Stran & Company Receives Notification of Deficiency from Nasdaq Related to Delayed Filing of Quarterly Report on Form 10-Q

Rhea-AI Summary

Stran & Company (NASDAQ: SWAG) has received a notification from Nasdaq regarding its failure to file the Q2 2024 10-Q report on time. This non-compliance stems from the dismissal of BF Borgers CPA PC as the company's independent auditor on May 13, 2024, following an SEC order barring the firm from practicing before the SEC. Stran needs additional time to assess the impact of this situation on its previous financial statements.

Nasdaq has granted Stran until December 16, 2024, to file its delinquent Q1 2024 10-Q. The company must submit an updated compliance plan to Nasdaq by September 24, 2024. While this notification doesn't immediately affect Stran's listing on the Nasdaq Capital Market, the company is working to file the Q2 2024 10-Q as soon as possible to regain compliance.

Positive

• None.

Negative

• Failure to file Q2 2024 10-Q report on time
• Non-compliance with Nasdaq's continued listing requirements
• Dismissal of independent auditor due to SEC order
• Potential impact on previous financial statements
• Risk of delisting if compliance is not regained

Financial Analyst

This notification from Nasdaq represents a significant regulatory challenge for Stran & Company. The delay in filing their Q2 2024 10-Q, following a similar delay for Q1, raises serious concerns about the company's financial reporting capabilities. The dismissal of their former accounting firm due to an SEC order adds another layer of complexity. Investors should be cautious, as this situation could lead to:

• Potential delisting from Nasdaq if compliance isn't achieved by December 16, 2024
• Increased scrutiny from regulators and auditors
• Possible restatements of prior financial reports

While the immediate impact on stock trading is , the long-term implications for investor confidence and market perception are substantial. The company's ability to swiftly address these issues and regain compliance will be important for its future on the Nasdaq exchange.

Legal Expert

The notification from Nasdaq highlights significant compliance issues for Stran & Company. Key legal considerations include:

• The company must submit an updated compliance plan by September 24, 2024
• The maximum extension granted by Nasdaq expires on December 16, 2024
• Potential legal ramifications from the SEC order against BF Borgers

The situation underscores the critical importance of maintaining robust financial reporting processes. Stran faces a tight timeline to address these issues and failure to do so could result in delisting. Investors should closely monitor the company's progress in filing the overdue reports and any potential legal consequences stemming from the former accounting firm's conduct.

Quincy, MA, Aug. 29, 2024 (GLOBE NEWSWIRE) -- Stran & Company, Inc. ("Stran" or the "Company") (NASDAQ: SWAG) (NASDAQ: SWAGW), a leading outsourced marketing solutions provider that leverages its promotional products and loyalty incentive expertise, today announced that it has received a written notification (the “Notification Letter”) from the Listing Qualifications staff of The Nasdaq Stock Market (“Nasdaq”) as a result of its failure to file its Quarterly Report on Form 10-Q for the quarter ended June 30, 2024 (the "Form 10-Q") in a timely fashion. The Notification Letter advised the Company that it was not in compliance with Nasdaq’s continued listing requirements under the timely filing criteria established in Nasdaq Listing Rule 5250(c)(1). 

As reported by the Company in its Form 12b-25 filed with the Securities and Exchange Commission (the “SEC”) on August 15, 2024, the Form 10-Q cannot be filed within the prescribed time period without unreasonable effort or expense primarily because the Company was required to dismiss BF Borgers CPA PC (“BF Borgers”) as the Company’s former independent registered public accounting firm on May 13, 2024 as a result of an SEC order (the “Order”) permanently barring BF Borgers and its sole audit partner, Benjamin F. Borgers CPA, from appearing or practicing before the SEC as an accountant, and needs additional time to assess the impact of BF Borgers’ and Mr. Borgers’ conduct as described in the Order on the Company’s financial statements for prior fiscal periods.

