Stock to holders of Jupiter Wellness Common Stock will qualify as a tax-free distribution under the Code. The opinion will not be binding on the IRS or the courts. Certain transactions related to the Distribution that are not addressed by the opinion could result in the recognition of income or gain by Jupiter Wellness. The opinion will rely on factual representations and reasonable assumptions, which, if incorrect or inaccurate, may jeopardize the ability to rely on such opinion.

On the basis of the opinion Jupiter Wellness expects to receive, and assuming that Jupiter Wellness Common Stock is a capital asset in the hands of a Jupiter Wellness stockholder on the Distribution date:

● Except for any cash received in lieu of a fractional share of our Common Stock, a Jupiter Wellness stockholder will not recognize any income, gain or loss as a result of the receipt of our Common Stock in the Distribution.

● A Jupiter Wellness stockholder's holding period for our Common Stock received (including, for this purpose, any fractional share of our Common Stock for which cash is received) in the Distribution will include the period for which that stockholder's Jupiter Wellness Common Stock was held.

● A Jupiter Wellness stockholder's tax basis for our Common Stock received in the Distribution will be determined by allocating to that Common Stock, on the basis of the relative fair market values of Jupiter Wellness Common Stock and our Common Stock at the time of the Distribution, a portion of the stockholder's tax basis in its Jupiter Wellness Common Stock. A Jupiter Wellness stockholder's tax basis in its Jupiter Wellness Common Stock will be decreased by the portion allocated to our Common Stock.

● The receipt of cash in lieu of a fractional share of our Common Stock generally will be treated as a sale of the fractional share of our Common Stock, and a Jupiter Wellness stockholder will recognize gain or loss equal to the difference between the amount of cash received and the stockholder's tax basis in the fractional share of our Common Stock, as determined above. The gain or loss will be long-term capital gain or loss if the holding period for the fractional share of our Common Stock, as determined above, is more than one year.

● The Distribution will not be a taxable transaction to us or Jupiter Wellness. However, certain transactions related to the Distribution that are not expected to be addressed by the opinion could result in the recognition of income or gain by Jupiter Wellness.

If the Distribution does not qualify for tax-free treatment for U.S. federal income tax purposes, then, in general, Jupiter Wellness would recognize taxable gain in an amount equal to the excess of the fair market value of our Common Stock distributed in the Distribution over Jupiter Wellness' tax basis therein (i.e., as if it had sold such Common Stock in a taxable sale for its fair market value). In addition, the receipt by Jupiter Wellness stockholders of our Common Stock would be a taxable distribution, and each U.S. holder that receives our Common Stock in the Distribution would be treated as if the U.S. holder had received a distribution equal to the fair market value of our Common Stock that was distributed to it, which generally would be treated first as a taxable dividend to the extent of such holder's pro rata share of the Jupiter Wellness earnings and profits, then as a non-taxable return of capital to the extent of the holder's tax basis in its Jupiter Wellness Common Stock, and thereafter as capital gain with respect to any remaining value.

Even if the Distribution otherwise qualifies for tax-free treatment under the Code, the Distribution may be taxable to Jupiter Wellness and would result in a significant U.S. federal income tax liability to Jupiter Wellness (but not to the Jupiter Wellness stockholders) under Section 355(e) of the Code if the Distribution were deemed to be part of a plan (or a series of related transactions) pursuant to which one or more persons acquire, directly or indirectly, stock representing a 50% or greater interest, by vote or value, in Jupiter Wellness or us. For this purpose, any acquisitions of Jupiter Wellness stock or our stock within the period beginning two years before the Distribution and ending two years after the Distribution are presumed to be part of such a plan, although Jupiter Wellness or we may be able to rebut that presumption. The process for determining whether a prohibited acquisition has occurred under the rules described in this paragraph is complex, inherently factual and subject to interpretation of the facts and circumstances of a particular case. Jupiter Wellness or we might inadvertently cause or permit a prohibited change in the ownership of Jupiter Wellness or us to occur, thereby triggering tax to Jupiter Wellness, which could have a material adverse effect. If such an acquisition of our stock or Jupiter Wellness' stock triggers the application of Section 355(e) of the Code, Jupiter Wellness would recognize taxable gain equal to the excess of the fair market value of our Common Stock distributed in the Distribution over Jupiter Wellness' tax basis therein, but the Distribution would be tax-free to each Jupiter Wellness stockholder. Please see "*Certain Relationships and Related Party Transactions — Relationship Between Jupiter Wellness and Us*" for a more detailed discussion of the separation agreement between Jupiter Wellness and us.

Payments of cash in lieu of a fractional share of our Common Stock made in connection with the Distribution may, under certain circumstances, be subject to backup withholding, unless a holder provides proof of an applicable exception or a correct taxpayer identification number, and otherwise complies with the applicable requirements of the backup withholding rules. Any amounts withheld under the backup withholding rules are not additional tax and may be refunded or credited against the holder's U.S. federal income tax liability, provided that the holder furnishes the required information to the IRS.

U.S. Treasury regulations require certain Jupiter Wellness stockholders with significant ownership in Jupiter Wellness that receive shares of our stock in the Distribution to attach to their U.S. federal income tax return for the year in which such stock is received a detailed statement setting forth such data as may be appropriate to show that the Distribution is tax-free under the Code. Upon request, Jupiter Wellness will provide its stockholders who receive our Common Stock pursuant to the Distribution with the information necessary to comply with such requirement.

A non-U.S. holder generally will be subject to U.S. federal income tax with respect to gain realized on a sale or other taxable disposition of our Common Stock if we are or have been a "United States real property holding corporation" (a "USRPHC") within the meaning of Code Section 897(c)(2) at any time within the shorter of the five-year period preceding such disposition or the holder's holding period in our Common Stock. In general, we would be a USRPHC if "United States real property interests" (as defined in the Code and Treasury Regulations) constituted (by fair market value) at least half of our assets. We believe that we are not, and do not anticipate becoming, a USRPHC. However, because this belief is based on factual evaluations that are dependent upon a number of factors, some of which are beyond our control (including, for example, fluctuations in the value of our assets), there can be no assurance that we are not or will not become a USRPHC. Even if we were to be treated as a USRPHC, gain realized by a non-U.S. holder on a disposition of our Common Stock will not be subject to U.S. federal income tax so long as (i) the non-U.S. holder owned, directly, indirectly, or constructively, no more than five percent of our Common Stock at all times within the shorter of (x) the five-year period preceding the disposition or (y) the holder's holding period and (ii) our Common Stock is "regularly traded" (as defined in the applicable Treasury Regulations) on an established securities market. There can be no assurance that our Common Stock will qualify as regularly traded for such purposes. The opinion and the above discussed consequences do not apply to the distribution of SRM Common Stock with respect to the July Warrants; holders of July Warrants should consult with their own tax advisors with respect to the consequences of the distribution.

EACH JUPITER WELLNESS STOCKHOLDER AND JULY WARRANT HOLDER SHOULD CONSULT ITS TAX ADVISOR ABOUT THE PARTICULAR CONSEQUENCES OF THE DISTRIBUTION TO SUCH STOCKHOLDER, INCLUDING THE APPLICATION OF STATE, LOCAL AND FOREIGN TAX LAWS AND POSSIBLE CHANGES IN TAX LAW THAT MAY AFFECT THE TAX CONSEQUENCES DESCRIBED ABOVE.

**Listing and Trading of Our Common Stock** 

Currently, no public market exists for our Common Stock. We have applied to list our Common Stock for trading on Nasdaq under the symbol "[●]." No assurance can be given that our application will be approved.

**Reason for Furnishing this Prospectus**

This prospectus is being furnished by the Company and Jupiter Wellness for the sale of shares in the offering and to provide information to stockholders of Jupiter Wellness who will receive shares of our Common Stock in the Distribution. We and Jupiter Wellness will not update the information in this prospectus except in the normal course of our and Jupiter Wellness' respective public disclosure obligations and practices.

**RISK FACTORS**

*Investing in our Common Stock involves substantial risk. You should consider carefully the risks and uncertainties described below, together with all of the other information in this prospectus, including our financial statements and the related notes included elsewhere in this prospectus, before deciding whether to invest in shares of our Common Stock. We describe below what we believe are currently the material risks and uncertainties we face, but they are not the only risks and uncertainties we face. Additional risks and uncertainties that we are unaware of, or that we currently believe are not material, may also become important factors that adversely affect our business. If any of the following risks actually occur, our business, financial condition, results of operations and future prospects could be materially and adversely affected. In that event, the market price of our Common Stock could decline and you could lose part or all of your investment.*

 

**Risks Related to Our Separation from Jupiter Wellness**

***The separation may not be successful.***

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Upon completion of this offering, we will be a stand-alone public company, although we will continue to be controlled by Jupiter Wellness. We cannot guarantee that we will be successful in listing our Common Stock on Nasdaq. However, the consummation of this offering and the distribution are contingent on final approval by Nasdaq. We will not consummate this offering or the distribution unless our Common Stock is so listed.

The process of becoming a stand-alone public company may distract our management from focusing on our business and strategic priorities. Further, although we expect to have direct access to the debt and equity capital markets following this offering, we may not be able to issue debt or equity on terms acceptable to us or at all. Moreover, even with equity compensation tied to our business, we may not be able to attract and retain employees as desired.

We also may not fully realize the intended benefits of being a stand-alone public company if any of the risks identified in this "*Risk Factors*" section, or other events, were to occur. These intended benefits include improving the strategic and operational flexibility of both companies, increasing the focus of the management teams on their respective business operations, allowing each company to adopt the capital structure, investment policy and dividend policy best suited to its financial profile and business needs, and providing each company with its own equity currency to facilitate acquisitions and to better incentivize management. See the section titled "*Certain Relationships and Related Party Transactions—Relationship with Jupiter Wellness*." If we do not realize these intended benefits for any reason, our business may be negatively affected. In addition, the separation could materially adversely affect our business, results of operations and financial condition.

***As long as Jupiter Wellness controls us, your ability to influence matters requiring stockholder approval will be limited.***

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After this offering, Jupiter Wellness will own shares of our Common Stock, representing approximately % of the outstanding shares of our Common Stock (or % if the underwriters exercise their option to purchase additional shares in full). For so long as Jupiter Wellness beneficially owns such a significant portion of our outstanding Common Stock Jupiter Wellness will have substantial ability to control the ability to pass matters requiring shareholder approval and Mr. John will continue to serve as Chairman of the board of directors and as Secretary of SRM, in addition to his role as Chief Executive Officer and Director of Jupiter Wellness. See the section titled "*Directors*."

***Jupiter Wellness's ability to control our board of directors may make it difficult for us to recruit high-quality independent directors.***

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So long as Jupiter Wellness beneficially owns such a significant percentage of shares of our outstanding Common Stock Jupiter Wellness can effectively control and direct our board of directors and Mr. John will continue to serve as Chairman on the board of directors and as Secretary of SRM, in addition to his role as Chief Executive Officer and Director of Jupiter Wellness. Further, the interests of Jupiter Wellness and our other stockholders may diverge. Under these circumstances, persons who might otherwise accept our invitation to join our board of directors may decline.

***Jupiter Wellness's interests may conflict with our interests and the interests of our other stockholders. Conflicts of interest between us and Jupiter Wellness could be resolved in a manner unfavorable to us and our other stockholders.***

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Various conflicts of interest between us and Jupiter Wellness could arise. Brian John, who currently serves as CEO and Director of Jupiter Wellness also serves as Secretary and Chairman of the board of directors of SRM. Douglas McKinnon, who serves as CFO of Jupiter Wellness also serves as CFO of SRM. In addition, Christopher Marc Melton and Gary Herman each serve as a Director of Jupiter Wellness and SRM. Ownership interests of Mr. John, Mr. McKinnon, and Jupiter Wellness in our capital stock and ownership interests of our directors and officers in Jupiter Wellness capital stock, or service by an individual as either a director and/or officer of both companies, could create or appear to create potential conflicts of interest when such individuals are faced with decisions relating to us. These decisions could include:

● 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;

● the intercompany agreements and services between us and Jupiter Wellness, including the separation agreement relating to our separation from Jupiter Wellness;

● the payment of dividends on our Common Stock; and

● determinations with respect to our tax returns.

Potential conflicts of interest could also arise if we decide to enter into new commercial arrangements with Jupiter Wellness in the future or in connection with Jupiter Wellness's desire to enter into new commercial arrangements with third parties. Additionally, Jupiter Wellness may be constrained by the terms of agreements relating to its indebtedness from taking actions, or permitting us to take actions that may be in our best interest.

Our amended and restated articles of incorporation will provide that, except as otherwise agreed to in writing by Jupiter Wellness and us, Jupiter Wellness will have no duty to refrain from engaging in the same or similar business activities or lines of business, doing business with any of our customers or employing or otherwise engaging or soliciting for employment any of our directors, officers or employees.

Our amended and restated articles of incorporation will also provide that in the event that a director or officer of the Company who is also a director or officer of Jupiter Wellness acquires knowledge of a potential corporate opportunity that may be a corporate opportunity for both the Company and Jupiter Wellness (excluding any corporate opportunity that was presented or became known to such director or officer solely in his or her capacity as a director or officer of the Company, as reasonably determined by such director or officer, unless the Company notifies such person that the Company does not intend to pursue such opportunity), such director or officer may present such opportunity to the Company or Jupiter Wellness or both, as such director or officer determines in his or her sole discretion, and that by doing so such person will have satisfied his or her duties to the Company and its stockholders. Our amended and restated articles of incorporation will provide that we renounce any interest in any such opportunity presented to Jupiter Wellness. These provisions create the possibility that a corporate opportunity of the Company may be used for the benefit of Jupiter Wellness. However, the corporate opportunity provisions in our amended and restated articles of incorporation will cease to apply and will have no further force and effect from and after the date that both (1) Jupiter Wellness ceases to own shares of our Common Stock representing at least 50% of the total voting power of our Common Stock and (2) no person who is a director or officer of the Company is also a director or officer of Jupiter Wellness.

Furthermore, disputes may arise between us and Jupiter Wellness relating to our past and ongoing relationships, and these potential conflicts of interest may make it more difficult for us to favorably resolve such disputes, including those related to:

● tax, employee benefit, indemnification 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.

We will have a general policy that all material transactions with a related party, as well as all material transactions in which there is an actual, or in some cases, perceived, conflict of interest, will be subject to prior review and approval by our Audit Committee and its independent members, who will determine whether such transactions or proposals are fair and reasonable to SRM and its stockholders. In general, potential related-party transactions will be identified by our management and discussed with our Audit Committee at its meetings.

However, we may not be able to resolve any potential conflicts, and even if we do, the resolution may be less favorable to us than if we were dealing with an unaffiliated third party. While we are controlled by Jupiter Wellness, we may not have the leverage to negotiate amendments to our various agreements with Jupiter Wellness (if any are required) on terms as favorable to us as those we would negotiate with an unaffiliated third party.

***The terms of the separation agreement that we intend to enter into with Jupiter Wellness*** ***in connection with the separation may limit our ability to take certain actions, which may prevent us from pursuing opportunities to raise capital, acquire other businesses or provide equity incentives to our employees, which could impair our ability to grow.***

The terms of the separation agreement that we intend to enter into with Jupiter Wellness in connection with the separation, may limit our ability to take certain actions, which could impair our ability to grow. The separation agreement will provide that, as long as Jupiter Wellness beneficially owns at least 50% of the total voting power of our outstanding capital stock entitled to vote in the election of our board of directors, we will not (without Jupiter Wellness's prior written consent) take certain actions, such as incurring additional indebtedness and acquiring businesses or assets or disposing of assets in excess of certain amounts. In addition, under current tax law, Jupiter Wellness must retain beneficial ownership of at least 80% of our combined voting power and 80% of each class of nonvoting capital stock, if any is outstanding, until immediately prior to the distribution of our stock then held by Jupiter Wellness to its stockholders in order for such distribution to qualify as a transaction that is generally tax-free for U.S. federal income tax purposes. This may result in Jupiter Wellness not supporting transactions that we wish to pursue that involve issuing shares of our capital stock, including for capital-raising purposes, as consideration for an acquisition or as equity incentives to our employees. To preserve the tax-free treatment of the separation and distribution, the separation agreement will include certain covenants and restrictions to ensure that, until immediately prior to the distribution, Jupiter Wellness will retain beneficial ownership of at least 80% of our combined voting power and 80% of each class of nonvoting capital stock, if any is outstanding. See "—*We may not be able to engage in desirable strategic or capital-raising transactions following the distribution*." Our inability to pursue such transactions could materially adversely affect our business, results of operations and financial condition.

***If the distribution, together with certain related transactions, does not qualify as a transaction that is generally tax-free for U.S. federal income tax purposes, Jupiter Wellness, SRM and SRM stockholders could be subject to significant tax liabilities, and, in certain circumstances, we could be required to indemnify Jupiter Wellness for material taxes and other related amounts pursuant to indemnification obligations.***

Jupiter Wellness expects to obtain an opinion of counsel regarding qualification of the distribution, together with certain related transactions, as a transaction that is generally tax-free for U.S. federal income tax purposes under Sections 355 and 368(a)(1)(D) of the Code. The opinion of counsel would be based upon and rely on, among other things, certain facts and assumptions, as well as certain representations, statements and undertakings of Jupiter Wellness and us, including those relating to the past and future conduct of Jupiter Wellness and us. If any of these representations, statements or undertakings are, or become, incomplete or inaccurate, or if we or Jupiter Wellness breach any of the respective covenants in any of the separation-related agreements, the opinion of counsel could be invalid and the conclusions reached therein could be jeopardized.

Notwithstanding any opinion of counsel, the Internal Revenue Service (the "IRS") could determine that the distribution, together with certain related transactions, should be treated as a taxable transaction if it were to determine that any of the facts, assumptions, representations, statements or undertakings upon which any opinion of counsel was based were false or had been violated, or if it were to disagree with the conclusions in any opinion of counsel. Any opinion of counsel would not be binding on the IRS or the courts, and we cannot assure that the IRS or a court would not assert a contrary position. Jupiter Wellness has not requested, and does not intend to request, a ruling from the IRS with respect to the treatment of the distribution or certain related transactions for U.S. federal income tax purposes.

If the distribution, together with certain related transactions, were to fail to qualify as a transaction that is generally tax-free for U.S. federal income tax purposes under Sections 355 and 368(a)(1)(D) of the Code, in general, Jupiter Wellness would recognize taxable gain as if it had sold our Common Stock in a taxable sale for its fair market value, and Jupiter Wellness stockholders who receive shares of our Common Stock in the distribution would be subject to tax as if they had received a taxable distribution equal to the fair market value of such shares.

We intend to agree in the separation agreement to indemnify Jupiter Wellness for any taxes (and any related costs and other damages) resulting from the separation and distribution, and certain other related transactions, to the extent such amounts were to result from (i) an acquisition after the distribution of all or a portion of our equity securities, whether by merger or otherwise (and regardless of whether we participated in or otherwise facilitated the acquisition), (ii) other actions or failures to act by us or (iii) any of the representations or undertakings contained in any of the separation-related agreements or in the documents relating to the opinion of counsel being incorrect or violated. Any such indemnity obligations could be material.

 **

***We may not be able to engage in desirable strategic or capital-raising transactions following the distribution.***

 **

Under current law, a distribution that would otherwise qualify as a tax-free transaction, for U.S. federal income tax purposes, under Section 355 of the Code can be rendered taxable to the parent corporation and its stockholders as a result of certain post-distribution acquisitions of shares or assets of the distributed corporation. For example, such a distribution could result in taxable gain to the parent corporation under Section 355(e) of the Code if the distribution were later deemed to be part of a plan (or series of related transactions) pursuant to which one or more persons acquired, directly or indirectly, shares representing a 50% or greater interest (by vote or value) in the distributed corporation.

To preserve the tax-free treatment of the separation and distribution, and in addition to our expected indemnity obligation described above, we intend to agree in the separation agreement to restrictions that address compliance with Section 355 of the Code (including Section 355(e) of the Code). These restrictions could limit our ability to pursue certain strategic transactions, equity issuances or repurchases or other transactions that we may believe to be in the best interests of our stockholders or that might increase the value of our business.

***We have no operating history as a stand-alone public company, and our historical and pro forma financial information is not necessarily representative of the results we would have achieved as a stand-alone public company and may not be a reliable indicator of our future results.***

The historical financial information we have included in this prospectus does not reflect, and the pro forma financial information included in this prospectus may not reflect, what our financial condition, results of operations or cash flows would have been had we been a stand-alone entity during the historical periods presented, or what our financial condition, results of operations or cash flows will be in the future as an independent entity.

The pro forma condensed combined financial information included in this prospectus includes adjustments based upon available information we believe to be reasonable. However, the assumptions may change and actual results may differ. In addition, we have not made pro forma adjustments to reflect many significant changes that will occur in our cost structure, funding and operations as a result of our transition to becoming a public company, including changes in our employee base, potential increased costs associated with reduced economies of scale and increased costs associated with being a publicly traded, stand-alone company. For additional information about the basis of presentation of our pro forma financial information and historical financial information included in this prospectus, see the sections titled "*Selected Combined Financial Data*" and "*Unaudited Pro Forma Condensed Combined Financial Statements*."

***If Jupiter Wellness experiences a change in control, our current plans and strategies could be subject to change.***

As long as Jupiter Wellness controls us, it will have significant influence over our plans and strategies, including strategies relating to marketing and growth. In the event Jupiter Wellness experiences a change in control, a new Jupiter Wellness owner may attempt to cause us to revise or change our plans and strategies, as well as the agreements between Jupiter Wellness and us, described in this prospectus. A new owner may also have different plans with respect to the contemplated distribution of our Common Stock to Jupiter Wellness stockholders, including not effecting such a distribution.

***The assets and resources that we acquire from Jupiter Wellness in the separation may not be sufficient for us to operate as a stand-alone company, and we may experience difficulty in separating our assets and resources from Jupiter Wellness.***

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Because we have not operated as an independent company in the past, we will need to acquire assets in addition to those contributed by Jupiter Wellness and its subsidiaries to us and our subsidiaries in connection with our separation from Jupiter Wellness. We may also face difficulty in separating our assets from Jupiter Wellness's assets and integrating newly acquired assets into our business. Our business, financial condition and results of operations could be harmed if we fail to acquire assets that prove to be important to our operations or if we incur unexpected costs in separating our assets from Jupiter Wellness's assets or integrating newly acquired assets.

***The services that Jupiter Wellness provides to us may not be sufficient to meet our needs, which may result in increased costs and otherwise adversely affect our business.***

Pursuant to the separation agreement, we expect Jupiter Wellness to continue to provide us with corporate and shared services for a transitional period related to corporate functions, such as executive oversight, risk management, information technology, accounting, audit, legal, investor relations, tax, treasury, shared facilities, engineering, operations, customer support, human resources and employee benefits, sales and sales operations and other services in exchange for the fees specified in the separation agreement between us and Jupiter Wellness. Jupiter Wellness will not be obligated to provide these services in a manner that differs from the nature of the services provided to the SRM business during the 12-month period prior to the separation, and thus we may not be able to modify these services in a manner desirable to us as a stand-alone public company. Further, if we no longer receive these services from Jupiter Wellness due to the termination of the separation agreement or otherwise, we may not be able to perform these services ourselves and/or find appropriate third party arrangements at a reasonable cost (and any such costs may be higher than those charged by Jupiter Wellness). See the section titled "*Certain Relationships and Related Party Transactions—Relationship with Jupiter Wellness*."

***Our ability to operate our business effectively may suffer if we are unable to cost-effectively establish our own administrative and other support functions in order to operate as a stand-alone company after the expiration of our shared services and other intercompany agreements with Jupiter Wellness.***

As an operating segment of Jupiter Wellness, we relied on administrative and other resources of Jupiter Wellness, including information technology, accounting, finance, human resources and legal services, to operate our business. In connection with this offering, we will enter into various service agreements to retain the ability for specified periods to use these Jupiter Wellness resources. See the section titled "*Certain Relationships and Related Party Transactions*." These services may not be provided at the same level as when we were a business segment within Jupiter Wellness, and we may not be able to obtain the same benefits that we received prior to this offering. These services may not be sufficient to meet our needs, and after our agreements with Jupiter Wellness expire (which will generally occur within 18 months following the completion of this offering), we may not be able to replace these services at all or obtain these services at prices and on terms as favorable as we currently have with Jupiter Wellness. We will need to create our own administrative and other support systems or contract with third parties to replace Jupiter Wellness's systems. In addition, we have received informal support from Jupiter Wellness, which may not be addressed in the separation agreement we will enter into with Jupiter Wellness, and the level of this informal support may diminish as we become a more independent company. Any failure or significant downtime in our own administrative systems or in Jupiter Wellness's administrative systems during the transitional period could result in unexpected costs, impact our results and/or prevent us from paying our suppliers or employees and performing other administrative services on a timely basis.

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***After this offering, we will be a smaller company relative to Jupiter Wellness, which could result in increased costs in our supply chain and in general because of a decrease in our purchasing power. We may also experience decreased revenue due to difficulty maintaining existing customer relationships and obtaining new customers.***

Prior to this offering, we were able to take advantage of Jupiter Wellness's size and purchasing power in procuring goods, technology and services, including employee benefit support and audit and other professional services. In addition, as a segment of Jupiter Wellness, we were able to leverage Jupiter Wellness's size and purchasing power to bargain with suppliers of our components and our ODMs. We are a smaller company than Jupiter Wellness, and we cannot assure you that we will have access to financial and other resources comparable to those available to us prior to this offering. As a stand-alone company, we may be unable to obtain office space, goods, technology and services in general, as well as components and services that are part of our supply chain, at prices or on terms as favorable as those available to us prior to this offering, which could increase our costs and reduce our profitability. Our future success depends on our ability to maintain our current relationships with existing customers, and we may have difficulty attracting new customers.

***The insurance that we maintain may not fully cover all potential exposures.***

We maintain liability insurance but such insurance may not cover all risks associated with the hazards of our business and is subject to limitations, including deductibles and maximum liabilities covered. We are potentially at risk if one or more of our insurance carriers fail. Additionally, severe disruptions in the domestic and global financial markets could adversely impact the ratings and survival of some insurers. In the future, we may not be able to obtain coverage at current levels, and our premiums may increase significantly on coverage that we maintain.

***Jupiter Wellness has agreed to indemnify us for certain liabilities. However, we cannot assure that the indemnity will be sufficient to insure us against the full amount of such liabilities, or that Jupiter Wellness's ability to satisfy its indemnification obligation will not be impaired in the future.***

Pursuant to the separation agreement and certain other agreements with Jupiter Wellness, Jupiter Wellness has agreed to indemnify us for certain liabilities. The separation agreement provides for cross-indemnities principally designed to place financial responsibility for the obligations and liabilities of our business with us and financial responsibility for the obligations and liabilities of Jupiter Wellness's business with Jupiter Wellness. See the section titled "*Certain Relationships and Related Party Transactions—Separation Agreement—Indemnification*." We anticipate that, under the separation agreement, each party, in its capacity as a licensee, will indemnify the other party, in its capacity as a licensor, and its directors, officers, agents, successors and subsidiaries against any losses suffered by such indemnified party as a result of the indemnifying party's practice of the intellectual property licensed to such indemnifying party. See the section titled "*Certain Relationships and Related Party Transactions—Separation Agreement*." We also anticipate that, under the separation agreement, each party will be liable for, and indemnify the other party and its subsidiaries from and against any liability for, taxes that are allocated to the indemnifying party. In addition, we intend to agree in the separation agreement that each party will generally be responsible for any taxes and related amounts imposed on us or Jupiter Wellness as a result of the failure of the distribution, together with certain related transactions, to qualify as a transaction that is generally tax-free, for U.S. federal income tax purposes, under Sections 355 and 368(a)(1)(D) and certain other relevant provisions of the Code, to the extent that the failure to so qualify is attributable to actions, events or transactions relating to such party's respective stock, assets or business, or a breach of the relevant representations or covenants made by that party in the separation agreement. See the section titled "*Certain Relationships and Related Party Transactions—Separation Agreement*." The separation agreement will generally provide that the applicable service recipient indemnifies the applicable service provider for liabilities that such service provider incurs arising from the provision of services other than liabilities arising from such service provider's gross negligence, bad faith or willful misconduct or material breach of the separation agreement, and that the applicable service provider indemnifies the applicable service recipient for liabilities that such service recipient incurs arising from such service provider's gross negligence, bad faith or willful misconduct or material breach of the separation agreement. See the section titled "*Certain Relationships and Related Party Transactions—Separation agreement*."

***Certain contracts used in our business will need to be replaced, or assigned from Jupiter Wellness or its affiliates to SRM in connection with the separation, which may require the consent of the counterparty to such an assignment, and failure to obtain such replacement contracts or consents could increase SRM's expenses or otherwise adversely affect our results of operations.***

Our separation from Jupiter Wellness requires us to replace shared contracts and, with respect to certain contracts that are to be assigned from Jupiter Wellness or its affiliates to us or our affiliates, to obtain consents and assignments from third parties. It is possible that, in connection with the replacement or consent process, some parties may seek more favorable contractual terms from SRM. If we are unable to obtain such replacement contracts or consents, as applicable, we may be unable to obtain some of the benefits, assets and contractual commitments that are intended to be allocated to SRM as part of the separation. If SRM is unable to obtain such replacement contracts or consents, the loss of these contracts could increase SRM's expenses or otherwise materially adversely affect our business, results of operations and financial condition.

***Some of our directors and executive officers own Jupiter Wellness Common Stock, restricted shares of 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.***

Some of our directors and executive officers own Jupiter Wellness Common Stock, restricted shares of Jupiter Wellness stock or options to purchase Jupiter Wellness Common Stock.

Ownership of Jupiter Wellness Common Stock, restricted shares of Jupiter Wellness Common Stock and options to purchase Jupiter Wellness Common Stock by our directors and executive officers after this offering and the presence of executive officers or directors of Jupiter Wellness on our board of directors could create, or appear to create, conflicts of interest with respect to matters involving both us and Jupiter Wellness that could have different implications for Jupiter Wellness than they do for us. For example, potential conflicts of interest could arise in connection with the resolution of any dispute between Jupiter Wellness and us regarding terms of the separation agreement governing the separation and the relationship between Jupiter Wellness and us thereafter. Potential conflicts of interest could also arise if we enter into commercial arrangements with Jupiter Wellness in the future. As a result of these actual or apparent conflicts of interest, we may be precluded from pursuing certain growth initiatives.

***We may have received better terms from unaffiliated third parties than the terms we will receive in the agreements that we intend to enter into with Jupiter Wellness.***

The agreements that we intend to enter into with Jupiter Wellness in connection with the separation, including the separation agreement with respect to Jupiter Wellness's continuing ownership of our Common Stock, were prepared in the context of the separation while we were still a wholly owned subsidiary of Jupiter Wellness. See the section titled "*Certain Relationships and Related Party Transactions—Relationship with Jupiter Wellness*." Accordingly, during the period in which the terms of those agreements were prepared, we did not have an independent board of directors or a management team that was independent of Jupiter Wellness. As a result, the terms of those agreements may not reflect terms that would have resulted from arm's-length negotiations between unaffiliated third parties.

**Risks Related to Our Business** 

***We expect our results of operations to fluctuate on a quarterly and annual basis, which could cause our stock price to fluctuate or decline.***

Our results of operations are difficult to predict and may fluctuate substantially from quarter-to-quarter or year-to-year for a variety of reasons, many of which are beyond our control. If our actual results were to fall below our estimates or the expectations of public market analysts or investors, our quarterly and annual results would be negatively impacted and the price of our stock could decline. Other factors that could affect our quarterly and annual operating results include, but are not limited to:

● 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.

As a result, period-to-period comparisons of our results of operations may not be meaningful, and you should not rely on them as an indication of our future performance.

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***The occurrence of the COVID- 19 pandemic may negatively affect our operations depending on the severity and longevity of the pandemic.***

On March 11, 2020, the World Health Organization declared the outbreak of a respiratory disease caused by a new novel coronavirus ("COVID-19") as a pandemic. As of the date of this prospectus, the COVID-19 outbreak created significant impacts, including impairments, to our operations and financial statements because of theme park closures. However, the long-term impact of the COVID-19 outbreak on our results of operations, financial position and cash flows will depend on future developments, including the duration and spread of the outbreak and related advisories and restrictions. These developments and the impact of COVID-19 on the financial markets and the overall economy are highly uncertain and cannot be predicted. If the financial markets and/or the overall economy are impacted for an extended period, our results of operations, financial position and cash flows may be materially adversely affected. We are not able to estimate the duration of the pandemic and potential impact on our business if disruptions or delays in business developments and shipments of product occur. In addition, a severe prolonged economic downturn could result in a variety of risks to our business, including a decreased ability to raise capital when and if needed on acceptable terms, if at all.

As of the date of this prospectus, the Company's business segments, products, lines of service, projects, and operations have not been materially impacted by the pandemic-related lockdowns in China. The impact of consumer demand declines in China has not had an effect on the Company as the majority of the Company's sales are conducted in the United States. The Company experienced a brief shutdown of one of its third-party manufacturing facilities in Shanghai that produce a limited number of our products from March 19, 2022 to April 12, 2022 and for two weeks in December 2022. The products produced in this Shanghai manufacturing facility are currently immaterial to our business. Nonetheless, there are significant risks and uncertainties as to our ability to continue manufacturing our products in China. To mitigate these risks, we stay abreast of developing sanctions, increase supply chain due diligence, and evaluate supply chains for other sources.

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***Our use of third-party manufacturers to produce our products presents risks to our business.***

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We use third-party manufacturers to manufacture all of our products, and have historically concentrated production with a small number of manufacturers and factories. As a result, the loss or unavailability of one of our manufacturers or one of the factories in which our products are produced, even on a temporary basis, could have a negative impact on our business, financial condition and results of operations. This risk is exacerbated by the fact that we do not have long-term contracts with our manufacturers. While we believe our external sources of manufacturing could be shifted, if necessary, to alternative sources of supply, we would require a significant period of time to make such a shift. We may also be required to seek out additional manufacturers in response to increased demand for our products, as our current manufacturers may not have the capacity to increase production. If we were prevented from or delayed in obtaining a material portion of the products produced by our manufacturers, or if we were required to shift manufacturers (assuming we would be able to do so), our sales and profitability could be significantly reduced.

In addition, while we require that our products supplied by third-party manufacturers be produced in compliance with all applicable laws and regulations, and we have the right to monitor compliance by our third-party manufacturers with our manufacturing requirements and to oversee the quality control process at our manufacturers' factories, there is always a risk that one or more of our third-party manufacturers will not comply with our requirements, and that we will not immediately discover such non-compliance. Any failure of our third-party manufacturers to comply with such requirements in manufacturing products for us could result in damage to our reputation, harm our brand image and sales of our products and potentially create liability for us.

Monitoring compliance by independent manufacturers is complicated by the fact that expectations of ethical business practices continually evolve, may be substantially more demanding than applicable legal requirements and are driven in part by legal developments and by diverse groups active in publicizing and organizing public responses to perceived ethical shortcomings. Accordingly, we cannot predict how such expectations might develop in the future and cannot be certain that our manufacturing requirements, even if complied with, would satisfy all parties who are active in monitoring and publicizing perceived shortcomings in labor and other business practices worldwide.

Additionally, the third-party manufacturers that produce most of our products are located in China. As a result, we are subject to various risks resulting from our international operations.

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***High levels of competition and low barriers to entry make it difficult to achieve, maintain, or build upon the success of SRM's brands, products, and product lines.***

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SRM faces competitors who are also constantly monitoring and attempting to anticipate consumer tastes, seeking ideas which will appeal to consumers, and introducing new products that compete with SRM's products. In addition, competition for access to entertainment properties has and may continue to lessen SRM's ability to secure, maintain, and renew popular licenses to entertainment products developed by other parties and licensed to SRM, or require SRM to pay licensors higher royalties and higher minimum guaranteed payments to obtain or retain these licenses. As a licensee of entertainment properties, SRM has no guarantee that a particular property or brand will translate into a successful toy, game, or other product. In addition, the barriers to entry for new participants in the toy products industry and entertainment industry are low. In a very short period of time, new market participants with a popular product idea or entertainment property can become a significant source of competition for SRM and its products. Reduced demand for SRM's brands, products, and product lines as a result of these factors may adversely affect SRM's business, financial condition, and results of operations. Some of our competitors may have greater resources than the Company. In order to compete successfully, SRM may have to lower prices and increase marketing expenses which could result in reduced margins.

***SRM is not always able to successfully identify and/or satisfy consumer preferences, which could cause its business, financial condition, and results of operations to be adversely affected.***

SRM's business and operating results depend largely upon the appeal of its products, driven by both innovation and marketing. Consumer preferences are continuously changing. SRM is not always able to identify trends in consumer preferences or identify and satisfy consumer preferences in a timely manner. Significant, sudden shifts in demand are caused by popular toys which steer trends, which are often unpredictable. SRM offers a diverse range of products for all ages and families that includes, among others, toys for toddlers and preschoolers, toys for school-aged children, toys for all ages, and media-driven products. SRM competes domestically and internationally with a wide range of large and small manufacturers, marketers, and sellers of toys, and consumer goods, as well as retailers, which means that SRM's market position is always at risk. SRM's ability to maintain its current product sales and increase its product sales or establish product sales with new, innovative toys, depends on SRM's ability to satisfy play preferences, enhance existing products, develop and introduce new products, and achieve market acceptance of these products. These challenges are intensifying due to trends towards shorter life cycles for individual toy products, the phenomenon of children outgrowing traditional toys at younger ages, an increasing use of more sophisticated technology in toys, and an evolving path to purchase.

***General economic conditions may have an adverse impact on our business, financial condition or results of operations.***

Our results can be impacted by a number of macroeconomic factors, including but not limited to consumer confidence and spending levels, tax rates, unemployment, consumer credit availability, raw materials costs, pandemics (such as the ongoing COVID-19 pandemic) and natural disasters, fuel and energy costs (including oil prices), and credit market conditions. A general economic slowdown or recession resulting in a decrease in discretionary spending could adversely affect the frequency with which guests choose to visit our parks and the amount that our guests spend when they visit.

Additionally, difficult economic conditions throughout the world, including global supply chain issues, could impact our ability to obtain supplies, services and credit as well as the ability of third parties to meet their obligations to us, including, for example, manufacturers' ability to supply rides, payment of claims by our insurance carriers, funding of our lines of credit, or payment by our international agreement partner. Changes in exchange rates for foreign currencies could increase our labor and supply costs or reduce the U.S. dollar value of revenue we earn in other markets, including, but not limited to, Beijing, Japan, and Europe.

In addition, availability of our products from third-party manufacturers and our ability to distribute our products into non-U.S. jurisdictions may be impacted by factors such as an increase in duties, tariffs or other restrictions on trade; raw material shortages, work stoppages, strikes and political unrest; economic crises and international disputes or conflicts; changes in leadership and the political climate in countries from which we import products; and failure of the United States to maintain normal trade relations with China and other countries. While China currently enjoys "most favored nation" trading status with the United States, the ability of the United States to revoke that status and to impose higher tariffs on products imported from China, could materially adversely affect our business, results of operations and financial condition.

***Failure to successfully implement new initiatives or meet product introduction schedules can have an adverse effect on SRM's business, financial condition, and results of operations.***

SRM has in the past announced, and in the future may announce, initiatives to reduce its costs, optimize its manufacturing footprint, increase its efficiency, improve the execution of its core business, globalize and extend SRM's brands, catch new trends, create new brands, offer new innovative products and improve existing products, enhance product safety, develop people, improve productivity, simplify processes, and maintain customer service levels, as well as initiatives designed to drive sales growth, capitalize on SRM's scale advantage, and improve its supply chain. These initiatives involve investment of capital and complex decision-making as well as extensive and intensive execution, and the success of these initiatives is not assured. Failure to achieve any of these initiatives could harm SRM's business, financial condition, and results of operations.

From time to time, SRM anticipates introducing new products, product lines, or brands at a certain time in the future. There is no guarantee that SRM will be able to manufacture, source, ship, and distribute new or continuing products in a timely manner and on a cost-effective basis. Unforeseen delays or difficulties in the development process or significant increases in the planned cost of development for new SRM products may cause the introduction date for products to be later than anticipated or, in some situations, may cause a product or new product introduction to be discontinued. Failure to successfully implement any of these initiatives or launches, or the failure of any of these initiatives or launches to produce the results anticipated by management, could have an adverse effect on SRM's business, financial condition, and results of operations.

***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.***

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Because most of our products are sold at parks, and attendance at parks may be adversely affected by bad or extreme weather conditions and forecasts that may be a result of climate change, such bad or extreme weather conditions and forecasts may negatively affect our revenues. The effects of bad weather on attendance can be more pronounced at waterparks. We believe our operating results in certain years were adversely affected by abnormally hot, cold and/or wet weather in a number of our major U.S. markets. In addition, since a number of products are featured in parks geographically concentrated in portions of the United States, a weather pattern that affects those respective areas could adversely affect a number of our parks and disproportionately impact our results of operations. Bad weather and forecasts of bad weather on weekends, holidays or other peak periods will typically have a greater negative impact on our revenues and could disproportionately impact our results of operations.

***SRM's business is highly seasonal, and its operating results depend, in large part, on sales during the relatively brief traditional holiday season. Events that disrupt SRM's business during its peak demand times can adversely and disproportionately affect SRM's business, financial condition, and results of operations.***

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SRM's business is subject to risks associated with the underproduction of popular toys and the overproduction of toys that are less popular with consumers. SRM attempts to manage their inventories tightly, which requires SRM to ship products closer to the expected date SRM sells the products to consumers. This in turn results in shorter lead times for production. These factors may decrease sales or increase the risks that SRM may not be able to meet demand for certain products at peak demand times or that SRM's own inventory levels may be adversely impacted by the need to pre-build products before orders are placed.

In addition, as a result of the seasonal nature of SRM's business, SRM may be adversely affected, in a manner disproportionate to the impact on a company with sales spread more evenly throughout the year, by unforeseen events, such as public health crises and pandemics, terrorist attacks, economic shocks, severe weather due to climate change or otherwise, earthquakes or other catastrophic events, that harm the retail environment or consumer buying patterns during its key selling season, or by events, such as strikes, disruptions in transportation, or port delays, that interfere with the manufacture or shipment of goods during the critical months leading up to the purchasing season.

***We could be subject to future product liability suits or product recalls which could have a significant adverse effect on our financial condition and results of operations.***

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As a company that designs and sells consumer products, we may be subject to product liability suits or involuntary product recalls, or may choose to voluntarily conduct a product recall. While costs associated with product liability claims and product recalls have generally not been material to our business, the costs associated with future product liability claims or product recalls in any given fiscal year, individually or in the aggregate, could be significant. In addition, any product recall, regardless of the direct costs of the recall, could harm consumer perceptions of our products, subject us to additional government scrutiny, divert development and management resources, adversely affect our business operations and otherwise put us at a competitive disadvantage compared to other companies in our industry, any of which could have a significant adverse effect on our financial condition and results of operations.

***SRM's business depends in large part on the success of its vendors and outsourcers, and SRM's brands and reputation are subject to harm from actions taken by third parties that are outside SRM's control. In addition, any significant failure, inadequacy, or interruption from such vendors or outsourcers could harm SRM's ability to effectively operate its business.***

As a part of its efforts to cut costs, achieve better efficiencies, and increase productivity and service quality, SRM relies significantly on vendor and outsourcing relationships with third parties for services and systems including manufacturing, transportation, logistics, and information technology. Any shortcoming of a SRM vendor or outsourcer, particularly an issue affecting the quality of these services or systems, results in risk of damage to SRM's reputation and brand value, and potentially adverse effects to SRM's business, financial condition, and results of operations. In addition, problems with transitioning these services and systems to, or operating failures with, these vendors and outsourcers cause delays in product sales and reduce the efficiency of SRM's operations, and significant capital investments could be required to remediate the problem.

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

SRM's future success depends partly on the continued contribution of key executives, designers, and technical, sales, marketing, manufacturing, entertainment, and other personnel. The loss of services of any of SRM's key personnel could harm SRM's business. Recruiting and retaining skilled personnel is costly and highly competitive. In addition, changes to SRM's current and future work environments may not meet the needs or expectations of its employees or be perceived as less favorable compared to other companies' policies, which could negatively impact SRM's ability to hire and retain qualified personnel. If SRM fails to retain, hire, train, and integrate qualified employees and contractors, SRM may not be able to maintain or expand its business.

The loss of any member of our senior management team, or of any other key employees, or the inability to successfully complete planned management transitions, could impair our ability to execute our business plan and could therefore have a material adverse effect on our business, financial condition and results of operations. We do not currently maintain key man life insurance policies on any member of our senior management team or on our other key employees.

***We will share certain key directors and officers with Jupiter Wellness, which means those officers will not devote their full time and attention to our affairs and the overlap may give rise to conflicts.***

There is an overlap between certain key directors and officers of the Company and of Jupiter Wellness. Brian John currently serves as Chief Executive Officer and Director of Jupiter Wellness and Secretary and Chairman of SRM. Mr. Douglas McKinnon currently serves as Chief Financial Officer of Jupiter Wellness and Chief Financial Officer of SRM. As a result, not all of our executive officers will be devoting their full time and attention to the Company's affairs. In addition to Mr. John, two other members of our Board, Christopher Marc Melton and Gary Herman each serve as a Director of Jupiter Wellness and SRM. 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 Jupiter Wellness. See "Certain Relationships and Related Party Transactions" for additional information.

***Failure to keep pace with developments in technology could adversely affect our operations or competitive position.***

The theme park and waterpark industry demands the use of sophisticated technology and systems for operation of our parks, ticket, membership and season pass sales and management, and labor and inventory management. Information technology systems continue to evolve and, in order to remain competitive, we must implement new technologies and systems in a timely and efficient manner. The development and maintenance of these technologies may require significant investment by us and we may not achieve the anticipated benefits from such new developments or upgrades.

***Increases in labor costs and employee health and welfare benefits could have a negative impact on our cash flows, financial condition, and results of operations.***

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Labor is a primary component in the cost of operating our business. We devote significant resources to recruiting and training our employees in order to meet our guests' high expectations for service. Wage and benefit increases to attract and retain employees in a tight labor market have driven-up labor costs. These increased costs pressure our margins and could have a negative impact on our financial results. Our ability to control labor costs is subject to numerous external factors, including market pressures with respect to prevailing wage rates, unemployment levels, and health and other insurance costs, as well as the impact of legislation or regulations governing labor relations, minimum wage, and healthcare benefits. Further legislative changes or competitive wage rates could continue to increase these expenses in the future.

***Disruptions in SRM's manufacturing operations or supply chain due to political instability, civil unrest, or disease could adversely affect SRM's business, financial position, sales, and results of operations.***

SRM primarily utilizes third-party manufacturers and suppliers throughout Asia. The risk of political instability and civil unrest exists in certain of these countries, which could temporarily or permanently damage the manufacturing operations of SRM and/or its third-party manufacturers located there. Outbreaks of communicable diseases have also been known to occur in these countries. For example, the COVID-19 pandemic began in Wuhan, Hubei Province, China and has caused supply chain disruption for SRM, its suppliers, and its customers that contributed to lower net sales in the first half of 2020 and may cause lower net sales to the extent they remain issues in the future. Other disruptions from public health crises such as these result from, among other things, workers contracting diseases, restrictions on factory openings, restrictions on travel, restrictions on shipping, and the closure of critical infrastructure. The design, development, and manufacture of SRM's products could suffer if SRM's employees or the employees of its third-party manufacturers or their suppliers contract communicable diseases, or if SRM, SRM's third-party manufacturers, or their suppliers are adversely affected by other impacts of such diseases. In addition, the contingency plans SRM has developed to help mitigate the impact of disruptions in its manufacturing operations and supply chain may not prevent its business, financial position, sales, and results of operations from being adversely affected by a significant disruption to its manufacturing operations or suppliers.

***Disruptions in our supply chain for materials and components and the resulting increase in equipment and logistics costs could adversely affect our financial performance.***

We are subject to risk from fluctuating manufacturing costs of our products based on surging consumer demand. Prices of these manufacturing costs, including the components and materials of our products may be affected by supply restrictions or other market factors from time to time.

Political, social or economic instability in regions where these components and materials are made could cause future disruptions in trade. For example, concerns about forced labor in China's Xinjiang Uyghur Autonomous Region ("XUAR"), where certain components and materials are manufactured, have led to legislation in countries such as the United States restricting imports from such region. Specifically, on December 23, 2021, the United States enacted the Uyghur Forced Labor Prevention Act ("UFLPA"), which presumptively prohibits imports of any goods made either wholly or in part in the XUAR. The law, which went into effect on June 21, 2022, creates a rebuttable presumption against "the importation of goods made, manufactured, or mined in the XUAR (and certain other categories of persons in China)" unless the importer meets certain due diligence standards, responds to all inquiries from U.S. Customs and Border Protection ("CBP") related to forced labor and the CBP determines, based on "clear and convincing evidence," that the goods in question were not produced wholly or in part by forced labor. We do not believe that our suppliers source materials for our supply chain from the XUAR, but we cannot guarantee that our suppliers and partners will always comply with our policies. Enforcement of the UFPLA against us or our suppliers could lead to our products being held for inspection by CBP and delayed or rejected for entry into the United States, resulting in other supply chain disruptions, or cause us to be subject to penalties, fines or sanctions. Broader policy uncertainty, including actions in various countries, such as China, have created uncertainty with respect to tariff impacts on the costs of some of these components and materials. Even if we were not subject to penalties, fines or sanctions or supply chain disruption, if products we source are linked in any way to forced labor in the XUAR, our reputation could be harmed. In the future, these trade restrictions may extend beyond the United States.

We cannot predict whether the countries in which the components and materials are sourced, or may be sourced in the future, will be subject to new or additional trade restrictions imposed by the governments of countries in which our projects are located, including the likelihood, type or effect of any such restrictions. Trade restrictions, including embargoes, safeguards and customs restrictions against certain components and materials, as well as labor strikes and work stoppages or boycotts, could increase the cost or reduce or delay the supply of components and materials available to us and our vendors, which could delay or adversely affect the scope of our projects under development or construction and adversely affect our business, financial condition or results of operations.

***We depend on large, recurring purchases from certain significant retailers, distributors and other channel partners, and a loss, cancellation or delay in purchases by these channel partners could negatively affect our revenue.***

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The loss of recurring orders from any of our more significant retailers, distributors and other channel partners could cause our revenue and profitability to suffer. Our ability to attract new retailers, distributors and other channel partners will depend on a variety of factors, including the cost-effectiveness, reliability, scalability, breadth and depth of our products. In addition, a change in the mix of our retailers, distributors and other channel partners, or a change in the mix of direct and indirect sales, could adversely affect our revenue and gross margin.

Although our financial performance may depend on large, recurring orders from certain retailers, distributors and other channel partners, we do not generally have binding commitments from them. For example:

● 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.

Because our expenses are based on our revenue forecasts, a substantial reduction or delay in sales of our products to, or unexpected returns from, channel partners, or the loss of any significant channel partners, could materially adversely affect our business, results of operations and financial condition. Although our largest channel partners may vary from period to period, we anticipate that our results of operations for any given period will continue to depend on large orders from a small number of channel partners.

***SRM relies extensively on information technology in its operations, and any material failure, inadequacy, interruption, or security breach of that technology could have an adverse effect on its business, financial condition, and results of operations.***

SRM relies extensively on information technology systems across its operations, including for management of its supply chain, sale and delivery of its products and services, reporting its results and various other processes and transactions. Many of these systems are managed by third-party service providers. SRM uses third-party technology and systems for a variety of reasons, including, without limitation, encryption and authentication technology, employee email, content delivery to customers, back-office support, and other functions. A small and growing volume of SRM's consumer products and services are web-based, and some are offered in conjunction with business partners or such third-party service providers. SRM's ability to effectively manage its business and coordinate the production, distribution, and sale of its products and services depends significantly on the reliability and capacity of these systems and third-party service providers.

***SRM faces risks related to protecting its proprietary intellectual property and information and is subject to third-party claims that SRM is infringing on their intellectual property rights, either of which could adversely affect SRM's business, financial condition, and results of operations.***

The value of SRM's business depends on its ability to protect its intellectual property and information, including its trademarks, trade names, copyrights, patents, trade secrets, and rights under intellectual property license agreements and other agreements with third parties, in the United States and around the world, as well as its customer, employee, and consumer data. From time to time, third parties may in the future try to challenge, SRM's ownership of its intellectual property in the United States and around the world. Responding to any infringement claim, regardless of its validity, may be costly and time-consuming and may divert management and key personnel from business operations. Findings of infringement on the intellectual property rights of any third party by SRM, its distributors, its licensors, or its manufacturers may require obtaining a license to use those rights, which may not be obtainable on reasonable terms, if at all.

In addition, SRM's business is subject to the risk of third parties counterfeiting its products or infringing on its intellectual property rights. The steps SRM has taken may not prevent unauthorized use of its intellectual property, particularly in foreign countries where the laws may not protect its intellectual property as fully as in the United States. SRM may resort to litigation to protect its intellectual property rights, which could result in substantial costs and diversion of resources. SRM's failure to protect its proprietary intellectual property and information, including with respect to any successful challenge to SRM's ownership of its intellectual property or significant infringements of its intellectual property, could have an adverse effect on SRM's business, financial condition, and results of operations.

We rely on a combination of copyright, trademark, patent and trade secret laws, nondisclosure agreements with employees, consultants and suppliers and other contractual provisions to establish, maintain and protect our intellectual property and technology. Despite efforts to protect our intellectual property, unauthorized third parties may attempt to design around, copy aspects of our product design or obtain and use technology or other intellectual property associated with our products. Furthermore, our competitors may independently develop similar technology or design around our intellectual property. Our inability to secure and protect our intellectual property rights could materially adversely affect our brand and business, results of operations and financial condition.

***If disruptions in our transportation network occur or our shipping costs substantially increase, we may be unable to sell or timely deliver our products, and our operating expenses could increase.***

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We are highly dependent upon the transportation systems we use to ship our products, including surface and air freight. Our attempts to closely match our inventory levels to our product demand intensify the need for our transportation systems to function effectively and without delay. On a quarterly basis, our shipping volume also tends to steadily increase as the quarter progresses, which means that any disruption in our transportation network in the latter half of a quarter will likely have a more material effect on our business than at the beginning of a quarter.

The transportation network is subject to disruption or congestion from a variety of causes, including labor disputes or port strikes, acts of war or terrorism, natural disasters and congestion resulting from higher shipping volumes. Labor disputes among freight carriers and at ports of entry are common, particularly in Europe, and we expect labor unrest and its effects on shipping our products to be a continuing challenge for us. A port worker strike, work slow-down or other transportation disruption in Asia and the United States, where we import our products to fulfill our orders, could significantly disrupt our business. Our international freight is regularly subjected to inspection by governmental entities. If our delivery times increase unexpectedly for these or any other reasons, our ability to deliver products on time would be materially adversely affected and result in delayed or lost revenue as well as customer imposed penalties. In addition, if increases in fuel prices occur, our transportation costs would likely increase. Moreover, the cost of shipping our products by air freight is greater than other methods. From time to time in the past, we have shipped products using extensive air freight to meet unexpected spikes in demand and shifts in demand between product categories, to bring new product introductions to market quickly and to timely ship products previously ordered. If we rely more heavily upon air freight to deliver our products, our overall shipping costs will increase. A prolonged transportation disruption or a significant increase in the cost of freight could materially adversely affect our business, results of operations and financial condition.

***The development of our operations and infrastructure in connection with our separation from Jupiter Wellness, and any future expansion of such operations and infrastructure, may not be entirely successful, and may strain our operations and increase our operating expenses.***

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In connection with our separation from Jupiter Wellness, we have been implementing a new information technology infrastructure for our business, which includes the creation of management information systems and operational and financial controls unique to our business. We may not be able to put in place adequate controls in an efficient and timely manner in connection with our separation from Jupiter Wellness and as our business grows, and our current systems may not be adequate to support our future operations. The difficulties associated with installing and implementing new systems, procedures and controls may place a significant burden on our management and operational and financial resources. In addition, as we grow internationally, we will have to expand and enhance our communications infrastructure. If we fail to continue to improve our management information systems, procedures and financial controls, or encounter unexpected difficulties during expansion and reorganization, our business could be harmed.

For example, we are investing significant capital and human resources in the design, development and enhancement of our financial and enterprise resource planning systems. We will depend on these systems in order to timely and accurately process and report key components of our results of operations, financial condition and cash flows. If the systems fail to operate appropriately or we experience any disruptions or delays in enhancing their functionality to meet current business requirements, our ability to fulfill customer orders, bill and track our customers, fulfill contractual obligations, accurately report our financials and otherwise run our business could be adversely affected. Even if we do not encounter these adverse effects, the development and enhancement of systems may be much more costly than we anticipated. If we are unable to continue to develop and enhance our information technology systems as planned, our business, results of operations and financial condition could be materially adversely affected.

***As part of growing our business, we may make acquisitions. If we fail to successfully select, execute or integrate our acquisitions, then our business, results of operations and financial condition could be materially adversely affected and our stock price could decline.***

From time to time, we may undertake acquisitions to add new product and service lines and technologies, acquire talent, gain new sales channels or enter into new sales territories. Acquisitions involve numerous risks and challenges, including relating to the successful integration of the acquired business, entering into new territories or markets with which we have limited or no prior experience, establishing or maintaining business relationships with new retailers, distributors or other channel partners, vendors and suppliers and potential post-closing disputes.

We cannot ensure that we will be successful in selecting, executing and integrating acquisitions. Failure to manage and successfully integrate acquisitions could materially harm our business, financial condition and results of operations. In addition, if stock market analysts or our stockholders do not support or believe in the value of the acquisitions that we choose to undertake, our stock price may decline.

***If we do not effectively manage our sales channel inventory and product mix, we may incur costs associated with excess inventory, or lose sales from having too few products.***

If we are unable to properly monitor, control and manage our sales channel inventory and maintain an appropriate level and mix of products with our distributors and within our sales channels, we may incur increased and unexpected costs associated with this inventory. If our wholesale distributors and retailers are unable to sell their inventory in a timely manner, we might lower the price of the products, or these parties may exchange the products for newer products. Also, during the transition from an existing product to a new replacement product, we must accurately predict the demand for the existing and the new product.

We determine production levels based on our forecasts of demand for our products. Actual demand for our products depends on many factors, which makes it difficult to forecast. We have experienced differences between our actual and our forecasted demand in the past and expect differences to arise in the future. If we improperly forecast demand for our products, we could end up with too many products and be unable to sell the excess inventory in a timely manner, if at all, or, alternatively, we could end up with too few products and not be able to satisfy demand. This problem is exacerbated because we attempt to closely match inventory levels with product demand, leaving limited margin for error. If these events occur, we could incur increased expenses associated with writing off excessive or obsolete inventory, lose sales, incur penalties for late delivery or have to ship products by air freight to meet immediate demand, thereby incurring incremental freight costs above the sea freight costs, a preferred method, and suffering a corresponding decline in gross margin.

***Changes in tax laws or exposure to additional income tax liabilities could affect our future profitability.***

Factors that could materially affect our future effective tax rates include but are not limited to:

● 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.

We are subject to income taxes in the United States and numerous foreign jurisdictions. Because we do not have a long history of operating as a separate company and we have significant expansion plans, our effective tax rate may fluctuate in the future. Future effective tax rates could be affected by operating losses in jurisdictions where no tax benefit can be recorded under GAAP, changes in the composition of earnings in countries with differing tax rates, changes in deferred tax assets and liabilities, or changes in tax laws.

On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (the "Tax Act") was signed into law making significant changes to the Code. In particular, sweeping changes were made to the U.S. taxation of foreign operations. Changes include, but are not limited to, a corporate tax rate decrease from 35% to 21% effective for tax years beginning after December 31, 2017, the transition of U.S. international taxation from a worldwide tax system to a quasi-territorial system, and a one-time transition tax on the mandatory deemed repatriation of cumulative foreign earnings. Additionally, new provisions were added to mitigate the potential erosion of the U.S. tax base and to discourage use of low tax jurisdictions to own intellectual property and other valuable intangible assets. While these provisions were intended to prevent specific perceived taxpayer abuse, they may have adverse, unexpected consequences. At this time, Treasury has not yet issued Regulations on how these new rules should be applied and how the relevant calculations are to be prepared. As there exists only limited guidance at this time, significant estimates and judgment are required in assessing the consequences. The amounts for adjusting the deferred tax assets and liabilities for the new effective tax rate and the transition tax are provisional based on the guidance provided by the SEC in Staff Accounting Bulletin No. 118 ("SAB 118"), which provides for a measurement period of one year from the enactment date to finalize the accounting for effects of the 2017 Tax Act. As a result of continued regulations and interpretations of the Tax Act, we are still quantifying the effects of the tax law change. Based on information available, we also reflected a provisional estimate of $ million related to the transitional tax that was fully offset with tax attributes and therefore did not result in an income tax expense. The amounts reported as of December 31, 2021 are provisional based on the uncertainty discussed above. As we complete our analysis and prepare necessary data, and interpret any additional guidance, we will adjust our calculations and provisional amounts that we have recorded in our tax provision. Any such adjustments may materially impact our provision for income taxes in our financial statements.

In addition to the impact of the Tax Act on our federal taxes, the Tax Act may impact our taxation in other jurisdictions, including with respect to state income taxes. State legislatures have not had sufficient time to respond to the Tax Act. Accordingly, there is uncertainty as to how the laws will apply in the various state jurisdictions. Additionally, other foreign governing bodies may enact changes to their tax laws in reaction to the Tax Act that could result in changes to our global tax position and materially adversely affect our business, results of operations and financial condition.

Additionally, the IRS and several foreign tax authorities have increasingly focused attention on intercompany transfer pricing with respect to sales of products and services and the use of intangibles. Tax authorities could disagree with our intercompany charges, cross-jurisdictional transfer pricing or other matters and assess additional taxes. If we do not prevail in any such disagreements, our profitability may be affected.

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***We must comply with indirect tax laws in multiple jurisdictions, as well as complex customs duty regimes worldwide. Audits of our compliance with these rules may result in additional liabilities for taxes, duties, interest and penalties related to our international operations which would reduce our profitability.***

Our operations are routinely subject to audit by tax authorities in various countries. Many countries have indirect tax systems where the sale and purchase of goods and services are subject to tax based on the transaction value. These taxes are commonly referred to as value-added tax ("VAT") or goods and services tax ("GST"). In addition, the distribution of our products subjects us to numerous complex customs regulations, which frequently change over time. Failure to comply with these systems and regulations can result in the assessment of additional taxes, duties, interest and penalties. While we believe we are in compliance with local laws, we cannot assure that tax and customs authorities agree with our reporting positions and upon audit may assess us additional taxes, duties, interest and penalties.

Additionally, some of our products are subject to U.S. export controls, including the Export Administration Regulations and economic sanctions administered by the Office of Foreign Assets Control. We also incorporate encryption technology into certain of our solutions. These encryption solutions and underlying technology may be exported outside of the United States only with the required export authorizations or exceptions, including by license, a license exception, and appropriate classification notification requirement and encryption authorization.

Furthermore, our activities are subject to U.S. economic sanctions laws and regulations that prohibit the shipment of certain products and services without the required export authorizations, including to countries, governments and persons targeted by U.S. embargoes or sanctions. Obtaining the necessary export license or other authorization for a particular sale may be time consuming, and may result in delay or loss of sales opportunities even if the export license ultimately is granted. While we take precautions to prevent t our solutions from being exported in violation of these laws, including using authorizations or exceptions for our encryption products and implementing IP address blocking and screenings against U.S. government and international lists of restricted and prohibited persons and countries, we cannot guarantee that the precautions we take will prevent all violations of export control and sanctions laws. Violations of U.S. sanctions or export control laws can result in significant fines or penalties and incarceration could be imposed on employees and managers for criminal violations of these laws.

Also, various countries, in addition to the United States, regulate the import and export of certain encryption and other technology, including import and export licensing requirements, and have enacted laws that could limit our ability to distribute our products and services or our end-users' ability to utilize our solutions in their countries. Changes in our products and services or changes in import and export regulations may create delays in the introduction of our products in international markets. Adverse action by any government agencies related to indirect tax laws could materially adversely affect our business, results of operations and financial condition.

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***The Consumer Product Safety Improvement Act and other existing or future government regulation could harm our business or may cause us to incur additional costs associated with compliance.***

We are subject to various federal, state and local laws and regulations, including but not limited to, laws and regulations relating to labor and employment, U.S. customs and consumer product safety, including the Consumer Product Safety Improvement Act, or the "CPSIA." The CPSIA created more stringent safety requirements related to lead and phthalates content in children's products. The CPSIA regulates the future manufacture of these items and existing inventories and may cause us to incur losses if we offer for sale or sell any non-compliant items. Failure to comply with the various regulations applicable to us may result in damage to our reputation, civil and criminal liability, fines and penalties and increased cost of regulatory compliance. These current and any future laws and regulations could harm our business, results of operations and financial condition.

***We may be subject to anti-corruption, anti-bribery, anti-money laundering, economic sanctions and other similar laws and regulations, and non-compliance with such laws and regulations could subject SRM to civil, criminal and administrative penalties, remedial measures and legal expenses, all of which could adversely affect SRM's business, prospects, results of operations, financial condition and reputation.***

SRM is or will be subject to laws with respect to anti-corruption, anti-bribery, anti-money laundering, financial and economic sanctions and other similar laws and regulations in various jurisdictions in which SRM conducts, or in the future may conduct, activities, including the U.S. Foreign Corrupt Practices Act ("FCPA") and other anti-corruption laws and regulations. The FCPA prohibits SRM and its officers, directors, employees and business partners acting on its behalf, including agents, from offering, promising, authorizing or providing anything of value to a "foreign official" for the purposes of influencing official decisions or obtaining or retaining business or otherwise obtaining favorable treatment. The FCPA also requires companies to make and keep books, records and accounts that accurately reflect transactions and dispositions of assets and to maintain a system of adequate internal accounting controls. A violation of these laws or regulations could adversely affect our business, prospects, results of operations, financial condition and reputation.

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***If one or more of our major customers were to experience difficulties in fulfilling their obligations to us, cease doing business with us, significantly reduce the amount of their purchases from us or return substantial amounts of our products, it could have a materially adverse effect on our business, results of operations and financial condition.***

A substantial reduction in or termination of orders from any of our largest customers would adversely affect our business, results of operations and financial condition. In addition, pressure by large customers seeking price reductions, financial incentives and changes in other terms of sale or for us to bear the risks and the cost of carrying inventory could also adversely affect our business, results of operations and financial condition.

If one or more of our major customers were to experience difficulties in fulfilling their obligations to us resulting from bankruptcy or other deterioration in their financial condition or ability to meet their obligations, cease doing business with us, significantly reduce the amount of their purchases from us, or return substantial amounts of our products, it could have a material adverse effect on our business, results of operations and financial condition. The COVID-19 pandemic has left many customers outside of our largest customers under varying degrees of financial distress, and it seems some of our largest customers are facing increases in their operating costs. Customers may request extended payment terms which may require us to take on increased credit risk or to reduce or forgo sales entirely in an attempt to mitigate financial risk associated with customer bankruptcy risk.

***Customer complaints regarding our products and services could hurt our business****.* 

From time to time, we may receive complaints from customers regarding the quality of goods purchased from us. We may in the future receive correspondence from customers requesting reimbursement. Certain dissatisfied customers may threaten legal action against us if no reimbursement is made. We may become subject to product liability lawsuits from customers alleging injury because of a purported defect in our products or services, claiming substantial damages and demanding payments from us. We are in the chain of title when we supply or distribute products, and therefore are subject to the risk of being held legally responsible for them. These claims may not be covered by our insurance policies. Any resulting litigation could be costly for us, divert management attention, and could result in increased costs of doing business, or otherwise have a material adverse effect on our business, results of operations, and financial condition. Any negative publicity generated as a result of customer frustration with our products or services, or with our websites, could damage our reputation and diminish the value of our brand name, which could have a material adverse effect on our business, results of operations, and financial condition.

**Risks Related to This Offering and Ownership 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.***

The trading price of our Common Stock is likely to be volatile. Upon the consummation of this offering, we will have a relatively small public float due to the relatively small size of this offering, and the concentrated ownership of our Common Stock among our executive officers and directors, and greater than 5% stockholders. As a result of our small public float, our Common Stock may be less liquid and have greater stock price volatility than the Common Stock of companies with broader public ownership.

Our stock price could be subject to wide fluctuations in response to a variety of other factors, which include:

● 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.

In addition, the stock market in general has recently experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies. Such rapid and substantial price volatility, including any stock run-up, may be unrelated to our actual or expected operating performance and financial condition or prospects, making it difficult for prospective investors to assess the rapidly changing value of our stock. This volatility may prevent you from being able to sell your securities at or above the price you paid for your securities. If the market price of our Common Stock after this offering does not exceed the initial public offering price, you may not realize any return on your investment in us and may lose some or all of your investment.

***No market currently exists for our Common Stock. We cannot assure you that an active trading market will develop for our Common Stock.***

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Prior to this offering, there has been no public market for shares of our Common Stock. We cannot predict the extent to which investor interest in us will lead to the development of a trading market on the Nasdaq or otherwise, or how liquid that market might become. If an active market does not develop, you may have difficulty selling any shares of our Common Stock that you purchase in this offering. The initial public offering price for the shares of our Common Stock will be determined by negotiations between us and the representatives of the underwriters, and may not be indicative of prices that will prevail in the open market following this offering.

In particular, the realization of any of the risks described in these "*Risk Factors*" could have a material adverse impact on the market price of our Common Stock in the future and cause the value of your investment to decline. In addition, the stock market in general has experienced extreme volatility that has often been unrelated to the operating performance of particular companies. These broad market and industry factors may materially reduce the market price of our Common Stock, regardless of our operating performance. In addition, price volatility may be greater if the public float and trading volume of our Common Stock is low.

