Company: ATLN
Filing Date: 2025-05-14
Form Type: 10-Q
Source: 0001605888-25-000019
Chunk: 110

Company: ATLANTIC INTERNATIONAL CORP.
Filing Date: 2025-05-14
Form: 10-Q
Item: Part I, Item 8
Chunk 110
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5, and December 31, 2024, the Company has recognized liability balances on the Term Note of $0, and $0, respectively.On August 12, 2024, the Company entered into the Tenth Amendment and with its lender, under which the lender, waived all existing events of default as of the date of the agreement and agreed to forbear from exercising its rights and remedies with respect to such events of default under the Term Note through September 30, 2024.  The Initial Capital Raise milestone and the uplisting milestone dates were subsequently extended to September 30, 2025, or later as agreed to between the parties. On April 28, 2025, the Term Note lender has foreclosed on IDC’s remaining stock of Atlantic International Corp. and intends to sell these shares to pay off the Term Note. See Note 18: Subsequent Events for further discussion.Additionally, the Term Note obligation is fully covered by the Allocation agreement with IDC, as discussed below.The Term Note contains certain customary financial and non-financial covenants that the Company is required to comply with.

13

Seller NotesAs part of the purchase price consideration for the Transaction, the Company and IDC as co-borrowers issued various Seller Notes to former owners totaling $15,750,000. Payments on the Seller Notes are due in quarterly installments of $1,575,000, and $3,150,000 due at their amended maturity date of April 30, 2024, and bear interest at an amended fixed rate of 11.25% per annum. The Seller Notes represent unsecured borrowings and are subordinated to the Revolver and to the Term Note.The Company has recognized Seller Note liability balances of $0 and $0 as of March 31, 2025, and December 31, 2024, respectively.Earnout NotesAs contingent consideration milestones are met in connection with the Transaction Agreement, the Company can elect to pay the obligation in cash or issue notes payable. During 2023, the Company and IDC as co-borrowers issued nine notes payable with an aggregate value of $0. Payments on each of the Earnout Notes are due in quarterly installments through their amended maturity date of January 31, 2025, and each note bears an amended stated interest rate of 11.25% per annum. On January 16, 2024, the Company and IDC as co-borrowers issued six notes payable with an aggregate value of $6