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What changed in ATLANTIC INTERNATIONAL CORP.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of ATLANTIC INTERNATIONAL CORP.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+456 added−259 removedSource: 10-K (2026-04-15) vs 10-K (2025-03-28)

Top changes in ATLANTIC INTERNATIONAL CORP.'s 2025 10-K

456 paragraphs added · 259 removed · 187 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeOur main telephone number at that address will be (201) 899-4470, and our website address is www.atlantic-internationl.com. Business Model and Acquisition Strategy Atlantic is a high-growth U.S.-based outsourced services and workforce solutions company with management who have a more than 25-year operating record.
Biggest changeBusiness Model and Acquisition Strategy Atlantic is a high-growth U.S.-based outsourced services and workforce solutions company with management who have more than a 28-year operating record. Based on their knowledge of the industry, and through its mergers and acquisitions strategy, Atlantic is building a global staffing organization that redefines the way companies grow professional teams.
Since its formation in Lyneer has grown from a regional operation to a national staffing firm with offices and geographic reach across the United States. Lyneer’s management believes, based on their knowledge of the industry, that Lyneer is one of the prominent and leading staffing firms in the ever-evolving staffing industry.
Since its formation Lyneer has grown from a regional operation to a national staffing firm with offices and geographic reach across the United States. Lyneer’s management believes, based on their knowledge of the industry, that Lyneer is one of the prominent and leading staffing firms in the ever-evolving staffing industry.
Taking advantage of their expertise in assessing worker capabilities, some companies manage their clients’ entire human resource functions. Human resources outsourcing may include management of payroll, tax filings, and benefit administration services. Human resources outsourcing may also include recruitment process outsourcing, whereby an agency manages all recruitment activities for a client. New online technology is improving staffing efficiency.
Taking advantage of their expertise in assessing 4 worker capabilities, some companies manage their clients’ entire human resource functions. Human resources outsourcing may include management of payroll, tax filings, and benefit administration services. Human resources outsourcing may also include recruitment process outsourcing, whereby an agency manages all recruitment activities for a client. New online technology is improving staffing efficiency.
Verticals That Lyneer Services Lyneer’s team represents a broad range of skilled professional candidates that Lyneer can call upon to fill the needs of its clients. Lyneer’s recruiters use their years of experience, instinct and industry expertise to make sure the correct candidate is selected for the right position.
Verticals That Lyneer Services Lyneer’s team represents a broad range of skilled professional candidates that Lyneer can call upon to fill the needs of its clients. Lyneer’s recruiters use their years of experience, instinct and industry expertise to make sure the correct 3 candidate is selected for the right position.
It creates a better customer experience and improves internal workflow. • Category Experience — Accounting & finance, administrative & clerical, hospitality, IT, legal, light industrial and medical fields. 4 Table of Contents • Results Driven — Each of Lyneer’s staffing experts is specially trained to unite the right talent with the right position creating a mutually beneficial relationship between client and employee. • One Stop Comprehensive Outsourced Services and Workforce Solution Support Model — Lyneer’s extensive network of offices and onsite operations provide local support for its clients, while its national presence gives us the resources to tackle even the most complex staffing needs. • Client Base — Blue-chip clients with long-term relationships with Lyneer.
It creates a better customer experience and improves internal workflow. • Category Experience — Accounting & finance, administrative & clerical, hospitality, IT, legal, light industrial and medical fields. • Results Driven — Each of Lyneer’s staffing experts is specially trained to unite the right talent with the right position creating a mutually beneficial relationship between client and employee. • One Stop Comprehensive Outsourced Services and Workforce Solution Support Model — Lyneer’s extensive network of offices and onsite operations provide local support for its clients, while its national presence gives us the resources to tackle even the most complex staffing needs. • Client Base — Blue-chip clients with long-term relationships with Lyneer.
Temporary Placement This model offers staffing services in its most basic form while providing Lyneer’s clients with the in-depth knowledge Lyneer brings to the process and its deep breath of candidates. These engagements are usually definitive in time and generally do not exceed a year in engagement.
Temporary Placement This model offers staffing services in its most basic form while providing Lyneer’s clients with the in-depth knowledge Lyneer brings to the process and its deep breadth of candidates. These engagements are usually definitive in time and generally do not exceed a year in engagement.
Lyneer also competes against a variety of regional or specialized companies such as Recruit Holdings, Allegis Group, Kelly Services, Manpower, Robert Half, Kforce, PageGroup, Korn/Ferry International and Alexander Mann.
Lyneer also competes against a variety of regional or specialized companies such as Allegis Group, Kelly Services, Manpower, Robert Half, Kforce, PageGroup, Korn/Ferry International and Alexander Mann.
General Lyneer, through its operating subsidiaries, primarily Lyneer Staffing Solutions, is a national strategic staffing firm servicing the commercial, professional, finance, direct placement, and managed service provider verticals. The firm was formed under the principles of honesty and integrity, and with the view of becoming the preferred outside employer of choice.
Lyneer Staffing Solutions Operations 1 Lyneer, through its operating subsidiaries, primarily Lyneer Staffing Solutions, is a national strategic staffing firm servicing the commercial, professional, finance, direct placement, and managed service provider verticals. The firm was formed under the principles of honesty and integrity, and with the view of becoming the preferred outside employer of choice.
Lyneer’s operations could be impacted by legislative changes by these bodies, particularly with respect to provisions relating to payroll and benefits, tax and accounting, employment, 6 Table of Contents worker classification and data privacy. Due to the complex regulatory environment that Lyneer operates in, Lyneer remains focused on compliance with governmental and professional organizations’ regulations.
Lyneer’s operations could be impacted by legislative changes by these bodies, particularly with respect to provisions relating to payroll and benefits, tax and accounting, employment, worker classification and data privacy. Due to the complex regulatory environment that Lyneer operates in, Lyneer remains focused on compliance with governmental and professional organizations’ regulations.
Lyneer employs the strategy of proactive recruitment to build a pipeline of pre-vetted candidates for order fulfilment. Lyneer’s client mix consists of both small- and medium-size businesses, and large national and multinational client relationships.
Lyneer employs the strategy of proactive recruitment to build a pipeline of pre-vetted candidates for order fulfillment. 2 Lyneer’s client mix consists of both small- and medium-size businesses, and large national and multinational client relationships.
It is a highly competitive industry, reflecting several trends in the global marketplace such as the increasing demand for skilled people, employers’ desire for more flexible working models and consolidation among clients and in the employment services industry itself.
It is a highly competitive industry, reflecting several trends in the global marketplace such as the increasing demand for skilled people, employers’ desire for more flexible working models and consolidation among clients and in the employment services industry itself. The workforce solutions market is highly competitive and fragmented.
One customer comprises 16% of total services revenues in 2024, but that customer has several contracts within federal, state and local governments and no one such contract represented more than 5.0% percent of its total service revenues in 2024.
One customer comprises 8% of total services revenues in 2025, but that customer has several contracts within federal, state and local governments and no one such contract represented more than 5.0% percent of its total service revenues in 2025.
Market Conditions and Opportunity Start-up costs for an outsourced services and workforce solutions company are very low. Individual offices can be profitable, but consolidation is driven mainly by the opportunity for large agencies to develop national relationships with big customers.
Market Conditions and Opportunity Start-up costs for an outsourced services and workforce solutions company are very low as costs associated with facilities and work locations are with the clients. Individual offices can be profitable, but consolidation is driven mainly by the opportunity for large agencies to develop national relationships with big customers.
Revenues that have been recognized but not invoiced for temporary staffing customers are included in “unbilled accounts receivable” on Lyneer’s consolidated balance sheets and represent a contract asset under ASC 606. Terms of collection vary based on the customer; however payment generally is due within 30 days.
Revenues that have been recognized but not invoiced for temporary staffing customers are included in “unbilled accounts receivable” on Lyneer’s consolidated balance sheets and represent a contract asset under Accounting Standards Codification (“ASC”) Topic 606 — Revenue From Contracts with Customers (“ASC 606”). Terms of collection vary based on the customer; however, payment generally is due within 30 days.
In addition, Lyneer placed approximately 60,000 engagement professionals and workers (which includes full time engagement professionals) on assignments with clients during 2024. The substantial majority of engagement professionals placed on assignment by Lyneer are Lyneer’s temporary employees while they are working on assignments.
