Company: ATLN
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001605888-25-000055
Chunk: 93

Company: ATLANTIC INTERNATIONAL CORP.
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 1
Chunk 93
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 operating activities$3,782,051 $(5,558,718)Net cash (used in) investing activities(44,495)(50,372)Net cash (used in) provided by financing activities(4,332,826)5,653,923 Net increase/(decrease) in cash and cash equivalents$(595,270)$44,833 

Operating Activities

Cash flows provided by (used in) operating activities for the nine months ended September 30, 2025 compared to the nine months September 30, 2024 was higher primarily due to a decrease in deferred income taxes and a decrease in accounts receivable from the prior year end, partially offset by a decrease in accrued expenses from the prior year end and an increase  in due from related parties.

Investing Activities

Cash used in investing activities for the nine months ended September 30, 2025 decreased compared to September 30, 2024 and consisted entirely of purchases of property and equipment.

Financing Activities

Cash (used in) provided by financing activities increased for the nine months ended September 30, 2025 compared to September 30, 2024 and consisted of borrowings and payments under the Company’s debt arrangements of the Revolver and the New Revolving Credit Facility.

Debt Allocation Agreement

Lyneer and IDC entered into a debt allocation agreement (the “Allocation Agreement”) dated as of December 31, 2023, which specifies and allocates responsibility for repaying (or refinancing) the joint-and-several debts between Lyneer and IDC. The Company reassessed its accounting for joint-and-several liabilities under ASC 405-40 as of the Merger date and concluded it is reasonably probable that IDC can repay their portion of the debt allocated per the Allocation Agreement. As a result, the Company deconsolidated it’s joint and several debt obligations. See Revolver (discussing the previous BMO Revolver), Term, Note, Seller Notes and Earnout Notes below for those joint-and-several debts that are applicable to the Allocation Agreement.

Revolver

Until April 29, 2025, as described below, the Company maintained the Revolver as a co-borrower with IDC with an available borrowing capacity of up to $60,000,000. The facility was partially used to finance the acquisition of Lyneer by IDC in August 2021, with additional borrowing capacity available under the Revolver to finance Lyneer’s working capital. All of Ly