Stran & Company, Inc. Quarterly report [Sections 13 or 15(d)]

Restatement of Previously Issued Financial Statements (Tables)

9 Months Ended

Sep. 30, 2024

The following tables summarize the effect of the restatement on each financial statement line item as of the dates indicated:

Balance Sheet as of September 30, 2023	As Reported		Adjustment			As Restated			Reference
Cash and cash equivalents	$	9,435	$	(73	)	$	9,362			*
Investments		10,258		72			10,330			*
Accounts receivable, net		16,530		(856	)		15,674			4,5
Accounts receivable – related parties		—		853			853			4
Deferred income taxes		1,334		(1,334	)		—			3
Inventory		6,903		(1,145	)		5,758			7,9
Prepaid corporate taxes		87		14			101			3
Total current assets		48,229		(2,469	)		45,760			3,4,5,7,9,*

Goodwill		—		810			810			1,2
Intangible assets, net		10,313		(7,113	)		3,200			1
Other assets		—		23			23			1
Right of use asset - office leases		1,344		111			1,455			1
Total other assets		11,657		(6,169	)		5,488			1,2
Total assets	$	61,300	$	(8,638	)	$	52,662			1,2,3,4,5,7,9,*

Accounts payable and accrued expenses	$	4,859	$	435		$	5,294			3
Accrued payroll and related		1,224		7			1,231			*
Unearned revenue		4,269		(841	)		3,428			5
Current portion of contingent earn-out liabilities		3,083		(2,839	)		244			1
Current portion of installment payment liabilities		—		748			748			1
Current portion of lease liability		460		69			529			1
Total current liabilities		16,924		(2,421	)		14,503			1,3,5,*

Long-term contingent earn-out liabilities		4,883		(4,062	)		821			1
Long-term installment payment liabilities		—		674			674			1
Long-term lease liability		858		76			934			1
Total long-term liabilities		5,741		(3,312	)		2,429			1
Total liabilities		22,665		(5,733	)		16,932			1,3,5,*

Additional paid-in capital		38,398		(167	)		38,231			1
Retained earnings (accumulated deficit)		235		(2,595	)		(2,360	)		1,2,3,6,7,*
Accumulated other comprehensive loss		—		(143	)		(143	)		8
Total stockholders’ equity		38,635		(2,905	)		35,730			1,2,3,6,7,8,*
Total liabilities and stockholders’ equity	$	61,300	$	(8,638	)	$	52,662			1,2,3,5,6,7,8,*

Statement of Operations for the Three Months Ended September 30, 2023	As Reported		Adjustment			As Restated			Reference
Sales	$	19,303	$	(352	)	$	18,951			6
Sales – related parties		—		723			723			4
Total sales		19,303		371			19,674			6,4

Cost of sales		12,932		(213	)		12,719			6
Cost of sales – related parties		—		556			556			4
Total cost of sales		12,932		343			13,275			6

GROSS PROFIT		6,371		28			6,399			6

General and administrative expenses		5,940		(208	)		5,732			1,*
Total operating expenses		5,940		(208	)		5,732			1,*

INCOME FROM OPERATIONS		431		236			667			1,6,*

Other income		242		(40	)		202			1
Unrealized gain (loss) on investments		36		(36	)		—			8
Realized gain on investments		—		77			77			8
Total other income		461		1			462			1,8

INCOME BEFORE INCOME TAXES		892		237			1,129			1,6,8,*

Provision for income taxes		208		(344	)		(136	)		3

NET INCOME	$	684	$	581		$	1,265			1,3,6,8,*

NET INCOME PER COMMON SHARE
Basic	$	0.04	$	0.03		$	0.07			1,3,6,8,*
Diluted	$	0.04	$	0.00		$	0.04			1,3,6,8,*

WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING
Basic		18,515,206		19,566			18,534,772			*
Diluted		18,515,206		10,723,989			29,239,195			*

Statement of Operations for the Nine Months Ended September 30, 2023	As Reported			Adjustment			As Restated			Reference
Sales	$	52,550		$	(343	)	$	52,207			6
Sales – related parties		—			853			853			4
Total sales		52,550			510			53,060			6