Employees Lyneer had approximately 300 full-time internal staff as of December 31, 2025. In addition, Lyneer placed approximately 60,000 engagement professionals and workers (which includes full time engagement professionals) on assignments with clients during 2025. The substantial majority of engagement professionals placed on assignment by Lyneer are Lyneer’s temporary employees while they are working on assignments.
None of these locations has exceeded 5% of the revenue associated with the client. The current term of the MSA expires in January 2026 and automatically renews for one-year subsequent terms. However, the client may terminate the agreement for convenience at any time, subject to any accrued payment obligations.
The current term of the MSA expires in January 2027 and automatically renews for one-year subsequent terms. However, the client may terminate the agreement for convenience at any time, subject to any accrued payment obligations.
According to the report, the alternative legal service providers market is currently valued at $14 billion. • According to a 2022 survey from Deloitte, 82.4% of hiring managers for accounting and financial roles at public companies admit to struggling with talent retention, and 68.9% of hiring managers at private companies say the same, thus creating a need to work hard to attract and retain top talent. 5 Table of Contents Scalable Model to Fit Business Needs Lyneer’s services can be scaled up or down to meet the needs of medium and large clients or clients with disparate locations.
According to the report, the alternative legal service providers market is currently valued at $14 billion. • According to a 2022 survey from Deloitte, 82.4% of hiring managers for accounting and financial roles at public companies admit to struggling with talent retention, and 68.9% of hiring managers at private companies say the same, thus creating a need to work hard to attract and retain top talent.
Lyneer believes that many of these marks and trade names, including Lyneer Staffing Solutions, Lyneer and Lyneer International have significant value and are materially important to its business. In addition, Lyneer maintains other intangible property rights. Employees Lyneer had approximately 300 full-time internal staff as of December 31, 2024.
Lyneer believes that many of these marks and trade names, including Lyneer Staffing Solutions, Lyneer and Lyneer International have significant value and are materially important to its business. In addition, Lyneer maintains other intangible property rights. Circle8 believes that its trademark and trade names, including Swisslinx and Seven Stars have significant value and are materially important to its business.
Atlantic plans to integrate companies and maximize synergies and economics to improve sales and lower operating costs, while, at the same time, continuing to focus and expand on its acquisition strategy of high-margin profitable outsourced services and workforce solution providers. 1 Table of Contents Atlantic currently is in discussions and negotiations with multiple prospects and any such acquisitions are subject to the completion of due diligence and the negotiation and execution of final agreements.
Atlantic plans to integrate companies and maximize synergies and economics to improve sales and lower operating costs, while, at the same time, continuing to focus and expand on its acquisition strategy of high-margin profitable outsourced services and workforce solution providers.
On June 18, 2024 Atlantic completed the acquisition (the “Merger”) of Lyneer Investments LLC and its operating subsidiaries, including Lyneer Staffing Solutions, LLC (collectively, “Lyneer”) and its business operations, which became the principal business operations of our company. The management team of Atlantic has over 150 combined years of specific corporate management and investment banking experience.
Item 1. Business Overview On June 18, 2024, Atlantic International Corp (“Atlantic” or the “Company”) completed the acquisition (the “Merger”) of Lyneer Investments LLC and its operating subsidiaries, including Lyneer Staffing Solutions, LLC (collectively, “Lyneer”) and its business operations, which became the principal business operations of our Company.
Lyneer pays all related costs of employment, including workers’ compensation insurance, state and federal unemployment taxes, social security, and certain fringe benefits that are part of the costs model billed to the clients. 3 Table of Contents Direct Hire & Permanent Placement Direct hire and permanent placement services are traditional workplace placement services through which Lyneer seeks qualified candidates to help a client grow its permanent staff.
Lyneer pays all related costs of employment, including workers’ compensation insurance, state and federal unemployment taxes, social security, and certain fringe benefits that are part of the costs model billed to the clients.
AI and other technologies help reduce recruitment times by leveraging automation for certain aspects of the job search process. Customers Lyneer has one client that represented approximately 16% of both Lyneer’s 2024 and 2023 revenues. The client’s contract with Lyneer consists of a master service agreement (“MSA”) for temporary employee services with various customer locations entering into separate service annexes.
Markets and Clients Lyneer has one client that represented approximately 16% of Lyneer’s 2024 revenues. The client’s contract with Lyneer consists of a master service agreement (“MSA”) for temporary employee services with various customer locations entering into separate service annexes. None of these locations has exceeded 5% of the revenue associated with the client.
Permanent placement contracts with customers are primarily recognized when employment candidates accept offers of permanent employment and begin work for Lyneer’s customers.
Direct Hire & Permanent Placement Direct hire and permanent placement services are traditional workplace placement services through which Lyneer seeks qualified candidates to help a client grow its permanent staff. Permanent placement contracts with customers are primarily recognized when employment candidates accept offers of permanent employment and begin work for Lyneer’s customers.
Staffing & Recruitment — A consistent team effort to support the forecasts of Lyneer’s clients and meet their staffing needs.
Scalable Model to Fit Business Needs Lyneer’s services can be scaled up or down to meet the needs of medium and large clients or clients with disparate locations. Staffing & Recruitment — A consistent team effort to support the forecasts of Lyneer’s clients and meet their staffing needs.
For more discussion of the potential impact that the regulatory environment could have on its financial results, refer to Item 1A – Risk Factors below for further information. Trademarks Lyneer maintains a number of registered trademarks, trade names and service marks in the United States.
For more discussion of the potential impact that the regulatory environment could have on its financial results, refer to Item 1A — Risk Factors below for further information. Circle8 operates in multiple jurisdictions and is subject to labor, employment, tax, and regulatory requirements governing staffing and recruitment activities.
Atlantic’s management has developed long-standing relationships in the institutional investment arena to raise capital for publicly-listed entities to expand and up-list to a national securities exchange. This has, in turn, created liquidity and higher valuations for these previous companies. On the Merger date, our corporate headquarters became located at 270 Sylvan Avenue, Suite 2230, Englewood Cliffs, New Jersey 07632.
Atlantic’s management has developed long-standing relationships in the staffing industry as well as the institutional investment arena to raise capital for publicly-listed entities to expand. Our corporate headquarters are located at 270 Sylvan Avenue, Suite 2230, Englewood Cliffs, New Jersey 07632. Our main telephone number at that address is (201) 899-4470, and our website address is www.atlantic-international.com.
With a focus on integrity, transparency and customer service and a commitment to results over a 25-year period, management believes Lyneer has earned a reputation as one of the premier workforce solutions partners in the United States. 2 Table of Contents National Presence Nation-wide Support Lyneer By the Numbers: Employees Annually Clients Experience 60,000+ 1,200+ (and growing) 25+ years of industry experience At Lyneer, management understands that finding the perfect candidate starts before the job requisition even comes in.
With a focus on integrity, transparency and customer service and a commitment to results over a 28-year period, management believes Lyneer has earned a reputation as one of the premier workforce solutions partners in the United States.
Atlantic’s corporate acquisition strategy is premised on the seamless consolidation and integration of technology and back-office infrastructure, coupled with performance improvements and value creation. Its core thesis is designed to assist its client companies in the transformation of stagnation into growth to achieve sustainable results through their most important asset: people.
Our mission is to leverage new technologies and business partnerships to create streamlined hiring processes that resolve the challenges of modern-day employment economics. Atlantic’s corporate acquisition strategy is designed to assist its client companies in the transformation of stagnation into growth to achieve sustainable results through their most important asset: people.
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Item 1. Business Overview Atlantic was formed in Delaware on October 6, 2022 as a special purpose vehicle to acquire control of a publicly-traded company.
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Pursuant to the terms of the Merger, the Company changed its name from SeqLL Inc., to Atlantic International Corp, and its trading symbol to ATLN. Atlantic is a leading provider of strategic staffing and workforce solutions. Through its subsidiary, Lyneer delivers comprehensive staffing services across food production, manufacturing, and logistics sectors nationwide.
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Based on their knowledge of the industry, Atlantic’s management believes that through its mergers and acquisitions strategy, Atlantic expects to build a global staffing organization that redefines the way companies grow professional teams. Its mission is to leverage new technologies and business partnerships to create streamlined hiring processes that resolve the challenges of modern-day employment economics.
