Stran & pany(SWAG) - 2024 Q4 - Annual Report

Financial Performance - Total sales increased by 8.8% to approximately $82.7 million for the year ended December 31, 2024, compared to approximately$76.0 million for the year ended December 31, 2023[260]. - Gross profit margin decreased to 31.2% in 2024 from 32.7% in 2023, with total cost of sales increasing by 11.1% to approximately $56.8 million[258][261]. - Total gross profit increased by 3.9$25.8 million for the year ended December 31, 2024, compared to approximately $24.9 million for the year ended December 31, 2023[262]. - Net loss for the year ended December 31, 2024, was approximately$4.1 million, compared to approximately $0.4 million for the year ended December 31, 2023[269]. - Total operating expenses increased by 17.6$30.7 million for the year ended December 31, 2024, from approximately $26.1 million for the year ended December 31, 2023[264]. Revenue Sources - Program clients accounted for 83.3$72.7 million in 2024, while the SLS segment (acquired Gander Group) generated approximately $9.9 million in sales[260]. - The acquisition of T R Miller in June 2023 and Gander Group Assets in August 2024 contributed to revenue growth[250]. Assets and Equity - The company had approximately$55.1 million in total assets and $31.6 million in total stockholders' equity as of December 31, 2024[250]. - Cash and cash equivalents as of December 31, 2024, were approximately$9.4 million, with investments of approximately $8.9 million[270]. - The Company had net deposits from reward card programs totaling approximately$6.0 million as of December 31, 2024, compared to $0.9 million as of December 31, 2023[297]. Operating Expenses and Liabilities - Operating expenses increased to 37.2$4.9 million[258]. - The Company had future non-cancelable minimum lease payments totaling $800,000, with$361,000 due in 2025[296]. - 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[290]. Tax and Cash Flow - The income tax provision for the year ended December 31, 2024, was approximately$5 thousand, compared to approximately $41 thousand for the year ended December 31, 2023[267]. - The company anticipates that its effective tax rate will remain similar to the rate recorded in 2024[268]. - Net cash provided by operating activities was approximately$2.8 million for the year ended December 31, 2024, compared to net cash used in operating activities of approximately $2.6 million for the year ended December 31, 2023[274]. - Net cash used in investing activities decreased to approximately$0.5 million for the year ended December 31, 2024, from approximately $3.7 million for the year ended December 31, 2023[275]. Future Outlook and Strategic Plans - The company plans to continue leveraging technology and expanding its product offerings to enhance customer retention and acquisition[256]. - The company may require additional cash resources in the future due to changing business conditions or strategic investments[272]. - The Company was required to maintain a minimum net worth of$2,000,000 at December 31, 2021, $2,750,000 at December 31, 2022, and$3,500,000 at December 31, 2023[284]. - The Company could not incur additional indebtedness or make capital expenditures except in the ordinary course of business following the Loan Modification Agreement[285]. Lease and Credit Agreements - A seven-year lease agreement for new office space was signed on January 10, 2025, with an initial base rent of approximately $21,000 per month[251]. - As of December 31, 2024, the Revolving Line of Credit had been terminated, and no funds were drawn from it as of December 31, 2023[289]. Goodwill and Impairment - The Company performed an annual impairment review of goodwill during the fourth fiscal quarter of each year, which requires significant judgment[302].