Previously, Nasdaq granted the Company an exception until December 16, 2024 to file its delinquent Quarterly Report on Form 10-Q for the quarter ended March 31, 2024 (the "Initial Delinquent Filing"). As a result, any additional Nasdaq exception will be limited to a maximum of 180 calendar days from the due date of the Initial Delinquent Filing, or until December 16, 2024. In accordance with Nasdaq’s listing rules, the Company has until September 24, 2024 to submit to Nasdaq an update to its original plan to regain compliance with Nasdaq's listing rules.

As noted above, the Company is working diligently to complete the Form 10-Q. The Company intends to file the Form 10-Q as soon as practicable to regain compliance with the Nasdaq Listing Rules.

No assurance can be given that the Company will be able to regain compliance with the aforementioned listing requirement or maintain compliance with the other continued listing requirements set forth in the Nasdaq Listing Rules.

The Notification Letter has no immediate effect on the listing of the Company’s common stock or warrants on The Nasdaq Capital Market.

About Stran
For over 29 years, Stran has grown to become a leader in the promotional products industry, specializing in complex marketing programs to help recognize the value of promotional products, branded merchandise, and loyalty incentive programs as a tool to drive awareness, build brands and impact sales. Stran is the chosen promotional programs manager of many Fortune 500 companies, across a variety of industries, to execute their promotional marketing, loyalty and incentive, sponsorship activation, recruitment, retention, and wellness campaigns. Stran provides world-class customer service and utilizes cutting-edge technology, including efficient ordering and logistics technology to provide order processing, warehousing, and fulfillment functions. The Company’s mission is to develop long-term relationships with its clients, enabling them to connect with both their customers and employees in order to build lasting brand loyalty.

Additional information about the Company is available at: www.stran.com.

Forward Looking Statements
This press release contains “forward-looking statements” that are subject to substantial risks and uncertainties. All statements, other than statements of historical fact, contained in this press release are forward-looking statements. Forward-looking statements contained in this press release may be identified by the use of words such as “anticipate,” “believe,” “contemplate,” “could,” “estimate,” “expect,” “intend,” “seek,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “target,” “aim,” “should,” "will,” “would,” or the negative of these words or other similar expressions, although not all forward-looking statements contain these words. Forward-looking statements are based on the Company’s current expectations and are subject to inherent uncertainties, risks and assumptions that are difficult to predict. Further, certain forward-looking statements are based on assumptions as to future events that may not prove to be accurate. These and other risks and uncertainties are described more fully in the section titled “Risk Factors” in the Company’s periodic reports which are filed with the Securities and Exchange Commission. Forward-looking statements contained in this announcement are made as of this date, and the Company undertakes no duty to update such information except as required under applicable law.

Contacts:

Investor Relations Contact
Crescendo Communications, LLC
Tel: (212) 671-1021
SWAG@crescendo-ir.com

Press Contact
Howie Turkenkopf
press@stran.com

FAQ

Why did Stran & Company (SWAG) receive a notification from Nasdaq?

Stran & Company (SWAG) received a notification from Nasdaq due to its failure to file the Q2 2024 10-Q report on time, which violates Nasdaq's continued listing requirements under the timely filing criteria.

What caused the delay in Stran & Company's (SWAG) Q2 2024 10-Q filing?

The delay was primarily caused by the dismissal of BF Borgers CPA PC as the company's independent auditor on May 13, 2024, following an SEC order. Stran needs additional time to assess the impact of this situation on its previous financial statements.

What is the deadline for Stran & Company (SWAG) to regain compliance with Nasdaq?

Nasdaq has granted Stran & Company (SWAG) until December 16, 2024, to file its delinquent Q1 and Q2 2024 10-Q reports and regain compliance with the listing rules.

Will Stran & Company (SWAG) be immediately delisted from Nasdaq?

No, the notification has no immediate effect on Stran & Company's (SWAG) listing on the Nasdaq Capital Market. However, the company must work to regain compliance to avoid potential delisting in the future.