Company: SWAGW
Filing Date: 2025-08-12
Form Type: 10-Q
Source: 0001213900-25-074995
Chunk: 67

Company: Stran & Company, Inc.
Filing Date: 2025-08-12
Form: 10-Q
Item: Part I, Item 1
Chunk 67
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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 to which goodwill is assigned 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.

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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.

We assess the impairment of long-lived