UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
Schedule 14A Information
Proxy Statement Pursuant to
Section 14(a) of the
Securities Exchange Act of
1934
Filed
by the Registrant ☒
Filed
by a Party other than the Registrant ☐
Check the appropriate box:
| ☐ | Preliminary Proxy Statement |
| ☐ | Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2)) |
| ☒ | Definitive Proxy Statement |
| ☐ | Definitive Additional Materials |
| ☐ | Soliciting Material Pursuant to §240.14a-12 |
Stran
& Company, Inc. |
(Name of Registrant as Specified in Its Charter) |
(Name of Person(s) Filing Proxy Statement, if other than the Registrant) |
Payment of Filing Fee (Check all
boxes that apply):
| ☐ | Fee
paid previously with preliminary materials |
| ☐ | Fee
computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) an
0-11 |
Stran & Company, Inc.
2
Heritage Drive, Suite 600
Quincy,
MA 02171
NOTICE OF
ANNUAL MEETING OF STOCKHOLDERS
To
Be Held on November 30, 2022
Dear
Stockholder:
We
are pleased to invite you to attend the annual meeting of stockholders (the “Annual Meeting”) of Stran & Company,
Inc., a Nevada corporation (“Stran,” the “Company,” “we,” “us,”
or “our”), which will be held on November 30, 2022 at 1:00 p.m., Eastern
Time, for the following purposes:
| 1. | To
elect the six (6) members to our Board of Directors named in the accompanying proxy statement
to hold office until the 2023 Annual Meeting of Stockholders (the “2023 Annual Meeting”); |
| 2. | To
ratify the appointment of BF Borgers CPA PC as our independent registered public accounting
firm for our fiscal year ending December 31, 2022; and |
| 3. | To
transact such other matters as may properly come before the Annual Meeting and any adjournment
or postponement thereof. |
The
foregoing items of business are more fully described in the proxy statement accompanying this notice or made available over the Internet.
We are not aware of any other business to come before the Annual Meeting.
Our
board of directors has fixed the close of business on October 11, 2022 as the record date for a determination of stockholders entitled
to notice of, and to vote at, the Annual Meeting or any adjournment or postponement thereof. Only stockholders of record at the close
of business on October 11, 2022 are entitled to notice and to vote at the Annual Meeting and any
adjournment or postponement thereof.
The
Annual Meeting will be a completely virtual meeting of stockholders, which will be conducted solely
online via live webcast. You will be able to attend and participate in the annual meeting online, vote your shares electronically or
submit your questions prior to and during the meeting by visiting the website(s) indicated in your proxy materials. You may need to have
your control number included on your proxy card or on the instructions that accompanied your proxy materials or other information as
instructed through your broker, bank or other holder of record to join the annual meeting. There will be no physical location for stockholders
to attend, and you will not be able to attend the annual meeting in person.
It
is important that your shares are represented at the Annual Meeting. We urge you to review the attached proxy statement and, whether
or not you plan to attend the Annual Meeting, please vote your shares promptly by casting your vote via the Internet or any other provided
voting option, or, if you receive a full set of proxy materials by mail or request one be mailed to you, and prefer to mail your proxy
or voter instructions, please complete, sign, date, and return your proxy or vote instruction form in the pre-addressed envelope provided,
which requires no additional postage if mailed in the United States. You may revoke your vote by submitting a subsequent vote over the
Internet, by mail or by any other option provided for voting before the Annual Meeting, or by voting electronically at the Annual Meeting.
|
By Order of the
Board of Directors |
|
|
Dated: October 31, 2022 |
/s/ Andrew Stranberg |
|
Andrew Stranberg |
|
Executive Chairman, Secretary
and Treasurer |
Important
Notice Regarding the Availability of Proxy Materials for the Annual Meeting to Be Held on November
30, 2022: Our 2022 Proxy Statement and Annual Report on Form 10-K for the year ended December
31, 2021 are available at https://materials.proxyvote.com/86260J.
PROXY STATEMENT
2022 ANNUAL
MEETING OF STOCKHOLDERS
TO BE HELD
ON NOVEMBER 30, 2022
A
proxy is your legal designation of another person to vote the stock you own. That designee is referred to as a proxy holder. Designation
of a particular proxy holder can be effected by completion of a written proxy card, or by voting via the Internet or by another provided
voting option. If you return a proxy card, or vote by the Internet or other provided voting option, John Audibert and David Browner,
our Vice President of Growth and Strategic Initiatives and Interim Chief Financial Officer, respectively, will act as your designated
proxy holders for the Annual Meeting and will vote your shares at the Annual Meeting as you have instructed them on the proxy card. This
way, your shares will be voted whether or not you attend the Annual Meeting. Even if you plan to attend the Annual Meeting, we urge you
to vote in one of the ways described below so that your vote will be counted even if you are unable or decide not to attend the Annual
Meeting.
QUESTIONS AND ANSWERS
ABOUT THIS PROXY MATERIAL AND VOTING
What is a proxy statement?
A
proxy statement is a document that we are required by regulations of the Securities and Exchange Commission, or SEC, to give you when
we ask you to provide a proxy to vote your shares at the Annual Meeting. Among other things, this Proxy Statement describes the proposals
on which stockholders will be voting and provides information about us.
We
are soliciting your proxy to vote at the Annual Meeting and at any adjournment or postponement of the Annual Meeting. We will use the
proxies received in connection with proposals to:
|
1. |
elect
the six (6) members of our Board named in this proxy statement to hold office until the 2023 Annual Meeting; |
|
2. |
ratify
the appointment of BF Borgers CPA PC as our independent registered public accounting firm for our fiscal year ending December 31,
2022; and |
|
3. |
To transact
such other matters as may properly come before the Annual Meeting and any adjournment or postponement thereof. |
How
do I attend the Annual Meeting?
The
Annual Meeting will be a completely virtual meeting of stockholders, which will be conducted exclusively by webcast. You are entitled
to participate in the Annual Meeting only if you were a stockholder of the Company as of the close of business on the
Record Date (as defined below). If your shares are held in the name of a broker, bank, or other nominee, you should follow the instructions
provided by your broker, bank, or other nominee in order to participate in the virtual Annual Meeting. No physical meeting will be held.
You
will be able to attend the virtual Annual Meeting online and submit your questions during the meeting by visiting the website(s)
indicated in your proxy card or on the instructions that accompanied your proxy materials. You also will be able to vote your shares
online by attending the virtual Annual Meeting. To participate in the Annual Meeting, you may need the control number included on your
proxy card or on the instructions that accompanied your proxy materials or other information as instructed through your broker, bank
or other holder of record. Shares held in your name as the stockholder of record may be voted electronically during the Annual Meeting.
If your shares are held in the name of a broker, bank, or other nominee, you should contact your broker, bank, or other nominee to obtain
your control number or other instructions provided by your broker, bank or other holder of record. However, even if you plan to attend
the Annual Meeting, the Company recommends that you vote your shares in advance, so that your vote will be counted if you later decide
not to attend the Annual Meeting.
In
order to ensure that the virtual Annual Meeting provides stockholders with a meaningful opportunity to participate, stockholders will
be able to ask questions of the Board and management both at the time of registration and during the Annual Meeting. Stockholders may
submit questions during the Annual Meeting by typing questions in the question/chat section of the meeting screen. Questions relevant
to meeting matters will be answered during the Annual Meeting, subject to time constraints and in accordance with the rules of conduct
for the Annual Meeting. We will also post on our investor relations page at https://materials.proxyvote.com/86260J responses
to questions relevant to meeting matters that are not answered during the Annual Meeting due to time constraints.
The
virtual online meeting will begin promptly at 1:00 p.m., Eastern Time. We encourage you to
access the meeting prior to the start time leaving ample time for the check in. Please follow the registration instructions as outlined
in this proxy statement.
Why are you
holding a virtual meeting instead of a physical meeting?
The
Board has decided to hold the Annual Meeting as a virtual-only meeting this year in light of the public health and travel concerns arising
in connection with the evolving coronavirus (COVID-19) pandemic, and to support the health and well-being of our stockholders, directors,
employees, and communities.
In
the event that the logistics of the Annual Meeting are further impacted by developments related to or stemming from this pandemic, we
will announce such information as promptly as practicable. Please monitor our website at https://materials.proxyvote.com/86260J
for updated information. As always, we encourage you to vote your shares prior to the meeting.
What if I have
technical difficulties or trouble accessing the virtual annual meeting?
We
will have technicians ready to assist you with any technical difficulties you may have accessing the virtual Annual Meeting website(s).
If you encounter any difficulties accessing the virtual Annual Meeting website(s) during the check-in or meeting time, please call the
technical support number that will be posted on the Annual Meeting login page.
Who may attend
the Annual Meeting?
Only
record holders and beneficial owners of our common stock, or their duly authorized proxies, may attend the Annual Meeting.
Who is entitled
to vote?
The
Board has fixed the close of business on October 11, 2022 as the record date (the “Record
Date”) for the determination of stockholders entitled to notice of, and to vote at, the Annual Meeting or any adjournment or
postponement thereof. Only stockholder who owned our common stock on the Record Date are entitled to vote at the Annual Meeting. On the
Record Date, there were 19,073,975 shares of our common stock outstanding.
What
is the difference between holding shares as a record holder and as a beneficial owner (holding shares in street name)?
If
your shares are registered in your name with our transfer agent, VStock Transfer, LLC, you are the “record holder” of
those shares. If you are a record holder, these proxy materials have been provided directly to you by the Company.
If
your shares are held in a stock brokerage account, a bank or other holder of record, you are considered the “beneficial owner”
of those shares in “street name.” If your shares are held in street name, these proxy materials have been forwarded to you
by that organization. The organization holding your account is considered to be the stockholder of record for purposes of voting at the
Annual Meeting. As the beneficial owner, you have the right to instruct this organization on how to vote your shares. The majority of
our stockholders hold their shares in street name.
What am I voting
on?
There
are two (2) matters scheduled for a vote:
1. To
elect six (6) members to our Board of Directors to hold office until the 2023 Annual Meeting; and
2. To
ratify the appointment of BF Borgers CPA PC as our independent registered public accounting firm for our fiscal year ending December 31,
2022.
What if another
matter is properly brought before the Annual Meeting?
The
Board knows of no other matters that will be presented for consideration at the Annual Meeting. If any other matters are properly brought
before the Annual Meeting, your proxy gives authority to the designated proxy holders to vote on such matters according to their best
judgment.
How do I vote?
Stockholders
of Record
Record
holders of our common stock have two methods of voting:
1. Vote
by Mail. To vote by mail, please mark, date, sign and promptly mail your proxy card (a postage-paid envelope is provided for mailing
in the United States). If you received a Notice of Internet Availability of Proxy Materials, you may request a proxy card by following
the instructions provided.
2. Vote
Electronically at the Virtual Annual Meeting. Attend and vote at the virtual Annual Meeting. To participate in the annual meeting,
you may need the control number included on your proxy card or other information on the instructions that accompanied your proxy materials.
Beneficial
Owners of Shares Held in Street Name
Beneficial
owners of our common stock have four methods of voting:
1. Vote
by Internet. You may vote by using the Internet in accordance with the instructions provided on your Notice of Internet Availability
of Proxy Materials or vote instruction form.
2. Vote
by Mail. Mark, date, sign and promptly mail your vote instruction form (a postage-paid envelope is provided for mailing in the
United States). If you received a Notice of Internet Availability of Proxy Materials, you may request a vote instruction form by following
the instructions provided.
3. Vote
by Phone. The telephone number for voting by phone is on your Notice of Internet Availability of Proxy Materials or vote instruction
form.
4. Vote
Electronically at the Virtual Annual Meeting. Attend and vote at the virtual Annual Meeting. Your broker, bank, or other nominee
will provide any necessary control number or other voting instructions.
When
must my votes be received by?
All
shares entitled to vote and represented by a properly completed and executed proxy received before the Annual Meeting and not revoked
will be voted at the Annual Meeting as instructed in a proxy delivered before the Annual Meeting. If you do not indicate how your shares
should be voted on a matter, the shares represented by your properly completed and executed proxy will be voted as the Board recommends
on each of the enumerated proposals, with regard to any other matters that may be properly presented at the Annual Meeting and on all
matters incident to the conduct of the Annual Meeting. If you wish to vote at the Annual Meeting, you may need the
control number included on your proxy card or on the instructions that accompanied your proxy materials or other voting instructions
from the broker, bank, or other holder of record in order to attend the virtual Annual Meeting and vote your shares. All votes will be
tabulated by the inspector of election appointed for the Annual Meeting, who will separately tabulate affirmative and negative votes,
abstentions and broker non-votes.
We
provide Internet proxy voting to all shareholders except holders of record and will hold the Annual Meeting virtually to allow you to
attend the Annual Meeting and vote your shares online, with procedures designed to ensure the authenticity and correctness of your vote
instructions. However, please be aware that you must bear any costs associated with your Internet access, such as usage charges from
Internet access providers and telephone companies.
How many votes
do I have?
Each
share of our common stock that you own as of October 11, 2022 entitles you to one vote.
Is my vote confidential?
Yes,
your vote is confidential. Only the inspector of elections, individuals who help with processing and counting your votes and persons
who need access for legal reasons will have access to your vote. This information will not be disclosed, except as required by law.
How will my shares
be voted if I give no specific instruction?
We
must vote your shares as you have instructed. If there is a matter on which a stockholder of record has given no specific instruction
but has authorized us generally to vote the shares, they will be voted as follows:
| 1. | “FOR”
the election of each of the six (6) members to our Board of Directors to hold office
until the 2023 Annual Meeting; and |
| 2. | “FOR”
the ratification of the appointment of BF Borgers CPA PC as our independent registered public
accounting firm for our fiscal year ending December 31, 2022. |
This
authorization would exist, for example, if a stockholder of record merely signs, dates and returns their proxy card but does not indicate
how its shares are to be voted on one or more proposals. If other matters properly come before the Annual Meeting and you do not provide
specific voting instructions, your shares will be voted at the discretion of the proxies.
How are votes counted?
Votes
will be counted by the inspector of election appointed for the Annual Meeting, who will separately count, for the election of directors,
“FOR,” “WITHHOLD” and broker non-votes; and, with respect to the other proposal, votes “FOR,”“AGAINST,”
“ABSTAIN,” and broker non-votes.
What is the effect of a withhold vote?
Withhold
votes will have no legal effect on the election of directors because such elections are by a plurality. Withhold votes will
be counted as shares present and entitled to vote for purposes of determining a quorum.
What is a broker non-vote?
If
you are a beneficial owner of shares held by a broker, bank, trust or other nominee and you do not provide your broker, bank, trustee
or other nominee with voting instructions, your shares may constitute “broker non-votes”. Broker non-votes occur on a matter
when the broker, bank, trustee or other nominee is not permitted under applicable stock exchange rules to vote on that matter without
instructions from the beneficial owner and instructions are not given. These matters are referred to as “non-routine” matters.
Proposal
No. 1 is considered a “non-routine” matter, while Proposal No. 2 is considered a “routine” matter. Therefore,
if you are a beneficial owner of shares held in street name and do not provide voting instructions, your shares will not be voted on
Proposal No. 1, and a broker non-vote will occur on this matter. In tabulating the voting result for any particular proposal, shares
that constitute broker non-votes are not considered voting power present with respect to that proposal. Thus, broker non-votes will not
affect the outcome of any matter being voted on at the Annual Meeting, assuming that a quorum is obtained. Because Proposal No. 2 is
a “routine” matter, a broker, bank, trustee or other nominee may be permitted to exercise its discretion on this proposal,
which means there will be no broker non-votes on this matter. Broker non-votes will be counted as
shares present for purposes of determining a quorum to the extent that the brokers, banks, trustees or other nominees use their discretionary
authority to vote such shares on Proposal No. 2.
What is an abstention?
An
abstention is a stockholder’s affirmative choice to decline to vote on a proposal. Under Nevada law, abstentions are counted as
shares present and entitled to vote at the Annual Meeting, and therefore will be counted for purposes of determining a quorum.
Generally, unless provided otherwise by applicable law, our Amended and Restated Bylaws (“Bylaws”) provide that an
action of our stockholders (other than the election of directors) is approved if a majority of the number of shares of stock entitled
to vote thereon and present (either in person or by proxy) vote in favor of such action. Therefore, votes marked as “ABSTAIN”
will have the same effect as a vote “AGAINST” the outcome in Proposal No. 2. Votes marked as “ABSTAIN” on Proposal
No. 1 will have no effect because directors are elected by plurality voting.
