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What changed in Stran & Company, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Stran & Company, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+247 added−302 removedSource: 10-K (2026-03-25) vs 10-K (2025-04-14)

Top changes in Stran & Company, Inc.'s 2025 10-K

247 paragraphs added · 302 removed · 200 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

77 edited+13 added−16 removed144 unchanged
Biggest changeAdditionally, we benefited from the acquisition of the assets of T R Miller Co., Inc., a Massachusetts corporation ( “ T R Miller ”) , in June 2023, and from the acquisition of substantially all of the assets (the “ Gander Group Assets ” ) of Bangarang Enterprises, LLC, a California limited liability company (d/b/a Gander Group) (“Gander Group”), in August 2024 .
Biggest changeAdditionally, we benefited from the acquisition of substantially all of the assets (the “Gander Group Assets”) of Bangarang Enterprises, LLC, a California limited liability company (d/b/a Gander Group) (“Gander Group”), in August 2024. 1 Our headquarters are located at Quincy, Massachusetts, with additional offices located in Warsaw, Indiana; Mt. Pleasant, South Carolina; Walpole, Massachusetts; Tomball, TX; and Irvine, California.
We have also invested in an internal commercial Enterprise Resource Planning (ERP) system, Oracle/NetSuite’s NetSuite ERP, which is expected to enhance the process of gathering and organizing the business data of our Company through an integrated software suite, and was launched in the first half of 2025.
We have also invested in an internal commercial Enterprise Resource Planning (ERP) system, Oracle/NetSuite’s NetSuite ERP, which is expected to enhance the process of gathering and organizing the business data of our Company through an integrated software suite, and was launched in the first half of 2025.
The VCDPA went into effect on January 1, 2023. ● The Colorado Privacy Act (the “CPA”) and Connecticut’s An Act Concerning Personal Data Privacy and Online Monitoring (“CDPA”) , effective as of July 1, 2023, are similar comprehensive consumer privacy laws in Colorado and Connecticut, respectively. ● Effective as of December 31, 2023 , the Utah Consumer Privacy Act (“UCPA”) regulates business handling of consumers’ personal data in Utah. ● Effective as of July 1, 2024, the Texas Data Privacy and Security Act (“TDPSA”) and the Oregon Consumer Privacy Act (“OCPA”) became comprehensive privacy laws in Texas and Oregon, respectively. ● Effective as of October 1, 2024, the Montana Consumer Data Privacy Act (“MCDPA”) became a comprehensive privacy law in Montana . ● Effective as of January 1, 2025, the Iowa Consumer Privacy Act (“ICPA”), the Delaware Personal Data Privacy Act (“DPDPA”), the Nebraska Data Privacy Act (“NEDPA”), the New Hampshire Data Privacy Act (“NHDPA”), became comprehensive privacy laws in Iowa, Delaware, Nebraska, and New Hampshire , respectively. ● Effective as of January 15, 2025, the New Jersey Data Protection Act (“NJDPA”) became a comprehensive privacy law in New Jersey. ● Effective as of July 1, 2025, the Minnesota Consumer Data Privacy Act (“MCDPA”) and the Tennessee Information Protection Act (“TIPA”) will become comprehensive privacy laws in Minnesota and Tennessee, respectively. ● Effective as of October 1, 2025, the Maryland Online Data Privacy Act of 2024 (“MODPA”) will become a comprehensive privacy law in Maryland. ● Effective as of January 1, 2026, the Indiana Consumer Data Protection Act (“ICDPA”), the Kentucky Consumer Data Protection Act (“KCDPA”), and the Rhode Island Data Transparency and Privacy Protection Act (“RIDTPPA”) will become comprehensive privacy laws in Indiana, Kentucky, and Rhode Island, respectively.
The VCDPA went into effect on January 1, 2023. ● The Colorado Privacy Act (the “CPA”) and Connecticut’s An Act Concerning Personal Data Privacy and Online Monitoring (“CDPA”), effective as of July 1, 2023, are similar comprehensive consumer privacy laws in Colorado and Connecticut, respectively. ● Effective as of December 31, 2023, the Utah Consumer Privacy Act (“UCPA”) regulates business handling of consumers’ personal data in Utah. ● Effective as of July 1, 2024, the Texas Data Privacy and Security Act (“TDPSA”) and the Oregon Consumer Privacy Act (“OCPA”) became comprehensive privacy laws in Texas and Oregon, respectively. ● Effective as of October 1, 2024, the Montana Consumer Data Privacy Act (“MCDPA”) became a comprehensive privacy law in Montana. ● Effective as of January 1, 2025, the Iowa Consumer Privacy Act (“ICPA”), the Delaware Personal Data Privacy Act (“DPDPA”), the Nebraska Data Privacy Act (“NEDPA”), the New Hampshire Data Privacy Act (“NHDPA”), became comprehensive privacy laws in Iowa, Delaware, Nebraska, and New Hampshire, respectively. ● Effective as of January 15, 2025, the New Jersey Data Protection Act (“NJDPA”) became a comprehensive privacy law in New Jersey. ● Effective as of July 1, 2025, the Minnesota Consumer Data Privacy Act (“MCDPA”) and the Tennessee Information Protection Act (“TIPA”) will become comprehensive privacy laws in Minnesota and Tennessee, respectively. 15 ● Effective as of October 1, 2025, the Maryland Online Data Privacy Act of 2024 (“MODPA”) will become a comprehensive privacy law in Maryland. ● Effective as of January 1, 2026, the Indiana Consumer Data Protection Act (“ICDPA”), the Kentucky Consumer Data Protection Act (“KCDPA”), and the Rhode Island Data Transparency and Privacy Protection Act (“RIDTPPA”) will become comprehensive privacy laws in Indiana, Kentucky, and Rhode Island, respectively.
We are both program managers and creative marketers, having developed multiple teams within our organization to specialize and focus our efforts on supporting customers with the specific support that they need: ● Operations and e-commerce teams create custom-tailored technology solutions that enable our clients to view, manage and distribute branded merchandise to their appropriate audience in an efficient and cost-effective manner. ● Account teams work with client stakeholders to understand goals, objectives, marketing and human-resources initiatives, and the ongoing management of the account. ● In-house creative agency and product merchandising teams support the account team to provide unique and custom product ideas along with additional design services such as billboards, annual reports, and digital ad assets. ● Merchandising team as well as members of our account teams attend trade shows domestically and internationally across a variety of markets, allowing us to provide a diverse assortment of product offerings to our clients. ● Technology and program teams offer technology solutions to help efficiently manage the order process, view products and inventory available, distribute products in the most cost-effective manner, and provide reports and metrics on the activity of the account.
We are both program managers and creative marketers, having developed multiple teams within our organization to specialize and focus our efforts on supporting customers with the specific support that they need: ● Operations and e-commerce teams create custom-tailored technology solutions that enable our clients to view, manage and distribute branded merchandise to their appropriate audience in an efficient and cost-effective manner. 6 ● Account teams work with client stakeholders to understand goals, objectives, marketing and human-resources initiatives, and the ongoing management of the account. ● In-house creative agency and product merchandising teams support the account team to provide unique and custom product ideas along with additional design services such as billboards, annual reports, and digital ad assets. ● Merchandising team as well as members of our account teams attend trade shows domestically and internationally across a variety of markets, allowing us to provide a diverse assortment of product offerings to our clients. ● Technology and program teams offer technology solutions to help efficiently manage the order process, view products and inventory available, distribute products in the most cost-effective manner, and provide reports and metrics on the activity of the account.
For inventoried products, we typically do not make the products live on the website until they have been received into inventory and are ready to be fulfilled. If there is an issue with an online store, we have dedicated account-specific customer service teams who support all aspects of order fulfillment that the user can contact to help resolve.
For inventoried products, we typically do not make the products live on the website until they have been received into inventory and are ready to be fulfilled. 10 If there is an issue with an online store, we have dedicated account-specific customer service teams who support all aspects of order fulfillment that the user can contact to help resolve.
We also use customer feedback surveys periodically to gain insight from the power users of the customer’ program and we have a formal corrective action process to address any issues that are not caught through our proactive efforts. 12 ● Integration . Offering our clients an industry-leading technology platform that stands alone only adds so much value.
We also use customer feedback surveys periodically to gain insight from the power users of the customer’ program and we have a formal corrective action process to address any issues that are not caught through our proactive efforts. ● Integration . Offering our clients an industry-leading technology platform that stands alone only adds so much value.
Unlike our company, which provides comprehensive solutions to complex promotional and branding challenges, we view most of our competitors as generally falling into one of the five categories below: ● Online e-tailer. Heavily rely on marketing and online advertising to sell directly to businesses, offering little or no strategic support or program infrastructure. 2 ● Franchise Model.
Unlike our company, which provides comprehensive solutions to complex promotional and branding challenges, we view most of our competitors as generally falling into one of the five categories below: ● Online e-tailer. Heavily rely on marketing and online advertising to sell directly to businesses, offering little or no strategic support or program infrastructure. ● Franchise Model.
We will ship out all assets with return labels for post-show logistics and establish standard operating procedures for every asset to be returned back into inventory. 5 Other strategies that we plan to implement to expand our customer base with expanded sales staff and technology resources include: ○ Convert Transactional Customers to Programs .
We will ship out all assets with return labels for post-show logistics and establish standard operating procedures for every asset to be returned back into inventory. Other strategies that we plan to implement to expand our customer base with expanded sales staff and technology resources include: ○ Convert Transactional Customers to Programs .
Consists of many smaller firms or independent representatives without a consistent strategic vision. They do not offer consistent pricing and have fragmented service capabilities. ● Large and Inflexible. Focus on large enterprise customers, struggling to serve the needs of smaller spend opportunities (less than $3 million annually).
Consists of many smaller firms or independent representatives without a consistent strategic vision. They do not offer consistent pricing and have fragmented service capabilities. 2 ● Large and Inflexible. Focus on large enterprise customers, struggling to serve the needs of smaller spend opportunities (less than $3 million annually).
As a result of this stock split, our issued and outstanding common stock increased from 100 shares to 10,000,000 shares, all of which were then held by Andrew Stranberg, our Executive Chairman, Treasurer, Secretary, and director. Following our reincorporation in Nevada, on May 24, 2021, Mr.
As a result of this stock split, our issued and outstanding common stock increased from 100 shares to 10,000,000 shares, all of which were then held by Andrew Stranberg, our Executive Chairman, Treasurer, Secretary, and director. 17 Following our reincorporation in Nevada, on May 24, 2021, Mr.
For prospects that demonstrate readiness to buy and reach the bottom of the sales funnel, we use tools such as sales presentations, sales proposals, and sell sheets. Our efforts in in-person marketing include expanding the number of tradeshows and conferences that we attend and sponsor across different industry verticals.
For prospects that demonstrate readiness to buy and reach the bottom of the sales funnel, we use tools such as sales presentations, sales proposals, and sell sheets. 9 Our efforts in in-person marketing include expanding the number of tradeshows and conferences that we attend and sponsor across different industry verticals.
We believe our market position and scale enhances our ability to increase sales to existing customers, attract new customers and enter into new markets. ● Extensive Network . We have developed a deep network of collaborator factories, decorators, printers, and warehouses around the globe.
We believe our market position and scale enhances our ability to increase sales to existing customers, attract new customers and enter into new markets. 3 ● Extensive Network . We have developed a deep network of collaborator factories, decorators, printers, and warehouses around the globe.
Shape and Birney may sell the shares subject to the security interest at prevailing market prices so long as such portion of the sale proceeds as is required under the promissory note to repay the note is so used to repay the note. 17 On May 24, 2021, Mr.
Shape and Birney may sell the shares subject to the security interest at prevailing market prices so long as such portion of the sale proceeds as is required under the promissory note to repay the note is so used to repay the note. On May 24, 2021, Mr.
On May 24, 2021, we changed our state of incorporation to the State of Nevada by merging into Stran & Company, Inc., a Nevada corporation that was incorporated on May 19, 2021, and changed the spelling of our name to “Stran & Company, Inc.” In addition, on May 24, 2021 , o ur authorized capital stock changed from 200,000 shares of common stock, $0.01 par value, to 350,000,000 shares, consisting of 300,000,000 shares of Common Stock, $0.0001 par value per share (“common stock”), and 50,000,000 shares of Preferred Stock, $0.0001 par value per share (“preferred stock”).
On May 24, 2021, we changed our state of incorporation to the State of Nevada by merging into Stran & Company, Inc., a Nevada corporation that was incorporated on May 19, 2021, and changed the spelling of our name to “Stran & Company, Inc.” In addition, on May 24, 2021, our authorized capital stock changed from 200,000 shares of common stock, $0.01 par value, to 350,000,000 shares, consisting of 300,000,000 shares of Common Stock, $0.0001 par value per share (“common stock”), and 50,000,000 shares of Preferred Stock, $0.0001 par value per share (“preferred stock”).
See “ Competitive Strengths – Asset Acquisition Experience ”. We believe that this strategy and experience will help us to pursue suitable acquisition opportunities in the future and integrate them successfully.
See “ Competitive Strengths – Asset Acquisition Experience ”. 4 We believe that this strategy and experience will help us to pursue suitable acquisition opportunities in the future and integrate them successfully.
Program customers are typically geared towards longer-lasting relationships that help secure recurring revenue well into the future. ○ Strengthen Marketing and Social Media Outreach .
Program customers are typically geared towards longer-lasting relationships that help secure recurring revenue well into the future. 5 ○ Strengthen Marketing and Social Media Outreach .
We will continue to promote and ask for referrals from satisfied customers who often refer us to other potential clients. We continuously seek to build our sales forces through hiring of experienced individuals with established books of business as well as hiring less-experienced individuals that we hope to develop into productive sales representatives.
We will continue to promote and ask for referrals from satisfied customers who often refer us to other potential clients. We continuously seek to build our sales force through hiring of experienced individuals with established books of business as well as hiring less experienced individuals that we hope to develop into productive sales representatives.
By offering print management with our promotional branded merchandise solutions, we help our customers create impactful presentations and mailings through the most efficient processes. Warehouse and Fulfillment We offer a global solution for warehousing and fulfillment through a network of fulfillment providers including a 14-year relationship with industry leader Harte Hanks.
By offering print management with our promotional branded merchandise solutions, we help our customers create impactful presentations and mailings through the most efficient processes. Warehouse and Fulfillment We offer a global solution for warehousing and fulfillment through a network of fulfillment providers including a 15-year relationship with industry leader Harte Hanks.
Our expertise in product development and sourcing, technology development, and program management combined with our various collaborators’ superior warehousing, logistics, fulfillment, distribution and print services are a competitive advantage. We offer a global solution for warehousing and fulfillment through a network of fulfillment providers including a 14-year relationship with industry leader Harte Hanks.
Our expertise in product development and sourcing, technology development, and program management combined with our various collaborators’ superior warehousing, logistics, fulfillment, distribution and print services are a competitive advantage. We offer a global solution for warehousing and fulfillment through a network of fulfillment providers including a 15-year relationship with industry leader Harte Hanks.
Intellectual Property We conduct our business using the registered trademark “STRÄN” and “Gander Group” as well as the registered trade name “Stran Promotional Solutions”. We also use the unregistered logo “STRÄN promotional solutions”. To protect our intellectual property, we rely on a combination of laws and regulations, as well as contractual restrictions.
Intellectual Property We conduct our business using the registered trademarks “STRÄN” and “Gander Group” as well as the registered trade name “Stran Promotional Solutions”. We also use the unregistered logo “STRÄN promotional solutions”. To protect our intellectual property, we rely on a combination of laws and regulations, as well as contractual restrictions.
The relationship between Stran and Harte Hanks has been fine-tuned over a 14-year period and allows Stran to do what we do best, which is the creativity, product procurement, technology and account management while allowing Harte Hanks to do what they do best, which is process-driven fulfillment.
The relationship between Stran and Harte Hanks has been fine-tuned over a 15-year period and allows Stran to do what we do best, which is the creativity, product procurement, technology and account management while allowing Harte Hanks to do what they do best, which is process-driven fulfillment.
Should any of these suppliers terminate their relationship with us or fail to provide the agreed-on services, we believe that there would be sufficient alternatives to continue to meet customer demand and comply with our contractual obligations without interruption. 9 Marketing We have a direct sales team consisting of over 53 outside sales representatives and 25 in-house sales representatives.
Should any of these suppliers terminate their relationship with us or fail to provide the agreed-on services, we believe that there would be sufficient alternatives to continue to meet customer demand and comply with our contractual obligations without interruption. Marketing We have a direct sales team consisting of over 50 outside sales representatives and 25 in-house sales representatives.
Consistent with this strategy, we continue to evaluate potential acquisition targets, particularly with the following attributes: ○ Geographic balance, with a focus on acquiring a company in the branded merchandise space based in the southern and western United States (including Florida, Texas, or California) in the $5-10 million revenue range; and ○ Businesses with complimentary offerings to increase Stran’s portfolio of services and depth of expertise in these additional industries: Packaging; Loyalty & Incentive; Decorators (for screen printer, embroidery, direct-to-garment, rub-on transfers, etc.); and Event/Tradeshow Services. ● Innovate and Invest in Technology .
