Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Mar. 27, 2023 | Jun. 30, 2022 | |
Document Information Line Items | |||
Entity Registrant Name | STRAN & COMPANY, INC. | ||
Trading Symbol | SWAG | ||
Document Type | 10-K | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Common Stock, Shares Outstanding | 18,316,253 | ||
Entity Public Float | $ 17,500,160 | ||
Amendment Flag | false | ||
Entity Central Index Key | 0001872525 | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Well-known Seasoned Issuer | No | ||
Document Period End Date | Dec. 31, 2022 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Shell Company | false | ||
Entity Ex Transition Period | false | ||
ICFR Auditor Attestation Flag | false | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Entity File Number | 001-41038 | ||
Entity Incorporation, State or Country Code | NV | ||
Entity Tax Identification Number | 04-3297200 | ||
Entity Address, Address Line One | 2 Heritage Drive | ||
Entity Address, Address Line Two | Suite 600 | ||
Entity Address, City or Town | Quincy | ||
Entity Address, State or Province | MA | ||
Entity Address, Postal Zip Code | 02171 | ||
Local Phone Number | 833-3309 | ||
City Area Code | 800 | ||
Title of 12(b) Security | Common Stock, $0.0001 par value per share | ||
Security Exchange Name | NASDAQ | ||
Entity Interactive Data Current | Yes | ||
Auditor Name | BF Borgers CPA PC | ||
Auditor Firm ID | 5041 | ||
Auditor Location | Lakewood, CO |
Balance Sheets
Balance Sheets - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
CURRENT ASSETS: | ||
Cash | $ 15,253,756 | $ 32,226,668 |
Short-Term Investments | 9,779,355 | |
Accounts Receivable, Net | 14,442,626 | 8,982,768 |
Deferred Income Taxes | 841,000 | 113,000 |
Inventory | 6,867,564 | 5,230,792 |
Prepaid Corporate Taxes | 87,459 | 87,459 |
Prepaid Expenses | 386,884 | 623,402 |
Deposits | 910,486 | 299,411 |
Total Current Assets | 48,569,130 | 47,563,500 |
PROPERTY AND EQUIPMENT, NET: | 1,000,090 | 615,837 |
OTHER ASSETS: | ||
Intangible Assets - Customer Lists, Net | 6,272,205 | 1,929,294 |
Right of Use Asset - Office Leases | 784,683 | 1,094,778 |
Total Other Assets | 7,056,888 | 3,024,072 |
Total Assets | 56,626,108 | 51,203,409 |
CURRENT LIABILITIES: | ||
Current Portion of Contingent Earn-Out Liabilities | 1,809,874 | 665,855 |
Current Portion of Lease Liability | 324,594 | 310,095 |
Accounts Payable and Accrued Expenses | 4,051,657 | 4,983,496 |
Accrued Payroll and Related | 608,589 | 836,915 |
Unearned Revenue | 633,148 | 721,608 |
Rewards Program Liability | 6,000,000 | 43,878 |
Sales Tax Payable | 365,303 | 106,824 |
Note Payable - Wildman | 162,358 | 162,358 |
Total Current Liabilities | 13,955,523 | 7,831,029 |
LONG-TERM LIABILITIES: | ||
Long-Term Contingent Earn-Out Liabilities | 2,845,944 | 976,078 |
Long-Term Lease Liability | 460,089 | 784,683 |
Total Long- Term Liabilities | 3,306,033 | 1,760,761 |
STOCKHOLDER’S EQUITY: | ||
Common Stock, $.0001 Par Value; 300,000,000 Shares Authorized, 18,475,521 and 19,753,852 Shares Issued and Outstanding as of December 31, 2022 and December 31, 2021, respectively | 1,848 | 1,976 |
Additional Paid-In Capital | 38,279,151 | 39,747,649 |
Retained Earnings | 1,083,553 | 1,861,994 |
Total Stockholder's Equity | 39,364,552 | 41,611,619 |
Total Liabilities & Stockholder's Equity | $ 56,626,108 | $ 51,203,409 |
Balance Sheets (Parentheticals)
Balance Sheets (Parentheticals) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 300,000,000 | 300,000,000 |
Common stock, shares issued | 18,475,521 | 19,753,852 |
Common stock, shares outstanding | 18,475,521 | 19,753,852 |
Statements of Earnings (Loss) a
Statements of Earnings (Loss) and Retained Earnings - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Statement [Abstract] | ||
SALES | $ 58,953,467 | $ 39,702,714 |
COST OF SALES: | ||
Purchases | 37,391,939 | 23,972,797 |
Freight | 4,991,854 | 3,893,847 |
Total Cost of Sales | 42,383,793 | 27,866,644 |
GROSS PROFIT | 16,569,674 | 11,836,070 |
OPERATING EXPENSES: | ||
General and Administrative Expenses | 18,075,369 | 12,273,949 |
Total Operating Expenses | 18,075,369 | 12,273,949 |
EARNINGS (LOSS) FROM OPERATIONS | (1,505,695) | (437,879) |
OTHER INCOME AND (EXPENSE): | ||
Other Income (Expense) | 112,507 | 702,280 |
Interest Income (Expense) | 94,680 | (136,661) |
Unrealized Gain (Loss) on Short-Term Investments | (179,120) | |
Total Other Income And (Expense) | 28,067 | 565,619 |
EARNINGS (LOSS) BEFORE INCOME TAXES | (1,477,628) | 127,740 |
PROVISION FOR INCOME TAXES | (699,187) | (107,500) |
NET EARNINGS (LOSS) | $ (778,441) | $ 235,240 |
NET EARNINGS (LOSS) PER COMMON SHARE | ||
Basic (in Dollars per share) | $ (0.04) | $ 0.02 |
Diluted (in Dollars per share) | $ (0.04) | $ 0.01 |
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING | ||
Basic (in Shares) | 19,202,619 | 10,928,043 |
Diluted (in Shares) | 19,202,619 | 21,023,688 |
Statements of Stockholders_ Equ
Statements of Stockholders’ Equity - USD ($) | Common Stock | Additional Paid in Capital | Retained Earnings | Total |
Balance at Dec. 31, 2020 | $ 1,000 | $ 1,626,754 | $ 1,627,754 | |
Balance (in Shares) at Dec. 31, 2020 | 10,000,000 | |||
IPO Stock Issuance, Net of Expenses | $ 499 | 17,944,652 | 17,945,151 | |
IPO Stock Issuance, Net of Expenses (in Shares) | 4,987,951 | |||
IPO Warrants Exercised | $ 39 | 1,871,179 | 1,871,218 | |
IPO Warrants Exercised (in Shares) | 387,867 | |||
PIPE Stock Issuance, Net | $ 437 | 19,778,614 | 19,779,051 | |
PIPE Stock Issuance, Net (in Shares) | 4,371,926 | |||
Stock-Based Compensation | $ 1 | 153,204 | 153,205 | |
Stock-Based Compensation (in Shares) | 6,108 | |||
Net Earnings | 235,240 | 235,240 | ||
Balance at Dec. 31, 2021 | $ 1,976 | 39,747,649 | 1,861,994 | 41,611,619 |
Balance (in Shares) at Dec. 31, 2021 | 19,753,852 | |||
IPO Warrants Exercised | $ 27 | 1,307,335 | 1,307,362 | |
IPO Warrants Exercised (in Shares) | 271,589 | |||
Asset Acquisition | $ 12 | 224,988 | 225,000 | |
Asset Acquisition (in Shares) | 120,660 | |||
Stock-Based Compensation | $ 11 | 331,406 | 331,417 | |
Stock-Based Compensation (in Shares) | 107,077 | |||
Stock Repurchase Program | $ (178) | (3,332,227) | (3,332,405) | |
Stock Repurchase Program (in Shares) | (1,777,657) | |||
Net Earnings | (778,441) | (778,441) | ||
Balance at Dec. 31, 2022 | $ 1,848 | $ 38,279,151 | $ 1,083,553 | $ 39,364,552 |
Balance (in Shares) at Dec. 31, 2022 | 18,475,521 |
Statements of Cash Flows
Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net Earnings (Loss) | $ (778,441) | $ 235,240 |
Adjustments to Reconcile Net Income (Loss) to Net Cash Provided by Operating Activities: | ||
Deferred Income Taxes (Credit) | (728,000) | (113,000) |
Depreciation and Amortization | 725,398 | 446,713 |
Gain on Extinguishment of Debt | (770,062) | |
Intangible Asset Impairment | 155,947 | 63,204 |
Reduction in Contingent Earn-Out Liability | 230,328 | (69,585) |
Stock-Based Compensation | 331,417 | 153,205 |
Unrealized Loss on Short-Term Investments | 179,120 | |
Changes in operating assets and liabilities: | ||
Accounts Receivable | (5,459,858) | (3,303,188) |
Inventory | (1,636,772) | (2,731,743) |
Prepaid Taxes | (87,459) | |
Prepaid Expenses | (87,473) | (500,886) |
Deposits | (287,084) | 25,516 |
Accounts Payable and Accrued Expenses | (931,839) | 1,715,563 |
Accrued Payroll and Related | (228,326) | (185,056) |
Corporate Income Taxes Payable | (231,980) | |
Unearned Revenue | (113,019) | 157,381 |
Rewards Program Liability | 5,956,122 | (129,392) |
Sales Tax Payable | 258,479 | 33,814 |
Net cash provided by operating activities | (2,414,001) | (5,291,715) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Additions to Intangible Assets - Customer Lists | (1,054,776) | |
Additions to Property and Equipment | (626,345) | (388,948) |
Purchase of Short-Term Investments | (9,965,823) | |
Net cash provided by in investing activities | (11,646,944) | (388,948) |
New Borrowings: | ||
Note Payable - Line of Credit | 5,725,000 | |
Debt Reduction: | ||
Note Payable - Line of Credit | (7,375,000) | |
Long-Term Debt | (149,900) | |
Contingent Earn-Out Liabilities | (668,731) | (542,172) |
Change in Due To/From Stockholder | 6,748 | |
Proceeds from IPO Stock Issuance, Net | 17,945,151 | |
Proceeds from PIPE Stock Issuance, Net | 19,779,051 | |
Net Working Deficit Received in Asset Acquisition | (218,193) | |
Repurchase of Stock - Common | (3,332,405) | |
Proceeds from Warrants Exercised | 1,307,362 | 1,871,218 |
Net cash provided by financing activities | (2,911,967) | 37,260,096 |
NET INCREASE (DECREASE) IN CASH | (16,972,912) | 31,579,433 |
CASH - BEGINNING | 32,226,668 | 647,235 |
CASH - ENDING | 15,253,756 | 32,226,668 |
Cash Paid During The Period For: | ||
Interest | 136,661 | |
Income Taxes | 85,163 | 360,906 |
Schedule of Noncash Investing and Financing Transactions: | ||
Cost of Property and Equipment | 640,789 | |
Equipment Acquired in Asset Acquisition | (14,444) | |
Cash Used for Purchase of Property and Equipment | 626,345 | |
Non-Cash G.A.P. Promotions LLC Asset Acquisition | 1,735,000 | |
Non-Cash Trend Inc. Asset Acquisition | 1,470,344 | |
Non-Cash Premier Asset Acquisition | 932,600 | |
Total Noncash Investing and Financing Transactions | $ 4,137,944 |
Organization and Summary of Sig
