Dear SRTX Shareholders,
After eight years of building what we believe will become the operating system for Western apparel manufacturing, SRTX is at a transformational moment. The technology works. The customers are committed. The vision is clear. But our ability to secure the working capital needed to fund 2025 production will determine whether we seize this opportunity.
From day one, I’ve believed in radical transparency with our team. We’ve shared every metric, challenge, and milestone, and I’ve recently started sharing this journey more publicly. Why? Because rebuilding manufacturing in the West isn’t easy—but it’s possible, and it’s necessary. I hope that by sharing our story, we can inspire the next generation of builders.
2024: A Year of Deliberate Transformation
In 2024, we made bold, strategic changes to position SRTX for scale. We shifted from D2C to B2B, increasing unit volumes while deliberately taking revenue down from $45M to $30M to focus on proving our platform with strategic partnerships. The market’s response has been overwhelmingly positive:
Over 2 million units already on order for 2025, exceeding all of 2024 production.
Pipeline for 4+ million units, with sell-through data suggesting this is just the beginning.
Commitments from major retailers like Costco, Walmart, H&M, and Skims—partners who aren’t just interested, but committed.
Right now, we’re selling units at ~$10/unit while they cost $12/unit to produce—a deliberate investment to hit the critical $19.99 retail price point and secure these partnerships.
Scaling In-House Production: The Path to Profitability
This model only works if we scale in-house production. We’ve reduced production costs from $100/unit in 2018 to $12/unit today and are on track to achieve $5/unit by the end of 2025, with a long-term goal of $2.50/unit at scale.
In December, we achieved 100% in-house fiber production of our specialty UHMWPE fibers—a milestone that positions us to reduce CTP from $12/unit to $5/unit by the end of 2025. To achieve this, we need to scale up from hundreds of kilos per week to 6,000+ kilos/month to supply fiber for all booked orders. If we pull this off, profitability becomes not just achievable—it becomes inevitable.
But manufacturing is unforgiving in its timing, and the challenge ahead is clear: we have until the end of Q1 to bridge a $23M cash gap and reach profitability by year-end.
In January, we’re starting production on $40M+ in B2B inventory, which won’t generate revenue until June.
Cash from those sales won’t flow until September.
Last year’s funding laid the foundation: setting up in-house production, covering losses, and proving this model works. This year, we face new inventory to build, new capacity to add, and new working capital to fund—all before we see a dollar from growing orders.
The good news? We’re months away from the tipping point where unit volumes will be high enough, and costs low enough, to cover operating expenses. But we must stay the course to get there.
Beyond Tights: The Broader Vision
We’ve bet everything on this moment because transforming global manufacturing requires bold action. There’s no retreating to a small luxury brand to stretch cash flow—we’re here for the industrialization play. We either prove this works at scale, or we don’t.
This isn’t just about tights—it’s about building the infrastructure and platform to transform how apparel is manufactured - everywhere. While scaling tights, where we have a clear right to win, we’ve also developed technologies that expand far beyond UHMWPE apparel:
Hydra: A PFAS-free UHMWPE membrane advancing with global athletic brands, targeting a $5B+ market.
Elasta: A recyclable elastic fiber redefining circularity in apparel.
Renew: Technology to break down mixed textiles into pure, reusable materials—redefining recycling and sustainability.
Cortex: AI-powered manufacturing intelligence, providing transparency and efficiency for customers.
Each of these innovations builds on the platform we’ve created—but none of them matter if we can’t first prove the core model works.
The Moment of Truth
This is a pivotal moment for SRTX. Our success in bridging our near term term financing gap will define our future.
If we secure the resources to bridge this gap and scale in-house production, the rewards will be extraordinary:
Owning the tights market.
Entering profitability.
Unlocking the next phase of dominance in apparel manufacturing.
After eight years, I’ve become familiar with what it feels like to work on the edge of a knife. Each year, the pressure builds as profitability gets closer within reach. This year, the stakes are higher than ever but, at the same time, our success have never been closer.
With determination,
Katherine Homuth
Founder & CEO, SRTX
Forward-Looking Statements and Risk Factors
This communication contains forward-looking statements within the meaning of applicable securities laws. Forward-looking statements include, but are not limited to, statements regarding: future business plans, revenue projections, production costs, market opportunities, funding requirements, development timelines, and business metrics. These statements are based on various assumptions, whether or not identified in this communication, and reflect management's current expectations.
These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from those projected, including but not limited to: market conditions, technological challenges, manufacturing risks, competition, regulatory requirements, funding availability, and other factors discussed in our regulatory filings.
Any investment in SRTX's securities involves significant risks and should be considered only by persons who can afford the loss of their entire investment. This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities. Any such offer would be made only by means of appropriate offering documents to accredited investors meeting all regulatory requirements.
We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law. You are cautioned not to place undue reliance on these forward-looking statements.
This update is not intended as investment advice or an offering document. For information about investment opportunities, qualified investors should contact SRTX's investor relations department directly.
Having done the strategic and wholesale dance in a few different ways over the years I truly believe that strategic retailers should be participating in your success by placing deposits on their orders if they're truly committed to more than the status quo.
There are cases of this globally but it's sadly very very rare if ever in the world of fashion and lifestyle.
Thank you for your willingness to share and help educate consumers and stakeholders alike.