Accounting Policies, by Policy (Policies)
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12 Months Ended |
Dec. 31, 2022 |
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| Accounting Policies [Abstract] |
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| Organization |
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1. |
Organization - Stran & Company, Inc., (the “Company”)
was incorporated under the laws of the Commonwealth of Massachusetts and commenced operations on November 17, 1995. The Company re-incorporated
under the laws of the State of Nevada on May 24, 2021. |
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| Operations |
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2. |
Operations - The Company is an outsourced marketing solutions
provider that sells branded products to customers. The Company purchases products and branding through various third-party manufacturers
and decorators and resells the finished goods to customers. |
In addition to selling branded products,
the Company offers clients custom sourcing capabilities; a flexible and customizable e-commerce solution for promoting branded merchandise
and other promotional products, managing promotional loyalty and incentives, print collateral, and event assets, order and inventory management,
and designing and hosting online retail popup shops, fixed public retail online stores, and online business-to-business service offerings;
creative and merchandising services; warehousing/fulfillment and distribution; print-on-demand; kitting; point of sale displays; and loyalty
and incentive programs.
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| Method of Accounting |
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3. |
Method of Accounting - The Company’s financial statements
are prepared using the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of
America. (“U.S. GAAP”). |
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| Emerging Growth Company |
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4. |
Emerging Growth Company - The Company is an “emerging
growth company,” as defined in Section 2(a) of the Securities Act, of 1933, as amended (the “Securities Act”), as modified
by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from
various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not
limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002,
reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the
requirements of holding a nonbinding advisory vote on executive compensation and approval of any golden parachute payments not previously
approved. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised
financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared
effective or do not have a class of securities registered under the Securities Exchange Act of 1934 (the “Exchange Act”))
are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt
out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election
to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard
is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company,
can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the
Company’s unaudited consolidated financial statements with another public company which is neither an emerging growth company nor
an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential
differences in accounting standards used. |
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| Cash and Cash Equivalents |
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5. |
Cash and Cash Equivalents - For purposes of the statement of cash flows, the Company considers all highly
liquid investments with an initial maturity of three months or less to be cash equivalents. |
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| Fair Value Measurements and Fair Value of Financial Instruments |
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6. |
Fair Value Measurements and Fair Value of Financial Instruments - The carrying value of certain financial
instruments, including cash and cash equivalents, accounts payable and accrued expenses, and due to related party are carried at historical
cost basis, which approximates their fair values because of the short-term nature of these instruments. |
The Company analyzes all financial instruments
with features of both liabilities and equity under the Financial Accounting Standard Board’s (the “FASB”) accounting
standard for such instruments. Under this standard, financial assets and liabilities are classified in their entirety based on the lowest
level of input that is significant to the fair value measurement. The Company did not identify any assets or liabilities that are required
to be presented on the balance sheet at fair value in accordance with the FASB Accounting Standards Codification (“ASC”) Topic
820.
ASC 825-10 “Financial Instruments”,
allows entities to voluntarily choose to measure certain financial assets and liabilities at fair value (fair value option). The fair
value option may be elected on an instrument-by-instrument basis and is irrevocable unless a new election date occurs. If the fair value
option is elected for an instrument, unrealized gains and losses for that instrument should be reported in earnings at each subsequent
reporting date. The Company did not elect to apply the fair value option to any outstanding instruments.
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| Short-term investments |
Short-Term Investments - Our investments consist of U.S. treasury bills, corporate bonds, money market
funds. We classify our investments as available-for-sale and record these investments at fair value. Investments with an original maturity
of greater than three months at the date of purchase and less than one year from the date of the balance sheet are classified as short-term
and those with maturities of more than one year from the date of the balance sheet are classified as long-term in the consolidated balance
sheet. We do not invest in any securities with contractual maturities greater than 24 months.
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| Concentration of Credit Risk |
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8. |
Concentration of Credit Risk - Financial instruments that potentially subject the Company to concentrations
of credit risk consist primarily of accounts receivable and deposits in excess of federally insured limits. These risks are managed by
performing ongoing credit evaluations of customers’ financial condition and by maintaining all deposits in high quality financial
institutions. |
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| Inventory |
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9. |
Inventory – Inventory consists of finished goods (branded products) and goods in process (un-branded
products awaiting decoration). All inventory is stated at the lower of cost (first-in, first-out method) or market value. |
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| Property and Equipment |
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10. |
Property and Equipment - Property and equipment are recorded at cost. Maintenance and repairs are charged
to expense as incurred whereas major betterments are capitalized. Depreciation is provided using straight-line and accelerated methods
over five years. |
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| Intangible Asset |
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11. |
Intangible Asset - Customer List - The Company accounts for intangible assets under the provision of ASC
350-20 “Accounting for Goodwill and Other Intangible Assets.” The provision establishes standards for valuation and amortization
of unidentifiable assets. |
Under ASC 350-20-35-1, the cost of unidentifiable
intangible assets is measured by the excess cost over the fair value of net assets acquired. Intangible assets with indefinite useful
lives shall not be amortized until its useful life is determined to be no longer infinite. The intangible assets are evaluated when a
triggering event occurs, at least annually, for potential impairment.
