Company: SWAGW
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001213900-25-109289
Chunk: 102

Company: Stran & Company, Inc.
Filing Date: 2025-11-12
Form: 10-Q
Item: Part I, Item 1
Chunk 102
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model are unobservable and thus are considered to be Level 3 inputs. The inputs for the market capitalization calculation are considered
Level 1 inputs.

11

STRAN & COMPANY, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS

(in thousands, except share and per share amounts)

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 September 30, 2025 and December 31, 2024, the Company determined it had uncertain tax positions of $0 and $3,141, respectively. During the quarter ended September 30, 2025, the Company reversed its previously recorded uncertain tax positions considering the filing of its tax return for the year ended December 31, 2024. This reversal did not affect the income tax provision or tax balances recognized on the unaudited condensed consolidated balance sheet as there were only offsetting changes in individual temporary differences.

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 recorded an income tax benefit
of approximately $72 and $1 in the unaudited condensed consolidated statement of operations for the three months ended September 30, 2025
and 2024, respectively. The Company recorded an income tax expense of approximately $4 and $2 in the unaudited condensed consolidated
statement of operations for the nine months ended September 30, 2025 and 2024, respectively.

As of year-end 2024, the Company had
federal and state net operating losses (“NOL”) of approximately $4.0 million and $4.8 million, respectively. The federal NOLs
generated will carryforward indefinitely. Generally, state NOLs will begin to expire March 31, 2028. In accordance with Section 382 of
the U.S. Internal Revenue Code, the usage of the Company’s NOL carryforwards may be subject to annual limitations to the extent
that greater than 50% ownership changes have occurred. Tax returns for the years ended 2021 through 2025 are subject to review by tax