# EDGAR Filing Document

**Accession Number:** 0001872525
**File Stem:** 0001213900-25-109289
**Filing Date:** 2025-11
**Character Count:** 186503
**Document Hash:** 58e745690d7828e4e03d7d9392ad0f1f
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001213900-25-109289.hdr.sgml**: 20251112

**ACCESSION NUMBER**: 0001213900-25-109289

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 99

**CONFORMED PERIOD OF REPORT**: 20250930

**FILED AS OF DATE**: 20251112

**DATE AS OF CHANGE**: 20251112

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Stran & Company, Inc.
- **CENTRAL INDEX KEY:** 0001872525
- **STANDARD INDUSTRIAL CLASSIFICATION:** SERVICES-ADVERTISING AGENCIES [7311]
- **ORGANIZATION NAME:** 07 Trade & Services
- **EIN:** 043297200
- **STATE OF INCORPORATION:** NV
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-41038
- **FILM NUMBER:** 251473799

**BUSINESS ADDRESS:**
- **STREET 1:** 2 HERITAGE DRIVE
- **STREET 2:** SUITE 600
- **CITY:** QUINCY
- **STATE:** MA
- **ZIP:** 02171
- **BUSINESS PHONE:** 8008333309

**MAIL ADDRESS:**
- **STREET 1:** 2 HERITAGE DRIVE
- **STREET 2:** SUITE 600
- **CITY:** QUINCY
- **STATE:** MA
- **ZIP:** 02171

?xml version='1.0' encoding='ASCII'?

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 10-Q**

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: September 30, 2025

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to _____________

Commission File Number: 001-41038

---

| |
|:---|
| **STRAN & COMPANY, INC.** |
| (Exact name of registrant as specified in its charter) |

---

---

| | |
|:---|:---|
| **Nevada** | **04-3297200** |
| (State or other jurisdiction <br> of incorporation) | (I.R.S. Employer <br> Identification No.) |
| **500 Victory Road, Suite 301, Quincy, MA** | **02171** |
| (Address of principal executive offices) | (Zip Code) |

---

---

| |
|:---|
| **800-833-3309** |
| (Registrant's telephone number, including area code) |
| (Former name or former address, if changed since last report) |

---

Securities registered pursuant to Section 12(b) of the Act:

---

| | | |
|:---|:---|:---|
| **Title of each class** | **Trading Symbol(s)** | **Name of each exchange on which registered** |
| Common Stock, par value $0.0001 per share | SWAG | The Nasdaq Stock Market LLC |
| Warrants, each warrant exercisable for one share of Common Stock, at an exercise price of $4.81375 | SWAGW | The Nasdaq Stock Market LLC |

---

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☐ <br> Non-accelerated filer ☒ Smaller reporting company ☒ <br> Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of November 11, 2025, there were a total of 18,288,158 shares of the registrant's common stock outstanding.

**STRAN & COMPANY, INC.**

**Quarterly Report on Form 10-Q**

**Period Ended September 30, 2025**

**TABLE OF CONTENTS**

---

| | | |
|:---|:---|:---|
|  |  | **Page** |
|  | **[PART I](#a_001)** |  |
| **[FINANCIAL INFORMATION](#a_014)** | **[FINANCIAL INFORMATION](#a_014)** | **[FINANCIAL INFORMATION](#a_014)** |
| Item 1. | [Financial Statements](#a_002) | 1 |
| Item 2. | [Management's Discussion and Analysis of Financial Condition and Results of Operations](#a_003) | 28 |
| Item 3. | [Quantitative and Qualitative Disclosure About Market Risk](#a_004) | 45 |
| Item 4. | [Controls and Procedures](#a_005) | 46 |
|  | **[PART II](#a_006)** |  |
| **[OTHER INFORMATION](#a_015)** | **[OTHER INFORMATION](#a_015)** | **[OTHER INFORMATION](#a_015)** |
| Item 1. | [Legal Proceedings](#a_007) | 47 |
| Item 1A. | [Risk Factors](#a_008) | 47 |
| Item 2. | [Unregistered Sales of Equity Securities and Use of Proceeds](#a_009) | 47 |
| Item 3. | [Defaults Upon Senior Securities](#a_010) | 48 |
| Item 4. | [Mine Safety Disclosures](#a_011) | 48 |
| Item 5. | [Other Information](#a_012) | 48 |
| Item 6. | [Exhibits](#a_013) | 49 |

---

i

**PART I**

**<u>FINANCIAL INFORMATION</u>**

**ITEM 1. FINANCIAL STATEMENTS.**

**STRAN & COMPANY, INC.**

**UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

---

| | |
|:---|:---|
|  | **Page** |
| [Condensed Consolidated Balance Sheets as of September 30, 2025 (unaudited) and December 31, 2024](#F_001) | 2 |
| [Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2025 and 2024 (unaudited)](#F_002) | 3 |
| [Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Nine Months Ended September 30, 2025 and 2024 (unaudited)](#F_003) | 4 |
| [Condensed Consolidated Statements of Stockholders' Equity for the Three and Nine Months Ended September 30, 2025 and 2024 (unaudited)](#F_004) | 5 |
| [Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2025 and 2024 (unaudited)](#F_005) | 6 |
| [Notes to the Unaudited Condensed Consolidated Financial Statements](#F_006) | 8 |

---

**STRAN & COMPANY, INC.**

**CONDENSED CONSOLIDATED BALANCE SHEETS**

**(in thousands, except share and per share amounts)**

---

| | | |
|:---|:---|:---|
|  | **September 30, <br> 2025** | **December 31, <br> 2024** |
|  | **(Unaudited)** | |
| <u>ASSETS</u> |  |  |
| CURRENT ASSETS: |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | $6697 | $9358 |
| &nbsp;&nbsp;&nbsp;Investments | 5058 | 8856 |
| &nbsp;&nbsp;&nbsp;Accounts receivable, net | 16626 | 18092 |
| &nbsp;&nbsp;&nbsp;Accounts receivable - related parties, net | 402 | 573 |
| &nbsp;&nbsp;&nbsp;Inventory | 7740 | 5389 |
| &nbsp;&nbsp;&nbsp;Prepaid corporate taxes | 63 | 28 |
| &nbsp;&nbsp;&nbsp;Prepaid expenses | 2163 | 2308 |
| &nbsp;&nbsp;&nbsp;Deposits | 580 | 423 |
| &nbsp;&nbsp;&nbsp;Other current assets | 2 | 455 |
| Total current assets | 39331 | 45482 |
| Property and equipment, net | 1952 | 1701 |
| OTHER ASSETS: |  |  |
| &nbsp;&nbsp;&nbsp;Intangible assets - customer lists, net | 3812 | 4170 |
| &nbsp;&nbsp;&nbsp;Intangible assets - trade name | 654 | 654 |
| &nbsp;&nbsp;&nbsp;Goodwill | 2321 | 2321 |
| &nbsp;&nbsp;&nbsp;Other assets |  | 23 |
| &nbsp;&nbsp;&nbsp;Right of use assets | 2192 | 797 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total other assets | 8979 | 7965 |
| Total assets | $50262 | $55148 |
| <u>LIABILITIES AND STOCKHOLDERS' EQUITY</u> |  |  |
| CURRENT LIABILITIES: |  |  |
| &nbsp;&nbsp;&nbsp;Accounts payable and accrued expenses | $7462 | $8919 |
| &nbsp;&nbsp;&nbsp;Accrued payroll and related | 1605 | 1513 |
| &nbsp;&nbsp;&nbsp;Unearned revenue | 4159 | 4423 |
| &nbsp;&nbsp;&nbsp;Rewards program liability | 2951 | 6000 |
| &nbsp;&nbsp;&nbsp;Sales tax payable | 251 | 353 |
| &nbsp;&nbsp;&nbsp;Current portion of contingent earn-out liabilities | 105 | 256 |
| &nbsp;&nbsp;&nbsp;Current portion of installment payment liabilities | 170 | 365 |
| &nbsp;&nbsp;&nbsp;Current portion of lease liabilities | 615 | 366 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities | 17318 | 22195 |
| LONG-TERM LIABILITIES: |  |  |
| &nbsp;&nbsp;&nbsp;Long-term contingent earn-out liabilities | 455 | 455 |
| &nbsp;&nbsp;&nbsp;Long-term installment payment liabilities | 400 | 425 |
| &nbsp;&nbsp;&nbsp;Long-term lease liabilities | 1861 | 432 |
| &nbsp;&nbsp;&nbsp;Other liabilities | 32 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total long-term liabilities | 2748 | 1312 |
| Total liabilities | 20066 | 23507 |
| Commitments and contingencies (Note K) |  |  |
| STOCKHOLDERS' EQUITY: |  |  |
| &nbsp;&nbsp;&nbsp;Preferred stock, $0.0001 par value; 50,000,000 shares authorized, 0 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively |  |  |
| &nbsp;&nbsp;&nbsp;Common stock, $0.0001 par value; 300,000,000 shares authorized, 18,288,158 and 18,598,574 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively | 2 | 2 |
| &nbsp;&nbsp;&nbsp;Additional paid-in capital | 37902 | 38391 |
| &nbsp;&nbsp;&nbsp;Accumulated deficit | (7732) | (6742) |
| &nbsp;&nbsp;&nbsp;Accumulated other comprehensive income (loss) | 24 | (10) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total stockholders' equity | 30196 | 31641 |
| Total liabilities and stockholders' equity | $50262 | $55148 |

---

*The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.*

 

**STRAN & COMPANY, INC.**

**CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS**

**THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024**

**(in thousands, except share and per share amounts)**

**(unaudited)**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Three Months Ended <br> September 30,** | **For the Three Months Ended <br> September 30,** | **For the Nine Months Ended<br> September 30,** | **For the Nine Months Ended<br> September 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| SALES |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Sales | $25981 | $19730 | $87252 | $55204 |
| &nbsp;&nbsp;&nbsp;Sales – related parties |  | 414 |  | 460 |
| Total sales | 25981 | 20144 | 87252 | 55664 |
| COST OF SALES: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Cost of sales | 18909 | 13873 | 61829 | 38278 |
| &nbsp;&nbsp;&nbsp;Cost of sales - related parties |  | 319 |  | 354 |
| Total cost of sales | 18909 | 14192 | 61829 | 38632 |
| GROSS PROFIT | 7072 | 5952 | 25423 | 17032 |
| OPERATING EXPENSES: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;General and administrative expenses | 8854 | 8136 | 27345 | 20993 |
| Total operating expenses | 8854 | 8136 | 27345 | 20993 |
| LOSS FROM OPERATIONS | (1782) | (2184) | (1922) | (3961) |
| OTHER INCOME: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Other income (expense) | 304 | (22) | 584 | (6) |
| &nbsp;&nbsp;&nbsp;Interest income | 87 | 64 | 206 | 239 |
| &nbsp;&nbsp;&nbsp;Realized gain on investments | 79 | 103 | 146 | 176 |
| Total other income | 470 | 145 | 936 | 409 |
| LOSS BEFORE INCOME TAXES | (1312) | (2039) | (986) | (3552) |
| (Benefit from) provision for income taxes | (72) | (1) | 4 | 2 |
| NET LOSS | $(1240) | $(2038) | $(990) | $(3554) |
| NET LOSS PER COMMON SHARE |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Basic and diluted | $(0.07) | $(0.11) | $(0.05) | $(0.19) |
| WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Basic and diluted | 18384904 | 18589086 | 18526004 | 18584359 |

---

*The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.*

**STRAN & COMPANY, INC.**

**CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)**

**THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024**

**(in thousands)**

**(unaudited)**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Three Months Ended <br> September 30,** | **For the Three Months Ended <br> September 30,** | **For the Nine Months Ended <br> September 30,** | **For the Nine Months Ended <br> September 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| Net loss | $(1240) | $(2038) | $(990) | $(3554) |
| Other comprehensive income (loss): |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Unrealized gain (loss) on investment, net of tax | (14) | 53 | 34 | 34 |
| Total other comprehensive income (loss) | (14) | 53 | 34 | 34 |
| Comprehensive loss | $(1254) | $(1985) | $(956) | $(3520) |

---

*The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.*

**STRAN & COMPANY, INC.**

**CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY**

**THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024**

**(in thousands, except share amounts)**

**(unaudited)**

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Preferred Stock** | **Preferred Stock** | **Common Stock** | **Common Stock** | | | | |
|  | **Shares** | **Value** | **Shares** | **Value** |<br>**Additional**<br>**Paid-in**<br> **Capital** | **Accumulated**<br>**Other**<br>**Comprehensive**<br>**Income (Loss)** |<br>**Accumulated**<br>**Deficit** |<br>**Stockholders'**<br>**Equity** |
| Balance, January 1, 2025 |  | $— | 18598574 | $2 | $38391 | $(10) | $(6742) | $31641 |
| &nbsp;&nbsp;&nbsp;Stock-based compensation |  |  | 9833 |  | 9 |  |  | 9 |
| &nbsp;&nbsp;&nbsp;Other comprehensive income |  |  |  |  |  | 15 |  | 15 |
| &nbsp;&nbsp;&nbsp;Net loss |  |  |  |  |  |  | (393) | (393) |
| Balance, March 31, 2025 |  | $— | 18608407 | $2 | $38400 | $5 | $(7135) | $31272 |
| &nbsp;&nbsp;&nbsp;Issuance of restricted stock awards |  |  | 48347 |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Stock-based compensation |  |  |  |  | 31 |  |  | 31 |
| &nbsp;&nbsp;&nbsp;Repurchase and retirement of ordinary shares |  |  | (110293) |  | (146) |  |  | (146) |
| &nbsp;&nbsp;&nbsp;Other comprehensive income |  |  |  |  |  | 33 |  | 33 |
| &nbsp;&nbsp;&nbsp;Net income |  |  |  |  |  |  | 643 | 643 |
| Balance, June 30, 2025 |  | $— | 18546461 | $2 | $38285 | $38 | $(6492) | $31833 |
| &nbsp;&nbsp;&nbsp;Stock-based compensation |  |  |  |  | 25 |  |  | 25 |
| &nbsp;&nbsp;&nbsp;Issuance of restricted stock awards |  |  | 8904 |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Other comprehensive income |  |  |  |  |  | (14) |  | (14) |
| &nbsp;&nbsp;&nbsp;Repurchase and retirement of ordinary shares |  |  | (267207) |  | (408) |  |  | (408) |
| &nbsp;&nbsp;&nbsp;Net loss |  |  |  |  |  |  | (1240) | (1240) |
| Balance, September 30, 2025 |  | $— | 18288158 | $2 | $37902 | 24 | $(7732) | $30196 |