Consistent with this strategy, we continue to evaluate potential acquisition targets, particularly with the following attributes: ○ Geographic balance, with a focus on acquiring a company in the branded merchandise space based in the southern and western United States in the $5-10 million revenue range; and ○ Businesses with complimentary offerings to increase Stran’s portfolio of services and depth of expertise in these additional industries: Packaging; Loyalty & Incentive; Decorators (for screen printer, embroidery, direct-to-garment, rub-on transfers, etc.); and Event/Tradeshow Services. ● Innovate and Invest in Technology .
Facilisgroup, a buying group of fewer than 1% of distributors in the industry, processed over $1.4 billion of sales in 2023. Pursuant to our Sublicense Agreement, we may access Facilisgroup’s @ease proprietary software tools for promotional products business management and analysis and a white labelled, managed, product website which we may use to sell promotional products under our brand.
Facilisgroup, a buying group of fewer than 1% of distributors in the industry, processed over $1.5 billion of sales in 2024. Pursuant to our Sublicense Agreement, we may access Facilisgroup’s @ease proprietary software tools for promotional products business management and analysis and a white labelled, managed, product website which we may use to sell promotional products under our brand.
Emp owering our team to grow their own careers helps ensure that we are more knowledgeable, experienced, and engaged. Pricing As a large and growing firm with over 500 suppliers and due to our membership in Facilisgroup, Stran has the purchasing power to receive advantageous pricing, helping us with price-sensitive bids.
Empowering our team to grow their own careers helps ensure that we are more knowledgeable, experienced, and engaged. 8 Pricing As a large and growing firm with over 500 suppliers and due to our membership in Facilisgroup, Stran has the purchasing power to receive advantageous pricing, helping us with price-sensitive bids.
Our custom-built platform is also tied directly into our fulfilment center system for streamlined flow of data and we are capable to tying our platform into third party software such as Salesforce as well as accounting and procurement software. ● Global Distribution .
Our custom-built platform is also tied directly into our fulfillment center system for streamlined flow of data and we are capable of tying our platform into third party software such as Salesforce as well as accounting and procurement software. ● Global Distribution .
We have ongoing contracts with clientele in such industries as financial services, casino gaming, consumer packaged goods, retail clothing and accessories, pet food and medicine, fitness, child care, retail hardware, fast food franchises, health care, and environmental services. Contracts are often multi-year and auto-renewing. Our average contract lifespan is approximately 10 years.
We have ongoing contracts with clientele in such industries as financial services, casino gaming, consumer packaged goods, retail clothing and accessories, pet food and medicine, fitness, childcare, retail hardware, fast food franchises, healthcare, and environmental services. Contracts are often multi-year and auto-renewing. Our average contract lifespan is approximately 10 years.
We continue to explore and pursue additional acquisition opportunities that are appropriate. Please see “ Growth Strategies – Selectively Pursue Acquisitions ” below for a discussion of our asset acquisition strategy. 4 Growth Strategies The key elements of our strategy to grow our business include: ● Selectively Pursue Acquisitions .
We continue to explore and pursue additional acquisition opportunities that are appropriate. Please see “Growth Strategies – Selectively Pursue Acquisitions” below for a discussion of our asset acquisition strategy. Growth Strategies The key elements of our strategy to grow our business include: ● Selectively Pursue Acquisitions .
Neither we nor any of our predecessors have been in bankruptcy, receivership or any similar proceeding. 18
Neither we nor any of our predecessors have been in bankruptcy, receivership or any similar proceeding. 19
For the Stran & Company, Inc. operating segment, the majority of our revenue is derived from program business, although only a small percentage of our customers are considered programmatic. For the years 2024 and 2023, program clients accounted for 83.3% and 81.4% of total revenue, respectively.
For the Stran & Company, Inc. operating segment, the majority of our revenue is derived from program business, although only a small percentage of our customers are considered programmatic. For the years 2025 and 2024, program clients accounted for 83.0% and 83.3% of total revenue, respectively.
On August 23, 2024, we acquired substantially all of the assets used in the casino continuity and loyalty programs pr oducts and services business of Gander Group. As of March 25, 2025, we had two subsidiaries, Stran Loyalty Solutions and Gander Group Louisiana.
On August 23, 2024, we acquired substantially all of the assets used in the casino continuity and loyalty programs products and services business of Gander Group. As of March 25, 2026, we had two subsidiaries, Stran Loyalty Solutions and Gander Group Louisiana.
We launched our first online store for one of our clients in 1999. Today we offer a custom-built technology platform which offers a B2C (business-to-consumer) retail shopping experience combined with all of the back-end functionality required of a powerful B2B (business-to-business) marketing services platform. Our technology platform services over 280 online stores for our clients.
Today we offer a custom-built technology platform which offers a B2C (business-to-consumer) retail shopping experience combined with all of the back-end functionality required of a powerful B2B (business-to-business) marketing services platform. Our technology platform services over 280 online stores for our clients.
Alternatively, we do have inventory guarantees where the customer must purchase any inventory held by us that has been purchased on their behalf within the contractual time periods. Our active customers may be broken into two main categories, transactional clients and program clients. During 2024, sales to our largest two customers were 8.4% and 6.8% of total revenue, respectively.
Alternatively, we do have inventory guarantees where the customer must purchase any inventory held by us that has been purchased on their behalf within the contractual time periods. Our active customers may be broken into two main categories, transactional clients and program clients. During 2025, sales to our largest two customers were 7.2% and 5.2% of total revenue, respectively.
We have built the tools, processes, relationships and the blueprint to maximize the potential of these products and deliver the most value to our customers. For over 30 years we have grown into a leader in the promotional products industry, ranking 20 th on PPAI’s Top 100 Distributors 2024 list and 27 th on ASI’s Top 40 Distributors 2024 list.
We have built the tools, processes, relationships and the blueprint to maximize the potential of these products and deliver the most value to our customers. For over 30 years we have grown into a leader in the promotional products industry, ranking 12 th on PPAI’s Top 100 Distributors 2025 list and 23 rd on ASI’s Top 40 Distributors 2025 list.
Our principal executive offices are located at 2 Heritage Drive, Suite 600, Quincy, MA 02171 and our telephone number is 800-833-3309. We maintain a website at https://www.stran.com. Information available on our website is not incorporated by reference in and is not deemed a part of this report. Our fiscal year ends on December 31.
Our principal executive offices are located at 500 Victory Road, Suite 301, Quincy, MA 02171 and our telephone number is 800-833-3309. We maintain a website at https://www.stran.com. Information available on our website is not incorporated by reference in and is not deemed a part of this report. Our fiscal year ends on December 31.
We leverage these facilities to offer our customers specialty fulfillment, kitting, and warehousing, allowing us greater control and flexibility to meet the complex demands of our customers.
We leverage this facility to offer our customers specialty fulfillment, kitting, and warehousing, allowing us greater control and flexibility to meet the complex demands of our customers.
As of December 31, 2024, we had total assets of approximately $55.1 million with total stockholders’ equity of $31.6 million. We serve a highly diversified customer base across many industry verticals including pharmaceutical and healthcare, manufacturing, gaming, technology, finance, construction and consumer goods. Many of our customers are household names and include some of the largest corporations in the world.
As of December 31, 2025, we had total assets of approximately $49.3 million with total stockholders’ equity of $30.5 million. We serve a highly diversified customer base across many industry verticals including pharmaceutical and healthcare, manufacturing, gaming, technology, finance, construction and consumer goods. Many of our customers are household names and include some of the largest corporations in the world.
During 2023, sales to our largest two customers were 14.4% and 7.8% of total revenue, respectively. All other customers generated less than 5% of sales, and the vast majority generated less than 1% of sales.
During 2024, sales to our largest two customers were 8.4% and 6.8% of total revenue, respectively. All other customers generated less than 5% of sales, and the vast majority generated less than 1% of sales.
Unauthorized parties may also attempt to gain access to our systems or facilities, or those of third parties with whom we do business, through fraud, trickery, or other forms of deceiving our team members, contractors, and vendors. Employees As of March 25, 2025, we employed 153 full-time employees, 3 part-time employees and 15 independent contractors.
Unauthorized parties may also attempt to gain access to our systems or facilities, or those of third parties with whom we do business, through fraud, trickery, or other forms of deceiving our team members, contractors, and vendors. 13 Employees As of March 13, 2026, we employed 154 full-time employees, 2 part-time employees and 15 independent contractors.
Products and Services Overview Since our inception over 30 years ago, we have provided clients with marketing services that help drive sales, and make an impact using custom-branded merchandise, commercial print, loyalty and incentive programs, packaging and POS solutions while providing a technology solution to deliver these products and services efficiently via our warehouse and fulfillment system. 6 Our value to our customers is to be an extension of their own teams.
Products and Services Overview Since our inception over 30 years ago, we have provided clients with marketing services that help drive sales, and make an impact using custom-branded merchandise, commercial print, loyalty and incentive programs, packaging and POS solutions while providing a technology solution to deliver these products and services efficiently via our warehouse and fulfillment system.
For example, we worked closely with a global producer of vaccines and medicines for animals, to design and implement a two-tier incentive program in which, on one tier, veterinarians were incentivized to purchase from our customer through providing them with promotional branded products, and, on a second tier, a loyalty points program featuring prepaid debit card rewards for end-user pet owners who buy their products. 7 In developing our loyalty and incentive offering, Stran has taken a similar approach as we have in other areas of our business.
For example, we worked closely with a global producer of vaccines and medicines for animals, to design and implement a two-tier incentive program in which, on one tier, veterinarians were incentivized to purchase from our customer through providing them with promotional branded products, and, on a second tier, a loyalty points program featuring prepaid debit card rewards for end-user pet owners who buy their products.
On December 10, 2021, we completed a private placement with several investors, wherein a total of 4,371,926 shares of common stock were issued at a purchase price of $4.97 per share, with each investor also receiving a warrant to purchase up to a number of shares of common stock equal to 125% of the number of shares of common stock purchased by such investor in the private placement, or a total of 5,464,903 shares, at an exercise price of $4.97 per share, for a total purchase price of approximately $21.7 million.
The shares of common stock and publicly-traded warrants were immediately separable and were issued separately, though they were issued and purchased together as a unit in the offering. 18 On December 10, 2021, we completed a private placement with several investors, wherein a total of 4,371,926 shares of common stock were issued at a purchase price of $4.97 per share, with each investor also receiving a warrant to purchase up to a number of shares of common stock equal to 125% of the number of shares of common stock purchased by such investor in the private placement, or a total of 5,464,903 shares, at an exercise price of $4.97 per share, for a total purchase price of approximately $21.7 million.
Moreover, the promotional products market is only one segment of a total addressable market of possibly up to $406 billion, based on the size of the promotional products market ($26.1 billion in 2023 according to ASI); the product packaging market ($185 billion as of 2021, according to Mordor Intelligence, a leading market intelligence and advisory firm); the loyalty incentive programs market ($90 billion annually according to the Incentive Marketing Association, the umbrella organization for suppliers in the incentive marketplace); the printing market ($83 billion projected for 2023, according to IBISWorld, an industry research provider); and the trade show and conference planning market ($22 billion projected for 2023, according to IBISWorld).
Moreover, the promotional products market is only one segment of a total addressable market of possibly up to $410 billion, based on the size of the promotional products market ($27.7 billion in 2025 according to ASI); the product packaging market ($185 billion as of 2021, according to Mordor Intelligence, a leading market intelligence and advisory firm); the loyalty incentive programs market ($90 billion annually according to the Incentive Marketing Association, the umbrella organization for suppliers in the incentive marketplace); the printing market ($86.6 billion projected for 2026, according to IBISWorld, an industry research provider); and the trade show and conference planning market ($24.2 billion projected for 2025, according to IBISWorld).
The secure processing, maintenance and transmission of this information is critical to our operations and business strategy. The number and sophistication of attempted attacks and intrusions that companies have experienced from third parties has increased over the past few years.
The secure processing, maintenance and transmission of this information is critical to our operations and business strategy. The number and sophistication of attempted attacks and intrusions that companies have experienced from third parties has increased over the past few years. Despite our security measures, it is impossible for us to eliminate this risk.
Our sales increased 8.8% year-over-year in 2024 compared to 2023, which we believe was primarily due to higher spending from existing clients as well as business from new customers.
Our sales increased 40.6% year-over-year in 2025 compared to 2024, which was primarily due to higher spending from existing clients as well as business from new customers.
Any increase in the amount of taxation incurred as a result of challenges to our tax filing positions could result in a material adverse effect on our business, results of operations and financial condition. 16 Other Regulations We are subject to international, federal, national, regional, state, local and other laws and regulations affecting our business, including those promulgated under the Occupational Safety and Health Act, the Consumer Product Safety Act, the Flammable Fabrics Act, the Textile Fiber Product Identification Act, the rules and regulations of the Consumer Products Safety Commission, the Food, Drug, and Cosmetic Act, the Foreign Corrupt Practices Act of 1977 (the “FCPA”), various securities laws and regulations including but not limited to the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Securities Act of 1933, as amended (the “Securities Act”), the Listing Rules of The Nasdaq Stock Market LLC (“Nasdaq”), various labor, workplace and related laws, and environmental laws and regulations.
Other Regulations We are subject to international, federal, national, regional, state, local and other laws and regulations affecting our business, including those promulgated under the Occupational Safety and Health Act, the Consumer Product Safety Act, the Flammable Fabrics Act, the Textile Fiber Product Identification Act, the rules and regulations of the Consumer Products Safety Commission, the Food, Drug, and Cosmetic Act, the Foreign Corrupt Practices Act of 1977 (the “FCPA”), various securities laws and regulations including but not limited to the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Securities Act of 1933, as amended (the “Securities Act”), the Listing Rules of The Nasdaq Stock Market LLC (“Nasdaq”), various labor, workplace and related laws, and environmental laws and regulations.
As a group, the top 40 distributors had approximately 37.9% market share as of 2024, based on total sales of approximately $9.9 billion out of total promotional products distributors’ revenues for 2024 of $26.1 billion, based on ASI’s reports.
As a group, the top 40 distributors had approximately 38.5% market share as of 2025, based on total sales of approximately $10.2 billion out of total promotional products distributors’ revenues for 2024 of $26.6 billion, based on ASI’s reports.
In addition, Gander Group is a registered exhibitor at the Indian Gaming Tradeshow and Convention. ○ Extend Relationships . We plan to identify and approach more print, fulfillment, and agency collaborators to sell into their customer base. ○ Referrals . We believe we will generate more customer referrals by offering an enhanced loyalty and customer incentive program.
In addition, Gander Group is a registered exhibitor at the Indian Gaming Tradeshow and Convention. ○ Extend Relationships . We plan to identify and approach more print, fulfillment, and agency collaborators to sell into their customer base.
As of 2024, the firm with the greatest percentage of industry sales generated $1.3 billion in sales but made up only approximately 5.0% of the $26.6 billion in sales generated in 2024 by promotional products distributors, based on information reported by ASI and the firm itself.
As of 2025, the firm with the greatest percentage of industry sales generated $1.4 billion in sales but made up only approximately 4.9% of the $27.7 billion in sales generated in 2025 by promotional products distributors, based on information reported by ASI and the firm itself.
Despite our security measures, it is impossible for us to eliminate this risk. 14 A number of U.S. states have enacted data privacy and security laws and regulations that govern the collection, use, disclosure, transfer, storage, disposal, and protection of personal information, such as social security numbers, financial information and other sensitive personal information.
A number of U.S. states have enacted data privacy and security laws and regulations that govern the collection, use, disclosure, transfer, storage, disposal, and protection of personal information, such as social security numbers, financial information and other sensitive personal information.
If our existing or future competitors seek to gain or retain market share by reducing prices, we may be required to lower our prices, which would adversely affect our operating results.
We also compete with a multitude of foreign, regional and local competitors that vary by market. If our existing or future competitors seek to gain or retain market share by reducing prices, we may be required to lower our prices, which would adversely affect our operating results.
Laws and Regulations Relating to Data Privacy In the ordinary course of our business, we might collect and store in our internal and external data centers, cloud services and networks sensitive data, including our proprietary business information and that of our customers, suppliers and business collaborators, as well as personal information of our customers and employees.
The continued growth and demand for e-commerce is likely to result in more laws and regulations that impose additional compliance burdens on e-commerce companies. 14 Laws and Regulations Relating to Data Privacy In the ordinary course of our business, we might collect and store in our internal and external data centers, cloud services and networks sensitive data, including our proprietary business information and that of our customers, suppliers and business collaborators, as well as personal information of our customers and employees.
Since our first year of operations in 1995, our annual revenues have gradually grown from approximately $240,000 to approximately $82.7 million in 2024, a compound annual growth rate of approximately 22.3%, and between 2018 and 2024, our revenues grew at a compound annual growth rate of approximately 22.8%.
Since our first year of operations in 1995, our annual revenues have gradually grown from approximately $240,000 to approximately $116.2 million in 2025, a compound annual growth rate of approximately 23%, and between 2019 and 2025, our revenues grew at a compound annual growth rate of approximately 25%.
Commercial and Digital Printing Printed informational materials used for marketing, or marketing collateral, such as business cards and brochures, are an essential component to effectively conveying information and marketing messages, and arguably all businesses use some form of marketing collateral.
