Company: ATLN
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001605888-25-000055
Chunk: 90

Company: ATLANTIC INTERNATIONAL CORP.
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 1
Chunk 90
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 30, 2025 and 2024 was $(28,379) and $19,732,646, 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. 

On July 4, 2025, the “One Big Beautiful Bill Act” (“OBBBA”), was signed into law, which is considered the enactment date under U.S. GAAP. Key corporate tax provisions include the restoration of 100% bonus depreciation, immediate expensing for domestic research and experimental expenditures, changes to Internal Revenue Service (“IRS”) Section 163(j) interest limitations, updates to “Global Intangible Low-Taxed Income” (“GILTI”), and “Foreign-Derived Intangible Income” (“FDII”) rules, amendments to energy credits, and expanded IRS Section 162(m) aggregation requirements. In accordance with ASC Topic 740 — “Income Taxes” (“ASC 740”), the effects of the new tax law were recognized in the period of enactment, our quarter ended September 30, 2025. We are currently evaluating the impact of the OBBBA, and do not expect the legislation to have a material financial statement effect.

In accordance with ASC 740, the effects of new tax legislation are recognized in the period of enactment. Management has evaluated the provisions of OBBBA, recalculated temporary differences, reassessed valuation allowances, and considered any necessary adjustments. Based on this evaluation, management concluded that the effects of the OBBBA are not material to the Company’s consolidated financial statements for the current period. Management will continue to monitor forthcoming guidance, interpretations, and technical clarifications to assess whether any future adjustments or additional disclosures may be required. 

29

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