Company: SWAGW
Filing Date: 2025-03-07
Form Type: 10-Q
Source: 0001213900-25-021742
Chunk: 55

Company: Stran & Company, Inc.
Filing Date: 2025-03-07
Form: 10-Q
Item: Part II, Item 8
Chunk 55
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, the increase
in the dollar amount of operating expenses was primarily due to expenses related to Stran’s Netsuite enterprise resource planning system
implementation, acquisition and integration of the Gander Group Assets, and legal and accounting expenses related to the re-audit of historical
financial statements. For the SLS segment, the increase was due to the acquisition of the Gander Group Assets in August 2024.

39

Other
Income

Other income
consists of other income (expense), interest income, and realized gain on investments. Our other expense was approximately $(6)
thousand for the nine months ended September 30, 2024,
compared to other income of approximately $219 thousand for the nine months ended September 30, 2023.
This change was primarily due to noncash accretion expense related to the installment payment liabilities. Our
interest income was approximately $239 thousand for the nine months ended September
30, 2024, compared to approximately $467 thousand for
the nine months ended September 30, 2023. This change was primarily due to a decrease in interest
generated from investments. Our realized gain on investments was approximately $176 thousand for the nine months ended September
30, 2024, compared to approximately $98 thousand for the nine months ended September 30,
2023. This change was primarily due to the recording of all investments at estimated fair value.

Income Tax Provision

Income tax provision reflects statutory tax rates
in the jurisdictions in which we operate adjusted for permanent book/tax differences.

Income tax provision for the nine months ended
September 30, 2024 was approximately $2 thousand compared to income tax provision of approximately $15 thousand for the nine months ended
September 30, 2023. Income tax provision for the nine months ended September 2024 and 2023 accounted for 0.1% and 11.7%, respectively,
of loss before income taxes of approximately $3.6 million and approximately $0.1 million, respectively. As of September 30, 2024 and 2023,
the Company recorded an income tax provision comprised of state income taxes and a valuation allowance against its net deferred tax assets
as well as a minimum state tax liability. The company recorded a valuation allowance since its generated a deficit over a three-year cumulative
period.

Based on management’s expectations of future
earnings and recognition of a valuation allowance, we anticipate that our effective tax rate will remain similar to the rate recorded
in 202