Company: ATLN
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001605888-25-000055
Chunk: 120

Company: ATLANTIC INTERNATIONAL CORP.
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 8
Chunk 120
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 Note, Seller Notes and Earnout Notes below for those joint-and-several debts that are applicable to the Allocation Agreement. At September 30, 2025, such indebtedness totaled approximately $70,373,516.RevolverThe Company maintained a Revolver as a co-borrower with IDC with an initial available borrowing capacity of up to $125,000,000, when originally executed in 2022. The facility was partially used to finance the acquisition of Lyneer Investments by IDC in August 2021, with additional borrowing capacity available under the Revolver to finance 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 September 30, 2025 was 8.50% per annum.The New Revolving Credit Facility matures on April 29, 2028, unless the lender, at