How many shares must be present or
represented to conduct business at the Annual Meeting?
A
“quorum” is necessary to conduct business at the Annual Meeting. A quorum is established if there
is the presence in person or by proxy of the holders of a majority of the shares issued and outstanding and entitled to vote at the Annual
Meeting. Shares owned by the Company are not considered outstanding or considered to be present at the Annual Meeting. Abstentions will
be counted as present for purposes of determining a quorum at the Annual Meeting. Similarly, broker non-votes will be counted as present
for purposes of determining a quorum at the Annual Meeting to the extent that the brokers, banks, trustees or other nominees use their
discretionary authority to vote such shares on Proposal No. 2. If a quorum is not present, the Annual Meeting will be adjourned until
a quorum is obtained.
How many votes
are needed for each proposal to pass?
Proposal |
|
Vote Required |
Election
of each of the six (6) members to our Board of Directors |
|
Plurality
of the votes cast (the six directors receiving the most “FOR” votes) |
|
|
|
Ratification
of the Appointment of BF Borgers CPA PC as our Independent Registered Public Accounting Firm for our Fiscal Year Ending December 31,
2022 |
|
The affirmative
vote of the holders of a majority in voting power of the votes cast affirmatively or negatively (excluding abstentions) at the Annual
Meeting by the holders entitled to vote thereon. |
What are the voting
procedures?
In
voting by proxy with regard to the election of directors, you may vote in favor of all nominees, withhold your votes as to all nominees,
or vote in favor of specific nominees and withhold your votes as to specific nominees. With regard
to other proposals, you may vote in favor of or against the proposal, or you may abstain from voting on the proposal. You should specify
your respective choices on the accompanying proxy card or your vote instruction form or as instructed in your Notice of Internet Availability
of Proxy Materials.
Can I change my vote or revoke my
proxy?
If
you are a stockholder of record, you may revoke your proxy at any time prior to the vote at the Annual Meeting. If you submitted your
proxy by mail, you must file with our Secretary a written notice of revocation or deliver, prior to the vote at the Annual Meeting, a
valid, later-dated proxy. If you submitted your proxy by the Internet, you may revoke your proxy with a later Internet proxy. Attendance
at the Annual Meeting will not have the effect of revoking a proxy unless you give written notice of revocation to the Secretary before
the proxy is exercised or you vote electronically at the Annual Meeting. If you are a beneficial owner, you may vote by submitting new
voting instructions to your broker, bank or nominee, or, if you have obtained a legal proxy from your broker, bank or nominee giving
you the right to vote your shares, by attending the meeting and voting electronically.
Who is paying for
the expenses involved in preparing and mailing this proxy statement?
All
of the expenses involved in preparing, assembling and mailing these proxy materials and all costs of soliciting proxies will be paid
by us. In addition to the solicitation by mail, proxies may be solicited by our officers and other employees by telephone or in person.
Such persons will receive no compensation for their services other than their regular salaries. Arrangements will also be made with brokerage
houses and other custodians, nominees and fiduciaries to forward solicitation materials to the beneficial owners of the shares held of
record by such persons, and we may reimburse such persons for reasonable out of pocket expenses incurred by them in forwarding solicitation
materials.
How can I find
out the results of the voting at the Annual Meeting?
Preliminary
voting results will be announced at the Annual Meeting. In addition, final voting results will be disclosed in a Current Report on Form 8-K that
we expect to file with the SEC within four business days after the Annual Meeting. If final voting results are not available to
us in time to file a Form 8-K with the SEC within four business days after the Annual Meeting, we intend to file a Form 8-K to
publish preliminary results and, within four business days after the final results are known to us, file an additional Form 8-K to
publish the final results.
Do
the Company’s officers and directors have an interest in any of the matters to be acted upon at the Annual Meeting?
Members
of the Board have an interest in Proposal No. 1, the election to the Board of the six (6) director nominees set forth herein, as
all of the nominees are currently members of the Board. Members of the Board and executive officers of the Company do not have any interest
in Proposal No. 2, the ratification of the appointment of our independent registered public accounting firm.
I am a stockholder,
and I only received a copy of the Notice of Internet Availability of Proxy Materials in the mail. How may I obtain a full set of the
proxy materials?
In
accordance with the “notice and access” rules of the SEC, we may furnish proxy materials,
including this proxy statement, to our stockholders of record and beneficial owners of shares by providing access to such documents on
the Internet instead of mailing printed copies. Stockholders will not receive printed copies of the proxy materials unless they request
them. Instead, the Notice of Internet Availability of Proxy Materials, to the extent that it was mailed to our stockholders, contains
instructions on accessing and reviewing all of the proxy materials on the Internet. If you would like to receive a paper or electronic
copy of our proxy materials, you should follow the instructions for requesting such materials in the Notice of Internet Availability
of Proxy Materials or other proxy materials that you received.
I share an address with another stockholder,
and we received only one paper copy of the proxy materials. How may I obtain an additional copy of the proxy materials?
We
have adopted a procedure called “householding,” which the SEC has approved. Under this procedure, we deliver a single copy
of the Notice of Internet Availability of Proxy Materials, if applicable, and the proxy materials to multiple stockholders who share
the same address unless we received contrary instructions from one or more of the stockholders. This procedure reduces our printing costs,
mailing costs and fees. Stockholders who participate in householding will continue to be able to access and receive separate Notices
of Internet Availability of Proxy Materials and proxy materials. Upon written or oral request, we will deliver promptly a separate copy
of the Notice of Internet Availability of Proxy Materials and, if applicable, the proxy materials to any stockholder at a shared address
to which we delivered a single copy of any of these documents. To receive a separate copy of the Notice of Internet Availability of Proxy
Materials, if applicable, and these proxy materials, stockholders may contact:
Corporate Secretary
Stran & Company,
Inc.
2 Heritage Drive,
Suite 600
Quincy, MA 02171
Telephone: (800)
833-3309
Stockholders
who hold shares in street name (as described above) may contact their brokerage firm, bank, broker-dealer or other similar organization
to request information about householding.
Whom should I contact with other
questions?
You
may obtain information from us by making a request by telephone or in writing at the address of our Corporate Secretary set forth above.
PROPOSAL
NO. 1
ELECTION
OF DIRECTORS
At
the Annual Meeting, the stockholders will elect six (6) directors to hold office until the 2023 Annual Meeting. Directors are elected
by a plurality of votes cast by stockholders. In the event the nominees are unable or unwilling to serve as directors at the time of
the Annual Meeting, the proxies will be voted for any substitute nominees designated by the present Board or the proxy holders to fill
such vacancy, or for the balance of the nominees named without nomination of a substitute, or the size of the Board will be reduced in
accordance with the Bylaws of the Company. The Board has no reason to believe that the persons named below will be unable or
unwilling to serve as nominees or as directors if elected.
Assuming
a quorum is present, the six (6) nominees receiving the highest number of affirmative votes of shares entitled to be voted for such
persons will be elected as directors of the Company to serve for a one-year term. Unless marked otherwise, proxies received will be voted
“FOR” the election of the nominees named below. In the event that additional persons are nominated for election as directors,
the proxy holders intend to vote all proxies received by them in such a manner as will ensure the election of the nominees listed below,
and, in such event, the specific nominees to be voted for will be determined by the proxy holders.
Information with
Respect to Director Nominees
Listed
below are the current directors who are nominated to hold office until their successors are elected and qualified, and their ages as
of the Record Date (October 11, 2022):
Name | |
Age | |
Andrew Stranberg | |
| 50 | |
Andrew Shape | |
| 49 | |
Travis McCourt | |
| 39 | |
Alan Chippindale | |
| 63 | |
Alejandro Tani | |
| 49 | |
Ashley Marshall | |
| 37 | |
The
names of the nominees and certain biographical information about each current director standing for election at the Annual Meeting, including
a description of his or her business experience, qualifications, education and skills that led our Board to conclude that such individual
should serve as a member of our Board, are set forth below:
Andrew
Stranberg co-founded our Company and has served as our Executive Chairman since 1995.
From 1995 to January 2020, Mr. Stranberg was also our Chief Executive Officer. In 1995, Mr. Stranberg founded Stran Capital LLC, a family
office, and has since been its Chief Executive Officer. From 1997 to 2016 he served as Chairman of STRAN Technologies IT Services, LLC,
a U.S.-based producer of harsh environment and tactical interconnect products and services, and which was sold to Corning (NYSE:GLW)
in 2016. From 2012 to November 2019, Mr. Stranberg was the founder and manager of Stran Maritime LLC for a joint venture with Atlas Maritime
Ltd., an international shipping company, to conduct a joint purchase of two ships. Mr. Stranberg is a graduate of the University of New
Hampshire Peter T. Paul College of Business and Economics.
We
believe that Mr. Stranberg is qualified to serve on our board of directors due to his deep knowledge of Stran and his long executive
and board experience with us since his co-founding of the Company.
Andrew
Shape has over 25 years of merchandising, marketing, branding, licensing, and management
experience. He is our co-founder and since 1996 has served as our President and director, and as our Chief Executive Officer since January
2020. From July 2018 to February 2021, Mr. Shape also served as the Chief Executive Officer and President and a director of Long Blockchain
Corp., a Delaware corporation, or LBCC, in connection with a business co-managed with LBCC for its subsidiary Stran Loyalty Group Inc.,
a Delaware corporation, or SLG, that was focused on co-managing our loyalty and gift card programs. From June 2018 through January 2022,
Mr. Shape served as a Director for Naked Brand Group, a Nasdaq-listed leading intimate apparel and swimwear company. Prior to forming
Stran, from August 1995 to September 1996, Mr. Shape worked at Copithorne & Bellows Public Relations (a Porter Novelli company) as
an Account Executive covering the technology industry. Mr. Shape holds a BA degree from the University of New Hampshire.
We
believe that Mr. Shape is qualified to serve on our board of directors due to his deep knowledge of Stran, his industry expertise, and
his experience as a director on other Nasdaq-listed companies.
Travis
McCourt has been a member of our board of directors since November 2021. Mr. McCourt
has over 20 years of experience from the financial industry working with companies to optimize their operational and financial procedures.
In June 2014, he founded Conchoid Capital Fund where he still serves as a principal. From May 2012 to December 2014, he was a Principal
at the investment firm McCourt. From November 2007 to May 2012, he was the Vice President of Alternative Capital Markets at Goldman Sachs.
From November 2004 to December 2007, he served as a Front Office Executive for the Los Angeles Dodgers. Mr. McCourt graduated from Georgetown
University.
We
believe that Mr. McCourt is qualified to serve on our board of directors due to his investment management, buyout analysis, capital markets,
investor relations and other business experience. Our board also determined that Mr. McCourt qualifies
as an “audit committee financial expert” as defined by Item 407(d)(5) of Regulation S-K.
Alan
Chippindale has been a member of our board of directors since November 2021. Mr. Chippindale
has been President of Engage & Excel Enterprises Inc., an employee recruitment and M&A consulting company, since July 2017. From
January 2008 to June 2017, Mr. Chippindale was Chief Business Development Officer of BrandAlliance Inc., a promotional products distributor.
Mr. Chippindale graduated from Bowling Green State University with a bachelor degree in International Business and Marketing. Mr. Chippindale
has been listed on the ASI Power 50 five times, was Chief Executive Officer and a director of BrandAlliance Inc., and was President of
Proforma Inc. from September 1987 to December 2004. He is a leading business development, recruiting and merger and acquisition consultant
for the promotional products industry, a strategic think tank member, and a certified marketing professional. He has managed over 100
business combinations and the recruiting of over 1,000 sales professionals.
We
believe that Mr. Chippindale is qualified to serve on our board of directors due to his leading role in the promotional products industry.
Alejandro
Tani has been a member of our board of directors since November 2021. Mr. Tani has
vast experience from the technology, oil and gas industry and has several successful startups behind him. He is the current owner of
Clair Trading, an import and export business since January 2007. He has also been Chief Information Officer and Chief Executive
Officer of Innovative Genetics Inc., a packaging and IP company with a biotech arm serving the cannabis industry, and a Director and
Partner of Green Beehive II LLC, a cannabis manufacturing company, since February 2017. Mr. Tani graduated from University Catolica Andres
Bello - the largest and oldest Catholic university in Venezuela.
We
believe that Mr. Tani is qualified to serve on our board of directors due to his business experience. Our
board also determined that Mr. Tani qualifies as an
“audit committee financial expert” as defined by Item 407(d)(5) of Regulation S-K.
Ashley
L. Marshall has been a member of our board of directors since November 2021. Since
November 2021, Ms. Marshall has been a Merchandise Manager at e-commerce furniture and home goods retailer Wayfair. From January 2015
to August 2020, Ms. Marshall was in the following planner positions with off-price apparel retailer The TJX Companies, Inc.: Allocation
Analyst, January 2015 to December 2015; Senior Analyst, December 2015 to September 2017; Associate Planner, September 2017 to August
2020. From January 2014 to December 2015, Ms. Marshall was an attorney in the United States Treasury Department. Ms. Marshall earned
a Bachelor of Business Administration from the University of Mississippi and a Juris Doctor from The George Washington University Law
School.
We
believe that Ms. Marshall is qualified to serve on our board of directors due to her over five years’ experience developing business
strategy for TJX, a leading global retailer, and her background in law.
Our
directors currently have terms which will end at the Annual Meeting or until their successors are elected and qualify, subject to their
prior death, resignation or removal. Officers serve at the discretion of the board of directors. There is no arrangement or understanding
between any director or executive officer and any other person pursuant to which he or she was or is to be selected as a director, nominee
or officer.
Our
Nominating and Corporate Governance Committee, the members of which are all non-management directors, recommended each of the
above directors as a nominee for election at the Annual Meeting and inclusion on the Company’s proxy card.
Family Relationships
There
are no family relationships among any of our officers or directors.
Involvement in
Certain Legal Proceedings
To
the best of our knowledge, none of our directors or executive officers have, during the past ten years, been involved in any legal
proceedings described in subparagraph (f) of Item 401 of Regulation S-K.
Board Recommendation
THE
BOARD RECOMMENDS THAT YOU VOTE “FOR” EACH OF THE NOMINEES TO THE BOARD SET FORTH IN THIS PROPOSAL NO. 1.
PROPOSAL
NO. 2
RATIFICATION
OF THE APPOINTMENT OF OUR INDEPENDENT
REGISTERED
PUBLIC ACCOUNTING FIRM FOR FISCAL YEAR ENDING
DECEMBER 31,
2022
The
Audit Committee has selected BF Borgers CPA PC (“BF Borgers”) as the Company’s independent registered public accounting
firm, to audit the consolidated financial statements of the Company for the fiscal year ending December 31, 2022. A representative of
BF Borgers is expected to be available at the virtual Annual Meeting and will have the opportunity to make a statement at the Annual
Meeting if they desire to do so. Further, such representative is expected to be available to respond to appropriate questions at the
Annual Meeting.
Although
ratification is not required by our Bylaws or otherwise, we are asking our stockholders to ratify
this appointment as a matter of good corporate practice. If the selection is not ratified, the Audit Committee will consider whether
it is appropriate to select another independent accounting firm. Even if the selection is ratified, the Audit Committee may select a
different independent accounting firm at any time during the year if it determines that this would be in the best interests of the Company
and its stockholders.
BF
Borgers’s audit reports on the financial statements of the Company for the years ended December 31, 2020 and 2021 did not contain
any adverse opinion or a disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope, or accounting principles.
During
the fiscal years ended December 31, 2021 and 2020, there were (i) no disagreements between the Company and BF Borgers on any matter of
accounting principles or practices, financial statement disclosure, or auditing scope or procedure, any of which, if not resolved to
BF Borgers’s satisfaction, would have caused BF Borgers to make reference thereto in their reports, and (ii) no “reportable
events” within the meaning of Item 304(a)(1)(v) of Regulation S-K.
Principal Accountant
Fees and Services
The
aggregate fees billed to the Company by BF Borgers, the Company’s independent registered public accounting firm, for the indicated
services for each of the last two fiscal years were as follows:
| |
Year Ended | |
| |
December 31, | |
| |
2021 | | |
2020 | |
Audit Fees | |
$ | 194,400 | | |
$ | — | |
Audit-Related Fees | |
| — | | |
| — | |
Tax Fees | |
| — | | |
| — | |
All Other Fees | |
| — | | |
| — | |
Total | |
$ | 194,400 | | |
$ | — | |
As
used in the table above, the following terms have the meanings set forth below.
