Company: SWAGW
Filing Date: 2025-02-11
Form Type: 10-Q
Source: 0001213900-25-011872
Chunk: 267

Company: Stran & Company, Inc.
Filing Date: 2025-02-11
Form: 10-Q
Item: Part II, Item 8
Chunk 267
---
 and cash
flows will be affected.

We believe that the assumptions and estimates
associated with the valuation of goodwill and intangible assets and contingent earn-out liabilities have the greatest potential impact
on our financial statements. Therefore, we consider these to be our critical accounting policies and estimates. For further information
on all of our significant accounting policies, see the notes to our financial statements beginning on page 1 of this Quarterly Report
on Form 10-Q.

Valuation of Goodwill and Intangible Assets

We perform an annual impairment review of our
goodwill during the fourth fiscal quarter of each year, and more frequently if we believe indicators of impairment exist. The process
of evaluating the potential impairment of goodwill is highly subjective and requires significant judgment. To review for impairment,
we first assess qualitative factors to determine whether events or circumstances lead to a determination that it is more likely than
not that the fair value of our reporting unit is less than its carrying amount. Our qualitative assessment of the recoverability of goodwill,
whether performed annually or based on specific events or circumstances, considers various macroeconomic, industry-specific and company-specific
factors. These factors include: (i) severe adverse industry or economic trends; (ii) significant company specific actions; (iii) current,
historical or projected deterioration of our financial performance; or (iv) a sustained decrease in 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 unit is greater than its carrying amount, no further assessment is performed. If we determine that it is more
likely than not that the fair value of our reporting unit is less than its carrying amount, we calculate the fair value of that reporting
unit and compare the fair value to the reporting unit’s net book value.

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