Note 6 — Goodwill and Intangible Assets

Impairment test

During the fiscal fourth quarters of both 2025 and 2024, we determined that triggering events occurred as a result of additional decline in operational estimates for franchises acquired, along with uncertainty for projected cash flows, and also further decreases in our stock price. Therefore, we performed quantitative impairment tests as of the first day of fiscal fourth quarters of both 2025 and 2024 for our reporting units with remaining goodwill and intangibles.

The fair value of each reporting unit was estimated using a weighing of the income and market valuation approaches. The income approach applied a fair value methodology to each reporting unit based on discounted cash flows. This analysis requires significant judgments, including estimation of future cash flows, which is dependent on internally developed forecasts of revenue and profitability, estimation of the long-term rate of growth for our business of 3% per year in revenues over a 10 year period, estimation of the useful life over which cash flows will occur, and determination of our carrying value of equity for the reporting unit being tested.

For the year ended 2025, the combined fair values for all reporting units were then reconciled to the aggregate market value of our shares of common stock on the date of testing. Based on our most recent impairment test, a total impairment charge of $6,911,770 was recorded, which included $6,181,134 for goodwill and $730,636 for intangible assets.

For the year ended 2024, a goodwill impairment charge of $787,438 was recorded. There was no impairment of intangibles recorded for the year ended December 31, 2024.

Additionally, following performance of the annual impairment test, we did not identify any events or conditions that make it more likely than not that an additional impairment may have occurred. Accordingly, no further impairment charges were recognized during the fiscal year ended December 31, 2025.

The gross carrying amount of goodwill as of December 31, 2025 and December 31, 2024 was $1,831,197 and $8,012,331, respectively.

Changes in the carrying amount of goodwill are as follows:

The components of purchased intangible assets were as follows:

The Company recorded $685,723 and $1,006,052 of amortization of the intangible assets during the years ended December 31, 2025 and December 31, 2024, respectively. The remaining estimated annual amortization expense is expected to be as follows: