Company: SWAGW
Filing Date: 2025-02-11
Form Type: 10-Q
Source: 0001213900-25-011872
Chunk: 51

Company: Stran & Company, Inc.
Filing Date: 2025-02-11
Form: 10-Q
Item: Part I, Item 1
Chunk 51
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 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; 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 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) the Company was required to meet certain minimum net worth thresholds at December 31, 2021, December
31, 2022 and 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