Company: ATLN
Filing Date: 2025-01-24
Form Type: 424B3
Source: 0001213900-25-006537
Chunk: 82

Company: ATLANTIC INTERNATIONAL CORP.
Filing Date: 2025-01-24
Form: 424B3
Chunk 82
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termbest interests. The Jackson Notes include covenants limiting or restricting, among other things, our ability to: •incur or guarantee additional indebtedness; •pay distributions on, redeem or repurchase shares of our capital stock or redeem or repurchase any of our subordinated debt; •make certain investments; •sell assets; •enter into agreements that restrict distributions or other payments from our restricted subsidiaries; 34 •incur or allow the existence of liens; •consolidate, merge or transfer all or substantially all of our assets; and •engage in transactions with affiliates. In addition, the Jackson Notes contain financial covenants including, among other things, a fixed charge coverage ratio, minimum liquidity requirements and total leverage ratio. A breach of any of these financial covenants could result in a default under the Jackson Notes. If any such default occurs, Jackson may elect to declare all outstanding borrowings, together with accrued interest and other amounts payable thereunder, to be immediately due and payable, which would adversely impact our financial condition and operations. In addition, following an event of default under the Jackson Notes, Jackson will have the right to proceed against the collateral granted to it to secure the debt, which includes our available cash. If the debt under the Jackson Notes were to be accelerated, we cannot assure you that our assets would be sufficient to repay in full our debt. As a condition to completing the Merger, Staffing 360 is required to deliver a Conversion Agreement and Waiver pursuant to which all outstanding indebtedness of approximately $10.1million will be converted into 5.6million shares of Series I Preferred Stock, exchangeable for 5,600,000shares, subject to adjustment, of Atlantic International common stock pursuant to the terms of the Merger Agreement, upon completion of the Merger and all outstanding interest will be waived. We review the recoverability of goodwill and other indefinite lived intangible assets annually as of the first day of our fiscal fourth quarter, and whenever events or circumstances indicate that the carrying value of a reporting unit, including goodwill, or an indefinite lived intangible asset may not be recoverable. To evaluate goodwill and other indefinite lived intangible assets for impairment, we may use qualitative assessments to determine whether it is more likely than not that the fair value of a reporting unit, including goodwill, or an indefinite lived intangible asset is less than its carrying amount. The qualitative assessments require assumptions to be made regarding multiple factors, including the current operating environment, historical and future financial performance and