***We may change our dividend policy at any time.***

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Although following this offering we currently intend to retain future earnings to finance the operation and expansion of our business and therefore do not anticipate paying cash dividends on our capital stock in the foreseeable future, our dividend policy may change at any time without notice to our stockholders. The declaration and amount of any future dividends to holders of our Common Stock will be at the discretion of our board of directors in accordance with applicable law and after taking into account various factors, including our financial condition, results of operations, current and anticipated cash needs, cash flows, impact on our effective tax rate, indebtedness, contractual obligations, legal requirements and other factors that our board of directors deems relevant. As a result, we cannot assure you that we will pay dividends at any rate or at all.

***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 could decline significantly as a result of sales or other distributions of a large number of shares of our Common Stock in the market after this offering, including shares that might be offered for sale or distributed by Jupiter Wellness. The perception that these sales might occur could depress the market price of our Common Stock. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate.

Upon completion of this offering, we will have shares of Common Stock (shares if the underwriters exercise their option to purchase additional shares in full) outstanding. The shares of Common Stock offered in this offering will be freely tradable without restriction under the Securities Act, except for any shares of Common Stock that may be held or acquired by our directors, executive officers and other affiliates, as that term is defined in the Securities Act, which will be restricted securities under the Securities Act. Restricted securities may not be sold in the public market unless the sale is registered under the Securities Act or an exemption from registration is available.

In connection with this offering, we, our directors and executive officers and Jupiter Wellness have each agreed to enter into a lock-up agreement and thereby be subject to a "lock-up period," meaning that they and their permitted transferees will not be permitted to sell any of the shares of our Common Stock for 180 days, in the case of Jupiter Wellness, and for 180 days, in our case and the case of our directors and executive officers, after the date of this prospectus, without the prior consent of EF Hutton on behalf of the underwriters. EF Hutton, on behalf of the underwriters may, in their sole discretion and without notice, release all or any portion of the shares of our Common Stock from the restrictions in any of the lock-up agreements described above. See the section titled "*Underwriting*."

Also, in the future, we may issue our securities in connection with investments or acquisitions. The amount of shares of our Common Stock issued in connection with an investment or acquisition could constitute a material portion of our then-outstanding shares of our Common Stock.

***We are a "controlled company" within the meaning of the Nasdaq listing rules and may follow certain exemptions from certain corporate governance requirements that could adversely affect our public shareholders.***

Jupiter Wellness currently beneficially owns 81.1% of SRM. Our Founders currently beneficially own 18.9% of SRM. The aforementioned provides Jupiter Wellness with 81.1% of the voting power of our voting stock and the Founders with 18.9% of the voting power of our voting stock. Upon the closing of this offering, Jupiter Wellness will beneficially own more than 50.1% of the shares of Common Stock and % of the voting power of our voting stock (approximately % if the over-allotment is exercised in full) and our Founders will own collectively % of the voting power of our voting stock upon the closing of this offering (approximately % if the over-allotment is exercised in full). We currently meet the definition of a "controlled company" under the corporate governance standards for Nasdaq listed companies and for so long as we remain a "controlled company" under this definition, we are eligible to utilize certain exemptions from the corporate governance requirements of Nasdaq, including the requirements (i) that a majority of the Board consist of independent directors, (ii) to have a governance committee that is composed entirely of independent directors with a written charter addressing the committee's purpose and responsibilities, (iii) to have a compensation committee that is composed entirely of independent directors with a written charter addressing the committee's purpose and responsibilities, (iv) that the compensation committee consider certain independence factors when engaging legal counsel and other committee advisors and (v) for an annual performance evaluation of the governance and compensation committees. Although we do not intend to rely on the "controlled company" exemptions under the Nasdaq listing rules even if we are deemed a "controlled company," we could elect to rely on these exemptions in the future. If we were to elect to rely on the "controlled company" exemptions, a majority of the members of the Board might not be independent directors and our nominating and corporate governance and compensation committees might not consist entirely of independent directors. Accordingly, if we rely on the exemptions, during the period we remain a controlled company and during any transition period following a time when we are no longer a controlled company, you would not have the same protections afforded to shareholders of companies that are subject to all of the corporate governance requirements of Nasdaq.

***You may experience immediate and substantial dilution in the net tangible book value of the shares you purchase in this offering, and you will suffer additional dilution if the underwriters exercise their option to purchase additional shares.***

If you purchase shares of our Common Stock in this offering, you will experience immediate and substantial dilution, as the initial public offering price of our Common Stock will be substantially greater than the pro forma net tangible book value per share of our Common Stock. Based on the assumed initial offering price of $ per share, if you purchase our Common Stock in this offering, you will suffer immediate and substantial dilution of approximately $ per share. In addition, in connection with the distribution, we expect that Jupiter Wellness stock-based compensation awards held by our employees and Jupiter Wellness employees will be adjusted as described under "*Certain Relationships and Related Party Transactions—Separation Agreement*" below, which may result in additional dilution to investors.

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***Our costs will increase significantly as a result of operating as a public company, and our management will be required to devote substantial time to complying with public company regulations.***

We have historically operated our business as a segment of a public company. As a stand-alone public company, we will have additional legal, accounting, insurance, compliance and other expenses that we have not incurred historically. After this offering, we will become obligated to file with the SEC annual and quarterly reports and other reports that are specified in Section 13 and other sections of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). We will also be required to ensure that we have the ability to prepare financial statements that are fully compliant with all SEC reporting requirements on a timely basis. In addition, we will become subject to other reporting and corporate governance requirements, including certain requirements of the Nasdaq, and certain provisions of the Sarbanes-Oxley Act of 2002 ("Sarbanes-Oxley") and the regulations promulgated thereunder, which will impose significant compliance obligations upon us.

Sarbanes-Oxley, as well as rules subsequently implemented by the SEC and the Nasdaq, have imposed increased regulation and disclosure and required enhanced corporate governance practices of public companies. We are committed to maintaining high standards of corporate governance and public disclosure, and our efforts to comply with evolving laws, regulations and standards in this regard are likely to result in increased selling and administrative expenses and a diversion of management's time and attention from revenue-generating activities to compliance activities. These changes will require a significant commitment of additional resources. We may not be successful in implementing these requirements and implementing them could materially adversely affect our business, results of operations and financial condition. In addition, if we fail to implement the requirements with respect to our internal accounting and audit functions, our ability to report our operating results on a timely and accurate basis could be impaired. If we do not implement such requirements in a timely manner or with adequate compliance, we might be subject to sanctions or investigation by regulatory authorities, such as the SEC and the Nasdaq. Any such action could harm our reputation and the confidence of investors and customers in us and could materially adversely affect our business and cause our share price to fall.

***Failure to achieve and maintain effective internal controls in accordance with Section 404 of Sarbanes-Oxley could materially adversely affect our business, results of operations, financial condition and stock price.***

As a public company, we will be required to document and test our internal control procedures in order to satisfy the requirements of Section 404 of Sarbanes-Oxley ("Section 404"), which will require annual management assessments of the effectiveness of our internal control over financial reporting. Upon loss of emerging growth company status, an annual report by our independent registered public accounting firm that addresses the effectiveness of internal control over financial reporting will be required. During the course of our testing, we may identify deficiencies which we may not be able to remediate in time to meet our deadline for compliance with Section 404. Testing and maintaining internal control can divert our management's attention from other matters that are important to the operation of our business. We also expect the regulations under Sarbanes-Oxley to increase our legal and financial compliance costs, make it more difficult to attract and retain qualified officers and members of our board of directors, particularly to serve on our audit committee, and make some activities more difficult, time consuming and costly. We may not be able to conclude on an ongoing basis that we have effective internal control over our financial reporting in accordance with Section 404 or our independent registered public accounting firm may not be able or willing to issue an unqualified report on the effectiveness of our internal control over financial reporting. If we conclude that our internal control over financial reporting is not effective, we cannot be certain as to the timing of completion of our evaluation, testing and remediation actions or their effect on our operations because there is presently no precedent available by which to measure compliance adequacy. If either we are unable to conclude that we have effective internal control over our financial reporting or our independent auditors are unable to provide us with an unqualified report as required by Section 404, then investors could lose confidence in our reported financial information, which could have a negative effect on the trading price of our stock.

***If securities or industry analysts do not publish research or reports about our business, if they adversely change their recommendations regarding our stock or if our operating results do not meet their expectations, our stock price could decline.***

The trading market for our Common Stock will be influenced by the research and reports that industry or securities analysts publish about us or our business. If one or more of these analysts cease coverage of us or fail to publish reports on us regularly, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline. Moreover, if one or more of the analysts who cover us downgrades our stock or if our operating results do not meet their expectations, our stock price could decline.

***We could be subject to securities class action litigation.***

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In the past, securities class action litigation has often been instituted against companies whose securities have experienced periods of volatility in market price. Securities litigation brought against us following volatility in the price of our Common Stock, regardless of the merit or ultimate results of such litigation, could result in substantial costs, which would hurt our financial condition and results of operations and divert management's attention and resources from our business.

***Your percentage ownership in SRM may be diluted in the future.***

In the future, your percentage ownership in SRM may be diluted because of equity awards that SRM may gran to SRM's directors, officers and employees or otherwise as a result of equity issuances for acquisitions or capital market transactions. SRM anticipates its executive compensation committee may grant additional stock-based awards to its employees after this offering. Such awards will have a dilutive effect on SRM's earnings per share, which could adversely affect the market price of SRM Common Stock. From time to time, SRM may issue additional stock-based awards to its employees under SRM's employee benefits plans.

In addition, SRM's amended and restated articles of incorporation will authorize SRM to issue, without the approval of SRM's stockholders, one or more classes or series of preferred stock having such designation, powers, preferences and relative, participating, optional and other special rights, including preferences over SRM's Common Stock respecting dividends and distributions, as SRM's board of directors generally may determine. The terms of one or more classes or series of preferred stock could dilute the voting power or reduce the value of our Common Stock. For example, SRM could grant the holders of preferred stock the right to elect some number of SRM's directors in all events or on the happening of specified events or the right to veto specified transactions. Similarly, the repurchase or redemption rights or liquidation preferences that SRM could assign to holders of preferred stock could affect the residual value of the Common Stock. See "*Description of Capital Stock*."

***We are an emerging growth company and as a result have certain reduced disclosure requirements in this prospectus.***

We are an "emerging growth company" as defined in the JOBS Act and, as such, have elected to comply with certain reduced disclosure requirements for this prospectus and may elect to comply with certain reduced public company reporting requirements for future filings. As an emerging growth company, we are not required to disclose certain executive compensation information in this prospectus pursuant to the JOBS Act. We have also elected to present only two years of audited financial statements and the related section titled "*Management's Discussion and Analysis of Financial Condition and Results of Operations*" in this prospectus. In addition, the JOBS Act provides that an emerging growth company can delay adopting new or revised accounting standards until such time as those standards apply to private companies.

 ****

***We have applied to list our shares of Common Stock on Nasdaq. We can provide no assurance that our shares of Common Stock will qualify to be listed, and if listed, that our shares of Common Stock will continue to meet Nasdaq listing requirements. If we fail to qualify for listing on Nasdaq, the offering and distribution will not be consummated. If we fail to comply with the continuing listing requirements of Nasdaq, our Common Stock could be delisted.***

We anticipate that our shares of Common Stock will be eligible to be listed on Nasdaq following this offering. We cannot guarantee that we will be successful in listing our Common Stock on Nasdaq. However, the consummation of this offering and the distribution are contingent on final approval by Nasdaq. We will not consummate this offering or the distribution unless our Common Stock is so listed.

If, after listing, we fail to satisfy the continued listing requirements of Nasdaq, such as the corporate governance requirements or the minimum closing bid price requirement, Nasdaq may take steps to delist our Common Stock. Such a delisting would likely have a negative effect on the price of our Common Stock and would impair your ability to sell or purchase our Common Stock when you wish to do so. In the event of a delisting, we can provide no assurance that any action taken by us to restore compliance with listing requirements would allow our Common Stock to become listed again, stabilize the market price or improve the liquidity of our Common Stock, prevent our Common Stock from dropping below the Nasdaq minimum bid price requirement or prevent future non-compliance with Nasdaq's listing requirements.

 ****

***Concentration of ownership among our existing principal stockholder, executive officers, directors and their affiliates may prevent new investors from influencing significant corporate decisions.***

Upon completion of this offering, our executive officers, directors, principal shareholders and their affiliates will beneficially own, in the aggregate, approximately 20.1% of our outstanding shares of Common Stock. In particular, Jupiter Wellness, which currently owns 81.1% of our Common Stock, will beneficially own approximately % of our outstanding shares of Common Stock upon completion of this offering (or % if the underwriters exercise their option to purchase additional shares in full).

As a result, Jupiter Wellness will be able to exercise effective control over all matters requiring stockholder approval, including the election of directors, amendment of our articles of incorporation and approval of significant corporate transactions. This control could have the effect of delaying or preventing a change of control of our company or changes in management and will make the approval of certain transactions difficult or impossible without the support of Jupiter Wellness.

***Our stock price may be volatile and your investment in our Common Stock could suffer a decline in value.***

There has been significant volatility in the market price and trading volume of securities of technology and other companies, which may be unrelated to the financial performance of these companies. These broad market fluctuations may negatively affect the market price of our Common Stock*.*

Some specific factors that may have a significant effect on the market price of our Common Stock include:

● 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.

 ****

***The Nevada Revised Statute contains provisions that could discourage, delay, or prevent a change in our control, prevent attempts to replace or remove current management and reduce the market price of our stock.***

We are subject to the anti-takeover provisions of the Nevada Revised Statutes ("NRS"). Depending on the number of residents in the state of Nevada who own our shares, we could be subject to the provisions of Sections 78.378 et seq. of the Nevada Revised Statutes which, unless otherwise provided in our articles of incorporation or by-laws, restricts the ability of an acquiring person to obtain a controlling interest of 20% or more of our voting shares. Our articles of incorporation and by-laws do not contain any provision which would currently keep the change of control restrictions of Section 78.378 from applying to us.

We are subject to the provisions of Sections 78.411 et seq. of the Nevada Revised Statutes. In general, this statute prohibits a publicly held Nevada corporation from engaging in a "combination" with an "interested stockholder" for a period of three years after the date of the transaction in which the person became an interested stockholder, unless the combination or the transaction by which the person became an interested stockholder is approved by the corporation's Board before the person becomes an interested stockholder. After the expiration of the three-year period, the corporation may engage in a combination with an interested stockholder under certain circumstances, including if the combination is approved by the Board and/or stockholders in a prescribed manner, or if specified requirements are met regarding consideration. The term "combination" includes mergers, asset sales and other transactions resulting in a financial benefit to the interested stockholder. Subject to certain exceptions, an "interested stockholder" is a person who, together with affiliates and associates, owns, or within three years did own, 10% or more of the corporation's voting stock. A Nevada corporation may "opt out" from the application of NRS Section 78.411 et seq. through a provision in its articles of incorporation or by-laws. We have not "opted out" from the application of this section.

***Certain provisions in our amended and restated articles of incorporation and amended and restated bylaws and of Nevada law may prevent or delay an acquisition of SRM, which could decrease the trading price of our Common Stock.***

Our amended and restated articles of incorporation and amended and restated bylaws will contain, and Nevada law contains, provisions that are intended to deter coercive takeover practices and inadequate takeover bids by making such practices or bids unacceptably expensive to the bidder and to encourage prospective acquirers to negotiate with our board of directors rather than to attempt a hostile takeover. These provisions include, among others:

● rules regarding how stockholders may present proposals or nominate directors for election at stockholder meetings;

● the right of our board of directors to issue preferred stock without stockholder approval;

● the ability of our directors, and not stockholders, to fill vacancies on our board of directors;

● the inability of our stockholders to call a special meeting; and

● the inability of our stockholders to act without a meeting of stockholders, from and after such time as Jupiter Wellness beneficially owns shares of our Common Stock representing less than a majority of the voting rights of our Common Stock.

We believe these provisions will protect our stockholders from coercive or otherwise unfair takeover tactics by requiring potential acquirers to negotiate with our board of directors and by providing our board of directors with more time to assess any acquisition proposal. These provisions are not intended to make SRM immune from takeovers. However, these provisions will apply even if the offer may be considered beneficial by some stockholders and could delay or prevent an acquisition that our board of directors determines is not in the best interests of SRM and its stockholders. These provisions may also prevent or discourage attempts to remove and replace incumbent directors.

***Our amended and restated articles of incorporation will***  ***contain exclusive forum provisions that may discourage lawsuits against us and our directors and officers.***

Our amended and restated articles of incorporation will provide that unless the board of directors otherwise determines, the state courts in the State of Nevada or, if no state court located within the State of Nevada has jurisdiction, the federal court for the District of Nevada, will be the sole and exclusive forum for any derivative action or proceeding brought on behalf of SRM, any action asserting a claim of breach of a fiduciary duty owed by any director or officer of SRM to SRM or SRM's stockholders, any action asserting a claim against SRM or any director or officer of SRM arising pursuant to any provision of Nevada Law or SRM's amended and restated articles of incorporation or bylaws, or any action asserting a claim against SRM or any director or officer of SRM governed by the internal affairs doctrine under Nevada law. Our amended and restated articles of incorporation will further provide that the federal district courts of the United States will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act. These exclusive forum provisions may limit the ability of SRM's stockholders to bring a claim in a judicial forum that such stockholders find favorable for disputes with SRM or SRM's directors or officers, which may discourage such lawsuits against SRM and SRM's directors and officers. Alternatively, if a court were to find one or more of these exclusive forum provisions inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings described above, SRM may incur additional costs associated with resolving such matters in other jurisdictions or forums, which could materially and adversely affect SRM's business, financial condition or results of operations.

***Our board of directors will have the ability to issue blank check preferred stock, which may discourage or impede acquisition attempts or other transactions.***

Our board of directors will have the power, subject to applicable law, to issue series of preferred stock that could, depending on the terms of the series, impede the completion of a merger, tender offer or other takeover attempt. For instance, subject to applicable law, a series of preferred stock may impede a business combination by including class voting rights, which would enable the holder or holders of such series to block a proposed transaction. Our board of directors will make any determination to issue shares of preferred stock on its judgment as to our and our stockholders' best interests. Our board of directors, in so acting, could issue shares of preferred stock having terms which could discourage an acquisition attempt or other transaction that some, or a majority, of the stockholders may believe to be in their best interests or in which stockholders would have received a premium for their stock over the then prevailing market price of the stock.

**USE OF PROCEEDS**

We estimate that the net proceeds we will receive from the sale of our Common Stock in this offering, after deducting the underwriting discount and estimated offering expenses payable by us, will be approximately $, based on an assumed public offering price of $ per share, the midpoint of the price range set forth on the cover page of this prospectus, and assuming no exercise of Representative's Warrants. If the underwriters exercise their option to purchase additional shares in full, we estimate our net proceeds will be approximately $, after deducting the underwriting discount and estimated offering expenses payable by us, based on an assumed public offering price of $5.00 per share, the midpoint of the price range set forth on the cover page of this prospectus, and assuming no exercise of Representative's Warrants. We currently intend to use the net proceeds of this offering as follows:

---

| | | |
|:---|:---|:---|
| ● | Development of Licensed Goods: Manufacture and Inventory |  |
| ● | Expansion SRM Products: Design, Manufacture and inventory |  |
| ● | Increased deposits, accounts receivable and inventory |  |
| ● | Marketing , advertising & trade shows |  |
| ● | General & Administrative expenses |  |
| ● | Repayment of note payable to Jupiter Wellness<sup>(1)</sup> |  |
| ● | General working capital |  |
|  |  | $|

---

&nbsp;&nbsp;&nbsp;&nbsp;(1) The note was used for general working
capital, accrues interest at a 6% interest rate, and matures on the earlier of: (i) September 30, 2023 or (ii) the date on which this
offering is consummated .

A $1.00 increase (decrease) in the assumed public offering price would increase (decrease) the net proceeds to us from this offering by $ million, assuming the number of shares to be sold by us in this offering remains the same and after deducting the underwriting discount and estimated offering expenses payable by us. Each increase (decrease) of 100,000 shares in the number of shares offered by us would increase (decrease) the net proceeds to us by approximately $, assuming that the assumed initial public offering price of $ per share, the midpoint of the price range set forth on the cover page of this prospectus, remains the same, and after deducting the underwriting discount and estimated offering expenses payable by us.

**DIVIDEND POLICY**

We have never declared or paid cash dividends to holders of our capital stock. We currently intend to retain future earnings to finance the operation and expansion of our business. We do not anticipate paying any dividends on our Common Stock in the foreseeable future. As a result, you will need to sell your shares of Common Stock to receive any income or realize a return on your investment. You may not be able to sell your shares at or above the price you paid for them.

Any future determination to pay dividends will be at the discretion of our board of directors (the "Board"). If we do commence the payment of dividends in the future, there can be no assurance that we will continue to pay any dividend. Our Board is free to change our dividend policy at any time, including to increase, decrease or eliminate our dividend. The Board will base its decisions on, among other things, general business conditions, our results of operations, financial condition, cash requirements, prospects, contractual, legal and regulatory restrictions regarding dividend payments by our subsidiaries and any other factors the Board may consider relevant. No assurance is given that we will pay any dividends to holders of our capital stock or as to the amount of any such dividends if our Board determines to do so.

**CAPITALIZATION**

The following table sets forth our cash and cash equivalents and capitalization as of September 30, 2022:

● on an actual basis;

● on a pro forma basis to reflect the transactions described in the section titled "*Unaudited Pro Forma Condensed Combined Financial Statements*" other than this offering; and

● on a pro forma as adjusted basis to give effect to the issuance of shares of Common Stock in this offering at an assumed public offering price of $ per share , and the receipt of net proceeds of $ in this offering, assuming no exercise of the underwriters' over-allotment option.

---

| | | | |
|:---|:---|:---|:---|
|  | **As of September 30, 2022** | **As of September 30, 2022** | **As of September 30, 2022** |
|  | **Actual** | **Pro Forma** | **Pro Forma** <br> **as Adjusted (3)**  |
| Cash and cash equivalents | $- | $784081 |  |
| Loans from Jupiter Wellness | 1374 | 1503514 |  |
| Equity: |  |  |  |
| &nbsp;&nbsp;&nbsp; Common Stock, $0.0001 par value (100,000,000 authorized, issued and outstanding: 1,700,000 actual<sup>(1)</sup>, 9,000,000 pro forma<sup>(2)</sup> and pro forma as Adjusted<sup>(3)</sup>) | 170 | 900 |  |
| &nbsp;&nbsp;&nbsp; Additional paid-in capital | - | 201325 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total equity | 170 | 202225 |  |
| Total capitalization | $1544 | $1705739 |  |

---

(1) Actual
 shares of common stock represents the 1,700,000 shares issued to the Founders.

(2) Pro forma shares of common stock of 9,000,000 shares
 represents the 1,700,000 shares issued to the Founders and the 7,300,000 shares to be issued pursuant to the Exchange Agreement.

(3) Pro
 forma as adjusted shares of common stock include shares issued in this offering.

A $1.00 increase (decrease) in the assumed initial public offering price of $ per share shown on the cover page of this prospectus, would increase (decrease) the amount of cash and cash equivalents, additional paid-in capital, total stockholders' equity (deficit) and total capitalization on an as adjusted basis by approximately $, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us, and assuming no exercise of the underwriters' over-allotment option. Similarly, each increase (decrease) of 100,000 shares offered by us would increase (decrease) cash and cash equivalents, total stockholders' equity (deficit) and total capitalization on an as adjusted basis by approximately $, assuming the assumed initial public offering price remains the same after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us, and assuming no exercise of the underwriters' over-allotment option.

**DILUTION**

If you invest in our Common Stock, your ownership interest will be diluted to the extent that the initial public offering price per share of our Common Stock exceeds the tangible book value per share of our Common Stock immediately following this offering.

Pro forma net tangible book value represents our total tangible assets (total assets less intangible assets) less total liabilities, divided by the pro forma number of outstanding shares of Common Stock. As of September 30, 2022, our pro forma net tangible book value was $, or $ per share. After giving effect to the sale and issuance of shares of our Common Stock in this offering at an assumed initial public offering price of $ per share, the midpoint of the price range set forth on the cover page of this prospectus, and after deducting the underwriting discount and estimated offering expenses payable by us, our pro forma as adjusted net tangible book value as of September 30, 2022 would have been $, or $0. per share. This represents an immediate increase in pro forma as adjusted net tangible book value of $0. per share to our existing stockholder, Jupiter Wellness, and an immediate dilution of $ per share to new investors participating in this offering.

The following table illustrates this dilution on a per share basis to new investors:

---

| | |
|:---|:---|
| Assumed initial price to public per share | $|
| Pro forma net tangible book value per share as of September 30, 2022(1) | $|
| Increase per share attributable to new investors(2) | $|
| Pro forma as adjusted net tangible book value per share after this offering(3) | $|
| Dilution per share to new investors | $|

---

(1) Determined
 by dividing the net tangible book value of the contributed tangible assets (total assets less intangible assets) less total liabilities
 by the total number of shares of Common Stock to be 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 September 30, 2022.

(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 $ per share, the midpoint of the price range set forth on the cover
 page of this prospectus, 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.

Each $1.00 increase (decrease) in the assumed initial public offering price of $ per share, the midpoint of the price range set forth on the cover page of this prospectus, would increase (decrease) our pro forma as adjusted net tangible book value by approximately $, or approximately $ per share, and increase (decrease) the dilution per share to investors participating in this offering by approximately $ per share, assuming that the number of shares offered by us remains the same and after deducting the underwriting discount and estimated offering expenses payable by us. We may also increase or decrease the number of shares we are offering. An increase (decrease) of 100,000 in the number of shares offered by us would increase our pro forma as adjusted net tangible book value by approximately $, or $ per share, and decrease the dilution per share to investors participating in this offering by $ per share, assuming that the assumed initial public offering price remains the same, and after deducting the underwriting discount and estimated offering expenses payable by us.

The pro forma as adjusted information discussed above is illustrative only and will adjust based on the actual initial public offering price and other terms of this offering determined at pricing.

If the underwriters exercise their option to purchase additional shares in full, the pro forma as adjusted net tangible book value per share after this offering would be $ per share, the incremental increase in the pro forma net tangible book value per share to our existing stockholder, Jupiter Wellness, would be $ per share and the pro forma dilution to new investors participating in this offering would be $ per share.

The following table summarizes, on the pro forma as adjusted basis described above as of September 30, 2022, the differences between the number of shares of Common Stock purchased from us, the total consideration and the price per share paid by our existing stockholder, Jupiter Wellness, and by investors participating in this offering at an assumed initial public offering price of $ per share, the midpoint of the price range set forth on the cover page of this prospectus, before deducting the underwriting discount and estimated offering expenses payable by us.

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Shares Purchased** | **Shares Purchased** | **Shares Purchased** | **Total Consideration** | **Total Consideration** | **Total Consideration** | **Weighted-<br> Average Price Per** |
|  | **Number** |  | **Percent** | **Amount** |  | **Percent** | **Share** |
| Jupiter Wellness | 7300000 | (1)% |  | $1379237 | (2)% |  | $|
| Founder shares | 1700000% |  |  | 170% |  |  |  |
| Investors participating in this offering |  |  | % |  |  | % |  |
| Total |  |  | 100.0% |  |  | $100.0% | $|

---

(1) Represents
 the total number of shares of Common Stock to be 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.

Each $1.00 increase (decrease) in the assumed initial public offering price of $ per share would increase (decrease) total consideration paid by new investors by approximately $, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the underwriting discount and estimated offering expenses payable by us. We may also increase or decrease the number of shares we are offering. An increase (decrease) of 100,000 in the number of shares offered by us would increase (decrease) total consideration paid by new investors by approximately $, assuming that the assumed initial public offering price remains the same, and after deducting the underwriting discount and estimated offering expenses payable by us. The above discussion and tables are based on our total outstanding shares of Common Stock as of September 30, 2022.

**UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS**

The unaudited pro forma condensed combined financial statements consist of the unaudited pro forma condensed combined statements of income for the nine months ended September 30, 2022 and the year ended December 31, 2021, and the unaudited pro forma condensed combined balance sheet as of September 30, 2022. The unaudited pro forma condensed combined financial statements for the nine months ended September 30, 2022 have been derived by application of pro forma adjustments to our historical combined financial statements included elsewhere in this prospectus.

The unaudited pro forma condensed combined balance sheets reflect the separation and the Exchange Agreement, as described below, as if they occurred on September 30, 2022. The unaudited pro forma condensed combined statements of operations reflect the separation and the Exchange Agreement, as discussed below, as if they occurred on January 1, 2020. The pro forma adjustments, described in the related notes, are based on currently available information and certain estimates and assumptions that management believes are reasonable. These estimates and assumptions are preliminary and have been made solely for purposes of developing these unaudited pro forma condensed combined financial statements. Actual results could differ, perhaps materially, from these estimates and assumptions. Included in the pro forma adjustments are items that are directly related to the separation, factually supportable and, for purposes of the unaudited pro forma condensed combined statements of operations, have a continuing impact.

The unaudited pro forma condensed combined financial statements are provided for illustrative purposes only and are not necessarily indicative of the operating results or financial position that would have occurred had the separation from Jupiter Wellness or this offering been completed on September 30, 2022 for the unaudited pro forma condensed combined balance sheet or on January 1, 2020 for the unaudited pro forma condensed combined statements of operations. The unaudited pro forma condensed combined financial statements should not be relied on as indicative of the historical operating results that we would have achieved or any future operating results or financial position that we will achieve after the completion of this offering.

The unaudited pro forma condensed combined financial statements reflect the impact of the Exchange Agreement and the separation as described in the section titled "*Certain Relationships and Related Party Transactions—Relationship with Jupiter Wellness—Historical Relationship with Jupiter Wellness*".

We have operated as an operating segment of Jupiter Wellness since December 1, 2020. Jupiter Wellness currently provides certain services to us, and costs associated with these functions have not been allocated to us. These include costs related to corporate services, such as executive management, finance and accounting, shared facilities and other services.

Following the completion of this offering, we expect Jupiter Wellness to continue to provide certain of the services described above on a transitional basis for a fee. These services will be provided under the separation agreement described in "*Certain Relationships and Related Party Transactions—Relationship with Jupiter Wellness—Arrangements Between Jupiter Wellness and Our Company*." We generally expect to use the vast majority of these services for less than a year following the completion of this offering, depending on the type of the service and the location at which such service is provided. However, we may agree with Jupiter Wellness to extend the service periods for a limited amount of time (which period will not extend past the first anniversary of the distribution) or may terminate such service periods by providing prior written notice. The unaudited pro forma condensed combined financial statements have not been adjusted for the effects of these transition services. We estimate that the total cost for such services to be in the approximate range of $75,000 to $100,000 annually. Actual results may differ from historical allocations or pro forma estimated management services costs.

**Condensed Balance Sheets**

 

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Nine Months Ended** <br> **September 30,**  | **Nine Months Ended** <br> **September 30,**  | **Years Ended** <br> **December 31,**  | **Years Ended** <br> **December 31,**  |
|  | **2022** | **2021** | **2021** | **2020** |
|  | (Unaudited) | (Unaudited) | | |
| **Assets** |  |  |  |  |
| Cash | $784081 | $237272 | $515373 | $70101 |
| Account receivable | 643902 | 573566 | 661464 | 241511 |
| Prepaid expenses and deposits | 529690 | 369538 | 606858 | 22646 |
| Other current assets | - | - | 27304 | 119916 |
| &nbsp;&nbsp;&nbsp; Total current assets | 1957673 | 1180376 | 1810999 | 454174 |
| Property & Equipment | 30316 | 7381 | 7381 | - |
| &nbsp;&nbsp;&nbsp; Total assets | $1987989 | $1187757 | $1818380 | $454174 |
| **Liabilities and Shareholders' Equity (Deficit)** |  |  |  |  |
| Accounts Payable | $154819 | $435569 | $532898 | $683086 |
| Loans from Jupiter Wellness | 1503514 | 820337 | 1502621 |  |
| Accrued liabilities | 127431 | 73099 | 114156 | 73322 |
| &nbsp;&nbsp;&nbsp; Total current Liabilities | 1785764 | 1329005 | 2149675 | 756408 |
| Common Stock, $0.001 par value, 100,000,000 share authorized, 9,000,000 shares issued and outstanding | 900 | 900 | 900 | 900 |
| Additional Paid-in Capital | 283851 | 283851 | 283851 | 283851 |
| Retaine Earnings (Deficit) | (82526) | (425999) | (616046) | (586985) |
| Total Shareholders' Equity (Deficit) | 202225 | (141248) | (331295) | (302234) |
| &nbsp;&nbsp;&nbsp; Total Liabilities and Shareholders' Equity (Deficit) | $1987989 | $1187757 | $1818380 | $454174 |

---

 

**Combined Statements of Operations** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Nine Months Ended** <br> **September 30,**  | **Nine Months Ended** <br> **September 30,**  | **Years Ended** <br> **December 31,**  | **Years Ended** <br> **December 31,**  |
|  | **2022** | **2021** | **2021** | **2020** |
| **Revenue** |  |  |  |  |
| Sales | $5199807 | $1183550 | $2665827 | $2958199 |
| Cost of Sales | 4195629 | 984483 | 2110395 | 2153407 |
| &nbsp;&nbsp;&nbsp; Gross profit | 1004178 | 199067 | 555432 | 804792 |
| **Operating expense** |  |  |  |  |
| General and administrative expenses | 470673 | 38735 | 585147 | 1391777 |
| &nbsp;&nbsp;&nbsp; Total operating expense | 470673 | 38735 | 585147 | 1391777 |
| **Other income** |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Interest income, net | 15 | 654 | 654 |  |
| **Net operating income (loss)** | $533520 | $160986 | $(29061) | $(586985) |

---

Following the completion of this offering, we will be subject to the reporting requirements of the Exchange Act. We will be required to establish procedures and practices as a stand-alone public company in order to comply with our obligations under the Exchange Act and related rules and regulations. As a result, we will incur additional costs, including internal audit, investor relations, stock administration and regulatory compliance costs. These additional costs may differ from the costs that were historically allocated to us from Jupiter Wellness. To operate as a stand-alone company, we expect to incur costs to replace certain services previously provided by Jupiter Wellness, which may be higher than those reflected in our historical combined financial statements. A component of these costs are legal, accounting related costs and administrative costs which we estimate to be $75,000 to $100,000 in the next 12 months. Actual costs that may have been incurred had we been a stand-alone company depend on a number of factors, including organizational structure and decisions made relating to various areas such as information technology and infrastructure.

The following unaudited pro forma condensed combined financial statements and the related notes should be read in conjunction with the sections titled "*Use of Proceeds*," "*Capitalization*" and "*Management's Discussion and Analysis of Financial Condition and Results of Operations*" and the annual audited combined financial statements, the unaudited interim combined financial statements and the related notes included elsewhere in this prospectus.

**SRM Entertainment, Inc.**

**Unaudited Pro Forma Condensed Combined Balance Sheet**

**September 30, 2022**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **SRM Inc.** | **SRM Limited** | **Pro Forma Adjustments** | **Pro Forma** |
| **ASSETS** |  |  |  |  |
| Current assets: |  |  |  |  |
| Cash and cash equivalents | $- | $784081 | $- | $784081 |
| Accounts receivable, net |  | 643902 |  | 643902 |
| Prepaid expenses and other current assets | - | 529690 | - | 529690 |
| Total current assets |  | 1957673 |  | 1957673 |
| Property and equipment, net | - | 30316 | - | 30316 |
| Total assets | $- | $1987989 | $- | $1987989 |
| **LIABILITIES AND EQUITY** |  |  |  |  |
| Current liabilities: |  |  |  |  |
| Accounts payable | $— | $154819 | $- | $154819 |
| Loans from Jupiter Wellness |  | 1503514 |  | 1503514 |
| Accrued liabilities |  | 127431 | - | 127431 |
| Total liabilities |  | 1785764 | - | 1785764 |
| Equity (1): |  |  |  |  |
| Common Stock, $0.0001 par value, 100,000,000 authorized shares; 9,000,000 issued and outstanding shares on a pro forma basis | 170 |  | 730 | 900 |
| Additional paid-in capital | (170) | (698557) | 982578 | 283851 |
| Retained Earnings (Deficit) | - | 900782 | (983308) | 82526 |
| Total equity | - | 202225 | - | 202225 |
| Total liabilities and equity | $- | $1987989 | $- | $1987989 |

---

 

*See notes to unaudited pro forma condensed combined financial statements.* 

**SRM Entertainment, Inc.** 

**Unaudited Pro Forma Condensed Combined Statement of Operations**

**Nine Months Ended September 30, 2022** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **SRM Inc.** | **SRM Limited** | **Pro Forma** <br> **Adjustments**  | **Pro Forma** |
| Revenue | $- | $5199807 | $- | $5199807 |
| Cost of revenue | - | 4195629 | - | 4195629 |
| Gross profit | - | 1004178 | - | 1004178 |
| Operating expenses | - | (470673) | - | (470673) |
| Other income | - | 15 | - | 15 |
| Net Income | $- | $533520 | $- | $533520 |
| Pro forma net income per share: |  |  |  |  |
| Basic | N/A | N/A | N/A | $0.059 |
| Diluted | N/A | N/A | N/A | $0.059 |
| Pro forma weighted-average shares used to compute net income per share (2): |  |  |  |  |
| Basic | N/A | N/A | N/A | 9000000 |
| Diluted | N/A | N/A | N/A | 9000000 |

---

*See notes to unaudited pro forma condensed combined financial statements.* 

**SRM Entertainment, Inc.** 

**Unaudited Pro Forma Condensed Combined Statement of Operations**

**Year Ended December 31, 2021**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **SRM Inc.** | **SRM Limited** | **Pro Forma Adjustments** | **Pro Forma** |
| Revenue | $- | $2665827 | $- | $2665827 |
| Cost of revenue | - | 2110395 | - | 2110395 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Gross profit | - | 555432 | - | 555432 |
| &nbsp;&nbsp;&nbsp; Total operating expenses |  | (585147) |  | (585147) |
| &nbsp;&nbsp;&nbsp; Other Income | - | 654 | - | 654 |
| Net loss | $- | $(29061) | $- | $(29061) |
| Pro forma net loss per share: |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Basic | N/A | N/A | N/A | $(0.003) |
| &nbsp;&nbsp;&nbsp; Diluted | N/A | N/A | N/A | $(0.003) |
| Pro forma weighted-average shares used to compute net income per share: |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Basic | N/A | N/A | N/A | 9000000 |
| &nbsp;&nbsp;&nbsp; Diluted | N/A | N/A | N/A | 9000000 |

---

*See notes to unaudited pro forma condensed combined financial statements.* 

 **Notes to Unaudited Pro Forma Condensed Combined Financial Statements**

**Adjustments to the unaudited pro forma condensed combined balance sheet** 

&nbsp;&nbsp;&nbsp;&nbsp;(1) On December 9, 2022, we entered into the Exchange Agreement with Jupiter Wellness. Pursuant to the Exchange Agreement, we will
issue to Jupiter Wellness 7,300,000 shares of our Common Stock (representing 81.1% of our outstanding Common Stock) in exchange for 2
ordinary shares of SRM Limited (representing all of the issued and outstanding 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 7,300,000 shares to be issued to Jupiter Wellness pursuant to the Exchange
Agreement.

**MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS**

*You should read the following discussion and analysis together with the section titled "Selected Combined Financial Data" and our combined financial statements and related notes included elsewhere in this prospectus. Among other things, those historical financial statements include more detailed information regarding the basis of presentation for the financial data included in the following discussion. This discussion contains forward-looking statements about our business, operations and industry that involve risks and uncertainties, such as statements regarding our plans, objectives, expectations and intentions. Our future results and financial condition may differ materially from those we currently anticipate as a result of the factors we describe under the sections titled "Cautionary Statement Regarding Forward-Looking Statements" and "Risk Factors."* 

**Overview** 

The combined pro forma financial statements include SRM Limited and the Company (collectively "SRM"). SRM supplies the amusement park industry with exclusive products that are intended to be sold in amusement parks. For over 30 years, SRM has developed, manufactured and supplied the amusement park industry with exclusive products that are often only available to consumers inside the relevant amusement park. SRM principally produces battery-operated products for theme parks and entertainment venues such as Disney Parks and Resorts, Disney Stores, Universal Resorts, SeaWorld, Sesame Place, Busch Gardens, Merlin Entertainment and Madison Square Garden. SRM has developed products in conjunction with suppliers of products for core licenses such as Harry Potter, Frozen, Marvel and Star Wars. SRM develops and distributes toys, plush and hydration products to retailers worldwide. SRM develops product strategies in order to bring product concepts to reality.

We both supply and have relationships with the amusement park industry and is a trusted toy and souvenir designer and developer, selling into the world's largest theme parks and entertainment venues. For over 30 years, SRM has developed, manufactured and supplied the entertainment and amusement park industry with exclusive products such as toys, light up, plush, fans and much more. These exclusive products are often only available to consumers inside the relevant amusement park, entertainment venues, and theme hotels in the United States, China, Japan, and throughout the worldwide theme park industry. Theme parks during COVID-19 experienced significant declines in attendance, which the Company believes negatively impacted the Company sales. While these limitations have eased, we are unable to predict when such limitations will be entirely resolved.

**Our Relationship with Jupiter Wellness** 

Following the completion of this offering, we expect Jupiter Wellness to continue to provide certain of the services described above on a transitional basis for a fee. These services will be provided under the separation agreement described in "*Certain Relationships and Related Party Transactions—Relationship with Jupiter Wellness—Arrangements Between Jupiter Wellness and Our Company*." We generally expect to use the vast majority of these services for less than a year following the completion of this offering, depending on the type of the service and the location at which such service is provided. However, we may agree with Jupiter Wellness to extend the service periods for a limited amount of time (which period will not extend past the first anniversary of the distribution) or may terminate such service periods by providing prior written notice.

Following the completion of this offering, we will be subject to the reporting requirements of the Exchange Act. We will be required to establish procedures and practices as a stand-alone public company in order to comply with our obligations under the Exchange Act and related rules and regulations. As a result, we will incur additional costs, including internal audit, investor relations, stock administration and regulatory compliance costs. These additional costs may differ from the costs that were historically allocated to us from Jupiter Wellness. To operate as a stand-alone company, we expect to incur costs to replace certain services previously provided by Jupiter Wellness, which may be higher than those reflected in our historical combined financial statements.

**Financial Statement Presentation**

SRM Entertainment, Inc., the Registrant, had assets and liabilities and no operations prior to September 30, 2022. As such the financial statements presented herein represent the financial statements and results of operations of SRM Limited.

**Components of Our Operating Results** 

***Revenue***

 ****

SRM has relationships with and supplies the amusement park industry with exclusive products such as toys, lights, fans and other items that are sold in amusement parks. SRM has developed, manufactured and supplied the amusement park industry with exclusive products that are often only available to consumers inside the relevant amusement park, entertainment venues and theme throughout the worldwide theme park industry. SRM has developed unique products in conjunction with suppliers of products for core licensed items for major well-known brands, themes, characters and movies.

Our revenue can vary based on a number of factors, including changes in average selling prices, end-user customer rebates and other channel sales incentives, uncertainties surrounding demand for our products and allowances for estimated sales returns, including future pricing and/or potential discounts as a result of competition or in response to fluctuations of the U.S. dollar in our international markets, and related production level variances; changes in technology; and adoption of any future paid subscription service offerings.

We continue to experience robust demand across all regions for our SRM products. We believe this demand will lead to an increase in absolute dollars in revenues as our customer base continues to grow. Furthermore, we expect that as we introduce more features to our product lines, we expect to increase revenue.

**Cost of Revenue** 

Cost of revenue consists of both product costs and costs of service. Product costs primarily consist of: the cost of finished products from our third-party manufacturers; overhead costs, including purchasing, product planning, inventory control, warehousing and distribution logistics, third-party software licensing fees, inbound freight, warranty costs associated with returned goods, royalties to third parties; and amortization expense of certain acquired intangibles. Cost of service consists of cost attributable to sales staff and independent sales staff. In addition, cost of service also consists of the provision and maintenance of our cloud-based platform, including storage, and security and computing.

Our cost of revenue as a percentage of revenue can vary based upon a number of factors, including those that may affect our revenue set forth above and factors that may affect our cost of revenue, including, without limitation: fluctuation in foreign exchange rates and changes in our cost of goods sold due to fluctuations in prices paid for components, net of vendor rebates, warranty and overhead costs, inbound freight and duty product conversion costs, and amortization of acquired intangibles. We outsource our manufacturing, warehousing and distribution logistics. We believe this outsourcing strategy allows us to better manage our product and services costs and gross margin.

We expect that revenue derived from future subscription service plans will increase as a percentage of our revenue in the future, which may have a positive impact on our gross margin. From time to time, however, we may experience fluctuations in our gross margin as a result of the factors discussed above.

 ****

 ****

***General and Administrative***

General and administrative expense consists primarily of personnel-related expense for certain executives, finance and accounting, human resources, information technology, professional fees, facility overhead, sales and marketing and other general corporate expense. We expect our general and administrative expense to increase in absolute dollars primarily as a result of the increased costs associated with being a stand-alone public company. However, we also expect our general and administrative expense to fluctuate as a percentage of our revenue in future periods based on fluctuations in our revenue and the timing of such expense.

***Other Income (Expense), Net***

Other income (expense), net primarily represents gains and losses on transactions denominated in foreign currencies and other miscellaneous income and expense.

***Income Taxes***

Our business has historically been included in Jupiter Wellness's consolidated U.S. federal income tax return. We have adopted the separate return approach for the purpose of the SRM financial statements. The income tax provisions and related deferred tax assets and liabilities that have been reflected in our historical combined financial statements have been estimated as if we were a separate taxpayer. The historic operations of the SRM business reflect a separate return approach for each jurisdiction in which SRM had presence and Jupiter Wellness filed a tax return. We record a provision for income taxes for the anticipated tax consequences of the reported results of operations using the asset and liability method. Under this method, we recognize deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial reporting and tax basis of assets and liabilities, as well as for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using the tax rates that are expected to apply to taxable income for the years in which those tax assets and liabilities are expected to be realized or settled. We record a valuation allowance to reduce our deferred tax assets to the net amount that we believe is more likely than not to be realized. To effect the separation of the SRM business from Jupiter Wellness's other businesses, there will be changes to the organizational structure of the business, which will not impact our historical financial statements.

We recognize tax benefits from uncertain tax positions only if we believe that it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. As we expand internationally, we will face increased complexity in determining the appropriate tax jurisdictions for revenue and expense items which may differ from that of Jupiter Wellness. Our policy is to adjust these reserves when facts and circumstances change, such as the closing of a tax audit or refinement of an estimate. To the extent that the final tax outcome of these matters is different than the amounts recorded, such differences will affect the provision for income taxes in the period in which such determination is made and could have a material impact on our financial condition and operating results. The provision for income taxes includes the effects of any accruals that we believe are appropriate, as well as the related net interest and penalties.

On December 22, 2017, the Tax Act was signed into law, making significant changes to the Code. Changes include, but are not limited to, a corporate tax rate decrease from 35% to 21% effective for tax years beginning after December 31, 2017, the transition of U.S international taxation from a worldwide tax system to a territorial system and a one-time transition tax on the mandatory deemed repatriation of cumulative foreign earnings. The recently enacted Tax Act significantly changed how the United States taxes corporations. At this time, significant judgment is required in implementing the law due to the lack of sufficient interpretive guidance from the U.S. or state regulatory bodies and standards settings bodies. Computations required are complex and data-intensive. The amounts reported as of December 31, 2021 are provisional based on the uncertainty discussed above. As we complete our analysis and prepare necessary data, and interpret any additional guidance, we will adjust our calculations and provisional amounts that we have recorded in our tax provision. Any such adjustments may materially impact our provision for income taxes in our financial statements.

***Fiscal Periods***

Our fiscal year begins on January 1 of the year stated and ends on December 31 of the same year. We report our results on a calendar quarter basis.

**Comparison of the Nine Months Ended September 30, 2022 and 2021**

---

| | | |
|:---|:---|:---|
|  | **Nine Months Ended** <br> **September 30,**  | **Nine Months Ended** <br> **September 30,**  |
|  | **2022** | **2021** |
| **Revenue** |  |  |
| Sales | $5199807 | $1183550 |
| Cost of Sales | 4195629 | 984483 |
| &nbsp;&nbsp;&nbsp; Gross profit | 1004178 | 199067 |
| **Operating expense** |  |  |
| General and administrative expenses | 470673 | 38735 |
| &nbsp;&nbsp;&nbsp; Total operating expense | 470673 | 38735 |
| **Other income** |  |  |
| &nbsp;&nbsp;&nbsp; Interest income, net | 15 | 654 |
| **Net operating income (loss)** | $553520 | $160986 |

---

**Revenues** 

Revenue for the nine months ended September 30, 2022 and 2021 were $5,199,807 and $1,183,550, respectively, an increase of $4,016,257 or 339% compared to the prior year period. The increase was primarily driven by the reopening of the theme parks which had been shut down during the Covid-19 pandemic.

**Cost of Revenue and Gross Margin** 

The cost of goods sold for the nine months ended September 30, 2022 and 2021 were $4,195,629 and $984,483, respectively representing a 19% and 17% gross margin respectively.

Cost of revenue increased for the nine months ended September 30, 2022 due to revenue growth compared to the prior year period, while achieving a slightly higher gross margin.

***General and Administrative***

General and administrative expense for the nine months ended September 30, 2022 and 2021 were $470,673 and $38,735, respectively. The decrease is due to COVID-19 related shut downs and limited activity during the period.

 **Comparison of the Fiscal Years Ended December 31, 2021 and 2020** 

---

| | | |
|:---|:---|:---|
|  | **Years Ended** <br> **December 31,**  | **Years Ended** <br> **December 31,**  |
|  | **2021** | **2020** |
| **Revenue** |  |  |
| Sales | $2665827 | $2958199 |
| Cost of Sales | 2110395 | 2153407 |
| &nbsp;&nbsp;&nbsp; Gross profit | 555432 | 804792 |
| **Operating expense** |  |  |
| General and administrative expenses | 585147 | 1391777 |
| &nbsp;&nbsp;&nbsp; Total operating expense | 585147 | 1391777 |
| **Other income** |  |  |
| &nbsp;&nbsp;&nbsp; Interest income, net | 654 |  |
| **Net operating income (loss)** | $(29061) | $(586985) |

---

**Revenue** 

Revenue for the years ended December 31, 2021 and 2020 were $2,665,827 and $2,958,199, respectively. Revenue decreased 10% for the year ended December 31, 2021 compared to the prior year. The decrease is due to the Covid-19 pandemic beginning in later portion of 2020 continuing through 2021.

**Cost of Revenue and Gross Margin** 

Cost of revenue for the years ended December 31, 2021 and 2020 were $2,110,395 and $2,153,407, representing a 21% and 27% gross margin, respectively. Decreases for the year ended December 31, 2021 were due primarily to the revenue decrease compared to the prior year. Gross margin were slightly lower in 2021 due to factory start-up costs related to their closure from the Covid-19 pandemic and continued into 2022.

 ***General and Administrative***

General and administrative expense for the fiscal years ended December 31, 2021 and 2020 were $585,147 and $1,391,777, respectively. The decrease is primarily due to an overhead charge from the former owner prior to the acquisition of SRM Limited.

**Liquidity and Capital Resources** 

Historically, our operations have participated in cash management and funding arrangements managed by Jupiter Wellness. Cash flows related to financing activities primarily reflect changes in the balance of the note payable to Jupiter. Other than those that are in SRM designated legal entities, Jupiter Wellness's cash has not been assigned to us for any of the periods presented because those cash balances are not directly attributable to us. Cash and cash equivalents presented in the combined balance sheets represent amounts pertaining to designated SRM legal entities only. Our cash and cash equivalents balance increased from $70,101 as of December 31, 2020 to $515,373 as of December 31, 2021 and from $237,272 as of September 30, 2021 to $784,081 as of September 30, 2022. Cash generated from operations was $293,393 for the nine months ended September 30, 2022. Cash provided from operations was $452,653 for the year ended December 31, 2021 compared to cash used in operations of $108,384 for the year ended December 31, 2020 due primarily to decreased overhead and general and administrative costs. Currently, we are dependent on Jupiter Wellness for our continued support to fund our operations, without which we may need to curtail our operations. In addition, Jupiter Wellness currently intends to use reasonable efforts to provide us such funding as may be necessary to permit us to fund our operations while we are a wholly owned subsidiary of Jupiter Wellness. This support is expected to terminate on the earliest of: (i) the time immediately prior to the completion of this offering and (ii) the time immediately prior to the completion of a distribution of shares of our Common Stock held by Jupiter Wellness to its stockholders.

During the year ended December 31, 2021, Jupiter Wellness advanced $1,502,621 to cover certain existing debt and operations of SRM. During the nine months ended September 30, 2022 cash flow from operations were sufficient to cover operations and increased cash balance by $268,708. At September 30, 2022, the account balance of the loan from Jupiter Wellness totaled $1,503,514 which will be repaid from the proceeds of the sale of our Common Stock in this offering as set forth below.

Following the Exchange Agreement and separation from Jupiter Wellness, our capital structure and sources of liquidity will change significantly from our historical capital structure. Subsequent to the separation, we will no longer participate in cash management and funding arrangements managed by Jupiter Wellness. Following the separation, we expect to use cash flows generated from operations, together with our estimated net proceeds of $6.1 million from the sale of our Common Stock in this offering (refer to "*Use of Proceeds*" for the expected use of such net proceeds), as our primary sources of liquidity. Based on our current plans and market conditions, we believe that such sources of liquidity will be sufficient to satisfy our anticipated cash requirements for at least the next 12 months. However, we may require or desire additional funds to support our operating expenses and capital requirements or for other purposes, such as acquisitions, and may seek to raise such additional funds through public or private equity or debt financing or from other sources. We cannot assure you that additional financing will be available at all or that, if available, such financing would be obtainable on terms favorable to us and would not be dilutive. Our future liquidity and cash requirements will depend on numerous factors, including the introduction of new products and potential acquisitions of related businesses.

 ***Commitments***

  ****

There are no fixed forward commitments for lease expense, license fees, capital expenditures or other except for employment obligations which total approximately $585,000 annually.

 ****

***Off-Balance Sheet Arrangements***

We did not have, during the periods presented, any off-balance sheet financing arrangements or any relationships with unconsolidated entities or financial partnerships, including entities sometimes referred to as structured finance or special purpose entities that were established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

***Cash Flow***

The following table presents our cash flows for the periods presented.

**Condensed Statement of Cash Flow**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Nine Months Ended<br> September 30,** | **Nine Months Ended<br> September 30,** | **Years Ended** <br> **December 31,** | **Years Ended** <br> **December 31,** |
|  | **2022** | **2021** | **2021** | **2020** |
| Net cash flows provided by (used in) operating activities | $293393 | $174552 | $452653 | $(108384) |
| Net cash used in investing activities | (24685) | (7381) | (7381) |  |
| Net cash flows provided by (used in) financing activities | - | - | - | - |
| &nbsp;&nbsp;&nbsp;Increase (decrease) in cash | $268708 | $167171 | $445272 | $(108384) |

---

Net cash provided by operating activities was $293,393 for the nine months ended September 30, 2022 due primarily to increase in accounts related to the increase in sales which was partially offset by decrease in prepaid deposits and increase in payables. There were $24,685 in purchases of fixed assets in the nine months ending September 30, 2022.

Net cash provided from operating activities was $452,653 for the year ended December 31, 2021, due primarily to increased working capital demands and related increases in debt to Jupiter Wellness offset by decreases in prepaid expenses and deposits, accounts receivable and accounts payable. Net cash used in operating activities was $108,384 for the year ended December 31, 2020, due primarily to net losses of $586,985 primarily offset by collections of accounts receivable.

**Critical Accounting Policies and Estimates** 

Our management's discussion and analysis of our financial condition and results of operations is based on our unaudited financial statements for the nine months ended September 30, 2022 and 2021 and audited financial statements for the years ended December 31, 2021 and 2020, which have been prepared in accordance with United States generally accepted accounting principles, or U.S. GAAP, and the rules and regulations of the Securities and Exchange Commission. The preparation of the financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements as well as the reported revenue generated, and expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions and any such differences may be material. We believe that the accounting policies discussed below are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management's judgments and estimates.

The financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("US GAAP") and are expressed in United States Dollars. Significant accounting policies are summarized below:

***Revenue Recognition***

 ****

The Company generates its revenue from the sale of its products directly to the end user or distributor (collectively the "customer").

The Company recognizes revenues by applying the following steps in accordance with FASB Accounting Standards Codification 606 "Revenue from Contracts with Customers" ("ASC 606"). Under ASC 606, revenues are recognized when control of the promised goods or services are transferred to a customer, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services. The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements:

● identify the contract with a customer;

● identify the performance obligations in the contract;

● determine the transaction price;

● allocate the transaction price to performance obligations in the contract; and

● recognize revenue as the performance obligation is satisfied.

The Company's performance obligations are satisfied when goods or products are shipped on an FOB shipping point basis as title passes when shipped. Our product is generally paid in advance of shipment or standard net 30 days and we offer no specific right of return, refund or warranty related to our products except for cases of defective products of which there have been none to date.

 ****

***Allowances for Doubtful Accounts***

We maintain an allowance for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments. We regularly perform credit evaluations of our customers' financial condition and consider factors, such as historical experience, credit quality, age of the accounts receivable balances and geographic or country-specific risks and economic conditions that may affect a customer's ability to pay. We review the allowance for doubtful accounts quarterly and adjust it if necessary based on our assessments of our customers' ability to pay. If the financial condition of our customers should deteriorate or if actual defaults are higher than our historical experience, additional allowances may be required, which could have an adverse impact on operating expenses.

***Valuation of Inventory***

Inventories are stated at the lower of cost or market. The Company periodically reviews the value of items in inventory and provides write-downs or write-offs of inventory based on its assessment of market conditions. Write-downs and write-offs are charged to cost of goods sold. Inventory is based upon the average cost method of accounting.

***Use of Estimates***

 ****

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.

***Impairment of Long-Lived Assets***

 ****

We evaluate long-lived assets (including intangible assets) for impairment whenever events or changes in circumstances indicate that the carrying amount of a long-lived asset may not be recoverable. An asset is considered impaired if its carrying amount exceeds the undiscounted future net cash flow the asset is expected to generate.

***Investments Held-to-Maturity***

 ****

Investments that the Company's management has the "positive intent and ability" to hold through maturity are classified and accounted for as hold-to-maturity investments ("HTM"). HTM investments are carried at amortized cost in the financial statements. For investments classified as HTM, no unrealized gains and losses will be recognized in financial statements.

***Cash***

 ****

We consider all short-term investments with a maturity of three months or less when purchased to be cash and equivalents for purposes of the statement of cash flows. There were no cash equivalents as December 31, 2021 and 2020.

***Foreign Currency Translation***

 ****

Assets and liabilities in foreign currencies are translated using the exchange rate at the balance sheet date, while revenue and expense accounts are translated at the average exchange rates prevailing during the period. Equity accounts are translated at historical exchange rates. Gains and losses from foreign currency transactions and translation for the years ended December 31, 2021 and 2010 and the cumulative translation gains and losses as of December 31, 2021 and 2020 were not material.

***Accounts Receivable***

 ****

Accounts receivable are generated from sales of the Company's products. The Company provides an allowance for doubtful collections, which is based upon a review of outstanding receivables, historical collection information, and existing economic conditions. As of December 31, 2020 the Company recorded an allowance of $118,761 against accounts receivable acquired in connection with the acquisition of SRM Entertainment and as of December 31, 2021, the Company had recognized no additional allowance for doubtful collections.

**Income Taxes**

We account for income taxes under ASC 740 Income Taxes ("ASC 740"). ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statement and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized.

ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise's financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. ASC 740 also provides guidance on recognition, classification, interest and penalties, accounting in interim period, disclosure and transition. We were incorporated on April 22, 2022, and as such, the Company has not yet filed any tax returns.

**Recent Accounting Pronouncements** 

For a complete description of recent accounting pronouncements, including the expected dates of adoption and estimated effects on financial condition and results of operations, refer to Note 1, *The Company, Basis of Presentation and Summary of Significant Accounting Policies*, in Notes to Financial Statements.

**Emerging Growth Company Status** 

As an "emerging growth company," under the JOBS Act, we are allowed to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies, unless we otherwise irrevocably elect not to avail ourselves of this exemption. While we have not made such an irrevocable election, we have not delayed the adoption of any applicable accounting standards.

**Quantitative and Qualitative Disclosures About Market Risk** 

***Foreign Currency Translation***

Assets and liabilities in foreign currencies are translated using the exchange rate at the balance sheet date, while revenue and expense accounts are translated at the average exchange rates prevailing during the period. Equity accounts are translated at historical exchange rates. Gains and losses from foreign currency transactions and translation for the years ended December 31, 2021 and 2020 and the cumulative translation gains and losses as of December 31, 2021 and 2020 were not material.

**BUSINESS** 

**SRM Entertainment, Inc.:** 

SRM is a trusted toy and souvenir designer and developer, selling into the world's largest theme parks and entertainment venues.

Our business is built on the principle that almost everyone is a fan of something and the evolution of pop culture is leading to increasing opportunities for fan loyalty. We create whimsical, fun and unique products that enable fans to express their affinity for their favorite "something"—whether it is a movie, TV show, favorite celebrity, or favorite restaurant. We infuse our distinct designs and aesthetic sensibility into a wide variety of product categories, including figures, plush, accessories, apparel, and homewares. With our unique style, expertise in pop culture, broad product distribution and highly accessible price points, we have developed a passionate following for our products that has underpinned our growth. We believe we sit at the nexus of pop culture—content providers value us for our broad network of retail customers, retailers value us for our portfolio of pop culture products and pop culture insights, and consumers value us for our distinct, stylized products and the content they represent.

Pop culture pervades modern life and almost everyone is a fan of something. Today, more quality content is available and technology innovation has made content accessible anytime, anywhere. As a result, the breadth and depth of pop culture fandom resembles, and in many cases exceeds, the type of fandom previously associated only with sports. Everyday interactions at home, work or with friends are increasingly influenced by pop culture.

We have invested strategically in our relationships with key constituents in pop culture. Content providers value us for our broad network of retail customers and retailers value us for our pop culture products, pop culture insights and ability to drive consumer traffic. Consumers, who value us for our distinct, stylized products, remain at the center of everything we do.

**Content Providers**: We have licensing relationships with many established content providers, and our products appear in venues such as Walt Disney Parks and Resorts, Universal Studios, SeaWorld, Six Flags, Great Wolf Lodge, Dollywood and Merlin Entertainment. We currently have licenses with Smurfs and Zoonicorn LLC, from which we can create multiple products based on each character within. Content providers trust us to create unique, stylized extensions of their intellectual property that extend the relevance of their content with consumers through ongoing engagement, helping to maximize the lifetime value of their content.

**Retail Channels**: We can provide our retail customers a customized product mix designed to appeal to their particular customer bases. Theme parks and the entertainment industry recognize the opportunity presented by the demand for pop culture products and are continuing to dedicate space to our products and the pop culture category. We believe meaningful traffic to our products will continue because our products have their own built-in fan base, are refreshed regularly creating a "treasure hunt" shopping experience for consumers and are often supplemented with exclusive products that are at the forefront of pop culture.

**Consumers**: Fans are increasingly looking for ways to express their affinity for and engage with their favorite pop culture content. Over time, many of our consumers evolve from occasional buyers to more frequent purchasers, whom we categorize as enthusiasts or collectors. We create products to appeal to a broad array of fans across consumer demographic groups—men, women, boys and girls—not a single, narrow demographic. We currently offer an array of products that sell across several categories. Our products are generally priced between $2.50 and $50.00, which allows our diverse consumer base to express their fandom frequently and impulsively. We continue to introduce innovative products designed to facilitate fan engagement at different price points and styles.

We have developed a nimble and low-fixed cost production model. The strength of our management team and relationships with content providers, retailers and third-party manufacturers allows us to move from product concept to a new product tactfully. As a result, we can dynamically manage our business to balance current content releases and pop culture trends with timeless content based on classic movies, such as Harry Potter or Star Wars. This has allowed us to deliver significant growth while lessening our dependence on individual content releases.

**Our History** 

SRM Limited was incorporated in Hong Kong on January 14, 1981. Jupiter Wellness acquired SRM Limited in November 2020. In April 2022, the Company was formed to acquire SRM Limited. SRM supplies the amusement park industry with exclusive products that are intended to be sold in amusement parks. For over 30 years, SRM has developed, manufactured and supplied the amusement park industry with exclusive products that are often only available to consumers inside the relevant amusement park. SRM principally produces battery-operated products for theme parks and entertainment venues such as Disney Parks and Resorts, Disney Stores, Universal Resorts, SeaWorld, Sesame Place, Busch Gardens, Merlin Entertainment and Madison Square Garden. SRM has developed products in conjunction with suppliers of products for core licenses such as Harry Potter, Frozen, Marvel and Star Wars. SRM develops and distributes toys, plush and hydration products to retailers worldwide. SRM develops product strategies in order to bring product concepts to reality.

The pop culture industry is being driven by several major forces. Technology advances have made it easier to access, consume and engage with content. Content providers have produced more quality content to drive fan engagement, often with a focus on franchise driven products. Dedicated, active and enduring fan bases have emerged across the pop culture landscape. These fans seek out opportunities to interact with their favorite content and with like-minded fans through social media and content-centric experiences. At the same time, social norms have shifted, making fandom culturally accepted and mainstream. These trends reinforce one another leading to a substantial increase in pop culture fandom and to significant growth in the industry.

We both supply and have relationships with the amusement park industry. We sell exclusive products such as toys, light up, plush, fans and so much more. These exclusive products are often only available to consumers inside the relevant amusement park, entertainment venues, and theme hotels in the United States, China, Japan, and throughout the worldwide theme park industry.

**Our Market Opportunity**

We believe we are well-positioned to extend our current market leadership to the broader retail market as we continue to launch new product lines and services.

**How We Plan to Grow** 

Our goal is to continue to develop innovative products and concepts alongside well-known brands and licensed trademarks. The key elements of our growth strategy to achieve this goal is to enter expanding categories of product, and develop and grow the licensed Sip with Me line of hydration products to be designed and sold into retail outlets, theme parks worldwide.

We are positioning SRM to capture new market share in the global toy market. Our branded products are designed to educate through interactive content fostering, social and emotional growth, health and wellness, and love and respect for the environment and all creatures. We sell toys for franchises such as the Wizarding World of Harry Potter, Star Wars, Avatar, Men in Black, Transformers, Despicable Me, Nintendo, Sesame Street, and Toy Story. In addition, we are currently developing new product lines for Smurfs and Zoonicorn franchises. The market for our products grew 8.5% YOY in 2021.

Our core business opportunities and research and development efforts are concentrated on continuing to sell and develop innovative products for theme parks and current customers, adding licensed character hydration and dinnerware from Smurfs and Zoonicorn set to current assortments.

 ***Long-term Growth Strategy***. We plan to further develop the Sip with Me product assortment by adding stainless water bottles, plush back packs and journals and notepads in the second quarter of 2023; melamine in the first quarter of 2023; and light up drinkware and vinyl figures in the fourth quarter of 2023 or the first quarter of 2024. All of the aforementioned products have been designed and manufactured, except plush back packs which have completed the design phase and scheduled for production and delivery in the second quarter of 2023.

We have signed license agreements with Smurfs and Zoonicorn for our Sip with Me product assortments to sell in retail markets beginning in 2023. Our marketing goals include animal character products creating a "collect all" mentality and distributing Sip with Me and other product assortments to gift representative groups nationally.

Recent annual revenues were $2,665,827 in 2021 and $2,958,199 in 2020. Sales for the nine month periods ended September 30, 2022 and 2021 were $5,199,807 and $1,183,550 respectively. Sales were negatively impacted by the pandemic closures of theme parks in 2020 and 2021 and have improved in 2022. We plan to sell our proprietary brands and designs into new channels: mass market, fast food chains, convenience stores, niche venues and museums, and restaurants.

We plan to grow brand awareness for SRM products through direct and indirect marketing and form a lasting relationship with our end-users throughout their journey from product discovery through the entire lifecycle of ownership. We also plan on developing new sales channels, in addition to our current retail footprint, to address commercial vertical opportunities beyond the theme-park and entertainment industry.

**Industry Overview**

We believe the two largest United States toy companies, Mattel and Hasbro, collectively hold a dominant share of the domestic non-video toy market. In addition, hundreds of smaller companies compete in the design and development of new toys, the procurement of character and product licenses, and the improvement and expansion of previously introduced products and product lines.

Over the past few years, the toy industry has experienced substantial consolidation among both toy companies and toy retailers. We believe that the ongoing consolidation of toy companies provides us with increased growth opportunities due to retailers' desire to not be entirely dependent upon a few dominant toy companies. Retailer concentration also enables us to ship products, manage account relationships and track point of sale information more effectively and efficiently.

**Products**

Our current products principally fall within the following product categories:

● **Plush Products.** Our plush products are soft-sculpt figures that blend licensed content with our distinctive designs to create an array of product lines, intended for consumers of all ages.

● **Accessories.** Our accessories products mix pop culture fandom with functionality, and feature everything from notebooks to lanyards and keychains, all based on our unique designs.

● **Other.** We also produce products in certain other categories, primarily homewares (including drinkware, party lights and other home accessories).

**Product Development** 

SRM's strategic direction centers around product design and development centered on the commercialization and marketability of innovative ideas created through SRM's passion for imagining concepts for our licensors and brand partners.