Audit
Fees
Audit
fees consist of fees for professional services performed by the Company’s independent registered public accounting firm for the
audit of the financial statements included in our Annual Report on Form 10-K and review of the financial statements included in our quarterly
Form 10-Q filings, reviews of registration statements and issuances of consents, and services that are normally provided in connection
with statutory and regulatory filings or engagements.
Audit-Related
Fees
Audit
related fees consist of fees for assurance and related services performed by the Company’s
independent registered public accounting firm that are reasonably related to the performance of the audit or review of our financial
statements and are not reported under the paragraph captioned “Audit Fees” above. We did not engage our independent registered
public accounting firm to provide assurance or related services during the last two fiscal years.
Tax
Fees
Tax
fees consist of fees for professional services performed by the Company’s independent registered public accounting firm with respect
to tax compliance, tax advice, tax consulting and tax planning. We did not engage our independent
registered public accounting firm to provide tax compliance, tax advice or tax planning services during the last two fiscal years.
All
Other Fees
All
other fees consist of fees for products and services provided by the Company’s independent registered public accounting firm, other
than for the services reported under the headings “Audit Fees,” “Audit Related Fees” and “Tax Fees”
above. We did not engage our independent registered public accounting firm to render services to
us during the last two fiscal years, other than as reported above.
Pre-Approval
Policies and Procedures
All
auditing services and permitted non-audit services (including the fees and terms thereof) to be performed for the Company by our independent
auditor must be approved by the Audit Committee in advance, except non-audit services (other than review and attestation services) if
such services fall within exceptions established by the SEC. The Audit Committee will pre-approve any permissible non-audit services
to be provided by the Company’s independent auditors on behalf of the Company that do not fall within any exception to the pre-approval
requirements established by the SEC. The Audit Committee may delegate to one or more members the authority to pre-approve permissible
non-audit services, but any such delegate or delegates must present their pre-approval decisions to the Audit Committee at its next meeting.
All of BF Borgers’s services described above were pre-approved by the Audit Committee or by
one or more members under the delegate authority described above.
Vote Required
The
selection of our independent registered public accounting firm is not required to be submitted to a vote of our stockholders for ratification.
However, we are submitting this matter to the stockholders as a matter of good corporate governance. Even if the appointment is ratified,
the Audit Committee may, in its discretion, appoint a different independent registered public accounting firm at any time during the
year if it determines that such a change would be in the best interests of us and our stockholders. If the appointment is not ratified,
the Audit Committee will reconsider whether or not to retain BF Borgers.
Ratification
of BF Borgers as our Company’s independent registered public accountant for the fiscal year ending December 31, 2022 requires the
affirmative vote of a majority of the votes cast (meaning the number of shares of Common Stock voted “for” this proposal
must exceed the number of shares of common stock voted “against” this proposal). Abstentions will have no effect on this
proposal because an abstention does not count as a vote cast. There will be no broker “non-votes” for this proposal because
brokers have discretion to vote the shares held for the beneficial owners.
Board Recommendation
THE
BOARD RECOMMENDS A VOTE “FOR” RATIFICATION OF THE APPOINTMENT OF BF BORGERS CPA PC AS THE COMPANY’S INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING DECEMBER 31, 2022.
AUDIT COMMITTEE REPORT
The following Audit Committee
Report shall not be deemed to be “soliciting material,” deemed “filed” with the SEC or subject to the liabilities
of Section 18 of the Exchange Act. Notwithstanding anything to the contrary set forth in any of the Company’s previous filings
under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act that might incorporate by reference
future filings, including this Proxy Statement, in whole or in part, the following Audit Committee Report shall not be incorporated by
reference into any such filings.
The
Audit Committee is a committee of the Board comprised solely of independent directors as required by the listing rules of The
Nasdaq Stock Market LLC (“Nasdaq”) and rules and regulations of the SEC. The Audit Committee provides assistance
to the Board in fulfilling its legal and fiduciary obligations in matters involving the Company’s accounting, auditing, financial
reporting, internal control and legal compliance functions by approving the services performed by the Company’s independent registered
public accountants and reviewing their reports regarding the Company’s accounting practices and systems of internal accounting controls
as set forth in a written charter adopted by the Board, which is available on the Company’s website at https://ir.stran.com.
The composition and responsibilities of the Audit Committee, as reflected in its charter, are intended to be in accordance with applicable
requirements. The Audit Committee reviews and assesses the adequacy of its charter and the Audit Committee’s performance on an annual
basis.
The
Company’s management is responsible for preparing the Company’s financial statements and the independent registered
public accountants are responsible for auditing those financial statements. The Audit Committee is responsible for overseeing the conduct
of these activities by the Company’s management and the independent registered public accountants.
In
this context, the Audit Committee has met and held discussions with management and the independent registered public accountants.
Management represented to the Audit Committee that the Company’s consolidated financial statements were prepared in accordance with U.S.
generally accepted accounting principles, and the Audit Committee has reviewed and discussed the consolidated financial statements with
management and the independent registered public accountants.
The Audit Committee has discussed
with the independent registered public accountants matters required to be discussed by Auditing Standard No. 1301, as adopted by the Public
Company Accounting Oversight Board (“PCAOB”) and approved by the SEC. In addition, the independent registered public
accountants provided to the Audit Committee the written disclosures and letter from the independent registered public accountants as required
by applicable requirements of the PCAOB regarding the independent registered public accountants’ communications with the Audit Committee
concerning independence and the Audit Committee has discussed with such accountants such accountants’ independence from the Company
and its management. The Audit Committee has discussed with management and the independent registered public accounts the procedures for
selection of consultants, fully considered whether those services provided by the independent registered public accountants are compatible
with maintaining such accountants’ independence and has determined that the non-audit services performed by the independent registered
public accountant are compatible with maintaining their independence.
The
Audit Committee has discussed with the Company’s management and its independent registered public accountants, with and without
management present, their evaluations of the Company’s internal accounting controls and the overall quality of the Company’s financial
reporting.
In
reliance on the reviews and discussions with management and the independent registered public accountants referred to above, the
Audit Committee recommended to the Board, and the Board approved, the inclusion of the audited financial statements in the Company’s
Annual Report on Form 10-K for the fiscal year ended December 31, 2021, for filing with the SEC.
In
addition, the audit committee has selected BF Borgers CPA PC as independent registered public accountants to audit the books, records
and accounts of the Company and its subsidiaries for the fiscal year ending December 31, 2022.
|
Submitted by the Audit Committee |
|
Travis McCourt, Chairman |
|
Alejandro Tani |
|
Ashley Marshall |
SECURITIES OWNERSHIP
OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS
Securities Ownership of Certain Beneficial
Owners and Management
The following table sets forth
information known to us with respect to the beneficial ownership of our common stock as of the close of business on the Record Date for:
(i) each person known by us to beneficially own more than 5% of our voting securities, (ii) each named executive officer, (iii) each of
our directors and nominees, and (iv) all of our executive officers and directors as a group:
Name of Beneficial Owner | |
Position of Beneficial Owner | |
Title of Class | |
Amount and Nature of Beneficial Ownership(1) | | |
Percent of Class(2) | |
Andrew Stranberg(3) | |
Chairman,
Secretary and
Treasurer | |
Common Stock | |
| 5,226,333 | | |
| 27.2 | % |
Andrew Shape(4) | |
President, Chief
Executive Officer
and Director | |
Common Stock | |
| 3,502,699 | | |
| 18.3 | % |
Randolph Birney(5) | |
Executive Vice
President | |
Common Stock | |
| 820,635 | | |
| 4.3 | % |
Travis McCourt(6) | |
Director | |
Common Stock | |
| 7,892 | | |
| * | |
Alan Chippindale(6) | |
Director | |
Common Stock | |
| 7,892 | | |
| * | |
Alejandro Tani(6) | |
Director | |
Common Stock | |
| 7,892 | | |
| * | |
Ashley Marshall(6) | |
Director | |
Common Stock | |
| 7,892 | | |
| * | |
All executive officers and directors (12 persons) (7) | |
| |
Common Stock | |
| 9,824,485 | | |
| 50.5 | % |
Christopher Rollins(8) | |
Former Chief
Financial Officer | |
Common Stock | |
| 5,533 | | |
| * | |
* |
Denotes less than 1% of the outstanding shares of common stock. |
| (1) | Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting
or investment power with respect to securities. Under those rules, beneficial ownership includes any shares as to which the individual
has sole or shared voting power or investment power, and also any shares which the individual has the right to acquire within 60 days
of the Record Date, through the exercise or conversion of any stock option, convertible security, warrant or other right. Except as set
forth below, each of the beneficial owners listed above has direct ownership of and sole voting power and investment power with respect
to the shares of our common stock. |
| (2) | A total of 19,073,975 shares of common stock are considered to be outstanding pursuant to Rule 13d-3(d)(1)
under the Exchange Act as of the date of this prospectus. For each beneficial owner above, any options exercisable within 60 days of the
Record Date have been included in the denominator. |
| (3) | Mr. Stranberg was granted an option to purchase 400,000 shares of common stock on November 12, 2021. The
option has an exercise price of $4.15 per share and a term of ten years. The option is subject to vesting over a four (4) year period
with twenty-five percent (25%) of the option vesting on the first anniversary of the date of grant and the balance of the option (seventy-five
percent (75%)) vesting monthly over the following three (3) years after the first anniversary of the date of grant at a rate of 1/36 per
month. The option may be exercised to purchase 108,333 shares within 60 days of the Record Date and therefore that portion of the option
is considered to be beneficially owned. |
| (4) | On May 24, 2021, Mr. Stranberg transferred 3,400,000 shares of common stock to Mr. Shape pursuant to a
stock purchase agreement at a price per share that is equal to $0.1985 per share, being the price of our shares as of December 31, 2020
determined through an independent valuation of the Company dated April 27, 2021, in accordance with Section 409A of the Internal Revenue
Code of 1986, as amended. Mr. Shape paid the purchase price for the shares to Mr. Stranberg through the delivery to Mr. Stranberg
of a promissory note. The promissory note provides for 2% simple annual interest, and principal and accrued interest must be repaid by
the note’s third anniversary. The note grants a security interest to Mr. Stranberg in the transferred stock as to the repayment
obligations under the note. The stock is subject to a lockup provision providing that one-half of the purchased shares may not be sold
until the second anniversary of the date of the stock purchase agreement; provided, however, that such restriction on transfer will expire
at a rate of 1/48th of the shares subject to the restriction per month over such two-year period. |
Mr. Shape was granted an option to
purchase 323,810 shares of common stock on November 12, 2021. The option has an exercise price of $4.15 per share and a term of ten
years. The option is subject to vesting over a four (4) year period with twenty-five percent (25%) of the option vesting on the first
anniversary of the date of grant and the balance of the option (seventy-five percent (75%)) vesting monthly over the following three (3)
years after the first anniversary of the date of grant at a rate of 1/36 per month. The option may be exercised to purchase 87,699 shares
within 60 days of the Record Date and therefore that portion of the option is considered to be beneficially owned.
| (5) | On May 24, 2021, Mr. Stranberg transferred 800,000 shares of common stock to Mr. Birney pursuant to a
stock purchase agreement at a price per share that is equal to $0.1985 per share, being the price of our shares as of December 31, 2020
determined through an independent valuation of the Company dated April 27, 2021, in accordance with Section 409A of the Internal Revenue
Code of 1986, as amended. Mr. Birney paid the purchase price for the shares to Mr. Stranberg through the delivery to Mr. Stranberg
of a promissory note. The promissory note provides for 2% simple annual interest, and principal and accrued interest must be repaid by
the note’s third anniversary. The stock is subject to a lockup provision providing that one-half of the purchased shares may not
be sold until the second anniversary of the date of the stock purchase agreement; provided, however, that such restriction on transfer
will expire at a rate of 1/48th of the shares subject to the restriction per month over such two-year period. |
Mr. Birney was granted an option to
purchase 76,190 shares of common stock on November 12, 2021. The option has an exercise price of $4.15 per share and a term of ten
years. The option is subject to vesting over a four (4) year period with twenty-five percent (25%) of the option vesting on the first
anniversary of the date of grant and the balance of the option (seventy-five percent (75%)) vesting monthly over the following three (3)
years after the first anniversary of the date of grant at a rate of 1/36 per month. The option may be exercised to purchase 20,635 shares
within 60 days of the Record Date and therefore that portion of the option is considered to be beneficially owned.
| (6) | Each of Mr. McCourt, Mr. Chippindale, Mr. Tani, and Ms. Marshall were granted an option to purchase 5,000
shares of common stock and 2,892 restricted shares of common stock on November 12, 2021. The restricted shares vest in four (4) equal
quarterly installments commencing in the quarter ending March 31, 2022. The option vests in twelve (12) equal monthly installments over
the first year following the date of grant, subject to the recipient continuing in service on the board of directors of the Company through
each such vesting date. All of the shares of common stock which may be purchased by exercise of the stock option of each recipient will
not be exercisable within 60 days of the Record Date and therefore are not considered to be beneficially owned at that time. |
| (7) | This amount does not include any amount of shares of common stock beneficially owned by Christopher Rollins,
the former Chief Financial Officer of the Company, who is included in this table as a named executive officer only. In addition to the
shares of common stock beneficially owned by the other individuals listed in this table, this amount includes (1) 62,500 shares of restricted
stock and an option which may be exercised to purchase 31,250 shares of common stock within 60 days of the date of the Record Date held
by our Chief of Staff, Stephen Paradiso; (2) 5,000 shares of restricted stock and an option which may be exercised to purchase 5,000 shares
of common stock held by our Chief Operating Officer, Sheila Johnshoy; (3) 15,000 shares of common stock held directly by John Audibert,
our Vice President of Growth and Strategic Initiatives, 40,000 shares of common stock held by Josselin Capital Advisors, Inc., over which
Mr. Audibert has voting and investment control, an option which may be exercised to purchase 20,000 shares of common stock held by Josselin
Capital Advisors, Inc., and an option which may be exercised to purchase 17,667 shares of common stock within 60 days of the Record Date
held directly by Mr. Audibert; (4) an option which may be exercised to purchase 20,000 shares of common stock within 60 days of the date
of the Record Date held by our Chief Technology Officer, Jason Nolley; and (5) 7,500 shares of restricted stock and an option which may
be exercised to purchase 19,333 shares of common stock within 60 days of the date of the Record Date held by our Interim Chief Financial
Officer, David Browner. Option exercise rights that are subject to vesting conditions that will not be met within 60 days of the Record
Date or equity grants subject to performance-based goals that are not within the holder’s control and have not yet been certified
as being met by the Company’s Compensation Committee are not included in this total. |
| (8) | Mr. Rollins was granted an option to purchase 81,000 shares of common stock and 10,000 restricted shares
of common stock on November 12, 2021. The option has an exercise price of $4.15 per share and a term of ten years. Both the restricted
stock and the stock option vest over a two-year period with 33% of the restricted stock and option vesting immediately upon issuance and
the balance of the restricted stock and option (67%) vesting monthly over the following two years at a rate of 1/24 per month. Mr. Rollins
resigned from his position as Chief Financial Officer of the Company effective July 29, 2022. Upon Mr. Rollins’ resignation, the
unvested portion of Mr. Rollins’ restricted stock was forfeited, and the unvested portion of Mr. Rollins’ stock option became
non-exercisable. The vested portion of Mr. Rollins’ option became non-exercisable as of October 28, 2022. |
Changes in Control
There
are no arrangements known to us, including any pledge by any person of our securities, the operation of which may at a subsequent date
result in a change in control of the Company.
BOARD
OF DIRECTORS AND CORPORATE GOVERNANCE
During
the year ended December 31, 2021:
| ● | our
Board held one meeting; |
| ● | the
Audit Committee held one meeting; |
| ● | the Compensation Committee did not hold meetings; |
| ● | the Nominating and Corporate Governance Committee did not hold meetings; and |
| ● | the Disclosure Controls and Procedures Committee did not hold meetings . |
During the year ended December
31, 2021, each member of the Board attended all Board meetings and all members of committees attended all committee meetings held during
the period of such member’s service.
We do not have a policy requiring
Board members to attend the annual meeting of our stockholders. The Company did not hold an annual meeting of stockholders during 2021,
because the Company was incorporated during that year.