---

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Preferred Stock** | **Preferred Stock** | **Common Stock** | **Common Stock** | | | | |
|  | **Shares** | **Value** | **Shares** | **Value** | **Additional**<br>**Paid-in**<br>**Capital** | **Accumulated<br> Other**<br>**Comprehensive**<br>**Loss** |<br>**Accumulated**<br>**Deficit** |<br>**Stockholders'**<br>**Equity** |
| Balance, January 1, 2024 |  | $— | 18539000 | $2 | $38263 | $(13) | $(2602) | $35650 |
| &nbsp;&nbsp;&nbsp;Stock-based compensation |  |  | 50086 |  | 150 |  |  | 150 |
| &nbsp;&nbsp;&nbsp;Other comprehensive loss |  |  |  |  |  | (67) |  | (67) |
| &nbsp;&nbsp;&nbsp;Net loss |  |  |  |  |  |  | (491) | (491) |
| Balance, March 31, 2024 |  | $— | 18589086 | $2 | $38413 | $(80) | $(3093) | $35242 |
| &nbsp;&nbsp;&nbsp;Stock-based compensation |  |  |  |  | 20 |  |  | 20 |
| &nbsp;&nbsp;&nbsp;Other comprehensive income |  |  |  |  |  | 48 |  | 48 |
| &nbsp;&nbsp;&nbsp;Net loss |  |  |  |  |  |  | (1025) | (1025) |
| Balance, June 30, 2024 |  | $— | 18589086 | $2 | $38433 | $(32) | $(4118) | $34285 |
| &nbsp;&nbsp;&nbsp;Stock-based compensation |  |  |  |  | 3 |  |  | 3 |
| &nbsp;&nbsp;&nbsp;Other comprehensive income |  |  |  |  |  | 53 |  | 53 |
| &nbsp;&nbsp;&nbsp;Net loss |  |  |  |  |  |  | (2038) | (2038) |
| Balance, September 30, 2024 |  | $— | 18589086 | $2 | $38436 | $21 | $(6156) | $32303 |

---

*The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.*

 

**STRAN & COMPANY, INC.**

**CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS**

**NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024**

**(in thousands)**

**(unaudited)**

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
| CASH FLOWS FROM OPERATING ACTIVITIES: |  |  |
| &nbsp;&nbsp;&nbsp;Net loss | $(990) | $(3554) |
| &nbsp;&nbsp;&nbsp;Adjustments to reconcile net loss to net cash (used in) provided by operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 808 | 574 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Noncash operating lease expense | 682 | 406 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Provision for credit losses | 536 | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Noncash interest accretion | 35 | 84 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock-based compensation | 65 | 173 |
| &nbsp;&nbsp;&nbsp;Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable, net | 931 | 4092 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable – related parties, net | 172 | (239) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventory | (2352) | 954 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid corporate taxes | (34) | 28 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses | 146 | 574 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deposits | (157) | 1139 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other assets | 507 | (63) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable and accrued expenses | (1460) | (2888) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued payroll and related | 92 | (1267) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unearned revenue | (264) | (262) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Rewards program liability | (3049) | 2125 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Sales tax payable | (103) | (158) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating lease liabilities | (399) | (391) |
| Net cash (used in) provided by operating activities | (4834) | 1427 |
| CASH FLOWS FROM INVESTING ACTIVITIES: |  |  |
| &nbsp;&nbsp;&nbsp;Business acquisitions, net of cash acquired |  | (1469) |
| &nbsp;&nbsp;&nbsp;Additions to property and equipment | (700) | (508) |
| &nbsp;&nbsp;&nbsp;Proceeds from sale of investments | 9043 | 9161 |
| &nbsp;&nbsp;&nbsp;Purchase of investments | (5210) | (5668) |
| Net cash provided by investing activities | 3133 | 1516 |
| CASH FLOWS FROM FINANCING ACTIVITIES: |  |  |
| &nbsp;&nbsp;&nbsp;Payment of contingent earn-out liabilities | (151) | (68) |
| &nbsp;&nbsp;&nbsp;Payment of installment payment liabilities | (255) | (798) |
| &nbsp;&nbsp;&nbsp;Payment of notes payable |  | (100) |
| &nbsp;&nbsp;&nbsp;Payment for stock repurchase | (554) |  |
| Net cash used in financing activities | (960) | (966) |
| NET CHANGE IN CASH AND CASH EQUIVALENTS | (2661) | 1977 |
| CASH AND CASH EQUIVALENTS - BEGINNING | 9358 | 8059 |
| CASH AND CASH EQUIVALENTS - ENDING | $6697 | $10036 |

---

*The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.*

**STRAN & COMPANY, INC.**

**CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS**

**NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024**

**(CONTINUED)**

**(in thousands)**

**(unaudited)**

<u>SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION</u>

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
| *Cash paid during the period for:* |  |  |
| &nbsp;&nbsp;&nbsp;Interest | $24 | $83 |
| &nbsp;&nbsp;&nbsp;Income taxes | $67 | $2 |
| *Noncash investing and financing activities:* |  |  |
| &nbsp;&nbsp;&nbsp;Right of use assets obtained in exchange for lease liabilities | $2077 | $— |
| &nbsp;&nbsp;&nbsp;Assets acquired in Gander Group business acquisition | $— | $8314 |
| &nbsp;&nbsp;&nbsp;Liabilities assumed in Gander Group business acquisition | $— | $6845 |

---

*The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.*

 

**STRAN & COMPANY, INC.**

**NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(in thousands, except share and per share amounts)**

**A.**  **<u>ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</u>:** 

&nbsp;&nbsp;&nbsp;&nbsp;1. Organization - Stran & Company, Inc. was incorporated under the laws of the Commonwealth of Massachusetts
and commenced operations on November 17, 1995. The Company re-incorporated under the laws of the State of Nevada on May 24, 2021.

On August 23, 2024, Stran Loyalty Solutions, LLC, a Nevada limited liability company (the "Purchaser" or "Stran Loyalty Solutions"), a wholly-owned subsidiary of the Company, 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 substantially all of the assets of Gander Group (the "Gander Group Assets") from Secured Party as a private sale pursuant to Article 9 of the Uniform Commercial Code (the "Gander Group Transaction").

The Gander Group Transaction was treated as a business combination in accordance with Accounting Standards Codification ("ASC") 805, Business Combinations. Stran Loyalty Solutions is a wholly owned subsidiary of the Company and Gander Group Louisiana, LLC is a wholly owned subsidiary of Stran Loyalty Solutions.

Unless otherwise stated in this Quarterly Report on Form 10-Q, references to "we", "our", or the "Company" refer to Stran & Company, Inc. The Company is headquartered in Quincy, Massachusetts.

&nbsp;&nbsp;&nbsp;&nbsp;2. Operations - The Company is an outsourced marketing solutions provider that sells branded products to
customers. The Company purchases products and branding through various third-party manufacturers and decorators and resells the finished
goods to customers.

In addition to selling branded products, the Company offers clients custom sourcing capabilities; a flexible and customizable e-commerce solution for promoting branded merchandise and other promotional products, managing promotional loyalty and incentives, print collateral, and event assets, order and inventory management, and designing and hosting online retail popup shops, fixed public retail online stores, and online business-to-business service offerings; creative and merchandising services; warehousing/fulfillment and distribution; print-on-demand; kitting; point of sale displays; and loyalty and incentive programs.

&nbsp;&nbsp;&nbsp;&nbsp;3. Method of Accounting - The Company's unaudited condensed consolidated financial statements are prepared
using the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America. ("U.S.
GAAP").

&nbsp;&nbsp;&nbsp;&nbsp;4. Basis of Presentation - The accompanying unaudited condensed consolidated financial statements as of and
for the three and nine months ended September 30, 2025, include the accounts of the Company and have been prepared by the Company, without
audit, pursuant to the rules and regulations of the Securities and Exchange Commission. These unaudited condensed consolidated financial
statements should be read in conjunction with the audited financial statements and the notes thereto included in our Annual Report on
Form 10-K filed with the Securities and Exchange Commission on April 14, 2025.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, and we believe that the disclosures are adequate to make the information presented not misleading. In our opinion, all adjustments (consisting solely of normal recurring adjustments) necessary to state fairly the information in the following unaudited condensed consolidated financial statements of the Company have been included. The results of operations for interim periods are not necessarily indicative of the results for the full year.

&nbsp;&nbsp;&nbsp;&nbsp;5. Principles of Consolidation - The Company's unaudited condensed consolidated financial statements
include the accounts of its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

**STRAN & COMPANY, INC.**

**NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(in thousands, except share and per share amounts)**

&nbsp;&nbsp;&nbsp;&nbsp;6. Use of Estimates - The Company prepares its unaudited condensed consolidated financial statements in accordance
with U.S. GAAP, which requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities
at the date of the financial statements, and revenue and expenses during the reporting period. Actual results could differ from those
estimates.

&nbsp;&nbsp;&nbsp;&nbsp;7. Fair Value Measurements and Fair Value of Financial Instruments - The Company follows the guidance in
ASC 820 for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period.

The fair value of the Company's financial assets and liabilities reflects management's estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:

---

| | |
|:---|:---|
| Level 1: | Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. |
| Level 2: | Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active. |
| Level 3: | Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability. |

---

The carrying value of certain financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and reward card program liabilities are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments.

&nbsp;&nbsp;&nbsp;&nbsp;8. Concentration of Credit Risk - Financial instruments that
potentially subject the Company to concentrations of credit risk consist primarily of accounts receivable and deposits in excess of federally
insured limits. These risks are managed by performing ongoing credit evaluations of customers' financial condition and by maintaining
all deposits in high quality financial institutions.

As of September 30, 2025 and December 31, 2024, the Company maintained deposits in four banks that exceeded the federal insured deposit limit of the Federal Deposit Insurance Corporation ("FDIC").

For the three and nine months ended September 30, 2025, the Company had no major customers to which sales accounted for more than 10% of the Company's revenues. The Company had accounts receivable from one customer amounting to 15% of the total accounts receivable balance as of September 30, 2025.

For the three and nine months ended September 30, 2024, the Company had one major customer to which sales accounted for more than 10% of the Company's revenues. The Company had accounts receivable from this customer amounting to 0.8% of the total accounts receivable balance.

**STRAN & COMPANY, INC.**

**NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(in thousands, except share and per share amounts)**

&nbsp;&nbsp;&nbsp;&nbsp;9. Revenue Recognition - The Company accounts for revenue under
ASC 606, Revenue for Contracts with Customers. Revenue is generated through various types of transactions, including promotional product
sales, administering a customer's rewards program, administering redemption code programs, and additional contract add-ons to enhance
customer experience. The Company follows the five step model of revenue recognition:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. identify the contract(s) with a customer;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii. identify the performance obligations in the contract;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iii. determine the transaction price;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iv. allocate the transaction price to the performance obligations
within the contract; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;v. recognize revenue when (or as) the entity satisfies a performance
obligation.

The Company's contract assessment and approval varies based on whether the customer requests a one-time sale or a long-term contract. Customers with long-term contracts require signed Master Sales Agreements, while one-time sales contracts may be approved via email, electronic signature, or verbally. Once the contract is identified and approved, the Company assesses the goods or services promised within the contract to determine whether each promised good or service is a performance obligation. The Company identifies each piece of promotional product as an individual performance obligation based on the following fact pattern. Customers can benefit from each item of promotional product produced on its own. Each piece of promotional product does not significantly modify or customize other promotional products and are not highly interdependent or interrelated with each other. The Company can, and frequently does, break portions of contracts into separate shipments to meet customer demands. As such, each piece of promotional product is considered a separate and distinct performance obligation.

The transaction price for the majority of the Company's sales can be clearly identified in a significant majority of the contracts due to an observable selling price. The transaction price is then allocated to the performance obligation(s), i.e. promotional product. The agreements include clearly identified prices.

The Company recognizes revenue when or as performance obligations are satisfied by transferring control of a promised good or service to a customer. Stran evaluates transfer of control primarily from the customer's perspective. Considering the transaction from the customer's perspective reduces the risk that revenue is recognized for activities that do not transfer control of a good or service to the customer. Management determines, at contract inception, whether control of a good or service transfers to a customer over time or at a point in time. The assessment of whether control transfers over time or at a point in time is critical to the timing of revenue recognition. Payments from customers received in advance of the performance obligation being met are recognized as liabilities until performance occurs. In general, receivables from customer are primarily due within 30 days of the invoice date.

**STRAN & COMPANY, INC.**

**NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(in thousands, except share and per share amounts)**

&nbsp;&nbsp;&nbsp;&nbsp;10. Accounts Receivable and Allowance for Credit Losses - Accounts
receivable at September 30, 2025 and December 31, 2024, includes allowance for credit losses of $1,162 and $791 (inclusive of $427 and
$327 for related party receivables), respectively. Accounts receivable at December 31, 2023 was $17,076 (inclusive of $853 for related
party receivables).

---

| | | |
|:---|:---|:---|
|  | **September 30, <br> 2025** | **December 31, <br> 2024** |
| Trade accounts receivable | $17361 | $18556 |
| Less: allowance for credit losses on accounts receivable | (735) | (464) |
| &nbsp;&nbsp;&nbsp;**Total accounts receivable, net** | $16626 | $18092 |
| Accounts receivable - related party | $829 | $900 |
| &nbsp;&nbsp;&nbsp;Less: allowance for credit losses on accounts receivable - related party | (427) | (327) |
| &nbsp;&nbsp;&nbsp;**Total accounts receivable - related party, net** | $402 | $573 |
| &nbsp;&nbsp;&nbsp;**Total accounts receivable from all sources, net** | $17028 | $18665 |

---

The Company evaluates our accounts receivable through a continuous process of assessing our portfolio on an individual customer and overall basis. This process consists of a thorough review of historical collection experience, current aging status of the customer accounts and the financial condition of our customers. The Company also considers the economic environment of our customers, both from a marketplace and geographic perspective, in evaluating the need for an allowance. Based on our review of these factors, we establish or adjust allowances for specific customers. Credit losses can vary substantially over time and the process involves judgment and estimation that require a number of assumptions about matters that are uncertain. Accordingly, our results of operations can be affected by adjustments to the allowance due to actual write-offs that differ from estimated amounts. See Note P, "Credit Losses," to the unaudited condensed consolidated financial statements included in this report for more information.

&nbsp;&nbsp;&nbsp;&nbsp;11. Goodwill - Goodwill represents the excess purchase price of the acquired businesses over the fair value
of identifiable net assets acquired. Goodwill is not amortized; rather, it is subject to a periodic assessment for impairment. The Company
reviews goodwill for possible impairment annually on October 1 every year or whenever events or circumstances indicate that the carrying
amount may not be recoverable.

