Company: SWAGW
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001213900-25-044222
Chunk: 248

Company: Stran & Company, Inc.
Filing Date: 2025-05-15
Form: 10-Q
Item: Part II, Item 8
Chunk 248
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 we then measure the fair value of the reporting unit and compare its
fair value to its carrying value (Step 1 of the goodwill impairment test). The majority of the inputs used in the discounted cash flow
model are unobservable and thus are considered to be Level 3 inputs. The inputs for the market capitalization calculation are considered
Level 1 inputs.

12. Uncertainty
in Income and Other Taxes - The Company adopted the standards for Accounting for Uncertainty in Income Taxes, which required the Company
to report any uncertain tax positions and to adjust its financial statements for the impact thereof. As of March 31, 2025 and December
31, 2024, the Company determined it 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