Stran & Company, Inc.

Previous wording

The majority of our revenue is derived from program business, although only a small percentage of our customers are considered programmatic. For the three and six months ended June 30, 2025, program clients accounted for 80.2% and 81.8% of total revenue, respectively. For the three and six months ended June 30, 2024, program clients accounted for 81.3% and 82.7% of total revenue, respectively. Fewer than 350 of our more than 2,000 active customers are considered to be program clients. Our active customers are any organizations, businesses, or divisions of a parent organization which have purchased directly or indirectly from us within the last two years, and include organizations that have bought from other organizations for which Stran acts as an established sub-contractor. We define transactional customers as customers that place an order with us and do not have an agreement with us covering ongoing branding requirements. We define program clients as clients that have a contractual obligation for specific ongoing branding needs. Program offerings include ongoing inventory, use of technology platform, warehousing, creative services, and additional client support. Those program customers are geared towards longer-lasting relationships that helps secure recurring revenue well into the future.

Current wording

The majority of our revenue is derived from program business, although only a small percentage of our customers are considered programmatic. For the three and nine months ended September 30, 2025, program clients accounted for 78% and 80% of total revenue, respectively. For the three and nine months ended September 30, 2024, program clients accounted for 83.2% and 83.6% of total revenue, respectively. Fewer than 350 of our more than 2,000 active customers are considered to be program clients. Our active customers are any organizations, businesses, or divisions of a parent organization which have purchased directly or indirectly from us within the last two years, and include organizations that have bought from other organizations for which Stran acts as an established sub-contractor. We define transactional customers as customers that place an order with us and do not have an agreement with us covering ongoing branding requirements. We define program clients as clients that have a contractual obligation for specific ongoing branding needs. Program offerings include ongoing inventory, use of technology platform, warehousing, creative services, and additional client support. Those program customers are geared towards longer-lasting relationships that helps secure recurring revenue well into the future.

Previous wording

Since February 2025 and as of the date of this report, the United States has implemented and then amended additional tariffs on goods imported from other countries a number of times, particularly with respect to tariffs on imports from China. As of July 31, 2025, the United States had announced that the previously-imposed additional tariffs of up to 145% on most goods imported from China would remain reduced at a combined rate of 30% for a 90 day period effective May 14, 2025. Unless further action is taken, these tariffs are scheduled to increase to a combined rate of 54% effective August 13, 2025. In addition, previously-imposed tariffs on certain low-value items imported from China are unchanged at either a temporary 90-day rate of 54%, and, unless further action is taken, are scheduled to revert to 120% effective August 13, 2025, or an alternative $100 flat rate. In addition, duty-free de minimis treatment for all other countries is scheduled to end effective August 29, 2025. Reciprocal tariff rates on most goods imported from other countries range from 10% to 41%. 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. 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. 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. 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. As a result, investors should not assume that any trends reflected in our past results, including those that may be indicated below for the three and six months ended June 30, 2025 and 2024, respectively, may be expected to continue to occur in future periods.

Current wording

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. 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. 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. 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. As a result, investors should not assume that any trends reflected in our past results, including those that may be indicated below for the three and nine months ended September 30, 2025 and 2024, respectively, may be expected to continue to occur in future periods.

Previous wording

Our sales for the three months ended June 30, 2025 increased 95.2% compared to sales for the three months ended June 30, 2024, and increased 72.5% for the six months ended June 30, 2025 compared to the six months ended June 30, 2024 which we believe was due to higher spending from existing clients as well as business from new customers. We also 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.

Current wording

Our salesfor the three months ended September 30, 2025 increased 29.0%compared to salesfor the three months ended September 30, 2024, and increased 56.7%for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 which we believe was due to higher spending from existing clients as well as business from new customers. We also 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.

Previous wording

As of June 30, 2025, we had approximately $61.2 million of total assets with approximately $31.8 million of total stockholders’ equity.

Current wording

As of September 30, 2025, we had approximately $50.3 million of total assets with approximately $30.2 million of total stockholders’ equity.

