Company: SWAGW
Filing Date: 2025-02-11
Form Type: 10-Q
Source: 0001213900-25-011877
Chunk: 104

Company: Stran & Company, Inc.
Filing Date: 2025-02-11
Form: 10-Q
Item: Part I, Item 2
Chunk 104
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 trailing year’s total of net income before total interest expense, tax expense, and depreciation
and amortization expense. EBITDA was required to be adjusted for extraordinary and/or non-cash items as defined in accordance with generally
accepted accounting principles in the United States (“GAAP”).

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●The Company was required to maintain a “Minimum Debt Service Coverage Ratio” of 1.20:1, tested
annually beginning with the fiscal year ending December 31, 2025, defined as follows: EBITDA, less cash taxes, distributions, dividends,
stockholder withdrawals in any form, and unfinanced capital expenditures (as defined below), divided by all scheduled principal payments
on all debt, plus cash interest payments made on all debt, plus cash payments made on contingent earn-out liabilities. “Unfinanced
capital expenditures” was defined as the current fiscal-year-end net fixed assets, plus current fiscal-year-end depreciation, less
prior fiscal-year-end net fixed assets, less the long-term debt increase.

●The Company’s “Ratio of Debt to Tangible Net Worth” was required not to exceed 1.50:1,
tested at financial year-end, defined as total liabilities divided by “tangible net worth,” defined as total assets, less
total liabilities, less intangible assets and amounts due from stockholder/related parties.

●The Company was required to maintain a “Minimum Liquidity” of $7.5 million at all times, defined
as cash and short-term investments, less rewards program liabilities.

The Company
also could not incur any additional indebtedness, secured or unsecured, except in the ordinary course of business; make loans or advances
to others or guarantee others’ obligations except for certain ordinary advances to employees or ordinary customer credit terms;
make investments; acquire any business; make capital expenditures except in the ordinary course of business; sell any material assets
except in the ordinary course of business; or grant any security interests or mortgages in its properties or assets. After the
date of the Loan Modification Agreement, any future contingent earn-out obligations were required to be subordinated to the Loan Documents.

In connection
with the Initial Loan Agreement, on November 22, 2021, the Company, Salem Five Cents and Harte Hanks Response Management/ Boston, Inc.
(the “Warehouse Provider”), the lessor of certain warehouse facilities to the Company, executed a Warehouseman’s Waiver
in favor of Salem Five Cents (the “Warehouseman’s Waiver”).