Company: ATLN
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001605888-25-000055
Chunk: 76

Company: ATLANTIC INTERNATIONAL CORP.
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 1
Chunk 76
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 six months after issuance with the remaining 50% payable in six equal quarterly payments beginning on December 31, 2024 and continuing until the maturity date of June 30, 2026. The Put-Call Option Note provides for the acceleration of payment principal under certain conditions, including upon a change of control, as defined. The Put-Call Option Note bears interest at a stated annual interest rate of 5.25% which is payable quarterly in arrears commencing December 31, 2024. IDC may prepay the Put-Call Option Note at any time without premium or penalty. The Put-Call Option Note contains customary covenants. As part of the consummation of the Merger on June 18, 2024, IDC paid $2,000,000 to LMH as a partial payment on the Put-Call Option Note. No additional payments have been received as of September 30, 2025.

Note 14: Related Party TransactionsTransactions with Lyneer Management HoldingsLMH was a non-controlling member of the Company with a 10% ownership interest at December 31, 2023. Two of the Company’s officers, specifically its CEO and CFO, each owned 44.5% of LMH, respectively.On November 15, 2022, Lyneer and IDC as co-borrowers issued Year 1 Earnout Notes to LMH with total balances of $5,127,218. On January 16, 2024, Lyneer and IDC as co-borrowers issued Year 2 Earnout Notes to LMH with total balances of $2,013,041. On the date of the Merger, the Company deconsolidated this debt. Refer to Note 8: Debt for additional information.Interest expense incurred on the Earnout Notes to LMH totaled $0 and $174,058 for the three months ended September 30, 2025 and 2024, respectively and $0 and $347,766 for the nine months ended September 30, 2025 and 2024, respectively.On June 18, 2024 as part of the Merger, LMH entered into a $6,000,000 guarantee agreement with the PEO, replacing and cancelling the $6,000,000 letter of credit previously held by the lenders of the Revolver. This obligation was terminated on December 31, 2024.Transactions with IDCThe Company and IDC are co-borrowers