Our Independent Directors
The
rules of Nasdaq generally require that a majority of a listed company’s board
of directors consist of independent directors. Prior to November 2021, our Board consisted of two (2) directors: Andrew Shape and Andrew
Stranberg, neither of whom are independent within the meaning of Nasdaq’s rules. Effective November 8, 2021, Ashley Marshall, Travis
McCourt, Alan Chippindale and Alejandro Tani were appointed to our Board pursuant to independent director agreements to serve as independent
directors. For a discussion of the terms of our independent director agreements, see “Director Compensation” below.
As a result of these board
changes, our board of directors consists of six (6) directors, four (4) of whom are independent within the meaning of Nasdaq’s rules,
except that Mr. Chippindale has not been determined to meet certain additional independence requirements applicable to our Audit Committee
members due to certain fee provisions under separate agreements with Mr. Chippindale. Please see the section entitled “Certain Relationships
and Related Transactions – Transactions with Non-Employee Director” in this proxy statement.
Governance Structure
We
chose to appoint a separate Executive Chairman of the Board who is not our Chief Executive Officer. Our Board believes that an independent
Executive Chairman can act as a balance to our President and Chief Executive Officer, who also serves as a non-independent director; strengthens
the independence of our Board; and allows us to have an Executive Chairman focused on the leadership of the Board while allowing our President
and Chief Executive Officer to focus more of his time and energy on managing our operations. However, our Bylaws and governance principles
provide the Board with the flexibility to combine or separate the positions of Executive Chairman, President and Chief Executive Officer.
Andrew Stranberg currently serves as the Executive Chairman of our Board. We do not currently intend to combine these positions; however,
a change in this leadership structure could be made if the Board determines it is in the best long-term interests of stockholders. For
example, if the two roles were to be combined, we believe that the independence of the majority of our directors, and the three fully
independent Board committees, would provide effective oversight of our management and the Company.
The Board’s
Role in Risk Oversight
The
Board and its committees oversee risk management so that the assets of our company are properly safeguarded, that the appropriate financial
and other controls are maintained, and that our business is conducted wisely and in compliance with applicable laws and regulations and
proper governance. Included in these responsibilities is the Board’s oversight of the various risks facing our company. In this
regard, our Board seeks to understand and oversee critical business risks. Our Board does not view risk in isolation. Risks are considered
in virtually every business decision and as part of our business strategy. Our Board recognizes that it is neither possible nor prudent
to eliminate all risk. Indeed, purposeful and appropriate risk-taking is essential for our company to be competitive on a global basis
and to achieve its objectives.
While
the Board oversees risk management, Company management is charged with managing risk. Management communicates routinely with the Board
and individual directors on the significant risks identified and how they are being managed. Directors are free to, and indeed often do,
communicate directly with senior management.
Our
Board administers its risk oversight function as a whole by making risk oversight a matter of collective consideration. Much of this work
has been delegated to committees, which will meet regularly and report back to the full Board. The Audit Committee oversees risks related
to our financial statements, the financial reporting process, accounting and legal matters. The Compensation Committee evaluates the risks
and rewards associated with our compensation philosophy and programs. The Nominating and Corporate Governance Committee evaluates risk
associated with management decisions and strategic direction. The Disclosure Controls and Procedures Committee assists as needed in assessing
risks relevant to achieving the goal of accurate and timely disclosure, forming a basis for determining how the risks should be managed.
Board Committees
Our
Board has established an Audit Committee, a Compensation Committee, a Nominating and Corporate Governance Committee, and a Disclosure
Controls and Procedures Committee. All committees operate under a written charter adopted by our Board, each of which is available on
our Internet website at https://ir.stran.com.
In addition, our Board may,
from time to time, designate one or more additional committees, which shall have the duties and powers granted to it by our Board.
Audit Committee
The
Audit Committee is responsible for, among other things: (i) the integrity of the Company’s financial statements and financial reporting
process and the Company’s systems of internal accounting and financial controls, (ii) the performance of the internal and external
audit services function, (iii) the annual independent audit of the Company’s financial statements, the engagement of the independent
auditors and the evaluation of the independent auditors’ qualifications, independence and performance, (iv) the compliance by the
Company with legal and regulatory requirements, including, with the assistance of the Company’s Disclosure Controls and Procedures
Committee upon the Audit Committee’s request, the Company’s disclosure controls and procedures, (v) the evaluation of enterprise
risk issues, and (vi) the preparation of the Audit Committee report that is required pursuant to the rules of the SEC, and (vii) the
fulfillment of the other responsibilities set out in its charter.
The
Audit Committee’s members are Travis McCourt, Alejandro Tani, and Ashley Marshall, with Mr. McCourt serving as the chairman.
We believe that each of the Audit Committee’s members satisfies the “independence” requirements of Rule 10A-3 under
the Exchange Act and Nasdaq’s rules. Our Board has determined that each of Mr. McCourt and Mr. Tani qualifies as an “audit
committee financial expert” within the meaning of Item 407(d)(5) of SEC Regulation S-K.
Compensation Committee
The Compensation Committee
is responsible for, among other things: (i) reviewing and approving the remuneration of our executive officers; (ii) making recommendations
to the board regarding the compensation of our independent directors; (iii) making recommendations to the board regarding equity-based
and incentive compensation plans, policies and programs; and (iv) reviewing and assessing annually the compensation committee’s
performance and the adequacy of its charter.
The
Compensation Committee’s members are Alan Chippindale, Travis McCourt and Alejandro Tani, with Mr. Chippindale serving as
the chairman. We believe that each of the Compensation Committee’s members satisfies the “independence” requirements
of Rule 10C-1 under the Exchange Act and Nasdaq’s rules.
Nominating and Corporate Governance Committee
The Nominating and Corporate
Governance Committee is responsible for, among other things: (i) identifying and evaluating individuals qualified to become members of
the Board by reviewing nominees for election to the Board submitted by stockholders and recommending to the Board director nominees for
each annual meeting of stockholders and for election to fill any vacancies on the Board; (ii) advising the Board with respect to Board
organization, desired qualifications of Board members, the membership, function, operation, structure and composition of committees (including
any committee authority to delegate to subcommittees), and self-evaluation and policies; (iii) advising on matters relating to corporate
governance and monitoring developments in the law and practice of corporate governance; (iv) overseeing compliance with our Code of Ethics
and Business Conduct; and (v) approving any related-party transactions.
The Nominating and Corporate
Governance Committee’s methods for identifying candidates for election to our Board (other than those proposed by our stockholders,
as discussed below) will include the solicitation of ideas for possible candidates from a number of sources, including members of our
Board, our executives, individuals personally known to the members of our Board, and other research. The Nominating and Corporate Governance
Committee may also, from time to time, retain one or more third-party search firms to identify suitable candidates.
In making director recommendations,
the Nominating and Corporate Governance Committee may consider some or all of the following factors: (i) the candidate’s judgment,
skill, experience with other organizations of comparable purpose, complexity and size, and subject to similar legal restrictions and oversight;
(ii) the interplay of the candidate’s experience with the experience of other Board members; (iii) the extent to which the candidate
would be a desirable addition to the Board and any committee thereof; (iv) whether or not the person has any relationships that might
impair his or her independence; and (v) the candidate’s ability to contribute to the effective management of our company, taking
into account the needs of our company and such factors as the individual’s experience, perspective, skills and knowledge of the
industry in which we operate.
The
Nominating and Corporate Governance Committee’s members are Alejandro Tani, Ashley Marshall, and Alan Chippindale, with Mr.
Tani serving as the chairman. The Board has determined that the Nominating and Corporate Governance Committee is comprised solely of independent
directors, as defined by Nasdaq.
Disclosure Controls and
Procedures Committee
The Disclosure Controls and
Procedures Committee is responsible for, among other things: (i) the identification and disclosure of material information about the Company;
(ii) the accuracy, completeness and timeliness of the Company’s financial reports under the Exchange Act and the listing rules of
Nasdaq; (iii) the review and, as necessary, help with the revision of the Company’s controls and other procedures; (iv) assistance
with documenting, and monitoring the integrity and evaluating the effectiveness of, the Company’s disclosure controls and procedures;
and (v) review of the Company’s reports filed with the SEC, press releases containing financial information or other information
material to the Company’s security holders.
The
Disclosure Controls and Procedures Committee’s members are comprised of the Company’s officers and directors. David Browner,
the Company’s Interim Chief Financial Officer, acts as the chairman of the Disclosure Controls and Procedures Committee.
The Company’s officers and directors may assume any or all of the responsibilities of the Disclosure Controls and Procedures Committee
at any time.
Director Nominations
Criteria for Board Membership
The
Nominating and Corporate Governance Committee is responsible for periodically evaluating the desirability of and recommending to the Board
any changes in the size and composition of the Board or the qualifications for Board membership. In making its recommendations to the
Board, the Nominating and Corporate Governance Committee considers, evaluates and selects nominated directors nominated either by the
Board or the stockholders, in accordance the following general and specific considerations:
| ● | General Considerations. The Nominating and Corporate Governance Committee must ensure that the
Board is comprised of at least enough independent directors to comply with the requirements of Nasdaq as well as applicable rules and
regulations of the SEC. In making its recommendations, the Committee may consider some or all of the following factors: 1. The candidate’s
judgment, skill, experience with other organizations of comparable purpose, complexity and size, and subject to similar legal restrictions
and oversight; 2. The interplay of the candidate’s experience with the experience of other Board members; 3. The extent to which
the candidate would be a desirable addition to the Board and any committee thereof; 4. Whether or not the person has any relationships
that might impair his or her independence, including, but not limited to, business, financial or family relationships with the Company’s
management; and 5. The candidate’s ability to contribute to the effective management of the Company, taking into account the needs
of the Company and such factors as the individual’s experience, perspective, skills and knowledge of the industries in which the
Company’s subsidiaries operate. |
| ● | Specific Considerations. In addition to the foregoing general considerations, the Nominating and
Corporate Governance Committee will develop, reevaluate at least annually and modify as appropriate a set of specific considerations outlining
the skills, experiences (whether in business or in other areas such as public service, academia or scientific communities), particular
areas of expertise, specific backgrounds, and other characteristics for which there is a specific need on the Board and which would enhance
the effectiveness of the Board and its committees given its current composition. |
The Nominating and Corporate
Governance Committee will evaluate each new director candidate and each incumbent director before recommending that the Board nominate
or re-nominate such individual for election or reelection (or that the Board elect such individual on an interim basis) as a director
based upon the extent to which such individual satisfies the general criteria above and will contribute significantly to satisfying the
overall mix of specific criteria identified above. Each annual decision to re-nominate an incumbent director must be based upon a careful
consideration of such individual’s contributions, including the value of his or her experience as a director of the Company, the
availability of new director candidates who may offer unique contributions and the Company’s changing needs.
The Nominating and Corporate
Governance Committee will seek to identify potential director candidates who will strengthen the Board and will contribute to the overall
mix of considerations identified above. This process should include establishing procedures for soliciting and reviewing potential nominees
from directors and stockholders and for notifying those who suggest nominees of the outcome of such review. The Nominating and Corporate
Governance Committee will have sole authority to retain and terminate any third-party search firms to be used to identify director candidates,
including sole authority to approve any such search firm’s fees and other terms of retention.
The Nominating and Corporate
Governance Committee will submit to the Board the candidates for director to be recommended by the Board for election at each annual meeting
of stockholders and to be added to the Board at any other times due to any expansion of the Board, director resignations or retirements
or otherwise. In the event of a vacancy on the Board, following determination by the Board that such vacancy must be filled, the Nominating
and Corporate Governance Committee will identify candidates for director qualified to fill such vacancy that satisfies the general criteria
above.
The Board and the Nominating
and Corporate Governance Committee do not have a specific diversity policy, but consider diversity of race, ethnicity, gender, age, cultural
background and professional experiences in evaluating candidates for Board membership. Diversity is important because a variety of points
of view contribute to a more effective decision-making process.
The
following Board Diversity Matrix presents our Board diversity statistics, as voluntarily self-identified by our directors, in accordance
with Nasdaq Listing Rule 5606.
Board Diversity Matrix (As
of October 31, 2022)
Total Number of Directors: | |
6 | |
| |
| Female | | |
| Male | | |
| Non-Binary | | |
| Did Not Disclose Gender | |
Part I: Gender Identity | |
| | | |
| | | |
| | | |
| | |
Directors | |
| 1 | | |
| 4 | | |
| 0 | | |
| 1 | |
Part II: Demographic Background | |
| | | |
| | | |
| | | |
| | |
African American or Black | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | |
Alaskan Native or Native American | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | |
Asian | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | |
Hispanic or Latinx | |
| 0 | | |
| 1 | | |
| 0 | | |
| 0 | |
Native Hawaiian or Pacific Islander | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | |
White | |
| 1 | | |
| 3 | | |
| 0 | | |
| 0 | |
Two or More Races or Ethnicities | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | |
LGBTQ+ | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | |
Did Not Disclose Demographic Background | |
| 0 | | |
| 0 | | |
| 0 | | |
| 1 | |
Stockholder Recommendations
The Nominating and Corporate
Governance Committee is responsible for the consideration of any written stockholder recommendations for candidates for the Board, which
recommendations should be delivered or mailed, postage prepaid, to:
Nominating and Corporate Governance Committee
Stran & Company, Inc.
2 Heritage Drive, Suite 600
Quincy, MA 02171
CC: Chief Executive Officer
Stockholder
recommendations must include the following information to be considered by our Nominating and Corporate Governance Committee: (a)
all information relating to such recommended candidate as would be required to be disclosed for a director nominee pursuant to Regulation
14A under the Exchange Act (including such person’s written consent to being named in the proxy statement as a nominee and to serving
as a director if elected) and as required for stockholder nominations of director candidates pursuant to the Company’s Bylaws; (b)
the names and addresses of the stockholders making the recommendation and the number of shares of the Company’s common stock which
are owned beneficially and of record by such stockholders; and (c) other appropriate biographical information and a statement as to the
qualification of the nominee. There are no pre-established qualifications, qualities or skills at this time that any particular director
nominee must possess and nominees are not discriminated against on the basis of race, religion, national origin, sexual orientation, disability
or any other basis proscribed by law.
Any recommendations received
from our security holders will be evaluated in the same manner that potential nominees suggested by Board members, management or other
parties are evaluated.
Material Changes to
Director Nomination Procedures
There
have been no material changes to the procedures by which shareholders may recommend nominees to our Board since such procedures were last
disclosed.
Communications with our Board of Directors
Stockholders seeking to communicate
with our Board should submit their written comments to Mr. Andrew Shape, our President, Chief Executive Officer and a member of the Board,
at Stran & Company, Inc., 2 Heritage Drive, Suite 600, Quincy, MA 02171. Mr. Shape will forward such communications to
each member of our Board; provided that, if in the opinion of Mr. Shape it would be inappropriate to send a particular stockholder communication
to a specific director, such communication will only be sent to the remaining directors (subject to the remaining directors concurring
with such opinion).
Code of Business Conduct and Ethics
We have adopted a Code of
Business Conduct and Ethics that applies to all of our directors, officers and employees, including our principal executive officer, principal
financial officer and principal accounting officer. Such Code of Business Conduct and Ethics addresses, among other things, honesty and
ethical conduct, conflicts of interest, compliance with laws, regulations and policies, including disclosure requirements under the federal
securities laws, and reporting of violations of the code.
The full text of the Code
of Business Conduct and Ethics is posted on our website at https://ir.stran.com/. Any waiver of the Code of Business Conduct and Ethics
for directors or executive officers must be approved by our Audit Committee. We will disclose future amendments to our Code of Business
Conduct and Ethics, or waivers from our Code of Business Conduct and Ethics for our principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing similar functions, on our website within four business days following
the date of the amendment or waiver. In addition, we will disclose any waiver from our Code of Business Conduct and Ethics for our other
executive officers and our directors on our website. A copy of our Code of Business Conduct and Ethics will also be provided free of charge
upon request to: Secretary, Stran & Company, Inc., 2 Heritage Drive, Suite 600, Quincy, MA 02171.
Hedging and Pledging Prohibition
Under
our Insider Trading Policy, our directors, officers, and key employees (and each such individual’s family members, other members
of a person’s household and entities controlled or influenced by a person covered by this policy, as described in the policy) are prohibited
from engaging the following transactions at any time: (i) engaging in short sales of our securities; (ii) trading in put options, call
options or other derivative securities on an exchange or in any other organized market; (iii) engaging in hedging or monetization transactions,
including through the use of financial instruments such as prepaid variable forwards, equity swaps, collars and exchange funds; and (iv)
holding our securities in a margin account or otherwise pledging our securities as collateral for loan unless the collateral arrangement
is specifically approved in advance by the administrator of the policy.
