Company: ATLN
Filing Date: 2025-05-14
Form Type: 10-Q
Source: 0001605888-25-000019
Chunk: 122

Company: ATLANTIC INTERNATIONAL CORP.
Filing Date: 2025-05-14
Form: 10-Q
Item: Part I, Item 8
Chunk 122
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uable pursuant to outstanding unvested or unexercised stock options, stock appreciation rights, restricted stock, restricted stock units, dividend equivalents, and other stock or cash based awards (collectively, “Awards”) granted under the Company’s Incentive Plan which became effective upon the consummation and completion of the Merger. Shares underlying any awards under the Incentive Plan that are forfeited, cancelled, held back to cover the exercise price or tax withholding, satisfied without the issuance of stock or otherwise terminated (other than by exercise) will be added back to the shares available for issuance under the Incentive Plan. The payment of dividend equivalents in cash shall not count against the share reserve.Restricted Stock UnitsThe Company granted 4,040,198 restricted stock units to employees under its Incentive Plan during the three months ended March 31, 2025. As of March 31, 2025, the Company had 4,161,161 unvested RSUs with a grant date fair value of $5.81.The following table summarizes the Company’s restricted stock activity consisting of RSUs: Shares Outstanding Weighted Average Grant Date Fair ValueOutstanding at December 31, 2024241,932$2.36 Granted4,040,198$5.91 Vested(120,969)$2.36 Unvested at March 31, 20254,161,161$5.81 Stock-based compensation expense included in the accompanying consolidated statements of operations was:Three Months EndedMarch 31,20252024Stock-based compensation expense$6,039,973 $— As of March 31, 2025, there was $18,387,815 of unrecognized stock-based compensation related to RSUs outstanding, which is expected to be recognized over a weighted-average remaining service period of less than one year.

Note 16: Income TaxesFor the three months ended March 31, 2025 and 2024, the Company recorded an income tax (expense)/benefit of $(9,617) and $1,290,595, respectively. The Company’s effective tax rate for the three months ended March 31, 2025 and 2024 was 0.1% and 21.0%, respectively. The effective tax rate for the three months ended March 31, 2025 differs from the statutory rate primarily as a result of having a full valuation allowance maintained against our deferred tax assets. The change in