Company: ATLN
Filing Date: 2025-01-24
Form Type: 424B3
Source: 0001213900-25-006537
Chunk: 326

Company: ATLANTIC INTERNATIONAL CORP.
Filing Date: 2025-01-24
Form: 424B3
Chunk 326
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 financial statements. In assessing the realizability of deferred tax assets, management considers whether it is more -likely - than-notthat some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income in those periods in which temporary differences become deductible and/or net operating loss carryforwards can be utilized. We consider the level of historical taxable income, scheduled reversal of temporary differences, tax planning strategies, and projected future taxable income in determining whether a valuation allowance is warranted. During Fiscal 2023, the Company maintained a valuation allowance against its U.S. deferred tax assets. The Company’s valuation allowance decreased by $1.006 during Fiscal 2023 primarily attributable to Section 163(j) interest limitation and federal and state net operating losses. During Fiscal 2023, we maintained our federal and state tax attributes for unrecognized tax benefits related primarily to the treatment of stock compensation and stock options. If recognized, $765 of the unrecognized tax benefits are likely to offset to a corresponding full valuation allowance provided for the reduction of federal NOLs, thereby there is no impact to the effective rate. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

|                                             |     | Fiscal 2023 |     |     | Fiscal 2022 |     |
|:--------------------------------------------|:----|:------------|----:|:----|:------------|----:|
| Beginning balance                           |     | $           | 716 |     | $           | 697 |
| Additions for tax positions of prior years  |     |             |  49 |     |             |  19 |
| Reductions for tax positions of prior years |     |             |   0 |     |             |   0 |
| Loss before provision for income taxes      |     | $           | 765 |     | $           | 716 |

F-44

STAFFING 360 SOLUTIONS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FISCAL YEARS ENDED DECEMBER 30, 2023 AND DECEMBER 31, 2022 (All amounts in thousands) NOTE 18 — INCOME TAXES (cont.) It is reasonably possible that the amount of the unrecognized tax benefits with respect to our unrecognized tax positions will increase or decrease in the next 12 months. However, quantification of an estimated range cannot be made at this time.