Director Compensation
Generally,
our Board believes that the level of director compensation should be based on time spent carrying out Board and committee responsibilities
and be competitive with comparable companies. In addition, the Board believes that a significant portion of director compensation should
align director interests with the long-term interests of stockholders. The Board allows changes in its director compensation practices
based on recommendations and approvals of the Compensation Committee.
Our
Board and Compensation Committee approved the compensation of our non-employee directors, as follows: Under their independent director
agreements, each non-employee director will receive an annual cash fee and an initial award of restricted common stock and a stock option.
We will pay the annual cash compensation fee to each non-employee director in four equal installments no later than the fifth business
day of each calendar quarter commencing in the quarter ending March 31, 2022. We granted the restricted stock and options to the non-employee
directors on November 12, 2021. The cash fee paid to each non-employee director will be $20,000 as to Ms. Marshall, $26,000 as to Mr.
McCourt, $26,000 as to Mr. Chippindale, and $20,000 as to Mr. Tani. Under their agreements, 2,892 shares of restricted common stock were
awarded to each independent director. The restricted stock will vest in four (4) equal quarterly installments commencing in the quarter
ending March 31, 2022. The option that was awarded to each non-employee director may be exercised to purchase 5,000 shares of common stock
at the exercise price $4.15 per share. The option vests and becomes exercisable in twelve (12) equal monthly installments over the first
year following the date of grant, subject to the respective non-employee director continuing in service on our Board through each such
vesting date. The term of each stock option is ten (10) years from the date of grant. We will also reimburse each non-employee director
for pre-approved reasonable business-related expenses incurred in good faith in connection with the performance of the non-employee director’s
duties for us. As also required under the independent director agreements, we have separately entered into a standard indemnification
agreement with each of our non-employee directors, the term of which began upon November 8, 2021.
The directors of the Company
were compensated as such during the fiscal year ended December 31, 2021, as follows:
Name and
Principal
Position |
|
|
Fees
Earned
or Paid
in Cash |
|
|
|
Stock
Awards |
|
|
|
Option
Award |
|
|
|
Non-Equity Incentive Plan
Compensation
Earnings |
|
|
|
Nonqualified Deferred
Compensation
Earnings |
|
|
|
All Other
Compensation |
|
|
|
Total |
|
Andrew Stranberg |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
Andrew Shape |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
Travis McCourt |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
2,062 |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
2,062 |
|
Alan Chippindale |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
2,062 |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
2,062 |
|
Alejandro Tani |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
2,062 |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
2,062 |
|
Ashley Marshall |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
2,062 |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
2,062 |
|
EXECUTIVE OFFICERS OF THE COMPANY
The biographical profiles
on the following pages contain certain information with respect to our executive officers as of the Record Date (October 11, 2022).
Name |
|
Age |
|
Position |
Andrew Stranberg |
|
50 |
|
Executive Chairman, Treasurer, Secretary, and Director |
Andrew Shape |
|
49 |
|
President, Chief Executive Officer and Director |
David Browner |
|
34 |
|
Interim Chief Financial Officer |
Randolph Birney |
|
47 |
|
Executive Vice President |
John Audibert |
|
35 |
|
Vice President of Growth and Strategic Initiatives |
Stephen Paradiso |
|
67 |
|
Chief of Staff |
Jason Nolley |
|
44 |
|
Chief Technology Officer |
Sheila Johnshoy |
|
50 |
|
Chief Operating Officer |
For
information regarding Messrs. Stranberg and Shape, please refer to “Proposal No. 1- Election of Directors,” above.
David
Browner has been our Interim Chief Financial Officer since July 2022. From July 2021
to July 2022, Mr. Browner served as the Company’s Controller. From November 2015 to July 2021, Mr. Browner was the Accounting
Manager for the Company. From July 2012 to November 2015, Mr. Browner was a staff accountant for the Company. Mr. Browner has a Master
of Business Administration in Accounting and a Bachelor of Business Administration from the University of Massachusetts Lowell.
Randolph
Birney has been our Executive Vice President since 2015, and was one of our Sales Executives from 1999 to 2015. His role
is focused on business development and strategic vision. In addition to these responsibilities, he is instrumental in managing the day-to-day
business of multiple large retail and consumer-based program accounts. Mr. Birney holds a BA from the University of New Hampshire.
John
Audibert has been our Vice President of Strategy and Growth Initiatives since March 2020. Mr. Audibert has over 12 years
of investment banking, corporate finance and strategy consulting experience. He has been the President of Josselin Capital Advisors, Inc.,
since October 2019, which provides consulting services to high-growth businesses. He was formerly President of Woodland Way Advisors,
Inc., a consulting firm, from January 2015 through December 2020. Mr. Audibert previously worked in the investment banking group of Sandler
O’Neill + Partners, L.P. where he provided merger and acquisition advisory as well as capital raising services to middle-market
clients. Prior to joining Sandler O’Neill, he was a strategic consultant at Putnam Associates. Mr. Audibert received a bachelor’s
degree with a concentration in finance from the Carroll School of Management at Boston College. Mr. Audibert was an employee of the Company
from March 2020 to May 2021, and since then has continued acting in his current capacity as an independent contractor.
Stephen
Paradiso has been our Chief of Staff since December 2021. From October 2020 to December 2021, Mr. Paradiso acted as a consultant.
From December 2012 until he retired early in October 2020, Mr. Paradiso served as president, and from January 2017 also as chief executive
officer, of promotional products distributor ePromos Promotional Products, LLC, which was listed on ASI’s “Top 40 Distributors
2021”. From January 2008 to November 2012, he was chief operating officer, and from January 2007 to May 2008 was president, at promotional
products distributor Touchstone Merchandise Group, LLC, which was also listed on ASI’s “Top 40 Distributors 2021”. From
January 1988 to June 2001, Mr. Paradiso was president of Cyrk Inc., formerly a Nasdaq-listed company. Mr. Paradiso was listed in Counselor
magazine’s “Power 50” from 2016 through 2019, ranking him one of the most influential people in the promotional products
industry. Mr. Paradiso received a bachelor’s degree in Education from Framingham State University.
Jason
Nolley has been our Chief Technology Officer since November 2021. From September 2021 to November 2021, Mr. Nolley was
Senior Software Engineer at Sweetwater Sound, Inc., one of the largest online retailers of musical instruments and professional audio
equipment in the United States. From October 2018 to September 2021, Mr. Nolley was Technology Solutions Manager of Warsaw, Indiana-based
Wildman Business Group, LLC, and from September 2018 to October 2018 was its Web Marketing Manager. From October 2007 to August 2014,
he was Solutions Advisor of Lake Nolley Group, LLC. From December 2005 to September 2007, he was Technical Sales & Marketing Manager
of Goshen, Indiana-based LCI Shooting Sports. From January 2001 to December 2005, he was Media Developer at South Bend, Indiana-based
Force 5 Media. Mr. Nolley earned a B.A. in Telecommunications with a minor in Japanese from Ball State University in June 2000. Mr. Nolley
was granted Jitterbit Foundations and Jitterbit Core certifications in 2020 by software developer Jitterbit’s Jitterbit University
online training program.
Sheila
Johnshoy has been our Chief Operating Officer since March 2022. From June 2021 to February 2022, Ms. Johnshoy was Vice
President of Sourcing & Merchandising at SwagUp, LLC, a promotional products service organization. From June 2020 to June 2021, Ms.
Johnshoy was the owner and consultant at Sheila Johnshoy Consulting LLC. From May 2018 to June 2020, Ms. Johnshoy was Chief Revenue Officer
at promotional products distributor ePromos Promotional Products, LLC (ePromos), one of ASI’s “Top 40 Distributors 2021”.
From February 2017 to April 2018, Ms. Johnshoy was Vice President, Merchandising of Vericast’s Harland Clarke business. From February
2010 to February 2017, Ms. Johnshoy was Vice President of Marketing at ePromos. Ms. Johnshoy received a Bachelor of Science in Management
and Marketing from St. Cloud State University – Herberger Business School, in 1995. Ms. Johnshoy is a 2009 graduate of the Mini
MBA Program of the University of St. Thomas – Opus School of Business.
EXECUTIVE COMPENSATION
Summary Compensation Table - Years Ended December
31, 2021 and 2020
The following table sets forth
information concerning all cash and non-cash compensation awarded to, earned by or paid to the named persons for services rendered in
all capacities during the noted periods. No other executive officers received total annual salary and bonus compensation in excess
of $100,000.
Name and Principal Position |
|
Year |
| |
Salary
($) |
|
|
Bonus
($) |
|
|
Stock
Awards
($) |
|
|
Option
Awards
($) |
|
|
All Other
Compensation
($) |
|
|
Total
($) |
|
Andrew Shape, |
|
|
2021 |
|
|
|
386,154 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
4,846 |
(1) |
|
|
391,000 |
|
President, Chief Executive Officer and Director |
|
|
2020 |
|
|
|
335,000 |
|
|
|
187,746 |
|
|
|
- |
|
|
|
- |
|
|
|
6,750 |
(1) |
|
|
529,496 |
|
Andrew Stranberg, |
|
|
2021 |
|
|
|
518,964 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
518,964 |
|
Executive Chairman and Director |
|
|
2020 |
|
|
|
300,000 |
|
|
|
250,000 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
550,000 |
|
Randolph Birney, |
|
|
2021 |
|
|
|
289,615 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
9,000 |
(1) |
|
|
298,615 |
|
Executive Vice President |
|
|
2020 |
|
|
|
285,000 |
|
|
|
180,009 |
|
|
|
- |
|
|
|
- |
|
|
|
6,750 |
(1) |
|
|
471,759 |
|
Christopher Rollins, |
|
|
2021 |
|
|
|
211,202 |
|
|
|
32,857 |
|
|
|
14,854 |
|
|
|
144,955 |
|
|
|
3,600 |
(2) |
|
|
407,468 |
|
Former Chief Financial Officer |
|
|
2020 |
|
|
|
189,200 |
|
|
|
22,143 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
211,343 |
|
| (1) | Other compensation consisted of covered automobile expenses. |
| (2) | Other compensation consisted of $2,769 of covered automobile expenses and $831 in cellphone expenses. |
Executive Officer Employment and Consulting Agreements
Under
our employment agreement with our Chief Executive Officer, Andrew Shape, dated July 13, 2021 and effective as of November 8, 2021, we
agreed that, for a three-year term, unless terminated earlier in accordance with its terms, we will pay Mr. Shape an annual salary of
$400,000 and will be eligible to receive an annual cash bonus as determined by the board of directors. Pursuant to the employment
agreement, on November 12, 2021, we awarded Mr. Shape a stock option for the purchase of 323,810 shares of the Company’s common
stock with an exercise price equal to the price per share paid by investors in the Company’s initial public offering, or IPO, or
$4.15 per share. The stock option will vest over a four-year period with 25% of the option vesting on the first anniversary of the date
of grant and the balance of the option (75%) will vest monthly over the following three years after the first anniversary of the date
of grant at a rate of 1/36 per month. The parties acknowledged that Mr. Shape was owed sales commissions for sales generated for the Company
during 2018, 2019 and 2020 in the gross amount of $140,926.69 that were earned and due to Mr. Shape as of a date prior to the date of
the employment agreement and that Mr. Shape did not waive his right to these sales commissions by entering into the agreement. Beginning
on the date of the agreement, and continuing thereafter, interest at the rate of 2% per annum accrues on unpaid earned sales commissions.
Beginning one month after the effective date of the agreement, the Company will pay Mr. Shape the gross amount of $10,000 per month towards
Mr. Shape’s unpaid earned sales commissions, less deductions applicable to wages, or such lesser amount as the Company can afford,
when the Company has “available cash,” defined as sufficient cash to ensure that the Company is not at material risk of default
on any material financial obligation due in the next three months. Whether the Company has “available cash” shall be determined
by the Board in its reasonable discretion, acting in good faith, taking into account any factors it deems germane, including without limitation
the maintenance of reserves for future liabilities, whether certain or uncertain, and the preservation of funds for capital expenditures.
At the earlier of the termination of Mr. Shape’s employment for any reason, regardless of whether termination is for cause, and
thirty (30) months after the date of the employment agreement, Mr. Shape shall have the right to demand immediate payment of all unpaid
earned sales commissions and interest in cash. Mr. Shape will be provided with standard executive benefits. The Company will also provide
standard indemnification and directors’ and officers’ insurance. The Company may terminate Mr. Shape’s employment by
giving at least 30 days written notice. If we terminate Mr. Shape without cause or he resigns for good reason as provided under the agreement,
we must pay at least 24 months’ severance, reimbursement of Mr. Shape for the first 18 months of the premiums associated with Mr.
Shape’s continuation of health insurance for him and his family pursuant to COBRA, and immediate vesting of any outstanding unvested
equity granted to Mr. Shape during his employment and immediate lifting of all lockups and restrictions on sales of such equity, or exercise
of stock option. If we do not renew his employment agreement after the initial three-year term, then we must pay six months’ severance
and reimburse the first six months of the premiums associated with Mr. Shape’s continuation of health insurance for him and his
family pursuant to COBRA. Mr. Shape is also subject to standard confidentiality and noncompetition provisions.
Under our employment agreement
with our Executive Chairman, Andrew Stranberg, dated July 13, 2021 and effective as of November 8, 2021, we agreed that, for a three-year
term, unless terminated earlier in accordance with its terms, we will pay Mr. Stranberg an annual salary of $500,000 and will be eligible
to receive an annual cash bonus as determined by the board of directors. Pursuant to the employment agreement, on November 12, 2021, we
awarded Mr. Stranberg a stock option for the purchase of 400,000 shares of the Company’s common stock with an exercise price equal
to the price per share paid by investors in the IPO, or $4.15 per share. The stock option will vest over a four-year period with 25% of
the option vesting on the first anniversary of the date of grant and the balance of the option (75%) will vest monthly over the following
three years after the first anniversary of the date of grant at a rate of 1/36 per month. Mr. Stranberg will be provided with standard
executive benefits. The Company will also provide standard indemnification and directors’ and officers’ insurance. The Company
may terminate Mr. Stranberg’s employment by giving at least 30 days written notice. If we terminate Mr. Stranberg without cause
or he resigns for good reason as provided under the agreement, we must pay at least 24 months’ severance, reimbursement of Mr. Stranberg
for the first 18 months of the premiums associated with Mr. Stranberg’s continuation of health insurance for him and his family
pursuant to COBRA, and immediate vesting of any outstanding unvested equity granted to Mr. Stranberg during his employment and immediate
lifting of all lockups and restrictions on sales of such equity, or exercise of stock options. If we do not renew his employment agreement
after the initial three-year term, then we must pay six months’ severance and reimburse the first six months of the premiums associated
with Mr. Stranberg’s continuation of health insurance for him and his family pursuant to COBRA. Mr. Stranberg is also subject to
standard confidentiality and noncompetition provisions.
Under our employment agreement
with our Executive Vice President, Randolph Birney, dated July 13, 2021 and effective as of November 8, 2021, we agreed that, for a three-year
term, unless terminated earlier in accordance with its terms, we will pay Mr. Birney an annual salary of $300,000 and an annual cash bonus
as determined by the board of directors. Pursuant to the employment agreement, on November 12, 2021, we awarded Mr. Birney a stock option
for the purchase of 76,190 shares of the Company’s common stock with an exercise price equal to the price per share paid by investors
in the IPO, or $4.15 per share. The stock option will vest over a four-year period with 25% of the option vesting on the first anniversary
of the date of grant and the balance of the option (75%) will vest monthly over the following three years after the first anniversary
of the date of grant at a rate of 1/36 per month. The parties acknowledged that Mr. Birney was owed sales commissions for sales generated
for the Company during 2018, 2019 and 2020 in the gross amount of $197,109.95 that were earned and due to Mr. Birney as of a date prior
to the date of the employment agreement and that Mr. Birney did not waive his right to these sales commissions by entering into the agreement.
Beginning on the date of the agreement, and continuing thereafter, interest at the rate of 2% per annum accrues on unpaid earned sales
commissions. Beginning one month after the effective date of the agreement, the Company will pay Mr. Birney the gross amount of $10,000
per month for unpaid earned sales commissions, less deductions applicable to wages, or such lesser amount as the Company can afford, when
the Company has “available cash,” defined as sufficient cash to ensure that the Company is not at material risk of default
on any material financial obligation due in the next three months. Whether the Company has “available cash” shall be determined
by the Board in its reasonable discretion, acting in good faith, taking into account any factors it deems germane, including without limitation
the maintenance of reserves for future liabilities, whether certain or uncertain, and the preservation of funds for capital expenditures.
