# EDGAR Filing Document

**Accession Number:** 0001956744
**File Stem:** 0001493152-26-012723
**Filing Date:** 2026-3
**Character Count:** 432957
**Document Hash:** 95496872e1ac666e260e86b8153f43fc
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001493152-26-012723.hdr.sgml**: 20260325

**ACCESSION NUMBER**: 0001493152-26-012723

**CONFORMED SUBMISSION TYPE**: 10-K

**PUBLIC DOCUMENT COUNT**: 76

**CONFORMED PERIOD OF REPORT**: 20251231

**FILED AS OF DATE**: 20260325

**DATE AS OF CHANGE**: 20260325

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Tron Inc.
- **CENTRAL INDEX KEY:** 0001956744
- **STANDARD INDUSTRIAL CLASSIFICATION:** FINANCE SERVICES [6199]
- **ORGANIZATION NAME:** 09 Crypto Assets
- **EIN:** 320686534
- **STATE OF INCORPORATION:** NV
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-41768
- **FILM NUMBER:** 26793627

**BUSINESS ADDRESS:**
- **STREET 1:** 941 W. MORSE BLVD.
- **STREET 2:** SUITE 100
- **CITY:** WINTER PARK
- **STATE:** FL
- **ZIP:** 32789
- **BUSINESS PHONE:** 407-230-8100

**MAIL ADDRESS:**
- **STREET 1:** 941 W. MORSE BLVD.
- **STREET 2:** SUITE 100
- **CITY:** WINTER PARK
- **STATE:** FL
- **ZIP:** 32789

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** SRM Entertainment, Inc.
- **DATE OF NAME CHANGE:** 20221201

?xml version='1.0' encoding='ASCII'?

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON, D.C. 20549**

**FORM 10-K**

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended: December 31, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: **01-41768**

**<u>TRON INC.</u>**

(Exact name of registrant as specified in its charter)

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| | |
|:---|:---|
| **Nevada** | **32-0686534** |
| (State or other jurisdiction of | (I.R.S. Employer |
| incorporation or organization) | Identification) |

---

**941 W Morse Blvd**

**Suite 100**

**Winter Park, FL 32789**

(Address of principal executive offices, including zip code)

**407-230-8100**

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

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| | | |
|:---|:---|:---|
| Title of each class | Trading Symbol | Name of exchange on which registered |
| Common Stock, $.0001 par value per share | TRON | Nasdaq |

---

Securities Registered Pursuant to Section 12(g) of the Exchange Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ☐ No ☒

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such fi les). Yes ☒ No ☐

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

---

| | |
|:---|:---|
| Large accelerated filer ☐ |  |
| Non-accelerated filer ☒ | Smaller Reporting Company ☒ |
| Accelerated filer ☐ | 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 to Section 7(a)(2)(B) of the Securities Act. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of June 30, 2025, there were 27,425,983 shares of the registrant's common stock, par value $0.0001 per share, issued and outstanding, of these, 13,063,882 shares were held by non-affiliates of the registrant. The market value of securities held by non-affiliates was $101,245,086 as of June 30, 2025, based on the closing price of $7.75 for the registrant's common stock on June 30, 2025.

The number of shares outstanding of each of the registrant's classes of common stock, as of March 24, 2026, was 274,382,064.

**TABLE OF CONTENTS**

---

| | |
|:---|:---|
| [**PART I**](#G_001) | **4** |
| [**ITEM 1. BUSINESS**](#G_002) | **4** |
| [**ITEM 1A. RISK FACTORS**](#G_003) | **14** |
| [**ITEM 1B. UNRESOLVED STAFF COMMENTS**](#G_004) | **39** |
| [**ITEM 1C. CYBERSECURITY**](#G_005) | **39** |
| [**ITEM 2. PROPERTIES**](#G_006) | **40** |
| [**ITEM 3. LEGAL PROCEEDINGS**](#G_007) | **40** |
| [**ITEM 4. MINE SAFETY DISCLOSURES.**](#G_008) | **40** |
| [**PART II**](#G_009) | **41** |
| [**ITEM 5. MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY** **SECURITIES**](#G_010) | **41** |
| [**ITEM 6. RESERVED**](#G_011) | **41** |
| [**ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS**](#G_012) | **42** |
| [**ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**](#G_013) | **51** |
| [**ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA**](#G_014) | **51** |
| [**ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES**](#G_015) | **51** |
| [**ITEM 9A. CONTROLS AND PROCEDURES**](#G_016) | **52** |
| [**ITEM 9B. OTHER INFORMATION**](#G_017) | **52** |
| [**PART III**](#G_018) | **53** |
| [**ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE**](#G_019) | **53** |
| [**ITEM 11. EXECUTIVE COMPENSATION**](#G_020) | **57** |
| [**ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT**](#G_021) | **58** |
| [**ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE**](#G_022) | **59** |
| [**ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES**](#G_023) | **59** |
| [**PART IV**](#G_024) | **60** |
| [**ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES**](#G_025) | **60** |
| [**SIGNATURES**](#G_026) | **63** |

---

*[**Table of Contents**](#TOC_001)*<br>

This Annual Report on Form 10-K includes the accounts of Tron Inc. (formerly SRM Entertainment, Inc.), a Nevada corporation ("Tron"). References in this Report to "we", "our", "us". "Tron", or the "Company" refer to Tron Inc. and its consolidated subsidiary unless the context dictates otherwise.

**FORWARD LOOKING STATEMENTS**

Certain statements in this report, including information incorporated by reference, are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements reflect current views about future events and financial performance based on certain assumptions. They include opinions, forecasts, intentions, plans, goals, projections, guidance, expectations, beliefs or other statements that are not statements of historical fact. Words such as "will," "may," "should," "could," "would," "expects," "plans," "believes," "anticipates," "intends," "estimates," "approximates," "predicts," "forecasts," "potential," "continue," or "projects," or the negative or other variation of such words, and similar expressions may identify a statement as a forward-looking statement. Any statements that refer to projections of our future financial performance, our anticipated growth and trends in our businesses, our goals, strategies, focus and plans, and other characterizations of future events or circumstances, including statements expressing general optimism about future operating results and the development of our products, are forward-looking statements.

Although forward-looking statements in this Annual Report on Form 10-K reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by us. Consequently, forward-looking statements are inherently subject to risks and uncertainties and actual results and outcomes may differ materially from the results and outcomes discussed in or anticipated by the forward-looking statements. Factors that could cause or contribute to such differences in results and outcomes include, without limitation, those specifically addressed under the heading "Risk Factors" below, as well as those discussed elsewhere in this Annual Report on Form 10-K. Readers are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this Annual Report on Form 10-K. We file reports with the Securities and Exchange Commission ("SEC"). The public can read and copy any materials we file with the SEC at the SEC's Public Reference Room at 100 F Street, NE, Washington, DC 20549. You can obtain additional information about the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains an Internet site (www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, including us.

We undertake no obligation to revise or update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this Annual Report on Form 10-K. Readers are urged to carefully review and consider the various disclosures made throughout the entirety of this Annual Report on Form 10-K, which attempt to advise interested parties of the risks and factors that may affect our businesses, financial condition, results of operations and prospects.

*[**Table of Contents**](#TOC_001)*<br>

**PART I**

**ITEM 1. BUSINESS**

**General Overview**

Tron Inc. (formerly SRM Entertainment, Inc.), is a publicly traded company pioneering blockchain-integrated treasury strategies. As the public company with the largest TRON (TRX) tokens holdings, the Company is committed to transparency, long-term value creation and the adoption of decentralized financial tools. In addition, through our wholly owned subsidiary, the Company designs, develops, and manufactures custom merchandise which includes toys and souvenirs for the world's largest theme parks and other entertainment venues. Many of the Company's products are based on award winning multi-billion-dollar entertainment franchises that are featured in popular movies and books. The products are distributed worldwide at Walt Disney Parks and Resorts, Universal Parks and Destinations, United Parks and Resorts – SeaWorld, Six Flags and other attractions.

Tron Inc. is a Nevada corporation and was incorporated on April 22, 2022. SRM Entertainment Limited ("SRM Ltd"), a wholly owned subsidiary, is a limited company incorporated in the Hong Kong Special Administrative Region of the People's Republic of China on January 23, 1981, and was acquired by the Company on August 14, 2023. The consolidated companies are collectively referred to as the Company.

On June 16, 2025, we entered into the June Securities Purchase Agreement (as defined below) with Bravemorning (as defined below). On August 29, 2025, Bravemorning acquired 220,000,000 shares of the Company's common stock, par value $0.0001 (the "Common Stock"), via its exercise of June PIPE Warrants (as defined below) with total dollar amount of $110,000,000, and upon such acquisition, Bravemorning became the owner of approximately 86.6% of the Company's outstanding shares of Common Stock. Mr. Weike Sun, who is a director of the Company, is the sole shareholder of Bravemorning. Upon the August Warrant Exercise (as defined below) in connection with the June Securities Purchase Agreement (as defined below), Bravemorning also held 100,000 Preferred Stock Shares (as defined below), which are convertible into an additional 200,000,000 shares of Common Stock and which vote on an as-converted basis with the Common Stock; and Bravemorning's ownership of Common Stock and Preferred Stock Shares gave it an aggregate voting power of approximately 92.5%. As of March 18, 2026, Bravemorning holds an aggregate voting power of approximately 88.5%. Mr. Weike Sun, who is a director of the Company, is the sole shareholder of Bravemorning. See "*Recent Developments*" for more information on these transactions and also on the Employment Agreement Amendments, the Name Change, the Symbol Change and the Charter Amendment (all as defined below). These moves reflect the Company's broader strategic transformation and its commitment to aligning more closely with the TRON blockchain ecosystem, following the launch of its Tron-focused treasury strategy. The Company's ticker change to "TRON" reinforces its brand identity and positions it as a key corporate player in the rapidly evolving blockchain and digital asset economy.

On December 24, 2025, the Company entered into a Stock Purchase Agreement (the "December Investment") for $18 million of our restricted common stock with Black Anthem Limited owned by Justin Sun. The closing of the December Investment occurred on January 8, 2026. See "*Recent Developments*" for more information on this transaction.

**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").

**Business**

***Toy and Souvenir***

The Company 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.

**<u>Content Providers</u>**<u>:</u> We have licensing relationships with many established content providers, and our products appear in venues such as Walt Disney Parks and Resorts, Universal Studios, United Parks and Resorts (f/k/a SeaWorld), Cedar Fair, Six Flags and Herschend Family Entertainment and Merlin Entertainment. We currently have licenses with Smurfs, The ICEE Company and Zoonicorn LLC, from which we can create multiple products based on each character within. Content providers trust us to design, create and manufacture 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.

*[**Table of Contents**](#TOC_001)*<br>

**<u>Consumers</u>**: 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 innovative 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.

***TRX Tokens Treasury***

The TRX token is the governance token of the TRON network, which is used to pay for on-chain transaction fees, participate in network governance and incentivize validators who generate transaction blocks for the network. Users can also stake TRX tokens to vote for validators who facilitate the block validation process and receive staking rewards.

We believe that the TRX token is an attractive digital asset which can create long-term value for our shareholders by capitalizing on the global adoption of blockchain and digital innovation.

The Company has adopted a Treasury Reserve Policy ("Treasury Reserve Policy") which set out our treasury management and capital allocation strategies, under which our treasury reserve assets will consist of:

● cash and cash equivalents and short-term investments ("Cash Assets") held by us that exceed working capital requirements; and

● TRX tokens held by us, as the primary treasury holding asset on an ongoing basis, subject to market conditions and anticipated needs of the business for Cash Assets.

The TRX token is the native token of the TRON blockchain. As of March 18, 2026, the TRX token ranked number 6 by market valuation among all non-stablecoin crypto tokens globally. The Company's plan is to accumulate and hold TRX tokens in its treasury and stake substantially all TRX tokens to earn yield. The Company has been engaging primarily in liquid staking activities by staking TRX tokens in its treasury through JustLend DAO ("JustLend"), the leading decentralized finance ("DeFi") protocol on the TRON blockchain, whereby it stakes its digital assets (TRX tokens) into the JustLend protocol to support network operations and, in return, accrued network rewards. The JustLend platform generates yield through a combination of standard staking rewards (i.e. token rewards derived from delegating to super representative nodes) and "energy" rental income on the TRON blockchain (i.e. renting to other users the idle TRON "energy" resources entitled by TRX staking).

Under standard TRX staking mechanism, TRX stakers are able to participate in community governance by voting for super representatives. Yield from standard TRX staking generally refers to (1) energy and bandwidth obtained by users after staking TRX on the TRON blockchain and (2) the voting rewards in the form of TRX tokens obtained by users after voting for the super representatives. Energy rental generally refers to users earning rent by renting out the energy that is obtained by staking TRX on the TRON blockchain. According to the mechanism of the TRON blockchain, deploying or triggering smart contracts consumes energy; and if energy is insufficient, TRX token(s) will be burned to make up for the missing resources. Energy could be obtained by either staking TRX tokens or burning TRX tokens. Given the market demands, there are energy rental protocols in the market (such as JustLend Energy Rental), such that users can borrow energy without staking nor burning TRX tokens. Users who already have staked their TRX tokens on the TRON blockchain have the ability to lend their energy out to earn additional income.

The use cases of the TRX token include (but are not limited to):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) **Governance of TRON blockchain**: By staking their TRX token holdings, TRX token holders will be able to vote for super representative candidates. The top 27 super representative candidates with the highest votes will become the super representative nodes (the "SR") and be able to participate in validation and block production. The super representative candidates who rank 28th to 127th are called super representative partners (the "SR Partners"). Each of the SRs, SR Partners and other super representative candidates may initiate community proposals, but only SRs are entitled to vote for the proposals. As of March 18, 2026, the SRs of TRON blockchain include, among others, Google Cloud, Binance, HTX, Kraken, OKX, OKCoin Japan, Kiln, P2P.org, Nansen, and Abra Capital.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) **Transaction fees on TRON blockchain**: TRX token is primarily used to pay transaction fees on the TRON blockchain. Generally speaking, users of the TRON blockchain are required to utilize token resources (namely "bandwidth" and "energy") in their wallets to process transactions. Users can obtain such resources by either burning or staking TRX tokens.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) **Incentivizing SRs to maintain security and functionality of TRON blockchain:** Block generation rewards and voting rewards on the TRON blockchain are issued in the form of TRX token. An SR is entitled to block generation rewards, and voting rewards are distributed to both SRs and SR Partners.

The genesis supply of the TRX token was 100 billion. New tokens are generated currently at the rate of approximately 1.5% per annum as governance and block validation rewards. On the offsetting side, TRX token is burned by the users to pay transaction fees for on-chain activities. Consequently, the supply change of TRX token depends on how active the blockchain is. During the period from January 1, 2022 to March 18, 2026, TRX token has been in deflation at approximately 1.7% per annum. As of March 18, 2026, the supply of TRX token is approximately 94.8 billion. Currently there is no lock-up, and substantially all the TRX tokens are in circulation.

The TRON protocol, one of the largest blockchain-based operating systems in the world, offers public blockchain support of high throughput, high scalability, and high availability for all decentralized applications (DApps) in the TRON ecosystem.

The TRON mainnet was launched in June 2018. It marked the transition of TRX token from being an ERC-20 token on the Ethereum blockchain to the native governance token of TRON blockchain, an independent and standalone network.

*[**Table of Contents**](#TOC_001)*<br>

Through years of development, TRON blockchain has been uniquely positioned as the dominant settlement protocol for on-chain stablecoin payment. As of March 18, 2026, TRON had over 371 million in total user wallets globally, hosting approximately 86.4 billion in TRC-20 USDT (Tether) accounting for approximately 46.9% of total USDT circulation.

TRON block generation is secured and validated by a diverse group of super representative nodes globally including major industry players such as Google Cloud, Binance, HTX, Kraken, OKX, OKCoin Japan, Kiln, P2P.org, Nansen, and Abra Capital.

The Company holds the treasury tokens in a self-managed wallet (the "Treasury Wallet"). The board of directors of the Company (the "Board") has full control and access to the wallet, which was set up by BiT Global Trust Limited ("BiT Global"). BiT Global is a licensed Trust or Company Service Provider under the licensing regime administered by the Companies Registry of Hong Kong and a trust company registered under section 78(1) of the Trustee Ordinance (Cap. 29) of Hong Kong, and is therefore a regulated custodian.

The Treasury Wallet is safely kept in a secure location in Hong Kong controlled by BiT Global. It utilizes the proprietary technology and on-chain compliance monitoring services provided by BiT Global. Pursuant to the Self-Managed Wallet Services Agreement (the "BiT Global Services Agreement") entered into by the Company and BiT Global on June 26, 2025, BiT Global has set up the Treasury Wallet for the Company, licenses certain BiT Global technology, and provides monitoring services relating to on-chain wallet activities. The Company retains sole control of the Treasury Wallet and private keys in Hong Kong. Mr. Weike Sun and Mr. Zi Yang, our Directors, are authorized by the Board to make the arrangement for safeguarding and operating the private keys of the Treasury Wallet. Due to security considerations, the details of the private key arrangement are highly confidential and not for public disclosure. The Board is primarily responsible for verifying the existence of treasury token holdings. The Company's auditors also have inspected and verified the Treasury Wallet operations and the existence of the treasury token holdings. There currently is no insurance coverage on the treasury tokens.

The BiT Global Services Agreement contains customary provisions relating to fees, confidentiality, compliance with applicable law, indemnification, limitations of liability, and termination. The foregoing description of the BiT Global Services Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the BiT Global Services Agreement, which is incorporated herein by reference as Exhibit 10.30.

The Company has staked and plans to continue to stake TRX tokens in its treasury into Staked TRX (sTRX) tokens through JustLend, the leading DeFi protocol on the TRON blockchain which executes transactions through smart contracts, to accrue enhanced staking yield from both standard TRX staking and energy rental. JustLend is the DeFi staking platform designated by the Company to generate enhanced staking yield via the staked TRX token (sTRX). The Company has currently staked nearly 100% of the TRX tokens in its treasury into sTRX tokens. See *"Our TRX Tokens Holdings"* below. By holding sTRX tokens, the Company is able to accrue enhanced yields from both standard TRX staking and energy rental.

The staking rewards generated from staking TRX tokens into sTRX via JustLend are distributed according to the protocol's rules. Currently, 20% of the rewards are retained by the JustLend protocol as protocol revenue, while the remaining 80% are allocated to sTRX token holders on a pro-rata basis. BiT Global does not receive any portion of the staking rewards.

The staking of TRX tokens into sTRX tokens through JustLend was executed on the JustLend webpage. JustLend is a decentralized finance protocol, and the staking is governed by the Terms of Service of JustLend. There is no separate agreement between the Company and JustLend. The Company has not engaged in offline staking.

The TRX token is the native token of the TRON blockchain, and it serves as the utility token for various scenarios. The staked TRX token (sTRX) is a derivative token issued by the JustLend DAO protocol that represents the "staked" TRX tokens, and provides holders exposure to automatically accruing yield through standard TRX staking rewards and energy renting. Users can obtain sTRX tokens by staking TRX tokens on JustLend. The sTRX token is not fixed at a 1:1 conversion ratio with the TRX token; instead, the number of TRX tokens which can be exchanged from one sTRX token increases over time as rewards accumulate in the overall pool of staked tokens. As the voting rewards and energy rent accrue, the conversion ratio of the TRX token to the sTRX token increases gradually, so that the number of TRX tokens which can be obtained by users by unstaking and swapping from sTRX tokens back to TRX tokens increases accordingly. By holding sTRX tokens, the Company is able to accrue enhanced yields from both standard TRX staking and energy rental. For the avoidance of doubt, the sTRX token does not generate discrete staking rewards. Instead, the economic benefit of staking is reflected through a floating conversion rate between TRX and sTRX, which increases over time based on accrued protocol rewards. For comparison, the TRX token remains the native token of the TRON blockchain, and which can be used directly for transaction fee payments and community governance; whereas the sTRX token functions as a staking and yield-bearing certificate. On June 28, 2025 and August 28, 2025, 365,096,800 and 312,500,000 TRX tokens were converted into approximately 297,543,246 and approximately 252,133,646 sTRX tokens respectively, based on the real-time conversion ratio according to the JustLend webpage. According to the JustLend DAO documentation, users who unstake their sTRX must wait 14 days before they can withdraw the unstaked TRX by clicking "Withdraw" on the same page.

As of the date of this Annual Report, the Company does not have any material agreements with counterparties relating to the purchase or sale of TRX tokens. To date, the TRX tokens held in the Company's treasury were received (i) as payment in kind from the Company's controlling shareholder in connection with the issuance of Series B Preferred Stock and warrant shares in connection with the June Securities Purchase Agreement (as defined below); and (ii) as a result of the token sale and purchase transactions under the BGDL Token S&P Agreement (as defined below).

*[**Table of Contents**](#TOC_001)*<br>

Our TRX token strategy generally involves from time to time, subject to market conditions, (i) issuing debt or equity securities or engaging in other capital raising transactions with the objective of using the proceeds to purchase TRX tokens, and (ii) acquiring TRX tokens with our liquid assets that exceed working capital requirements. We intend to fund further TRX token acquisitions primarily through issuances of common stock and a variety of fixed-income instruments, including debt, convertible notes and preferred stock. As of March 18, 2026, our authorized capital stock consists of 1,000,000,000 shares of Common Stock, and 10,000,000 shares of preferred stock, par value $0.0001 per share (the "Preferred Stock"), of which 1,000,000 shares are designated as Series A Preferred Stock and 5,000 shares of the Series A Preferred Stock are designated as convertible, and 100,000 shares are designated as Series B Preferred Stock, of which 100,000, are designated as convertible

We view our TRX tokens holdings as long-term holdings and expect to continue to accumulate TRX tokens. We have not set any specific target for the amount of TRX tokens we seek to hold, and we will continue to monitor market conditions in determining whether to engage in additional financings to purchase additional TRX tokens. This overall strategy also contemplates that we may (i) enter into additional capital raising transactions that are collateralized by our TRX tokens holdings, and (ii) consider pursuing strategies to create income streams or otherwise generate funds using our TRX tokens holdings.

The primary focus of the business of the Company is the accumulation of TRX tokens with the goal to realize long-term value creation through price appreciation and staking yield. The sTRX token, being a derivative token that represents the "staked" TRX token, provides exposure to additional yield from standard TRX staking rewards and energy renting. The Company currently has no intention to use its TRX token reserve to support or finance its operating activities. However, the Company will not rule out the possibility of doing so in the future, subject to its business or financing needs. Further, save for the USDT (Tether) stablecoins received by the Company under the December Investment (as defined below), the Company currently does not plan to hold any crypto assets other than TRX tokens and sTRX tokens which were obtained from TRX staking.

***TRON Blockchain***

Founded in 2017 by Justin Sun, TRON is an open blockchain network that supports smart contracts and decentralized applications. Justin Sun oversaw development of the TRON blockchain prior to the establishment of TRON DAO in 2021.

The TRON blockchain is a public blockchain with high throughput, cost-efficient capacity which is widely used as decentralized infrastructure by stablecoins, decentralized finance (DeFi), and other decentralized applications (DApp). The TRON Virtual Machine (TVM) supports the deployment and execution of smart contracts, with the network operating under a Delegated Proof-of-Stake (DPoS) consensus mechanism which allows the holders of the blockchain's native tokens to participate in community governance by staking, voting and election of validators.

The latest major developments of the TRON blockchain include:

- In August 2025, the TRON community voted and approved the energy price amendment proposal, lowering the unit price of energy from 0.00021 TRX to 0.00010 TRX in August 2025 (Proposal #104), further reducing the transaction fees of the TRON blockchain. See "*Recent Developments – Lowering of Transaction Fees*" and "*Risk Factors - The price decrease of energy, a type of system resources on the TRON blockchain, could negatively affect the Company.*"

- In May 2025, TRON blockchain completed the GreatVoyage-v4.8.0 (Kant) upgrade. It aims at enhancing the blockchain's compatibility with Ethereum (following the Cancun upgrade) to make it easier for developers to migrate applications from Ethereum to TRON blockchain.

Justin Sun does not serve as an executive officer of the Company. More specifically, Justin Sun does not hold any officer position for the Company or any subsidiary thereof, he is not in charge of any business unit, and he does not perform any policy making functions. He acts solely in an advisory role as an independent contractor, pursuant to the terms of the Sun Advisory Agreement, as defined and further described below.

*Our TRX Tokens Holdings*

Upon completion of the June PIPE Offering (as defined below), the Company received 365,096,845 TRX tokens, being part of the Consideration Tokens (as defined below) from Bravemorning (as defined below). Upon completion of the August Warrant Exercise (as defined below), the Company received an additional 312,500,100 TRX tokens, being the Warrant Exercise Tokens (as defined below) from Bravemorning. As of March 18, 2026, the Company holds approximately 9,769,626 TRX tokens and approximately 549,676,892 sTRX tokens.

An aggregate of 365,096,800 TRX tokens of the Consideration Tokens held by the Company have been "staked" on JustLend, a decentralized finance (DeFi) protocol, on June 28, 2025 in exchange for approximately 297,543,246 Staked TRX (sTRX) tokens. 312,500,000 TRX tokens of the Warrant Exercise Tokens held by the Company have been "staked" on JustLend on August 28, 2025 in exchange for approximately 252,133,646 sTRX tokens. "Staking" is a process commonly used in the blockchain industry that allows network participants to earn rewards by locking their tokens in wallets. The sTRX token is a derivative token that represents the "staked" TRX tokens, which can automatically generate yield (through the combination of standard TRX staking rewards and energy renting) for the token holders. The sTRX token does not generate discrete staking rewards. Instead, the economic benefit of staking is reflected through a floating conversion rate between TRX and sTRX, which increases over time based on accrued protocol rewards.

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Therefore, out of the 677,596,945 TRX tokens received by the Company from the June PIPE Offering and the August Warrant Exercise, the Company has staked 677,596,800 TRX tokens (which is nearly 100% of the TRX tokens received) into approximately 549,676,892 sTRX tokens. It is necessary for the Company to retain a small portion of TRX tokens for the on-chain transaction fees payment.

As of March 18, 2026, the Company has not yet had any TRX token dispositions.

The Company intends to substantially utilize its excess cash to accumulate TRX tokens, and execute the relevant transactions (including potential future disposals) through a variety of leading global trading platforms to ensure the execution quality. The Company's digital asset treasury (DAT) strategy is to buy and hold TRX tokens without hedging, as we believe that market timing generally is counter productive longer term.

*The Company and the TRON Ecosystem*

While there are crossover relationships between certain directors of the Company and the TRON blockchain ecosystem (Weike Sun is the father of Justin Sun, the founder of TRON, Zhihong Liu has been a senior advisor to TRON DAO, and Zi Yang is associated with Tronscan, the official internet explorer for the TRON blockchain), there is no direct relationship between the Company and the TRON DAO. The Company's name merely recognizes that it has adopted a treasury strategy focused on TRX, the native token of the TRON blockchain. The TRON DAO, by contrast, is the decentralized autonomous organization that, since 2021, facilitates the development of the TRON blockchain network. Justin Sun, our advisor, founded TRON in 2017 and oversaw its development prior to the establishment of TRON DAO in 2021. Super Representatives, elected by the community of TRX holders and acting by consensus are the sole decision makers for TRON DAO. While it is possible that developments to the TRON blockchain, as directed and agreed by TRON DAO, could affect consumer use of or market perception about TRX, and thus impact our business, the relationship to the Company is incidental.

**Recent Developments**

*May 2025 PIPE Offering*

 

On May 21, 2025, the Company entered into a Securities Purchase Agreement (the "May Securities Purchase Agreement") with an institutional investor for a private investment in public equity (the "May PIPE Offering") of 5,000 shares of its Series A Convertible Preferred Stock par value $0.0001 per share (the "Series A Preferred Stock"), convertible into 8,928,571 shares of Common Stock, at a conversion price of $0.56 per share of Series A Preferred Stock, and an aggregate of 8,928,571 warrants (the "May PIPE Warrants") to acquire up to 8,928,571 shares of Common Stock, subject to beneficial ownership limitations set by the holder. The purchase price for one unit (consisting of one share of Series A Convertible Preferred Stock convertible into approximately 1,785 shares and the same number of warrants) was $1,000. The May PIPE Warrants issued in the May PIPE Offering are exercisable immediately upon issuance at an exercise price of $0.65 per share and will expire two years from the date of issuance.

The May PIPE Offering closed on May 27, 2025, with aggregate gross proceeds totaling approximately $5 million, before deducting placement agent fees and other expenses. The Company intends to use the proceeds from the May PIPE Offering for general corporate and working capital purposes.

The exercise price and number of shares of Common Stock issuable upon exercise of the May PIPE Warrants is subject to appropriate adjustment in the event of stock dividends, stock splits, reorganizations or similar events affecting the Common Stock and the exercise price. Subject to limited exceptions, the investor may not exercise any portion of the May PIPE Warrants to the extent that the investor would beneficially own more than 4.99% (or, at the election of the holder prior to the date of issuance, 9.99%) of the outstanding Common Stock after exercise. In the event of certain fundamental transactions, the holder of the May PIPE Warrants will have the right to receive the Black Scholes Value (as defined in the May PIPE Warrants) of its May PIPE Warrants calculated pursuant to a formula set forth in the May PIPE Warrants, payable in cash. There is no trading market available for the May PIPE Warrants on any securities exchange or nationally recognized trading system. The Company does not intend to list the May PIPE Warrants on any securities exchange or nationally recognized trading system.

Pursuant to the May Securities Purchase Agreement, for a period of eighteen (18) months after the closing date, the investor shall have the right of first refusal to participate with respect to any offering involving (i) future equity or equity-linked securities of the Company or (ii) debt of the Company, which is convertible into equity or in which there is an equity component.

Pursuant to the May PIPE Offering, on May 22, 2025, the Company filed a Certificate of Designation of Series A Preferred Stock with the Secretary of State of the State of Nevada and subsequently, on May 23, 2025 the Company filed an Amended & Restated Certificate of Designation to correct the conversion price of the Series A Preferred Stock from $0.50 per share to $0.56 per share.

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Dominari Securities, LLC acted as placement agent (the "Placement Agent") in connection with the May PIPE Offering, pursuant to that certain Placement Agency Agreement, dated as of May 21, 2025, between the Company and the Placement Agent, pursuant to which the Company paid the Placement Agent (i) a cash fee equal to 6.00% of the aggregate gross proceeds from the sale of the shares of Common Stock in the May PIPE Offering and (ii) reimbursement for certain of out-of-pocket expenses, including for reasonable expenses and legal fees of $100,000. In addition, we issued to the Placement Agent or its designees the placement agent warrants (the "May Placement Agent Warrants") to purchase up to an aggregate of 535,714 shares of Common Stock (6.0% of the Common Stock sold in the May PIPE Offering). The Placement Agent Warrants have identical terms as the May PIPE Warrants.

While the securities offered and sold by the Company in the May PIPE Offering were not registered under the Securities Act prior to issuance, they were registered in a resale registration statement on Form S-3 declared effective by the SEC on June 16, 2025. As of July 24, 2025, all of the Series A Preferred Stock shares sold pursuant to the May Securities Purchase Agreement were converted into shares of Common Stock.

*June 2025 PIPE Offering*

On June 16, 2025, the Company entered into a Securities Purchase Agreement (the "June Securities Purchase Agreement") with Bravemorning for a private investment in public equity (the "June PIPE Offering") of 100,000 shares of its Series B Convertible Preferred Stock par value $0.0001 per share (the "Series B Preferred Stock"), convertible into 200,000,000 shares of common stock, at a conversion price of $0.50 per share of Common Stock, and warrants (the "June PIPE Warrants") to acquire up to 220,000,000 shares of Common Stock. The June PIPE Warrants issued in the June PIPE Offering are exercisable immediately upon issuance at an exercise price of $0.50 per share and set to expire two years from the date of issuance. The 100,000 shares of Series B Preferred Stock are referred to herein as the "Preferred Stock Shares."

The issuance of the Preferred Stock Shares and the June PIPE Warrants occurred on June 16, 2025.

On June 28, 2025, Bravemorning paid the $100 million purchase price for the Preferred Stock Shares and Warrants (based on the closing price of TRX tokens on June 15, 2025), and on August 28, 2025, Bravemorning paid the $110 million exercise price for the August Warrant Exercise (based on the closing price of TRX tokens on August 26, 2025), in the form of TRX tokens (the "Consideration Tokens"). The Consideration Tokens are held in the custodian wallet account ("Treasury Wallet") designated and controlled by the Board. The Treasury Wallet is set up by BiT Global, a licensed Trust or Company Service Provider and registered trust company in Hong Kong. BiT Global provides on-chain monitoring services for the Treasury Wallet while the Board has full control and access to the Treasury Wallet. Our director, Zhihong Liu, is one of the directors of BiT Global.

The Preferred Stock Shares cannot be converted into more than 19.99% of the currently outstanding shares of Common Stock until stockholder approval of such an issuance is obtained and becomes effective. Shareholder approval of such issuance was obtained and became effective on August 11, 2025; and therefore the 19.99% limitation was no longer applicable as of such date.

The Company entered into an Advisory Agreement (the "Sun Advisory Agreement") with Justin Sun on June 16, 2025 along with the issuance of the Preferred Stock Shares and the June PIPE Warrants. Pursuant to the Sun Advisory Agreement, Justin Sun will provide strategic business advisory and brand consulting services to the Company as an independent contractor. The scope of such services shall be as directed from time to time by the Board of Directors or the Chief Executive Officer of the Company. No payment is required to be made and, as of the date of this Form 10-K, no payment has been made by the Company to Justin Sun in consideration of the services provided by him to the Company under the Sun Advisory Agreement. The Sun Advisory Agreement has a one-year term, subject to renewal, and may be terminated by either party on 30 days' notice. Work product developed under the agreement will be owned by the Company, subject to Mr. Sun's retention of certain pre-existing intellectual property. The Sun Advisory Agreement also includes customary confidentiality, indemnification, non-disparagement, and arbitration provisions. The foregoing description of the Sun Advisory Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Sun Advisory Agreement, which is incorporated herein by reference as Exhibit 10.24.

