Company: SWAGW
Filing Date: 2025-02-11
Form Type: 10-Q
Source: 0001213900-25-011872
Chunk: 45

Company: Stran & Company, Inc.
Filing Date: 2025-02-11
Form: 10-Q
Item: Part I, Item 1
Chunk 45
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. As a percentage of sales, operating expenses decreased
to 33.4% for the three months ended March 31, 2024, from 37.5% for the three months
ended March 31, 2023. The increase in the dollar amount of operating expenses was primarily
due to an increase in aggregate expenses related to the organic growth in our business.

Other Income

Other income consists
of other income, interest income, and realized gain on investments. Our other income was approximately $15 thousand for the three months
ended March 31, 2024, compared to approximately $0 for the three months ended March 31, 2023. This change was primarily due to noncash
accretion expense related to certain installment payment liabilities. Our interest income was approximately $93 thousand for the three
months ended March 31, 2024, compared to approximately $138 thousand for the three months ended March 31, 2023. This change was primarily
due to a decrease in interest generated from investments. Our realized gain on investments was approximately $70 thousand for the three
months ended March 31, 2024, compared to approximately $12 thousand for the three months ended March 31, 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 three months ended
March 31, 2024 was approximately $0 thousand compared to income tax provision of approximately $0.1 million for the three months ended
March 31, 2023. Income tax provision for the three months ended March 31, 2024 and 2023 accounted for 0.0% and 12.0%, respectively, of
loss before income taxes of approximately $0.5 million and approximately $0.4 million, respectively. As of March 31, 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 2023.

Net Loss

Our