Company: SWAGW
Filing Date: 2025-02-11
Form Type: 10-Q
Source: 0001213900-25-011877
Chunk: 286

Company: Stran & Company, Inc.
Filing Date: 2025-02-11
Form: 10-Q
Item: Part II, Item 8
Chunk 286
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STRAN & COMPANY, INC.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts)

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

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

As of June 30, 2024 and December 31,
2023, the Company maintained deposits in three banks that exceeded the federal insured deposit limit of the Federal Deposit Insurance
Corporation (FDIC).

For the three and six months ended June
30, 2024, the Company had two major customers to which sales accounted for approximately 12.7% and 10.0% of the Company’s revenues,
respectively. The Company had accounts receivable from these customers amounting to 17.3% of the total accounts receivable balance.

For the three and six months ended June
30, 2023, the Company had three major customers to which sales accounted for approximately 13.4% and 21.3% of the Company’s revenues,
respectively. The Company had accounts receivable from these customers amounting to 8.6% of the total accounts receivable balance.

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

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

ii.identify the performance obligations in the contract;

iii.determine the transaction price;

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

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

The Company’s contract assessment
and approval varies based on whether the customer requests a one-time sale or a long-term contract. Customers with long-term contracts
require signed Master Sales Ag