Company: SWAGW
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001213900-25-044222
Chunk: 13

Company: Stran & Company, Inc.
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 1
Chunk 13
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 had uncertain tax positions of $3,211 and $3,141, respectively. The Company believes the impact will
not be material as it will be able to utilize net operating losses to offset a majority of the risk. The Company recorded a nominal amount
of interest expense which is included as part of income tax expense.

13.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 offset by a valuation allowance.   The Company’s effective tax rate for the three months ended March 31, 2025, and 2024 was 8.89% and (0.00%) respectively. The increase in the effective tax rate from the comparison of 2025 and 2024, as noted above, primarily relates to the Company’s taxable income forecast for 2025, as of the current period. The Company has maintained a full valuation allowance against its deferred tax assets as of the current period based on its consideration of available evidence.

14.Stock-Based Compensation - The Company accounts for its stock-based awards in accordance with 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 consolidated statements of operations.

15.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