Company: ATLN
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001605888-25-000031
Chunk: 63

Company: ATLANTIC INTERNATIONAL CORP.
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 1
Chunk 63
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 the Company’s working capital. All the Company’s cash collections and disbursements were linked with bank accounts associated with the Lender and funded using the Revolver. These borrowings were determined by the Company’s availability based on a formula of billed and unbilled accounts receivable as defined in the loan agreement. On April 29, 2025, the Company’s subsidiary, Lyneer Staffing Solutions, LLC (“Lyneer”) entered into a Loan and Security Agreement (the “Loan Agreement”) providing for a $70 million senior secured revolving credit facility (the “New Revolving Credit Facility”). The Loan Agreement replaced Lyneer’s prior senior secured revolving credit facility provided by BMO Bank, N.A. (“BMO”). Lyneer’s previous lender funded the shortfall of $6,000,000, the portion of the joint and several debt  owed to BMO by IDC, and IDC and Lyneer entered into a term loan with BMO for this amount, plus a $1,000,000 exit fee. The $6,000,000 term loan and $1,000,000 exit fee are joint-and-several with IDC and is fully covered by the Allocation Agreement with IDC discussed above. BMO has assumed 3,439,803 shares of Atlantic International Corp. previously owned by IDC as collateral. The Company incurred $188,351 in issuance costs and, according to ASC 470 – Debt, is deferring these costs and will amortize as an adjustment to interest expense over the remaining term using the effective interest method.The interest rate on the New Revolving Credit Facility is calculated as 1.00% per annum above the Prime Rate, but not less than 5.75% per annum. The interest rate as of June 30, 2025 was 8.50% per annum.The New Revolving Credit Facility matures on April 29, 2028, unless the lender, at its option, in writing agrees to extend for a period of one year.As of June 30, 2025, and December 31, 2024, the Company has recognized liability balances on the New Revolving Credit Facility and the Revolver of $37,385,643 and $42,508,379, respectively.The New Revolving Credit Facility contains certain customary covenants, including affirmative and negative covenants. Total available borrowing capacity on the New Revolving Credit Facility as of June 30, 2025 was $7,832,330.Term NoteOn August