We produce custom packaging and POS projects domestically as well as overseas for larger-run custom programs for many of our clients. 7 Commercial and Digital Printing Printed informational materials used for marketing, or marketing collateral, such as business cards and brochures, are an essential component to effectively conveying information and marketing messages, and arguably all businesses use some form of marketing collateral.
Competition Our major competitors include companies such as 4Imprint Group plc (LSE: FOUR.L), Brand Addition Limited (The Pebble Group plc) (LSE: PEBB), BAMKO LLC (Superior Group of Companies, Inc.) (Nasdaq: SGC), Staples Promotional Products (Staples, Inc.), Boundless Network, Inc.
Competition Our major competitors include companies such as 4Imprint Group plc (LSE: FOUR.L), Brand Addition Limited (The Pebble Group plc) (LSE: PEBB), BAMKO LLC (Superior Group of Companies, Inc.) (Nasdaq: SGC), Staples Promotional Products (Staples, Inc.), Boundless Network, Inc., Custom Ink, Cimpress plc (Nasdaq: CMPR), HALO Branded Solutions, Inc., Imagine This (Shye West, Inc.), Power Promotions, Inc. and Global Promotional Sourcing, LLC.
Failure to comply with U.S. and international data protection laws and regulations could result in government enforcement actions (which could include substantial civil and/or criminal penalties), private litigation and/or adverse publicity and could negatively affect our operating results and business.
Failure to comply with U.S. and international data protection laws and regulations could result in government enforcement actions (which could include substantial civil and/or criminal penalties), private litigation and/or adverse publicity and could negatively affect our operating results and business. 16 Environmental Regulations We use certain plastic, glass, fabric, metal and other products in our business which may be harmful if released into the environment.
Packaging and Point of Sale Presentation makes all the difference. Clever and custom packaging and POS displays are essentials for elevating brand awareness and critical for driving sales. From packaging of corporate merchandise and promotional products to developing custom POS displays, clients come to us when they want to stand out and show the quality that their brands offer.
From packaging of corporate merchandise and promotional products to developing custom POS displays, clients come to us when they want to stand out and show the quality that their brands offer.
We continue to invest in our technology infrastructure, including many customized solutions developed on Adobe Inc. (“Adobe”)’s open-source e-commerce platform, Magento Open Source.
We have invested in sophisticated, efficient ordering and logistics technology that provides order processing, warehousing and fulfillment functions. We continue to invest in our technology infrastructure, including many customized solutions developed on Adobe Inc. (“Adobe”)’s open-source e-commerce platform, Magento Open Source.
Our on-demand mobile reporting dashboard capabilities allows the ability for self-service access within our systems empowering clients with raw data to make informative decisions for their program. 8 We have also invested in an internal commercial Enterprise Resource Planning (ERP) system, Oracle/NetSuite’s NetSuite ERP, which is expected to enhance the process of gathering and organizing the business data of our company through an integrated software suite, and was launched in the first half of 2025.
We have also invested in an internal commercial Enterprise Resource Planning (ERP) system, Oracle/NetSuite’s NetSuite ERP, which is expected to enhance the process of gathering and organizing the business data of our company through an integrated software suite, and was launched in the first half of 2025.
The industry has generally experienced growth as businesses continuously invest in sophisticated marketing campaigns involving multiple types of advertising. Promotional products are items used to promote a product, service or company program including advertising specialties, premiums, incentives, business gifts, awards, prizes, commemoratives and other imprinted or decorated items. They are usually given away by companies to consumers or employees.
Promotional products are items used to promote a product, service or company program including advertising specialties, premiums, incentives, business gifts, awards, prizes, commemoratives and other imprinted or decorated items. They are usually given away by companies to consumers or employees. The largest promotional products trade organizations are ASI and PPAI. U.S.
However, if we are unable to continue to obtain our finished products from international locations or if our suppliers are unable to source raw materials, it could significantly disrupt our business.
We buy promotional products from suppliers or factories both domestically and internationally as needed. We do not depend on any single supplier. However, if we are unable to continue to obtain our finished products from international locations or if our suppliers are unable to source raw materials, it could significantly disrupt our business.
We do business principally with customers based in the United States, although we also provide e-store, logistical support and other promotional services for client programs in Canada and Europe. 10 Online Store We have been a leader in the use of technology to offer our clients an online platform to more efficiently manage their promotional marketing programs and to give them the ability to sell branded merchandise directly to consumers.
Online Store We have been a leader in the use of technology to offer our clients an online platform to more efficiently manage their promotional marketing programs and to give them the ability to sell branded merchandise directly to consumers. We launched our first online store for one of our clients in 1999.
The publicly-traded warrants were immediately exercisable and will expire on the fifth anniversary of the original issuance date. The units were not certificated. The shares of common stock and publicly-traded warrants were immediately separable and were issued separately, though they were issued and purchased together as a unit in the offering.
The publicly-traded warrants were immediately exercisable and will expire on the fifth anniversary of the original issuance date. The units were not certificated.
We strive to understand the goals and challenges that our customers face, building unique solutions and seeing each campaign through to completion as an extension of their team. ● Diversified Customer Base .
We strive to understand the goals and challenges that our customers face, building unique solutions and seeing each campaign through to completion as an extension of their team. ● Diversified Customer Base . We sell our products to over 2,000 active customers and over 30 Fortune 500 companies, including long-standing programs with recurring revenue coming from well-recognized brands and companies.
GDPR regulations may impose additional responsibility and liability in relation to the personal data that we process, and we may be required to put in place additional mechanisms to ensure compliance with the new data protection rules. 15 Following the withdrawal of the United Kingdom from the EU and the expiry of the transition period, from January 1, 2021, the United Kingdom Data Protection Act 2018 (“UK GDPR”) retains in large part the GDPR in United Kingdom national law.
GDPR regulations may impose additional responsibility and liability in relation to the personal data that we process, and we may be required to put in place additional mechanisms to ensure compliance with the new data protection rules.
We also have sales representatives in 22 additional locations across the United States and a network of service providers in the U.S. and abroad, including factories, decorators, printers, logistics firms, and warehouses. 1 Our Industry Overview of Promotional Products Market The promotional products industry is large yet highly-fragmented, with thousands of smaller participants and indications of a lack of market power in any one firm or group of firms.
We also have sales representatives in 22 additional locations across the United States and a network of service providers in the U.S. and abroad, including factories, decorators, printers, logistics firms, and warehouses.
Each account is assigned a single dedicated account director who is responsible for all aspects of the customer’s program. This account director is supported by an online store account manager, a special-order account manager, a fulfillment account manager, account coordinators, a merchandiser, art team support, operations team support, and accounting support.
This account director is supported by an online store account manager, a special-order account manager, a fulfillment account manager, account coordinators, a merchandiser, art team support, operations team support, and accounting support. The customer’s account director works with program stakeholders on weekly status calls, quarterly business reviews and an annual review.
We are not dependent on any particular customer or group of customers, and our highest-grossing contracts may change from year to year due to client brand initiatives.
We are not dependent on any particular customer or group of customers, and our highest-grossing contracts may change from year to year due to client brand initiatives. We do business principally with customers based in the United States, although we also provide e-store, logistical support and other promotional services for client programs in Canada and Europe.
The largest promotional products trade organizations are the Advertising Specialty Institute (ASI) and Promotional Products Association International (PPAI). U.S. Promotional Products is a Large and Growing Market According to ASI, the market for promotional products sales reached a record high of $26.6 billion in 2024.
Promotional Products is a Large and Growing Market According to ASI, the market for promotional products sales reached a record high of $27.7 billion in 2025.
Our senior management has an average of over 20 years of experience in the promotional products industry. ● Asset Acquisition Experience . We have made six acquisitions over the past five years through asset purchase agreements.
Our senior management team, led by our co-founder and Chief Executive Officer and President, Andrew Shape, is comprised of seasoned industry professionals and veterans of our company. Our senior management has an average of over 20 years of experience in the promotional products industry. ● Asset Acquisition Experience. We have made six business asset acquisitions over the past six years.
We do not believe any of our employees are represented by labor unions, and we believe that we have an excellent relationship with our employees. 13 Regulation Trade Regulations As disclosed above, our suppliers generally source or manufacture finished goods in parts of the world that may be affected by the imposition of duties, tariffs or other import regulations by the United States.
Regulation Trade Regulations As disclosed above, our suppliers generally source or manufacture finished goods in parts of the world that may be affected by the imposition of duties, tariffs or other import regulations by the United States. The Company believes that its redundant network of suppliers provide sufficient capacity to mitigate any dependency risks from a single supplier.
Our acquisition of the business and assets of T R Miller provides us with an approximately 25,000-square-foot warehouse, production, and distribution center in Walpole, Massachusetts and our acquisition of Trend Brand Solutions provides us with an approximately 5,000 square-foot warehouse and distribution center in Tomball, Texas.
Our acquisition of the business and assets of T R Miller provides us with an approximately 25,000-square-foot warehouse, production, and distribution center in Walpole, Massachusetts. We leverage this facility to offer our customers specialty fulfillment, kitting, and warehousing, allowing us greater control and flexibility to meet the complex demands of our customers. 12 ● Proactive Customer Services .
To achieve this value, we have built the internal resources, knowledge, and processes to support our clients with more than just commodity items.
This model of outsourced combined marketing and program-management services is unique in the promotional products industry, which is dominated by online e-tailers, franchisees, and mom-and-pop businesses. To achieve this value, we have built the internal resources, knowledge, and processes to support our clients with more than just commodity items.
Instead of developing our own internal solutions organically, we have sought out relationships with businesses with a variety of offerings that meet the very different needs of each of our customers. By using a collection of third-party providers, we are able to offer a more robust technology solution that meets the constantly evolving and changing needs of our incentive users.
In developing our loyalty and incentive offering, Stran has taken a similar approach as we have in other areas of our business. Instead of developing our own internal solutions organically, we have sought out relationships with businesses with a variety of offerings that meet the very different needs of each of our customers.
We work to understand the different business and marketing goals of each customer and provide solutions that incorporate technology, human capital, and physical branded goods to solve their business challenges. This model of outsourced combined marketing and program-management services is unique in the promotional products industry, which is dominated by online e-tailers, franchisees, and mom-and-pop businesses.
Our value to our customers is to be an extension of their own teams. We work to understand the different business and marketing goals of each customer and provide solutions that incorporate technology, human capital, and physical branded goods to solve their business challenges.
Further, we could be subject to fines or other payments for any past failures to comply with these requirements. The continued growth and demand for e-commerce is likely to result in more laws and regulations that impose additional compliance burdens on e-commerce companies.
Further, we could be subject to fines or other payments for any past failures to comply with these requirements.
In addition to continuing to use our third-party logistics partners like Harte Hanks, we are expanding our in-house warehouse, decoration, and fulfillment capabilities.
In addition to continuing to use our third-party logistics partners like Harte Hanks, we have expanded our in-house warehouse, decoration, and fulfillment capabilities. Our acquisition of the business and assets of T R Miller Co., Inc., a Massachusetts corporation (“T R Miller”), provides us with an approximately 25,000-square-foot warehouse, production, and distribution center in Walpole, Massachusetts.
Removed
Our headquarters are located at Quincy, Massachusetts, with additional offices located in Warsaw, Indiana; Mt. Pleasant, South Carolina; Walpole, Massachusetts; Tomball, Texas; and Irvine, California.
Added
Our Industry Overview of Promotional Products Market The promotional products industry is large yet highly-fragmented, with thousands of smaller participants and indications of a lack of market power in any one firm or group of firms. The industry has generally experienced growth as businesses continuously invest in sophisticated marketing campaigns involving multiple types of advertising.
Removed
In 2018, PPAI reported that promotional products are the most impactful form of advertising across all generations. Whereas reportedly less than 55% of consumers read or watch an entire advertisement online, in an email, on television, in the mail, in a magazine, or on the radio, over 80% of consumers retain promotional products.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIf our customers or stockholders were to require us to use vendors that source, manufacture, or supply their products in accordance with certain sustainability standards, we expect that such standards would likewise force us to incur additional costs and we may fail to pass such additional costs on to our customers, which could also have a material adverse effect on our business. 27 On March 6, 2024, the SEC adopted rules that will require us to disclose: ● Climate-related risks that have had or are reasonably likely to have a material impact on our business strategy, results of operations, or financial condition; ● The actual and potential material impacts of any identified climate-related risks on our strategy, business model, and outlook; ● If, as part of our strategy, we have undertaken activities to mitigate or adapt to a material climate-related risk, a quantitative and qualitative description of material expenditures incurred and material impacts on financial estimates and assumptions that directly result from such mitigation or adaptation activities; ● Specified disclosures regarding our activities, if any, to mitigate or adapt to a material climate-related risk including the use, if any, of transition plans, scenario analysis, or internal carbon prices; ● Any oversight by our board of directors of climate-related risks and any role by management in assessing and managing our material climate-related risks; ● Any processes we have for identifying, assessing, and managing material climate-related risks and, if we are managing those risks, whether and how any such processes are integrated into our overall risk management system or processes; ● Information about our climate-related targets or goals, if any, that have materially affected or are reasonably likely to materially affect our business, results of operations, or financial condition; required disclosures would include material expenditures and material impacts on financial estimates and assumptions as a direct result of the target or goal or actions taken to make progress toward meeting such target or goal; ● The capitalized costs, expenditures expensed, charges, and losses incurred as a result of severe weather events and other natural conditions, such as hurricanes, tornadoes, flooding, drought, wildfires, extreme temperatures, and sea level rise, subject to applicable one percent and de minimis disclosure thresholds, disclosed in a note to the financial statements; ● The capitalized costs, expenditures expensed, and losses related to carbon offsets and renewable energy credits or certificates if used as a material component of our plans to achieve our disclosed climate-related targets or goals, disclosed in a note to our financial statements; and ● If the estimates and assumptions we use to produce our financial statements were materially impacted by risks and uncertainties associated with severe weather events and other natural conditions or any disclosed climate-related targets or transition plans, a qualitative description of how the development of such estimates and assumptions was impacted, disclosed in a note to our financial statements.
Biggest changeOn March 6, 2024, the SEC adopted rules that will require us to disclose: ● Climate-related risks that have had or are reasonably likely to have a material impact on our business strategy, results of operations, or financial condition; ● The actual and potential material impacts of any identified climate-related risks on our strategy, business model, and outlook; ● If, as part of our strategy, we have undertaken activities to mitigate or adapt to a material climate-related risk, a quantitative and qualitative description of material expenditures incurred and material impacts on financial estimates and assumptions that directly result from such mitigation or adaptation activities; ● Specified disclosures regarding our activities, if any, to mitigate or adapt to a material climate-related risk including the use, if any, of transition plans, scenario analysis, or internal carbon prices; ● Any oversight by our board of directors of climate-related risks and any role by management in assessing and managing our material climate-related risks; ● Any processes we have for identifying, assessing, and managing material climate-related risks and, if we are managing those risks, whether and how any such processes are integrated into our overall risk management system or processes; ● Information about our climate-related targets or goals, if any, that have materially affected or are reasonably likely to materially affect our business, results of operations, or financial condition; required disclosures would include material expenditures and material impacts on financial estimates and assumptions as a direct result of the target or goal or actions taken to make progress toward meeting such target or goal; ● The capitalized costs, expenditures expensed, charges, and losses incurred as a result of severe weather events and other natural conditions, such as hurricanes, tornadoes, flooding, drought, wildfires, extreme temperatures, and sea level rise, subject to applicable one percent and de minimis disclosure thresholds, disclosed in a note to the financial statements; ● The capitalized costs, expenditures expensed, and losses related to carbon offsets and renewable energy credits or certificates if used as a material component of our plans to achieve our disclosed climate-related targets or goals, disclosed in a note to our financial statements; and ● If the estimates and assumptions we use to produce our financial statements were materially impacted by risks and uncertainties associated with severe weather events and other natural conditions or any disclosed climate-related targets or transition plans, a qualitative description of how the development of such estimates and assumptions was impacted, disclosed in a note to our financial statements. 29 We will be exempt from the SEC rules’ requirements to disclose certain information about our greenhouse gas emissions and comply with related auditor assurance requirements as long as we remain a “smaller reporting company” (as described below under — Risks Related to our Common Stock and Publicly-Traded Warrants – We are a ‘smaller reporting company’ within the meaning of the Exchange Act, and if we take advantage of certain exemptions from disclosure requirements available to smaller reporting companies, this could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies. ”) or an “emerging growth company” (as described below under “— Risks Related to our Common Stock and Publicly-Traded Warrants – We are subject to ongoing public reporting requirements that are less rigorous than Exchange Act rules for companies that are not emerging growth companies and our stockholders could receive less information than they might expect to receive from more mature public companies. ”).
See also above, “— We are subject to ongoing public reporting requirements that are less rigorous than Exchange Act rules for companies that are not emerging growth companies and our stockholders could receive less information than they might expect to receive from more mature public companies. ” We are a “smaller reporting company” within the meaning of the Exchange Act, and if we take advantage of certain exemptions from disclosure requirements available to smaller reporting companies, this could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies.
