Company: ATLN
Filing Date: 2025-05-14
Form Type: 10-Q
Source: 0001605888-25-000019
Chunk: 113

Company: ATLANTIC INTERNATIONAL CORP.
Filing Date: 2025-05-14
Form: 10-Q
Item: Part I, Item 8
Chunk 113
---
 common stock is then listed on a National Stock Exchange. An event of default under the Merger Note may result in an additional event of default under the Revolver and our other indebtedness for borrowed funds.On September 12, 2024 the Company entered into Amendment No 1 to the Convertible Promissory Note (“Amendment 1 to the Merger Note”) which extended the maturity date to the earlier of March 31, 2026 or the completion of at least a $40 million capital raise. Amendment 1 to the Merger Note was treated as a modification after the Company’s analysis according to ASC 470 and as such, the Company is deferring the $300,000 amendment fee and will amortize as an adjustment to interest expense over the remaining term using the effective interest method.On April 29, 2025, the Company entered into an Amended and Restated Convertible Promissory Note  which extended the maturity date to the earlier of March 31, 2027 or the completion of at least a $40 million capital raise. See Note 18: Subsequent Events for further discussion.Debt Allocation AgreementLyneer and IDC entered into a debt allocation agreement (the “Allocation Agreement”) dated as of December 31, 2023, which specifies and allocates responsibility for repaying (or refinancing) the joint-and-several debts between Lyneer and IDC. The Company reassessed its accounting for joint-and-several liabilities under ASC 405-40 as of the Merger date and concluded it is reasonably probable that IDC can repay their portion of the debt allocated per the Allocation Agreement. As a result, the Company deconsolidated it’s joint and several debt obligations.Subsequent to the executed amendments of the Company’s debt obligations described herein, the future minimum principal payments on the Company’s outstanding debt are as follows: March 31, 2025Remainder of 2025$30,114,104 202636,950,000 2027— 2028— 2029— Thereafter— Total$67,064,104 Interest ExpenseThe Company recognized total interest expense of $1,284,822 and $5,022,230 during the three months ended March 31, 2025, and 2024. $48,913 and $305,250 of deferred financing costs were recognized as a component of “interest expense” on the accompanying unaudited condensed consolidated statements of operations for the three months ended