To determine whether goodwill is impaired, annually or more frequently if needed, the Company performs a multi-step impairment test. Impairment testing is conducted at the reporting unit level. The Company first has the option to assess qualitative factors to determine if it is more likely than not that the carrying value of a reporting unit exceeds its estimated fair value. Under ASC 350, Intangibles - Goodwill and Other, the qualitative assessment requires the consideration of factors such as recent market transactions, macroeconomic conditions, and changes in projected future cash flows or planned revenue or earnings of the reporting unit as potential indicators when determining the need for a quantitative assessment of impairment. The Company may also elect to skip the qualitative testing and proceed directly to the quantitative testing. When performing quantitative testing, the Company first estimates the fair values of its reporting unit using a combination of an income and market approach. To determine fair values, the Company is required to make assumptions about a wide variety of internal and external factors. Significant assumptions used in the impairment analysis include financial projections of free cash flow (including significant assumptions about operations including the rate of future revenue growth, capital requirements, and income taxes), long-term growth rates for determining terminal value, and discount rates. Comparative market multiples are used to corroborate the results of the discounted cash flow test. These assumptions require significant judgment. The single step is to determine the estimated fair value of the reporting unit and compare it to the carrying value of the reporting unit, including goodwill. If we conclude based on our qualitative assessment that it is more likely than not that the fair value of a reporting unit is less than its carrying value, we then measure the fair value of the reporting unit and compare its fair value to its carrying value (Step 1 of the goodwill impairment test). The majority of the inputs used in the discounted cash flow model are unobservable and thus are considered to be Level 3 inputs. The inputs for the market capitalization calculation are considered Level 1 inputs.

**STRAN & COMPANY, INC.**

**NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(in thousands, except share and per share amounts)**

&nbsp;&nbsp;&nbsp;&nbsp;12. Uncertainty in Income and Other Taxes - The Company adopted the standards for Accounting for Uncertainty in Income Taxes, which required the Company to report any uncertain tax positions and to adjust its financial statements for the impact thereof. As of September 30, 2025 and December 31, 2024, the Company determined it had uncertain tax positions of $0 and $3,141, respectively. During the quarter ended September 30, 2025, the Company reversed its previously recorded uncertain tax positions considering the filing of its tax return for the year ended December 31, 2024. This reversal did not affect the income tax provision or tax balances recognized on the unaudited condensed consolidated balance sheet as there were only offsetting changes in individual temporary differences.

&nbsp;&nbsp;&nbsp;&nbsp;13. Income Taxes - Income taxes are provided for the tax effects of transactions reported in the financial
statements and consist of taxes currently due plus deferred taxes. Deferred taxes are provided for differences between the basis of assets
and liabilities for financial statements and income tax purposes offset by a valuation allowance.

The Company recorded an income tax benefit of approximately $72 and $1 in the unaudited condensed consolidated statement of operations for the three months ended September 30, 2025 and 2024, respectively. The Company recorded an income tax expense of approximately $4 and $2 in the unaudited condensed consolidated statement of operations for the nine months ended September 30, 2025 and 2024, respectively.

As of year-end 2024, the Company had federal and state net operating losses ("NOL") of approximately $4.0 million and $4.8 million, respectively. The federal NOLs generated will carryforward indefinitely. Generally, state NOLs will begin to expire March 31, 2028. In accordance with Section 382 of the U.S. Internal Revenue Code, the usage of the Company's NOL carryforwards may be subject to annual limitations to the extent that greater than 50% ownership changes have occurred. Tax returns for the years ended 2021 through 2025 are subject to review by tax authorities.

The Company's effective tax rate for the three months ended September 30, 2025 and 2024 was (5.5%) and (0.1%), respectively. The Company's effective tax rate for the nine months ended September 30, 2025 and 2024 was 0.4% and 0.1% respectively. The change in the effective tax rate from the comparison of similar periods in 2025 versus 2024, as noted above, primarily relates to the Company's earnings and a partial release of the valuation allowance from period to period. The Company has recognized a full valuation allowance on its gross deferred tax assets less its deferred tax liabilities.

On July 4, 2025, the One Big Beautiful Bill Act ("OBBBA") was enacted in the United States. The OBBBA includes several significant tax provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. The Company does not expect the enactment of OBBBA to have a material impact on its consolidated financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;14. Stock-Based Compensation - The Company accounts for its stock-based awards in accordance with ASC 718,
Compensation - Stock Compensation. This guidance requires all stock-based payments to employees to be recognized in the unaudited condensed
consolidated statements of operations based on their fair values. The Company uses the Black-Scholes option pricing model to determine
the fair value of options granted. The Company has elected to account for forfeitures as they occur. The Company is recognizing compensation
costs only for those stock-based awards expected to vest. Cumulative compensation expense is at least equal to the compensation expense
for vested awards. Stock-based compensation is recognized on a straight-line basis over the service period of each award. The Company
records compensation cost as an element of general and administrative expense in the accompanying unaudited condensed consolidated statements
of operations.

&nbsp;&nbsp;&nbsp;&nbsp;15. Stock Option and Warrant Valuation - Stock option and warrant valuation models require the input of assumptions.
The fair value of stock-based payment awards was estimated using the Black-Scholes option model with a volatility figure derived from
an index of historical stock prices for comparable entities. For warrants and stock options issued to non-employees, the Company accounts
for the expected life based on the contractual life of the warrants and stock options. For employees, the Company accounts for the expected
life of options in accordance with the "simplified" method, which is used for "plain-vanilla" options, as defined
in the accounting standards codification. The risk-free interest rate was determined from the implied yields of U.S. Treasury zero-coupon
bonds with a remaining life consistent with the expected term of the options.

**STRAN & COMPANY, INC.**

**NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(in thousands, except share and per share amounts)**

&nbsp;&nbsp;&nbsp;&nbsp;16. Advertising - The Company follows the policy of charging the costs of advertising to expense as incurred.
For the three months ended September 30, 2025 and 2024, advertising costs amounted to $80 and $148, respectively. For the nine months
ended September 30, 2025 and 2024, advertising costs amounted to $324 and $342, respectively.

&nbsp;&nbsp;&nbsp;&nbsp;17. Segments - In its operation of the business, management, including our chief operating decision maker
("CODM"), who is also our Chief Executive Officer , reviews certain financial information, including segmented internal profit
and loss statements prepared on a basis not consistent with U.S. GAAP.

For each of its segments, the CODM uses segment revenue, gross margin and segment operating income in the annual budgeting and forecasting process. The CODM considers budget-to-actual variances on a monthly basis for profit measures when making decisions about allocating capital and personnel to the segments. The CODM also uses segment gross margin for evaluating product pricing and segment operating income to assess the performance for each segment by comparing the results and return on assets of each segment with one another. The CODM uses segment gross margin and segment operating income in determining the compensation of certain employees.

During the periods presented, we reported our financial performance based on the following segments: Stran & Company, Inc. and Stran Loyalty Solutions, LLC.

&nbsp;&nbsp;&nbsp;&nbsp;18. Reclassification - Certain prior period statement of cash flow amounts have been reclassified to conform
to the Company's current period presentation. These reclassifications have no impact on the Company's previously reported
cash flows.

&nbsp;&nbsp;&nbsp;&nbsp;19. Recent Accounting Pronouncements

***Recent Accounting Pronouncements - Adopted:***

 ****

<u>ASU 2024-01 – Compensation – Stock Compensation (Topic 718)</u>

In March 2024, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") 2024-01, which clarifies the accounting for profits interest awards. This update provides guidance on determining whether a profits interest or similar award falls within the scope of ASC 718 Compensation—Stock Compensation or other guidance. The ASU aims to ensure consistency and transparency in the accounting for these awards by providing clearer criteria and illustrative examples.

The guidance is effective for fiscal years and interim periods beginning after December 15, 2024, with early adoption permitted. The Company adopted the standard on January 1, 2025. Its adoption did not have a material impact on the Company's unaudited condensed consolidated financial statements.

***Recent Accounting Pronouncements - Not Yet Adopted:***

 ****

<u>ASU 2023-09 – Income Taxes (Topic 740)</u>

In December 2023, the FASB issued ASU 2023-09, which amends the guidance on income tax disclosures. This update aims to improve the transparency and usefulness of income tax disclosures by requiring entities to provide more detailed information about the nature and effects of income tax uncertainties, the components of income tax expense, and the effective tax rate reconciliation. Additionally, the ASU mandates enhanced disclosures about deferred tax assets and liabilities, including the valuation allowance and the impact of tax law changes. The guidance is effective for fiscal years beginning after December 15, 2024, and interim periods within fiscal years beginning after December 15, 2025, with early adoption permitted. The Company is currently evaluating the impact of adoption of this ASU on its disclosures.

**STRAN & COMPANY, INC.**

**NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(in thousands, except share and per share amounts)**

<u>ASU 2024-03 - Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses</u>

In November 2024, the FASB issued ASU 2024-03, which requires the disaggregation, in the notes to the financial statements, of certain cost and expense captions presented on the face of the Company's statements of operations, to provide enhanced transparency to investors. The update may be applied either prospectively or retrospectively. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of adoption of this ASU on its disclosures.

<u>ASU 2025-05 – Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets</u>

In July 2025, the FASB issued ASU 2025-05, which provides all entities with a practical expedient for use in developing reasonable and supportable forecasts as part of estimating expected credit losses, upon which an entity may assume that current conditions as of the balance sheet date do not change for the remaining life of the asset. The update must be applied prospectively. ASU 2025-05 is effective for fiscal years beginning after December 15, 2025 and interim periods within those annual reporting periods. Early adoption is permitted. The Company is currently evaluating the impact of adoption of this ASU on its disclosures.

<u>ASU 2025-06 - Targeted Improvements to the Accounting for Internal-Use Software</u>

In September 2025, the FASB issued ASU 2025-06, which is intended to improve the operability and application of guidance related to capitalized software development costs. ASU 2025-06 is effective for fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of adoption of this ASU on its disclosures.

No other new accounting pronouncements adopted or issued had or are expected to have a material impact on the unaudited condensed consolidated financial statements.

**B.**  **<u>FAIR VALUE MEASUREMENTS</u>:** 

Fair value measurements discussed herein are based upon certain market assumptions and pertinent information available to management as of September 30, 2025 and December 31, 2024.

***Fair Value on a Recurring Basis***

The Company follows the guidance in ASC 820, Fair Value Measurement, for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period. The estimated fair value of the Company's investments and money market accounts represent Level 1 measurements. The estimated fair value of the earn-out liabilities represents Level 3 measurements. There were no transfers between levels within the fair value measurement hierarchy during the quarter ended September 30, 2025. The following table presents information about the Company's assets and liabilities that are measured at fair value on a recurring basis as of September 30, 2025 and December 31, 2024, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:

---

| | | | |
|:---|:---|:---|:---|
| **Description** | **Level** | **September 30, <br> 2025** | **December 31, <br> 2024** |
| Assets: |  |  |  |
| &nbsp;&nbsp;&nbsp;Investments | 1 | $5058 | $8856 |
| Liabilities: |  |  |  |
| &nbsp;&nbsp;&nbsp;Earn-out liabilities | 3 | $560 | $711 |

---

**STRAN & COMPANY, INC.**

**NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(in thousands, except share and per share amounts)**

*<u>Investments</u>*

 

The Company's investments consisted of the following as of September 30, 2025:

---

| | | | |
|:---|:---|:---|:---|
|  | **Cost** | **Unrealized Gain <br> (Loss)** | **Fair Value** |
| Money market fund | $1774 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;— | $1774 |
| Corporate bonds | 1970 | 20 | 1990 |
| Mutual funds | 1290 | 4 | 1294 |
|  | $5034 | $24 | $5058 |

---

The Company's investments consisted of the following as of December 31, 2024:

---

| | | | |
|:---|:---|:---|:---|
|  | **Cost** | **Unrealized Gain <br> (Loss)** | **Fair Value** |
| Money market fund | $4843 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;— | $4843 |
| Corporate bonds | 2958 | (6) | 2952 |
| Mutual funds | 267 |  | 267 |
| US Treasury bills | 798 | (4) | 794 |
|  | $8866 | $(10) | $8856 |

---

*<u>Earn-Out Liabilities</u>*

In connection with certain of the Company's asset acquisitions, certain earn-out liabilities were established which reflect the estimated amounts payable upon the achievement of sales from acquired intangible assets over a period of time following the acquisition. As of September 30, 2025, the Company has earn-out liabilities associated with its purchase of Trend Brand Solutions, T.R. Miller Co., and Premier NYC.

Assumptions used in determining the fair value of the earn-out liabilities include the acquired asset's projected gross profit, discount rates, remaining time intervals and residual earn-out percentages. The following table summarizes the key unobservable inputs into the models used to estimate the fair value of the earn-out liabilities at September 30, 2025:

 

---

| | |
|:---|:---|
| **Unobservable Inputs** | **September 30, <br> 2025** |
| Projected annual gross profit | $907 - $4398 |
| Earnout percentage | 40.0% - 45.0% |
| Expected volatility | 25.0% |
| Risk-free rate | 3.6% - 4.2% |
| Discount rate | 5.0% - 5.2% |
| Required Metric Risk Premium | 5.3% - 7.7% |
| Time period to settlement | 0.2 - 2.2 years |

---

**STRAN & COMPANY, INC.**

**NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(in thousands, except share and per share amounts)**

A reconciliation of the earn-out liabilities is included below:

 

---

| | |
|:---|:---|
| Balance as of December 31, 2024 | $711 |
| Payments earned and paid | (151) |
| Balance as of September 30, 2025 | $560 |
| Current portion of contingent earn-out liabilities | $105 |
| Long-term contingent earn-out liabilities | $455 |

---

**C.**  **<u>INVENTORY</u>:** 

Inventory consists of the following:

---

| | | |
|:---|:---|:---|
|  | **September 30, <br> 2025** | **December 31, <br> 2024** |
| Finished goods (branded products) | $7533 | $5093 |
| Goods in process (un-branded products) | 207 | 296 |
|  | $7740 | $5389 |

---

**D.**  **<u>PROPERTY AND EQUIPMENT, NET</u>:** 

Property and equipment, net consists of the following:

---

| | | |
|:---|:---|:---|
|  | **September 30, <br> 2025** | **December 31, <br> 2024** |
| Leasehold improvements | $364 | $6 |
| Office furniture and equipment | 502 | 660 |
| Software | 3275 | 2967 |
| Transportation equipment | 62 | 62 |
|  | 4203 | 3695 |
| Accumulated depreciation | (2251) | (1994) |
|  | $1952 | $1701 |

---

The Company recorded depreciation expense of $166 and $131 for the three months ended September 30, 2025 and 2024, respectively. The Company recorded depreciation expense of $451 and $302 for the nine months ended September 30, 2025 and 2024, respectively. During the three months ended September 30, 2025, the Company wrote off fully depreciated assets totaling $192.

