Company: ATLN
Filing Date: 2025-05-14
Form Type: 10-Q
Source: 0001605888-25-000019
Chunk: 123

Company: ATLANTIC INTERNATIONAL CORP.
Filing Date: 2025-05-14
Form: 10-Q
Item: Part I, Item 8
Chunk 123
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 effective tax rates 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.As of March 31, 2025, the Company maintained a valuation allowance against all of its deferred tax assets for which realization cannot be considered more likely than not at this time. Management assesses the need for the valuation allowance on a quarterly basis. In assessing the need for a valuation allowance, the Company considers all positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies, and past financial performance.

20

Note 17: Earnings per ShareThe following table summarizes the computation of basic and diluted net loss per share:Three Months EndedMarch 31,20252024Numerator:Net loss$(10,744,185)$(4,866,844)Denominator:Weighted average common shares outstanding, basic and diluted53,975,57525,423,729Net loss per share, basic and diluted$(0.20)$(0.19)Excluded anti-dilutive shares5,008,26813,825

Note 18: Subsequent EventsThe Company has evaluated subsequent events through May 9, 2025, as detailed below.New ABL LenderOn April 29, 2025, 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”). The Loan Agreement replaced Lyneer’s prior senior secured revolving credit facility provided by BMO Bank, N.A. (“BMO”). Lyneer’s current lender funded the shortfall of $6,000,000, the portion of the joint and several debt  owed to BMO by IDC, and IDC and Lyneer has entered into a term loan with BMO for this amount, plus a $1,000,000 exit fee. BMO has assumed 3,439,803 shares of Atlantic International Corp. previously owned by IDC as collateral. Term NoteOn April 28, 2025, the Term Note lender foreclosed on IDC’s remaining 21,983,926 shares of Atlantic International Corp. stock and intends to sell these shares to pay off the Term Note.Merger Note AmendmentIn connection with the loan transaction described above, the Company and IDC amended a convertible promissory note,