Organization and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | A. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 1. Organization - Stran & Company, Inc., (the “Company”) 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. 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. 3. Method of Accounting - The Company’s 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”). 4. Emerging Growth Company - The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, of 1933, as amended (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and approval of any golden parachute payments not previously approved. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Securities Exchange Act of 1934 (the “Exchange Act”)) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s unaudited consolidated financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. 5. Cash and Cash Equivalents - For purposes of the statement of cash flows, the Company considers all highly liquid investments with an initial maturity of three months or less to be cash equivalents. 6. Fair Value Measurements and Fair Value of Financial Instruments - The carrying value of certain financial instruments, including cash and cash equivalents, accounts payable and accrued expenses, and due to related party are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments. The Company analyzes all financial instruments with features of both liabilities and equity under the Financial Accounting Standard Board’s (the “FASB”) accounting standard for such instruments. Under this standard, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company did not identify any assets or liabilities that are required to be presented on the balance sheet at fair value in accordance with the FASB Accounting Standards Codification (“ASC”) Topic 820. ASC 825-10 “Financial Instruments”, allows entities to voluntarily choose to measure certain financial assets and liabilities at fair value (fair value option). The fair value option may be elected on an instrument-by-instrument basis and is irrevocable unless a new election date occurs. If the fair value option is elected for an instrument, unrealized gains and losses for that instrument should be reported in earnings at each subsequent reporting date. The Company did not elect to apply the fair value option to any outstanding instruments. 7. Short-Term Investments - Our investments consist of U.S. treasury bills, corporate bonds, money market funds. We classify our investments as available-for-sale and record these investments at fair value. Investments with an original maturity of greater than three months at the date of purchase and less than one year from the date of the balance sheet are classified as short-term and those with maturities of more than one year from the date of the balance sheet are classified as long-term in the consolidated balance sheet. We do not invest in any securities with contractual maturities greater than 24 months. 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. 9. Inventory – Inventory consists of finished goods (branded products) and goods in process (un-branded products awaiting decoration). All inventory is stated at the lower of cost (first-in, first-out method) or market value. 10. Property and Equipment - Property and equipment are recorded at cost. Maintenance and repairs are charged to expense as incurred whereas major betterments are capitalized. Depreciation is provided using straight-line and accelerated methods over five years. 11. Intangible Asset - Customer List - The Company accounts for intangible assets under the provision of ASC 350-20 “Accounting for Goodwill and Other Intangible Assets.” The provision establishes standards for valuation and amortization of unidentifiable assets. Under ASC 350-20-35-1, the cost of unidentifiable intangible assets is measured by the excess cost over the fair value of net assets acquired. Intangible assets with indefinite useful lives shall not be amortized until its useful life is determined to be no longer infinite. The intangible assets are evaluated when a triggering event occurs, at least annually, for potential impairment. 12. Fair Value of Financial Instruments - The Company’s financial instruments include cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, earn-out liability, and notes payable. The recorded values of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, earn-out liability and notes payable approximate their fair values based on their short-term nature. 13. Revenue Recognition - In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), which is aimed at creating common revenue recognition guidance for GAAP and the International Financial Reporting Standards (“IFRS”). This new guidance provides a comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue guidance issued by the FASB. ASU 2014-09 also requires both qualitative and quantitative disclosures, including descriptions of performance obligations. On January 1, 2019, the Company adopted ASU 2014-09 and all related amendments (“ASC 606”) and applied its provisions to all uncompleted contracts using the modified retrospective basis. The application of this new revenue recognition standard resulted in no adjustment to the opening balance of retained earnings. Performance Obligations - Revenue from contracts with customers is recognized when, or as, the Company satisfies its performance obligations by transferring goods or services to customers. A good or service is transferred to a customer when, or as, the customer obtains control of that good or service. A performance obligation may be satisfied over time or at a point in time. Revenue from a performance obligation satisfied at a point in time is recognized at the point in time that the company determines the customer has obtained control over the promised good or service. The amount of revenue recognized reflects the consideration of which the Company expects to be entitled in exchange for the promised goods or services. The following provides detailed information on the recognition of the Company’s revenue from contracts with customers: Product Sales Reward Card Program All performance obligations are satisfied at a point in time. 14. Freight - The Company includes freight charges as a component of cost of goods sold. 15. Uncertainty in Income and Other Taxes - The Company adopted the standards for Accounting for Uncertainty in Income Taxes 16. 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. The Company has historically utilized accelerated tax depreciation to minimize federal income taxes. 17. Earnings/ Loss per Share - Basic earnings per share (“EPS”) is computed based on the weighted average number of shares of common stock outstanding during the period. Diluted EPS is computed based on the weighted average number of shares of common stock plus the effect of dilutive potential shares of common stock outstanding during the period using the treasury stock method. Dilutive potential common shares include the issuance of potential shares of common stock for outstanding stock options and warrants. 18. Stock-Based Compensation - The Company accounts for its stock-based awards in accordance with FASB ASC 718, Compensation - Stock Compensation. ASC 718 requires all stock-based payments to employees to be recognized in the 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 is recognizing compensation costs only for those stock-based awards expected to vest after considering expected forfeitures. 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 statements of operations. 19. Stock Option and Warrant Valuation - Stock option and warrant valuation models require the input of highly subjective 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. 20. Sales Tax - Sales tax collected from customers is recorded as a liability, pending remittance to the taxing jurisdiction. Consequently, sales taxes have been excluded from revenues and costs. The Company remits sales, use, and GST taxes to Massachusetts, other state jurisdictions, and Canada, respectively. 21. Use of Estimates - The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. 22. Recent Accounting Pronouncements - Management does not believe that any recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on its financial statements. |
Short-Term Investments
Short-Term Investments | 12 Months Ended |
Dec. 31, 2022 | |
Short-Term Investments [Abstract] | |
SHORT-TERM INVESTMENTS | B. SHORT-TERM INVESTMENTS: On December 31, 2022, the Company’s short-term investments consisted of the following: Cost Unrealized Fair Money Market Fund $ 487,324 $ - $ 487,324 Corporate Bonds 4,540,067 136,273 4,403,794 US Treasury Bills 4,931,084 42,847 4,888,237 $ 9,958,475 $ 179,120 $ 9,779,355 |
Allowance for Doubtful Accounts
Allowance for Doubtful Accounts, Net | 12 Months Ended |
Dec. 31, 2022 | |
Allowance for Credit Loss [Abstract] | |
ALLOWANCE FOR DOUBTFUL ACCOUNTS, NET | C. ALLOWANCE FOR DOUBTFUL ACCOUNTS, NET The Company uses the allowance method to account for uncollectible accounts receivable balances. Under the allowance method, an estimate of uncollectible customer balances is made based on the Company’s prior history and other factors such as credit quality of the customer and economic conditions of the market. Based on these factors, at December 31, 2022 and December 31, 2021, there was an allowance for doubtful accounts of $264,160 and $302,929, respectively. |
Inventory
Inventory | 12 Months Ended |
Dec. 31, 2022 | |
Inventory, Net [Abstract] | |
INVENTORY | D. INVENTORY Inventory consists of the following as of December 31,: 2022 2021 Finished Goods (branded products) $ 6,557,040 $ 4,124,738 Goods in Process (un-branded products) 310,524 1,106,054 $ 6,867,564 $ 5,230,792 |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2022 | |
Property Plant And Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | E. PROPERTY AND EQUIPMENT : Property and Equipment consists of the following as of December 31,: 2022 2021 Leasehold Improvements $ 5,664 $ 5,664 Office Furniture and Equipment 501,395 410,030 Software 1,525,376 975,952 Transportation Equipment 62,424 62,424 2,094,859 1,454,070 Accumulated Depreciation (1,094,769 ) (838,233 ) $ 1,000,090 $ 615,837 |
Intangible Asset - Customer Lis
Intangible Asset - Customer List | 12 Months Ended |
Dec. 31, 2022 | |
Intangible Asset [Abstract] | |
INTANGIBLE ASSET - CUSTOMER LIST | F. INTANGIBLE ASSET - Customer List : Wildman Acquisition The Company has acquired select assets and the customer list of an entity as discussed in Note I and Note M. The Company, using a Contingent Earn-Out Calculation, made the determination that the amounts allocated to Intangible Asset - Customer List amounted to $2,253,690. The intangible asset - customer list is amortized over 10 years. At December 31, 2022 and 2021, the Company’s evaluation of Intangible Asset - Customer List has resulted in accumulated impairment of $299,912 and $69,583, respectively. Amortization expense related to intangible asset - customer list was $211,584 and $254,812 for the years ended December 31, 2022 and 2021. Estimated future amortization expense for the years: 2023 $ 195,378 2024 195,378 2025 195,378 2026 195,378 2027 195,378 $ 976,889 G.A.P. Acquisition The Company has acquired select assets and the customer list of an entity as discussed in Note I and Note M. The Company, using a Contingent Earn-Out Calculation, made the determination that the amounts allocated to Intangible Asset - Customer List amounted to $2,275,290. The intangible asset - customer list is amortized over 10 years. At December 31, 2022 and 2021, the Company’s evaluation of Intangible Asset - Customer List has resulted in accumulated impairment of zero. Amortization expense related to intangible asset - customer lists was $208,571 and zero for the years ended December 31, 2022 and 2021, respectively. Estimated future amortization expense for the years: 2023 $ 227,529 2024 227,529 2025 227,529 2026 227,529 2027 227,529 $ 1,137,645 Trend Acquisition The Company has acquired select assets and the customer list of an entity as discussed in Note I and Note M. The Company, using a Contingent Earn-Out Calculation, made the determination that the amounts allocated to Intangible Asset - Customer List amounted to $1,659,831. The intangible asset - customer list is amortized over 10 years. At December 31, 2022 and 2021, the Company’s evaluation of Intangible Asset - Customer List has resulted in accumulated impairment of zero. Amortization expense related to intangible asset - customer lists was $55,328 and zero for the years ended December 31, 2022 and 2021, respectively. Estimated future amortization expense for the years: 2023 $ 165,983 2024 165,983 2025 165,983 2026 165,983 2027 165,983 $ 829,916 Premier Acquisition The Company has acquired select assets and the customer list of an entity as discussed in Note I and Note M. The Company, using a Contingent Earn-Out Calculation, made the determination that the amounts allocated to Intangible Asset - Customer List amounted to $1,032,600. The intangible asset - customer list is amortized over 10 years. At December 31, 2022 and 2021, the Company’s evaluation of Intangible Asset - Customer List has resulted in accumulated impairment of zero. Amortization expense related to intangible asset - customer lists was zero for the years ended December 31, 2022 and 2021. Estimated future amortization expense for the years: 2023 $ 113,260 2024 113,260 2025 113,260 2026 113,260 2027 113,260 $ 566,300 |
