ATLANTIC INTERNATIONAL CORP.ATLN
ATLANTIC INTERNATIONAL CORP. Stock Compensation Disclosure
Stock-Based Compensation
Upon the consummation of the Merger, the 2023 Equity Incentive Plan (the “2023 Incentive Plan”) became effective. The 2023 Incentive Plan provides for the grant of stock options, stock appreciation rights, restricted stock, restricted stock units (“RSUs”), dividend equivalents, and other stock or cash-based awards, or collectively, awards to officers, employees, non-employee directors, and consultants and those of our subsidiaries as selected from time to time by the plan administrator in its discretion. Unless otherwise set forth in an individual award agreement, each award shall vest over a four-year period, with one-quarter of the award vesting on the first annual anniversary of the date of grant, with the remainder of the award vesting monthly thereafter.
On July 22, 2024 the Company filed a registration statement on Form S-8 to register up to 15% (initially 7,309,322 shares) of the number of shares of common stock, par value $0.00001, to be outstanding immediately following consummation of the Initial Capital Raise following the Merger issuable pursuant to outstanding unvested or unexercised stock options, stock appreciation rights, restricted stock, restricted stock units, dividend equivalents, and other stock or cash based awards (collectively, “Awards”) granted under the Company’s 2023 Incentive Plan which became effective upon the consummation and completion of the Merger.
On November 7, 2025, the stockholders approved the 2025 Omnibus Equity Incentive Plan (the “2025 Incentive Plan”). The Company initially reserved 10,000,000 shares of our common stock, par value $0.00001, for issuance under the 2025 Incentive Plan. The number of shares of common stock reserved for issuance under the 2025 Incentive Plan shall be adjusted upward to reflect 15% of the number of shares issued and outstanding as of December 31st of each year.
Shares underlying any awards under the 2023 Incentive Plan and 2025 Incentive Plan that are forfeited, cancelled, held back to cover the exercise price or tax withholding, satisfied without the issuance of stock or otherwise terminated (other than by exercise) will be added back to the shares available for issuance under the 2023 Incentive Plan and 2025 Incentive Plan. The payment of dividend equivalents in cash shall not count against the share reserve.
Restricted Stock Units
The Company has granted 8,331,295 restricted stock units to employees in 2025, of which 6,754,124 unvested shares vested in January 2026 and 1,000,000 restricted stock units to non-employees, which are fully vested and 10,065,397 restricted stock units to non-employees during the years ended December 31, 2025 and December 31, 2024, respectively. As of December 31, 2025, the Company had 6,754,124 unvested RSUs with a grant date fair value of $4.91.
The following table summarizes the Company’s restricted stock activity consisting of RSUs:
| Non-vested Shares Outstanding | Weighted Average Grant Date Fair Value per Share | ||||||||||
| Outstanding at December 31, 2024 | 241,932 | $ | 2.36 | ||||||||
| Granted | 8,331,295 | $ | 4.64 | ||||||||
| Vested | (1,241,932) | $ | 2.17 | ||||||||
Forfeited | (577,171) | $ | 5.85 | ||||||||
| Unvested at December 31, 2025 | 6,754,124 | $ | 4.91 | ||||||||
Of the shares granted during the year ended December 31, 2024, 4,771,255 shares are for compensation for transaction costs related to the Merger incurred by a third party on behalf of the Company. An assumption agreement was entered into on June 18, 2024, whereby the Company agreed to assume those obligations and issue equity of Atlantic to satisfy these obligations in full.
The vesting date fair value of RSUs that vested in 2025 and 2024 was $2.17 and $4.54, respectively. The weighted average grant date fair value per share of awards granted in 2025 and 2024 was $4.64 and $4.49, respectively.
As of December 31, 2025, there was $0 of unrecognized stock-based compensation related to RSUs outstanding.
Stock Options
Stock options to purchase the Company’s common stock are granted to employees and directors, upon approval by the Board of Directors, with an exercise price equal to the fair market value of the stock on the date of grant. Options generally
become exercisable in four years, in equal installments beginning one year from the date of grant, and generally expire five years from the date of grant. The fair value of the Company’s stock options is estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions used:
| Year Ended | ||||||||||||||
| December 31, 2025 | December 31, 2024 | |||||||||||||
| Expected life | 3.95 years | N/A | ||||||||||||
| Expected volatility | 40.00% | N/A | ||||||||||||
| Expected dividend rate | 0.00% | N/A | ||||||||||||
| Risk-free rate | 3.95% | N/A | ||||||||||||
The following table summarizes the Company’s stock option activity:
| Stock Options | Weighted Average Exercise Price Per Share | Aggregate Intrinsic Value | |||||||||||||||
| Outstanding at December 31, 2024 | — | $ | — | $ | — | ||||||||||||
| Granted | 1,000,000 | $ | 2.67 | ||||||||||||||
| Outstanding at December 31, 2025 | 1,000,000 | $ | 2.67 | $ | — | ||||||||||||
| Exercisable at December 31, 2025 | — | $ | — | $ | — | ||||||||||||
| Vested or expected to vest at December 31, 2025 | 1,000,000 | $ | 2.67 | $ | — | ||||||||||||
The grant date fair value of the stock options granted during the years ended December 31, 2025 and December 31, 2024 was $2.37 and $0.00, respectively. As of December 31, 2025, there was $2,022,238 of unrecognized stock-based compensation related to stock options outstanding and the average remaining contractual life on outstanding options was 4.42 years.
Stock-based compensation expense included in the accompanying consolidated statements of operations was:
| Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Stock-based compensation expense | $ | 36,142,434 | $ | 45,202,329 | |||||||
Stock Issuance
On October 25, 2024, the Company issued 117,925 shares of the Company’s common stock to its employees at a per share price of $4.91 outside of the Incentive Plan as a special incentive for employees.
During 2025, the Company issued 215,148 shares of the Company’s common stock outside of the Incentive Plan, as settlements for several prior services performed at an issuance stock price range $3.40 - $5.85.Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Apr 15, 2026 | Showing above |
| 2024 | Mar 28, 2025 | |
About Stock Compensation Disclosures
Stock-based compensation disclosures detail the equity awards granted to employees and executives — including stock options, restricted stock units (RSUs), and performance shares — along with the valuation methods and assumptions used to expense them. This section reveals the true cost of talent retention and the alignment between management incentives and shareholder interests.
Key signals: total unrecognized compensation expense and its expected recognition period signal future earnings headwinds from already-granted awards. For stock options, examine Black-Scholes assumptions — expected volatility, risk-free rate, and expected term — as understating any of these reduces reported compensation expense. Compare stock compensation expense as a percentage of revenue against peers to assess dilution cost. Watch vesting schedules for acceleration clauses tied to change-of-control events. Performance-based awards with undemanding targets may indicate weak governance. Add back stock compensation to operating cash flow to calculate a more conservative free cash flow figure.