Company: SWAGW
Filing Date: 2025-02-11
Form Type: 10-Q
Source: 0001213900-25-011872
Chunk: 80

Company: Stran & Company, Inc.
Filing Date: 2025-02-11
Form: 10-Q
Item: Part I, Item 2
Chunk 80
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 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 net loss for the three months ended March 31, 2024 was approximately
$0.5 million, compared to approximately $0.5 million for the three months ended March 31, 2023. These results were primarily due to the
increase in sales for the three months ended March 31, 2024 from the acquisition of the assets of T R Miller to approximately $2.0 million
from $0 for the three months ended March 31, 2023, and the increase of approximately $1.2 million from recurring organic sales for the
three months ended March 31, 2024 compared to the three months ended March 31, 2023. These factors were offset by the reasons described
above for the increase in operating expenses and the increase in cost of sales.

32

Liquidity and Capital Resources

As of March 31,
2024, we had cash and cash equivalents of approximately $9.5 million and investments of approximately $10.7 million. We have financed
our operations primarily through cash generated from our initial public offering of common stock and warrants to purchase common stock
in November 2021, our private placement of common stock and warrants to purchase common stock in December 2021, and