Accounts Payable and Accrued Ex
Accounts Payable and Accrued Expenses | 12 Months Ended |
Dec. 31, 2022 | |
Accounts Payable and Accrued Expenses [Abstract] | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | G. ACCOUNTS PAYABLE AND ACCRUED EXPENSES: Accounts payable and accrued expenses as of December 31, 2022 and 2021 consisted of the following: 2022 2021 Cost of Sales - Purchases $ 3,571,942 $ 2,109,427 Other Payables and Accrued Expenses 479,715 2,874,069 $ 4,051,657 $ 4,983,496 |
Note Payable - Line of Credit
Note Payable - Line of Credit | 12 Months Ended |
Dec. 31, 2022 | |
Note Payable Line Of Credit [Abstract] | |
NOTE PAYABLE - LINE OF CREDIT | H. NOTE PAYABLE - LINE OF CREDIT The Company has a $7,000,000 line of credit with Salem Five Cents Savings Bank at December 31, 2022 and 2021, borrowings on this line of credit amounted to zero. The line bears interest at prime rate plus .5% per annum. At December 31, 2022 and 2021, the interest rate was 8.00% and 4.00%, respectively. The line is reviewed annually and is due on demand. This line of credit is secured by substantially all assets of the Company. |
Contingent Earn-Out Liability
Contingent Earn-Out Liability | 12 Months Ended |
Dec. 31, 2022 | |
Contingent Earn Out Liability [Abstract] | |
CONTINGENT EARN-OUT LIABILITY | I. contingent earn-out liability : Wildman Acquisition In connection with the asset acquisition, as discussed in Note M, the customer list was purchased using a Contingent Earn-Out Calculation. The purchase price is equal to fifteen percent (15%) of the gross profit earned from the sale of product to the customer list for years 1 and thirty percent (30%) for years 2 and 3. Payments are due on the first anniversary date of the purchase and then quarterly. At December 31, 2022 and 2021, the current portion of the earn-out liability amounted to $742,874 and $665,855, respectively. At December 31, 2022 and December 31, 2021, the long-term portion of the earn-out liability amounted to zero and $976,078, respectively. G.A.P. Acquisition In connection with the asset acquisition, as discussed in Note M, the customer list was purchased using a Contingent Earn-Out Calculation. The purchase price is equal to seventy percent (70%) of the gross profit over $1,500,000 earned from the sale of product to the customer list for years 1 and 2 in addition to a fixed payments of $180,000 and $300,000 for years 1 and 2, respectively. Payments are due on the first anniversary date of the purchase. At December 31, 2022 and 2021, the current portion of the earn-out liability amounted to $649,000 and zero, respectively. At December 31, 2022 and 2021, the long-term portion of the earn-out liability amounted to $986,000 and zero, respectively. Trend Acquisition In connection with the asset acquisition, as discussed in Note M, the customer list was purchased using a Contingent Earn-Out Calculation. The purchase price is equal to forty percent (40%) of the gross profit over $800,000 earned from the sale of product to the customer list for years 1 through 4 in addition to a fixed payments of $37,500 for years 1 and 2 and $25,000 for years 3 and 4, respectively. Payments are due on the first anniversary date of the purchase. At December 31, 2022 and 2021, the current portion of the earn-out liability amounted to $155,000 and zero, respectively. At December 31, 2022 and 2021, the long-term portion of the earn-out liability amounted to $1,214,844 and zero, respectively. Premier Acquisition In connection with the asset acquisition, as discussed in Note M, the customer list was purchased using a Contingent Earn-Out Calculation. The purchase price is equal to forty-five percent (45%) of the gross profit over $350,000 earned from the sale of product to the customer list for years 1 through 3 in addition to a fixed payments of $60,000 for year 1, $40,000 for year 2, and $30,000 for year 3. Payments are due on the first anniversary date of the purchase. At December 31, 2022 and 2021, the current portion of the earn-out liability amounted to $262,500 and zero, respectively. At December 31, 2022 and 2021, the long-term portion of the earn-out liability amounted to $645,100 and zero, respectively. |
Unearned Revenue
Unearned Revenue | 12 Months Ended |
Dec. 31, 2022 | |
Unearned Revenue [Abstract] | |
UNEARNED REVENUE | J. UNearned revenue : Unearned revenue includes customer deposits and deferred revenue which represent prepayments from customers. At December 31, 2022 and 2021, the Company had unearned revenue totaling $633,148 and $721,608, respectively. 2022 2021 Balance at January 1, $ 721,608 $ 564,227 Revenue Recognized (58,953,467 ) (39,702,714 ) Amounts Collected or Invoiced 58,865,007 39,860,095 Unearned Revenue $ 633,148 $ 721,608 |
Reward Card Program Liability
Reward Card Program Liability | 12 Months Ended |
Dec. 31, 2022 | |
Reward Card Program Liability [Abstract] | |
REWARD CARD PROGRAM LIABILITY | K. reward card program liability : 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. At December 31, 2022 and 2021, the company had deposits totaling $6,000,000 and $43,878, respectively. |
Note Payable - Wildman
Note Payable - Wildman | 12 Months Ended |
Dec. 31, 2022 | |
Note Payable [Abstract] | |
NOTE PAYABLE - WILDMAN | L. Note Payable - wildman : In connection with the asset acquisition as discussed in Note M, the Company had an amount due to the seller of $162,358 for the inventory purchased. This amount accrues no interest, and is to be paid “as used” on a quarterly basis through the three years earn-out period as discussed in Note H. At December 31, 2022, the note totaled $162,358. The Company anticipates that the note will be paid in full in 2023, accordingly the note payable has been classified as current on the balance sheet as of December 31, 2022. |
Aquisitions
Aquisitions | 12 Months Ended |
Dec. 31, 2022 | |
Asset Acquisition [Abstract] | |
AQUISITIONS | M. AquisitionS : Wildman Acquisition On August 24, 2020, the Company entered into an asset purchase agreement to acquire inventory, fixed assets, and a customer list from Wildman Business Group, LLC (WBG). In accordance with Financial Accounting Standards Board (“FASB” ASC 805), “Business Combinations”, the acquisition method of accounting is used and recognition of the assets acquired is at fair value as of the acquisition dates. All acquisition costs are expensed as incurred. The consideration paid has been allocated to the assets acquired based on their estimated fair values at the acquisition date. The estimate of fair values for tangible assets acquired were agreed to by both buyer and seller. The aggregate purchase price was $2,937,222. Fair Value of Identifiable Assets Acquired: Inventory $ 649,433 Property and Equipment 34,099 Intangible - Customer List 2,253,690 $ 2,937,222 Consideration Paid: Cash $ 521,174 Note Payable - Wildman 162,358 Contingent Earn-Out Liability 2,253,690 $ 2,937,222 G.A.P. Acquisition On January 31, 2022, the Company closed on an asset purchase agreement to acquire inventory, working capital, and a customer list from G.A.P. Promotions LLC (G.A.P.). In accordance with Financial Accounting Standards Board (“FASB” ASC 805), “Business Combinations”, the acquisition method of accounting is used and recognition of the assets acquired is at fair value as of the acquisition dates. All acquisition costs are expensed as incurred. The consideration paid has been allocated to the assets acquired based on their estimated fair values at the acquisition date. The estimate of fair values for tangible assets acquired were agreed to by both buyer and seller. The aggregate purchase price was $3,245,872. Fair Value of Identifiable Assets Acquired: Inventory $ 91,096 Working Capital 879,486 Intangible - Customer List 2,275,290 $ 3,245,872 Consideration Paid: Cash $ 1,510,872 Restricted Stock 100,000 Contingent Earn-Out Liability 1,635,000 $ 3,245,872 Trend Acquisition On August 31, 2022 the Company closed on an asset purchase agreement to acquire cash, accounts receivable, inventory, fixed assets, and a customer list from Trend Brand Solutions. In accordance with Financial Accounting Standards Board (“FASB” ASC 805), “Business Combinations”, the acquisition method of accounting is used and recognition of the assets acquired is at fair value as of the acquisition dates. All acquisition costs are expensed as incurred. The consideration paid has been allocated to the assets acquired based on their estimated fair values at the acquisition date. The estimate of fair values for tangible assets acquired were agreed to by both buyer and seller. The aggregate purchase price was $2,193,166. Fair Value of Identifiable Assets Acquired: Cash $ 63,624 Accounts Receivable 346,822 Inventory 108,445 Fixed Assets 14,444 Intangible - Customer List 1,659,831 $ 2,193,166 Consideration Paid: Cash $ 1,488 Assumption of Liabilities 721,334 Restricted Stock 100,000 Contingent Earn-Out Liability 1,370,344 $ 2,193,166 Premier Acquisition On December 20, 2022, the Company closed on an asset purchase agreement to acquire cash, accounts receivable, and a customer list from Premier Business Services (Premier). In accordance with Financial Accounting Standards Board (“FASB” ASC 805), “Business Combinations”, the acquisition method of accounting is used and recognition of the assets acquired is at fair value as of the acquisition dates. All acquisition costs are expensed as incurred. The consideration paid has been allocated to the assets acquired based on their estimated fair values at the acquisition date. The estimate of fair values for tangible assets acquired were agreed to by both buyer and seller. The aggregate purchase price was $1,390,533. Fair Value of Identifiable Assets Acquired: Cash $ 13,855 Accounts Receivable 344,078 Intangible - Customer List 1,032,600 $ 1,390,533 Consideration Paid: Cash $ 440,025 Assumption of Liabilities 17,908 Restricted Stock 25,000 Contingent Earn-Out Liability 907,600 $ 1,390,533 |
