Stran & Company, Inc.
For the period ended Mar 31, 2026. Filed May 12, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 12, 2026
SWAG$1.28-2.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-11-12.
0001213900-25-109289
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-12.
0001213900-26-055112
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 116 previous paragraphs and 72 current paragraphs.
42 unchanged; 21 reworded; 9 added; 48 removed; 5 previous and 0 current paragraphs rearranged.
Tables are not compared: 40 previous and 31 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (9)
Current report
On February 20, 2026, the U.S. Supreme Court held inLearning Resources, Inc. v. 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. 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%. On April 20, 2026, U.S. Customs and Border Protection launched an internet portal to allow importers to process IEEPA duty refund requests (the “CBP Portal”). However, we cannot predict whether we will be able to collect any refunds of our payments of any such tariffs. At March 31, 2026, we have not recorded a tariff refund receivable due to the uncertainty of the amounts and collection of such tariff refunds.
Current report
During the quarter ended March 31, 2026, global crude oil and refined product markets were impacted by heightened geopolitical tensions in the Middle East, including the ongoing conflict involving Iran, Israel, and the United States. These developments have not had a direct material impact on our results. However, we are exposed to volatility in energy and oil markets, which could impact manufacturing, transportation, and packaging costs. Maritime restrictions in the Strait of Hormuz will continue to influence this risk. Significant increases in fuel, utilities, and petroleum-based inputs may materially increase our cost of goods sold and logistics expenses, and these increases may not be fully offset through pricing actions, which could adversely impact our margins and operating results.
Current report
Our sales for the three months ended March 31, 2026 increased 8.9% compared to sales for the three months ended March 31, 2025, which was due to higher spending from existing clients as well as business from new customers.
Current report
Gross profit and gross profit margin by segment and in total were as follows (in thousands):
Current report
The gross profit and gross profit margin for the remainder of 2026 will be largely dependent on revenue levels.
Current report
Other Income (Expense)
Current report
Net Income (Loss)
Current report
Net cash used in financing activities was approximately $43 thousand for the three months ended March 31, 2026, as compared to approximately $40 thousand for the three months ended March 31, 2025. Net cash used in financing activities was primarily related to payments of installment loan liabilities, which remained consistent from period to period.
Current report
We consider an accounting estimate to be critical if: (i) the accounting estimate requires us to make assumptions about matters that were highly uncertain at the time the accounting estimate was made, and (ii) changes in the estimate that are reasonably likely to occur from period to period or use of different estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results of operations. There are items within our unaudited consolidated financial statements that require estimation but are not deemed critical, as defined above.
Removed paragraphs (48)
Previous report
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 report
Gross profit by segment and in total were as follows (in thousands):
Previous report
Other Income
Previous report
Net Loss
Previous report
Comparison of Nine Months Ended September 30, 2025 and 2024
Previous report
Sales
Previous report
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 report
Cost of Sales
Previous report
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 report
Gross Profit
Previous report
Gross profit by segment and in total were as follows (in thousands):
Previous report
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 report
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 report
Operating Expenses
Previous report
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 report
Other Income
Previous report
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 report
Income Tax Provision
Previous report
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 report
Net Loss
Previous report
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 report
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 report
Debt
Previous report
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”). 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. Under a Commercial Loan Modification Agreement, dated as of February 12, 2024, between Salem Five Centsand 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”).
Previous report
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. In addition, advances based upon Eligible Inventory were required to be capped at all times at $2.0 million. “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. “Eligible Inventory” was defined as all finished goods, work in progress and raw materials and component parts of inventory owned by the Company. 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.
Previous report
The Revolving Line of Credit was subject to interest at the prime rate plus 0.5% per annum. 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.
Previous report
The Company could freely draw upon the Revolving Line of Credit subject to Salem Five Cents’ right to demand complete repayment of the Revolving Line of Credit at any time. Late payments were subject to a late payment charge of 5.0%. In the event of failure to repay the loan after Salem Five Cents made demand for full repayment, the interest rate would increase by 10.0%. The Demand Note could be prepaid at any time without penalty. Salem Five Cents could assign the Demand Note without the Company’s consent.