Justin Sun's father, Weike Sun, is the sole shareholder of Bravemorning and was appointed as a member of the Board in connection with the June PIPE Offering.

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The conversion price and exercise price and number of shares of Common Stock issuable upon conversion or exercise of the Preferred Stock Shares and the June PIPE Warrants, as the case may be is subject to appropriate adjustment in the event of stock dividends, stock splits, reorganizations or similar events affecting the Common Stock and the conversion price or exercise price. In the event of certain fundamental transactions, the holder of the June PIPE Warrants will have the right to receive the Black Scholes Value (as defined in the June PIPE Warrants) of its June PIPE Warrants calculated pursuant to a formula set forth in the June PIPE Warrants, payable in cash. There is no trading market available for the Preferred Stock Shares or the June PIPE Warrants on any securities exchange or nationally recognized trading system. The Company does not intend to list the Preferred Stock Shares or June PIPE Warrants on any securities exchange or nationally recognized trading system.

Dominari Securities, LLC acted as placement agent (the "Placement Agent") in connection with the June PIPE Offering, pursuant to that certain Placement Agency Agreement, dated as of June 16, 2025, between the Company and the Placement Agent, pursuant to which the Company paid the Placement Agent for certain out-of-pocket expenses, including for reasonable expenses and legal fees of $50,000.

On June 16, 2025, the Company also entered into a Financial Advisory Agreement (the "AV Advisory Agreement") with American Ventures LLC (the "Advisor"), under which the Advisor will provide non-exclusive financial advisory services to the Company in connection with its blockchain-related initiatives, including exploring opportunities involving holding tokens, primarily TRX Tokens, the governance token of TRON blockchain, and identifying additional revenue-generating verticals within that ecosystem, and as otherwise consistent with the Company's strategy and policies. As compensation, the Company agreed to issue the Advisor 5,360,000 warrants (the "American Ventures Warrants") to purchase shares of common stock at $0.50 per share, exercisable for five (5) years, which were fully earned upon execution of the agreement. The AV Advisory Agreement includes customary confidentiality, indemnification, and termination provisions, and confirms that the Advisor will act as an independent contractor without access to material non-public information absent prior written consent. The foregoing description of the AV Advisory Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the AV Advisory Agreement, which is incorporated herein by reference as Exhibit 10.25.

The securities offered and sold by the Company in the June PIPE Offering and the American Ventures Warrants were not registered under the Securities Act, and may not be offered or sold in the United States absent registration with the SEC or an applicable exemption from such registration requirements. The securities were offered only to accredited investors.

Pursuant to the June PIPE Offering, on June 16, 2025, the Company filed a Certificate of Designation of Series B Preferred Stock with the Secretary of State of the State of Nevada (the "Series B Certificate of Designation").

The stated value of the Series B Preferred Stock is $1,000 per share.

Holder of the Preferred Stock Shares is entitled to cast the number of votes equal to the number of whole shares of Common Stock into which the shares of Series B Preferred Stock are convertible on the basis of a conversion price of $0.50. The Holder shall vote together with the holders of shares of Common Stock as a single class. The Preferred Stock Shares cannot be voted on an "as converted basis" of more than 19.99% of the currently outstanding shares of Common Stock until shareholder approval of such voting rights is obtained and becomes effective. Shareholder approval of such issuance was obtained and became effective on August 11, 2025; and therefore the 19.99% limitation was no longer applicable as of such date.

Holder shall be entitled to receive, and the Company shall pay, dividends on Preferred Stock Shares equal (on an as-if-converted-to-Common-Stock basis) to and in the same form as dividends actually paid on shares of the Common Stock when, as and if such dividends are paid on shares of the Common Stock.

Upon any liquidation, dissolution or winding-up of the Company, the holder of Preferred Stock Shares have a preference for the distribution of the entire remaining assets and funds of the Company legally available for distribution over any holders of other series of preferred stock or of the Common Stock.

If, as of December 31, 2025, a Triggering Event (as defined in the Series B Certificate of Designation) has occurred, the holder of the Preferred Stock Shares shall have the right to request the Company redeem all or any of portion of the Preferred Stock Shares then held by the holder for a redemption price equal to the full (for fully redemption) or pro rata (for portion redemption) Triggering Redemption Amount as specified in the Series B Certificate of Designation. On August 7, 2025, Bravemorning issued a waiver waiving its right under Section 8(b) of the Series B Certificate of Designation to require Tron Inc. to redeem any or all its Series B Convertible Preferred Stock for the Triggering Redemption Amount upon the occurrence of a Triggering Event. No Triggering Event occurred.

*August 2025 Warrant Exercise*

On August 25, 2025, the Board (other than Mr. Weike Sun who recused himself from this decision) authorized the Company to enter into an amendment to the June PIPE Warrants, which permitted the exercise price of the PIPE Warrants to be paid, at the warrant holder's election, in TRX tokens in addition to the existing methods of cash or cashless exercise. All other terms of the PIPE Warrants remained unchanged.

On August 27, 2025, Bravemorning exercised the PIPE Warrants in full and, on August 29, 2025, the Company issued 220,000,000 shares of Common Stock to Bravemorning. Bravemorning paid $110,000,000 to the Company in the form of 312,500,100 TRX as consideration for the issuance of these Common Stock shares (the "August Warrant Exercise"). These shares of Common Stock were issued to Bravemorning in reliance upon an exemption from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended.

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Immediately after giving effect to the June Securities Purchase Agreement and the August Warrant exercise, Mr. Weike Sun, via his control of Bravemorning, owned approximately 86.6% of the Company's outstanding shares of Common Stock, resulting in a change of control of the Company. Upon the August Warrant Exercise in connection with the June Securities Purchase Agreement, Bravemorning also held 100,000 Preferred Stock Shares, which are convertible into an additional 200,000,000 shares of Common Stock and which vote on an as-converted basis with the Common Stock; and Bravemorning's ownership of Common Stock and Preferred Stock gave it an aggregate voting power of approximately 92.5%. As of March 18, 2026, Bravemorning holds an aggregate voting power of approximately 88.5%. Mr. Weike Sun is a director of the Company and the father of Mr. Justin Sun.

*December Investment*

 

On December 24, 2025, the Company entered into a Stock Purchase Agreement for the purchase of $18,000,000 of the Company's restricted common stock at a price of $1.3775 per share (13,067,151 restricted shares), payable in stablecoins (the "December Investment"). The $18,000,000 was been recorded as Common Stock Payable at December 31, 2025. The closing of the December Investment occurred on January 8, 2026, at which 18 million USDT (Tether) stablecoins were transferred by Black Anthem Limited to the Treasury Wallet. The Company intends to deploy the proceeds to materially expand its TRX treasury portfolio. The securities offered and sold by the Company to Black Anthem Limited were not registered under the Securities Act, and may not be offered or sold in the United States absent registration with the SEC or an applicable exemption from such registration requirements.

Upon the closing of the December Investment, Black Anthem Limited held approximately 4.76% of the Company's outstanding Common Stock, such that Black Anthem Limited's aggregate voting power was approximately 2.75%.

With respect to the December Investment, the Company entered into a token sale and purchase agreement dated January 6, 2026 ("BGDL Token S&P Agreement") with BiT Global Digital Limited ("BGDL"), a British Virgin Islands Business Company, pursuant to which the Company will purchase from BGDL US$18,000,000 worth of TRX tokens (the "Sale Tokens"). Based on the terms of the BGDL Token S&P Agreement, the price calculation mechanism and the delivery mechanism of the Sale Tokens will be solely and reasonably determined by the authorized person(s) of the Company, and that the Sale Tokens will be acquired by the Company from BGDL at cost with no fees or charges. Commencing January 22, 2026, 50,000 USDT worth of TRX tokens (price of which shall be reasonably determined with reference to the market price of TRX token on a global cryptocurrency trading platform on each day) have been and will be delivered daily to the Treasury Wallet for 360 consecutive days. This dollar cost averaging mechanism will help mitigate TRX's price volatility and reduce the average acquisition cost per TRX token.

*Director Resignations*

 

In connection with the June PIPE Offering, on June 16, 2025, Hans Haywood and Gary Herman resigned as members of the Board. These resignations were not a result of any disagreements with the Company on any matter relating to the Company's operations, policies, or practices.

In connection with the June PIPE Offering, Douglas McKinnon resigned as a member of the Board. Mr. McKinnon remains the Company's Chief Financial Officer. Mr. McKinnon's resignation as a member of the Board was not a result of any disagreements with the Company on any matter relating to the Company's operations, policies, or practices.

*Director Appointments*

 

In connection with the June PIPE Offering, on June 16, 2025, Weike Sun, Zhihong Liu, and Zi Yang were appointed as members of the Board. Mr. Sun was named Chairman of the Board. Messrs. Liu and Yang have been appointed to each of the Audit, Compensation, and Nominating and Corporate Governance Committees of the Board. Mr. Liu serves as chair of the Compensation Committee and Mr. Yang serves as chair of the Nominating and Corporate Governance Committee.

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Weike Sun, age 66, began his career in journalism and public infrastructure administration in China. Following his extensive experience in the public sector, Mr. Sun transitioned to the private sector holding senior management and advisory role to several fintech companies since 2016, including Ruibo (Beijing) Technology and Peiwo Huanle (Beijing) Technology. He was the Chairman of Guangzhou Keyhiway Printing Technology, a listed company on China's National Equities Exchange and Quotations (NEEQ) from March 2022 to July 2023. Mr. Sun holds a bachelor's degree from Qinghai Normal College. Mr. Weike Sun is the sole shareholder of Bravemorning.

Zhihong Liu, age 60, has been the senior advisor to TRON DAO since 2021, leading its strategic investment activities. Previously, Mr. Liu served as the board director of Valkyrie Investment helping to launch one of the first Bitcoin future ETFs in the US. Prior to joining the blockchain industry in 2021, he had held senior positions in the financial industry for over 20 years working for leading global firms including Ant Financial, NOMURA, Salomon Smith Barney and Fidelity Investment. Mr. Liu holds an MBA from Columbia University and a bachelor's degree from Zhejiang University in China.

Zi Yang, age 27, has been active in the blockchain industry for over 5 years. Mr. Yang currently holds senior positions for several leading blockchain projects including Tronscan, the official blockchain explorer for Tron protocol. Mr. Yang holds a bachelor's degree in Human Resource Management from Guangdong University of Foreign Studies in China.

*Amendments to Employment Agreements with Officers*

 

In connection with the June PIPE Offering, on June 16, 2025, the Company entered into amendments to the employment agreements of each of Richard Miller (the Company's Chief Executive Officer), Mr. McKinnon (the Company's Chief Financial Officer), Taft Flittner (the Company's President), and Deborah McDaniel-Hand (the Company's Vice President of Production, Development, and Operations) (collectively, the "Employment Agreement Amendments").

Pursuant to each of the Employment Agreement Amendments, the executives agreed (a) not to terminate their employment and not to seek any compensation for any termination of their employment in connection with the June PIPE Offering and (b) that any incentive or bonus payments related to the Company's performance would only be measured against the Company's business of developing and marketing licensed consumer products, including children's toys and entertainment merchandise. Such compensation would not be related to the Company's TRON (TRX) tokens-related operations.

In addition, Messrs. Miller and McKinnon agreed that equity awards issued to them pursuant to the Company's Equity Incentive Plans would, going forward, be solely determined by the Compensation Committee of the Board. The foregoing description of the Employment Agreement Amendments does not purport to be a complete description and is qualified in its entirety by reference to the individual Employment Agreement Amendments which are filed with the Form 8-K of the Company filed with the SEC on June 16, 2025 as Exhibits 10.4 (Miller), 10.5 (McKinnon), 10.6 (Flittner), and 10.7 (McDaniel-Hand) and incorporated by reference into Item 5.02 therein.

On July 11, 2025, the Board approved the change in the name of the Company to "Tron Inc." (the "Name Change") and the change in the trading symbol of the Company to "TRON" on the Nasdaq Capital Market (the "Symbol Change") to align with its major transformation into a TRON treasury strategy company.

On July 11, 2025, to effectuate the Name Change, the Company filed a Certificate of Amendment to the Articles of Incorporation of the Company, as amended (the "Charter Amendment") with the Secretary of State of the State of Nevada. The Name Change and the Symbol Change took effect on the Nasdaq Capital Market on July 17, 2025.

These moves reflect the Company's broader strategic transformation and its commitment to aligning more closely with the TRON blockchain ecosystem, following the launch of its Tron-focused treasury strategy. The Company's ticker change to "TRON" reinforces its brand identity and positions it as a key corporate player in the rapidly evolving blockchain and digital asset economy.

*Lowering of Transaction Fees*

According to committee proposals history available on Tronscan, the proposal #104 which proposed the modification of transaction fee of 1 unit of energy from 0.00021 TRX token to 0.0001 TRX token was approved by the SR and became effective on August 29, 2025. The reduction of this fee means that less TRX is required to be burned (from 0.00021 TRX token to 0.0001 TRX token) to obtain a unit of energy; as a result, the cost for users to obtain energy through TRX burning decreases significantly, and therefore there will be less demand for energy rental. See "*Risk Factors - The price decrease of energy, a type of system resources on the TRON blockchain, could negatively affect the Company.*"

**Regulatory Developments in the PRC**

We do not have any operations in Mainland China and currently do not have or intend to have any operating subsidiary established in Mainland China or any contractual arrangement to establish a variable interest entity ("VIE") structure with any entity in Mainland China.

SRM Ltd, our wholly-owned subsidiary incorporated in Hong Kong, provides administrative support for the procurement and delivery process of our custom merchandise business. We directly control our procurement of the custom merchandize with our PRC suppliers. SRM Ltd is not involved in our TRX treasury holding activities. See *"Business – Toy and Souvenir"* for more information.

As to our TRX treasury business, our Treasury Wallet is located in Hong Kong. See *"Business – TRX Tokens Treasury"* for more information.

Because of the certain connections we have in Hong Kong, and because Hong Kong is a Special Administrative Region of China, there is uncertainty as to whether, in the event that the Chinese government does exercise additional oversight and discretion over the conduct of our business in the future, our existing connections to Hong Kong would be significant enough to trigger any new governmental actions that would apply to us, which could affect our operations and/or the value of our Common Stock or other securities. Because the nature of any such additional oversight and discretion cannot be known presently, the resulting uncertainty presents a potential risk to investors.

We are subject to unique risks due to uncertainty of the interpretation and the application of the PRC laws and regulations. We are also subject to the risks of uncertainty about any future actions of the Chinese government or authorities in Hong Kong in this regard.

We are aware that recently, the PRC government initiated a series of regulatory actions and statements to regulate business operations in certain areas in China with little advance notice, including cracking down on illegal activities in the securities market, enhancing supervision over China-based companies listed overseas using a VIE structure, adopting new measures to extend the scope of cybersecurity reviews, and expanding its efforts in anti-monopoly enforcement. Since these statements and regulatory actions are new, it is highly uncertain how soon the legislative or administrative regulation making bodies will respond and what existing or new laws or regulations or detailed implementations and interpretations will be modified or promulgated, if any. It is also highly uncertain what the potential impact such modified or new laws and regulations will have on our Hong Kong subsidiary or on our TRX treasury business. These actions could potentially interfere with, alter, limit or hinder our current presence in Hong Kong. See *"Risk Factors — Certain of our operations are conducted in Hong Kong. It is possible that the Chinese government may exercise significant oversight and discretion over the conduct of such business and may influence such operations, which could potentially significantly interfere with, alter, limit or hinder our current presence in Hong Kong, and certain scenarios possibly affect the value of our Common Stock or other securities. Changes in the policies, regulations, rules, and the enforcement of laws of the Chinese government may also occur quickly and our assertions and beliefs of the risk imposed by the PRC legal and regulatory system cannot be certain. There are uncertainties regarding the enforcement of PRC laws, and rules and regulations in China can change quickly with little advance notice. The Chinese government may intervene or influence the Hong Kong aspects of our operations, which could interfere with our operations and/or affect the value of the Common Stock or other securities we are registering for sale."* for further information.

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Recent statements by the PRC government have indicated an intent to exert more oversight and control over offerings that are conducted overseas and/or foreign investments in China based issuers. On July 6, 2021, the General Office of the Communist Party of China Central Committee and the General Office of the State Council jointly issued a document to crack down on illegal activities in the securities markets and promote the high-quality development of the capital markets, which, among other things, requires the relevant governmental authorities to strengthen cross-border oversight of law-enforcement and judicial cooperation, to enhance supervision over China-based companies listed overseas, and to establish and improve the system of extraterritorial application of the PRC securities laws.

On December 24, 2021, the China Securities Regulatory Commission (the "CSRC") released the Draft Administrative Provisions and the Draft Filing Measures, both of which had a comment period that expired on January 23, 2022. The Draft Administrative Provisions and Draft Filing Measures regulate the administrative system, record-filing management, and other related rules in respect of the direct or indirect overseas issuance of listed and traded securities by "domestic enterprises". The Draft Administrative Provisions specify that the CSRC has regulatory authority over the "overseas securities offering and listing by domestic enterprises", and requires "domestic enterprises" to complete filing procedures with the CSRC if they wish to list overseas. On February 17, 2023, the CSRC released the Trial Measures and five supporting guidelines, which came into effect on March 31, 2023. According to the Trial Measures, domestic companies that seek to offer or list securities overseas, both directly and indirectly, should fulfill the filing procedures and report relevant information to the CSRC; any failure to comply with such filing procedures may result in administrative penalties, such as an order to rectify, warnings, and fines. On April 2, 2022, the CSRC published the Draft Archives Rules, for public comment. These rules state that in the overseas listing activities of domestic companies, domestic companies, as well as securities companies and securities service institutions providing relevant securities services thereof, should establish a sound system of confidentiality and archival work, shall not disclose state secrets, or harm the state and public interests.

Under the Trial Measures and the Guidance Rules and Notice, Chinese domestic companies conducting overseas securities offering and listing activities, either in direct or indirect form, shall complete filing procedures with the CSRC pursuant to the requirements of the Trial Measures within three working days following their submission of initial public offerings or listing application. The companies that have already been listed on overseas stock exchanges or have obtained the approval from overseas supervision administrations or stock exchanges for its offering and listing and will complete their overseas offering and listing prior to September 30, 2023 are not required to make immediate filings for its listing, yet need to make filings for subsequent offerings in accordance with the Trial Measures. Companies that have already submitted an application for an initial public offering to overseas supervision administrations prior to the effective date of the Trial Measures but have not yet obtained the approval from overseas supervision administrations or stock exchanges for the offering and listing, shall arrange for the filing within a reasonable time period and shall complete the filing procedure before such companies' overseas issuance and listing.

Our management understands that as of the date of this Form 10-K, the Company has no operations in Mainland China and is not required to complete filing procedures with the CSRC pursuant to the requirements of the Trial Measures. While the Company has no current operations in Mainland China, should we have any future operations in Mainland China and should we (i) fail to receive or maintain such permissions or approvals, (ii) inadvertently conclude that such permissions or approvals are not required, or (iii) applicable laws, regulations, or interpretations change and require us to obtain such permissions or approvals in the future, we may face sanctions by the CSRC, the Cyberspace Administration of China (the "CAC") or other PRC regulatory agencies. These regulatory agencies may also impose fines and penalties on our potential operations in Mainland China, as well as limit our ability to pay dividends outside of Mainland China, limit our operations in Mainland China, delay or restrict the repatriation of the proceeds from our offerings into Mainland China or take other actions that could have an adverse effect on our business as well as the trading price of our Common Stock or other securities.

If we have PRC operations in the future, we may be required to restructure our operations to comply with such regulations or potentially cease operations in the PRC entirely. The CSRC, the CAC or other PRC regulatory agencies also may take actions requiring us, or making it advisable for us, to halt offerings before settlement and delivery of our Common Stock or other securities. In addition, if the CSRC, the CAC or other regulatory PRC agencies later promulgate new rules requiring that we obtain their approvals for our offerings, we may be unable to obtain a waiver of such approval requirements, if and when procedures are established to obtain such a waiver. If we have PRC operations in the future, any action taken by the PRC government could significantly limit or completely hinder our operations in the PRC and our ability to offer or continue to offer securities to investors, and could cause the value of such securities to decline.

Furthermore, on July 10, 2021, the CAC issued a revised draft of the Measures for Cybersecurity Review for public comment, which required that, among others, in addition to any "operator of critical information infrastructure", any "data processor" controlling personal information of no less than one million users which seeks to list in a foreign stock exchange should also be subject to cybersecurity review, and further elaborated the factors to be considered when assessing the national security risks of the relevant activities. On December 28, 2021, the CAC, the National Development and Reform Commission ("NDRC"), and several other administrations jointly issued the revised Measures for Cybersecurity Review, which became effective and replaced the existing Measures for Cybersecurity Review on February 15, 2022. According to the Revised Review Measures, if an "online platform operator" that is in possession of personal data of more than one million users intends to list in a foreign country, it must apply for a cybersecurity review. Based on a set of Q&A published on the official website of the State Cipher Code Administration in connection with the issuance of the Revised Review Measures, an official of the said administration indicated that an online platform operator should apply for a cybersecurity review prior to the submission of its listing application with non-PRC securities regulators. Moreover, the CAC released the draft of the Regulations on Network Data Security Management in November 2021 for public consultation, which among other things, stipulates that a data processor listed overseas must conduct an annual data security review by itself or by engaging a data security service provider and submit the annual data security review report for a given year to the municipal cybersecurity department before January 31 of the following year. Given the recency of the issuance of the Revised Review Measures and their pending effectiveness, there is a general lack of guidance and substantial uncertainties exist with respect to their interpretation and implementation. It remains unclear whether a Hong Kong company which collects personal information from PRC individuals shall be subject to the Revised Review Measures. We do not currently expect the Revised Review Measures to have an impact on our business, our operations or our offerings as we do not believe that our subsidiary would be deemed to be an "operator of critical information infrastructure" or a "data processor" controlling personal information of no less than one million users, that would be required to file for cybersecurity review before listing in the U.S.. However, there remains uncertainty in the interpretation and enforcement of relevant PRC cybersecurity laws and regulations. If the Revised Review Measures are adopted into law in the future and if our subsidiary is deemed to be an "operator of critical information infrastructure" or a "data processor" controlling personal information of no less than one million users, our operation and the listing of our Common Stock or other securities in the U.S. could be subject to CAC's cybersecurity review.

As of the date of hereof, Hong Kong does not have similar regulations as of the PRC to extend oversight and control over offerings that are conducted overseas. Hong Kong does not have similar regulation as of the Trial Measures and the Guidance Rules and Notice, and Measures for Cybersecurity Review of the PRC. However, the legal and operational risks associated in Mainland China also apply to operations in Hong Kong, and we face the risks and uncertainties associated with the complex and evolving PRC laws and regulations and as to whether and how the recent PRC government statements and regulatory developments, such as those relating to data and cyberspace security and anti-monopoly concerns, would be applicable to a company such as our subsidiary and our Company, given the Hong Kong aspects of our subsidiary in Hong Kong and the possibility that the Chinese government may exercise significant oversight over the conduct of business in Hong Kong. In the event we or our subsidiary were to become subject to PRC laws and regulations, we could incur material costs to ensure compliance, and we or our subsidiary might be subject to fines, experienced evaluation of securities or delisting, restrictions on securities offerings, and/or no longer be permitted to continue business operations as presently conducted. In the event that (i) the PRC government expands the categories of industries and companies whose foreign securities offerings are subject to review by the CSRC or the CAC or if applicable laws, regulations or interpretations change and we are required to obtain such permissions or approvals, (ii) we inadvertently conclude that relevant permissions or approvals were not required, or (iii) we did not receive or maintain relevant permissions or approvals required, any action taken by the PRC government could significantly limit or completely hinder our operations in Hong Kong and our ability to offer or continue to offer securities to investors and could cause the value of our Common Stock or other securities to decline.

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**ITEM 1A. RISK FACTORS**

**Risks Related to Our Business**

**Risks Related to Our Toy and Souvenir Business**

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

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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;

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● 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 Company's 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 Company's 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.

***Our use of third-party manufacturers to produce our products presents risks to our toy and souvenir 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.

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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.

***Our toy and souvenir business may be harmed by the imposition or threat of tariffs, including reciprocal or retaliatory tariffs, in markets in which we operate which could increase our product costs and other costs of doing business, impact consumer spending, or lower our revenues and earnings.***

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The current global tariff environment is uncertain. For products manufactured outside the U.S., tariffs increase the cost of our products. Most of our products are produced in China, and tariffs may impact our sales and reduce our profitability as a result. Tariffs may also impact consumer spending if products become more expensive, or consumers have less discretionary income or consumer spending power. The current tariff environment, particularly the imposition or threat of tariffs on products manufactured in China for import into the U.S. as well the potential for retaliatory and reciprocal tariffs in other countries in which we do business, may negatively impact our business, sales and profitability. While our contracts currently require our customers to cover tariffs and other fees, further increases in tariffs may increase the costs of our products. We cannot assure you that we will be able to successfully implement actions to lessen the impact of tariffs imposed on our products, including any changes to our supply chain, logistics capabilities, sales policies or pricing of our products.

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

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The Company 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 the Company's products. In addition, competition for access to entertainment properties has and may continue to lessen the Company's ability to secure, maintain, and renew popular licenses to entertainment products developed by other parties and licensed to the Company, or require the Company to pay licensors higher royalties and higher minimum guaranteed payments to obtain or retain these licenses. As a licensee of entertainment properties, the Company 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 the Company and its products. Reduced demand for the Company's brands, products, and product lines as a result of these factors may adversely affect the Company's business, financial condition, and results of operations. Some of our competitors may have greater resources than the Company. In order to compete successfully, the Company may have to lower prices and increase marketing expenses which could result in reduced margins.

***The Company 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.***

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The Company's business and operating results in the toy and souvenir segment depend largely upon the appeal of its products, driven by both innovation and marketing. Consumer preferences are continuously changing. The Company 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. the Company 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. The Company 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 the Company's market position is always at risk. The Company's ability to maintain its current product sales and increase its product sales or establish product sales with new, innovative toys, depends on the Company'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.

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

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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 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 the Company's business, financial condition, and results of operations.***

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The Company 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 the Company'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 the Company'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 the Company's business, financial condition, and results of operations.

From time to time, the Company anticipates introducing new products, product lines, or brands at a certain time in the future. There is no guarantee that the Company 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 products of the Company 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 the Company'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.

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

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The Company's toy and souvenir business is subject to risks associated with the underproduction of popular toys and the overproduction of toys that are less popular with consumers. The Company attempts to manage their inventories tightly, which requires the Company to ship products closer to the expected date the Company 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 the Company may not be able to meet demand for certain products at peak demand times or that the Company'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 the Company's business, the Company 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.

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

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As a part of its efforts to cut costs, achieve better efficiencies, and increase productivity and service quality, the Company 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 vendor or outsourcer of the Company, particularly an issue affecting the quality of these services or systems, results in risk of damage to the Company's reputation and brand value, and potentially adverse effects to the Company'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 the Company's operations, and significant capital investments could be required to remediate the problem.

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

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The Company'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 the Company's key personnel could harm the Company's business. Recruiting and retaining skilled personnel is costly and highly competitive. In addition, changes to the Company'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 the Company's ability to hire and retain qualified personnel. If the Company fails to retain, hire, train, and integrate qualified employees and contractors, the Company may not be able to maintain or expand its business.

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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.

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

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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 the Company's manufacturing operations or supply chain due to political instability, civil unrest, or disease could adversely affect the Company's toy and souvenir business, financial position, sales, and results of operations.***

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The Company 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 the Company 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 the Company, 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 the Company's products could suffer if the Company's employees or the employees of its third-party manufacturers or their suppliers contract communicable diseases, or if the Company, the Company's third-party manufacturers, or their suppliers are adversely affected by other impacts of such diseases. In addition, the contingency plans the Company 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.***

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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.

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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.

***The Company 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.***

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The Company 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. The Company 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 the Company's consumer products and services are web-based, and some are offered in conjunction with business partners or such third-party service providers. The Company'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.

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

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The value of the Company'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, the Company'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 the Company, 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, the Company's business is subject to the risk of third parties counterfeiting its products or infringing on its intellectual property rights. The steps the Company 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. The Company may resort to litigation to protect its intellectual property rights, which could result in substantial costs and diversion of resources. The Company's failure to protect its proprietary intellectual property and information, including with respect to any successful challenge to the Company's ownership of its intellectual property or significant infringements of its intellectual property, could have an adverse effect on the Company'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.

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***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.***

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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.***

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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. The amounts reported as of December 31, 2025 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.

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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.

***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.

***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.

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***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 the Company to civil, criminal and administrative penalties, remedial measures and legal expenses, all of which could adversely affect the Company's business, prospects, results of operations, financial condition and reputation.***

 ****

The Company 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 the Company 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 the Company 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.

***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.***

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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 Our Securities and Other Risks**

***We are an "emerging growth company" and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our common stock less attractive to investors.***

 ****

We are an "emerging growth company" as defined in the JOBS Act, and, for as long as we continue to be an emerging growth company, we may choose to take advantage of exemptions from various reporting requirements applicable to other public companies including, but (i) not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, (ii) not being required to comply with any new requirements adopted by the Public Company Accounting Oversight Board (the "PCAOB"), requiring mandatory audit firm rotation or a supplement to the auditor's report in which the auditor would be required to provide additional information about the audit and the financial statements of the issuer, (iii) not being required to comply with any new audit rules adopted by the PCAOB after April 5, 2012 unless the SEC determines otherwise, (iv) reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and (v) exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

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We could remain an emerging growth company until the earlier of: (i) the last day of the fiscal year in which we have total annual gross revenues of $1.24 billion or more; (ii) the last day of our fiscal year following the fifth anniversary of the date of our first sale of common equity securities pursuant to an effective registration statement; (iii) the date on which we have issued more than $1.0 billion in nonconvertible debt during the previous three years; or (iv) the date on which we are deemed to be a large accelerated filer. We cannot predict if investors will find our securities less attractive if we choose to rely on these exemptions. If some investors find our securities less attractive as a result of any choices to reduce future disclosure, there may be a less active trading market for our securities and our stock price may be more volatile. Further, as a result of these scaled regulatory requirements, our disclosure may be more limited than that of other public companies and you may not have the same protections afforded to stockholders of such companies.

Section 107 of the JOBS Act also 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, for complying with new or revised accounting standards. We have opted for taking advantage of the extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the Jobs Act.

● We are required to comply with various regulatory and reporting requirements, including those required by the SEC. Complying with these reporting and other regulatory requirements is time-consuming and results in increased costs to us and could have a negative effect on our results of operations, financial condition or business.

● Certain of our stockholders hold a significant percentage of our outstanding voting securities, which could reduce the ability of minority stockholders to effect certain corporate actions.

***We may face risks relating to the lack of PCAOB inspection on our auditor.***

We may face risks relating to the lack of the PCAOB inspection on our auditor, which may cause our securities to be delisted from a U.S. stock exchange or prohibited from being traded over-the-counter in the future under the Holding Foreign Companies Accountable Act, or the HFCAA, if the SEC determines that we have filed any annual report containing an audit report issued by a registered public accounting firm that the PCAOB has determined it is unable to inspect or investigate completely for three consecutive years beginning in 2021. On June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act and on December 29, 2022, a legislation entitled "Consolidated Appropriations Act, 2023" (the "Consolidated Appropriations Act") was signed into law by President Biden, which contained, among other things, an identical provision to Accelerating Holding Foreign Companies Accountable Act and amended the HFCAA by requiring the SEC to prohibit an issuer's securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years instead of three, thus reducing the time before our securities may be prohibited from trading or delisted. The delisting or the cessation of trading of our securities, or the threat of their delisted or prohibited from being trade, may materially and adversely affect the value of your investment.

On December 16, 2021, the PCAOB issued a determination report which found that the PCAOB is unable to inspect or investigate completely registered public accounting firms headquartered in: (1) mainland China of the PRC; and (2) Hong Kong, a Special Administrative Region of the PRC, because of positions taken by PRC authorities in those jurisdictions, which determinations were vacated on December 15, 2022. Our current auditor, M&K CPAS, PLLC, is headquartered in Texas, the United States, and was not identified by the PCAOB in its report on December 16, 2021 as a firm subject to the PCAOB's determinations, which determinations were vacated on December 15, 2022.

If the PCAOB in the future determines it is unable to inspect and investigate completely our auditor, then the lack of access to the PCAOB inspection would prevent the PCAOB from fully evaluating audits and quality control procedures of our auditor. As a result, investors could be deprived of the benefits of such PCAOB inspections. The inability of the PCAOB to conduct inspections of our auditor would make it more difficult to evaluate the effectiveness of these accounting firms' audit procedures or quality control procedures, which could cause existing and potential investors in our stock to lose confidence in our audit procedures and reported financial information and the quality of our financial statements. Although our auditor was not identified by the PCAOB in its report as a firm subject to the PCAOB's determinations, which determinations were vacated on December 15, 2022, should the PCAOB be unable to fully conduct inspection of our auditor's work papers, this could adversely affect us and our securities for the reasons noted above.

Our auditor, the independent registered public accounting firm that issues the audit report included elsewhere in this Annual Report, as an auditor of companies that are traded publicly in the U.S. and a firm registered with the PCAOB, is subject to laws in the U.S. pursuant to which the PCAOB conducts regular inspections to assess our auditor's compliance with the applicable professional standards. Our auditor is headquartered in Texas, the United States and has been inspected by the PCAOB on a regular basis. However, the recent developments would add uncertainties to our offerings and we cannot assure you whether Nasdaq or regulatory authorities would apply additional and more stringent criteria to us after considering the effectiveness of our auditor's audit procedures and quality control procedures, adequacy of personnel and training, or sufficiency of resources, geographic reach or experience as it relates to the audit of our financial statements.