Lease Obligations
Lease Obligations | 12 Months Ended |
Dec. 31, 2022 | |
Lease Obligations [Abstract] | |
LEASE OBLIGATIONS | N. LEASE OBLIGATIONS : The following is a summary of the Company’s right of use assets and lease liabilities as of December 31,: Operating Leases 2022 2021 Right-Of-Use Assets $ 784,683 $ 1,094,778 Lease Liability: Right-Of-Use Asset - Office Leases - Current 324,594 310,095 Right-Of-Use Asset - Office Leases - Non-Current 460,089 784,683 $ 784,683 $ 1,094,778 Rent expense for the years ended December 31, 2022 and 2021 totaled $456,703 and $388,769, respectively. The following is a schedule by years of future minimum lease payments: 2023 $ 325,250 2024 322,491 2025 136,942 2026 - 2027 - $ 784,683 As of December 31, 2022, the Company’s operating leases had a weighted average remaining lease term of 2.5 years and a weighted average discount rate of 2%. |
Stockholders Equity
Stockholders Equity | 12 Months Ended |
Dec. 31, 2022 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS EQUITY | O. STOCKHOLDERS EQUITY Common Stock 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 18,475,521 and 19,753,852 shares were issued and outstanding at December 31, 2022 and 2021, 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. Initial Public Offering On November 12, 2021, the Company consummated its Initial Public Offering (the IPO) of 4,987,951 Units at a price of $4.15 per Unit, generating gross proceeds of $20,699,996, with each Unit consisting of one share of common stock, $0.0001 par value, and one redeemable publicly-traded warrant. IPO proceeds were recorded net of offering costs of $2,755,344. Offering costs consisted principally of underwriting, legal, accounting and other expenses that are directly related to the IPO. Each redeemable publicly-traded warrant entitles the holder to purchase one share of common stock, at a price of $4.81375 per share as of December 31, 2022, which will expire five years from issuance. Simultaneously with the consummation of the closing of the IPO, the Company issued the underwriters a total of 149,639 warrants that are exercisable beginning six months after the date of the IPO at an exercise price of $5.19 with a five-year expiration term. As of December 31, 2022 and 2021, warrant holders have exercised 271,589 and 387,867 warrants, respectively. As of December 31, 2022 and 2021, there were 4,478,134 and 4,749,723 warrants outstanding, respectively. Private Placement On December 10, 2021, the Company consummated the sale of 4,371,926 shares of common stock at a price of $4.97 per share in a private placement (the PIPE), generating gross proceeds of $21,278,472, with each investor also receiving a warrant to purchase up to a number of shares of common stock equal to 125% of the number of shares of common stock purchased by such investor in the private placement, or a total of 5,464,903 shares, at an exercise price of $4.97 per share. PIPE proceeds were recorded net of offering costs of $1,499,858. Offering costs consisted principally of placement agent, legal, accounting and other expenses that are directly related to the PIPE. Each warrant entitles the holder to purchase up to 125% of the number of shares of common stock purchased by such investor in the private placement, or a total of 5,464,903 shares which will expire five years from issuance. The warrants have certain downward pricing adjustment mechanisms, including with respect to any subsequent equity sale that is deemed a dilutive issuance, in which case the warrants will be subject to a floor price of $4.80 per share before shareholder approval is obtained, and after shareholder approval is obtained, such floor price will be reduced to $1.00 per share, as set forth in the warrants. On December 10, 2021, the holders of shares of common stock entitled to vote approximately 65.4% of the Company’s outstanding voting stock on December 10, 2021 approved the Company’s entry into the private placement. The Company filed preliminary and definitive information statements on Schedule 14C with the SEC on December 29, 2021 and January 11, 2022, respectively, and delivered copies of the definitive information statement to shareholders January 12, 2022. On January 31, 2022, the stockholders’ consent became effective pursuant to Rule 14c-2 under the Exchange Act. As a result, the exercise price of the private placement warrants may be reduced to as low as $1.00 per share if their downward-pricing adjustment mechanisms become applicable. Simultaneously with the consummation of the closing of the PIPE, the Company issued the placement agent a total of 131,158 warrants that are exercisable beginning six months from the date of the PIPE at an exercise price of $4.97 with a five-year expiration term. As of December 31, 2022 and 2021 warrant holders have exercised zero warrants. As of December 31, 2022 and 2021, there were 5,596,061 warrants outstanding. Stock Purchase Warrants Stock purchase warrants issued with the IPO and the PIPE are accounted for as equity in accordance with ASC 480, Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock, Distinguishing Liabilities from Equity. The following table reflects all outstanding and exercisable warrants at December 31, 2022 and 2021. All warrants are exercisable for a period of five years from the date of issuance: Numbers of Weighted Weighted Outstanding Price (Years) Balance January 1, 2021 - - - Warrants Issued 10,733,651 $4.90 - Warrants Exercised (387,867 ) - - Balance December 31, 2021 10,345,784 $4.90 - Warrants Issued - - - Warrants Exercised (271,589 ) $ $4.90 - Balance December 31, 2022 10,074,195 $ $4.90 5 Stock Repurchase Program 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, or the 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. Below is a table containing information about purchases made by the company: Period Total Number Average Price Total Number Maximum April 1 - December 31, 2022 1,777,657 $ 1.87 1,777,657 $ 6,667,595 |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | P. STOCK-BASED COMPENSATION 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. The number of shares of common stock available for issuance under the 2021 Plan is 942,068 shares of common stock. Stock-based compensation expense included the following components: 2022 2021 Stock Options $ 164,576 153,205 Restricted Stock 316,727 14,852 481,303 168,057 All stock-based compensation expense is recorded in General and Administrative expense in the Statement of Earnings. Non-Qualified Stock Options The fair value of options is estimated on the date of grant using the Black-Scholes option pricing model using the assumptions noted in the table below. 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. The Company uses historical data on employee turnover and terminations to estimate the percentage of options that will ultimately be exercised. 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. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual results differ from the estimates. 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-years contractual terms. The Black-Scholes option pricing model assumptions are as follows: Risk-Free Interest Rate 1.34 % Expected Term 5.5-6.25 years Expected Volatility 50.12 % Expected Dividends 0 % A summary of option activity under the 2021 Plan as of December 31, 2022 and 2021 and changes during the years then ended is presented below: Options Shares Weighted Average Exercise Price Aggregate Intrinsic Value Outstanding at January 1, 2021 - - - Granted 1,587,000 $ 4.15 - Forfeited or Expired and Other Adj - - - Outstanding at December 31, 2021 1,587,000 $ 4.15 $ 3,015,300 Exercisable at December 31, 2021 30,658 $ 4.15 $ 58,250 Granted 68,000 $ 1.80 - Forfeited or Expired and Other Adj (97,000 ) $ 4.11 - Outstanding at December 31, 2022 1,558,000 $ 4.17 $ - Exercisable at December 31, 2022 453,918 $ 4.16 $ - The weighted-average grant-date fair value of options granted during the years ended December 31, 2022 and 2021 was $1.80 and $4.15, respectively. The weighted-average remaining contractual term for the outstanding options is approximately 9 years and 10 years as of December 31, 2022 and 2021, respectively. Restricted Stock Restricted stock granted under the 2021 Plan generally vest over 10 years, based on continued employment, and are settled upon vesting shares of the Company’s common stock on a one-for-one basis. A summary of restricted stock activity under the 2021 Plan as of December 31, 2022 and 2021 and changes during the years then ended is presented below: Restricted Stock Time-Based Outstanding at January 1, 2021 - Granted 160,318 Vested (5,358 ) Forfeited - Outstanding at December, 2021 154,960 Granted 145,660 Vested (227,737 ) Forfeited (8,717 ) Outstanding at December 31, 2022 64,166 |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 12 Months Ended |
Dec. 31, 2022 | |
Earnings (Loss) Per Share [Abstract] | |
EARNINGS (LOSS) PER SHARE | Q. earnings (loss) per share : The following table presents the computation of basic and diluted net loss per common share as of December 31,: 2022 2021 Net Income Shares Net Income Shares Net Earnings (Loss) $ (778,441 ) 19,202,619 $ 235,240 10,928,043 Basic earnings (loss) per share $ (0.04 ) $ 0.02 Effect of dilutive securities: Warrants - 10,064,987 Stock Options - 30,658 $ (778,441 ) 19,202,619 $ 235,240 21,023,688 Diluted earnings (loss) per share $ (0.04 ) $ 0.01 |
Income Tax Provision
Income Tax Provision | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Provision [Abstract] | |
INCOME TAX PROVISION | R. income tax Provision : The Company computes its provision for income taxes by applying the estimated annual effective tax rate to pretax income and adjust the provision for discrete tax items recorded in the period. The provision for income taxes as of and for the years ended December 31, 2022 and 2021 consisted of the following: 2022 2021 Federal: Current $ 48,282 $ - Deferred (532,700 ) (76,300 ) Total (484,418 ) (76,300 ) State: Current (19,469 ) 5,500 Deferred (195,300 ) (36,700 ) Total (214,769 ) (31,200 ) Provision for income taxes $ (699,187 ) $ (107,500 ) The Company has an income tax NOL carryforward related to continued operations as of December 31, 2022 and 2021 of approximately $728,000 and 113,000, respectively. As of December 31, 2022 and 2021, the carryforward is recorded as a deferred tax asset of $841,000 and 113,000, respectively. Such deferred tax assets can be carried forward indefinitely. |
Advertising
Advertising | 12 Months Ended |
Dec. 31, 2022 | |
Advertising [Abstract] | |
