Company: ATLN
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001605888-25-000031
Chunk: 128

Company: ATLANTIC INTERNATIONAL CORP.
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 8
Chunk 128
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 deciding whether to reinvest profits into the current business segment or into other parts of the entity or parent, such as for acquisitions or other public costs such as investor relations and marketing.The Company does not have intra-entity sales or transfers.

Note 12: Concentrations of Credit RiskThe Company’s financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable.Cash in Excess of FDIC Insured LimitsThe Company places its cash and cash equivalents with financial institutions which it believes are of high creditworthiness and where deposits are insured by the United States Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. The Company’s cash balances in excess of FDIC insured limits amounted to $108,835 and $424,188 as of June 30, 2025 and December 31, 2024, respectively.The Company has not experienced any losses with regard to its bank accounts and believes it does not pose a significant credit risk to the Company.Other ConcentrationsAs of June 30, 2025 and December 31, 2024, the Company has a deposit in the amount of $8,000,000 with a professional employer organization (“PEO”). The PEO is the employer of record for substantially all of the Company’s engagement professionals, and as such certain costs of revenue are paid to the PEO and subsequently distributed to Company engagement professionals.

Note 13: Members' Capital and Mezzanine CapitalAs of March 31, 2024, 100%, of the outstanding membership units were held by IDC.Under the Operating Agreement, LMH had the right, but not the obligation to require IDC to purchase LMH’s interest in the Company (the “LMH Put”) upon the occurrence of any Triggering Event, or during the Put-Call Period. Upon the occurrence of certain triggering events as defined in the Company’s operating agreement, LMH had the right to require IDC to purchase its membership units in the Company. The Company has determined the LMH Units to be redeemable upon an event that is outside the control of the Company, and accordingly classified the LMH Units as a component of mezzanine capital and outside of permanent equity. These units were exercised on February 28, 2024 and as of March 31, 2024 were reclassed to permanent equity. See below for further detail.Accordingly, these ownership interests were recorded in mezzanine capital, and subject to subsequent measurement under the guidance provided under ASC