Previous wording

Our total sales increased 95.2% to approximately $32.6 million for the three months ended June 30, 2025, from approximately $16.7 million for the three months ended June 30, 2024. Sales by our Stran segment increased to approximately $21.8 million for the three months ended June 30, 2025 from approximately $16.7 million for the three months ended June 30, 2024. Sales by our SLS segment (which consists of the former Gander Group business) increased to approximately $10.8 million for the three months ended June 30, 2025 from $0 for the three months ended June 30, 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 SLS segment, the increase in sales was due to the acquisition of the Gander Group Assets in August 2024.

Current wording

Our total sales increased 29.0% to approximately$26.0 millionfor the three months ended September 30, 2025, from approximately$20.1 millionfor the three months ended September 30, 2024. Sales by our Stran segment increasedto approximately $17.6 million for the three months ended September 30, 2025 from approximately $16.7 million for the three months ended September 30, 2024. Sales by our SLS segment (which consists of the former Gander Group business) increased to approximately $8.3 million for the three months ended September 30, 2025 from $3.5 million for the three months ended September 30, 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 SLS segment, the increase in sales was due to the acquisition of the Gander Group Assets in August 2024.

Previous wording

Our total cost of sales increased 102.3% to approximately $22.7 million for the three months ended June 30, 2025, from approximately $11.2 million for the three months ended June 30, 2024. As a percentage of sales, total cost of sales increased to 69.7% for the three months ended June 30, 2025 from 67.2% for the three months ended June 30, 2024. Cost of sales by our Stran segment increased to approximately $14.2 million for the three months ended June 30, 2025 from approximately $11.2 million for the three months ended June 30, 2024. Cost of sales by our SLS segment increased to approximately $8.5 million for the three months ended June 30, 2025 from $0 for the three months ended June 30, 2024. The increase in the dollar amount of total cost of sales was primarily due to the increase in sales of 95.2% from period to period. For the Stran segment, the increase was primarily due to the increase in sales described above. For the SLS segment, the increase was due to the acquisition of the Gander Group Assets in August 2024.

Current wording

Our total cost of sales increased 33.2%to approximately$18.9 millionfor the three months ended September 30, 2025, from approximately$14.2 millionfor the three months ended September 30, 2024. As a percentage of sales, total cost of sales increased to 72.8% for the three months ended September 30, 2025 from 70.5% for the three months ended September 30, 2024. Cost of sales by our Stran segment increased to approximately $12.1 million for the three months ended September 30, 2025 from approximately $11.4 million for the three months ended September 30, 2024. Cost of sales by our SLS segment increased to approximately $6.8 million for the three months ended September 30, 2025 from approximately $2.8 million for the three months ended September 30, 2024. The increase in the dollar amount of total cost of sales was primarily due to the increase in sales of 29.0% from period to period. For the Stran segment, the increase was primarily due to the increase in sales described above. For the SLS segment, the increase was due to the acquisition of the Gander Group Assets in August 2024.

Previous wording

Gross profit consists of sales less total cost of sales. Our total gross profit increased 80.5% to approximately $9.9 million, or 30.3% of sales, for the three months ended June 30, 2025, from approximately $5.5 million, or 32.8% of sales, for the three months ended June 30, 2024. Gross profit of our Stran segment increased to approximately $7.6 million for the three months ended June 30, 2025 from approximately $5.5 million for the three months ended June 30, 2024. Gross profit of our SLS segment increased to approximately $2.3 million for the three months ended June 30, 2025 from $0 for the three months ended June 30, 2024. 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 increase in the dollar amount of gross profit was due to an increase in sales of approximately $5.1 million for the reasons described above, which was partially offset by an increase of cost of sales of approximately $2.9 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.