ADVERTISING | S. ADVERTISING : The Company follows the policy of charging the costs of advertising to expense as incurred. For the years ended December 31, 2022 and 2021, advertising costs amounted to $375,162 and $135,436, respectively. |
Major Customers
Major Customers | 12 Months Ended |
Dec. 31, 2022 | |
Major Customers [Abstract] | |
MAJOR CUSTOMERS | T. MAJOR CUSTOMERs For the years ended December 31, 2022 and 2021, the Company had no major customers. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | U. SUBSEQUENT EVENTS Management has evaluated events occurring after the balance sheet date through March 20, 2023, the date in which the financial statements were available to be issued. On January 25, 2023, the Company entered into an Asset Purchase Agreement (the “TRM Purchase Agreement”) with TRM Corp., a Massachusetts corporation, and Thomas R. Miller (“TRM”), pursuant to which the Company agreed to acquire substantially all of the assets of TRM Corp. used in TRM Corp.’s branding, marketing and promotional products and services business (the “TRM Business”). Under the TRM Purchase Agreement, the aggregate purchase price (“TRM Purchase Price”) for the TRM Business will consist of cash payments by the Company to TRM Corp. at and following the TRM Closing (as defined below), subject to adjustments, as described below. At the consummation of the transactions contemplated by the TRM Purchase Agreement (the “TRM Closing”), the Company will pay TRM Corp. the following cash components of the TRM Purchase Price: (a) $1,000,000 in cash, subject to a customary working capital adjustment, an adjustment for any indebtedness of TRM Corp. or the TRM Business as of the date and time of the TRM Closing (the “TRM Closing Date”) that is not part of the Assumed Liabilities (as defined in the TRM Purchase Agreement), and the TRM Earn Out Payments (as defined below); (b) the amount paid by TRM Corp. (cost) for Inventory (as defined in the TRM Purchase Agreement) that is on hand and owned by Seller as of the TRM Closing Date; (c) installment payments (the “TRM Installment Payments”) equal to (i) $400,000 on the first anniversary of the TRM Closing Date, (ii) $300,000 on the second anniversary of the TRM Closing Date, (iii) $200,000 on the third anniversary of the TRM Closing Date, and (iv) $200,000 on the fourth anniversary of the TRM Closing Date, with such TRM Installment Payments subject to adjustment for certain uncollected accounts receivable amounts outstanding after the first 12 months following the TRM Closing; and (d) four annual earnout payments (collectively, the “TRM Earn Out Payments”), each equal to (i) 45% of annual Gross Profit (as defined in the TRM Purchase Agreement) of TRM Corp. above $4,000,000 with respect to certain customers of TRM Corp. or primarily resulting from the efforts of TRM or certain employees or independent contractors of TRM Corp., plus (ii) 25% of the annual Gross Profit above $4,000,000 with respect to customers primarily resulting from the past or future efforts of the Company that are assigned to and primary responsibility of any employee or independent contractor of TRM Corp. as designated by the TRM Purchase Agreement, for the trailing 12-month period, as of the first, second, third, and fourth anniversary of the TRM Closing Date, with such TRM Earn Out Payments subject to adjustment as set forth in the TRM Purchase Agreement. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Organization | 1. Organization - Stran & Company, Inc., (the “Company”) 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. |
Operations | 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. |
Method of Accounting | 3. Method of Accounting - The Company’s 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”). |
Emerging Growth Company | 4. Emerging Growth Company - The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, of 1933, as amended (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and approval of any golden parachute payments not previously approved. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Securities Exchange Act of 1934 (the “Exchange Act”)) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s unaudited consolidated financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. |
Cash and Cash Equivalents | 5. Cash and Cash Equivalents - For purposes of the statement of cash flows, the Company considers all highly liquid investments with an initial maturity of three months or less to be cash equivalents. |
Fair Value Measurements and Fair Value of Financial Instruments | 6. Fair Value Measurements and Fair Value of Financial Instruments - The carrying value of certain financial instruments, including cash and cash equivalents, accounts payable and accrued expenses, and due to related party are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments. The Company analyzes all financial instruments with features of both liabilities and equity under the Financial Accounting Standard Board’s (the “FASB”) accounting standard for such instruments. Under this standard, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company did not identify any assets or liabilities that are required to be presented on the balance sheet at fair value in accordance with the FASB Accounting Standards Codification (“ASC”) Topic 820. ASC 825-10 “Financial Instruments”, allows entities to voluntarily choose to measure certain financial assets and liabilities at fair value (fair value option). The fair value option may be elected on an instrument-by-instrument basis and is irrevocable unless a new election date occurs. If the fair value option is elected for an instrument, unrealized gains and losses for that instrument should be reported in earnings at each subsequent reporting date. The Company did not elect to apply the fair value option to any outstanding instruments. |
Short-term investments | Short-Term Investments - Our investments consist of U.S. treasury bills, corporate bonds, money market funds. We classify our investments as available-for-sale and record these investments at fair value. Investments with an original maturity of greater than three months at the date of purchase and less than one year from the date of the balance sheet are classified as short-term and those with maturities of more than one year from the date of the balance sheet are classified as long-term in the consolidated balance sheet. We do not invest in any securities with contractual maturities greater than 24 months. |
Concentration of Credit Risk | 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. |
Inventory | 9. Inventory – Inventory consists of finished goods (branded products) and goods in process (un-branded products awaiting decoration). All inventory is stated at the lower of cost (first-in, first-out method) or market value. |
Property and Equipment | 10. Property and Equipment - Property and equipment are recorded at cost. Maintenance and repairs are charged to expense as incurred whereas major betterments are capitalized. Depreciation is provided using straight-line and accelerated methods over five years. |
Intangible Asset | 11. Intangible Asset - Customer List - The Company accounts for intangible assets under the provision of ASC 350-20 “Accounting for Goodwill and Other Intangible Assets.” The provision establishes standards for valuation and amortization of unidentifiable assets. Under ASC 350-20-35-1, the cost of unidentifiable intangible assets is measured by the excess cost over the fair value of net assets acquired. Intangible assets with indefinite useful lives shall not be amortized until its useful life is determined to be no longer infinite. The intangible assets are evaluated when a triggering event occurs, at least annually, for potential impairment. |
Fair Value of Financial Instruments | 12. Fair Value of Financial Instruments - The Company’s financial instruments include cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, earn-out liability, and notes payable. The recorded values of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, earn-out liability and notes payable approximate their fair values based on their short-term nature. |
Revenue Recognition | 13. Revenue Recognition - In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), which is aimed at creating common revenue recognition guidance for GAAP and the International Financial Reporting Standards (“IFRS”). This new guidance provides a comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue guidance issued by the FASB. ASU 2014-09 also requires both qualitative and quantitative disclosures, including descriptions of performance obligations. On January 1, 2019, the Company adopted ASU 2014-09 and all related amendments (“ASC 606”) and applied its provisions to all uncompleted contracts using the modified retrospective basis. The application of this new revenue recognition standard resulted in no adjustment to the opening balance of retained earnings. Performance Obligations - Revenue from contracts with customers is recognized when, or as, the Company satisfies its performance obligations by transferring goods or services to customers. A good or service is transferred to a customer when, or as, the customer obtains control of that good or service. A performance obligation may be satisfied over time or at a point in time. Revenue from a performance obligation satisfied at a point in time is recognized at the point in time that the company determines the customer has obtained control over the promised good or service. The amount of revenue recognized reflects the consideration of which the Company expects to be entitled in exchange for the promised goods or services. The following provides detailed information on the recognition of the Company’s revenue from contracts with customers: Product Sales Reward Card Program All performance obligations are satisfied at a point in time. |
Freight | 14. Freight - The Company includes freight charges as a component of cost of goods sold. |
Uncertainty in Income and Other Taxes | 15. Uncertainty in Income and Other Taxes - The Company adopted the standards for Accounting for Uncertainty in Income Taxes |
Income Taxes | 16. 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. The Company has historically utilized accelerated tax depreciation to minimize federal income taxes. |
Earnings/ Loss per Share | 17. Earnings/ Loss per Share - Basic earnings per share (“EPS”) is computed based on the weighted average number of shares of common stock outstanding during the period. Diluted EPS is computed based on the weighted average number of shares of common stock plus the effect of dilutive potential shares of common stock outstanding during the period using the treasury stock method. Dilutive potential common shares include the issuance of potential shares of common stock for outstanding stock options and warrants. |
