Overview

We are an outsourced marketing solutions provider that sells branded products to customers. We purchase products and branding through various third-party manufacturers and decorators and resell the finished goods to customers.

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.

We earn the majority of our revenue from the sale of unique, quality promotional products for a wide variety of industries primarily to support marketing efforts. We also derive revenues from service fees from loyalty programs, event management, print services, fulfillment services, and technology services.

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.

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. Additionally, we benefited from the acquisition of the assets of TR Miller in June 2023, and the Gander Group Assets in August 2024.

As of December 31, 2024, we had approximately $55.1 million of total assets with approximately $31.6 million of total stockholders’ equity.

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. 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. 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.

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”). As a result, we are permitted to, and intend to, rely on exemptions from certain disclosure requirements. 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;
• 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;
• 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, or (iv) the date on which we have issued more than $1.0 billion in non-convertible debt during the preceding three year period.

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.

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.

,,Years 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,)%,

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. 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 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 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. For the SLS segment, the increase in sales was due to the acquisition of the Gander Group Assets in August 2024.

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. 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. Cost of sales 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. 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.

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. 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. 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. The increase in the dollar amount of total gross profit was primarily due to the acquisition of the Gander Group Assets in August 2024. 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 SLS segment, the increase in the dollar amount of gross profit was due to the acquisition of the Gander Group Assets in August 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 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 SLS segment was 20.8% for the year ended December 31, 2024.

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. 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. 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. 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. 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 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. 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. This change was primarily due to an increase in noncash accretion expense in 2024 relative to 2023, related to certain installment payment liabilities. Our interest income was approximately $305 thousand for the year ended December 31, 2024, compare