Company: ATLN
Filing Date: 2025-05-14
Form Type: 10-Q
Source: 0001605888-25-000019
Chunk: 79

Company: ATLANTIC INTERNATIONAL CORP.
Filing Date: 2025-05-14
Form: 10-Q
Item: Part I, Item 1
Chunk 79
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 months ended March 31, 2024.

Depreciation and Amortization

Depreciation and amortization expense for the three months ended March 31, 2025 and 2024 was $1,236,389 and $1,259,554, respectively, a decrease of $23,165 or 1.8%, which was slightly lower on a year-over year basis primarily due to more of the Company’s computer software being fully depreciated at the end of 2024.

Interest Expense

Interest expense for the three months ended March 31, 2025 and 2024 were as follows:

Three Months EndedMarch 31,20252024Interest expense$1,284,822 $5,022,230 

Interest expense for the three months ended March 31, 2025 and 2024 was $1,284,822 and 5,022,230, respectively. The decrease of $3,737,408, or 74.4%, in the three months ended March 31, 2025 compared to the three months ended March 31, 2024 was attributed  to the Company deconsolidating the joint and several debt obligations as of the Merger date.

Income Tax (Expense)/Benefit

Provision for income taxes for the three months ended March 31, 2025 and 2024 were as follows:

Three Months EndedMarch 31,20252024Income tax (expense)/benefit$(9,617)$1,290,595 

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Income tax (expense)/benefit for the three months ended March 31, 2025 and 2024 was $(9,617) and $1,290,595, 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 revolving credit agreement (the “Revolver”). 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 contingent consideration and debt payments. If Atlantic is able to ref