See also above, “— We are subject to ongoing public reporting requirements that are less rigorous than Exchange Act rules for companies that are not emerging growth companies and our stockholders could receive less information than they might expect to receive from more mature public companies. ” 38 We are a “smaller reporting company” within the meaning of the Exchange Act, and if we take advantage of certain exemptions from disclosure requirements available to smaller reporting companies, this could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies.
Effective January 1, 2023, we also became subject to the CPRA in California, which expands upon the consumer data use restrictions, penalties and enforcement provisions under the CCPA, and the VCDPA in Virginia, another comprehensive data privacy law, and regulations promulgated under the CPRA and the VCDPA. 22 In addition, similar consumer data privacy laws have been passed and either are in effect or will become effective within the next 12 months in many other states, including Colorado (CPA, effective July 1, 2023); Connecticut (CDPA, effective July 1, 2023); Utah (UCPA, effective December 31, 2023); Texas (TDPSA, effective July 1, 2024); Oregon (OCPA, effective July 1, 2024); Montana (MCDPA, effective October 1, 2024); Iowa (ICPA, effective January 1, 2025); Delaware (DPDPA, effective January 1, 2025); Nebraska (NEDPA, effective January 1, 2025); New Hampshire (NHDPA, effective January 1, 2025); New Jersey (NJDPA, effective January 15, 2025); Minnesota (MCDPA, effective July 1, 2025); Tennessee (TIPA, effective July 1, 2025); Maryland (MODPA, effective October 1, 2025); Indiana (ICDPA, effective January 1, 2026); Kentucky (KCDPA, effective January 1, 2026); and Rhode Island (RIDTPPA, effective January 1, 2026).
Effective January 1, 2023, we also became subject to the CPRA in California, which expands upon the consumer data use restrictions, penalties and enforcement provisions under the CCPA, and the VCDPA in Virginia, another comprehensive data privacy law, and regulations promulgated under the CPRA and the VCDPA. 23 In addition, similar consumer data privacy laws have been passed and either are in effect or will become effective within the next 12 months in many other states, including Colorado (CPA, effective July 1, 2023); Connecticut (CDPA, effective July 1, 2023); Utah (UCPA, effective December 31, 2023); Texas (TDPSA, effective July 1, 2024); Oregon (OCPA, effective July 1, 2024); Montana (MCDPA, effective October 1, 2024); Iowa (ICPA, effective January 1, 2025); Delaware (DPDPA, effective January 1, 2025); Nebraska (NEDPA, effective January 1, 2025); New Hampshire (NHDPA, effective January 1, 2025); New Jersey (NJDPA, effective January 15, 2025); Minnesota (MCDPA, effective July 1, 2025); Tennessee (TIPA, effective July 1, 2025); Maryland (MODPA, effective October 1, 2025); Indiana (ICDPA, effective January 1, 2026); Kentucky (KCDPA, effective January 1, 2026); and Rhode Island (RIDTPPA, effective January 1, 2026).
We cannot predict if investors will find our securities less attractive if we elect to rely on these exemptions, or if taking advantage of these exemptions would result in less active trading or more volatility in the price of our securities. 36 As a non-accelerated filer, we are not required to comply with the auditor attestation requirements of the Sarbanes-Oxley Act.
We cannot predict if investors will find our securities less attractive if we elect to rely on these exemptions, or if taking advantage of these exemptions would result in less active trading or more volatility in the price of our securities. As a non-accelerated filer, we are not required to comply with the auditor attestation requirements of the Sarbanes-Oxley Act.
The delisting of our common stock and publicly-traded warrants could also significantly impair our ability to raise capital and the value of your investment. Our publicly-traded warrants may not have any value. Our publicly-traded warrants are exercisable for five years from the date of initial issuance and currently have an exercise price of $4.81375 per share.
The delisting of our common stock and publicly-traded warrants could also significantly impair our ability to raise capital and the value of your investment. 34 Our publicly-traded warrants may not have any value. Our publicly-traded warrants are exercisable for five years from the date of initial issuance and currently have an exercise price of $4.81375 per share.
Consequently, if we were to avail ourselves of these exemptions, the prices of our securities might suffer, and there is no assurance that we would be able to continue to meet all continuing listing requirements of Nasdaq from which we would not be exempt, including minimum stock price requirements.
Consequently, if we were to avail ourselves of these exemptions, the prices of our securities might suffer, and there is no assurance that we would be able to continue to meet all continuing listing requirements of Nasdaq from which we would not be exempt, including minimum stock price requirements. 39
A significant adverse change in a customer relationship or in a customer’s financial position could cause us to limit or discontinue business with that customer, require us to assume more credit risk relating to that customer’s receivables or limit our ability to collect amounts related to previous purchases by that customer, all of which could have a material adverse effect on our business, results of operations or financial condition. 20 We may be unable to identify or to complete acquisitions or to successfully integrate the businesses we acquire.
A significant adverse change in a customer relationship or in a customer’s financial position could cause us to limit or discontinue business with that customer, require us to assume more credit risk relating to that customer’s receivables or limit our ability to collect amounts related to previous purchases by that customer, all of which could have a material adverse effect on our business, results of operations or financial condition. 21 We may be unable to identify or to complete acquisitions or to successfully integrate the businesses we acquire.
Shipping delays combined with significant increases in orders for our products have recently created, and are expected to continue to create, inventory pressure for us. 19 As a distributor, we buy merchandise both from multiple supply sources and from a network of factories in which we have developed direct relationships around the globe over the past 30 years.
Shipping delays combined with significant increases in orders for our products have recently created, and are expected to continue to create, inventory pressure for us. 20 As a distributor, we buy merchandise both from multiple supply sources and from a network of factories in which we have developed direct relationships around the globe over the past 30 years.
In addition, these disclosure rules will not require compliance by us until our fiscal year beginning in 2027, with certain requirements not becoming effective until our fiscal year beginning in 2028, if we remain a smaller reporting company or emerging growth company. 28 A number of petitions have been filed in federal courts seeking to challenge the SEC’s climate disclosure rules.
In addition, these disclosure rules will not require compliance by us until our fiscal year beginning in 2027, with certain requirements not becoming effective until our fiscal year beginning in 2028, if we remain a smaller reporting company or emerging growth company. A number of petitions have been filed in federal courts seeking to challenge the SEC’s climate-related disclosure rules.
Any increase in the amount of taxation incurred as a result of challenges to our tax filing positions could result in a material adverse effect on our business, results of operations and financial condition. 31 Risks Related to our Common Stock and Publicly-Traded Warrants The market prices of our securities may fluctuate, and you could lose all or part of your investment.
Any increase in the amount of taxation incurred as a result of challenges to our tax filing positions could result in a material adverse effect on our business, results of operations and financial condition. 32 Risks Related to our Common Stock and Publicly-Traded Warrants The market prices of our securities may fluctuate, and you could lose all or part of your investment.
The Staff Determination had no immediate effect and did not immediately result in the suspension of trading or delisting of the Company’s common stock. 32 The Staff Determination notified the Company that the Company was permitted to request a hearing before a Nasdaq Hearings Panel by December 24, 2024, pursuant to the procedures set forth in the Nasdaq Listing Rule 5800 Series.
The Staff Determination had no immediate effect and did not immediately result in the suspension of trading or delisting of the Company’s common stock. 33 The Staff Determination notified the Company that the Company was permitted to request a hearing before a Nasdaq Hearings Panel by December 24, 2024, pursuant to the procedures set forth in the Nasdaq Listing Rule 5800 Series.
Further, in the event a court finds the exclusive forum provision contained in our warrant certificates to be unenforceable or inapplicable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our results of operations. 34 We do not expect to declare or pay dividends in the foreseeable future.
Further, in the event a court finds the exclusive forum provision contained in our warrant certificates to be unenforceable or inapplicable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our results of operations. 35 We do not expect to declare or pay dividends in the foreseeable future.
This potential dependency could threaten the sustainability of our growth and have a material adverse effect on our financial condition or results of operations if we are unable to retain such major contracts or replace them with similarly major contracts on a regular basis. 24 Our business incurs significant freight and transportation costs.
This potential dependency could threaten the sustainability of our growth and have a material adverse effect on our financial condition or results of operations if we are unable to retain such major contracts or replace them with similarly major contracts on a regular basis. 25 Our business incurs significant freight and transportation costs.
During the years ended December 31, 2024 and 2023, many promotional products companies saw increases in the cost of finished goods and raw materials purchased, as well as in the average cost of finished goods and raw materials purchased, as compared to the prior year, driven by rising inflation rates and shipping costs.
During the years ended December 31, 2025 and 2024, many promotional products companies saw increases in the cost of finished goods and raw materials purchased, as well as in the average cost of finished goods and raw materials purchased, as compared to the prior year, driven by rising inflation rates and shipping costs.
Failure to comply with such laws and regulations may expose us to potential liability and have an adverse effect on our results of operations. 23 Implementation of technology initiatives could disrupt our operations in the near term and fail to provide the anticipated benefits.
Failure to comply with such laws and regulations may expose us to potential liability and have an adverse effect on our results of operations. 24 Implementation of technology initiatives could disrupt our operations in the near term and fail to provide the anticipated benefits.
The GDPR imposes, among other things, data protection requirements that include strict obligations and restrictions on the ability to collect, analyze and transfer EU personal data/information, a requirement for prompt notice of data breaches to data subjects and supervisory authorities in certain circumstances, and possible substantial fines for any violations (including possible fines for certain violations of up to the greater of 20 million Euros or 4% of total company revenue).
The GDPR imposes, among other things, data protection requirements that include strict obligations and restrictions on the ability to collect, analyze and transfer EU personal data/information, a requirement for prompt notice of data breaches to data subjects and supervisory authorities in certain circumstances, and possible substantial fines for any violations (including possible fines for certain violations of up to the greater of €20 million/£17.5 million or 4% of total company revenue).
Compromising and/or loss of information could result in loss of sales or legal or regulatory claims which could adversely affect our revenues and profits or damage our reputation. 21 We rely on software and services from other parties.
Compromising and/or loss of information could result in loss of sales or legal or regulatory claims which could adversely affect our revenues and profits or damage our reputation. 22 We rely on software and services from other parties.
We are unable to predict the likely duration and severity of any disruption in financial markets and adverse economic conditions and the effects they may have on our business and financial condition. 29 We identified material weaknesses in our internal control over financial reporting as of December 31, 2024.
We are unable to predict the likely duration and severity of any disruption in financial markets and adverse economic conditions and the effects they may have on our business and financial condition. We identified material weaknesses in our internal control over financial reporting as of December 31, 2025.
On April 4, 2024, the SEC issued an order staying the rules. The SEC’s administrative stay will remain in place until the completion of litigation filed in the federal courts that challenges the agency’s authority to adopt the rules. The outcome of this litigation cannot be determined.
The outcome of this litigation cannot be determined as of the date of this report. On April 4, 2024, the SEC issued an order staying the rules. The SEC’s administrative stay will remain in place until the completion of litigation filed in the federal courts that challenges the agency’s authority to adopt the rules.
On February 20, 2025, the Company received a written notification from the Staff notifying the Company that for the last 11 consecutive business days, from February 4, 2025 to February 19, 2025, the closing bid price of the Company’s common stock has been at $1.00 per share or greater. Accordingly, the Company regained compliance with the Bid Price Rule.
On February 20, 2025, the Company received a written notification from the Staff notifying the Company that for the last 11 consecutive business days, from February 4, 2025 to February 19, 2025, the closing bid price of the Company’s common stock has been at $1.00 per share or greater.
Unfavorable changes in the cost of such benefits could impact our financial results and cash flow. Healthcare costs have risen significantly in recent years, and recent legislative and private sector initiatives regarding healthcare reform could result in significant changes to the U.S. healthcare system.
Our expenses relating to employee health benefits are significant. Unfavorable changes in the cost of such benefits could impact our financial results and cash flow. Healthcare costs have risen significantly in recent years, and recent legislative and private sector initiatives regarding healthcare reform could result in significant changes to the U.S. healthcare system.
Until holders of our publicly-traded warrants acquire shares of common stock upon exercise thereof, such holders will have no rights with respect to the shares of common stock underlying the publicly-traded warrants.
Holders of publicly-traded warrants have no rights as stockholders until such holders exercise their publicly-traded warrants and acquire our shares of common stock. Until holders of our publicly-traded warrants acquire shares of common stock upon exercise thereof, such holders will have no rights with respect to the shares of common stock underlying the publicly-traded warrants.
Our success is largely dependent on the skills, experience and efforts of our senior management and other key personnel, including Andrew Shape, our Chief Executive Officer and President, Andrew Stranberg, our Executive Chairman, David Browner, our Chief Financial Officer, Ian Wall, our Chief Information Officer, and John Audibert, our Vice President of Growth and Strategic Initiatives.
Our success is largely dependent on the skills, experience and efforts of our senior management and other key personnel, including Andrew Shape, our Chief Executive Officer and President, Andrew Stranberg, our Executive Chairman, David Browner, our Chief Financial Officer, Ian Wall, our Chief Information Officer, and John Audibert, our Chief Strategy Officer and Chief Compliance Officer.
In the event that the stock price of our shares of common stock does not exceed the exercise price of the publicly-traded warrants during the period when the publicly-traded warrants are held and exercisable, the publicly-traded warrants may not have any value to their holders. 33 Holders of publicly-traded warrants have no rights as stockholders until such holders exercise their publicly-traded warrants and acquire our shares of common stock.
In the event that the stock price of our shares of common stock does not exceed the exercise price of the publicly-traded warrants during the period when the publicly-traded warrants are held and exercisable, the publicly-traded warrants may not have any value to their holders.
For so long as we remain an emerging growth company, we may take advantage of certain exemptions from various reporting requirements that are applicable to other Exchange Act reporting 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; ● being exempt from certain greenhouse gas emissions disclosure and related third-party assurance requirements; ● being permitted to comply with reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements; and ● being exempt from the requirement to hold a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
For so long as we remain an emerging growth company, we may take advantage of certain exemptions from various reporting requirements that are applicable to other Exchange Act reporting 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; ● being exempt from certain greenhouse gas emissions disclosure and related third-party assurance requirements; ● being permitted to comply with reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements; and ● being exempt from the requirement to hold a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. 37 In addition, 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.
Failure to anticipate, identify or promptly react to changing trends or styles may result in decreased demand for our products, as well as excess inventories and markdowns, which could have a material adverse effect on our business, results of operations and financial condition.
Failure to anticipate, identify or promptly react to changing trends or styles may result in decreased demand for our products, as well as excess inventories and markdowns, which could have a material adverse effect on our business, results of operations and financial condition. In addition, if we misjudge consumer preferences, our brand image may be impaired.
Rule 12b-2 of the Exchange Act defines a “smaller reporting company” as an issuer that is not an investment company, an asset-backed issuer, or a majority-owned subsidiary of a parent that is not a smaller reporting company and that: ● had a public float of less than $250 million as of the last business day of its most recently completed second fiscal quarter, computed by multiplying the aggregate worldwide number of shares of its voting and non-voting common equity held by non-affiliates by the price at which the common equity was last sold, or the average of the bid and asked prices of common equity, in the principal market for the common equity; or ● in the case of an initial registration statement under the Securities Act or the Exchange Act for shares of its common equity, had a public float of less than $250 million as of a date within 30 days of the date of the filing of the registration statement, computed by multiplying the aggregate worldwide number of such shares held by non-affiliates before the registration plus, in the case of a Securities Act registration statement, the number of such shares included in the registration statement by the estimated public offering price of the shares; or ● in the case of an issuer whose public float as calculated under paragraph (1) or (2) of this definition was zero or whose public float was less than $700 million, had annual revenues of less than $100 million during the most recently completed fiscal year for which audited financial statements are available. 37 If a company determines that it does not qualify for smaller reporting company status because it exceeded one or more of the above thresholds, it will remain unqualified unless when making its annual determination it meets certain alternative threshold requirements which will be lower than the above thresholds if its prior public float or prior annual revenues exceed certain thresholds.
Rule 12b-2 of the Exchange Act defines a “smaller reporting company” as an issuer that is not an investment company, an asset-backed issuer, or a majority-owned subsidiary of a parent that is not a smaller reporting company and that: ● had a public float of less than $250 million as of the last business day of its most recently completed second fiscal quarter, computed by multiplying the aggregate worldwide number of shares of its voting and non-voting common equity held by non-affiliates by the price at which the common equity was last sold, or the average of the bid and asked prices of common equity, in the principal market for the common equity; or ● in the case of an initial registration statement under the Securities Act or the Exchange Act for shares of its common equity, had a public float of less than $250 million as of a date within 30 days of the date of the filing of the registration statement, computed by multiplying the aggregate worldwide number of such shares held by non-affiliates before the registration plus, in the case of a Securities Act registration statement, the number of such shares included in the registration statement by the estimated public offering price of the shares; or ● in the case of an issuer whose public float as calculated under paragraph (1) or (2) of this definition was zero or whose public float was less than $700 million, had annual revenues of less than $100 million during the most recently completed fiscal year for which audited financial statements are available.
While the Company has various cost control measures in place and employs an outside consultant to review larger claims, employee health benefits have been and are expected to continue to be a significant cost to the Company.
