Company: SWAGW
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001213900-25-044222
Chunk: 88

Company: Stran & Company, Inc.
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 2
Chunk 88
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 its security interest in all of the Company’s current and future assets.
Upon default of the Revolving Line of Credit, Salem Five Cents could accelerate repayment of the Revolving Line of Credit, take possession
of the Company’s assets, assign a receiver over the Company’s assets, and enforce other rights as to the Company’s assets
as secured creditor. The Company was required to pay for all of Salem Five Cents’ reasonable legal fees and expenses incurred to
enforce its rights under the Loan Documents.

31

Under the
Initial Loan Agreement, the Company was required to continue its current business of outsourced marketing solutions, and, without the
prior consent of Salem Five Cents, the Company could not acquire in whole or in part any other company or business or engage in any other
business or open any other locations. The Company was required to use the proceeds of the Revolving Line of Credit only in connection
with the general and ordinary operations of its business and for the following purpose: general working capital for accounts receivable
and inventory purchases.

The Revolving
Line of Credit was also subject to ongoing affirmative obligations of the Company, including: Making punctual repayment of the Revolving
Line of Credit amount; maintaining proper accounting books and records in accordance with the opinion of LMHS, P.C. or another Certified
Public Accountant acceptable to Salem Five Cents; allowing Salem Five Cents to inspect its accounting books and records; furnishing audited,
quarterly, monthly and other financial statements to Salem Five Cents; prior to the date of the Loan Modification Agreement, making payment
of Salem Five Cents’ reasonable expenses for a field exam in 2022; and following the date of the Loan Modification Agreement, making
payment of Lender’s reasonable expenses for a field exam in 2024; allowing Salem Five Cents to communicate with its accountants;
maintaining its properties in good repair subject to ordinary wear and tear; obtaining replacement-cost insurance for its property with
Salem Five Cents as Mortgagee/Loss Payee; causing management contracts for the Company’s properties to be subordinated to the rights
of Salem Five Cents; and allowing no change of property management company without the prior written consent of Salem Five Cents.

Prior to
the date of the Loan Modification Agreement, the Revolving Line of Credit was further subject to the following financial requirements:
(a) Debt Service Coverage Ratio: Cash flow to be calculated on an annual basis of at least 1.20 times EBITDA