**STRAN & COMPANY, INC.**

**NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(in thousands, except share and per share amounts)**

**E.**  **<u>GOODWILL AND INTANGIBLE ASSETS</u>:** 

The following table summarizes the activity in the Company's goodwill balance:

---

| | |
|:---|:---|
| Balance as of December 31, 2023 (1) | $— |
| &nbsp;&nbsp;&nbsp;Gander Group Acquisition (see Note F) | 2542 |
| Measurement period adjustment | (221) |
| Balance as of December 31, 2024 | $2321 |
| Balance as of September 30, 2025 | $2321 |

---

(1) Net of accumulated impairment loss of $1,992 as of December
31, 2023.

The following table presents details of the Company's intangible assets, estimated lives and related accumulated amortization:

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | | **As of September 30, 2025** | **As of September 30, 2025** | **As of September 30, 2025** | **As of December 31, 2024** | **As of December 31, 2024** | **As of December 31, 2024** |
|  | **Weighted-**<br>**Average<br> Remaining <br> Useful Life** | **Gross** | **Accumulated <br> Amortization** | **Net <br> Carrying <br> Amount** | **Gross** | **Accumulated <br> Amortization** | **Net <br> Carrying<br> Amount** |
| Customer lists | 7.8 years | $5175 | $(1363) | $3812 | $5175 | $(1005) | $4170 |
| &nbsp;&nbsp;&nbsp;Total intangible assets - customer lists, net |  | $5175 | $(1363) | $3812 | $5175 | $(1005) | $4170 |
| Trade name | Indefinite | $654 | $— | $654 | $654 | $— | $654 |
| &nbsp;&nbsp;&nbsp;Total intangible assets - trade name |  | $654 | $— | $654 | $654 | $— | $654 |

---

The Company recorded amortization expense of $122 and $100 for the three months ended September 30, 2025 and 2024, respectively. The Company recorded amortization expense of $358 and $272 for the nine months ended September 30, 2025 and 2024, respectively.

The following table presents future estimated amortization expense based on existing intangible assets held for use:

---

| | |
|:---|:---|
| **Fiscal Years:** | |
| Remainder of 2025 | $124 |
| 2026 | 488 |
| 2027 | 488 |
| 2028 | 488 |
| 2029 | 488 |
| Thereafter | 1736 |
| Total | $3812 |

---

Actual future estimated amortization expense could differ from these estimated amounts as a result of future acquisitions, dispositions, impairments, and other factors or changes.

**STRAN & COMPANY, INC.**

**NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(in thousands, except share and per share amounts)**

**F.** **ACQUISITIONS** 

*<u>Gander Group Acquisition</u>*

 

On August 23, 2024, Stran Loyalty Solutions entered into the Sale Agreement, between Stran Loyalty Solutions and the Secured Party, pursuant to which Stran Loyalty Solutions agreed to purchase, on an as-is basis, all of the rights and interests of the Gander Group Assets from Secured Party as the Gander Group Transaction. Gander Group provides promotional products and programs to its customers. The Company entered into the acquisition to expand its customer base to other industries.

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 $1,099 (the "Cash Purchase Price"), and (b) cash payment of $370 per the Release Agreement (as defined below). The aggregate purchase price was $1,469.

As a result of the Gander Group Transaction Closing, the Company indirectly acquired substantially all of the assets of Gander Group, including all of the equity of Gander Group Louisiana, LLC, a Louisiana limited liability company, which became a wholly-owned subsidiary of Stran Loyalty Solutions.

In addition, Stran Loyalty Solutions entered into a Release Agreement, dated as of August 23, 2024, between Gander Group and Stran Loyalty Solutions (the "Release Agreement"). Under the Release Agreement, Gander Group granted a full and complete waiver and release of Stran Loyalty Solutions and its affiliates of any non-competition, non-solicitation, or similar restrictive covenants of any parties owed to Gander Group or any of its affiliates and Stran was required to pay an additional $370 to Gander Group.

The Sale Agreement and the Release Agreement included provisions for indemnification, reimbursement for returned items, handling of assets and liabilities during Gander Group's wind-down, and certain other matters.

---

| | |
|:---|:---|
| Cash | $1099 |
| Gander release agreement payments | 370 |
| Total consideration | $1469 |

---

The following table summarizes the purchase price allocations relating to the Gander Group Acquisition:

---

| | |
|:---|:---|
| Accounts receivable | $1717 |
| Prepaid expenses and other assets | 946 |
| Inventory | 939 |
| Customer relationships | 1458 |
| Goodwill | 2542 |
| Trade name | 654 |
| Other long-term assets | 58 |
| Accounts payable and accrued expenses | (4698) |
| Customer deposits | (2147) |
| Total consideration | $1469 |

---

The Gander Group Assets were valued using a combination of a multi-period excess earnings methodology, a form of a discounted cash flow approach, and a relief from royalty methodology, a form of a present value of cash flows approach. The $1,717 balance of accounts receivable is the fair value of accounts receivable, net of amounts that are expected to be collected as of the acquisition date. The goodwill represents the excess fair value after the allocation of intangibles, of which approximately $2,321 is expected to be deductible for tax purposes.

The Company incurred approximately $435 of acquisition related transaction costs in conjunction with the Gander Group Acquisition.

**STRAN & COMPANY, INC.**

**NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(in thousands, except share and per share amounts)**

*Pro forma disclosure for the Gander Group Acquisition*

 

The following unaudited pro forma financial information reflects the consolidated results of operations of the Company for the nine months ended September 30, 2024, as if the Gander Group Acquisition had taken place on January 1, 2024. The pro forma financial information is not necessarily indicative of the results of operations as they would have been had the transactions been effected on the assumed date:

---

| | |
|:---|:---|
| Sales | $85803 |
| Net loss | $(32) |

---

The following unaudited pro forma financial information reflects the amounts of revenue and net loss of Gander Group included in the consolidated results of operations of the Company for the period from the date of acquisition (August 23, 2024) through September 30, 2024:

---

| | |
|:---|:---|
| Sales | $3488 |
| Net loss | $(187) |

---

**G.**  **<u>ACCOUNTS PAYABLE AND ACCRUED EXPENSES:</u>** 

Accounts payable and accrued expenses consist of the following:

---

| | | |
|:---|:---|:---|
|  | **September 30,<br> 2025** | **December 31, <br> 2024** |
| Inventory purchases | $5427 | $6363 |
| Accrued expenses | 2035 | 2556 |
|  | $7462 | $8919 |

---

**H.**  **<u>REWARD CARD PROGRAM LIABILITY</u>:** 

The Company manages reward card programs for customers. Under this program, 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 reward card program liabilities totaling $2,951 and $6,000, respectively.

**I.**  **<u>INSTALLMENT PAYMENT LIABILITIES:</u>** 

The installment payment liabilities incurred in connection with certain of the Company's asset acquisitions were initially measured at fair value on the date of acquisition by discounting the contractually agreed upon payments using the Bloomberg B+ corporate yield curve as of the valuation date, applying rates commensurate with the term to payment. The credit rating was determined utilizing Bloomberg's default risk function for the Company as of the respective acquisition valuation dates. The installment payment amounts and payment dates were based on the purchase agreements and the discount rates utilized at the date of the Company's asset acquisition.

**STRAN & COMPANY, INC.**

**NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(in thousands, except share and per share amounts)**

A reconciliation of the installment payment liabilities is included below:

---

| | |
|:---|:---|
| Balance as of December 31, 2024 | $790 |
| &nbsp;&nbsp;&nbsp;Interest accretion | 35 |
| &nbsp;&nbsp;&nbsp;Payments made | (255) |
| Balance as of September 30, 2025 | $570 |
| Current portion of installment payment liabilities | $170 |
| Long-term installment payment liabilities | $400 |

---

**J.**  **<u>REVENUE</u>:** 

Revenue disaggregated according to the timing of transfer of goods or services (e.g., at a point in time) was as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended <br> September 30,** | **Three Months Ended <br> September 30,** | **Nine Months Ended <br> September 30,** | **Nine Months Ended <br> September 30,** |
| <br>**Revenue generated per major product category** | **2025** | **2024** | **2025** | **2024** |
| Promotional products - dropshipping | $9590 | $7926 | $30728 | $24464 |
| Promotional products – bulk dropshipping | 2170 | 1872 | 12085 | 10761 |
| Promotional products – Company owned inventory | 3401 | 3270 | 10591 | 9474 |
| Casino continuity program | 8336 | 3488 | 25901 | 3488 |
| Redemption code program |  | 1856 |  | 1856 |
| Promotional products – third-party distributor | 1862 | 1307 | 6559 | 4383 |
| Rewards program | 257 | 308 | 847 | 848 |
| Additional services | 365 | 117 | 541 | 390 |
|  | $25981 | $20144 | $87252 | $55664 |

---

Unearned revenue includes customer deposits and deferred revenue which represent prepayments from customers. The Company had unearned revenue as follows:

---

| | | |
|:---|:---|:---|
|  | **September 30, <br> 2025** | **September 30, <br> 2024** |
| Balance at January 1, | $4423 | $1116 |
| &nbsp;&nbsp;&nbsp;Revenue recognized | (7915) | (1361) |
| &nbsp;&nbsp;&nbsp;Amounts collected or invoiced | 7651 | 3247 |
| Balance at September 30, | $4159 | $3002 |

---

For the nine months ended September 30, 2025 and 2024, the Company recognized $3,430 thousand and $1,072 thousand associated with unearned revenue balances outstanding at December 31, 2024 and 2023, respectively.

**K.**  **<u>COMMITMENTS AND CONTINGENCIES</u>:** 

*<u>Legal Proceedings</u>*

 

The Company may from time to time become involved in various legal actions incidental to our business. As of the date of this report, the Company is not involved in any legal proceedings that it believes could have a material adverse effect on its financial position or results of operations. However, the outcome of any current or future legal proceeding is inherently difficult to predict and any dispute resolved unfavorably could have a material adverse effect on the Company's business, financial position, and operating results.

 

 

**STRAN & COMPANY, INC.**

**NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(in thousands, except share and per share amounts)**

 

*<u>Lease Agreements - Operating Leases</u>*

 

On May 31, 2020, the Company renewed a lease for a 10,500 square foot office space in North Quincy, MA. The lease renewed on June 1, 2020 and is for a term of 60 months from the renewal date. This lease terminated on May 31, 2025.

On February 1, 2023, the Company entered into a lease for a 5,600 square foot office space in Tomball, TX. The lease commenced on February 1, 2023 and is for a term of 36 months from the commencement date. The lease included an escalation clause with annual increases of approximately 2.3% increase per year. The Company recorded an initial right-of-use asset and lease liability of $184 thousand. The associated lease right-of-use asset and lease liability is $22 thousand as of September 30, 2025, based on the present value of payments and an incremental borrowing rate of 4%. As the Company's lease did not provide an implicit rate, the Company estimated the incremental borrowing rate based on the credit quality of the Company and by comparing interest rates available in the market for similar borrowings.

On May 31, 2023, the Company entered into a lease for a 25,000 square foot office space and warehouse in Walpole, MA. The lease commenced on June 1, 2023 and is for a term of 60 months from the commencement date. The lease included an escalation clause with annual increases of approximately 2% increase per year. The Company recorded an initial right-of-use asset of $849 thousand and lease liability of $834 thousand. The associated right-of-use asset and lease liability is $474 thousand and $469 thousand, respectively, as of September 30, 2025, based on the present value of payments and an incremental borrowing rate of 4.0%. As the Company's lease did not provide an implicit rate, the Company estimated the incremental borrowing rate based on the credit quality of the Company and by comparing interest rates available in the market for similar borrowings.

On March 9, 2021, Bangarang Enterprises, the former owner of the Gander Group, entered into a lease for a 9,000 square foot office space in Irvine, CA. The lease commenced on April 1, 2021 with a term of 48 months from the commencement date. The lease terminated on October 31, 2024.

On November 26, 2024, the Company entered into a lease for a 6,500 square foot office space in Irvine, CA. 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. The Company recorded an initial right-of-use asset and lease liability of $548 thousand. The associated right-of-use asset and lease liability is $421 thousand and $453 thousand, respectively, as of September 30, 2025, based on the present value of payments and an incremental borrowing rate of 6.7%. As the Company's lease did not provide an implicit rate, the Company estimated the incremental borrowing rate based on the credit quality of the Company and by comparing interest rates available in the market for similar borrowings.

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. The Company recorded an initial right-of-use asset of $1.3 million and lease liability of $1.5 million. The associated right-of-use asset and lease liability is $1,229 thousand and $1,477 thousand, respectively, as of September 30, 2025, based on the present value of payments and an incremental borrowing rate of 6.5%.

The Company rents other office space on terms of 12 months or less or on a month-to-month basis which are not included in the analysis above.

Operating lease expenses were approximately $52 thousand and $176 thousand for the three months ended September 30, 2025 and 2024, respectively, and $613 thousand and $502 thousand for the nine months ended September 30, 2025 and 2024, respectively, and were included in general and administrative expenses in the unaudited condensed consolidated statements of operations.

**STRAN & COMPANY, INC.**

**NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(in thousands, except share and per share amounts)**

The following schedule represents maturities of operating lease liabilities as of September 30, 2025:

---

| | |
|:---|:---|
|  | **Operating<br> Minimum <br> Lease<br> Payments** |
| Remainder of 2025 | $187 |
| 2026 | 702 |
| 2027 | 679 |
| 2028 | 335 |
| 2029 | 276 |
| Thereafter | 693 |
| Total | 2872 |
| &nbsp;&nbsp;&nbsp;Less amount representing interest | (396) |
| Present value of payments | $2476 |

---

The following schedule sets forth supplemental cash flow information related to operating leases for the three and nine months ended September 30, 2025 and 2024 :

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended<br> September 30,** | **Three Months Ended<br> September 30,** | **Nine Months Ended<br> September 30,** | **Nine Months Ended<br> September 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| Other information |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Operating cash flows from operating lease | $65 | $135 | $398 | $391 |

---

The aggregate weighted average remaining lease term was 4.9 years and 2.7 years as of September 30, 2025 and December 31, 2024. The aggregate weighted average discount rate was 5.9% and 3.7% as of September 30, 2025 and December 31, 2024.

**L.**  **<u>STOCKHOLDERS' EQUITY</u>:** 

*<u>Common Stock</u>*

 

In accordance with the Company's Articles of Incorporation dated May 24, 2021, the Company is authorized to issue 300,000,000 shares of $0.0001 par value common stock, of which 18,288,158 and 18,598,574 shares were issued and outstanding at September 30, 2025 and December 31, 2024, respectively. Common stockholders are entitled to one vote per share and are entitled to receive dividends when, as and if declared by the board of directors.