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With the addition of Circle8 Group (“Circle8”) on January 23, 2026, Atlantic extended its capabilities into specialized high-growth IT and technology staffing capabilities across Europe, complementing Atlantic’s North American industrial staffing operations. Circle8 is a European IT-technology talent and consulting enablement platform that provides specialized workforce solutions to enterprises, technology companies, financial institutions, and public-sector organizations.
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Accordingly, Atlantic is actively engaged in discussions and negotiations with multiple acquisition targets that complement Atlantic’s core business strategy. In addition, Atlantic’s strategic direction will be enhanced by a program that will extend Lyneer’s breadth of services to its broad national reach in a number of complementary areas.
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Circle8 focuses on sourcing, deploying, and managing highly skilled professionals in information technology and related digital disciplines. Circle8 is one of the fastest-growing IT and technology staffing companies, operating across Europe through a portfolio of specialized brands. Circle8 manages over 16,000 technology professionals and specializes in software development, data analytics cybersecurity, project management, and emerging technologies.
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Atlantic has identified and is focusing on a number of high-demand fields, in particular, the medical, legal and financial services fields. Atlantic is in the process of investigating a number of opportunities for acquisitions of staffing companies that operate in these identified sectors.
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Circle8 is founder-led and will continue to be led by Mr. Guus Franke who joined Atlantic’s Board of Directors as Executive Chairman. The management team of Atlantic has over 200 combined years of specific corporate management and investment banking experience.
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Atlantic intends to aggressively engage in this “M&A” strategy and to take advantage of the synergies and opportunities created by this congruence of events. By advantageously augmenting Lyneer’s existing significant capabilities through acquisition, Atlantic believes Lyneer will create material margin improvement.
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Atlantic’s acquisition of Circle8 demonstrated its strategic rationale, as follows: • Diversification of revenue and end markets, balancing industrial staffing with higher-margin, higher-growth IT and technology talent solutions; • Expanded multinational customer coverage, enabling cross-regional workforce support for global enterprises; • Enhanced scale and operating leverage, supporting long-term margin expansion and cash flow generation; • Increased revenue visibility, driven by long-term government contracts and blue-chip enterprise customers; and • Platform for disciplined future growth, leveraging Circle8's completed acquisition phase and transition to operational excellence.
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Moreover, Atlantic has commenced implementation of a detailed acquisition strategy that it believes will rapidly accelerate its growth, thus increasing and maximizing shareholder value. Atlantic plans to pursue “cornerstone acquisitions” and is focusing on targets with robust profits, diverse client bases, large national/large regional coverage in contract/permanent staffing, executive search, recruitment process, and outsourcing.
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Lyneer By the Numbers: Employees Annually Clients Experience 60,000+ 1,200+ (and growing) 28+ years of industry experience At Lyneer, management understands that finding the perfect candidate starts before the job requisition even comes in.
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In order to meet its “cornerstone acquisition” criterion, a company is expected to have over $50,000,000 in revenue and EBITDA margins of no less than 10%. In addition, Atlantic plans to pursue “tuck-in” acquisitions with a focus on acquiring high-margin niche staffing companies that can benefit from the synergies of a larger organization with increased penetration.
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AI and other technologies help reduce recruitment times by leveraging automation for certain aspects of the job search process. Circle8 Group Operations Circle8 Group B.V. (“Circle8”) is a company formed in 1987, under the laws of the Netherlands.
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Under its “tuck-in” program, Atlantic intends to acquire smaller profitable companies in business segments consistent with its larger anchor organizations.
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Until its acquisition by Atlantic on January 23, 2026, Circle8 was owned by Axiom Partners GmbH (“Axiom”), which, in turn, is 100% owned 5 by Mr. Guus Franke. Mr. Franke became Executive Chairman of the Board upon the completion of the Acquisition (described below).
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These prospects are representative of the types of companies and verticals that Atlantic is actively pursuing and underscore the opportunity for Atlantic to expand its footprint in lucrative markets with great demand for professionals and skilled workforce. Atlantic believes that the need for these services in these markets is becoming acute.
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Circle8’s specialized workplace solutions support organizations that require specialized technology capabilities to design, build, operate, and secure digital systems and digital infrastructure. Circle8 operates through a portfolio of operating companies and brands that provide staffing, recruitment, and consulting-related services focused primarily on technology professionals.
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Atlantic also believes that it is well positioned to execute on its acquisition plan. Should the proposed acquisitions be consummated, Atlantic will greatly increase its capabilities in the prime financial services and thriving healthcare support services vertical.
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Circle8 delivers services through a range of workforce solutions, including temporary staffing, contract staffing, payrolling services, permanent placement, consulting enablement, and managed workforce programs. Circle8’s clients include both private-sector enterprises and public-sector institutions that rely on specialized technology talent to support digital transformation initiatives and the ongoing operation of mission-critical IT systems.
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Staffing 360 Acquisition On November 1, 2024, as amended on January 7, 2025, Atlantic, Staffing 360 Solutions, Inc. a Delaware corporation (“STAF”), and A36 Merger Sub Inc., a Delaware corporation and a wholly-owned subsidiary of the Company entered into an Agreement and Plan of Merger (the “Staffing 360 Merger Agreement”), pursuant to which Merger Sub would merge with and into STAF, with STAF surviving as a wholly-owned subsidiary of the Company (the “Staffing 360 Merger”).
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Circle8 generates the substantial majority of its revenue from the placement of technology professionals on temporary and contract assignments, where it bills clients based on hourly or daily rates for services performed. Services Circle8 provides workforce solutions and consulting enablement services focused on technology professionals on temporary and contract assignments.
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Subject to the terms and conditions of the Staffing 360 Merger Agreement, upon completion of the Staffing 360 Merger, Atlantic would acquire all outstanding shares of STAF’s common stock. On February 26, 2025, Atlantic sent a notice of termination to STAF pursuant to the terms and conditions of the Staffing 360 Merger Agreement.
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These services provide clients with flexible access to specialized technical expertise. These professionals support client organizations in areas such as software development, cybersecurity operations, cloud infrastructure implementation, enterprise system integration, and data engineering. Assignments may range from short-term capacity support to multi-year technology transformation programs.
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The Staffing 360 Merger agreement required STAF to execute and/or deliver: “a signed agreement between the Internal Revenue Service and Company [i.e., STAF] concerning the terms of settlement mutually agreeable to Atlantic ” (Emphasis Added). Without the Company’s knowledge, STAF entered into agreements with the Internal Revenue Service that were not agreeable to Atlantic.
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Professionals may be engaged either as employees of Circle8 or as independent contractors depending on local regulatory requirements and market practices. Revenue from these services is generally generated through hourly or daily bill rates charged to clients for services performed by professionals placed with those clients.
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STAF materially failed to satisfy the terms of the Staffing 360 Merger Agreement and has done so in a manner that cannot be cured.
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Circle8 provides payrolling services in which professionals identified or recruited by the client are formally employed by Circle8. In this model, Circle8 acts as the legal employer responsible for payroll administration, tax withholding, statutory contributions, and compliance with local labor regulations.
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Accordingly, this was a material breach of the covenant and agreement set forth in the Staffing 360 Merger Agreement to deliver: “a signed agreement between the Internal Revenue Service and Company (i.e., STAF) concerning the terms of settlement mutually agreeable to Atlantic.” Finally, STAF has failed to demonstrate compliance under the Staffing 360 Merger Agreement, namely to (i) operate the Business in the ordinary course in all material respects and (ii) use commercially reasonable efforts to preserve intact the business organization, assets, properties and material business relations of STAF, both as reflected by STAF’s failure to satisfy its obligations and maintain its material business relations, among other reasons.
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The professional performs services directly for the client while Circle8 charges the client a service fee in addition to salary and employment costs. Circle8 provides recruitment services to clients seeking to hire technology professionals into permanent positions. Circle8 identifies and evaluates candidates on behalf of the client and earns placement fees upon successful hiring.
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As described under Part III, Item 11 — E xecutive Compensation — Employment and Consulting Agreements , certain executives and key employees have executed employment and consulting agreements with Lyneer.
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Circle8 supports complex technology transformation initiatives by providing teams of specialized professionals who assist clients in the execution of large-scale IT programs. These engagements may include project managers, cybersecurity specialists, solution architects, cloud engineers, and data professionals.
