Company: ATLN
Filing Date: 2025-01-23
Form Type: S-4/A
Source: 0001213900-25-006032
Chunk: 483

Company: ATLANTIC INTERNATIONAL CORP.
Filing Date: 2025-01-23
Form: S-4/A
Chunk 483
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 and conditions of the Merger are more fully set forth in the Merger Agreement and it is our understanding that the Company, contingent upon Board approval, intends to enter into the Merger Agreement on or before November 1, 2024. According to the Company’s 10 -Qfiling for the period ended September 28, 2024 the Company faces serious liquidity issues and indebtedness. The Company’s consolidated financial statements as of September 28, 2024 show an accumulated deficit of roughly $133.6 million and a working capital deficit of roughly $48.0 million. Total gross debt as of September 20, 2024 was roughly $19.6 million and cash on hand was approximately $813 thousand. The 10 -Qfiling as of September 28, 2024 assume that the Company will continue as a going concern but note that the going concern assumption relies upon no material, adverse developments in the Company’s business, liquidity, and capital requirements, and that the Company’s credit facilities with its lender will remain available to the Company. A large component of the Company’s indebtedness consists of $10.116 million in notes (the “Jackson Notes”) issued to Jackson Investment Group, LLC “Jackson”) which are due and payable on January 13, 2025. The Company is currently not in compliance with the covenants included in the Jackson notes. As part of the proposed Merger, the Jackson Notes will convert to a total of 4.0 million shares of Parent Common Stock under one of two possible scenarios. Under one scenario, the Jackson Notes converts to a certain number of Preference Shares of Company Stock, which then converts to 3.399 million shares of Parent Common Stock. Under this scenario, Jackson also receives 500,000 Inducement Shares of Company Common Stock which, at a 1.2021 exchange ratio, converts to 601,602shares of Parent Common Stock. Under the second scenario, Jackson receives a certain number of Preference Shares of Company Stock which convert to 4.0 million shares of Parent Common Stock 2. Additionally, in accordance with the Merger Agreement, Parent will pay to Company $5,500,000 at Closing for the sole purpose of repaying indebtedness. Scope On November 7, 2023, the Board of Directors of the Company (the “Board”) engaged Cornerstone Valuation as its financial advisor to evaluate certain proposed transactions involving the Company and to render a Fairness Opinion, should one of those proposed