Company: SWAGW
Filing Date: 2025-03-07
Form Type: 10-Q
Source: 0001213900-25-021742
Chunk: 165

Company: Stran & Company, Inc.
Filing Date: 2025-03-07
Form: 10-Q
Item: Part I, Item 1
Chunk 165
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 our significant accounting policies, see the notes to our financial statements beginning on page 1 of this Quarterly Report
on Form 10-Q.

45

Valuation of Goodwill and Indefinite-Lived
Intangible Assets and Long-Lived Intangible Assets

We perform an annual impairment review of our
goodwill and indefinite-lived intangible assets 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 and indefinite-lived intangible assets 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 units are less than their carrying amounts.
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 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