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Circle8 participates in structured workforce programs and procurement frameworks that allow enterprise and public-sector clients to access specialized technology talent through vendor management systems and framework agreements. Circle8 derives the majority of its revenue from time-based billing arrangements associated with temporary and contract staffing services.
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Under these arrangements, Circle8 bills clients based on hourly or daily rates for the services performed by technology professionals. In payrolling arrangements, Circle8 invoices clients for the cost of wages, statutory employment charges, and an additional service margin. Permanent placement revenue is typically recognized upon successful placement of a candidate with a client.
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Circle8 serves clients across industries that rely on advanced technology capabilities, including: 6 • financial services • technology and telecommunications • government and public sector • healthcare and life sciences • energy and infrastructure • consumer and industrial sectors A significant portion of Circle8’s services support digital transformation initiatives, cybersecurity operations, and modernization of enterprise technology platforms.
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Circle8 provides services to both private-sector organizations and public-sector institutions through procurement frameworks and technology service agreements. Circle8 has two clients that represented approximately 12.5% and 10.2% of Circle8’s revenues in 2025 and one client that represented approximately 10.9% of Circle 8’s revenues in 2024. The contract with these clients expires on November 30, 2027, and February 14, 2028.
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Circle8 competes with: • global staffing firms • regional recruitment companies • specialized technology consulting firms • boutique technology staffing providers Competition is based on factors such as access to qualified professionals, speed of delivery, industry expertise, reputation, client relationships, and pricing.
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Circle8 believes its specialization in technology talent and its network of operating companies provide competitive advantages in identifying and deploying scarce technical expertise. Circle8’s global competitors include The Adecco Group and Randstad. In addition, Circle 8 competes with specialized staffing and workforce solutions firms such as Robert Walters, SThree, HeadFirst Group, PRO Unlimited, and K2 Partnering Solutions.
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These regulations may include rules related to worker classification, contractor engagement, payroll administration, tax withholding, and social security contributions. Circle8 maintains 7 internal compliance procedures designed to ensure adherence to applicable laws and regulations in the jurisdictions in which it operates. Seasonality Demand for staffing services may fluctuate based on economic conditions, client budgeting cycles, and project timing.
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However, Lyneer and Circle8 have historically experienced relatively stable demand due to the ongoing need for specialized technology expertise across industries. Trademarks Lyneer and Circle8 maintain a number of registered trademarks, trade names and service marks in the United States and Europe, respectively.
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As described under Item 11 — Executive Compensation — Employment and Board Service Agreements with Guus Franke , certain executives and key employees have executed employment and board service agreements with the Company. As of December 31, 2025, Circle8 provided access to approximately 16,000 professionals deployed across its client network.
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These professionals possess specialized expertise in areas including software development, cloud computing, cybersecurity, data engineering, enterprise architecture, and IT infrastructure management.Circle8’s recruitment capabilities are focused on identifying scarce technology expertise and deploying professionals rapidly into client environments where specialized technical capabilities are required.
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As a workforce solutions provider, Circle8’s ability to attract, retain, and deploy highly skilled technology professionals is critical to its business model. Circle8 employs recruitment specialists and operational personnel across its operating companies and maintains relationships with a large network of independent professionals.
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Circle8 focuses on building long-term relationships with technology professionals and providing opportunities to work on complex digital transformation programs across a range of industries. Circle8 primarily operates in Europe, with significant operations in the Netherlands, Belgium, Luxembourg, Switzerland, and Germany, as well as activities in other European markets.
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Circle8 supports multinational clients operating across multiple jurisdictions and regularly deploys professionals in cross-border assignments within Europe. Circle8 Acquisition Agreement On January 23, 2026, (the “Circle8 Closing Date”), Atlantic International Corp. (“Atlantic” or the “Company”), completed the acquisition (the “Acquisition”) of Circle8 Group B.V.
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(“Circle8”), a company organized under the laws of the Netherlands, pursuant to the terms of the Acquisition Agreement, dated January 22, 2026 (the “Acquisition Agreement”), by and among the Company, Axiom Partners GmbH (“Axiom”) and Circle8.
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Capitalized terms used herein, but not otherwise defined, have the meaning ascribed to such terms in the Acquisition Agreement, a copy of which has been filed with the SEC on Form 8-K filed on January 28, 2026. Atlantic acquired 100% of the equity of Circle8 from Axiom. Atlantic will be the accounting acquirer for this transaction.
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The acquisition will be accounted for as a business combination using the acquisition method of accounting under ASC 805. The accounting impact of the Acquisition and the results of operations for Circle8 will be included in our consolidated financial statements beginning in the first quarter of 2026.
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The allocation of the purchase price to the fair value of the assets acquired and liabilities assumed has not been completed at this time. The measurement period for purchase price allocation will end no later than twelve months after the acquisition date.
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The aggregate consideration delivered to Axiom (the “Purchase Price”) for the Circle8 equity was delivered as follows: 8 (a) Atlantic issued to Guus Franke (or his assignees) 12,516,070 shares of common stock (an acquisition date fair value of $48.3 million based on the Company’s closing share price of $3.86 as of January 23. 2026), par value $0.00001 per share (“Common Stock”) equal to 19.99% of the issued and outstanding shares of Common Stock as of 12:01 a.m. on the Circle8 Closing Date (the “Initial Share Consideration”) in compliance with Nasdaq Listing Rule 5635; and (b) Atlantic issued a convertible promissory note (the “Convertible Note”) to Axiom in the principal amount of $161,961,751.20 convertible into an aggregate of 53,291,744 shares of Common Stock equal to (i) 65,807,814 shares of Common Stock on a Fully Diluted Basis minus (ii) the 19.99% shares (12,516,070) of Common Stock issued to Mr.
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Franke as Initial Share Consideration (the “Convertible Note Consideration”). The 53,291,744 shares of Common Stock is equal to (i) 65,807,814 shares of Common Stock on a Fully Diluted Basis minus (ii) the 19.99% shares (12,516,070) of Common Stock issued to Mr. Franke as Initial Share Consideration (the “Convertible Note Consideration”).
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The Convertible Note will automatically convert into common shares of the Company upon the approval of the issuance of the shares by the shareholders of the Company. (c) Additionally, Axiom shall be entitled to an additional bonus (an earnout) of US $2.5 million based on revenue metrics.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeEven if we are successful in acquiring additional entities, our acquisitions may subject our business to risks that may impact our results of operations, including: • our inability to integrate acquired companies effectively and realize anticipated synergies and benefits from the acquisitions; • the diversion of management’s attention to the integration of the acquired businesses at the expense of delivering results for the legacy business; • our inability to appropriately scale critical resources to support the business of the expanded enterprise and other unforeseen challenges of operating the acquired business as part of Lyneer’s operations; • our inability to retain key employees of the acquired businesses and/or inability of such key employees to be effective as part of Lyneer’s operations; • the impact of liabilities of the acquired businesses undiscovered or underestimated as part of the acquisition due diligence; 14 Table of Contents • our failure to realize anticipated growth opportunities from a combined business, because existing and potential customers may be unwilling to consolidate their business with a single supplier or to stay with the acquirer post-acquisition; • the impacts of cash on hand and debt incurred to finance acquisitions, thus reducing liquidity for other significant strategic objectives; • the internal controls over financial reporting, disclosure controls and procedures, corruption prevention policies, human resources and other key policies and practices of the acquired companies may be inadequate or ineffective; • as a public company, we are required to comply with the rules and regulations of the SEC and, as a substantially larger company, we will require increased marketing, compliance, accounting and legal costs; and • notwithstanding the fact that any future acquisitions may or may not continue to operate as independent entities in their particular markets, keeping their own brand identity and management teams, we will, in all likelihood, require our lenders’ approval under existing loan covenants.
