Company: SWAGW
Filing Date: 2025-03-07
Form Type: 10-Q
Source: 0001213900-25-021742
Chunk: 219

Company: Stran & Company, Inc.
Filing Date: 2025-03-07
Form: 10-Q
Item: Part I, Item 2
Chunk 219
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-neutral framework) over
the earn-out period (generally three or five years), (ii) the strike price, and (iii) volatility. Significant increases or decreases to
any of these inputs in isolation would result in a significantly higher or lower liability, with a higher liability capped by the contractual
maximum of the contingent earn-out obligations. Ultimately, the liability will be equivalent to the amount paid, and the difference between
the fair value estimate and amount paid will be recorded in earnings. The amount paid that is less than or equal to the contingent earn-out
liability on the acquisition date is reflected as cash used in financing activities in the consolidated statements of cash flows. Any
amount paid in excess of the contingent earn-out liability on the acquisition date is reflected as cash used in operating activities in
the consolidated statements of cash flows.

Recent Accounting Pronouncements

For a discussion of recently adopted accounting
pronouncements, see Recently Issued Accounting Pronouncements in Note A.18 to our financial statements beginning on page 1 of this
Quarterly Report on Form 10-Q.

 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not applicable. 

 ITEM 4. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our
Chief Executive Officer and Chief Financial Officer, evaluated our disclosure controls and procedures (as defined in Rules 13a-15(e) and
15d-15(e) under the Exchange Act) prior to the filing of this Quarterly Report on Form 10-Q. Based on that evaluation, our Chief Executive
Officer and Chief Financial Officer concluded that, as of the end of the period covered by this Quarterly Report on Form 10-Q, our disclosure
controls and procedures were not effective due to the following material weaknesses in our internal control over financial reporting:

●There was a material weakness in our internal controls related to the proper design and implementation
of control over formal review, approval, and evaluation of complex accounting transactions associated with business combinations.

●We identified a material weakness in internal control related to the proper design and implementation
of certain controls over management’s formal review process that includes multiple levels of review as well as timely review of
accounts and reconciliations leading to material adjustments.

●We identified a material weakness in internal control related to the proper design and implementation
of certain controls over income tax provision and management’s review of the income tax provision.

●We did not design and maintain effective