Previous report
Under the Security Agreement and the other Loan Documents, the Company granted Salem Five Cents a first priority security interest in all of its assets, including both assets owned as of the date of the Revolving Line of Credit and afterwards, as collateral for full repayment of the Revolving Line of Credit. Salem Five Cents had the right to file Uniform Commercial Code financing statements with any jurisdiction and with sufficient descriptions of the property to perfect its security interest in all of the Company’s current and future assets. Upon default of the Revolving Line of Credit, Salem Five Cents could accelerate repayment of the Revolving Line of Credit, take possession of the Company’s assets, assign a receiver over the Company’s assets, and enforce other rights as to the Company’s assets as secured creditor. The Company was required to pay for all of Salem Five Cents’ reasonable legal fees and expenses incurred to enforce its rights under the Loan Documents.
Previous report
Under the Initial Loan Agreement, the Company was required to continue its current business of outsourced marketing solutions, and, without the prior consent of Salem Five Cents, the Company could not acquire in whole or in part any other company or business or engage in any other business or open any other locations. The Company was required to use the proceeds of the Revolving Line of Credit only in connection with the general and ordinary operations of its business and for the following purpose: general working capital for accounts receivable and inventory purchases.
Previous report
The Revolving Line of Credit was also subject to ongoing affirmative obligations of the Company, including: Making punctual repayment of the Revolving Line of Credit amount; maintaining proper accounting books and records in accordance with the opinion of LMHS, P.C. or another Certified Public Accountant acceptable to Salem Five Cents; allowing Salem Five Cents to inspect its accounting books and records; furnishing audited, quarterly, monthly and other financial statements to Salem Five Cents; prior to the date of the Loan Modification Agreement, making payment of Salem Five Cents’ reasonable expenses for a field exam in 2022; and following the date of the Loan Modification Agreement, making payment of Lender’s reasonable expenses for a field exam in 2024; allowing Salem Five Cents to communicate with its accountants; maintaining its properties in good repair subject to ordinary wear and tear; obtaining replacement-cost insurance for its property with Salem Five Cents as Mortgagee/Loss Payee; causing management contracts for the Company’s properties to be subordinated to the rights of Salem Five Cents; and allowing no change of property management company without the prior written consent of Salem Five Cents.
Previous report
Prior to the date of the Loan Modification Agreement, the Revolving Line of Credit was further subject to the following financial requirements: (a) Debt Service Coverage Ratio: Cash flow to be calculated on an annual basis of at least 1.20 times EBITDA less cash taxes, distributions, dividends, shareholder withdrawals in any form, and unfinanced CAPEX divided by all scheduled principal payments on all debt plus cash interest payments made on all debt; and (b) Minimum Net Worth thresholds: The Company was required to meet the following minimum net worth thresholds: $2,000,000 at December 31, 2021, $2,750,000 at December 31, 2022, and $3,500,000 at December 31, 2023.
Previous report
Following the date of the Loan Modification Agreement, the Revolving Line of Credit was no longer subject to the Company’s compliance with the Debt Service Coverage Ratio and the Minimum Net Worth terms described above. Instead, the Company was required to meet the following financial requirements:
Previous report
The Company also could not incur any additional indebtedness, secured or unsecured, except in the ordinary course of business; make loans or advances to others or guarantee others’ obligations except for certain ordinary advances to employees or ordinary customer credit terms; make investments; acquire any business; make capital expenditures except in the ordinary course of business; sell any material assets except in the ordinary course of business; or grant any security interests or mortgages in its properties or assets. After the date of the Loan Modification Agreement, any future contingent earn-out obligations were required to be subordinated to the Loan Documents.