Biggest changeEven if we are successful in acquiring additional entities, our acquisitions may subject our business to risks that may impact our results of operations, including: • difficulty in integrating the operations, technologies, products and personnel of an acquired business, including consolidating redundant facilities and infrastructure; • potential disruption of its ongoing business and the distraction of management from its day-to-day operations; • difficulty entering markets in which it has limited or no prior experience and in which competitors have a stronger market position; • difficulty maintaining the quality of services that such acquired companies have historically provided; potential legal and financial responsibility for liabilities of acquired businesses; • overpayment for the acquired company or assets or failure to achieve anticipated benefits, such as cost savings and revenue enhancements; • increased expenses associated with completing an acquisition and amortizing any acquired intangible assets; • challenges in implementing uniform standards, accounting policies, customs, controls, procedures and policies throughout an acquired business; • failure to retain, motivate and integrate key management and other employees of the acquired business; • loss of customers and a failure to integrate customer bases; • the diversion of management’s attention to the integration of the acquired businesses at the expense of delivering results for the legacy business; • our inability to appropriately scale critical resources to support the business of the expanded enterprise and other unforeseen challenges of operating the acquired business as part of our combined operations; • our inability to retain key employees of the acquired businesses and/or inability of such key employees to be effective as part of our combined operations; • the impact of liabilities of the acquired businesses undiscovered or underestimated as part of the acquisition due diligence; • our failure to realize anticipated growth opportunities from a combined business, because existing and potential customers may be unwilling to consolidate their business with a single supplier or to stay with the acquirer post-acquisition; • the impacts of cash on hand and debt incurred to finance acquisitions, thus reducing liquidity for other significant strategic objectives; • the internal controls over financial reporting, disclosure controls and procedures, corruption prevention policies, human resources and other key policies and practices of the acquired companies may be inadequate or ineffective; 22 • as a public company, we are required to comply with the rules and regulations of the SEC and, as a substantially larger company, we will require increased marketing, compliance, accounting and legal costs; and • notwithstanding the fact that any future acquisitions may or may not continue to operate as independent entities in their particular markets, keeping their own brand identity and management teams, we will, in all likelihood, require our lenders’ approval under existing loan covenants.
As of the date of this Report, the dates for compliance have passed without being fulfilled; however, the respective lenders are working with Lyneer and have given no indication that they intend to default Lyneer; however, there can be no guarantee that the lenders will continue to work with Lyneer amicably.
As of the date of this Report, the dates for compliance have passed without being fulfilled. The respective lenders are working with Lyneer and have given no indication that they intend to default Lyneer; however, there can be no guarantee that the lenders will continue to work with Lyneer amicably.
Lyneer has been in default under its principal credit facilities and outstanding promissory notes and any future defaults by Lyneer under its credit facilities could have a material adverse impact on Lyneer’s financial condition and long-term viability. Lyneer has entered into several debt facilities under which it is jointly and severally liable for repayment with IDC.
Lyneer has been in default under its principal credit facilities and outstanding promissory notes and any future defaults by Lyneer under its credit facilities could have a material adverse impact on Lyneer’s financial condition and long-term viability. Lyneer entered into several debt facilities under which it is jointly and severally liable for repayment with IDC.
If we are unable to obtain such additional financing on a timely basis, we may have to curtail our development activities and growth plans and/or be forced to sell assets, perhaps on unfavorable terms, which would have a material adverse effect on our business, financial condition and results of operations, and we ultimately could be forced to discontinue our operations and liquidate, in which event it is unlikely that stockholders would receive any distribution on their shares.
If we are unable to obtain such additional financing on a timely basis, we may have to curtail our development 13 activities and growth plans and/or be forced to sell assets, perhaps on unfavorable terms, which would have a material adverse effect on our business, financial condition and results of operations, and we ultimately could be forced to discontinue our operations and liquidate, in which event it is unlikely that stockholders would receive any distribution on their shares.
Currently, and until such obligations are either repaid in full or restructured by the lenders to release Lyneer as an obligor on such indebtedness, if IDC cannot, or does not, repay any portion of the debt owed by IDC, Lyneer could be responsible for repaying all of the outstanding obligations and Lyneer’s current operations are not expected to be sufficient to make all of the necessary payments.
Currently, and until such obligations are either repaid in full or restructured by the lenders to release Lyneer as an obligor on such indebtedness, if IDC cannot, or does not, repay any portion of the debt owed by IDC, Lyneer could be responsible for repaying all of the outstanding obligations and Lyneer’s current operations may not be expected to be sufficient to make all of the necessary payments.
The risks associated with cyber threats include, among other things: • theft or misappropriation of funds; • loss, corruption, or misappropriation of proprietary, confidential or personally identifiable information (including customer and employee data); • disruption or impairment of our and our business operations and safety procedures; • damage to our reputation with our potential partners, clients, and the market; • litigation; • increased costs to prevent, respond to or mitigate cybersecurity events.
The risks associated with cyber threats include, among other things: 24 • theft or misappropriation of funds; • loss, corruption, or misappropriation of proprietary, confidential or personally identifiable information (including customer and employee data); • disruption or impairment of our and our business operations and safety procedures; • damage to our reputation with our potential partners, clients, and the market; • litigation; • increased costs to prevent, respond to or mitigate cybersecurity events.
Because placement agencies typically charge a fee based on a percentage of the first year’s salary of a new worker, companies with many jobs to fill have a large financial incentive to avoid agencies. Lyneer’s business is also significantly affected by its customers’ hiring needs and their views of their future prospects.
Because placement agencies typically 14 charge a fee based on a percentage of the first year’s salary of a new worker, companies with many jobs to fill have a large financial incentive to avoid agencies. Lyneer’s business is also significantly affected by its customers’ hiring needs and their views of their future prospects.
If our data management systems do not effectively collect, store, process and report relevant data for the operation of our business, whether due to equipment malfunction or constraints, software deficiencies or human error, our ability to effectively plan, forecast and execute our business plan and comply with applicable laws and regulations will be impaired, perhaps materially.
If our data management systems do not effectively collect, store, process and report relevant data for the operation of our business, whether due to equipment malfunction or constraints, software deficiencies or human error, our ability to effectively plan, forecast and execute our business plan and comply 23 with applicable laws and regulations will be impaired, perhaps materially.
There can be no assurance that Lyneer will operate profitably in the future. Lyneer has a significant amount of debt obligations and its failure to restructure or pay such obligations when due could have a material adverse impact on Lyneer’s financial condition and long-term viability.
There can be no assurance that Lyneer will operate profitably in the future. 11 Lyneer has a significant amount of debt obligations and its failure to restructure or pay such obligations when due could have a material adverse impact on Lyneer’s financial condition and long-term viability.
Holders of our common stock may also not be able to readily liquidate their investment or may be forced to sell at depressed prices due to low volume trading. Broad market fluctuations and general economic and political conditions may also adversely affect the market price of our common stock.
Holders of 27 our common stock may also not be able to readily liquidate their investment or may be forced to sell at depressed prices due to low volume trading. Broad market fluctuations and general economic and political conditions may also adversely affect the market price of our common stock.
Lyneer is dependent on its management personnel and employees, and a failure to attract and retain such personnel could harm its business. Lyneer is engaged in the services business. As such, its success or failure is highly dependent upon the performance of its management personnel and employees, rather than upon tangible assets (of which Lyneer has few).
The Company is dependent on its management personnel and employees, and a failure to attract and retain such personnel could harm its business. The Company is engaged in the services business. As such, its success or failure is highly dependent upon the performance of its management personnel and employees, rather than upon tangible assets (of which Lyneer has few).
Among other matters, U.S. and foreign anti-corruption, anti-money laundering, export control, sanctions, and other trade laws and regulations, which are collectively referred to as Trade Laws, prohibit companies and their employees, agents, clinical research organizations, legal counsel, accountants, consultants, contractors, and other partners from authorizing, promising, offering, providing, soliciting or receiving, directly or indirectly, corrupt or improper payments or anything else of value to or from recipients in the public or private sector.
Among other matters, U.S. and foreign anti-corruption, anti-money laundering, export control, sanctions, and other trade laws and regulations, which are collectively referred to as “Trade Laws”:, prohibit companies and their employees, agents, clinical research organizations, legal counsel, accountants, consultants, contractors, and other partners from authorizing, promising, offering, providing, soliciting or receiving, directly or indirectly, corrupt or improper payments or anything else of value to or from recipients in the public or private sector.
The risks of these activities include possible claims relating to: • discrimination and harassment; • wrongful termination or denial of employment; • violations of employment rights related to employment screening or privacy issues; • classification of temporary workers; • assignment of illegal aliens; • violations of wage and hour requirements; • retroactive entitlement to temporary worker benefits • errors and omissions by Lyneer’s temporary workers; • misuse of customer proprietary information; • misappropriation of funds; • damage to customer facilities due to negligence of temporary workers; and • criminal activity.
