ATLANTIC INTERNATIONAL CORP. 8-K

What Happened
Atlantic International Corp. (ATLN) announced on March 20, 2026 that it closed a securities purchase agreement raising $5,600,000 gross by selling 5,600 shares of a newly created Series B 5% Convertible Preferred Stock and issuing warrants to purchase an additional 5,600 preferred shares. Net proceeds were $5,565,000, which the company says will be used for working capital and general corporate purposes. The company filed a Certificate of Designations establishing the rights of the Preferred Stock.

Key Details

• Offering size: $5,600,000 gross; net proceeds $5,565,000.
• Preferred Stock: 5,600 shares of "Series B 5% Convertible Preferred Stock"; stated value $1,070 per share (reflects a 6.5% original issue discount). Dividend: 5.0% (payable in cash or additional preferred shares). Preferred ranks senior to common stock for dividends, redemption, distributions and liquidation.
• Conversion: Each Preferred may be converted into common stock equal to stated value divided by the Conversion Price. Initial Conversion Price = $4.38 (the common stock opening price on March 20, 2026), fixed for the first 30 calendar days; adjustments thereafter as provided in the Certificate. At the initial price, each preferred would convert into roughly 244 common shares (1,070 / 4.38 ≈ 244.3). Converting all 5,600 preferred shares would equal roughly 1.37 million common shares; if the 5,600 warrant shares are issued and converted as well, total potential common issuance would be roughly 2.7 million shares.
• Warrants: Issued to purchase 5,600 preferred shares at $1,000 per preferred share (subject to adjustment); exercisable in full or part up to 11 months from closing.
• Redemption and protections: Company may repurchase preferred (optional redemption) beginning 30 business days after closing at 110% of value with 30 days’ notice; holders retain conversion rights after notice. Purchaser has anti-dilution/participation rights to join up to 25% of subsequent financings for 24 months. Conversion protections apply on a Fundamental Transaction (e.g., sale or merger).
• Other: The Purchase Agreement includes customary representations, indemnities to the purchaser, and standard closing conditions.

Why It Matters
This financing provides Atlantic with immediate working capital but creates a class of preferred shares that are senior to common stock and potentially highly dilutive if converted. At the stated initial conversion price, each preferred share converts into a large number of common shares (approximately 244), so conversion and exercise of the warrants could materially increase the company’s common share count. Retail investors should watch for any future conversions, warrant exercises, subsequent financings, or company redemptions, as those events will affect dilution, voting power, and per-share metrics for existing common shareholders.