Cost of sales		36,407			(1,059	)		35,348			6,9
Cost of sales – related parties		—			656			656			4
Total cost of sales		36,407			(403	)		36,004			6

GROSS PROFIT		16,143			913			17,056			6

General and administrative expenses		18,370			(402	)		17,968			1,*
Total operating expenses		18,370			(402	)		17,968			1,*

LOSS FROM OPERATIONS		(2,227	)		1,315			(912	)		1,6,*

Other income		314			(95	)		219			1
Unrealized gain (loss) on investments		134			(134	)		—			8
Realized gain on investments		—			98			98			8
Total other income		915			(131	)		784			1,8

LOSS BEFORE INCOME TAXES		(1,312	)		1,184			(128	)		1,6,8,*

Provision for income taxes		(464	)		479			15			3

NET LOSS	$	(848	)	$	705		$	(143	)		1,3,6,8,*

NET LOSS PER COMMON SHARE
Basic	$	(0.05	)	$	0.04		$	(0.01	)		1,3,6,8,*
Diluted	$	(0.05	)	$	0.04		$	(0.01	)		1,3,6,8,*

WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING
Basic		18,515,206			(331	)		18,514,875			*
Diluted		18,515,206			(331	)		18,514,875			*

Statement of Stockholders’ Equity for the Nine Months Ended	Common Stock					Additional Paid-In			Accumulated Other Comprehensive			Retained Earning (Accumulated			Stockholders’
September 30, 2023	Shares			Value		Capital			Loss			Deficit)			Equity
Balance, September 30, 2023 (As Reported)		18,521,332		$	2	$	38,398		$	—		$	235		$	38,635
Adjustments		(186	)		—		(166	)		(143	)		(2,595	)		(2,904	)
Balance, September 30, 2023 (As Restated)		18,521,146		$	2	$	38,232		$	(143	)	$	(2,360	)	$	35,731

Statement of Cash Flows for the Nine Months Ended September 30, 2023	As Reported			Adjustment			As Restated			Reference
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(848	)	$	705		$	(143	)		1,3,4,6,8,*
Deferred income taxes		(493	)		493			—
Depreciation and amortization		1,039			(450	)		589			1,7
Adjustment to reconcile operating lease expense to cash paid		—			27			27			*
Change in allowance for credit losses		—			59			59			5,*
Intangible asset impairment, net		(142	)		142			—			1
Unrealized gain (loss) on investments		(134	)		134			—			8
Changes in operating assets and liabilities:
Accounts receivable, net		(2,087	)		1,726			(361	)		4,5
Accounts receivable – related parties		—			(853	)		(853	)		4
Inventory		(36	)		1,087			1,051			7
Prepaid taxes		—			(14	)		(14	)		3
Prepaid expenses		(409	)		5			(404	)		*
Accounts payable and accrued expenses		807			(156	)		651			3,*
Accrued payroll and related		615			6			621			*
Unearned revenue		3,636			(1,126	)		2,510			5
Net cash used in operating activities		(3,383	)		1,785			(1,598	)		1,3,4,5,6,7,8,*

CASH FLOWS FROM INVESTING ACTIVITIES:
Business acquisitions, net of cash acquired		(660	)		(1,463	)		(2,123	)		1
Proceeds from sale of investments		—			3,031			3,031			8
Purchase of investments		(369	)		(3,176	)		(3,545	)		8
Net cash used in investing activities		(1,823	)		(1,609	)		(3,432	)		1,8

CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of contingent earn-out liabilities		(586	)		(42	)		(628	)		1
Payment of installment payment liabilities		—			(210	)		(210	)		1
Net cash used in financing activities		(610	)		(252	)		(862	)		1

NET DECREASE IN CASH		(5,816	)		(76	)		(5,892	)		1,3,5,6,7,8,*

CASH - ENDING	$	9,438		$	(76	)	$	9,362			1,3,5,6,7,8,*