ATLANTIC INTERNATIONAL CORP.ATLN
ATLANTIC INTERNATIONAL CORP. Leases Disclosure
Leases
We determine whether an arrangement is a lease at inception and whether such leases are operating or financing leases. The Company does not have any material leases, individually or in the aggregate, classified as finance leases. For each lease agreement, the Company determines its lease term as the non-cancellable period of the lease and includes options to extend or terminate the lease when it is reasonably certain that it will exercise that option. We use these options in determining our capitalized financing and right-of-use assets and lease liabilities.
Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. To determine the discount rate to use in determining the present value of the lease payments, we use the rate implicit in the lease if determinable, otherwise we use our incremental borrowing rate.
The Company maintains operating leases for corporate and field offices. The Company’s leases have initial terms ranging from one month to three years, some of which include the option to renew, and some of which include an early termination option. During the year ended December 31, 2025, the Company extended certain of its leases for periods ranging from to five years.
Variable Lease Costs
Certain of the Company’s leases require payments for taxes, insurance, and other costs applicable to the property, in addition to the minimum lease payments. These costs are considered variable costs which are based on actual expenses incurred by the lessor. Therefore, these amounts are not included in the calculation of the right-of-use assets and lease liabilities.
The Company has lease agreements which provide for fixed and scheduled escalations, which are included in the calculation of the right-of-use assets and lease liabilities. The Company does not generally enter into lease agreements with increases in the base rent amount based on changes to the consumer price index.
Further, the Company has several locations in which its lease tenancy is month-to-month. For purposes of the Company’s lease liability calculations, the Company has estimated the length of time that it is reasonably certain to occupy the space. There is inherent variability risk due to these month-to-month tenancies.
Options to Extend or Terminate Leases
Many of the Company’s leases contain options to extend the lease term. The leases generally contain a single option of one-year to three-year renewal terms. The exercise of lease renewal options is at the Company’s sole discretion. If it is reasonably certain that the Company will exercise such options, the periods covered by such options are included in the lease term and are recognized as part of the Company’s right-of-use assets and lease liabilities. The Company’s leases do not generally contain options to early terminate; however, leases with month-to-month tenancy can be terminated at any time.
Discount Rate and Lease Term
The following table summarizes the weighted average remaining lease term and discount rate for operating leases as of December 31, 2025 and December 31, 2024:
| December 31, 2025 | December 31, 2024 | ||||||||||
| Weighted average remaining lease term for operating leases | 2.31 years | 2.07 years | |||||||||
| Weighted average discount rate for operating leases | 6.15 | % | 6.29 | % | |||||||
Lease Costs and Activity
The Company’s lease costs and activity are as follows:
| Year Ended December 31, | ||||||||||||||
| Operating Lease Cost | 2025 | 2024 | ||||||||||||
| Fixed lease costs to non-related parties | $ | 1,695,195 | $ | 1,723,037 | ||||||||||
| Variable lease costs to non-related parties | 238,593 | 224,041 | ||||||||||||
| Total lease cost | $ | 1,933,788 | $ | 1,947,078 | ||||||||||
| Year Ended December 31, | ||||||||||||||
| Supplemental Cash Flow Disclosures | 2025 | 2024 | ||||||||||||
| Cash paid to non-related parties for the amounts included in the measurement of operating lease liabilities | $ | 1,685,281 | $ | 1,703,706 | ||||||||||
| Right-of-use assets obtained in exchange of new operating lease liabilities | $ | 456,396 | $ | 429,121 | ||||||||||
Maturity of Lease Liabilities
The following table summarizes the future minimum payments for operating leases as of December 31, 2025, due in each year ending December 31:
| Year | Minimum Lease Payments | ||||
| 2026 | $ | 1,589,387 | |||
| 2027 | 1,144,197 | ||||
| 2028 | 312,307 | ||||
| 2029 | 117,217 | ||||
| 2030 | 38,499 | ||||
| Thereafter | 6,448 | ||||
| Total lease payments | $ | 3,208,055 | |||
| Less: imputed interest | (205,260) | ||||
| Present value of operating lease liabilities | $ | 3,002,795 | |||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Apr 15, 2026 | Showing above |
| 2024 | Mar 28, 2025 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.