Previous report
In connection with the Initial Loan Agreement, on November 22, 2021, the Company, Salem Five Cents and Harte Hanks Response Management/ Boston, Inc. (the “Warehouse Provider”), the lessor of certain warehouse facilities to the Company, executed a Warehouseman’s Waiver in favor of Salem Five Cents (the “Warehouseman’s Waiver”). Under the Warehouseman’s Waiver, the Warehouse Provider disclaimed any interest in the property of the Company stored on the premises (the “Collateral”), and agreed not to interfere with Salem Five Cents’ enforcement of its rights in the Collateral. The Warehouse Provider further agreed to provide notice to Salem Five Cents of any default by the Company of its obligations as to the Warehouse Provider, and to give Salem Five Cents at least 30 days to exercise its rights, which period could be extended by Salem Five Cents up to 60 days upon its payment of the per-diem rental amount. After that period, unless the default had been cured by Salem Five Cents, the Warehouse Provider could dispose of such Collateral as it deemed fit. Upon the receipt of written notice from Salem Five Cents and until such notice was rescinded, the Warehouse Provider was required to honor only instructions from Salem Five Cents with respect to the Collateral, including, any direction from Salem Five Cents to dispose of all or any portion of the Collateral at any time, without any further consent or instruction from Company.
Previous report
On August 23, 2024, Stran Loyalty Solutions entered into a factoring arrangement to provide accounts receivable financing to Stran Loyalty Solutions. In connection with the factoring arrangement, the Company provided a secured guarantee of Stran Loyalty Solutions’ obligations under the factoring arrangement. In discussions with Salem Five Cents prior to the establishment of the factoring arrangement, Salem Five Cents indicated that it would terminate the Revolving Line of Credit because of a policy which prohibited it from agreeing to subordination of its security interest in the Company’s assets. The factoring arrangement was terminated by the Company effective February 2025.
Previous report
Accordingly, on September 9, 2024, Salem Five Cents delivered a letter (the “Termination Letter”) to the Company that stated that, effective August 26, 2024 (the “Termination Date”), Salem Five Cents terminated all obligations under the Loan Agreement and the Demand Note. The Termination Letter further stated that the Loan Agreement and the Demand Note and the Loan Documents shall no longer be considered in force or effect. The Company had no funds drawn on the Revolving Line of Credit on the Termination Date.
Previous report
The Revolving Line of Credit was therefore terminated in 2024.
Previous report
Acquisition of Assets of Gander Group
Previous report
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”).
Previous report
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”).
Showing the first 40 of 48 passages. Open the source sections for the rest.
Reworded paragraphs (21)
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 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.
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 months ended March 31, 2026 and 2025, program clients accounted for 85.3% and 83.8% 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, which we believe will help 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 repeatedly amended additional country-specific tariffs on goods imported from other countries, with significant changes affecting imports from China. 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. In late October 2025, the U.S. announced that these temporarily reduced additional tariffs would be further reduced to a combined rate of 20%, subject to formal executive orders or other actions. 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. 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. 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. 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. In addition, several tariffs (including the reciprocal and fentanyl measures against Chinese imports noted above) are subject to ongoing legal challenges, while collections have continued pending further appeals.
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. 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. 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. 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. 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. 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. 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.
Previous 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.
Current wording
As a result of the above tariffs and tariff amendments and the ongoing uncertainties as to tariff refunds and future tariff rates, 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. If prices cannot be increased, it may result in a negative impact on our gross margin. 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 that relate to periods preceding the increases in applicable U.S. tariffs since February 2025, including those that may be indicated below for the three months ended March 31, 2025, may be expected to continue to occur in future periods.
Previous wording
As of September 30, 2025, we had approximately $50.3 million of total assets with approximately $30.2 million of total stockholders’ equity.
Current wording
As of March 31, 2026, we had approximately $53.2 million of total assets with approximately $31.4 million of total stockholders’ equity.
Previous wording
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.
Current wording
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 $1.235 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 (subject to certain exceptional circumstances) 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.
Previous 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.
Current wording
Our total sales increased 8.9% to approximately $31.2 million for the three months ended March 31, 2026, from approximately $28.7 million for the three months ended March 31, 2025. Sales by our Stran segment increased to approximately $23.4 million for the three months ended March 31, 2026 from approximately $20.9 million for the three months ended March 31, 2025. Sales by our SLS segment (which consists of the business of Gander Group Louisiana) remained flat at approximately $7.8 million for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025. 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 primarily attributable to new business from new customers.
