Business Context and Reporting Period
Company: Stran & Company, Inc. (SWAG)
Filing Type: Form 8-K (Current Report)
Date of Report: September 10, 2024
Subject: Non-reliance on previously issued financial statements due to identified accounting errors.
Key Financial Metrics
This filing does not contain specific revenue, profit, cash flow, margin, debt, or liquidity figures. The document serves as a notice of restatement rather than a financial performance report.
Material Changes and Accounting Errors
The Audit Committee concluded that financial statements for the following periods contain material accounting errors and should no longer be relied upon:
- Fiscal years ended December 31, 2023 and December 31, 2022 (Form 10-K).
- Quarterly periods ended March 31, June 30, and September 30, 2022 and 2023 (Form 10-Q).
Identified Errors:
- Improper inclusion of certain amounts as accounts receivable and unearned revenues.
- Incorrect accounting of certain transactions as asset acquisitions instead of business combinations.
The prior independent auditor, BF Borgers CPA PC, issued reports on these periods that are now deemed unreliable. The current auditor is Marcum LLP.
Outlook, Management Commentary, and Risks
Restatement Plan: The Company intends to file amendments to the affected 10-K and 10-Q reports to restate the financial statements. A specific filing date for these amendments has not been determined.
Internal Controls: Management is assessing the effectiveness of internal controls over financial reporting and disclosure controls. If material weaknesses are confirmed, they will be disclosed in the amended reports.
Business Impact: Management states that the corrections are not expected to impact the Company's cash position or overall business operations.
Risks: The description of errors and impacts is preliminary and subject to change. There is no assurance that the actual effects of the restatements will be limited to the items currently described.
Investor Verification Checklist
- Verify the timeline for the filing of amended 10-K and 10-Q reports.
- Monitor for disclosures regarding material weaknesses in internal controls over financial reporting.
- Review the specific quantitative impact of the restatements on assets, liabilities, and equity once the amended reports are filed.
- Confirm the status of the re-audit conducted by Marcum LLP.