Company: SWAGW
Filing Date: 2025-03-07
Form Type: 10-Q
Source: 0001213900-25-021742
Chunk: 217

Company: Stran & Company, Inc.
Filing Date: 2025-03-07
Form: 10-Q
Item: Part I, Item 2
Chunk 217
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 our market capitalization below our net book value. After assessing the totality of events and circumstances,
if we determine that it is more likely than not that the fair value of our reporting units are greater than their carrying amounts, no
further assessment is performed. If we determine that it is more likely than not that the fair value of our reporting units are less than
their carrying amounts, we calculate the fair value of the reporting units and compare the fair value to the reporting units’ net
book values.

Determining the fair value of a reporting unit
involves the use of significant estimates and assumptions. Our goodwill impairment test uses both the income approach and the market approach
to estimate a reporting unit’s fair value. The income approach is based on the discounted cash flow method that uses the reporting unit
estimates for forecasted future financial performance, including revenues, operating expenses, and taxes, as well as working capital and
capital asset requirements. These estimates are developed as part of our long-term planning process based on assumed market segment growth
rates and our assumed market segment share, estimated costs based on historical data and various internal estimates. Projected cash flows
are then discounted to a present value employing a discount rate that properly accounts for the estimated market weighted-average cost
of capital, as well as any risk unique to the subject cash flows. The market approach is based on weighting the financial multiples of
comparable companies and applying a control premium. A reporting unit’s carrying value represents the assignment of various assets and
liabilities, excluding certain corporate assets and liabilities, such as cash and debt.

Our intangible assets with an indefinite life
are principally from acquired trade names. We estimated the fair value of our acquired trade name by utilizing the relief from royalty
method under a discounted cash flow model. We assess qualitative factors to determine if it is more likely than not that the fair value
of our indefinite-lived intangible assets are less than their carrying value. We compare the fair value of the indefinite-lived intangible
asset with its carrying value if the qualitative factors indicate it is more likely than not that the fair value of the asset is less
than its carrying value or if we decide to bypass the qualitative assessment. We record an impairment loss if the carrying value of the
indefinite-lived intangible assets exceeds the fair value of the assets for the difference in the values. We use a discounted cash flow
model, and, in certain cases, a market value approach is also utilized to supplement the discounted cash flow model to