At the earlier of the termination of Mr. Birney’s employment for any reason, regardless of whether termination is for cause, and
thirty (30) months after the date of the employment agreement, he shall have the right to demand immediate payment of all unpaid earned
sales commissions and interest in cash. Mr. Birney will be provided with standard executive benefits. The Company will also provide standard
indemnification and directors’ and officers’ insurance. The Company may terminate Mr. Birney’s employment by giving
at least 30 days written notice. If we terminate Mr. Birney without cause or he resigns for good reason as provided under the agreement,
we must pay at least 24 months’ severance, reimbursement of Mr. Birney for the first 18 months of the premiums associated with Mr.
Birney’s continuation of health insurance for him and his family pursuant to COBRA, and immediate vesting of any outstanding unvested
equity granted to Mr. Birney during his employment and immediate lifting of all lockups and restrictions on sales of such equity, or exercise
of stock options. If we do not renew his employment agreement after the initial three-year term, then we must pay six months’ severance
and reimburse the first six months of the premiums associated with Mr. Birney’s continuation of health insurance for him and his
family pursuant to COBRA. Mr. Birney is also subject to standard confidentiality and noncompetition provisions.
Under
our employment agreement with Christopher Rollins, our former Chief Financial Officer, dated September 7, 2021 and effective as of November
8, 2021, we agreed that, for a two-year term, unless terminated earlier in accordance with its terms, Mr. Rollins would serve as our Chief
Financial Officer. We agreed to pay Mr. Rollins an annual salary of $250,000. For each fiscal year completed during this term, Mr. Rollins
was eligible to receive a cash bonus determined by the achievement of specified Company performance metrics. Prior to each fiscal year,
a Company net sales target would be set for the following fiscal year. Mr. Rollins would receive a bonus equal to: (i) 20% of salary if
75% of the net sales target is achieved; (ii) 25% of salary if 100% of the net sales target is achieved; (iii) 50% of salary if 125% of
the net sales target is achieved; or (iv) 80% of salary if 150% of the net sales target is achieved. Actual net sales for the fiscal year
would be determined by the Company’s audited financial statements and according to Generally Accepted Accounting Principles. If
actual net sales were between two of the bonus thresholds, then Mr. Rollins would receive a pro rata performance basis. Mr. Rollins was
also eligible for additional bonus amounts as determined by the board of directors. In addition, pursuant to the employment agreement,
on November 12, 2021, we awarded Mr. Rollins a stock option for the purchase of 81,000 shares of the Company’s common stock with
an exercise price equal to the price per share paid by investors in the IPO, or $4.15 per share. Pursuant to the employment agreement,
we also entered into a restricted stock award agreement with Mr. Rollins on November 12, 2021 granting him 10,000 restricted shares of
common stock. Both the restricted stock and the stock option vested in accordance with the following vesting schedule: The option
vested over a two-year period with 33% of the option vesting immediately upon issuance and the balance of the option (67%) vesting monthly
over the following two years at a rate of 1/24 per month. Mr. Rollins was provided with standard executive benefits. The Company also
provided standard indemnification and directors’ and officers’ insurance. Mr. Rollins’s employment was terminable by
the Company upon 30 days’ written notice. If we had terminated Mr. Rollins without cause or he resigns for good reason as provided
under the agreement, we would have been required to pay the lesser of the number of months’ severance remaining under the term of
the agreement, and six months, provided that Mr. Rollins receive at least three months’ severance; reimbursement of Mr. Rollins
for the first 18 months of the premiums associated with Mr. Rollins’s continuation of health insurance for him and his family pursuant
to COBRA; and immediate vesting of any outstanding unvested equity granted to Mr. Rollins during his employment and immediate lifting
of all lockups and restrictions on sales of such equity, or exercise of stock options. If we did not renew Mr. Rollins’s employment
agreement after the initial two-year term, then we would have needed to pay six months’ severance and reimburse the first six months
of the premiums associated with Mr. Rollins’s continuation of health insurance for him and his family pursuant to COBRA. Mr. Rollins
resigned from his position as Chief Financial Officer effective July 29, 2022. As a result, the Company had no further compensation obligations
to Mr. Rollins except for any amounts previously earned and not yet paid as of his resignation date. The unvested portion of Mr. Rollins’
restricted stock was forfeited upon resignation, and the unvested portion of Mr. Rollins’ stock option became non-exercisable.
The vested portion of Mr. Rollins’ option became non-exercisable as of October 28, 2022. Mr. Rollins’ employment agreement
contains standard confidentiality and noncompetition provisions which apply through the 12-month period after Mr. Rollins’ resignation.
Under our consulting agreement
with John Audibert, our Vice President of Strategy and Growth Initiatives, and his wholly-owned company, Josselin Capital Advisors, Inc.,
or the Consultant, dated December 2, 2021, we agreed that, for a 27-month term, unless terminated earlier in accordance with its terms,
we will receive the services of the Consultant and pay or grant the Consultant the compensation described below, and Mr. Audibert will
continue to serve as our Vice President of Strategy and Growth Initiatives. We agreed to pay the Consultant a signing fee of $30,000,
an annual fee of $100,000 and a monthly automobile bonus of $750. We agreed to grant the Consultant base restricted stock bonuses as follows:
(i) 20,000 restricted shares of common stock, granted as of the agreement date, which vests on the three-month anniversary of the date
of grant; (ii) 20,000 additional fully-vested shares of common stock to be granted on the six-month anniversary of the agreement date;
and (iii) 20,000 additional fully-vested shares of Common Stock to be granted on the twelve-month anniversary of the agreement date. We
also agreed to performance-based equity grants to the Consultant consisting of (i) the grant of an option which may be exercised to purchase
65,000 shares of common stock at the exercise price per share of $3.90 which will vest based on the attainment of the option’s performance-based
criteria, and fully-vested restricted stock to be granted upon attainment of the same performance-based criteria, as follows: (i) 10,000
fully-vested restricted shares will be granted and the stock option will vest as to 10,000 shares of common stock if our sales exceed
$21,000,000 combined for any two consecutive quarters or if our market capitalization exceeds $65,000,000 for twenty-five (25) out of
thirty (30) consecutive trading days anytime within the agreement term; (ii) 10,000 additional fully-vested restricted shares will be
granted and the stock option will vest as to 10,000 additional shares of common stock if our sales exceed $25,000,000 combined for any
two consecutive quarters or if our market capitalization exceeds $75,000,000 for twenty-five (25) out of thirty (30) consecutive trading
days anytime within the term; (iii) 15,000 additional fully-vested restricted shares will be granted and the stock option shall vest as
to 20,000 additional shares if our sales exceed $37,500,000 combined for any two consecutive quarters or if our market capitalization
exceeds $90,000,000 for twenty-five (25) out of thirty (30) consecutive trading days anytime within the agreement term; and (iv) 25,000
additional fully-vested restricted shares will be granted and the stock option will vest as to 25,000 additional shares if our sales exceed
$45,000,000 combined for any two consecutive quarters or if our market capitalization exceeds $180,000,000 for twenty-five (25) out of
thirty (30) consecutive trading days anytime within the term. “Sales” will be determined by our audited or reviewed financial
statements and according to Generally Accepted Accounting Principles. Our “market capitalization” will be the closing stock
price of our common stock as reported by The NASDAQ Stock Market LLC multiplied by the total shares of common stock outstanding as of
4:00 PM E.T. on the date that such closing stock price was determined as reported by our transfer agent. All such grants will be subject
to standard forms of stock option or restricted stock award agreements and the terms and conditions of our Amended and Restated 2021 Equity
Incentive Plan. They will also be subject to the lock-up provisions of the Lock-Up Agreement between Mr. Audibert and EF Hutton, division
of Benchmark Investments, LLC, or the representative, dated November 8, 2021, which generally provides that any shares of our common stock
held at any time by Mr. Audibert during the 180 days following our initial public offering may not be transferred without the consent
of the representative. Upon the occurrence of a change in control during the consulting agreement’s term, whether or not the Consultant’s
engagement is terminated, or upon Consultant’s termination without cause, all restricted stock, stock option, stock appreciation
right or similar awards granted to or pending grant to and held by the Consultant will immediately vest and will no longer be subject
to forfeiture, unless expressly provided otherwise in the governing documents for such awards. For each fiscal year completed during this
term, the Consultant will also be eligible to receive additional bonuses as determined by the board of directors. Both we and the Consultant
may terminate the consulting agreement by giving at least 30 days’ written notice. If we or the Consultant terminate the consulting
agreement without cause as provided under the agreement, and the Consultant and Mr. Audibert then deliver their signatures to the general
release and waiver form annexed to the consulting agreement, we must pay a $25,000 fee. The Consultant and Mr. Audibert are also subject
to certain independent contractor, non-solicitation, confidentiality and non-interference provisions under the consulting agreement and
the Consultant’s stock option agreement and restricted stock award agreement.
Under our employment letter
agreement with Ms. Johnshoy, our Chief Operating Officer, Ms. Johnshoy will receive an annual base salary of $250,000 and potential salary
and annual bonus increases in future years based on the successful achievement of personal and business-related goals. Ms. Johnshoy is
eligible to receive annual performance cash bonuses with a target bonus percentage ranging from 25% to 100% of base salary based on the
occurrence of specified business revenue amounts or the discretionary approval of our Chief Executive Officer, subject in each case to
final approval by the Compensation Committee. Pursuant to the employment letter agreement, we agreed to grant Ms. Johnshoy a signing bonus
of 5,000 restricted shares and an option to purchase 5,000 shares of our common stock, which will be subject to a six-month lockup provision.
In addition, Ms. Johnshoy is eligible to receive up to 35,000 additional shares of common stock and an option to purchase up to an aggregate
of 35,000 additional shares of common stock upon the occurrence of specified business revenue amounts or at the discretionary approval
of our Chief Executive Officer, subject in each case to final approval by the Compensation Committee. Consistent with such obligations,
the Compensation Committee approved the grant of an option to purchase a total of 40,000 shares of common stock to Ms. Johnshoy at an
exercise price per share of $1.60, which was the closing price of our common stock on March 11, 2022, the date that the employment letter
agreement was countersigned by Ms. Johnshoy, and 5,000 shares of restricted common stock, with the transfer restrictions and performance-based
vesting terms described above. Additionally, under the employment letter agreement, if specified trailing twelve-month revenues occur
within 3.5 years of Ms. Johnshoy’s start of employment, she will earn an additional bonus of 100,000 shares of common stock. After
the first year of employment, all bonus compensation terms will be subject to review. In addition, Ms. Johnshoy is entitled to severance
benefits equal to four months’ salary if terminated without Cause (as defined in the employment letter agreement) during the first
year of employment and four months’ salary if terminated during the second year of employment. Ms. Johnshoy will be eligible to
receive certain health care, dental, life insurance, disability, and retirement benefits after three months’ employment. Ms. Johnshoy
will receive unlimited vacation days encompassing vacation, personal and sick days, subject to two weeks’ notice and approval whenever
possible. Under the employment letter agreement, Ms. Johnshoy is required to sign a standard nondisclosure and non-solicitation agreement
that will not restrict Ms. Johnshoy from working within the promotional industry, but will require Ms. Johnshoy to maintain confidentiality
and refrain from soliciting current clients or employees that were existing or obtained during Ms. Johnshoy’s employment with us.
Under
our employment letter agreement with Stephen Paradiso, our Chief of Staff, Mr. Paradiso will receive an annual base salary of $175,000
and potential salary and annual bonus increases in future years based on the successful achievement of personal and business-related goals.
Mr. Paradiso is eligible to receive annual performance cash bonuses with a target bonus percentage ranging from 25% to 100% of base salary
based on the occurrence of specified business trailing 12-month revenue amounts or the discretionary approval of our Chief Executive Officer,
subject in each case to final approval by the Compensation Committee. Pursuant to the employment letter agreement, we granted Mr. Paradiso
a bonus of 65,000 restricted shares and an option to purchase 65,000 shares of our common stock, which will vest in eight equal installments
over two years and be subject to a six-month lockup provision. In addition, Mr. Paradiso is eligible to receive up to 40,000 shares of
common stock and an option to purchase up to an aggregate of 40,000 additional shares of common stock upon the occurrence of specified
business trailing 12-month revenue amounts. Mr. Paradiso may also receive up to an aggregate of 22,500 shares of common stock and an option
to purchase up to an aggregate of 22,500 additional shares of common stock once certain business benchmarks are achieved. Pursuant to
the employment letter agreement, an option to purchase up to 125,000 shares was granted with vesting terms based on the above time-based
and performance-based vesting requirements, at an exercise price per share of $4.72, which was the closing price of our common stock on
the date that the employment letter agreement was countersigned by Mr. Paradiso. Additionally, if a specified additional business trailing
12-month revenue goal is met within three years of Mr. Paradiso’s start of employment, he will earn an additional bonus of 100,000
shares of common stock. After the second year of employment, all bonus compensation terms will be subject to review. Mr. Paradiso will
be eligible to receive certain health care, dental, life insurance, disability, and retirement benefits after three months’ employment.
Mr. Paradiso will receive 25 days of paid time off annually, including vacation and sick days, subject to two weeks’ notice and
approval whenever possible. Mr. Paradiso is required to sign a standard nondisclosure and noncompete agreement that will not restrict
Mr. Paradiso from working within the print or promotional industry, except for specific direct competitors that are individually
listed in that agreement, but Mr. Paradiso will be required not to solicit any current or existing clients or customers that were obtained
prior to Mr. Paradiso’s employment or obtained during his employment unless given prior approval by us for the period specified
in the noncompete agreement.
Under our employment letter
agreement with Jason Nolley, our Chief Technology Officer, Mr. Nolley will receive an annual base salary of $150,000. As a signing bonus,
Mr. Nolley was awarded an option to purchase 60,000 shares of common stock at $4.36 per share, which the closing price of our common stock
the day before the employment letter agreement was signed. The option vests in three equal amounts at each of the first, second and third
anniversaries of the date of the date of the employment letter agreement. Mr. Nolley is eligible to receive up to $125,000 in the Company’s
common stock upon our achievement of certain amounts of trailing 12-month annual sales amounts. Mr. Nolley is entitled to severance benefits
equal to six months’ salary if terminated without due cause. Mr. Nolley will be eligible to receive certain health care, dental,
life insurance, disability, and retirement benefits after three months’ employment. Mr. Nolley will receive 15 days of paid time
off, subject to two weeks’ notice and approval whenever possible. Mr. Nolley is subject to certain nondisclosure and non-solicitation
provisions under his stock option agreement.
Outstanding Equity Awards at Fiscal Year-End
As of December 31, 2021, the
following named executive officers had the following unexercised options, stock that has not vested, and equity incentive plan awards:
Name | |
Number of
Securities
Underlying
Unexercised
Options #
Exercisable | | |
# Unexercisable | | |
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Options | | |
Option
Exercise
Price | | |
Option
Expiration
Date | |
Number
of
Shares
or Units
of Stock
not
Vested | | |
Market
Value of
Shares
or Units
not
Vested | | |
Awards:
Number of
Unearned
Shares,
Units or
Other
Rights not
Vested | | |
Value of
Unearned
Shares,
Units or
Other
Rights
not
Vested | |
Andrew Shape, President, Chief Executive Officer and Director | |
| - | | |
| 323,810 | | |
| - | | |
$ | 4.15 | | |
11/11/2031 | |
| - | | |
| - | | |
| - | | |
| - | |
| |
| | | |
| | | |
| | | |
| | | |
| |
| | | |
| | | |
| | | |
| | |
Andrew Stranberg, Executive Chairman and Director | |
| - | | |
| 400,000 | | |
| - | | |
$ | 4.15 | | |
11/11/2031 | |
| - | | |
| - | | |
| - | | |
| - | |
| |
| | | |
| | | |
| | | |
| | | |
| |
| | | |
| | | |
| | | |
| | |
Randolph Birney, Executive Vice President | |
| - | | |
| 76,190 | | |
| - | | |
$ | 4.15 | | |
11/11/2031 | |
| - | | |
| - | | |
| - | | |
| - | |
| |
| | | |
| | | |
| | | |
| | | |
| |
| | | |
| | | |
| | | |
| | |
Christopher Rollins, Former Chief Financial Officer | |
| 28,991 | | |
| 52,009 | | |
| - | | |
$ | 4.15 | | |
11/11/2031 | |
| 6,142 | | |
$ | 38,847 | | |
| - | | |
| - | |
Director Compensation
For a discussion of compensation
to our non-employee directors during the fiscal year ended December 31, 2021, see “Board of Directors and Corporate Governance –
Director Compensation”.
