Company: ATLN
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001605888-25-000031
Chunk: 178

Company: ATLANTIC INTERNATIONAL CORP.
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 2
Chunk 178
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 the Company.

Income Tax (Expense)/Benefit

Provision for income taxes for the three and six months ended June 30, 2025 and 2024 were as follows:

Three Months EndedJune 30,Six Months EndedJune 30,2025202420252024Income tax (expense)/benefit$(9,618)$17,221,979 $(19,235)$18,512,574 

Income tax (expense)/benefit for the three months ended June 30, 2025 and 2024 was $(9,618) and $17,221,979, respectively. The change between the periods was primarily due to the establishment of a valuation allowance on the Company’s deferred tax assets, initially recorded during the fourth quarter of 2024.

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Income tax (expense)/benefit for the six months ended June 30, 2025 and 2024 was $(19,235) and $18,512,574, respectively. The change between the periods was primarily due to the establishment of a valuation allowance on the Company’s deferred tax assets, initially recorded during the fourth quarter of 2024.

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Liquidity & Capital Resources

Atlantic’s working capital requirements are primarily driven by personnel payments and client accounts receivable receipts. As receipts from client partners lag behind payments to personnel, working capital requirements increase substantially in periods of growth.

Atlantic’s primary sources of liquidity have historically been cash generated from operations and borrowings under its previous Revolver. The Company entered into a new revolving credit facility (the “New Revolving Credit Facility”) on April 29, 2025. Atlantic’s primary uses of cash are payments to engagement personnel, corporate personnel, related payroll costs and liabilities, operating expenses, capital expenditures, cash interest, cash taxes, and debt payments. Atlantic believes that the cash generated from operations, together with the borrowing availability under the New Revolving Credit Facility is sufficient to meet its normal working capital needs for at least the 12-month period following the issue date of its financial statements, including investments made, and expenses incurred, in connection with opening new markets throughout the next year. Atlantic’s ability to continue to fund these items may be affected by general economic, competitive and other factors, many of which are outside of Atlantic’s control. If Atlantic’s future cash flow from operations and other capital resources are insufficient to fund its liquidity needs, Atlantic may be forced to obtain additional debt or equity capital or refinance all or a portion of its debt.

In accordance with