SRM's objective is to optimize its marketability, function, value and appearance for the benefit of the consumer end user. From concept and prototyping, through design-for-manufacture, special attention is paid to a product's utility, ease of use, lowest cost bill of materials, and how it "communicates" its features and benefits through design. The combined experience and expertise of the Company's team spans many high-demand categories including hydration, and toys.

SRM's product and development team is led by Debbie McDaniel-Hand, Rebecca Mercado, and Taft Flittner, who have over thirty years of combined industry experience.

We are currently researching new factory opportunities for additional flexibility in production and piece types, along with researching opportunities in fulfillment warehouses to advance generic product distribution.

**Manufacturing and Logistics** 

We utilize third-party manufacturers in China, which we chose on the basis of performance, capacity, capability and price. The use of third-party manufacturers enables us to avoid incurring fixed manufacturing costs, while maximizing flexibility, capacity and capability. Though our manufacturing base has diversified over time as we have grown our sales and expanded our product offerings, we have historically concentrated production with a small number of manufacturers and factories as part of a continuing effort to monitor quality, reduce manufacturing costs and ensure speed to market. Products developed by SRM are shipped directly to the theme park without warehousing at the Company's facilities. Our employees, Rebecca Mercado and Debbie McDaniel-Hand are responsible for our product and packaging design.

We base our production schedules for products on our internal forecasts, taking into account historical trends of similar products and properties, current market information and communications with customers, and purchase orders. The accuracy of our forecasts is affected by consumer acceptance of our products, which is based on the strength of the underlying licensed property, the strength of competing products, the marketing strategies of retailers, changes in buying patterns of both our retail customers and our consumers, and overall economic conditions. Unexpected changes in these factors could result in a lack of product availability or excess inventory of a particular product.

Although we do not conduct the day-to-day manufacturing of our products, we seek to ensure quality control by actively reviewing the production process and testing the products produced by our manufacturers. We utilize third-party quality control inspectors who rotate among our manufacturers' factories to engineer the quality control process prior to production, provide quality assurance oversight during production and sample finished goods to validate the quality control process.

In addition to quality control testing, safety testing of our products is done by independent third-party testing laboratories. Safety testing is designed to meet or exceed regulations imposed by federal and state governments, as well as applicable international governmental authorities, our retail partners and content providers. In addition, independent laboratories engaged by some of our larger customers and content providers test certain of our products as well as the factories in which they are produced.

*For more information, see* "*Risk Factors—Risks Related to Our Business—Our use of third-party manufacturers to produce our products presents risks to our business.*"

**Sales**

We sell our products to a diverse network of customers throughout the world. We sell the majority of our products in the United States to specialty theme parks and retailers in the entertainment industry. Similarly, our target market for international sales is themed attractions. However, because of our products success in specialty theme parks and retailers in the United States, we seek to expand our footprint domestically, rather than target additional international sales and markets. We plan to target new or sales channels, including mass market, fast food chains, convenience stores, niche venues and museums, and restaurants. We maintain a full-time sales staff, many of whom make on-site visits to our customers for the purpose of showing products and soliciting orders. Many of our retail customers view us as experts in toy design, in some cases, we help manage their growing pop culture category within our featured theme and amusement park clients, providing a curated experience by catering to their particular customer bases. For example, we can curate products based on popular movies and characters. We believe this creates a mutually beneficial relationship between us and our retail customers by providing us with an opportunity to enhance the productivity of the pop culture category within their locations, which may also result in expanded shelf space for our products.

In addition to our 40 individual sales representatives, we also have 10 sales representative groups we retain to sell and promote our products. The scope of our relationship with each sales representative group is governed by individual sales representative agreements. Our current agreements within these sales channels are commission-based, meaning the sales representative group receives a percentage of sales generated by the representative on behalf of the Company. These agreements are generally non-exclusive, meaning they can sell products of our competitors. We anticipate that any such agreements we enter into in the future will be on similar terms. Furthermore, our agreements are generally short-term, and can be cancelled by these sales channels or us without significant financial consequence.

We sell products to customers under individual purchase orders placed by them under their standard terms and conditions of sale. These terms and conditions generally include insurance requirements, customary representations by us with respect to the quality of our products and our manufacturing process, our obligations to comply with law, and indemnifications by us if we breach our representations or obligations. There is no commitment from any customer to purchase from us, or from us to sell to them, any minimum amount of product.

As discussed above, we contract the manufacture of most of our products to third-party unaffiliated manufacturers primarily located in China.

**Intellectual Property** 

We have the license for use of various trademarks, trade names and service marks in our business, including the trademarked name, Sip with Me Characters™. In addition, we have license agreements which includes, but is not limited to Smurfs, Zoonicorn, and Sip with Me. Our license agreements allow us to use the licensed works and marks in connection with the manufacture, sale, marketing, and distribution of each license.

Our license agreements permit us to use the intellectual property of our licensors in connection with the products we design and sell. These license agreements typically provide that our licensors own intellectual property rights in the products we design and sell under the license, and as a result, upon termination of the license, we no longer have the right to sell these products. Our license agreements require us to make royalty payments to the licensor based on our sales of the licensed products. Our license agreements typically have terms of between two and three years and are not automatically renewable. However, we believe we have strong relationships with our licensors, and have historically been able to renew license agreements on commercially reasonable terms.

The Company does not currently hold any patents. However, we hold a license to use the design patent for the Sip with Me cup. The patent itself expires on May 11, 2041. This product does not currently have any sales.

SRM customarily seeks trademark, copyright, and/or patent protection covering its products, and it owns or has applications pending or registrations for U.S. and foreign trademarks, copyrights, and patents covering many of its products. Although a number of these trademarks, copyrights, and patents relate to product lines that are significant to SRM's business and operations, SRM does not believe it is dependent on a single trademark, copyright, or patent. SRM believes its rights to these properties are adequately protected, but there can be no assurance that its rights can be successfully asserted in the future or will not be invalidated, circumvented, or challenged.

For more information, see "*Risk Factors—Risks Related to Our Business—"SRM faces risks related to protecting its proprietary intellectual property and information and is subject to third-party claims that SRM is infringing on their intellectual property rights, either of which could adversely affect SRM's business, financial condition, and results of operations."*

**Competition** 

We have an experienced and collaborative team that has created and maintained relationships with some of the most desired theme and amusement parks in the world. However, competition in the toy industry is intense. Many of our competitors have longer operating histories, greater name recognition and substantially greater financial, technical, sales, marketing and other resources than we do. We anticipate that current and potential competitors will also intensify their efforts to penetrate our target markets. We also increasingly compete with large toy companies for shelf space at leading mass market and other retailers. We also compete with numerous smaller domestic and foreign collectible product designers and manufacturers in each of our product categories. In each of our product lines we compete against one or all of the following companies: Funko, Jazwares, and Light up Toys. Competition is based primarily on the quality of the design and perceived value of our products, our price points, our license portfolio and our ability to bring new products to market quickly.

For additional information, see "*Risk Factors—Risks Related to Our Business— "High levels of competition and low barriers to entry make it difficult to achieve, maintain, or build upon the success of SRM's brands, products, and product lines."*

**Marketing**

SRM supports its product lines with extensive advertising. Advertising takes place at varying levels throughout the year and peaks during the traditional holiday season. Advertising includes catalogues, tradeshows, websites, and will include social media. SRM plans to build its Sip with Me brand by establishing a social media presence to create content for consumers.

**Employees**

As of January 31, 2023, we employed 6 full-time employees. We also employ part-time employees as needed. We employed 4 people in the United States and 2 people in Hong Kong. None of our employees are represented by a labor union or are party to a collective bargaining agreement, and we have had no labor-related work stoppages. We believe that we have good relationships with our employees.

Our culture, mission and core values are a critical part of our success. Our culture is built on a foundation that encourages creativity through entrepreneurship, diversity, empowerment, ethics and open dialogue to continually innovate and improve our technology, solutions, brand and partnerships. We continue to recruit and hire exceptionally talented, diverse and ethical employees and are proud of the company culture we have been able to build. We believe that we maintain a good working relationship with our employees, and we have not experienced any labor disputes.

**Government Regulation**

Our products sold in the United States are subject to the provisions of the Consumer Product Safety Act, or the CPSA, the Federal Hazardous Substances Act, or the FHSA, the Consumer Product Safety Improvement Act of 2008, or the CPSIA and the Flammable Fabrics Act, or the FFA, and the regulations promulgated pursuant to such statutes. These statutes and the related regulations ban from the market any consumer products that fail to comply with applicable product safety laws, regulations, and standards. The Consumer Product Safety Commission may require the recall, repurchase, replacement, or repair of any such banned products or products that otherwise create a substantial risk of injury and may seek penalties for regulatory noncompliance under certain circumstances. Similar laws exist in some U.S. states and our products sold worldwide are subject to the provisions of similar laws and regulations in many jurisdictions, including Canada, Australia, Europe and Asia.

We employ testing and other procedures intended to maintain compliance with the CPSA, the FHSA, the CPSIA, the FFA, other applicable domestic and international product standards, as well as our own standards and those of some of our larger retail customers and licensors. Nonetheless, there can be no assurance that our products are or will be hazard free, and we may in the future experience issues in products that result in recalls, withdrawals, or replacements of products. A product recall could have a material adverse effect on our results of operations and financial condition, depending on the product affected by the recall and the extent of the recall efforts required. A product recall could also negatively affect our reputation and the sales of other SRM products. See "Risk Factors—Risks Related to Our Business— We could be subject to future product liability suits or product recalls which could have a significant adverse effect on our financial condition and results of operations."

We are subject to various other federal, state, local and international laws and regulations applicable to our business, including export controls, and have established processes for compliance with these laws and regulations.

**Facilities** 

We currently utilize office space leased by Jupiter Wellness on a month-to-month basis at no cost. The office is located at 1061 E. Indiantown Rd., Ste. 110, Jupiter, FL 33477 and consists of approximately 6,908 square feet. In the future, we may lease office space, warehouse and/or distribution facility.

We believe that our facilities are adequate for our needs and believe that we should be able to renew any of the above leases or secure similar property without an adverse impact on our operations.

**Legal Proceedings** 

We may become involved in legal proceedings or be subject to claims arising in the ordinary course of our business. We are not presently a party to any legal proceedings that in the opinion of our management, if determined adversely to us, would individually or taken together have a material adverse effect on our business, results of operations and financial condition.

**MANAGEMENT**

**Executive Officers Following this Offering** 

While some of the individuals who are expected to serve as SRM's executive officers are currently officers and employees of Jupiter Wellness, upon the separation, none of these individuals will continue to be employees or executive officers of Jupiter Wellness.

The following table sets forth information, as of January 31, 2023, regarding individuals who are expected to serve as SRM's executive officers, including their positions following the completion of this offering.

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| | | |
|:---|:---|:---|
| **Name** | **Age** | **Position(s)** |
| Richard Miller | 55 | Chief Executive Officer and Director |
| Doug McKinnon | 71 | Chief Financial Officer |
| Taft Flittner | 53 | President |
| Debbie McDaniel-Hand | 59 | Vice President of Production Development and Operations |
| Brian John | 55 | Secretary and Chairman |

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**Richard Miller, Chief Executive Officer and Director,** has served as an Officer and Director of Jupiter Wellness, Inc. since October 2018 and served as Jupiter's Chief Financial Officer from November 2018 until August 2019 as well as the Chief Operating Officer and Chief Compliance Officer. Mr. Miller has managed SRM since it was acquired by Jupiter Wellness in November 2020. Since 2003, Mr. Miller has served as president of Caro Consulting, Inc. a consulting firm that advises emerging growth companies. Over the last twenty years Mr. Miller has provided strategic advice to hundreds of companies across diverse industries. He has assisted C Level executives with expanding, financing and other challenges emerging companies face. Mr. Miller co-founded of Teeka Tan Suncare Products in 2004 and oversaw the development, design and launch of a diverse sun care product line along with the public offering of the company. He is an advocate for school safety and local schools through his grass roots group My School Counts.

**Taft Flittner, President,** has co-founded Options, Inc. in 1991 and served as its President until July 2021. Options was a successful manufacturer's sales rep firm located in Orlando, Florida serviced the theme park industry along with South Eastern gift and sales marketplace. At Options, Mr. Flittner developed custom theme park products which included toys, gifts, souvenirs and confections. Options maintained approximately twenty sales associates and a showroom in AmericasMart located in Atlanta Georgia. Mr. Taft has served as President of SRM since 2021. In addition to his manufacturer's sales firm, Mr. Flittner has developed many internationally known toys, souvenirs and gifts for the theme park industry. Mr. Flittner currently lives in Orlando, Florida with his wife and two boys.

**Douglas O. McKinnon, Chief Financial Officer,** has served as the Chief Financial officer of Jupiter Wellness, Inc. since August 15, 2019. Mr. McKinnon has served as the Chief Executive Officer of AppYea, Inc. since March 2016. Mr. McKinnon has served as a director of Surna, Inc. since March, 2014 and as Surna's Executive Vice President and Chief Financial Officer since April, 2014. Prior to Surna, Inc., Mr. McKinnon served as Chief Executive Officer of 1<sup>st</sup> Resource Group, Inc. for four years. Mr. McKinnon's 35+ year professional career includes financial, advisory and operation experience across a broad spectrum of industry sectors, including oil and gas, technology, cannabis and communications. He has served in C-level positions in both private and public sectors, including Chairman and CEO of an American-Stock-Exchange traded company, VP - Chief Administrative Officer of a $12-billion market cap Nasdaq-traded company for which the management team raised over $2.2 billion, CFO of several publicly-held US, Canadian and Australian companies, and CEO/CFO of various other private enterprises. Mr. McKinnon has functioned as the Chief Financial Officer of SRM since it was acquired by Jupiter Wellness in November 2020. As an entrepreneur, Mr. McKinnon has been involved in organizations ranging from start-up companies using venture capital funding to publicly trade institutional backed companies. Additionally, Mr. McKinnon has extensive merger and acquisition, and turnaround experience.

**Debbie McDaniel-Hand**, **Vice President of Product Development & Operations,** has worked in the Theme Park Industry for over 35 years. Prior to joining SRM, Ms. Hand was with Universal Studios Theme Parks for more than 20 years. During that time, she managed hardline product development, served as a liaison for the merchandising office with marketing and sales, and was responsible for initiating universal sourcing. Ms. Hand has served in this capacity with SRM since March 2021. In addition, Ms. Hand customized and developed items, learning manufacturing processes, and built relationships with different production factories worldwide. Before joining Universal Studios, she was with Anheuser Busch Theme Parks and SeaWorld Orlando for more than 10 years. She was the hardline buyer overseeing purchasing of gifts, toys and products for all sales stores. Ms. Hand currently lives with her husband in Orlando, Florida.

**Brian S. John, Secretary and Chairman,** has served as Chief Executive Officer of Jupiter Wellness, Inc. since October 2018. For the past 20 years, Brian has been an investor and advisor to companies around the globe. He is the founder of Caro Partners, LLC, a financial consulting firm specializing in assisting emerging growth companies primarily in the sub- $100 million space, and has worked with hundreds of companies in dozens of countries over the last 25 years. Mr. John was the Chief Executive Officer of Teeka Tan Products Inc., a sun care company he co-founded in 2004 and later sold. He also serves on the board of directors of The Learning Center at the Els Center of Excellence–a school for children with autism in Jupiter, Florida. Mr. John has served as Secretary of SRM since its inception. In August 2015, Mr. John voluntarily petitioned the United States Bankruptcy Court in the Southern District of Florida (case #15-24036-PGH) for personal bankruptcy under Chapter 7 of the United States bankruptcy Code. The debtor, Mr. John, was discharged in February 19, 2016 and the matter was terminated in April 2017. There were no allegations of fraud made in the proceedings.

**DIRECTORS** 

**Board of Directors Following this Offering** 

The following table sets forth information, as of January 31, 2023, regarding individuals who are expected to serve as SRM's directors following the completion of this offering.

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| | | |
|:---|:---|:---|
| **Name** | **Age** | **Position(s)** |
| Richard Miller | 55 | Director |
| Brian John | 55 | Chairman |
| Gary Herman | 58 | Independent Director |
| Chris Melton | 51 | Independent Director |
| Hans Haywood | 54 | Independent Director |

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**Brian S. John.** See biography above in the section "Management." Mr. John has served as Chairman of the board of SRM since December 2022. We believe Mr. John's extensive company strategy and oversight experience, along with his board experience makes him well-qualified to serve as a member and chairman of our board of directors.

**Richard Miller.** See biography above in the section "Management." Mr. Miller has served as a member of the board of SRM since December 2022. We believe Mr. Miller's extensive management and board experience makes him well-qualified to serve as a member of our board of directors.

**Christopher Marc Melton**, **Director,** has served as a director of the Company since December 2022 and has served as a director of Jupiter Wellness, Inc. since August 2019. Mr. Melton has served as director of SG Blocks, Inc. since November of 2011 and currently serves as the Audit Committee Chairman. From 2000 to 2008, Mr. Melton was a Portfolio Manager for Kingdon Capital Management ("Kingdon") in New York City, where he ran in excess of $1 Billion book in media, telecom, and Japanese investment. Mr. Melton opened Kingdon's office in Japan, where he set up a Japanese research company. From 1997 to 2000, Mr. Melton served as a Vice President at JPMorgan Investment Management as an equity research analyst, where he helped manage $1 Billion plus in REIT funds under management. Mr. Melton was a Senior Real Estate Equity Analyst at RREEF Funds in Chicago from 1995 to 1997. Mr. Melton is Principal and co-founder of Callegro Investments, a specialist land investor. He currently serves on several Public and Private Boards as well as Chairman of the Audit Committee of a Nasdaq listed company. Mr. Melton received his B.A. in Political Economy of Industrial Societies from University of California Berkeley. Mr. Melton has served as a board member of SRM since December 2022. We believe Mr. Melton's extensive management and board experience makes him well-qualified to serve as a member of our board of directors.

**Gary Herman**, **Director**, has served as a Director of Jupiter Wellness, Inc. since March 2022. Mr. Herman's affiliated investment funds have been focused on investments primarily in U.S. small and micro-cap companies. Since 2006 Mr. Herman has co-managed, Strategic Turnaround Equity Partners, LP (Cayman) and its affiliates which is focused on investments primarily in undervalued publicly-traded securities. From January 2011 to August 2013, Mr. Herman was a managing member of Abacoa Capital Management, LLC, which, through its fund, Abacoa Capital Master Fund, Limited focused on a Global-Macro investment strategy. From 2005-2020, Mr. Herman was affiliated with Arcadia Securities LLC, a New York based broker-dealer. From 1997 to 2002, he was an investment banker with Burnham Securities, Inc. Prior to this from 1993 to 1997, he was a managing partner of Kingshill Group, Inc., a merchant banking and financial advisory firm with offices in New York and Tokyo. He has a B.A. from the University at Albany, Rockefeller College of Public Affairs & Policy in Political Science and Minors in Business and Music, as well as attended New York Law School. His experience has included public and private boards, corporate officerships, advisory, capital raising and restructuring roles. Mr. Herman is a Private Pilot with an Instrument Rating. Mr. Herman has served as a board member of SRM since December 2022. We believe Mr. Herman's extensive management and board experience makes him well-qualified to serve as a member of our board of directors.

**Hans Haywood**, **Director**, has served as a director of Jupiter Wellness Acquisition Corp. since September 2021, and is currently a principal of HKA Capital Advisors, a platform from which to offer consulting services and develop proprietary trading algorithms, which he founded in 2010. From May 2011 to April 2018 Mr. Haywood was the Co-Chief Investment Officer and a Director of Tempest Capital AG, a Zurich-based family office/private equity fund, responsible for structuring and making activist investments in the technology and natural resource sectors. From May 2009 to March 2011, Mr. Haywood was the Chief Investment Officer of Panda Global Advisors, an emerging markets oriented Global Macro fund with a focus on liquid assets, sovereign credit, interest rates, foreign exchange, equity and commodities, which he founded in 2011. From July 2005 to December 2007, Mr. Haywood was a Partner and Senior Portfolio Manager for Sailfish Capital Partners, a multi-strategy fund, where he co-founded and managed the fund's global Emerging Markets strategy. From December 1997 to June 2005, he was a Managing director at Credit Suisse where he managed the firm's proprietary credit portfolio and was jointly responsible for the creation of the firm's customer-oriented trading platform. Mr. Haywood received a master's degree in Chemical Engineering from Imperial College, University of London in 1990. Mr. Haywood has served as a board member of SRM since December 2022. We believe Mr. Haywood's extensive management and board experience makes him well-qualified to serve as a member of our board of directors.

**Family Relationships and Other Arrangements**

There are no familial relationships or arrangements or understandings between or among our executive officers and directors pursuant to which any director or executive officer was or is to be selected as a director or executive officer.

**Composition of Our Board of Directors** 

The Board, as a unified body and through its committee participation, will organize the execution of its monitoring and oversight roles. Our board of directors consist of five members, three of whom qualify as "independent" under the applicable rules of Nasdaq. Brian John serves as the Chairman of the board of directors of SRM.

When considering whether directors have the experience, qualifications, attributes or skills, taken as a whole, to enable our board of directors to satisfy its oversight responsibilities effectively in light of our business and structure, the board of directors focuses primarily on each person's background and experience as reflected in the information discussed in each of the directors' individual biographies set forth above. We believe that our directors provide an appropriate mix of experience and skills relevant to the size and nature of our business.

Our amended and restated bylaws provide that the authorized number of directors may only be changed by a resolution adopted by a majority of our board of directors.

**Committees of the Board of Directors** 

The standing committees of our board of directors are as described below.

***Audit Committee***

 ****

The Audit Committee will initially be composed of , , and will serve as the Chair of our Audit Committee. The Audit Committee will perform the duties set forth in its written charter, which will be available on our website upon effective date of the registration statement of which this prospectus forms a part. The primary responsibilities of the Audit Committee will include:

● overseeing our financial reporting process, including the filing of financial reports; and

● selecting independent auditors, evaluating their independence and performance and approving audit fees and services performed by them;

● overseeing management's establishment and maintenance of adequate systems of internal accounting and financial controls; and

● reviewing the effectiveness of our legal and regulatory compliance programs.

Our board of directors has affirmatively determined that , , and meet the definition of "independent director" for purposes of serving on an audit committee under Rule 10A-3 and Nasdaq rules. Our board of directors has determined that qualifies as an "audit committee financial expert," as such term is defined in Item 407(d)(5) of Regulation S-K.

***Compensation Committee***

 ****

The Compensation Committee will initially be composed of , , and will serve as the Chair of our Compensation Committee. The Compensation Committee will perform the duties set forth in its written charter, which will be available on our website upon effective date of the registration statement of which this prospectus forms a part. The primary responsibilities of the Compensation Committee will include:

● ensuring our executive compensation programs are appropriately competitive, supporting organizational objectives and stockholder interests and emphasizing pay for performance linkage;

● evaluating and approving compensation and setting performance criteria for compensation programs for our chief executive officer and other executive officers; and

● overseeing the implementation and administration of our compensation plans.

Currently, we expect that the Compensation Committee will be composed of three directors, all of whom will be "independent" under the applicable rules of Nasdaq.

***Nominating and Corporate Governance Committee***

The Nominating and Corporate Governance Committee will initially be composed of , , and . will serve as the Chair of our Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee will perform the duties set forth in its written charter, which will be available on our website upon effective date of the registration statement of which this prospectus forms a part. The primary responsibilities of the Nominating and Corporate Governance Committee will include:

● recommending nominees for our board of directors and its committees;

● recommending the size and composition of our board of directors and its committees;

● reviewing our corporate governance guidelines, corporate charters and proposed amendments to our articles of incorporation and by-laws; and

● reviewing and making recommendations to address stockholder proposals.

Currently, we expect that the Nominating and Corporate Governance Committee will be composed of three directors, all of whom will be "independent" under the applicable rules of Nasdaq.

**Code of Business Conduct and Ethics** 

Prior to the completion of this offering, our board of directors intends to adopt a code of business conduct and ethics, or "Code of Ethics," which will apply to all of our directors, officers and employees, including our principal executive officer, principal financial officer, principal accounting officer and persons performing similar functions. The Code of Ethics will be available upon written request to our General Counsel or on our website at https://www.smentertainment.com/. If we amend or grant any waiver from a provision of our Code of Ethics that applies to our executive officers, we will publicly disclose such amendment or waiver on our website and as required by applicable law.

**EXECUTIVE COMPENSATION**

 

***Summary Compensation Table***

During the Company's fiscal years ended December 31, 2022 and 2021, we paid the following aggregate salaries to their current executive officers:

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **Name and Principal Position** | **Year** | **Salary** | **Stock Awards <br>(2)** | **Option Awards <br>(2)** | **Non-Equity Incentive Plan Compensation (2)** | **All Other Compensation** | **Total (1)** |
| Richard Miller | 2022 | $145833 | – |  | – |  | $145833 |
| Chief Executive Officer | 2021 |  | – |  | – |  |  |
| Debbie McDaniel-Hand, | 2022 | $90000 | – |  | – |  | $90000 |
| Vice President of Production Development and Operations | 2021 | $75000 | – |  | – |  | $75000 |
| Taft Flittner, | 2022 | $100000 | – |  | – |  | $100000 |
| President | 2021 | $41667 | – |  | – |  | $41667 |

---

(1) There
 were no non-equity incentive plan compensation, option awards, nor stock awards in 2022 and 2021.

**Compensatory Arrangements for Certain Executive Officers** 

On January 1, 2023, the Company entered into employment agreements with each of its executive officers.

 **2023 Equity Incentive Plan** 

Prior to the completion of the offering, we intend to adopt the 2023 Equity Incentive Plan (the "2023 Plan"), which will be effective prior to this effective date of the registration statement of which prospectus forms a part, and will have terms substantially as set forth below.

***Purposes***

The purposes of our 2023 Plan will be to attract and retain the best available personnel; to provide additional incentive to our employees, directors, and consultants and employees and consultants of our parent or subsidiaries; and to promote the success of our business.

***Shares Subject to Our 2023 Plan***

The number of shares of our Common Stock available for issuance under our 2023 Plan will be equal to 1,500,000 shares. The number of shares of our Common Stock reserved under our 2023 Plan will also include an annual increase on the first day of each fiscal year beginning on equal to the lesser of (1) % of our outstanding shares of Common Stock as of the last day of the immediately preceding fiscal year and (2) such number of shares as our board of directors may determine; provided, however, that such determination under clause (2) will be made no later than the last day of the immediately preceding fiscal year. The shares may be authorized, but unissued, or reacquired Common Stock. The foregoing share reserve, and the individual limits described below, are subject to adjustment in certain circumstances to prevent dilution or enlargement.

The shares of our Common Stock covered by any award that is forfeited, terminates, expires, lapses without being exercised or settles for cash will again become available for issuance under the 2023 Plan. With respect to any stock appreciation rights, the net shares issued will cease to be available under the 2023 Plan. With respect to any award, if the exercise price and/or tax withholding obligations are satisfied by delivering shares to us (by actual delivery or attestation), only the net shares delivered or attested to will cease to be available under the 2023 Plan. With respect to any award, if the exercise price and/or tax withholding obligations are satisfied by withholding shares otherwise issuable pursuant to the award, the shares that are withheld to satisfy those obligations will again become available for issuance under the 2023 Plan.

***Administration***

Our 2023 Plan will be administered by the board of directors (or such other committee of our board of directors as our board of directors may from time to time designate). Among other things, the Compensation Committee will have the authority to select individuals to whom awards may be granted, determine the types of awards (as well as the number of shares of Common Stock to be covered by each such award) granted, and determine and modify the terms and conditions of any such awards.

***Eligibility***

Awards may be granted to our directors, employees, and consultants or employees and consultants of any of our parents, subsidiaries, or affiliates. Incentive stock options may be granted only to persons who as of the time of grant are our employees or employees of any of our parents or subsidiaries.

***Stock Options***

Each option granted under our 2023 Plan will be evidenced by an award agreement specifying the number of shares subject to the option and the other terms and conditions of the option. The exercise price per share of each option may not be less than the fair market value of a share of our Common Stock on the date of grant (except if granted pursuant to a transaction described in, and in a manner consistent with, Section 424(a) of the tax code). However, any incentive stock option granted to a person who at the time of grant owns stock possessing more than 10% of the total combined voting power of all of our classes of stock or any of our parent or subsidiary corporations must have an exercise price per share equal to at least 110% of the fair market value of a share on the date of grant. The aggregate fair market value of the shares (determined on the grant date) covered by incentive stock options which first become exercisable by any participant during any calendar year also may not exceed $100,000.

Options will be exercisable at such times and under such conditions as the administrator determines and as set forth in the award agreement. Unless otherwise provided in the award agreement, an option subject to only time-based vesting will become fully vested upon termination of a participant's service for retirement, disability, or death. Our 2023 Plan provides that the administrator will determine the acceptable form(s) of consideration for exercising an option. An option will be deemed exercised when we receive the notice of exercise and full payment for the shares to be exercised, together with applicable tax withholdings.

The maximum term of an option will be specified in the award agreement, provided that options will have a maximum term of no more than ten years, and provided further that an incentive stock option granted to a 10% stockholder must have a term not exceeding five years.

The administrator will determine and specify in each award agreement, solely in its discretion, the post-termination exercise period applicable to an option following a participant's terminating service with us or our applicable parent, subsidiary, or affiliate. In the absence of such a determination, a participant (or such other appropriate person) will be able to exercise the vested portion of an option for: (1) three months following the participant's termination for reasons other than retirement, death, or disability, and (2) 12 months following the participant's termination due to retirement, death, or disability. In no event, however, will an option be exercisable beyond its term.

***Restricted Stock Awards***

Awards of restricted stock are rights to acquire or purchase shares of our Common Stock that generally are subject to transferability and forfeitability restrictions for a specified period. Each award of restricted stock will be evidenced by an award agreement specifying the period during which the transfer of shares is subject to restriction (which, in the administrator's sole discretion, may be based on the passage of time, the achievement of target levels of performance, the occurrence of other events the administrator determines, or a combination thereof), if any, the number of shares granted, and other terms and conditions of the award. Shares of restricted stock generally will be held in escrow until the end of the period of restriction applicable to such shares. Unless otherwise provided in the award agreement, a restricted stock award subject to only time-based vesting will become fully vested upon termination of a participant's service for disability or death.

Unless otherwise provided by the administrator, a participant will forfeit any shares of restricted stock as to which the restrictions have not lapsed as of the date set forth in the award agreement. Unless the administrator provides otherwise, participants holding shares of restricted stock will have the right to vote the shares and to receive any dividends paid with respect to such shares. The administrator, in its sole discretion, may accelerate the time at which any restrictions will lapse or be removed.

***Transferability of Awards***

Unless otherwise determined by the administrator, awards generally are not transferable other than by will or by the laws of descent or distribution, and may be exercised during the lifetime of the participant, only by the participant.

***Dissolution or Liquidation***

In the event of our proposed dissolution or liquidation, the administrator will notify each participant as soon as practicable prior to the effective date of such proposed transaction. An award will terminate immediately prior to the completion of such proposed action to the extent the award has not been previously exercised.

***Change in Control***

Our 2023 Plan provides that, in the event of a "change in control" (as defined in our 2023 Plan), the board of directors or committee may accelerate the vesting and exercisability of outstanding Options, in whole or in part, as determined by the Committee in its sole discretion. In its sole discretion, the Committee may also determine that, upon the occurrence of a Change in Control, each outstanding Option shall terminate within a specified number of days after notice to the Optionee thereunder, and each such Optionee shall receive, with respect to each share of Common Stock subject to such Option, an amount equal to the excess of the Fair Market Value of such shares immediately prior to such Change in Control over the exercise price per share of such Option; such amount shall be payable in cash, in one or more kinds of property (including the property, if any, payable in the transaction) or a combination thereof, as the Committee shall determine in its sole discretion.

***Termination or Amendment***

Our 2023 Plan will automatically terminate ten years from the date of its adoption by our board of directors, unless terminated earlier by our board of directors. The administrator may amend, alter, suspend or terminate our 2023 Plan at any time, provided that no amendment may be made without stockholder approval to the extent approval is necessary or desirable to comply with any applicable laws. In addition, no amendment, alteration, suspension or termination may materially impair the rights of any participant unless mutually agreed in writing otherwise between the participant and the administrator.

***Capital Change of the Company***

In the event of any merger, reorganization, consolidation, recapitalization, stock dividend, or other change in corporate structure affecting the Common Stock of the Company, the Committee shall make an appropriate and equitable adjustment in the number and kind of shares reserved for issuance under the Plan and (A) in the number and option price of shares subject to outstanding Options granted under the Plan, to the end that after such event each Optionee's proportionate interest shall be maintained (to the extent possible) as immediately before the occurrence of such event. The Committee shall, to the extent feasible, make such other adjustments as may be required under the tax laws so that any Incentive Options previously granted shall not be deemed modified within the meaning of Section 424(h) of the Code. Appropriate adjustments shall also be made in the case of outstanding Restricted Stock granted under the Plan.

 

The adjustments described above will be made only to the extent consistent with continued qualification of the Option under Section 422 of the Code (in the case of an Incentive Option) and Section 409A of the Code.

**Director Compensation**

Following the completion of this offering, our non-employee directors will be compensated pursuant to our policy described below.

***Annual Cash Retainers***

Each member of the board of directors will receive a $5,000 annual retainer. All retainers will be paid on an annual basis. In addition, members of the board of directors are eligible to participate in the Company's equity incentive plan. No issuances have been made as of the date of this prospectus.

***Travel Expenses***

Our non-employee directors will be entitled to reimbursement for travel and other related expenses incurred in connection with their attendance at meetings of the board of directors and committees of the board of directors.

**CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS**

Prior to this offering, we have operated as an operating segment of Jupiter Wellness. Immediately following this offering, Jupiter Wellness will continue to own % of our outstanding Common Stock. If the underwriters exercise their option to purchase additional shares in full, immediately following this offering, Jupiter Wellness will own % of our outstanding Common Stock. Jupiter Wellness will continue to have the power acting alone to approve any action requiring the affirmative vote of a majority of the votes entitled to be cast and to elect all of our directors.

Prior to completion of this offering, we intend to enter into the separation agreement with Jupiter Wellness relating to this offering and our relationship with Jupiter Wellness after this offering. The material terms of such agreement with Jupiter Wellness relating to our historical relationship, this offering and our relationship with Jupiter Wellness after this offering are described below. We do not currently expect to enter into any additional agreements or other transactions with Jupiter Wellness outside the ordinary course or with any of our directors, officers or other affiliates, other than those specified below. Any transactions with directors, officers or other affiliates will be subject to requirements of Sarbanes-Oxley and SEC rules and regulations.

**Relationship with Jupiter Wellness** 

***Historical Relationship with Jupiter Wellness***

Jupiter Wellness currently provides certain services to us, and costs associated with these functions will be allocated to us. The allocations include costs related to corporate services, such as executive management, information technology, legal, finance and accounting, human resources, tax, treasury, research and development, sales and marketing, shared facilities and other services. These allocations are primarily reflected within operating expenses in our combined statements of operations. Management believes the basis on which the expenses have been allocated to be a reasonable reflection of the utilization of services provided to, or the benefit received by, us during the periods presented. However, these allocations may not necessarily be indicative of the actual expenses we would have incurred as an independent company during the periods prior to the offering or of the costs we will incur in the future.

Following the completion of this offering, we expect Jupiter Wellness to continue to provide certain of the services described above on a transitional basis for a fee. These services will be provided under the separation agreement described in "*Certain Relationships and Related Party Transactions—Relationship with Jupiter Wellness—Arrangements Between Jupiter Wellness and Our Company*." We generally expect to use the vast majority of these services for less than a year following the completion of this offering, depending on the type of the service and the location at which such service is provided. However, we may agree with Jupiter Wellness to extend the service periods for a limited amount of time (which period will not extend past the first anniversary of the distribution) or may terminate such service periods by providing prior written notice.

Following the completion of this offering, we will be subject to the reporting requirements of the Exchange Act. We will be required to establish procedures and practices as a stand-alone public company in order to comply with our obligations under the Exchange Act and related rules and regulations. As a result, we will incur additional costs, including internal audit, investor relations, stock administration and regulatory compliance costs. These additional costs may differ from the costs that were historically allocated to us from Jupiter Wellness. To operate as a stand-alone company, we expect to incur costs to replace certain services previously provided by Jupiter Wellness, which may be higher than those reflected in our historical combined financial statements.

***Jupiter Wellness as Our Controlling Stockholder***

Jupiter Wellness owns 81.1% of our outstanding Common Stock. Upon completion of this offering, Jupiter Wellness will hold more than 50.0% of our outstanding Common Stock (or % if the underwriters exercise their option to purchase additional shares in full).

For as long as Jupiter Wellness continues to control more than 50% of our outstanding Common Stock, Jupiter Wellness or its successor-in-interest will be able to direct the election of all the members of our board of directors. Similarly, Jupiter Wellness will have the power to determine matters submitted to a vote of our stockholders without the consent of our other stockholders, will have the power to prevent a change in control of us and will have the power to take certain other actions that might be favorable to Jupiter Wellness. In addition, the separation agreement will provide that, as long as Jupiter Wellness beneficially owns at least 50% of the total voting power of our outstanding capital stock entitled to vote in the election of our board of directors, we will not (without Jupiter Wellness's prior written consent) take certain actions, such as incurring additional indebtedness and acquiring businesses or assets or disposing of assets in excess of certain amounts. To preserve the tax-free treatment of the separation and distribution, the separation agreement will include certain covenants and restrictions to ensure that, until immediately prior to the distribution, Jupiter Wellness will retain beneficial ownership of at least 80% of our combined voting power and 80% of each class of nonvoting capital stock, if any is outstanding. In addition, to preserve the tax-free treatment of the separation and distribution, we intend to agree in the separation agreement to restrictions, including restrictions that would be effective during the period following the distribution, that could limit our ability to pursue certain strategic transactions, equity issuances or repurchases or other transactions that we may believe to be in the best interests of our stockholders or that might increase the value of our business.

Jupiter Wellness has agreed not to sell or otherwise dispose of any of our Common Stock for a period of days from the date of this prospectus without the prior written consent of EF Hutton. See "*Underwriting*." However, there can be no assurance concerning the period of time during which Jupiter Wellness will maintain its ownership of our Common Stock following this offering.

Jupiter Wellness has informed us that, at some time in the future, but no earlier than the expiration or earlier termination of the 180 day lock-up period applicable to Jupiter Wellness described under the section titled "*Underwriting*," it intends to effect a distribution of its remaining ownership interest in us to its stockholders in a transaction that is generally expected to be tax-free for U.S. federal income tax purposes. It is intended that we will be included in Jupiter Wellness's consolidated group for U.S. federal income tax purposes immediately following this offering until the proposed distribution. Jupiter Wellness may abandon or change the structure of the distribution at any time, including if it determines, in its sole discretion that the distribution is not in the best interest of Jupiter Wellness or its stockholders.

***Arrangements Between Jupiter Wellness and Our Company***

Prior to the completion of this offering, we and Jupiter Wellness expect to enter into certain agreements that will effect the separation of our business from Jupiter Wellness, provide a framework for our relationship with Jupiter Wellness after the separation and provide for the allocation between us and Jupiter Wellness of Jupiter Wellness's assets, employees, liabilities and obligations (including its investments, property and employee benefits assets and liabilities) attributable to periods prior to, at and after our separation from Jupiter Wellness, specifically the separation agreement.

The material terms of the separation agreement are summarized below. This summary is qualified in its entirety by reference to the full text of such agreement, which will be filed as an exhibit to the registration statement of which this prospectus is a part. The terms of the separation agreement described below that will be in effect following the separation are in draft form and are not yet final. Changes to these agreements, some of which may be material, may be made prior to our separation from Jupiter Wellness.

When used in this section, "separation date" refers to the date on which Jupiter Wellness will contribute the SRM business to us, which will occur prior to the completion of this offering, and the term "distribution date" refers to the date, if any, following this offering on which Jupiter Wellness will distribute its equity interest in us to the Jupiter Wellness stockholders through the anticipated distribution.

**Separation Agreement** 

Prior to the completion of this offering, we intend to enter into a separation agreement with Jupiter Wellness, which will set forth the agreements between us and Jupiter Wellness regarding the principal corporate transactions required to effect our separation from Jupiter Wellness, this offering and the distribution, if any, of our shares to Jupiter Wellness's stockholders, and other agreements governing the relationship between Jupiter Wellness and us.

***The Separation***

The separation agreement will identify assets to be transferred, liabilities to be assumed and contracts to be assigned to each of us and Jupiter Wellness as part of the separation of Jupiter Wellness into two companies, and will provide for when and how these transfers, assumptions and assignments will occur. In particular, the separation agreement will provide, among other things that, subject to certain exceptions and the terms and conditions contained therein:

● the assets exclusively related to the businesses and operations of Jupiter Wellness's SRM business as well as certain other assets mutually agreed upon by Jupiter Wellness and SRM, which we collectively refer to as the "SRM Assets," will be transferred to SRM or one of our subsidiaries;

● certain liabilities (including whether accrued, contingent or otherwise) arising out of or resulting from the SRM Assets, and other liabilities related to the businesses and operations of Jupiter Wellness's SRM business, which we collectively refer to as the "SRM Liabilities," will be retained by or transferred to us or one of our subsidiaries;

● all of the assets and liabilities (including whether accrued, contingent or otherwise) other than the SRM Assets and SRM Liabilities (such assets and liabilities, other than the SRM Assets and the SRM Liabilities, are referred to as the "Jupiter Wellness Assets" and "Jupiter Wellness Liabilities," respectively) will be retained by or transferred to Jupiter Wellness or one of its subsidiaries; and

● certain shared contracts will be assigned in part to us or our applicable subsidiaries or be appropriately amended.

Except as may expressly be set forth in the separation agreement or any other transaction agreements, all assets will be transferred on an "as is," "where is" basis, and the respective transferees will bear the economic and legal risks that (1) any conveyance will prove to be insufficient to vest in the transferee good title, free and clear of any security interest, and (2) any necessary consents or governmental approvals are not obtained or that any requirements of laws or judgments are not complied with.

***Claims***

In general, each party to the separation agreement will assume liability for all pending, threatened and unasserted legal matters related to its own business or it's assumed or retained liabilities and will indemnify the other party for any liability to the extent arising out of or resulting from such assumed or retained legal matters.

***Intercompany Accounts***

The separation agreement will provide that, subject to any provisions in the separation agreement or any other transaction agreement to the contrary, at or prior to the separation from Jupiter Wellness, all intercompany accounts between Jupiter Wellness and its subsidiaries, on the one hand, and SRM and its subsidiaries, on the other hand, will be settled.

***Further Assurances***

To the extent that any transfers or assignments contemplated by the separation agreement have not been consummated on or prior to the date of the separation, the parties will agree to cooperate to effect such transfers as promptly as practicable following the date of the separation. In addition, each of the parties will agree to cooperate with the other party and use commercially reasonable efforts to take or to cause to be taken all actions, and to do, or to cause to be done, all things reasonably necessary under applicable law or contractual obligations to consummate and make effective the transactions contemplated by the separation agreement and the other transaction agreements.

***Initial Public Offering***

For a description of Jupiter Wellness's ownership interest in us after the completion of this offering, see the section titled "—*Jupiter Wellness as Our Controlling Stockholder*."

The separation agreement provides that the consummation of this offering is subject to the satisfaction (or waiver by Jupiter Wellness in its sole discretion) of the following conditions:

● the transfer of the SRM Assets, SRM Liabilities, Jupiter Wellness Assets and Jupiter Wellness Liabilities (in each case with certain exceptions) in accordance with the plan of reorganization set forth in the separation agreement;

● the SEC having declared effective our registration statement on Form S-1, of which this prospectus is a part, and there being no stop-order in effect with respect to such registration statement;

● all actions and filings necessary or appropriate under federal, state or foreign securities laws shall have been taken and, where applicable, become effective or been accepted by the applicable governmental authority;

● the approval for listing on the Nasdaq of the shares of our Common Stock to be offered in this offering;

● the transaction agreements relating to the separation shall have been duly executed and delivered by the parties;

● we shall have entered into the underwriting agreement and all conditions to our obligations and the underwriters' obligations under the underwriting agreement shall have been satisfied or waived;

● Jupiter Wellness shall be satisfied in its sole discretion that it will own at least [●]% of the total voting power with respect to the election and removal of directors of our outstanding Common Stock following this offering and shall be satisfied in its sole discretion that all other conditions to the distribution qualifying as a transaction that is generally tax-free for U.S. federal income tax purposes, to the extent applicable as of the time of this offering, are satisfied and there is not any event or condition that is likely to cause any of such conditions not to be satisfied as of the time of the distribution or thereafter;

● no order, injunction or decree issued by any court of competent jurisdiction or other legal restraint or prohibition preventing consummation of the separation or this offering or any of the transactions contemplated by the separation agreement shall be in effect;

● such other actions as Jupiter Wellness or we may, based upon the advice of counsel, reasonably request to be taken prior to the separation and this offering in order to assure the successful completion of the separation and this offering and the other transactions contemplated by the separation agreement shall have been taken;

● no termination of the separation agreement shall have occurred; and

● no event or development shall have occurred or existed or is expected to occur that, in the judgment of the Jupiter Wellness board of directors, in its sole discretion, makes it inadvisable to effect the separation or this offering.

We will cooperate with Jupiter Wellness to accomplish this offering and will, at Jupiter Wellness's direction, promptly take any and all actions necessary or desirable to effect this offering, including, without limitation, the registration under the Securities Act of our Common Stock on an appropriate registration form or forms to be designated by Jupiter Wellness.

***The Distribution***

Jupiter Wellness will distribute 2,000,000 outstanding shares of our Common Stock to Jupiter Wellness stockholders and certain warrant holders of record as of the close of business on____, 2023.

We refer to this distribution of securities as the "*Distribution*."

In the Distribution, each holder of Jupiter Wellness Common Stock and warrants will receive a distribution of one share of our Common Stock for every seventeen shares of Jupiter Wellness Common Stock held or underlying the July Warrants as of , 2023, the record date.

**Manner of Effecting the Distribution** 

The general terms and conditions relating to the Distribution will be set forth in the separation agreement between us and Jupiter Wellness. Under the separation agreement, the Distribution will be effective at 11:59 p.m., New York City time, on , 2023. For most Jupiter Wellness stockholders who own Jupiter Wellness Common Stock in registered form on the record date and for holders of outstanding Jupiter Wellness stock option awards and restricted stock awards, our transfer and distribution agent will credit their shares of our Common Stock to book entry accounts established to hold these shares. Our transfer and distribution agent will send these stockholders a statement reflecting their ownership of our Common Stock. Book-entry refers to a method of recording stock ownership in our records in which no physical certificates are used. For stockholders who own Jupiter Wellness Common Stock through a broker or other nominee, their shares of our Common Stock will be credited to these stockholders' accounts by the broker or other nominee. As further discussed below, fractional shares will not be distributed. Following the Distribution, stockholders whose shares are held in book entry form may request that their shares of our Common Stock be transferred to a brokerage or other account at any time, as well as delivery of physical stock certificates for their shares, in each case without charge.

JUPITER WELLNESS STOCKHOLDERS WILL NOT BE REQUIRED TO PAY FOR SHARES OF OUR COMMON STOCK RECEIVED 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. NO VOTE OF JUPITER WELLNESS STOCKHOLDERS IS REQUIRED OR SOUGHT IN CONNECTION WITH THE DISTRIBUTION, AND JUPITER WELLNESS STOCKHOLDERS HAVE NO APPRAISAL RIGHTS IN CONNECTION WITH THE DISTRIBUTION.

Fractional shares of our Common Stock will not be issued to Jupiter Wellness stockholders as part of the Distribution or credited to book entry accounts. In lieu of receiving fractional shares, each holder of Jupiter Wellness Common Stock who would otherwise be entitled to receive a fractional share of our Common Stock will receive cash for the fractional interest, which generally will be taxable to such holder. An explanation of the tax consequences of the Distribution can be found below in the subsection captioned "— *Material U.S. Federal Income Tax Consequences of the Distribution*." The transfer and distribution agent will, as soon as practicable after the Distribution date, aggregate fractional shares of our Common Stock into whole shares and sell them in the open market at the prevailing market prices and distribute the aggregate proceeds, net of brokerage fees, ratably to stockholders otherwise entitled to fractional interests in our Common Stock. The amount of such payments will depend on the prices at which the aggregated fractional shares are sold by the transfer and distribution agent in the open market shortly after the Distribution date. In connection with the employee portion of such tax obligations, the Distribution of shares of SRM Common Stock that would otherwise be made in respect of shares of Jupiter Wellness Common Stock underlying Jupiter Wellness stock option awards and restricted stock awards will be reduced by a percentage equal to the highest blended estimated Federal and state marginal tax rate applicable to such employee, and Jupiter Wellness will make a cash payment equal to the dollar value of the shares of SRM Common Stock that were not distributed to such employee to the applicable governmental entity in satisfaction of such employee's tax obligations. See "*The Distribution — Material U.S. Federal Income Tax Consequences of the Distribution*."

If the Jupiter Wellness board of directors terminates Jupiter Wellness's obligation to complete the distribution or waives a material condition to the distribution after the date of this prospectus, we intend to issue a press release disclosing this waiver or file a current report on Form 8-K with the SEC.

We will cooperate with Jupiter Wellness to accomplish the distribution and will, at Jupiter Wellness's direction, promptly take any and all actions necessary or desirable to effect the distribution.

Please see "*The Distribution*" for a more detailed description of the matters described below.

***Releases***

The separation agreement will provide that, except as otherwise provided in the separation agreement or any other transaction agreements, each party will release and forever discharge the other party and its respective subsidiaries and affiliates from all liabilities existing or arising from any acts or events occurring or failing to occur or alleged to have occurred or to have failed to occur or any conditions existing or alleged to have existed on or before the separation from Jupiter Wellness. The releases will not extend to obligations or liabilities under any agreements between the parties that remain in effect following the separation, which agreements include, but are not limited to, the separation agreement and the transfer documents in connection with the separation.

***Covenants***

In addition, the separation agreement will provide that, as long as Jupiter Wellness beneficially owns at least 50% of the total voting power of our outstanding capital stock entitled to vote in the election of our board of directors, we will not (without Jupiter Wellness's prior written consent):

● take any action that would limit the ability of Jupiter Wellness to transfer its shares of our Common Stock or limit the rights of any transferee of Jupiter Wellness as a holder of our Common Stock;

● take any action, or recommend to its stockholders any action which would limit the legal rights of, or deny any benefit to, Jupiter Wellness as an SRM stockholder, either (1) solely as a result of the amount of SRM Common Stock held by Jupiter Wellness or (2) in a manner not applicable to SRM stockholders generally;

● to the extent Jupiter Wellness is party to a third-party contract that requires actions by SRM, take or fail to take any actions that reasonably could result in Jupiter Wellness being in breach of or in default under any contract or agreement of which SRM is aware;

● incur any indebtedness exceeding $100 million in the aggregate or that could cause Jupiter Wellness to be in breach of or in default under any contract that Jupiter Wellness has informed SRM of, or that could be reasonably likely to adversely impact the credit rating of any indebtedness of Jupiter Wellness;

● acquire any other businesses or assets or dispose of any of our assets, in each case with an aggregate value for all such transactions in excess of $10 million; or

● acquire any equity interests in, or loan any funds to, third parties in excess of $10 million in the aggregate.

***Financial Covenants; Auditors and Audits; Annual Financial Statements and Accounting***

We have agreed that, for so long as Jupiter Wellness is required to consolidate our results of operations and financial position or account for its investment in our company under the equity method of accounting, we will, among other things:

● maintain disclosure controls and procedures and internal control over financial reporting that will provide reasonable assurance that, among other things, (1) our annual and quarterly financial statements are reliable and timely prepared in accordance with GAAP and applicable law, (2) our transactions are recorded as necessary to permit the preparation of our financial statements, (3) receipts and expenditures are authorized at the appropriate level within SRM and (4) unauthorized uses and dispositions of assets that could have a material effect on our financial statements are prevented or detected in a timely manner;

● maintain the same fiscal year as Jupiter Wellness;

● establish a disclosure committee that will review our Forms 10-Q, 10-K and other significant filings with the SEC, and permit up to three employees selected by Jupiter Wellness to attend such committee's meetings;

● not change our independent auditors without Jupiter Wellness's prior written consent;

● use our reasonable best efforts to enable our independent auditors to complete their audit of our financial statements in a timely manner so as to permit timely filing of Jupiter Wellness's financial statements;

● provide to Jupiter Wellness and its independent auditors all information required for Jupiter Wellness to meet its schedule for the filing and distribution of its financial statements and to make available to Jupiter Wellness and its independent auditors all documents necessary for the annual audit of our company as well as access to the responsible company personnel so that Jupiter Wellness and its independent auditors may conduct their audits relating to our financial statements;

● adhere to certain specified Jupiter Wellness accounting policies and notify and consult with Jupiter Wellness regarding any changes to our accounting principles and estimates used in the preparation of our financial statements, and any deficiencies in, or violations of law in connection with, our internal control over financial reporting;

● coordinate with Jupiter Wellness regarding the timing and content of our earnings releases and cooperate fully (and cause our independent auditors to cooperate fully) with Jupiter Wellness in connection with any of its public filings; and

● promptly report in reasonable detail to Jupiter Wellness the following events or circumstances that we become aware of: (1) significant deficiencies and material weaknesses which are reasonably likely to adversely affect our ability to report financial information; (2) any fraud that involves management or other employees who have a significant role in our internal control over financial reporting; (3) illegal acts; and (4) any report of a material violation of law made pursuant to the SEC's attorney conduct rules.

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***Intellectual Property Matters***

All intellectual property is currently licensed in the name of SRM Entertainment, Inc.

***Indemnification***

In addition, the separation agreement provides for cross-indemnities principally designed to place financial responsibility for the obligations and liabilities of our business with us and financial responsibility for the obligations and liabilities of Jupiter Wellness's business with Jupiter Wellness. Specifically, each party will indemnify, defend and hold harmless the other party, its affiliates and subsidiaries and their respective officers, directors, employees and agents (collectively, the "indemnified parties") for any losses arising out of or otherwise in connection with:

● the liabilities that each such party assumed or retained pursuant to the separation agreement (which, in our case, would include the SRM Liabilities and, in the case of Jupiter Wellness, would include the Jupiter Wellness Liabilities) and the other transaction agreements;

● the failure of Jupiter Wellness or us to pay, perform or otherwise promptly discharge any of the Jupiter Wellness Liabilities or the SRM Liabilities, respectively, in accordance with their terms, whether prior to, at or after the separation;

● any breach by such party of the separation agreement or the other transaction agreements (other than the intellectual property rights cross-license agreement, which specifies the parties' obligations therein); and

● except to the extent relating to an SRM Liability, in the case of Jupiter Wellness, or a Jupiter Wellness Liability, in our case, any guarantee, indemnification or contribution obligation, surety bond or other credit support agreement or arrangement for the benefit of Jupiter Wellness or us, respectively.

We will also indemnify, defend and hold harmless the Jupiter Wellness indemnified parties for any losses arising out of or otherwise in connection with any untrue statement or alleged untrue statement of a material fact or omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading, with respect to all information (1) contained in our registration statement on Form S-1, of which this prospectus is a part, or any prospectus (other than information provided by Jupiter Wellness to us specifically for inclusion in our registration statement on Form S-1, of which this prospectus is a part, or any prospectus), (2) contained in any of our public filings with the SEC following this offering or (3) provided by us to Jupiter Wellness specifically for inclusion in Jupiter Wellness's annual or quarterly or current reports following this offering to the extent (A) such information pertains to us or the SRM business or (B) Jupiter Wellness has provided prior written notice to us that such information will be included in one or more annual or quarterly or current reports, specifying how such information will be presented, and the information is included in such annual or quarterly or current reports (except, in the case of clause (B), for liabilities arising out of or resulting from, or in connection with, any action or inaction of any member of Jupiter Wellness, including as a result of any misstatement or omission of any information by Jupiter Wellness to us).

Jupiter Wellness will also indemnify, defend and hold harmless the SRM indemnified parties for any losses arising out of or otherwise in connection with any untrue statement or alleged untrue statement of a material fact or omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading, with respect to all information (1) contained in our registration statement on Form S-1, of which this prospectus is a part, or any prospectus provided by Jupiter Wellness specifically for inclusion therein to the extent such information pertains to (A) Jupiter Wellness or (B) Jupiter Wellness's business (for the avoidance of doubt, other than the SRM business) or (2) provided by Jupiter Wellness to us specifically for inclusion in our annual or quarterly or current reports following this offering to the extent (A) such information pertains to (x) Jupiter Wellness or (y) Jupiter Wellness's business (for the avoidance of doubt, other than the SRM business) or (B) we have provided written notice to Jupiter Wellness that such information will be included in one or more annual or quarterly or current reports, specifying how such information will be presented, and the information is included in such annual or quarterly or current reports (except, in the case of clause (B), for liabilities arising out of or resulting from, or in connection with, any action or inaction of ours, including as a result of any misstatement or omission of any information by us to Jupiter Wellness.

 ****

***Other Provisions***

The separation agreement will also govern other matters related to the consummation of this offering and the distribution, the provision and retention of records, access to information, confidentiality, cooperation with respect to governmental filings and third-party consents and insurance.

 ****

***Termination***

The separation agreement may be terminated and the distribution may be amended, modified or abandoned at any time prior to the separation date by Jupiter Wellness. Jupiter Wellness also has the right to terminate its obligation to complete the distribution at any time for any reason, including if, at any time, Jupiter Wellness's board of directors determines, in its sole discretion that the distribution is not in the best interests of Jupiter Wellness or its stockholders. The separation agreement will provide that, in the event of a termination of the separation agreement on or after the completion of this offering, (1) only the provisions of the separation agreement that obligate the parties to pursue the distribution will terminate and (2) the other provisions of the separation agreement and the other transaction agreements that Jupiter Wellness and we enter into will remain in full force and effect.

***Related Party Transactions***

We will have a general policy that all material transactions with a related party, as well as all material transactions in which there is an actual, or in some cases, perceived, conflict of interest, will be subject to prior review and approval by our Audit Committee and its independent members, who will determine whether such transactions or proposals are fair and reasonable to SRM and its stockholders. In general, potential related-party transactions will be identified by our management and discussed with our Audit Committee at its meetings. Detailed proposals, including, where applicable, financial and legal analyses, alternatives and management recommendations, will be provided to our Audit Committee with respect to each issue under consideration, and decisions will be made by our Audit Committee with respect to the foregoing related-party transactions after opportunity for discussion and review of materials. When applicable, our Audit Committee will request further information and, from time to time, will request guidance or confirmation from internal or external counsel or auditors.

Christopher Marc Melton and Gary Herman each serve as a Director of Jupiter Wellness and SRM. Pursuant to the separation agreement, the amount of individual salaries shall be allocated based on the time incurred on Jupiter Wellness and SRM matters for each employee, such as Douglas McKinnon who serves as CFO of both SRM and Jupiter Wellness. In addition, Brian John, the CEO and Director of Jupiter Wellness and Secretary and Director of SRM, will not take a salary for serving on SRM.

The overlapping directors and officer (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.

The Company may engage in material business transactions with Jupiter Wellness. The Company will renounce its rights to certain business opportunities and the Company's amended and restated articles of incorporation will provide that no Overlap Person will be liable to the Company or its stockholders for breach of any fiduciary duty that would otherwise occur by reason of the fact that any such individual directs a corporate opportunity (other than certain limited types of opportunities set forth in our amended and restated articles of incorporation) to Jupiter Wellness instead of the Company, or does not refer or communicate information regarding such corporate opportunities to the Company. These provisions in our amended and restated articles of incorporation will also expressly validate certain contracts, agreements, arrangements and transactions (and amendments, modifications or terminations thereof) between the Company and Jupiter Wellness and, to the fullest extent permitted by law, will provide that the actions of the Overlap Persons in connection therewith are not breaches of fiduciary duties owed to the Company, any of its subsidiaries or their respective stockholders.

**PRINCIPAL STOCKHOLDERS** 

The following table sets forth information regarding the beneficial ownership of shares of our Common Stock, as of January 31, 2023, after giving effect to the separation (in the case of the "Percentage Prior to this Offering" column, other than the sale of the shares of our Common Stock in this offering and the receipt and application of the proceeds in connection therewith) and assuming the underwriters do not exercise their option to purchase additional shares, by:

● each person, or group of affiliated persons, who is known by us to beneficially own more than 5% of our outstanding Common Stock;

● each of our directors;

● each of our executive officers named in the Summary Compensation Table under "*Executive Compensation* "; and

● all of our directors and executive officers as a group.

Beneficial ownership for the purposes of the following table is determined in accordance with the rules and regulations of the SEC. These rules generally provide that a person is the beneficial owner of securities if they have or share the power to vote or direct the voting thereof, or to dispose or direct the disposition thereof or have the right to acquire such powers within 60 days. Accordingly, the following table does not include options to purchase our Common Stock that are not exercisable within the next 60 days. This table does not reflect any shares of Common Stock that our directors and executive officers may purchase in this offering. Unless otherwise indicated, the address of each beneficial owner listed in the table below is 1061 E Indiantown Road, Suite 110 Jupiter, FL 33477.

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| | | | |
|:---|:---|:---|:---|
| **Name and Address of Beneficial Owner** | **Beneficial<br> Ownership of Our<br> Common Stock** | **Percentage Prior<br> to this Offering** | **Percentage After<br> this Offering** |
| **5% Stockholders** |  |  |  |
| Jupiter Wellness<sup>(1)</sup> | 7300000 | 81.1% |  |
| **Directors and Executive Officers** |  |  |  |
| Richard Miller, Chief Executive Officer and Director | 600000 | 6.7% |  |
| Doug McKinnon, Chief Financial Officer | 200000 | 2.2% |  |
| Taft Flittner, President | 300000 | 3.3% |  |
| Debbie McDaniel-Hand, Vice President of Production Development and Operations | 200000 | 2.2% |  |
| Brian John, Secretary and Chairman | 300000 | 3.3% |  |
| Gary Herman, Director |  |  |  |
| Chris Melton, Director |  |  |  |
| Hans Haywood, Director |  |  |  |
| All directors and executive officers as a group (8 persons) | 1600000 | 17.7% |  |

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\* Less than 1%.

(1) The address of Jupiter Wellness is 1061 E Indiantown Road, Suite 110 Jupiter, FL 33477.

**DESCRIPTION OF CAPITAL STOCK**

The following description summarizes the most important terms of our capital stock, as they are expected to be in effect upon the consummation of this offering. We expect to adopt amended and restated articles of incorporation and amended and restated bylaws in connection with this offering, and this description summarizes the provisions that are expected to be included in such documents. This description is not complete and is qualified by reference to the full text of our amended and restated articles of incorporation and amended and restated bylaws, the forms of which will be filed as exhibits to the registration statement of which this prospectus is a part, as well as the applicable provisions of Nevada law.

Our amended and restated articles of incorporation and our amended and restated bylaws will contain provisions intended to enhance the likelihood of continuity and stability in the composition of our board of directors and that could make it more difficult to acquire control of us by means of a tender offer, open market purchases, a proxy contest or otherwise. For additional information, see the sections titled "*Risk Factors—Risks Related to This Offering and Ownership of Our Common Stock—Certain provisions in our amended and restated articles of incorporation and amended and restated bylaws and of Nevada law may prevent or delay an acquisition of SRM, which could decrease the trading price of our Common Stock*," "*Risk Factors—Risks Related to This Offering and Ownership of Our Common Stock—Our amended and restated articles of incorporation will contain an exclusive forum provision that may discourage lawsuits against us and our directors and officers*" and "*Risk Factors—Risks Related to This Offering and Ownership of Our Common Stock—Our board of directors will have the ability to issue blank check preferred stock, which may discourage or impede acquisition attempts or other transactions*."

**General** 

Upon completion of this offering, our authorized capital stock will consist of:

● 100,000,000 shares of Common Stock, par value $0.001 per share; and

● 10,000,000 shares of preferred stock, par value $0.001 per share, in one or more series.

Upon completion of this offering, there will be outstanding shares of Common Stock (shares if the underwriters exercise their option to purchase additional shares in full), of which shares will be owned by Jupiter Wellness. In addition, upon the completion of this offering, there will be no shares of preferred stock outstanding.

**Common Stock** 

Each holder of our Common Stock will be entitled to one vote for each share on all matters to be voted upon by the Common Stockholders, and there will be no cumulative voting rights. Subject to any preferential rights of any outstanding preferred stock, holders of our Common Stock will be entitled to receive ratably the dividends, if any, as may be declared from time to time by our board of directors out of funds legally available for that purpose. If there is a liquidation, dissolution or winding up of our company, holders of our Common Stock would be entitled to ratable distribution of our assets remaining after the payment in full of liabilities and any preferential rights of any outstanding preferred stock.

Holders of our Common Stock will have no preemptive or conversion rights or other subscription rights, and there are no redemption or sinking fund provisions applicable to the Common Stock. After the initial public offering, all outstanding shares of our Common Stock will be fully paid and non-assessable. The rights, preferences and privileges of the holders of our Common Stock are subject to, and may be adversely affected by, the rights of the holders of shares of any series of preferred stock that we may designate and issue in the future.

**Preferred Stock** 

Under the terms of our amended and restated articles of incorporation, our board of directors will be authorized, subject to limitations prescribed by Nevada law, and by our amended and restated articles of incorporation, to issue up to shares of preferred stock in one or more series without further action by the holders of our Common Stock. Our board of directors will have the discretion, subject to limitations prescribed by Nevada law and by our amended and restated articles of incorporation, to determine the rights, preferences, privileges and restrictions, including voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences, of each series of preferred stock. We have no current plans to issue any shares of preferred stock.

**Anti-Takeover Effects of Various Provisions of Nevada Law and SRM's Amended and Restated Articles of incorporation and Amended and Restated Bylaws** 

Provisions of SRM's amended and restated articles of incorporation and amended and restated bylaws could make it more difficult to acquire SRM by means of a tender offer, a proxy contest or otherwise, or to remove incumbent officers and directors. These provisions, summarized below, are expected to discourage certain types of coercive takeover practices and takeover bids that our board of directors may consider inadequate and to encourage persons seeking to acquire control of SRM to first negotiate with SRM's board of directors. SRM believes that the benefits of increased protection of its ability to negotiate with the proponent of an unfriendly or unsolicited proposal to acquire or restructure it outweigh the disadvantages of discouraging takeover or acquisition proposals because, among other things, negotiation of these proposals could result in an improvement of their terms.

***Nevada Anti-Takeover Statute***

Nevada has enacted the following legislation that may deter or frustrate takeovers of Nevada corporations:

<u>Authorized but Unissued Stock</u> - The authorized but unissued shares of our Common Stock are available for future issuance without stockholder approval. These additional shares may be used for a variety of corporate purposes, including future public offerings to raise additional capital, corporate acquisitions and employee benefit plans. The existence of authorized but unissued shares of Common Stock may enable our board of directors to issue shares of stock to persons friendly to existing management.

<u>Evaluation of Acquisition Proposals</u> - The Nevada Revised Statutes expressly permit our board of directors, when evaluating any proposed tender or exchange offer, any merger, consolidation or sale of substantially all of our assets, or any similar extraordinary transaction, to consider all relevant factors including, without limitation, the social, legal, and economic effects on our employees, customers, suppliers, and other relevant interest holders, and on the communities and geographical areas in which they operate. Our board of directors may also consider the amount of consideration being offered in relation to the then current market price of our outstanding shares of capital stock and our then current value in a freely negotiated transaction.

<u>Control Share Acquisitions</u> - Nevada has adopted a control share acquisitions statute designed to afford stockholders of public corporations in Nevada protection against acquisitions in which a person, entity or group seeks to gain voting control. With enumerated exceptions, the statute provides that shares acquired within certain specific ranges will not possess voting rights in the election of directors unless the voting rights are approved by a majority vote of the public corporation's disinterested stockholders. Disinterested shares are shares other than those owned by the acquiring person or by a member of a group with respect to a control share acquisition, or by any officer of the corporation or any employee of the corporation who is also a director. The specific acquisition ranges that trigger the statute are: acquisitions of shares possessing one-fifth or more but less than one-third of all voting power; acquisitions of shares possessing one-third or more but less than a majority of all voting power; or acquisitions of shares possessing a majority or more of all voting power. Under certain circumstances, the statute permits the acquiring person to call a special stockholders' meeting for the purpose of considering the grant of voting rights to the holder of the control shares. The statute also enables a corporation to provide for the redemption of control shares with no voting rights under certain circumstances.

***Removal of Directors***

Our amended and restated articles of incorporation will provide that, until such time as Jupiter Wellness ceases to be the beneficial owner of shares of our capital stock representing at least a majority of the voting power of all then-outstanding shares of our capital stock entitled generally to vote in the election of directors ("voting stock"), our stockholders may remove our directors with or without cause by an affirmative vote of holders of at least a majority of the voting power of the then-outstanding shares of voting stock. Our amended and restated articles of incorporation will provide that, from and after such time as Jupiter Wellness ceases to be the beneficial owner of shares of our capital stock representing at least a majority of the voting power of all then-outstanding shares of our voting stock, our stockholders may remove our directors only for cause, by an affirmative vote of holders of at least a majority of the voting power of the then-outstanding shares of voting stock.

***Amendments to Articles of incorporation and Bylaws***

Our amended and restated articles of incorporation will provide that it may be amended or altered in any manner provided by Nevada law provided that the amendment of certain provisions will require the approval of at least two-thirds of the voting power of all of the then-outstanding shares of our voting stock. Our amended and restated bylaws may be adopted, amended, altered or repealed by stockholders upon the approval of at least a majority of the voting power of all of the then-outstanding shares of our voting stock, provided that the amendment of certain provisions will require the approval of at least two-thirds of the voting power of all of the then-outstanding shares of stock entitled to vote generally in the election of directors. Additionally, our amended and restated articles of incorporation will provide that our bylaws may be adopted, amended, altered or repealed by the board of directors.