Stock-Based Compensation | 18. Stock-Based Compensation - The Company accounts for its stock-based awards in accordance with FASB ASC 718, Compensation - Stock Compensation. ASC 718 requires all stock-based payments to employees to be recognized in the 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 is recognizing compensation costs only for those stock-based awards expected to vest after considering expected forfeitures. 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 statements of operations. |
Stock Option and Warrant Valuation | 19. Stock Option and Warrant Valuation - Stock option and warrant valuation models require the input of highly subjective 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. |
Sales Tax | 20. Sales Tax - Sales tax collected from customers is recorded as a liability, pending remittance to the taxing jurisdiction. Consequently, sales taxes have been excluded from revenues and costs. The Company remits sales, use, and GST taxes to Massachusetts, other state jurisdictions, and Canada, respectively. |
Use of Estimates | 21. Use of Estimates - The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. |
Recent Accounting Pronouncements | 22. Recent Accounting Pronouncements - Management does not believe that any recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on its financial statements. |
Short-Term Investments (Tables)
Short-Term Investments (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Short-Term Investments [Abstract] | |
Schedule of short-term investments | Cost Unrealized Fair Money Market Fund $ 487,324 $ - $ 487,324 Corporate Bonds 4,540,067 136,273 4,403,794 US Treasury Bills 4,931,084 42,847 4,888,237 $ 9,958,475 $ 179,120 $ 9,779,355 |
Inventory (Tables)
Inventory (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Inventory, Net [Abstract] | |
Schedule of inventory | 2022 2021 Finished Goods (branded products) $ 6,557,040 $ 4,124,738 Goods in Process (un-branded products) 310,524 1,106,054 $ 6,867,564 $ 5,230,792 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Property Plant And Equipment [Abstract] | |
Schedule of property and equipment | 2022 2021 Leasehold Improvements $ 5,664 $ 5,664 Office Furniture and Equipment 501,395 410,030 Software 1,525,376 975,952 Transportation Equipment 62,424 62,424 2,094,859 1,454,070 Accumulated Depreciation (1,094,769 ) (838,233 ) $ 1,000,090 $ 615,837 |
Intangible Asset - Customer L_2
Intangible Asset - Customer List (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Intangible Asset [Abstract] | |
Schedule of estimated future amortization expense | 2023 $ 195,378 2024 195,378 2025 195,378 2026 195,378 2027 195,378 $ 976,889 2023 $ 227,529 2024 227,529 2025 227,529 2026 227,529 2027 227,529 $ 1,137,645 2023 $ 165,983 2024 165,983 2025 165,983 2026 165,983 2027 165,983 $ 829,916 2023 $ 113,260 2024 113,260 2025 113,260 2026 113,260 2027 113,260 $ 566,300 |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accounts Payable and Accrued Expenses [Abstract] | |
Schedule of accounts payable and accrued expenses | 2022 2021 Cost of Sales - Purchases $ 3,571,942 $ 2,109,427 Other Payables and Accrued Expenses 479,715 2,874,069 $ 4,051,657 $ 4,983,496 |
Unearned Revenue (Tables)
Unearned Revenue (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Unearned Revenue [Abstract] | |
Schedule of unearned revenue includes customer deposits and deferred revenue | 2022 2021 Balance at January 1, $ 721,608 $ 564,227 Revenue Recognized (58,953,467 ) (39,702,714 ) Amounts Collected or Invoiced 58,865,007 39,860,095 Unearned Revenue $ 633,148 $ 721,608 |
Aquisitions (Tables)
Aquisitions (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Asset Acquisition [Abstract] | |
Schedule of fair value of identifiable assets acquired | Fair Value of Identifiable Assets Acquired: Inventory $ 649,433 Property and Equipment 34,099 Intangible - Customer List 2,253,690 $ 2,937,222 Consideration Paid: Cash $ 521,174 Note Payable - Wildman 162,358 Contingent Earn-Out Liability 2,253,690 $ 2,937,222 Fair Value of Identifiable Assets Acquired: Inventory $ 91,096 Working Capital 879,486 Intangible - Customer List 2,275,290 $ 3,245,872 Consideration Paid: Cash $ 1,510,872 Restricted Stock 100,000 Contingent Earn-Out Liability 1,635,000 $ 3,245,872 Fair Value of Identifiable Assets Acquired: Cash $ 63,624 Accounts Receivable 346,822 Inventory 108,445 Fixed Assets 14,444 Intangible - Customer List 1,659,831 $ 2,193,166 Consideration Paid: Cash $ 1,488 Assumption of Liabilities 721,334 Restricted Stock 100,000 Contingent Earn-Out Liability 1,370,344 $ 2,193,166 Fair Value of Identifiable Assets Acquired: Cash $ 13,855 Accounts Receivable 344,078 Intangible - Customer List 1,032,600 $ 1,390,533 Consideration Paid: Cash $ 440,025 Assumption of Liabilities 17,908 Restricted Stock 25,000 Contingent Earn-Out Liability 907,600 $ 1,390,533 |
Lease Obligations (Tables)
Lease Obligations (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Lease Obligations [Abstract] | |
Schedule of right of use assets and lease liabilities | Operating Leases 2022 2021 Right-Of-Use Assets $ 784,683 $ 1,094,778 Lease Liability: Right-Of-Use Asset - Office Leases - Current 324,594 310,095 Right-Of-Use Asset - Office Leases - Non-Current 460,089 784,683 $ 784,683 $ 1,094,778 |
Schedule of future minimum lease payments | 2023 $ 325,250 2024 322,491 2025 136,942 2026 - 2027 - $ 784,683 |
Stockholders Equity (Tables)
Stockholders Equity (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Stockholders' Equity Note [Abstract] | |
Schedule of outstanding and exercisable warrants | Numbers of Weighted Weighted Outstanding Price (Years) Balance January 1, 2021 - - - Warrants Issued 10,733,651 $4.90 - Warrants Exercised (387,867 ) - - Balance December 31, 2021 10,345,784 $4.90 - Warrants Issued - - - Warrants Exercised (271,589 ) $ $4.90 - Balance December 31, 2022 10,074,195 $ $4.90 5 |
Schedule of purchases made by the company | Period Total Number Average Price Total Number Maximum April 1 - December 31, 2022 1,777,657 $ 1.87 1,777,657 $ 6,667,595 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of stock-based compensation expense | 2022 2021 Stock Options $ 164,576 153,205 Restricted Stock 316,727 14,852 481,303 168,057 |
Schedule of Black-Scholes option pricing model | Risk-Free Interest Rate 1.34 % Expected Term 5.5-6.25 years Expected Volatility 50.12 % Expected Dividends 0 % |
Schedule of option activity | Options Shares Weighted Average Exercise Price Aggregate Intrinsic Value Outstanding at January 1, 2021 - - - Granted 1,587,000 $ 4.15 - Forfeited or Expired and Other Adj - - - Outstanding at December 31, 2021 1,587,000 $ 4.15 $ 3,015,300 Exercisable at December 31, 2021 30,658 $ 4.15 $ 58,250 Granted 68,000 $ 1.80 - Forfeited or Expired and Other Adj (97,000 ) $ 4.11 - Outstanding at December 31, 2022 1,558,000 $ 4.17 $ - Exercisable at December 31, 2022 453,918 $ 4.16 $ - |
Schedule of restricted stock activity | Restricted Stock Time-Based Outstanding at January 1, 2021 - Granted 160,318 Vested (5,358 ) Forfeited - Outstanding at December, 2021 154,960 Granted 145,660 Vested (227,737 ) Forfeited (8,717 ) Outstanding at December 31, 2022 64,166 |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Earnings (Loss) Per Share [Abstract] | |
Schedule of basic and diluted net loss per common share | 2022 2021 Net Income Shares Net Income Shares Net Earnings (Loss) $ (778,441 ) 19,202,619 $ 235,240 10,928,043 Basic earnings (loss) per share $ (0.04 ) $ 0.02 Effect of dilutive securities: Warrants - 10,064,987 Stock Options - 30,658 $ (778,441 ) 19,202,619 $ 235,240 21,023,688 Diluted earnings (loss) per share $ (0.04 ) $ 0.01 |
Income Tax Provision (Tables)
Income Tax Provision (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Provision [Abstract] | |
Schedule of provision for income taxes | R. income tax Provision : 2022 2021 Federal: Current $ 48,282 $ - Deferred (532,700 ) (76,300 ) Total (484,418 ) (76,300 ) State: Current (19,469 ) 5,500 Deferred (195,300 ) (36,700 ) Total (214,769 ) (31,200 ) Provision for income taxes $ (699,187 ) $ (107,500 ) |
Organization and Summary of S_2
Organization and Summary of Significant Accounting Policies (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Contractual maturities | 24 months |
Short-Term Investments (Details
Short-Term Investments (Details) - Schedule of short-term investments | Dec. 31, 2022 USD ($) |
Marketable Securities [Line Items] | |
Cost | $ 9,958,475 |
Unrealized Loss | 179,120 |
Fair Value | 9,779,355 |
Money Market Fund [Member] | |
Marketable Securities [Line Items] | |
Cost | 487,324 |
Unrealized Loss | |
Fair Value | 487,324 |
Corporate Bonds [Member] | |
Marketable Securities [Line Items] | |
Cost | 4,540,067 |
Unrealized Loss | 136,273 |
Fair Value | 4,403,794 |
US Treasury Bills [Member] | |
Marketable Securities [Line Items] | |
Cost | 4,931,084 |
Unrealized Loss | 42,847 |
Fair Value | $ 4,888,237 |
Allowance for Doubtful Accoun_2
Allowance for Doubtful Accounts, Net (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Allowance for Credit Loss [Abstract] | ||
Allowance for doubtful accounts | $ 264,160 | $ 302,929 |
Inventory (Details) - Schedule
Inventory (Details) - Schedule of inventory - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Inventory Disclosure [Abstract] | ||
Finished Goods (branded products) | $ 6,557,040 | $ 4,124,738 |
Goods in Process (un-branded products) | 310,524 | 1,106,054 |
Inventory | $ 6,867,564 | $ 5,230,792 |
Property and Equipment (Details
Property and Equipment (Details) - Schedule of property and equipment - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Property Plant And Equipment [Abstract] | ||
Leasehold Improvements | $ 5,664 | $ 5,664 |
Office Furniture and Equipment | 501,395 | 410,030 |
Software | 1,525,376 | 975,952 |
Transportation Equipment | 62,424 | 62,424 |
Property plant and equipment, Gross | 2,094,859 | 1,454,070 |
Accumulated Depreciation | (1,094,769) | (838,233) |
Property plant and equipment, Net | $ 1,000,090 | $ 615,837 |
Intangible Asset - Customer L_3
Intangible Asset - Customer List (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Wildman Acquisition [Member] | ||
Indefinite-Lived Intangible Assets [Line Items] | ||
Intangible asset - Customer list amounted | $ 2,253,690 | |
Intangible asset amortized over year | 10 years | |
Accumulated impairment | $ 299,912 | $ 69,583 |
Amortization expense | 211,584 | 254,812 |
G.A.P. Acquisition [Member] | ||
Indefinite-Lived Intangible Assets [Line Items] | ||
Intangible asset - Customer list amounted | $ 2,275,290 | |
Intangible asset amortized over year | 10 years | |
Amortization expense | $ 208,571 | 0 |
Accumulated impairment | 0 | 0 |
Trend Acquisition [Member] | ||
Indefinite-Lived Intangible Assets [Line Items] | ||
Intangible asset - Customer list amounted | $ 1,659,831 | |
Intangible asset amortized over year | 10 years | |
Amortization expense | $ 55,328 | 0 |
