Company: SWAGW
Filing Date: 2025-02-11
Form Type: 10-Q
Source: 0001213900-25-011872
Chunk: 15

Company: Stran & Company, Inc.
Filing Date: 2025-02-11
Form: 10-Q
Item: Part I, Item 1
Chunk 15
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 of the improper methods for
both 2021 and 2022. In addition, the Company plans to amend its 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 March 31, 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. 

12

4. 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 March 31, 2023, rather than reducing Unearned Revenue
for the customer deposits that were received prior to March 31, 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.

5. 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 months ended March 31, 2023.

6. 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 December 31, 2023, to accurately reflect the findings.

7. 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 to subsequent measurement of available-for-sale securities in accordance with the relevant
guidance of ASC Topic 320, Investments – Debt Securities.

To correct the error, the Company
adjusted realized gain (loss)