***Size of Board and Vacancies***

Our amended and restated bylaws will provide that the number of directors on our board of directors will be fixed exclusively by our board of directors. Any vacancies on our board of directors resulting from any increase in the authorized number of directors or the death, resignation, retirement, disqualification, removal from office or other cause will be filled by a majority of the board of directors then in office, whether or not less than a quorum. Our amended and restated bylaws will provide that any director appointed to fill a vacancy on our board of directors will be appointed for a term expiring at the next election of the class for which such director has been appointed, and until his or her successor has been elected and qualified.

***Special Stockholder Meetings***

Our amended and restated articles of incorporation will provide that only the chairman of the board of directors, the lead independent director or the chief executive officer or the president, or the board of directors, acting pursuant to a resolution adopted by the majority of the board of directors, may call special meetings of SRM stockholders. Stockholders may not call special stockholder meetings.

***Stockholder Action by Written Consent***

Our amended and restated articles of incorporation will provide that, until such time as Jupiter Wellness ceases to be the beneficial owner of shares of our capital stock representing at least a majority of the voting power of all then-outstanding shares of our voting stock, our stockholders may act by written consent. Our amended and restated articles of incorporation will, from and after such time as Jupiter Wellness ceases to be the beneficial owner of shares of our capital stock representing at least a majority of the voting power of all then-outstanding shares of our voting stock, expressly prohibit the right of our stockholders to act by written consent. From and after such time, stockholder action must take place at the annual or a special meeting of SRM stockholders.

***Requirements for Advance Notification of Stockholder Nominations and Proposals***

Our amended and restated articles of incorporation will mandate that stockholder nominations for the election of directors will be given in accordance with the bylaws. Our amended and restated bylaws will establish advance notice procedures with respect to stockholder proposals and nomination of candidates for election as directors, as well as minimum qualification requirements for stockholders making the proposals or nominations. Additionally, our amended and restated bylaws will require that candidates for election as director disclose their qualifications and make certain representations.

***No Cumulative Voting***

Our amended and restated articles of incorporation will not provide for cumulative voting.

***Undesignated Preferred Stock***

The authority that SRM's board of directors will possess to issue preferred stock could potentially be used to discourage attempts by third parties to obtain control of SRM through a merger, tender offer, proxy contest or otherwise by making such attempts more difficult or more costly. SRM's board of directors may be able to issue preferred stock with voting rights or conversion rights that, if exercised, could adversely affect the voting power of the holders of Common Stock.

***Corporate Opportunities***

Our amended and restated articles of incorporation will contain provisions related to certain corporate opportunities that may be of interest to both us and Jupiter Wellness. These provisions provide that in the event that a director or officer of the Company who is also a director or officer of Jupiter Wellness acquires knowledge of a potential corporate transaction or matter that may be a corporate opportunity for both us and Jupiter Wellness (excluding any corporate opportunity that was presented or became known to such person solely in his or her capacity as a director or officer of the Company, as reasonably determined by such director or officer, unless the Company notifies such person that the Company does not intend to pursue such corporate opportunity):

● the Company renounces any interest in or expectancy with respect to such corporate opportunity if such director or officer presents such opportunity to Jupiter Wellness or does not communicate information regarding such opportunity to the Company because that person has directed the opportunity to Jupiter Wellness; and

● such director or officer may present such corporate opportunity to either the Company or Jupiter Wellness or to both, as such director or officer deems appropriate under the circumstances in such person's sole discretion, and by doing so such director or officer (a) will have fully satisfied and fulfilled such person's duties to the Company and its stockholders with respect to such corporate opportunity, (b) will not be liable to the Company or its stockholders for breach of any statutory or common law duties and (c) will be deemed to have acted in accordance with the standard of care set forth in Nevada law, the DGCL, or any successor statute, or otherwise applicable to directors and officers of a Nevada corporation.

In addition, our amended and restated articles of incorporation will provide that, except as otherwise agreed to in writing by us and Jupiter Wellness:

● neither the Company nor Jupiter Wellness will have any duty to refrain from engaging, directly or indirectly, in the same or similar activities or lines of business as the other company, doing business with any potential or actual customer or supplier of the other company, or employing or engaging or soliciting for employment any director, officer or employee of the other company;

● no director or officer of the Company or Jupiter Wellness will be liable to the other company or to the stockholders of either for breach of any duty by reason of any such activities of the Company or Jupiter Wellness, as applicable, or for the presentation or direction to the Company or Jupiter Wellness of, or participation in, any such activities, by a director or officer of the Company or Jupiter Wellness, as applicable; and

● Jupiter Wellness will have no duty to present any corporate opportunity to us which may be a corporate opportunity for Jupiter Wellness and us, and Jupiter Wellness will not be liable to us or our stockholders for breach of any fiduciary duty as our stockholder by reason of the fact that Jupiter Wellness pursues or acquires that corporate opportunity for itself, directs that corporate opportunity to another person or does not present that corporate opportunity to us.

Our amended and restated articles of incorporation will provide that the foregoing will not be deemed exclusive of any other waiver of a corporate opportunity by the Company or our board of directors. The corporate opportunity provisions in our amended and restated articles of incorporation will cease to apply and have no further force and effect from and after the date that both (1) Jupiter Wellness ceases to be the beneficial owner of shares of our capital stock representing at least a majority of the voting power of all then-outstanding shares of our voting stock and (2) no person who is a director or officer of the Company is also a director or officer of Jupiter Wellness.

**Limitations on Liability, Indemnification of Officers and Directors and Insurance** 

***Elimination of Liability of Directors***

Nevada law authorizes corporations to limit or eliminate the personal liability of directors to corporations and their stockholders for monetary damages for breaches of directors' fiduciary duties as directors, and SRM's amended and restated articles of incorporation will include such an exculpation provision. Our amended and restated articles of incorporation will provide that, to the fullest extent permitted by Nevada law, no director will be personally liable to us or to our stockholders for monetary damages for breach of fiduciary duty as a director. While our amended and restated articles of incorporation will provide directors with protection from awards for monetary damages for breaches of their duty of care, it will not eliminate this duty. Accordingly, our amended and restated articles of incorporation will have no effect on the availability of equitable remedies such as an injunction or rescission based on a director's breach of his or her duty of care. The provisions of our amended and restated articles of incorporation described above apply to an officer of SRM only if he or she is a director of SRM and is acting in his or her capacity as director, and do not apply to officers of SRM who are not directors.

***Indemnification of Directors, Officers and Employees***

Our amended and restated bylaws will require us to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed legal proceeding by reason of the fact that he or she is or was a director or officer of SRM, or is or was a director or officer of SRM serving at the request of SRM as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, against expenses (including attorneys' fees) actually and reasonably incurred by him or her in connection with the defense or settlement of such legal proceeding, if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of SRM.

We will be authorized under our amended and restated bylaws to purchase and maintain insurance on behalf of any person who is or was a director or officer of the corporation, or while a director or officer of SRM, is or was serving at our request in a fiduciary capacity with another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, against any expense, liability or loss, whether or not we would have the power to indemnify the person pursuant to the terms of our amended and restated bylaws.

The limitation of liability and indemnification provisions in our amended and restated articles of incorporation and amended and restated bylaws may discourage stockholders from bringing a lawsuit against our directors for breach of fiduciary duty. These provisions also may reduce the likelihood of derivative litigation against our directors and officers, even though such an action, if successful, might otherwise benefit us and our stockholders. In addition, your investment in our Common Stock may be adversely affected to the extent we pay the costs of settlement and damage awards under these indemnification provisions. There is currently no pending material litigation or proceeding against any SRM directors or officers for which indemnification is sought.

**Exclusive Forum** 

Our amended and restated articles of incorporation will provide that, unless the board of directors otherwise determines, the state courts located within the State of Nevada or, if no state court located in the State of Nevada has jurisdiction, the federal court for the District of Nevada, will be the sole and exclusive forum for any derivative action or proceeding brought on behalf of SRM, any action asserting a claim of breach of a fiduciary duty owed by any director or officer of SRM to SRM or SRM's stockholders, any action asserting a claim against SRM or any director or officer of SRM arising pursuant to any provision of Nevada law or our amended and restated articles of incorporation or amended and restated bylaws, or any action asserting a claim against SRM or any director or officer of SRM governed by the internal affairs doctrine. Our amended and restated articles of incorporation will further provide that the federal district courts of the United States will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act.

**Authorized but Unissued Shares** 

Our authorized but unissued shares of Common Stock and preferred stock will be available for future issuance without your approval. We may use additional shares for a variety of purposes, including future public offerings to raise additional capital, to fund acquisitions and as employee compensation. The existence of authorized but unissued shares of Common Stock and preferred stock could render more difficult or discourage an attempt to obtain control of SRM by means of a proxy contest, tender offer, merger or otherwise.

**Listing** 

We have applied to list our shares of Common Stock on the Nasdaq under the symbol "[●]."

**Transfer Agent and Registrar** 

The transfer agent and registrar for SRM's Common Stock will be VStock Transfer, LLC.

**SHARES ELIGIBLE FOR FUTURE SALE**

We cannot predict with certainty the effect, if any, that market sales of shares of our Common Stock or the availability of shares of our Common Stock for sale will have on the market price prevailing from time to time. We also cannot predict with certainty whether or when the distribution or other disposition will occur, or if Jupiter Wellness will otherwise sell its remaining shares of our Common Stock. The sale of substantial amounts of our Common Stock in the public market or the perception that such sales could occur could adversely affect the prevailing market price of our Common Stock and our ability to raise equity capital in the future.

Upon completion of this offering, we will have shares of our Common Stock outstanding (shares of our Common Stock if the underwriters exercise their option to purchase additional shares in full). This includes shares of Common Stock (shares of our Common Stock if the underwriters exercise their option to purchase additional shares in full) that we are selling in this offering, which shares may be resold in the public market immediately following this offering unless purchased by our affiliates.

The shares of Common Stock that are not offered in this offering, as well as shares reserved for future issuance under our stock plans, will be "restricted securities," as that term is defined in Rule 144 under the Securities Act. These restricted securities are eligible for public sale only if they are registered under the Securities Act or if they qualify for an exemption from registration under the Securities Act.

**Rule 144** 

In general, under Rule 144 as in effect on the date of this prospectus, beginning 90 days after the date of this prospectus a person (or persons whose shares of our Common Stock are required to be aggregated) who is an affiliate of ours is entitled to sell in any three-month period a number of shares of our Common Stock that does not exceed the greater of:

● 1% of the number of shares of our Common Stock then outstanding, which will equal approximately shares immediately after completion of this offering; or

● the average weekly trading volume in the shares of our Common Stock on the Nasdaq during the four calendar weeks preceding the filing of a notice on Form 144 with respect to such a sale, except that, in case of restricted securities, at least six months have elapsed since the later of the date such shares were acquired from us or any of our affiliates.

Sales by our affiliates under Rule 144 are also subject to manner of sale provisions and notice requirements and to the availability of current public information about us. An "affiliate" of ours is a person that directly, or indirectly through one or more intermediaries, controls, is controlled by or is under common control with us.

Under Rule 144, a person (or persons whose shares are required to be aggregated) who is not deemed to have been an affiliate of ours at any time during the 90 days preceding a sale, and who holds shares of our Common Stock that are restricted securities, may sell such shares provided that at least six months have elapsed since the later of the date such shares were acquired from us or from any of our affiliates and subject to the availability of current information about us. If at least one year has elapsed since the later of the date such shares of our Common Stock were acquired from us or from any of our affiliates, such non-affiliate of ours may sell such shares without restriction under Rule 144.

**Lock-Up Agreements** 

We, Jupiter Wellness and our executive officers and directors intend to agree with the underwriters not to dispose of any of our Common Stock or securities convertible into or exchangeable for shares of our Common Stock for 180 days, in the case of Jupiter Wellness, and for 180 days, in our case and the case of our directors and executive officers, after the date of this prospectus, except with the prior written consent of EF Hutton, except for sales of Common Stock to our parent company, Jupiter Wellness, to the extent necessary to enable it to maintain ownership of at least % of our outstanding Common Stock until the occurrence of the distribution. See the section titled "*Certain Relationships and Related Party Transactions—Relationship with Jupiter Wellness*." Any such shares acquired by Jupiter Wellness would be subject to the lock-up agreement that Jupiter Wellness intends to enter into described above. EF Hutton, on behalf of the underwriters may, at any time, waive these restrictions.

See the section titled "*Underwriting*" for a more detailed description of the lock-up agreements that we, Jupiter Wellness and our executive officers and directors will enter into with the underwriters.

**Registration Statement** 

We intend to file a registration statement on Form S-8 under the Securities Act covering all of the shares of our Common Stock reserved for future issuance under our stock plans. We expect to file this registration statement as soon as practicable after this offering. Upon effectiveness, the shares of Common Stock covered by that registration statement will be eligible for sale in the public market, subject to the lock-up agreements described herein.

**The Distribution** 

Following this offering, Jupiter Wellness will own shares of our Common Stock, representing approximately % of the outstanding shares of our Common Stock (or approximately % if the underwriters exercise their option to purchase additional shares in full). Jupiter Wellness has informed us that, at some time in the future, but no earlier than the expiration or earlier termination of the 180 day lock-up period applicable to Jupiter Wellness described under the section titled "*Underwriting*," it intends to effect a distribution of its remaining ownership interest in us to its stockholders in a transaction that is generally expected to be tax-free for U.S. federal income tax purposes. Jupiter Wellness has no obligation to effect the distribution, and it may retain its ownership interest in us indefinitely or dispose of all or a portion of its ownership interest in us in a sale or other transaction. Any such distribution or other disposition by Jupiter Wellness of its remaining interest in us (each, an "other disposition") would be subject to market, tax and legal considerations, final approval by the Jupiter Wellness board of directors and other customary requirements. Jupiter Wellness has no obligation to pursue or consummate any further disposition of its ownership interest in us by any specified date or at all.

**MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES FOR**

**NON-U.S. HOLDERS OF OUR COMMON STOCK**

The following is a general discussion of material U.S. federal income tax considerations with respect to the ownership and disposition of shares of our Common Stock applicable to non-U.S. holders (as defined below) who acquire such shares in this offering and hold such shares as a capital asset within the meaning of Section 1221 of the Code (generally, property held for investment).

For purposes of this discussion, a "non-U.S. holder" means a beneficial owner of our Common Stock (other than an entity or arrangement that is treated as a partnership for U.S. federal income tax purposes) that is not, for U.S. federal income tax purposes, any of the following:

● an individual citizen or resident of the United States;

● a corporation created or organized in the United States or under the laws of the United States, any state thereof or the District of Columbia;

● an estate, the income of which is includible in gross income for U.S. federal income tax purposes regardless of its source; or

● a trust if (1) a court within the United States is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust or (2) such trust has made a valid election to be treated as a U.S. person for U.S. federal income tax purposes.

This discussion is based on current provisions of the Code, the Treasury regulations promulgated thereunder, judicial opinions, published positions of the IRS and other applicable authorities, each as of the date hereof. All of these authorities are subject to change and differing interpretations, possibly with retroactive effect, and any such change or differing interpretation could result in U.S. federal income tax consequences different from those discussed below. This discussion does not address all aspects of U.S. federal income taxation that may be relevant to a particular non-U.S. holder in light of such non-U.S. holder's individual circumstances. This discussion may not apply, in whole or in part, to particular non-U.S. holders in light of their individual circumstances or to holders subject to special treatment under the U.S. federal income tax laws (such as, for example, insurance companies, tax-exempt organizations, financial institutions, brokers or dealers in securities, "controlled foreign corporations," "passive foreign investment companies," partnerships (or other entities or arrangements treated as partnerships) for U.S. federal income tax purposes or other "flow-through" entities or investors therein, non-U.S. holders that hold our Common Stock as part of a straddle, hedge, conversion transaction or other integrated investment, and certain U.S. expatriates). This discussion also does not address any considerations under U.S. federal tax laws other than those pertaining to the income tax, nor does it address any considerations under any state, local or non-U.S. tax laws. In addition, this discussion does not address any considerations with respect to the Foreign Account Tax Compliance Act of 2010 (including the Treasury regulations promulgated thereunder, any intergovernmental agreements entered in connection therewith and any laws, regulations or practices adopted in connection with any such agreement). Prospective investors should consult with their own tax advisors as to the particular tax consequences to them of the ownership and disposition of shares of our Common Stock, including with respect to the applicability and effect of any U.S. federal, state, local or non-U.S. income tax laws or any tax treaty, and any changes (or proposed changes) in tax laws or interpretations thereof.

If a partnership (or other entity or arrangement treated as a partnership for U.S. federal income tax purposes) holds our Common Stock, the tax treatment of a partner in such partnership will generally depend on the status of the partner and the activities of the partnership. Persons who are, for U.S. federal income tax purposes, treated as partners in a partnership holding our Common Stock should consult their tax advisor as to the particular U.S. federal income tax consequences applicable to them.

**THIS DISCUSSION IS FOR GENERAL INFORMATION PURPOSES ONLY AND IS NOT INTENDED TO CONSTITUTE A COMPLETE DESCRIPTION OF ALL TAX CONSEQUENCES FOR NON-U.S. HOLDERS RELATING TO THE OWNERSHIP AND DISPOSITION OF OUR COMMON STOCK. PROSPECTIVE HOLDERS OF OUR COMMON STOCK SHOULD CONSULT WITH THEIR OWN TAX ADVISORS REGARDING THE PARTICULAR TAX CONSEQUENCES TO THEM OF THE OWNERSHIP AND DISPOSITION OF OUR COMMON STOCK, INCLUDING WITH RESPECT TO THE APPLICABILITY AND EFFECT OF ANY U.S. FEDERAL, STATE, LOCAL OR NON-U.S. INCOME AND OTHER TAX LAWS.** 

**Dividends** 

In general, subject to the discussion below regarding "effectively connected" dividends, any distribution we make to a non-U.S. holder with respect to shares of our Common Stock that constitutes a dividend for U.S. federal income tax purposes will be subject to U.S. withholding tax at a rate of 30% of the gross amount, unless the non-U.S. holder is eligible for an exemption from, or reduced rate of, such withholding tax under an applicable tax treaty and the non-U.S. holder provides proper certification of its eligibility for such exemption or reduced rate. A distribution with respect to shares of our Common Stock will constitute a dividend for U.S. federal income tax purposes to the extent of our current or accumulated earnings and profits as determined for U.S. federal income tax purposes. Any distribution not constituting a dividend will be treated first as reducing the adjusted basis in the non-U.S. holder's shares of our Common Stock and, to the extent it exceeds the adjusted basis in the non-U.S. holder's shares of our Common Stock, as gain from the sale or exchange of such stock.

Dividends we pay to a non-U.S. holder that are effectively connected with the conduct of a trade or business by such non-U.S. holder within the United States (and, if required by an applicable income tax treaty, are attributable to a permanent establishment of such non-U.S. holder in the United States) will not be subject to U.S. withholding tax, as described above, if the non-U.S. holder complies with applicable certification and disclosure requirements. Instead, such dividends generally will be subject to U.S. federal income tax on a net income basis, in the same manner as if the non-U.S. holder were a United States person as defined under the Code. Any such "effectively connected" dividends received by a foreign corporation for U.S. federal income tax purposes may be subject to an additional branch profits tax at a rate of 30% (or such lower rate as may be specified by an applicable tax treaty).

**Gain on Sale or Other Disposition of Common Stock** 

In general, a non-U.S. holder will not be subject to U.S. federal income tax on any gain realized upon the sale or other disposition of the non-U.S. holder's shares of our Common Stock unless:

● the gain is effectively connected with a trade or business conducted by the non-U.S. holder within the United States (and, if required by an applicable tax treaty, is attributable to a U.S. permanent establishment of such non-U.S. holder in the United States);

● the non-U.S. holder is an individual and is present in the United States for 183 days or more in the taxable year of disposition and certain other conditions are met; or

● we are or have been a U.S. real property holding corporation (which we refer to as an "USRPHC") for U.S. federal income tax purposes at any time during the shorter of the five-year period ending on the date of such disposition or such non-U.S. holder's holding period of such shares of our Common Stock.

Gain described in the first bullet point above generally will be subject to U.S. federal income tax, net of certain deductions, at regular U.S. federal income tax rates, generally in the same manner as if the non-U.S. holder were a United States person as defined under the Code. If the non-U.S. holder is a foreign corporation for U.S. federal income tax purposes, the branch profits tax described above also may apply to such effectively connected gain.

Gain described in the second bullet point above generally will be subject to a flat 30% tax, which gain may be offset by U.S. source capital losses, if any, of the non-U.S. holder.

We believe we are not, and do not anticipate becoming, a USRPHC for U.S. federal income tax purposes. However, no assurance can be given that we are not or will not become a USRPHC. If we were or were to become a USRPHC, however, any gain recognized on a sale or other disposition of our Common Stock by a non-U.S. holder that did not own (directly, indirectly or constructively) more than 5% of our Common Stock during the applicable period would not be subject to U.S. federal income tax, provided that our Common Stock is "regularly traded on an established securities market" (within the meaning of Section 897(c)(3) of the Code).

**Backup Withholding, Information Reporting and Other Reporting Requirements** 

We must report annually to the IRS and to each non-U.S. holder the amount of dividends paid to such non-U.S. holder and the tax withheld with respect to such dividends. These reporting requirements apply regardless of whether withholding was reduced or eliminated by an applicable tax treaty. Copies of any such information returns may also be made available to the tax authorities in the country in which the non-U.S. holder resides or is established under the provisions of an applicable income tax treaty or agreement.

A non-U.S. holder will generally be subject to backup withholding (currently at a rate of 24%) on dividends paid with respect to such non-U.S. holder's shares of our Common Stock unless such holder certifies under penalties of perjury that, among other things, it is a non-U.S. holder (and the payor does not have actual knowledge or reason to know that such holder is a U.S. person as defined under the Code).

Information reporting and backup withholding generally is not required with respect to any proceeds from the sale or other disposition of our Common Stock by a non-U.S. holder outside the United States through a foreign office of a foreign broker that does not have certain specified connections to the United States. However, if a non-U.S. holder sells or otherwise disposes of its shares of our Common Stock through a U.S. broker or the U.S. offices of a foreign broker, the broker will generally be required to report the amount of proceeds paid to the non-U.S. holder to the IRS, and may also be required to backup withhold on such proceeds unless such non-U.S. holder certifies under penalties of perjury that, among other things, it is a non-U.S. holder (and the payor does not have actual knowledge or reason to know that such holder is a U.S. person as defined under the Code). Information reporting will also apply if a non-U.S. holder sells its shares of our Common Stock through a foreign broker with certain specified connections to the United States, unless such broker has documentary evidence in its records that such non-U.S. holder is a non-U.S. person and certain other conditions are met, or such non-U.S. holder otherwise establishes an exemption (and the payor does not have actual knowledge or reason to know that such holder is a U.S. person as defined under the Code).

Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules from a payment to a non-U.S. holder can be credited against the non-U.S. holder's U.S. federal income tax liability, if any, or refunded, provided that the required information is furnished to the IRS in a timely manner. Non-U.S. holders should consult their tax advisors regarding the application of the information reporting and backup withholding rules to them.

**UNDERWRITING**

We intend to enter into an underwriting agreement with EF Hutton, division of Benchmark Investments, LLC ("EF Hutton" or "Representative"), who is acting as the lead managing underwriter and sole book running manager in connection with this offering, with respect to the offering of shares of Common Stock. Under the terms and subject to the conditions in the underwriting agreement between us and the Representative, we have agreed to issue and sell to the underwriters, and the underwriters have agreed to purchase, at the public offering price less the underwriting discounts set forth on the cover page of this prospectus, the number of shares of Common Stock listed next to its name in the following table, other than those shares of Common Stock covered by the over-allotment option described below:

---

| | |
|:---|:---|
|  | **Number of <br> Shares** |
| EF Hutton, division of Benchmark Investments, LLC |  |
| Total |  |

---

The underwriters are committed to purchase all of the securities offered by us other than those covered by the over-allotment option described below, if it purchases any securities. The obligations of the underwriters may be terminated upon the occurrence of certain events specified in the underwriting agreement. Furthermore, pursuant to the underwriting agreement, the underwriters' obligations are subject to customary conditions, representations, and warranties contained in the underwriting agreement, such as receipt by the underwriters of officers' certificates and legal opinions.

We have agreed to indemnify the underwriters against certain liabilities, including liabilities under the Securities Act, or to contribute to payments the underwriters may be required to make in respect of those liabilities.

The underwriters are offering the shares, subject to prior sale, when, as and if issued to and accepted by them, subject to approval of legal matters by their counsel, including the validity of the shares, and other conditions contained in the underwriting agreement, such as the receipt by the underwriters of officer's certificates and legal opinions. The underwriters reserve the right to withdraw, cancel or modify offers to the public and to reject orders in whole or in part.

**Over-Allotment Option**

We have granted to the Representative an over-allotment option. This option, which is exercisable for up to 45 days from the date of this prospectus, permits the Representative to purchase up to an additional shares of Common Stock (fifteen (15%) of the shares of Common Stock sold in this offering) at the public offering price listed on the cover page of this prospectus, less the underwriting discounts and commissions. The Representative may exercise this option solely for the purpose of covering over-allotments, if any, made in connection with the offering of the shares of Common Stock offered by this prospectus. If the Representative exercises the option in whole or in part, then the underwriters will be severally committed, subject to the conditions described in the underwriting agreement, to purchase the additional shares of Common Stock in proportion to their respective commitments set forth in the prior table.

**Commissions and Discounts** 

The representatives have advised us that the underwriters propose initially to offer the shares to the public at the public offering price set forth on the cover page of this prospectus and to dealers at that price less a concession not in excess of $ per share. After the initial offering, the public offering price, concession or any other term of this offering may be changed.

The following table shows the public offering price, underwriting discount and proceeds before expenses to us. The information assumes either no exercise or full exercise by the underwriters of their option to purchase additional shares.

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| | | | |
|:---|:---|:---|:---|
|  | **Per Share** | **Without Option** | **With Option** |
| Public offering price | $| $| $|
| Underwriting discount | $| $| $|
| Proceeds, before expenses, to us | $| $| $|

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We have also agreed to reimburse the underwriters for certain of their expenses relating to the offering including but not limited to the following: (a) all filing fees and communication expenses associated with the review of this offering by FINRA; (b) all fees, expenses and disbursements relating to the registration, qualification or exemption of securities offered under the securities laws of foreign jurisdictions designated by the underwriters, including the reasonable fees and expenses of the underwriters' blue sky counsel; (c) up to $20,000 of the Representative's actual accountable road show expenses for the offering; (d) $29,500 for the underwriters' use of Ipreo's book-building, prospectus tracking and compliance software for this offering; (e) the costs associated with bound volumes of the public offering materials as well as commemorative mementos and lucite tombstones not to exceed $5,000; and (f) the fees and expenses of the Representatives' legal counsel incurred in connection with this offering in an amount up to $175,000.

We have also agreed to pay the Representative a non-accountable expense allowance equal to one percent (1.0%) of the gross proceeds received from the sale of shares of Common Stock. The non-accountable expense allowance will be paid through a deduction from the net proceeds of the offering.

The expenses of this offering, not including the underwriting discount, are estimated at $ and are payable by us.

**Representative's Warrants**

We have agreed to issue to the Representative, upon the closing of this offering, warrants to purchase up to an aggregate of shares of Common Stock (five percent (5.0%) of the shares of Common Stock sold in this offering, including any shares of Common Stock sold upon exercise of the Representative's over-allotment option). The Representative's Warrants are exercisable at a per share price equal to 100% of the public offering price per share in this offering. The Representative's Warrants are exercisable at any time and from time to time, in whole or in part, commencing on the six month anniversary of the effective date of the registration statement of which this prospectus is a part and expiring on the date that is five years following the effective date of the registration statement of which this prospectus is a part.

The Representative's Warrants are deemed underwriter compensation by FINRA and are therefore subject to a 180-day lock-up pursuant to FINRA Rule 5110(g)(1). The Representative (or permitted assignees under Rule 5110(g)(1)) will not sell, transfer, assign, pledge, or hypothecate these warrants or the securities underlying these warrants, nor will they engage in any hedging, short sale, derivative, put, or call transaction that would result in the effective economic disposition of the warrants or the underlying securities for a period of 180 days from the effective date of this offering. In addition, the Representative's Warrants provide for a one-time demand registration right. The one-time demand registration right provided will not be greater than five years from the commencement of sales of this offering in compliance with FINRA Rule 5110(f)(2)(G)(iv). The piggyback registration right provided will not be greater than seven years from the commencement of sales of this offering in compliance with FINRA Rule 5110(f)(2)(G)(v). We will bear all fees and expenses attendant to registering the securities issuable on exercise of the Representative's Warrants other than underwriting commissions incurred and payable by the holders. The exercise price and number of shares of Common Stock issuable upon exercise of the Representative's Warrants may be adjusted in certain circumstances including in the event of a stock dividend or our recapitalization, reorganization, merger, or consolidation. However, neither the Representative Warrant exercise price, nor the number of shares of Common Stock underlying such warrants, will be adjusted for issuances of shares of Common Stock by the Company at a price below the exercise price of the Representative's Warrants.

**No Sales of Similar Securities** 

We, Jupiter Wellness and our executive officers and directors have agreed not to sell or transfer any Common Stock or securities convertible into, exchangeable for, exercisable for, or repayable with Common Stock, for 180 days, in the case of Jupiter Wellness, and for 180 days, in our case and the case of our directors and executive officers, after the date of this prospectus without first obtaining the written consent of EF Hutton Specifically, we and these other persons have agreed, with certain limited exceptions, not to directly or indirectly

● offer, pledge, sell or contract to sell any Common Stock,

● sell any option or contract to purchase any Common Stock,

● purchase any option or contract to sell any Common Stock,

● grant any option, right or warrant for the sale of any Common Stock,

● lend or otherwise dispose of or transfer any Common Stock,

● request or demand that we file or make a confidential submission of a registration statement related to the Common Stock, or

● enter into any swap or other agreement that transfers, in whole or in part, the economic consequence of ownership of any Common Stock whether any such swap or transaction is to be settled by delivery of shares or other securities, in cash or otherwise.

This lock-up provision applies to Common Stock and to securities convertible into or exchangeable or exercisable for or repayable with Common Stock. It also applies to Common Stock owned now or acquired later by the person executing the agreement or for which the person executing the agreement later acquires the power of disposition.

**Tail Financing**

We have granted the Representative the right, for a period of twelve (12) months after the termination of the Representative's engagement with us, to receive a cash fee equal to eight percent (8.0%) of the gross proceeds received by us from the sale of any equity, debt and/or equity derivative instruments to any investor actually introduced by the Representative to the Company in connection with any public or private financing or capital raise, provided that such transaction is by a party actually introduced to us in an offering in which we have direct knowledge of such party's participation.

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**Right of First Refusal**

Until (twelve (12) months after the closing date of this offering), the Representative shall have an irrevocable right of first refusal to act as sole investment banker, sole book-runner, and/or sole placement agent, at the Representative's sole discretion, for each and every future public and private equity debt offering, including all equity linked financings, on terms customary to the Representative. The Representative will have the sole right to determine whether or not any other broker dealer will have the right to participate in such offering and the economic terms of such participation. The Company will not retain, engage or solicit any additional investment banker, book-runner, financial advisor, underwriter and/or placement agent in connection with such transactions without the written consent of the Representative. The right of first refusal may be terminated by the Company for "cause" as defined in the Underwriting Agreement.

**Listing** 

We have applied to list our Common Stock for trading on Nasdaq under the symbol "[●]." We cannot guarantee that our Common Stock will be approved for listing on Nasdaq. However, the consummation of this offering and the distribution are contingent on such approval by Nasdaq. We will not consummate this offering or the distribution unless our Common Stock is so listed.

 **Determination of Initial Public Offering Price**

Before this offering, there has been no public market for our Common Stock. The initial public offering price will be determined through negotiations between us and the representatives. In addition to prevailing market conditions, the factors to be considered in determining the initial public offering price are:

● the valuation multiples of publicly traded companies that the representatives believe to be comparable to us,

● our financial information,

● the history of, and the prospects for, our company and the industry in which we compete,

● an assessment of our management, its past and present operations, and the prospects for, and timing of, our future revenues,

● the present state of our development and

● the above factors in relation to market values and various valuation measures of other companies engaged in activities similar to ours.

An active trading market for the shares of Common Stock may not develop. It is also possible that after this offering the shares of Common Stock will not trade in the public market at or above the initial public offering price.

**Price Stabilization, Short Positions and Penalty Bids** 

Until the distribution of the shares is completed, SEC rules may limit underwriters and selling group members from bidding for and purchasing our Common Stock. However, the representatives may engage in transactions that stabilize the price of the Common Stock, such as bids or purchases to peg, fix or maintain that price.

The underwriters may also impose a penalty bid. This occurs when a particular underwriter repays to the underwriters a portion of the underwriting discount received by it because the representatives have repurchased shares sold by or for the account of such underwriter in stabilizing or short covering transactions.

Similar to other purchase transactions, the underwriters' purchases to cover the syndicate short sales may have the effect of raising or maintaining the market price of shares of our Common Stock or preventing or retarding a decline in the market price of shares of our Common Stock. As a result, the price of shares of our Common Stock may be higher than the price that might otherwise exist in the open market. The underwriters may conduct these transactions on the Nasdaq, in the over-the-counter market or otherwise.

Neither we nor any of the underwriters make any representation or prediction as to the direction or magnitude of any effect that the transactions described above may have on the price of shares of our Common Stock. In addition, neither we nor any of the underwriters make any representation that the representatives will engage in these transactions or that these transactions, once commenced, will not be discontinued without notice.

**Electronic Distribution** 

A prospectus in electronic format may be made available on the websites maintained by one or more of the underwriters or selling group members. The Representative may agree to allocate a number of securities to underwriters and selling group members for sale to its online brokerage account holders. Internet distributions will be allocated by the underwriters and selling group members that will make internet distributions on the same basis as other allocations. Other than the prospectus in electronic format, the information on these websites is not part of, nor incorporated by reference into, this prospectus or the registration statement of which this prospectus forms a part, has not been approved or endorsed by us, and should not be relied upon by investors.

**Other Relationships** 

The underwriters and their respective affiliates are full-service financial institutions engaged in various activities, which may include securities trading, commercial and investment banking, financial advisory, investment management, investment research, principal investment, hedging, financing and brokerage activities. The underwriters and certain of their affiliates may, in the future, provide investment and commercial banking and financial advisory services to us and our affiliates in the ordinary course of business, for which they may receive customary fees and commissions. In the ordinary course of their various business activities, the underwriters and their respective affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for their own account and for the accounts of their customers, and such investment and securities activities may involve securities and/or instruments of ours. The underwriters and their respective affiliates may also make investment recommendations and/or publish or express independent research views in respect of such securities or instruments and may at any time hold, or recommend to clients that they acquire, long and/or short positions in such securities and instruments.

**Selling Restrictions Outside the United States**

No action has been taken in any jurisdiction (except in the United States) that would permit a public offering of the Common Stock the possession, circulation or distribution of this prospectus or any other material relating to us or the Common Stock in any jurisdiction where action for that purpose is required. Accordingly, the Common Stock may not be offered or sold, directly or indirectly, and neither this prospectus nor any other material or advertisements in connection with the Common Stock may be distributed or published, in or from any country or jurisdiction except in compliance with any applicable laws, rules and regulations of any such country or jurisdiction.

***Japan.*** Shares of Common Stock have not been and will not be registered under the Financial Instruments and Exchange Law of Japan (Law No. 25 of 1948, as amended) and, accordingly, will not be offered or sold directly or indirectly in Japan or to, or for the benefit of any Japanese person or to others, for re-offering or re-sale directly or indirectly in Japan or to any Japanese person, except in each case pursuant to an exemption from the registration requirements of, and otherwise in compliance with, the Securities and Exchange Law of Japan and any other applicable laws, rules and regulations of Japan. For purposes of this paragraph, "Japanese person" means any person resident in Japan, including any corporation or other entity organized under the laws of Japan.

***Malaysia.*** No prospectus or other offering material or document in connection with the offer and sale of the Common Stock has been or will be registered with the Securities Commission of Malaysia (the "Malaysia Commission") for the Malaysia Commission's approval pursuant to the Capital Markets and Services Act 2007. Accordingly, this prospectus and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the Common Stock may not be circulated or distributed, nor may the Common Stock be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Malaysia other than (i) a closed end fund approved by the Malaysia Commission; (ii) a holder of a Capital Markets Services License; (iii) a person who acquires the Common Stock, as principal, if the offer is on terms that the Common Stock may only be acquired at a consideration of not less than RM 250,000 (or its equivalent in foreign currencies) for each transaction; (iv) an individual whose total net personal assets or total net joint assets with his or her spouse exceeds RM 3 million (or its equivalent in foreign currencies), excluding the value of the primary residence of the individual; (v) an individual who has a gross annual income exceeding RM 300,000 (or its equivalent in foreign currencies) per annum in the preceding twelve months; (vi) an individual who, jointly with his or her spouse, has a gross annual income of RM 400,000 (or its equivalent in foreign currencies), per annum in the preceding twelve months; (vii) a corporation with total net assets exceeding RM 10 million (or its equivalent in a foreign currencies) based on the last audited accounts; (viii) a partnership with total net assets exceeding RM 10 million (or its equivalent in foreign currencies); (ix) a bank licensee or insurance licensee as defined in the Labuan Financial Services and Securities Act 2010; (x) an Islamic bank licensee or takaful licensee as defined in the Labuan Financial Services and Securities Act 2010; and (xi) any other person as may be specified by the Malaysia Commission; provided that, in the each of the preceding categories (i) to (xi), the distribution of the Common Stock is made by a holder of a Capital Markets Services License who carries on the business of dealing in securities. The distribution in Malaysia of this prospectus is subject to Malaysian laws. This prospectus does not constitute and may not be used for the purpose of public offering or an issue, offer for subscription or purchase, invitation to subscribe for or purchase any securities requiring the registration of a prospectus with the Malaysia Commission under the Capital Markets and Services Act 2007.

***People's Republic of China.*** This prospectus may not be circulated or distributed in the PRC and the Common Stock may not be offered or sold, and will not offer or sell to any person for re-offering or resale directly or indirectly to any resident of the PRC except pursuant to applicable laws, rules and regulations of the PRC. For the purpose of this paragraph only, the PRC does not include Taiwan and the special administrative regions of Hong Kong and Macau.

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***Taiwan.*** The Common Stock has not been and will not be registered with the Financial Supervisory Commission of Taiwan pursuant to relevant securities laws and regulations and may not be sold, issued or offered within Taiwan through a public offering or in circumstances which constitutes an offer within the meaning of the Securities and Exchange Act of Taiwan that requires a registration or approval of the Financial Supervisory Commission of Taiwan. No person or entity in Taiwan has been authorized to offer, sell, give advice regarding or otherwise intermediate the offering and sale of the Common Stock in Taiwan.

***Philippines*.** This prospectus may not be circulated or distributed in the Philippines and the Common Stock may not be offered or sold, and will not offer or sell to any person for re-offering or resale directly or indirectly to any resident of the Philippines except pursuant to applicable laws, rules and regulations of the Philippines.

**LEGAL MATTERS**

The validity of the shares of Common Stock offered hereby and certain legal matters in connection with this offering and the Distribution will be passed on for us by Sichenzia Ross Ference LLP, New York, New York. Certain legal matters will be passed on for the underwriters by Sullivan & Worcester LLP.

**EXPERTS**

The financial statements of SRM Entertainment, Inc. as of September 30, 2022 and for the period from inception (April 28, 2022) to September 30, 2022 and the financial statements of SRM Limited as of December 31, 2021 and 2020 and for each of the two years in the period ended December 31, 2021 included in this prospectus have been so included in reliance on the report of M&K CPAs LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.

**WHERE YOU CAN FIND MORE INFORMATION** 

We have filed a Registration Statement on Form S-1 with the SEC regarding this offering. You should rely only on the information contained in this prospectus. We have not, and the underwriter has not, authorized anyone to provide you with any information other than that contained in this prospectus or in any applicable prospectus supplement or free writing prospectus prepared by or on behalf of us to which we have referred you. We are offering to sell, and seeking offers to buy, the securities covered hereby only in jurisdictions where offers and sales are permitted. We are not, and the underwriter is not, making an offer of these securities in any jurisdiction where the offer is not permitted. You should not assume that the information contained in this prospectus or any prospectus supplement or free writing prospectus is accurate as of any date other than the date on the front cover of those documents. Our business, financial condition, results of operations and prospects may have changed since those dates.

For investors outside the United States: We have not, and the underwriter has not, taken any action that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of the securities covered hereby the distribution of this prospectus outside the United States.

Information contained in, and that can be accessed through our website, <u>https://www.srmentertainment.com/</u>, shall not be deemed to be part of this prospectus or incorporated herein by reference and should not be relied upon by any prospective investors for the purposes of determining whether to purchase the shares offered hereunder.

You may retrieve any of our filings with the SEC by visiting the website maintained by the SEC at www.sec.gov. You may also request a copy of these filings, at no cost, by writing or telephoning us at 1061 E Indiantown Road, Suite 110, Jupiter, FL 33477, 407-230-8100.

**INDEX TO FINANCIAL STATEMENTS** 

---

| | |
|:---|:---|
|  | Page |
| **SRM Entertainment, Inc.** |  |
| &nbsp;&nbsp;&nbsp;[Report of Independent Registered Public Accounting Firm](#a_001) | F-2 |
| &nbsp;&nbsp;&nbsp;[Balance Sheet as of September 30, 2022](#a_002) | F-3 |
| &nbsp;&nbsp;&nbsp;[Statements of Operations from inception to September 30, 2022](#a_003) | F-4 |
| &nbsp;&nbsp;&nbsp;[Statements of Deficit from inception to September 30, 2022](#a_004) | F-5 |
| &nbsp;&nbsp;&nbsp;[Statements of Cash Flows inception to September 30, 2022](#a_005) | F-6 |
| &nbsp;&nbsp;&nbsp;[Notes to Financial Statements](#a_006) | F-7 |
| **SRM Entertainment Limited** |  |
| &nbsp;&nbsp;&nbsp;[Report of Independent Registered Public Accounting Firm](#ty_001) | F-11 |
| &nbsp;&nbsp;&nbsp;[Condensed Balance Sheet as of December 31, 2021 and 2020](#a_007) | F-12 |
| &nbsp;&nbsp;&nbsp;[Condensed Statements of Operations for the years ended December 31, 2021 and 2020](#a_008) | F-13 |
| &nbsp;&nbsp;&nbsp;[Condensed Statements of Equity for the years ended December 31, 2021 and 2020](#a_009) | F-14 |
| &nbsp;&nbsp;&nbsp;[Condensed Statements of Cash Flows for the years ended December 31, 2021 and 2020](#a_010) | F-15 |
| &nbsp;&nbsp;&nbsp;[Notes to Financial Statements](#a_011) | F-16 |
| **SRM Entertainment Limited (Unaudited)** |  |
| &nbsp;&nbsp;&nbsp;[Balance Sheet as of September 30, 2022 and December 31, 2022](#a_012) | F-21 |
| &nbsp;&nbsp;&nbsp;[Statement of Operations for the nine months ended September 30, 2022 and 2021](#a_013) | F-22 |
| &nbsp;&nbsp;&nbsp;[Statement of Equity for the for the nine months ended September 30, 2022 and year ended December 31, 2021](#a_014) | F-23 |
| &nbsp;&nbsp;&nbsp;[Statement of Cash Flows for the nine months ended September 30, 2022 and 2021](#a_015) | F-24 |
| &nbsp;&nbsp;&nbsp;[Notes to Financial Statements](#a_016) | F-25 |

---

![](aud_001.jpg)

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and

Stockholders of SRM Entertainment, Inc.

**Opinion on the Consolidated Financial Statements**

We have audited the accompanying balance sheets of SRM Entertainment, Inc. (the Company) for the period from inception (April 28, 2022) to September 30, 2022, and the related statements of operations, shareholders' deficit, and cash flows for the period from inception to September 30, 2022, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of September 30, 2022, and the results of its operations and its cash flows for period from inception to September 30, 2022, in conformity with accounting principles generally accepted in the United States of America.

**Going Concern**

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has suffered net losses from operations in current period and has a working capital deficiency, which raises substantial doubt about its ability to continue as a going concern. Management's plans regarding those matters are discussed in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

**Basis for Opinion**

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

**Critical Audit Matters**

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.

***Going concern***

 ****

As discussed in Note 2 to the financial statements, the Company had a going concern due the company suffering net losses and due to the company having a working capital deficiency.

Auditing management's evaluation of a going concern can be a significant judgment given the fact that the Company uses management estimates on future revenues and expenses, which are not able to be substantiated.

To evaluate the appropriateness of the going concern, we examined and evaluated the financial information that was the initial cause along with management's plans to mitigate the going concern and management's disclosure on going concern.

 ****

M&K CPAS, PLLC

We have served as the Company's auditor since 2022.

Houston, TX

December 14, 2022

**SRM Entertainment, Inc.**

**Balance Sheets**

**As of September 30, 2022**

---

| | |
|:---|:---|
|  | September 30,<br> 2022 |
| Total assets | $- |
| Liabilities |  |
| Accounts payable to Jupiter Wellness | $1374 |
| Total Liabilities | 1374 |
| Shareholders' Deficit |  |
| &nbsp;&nbsp;&nbsp;Preferred Stock. $0.0001 par value, 10,000,000 authorized, no shares issued and outstanding |  |
| &nbsp;&nbsp;&nbsp;Common stock, $0.0001 par value, 100,000,000 authorized, 1,700,000 shares issued and outstanding | 170 |
| Subscriptions receivable | (170) |
| Retained earnings | (1373) |
| Total Shareholders' Deficit | (1374) |
| Total Liabilities and Shareholders' Deficit | $- |

---

The accompanying notes are an integral part of these financial statements

**SRM Entertainment, Inc**

**Statement of Operations**

**For the period from Inception (April 22, 2022) to September 30, 2022** 

---

| | |
|:---|:---|
| **Revenue** |  |
| &nbsp;&nbsp;&nbsp;Sales | $- |
| &nbsp;&nbsp;&nbsp;Cost of Sales | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gross profit |  |
| **Operating expense** |  |
| &nbsp;&nbsp;&nbsp;General and administrative expenses | 1374 |
| **Net Income (Loss)** | $(1374) |

---

---

| | |
|:---|:---|
| Net (loss) per share: |  |
| Basic and fully diluted | $(0.00) |
| Weighted average number of shares | 1700000 |

---

The accompanying notes are an integral part of these financial statements

**SRM Entertainment, Inc.**

**Statement of Changes in Shareholders' Equity**

**For the period from Inception (April 22, 2022) to September 30, 2022** 

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Common Stock** | **Common Stock** | | | |
|  | **Shares** | **Amount** | **Subscriptions**<br>**Receivable** |<br>**Deficit** |<br>**Total** |
| Inception, April 22, 2022 |  | $- | $- | $- | $- |
| Issuance of Founder shares | 1700000 | 170 | (170) |  |  |
| Operations for the period from Inception to September 30, 2022 |  |  |  | (1374) | (1374) |
| Balance, September 3, 2022 | 1700000 | $- | $(170) | $(1374) | $(1374) |

---

The accompanying notes are an integral part of these financial statements

**SRM Entertainment, Inc.**

**Statement of Cash Flows**

**For the period from Inception (April 22, 2022) to September 30, 2022** 

**(Unaudited)**

---

| | |
|:---|:---|
| Cash flows from operating activities: |  |
| &nbsp;&nbsp;&nbsp;Net Income (loss) | $(1374) |
| &nbsp;&nbsp;&nbsp;Adjustment to reconcile net loss to operating activities |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable to Jupiter Wellness | 1374 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash (used in) operating activities |  |
| Cash flows from investing activities: |  |
| Cash flows from financing activities: |  |
| Net increase (decrease) in cash and cash equivalents |  |
| Cash and cash equivalents at the beginning of the period |  |
| Cash and cash equivalents at the end of the period | $- |
| SUPPLEMENTAL CASH FLOW INFORMATION: |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash paid for interest | $- |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash paid for income taxes | $- |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non cash items |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Issuance of Founder shares | $170 |

---

The accompanying notes are an integral part of these financial statements

**SRM Entertainment, Inc.**

**Notes to Financial Statements**

**For the period from Inception (April 22, 2022) to September 30, 2022** 

**Note 1 - Organization and Business Operations**

SRM Entertainment, Inc. (the "Company") is a Nevada corporation and was incorporated on April 22, 2022. To date the Company has had no operations. The Company's principal business will be the design, manufacture and sale of toys to premier theme parks.

**Note 2 - Significant Accounting Policies**

**Basis of Presentation**

The accompanying financial statements are presented in conformity with accounting principles generally accepted in the United States of America ("GAAP") and pursuant to the rules and regulations of US Securities and Exchange Commission ("SEC").

**Emerging Growth Company Status**

The Company is an "emerging growth company," as defined in Section 2(a) of the Securities Act of 1933, as amended, (the "Securities Act"), as modified by the Jumpstart our Business Startups Act of 2012, (the "JOBS Act"), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company's financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

**Going Concern**

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company has had no operations for the period from Inception to September 30, 2022 and has suffered net losses in the current period and has a working capital deficiency. This deficiency and lack of operations raises substantial doubt about its ability to continue as a going concern. It is contemplated that the Company will acquire SRM Entertainment Limited ("SRM Limited") and grow the operations of SRM Limited. See subsequent event footnote 7.

**Use of Estimates**

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.

**Cash and Cash Equivalents**

The Company considers all short-term investments with a maturity of three months or less when purchased to be cash and equivalents for purposes of the statement of cash flows.

**Inventory**

Inventories will be stated at the lower of cost or market. The Company will periodically review the value of items in inventory and provides write-downs or write-offs of inventory based on its assessment of market conditions. Write-downs and write-offs are charged to cost of goods sold. Inventory is based upon the average cost method of accounting.

**Net Loss Per Share of Common Stock**

Net income (loss) per share of Common Stock is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Basic net income (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of Common Stock outstanding during the period. If applicable, diluted earnings per share assume the conversion, exercise or issuance of all Common Stock instruments such as options, warrants, convertible securities and preferred stock, unless the effect is to reduce a loss or increase earnings per share. As such, options, warrants, convertible securities, and preferred stock are not considered in the calculations, as the impact of the potential shares of Common Stock would be to decrease the loss per share.

**Fair Value of Financial Instruments**

The fair value of the Company's assets and liabilities, which qualify as financial instruments under ASC Topic 820, "Fair Value Measurements and Disclosures," approximates the carrying amounts represented in the accompanying balance sheet, primarily due to their short-term nature.

**Revenue Recognition**

The Company will generate its revenue from the sale of its products directly to the end user (the "customer").

The Company recognizes revenues by applying the following steps in accordance with FASB Accounting Standards Codification 606 "Revenue from Contracts with Customers" ("ASC 606"). Under ASC 606, revenues are recognized when control of the promised goods or services are transferred to a customer, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services. The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements:

● identify the contract with a customer;

● identify the performance obligations in the contract;

● determine the transaction price;

● allocate the transaction price to performance obligations in the contract; and

● recognize revenue as the performance obligation is satisfied.

The Company's performance obligations are satisfied when goods or products are shipped on a FOB shipping point basis as title passes when shipped. Our products are generally paid in advance of shipment or standard net 30 days and we offer no specific right of return, refund or warranty related to our products except for cases of defective products of which there have been none to date.

**Accounts Receivable and Credit Risk**

Accounts receivable are generated from sales of the Company's products. The Company provides an allowance, if applicable, for doubtful collections, which is based upon a review of outstanding receivables, historical collection information, and existing economic conditions.

**Foreign Currency Translation**

Assets and liabilities in foreign currencies are translated using the exchange rate at the balance sheet date, while revenue and expense accounts are translated at the average exchange rates prevailing during the period. Equity accounts are translated at historical exchange rates.

**Stock based compensation**

The Company recognizes compensation costs to employees under FASB Accounting Standards Codification 718 "Compensation - Stock Compensation" ("ASC 718"). Under ASC 718, companies are required to measure the compensation costs of share-based compensation arrangements based on the grant-date fair value and recognize the costs in the financial statements over the period during which employees are required to provide services. Share based compensation arrangements include stock options and warrants. As such, compensation cost is measured on the date of grant at their fair value. Such compensation amounts, if any, are amortized over the respective vesting periods of the option grant.

The Company has adopted ASU No. 2018-07 "Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting." These amendments expand the scope of Topic 718, Compensation - Stock Compensation (which currently only includes share-based payments to employees) to include share-based payments issued to nonemployees for goods or services. Consequently, the accounting for share-based payments to nonemployees and employees will be substantially aligned.

**Income Taxes**

The Company accounts for income taxes under ASC 740 Income Taxes ("ASC 740"). ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statement and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized.

ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise's financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim period, disclosure and transition. Based on the Company's evaluation, it has been concluded that there are no significant uncertain tax positions requiring recognition in the Company's financial statements. The Company believes that its income tax positions and deductions would be sustained on audit and does not anticipate any adjustments that would result in a material changes to its financial position. The Company's policy for recording interest and penalties associated with audits is to record such items as a component of income tax expense.

The Company's deferred tax asset at December 31, 2021 consisted of net operating loss carry forwards calculated using effective tax rates (16.5%) equating to approximately $105,384 and $100,589, respectively, less a valuation allowance in the amount of approximately $105,384 and $100,589. Because of the Company's lack of earnings history, the deferred tax asset has been fully offset by a valuation allowance in the year ended December 31, 2021.

**Related parties**

The Company follows subtopic 850-10 of the FASB Accounting Standards Codification for the identification of related parties and disclosure of related party transactions.

Pursuant to Section 850-10-20 the related parties include a. affiliates of the Company; b. entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825–10–15, to be accounted for by the equity method by the investing entity; c. trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; d. principal owners of the Company; e. management of the Company; f. other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and g. other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.

The financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall include: a. the nature of the relationship(s) involved; b. a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; c. the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and d. amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement.

**Recent Accounting Pronouncements**

In June 2018, the FASB issued ASU 2018-07, which simplifies the accounting for non-employee share-based payment transactions. The amendments specify that Topic 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor's own operations by issuing share-based payment awards. The standard will be effective for us in the first quarter of our fiscal year 2020, although early adoption is permitted (but no sooner than the adoption of Topic 606). The Company has adopted this standard beginning January 1, 2019. The adoption of this standard has not had a significant impact on the Company's results of operations, financial condition, cash flows, and financial statement disclosures.

In February 2016, Topic 842, "Leases" was issued to replace the leases requirements in Topic 840, "Leases". The main difference between previous GAAP and Topic 842 is the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous GAAP. A lessee should recognize in the balance sheet a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. If a lessee makes this election, it should recognize lease expense for such leases generally on a straight-line basis over the lease term. The accounting applied by a lessor is largely unchanged from that applied under previous GAAP. Topic 842 will be effective for annual reporting periods beginning after December 15, 2018, including interim periods within those annual periods and is to be retrospectively applied. The Company has adopted this standard beginning January 1, 2020. The adoption of this standard has not had a significant impact on the Company's results of operations, financial condition, cash flows, and financial statement disclosures.

**Note 3 – Accounts Payable to Jupiter Wellness**

During the period from Inception to September 30, 2022 Jupiter Wellness loaned the Company $1,374 for incorporation and formation fees of the Company and carried as an account payable.

**Note 4 - Capital Structure**

***Common Stock*** – The Company has 100,000,000 shares of Common Stock, par value $0.0001 authorized and had verbal agreements since inception with its Founders to issue 1,700,000 shares of its common stock at par value. As of September 30, 2022, the Company recorded $170 as common stock and $170 as subscription's receivable.

***Preferred Stock*** – The Company has 10,000,000 shares of preferred stock, par value $0.0001 authorized and has issued no preferred shares.

**Note 5 – Acquisition of SRM Limited by Jupiter Wellness and Subsequent Change of Ownership**

On November 30, 2020, Jupiter Wellness, entered into and closed on a share exchange agreement (the "2020 Exchange Agreement") with SRM Limited and wholly owned subsidiary of Vinco Ventures, Inc., a Nevada corporation formerly known as Edison Nation, Inc. ("Vinco"), and the shareholders of SRM Limited set forth in the 2020 Exchange Agreement (the "SRM Shareholders"), pursuant to which the Company acquired 100% of the shares of SRM's Common Stock (the "SRM Common Stock") from the SRM Shareholders in exchange for 200,000 shares of the Company's Common Stock, valued at $1,040,000. Pursuant to the 2020 Exchange Agreement, the Company assumed all of the financial obligations of SRM, as well as its employees and offices. As a result of the 2020 Exchange Agreement, SRM became a wholly-owned subsidiary of Jupiter Wellness.

**Note 6 - Commitments and Contingencies**

***Legal Proceedings***

The Company may be subject to legal proceedings and claims arising from contracts or other matters from time to time in the ordinary course of business. Management is not aware of any pending or threatened litigation where the ultimate disposition or resolution could have a material adverse effect on its financial position, results of operations or liquidity.

**Note 7 - Subsequent Events**

On April 22, 2022, the Company recorded the issuance of 1,700,000 founder shares issued at par and subscription receivables as per verbal agreements with the Founders. Subsequent to September 30, 2022, the formal subscription agreements were executed from November 28, 2022 to December 7, 2022 and funds were paid by each respective Founder.

In accordance with ASC Topic 855-10, the Company has analyzed its operations subsequent to September 30, 2022 to the date these financial statements were issued and has determined that it does not have any additional material subsequent events to disclose in these financial statements.

![](aud_001.jpg)

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and

Stockholders of SRM Entertainment Limited

**Opinion on the Consolidated Financial Statements**

We have audited the accompanying condensed balance sheets of SRM Entertainment Limited (the Company) as of December 31, 2021 and 2020, and the related condensed statements of operations, shareholders' equity (deficit), and cash flows for each of the years in the two-year period ended December 31, 2021, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.

**Basis for Opinion**

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

**Critical Audit Matters**

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

***Revenue Recognition***

 ****

As discussed in Note 2 to the financial statements, when another party is involved in providing goods or services to the Company's clients, a determination is made as to who is acting in the capacity as the principal in the sales transaction.

Auditing management's evaluation of agreements with customers involves significant judgment, given the fact that some agreements require management's evaluation of principal versus agent.

To evaluate the appropriateness and accuracy of the assessment by management, we evaluated management's assessment in relationship to the relevant agreements.

M&K CPAS, PLLC

We have served as the Company's auditor since 2019.

Houston, TX

December 14, 2022

**SRM Entertainment Limited**

**Condensed Balance Sheets**

**As of December 31, 2021 and 2020**

---

| | | |
|:---|:---|:---|
|  | Year ended<br>December 31,<br>2021 | Year ended<br>December 31,<br>2020 |
| Assets |  |  |
| Cash | $515373 | $70101 |
| Account receivable | 661464 | 241511 |
| Prepaid expenses and deposits | 606858 | 22646 |
| Other current assets | 27304 | 119916 |
| &nbsp;&nbsp;&nbsp;Total current assets | 1810999 | 454174 |
| Fixed assets | 7381 | - |
| &nbsp;&nbsp;&nbsp;Total assets | $1818380 | $454174 |
| Liabilities and Shareholders' Equity (Deficit) |  |  |
| Accounts Payable | $532898 | $683086 |
| Loans from Jupiter Wellness | 1502621 |  |
| Accrued liabilities | 114156 | 73322 |
| &nbsp;&nbsp;&nbsp;Total Liabilities | 2149675 | 756408 |
| Common Stock, $0.1287 par value, 2 ordinary shares issued and outstanding as of December 31, 2021 and 2020 |  |  |
| Additional paid-in capital | (698557) | (698557) |
| Retained earnings | 367262 | 396323 |
| Total Shareholders' Equity (Deficit) | (331295) | (302234) |
| Total Liabilities and Shareholders' Equity (Deficit) | $1818380 | $454174 |

---

The accompanying notes are an integral part of these financial statements

**SRM Entertainment Limited**

**Condensed Statement of Operations**

**For the Years Ended December 31, 2021 and 2020**

---

| | | |
|:---|:---|:---|
|  | Years Ended | Years Ended |
|  | December 31, | December 31, |
|  | 2021 | 2020 |
| **Revenue** |  |  |
| &nbsp;&nbsp;&nbsp;Sales | $2665827 | $2958199 |
| &nbsp;&nbsp;&nbsp;Cost of Sales | 2110395 | 2153407 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gross profit | 555432 | 804792 |
| **Operating expense** |  |  |
| &nbsp;&nbsp;&nbsp;General and administrative expenses | 585147 | 1391777 |
| Other income / (expense) |  |  |
| &nbsp;&nbsp;&nbsp;Interest income | 701 |  |
| &nbsp;&nbsp;&nbsp;Interest expense | (47) | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total other income (expense) | 654 | - |
| **Net (loss)** | $(29061) | $(586985) |
| Net (loss) per share: |  |  |
| Basic | $(14531) | $(293493) |
| Weighted average number of shares |  |  |
| Basic | 2 | 2 |

---

The accompanying notes are an integral part of these financial statements

**SRM Entertainment Limited**

**Condensed Statement of Changes in Shareholders' Equity (Deficit)**

**For the Years Ended December 31, 2021 and 2020**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Common Stock** | **Common Stock** | | | |
|  | **Shares** | **Amount** | **Additional**<br>**Paid-In**<br>**Capital** |<br>**Retained**<br>**Earnings** |<br>**Total** |
| Balance, December 31, 2019 | 2 | $- | $(698557) | $983308 | $284751 |
| Net loss | - | - | - | (586985) | (586985) |
| Balance, December 31, 2020 | 2 | $- | $(698557) | $396323 | $(302234) |
| Net loss | - | - | - | (29061) | (29061) |
| Balance, December 31, 2021 | 2 | $- | $(698557) | $367262 | $(331295) |

---

The accompanying notes are an integral part of these financial statements

**SRM Entertainment Limited**

**Condensed Statement of Cash Flows**

**For the Years Ended December 31, 2021 and 2020** 

---

| | | |
|:---|:---|:---|
|  | Years Ended December 31, | Years Ended December 31, |
|  | 2021 | 2020 |
| Cash flows from operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;Net loss | $(29061) | $(586985) |
| &nbsp;&nbsp;&nbsp;Adjustments to reconcile net income to net cash provided by (used in) operating activities |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Promissory Note Due to Jupiter Wellness | 1502621 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and deposits | (584212) | 9021 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable | (419953) | 1269974 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | (150188) | (644194) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued liabilities | 40834 | (36284) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other current assets | 92612 | (119916) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash (used in) operating activities | 452653 | (108384) |
| Cash flows from investing activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchase of fixed assets | (7381) | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash (used in) investing activities | (7381) | - |
| Cash flows from financing activities: | - | - |
| Net increase (decrease) in cash and cash equivalents | 445272 | (108384) |
| Cash and cash equivalents at the beginning of the period | 70101 | 178485 |
| Cash and cash equivalents at the end of the period | $515373 | $70101 |
| SUPPLEMENTAL CASH FLOW INFORMATION: |  |  |
| &nbsp;&nbsp;&nbsp;Cash paid for interest | $- | $- |
| &nbsp;&nbsp;&nbsp;Cash paid for income taxes | $- | $- |

---

The accompanying notes are an integral part of these financial statements

**SRM Entertainment Limited**

**Notes to Financial Statements**

**For the Years Ended** 

**December 31, 2021 and 2020**

**Note 1 - Organization and Business Operations**

SRM Entertainment Limited (the "Company") is a limited company incorporated in the Hong Kong, now a Special Administrative Region of the People's Republic of China, on January 23, 1981 and is a wholly-owned subsidiary of Jupiter Wellness, Inc., a Delaware corporation. The Company's principal business is the design, manufacture and sale of toys to premier theme parks.

**Note 2 - Significant Accounting Policies**

**Basis of Presentation**

The accompanying financial statements are presented in conformity with accounting principles generally accepted in the United States of America ("GAAP") and pursuant to the rules and regulations of US Securities and Exchange Commission ("SEC").

**Emerging Growth Company Status**

The Company is an "emerging growth company," as defined in Section 2(a) of the Securities Act of 1933, as amended, (the "Securities Act"), as modified by the Jumpstart our Business Startups Act of 2012, (the "JOBS Act"), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company's financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

**Use of Estimates**

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.

**Cash and Cash Equivalents**

The Company considers all short-term investments with a maturity of three months or less when purchased to be cash and equivalents for purposes of the statement of cash flows. There were no cash equivalents as of December 31, 2021 and 2020.

**Inventory**

Inventories are stated at the lower of cost or market. The Company periodically reviews the value of items in inventory and provides write-downs or write-offs of inventory based on its assessment of market conditions. Write-downs and write-offs are charged to cost of goods sold. Inventory is based upon the average cost method of accounting.

**Investments Held-to-Maturity**

Investments that the Company's management has the "positive intent and ability" to hold through maturity are classified and accounted for as hold-to-maturity investments ("HTM"). HTM investments are carried at amortized cost in the financial statements. For investments classified as HTM, no unrealized gains and losses will be recognized in financial statements.

**Net Loss per share of Common Stock**

Net income (loss) per share of Common Stock is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Basic net income (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of Common Stock outstanding during the period. If applicable, diluted earnings per share assume the conversion, exercise or issuance of all Common Stock instruments such as options, warrants, convertible securities and preferred stock, unless the effect is to reduce a loss or increase earnings per share. As such, options, warrants, convertible securities, and preferred stock are not considered in the calculations, as the impact of the potential shares of Common Stock would be to decrease the loss per share.

---

| | | |
|:---|:---|:---|
|  | For the Years | For the Years |
|  | Ended December 31, | Ended December 31, |
|  | 2021 | 2020 |
| **Numerator:** | $(29061) | $(586985) |
| Net (loss) |  |  |
| **Denominator:** |  |  |
| &nbsp;&nbsp;&nbsp;Denominator for basic earnings per share - Weighted-average of shares of Common Stock issued and outstanding during the period | 2 | 2 |
| &nbsp;&nbsp;&nbsp;Denominator for diluted earnings per share | 2 | 2 |
| Basic (loss) per share | $(14531) | $(293493) |
| Diluted (loss) per share | $(14531) | $(293493) |

---

**Fair Value of Financial Instruments**

The fair value of the Company's assets and liabilities, which qualify as financial instruments under ASC Topic 820, "Fair Value Measurements and Disclosures," approximates the carrying amounts represented in the accompanying balance sheet, primarily due to their short-term nature.

**Revenue Recognition**

The Company generates its revenue from the sale of its products directly to the end user (the "customer").

The Company recognizes revenues by applying the following steps in accordance with FASB Accounting Standards Codification 606 "Revenue from Contracts with Customers" ("ASC 606"). Under ASC 606, revenues are recognized when control of the promised goods or services are transferred to a customer, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services. The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements:

● identify the contract with a customer;

● identify the performance obligations in the contract;

● determine the transaction price;

● allocate the transaction price to performance obligations in the contract; and

● recognize revenue as the performance obligation is satisfied.

The Company's performance obligations are satisfied when goods or products are shipped on a FOB shipping point basis as title passes upon shipment. Our products are generally paid in advance of shipment or standard net 30 days and we offer no specific right of return, refund or warranty related to our products except for cases of defective products of which there have been none to date.

**Accounts Receivable and Credit Risk**

Accounts receivable are generated from sales of the Company's products. The Company provides an allowance for doubtful collections, which is based upon a review of outstanding receivables, historical collection information, and existing economic conditions. As of December 31, 2020, the Company recorded an allowance of $118,761 against accounts receivable acquired in connection with the Jupiter Wellness, Inc. acquisition of SRM Entertainment. During the year ended December 31, 2021, the Company recognized no additional allowance for doubtful collections.

**Impairment of Long-Lived Assets**

We evaluate long-lived assets (including intangible assets) for impairment whenever events or changes in circumstances indicate that the carrying amount of a long-lived asset may not be recoverable. An asset is considered impaired if its carrying amount exceeds the undiscounted future net cash flow the asset is expected to generate.

**Foreign Currency Translation**

Assets and liabilities in foreign currencies are translated using the exchange rate at the balance sheet date, while revenue and expense accounts are translated at the average exchange rates prevailing during the period. Equity accounts are translated at historical exchange rates. Gains and losses from foreign currency transactions and translation for the years ended December 31, 2021 and 2020 and the cumulative translation gains and losses as of December 31, 2021 and 2020 were not material.

**Stock based compensation**

The Company recognizes compensation costs to employees under FASB Accounting Standards Codification 718 "Compensation - Stock Compensation" ("ASC 718"). Under ASC 718, companies are required to measure the compensation costs of share-based compensation arrangements based on the grant-date fair value and recognize the costs in the financial statements over the period during which employees are required to provide services. Share based compensation arrangements include stock options and warrants. As such, compensation cost is measured on the date of grant at their fair value. Such compensation amounts, if any, are amortized over the respective vesting periods of the option grant.

The Company has adopted ASU No. 2018-07 "Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting." These amendments expand the scope of Topic 718, Compensation - Stock Compensation (which currently only includes share-based payments to employees) to include share-based payments issued to nonemployees for goods or services. Consequently, the accounting for share-based payments to nonemployees and employees will be substantially aligned.

**Income Taxes**

The Company accounts for income taxes under ASC 740 Income Taxes ("ASC 740"). ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statement and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized.

ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise's financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim period, disclosure and transition. Based on the Company's evaluation, it has been concluded that there are no significant uncertain tax positions requiring recognition in the Company's financial statements. The Company believes that its income tax positions and deductions would be sustained on audit and does not anticipate any adjustments that would result in a material changes to its financial position. The Company's policy for recording interest and penalties associated with audits is to record such items as a component of income tax expense.

