Company: ATLN
Filing Date: 2025-06-23
Form Type: S-3
Source: 0001213900-25-056432
Chunk: 12

Company: ATLANTIC INTERNATIONAL CORP.
Filing Date: 2025-06-23
Form: S-3
Chunk 12
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 obligations are restructured,
the agreement of IDC to assume all but Lyneer’s $28,739,104 of the joint indebtedness is being given effect solely for accounting
purposes, although Lyneer will remain a joint and several obligor on such indebtedness and will be obligated to pay such indebtedness
if IDC does not do so.

In addition, under the Allocation
Agreement, IDC and Prateek Gattani, IDC’s Chief Executive Officer and our then Chairman of the Board, have agreed for IDC to work
with Lyneer to implement a plan to refinance or otherwise satisfy the Assumed Debt for which Lyneer is currently jointly and severally
liable with IDC so that Lyneer will be obligated for only its portion under the facility. Lyneer has entered into a new revolving credit
facility that will be supportable by Lyneer’s stand-alone borrowing base. The new credit facility provides credit availability to
Lyneer of up to $70,000,000 and will replace Lyneer’s remaining obligations under the existing revolving credit facility. However,
there can be no assurance that Lyneer will be able to support its continuing indebtedness, to generate revenues sufficient in amount to
enable us to pay our indebtedness under the Merger Note, or to repay or refinance any such indebtedness when due. Lyneer’s failure
to comply with its obligations under its existing indebtedness following the Merger, or to repay or refinance such indebtedness when due,
including our indebtedness under the Merger Note, would likely have a material adverse impact on our financial condition and long-term
viability.

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Lyneer will remain jointly and severally liable for the Assumed Debt until such indebtedness is restructured to remove Lyneer as an obligor or such indebtedness is paid in full.

As described in the previous
risk factor, notwithstanding the deconsolidation of debt for accounting purposes, Lyneer remains legally jointly and severally liable
as a co-borrower with IDC on all loan arrangements for which they are now jointly liable until such time as such loan arrangements are
paid in full. The assets of Lyneer have been pledged to the new lender under the new ABL credit facility and, in connection with the closing
of the Merger, were pledged to the lender under the term loan our equity interests in Lyneer, our sole operating subsidiary, as collateral
for