Atlantic International (ATLN) Registration filing summary

Company overview and business model

• Completed acquisition of Lyneer Investments LLC, a national workforce solutions firm, in June 2024, shifting focus from life sciences to staffing and workforce management services.

• Lyneer operates over 100 locations in the U.S., providing temporary, permanent, and managed staffing solutions across multiple verticals including finance, IT, legal, light industrial, and medical.

• The business model emphasizes proactive recruitment, scalable solutions, and technology-driven workforce management, targeting both SMBs and large national clients.

• Lyneer’s client base includes blue-chip companies, with one client accounting for 16% of 2023 revenue; contracts are typically short-term and cancellable on short notice.

• The company plans to pursue an aggressive M&A strategy, focusing on high-margin, high-growth verticals such as healthcare and financial services.

Financial performance and metrics

• Lyneer generated $401.4 million in revenue and $5.4 million in adjusted EBITDA in 2023, but reported a net loss of $15.3 million for the year.

• For Q1 2024, revenue was $100.6 million (up 2.6% YoY), but gross profit margin declined to 10.6% from 12.0% due to lower-margin business and higher costs.

• Interest expense increased significantly to $17.5 million in 2023 (up 75% YoY), driven by higher rates and amendments to debt agreements.

• As of March 31, 2024, Lyneer had $135.4 million in debt, with all debt classified as current due to covenant breaches and forbearance agreements.

• Cash flow from operations was negative $9.1 million in 2023, with cash and equivalents at $1.35 million at year-end.

Use of proceeds and capital allocation

• No proceeds will be received from this offering; all shares are being sold by existing shareholders.

• The company must raise at least $20 million in new capital by July 15, 2024, and restructure or refinance debt by September 30, 2024, to avoid default.

• Proceeds from any future capital raises are expected to be used to repay or refinance outstanding debt, including a $35 million Merger Note due September 30, 2024.