Company: ATLN
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001605888-25-000055
Chunk: 64

Company: ATLANTIC INTERNATIONAL CORP.
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 1
Chunk 64
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 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 September 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 September 30, 2025, and December 31, 2024, the Company has recognized liability balances on the New Revolving Credit Facility and the Revolver of $38,363,904 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 September 30, 2025 was $342,712.Term NoteOn August 31, 2021, the Company and IDC as co-borrowers entered into a Term Note in the amount of $30,300,000. The proceeds of this loan were primarily used to finance the acquisition of Lyneer by IDC in August 2021. The Term Note matures on February 28, 2026, at which time all outstanding balances are due and payable. There are no scheduled principal payments on the Term Note prior to its maturity date. The Term Note is subordinated to the Revolver and bears an initial stated rate of 14% per annum.On August 12, 2024, the Company entered into the Tenth Amendment and with its lender, under which the lender