Company: ATLN
Filing Date: 2025-02-28
Form Type: 8-K
Source: 0001213900-25-018768
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Company: ATLANTIC INTERNATIONAL CORP.
Filing Date: 2025-02-28
Form: 8-K
Item: Item 1.02
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Item 1.02 Termination of a Material Definitive Agreement

On February 26, 2025, Atlantic International Corp.
(“ Atlantic,” or the “ Company”) sent a notice of termination to Staffing 360 Solutions Inc. (“ STAF”)
pursuant to the terms and conditions of the Agreement and Plan of Merger by and among the Company, A36 Merger Sub, Inc. and STAF, dated
as of November 1, 2024, as amended as of January 7, 2025 (the “ M/A”). There was no material relationship between the Company
and its affiliates and STAF other than in respect of the M/A. A copy of the M/A and of Amendment No. 1 to the M/A have been filed as exhibits
with the SEC as set forth in Item 9.01 below and are incorporated herein by reference.

Section 8.1(b) of the M/A, provides for termination
in the event of a material breach by STAF of any covenant or agreement in the M/A which cannot be cured earlier than thirty (30) days
after written notice or the March 31, 2025 Termination Date.

Section 3.2(e) of the M/A required STAF to execute
and/or deliver: “a signed agreement between the Internal Revenue Service and Company [i. e., STAF] concerning the terms of settlement mutually agreeable to Atlantic.” (Emphasis Added) Without the Company’s
knowledge, STAF entered into agreements with the Internal Revenue Service that were not agreeable to Atlantic. STAF has materially failed
to satisfy the terms of Section 3.2(e) and has done so in a manner that cannot be cured. Accordingly, pursuant to the above-stated Section
8.1(b), this was a material breach of the covenant and agreement set forth in Section 3.2(e) of the M/A to deliver: “a signed agreement
between the Internal Revenue Service and Company [i. e., STAF] concerning the terms of settlement mutually agreeable to Atlantic.”

Finally, STAF has failed to demonstrate compliance
under 4.2 of the M/A, namely to (i) operate the Business in the ordinary course in all material respects and (ii) use commercially
reasonable efforts to preserve intact the business organization, assets, properties and material business relations of the Company, both
as reflected by STAF’s failure to satisfy its obligations and maintain its material