While the Company has various cost control measures in place and employs an outside consultant to review larger claims, employee health benefits have been and are expected to continue to be a significant cost to the Company. Medical costs will continue to be a significant expense to the Company and may increase due to factors outside the Company’s control.
During the fiscal year ended December 31, 2024, our top ten customers accounted for 38.1% of revenues, and our top customer accounted for 8.4% of revenues. During the fiscal year ended December 31, 2023, our top ten customers accounted for 46.1% of revenues, and our top customer accounted for 14.4% of revenues.
During the fiscal year ended December 31, 2025, our top ten customers accounted for 35.7% of revenues, and our top customer accounted for 7.2% of revenues. During the fiscal year ended December 31, 2024, our top ten customers accounted for 38.1% of revenues, and our top customer accounted for 8.4% of revenues.
Some of our vendors have manufacturing operations in areas vulnerable to coastal storms which may increase in magnitude and impact due to climate change. Increasingly large and unprecedented weather events may pose a risk to business operations in vulnerable areas. Storms could cause business interruptions, incur additional restoration costs, and impact product availability and pricing.
Some of our vendors have manufacturing operations in areas vulnerable to coastal storms which may increase in magnitude and impact due to climate change. Increasingly large and unprecedented weather events may pose a risk to business operations in vulnerable areas.
These proceedings may be in jurisdictions with reputations for aggressive application of laws and procedures against corporate defendants. We are impacted by trends in litigation, including class-action allegations brought under various consumer protection and employment laws. Due to the inherent uncertainties of litigation in both domestic and foreign jurisdictions, we cannot accurately predict the ultimate outcome of any such proceedings.
We are impacted by trends in litigation, including class-action allegations brought under various consumer protection and employment laws. Due to the inherent uncertainties of litigation in both domestic and foreign jurisdictions, we cannot accurately predict the ultimate outcome of any such proceedings.
Our marketing strategy is to differentiate ourselves by providing quality service and quality products to our customers. Even if this strategy is successful, the results may be offset by reductions in demand or price declines due to competitors’ pricing strategies or other micro- or macroeconomic factors.
Even if this strategy is successful, the results may be offset by reductions in demand or price declines due to competitors’ pricing strategies or other micro- or macroeconomic factors.
Any preferred stock that we issue in the future may rank ahead of our securities in terms of dividend priority or liquidation premiums and may have greater voting rights than our securities.
Our Articles of Incorporation authorize us to issue up to 50,000,000 shares of blank check preferred stock. Any preferred stock that we issue in the future may rank ahead of our securities in terms of dividend priority or liquidation premiums and may have greater voting rights than our securities.
We are required to publicly report on an ongoing basis as an “emerging growth company” (as defined in the JOBS Act) under the reporting rules set forth under the Exchange Act.
We are required to publicly report on an ongoing basis as an “emerging growth company” (as defined in the Jumpstart Our Business Startups Act of 2012, or the “JOBS Act”) under the reporting rules set forth under the Exchange Act.
If our existing or future competitors seek to gain or retain market share by reducing prices, we may be required to lower our prices, which would adversely affect our operating results .
We also compete with a multitude of foreign, regional and local competitors that vary by market. If our existing or future competitors seek to gain or retain market share by reducing prices, we may be required to lower our prices, which would adversely affect our operating results .
Holders of our securities must bear the risk that any future offerings we conduct or borrowings we make may adversely affect the level of return, if any, they may be able to achieve from an investment in our securities.
Holders of our securities must bear the risk that any future offerings we conduct or borrowings we make may adversely affect the level of return, if any, they may be able to achieve from an investment in our securities. 36 We are authorized to issue “blank check” preferred stock without stockholder approval, which could adversely impact the rights of holders of our securities.
As a result, our business, financial condition, results of operations and prospects, as well as the trading price of our shares, may be adversely affected. Increases in the cost of employee benefits could impact our financial results and cash flow. Our expenses relating to employee health benefits are significant.
Moreover, effective internal control over financial reporting is important to prevent fraud. As a result, our business, financial condition, results of operations and prospects, as well as the trading price of our shares, may be adversely affected. Increases in the cost of employee benefits could impact our financial results and cash flow.
The promotional products, trade show and events marketplace, loyalty and program management business industries are subject to pricing pressures that may cause us to lower the prices we charge for our products and services that adversely affect our financial performance.
Competitive and general economic conditions might limit our ability and that of our competitors to increase prices to cover any increases in our product cost. 27 The promotional products, trade show and events marketplace, loyalty and program management business industries are subject to pricing pressures that may cause us to lower the prices we charge for our products and services that adversely affect our financial performance.
Our major competitors include companies such as 4Imprint Group plc (LSE: FOUR.L), Brand Addition Limited (The Pebble Group plc) (LSE: PEBB), BAMKO LLC (Superior Group of Companies, Inc.) (Nasdaq: SGC), Staples Promotional Products (Staples, Inc.), Boundless Network, Inc.
Our major competitors include companies such as 4Imprint Group plc (LSE: FOUR.L), Brand Addition Limited (The Pebble Group plc) (LSE: PEBB), BAMKO LLC (Superior Group of Companies, Inc.) (Nasdaq: SGC), Staples Promotional Products (Staples, Inc.), Boundless Network, Inc., Custom Ink, Cimpress plc (Nasdaq: CMPR), HALO Branded Solutions, Inc., Imagine This (Shye West, Inc.), Power Promotions, Inc. and Global Promotional Sourcing, LLC.
Our failure to address any control deficiency could result in inaccuracies in our financial statements and could also impair our ability to comply with applicable financial reporting requirements and related regulatory filings on a timely basis. Moreover, effective internal control over financial reporting is important to prevent fraud.
However, the implementation of these measures may not fully address the material weaknesses in our internal control over financial reporting. Our failure to address any control deficiency could result in inaccuracies in our financial statements and could also impair our ability to comply with applicable financial reporting requirements and related regulatory filings on a timely basis.
Similarly, if customers or potential customers perceive the products or services offered by our existing or future competitors to be of higher quality than ours or part of a broader product mix, our revenues may decline, which would adversely affect our operating results. 25 We face intense competition to gain market share, which may lead some competitors to sell substantial amounts of goods at prices against which we cannot profitably compete.
Similarly, if customers or potential customers perceive the products or services offered by our existing or future competitors to be of higher quality than ours or part of a broader product mix, our revenues may decline, which would adversely affect our operating results.
Some of our other locations and those of our suppliers also are exposed to hurricanes, earthquakes, floods and other extreme weather events; the damage that such events could produce could affect the supply of our products and services.
Some of our other locations and those of our suppliers also are exposed to hurricanes, earthquakes, floods and other extreme weather events; the damage that such events could produce could affect the supply of our products and services. 26 We face intense competition within our industry and our revenue and/or profits may decrease if we are not able to respond to this competition effectively.
We cannot assure that third parties will not assert claims against us on any such basis or that we will be able to successfully resolve such claims. In addition, the laws of some foreign countries do not allow us to protect, defend or enforce our intellectual property rights to the same extent as the laws of the United States.
In addition, the laws of some foreign countries do not allow us to protect, defend or enforce our intellectual property rights to the same extent as the laws of the United States.
Increased focus by governments, vendors, stockholders, and customers on sustainability issues, including those related to climate change, may have a material adverse effect on our business and operations. Federal, state and local governments, as well as some of our vendors and customers, are beginning to respond to climate change and other sustainability issues.
Federal, state and local governments, as well as some of our vendors and customers, are beginning to respond to climate change and other sustainability issues.
The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks.
If our securities become subject to the penny stock rules, it would become more difficult to trade our shares. The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks.
In addition, the preferred stock could be utilized, under certain circumstances, as a method of discouraging, delaying or preventing a change in control of our company.
In addition, the preferred stock could be utilized, under certain circumstances, as a method of discouraging, delaying or preventing a change in control of our company. Although we have no present intention to issue any shares of authorized preferred stock, there can be no assurance that we will not do so in the future.
In addition, if we misjudge consumer preferences, our brand image may be impaired. 26 Our success depends upon the continued protection of our intellectual property rights and we may be forced to incur substantial costs to maintain, defend, protect and enforce our intellectual property rights.
Our success depends upon the continued protection of our intellectual property rights and we may be forced to incur substantial costs to maintain, defend, protect and enforce our intellectual property rights. Our owned intellectual property and certain of our licensed intellectual property have significant value and are instrumental to our ability to market our products.
The estimated fair value of these assets is impacted by general economic conditions in the locations in which we operate.
These accounting principles require that we record an impairment charge if circumstances indicate that the asset carrying values exceed their estimated fair values. The estimated fair value of these assets is impacted by general economic conditions in the locations in which we operate.
We may be subject to periodic litigation in both domestic and international jurisdictions that may adversely affect our financial position and results of operations. From time to time we may be involved in legal or regulatory actions regarding product liability, employment practices, intellectual property infringement, bankruptcies and other litigation or enforcement matters.
From time to time we may be involved in legal or regulatory actions regarding product liability, employment practices, intellectual property infringement, bankruptcies and other litigation or enforcement matters. These proceedings may be in jurisdictions with reputations for aggressive application of laws and procedures against corporate defendants.
We face intense competition within our industry and our revenue and/or profits may decrease if we are not able to respond to this competition effectively. Customers in the promotional products, tradeshow and event marketplace, loyalty and program management business process outsourcing industries choose distributors primarily based upon the quality, price and breadth of products and services offered.
Customers in the promotional products, tradeshow and event marketplace, loyalty and program management business process outsourcing industries choose distributors primarily based upon the quality, price and breadth of products and services offered. We encounter competition from a number of companies in the geographic areas we serve. The majority of our revenue is derived from the sale of promotional products.
Even if we have purchased product liability insurance in the future, product liability claims may exceed the amount of our insurance coverage. In addition, our reputation may be adversely affected by such claims, whether or not successful, including potential negative publicity about our products.
Even if we have purchased product liability insurance in the future, product liability claims may exceed the amount of our insurance coverage.
The current Trump administration has implemented additional tariffs, some of which apply to goods imported from China and other countries from which we import goods.
The current Trump administration has implemented additional tariffs, some of which apply to goods imported from China and other countries from which we import goods. While not the primary reason for the increase in our costs during the past year, increased tariff rates contributed to a marginal degree to the increase in our cost of sales.
Our owned intellectual property and certain of our licensed intellectual property have significant value and are instrumental to our ability to market our products. We cannot assure that our owned or licensed intellectual property or the operation of our business does not infringe on or otherwise violate the intellectual property rights of others.
We cannot assure that our owned or licensed intellectual property or the operation of our business does not infringe on or otherwise violate the intellectual property rights of others. We cannot assure that third parties will not assert claims against us on any such basis or that we will be able to successfully resolve such claims.
We assess our goodwill, intangible assets and long-lived assets for impairment when required by generally accepted accounting principles in the United States (“U.S. GAAP”). These accounting principles require that we record an impairment charge if circumstances indicate that the asset carrying values exceed their estimated fair values.
We may recognize impairment charges, which could adversely affect our financial condition and results of operations. We assess our goodwill, intangible assets and long-lived assets for impairment when required by generally accepted accounting principles in the United States (“U.S. GAAP”).
Our management has identified the following material weaknesses in our internal control over financial reporting: ● There was a material weakness in our internal controls related to the proper design and implementation of control over formal review, approval, and evaluation of complex accounting transactions associated with business combinations. ● We identified a material weakness in internal control related to the proper design and implementation of certain controls over management’s formal review process that includes multiple levels of review as well as timely review of accounts and reconciliations leading to material adjustments. ● We identified a material weakness in internal control related to the proper design and implementation of certain controls over income tax provision and management’s review of the income tax provision. ● We did not design and maintain effective controls over financial reporting for accounts receivable and unearned revenue, freight charges, and inventory and cost of sales accounts. ● We did not design and maintain effective controls over financial reporting related to the proper presentation and disclosure for related party transactions. ● We did not effectively select and develop certain information technology general controls related to access and change management controls that led to deficiencies in the design and operation of control activities.
Our management has identified the following material weaknesses in our internal control over financial reporting: ● There was a material weakness in our internal controls related to the proper design and implementation of certain controls over the review and approval of journal entries. ● T here was a material weakness in our internal controls related to the proper selection and development of certain information technology general controls related to user access, vendor management and change management controls that led to deficiencies in the design and operation of control activities. 31 We have commenced a plan of remediation to remedy the material weaknesses.
Although we have regained compliance with the Filings Rule and the Bid Price Rule, no assurance can be provided that we will regain compliance with the Annual Meeting Rule or otherwise remain in compliance with the Nasdaq Listing Rules.
The written notification noted that the Company remained under a Mandatory Panel Monitor pursuant to Nasdaq Listing Rule 5815(d)(4)(B). Although we have regained compliance with the Nasdaq Capital Market’s continued listing requirements, no assurance can be provided that we will remain in compliance with the Nasdaq Listing Rules.
Removed
We encounter competition from a number of companies in the geographic areas we serve. The majority of our revenue is derived from the sale of promotional products.
Added
We face intense competition to gain market share, which may lead some competitors to sell substantial amounts of goods at prices against which we cannot profitably compete. Our marketing strategy is to differentiate ourselves by providing quality service and quality products to our customers.
Removed
(Zazzle Inc.), Custom Ink, Cimpress plc (Nasdaq: CMPR), HALO Branded Solutions, Inc., Imagine This (Shye West, Inc.), Power Promotions, Inc. and Global Promotional Sourcing, LLC. We also compete with a multitude of foreign, regional and local competitors that vary by market.
Added
Storms could cause business interruptions, incur additional restoration costs, and impact product availability and pricing. 28 Increased focus by governments, vendors, stockholders, and customers on sustainability issues, including those related to climate change, may have a material adverse effect on our business and operations.
Removed
Competitive and general economic conditions might limit our ability and that of our competitors to increase prices to cover any increases in our product cost.
Added
If our customers or stockholders were to require us to use vendors that source, manufacture, or supply their products in accordance with certain sustainability standards, we expect that such standards would likewise force us to incur additional costs and we may fail to pass such additional costs on to our customers, which could also have a material adverse effect on our business.
Removed
We will be exempt from the SEC rules’ requirements to disclose certain information about our greenhouse gas emissions and comply with related auditor assurance requirements as long as we remain a “smaller reporting company” (as described below under — Risks Related to our Common Stock and Publicly-Traded Warrants – We are a ’smaller reporting company’ within the meaning of the Exchange Act, and if we take advantage of certain exemptions from disclosure requirements available to smaller reporting companies, this could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies. ”) or an “emerging growth company” (as described below under “— Risks Related to our Common Stock and Publicly-Traded Warrants – We are subject to ongoing public reporting requirements that are less rigorous than Exchange Act rules for companies that are not emerging growth companies and our stockholders could receive less information than they might expect to receive from more mature public companies. ”).
Added
On March 25, 2025, the SEC ended its defense of the rules. On April 4, 2025, state intervenors in the litigation filed a motion to hold the case in abeyance until the SEC determines what action it will take on the rules, and on April 24, 2025, the U.S.
Removed
We have commenced a plan of remediation to remedy the material weaknesses. However, the implementation of these measures may not fully address the material weaknesses in our internal control over financial reporting.
Added
Court of Appeals for the Eighth Circuit granted the intervenors’ motion to hold the litigation in abeyance.
Removed
Medical costs will continue to be a significant expense to the Company and may increase due to factors outside the Company’s control. 30 We have restated our financial statements. The restatement has consumed a significant amount of management time and resources and may continue to do so.
Added
On July 23, 2025, the SEC filed a report with the court stating that it “does not intend to review or reconsider the climate-related disclosure rules at this time” and indicating that the SEC could not determine what actions it would take in the event the rulemaking petitions are denied. The outcome of this litigation cannot be determined.
Removed
In addition, the restatement may subject us to a number of additional risks and uncertainties, including the increased possibility of legal proceedings and could adversely impact our operations.
Added
In addition, our reputation may be adversely affected by such claims, whether or not successful, including potential negative publicity about our products. 30 We may be subject to periodic litigation in both domestic and international jurisdictions that may adversely affect our financial position and results of operations.
Removed
We have restated certain financial information in our previously issued financial statements as of and for the fiscal years ended December 31, 2023 and 2022 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 that was filed by the Company with the SEC on March 28, 2024, and filed the restated financial statements with an amended Annual Report on Form 10-K/A for the year ended December 31, 2023 on January 22, 2025.
Added
Accordingly, the Company regained compliance with the Bid Price Rule, as confirmed in a written notification from the Staff dated April 8, 2025. In addition, the Company held its annual meeting for 2024 and 2025 on July 25, 2025.
Removed
The restatement has resulted in substantial costs in the form of accounting, legal fees, and similar professional fees, in addition to the substantial diversion of time and attention of our senior management and members of our accounting team in preparing the restatement.
Added
On August 1, 2025, the Company received a written notification from the Hearings Advisor of the Office of the General Counsel of Nasdaq, which confirmed that the Company regained compliance with the Annual Meeting Rule, and is therefore in compliance with the Nasdaq Capital Market’s continued listing requirements.