Previous 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.
Current wording
Our total cost of sales increased 6.9% to approximately $21.6 million for the three months ended March 31, 2026, from approximately $20.2 million for the three months ended March 31, 2025. As a percentage of sales, total cost of sales decreased to 69.1% for the three months ended March 31, 2026 from 70.4% for the three months ended March 31, 2025. Cost of sales by our Stran segment increased to approximately $16.0 million for the three months ended March 31, 2026 from approximately $14.1 million for the three months ended March 31, 2025. Cost of sales by our SLS segment decreased to approximately $5.6 million for the three months ended March 31, 2026 from approximately $6.1 million for the three months ended March 31, 2025. The increase in the dollar amount of total cost of sales was primarily due to the increase in sales of 8.9% 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 decrease was primarily attributable to effective cost management.
Previous 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.
Current wording
Gross profit consists of sales less total cost of sales. Our total gross profit increased 13.7% to approximately $9.6 million, or 30.9% of sales, for the three months ended March 31, 2026, from approximately $8.5 million, or 29.6% of sales, for the three months ended March 31, 2025. Gross profit of our Stran segment increased to approximately $7.4 million for the three months ended March 31, 2026 from approximately $6.8 million for the three months ended March 31, 2025. Gross profit of our SLS segment increased to approximately $2.2 million for the three months ended March 31, 2026 from approximately $1.7 million for the three months ended March 31, 2025. The increase in the dollar amount of total gross profit was primarily attributable to customer mix and effective cost management. For the Stran segment, the increase in the dollar amount of gross profit was due to an increase in sales of approximately $2.5 million for the reasons described above, which was partially offset by an increase of cost of sales of approximately $1.9 million for the reasons described above. For the SLS segment, the increase in the dollar amount of gross profit was primarily attributable to improved customer mix and effective cost management.
Previous 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.
Current wording
Gross profit margin is defined as gross profit as a percentage of sales. The increase in total gross profit margin to 30.9% for the three months ended March 31, 2026 from 29.6% for the three months ended March 31, 2025 was primarily due to a shift in our customer mix and margin contribution. The gross profit margin for the Stran segment decreased to 31.6% for the three months ended March 31, 2026 from 32.4% for the three months ended March 31, 2025 due to customer mix. The gross profit margin for the SLS segment increased to 28.7% for the three months ended March 31, 2026 from 21.8% for the three months ended March 31, 2025 due to improved customer mix and effective cost management.
Previous 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.
Current wording
Operating expenses consist of general and administrative expenses. Our total operating expenses decreased (0.2)% to approximately $9.0 million for the three months ended March 31, 2026, from approximately $9.0 million for the three months ended March 31, 2025. Operating expenses of our Stran segment increased to approximately $6.2 million for the three months ended March 31, 2026 from approximately $5.6 million for the three months ended March 31, 2025. Operating expenses of our SLS segment decreased to approximately $1.7 million for the three months ended March 31, 2026 from approximately $2.2 million for the three months ended March 31, 2025. As a percentage of sales, total operating expenses decreased to 28.8% for the three months ended March 31, 2026, from 31.4% for the three months ended March 31, 2025. As a percentage of sales, operating expenses of our Stran segment decreased to 26.6% for the three months ended March 31, 2026 from 26.9% for the three months ended March 31, 2025. As a percentage of sales, operating expenses of our SLS segment decreased to 21.9% for the three months ended March 31, 2026 from 27.7% for the three months ended March 31, 2025. For the Stran segment, the increase in the dollar amount of operating expenses was primarily due to investment in STRAN Digital Solutions to provide enhanced functionality and offerings to scale client programs, higher expenses related to our e-commerce platform, Magento Open Source, and higher sales and marketing-related costs. For the SLS segment, the decrease in the dollar amount of operating expenses was primarily attributable to a small reduction in headcount and lower sales-related costs. Operating expenses for “Other” consists of unallocated corporate costs, including salaries for our corporate officers, audit-related fees, board of director compensation, and other stock-related charges. Such costs decreased by approximately $0.2 million to approximately $1.1 million for the three months ended March 31, 2026, from approximately $1.2 million for the three months ended March 31, 2025. The decrease was primarily due to lower legal and accounting expenses related to the re-audit of historical financial statements.