***Immediately after August Warrant Exercise in connection with the June Securities Purchase Agreement, Bravemorning held approximately 86.6% of the Company's outstanding Common Stock, and also Preferred Stock Shares which vote together with the Common Stock and increased Bravemorning's aggregate voting power to 92.5%. Bravemorning holds supermajority voting power and may take actions that may not be in the best interests of our other stockholders.***

 

On August 29, 2025, in connection with the August Warrant Exercise, the Company issued 220,000,000 shares of Common Stock to Bravemorning, making it the holder of approximately 86.6% of the Company's outstanding Common Stock. Upon the August Warrant Exercise in connection with the June Securities Purchase Agreement, Bravemorning also held 100,000 Preferred Stock Shares, which are convertible into an additional 200,000,000 shares of Common Stock and which vote on an as-converted basis with the Common Stock; and Bravemorning's ownership of Common Stock and Preferred Stock gave it an aggregate voting power of 92.5%. As a result, Bravemorning is able to control the management and affairs of the Company and matters requiring stockholder approval, including the election of directors and approval of significant corporate transactions. The interests of Bravemorning may not be the same as or may even conflict with your interests. For example, Bravemorning could attempt to delay or prevent a change in control of us, even if such change in control would benefit our other stockholders, which could deprive our stockholders of an opportunity to receive a premium for their Common Stock as part of a sale of us or our assets, and might affect the prevailing market price of our Common Stock due to investors' perceptions that conflicts of interest may exist or arise. As a result, this concentration of ownership may not be in the best interests of our other stockholders.

 

***We may regularly encounter potential conflicts of interest, and our failure to identify and address such conflicts of interest could adversely affect our business.***

 

We face the possibility of actual, potential, or perceived conflicts of interest in the ordinary course of our business operations.

 

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Conflicts of interest may exist between (i) our different businesses; (ii) us and our stakeholders; or (iii) us and our affiliates. As we expand the scope of our business it is critical for us to be able to timely address potential conflicts of interest, including situations where two or more interests within our businesses naturally exist but are in competition or conflict. We have put in place internal control and risk management procedures that are designed to identify and address conflicts of interest, including a procedure for presenting potential conflicts of interest to the audit committee of our Board. However, appropriately identifying and managing actual, potential, or perceived conflicts of interest is complex and difficult, and our reputation and our stakeholders' confidence in us could be damaged if we fail, or appear to fail, to deal appropriately with one or more actual, potential, or perceived conflicts of interest. It is possible that actual, potential, or perceived conflicts of interest could also give rise to client dissatisfaction, litigation, or regulatory enforcement actions. Regulatory scrutiny of, or litigation in connection with, conflicts of interest could have a material adverse effect on our reputation, which could materially and adversely affect our business in a number of ways, including a reluctance of some potential counterparties to do business with us. Any of the foregoing could materially and adversely affect our reputation, business, financial condition, and results of operations.

 

A conflict of interest occurs when an individual's private interest (or the interest of a member of his or her family or close friend(s) or business associate(s)) interferes, or even appears to interfere, with the interests of our company as a whole. A conflict of interest can arise when an employee, officer or director (or a member of his or her family or a close friend(s) or business associate(s)) takes actions or has interests that may make it difficult to perform his or her work for our company objectively and effectively. Conflicts of interest also arise when an employee, officer or director (or a member of his or her family or close friend(s) or business associate(s)) receives improper personal benefits as a result of his or her position in our company.

Specific potential conflicts of interest may arise from the following relationships:

 

● we engaged BiT Global, a licensed Trust or Company Service Provider and registered trust company in Hong Kong, to set up the Treasury Wallet. Our director, Zhihong Liu, is one of the directors of BiT Global.

● some of our directors have certain ties with the TRON blockchain ecosystem. For example, Weike Sun is the father of Justin Sun, the founder of TRON. Zhihong Liu has been the senior advisor to TRON DAO since 2021. Zi Yang holds senior position for Tronscan, the official blockchain explorer for Tron protocol.

 

Directors and executive officers must seek determinations and prior authorizations or approvals of potential conflicts of interest exclusively from our audit committee. All other employees are required to approach our Chief Executive Officer or our Chief Financial Officer if they have any questions about reporting a suspected conflict of interest.

**Risks Related to Our TRX Token Strategy and Holdings**

***The TRX token is a highly volatile asset, and fluctuations in the price of the TRX token are likely to affect our financial results and the market price of our listed securities.***

All digital assets, including the TRX token, are highly volatile assets, and fluctuations in the price of the TRX token are likely to continue to affect our financial results and the market price of our listed securities. The trading price of the TRX token has experienced substantial volatility historically. In 2021, the trading price of the TRX token reached a high of approximately $0.18 in April, but it declined to a low of approximately $0.05 in November 2022, representing a drawdown of approximately 75%. More recently, during 2024, the TRX token appreciated significantly, rising from approximately $0.11 in January 2024 to a high of approximately $0.44 in December 2024, a gain of approximately 309%. After significant price correction, the trading price of the TRX token reached approximately $0.284271 by the end of 2025. As of March 18, 2026, the closing price of the TRX token was approximately $0.304394, which was an increase of approximately 7% from the price by the end of 2025. These figures are non-exhaustive examples that illustrate that the market price of TRX token has exhibited, and may continue to exhibit, rapid and substantial increases or decreases over relatively short periods, which could materially and adversely affect the value of our holdings directly and the trading price of our securities indirectly. The price figures and percentage change figures above are based on the historical data file downloaded from the CoinMarketCap TRON Historical Data page.

Our financial results and the market price of our listed securities would be adversely affected, and our business and financial condition would be negatively impacted, if the price of TRX tokens decreased substantially, including as a result of:

● decreased user and investor confidence in the TRX token, including due to the various factors described herein;

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● investment and trading activities, such as (i) trading activities of highly active retail and institutional users and investors; and (ii) actual or expected significant dispositions of TRX tokens by large holders, including the expected liquidation of digital assets associated with entities that have filed for bankruptcy protection and the transfer and sale of TRX tokens associated with significant hacks, seizures, or forfeitures;

● negative publicity, media or social media coverage, or sentiment due to events in or relating to, or perception of, TRON blockchain, TRX tokens or the broader digital assets industry, for example, (i) public perception that blockchains can be used as a platform to circumvent sanctions, including sanctions imposed on Russia or certain regions related to the ongoing conflict between Russia and Ukraine, or to fund criminal or terrorist activities, such as the purported use of digital assets by Hamas to fund its terrorist attack against Israel in October 2023; (ii) expected or pending civil, criminal, regulatory enforcement or other high profile actions against major participants in the TRON ecosystem, if any; and (iii) additional filings for bankruptcy protection or bankruptcy proceedings of major digital asset industry participants, such as the bankruptcy proceeding of FTX Trading and its affiliates;

● changes in consumer preferences and the perceived value or prospects of the TRX token;

● competition from other digital assets that exhibit better speed, security, scalability, or energy efficiency, that feature other more favored characteristics, that are backed by governments, including the U.S. government, or reserves of fiat currencies, or that represent ownership or security interests in physical assets;

● a decrease in the price of other digital assets, including stablecoins, or the crash or unavailability of stablecoins that are used as a medium of exchange for TRX token purchase and sale transactions, such as the crash of the stablecoin Terra USD in 2022, to the extent the decrease in the price of such other digital assets or the unavailability of such stablecoins may cause a decrease in the price of TRX tokens or adversely affect investor confidence in digital assets generally;

● developments relating to the TRON protocol, including (i) changes to the TRON protocol that impact its security, speed, scalability, usability, or value, such as changes to the cryptographic security protocol underpinning the TRON blockchain, changes to the maximum number of TRX tokens outstanding, changes to the mutability of transactions, changes relating to the size of blockchain blocks, and similar changes, (ii) failures to make upgrades to the TRON protocol to adapt to security, technological, legal or other challenges, and (iii) changes to the TRON protocol that introduce software bugs, security risks or other elements that adversely affect TRX tokens;

● disruptions, failures, unavailability, or interruptions in service of trading venues for TRX tokens, such as, for example, the announcement by the digital asset exchange FTX Trading that it would freeze withdrawals and transfers from its accounts and subsequent filing for bankruptcy protection and the SEC enforcement action brought against Binance Holdings Ltd., which initially sought to freeze all of its assets during the pendency of the enforcement action and has since resulted in Binance discontinuing all fiat deposits and withdrawals in the U.S.;

● the filing for bankruptcy protection by, liquidation of, or market concerns about the financial viability of digital asset custodians, trading venues, lending platforms, investment funds, or other digital asset industry participants, such as the filing for bankruptcy protection by digital asset trading venues FTX Trading and BlockFi and digital asset lending platforms Celsius Network and Voyager Digital Holdings in 2022, the ordered liquidation of the digital asset investment fund Three Arrows Capital in 2022, the announced liquidation of Silvergate Bank in 2023, the government-mandated closure and sale of Signature Bank in 2023, the placement of Prime Trust, LLC into receivership following a cease-and-desist order issued by the Nevada Department of Business and Industry in 2023, and the exit of Binance from the U.S. market as part of its settlement with the Department of Justice and other federal regulatory agencies;

● regulatory, legislative, enforcement and judicial actions that adversely affect the price, ownership, transferability, trading volumes, legality or public perception of TRX tokens, or that adversely affect the operations of or otherwise prevent digital asset custodians, trading venues, lending platforms or other digital assets industry participants from operating in a manner that allows them to continue to deliver services to the digital assets industry;

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● the recent resolution of a March 2023 civil enforcement action brought by the U.S. Securities and Exchange Commission that had been pending in the Southern District of New York (the "SEC Action"). Among other claims, the SEC Action had alleged that certain contests, giveaways, and secondary market trading involving TRX tokens in 2018 and 2019 constituted unregistered securities offerings under the law. In February 2025, the SEC Action was stayed by the Court at the request of the parties. On March 9, 2026, pursuant to a global agreement to resolve the matter, the Court entered final judgment which, among other things, dismissed with prejudice the unregistered securities offerings claims concerning TRX tokens;

● transaction congestion and fees associated with processing transactions on the TRON network;

● macroeconomic changes, such as changes in the level of interest rates and inflation, fiscal and monetary policies of governments, trade restrictions, and fiat currency devaluations;

● developments in mathematics or technology, including in digital computing, algebraic geometry and quantum computing, that could result in the cryptography used by the TRON blockchain becoming insecure or ineffective; and

● changes in national and international economic and political conditions, including, without limitation, federal government policies, trade tariffs and trade disputes, the adverse impacts attributable to the current conflict between Russia and Ukraine and the economic sanctions adopted in response to the conflict, and the broadening of the Israel-Hamas conflict to other countries in the Middle East.

 ****

Most importantly, our TRX token strategy has not been tested over an extended period of time or under different market conditions. Although we are and will be continually examining the risks and rewards of our TRX token strategy, if TRX token prices were to decrease or our TRX token strategy otherwise proves unsuccessful, the Company's financial condition, results of operations, and the market price of our listed securities would be materially adversely impacted.

***The TRX token and other digital assets are novel assets, and are subject to significant legal, commercial, regulatory and technical uncertainty***

The TRX token and other digital assets are relatively novel and are subject to significant uncertainty, which could adversely impact their price. The application of state and federal securities laws and other laws and regulations to digital assets is unclear in certain respects, and it is possible that regulators in the United States or foreign countries may interpret or apply existing laws and regulations in a manner that adversely affects the price of the TRX token or the ability of individuals or institutions (including the Company) to own or transfer TRX tokens.

The U.S. federal government, states, regulatory agencies, and foreign countries may also enact new laws and regulations, or pursue regulatory, legislative, enforcement or judicial actions, that could materially impact the price of the TRX token or the ability of individuals or institutions (including the Company) to own or transfer TRX tokens. For example, within the past several years:

● President Trump signed an executive order instructing a working group comprised of representatives from key federal agencies to evaluate measures that can be taken to provide regulatory clarity and certainty built on technology-neutral regulations for individuals and firms involved in digital assets, including through well-defined jurisdictional regulatory boundaries;

● the European Union adopted Markets in Crypto Assets Regulation ("MiCA"), a comprehensive digital asset regulatory framework for the issuance and use of digital assets;

● in June 2023, the SEC filed complaints against Binance Holdings Ltd. and Coinbase, Inc., and their respective affiliated entities, relating to, among other claims, that each party was operating as an unregistered securities exchange, broker, dealer, and clearing agency;

● in November 2023, the SEC filed a complaint against Payward Inc. and Payward Ventures Inc., together known as Kraken, alleging, among other claims, that Kraken's crypto trading platform was operating as an unregistered securities exchange, broker, dealer, and clearing agency;

● in June 2023, the United Kingdom adopted and implemented the Financial Services and Markets Act 2023 ("FSMA 2023"), which regulates market activities in "cryptoassets;"

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● in November 2023, Binance Holdings Ltd. and its then chief executive officer reached a settlement with the U.S. Department of Justice, CFTC, the U.S. Department of Treasury's Office of Foreign Asset Control, and the Financial Crimes Enforcement Network to resolve a multi-year investigation by the agencies and a civil suit brought by the CFTC, pursuant to which Binance Holdings Ltd. agreed to, among other things, pay $4.3 billion in penalties across the four agencies and to discontinue its operations in the United States; and

● in China, the People's Bank of China and the National Development and Reform Commission have outlawed cryptocurrency mining and declared all cryptocurrency transactions illegal within the country.

It is not possible to predict whether, or when, new laws will be enacted that change the legal framework governing digital assets or provide additional authorities to the SEC or other regulators, or whether, or when, any other federal, state or foreign legislative bodies will take any similar actions. It is also not possible to predict the nature of any such additional laws or authorities, how additional legislation or regulatory oversight might impact the ability of digital asset markets to function, the willingness of financial and other institutions to continue to provide services to the digital assets industry, or how any new laws or regulations, or changes to existing laws or regulations, might impact the value of digital assets generally and TRX tokens specifically. The consequences of any new law or regulation relating to digital assets and digital asset activities could adversely affect the market price of TRX tokens, as well as our ability to hold or transact in TRX tokens, and in turn adversely affect the market price of our listed securities.

Moreover, the risks of engaging in a TRX token strategy are relatively novel and have created, and could continue to create, complications due to the lack of experience that third parties have with companies engaging in such a strategy, such as increased costs of director and officer liability insurance or the potential inability to obtain such coverage on acceptable terms in the future.

The growth of the digital assets industry in general, and the use and acceptance of the TRX token in particular, may also impact the price of the TRX token and is subject to a high degree of uncertainty. The pace of worldwide growth in the adoption and use of TRX tokens may depend, for instance, on public familiarity with digital assets, ease of buying, accessing or gaining exposure to TRX tokens, institutional demand for TRX tokens as an investment asset, the participation of traditional financial institutions in the digital assets industry, consumer demand for TRX tokens as means of payment, and the availability and popularity of alternatives to the TRX token. Even if growth in TRX token adoption occurs in the near or medium-term, there is no assurance that TRX token usage will continue to grow over the long-term.

Because the TRX token has no physical existence beyond the record of transactions on the TRON blockchain, a variety of technical factors related to the TRON blockchain could also impact the price of the TRX token. For example, malicious attacks by hackers, hard "forks" of the TRX token blockchain into multiple blockchains, and advances in digital computing, algebraic geometry, and quantum computing could undercut the integrity of the TRON blockchain and negatively affect the price of the TRX token. The liquidity of the TRX token may also be reduced and damage to the public perception of the TRX token may occur, if financial institutions were to deny or limit banking services to businesses that hold TRX tokens, provide TRX token-related services or accept the TRX token as payment, which could also decrease the price of the TRX token. Actions by U.S. banking regulators, such as the issuance in February 2023 by Federal banking agencies of the "Interagency Liquidity Risk Statement," which cautioned banks on contagion risks posed by providing services to digital assets customers, and similar actions, have in the past resulted in or contributed to reductions in access to banking services for cryptocurrency-related customers and service providers, or the willingness of traditional financial institution to participate in markets for digital assets. The liquidity of the TRX token may also be impacted to the extent that changes in applicable laws and regulatory requirements negatively impact the ability of exchanges and trading venues to provide services for TRX tokens and other digital assets.

***A significant decrease in the market value of our TRX token holdings could adversely affect our ability to satisfy our financial obligations.***

For the year ended December 31, 2025, our toys and souvenir business did not generate positive cash flow from operations. If our toys and souvenir business does not generate cash flow in future periods sufficient to satisfy our financial obligations, including our debt and cash dividend obligations, we intend to fund our obligations using cash flow generated by equity or debt financings. Our ability to achieve the objectives of our TRX token strategy depends in significant part on our ability to obtain equity and debt financing. If we are unable to obtain equity or debt financing on favorable terms or at all, we may not be able to successfully execute on our TRX token strategy.

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Our ability to obtain equity or debt financing may in turn depend on, among other factors, the value of our TRX token holdings, investor sentiment and the general public perception of TRX tokens, our strategy and our value proposition. Accordingly, a significant decline in the market value of our TRX token holdings or a negative shift in these other factors may create liquidity and credit risks, as such a decline or such shifts may adversely impact our ability to secure sufficient equity or debt financing to satisfy our financial obligations, including our debt and cash dividend obligations. These risks could materialize at times when the TRX token is trading below its carrying value on our most recent balance sheet or our cost basis. As TRX tokens constitute the vast bulk of assets on our balance sheet, if we are unable to secure equity or debt financing in a timely manner, on favorable terms, or at all, we may be required to sell TRX tokens to satisfy these obligations. Any such sale of TRX token may have a material adverse effect on our operating results and financial condition, and could impair our ability to secure additional equity or debt financing in the future. Our inability to secure additional equity or debt financing in a timely manner, on favorable terms or at all, or to sell our TRX tokens in amounts and at prices sufficient to satisfy our financial obligations, including our debt service and cash dividend obligations, could cause us to default under such obligations. Any default on our current or future indebtedness or preferred stock may have a material adverse effect on our financial condition.

***Our historical financial statements do not reflect the potential variability in earnings that we may experience in the future relating to our TRX token holdings.***

Given that we have only started adopting the TRON (TRX) treasury strategy since June 2025, our historical financial statements do not reflect the potential variability in earnings that we may experience in the future from holding or selling significant amounts of TRX tokens. The price of the TRX token has historically been subject to dramatic price fluctuations and is highly volatile. Our TRX token holdings are expected to significantly affect our financial results and if we continue to increase our overall holdings of TRX tokens in the future, they will have an even greater impact on our financial results and the market price of our listed securities. Going forward, we will evaluate and adopt appropriate accounting standards and policies for the preparation of our financial statements, in particular to areas relating to our TRX token holdings.

***Our TRX token strategy subjects us to enhanced regulatory oversight.***

There has been increasing focus on the extent to which digital assets can be used to launder the proceeds of illegal activities, fund criminal or terrorist activities, or circumvent sanctions regimes, including those sanctions imposed in response to the ongoing conflict between Russia and Ukraine. While we have implemented and maintain policies and procedures reasonably designed to promote compliance with applicable anti-money laundering and sanctions laws and regulations and take care to only acquire our TRX tokens through entities subject to anti-money laundering regulation and related compliance rules in the United States, if we are found to have purchased any of our TRX tokens from bad actors that have used TRX tokens to launder money or persons subject to sanctions, we may be subject to regulatory proceedings and any further transactions or dealings in TRX tokens by us may be restricted or prohibited.

We may incur indebtedness or enter into other financial instruments in the future that may be collateralized by our TRX token holdings. We may also consider pursuing strategies to create income streams or otherwise generate funds using our TRX token holdings. These types of TRX token-related transactions are the subject of enhanced regulatory oversight. These and any other TRX token-related transactions we may enter into, beyond simply acquiring and holding TRX tokens, may subject us to additional regulatory compliance requirements and scrutiny, including under federal and state money services regulations, money transmitter licensing requirements and various commodity and securities laws and regulations.

Additional laws, guidance and policies may be issued by domestic and foreign regulators following the filing for Chapter 11 bankruptcy protection by FTX, one of the world's largest cryptocurrency exchanges, in November 2022. While the financial and regulatory fallout from FTX's collapse did not directly impact our business, financial condition or corporate assets, the FTX collapse may have increased regulatory focus on the digital assets industry. Increased enforcement activity and changes in the regulatory environment, including changing interpretations and the implementation of new or varying regulatory requirements by the government or any new legislation affecting TRX tokens, as well as enforcement actions involving or impacting our trading venues, counterparties and custodians, may impose significant costs or significantly limit our ability to hold and transact in TRX tokens.

In addition, private actors that are wary of the TRX token or the regulatory concerns associated with the TRX token have in the past taken and may in the future take further actions that may have an adverse effect on our business or the market price of our listed securities.

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***Due to the unregulated nature and lack of transparency surrounding the operations of many TRX token trading venues, TRX token trading venues may experience greater fraud, security failures or regulatory or operational problems than trading venues for more established asset classes, which may result in a loss of confidence in TRX token trading venues and adversely affect the value of our TRX token.***

TRX token trading venues are relatively new and, in many cases, unregulated. Furthermore, there are many TRX token trading venues which do not provide the public with significant information regarding their ownership structure, management teams, corporate practices and regulatory compliance. As a result, the marketplace may lose confidence in TRX token trading venues, including prominent exchanges that handle a significant volume of TRX token trading and/or are subject to regulatory oversight, in the event one or more TRX token trading venues cease or pause for a prolonged period the trading of TRX token or other digital assets, or experience fraud, significant volumes of withdrawal, security failures or operational problems.

***The concentration of our TRX token holdings enhances the risks inherent in our TRX token strategy.***

The vast majority of our assets are concentrated in our TRX token holdings. As of March 18, 2026, the Company holds approximately 549,676,892 Staked TRX (sTRX) tokens and approximately 9,769,626 TRX tokens in the Treasury Wallet. We intend to purchase additional TRX tokens and increase our overall holdings of TRX tokens in the future. The concentration of our TRX token holdings limits the risk mitigation that we could achieve if we were to purchase a more diversified portfolio of treasury assets, and the absence of diversification enhances the risks inherent in our TRX token strategy.

***Our holdings of sTRX tokens are subject to risks associated with smart contracts and the TRON blockchain, which could adversely affect their value.***

We received and hold sTRX tokens, which are issued and redeemable through a smart-contract protocol. The use of sTRX entails risks inherent in smart contracts, including the possibility of coding errors, security vulnerabilities, or malicious exploits that could result in the partial or total loss of sTRX or the underlying TRX. In addition, risks relating to the TRON blockchain itself, such as congestion, outages, or consensus failures, could disrupt transfers, redemptions, or yield distributions. Further, the staking yield of sTRX consists of standard staking rewards and energy rental income on the TRON blockchain, therefore, any changes to TRON protocol parameters could alter yields, redemption mechanics, or fees in ways that negatively affect the value of sTRX. Any of these risks could materially and adversely affect the value of our sTRX holdings and, by extension, our business, financial condition, and results of operations.

***Due to Justin Sun's role as the founder of TRON and his continued association with the TRON blockchain system, his actions and statements may potentially impact the price of TRX, which could in turn impact the Company and the effectiveness of its treasury strategy.***

As the founder of TRON, and due to his continued association with the TRON blockchain system, Justin Sun's actions and statements may potentially impact the price of TRX. While the Company is not aware of any past action or statement by Justin Sun which has had a significant impact on the price of TRX, it is theoretically possible that the market could have interpreted in the past, or interpret in the future, his statements and actions (whether incorrectly in whole or in part) as a factor that could impact the price of TRX. Any such occurrence that impacts the price of TRX would likely also affect the value of the Company's Common Stock or other securities.

***The emergence or growth of other digital assets, including those with significant private or public sector backing, could have a negative impact on the price of TRX tokens and adversely affect our business.***

As a result of our TRX token strategy, our assets are concentrated in our TRX token holdings. Accordingly, the emergence or growth of digital assets other than the TRX token (such as Bitcoin and Ethereum) may have a material adverse effect on our financial condition.

Other alternative digital assets that compete with the TRX token in certain ways include "stablecoins," which are designed to maintain a constant price because of, for instance, their issuers' promise to hold high-quality liquid assets (such as U.S. dollar deposits and short-term U.S. treasury securities) equal to the total value of stablecoins in circulation. Stablecoins have grown rapidly as a medium of exchange and store of value, particularly on digital asset trading platforms. As of December 31, 2025, two of the eight largest digital assets by market capitalization were U.S. dollar-pegged stablecoins.

Additionally, the introduction of a government-issued digital currency could eliminate or reduce the need or demand for private-sector issued cryptocurrencies, or significantly limit their utility. National governments around the world could introduce central bank digital currencies, which could in turn limit the size of the market opportunity for cryptocurrencies, including TRX tokens.

***Our TRX token holdings are less liquid than our existing cash and cash equivalents and may not be able to serve as a source of liquidity for us to the same extent as cash and cash equivalents.***

The TRX tokens are mainly traded on centralized and decentralized cryptocurrency exchange platforms. During times of market instability, we may not be able to sell our TRX tokens at favorable prices or at all. As a result, our TRX token holdings may not be able to serve as a source of liquidity for us to the same extent as cash and cash equivalents. Further, TRX tokens we hold and transact with our trade execution partners does not enjoy the same protections as are available to cash or securities deposited with or transacted by institutions subject to regulation by the Federal Deposit Insurance Corporation or the Securities Investor Protection Corporation.

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Moreover, TRX tokens may be "staked" on various platforms, including centralized cryptocurrency exchanges, or directly on decentralized platforms. "Staking" is a crypto-related process that allows network participants to earn rewards by locking their tokens in wallets. The TRX tokens in the Treasury Wallet are currently "staked" on JustLend, a decentralized finance (DeFi) protocol, in exchange for Staked TRX (sTRX) tokens. sTRX token is a derivative token that represents the "staked" TRX tokens, which can automatically generate yield for the token holders. For the avoidance of doubt, the sTRX token does not generate discrete staking rewards. Instead, the economic benefit of staking is reflected through a floating conversion rate between TRX and sTRX, which increases over time based on accrued protocol rewards. While "staking" can generate yields and rewards, there are inherent risks such as (i) smart contract risk – any vulnerabilities of the smart contract may potentially lead to loss of funds, and the redemption of "staked" tokens which is governed by smart contract may be modified by the operator; (ii) interest rate fluctuations – rates can change rapidly based on market conditions, and therefore the amount of yields or rewards is not guaranteed; and (iii) liquidity risk – it may take days or even weeks to release TRX tokens from "staking". Other than yields and rewards generated from "staking" of the TRX tokens, the TRX token itself does not pay interest or other returns and we can only generate cash from our TRX token holdings if we sell our TRX tokens or implement strategies to create income streams or otherwise generate cash by using our TRX token holdings. Even if we pursue any such strategies, we may be unable to create income streams or otherwise generate cash from our TRX token holdings, and any such strategies may subject us to additional risks.

The TRX tokens staked through JustLend have been voted to super representative nodes on the TRON blockchain. According to Tronscan (the explorer of TRON blockchain), as of March 18, 2026, the TRX tokens which were staked into Staked TRX (sTRX) have been casted votes for the following super representatives: Abra Capital Management, Poloniex, BlockAnalysis, Crypto Labs, and TRONALLIANCE. The voting power was allocated on an approximately equal basis among these nodes. These nodes are identifiable on the TRON blockchain explorer, and the Company does not exercise discretion over the selection beyond the delegation carried out through the JustLend protocol.

Additionally, we may be unable to enter into term loans or other capital raising transactions collateralized by our unencumbered TRX tokens or otherwise generate funds using our TRX token holdings, including in particular during times of market instability or when the price of TRX tokens has declined significantly. If we are unable to sell our TRX tokens, enter into additional capital raising transactions, including capital raising transactions using TRX tokens as collateral, or otherwise generate funds using our TRX token holdings, or if we are forced to sell our TRX tokens at a significant loss, in order to meet our working capital requirements, our business and financial condition could be negatively impacted.

***We face risks relating to the security of the wallets holding our TRX tokens, including the loss or destruction of private keys required to access our TRX tokens and cyberattacks or other data loss relating to our TRX tokens.***

TRX tokens are controllable only by the possessor of both the unique public key and private key(s) relating to the local or online digital wallet in which a TRX token is held. While the TRON blockchain ledger requires a public key relating to a digital wallet to be published when used in a transaction, private keys must be safeguarded and kept private in order to prevent a third party from accessing the TRX tokens held in such wallet. To the extent the private key(s) for a digital wallet are lost, destroyed, or otherwise compromised and no backup of the private key(s) is accessible, we will not be able to access the TRX tokens held in the related digital wallet. Furthermore, we cannot provide assurance that our digital wallets will not be compromised as a result of a cyberattack.

***The limited rights of legal recourse available to us, and our lack of insurance protection expose us and our stockholders to the risk of loss of our digital assets.***

Our digital assets are not insured. If our digital assets are lost, stolen or destroyed under circumstances rendering a party liable to us, the responsible party may not have the financial resources sufficient to satisfy our claim. For example, as to a particular event of loss, the only source of recovery for us might be limited, to the extent identifiable, to other responsible third parties (which may include a thief or terrorist), some or all of which may not have the financial resources (including liability insurance coverage) to satisfy a valid claim or may be beyond the reach of available legal recourse. Furthermore, the TRX token is not subject to Federal Deposit Insurance Corporation ("FDIC") or Securities Investor Protection Corporation protection, which is the protection afforded to depositors at banking institutions. Therefore, a loss may be suffered with respect to our digital assets for which no recourse is available, which could adversely affect our operations and, consequently, an investment in our securities.

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***If we or our third-party service providers experience a security breach or cyberattack and unauthorized parties obtain access to our TRX tokens, we may lose some or all of our TRX tokens and our financial condition and results of operations could be materially adversely affected.***

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Security breaches and cyberattacks are of particular concern with respect to our TRX tokens. Blockchain-based digital assets have been, and may in the future be, subject to security breaches, cyberattacks, or other malicious activities. A successful security breach or cyberattack could result in a partial or total loss of our TRX tokens. Such a loss could have a material adverse effect on our financial condition and results of operations.

As of March 18, 2026, the TRON blockchain and TRX tokens have not experienced any material security breaches or protocol-level cyberattacks that compromised the integrity of the network. TRON currently maintains a public bug bounty program on HackerOne and has undergone an external security audit of its Java-Tron node software by ChainSecurity. However, the TRON blockchain and TRX token, similar to other digital assets and blockchain technologies, may in the future be, subject to security breaches, cyberattacks, or other malicious activities. For example, in November 2022, hackers exploited weaknesses in the security architecture of the FTX Trading digital asset exchange and reportedly stole over $400 million in digital assets from customers. A successful security breach or cyberattack could result in:

● a partial or total loss of our TRX tokens;

● harm to our reputation and brand;

● improper disclosure of data and violations of applicable data privacy and other laws; or

● significant regulatory scrutiny, investigations, fines, penalties, and other legal, regulatory, contractual and financial exposure.

Further, any actual or perceived data security breach or cybersecurity attack directed at other companies with digital assets or companies that operate digital asset networks, regardless of whether we are directly impacted, could lead to a general loss of confidence in the broader TRON blockchain ecosystem or in the use of the TRON blockchain to conduct financial transactions, which could negatively impact us.

Attacks upon systems across a variety of industries are increasing in frequency, persistence, and sophistication, and, in many cases, are being conducted by sophisticated, well-funded and organized groups and individuals, including state actors. The techniques used to obtain unauthorized, improper or illegal access to systems and information (including personal data and digital assets), disable or degrade services, or sabotage systems are constantly evolving, may be difficult to detect quickly, and often are not recognized or detected until after they have been launched against a target. These attacks may occur on our systems or those of our third-party service providers or partners. We may experience breaches of our security measures due to human error, malfeasance, insider threats, system errors or vulnerabilities or other irregularities. In particular, unauthorized parties have attempted, and we expect that they will continue to attempt, to gain access to our systems and facilities, as well as those of our partners and third-party service providers, through various means, such as hacking, social engineering, phishing and fraud. In the past, hackers have successfully employed a social engineering attack against one of our service providers and misappropriated our digital assets, although, to date, such events have not been material to our financial condition or operating results. Threats can come from a variety of sources, including criminal hackers, hacktivists, state-sponsored intrusions, industrial espionage, and insiders. In addition, certain types of attacks could harm us even if our systems are left undisturbed. For example, certain threats are designed to remain dormant or undetectable, sometimes for extended periods of time, or until launched against a target and we may not be able to implement adequate preventative measures. Further, there has been an increase in such activities due to the increase in work-from-home arrangements since the onset of the COVID-19 pandemic. The risk of cyberattacks could also be increased by cyberwarfare in connection with the ongoing Russia-Ukraine and Israel-Hamas conflicts, or other future conflicts, including potential proliferation of malware into systems unrelated to such conflicts. Any future breach of our operations or those of others in the digital asset industry, including third-party services on which we rely, could materially and adversely affect our business.

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***Absent federal regulations, there is a possibility that the TRX token (either on its own or when offered and sold as part of or subject to an investment contract) may be classified as a "security." Any such classification of TRX token as a "security" would subject us to additional regulation and could materially impact the operation of our business.***

Our assets are concentrated in our TRX token holdings. While neither the SEC nor any other U.S. federal or state regulator has publicly stated whether they agree that the TRX token, either on its own or when offered and sold as part of or subject to an investment contract, is a "security", if the TRX token is determined to be a "security" in the future, it could lead to our classification as an "investment company" under the Investment Company Act of 1940, as amended (the "Investment Company Act"), which would subject us to significant additional regulatory controls that could have a material adverse effect on our ability to execute on our TRX token strategy, and our business and operations and may also require us to substantially change the manner in which we conduct our business.

While (for the reasons discussed below) we believe that TRX token, whether on its own or when offered and sold as part of or subject to an investment contract, is not a "security" within the meaning of the U.S. federal securities laws, and registration of the Company under the Investment Company Act is therefore not required under the applicable securities laws, we acknowledge that a regulatory body or federal court may determine otherwise. Our belief, even if reasonable under the circumstances, would not preclude legal or regulatory action based on such a finding that TRX token, whether on its own or when offered and sold as part of or subject to an investment contract, is a "security" which would require us to register as an investment company under the Investment Company Act.