Accumulated impairment | 0 | 0 |
Premier Acquisition [Member] | ||
Indefinite-Lived Intangible Assets [Line Items] | ||
Intangible asset - Customer list amounted | $ 1,032,600 | |
Intangible asset amortized over year | 10 years | |
Amortization expense | $ 0 | 0 |
Accumulated impairment | $ 0 | $ 0 |
Intangible Asset - Customer L_4
Intangible Asset - Customer List (Details) - Schedule of estimated future amortization expense | Dec. 31, 2022 USD ($) |
Wildman Acquisition [Member] | |
Indefinite-Lived Intangible Assets [Line Items] | |
2023 | $ 195,378 |
2024 | 195,378 |
2025 | 195,378 |
2026 | 195,378 |
2027 | 195,378 |
Total | 976,889 |
G.A.P. Acquisition [Member] | |
Indefinite-Lived Intangible Assets [Line Items] | |
2023 | 227,529 |
2024 | 227,529 |
2025 | 227,529 |
2026 | 227,529 |
2027 | 227,529 |
Total | 1,137,645 |
Trend Acquisition [Member] | |
Indefinite-Lived Intangible Assets [Line Items] | |
2023 | 165,983 |
2024 | 165,983 |
2025 | 165,983 |
2026 | 165,983 |
2027 | 165,983 |
Total | 829,916 |
Premier Acquisition [Member] | |
Indefinite-Lived Intangible Assets [Line Items] | |
2023 | 113,260 |
2024 | 113,260 |
2025 | 113,260 |
2026 | 113,260 |
2027 | 113,260 |
Total | $ 566,300 |
Accounts Payable and Accrued _3
Accounts Payable and Accrued Expenses (Details) - Schedule of accounts payable and accrued expenses - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Payables and Accruals [Abstract] | ||
Cost of Sales - Purchases | $ 3,571,942 | $ 2,109,427 |
Other Payables and Accrued Expenses | 479,715 | 2,874,069 |
Total | $ 4,051,657 | $ 4,983,496 |
Note Payable - Line of Credit (
Note Payable - Line of Credit (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Note Payable Line Of Credit [Abstract] | ||
Line of credit | $ 7,000,000 | $ 7,000,000 |
Borrowing amount | $ 0 | $ 0 |
Line bears interest | 5% | |
Interest rate | 8% | 4% |
Contingent Earn-Out Liability (
Contingent Earn-Out Liability (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Year one [Member] | ||
Contingent Earn-Out Liability (Details) [Line Items] | ||
Customer list year | 15% | |
Year Two [Member] | ||
Contingent Earn-Out Liability (Details) [Line Items] | ||
Customer list year | 30% | |
Wildman Acquisition [Member] | ||
Contingent Earn-Out Liability (Details) [Line Items] | ||
Current portion earn out liability amount | $ 742,874 | $ 665,855 |
Long-term portion earn out liability amount | 0 | 976,078 |
G.A.P. Acquisition [Member] | ||
Contingent Earn-Out Liability (Details) [Line Items] | ||
Current portion earn out liability amount | 649,000 | 0 |
Long-term portion earn out liability amount | $ 986,000 | 0 |
Purchase price percentage | 70% | |
Gross profit over earned sale | $ 1,500,000 | |
G.A.P. Acquisition [Member] | Year one [Member] | ||
Contingent Earn-Out Liability (Details) [Line Items] | ||
Additional fixed payments | 180,000 | |
G.A.P. Acquisition [Member] | Year Two [Member] | ||
Contingent Earn-Out Liability (Details) [Line Items] | ||
Additional fixed payments | 300,000 | |
Trend Acquisition [Member] | ||
Contingent Earn-Out Liability (Details) [Line Items] | ||
Current portion earn out liability amount | 155,000 | 0 |
Long-term portion earn out liability amount | $ 1,214,844 | 0 |
Purchase price percentage | 40% | |
Gross profit over earned sale | $ 800,000 | |
Trend Acquisition [Member] | Year one [Member] | ||
Contingent Earn-Out Liability (Details) [Line Items] | ||
Additional fixed payments | 37,500 | |
Trend Acquisition [Member] | Year Two [Member] | ||
Contingent Earn-Out Liability (Details) [Line Items] | ||
Additional fixed payments | 37,500 | |
Trend Acquisition [Member] | Year three [Member] | ||
Contingent Earn-Out Liability (Details) [Line Items] | ||
Additional fixed payments | 25,000 | |
Trend Acquisition [Member] | Year Four [Member] | ||
Contingent Earn-Out Liability (Details) [Line Items] | ||
Additional fixed payments | 25,000 | |
Premier Acquisition [Member] | ||
Contingent Earn-Out Liability (Details) [Line Items] | ||
Current portion earn out liability amount | 262,500 | 0 |
Long-term portion earn out liability amount | $ 645,100 | $ 0 |
Purchase price percentage | 45% | |
Gross profit over earned sale | $ 350,000 | |
Premier Acquisition [Member] | Year one [Member] | ||
Contingent Earn-Out Liability (Details) [Line Items] | ||
Additional fixed payments | 60,000 | |
Premier Acquisition [Member] | Year Two [Member] | ||
Contingent Earn-Out Liability (Details) [Line Items] | ||
Additional fixed payments | 40,000 | |
Premier Acquisition [Member] | Year three [Member] | ||
Contingent Earn-Out Liability (Details) [Line Items] | ||
Additional fixed payments | $ 30,000 |
Unearned Revenue (Details)
Unearned Revenue (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Unearned Revenue [Abstract] | ||
Unearned revenue | $ 633,148 | $ 721,608 |
Unearned Revenue (Details) - Sc
Unearned Revenue (Details) - Schedule of unearned revenue includes customer deposits and deferred revenue - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Schedule Of Unearned Revenue Includes Customer Deposits And Deferred Revenue Abstract | ||
Balance at January 1, | $ 721,608 | $ 564,227 |
Revenue Recognized | (58,953,467) | (39,702,714) |
Amounts Collected or Invoiced | 58,865,007 | 39,860,095 |
Unearned Revenue | $ 633,148 | $ 721,608 |
Reward Card Program Liability (
Reward Card Program Liability (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Reward Card Program Liability [Abstract] | ||
Deposits total | $ 6,000,000 | $ 43,878 |
Note Payable - Wildman (Details
Note Payable - Wildman (Details) | Dec. 31, 2022 USD ($) |
Note Payable [Abstract] | |
Inventory purchased amount | $ 162,358 |
Note amount | $ 162,358 |
Aquisitions (Details)
Aquisitions (Details) | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Wildman Acquisition [Member] | |
Aquisitions (Details) [Line Items] | |
Aggregate purchase price | $ 2,937,222 |
G.A.P. Acquisition [Member] | |
Aquisitions (Details) [Line Items] | |
Aggregate purchase price | 3,245,872 |
Trend Acquisition [Member] | |
Aquisitions (Details) [Line Items] | |
Aggregate purchase price | 2,193,166 |
Premier Acquisition [Member] | |
Aquisitions (Details) [Line Items] | |
Aggregate purchase price | $ 1,390,533 |
Aquisitions (Details) - Schedul
Aquisitions (Details) - Schedule of fair value of Identifiable assets acquired | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Wildman Acquisition [Member] | |
Fair Value of Identifiable Assets Acquired: | |
Inventory | $ 649,433 |
Property and Equipment | 34,099 |
Intangible - Customer List | 2,253,690 |
Total fair value of identifiable assets acquired | 2,937,222 |
Consideration Paid: | |
Cash | 521,174 |
Note Payable - Wildman | 162,358 |
Contingent Earn-Out Liability | 2,253,690 |
Total consideration paid | 2,937,222 |
G.A.P. Acquisition [Member] | |
Fair Value of Identifiable Assets Acquired: | |
Inventory | 91,096 |
Working Capital | 879,486 |
Intangible - Customer List | 2,275,290 |
Total fair value of identifiable assets acquired | 3,245,872 |
Consideration Paid: | |
Cash | 1,510,872 |
Restricted Stock | 100,000 |
Contingent Earn-Out Liability | 1,635,000 |
Total consideration paid | 3,245,872 |
Trend Acquisition [Member] | |
Fair Value of Identifiable Assets Acquired: | |
Cash | 63,624 |
Accounts Receivable | 346,822 |
Inventory | 108,445 |
Fixed Assets | 14,444 |
Intangible - Customer List | 1,659,831 |
Total fair value of identifiable assets acquired | 2,193,166 |
Consideration Paid: | |
Cash | 1,488 |
Assumption of Liabilities | 721,334 |
Restricted Stock | 100,000 |
Contingent Earn-Out Liability | 1,370,344 |
Total consideration paid | 2,193,166 |
Premier Acquisition [Member] | |
Fair Value of Identifiable Assets Acquired: | |
Cash | 13,855 |
Accounts Receivable | 344,078 |
Intangible - Customer List | 1,032,600 |
Consideration Paid: | |
Cash | 440,025 |
Assumption of Liabilities | 17,908 |
Restricted Stock | 25,000 |
Contingent Earn-Out Liability | 907,600 |
Total consideration paid | $ 1,390,533 |
Lease Obligations (Details)
Lease Obligations (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Lease Oblicatiob [Abstract] | ||
Rent expense | $ 456,703 | $ 388,769 |
Weighted average remaining lease term | 2 years 6 months | |
Weighted average discount rate | 2% |
Lease Obligations (Details) - S
Lease Obligations (Details) - Schedule of right of use assets and lease liabilities - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Schedule Of Right Of Use Assets And Lease Liabilities [Abstract] | ||
Right-Of-Use Assets | $ 784,683 | $ 1,094,778 |
Lease Liability: | ||
Right-Of-Use Asset - Office Leases - Current | 324,594 | 310,095 |
Right-Of-Use Asset - Office Leases - Non-Current | 460,089 | 784,683 |
Operating Leases | $ 784,683 | $ 1,094,778 |
Lease Obligations (Details) -_2
Lease Obligations (Details) - Schedule of future minimum lease payments | Dec. 31, 2022 USD ($) |
Schedule Of Future Minimum Lease Payments [Abstract] | |
2023 | $ 325,250 |
2024 | 322,491 |
2025 | 136,942 |
2026 | |
2027 | |
Total | $ 784,683 |
Stockholders Equity (Details)
Stockholders Equity (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |||||
Dec. 10, 2021 | Nov. 12, 2021 | Jan. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Feb. 21, 2022 | May 24, 2021 | |
Stockholders Equity (Details) [Line Items] | |||||||
Common stock shares authorized | 300,000,000 | 300,000,000 | |||||
Common stock shares par value (in Dollars per share) | $ 0.0001 | $ 0.0001 | |||||
Common stock shares issued | 18,475,521 | 19,753,852 | |||||
Common stock shares outstanding | 18,475,521 | 19,753,852 | |||||
Initial public offering units | 1,777,657 | ||||||
Warrants | 10,064,987 | ||||||
Warrant exercised | 0 | ||||||
Warrants outstanding | 4,478,134 | 4,749,723 | |||||
Per share (in Dollars per share) | $ 1.87 | ||||||
Outstanding voting stock percentage | 65.40% | ||||||
Private placement exercise price (in Dollars per share) | $ 1 | ||||||
Shares repurchase value (in Dollars) | $ 10,000,000 | ||||||
Common Stock [Member] | |||||||
Stockholders Equity (Details) [Line Items] | |||||||
Common stock shares authorized | 300,000,000 | ||||||
Common stock shares par value (in Dollars per share) | $ 0.0001 | ||||||
Common stock shares issued | 18,475,521 | ||||||
Common stock shares outstanding | 19,753,852 | ||||||
Sale of units | 271,589 | 387,867 | |||||
Warrant [Member] | |||||||
Stockholders Equity (Details) [Line Items] | |||||||
Warrant exercised | 271,589 | 387,867 | |||||
Before Shareholder Approval [Member] | |||||||
Stockholders Equity (Details) [Line Items] | |||||||
Per share (in Dollars per share) | $ 4.8 | ||||||
After Shareholder Approval [Member] | |||||||
Stockholders Equity (Details) [Line Items] | |||||||
Per share (in Dollars per share) | $ 1 | ||||||
Initial Public Offering [Member] | |||||||
Stockholders Equity (Details) [Line Items] | |||||||