Current wording

Gross profit consists of sales less total cost of sales. Our total gross profit increased 18.8%to approximately$7.1 million, or 27.2%of sales, for the three months ended September 30, 2025, from approximately$6.0 million, or 29.5%of sales, for the three months ended September 30, 2024. Gross profit of our Stran segment increased to approxima tely $5.5 million for the three months ended September 30, 2025 from approximately $5.3 million for the three months ended September 30, 2024. Gross profit of our SLS segment increased to approximately $1.6 million for the three months ended September 30, 2025 from approximately $0.7 million for the three months ended September 30, 2024. The increase in the dollar amount of total gross profitwas primarily due to the acquisition of the Gander Group Assets in August 2024. For the Stran segment, the increasein the dollar amount of gross profit was due to an increase in sales of approximately $1.0 million for the reasons described above, which was partially offset by an increase of cost of sales of approximately$0.8 million for the reasons described above. For the SLS segment, the increase in the dollar amountof gross profitwas due to the acquisition of the Gander Group Assets in August 2024.

Previous wording

Gross profit margin is defined as gross profit as a percentage of sales. The decrease in total gross profit margin to 30.3% for the three months ended June 30, 2025 from 32.8% for the three months ended June 30, 2024 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 increased to 34.9% for the three months ended June 30, 2025 from 32.8% for the three months ended June 30, 2024. The gross profit margin for the SLS segment was 21.0% for the three months ended June 30, 2025.

Current wording

Gross profit margin is defined as gross profit as a percentage of sales. The decrease in total gross profit margin to 27.2% for the three months ended September 30, 2025 from 29.5% for the three months ended September 30, 2024 was primarily due to the acquisition of the Gander Group Assets in August 2024, which operate at a lower gross margin than the Stran segment. The gross profit margin for the Stran segment decreased to 31.2% for the three months ended September 30, 2025 from 31.8% for the three months ended September 30, 2024. The gross profit margin for the SLS segment decreased to 18.7% for the three months ended September 30, 2025 from 18.9% for the three months ended September 30, 2024.

Previous wording

Operating expenses consist of general and administrative expenses. Our total operating expenses increased 44.1% to approximately $9.5 million for the three months ended June 30, 2025, from approximately $6.6 million for the three months ended June 30, 2024. Operating expenses of our Stran segment increased to approximately $7.4 million for the three months ended June 30, 2025 from approximately $6.6 million for the three months ended June 30, 2024. Operating expenses of our SLS segment increased to approximately $2.1 million for the three months ended June 30, 2025 from $0 for the three months ended June 30, 2024. As a percentage of sales, operating expenses decreased to 29.1% for the three months ended June 30, 2025, from 39.4% for the three months ended June 30, 2024. As a percentage of sales, operating expenses of our Stran segment decreased to 34.1% for the three months ended June 30, 2025 from 39.4% for the three months ended June 30, 2024. As a percentage of sales, operating expenses of our SLS segment were 19.0% for the three months ended June 30, 2025. For the Stran segment, the increase in the dollar amount of operating expenses was primarily due to variable costs incurred due to our higher sales and expenses related to Stran’s NetSuite enterprise resource planning system implementation, and legal and accounting expenses. For the SLS segment, the increase in the dollar amount of operating expenses was due to the acquisition of the Gander Group Assets in 2024.

Current wording

Operating expenses consist of general and administrative expenses. Our total operating expenses increased 8.8%to approximately$8.9 millionfor the three months ended September 30, 2025, from approximately$8.1 millionfor the three months ended September 30, 2024. Operating expenses of our Stran segment decreased to approximately $6.9 million for the three months ended September 30, 2025 from approximately $7.3 million for the three months ended September 30, 2024. Operating expenses of our SLS segment increased to approximately $2.0 million for the three months ended September 30, 2025 from approximately $0.8 million for the three months ended September 30, 2024. As a percentage of sales, operating expenses decreased to 34.1% for the three months ended September 30, 2025, from 40.4% for the three months ended September 30, 2024. As a percentage of sales, operating expenses of our Stran segment decreased to 39.0% for the three months ended September 30, 2025 from 43.9% for the three months ended September 30, 2024. As a percentage of sales, operating expenses of our SLS segment increased to 23.6% for the three months ended September 30, 2025 from 23.4% for the three months ended September 30, 2024. For the Stran segment, the decrease in the dollar amount of operating expenses was primarily due to lower variable costs incurred associated with the timing and payment on commissionable sales, expenses related to Stran’s NetSuite enterprise resource planning system implementation, 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 2024.