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| Fair Value of Financial Instruments |
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12. |
Fair Value of Financial Instruments - The Company’s financial instruments include cash and cash
equivalents, accounts receivable, accounts payable, accrued expenses, earn-out liability, and notes payable. The recorded values of cash
and cash equivalents, accounts receivable, accounts payable, accrued expenses, earn-out liability and notes payable approximate their
fair values based on their short-term nature. |
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| Revenue Recognition |
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13. |
Revenue Recognition - In May 2014, the Financial Accounting Standards Board (“FASB”) issued
Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), which is aimed
at creating common revenue recognition guidance for GAAP and the International Financial Reporting Standards (“IFRS”). This
new guidance provides a comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes
most current revenue guidance issued by the FASB. ASU 2014-09 also requires both qualitative and quantitative disclosures, including descriptions
of performance obligations. |
On January 1, 2019, the Company adopted
ASU 2014-09 and all related amendments (“ASC 606”) and applied its provisions to all uncompleted contracts using the modified
retrospective basis. The application of this new revenue recognition standard resulted in no adjustment to the opening balance of retained
earnings.
Performance Obligations - Revenue from
contracts with customers is recognized when, or as, the Company satisfies its performance obligations by transferring goods or services
to customers. A good or service is transferred to a customer when, or as, the customer obtains control of that good or service. A performance
obligation may be satisfied over time or at a point in time. Revenue from a performance obligation satisfied at a point in time is recognized
at the point in time that the company determines the customer has obtained control over the promised good or service. The amount of revenue
recognized reflects the consideration of which the Company expects to be entitled in exchange for the promised goods or services.
The following provides detailed information
on the recognition of the Company’s revenue from contracts with customers:
Product Sales - The Company
is engaged in the development and sale of promotional programs and products. Revenue on the sale of these products is recognized after
orders are shipped.
Reward Card Program -
The Company facilitates a reward card program for a customer and receives a transaction fee when the customer issues or replenishes a
new reward card. Revenue is recognized when cards are issued or replenished.
All performance obligations are
satisfied at a point in time.
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| Freight |
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14. |
Freight - The Company includes freight charges as a component
of cost of goods sold. |
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| Uncertainty in Income and Other Taxes |
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15. |
Uncertainty in Income and Other Taxes - The Company adopted
the standards for Accounting for Uncertainty in Income Taxes (income, sales, use, and payroll), which required the Company to
report any uncertain tax positions and to adjust its financial statements for the impact thereof. As of December 31, 2022 and 2021, the
Company determined that it had no tax positions that did not meet the “more likely than not” threshold of being sustained
by the applicable tax authority. The Company files tax and information returns in the United States Federal, Massachusetts, and other
state jurisdictions. These returns are generally subject to examination by tax authorities for the last three years. |
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| Income Taxes |
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16. |
Income Taxes - Income taxes are provided for the tax effects of transactions reported in the financial
statements and consist of taxes currently due plus deferred taxes. Deferred taxes are provided for differences between the basis of assets
and liabilities for financial statements and income tax purposes. The Company has historically utilized accelerated tax depreciation to
minimize federal income taxes. |
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| Earnings/ Loss per Share |
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17. |
Earnings/ Loss per Share - Basic earnings per share (“EPS”)
is computed based on the weighted average number of shares of common stock outstanding during the period. Diluted EPS is computed based
on the weighted average number of shares of common stock plus the effect of dilutive potential shares of common stock outstanding during
the period using the treasury stock method. Dilutive potential common shares include the issuance of potential shares of common stock
for outstanding stock options and warrants. |
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| Stock-Based Compensation |
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18. |
Stock-Based Compensation - The Company accounts for its stock-based
awards in accordance with FASB ASC 718, Compensation - Stock Compensation. ASC 718 requires all stock-based payments to employees to
be recognized in the consolidated statements of operations based on their fair values. The Company uses the Black-Scholes option pricing
model to determine the fair value of options granted. The Company is recognizing compensation costs only for those stock-based awards
expected to vest after considering expected forfeitures. Cumulative compensation expense is at least equal to the compensation expense
for vested awards. Stock-based compensation is recognized on a straight-line basis over the service period of each award. The Company
records compensation cost as an element of general and administrative expense in the accompanying statements of operations. |
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| Stock Option and Warrant Valuation |
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19. |
Stock Option and Warrant Valuation - Stock option and warrant
valuation models require the input of highly subjective assumptions. The fair value of stock-based payment awards was estimated using
the Black-Scholes option model with a volatility figure derived from an index of historical stock prices for comparable entities. For
warrants and stock options issued to non- employees, the Company accounts for the expected life based on the contractual life of the
warrants and stock options. For employees, the Company accounts for the expected life of options in accordance with the “simplified”
method, which is used for “plain-vanilla” options, as defined in the accounting standards codification. The risk-free interest
rate was determined from the implied yields of U.S. Treasury zero-coupon bonds with a remaining life consistent with the expected term
of the options. |
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| Sales Tax |
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20. |
Sales Tax - Sales tax collected from customers is recorded
as a liability, pending remittance to the taxing jurisdiction. Consequently, sales taxes have been excluded from revenues and costs.
The Company remits sales, use, and GST taxes to Massachusetts, other state jurisdictions, and Canada, respectively. |
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| Use of Estimates |
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21. |
Use of Estimates - The preparation of financial statements
in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain
reported amounts and disclosures. Accordingly, actual results could differ from those estimates. |
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| Recent Accounting Pronouncements |
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22. |
Recent Accounting Pronouncements - Management does not believe
that any recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on its financial
statements. |
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