*<u>Warrants</u>*

 

On November 12, 2021, in connection with the Company's Initial Public Offering ("IPO") the Company issued 4,987,951 publicly-traded warrants ("IPO Warrants") at an exercise price of $5.1875 per unit, equal to 125% of the IPO Price. These IPO warrants were immediately exercisable with a five-year expiration term from the date of issuance. Due to the subsequent private placement (see below), the exercise price per share of the publicly-traded warrants was reduced to $4.81375 as of December 10, 2021. In conjunction with the Company's IPO, the Company issued warrants to the underwriters of the IPO which entitled the holders to purchase up to 149,639 shares of common stock. These warrants were exercisable beginning six months after the date of the IPO at an exercise price of $5.1875 per unit with a five-year expiration term.

On December 10, 2021, in connection with the completion of a private placement ("PIPE") for shares of the Company's common stock, the Company issued 5,464,903 warrants ("PIPE Warrants") at an exercise price of $4.97 per share. In conjunction with the Company's PIPE offering, the Company issued warrants to the placement agent for the PIPE which entitled the holders to purchase up to 131,158 shares of common stock at an exercise price of $4.97 per share. These warrants were exercisable beginning six months from the date of the PIPE with a five-year expiration term.

**STRAN & COMPANY, INC.**

**NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(in thousands, except share and per share amounts)**

As of September 30, 2025, IPO warrants totaling 659,456 have been exercised.

As of September 30, 2025 and December 31, 2024, there have been no exercises of the PIPE Warrants and there were 5,596,061 PIPE Warrants remaining outstanding.

The following table reflects all outstanding and exercisable warrants at September 30, 2025 and December 31, 2024:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Number of <br> Warrants <br> Outstanding** | **Weighted <br> Average<br> Exercise <br> Price** | **Weighted <br> Average<br> Life <br> (Years)** | **Aggregate <br> Intrinsic<br> Value** |
| Outstanding at December 31, 2024 | 10074195 | $4.91 | 3.00 | $— |
| Outstanding at September 30, 2025 | 10074195 | $4.91 | 2.25 | $— |

---

 

*<u>Stock Repurchase Program</u>*

On February 21, 2022, the board of directors of the Company authorized a repurchase of up to $10 million of the Company's shares from time to pursuant to a stock repurchase program. Under the terms of the repurchase program, the Company may repurchase shares through open market or negotiated private transactions. The timing and extent of any purchases depend upon ongoing assessments of the Company's capital needs, market conditions and the price of the Company's common stock, and other corporate considerations, as determined by management, and are subject to the restrictions relating to volume, price and timing under applicable laws, including but not limited to, Rule 10b-18 promulgated under the Exchange Act. On June 30, 2025, the Company adopted broker repurchase instructions pursuant to Rule 10b-18 and Rule 10b5-1 promulgated pursuant to the Exchange Act. Each of the above broker repurchase instructions was adopted in accordance with the restrictions that would apply to the Company if it were subject to the Stran & Company, Inc. Second Amended and Restated Insider Trading Policy (the "Insider Trading Policy"), which generally permits insider purchases of the Company's stock during the period beginning on the second business day following the day of public release of the Company's quarterly or annual earnings and ending on the last day of the then-current quarter; repurchases pursuant to a plan that meets the requirements of Rule 10b5-1; or that meet certain other requirements.

The Company did not repurchase any shares during the three and nine months ended September 30, 2024 or the three months ended March 31, 2025.

The following table provides information about stock repurchases during the period April 1, 2025 to September 30, 2025.

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Period** | **Total<br> Number of <br> Shares <br> Purchased** | **Average<br> Price Paid <br> Per Share** | **Total<br> Number of<br> Shares <br> Purchased <br> as Part of <br> Publicly <br> Announced <br> Plan or <br> Program** | **Maximum <br> Approximate<br> Dollar<br> Value of<br> Shares <br> that May <br> Yet be <br> Purchased <br> Under the <br> Plan or <br> Program** |
| April 1, 2025 - April 30, 2025 |  | $— |  | $6617594 |
| May 1, 2025 - May 31, 2025 | 30949 | $1.21 | 1846115 | $6575864 |
| June 1, 2025 - June 30, 2025 | 79344 | $1.37 | 1925459 | $6471760 |
| July 1, 2025 - July 31, 2025 | 76447 | $1.49 | 2001906 | $6357855 |
| August 1, 2025 - August 31, 2025 | 171250 | $1.51 | 2173156 | $6098713 |
| September 1, 2025 - September 30, 2025 | 19510 | $1.78 | 2192666 | $6063967 |

---

**STRAN & COMPANY, INC.**

**NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(in thousands, except share and per share amounts)**

**M.**  **<u>STOCK-BASED COMPENSATION</u>:** 

In November 2021, the board of directors adopted the Amended and Restated 2021 Equity Incentive Plan (the "2021 Plan") which provides for the granting of non-qualified stock options and restricted stock to the Company's employees, officers, directors, and outside consultants to purchase shares of the Company's common stock. As of September 30, 2025, the number of shares of common stock available for issuance under the 2021 Plan is 977,572 shares of common stock.

Stock-based compensation expense included the following components:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended <br> September 30,** | **Three Months Ended <br> September 30,** | **Nine Months Ended <br> September 30,** | **Nine Months Ended <br> September 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| Stock options | $7 | $3 | $17 | $19 |
| Restricted stock | 18 |  | 48 | 154 |
|  | $25 | $3 | $65 | $173 |

---

All stock-based compensation expense is recorded in general and administrative expense in the unaudited condensed consolidated statements of operations.

*<u>Stock Options</u>*

The fair value of options is estimated on the date of grant using the Black-Scholes option pricing model. The fair value is amortized as compensation cost on a straight-line basis over the requisite service period of the awards, which is generally the vesting period. Expected volatility is based on historical volatility from a representative sample of publicly traded companies. The expected term represents the period of time that the options are expected to be outstanding. The risk-free interest rate is estimated using the rate of return on U.S. Treasury Notes with a life that approximates the expected life of the option. Stock-based compensation is based on awards that are ultimately expected to vest.

Option awards are generally granted with an exercise price equal to the fair value of the Company's stock at the date of grant; those options generally vest based on four years of continuous service and have 10-year contractual terms.

A summary of option activity under the 2021 Plan as of and for the nine months ended September 30, 2025 is presented below:

---

| | | | |
|:---|:---|:---|:---|
| **Options** | **Shares** | **Weighted <br> Average Exercise<br> Price** | **Aggregate <br> Intrinsic<br> Value** |
| Outstanding at January 1, 2025 | 1376333 | $4.03 | $— |
| Granted | 55000 | 1.34 |  |
| Forfeited or expired and other adjustments | (20834) | 3.63 |  |
| Outstanding at September 30, 2025 | 1410499 | $3.89 | $40 |
| Vested and exercisable at September 30, 2025 | 1326817 | $3.99 | $16 |

---

The weighted-average remaining contractual term for the options outstanding and exercisable is approximately 6.2 years and 6.2 years, respectively, as of September 30, 2025.

*<u>Restricted Stock</u>*

Restricted stock consists of time-based restricted stock units ("RSUs") and performance-based restricted stock units (PSUs). RSUs granted under the 2021 Plan generally vest based on continued services, and are settled upon vesting with shares of the Company's common stock on a one-for-one basis. PSUs granted under the 2021 Plan are issued and vest immediately as various performance goals and targets are achieved.

**STRAN & COMPANY, INC.**

**NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(in thousands, except share and per share amounts)**

A summary of restricted stock activity under the 2021 Plan as of and for the nine months ended September 30, 2025 is presented below:

---

| | |
|:---|:---|
| **Restricted Stock** | **Time-Based <br> RSUs** |
| Outstanding at January 1, 2025 | 4000 |
| &nbsp;&nbsp;&nbsp;Granted | 57251 |
| &nbsp;&nbsp;&nbsp;Vested | (33312) |
| &nbsp;&nbsp;&nbsp;Forfeited |  |
| Outstanding at September 30, 2025 | 27939 |

---

**N.**  **<u>INCOME (LOSS) PER SHARE</u>:** 

The following outstanding shares of common stock equivalents were excluded from the computation of diluted net loss per share for the periods in which a net loss is presented because their effect would have been anti-dilutive.

The following tables set forth the computation of basic and diluted net income per share of common stock for the three and nine months ended September 30, 2025:

---

| | | |
|:---|:---|:---|
|  | **For the<br> Three and Nine <br> Months Ended <br> September 30, 2025** | **For the <br> Three and Nine <br> Months Ended <br> September 30, 2024** |
| Warrants | 10074195 | 10074195 |
| Stock options | 1410499 | 955334 |
|  | 11484694 | 11029529 |

---

For the three and nine months ended September 30, 2025 and 2024, as a result of the net losses in each of these periods, all warrants and stock options have been excluded from the calculation of diluted net loss per share and, therefore, there was no difference in the weighted average number of common shares for basic and diluted loss per share as the effect of all potentially dilutive shares outstanding was anti-dilutive.

**O. <u>SEGMENTS</u>:**

There is no expense or asset information that is supplemental to information disclosed within the unaudited condensed consolidated financial statements that is regularly provided to the CODM to monitor and evaluate segment performance.

The Company's segments are Stran & Company, Inc. ("Stran") and Stran Loyalty Solutions, LLC ("SLS"). Our reportable segments are described below.

The Stran segment's business is focused on being an outsourced marketing solutions and promotional products provider for a variety of customers and industries, working closely with customers to develop sophisticated marketing programs that leverage Stran's promotional products and loyalty incentive expertise. Stran purchases products and branding through various third-party manufacturers and decorators and resells the finished goods to customers. The segment earns the majority of its revenue from the sale of unique, quality promotional products for a wide variety of industries primarily to support marketing efforts.

The SLS segment's business is focused on the casino, gaming, and entertainment industries as an extension of the Company's newly formed Casino Continuity and Loyalty group. The group specializes in creating high-quality, branded merchandise for casinos, sourced through various third-party manufacturers, focusing on promotional products that enhance customer loyalty and engagement. It partners with nationally recognized brands to create high-quality, custom products that resonate with casino patrons, helping casinos drive redemption rates and return on investment through tailored merchandise and marketing solutions to build recurring revenues for SLS customers and the segment itself.

The accounting policies of our reportable segments are the same as those described in Note A, "Organization and Summary of Significant Accounting Policies" to the unaudited condensed consolidated financial statements included in this report.

**STRAN & COMPANY, INC.**

**NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(in thousands, except share and per share amounts)**

For each of the two segments, the CODM uses segment gross margin and segment operating profits or losses in the annual budgeting and forecasting process. The CODM considers budget-to-actual variances on a monthly basis for revenue as well as profit measures when making decisions about allocating capital and personnel to the segments. The CODM uses segment gross margin and segment operating income in determining the compensation of certain employees, primarily for its recently acquired Gander business, which is consolidated as part of the SLS subsidiary and also comprises the segment SLS.

As of September 30, 2025 Stran and SLS had total assets of $38,937 and $11,325, respectively. As of December 31, 2024, Stran and SLS had total assets of $45,206 and $9,944, respectively. The entire goodwill balance of $2,321 as of September 30, 2025 and December 31, 2024, was allocated to the SLS segment.

Revenue and costs are directly attributed to our segments, and the revenues recognized as well as the costs incurred in generating those revenues within each segment are distinguishable based on the information systems in which each segment's financial information gets recorded. There are no intersegment revenues or other transactions between the two segments that are eliminated in consolidation by the Company for external reporting.

The table below presents information about reported segments for the three and nine months ended September 30, 2025 and 2024.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **For the Three Months Ended** | **For the Three Months Ended** | **For the Three Months Ended** | **For the Three Months Ended** | **For the Three Months Ended** | **For the Three Months Ended** |
|  | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2024** | **September 30, 2024** | **September 30, 2024** |
|  | **Stran** | **SLS** | **Total** | **Stran** | **SLS** | **Total** |
| Sales | $17643 | $8338 | $25981 | $16656 | $3488 | $20144 |
| Gross profit | 5510 | 1562 | 7072 | 5294 | 658 | 5952 |
| Loss from operations | (1374) | (408) | (1782) | (2025) | (159) | (2184) |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **For the Nine Months Ended** | **For the Nine Months Ended** | **For the Nine Months Ended** | **For the Nine Months Ended** | **For the Nine Months Ended** | **For the Nine Months Ended** |
|  | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2024** | **September 30, 2024** | **September 30, 2024** |
|  | Stran | SLS | Total | Stran | SLS | Total |
| Sales | $60343 | $26909 | $87252 | $52176 | $3488 | $55664 |
| Gross profit | 19895 | 5528 | 25423 | 16374 | 658 | 17032 |
| Loss from operations | (1281) | (641) | (1922) | (3802) | (159) | (3961) |

---

The segment SLS was not a part of the Company until the segment was acquired and all of its business operations were incorporated within the Company's newly created subsidiary on August 23, 2024. The Stran segment's operations have remained consistent for all periods presented, however, the Company only had one operating and reportable segment prior to the acquisition.

**P. <u>CREDIT LOSSES</u>:**

The Company is exposed to credit losses primarily through sales of products and services. The Company's expected loss allowance methodology for accounts receivable is developed using historical collection experience, current and future economic and market conditions and a review of the current status of customers' trade accounts receivable. Customers are pooled based on sharing specific risk factors. Due to the short-term nature of such receivables, the estimated accounts receivable that may not be collected is based on aging of the accounts receivable balances.

Customers are assessed for credit worthiness upfront through a credit review, which includes assessment based on the Company's analysis of their financial statements when a credit rating is not available. The Company evaluates contract terms and conditions, country and political risk, and may require prepayment to mitigate risk of loss. Specific allowance amounts are established to record the appropriate provision for customers that have a higher probability of default. The Company monitors changes to the receivables balance on a timely basis, and balances are written off as they are determined to be uncollectible after all collection efforts have been exhausted. Estimates of potential credit losses are used to determine the allowance. It is based on assessment of anticipated payment and all other historical, current and future information that is reasonably available.

**STRAN & COMPANY, INC.**

**NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(in thousands, except share and per share amounts)**

The accounts receivable balance from all sources on the Company's consolidated balance sheets as of September 30, 2025 was $17,028, net of $1,162 (inclusive of $427 for related party receivables) of allowances. The following table provides a roll-forward of the allowance for credit losses for the nine months ended September 30, 2025 and 2024 that is deducted from the amortized cost basis of accounts receivable to present the net amount expected to be collected:

---

| | | |
|:---|:---|:---|
|  | **September 30, <br> 2025** | **September 30, <br> 2024** |
| Balance of allowance for credit losses, beginning of year | $(791) | $(317) |
| Write off charged against the allowance | 165 | 57 |
| Net (increase) decrease in allowance estimate | (536) | (100) |
| Balance of allowance for credit losses, end of period | $(1162) | $(360) |

---

**Q. <u>RELATED PARTY TRANSACTIONS</u>:**

*<u>Amount due from related party</u>*

 ****

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Name of Related Party** | **Relationship** | **Nature** | **September 30, <br> 2025** | **December 31, 2024** |
| Innovative Genetics, Inc. | Alejandro Tani, former member of board of directors, the former chairman of the Company's Nominating and Corporate Governance Committee, and a former member of the Compensation Committee and the Company's Audit Committee, is the Chief Executive Officer, Chief Information Officer, and majority owner of Innovative Genetics. | Limited, non-exclusive, revocable license to use Innovative Genetics' logos, trade name and trademarks on apparel and promotional products as branded products for sale to Innovative Genetics and Innovative Genetics-authorized persons. | $402 | $573 |

---

*<u>Amounts due and paid to related parties</u>*

 

Alan Chippindale, a member of the Company's board of directors, the chairman of the Compensation Committee, and a member of the Nominating and Corporate Governance Committee, is the President of Engage & Excel Enterprises Inc. ("Engage & Excel"). Engage & Excel provides certain merger and acquisition, management and recruitment consulting services to the Company. The Company has paid Engage & Excel for consulting services provided approximately $26 for the nine month period ending September 30, 2025 and $26 for the year ending December 31, 2024.