We have also adapted our process for analyzing the U.S. federal securities law status of the TRX token and other cryptocurrencies over time, as guidance and case law have evolved. As part of our U.S. federal securities law analytical process, we take into account a number of factors, including the various definitions of "security" under U.S. federal securities laws and federal court decisions interpreting the elements of these definitions, such as the U.S. Supreme Court's decisions in the *Howey* and *Reves* cases, as well as court rulings, reports, orders, press releases, public statements, and speeches by the SEC Commissioners and SEC Staff providing guidance on when a digital asset or a transaction to which a digital asset may relate may be a security for purposes of U.S. federal securities laws. Our position that TRX token, whether on its own or when offered and sold as part of or subject to an investment contract, is not a "security" is premised, among other reasons, on our conclusion that the TRX token does not meet the elements of the *Howey* test. Among the reasons for our conclusion that the TRX token is not a security is that holders of TRX tokens do not have a reasonable expectation of profits from our efforts in respect of their holding of TRX tokens. Also, TRX token ownership does not convey the right to receive any interest, rewards, or other returns.

We acknowledge, however, that the SEC, a federal court or another relevant entity could take a different view. Application of securities laws to the specific facts and circumstances of digital assets is complex and subject to change. Our conclusion, even if reasonable under the circumstances, would not preclude legal or regulatory action based on a finding that the TRX token, or any other digital asset we might hold, is a "security." As such, we are at risk of enforcement proceedings against us, which could result in potential injunctions, cease-and-desist orders, fines, and penalties if the TRX token was determined to be a security by a regulatory body or a court. Such developments could subject us to fines, penalties, and other damages, and adversely affect our business, results of operations, financial condition, and prospects.

Under Sections 3(a)(1)(A) and (C) of the Investment Company Act, a company generally will be deemed to be an "investment company" if (i) it is, or holds itself out as being, engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting, or trading in securities or (ii) it engages, or proposes to engage, in the business of investing, reinvesting, owning, holding, or trading in securities and it owns or proposes to acquire investment securities having a value exceeding 40% of the value of its total assets (exclusive of U.S. government securities, shares of registered money market funds under Rule 2a-7 of the Investment Company Act, and cash items) on an unconsolidated basis. Rule 3a-1 under the Investment Company Act generally provides that notwithstanding the Section 3(a)(1)(C) test described in clause (ii) above, an entity will not be deemed to be an "investment company" for purposes of the Investment Company Act if no more than 45% of the value of its assets (exclusive of U.S. government securities, shares of registered money market funds under Rule 2a-7 of the Investment Company Act, and cash items) consists of, and no more than 45% of its net income after taxes (for the past four fiscal quarters combined) is derived from, securities other than U.S. government securities, shares of registered money market funds under Rule 2a-7 of the Investment Company Act, securities issued by employees' securities companies, securities issued by qualifying majority owned subsidiaries of such entity, and securities issued by qualifying companies that are controlled primarily by such entity. We do not believe that we are an "investment company" as such term is defined in either Section 3(a)(1)(A) or Section 3(a)(1)(C) of the Investment Company Act.

With respect to Section 3(a)(1)(A), following the June PIPE Offering, our ownership or holding of TRX tokens is in excess of 40% of our total assets. Since we believe that the TRX token is not an investment security, we do not hold ourselves out as being engaged primarily, or propose to engage primarily, in the business of investing, reinvesting, or trading in securities within the meaning of Section 3(a)(1)(A) of the Investment Company Act.

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With respect to Section 3(a)(1)(C), we believe we satisfy the elements of Rule 3a-1 and therefore are deemed not to be an investment company under, and we intend to conduct our operations such that we will not be deemed an investment company under, Section 3(a)(1)(C). We believe that we are not an investment company pursuant to Rule 3a-1 under the Investment Company Act because, on a consolidated basis with respect to wholly-owned subsidiaries but otherwise on an unconsolidated basis, no more than 45% of the value of the Company's total assets (exclusive of U.S. government securities, shares of registered money market funds under Rule 2a-7 of the Investment Company Act, and cash items) consists of, and no more than 45% of the Company's net income after taxes (for the last four fiscal quarters combined) is derived from, securities other than U.S. government securities, shares of registered money market funds under Rule 2a-7 of the Investment Company Act, securities issued by employees' securities companies, securities issued by qualifying majority owned subsidiaries of the Company, and securities issued by qualifying companies that are controlled primarily by the Company.

TRX tokens and other digital assets, as well as new business models and transactions enabled by blockchain technologies, present novel interpretive questions under the Investment Company Act. There is a risk that assets or arrangements that we have concluded are not securities could be deemed to be securities by the SEC or another authority for purposes of the Investment Company Act, which would increase the percentage of securities held by us for Investment Company Act purposes. The SEC has requested information from a number of participants in the digital assets' ecosystem, regarding the potential application of the Investment Company Act to their businesses. For example, in an action unrelated to the Company, in February 2022, the SEC issued a cease-and-desist order under the Investment Company Act to BlockFi Lending LLC, in which the SEC alleged that BlockFi was operating as an unregistered investment company because it issued securities and also held more than 40% of its total assets, excluding cash, in investment securities, including the loans of digital assets made by BlockFi to institutional borrowers.

If we were deemed to be an investment company, Rule 3a-2 under the Investment Company Act is a safe harbor that provides a one-year grace period for transient investment companies that have a bona fide intent to be engaged primarily, as soon as is reasonably possible (in any event by the termination of such one-year period), in a business other than that of investing, reinvesting, owning, holding, or trading in securities, with such intent evidenced by the company's business activities and an appropriate resolution of its board of directors. The grace period is available not more than once every three years and runs from the earlier of (i) the date on which the issuer owns securities and/or cash having a value exceeding 50% of the issuer's total assets on either a consolidated or unconsolidated basis or (ii) the date on which the issuer owns or proposes to acquire investment securities having a value exceeding 40% of the value of such issuer's total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis. Accordingly, the grace period may not be available at the time that we seek to rely on Rule 3a-2; however, Rule 3a-2 is a safe harbor and we may rely on any exemption or exclusion from investment company status available to us under the Investment Company Act at any given time. Furthermore, reliance on Rule 3a-2, Section 3(a)(1)(C), or Rule 3a-1 could require us to take actions to dispose of securities, limit our ability to make certain investments or enter into joint ventures, or otherwise limit or change our service offerings and operations. If we were to be deemed an investment company in the future, restrictions imposed by the Investment Company Act — including limitations on our ability to issue different classes of stock and equity compensation to directors, officers, and employees and restrictions on management, operations, and transactions with affiliated persons — likely would make it impractical for us to continue our business as contemplated, and could have a material adverse effect on our business, results of operations, financial condition, and prospects.

***We are not subject to legal and regulatory obligations that apply to investment companies such as mutual funds and exchange-traded funds, or to obligations applicable to investment advisers.***

Mutual funds, ETFs and their directors and management are subject to extensive regulation as "investment companies" and "investment advisers" under U.S. federal and state law; this regulation is intended for the benefit and protection of investors. We are not subject to, and do not otherwise voluntarily comply with, these laws and regulations. This means, among other things, that the execution of or changes to our Treasury Reserve Policy or our TRX token strategy, our use of leverage, the manner in which our TRX tokens are custodied, our ability to engage in transactions with affiliated parties and our operating and investment activities generally are not subject to the extensive legal and regulatory requirements and prohibitions that apply to investment companies and investment advisers. For example, although a significant change to our Treasury Reserve Policy would require the approval of our Board, no shareholder or regulatory approval would be necessary. Consequently, our Board has broad discretion over the investment, leverage and cash management policies it authorizes, whether in respect of our TRX token holdings or other activities we may pursue, and has the power to change our current policies, including our strategy of acquiring and holding TRX tokens.

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***Our TRX token strategy exposes us to risk of non-performance by counterparties in the future.***

As of the date hereof, the Company does not have any material agreements with counterparties relating to the purchase or sale of TRX tokens. However, this may change in the future. Our TRX token strategy exposes us to the risk of non-performance by counterparties, whether contractual or otherwise. Risk of non-performance includes inability or refusal of a counterparty to perform because of a deterioration in the counterparty's financial condition and liquidity or for any other reason. For example, our execution partners, or other counterparties might fail to perform in accordance with the terms of our agreements with them, which could result in a loss of TRX tokens, a loss of the opportunity to generate funds, or other losses.

If we pursue any strategies to create income streams or otherwise generate funds using our TRX token holdings, we would become subject to additional counterparty risks. Any significant non-performance by counterparties could have a material adverse effect on our business, prospects, financial condition, and operating results.

Further, the broader digital assets industry is subject to counterparty risks, which could adversely impact the adoption rate, price, and use of TRX tokens. A series of recent high-profile bankruptcies, closures, liquidations, regulatory enforcement actions and other events relating to companies operating in the digital asset industry have highlighted the counterparty risks applicable to owning and transacting in digital assets. Although these bankruptcies, closures, liquidations and other events have not resulted in any loss or misappropriation of our TRX tokens, nor have such events adversely impacted our access to our TRX tokens, they have, in the short-term, likely negatively impacted the adoption rate and use of the TRX tokens. Additional bankruptcies, closures, liquidations, regulatory enforcement actions or other events involving participants in the digital assets industry in the future may further negatively impact the adoption rate, price, and use of the TRX token, limit the availability to us of financing collateralized by TRX tokens, or create or expose additional counterparty risks. Changes in the accounting treatment of our TRX token holdings could have significant accounting impacts, including increasing the volatility of our results.

The broader digital assets industry, including the technology associated with digital assets, the rate of adoption and development of, and use cases for, digital assets, market perception of digital assets, and the legal, regulatory, and accounting treatment of digital assets are constantly developing and changing, and there may be additional risks in the future that are not possible to predict.

***The price decrease of energy, a type of system resources on the TRON blockchain, could negatively affect the Company*.**

Bandwidth and energy are main types of resources on the TRON blockchain which are necessary for execution of different types of transactions. Except for query operations, the execution of all the transactions on the TRON blockchain consumes bandwidth. Bandwidth measures the byte size of a transaction on the blockchain. The larger the transaction is, the more bandwidth will be consumed. Energy measures the resources consumed by the TRON Virtual Machine (TVM) to execute a smart contract. Energy is only consumed when deploying or triggering a smart contract.

According to committee proposals available on Tronscan, the proposal #104 which proposed the modification of transaction fee of 1 unit of energy from 0.00021 TRX token to 0.0001 TRX token was approved by the SR and became effective on August 29, 2025. Because users consume energy to execute smart contracts on the TRON blockchain, the price decrease of energy has several implications and potential risks.

The effectiveness of proposal #104 means that less TRX is required to be burned (from 0.00021 TRX token to 0.0001 TRX token) to obtain a unit of energy; as a result, the cost for users to obtain energy through TRX burning decreases significantly, and therefore there will be less demand for energy rental. This change may:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Lower the yields
 in the energy rental market, as evidenced by JustLend DAO's downward adjustment of its base rate, which means the staking yield
 to be earned by the Company through sTRX generated from standard staking and energy rental is expected to be lower; this may cause
 the value of sTRX held by the Company to decline. Any such decline could negatively affect the Company's return on its sTRX
 holdings, which in turn could negatively impact the Company.

(ii) Lessen the deflationary
 pressure on the TRX token supply as fewer TRX tokens will be burned by users for obtaining energy.

(iii) Increase the on-chain transaction
 volume as transaction costs are lower.

(iv) Lower the TRX token threshold
 for executing smart contracts, which is expected to enable broader participation and expand the network's active user base.

(v) Lower the barriers for
 developers and dApps, which is expected to drive increased contract deployment and greater TRON ecosystem activity.

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**Risks Related to Our Corporate Structure**

***In 2023, the PRC government initiated a series of regulatory actions and statements to regulate business operations in certain areas in Mainland China, including cracking down on illegal activities in the securities market, enhancing supervision over Mainland China-based companies listed overseas using the variable interest entity structure, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement. We are subject to PRC laws and regulations related to the current or future business operations of our subsidiary in Hong Kong and any changes in such laws and regulations and interpretations may impair its ability to operate profitably, which could result in a material negative impact on its operations and/or the value of our Common Stock or other securities.***

Although we have direct ownership of our subsidiary in Hong Kong and currently do not have or intend to have any subsidiary or any contractual arrangement to establish a VIE structure with any entity in Mainland China, we are still subject to certain legal and operational risks associated with our connections to Hong Kong. The legal and operational risks associated in Mainland China also apply to our current or future operations in Hong Kong, and we face the risks and uncertainties associated with the complex and evolving PRC laws and regulations and as to whether and how the recent PRC government statements and regulatory developments, such as those relating to data and cyberspace security and anti-monopoly concerns, would be applicable to a company such as our subsidiary and our Company, given the Hong Kong aspects of our subsidiary in Hong Kong and the potential that the Chinese government may exercise significant oversight over the conduct of business in Hong Kong. In the event we were to become subject to PRC laws and regulations, we could incur material costs to ensure compliance, and might be subject to fines, experienced evaluation of securities or delisting, restrictions on securities offerings, and/or no longer be permitted to continue business operations as presently conducted. Our organizational structure involves risks to the investors, and Chinese regulatory authorities could disallow this structure, which would likely result in a material change in our subsidiary's operations and/or a material change in the value of our Common Stock or other securities, including the risk that such event could cause the value of our Common Stock or other securities to decline. Moreover, there are substantial uncertainties regarding the interpretation and application of PRC laws and regulations including, but not limited to, the laws and regulations potentially related to our business and the enforcement and performance of our arrangements with customers in certain circumstances. The laws and regulations may be subject to future changes, and their official interpretation and enforcement may involve substantial uncertainty. The effectiveness and interpretation of newly enacted laws or regulations, including amendments to existing laws and regulations, may be delayed, and our business may be affected if we rely on laws and regulations which are subsequently adopted or interpreted in a manner different from our understanding of these laws and regulations. We cannot predict what effect the interpretation of existing or new PRC laws or regulations may have on our business.

***We may become subject to a variety of PRC laws and other obligations regarding M&A Rules, the Trial Measures and data security, and any failure to comply with applicable laws and obligations could potentially have a material and adverse effect on our business, financial condition and results of operations.***

The Regulations on Mergers and Acquisitions of Domestic Companies by Foreign Investors, or the M&A Rules, adopted by six PRC regulatory agencies on August 8, 2006, and amended on June 22, 2009, requires an overseas special purpose vehicle formed for listing purposes through acquisitions of domestic companies in Mainland China and controlled by companies or individuals of Mainland China to obtain the approval of the CSRC, prior to the listing and trading of such special purpose vehicle's securities on an overseas stock exchange. In addition, on December 24, 2021, the CSRC released the Administrative Regulations of the State Council Concerning the Oversea Issuance of Security and Listing by Domestic Enterprise (Draft for Comments) (the "Draft Administrative Regulations") and the Measures for the Overseas Issuance of Securities and Listing Record-Filings by Domestic Enterprises (Draft for Comments) (the "Draft Filing Measures"), collectively the "Draft Rules on Overseas Listing", for public opinion.

As of the date of this Annual Report, we have no subsidiary, VIE structure or any direct operations in Mainland China, nor do we intend to have any subsidiary or VIE structure or to acquire any equity interests in any domestic companies in Mainland China, and we have not generated any revenues or profits in Mainland China. Additionally, we do not intend to operate in Mainland China in the foreseeable future. As such, we do not believe we would be subject to the M&A Rules, or would be required to file with the CSRC under the Trial Measures. Moreover, pursuant to the Basic Law of the Hong Kong Special Administrative Region, or the Basic Law, PRC laws and regulations shall not be applied in Hong Kong except for those listed in Annex III of the Basic Law (which is confined to laws relating to national defense, foreign affairs and other matters that are not within the scope of autonomy). Therefore, we believe, as of the date of this Form 10-K, the CSRC's approval or review is not required for the listing and trading of our Common Stock in the U.S. exchange as provided under the M&A Rules and the Trial Measures. We believe it is not necessary to obtain, and we have not obtained, an opinion from PRC or Hong Kong counsel to consult on the above.

SRM Ltd has two independent contractors in Hong Kong, which is a part of the PRC. In 2023, the PRC government initiated a series of regulatory actions and statements to regulate business operations in certain areas in China with little advance notice, including cracking down on illegal activities in the securities market, enhancing supervision over China-based companies listed overseas using a VIE structure, adopting new measures to extend the scope of cybersecurity reviews, and expanding its efforts in anti-monopoly enforcement. Since these statements and regulatory actions are new, it is highly uncertain how soon the legislative or administrative regulation making bodies will respond and what existing or new laws or regulations or detailed implementations and interpretations will be modified or promulgated, if any. It is also highly uncertain what the potential impact such modified or new laws and regulations will have on our Hong Kong subsidiary. These actions could result in a material change in the Hong Kong aspects of our operations and/or to the value of our Common Stock or other securities.

Statements by the PRC government have indicated an intent to exert more oversight and control over offerings that are conducted overseas and/or foreign investments in China based issuers. On July 6, 2021, the General Office of the Communist Party of China Central Committee and the General Office of the State Council jointly issued a document to crack down on illegal activities in the securities markets and promote the high-quality development of the capital markets, which, among other things, requires the relevant governmental authorities to strengthen cross-border oversight of law-enforcement and judicial cooperation, to enhance supervision over China-based companies listed overseas, and to establish and improve the system of extraterritorial application of the PRC securities laws.

On December 24, 2021, the CSRC released the Draft Administrative Provisions and the Draft Filing Measures, both of which had a comment period that expired on January 23, 2022. The Draft Administrative Provisions and Draft Filing Measures regulate the administrative system, record-filing management, and other related rules in respect of the direct or indirect overseas issuance of listed and traded securities by "domestic enterprises". The Draft Administrative Provisions specify that the CSRC has regulatory authority over the "overseas securities offering and listing by domestic enterprises", and requires "domestic enterprises" to complete filing procedures with the CSRC if they wish to list overseas. On February 17, 2023, the CSRC released the Trial Measures and five supporting guidelines, which came into effect on March 31, 2023. According to the Trial Measures, domestic companies that seek to offer or list securities overseas, both directly and indirectly, should fulfill the filing procedures and report relevant information to the CSRC; any failure to comply with such filing procedures may result in administrative penalties, such as an order to rectify, warnings, and fines. On April 2, 2022, the CSRC published the Draft Archives Rules, for public comment. These rules state that in the overseas listing activities of domestic companies, domestic companies, as well as securities companies and securities service institutions providing relevant securities services thereof, should establish a sound system of confidentiality and archival work, shall not disclose state secrets, or harm the state and public interests.

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Under the Trial Measures and the Guidance Rules and Notice, Chinese domestic companies conducting overseas securities offering and listing activities, either in direct or indirect form, shall complete filing procedures with the CSRC pursuant to the requirements of the Trial Measures within three working days following their submission of initial public offerings or listing application. The companies that have already been listed on overseas stock exchanges or have obtained the approval from overseas supervision administrations or stock exchanges for its offering and listing and will complete their overseas offering and listing prior to September 30, 2023 are not required to make immediate filings for its listing, yet need to make filings for subsequent offerings in accordance with the Trial Measures. Companies that have already submitted an application for an initial public offering to overseas supervision administrations prior to the effective date of the Trial Measures but have not yet obtained the approval from overseas supervision administrations or stock exchanges for the offering and listing, shall arrange for the filing within a reasonable time period and shall complete the filing procedure before such companies' overseas issuance and listing.

Management understands that as of the date of this Form 10-K, the Company has no operations in Mainland China and is not required to complete filing procedures with the CSRC pursuant to the requirements of the Trial Measures. While the Company has no current operations in Mainland China, should we have any future operations in Mainland China and should we (i) fail to receive or maintain such permissions or approvals, (ii) inadvertently conclude that such permissions or approvals are not required, or (iii) applicable laws, regulations, or interpretations change and require us to obtain such permissions or approvals in the future, we may face sanctions by the CSRC, the CAC or other PRC regulatory agencies. These regulatory agencies may also impose fines and penalties on our potential operations in Mainland China, as well as limit our ability to pay dividends outside of Mainland China, limit our operations in Mainland China, delay or restrict the repatriation of the proceeds from our offerings into Mainland China or take other actions that could have a material adverse effect on our business as well as the trading price of our Common Stock or other securities. If we have PRC operations in the future, we may be required to restructure our operations to comply with such regulations or potentially cease operations in the PRC entirely. The CSRC, the CAC or other PRC regulatory agencies also may take actions requiring us, or making it advisable for us, to halt our offerings before settlement and delivery of our Common Stock or other securities. In addition, if the CSRC, the CAC or other regulatory PRC agencies later promulgate new rules requiring that we obtain their approvals for our offerings, we may be unable to obtain a waiver of such approval requirements, if and when procedures are established to obtain such a waiver. If we have PRC operations in the future, any action taken by the PRC government could significantly limit or completely hinder our operations in the PRC and our ability to offer or continue to offer securities to investors, and could cause the value of such securities to decline.

Furthermore, on July 10, 2021, the CAC issued a revised draft of the Measures for Cybersecurity Review for public comment, which required that, among others, in addition to any "operator of critical information infrastructure", any "data processor" controlling personal information of no less than one million users which seeks to list in a foreign stock exchange should also be subject to cybersecurity review, and further elaborated the factors to be considered when assessing the national security risks of the relevant activities. On December 28, 2021, the CAC, the National Development and Reform Commission ("NDRC"), and several other administrations jointly issued the revised Measures for Cybersecurity Review, which became effective and replaced the existing Measures for Cybersecurity Review on February 15, 2022. According to the Revised Review Measures, if an "online platform operator" that is in possession of personal data of more than one million users intends to list in a foreign country, it must apply for a cybersecurity review. Based on a set of Q&A published on the official website of the State Cipher Code Administration in connection with the issuance of the Revised Review Measures, an official of the said administration indicated that an online platform operator should apply for a cybersecurity review prior to the submission of its listing application with non-PRC securities regulators. Moreover, the CAC released the draft of the Regulations on Network Data Security Management in November 2021 for public consultation, which among other things, stipulates that a data processor listed overseas must conduct an annual data security review by itself or by engaging a data security service provider and submit the annual data security review report for a given year to the municipal cybersecurity department before January 31 of the following year. Given the recency of the issuance of the Revised Review Measures and their pending effectiveness, there is a general lack of guidance and substantial uncertainties exist with respect to their interpretation and implementation. It remains unclear whether a Hong Kong company which collects personal information from PRC individuals shall be subject to the Revised Review Measures. We do not currently expect the Revised Review Measures to have an impact on our business, our operations or our offerings as we do not believe that our subsidiary would be deemed to be an "operator of critical information infrastructure" or a "data processor" controlling personal information of no less than one million users, that would be required to file for cybersecurity review before listing in the U.S.. However, there remains uncertainty in the interpretation and enforcement of relevant PRC cybersecurity laws and regulations. If the Revised Review Measures are adopted into law in the future and if our subsidiary is deemed to be an "operator of critical information infrastructure" or a "data processor" controlling personal information of no less than one million users, our operation and the listing of our Common Stock or other securities in the U.S. could be subject to CAC's cybersecurity review.

As of the date of this Annual Report, Hong Kong does not have similar regulations as of the PRC to extend oversight and control over offerings that are conducted overseas. Hong Kong does not have similar regulation as of the Trial Measures and the Guidance Rules and Notice, and Measures for Cybersecurity Review of the PRC. However, the legal and operational risks associated in Mainland China apply to operations in Hong Kong, and we face the risks and uncertainties associated with the complex and evolving PRC laws and regulations and as to whether and how the recent PRC government statements and regulatory developments, such as those relating to data and cyberspace security and anti-monopoly concerns, would be applicable to a company such as our subsidiary and our Company, given the Hong Kong aspects of our subsidiary in Hong Kong and the possibility that the Chinese government may exercise significant oversight over the conduct of business in Hong Kong. In the event we or our subsidiary were to become subject to PRC laws and regulations, we could incur material costs to ensure compliance, and we or our subsidiary might be subject to fines, experienced evaluation of securities or delisting, restrictions on securities offerings, and/or no longer be permitted to continue business operations as presently conducted. In the event that (i) the PRC government expands the categories of industries and companies whose foreign securities offerings are subject to review by the CSRC or the CAC or if applicable laws, regulations or interpretations change and we are required to obtain such permissions or approvals, (ii) we inadvertently conclude that relevant permissions or approvals were not required or (iii) we did not receive or maintain relevant permissions or approvals required, any action taken by the PRC government could significantly limit or completely hinder our operations in Hong Kong and our ability to offer or continue to offer securities to investors and could cause the value of our Common Stock or other securities to decline.

We believe that our current connections to Hong Kong are not substantial. Although SRM Ltd, our wholly-owned subsidiary is a Hong Kong company, it has only two independent contractors and its function is to provide administrative support for the procurement and delivery process which is controlled by the Company directly with its PRC suppliers. As to our TRX treasury business, our Treasury Wallet is located in Hong Kong; however, all operating decisions relating to the movement of TRX to and from the Treasury Wallet are made by our Board, a majority of whom are not based in Hong Kong or the PRC.

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***Certain of our operations are conducted in Hong Kong. It is possible that the Chinese government may exercise significant oversight and discretion over the conduct of such business and may influence such operations, which could potentially significantly interfere with, alter, limit or hinder our current presence in Hong Kong, and certain scenarios, possibly affect the value of our Common Stock or other securities. Changes in the policies, regulations, rules, and the enforcement of laws of the Chinese government may also occur quickly and our assertions and beliefs of the risk imposed by the PRC legal and regulatory system cannot be certain. There are uncertainties regarding the enforcement of PRC laws, and rules and regulations in China can change quickly with little advance notice. The Chinese government may intervene or influence the Hong Kong aspects of our operations, which could interfere with our operations and/or affect the value of the Common Stock or other securities we are registering for sale.***

In 2023, the PRC government initiated a series of regulatory actions and statements to regulate business operations in certain areas in Mainland China, including a cracking down on illegal activities in the securities market, enhancing supervision over Mainland China-based companies listed overseas using the VIE structure, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement. Given the recent statements by the Chinese government indicating an intent to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in Mainland China-based issuers, any extension of these actions, statements or policies into Hong Kong could potentially significantly interfere with, alter, limit or hinder our current presence in Hong Kong.

There are uncertainties regarding the enforcement of PRC laws, and rules and regulations in China can change with little advance notice. The Chinese government may intervene or influence our Hong Kong subsidiary or our TRX treasury business at any time, which could result in a material change in the Hong Kong aspects of our operations and/or the value of the securities we are registering for sale.

***It may be difficult to enforce a judgment of U.S. courts for civil liabilities under U.S. federal securities laws against us, our directors or officers in Mainland China and Hong Kong.***

As of the date of this Annual Report, our Chairman and Director Mr. Weike Sun and our Director Mr. Zhihong Liu are based in Hong Kong. We do not have any directors or officers located in Mainland China. In addition, the Company retains sole control of the Treasury Wallet and private keys in Hong Kong, and Mr. Weike Sun and Mr. Zi Yang are authorized by the Board to make the arrangements for safeguarding and operating the private keys of the Treasury Wallet. As a result, it may be difficult for investors to effect service of process within the U.S. upon such directors, or to enforce judgments obtained in U.S. courts against them in Mainland China or Hong Kong, including judgments predicated upon the civil liability provisions of the securities laws of the U.S. or any state in the U.S. and whether in connection with any claim relating to the Treasury Wallet, or otherwise.

The recognition and enforcement of foreign judgments are provided for under the PRC Civil Procedures Law. The PRC courts may recognize and enforce foreign judgments in accordance with the requirements of the PRC Civil Procedures Law based either on treaties between China and the country where the judgment is made or on principles of reciprocity between jurisdictions. China does not have any treaties or other forms of written arrangement with the United States that provide for the reciprocal recognition and enforcement of foreign judgments. In addition, according to the PRC Civil Procedures Law, the PRC courts will not enforce a foreign judgment if they decide that the judgment violates the basic principles of PRC laws or national sovereignty, security or public interest. As a result, it is uncertain whether and on what basis a PRC court would enforce a judgment rendered by a court in the United States. In addition, it will be difficult for U.S. shareholders to originate actions against us in China in accordance with PRC laws because it will be difficult for U.S. shareholders, by virtue only of holding our Common Stock or other securities, to establish a connection to the PRC for a PRC court to have jurisdiction as required under the PRC Civil Procedures Law.

There is also uncertainty as to whether the courts of Hong Kong would (i) recognize or enforce judgments of United States courts obtained against us or our directors or officers predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States or (ii) entertain original actions brought in Hong Kong against us or our directors or officers predicated upon the securities laws of the United States or any state in the United States. Currently, there are no treaties or reciprocity protocols in place between the U.S. and the PRC relating to the enforceability of civil judgments.

In Hong Kong, foreign judgments can be enforced under statute under the Foreign Judgments (Reciprocal Enforcement) Ordinance or under common law. The Foreign Judgments (Reciprocal Enforcement) Ordinance is a registration scheme for the recognition and enforcement of foreign judgments based on reciprocity but the United States is not a designated country under the Foreign Judgments (Reciprocal Enforcement) Ordinance. As a result, a judgment rendered by a court in the United States, including as a result of administrative actions brought by regulatory authorities, such as the SEC, and other actions, will not be enforced by the Hong Kong courts under the statutory regime. In addition, the Supreme People's Court of the PRC and the Government of Hong Kong have entered into the "Arrangement on Reciprocal Recognition and Enforcement of Judgments in Civil and Commercial Matters by the Courts of the Mainland and of the Hong Kong Special Administrative Region pursuant to Choice of Court Agreements between Parties Concerned," or the Arrangement. The Mainland Judgements (Reciprocal Enforcement) Ordinance gave effect to the Arrangement and is a registration scheme for recognition and enforcement of PRC judgements based on reciprocity. Other than the Arrangement, Hong Kong has not entered into any multilateral convention or bilateral treaty regarding the recognition and enforcement of foreign judgments. Accordingly, any judgments rendered by a court in the United States will need to be enforced under common law. In order to enforce a foreign judgment under common law in Hong Kong, the judgment must meet certain criteria before it can be enforced, such as the judgment being final and conclusive.

The foregoing risks make it uncertain that stockholders or others will be able to obtain a legally binding judgment against the Company or our directors or officers, and if such a judgment is ultimately obtained, the process could be time consuming and costly. We believe it is not necessary to obtain, and we have not obtained, an opinion from PRC or Hong Kong counsel to consult on the above.

**ITEM 1B. UNRESOLVED STAFF COMMENTS**

Not applicable.

**ITEM 1C. CYBERSECURITY**

**Cybersecurity Risk Management and Strategy**

We have developed and maintain a cybersecurity risk management methodology intended to protect the confidentiality, integrity, and availability of our critical systems and information. Our cybersecurity risk management methodology is integrated into our overall enterprise risk management, and shares common methodologies, reporting channels and governance processes that apply across the Company to other legal, compliance, strategic, operational, and financial risk areas. As part of our overall risk management processes and procedures, we have instituted a cybersecurity awareness designed to identify, assess and manage material risks from cybersecurity threats, including by engaging a third-party cybersecurity service provider, which communicates directly with our management and compliance personnel. The cyber risk management methodology involves risk assessments, implementation of security measures and ongoing monitoring of systems and networks, including networks on which we rely. Through our cybersecurity awareness, the current threat landscape is actively monitored in an effort to identify material risks arising from new and evolving cybersecurity threats. We may engage external experts, including cybersecurity assessors, consultants and auditors to evaluate cybersecurity measures and risk management processes as needed. We also depend on and engage various third parties, including suppliers, vendors and service providers in connection with our operations.

Our cybersecurity risk management methodology includes:

● risk assessments designed to help identify material cybersecurity risks to our critical systems, information, services, and our broader enterprise IT environment;

● individuals, including employees and external third-party service providers, who are responsible for managing our cybersecurity risk assessment processes, our security controls, and our response to cybersecurity incidents;

● the use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security controls;

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● a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents; and

● a third-party risk management process for service providers, suppliers, and vendors.

We have not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected us, including our operations, business strategy, results of operations, or financial condition. We face risks from cybersecurity threats that, if realized, are reasonably likely to materially affect us, including our operations, business strategy, results of operations, or financial condition.

**Cybersecurity Governance**

Our Board provides strategic oversight on cybersecurity matters, including material risks associated with cybersecurity threats. The Board has delegated to the Audit Committee oversight of cybersecurity and other information technology risks. The Audit Committee oversees management's implementation of our cybersecurity risk management methodology. Our Board and the Audit Committee receives periodic updates from our Chief Financial Officer and more frequently as needed, regarding the overall state of our cybersecurity preparedness, information on the current threat landscape, and material risks from cybersecurity threats and cybersecurity incidents. The Audit Committee and our management team are informed about and monitor the prevention, detection, mitigation, and remediation of cybersecurity incidents, including through the receipt of notifications from third-party service providers.

The Audit Committee reports to the full Board regarding cybersecurity activities. The full Board also receives briefings from management on cyber risk issues and best practices. Our management team is responsible for assessing and managing our material risks from cybersecurity threats. The team has primary responsibility for developing and maintaining our overall cybersecurity risk methodology and supervises both our internal cybersecurity personnel and our retained external cybersecurity consultants. Our management team supervises efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which may include briefings from internal security personnel; threat intelligence and other information obtained from governmental, public or private sources, including external consultants engaged by us; and alerts and reports produced by security tools deployed in the information technology environment.

**ITEM 2. PROPERTIES**

Our principal executive office is located in a flexible shared office facility located at 941 W Morse Blvd., Suite 100, Winter Park, FL 32789, with lease terms on a month-to-month basis. On August 8, 2025, the Company entered into a Lease Agreement (the "Lease") with Trump Tower Commercial LLC for the leasing of 2,791 rentable square feet located at 725 Fifth Avenue, New York, NY 10022 with a term commencing September 1, 2025 and ending October 31, 2028. We believe that these facilities are adequate for our needs, including providing the space and infrastructure to accommodate our development work based on our current operating plan. We do not own any real estate.

**ITEM 3. 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. There are no actions, suits, proceedings, inquiries or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of the Company or any of our subsidiaries, threatened against or affecting the Company, our common stock, any of our officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

**ITEM 4. MINE SAFETY DISCLOSURES.**

Not applicable.

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**PART II**

**ITEM 5. MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES**

Our common stock trades on the Nasdaq Capital Market under the symbol "TRON". The closing price of our common stock on the Nasdaq Capital Market on March 18, 2026 was $2.02.