Previous wording

Other income consists of other income, interest income, and realized gain on investments. Our other income was approximately$280 thousand for the six months ended June 30, 2025, compared to approximately$16 thousand for the six months ended June 30, 2024. This change was primarily related to cost recoveries from prior periods for estimated shipping charges. Our interest income was approximately$119 thousand for the six months ended June 30, 2025, compared to approximately$175 thousandfor the six months ended June 30, 2024. This change was primarily due to a decrease in interest generated from lower investments compared to the same period in the prior year. Our realized gain on investments was approximately $67 thousand for the six months ended June 30, 2025, remaining relatively constant as compared to approximately$73 thousand for the six months ended June 30, 2024.

Current wording

Other income consists of other income (expense), interest income, and realized gain on investments. Our other income was approximately$304 thousandfor the three months ended September 30, 2025, compared to other expense of approximately$22 thousand for the three months ended September 30, 2024. This change was primarily related to the release of a 2023 receivable reserve deemed to no longer be required. Our interest income was approximately$87 thousandfor the three months ended September 30, 2025, compared to approximately$64 thousandfor the three months ended September 30, 2024. This change was primarily due to higher interest earned resulting from slightly higher average program deposit balances compared to the same period in the prior year. Our realized gain on investments was $79 thousand for the three months ended September 30, 2025, compared to approximately$103 thousand for the three months ended September 30, 2024. The decrease in investments reflects our utilization of cash to support the Company’s operating activities.

Previous wording

Income tax expense for the three months ended June 30, 2025 was approximately $114 thousand compared to income tax expense of approximately $3 thousand for the three months ended June 30, 2024. Income tax expense for the three months ended June 30, 2025 accounted for 15.1% of income before income taxes of approximately $0.8 million. Income tax expense for the three months ended June 30, 2024 accounted for 0.3% of loss before income taxes of approximately $1.0 million. As of June 30, 2025 and 2024, 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 full valuation allowance in 2022, the Company still maintains a cumulative loss.

Current wording

Income tax benefit for the three months ended September 30, 2025 was approximately $72 thousand compared to income tax benefit of approximately $1 thousand for the three months ended September 30, 2024. Income tax benefit for the three months ended September 30, 2025 accounted for 5.5% of loss before income taxes of approximately $1.3 million. Income tax benefit for the three months ended September 30, 2024 accounted for 0.1% of loss before income taxes of approximately $2.0 million.

Previous wording

The change in the effective tax rate from the comparison of 2025 and 2024 as noted above primarily relates to the Company’s estimated earnings and a partial release of the valuation allowance from period to period. The Company recorded a full valuation allowance associated with its cumulative losses.

Current wording

The change in the effective tax rate from the comparison of 2025 and 2024 as noted above primarily relates to our estimated earnings and a partial release of the valuation allowance on our gross deferred tax assets less deferred tax liabilities from period to period.

Previous wording

Our net income for the three months ended June 30, 2025 was approximately $0.6 million, compared to net loss of approximately $(1.0) million for the three months ended June 30, 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.

Current wording

Our net loss for the three months ended September 30, 2025 was approximately $1.2 million, compared to net loss of approximately $2.0 million for the three months ended September 30, 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.

Previous wording

The following table sets forth key components of our results of operations during the six months ended June 30, 2025 and 2024 both in dollars and as a percentage of our sales.

Current wording

The following table sets forth key components of our results of operations during the nine months ended September 30, 2025 and 2024 both in dollars and as a percentage of our sales.

