Company: SWAGW
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001213900-25-044222
Chunk: 17

Company: Stran & Company, Inc.
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 1
Chunk 17
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STRAN & COMPANY, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS

(in thousands, except share and per share amounts)

Earn-Out Liabilities

A reconciliation of the earn-out liability
is included below:

    Balance as of December 31, 2024 
    $711 
  
    Payments earned and paid 
     — 
  
    Loss upon re-measurement 
     — 
  
    Balance as of March 31, 2025 
    $711 

    Current portion of contingent earn-out liabilities 
    $256 
  
    Long-term contingent earn-out liabilities 
    $455 

Fair Value on a Non-Recurring
Basis

Installment Payment Liabilities

The estimated fair value of the installment
payment liabilities represent a Level 2 measurement. The Company measures the initial installment payment liabilities at fair value by
discounting the contractually agreed upon payments by Bloomberg’s B+ corporate yield curve as of the valuation date, using rates
commensurate with the term to payment. The credit rating was determined utilizing Bloomberg’s default risk function for the Company
as of the valuation date. The installment payments and payment date (term) are based on the purchase agreements and the discount rate
represents a quoted market price classified within Level 2 of the fair value hierarchy. All assumptions utilized in the determination
of the fair values of assets and liabilities acquired in the Company’s business combinations were determined to be Level 3 in the
fair value hierarchy, see Note F. “Acquisitions” for the valuation assumptions used.

C.INVENTORY:

Inventory consists of the following:

    March 31,  2025  
    December 31,  2024 
  
    Finished goods (branded products) 
    $7,439  
    $5,093 
  
    Goods in process (un-branded products) 
     217  
     296 

    $7,656  
    $5,389 

D.PROPERTY AND EQUIPMENT, NET:

Property and equipment, net consists
of the following:

    March 31,  2025  
    December 31,  2024 
  
    Leasehold improvements 
    $6  
    $6 
  
    Office furniture and equipment 
     688  
     660 
  
    Software 
     3,063  
     2,967 
  
    Transportation equipment