Business Context and Reporting Period
This Form 8-K, filed on June 21, 2024, by Stran & Company, Inc. (SWAG), addresses a Notice of Delisting or Failure to Satisfy a Continued Listing Rule received from The Nasdaq Stock Market LLC. The report details the company's failure to file its Quarterly Report on Form 10-Q for the period ended March 31, 2024, within the prescribed timeframe.
Key Financial Metrics
This filing does not contain specific financial performance data such as revenue, profit, cash flow, margins, debt, or liquidity. The document focuses exclusively on regulatory compliance and auditor-related issues.
Material Changes and Events
- Auditor Dismissal: The company dismissed its former auditor, BF Borgers CPA PC, effective May 13, 2024, following an SEC Order permanently barring the firm and its sole partner from practicing before the SEC.
- Financial Statement Impact: Due to the SEC Order, financial statements audited or reviewed by BF Borgers for fiscal years 2022 and 2023, and interim periods in 2023, can no longer be included in SEC filings.
- New Auditor Engagement: On June 15, 2024, the company engaged Marcum LLP as its new independent registered public accounting firm to audit annual statements and review the Q1 2024 statements.
- Nasdaq Non-Compliance: The company received a Notification Letter on June 21, 2024, stating it is not in compliance with Nasdaq Listing Rule 5250(c)(1) due to the late filing of the Form 10-Q.
Guidance, Outlook, and Risks
Compliance Plan: The company has 60 calendar days (until August 20, 2024) to submit a plan to Nasdaq to regain compliance. If accepted, Nasdaq may grant an exception of up to 180 days from the original due date (until December 16, 2024) to file the Form 10-Q.
Management Intent: Management intends to file the Form 10-Q within the initial 60-day period. If unsuccessful, they plan to submit a compliance plan and appeal any rejection to a Nasdaq Hearings Panel.
Risks and Contingencies:
- There is no assurance that a compliance plan will be accepted or that the company will regain compliance with Nasdaq listing rules.
- The company's name will be listed on Nasdaq's website as a non-compliant company beginning five business days after the notification.
- While the listing of common stock and warrants is not immediately impacted, failure to regain compliance could lead to delisting.
Investor Verification Checklist
- Verify the status of the Form 10-Q for the quarter ended March 31, 2024, and confirm if it has been filed by the August 20, 2024 deadline.
- Monitor Nasdaq's listing center website for the company's status as a non-compliant entity.
- Review the upcoming Form 10-Q to assess the impact of the auditor change on prior period financial statements.
- Confirm whether the company submits a formal compliance plan to Nasdaq if the 10-Q is not filed within 60 days.