Removed
Further, as a result of the restatement, we face the potential for litigation or other disputes which may include, among others, claims invoking the federal and state securities laws, contractual claims or other claims arising from the restatement and the preparation of our financial statements.
Added
If a company determines that it does not qualify for smaller reporting company status because it exceeded one or more of the above thresholds, it will remain unqualified unless when making its annual determination it meets certain alternative threshold requirements which will be lower than the above thresholds if its prior public float or prior annual revenues exceed certain thresholds.
Removed
As of the date of this filing, we have no knowledge of any such litigation or dispute resulting from the restatement. However, we can provide no assurance that litigation or disputes will not arise in the future.
Removed
Any such litigation or dispute, whether successful or not, could have a material adverse effect on our business, results of operations and financial condition. We may recognize impairment charges, which could adversely affect our financial condition and results of operations.
Removed
In addition, the Company will schedule its annual meeting for 2024 and 2025 to take place in the second quarter of 2025. Upon the conclusion of such annual meeting, the Company will regain compliance with the Annual Meeting Rule.
Removed
We are authorized to issue “blank check” preferred stock without stockholder approval, which could adversely impact the rights of holders of our securities. Our Articles of Incorporation authorize us to issue up to 50,000,000 shares of blank check preferred stock.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur Chief Information Officer has had responsibility over cybersecurity, data privacy and classification, incident response, disaster recovery, and business continuity in a number of positions in the field of information technology. The Chief Information Officer oversees and tests our compliance with standards, remediates known risks, and leads our employee training program.
Biggest changeThe Chief Information Officer provides briefings on cybersecurity threats and related risks to the Chief Executive Officer on a regular basis. Our Chief Information Officer has had responsibility over cybersecurity, data privacy and classification, incident response, disaster recovery, and business continuity in a number of positions in the field of information technology.
These service providers enable us to leverage specialized knowledge and insights, ensuring our cybersecurity strategies meet generally accepted industry best practices. Our Chief Information Officer also performs ongoing review of current practices to further ensure cybersecurity. Overseeing Third-Party Risk Because we are aware of the risks associated with third-party service providers, we implement processes to oversee and manage these risks.
Our Chief Information Officer also performs ongoing review of current practices to further ensure cybersecurity. 40 Overseeing Third-Party Risk Because we are aware of the risks associated with third-party service providers, we implement processes to oversee and manage these risks.
We conduct thorough security assessments of all third-party providers before engagement and maintain ongoing monitoring to ensure compliance with our cybersecurity standards. The monitoring includes regular assessments by our Chief Information Officer.
We conduct thorough security assessments of all third-party providers before engagement and maintain ongoing monitoring to ensure compliance with our cybersecurity standards. The monitoring includes regular assessments by our Chief Information Officer. This approach is designed to mitigate risks related to data breaches or other security incidents originating from third parties.
In the event of a cybersecurity incident, the Chief Information Officer will implement an incident response plan. This plan includes immediate actions to mitigate the impact and long-term strategies for remediation and prevention of future incidents. Reporting to Board of Directors Significant cybersecurity matters, and strategic risk management decisions, will be escalated to the board of directors.
This includes the deployment of industry-standard security measures and regular system audits to identify potential vulnerabilities. In the event of a cybersecurity incident, the Chief Information Officer will implement an incident response plan. This plan includes immediate actions to mitigate the impact and long-term strategies for remediation and prevention of future incidents.
Monitoring Cybersecurity Incidents The Chief Information Officer is continually informed about the latest developments in cybersecurity, including potential threats and innovative risk management techniques. The Chief Information Officer implements and oversees processes for the regular monitoring of our information systems. This includes the deployment of industry-standard security measures and regular system audits to identify potential vulnerabilities.
The Chief Information Officer oversees and tests our compliance with standards, remediates known risks, and leads our employee training program. Monitoring Cybersecurity Incidents The Chief Information Officer is continually informed about the latest developments in cybersecurity, including potential threats and innovative risk management techniques. The Chief Information Officer implements and oversees processes for the regular monitoring of our information systems.
The Chief Information Officer must ensure that all industry standard cybersecurity measures are functioning as required to prevent or detect cybersecurity threats and related risks. The Chief Information Officer provides briefings on cybersecurity threats and related risks to the Chief Executive Officer on a regular basis.
Management’s Role Managing Risk The Company’s Chief Information Officer is primarily responsible for assessing, monitoring and managing our cybersecurity risks. The Chief Information Officer must ensure that all industry standard cybersecurity measures are functioning as required to prevent or detect cybersecurity threats and related risks.
This approach is designed to mitigate risks related to data breaches or other security incidents originating from third parties. 39 Risks from Cybersecurity Threats We have not encountered cybersecurity challenges that have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations, or financial condition.
Risks from Cybersecurity Threats We have not encountered cybersecurity challenges that have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations, or financial condition. Governance Board of Directors Oversight Our board of directors oversees the management of risks associated with cybersecurity threats.
Removed
Governance Board of Directors Oversight Our board of directors oversees the management of risks associated with cybersecurity threats. Management’s Role Managing Risk The Company’s Chief Information Officer is primarily responsible for assessing, monitoring and managing our cybersecurity risks.
Added
These service providers enable us to leverage specialized knowledge and insights, ensuring our cybersecurity strategies meet generally accepted industry best practices.
Added
Reporting to Board of Directors Significant cybersecurity matters, and strategic risk management decisions, will be escalated to the board of directors. 41

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe lease contains an initial base rent of $21 per month with 2.2% - 2.5% annual escalations, plus a percentage of taxes and operating expenses incurred by the lessor in connection with the ownership and management of the property. 40 Under a lease agreement dated May 31, 2023 (the “Miller Lease Agreement”) with Miller Family Walpole LLC, as landlord (the “Miller Landlord”), for a warehouse facility in Walpole, Massachusetts, the initial lease term commenced on June 1, 2023 and terminates on May 31, 2028.
Biggest changeUnder a lease agreement dated May 31, 2023 (the “Miller Lease Agreement”) with Miller Family Walpole LLC, as landlord (the “Miller Landlord”), for a warehouse facility in Walpole, Massachusetts, the initial lease term commenced on June 1, 2023 and terminates on May 31, 2028.
We paid base rent of $179,550.00 in the first year of the lease and will pay an increase of 2% per annum in each subsequent year. We may extend the term for an additional five years upon the same base rent terms upon 12 months’ notice.
We paid base rent of $179,550 in the first year of the lease and will pay an increase of 2% per annum in each subsequent year. We may extend the term for an additional five years upon the same base rent terms upon 12 months’ notice.
Our aggregate rent payments for these facilities was approximately $743.000 during the fiscal year ended December 31, 2024. Our employees also work remotely from 22 additional locations around the United States using other facilities. We believe that all our properties have been adequately maintained, are generally in good condition, and are suitable and adequate for our businesses.
Our aggregate rent payments for these facilities was approximately $749,000 during the fiscal year ended December 31, 2025. Our employees also work remotely from 22 additional locations around the United States using other facilities. We believe that all our properties have been adequately maintained, are generally in good condition, and are suitable and adequate for our businesses.
ITEM 2. PROPERTIES. We are headquartered in Quincy, Massachusetts, where we occupy approximately 10,000 square feet of office space pursuant to a lease agreement, as amended, that will terminate on May 31, 2025. Our management team, client service team, marketing, operations, and sales team are all primarily based in this office.
ITEM 2. PROPERTIES. We are headquartered in Quincy, Massachusetts, where we occupy approximately 10,000 square feet of office space pursuant to a lease agreement that will terminate on May 31, 2032, with an option to extend the lease an additional five years. This lease was entered into on January 10, 2025 and the lease term began on June 1, 2025.
Our monthly rent for this facility was $24,521 from June 2020 to May 2021, $25,178 from June 2021 to May 2022, $25,835 from June 2022 to May 2023, and will be $26,491 from June 2023 to May 2024 and $27,148 from June 2024 to May 2025.
Prior to June 1, 2025, we occupied a different office space in Quincy, Massachusetts. Our monthly rent for this facility was $26,491 from June 2023 to May 2024 and $27,148 from June 2024 to May 2025.
Removed
We may also be required to pay certain taxes and expenses to the landlord under the lease agreement. On January 10, 2025, the Company entered into a seven-year lease agreement for new office space in North Quincy, Massachusetts.
Added
The lease contains an initial base rent of approximately $21 thousand per month with 2.2% - 2.5% annual escalations, plus a percentage of taxes and operating expenses incurred by the lessor in connection with the ownership and management of the property. Our management team, client service team, marketing, operations, and sales team are all primarily based in this office.
Removed
The new lease term begins on June 1, 2025 and expires on May 31, 2032 with an option to extend the lease an additional five years.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeWe are not currently aware of any such legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition or operating results. ITEM 4. MINE SAFETY DISCLOSURES. Not applicable. 41 PART II
Biggest changeWe are not currently aware of any such legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition or operating results. ITEM 4. MINE SAFETY DISCLOSURES. Not applicable. 42 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest change“Risk Factors—Risks Related to Our Common Stock and Publicly-Traded Warrants— We do not expect to declare or pay dividends in the foreseeable future .” Recent Sales of Unregistered Securities We did not sell any equity securities during the 2024 fiscal year that were not previously disclosed in a Quarterly Report on Form 10-Q or a Current Report on Form 8-K that was filed during the 2024 fiscal year .
Biggest change“Risk Factors—Risks Related to Our Common Stock and Publicly-Traded Warrants—We do not expect to declare or pay dividends in the foreseeable future .” Recent Sales of Unregistered Securities We did not sell any equity securities during the 2025 fiscal year that were not previously disclosed in a Quarterly Report on Form 10-Q or a Current Report on Form 8-K that was filed during the 2025 fiscal year.
Number of Holders of Our Common Stock As of April 8, 2025, there were approximately 64 holders of record of our common stock, which does not include holders whose shares are held in nominee or “street name” accounts through banks, brokers or other financial institutions.
Number of Holders of Our Common Stock As of March 23, 2026, there were approximately 68 holders of record of our common stock, which does not include holders whose shares are held in nominee or “street name” accounts through banks, brokers or other financial institutions.
Purchases of Equity Securities No repurchases of our common stock were made during the fourth quarter of 2024. 42 ITEM 6. [RESERVED]
Purchases of Equity Securities No repurchases of our common stock were made during the fourth quarter of 2025.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeYears Ended December 31, 2024 2023 Amount (in thousands) % of Revenues Amount (in thousands) % of Revenues SALES Sales $ 82,194 99.4 % $ 75,147 98.9 % Sales – related parties 460 0.6 % 853 1.1 % Total sales 82,654 100.0 % 76,000 100.0 % COST OF SALES: Cost of sales 56,487 68.3 % 50,492 66.4 % Cost of sales - related parties 354 0.4 % 656 0.9 % Total cost of sales 56,841 68.8 % 51,148 67.3 % GROSS PROFIT 25,813 31.2 % 24,852 32.7 % OPERATING EXPENSES: General and administrative expenses 30,707 37.2 % 25,310 33.3 % Goodwill impairment — — % 810 1.1 % Total operating expenses 30,707 37.2 % 26,120 34.4 % LOSS FROM OPERATIONS (4,894 ) (5.9 )% (1,268 ) (1.7 )% OTHER INCOME: Other income 38 — % 186 0.2 % Interest income 305 0.4 % 570 0.8 % Change in fair value of contingent earn-out liability 208 0.3 % 65 0.1 % Realized gain on investments 208 0.3 % 103 0.1 % Total other income 759 0.9 % 924 1.2 % LOSS BEFORE INCOME TAXES (4,135 ) (5.0 )% (344 ) (0.5 )% Provision for income taxes 5 — % 41 0.1 % NET LOSS $ (4,140 ) (5.0 )% $ (385 ) (0.5 )% 45 Sales Sales consist primarily of the selling price of the merchandise, service or outbound shipping and handling charges, less discounts, coupons redeemed, returns and credits.
Biggest changeYears Ended December 31, 2025 2024 Amount (in thousands) % of Revenues Amount (in thousands) % of Revenues SALES Sales $ 116,191 100.0 % $ 82,194 99.4 % Sales – related parties — — % 460 0.6 % Total sales 116,191 100.0 % 82,654 100.0 % COST OF SALES: Cost of sales 81,962 70.5 % 56,487 68.3 % Cost of sales - related parties — — % 354 0.4 % Total cost of sales 81,962 70.5 % 56,841 68.8 % GROSS PROFIT 34,229 29.5 % 25,813 31.2 % OPERATING EXPENSES: General and administrative expenses 36,186 31.1 % 30,707 37.2 % Total operating expenses 36,186 31.1 % 30,707 37.2 % LOSS FROM OPERATIONS (1,957 ) (1.7 )% (4,894 ) (5.9 )% OTHER INCOME: Other income 937 0.8 % 38 — % Interest income 296 0.3 % 305 0.4 % Change in fair value of contingent earn-out liability — — % 208 0.3 % Realized gain on investments 97 0.1 % 208 0.3 % Total other income 1,330 1.1 % 759 0.9 % LOSS BEFORE INCOME TAXES (627 ) (0.5 )% (4,135 ) (5.0 )% Provision for income taxes 120 0.1 % 5 — % NET LOSS $ (747 ) (0.6 )% $ (4,140 ) (5.0 )% 47 Sales Sales consist primarily of the selling price of the merchandise, service or outbound shipping and handling charges, less discounts, coupons redeemed, returns and credits.
For so long as we are an emerging growth company, we will not be required to: ● have an auditor report on our internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act; ● present three years, and may instead present only two years, of audited financial statements, with correspondingly reduced “Management’s Discussion and Analysis of Financial Condition and Results of Operations” disclosure in this report; ● comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (i.e., an auditor discussion and analysis); ● comply with certain greenhouse gas emissions disclosure and related third-party assurance requirements; ● submit certain executive compensation matters to stockholder advisory votes, such as “say-on-pay” and “say-on-frequency;” and ● disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the chief executive officer’s compensation to median employee compensation.
For so long as we are an emerging growth company, we will not be required to: ● have an auditor report on our internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act; ● present three years, and may instead present only two years, of audited financial statements, with correspondingly reduced “Management’s Discussion and Analysis of Financial Condition and Results of Operations” disclosure in this report; ● comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (i.e., an auditor discussion and analysis); 45 ● comply with certain greenhouse gas emissions disclosure and related third-party assurance requirements; ● submit certain executive compensation matters to stockholder advisory votes, such as “say-on-pay” and “say-on-frequency;” and ● disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the chief executive officer’s compensation to median employee compensation.
We will remain an emerging growth company until the earliest of (i) the last day of the fiscal year following the fifth anniversary of the Company’s initial public offering, (ii) the last day of the first fiscal year in which our total annual gross revenues are $1.07 billion or more, (iii) the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which would occur if the market value of our common stock that is held by non-affiliates exceeds $700.0 million as of the last business day of our most recently completed second fiscal quarter or (iv) the date on which we have issued more than $1.0 billion in non-convertible debt during the preceding three year period.
We will remain an emerging growth company until the earliest of (i) the last day of the fiscal year following the fifth anniversary of our initial public offering, (ii) the last day of the first fiscal year in which our total annual gross revenues are $1.07 billion or more, (iii) the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which would occur if the market value of our common stock that is held by non-affiliates exceeds $700.0 million as of the last business day of our most recently completed second fiscal quarter or (iv) the date on which we have issued more than $1.0 billion in non-convertible debt during the preceding three year period.
We believe that our current levels of cash will be sufficient to meet our anticipated cash needs for our operations and cash payment obligations for both the 12 months ended December 31, 2025 and in the long-term beyond this period, including our anticipated costs associated with being a public reporting company.
We believe that our current levels of cash will be sufficient to meet our anticipated cash needs for our operations and cash payment obligations for both the 12 months ended December 31, 2026 and in the long-term beyond this period, including our anticipated costs associated with being a public reporting company.
Principal Factors Affecting Our Financial Performance Our operating results are primarily affected by the following factors: ● our ability to acquire new customers or retain existing customers; ● our ability to offer competitive product pricing; ● our ability to broaden product offerings; ● industry demand and competition; ● our ability to leverage technology and use and develop efficient processes; ● our ability to attract and retain talented employees; ● our ability to identify or to complete acquisitions or to successfully integrate the businesses we acquire; and ● market conditions and our market position. 44 Results of Operations Comparison of Years Ended December 31, 2024 and 2023 The following table sets forth key components of our results of operations during the years ended December 31, 2024 and 2023 both in dollars and as a percentage of our revenues.
Principal Factors Affecting Our Financial Performance Our operating results are primarily affected by the following factors: ● our ability to acquire new customers or retain existing customers; ● our ability to offer competitive product pricing; ● our ability to broaden product offerings; ● industry demand and competition; ● our ability to leverage technology and use and develop efficient processes; ● our ability to attract and retain talented employees; ● our ability to identify or to complete acquisitions or to successfully integrate the businesses we acquire; and ● market conditions and our market position. 46 Results of Operations Comparison of Years Ended December 31, 2025 and 2024 The following table sets forth key components of our results of operations during the years ended December 31, 2025 and 2024 both in dollars and as a percentage of our revenues.