Previous wording

Our total sales increased 72.5% to approximately$61.3 millionfor the six months ended June 30, 2025, from approximately$35.5 millionfor the six months ended June 30, 2024. Sales by our Stran segment increasedto approximately $42.7 million for the six months ended June 30, 2025 from approximately $35.5 million for the six months ended June 30, 2024. Sales by our SLS segment (which consists of the former Gander Group business) increased to approximately $18.6 million for the six months ended June 30, 2025 from $0 for the six months ended June 30, 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 SLS segment, the increase in sales was due to the acquisition of the Gander Group Assets in August 2024

Current wording

Our total sales increased 56.7% to approximately$87.3 millionfor the nine months ended September 30, 2025, from approximately$55.7 millionfor the nine months ended September 30, 2024. Sales by our Stran segment increasedto approximately $60.3 million for the nine months ended September 30, 2025 from approximately $52.2 million for the nine months ended September 30, 2024. Sales by our SLS segment (which consists of the former Gander Group business) increased to approximately $26.9 million for the nine months ended September 30, 2025 from approximately $3.5 million for the nine months ended September 30, 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 SLS segment, the increase in sales was due to the acquisition of the Gander Group Assets in August 2024.

Previous wording

Our total cost of sales increased 75.6% to approximately $42.9 million for the six months ended June 30, 2025, from approximately $24.4 million for the six months ended June 30, 2024. As a percentage of sales, total cost of sales increased to 70.0% for the six months ended June 30, 2025 from 68.8% for the six months ended June 30, 2024. Cost of sales by our Stran segment increased to approximately $28.3 million for the six months ended June 30, 2025 from approximately $24.4 million for the six months ended June 30, 2024. Cost of sales by our SLS segment increased to approximately $14.6 million for the six months ended June 30, 2025 from $0 for the six months ended June 30, 2024. The increase in the dollar amount of total cost of sales was primarily due to the increase in sales of 72.5% from period to period. For the Stran segment, the increase was primarily due to the increase in sales described above. For the SLS segment, the increase was due to the acquisition of the Gander Group Assets in August 2024.

Current wording

Our total cost of sales increased 60.0% to approximately $61.8 million for the nine months ended September 30, 2025, from approximately $38.6 million for the nine months ended September 30, 2024. As a percentage of sales, total cost of sales increased to 70.9% for the nine months ended September 30, 2025 from 69.4% for the nine months ended September 30, 2024. Cost of sales by our Stran segment increased to approximately $40.4 million for the nine months ended September 30, 2025 from approximately $35.8 million for the nine months ended September 30, 2024. Cost of sales by our SLS segment increased to approximately $21.4 million for the nine months ended September 30, 2025 from approximately $2.8 million for the nine months ended September 30, 2024. The increase in the dollar amount of total cost of sales was primarily due to the increase in sales of 56.7% from period to period. For the Stran segment, the increase was primarily due to the increase in sales described above. For the SLS segment, the increase was due to the acquisition of the Gander Group Assets in August 2024.

Previous wording

Gross profit consists of sales less total cost of sales. Our total gross profit increased 65.6%to approximately$18.4 million, or 30.0%of sales, for the six months ended June 30, 2025, from approximately $11.1 million, or 31.2% of sales, for the six months ended June 30, 2024. Gross profit of our Stran segment increased to approximately $14.4 million for the six months ended June 30, 2025 from approximately $11.1 million for the six months ended June 30, 2024. Gross profit of our SLS segment increased to approximately $4.0 million for the six months ended June 30, 2025 from $0 for the six months ended June 30, 2024. 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 increase in the dollar amount of gross profit of approximately $7.2 million was due to an increase in sales for the reasons described above, which was partially offset by an increase of cost of sales of approximately $3.9 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.

Current wording

Gross profit consists of sales less total cost of sales. Our total gross profit increased 49.3%to approximately$25.4 million, or 29.1%of sales, for the nine months ended September 30, 2025, from approximately $17.0 million, or 30.6% of sales, for the nine months ended September 30, 2024. Gross profit of our Stran segment increased to approximately $19.9 million for the nine months ended September 30, 2025 from approximately $16.4 million for the nine months ended September 30, 2024. Gross profit of our SLS segment increased to approximately $5.5 million for the nine months ended September 30, 2025 from approximately $0.7 million for the nine months ended September 30, 2024. 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 increase in the dollar amount of gross profit of approximately $3.5 million was due to an increase in sales of approximately $8.2 million for the reasons described above, which was partially offset by an increase of cost of sales of approximately $4.6 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.

