Company: ATLN
Filing Date: 2025-01-23
Form Type: S-4/A
Source: 0001213900-25-006032
Chunk: 490

Company: ATLANTIC INTERNATIONAL CORP.
Filing Date: 2025-01-23
Form: S-4/A
Chunk 490
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 companies are riskier and that investors require a higher premium to hold them. The size premium represents average annual returns for small capitalization stocks minus average annual returns for large capitalization stocks. We consulted the Kroll data to estimate the size premium. Based on a market capitalization of $1.725 million as of October 25, 2024, Staffing 360 Solutions falls into Decile 10z in the Kroll database. The size premium in this category as of the date of this report was 10.73%. Cost of Equity Estimate (CAPM) Using the inputs discussed above, we estimated the Company’s cost of equity using the CAPM at 20.63%. Weighted Average Cost of Capital (WACC) Calculation Using our estimates for the cost of debt, the cost of equity and estimated debt/equity mix, we estimate the Company’s WACC at 18.79%, as shown below.

| Industry Average Capitalization (as of Sep. 28, 2024) |        |
|:------------------------------------------------------|:-------|
| Equity                                                | 82.3%  |
| Debt                                                  | 17.7%  |
| Total                                                 | 100.0% |

| Industry Debt/Equity Ratio | 17.7%   |
| STAF Debt/Equity Ratio     | 2254.0% |
| Selected Debt/Equity Ratio | 17.7%   |

WACC = % Debt * Cost of Debt * (1-Tax Rate) + % Equity * Cost of Equity

| Staffing 360 Solutions, Inc. WACC Estimate: | 18.79% |

| Value of Staffing 360 Solutions, Inc. Common Stock |

Annex B-9

Terminal Value Estimates We estimated the terminal value using two common approaches, the Perpetuity Growth Method (PGM) and the Exit Multiple Method (EMM). The PGM, which assumes that beyond the forecast period the firm will grow at a constant rate in perpetuity, extends the estimated terminal year cash flow one period at the estimated perpetuity growth rate, then capitalizes that cash flow. The EMM, however, assumes that at the end of the forecast period, the position in the investment will be exited. Therefore, to estimate a terminal value using the EMM, an analyst applies a market -basedtrading multiple to a terminal forecast year financial statistic, such as EBITDA. To estimate a terminal value using the PGM, we assumed