The Company's deferred tax asset at December 31, 2021 and 2020 consist of net operating loss carry forwards calculated using effective tax rates (16.5%) equating to approximately $105,384 and $100,589, respectively, less a valuation allowance in the amount of approximately $105,384 and $100,589. Because of the Company's lack of earnings history, the deferred tax asset has been fully offset by a valuation allowance in the years ended December 31, 2021 and 2020.

**Related parties**

The Company follows subtopic 850-10 of the FASB Accounting Standards Codification for the identification of related parties and disclosure of related party transactions.

Pursuant to Section 850-10-20 the related parties include a. affiliates of the Company; b. entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825–10–15, to be accounted for by the equity method by the investing entity; c. trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; d. principal owners of the Company; e. management of the Company; f. other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.

The financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall include: a. the nature of the relationship(s) involved; b. a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; c. the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and d. amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement.

**Recent Accounting Pronouncements**

In June 2018, the FASB issued ASU 2018-07, which simplifies the accounting for non-employee share-based payment transactions. The amendments specify that Topic 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor's own operations by issuing share-based payment awards. The standard will be effective for us in the first quarter of our fiscal year 2020, although early adoption is permitted (but no sooner than the adoption of Topic 606). The Company has adopted this standard beginning January 1, 2019. The adoption of this standard has not had a significant impact on the Company's results of operations, financial condition, cash flows, and financial statement disclosures.

In February 2016, Topic 842, "Leases" was issued to replace the leases requirements in Topic 840, "Leases". The main difference between previous GAAP and Topic 842 is the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous GAAP. A lessee should recognize in the balance sheet a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of asset not to recognize lease assets and lease liabilities. If a lessee makes this election, it should recognize lease expense for such leases generally on a straight-line basis over the lease term. The accounting applied by a lessor is largely unchanged from that applied under previous GAAP. Topic 842 will be effective for annual reporting periods beginning after December 15, 2018, including interim periods within those annual periods and is to be retrospectively applied. The Company has adopted this standard beginning January 1, 2020. The adoption of this standard has not had a significant impact on the Company's results of operations, financial condition, cash flows, and financial statement disclosures.

**Note 3 - Accounts Receivable**

At December 31, 2021 and 2020, the Company had accounts receivable of $661,464 and $241,511 (net of an allowance of $0 and $118,761), respectively.

**Note 4 - Prepaid Expenses and Deposits**

At December 31, 2021 and 2020, the Company had prepaid expenses and deposits of $606,858 and $22,646, respectively consisting primarily of deposits and prepayments on purchase orders.

**Note 5 – Loans from Jupiter Wellness** 

As of December 31, 2021 the Company had an outstanding unsecured, non-interest bearing loan balance of $1,502,621 to Jupiter Wellness, Inc. its Parent.

**Note 6 - Capital Structure**

***Ordinary Shares*** - As of December 31, 2021 and 2020, there were 2 ordinary shares issued and outstanding.

**Note 7 – Acquisition of SRM Entertainment Limited by Jupiter Wellness and Subsequent Change of Ownership**

On November 30, 2020, Jupiter Wellness entered into and closed on the 2020 Exchange Agreement with SRM Entertainment Limited ("SRM Limited") and wholly owned subsidiary of Vinco Ventures, Inc., a Nevada corporation formerly known as Edison Nation, Inc. ("Vinco"), and the shareholders of SRM Limited set forth in the 2020 Exchange Agreement (the "SRM Shareholders"), pursuant to which the Company acquired 100% of the shares of SRM Limited's Common Stock from the SRM Shareholders in exchange for 200,000 shares of the Common Stock of Jupiter Wellness, valued at $1,040,000. Pursuant to the 2020 Exchange Agreement, Jupiter Wellness assumed all of the financial obligations of SRM Limited, as well as its employees and offices. As a result of the 2020 Exchange Agreement, SRM Limited became a wholly-owned subsidiary of Jupiter Wellness.

**Note 8 - Commitments and Contingencies**

***Legal Proceedings***

The Company may be subject to legal proceedings and claims arising from contracts or other matters from time to time in the ordinary course of business. Management is not aware of any pending or threatened litigation where the ultimate disposition or resolution could have a material adverse effect on its financial position, results of operations or liquidity.

**Note 9 - Subsequent Events**

In accordance with ASC Topic 855-10, the Company has analyzed its operations subsequent to December 31, 2021 to the date these financial statements were issued and has determined that it does not have any additional material subsequent events to disclose in these financial statements.

**SRM Entertainment Limited**

**Condensed Balance Sheets**

**As of September 30, 2022 and December 31, 2021**

---

| | | |
|:---|:---|:---|
|  | September 30<br>2022 | December 31<br>2021 |
|  | (Unaudited) | (Audited) |
| Assets |  |  |
| Cash | $784081 | $515373 |
| Account receivable | 643902 | 661464 |
| Prepaid expenses and deposits | 529690 | 606858 |
| Other current assets | - | 27304 |
| &nbsp;&nbsp;&nbsp;Total current assets | 1957673 | 1810999 |
| Fixed assets | 30316 | 7381 |
| &nbsp;&nbsp;&nbsp;Total assets | $1987989 | $1818380 |
| Liabilities and Shareholders' Equity |  |  |
| Accounts Payable | $154819 | $532898 |
| Loans from Jupiter Wellness | 1503514 | 1502621 |
| Accrued liabilities | 127431 | 114156 |
| &nbsp;&nbsp;&nbsp;Total Liabilities | 1785764 | 2149675 |
| Common Stock, $0.1287 par value, 2 ordinary shares issued and outstanding as of December 31, 2021 and 2020 |  |  |
| Additional paid-in capital | (698557) | (698557) |
| Retained earnings | 900782 | 367262 |
| Total Shareholders' Equity | 202225 | (331295) |
| Total Liabilities and Shareholders' Equity | $1987989 | $1818380 |

---

The accompanying notes are an integral part of these financial statements

**SRM Entertainment Limited**

**Condensed Consolidated Statement of Operations**

**For the Nine Months Ended September 30, 2022 and 2021**

**(Unaudited)**

---

| | | |
|:---|:---|:---|
|  | Nine months ended<br> September 30, 2022 | Nine months ended<br> September 30, 2021 |
| **Revenue** |  |  |
| &nbsp;&nbsp;&nbsp;Sales | $5199807 | $1183550 |
| &nbsp;&nbsp;&nbsp;Cost of Sales | 4195629 | 984483 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gross profit | 1004178 | 199067 |
| **Operating expense** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;General and administrative expenses | 470673 | 38735 |
| Total operating expenses | 470673 | 38735 |
| Other income / (expense) |  |  |
| &nbsp;&nbsp;&nbsp;Interest income | 15 | 701 |
| &nbsp;&nbsp;&nbsp;Interest expense |  | (47) |
| Total other income (expense) | 15 | 654 |
| **Net Income (Loss)** | $533520 | $160986 |
| Net (loss) per share: |  |  |
| Basic and fully diluted | $266760 | $80493 |
| Weighted average number of shares |  |  |
| Basic and fully diluted | 2 | 2 |

---

The accompanying notes are an integral part of these financial statements

**SRM Entertainment Limited**

**Condensed Statement of Changes in Shareholders' Equity (Deficit)**

**For the Nine Months Ended September 30, 2022 and Year ended December 31, 2021**

**(Unaudited)**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Common Stock** | **Common Stock** | | | |
|  | **Shares** | **Amount** | **Additional**<br>**Paid-In**<br>**Capital** |<br>**Retained**<br>Earnings |<br>**Total** |
| Balance, December 31, 2020 | 2 | $- | $(698577) | $396323 | $(302234) |
| Net loss for year ended December 31, 2021 | - | - | - | (29061) | (29061) |
| Balance, December 31, 2021 | 2 | $- | $(698577) | $367262 | $(331295) |
| Net income for nine months ended September 30, 2022 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- |  |  | 533520 | 533520 |
| Balance, September 30, 2022 | 2 | $- | $(698577) | $900782 | $202225 |

---

The accompanying notes are an integral part of these financial statements

**SRM Entertainment Limited**

**Condensed Statement of Cash Flows**

**For the Nine Months Ended September 30, 2022 and 2022**

**(Unaudited)**

---

| | | |
|:---|:---|:---|
|  | Nine months ended<br> September 30, 2022  | Nine months ended<br> September 30, 2021 |
| Cash flows from operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;Net Income (loss) | $533520 | $160986 |
| &nbsp;&nbsp;&nbsp;Adjustments to reconcile net income to net cash provided by (used in) operating activities |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loans from Jupiter Wellness | 893 | 820337 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and deposits | 77168 | (346892) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation | 1750 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable | 17562 | (332055) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | (378079) | (247517) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued liabilities | 13275 | (223) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other current assets | 27304 | 119916 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by operating activities | 293393 | 174552 |
| Cash flows from investing activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchase of fixed assets | (24685) | (7381) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash (used in) investing activities | (24685) | (7381) |
| Cash flows from financing activities: | - | - |
| Net increase (decrease) in cash and cash equivalents | 268708 | 167171 |
| Cash and cash equivalents at the beginning of the period | 515373 | 70101 |
| Cash and cash equivalents at the end of the period | $784081 | $237272 |
| SUPPLEMENTAL CASH FLOW INFORMATION: |  |  |
| &nbsp;&nbsp;&nbsp;Cash paid for interest | $- | $- |
| &nbsp;&nbsp;&nbsp;Cash paid for income taxes | $- | $- |

---

The accompanying notes are an integral part of these financial statements

**SRM Entertainment Limited**

**Notes to Financial Statements**

**For the Nine Months Ended September 30, 2022** 

**and Year Ended December 31, 2021**

**Note 1 - Organization and Business Operations**

SRM Entertainment Limited (the "Company") is a limited company incorporated in the Hong Kong, now a Special Administrative Region of the People's Republic of China, on January 23, 1981 and is a wholly-owned subsidiary of Jupiter Wellness, Inc., a Delaware corporation. The Company's principal business is the design, manufacture and sale of toys to premier theme parks.

**Note 2 - Significant Accounting Policies**

**Basis of Presentation**

The accompanying financial statements are presented in conformity with accounting principles generally accepted in the United States of America ("GAAP") and pursuant to the rules and regulations of US Securities and Exchange Commission ("SEC").

**Emerging Growth Company Status**

The Company is an "emerging growth company," as defined in Section 2(a) of the Securities Act of 1933, as amended, (the "Securities Act"), as modified by the Jumpstart our Business Startups Act of 2012, (the "JOBS Act"), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company's financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

**Use of Estimates**

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.

**Cash and Cash Equivalents**

The Company considers all short-term investments with a maturity of three months or less when purchased to be cash and equivalents for purposes of the statement of cash flows. There were no cash equivalents as of September 30, 2022 or December 31, 2021.

**Inventory**

Inventories are stated at the lower of cost or market. The Company periodically reviews the value of items in inventory and provides write-downs or write-offs of inventory based on its assessment of market conditions. Write-downs and write-offs are charged to cost of goods sold. Inventory is based upon the average cost method of accounting.

**Investments Held-to-Maturity**

 

Investments that the Company's management has the "positive intent and ability" to hold through maturity are classified and accounted for as hold-to-maturity investments ("HTM"). HTM investments are carried at amortized cost in the financial statements. For investments classified as HTM, no unrealized gains and losses will be recognized in financial statements.

**Net Loss per Share of Common Stock**

Net income (loss) per share of Common Stock is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Basic net income (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of Common Stock outstanding during the period. If applicable, diluted earnings per share assume the conversion, exercise or issuance of all Common Stock instruments such as options, warrants, convertible securities and preferred stock, unless the effect is to reduce a loss or increase earnings per share. As such, options, warrants, convertible securities, and preferred stock are not considered in the calculations, as the impact of the potential shares of Common Stock would be to decrease the loss per share.

---

| | | |
|:---|:---|:---|
|  | Nine months ended<br> September 30, 2022 | Nine months ended<br> September 30, 2021 |
| **Numerator:** | $533520 | $160986 |
| &nbsp;&nbsp;&nbsp;Net Income (loss) |  |  |
| **Denominator:** |  |  |
| &nbsp;&nbsp;&nbsp;Denominator for basic earnings per share - Weighted-average shares of Common Stock issued and outstanding during the period | 2 | 2 |
| &nbsp;&nbsp;&nbsp;Denominator for diluted earnings per share | 2 | 2 |
| Basic (loss) per share | $266760 | $80493 |
| Diluted (loss) per share | $266760 | $80493 |

---

**Fair Value of Financial Instruments**

The fair value of the Company's assets and liabilities, which qualify as financial instruments under ASC Topic 820, "Fair Value Measurements and Disclosures," approximates the carrying amounts represented in the accompanying balance sheet, primarily due to their short-term nature.

**Revenue Recognition**

The Company generates its revenue from the sale of its products directly to the end user (the "customer").

The Company recognizes revenues by applying the following steps in accordance with FASB Accounting Standards Codification 606 "Revenue from Contracts with Customers" ("ASC 606"). Under ASC 606, revenues are recognized when control of the promised goods or services are transferred to a customer, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services. The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements:

● identify the contract with a customer;

● identify the performance obligations in the contract;

● determine the transaction price;

● allocate the transaction price to performance obligations in the contract; and

● recognize revenue as the performance obligation is satisfied.

The Company's performance obligations are satisfied when goods or products are shipped on a FOB shipping point basis as title passes when shipped. Our products are generally paid in advance of shipment or standard net 30 days and we offer no specific right of return, refund or warranty related to our products except for cases of defective products of which there have been none to date.

**Accounts Receivable and Credit Risk**

Accounts receivable are generated from sales of the Company's products. The Company provides an allowance for doubtful collections, which is based upon a review of outstanding receivables, historical collection information, and existing economic conditions. As of December 31, 2020, the Company recorded an allowance of $118,761 against accounts receivable acquired in connection with the Jupiter Wellness, Inc. acquisition of SRM Entertainment and subsequently wrote off these receivables against the allowance. At September 30, 2022 and December 31, 2021 the Company had no allowance for accounts receivable.

**Impairment of Long-Lived Assets**

We evaluate long-lived assets (including intangible assets) for impairment whenever events or changes in circumstances indicate that the carrying amount of a long-lived asset may not be recoverable. An asset is considered impaired if its carrying amount exceeds the undiscounted future net cash flow the asset is expected to generate.

**Foreign Currency Translation**

Assets and liabilities in foreign currencies are translated using the exchange rate at the balance sheet date, while revenue and expense accounts are translated at the average exchange rates prevailing during the period. Equity accounts are translated at historical exchange rates. Gains and losses from foreign currency transactions and translation for the nine months ended September 30, 2022 and year ended December 31, 2021 and the cumulative translation gains and losses as of the respective periods were not material.

**Stock based compensation**

The Company recognizes compensation costs to employees under FASB Accounting Standards Codification 718 "Compensation - Stock Compensation" ("ASC 718"). Under ASC 718, companies are required to measure the compensation costs of share-based compensation arrangements based on the grant-date fair value and recognize the costs in the financial statements over the period during which employees are required to provide services. Share based compensation arrangements include stock options and warrants. As such, compensation cost is measured on the date of grant at their fair value. Such compensation amounts, if any, are amortized over the respective vesting periods of the option grant.

The Company has adopted ASU No. 2018-07 "Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting." These amendments expand the scope of Topic 718, Compensation - Stock Compensation (which currently only includes share-based payments to employees) to include share-based payments issued to nonemployees for goods or services. Consequently, the accounting for share-based payments to nonemployees and employees will be substantially aligned.

**Income Taxes**

The Company accounts for income taxes under ASC 740 Income Taxes ("ASC 740"). ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statement and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized.

ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise's financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim period, disclosure and transition. Based on the Company's evaluation, it has been concluded that there are no significant uncertain tax positions requiring recognition in the Company's financial statements. The Company believes that its income tax positions and deductions would be sustained on audit and does not anticipate any adjustments that would result in a material changes to its financial position. The Company's policy for recording interest and penalties associated with audits is to record such items as a component of income tax expense.

The Company's deferred tax asset at December 31, 2021 and 2020 consisted of net operating loss carry forwards calculated using effective tax rates (16.5%) equating to approximately $105,384 and $100,589, respectively, less a valuation allowance in the amount of approximately $105,384 and $100,589. Because of the Company's lack of earnings history, the deferred tax asset has been fully offset by a valuation allowance in the years ended December 31, 2021 and 2020.

**Related parties**

The Company follows subtopic 850-10 of the FASB Accounting Standards Codification for the identification of related parties and disclosure of related party transactions.

Pursuant to Section 850-10-20 the related parties include a. affiliates of the Company; b. entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825–10–15, to be accounted for by the equity method by the investing entity; c. trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; d. principal owners of the Company; e. management of the Company; f. other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and g. other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.

The financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall include: a. the nature of the relationship(s) involved; b. a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; c. the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and d. amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement.

**Recent Accounting Pronouncements**

In June 2018, the FASB issued ASU 2018-07, which simplifies the accounting for non-employee share-based payment transactions. The amendments specify that Topic 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor's own operations by issuing share-based payment awards. The standard will be effective for us in the first quarter of our fiscal year 2020, although early adoption is permitted (but no sooner than the adoption of Topic 606). The Company has adopted this standard beginning January 1, 2019. The adoption of this standard has not had a significant impact on the Company's results of operations, financial condition, cash flows, and financial statement disclosures.

In February 2016, Topic 842, "Leases" was issued to replace the leases requirements in Topic 840, "Leases". The main difference between previous GAAP and Topic 842 is the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous GAAP. A lessee should recognize in the balance sheet a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. If a lessee makes this election, it should recognize lease expense for such leases generally on a straight-line basis over the lease term. The accounting applied by a lessor is largely unchanged from that applied under previous GAAP. Topic 842 will be effective for annual reporting periods beginning after December 15, 2018, including interim periods within those annual periods and is to be retrospectively applied. The Company has adopted this standard beginning January 1, 2020. The adoption of this standard has not had a significant impact on the Company's results of operations, financial condition, cash flows, and financial statement disclosures.

**Note 3 - Accounts Receivable**

At September 30, 2022 and December 31, 2021, the Company had accounts receivable of $643,902 and $661,464.

**Note 4 - Prepaid Expenses and Deposits**

At September 30, 2022 and December 31, 2021, the Company had prepaid expenses and deposits of $529,690 and $606,858, respectively consisting primarily of deposits and prepayments on purchase orders.

**Note 5 – Loans from Jupiter Wellness** 

As of September 30, 2022 and December 31, 2021 the Company had an outstanding unsecured, non-interest bearing loan balance of $1,503,514 and $1,502,621, respectively, to Jupiter Wellness, Inc. its Parent.

**Note 6 - Capital Structure**

***Ordinary Shares*** - As September 30, 2022 and December 31, 2021, there were 2 ordinary shares issued and outstanding.

**Note 7 – Acquisition of SRM Entertainment by Jupiter Wellness and Subsequent Change of Ownership**

On November 30, 2020, Jupiter Wellness entered into and closed on the 2020 Exchange Agreement with SRM Limited Vinco, and the SRM Shareholders, pursuant to which the Company acquired 100% of the shares of SRM Limited's Common Stock from the SRM Shareholders in exchange for 200,000 shares of the Common Stock of Jupiter Wellness, valued at $1,040,000. Pursuant to the 2020 Exchange Agreement, Jupiter Wellness assumed all of the financial obligations of SRM Limited, as well as its employees and offices. As a result of the 2020 Exchange Agreement, SRM Limited became a wholly-owned subsidiary of Jupiter Wellness.

**Note 8 - Commitments and Contingencies**

***Legal Proceedings***

The Company may be subject to legal proceedings and claims arising from contracts or other matters from time to time in the ordinary course of business. Management is not aware of any pending or threatened litigation where the ultimate disposition or resolution could have a material adverse effect on its financial position, results of operations or liquidity.

**Note 9 - Subsequent Events**

In accordance with ASC Topic 855-10, the Company has analyzed its operations subsequent to September 30, 2022 to the date these financial statements were issued and has determined that it does not have any additional material subsequent events to disclose in these financial statements.

**SRM Entertainment, Inc.**

**Shares of Common Stock**

**PRELIMINARY PROSPECTUS**

*Sole Book-Running Manager*

**EF HUTTON**

division of Benchmark Investments, LLC

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**, 2023** 

Until , (25 days after commencement of our initial public offering), all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers' obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

**PART II** 

**INFORMATION NOT REQUIRED IN PROSPECTUS** 

**Item 13. Other Expenses of Issuance.** 

The following table sets forth the various expenses, other than the underwriting discount, payable in connection with the offering contemplated by this registration statement. All of the fees set forth below are estimates except for the SEC registration fee, the FINRA fee and the stock exchange listing fee.

---

| | |
|:---|:---|
|  | **Payable by the registrant** |
| SEC registration fee | $— |
| FINRA fee | \* |
| Stock exchange listing fee | \* |
| Blue Sky fees and expenses | \* |
| Printing Expenses | \* |
| Legal fees and expenses | \* |
| Accounting fees and expenses | \* |
| Transfer agent and registrar fees | \* |
| Miscellaneous fees and expenses | \* |
| Total | $\* |

---

\* To be filed by amendment.

**Item 14. Indemnification of Directors and Officers.** 

 ****

***Limitation of personal liability of directors and indemnification***

The Nevada Revised Statutes and certain provisions of our articles of incorporation, as amended, and bylaws under certain circumstances provide for indemnification of our officers, directors and controlling persons against liabilities which they may incur in such capacities. A summary of the circumstances in which such indemnification is provided for is contained herein, but this description is qualified in its entirety by reference to our bylaws and to the statutory provisions.

In general, any officer, director, employee or agent may be indemnified against expenses, fines, settlements or judgments arising in connection with a legal proceeding to which such person is a party, if that person is not liable due to conduct that constituted a breach of his or her fiduciary duties and such breach involved intentional misconduct, fraud or a knowing violation of law, and that person's actions were in good faith, were believed to be in our best interest, and were not unlawful. Indemnification may not be made for any claim as to which the person seeking indemnity has been adjudged by a court of competent jurisdiction, after exhaustion of all appeals, to be liable to our company unless the court in which the action or suit was brought or another court of competent jurisdiction determines that in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses as such court deems proper. Unless such person is successful upon the merits in such an action, indemnification may be awarded only after a determination by independent decision of our board of directors, by legal counsel, or by a vote of our stockholders, that the applicable standard of conduct was met by the person to be indemnified. Under our articles of incorporation, as amended, and bylaws , we will advance expenses incurred by officers, directors, employees or agents who are parties to or are threatened to made parties to any threatened, pending or completed action by reason of the fact that such person was serving in such capacity, prior to the disposition of such action and promptly following request therefor, upon receipt of an undertaking by or on behalf of such person to repay such advances if it should be determined ultimately that such person is not entitled to indemnification.

The circumstances under which indemnification is granted in connection with an action brought on our behalf is generally the same as those set forth above; however, with respect to such actions, indemnification is granted only with respect to expenses actually incurred in connection with the defense or settlement of the action. Indemnification may also be granted pursuant to the terms of agreements which may be entered in the future or pursuant to a vote of stockholders or directors. The Nevada Revised Statutes also grant us the power to purchase and maintain insurance which protects our officers and directors against any liabilities incurred in connection with their service in such a position, and we have obtained such a policy.

A stockholder's investment may be adversely affected to the extent we pay the costs of settlement and damage awards against directors and officers as required by these indemnification provisions. At present, there is no pending litigation or proceeding involving any of our directors, officers or employees regarding which indemnification by us is sought, nor are we aware of any threatened litigation that may result in claims for indemnification.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling us pursuant to the foregoing provisions, we have been informed that, in the opinion of the SEC, this indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

Our amended and restated bylaws will require us to indemnify any person who was or is a party or is threatened to be made a party to, or was otherwise involved in, a legal proceeding by reason of the fact that he or she is or was a director or officer or, while a director or officer of SRM, is or was serving at our request in a fiduciary capacity with another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with the legal proceeding if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe such person's conduct was unlawful.

We will be authorized under our amended and restated bylaws to purchase and maintain insurance on behalf of any person who is or was a director or officer of the corporation, or while a director or officer of SRM, is or was serving at our request in a fiduciary capacity with another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, against any expense, liability or loss, whether or not we would have the power to indemnify the person pursuant to the terms of our amended and restated bylaws. We believe that these indemnification provisions and the directors' and officers' insurance are useful to attract and retain qualified directors and executive officers.

We expect that the underwriting agreement will provide for indemnification of directors and officers of SRM by the underwriters against certain liabilities.

**Item 15. Recent Sales of Unregistered Securities.** 

In April 2022, the Company was formed by the below listed founders (the "Founders") with verbal agreements regarding the management and equity participation in the acquisition of SRM Limited.

From November 28, 2022 to December 7, 2022, we executed subscription agreements pursuant to which we issued an aggregate of 1,700,000 outstanding shares of our Common Stock to the following Founders of the Company: Richard Miller, Chief Executive Officer & Director, 600,000 shares; Brian S. John, Secretary and Chairman, 300,000 shares; Taft Flittner, President, 300,000 shares; Doug McKinnon, 200,000 shares; Markita Russell, 100,000 shares; and Debbie McDaniel-Hand, Vice President of Production Development and Operations, 200,000 shares. The shares are exempt from registration under Section 4(a)(2) of the Securities Act of 1933 because the issuance of these shares consisted only of the above mentioned Founders and employees of the Company without involving a public offering. A total of 1,700,000 shares were issued to the Founders for consideration of par value ($0.0001 per share) and recorded as Common Stock issued $170 and subscriptions receivable of $170.

On December 9, 2022, we also entered into an exchange agreement (the "Exchange Agreement") with Jupiter Wellness. The Exchange Agreement will be consummated immediately prior to the effective date of this Registration Statement. Pursuant to the Exchange Agreement, we will issue to Jupiter Wellness 7,300,000 shares of our Common Stock (representing 81.1% of our outstanding Common Stock) in consideration for 2 ordinary shares of SRM Limited, an entity incorporated in Hong Kong (representing all of the issued and outstanding shares of SRM Limited). Pursuant to the Exchange Agreement, we will also assume $1,503,514 of remaining debt, originally used for working capital, which is owed to Jupiter Wellness as of September 30, 2022. The shares issued in the Exchange Agreement will be exempt under Regulation D and/or Section 4(a)(2) of the Securities Act of 1933.

**Item 16. Exhibits and Financial Statement Schedules.** 

(a) Exhibits:

The list of exhibits set forth under "*Exhibit Index*" at the end of this registration statement is incorporated herein by reference.

**Item 17. Undertakings.** 

The undersigned registrant hereby undertakes to provide to the underwriters at the closing specified in the underwriting agreement certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that, in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

The registrant hereby further undertakes that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) For
 purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part
 of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant
 to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time
 it was declared effective; and

(2) For
 purposes of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus
 shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities
 at that time shall be deemed to be the initial bona fide offering thereof.

**EXHIBIT INDEX** 

---

| | |
|:---|:---|
| **Exhibit Number** | **Exhibit Description** |
| 1.1 | Form of Underwriting Agreement\* |
| 3.1 | Form of Amended and Restated Articles of Incorporation of SRM Entertainment, Inc.\* |
| 3.2 | Form of Amended and Restated Bylaws of SRM Entertainment, Inc.\* |
| 4.1 | Form of Common Stock Certificate of SRM Entertainment, Inc.\* |
| 4.2 | Form of Representative's Warrant\* |
| 5.1 | Opinion of Sichenzia Ross Ference LLP\* |
| 10.1 | Form of Separation Agreement between Jupiter Wellness, Inc. and SRM Entertainment, Inc.\* |
| 10.2 | Form of Share Exchange Agreement between Jupiter Wellness, Inc. and SRM Entertainment, Inc. dated December 9, 2022\* |
| 10.3 | [Employment Agreement between SRM Entertainment, Inc. and Richard Miller dated January 1, 2023](ex10-3.htm) |
| 10.4 | [Employment Agreement between SRM Entertainment, Inc. and Taft Flittner dated January 1, 2023](ex10-4.htm) |
| 10.5 | [Employment Agreement between SRM Entertainment, Inc. and Debbie McDaniel-Hand dated January 1, 2023](ex10-5.htm) |
| 10.6 | [License Agreement between SRM Entertainment, Inc. and LAFIG Belgium s.a. dated July 28, 2022](ex10-6.htm) |
| 10.7 | [License Agreement between SRM Entertainment, Inc. and Zoonicorn, LLC dated July 17, 2022](ex10-7.htm) |
| 10.8 | [License Agreement between SRM Entertainment, Inc., Taylored Concepts, LLC and ProToyTypes, LLC dated September 1, 2021](ex10-8.htm) |
| 10.9 | [Addendum to License Agreement between SRM Entertainment, Inc., Taylored Concepts, LLC and ProToyTypes, LLC dated June 18, 2022](ex10-9.htm) |
| 10.10 | Form of 2023 Equity Incentive Plan\* |
| 23.1 | Consent of M&K CPAs, PLLC for SRM Entertainment, Inc.\* |
| 23.2 | Consent of M&K CPAs, PLLC for SRM Entertainment Limited\* |
| 23.3 | Consent of Sichenzia Ross Ference LLP (contained in its opinion filed as Exhibit 5.1 hereto)\* |
| 24.1 | [Power of Attorney (included on the signature page to this registration statement)](#kuj_007) |
| 107 | Filing Fee Table \* |

---

\* To be filed by amendment.

**SIGNATURE** 

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized on , 2023.

---

| | |
|:---|:---|
| **SRM ENTERTAINMENT, INC.** | **SRM ENTERTAINMENT, INC.** |
| By: |  |
| Name: | Richard Miller |
| Title: | Chief Executive Officer |

---

**POWER OF ATTORNEY** 

Each of the undersigned officers and directors of SRM Entertainment, Inc. hereby severally constitutes and appoints Richard Miller, and each of them acting alone, as his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, and in any and all capacities, to sign any and all amendments (including post-effective amendments) to this registration statement and to file the same, with all exhibits thereto and other documents in connection therewith, with the SEC and any applicable securities exchange or securities self-regulatory body, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or either of them individually, or their or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on , 2023.

---

| | |
|:---|:---|
| **Signature** | **Title** |
| | Chief Executive Officer and Director |
| Richard Miller | (Principal Executive Officer) |
| | Chief Financial Officer |
| Doug McKinnon | (Principal Financial and Accounting Officer) |
| | President |
| Taft Flittner |  |
| | Vice President of Production Development and Operations |
| Debbie McDaniel-Hand |  |

---

---

| | |
|:---|:---|
| | Chairman and Secretary |
| Brian John |  |
| | Director |
| Gary Herman |  |
| | Director |
| Chris Melton |  |
| Hans Haywood | Director |

---

## Exhibit 10.3

**Exhibit 10.3**

**EXECUTIVE EMPLOYMENT AGREEMENT**

**THIS EXECUTIVE EMPLOYMENT AGREEMENT** (the "**Agreement**") is made and entered into as of the 1<sup>st</sup> day of January 2023 (the "**Effective Date**"), between SRM Entertainment, Inc., a Nevada corporation, whose principal place of business is 1061 E. Indiantown Road, Suite 110, Jupiter, FL 33477 (the "**Company**") and Richard Miller, (the "**Executive**").

**RECITALS**

**WHEREAS,** the Company desires to employ the Executive and the Executive desires to be employed by the Company and to enter into a formal employment agreement for the benefit and protection of all of the parties.

**WHEREAS,** the Company desires to employ the Executive and the Executive desires to be employed by the Company and to enter into a formal employment agreement for the benefit and protection of all of the parties.

**NOW, THEREFORE**, in consideration of the mutual agreements herein made, the Company and the Executive do hereby agree as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. **<u>Recitals</u>**. The above recitals are true, correct, and are herein incorporated by reference.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. **<u>Employment</u>**. The Company hereby employs the Executive as the Company's Chief Executive Officer, and the Executive hereby accepts employment, upon the terms and conditions hereinafter set forth.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. **<u>Duties and Responsibilities</u>**. During the term of this Agreement, the Executive shall serve as CEO of the Company, and shall have all power and authority inherent in to the office of CEO and shall be responsible for those areas in the conduct of the business reasonably assigned to him by the Board of Directors of the Company (the "Board").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. **<u>Term</u>**. The Term of employment hereunder will commence on the Effective Date of January 1, 2023.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. **<u>Compensation and Benefits</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.  **<u>Salary</u>** .
 The Executive shall be paid an initial base salary (the "**Base Salary** "), payable bi-weekly, at an annualized rate
 of One Hundred Seventy-Five Thousand Dollars ($175,000). In addition, the Executive shall receive $175,000 in stock options annually.
 The options shall have a cashless exercise. The base salary and stock options will increase 10% annually thereafter for the following
 two (2) years of 2023 and 2024. The amount of the Base Salary may be increased from time to time by the Board.

**b.**  **<u>Bonus:</u>** The Company may pay Employee at its discretion a bonus set by the Board and Compensation Committee (the "*<u>Bonus</u>* ")
 (i) the Bonus may be paid, at the election of Employee, in cash or shares of Common Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. **<u>Executive Benefits</u>**. The Executive shall be entitled to participate in all benefit programs of the Company currently existing or hereafter made available to executives and/or other salaried employees, including, but not limited to, pension and other retirement plans, group life insurance, hospitalization, surgical and major medical coverage, sick leave, disability and salary continuation, vacation and holidays, cellular telephone and all related costs and expenses, long-term disability, and other fringe benefits.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. **<u>Vacation</u>**. The Executive shall be entitled to four (4) weeks annually during the term of this Agreement. During the Term of this Agreement, Executive may utilize such vacation as the Executive shall determine; provided however, that the Executive shall evidence reasonable judgment with regard to appropriate vacation scheduling.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e. **<u>Business Expense Reimbursement</u>**. During the term of employment, the Executive shall be entitled to receive proper reimbursement for all reasonable, out-of-pocket expenses incurred by the Executive (in accordance with the policies and procedures established by the Company for its senior executive officers) in performing services hereunder, provided the Executive properly accounts therefor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. **<u>Consequences of Termination of Employment</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. **<u>Death</u>**. This Agreement and the Executive's employment hereunder shall be terminated by the death of the Executive. In the event of the death of the Executive during the Term, the Base Salary shall be paid to the Executive's designated beneficiary, or, in the absence of such designation, to the estate or other legal representative of the Executive, for three (3) months from the date of the Executive's death, all granted but unvested Options shall immediately vest and all vested but unexercised Options shall remain exercisable by the Executive's designated beneficiary, or, in the absence of such designation, to the estate or other legal representative of the Executive, through the term of such Option.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. **<u>Disability</u>**<u>.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. In the event of the Executive's disability, as hereinafter defined, the Executive shall be entitled to compensation in accordance with the Company's disability compensation practice for senior executives, including any separate arrangement or policy covering the Executive, but in all events the Executive shall continue to receive the Executive's Base Salary for a period, at the annual rate in effect immediately prior to the commencement of disability, through the date on which the disability has been deemed to occur as hereinafter provided below, and for a period of three (3) months thereafter, all granted but unvested Options shall immediately vest and all vested but unexercised Options shall remain exercisable by the Executive through the term of such Option. Any amounts provided for in this Section 6(b) shall not be offset by other long-term disability benefits provided to the Executive by the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii. "**Disability**," for the purposes of this Agreement, shall be deemed to have occurred in the event (A) the Executive is unable by reason of sickness or accident, to perform the Executive's duties under this Agreement for an aggregate of sixty (60) days in any consecutive six (6) month period or (B) the Executive has a guardian of the person or estate appointed by a court of competent jurisdiction. Termination due to disability shall be deemed to have occurred upon the first day of the month following the determination of disability as defined in the preceding sentence.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iii. Anything herein to the contrary notwithstanding, if, following a termination of employment hereunder due to disability as provided in the preceding paragraph, the Executive becomes reemployed, whether as an Executive or a consultant to the Company, any salary, annual incentive payments or other benefits earned by the Executive from such reemployment shall offset any salary continuation due to the Executive hereunder commencing with the date of re-employment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. **<u>Termination by the Company for Cause</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. Nothing herein shall prevent the Company from terminating Employment for "Cause," as hereinafter defined. The Executive shall continue to receive the Base Salary then in effect only for the period through the date of such termination and any vested Options shall remain exercisable pursuant to the terms thereof. Any rights and benefits the Executive may have in respect of any other compensation shall be determined in accordance with the terms of such other compensation arrangements or such plans or programs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii. "**Cause**" shall mean and include those actions or events specified below in subsections (A) through (D) to the extent the same occur, or the events constituting the same take place, subsequent to the date of execution of this Agreement: (A) committing or participating in an injurious act of, gross neglect or embezzlement against the Company; (B) committing or participating in any other injurious act or omission wantonly, willfully, recklessly or in a manner which was grossly negligent against the Company, monetarily or otherwise; (C) engaging in a criminal enterprise involving moral turpitude; or (D) the Executive being charged with or a conviction of an act or acts constituting a felony under the laws of the United States or any state thereof. Any other termination shall be deemed a termination "**Other than for Cause**."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iii. Notwithstanding anything else contained in this Agreement, this Agreement will not be deemed to have been terminated for Cause unless and until there shall have been delivered to the Executive a notice of termination stating that the Executive committed one of the types of conduct set forth in this Section 6(c) contained in this Agreement and specifying the particulars thereof and the Executive shall be given a fifteen (15) day period to cure such conduct, if possible. The Executive shall be entitled to receive his entire compensation during such notice period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. **<u>Termination by the Company Other than for Cause</u>**. The foregoing notwithstanding, the Company may terminate the Executive's employment for whatever reason it deems appropriate; provided, however, that in the event such termination is not based on Cause, as provided in Section 6(c) above, the Company may terminate this Agreement upon giving one (1) month's prior written notice. During such one (1) month period, the Executive shall continue to perform the Executive's duties pursuant to this Agreement, and the Company shall continue to compensate the Executive in accordance with this Agreement. Upon termination, the Executive will receive a lump sum equal to 12 months' salary and all granted but unvested Options shall immediately vest and all vested but unexercised Options shall remain exercisable by the Executive through the term of such Option.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e. **<u>Voluntary Termination</u>**. In the event the Executive terminates the Executive's employment on the Executive's own volition (except as provided in Section 6(f) and/or Section 6(g) prior to the expiration of the Term of this Agreement, including any renewals thereof, such termination shall constitute a voluntary termination and in such event the Executive shall be limited to the same rights and benefits as provided in connection with a termination for Cause as provided in Section 6(c).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f. **<u>Constructive Termination of Employment</u>**. If the Executive so elects, a termination by the Company without Cause under Section 6(d) shall be deemed to have occurred upon the occurrence of one or more of the following events without the express written consent of the Executive:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. a significant change in the nature or scope of the authorities, powers, functions, duties or responsibilities attached to Executive's position as described in Section 3; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii. a change in Executive's principal office to a location outside the counties of Palm Beach County or Jupiter, Florida surrounding area; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iii. any reduction in the Executive's Base Salary; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iv. a material breach of the Agreement by the Company; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;v. a material reduction of the Executive's benefits under any employee benefit plan, program or arrangement (for Executive individually or as part of a group) of the Company as then in effect or as in effect on the effective date of the Agreement, which reduction shall not be effectuated for similarly situated employees of the Company; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;vi. failure by a successor company to assume the obligations under the Agreement.

Anything herein to the contrary notwithstanding, the Executive shall give written notice to the Board of the Company that the Executive believes an event has occurred which would result in a Constructive Termination of the Executive's employment under this Section 6(f), which written notice shall specify the particular act or acts, on the basis of which the Executive intends to so terminate the Executive's employment, and the Company shall then be given the opportunity, within fifteen (15) days of its receipt of such notice to cure said event, provided, however, there shall be no time period permitted to cure a second or subsequent occurrence under this Section 6(f) (whether such second occurrence be of the same or a different event specified in subsections (i) through (vi) above).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;g. **<u>Termination Following a Change of Control</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. In the event that a "Change in Control" or an "Attempted Change in Control" as hereinafter defined, of the Company shall occur at any time during the Term hereof, the Executive shall have the right to terminate the Executive's employment under this Agreement upon thirty (30) days written notice given at any time within one year after the occurrence of such event, and such termination of the Executive's employment with the Company pursuant to this Section 6(g)(i), and, in any such event, such termination shall be deemed to be a Termination by the Company Other than for Cause and the Executive shall be entitled to such Compensation and Benefits as set forth in Subsection 6(h) of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii. For purposes of this Agreement, a "**Change in Control**" of the Company shall be deemed to have occurred at such time as:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. any "person", other than the Executive, (as such term is used in Section 13(d) and 14(d) of the Exchange Act) is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing fifty (50%) percent or more of the combined voting power of the Company's outstanding securities then having the right to vote at elections of directors; or,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. the individuals who at the commencement date of the Agreement constitute the Board cease for any reason to constitute a majority thereof unless the election, or nomination for election, of each new director was approved by a vote of at least two thirds of the directors then in office who were directors at the commencement of the Agreement; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. there is a failure to elect two or more (or such number of directors as would constitute a majority of the Board) candidates nominated by management of the Company to the Board; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. the business of the Company for which the Executive's services are principally performed is disposed of by the Company pursuant to a partial or complete liquidation of the Company, a sale of assets (including stock of a subsidiary of the Company) or otherwise.

Anything herein to the contrary notwithstanding, this Section 6(g)(ii) will not apply where the Executive gives the Executive's explicit written waiver stating that for the purposes of this Section 6(g)(ii) a Change in Control shall not be deemed to have occurred. The Executive's participation in any negotiations or other matters in relation to a Change in Control shall in no way constitute such a waiver which can only be given by an explicit written waiver as provided in the preceding sentence.

An "**Attempted Change in Control**" shall be deemed to have occurred if any substantial attempt, accompanied by significant work efforts and expenditures of money, is made to accomplish a Change in Control, as described in subparagraphs (A), (B), (C) or (D) above whether or not such attempt is made with the approval of a majority of the then current members of the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iii. In the event that, within twelve (12) months of any Change in Control of the Company or any Attempted Change in Control of the Company, the Company terminates the employment of the Executive under this Agreement, for any reason other than for Cause as defined in Section 6(c), or the Executive's employment is constructively terminated as defined in Section 6(f), then, in any such event, such termination shall be deemed to be a Termination by the Company Other than for Cause and the Executive shall be entitled to such Compensation and Benefits as set forth in Subsection 6(d) of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;h. **<u>Benefits Upon Termination of Executive Employment</u>**. In the event of any termination of Executive's employment Other than for Cause, or any termination of Executive's employment pursuant to Sections 6(d), 6(f) or 6(g), on the effective date of any such termination, the Executive shall be entitled to receive all life, disability and health insurance benefits to which he was entitled which shall continue for a period of three (3) months following the effective date of such termination.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7. <u>Covenant Not to Compete and Non-Disclosure of Information</u>.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. **<u>Covenant Not to Compete</u>**. The Executive acknowledges and recognizes the highly competitive nature of the Company's business and the goodwill, continued patronage, and specifically the names and addresses of the Company's Clients (as hereinafter defined) constitute a substantial asset of the Company having been acquired through considerable time, money and effort. Accordingly, in consideration of the execution of this Agreement, in the event the Executive's employment is terminated pursuant to paragraph 6 supra, then the Executive agrees to the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. That during the Restricted Period (as hereinafter defined), the Executive will not, individually or in conjunction with others, directly or indirectly, engage in any Competitive Business Activities (as hereinafter defined), whether as an officer, director, proprietor, employer, partner, independent contractor, investor (other than as a holder solely as an investment of less than 1% of the outstanding capital stock of a publicly traded corporation), consultant, advisor or agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii. That during the Restricted Period, the Executive will not, directly or indirectly, compete with the Company by soliciting, inducing or influencing any of the Company's Clients which have a business relationship with the Company at the time during the Restricted Period to discontinue or reduce the extent of such relationship with the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. **<u>Non-Disclosure of Information</u>**. Executive agrees that, during the Restricted Period, Executive will not knowingly use or disclose any Proprietary Information of the Company for the Executive's own purposes or for the benefit of any entity engaged in Competitive Business Activities. As used herein, the term "**Proprietary Information**" shall mean trade secrets or confidential proprietary information of the Company which are material to the conduct of the business of the Company. Information can be considered Proprietary Information unless the same is otherwise in the public domain or is required to be disclosed by order of any court or by reason of any statute, law, rule, regulation, ordinance or other governmental requirement. Executive further agrees, all Documents in his possession at the time of his termination shall be returned to the Company at the Company's principal place of business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. **<u>Documents</u>**. "**Documents**" shall mean all original written, recorded, or graphic matters whatsoever, and any and all copies thereof, including, but not limited to: papers; books; records; tangible things; correspondence; communications; telex messages; memoranda; work-papers; reports; affidavits; statements; summaries; analyses; evaluations; client records and information; agreements; agendas; advertisements; instructions; charges; manuals; brochures; publications; directories; industry lists; schedules; price lists; client lists; statistical records; training manuals; computer printouts; books of account, records and invoices reflecting business operations; all things similar to any of the foregoing however denominated. In all cases where originals are not available, the term "Documents" shall also mean identical copies of original documents or non-identical copies thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. **<u>Company's Clients</u>**. The "**Company's Clients**" shall be deemed to be any partnerships, corporations, professional associations or other business organizations with whom the Company has conducted business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e. **<u>Restrictive Period</u>**. The "**Restrictive Period**" shall be deemed to be three (3) months following termination of the Executive's employment with the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f. **<u>Competitive Business Activities</u>**. The term "**Competitive Business Activities**" as used herein shall be deemed to mean the business of the Company at the time of termination.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;g. **<u>Covenants as Essential Elements of this Agreement</u>**. It is understood by and between the parties hereto that the foregoing covenants contained in this Sections 7 and elsewhere throughout this Agreement are essential elements of this Agreement, and that but for the agreement by the Executive to comply with such covenants, the Company would not have agreed to enter into this Agreement. Such covenants by the Executive shall be construed to be agreements independent of any other provisions of this Agreement. The existence of any other claim or cause of action, whether predicated on any other provision in this Agreement, or otherwise, as a result of the relationship between the parties shall not constitute a defense to the enforcement of such covenants against the Executive.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. **<u>Survival After Termination of Agreement</u>**. Notwithstanding anything to the contrary contained in this Agreement, the covenants in Sections 7, 8 and 9 shall survive the termination of this Agreement and the Executive's employment with the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;j. **<u>Remedies</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. The Executive acknowledges and agrees that the Company's remedy at law for a breach or threatened breach of any of the provisions of Section 7(a) or (b) herein would be inadequate and a breach thereof will cause irreparable harm to the Company. In recognition of this fact, in the event of a breach by the Executive of any of the provisions of Section 7(a) or (b), the Executive agrees that, in addition to any remedy at law available to the Company, including, but not limited to monetary damages, all rights of the Executive to payment or otherwise under this Agreement and all amounts then or thereafter due to the Executive from the Company under this Agreement may be terminated and the Company, without posting any bond, shall be entitled to obtain, and the Executive agrees not to oppose the Company's request for equitable relief in the form of specific performance, temporary restraining order, temporary or permanent injunction or any other equitable remedy which may then be available to the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii. The Executive acknowledges that the granting of a temporary injunction, temporary restraining order or permanent injunction merely prohibiting the use of Proprietary Information would not be an adequate remedy upon breach or threatened breach of Section 7(a) or (b) and consequently agrees, upon proof of any such breach, to the granting of injunctive relief prohibiting any form of competition with the Company. Nothing herein contained shall be construed as prohibiting the Company from pursuing any other remedies available to it for such breach or threatened breach.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.  **<u>Conflicts of Interest</u>** . Executive shall avoid all activities and other actions that would conflict with the interests of the Company.
 Executive shall not use his position, or any knowledge gained from or in connection with his position, in such a manner that a conflict
 arises between the interests of the Company and Executive's personal, immediate family, or private economic or other interests.

9.  **<u>Confidentiality</u>** .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Executive will not at any time (whether during or after Executive's employment with the Company) (i) retain or use for the benefit, purposes or account of Executive or any other person; or (ii) disclose, divulge, reveal, communicate, share, transfer or provide access to any person outside the Company (other than its professional advisers who are bound by confidentiality obligations), any non-public, proprietary or confidential information, including without limitation trade secrets, know-how, research and development, software, databases, processes, and other intellectual property, information concerning finances, investments, services, donors, investors, partners, personnel, compensation, recruiting, training, advertising, marketing, promotions, government and regulatory activities and approvals, concerning the past, current or future business, activities of the Company and/or any third party that has disclosed or provided any of the same to the Company on a confidential basis ("Confidential Information") without the prior written authorization of the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Confidential Information shall not include any information that is (i) generally known to the industry or the public other than as a result of Executive's breach of this covenant or any breach of other confidentiality obligations by third parties; (ii) made legitimately available to Executive by a third party without breach of any confidentiality obligation; or (iii) required by law to be disclosed; provided that Executive shall give prompt written notice to the Company of such requirement, disclose no more information that is so required, and cooperate with any attempts by the Company to obtain a protective order or similar treatment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Except as otherwise required by law, Executive will not disclose to anyone other than Executive's immediate family and legal and/or financial advisors, the contents of this Agreement; provided that Executive may disclose to any prospective future employer the provisions of Section 5 of this Agreement provided they agree to maintain the confidentiality of such terms. Unless otherwise required by law, the Company agrees not to disclose the contents of this Agreement to anyone other than its Board, its advisors or the Company employees with a need to know.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. **<u>Intellectual Property</u>**. Executive is to promptly identify and disclose to the Company intellectual property, discoveries, inventions, technological innovations, improvements and copyrightable works conceived or made by him, solely or jointly, during his employment with the Company, relating in any manner to the business, business plans, or development plans of the Company, whether conceived or made during working hours (the "Inventions"). All such Inventions, whether patentable or not patentable, are the exclusive property of the Company with respect to any and all countries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. **<u>Indemnification</u>.** The Executive shall continue to be covered by the Certificate of Incorporation and/or the Bylaws of the Company with respect to matters occurring on or prior to the date of termination of the Executive's employment with the Company, subject to all the provisions of Nevada and Federal law and the Certificate of Incorporation and Bylaws of the Company then in effect. Such reasonable expenses, including attorneys' fees, that may be covered by the Certificate of Incorporation and/or Bylaws of the Company shall be paid by the Company on a current basis in accordance with such provision, the Company's Certificate of Incorporation and Nevada law. To the extent that any such payments by the Company pursuant to the Company's Certificate of Incorporation and/or Bylaws may be subject to repayment by the Executive pursuant to the provisions of the Company's Certificate of Incorporation or Bylaws, or pursuant to Nevada or Federal law, such repayment shall be due and payable by the Executive to the Company within three (3) months after the termination of all proceedings, if any, which relate to such repayment and to the Company's affairs for the period prior to the date of termination of the Executive's employment with the Company and as to which Executive has been covered by such applicable provisions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12. **<u>Withholding</u>**. Anything to the contrary notwithstanding, all payments required to be made by the Company hereunder to the Executive or the Executive's estate or beneficiaries shall be subject to the withholding of such amounts, if any, relating to tax and other payroll deductions as the Company may reasonably determine it should withhold pursuant to any applicable law or regulation. In lieu of withholding such amounts, the Company may accept other arrangements pursuant to which it is satisfied that such tax and other payroll obligations will be satisfied in a manner complying with applicable law or regulation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13. **<u>Notices</u>**. Any notice required or permitted to be given under the terms of this Agreement shall be sufficient if in writing and if sent postage prepaid by registered or certified mail, return receipt requested; by overnight delivery; by courier; or by confirmed telecopy, in the case of the Executive to the Executive's last place of business or residence as shown on the records of the Company, or in the case of the Company to its principal office as set forth in the first paragraph of this Agreement, or at such other place as it may designate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14. **<u>Waiver</u>**. Unless agreed in writing, the failure of either party, at any time, to require performance by the other of any provisions hereunder shall not affect its right thereafter to enforce the same, nor shall a waiver by either party of any breach of any provision hereof be taken or held to be a waiver of any other preceding or succeeding breach of any term or provision of this Agreement. No extension of time for the performance of any obligation or act shall be deemed to be an extension of time for the performance of any other obligation or act hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15. **<u>Completeness and Modification</u>**. This Agreement constitutes the entire understanding between the parties hereto superseding all prior and contemporaneous agreements or understandings among the parties hereto concerning the Employment Agreement. This Agreement may be amended, modified, superseded or canceled, and any of the terms, covenants, representations, warranties or conditions hereof may be waived, only by a written instrument executed by the parties or, in the case of a waiver, by the party to be charged.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16. **<u>Counterparts</u>**. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which shall constitute but one agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17. **<u>Binding Effect/Assignment</u>**. This Agreement shall be binding upon the parties hereto, their heirs, legal representatives, successors and assigns. This Agreement shall not be assignable by the Executive but shall be assignable by the Company in connection with the sale, transfer or other disposition of its business or to any of the Company's affiliates controlled by or under common control with the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18. **<u>Governing Law</u>**. This Agreement shall become valid when executed and accepted by Company. The parties agree that it shall be deemed made and entered into in the State of Florida and shall be governed and construed under and in accordance with the laws of the State of Florida. Anything in this Agreement to the contrary notwithstanding, the Executive shall conduct the Executive's business in a lawful manner and faithfully comply with applicable laws or regulations of the state, city or other political subdivision in which the Executive is located.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19. **<u>Further Assurances</u>**. All parties hereto shall execute and deliver such other instruments and do such other acts as may be necessary to carry out the intent and purposes of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20. **<u>Headings</u>**. The headings of the sections are for convenience only and shall not control or affect the meaning or construction or limit the scope or intent of any of the provisions of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;21. **<u>Survival</u>**. Any termination of this Agreement shall not, however, affect the ongoing provisions of this Agreement which shall survive such termination in accordance with their terms.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;22. **<u>Severability</u>**. The invalidity or unenforceability, in whole or in part, of any covenant, promise or undertaking, or any section, subsection, paragraph, sentence, clause, phrase or word or of any provision of this Agreement shall not affect the validity or enforceability of the remaining portions thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;23. **<u>Enforcement</u>**. Should it become necessary for any party to institute legal action to enforce the terms and conditions of this Agreement, the successful party will be awarded reasonable attorneys' fees at all trial and appellate levels, expenses and costs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;24. **<u>Venue</u>**. The Company and the Executive acknowledge and agree that Palm Beach County Florida shall be the venue and exclusive proper forum in which to adjudicate any case or controversy arising either, directly or indirectly, under or in connection with this Agreement and the parties further agree that, in the event of litigation arising out of or in connection with this Agreement in these courts, they will not contest or challenge the jurisdiction or venue of these courts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;25. **<u>Construction</u>**. This Agreement shall be construed within the fair meaning of each of its terms and not against the party drafting the document.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;26. **<u>Role of Counsel</u>**. The Executive acknowledges his understanding that this Agreement was prepared at the request of the Company by, its counsel, and that such firm did not represent the Executive in conjunction with this Agreement or any of the related transactions. The Executive, as further evidenced by his signature below, acknowledges that he has had the opportunity to obtain the advice of independent counsel of his choosing prior to his execution of this Agreement and that he has availed himself of this opportunity to the extent he deemed necessary and advisable.

**THE EXECUTIVE ACKNOWLEDGES THAT, IN EXECUTING THIS AGREEMENT, THE EXECUTIVE HAS HAD THE OPPORTUNITY TO SEEK THE ADVICE OF INDEPENDENT LEGAL COUNSEL, AND HAS READ AND UNDERSTOOD ALL OF THE TERMS AND PROVISIONS OF THIS AGREEMENT.** 

**IN WITNESS WHEREOF**, the parties have executed this Agreement as of date set forth in the first paragraph of this Agreement.

---

| | |
|:---|:---|
| **THE COMPANY** | **THE COMPANY** |
| **SRM ENTERTANMENT, INC.** | **SRM ENTERTANMENT, INC.** |
| By: | */s/ Brian S. John* |
| Name: | Brian S. John |
| Chairman | Chairman |
| **THE EXECUTIVE** | **THE EXECUTIVE** |
| */s/ Richard Miller* | */s/ Richard Miller* |
| Richard Miller | Richard Miller |

---

## Exhibit 10.4

**Exhibit 10.4**

**EXECUTIVE EMPLOYMENT AGREEMENT**

**THIS EXECUTIVE EMPLOYMENT AGREEMENT** (the "**Agreement**") is made and entered into as of the 1<sup>st</sup> day of January 2023 (the "**Effective Date**"), between SRM Entertainment, Inc., a Nevada corporation, whose principal place of business is 1061 E. Indiantown Road, Suite 110, Jupiter, FL 33477 (the "**Company**") and Taft Flittner, an individual whose mailing address is 1120 Wilkinson Street Orlando FL 32803 (the "**Executive**").

**RECITALS**

**WHEREAS,** the Company desires to employ the Executive and the Executive desires to be employed by the Company and to enter into a formal employment agreement for the benefit and protection of all of the parties.

**WHEREAS,** the Company and the Executive agree this Agreement will replace the Employment Agreement between the Executive and Jupiter Wellness, Inc. dated July 22, 2021 ("Jupiter Agreement").

**WHEREAS,** the Company desires to employ the Executive and the Executive desires to be employed by the Company and to enter into a formal employment agreement for the benefit and protection of all of the parties.

**NOW, THEREFORE**, in consideration of the mutual agreements herein made, the Company and the Executive do hereby agree as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. **<u>Recitals</u>**. The above recitals are true, correct, and are herein incorporated by reference.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. **<u>Employment</u>**. The Company hereby employs the Executive as the Company's President, and the Executive hereby accepts employment, upon the terms and conditions hereinafter set forth.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. **<u>Duties and Responsibilities</u>**. During the term of this Agreement, the Executive shall serve as President of the Company, and shall have all power and authority inherent in to the office of President of the Company and shall be responsible for those areas in the conduct of the business reasonably assigned to him by the Board of Directors (the "Board").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. **<u>Term</u>**. The Term of employment hereunder will commence on the Effective Date of January 1, 2023.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. **<u>Compensation and Benefits</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **a.** **<u>Salary</u>**. The Executive shall be paid an initial base salary (the "**Base Salary**"), payable bi-weekly, at an annualized rate of One Hundred Thousand ($100,000) Dollars for the period commencing on the Effective Date and ending at the end of the Term.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. **<u>Options and Bonus.</u>** The Executive shall receive Fifty Thousand (50,000) ISO options to purchase shares of the Company's common stock pursuant to the 2022 Equity Inventive Plan. The ISO options will vest in annually tranches and be full vested two (2) years from the date of this Agreement. The option strike price will be the closing price on the date of issuance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Additionally, the executive will receive an annual bonus(s') based on a percentage of EBITDA, growth and other factors which will determined by the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. **<u>Executive Benefits</u>**. The Executive shall be entitled to participate in all benefit programs of the Company currently existing or hereafter made available to executives and/or other salaried employees, including, but not limited to, pension and other retirement plans, group life insurance, hospitalization, surgical and major medical coverage, sick leave, disability and salary continuation, vacation and holidays, cellular telephone and all related costs and expenses, long-term disability, and other fringe benefits.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. **<u>Vacation</u>**. The Executive shall be entitled to three (3) weeks of paid vacation during this Agreement. During the Term of this Agreement Executive may utilize such vacation as the Executive shall determine; provided however, that the Executive shall evidence reasonable judgment with regard to appropriate vacation scheduling. The executive will not be paid for unused vacation time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e. **<u>Business Expense Reimbursement</u>**. During the term of employment, the Executive shall be entitled to receive proper reimbursement for all reasonable, out-of-pocket expenses incurred by the Executive (in accordance with the policies and procedures established by the Company for its senior executive officers) in performing services hereunder, provided the Executive properly accounts therefor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. **<u>Consequences of Termination of Employment</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. **<u>Death</u>**. This Agreement and the Executive's employment hereunder shall be terminated by the death of the Executive. In the event of the death of the Executive during the Term, the Base Salary shall be paid to the Executive's designated beneficiary, or, in the absence of such designation, to the estate or other legal representative of the Executive, for three (3) months from the date of the Executive's death, all granted but unvested Options shall immediately vest and all vested but unexercised Options shall remain exercisable by the Executive's designated beneficiary, or, in the absence of such designation, to the estate or other legal representative of the Executive, through the term of such Option.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. **<u>Disability</u>**<u>.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. In the event of the Executive's disability, as hereinafter defined, the Executive shall be entitled to compensation in accordance with the Company's disability compensation practice for senior executives, including any separate arrangement or policy covering the Executive, but in all events the Executive shall continue to receive the Executive's Base Salary for a period, at the annual rate in effect immediately prior to the commencement of disability, through the date on which the disability has been deemed to occur as hereinafter provided below, and for a period of three (3) months thereafter, all granted but unvested Options shall immediately vest and all vested but unexercised Options shall remain exercisable by the Executive through the term of such Option. Any amounts provided for in this Section 6(b) shall not be offset by other long-term disability benefits provided to the Executive by the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii. "**Disability**," for the purposes of this Agreement, shall be deemed to have occurred in the event (A) the Executive is unable by reason of sickness or accident, to perform the Executive's duties under this Agreement for an aggregate of sixty (60) days in any consecutive six (6) month period or (B) the Executive has a guardian of the person or estate appointed by a court of competent jurisdiction. Termination due to disability shall be deemed to have occurred upon the first day of the month following the determination of disability as defined in the preceding sentence.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iii. Anything herein to the contrary notwithstanding, if, following a termination of employment hereunder due to disability as provided in the preceding paragraph, the Executive becomes reemployed, whether as an Executive or a consultant to the Company, any salary, annual incentive payments or other benefits earned by the Executive from such reemployment shall offset any salary continuation due to the Executive hereunder commencing with the date of re-employment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. **<u>Termination by the Company for Cause</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. Nothing herein shall prevent the Company from terminating Employment for "Cause," as hereinafter defined. The Executive shall continue to receive the Base Salary then in effect only for the period through the date of such termination and any vested Options shall remain exercisable pursuant to the terms thereof. Any rights and benefits the Executive may have in respect of any other compensation shall be determined in accordance with the terms of such other compensation arrangements or such plans or programs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii. "**Cause**" shall mean and include those actions or events specified below in subsections (A) through (D) to the extent the same occur, or the events constituting the same take place, subsequent to the date of execution of this Agreement: (A) committing or participating in an injurious act of, gross neglect or embezzlement against the Company; (B) committing or participating in any other injurious act or omission wantonly, willfully, recklessly or in a manner which was grossly negligent against the Company, monetarily or otherwise; (C) engaging in a criminal enterprise involving moral turpitude; or (D) the Executive being charged with or a conviction of an act or acts constituting a felony under the laws of the United States or any state thereof. Any other termination shall be deemed a termination "**Other than for Cause**."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iii. Notwithstanding anything else contained in this Agreement, this Agreement will not be deemed to have been terminated for Cause unless and until there shall have been delivered to the Executive a notice of termination stating that the Executive committed one of the types of conduct set forth in this Section 6(c) contained in this Agreement and specifying the particulars thereof and the Executive shall be given a fifteen (15) day period to cure such conduct, if possible. The Executive shall be entitled to receive his entire compensation during such notice period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. **<u>Termination by the Company Other than for Cause</u>**. The foregoing notwithstanding, the Company may terminate the Executive's employment for whatever reason it deems appropriate; provided, however, that in the event such termination is not based on Cause, as provided in Section 6(c) above, the Company may terminate this Agreement upon giving one (1) months' prior written notice. During such one (1) month period, the Executive shall continue to perform the Executive's duties pursuant to this Agreement, and the Company shall continue to compensate the Executive in accordance with this Agreement. Upon termination, the Executive will receive a lump sum equal to their remaining (12 month prorated) calendar year salary and all granted but unvested Options shall immediately vest and all vested but unexercised Options shall remain exercisable by the Executive through the term of such Option.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e. **<u>Voluntary Termination</u>**. In the event the Executive terminates the Executive's employment on the Executive's own volition (except as provided in Section 6(f) and/or Section 6(g) prior to the expiration of the Term of this Agreement, including any renewals thereof, such termination shall constitute a voluntary termination and in such event the Executive shall be limited to the same rights and benefits as provided in connection with a termination for Cause as provided in Section 6(c).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f. **<u>Constructive Termination of Employment</u>**. If the Executive so elects, a termination by the Company without Cause under Section 6(d) shall be deemed to have occurred upon the occurrence of one or more of the following events without the express written consent of the Executive:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. a significant change in the nature or scope of the authorities, powers, functions, duties or responsibilities attached to Executive's position as described in Section 3; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii. a change in Executive's principal office to a location outside the counties of Orange County or Orlando, Florida surrounding area; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iii. any reduction in the Executive's Base Salary; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iv. a material breach of the Agreement by the Company; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;v. a material reduction of the Executive's benefits under any employee benefit plan, program or arrangement (for Executive individually or as part of a group) of the Company as then in effect or as in effect on the effective date of the Agreement, which reduction shall not be effectuated for similarly situated employees of the Company; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;vi. failure by a successor company to assume the obligations under the Agreement.

Anything herein to the contrary notwithstanding, the Executive shall give written notice to the Board of the Company that the Executive believes an event has occurred which would result in a Constructive Termination of the Executive's employment under this Section 6(f), which written notice shall specify the particular act or acts, on the basis of which the Executive intends to so terminate the Executive's employment, and the Company shall then be given the opportunity, within fifteen (15) days of its receipt of such notice to cure said event, provided, however, there shall be no time period permitted to cure a second or subsequent occurrence under this Section 6(f) (whether such second occurrence be of the same or a different event specified in subsections (i) through (vi) above).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;g. **<u>Termination Following a Change of Control</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. In the event that a "Change in Control" or an "Attempted Change in Control" as hereinafter defined, of the Company shall occur at any time during the Term hereof, the Executive shall have the right to terminate the Executive's employment under this Agreement upon thirty (30) days written notice given at any time within one year after the occurrence of such event, and such termination of the Executive's employment with the Company pursuant to this Section 6(g)(i), and, in any such event, such termination shall be deemed to be a Termination by the Company Other than for Cause and the Executive shall be entitled to such Compensation and Benefits as set forth in Subsection 6(h) of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii. For purposes of this Agreement, a "**Change in Control**" of the Company shall be deemed to have occurred at such time as:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. any "person", other than the Executive, (as such term is used in Section 13(d) and 14(d) of the Exchange Act) is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the combined voting power of the Company's outstanding securities then having the right to vote at elections of directors; or,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. the individuals who at the commencement date of the Agreement constitute the Board cease for any reason to constitute a majority thereof unless the election, or nomination for election, of each new director was approved by a vote of at least two-thirds of the directors then in office who were directors at the commencement of the Agreement; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. there is a failure to elect two or more (or such number of directors as would constitute a majority of the Board) candidates nominated by management of the Company to the Board; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. the business of the Company for which the Executive's services are principally performed is disposed of by the Company pursuant to a partial or complete liquidation of the Company, a sale of assets (including stock of a subsidiary of the Company) or otherwise.

Anything herein to the contrary notwithstanding, this Section 6(g)(ii) will not apply where the Executive gives the Executive's explicit written waiver stating that for the purposes of this Section 6(g)(ii) a Change in Control shall not be deemed to have occurred. The Executive's participation in any negotiations or other matters in relation to a Change in Control shall in no way constitute such a waiver which can only be given by an explicit written waiver as provided in the preceding sentence.