***Holders***

As of March 18, 2026, there were 21 shareholders of record. Since certain shares of our common stock are held by brokers and other institutions on behalf of stockholders, the foregoing number of holders of our common stock is not representative of the number of beneficial holders of our common stock.

***Dividends***

We do not anticipate paying any cash dividends on our common stock in the foreseeable future and we intend to retain all of our earnings, if any, to finance our growth and operations and to fund the expansion of our business. Payment of any dividends will be made in the discretion of our Board of Directors, after our taking into account various factors, including our financial condition, operating results, current and anticipated cash needs and plans for expansion. No dividends may be declared or paid on our shares of common stock, unless a dividend, payable in the same consideration or manner, is simultaneously declared or paid, as the case may be, on our shares of preferred stock, if any.

***Issuance of Unregistered Securities***

During the year ended December 31, 2025, the Company issued: (i) 712,133 shares of its common stock valued at $452,748 upon conversion of 712,133 pre-funded warrants; (ii) 25,000 shares of its common stock valued at $16,250 in connection with a Consulting Agreement; (iii) 500,000 shares of its common stock in connection with a Stock Purchase Agreement Gameverse Interactive Corp ("Gameverse"), valued at $190,500, pursuant to which the Company received 132,000 share of common stock of Gameverse; (iv) 50,000 shares of its common stock valued at $28,145 in connection with a consulting agreement; (v) 1,270,000 shares of its common stock for the exercise of stock options, the proceeds from which totaled $696,007; (vi) 18,802 shares and 135,846 shares of its common stock for the cashless exercise of options and warrants; (vii) 8,928,571 shares of its common stock for the exercise of warrants with proceeds totaling $5,803,571; (viii) 9,518,571 shares of its common stock for the conversion of 5,000 Series A Preferred shares which includes 590,000 shares related to fees associated with the transaction; (ix) 220,000,000 shares of its common stock for the exercise of warrants for 312,500,100 TRX tokens valued at $110,000,000; (x) 535,715 shares of its common stock for the exercise of placement warrants for cash totaling $348,215; and (xi) 3,663,798 shares of its common stock for the cashless exercise of advisory warrants.

These issuances were made in reliance on an exemption from registration set forth in Section 4(a)(2) of the Securities Act, as transactions by an issuer not involving a public offering.

***Purchases of Equity Securities by the Issuer and Affiliated Purchasers***

There were no issuer purchases of equity securities during the years ended December 31, 2025.

**ITEM 6. RESERVED**

Not applicable to a smaller reporting company.

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**ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS**

This annual report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may", "should", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential" or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Our unaudited financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles. The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this annual report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this annual report.

In this annually report, unless otherwise specified, all dollar amounts are expressed in United States dollars and all references to "common stock" refer to the common stock in our capital stock.

As used in this annual report and unless otherwise indicated, the terms "we", "us", "our", "Tron" and the "Company" mean Tron Inc. and its consolidated subsidiary unless the context dictates otherwise.

**Our Business**

**General**

Tron Inc. (formerly SRM Entertainment, Inc.), is a publicly traded company pioneering blockchain-integrated treasury strategies. As the public company with the largest TRON (TRX) tokens holdings, the Company is committed to transparency, long-term value creation and the adoption of decentralized financial tools. In addition, through our wholly owned subsidiary, the Company designs, develops, and manufactures custom merchandise which includes toys and souvenirs for the world's largest theme parks and other entertainment venues. Many of the Company's products are based on award winning multi-billion-dollar entertainment franchises that are featured in popular movies and books. The products are distributed worldwide at Walt Disney Parks and Resorts, Universal Parks and Destinations, United Parks and Resorts – SeaWorld, Six Flags and other attractions.

Tron Inc. is a Nevada corporation that was incorporated on April 22, 2022. SRM Entertainment Limited ("SRM Ltd"), a limited company was incorporated in the Hong Kong Special Administrative Region of the People's Republic of China on January 23, 1981. The Company acquired SRM Ltd on August 14, 2023. The consolidated companies are collectively referred to as the Company.

On June 16, 2025, we entered into the June Securities Purchase Agreement (as defined below) with Bravemorning (as defined below). On August 29, 2025, Bravemorning acquired 220,000,000 shares of the Company's common stock, par value $0.0001 (the "Common Stock"), via its exercise of June PIPE Warrants (as defined below) with total dollar amount of $110,000,000, and upon such acquisition, Bravemorning became the owner of approximately 86.6% of the Company's outstanding shares of Common Stock. Upon the August Warrant Exercise (as defined below) in connection with the June Securities Purchase Agreement (as defined below), Bravemorning also held 100,000 Preferred Stock Shares (as defined below), which are convertible into an additional 200,000,000 shares of Common Stock and which vote on an as-converted basis with the Common Stock; and Bravemorning's ownership of Common Stock and Preferred Stock Shares gave it an aggregate voting power of approximately 92.5%. As of March 18, 2026, Bravemorning holds an aggregate voting power of approximately 88.5%. Mr. Weike Sun, who is a director of the Company, is the sole shareholder of Bravemorning. See "*Recent Developments*" for more information on these transactions and also on the Employment Agreement Amendments, the Name Change, the Symbol Change and the Charter Amendment (all as defined below). These moves reflect the Company's broader strategic transformation and its commitment to aligning more closely with the TRON blockchain ecosystem, following the launch of its Tron-focused treasury strategy. The Company's ticker change to "TRON" reinforces its brand identity and positions it as a key corporate player in the rapidly evolving blockchain and digital asset economy.

On December 29, 2025, the Company announced an $18 million strategic equity investment from Justin Sun ("December Investment"). The closing of the December Investment occurred on January 8, 2026. See "*Recent Developments*" for more information on this transaction.

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**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").

**Company Overview**

***Toy and Souvenir Business***

The Company 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.

**<u>Content Providers</u>**<u>:</u> We have licensing relationships with many established content providers, and our products appear in venues such as Walt Disney, United Parks and Resorts (f/k/a SeaWorld), Universal Studios, Six Flags, Herschend Family Entertainment 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.

**<u>Consumers</u>**: 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.

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***TRX Tokens Treasury***

The TRX token is the governance token of the TRON network, which is used to pay for on-chain transaction fees, participate in network governance and incentivize validators who generate transaction blocks for the network. Users can also stake TRX tokens to vote for validators who facilitate the block validation process and receive staking rewards.

We believe that the TRX token is an attractive digital asset which can create long-term value for our shareholders by capitalizing on the global adoption of blockchain and digital innovation.

The Company has adopted a Treasury Reserve Policy ("Treasury Reserve Policy") which set out our treasury management and capital allocation strategies, under which our treasury reserve assets will consist of:

● cash and cash equivalents and short-term investments ("Cash Assets") held by us that exceed working capital requirements; and

● TRX tokens held by us, as the primary treasury holding asset on an ongoing basis, subject to market conditions and anticipated needs of the business for Cash Assets.

The TRX token is the native token of the TRON blockchain. As of March 18, 2026, the TRX token ranked number 6 by market valuation among all non-stablecoin crypto tokens globally. The Company's plan is to accumulate and hold TRX tokens in its treasury and stake substantially all TRX tokens to earn yield. The Company has been engaging primarily in liquid staking activities by staking TRX tokens in its treasury through JustLend DAO ("JustLend"), the leading decentralized finance ("DeFi") protocol on the TRON blockchain, whereby it stakes its digital assets (TRX tokens) into the JustLend protocol to support network operations and, in return, accrued network rewards. The JustLend platform generates yield through a combination of standard staking rewards (i.e. token rewards derived from delegating to super representative nodes) and "energy" rental income on the TRON blockchain (i.e. renting to other users the idle TRON "energy" resources entitled by TRX staking).

Under standard TRX staking mechanism, TRX stakers are able to participate in community governance by voting for super representatives. Yield from standard TRX staking generally refers to (1) energy and bandwidth obtained by users after staking TRX on the TRON blockchain and (2) the voting rewards in the form of TRX tokens obtained by users after voting for the super representatives. Energy rental generally refers to users earning rent by renting out the energy that is obtained by staking TRX on the TRON blockchain. According to the mechanism of the TRON blockchain, deploying or triggering smart contracts consumes energy; and if energy is insufficient, TRX token(s) will be burned to make up for the missing resources. Energy could be obtained by either staking TRX tokens or burning TRX tokens. Given the market demands, there are energy rental protocols in the market (such as JustLend Energy Rental), such that users can borrow energy without staking nor burning TRX tokens. Users who already have staked their TRX tokens on the TRON blockchain have the ability to lend their energy out to earn additional income.

The use cases of the TRX token include (but are not limited to):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) **Governance of TRON blockchain**: By staking their TRX token holdings, TRX token holders will be able to vote for super representative candidates. The top 27 super representative candidates with the highest votes will become the super representative nodes (the "SR") and be able to participate in validation and block production. The super representative candidates who rank 28th to 127th are called super representative partners (the "SR Partners"). Each of the SRs, SR Partners and other super representative candidates may initiate community proposals, but only SRs are entitled to vote for the proposals. As of March 18, 2026, the SRs of TRON blockchain include, among others, Google Cloud, Binance, HTX, Kraken, OKX, OKCoin Japan, Kiln, P2P.org, Nansen, and Abra Capital.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) **Transaction fees on TRON blockchain**: TRX token is primarily used to pay transaction fees on the TRON blockchain. Generally speaking, users of the TRON blockchain are required to utilize token resources (namely "bandwidth" and "energy") in their wallets to process transactions. Users can obtain such resources by either burning or staking TRX tokens.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) **Incentivizing SRs to maintain security and functionality of TRON blockchain:** Block generation rewards and voting rewards on the TRON blockchain are issued in the form of TRX token. An SR is entitled to block generation rewards, and voting rewards are distributed to both SRs and SR Partners.

The genesis supply of the TRX token was 100 billion. New tokens are generated currently at the rate of approximately 1.5% per annum as governance and block validation rewards. On the offsetting side, TRX token is burned by the users to pay transaction fees for on-chain activities. Consequently, the supply change of TRX token depends on how active the blockchain is. During the period from January 1, 2022 to March 18, 2026, TRX token has been in deflation at approximately 1.7% per annum. As of March 18, 2026, the supply of TRX token is approximately 94.8 billion. Currently there is no lock-up, and substantially all the TRX tokens are in circulation.

The TRON protocol, one of the largest blockchain-based operating systems in the world, offers public blockchain support of high throughput, high scalability, and high availability for all decentralized applications (DApps) in the TRON ecosystem.

The TRON mainnet was launched in June 2018. It marked the transition of TRX token from being an ERC-20 token on the Ethereum blockchain to the native governance token of TRON blockchain, an independent and standalone network.

Through years of development, TRON blockchain has been uniquely positioned as the dominant settlement protocol for on-chain stablecoin payment. As of March 18, 2026, TRON had over 371 million in total user wallets globally, hosting approximately 86.4 billion in TRC-20 USDT (Tether) accounting for approximately 46.9% of total USDT circulation.

TRON block generation is secured and validated by a diverse group of super representative nodes globally including major industry players such as Google Cloud, Binance, HTX, Kraken, OKX, OKCoin Japan, Kiln, P2P.org, Nansen, and Abra Capital.

The Company holds the treasury tokens in a self-managed hardware wallet (the "Treasury Wallet"). The board of directors of the Company (the "Board") has full control and access to the Treasury Wallet, which was set up by BiT Global Trust Limited ("BiT Global"). BiT Global is a licensed Trust or Company Service Provider under the licensing regime administered by the Companies Registry of Hong Kong and a trust company registered under section 78(1) of the Trustee Ordinance (Cap. 29) of Hong Kong, and is therefore a regulated custodian.

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The Treasury Wallet is safely kept in a secure location in Hong Kong controlled by BiT Global. It utilizes the proprietary technology and on-chain compliance monitoring services provided by BiT Global. Pursuant to the Self-Managed Wallet Services Agreement (the "BiT Global Services Agreement") entered into by the Company and BiT Global on June 26, 2025, BiT Global has set up the Treasury Wallet for the Company, licenses certain BiT Global technology to the Company, and provides monitoring services to the Company relating to on-chain wallet activities. The Company retains sole control of the Treasury Wallet and private keys in Hong Kong. Mr. Weike Sun and Mr. Zi Yang, our Directors, are authorized by the Board to make the arrangement for safeguarding and operating the private keys of the Treasury Wallet. Due to security considerations, the details of the private key arrangement are highly confidential and not for public disclosure. The Board is primarily responsible for verifying the existence of treasury token holdings. The Company's auditors also have inspected and verified the Treasury Wallet operations and the existence of the treasury token holdings. There currently is no insurance coverage on the treasury tokens.

The BiT Global Services Agreement contains customary provisions relating to fees, confidentiality, compliance with applicable law, indemnification, limitations of liability, and termination. The foregoing description of the BiT Global Services Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the BiT Global Services Agreement, which is incorporated herein by reference as Exhibit 10.30.

The Company has staked and plans to continue to stake TRX tokens in its treasury into Staked TRX (sTRX) tokens through JustLend, the leading DeFi protocol on the TRON blockchain which executes transactions through smart contracts, to accrue enhanced staking yield from both standard TRX staking and energy rental. JustLend is the DeFi staking platform designated by the Company to generate enhanced staking yield via the staked TRX token (sTRX). The Company has currently staked nearly 100% of the TRX tokens in its treasury into sTRX tokens. See *"Our TRX Tokens Holdings"* below. By holding sTRX tokens, the Company is able to accrue enhanced yields from both standard TRX staking and energy rental.

The staking rewards generated from staking TRX tokens into sTRX via JustLend are distributed according to the protocol's rules. Currently, 20% of the rewards are retained by the JustLend protocol as protocol revenue, while the remaining 80% are allocated to sTRX token holders on a pro-rata basis. BiT Global does not receive any portion of the staking rewards.

The staking of TRX tokens into sTRX tokens through JustLend was executed on the JustLend webpage. JustLend is a decentralized finance protocol, and the staking is governed by the Terms of Service of JustLend. There is no separate agreement between the Company and JustLend. The Company has not engaged in offline staking.

The TRX token is the native token of the TRON blockchain, and it serves as the utility token for various scenarios. The staked TRX token (sTRX) is a derivative token issued by the JustLend DAO protocol that represents the "staked" TRX tokens, and provides holders exposure to automatically accruing yield through standard TRX staking rewards and energy renting. Users can obtain sTRX tokens by staking TRX tokens on JustLend. The sTRX token is not fixed at a 1:1 conversion ratio with the TRX token; instead, the number of TRX tokens which can be exchanged from one sTRX token increases over time as rewards accumulate in the overall pool of staked tokens. As the voting rewards and energy rent accrue, the conversion ratio of the TRX token to the sTRX token increases gradually, so that the number of TRX tokens which can be obtained by users by unstaking and swapping from sTRX tokens back to TRX tokens increases accordingly. By holding sTRX tokens, the Company is able to accrue enhanced yields from both standard TRX staking and energy rental. For the avoidance of doubt, the sTRX token does not generate discrete staking rewards. Instead, the economic benefit of staking is reflected through a floating conversion rate between TRX and sTRX, which increases over time based on accrued protocol rewards. For comparison, the TRX token remains the native token of the TRON blockchain, and which can be used directly for transaction fee payments and community governance; whereas the sTRX token functions as a staking and yield-bearing certificate. On June 28, 2025 and August 28, 2025, 365,096,800 and 312,500,000 TRX tokens were converted into approximately 297,543,246 and approximately 252,133,646 sTRX tokens respectively, based on the real-time conversion ratio according to the JustLend webpage. According to the JustLend DAO documentation, users who unstake their sTRX must wait 14 days before they can withdraw the unstaked TRX by clicking "Withdraw" on the same page.

As of the date of this Form 10-K, the Company does not have any material agreements with counterparties relating to the purchase or sale of TRX tokens. To date, the TRX tokens held in the Company's treasury were received (i) as payment in kind from the Company's controlling shareholder in connection with the issuance of Series B Preferred Stock and warrant shares in connection with the June Securities Purchase Agreement (as defined below); and (ii) as a result of the token sale and purchase transactions under the BGDL Token S&P Agreement (as defined below).

Our TRX token strategy generally involves from time to time, subject to market conditions, (i) issuing debt or equity securities or engaging in other capital raising transactions with the objective of using the proceeds to purchase TRX tokens, and (ii) acquiring TRX tokens with our liquid assets that exceed working capital requirements. We intend to fund further TRX token acquisitions primarily through issuances of Common Stock and a variety of fixed-income instruments, including debt, convertible notes and preferred stock.

We view our TRX tokens holdings as long-term holdings and expect to continue to accumulate TRX tokens. We have not set any specific target for the amount of TRX tokens we seek to hold, and we will continue to monitor market conditions in determining whether to engage in additional financings to purchase additional TRX tokens. This overall strategy also contemplates that we may (i) enter into additional capital raising transactions that are collateralized by our TRX tokens holdings, and (ii) consider pursuing strategies to create income streams or otherwise generate funds using our TRX tokens holdings.

The primary focus of the business of the Company is the accumulation of TRX tokens with the goal to realize long-term value creation through price appreciation and staking yield. The sTRX token, being a derivative token that represents the "staked" TRX token, provides exposure to additional yield from standard TRX staking rewards and energy renting. The Company currently has no intention to use its TRX token reserve to support or finance its operating activities. However, the Company will not rule out the possibility of doing so in the future, subject to its business or financing needs. Further, save for the USDT (Tether) stablecoins received by the Company under the December Investment (as defined below), the Company currently does not plan to hold any crypto assets other than TRX tokens and sTRX tokens which were obtained from TRX staking.

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***TRON Blockchain***

Founded in 2017 by Justin Sun, TRON is an open blockchain network that supports smart contracts and decentralized applications. Justin Sun oversaw development of the TRON blockchain prior to the establishment of TRON DAO in 2021.

The TRON blockchain is a public blockchain with high throughput, cost-efficient capacity which is widely used as decentralized infrastructure by stablecoins, decentralized finance (DeFi), and other decentralized applications (DApp). The TRON Virtual Machine (TVM) supports the deployment and execution of smart contracts, with the network operating under a Delegated Proof-of-Stake (DPoS) consensus mechanism which allows the holders of the blockchain's native tokens to participate in community governance by staking, voting and election of validators.

The latest major developments of the TRON blockchain include:

- In August 2025, the TRON community voted and approved the energy price amendment proposal, lowering the unit price of energy from 0.00021 TRX to 0.00010 TRX in August 2025 (Proposal #104), further reducing the transaction fees of the TRON blockchain. See "*Recent Developments – Lowering of Transaction Fees*" and "*Risk Factors - The price decrease of energy, a type of system resources on the TRON blockchain, could negatively affect the Company.*"

- In May 2025, TRON blockchain completed the GreatVoyage-v4.8.0 (Kant) upgrade. It aims at enhancing the blockchain's compatibility with Ethereum (following the Cancun upgrade) to make it easier for developers to migrate applications from Ethereum to TRON blockchain.

Justin Sun does not serve as an executive officer of the Company. More specifically, Justin Sun does not hold any officer position for the Company or any subsidiary thereof, he is not in charge of any business unit, and he does not perform any policy making functions. He acts solely in an advisory role as an independent contractor, pursuant to the terms of the Sun Advisory Agreement, as defined and further described below.

 

***Our TRX Tokens Holdings***

Upon completion of the June PIPE Offering (as defined below), the Company received 365,096,845 TRX tokens, being part of the Consideration Tokens (as defined below) from Bravemorning (as defined below). Upon completion of the August Warrant Exercise (as defined below), the Company received an additional 312,500,100 TRX tokens, being the Warrant Exercise Tokens (as defined below) from Bravemorning. As of March 18, 2026, the Company holds approximately 9,769,626 TRX tokens and approximately 549,676,892 sTRX tokens.

An aggregate of 365,096,800 TRX tokens of the Consideration Tokens held by the Company have been "staked" on JustLend, a decentralized finance (DeFi) protocol, on June 28, 2025 in exchange for approximately 297,543,246 Staked TRX (sTRX) tokens. 312,500,000 TRX tokens of the Warrant Exercise Tokens held by the Company have been "staked" on JustLend on August 28, 2025 in exchange for approximately 252,133,646 sTRX tokens. "Staking" is a process commonly used in the blockchain industry that allows network participants to earn rewards by locking their tokens in wallets. The sTRX token is a derivative token that represents the "staked" TRX tokens, which can automatically generate yield (through the combination of standard TRX staking rewards and energy renting) for the token holders. The sTRX token does not generate discrete staking rewards. Instead, the economic benefit of staking is reflected through a floating conversion rate between TRX and sTRX, which increases over time based on accrued protocol rewards.

Therefore, out of the 677,596,945 TRX tokens received by the Company from the June PIPE Offering and the August Warrant Exercise, the Company has staked 677,596,800 TRX tokens (which is nearly 100% of the TRX tokens received) into approximately 549,676,892 sTRX tokens. It is necessary for the Company to retain a small portion of TRX tokens for the on-chain transaction fees payment.

As of March 18, 2026, the Company has not yet had any TRX token dispositions.

The Company intends to substantially utilize its excess cash to accumulate TRX tokens, and execute the relevant transactions (including potential future disposals) through a variety of leading global trading platforms to ensure the execution quality. The Company's digital asset treasury (DAT) strategy is to buy and hold TRX tokens without hedging, as we believe that market timing generally is counter productive longer term.

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***The Company and the TRON Ecosystem***

While there are crossover relationships between certain directors of the Company and the TRON blockchain ecosystem (Weike Sun is the father of Justin Sun, the founder of TRON, Zhihong Liu has been a senior advisor to TRON DAO, and Zi Yang is associated with Tronscan, the official internet explorer for the TRON blockchain), there is no direct relationship between the Company and the TRON DAO. The Company's name merely recognizes that it has adopted a treasury strategy focused on TRX, the native token of the TRON blockchain. The TRON DAO, by contrast, is the decentralized autonomous organization that, since 2021, facilitates the development of the TRON blockchain network. Justin Sun, our advisor, founded TRON in 2017 and oversaw its development prior to the establishment of TRON DAO in 2021. Super Representatives, elected by the community of TRX holders and acting by consensus are the sole decision makers for TRON DAO. While it is possible that developments to the TRON blockchain, as directed and agreed by TRON DAO, could affect consumer use of or market perception about TRX, and thus impact our business, the relationship to the Company is incidental.

**Critical Accounting Policies**

Our management's discussion and analysis of our financial condition and results of operations is based on our audited financial statements for the year ended December 31, 2025 and 2024, 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:

*<u>Revenue Recognition</u>*

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.

*<u>Inventory</u>*

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.

*<u>Use of Estimates</u>*

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.

*<u>Earnings (Loss) Per Share</u>*

Net income (loss) per common share 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. Warrants are not considered in the calculations for the years ended December 31, 2025 and 2024, as the impact of the potential shares of common stock would be to decrease the loss per share.

*[**Table of Contents**](#TOC_001)*<br>

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| | | |
|:---|:---|:---|
|  | For the Years Ended December 31, | For the Years Ended December 31, |
|  | 2025 | 2024 |
| **Numerator:** |  |  |
| &nbsp;&nbsp;&nbsp;Net (loss) | $(16811267) | $(4339345) |
| **Denominator:** |  |  |
| &nbsp;&nbsp;&nbsp;Denominator for basic earnings per share - Weighted-average shares of common stock issued and outstanding during the period | 102635573 | 11623191 |
| &nbsp;&nbsp;&nbsp;Denominator for diluted earnings per share | 102635573 | 11623191 |
| Basic (loss) per share | $(0.16) | $(0.37) |
| Diluted (loss) per share | $(0.16) | $(0.37) |

---

*<u>Cash</u>*

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 of December 31, 2025 and 2024.

*<u>Foreign Currency Translation</u>*

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, 2025 and 2024 and the cumulative translation gains and losses as of December 31, 2025 and 2024 were not material.

*<u>Accounts Receivable</u>*

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. During the years ended December 31, 2025 and 2024, the Company recognized no allowance for doubtful collections.

*<u>Fair Value of Financial Instruments</u>*

The fair value of our 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.

*<u>Income Taxes</u>*

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 derecognition, classification, interest and penalties, accounting in interim period, disclosure and transition. Based on our evaluation, it has been concluded that there are no significant uncertain tax positions requiring recognition in our financial statements. Since we were incorporated on April 22, 2022, the evaluation was performed for 2022 tax year, which would be the only period subject to examination. We believe that our income tax positions and deductions would be sustained on audit and does not anticipate any adjustments that would result in a material changes to our financial position. Our 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, 2025 and 2024 consists of net operating loss carry forwards calculated using effective tax rates equating to approximately $3,253,925 and $1,377,232, respectively. Due to the Company's lack of earnings history, the deferred tax asset has been fully offset by a valuation allowance of $3,253,925 and $1,377,232 for the years ended December 31, 2025 and 2024.

*[**Table of Contents**](#TOC_001)*<br>

*<u>Stock Based Compensation</u>*

We recognize 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.

On April 22, 2022, the inception date ("Inception"), we 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 non-employees for goods or services. Consequently, the accounting for share-based payments to nonemployees and employees will be substantially aligned.

*<u>Recently Issued Accounting Pronouncements</u>*

In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-07, enhancing segment reporting requirements under ASC 280. This ASU aims to provide investors with more detailed information about a public entity's reportable segments, including those with a single reportable segment. The Key Provisions include**:**

&nbsp;&nbsp;&nbsp;&nbsp;1. **Enhanced Expense Disclosures:** Public entities must now disclose significant segment expenses that
 are regularly provided to the chief operating decision maker (CODM) and included in each
 reported measure of segment profit or loss.

&nbsp;&nbsp;&nbsp;&nbsp;2. **Disclosure of Other Segment Items:** Entities are required to disclose an amount for "other
 segment items" by reportable segment, representing the difference between reported
 segment revenues and the sum of significant segment expenses and the reported measure of
 segment profit or loss. A qualitative description of the composition of these other segment
 items is also required.

&nbsp;&nbsp;&nbsp;&nbsp;3. **Interim Reporting Requirements:** All annual disclosures about a reportable segment's profit
 or loss and assets, including the new disclosures introduced by ASU 2023-07, must now be
 provided in interim periods as well.

&nbsp;&nbsp;&nbsp;&nbsp;4. **Single Reportable Segment Entities:** Public entities with a single reportable segment are explicitly
 required to provide all segment disclosures mandated by ASC 280, including those introduced
 by ASU 2023-07. This clarification ensures that users receive comprehensive information about
 the entity's operations and performance.

&nbsp;&nbsp;&nbsp;&nbsp;5. **Disclosure of CODM Information:** Entities must disclose the title and position of the CODM and explain
 how the CODM uses the reported measure(s) of segment profit or loss in assessing performance
 and allocating resources.

These amendments are effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024. The Company adopted the ASU for the year ended December 31, 2024.

*[**Table of Contents**](#TOC_001)*<br>

Management does not believe that any recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on our financial statements.

***Results of Operations***

The following table provides selected financial data about us for the year ended December 31, 2025 and 2024, respectively.

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
| Sales | $4740551 | $4311382 |
| Cost of Sales | 3542890 | 3456151 |
| &nbsp;&nbsp;&nbsp;Gross Profit | 1197661 | 855231 |
| Total (expenses) | (3579816) | (5194576) |
| Other Income (loss) | (14429112) | - |
| Net Income (Loss) | $(16811267) | $(4339345) |

---

*<u>Revenues</u>*

We generated $4,740,551 in revenues for the year ended December 31, 2025 compared to $4,311,382 revenues for the year ended December 31, 2024. The decrease can be attributed to our largest theme park orders were down due to major expansion resulting in a decrease in attendance at their Orlando facility, timing delays for orders from another theme park operator and an election year in which retailers were very cautious in buying. We believe with the new theme park opening in Orlando in 2025, our business should benefit from the publicity and enthusiasm that typically surrounds new theme park openings.

*<u>Operating Expenses and other income/expenses</u>*

We had total operating expenses and other income/expense of $3,579,816 for the year ended December 31, 2025 compared to $5,194,576 for the year ended December 31, 2024.

Operating expenses for the year ended December 31, 2025 totaled $3,579,816 were in connection with our daily operations as follows: (i) marketing expenses of $118,939; (ii) legal and professional expenses of $483,335 including board of director fees, auditing and accounting fees, investor relations and public awareness campaigns, legal services, corporate advisory services, registration statement preparation fees, general corporate governance fees; (iii) rent of $145,323; (iv) depreciation and amortization of $334,522; (v) salary and wages of $1,255,713; (vi) general and administrative expenses of $584,311, consisting of travel, meals and entertainment, office supplies and expense and other normal office and administration expenses; (vii) stock based compensation of $488,966 consisting primarily of investor relations and public awareness campaign and the fair value of stock options granted to officers, directors and employees; (viii) stock transfer and SEC fees of $304,118; and (ix) net interest income of $135,411.

Other income (loss) for the year ended December 31, 2025 of $14,429,112 consisted of: (i) an unrealized loss of $15,223,891 and a realized loss of $2,135,357 on the fair value of our Digital Assets; (ii) unrealized income of $5,437,403 accrued from our Digital Asset liquid staking activities; and (iii) the impairment of an intangible asset of $2,507,267. The Company had no other income (loss) for the year ended December 31, 2024.

Operating expenses for the year ended December 31, 2024 totaled $5,194,576 were in connection with our daily operations as follows: (i) marketing expenses of $55,803; (ii) legal and professional expenses of $1,432,537 including board of director fees, auditing and accounting fees, investor relations and public awareness campaigns, legal services, corporate advisory services, registration statement preparation fees, general corporate governance fees; (iii) rent of $55,417; (iv) depreciation and amortization of $116,880; (v) salary and wages of $1,074,014; (vi) general and administrative expenses of $593,535, consisting of travel, meals and entertainment, office supplies and expense and other normal office and administration expenses; (vii) stock based compensation of $1,861,743 consisting primarily of investor relations and public awareness campaign and the fair value of stock options granted to officers, directors and employees; and (viii) net interest expense of $4,548.

Expenses during 2025 were lower than the same period in 2024 due primarily to decreased stock-based compensation related to investor relations and public awareness campaign and the fair value of stock options granted to officers, directors and employees and other costs associated with our company being listed and traded on Nasdaq. In addition, during 2024 we launched new product lines as well as increased marketing, promotional and social media efforts.

*<u>Income/Losses</u>*

Net loss for the year ended December 31, 2025 and 2024, was $16,811,267 and $4,339,345, respectively.

*[**Table of Contents**](#TOC_001)*<br>

***Impact of Inflation***

We believe that inflation has had a negligible effect on operations since inception. We believe that we can offset inflationary increases in the cost of operations by increasing sales and improving operating efficiencies.

***Off Balance Sheet Arrangements***

We do not have off-balance sheet arrangements, financings, or other relationships with unconsolidated entities or other persons, also known as "variable interest entities."

***Liquidity and Capital Resources***

The Company is in commercialization mode, while continuing to pursue the development of its next generation products as well as new products that are being developed.

We generally require cash to:

● launch sales initiatives,

● fund our operations and working capital requirements,

● develop and execute our product development and market introduction plans,

● fund research and development efforts, and

● pay any expense obligations as they come due.

As of December 31, 2025, we had working capital of $11,757,517 and approximately $10,455,360 in cash and cash equivalents, an increase in cash and cash equivalents of $9,102,987 from the $1,352,373 as of December 31, 2024. During the year ended December 31, 2025, we raised net proceeds of $11,440,137 from the sale of securities and exercise of warrants and options. Additionally, the Company received a total of $210,000,000 in Digital Assets from the combination of sales of common and preferred stock.

***<u>Operating Activities:</u>***

Net cash used in our operating activities of $1,443,401during the year ended December 31, 2025, was primarily due to our operating loss of $2,527,567 offset by $488,966 of stock-based (non-cash) compensation.

Net cash used in our operating activities of $2,856,359 during the year ended December 31, 2024, was primarily due to our operating loss of $4,334,797 offset by $1,861,743 of stock-based (non-cash) compensation.

***<u>Financing Activities:</u>***

During the year ended December 31, 2025, the net cash provided by financing activities of $10,615,208 included (i) proceeds of $4,940,559 from a private placement and proceeds of $5,803,571 from the exercise of warrants related to the private placement; (ii) a $500,000 payment on a promissory note; and (iii) proceeds of $696,007 from the exercise of options.

In addition to the cash provided as describe above, the Company entered into a Securities Purchase Agreement under the terms of which the Company received $100,000,000 in digital assets and issued 100,000 shares of its Series B Preferred Stock convertible into 200,000,000 shares of common stock and warrants convertible into 220,000,000 shares of the Company's common stock with an exercise price of $0.50 per share in return for the issuance of 100,000 Series B Preferred shares. Subsequently, the 220,000,000 warrants were exercised with the payment of $110,000,000 in digital assets for 220,000,000 shares of the Company's common stock.

During the year ended December 31, 2024, the net cash provided by financing activities of $1,501,255 included the $2,501,255 proceeds of our sale of common stock in from our registered direct offerings under our Shelf S-3 less the $1,000,000 payment on a promissory note.

***<u>Investing Activities:</u>***

The Company paid $68,820 in cash for fixed assets during the year ended December 31, 2025. During the year ended December 31, 2024, net cash used in investing activities of $273,264 consisted of a $250,000 cash payment as part of the asset purchase agreement related to our purchase of intangible assets and $23,264 paid for fixed assets.

**ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**

Not applicable to a smaller reporting company.

**ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA**

Our financial statements and corresponding notes thereto called for by this item may be found beginning on page F-1 of this Annual Report on Form 10-K.

**ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES**

None.

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**ITEM 9A. CONTROLS AND PROCEDURES**

***Evaluation of Disclosure Controls and Procedures***

The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company's Exchange Act reports is recorded, processed, summarized and reported within the time communicated to the Company's management, including its Chief Executive Officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure based closely on the definition of "disclosure controls and procedures" in Rule 13a-15(e). The Company's disclosure controls and procedures are designed to provide a reasonable level of assurance of reaching the Company's desired disclosure control objectives. In designing periods specified in the SEC's rules and forms, and that such information is accumulated and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. The Company's certifying officers have concluded that the Company's disclosure controls and procedures are effective in reaching that level of assurance.