The risks of these activities include possible claims relating to: • discrimination and harassment; • wrongful termination or denial of employment; • violations of employment rights related to employment screening or privacy issues; • classification of temporary workers; • assignment of illegal aliens; • violations of wage and hour requirements; • retroactive entitlement to temporary worker benefits • errors and omissions by the Company’s temporary workers; • misuse of customer proprietary information; • misappropriation of funds; • damage to customer facilities due to negligence of temporary workers; and • criminal activity.
The client’s contract with Lyneer consists of a master service agreement (“MSA”) for temporary employee services with various customer locations entering into separate service annexes. None of the revenues from a specific location exceeded 5% of the aggregate revenue associated with the client. The current term of the MSA expires in January 2026 and automatically renews for one-year subsequent terms.
The client’s contract with Lyneer consists of a master service agreement (“MSA”) for temporary employee services with various customer locations entering into separate service annexes. None of the revenues from a specific location exceeded 5% of the aggregate revenue associated with the client. The current term of the MSA expires in January 2027 and automatically renews for one-year subsequent terms.
Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware shall be the sole and exclusive forum for the following types of actions or proceedings under Delaware statutory law or Delaware common law, subject to certain exceptions: (1) any derivative action or proceeding brought on our behalf; (2) any action asserting a claim of breach of a fiduciary duty or other wrongdoing by any of our directors, officers, employees 19 Table of Contents or agents to us or our stockholders; (3) any action asserting a claim against us arising pursuant to provisions of the Delaware General Corporation Law or our amended and restated certificate of incorporation or amended and restated bylaws; or (4) any action asserting a claim governed by the internal affairs doctrine.
Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware shall be the sole and exclusive forum for the following types of actions or proceedings under Delaware statutory law or Delaware common law, subject to certain exceptions: (1) any derivative action or proceeding brought on our behalf; (2) any action asserting a claim of breach of a fiduciary duty or other wrongdoing by any of our directors, officers, employees or agents to us or our stockholders; (3) any action asserting a claim against us arising pursuant to provisions of the Delaware General Corporation Law or our amended and restated certificate of incorporation or amended and restated bylaws; or (4) any action asserting a claim governed by the internal affairs doctrine.
Lyneer may incur fines and other losses or negative publicity with respect to these problems. In addition, these claims may give rise to litigation, which could be time-consuming and expensive. New employment and labor laws and regulations may be proposed or adopted that may increase the potential exposure of employers to employment-related claims and litigation.
The Company may incur fines and other losses or negative publicity with respect to these problems. In addition, these claims may give rise to litigation, which could be time-consuming and expensive. New employment and labor laws and regulations may be proposed or adopted that may increase the potential exposure of employers to employment-related claims and litigation.
Risks Related to Lyneer’s Business While Lyneer’s historical financial statements report net losses primarily as a result of its accounting for its acquisition by IDC in August 2021 and in 2024 for transaction costs in connection with the Merger, there can be no assurance of profitability post-Merger.
Risks Related to Lyneer’s Business While Lyneer’s historical financial statements report net losses primarily as a result of its accounting for its acquisition by IDC in August 2021 and in 2025 for transaction costs in connection with the Merger, there can be no assurance of profitability post-Merger.
Although Atlantic’s senior management has extensive experience in managing acquired operations, there can be no assurance that any acquired operations will be profitable.
Although Atlantic’s senior 21 management has extensive experience in managing acquired operations, there can be no assurance that any acquired operations will be profitable.
Emerging growth companies may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies, including not being required to comply with the 18 Table of Contents auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
Emerging growth companies may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies, including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
While Lyneer plans to continue growing its business organically through expansion, sales efforts, and strategic acquisitions, while maintaining tight controls on its expenses and overhead, lean overhead functions combined with focused growth may place a strain on its management systems, infrastructure and resources, resulting in internal control failures, missed opportunities, and staff attrition that could have a negative impact on its business and results of operations.
While the Company plans to continue growing its business organically through expansion, sales efforts, and strategic acquisitions, while maintaining tight controls on its expenses and overhead, lean overhead functions combined with focused growth may place a strain on its management systems, infrastructure and resources, resulting in internal control failures, missed opportunities, and staff attrition that could have a negative impact on its business and results of operations.
There can be no assurance that the corporate policies Lyneer has in place to help reduce its exposure to these risks will be effective or that Lyneer will not experience losses as a result of these risks.
There can be no assurance that the corporate policies the Company has in place to help reduce its exposure to these risks will be effective or that the Company will not experience losses as a result of these risks.
There can be no assurance that Lyneer will be able to attract and retain the personnel that are essential to its success. Lyneer’s results of operations can be negatively impacted by variable costs.
There can be no assurance that Lyneer will be able to attract and retain the personnel that are essential to its success. The Company’s results of operations can be negatively impacted by variable costs.
In the ordinary course of our business, we collect and store sensitive data, including intellectual property, our proprietary business information and that of our customers, suppliers and business partners, and personally identifiable 15 Table of Contents information of our employees, on our networks. The secure processing, maintenance and transmission of this information is critical to our operations.
In the ordinary course of our business, we collect and store sensitive data, including intellectual property, our proprietary business information and that of our customers, suppliers and business partners, and personally identifiable information of our employees, on our networks. The secure processing, maintenance and transmission of this information is critical to our operations.
The issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the market 9 Table of Contents price of our common stock to decline further and existing stockholders may not agree with our financing plans or the terms of such financings.
The issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the market price of our common stock to decline further and existing stockholders may not agree with our financing plans or the terms of such financings.
However, until such time as Lyneer’s joint and several debt obligations are restructured, the agreement of IDC to assume all but Lyneer’s $42,508,379 of the joint indebtedness is being given effect solely for accounting purposes, although Lyneer will remain a joint and several obligor on such indebtedness and will be obligated to pay such indebtedness if IDC does not do so.
However, until such time as Lyneer’s joint and several debt obligations are restructured, the agreement of IDC to assume joint indebtedness is being given effect solely for accounting purposes, although Lyneer will remain a joint and several obligor on such indebtedness and will be obligated to pay such indebtedness if IDC does not do so.
Lyneer has client concentration and the loss of a significant client could adversely affect Lyneer’s business operations and operating results. Lyneer has one client that represented approximately 16% of Lyneer’s 2024 and 2023 revenues, respectively. No other customer accounted for more than 10% of Lyneer’s revenues in either period.
Lyneer has client concentration and the loss of a significant client could adversely affect Lyneer’s business operations and operating results. Lyneer has one client that represented approximately 16% of Lyneer’s 2024 revenues. No other customer accounted for more than 10% of Lyneer’s revenues in 2024.
In addition, we must be able to attract and retain qualified personnel at all levels of operations and maintain the same levels of quality control over our services as Lyneer currently offers its clients. Unless we are able to manage such expanded operations in a manner consistent with Lyneer’s present practice, Lyneer’s operations may be adversely affected.
In addition, we must be able to attract and retain qualified personnel at all levels of operations and maintain the same levels of quality control over our services as we currently offer our clients. Unless we are able to manage such expanded operations in a manner consistent with our present practice, our operations may be adversely affected.
The market prices of our common stock could be subject to wide fluctuations in response to a variety of factors, which include: • actual or anticipated fluctuations in our financial condition and operating results; • announcements of technological innovations by us or our competitors; • announcements by our customers, partners or suppliers relating directly or indirectly to our products, services or technologies; • overall conditions in our industry and market; • addition or loss of significant customers; • change in laws or regulations applicable to our products; • actual or anticipated changes in our growth rate relative to our competitors; • announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures, capital commitments or achievement of significant milestones; • additions or departures of key personnel; • competition from existing products or new products that may emerge; • fluctuations in the valuation of companies perceived by investors to be comparable to us; • disputes or other developments related to proprietary rights, including patents, litigation matters or our ability to obtain intellectual property protection for our technologies; • announcement or expectation of additional financing efforts; • sales of our common stock or warrants by us or our stockholders; • stock price and volume fluctuations attributable to inconsistent trading volume levels of our shares; • reports, guidance and ratings issued by securities or industry analysts; and • general economic market conditions.