An "**Attempted Change in Control**" shall be deemed to have occurred if any substantial attempt, accompanied by significant work efforts and expenditures of money, is made to accomplish a Change in Control, as described in subparagraphs (A), (B), (C) or (D) above whether or not such attempt is made with the approval of a majority of the then current members of the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iii. In the event that, within twelve (12) months of any Change in Control of the Company or any Attempted Change in Control of the Company, the Company terminates the employment of the Executive under this Agreement, for any reason other than for Cause as defined in Section 6(c), or the Executive's employment is constructively terminated as defined in Section 6(f), then, in any such event, such termination shall be deemed to be a Termination by the Company Other than for Cause and the Executive shall be entitled to such Compensation and Benefits as set forth in Subsection 6(d) of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;h. **<u>Benefits Upon Termination of Executive Employment</u>**. In the event of any termination of Executive's employment Other than for Cause, or any termination of Executive's employment pursuant to Sections 6(d), 6(f) or 6(g), on the effective date of any such termination, the Executive shall be entitled to receive all life, disability and health insurance benefits to which he was entitled which shall continue for a period of three (3) months following the effective date of such termination. In addition, in the event of termination, the Executive retains the right to re-assume the Options Book of Business that he previously built at Options prior to his employment with Jupiter Wellness.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7. <u>Covenant Not to Compete and Non-Disclosure of Information</u>.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. **<u>Covenant Not to Compete</u>**. The Executive acknowledges and recognizes the highly competitive nature of the Company's business and the goodwill, continued patronage, and specifically the names and addresses of the Company's Clients (as hereinafter defined) constitute a substantial asset of the Company having been acquired through considerable time, money and effort. Accordingly, in consideration of the execution of this Agreement, in the event the Executive's employment is terminated pursuant to paragraph 6 supra, then the Executive agrees to the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. That during the Restricted Period (as hereinafter defined), the Executive will not, individually or in conjunction with others, directly or indirectly, engage in any Competitive Business Activities (as hereinafter defined), whether as an officer, director, proprietor, employer, partner, independent contractor, investor (other than as a holder solely as an investment of less than 1% of the outstanding capital stock of a publicly traded corporation), consultant, advisor or agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii. That during the Restricted Period, the Executive will not, directly or indirectly, compete with the Company by soliciting, inducing or influencing any of the Company's Clients which have a business relationship with the Company at the time during the Restricted Period to discontinue or reduce the extent of such relationship with the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. **<u>Non-Disclosure of Information</u>**. Executive agrees that, during the Restricted Period, Executive will not knowingly use or disclose any Proprietary Information of the Company for the Executive's own purposes or for the benefit of any entity engaged in Competitive Business Activities. As used herein, the term "**Proprietary Information**" shall mean trade secrets or confidential proprietary information of the Company which are material to the conduct of the business of the Company. Information can be considered Proprietary Information unless the same is otherwise in the public domain or is required to be disclosed by order of any court or by reason of any statute, law, rule, regulation, ordinance or other governmental requirement. Executive further agrees, all Documents in his possession at the time of his termination shall be returned to the Company at the Company's principal place of business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. **<u>Documents</u>**. "**Documents**" shall mean all original written, recorded, or graphic matters whatsoever, and any and all copies thereof, including, but not limited to: papers; books; records; tangible things; correspondence; communications; telex messages; memoranda; work-papers; reports; affidavits; statements; summaries; analyses; evaluations; client records and information; agreements; agendas; advertisements; instructions; charges; manuals; brochures; publications; directories; industry lists; schedules; price lists; client lists; statistical records; training manuals; computer printouts; books of account, records and invoices reflecting business operations; all things similar to any of the foregoing however denominated. In all cases where originals are not available, the term "Documents" shall also mean identical copies of original documents or non-identical copies thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. **<u>Company's Clients</u>**. The "**Company's Clients**" shall be deemed to be any partnerships, corporations, professional associations or other business organizations with whom the Company has conducted business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e. **<u>Restrictive Period</u>**. The "**Restrictive Period**" shall be deemed to be two (2) years following termination of the Executive's employment with the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f. **<u>Competitive Business Activities</u>**. The term "**Competitive Business Activities**" as used herein shall be deemed to mean the business of the Company at the time of termination.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;g. **<u>Covenants as Essential Elements of this Agreement</u>**. It is understood by and between the parties hereto that the foregoing covenants contained in this Sections 7 and elsewhere throughout this Agreement are essential elements of this Agreement, and that but for the agreement by the Executive to comply with such covenants, the Company would not have agreed to enter into this Agreement. Such covenants by the Executive shall be construed to be agreements independent of any other provisions of this Agreement. The existence of any other claim or cause of action, whether predicated on any other provision in this Agreement, or otherwise, as a result of the relationship between the parties shall not constitute a defense to the enforcement of such covenants against the Executive.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. **<u>Survival After Termination of Agreement</u>**. Notwithstanding anything to the contrary contained in this Agreement, the covenants in Sections 7, 8 and 9 shall survive the termination of this Agreement and the Executive's employment with the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;j. **<u>Remedies</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. The Executive acknowledges and agrees that the Company's remedy at law for a breach or threatened breach of any of the provisions of Section 7(a) or (b) herein would be inadequate and a breach thereof will cause irreparable harm to the Company. In recognition of this fact, in the event of a breach by the Executive of any of the provisions of Section 7(a) or (b), the Executive agrees that, in addition to any remedy at law available to the Company, including, but not limited to monetary damages, all rights of the Executive to payment or otherwise under this Agreement and all amounts then or thereafter due to the Executive from the Company under this Agreement may be terminated and the Company, without posting any bond, shall be entitled to obtain, and the Executive agrees not to oppose the Company's request for equitable relief in the form of specific performance, temporary restraining order, temporary or permanent injunction or any other equitable remedy which may then be available to the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii. The Executive acknowledges that the granting of a temporary injunction, temporary restraining order or permanent injunction merely prohibiting the use of Proprietary Information would not be an adequate remedy upon breach or threatened breach of Section 7(a) or (b) and consequently agrees, upon proof of any such breach, to the granting of injunctive relief prohibiting any form of competition with the Company. Nothing herein contained shall be construed as prohibiting the Company from pursuing any other remedies available to it for such breach or threatened breach.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. **<u>Conflicts of Interest</u>**. Executive shall avoid all activities and other actions that would conflict with the interests of the Company. Executive shall not use his position, or any knowledge gained from or in connection with his position, in such a manner that a conflict arises between the interests of the Company and Executive's personal, immediate family, or private economic or other interests.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. **<u>Confidentiality</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Executive will not at any time (whether during or after Executive's employment with the Company) (i) retain or use for the benefit, purposes or account of Executive or any other person; or (ii) disclose, divulge, reveal, communicate, share, transfer or provide access to any person outside the Company (other than its professional advisers who are bound by confidentiality obligations), any non-public, proprietary or confidential information, including without limitation trade secrets, know-how, research and development, software, databases, processes, and other intellectual property, information concerning finances, investments, services, donors, investors, partners, personnel, compensation, recruiting, training, advertising, marketing, promotions, government and regulatory activities and approvals, concerning the past, current or future business, activities of the Company and/or any third party that has disclosed or provided any of the same to the Company on a confidential basis ("Confidential Information") without the prior written authorization of the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Confidential Information shall not include any information that is (i) generally known to the industry or the public other than as a result of Executive's breach of this covenant or any breach of other confidentiality obligations by third parties; (ii) made legitimately available to Executive by a third party without breach of any confidentiality obligation; or (iii) required by law to be disclosed; provided that Executive shall give prompt written notice to the Company of such requirement, disclose no more information that is so required, and cooperate with any attempts by the Company to obtain a protective order or similar treatment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Except as otherwise required by law, Executive will not disclose to anyone other than Executive's immediate family and legal and/or financial advisors, the contents of this Agreement; provided that Executive may disclose to any prospective future employer the provisions of Section 5 of this Agreement provided they agree to maintain the confidentiality of such terms. Unless otherwise required by law, the Company agrees not to disclose the contents of this Agreement to anyone other than its Board, its advisors or the Company employees with a need to know.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. **<u>Intellectual Property</u>**. Executive is to promptly identify and disclose to the Company intellectual property, discoveries, inventions, technological innovations, improvements and copyrightable works conceived or made by him, solely or jointly, during his employment with the Company, relating in any manner to the business, business plans, or development plans of the Company, whether conceived or made during working hours (the "Inventions"). All such Inventions, whether patentable or not patentable, are the exclusive property of the Company with respect to any and all countries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. **<u>Indemnification</u>.** The Executive shall continue to be covered by the Certificate of Incorporation and/or the Bylaws of the Company with respect to matters occurring on or prior to the date of termination of the Executive's employment with the Company, subject to all the provisions of Nevada and Federal law and the Certificate of Incorporation and Bylaws of the Company then in effect. Such reasonable expenses, including attorneys' fees, that may be covered by the Certificate of Incorporation and/or Bylaws of the Company shall be paid by the Company on a current basis in accordance with such provision, the Company's Certificate of Incorporation and Nevada law. To the extent that any such payments by the Company pursuant to the Company's Certificate of Incorporation and/or Bylaws may be subject to repayment by the Executive pursuant to the provisions of the Company's Certificate of Incorporation or Bylaws, or pursuant to Nevada or Federal law, such repayment shall be due and payable by the Executive to the Company within three (3) months after the termination of all proceedings, if any, which relate to such repayment and to the Company's affairs for the period prior to the date of termination of the Executive's employment with the Company and as to which Executive has been covered by such applicable provisions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12. **<u>Withholding</u>**. Anything to the contrary notwithstanding, all payments required to be made by the Company hereunder to the Executive or the Executive's estate or beneficiaries shall be subject to the withholding of such amounts, if any, relating to tax and other payroll deductions as the Company may reasonably determine it should withhold pursuant to any applicable law or regulation. In lieu of withholding such amounts, the Company may accept other arrangements pursuant to which it is satisfied that such tax and other payroll obligations will be satisfied in a manner complying with applicable law or regulation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13. **<u>Notices</u>**. Any notice required or permitted to be given under the terms of this Agreement shall be sufficient if in writing and if sent postage prepaid by registered or certified mail, return receipt requested; by overnight delivery; by courier; or by confirmed telecopy, in the case of the Executive to the Executive's last place of business or residence as shown on the records of the Company, or in the case of the Company to its principal office as set forth in the first paragraph of this Agreement, or at such other place as it may designate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14. **<u>Waiver</u>**. Unless agreed in writing, the failure of either party, at any time, to require performance by the other of any provisions hereunder shall not affect its right thereafter to enforce the same, nor shall a waiver by either party of any breach of any provision hereof be taken or held to be a waiver of any other preceding or succeeding breach of any term or provision of this Agreement. No extension of time for the performance of any obligation or act shall be deemed to be an extension of time for the performance of any other obligation or act hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15. **<u>Completeness and Modification</u>**. This Agreement constitutes the entire understanding between the parties hereto superseding all prior and contemporaneous agreements or understandings among the parties hereto concerning the Employment Agreement. This Agreement may be amended, modified, superseded or canceled, and any of the terms, covenants, representations, warranties or conditions hereof may be waived, only by a written instrument executed by the parties or, in the case of a waiver, by the party to be charged.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16. **<u>Counterparts</u>**. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which shall constitute but one agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17. **<u>Binding Effect/Assignment</u>**. This Agreement shall be binding upon the parties hereto, their heirs, legal representatives, successors and assigns. This Agreement shall not be assignable by the Executive but shall be assignable by the Company in connection with the sale, transfer or other disposition of its business or to any of the Company's affiliates controlled by or under common control with the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18. **<u>Governing Law</u>**. This Agreement shall become valid when executed and accepted by Company. The parties agree that it shall be deemed made and entered into in the State of Florida and shall be governed and construed under and in accordance with the laws of the State of Florida. Anything in this Agreement to the contrary notwithstanding, the Executive shall conduct the Executive's business in a lawful manner and faithfully comply with applicable laws or regulations of the state, city or other political subdivision in which the Executive is located.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19. **<u>Further Assurances</u>**. All parties hereto shall execute and deliver such other instruments and do such other acts as may be necessary to carry out the intent and purposes of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20. **<u>Headings</u>**. The headings of the sections are for convenience only and shall not control or affect the meaning or construction or limit the scope or intent of any of the provisions of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;21. **<u>Survival</u>**. Any termination of this Agreement shall not, however, affect the ongoing provisions of this Agreement which shall survive such termination in accordance with their terms.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;22. **<u>Severability</u>**. The invalidity or unenforceability, in whole or in part, of any covenant, promise or undertaking, or any section, subsection, paragraph, sentence, clause, phrase or word or of any provision of this Agreement shall not affect the validity or enforceability of the remaining portions thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;23. **<u>Enforcement</u>**. Should it become necessary for any party to institute legal action to enforce the terms and conditions of this Agreement, the successful party will be awarded reasonable attorneys' fees at all trial and appellate levels, expenses and costs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;24. **<u>Venue</u>**. The Company and the Executive acknowledge and agree that Palm Beach County Florida shall be the venue and exclusive proper forum in which to adjudicate any case or controversy arising either, directly or indirectly, under or in connection with this Agreement and the parties further agree that, in the event of litigation arising out of or in connection with this Agreement in these courts, they will not contest or challenge the jurisdiction or venue of these courts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;25. **<u>Construction</u>**. This Agreement shall be construed within the fair meaning of each of its terms and not against the party drafting the document.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;26. **<u>Role of Counsel</u>**. The Executive acknowledges his understanding that this Agreement was prepared at the request of the Company by, its counsel, and that such firm did not represent the Executive in conjunction with this Agreement or any of the related transactions. The Executive, as further evidenced by his signature below, acknowledges that he has had the opportunity to obtain the advice of independent counsel of his choosing prior to his execution of this Agreement and that he has availed himself of this opportunity to the extent he deemed necessary and advisable.

**THE EXECUTIVE ACKNOWLEDGES THAT, IN EXECUTING THIS AGREEMENT, THE EXECUTIVE HAS HAD THE OPPORTUNITY TO SEEK THE ADVICE OF INDEPENDENT LEGAL COUNSEL, AND HAS READ AND UNDERSTOOD ALL OF THE TERMS AND PROVISIONS OF THIS AGREEMENT.** 

**IN WITNESS WHEREOF**, the parties have executed this Agreement as of date set forth in the first paragraph of this Agreement.

---

| | |
|:---|:---|
| **THE COMPANY** | **THE COMPANY** |
| **SRM ENTERTANMENT, INC.** | **SRM ENTERTANMENT, INC.** |
| By: | */s/ Richard Miller*  |
| Name: | Richard Miller |
|  | Chief Executive Officer |
| **THE EXECUTIVE** | **THE EXECUTIVE** |
| */s/ Taft Flittner* | */s/ Taft Flittner* |
| Taft Flittner | Taft Flittner |

---

## Exhibit 10.5

**Exhibit 10.5**

**EXECUTIVE EMPLOYMENT AGREEMENT**

**THIS EXECUTIVE EMPLOYMENT AGREEMENT** (the "**Agreement**") is made and entered into as of the 1<sup>st</sup> day of January 2023 (the "**Effective Date**"), between SRM Entertainment, Inc., a Nevada corporation, whose principal place of business is 1061 E. Indiantown Road, Suite 110, Jupiter, FL 33477 (the "**Company**") and Debbie McDaniel Hand, (the "**Executive**").

**RECITALS**

**WHEREAS,** the Company desires to employ the Executive and the Executive desires to be employed by the Company and to enter into a formal employment agreement for the benefit and protection of all of the parties.

**WHEREAS,** the Company and the Executive agree this Agreement will replace the Employment Agreement between the Executive and Jupiter Wellness, Inc. dated July 22, 2021 ("Jupiter Agreement").

**WHEREAS,** the Company desires to employ the Executive and the Executive desires to be employed by the Company and to enter into a formal employment agreement for the benefit and protection of all of the parties.

**NOW, THEREFORE**, in consideration of the mutual agreements herein made, the Company and the Executive do hereby agree as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. **<u>Recitals</u>**. The above recitals are true, correct, and are herein incorporated by reference.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. **<u>Employment</u>**. The Company hereby employs the Executive as the Company's Vice President of Product Development & Operations, and the Executive hereby accepts employment, upon the terms and conditions hereinafter set forth.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. **<u>Duties and Responsibilities</u>**. During the term of this Agreement, the Executive shall serve as Vice President of Product Development & Operations of the Company, and shall have all power and authority inherent in to the office of Vice President of Product Development & Operations and shall be responsible for those areas in the conduct of the business reasonably assigned to her by the Board of Directors (the "Board").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. **<u>Term</u>**. The Term of employment hereunder will commence on the Effective Date of January 1, 2023.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. **<u>Compensation and Benefits</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **a.** **<u>Salary</u>**. The Executive shall be paid an initial base salary (the "**Base Salary**"), payable bi-weekly, at an annualized rate of Ninety Six Thousand Dollars ($96,000) for the period commencing on the Effective Date and ending at the end of the Term.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. **<u>Options and Bonus.</u>** The Executive shall receive Fifty Thousand (50,000) ISO options to purchase shares of the Company's common stock pursuant to the 2022 Equity Incentive Plan. The ISO options will vest in annually tranches and be full vested two years from the date of this Agreement. The option's strike price will be the closing price on the date of issuance. The Company shall pay Employee a bonus (the "*<u>Bonus</u>*") as follows: 1% of recognized revenues. (ii) the Bonus may be paid, at the election of Employee, in cash or shares of Common Stock (calculated at the fair market value of such shares as determined by the Board). Cash bonus will be paid semi-annually.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. **<u>Executive Benefits</u>**. The Executive shall be entitled to participate in all benefit programs of the Company currently existing or hereafter made available to executives and/or other salaried employees, including, but not limited to, pension and other retirement plans, group life insurance, hospitalization, surgical and major medical coverage, sick leave, disability and salary continuation, vacation and holidays, cellular telephone and all related costs and expenses, long-term disability, and other fringe benefits.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. **<u>Vacation</u>**. The Executive shall be entitled to three (3) weeks of paid vacation during this Agreement. During the Term of this Agreement, Executive may utilize such vacation as the Executive shall determine; provided however, that the Executive shall evidence reasonable judgment with regard to appropriate vacation scheduling. The executive will not be paid for unused vacation time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e. **<u>Business Expense Reimbursement</u>**. During the term of employment, the Executive shall be entitled to receive proper reimbursement for all reasonable, out-of-pocket expenses incurred by the Executive (in accordance with the policies and procedures established by the Company for its senior executive officers) in performing services hereunder, provided the Executive properly accounts therefor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. **<u>Consequences of Termination of Employment</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. **<u>Death</u>**. This Agreement and the Executive's employment hereunder shall be terminated by the death of the Executive. In the event of the death of the Executive during the Term, the Base Salary shall be paid to the Executive's designated beneficiary, or, in the absence of such designation, to the estate or other legal representative of the Executive, for three (3) months from the date of the Executive's death, all granted but unvested Options shall immediately vest and all vested but unexercised Options shall remain exercisable by the Executive's designated beneficiary, or, in the absence of such designation, to the estate or other legal representative of the Executive, through the term of such Option.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. **<u>Disability</u>**<u>.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. In the event of the Executive's disability, as hereinafter defined, the Executive shall be entitled to compensation in accordance with the Company's disability compensation practice for senior executives, including any separate arrangement or policy covering the Executive, but in all events the Executive shall continue to receive the Executive's Base Salary for a period, at the annual rate in effect immediately prior to the commencement of disability, through the date on which the disability has been deemed to occur as hereinafter provided below, and for a period of three (3) months thereafter, all granted but unvested Options shall immediately vest and all vested but unexercised Options shall remain exercisable by the Executive through the term of such Option. Any amounts provided for in this Section 6(b) shall not be offset by other long-term disability benefits provided to the Executive by the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii. "**Disability**," for the purposes of this Agreement, shall be deemed to have occurred in the event (A) the Executive is unable by reason of sickness or accident, to perform the Executive's duties under this Agreement for an aggregate of sixty (60) days in any consecutive six (6) month period or (B) the Executive has a guardian of the person or estate appointed by a court of competent jurisdiction. Termination due to disability shall be deemed to have occurred upon the first day of the month following the determination of disability as defined in the preceding sentence.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iii. Anything herein to the contrary notwithstanding, if, following a termination of employment hereunder due to disability as provided in the preceding paragraph, the Executive becomes reemployed, whether as an Executive or a consultant to the Company, any salary, annual incentive payments or other benefits earned by the Executive from such reemployment shall offset any salary continuation due to the Executive hereunder commencing with the date of re-employment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. **<u>Termination by the Company for Cause</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. Nothing herein shall prevent the Company from terminating Employment for "Cause," as hereinafter defined. The Executive shall continue to receive the Base Salary then in effect only for the period through the date of such termination and any vested Options shall remain exercisable pursuant to the terms thereof. Any rights and benefits the Executive may have in respect of any other compensation shall be determined in accordance with the terms of such other compensation arrangements or such plans or programs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii. "**Cause**" shall mean and include those actions or events specified below in subsections (A) through (D) to the extent the same occur, or the events constituting the same take place, subsequent to the date of execution of this Agreement: (A) committing or participating in an injurious act of, gross neglect or embezzlement against the Company; (B) committing or participating in any other injurious act or omission wantonly, willfully, recklessly or in a manner which was grossly negligent against the Company, monetarily or otherwise; (C) engaging in a criminal enterprise involving moral turpitude; or (D) the Executive being charged with or a conviction of an act or acts constituting a felony under the laws of the United States or any state thereof. Any other termination shall be deemed a termination "**Other than for Cause**."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iii. Notwithstanding anything else contained in this Agreement, this Agreement will not be deemed to have been terminated for Cause unless and until there shall have been delivered to the Executive a notice of termination stating that the Executive committed one of the types of conduct set forth in this Section 6(c) contained in this Agreement and specifying the particulars thereof and the Executive shall be given a fifteen (15) day period to cure such conduct, if possible. The Executive shall be entitled to receive his entire compensation during such notice period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. **<u>Termination by the Company Other than for Cause</u>**. The foregoing notwithstanding, the Company may terminate the Executive's employment for whatever reason it deems appropriate; provided, however, that in the event such termination is not based on Cause, as provided in Section 6(c) above, the Company may terminate this Agreement upon giving one (1) months' prior written notice. During such one (1) month period, the Executive shall continue to perform the Executive's duties pursuant to this Agreement, and the Company shall continue to compensate the Executive in accordance with this Agreement. Upon termination, the Executive will receive a lump sum equal to their remaining (12 month prorated) calendar year salary and all granted but unvested Options shall immediately vest and all vested but unexercised Options shall remain exercisable by the Executive through the term of such Option.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e. **<u>Voluntary Termination</u>**. In the event the Executive terminates the Executive's employment on the Executive's own volition (except as provided in Section 6(f) and/or Section 6(g) prior to the expiration of the Term of this Agreement, including any renewals thereof, such termination shall constitute a voluntary termination and in such event the Executive shall be limited to the same rights and benefits as provided in connection with a termination for Cause as provided in Section 6(c).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f. **<u>Constructive Termination of Employment</u>**. If the Executive so elects, a termination by the Company without Cause under Section 6(d) shall be deemed to have occurred upon the occurrence of one or more of the following events without the express written consent of the Executive:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. a significant change in the nature or scope of the authorities, powers, functions, duties or responsibilities attached to Executive's position as described in Section 3; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii. a change in Executive's principal office to a location outside the counties of Orange County or Orlando, Florida surrounding area; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iii. any reduction in the Executive's Base Salary; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iv. a material breach of the Agreement by the Company; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;v. a material reduction of the Executive's benefits under any employee benefit plan, program or arrangement (for Executive individually or as part of a group) of the Company as then in effect or as in effect on the effective date of the Agreement, which reduction shall not be effectuated for similarly situated employees of the Company; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;vi. failure by a successor company to assume the obligations under the Agreement.

Anything herein to the contrary notwithstanding, the Executive shall give written notice to the Board of the Company that the Executive believes an event has occurred which would result in a Constructive Termination of the Executive's employment under this Section 6(f), which written notice shall specify the particular act or acts, on the basis of which the Executive intends to so terminate the Executive's employment, and the Company shall then be given the opportunity, within fifteen (15) days of its receipt of such notice to cure said event, provided, however, there shall be no time period permitted to cure a second or subsequent occurrence under this Section 6(f) (whether such second occurrence be of the same or a different event specified in subsections (i) through (vi) above).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;g. **<u>Termination Following a Change of Control</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. In the event that a "Change in Control" or an "Attempted Change in Control" as hereinafter defined, of the Company shall occur at any time during the Term hereof, the Executive shall have the right to terminate the Executive's employment under this Agreement upon thirty (30) days written notice given at any time within one year after the occurrence of such event, and such termination of the Executive's employment with the Company pursuant to this Section 6(g)(i), and, in any such event, such termination shall be deemed to be a Termination by the Company Other than for Cause and the Executive shall be entitled to such Compensation and Benefits as set forth in Subsection 6(h) of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii. For purposes of this Agreement, a "**Change in Control**" of the Company shall be deemed to have occurred at such time as:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. any "person", other than the Executive, (as such term is used in Section 13(d) and 14(d) of the Exchange Act) is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the combined voting power of the Company's outstanding securities then having the right to vote at elections of directors; or,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. the individuals who at the commencement date of the Agreement constitute the Board cease for any reason to constitute a majority thereof unless the election, or nomination for election, of each new director was approved by a vote of at least two-thirds of the directors then in office who were directors at the commencement of the Agreement; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. there is a failure to elect two or more (or such number of directors as would constitute a majority of the Board) candidates nominated by management of the Company to the Board of Directors; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. the business of the Company for which the Executive's services are principally performed is disposed of by the Company pursuant to a partial or complete liquidation of the Company, a sale of assets (including stock of a subsidiary of the Company) or otherwise.

Anything herein to the contrary notwithstanding, this Section 6(g)(ii) will not apply where the Executive gives the Executive's explicit written waiver stating that for the purposes of this Section 6(g)(ii) a Change in Control shall not be deemed to have occurred. The Executive's participation in any negotiations or other matters in relation to a Change in Control shall in no way constitute such a waiver which can only be given by an explicit written waiver as provided in the preceding sentence.

An "**Attempted Change in Control**" shall be deemed to have occurred if any substantial attempt, accompanied by significant work efforts and expenditures of money, is made to accomplish a Change in Control, as described in subparagraphs (A), (B), (C) or (D) above whether or not such attempt is made with the approval of a majority of the then current members of the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iii. In the event that, within twelve (12) months of any Change in Control of the Company or any Attempted Change in Control of the Company, the Company terminates the employment of the Executive under this Agreement, for any reason other than for Cause as defined in Section 6(c), or the Executive's employment is constructively terminated as defined in Section 6(f), then, in any such event, such termination shall be deemed to be a Termination by the Company Other than for Cause and the Executive shall be entitled to such Compensation and Benefits as set forth in Subsection 6(d) of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;h. **<u>Benefits Upon Termination of Executive Employment</u>**. In the event of any termination of Executive's employment Other than for Cause, or any termination of Executive's employment pursuant to Sections 6(d), 6(f) or 6(g), on the effective date of any such termination, the Executive shall be entitled to receive all life, disability and health insurance benefits to which he was entitled which shall continue for a period of three (3) months following the effective date of such termination.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7. <u>Covenant Not to Compete and Non-Disclosure of Information</u>.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. **<u>Covenant Not to Compete</u>**. The Executive acknowledges and recognizes the highly competitive nature of the Company's business and the goodwill, continued patronage, and specifically the names and addresses of the Company's Clients (as hereinafter defined) constitute a substantial asset of the Company having been acquired through considerable time, money and effort. Accordingly, in consideration of the execution of this Agreement, in the event the Executive's employment is terminated pursuant to paragraph 6 supra, then the Executive agrees to the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. That during the Restricted Period (as hereinafter defined), the Executive will not, individually or in conjunction with others, directly or indirectly, engage in any Competitive Business Activities (as hereinafter defined), whether as an officer, director, proprietor, employer, partner, independent contractor, investor (other than as a holder solely as an investment of less than 1% of the outstanding capital stock of a publicly traded corporation), consultant, advisor or agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii. That during the Restricted Period, the Executive will not, directly or indirectly, compete with the Company by soliciting, inducing or influencing any of the Company's Clients which have a business relationship with the Company at the time during the Restricted Period to discontinue or reduce the extent of such relationship with the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. **<u>Non-Disclosure of Information</u>**. Executive agrees that, during the Restricted Period, Executive will not knowingly use or disclose any Proprietary Information of the Company for the Executive's own purposes or for the benefit of any entity engaged in Competitive Business Activities. As used herein, the term "**Proprietary Information**" shall mean trade secrets or confidential proprietary information of the Company which are material to the conduct of the business of the Company. Information can be considered Proprietary Information unless the same is otherwise in the public domain or is required to be disclosed by order of any court or by reason of any statute, law, rule, regulation, ordinance or other governmental requirement. Executive further agrees, all Documents in his possession at the time of his termination shall be returned to the Company at the Company's principal place of business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. **<u>Documents</u>**. "**Documents**" shall mean all original written, recorded, or graphic matters whatsoever, and any and all copies thereof, including, but not limited to: papers; books; records; tangible things; correspondence; communications; telex messages; memoranda; work-papers; reports; affidavits; statements; summaries; analyses; evaluations; client records and information; agreements; agendas; advertisements; instructions; charges; manuals; brochures; publications; directories; industry lists; schedules; price lists; client lists; statistical records; training manuals; computer printouts; books of account, records and invoices reflecting business operations; all things similar to any of the foregoing however denominated. In all cases where originals are not available, the term "Documents" shall also mean identical copies of original documents or non-identical copies thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. **<u>Company's Clients</u>**. The "**Company's Clients**" shall be deemed to be any partnerships, corporations, professional associations or other business organizations with whom the Company has conducted business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e. **<u>Restrictive Period</u>**. The "**Restrictive Period**" shall be deemed to be two (2) years following termination of the Executive's employment with the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f. **<u>Competitive Business Activities</u>**. The term "**Competitive Business Activities**" as used herein shall be deemed to mean the business of the Company at the time of termination.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;g. **<u>Covenants as Essential Elements of this Agreement</u>**. It is understood by and between the parties hereto that the foregoing covenants contained in this Sections 7 and elsewhere throughout this Agreement are essential elements of this Agreement, and that but for the agreement by the Executive to comply with such covenants, the Company would not have agreed to enter into this Agreement. Such covenants by the Executive shall be construed to be agreements independent of any other provisions of this Agreement. The existence of any other claim or cause of action, whether predicated on any other provision in this Agreement, or otherwise, as a result of the relationship between the parties shall not constitute a defense to the enforcement of such covenants against the Executive.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. **<u>Survival After Termination of Agreement</u>**. Notwithstanding anything to the contrary contained in this Agreement, the covenants in Sections 7, 8 and 9 shall survive the termination of this Agreement and the Executive's employment with the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;j. **<u>Remedies</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. The Executive acknowledges and agrees that the Company's remedy at law for a breach or threatened breach of any of the provisions of Section 7(a) or (b) herein would be inadequate and a breach thereof will cause irreparable harm to the Company. In recognition of this fact, in the event of a breach by the Executive of any of the provisions of Section 7(a) or (b), the Executive agrees that, in addition to any remedy at law available to the Company, including, but not limited to monetary damages, all rights of the Executive to payment or otherwise under this Agreement and all amounts then or thereafter due to the Executive from the Company under this Agreement may be terminated and the Company, without posting any bond, shall be entitled to obtain, and the Executive agrees not to oppose the Company's request for equitable relief in the form of specific performance, temporary restraining order, temporary or permanent injunction or any other equitable remedy which may then be available to the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii. The Executive acknowledges that the granting of a temporary injunction, temporary restraining order or permanent injunction merely prohibiting the use of Proprietary Information would not be an adequate remedy upon breach or threatened breach of Section 7(a) or (b) and consequently agrees, upon proof of any such breach, to the granting of injunctive relief prohibiting any form of competition with the Company. Nothing herein contained shall be construed as prohibiting the Company from pursuing any other remedies available to it for such breach or threatened breach.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. **<u>Conflicts of Interest</u>**. Executive shall avoid all activities and other actions that would conflict with the interests of the Company. Executive shall not use his position, or any knowledge gained from or in connection with his position, in such a manner that a conflict arises between the interests of the Company and Executive's personal, immediate family, or private economic or other interests.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. **<u>Confidentiality</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Executive will not at any time (whether during or after Executive's employment with the Company) (i) retain or use for the benefit, purposes or account of Executive or any other person; or (ii) disclose, divulge, reveal, communicate, share, transfer or provide access to any person outside the Company (other than its professional advisers who are bound by confidentiality obligations), any non-public, proprietary or confidential information, including without limitation trade secrets, know-how, research and development, software, databases, processes, and other intellectual property, information concerning finances, investments, services, donors, investors, partners, personnel, compensation, recruiting, training, advertising, marketing, promotions, government and regulatory activities and approvals, concerning the past, current or future business, activities of the Company and/or any third party that has disclosed or provided any of the same to the Company on a confidential basis ("Confidential Information") without the prior written authorization of the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Confidential Information shall not include any information that is (i) generally known to the industry or the public other than as a result of Executive's breach of this covenant or any breach of other confidentiality obligations by third parties; (ii) made legitimately available to Executive by a third party without breach of any confidentiality obligation; or (iii) required by law to be disclosed; provided that Executive shall give prompt written notice to the Company of such requirement, disclose no more information that is so required, and cooperate with any attempts by the Company to obtain a protective order or similar treatment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Except as otherwise required by law, Executive will not disclose to anyone other than Executive's immediate family and legal and/or financial advisors, the contents of this Agreement; provided that Executive may disclose to any prospective future employer the provisions of Section 5 of this Agreement provided they agree to maintain the confidentiality of such terms. Unless otherwise required by law, the Company agrees not to disclose the contents of this Agreement to anyone other than its Board, its advisors or the Company employees with a need to know.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. **<u>Intellectual Property</u>**. Executive is to promptly identify and disclose to the Company intellectual property, discoveries, inventions, technological innovations, improvements and copyrightable works conceived or made by him, solely or jointly, during his employment with the Company, relating in any manner to the business, business plans, or development plans of the Company, whether conceived or made during working hours (the "Inventions"). All such Inventions, whether patentable or not patentable, are the exclusive property of the Company with respect to any and all countries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. **<u>Indemnification</u>.** The Executive shall continue to be covered by the Certificate of Incorporation and/or the Bylaws of the Company with respect to matters occurring on or prior to the date of termination of the Executive's employment with the Company, subject to all the provisions of Nevada and Federal law and the Certificate of Incorporation and Bylaws of the Company then in effect. Such reasonable expenses, including attorneys' fees, that may be covered by the Certificate of Incorporation and/or Bylaws of the Company shall be paid by the Company on a current basis in accordance with such provision, the Company's Certificate of Incorporation and Nevada law. To the extent that any such payments by the Company pursuant to the Company's Certificate of Incorporation and/or Bylaws may be subject to repayment by the Executive pursuant to the provisions of the Company's Certificate of Incorporation or Bylaws, or pursuant to Nevada or Federal law, such repayment shall be due and payable by the Executive to the Company within three (3) months after the termination of all proceedings, if any, which relate to such repayment and to the Company's affairs for the period prior to the date of termination of the Executive's employment with the Company and as to which Executive has been covered by such applicable provisions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12. **<u>Withholding</u>**. Anything to the contrary notwithstanding, all payments required to be made by the Company hereunder to the Executive or the Executive's estate or beneficiaries shall be subject to the withholding of such amounts, if any, relating to tax and other payroll deductions as the Company may reasonably determine it should withhold pursuant to any applicable law or regulation. In lieu of withholding such amounts, the Company may accept other arrangements pursuant to which it is satisfied that such tax and other payroll obligations will be satisfied in a manner complying with applicable law or regulation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13. **<u>Notices</u>**. Any notice required or permitted to be given under the terms of this Agreement shall be sufficient if in writing and if sent postage prepaid by registered or certified mail, return receipt requested; by overnight delivery; by courier; or by confirmed telecopy, in the case of the Executive to the Executive's last place of business or residence as shown on the records of the Company, or in the case of the Company to its principal office as set forth in the first paragraph of this Agreement, or at such other place as it may designate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14. **<u>Waiver</u>**. Unless agreed in writing, the failure of either party, at any time, to require performance by the other of any provisions hereunder shall not affect its right thereafter to enforce the same, nor shall a waiver by either party of any breach of any provision hereof be taken or held to be a waiver of any other preceding or succeeding breach of any term or provision of this Agreement. No extension of time for the performance of any obligation or act shall be deemed to be an extension of time for the performance of any other obligation or act hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15. **<u>Completeness and Modification</u>**. This Agreement constitutes the entire understanding between the parties hereto superseding all prior and contemporaneous agreements or understandings among the parties hereto concerning the Employment Agreement. This Agreement may be amended, modified, superseded or canceled, and any of the terms, covenants, representations, warranties or conditions hereof may be waived, only by a written instrument executed by the parties or, in the case of a waiver, by the party to be charged.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16. **<u>Counterparts</u>**. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which shall constitute but one agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17. **<u>Binding Effect/Assignment</u>**. This Agreement shall be binding upon the parties hereto, their heirs, legal representatives, successors and assigns. This Agreement shall not be assignable by the Executive but shall be assignable by the Company in connection with the sale, transfer or other disposition of its business or to any of the Company's affiliates controlled by or under common control with the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18. **<u>Governing Law</u>**. This Agreement shall become valid when executed and accepted by Company. The parties agree that it shall be deemed made and entered into in the State of Florida and shall be governed and construed under and in accordance with the laws of the State of Florida. Anything in this Agreement to the contrary notwithstanding, the Executive shall conduct the Executive's business in a lawful manner and faithfully comply with applicable laws or regulations of the state, city or other political subdivision in which the Executive is located.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19. **<u>Further Assurances</u>**. All parties hereto shall execute and deliver such other instruments and do such other acts as may be necessary to carry out the intent and purposes of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20. **<u>Headings</u>**. The headings of the sections are for convenience only and shall not control or affect the meaning or construction or limit the scope or intent of any of the provisions of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;21. **<u>Survival</u>**. Any termination of this Agreement shall not, however, affect the ongoing provisions of this Agreement which shall survive such termination in accordance with their terms.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;22. **<u>Severability</u>**. The invalidity or unenforceability, in whole or in part, of any covenant, promise or undertaking, or any section, subsection, paragraph, sentence, clause, phrase or word or of any provision of this Agreement shall not affect the validity or enforceability of the remaining portions thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;23. **<u>Enforcement</u>**. Should it become necessary for any party to institute legal action to enforce the terms and conditions of this Agreement, the successful party will be awarded reasonable attorneys' fees at all trial and appellate levels, expenses and costs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;24. **<u>Venue</u>**. The Company and the Executive acknowledge and agree that Palm Beach County Florida shall be the venue and exclusive proper forum in which to adjudicate any case or controversy arising either, directly or indirectly, under or in connection with this Agreement and the parties further agree that, in the event of litigation arising out of or in connection with this Agreement in these courts, they will not contest or challenge the jurisdiction or venue of these courts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;25. **<u>Construction</u>**. This Agreement shall be construed within the fair meaning of each of its terms and not against the party drafting the document.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;26. **<u>Role of Counsel</u>**. The Executive acknowledges his understanding that this Agreement was prepared at the request of the Company by, its counsel, and that such firm did not represent the Executive in conjunction with this Agreement or any of the related transactions. The Executive, as further evidenced by his signature below, acknowledges that he has had the opportunity to obtain the advice of independent counsel of his choosing prior to his execution of this Agreement and that he has availed himself of this opportunity to the extent he deemed necessary and advisable.

**THE EXECUTIVE ACKNOWLEDGES THAT, IN EXECUTING THIS AGREEMENT, THE EXECUTIVE HAS HAD THE OPPORTUNITY TO SEEK THE ADVICE OF INDEPENDENT LEGAL COUNSEL, AND HAS READ AND UNDERSTOOD ALL OF THE TERMS AND PROVISIONS OF THIS AGREEMENT.** 

**IN WITNESS WHEREOF**, the parties have executed this Agreement as of date set forth in the first paragraph of this Agreement.

---

| | |
|:---|:---|
| **THE COMPANY** | **THE COMPANY** |
| **SRM ENTERTANMENT, INC.** | **SRM ENTERTANMENT, INC.** |
| By: | */s/ Richard Miller* |
| Name: | Richard Miller |
|  | Chief Executive Officer |
| **THE EXECUTIVE** | **THE EXECUTIVE** |
| */s/ Debbie-McDaniel Hand* | */s/ Debbie-McDaniel Hand* |
| Debbie McDaniel Hand | Debbie McDaniel Hand |

---

## Exhibit 10.6

**Exhibit 10.6**

---

| | |
|:---|:---|
| **<u>MERCHANDISING LICENSE AGREEMENT</u>**<br> REF. 2022_LA_ME-HOME_NV_5017 | **<u>MERCHANDISING LICENSE AGREEMENT</u>**<br> REF. 2022_LA_ME-HOME_NV_5017 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Agreement, is entered into 28 July 2022, but will start retroactively as July 1, 2022 ("<u>Effective Date</u>"), by and between | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Agreement, is entered into 28 July 2022, but will start retroactively as July 1, 2022 ("<u>Effective Date</u>"), by and between |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**LAFIG Belgium s.a.**, a Belgium company,<br> having its principal office at<br> Rue du Cerf 85,<br> 1332 Genval,<br> Belgium<br> (hereinafter "<u>LICENSOR</u>")<br>|
| &nbsp;&nbsp;&nbsp;and | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**SRM ENTERTAINMENT INC**<br> having its principal office at<br> 1061 E Indiantown Road Suite 110<br> 33477 Jupiter<br> United States<br>(hereinafter "<u>LICENSEE</u>") |

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**<u>RECITALS</u>**

**II.** STUDIO PEYO S.A. is the sole and exclusive owner of trademark rights in and to and relating to characters known by the name "THE SMURFS" along with trademark registrations relating thereto, including but not limited to those as identified on Schedule B, Part 1 (collectively referred to as the "<u>SMURF Trademarks</u>").

**III.** LICENSOR acquired the exclusive exploitation rights of the SMURF Works and of the SMURF Trademarks from STUDIO PEYO S.A., for the Licensed Territory (as defined in Article 7), and has the power and authority to negotiate, conclude and grant license agreements, authorizing the use, manufacture, distribution, and sale of goods, along with related advertising, marketing and promotional materials, that incorporate or are otherwise based on one or more of the SMURF Works and/or SMURF Trademarks. LICENSOR has retained the rights of agent to assist in such exploitation of rights.

**IV.** LICENSOR desires to license the SMURF Works as specified in Schedule A (the, "<u>Licensed Works</u>") and the SMURF Trademarks as specified in Schedule B Part 2 (the "<u>Licensed Marks</u>") (the Licensed Works and Licensed Marks are collectively referred to as the "<u>Licensed Works and Marks</u>"), to LICENSEE subject to the terms set forth in this Agreement, including but not limited to LICENSOR's right to control the quality of the goods and other materials bearing any of the Licensed Works and Marks.

**V.** LICENSEE wishes to use the Licensed Works and Marks in connection with the manufacture, sale, marketing, and distribution of certain article(s) as described in Article 3.2 (the "<u>Licensed Products</u>") and certain promotional products as described in Article 4, if any (the "<u>Promotional Products</u>"), through specified channels of trade described in Article 7 (the "<u>Licensed Channels of Trade</u>"); has represented that it has the ability to do so in the Licensed Territory, and desires to obtain from LICENSOR a license for such use.

**VI.** LICENSOR is willing to grant LICENSEE licenses in connection with the Licensed Products and Promotional Products, subject to the terms set forth in this Agreement, including but not limited to LICENSOR's right to control the quality of the Licensed Products and Promotional Products and other materials including or bearing any of the Licensed Works and Marks.

**VII.** LICENSOR desires to protect the integrity of the Licensed Works and Marks and to preserve STUDIO PEYO, S.A.'s rights therein**.**

**VIII.** LICENSEE, and LICENSOR recognize and agree that certain restrictions on LICENSEE's use of the Licensed Works and Marks are necessary to ensure that the integrity thereof is preserved, that the fame and value of the Licensed Works and Marks is not diluted, that the Licensed Works and Marks are not subject to disrepute in the course of LICENSEE'S use thereof, that the reputations of STUDIO PEYO S.A., Peyo, and LICENSOR are not subject to disrepute, and that the ownership rights in the Licensed Works and Marks by STUDIO PEYO S.A. are preserved.

**TITLE I: SPECIAL CONDITIONS**

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|:---|:---|
| **1** | **<u>DEFINITIONS</u>** |

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For the purposes of this Agreement, the following terms shall have the following meanings:

**1.1**" <u>Net Sales</u> " shall mean the gross invoice amount billed to LICENSEE'S customers for any Licensed Products or Promotional
 Products sold by LICENSEE or otherwise distributed pursuant to this Agreement, less the following deductions: non-cash refunds and
 discounts actually allowed to customers for trade and quantity, return for damaged goods actually credited, but such deductions must
 actually appear on customer invoices or credit memoranda and shall not exceed, per quarter, ten percent (10%) of the Gross Invoiced
 Price of that particular Licensed Product. It is understood that the above mentioned credit against sales will be allowed only for
 actual returns of damaged goods, and that no credit against sales will be allowed on the basis of an accrual or reserve system. Deductions
 may also be made for amounts received from sales to LICENSOR for Licensed Products or Promotional Products and for sales taxes, if
 included in gross sales, collected from customers and remitted to the proper government authority. No deductions shall be made for
 non-collectible accounts, cash or other discounts, commissions, fees, taxes, assessments, impositions, payments, or expenses of any
 kind that may be incurred or paid by the LICENSEE, including but not limited to expenses incurred when manufacturing, selling, distributing,
 exploiting or promoting Licensed Products, Promotional Products and/or packaging therefore.

**"**<u>Net Sales Price"</u> shall mean the Net Sales per Licensed Product.

<u>"Gross Invoiced Price"</u> shall mean the gross pricing set by LICENSEE for a Licensed Product, before any discount, credit or other reduction (early payment discount, quantity discount, rebate etc…) which will be higher or equal to the aforesaid Net Sales price.

**1.2** "Licensed <u>Territory</u> " shall mean the country or countries set forth in Article 7.

**1.3** "Licensed
 Product" shall mean each unit of Licensed Products.

**1.4**" <u>Term</u> "
 shall mean the duration of this Agreement as specified in Article 8.

**1.5**" <u>Books and Records</u> " shall mean such books and records or other documents belonging to LICENSEE necessary to fully and accurately
 disclose the nature and details of all activities undertaken under this Agreement by LICENSEE or any party acting at its direction,
 including, but not limited to, production, inventory, marketing, promotion and sales records inclusive of records to calculate all
 Royalties due under this Agreement.

**1.6** Any
 " <u>Approval</u> " required by this Agreement to be obtained from LICENSOR shall mean an approval in writing in accordance
 with Article 19.

**1.7** For
 purposes of this Agreement, a Licensed Product or Promotional Product shall be considered " <u>sold</u> " on the date when
 such Licensed Product or Promotional Product is billed, invoiced, shipped, distributed, paid for (including advance payments received
 by LICENSEE before such Licensed Product or Promotional Product is shipped), or when any other value in exchange for the Licensed
 Product or Promotional Product is received by LICENSEE, whichever event occurs first.

**1.8**" <u>Confidential Information</u> " means all materials, trade secrets, or other information, including, without limitation, materials regarding
 a Party's products, business information, or objectives, which is designated as confidential in writing by the disclosing Party,
 whether by letter or by the use of an appropriate stamp or legend, prior to or at the time any such material, trade secret, or other
 information is disclosed by the disclosing Party to the other Party. Notwithstanding the foregoing to the contrary, materials, trade
 secrets, or other information in writing without an appropriate letter, stamp, or legend, shall constitute Confidential Information
 if the disclosing Party, within thirty (30) days after such disclosure, delivers to the other Party a written document or documents
 describing the materials, trade secrets, or other information and referencing the place and date of such oral, visual, or written
 disclosure and the names of the persons to whom such disclosure was made. Notwithstanding the foregoing, the financial conditions
 of this Agreement are "Confidential Information" and cannot be disclosed.

**1.9**" <u>Agreement</u> "
 shall mean this Merchandising License Agreement, along with all schedules referenced herein that are hereby incorporated by reference,
 and as may be amended from time to time in accordance with Article 40.2 of this Agreement.

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|:---|:---|
| **2** | **<u>ARTWORK / TRADEMARK / LANGUAGE USE REQUIREMENTS:</u>** |

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**2.1** **ARTWORK USE REQUIREMENTS** 

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| | |
|:---|:---|
| **All Styleguides :** | **Quantity of high resolution downloads** |
| New TV Series | 100 |
| Fashion (\*) | 100 |
| 3D | 100 |
| Classic | 100 |
| Themed (\*) | 100 |
| New Movie (\*\*) | 100 |

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(\*) Access to the Fashion Styleguide and the Sustainable assets included in the Themed Styleguide shall be solely authorized while such assets are appropriate for use together with the LICENSED PRODUCTS.

(\*\*) Access to the New Movie Styleguide, when available and if available during the TERM, shall be subject to LICENSOR's express written approval.

If an access is granted to more than one Style Guide, the Statement of Account set forth under section 17.2. of the Agreement shall be separated on a style guide-by-style guide basis. If LICENSEE uses artwork illustrations involving the declaration of talent rights together with the Licensed Products, Promotional Products and/or packaging therefore LICENSOR shall immediately inform LICENSEE upon artwork submission and LICENSEE shall mention it in the Statement of Account as set forth under Article 17.2 of the Agreement.

LICENSEE agrees to develop a consistent line of Licensed Products recognizable by the constant global look of the packaging, hangtags, hand tags and other labels, as approved by LICENSOR including all drawings chosen by LICENSEE.

**2.2** **TRADEMARK USE REQUIREMENTS** 

The Licensed Marks are limited to those specified in Schedule B and may be used only in compliance with LICENSORs Trademark guidelines.

**2.3** **LANGUAGE USE REQUIREMENTS** 

All texts on the Licensed Products and on their packaging, or on documents related to the Licensed Products, will be in English only.

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|:---|:---|
| **3** | **<u>PRODUCTS</u>** |

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**3.1** **PRODUCT CATEGORY** 

The product category(ies) and product type(s) are defined as follows :

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|:---|:---|
| **Product Category** | **Product type(s)** |
| HOME | Tableware |

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**3.2** **Licensed PRODUCTS** 

- Sip with Me Cup

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|:---|:---|
| **4** | **<u>PREMIUMS - PROMOTIONAL PRODUCTS</u>** |

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Subject to the conditions set forth in Article 12, the license granted by this agreement does include the possibility to distribute PREMIUMS representing the LICENSED WORK with the PRODUCTS.

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|:---|:---|
| **5** | **<u>MEDIA ADVERTISING</u>** |

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The license granted by this agreement includes the possibility to advertise the Licensed Products in the media.

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|:---|:---|
| **6** | **<u>LICENSE TYPE</u>** |

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The license granted by this agreement is NON EXCLUSIVE.

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|:---|:---|
| **7** | **<u>LICENSED TERRITORI(E)S AND CHANNELS OF TRADE</u>** |

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**7.1** **LICENSED TERRITORI(E)S:** 

United States.

**7.2** **LICENSED CHANNEL OF TRADE:** 

Toy stores, Specialty Stores, Online (delivery limited to Licensed Territory), Mass market stores, Super & Hypermarkets, Gift Channels, Department Stores & Mid Tier, Book Retailers and Airport Stores & Duty Free Shops only.

All the Channels of Trade not listed above are expressly not authorized.

Except explicitly authorized in writing by Licensor, the sales of the Licensed Products through value retailers & discount stores, free, amusement and theme parks, Family entertainment centers, Smurf themed events such as ticketed live shows, any concept stores related to the above, and vending machines are not included in the Licensed Channels of Trade included in the license granted by this agreement.

Moreover, LICENSEE shall not sell or distribute the Licensed Products for advertising-, promotional- or similar purposes or as premiums (e.g. gifts or bonuses) or sales bundled to other products or for similar purposes.

LICENSEE shall take reasonable steps to ensure that Licensed Products will be sold exclusively through the authorized channels of distribution, e.g. it shall only sell to wholesalers who are generally selling exclusively to retailers selling to the public, or to retailers selling to the public.

Distribution of a Licensed Product through Discount Stores, Value Retailers and Dollar Stores or other Off-Price channels and Close Out Stores is authorized after one-year distribution of the reference through traditional full-price channels.

Throughout the Term of this Agreement and any Sell-Off Period, Licensee agrees to refrain from "dumping" the Licensed Products in the market place, whatever the Licensed Channels of Trade may be. "Dumping" shall mean the distribution of Licensed Products at volumes significantly above Licensee's prior sales practices with respect to the Licensed Products and at price levels so far below prior sales practices with respect to the Licensed Products as to disparage the Licensed Products; provided however, that nothing contained herein shall be deemed to restrict LICENSEE's ability to set prices at its own unfettered discretion.

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|:---|:---|
| **8** | **<u>DURATION OF THE AGREEMENT</u>** |

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**8.1** **TERM AND SELL-OFF PERIOD:** 

<u>Term:</u> The Term of this Agreement will begin on July 1, 2022 and will end on December 31, 2024.("<u>Initial Term</u>"), unless sooner terminated in accordance with Article 29 of the Agreement. The "Initial Term" and any Renewal Term(s) shall be referred to as the "<u>Term</u>".

<u>Sell-Off Period.</u> Ninety (90) days.

**8.2** **FIRST PLACEMENT DATE FOR FIRST YEAR FULL RANGE OF LICENSED PRODUCTS IN USA:** 

The products shall be placed on shelves before January 1, 2023

LICENSOR shall have the option (at its sole discretion) to terminate the Agreement in respect of the relevant Licensed Product(s) and in respect of the relevant Territory(ies), meaning that all rights in respect of such Licensed Product(s) in such Territory (ies) shall revert to LICENSOR if LICENSEE fails to achieve the Projected Sales target as set out in the License Proposal's Marketing Plan six months after the above mentioned placing on sale date for the applicable Licensed Product(s) ("Projected Sales") in the applicable Territory. If LICENSOR wishes to exercise its options as set out in this paragraph, it shall provide LICENSEE with at least thirty (30) days' written notice in advance of exercising such option. If the exercise of such option means that the Agreement in respect of all Licensed Products and in respect of all Territories terminates, the Agreement will be deemed prematurely terminated in its entirety as per Article 29.

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|:---|:---|
| **9** | **<u>FINANCIAL CONDITIONS</u>** |

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**9.1** **ROYALTIES** 

LICENSEE undertakes to pay to LICENSOR, a proportional royalty of: 14 % calculated on the Net Sales.

However, the above rate shall be 16 % of LICENSEE'S FOB Sales on those sales.

**9.2** **MINIMUM GUARANTEE** 

Amount of the minimum guarantee 20,000.00 - USD

Payment Schedule : <br>10,000.00 - USD upon signature of this Agreement 10,000.00 - USD at the latest on December 1, 2023.

**9.3** **ROYALTIES ON PREMIUMS** 

In case LICENSEE will distribute Premiums with the PRODUCTS, a royalty rate of 12% will be calculated on the net purchase price excluding taxes of such premiums.

**9.4** **ROYALTIES ON THE MEDIA BUDGET** 

In case LICENSEE will make media advertising, a royalty rate of 5% will be calculated on the gross media budget for above-the-line advertising, including but not limited to television, radio, internet, cinema, outdoor and bus shelters advertising.

**9.5** **ROYALTY STATEMENT** 

The royalty statements are due quarterly.

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|:---|:---|
| **10** | **<u>COPIES IN SUPPORT</u>** |

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| | | |
|:---|:---|:---|
|  | **Author samples due to** | **Author samples due to** |
| **Product** | **LICENSOR** | **AGENT** |
| Sip with Me Cup | 6 | 3 |

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The samples for LICENSOR shall be sent to the adresses indicated in this agreement.

The samples for the parties AGENT shall be sent to the following address:

VIACOM INTERNATIONAL INC.

1515 Broadway

10036 New York

United States

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|:---|:---|
| **11** | **<u>ADDRESSES</u>** |

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**11.1** **ADDRESS FOR NOTICE** 

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|:---|:---|
| **To LICENSOR:** | <br> LAFIG Belgium s.a.,<br> Rue du Cerf 85,<br> 1332 Genval,<br> Belgium |
| Attention | :Brigitte Ickmans with email copy to <u>anne.questiaux@smurf.com</u> |
| **To LICENSEE** | SRM ENTERTAINMENT INC<br> having its principal office at<br> 1061 E Indiantown Road Suite 110<br> 33477 Jupiter<br> United States<br>|
| **Attention** | <u>rebecca@srmentertainment.com</u> |

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**11.2** **MATERIAL CHANGE IN MANAGEMENT** 

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|:---|:---|
|  | SRM ENTERTAINMENT INC<br> having its principal office at<br> 1061 E Indiantown Road Suite 110<br> 33477 Jupiter<br> United States<br>|
| **Manager** | <u>rebecca@srmentertainment.com</u> |

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**11.3** **BANK ROUTING INFORMATION** 

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|:---|:---|
| Bank name | ING BELGIUM SA/NV |
|  | ACCOUNT OFFICE BUSINESS CENTER BRUSSELS |
| Bank Address | RUE DU CHAMP DE MARS 23<br> 1050 BRUXELLES |
| Account Name | Lafig Belgium |
| Account Number | 310-1958638-03 |
| Bank Routing Number | BE21 3101 9586 3803 |
| Swift Code | BBRUBEBB |

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|:---|:---|
| **12** | **<u>PLACEMENT AND FORM OF MARKETING AND NOTICES</u>** |

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All Licensed Products, Promotional Products and their packaging or documents related thereto shall bear the Smurf logo in the language(s) of the TERRITORY, except otherwise agreed on in Schedule B part 2 and during the approval process.

All Licensed Products, Promotional Products their packaging or documents related thereto shall bear the following trademark label (minimum size: 17 mm diameter), except otherwise agreed on in Schedule B part 2 and during the approval process:

![](ex10-6_006.jpg)

All Licensed Products, Promotional Products shall bear the following hologram:

![](ex10-6_007.jpg)

The Licensed Products, Promotional Products, their packaging or documents related thereto shall bear the following copyright notice:

![](ex10-6_008.jpg)

The formula will be revised from year to year, as advised by LICENSOR to LICENSEE in writing or otherwise agreed during the approval process.

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|:---|:---|
| **13** | **<u>INSURANCE LIMITS AND COVERAGE</u>** |

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LICENSEE shall, at its own cost and expense, obtain and maintain in full force and effect throughout the Term of this Agreement and for three (3) year thereafter the following policies:

(1) Commercial General Liability insurance coverage (including without limitation product liability, contractual liability, death and bodily injury liability, personal injury liability, advertising liability and property damage liability) such CGL policy shall provide amongst others protection against any and all claims, demands and causes of action arising out of any defects or failure to perform—alleged or otherwise—of the Licensed Products, the Promotional Products, packaging therefore, the holograms or any material used in connection therewith or any use thereof, and against any and all claims, demands and causes of action arising out of LICENSEE's manufacture, offer for sale, sale, advertisement, promotion, shipment and/or distribution of the Licensed Products, the Promotional Products, packaging therefore, the holograms or any material used in connection therewith or any use thereof or related use of the Licensed Marks and Works and

(2) Errors and Omissions insurance (including without limitation coverage for copyright/trademark infringement, rights of privacy, libel, slander, Internet liability, personal injury and all other coverage customary under an Errors and Omissions).

LICENSEE shall have endorsed to the above liability policies as additional insureds all of the following: LICENSOR and respective parent(s), subsidiaries, licensees, successors, related and affiliated companies, and each of their respective officers, directors, employees, agents, representatives and assigns ("Additional Insureds"). LICENSEE's policies will have an endorsement that states the above policies are primary and insurance maintained by LICENSOR and any other Additional Insureds are non-contributory and shall have a waiver of subrogation endorsed in favor of the Additional Insureds.

Such insurance shall be underwritten by insurers satisfactory to LICENSOR, and for the Commercial General Liability insurance shall be written for limits and coverage of not less than $5.000.000 U.S. Dollars (five million USD) in the aggregate, $2,000,000 U.S. Dollars (two million USD) each occurrence, and for the Errors and Omissions insurance shall be written for limits and coverage of not less than $5,000,000 U.S. Dollars (five million USD) in the aggregate, $3,000,000 U.S. Dollars (three million USD) each occurrence, it being understood that LICENSOR and any Additional Insureds are not responsible for any deductible amounts on LICENSEE's insurance policies. Coverage shall be on an occurrence rather than a claims-made basis. LICENSEE's insurance carriers will be licensed to do business in all the states/countries where LICENSEE does business.

LICENSEE shall furnish LICENSOR promptly, and no later than thirty (30) days after the execution of this agreement, with the certificates of insurance stating thereon the limits of liability, the period of coverage, the Parties insured and the insurer's agreement not to terminate or materially modify such insurance without endeavoring to notify LICENSOR in writing via certified mail, return receipt requested, at least ten (10) days before such termination or modification. In no event shall LICENSEE make any use of the Licensed Marks and Works before LICENSOR's receipt of such insurance certificates, nor manufacture, offer for sale, sell, advertise, promote, ship and/or distribute the Licensed Products or Promotional Products.

**TITLE II: GENERAL CONDITIONS**

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|:---|:---|
| **14** | **<u>GRANT</u>** |

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During the term of this Agreement, LICENSOR grants to LICENSEE, subject to the terms and conditions of this Agreement, a personal, non-transferable, non-assignable license, without the right to grant sub-licenses (except as expressly set forth herein), to use the Licensed Works and Marks (including any LICENSEE Works as defined in Article 19.6) on the Licensed Products and/or Promotional Products, and in connection with the marketing, promotion, distribution and sale thereof through the Licensed Channels of Trade in the Licensed Territory.

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|:---|:---|
| **15** | **<u>TERM AND RENEWALS</u>** |

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**15.1** The
 Agreement shall commence on the Effective Date and continue until expiration of the Term, except in the event of earlier termination
 in accordance with the provision of Article 29 herein.

**15.2** This
 Agreement may only be renewed upon written mutual agreement of the Parties, such agreement to be made in writing signed by the Parties
 prior to three (3) months from the end of the then-current Term of this Agreement, specifying the agreed-upon renewal period (" <u>Renewal Term</u> "). In the absence of any written agreement under which this Agreement is renewed, should the Parties, through their
 course of conduct continue to act under the terms of this Agreement after its expiration, any such continued course of conduct shall
 not be considered to constitute a renewal and LICENSOR or LICENSEE may at any time thereafter, upon thirty (30) days written notice
 to the other Party, require the cessation of any further actions or activity with respect to the Agreement. Any continued course
 of action undertaken by the Parties shall, in all respects, be subject to the terms of this Agreement including Article 16. For purposes
 of clarity, should the Agreement be terminated by either Party, any continued conduct on the part of LICENSEE under the terms of
 this Agreement (other than as expressly required) shall be deemed a violation of LICENSOR's rights and shall not be permitted
 unless otherwise expressly agreed to by the Parties in writing.

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|:---|:---|
| **16** | **<u>ROYALTIES</u>** |

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**16.1** For
 the Term of this Agreement, LICENSEE shall pay to LICENSOR the following amounts (collectively, " <u>Royalties</u> "):
 (a) non-refundable guaranteed minimum royalties in the amounts and on the dates as set forth in Article 9.2. (" <u>Guaranteed Minimum Royalties</u> "); (b) a non-refundable advance on Guaranteed Minimum Royalties in the amount and on the date as set
 forth in Article 9.3. (" <u>Advanced Royalties</u> "), which shall be deducted from those Guaranteed Minimum Royalties
 due LICENSOR during the Term of this Agreement until there is a zero balance; and (c) royalties in the amounts as set forth in Article
 9.1. in excess of the Guaranteed Minimum Royalties (" <u>Product Royalties</u> "). All Royalties and other amounts due
 to LICENSOR under this Agreement shall be paid in accordance with Article 17.

**16.2** If
 LICENSEE sells or transfers any Licensed Products or Promotional Products to any party affiliated with, or directly or indirectly
 related to or under common control of LICENSEE, or distributes Licensed Products on a "no charge" basis for promotional
 marketing or goodwill purposes, at a price less than the average price of the respective Licensed Product or Promotional Product
 charged to other customers in the applicable quarterly period, or if billed price for the Licensed Products is less than the average
 price of the respective Licensed Product or Promotional Product charged to other customers in the applicable quarterly period and
 the LICENSEE receives other compensation attributable to the distribution of the Licensed Products separate from the price which
 appears on the respective invoice, the Product Royalties payable to LICENSOR on such sales or transfers shall be computed based on
 Net Sales Price for the respective Licensed Product or Promotional Product during the applicable quarterly period.

**16.3** Where
 LICENSEE does not prepare an invoice for any sale, distribution, or transfer of any Licensed Products or Promotional Products, the
 royalty is to be calculated based on the Net Sales Price for such Licensed Product or Promotional Product during the applicable quarterly
 period, except for a reasonable number of samples which may be given away in the normal course of business, not to exceed two percent
 (2%) of LICENSEE'S total production of Licensed Products or Promotional Products, respectively.

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|:---|:---|
| **17** | **<u>ROYALTY PAYMENT AND REPORTING</u>** |

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**17.1** Unless
 payment dates are otherwise specified in Article 9.2. and 9.3., LICENSEE shall pay LICENSOR the Guaranteed Minimum Royalties and
 any Product Royalties due under this Agreement quarterly as set forth below. The first quarter ends March 31; the second quarter
 ends June 30; the third quarter ends September 30; and the fourth quarter ends December 31.

**17.2** A
 Statement of Account including the information set forth below shall be provided by LICENSEE to LICENSOR within fourteen (14) days
 after the end of each quarter and shall be certified by an officer or director of LICENSEE that it is true and accurate. The Statement
 of Account for each fourth quarter during the Term shall also provide the information identified below on a company by company basis
 limited to the top 25 companies or all customers with purchases greater than $10,000, whichever is greater, during the applicable
 quarterly period. Each quarterly Statement of Account, shall include: the number of units of each Licensed Product and Promotional
 Product manufactured, purchased, distributed and/or sold during that quarter, along with cost per unit to LICENSEE and Net Sales
 Price on which the royalty will be calculated for the quarter; the net purchase price paid by LICENSEE, excluding tax, for each Promotional
 Product during the quarter; the total gross amounts billed by LICENSEE to its customers and total Net Sales of each Licensed Product
 and Promotional Product distributed by LICENSEE during the quarter, the discounts provided per Licensed Product and the total cost
 for all media buys by or on behalf of LICENSEE for promotions, advertising and/or marketing of the Licensed Products or Promotional
 Products (" <u>Media Buys</u> ") during the quarter. If the Licensed Territory covers more than one country, accounting
 statements shall be separated on a country-by-country basis.

**17.3** Payments
 shall be remitted by LICENSEE to LICENSOR no later than thirty (30) days after the end of the applicable quarter. LICENSEE shall
 send all payments and statements to LICENSOR at the address set forth in Article 11.1. or at such other address as LICENSOR may designate
 in writing from time to time. All amounts to be paid by LICENSEE to LICENSOR under this Agreement shall be payable in the currency
 defined in Article 9.4.by electronic transfer without deductions for foreign currency exchange fluctuations, transfer fees, taxes
 (except withholding taxes according to the applicable bi-lateral double taxation conventions), levies, duties, imports, commissions,
 expenses or charges of any kind.

**17.4** Neither
 the receipt nor acceptance by LICENSOR of any payment or Statement of Account shall prevent LICENSOR from subsequently challenging
 the sufficiency, accuracy, or validity of such payment or statement.

**17.5** LICENSOR
 may immediately impose a charge of all overdue Royalty payments at a rate equal to one and one-quarter percent (1.25%) per month
 or the maximum lesser rate allowed by law, without prejudice to any other rights of LICENSOR under this Agreement, and which shall
 be indivisible.

**17.6** During
 the Term of this Agreement and for at least two (2) years following the termination or expiration of this Agreement or of any further
 agreement intending to renew the present or to carry on the exploitation of the rights granted herein and concluded between the Parties,
 their subsidiaries, successors, related and affiliated companies or any other company owned or managed by a member of LICENSEE's
 board or management, LICENSEE shall maintain Books and Records at LICENSEE's principal office relating to the manufacture,
 purchase, marketing, promotion, distribution and/or sale of Licensed Products and Promotional Products, as well as relating to the
 number of holograms affixed to the Licensed Products and the number of holograms left in stock after termination or expiration of
 the Agreement, relating to LICENSEE's Media Buys, and as are necessary to substantiate that (i) all statements submitted to
 LICENSOR hereunder were true, complete, and accurate, and (ii) all Royalties and other payments due LICENSOR hereunder shall have
 been paid to LICENSOR in accordance with the provisions of this Agreement. All Books and Records shall be maintained in accordance
 with generally accepted accounting principles consistently applied. During the Term of, and for two (2) years after the termination
 or expiration of this Agreement or of any further agreement intending to renew the present or to carry on the exploitation of the
 rights granted herein and concluded between the Parties, their subsidiaries, successors, related and affiliated companies or any
 other company owned or managed by a member of LICENSEE's board or management, the Books and Records shall be open to inspection,
 audit, and copying by an individual audit or accounting firm on behalf of LICENSOR during LICENSEE's regular business hours,
 upon prior reasonable notice to LICENSEE. It is understood and agreed that such information may be used in any proceeding based on
 LICENSEE's failure to pay its Royalty obligations under this Agreement or for breach of any other terms of this Agreement.
 The cost of any such audit or inspection shall be borne by LICENSOR except that if any such audit reveals an underpayment of the
 Royalties owed to LICENSOR, LICENSEE shall pay such discrepancy, plus interest, from the date the payment should have been paid,
 calculated at the rate of one and one-quarter percent (1.25%) per month or the maximum lesser rate allowed by law. If such underpayment
 is more than five percent (5%) of the amounts due in the applicable quarterly period, LICENSEE shall reimburse LICENSOR for the cost
 of such audit.

---

| | |
|:---|:---|
| **18** | **<u>MARKETING AND DISTRIBUTION</u>** |

---

**18.1** LICENSEE
 warrants that it shall use commercially reasonable efforts to effectively exploit the licensed rights granted herein, and promises
 to place the Licensed Products into *bona fide* distribution and sale in the Licensed Channels of Trade in commercially reasonable
 quantities throughout the Licensed Territory by the date of placing on sale set forth in Article 8.2. LICENSEE shall diligently and
 continuously market and distribute the Licensed Products in the Licensed Territory and will use its best efforts to make and maintain
 adequate arrangements for the maintenance of inventory and distribution necessary to meet the demand for such Licensed Products in
 the Licensed Territory. Failure by LICENSEE to meet the date of placing on sale or actively marketing and distributing Licensed Products
 shall be deemed a material breach of this Agreement. Without limiting the foregoing, LICENSEE agrees to engage in the specific advertising
 efforts, if any, identified in Article 5.1. Advertising Efforts, and to invest the amount of money, if any, specified in Article
 5.2. Advertising Expenditures in the advertising and promotion of the Licensed Products **.** 

**18.2** LICENSEE
 must obtain the prior, written consent of LICENSOR prior to engaging in any advertising, publicity, promotion of any Licensed Products
 and Promotional Products or otherwise including any of the Licensed Works and Marks. The procedure for submission to LICENSOR for
 approval shall be in conformity with the provisions regarding Approvals as set forth in Article 19.

**18.3** LICENSEE
 shall distribute and sell the Licensed Products or Promotional Products outright at a competitive price, and not on approval, consignment,
 sale-or-return, or any similar basis, and further, only to jobbers, wholesalers and retailers for distribution and sale to retail
 stores and merchants in the Licensed Channels of Trade. LICENSEE shall not sell or otherwise distribute any of Licensed Products
 for the purpose of advertising, promotions, tied sales, bundled sales, publicity or promotional tie-ins or by way of premiums and
 shall not sell to wholesalers, retailers, canvassers, salesman or any others who will use, or whom LICENSEE has valid reason to presume
 that their intention is to use, any of the Licensed Products for advertising purposes or as gifts or bonuses, or for similar purposes,
 without the prior written consent of LICENSOR.

