Company: ATLN
Filing Date: 2025-01-24
Form Type: 424B3
Source: 0001213900-25-006537
Chunk: 283

Company: ATLANTIC INTERNATIONAL CORP.
Filing Date: 2025-01-24
Form: 424B3
Chunk 283
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ventional Convertible Debt Instrument.” The Company accounts for convertible instruments (when it has determined that the embedded conversion options should not be bifurcated from their host instruments) in accordance with professional standards when “Accounting for Convertible Securities with Beneficial Conversion Features,” as those professional standards pertain to “Certain Convertible Instruments.” Accordingly, the Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Original issue discounts (“OID”) under these arrangements are amortized over the term of the related debt to their earliest date of redemption. The Company also records, when necessary, deemed dividends for the intrinsic value of conversion options embedded in preferred shares based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. ASC 815 -40provides that, among other things, generally, if an event is not within the entity’s control and could require net cash settlement, then the contract shall be classified as an asset or a liability. Stock-Based Compensation The Company accounts for stock -basedinstruments issued to employees in accordance with ASC Topic 718, “Compensation — Stock Compensation,” which requires companies to recognize in the statement of operations the grant -datefair value of stock options and other equity -basedcompensation issued to employees. The Company accounts for non -employeeshare -basedawards in accordance with ASU 2018 -07— Compensation — Stock Compensation (Topic 718), Improvements to Nonemployee Share -BasedPayment Accounting. Warrants The Company accounts for warrants as either equity -classifiedor liability -classifiedinstruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, “Distinguishing Liabilities from Equity” (“ASC 480”) and ASC 815, “Derivatives and Hedging” (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own ordinary shares, among other conditions for equity classification. This assessment, which requires the use of professional judgment,