Company: ATLN
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001605888-25-000055
Chunk: 65

Company: ATLANTIC INTERNATIONAL CORP.
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 1
Chunk 65
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, waived all existing events of default as of the date of the agreement and agreed to forbear from exercising its rights and remedies with respect to such events of default under the Term Note through September 30, 2024.  The Initial Capital Raise milestone and the uplisting milestone dates were subsequently extended to September 30, 2025, or later as agreed to between the parties. As of September 30, 2025, and December 31, 2024, the Company has deconsolidated the Term Note, as discussed above; therefore, the Company recognized liability balances of $0, and $0, respectively. The Term Note obligation is joint-and-several with IDC and is fully covered by the Allocation Agreement with IDC discussed above. On April 28, 2025, the Term Note lender foreclosed on IDC’s remaining 21,983,926 shares of Atlantic International Corp. common stock.  This foreclosure was only related to IDC’s security provided to the lender under the Term Note and did not extend to the Company. The Company is reviewing the implications of the foreclosure on the Company’s obligations under the Term Note.   

14

The Term Note contains certain customary financial and non-financial covenants that the Company is required to comply with. The Company is in default of the Term Note. Seller NotesAs part of the purchase price consideration for the Transaction, the Company and IDC as co-borrowers issued various Seller Notes to former owners totaling $15,750,000. Payments on the Seller Notes are due in quarterly installments of $1,575,000, and $3,150,000 due at their amended maturity date of April 30, 2024, and bear interest at an amended fixed rate of 11.25% per annum. Payments to Seller Notes debt holders was prohibited by the administrative agent of the previous lender under the Revolver and the current Revolver.  As provided in the inter-creditor agreement between SLR and the Seller Note holders, Lyneer is prevented from making payments and the Seller Note holder are prevented from accepting payments from Lyneer.As of September 30, 2025, and December 31, 2024, the Company has deconsolidated the Seller Notes, as discussed above; therefore, the Company’s recognized liability balances of  $0 and $0, respectively. The Seller Notes obligation is joint-and-several with IDC and is fully covered by the Allocation Agreement with IDC discussed above. The Company is in default of