**18.4** LICENSEE
 shall not use or authorize the use of any of the Licensed Works and Marks and/or any of the Licensed Products or Promotional Products
 in a manner which is immoral, scandalous, illegal, fraudulent or defamatory. Nor shall LICENSEE authorize the distribution of the
 Licensed Products in such points of sales or internet sites.

**18.5** LICENSEE
 shall assume exclusive obligations and responsibility, as well as all financial charges, for the development, manufacture, packaging,
 advertising, storage, distribution, sales, dispatch, invoicing, payment and other activities concerning the Licensed Products and
 Promotional Products and its obligations under this Agreement.

**18.6** LICENSEE
 shall obtain and maintain, at its own cost and expense, throughout the Term of this Agreement, insurance for limits and coverage
 as set forth in Article 13. The existence of the insurance shall not mitigate, alter, or waive the indemnity provisions of Article
 31. LICENSEE shall be solely responsible for the payment of all premiums, taxes, assessments, or other costs for the insurance.

**18.7** LICENSEE
 shall not use any of the Licensed Works and Marks for or in connection with the manufacture, marketing, sale or distribution of any
 product and/or service which is not authorized under the terms of this Agreement.

**18.8** LICENSEE
 shall only use the Licensed Works and Marks in accordance with the applicable Artwork Usage Requirements and Trademark Use Requirements,
 as set forth Article 2.1. and 2.2. Upon any modification the Artwork Usage Requirements and/or Trademark Use Requirements, LICENSEE
 shall comply with the modified Artwork Usage Requirements and/or Trademark Use Requirement thirty (30) days after receipt of written
 notice of the modification; provided, however, that LICENSEE may distribute and sell any existing inventory of Licensed Products,
 Promotional Products and packaging therefore for a period of ninety (90) days after receipt of such written notice so long as same
 are in compliance with the applicable Artwork Usage Requirements and Trademark Usage Requirements in place at the time of manufacture
 and other terms of this Agreement.

**18.9** LICENSEE
 shall not use any of the Licensed Marks and Works, or manufacture, advertise, distribute, or sell any of the Licensed Products and
 Promotional Products, by linking, integrating or associating them in any way, with other names, trademarks, characters or creative
 articles, or any other manufactured products, of whatever nature, which have not been authorized by this Agreement.

**18.10** All
 text, including the component "SMURF" or its translations, on the Licensed Products, Promotional Products, their packaging
 or documents related thereto, shall be in the English language only unless otherwise agreed in Schedule B part2 and Article 2.3.

**18.11** LICENSEE
 shall not use the Licensed Marks and Works hereunder, nor authorize such use, outside the Licensed Territory and/or outside the Licensed
 Channels of Trade within the Licensed Territory, and shall abstain from the sale or other distribution of any Licensed Products,
 Promotional Products and/or packaging therefor to entities or persons whom LICENSEE knows or should know will resell or otherwise
 distribute such Licensed Products, Promotional Products and/or packaging therefor outside of the Licensed Territory and/or outside
 the Licensed Channels of Trade within the Licensed Territory; provided however, it is understood that certain advertisements, promotions
 or other uses authorized under this Agreement directed to the Licensed Territory and the Licensed Channels of Trade may incidentally
 be viewed by persons or entities outside the Licensed Territory and/or the Licensed Channels of Trade. In connection with any such
 advertisement, promotions or other use authorized under this Agreement directed to the Licensed Territory and the Licensed Channels
 of Trade that may be received, accessed or otherwise viewed outside of the Licensed Territory or the Licensed Channels of Trade,
 such advertising and promotion shall specify that the Licensed Products and Promotional Products are only available within the Licensed
 Territory in the Licensed Channels of Trade and, so long as the foregoing is complied with and such advertising or promotion is not
 directed outside the Licensed Territory and/or outside the Licensed Channels of Trade, such advertising, promotion or other use shall
 not be deemed a breach of this Agreement.

**18.12** LICENSEE
 agrees that LICENSOR may purchase amounts of Licensed Products or Promotional Products from LICENSEE at LICENSEE's cost plus
 a 10% mark-up (such cost to be confirmed by competent written evidence) and LICENSOR may use, distribute and/or resell such purchased
 items in its sole discretion, including but not limited to for use as premiums.

---

| | |
|:---|:---|
| **19** | **<u>QUALITY CONTROL, SAMPLES AND APPROVAL</u>** |

---

**19.1** <u>Purpose of Quality Control.</u> In order to maintain the high quality and reputation associated with the SMURF Works and SMURF Trademarks
 and to preserve and maintain the moral rights of the author of the SMURF Works, all Licensed Products, Promotional Products, packaging
 relating thereto, and any other materials bearing any of the Licensed Works and Marks must be supplied to LICENSOR and have LICENSOR's
 prior Approval. For each variety of Licensed Product, Promotional Product, packaging or other material, such Approval must be obtained
 for each of three stages: (1) concept, (2) pre-production, and (3) final production.

**19.2** <u>Concept Approval</u>. Prior to creating or designing any Licensed Product, Promotional Product, packaging therefore or any other materials
 bearing any of the Licensed Works and Marks, LICENSEE shall provide LICENSOR for its approval written notice detailing the proposed
 concept for same, including but not limited to the specific use proposed, the particular Licensed Works and Marks to be used, the
 dates of planned distribution or use, locations for distribution or use, trade channels for distribution or use, estimated number
 of units to be distributed or used, and estimated sales, as applicable. LICENSEE shall seek concept approval from LICENSOR at least
 three months before the planned start of manufacture of a Licensed Product, Promotional Product, packaging therefor or commencement
 of a promotional campaign.

**19.3** <u>Pre-Production Stage Samples Approval.</u> LICENSEE shall submit in duplicate to LICENSOR for Approval a pre-production sample or prototype of any
 proposed Licensed Products or Promotional Products, including the packaging relating thereto, if any, and any other proposed materials
 bearing any of the Licensed Works and Marks. LICENSEE shall not manufacture (other than the manufacture of samples or prototypes
 for LICENSOR's approval), use, sell, market, distribute or sell any of the foregoing without having first obtained LICENSOR's
 Approval of samples or prototypes thereof. Following Approval or withholding of Approval by LICENSOR, LICENSOR shall keep a copy
 of any pre-production sample or prototype and return the other copy to LICENSEE. Any and all such samples and prototypes may not
 be sold or otherwise distributed by LICENSEE.

**19.4** <u>Final Production Approval</u>. Upon final production and prior to distribution, unless otherwise specified in Article 10, LICENSEE agrees
 to provide upon production at least three (3) samples of each reference of the final Licensed Products, Promotional Products, packaging
 material, or other materials bearing any of the Licensed Works and Marks, at no cost to LICENSOR, for LICENSOR's quality control
 inspection and approval.

**19.5** All
 original illustrations, drawings, lithographs, styles of writing, slogans, text, digital files and the like incorporating any of

 all rights in such originals shall remain the property of LICENSOR. In the case that the Parties agree in writing that LICENSEE will
 create original illustrations, drawings, styles of writing and the like incorporating any of the Licensed Works and Marks, LICENSEE
 shall ensure that all adaptations of the Licensed Works and Marks are faithful to such specimens which are provided to LICENSOR by
 LICENSEE, and that the procedures set forth in this Agreement regarding Approvals will be respected scrupulously. LICENSEE shall
 not permit any third party to create any original illustrations, drawings, styles of writing, slogans, text, copies of lithographs
 on film and the like incorporating any of the Licensed Works and Marks except pursuant to a separate written agreement with LICENSOR
 and such third party.

**19.6** Upon
 creation by LICENSEE of any original illustrations, drawings, styles of writing, slogans, text, lithographs and the like, in any
 medium now existing or later developed, under this Agreement, incorporating, based on and/or derived from any one or more of the
 Licensed Works and Marks pursuant to Schedule A. and B. (" <u>LICENSEE Works</u> "), such originals and all rights therein
 shall become the property of LICENSOR and shall be deemed to be Licensed Works and subject to the terms of this Agreement applicable
 to Licensed Works. All right and title, including all intellectual property and other proprietary rights therein (including all copyright,
 trademark and patent rights), are hereby irrevocably assigned to LICENSOR. LICENSOR shall be free to use and exploit such LICENSEE
 Works. LICENSEE represents and warrants to LICENSOR that the LICENSEE Works do not infringe or misappropriate the copyrights, trademarks,
 rights of publicity or any other rights of third parties and that LICESEE has the right to grant and will not contest the assignment
 of rights therein to LICENSOR. LICENSEE will indemnify and hold harmless LICENSOR for all third party claims with regard to the LICENSEE
 Works. Further, the term " <u>Moral Rights</u> " means any right to claim authorship of a work, any right to object to
 any distortion or other modification of a work, and any similar right, existing under the law of any country in the world, or under
 any treaty. LICENSEE irrevocably assigns to LICENSOR any and all Moral Rights that LICENSEE may have in any LICENSEE Works to the
 extent assignable, and LICENSEE further hereby forever waives and agrees never to assert or cause to be asserted against LICENSOR,
 its successors or licensees any and all Moral Rights that LICENSEE or its employees or authorized sub-contractors may have in any
 LICENSEE Works, even after expiration or termination of the Term of this Agreement. Without limiting any other terms of this Agreement,
 LICENSEE agrees to cooperate with and assist LICENSOR in exercising and enforcing its rights in the LICENSEE Works, as reasonably
 requested by LICENSOR and at LICENSOR's cost and expense, including executing further documents to confirm the terms of this
 Agreement.

**19.7** All
 LICENSOR Approvals contemplated by this Agreement shall be made within ten (10) working days, or longer period of time as reasonably
 requested by LICENSOR in writing, from the date LICENSOR receives the required submissions from LICENSEE. LICENSOR shall have the
 right to grant or to refuse Approval on artistic, pedagogic, aesthetic or safety grounds, because of the quantity of art already
 exploited by LICENSEE and/or the inconsistency of art exploited or on any other reasonable grounds. Refusal by LICENSOR shall not
 subject LICENSOR to any liability. If no Approval or disapproval is provided to LICENSEE by LICENSOR within said ten (10) day or
 longer period as reasonably requested by LICENSOR, the consent, sample or prototype, as applicable, shall be deemed to be disapproved.
 Any approvals given by Licensor' approval department and artwork studio shall solely be with respect to the style, design,
 appearance, workmanship and/or quality of the submitted item. In no event shall any such approval be deemed to limit or release Licensee's
 obligations set forth in the present Agreement, grant any rights to Licensee which are not expressly set forth in the Agreement,
 nor modify or amend the Agreement.

**19.8** <u>Quality Maintenance.</u> LICENSEE shall maintain the same quality in the Licensed Products, Promotional Products, packaging relating thereto
 and any other materials bearing any of the Licensed Works and Marks produced, as in the production samples approved by LICENSOR.
 In addition, LICENSEE must deliver to LICENSOR, at LICENSEE's sole cost, a reasonable number of supplementary samples, which
 may be reasonably requested by LICENSOR from time to time during the Term, it being understood that these samples may not be sold
 or marketed by LICENSOR. All samples furnished to LICENSOR shall not be subject to the payment of Royalties pursuant to Article 9.1.1.

**19.9** LICENSEE
 shall not sell, market, distribute, or use for any purpose any Licensed Products, Promotional Products, packaging relating thereto
 or any other materials bearing any of the Licensed Works and Marks which are damaged, defective, seconds, or otherwise fail to meet
 LICENSOR's specifications, quality standards, or the trademark or copyright usage and notice requirements set forth in this
 Agreement. If in LICENSOR's opinion any Licensed Products, Promotional Products or packaging relating thereto are damaged,
 defective, seconds, fail to meet the quality standards reflected in the production samples approved by LICENSOR, or fail to meet
 the trademark or copyright usage and notice or hologram requirements of this Agreement, then upon LICENSOR's demand, LICENSEE
 shall immediately cease all further manufacture and distribution of the same until the failure is corrected and LICENSOR approves
 the correction. If requested by LICENSOR, LICENSEE will recall any substandard Licensed Products, Promotional Products or packaging
 relating thereto, to LICENSEE's warehouse or plant at LICENSEE's sole expense. Any Licensed Products, Promotional Products
 or packaging that cannot be corrected so as to not be damaged or defective, to meet the quality standards reflected in the production
 samples approved by LICENSOR, and to meet the trademark or copyright usage and notice or hologram requirements, shall be destroyed
 at LICENSEE's cost and LICENSEE shall provide to LICENSOR a certification signed by an independent third party attesting to
 the destruction of such Licensed Products, Promotional Products or packaging, including information as to the specific types and
 number of units of Licensed Products, Promotional Products and packaging destroyed.

**19.10** <u>Modifications After Acceptance of Production Samples.</u> If during the Term of this Agreement there is to be any change in any Licensed Products,
 Promotional Products, packaging relating thereto, or other materials bearing any of the Licensed Works and Marks after the Approval
 of final production samples, LICENSEE must comply with the provisions of the present Article 19 for approval of the modified version
 before its manufacture, sale, marketing, or distribution.

**19.11** <u>LICENSEE's Production Facilities.</u> LICENSEE agrees to furnish LICENSOR, promptly after the Effective Date and every six (6) months thereafter,
 with the addresses of LICENSEE's then-current production facilities for all the Licensed Products, Promotional Products and
 packaging therefor and the names and addresses of the third persons or entities, if any, which are manufacturing each of the Licensed
 Products, Promotional Products and packaging for LICENSEE. LICENSOR shall have the unlimited right, upon reasonable notice to LICENSEE,
 at its own expense, to inspect during regular business hours, any production facilities where any Licensed Products, Promotional
 Products or packaging material relating thereto are being manufactured to enable LICENSOR to determine whether LICENSEE and its manufacturers,
 if any, are adhering to the requirements of this Agreement relating to the nature and quality of such items and the use of the Licensed
 Works and Marks in connection therewith.

---

| | |
|:---|:---|
| **20** | **<u>RIGHTS IN THE LICENSED MARKS AND WORKS</u>** |

---

**20.1** LICENSEE
 shall make no use of any of the Licensed Works and Marks unless specifically permitted hereunder, nor shall it file any application
 for registration of any patents, copyrights, trademarks, or domain names for any form of the Licensed Works and Marks, including,
 but not limited to, any trademarks or works of authorship similar to any of the Licensed Works and Marks.

**20.2** LICENSEE
 hereby expressly acknowledges that the rights and licenses granted to LICENSEE pursuant to this Agreement are non-exclusive (unless
 otherwise provided in Article 6), and grants a license of a limited character only. All rights, except those explicitly granted under
 the terms of this Agreement, shall be retained exclusively by STUDIO PEYO, S.A. and/or LICENSOR who may exploit the Licensed Works
 and Marks with absolute freedom. Without limiting the foregoing STUDIO PEYO, S.A. and/or LICENSOR reserve unto themselves and their
 designees the right to manufacture, distribute, offer for sale, sell, advertise, promote, display and otherwise exploit products
 similar and/or identical to the Licensed Products and/or Promotional Products for use in connection with the Licensed Works and Marks.
 LICENSEE shall not acquire and shall not claim any title to any of the Licensed Works and Marks by virtue of the rights granted hereunder
 to LICENSEE or through LICENSEE's use of the Licensed Works and Marks, the Parties intending and agreeing that all use of the
 Licensed Works and Marks by LICENSEE shall inure to the benefit of STUDIO PEYO S.A. LICENSEE is expressly prohibited from making
 any use of, or reference to, the Licensed Works and Marks in connection with any on-line activities, except for on-line advertising
 or sales of the Licensed Products or Promotional Products, or except after a specific written agreement from LICENSOR.

**20.3** Without
 limiting Article 6, LICENSOR reserves the right to license third parties to distribute any of the Licensed Products identified in
 Article 3 for promotional or premium purposes including without limitation distribution in the Licensed Territory. LICENSOR is under
 no obligation to report to LICENSEE the existence of negotiations for such promotional or premium licenses.

**20.4** LICENSEE
 acknowledges the validity of and the rights of STUDIO PEYO S.A. and/or LICENSOR in the Licensed Works and Marks and shall not do
 or suffer to be done any act or thing which will prejudice or impair the rights of STUDIO PEYO S.A. and/or LICENSOR in and to any
 of the Licensed Works and Marks. LICENSEE shall not attack the title or rights of STUDIO PEYO S.A. in any of the Licensed Works and
 Marks either during the Term, or after the Term of this Agreement.

**20.5** LICENSEE
 acknowledges and agrees that the SMURF Works and SMURF Trademarks have come to symbolize the substantial goodwill and renown which
 STUDIO PEYO S.A. has developed in connection with its business, that such goodwill belongs exclusively to STUDIO PEYO S.A., and that
 the goodwill in the Licensed Works and Marks as used by LICENSEE inures solely to the benefit of STUDIO PEYO S.A.

**20.6** LICENSEE
 agrees to assist LICENSOR, in the procurement and maintenance of STUDIO PEYO S.A.'s rights and goodwill in the Licensed Works
 and Marks and without limitation, in connection therewith, LICENSEE agrees to execute and deliver to LICENSOR in such form as LICENSOR
 may reasonably request all instruments necessary to effectuate copyright and trademark protection or to record LICENSEE as a registered
 user of any trademarks or to cancel any registered user recordal and if LICENSEE fails to execute such instruments, LICENSEE hereby
 appoints LICENSOR as its attorney-in-fact to do so on LICENSEE's behalf. LICENSOR makes no warranty or representation that
 copyright or trademark protection shall be secured in the Licensed Works and Marks. At least ninety (90) days prior to the promotion,
 display or distribution of any of the Licensed Products and Promotional Products not previously offered by LICENSEE under this Agreement,
 LICENSEE must inquire of LICENSOR whether any documents and/or applications should be filed or recorded in the Licensed Territory.
 LICENSEE shall communicate all information in this regard to LICENSOR in writing.

---

| | |
|:---|:---|
| **21** | **<u>INFRINGEMENT OF LICENSED WORKS AND MARKS</u>** |

---

If LICENSEE learns of any infringement, misappropriation or other violation of any of the Licensed Works and Marks or of LICENSOR's hologram or of the existence, use, or promotion of any mark or design confusingly or substantially similar to any of the SMURF Works and/or SMURF Trademarks, LICENSEE shall immediately notify LICENSOR. LICENSOR reserves the right, at its sole discretion, to institute legal proceedings or other action, or defense, if any shall be taken. LICENSOR shall not be liable to LICENSEE in any way whatsoever for failure to institute legal proceedings, or for failure to defend against legal proceedings. Any legal proceedings instituted pursuant to this Article shall be for the sole benefit of STUDIO PEYO S.A. and/or LICENSOR and all sums recovered in such proceedings, whether by judgment, settlement, or otherwise, shall be retained solely and exclusively by STUDIO PEYO S.A. and/or LICENSOR. LICENSEE may not institute any legal action with respect to any of the Licensed Works and Marks in its own name or otherwise, without the express written consent of LICENSOR, in LICENSOR's sole discretion, and subject to LICENSEE using counsel mutually agreed to by LICENSEE and LICENSOR, LICENSEE paying for all costs and expenses associated with such action, and agreeing not to settle or other compromise such action without LICENSOR's prior written consent (not to be unreasonably withheld or delayed). In any LICENSOR-approved action, LICENSOR agrees to cooperate with LICENSEE as reasonably requested by LICENSEE from time to time, at LICENSOR's sole cost and expense, and LICENSEE may retain all sums recovered in such proceedings whether by judgment, settlement, or otherwise after reimbursing LICENSOR for its costs and expenses incurred in connection therewith.

---

| | |
|:---|:---|
| **22** | **<u>COOPERATION WITH LICENSOR</u>** |

---

LICENSEE agrees to cooperate with LICENSOR in the prosecution of any trademark or copyright application that LICENSOR may desire to file and in the conduct of any litigation or legal proceedings relating to any of the Licensed Works and Marks, including but not limited to being named as a party to any such proceeding, at LICENSOR's cost and expense. Without limiting the foregoing, LICENSEE shall supply to LICENSOR such samples, containers, labels, sales information and similar material and, upon LICENSOR's request, shall procure evidence, give testimony, and cooperate with LICENSOR as may reasonably be required in connection with any such application or litigation, or other legal proceedings.

---

| | |
|:---|:---|
| **23** | **<u>SCOPE OF AGREEMENT</u>** |

---

This Agreement extends only to the Licensed Works and Marks, such to be used on Licensed Products, Promotional Products and packaging therefor and in connection with the marketing thereof through the Licensed Channels of Trade in the Licensed Territory during the Term, subject to the terms of this Agreement. However, from time to time, LICENSOR may add other Licensed Works and Marks to Schedule A and B Part 2 or other Licensed Products or Promotional Products to Article 3, and the Parties agree that by such action this Agreement shall automatically be amended without any further action on the part of either Party to include such additions.

---

| | |
|:---|:---|
| **24** | **<u>COMPLIANCE WITH GOVERNMENT STANDARDS AND CODE OF CONDUCT</u>** |

---

**24.1** LICENSEE
 represents and warrants that the manufacture, packaging, importation, storage, distribution, marketing and sales of Licensed Products,
 Promotional Products, packaging and other materials bearing any of the Licensed Works and Marks undertaken by or on behalf of LICENSEE
 shall meet or exceed all applicable federal, state, and local laws, ordinances, standards, regulations, and guidelines pertaining
 to such products or activities (" <u>Applicable Laws</u> "), including, but not limited to, those pertaining to product
 safety, quality, labeling, propriety, privacy and security (including, but not limited to data security for PII (as defined below
 in Article 24.3.) and cybersecurity more generally). LICENSEE agrees that it will not package, market, advertise, sell, or distribute
 Licensed Products, Promotional Product, or cause or permit any Licensed Products, Promotional Products to be packaged, marketed,
 advertised, sold, or distributed, in violation of any such federal, state, or local law, ordinance, standard, regulation, or guideline,
 and that it shall comply with the Code of Conduct attached hereto as Schedule C.

**24.2** LICENSEE
 covenants that its collection, assembly, storage and use of any and all data collected or generated in connection with any of the
 Licensed Products, Promotional Products or other use of the Licensed Works and Marks, including any data collected in connection
 with the promotion, distribution, sale or other offering of Licensed Products and Promotional Products or LICENSEE Sites (as defined
 below), (collectively " <u>Data</u> ") shall comply with all Applicable Laws. LICENSEE agrees to maintain and secure all
 Data, and networks and systems through which any Data can be accessed or on which any Data is stored, in accordance with Applicable
 Laws and then-current industry-standard privacy and security practices, including, but not limited to, the Payment Card Industry
 Data Security Standard (" <u>PCI-DSS</u> ") as applicable to payment card information. LICENSEE further agrees that its
 privacy and security policies and practices with regard to any and all websites or mobile applications owned or operated by or on
 behalf of LICENSEE and used in connection with the promotion, distribution, sale or other offering of Licensed Products or Promotional
 Products or other use of any Licensed Works and Marks (" <u>LICENSEE Sites</u> ") shall comply with Applicable Laws, then-current
 industry standard privacy and security practices, including, but not limited to PCI-DSS, and any other requirements as reasonably
 required by LICENSOR from time to time.

**24.3** LICENSEE
 acknowledges that it may receive or have access to personally identifiable information of prospective or actual purchasers and users
 of Licensed Products or Promotional Products or visitors of LICENSEE Sites, which for purposes of this Agreement only, means information
 relating to a (directly or indirectly) identified or identifiable person, including but not limited to, names, contact information
 like phone number, physical address and email address, credit card and financial information (if any), social security numbers, and
 online identifiers that could potentially be used to contact, serve an advertisement to, or track a user online such as Internet
 Protocol (" <u>IP</u> ") address, cookie ID, or device identifiers (collectively " <u>PII</u> "). Without limiting
 any other obligations of LICENSEE under this Agreement, LICENSEE shall with respect to PII that is in its possession or control:

24.3.1 maintain
 the privacy and security of all such PII consistent with this Agreement, then-current industry standard privacy and security practices,
 and all Applicable Laws relating to data protection and PII;

24.3.2 apply
 appropriate physical, technical and organizational security measures to protect PII against destruction, loss, alteration, unauthorized
 disclosure and/or access;

24.3.3 not
 co-mingle any PII with the any information unrelated to the Licensed Products and Promotional Products except consistent with, and
 as permitted by, LICENSEE's own published privacy polic(ies) and as permitted by Applicable Laws;

24.3.4 require
 any subcontractors that receive or have access to PII to agree to maintain adequate policies, procedures and controls to ensure that
 such subcontractor will maintain and protect PII in the same manner LICENSEE is required to maintain and protect PII under this Agreement;
 and

24.3.5 in
 the event of any actual or attempted unauthorized access to the systems or networks of LICENSEE, or of the possession, use, knowledge,
 or disclosure of any PII resulting from such access, then LICENSEE shall:

24.3.5.1 promptly
 use reasonable efforts in investigating the occurrence of any such unauthorized possession, access, use knowledge, or disclosure;

24.3.5.2 promptly
 use commercially reasonable efforts to prevent a recurrence of any such unauthorized access, possession, use, knowledge, or disclosure
 of PII;

24.3.5.3 promptly
 notify affected individuals consistent with relevant Applicable Laws (relating to data breach notification, if implicated); except
 that for the avoidance of doubt, consistent with Section 6.2 of the Agreement, in no event shall LICENSEE make any such notice or
 public statement relating to any such unauthorized access, possession, use, knowledge or disclosure of PII that includes or mentions
 any of the Licensed Works and Marks, without the prior, written consent of Licensor; and

24.3.5.4 any
 costs that are incurred in connection with responding to or managing a breach of the security of PII shall be the sole responsibility
 of LICENSEE.

---

| | |
|:---|:---|
| **25** | **<u>IDENTIFICATION</u>** |

---

**25.1** LICENSEE
 shall affix its own name or identifying mark to all Licensed Products and Promotional Products, as well as to all packaging, advertising
 or other marketing materials relating thereto; however, LICENSEE shall not do so in such a manner so as to disguise or obscure any
 of the Licensed Works and Marks and subject to the terms of this Agreement, including but not limited to Article 18.9.

**25.2** LICENSEE
 shall affix to each Licensed Product, Promotional Product, and packaging material relating thereto, one or more of the Licensed Marks
 in the manner, place and format as specified in Article 12 and as otherwise requested by LICENSOR in writing; subject to the terms
 of this Agreement, including but not limited to the limitations in Article 18.8.

**25.3** LICENSOR
 may at any time request LICENSEE to affix a hologram, at LICENSEE's cost, on the Licensed Products, Licensed Promotional Product
 or packaging therefore, to be sourced from the supplier specified by LICENSOR. This supplier will enter into an independent relationship
 with LICENSEE. However, LICENSOR is entitled to validate any order of holograms for more than 1 million units. LICENSEE shall follow
 the approval procedure set forth in Article 19 with regard to the placing of the hologram on the Licensed Products.

---

| | |
|:---|:---|
| **26** | **<u>LICENSED WORKS AND MARKS OWNERSHIP AND NOTICES</u>** |

---

**26.1** LICENSEE's
 use of any of the Licensed Marks shall, depending upon the directions provided by LICENSOR, in every instance be combined with one
 of the following notices: (i) "Reg. U.S. Pat. & TM. Off."; (ii) "®"; (iii) "Registered in U.S.
 Patent and Trademark Office"; (iv) "Trademark of STUDIO PEYO S.A."; (v) "™"; or (vi) such other
 similar language as shall have LICENSOR's prior Approval. LICENSEE shall use one of the forms of notice in 14.1(i), (ii), (iii),
 or (vi) in association with a mark which is registered, as indicated in Schedule B or in a written notice from LICENSOR, and one
 of the forms of notice in 14.1 (iv), (v), or (vi) in association with marks which are not registered. LICENSEE shall not use any
 language or display the Licensed Marks in such a way as to create the impression that the Licensed Marks belong to LICENSEE. LICENSEE
 waives all claims to any rights in LICENSEE's use, advertising, or display of the Licensed Marks beyond the limited permission
 to use the Licensed Marks granted in this Agreement.

**26.2** All
 SMURF Works are owned by STUDIO PEYO S.A. and all Licensed Products, Promotional Products, their packaging or documents related thereto
 bearing any of the Licensed Works shall bear the copyright notice, placement and form as set forth in Article 12 or as otherwise
 requested by LICENSOR in writing.

---

| | |
|:---|:---|
| **27** | **<u>NOTICE OF FIRST USE</u>** |

---

Upon LICENSOR's request, LICENSEE shall provide LICENSOR with a duplicate original of each of the first five (5) invoices for shipments in interstate commerce of each of the Licensed Products and the Promotional Products bearing each of the Licensed Marks and Works.

---

| | |
|:---|:---|
| **28** | **<u>MANUFACTURER'S AGREEMENT</u>** |

---

**28.1** If
 any of the Licensed Products, Promotional Products or packaging therefore are to be manufactured for LICENSEE, LICENSEE shall, before
 authorizing such manufacture and before placing any orders with the proposed manufacturer, obtain LICENSOR's approval in writing
 of any such manufacturer and comply with the remaining terms of this Article 28.

**28.2** Any
 approved person or entity to manufacture any of the Licensed Products, Promotional Products or packaging therefore ("Approved
 Manufacturer") shall be required to perform pursuant to a written agreement between LICENSEE and the Approved Manufacturer
 ("Manufacturer's Agreement") subject to the following terms and conditions of this Agreement, which shall apply
 to the approved subcontractor to the same extent as apply to LICENSEE under this Agreement, including but not limited to Sections
 18.4-18.7, 18.9., 20, 21, 22, 24, 25.3, 35, and 38, and LICENSOR's Code of Conduct attached hereto as Schedule C. Before entering
 into any such Manufacturer's Agreement, LICENSEE shall provide a copy of the proposed Manufacturer's Agreement to LICENSOR
 for approval and LICENSEE shall use commercially reasonable efforts to make any modifications thereto as reasonably requested by
 LICENSOR. LICENSEE shall be entitled to disapprove any Manufacturer's Agreement should it not be in compliance with the terms
 set forth above. After approval by LICENSOR and execution thereof by LICENSEE, LICENSEE shall provide LICENSOR with a copy of such
 executed Manufacturer's Agreement.

**28.3** Without
 limiting the foregoing, LICENSEE shall use best efforts to ensure that all Approved Manufacturers perform and comply with all applicable
 terms and conditions of this Agreement; provided, however, even if LICENSEE uses best efforts to cause Approved Manufacturers to
 perform and comply with all applicable terms of this Agreement included in the Manufacturer's Agreement, such breach shall
 be deemed a breach of LICENSEE. Without limiting the foregoing, LICENSEE shall be sole liable for any damage created to any party
 that may result from the use of the holograms on LICENSEE's Licensed Products, Promotional Product or packaging therefore.
 Without limiting the foregoing, LICENSEE shall monitor each Approved Manufacturer's performance of its rights and obligations
 under this Agreement, use best efforts to ensure that the Approved Manufacturers manufacture only the amounts of Licensed Products,
 Promotional Products and packaging therefore as requested by LICENSEE, affixes holograms only on aforesaid products and packaging
 and deliver them to persons or entities only in accordance with the LICENSEE's instructions. LICENSEE shall promptly report
 to LICENSOR if any Approved Manufacturer is manufacturing any Licensed Products, Promotional Products and/or packaging therefore
 in excess of amounts requested by LICENSEE, if the Approved Manufacturer uses holograms in breach of the foregoing instructions,
 and if the Approved Manufacturer is delivering any Licensed Products, Promotional Products or packaging therefore to any person or
 entity other than as instructed by the LICENSEE or if any Subcontractor is otherwise not in compliance with the terms of the Manufacturer's
 Agreement.

**28.4** Notwithstanding
 the foregoing, LICENSOR reserves the right to withdraw its approval of any Approved Manufacturer upon thirty (30) days' notice
 to LICENSEE, and at the end of such thirty (30) day period, LICENSEE may no longer use such Approved Manufacturer to manufacture
 or otherwise perform any rights or obligations of LICENSEE under this Agreement and the applicable Manufacturer's Agreement
 shall have been terminated. LICENSOR will give reasons for the withdrawal of its approval of such Approved Manufacturer and such
 reasons must not be unreasonable. Failure of LICENSEE to discontinue use of any manufacturer that is not approved, or no longer approved,
 by LICENSOR within such thirty (30) day period, will be considered a material breach of this Agreement and LICENSOR may immediately
 terminate the Agreement upon notice to LICENSEE.

**28.5** LICENSEE
 shall be liable for any unauthorized use of holograms, voluntarily or by neglect, this use being known or unbeknown to the LICENSEE.
 Such use shall be considered as a breach of LICENSEE's material obligation and shall entitle LICENSOR to terminate the Agreement
 immediately. In this respect LICENSEE shall ensure that each Approved Manufacturer shall strictly comply with the procedure communicated
 to LICENSEE by LICENSOR with regard to holograms and LICENSEE shall assist each Approved Manufacturer in its obligation to affix
 the holograms pursuant to said procedure.

---

| | |
|:---|:---|
| **29** | **<u>TERMINATION</u>** |

---

**29.1** A
 Party which wishes to terminate this Agreement for a breach thereof by the other Party shall give written notice to the breaching
 Party specifying the breach. The breaching Party shall have twenty (20) days from receipt of the notice to cure the breach, except
 that a breach arising from failure to pay a Royalty or other monies must be cured within ten (10) days. If the breach is not cured
 within such twenty (20) day or, as applicable, ten (10) day period, then the Agreement shall automatically terminate unless the non-breaching
 Party specifies otherwise in writing.

**29.2** LICENSOR
 may at any time give notice of termination effective immediately if LICENSEE shall be unable to pay any obligations to LICENSOR when
 due, shall make any assignment or transfer of business capital for the benefit of creditors, or shall file a voluntary petition in
 bankruptcy, shall be adjudicated bankrupt or insolvent, shall have any receiver or trustee in bankruptcy or insolvency appointed
 for its business or property.

**29.3** LICENSOR
 may at any time give notice of termination effective immediately if (a) LICENSEE takes any action that would damage or reflect adversely
 on STUDIO PEYO S.A. and/or LICENSOR and/or any of the SMURF Works and SMURF Trademarks; or (b) when LICENSEE has repeatedly failed
 (i.e. more than twice) to perform or meet any term, condition, or obligation of this Agreement, or make payment as provided for in
 this Agreement, whether or not such failures are corrected, upon notice thereof.

**29.4** LICENSOR
 may for any reason demand adequate written assurance from LICENSEE of LICENSEE's ability to perform any and all obligations
 required under the terms of this Agreement. After five (5) days from demand and until LICENSOR receives such assurance in writing,
 it may suspend its performance of this Agreement. If LICENSOR does not receive such written assurance within five (5) days after
 the date of its request therefor or within such other shorter period of time as LICENSOR may reasonably designate under the circumstances,
 the failure by LICENSEE to furnish such assurance will constitute a material breach which entitles LICENSOR to terminate this Agreement
 immediately.

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| | |
|:---|:---|
| **30** | **<u>POST-TERMINATION AND EXPIRATION RIGHTS AND OBLIGATIONS</u>** |

---

**30.1** Upon
 the expiration or termination of this Agreement, LICENSEE shall (a) immediately cease any and all use, manufacture, sales, marketing,
 and distribution of the Licensed Products, Promotional Products, and packaging relating thereto, and all other materials bearing
 any of the Licensed Works and Marks, except as otherwise set forth herein, (b) shall provide each Approved Manufacturer with notice
 of the termination or expiration of this Agreement and the applicable Manufacturer's Agreement within ten (10) days of either
 (i) LICENSEE's receipt of a notice of termination from LICENSOR, (ii) LICENSEE's giving of a notice of termination to
 LICENSOR or (iii) expiration of the Agreement, (c) provide LICENSOR with copies of all such notices to each Approved Manufacturer
 and proof of delivery thereof to each Approved Manufacturer and (d) in case LICENSEE produced moulds for the manufacturing of the
 Licensed Products or Promotional Products, LICENSEE will proceed within 3 months following the expiration or termination of this
 Agreement, with the destruction of the mould-inserts that have served for the realization of the Licensed Product or Promotional
 Product. By destruction of the mould-insert is meant that the mould-inserts (cavities) are rendered unusable. The destruction shall
 be the subject of a detailed report drawn up by a writ server and bailiff, in duplicate, one of which must be delivered to LICENSOR
 free of charge. At least 2 months before proceeding with the destruction LICENSEE will inform LICENSOR of the planned destruction.
 LICENSOR than has an option, to be exercised within the month of the information of destruction, to buy the moulds and the mould-inserts
 at a price to be agreed on between the parties. Upon LICENSOR's request, LICENSEE shall, at all times including upon the expiration
 or termination of this Agreement, transmit detailed information concerning the moulds created in the application of the Agreement
 including but not limited to the reference of the Licensed Product corresponding to each mould, the number of Licensed Products manufactured
 with each mould, more particularly in case of limited editions or collectors, identification of the owner of the moulds, and localization
 of such moulds. LICENSOR shall be given access to these moulds upon request.

**30.2** <u>Expiration</u>.
 Upon expiration of the Agreement (but not termination of the Agreement), the following terms shall apply:

**30.2.1** If
 LICENSEE has remaining inventory of the Licensed Products, Promotional Products and packaging related thereto already in stock at
 expiration or in the process of being manufactured or delivered to LICENSEE, LICENSEE may continue to sell and distribute the same
 for the sell off period identified in Article 8.1. ("Sell Off Period"), but in no event shall LICENSEE be permitted to
 sell or distribute Licensed Products, Promotional Products and/or any packaging therefore which, in LICENSOR's opinion, may
 (a) damage the reputation or commercial value of any of the Licensed Works and Marks (b) give rise to liability to LICENSOR, or (c)
 do not comply with the terms of this Agreement. In addition, LICENSEE's sales during any Sell Off Period shall be limited to
 fifty percent of the monthly average of the number of Licensed Products and Promotional Products, as applicable, sold during the
 previous six (6) month period, subject to the terms and conditions herein, including, without limitation, Articles 16, 17, 18, 19,
 20, 24, 25.3., 26. In no event shall any Licensed Products, Promotional Products, packaging therefore or holograms be distributed
 through any discount or liquidation outlets without LICENSOR's prior written consent.

30.2.2 After
 the expiration of the Sell Off Period, LICENSEE shall cease all activities pursuant to the Agreement.

30.2.3 Within
 twenty (20) days of expiration of the Sell Off Period, LICENSEE shall proceed with the destruction of all inventory of the Licensed
 Products, Promotional Products and packaging therefore, and any other materials bearing any of the Licensed Works and Marks, which
 may still be in its possession to the exception of the remaining stock of holograms set forth in 30.2.5.; provided, however, LICENSEE
 may conserve any remaining stock or a part thereof for internal use only with the express prior written consent of LICENSOR. A certification
 of destruction signed by an independent third party shall be supplied to LICENSOR at no charge to LICENSOR within five (5) days of
 destruction specifying the types and units of Licensed Products, Promotional Products, packaging and other materials destroyed.

30.2.4 Immediately
 after expiration of this Agreement, all Confidential Information of LICENSOR (including all whole and partial copies thereof and
 any materials including any such Confidential Information) and materials delivered to LICENSEE by LICENSOR hereunder shall be returned
 immediately to LICENSOR at LICENSEE's expense.

30.2.5 Within
 thirty (30) days of expiration of the Sell Off Period, LICENSEE shall submit all outstanding Statements of Account and sums due to
 LICENSOR, LICENSEE shall return to LICENSOR at its own costs the remaining stock of holograms together with a report mentioning the
 number of holograms ordered pursuant to this Agreement, the number of holograms affixed on the Licensed Product, Promotional Products
 and packaging therefore sold or otherwise distributed pursuant to this Agreement, the number of holograms affixed to the materials
 destructed in application of article 30.2.3. and the number of holograms left in stock after expiration of the Sell Off Period

**30.3** <u>Termination</u>.
 Upon termination of the Agreement (but not expiration of this Agreement), the following terms shall apply:

30.3.1 LICENSEE
 shall cease all activities pursuant to the Agreement.

30.3.2 All
 Confidential Information of LICENSOR (including all whole and partial copies thereof and any materials including any such Confidential
 Information) and materials delivered to LICENSEE by LICENSOR hereunder shall be returned immediately to LICENSOR at LICENSEE's
 expense, within thirty (30) days of the termination of the Agreement, all Statements of Account shall be submitted to LICENSOR by
 LICENSEE and LICENSEE shall pay all sums due to LICENSOR under this Agreement, within (60) days of the termination of the Agreement
 a report mentioning the number of holograms ordered pursuant to this Agreement, the number of holograms affixed on the Licensed Product,
 Promotional Products and packaging therefore sold or otherwise distributed pursuant to this Agreement, the number of holograms affixed
 to the materials destructed in application of article 30.3.3. and the number of holograms left in stock after termination of the
 Agreement shall be submitted to LICENSOR by LICENSEE and LICENSEE shall return the remaining sock of holograms to LICENSOR at its
 own costs.

30.3.3 Within
 thirty (30) days of the termination of the Agreement, LICENSEE shall proceed with the destruction of all inventory of the Licensed
 Products, Promotional Products and packaging and any other materials bearing any of the Licensed Works and Marks, which may still
 be in its possession to the exception of the remaining stock of holograms set forth in 30.3.2; provided, however, LICENSEE may conserve
 any remaining stock for internal use only with the express prior written consent of LICENSOR. A certification of destruction prepared
 and signed by an independent third party shall be supplied to LICENSOR at no charge to LICENSOR within five (5) days of destruction
 specifying the types and units of Licensed Products, Promotional Products, packaging and other materials destroyed.

30.3.4 LICENSEE
 may obtain only by written consent of LICENSOR the right to carry out the manufacture, sales, exploitation or any other operations
 related to the Licensed Products, Promotional Products or other use of any of the Licensed Works and Marks after the termination
 of the Agreement.

---

| | |
|:---|:---|
| **31** | **<u>INDEMNITY</u>** |

---

**31.1** LICENSEE
 acknowledges that it will have no claims against LICENSOR or any of LICENSOR's representatives, employees, officers, directors,
 customers or other licensees for any damage to property or injury to persons arising out of the operation of LICENSEE's business
 by it or an Authorized Manufacturer.

**31.2** LICENSEE
 agrees to indemnify, and hold harmless, LICENSOR, SONY, Columbia Pictures Industries, Inc., Sony Pictures Consumer Products Inc.,
 STUDIO PEYO S.A., LAFIG S.A. (Geneva – Switzerland), IMPS S.A. (Genval – Belgium) and the heirs of Peyo, along with the
 directors, officers, successors, assigns and heirs of the foregoing as applicable, from and against all demands, claims, injuries,
 losses, damages, actions, suits, causes of action, proceedings, judgments, liabilities and expenses, including attorneys' fees,
 court costs and other legal expenses, arising out of or relating to (a) any of the Licensed Products, Promotional Products, packaging
 therefore and other materials bearing any of the Licensed Works and Marks manufactured, distributed, promoted, or sold by LICENSEE
 or its Authorized Manufacturers; (b) use of any of the Licensed Works and Marks and holograms by LICENSEE or its Authorized Manufacturers;
 (c) any breach by LICENSEE of any provision or any warranty provided by LICENSEE in this Agreement or any breach by an Authorized
 Manufacturer of any provision or any warranty provided by an Authorized Manufacturer in the applicable Manufacturer's Agreement;
 or (d) damage to property or injury to persons arising out of the operation of LICENSEE's business by it or an Authorized Manufacturer.
 LICENSOR shall promptly notify LICENSEE of any such claim or demand within ten (10) working days of receipt of such claim or demand;
 provided, however, any delay in providing notice shall not relieve LICENSEE of its indemnification obligation except to the extent
 the LICENSEE is prejudiced by such delay. No approval by LICENSOR of any action by LICENSEE shall affect any right of LICENSOR to
 indemnification hereunder.

**31.3** LICENSOR
 warrants that it has the right and power to grant the licenses hereunder, and agrees to indemnify and hold harmless from and against
 any and all demands, claims, injuries, losses, damages, actions, suits, causes of action, proceedings, judgments, liabilities and
 expenses, court costs and other legal expenses, against LICENSEE (other than those for which LICENSEE has an obligation to indemnify
 LICENSOR for as set forth in Article 19.6. and 31.2. above) arising only from third party claims that the use solely of any of the
 Licensed Works and Marks, as expressly authorized by the terms of this Agreement, infringes or misappropriates the rights of such
 third party, provided that LICENSEE gives notice to the LICENSOR within ten (10) working days after receipt of each such claim or
 demand (provided, however, any delay in providing notice shall not relieve LICENSOR of its indemnification obligation except to the
 extent the LICENSOR is prejudiced by such delay), that the LICENSOR shall have the right to undertake and conduct the sole defense
 of any such claim or demand (as it determines in its discretion); and that LICENSEE shall not settle any matter without LICENSOR's
 prior written consent. LICENSOR's indemnity does not cover any unapproved modifications or changes made to any of the Licensed
 Works and Marks, Licensed Products, Promotional Products and/or packaging therefore by LICENSEE; any unauthorized uses of any of
 the Licensed Works and Marks, Licensed Products, Promotional Products and/or packaging therefore; or any conduct for which LICENSEE
 is required to indemnify LICENSOR.

**31.4** EXCEPT
 AS OTHERWISE EXPRESSLY PROVIDED ABOVE, LICENSOR MAKES NO OTHER WARRANTIES, REPRESENTATIONS, OR GUARANTEES, WHETHER EXPRESS OR IMPLIED
 AND DISCLAIMS ALL OTHER WARRANTIES, REPRESENTATIONS OR GUARANTEES, INCLUDING BUT NOT LIMITED TO IMPLIED WARRANTIES OF FITNESS FOR
 A PARTICULAR PURPOSE, MERCHANTABILITY, AND NON-INFRINGEMENT, RELATING TO ANY OF THE LICENSED PRODUCTS, PROMOTIONAL PRODUCTS, LICENSED
 MARKS AND WORKS, LICENSOR'S CONFIDENTIAL INFORMATION, AND OTHERWISE RELATING TO THIS AGREEMENT.

---

| | |
|:---|:---|
| **32** | **<u>NOTICES</u>** |

---

Notices provided for herein shall be considered effectively given when sent by Federal Express, United Parcel Service, or DHL to the Parties at their respective addresses set forth in Article 11.1. or such other address as they may designate in writing from time to time, and deemed received as of the date of delivery or when delivery is refused.

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| | |
|:---|:---|
| **33** | **<u>ASSIGNMENT, TRANSFER, SUBLICENSE, AND DELEGATION</u>** |

---

**33.1** The
 rights granted hereunder are personal to LICENSEE, and LICENSEE shall not assign, transfer or sublicense any of its rights under
 this Agreement or delegate any of its obligations under this Agreement (whether voluntarily, by operation of law, change in control,
 or otherwise) without LICENSOR's prior written approval.

**33.2** A
 change in the majority ownership or a material change in the management of LICENSEE shall constitute an assignment of rights under
 this Section requiring LICENSOR's prior written approval. A "material change in management" shall mean a change
 in the ownership of the company and/or the employment of the person indicated Article 11.2. During the Term of this Agreement: (a)
 LICENSEE shall notify LICENSOR of any changes in majority ownership or changes in management; (b) upon such notification, LICENSOR
 may require assurances of LICENSEE's experience, standing in the marketplace, or financial ability to perform under the Agreement
 and (c) regardless of assurances given, LICENSOR may, upon receiving the notification specified in clause (b), terminate the Agreement
 if LICENSOR is not satisfied with LICENSEE's financial ability, standing in the market place, or other factor which may negatively
 affect LICENSEE'S ability to perform under the Agreement. Failure to provide notice required by this Section shall be considered
 a material breach and grounds for LICENSOR to terminate the Agreement.

**33.3** Nothing
 in this Agreement shall prevent LICENSOR from transferring or assigning any of its rights hereunder, and LICENSEE agrees that in
 such instance, any such transferee or assignee may be substituted for LICENSOR and thereafter succeed to the rights and obligations
 of LICENSOR under the terms of this Agreement, provided, however, that LICENSEE'S substantive rights and obligations shall
 not be materially affected thereby.

**33.4** All
 rights and obligations of LICENSOR shall immediately transfer to STUDIO PEYO S.A. upon termination for any reason of the exclusive
 ownership of exploitation rights by LICENSOR referenced in Recital III. Written Notice by STUDIO PEYO S.A. sent to LICENSEE that
 STUDIO PEYO S.A. has succeeded to the rights and obligations of LICENSOR shall be irrefutable evidence of the termination of the
 exclusive ownership of exploitation rights referenced in Recital III. Said transfer shall not otherwise affect the rights and obligations
 of the Parties to this Agreement.

**33.5** LICENSOR
 shall have the right to designate a third party as its agent to exercise any of LICENSOR'S rights or to perform any of LICENSOR'S
 obligations under this Agreement.

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|:---|:---|
| **34** | **<u>COSTS AND EXPENSES</u>** |

---

Unless otherwise expressly specified herein, each Party shall bear and pay all of its respective costs and expenses arising in connection with its performance under this Agreement.

---

| | |
|:---|:---|
| **35** | **<u>INDEPENDENT CONTRACTOR</u>** |

---

LICENSEE is an independent contractor and not an agent, partner, joint venturer, affiliate or employee of LICENSOR. No fiduciary relationship exists between the Parties. Neither Party shall be liable for any debts, accounts, obligations, or other liabilities of the other Party, its agents, or employees. LICENSEE shall have no authority to control, obligate or bind LICENSOR in any manner. LICENSOR has no proprietary interest in LICENSEE and has no interest in the business of LICENSEE, except to the extent set forth in this Agreement. LICENSEE cannot exercise, over any of the SMURF Trademarks and /or SMURF Works, any right, title or claim, except to the extent set forth in this agreement, in its capacity as LICENSEE.

---

| | |
|:---|:---|
| **36** | **<u>SEVERABILITY</u>** |

---

If any provision of this Agreement shall be determined to be illegal or unenforceable by any court of law or any competent government or other authority, the remaining provisions shall be severable and enforceable in accordance with their terms so long as this Agreement without such terms or provisions does not fail of its essential purpose or purposes. The Parties will negotiate in good faith to replace any such illegal or unenforceable provision or provisions with suitable substitute provisions which maintain the economic purposes and intentions of this Agreement.

---

| | |
|:---|:---|
| **37** | **<u>SURVIVAL</u>** |

---

Without limitation, LICENSEE's obligations and agreements under Articles 16, 17, 20.2., 20.4., 30, 31, 32, 34, 35, 36, 37, 38, 39, 40 shall survive the termination or expiration of this Agreement.

---

| | |
|:---|:---|
| **38** | **<u>TREATMENT OF CONFIDENTIAL INFORMATION</u>** |

---

**38.1** Each
 Party hereto shall maintain the Confidential Information of the other Party in confidence,

and shall not permit access to, disclose, divulge or otherwise communicate such Confidential Information to others, or use it for any purpose, except pursuant to, and in order to perform, the terms of this Agreement, and hereby agrees to exercise reasonable precautions to prevent and restrain the unauthorized access, disclosure and use (except to the extent required to use or distribute Licensed Products, Promotional Products and packaging therefore) of such Confidential Information by any of its directors, officers, employees, consultants, subcontractors, sub licensees, or agents.

**38.2** Notwithstanding
 the foregoing, a Party may disclose Confidential Information of the other Party, without the other Party's prior written consent,
 (i) to its current and future officers, directors, and employees on an as needed basis so long as such officers, directors, and employees
 are subject to written obligations requiring that they maintain such information as confidential and to not further disclose such
 information; (ii) to legal, financial, accounting or other similar advisors for the limited purpose of providing legal, financial,
 accounting or other similar services to the disclosing Party so long as such advisors are subject to written obligations requiring
 that they maintain such information as confidential and to not further disclose such information; or (iii) as required by law, regulation
 or a court; provided, however, if a Party is required by law, regulation or a court to disclose any Confidential Information of the
 other Party, the required disclosing Party shall promptly provide the other Party with notice of the required disclosure and reasonably
 assist the other Party in its attempts to obtain confidential treatment of such information.

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| | |
|:---|:---|
| **39** | **<u>DISPUTE RESOLUTION DISPUTE RESOLUTION</u>** |

---

**39.1** <u>Informal Dispute Resolution</u>. The Parties shall attempt to settle any dispute or issue between them relating to this Agreement amicably
 and agree to exercise their best efforts to resolve the dispute or issue prior to initiating any formal proceeding in accordance
 with the terms and conditions of this Agreement. Either Party may give the other Party written notice of the existence of a dispute
 or issue, including a description of the dispute or issues and a proposed resolution thereof. Designated representatives of both
 Parties with the closest responsibility for implementing this Agreement shall attempt to resolve the dispute or issue within fifteen
 (15) working days after receipt of such notice. If those designated representatives cannot resolve the dispute or issue, the Parties
 shall meet, as mutually agreed between the Parties (and such meeting may be in person, via telephone or other means), and describe
 the dispute or issue, and their respective proposals for resolution to their respective Chief Operating Officer or another designated
 person with comparable authority who shall act in good faith to resolve the issue or dispute. If the dispute or issue is not resolved
 within ten (10) working days after such meeting, either Party may institute arbitration pursuant to Section 27.2 by delivering a
 notice of arbitration to the other party (" <u>Notice of Arbitration</u> "). Nothing in this clause (or Articles 39.2.
 and 39.3.) shall be construed to extend any period within which a Party is required to cure any breach (including, without limitation,
 any such period set forth in Article 29), to prevent any Party from terminating this Agreement in the event such a breach is not
 timely cured, or to preclude any Party from commencing arbitration if said negotiations do not reach a resolution within thirty (30)
 days after written notice of the dispute or issue.

**39.2** <u>Arbitration</u>.
 In the event the Parties cannot reach an amicable settlement through the informal dispute resolution process set forth in Article
 39.1., the Parties agree that any dispute or issue arising out of or relating to this Agreement, or the breach, termination or invalidity
 thereof, shall be finally settled by binding arbitration. The Parties elect to have the any and all disputes be governed in accordance
 with the International Arbitration Rules of the American Arbitration Association. This agreement to arbitrate shall be binding upon
 the Parties, their principals, successors, assigns and Affiliates. The dispute shall be decided by a tribunal of three (3) neutral
 arbitrators. Each Party shall appoint an arbitrator, obtain its appointee's acceptance of such appointment, and deliver written
 notification of such appointment and acceptance to the other Party within thirty (30) days after delivery of the Notice of Arbitration.
 The two appointed arbitrators shall jointly appoint the third arbitrator, obtain the appointee's acceptance of such appointment
 and notify the Parties in writing of such appointment and acceptance within thirty (30) days after their appointment and acceptance.
 The third arbitrator shall serve as the chairperson of the tribunal. The arbitration award shall be based on and accompanied by a
 written opinion containing findings of fact and conclusions of law. The governing law provision of this Agreement shall apply. After
 the arbitrators are selected, they shall have sole jurisdiction to hear such applications, except that the Parties agree that any
 measures ordered by the arbitrator may be immediately and specifically enforced by a court otherwise having jurisdiction over the
 Parties. The Parties hereto agree that the arbitration award shall be final and binding upon the Parties hereto, and that judgment
 on the arbitration award may be entered in any court, including as set forth in Article 40.3. or any court in any country worldwide
 having jurisdiction thereof in order to enforce the arbitration award. Service of process in any action arising out of or relating
 to this Agreement may be served on any Party to this Agreement anywhere in the world by delivery in person against receipt or by
 registered or certified mail, return receipt requested, and each Party waives any right to challenge such service. THE ARBITRATION
 TRIBUNAL IS SPECIFICALLY DIVESTED OF ANY POWER TO AWARD ANY DAMAGES IN THE NATURE OF PUNITIVE, EXEMPLARY, OR STATUTORY DAMAGES IN
 EXCESS OF COMPENSATORY DAMAGES, OR ANY FORM OF DAMAGES IN EXCESS OF COMPENSATORY DAMAGES. The place of arbitration shall be Los Angeles,
 California, United States of America. The arbitration shall be conducted in the English language. All submissions shall be made in
 English or with a certified English translation. Witnesses may provide testimony in a language other than English, provided that
 a simultaneous English translation is provided. No Party may institute litigation concerning a dispute or issue relating to this
 Agreement until the informal dispute resolution process and arbitration has been completed unless, and to the extent that, doing
 so is necessary to avoid irreparable harm to the initiating Party. To the fullest extent permitted by law, all dispute resolution
 proceedings shall be maintained in confidence by the Parties.

**39.3** <u>Payment Disputes</u>. The procedures set forth in Articles 39.1. and 39.2. shall not apply to any dispute or issue relating to the failure
 to timely pay a Royalty or other monies (a " <u>Payment Dispute</u> "). Instead, in the event of a Payment Dispute, either
 Party may give the other Party written notice of the existence of such Payment Dispute. The Parties shall attempt to settle such
 Payment Dispute amicably and agree to exercise their commercially reasonable efforts to resolve the Payment Dispute. Designated representatives
 of both Parties shall attempt to resolve the Payment Dispute within ten (10) days after receipt of such notice. If those designated
 representatives cannot resolve the Payment Dispute within such period, then, without limiting any other rights or remedies, Licensor
 shall be permitted to take such additional actions as it deems necessary to resolve such Payment Dispute and collect the unpaid Royalty
 or other monies, including, without limitation, terminating this Agreement and/or providing authority to one or more third parties
 (including, but not limited to, a debt collection agency) to collect such unpaid Royalty or other monies and to initiate a formal
 proceeding in connection therewith.

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| | |
|:---|:---|
| **40** | **<u>MISCELLANEOUS</u>** |

---

**40.1** <u>Captions.</u> The captions for each Section have been inserted for the sake of convenience and shall not be deemed to be binding upon the Parties
 for the purpose of interpretation of this Agreement.

**40.2** <u>Integration and Amendment of Agreement.</u> This Agreement forms the entire agreement between the Parties with respect to the subject matter
 of this Agreement, supersedes any and all prior and contemporaneous negotiations, understandings, or agreements in regard to such
 subject matter and is intended as a final expression of their Agreement. With the exception of the addition of new SMURF Trademarks,
 SMURF Works, Licensed Products or Promotional Products pursuant to Article 23, this Agreement may be amended, novated or modified
 only by written instrument expressly referring to this Agreement, setting forth such amendment and signed by LICENSOR and LICENSEE.

**40.3** <u>Exclusive Jurisdiction.</u> Subject to Article 39, the Parties agree that any legal action or proceeding with respect to this Agreement shall
 be exclusively brought in the United States District Court for the Eastern District of California; provided, however, if such court
 does not have jurisdiction in a particular matter, then such matter shall be exclusively brought in the California Superior Court
 located in Los Angeles California. LICENSEE consents to the personal jurisdiction of such courts, agrees to accept service of process
 by mail and hereby waives any jurisdictional or venue defenses otherwise available to it.

**40.4** <u>Remedies</u>.
 LICENSEE acknowledges that any breach or threatened breach of any of LICENSEE's covenants in this Agreement relating to the
 Licensed Marks and Works will result in immediate and irreparable damage to LICENSOR and to the rights of any subsequent LICENSEE
 of LICENSOR. LICENSEE acknowledges and admits that there is no adequate remedy at law for failure to cease such activities, and LICENSEE
 agrees that in the event of such breach or threatened breach, LICENSOR shall be entitled to seek injunctive and equitable relief
 and such other relief as any court with jurisdiction under this agreement may deem just and proper without the posting of any bond.

**40.5** <u>Attorneys' Fees.</u> If LICENSOR or LICENSEE brings any legal action or other proceeding to interpret or enforce the terms of this Agreement,
 then, to the full extent legally permissible, the prevailing Party to any such action or proceeding shall be entitled to recover
 reasonable attorney's fees and any other costs incurred, in addition to any other relief to which it is entitled.

**40.6** <u>Interpretation.</u> The Parties agree that each Party and its counsel has reviewed this Agreement and the normal rule of construction that any ambiguities
 are to be resolved against the drafting Party shall not be employed in the interpretation of this Agreement. The Parties agree that
 the English translation of this Agreement shall be the controlling translation.

**40.7** <u>Waiver.</u> The failure of LICENSOR to insist in any one or more instances upon the performance of any term, obligation, or condition of
 this Agreement by LICENSEE or to exercise any right or privilege herein conferred upon LICENSOR shall not be construed as thereafter
 waiving such term, obligation, or condition, or relinquishing such right or privilege, and the acknowledged waiver or relinquishment
 by LICENSOR of any default or right shall not constitute waiver of any other default or right. No waiver shall be deemed to have
 been made unless expressed in writing, and then, only to the extent as expressly waived in such writing.

**40.8** <u>Time of the Essence.</u> Time is of the essence with respect to the obligations to be performed under this Agreement.

**40.9** <u>Rights Cumulative.</u> Except as expressly provided in this Agreement, and to the extent permitted by law, any remedies described in this
 Agreement are cumulative and not alternative to any other remedies available at law or in equity..

**40.10** <u>Further Assurances</u>. Each Party hereby agrees to take or cause to be taken such further actions to execute, deliver and file or cause
 to be executed, delivered and filed such further instruments, documents and agreements, and will obtain such consents or waivers,
 as may be necessary or as may be reasonably requested in order to fully effectuate the purposes, terms and conditions of this Agreement.

**40.11** <u>Force Majeure.</u> In cases of war conditions, fire, flooding, labor strikes in the factory of LICENSEE or in the factory of those manufacturing
 items necessary for the manufacture of the Licensed Products, or in the event of a decree issued by a governmental authority, or
 in any circumstances beyond the control of one of the Parties which prevents it from fulfilling its obligations, the Party prevented
 shall not be held liable and shall be exempt from the payment of any compensation to the other Party, while such conditions prevail,
 and for two (2) months thereafter.

LICENSEE acknowledges that the Agreement shall come into force and become legally binding once duly executed by all signatory parties.

**IN WITNESS WHEREOF**, each Party has caused this Agreement to be executed by their authorized representatives on the dates indicated below.

---

| | | | |
|:---|:---|:---|:---|
| The LICENSOR | The LICENSOR | The LICENSEE | The LICENSEE |
| **LAFIG Belgium s.a.** | **LAFIG Belgium s.a.** | SRM ENTERTAINMENT INC | SRM ENTERTAINMENT INC |
| By: | */s/ Brigitte Ickmans* | By | */s/ Taft Flittner* |
| Name: | Brigitte Ickmans | Name: | Taft Flittner |
|  | CEO | Title: | President |
| Date | 28 July 2022 | Date: | 25 July 2022 |

---

**<u>SCHEDULE A</u>**

Licensed Works do not consist of any and all Smurfs characters (as well as any non-Smurfs characters associated therewith), names, characteristics/traits, mythologies, stories, visualizations, environments, styles etc… which do not exist at the date of this agreement, except for new visualizations of the existing Smurfs characters (as well as any existing non-Smurfs characters associated therewith) and/or visualizations of new Smurfs characters, appearing during the term of this agreement in LICENSOR's online artwork bank, in so far these new visualizations can be used by LICENSEE according to ARTICLE 2.1. ARTWORK USE REQUIREMENTS.

A number of copyrights in the foregoing Licensed Works in which LICENSOR has rights are registered at the US Copyright Office in the name of Peyo, Pierre Culliford or STUDIO PEYO S.A.

**<u>SCHEDULE B</u>**

**<u>Part 1: SMURF TRADEMARKS</u>**

The Licensed Marks include all trademarks, if any, in and to the existing Smurfs characters (as well as any non-Smurfs characters associated therewith) as of the Effective Date and the names of such characters, which are registered in the USA or elsewhere worldwide in the name of STUDIO PEYO S.A., Pierre Culliford and/or IMPS S.A. and which are for the trademark class(es) which include de Licensed Products.

**<u>Part 2: LICENSED MARKS</u>**

Unless otherwise specified in Article 12 of the specific conditions, the Licensed Marks are limited to:

---

| | |
|:---|:---|
| **For USA:** |  |
| <br>![](ex10-6_001.jpg)<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;![](ex10-6_004.jpg) |
| **For Canada:** |  |
| &nbsp;&nbsp;&nbsp; ![](ex10-6_002.jpg)<br>![](ex10-6_003.jpg) | ![](ex10-6_005.jpg) |

---

**<u>SCHEDULE C</u>**

**<u>CODE OF CONDUCT</u>**

**Ethical Standard:** Our partner companies must conduct their business in a manner consistent with the highest ethical standards and know that this contributes directly to our corporate reputation and the collective success of LICENSOR (the "Company").

**Child Labor:** Our partner companies may not use child labor which is defined as anyone under the age of 14, or under the age interfering with compulsory schooling, or under the minimum age established by applicable law, whichever is greater.

**Involuntary Labor:** Our partner companies shall not use any forced or involuntary labor including persons in prison, bonded, indentured or otherwise.

**Coercion and Harassment:** Our partner companies will show respect to all employees. Lack of respect would include threats of violence, and other forms of physical, psychological, verbal and sexual harassment or abuse.

**Nondiscrimination:** Our partner companies shall maintain current policies regarding discrimination based on race, religion, age, sex, nationality, social or ethnic origin, sexual orientation, political opinion or disability. These policies are to include nondiscriminatory employment practices concerning salary, benefits, advancement, discipline, termination, or retirement based on the above mentioned personal attributes of an employee.

**Citizenship**: Our partner companies shall require proof of citizenship or immigration status upon employment and will employ only those legally eligible for work.

**Association:** Our partner companies will allow the employees to associate, organize and bargain collectively in a lawful and peaceful manner, without penalty or interference.

**Employee Health and Safety:** Our partner companies will provide a safe and healthy environment for all employees. This environment must comply with all state, federal, or country safety regulations and codes, including fire and health codes.

**Product Safety**: Our partner companies will manufacture all licensed merchandise in compliance with all applicable health, safety and labeling laws, regulations and standards, and shall voluntarily recall and be solely responsible for any and all licensed merchandise that is not in compliance with any such applicable laws, regulations and standards.

**Compensation:** Our partner companies will comply with all wage and hour laws and regulations, including minimum wage, overtime, maximum hours, piece rates and other issues involved with compensation, including providing legally mandated benefits. Overtime pay will be regulated by allowances given by local law. If local law doesn't regulate the number of hours an employee can work in a week including pay for overtime hours, the employee will not be paid less than their minimum wage and will not work more than 60 hours per week. All employees will be entitled to at least one day off per seven-day period.

**Local Standards**: Where local industry standards are higher than legally required, we expect our partner companies to meet the higher standards.

**Protection of the Environment:** Our partner companies will comply with all applicable environmental legal requirements and observe environmentally conscious practices in all locations that the partner company operates.

**Other Laws:** In addition to the above, our partner companies are expected to comply with any and all laws and regulations, including those affecting the manufacturing, pricing, sales, and the domestic and international importation and distribution of products.

**Subcontracting:** Our partner companies will not use any subcontractors to produce licensed merchandise without written consent from our Company including a signed copy of the Code of Conduct.

**Monitoring and Compliance:** Our partner companies will authorize our Company and any monitoring agency employed by our Company to confirm compliance of the Code of Conduct. This will also include unannounced onsite inspections of facilities and all records relating to compliance with the Code of Conduct.

**Conflict of Interest:** Our partner companies may not give Company employees a gift of value in excess of $25.00US, and may not bribe foreign officials to benefit our Company or its business.

LICENSEE acknowledges that the Agreement shall come into force and become legally binding once duly executed by all signatory parties.

**IN WITNESS WHEREOF**, each Party has caused this Agreement to be executed by their authorized representatives on the dates indicated below.

---

| | | | |
|:---|:---|:---|:---|
| The LICENSOR | The LICENSOR | The LICENSEE | The LICENSEE |
| **LAFIG Belgium s.a.** | **LAFIG Belgium s.a.** | SRM ENTERTAINMENT INC | SRM ENTERTAINMENT INC |
| By: | *Brigitte Ickmans* | By: | */s/ Richard Miller*  |
| Name: | Brigitte Ickmans | Name: | Richard Miller  |
|  | CEO | Title: | CEO |
| Date | 28 July 2022 | Date: | July 28, 2022  |

---

## Exhibit 10.7

**Exhibit 10.7**

**<u>Schedule A</u>**

**BASIC TERMS:**

**1.** **Zoonicorn, LLC:** 

---

| | |
|:---|:---|
| **Contact:** | Mark Lubratt |
| **Address:** | PO Box 130115 Roseville MN 55113 |
| **Telephone:** |  |
| **Website**: | www.zoonicorn.com |
| **Emai**l: | mpl@zoonicorn.com |

---

**2.** **Licensee:** 

---

| | |
|:---|:---|
| **Company:** | SRM Entertainment Inc |
| **Contact:** | Taft Flittner |
| **Address:** | 1061 E Indiantown Road, Suite 110, Jupiter, FL 33477 |
| **Telephone:** | 407.808.0569 |
| **Website:** | www.srmentertainment.com |
| **Email:** | taft@srmentertainment.com |

---

**3.** **Agent:** 

---

| | |
|:---|:---|
| **Company:** | All Art Licensing |
| **Contact:** | J'net Smith |
| **Address:** | 205 Pinon Drive Sedona AZ 86336 |
| **Telephone:** | 206.719.1905 |
| **Website:** | www.allartlicensing.com |
| **Email:** | jnet@allartlicensing.com |

---

**4.** **Licensed Property:** 

All Zoonicorn characters including but not limited to Ene, Promithea, Valeo, Aliel, Maple, Pancake, Odessa, Mama, and Harold. Illustrations depicting the characters will be provided to Licensee by Zoonicorn. Unless otherwise specifically stated, all licenses are non-exclusive.

**5.** **Licensed Trademarks:** 

Zoonicorn, Zooniverse, Ene, Promithea, Valeo, Aliel and other Zoonicorn character names. Identification standards depicting the proper appearance of the marks will be provided to Licensee by Zoonicorn. Unless otherwise specifically stated herein, all licenses are non-exclusive.