During the three months ending September 30, 2025, the Company entered into a stock purchase agreement with Andrew Shape, the Company's President, Chief Executive Officer and a member of its Board of Directors, to repurchase 100,000 shares of the Company's common stock at a price of $1.47 per share, for an aggregate purchase price of $147. The repurchase is being effected under, and will count toward, the Company's previously disclosed stock repurchase program authorized by the board of directors on February 21, 2022, which permits the Company to repurchase up to $10 million of its outstanding common stock (see Note L, "Stockholders' Equity" to the unaudited condensed consolidated financial statements included in this report).

**ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.**

 

*The following management's discussion and analysis of financial condition and results of operations provides information that management believes is relevant to an assessment and understanding of our plans and financial condition. The following financial information is derived from our financial statements and should be read in conjunction with such financial statements and notes thereto set forth elsewhere herein.*

**Use of Terms**

Except as otherwise indicated by the context and for the purposes of this report only, references in this report to "we," "us," "our," and the "Company" are to Stran & Company, Inc., a Nevada corporation, and its consolidated subsidiaries; references to "Stran" or "Stran & Company, Inc." are to Stran & Company, Inc., a Nevada corporation; references to "Stran Loyalty Solutions" or "SLS" are to Stran Loyalty Solutions, LLC, a Nevada limited liability company and a wholly-owned subsidiary of Stran & Company, Inc.; and references to "Gander Group Louisiana" are to Gander Group Louisiana, LLC, a Louisiana limited liability company, a wholly owned subsidiary of Stran Loyalty Solutions.

**Special Note Regarding Forward-Looking Statements**

This report contains forward-looking statements that are based on our management's beliefs and assumptions and on information currently available to us. All statements other than statements of historical facts are forward-looking statements. These statements relate to future events or to our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Forward-looking statements include, but are not limited to, statements about:

● evolving trade matters, including tariffs on goods that we purchase from manufacturers in other countries, and how they could impact our ability to compete cost-effectively;

● our goals and strategies;

● our business development, financial condition and results of operations;

● expected changes in our revenue, costs or expenditures;

● growth and competition trends in our industry;

● our expectations regarding demand for, and market acceptance of, our products or services;

● our expectations regarding our relationships with investors, institutional funding sources and other parties with whom we collaborate;

● our expectations regarding the availability and use of financing from credit facilities or sales of equity or debt securities;

● future fluctuations in general economic and business conditions in the markets in which we operate; and

● future relevant government policies and regulations relating to our industry.

In some cases, you can identify forward-looking statements by terms such as "may," "could," "will," "should," "would," "expect," "plan," "intend," "anticipate," "believe," "estimate," "predict," "potential," "project" or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties and other factors, which are, in some cases, beyond our control and which could materially affect results. Factors that may cause actual results to differ materially from current expectations include, among other things, those listed under Item 1A. "*Risk Factors*" included in our Annual Reports on Form 10-K filed under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and elsewhere in this report. If one or more of these risks or uncertainties occur, or if our underlying assumptions prove to be incorrect, actual events or results may vary significantly from those implied or projected by the forward-looking statements. No forward-looking statement is a guarantee of future performance.

In addition, statements that "we believe" and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

The forward-looking statements made in this report relate only to events or information as of the date on which the statements are made in this report. Except as expressly required by the federal securities laws, there is no undertaking to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changed circumstances or any other reason.

**Overview** 

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

In addition to selling branded products, we offer clients custom sourcing capabilities; a flexible and customizable e-commerce solution for promoting branded merchandise and other promotional products, managing promotional loyalty and incentives, print collateral, and event assets, order and inventory management, and designing and hosting online retail popup shops, fixed public retail online stores, and online business-to-business service offerings; creative and merchandising services; warehousing/fulfillment and distribution; print-on-demand; kitting; point of sale displays; and loyalty and incentive programs.

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

The majority of our revenue is derived from program business, although only a small percentage of our customers are considered programmatic. For the 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.

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.

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.

Our sales for the three months ended September 30, 2025 increased 29.0% compared to sales for 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.

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

**Emerging Growth Company and Smaller Reporting Company**

We qualify as an "emerging growth company" under the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act"). As a result, we are permitted to, and intend to, rely on exemptions from certain disclosure requirements. For so long as we are an emerging growth company, we will not be required to:

● have an auditor report on our internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act");

● present three years, and may instead present only two years, of audited financial statements, with correspondingly reduced "Management's Discussion and Analysis of Financial Condition and Results of Operations" disclosure in this report;

● comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor's report providing additional information about the audit and the financial statements (i.e., an auditor discussion and analysis);

● comply with certain greenhouse gas emissions disclosure and related third-party assurance requirements;

● submit certain executive compensation matters to stockholder advisory votes, such as "say-on-pay" and "say-on-frequency;" and

● disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the chief executive officer's compensation to median employee compensation.

In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended (the "Securities Act"), for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period. Our financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards.

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.

To the extent that we continue to qualify as a "smaller reporting company," as such term is defined in Rule 12b-2 under the Exchange Act, after we cease to qualify as an emerging growth company, certain of the exemptions and accommodations available to us as an emerging growth company may continue to be available to us as a smaller reporting company, including as to: (i) the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act; (ii) scaled executive compensation disclosures; (iii) presenting three years of audited financial statements; and (iv) compliance with certain greenhouse gas emissions disclosure and related third-party assurance requirements.

**Principal Factors Affecting Our Financial Performance**

Our operating results are primarily affected by the following factors:

● our ability to acquire new customers or retain existing customers;

● our ability to offer competitive product pricing;

● our ability to broaden product offerings;

● industry demand and competition;

● our ability to leverage technology and use and develop efficient processes;

● our ability to attract and retain talented employees;

● our ability to identify or to complete acquisitions or to successfully integrate the businesses we acquire; and

● market conditions and our market position.

**Results of Operations**

***Comparison of Three Months Ended September 30, 2025 and 2024***

 **

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

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended September 30,** | **Three Months Ended September 30,** | **Three Months Ended September 30,** | **Three Months Ended September 30,** |
|  | **2025** | **2025** | **2024** | **2024** |
|  | **Amount<br> (in thousands)** | **% of Revenues** | **Amount <br> (in thousands)** | **% of Revenues** |
| SALES |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Sales | $25981 | 100.0% | $19730 | 97.9% |
| &nbsp;&nbsp;&nbsp;Sales – related parties |  | —% | 414 | 2.1% |
| Total sales | 25981 | 100.0% | 20144 | 100.0% |
| COST OF SALES: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Cost of sales | 18909 | 72.8% | 13873 | 68.9% |
| &nbsp;&nbsp;&nbsp;Cost of sales - related parties |  | —% | 319 | 1.6% |
| Total cost of sales | 18909 | 72.8% | 14192 | 70.5% |
| GROSS PROFIT | 7072 | 27.2% | 5952 | 29.5% |
| OPERATING EXPENSES: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;General and administrative expenses | 8854 | 34.1% | 8136 | 40.4% |
| Total operating expenses | 8854 | 34.1% | 8136 | 40.4% |
| LOSS FROM OPERATIONS | (1782) | (6.9)% | (2184) | (10.8)% |
| OTHER INCOME: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Other income (expense) | 304 | 1.2% | (22) | (0.1)% |
| &nbsp;&nbsp;&nbsp;Interest income | 87 | 0.3% | 64 | 0.3% |
| &nbsp;&nbsp;&nbsp;Realized gain on investments | 79 | 0.3% | 103 | 0.5% |
| Total other income | 470 | 1.8% | 145 | 0.7% |
| LOSS BEFORE INCOME TAXES | (1312) | (5.0)% | (2039) | (10.1)% |
| Benefit from income taxes | (72) | (0.3)% | (1) | —% |
| NET LOSS | $(1240) | (4.8)% | $(2038) | (10.1)% |

---

 

 

*Sales*

Sales consist primarily of the selling price of the merchandise, service or outbound shipping and handling charges, less discounts, coupons redeemed, returns and credits. Sales by segment and in total were as follows (in thousands):

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | | | | | **Increase / (Decrease)** | **Increase / (Decrease)** |
|  | **Three Months**<br>**Ended**<br>**September 30,**<br>**2025** |<br><br>**%** **of Total** | **Three Months**<br>**Ended**<br>**September 30,**<br>**2024** |<br><br>**%** **of Total** | $**%** | **%** |
| &nbsp;&nbsp;&nbsp;Stran | $17643 | 67.9% | $16656 | 82.7% |  | 5.9% |
| &nbsp;&nbsp;&nbsp;SLS | 8338 | 32.1% | 3488 | 17.3% |  | 139.0% |
| Total sales | $25981 | 100.0% | $20144 | 100.0% |  | 29.0% |

---

Our total sales increased 29.0% to approximately $26.0 million for the three months ended September 30, 2025, from approximately $20.1 million for the three months ended September 30, 2024. Sales by our Stran segment increased to 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.

*Cost of Sales*

Cost of sales by segment and in total were as follows (in thousands):

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | | | | | **Increase / (Decrease)** | **Increase / (Decrease)** |
|  | **Three Months**<br>**Ended**<br>**September 30,**<br>**2025** |<br><br>**%** **of Total** | **Three Months**<br>**Ended**<br>**September 30,**<br>**2024** |<br><br>**%** **of Total** | $**%** | **%** |
| &nbsp;&nbsp;&nbsp;Stran | $12133 | 64.2% | $11362 | 80.1% |  | 6.8% |
| &nbsp;&nbsp;&nbsp;SLS | 6776 | 35.8% | 2830 | 19.9% |  | 139.4% |
| Total cost of sales | $18909 | 100.0% | $14192 | 100.0% |  | 33.2% |

---

Our total cost of sales increased 33.2% to approximately $18.9 million for the three months ended September 30, 2025, from approximately $14.2 million for 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.

*Gross Profit*

Gross profit by segment and in total were as follows (in thousands):

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | | | | | **Increase / (Decrease)** | **Increase / (Decrease)** |
|  | **Three Months**<br>**Ended**<br>**September 30,**<br>**2025** |<br><br>**%** **of Total** | **Three Months**<br>**Ended**<br>**September 30,**<br>**2024** |<br><br>**%** **of Total** | $**%** | **%** |
| &nbsp;&nbsp;&nbsp;Stran | $5510 | 77.9% | $5294 | 88.9% |  | 4.1% |
| &nbsp;&nbsp;&nbsp;SLS | 1562 | 22.1% | 658 | 11.1% |  | 137.4% |
| Total gross profit | $7072 | 100.0% | $5952 | 100.0% |  | 18.8% |

---

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 approximately $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 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 $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 amount of gross profit was due to the acquisition of the Gander Group Assets in August 2024.

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.

*Operating Expenses*

Operating expenses by segment and in total were as follows (in thousands):

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | | | | |<br>**Increase / (Decrease)** |
|  | **Three Months**<br>**Ended**<br>**September 30,**<br>**2025** |<br><br>**%** **of Total** | **Three Months**<br>**Ended**<br>**September 30,**<br>**2024** |<br><br>**%** **of Total** | **%** |
| &nbsp;&nbsp;&nbsp;Stran | $6885 | 78.4% | $7319 | 90.0%) | (5.9)% |
| &nbsp;&nbsp;&nbsp;SLS | 1969 | 21.6% | 817 | 10.0% | 141.0% |
| Total operating expenses | $8854 | 100.0% | $8136 | 100.0% | 8.8% |

---

Operating expenses consist of general and administrative expenses. Our total operating expenses increased 8.8% to approximately $8.9 million for the three months ended September 30, 2025, from approximately $8.1 million for 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.

*Other Income*

Other income consists of other income (expense), interest income, and realized gain on investments. Our other income was approximately $304 thousand for 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 thousand for the three months ended September 30, 2025, compared to approximately $64 thousand for 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.

*Income Tax Provision*

Income tax provision reflects statutory tax rates in the jurisdictions in which we operate adjusted for permanent book/tax differences.

Income tax 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.

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.

*Net Loss*

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.

***Comparison of Nine Months Ended September 30, 2025 and 2024***

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.

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
|  | **2025** | **2025** | **2024** | **2024** |
| SALES | **Amount<br> (in thousands)** | **% of<br> Revenues** | **Amount <br> (in thousands)** | **% of<br> Revenues** |
| &nbsp;&nbsp;&nbsp;Sales | $87252 | 100.0% | $55204 | 99.2% |
| &nbsp;&nbsp;&nbsp;Sales – related parties |  | —% | 460 | 0.8% |
| Total sales | 87252 | 100.0% | 55664 | 100.0% |
| COST OF SALES: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Cost of sales | 61829 | 70.9% | 38278 | 68.8% |
| &nbsp;&nbsp;&nbsp;Cost of sales - related parties |  | —% | 354 | 0.6% |
| Total cost of sales | 61829 | 70.9% | 38632 | 69.4% |
| GROSS PROFIT | 25423 | 29.1% | 17032 | 30.6% |
| OPERATING EXPENSES: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;General and administrative expenses | 27345 | 31.3% | 20993 | 37.7% |
| Total operating expenses | 27345 | 31.3% | 20993 | 37.7% |
| LOSS FROM OPERATIONS | (1922) | (2.2)% | (3961) | (7.1)% |
| OTHER INCOME: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Other income (expense) | 584 | 0.7% | (6) | —% |
| &nbsp;&nbsp;&nbsp;Interest income | 206 | 0.2% | 239 | 0.4% |
| &nbsp;&nbsp;&nbsp;Realized gain on investments | 146 | 0.2% | 176 | 0.3% |
| Total other income | 936 | 1.1% | 409 | 0.7% |
| LOSS BEFORE INCOME TAXES | (986) | (1.1)% | (3552) | (6.4)% |
| Provision for income taxes | 4 | —% | 2 | —% |
| NET LOSS | $(990) | (1.1)% | $(3554) | (6.4)% |

---

*Sales*

Sales consist primarily of the selling price of the merchandise, service or outbound shipping and handling charges, less discounts, coupons redeemed, returns and credits. Sales by segment and in total were as follows (in thousands):

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | | | | | **Increase / (Decrease)** | **Increase / (Decrease)** |
|  | **Nine Months**<br>**Ended**<br>**September 30,**<br>**2025** |<br><br>**%** **of Total** | **Nine Months**<br>**Ended**<br>**September 30,**<br>**2024** |<br><br>**%** **of Total** | $**%** | **%** |
| &nbsp;&nbsp;&nbsp;Stran | $60343 | 69.2% | $52176 | 93.7% |  | 15.7% |
| &nbsp;&nbsp;&nbsp;SLS | 26909 | 30.8% | 3488 | 6.3% |  | 671.5% |
| Total sales | $87252 | 100.0% | $55664 | 100.0% |  | 56.7% |

---

Our total sales increased 56.7% to approximately $87.3 million for the nine months ended September 30, 2025, from approximately $55.7 million for the nine months ended September 30, 2024. Sales by our Stran segment increased to 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.

