Atlantic International Corporation
05/05/2025 | Press release | Distributed by Public on 05/05/2025 15:30
Financial Obligation, Regulation FD Disclosure, Management Change/Compensation (Form 8-K)
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On April 29, 2025, in consideration of the Loan Agreement (as defined in Item 2.03 below), and at the request of the Board of Directors, Prateek Gattani resigned as Chairman of the Board of directors of the Company, effective on the Restatement Closing Date (as defined under the Loan Agreement). The information contained in Item 2.03 is incorporated by reference herein.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
Amended and Restated Convertible Promissory Note
In connection with the loan transaction described hereinafter with North Mill Capital, LLC, the Company and IDC Technologies. Inc ("IDC") amended a convertible promissory note, originally issued on June 18, 2024 from the Company to IDC, in the principal amount of thirty-five million dollars ($35,000,000). By mutual agreement, the parties extended the Maturity Date (as defined) to March 31, 2027.
New ABL Lender
On April 29, 2025, Atlantic International Corp. (the "Company")'s subsidiary, Lyneer Staffing Solutions, LLC ("Lyneer") entered into a Loan and Security Agreement (the "Loan Agreement") providing for a $70 million senior secured revolving credit facility (the "New Revolving Credit Facility") with North Mill Capital, LLC, d/b/a SLR Business Credit, as lender ("SLR" or the "Lender").
The Loan Agreement replaced Lyneer's prior senior secured revolving credit facility (the "ABL") provided by BMO Bank, N.A. ("BMO"). The Loan Agreement provides for an initial maximum principal amount of $70 million available under the New Revolving Credit Facility. Upon the request of Borrower made at any time from and after the date hereof until the Termination Date (defined below), and so long as no Event of Default has occurred, Lender may, in its good faith reasonable discretion, make Advances to Borrower under a revolving credit facility in an amount up to ninety percent (90%) of the aggregate outstanding amount of Eligible Accounts, provided, however, in no event at any time shall the maximum aggregate principal amount outstanding under the Revolving Credit Facility exceed Seventy Million Dollars ($70,000,000.00).
Interest shall accrue on the Daily Balance at the per annum rate of one percent (1.00%) above the Prime Rate in effect from time to time, but not less than five and three quarters of one percent (5.75%) (the "Applicable Rate"). The Company's ability to obtain revolving credit advances under the Loan Agreement is contingent upon certain conditions, including the absence of a default under the Loan Agreement. Revolving credit loan proceeds may be used for general business purposes, including the acquisition of real estate and other permitted investments.
The Loan Agreement matures on April 29, 2028 ("Termination Date"), unless Lender, at its option, in writing agrees to extend the Term for a period of one (1) year from the then Termination Date. The Loan Agreement contains customary covenants for credit facilities of this type. The Loan Agreement also contains affirmative and negative covenants applicable to the Lyneer and some or all of its subsidiaries. The Loan is guaranteed by Lyneer Holdings, Inc. and Lyneer Investments, LLC. The Loan Agreement provides for certain customary events of default, including among others, non-payment of principal, interest or other amounts when due, inaccuracy of representations and warranties, violation of covenants, cross defaults with certain other indebtedness, insolvency or inability to pay debts, bankruptcy, or a change of control.
Junior lenders of Lyneer respecting certain joint and several debt entered into intercreditor agreements with the Lender regarding their respective rights and remedies. Lyneer's current lender funded the shortfall of six million dollars ($6,000,000), the portion owed to BMO by IDC on the ABL. BMO has assumed 3,439,803 shares of the Company previously owned by IDC as collateral. On April 28, 2025, the Term Note lender foreclosed on IDC's remaining 21,983,926 shares of the Company's stock.
The foregoing description of the Loan Agreement does not purport to be complete and is subject to, and qualified in its entirety by, reference to the Loan Agreement, which is attached hereto as Exhibit 10.1 and incorporated herein by reference.
Item 7.01 Regulation FD Disclosure
Atlantic International Corporation published this content on May 05, 2025, and is solely responsible for the information contained herein. Distributed via SEC EDGAR on May 05, 2025 at 21:31 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at support@pubt.io