Company: SWAGW
Filing Date: 2025-08-12
Form Type: 10-Q
Source: 0001213900-25-074995
Chunk: 14

Company: Stran & Company, Inc.
Filing Date: 2025-08-12
Form: 10-Q
Item: Part I, Item 1
Chunk 14
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 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 June 30, 2025 and December 31, 2024, the Company determined it had
uncertain tax positions of $3,371 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 recorded an income tax expense
of approximately $114 thousand and $3 thousand in the unaudited condensed consolidated statement of operations for the three months ended
June 30, 2025, and 2024, respectively. The Company recorded an income tax expense of approximately $76 thousand and $3 thousand in the
unaudited condensed consolidated statement of operations for the six months ended June 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
authorities.

The Company’s effective tax
rate for the three months ended June 30, 2025, and 2024 was 15.1% and (0.3%) respectively. The Company’s effective tax rate for
the six months ended June 30, 2025, and 2024 was 23.3% and (0.2%) respectively. The change in the effective tax rate from the comparison
of similar periods in 2025 versus 2024