At the end of the period being reported upon, the Company carried out an evaluation, under the supervision and with the participation of the Company's management, including the Company's Chief Executive Officer and principal financial officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures. Based on the foregoing, our Chief Executive Officer and principal financial officer concluded that our disclosure controls and procedures were effective to ensure that the material information required to be included in our Securities and Exchange Commission reports is accumulated and communicated to our management, including our principal executive and financial officer, recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms relating to the Company.

***Management's Report on Internal Control over Financial Reporting***

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting is designed to provide reasonable assurances regarding the reliability of financial reporting and the preparation of our financial statements in accordance with U.S. generally accepted accounting principles, or GAAP. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree or compliance with the policies or procedures may deteriorate.

With the participation of our Chief Executive Officer and Chief Financial Officer (principal financial officer), our management conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2025 based on the framework in Internal Control— Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO"). Based on the assessment and those criteria, management believes that the Company maintained effective internal control over financial reporting as of December 31, 2025.

This Report does not include an attestation report of the Company's independent registered public accounting firm regarding internal control over financial reporting as smaller reporting companies are not required to include such report and EGC's are exempt from this requirement entirely until they are no longer an EGC. Management's report is not subject to attestation by the Company's independent registered public accounting firm.

***Limitations on the Effectiveness of Controls***

Management has confidence in its internal controls and procedures. The Company's management believes that a control system, no matter how well designed and operated can provide only reasonable assurance and cannot provide absolute assurance that the objectives of the internal control system are met, and no evaluation of internal controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. Further, the design of an internal control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitation in all internal control systems, no evaluation of controls can provide absolute assurance that all control issuers and instances of fraud, if any, within the Company have been detected.

***Changes in Internal Controls***

There were no changes in the Company's internal controls over financial reporting that occurred during the fiscal year ended December 31, 2025 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

Internal control systems, no matter how well designed and operated, have inherent limitations. Therefore, even a system which is determined to be effective cannot provide absolute assurance that all control issues have been detected or prevented. Our systems of internal controls are designed to provide reasonable assurance with respect to financial statement preparation and presentation.

**ITEM 9B. OTHER INFORMATION**

None.

**Item 9C. DISCLOSURE REGARDING FOREIGN JURISDICTION THAT PREVENT INSPECTIONS.**

Not applicable.

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**PART III**

**ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE**

Our directors and executive officers and their respective ages as of the date of this Form 10-K are as follows:

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| | | |
|:---|:---|:---|
| Name | Age | Position(s) |
| Richard Miller | 58 | Chief Executive Officer |
| Douglas McKinnon | 75 | Chief Financial officer |
| Weike Sun | 66 | Director |
| Christopher Marc Melton | 54 | Director |
| Zhihong Liu | 60 | Director |
| Zi Yang | 27 | Director |

---

The following describes the business experience of each of our directors and executive officers, including other directorships held in reporting companies:

**Richard Miller, Chief Executive Officer and Member of the Board of Directors**, has served as Chief Executive Officer and Director of the Company since November 2020. Previously, Mr. Miller served as the Chief Operating Officer of Jupiter Wellness, Inc. Prior to that, Mr. Miller served as president of Caro Consulting, Inc. a consulting firm that provided advisory services to emerging growth companies. In that role, he advised management teams on strategic planning, business development, and financing matters. Mr. Miller has over twenty years of experience providing strategic and operational guidance to companies across multiple industries. Mr. Miller co-founded Teeka Tan Suncare Products in 2004, where he product oversaw the development and commercialization and participated in the company's public offering. Mr. Miller is the founder of My School Counts, a grassroots organization focused on school safety and support of local educational initiatives.

**Douglas O. McKinnon, Chief Financial Officer,** has served as our Chief Financial Officer since April 2022. Mr. McKinnon previously served as Chief Financial Officer of Safety Shot from August 2019 to April 2022 and has served as the Chief Executive Officer of AppYea, Inc. since March 2016. Mr. McKinnon has also 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 1st 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, 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. As an entrepreneur, Mr. McKinnon has been involved in organizations ranging from start-up companies using venture capital funding to publicly traded institutional backed companies. Additionally, Mr. McKinnon has extensive merger and acquisition, and turnaround experience.

**Christopher Marc Melton, Director,** has served as one of our directors since April 2022. 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.

**Weike Sun**, age 66, began his career in journalism and public infrastructure administration in China. Following his extensive experience in the public sector, Mr. Sun transitioned to the private sector holding senior management and advisory role to several fintech companies since 2016, including Ruibo (Beijing) Technology and Peiwo Huanle (Beijing) Technology. He was the Chairman of Guangzhou Keyhiway Printing Technology, a listed company on China's National Equities Exchange and Quotations (NEEQ) from March 2022 to July 2023. Mr. Sun holds a bachelor's degree from Qinghai Normal College. Mr. Weike Sun is the sole shareholder of Bravemorning.

**Zhihong Liu**, age 60, has been the senior advisor to TRON DAO since 2021, leading its strategic investment activities. Previously, Mr. Liu served as the board director of Valkyrie Investment helping to launch one of the first Bitcoin future ETFs in the US. Prior to joining the blockchain industry in 2021, he had held senior positions in the financial industry for over 20 years working for leading global firms including Ant Financial, NOMURA, Salomon Smith Barney and Fidelity Investment. Mr. Liu holds an MBA from Columbia University and a bachelor's degree from Zhejiang University in China.

**Zi Yang**, age 27, has been active in the blockchain industry for over 5 years. Mr. Yang currently holds senior positions for several leading blockchain projects including Tronscan, the official blockchain explorer for Tron protocol. Mr. Yang holds a bachelor's degree in Human Resource Management from Guangdong University of Foreign Studies in China.

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***Term of Office***

Our Board is elected annually by our stockholders. Each director shall hold office until a successor is duly elected and qualified or until his or her earlier death, resignation or removal.

***Family Relationships***

There are no family relationships among and between the issuer's directors, officers, persons nominated or chosen by the issuer to become directors or officers, or beneficial owners of more than ten percent of any class of the issuer's equity securities.

***Section 16(a) Beneficial Ownership Reporting Compliance***

Section 16(a) of the Exchange Act requires our directors and officers, and the persons who beneficially own more than 10% of our Common Stock, to file reports of ownership and changes in ownership with the SEC. Copies of all filed reports are required to be furnished to us pursuant to Rule 16a-3 promulgated under the Exchange Act. Based solely on the reports received by us and on the representations of the reporting persons, we believe that these persons have complied with all applicable filing requirements during the year ended December 31, 2025.

**Board Composition**

***Director Independence***

Our business and affairs are managed under the direction of our Board, which consist of five members. Under Nasdaq rules, independent directors must comprise a majority of a listed company's board of directors, subject to certain exceptions. In addition, Nasdaq rules require that each member of a listed company's audit, compensation and nominating and governance committees be independent, subject to certain phase-ins for newly-public companies. Under Nasdaq rules, a director will only qualify as an "independent director" if, in the opinion of that company's board of directors, that person does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.

Audit committee members must also satisfy the independence criteria set forth in Rule 10A-3 under the Exchange Act. In order to be considered independent for purposes of Rule 10A-3, a member of an audit committee may not, other than in his or her capacity as a member of the audit committee, the board of directors, or any other board committee (1) accept, directly or indirectly, any consulting, advisory, or other compensatory fee from the listed company or any of its subsidiaries or (2) be an affiliated person of the listed company or any of its subsidiaries.

Our Board has undertaken a review of its composition, the composition of its committees and the independence of each director. Based upon information requested from and provided by each director concerning his or her background, employment and affiliations, including family relationships, our Board has determined that Messrs. Melton, Liu and Yang do not have any relationships that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director and that each of these directors is "independent" as that term is defined under the applicable rules and regulations of the SEC and the listing requirements and rules of Nasdaq. In making this determination, our Board considered the current and prior relationships that each non-employee director has with our company and all other facts and circumstances our Board deemed relevant in determining their independence, including the beneficial ownership of our capital stock by each non-employee director.

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In making this determination, our Board considered the current and prior relationships that each non-employee director has with us and all other facts and circumstances our Board deemed relevant in determining their independence, including the beneficial ownership of our capital stock by each non-employee director.

**Board Committees**

Our Board has established Audit, Compensation, and Nominating and Corporative Governance Committees. Our Board may establish other committees to facilitate the management of our business. The composition and functions of the audit committee, compensation committee and nominating and corporate governance committee are described below. The charter of each committee is available on our corporate website at https://corporate.srmentertainment.com/corporate-governance. Members will serve on committees until their resignation or removal from the Board or until otherwise determined by our Board.

***Audit Committee***

Our audit committee consists of Mr. Melton, serving as chairman and Messrs. Liu and Yang. Our Board has determined that Mr. Melton is an "audit committee financial expert" within the meaning of the SEC regulations. Our Board has also determined that each member of our audit committee can read and understand fundamental financial statements in accordance with applicable requirements. In arriving at these determinations, the Board has examined each audit committee member's scope of experience and the nature of their employment in the corporate finance sector. The functions of this committee include:

● selecting a qualified firm to serve as the independent registered public accounting firm to audit our financial statements;

● helping to ensure the independence and performance of the independent registered public accounting firm;

● discussing the scope and results of the audit with the independent registered public accounting firm, and reviewing, with management and the independent accountants, our interim and year-end operating results;

● developing procedures for employees to submit concerns anonymously about questionable accounting or audit matters;

● reviewing our policies on risk assessment and risk management;

● reviewing related party transactions;

● obtaining and reviewing a report by the independent registered public accounting firm at least annually, that describes our internal quality-control procedures, any material issues with such procedures, and any steps taken to deal with such issues when required by applicable law; and

● approving (or, as permitted, pre-approving) all audit and all permissible non-audit services, other than de minimis non-audit services, to be performed by the independent registered public accounting firm.

***Compensation Committee***

Our compensation committee consists of Messrs. Melton, Liu and Yang with Mr. Liu serving as the chairman. The functions of the compensation committee will include:

● reviewing and approving, or recommending that our Board approve, the compensation of our executive officers;

● reviewing and recommending that our Board approve the compensation of our directors;

● reviewing and approving, or recommending that our Board approve, the terms of compensatory arrangements with our executive officers;

● administering our stock and equity incentive plans;

● selecting independent compensation consultants and assessing conflict of interest compensation advisers;

● reviewing and approving, or recommending that our Board approve, incentive compensation and equity plans; and

● reviewing and establishing general policies relating to compensation and benefits of our employees and reviewing our overall compensation philosophy.

*[**Table of Contents**](#TOC_001)*<br>

***Nominating and Corporate Governance Committee***

Our nominating and corporate governance committee consists of Messrs. Melton, Liu and Yang, with Mr. Yang serving as the chairman. The functions of the nominating and governance committee will include:

● identifying and recommending candidates for membership on our Board;

● including nominees recommended by stockholders;

● reviewing and recommending the composition of our committees;

● overseeing our code of business conduct and ethics, corporate governance guidelines and reporting; and

● making recommendations to our Board concerning governance matters.

The nominating and corporate governance committee also annually reviews the nominating and corporate governance committee charter and the committee's performance.

**Board Leadership Structure and Role in Risk Oversight**

Our Board is primarily responsible for overseeing our risk management processes. Our Board receives and reviews periodic reports from management, auditors, legal counsel, and others, as considered appropriate regarding our assessment of risks. Our Board focuses on the most significant risks we face our general risk management strategy, and also ensures that risks we undertake are consistent with our Board's appetite for risk. While our Board oversees our risk management, management is responsible for day-to-day risk management processes. We believe this division of responsibilities is the most effective approach for addressing the risks we face and that our Board leadership structure supports this approach.

Our amended and restated bylaws provide our Board with flexibility in its discretion to combine or separate the positions of Chairman of the Board and Chief Executive Officer. The Board currently does not separate the roles of Chief Executive Officer and Chairman of the Board and both positions are held by Richard Miller. Our Chief Executive Officer is responsible for setting the strategic direction of the Company and the day-to-day leadership and performance of the Company and as the Chairman he sets the agenda for the Board meetings, presides over meetings of the Board and tries to reach a consensus on Board decisions. The Board believes it should be able to freely select the Chairman of the Board based on criteria that it deems to be in the best interest of the Company and its stockholders, and therefore one person may serve as both the Chief Executive Officer and Chairman of the Board.

**Code of Ethics**

We have adopted a code of ethics and conduct applicable to all of our directors, officers, employees and all persons performing similar functions. We expect that any amendments to the code, or any waivers of its requirements, will be disclosed in our public filings with the Securities and Exchange Commission.

**Insider Trading Policy**

The Company has adopted an insider trading policy that governs the purchase, sale and other dispositions of our securities that applies to our officers and directors, as well as our employees that have regular access to material, non-public information about the Company in the normal course of their duties. We believe that our insider trading policy is reasonably designed to promote compliance with insider trading laws, rules and regulations, and listing standards applicable to us. A copy of our insider trading policy is incorporated by reference herein as Exhibit 19.1 to this Form 10-K.

**Corporate Governance Guidelines**

We have adopted corporate governance guidelines that serve as a flexible framework within which our Board and its committees operate. These guidelines cover a number of areas including the size and composition of the Board, Board membership criteria and director qualifications, director responsibilities, Board agenda, roles of the chairman of the Board and Chief Executive Officer and Chief Financial Officer, meetings of independent directors, committee responsibilities and assignments, Board member access to management and independent advisors, director communications with third parties, director compensation, director orientation and continuing education, evaluation of senior management and management succession planning.

**Involvement in Certain Legal Proceedings**

To our knowledge, our directors and executive officers have not been involved in any of the following events during the past ten years:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. any bankruptcy petition filed by or against such person or any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);

3. being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from or otherwise limiting his involvement in any type of business, securities or banking activities or to be associated with any person practicing in banking or securities activities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. being found by a court of competent jurisdiction in a civil action, the SEC or the Commodity Futures Trading Commission to have violated a Federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. being subject of, or a party to, any Federal or state judicial or administrative order, judgment decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of any Federal or state securities or commodities law or regulation, any law or regulation respecting financial institutions or insurance companies, or any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. being subject of or party to any sanction or order, not subsequently reversed, suspended, or vacated, of any self-regulatory organization, any registered entity or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

*[**Table of Contents**](#TOC_001)*<br>

**ITEM 11. EXECUTIVE COMPENSATION**

The following tables set forth certain information about compensation paid, earned or accrued for services by paid to our principal executive officer and our two other most highly compensated executive officers during the fiscal years indicated below (the "Named Executive Officers" or "NEO").

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **Name and Principal**<br>**Position** | <br>**Year** | **Salary**<br>**($)** | **Bonus**<br>**($)** | **Stock<br> Awards**<br>**($)<sup>(3)</sup>** | **Option<br> Awards**<br>**($)<sup>(3)</sup>** | **All Other<br> Compensation**<br>**($)<sup>(4)</sup>** | **Total<br> Compensation**<br>**($)** |
| **Richard Miller <sup>(1)(4)</sup>** | 2025 | $260521 | $67586 | $&nbsp;&nbsp;&nbsp;&nbsp; - | $— | $25000 | $353107 |
| *Chief Executive Officer* | 2024 | $201979 | $- | $- | $&nbsp;&nbsp;&nbsp;&nbsp; - | $25000 | $226979 |
| **Douglas O. McKinnon<sup>(2)(4)</sup>** | 2023 | $213721 | $50690 | $- | $- | $25000 | $289410 |
| *Chief Financial Officer* | 2024 | $181500 | $- | $- | $- | $25000 | $206500 |
| **Taft Flitner** | 2023 | $112000 | $54039 | $- | $- | $- | $166039 |
| *President* | 2024 | $103000 | $80382 | $- | $- | $- | $183382 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Mr. Miller was appointed as Chief Executive Officer on January
1, 2023.

2. Mr. McKinnon was appointed Chief Financial Officer on August
14, 2023.

3. There were no equity incentive plan compensation, option awards,
nor stock awards in 2024.

4. Mr. Miller and Mr. McKinnon were each paid $25,000 for Director
fees in 2025 and 2024.

**Employment Agreements with Named Executive Officers**

***Richard Miller***

We entered into an employment agreement with Richard Miller on September 10, 2024, of which certain provisions were amended on June 11, 2025, pursuant to which we employ Mr. Miller as Chief Executive Officer. The agreement has a term of three years which automatically renews unless either party sends written notice of termination no less than 90 days prior to the then term and provides for an annual base salary ("Base") of $225,000 and a Restricted Share Award ("RSA") equal to the base salary on January 1 of the initial term and renewal term thereafter. The base salary will increase 10% annually over the previous year's salary.

*[**Table of Contents**](#TOC_001)*<br>

In addition to the foregoing RSA grants, the Company shall make the following bonus and equity incentive grants to Mr. Miller with the following values upon the completion of the following goals: (a) the Company shall pay Mr. Miller a bonus as follows: 1% of any revenues from the Toy and Souvenir business up to $5M; *<u>plus</u>* 1% of the second $5M in revenues; *<u>plus</u>* 2% of the third $5M in revenues; *<u>plus</u>* 2% of the fourth $5M in revenues; *<u>plus</u>* 2% of all revenues in excess of $20M; provided, that: (i) the bonus is subject to a cap of $2M; and (ii) the bonus may be paid, at the election of Mr. Miller, in cash or shares of common stock (calculated at the fair market value of such shares as determined by the Board).

Upon any termination of Mr. Miller's employment with the Company for any reason, except for a termination for cause, the Mr. Miller shall be entitled to

(a) a payment equal to the greater of (i) two (2) years' worth of the then-existing base and the last year's bonus or (ii) the Base payable through the remaining initial term, and (b) retain the benefits set forth in Article IV of Mr. Miller's employment agreement for the remainder of the initial term or renewal term, as then applicable.

The agreement also contains the following material provisions: eligible to participate in pension and other retirement plans, group life insurance, hospitalization, surgical and major medical coverage, sick leave, disability and salary continuation, vacation and holidays, long-term disability, and other fringe benefits and entitled to reimbursement for all reasonable and necessary business expenses. Mr. Miller agreed to non-compete and non-solicit terms under his agreement.

***Douglas McKinnon***

We entered into an employment agreement with Douglas McKinnon on January 22, 2025, of which certain provisions were amended on June 11, 2025, pursuant to which we employ Mr. McKinnon as Chief Financial Officer. The agreement has a term of three years which automatically renews unless either party sends written notice of termination no less than 90 days prior to the then term and provides for an annual base salary of $215,000 and a Restricted Share Award ("RSA") equal to the base salary on January 1 of the Initial Term and renewal term thereafter. The base salary will increase 10% annually over the previous year's salary.

The Company shall make the following bonus and equity incentive grants to Mr, McKinnon as follows: (a) as determined on a calendar year basis, that management's goals have been met which includes the target objectives of the CEO. The target bonus for the Mr. McKinnon shall be equal to 75% of the bonus paid to the CEO as determined by the Compensation Committee.

Upon any termination of Mr. McKinnon's employment with the Company for any reason, except for a termination for cause, the Mr. McKinnon shall be entitled to (a) a payment equal to the greater of (i) two (2) years' worth of the then-existing base and the last year's bonus or (ii) the Base payable through the remaining initial term, and (b) retain the benefits set forth in Article IV of Mr. McKinnon's employment agreement for the remainder of the initial term or renewal term, as then applicable.

The agreement also contains the following material provisions: eligible to participate in pension and other retirement plans, group life insurance, hospitalization, surgical and major medical coverage, sick leave, disability and salary continuation, vacation and holidays, long-term disability, and other fringe benefits and entitled to reimbursement for all reasonable and necessary business expenses. Mr. McKinnon agreed to non-compete and non-solicit terms under his agreement.

***Taft Flittner***

We entered into an employment agreement with Taft Flittner on January 1, 2023, pursuant to which we employ Mr. Flittner as President. This agreement provides for an annual base salary of $100,000 and 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 fully vested two years from the date of the agreement. The option's strike price will be the closing price on the date of issuance. Mr. Flittner shall receive an annual bonus(s') based on a percentage of EBITDA, growth and other factors which will be determined by the Board.

The agreement also contains the following material provisions: eligible to participate in 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 and entitled to reimbursement for all reasonable and necessary business expenses. Mr. Flittner agreed to non-compete and non-solicit terms under his agreement.

**Director Compensation**

The following table sets forth the amounts paid to Directors during the years ended

December 31, 2025 and 2024.

---

| | | |
|:---|:---|:---|
| **Directors** | **2025** | **2024** |
| Richard Miller | $25000 | $25000 |
| Christopher Marc Melton | $25000 | $25000 |
| Weike Sun | $- | $- |
| Zhihong Liu | $- | $- |
| Zi Yang | $- | $- |

---

**ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS**

The following table as of March 18, 2026 sets forth certain information with respect to the beneficial ownership of our voting securities by (i) any person or group beneficially owning more than 5% of any class of voting securities; (ii) our directors; (iii) each of our named executive officers; and (iv) all executive officers and directors as a group as of March 18. The information presented below regarding beneficial ownership of our voting securities has been presented in accordance with the rules of the Securities and Exchange Commission and is not necessarily indicative of ownership for any other purpose. Under these rules, a person is deemed to be a "beneficial owner" of a security if that person has or shares the power to vote or direct the voting of the security or the power to dispose or direct the disposition of the security. A person is deemed to own beneficially any security as to which such person has the right to acquire sole or shared voting or investment power within 60 days through the conversion or exercise of any convertible security, warrant, option or other right. More than one person may be deemed to be a beneficial owner of the same securities. Unless otherwise indicated, the address of all listed stockholders is c/o Tron Inc., 941 W Morse Blvd., Suite 100, Winter Park, FL 32789.

*[**Table of Contents**](#TOC_001)*<br>

---

| | | |
|:---|:---|:---|
| <br>**Name of Beneficial Owner** | **Shares of**<br>**Common Stock**<br>**Beneficially**<br>**Owned** | **% of Shares of**<br>**Common Stock**<br>**Beneficially**<br>**Owned** |
| **Directors and Officers:** | | |
| Richard Miller <sup>(1)</sup> | 1637500 | \* |
| Chief Executive Officer and Director |  |  |
| Douglas McKinnon <sup>(2)</sup> | 953888 | \* |
| Chief Financial Officer and Director |  |  |
| Taft Flitner <sup>(3)</sup> | 450000 | \* |
| *President* |  |  |
| Christopher Melton <sup>(4)</sup> | 195000 | \* |
| Director |  |  |
| **Officers and Directors, as a group (7 persons)** | **3236388** | **1.2%** |
| Bravemorning Limited | 220000000 | 79.8% |

---

\* Less than 1% ownership

(1) Includes 537,500 shares issuable upon exercise of options.

(2) Includes 437,500 shares issuable upon exercise of options.

(3) Includes 150,000 shares issuable upon exercise of options.

(4) Includes 195,000 shares issuable upon exercise of options.

***Securities Authorized for Issuance under Equity Compensation Plans***

At the annual meeting held on December 4, 2024, the stockholders approved the Company's 2024 Equity Incentive Plan (the "2024 Plan"), to be administered by our Compensation Committee. Pursuant to the 2024 Plan, we are authorized to grant options and other equity awards to officers, directors, employees and consultants. The purchase price of each share of common stock purchasable under an award issued pursuant to the 2024 Equity Plan, shall be determined by our Compensation Committee, in its sole discretion, at the time of grant, but shall not be less than 100% of the fair market of such share of common stock on the date the award is granted, subject to adjustment. Our Compensation Committee shall also have sole authority to set the terms of all awards at the time of grant. Pursuant to the 2024 Plan, a maximum of 2,250,000 shares of our common stock shall be set aside and reserved for issuance, subject to adjustments as may be required in accordance with the terms of the 2024 Plan. At December 31, 2024 no options or other equity awards had been granted under the 2024 Plan.

During the year ended December 31, 2025, the Company granted a total of 2,025,000 options to officers and directors of the Company and 590,000 options to consultants. At December 31, 2025, there were no further options available under the Plans.

**ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE**

The Company has established policies and other procedures regarding approval of transactions between the Company and any employee, officer, director, and certain of their family members and other related persons. These policies and procedures are generally not in writing but are evidenced by long standing principles adhered to by our Board. The disinterested members of the Board review, approve and ratify transactions that involve "related persons" and potential conflicts of interest. Related persons must disclose to the disinterested members of the Board any potential related person transactions and must disclose all material facts with respect to such transaction. All such transactions will be reviewed by the disinterested members of the Board and, in their discretion, approved or ratified. In determining whether to approve or ratify a related person transaction the disinterested members of the Board will consider the relevant facts and circumstances of the transaction, which may include factors such as the relationship of the related person with the Company, the materiality or significance of the transaction to the Company and the related person, the business purpose and reasonableness of the transaction, whether the transaction is comparable to a transaction that could be available to the Company on an arms-length basis, and the impact of the transaction on the Company's business and operations.

Since the beginning of fiscal year 2025, the Company did not have any transactions to which it has been a participant that involved amounts that exceeded or will exceed the lesser of (i) $120,000 or (ii) one percent of the average of the Company's total assets at year-end for the last two completed fiscal years, and in which any of the Company's directors, executive officers or any other "related person" as defined in Item 404(a) of Regulation S-K had or will have a direct or indirect material interest.

**ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES**

Audit Fees totaling $105,080 and $68,274 were paid to M&K CPAS during the year ended December 31, 2025 and 2024, respectively.

No other fees were paid to M&K CPAS.

*[**Table of Contents**](#TOC_001)*<br>

**PART IV**

**ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES**

**EXHIBIT INDEX**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | | **Incorporated by Reference** | **Incorporated by Reference** | **Incorporated by Reference** | |
| **Filed or**<br>**Exhibit**<br>**Number** | <br>**Exhibit Description** | **Form**  | **Exhibit**  | **Filing Date**  | **Filed or**<br>**Furnished** <br>**Herewith**  |
| 3.1 | [Articles of Incorporation of SRM Entertainment, Inc.](https://www.sec.gov/Archives/edgar/data/1956744/000149315223019337/ex3-1.htm) | S-1 | 3.1 | 05/26/2023 |  |
| 3.2 | [Bylaws of SRM Entertainment, Inc.](https://www.sec.gov/Archives/edgar/data/1956744/000149315223019337/ex3-2.htm) | S-1 | 3.2 | 05/26/2023 |  |
| 3.3 | [Amendment to the Bylaws of SRM Entertainment, Inc.](https://www.sec.gov/Archives/edgar/data/1956744/000149315223019337/ex3-3.htm) | S-1 | 3.3 | 05/26/2023 |  |
| 3.4 | [Amended and Restated Certificate of Designation of Series A Preferred Stock](https://www.sec.gov/Archives/edgar/data/1956744/000164117225012625/ex3-1.htm) | 8-K | 3.1 | 05/28/2025 |  |
| 3.5 | [Certificate of Amendment to the Articles of Incorporation](https://www.sec.gov/Archives/edgar/data/1956744/000164117225019830/ex3-1.htm) | 8-K | 3.1 | 07/16/2025 |  |
| 3.6 | [Certificate of Amendment to the Articles of Incorporation](https://www.sec.gov/Archives/edgar/data/1956744/000164117225026127/ex3-1.htm) | 8-K | 3.1 | 09/02/2025 |  |
| 4.1 | [Description of Securities](ex4-1.htm) |  |  |  | X |
| 4.2 | [Form of Common Stock Certificate of SRM Entertainment, Inc.](https://www.sec.gov/Archives/edgar/data/1956744/000149315223019337/ex4-1.htm) | S-1 | 4.1 | 05/26/2023 |  |
| 4.3 | [Form of Representative's Warrant](https://www.sec.gov/Archives/edgar/data/1956744/000149315223025732/ex4-2.htm) | S-1 | 4.2 | 07/28/2023 |  |
| 4.4 | [Secured Promissory Note, issued September 3, 2024](https://www.sec.gov/Archives/edgar/data/1956744/000149315224035241/ex4-1.htm) | 8-K | 4.1 | 09/06/2024 |  |
| 4.5 | [Form of Pre-Funded Warrant](https://www.sec.gov/Archives/edgar/data/1956744/000149315224048995/ex4-1.htm) | 8-K | 4.1 | 12/06/2024 |  |
| 4.6 | [Form of Common Stock Purchase Warrant](https://www.sec.gov/Archives/edgar/data/1956744/000164117225012625/ex4-1.htm) | 8-K | 4.1 | 05/28/2025 |  |
| 4.7 | [Form of Placement Agent Warrant](https://www.sec.gov/Archives/edgar/data/1956744/000164117225012625/ex4-2.htm) | 8-K | 4.2 | 05/28/2025 |  |
| 4.8 | [Amendment to Common Stock Purchase Warrant](https://www.sec.gov/Archives/edgar/data/1956744/000164117225026036/ex4-1.htm) | 8-K | 4.1 | 08/29/2025 |  |
| 10.1 | [Share Exchange Agreement between Jupiter Wellness, Inc. and SRM Entertainment, Inc. dated December 9, 2022](https://www.sec.gov/Archives/edgar/data/1956744/000149315223019337/ex10-1.htm) | S-1 | 10.1 | 05/26/2023 |  |
| 10.2 | [Employment Agreement between SRM Entertainment, Inc. and Richard Miller dated January 1, 2023†](https://www.sec.gov/Archives/edgar/data/1956744/000149315223019337/ex10-2.htm) | S-1 | 10.2 | 05/26/2023 |  |
| 10.3 | [Employment Agreement between SRM Entertainment, Inc. and Taft Flittner dated January 1, 2023†](https://www.sec.gov/Archives/edgar/data/1956744/000149315223019337/ex10-3.htm) | S-1 | 10.3 | 05/26/2023 |  |
| 10.4 | [Employment Agreement between SRM Entertainment, Inc. and Deborah McDaniel-Hand dated January 1, 2023†](https://www.sec.gov/Archives/edgar/data/1956744/000149315223019337/ex10-4.htm) | S-1 | 10.4 | 05/26/2023 |  |
| 10.5 | [License Agreement between SRM Entertainment, Inc. and LAFIG Belgium s.a. dated July 28, 2022](https://www.sec.gov/Archives/edgar/data/1956744/000149315223019337/ex10-5.htm) | S-1 | 10.5 | 05/26/2023 |  |

---

*[**Table of Contents**](#TOC_001)*<br>

10.6 [License Agreement between SRM Entertainment, Inc. and Zoonicorn, LLC dated July 17, 2022](https://www.sec.gov/Archives/edgar/data/1956744/000149315223019337/ex10-6.htm) S-1 10.6 05/26/2023

10.7 [License Agreement between SRM Entertainment, Inc., Taylored Concepts, LLC and ProToyTypes, LLC dated September 1, 2021](https://www.sec.gov/Archives/edgar/data/1956744/000149315223019337/ex10-7.htm) S-1 10.7 05/26/2023

10.8 [Addendum to License Agreement between SRM Entertainment, Inc., Taylored Concepts, LLC and ProToyTypes, LLC dated June 18, 2022](https://www.sec.gov/Archives/edgar/data/1956744/000149315223019337/ex10-8.htm) S-1 10.8 05/26/2023

10.9 [2023 Equity Incentive Plan†](https://www.sec.gov/Archives/edgar/data/1956744/000149315223019337/ex10-9.htm) S-1 10.9 05/26/2023

10.10 [Amended and Restated Exchange Agreement between Jupiter Wellness, Inc. and SRM Entertainment, Inc. dated May 26, 2023](https://www.sec.gov/Archives/edgar/data/1956744/000149315223019337/ex10-10.htm) S-1 10.10 05/26/2023

10.11 [Employment Agreement between Jupiter Wellness, Inc., formerly known as CBD Brands, Inc., and Douglas O. McKinnon dated August 5, 2019†](https://www.sec.gov/Archives/edgar/data/1956744/000149315223024860/ex10-11.htm) S-1 10.11 07/18/2023

10.12 [Assignment and Assumption Agreement dated August 3, 2023, between Jupiter Wellness, Inc. and SRM Entertainment, Inc.](https://www.sec.gov/Archives/edgar/data/1956744/000149315223029160/ex10-1.htm) 8-K 10.1 08/16/2023

10.13 [Asset Purchase Agreement, dated September 3, 2024, by and between SRM Entertainment, Inc. and Suretone Entertainment, Inc.](https://www.sec.gov/Archives/edgar/data/1956744/000149315224035241/ex10-1.htm) 8-K 10.1 09/06/2024

10.14 [Employment Agreement, dated September 10, 2024, by and between SRM Entertainment, Inc. and Richard Miller†](https://www.sec.gov/Archives/edgar/data/1956744/000149315224036210/ex10-1.htm) 8-K 10.1 09/13/2024

10.15 [Form of Securities Purchase Agreement by and between SRM Entertainment, Inc. and the Investors](https://www.sec.gov/Archives/edgar/data/1956744/000149315224041883/ex10-1.htm) 8-K 10.1 10/22/2024

10.16 [Form of Securities Purchase Agreement dated as of December 5, 2024](https://www.sec.gov/Archives/edgar/data/1956744/000149315224048995/ex10-2.htm) 8-K 10.2 12/06/2024

10.17 [Placement Agency Agreement dated December 5, 2024, by and between SRM Entertainment, Inc. and D. Boral Capital LLC](https://www.sec.gov/Archives/edgar/data/1956744/000149315224048995/ex10-1.htm) 8-K 10.1 12/06/2024

10.18 [SRM Entertainment, Inc.'s 2024 Equity Incentive Plan†](https://www.sec.gov/Archives/edgar/data/1956744/000149315224049470/ex10-1.htm) 8-K 10.1 12/10/2024

10.19 [Employment Agreement, dated January 22, 2025, by and between SRM Entertainment, Inc. and Douglas McKinnon†](https://www.sec.gov/Archives/edgar/data/1956744/000149315225004026/ex10-1.htm) 8-K 10.1 01/28/2025

10.20 [Form of Securities Purchase Agreement](https://www.sec.gov/Archives/edgar/data/1956744/000164117225012625/ex10-1.htm) 8-K 10.1 05/28/2025

10.21 [Form of Placement Agency Agreement](https://www.sec.gov/Archives/edgar/data/1956744/000164117225012625/ex10-2.htm) 8-K 10.2 05/28/2025

10.22 [Form of Registration Rights Agreement](https://www.sec.gov/Archives/edgar/data/1956744/000164117225012625/ex10-3.htm) 8-K 10.3 05/28/2025

10.23 [Form of Securities Purchase Agreement](https://www.sec.gov/Archives/edgar/data/1956744/000164117225015300/ex10-1.htm) 8-K 10.1 06/16/2025

10.24 [Form of Sun Advisory Agreement, dated June 16, 2025](https://www.sec.gov/Archives/edgar/data/1956744/000164117225015300/ex10-2.htm) 8-K 10.2 06/16/2025

10.25 [Form of American Ventures Agreement, dated June 16, 2025](https://www.sec.gov/Archives/edgar/data/1956744/000164117225015300/ex10-3.htm) 8-K 10.3 06/16/2025

10.26 [Amendment No. 1 to Employment Agreement by and between SRM Entertainment, Inc. and Richard Miller, dated June 16, 2025](https://www.sec.gov/Archives/edgar/data/1956744/000164117225015300/ex10-4.htm) 8-K 10.4 06/16/2025

10.27 [Amendment No. 1 to Employment Agreement by and between SRM Entertainment, Inc. and Douglas McKinnon, dated June 16, 2025](https://www.sec.gov/Archives/edgar/data/1956744/000164117225015300/ex10-5.htm) 8-K 10.5 06/16/2025

10.28 [Amendment No. 1 to Employment Agreement by and between SRM Entertainment, Inc. and Taft Flittner, dated June 16, 2025](https://www.sec.gov/Archives/edgar/data/1956744/000164117225015300/ex10-6.htm) 8-K 10.6 06/16/2025

10.29 [Amendment No. 1 to Employment Agreement by and between SRM Entertainment, Inc. and Deborah McDaniel-Hand, dated June 16, 2025](https://www.sec.gov/Archives/edgar/data/1956744/000164117225015300/ex10-7.htm) 8-K 10.7 06/16/2025

*[**Table of Contents**](#TOC_001)*<br>

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| 10.30\*\*\* | [Self-Managed Wallet Services Agreement by and between the Company and BiT Global Trust Limited dated June 26, 2025](https://www.sec.gov/Archives/edgar/data/1956744/000164117225025261/ex10-1.htm) | S-3/A | 10.1 | 08/22/2025 |  |
| 10.31 | [Stock Purchase Agreement, dated December 24, 2025](https://www.sec.gov/Archives/edgar/data/1956744/000149315225029225/ex10-1.htm) | 8-K | 10.1 | 12/29/2025 |  |
| 14.1 | [Code of Business Conduct and Ethics](https://www.sec.gov/Archives/edgar/data/1956744/000149315224012449/ex14-1.htm) | 10-K | 14.1 | 04/01/2024 |  |
| 19.1 | [Insider Trading Policy](https://www.sec.gov/Archives/edgar/data/1956744/000164117225001862/ex19-1.htm) | 10-K | 19.1 | 03/31/2025 |  |
| 21.1 | [List of Subsidiaries](https://www.sec.gov/Archives/edgar/data/1956744/000149315223019337/ex21-1.htm) | S-1 | 21.1 | 05/26/2023 |  |
| 23.1 | [Consent of Independent Registered Public Accounting Firm](ex23-1.htm) |  |  |  | X |
| 31.1 | [Certification Required by Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](ex31-1.htm) |  |  |  | X |
| 31.2 | [Certification Required by Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](ex31-2.htm) |  |  |  | X |
| 32.1 | [Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 #](ex32-1.htm) |  |  |  | X |
| 32.2 | [Certification of the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 #](ex32-2.htm) |  |  |  | X |
| 97.1 | [SRM Entertainment, Inc. Compensation Recovery Policy](https://www.sec.gov/Archives/edgar/data/1956744/000149315224012449/ex97-1.htm) | 10-K | 97.1 | 04/01/2024 |  |
| 101.INS | Inline XBRL Instance Document |  |  |  | X |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document |  |  |  | X |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document |  |  |  | X |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document |  |  |  | X |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document Inline |  |  |  | X |
| 101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |  |  |  | X |
| 104 | Cover Page Interactive Data File - The cover page iXBRL tags are embedded within the inline XBRL document. |  |  |  | X |

---

---

| | |
|:---|:---|
| † | Management or compensatory plan or arrangement. |
| # | This certification is being furnished and shall not be deemed "filed" with the SEC for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and shall not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference. |
| \*\*\* | Portions of this exhibit have been omitted in compliance with Regulation S-K Item 601(b)(10)(iv) because the registrant has determined that the information is not material and is the type that the registrant treats as private or confidential. |

---

*[**Table of Contents**](#TOC_001)*<br>

**SIGNATURES**

Pursuant to the requirements of the Section 13 or 15 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on the day of March 25, 2026.