In addition to selling branded products, we offer clients custom sourcing capabilities; a flexible and customizable e-commerce solution for promoting branded merchandise and other promotional products, managing promotional loyalty and incentives, print collateral, and event assets, order and inventory management, and designing and hosting online retail popup shops, fixed public retail online stores, and online business-to-business service offerings; creative and merchandising services; warehousing/fulfillment and distribution; print-on-demand; kitting; POS displays; and loyalty and incentive programs.
In addition to selling branded products, we offer clients custom sourcing capabilities; a flexible and customizable e-commerce solution for promoting branded merchandise and other promotional products, managing promotional loyalty and incentives, print collateral, and event assets, order and inventory management, and designing and hosting online retail popup shops, fixed public retail online stores, and online business-to-business service offerings; creative and merchandising services; warehousing/fulfillment and distribution; print-on-demand; kitting; point of sale displays; and loyalty and incentive programs.
In addition, 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 of 1933, as amended, for complying with new or revised accounting standards.
In addition, 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.
Any failure by us to raise additional funds on terms favorable to us, or at all, could limit our ability to expand our business operations and could harm our overall business prospects. 47 Summary of Cash Flows The following table provides detailed information about our net cash flows for the years ended December 31, 2024 and 2023.
Any failure by us to raise additional funds on terms favorable to us, or at all, could limit our ability to expand our business operations and could harm our overall business prospects. Summary of Cash Flows The following table provides detailed information about our net cash flows for the years ended December 31, 2025 and 2024 (in thousands).
The majority of our revenue is derived from program business, although only a small percentage of our customers are considered programmatic. For the years ended December 31, 2024 and 2023, program clients accounted for 83.3% and 81.4% of total revenue, respectively. Fewer than 350 of our more than 2,000 active customers are considered to be program clients.
The majority of our revenue is derived from program business, although only a small percentage of our customers are considered programmatic. For the years ended December 31, 2025 and 2024, program clients accounted for 83.0% and 83.3% of total revenue, respectively. Fewer than 350 of our more than 2,000 active customers are considered to be program clients.
Income Tax Provision Income tax provision reflects statutory tax rates in the jurisdictions in which we operate adjusted for permanent book/tax differences. Income tax provision for the year ended December 31, 2024 was approximately $5 thousand compared to income tax provision of approximately $41 thousand for the year ended December 31, 2023.
Income Tax Provision Income tax provision reflects statutory tax rates in the jurisdictions in which we operate adjusted for permanent book/tax differences. Income tax provision for the year ended December 31, 2025 was approximately $120 thousand compared to approximately $5 thousand for the year ended December 31, 2024.
As of December 31, 2023, we had not drawn any funds from the Revolving Line of Credit. 50 Acquisition of Gander Group Assets On August 23, 2024, Stran Loyalty Solutions entered into a Secured Party Sale Agreement, dated as of August 23, 2024 (the “Sale Agreement”), between Stran Loyalty Solutions and Sallyport Commercial Finance, LLC, a Delaware limited liability company (“Secured Party”), pursuant to which Stran Loyalty Solutions agreed to purchase, on an as-is basis, all of the rights and interests of Gander Group, in and to the Gander Group Assets from Secured Party as a private sale pursuant to Article 9 of the Uniform Commercial Code (the “Gander Group Transaction”).
Acquisition of Assets of Gander Group On August 23, 2024, Stran Loyalty Solutions entered into a Secured Party Sale Agreement, dated as of August 23, 2024 (the “Sale Agreement”), between Stran Loyalty Solutions and Sallyport Commercial Finance, LLC, a Delaware limited liability company (“Secured Party”), pursuant to which Stran Loyalty Solutions agreed to purchase, on an as-is basis, all of the rights and interests of Gander Group, in and to the Gander Group Assets from Secured Party as a private sale pursuant to Article 9 of the Uniform Commercial Code (the “Gander Group Transaction”).
Gross profit of our Stran segment decreased to approximately $ 23.7 million for the year ended December 31, 2024 from approximately $24.9 million for the year ended December 31, 2023. Gross profit of our SLS segment increased to approximately $2.1 million for the year ended December 31, 2024 from $0 for the year ended December 31, 2023.
Gross profit of our Stran segment increased to approximately $27.0 million for the year ended December 31, 2025 from approximately $23.7 million for the year ended December 31, 2024. Gross profit of our SLS segment increased to approximately $7.2 million for the year ended December 31, 2025 from approximately $2.1 million for the year ended December 31, 2024.
Cost of s ales by our SLS segment increased to approximately $ 7.9 million for the year ended December 31, 2024 from $0 for the year ended December 31, 2023. The increase in the dollar amount of total cost of sales was primarily due to the increase in sales of 8.8% from period to period.
Cost of sales by our SLS segment increased to approximately $26.9 million for the year ended December 31, 2025 from approximately $7.9 million for the year ended December 31, 2024. The increase in the dollar amount of total cost of sales was primarily due to the increase in sales of 40.6% from period to period.
Operating expenses of our SLS segment increased to approximately $ 3.1 million for the year ended December 31, 2024 from $0 for the year ended December 31, 2023. As a percentage of sales, operating expenses increased to 37.2% for the year ended December 31, 2024 , from 34.4% for the year ended December 31, 2023 .
Operating expenses of our SLS segment increased to approximately $7.9 million for the year ended December 31, 2025 from approximately $3.1 million for the year ended December 31, 2024. As a percentage of sales, operating expenses decreased to 31.1% for the year ended December 31, 2025, from 37.2% for the year ended December 31, 2024.
Our change in fair value of contingent earn-out liability was approximately $208 thousand for the year ended December 31, 2024, compared to approximately $65 thousand for the year ended December 31, 2023. This change was primarily due to an update to the estimated fair value of the remaining contingent earn-out liabilities related to business combinations.
Our change in fair value of contingent earn-out liability was zero for the year ended December 31, 2025 , compared to approximately $208 thousand for the year ended December 31, 2024 . This change was primarily due to an update to the estimated fair value of the remaining contingent earn-out liabilities related to the performance of the previously acquired businesses.
As a percentage of sales, total cost of sales increased to 68.8% for the year ended December 31, 2024 from 67.3% for the year ended December 31, 2023 . Cost of sales by our Stran segment decreased to approximately $ 49.0 million for the year ended December 31, 2024 from approximately $51.1 million for the year ended December 31, 2023.
As a percentage of sales, total cost of sales increased to 70.5% for the year ended December 31, 2025 from 68.8% for the year ended December 31, 2024. Cost of sales by our Stran segment increased to approximately $55.1 million for the year ended December 31, 2025 from approximately $49.0 million for the year ended December 31, 2024.
As a percentage of sales, operating expenses of our Stran segment increased to 37.9% for the year ended December 31, 2024 from 34.4% for the year ended December 31, 2023. As a percentage of sales, operating expenses of our SLS segment were 31.4% for the year ended December 31, 2024.
As a percentage of sales, operating expenses of our Stran segment decreased to 34.5% for the year ended December 31, 2025 from 37.9% for the year ended December 31, 2024. As a percentage of sales, operating expenses of our SLS segment decreased to 23.1% for the year ended December 31, 2025 from 31.4% for the year ended December 31, 2024.
Our total operating expenses increased 17.6% to approximately $30.7 million for the year ended December 31, 2024 , from approximately $26.1 million for the year ended December 31, 2023 . Operating expenses of our Stran segment increased to approximately $ 27.6 million for the year ended December 31, 2024 from approximately $26.1 million for the year ended December 31, 2023.
Our total operating expenses increased 17.8% to approximately $36.2 million for the year ended December 31, 2025, from approximately $30.7 million for the year ended December 31, 2024. Operating expenses of our Stran segment increased to approximately $28.3 million for the year ended December 31, 2025 from approximately $27.6 million for the year ended December 31, 2024.
Sales by our SLS segment (which consists of the former Gander Group business) increased to approximately $ 9.9 million for the year ended December 31, 2024 from $0 for the year ended December 31, 2023. For the Stran segment, the decrease in sales was primarily due to lower spending from new and existing clients.
Sales by our SLS segment (which consists of the former Gander Group business) increased to approximately $34.1 million for the year ended December 31, 2025 from $9.9 million for the year ended December 31, 2024. For the Stran segment, the increase in sales was primarily due to higher spending from existing clients as well as business from new customers.
For the Stran segment, the decrease in the dollar amount of gross profit was due to a decrease in sales of approximately $3.3 million for the reasons described above, which was partially offset by a decrease in cost of sales of approximately $2.2 million for the reasons described above.
For the Stran segment, the increase in the dollar amount of gross profit was due to an increase in sales of approximately $9.4 million for the reasons described above, which was partially offset by an increase of cost of sales of approximately $6.1 million for the reasons described above.
Our total gross profit increased 3.9% to approximately $25.8 million, or 31.2% of sales, for the year ended December 31, 2024 , from approximately $24.9 million, or 32.7% of sales, for the year ended December 31, 2023 .
Our total gross profit increased 32.6% to approximately $34.2 million, or 29.5% of sales, for the year ended December 31, 2025, from approximately $25.8 million, or 31.2% of sales, for the year ended December 31, 2024.
Sales by our Stran segment decreased to approximately $72.7 million for the year ended December 31, 2024 from approximately $76.0 million for the year ended December 31, 2023.
Sales by our Stran segment increased to approximately $82.1 million for the year ended December 31, 2025 from approximately $72.7 million for the year ended December 31, 2024.
Years Ended December 31, 2024 (in thousands) 2023 (in thousands) Net cash provided by (used in) operating activities $ 2,760 $ (2,550 ) Net cash used in investing activities (533 ) (3,736 ) Net cash used in financing activities (928 ) (909 ) Net increase (decrease) in cash 1,299 (7,195 ) Cash and cash equivalents - beginning 8,059 15,254 Cash and cash equivalents - ending $ 9,358 $ 8,059 Net cash provided by operating activities was approximately $2.8 million for the year ended December 31, 2024, as compared to net cash used in operating activities of approximately $2.6 million for the year ended December 31, 2023.
Years Ended December 31, 2025 2024 Net cash (used in) provided by operating activities $ (4,673 ) $ 2,760 Net cash provided by (used in) investing activities 3,235 (533 ) Net cash used in financing activities (1,167 ) (928 ) Net change in cash and cash equivalents (2,605 ) 1,299 Cash and cash equivalents - beginning 9,358 8,059 Cash and cash equivalents - ending $ 6,753 $ 9,358 51 Net cash used in operating activities was approximately $4.7 million for the year ended December 31, 2025, as compared to net cash provided by operating activities of approximately $2.8 million for the year ended December 31, 2024.
Contractual Obligations Property Leases The following is a schedule by years of future minimum lease payments (in thousands): 2025 $ 361 2026 189 2027 185 2028 65 Total future non-cancelable minimum lease payments $ 800 Lease cost for the years ended December 31, 2024 and 2023 totaled approximately $0.7 million and $0.5 million, respectively.
Contractual Obligations Property Leases The following is a schedule by years of future minimum lease payments (in thousands): 2026 697 2027 679 2028 335 2029 276 2030 283 Thereafter 411 Total future non-cancelable minimum lease payments $ 2,681 52 Lease cost for the years ended December 31, 2025 and 2024 totaled approximately $0.6 million and $0.7 million, respectively.
Sales by segment and in total were as follows (in thousands): Year Ended Year Ended Increase / (Decrease) 12/31/2024 % of Total 12/31/2023 % of Total $ % Stran $ 72,712 88.0 % $ 76,000 100 % $ (3,288 ) (4.3 )% SLS 9,942 12.0 % — — % 9,942 100.0 % Total sales $ 82,654 100.0 % $ 76,000 100 % $ 6,654 8.8 % Our total sales increased 8.8% to approximately $82.7 million for the year ended December 31, 2024 , from approximately $76.0 million for the year ended December 31, 2023 .
Sales by segment and in total were as follows (in thousands): Year Ended December 31, Year Ended December 31, Increase / (Decrease) 2025 % of Total 2024 % of Total $ % Stran $ 82,125 70.7 % $ 72,712 88.0 % $ 9,413 12.9 % SLS 34,066 29.3 % 9,942 12.0 % 24,124 242.6 % Total sales $ 116,191 100.0 % $ 82,654 100.0 % $ 33,537 40.6 % Our total sales increased 40.6% to approximately $116.2 million for the year ended December 31, 2025, from approximately $82.7 million for the year ended December 31, 2024.
The change was primarily due to an increase in rewards program liability. Net cash used in investing activities was approximately $0.5 million for the year ended December 31, 2024, as compared to net cash used in investing activities of approximately $3.7 million for the year ended December 31, 2023.
Net cash provided by investing activities was approximately $3.2 million for the year ended December 31, 2025, as compared to net cash used in investing activities of approximately $0.5 million for the year ended December 31, 2024. The change was primarily due to the absence of business acquisition outlays.
Cost of Sales Cost of sales by segment and in total were as follows (in thousands): Year Ended Year Ended Increase / (Decrease) 12/31/2024 % of Total 12/31/2023 % of Total $ % Stran $ 48,970 86.2 % $ 51,148 100.0 % $ (2,178 ) (4.3 )% SLS 7,871 13.8 % — — % 7,871 100.0 % Total cost of sales $ 56,841 100.0 % $ 51,148 100.0 % $ 5,693 11.1 % Our total cost of sales increased 11.1% to approximately $56.8 million for the year ended December 31, 2024 , from approximately $51.1 million for the year ended December 31, 2023 .
Cost of Sales Cost of sales by segment and in total were as follows (in thousands): Year Ended December 31, Year Ended December 31, Increase / (Decrease) 2025 % of Total 2024 % of Total $ % Stran $ 55,088 67.2 % $ 48,970 86.2 % $ 6,118 12.5 % SLS 26,874 32.8 % 7,871 13.8 % 19,003 241.4 % Total cost of sales $ 81,962 100.0 % $ 56,841 100.0 % $ 25,121 44.2 % Our total cost of sales increased 44.2% to approximately $82.0 million for the year ended December 31, 2025, from approximately $56.8 million for the year ended December 31, 2024.
At the consummation of the transactions contemplated by the Sale Agreement (the “Gander Group Transaction Closing”), Stran Loyalty Solutions paid the Cash Purchase Price, including the payment of the Transaction Expense Payment, and assumed the Gander Group Assumed Liabilities.
At the consummation of the transactions contemplated by the Sale Agreement (the “Gander Group Transaction Closing”), Stran Loyalty Solutions paid the Cash Purchase Price, assumed the Gander Group Assumed Liabilities and indirectly acquired the Gander Group Assets, consisting of substantially all of the assets of Gander Group, including all of the equity of Gander Group Louisiana, which became a wholly-owned subsidiary of Stran Loyalty Solutions.
The gross profit margin for the SLS segment was 20.8% for the year ended December 31, 2024. 46 Operating Expenses Operating expenses by segment and in total were as follows (in thousands): Year Ended Year Ended Increase / (Decrease) 12/31/2024 % of Total 12/31/2023 % of Total $ % Stran $ 27,587 89.8 % $ 26,120 100.0 % $ 1,467 5.6 % SLS 3,120 10.2 % — — % 3,120 100.0 % Total operating expenses $ 30,707 100.0 % $ 26,120 100.0 % $ 4,587 17.6 % Operating expenses consist of general and administrative expenses.
Operating Expenses Operating expenses by segment and in total were as follows (in thousands): Year Ended December 31, Year Ended December 31, Increase / (Decrease) 2025 % of Total 2024 % of Total $ % Stran $ 28,304 78.2 % $ 27,587 89.8 % $ 717 2.6 % SLS 7,882 21.8 % 3,120 10.2 % 4,762 152.6 % Total operating expenses $ 36,186 100.0 % $ 30,707 100.0 % $ 5,479 17.8 % 49 Operating expenses consist of general and administrative expenses.
The increase in net cash used in financing activities was primarily due to reduced payments of contingent earn-out liabilities of approximately $0.6 million and increased payments of installment payment liabilities of approximately $0.6 million.
Net cash used in financing activities was primarily due to a decrease in installment payment liabilities of approximately $0.3 million, common stock repurchased during the period of approximately $0.5 million and the payment of contingent earn-out liabilities of approximately $0.2 million.
The change was primarily due to increased proceeds from the sale of investments, partially offset by increased purchases of investments. Net cash used in financing activities was approximately $0.9 million for the year ended December 31, 2024, as compared to approximately $0.9 million for the year ended December 31, 2023.
Net cash used in financing activities was approximately $1.1 million for the year ended December 31, 2025, as compared to approximately $0.9 million for the year ended December 31, 2024.
The decrease in total gross profit margin to 31.2% for the year ended December 31, 2024 compared to 32.7% for the year ended December 31, 2023 was primarily due to the acquisition of the Gander Group Assets in August 2024, which operates at a lower gross margin than the Stran segment.
The decrease in total gross profit margin to 29.5% for the year ended December 31, 2025 from 31.2% for the year ended December 31, 2024 was primarily due to the Gander Group Assets, which operate at a lower gross margin than the Stran segment, and which were acquired in August 2024 and therefore only partially reflected in our results of operations for the prior year period.