2021 Equity Incentive Plan
On
September 14, 2021, we established the Stran & Company, Inc. Amended and Restated 2021 Equity Incentive Plan, or the Equity Incentive
Plan, or Plan. The purpose of the Plan is to grant restricted stock, stock options and other forms of incentive compensation to
our officers, employees, directors and consultants. The maximum number of shares of common stock that may be issued pursuant to awards
granted under the Plan is 3,000,000 shares. Cancelled and forfeited stock options and stock awards may again become available for grant
under the Plan. As of December 31, 2021, 1,250,432 shares remained available
for issuance under the Plan, including shares not otherwise reserved for outstanding stock options issued under the Plan.
The following summary briefly
describes the principal features of the Plan and is qualified in its entirety by reference to the full text of the Plan.
Awards
that may be granted include: (a) Incentive Stock Options, (b) Non-qualified Stock Options, (c) Stock Appreciation
Rights, (d) Restricted Awards, (e) Performance Share Awards, and (f) Performance Compensation Awards. These awards offer
our officers, employees, consultants and directors the possibility of future value, depending on the long-term price appreciation
of our common stock and the award holder’s continuing service with our company.
Stock
options give the option holder the right to acquire from us a designated number of shares of common stock at a purchase price that
is fixed upon the grant of the option. The exercise price will not be less than the market price of the common stock on the date of grant.
Stock options granted may be either tax-qualified stock options (so-called “incentive stock options”) or non-qualified stock
options.
Stock
appreciation rights, or SARs, which may be granted alone or in tandem with options, have an economic value similar to that of options.
When a SAR for a particular number of shares is exercised, the holder receives a payment equal to the difference between the market price
of the shares on the date of exercise and the exercise price of the shares under the SAR. The exercise price for SARs normally is the
market price of the shares on the date the SAR is granted. Under the Plan, holders of SARs may receive this payment — the appreciation
value — either in cash or shares of common stock valued at the fair market value on the date of exercise. The form of
payment will be determined by us.
Restricted
shares are shares of common stock awarded to participants at no cost. Restricted shares can take the form of awards of restricted
stock, which represent issued and outstanding shares of our common stock subject to vesting criteria, or restricted stock units, which
represent the right to receive shares of our common stock subject to satisfaction of the vesting criteria. Restricted shares are forfeitable
and non-transferable until the shares vest. The vesting date or dates and other conditions for vesting are established when the shares
are awarded.
The
Plan also provides for performance compensation awards, representing the right to receive a payment, which may be in the form of cash,
shares of common stock, or a combination, based on the attainment of pre-established goals.
All of the permissible types
of awards under the Plan are described in more detail as follows:
Purposes
of Plan: The purposes of the Plan are to attract and retain officers, employees and directors for
our company and its subsidiaries; motivate them by means of appropriate incentives to achieve long-range goals; provide incentive
compensation opportunities; and further align their interests with those of our stockholders through compensation that is based on our
common stock.
Administration of the Plan: The
Plan is currently administered by our board of directors and will be administered by our compensation committee once it is established
(which we refer to as the administrator). Among other things, the administrator has the authority to select persons who will receive
awards, determine the types of awards and the number of shares to be covered by awards, and to establish the terms, conditions, performance
criteria, restrictions and other provisions of awards. The administrator has authority to establish, amend and rescind rules and regulations
relating to the Plan.
Eligible
Recipients: Persons eligible to receive awards under the Plan will be those officers, employees,
consultants, and directors of our company and its subsidiaries who are selected by the administrator.
Shares
Available Under the Plan: The maximum number of shares of our common stock that may be delivered
to participants under the Plan is 3,000,000, subject to adjustment for certain corporate changes affecting the shares, such as stock splits.
Shares subject to an award under the Plan for which the award is canceled, forfeited or expires again become available for grants under
the Plan. Shares subject to an award that is settled in cash will not again be made available for grants under the Plan.
Stock Options:
General. Subject
to the provisions of the Plan, the administrator has the authority to determine all grants of stock options. That determination will include:
(i) the number of shares subject to any option; (ii) the exercise price per share; (iii) the expiration date of the option;
(iv) the manner, time and date of permitted exercise; (v) other restrictions, if any, on the option or the shares underlying
the option; and (vi) any other terms and conditions as the administrator may determine.
Option
Price. The exercise price for stock options will be determined at the time of grant. Normally, the exercise price will not
be less than the fair market value on the date of grant. As a matter of tax law, the exercise price for any incentive stock option awarded
may not be less than the fair market value of the shares on the date of grant. However, incentive stock option grants to any person owning
more than 10% of our voting stock must have an exercise price of not less than 110% of the fair market value on the grant date.
Exercise
of Options. An option may be exercised only in accordance with the terms and conditions for the option agreement as established
by the administrator at the time of the grant. The option must be exercised by notice to us, accompanied by payment of the exercise price.
Payments may be made in cash or, at the option of the administrator, by actual or constructive delivery of shares of common stock to the
holder of the option based upon the fair market value of the shares on the date of exercise.
Expiration
or Termination. Options, if not previously exercised, will expire on the expiration date established by the administrator at
the time of grant. In the case of incentive stock options, such term cannot exceed ten years provided that in the case of holders of more
than 10% of our voting stock, such term cannot exceed five years. Options will terminate before their expiration date if the holder’s
service with our company or a subsidiary terminates before the expiration date. The option may remain exercisable for specified periods
after certain terminations of employment, including terminations as a result of death, disability or retirement, with the precise period
during which the option may be exercised to be established by the administrator and reflected in the grant evidencing the award.
Incentive
and Non-Qualified Options. As described elsewhere in this summary, an incentive stock option is an option that is
intended to qualify under certain provisions of the Code, for more favorable tax treatment than applies to non-qualified stock options.
Any option that does not qualify as an incentive stock option will be a non-qualified stock option. Under the Code, certain restrictions
apply to incentive stock options. For example, the exercise price for incentive stock options may not be less than the fair market value
of the shares on the grant date and the term of the option may not exceed ten years. In addition, an incentive stock option may not be
transferred, other than by will or the laws of descent and distribution, and is exercisable during the holder’s lifetime only by
the holder. In addition, no incentive stock options may be granted to a holder that is first exercisable in a single year if that option,
together with all incentive stock options previously granted to the holder that also first become exercisable in that year, relate to
shares having an aggregate market value in excess of $100,000, measured at the grant date.
Stock
Appreciation Rights: Awards of SARs may be granted alone or in tandem with stock options. SARs provide
the holder with the right, upon exercise, to receive a payment, in cash or shares of stock, having a value equal to the excess of the
fair market value on the exercise date of the shares covered by the award over the exercise price of those shares. Essentially, a holder
of a SAR benefits when the market price of the common stock increases, to the same extent that the holder of an option does, but, unlike
an option holder, the SAR holder need not pay an exercise price upon exercise of the award.
Stock
Awards: Stock awards can also be granted under the Plan. A stock award is a grant of shares of common
stock or of a right to receive shares in the future. These awards will be subject to such conditions, restrictions and contingencies as
the administrator shall determine at the date of grant. Those may include requirements for continuous service and/or the achievement of
specified performance goals.
Cash
Awards: A cash award is an award that may be in the form of cash or shares of common stock or a
combination, based on the attainment of pre-established performance goals and other conditions, restrictions and contingencies identified
by the administrator.
Performance
Criteria: Under the Plan, one or more performance criteria will be used by the administrator in
establishing performance goals. Any one or more of the performance criteria may be used on an absolute or relative basis to measure the
performance of our company, as the administrator may deem appropriate, or as compared to the performance of a group of comparable companies,
or published or special index that the administrator deems appropriate. In determining the actual size of an individual performance compensation
award, the administrator may reduce or eliminate the amount of the award through the use of negative discretion if, in its sole judgment,
such reduction or elimination is appropriate. The administrator shall not have the discretion to (i) grant or provide payment in
respect of performance compensation awards if the performance goals have not been attained or (ii) increase a performance compensation
award above the maximum amount payable under the Plan.
Other
Material Provisions: Awards will be evidenced by a written agreement, in such form as may be approved
by the administrator. In the event of various changes to the capitalization of our company, such as stock splits, stock dividends and
similar re-capitalizations, an appropriate adjustment will be made by the administrator to the number of shares covered by outstanding
awards or to the exercise price of such awards. The administrator is also permitted to include in the written agreement provisions that
provide for certain changes in the award in the event of a change of control of our company, including acceleration of vesting. Except
as otherwise determined by the administrator at the date of grant, awards will not be transferable, other than by will or the laws of
descent and distribution. Prior to any award distribution, we are permitted to deduct or withhold amounts sufficient to satisfy any employee
withholding tax requirements. Our board also has the authority, at any time, to discontinue the granting of awards. The board also has
the authority to alter or amend the Plan or any outstanding award or may terminate the Plan as to further grants, provided that no amendment
will, without the approval of our stockholders, to the extent that such approval is required by law or the rules of an applicable exchange,
increase the number of shares available under the Plan, change the persons eligible for awards under the Plan, extend the time within
which awards may be made, or amend the provisions of the Plan related to amendments. No amendment that would adversely affect any outstanding
award made under the Plan can be made without the consent of the holder of such award.
Securities Authorized for Issuance Under Equity Compensation Plans
The following table sets forth certain information
about the securities authorized for issuance under our incentive plans as of December 31, 2021.
Plan Category | |
Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) | | |
Weighted-average exercise price of outstanding options, warrants and rights (b) | | |
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c) | |
Equity compensation plans approved by security holders(1) | |
| 1,587,000 | (2) | |
$ | 4.19 | | |
| 1,250,432 | (3) |
Equity compensation plans not approved by security holders | |
| - | | |
| - | | |
| - | |
Total | |
| 1,587,000 | | |
$ | 4.19 | | |
| 1,250,432 | |
(1) | On September 14, 2021, we established the Stran & Company, Inc. Amended and Restated 2021 Equity Incentive
Plan, or the Equity Incentive Plan, or Plan. The purpose of the Plan is to grant restricted stock, stock options and other forms of incentive
compensation to our officers, employees, directors and consultants. The maximum number of shares of common stock that may be issued pursuant
to awards granted under the Plan is 3,000,000 shares. Cancelled and forfeited stock options and stock awards may again become available
for grant under the Plan. For a further description of the Plan, see Item 11. “Executive Compensation – 2021 Equity Incentive
Plan”. |
(2) | Includes both vested and unvested options to purchase common stock and unvested stock grants under the
Plan. |
(3) | Represents shares available for award grant purposes under the Plan. |
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The following includes a summary
of transactions since the beginning of our 2020 fiscal year, or any currently proposed transaction, in which we were or are to be a participant
and the amount involved exceeded or exceeds the lesser of $120,000 or one percent of the average of our total assets at year-end for the
last three completed fiscal years, and in which any related person had or will have a direct or indirect material interest (other than
compensation described under “Executive Compensation” above). We believe the terms obtained or consideration that we paid
or received, as applicable, in connection with the transactions described below were comparable to terms available or the amounts that
would be paid or received, as applicable, in arm’s-length transactions.
Loans with Executive Chairman as Borrower,
Lender or Guarantor
Andrew Stranberg, our Executive
Chairman and largest shareholder, has issued notes payable to us in exchange for Company loans. The amounts due from Mr. Stranberg were
unsecured and non-interest bearing and there was no formal repayment plan under the notes. At December 31, 2021, 2020 and 2019, the amounts
due from Mr. Stranberg were $0, $6,748, and $0, respectively. The amounts outstanding under all notes issued by Mr. Stranberg to the Company
were repaid as of July 20, 2021.
We have also borrowed funds
from our Executive Chairman, Andrew Stranberg, during periods when Mr. Stranberg did not already owe funds to us. The loans are unsecured,
non-interest bearing, and there is no formal repayment plan. At December 31, 2021, 2020 and 2019, amounts due to Mr. Stranberg were $0,
$0 and $38,207, respectively. In September 2021, Mr. Stranberg loaned us $500,000 on an unsecured basis, accruing interest at 5% compounding
monthly with no formal repayment plan. The total amount owed, including principal of $500,000 and interest of $4,740, was repaid to Mr.
Stranberg on November 22, 2021.
From
July 2018 to November 2021, the Company had a secured line of credit with Bank of America allowing borrowings of as much as $3,500,000.
At December 31, 2020 and 2019, borrowings on this line of credit amounted to $1,650,000 and $2,150,000, respectively. The line bore interest
at the LIBOR Daily Floating Rate plus 2.75%. At December 31, 2020 and 2019, interest rates were 4.20% and 4.55%, respectively. The line
was reviewed annually and was due on demand. This line of credit was secured by substantially all assets of the Company. Mr. Stranberg
was a guarantor on the line of credit. We fully repaid and terminated this line of credit on November 22, 2021.
Transactions with Non-Employee Director
We and Alan Chippindale, one
of our non-employee directors, are parties to a Buyer’s Agreement, dated June 25, 2020, or the Buyer’s Agreement. Under the
Buyer’s Agreement, Mr. Chippindale agreed to provide certain merger and acquisition, management and recruitment consulting services
in connection with our acquisition of the Wildman Imprint assets. We agreed to pay Mr. Chippindale a fee of $20,000 upon completion of
a purchase and sale agreement and two annual fees of 1.5% of gross margin less costs attributable to the acquisition. In November 2021,
we paid Mr. Chippindale $9,954 as the first annual fee under the Buyer’s Agreement. Separately from the Buyer’s Agreement,
in September 2022, we paid Mr. Chippindale a one-time fee of $15,000 for providing certain merger and acquisition consulting services
in connection with our acquisition of Trend Promotional Marketing Corporation (d/b/a Trend Brand Solutions). The fees paid or that we
have agreed to pay to Mr. Chippindale for consulting services to date have totaled less than $120,000. Our board of directors has determined
that Mr. Chippindale remains eligible under NASDAQ and SEC rules to serve as an “independent director” of the Company and
as a member and chairman of our compensation committee and a member of our nominating and corporate governance committee. Due to Mr. Chippindale’s
compensation under the agreement, the board has determined that he is currently not eligible to be a member of our audit committee.
Transactions with Long Blockchain Corp.
We entered into an agreement
with Long Blockchain Corp., or LBCC, and its wholly-owned subsidiary, Stran Loyalty Group Inc., or SLG, dated July 26, 2018. According
to a Schedule 13D jointly filed by the Company and Mr. Stranberg on August 7, 2018, as of July 26, 2018, Mr. Stranberg owned a total of
4,288,799 shares or approximately 23.6% of LBCC, which included 1,788,799 shares of common stock of LBCC that he previously acquired with
his personal funds, and 2,500,000 shares that were required to be issued to the Company on July 26, 2018 which were deemed beneficially
owned by Mr. Stranberg as a control person of the Company. According to a proxy statement filed by LBCC on April 19, 2019, as of April
12, 2019, Mr. Stranberg still beneficially owned 4,233,744 shares or approximately 13.5% of LBCC, including the 2,500,000 shares required
to be issued to the Company. This agreement between us, LBCC and SLG was terminated as of July 31, 2020, and the Company has not received
any of the 2,500,000 shares.
Under the agreement, we were
required to provide SLG with certain assets and services for it to operate loyalty and gift card programs for designated program clients.
