Company: ATLN
Filing Date: 2025-03-28
Form Type: 10-K
Source: 0001605888-25-000006
Chunk: 143

Company: ATLANTIC INTERNATIONAL CORP.
Filing Date: 2025-03-28
Form: 10-K
Item: Item 8
Chunk 143
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 share in our Initial Capital Raise, provided, however, that the number of shares of our common stock issuable upon conversion of the Merger Note will not exceed 19.99% of the number of our outstanding shares of common stock without shareholder approval. An event of default under the Merger Note may result in an additional event of default under the Revolver and our other indebtedness for borrowed funds.On September 12, 2024 the Company entered into Amendment No 1 to the Convertible Promissory Note (“Amendment 1 to the Merger Note”) which extended the maturity date to the earlier of March 31, 2026 or the completion of at least a $40 million capital raise. Amendment 1 to the Merger Note was treated as a modification after the Company’s analysis according to ASC 470 and as such, the Company is deferring the $300,000 amendment fee and will amortize as an adjustment to interest expense over the remaining term using the effective interest method.Debt Allocation AgreementLyneer and IDC entered into a debt allocation agreement (the “Allocation Agreement”) dated as of December 31, 2023, which specifies and allocates responsibility for repaying (or refinancing) the joint-and-several debts between Lyneer and IDC. The Company reassessed its accounting for joint-and-several liabilities under ASC 405-40 as of the Merger date and concluded it is reasonably probable that IDC can repay their portion of the debt allocated per the Allocation Agreement. As a result, the Company deconsolidated it’s joint and several debt obligations.Subsequent to the executed amendments of the Company’s debt obligations described herein, the future minimum principal payments on the Company’s outstanding debt are as follows:As of December 31, 2024Remainder of 2024$— 202543,883,379 202636,950,000 2027— 2028— Thereafter— Total$80,833,379 

60

Interest ExpenseThe Company recognized total interest expense of $12,004,860 and $17,538,816 during the years ended December 31, 2024 and 2023, respectively. $594,275 and $673,322 of deferred financing costs were recognized as a component of “interest expense” on the accompanying consolidated statements of operations for the years ended December 31, 2024 and 2023, respectively.

Note 9: Accrued Expenses and Other Current Liabilities