Item 2. Unregistered Sales of Equity Securities
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None
Item 3. Defaults Upon Senior Securities.
SPP Credit Advisors LLC and Rick Arrowsmith v. Atlantic International Corp et al. In the Court of Chancery of The State of Delaware (Case No. 2026-0448-JTL)
As previously reported in our Form 10-K for December 31, 2025, on April 2, 2026, Rick Arrowsmith, on behalf of SPP, and in response to the Company’s and its Lyneer Subsidiaries’ commencement on the same day of a lawsuit against SPP, commenced a lawsuit in the Court of Chancery of the State of Delaware against the Company, its’ officers and former officers, based on the unfounded alleged events of default, the plaintiff, appointed by SPP to take managerial control of the Lyneer subsidiaries. The plaintiff is seeking declaratory relief that he was able to remove all officers of the Company and is entitled to declaratory, preliminary and permanent injunctive relief to take control of the Company.
On April 27, 2026, the Court entered a Status Quo Order (the “Order”). The Order controls the governance and management of the Lyneer Subsidiaries pending (a) a final disposition of the matter, or (b) an order that expressly modifies or supersedes the Order. The Order requires Lyneer to operate in the ordinary course of business (as defined) and to provide Mr. Arrowsmith with certain current financial statements as reasonably requested.
SPP Lyneer Term Note Default Notice
On March 30, 2026, SPP notified Atlantic and Lyneer that certain events of default have occurred and are continuing under the Financing Agreement. SPP asserted that the events of default related to our failure to satisfy certain financial and non-financial covenants under the Financing Agreement of the Term Note By letter dated April 30, 2026, SPP notified Atlantic and Lyneer that certain additional Events of Default had occurred, specifically as a result of (i) various Events of Default set forth in a statement from SLR to Lyneer Staffing dated April 17, 2026 (the “SLR Default”) as described below, and (ii) Certain payments made to or for the benefit of Atlantic.
SPP has attempted to exercise its pledge and has sought to try to replace the management of Lyneer. The company believes it has meritorious defense to the claims of SPP and, as described above, has commenced a lawsuit to contest SPP’s actions.
SPP Credit Agreement Default Notice
Simultaneously with the default letter under the Financing Agreement as described above, SPP notified the Company of certain events of default under (a) the Credit Agreement, dated June 18, 2024, and (b) the Pledge and Security Agreement dated as of June 18, 2024. By letter dated April 30, 2026, SPP notified Atlantic and Lyneer of certain additional Events of Default, specifically, as a result of (i) various Events of Default described in the above-described SLR Letter, (ii) various Events of Default described in the Default Notice dated March 30, 2026 from SPP to Lyneer, and (iii) permitting a subsidiary of Atlantic to make certain payments to or for the benefit of Atlantic.
The Company believes it has meritorious defenses to the claims of SPP and, as previously reported, has commenced a lawsuit to contest SPP’s actions.
Item 4. Mine Safety Disclosures.
Not applicable.
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.