 ****

*Cost of Sales*

Cost of sales by segment and in total were as follows (in thousands):

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | | | | | **Increase / (Decrease)** | **Increase / (Decrease)** |
|  | **Nine Months**<br>**Ended**<br>**September 30,**<br>**2025** |<br><br>**%** **of Total** | **Nine Months**<br>**Ended**<br>**September 30,**<br>**2024** |<br><br>**%** **of Total** | $**%** | **%** |
| &nbsp;&nbsp;&nbsp;Stran | $40448 | 65.4% | $35802 | 92.7% |  | 13.0% |
| &nbsp;&nbsp;&nbsp;SLS | 21381 | 34.6% | 2830 | 7.3% |  | 655.5% |
| Total cost of sales | $61829 | 100.0% | $38632 | 100.0% |  | 60.0% |

---

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.

*Gross Profit*

Gross profit by segment and in total were as follows (in thousands):

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | | | | | **Increase / (Decrease)** | **Increase / (Decrease)** |
|  | **Nine Months**<br>**Ended**<br>**September 30,**<br>**2025** |<br><br>**%** **of Total** | **Nine Months**<br>**Ended**<br>**September 30,**<br>**2024** |<br><br>**%** **of Total** | $**%** | **%** |
| &nbsp;&nbsp;&nbsp;Stran | $19895 | 78.3% | $16374 | 96.1% |  | 21.5% |
| &nbsp;&nbsp;&nbsp;SLS | 5528 | 21.7% | 658 | 3.9% |  | 740.1% |
| Total gross profit | $25423 | 100.0% | $17032 | 100.0% |  | 49.3% |

---

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.

Gross profit margin is defined as gross profit as a percentage of sales. The decrease in 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.

*Operating Expenses*

Operating expenses by segment and in total were as follows (in thousands):

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | | | | | **Increase / (Decrease)** | **Increase / (Decrease)** |
|  | **Nine Months**<br>**Ended**<br>**September 30,**<br>**2025** |<br><br>**%** **of Total** | **Nine Months**<br>**Ended**<br>**September 30,**<br>**2024** |<br><br>**%** **of Total** | $**%** | **%** |
| &nbsp;&nbsp;&nbsp;Stran | $21176 | 77.4% | $20176 | 96.1% |  | 5.0% |
| &nbsp;&nbsp;&nbsp;SLS | 6169 | 22.6% | 817 | 3.9% |  | 655.1% |
| Total operating expenses | $27345 | 100.0% | $20993 | 100.0% |  | 30.3% |

---

Operating expenses consist of general and administrative expenses. Our total operating expenses increased 30.3% to approximately $27.3 million for the nine months ended September 30, 2025, from approximately $21.0 million for the nine months ended September 30, 2024. Operating expenses of our 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 in the 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.

*Other Income*

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 thousand for 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.

*Income Tax Provision*

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.

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.

*Net Loss*

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.

**Liquidity and Capital Resources** 

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.

We believe that our current levels of cash will be sufficient to meet our anticipated cash needs for our operations and cash payment obligations for both the 12 months ended September 30, 2026 and in the long-term beyond this period, including our anticipated costs associated with being a public reporting company. We may, however, in the future require additional cash resources due to changing business conditions, implementation of our strategy to expand our business, or other investments or acquisitions we may decide to pursue. If our own financial resources are insufficient to satisfy our capital requirements, we may seek to sell additional equity or debt securities or obtain additional credit facilities. The sale of additional equity securities could result in dilution to our stockholders. The incurrence of indebtedness would result in increased debt service obligations and could require us to agree to operating and financial covenants that would restrict our operations. Financing may not be available in amounts or on terms acceptable to us, if at all. Any failure by us to raise additional funds on terms favorable to us, or at all, could limit our ability to expand our business operations and could harm our overall business prospects.

***Summary of Cash Flows***

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

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| | | |
|:---|:---|:---|
|  | **Nine Months Ended<br> September 30,** | **Nine Months Ended<br> September 30,** |
|  | **2025** | **2024** |
| Net cash (used in) provided by operating activities | $(4834) | $1427 |
| Net cash provided by investing activities | 3133 | 1516 |
| Net cash used in financing activities | (960) | (966) |
| Net change in cash and cash equivalents | (2661) | 1977 |
| Cash and cash equivalents - beginning | 9358 | 8059 |
| Cash and cash equivalents - ending | $6697 | $10036 |

---

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.

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.

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.

***Debt***

 ****

On November 22, 2021, we entered into the Revolving Demand Line of Credit Loan Agreement, dated as of November 22, 2021 (the "Initial Loan Agreement"), between the Company and Salem Five Cents Savings Bank, a Massachusetts savings bank ("Salem Five Cents"), for a revolving line of credit (the "Revolving Line of Credit"), consisting of aggregate loans of up to $7.0 million, evidenced by the Revolving Demand Line of Credit Note, dated November 22, 2021, by the Company in favor of Salem Five Cents (the "Demand Note"). 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 Cents and the Company (the "Loan Modification Agreement"), certain terms of the Initial Loan Agreement were modified as of February 12, 2024, as described below (as amended, the "Loan Agreement" and together with the Security Agreement and the Demand Note, the "Loan Documents").

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.

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.

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.

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.

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.

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.

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.

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:

● The Company was required to maintain a "Minimum Interest Coverage" of 1.25:1, tested for fiscal year ending December 31, 2024 only, and defined as follows: EBITDA (as defined below), divided by cash interest payments made on all debt. "EBITDA" was defined as the trailing year's total of net income before total interest expense, tax expense, and depreciation and amortization expense. EBITDA was required to be adjusted for extraordinary and/or non-cash items as defined in accordance with generally accepted accounting principles in the United States ("U.S. GAAP").

● The Company was required to maintain a "Minimum Debt Service Coverage Ratio" of 1.20:1, tested annually beginning with the fiscal year ending December 31, 2025, defined as follows: EBITDA, less cash taxes, distributions, dividends, stockholder withdrawals in any form, and unfinanced capital expenditures (as defined below), divided by all scheduled principal payments on all debt, plus cash interest payments made on all debt, plus cash payments made on contingent earn-out liabilities. "Unfinanced capital expenditures" was defined as the current fiscal-year-end net fixed assets, plus current fiscal-year-end depreciation, less prior fiscal-year-end net fixed assets, less the long-term debt increase.

● The Company's "Ratio of Debt to Tangible Net Worth" was required not to exceed 1.50:1, tested at financial year-end, defined as total liabilities divided by "tangible net worth," defined as total assets, less total liabilities, less intangible assets and amounts due from stockholder/related parties.

● The Company was required to maintain a "Minimum Liquidity" of $7.5 million at all times, defined as cash and short-term investments, less rewards program liabilities.

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.

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.

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.

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.

 ****

The Revolving Line of Credit was therefore terminated in 2024.

***Acquisition of Assets of Gander Group***

On August 23, 2024, Stran Loyalty Solutions entered into a Secured Party Sale Agreement, dated as of August 23, 2024 (the "Sale Agreement"), between Stran Loyalty Solutions and Sallyport Commercial Finance, LLC, a Delaware limited liability company ("Secured Party"), pursuant to which Stran Loyalty Solutions agreed to purchase, on an as-is basis, all of the rights and interests of Gander Group, in and to the Gander Group Assets from Secured Party as a private sale pursuant to Article 9 of the Uniform Commercial Code (the "Gander Group Transaction").

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").

At the consummation of the transactions contemplated by the Sale Agreement (the "Gander Group Transaction Closing"), Stran Loyalty Solutions paid the Cash Purchase Price, including the payment of the Transaction Expense Payment, and assumed the Gander Group Assumed Liabilities. As a result of the Gander Group Transaction Closing, the Company indirectly acquired substantially all of the asset of Gander Group, including all of the equity of Gander Group Louisiana, which became a wholly-owned subsidiary of Stran Loyalty Solutions.

In addition, Stran Loyalty Solutions entered into a Release Agreement, dated as of August 23, 2024, between Gander Group and Stran Loyalty Solutions (the "Release Agreement"). Under the Release Agreement, Gander Group granted a full and complete waiver and release of Stran Loyalty Solutions and its affiliates of any non-competition, non-solicitation, or similar restrictive covenants of any parties owed to Gander Group or any of its affiliates.

The Sale Agreement and the Release Agreement included provisions for indemnification, reimbursement for returned items, handling of assets and liabilities during Gander Group's wind-down, and certain other matters.

**Contractual Obligations**

***Property Leases***

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.

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.

The following is a schedule by years of future minimum lease payments (in thousands):

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| | |
|:---|:---|
| Remainder of 2025 | $187 |
| 2026 | 702 |
| 2027 | 679 |
| 2028 | 335 |
| 2029 | 276 |
| Thereafter | 693 |
| Total future non-cancelable minimum lease payments | $2872 |

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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.

***Other Cash Obligations***

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.

**Critical Accounting Estimates** 

We prepare our financial statements in accordance with U.S. GAAP. The preparation of financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses, and related disclosures. We evaluate our estimates and assumptions on an ongoing basis. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ significantly from the estimates made by our management. To the extent that there are differences between our estimates and actual results, our future financial statements presentation, financial condition, results of operations, and cash flows will be affected.

We believe that the assumptions and estimates associated with the valuation of goodwill and intangible assets, have the greatest potential impact on our financial statements. Therefore, we consider these to be our critical accounting policies and estimates. For further information on all of our significant accounting policies, see the notes to our financial statements beginning on page 1 of this Quarterly Report on Form 10-Q.

***Valuation of Goodwill and Intangible Assets***

We perform an annual impairment review of our goodwill during the fourth fiscal quarter of each year, and more frequently if we believe indicators of impairment exist. The process of evaluating the potential impairment of goodwill is highly subjective and requires significant judgment. To review for impairment, we first assess qualitative factors to determine whether events or circumstances lead to a determination that it is more likely than not that the fair value of our reporting unit is less than its carrying amount. Our qualitative assessment of the recoverability of goodwill, whether performed annually or based on specific events or circumstances, considers various macroeconomic, industry-specific and company-specific factors. These factors include: (i) severe adverse industry or economic trends; (ii) significant company-specific actions; (iii) current, historical or projected deterioration of our financial performance; or (iv) a sustained decrease in our market capitalization below our net book value. After assessing the totality of events and circumstances, if we determine that it is more likely than not that the fair value of our reporting unit to which goodwill is assigned is greater than its carrying amount, no further assessment is performed. If we determine that it is more likely than not that the fair value of our reporting unit is less than its carrying amount, we calculate the fair value of that reporting unit and compare the fair value to the reporting unit's net book value.

Determining the fair value of a reporting unit involves the use of significant estimates and assumptions. Our goodwill impairment test uses both the income approach and the market approach to estimate a reporting unit's fair value. The income approach is based on the discounted cash flow method that uses the reporting unit estimates for forecasted future financial performance, including revenues, operating expenses, and taxes, as well as working capital and capital asset requirements. These estimates are developed as part of our long-term planning process based on assumed market segment growth rates and our assumed market segment share, estimated costs based on historical data and various internal estimates. Projected cash flows are then discounted to a present value employing a discount rate that properly accounts for the estimated market weighted-average cost of capital, as well as any risk unique to the subject cash flows. The market approach is based on weighting the financial multiples of comparable companies and applying a control premium. A reporting unit's carrying value represents the assignment of various assets and liabilities, excluding certain corporate assets and liabilities, such as cash and debt.

We assess the impairment of long-lived assets, including purchased property and equipment, right-of-use assets, and intangible assets, whenever events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. Factors we consider important which could trigger an impairment review include: (i) significant underperformance relative to historical or projected future operating results, (ii) significant changes in the manner of our use of the acquired assets or the strategy for our overall business, or (iii) significant negative industry or economic trends. The process of evaluating the potential impairment of long-lived assets under the accounting guidance on property and equipment and intangible assets is also highly subjective and requires significant judgment. In order to estimate the fair value of long-lived assets, we typically make various assumptions about the future prospects of our business or the part of our business to which the long-lived assets relate. We also consider market factors specific to the business and estimate future cash flows to be generated by the business, which requires significant judgment as it is based on assumptions about market demand for our products over a number of future years. Based on these assumptions and estimates, we determine whether we need to take an impairment charge to reduce the value of the long-lived assets stated on our consolidated balance sheets to reflect their estimated fair value. Assumptions and estimates about future values and remaining useful lives are complex and often subjective. They can be affected by a variety of factors, including external factors, such as the real estate market, industry and economic trends, and internal factors, such as changes in our business strategy and our internal forecasts. Although we believe the assumptions and estimates we have made in the past have been reasonable and appropriate, changes in assumptions and estimates could materially impact our reported financial results.

**Recent Accounting Pronouncements**

For a discussion of recently adopted accounting pronouncements, see *Recently 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.

**ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.**

Not applicable.

**ITEM 4. CONTROLS AND PROCEDURES**

**Evaluation of Disclosure Controls and Procedures**

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) prior to the filing of this Quarterly Report on Form 10-Q. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this Quarterly Report on Form 10-Q, our disclosure controls and procedures were not effective due to the following material weaknesses in our internal control over financial reporting:

● There was a material weakness in our internal controls related to the proper design and implementation of control over formal review, approval, and evaluation of complex accounting transactions associated with business combinations.

● We identified a material weakness in internal control related to the proper design and implementation of certain controls over management's formal review process that includes multiple levels of review as well as timely review of accounts and reconciliations leading to material adjustments.

● We identified a material weakness in internal control related to the proper design and implementation of certain controls over income tax provision and management's review of the income tax provision.

● We did not design and maintain effective controls over financial reporting for accounts receivable and unearned revenue, freight charges, and inventory and cost of sales accounts.