Under the Sale Agreement, the aggregate consideration for the Gander Group Assets consisted of (a) cash payments by Stran Loyalty Solutions to Secured Party of approximately $1.1 million (the “Cash Purchase Price”), and (b) the assumption by Stran Loyalty Solutions of certain liabilities totaling approximately $5.5 million (the “Gander Group Assumed Liabilities”), subject to adjustment, at and following the Gander Group Transaction Closing (as defined below), including the payment at the Gander Group Transaction Closing of $150 thousand to Warson Capital Partners, LLC, an investment banking firm retained by Gander Group, for its fees and expenses with respect to the Gander Group Transaction, including the marketing for sale of the Gander Group Assets (the “Transaction Expense Payment”).
Under the Sale Agreement, the aggregate consideration for the Gander Group Assets consisted of (a) cash payments by Stran Loyalty Solutions to Secured Party of approximately $1.1 million (the “Cash Purchase Price”), and (b) the assumption by Stran Loyalty Solutions of certain liabilities totaling approximately $5.5 million (the “Gander Group Assumed Liabilities”).
To the extent that there are differences between our estimates and actual results, our future financial statements presentation, financial condition, results of operations, and cash flows will be affected. 51 We believe that the assumptions and estimates associated with the valuation of goodwill and intangible assets have the greatest potential impact on our financial statements.
Actual results could differ significantly from the estimates made by our management. To the extent that there are differences between our estimates and actual results, our future financial statements presentation, financial condition, results of operations, and cash flows will be affected.
For the Stran segment, the increase in the dollar amount of operating expenses was primarily due to expenses related to Stran’s NetSuite enterprise resource planning system implementation, acquisition and integration of the Gander Group Assets, and legal and accounting expenses related to the re-audit of historical financial statements.
For the Stran segment, the increase in the dollar amount of operating expenses was primarily due to increased legal and accounting expenses related to the re-audit of historical financial statements, increased headcount, and higher expenses related to our e-commerce platform, Magento Open Source.
Recent Accounting Pronouncements For a discussion of recently adopted accounting pronouncements, see Recently Issued Accounting Pronouncements in Note A.27 to our financial statements beginning on page F-1 of this Annual Report on Form 10-K. 52 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. Not applicable.
There are items within our consolidated financial statements that require estimation but are not deemed critical, as defined above. Recent Accounting Pronouncements For a discussion of recently adopted accounting pronouncements, see Recently Issued Accounting Pronouncements in Note A.29 to our financial statements beginning on page F-10 of this Annual Report on Form 10-K. 53
Our realized gain on investments was approximately $208 thousand for the year ended December 31, 2024, compared t o approximately $103 thousand for the year ended December 31, 2023 . This change was primarily due to the sale of investments above their initial value.
Our realized gain on investments was $97 thousand for the year ended December 31, 2025, compared t o approximately $208 thousand for the year ended December 31, 2024 . The decrease in investments reflects our utilization of cash to support the Company’s operating activities.
For the Stran segment, the decrease was primarily due to a decrease in sales of approximately $3.3 million for the reasons described above . For the SLS segment, the increase was due to the acquisition of the Gander Group Assets in August 2024.
For the Stran segment, the increase was primarily due to the increase in sales described above.
Based on management’s expectations of future earnings and recognition of a valuation allowance, we anticipate that our effective tax rate will remain similar to the rate recorded in 2024. Net Loss Our net loss for the year ended December 31, 2024 was approximately $4.1 million, compared to approximately $0.4 million for the year ended December 31, 2023.
The effective tax rate for the year ended December 31, 2024 was 0.1%, based on the loss before income taxes of approximately $4.1 million. 50 The change in the effective tax rate from the comparison of 2025 and 2024 as noted above primarily relates to our estimated earnings and the Company’s position that its deferred tax assets require a full valuation allowance.
Income tax provision for the year ended December 31, 2024 accounted for 0.1% of loss before income taxes of approximately $4.1 million. Income tax provision for the year ended December 31, 2023 accounted for 11.9% of income before income taxes of approximately $0.3 million.
The effective tax rate for the year ended December 31, 2025 was 19.2%, based on the loss before income taxes of approximately $0.6 million.
This change was primarily due to the increase in operating expenses along with the decrease in gross profit for the reasons described above. Liquidity and Capital Resources As of December 31, 2024 , we had cash and cash equivalents of approximately $9.4 million and investments of approximately $8.9 million .
Net Loss Our net loss for the year ended December 31, 2025 was approximately $0.7 million, compared to net loss of approximately $4.1 million for the year ended December 31, 2024. This change was primarily due to an increase in gross profit, partially offset by an increase in operating expenses, for the reasons described above.
For the SLS segment, the increase in the dollar amount of gross profit was due to the acquisition of the Gander Group Assets in August 2024.
For the SLS segment, the increase in the dollar amount of gross profit was primarily attributable to the inclusion of a full year of consolidated operations including the Gander Group Assets, which were acquired in August 2024 and therefore only partially reflected in our results of operations for the prior year period.
The gross profit margin for the Stran segment remained unchanged at 32.7% for the years ended December 31, 2024 and 2023.
The gross profit margin for the Stran segment increased to 32.9% for the year ended December 31, 2025 from 32.7% for the year ended December 31, 2024. The gross profit margin for the SLS segment increased to 21.1% for the year ended December 31, 2025 from 20.8% for the year ended December 31, 2024.
As stated above, as of December 31, 2024 and December 31, 2023, we had not drawn any funds from the Revolving Line of Credit under the Loan Documents. Critical Accounting Estimates We prepare our financial statements in accordance with U.S. GAAP.
As of December 31, 2025 and December 31, 2024, the Company had net reward card program liabilities totaling approximately $1.5 million and $6.0 million, respectively. Critical Accounting Estimates We prepare our financial statements in accordance with U.S. GAAP.
Our interest income was approximately $305 thousand for the year ended December 31, 2024 , compared to approximately $570 thousand for the year ended December 31, 2023 . This change was primarily due to a decrease in interest generated from investments.
Our interest income was approximately $296 thousand for the year ended December 31, 2025 , compared to approximately $305 thousand for the year ended December 31, 2024 . This decrease was primarily attributable to lower interest rates earned on program deposit balances, partially offset by slightly higher average program deposit balances compared to the same period in the prior year.
Gross Profit Gross profit and gross margin percentages by segment and in total were as follows (in thousands): Year Ended Year Ended Increase / (Decrease) 12/31/2024 % of Total 12/31/2023 % of Total $ % Stran $ 23,742 92.0 % $ 24,852 100.0 % $ (1,110 ) (4.5 )% SLS 2,071 8.0 % — — % 2,071 100.0 % Total gross profit $ 25,813 100.0 % $ 24,852 100.0 % $ 961 3.9 % Gross profit consists of sales less total cost of sales.
For the SLS segment, the increase was primarily attributable to the inclusion of a full year of consolidated operations including the Gander Group Assets, which were acquired in August 2024 and therefore only partially reflected in our results of operations for the prior year period. 48 Gross Profit Gross profit and gross margin by segment and in total were as follows (in thousands): Year Ended December 31, Year Ended December 31, Increase / (Decrease) 2025 % of Total 2024 % of Total $ % Stran $ 27,037 79.0 % $ 23,742 92.0 % $ 3,295 13.9 % SLS 7,192 21.0 % 2,071 8.0 % 5,121 247.3 % Total gross profit $ 34,229 100.0 % $ 25,813 100.0 % $ 8,416 32.6 % Gross profit consists of sales less total cost of sales.
Those program customers are geared towards longer-lasting relationships that helps secure recurring revenue well into the future. Our sales increased 8.8% year-over year in 2024 compared to 2023 , which we believe was primarily due to higher spending from existing clients as well as business from new customers.
Our sales for the year ended December 31, 2025 increased 40.6% compared to sales for the year ended December 31, 2024, which was due to higher spending from existing clients as well as business from new customers. We also benefited from the acquisition of the Gander Group Assets in August 2024.
For the SLS segment, the increase in sales was due to the acquisition of the Gander Group Assets in August 2024.
For the SLS segment, the increase in sales was primarily attributable to the inclusion of a full year of consolidated operations including the Gander Group Assets, which were acquired in August 2024 and therefore only partially reflected in our results of operations for the prior year period.
The increase in the dollar amount of t otal gross profit was primarily due to the acquisition of the Gander Group Assets in August 2024.
The increase in the dollar amount of total gross profit was primarily attributable to the inclusion of a full year of consolidated operations including the Gander Group Assets, which were acquired in August 2024 and therefore only partially reflected in our operations for the prior year period.
Our other income, net was approximately $38 thousand for the year ended December 31, 2024 , compared to approximately $186 thousand for the year ended December 31, 2023 . T his change was primarily due to an increase in noncash accretion expense in 2024 relative to 2023, related to certain installment payment liabilities.
Other Income Other income consists of other income (expense), interest income, and realized gain on investments. Our other income was approximately $937 thousand for the year ended December 31, 2025 , compared to other income of approximately $38 thousand for the year ended December 31, 2024 .
As a result, we are permitted to, and intend to, rely on exemptions from certain disclosure requirements.
As of December 31, 2025, we had approximately $49.3 million of total assets with approximately $30.5 million of total stockholders’ equity. Emerging Growth Company and Smaller Reporting Company We qualify as an “emerging growth company” under the JOBS Act. As a result, we are permitted to, and intend to, rely on exemptions from certain disclosure requirements.
Removed
Additionally, we benefited from the acquisition of the assets of T R Miller in June 2023, and the Gander Group Assets in August 2024, respectively . As of December 31, 2024, we had approximately $55.1 million of total assets with approximately $31.6 million of total stockholders’ equity.
Added
Those program customers are geared towards longer-lasting relationships that helps secure recurring revenue well into the future. Since February 2025 and as of the date of this report, the United States has implemented and repeatedly amended additional country-specific tariffs on goods imported from other countries, with significant changes affecting imports from China.
Removed
Recent Developments Lease Agreement On January 10, 2025, the Company entered into a seven-year lease agreement for new office space in North Quincy, Massachusetts. The Company’s existing lease agreement for its office space expires May 31, 2025.
Added
In May 2025, the United States temporarily reduced previously-imposed additional “reciprocal” and fentanyl-related tariffs at a combined rate of 145% on most goods imported from China to a combined rate of 30%, and in August 2025 extended this temporary combined rate on Chinese imports until November 10, 2025.
Removed
The new lease term begins on June 1, 2025 and expires on May 31, 2032 with an option to extend the lease an additional five years.
Added
In November 2025, these tariffs were further reduced to a combined rate of approximately 20%. For low-value items of Chinese or Hong Kong origin valued at or below $800 and moving via the international postal stream, duty-free treatment ended May 2, 2025.
Removed
The lease contains an initial base rent of approximately $21 thousand per month with 2.2% - 2.5% annual escalations, plus a percentage of taxes and operating expenses incurred by the lessor in connection with the ownership and management of the property. 43 Emerging Growth Company and Smaller Reporting Company We qualify as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”).
Added
Since May 14, 2025, such postal shipments have generally been subject to either a 54% ad valorem duty or a $100 per-item postal fee. Separately, the United States eliminated duty-free de minimis treatment for imports from all other countries effective August 29, 2025.
Removed
For the SLS segment, the increase in the dollar amount of operating expenses was due to the acquisition of the Gander Group Assets in August 2024. Other Income Other income consists of other income, interest income, change in fair value of contingent earn-out liability, and realized gain on investments.
Added
In addition, the United States has introduced and adjusted reciprocal tariff rates on imports from numerous trading partners. Since August 7, 2025, additional “reciprocal” tariff rates applicable to most goods from covered countries vary by country between approximately 10% and 41%, with many commonly in the 15%-40% range after later adjustments and exemptions.
Removed
As of December 31, 2024 and 2023, the Company recorded an income tax provision comprised of state income taxes and a valuation allowance against its net deferred tax assets. The Company recorded a valuation allowance due to a cumulative loss over a three-year period.
Added
These additional country-specific tariffs were effected alongside a general increase in separate U.S. tariffs against imports based on product type or sector, as well as, in certain cases, country of origin, in some cases modified by exemptions or other adjustments. 44 On February 20, 2026, the U.S. Supreme Court held in Learning Resources, Inc. v.
Removed
Debt On November 22, 2021, we entered into the Revolving Demand Line of Credit Loan Agreement, dated as of November 22, 2021 (the “ Initial Loan Agreement”), between the Company and Salem Five Cents Savings Bank, a Massachusetts savings bank (“Salem Five Cents”), for a revolving line of credit (the “ Revolving Line of Credit”), consisting of aggregate loans of up to $7.0 million, evidenced by the Revolving Demand Line of Credit Note, dated November 22, 2021, by the Company in favor of Salem Five Cents (the “ Demand Note ”) .
Added
Trump that the International Emergency Economic Powers Act (“IEEPA”) does not authorize the President to impose tariffs, invalidating both the reciprocal tariffs and the fentanyl-related tariffs on Chinese imports described above as well as all other tariffs imposed under IEEPA.
Removed
The Revolving Line of Credit and the Demand Note were secured by a first priority security interest in all assets and property of the Company, as provided in the Security Agreement, dated November 22, 2021, between Salem Five Cents and the Company (the “ Security Agreement”), and as described below.
Added
In response, the President immediately revoked the IEEPA tariff orders and, invoking Section 122 of the Trade Act of 1974, imposed a temporary 10% global import surcharge on most imports effective February 24, 2026, for 150 days, which the President subsequently announced would be increased to 15%.
Removed
Under a Commercial Loan Modification Agreement, dated as of February 12, 2024, between Salem Five Cents and the Company (the “Loan Modification Agreement”), certain terms of the Initial Loan Agreement were modified as of February 12, 2024, as described below (as amended, the “Loan Agreement” and together with the Security Agreement and the Demand Note, the “Loan Documents” ).
Added
As of the date of this report, the Trump Administration has taken no actions to facilitate refunds of its former IEEPA tariffs, and we cannot predict whether we will be able to collect any refunds of our payments of such tariffs.
Removed
The amount available under the Revolving Line of Credit was the lesser of $7.0 million or the sum of (x) eighty percent (80.0%) of the then-outstanding amount of Eligible Accounts (as defined below), plus (y) fifty percent (50.0%) of Eligible Inventory (as defined below); minus one hundred (100.0%) percent of the aggregate amount then drawn under the Revolving Line of Credit for the account of the Company.
Added
We have historically imported many of the goods or components used in our promotional products business from China in particular and to some extent from other countries. As a result, we have had to increase prices for certain products, and may be required to raise those prices further, which may result in the loss of customers.
Removed
In addition, advances based upon Eligible Inventory were required to be capped at all times at $2.0 million.
Added
If prices cannot be increased, it may result in a negative impact on our gross margin.
Removed
“Eligible Accounts” was defined as accounts that meet a number of requirements, including, unless otherwise approved by Salem Five Cents, being less than 90 days from the date of invoice not subject to any prior assignment, claim, lien, or security interest, not subject to set-off, credit, allowance or adjustment by the account debtor, arose in the ordinary course of the Company’s business, not an intercompany obligation, not subject to notice of bankruptcy or insolvency of the account debtor, not owed by an account debtor whose principal place of business was outside the United States, not a government account, not be evidenced by promissory notes, and not one of the accounts owed by an account debtor 25% or more of whose accounts were 90 or more days past invoice date; or otherwise not deemed acceptable by Salem Five Cents in accordance with its normal credit policies.
Added
We have also attempted to shift away from Chinese suppliers in particular, and other foreign suppliers in general, and may seek to increase this shift due to U.S. tariffs or other aspects of U.S. trade policy, in an effort to reduce the effect of tariff increases on our product prices.
Removed
“Eligible Inventory” was defined as all finished goods, work in progress and raw materials and component parts of inventory owned by the Company.
Added
However, due to the limited availability of competitive pricing from suppliers whose goods are not currently subject to tariffs or that are subject to relatively lower tariffs, and the possibility that some of the current or planned additional U.S. tariffs may increase, decrease, or become subject to exceptions or suspensions, with little or no prior notice, our ability to cost-effectively mitigate some of the effects of current and future scheduled U.S. tariffs may be significantly limited.
Removed
Eligible Inventory did not include any inventory held on consignment or not otherwise owned by the Company; any inventory which had been returned by a customer or was damaged or subject to any legal encumbrances other than a first priority security interest held by the Company; any inventory which was not in the possession of the Company; any inventory which was held by the Company on property leased by the Company unless Salem Five Cents had received a Landlord’s Waiver and Consent from the lessor of such property satisfactory to Salem Five Cents; any inventory which was not located within the United States; any inventory which Salem Five Cents reasonably deemed to be obsolete or non-marketable; and any inventory not subject to a first priority fully perfected lien held by Salem Five Cents. 48 The Revolving Line of Credit was subject to interest at the prime rate plus 0.5% per annum.
Added
These trends and uncertainties may result in additional costs and disruption to our operations, which may have a significant negative effect on the Company’s sales and gross margins in future periods.
Removed
The Company was required to repay interest on the Revolving Line of Credit proceeds on a monthly basis. The Revolving Line of Credit continued indefinitely, subject to Salem Five Cents’ demand rights and the Company’s ongoing affirmative and other obligations under the Loan Documents, as summarized below.

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