Common stock shares par value (in Dollars per share) | $ 0.0001 | ||||||
Common stock shares issued | 1 | ||||||
Initial public offering units | 4,987,951 | ||||||
Per unit (in Dollars per share) | $ 4.15 | ||||||
Gross proceeds (in Dollars) | $ 20,699,996 | ||||||
Offering costs (in Dollars) | $ 2,755,344 | ||||||
Warrants | 149,639 | ||||||
Exercise price (in Dollars per share) | $ 5.19 | ||||||
Private Placement [Member] | |||||||
Stockholders Equity (Details) [Line Items] | |||||||
Warrant exercised | 0 | ||||||
Warrants outstanding | 5,596,061 | 5,596,061 | |||||
Sale of units | 4,371,926 | ||||||
Common stock purchased percentage | 125% | ||||||
Total shares | 5,464,903 | 5,464,903 | |||||
Expiration term | 5 years | ||||||
Stock Purchase Warrants [Member] | |||||||
Stockholders Equity (Details) [Line Items] | |||||||
Expiration term | 5 years | ||||||
Initial Public Offering [Member] | |||||||
Stockholders Equity (Details) [Line Items] | |||||||
Common stock shares issued | 1 | ||||||
Redeemable Warrant [Member] | |||||||
Stockholders Equity (Details) [Line Items] | |||||||
Common stock shares par value (in Dollars per share) | $ 4.81375 | ||||||
Common stock shares issued | 1 | ||||||
Expire period | 5 years | ||||||
Warrant [Member] | Private Placement [Member] | |||||||
Stockholders Equity (Details) [Line Items] | |||||||
Common stock purchased percentage | 125% | ||||||
PIPE [Member] | |||||||
Stockholders Equity (Details) [Line Items] | |||||||
Exercise price (in Dollars per share) | $ 4.97 | ||||||
PIPE [Member] | Private Placement [Member] | |||||||
Stockholders Equity (Details) [Line Items] | |||||||
Offering costs (in Dollars) | $ 1,499,858 | ||||||
Warrants | 131,158 | ||||||
PIPE [Member] | |||||||
Stockholders Equity (Details) [Line Items] | |||||||
Exercise price (in Dollars per share) | $ 4.97 | ||||||
PIPE [Member] | Private Placement [Member] | |||||||
Stockholders Equity (Details) [Line Items] | |||||||
Gross proceeds (in Dollars) | $ 21,278,472 | ||||||
Per unit (in Dollars per share) | $ 4.97 |
Stockholders Equity (Details) -
Stockholders Equity (Details) - Schedule of outstanding and exercisable warrants - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Schedule Of Outstanding And Exercisable Warrants Abstract | ||
Numbers of Warrants Outstanding, Beginning Balance | 10,345,784 | |
Weighted Average Exercise Price, Beginning Balance | $ 4.9 | |
Weighted Average Life (Years), Beginning Balance | 5 years | |
Numbers of Warrants Outstanding, Warrants Issued | 10,733,651 | |
Weighted Average Exercise Price, Warrants Issued | $ 4.9 | |
Weighted Average Life (Years), Warrants Issued | ||
Numbers of Warrants Outstanding, Warrants Exercised | (271,589) | (387,867) |
Weighted Average Exercise Price, Warrants Exercised | $ 4.9 | |
Weighted Average Life (Years), Warrants Exercised | ||
Numbers of Warrants Outstanding, Ending Balance | 10,074,195 | 10,345,784 |
Weighted Average Exercise Price, Ending Balance | $ 4.9 | $ 4.9 |
Weighted Average Life (Years), Ending Balance | 5 years |
Stockholders Equity (Details)_2
Stockholders Equity (Details) - Schedule of purchases made by the company | 12 Months Ended |
Dec. 31, 2022 USD ($) $ / shares shares | |
Schedule Of Purchases Made By The Company Abstract | |
Total Number of Shares Purchased | 1,777,657 |
Average Price Paid per Share (in Dollars per share) | $ / shares | $ 1.87 |
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | 1,777,657 |
Maximum Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs (in Dollars) | $ | $ 6,667,595 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Nov. 30, 2021 | |
Stock-Based Compensation (Details) [Line Items] | |||
Option awards, description | 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-years contractual terms. | ||
Weighted-average grant-date fair value of options (in Dollars per share) | $ 1.8 | $ 4.15 | |
Weighted-average remaining contractual term | 9 years | 10 years | |
2021 Plan [Member] | |||
Stock-Based Compensation (Details) [Line Items] | |||
Number of shares of common stock available for issuance (in Shares) | 942,068 | ||
Restricted Stock [Member] | |||
Stock-Based Compensation (Details) [Line Items] | |||
Weighted-average remaining contractual term | 10 years |
Stock-Based Compensation (Det_2
Stock-Based Compensation (Details) - Schedule of stock-based compensation expense - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Stock-Based Compensation (Details) - Schedule of stock-based compensation expense [Line Items] | ||
Stock-based compensation expense | $ 481,303 | $ 168,057 |
Stock options [Member] | ||
Stock-Based Compensation (Details) - Schedule of stock-based compensation expense [Line Items] | ||
Stock-based compensation expense | 164,576 | 153,205 |
Restricted Stock [Member] | ||
Stock-Based Compensation (Details) - Schedule of stock-based compensation expense [Line Items] | ||
Stock-based compensation expense | $ 316,727 | $ 14,852 |
Stock-Based Compensation (Det_3
Stock-Based Compensation (Details) - Schedule of Black-Scholes option pricing model | 12 Months Ended |
Dec. 31, 2022 | |
Stock-Based Compensation (Details) - Schedule of Black-Scholes option pricing model [Line Items] | |
Risk-Free Interest Rate | 1.34% |
Expected Volatility | 50.12% |
Expected Dividends | 0% |
Minimum [Member] | |
Stock-Based Compensation (Details) - Schedule of Black-Scholes option pricing model [Line Items] | |
Expected Term | 5 years 6 months |
Maximum [Member] | |
Stock-Based Compensation (Details) - Schedule of Black-Scholes option pricing model [Line Items] | |
Expected Term | 6 years 3 months |
Stock-Based Compensation (Det_4
Stock-Based Compensation (Details) - Schedule of option activity - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Schedule Of Option Activity Abstract | ||
Shares, Outstanding at beginning | 1,587,000 | |
Weighted Average Exercise Price, Outstanding at beginning | $ 4.15 | |
Aggregate Intrinsic Value, Shares, Outstanding at beginning | ||
Shares, Granted | 68,000 | 1,587,000 |
Weighted Average Exercise Price, Granted | $ 1.8 | $ 4.15 |
Aggregate Intrinsic Value, Granted | ||
Shares, Forfeited or Expired and Other Adj | (97,000) | |
Weighted Average Exercise Price, Forfeited or Expired and Other Adj | $ 4.11 | |
Aggregate Intrinsic Value, Forfeited or Expired and Other Adj | ||
Shares, Outstanding at ending | 1,558,000 | 1,587,000 |
Weighted Average Exercise Price, Outstanding at ending | $ 4.17 | $ 4.15 |
Aggregate Intrinsic Value, Outstanding at ending | $ 3,015,300 | |
Shares, Exercisable | 453,918 | 30,658 |
Weighted Average Exercise Price, Exercisable | $ 4.16 | $ 4.15 |
Aggregate Intrinsic Value, Exercisable | $ 58,250 |
Stock-Based Compensation (Det_5
Stock-Based Compensation (Details) - Schedule of restricted stock activity - Restricted Stock [Member] - Restricted Stock [Member] - shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Stock-Based Compensation (Details) - Schedule of restricted stock activity [Line Items] | ||
Shares, outstanding at beginning | 154,960 | |
Shares, Granted | 145,660 | 160,318 |
Shares, Vested | (227,737) | (5,358) |
Shares, Forfeited | (8,717) | |
Shares, outstanding at ending | 64,166 | 154,960 |
Earnings (Loss) Per Share (Deta
Earnings (Loss) Per Share (Details) - Schedule of basic and diluted net loss per common share - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Earnings (Loss) Per Share (Details) - Schedule of basic and diluted net loss per common share [Line Items] | ||
Net Income | $ (778,441) | $ 235,240 |
Basic earnings (loss) | $ (0.04) | $ 0.02 |
Shares | 19,202,619 | 10,928,043 |
Diluted earnings (loss) per share | $ (0.04) | $ 0.01 |
Effect of dilutive securities: | ||
Warrants | 10,064,987 | |
Stock Options | $ 30,658 | |
Dilutive securities [Member] | ||
Earnings (Loss) Per Share (Details) - Schedule of basic and diluted net loss per common share [Line Items] | ||
Net Income | $ (778,441) | $ 235,240 |
Shares | 19,202,619 | 21,023,688 |
Income Tax Provision (Details)
Income Tax Provision (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Provision [Abstract] | ||
NOL carryforward related to continued operations | $ 728,000 | $ 113,000 |
Deferred tax asset carryforwards | $ 841,000 | $ 113,000 |
Income Tax Provision (Details)
Income Tax Provision (Details) - Schedule of provision for income taxes - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Federal: | ||
Current | $ 48,282 | |
Deferred | (532,700) | (76,300) |
Total | (484,418) | (76,300) |
State: | ||
Current | (19,469) | 5,500 |
Deferred | (195,300) | (36,700) |
Total | (214,769) | (31,200) |
Provision for income taxes | $ (699,187) | $ (107,500) |
Advertising (Details)
Advertising (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Advertising [Abstract] | ||
Advertising costs amount | $ 375,162 | $ 135,436 |
Subsequent Events (Details)
Subsequent Events (Details) | 1 Months Ended |
Jan. 25, 2023 | |
Subsequent Event [Member] | |
Subsequent Events (Details) [Line Items] | |
TRM purchase agreement, description | (a) $1,000,000 in cash, subject to a customary working capital adjustment, an adjustment for any indebtedness of TRM Corp. or the TRM Business as of the date and time of the TRM Closing (the “TRM Closing Date”) that is not part of the Assumed Liabilities (as defined in the TRM Purchase Agreement), and the TRM Earn Out Payments (as defined below); (b) the amount paid by TRM Corp. (cost) for Inventory (as defined in the TRM Purchase Agreement) that is on hand and owned by Seller as of the TRM Closing Date; (c) installment payments (the “TRM Installment Payments”) equal to (i) $400,000 on the first anniversary of the TRM Closing Date, (ii) $300,000 on the second anniversary of the TRM Closing Date, (iii) $200,000 on the third anniversary of the TRM Closing Date, and (iv) $200,000 on the fourth anniversary of the TRM Closing Date, with such TRM Installment Payments subject to adjustment for certain uncollected accounts receivable amounts outstanding after the first 12 months following the TRM Closing; and (d) four annual earnout payments (collectively, the “TRM Earn Out Payments”), each equal to (i) 45% of annual Gross Profit (as defined in the TRM Purchase Agreement) of TRM Corp. above $4,000,000 with respect to certain customers of TRM Corp. or primarily resulting from the efforts of TRM or certain employees or independent contractors of TRM Corp., plus (ii) 25% of the annual Gross Profit above $4,000,000 with respect to customers primarily resulting from the past or future efforts of the Company that are assigned to and primary responsibility of any employee or independent contractor of TRM Corp. as designated by the TRM Purchase Agreement, for the trailing 12-month period, as of the first, second, third, and fourth anniversary of the TRM Closing Date, with such TRM Earn Out Payments subject to adjustment as set forth in the TRM Purchase Agreement. |