Company: SWAGW
Filing Date: 2025-04-14
Form Type: 10-K
Source: 0001213900-25-031596
Chunk: 1336

Company: Stran & Company, Inc.
Filing Date: 2025-04-14
Form: 10-K
Item: Item 6
Chunk 1336
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 the taxing
jurisdiction. The Company remits sales, use, and GST taxes to Massachusetts,
other state jurisdictions, and Canada, respectively.

24.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 disclosure of certain assets,
liabilities and expenses. The most significant estimates in the Company’s financial statements relate to the fair value of assets
and liabilities assumed in acquisitions and the fair value of the contingent earnout liability. These estimates and assumptions are based
on current facts, historical experience and various other factors believed to be reasonable under the circumstances, the results of which
form the basis for making judgments about the carrying values of assets and liabilities and the recording of expenses that are not readily
apparent from other sources. Actual results may differ materially and adversely from these estimates. To the extent there are material
differences between the estimates and actual results, the Company’s future results of operations will be affected.

25.Derivative Financial Instruments - The Company accounts for warrants as either equity-classified or liability-classified
instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in ASC 480, Distinguishing
Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers
whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480,
and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed
to the Company’s own common stock and whether the warrant holders could potentially require “net cash settlement” in
a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires
the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while
the warrants are outstanding.

26.Contingent Earn-Out Liabilities - The Company measures its contingent earn-out liabilities at fair value
on a recurring basis using significant unobservable inputs classified within Level 3 of the fair value hierarchy. The significant unobservable inputs used in the
fair value measurements are (i) the operating income projections (projected gross profit amounts within the risk-neutral framework) over
the earn-out period (generally three or five years), (ii) the strike price, and (iii) volatility. Significant increases or decreases to
any