Previous wording

Gross profit margin is defined as gross profit as a percentage of sales. Thedecreasein total gross profit margin to 30.0% for the six months ended June 30, 2025 from 31.2% for the six months ended June 30, 2024 was primarily due to the acquisition of the Gander Group business in August 2024, which operates at a lower gross margin than the Stran segment. The gross profit margin for the Stran segment increased to 33.7% for the six months ended June 30, 2025 from 31.2% for the six months ended June 30, 2024. The gross profit margin for the SLS segment was 21.4% for the six months ended June 30, 2025.

Current wording

Gross profit margin is defined as gross profit as a percentage of sales. Thedecreasein total gross profit margin to 29.1% for the nine months ended September 30, 2025 from 30.6% for the nine months ended September 30, 2024 was primarily due to the acquisition of the Gander Group business in August 2024, which operates at a lower gross margin than the Stran segment. The gross profit margin for the Stran segment increased to 33.0% for the nine months ended September 30, 2025 from 31.4% for the nine months ended September 30, 2024. The gross profit margin for the SLS segment increased to 20.5% for the nine months ended September 30, 2025 from 18.9% for the nine months ended September 30, 2024. These increases in gross profit margin were attributable to more efficient buying behaviors.

Previous wording

Operating expenses consist of general and administrative expenses. Our total operating expenses increased 43.8%to approximately$18.5 million for the six months ended June 30, 2025, from approximately $12.9 million for the six months ended June 30, 2024. Operating expenses ofour Stran segment increased to approximately $14.3 million for the six months ended June 30, 2025 from approximately $12.9 million for the six months ended June 30, 2024. Operating expenses of our SLS segment increased to approximately $4.2 million for the six months ended June 30, 2025 from $0 for the six months ended June 30, 2024. As a percentage of sales, operating expenses decreased to 30.2%for the six months ended June 30, 2025, from 36.2% forthe six months ended June 30, 2024. As a percentage of sales, operating expenses of our Stran segment decreased to 33.5%for the six months ended June 30, 2025 from 36.2% for the six months ended June 30, 2024. As a percentage of sales, operating expenses of our SLS segment were 22.6% for the six months ended June 30, 2025. For the Stran segment, the increase inthe dollar amount of operating expenses was primarily due to variable costs incurred due to our higher sales, expenses related to Stran’s NetSuite enterprise resource planning system implementation, 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 2024.

Current wording

Operating expenses consist of general and administrative expenses. Our total operating expenses increased 30.3%to approximately$27.3 millionfor the nine months ended September 30, 2025, from approximately $21.0 millionfor the nine months ended September 30, 2024. Operating expenses ofour Stran segment increased to approximately $21.2 million for the nine months ended September 30, 2025 from approximately $20.2 million for the nine months ended September 30, 2024. Operating expenses of our SLS segment increased to approximately $6.2 million for the nine months ended September 30, 2025 from approximately $0.8 million for the nine months ended September 30, 2024. As a percentage of sales, operating expenses decreased to 31.3% for the nine months ended September 30, 2025, from 37.7%for the nine months ended September 30, 2024. As a percentage of sales, operating expenses of our Stran segment decreased to 35.1% for the nine months ended September 30, 2025 from 38.7% for the nine months ended September 30, 2024. As a percentage of sales, operating expenses of our SLS segment decreased to 22.9% for the nine months ended September 30, 2025 from 23.4% for the nine months ended September 30, 2024. For the Stran segment, the increase inthe dollar amount of operating expenses was primarily due to expenses related to Stran’s NetSuite enterprise resource planning system implementation, in addition to 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 2024.