Under the agreement we were also required to pay SLG all amounts collected by us, other than loyalty card balances, from program clients,
and to provide an option to SLG to purchase the operating assets at cost. As compensation, LBCC was required to issue 2,500,000 shares
of common stock to us upon signing and certain additional amounts of shares of its common stock to us depending on SLG’s net revenue
and operating profit for each of the first two years of the contract, as follows:
Year One LBCC Share Compensation
SLG Net Revenue | |
SLG Adjusted EBITDA Margin | |
Number of LBCC Shares Earned |
Less than $1,250,000 | |
Less than 20% | |
The number of LBCC shares earned shall be based upon SLG’s net revenue for year one, divided by the average of the share price of LBCC’s common stock for the last 30 days of the year one measurement period, but in any event, not more than 1,750,000 shares of LBCC common stock, and if SLG’s year one net revenue is less than $625,000, then we forfeit any shares that we would otherwise earn |
Equal to or greater than $1,250,000 | |
Equal to or greater than 20% | |
1,750,000 LBCC shares shall be earned |
Equal to or greater than $1,500,000 | |
Equal to or greater than 25% | |
2,250,000 LBCC shares shall be earned, plus additional shares of LBCC common stock equal to 1.25 multiplied by the amount of SLG’s net revenue for year one that is greater than $1,500,000, divided by the average of the share price of LBCC’s common stock for the last 30 days of the year one measurement period |
Year Two LBCC Share Compensation
Net Revenue | |
Adjusted EBITDA Margin | |
Number of LBCC Shares Earned |
Less than $1,750,000 | |
Less than 20% | |
The number of LBCC shares earned shall be based upon SLG’s net revenue for year two divided by the trailing 30-day share price of LBCC’s common stock, but in any event, not more than 2,000,000 shares of LBCC common stock |
Equal to or greater than $1,750,000 and less than $2,250,000 | |
Equal to or greater than 20% | |
2,000,000 LBCC shares shall be earned |
Equal to or greater than $2,250,000 | |
Equal to or greater than 25% | |
2,250,000 LBCC shares shall be earned, plus additional LBCC shares of common stock equal to 1.25 multiplied by the amount of SLG’s Net Revenue for year one that is greater than $2,250,000, divided by the average of the share price of LBCC common stock for the last 30 days of the year two measurement period. |
Pursuant to the agreement,
Mr. Stranberg entered into a subscription agreement with LBCC under which Mr. Stranberg purchased 1,500,000 additional shares of common
stock of LBCC at $0.40 per share, or $600,000 in aggregate. According to a Schedule 13D jointly filed by the Company and Mr. Stranberg
on August 7, 2018, Mr. Stranberg used personal funds for this purchase. Mr. Stranberg received a three-year warrant from LBCC to purchase
an additional 450,000 shares of common stock of LBCC at $0.50 per share. Pursuant to the terms of the warrant, Mr. Stranberg was not permitted
to exercise any portion of the warrant to the extent that after giving effect to such issuance after exercise, Mr. Stranberg (together
with his affiliates, and any other persons acting as a group together with Mr. Stranberg or any of his affiliates), would beneficially
own in excess of 9.99% of the number of shares outstanding immediately after giving effect to the issuance of shares issuable upon exercise
of the warrant. Pursuant to the subscription agreement, Mr. Stranberg agreed not to sell or transfer the shares and the warrant unless
they are subsequently registered under the Securities Act and under applicable securities laws of certain states, or an exemption from
such registration is available. Mr. Stranberg did not exercise the warrant.
Under
the agreement, we and our affiliates, including Mr. Stranberg, had the option to purchase up to an additional 1,500,000 shares
of common stock of LBCC at $0.40 per share prior to July 31, 2019, which if exercised in full would have also entitled us to another warrant
to purchase up to an amount of common stock of LBCC equal to 30% of the amount that had been purchased. We and our affiliates, including
Mr. Stranberg, did not exercise this option.
The agreement automatically
renewed for additional one-year terms unless terminated by either party more than 60 days before the end of the term or upon a material
breach of contract by the other party. The agreement did not specify the amount of compensation for additional term years.
Under the agreement, SLG was
required to reimburse us for certain expenses that we incur as a result of providing the required program services. The amounts due from
SLG at December 31, 2020 and 2019 were $0 and $138,561, respectively.
As required by the agreement
with SLG and LBCC, we entered into a separate lockup agreement, dated July 26, 2018, in which we agreed not to transfer or sell the LBCC
shares received upon execution and any LBCC shares received as compensation for the first year until July 31, 2019 and January 31, 2020,
respectively, with exceptions for specified permitted transferees.
Other than Mr. Stranberg,
as disclosed above, and our Vice President of Strategy and Growth Initiatives, John Audibert, who received a nominal number of shares
of LBCC in exchange for services provided during 2018, no other officers, directors or shareholders of the Company are shareholders of
LBCC.
Overlap in Management with Long Blockchain
Corp.
In addition to the other terms
of the agreement with SLG and LBCC described above, LBCC and our President, Chief Executive Officer and director Andrew Shape entered
into an employment agreement dated as of July 26, 2018, pursuant to which Mr. Shape was appointed chief executive officer and chairman
of the board of LBCC from July 2018 to February 2021. As a result of his position as both chief executive officer and chairman of the
board of LBCC and as our chief executive officer, president and director, our management overlapped with the management of LBCC during
that period.
Under
Mr. Shape’s employment agreement, Mr. Shape was entitled to $200,000 annual salary through the equal quarterly issuance of restricted
shares of common stock of LBCC at a price per share equal to 85% of the average closing price for ten trading days prior to the end of
the quarter, but in any event not less than $0.30 per share. According to page 8 of a proxy statement filed by LBCC on April 22,
2019, as of April 12, 2019, “437,251 shares were earned by Mr. Shape under his employment agreement dated July 26, 2018, but not
yet issued.” Pursuant to the employment agreement with LBCC, on May 21, 2019 Mr. Shape was granted a warrant to purchase 2,000,000
shares of common stock of LBCC at a price per share of $0.25, exercisable from January 18, 2019 to January 17, 2023. Mr. Shape has not
exercised the warrant. The employment agreement contained other standard provisions including as to termination, nondisclosure and noncompetition.
Mr. Shape resigned from his positions with LBCC as of February 2021 and none of our officers, directors or shareholders have any employment
or directorship relationship with LBCC.
Revocation of Registration of Common Stock
of Long Blockchain Corp.
Pursuant to an “Order
Instituting Proceedings Pursuant To Section 12(j) Of The Securities Exchange Act Of 1934, Making Findings, And Revoking Registration Of
Securities,” File No. 3-20228, Administrative Proceeding, Release No. 91174 / February 19, 2021, the SEC found that “[f]rom
approximately 2015 to 2017, [LBCC]’s principal business was ready-to-drink beverages. In December 2017, the company changed its
name to LBCC and announced that it was shifting its business operations from soft drink production to activities related to blockchain
technology. Its blockchain business never became operational. LBCC has common stock registered pursuant to Section 12(g). The common stock
of LBCC was registered under Section 12(b) of the Exchange Act and traded on NASDAQ until NASDAQ filed a Form 25 on June 6, 2018 to delist
the securities. LBCC stock is currently quoted and on OTC Link whose parent company is OTC Markets Group, Inc.” In addition, the
SEC found that “LBCC has failed to comply with Section 13(a) of the Exchange Act and Rules 13a-1 and 13a-13 thereunder in that it
has not filed an annual report on Form 10-K since the period ended December 31, 2017. LBCC is also delinquent in filing quarterly reports,
having not filed a Form 10-Q since the period ended September 30, 2018.” Based in part on these findings, effective February 22,
2021, the SEC revoked the registration of the common stock of LBCC under the Exchange Act, and its stock is no longer listed or quoted
on any securities exchange or trading market.
DELINQUENT SECTION 16(A) REPORTS
Section 16(a) of the Exchange
Act requires our directors and executive officers and beneficial holders of more than 10% of our shares of common stock to file with the
SEC initial reports of ownership and reports of changes in ownership of our equity securities. We believe, based solely on a review of
the copies of such reports furnished to us and representations of these persons, that all reports were timely filed for the year ended
December 31, 2021, except that the Form 3 for each of our Chief Technology Officer Jason Nolley and Chief of Staff Stephen Paradiso were
filed late due to administrative oversight.
ADDITIONAL INFORMATION
OTHER MATTERS
Our Board of Directors is
not aware of any business to come before the Annual Meeting other than those matters described above in this proxy statement. However,
if any other matters should properly come before the Annual Meeting, it is intended that proxies in the accompanying form will be voted
in accordance with the judgment of the person or persons voting the proxies.
STOCKHOLDER COMMUNICATIONS
The Company has a process
for stockholders who wish to communicate with the Board of Directors. Stockholders who wish to communicate with the Board may write to
it at the Company’s address given above. These communications will be reviewed by one or more officers of the Company designated
by the Board, who will determine whether they should be presented to the Board. The purpose of this screening is to allow the Board to
avoid having to consider irrelevant or inappropriate communications.
DEADLINES FOR STOCKHOLDER PROPOSALS FOR
THE 2023 ANNUAL MEETING
If
you wish to have a proposal included in our proxy statement for the 2023 Annual Meeting in accordance with Rule 14a-8 under the Exchange
Act, your proposal must be received by the Secretary of the Company at 2 Heritage Drive, Suite 600, Quincy, MA 02171, no later
than July 3, 2023, unless the 2023 Annual Meeting date will be prior to October 31, 2023, in which case the proposal may be submitted
a reasonable time before the Company begins to print and send its proxy materials for the 2023 Annual Meeting. A proposal which is received
after the applicable date or which otherwise fails to meet the requirements for stockholder proposals established by the SEC will not
be included. The submission of a stockholder proposal does not guarantee that it will be included in the proxy statement. The proposal
must also comply with the other requirements for stockholder proposals under Rule 14a-8 under the Exchange Act in order for it to be required
to be included in our proxy statement for the 2023 Annual Meeting.
If you wish to have a proposal
included in our proxy statement for the 2023 Annual Meeting outside the processes of Rule 14a-8 under the Exchange Act, a proposal submitted
by a stockholder and intended to be presented at the 2023 Annual Meeting must generally be submitted in writing to the Company’s
Secretary at 2 Heritage Drive, Suite 600, Quincy, MA 02171, and received not earlier than August 2, 2023 and not later than the close
of business on September 1, 2023, unless the 2023 Annual Meeting is held prior to October 31, 2023, in which case it may also be submitted
between the date that is 120 days prior to the 2023 Annual Meeting date and the close of business on the later of the 90th day prior to
the 2023 Annual Meeting date, the 10th day following the day on which public announcement of the 2023 Annual Meeting date is first made.
A stockholder proposal will need to comply with other requirements of our Bylaws regarding the inclusion of stockholder proposals in Company-sponsored
proxy materials in order to be considered for inclusion under our Bylaws. Although the Board will consider stockholder proposals, we reserve
the right to omit from our proxy statement, or to vote against, stockholder proposals that we are required to include under our Bylaws.
To
comply with the universal proxy rules, stockholders who intend to solicit proxies in support of director nominees other than the Company’s
nominees must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act no
later than October 2, 2023, unless the 2023 Annual Meeting date will be prior to October 31, 2023, in which case the notice must
be provided by the later of 60 calendar days prior to the date of the 2023 Annual Meeting or the 10th calendar day following the day on
which public announcement of the date of the 2023 Annual Meeting is first made by the Company. The
required notice should be addressed to the Company’s Secretary at 2 Heritage Drive, Suite 600, Quincy, MA 02171.
ANNUAL REPORT ON FORM 10-K
We
will furnish without charge to each person solicited by this proxy statement, on the written request of such person, a copy of our Annual
Report on Form 10-K with any amendments, including the financial statements and financial statement schedules, as filed with the SEC for
our most recent fiscal year. Such written requests should be directed to the Secretary of the Company, at our address listed on the top
of page one of this proxy statement. A copy of our Annual Report on Form 10-K, with any amendments, is also made available
on our website at https://ir.stran.com after it is filed with the SEC.
October
31, 2022 |
By Order of the Board of Directors |
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/s/ Andrew Stranberg |
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Executive Chairman, Secretary and Treasurer |
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STRAN &
COMPANY, INC. |
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2 HERITAGE
DRIVE, SUITE 600 |
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VOTE BY INTERNET |
QUINCY, MA
02171 |
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Before
The Meeting - Go to www.proxyvote.com or scan the QR Barcode above |
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Use the Internet to transmit your voting
instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time the day before the cut-off date or meeting
date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create
an electronic voting instruction form. |
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During
The Meeting - Go to www.virtualshareholdermeeting.com/STRN2022 |
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You may attend the meeting via the Internet
and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions. |
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VOTE BY PHONE - 1-800-690-6903 |
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Use any touch-tone telephone to transmit
your voting instructions up until 11:59 p.m. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in
hand when you call and then follow the instructions. |
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VOTE BY MAIL |
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Mark, sign and date your proxy card and
return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood,
NY 11717. |
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: |
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D92128-Z83702 |
KEEP THIS PORTION FOR YOUR RECORDS |
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DETACH
AND RETURN THIS PORTION ONLY
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THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
STRAN & COMPANY, INC.
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The
Board of Directors recommends that you vote FOR the following:
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1. |
To elect the six (6) members to our Board of Directors named in
the accompanying proxy statement to hold office until the 2023 Annual Meeting of Stockholders (the “2023 Annual Meeting”); |
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Nominees:
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For |
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Withhold |
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3. |
To
transact such other matters as may properly come before the Annual Meeting and any adjournment
or postponement thereof. |
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1a. |
Andrew Stranberg |
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IF
THIS PROXY IS PROPERLY EXECUTED, THE SHARES OF COMMON STOCK COVERED HEREBY WILL BE VOTED AS SPECIFIED HEREIN. IF NO SPECIFICATION
IS MADE, SUCH SHARES WILL BE VOTED “FOR” THE ELECTION OF ALL NOMINATED DIRECTORS (PROPOSAL NO. 1), AND “FOR”
THE RATIFICATION OF THE APPOINTMENT OF BF BORGERS CPA PC AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR
THE FISCAL YEAR ENDING DECEMBER 31, 2022 (PROPOSAL NO. 2). IN THEIR DISCRETION, THE PROXIES ARE ALSO AUTHORIZED TO VOTE UPON SUCH
OTHER MATTERS AS MAY PROPERLY COME BEFORE THE ANNUAL MEETING AND ANY ADJOURNMENT OR ADJOURNMENTS THEREOF. |
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1b. |
Andrew Shape |
☐ |
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1c. |
Travis McCourt |
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1d. |
Alan Chippindale |
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1e. |
Alejandro Tani |
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1f. |
Ashley Marshall |
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The Board of Directors recommends that you vote FOR the following: |
For |
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Against |
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Abstain |
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I (we) acknowledge
receipt of the Notice of Annual Meeting of Stockholders and the Proxy Statement dated October 31, 2022 and ratify all that the proxies,
or either of them, or their substitutes may lawfully do or cause to be done by virtue hereof and revoke all former proxies. |
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2. |
To ratify the
appointment of BF Borgers CPA PC as our independent registered public accounting firm for our fiscal year ending December 31, 2022;
and |
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If
you are voting by mail, please sign, date and mail this proxy immediately in the enclosed envelope. You are also permitted and encouraged
to vote online by following the instructions on the Notice of Internet Availability of Proxy Materials that was separately mailed to
you. |
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Please sign your name exactly as
it appears hereon. When signing as attorney, executor, administrator, trustee or guardian, please give your full title as it appears hereon.
When signing as joint tenants, all parties in the joint tenancy must sign. When a proxy is given by a corporation, it should be signed
by an authorized officer and the corporate seal affixed. No postage is required if returned in the enclosed envelope, if mailed in the
United States. |
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Signature [PLEASE SIGN WITHIN BOX] |
Date |
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Signature (Joint Owners) |
Date
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Important Notice Regarding
the Availability of Proxy Materials for the Annual Meeting:
The Notice and Proxy Statement
and Annual Report are available at www.proxyvote.com.
D92129-Z83702
STRAN & COMPANY, INC.
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON NOVEMBER 30, 2022
Annual Meeting Proxy Card
This Proxy is Solicited on
Behalf of the Board of Directors
The undersigned
stockholder of STRAN & COMPANY, INC., a Nevada corporation (the “Company”), acknowledges receipt of the Notice of Annual
Meeting of Stockholders and Proxy Statement, dated October 31, 2022, and hereby constitutes and appoints Mr. John Audibert, the Company’s
Vice President of Growth and Strategic Initiatives, and Mr. David Browner, the Company’s Interim Chief Financial Officer, or either
of them acting singly in the absence of the other, with full power of substitution in either of them, the proxies of the undersigned to
vote with the same force and effect as the undersigned all shares of the Company’s common stock which the undersigned is entitled
to vote at the Annual Meeting of Stockholders to be held on November 30, 2022 (the “Annual Meeting”), and at any adjournment
or adjournments thereof, hereby revoking any proxy or proxies heretofore given and ratifying and confirming all that said proxies may
do or cause to be done by virtue thereof with respect to the matter described below.
Continued and to be signed
on reverse side
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