Company: ATLN
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001605888-25-000031
Chunk: 130

Company: ATLANTIC INTERNATIONAL CORP.
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 8
Chunk 130
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 partial payment on the Put-Call Option Note. No additional payments have been received as of June 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 $173,737 for the three months ended June 30, 2025 and 2024, respectively and $0 and $347,766 for the six months ended June 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.Transactions with IDCThe Company and IDC are co-borrowers and jointly and severally liable for principal and interest payments under the previous Revolver, the term loan related to the previous Revolver, the Term Note, the Seller Notes and the Earnout Notes. In the case of certain of those obligations IDC generally makes certain interest and principal payments to the lenders and collects reimbursement from the Company. For interest payments of that nature, the Company recognizes interest expense when interest is incurred under the relevant loan agreement and a corresponding payable to IDC, which is subsequently removed from the Company’s consolidated balance sheet upon Company’s remittance of the reimbursement funds to IDC. Additionally, when principal payments are made by IDC the Company recognizes a reduction of the associated loan balance, with a corresponding increase in the payable to IDC which is then reduced upon the Company’s payment of funds to IDC.As a result of the Merger, the Company is required to file short-term income tax returns for the periods