Previous 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.
Current wording
Other income consists of other income (expense), interest income, and realized gain on investments. Our other income was approximately $78 thousand for the three months ended March 31, 2026, compared to other expense of approximately $(5) thousand for the three months ended March 31, 2025. This change was primarily attributable to a payment received from a settlement administrator. Our interest income was approximately $67 thousand for the three months ended March 31, 2026, compared to approximately $42 thousand for the three months ended March 31, 2025. This increase was primarily attributable to higher interest rates earned on program deposit balances, partially offset by slightly lower average program deposit balances compared to the same period in the prior year. Our realized gain on investments was $0 thousand for the three months ended March 31, 2026, compared to approximately $67 thousand for the three months ended March 31, 2025, since no investments were sold during the three months ended March 31, 2026.
Previous 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.
Current wording
Income tax provision for the three months ended March 31, 2026 was approximately $46 thousand compared to an income tax benefit of approximately $38 thousand for the three months ended March 31, 2025. The effective tax rate for the three months ended March 31, 2026 was 5.81%, based on income before income taxes of approximately $0.7 million. The effective tax rate for the three months ended March 31, 2025 was 8.9%, based on the loss before income taxes of approximately $0.4 million.
Previous 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.
Current wording
The change in the effective tax rate from the comparison of 2026 and 2025 as noted above primarily relates to our estimated earnings and the Company’s position that its deferred tax assets require a full valuation allowance.
Previous 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.
Current wording
Our net income for the three months ended March 31, 2026 was approximately $0.7 million, compared to net loss of approximately $0.4 million for the three months ended March 31, 2025. This change was primarily due to an increase in gross profit, and a decrease in operating expenses, for the reasons described above.
Previous 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.
Current wording
As of March 31, 2026, we had cash and cash equivalents of approximately $7.6 million and investments of approximately $5.1 million. We have largely 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 positive cash flow this quarter.
Previous wording
The following table provides detailed information about our net cash flows for the nine months ended September 30, 2025 and 2024 (in thousands).
Current wording
The following table provides detailed information about our net cash flows for the three months ended March 31, 2026 and 2025 (in thousands).
Previous 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.
Current wording
Net cash provided by operating activities was approximately $1.2 million for the three months ended March 31, 2026, as compared to net cash used in operating activities of approximately $5.9 million for the three March 31, 2025. The change was primarily due to net income this quarter, a decrease in cash used from the rewards program, and higher accounts payable and accruals as a result of timing. These increases were offset by higher vendor deposits for customer orders.
Previous 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.
Current wording
Net cash used in investing activities was approximately $0.3 million for the three months ended March 31, 2026, as compared to net cash provided by investing activities of approximately $0.8 million for the three months ended March 31, 2025. The change was primarily due to non-recurring redemptions of our investments from 2025.
Previous 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.
Current wording
Lease costs for the three months ended March 31, 2026 and 2025 totaled approximately $0.2 million and $0.2 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 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.
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 March 31, 2026 and December 31, 2025, the Company had net reward card program liabilities totaling approximately $0.9 million and $1.5 million, respectively.
Previous wording
For a discussion of recently adopted accounting pronouncements, seeRecently Issued Accounting Pronouncements in Note A.19 to our unaudited condensed consolidated financial statements beginning on page 1 of this Quarterly Report on Form 10-Q.
Current wording
For a discussion of recently adopted accounting pronouncements, seeRecently Issued Accounting Pronouncements in Note A to our financial statements beginning on page 11 of this Quarterly Report on Form 10-Q.
Rearranged previous paragraphs (5)
Previous report — wording carried elsewhere
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 report — wording carried elsewhere
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):
Previous report — wording carried elsewhere
Cost of sales by segment and in total were as follows (in thousands):
Previous report — wording carried elsewhere
Operating expenses by segment and in total were as follows (in thousands):
Previous report — wording carried elsewhere
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.