Company: SWAGW
Filing Date: 2025-02-11
Form Type: 10-Q
Source: 0001213900-25-011877
Chunk: 60

Company: Stran & Company, Inc.
Filing Date: 2025-02-11
Form: 10-Q
Item: Part I, Item 1
Chunk 60
---
ordinated 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 less cash taxes, distributions,
dividends, shareholder withdrawals in any form, and unfinanced CAPEX divided by all scheduled principal payments on all debt plus cash
interest payments made on all debt; and (b) Minimum Net Worth thresholds: The Company was required to meet the following minimum
net worth thresholds: $2,000,000 at December 31, 2021, $2,750,000 at December 31, 2022, and $3,500,000 at December 31, 2023.

Following the date of the Loan
Modification Agreement, the Revolving Line of Credit was no longer subject to the
Company’s compliance with the Debt Service Coverage Ratio and the Minimum Net Worth terms described above. Instead, the Company
was required to meet the following financial requirements:

●The Company was required to maintain a “Minimum Interest Coverage” of 1.25:1, tested for fiscal
year ending December 31, 2024 only, and defined as follows: EBITDA (as defined below), divided by cash interest payments made on all debt.
“EBITDA” was defined as the 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”).

38

●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