Previous wording

Other income consists of other income, interest income, and realized gain on investments. Our other income was approximately $285 thousand for the three months ended June 30, 2025, compared to approximately $1 thousand for the three months ended June 30, 2024. This change was primarily related to cost recoveries from prior periods for estimated shipping charges. Our interest income was approximately $77 thousand for the three months ended June 30, 2025, compared to approximately $82 thousand for the three months ended June 30, 2024. This change was primarily due to lower interest earned as a result of lower investments compared to the same period in the prior year. Our realized gain on investments was $0 for the three months ended June 30, 2025, compared to approximately $3 thousand for the three months ended June 30, 2024. The decrease in investments reflects our utilization of cash to support the Company’s operating activities.

Current wording

Other income consists of other income, interest income, and realized gain on investments. Our other income was approximately$584 thousand for the nine months ended September 30, 2025, compared to other expense of approximately$6 thousand for the nine months ended September 30, 2024. This change was primarily related to the release of a 2023 receivable reserve deemed to no longer be required and cost recoveries from prior periods for estimated shipping charges. Our interest income was approximately$206 thousand for the nine months ended September 30, 2025, compared to approximately$239 thousandfor the nine months ended September 30, 2024. This change was primarily due to a decrease in interest generated from lower investments compared to the same period in the prior year. Our realized gain on investments was approximately $146 thousand for the nine months ended September 30, 2025, compared to approximately$176 thousand for the nine months ended September 30, 2024. The decrease in investments reflects our utilization of cash to support the Company’s operating activities.

Previous wording

Income tax expense for the six months ended June 30, 2025 was approximately $76 thousand compared to income tax expense of approximately $3 thousand for the six months ended June 30, 2024. Income tax expense for the six months ended June 30, 2025 accounted for 23.3% of income before income taxes of approximately $0.3 million. Income tax expense for the six months ended June 30, 2024 accounted for 0.2% of loss before income taxes of approximately $1.5 million. As of June 30, 2025 and 2024, the Company recorded an income tax provision based upon its current estimate of taxable income forecasted for 2025. The Company recorded a full valuation allowance in 2022, the Company still maintains a cumulative loss.

Current wording

Income tax expense for the nine months ended September 30, 2025 was approximately $4 thousand compared to income tax expense of approximately $2 thousand for the nine months ended September 30, 2024. Income tax expense for the nine months ended September 30, 2025 accounted for 0.4% of loss before income taxes of approximately $1.0 million. Income tax benefit for the nine months ended September 30, 2024 accounted for 0.1% of loss before income taxes of approximately $3.6 million.

Previous wording

The change in the effective tax rate from the comparison of 2025 and 2024 as noted above primarily relates to the Company’s estimated earnings and a partial release of the valuation allowance from period to period. The Company recorded a full valuation allowance associated with its cumulative losses.

Current wording

The change in the effective tax rate from the comparison of 2025 and 2024 as noted above primarily relates to our estimated earnings and a partial release of the valuation allowance on our gross deferred tax assets less deferred tax liabilities from period to period.

Previous wording

Our net income for the six months ended June 30, 2025 was approximately $0.3 million, compared to net loss of approximately $(1.5) million for the six months ended June 30, 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.

Current wording

Our net loss for the nine months ended September 30, 2025 was approximately $1.0 million, compared to net loss of approximately $3.6 million for the nine months ended September 30, 2024. This change was primarily due to an increase in gross profit, offset by an increase in operating expenses, for the reasons described above.

Previous wording

As of June 30, 2025, we had cash and cash equivalents of approximately$13.1 million and investments of approximately$5.0 million. We have financed our operations primarily through cash generated from our initial public offering of common stock and warrants to purchase common stock in November 2021, our private placement of common stock and warrants to purchase common stock in December 2021, and operations.

Current wording

As of September 30, 2025, we had cash and cash equivalents of approximately$6.7 million and investments of approximately$5.1 million. We have financed our operations primarily through cash generated from our initial public offering of common stock and warrants to purchase common stock in November 2021, our private placement of common stock and warrants to purchase common stock in December 2021, and operations.

Previous wording

The following table provides detailed information about our net cash flows for the six months ended June 30, 2025 and 2024 (in thousands).

Current wording

The following table provides detailed information about our net cash flows for the nine months ended September 30, 2025 and 2024 (in thousands).

