Company: SWAGW
Filing Date: 2025-02-11
Form Type: 10-Q
Source: 0001213900-25-011877
Chunk: 293

Company: Stran & Company, Inc.
Filing Date: 2025-02-11
Form: 10-Q
Item: Part II, Item 8
Chunk 293
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 2023 U.S. federal income tax return, which will include a statement explaining additional adjustments
such as charitable contributions and stock option expense to its 2021 and 2022 net operating loss carryforward balances. All tax entries
have been booked as of June 30, 2024 and 2023, to reflect the correct income tax provision and deferred tax asset/(liability) balances.
The Company recorded a valuation allowance as well in 2022 as the Company was in a cumulative deficit at that time.

4. Related Party Presentation

Certain amounts relating to the accounts
receivable from related parties, previously reflected in Accounts Receivable, Net on the Company’s Balance Sheet, have been reclassified
to Accounts Receivable – Related Parties. These reclassifications had no impact on the previously reported net earnings, cash flows
or shareholders’ equity.

5. Accounts Receivable and Unearned
Revenue Adjustment

The Company incorrectly recorded certain
amounts in Accounts Receivable for products that were shipped but not billed as of June 30, 2023, rather than reducing Unearned Revenue
for the customer deposits that were received prior to June 30, 2023.

As a part of the restatement process,
the Company performed reconciliations of unbilled receivables and unearned revenue and adjusted overstated Accounts Receivable and Unearned
Revenue balances.

6. Sales Adjustment

The Company incorrectly recognized
Sales relating to freight charges for certain orders.

As a part of the restatement process,
the Company conducted a thorough analysis of sales including freight charges. Multiple reviews were carried out to ensure all potential
errors were addressed.

To correct the error, the Company adjusted
overstated freight revenue and corresponding freight expenses for the three and six months ended June 30, 2023.

7. Inventory Adjustment

The Company failed to perform a proper
full physical inventory count.

As a part of the restatement process,
the Company performed a physical inventory count and corresponding rollback analysis. The Company identified discrepancies between recorded
and actual inventory levels.

To correct the error, the Company adjusted
its inventory records and reduced its reported inventory value as of June 30, 2023, to accurately reflect the findings.

8. Subsequent Measurement of
Available-for-Sale Securities

The Company incorrectly recorded unrealized
holding gains and losses for available-for-sale securities that should be excluded from earnings and reported in other comprehensive income
(loss).

As a part of the restatement process,
the Company performed a separate analysis related