Company: SWAGW
Filing Date: 2025-02-11
Form Type: 10-Q
Source: 0001213900-25-011872
Chunk: 49

Company: Stran & Company, Inc.
Filing Date: 2025-02-11
Form: 10-Q
Item: Part I, Item 1
Chunk 49
---
 as provided in the Security Agreement, dated November 22, 2021, between Salem Five
Cents and the Company (the “Security Agreement” and together with the Initial Loan Agreement and the Demand Note, the “Loan
Documents”), and as described below. Under a Commercial Loan Modification Agreement, dated as of February 12, 2024, between Salem
Five Cents and the Company (the “Loan Modification Agreement”), certain terms of the Initial Loan Agreement were modified
as of February 12, 2024, as described below.

The amount available
under the Revolving Line of Credit was the lesser of $7.0 million or the sum of (x) eighty percent (80.0%) of the then-outstanding amount
of Eligible Accounts (as defined below), plus (y) fifty percent (50.0%) of Eligible Inventory (as defined below); minus one hundred (100.0%)
percent of the aggregate amount then drawn under the Revolving Line of Credit for the account of the Company. In addition, advances based
upon Eligible Inventory were required to be capped at all times at $2.0 million. “Eligible Accounts” was defined as accounts
that meet a number of requirements, including, unless otherwise approved by Salem Five Cents, being less than 90 days from the date of
invoice not subject to any prior assignment, claim, lien, or security interest, not subject to set-off, credit, allowance or adjustment
by the account debtor, arose in the ordinary course of the Company’s business, not an intercompany obligation, not subject to notice
of bankruptcy or insolvency of the account debtor, not owed by an account debtor whose principal place of business was outside the United
States, not a government account, not be evidenced by promissory notes, and not one of the accounts owed by an account debtor 25% or
more of whose accounts were 90 or more days past invoice date; or otherwise not deemed acceptable by Salem Five Cents in accordance with
its normal credit policies. “Eligible Inventory” was defined as all finished goods, work in progress and raw materials and
component parts of inventory owned by the Company. Eligible Inventory did not include any inventory held on consignment or not otherwise
owned by the Company; any inventory which had been returned by a customer or was damaged or subject to any legal encumbrances other than
a first priority security interest held by the Company; any inventory which was