● We did not design and maintain effective controls over financial reporting related to the proper presentation and disclosure for related party transactions.

● We did not effectively select and develop certain information technology general controls related to access and change management controls that led to deficiencies in the design and operation of control activities.

**Changes in Internal Control Over Financial Reporting**

Following the identification and communication of the material weaknesses described above, management continued to implement the following remediation actions relating to these material weaknesses during the three months ended September 30, 2025 as follows:

● We continued to utilize the services of external consultants for non-routine and/or technical accounting issues as they arise.

● We continued to expand and improve our review process for complex accounting transactions by enhancing access to accounting literature, engaging third-party professionals with whom to consult regarding complex accounting applications, and hiring additional staff with the requisite experience and training to supplement existing accounting professionals.

● Management, with the assistance of a third party, continued to perform an evaluation of the processes and procedures around our processes, internal control design gaps, and recommend process enhancements.

● We continued to implement enhancements and process improvements, including the design and implementation of reporting systems relating to the January 2025 launch of our new NetSuite enterprise resource planning system.

The material weaknesses identified above will not be considered fully remediated until these additional controls and procedures have operated effectively for a sufficient period of time and management has concluded, through testing, that these controls are effective. Our management will monitor the effectiveness of our remediation plans and will make changes management determines to be appropriate.

There were no changes in our internal control over financial reporting during the three months ended September 30, 2025 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting, except as described above.

**Inherent Limitation on the Effectiveness of Internal Control**

The effectiveness of any system of internal control over financial reporting, including ours, is subject to inherent limitations, including the exercise of judgment in designing, implementing, operating, and evaluating the controls and procedures, and the inability to eliminate misconduct completely. Accordingly, any system of internal control over financial reporting, including ours, no matter how well designed and operated, can only provide reasonable, not absolute assurances. In addition, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with our policies or procedures may deteriorate. We intend to continue to monitor and upgrade our internal controls as necessary or appropriate for our business but cannot assure that such improvements will be sufficient to provide us with effective internal control over financial reporting.

**PART II**

**<u>OTHER INFORMATION</u>**

**ITEM 1. LEGAL PROCEEDINGS.**

From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We are not currently aware of any such legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition or operating results.

**ITEM 1A. RISK FACTORS.**

There are no material changes from the risk factors previously disclosed in Item 1A, "Risk Factors" of our Annual Report on Form 10-K for the year ending December 31, 2024.

**ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.**

***Unregistered Sales of Equity Securities***

During the period covered by this report, we did not sell any equity securities that were not registered under the Securities Act and that were not previously disclosed under Item 3.02 in a Current Report on Form 8-K.

***Purchases of Equity Securities***

The following table provides information about our repurchases of common stock during the three months ended September 30, 2025.

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Period** | **Total<br> Number of<br> Shares<br> Purchased** | **Average<br> Price Paid<br> Per Share** | **Total<br> Number of<br> Shares<br> Purchased as<br> Part of<br> Publicly<br> Announced<br> Plan or <br> Program** | **Maximum<br> Approximate<br> Dollar Value<br> of Shares<br> that May<br> Yet be<br> Purchased<br> Under the<br> Plan or<br> Program** |
| July 1, 2025 - July 31, 2025 | 76447 | $1.49 | 2001906 | $6357855 |
| August 1, 2025 - August 31, 2025 | 171250 | $1.51 | 2173156 | $6098713 |
| September 1, 2025 - September 30, 2025 | 19510 | $1.78 | 2192666 | $6063967 |

---

(1) On February 21, 2022, the Company's board of directors
authorized a stock repurchase program (the "Repurchase Program") under which the Company may repurchase up to $10 million
of its outstanding shares of common stock in the open market, or privately negotiated transactions, in accordance with all applicable
securities laws and regulations, including Rule 10b-18 promulgated under the Exchange Act ("Rule 10b-18"). On May 20, 2022,
the Company adopted broker repurchase instructions pursuant to Rule 10b-18, which terminated on May 20, 2023. On June 2, 2023, the Company
adopted broker repurchase instructions pursuant to Rule 10b-18, which terminated on June 2, 2024. On May 15, 2025, the Company adopted
broker repurchase instructions pursuant to Rule 10b-18, which will terminate on May 15, 2026. On June 30, 2025, the Company adopted broker
repurchase instructions pursuant to Rule 10b-18 and Rule 10b5-1 promulgated pursuant to the Exchange Act ("Rule 10b5-1").
Each of the above broker repurchase instructions was adopted in accordance with the restrictions that would apply to the Company if it
were subject to the Stran & Company, Inc. Second Amended and Restated Insider Trading Policy (the "Insider Trading Policy"),
which generally permits insider purchases of the Company's stock during the period beginning on the second business day following
the day of public release of the Company's quarterly or annual earnings and ending on the last day of the then-current quarter;
repurchases pursuant to a plan that meets the requirements of Rule 10b5-1; or that meet certain other requirements. A copy of the Insider
Trading Policy was filed by the Company with the SEC on April 14, 2025 as Exhibit 19.1 to the Company's Annual Report on Form 10-K
for the year ended December 31, 2024.

(2) On August 28, 2025, the Company entered into a Stock Purchase
Agreement (the "Stock Purchase Agreement") with Andrew Shape (the "Seller"), the Company's President, Chief
Executive Officer and a member of its board of directors. Pursuant to the Stock Purchase Agreement, the Company repurchased from the
Seller 100,000 shares of the Company's common stock at a price of $1.47 per share, for an aggregate purchase price of $147,024.22
(the "Repurchase"). The Repurchase was effected under, and counted toward, the Company's Repurchase Program. Because
the Seller is an executive officer and director of the Company and the dollar value of the transaction exceeds the lesser of $120,000
or one percent of the average of the Company's total assets at year-end for the last two completed fiscal years, the Repurchase
constituted an "Interested Transaction" under the Company's Related Party Transactions Policy (the "Policy")
and a transaction with a "related person" under Item 404(a) of Regulation S-K. In accordance with the Policy and the Nominating
and Corporate Governance Committee Charter adopted by the Company's board of directors, the terms of the Stock Purchase Agreement
and the Repurchase were reviewed and unanimously approved by the board of directors' Nominating and Corporate Governance Committee,
which is composed entirely of independent directors, and unanimously approved by the full board of directors, which is composed of a
majority of independent directors.

**ITEM 3. DEFAULTS UPON SENIOR SECURITIES.**

None.

**ITEM 4. MINE SAFETY DISCLOSURES.**

Not applicable.

**ITEM 5. OTHER INFORMATION.**

We have no information to disclose that was required to be disclosed in a Current Report on Form 8-K during the three months ended September 30, 2025 but was not reported. There have been no material changes to the procedures by which security holders may recommend nominees to our board of directors where those changes were implemented after the Company last provided disclosure of such procedures.

None of our directors or "officers," as defined in Rule 16a-1(f) under the Exchange Act, adopted or terminated a Rule 10b5-1 trading plan or arrangement or a non-Rule 10b5-1 trading plan or arrangement, as defined in Item 408(c) of Regulation S-K, during the fiscal quarter ended September 30, 2025.

**ITEM 6. EXHIBITS.**

---

| | |
|:---|:---|
| **Exhibit No.** | **Description** |
| 3.1 | [Articles of Incorporation of Stran & Company, Inc. (incorporated by reference to Exhibit 3.1 to the Registration Statement on Form S-1 filed on October 7, 2021)](http://www.sec.gov/Archives/edgar/data/1872525/000121390021051718/ea148470ex3-1_stranandco.htm) |
| 3.2 | [Amended and Restated Bylaws of Stran & Company, Inc. (incorporated by reference to Exhibit 3.2 to the Amendment No.1 to Registration Statement on Form S-1 filed on October 22, 2021)](http://www.sec.gov/Archives/edgar/data/1872525/000121390021054222/ea149269ex3-2_stranandco.htm) |
| 10.1 | [Independent Director Agreement, dated as of July 8, 2025, between Stran & Company, Inc. and Brian M Posner (incorporated reference to Exhibit 10.1 to the current report of Form 8-K filed on July 10, 2025)](http://www.sec.gov/Archives/edgar/data/1872525/000121390025062526/ea024846001ex10-1_stran.htm) |
| 10.2 | [Indemnification Agreement (incorporated by reference to Exhibit 10.14 to the Annual Report on Form 10-K filed on March 28, 2024)](http://www.sec.gov/Archives/edgar/data/1872525/000121390024027282/ea020255901ex10-14_stran.htm) |
| 10.3 | [Stock Purchase Agreement, dated as of August 28, 2025, between Stran & Company, Inc. and Andrew Shape (incorporated by reference to Exhibit 10.1 to the current report on Form 8-K filed on August 29, 2025)](http://www.sec.gov/Archives/edgar/data/1872525/000121390025082580/ea025519001ex10-1_stran.htm) |
| 31.1\* | [Certifications of Principal Executive Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](ea026467901ex31-1_stran.htm) |
| 31.2\* | [Certifications of Principal Financial and Accounting Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](ea026467901ex31-2_stran.htm) |
| 32.1\*\* | [Certifications of Principal Executive Officer furnished pursuant to Section 906 of the Sarbanes-Oxley Act of 2002](ea026467901ex32-1_stran.htm) |
| 32.2\*\* | [Certifications of Principal Financial and Accounting Officer furnished pursuant to Section 906 of the Sarbanes-Oxley Act of 2002](ea026467901ex32-2_stran.htm) |
| 101.INS\* | Inline XBRL Instance Document |
| 101.SCH\* | Inline XBRL Taxonomy Extension Schema Document |
| 101.CAL\* | Inline XBRL Taxonomy Extension Calculation Linkbase Document |
| 101.DEF\* | Inline XBRL Taxonomy Extension Definition Linkbase Document |
| 101.LAB\* | Inline XBRL Taxonomy Extension Label Linkbase Document |
| 101.PRE\* | Inline XBRL Taxonomy Extension Presentation Linkbase Document |
| 104\* | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |

---

\* Filed herewith

\*\* Furnished herewith

**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

---

| | | |
|:---|:---|:---|
| Date: November 12, 2025 | **STRAN & COMPANY, INC.** | **STRAN & COMPANY, INC.** |
|  | /s/ Andrew Shape | /s/ Andrew Shape |
|  | Name: | Andrew Shape |
|  | Title: | Chief Executive Officer and President |
|  | *(Principal Executive Officer)* | *(Principal Executive Officer)* |
|  | /s/ David Browner | /s/ David Browner |
|  | Name: | David Browner |
|  | Title: | Chief Financial Officer |
|  | *(Principal Accounting and Financial Officer)* | *(Principal Accounting and Financial Officer)* |

---

## Exhibit 31.1

**Exhibit 31.1**

**CERTIFICATIONS**

I, Andrew Shape, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;1. I have reviewed this Quarterly Report on Form 10-Q of Stran & Company, Inc.;

&nbsp;&nbsp;&nbsp;&nbsp;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;

&nbsp;&nbsp;&nbsp;&nbsp;3. Based on my knowledge, the financial statements, and other financial information included in this report,
fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for,
the periods presented in this report;

&nbsp;&nbsp;&nbsp;&nbsp;4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting
(as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) Designed such disclosure controls and procedures, or caused
such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which
this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) Designed such internal control over financial reporting, or
caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) Evaluated the effectiveness of the registrant's disclosure
controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures,
as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d) Disclosed in this report any change in the registrant's
internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's
fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation
of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board
of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) All significant deficiencies and material weaknesses in the
design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's
ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) Any fraud, whether or not material, that involves management
or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | |
|:---|:---|
| Date: November 12, 2025 |  |
|  | /s/ Andrew Shape |
|  | Andrew Shape |
|  | Chief Executive Officer and President |
|  | *(Principal Executive Officer)* |

---

## Exhibit 31.2

**Exhibit 31.2**

**CERTIFICATIONS**

I, David Browner, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;1. I have reviewed this Quarterly Report on Form 10-Q of Stran & Company, Inc.;

&nbsp;&nbsp;&nbsp;&nbsp;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;

&nbsp;&nbsp;&nbsp;&nbsp;3. Based on my knowledge, the financial statements, and other financial information included in this report,
fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for,
the periods presented in this report;

&nbsp;&nbsp;&nbsp;&nbsp;4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting
(as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) Designed such disclosure controls and procedures, or caused
such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which
this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) Designed such internal control over financial reporting, or
caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) Evaluated the effectiveness of the registrant's disclosure
controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures,
as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d) Disclosed in this report any change in the registrant's
internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's
fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation
of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board
of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) All significant deficiencies and material weaknesses in the
design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's
ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) Any fraud, whether or not material, that involves management
or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | |
|:---|:---|
| Date: November 12, 2025 |  |
|  | /s/ David Browner |
|  | David Browner |
|  | Chief Financial Officer |
|  | *(Principal Financial and Accounting Officer)* |

---

## Exhibit 32.1

**Exhibit 32.1**

**CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

The undersigned Chief Executive Officer of STRAN & COMPANY, INC. (the "Company"), DOES HEREBY CERTIFY that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. The Company's Quarterly Report on Form 10-Q for the
quarter ended September 30, 2025 (the "Report"), fully complies with the requirements of Section 13(a) or 15(d) of the Securities
Exchange Act of 1934; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Information contained in the Report fairly presents, in all
material respects, the financial condition and results of operation of the Company.

IN WITNESS WHEREOF, the undersigned has executed this statement on November 12, 2025.

---

| |
|:---|
| /s/ Andrew Shape |
| Andrew Shape |
| Chief Executive Officer and President |
| *(Principal Executive Officer)* |

---

A signed original of this written statement required by Section 906 has been provided to Stran & Company, Inc. and will be retained by Stran & Company, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

The forgoing certification is being furnished to the Securities and Exchange Commission pursuant to 18 U.S.C. Section 1350. It is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

## Exhibit 32.2

**Exhibit 32.2**

**CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

The undersigned Chief Financial Officer of STRAN & COMPANY, INC. (the "Company"), DOES HEREBY CERTIFY that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. The Company's Quarterly Report on Form 10-Q for the
quarter ended September 30, 2025 (the "Report"), fully complies with the requirements of Section 13(a) or 15(d) of the Securities
Exchange Act of 1934; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Information contained in the Report fairly presents, in all
material respects, the financial condition and results of operation of the Company.

IN WITNESS WHEREOF, the undersigned has executed this statement on November 12, 2025.

---

| |
|:---|
| /s/ David Browner |
| David Browner |
| Chief Financial Officer |
| *(Principal Financial and Accounting Officer)* |

---

A signed original of this written statement required by Section 906 has been provided to Stran & Company, Inc. and will be retained by Stran & Company, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

The forgoing certification is being furnished to the Securities and Exchange Commission pursuant to 18 U.S.C. Section 1350. It is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.