The market prices of our common stock could be subject to wide fluctuations in response to a variety of factors, which include: • actual or anticipated fluctuations in our financial condition and operating results; • Circle8’s business differs from that of Lyneer, in certain respects including geographic regions and may be affected by factors that are different from those currently affecting the Company; • announcements of technological innovations by us or our competitors; • announcements by our customers, partners or suppliers relating directly or indirectly to our products, services or technologies; • overall conditions in our industry and market; • addition or loss of significant customers; • change in laws or regulations applicable to our products; • actual or anticipated changes in our growth rate relative to our competitors; • announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures, capital commitments or achievement of significant milestones; • additions or departures of key personnel; • competition from existing products or new products that may emerge; • fluctuations in the valuation of companies perceived by investors to be comparable to us; • disputes or other developments related to proprietary rights, including patents, litigation matters or our ability to obtain intellectual property protection for our technologies; • announcement or expectation of additional financing efforts; • sales of our common stock or warrants by us or our stockholders; • stock price and volume fluctuations attributable to inconsistent trading volume levels of our shares; • reports, guidance and ratings issued by securities or industry analysts; and • general economic market conditions.
In addition, an 10 Table of Contents unfavorable outcome in one or more of these cases could cause Lyneer to change its compensation plans for its employees, which could have a material adverse effect upon Lyneer’s business. See Part I, Item 3 — Business — Legal Proceedings .
In addition, an unfavorable outcome in one or more of these cases could cause Lyneer to change its compensation plans for its employees, which could have a material adverse effect upon Lyneer’s business. See Item 3 — Business — Legal Proceedings .
These forward-looking statements include, but are not limited to, statements about: • our expectations regarding the market size and growth potential for our business; • our ability to refinance our outstanding indebtedness in a timely manner to avoid a future default; • the implementation of our strategic plans, including strategy for our business, acquisitions and related financing; • the ability of Lyneer and IDC to meet the terms and conditions of their joint and several debt obligations; • our ability to maintain and establish future collaborations and strategic clients; • the rate and degree of market acceptance of our services; • our ability to meet the continued listing requirements of the Nasdaq Stock Market; • our ability to generate sustained revenue or achieve profitability; • the pricing and expected gross margin for our services; • the expected benefits and synergies of the Merger; 20 Table of Contents • the expected financial condition, results of operations, earnings outlook and prospects of our Company, Lyneer and the combined company, including any projections of sales, earnings, revenue, margins or other financial items; • the ability of the new management team to execute our business plan; • our business strategies and goals; • any statements regarding the plans, strategies and objectives of management for future operations; • any statements regarding future economic conditions or performance; • all assumptions, expectations, predictions, intentions or beliefs about future events; • changes in applicable laws, regulations or permits affecting our, Atlantic’s or Lyneer’s operations or the industries in which each appears; • general economic and geopolitical conditions; • our competitive position; and • our estimates of our expenses, ongoing losses, future revenue, capital requirements and our needs for, or ability to obtain, additional financing as necessary.
These forward-looking statements include, but are not limited to, statements about: • our expectations regarding the market size and growth potential for our business; • the implementation of our strategic plans, including strategy for our business, acquisitions and related financing; • the ability of Lyneer and IDC to meet the terms and conditions of their joint and several debt obligations; 30 • our ability to maintain and establish future collaborations and strategic clients; • the rate and degree of market acceptance of our services; • our ability to meet the continued listing requirements of the Nasdaq Stock Market; • our ability to generate sustained revenue or achieve profitability; • the pricing and expected gross margin for our services; • the expected benefits and synergies of the Acquisition of Circle8; • the expected financial condition, results of operations, earnings outlook and prospects of our Company, Lyneer and the combined company, including any projections of sales, earnings, revenue, margins or other financial items; • the ability of the new management team to execute our business plan; • our business strategies and goals; • any statements regarding the plans, strategies and objectives of management for future operations; • any statements regarding future economic conditions or performance; • all assumptions, expectations, predictions, intentions or beliefs about future events; • changes in applicable laws, regulations or permits affecting Atlantic, Lyneer or Circle8’s operations or the industries in which each appears; • general economic and geopolitical conditions; • our competitive position; and • our estimates of our expenses, ongoing losses, future revenue, capital requirements and our needs for, or ability to obtain, additional financing as necessary.
As a publicly-traded company, we will continue to incur significant legal, accounting and other expenses that neither Atlantic nor Lyneer was required to incur in the recent past.
As a publicly-traded company, we will continue to incur significant legal, accounting and other expenses that neither Lyneer nor Circle8 were required to incur in the recent past.
While Lyneer is legally jointly and severally liable for IDC’s debt obligations, as of the date of the Merger, the Company deconsolidated its joint and several debt obligations as it is reasonably probable that IDC has the ability to repay their portion. At December 31, 2024, such indebtedness totaled approximately $104,045,357.
While Lyneer is legally jointly and severally liable for IDC’s debt obligations, as of the date of the Merger, the Company deconsolidated its joint and several debt obligations as it is reasonably probable that IDC has the ability to repay their portion. At December 31, 2025, such indebtedness totaled approximately $70,373,516.
Accordingly, IDC our principal stockholder, owns approximately 43% of our issued shares, and may be able to control the election and removal of the majority of our directors and thereby determine corporate and management policies, including potential mergers or acquisitions, payment of dividends, asset sales, amendment of the articles and by-laws and other significant corporate transactions of our company for so long as it retains significant ownership.
Accordingly, either of our principal stockholders, may be able to control the election and removal of the majority of our directors and thereby determine corporate and management policies, including potential mergers or acquisitions, payment of dividends, asset sales, amendment of the articles and by-laws and other significant corporate transactions of our Company for so long as it retains significant ownership.
Atlantic has reported a net loss of $135,479,890 for the year ended December 31, 2024 and net losses of $15,252,020 and $3,221,058 for the years ended December 31, 2023 and 2022, respectively. The consolidated financial statements of Lyneer since August 31, 2021 reflect the post-acquisition activity of Lyneer since its acquisition by IDC.
Atlantic has reported a net loss of $59,430,919 for the year ended December 31, 2025 and net losses of $135,479,890 and $15,252,020 for the years ended December 31, 2024 and 2023, respectively. The consolidated financial statements of Lyneer since August 31, 2021 reflect the post-acquisition activity of Lyneer since its acquisition by IDC.
Because we have elected to use the extended transition period for complying with new or revised accounting standards for an emerging growth company our financial statements may not be comparable to companies that comply with public company effective dates.
Because we have elected to use the extended transition period for complying with new or revised accounting standards for an emerging growth company our financial statements may not be comparable to companies that comply with public company effective dates. 28 We have elected to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(1) of the JOBS Act.
Lyneer’s results of operations can be negatively impacted by, among other things, changes in unemployment tax rates, changes in workers’ compensation insurance rates and claims relating to audits, and write-offs of uncollectible customer receivables. Lyneer’s expansion and acquisition strategy may not be executed effectively.
The Company’s results of operations can be negatively impacted by, among other things, changes in unemployment tax rates, changes in workers’ compensation insurance rates and claims relating to audits, and write-offs of uncollectible customer receivables.
Our growth strategy involves acquisitions that will help us expand our service offerings and diversify our geographic footprint. It is expected that we will continuously evaluate acquisition opportunities. However, there can be no assurance that we will be able to identify acquisition targets that complement our strategy and are available at valuation levels accretive to our business.
It is expected that we will continuously evaluate acquisition opportunities. However, there can be no assurance that we will be able to identify acquisition targets that complement our strategy and are available at valuation levels accretive to our business.
Although we undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law, you are advised to consult any additional disclosures we make in the documents that we file with the SEC.
Although we undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law, you are advised to consult any additional disclosures we make in the documents that we file with the SEC. 31 Lyneer’s business is also significantly affected by its customers’ hiring needs and their views of their future prospects.
As stated above, Lyneer has been in default under its principal credit facilities and outstanding promissory notes and any future defaults by Lyneer under its credit facilities could have a material adverse impact on Lyneer’s financial condition and long-term viability.
As stated above, Lyneer has been in default under its principal credit facilities and outstanding promissory notes and any future defaults by Lyneer under its credit facilities could have a material adverse impact on Lyneer’s financial condition and long-term viability. We will be required to seek financing to pay or refinance our other outstanding indebtedness.
