SMC Announces Exchange of $516,004 of Debt to Preferred Equity

Rhea-AI Summary

SMC Entertainment, Inc. (OTC: SMCE) has announced the exchange of $516,004 of debt in convertible promissory notes for 55,000 Series D Preferred Shares. This transaction will be reflected in the company's Q3 2024 financial statements. The preferred shares can be converted to common stock after two years at a price of either $0.005 or 65% of the average closing price in the preceding 90 trading sessions, whichever is lower.

Since June 14, 2024, SMC has retired or exchanged a total of $1,395,763 of debt and cancelled 250,000,000 common shares since June 7, 2024. CEO Erik Blum stated that this exchange demonstrates investor commitment and provides an opportunity to enhance the company's balance sheet. He also mentioned that management is working to reduce long-term debt, minimize shareholder dilution, and increase shareholder value.

Positive

• Exchange of $516,004 debt to preferred equity, potentially reducing financial burden
• Retirement or exchange of $1,395,763 total debt since June 14, 2024
• Cancellation of 250,000,000 common shares since June 7, 2024, potentially reducing dilution

Negative

• Potential future dilution if preferred shares are converted to common stock
• Conversion price of preferred shares tied to market price, which could lead to more shares issued if stock price declines

BOCA RATON, Fla., July 24, 2024 (GLOBE NEWSWIRE) -- SMC Entertainment, Inc. (“SMC” or the “Company”) (OTC: SMCE), a versatile incubator company focused on acquisition and support of proven commercialized financial services and technology (Fintech) companies, is pleased to announce the exchange of $516,004 of debt in the form of convertible promissory notes (the “Debt”) for Series D Preferred Shares (“Preferred Shares”). The Debt exchanged to Preferred Shares will be reflected in the Company’s third-quarter 2024 financial statements.

The Debt is comprised of $516,004 held in two previous convertible notes; $313,323 and $202,681 respectively. The Company shall issue 55,000 Preferred Shares in exchange for the Debt. The Preferred Shares shall convert into the Company’s common stock at a share price of the lesser of $0.005 or 65% of the average closing price in the preceding 90 trading sessions. The conversion of Preferred Shares to common stock is permitted after two years from Preferred Share issuance with a maximum of 4.99% per conversion. All share issuances are restricted in accordance with the Securities and Exchange Commission (“SEC”) Rule 144.

Since June 14, 2024 and including today’s announcement, the Company has retired and/or exchanged a total of $1,395,763 of debt. In addition, the Company has cancelled a total of 250,000,000 common shares since June 7, 2024.

“The Investor’s decision to exchange $516,004 in convertible notes for preferred equity provides the Company with the opportunity to further enhance our balance sheet and demonstrates our Investor’s commitment to the Company,” said Erik Blum, SMC’s CEO. “In light of SMC’s recent announcement to purchase 100% of the assets of ChainTrade Ltd., we believe our stock is extremely undervalued. Additionally, management continues to find ways to reduce SMC’s long-term debt, minimize shareholder dilution and increase shareholder value.”

About SMC: www.smceinc.com
SMC is a versatile holding company focused on acquisition and support of proven commercialized financial services and technology (Fintech) companies. SMC’s multi-discipline growth by acquisition approach is to enhance revenues and shareholder equity.

About Chaintrade: www.chaintrade.ai
Chaintrade LTD is a UK Registered Entity and is affiliated with Red Matter Capital LTD, a registered financial service company, with its subsidiary licensed under a securities trading license granted by the Montenegro Capital Market Authority (CMA) Authorized by the law on capital markets by the government of Montenegro.

Press Release Contact:

Erik Blum,
Chief Executive Officer
SMC Entertainment, Inc.
360-820-5973

Safe Harbor Statement
Some of the statements in this press release may be forward-looking statements or statements of future expectations based on currently available information. Such statements are naturally subject to risks and uncertainties. Factors such as the development of general economic conditions, future market conditions, unusual catastrophic loss events, changes in the capital markets, and other circumstances may cause the actual events or results to be materially different from those anticipated by such statements. The Company does not make any representation or warranty, express or implied, regarding the accuracy, completeness, or updated status of such forward-looking statements or information provided by the third-party. Therefore, in no case whatsoever will the Company and its affiliate companies be liable to anyone for any decision made or action taken in conjunction with the information and/or statements in this press release or any related damages.

FAQ

How much debt did SMC Entertainment (SMCE) exchange for preferred shares on July 24, 2024?

SMC Entertainment (SMCE) exchanged $516,004 of debt in the form of convertible promissory notes for Series D Preferred Shares on July 24, 2024.

How many Series D Preferred Shares did SMCE issue in exchange for the debt?

SMCE issued 55,000 Series D Preferred Shares in exchange for the $516,004 debt.

When can the Series D Preferred Shares be converted to common stock for SMCE?

The Series D Preferred Shares can be converted to common stock after two years from their issuance date.

What is the conversion price for SMCE's Series D Preferred Shares to common stock?

The conversion price is the lesser of $0.005 or 65% of the average closing price in the preceding 90 trading sessions.

How much total debt has SMCE retired or exchanged since June 14, 2024?

SMCE has retired or exchanged a total of $1,395,763 of debt since June 14, 2024.