Company: ATLN
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001605888-25-000055
Chunk: 68

Company: ATLANTIC INTERNATIONAL CORP.
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 1
Chunk 68
---
% for the period from August 1, 2024, through July 31, 2025. The Company is in negotiations with the lender to extend the agreement for two years and the lender has agreed to waive default. In any event, the Company is in negotiations to extended the Promissory Note and is confident that it will be extended at least through December 31, 2025. Merger NoteIn connection with the closing of the Merger, we issued to IDC the Merger Note in the principal amount of $35,000,000 with an original maturity date of September 30, 2024. The Merger Note does not bear interest and is not convertible prior to an event of default under the Merger Note. If an event of default should occur under the Merger Note, the Merger Note will bear interest at the rate of 7% per annum commencing upon the date of such event of default and will be convertible into shares of our common stock at a price per share that equals the lowest daily volume weighted average price per share (VWAP) during the five trading days immediately preceding the date on which the applicable conversion notice is delivered to us, but not less than 80% of the price per share in our Initial Capital Raise, provided, however, that the number of shares of our common stock issuable upon conversion of the Merger Note will not exceed 19.99% of the number of our outstanding shares of common stock without shareholder approval if our 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 and IDC entered into an Amended and Restated Convertible Promissory Note  which further extended the maturity date to the earlier of March 31, 2027 or