---

| | |
|:---|:---|
| **Tron Inc.** | **Tron Inc.** |
| By: | */s/ Richard Miller* |
|  | Richard Miller |
|  | Chief Executive Officer and Director |

---

In accordance with the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

---

| | | |
|:---|:---|:---|
| **Signature** | **Title** | **Date** |
| */s/ Richard Miller* | Director and Chief Executive Officer (principal executive officer) | March 25, 2026 |
| Richard Miller |  |  |
| */s/ Douglas McKinnon* | Chief Financial Officer (principal financial and accounting officer) | March 25, 2026 |
| Douglas McKinnon |  |  |
| */s/ Weike Sun* | Director | March 25, 2026 |
| Weike Sun |  |  |
| */s/ Zhihong Liu* | Director | March 25, 2026 |
| Zhihong Liu |  |  |
| */s/ Zi Yang* | Director | March 25, 2026 |
| Zi Yang |  |  |
| */s/ Christopher Melton* | Director | March 25, 2026 |
| Christopher Melton<br>|  |  |

---

*[**Table of Contents**](#TOC_001)*<br>

**TRON INC.**

**INDEX TO FINANCIAL STATEMENTS**

---

| | |
|:---|:---|
| [Report of Independent Registered Public Accounting Firm](#F_001) (PCAOB ID: 2738) | F-2 |
| [Consolidated Balance Sheets as of December 31, 2025 and 2024](#F_002) | F-3 |
| [Consolidated Statements of Operations for the Years Ended December 31, 2025 and 2024](#F_003) | F-4 |
| [Consolidated Statements of Changes in Shareholders' Equity for the Years Ended December 31, 2025 and 2024](#F_004) | F-5 |
| [Consolidated Statements of Cash Flows for the Years Ended December 31, 2025 and 2024](#F_005) | F-6 |
| [Notes to the Consolidated Financial Statements](#F_006) | F-7 |

---

[*Table of Contents*](#TOC_002)<br>

![](form10-k_001.jpg)

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of Tron Inc.

**Opinion on the Financial Statements**

We have audited the accompanying consolidated balance sheets of Tron Inc. (formerly SRM Entertainment, Inc.) (the Company) as of December 31, 2025 and 2024, and the related consolidated statements of operations, statement of changes in shareholders' deficit, and cash flows for the two-year period ended December 31, 2025, and the related notes (collectively referred to as the financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its consolidated operations and its cash flows for the two-year period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.

**Basis for Opinion**

These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's consolidated 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 audits to obtain reasonable assurance about whether the consolidated 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, audits 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 consolidated 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 consolidated 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 consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

**Critical Audits Matter**

The critical audits matter communicated below is a matter arising from the current period audits of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audits matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audits matter below, providing separate opinions on the critical audits matters or on the accounts or disclosures to which they relate.

**Other Asset- Cryptocurrency**

The Company holds cryptocurrency assets on the Tron blockchain at fair value through a self-custody arrangement with an affiliated custodian. The evaluation of audit evidence related to the existence and the Company's rights to these digital assets required significant auditor judgment and specialized knowledge regarding the nature and extent of procedures necessary to assess control and ownership.

To address this matter, we performed the following procedures:

● We evaluated the design and operating effectiveness of internal controls over the authorization and safeguarding of digital assets, including those staked on the Tron blockchain.

● We verified that the Company retained exclusive control of the private keys necessary to access and transact its digital assets as of December 31, 2025.

● We independently inspected the Company's blockchain wallet addresses to confirm the digital assets reflected in the financial records and reconciled recorded balances to actual holdings.

● We confirmed and analyzed the custodial agreement to substantiate the Company's legal rights and beneficial ownership of the digital assets as of year-end.

● We assessed the reliability of audit evidence obtained through direct inquiry of the public blockchain networks.

/s/ M&K CPAS, PLLC

*<u>www.mkacpas.com</u>*

We have served as the Company's auditor since 2022.

The Woodlands, Texas

March 25, 2026

[*Table of Contents*](#TOC_002)<br>

**Tron Inc.**

**Consolidated Balance Sheets**

**As of December 31, 2025 and 2024**

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
| **Assets** |  |  |
| &nbsp;&nbsp;&nbsp;Cash | $10455360 | $1352373 |
| &nbsp;&nbsp;&nbsp;Account receivable | 671779 | 794158 |
| &nbsp;&nbsp;&nbsp;Inventory | 704171 | 783800 |
| &nbsp;&nbsp;&nbsp;Prepaid expenses and deposits | 511615 | 488746 |
| &nbsp;&nbsp;&nbsp;Other current assets | 67340 | 43380 |
| Total current assets | 12410265 | 3462457 |
| &nbsp;&nbsp;&nbsp;Intangible assets (net of amortization) |  | 2796567 |
| &nbsp;&nbsp;&nbsp;Investment in Gameverse Interactive Corp | 190500 |  |
| &nbsp;&nbsp;&nbsp;Investment in digital assets – held in Treasury Wallet set up by an Affiliate | 198078155 |  |
| &nbsp;&nbsp;&nbsp;Right of Use asset (ROU) | 682286 |  |
| &nbsp;&nbsp;&nbsp;Fixed assets, net of depreciation | 71877 | 48279 |
| Total assets | $211433083 | $6307303 |
| **Liabilities** |  |  |
| &nbsp;&nbsp;&nbsp;Accounts Payable | $142866 | $263993 |
| &nbsp;&nbsp;&nbsp;Accrued and other liabilities | 289676 | 252359 |
| &nbsp;&nbsp;&nbsp;Current portion of ROU liability | 220206 |  |
| &nbsp;&nbsp;&nbsp;Secured loan from Related Party | - | 500000 |
| Total Current Liabilities | 652748 | 1016352 |
| &nbsp;&nbsp;&nbsp;ROU liability | 464100 | - |
| Total Liabilities | 1116848 | 1016352 |
| **Shareholders' Equity** |  |  |
| &nbsp;&nbsp;&nbsp;Preferred stock, $0.0001 par value, 10,000,000 shares authorized |  |  |
| &nbsp;&nbsp;&nbsp;Preferred Stock Series A, no shares outstanding |  |  |
| &nbsp;&nbsp;&nbsp;Preferred Stock Series B, 100,000 shares outstanding | 10 |  |
| &nbsp;&nbsp;&nbsp;Common stock, $0.0001 par value, 1,000,000,000 shares authorized 261,314,913 and 15,956,477 issues and outstanding at December 31, 2025 and 2024, respectively | 26132 | 1596 |
| &nbsp;&nbsp;&nbsp;Additional paid-in capital | 232476601 | 10195598 |
| &nbsp;&nbsp;&nbsp;Accumulated earnings (deficit) | (22508508) | (5697241) |
| &nbsp;&nbsp;&nbsp;Common Stock Payable | 18322000 | 790998 |
| &nbsp;&nbsp;&nbsp;Subscription Receivable | (18000000) | - |
| Total Shareholders' Equity (Deficit) | 210316235 | 5290951 |
| Total Liabilities and Shareholders' Equity | $211433083 | $6307303 |

---

The accompanying notes are an integral part of these financial statements.

[*Table of Contents*](#TOC_002)<br>

**Tron Inc.**

 **Consolidated Statements of Operations**

**For the Years Ended December 31, 2025 and 2024**

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
| **Revenue** |  |  |
| &nbsp;&nbsp;&nbsp;Sales | $4740551 | $4311382 |
| &nbsp;&nbsp;&nbsp;Cost of Sales | (3542890) | (3456151) |
| &nbsp;&nbsp;&nbsp;Gross profit | 1197661 | 855231 |
| **Operating expense** |  |  |
| &nbsp;&nbsp;&nbsp;General and administrative expenses | 3715228 | 5190028 |
| &nbsp;&nbsp;&nbsp;Total operating expenses | 3715228 | 5190028 |
| &nbsp;&nbsp;&nbsp;**Operating loss** | (2517567) | (4334797) |
| **Other income / (expense)** |  |  |
| &nbsp;&nbsp;&nbsp;Unrealized (loss) on digital asset investment | (15223891) |  |
| &nbsp;&nbsp;&nbsp;Unrealized Income from digital assets | 5437403 |  |
| &nbsp;&nbsp;&nbsp;Realized loss on digital assets | (2135357) | - |
| &nbsp;&nbsp;&nbsp;Impairment of Intangible assets | (2507267) | - |
| &nbsp;&nbsp;&nbsp;Interest income | 165518 | 27621 |
| &nbsp;&nbsp;&nbsp;Interest expense | (30106) | (32169) |
| &nbsp;&nbsp;&nbsp;Total other income (expense) | (14293700) | (4548) |
| &nbsp;&nbsp;&nbsp;**Income (loss)** | $(16811267) | $(4339345) |
| **Net (loss) per share:** |  |  |
| &nbsp;&nbsp;&nbsp;Basic | $(0.16) | $(0.37) |
| &nbsp;&nbsp;&nbsp;Fully diluted | $(0.16) | $(0.37) |
| **Weighted average number of shares** |  |  |
| &nbsp;&nbsp;&nbsp;Basic | 102635573 | 11623191 |
| &nbsp;&nbsp;&nbsp;Fully diluted | 102635573 | 11623191 |

---

The accompanying notes are an integral part of these financial statements.

[*Table of Contents*](#TOC_002)<br>

**Tron Inc.**

**Consolidated Statements of Changes in Shareholders' Equity**

**For the Years Ended December 31, 2025 and 2024**

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Preferred Stock** | **Preferred Stock** | **Common Stock** | **Common Stock** | | | | | |
|  | **Shares** | **Amount** | **Shares** | **Amount** | **Common Stock**<br> **Payable** | **Subscription**<br> **Receivable** | **Additional Paid-In**<br> **Capital** | **Accumulated**<br> **Deficits** |<br>**Total** |
| **Balance December 31, 2023** |  | $— | 9765500 | $977 | $676000 | $— | $4805117 | $(1357896) | $4124198 |
| Shares issued under S-3 Registration Statement |  |  | 3291477 | 329 | 452748 |  | 2048178 |  | 2501255 |
| Shares payable for Services |  |  |  |  | 16250 |  |  |  | 16250 |
| Shares issued for Services |  |  | 1200000 | 120 |  |  | 1260880 |  | 1261000 |
| Shares issued for common stock payable |  |  | 200000 | 20 | (354000) |  | 353980 |  |  |
| Fair value of Options granted |  |  |  |  |  |  | 584593 |  | 584593 |
| Shares issued for Asset purchase from a related party |  |  | 1500000 | 150 |  |  | 1142850 |  | 1143000 |
| Net loss |  |  |  |  |  |  |  | (4339345) | (4339345) |
| **Balance December 31, 2024** |  |  | 15956977 | 1596 | 790998 |  | 10195598 | (5697241) | 5290951 |
| Exercise of Pre Funded warrants |  |  | 712133 | 71 | (452748) |  | 452748 |  | 71 |
| Common stock issued for investment in Gameverse |  |  | 500000 | 50 |  |  | 190450 |  | 190500 |
| Stock issued for services |  |  | 75000 | 8 | (16250) |  | 44387 |  | 28145 |
| Fair value of Options granted to Directors |  |  |  |  |  |  | 460821 |  | 460821 |
| Series A Preferred stock issued in private placement | 5000 |  |  |  |  |  | 4591392 |  | 4591392 |
| Series A Preferred stock conversion into common stock | (5000) |  | 9518571 | 952 |  |  |  |  | 952 |
| Series B preferred shares issued for fair value of tokens received in private placement | 100000 | 10 |  |  |  |  | 99674990 |  | 99675000 |
| Exercise of options for cash |  |  | 1270000 | 127 |  |  | 695880 |  | 696007 |
| Exercise of cashless warrants |  |  | 18802 | 2 |  |  | (2) |  |  |
| Waiver of Interest on related party Note |  |  |  |  |  |  | 41877 |  | 41877 |
| Warrants exercised for Common Stock using cash |  |  | 8928571 | 893 |  |  | 5802678 |  | 5803571 |
| Stock options exercised cashless |  |  | 135846 | 13 |  |  | (13) |  |  |
| Warrant converted for Common Stock using tokens |  |  | 220000000 | 22000 |  |  | 109978000 |  | 110000000 |
| Placement warrants exercised for Common Stock using cash |  |  | 535715 | 54 |  |  | 348161 |  | 348215 |
| Advisory warrants exercised for Common Stock - cashless |  |  | 3663798 | 366 |  |  | (366) |  |  |
| Black Anthem subscription for Common Stock |  |  |  |  | 18000000 | (18000000) |  |  |  |
| Net loss for the year ended 12/31/25 |  |  |  |  |  |  |  | (16811267) | (16811267) |
| **Balance December 31, 2025** | 100000 | $10 | 261314913 | $26132 | $18322000 | $(18000000) | $232476601 | $(22508508) | $210316235 |

---

The accompanying notes are an integral part of these financial statements.

[*Table of Contents*](#TOC_002)<br>

**Tron Inc.**

**Consolidated Statement of Cash Flows**

**For the Year Ended December 31, 2025 and 2024**

**(unaudited)**

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
| Cash flows from operating activities: |  |  |
| Net Income (loss) | $(16811267) | $(4339345) |
| Adjustment to reconcile net loss to operating activities |  |  |
| &nbsp;&nbsp;&nbsp;Unrealized loss on digital asset investment | 15223891 |  |
| &nbsp;&nbsp;&nbsp;Unrealized income from staking activities | (5437403) |  |
| &nbsp;&nbsp;&nbsp;Realized loss on digital assets | 2135357 |  |
| &nbsp;&nbsp;&nbsp;Stock based compensation | 28145 | 1277250 |
| &nbsp;&nbsp;&nbsp;Fair value of Officer, Director and Employee options | 460821 | 584593 |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization | 336542 | 116880 |
| &nbsp;&nbsp;&nbsp;Impairment of intangible asset | 2507267 | - |
| &nbsp;&nbsp;&nbsp;Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable | 122379 | (87123) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventory | 79629 | (476795) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses | (22869) | (20059) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | (121127) | 137542 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued expenses | 79194 | (40066) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other assets | (23960) | (9236) |
| Net cash provided by (used in) operating activities | (1443401) | (2856359) |
| Cash flows from investing activities: |  |  |
| &nbsp;&nbsp;&nbsp;Cash paid for fixed assets | (68820) | (23264) |
| &nbsp;&nbsp;&nbsp;Cash paid for Intangible Assets to Related Party | - | (250000) |
| Cash flows (used in) investing activities | (68820) | (273264) |
| Financing activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash received from Private placement | 4940559 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payment on promissory note | (500000) | (1000000) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Expenses related to sale of preferred stock | (325000) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Exercise of warrants for cash | 5803571 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Exercise of pre-funded warrants | 71 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Exercise of stock options for cash | 696007 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Ner cash received from S-3 offering | - | 2501255 |
| Cash (used in) financing activities | 10615208 | 1501255 |
| Net increase (decrease) in cash and cash equivalents | 9102987 | (1628368) |
| Cash and cash equivalents at the beginning of the period | 1352373 | 2980741 |
| Cash and cash equivalents at the end of the period | $10455360 | $1352373 |
| SUPPLEMENTAL CASH FLOW INFORMATION: |  |  |
| &nbsp;&nbsp;&nbsp;Cash paid for interest | $- | $- |
| &nbsp;&nbsp;&nbsp;Cash paid for income taxes | $- | $- |
| NON_CASH INFORMATION |  |  |
| &nbsp;&nbsp;&nbsp;Stock issued for Gameverse shares | $190500 | $- |
| &nbsp;&nbsp;&nbsp;Stock issued from Stock Payable – prefunded warrants | $452748 | $- |
| &nbsp;&nbsp;&nbsp;Waiver of accrued interest on related party note | $41877 | $- |
| &nbsp;&nbsp;&nbsp;Stock issued from Stock Payable | $16250 | $- |
| &nbsp;&nbsp;&nbsp;Cashless exercise of warrants | $16 | $- |
| &nbsp;&nbsp;&nbsp;Fair value of preferred shares issued for digital assets | $100000000 | $- |
| &nbsp;&nbsp;&nbsp;Warrant exercised for Common Stock using token | $110000000 | $- |
| &nbsp;&nbsp;&nbsp;Promissory Note issued for intangible asset | $- | $1500000 |
| &nbsp;&nbsp;&nbsp;Series A Preferred Stock conversion to common stock | $952 | $- |
| &nbsp;&nbsp;&nbsp;Establish Right of Use asset and liability | $753564 | $- |
| &nbsp;&nbsp;&nbsp;Common stock issued for intangible assets | $- | $1143000 |
| &nbsp;&nbsp;&nbsp;Black Anthem subscription for common stock | $18000000 | $- |
| &nbsp;&nbsp;&nbsp;Advisory warrants exercised for Common Stock – cashless | $366 | $- |

---

The accompanying notes are an integral part of these financial statements.

[*Table of Contents*](#TOC_002)<br>

**Tron Inc.**

**Notes to Financial Statements**

**For the Years Ended December 31, 2025 and 2024**

**Note 1 - Organization and Business Operations**

Tron Inc. (formerly SRM Entertainment, Inc.) is a Nevada corporation, listed and traded on NASDAQ, headquartered in Florida and was incorporated on April 22, 2022. SRM Entertainment Limited ("SRM Ltd"), a wholly-owned subsidiary, is a limited company incorporated in Hong Kong, on January 23, 1981. The consolidated Tron Inc. and SRM Ltd are collectively referred to as the Company.

The Company's holding of TRON tokens ("TRX") constitutes the largest public ownership of TRX tokens. Through SRM Ltd, our wholly owned subsidiary, the Company designs, develops, and manufactures custom merchandise which includes toys and souvenirs for the world's largest theme parks and other entertainment venues.

**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.

**Recent Issued Accounting Pronouncements**

*Segment Reporting*

In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-07, enhancing segment reporting requirements under ASC 280. This ASU aims to provide investors with more detailed information about a public entity's reportable segments, including those with a single reportable segment. The Key Provisions include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Enhanced Expense Disclosures: Public entities must now disclose significant segment expenses that are regularly provided to the chief operating decision maker (CODM) and included in each reported measure of segment profit or loss.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Disclosure of Other Segment Items: Entities are required to disclose an amount for "other segment items" by reportable segment, representing the difference between reported segment revenues and the sum of significant segment expenses and the reported measure of segment profit or loss. A qualitative description of the composition of these other segment items is also required. Interim Reporting Requirements: All annual disclosures about a reportable segment's profit or loss and assets, including the new disclosures introduced by ASU 2023-07, must now be provided in interim periods as well.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. Single Reportable Segment Entities: Public entities with a single reportable segment are explicitly required to provide all segment disclosures mandated by ASC 280, including those introduced by ASU 2023-07. This clarification ensures that users receive comprehensive information about the entity's operations and performance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. Disclosure of CODM Information: Entities must disclose the title and position of the CODM and explain how the CODM uses the reported measure(s) of segment profit or loss in assessing performance and allocating resources.

These amendments are effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024. The Company adopted the ASU for the year ended December 31, 2024.

*Accounting for Crypto Assets*

In December 2023, the FASB issued ASU 2023-08, Accounting for and Disclosure of Crypto Assets, which establishes accounting guidance for crypto assets meeting certain criteria. The Company holds crypto assets that meet the scope criteria of ASU 2023-08. The pronouncement requires crypto assets which meet the criteria to be recognized at fair value with changes recognized in net income each reporting period. ASU 2023-08 is effective for fiscal years beginning after December 15, 2024, including interim periods within those fiscal years. The Company adopted ASU 2023-08, effective January 1, 2025.

**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, 2025 and 2024.

**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. For the years ended December 31, 2025 and 2024, the Company did not recognize any allowance for doubtful collections

**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.

**Investments in Non-Marketable Equity Securities**

Investments in non-marketable equity investments, including private company investments acquired through private placements, are accounted for using the alternative measurement under ASC 321. Under this method, investments are carried at cost, less any impairment, and adjusted for observable price changes in orderly transactions for the identical or a similar investment of the same issuer. The Company assesses non-marketable equity investments for impairment when events or changes in circumstances indicate that the investment may be impaired. If the fair value of the investment is less than its carrying amount, an impairment loss is recognized in earnings.

**Digital Assets Held in Treasury Wallet Set Up by an Affiliate – Treasury Holdings**

Our Digital Assets consist of TRON tokens ("TRX") and staked TRON tokens (sTRX), as part of its treasury strategy, that meet the scope requirements of ASU 2023-08, Accounting for and Disclosure of Crypto Assets. The Company accounts for these assets at fair value in accordance with ASC 350-60 and ASC 820, with changes in fair value recognized in net income.

Digital Assets are classified as current or noncurrent in the consolidated balance sheet under ASC-210, based on the Company's intended holding period and liquidity considerations. Assets expected to be sold or used within one year from the reporting date are classified as current assets. Treasury assets not intended to be sold or converted to cash within the operating cycle are classified as noncurrent assets.

Crypto assets are not offset against any related liabilities and are presented on a gross basis in the balance sheet, consistent with ASC 210-20, unless a legal right of setoff exists and settlement is intended to occur on a net basis.

Crypto assets that are subject to restrictions on transfer, such as assets locked in staking arrangements are separately disclosed.

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The Company determines the fair value of crypto assets under ASC 820 by means of a derived price using a combination of observable inputs: (i) level 1 input (quoted prices from active markets) and (ii) level 2 input (verifiable on-chain data and exchange rates) at the balance sheet date.

Gains and losses resulting from changes in fair value are included in Other Income (Loss), net in the statement of operations.

The Company discloses the composition of crypto assets, including fair value by major type of token, as well as the location on the balance sheet and significant changes during the reporting period, in accordance with the disclosure requirements of ASU 2023-08.

Future sales or exchanges of coins will be accounted for on a first in first out basis (FIFO).

**Fixed Assets and Other Assets**

Fixed assets are stated at cost at the date of purchase. Depreciation is calculated using the straight-line method over the lesser of the estimated useful lives of the assets or the lease term.

The Company purchases molds for the manufacture of some of its products and are included in fixed assets at cost. Certain agreements call for the manufacturer to reimburse the Company for the cost of the molds upon first shipment of products produced using the molds. The costs of these molds are removed from fixed assets upon reimbursement. Molds that are not subject to reimbursement are depreciated when the products are in production.

**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 for the fully diluted shares.

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| | | |
|:---|:---|:---|
|  | **Years Ended December 31,** | **Years Ended December 31,** |
|  | **2025** | **2024** |
| **Numerator:** |  |  |
| &nbsp;&nbsp;&nbsp;**Net income (loss)** | $**(16811267)** | $**(4339345)** |
| **Denominator:** |  |  |
| &nbsp;&nbsp;&nbsp;Denominator for basic earnings per share - Weighted-average of shares of Common Stock issued and outstanding during the period | 102635573 | 11623191 |
| &nbsp;&nbsp;&nbsp;Denominator for diluted earnings per share | 102635573 | 11623191 |
| **Net income (loss) per share** |  |  |
| &nbsp;&nbsp;&nbsp;Basic | $(0.16) | $(0.37) |
| &nbsp;&nbsp;&nbsp;Diluted | $(0.16) | $(0.37) |

---

**Revenue Recognition**

SRM Ltd 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.

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**TRX Staking**

The Company engages primarily in liquid staking activities with JustLend DAO ("JustLend"), whereby it stakes its digital assets (TRX tokens) in the JustLend protocol to support network operations and, in return, accrued network rewards. The Company received Staked TRX tokens ("sTRX") in return for staking TRX. sTRX represents a tokenized version of TRX. These activities do not involve a contract with a customer and therefore are outside the scope of ASC 606, Revenue from Contracts with Customers.

Users can obtain sTRX tokens by staking TRX tokens on JustLend. The sTRX token is not fixed at a 1:1 conversion ratio with the TRX token; instead, the number of TRX tokens which can be exchanged from one sTRX token increases over time as rewards accumulate in the overall pool of staked tokens. As the voting rewards and energy rent accrue, the conversion ratio of the TRX token to the sTRX token increases gradually, so that the number of TRX tokens which can be obtained by users by unstaking and swapping from sTRX tokens back to TRX tokens increases accordingly. By holding sTRX tokens, the Company is able to accrue enhanced yields from both standard TRX staking and energy rental. For the avoidance of doubt, the sTRX token does not generate discrete staking rewards. Instead, the economic benefit of staking is reflected through a floating conversion rate between TRX and sTRX, which increases over time based on accrued protocol rewards.

The Company accounts for sTRX as a digital asset and measures it at fair value, with changes in fair value recognized in the statement of operations as unrealized gains or losses. Because staking rewards are embedded in the appreciation of sTRX, the Company does not recognize separate staking income until the sTRX is redeemed or disposed of. Any increase in estimated value attributable to staking activity is considered an estimate of unrealized staking income recorded at fair value.

**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, 2025 and 2024 and the cumulative translation gains and losses as of December 31, 2025 and 2024 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 non-employees 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, 2025 consists of net operating loss carry forwards calculated using effective tax rates (20.1%) equating to approximately $3,253,925, less a valuation allowance in the amount of approximately $3,253,925. 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, 2025.

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**Segment Reporting**

The Chief Operating Decision Maker (CODM) (our CEO, Richard Miller) reviews the financial performance of the company on a consolidated basis and makes decisions regarding resource allocation at that level. The CODM has determined that all of the revenue, costs and expenses are attributable to the Company's principal business with the exception of certain general and administrative expenses related to being a public company. As a result, the company has determined that it operates two operating segments in accordance with Accounting Standards Codification (ASC) 280, *Segment Reporting*. The Company's business are (i) the design, manufacture, and sale of toys to premier theme parks. Revenues from external customers are derived from e-commerce, distributors, and direct to retail consumers and (ii) a Digital Asset Treasury Strategy using TRX tokens.

**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 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.

**Note 3 – Inventory**

At December 31, 2025 and 2024, the Company had inventory consisting of finished goods of $704,171 and $783,800, respectively.

**Note 4 - Accounts Receivable**

At December 31, 2025 and 2024, the Company had accounts receivable of $671,779 and $794,158, respectively.

**Note 5 – Prepaid Expenses**

At December 31, 2025, the Company had a total of $511,615 in prepaid expenses, consisting of deposits on orders of $156,365, prepaid insurance of $152,470 other expenses of $100,445 and security deposits of $102,335. The balance of prepaid expenses at December 31, 2024 was $488,746 consisting of deposits on orders of $396,489, prepaid insurance of $33,382 and other prepaid expenses of $58,875.

**Note 6 - Investment in digital assets – held in Treasury Wallet set up by an Affiliate**

On June 16, 2025, the Company entered into a Securities Purchase Agreement with an institutional investor entity (the "Investor") for 100,000 shares of its Series B Convertible Preferred Stock par value $0.0001 per share, convertible into 200,000,000 shares of common stock and warrants with and exercise price of $0.50 per share, in exchange for $100,000,000 in digital assets consisting of TRX tokens. On June 28, 2025, the Company received 365,096,845 TRX tokens as per the Securities Purchase Agreement. On August 27, 2025, the Investor exercised the warrants for $110,000,000 in digital assets consisting of 312,500,100 TRX tokens. At December 31, 2025, the 677,596,800 tokens (out of the 677,596,945 TRX tokens received in the transactions) have been staked, through JustLend, in return for approximately 549,676,892 sTRX, a liquid staking token, which represents a tokenized version of TRX.

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The following table presents the roll-forward of the fair value of our digital assets for the year ended December 31, 2025, based on the fair value model under ASU-2023-98:

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| | | |
|:---|:---|:---|
|  | **Fair Value** | **Fair Value** |
|  | **TRX** | **sTRX** |
| **Balance, December 31, 2024** | $- | $- |
| Preferred stock sale paid with TRX tokens | 100000000 |  |
| Warrant exercise paid with TRX tokens | 110000000 |  |
| Staking Transactions | (207864661) | 207864661 |
| Unrealized income from staking TRX |  | 5437403 |
| Change in fair value |  | (15223891) |
| Realized (loss) from TRX to sTRX conversion | (2135357) | - |
| Other income (loss) | 25 | (25) |
| **Balance, December 31, 2025** | $7 | $198078148 |

---

The following table presents the Company's Digital Asset holdings as of December 31, 2025:

Schedule of Company's Digital Asset Holdings

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| | | | |
|:---|:---|:---|:---|
|  | **Quantity** | **Cost Basis** | **Fair Value** |
| TRX tokens | 94 | $29 | $7 |
| sTRX tokens | 549676892 | 207864661 | 198078148 |
|  |  | $207864690 | $198078155 |

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As a result of our directors' affiliations, potential conflicts may arise from the following relationships:

● we engaged BiT Global, a licensed Trust or Company Service Provider and registered trust company in Hong Kong, to set up and be the custodian of the Treasury Wallet. Our director, Mr. Liu, is one of the directors of BiT Global, and

● some of our directors have certain ties with the TRON blockchain ecosystem. For example, Weike Sun is the father of Justin Sun, the founder of TRON. Mr. Liu has been the senior advisor to Tron DAO since 2021. Mr. Yang holds senior positions for Tronscan, the official blockchain explorer for Tron protocol, and

● currently our TRX tokens are "staked" on JustLend, a decentralized finance (DeFi) protocol, in exchange for sTRX tokens. An sTRX token is a derivative token that represents the "staked" TRX tokens, which can automatically generate yield for the token holders. JustLend, despite being a DeFi protocol, may be considered a related party due to its significant dependency on the TRON ecosystem.