Previous wording

Net cash provided by operating activities was approximately $0.5 million for the six months ended June 30, 2025, as compared to net cash provided by operating activities of approximately $4.2 million for the six months ended June 30, 2024. The change was primarily due to an increase in accounts receivable and inventory due to growth in sales, offset by higher earnings, an increase in accounts payable and accrued expenses, and our rewards program liability.

Current wording

Net cash used in operating activities was approximately $4.8 million for the nine months ended September 30, 2025, as compared to net cash provided by operating activities of approximately $1.4 million for the nine months ended September 30, 2024. The change was primarily due to an increase in inventory due to growth in sales, a decrease in accounts payable and accrued expenses, and our rewards program liability, offset by a decrease in accounts receivable.

Previous wording

Net cash provided by investing activities was approximately $3.7 million for the six months ended June 30, 2025, as compared to net cash provided by investing activities of approximately $0.4 million for the six months ended June 30, 2024. The change was primarily due to proceeds from the sale of investments.

Current wording

Net cash provided by investing activities was approximately $3.1 million for the nine months ended September 30, 2025, as compared to net cash provided by investing activities of approximately $1.5 million for the nine months ended September 30, 2024. The change was primarily due to the absence of business acquisition outlays.

Previous wording

Net cash used in financing activities was approximately $0.5 million for the six months ended June 30, 2025, as compared to approximately $0.8 million for the six months ended June 30, 2024. The decrease in net cash used in financing activities was primarily due to a decrease in installment payment liabilities of approximately $0.6 million, offset by common stock repurchased during the period of approximately $0.1 million and the payment of contingent earn-out liabilities of approximately $0.1 million.

Current wording

Net cash used in financing activities was approximately $1.0 million for the nine months ended September 30, 2025, as compared to approximately $1.0 million for the nine months ended September 30, 2024. 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.*

Previous wording

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 commenced 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.

Current wording

The Company’s prior lease agreement for its office space expired May 31, 2025. On January 10, 2025, the Company entered into a seven-year lease agreement for new office space in North Quincy, Massachusetts. The new lease term commenced 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.

Previous wording

On November 26, 2024, the Company entered into a lease for a 6,500-square foot office space in Irvine, California. The lease commenced on January 1, 2025 and is for a term of 36 months from the commencement date. The lease included an escalation clause with annual increases of approximately 4% increase per year.

Current wording

On November 26, 2024, the Company entered into a lease for a 6,500-square foot office space in Irvine, California. The lease commenced on January 1, 2025 and is for a term of 36 months from the commencement date. The lease contains an initial base rent of approximately $17 thousand per month. The lease included an escalation clause with annual increases of approximately 4% per year.

Previous wording

Lease costs for the three months ended June 30, 2025 and 2024 totaled approximately $0.2 million and $0.2 million, respectively. Lease costs for the six months ended June 30, 2025 and 2024 totaled approximately $0.4 million and $0.3 million, respectively. We anticipate no deficiencies in our ability to make these payments.

Current wording

Lease costs for the three months ended September 30, 2025 and 2024 totaled approximately $0.2 million and $0.2 million, respectively. Lease costs for the nine months ended September 30, 2025 and 2024 totaled approximately $0.6 million and $0.5 million, respectively. We anticipate no deficiencies in our ability to make these payments.

Previous wording

The Company manages reward card programs for clients. Under these programs, the Company receives cash and simultaneously records a liability for the total amount received. These accounts are adjusted on a periodic basis as reward cards are funded or reduced at the direction of the customers. As of June 30, 2025 and December 31, 2024, the Company had net deposits totaling approximately $0.4 million and $0.4 million, respectively.

Current wording

The Company manages reward card programs for clients. Under these programs, the Company receives cash and simultaneously records a liability for the total amount received. These accounts are adjusted on a periodic basis as reward cards are funded or reduced at the direction of the customers. As of September 30, 2025 and December 31, 2024, the Company had net reward card program liabilities totaling approximately $0.6 million and $0.4 million, respectively.