Company: SWAGW
Filing Date: 2025-02-11
Form Type: 10-Q
Source: 0001213900-25-011877
Chunk: 12

Company: Stran & Company, Inc.
Filing Date: 2025-02-11
Form: 10-Q
Item: Part I, Item 1
Chunk 12
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. 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.

12.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 statements of operations.

13.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 standards codification. The risk-free interest rate was determined from the implied yields of U.S.
Treasury zero-coupon bonds with a remaining life consistent with the expected term of the options.

14.Reclassifications - Certain reclassifications have been made to the Company’s previously issued
Statements of Operations whereby amounts relating to (i) cost of sales, previously reflected as multiple components, have been aggregated
and reclassified as a single line item, cost of sales. Additionally, certain reclassifications have been made to the Company’s previously
issued Statements of Cash Flows whereby amounts relating to the payment of contingent earn-out and installment payments, previously aggregated
and reflected as a single line item in the cash flows from financing activities, have been shown gross and shown as separate line items,
payment of contingent earn-out liabilities and payment of installment payment liabilities. These reclassifications had no impact on previously
reported net income, cash flows, or shareholders’ equity. 

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STRAN & COMPANY