**Note 7 - Investment in Gameverse Interactive Corp**

On January 24, 2025, the Company entered into a Securities Purchase Agreement with Gameverse Interactive Corp, a video game developer ("Gameverse") under the terms of which, the Company exchanged 500,000 shares of its restricted common stock for 132,000 shares of restricted common stock of Gameverse. The fair value of $190,500 was determined using the closing price of the Company' common stock on the date of the agreement.

**Note 8 – Fixed Assets and Other Assets**

At December 31, 2025 and 2024, the Company had fixed assets totaling $71,877 and $48,279, net of accumulated depreciation of $74,653 and $29,431, respectively, as follows:

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| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
| **Fixed Asset** |  |  |
| Tooling and Molds | $125245 | $56425 |
| Computer equipment and software | 21285 | 21285 |
|  | 146530 | 77710 |
| Accumulated depreciation | (74653) | (29431) |
|  | $71877 | $48279 |

---

At December 31, 2025 and 2024 other assets consisting primarily of non-depreciable molds totaling $67,430 and $43,380, respectively.

**Note 9 – Intangible Assets and Secured Note – Related Party**

On September 3, 2024, the Company entered into an Asset Purchase Agreement with Suretone Entertainment, Inc. ("Suretone" or "Seller") pursuant to which the Company agreed to acquire the 2019 movie titled "The Kid" (directed by Vincent D'Onofrio and starring Ethan Hawke and Chris Pratt) and certain other assets (the "Assets") related to "The Kid" from the Seller, for an aggregate purchase price of $2,893,000 (the "Purchase Price").

In consideration for the purchased Assets, the Company paid the Purchase Price which consisted of: (i) payment of $250,000 in cash on September 3, 2024; (ii) issuance of 1,500,000 restricted shares of the Company's common stock, par value $0.0001 per share (valued at $0.762 per share which, was the market per share value of the Company's common stock); and (iii) issuance of a secured promissory note in the original amount of $1,500,000 (the "Secured Note") to a related party. The Secured Note's term is one year with an interest rate of 8%. On October 21, 2024, the Company paid $500,000 and on December 13, 2024, the Company paid an additional $500,000 of the principal balance of the Secured Note leaving a principal balance of $500,000 at December 31, 2024. On January 2, 2025, the Company paid $250,000 and on June 14, 2025 paid another $250,000 which paid off the Note. In addition, the $41,877 accrued interest on the note was waived in connection with the early pay-off of the Note and recorded as an adjustment to additional paid-in capital.

The Assets are being amortized over a ten-years. Amortization expense totaled $289,300 and $96,433, respectively, for the years ended December 31, 2025 and 2024.

As a result of the Company's expansion into a Digital Assets Strategy in 2025 the Company determined that the movie did not fit into its ongoing operations and decided it was in the best interest of the Company's shareholder to sell the asset. Consequently, since the asset has little value to the ongoing operations, the asset is considered impaired for accounting purposes and an impairment reserve of $2,507,267 has been recorded.

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**Note 10 – Income Tax**

The Company accounts for income taxes in accordance with **ASC 740, *Income Taxes***. Deferred income taxes are recognized for temporary differences between the financial statement carrying amounts and the tax bases of assets and liabilities. A valuation allowance is established when it is more likely than not that some portion or all of the deferred tax assets will not be realized.

During the year ended December 31, 2025, the Company underwent a change of control (see Note 6 - Investment in digital assets and Note 11 – Capital Structure). As a result of the change in control, the Company falls under the Internal Revenue Code ("IRC") section 382, which limits the ability to utilize certain NOLs.

The Company's deferred tax asset at December 31, 2025 consists of net operating loss carry forwards calculated using effective tax rates (20.1%) equating to approximately $3,253,925, less a valuation allowance in the amount of approximately $3,253,925. 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, 2025.

**Note 11 - Capital Structure**

On June 15, 2025, our Board of Directors approved and recommended the approval by our stockholders of (i) the possible change in control of the Company (as defined by the Nasdaq Stock Market LLC's Listing Rules) via the issuance to an institutional investor (the "Investor"), at a price below the Minimum Price (as defined by the Nasdaq Stock Market LLC's Listing Rules), of more than 20% of the shares of the Company's common stock, par value $0.0001 per share (the "Common Stock") outstanding with the Investor being the largest shareholder while holding over 20% of the shares of Common Stock (the "Change of Control and 20% Issuance") in accordance with The Nasdaq Stock Market LLC's Listing Rule 5635(b) and (d) ("Nasdaq Rule 5635"), in connection with the $100,000,000 private investment in public equity (the "PIPE Offering") entered into between the Company and the Investor pursuant to which the Company issued 100,000 shares of its Series B Convertible Preferred Stock par value $0.0001 per share (the "Series B Preferred Stock"), convertible into 200,000,000 shares of Common Stock, and warrants (the "PIPE Warrants") to acquire up to 220,000,000 shares of Common Stock, to the Investor; and (ii) an amendment to our Articles of Incorporation to increase the total number of authorized shares of common stock from 100,000,000 to 1,000,000,000 (the "Charter Amendment").

Certain of our stockholders, holding a majority of our voting power on June 15, 2025, approved the Change of Control, a 20% Issuance and the Charter Amendment by Written Consent.

The required consent of at least a majority of the votes allocated to our voting shares was given for each of the actions listed above.

Under Section 78.320 of the Nevada Revised Statutes, the written consent of stockholders holding a majority of votes outstanding may be substituted for a special meeting of the stockholders. Based on the foregoing and in order to eliminate the costs involved in holding a special meeting, the Board has determined not to call a special meeting of stockholders.

As such, a Schedule 14C Information Statement was mailed on or about July 23, 2025, by the Board of Directors (the "Board") of Tron Inc. to the holders of record of our outstanding Common Stock and our outstanding shares of Series A Convertible Preferred Stock, par value $0.0001 per share (the "Series A Preferred Stock"), as of the close of business on the Record Date, pursuant to Rule 14c-2 promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act").

The Charter Amendment is effective August 29, 2025.

***Preferred Stock* –** The Company has 10,000,000 shares of preferred stock, par value $0.0001 per share, of which 1,000,000 shares are designated as Series A Preferred Stock and 5,000 shares of the Series A Preferred Stock are designated as convertible, and 100,000 shares are designated as Series B Preferred Stock.

As of December 31, 2025, there were no shares of Series A Preferred Stock issued and outstanding; however, during May 2025, the Company entered into a Securities Purchase Agreement (the "May PIPE") under the terms of which, the Company issued 5,000 Series A Preferred shares convertible into 8,928,571 shares of common stock for gross proceeds of $5,000,000 ($4,591,392 net of expenses). During June 2025, the 5,000 shares were converted into 8,928,571 shares of the Company's common stock.

On June 16, 2025, the Company entered into a Securities Purchase Agreement under the terms of which the Company received $100,000,000 in digital assets and issued 100,000 shares of its Series B Preferred Stock convertible into 200,000,000 shares of common stock and warrants convertible into 220,000,000 shares of the Company's common stock with an exercise price of $0.50 per share in return for the issuance of 100,000 Series B Preferred shares. The stated value of the Series B Preferred Stock is $1,000 per share. The digital assets purchase is described more fully in Note 6 above and the amendment to our Articles of Incorporation described in Item 2 below. In connection with this transaction the Company incurred a total of $325,000 in legal expense, which has been netted against the $100,000,000 in additional paid-in-capital.

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Holders of the Preferred Stock Shares are entitled to cast the number of votes equal to the number of whole shares of Common Stock into which the shares of Series B Preferred Stock are convertible on the basis of a conversion price of $0.50. The Holders shall vote together with the holders of shares of Common Stock as a single class.

Holders shall be entitled to receive, and the Company shall pay dividends on Preferred Stock Shares equal (on an as-if-converted-to-Common-Stock basis) to and in the same form as dividends actually paid on shares of the Common Stock when, as and if such dividends are paid on shares of the Common Stock.

Upon any liquidation, dissolution or winding-up of the Company, the holders of Preferred Stock Shares have a preference for the distribution of the entire remaining assets and funds of the Company legally available for distribution over any holders of other series of preferred stock or of the Common Stock.

The Certificate of Designation ("CoD") for Series B Preferred Stock includes a Redemption feature such that upon the occurrence and continuance of a Triggering Event (defined as "(i) the objection or rejection by the Trading Market (as defined in the Purchase Agreement), any Governmental Entity (as defined in the Purchase Agreement), or any regulatory or self-regulatory agency of any of the Transactions (as defined in the Purchase Agreement) on or before December 31, 2025, or (ii) the failure of any regulatory or self-regulatory agency to approve all of the Transactions, if any such approval is required, on or before December 31, 2025") and following a ten day opportunity to cure the relevant written notice from the Holders to the Company, each Holder shall have the right to require the Company to redeem all or any portion of the Series B Preferred Stock then held by such Holder for a redemption price equal to the full (for fully redemption) or pro rata (for portion redemption) Triggering Redemption Amount as defined in the CoD. On August 7, 2025, Bravemorning Limited, the Holder only waived all rights it may have pursuant to Section 8(b) of the Series B CoD, solely upon the occurrence of a Triggering Event, to require that Tron Inc. redeem all or any portion of the Series B Convertible Preferred Stock held by Bravemorning Limited for a redemption price equal to the relevant Triggering Redemption Amount as defined in the CoD.

The issuances of the Series A and B Preferred Stock in the related transactions resulted in a change of control of the Company.

***Common Stock*** – As described above, the Company has 1,000,000,000 shares of Common Stock, par value $0.0001 authorized. At December 31, 2025 and 2024, the Company had 261,314,913 and 15,956,477 shares, respectively, of its issued and outstanding common stock.

*<u>Year ended December 31, 2024, issuances included:</u>*

The Company issued 200,000 shares of the Common Stock Payable at December 31, 2023.

The Company entered into Consulting Agreements (the "Agreements") with four consultants under the terms of which the Company issued 1,200,000 shares of its common stock valued at $1,261,000. The shares were valued at the market rate of the Company's stock on the date of the Agreements.

The Company issued 1,500,000 shares of its common stock in connection with the Asset purchase described above. The shares were valued at $1,143,000 which was the market rate of the Company's stock on the date of the Agreement.

The Company issued a total of 3,291,477 shares of its common stock in connection with the Company's Form S-3 Registration Statement No. 333-282028 filed September 11, 2024 (the "Registration"). The shares were issued at a negotiated price which generated net proceeds to the Company of $2,501,255.

*<u>Year ended December 31, 2025, issuances included:</u>*

The Company issued 712,133 shares of its common stock valued at $452,748 upon conversion of 712,133 pre-funded warrants which were included in Common Stock Payable at December 31, 2024.

The Company issued 25,000 shares of its common stock valued at $16,250 (market price at date of the agreement) in connection with a Consulting Agreement which were included in Common Stock Payable at December 31, 2024.

The Company issued 500,000 shares of its common stock in connection with a Stock Purchase Agreement with Gameverse Interactive Corp ("Gameverse"), valued at $190,500 (TRON market price at date of purchase) pursuant to which the Company received 132,000 shares of common stock of Gameverse.

The Company entered into a Consulting Agreement (the "Agreements") under the terms of which the Company issued 50,000 shares of its common stock valued at $28,145. The shares were valued at the market rate of the Company's stock on the date of the Agreement.

The Company converted 5,000 Series A Preferred shares into 9,518,571 shares of its common stock which includes 590,000 shares related to fees associated with the transaction See Series A Preferred stock above.

The Company issued 1,270,000 shares of its common stock for the exercise of stock options. Proceeds from the exercises total $696,007.

[*Table of Contents*](#TOC_002)<br>

The Company issued 18,802 shares of its common stock for the cashless exercise of warrants and 135,846 shares for the cashless exercise of options.

The Company issued 8,928,571 shares of its common stock for the exercise of warrants with proceeds totaling $5,803,571.

The Company issued 220,000,000 shares of its common stock for the exercise of warrants for 312,500,100 TRX tokens valued at $110,000,000.

The Company issued 535,715 shares of its common stock for the exercise of placement warrants for cash totaling $348,215.

The Company issued 3,663,798 shares of its common stock for the cashless exercise of advisory warrants.

**Common Stock Payable**

*At December 31, 2023, the Company had $676,000 of Common Stock Payable. Activity for the year ended December 31, 2024 included the following:*

During the year ended December 31, 2024, the Company issued 200,000 shares of the Common Stock Payable valued at $354,000.

During the year ended December 31, 2024, the Company entered into an agreement which called for the issuance of 712,133 pre-funded warrants with a far value of $452,748 recorded in Connon Stock Payable.

During the year ended December 31, 2024, the company entered into a services agreement which called for the issuance of 25,000 shares of common stock valued at $16,250 (market value on date of agreement) which had not been issued as of December 31, 2024.

*The balance of Common Stock Payable at December 31, 2024 was $790,998. Activity for the year ended December 31, 2025, included the following:*

During the year ended December 31, 2025, the Holder of the pre-funded warrants described above converted the warrants into shares of the Company's common stock valued at $452,748.

Additionally, the 25,000 shares under the services agreement, valued at $16,250, were issued.

In December 2025, the Company entered into a Private Placement (Securities Purchase Agreement or "SPA") with a related party for the purchase of $18,000,000 of the Company's common stock (13,067,151 restricted shares), payable in stablecoins. The $18,000,000 has been recorded as a Subscription Receivable and Common Stock Payable. The SPA calls for the delivery of the stablecoins within 10 days of the execution of the SPA. Subsequent to December 31, 2025, the stablecoins were delivered and the common stock was issued.

The balance of Common Stock Payable at December 31, 2025, was $18,322,000.

**Note 12 – Options and Warrants**

**Options**

During the year ended December 31, 2024, the Company granted a total of 995,000 options to Officers, Directors and Employees with an average exercise price of $1.21, with five-year terms and exercisable immediately. The Company recorded an expense of $573,548 in connection with these options. Additionally, the Company granted 50,000 options with an exercise price of $0.63 to a consultant, of which 25,000 are immediately vested and 25,000 are vested six months from the date of the agreement. The Company recorded an expense of $11,045 related to the vested options.

During the year ended December 31, 2025, the Company granted a total of 2,025,000 options to the Directors with an exercise price of $0.56 - $0.68, with five-year term and exercisable immediately. The Company recorded an expense of $460,821 in connection with these options.

The fair value of these options was measured using the Black-Scholes valuation model at the grant date. The table below sets forth the assumptions for Black-Scholes valuation model on the respective reporting date.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| <br>**Reporting Date** |<br>**Number**<br>**of**<br>**Options** |<br>**Term**<br>**(Years)** |<br>**Exercise**<br>**Price** | **Market**<br>**Price on**<br>**Grant**<br>**Date** |<br>**Volatility**<br>**Percentage** |<br>**Fair**<br>**Value** |
| 02/21/2024 | 995000 | 2.5 | $1.21 | $1.21 | 62.6% | $573548 |
| 12/31/2024 | 25000 | 5.0 | $0.63 | $0.63 | 86.4% | $11045 |
| 01/07/2025 | 375000 | 2.5 | $0.68 | $0.68 | 75.0% | $119635 |
| 5/22/2025 | 1650000 | 2.5 | $0.56 | $0.52 | 64.5% | $341186 |

---

During the year ended December 31, 2025, a total of 1,320,000 shares of common stock were issued in connection with options exercised. Total proceeds from the exercises were $696,007. At December 31, 2025, the Company had a total of 1,815,000 unexercised options with an average exercise price of $0.98 per share.

The following table sets forth the option activity for the year ended December 31, 2025:

Schedule of Option Activity

---

| | |
|:---|:---|
| Balance, December 31, 2024 | 1100000 |
| Options granted | 2025000 |
| Options exercised | (1320000) |
| Balance, December 31, 2025 | 1815000 |

---

[*Table of Contents*](#TOC_002)<br>

**Warrants**

On May 21, 2025, the Company entered into a Securities Purchase Agreement (the "May Securities Purchase Agreement") with an institutional investor for a private investment in public equity (the "May PIPE Offering") of 5,000 shares of its Series A Convertible Preferred Stock par value $0.0001 per share (the "Series A Preferred Stock"), convertible into 8,928,571 shares of Common Stock, at a conversion price of $0.56 per share of Series A Preferred Stock, and an aggregate of 8,928,571 warrants (the "May PIPE Warrants") to acquire up to 8,928,571 shares of Common Stock, subject to beneficial ownership limitations set by the holder. The purchase price for one unit (consisting of one share of Series A Convertible Preferred Stock convertible into approximately 1,785 shares and the same number of warrants) was $1,000. The May PIPE Warrants issued in the May PIPE Offering are exercisable immediately upon issuance at an exercise price of $0.65 per share and will expire two years from the date of issuance. As of December 31, 2025, all of the Series A Convertible Preferred Stock had been converted into a total of 8,928,571 shares of common stock, and all of the May PIPE Warrants had been exercised for 8,928,571 shares of common stock.

In addition, the Company issued to the Placement Agent or its designees the placement agent warrants (the "May Placement Agent Warrants") to purchase up to an aggregate of 535,715 shares of Common Stock (6.0% of the Common Stock sold in the May PIPE Offering). The Placement Agent Warrants have identical terms as the May PIPE Warrants. In November, 2025, the Placement Agent Warrants were exercised.

In addition, pursuant to an Advisory Agreement with an entity associated with American Ventures (the investor in the previously disclosed May 2025 Series A preferred stock offering and disclosed below), the Company issued a warrant to American Ventures (the "American Ventures Warrants") for 5,360,000 warrants with substantially the same terms as the June PIPE Warrants except that the American Ventures Warrants are exercisable for five years. In November, 2025, the Placement Agent Warrants were exercised using the cashless feature for 3,663,798 shares of common stock.

On June 16, 2025, the Company entered into a Securities Purchase Agreement (the "June Securities Purchase Agreement") with an institutional investor entity (the "Investor") for a private investment in public equity (the "June PIPE Offering") of 100,000 shares of its Series B Convertible Preferred Stock par value $0.0001 per share (the "Series B Preferred Stock"), convertible into 200,000,000 shares of common stock, par value $0.0001 (the "Common Stock"), at a conversion price of $0.50 per share of Common Stock, and warrants (the "June PIPE Warrants") to acquire up to 220,000,000 shares of Common Stock. The June PIPE Warrants issued in the June PIPE Offering are exercisable immediately upon issuance at an exercise price of $0.50 per share and will expire two years from the date of issuance. The 100,000 shares of Series B Preferred Stock are referred to herein as the "Preferred Stock Shares."

During June 2025, certain underwriter representatives exercised 47,380 warrants on a cashless basis for the issuance of 18,802 shares of the Company's common stock.

The following table sets forth the Warrant activity for the year ended December 31, 2025:

Schedule of Warrant Activity

---

| | |
|:---|:---|
| **Balance, December 31, 2024** | 150000 |
| Exercise of underwriter warrants | (47380) |
| Cashless exercise of consultant warrants | (100000) |
| May PIPE Warrants | 8928571 |
| Placement Warrants | 535714 |
| American Venture Warrants | 5360000 |
| Exercise of the May PIPE Warrants | (8928571) |
| Exercise of Placement Warrants | (535714) |
| Exercise of American Venture Warrants | (5360000) |
| June PIPE Warrants | 220000000 |
| Exercise of the June PIPE Warrants | (220000000) |
| **Balance, December 31, 2025** | 2620 |

---

**Note 13 - Segment Reporting**

The Company has two reportable segments: (i) the toy business consisting of design, development and manufacture (through third parties) of toys and souvenir items and (ii) digital assets, consisting of investing for growth in the appreciation of the asset and staking the tokens to produce income to the Company.

Gross profit (loss) is the segment performance measure the chief operating decision maker ("CODM") (our CEO, Richard Miller) uses to assess the Company's reportable segments.

The toys and souvenir items ("Products") generate revenue from the sale of the Products to theme parks and entertainment venues and direct sales through Amazon and other direct channels. Cost of revenue consists primarily of direct manufacturing costs and freight and shipping.

The digital assets have nominal costs associated with revenue generated through staking.

[*Table of Contents*](#TOC_002)<br>

The following table presents segment revenue and segment gross profit for the years ended December 31, 2025 and 2024 reviewed by the CODM:

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
| Revenue from Toy sales | $4740551 | $4311382 |
| &nbsp;&nbsp;&nbsp;Cost of sales | 3542890 | 3456151 |
| Gross profit | 1197661 | 855231 |
| Income from digital assets |  |  |
| &nbsp;&nbsp;&nbsp;Unrealized (loss) on digital asset investments | (15223891) |  |
| &nbsp;&nbsp;&nbsp;Unrealized income from staking activities | 5437403 |  |
| &nbsp;&nbsp;&nbsp;Realized (loss) from TRX to sTRX conversion | (2135357) | - |
| Total income (loss) from digital assets | (11921845) | - |
| Operating (expenses) | (3715758) | (5190028) |
| Impairment of intangible asset | (2507267) |  |
| Net interest income (expense) | 135411 | (4548) |
| Net (loss) | $(16811267) | $(4339345) |

---

Assets and liabilities are not separately analyzed or reported to the CODM and are not used to assist in decisions surrounding resource allocation and assessment of segment performance. As such, an analysis of segment assets and liabilities has not been included in this financial information.

**Note 14 - Commitments and Contingencies**

The Company entered into a new office lease Effective September 1, 2025. The primary term of the lease is three years and two months with a renewal option for an additional two years. Minimum annual lease payments for the primary term and renewal are as follows:

---

| | | | |
|:---|:---|:---|:---|
| Primary Period | Amount | Amount During Renewal Period | Amount |
| September 1 to August 31, 2026 | $262354 | November 1 to October 31, 2029 | $278988 |
| September 1 to August 31, 2027 | $267601 | November 1 to October 31, 2030 | $284568 |
| September 1 to August 31, 2028 | $273518 |  |  |
| September 1 to October 31, 2028 | $46498 |  |  |

---

Under the new standard for lease reporting, the Company recorded a Right of Use Asset ("ROU") and an offsetting lease liability of $753,564 representing the present value of the future payments under the lease calculated using an 7.5% discount rate (the current borrowing rate of the company). The ROU and lease liability are amortized over the three-year life of the lease. The unamortized balances at December 31, 2025 were ROU asset of $682,286, current portion of the lease liability of $220,206 and non-current portion of lease liability of $464,100.

Additionally, the Company recognized accreted interest expense of $18,194 and rent expense of $71,278 for the lease during the year ended December 31, 2025.

***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 15 – Subsequent Events**

On July 28, 2025, the Company filed an S-3 Registration Statement under which the Company may, from time to time in one or more offerings, offer and sell up to $1,000,000,000 in the aggregate of common stock, preferred stock, debt securities, warrants and rights to purchase common stock or preferred stock, or any combination of the foregoing, either individually or as units comprised of one or more of the other securities. Pursuant to the SEC comment letters, on August 22, 2025, October 17, 2025, and March 2, 2026, the Company filed amendments to the S-3.

In December 2025, the Company entered into a Private Placement (Securities Purchase Agreement or "SPA") for the purchase of $18,000,000 of the Company's common stock, payable in stablecoins. The $18,000,000 has been recorded as Common Stock Payable. The SPA calls for the delivery of the stablecoins within 10 days of the execution of the SPA. On January 8, 2026, the stablecoins were delivered and the 13,067,151 shares of restricted common stock were issued.

The Company evaluated subsequent events through the date of this filing and has had no additional material events subsequent to December 31, 2025.

## Exhibit 4.1

**Exhibit 4.1**

**DESCRIPTION OF REGISTRANT'S SECURITIES**

**REGISTERED PURSUANT TO SECTION 12 OF THE**

**SECURITIES EXCHANGE ACT OF 1934**

Set forth below is the description of each class of securities of Tron Inc. (the "Company") outstanding as of December 31, 2025. The following description summarizes the most important terms of these securities. This summary does not purport to be complete and is qualified in its entirety by the provisions of our Articles of Incorporation and our Bylaws, copies of which have been previously filed with the Securities and Exchange Commission and are incorporated herein by reference. You should refer to our Articles of Incorporation, Bylaws and the applicable provisions of Nevada law for a complete description.

Common stock, par value $0.0001 per share (the "Common Stock") is the only class of our securities currently registered under Section 12 of the Securities Exchange Act of 1934 (the "Exchange Act"). Our Common Stock is listed on the Nasdaq Capital Market under the symbol "TRON."

<u>Capitalization</u>

Our authorized capital stock consists of 1,000,000,000 shares of Common Stock, and 10,000,000 shares of preferred stock, par value $0.0001 per share (the "Preferred Stock"), of which 1,000,000 shares are designated as Series A Preferred Stock and 5,000 shares of the Series A Preferred Stock are designated as convertible, and 100,000 shares are designated as Series B Preferred Stock.

**Common Stock**

<u>Dividend Rights</u>

Subject to preferences that may apply to any shares of Preferred Stock outstanding at the time, the holders of our Common Stock may receive dividends out of funds legally available if our board of directors (the "Board"), in its discretion, determines to issue dividends and then only at the times and in the amounts that our Board may determine. The Company did not declare or pay any dividends for the year ended December 31, 2025.

<u>Voting Rights</u>

Each stockholder is entitled to one vote for each share of Common Stock held by such stockholder. The Common Stock shares do not contain cumulative voting rights.

<u>No Preemptive or Similar Rights</u>

Our Common Stock is not entitled to preemptive or conversion rights or other subscription rights, and is not subject to redemption or sinking fund provisions.

<u>Right to Receive Liquidation Distributions</u>

Holders of common stock are entitled to dividends when, and if, declared by the Board out of funds legally available therefore; and then, only after all preferential dividends have been paid on any outstanding Preferred Stock.

<u>Transfer Agent and Registrar</u>

The Company's transfer agent is ClearTrust, LLC with an address of 16540 Pointe Village Drive, Suite 210, Lutz, FL 33558 and a phone number of (813) 235-4490.

**Description of Series A Convertible Preferred Stock**

<u>Stated Value</u>

The stated value of the Series A Convertible Preferred Stock shall be $1,000 per share.

<u>Dividend Rights</u>

Holders shall be entitled to receive, and the Corporation shall pay, dividends on shares of Series A Preferred Stock equal (on an as-if-converted-to-Common-Stock basis) to and in the same form as dividends actually paid on shares of the Common Stock when, as and if such dividends are paid on shares of the Common Stock. No other dividends shall be paid on shares of Series A Preferred Stock.

<u>Voting Rights</u>

Holders of Series A Preferred Stock shall be entitled to cast the number of votes equal to the number of whole shares of Common Stock into which the shares of Series A Preferred Stock are convertible on the basis of a conversion price of $0.56. The Holders shall vote together with the holders of shares of Common Stock as a single class.

**Description of Series B Convertible Preferred Stock**

<u>Stated Value</u>

The stated value of the Series B Convertible Preferred Stock shall be $1,000 per share.

<u>Voting Rights</u>

Holders of the Series B Convertible Preferred Stock are entitled to cast the number of votes equal to the number of whole shares of Common Stock into which the shares of Series B Preferred Stock are convertible on the basis of a conversion price of $0.50. The Holders shall vote together with the holders of shares of Common Stock as a single class. The Series B Convertible Preferred Stock cannot be voted on an "as converted basis" of more than 19.99% of the currently outstanding shares of Common Stock until shareholder approval of such voting rights is obtained and becomes effective. Shareholder approval of such issuance was obtained and became effective on August 11, 2025; and therefore the 19.99% limitation was no longer applicable as of such date.

<u>Dividend Rights</u>

Holders shall be entitled to receive, and the Company shall pay, dividends on Series B Convertible Preferred Stock equal (on an as-if-converted-to-Common-Stock basis) to and in the same form as dividends actually paid on shares of the Common Stock when, as and if such dividends are paid on shares of the Common Stock.

Upon any liquidation, dissolution or winding-up of the Company, the holders of Series B Convertible Preferred Stock have a preference for the distribution of the entire remaining assets and funds of the Company legally available for distribution over any holders of other series of Preferred Stock or of the Common Stock.

## Exhibit 23.1

**Exhibit 23.1**

![](ex23-1_001.jpg)

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation in the Registration Statements on Form S-3 (File Numbers 333-282028, 333-287630, 333-288986, and 333-294415) and Form S-8 (File Number 333-287509) of our report dated March 25, 2026, of Tron Inc. relating to the audit of the consolidated financial statements as of December 31, 2025 and 2024, and for the periods then ended, and the reference to our firm under the caption "Experts" in each such Registration Statement.

/s/ M&KCPA's, PLLC

The Woodlands, Tx

March 25, 2026

## Exhibit 31.1

**Exhibit 31.1**

**TRON INC.**

**CERTIFICATION PURSUANT TO**

**SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002**

I, Richard Miller, certify that:

1. I
 have reviewed this Annual Report on Form 10-K of Tron Inc.

2. Based
 on my knowledge, this report does not contain any untrue statement of a material fact or
 omit to state a material fact necessary to make the statements made, in light of the circumstances
 under which such statements were made, not misleading with respect to the period covered
 by this report;

3. Based
 on my knowledge, the financial statements, and other financial information included in this
 report, fairly present in all material respects the financial condition, results of operations
 and cash flows of the registrant as of, and for, the periods presented in this report;

4. The
 registrant's other certifying officer and I are responsible for establishing and maintaining
 disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e))
 and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f)
 and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed
 such disclosure controls and procedures, or caused such disclosure controls and procedures
 to be designed under our supervision, to ensure that material information relating to the
 registrant, including its consolidated subsidiaries, is made known to us by others within
 those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;(b) Designed
 such internal control over financial reporting, or caused such internal control over financial
 reporting to be designed under our supervision, to provide reasonable assurance regarding
 the reliability of financial reporting and the preparation of financial statements for external
 purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;(c) Evaluated
 the effectiveness of the registrant's disclosure controls and procedures and presented
 in this report our conclusions about the effectiveness of the disclosure controls and procedures,
 as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;(d) Disclosed
 in this report any change in the registrant's internal control over financial reporting
 that occurred during the registrant's most recent fiscal quarter (the registrant's
 fourth fiscal quarter in the case of an annual report) that has materially affected, or is
 reasonably likely to materially affect, the registrant's internal control over financial
 reporting; and

5. The
 registrant's other certifying officer and I have disclosed, based on our most recent
 evaluation of internal control over financial reporting, to the registrant's auditors
 and the audit committee of the registrant's board of directors (or persons performing
 the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;(a) All
 significant deficiencies and material weaknesses in the design or operation of internal control
 over financial reporting which are reasonably likely to adversely affect the registrant's
 ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;(b) Any
 fraud, whether material or not, that involves management or other employees who have a significant
 role in the registrant's internal control over financial reporting.

Date: March 25, 2026

---

| |
|:---|
| */s/ Richard Miller* |
| **Richard Miller,** |
| Principal Executive Officer |

---

## Exhibit 31.2

**Exhibit 31.2**

**TRON INC.**

**CERTIFICATION PURSUANT TO**

**SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002**

I, Douglas McKinnon, certify that:

1. I
 have reviewed this Annual Report on Form 10-K of Tron Inc.;

2. Based
 on my knowledge, this report does not contain any untrue statement of a material fact or
 omit to state a material fact necessary to make the statements made, in light of the circumstances
 under which such statements were made, not misleading with respect to the period covered
 by this report;

3. Based
 on my knowledge, the financial statements, and other financial information included in this
 report, fairly present in all material respects the financial condition, results of operations
 and cash flows of the registrant as of, and for, the periods presented in this report;

4. The
 registrant's other certifying officer and I are responsible for establishing and maintaining
 disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e))
 and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f)
 and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed
 such disclosure controls and procedures, or caused such disclosure controls and procedures
 to be designed under our supervision, to ensure that material information relating to the
 registrant, including its consolidated subsidiaries, is made known to us by others within
 those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;(b) Designed
 such internal control over financial reporting, or caused such internal control over financial
 reporting to be designed under our supervision, to provide reasonable assurance regarding
 the reliability of financial reporting and the preparation of financial statements for external
 purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;(c) Evaluated
 the effectiveness of the registrant's disclosure controls and procedures and presented
 in this report our conclusions about the effectiveness of the disclosure controls and procedures,
 as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;(d) Disclosed
 in this report any change in the registrant's internal control over financial reporting
 that occurred during the registrant's most recent fiscal quarter (the registrant's
 fourth fiscal quarter in the case of an annual report) that has materially affected, or is
 reasonably likely to materially affect, the registrant's internal control over financial
 reporting; and

5. The
 registrant's other certifying officer and I have disclosed, based on our most recent
 evaluation of internal control over financial reporting, to the registrant's auditors
 and the audit committee of the registrant's board of directors (or persons performing
 the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;(a) All
 significant deficiencies and material weaknesses in the design or operation of internal control
 over financial reporting which are reasonably likely to adversely affect the registrant's
 ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;(b) Any
 fraud, whether material or not, that involves management or other employees who have a significant
 role in the registrant's internal control over financial reporting.

Date: March 25, 2026

---

| |
|:---|
| */s/ Douglas McKinnon* |
| **Douglas McKinnon,** |
| Principal Financial Officer |

---

## Exhibit 32.1

**Exhibit 32.1**

**TRON INC.**

**CERTIFICATION PURSUANT TO**

**18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO**

**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

I Richard Miller, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that this Annual Report on Form 10-K for the year ended December 31, 2025, of Tron Inc. fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and the information contained in this Annual Report on Form 10-K fairly presents, in all material respects, the financial condition and results of operations of the Tron Inc.

Date: March 25, 2026

---

| |
|:---|
| */s/ Richard Miller* |
| Richard Miller |
| Chief Executive Officer |

---

## Exhibit 32.2

**Exhibit 32.2**

**TRON INC.**

**CERTIFICATIONS PURSUANT TO**

**18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO**

**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

I, Douglas McKinnon, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that this Annual Report on Form 10-K for the fiscal year ended December 31, 2025, of Tron Inc., fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Annual Report on Form 10-K fairly presents, in all material respects, the financial condition and results of operations of Tron Inc.

Date: March 25, 2026

---

| | |
|:---|:---|
| By: | */s/ Douglas McKinnon* |
| Douglas McKinnon | Douglas McKinnon |
| Chief Financial Officer and Principal Accounting Officer | Chief Financial Officer and Principal Accounting Officer |

---