**6.** **Licensed Products:** 

Non-exclusive license to manufacture and distribute the following products:

-Sip with Me! Cup – Patented Straw and 3D character/environment (possible positioning on top of drink lid) configured so as to allow liquid/drink to flow through straw to consumer at same time as liquid flows through 3D character/article. This configuration makes it look like the character/article is drinking liquid at same time as consumer. Straw is manufactured from PVC and cup is Polypropylene.

-Dinnerware – Made of melamine, cup, fork, spoon, bowl, lunch plate and dinner plate.

Other Licensed Products may be added from time to time in written amendments to this Agreement.

If the parties collaborate on characters, stories, design themes recommended by Licensee or suggested by Zoonicorn and developed and designed by Licensee with Zoonicorn approval, Zoonicorn will hold all right, title and interest in and to such new designs, the Licensed Property(ies), and resulting Licensed Products.

**7.** **Marketing Dates:** 

Unless otherwise agreed, Licensee shall have the Licensed Product produced and delivered to approved retailers, or available for online distribution, in all countries in the Territory, as ordered, on or before the following dates ("Marketing Dates"):

1) January 2023

In the event Licensee misses a Marketing Date, Licensee agrees to pay an additional advance on Royalties equal to $___ NA ___ USD.

**8.** **Term:** 

Effective Date: July 1, 2023

Termination Date: December 31, 2024

**9.** **Territory:** 

USA

**10.** **Advance/Guarantee:** 

Licensee shall pay Zoonicorn an advance of twenty-five hundred Dollars ($2,500.00) upon the parties' signing of this contract and further advances as noted herein:

---

| |
|:---|
| July 1, 2022/$2,500.00 |
| December 31, 2023/$2,500.00 |

---

The total guarantee of $5,000.00 USD during the term of this Agreement.

Licensee shall receive immediate credit for the amount of any advance at the time such is paid to Zoonicorn and the advance will be applied against royalty payments due and otherwise payable to Zoonicorn. All advances are non-refundable.

&nbsp;&nbsp;&nbsp;&nbsp;**11.** **Royalty**:
 The following royalty amounts are due and payable to Zoonicorn:

a. <u>Royalty on Wholesale Sales - Tangible Goods</u>. Licensee agrees to pay Zoonicorn a royalty of seven percent (7%) of Licensee's Net Wholesale sales of the Licensed Products. "Net Wholesale" shall mean License's gross revenues from any and all shipments of Licensed Products, less: discounts given to bona fide customers; sales taxes and freight charges, if any, actually paid; credits and allowances for uncollectible accounts as are usually and customarily granted in the ordinary course of Licensee's business on the return of products, the aggregate of which returns and discounts may not exceed 3% of Licensee's gross sales during each calendar year of the Term.

b. <u>Royalty on Direct Sales – Tangible Goods</u>. Licensee agrees to pay Zoonicorn a royalty of nine percent (9%) on Licensed Products sold directly to the public at a Retail Price. Retail Price means a price that is Thirty Percent (30%) or more, greater than Licensee's wholesale price. Direct sales include, but is not limited to, online sales, direct mail solicitations, and telemarketing.

c. <u>Royalty on Digital Products (e.g. Computer games and Apps, books and music)</u>. Licensee agrees to pay Zoonicorn a royalty of ____ NA <u>___</u> percent (NA ___%) of Revenue received from the distribution of the Licensed Product. "Revenue" includes money received from customer purchases made while

playing the game or interfacing with the Licensed Property. Revenue includes money received from third-party advertising associated with the Licensed Property.

d. Non-Fungible Tokens (NFT's). Licensee agrees to pay Zoonicorn a royalty of NA percent (NA_%) received from the distribution of the Licensed Product. Unless otherwise agreed in writing, the NFT licensed under this Agreement must reside on the following platform(s): ___ NA ___. Licensee may grant purchasers of an NFT "a world-wide, non-exclusive, non- transferable, royalty-free license to use, copy, and display the art that underlies the NFT for personal, non-commercial use or resale. In no event may the art underlying the NFT be displayed on a physical item.

**12.** **Marketing Obligations** 

Licensee shall endeavor to promote the Zoonicorn line with emphasis and with timely interviews, a press release to recognize the signing of the license and featuring the Zoonicorn line in any general and sub- seasonal catalogs and within its showrooms. Licensee further agrees to consider joining any Zoonicorn cross-promotional opportunities with its other licensees.

Licensee shall use all reasonable efforts to respond to retailer needs and requests for merchandising, POP and advertising materials related to the Zoonicorn lines to assure the success of the line.

Licensee agrees to provide Zoonicorn with FedEx, or other viable overnight mailing account, or to allow billing of overnight mailing to Licensee for the sole purpose of providing immediate delivery of production materials or approvals on deadline as required by Licensee's request for items which cannot be sent and approved electronically.

Upon request by Zoonicorn, Licensee agrees to cover travel and related expenses for a maximum of one Zoonicorn trip annually to Licensee's offices or a mutually agreed to tradeshow or client location for the purpose of the development, planning and marketing of Licensed Product collections. Further trips must be agreed to between both parties, on an as needed basis, and paid for by Licensee.

**13.** **Promotional Samples** 

a. <u>Promotional Samples - Goods.</u> Within thirty days of the first distribution to the first retail account for each Licensed Product, Licensee shall, at its expense, ship to Zoonicorn four (4) free samples of each final manufactured Licensed Product. Zoonicorn may purchase additional samples upon request for the cost of goods price.

b. <u>Promotional Samples – Downloadables and Online Services</u>. Within two days of a downloadable Licensed Product or online service, Licensee will make twelve free copies or twelve free accounts (as applicable) available to Zoonicorn. Zoonicorn may purchase additional samples upon request at a discount of sixty percent (60%).

c. <u>Promotional Samples – NFT's</u>. Within two days of a downloadable Licensed Product Licensee will make _NA free NFT's available to Zoonicorn. Zoonicorn may purchase additional samples upon request at a discount of <u>____</u> NA ___.

**14.** **Trademark Use** 

Zoonicorn shall have the right to approve all promotional and informational material concerning the Licensed Properties, including but not limited to all trade and consumer public relations, packaging, displays, promotional and informational material concerning Zoonicorn or as it relates to the Licensed Products. Zoonicorn has the right to prohibit or terminate any use which it believes, in its sole discretion, is consistent with the Zoonicorn brand or is otherwise harmful or damaging to the goodwill associated with the Trademarks or Licensed Property.

Licensee shall use the Licensed Trademarks with TM,® and copyright notice, in the form as provided by Zoonicorn, on Licensed Product that offers reasonable space, and the Zoonicorn copyright notice on all other Licensed Product and packaging.

**15.** **Authorized Channels of Distribution:** 

Licensee's marketing is primarily directed to the following geographic regions: USA.

Licensee primarily markets its products using the following methods: direct sales online, sales representatives and trade shows.

Licensee's website and primary marketing material is in the following language(s): English.

Licensee will not change its geographic focus or primary marketing methods without Zoonicorn's prior

written approval.

Licensee will distribute the Licensed Product in the following: Big box stores, gift stores and themed attractions.

Licensee shall use best efforts to ensure that its customers will sell Licensed Products solely through the Authorized Channels of Distribution, and shall not knowingly sell Licensed Products to persons or entities that Licensee knows, or reasonably should know, intend to resell or are likely to resell Licensed Products outside of the Authorized Channels of Distribution or outside the Territory.

During the Sell-Off Period as defined in the Merchandising License Agreement, or one year after the season that a specific "seasonal" Licensed Product collection was released, Licensee shall have the non- exclusive right to sell remaining Licensed Products to the discount and close out stores defined above.

**16.** **Design and Production Support.** 

In addition to the licenses granted hereunder, Zoonicorn may agree to provide Licensee with design and production support services. In the event that Zoonicorn is willing to provide those services, Zoonicorn will provide Licensee with a quote for these services that will more fully outline the services and the cost of the services. Fees for design and production support services are in addition to the royalty fees payable under this Agreement and must be paid as set out in the proposal. Zoonicorn will perform such services under the terms of this Agreement, or Zoonicorn may require Licensee to enter into a separate Design and Production Support agreement.

&nbsp;&nbsp;&nbsp;&nbsp;**17.** **Additional Terms: ___** NA____

---

| | |
|:---|:---|
| **As Agreed Upon:** | **As Agreed Upon:** |
| **LICENSEE:** | **LICENSEE:** |
| **By:** | |
| **Name:** | Taft Flittner |
| **Date:** | 7/17/2022 |
| **Title:** | President |

---

---

| | |
|:---|:---|
| **ZOONICORN, LLC:** | **ZOONICORN, LLC:** |
| **By:** | */s/ Mark Lubratt* |
| **Name:** | **Mark Lubratt** |
| **Date:** | 7/17/2022 |
| **Title:** | **Managing Member** |

---

**Zoonicorn® MERCHANDISE LICENSE AGREEMENT**

**STANDARD TERMS AND CONDITIONS**

THIS LICENSE AGREEMENT ("Agreement") is made effective as of the date set forth on Schedule A, between Zoonicorn, LLC, a Minnesota Limited Liability Company with offices at PO Box 130115, Roseville, MN 55113 ("Zoonicorn") and the Licensee identified on Schedule A.

WHEREAS, Zoonicorn is the owner of the Licensed Property and Trademarks identified in Schedule A; and

WHEREAS, Licensee desires to (i) manufacture, develop, market, promote and distribute the Licensed Products in the Territory and Authorized Channels, as identified in Schedule A and (ii) use the Trademarks on or in association with the Licensed Products and the promotion of the Licensed Products.

NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereby agree as follows:

**1.** **LICENSE GRANTS.** 

1.1 <u>Tangible Goods</u>. Provided Licensee is in compliance with the terms of this Agreement, Zoonicorn hereby grants Licensee, during the Term, the right and license to manufacture and /or have manufactured Licensed Products and to market, distribute, promote, sell, and advertise the Licensed Products in the Authorized Channels in the Territory. The license includes, but is not limited to, a license under any and all copyrights with respect to the Property. This license pertains to the Licensed Products only and does not extend to any other product or service.

1.2 <u>Digital Products (Games and apps, books and music)</u>. Provided Licensee is in compliance with the terms of this Agreement, Zoonicorn hereby grants Licensee, during the Term, the right and license to develop story lines for the Licensed Property to be portrayed in the Licensed Products and to market, distribute, promote, sell, and advertise the Licensed Products in the Authorized Channels in the Territory. The license includes, but is not limited to, a license under any and all copyrights with respect to the Property. This license pertains to the Licensed Products only and does not extend to any other product or service.

1.3 <u>Digital Products (NFT's)</u>. Provided Licensee is in compliance with the terms of this Agreement, Zoonicorn hereby grants Licensee, during the Term, the right and license to develop art for an NFT based on the Licensed Property and to market, distribute, promote, sell, and advertise the Licensed Products in the Authorized Channels in the Territory. The license includes, but is not limited to, a license under any and all copyrights with respect to the Property. This license pertains to the Licensed Products only and does not extend to any other product or service. Licensee may grant purchasers of an NFT "a world-wide, non-exclusive, non-transferable, royalty-free license to use, copy, and display the art that underlies the NFT for personal, non-commercial use or resale. In no event may the art underlying the NFT be displayed on a physical item.

1.4 <u>Trademark License</u>. Provided Licensee is in compliance with the terms of this Agreement, including but not limited to obtaining all approvals, Zoonicorn hereby grants to Licensee, during the Term, a license to use the Trademarks in the Territory in the Authorized Channels on or in association with the Licensed Products, as well as on packaging, promotional and advertising material associated therewith.

1.5 <u>No Sublicense</u>. Licensee may not grant any sublicenses to any third party without the prior express written consent of Zoonicorn, which consent may be withheld for any reason, in Zoonicorn's sole discretion.

1.6 <u>Territorial Limitation</u>. Licensee shall not make or authorize any use, direct or indirect, of the Licensed Property or Trademarks in any country outside the Territory and shall not knowingly sell Licensed Products to persons who intend or are likely to resell them in any country outside the Territory.

**2.** **COMPENSATION.** 

2.1 <u>Royalty Rate</u>. Licensee shall pay Zoonicorn the royalty set forth on Schedule A.

2.2 <u>Royalty Period</u>. The Royalty owed Zoonicorn shall be calculated on a quarterly calendar basis (the "Royalty Period") and for domestic and foreign accounts, shall be payable no later than thirty (30) and ninety (90) days, respectively, after the termination of each full calendar quarter, with the exception of the first and last calendar quarters, which may be "short," depending upon the effective date of this Agreement.

2.3 <u>Royalty Statements</u>. For each Royalty Period, and with each Royalty Payment, if any, Licensee shall provide Zoonicorn with a written royalty statement in a form acceptable to Zoonicorn. Such royalty statement shall be certified as accurate by a duly authorized officer of Licensee, submitted on a country- by-country basis, and unless otherwise agreed will recite the stock number, item, units sold, description, quantity shipped, gross invoice, amount billed customers less discounts, allowances, returns and reportable sales for each Licensed Product. Statements for digital products will recited the number of copies downloaded or distributed, number of user accounts created, total revenue generated from the distribution of the Licensed Property, total revenue generated from user purchases within the Licensed Property, and any allowable deductions. Royalty Statements shall be furnished to Zoonicorn whether or not any Licensed Products were sold or otherwise distributed during the Royalty Period.

2.4 <u>Royalty Accrual</u>. Royalty obligations are due and payable on the first occurring of the following events: customer billing or invoicing, Licensed Product shipment, or when revenue is received for the Licensed Product. Royalties are due and payable even if Licensee has not yet received payment.

2.5 <u>Opportunity to Challenge</u>. The receipt or acceptance by Zoonicorn of any Royalty statement, or the receipt or acceptance of any Royalty payment made, shall not prevent Zoonicorn from subsequently challenging the validity or accuracy of such statement or payment.

2.6 <u>Obligation upon Termination</u>. Upon expiration or termination of this Agreement for material breach by Licensee, all Royalty obligations shall be accelerated and shall immediately become due and payable. Licensee's obligation to pay Royalties shall survive expiration or termination of this Agreement and will continue for so long as Licensee continues to manufacture, distribute, sell or otherwise market the Licensed Products.

2.7 <u>Payments</u>. All payments due hereunder shall be made payable and sent to Zoonicorn, at the address specified on Schedule A, and shall be made only in U.S. currency, drawn on a U.S. bank, unless otherwise specified between the parties. At the request of Zoonicorn, Licensee will pay amounts due hereunder by wire transfer to a bank of Zoonicorn's choice. Late payments shall, as of the noted due date, incur interest at the rate of the lesser of: (a) prime plus 4, or (b) the maximum permissible rate under applicable law, compounded monthly from the date such payments were originally due, until paid in full.

**3.** **AUDIT.** 

3.1 <u>Audit Right</u>. Zoonicorn or its representative shall have the right, upon at least ten (10) business days written notice to inspect Licensee's books and records and all other documents and material pertaining to the Licensed Products and Licensed Property, at the place or places where such records are normally retained by Licensee. Zoonicorn shall have free and full access thereto for such purposes and shall be permitted to be able to make copies thereof and extracts there from.

3.2 <u>Discrepancies</u>. In the event that an inspection reveals a discrepancy in the amount of Royalty owed Zoonicorn from what was actually paid, Licensee shall pay such discrepancy, plus interest, calculated at the highest rate allowed by law, compounded monthly accrued from said date, until paid in full. In the event that Licensee has failed to pay at least ninety-five percent (95%) of the amounts due under this Agreement, Licensee will reimburse Zoonicorn for the reasonable costs of such inspection.

3.3 <u>Books and Records</u>. All books and records relative to Licensee's obligations hereunder shall be maintained and kept accessible and available to Zoonicorn for inspection for at least two (2) years after termination of this Agreement.

**4. CONFIDENTIALITY.** The parties agree that, during the course of the Agreement, each may disclose, orally or visually, certain confidential or proprietary information to the other (the "Confidential Information"). "Confidential Information" shall not include information: (i) that rightfully is, or becomes, part of the public domain; (ii) that is rightfully received from a third party; or (iii) that can be shown to have been independently developed without reference to or use of the Confidential Information. The parties agree that any such Confidential Information shall be retained in confidence by the other in perpetuity. The parties understand and agree, however, that such information may be used in any proceeding based on Licensee's failure to pay its actual Royalty obligation. This paragraph will survive the termination of this Agreement.

**5. TAXES.** Licensee shall pay, without limitation, any territorial tax, levy or charge howsoever denominated, imposed or levied by any statute, law, rule or regulation now in effect or hereafter enacted including, without limitation, quotas, licenses, contingents, turnover taxes, import permits, national, state, county, city or other taxes howsoever denominated, relating to or imposed upon the right or privilege to use the Licensed Property in connection with the Licensed Products or Licensee's income. Said taxes will not be deductible by Licensee in determining Royalties.

&nbsp;&nbsp;&nbsp;&nbsp;**6.** **REPRESENTATIONS AND WARRANTIES.** 

6.1 <u>Zoonicorn's Representations and Warranties</u>. Zoonicorn represents and warrants that: (i) it has the right and power to enter into this Agreement and to grant the licenses granted herein; (ii) there are no other agreements with any other party in conflict herewith; and (iii) to the best of Zoonicorn's knowledge, the Licensed Property and Trademarks when used within the scope of the licenses granted do not infringe upon any valid intellectual property rights of any third party.

6.2 <u>Licensee's Representations and Warranties</u>. Licensee represents and warrants that: (i) it has the right and power to enter into this Agreement; (ii) there are no other agreements with any other party in conflict herewith; (iii) it will use all reasonable efforts to promote, market, sell and distribute the Licensed Products; (iv) it shall solely be responsible for the manufacture, production, sale and distribution of the Licensed Products and will bear all related costs associated therewith; (v) that the manufacture, production, development and/or distribution of the Licensed Products will meet all standards, rules and regulations of the Territory, including but not limited to safety standards and child labor laws; and (vi) that its marketing, promotion and advertising will comply with the standards, rules and regulations of the Territory.

**7.** **NOTICES, QUALITY CONTROL AND SAMPLES** 

7.1 <u>Compliance with Laws</u>. The Licenses granted hereunder are conditioned upon Licensee's full and complete compliance with the laws of the Territory, including but not limited to: privacy, computer security, manufacturing and the marking provisions of the applicable trademark and copyright laws.

7.2 <u>Notices</u>. To the extent practicable, Licensee shall include a notice that it is the manufacturer of the Licensed Products and its name and address on all packaging and promotional materials.

7.3 <u>Quality</u>. The Licensed Products shall be of a high quality, which is at least equal to comparable products distributed under the Trademarks as of the date of this Agreement, and shall be in conformity with a standard sample approved by Zoonicorn. If the quality of a Licensed Products falls below Zoonicorn's quality standards, Licensee shall use its best efforts to restore such quality. In the event that Licensee has not taken appropriate steps to restore such quality within ninety (90) days after notification, Zoonicorn may terminate this Agreement by giving Licensee written notice of the termination.

7.4 <u>Modifications and Alterations</u>. Licensee agrees not to create, alter, crop, retouch, modify, destruct, damage or change in any way whatsoever the Licensed Property without the express written approval of Zoonicorn. Notwithstanding the foregoing, however, once a design is finalized, Licensee shall have the right to reformat the design for sizing, printability or marketing purposes. In all instances, Zoonicorn shall have final approval of all product prototypes.

&nbsp;&nbsp;&nbsp;&nbsp;**8.** **APPROVALS.** 

Licensee shall, at Licensee's sole cost and effort, obtain Zoonicorn's final written approval over the final version of each Licensed Product, as well as the production ready versions of all promotional and advertising material (printed or electronic) before such is released for final production. Zoonicorn shall use all reasonable efforts to respond to Licensee's submissions and/or requests for item approval within ten days of receipt. No product may be released to market without Zoonicorn's final approval. If Zoonicorn should disapprove any sample, it shall provide specific revisions required to obtain final approval. Once prototype or pre-production samples have been approved in writing by Zoonicorn, Licensee shall not depart materially therefrom without Zoonicorn's prior express written consent. Licensee acknowledges that Zoonicorn is reviewing the Licensed Product and promotional material for compliance with Zoonicorn's brand and character identity, brand quality and intellectual property marking requirements only. Licensee is solely responsible for compliance with the Territory's laws, rules and regulations regarding manufacturing, sales, distribution, advertising, and promotions.

&nbsp;&nbsp;&nbsp;&nbsp;**9.** **INTELLECTUAL PROPERTY.** 

9.1 All right, title and interest in and to the Licensed Property (including but not limited to the copyright therein) and the Trademarks are in, and will remain in, Zoonicorn. Licensee agrees to assign, and hereby assigns, all right, title and interest it may have in and to any modifications, derivative works, improvements, or changes, (and whether or not approved or allowed), to the Licensed Property or the Trademarks, to Zoonicorn. Licensee agrees to assign, and hereby assigns, all right, title and interest it may have in and to any storylines utilizing the Licensed Property or distributed under the Trademarks and any modifications, derivative works, improvements, or changes, (and whether or not approved or allowed) to said storylines, to Zoonicorn. All goodwill associated with the use of the Trademarks will belong to Zoonicorn. Licensee agrees to execute a confirmation of Zoonicorn's ownership upon request by Zoonicorn. Licensee will not attack or seek to invalidate Zoonicorn's trademarks or copyrights.

9.2 Licensee shall not create any online store, social media account, NFT or webpage (e.g. Facebook, Instagram, Pinterest) containing the Trademarks in the title or address of the account without Zoonicorn's prior written consent. Upon termination of this Agreement, any online store, web page, social media or NFT account containing the Trademarks in the title or address shall be terminated. Licensee agrees that it will not utilize or authorize the use of, any name, likeness, depiction or visual representation of the Trademarks or Licensed Property, which Zoonicorn in its sole, complete and unfettered discretion, exercised in good faith, determines to be similar to, or which may be confused with the Trademarks or Licensed Property, or any element thereof. Licensee agrees not to directly associate other characters, personalities, names, likenesses or symbols with the Licensed Property or the Trademarks without the prior express written consent of Zoonicorn, which consent may be withheld for any reason, in Zoonicorn's sole discretion.

9.3 In the event Licensee becomes aware of an infringement of the intellectual property rights licensed hereunder, Licensee will immediately notify Zoonicorn of the infringement. Zoonicorn may further investigate the claim, and may institute litigation to defend its intellectual property rights. Zoonicorn will act in good faith and keep Licensee informed as to the status of the matter. The parties will cooperate with one another, at their own expense, in any lawsuit. In the event a recovery is made, each party will be entitled to have its costs and expenses reimbursed from the proceeds in proportion to the amount spent. Licensee may not institute litigation against any third party based on a claim of infringement of the Trademarks or Licensed Property without Zoonicorn's prior written consent.

9.4 Licensee's obligations under this Section 9 will survive the termination or expiration of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;**10.** **TERMINATION.** 

10.1 <u>Zoonicorn's Right to Terminate Upon Notice</u>. Zoonicorn may terminate this Agreement in the event of any of the following defaults, should Licensee fail to remedy such default within thirty (30) days from receipt of notice in writing from Zoonicorn specifying such default:

&nbsp;&nbsp;&nbsp;&nbsp;i. After
 having commenced sale of a non-seasonal Licensed Product, Licensee fails to manufacture and
 make available for sale commercially reasonable quantities of such non-seasonal Licensed
 Product for three (3) consecutive Royalty Periods;

ii. Licensee
 fails to obtain or maintain insurance in the amount and of the type provided for herein;

iii. After
 requested to do so in writing, Licensee fails to discontinue the distribution or sale of
 the Licensed Products which depart materially from previously approved samples or the use
 of any artwork, packaging or promotional material which has not been approved or corrected
 or which departs materially from previously-approved samples; or

iv. Any
 other material breach of this Agreement by Licensee.

10.2 <u>Zoonicorn's Right to Terminate Immediately</u>. Zoonicorn shall have the right to terminate this Agreement immediately upon written notice to Licensee in the event of any of the following:

&nbsp;&nbsp;&nbsp;&nbsp;i. Licensee
 files a petition in bankruptcy or is adjudicated a bankrupt or insolvent;

ii. Licensee
 makes an assignment without the prior written consent of Zoonicorn;

iii. Licensee
 discontinues its business or a receiver is appointed for Licensee or for Licensee's business
and such receiver is not discharged within thirty (30) days; or

iv. Licensee
 fails to make timely payment of Royalties when due more than two times during any twelve-month
 period;

10.3 <u>Licensee's Right to Terminate Upon Notice</u>. Licensee may terminate this Agreement upon thirty (30) days written notice to Zoonicorn in the event of a breach of a material provision of this Agreement by Zoonicorn, provided that, during the thirty (30) day period, the Zoonicorn fails to cure such breach.

**11.** **POST TERMINATION RIGHTS.** 

11.1 <u>Tangible Goods – Sell-Off Period</u>. Not less than ninety (90) days prior to the expiration of this Agreement Licensee shall provide Zoonicorn with a complete schedule of inventory of Licensed Products then on-hand (the "Inventory"). If this Agreement is terminated prior to its expiration date, Licensee will provide Zoonicorn the foregoing information within thirty (30) days of the expiration date. Provided that Licensee is current on Royalty payments and any other amounts due Zoonicorn, License is granted an additional one-hundred and eighty (180) days to sell the remaining Licensed Products (the "Sell-Off Period"). During the Sell-Off period, Licensee shall not manufacture or authorize the manufacture of Licensed Products. Licensee shall not manufacture Licensed Products in anticipation of the expiration of this Agreement. Any sales made during such Sell-Off Period shall be subject to all of the provisions of this Agreement, including but not limited to the Royalty payments. A second final and complete schedule of all Inventory then on hand will be submitted to Zoonicorn upon conclusion of the Sell-Off Period. The final Inventory, and the Royalties on Sales during the Sell-Off period are due and paid within thirty (30) days after the close of the Sell-Off Period. Zoonicorn shall have the right, after the Sell-Off Period, to purchase all or any part of the Inventory at the actual net per-unit cost to Licensee. All Licensed Products not sold during the Sell-Off period, or sold to Zoonicorn, will be destroyed. Upon request, Licensee will provide written certification of the destruction.

11.2 <u>Digital Products (games and apps) – Transition Period</u>. Not less than ninety (90) days prior to the expiration of the Agreement Licensee will provide Zoonicorn with notice of the number of user accounts or other quantification of the number of users. If this Agreement is terminated prior to its expiration date, Licensee will provide Zoonicorn the foregoing information within ten (10) days of the expiration date. If requested by Zoonicorn, Licensee will either provide Zoonicorn with user names and account addresses or cooperate with Zoonicorn in transitioning the user accounts to another provider of a similar digital property. Licensee will cooperate with Zoonicorn in creating a transition plan to notify the users of the Licensed Property of the termination of the availability of the Licensed Property. If requested, Licensee will notify users of the change in the Licensed Property using language prepared by Zoonicorn. Licensee hereby grants Zoonicorn the right to acquire the underlying software and user database for the digital property for a sum not to exceed ten percent (10%) of the Royalties paid by Licensee under this Agreement.

11.3 <u>Digital Products (NFT's, books and music)</u>. Upon termination of this Agreement, the sales of digital products shall terminate on the date of termination.

11.4 <u>Termination of Rights</u>. Except as stated above, all of the rights of Licensee under this Agreement shall terminate with the termination or expiration of this Agreement and Licensee shall immediately discontinue all use of the Licensed Property and the Trademarks, at no cost whatsoever to Zoonicorn.

11.5 <u>Return of Materials</u>. Upon expiration or termination of this Agreement for any reason whatsoever, Licensee agrees immediately to return to Zoonicorn all Confidential Information belonging to Zoonicorn, all material relating to the Licensed Property and Trademarks including, but not limited to, all artwork, color separations, prototypes and the like, as well as any market studies or other tests or studies conducted by Licensee with respect to the Licensed Property, at no cost to Zoonicorn.

**12.** **INDEMNIFICATION.** 

12.1 <u>Licensee's Indemnification</u>. Licensee agrees to defend, protect, hold harmless and indemnify Zoonicorn, their officers, directors, agents and employees ("Indemnitees"), jointly and severally, against all costs, expenses and losses (including reasonable attorneys' fees and costs) arising from (i) personal injury and/or product liability related claims of third parties against Zoonicorn; (ii) Licensee's manufacture of a Licensed Product; (iii) Licensee's failure to comply with the rules, regulations or laws or the Territory; and (iv) Licensee's efforts in promoting or advertising a Licensed Product.

12.2 <u>Zoonicorn's Indemnification</u>. Zoonicorn agrees to defend, protect, hold harmless and indemnify Licensee, its officers, directors, agents and employees, jointly and severally, against all costs, expenses and losses (including reasonable attorneys' fees and costs) alleging that the Licensed Property when used within the scope of the licenses granted herein infringe the intellectual property rights, including the copyright and trademark rights therein, of any third party. This indemnification specifically excludes unauthorized modifications or changes to the Licensed Properties or Trademarks originated by Licensee.

12.3 Indemnification Procedure. A party claiming indemnification hereunder will immediately notify the indemnifying party of the claim and the indemnifying party will have the sole right and authority to control the litigation of the claim. Each party will cooperate in the defense of a claim, at the expense of the indemnifying party. The party seeking indemnification may seek its own legal counsel at its own expense. If a party fails to defend a claim after receiving notice of the claim the other party may defend and the indemnifying party agrees to pay the costs of the defense if the claim is covered by the indemnification obligations above. The terms of this Section 12 will survive the termination of this Agreement.

**13.** **INSURANCE.** 

Licensee agrees to obtain and maintain, at its own expense, Standard Product Liability Insurance from a financially sound and recognized insurance company(ies) doing business in the United States, providing adequate protection in all territories, in an amount of at least One Million Dollars ($1,000,000) for causes other than property damage, and a minimum of One Hundred Thousand Dollars ($100,000) for property damage with respect to alleged or actual defects in copies of the Licensed Products. Licensees producing downloadable Licensed Products or online subscription based services will also carry insurance covering online security breaches and credit card fraud in an amount of at least One Million Dollars ($1,000,000). Licensee agrees to maintain such insurance in effect during the Licensed Term and any extension terms, and for two (2) years thereafter. A fully paid certificate of insurance naming Zoonicorn as additional insured parties will be submitted to Zoonicorn prior to commencement of Licensee's manufacture, distribution or sale of copies of the Licensed Products. In the event of cancellation of a policy, and unless Zoonicorn receives written notice within 10 business days from Licensee that a substitute policy has been obtained, Zoonicorn may cure such default and Licensee agrees to pay immediately upon demand all sums paid by Zoonicorn to cure any such default. Licensee agrees to furnish Zoonicorn with a certificate of insurance evidencing same within thirty (30) days after execution of this Agreement and, in no event, shall Licensee manufacture, distribute or sell the Licensed Products prior to receipt by Zoonicorn of such evidence of insurance.

**14.** **MISCELLANEOUS.** 

14.1 <u>Force Majeure</u>. The parties understand and agree that in the event of an act of the government, or war conditions, or fire, flood or labor trouble in the factory of Licensee or of those manufacturing parts necessary for the manufacture of the Licensed Products, which prevents the performance by Licensee under the terms of this Agreement, then such nonperformance by Licensee shall not be considered as grounds for breach of this Agreement and such nonperformance shall be excused while the conditions herein prevail and for two (2) months thereafter.

14.2 <u>Governing Law, Venue and Attorney's Fees</u>. This Agreement will with be subject to the laws of the State of New York, excluding its conflict of law provisions. All disputes under this Agreement shall be resolved by the state and federal courts of the State of New York each party hereby consents to the jurisdiction of such courts, agrees to accept service of process by mail, and hereby waives any jurisdictional or venue defenses which may be available to it. The prevailing party in any suit shall be entitled to an award of reasonable attorney's fees.

14.3 <u>Waiver</u>. No waiver by either party of any default shall be deemed as a waiver of prior or subsequent default of the same or other provisions of this Agreement.

14.4 <u>Severability</u>. If any term, clause or provision hereof is held invalid or unenforceable by a court of competent jurisdiction, such invalidity shall not affect the validity or operation of any other term, clause or provision and such invalid term, clause or provision shall be deemed to be severed from the Agreement.

14.5 <u>Notices</u>. Notices required to be given pursuant to this Agreement shall be in writing and delivered to the other party at the address identified on Schedule A, by certified or registered mail, return receipt requested, or delivered by a recognized national overnight courier service. Either party may change the address to which notice or payment is to be sent by written notice to the other party.

14.6 <u>No Joint Venture</u>. Nothing contained herein shall constitute this arrangement to be employment, a joint venture or a partnership.

14.7 <u>Assignability</u>. The license granted hereunder is personal to Licensee and shall not be assigned by any act of Licensee or by operation of law unless in connection with a transfer of substantially all of the assets of Licensee and then solely with the prior written consent of Zoonicorn, which maybe be withheld in Zoonicorn's sole discretion. Any assignment or other transfer made without Zoonicorn's consent is null and void.

14.8 <u>Zoonicorn's Agent</u>. In the event an Agent is identified on Schedule A, Licensee agrees to respond to requests for information and follow the instructions of the Agent as if they had been requested or given by Zoonicorn. Failure to follow respond to or follow the instructions of the Agent will be a material breach of this Agreement.

14.9 <u>Brand Consistency and Non-Disparagement</u>. Licensee understands and acknowledges that the Zoonicorn brand is designed for young children and therefor Licensee agrees that it will not use or portray the Licensed Properties in a way that is distasteful, lewd, sexually suggestive, nor will Licensee promote the Trademarks or Licensed Properties in a way or venue that is inappropriate for children. Licensee shall not disparage Zoonicorn or the Licensed Properties. Whether or not Licensee's actions are consistent with Zoonicorn's brand identity, or violate this provision, is subject to Zoonicorn's sole and exclusive judgment. This paragraph will survive the termination of this Agreement.

14.10 <u>Time is of the Essence</u>. Licensee acknowledges that time is of the essence in performing its obligations hereunder and that Zoonicorn will suffer damages if Licensee does not perform its obligations in a timely manner.

14.12. <u>Entire Agreement</u>. This Agreement including its Schedules and Exhibits constitutes the entire understanding of the parties, and revokes and supersedes all prior agreements between the parties regarding the Licensed Properties, the Trademarks, and the Licensed Products, which may have been entered into between the parties, and is intended as a final expression of their Agreement. This Agreement shall not be modified or amended except in writing signed by the parties hereto and specifically referring to this Agreement.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

---

| | | | |
|:---|:---|:---|:---|
|  |  | ZOONICORN: | ZOONICORN: |
|  |  | By: | */s/ Mark Lubratt* |
|  |  | Name: | Mark Lubratt |
| Date: | 7/17/2022 | Title: | Managing Member |

---

---

| | | | |
|:---|:---|:---|:---|
|  |  | LICENSEE: | LICENSEE: |
|  |  | By: | */s/ Taft Flittner* |
|  |  | Name: | Taft Flittner |
| Date: | 7/17/2022 | Title: | President |

---

## Exhibit 10.8

**Exhibit 10.8**

**<u>LICENSING AGREEMENT</u>**

THIS LICENSING AGREEMENT ("Agreement") is hereby entered into as of September 1, 2021 (the "Effective Date") by and between, on the one hand, Taylored Concepts, LLC, having its principal place of business at 40 Dellwood Ave., Chatham, New Jersey, 07928 ("Taylored Concepts") and ProToyTypes, LLC having its principal place of business at 14 Clairview Road, Denville, New Jersey, 07834 ("ProToyTypes") (Taylored Concepts and ProToyTypes are hereinafter referred to collectively as "Inventor") and, on the other hand, SRM Entertainment, having its principal place of business located at 725 North Highway A1A, Suite C106, Jupiter, Florida 33477 (hereinafter referred to as "Licensee").

**WITNESSETH**

WHEREAS: Inventor owns or controls proprietary rights in and to the product concepts and related materials described in Attachment A hereto (hereinafter referred to as the "Property"), together with the valuable good will associated therewith, and

WHEREAS: Inventor desires to grant to Licensee, and Licensee desires to acquire, a license under all substantial rights in and to the Property, within the meaning of Section 1235 of the Internal Revenue Code of 1954;

WHEREAS: Licensee desires to use the Property on and in connection with the manufacture, advertising, promotion, offering for sale, sale and distribution, of certain products as hereinafter described, and Inventor is willing to grant Licensee such rights under the terms and conditions set forth herein;

NOW THEREFORE, in consideration of the mutual promises, covenants and conditions herein contained, or for good and valuable consideration, the sufficiency of which is mutually acknowledged, it is hereby agreed as follows:

1) <u>ARTICLES.</u> Inventor hereby grants to Licensee an exclusive, nontransferable, non assignable license, without the right to grant sublicenses except as set forth in Section 7)d), to use the Property in the Territory as defined in Attachment A hereto (the "Territory") in connection with the manufacture, advertising, promotion, offering for sale, sale and distribution of the products defined in Attachment A hereto (the "Articles") but only through the Distribution Channels as defined in Attachment A (the "Distribution Channels"). All rights not expressly granted to Licensee herein are reserved to Inventor (the "Reserved Rights"). Without limiting the generality of the foregoing, the Reserved Rights include all rights in and to the Property in connection with all goods and services other than the Articles; all rights in the Property outside the Territory; all rights in the Property outside the Distribution Channels; and the right to manufacture goods or services, even those identical to the Articles, in the Territory for ultimate re-sale outside the Territory or Distribution Channels. Inventor may exercise the Reserved Rights with no obligation to Licensee.

2) <u>TERM</u>. Unless sooner terminated in accordance with Section 20), the "Initial Term" of this Agreement shall commence as of the Effective Date and continue through and including December 31, 2022 (the "Initial Term"). Thereafter, this Agreement shall automatically renew for a single one (1) year period (the "Renewal Term") provided that (i) Licensee has, during the Initial Term, generated earned royalties sufficient to cover the Minimum Royalty Guarantee without the necessity of making a shortfall payment, and (ii) Licensee is actively selling at least three (3) SKUs of the Articles. As used herein, "Term" means the Initial Term and, if applicable, the Renewal Term. Any renewal or extension of the Term subsequent to the Renewal Term is subject to mutual agreement of the parties.

3) <u>REPRESENTATIONS</u>. Inventor represents that the Property is the original creation of Inventor and to the best of Inventor's knowledge and belief does not infringe the proprietary rights of any person or company. Inventor further represents that it has the legal authority to enter into this Agreement.

4) <u>OBLIGATIONS</u>. Licensee shall have the sole obligation and responsibility for the cost of development, manufacturing, packaging, distributing, selling and advertising of the Articles. "Cost of development" as used herein includes, without limitation, the cost of the artwork, photography, model makers and related art services, from the concept stage to final product. Further development costs beyond concept stage by Inventor at Licensee's request will be fully reimbursed by Licensee, once costs are approved in advance by Licensee. All artwork, models, photography and related materials pertaining to the Property will be returned to Inventor upon the expiration or termination of this Agreement.

5) <u>QUALITY CONTROL</u>. Licensee agrees that the Articles will be of high standards of quality so as to be safe, and manufactured, sold and distributed in accordance with all applicable federal, state and local laws and regulations. The quality of the Articles must be such that the good name of Inventor is not negatively impacted. All pre- production Articles and packaging must be provided by Licensee to Inventor. Inventor has absolute discretion as to approval of same. If Inventor does not respond in ten (10) working days following receipt of pre-production samples approving same, the samples will be considered to be approved.

6) <u>MARKETING DATE</u>. Licensee agrees to commence distribution and sale of commercial quantities of approved Articles in the Territory on or before the "Marketing Date" set forth in Attachment A. Inventor may terminate this Agreement if Licensee has not commenced such distribution and sale of the Articles on or before the Marketing Date, by giving notice in writing of such termination to Licensee. If different Articles are assigned different Marketing Dates, the foregoing termination right shall be applicable only to the affected Articles. Further, Inventor may terminate this Agreement in any country of the Territory if commercial quantities of the Articles are not in distribution and sale in that country within one (1) year following first shipment of the Articles to any country within the Territory. Sections 20) and 21) hereunder shall apply to any termination or partial termination under this Section. As used in this Section, "commercial quantities" means the quantity specified in Attachment A or, if no quantity is so specified, shall mean at least one thousand (1000) units.

7) <u>ROYALTY</u>

a) Licensee agrees to pay to Inventor a royalty equal to the percent of Net Sales (as defined below) specified as the "Royalty Rate" in Attachment A hereto. Such royalties shall be paid on all Net Sales by Licensee of the Articles and accrue when the Articles are billed out or shipped, whichever occurs earlier.

&nbsp;&nbsp;&nbsp;&nbsp;b) The
 term "Net Sales", as applied to the Articles means Licensee's or its affiliate's or subsidiaries gross sales
 (i.e., the gross invoice amount billed customers or, if there is no invoice or if there is consideration in addition to that specified
 in an invoice, the gross value of all consideration, however designated, attributable to the sale, distribution, use or exploitation
 of the Property or Articles) less up to, but not to exceed, ten percent (10%) to cover all actual and documented freight and delivery
 charges, trade and sales discounts, rebates and/or allowances to Licensee's customers, returns accepted for credit, sales and
 excise taxes, advertising discounts and promotional expenses, regardless of the actual amount of all such charges, discounts and
 expenses. Except as specifically provided herein, no deductions of any kind or nature shall be made including without limitation
 for cash or other discounts, commissions, uncollectible accounts, shipping, handling or processing charges, or for fees or expenses
 of any kind which may be incurred by Licensee in connection with the use, sale or exploitation of the Property or the exercise by
 Licensee of its rights under this Agreement. Notwithstanding the foregoing, on sales of Articles made by or on behalf of Licensee
 to customers located outside the United States, Licensee shall pay to the Inventor a royalty as determined pursuant to the provisions
 of this Section 7) or an amount equal to the royalty paid on the sale of the same Articles to U.S. customers, whichever is greater.

c) Licensee
 shall not be liable for any royalties hereunder for any reasonable quantity of the Article(s) (not to exceed 1% of the production
 quantity) which it may distribute in connection with the promotion of the Articles such as for review, sample, advertising, publicity,
 or similar purposes.

d) Licensee
 may grant a Sublicense (as defined below) of the rights granted pursuant to this Agreement for exploitation of the Property outside
 the United States, provided Licensee obtains Inventor's prior written consent for each sublicense or renewal thereof, such
 consent not to be unreasonably withheld. As used herein, a "Sublicense" is any agreement or arrangement under which the
 Property is licensed to or exploited by a third party in any way other than an agreement under which a third party purchases finished
 Articles from Licensee or for purposes of re-sale. If Licensee grants any approved Sublicense of the rights granted to Licensee under
 this Agreement, Licensee shall pay to Inventor a royalty equal to fifty percent (50%) of all gross revenues or consideration, however
 designated, received by Licensee in connection therewith, including any advances or guarantees. No Sublicense shall extend beyond
 the Term of this Agreement or shall otherwise be inconsistent with the terms of this Agreement. Any Sublicense granted in violation
 of this provision shall be void and shall be considered a material breach of this Agreement.

e) For
 purposes of interpretation throughout this Agreement, every item that embodies the Property or any part thereof; that is derived
 from, based on, or adapted from the Property or any Article; that is an accessory for or otherwise packaged, offered, marketed, sold,
 or distributed in conjunction with an Article (including, without limitation, those made on an upsell or continuity basis whether
 embodying the Property or not); or that otherwise trades on the goodwill associated with the Property or Articles shall be deemed
 within the scope of and subject to the royalty obligations of this Agreement. For purposes of this Agreement, (i) sales made on an
 "upsell" basis shall mean sales of additional merchandise beyond the basic Article offering to a customer at the time
 of the customer's initial purchase, and (ii) sales made on a "continuity" basis shall mean sales of additional
 merchandise to a customer after such customer's initial purchase of an Article.

8) <u>MINIMUM ROYALTY GUARANTEE.</u> Licensee agrees to pay Inventor minimum guaranteed royalty payments under this Agreement in the amount and pursuant to the payment schedule set forth in Attachment A (the "Minimum Royalty Guarantee"), a portion of which shall be payable as an advance upon execution of this Agreement (the "Advance"). The Advance may be applied toward royalty payments under this Agreement until recouped by Licensee, but is otherwise nonrefundable. The Minimum Guaranteed Royalty is nonrefundable and non-recoupable.

9) <u>ROYALTY PAYMENTS AND REPORTS</u>.

a) Payments due under Sections 7) and 8) shall be made within thirty (30) days after the last day of each calendar quarter for amounts accruing during the preceding calendar quarter. Except as otherwise provided in Attachment A, all payments to Inventor under this Agreement shall be remitted as follows: 50% to Taylored Concepts and 50% to ProToyTypes. All payments shall be by wire transfer of immediately available funds to the accounts designated by Inventor, with costs of transmission paid by Licensee.

b) Each calendar quarter Licensee shall furnish to Inventor at the address in Section 24), a statement certified by an officer of Licensee to be accurate, showing on a country-by-country basis the number, description and sales price for each Article and all deductions taken in computing Net Sales, specifying the amount of each type of deduction. Such statements shall be furnished to Inventor whether or not any of the Articles have been distributed and/or sold during the quarter for which such statement is due.

10) <u>CONVERSION OF CURRENCY.</u> All payments to Inventor under this Agreement shall be in United States dollars. If any sales are made in currencies other than United States dollars, Licensee shall convert the amounts payable hereunder on sales of Articles in each country to U. S. dollars, at the most favorable rate of exchange available for the amount and type of transaction involved as of the last business day of the applicable royalty period.

11) <u>INSPECTION OF RECORDS</u>. Licensee shall keep and maintain, or cause to be kept and maintained, accurate books of account and records of sales of Articles pursuant to this Agreement. Inventor and its representatives shall have the right at reasonable times to examine such books of account and records during the Term and within five (5) years after the close of each applicable royalty period. Such right of examination shall include the rights to audit and to make copies of or extracts from such books and records. If any audit of Licensee's books and records indicates that royalties due have been underpaid, Licensee shall promptly pay Inventor the shortfall with interest from the date originally due. If an audit reveals an underpayment of five percent (5%) or more, Licensee will, in addition to the shortfall with interest from the date originally due, reimburse Inventor for its costs and expenses of such audit. Time is of the essence regarding all payments to Inventor under this Agreement. Late payments, and all payments specified to include interest, will bear interest at the rate of one percent (1%) per month or the highest rate permitted by law, whichever is lower.

12) <u>LICENSEE'S INDEMNITY</u>

a) Licensee shall indemnify and defend Taylored Concepts, ProToyType and their respective officers, directors, members, employees and agents and hold each of them harmless from and against all actions, claims, suits, proceedings, losses, damages, costs, liabilities, attorney's fees and other expenses which may be suffered, incurred or paid by reason of or arising out of Licensee's or any sub- licensee's (i) representation, manufacture, advertising, packaging, labeling, promotion, offering for sale, sale or distribution, instructions or directions relating in any way to the Articles or the Property; (ii) alleged or actual defects, including, but not limited to manufacturing and design defects, in the Articles; (iii) any allegedly unauthorized use of any patent, process, idea, method, device, copyright, trademark, trade dress, trade secret, confidential information or other intellectual property, personal, proprietary or contractual right of any third party by Licensee in connection with the Property or Articles (except only for claims covered by Section 13) below); (iv) the breach or claimed breach of any warranty, representation or obligation made by Licensee to Inventor in this Agreement or Licensee's performance under this Agreement; or (v) out of any violation or alleged violation by Licensee of any law, rule, regulation or provision of this Agreement.

b) Licensee shall obtain and maintain product liability insurance providing protection for the parties indemnified in Section 12)a) against any claims or causes of action arising out of any alleged defect in an Article as designed, manufactured, distributed or otherwise disposed of by Licensee or sub-licensees, at least in the amount of $2,000,000 single limit, naming each of the parties indemnified in Section 12)a) as an additional insured. Licensee shall provide Inventor with a certificate of insurance to this effect indicating that Inventor will receive thirty (30) days prior written notification of any termination, cancellation or amendment to such insurance coverage. Failure to maintain said insurance shall be deemed a default by Licensee.

13) <u>INVENTORS' INDEMNITY</u>. Inventor shall indemnify and hold harmless Licensee from and against any damages, costs, and attorneys' fees resulting from any breach of Inventor's representations and warranties in this Agreement; provided, however that the maximum amount due from Inventor under this Section 13), including attorneys' fees incurred by Licensee, shall not exceed fifty percent (50%) of the royalties due Inventor from sales of affected Articles in the country or territory affected by the claim from the date that Licensee notifies Inventor of the existence of such a claim as made in writing by a third party. After the commencement of an actual lawsuit against Licensee that is within the scope of this Section 13), Licensee may place fifty percent (50%) of the royalties thereafter due Inventor from sales of Articles subject to the claim in the country or territory where the suit has been filed in a separate interest-bearing account (the "Escrow Account"). Licensee may draw against the Escrow Account to satisfy its reasonable expenses of defending such suit paid to outside counsel and third parties and of any judgment or settlement made therein. If the Escrow Account is insufficient to pay the then-current defense obligations, Licensee may advance funds to the Escrow Account and shall be reimbursed as payments are credited thereto. Inventor's liability to Licensee under this Section 13) shall not extend beyond the loss of royalties that have been deposited in the Escrow Account; and Inventor's liability to Licensee under this Agreement under any cause of action or theory or recovery shall be limited to the aggregate of sums paid or payable to Inventor hereunder. After a suit has been concluded by settlement or otherwise, any balance remaining in the Escrow Account shall be paid to Inventor and all future royalties due to Inventor shall be paid to Inventor as they would otherwise become due.

14) <u>INFRINGEMENTS</u>. Licensee shall promptly inform Inventor of any third-party infringement of any of the rights granted to it by this Agreement. Inventor will, within sixty (60) days, notify Licensee of its election to prosecute or not file a suit for infringement. If Inventor prosecutes the suit, it may select legal counsel and shall pay all the legal fees and costs of prosecution and all sums recovered, whether from damage awards, settlements or otherwise, shall be retained exclusively by Inventor. If Inventor elects not to prosecute an infringement, Licensee may do so after notice to Inventor of that intention. Licensee may then select legal counsel and shall bear all the legal fees and cost subject to reimbursement from any recovery in the suit. All sums recovered in a suit prosecuted at the expense of Licensee shall be retained exclusively by Licensee but shall, after recovery of Licensee's costs and expenses, be deemed Net Sales for purposes of computing a royalty due Inventor.

15) <u>INTELLECTUAL PROPERTY RIGHTS</u>.

a) Licensee hereby acknowledges Inventor's proprietary rights in and to the Property and recognizes the exclusive right of Inventor to (i) grant rights to use said Property and (ii) control the use thereof. Licensee will be responsible for securing registration of any mutually agreed trademarks, copyrights and (except only as provided in Section 15)b) below) patents in connection with the Property and individual Articles, but only with respect to the Articles in the Territory and only with Inventor's prior written consent. Licensee agrees that it shall be responsible for all costs and expenses in connection therewith. Inventor agrees that it will provide all reasonable assistance requested by Licensee in connection with the securing of such registrations. Licensee will provide Inventor with prompt written reports as to the status of any such registrations. Inventor expressly disclaims all representations and warranties, express or implied, that any United States or foreign governmental agency or body, including but not limited to the U.S. Patent and Trademark Office, has granted, will grant, or can grant any patent, trademark, or other legal protection relating to the Item. All amounts due Inventor hereunder shall be paid by Licensee without regard to whether any patent, trademark or other legal protection for the Item exists, or will be applied for or granted.

&nbsp;&nbsp;&nbsp;&nbsp;b) Inventor
 shall have the right to file, at Inventor's discretion and expense, a provisional United States patent application covering
 the Property ("PPA"). If Inventor elects for file a PPA, Licensee agrees to file a non-provisional patent application
 in the United States based on the PPA and to use commercially reasonable efforts, and to bear the expense of prosecuting, such patent
 application and maintaining any issued patent during the Term. If Licensee desires to obtain patent protection for the Articles in
 any country other than the United States, Licensee may, upon notice to Inventor, apply for such patent protection at its own expense.
 All such applications shall identify the same individuals as inventors as are identified under the PPA. Licensee shall provide Inventor
 with no less than sixty (60) days written notice before abandoning any application for a patent or other protection or ceasing to
 undertake all things necessary to continue any patent or legal protection, including but not limited to the payment of maintenance
 fees, so that Inventor may have an opportunity to assume such. Each party agrees to keep the other fully advised and informed of
 the progress of any patent or industrial design applications, and to provide copies of said applications and office actions and amendments
 thereto as soon as such are available.

16) <u>RESTRICTIONS</u>. Licensee agrees to make no use of the Property other than as permitted hereunder, and both during and after the Term of this Agreement Licensee agrees that it will make no use of any property which in Inventor's sole judgment is confusingly similar to the Property. Licensee agrees that in using the Property, it will in no way represent that it has any right, title or interest in or to the Property or in any application or registration therefor which may be granted, or in any property similar thereto, other than those expressly granted under this Agreement. Licensee will not, except as expressly permitted by this Agreement, register or attempt to register the Property or any element thereof, including but not limited to, registration as a trademark or copyright, either alone or in combination with any word, name, symbol, device or character, or aid or abet anyone else in doing so, and Licensee agrees that any use, application or registration in breach of this covenant will inure to the benefit of Inventor and Licensee further agrees to assign all rights, title and interest in and to any such application or registration to Inventor.

17) <u>MARKINGS</u>. The Articles and the packaging, instructions, advertising materials, and other documentation for the Articles shall include such markings and notices as required by applicable law; and, if requested by Inventor, shall include notices (such as patent markings if legally permitted) as deemed reasonably necessary by Inventor, as well as attribution to Inventor as the owner or licensor of the Property.

18) <u>ATTORNEY'S FEES</u>. The prevailing party in any action brought to enforce the terms of this Agreement shall be entitled to recover from the other party its reasonable costs and necessary disbursements and attorney's fees incurred in connection therewith.

19) <u>BREACH</u>. The following shall constitute a breach of this License Agreement and the Licensee shall be deemed to be in default thereof:

&nbsp;&nbsp;&nbsp;&nbsp;a) Licensee
 fails to make any payment to Inventor when due, or fails to make any report required by this Agreement or makes a false report,

b) Licensee
 fails to maintain product liability insurance as required by this Agreement,

&nbsp;&nbsp;&nbsp;&nbsp;c) Licensee
 fails to commence distribution and sale of commercial quantities of the Articles in any country of the Territory by the Marketing
 Date or, if no Marketing Date is specified for a given country, within one (1) year of the Marketing Date, or thereafter during any
 six (6) month period Licensee does not ship commercial quantities of Articles to customers located in that country,

d) Licensee
 discontinues the marketing, sale, distribution or exploitation of the Property. Non-inclusion of any Article in the catalog of Licensee
 or any authorized sub-licensee shall be conclusive evidence of discontinuance of distribution and sale of said Article by Licensee.

e) Violation
 of any of Licensee's obligations pursuant to this Agreement,

f) In
 the event that a voluntary petition of bankruptcy is filed by Licensee, or an involuntary petition of bankruptcy is filed against
 Licensee and is not dismissed within sixty (60) days thereafter, or if Licensee shall be adjudged insolvent, or if an assignment
 shall be made of Licensee's property for the benefit of creditors or in the event of any other circumstances which prevents
 effective performance by Licensee under this Agreement, then in any such event, the license granted by this Agreement shall terminate.

20) <u>TERMINATION</u>. The parties shall have the right to terminate this Agreement as follows:

a) Either party shall have the right to terminate the Agreement at any time if the other party breaches any of its warranties, representations or material obligations hereunder and such breach is not cured within thirty (30) days after written notice from the non-breaching party, provided, however, that the cure period for the first breach related to non-payment of any amount due Inventor shall be ten (10) days and any subsequent breach related to non-payment shall be two (2) days. Notwithstanding the foregoing or anything to the contrary contained herein, if Licensee commits three (3) or more material breaches of any nature during the Term of this Agreement, as to which Inventor has given notice pursuant to this Section 20)a), Inventor may terminate the Agreement upon the occurrence of any additional breach by giving Licensee written notice thereof and no cure period shall apply.

b) Inventor shall have the right to terminate this Agreement without any cure period if Licensee: (i) terminates or suspends its business; (ii) fails to pay royalties when due or fails to accurately report Net Sales more than twice in any calendar year, even if cured pursuant to Section 20)a) hereof; (iii) makes an assignment for the benefit of creditors; (iv) becomes subject to any voluntary or involuntary order of any governmental agency involving the recall of any of the Articles because of safety, health, or other hazards or risks to the public; (v) fails to maintain or obtain product liability insurance as required by the provisions of this Agreement; (vi) attempts to assign or sublicense rights without the permission of Inventor; or (vii) fails to comply with any of the exploitation requirements set forth in Section 6) hereof (provided that if the requirements of Section 6) are not met or maintained in only some countries, the termination and reversion shall be limited to those countries only).

&nbsp;&nbsp;&nbsp;&nbsp;c) Inventor
 shall have the right to terminate the Agreement if at any time Licensee ceases the active exploitation of the Property. Licensee's
 failure to display Articles at either the annual American International Toy Fair in New York City or HKTDC Hong Kong Toys & Games
 Fair in any calendar year or the failure to include the Articles in Licensee's catalog shall be considered a cessation of active
 exploitation for purposes of this Section 21)e).

d) Inventor
 shall have the right to terminate this Agreement prior to the commencement of the Renewal Term by providing written notice to Inventor
 no less than thirty (30) days prior to the commencement thereof.

e) Inventor
 shall have the right to terminate this Agreement with respect to any class or category of the Distribution Channels into which Licensee
 has not sold at least ten thousand (10,000) units of the Articles by December 31, 2022 or in any calendar year thereafter.

21) <u>EFFECT OF TERMINATION</u>

a) Upon termination, expiration or cancellation of this Agreement, all rights granted to Licensee by Inventor will automatically and without further notice revert to Inventor, including specifically, but not limited to, any copyrights, copyright applications, trademarks, trademark applications, patents, patent applications, design patents, design patent applications, all merchandising rights, licensing rights, the rights to the name of Property and any of the Articles therein, all goodwill and all other rights associated with the Property and the Articles whether obtained by Inventor or Licensee. Licensee shall return all such rights free and clear of any and all liens and encumbrances.

b) Licensee will immediately return to Inventor all designs, drawings, sketches, models, prototypes, digital files, production specifications, market studies or analyses or other similar material supplied by Inventor or developed by Licensee in connection with the production or marketing of the Property and the Articles.

c) Licensee agrees that if this Agreement is terminated under any of its provisions, Licensee will not itself, or through others, thereafter manufacture and sell any of the Articles or use any of the names associated with the Property or the Articles.

&nbsp;&nbsp;&nbsp;&nbsp;e) So
 long as this Agreement is not terminated by Inventor as the result of any uncured breach or default of Licensee, Licensee shall have
 the non-exclusive right to sell all inventory of Articles existing at the time of termination for ninety (90) days after termination
 subject to the payment of royalty herein. Inventory not disposed of within ninety (90) days shall be destroyed by Licensee and Licensee
 will provide to Inventor written certification of such destruction.

f) Licensee
 warrants that it will not lease, sell, or permit the use of any molds, tools or tooling used in the manufacture or production of
 any Article associated with the Property by any individual or entity that is not licensed by Inventor or sublicensed by Licensee
 in accordance with Section 7)d) of this Agreement to produce, distribute and sell the Property. Upon expiration, termination or cancellation
 of this Agreement, Inventor will have the right to purchase from Licensee any tools, molds or tooling aids used by Licensee in connection
 with the Articles at Licensee's amortized book value thereof or their fair market scrap value, whichever is lower.

22) <u>SUCCESSORS IN INTEREST</u>. Licensee may not assign, transfer, sublicense or delegate its rights or obligations under this Agreement without the prior written consent of Inventor, which consent shall not be unreasonably withheld. Any assignment or transfer in violation of this Section shall be void. This Agreement shall be binding upon and shall inure to the benefit of parties, their successors, heirs, executors, administrators and permitted assigns.

23) <u>ENTIRE AGREEMENT; AMENDMENTS</u>. This Agreement sets forth the entire agreement of the parties with respect to the Property. No modification or amendments to this Agreement shall be effective unless in writing and signed by all parties. Attachment A in its entirety is incorporated by reference in this agreement and forms an integral part thereof.

24) <u>NOTICES</u>. All notices hereunder, including but not limited to notices of termination, shall be given in writing by overnight delivery service where proof of delivery may be obtained addressed by either party to the other at their respective addresses first set forth above, or such other address as may be specified from time to time by notice in accordance with this Section 24).

25) <u>BUSINESS FORECAST/MARKETING MATERIALS</u>

a) During the Term, Licensee will, upon Inventor's written request, provide Inventor with a forecast of its estimated Net Sales of the Articles for the then-current calendar year and will, during such calendar year, advise Inventor of any material changes in such forecast.

b) Upon start of production of each SKU of Articles, Licensee shall send Inventor 10 samples (5 each to Taylored Concepts and ProToyType) of the individual Articles which Licensee is then marketing. In addition, Inventor will have the right to purchase additional reasonable quantities at Licensee's cost.

c) During the Term, Licensee shall send Inventor two (2) copies of each edition of its catalog and price list containing reference to Property or Articles.

&nbsp;&nbsp;&nbsp;&nbsp;d) If
 Licensee produces any television commercials or social media or other digital advertisements or promotional materials for promotion
 of Property or Articles, it will provide three (3) copies of each such commercial or materials to Inventor free of charge.

26) <u>GOVERNING LAW AND FORUM</u>. The validity and interpretation of this Agreement and rights and duties of the parties shall be governed by the internal laws of the state of New Jersey without regard to its conflict of laws principles. All disputes under or relating to this Agreement shall be resolved exclusively in the state or federal courts located in the state of New Jersey, and the parties irrevocably submit to the jurisdiction thereof, waive any objections relating to venue, and agree to service of process by any manner specified for notices in this Agreement.

27) <u>MANNER OF EXECUTION</u>. This Agreement may be executed in one or more counterparts, each of which shall be an original, but all of which together shall constitute one agreement binding on all the parties hereto notwithstanding that all such are not signatories to the same counterpart. Each of the parties agrees that a photographic or facsimile copy of the signature evidencing a party's execution of this Agreement shall be effective as an original signature and may be used in lieu of the original for any purpose.

28) <u>LIABILITIES</u>. Notwithstanding anything to the contrary contained herein, the liability of each of Taylored Concepts and ProToyType to Licensee under or in connection with this Agreement, if any, under any theory of liability, shall not be joint and several but shall instead be limited to their proportional respective interests in the royalty payments made by Licensee under this Agreement as reflected in Section 9)a) above.

IN WITNESS THEREOF, the parties have executed this agreement as of the date first set forth above.

---

| | | | |
|:---|:---|:---|:---|
| TAYLORED CONCEPTS, LLC | TAYLORED CONCEPTS, LLC | PROTOYTYPE, LLC | PROTOYTYPE, LLC |
| By: | */s/ Lee Ann Taylor* | By: | */s/ Carmine Capone* |
| Lee Ann Taylor | Lee Ann Taylor | Carmine Capone | Carmine Capone |
| President | President | Co-Owner | Co-Owner |

---

---

| | | |
|:---|:---|:---|
| SRM ENTERTAINMENT INC | SRM ENTERTAINMENT INC |  |
| By: | */s/ Taft Flittner* | |
| Name: | Taft Flittner |  |
| Title: | President |  |

---

**<u>ATTACHMENT A</u>**

**PROPERTY:** "Sip With Me" (working title) Drinking Cup

**ARTICLES:** Patented Straw and 3D character/environment (possible positioning on top of drink lid) configured so as to allow liquid/drink to flow through straw to consumer at same time as liquid flows through 3D character/article. This configuration makes it look like the character/article is drinking liquid at same time as consumer.

**DISTRIBUTION CHANNELS:** Theme Parks, Traveling Entertainment Shows, Themed Restaurants, Convenience Stores, Mass Market Retail

**TERRITORY:** Worldwide

**MARKETING DATE:** June 30, 2022

**ROYALTY RATE: 5%**

**MINIMUM ROYALTY GUARANTEE:**

● <u>Initial Term:</u> $7,500, payable $5,000 as an Advance on execution of Agreement and the balance payable thirty (30) days after the end of the Initial Term to the extent not paid as earned royalties during the Initial Term

● <u>Renewal Term:</u> $15,000, payable thirty (30) days after the end of the Renewal Term to the extent not paid as earned royalties during the Renewal Term

## Exhibit 10.9

**Exhibit 10.9**

**ADDENDUM TO LICENSING AGREEMENT**

This Addendum ("Addendum") to the Licensing Agreement dated September 1, 2021 (the "Agreement") between Taylored Concepts, LLC. ("Taylored Concepts"), ProToyTypes, LLC. ("ProToyTypes") and SRM Entertainment, Inc. ("SRM") is made this 18<sup>th</sup> day of June 2022 by and between Taylored Concepts, ProToyTypes and SRM. All capitalized terms used and not defined in this Addendum shall have the meaning given to them in the Agreement.

**Recitals:**

WHEREAS, pursuant to the Agreement, Taylored Concepts and ProToyTypes licensed the Property to SRM;

WHEREAS, at the time the Agreement was entered into, Taylored Concepts, ProToyTypes and SRM shared certain assumptions regarding the amount of time necessary to accomplish the goals of the Agreement;

WHEREAS, the parties desire to amend and supplement the Agreement to set forth certain binding commitments relating to the forgoing premises;

NOW THEREFORE, in consideration of the premises and of the mutual representations, warranties, covenants and agreements set forth in this Addendum, Taylored Concepts, ProToyTypes and SRM hereby agree as follows:

1. <u>Amendment of Term</u>. Section 2) of the Agreement captioned "TERM" is hereby deleted in its entirety and replaced with the following;

<u>TERM</u>. Unless sooner terminated in accordance with Section 20), the "Initial Term" of this Agreement shall commence as of the Effective Date and continue through and including December 31, 2025 (the "Initial Term"). Thereafter, this Agreement shall automatically renew for subsequent and consecutive one (1) year periods (each a "Renewal Term") provided that (i) Licensee has, during the Initial Term or then-current Renewal Term, as applicable, generated earned royalties sufficient to cover the applicable Minimum Royalty Guarantee without the necessity of making a shortfall payment, and (ii) Licensee is actively selling at least three (3) SKUs of the Articles. As used herein, "Term" means the Initial Term and, if applicable, any Renewal Terms.

2. <u>Minimum Royalty Guarantee</u>. In Attachment A to the Agreement all text under the heading "MINIMUM ROYALTY GUARANTEE" is hereby deleted in its entirety and replaced with the following:

● <u>Initial Term</u>. $52,500 payable as follows:

○ $7,500 on Net Sales that occur from the Effective Date through December 31, 2022, payable $5,000 as an Advance on execution of Agreement and the balance no later than January 30, 2022 to the extent not paid earlier as earned royalties.

○ $15,000 on Net Sales that occur during calendar year 2023, payable no later than January 30, 2024 to the extent not paid earlier as earned royalties.

Addendum to Licensing Agreement for Taylored Concepts, ProToyTypes & SRM June 2022

○ $15,000 on Net Sales that occur during calendar year 2024, payable no later than January 30, 2025 to the extent not paid earlier as earned royalties.

○ $15,000 on Net Sales that occur during calendar year 2025, payable no later than January 30, 2026 to the extent not paid earlier as earned royalties.

● <u>Renewal Terms</u>. $15,000, payable thirty (30) days after the end of each Renewal Term to the extent not paid as earned royalties during that Renewal Term.

There shall be no cross-collateralization or carryover of excess royalty payments from one calendar year to another during the Initial Term or by or between the Initial Term or any Renewal Terms.

3. <u>Licensed Articles</u>. The parties acknowledge that all line extensions and items of merchandise that utilize characters or brands associated with the Licensed Articles are intended to be treated as Licensed Articles in accordance with Section 7)e) of the Agreement, including, without limitation, all items that use the "SIP WITH ME" or derivative trademarks or branding, or that use characters or artwork for the Licensed Articles such as, without limitation, the items depicted in Exhibit A attached hereto and incorporated herein by this reference. All line extensions will be paid a 2% royalty fee.

4. <u>Effect of Termination</u>. The heading "EFFECT OF TERMINATION" in Section 21 of the Agreement is hereby deleted and replaced with "EFFECT OF TERMINATION, EXPIRATION OR CANCELLATION" and all terms applicable to termination in Section 20 shall be interpreted as equally applicable to expiration or cancellation of the Agreement.

5. Except as specifically amended by this Addendum, the Agreement shall remain in full force and effect.

6. This Addendum may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument. Execution and delivery of this Agreement by exchange of facsimile copies bearing the facsimile signature of a party hereto shall constitute a valid and binding execution and delivery of this Agreement by such party. Such facsimile copies shall constitute enforceable original documents.

**IN WITNESS WHEREOF,** the parties have executed the Agreement as of the date first above written.

---

| | |
|:---|:---|
| **SRM Entertainment, Inc.** | **SRM Entertainment, Inc.** |
| By: | */s/ Taft Flittner* |
|  | Taft Flittner, President |
| **Taylored Concepts, LLC** | **Taylored Concepts, LLC** |
| By: | */s/ Lee Ann Taylor* |
|  | Lee Ann Taylor, President |
| **Prototype LLC** | **Prototype LLC** |
| By: | */s/ Carmine Capone* |
|  | Carmine Capone, Co-Owner |

---

Addendum to Licensing Agreement for Taylored Concepts, ProToyTypes & SRM June 2022

**<u>Exhibit A</u>**

---

| | |
|:---|:---|
| ![](ex10-9_001.jpg) | ![](ex10-9_002.jpg) |
| ![](ex10-9_003.jpg) | ![](ex10-9_004.jpg) |

---

Addendum to Licensing Agreement for Taylored Concepts, ProToyTypes & SRM June 2022