These risks and uncertainties include, but are not limited to, those factors described under Part I, Item 1A – Risk Factors of this Annual Report on Form 10-K and under similar headings in the documents that are incorporated by reference herein. Moreover, we operate in a very competitive and rapidly changing environment.
These risks and uncertainties include, but are not limited to, those factors described in this Section and under similar headings in the documents that are incorporated by reference herein. Moreover, we operate in a very competitive and rapidly changing environment.
Our roll-up strategy, assumes, in part, we will be able to convince smaller firms that they can increase their profitability and market share through an affiliation with us and the use of our infrastructure, systems and programs the strategy will be to purchase, or merge with, smaller businesses in the staffing industry, thus decreasing certain operating inefficiencies and increasing economics of sale.
Risks of our roll-up strategy. Our roll-up strategy, assumes, in part, we will be able to convince smaller firms that they can increase their profitability and market share through an affiliation with us and the use of our infrastructure, systems and programs.
When unemployment levels are low, finding sufficient eligible candidates to meet employers’ demands is more challenging. Although unemployment has risen in some areas in which Lyneer operates, talent shortages have persisted in a number of disciplines and jurisdictions. Any shortage of candidates could materially adversely affect Lyneer’s business or financial condition.
Although unemployment has risen in some areas in which Lyneer operates, talent shortages have persisted in a number of disciplines and jurisdictions. Any shortage of candidates could materially adversely affect Lyneer’s business or financial condition.
So long as IDC continues to own a significant amount of the voting power, even though such amount is less than 50%, they will continue to be able to strongly influence or effectively control decisions of our company.
So long as either of these stockholders continue to own a significant amount of the voting power, even though such amount is less than 50%, they will continue to be able to strongly influence or effectively control decisions of our company. We will continue to incur substantial costs and obligations as a result of being a public company.
The requirements of complying with the Exchange Act and the Sarbanes-Oxley Act may strain our resources and distract management. We are subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Sarbanes-Oxley Act of 2002. The costs associated with these requirements may place a strain on our systems and resources.
We are subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Sarbanes-Oxley Act of 2002. The costs associated with these requirements may place a strain on our systems and resources. The Exchange Act requires that we file annual, quarterly and current reports with respect to our business and financial condition.
Permanent placement and other services decreased by $846,229, or 18.3%, due to lower permanent job demand as companies cut back on hiring permanent positions. Most of Lyneer’s contracts do not obligate its customers to utilize a significant amount of Lyneer’s staffing services and may be cancelled on limited notice, so Lyneer’s revenue is not guaranteed.
Permanent placement and other services increased $688,480 or 18.2% due to higher permanent job demand. Most of Lyneer’s contracts do not obligate its customers to utilize a significant amount of Lyneer’s staffing services and may be cancelled on limited notice, so Lyneer’s revenue is not guaranteed.
The joint indebtedness of Lyneer and IDC is made up of a revolving credit facility and a term loan from their senior lenders and 7 Table of Contents promissory notes that are payable to the two prior owners of Lyneer.
The joint indebtedness of Lyneer and IDC is made up of a $6 million term loan from the Company’s prior senior lender and promissory notes that are payable to the two prior owners of Lyneer.
Pursuant to an Allocation Agreement dated as of December 31, 2023, IDC agreed with Lyneer to assume responsibility for all payments under the term loan and the promissory notes payable to the two prior owners of Lyneer (the “Assumed Debt”), and all but $42,508,379 that was outstanding under the revolving credit facility as of December 31, 2024.
Pursuant to an Allocation Agreement dated as of December 31, 2023, IDC agreed with Lyneer to assume responsibility for the $6 million term loan and the promissory notes payable to the two prior owners of Lyneer (the “Assumed Debt”).
We have elected to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(1) of the JOBS Act. This election allows us to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies.
This election allows us to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies.
Should these assumptions be incorrect, our strategy is unlikely to succeed. We will depend upon the abilities of people who own the businesses we acquire, or on the managers they employ.
The strategy will be to purchase, or merge with, smaller businesses in the staffing industry, thus decreasing certain operating inefficiencies and increasing economics of sale. Should these assumptions be incorrect, our strategy is unlikely to succeed. We will depend upon the abilities of people who own the businesses we acquire, or on the managers they employ.
Cyber incidents could have a material adverse effect on our business, financial condition and results of operations. We are subject to certain U.S. and foreign anti-corruption, anti-money laundering, export control, sanctions, and other trade laws and regulations. We can face serious consequences for violations.
We are subject to certain U.S. and foreign anti-corruption, anti-money laundering, export control, sanctions, and other trade laws and regulations. We can face serious consequences for violations.
Historically, we have maintained a small accounting staff and use supplemental resources such as contractors and consultants to provide additional accounting and finance support. In order to maintain and improve the effectiveness of our disclosure controls and procedures and internal control over financial reporting, significant additional resources and management oversight may be required.
The Sarbanes-Oxley Act requires that we maintain effective disclosure controls and procedures and internal controls over financial reporting. Historically, we have maintained a small accounting staff and use supplemental resources such as contractors and consultants to provide additional accounting and finance support.
Even if IDC pays in full the term loan and the promissory notes payable to the prior sellers of Lyneer and Lyneer is successful in restructuring its obligations under the revolving credit facilities, there can be no assurance that all conditions subsequent will be satisfied and that Lyneer will be able to comply with all of its obligations under such credit facilities.
There can be no assurance that all conditions subsequent will be satisfied and that Lyneer will be able to comply with all of its obligations under such credit facilities.
Risks Related to Ownership of Our Common Stock The market price of our common stock may be highly volatile, and you could lose all or part of your investment. The market price of our common stock may be highly volatile. You may be unable to sell your shares of common stock at or above the offering price.
You may be unable to sell your shares of common stock at or above the offering price.
There can also be no assurance that the insurance policies Lyneer has purchased to insure against certain risks will be adequate or that insurance coverage will remain available on reasonable terms or be sufficient in amount or scope of coverage. Long-term contracts do not comprise a significant portion of Lyneer’s revenue.
There can also be no assurance that the insurance policies the Company has purchased to insure against certain risks will be adequate or that insurance coverage will remain available on reasonable terms or be sufficient in amount or scope of coverage. The Company’s growth of operations could strain its resources and cause its business to suffer.
Lyneer’s markets are characterized by pressures to provide high levels of service, incorporate new capabilities and technologies, accelerate job completion schedules and reduce prices. Furthermore, Lyneer faces competition from a number of sources, including other executive search firms and professional search, staffing and consulting firms. Several of Lyneer competitors have greater financial and marketing resources than Lyneer does.
Furthermore, Lyneer faces competition from a number of sources, including other executive search firms and professional search, staffing and consulting firms. Several of Lyneer competitors have greater financial and marketing resources than Lyneer does.
These broad market and industry fluctuations, as well as general economic, political and market conditions such as recessions, interest rate changes or international currency fluctuations, may negatively impact the market prices of our common stock. You may not realize any return on your investment in us and may lose some or all of your investment.
These fluctuations often have been unrelated or disproportionate to the operating performance of those companies. These broad market and industry fluctuations, as well as general economic, political and market conditions such as recessions, interest rate changes or international currency fluctuations, may negatively impact the market prices of our common stock.
Stock markets in general and the over-the-counter market and the market for companies in our industry in particular have experienced price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. 17 Table of Contents These fluctuations often have been unrelated or disproportionate to the operating performance of those companies.
If any of the forgoing occurs, it could cause our common stock or trading volumes to decline. Stock markets in general and the market for companies in our industry in particular have experienced price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies.
Candidates generally seek contract or permanent positions through multiple sources, including Lyneer and its competitors. Before the COVID-19 pandemic, unemployment in the U.S. was at historic lows and during the second half of 2021, as the economy recovered, competition for workers in a number of industries became intense.
Before the COVID-19 pandemic, unemployment in the U.S. was at historic lows and during the second half of 2021, as the economy recovered, competition for workers in a number of industries became intense. When unemployment levels are low, finding sufficient eligible candidates to meet employers’ demands is more challenging.
The price of our common stock could be subject to rapid and substantial volatility. There have been instances of extreme stock price run-ups followed by rapid price declines and strong stock price volatility with recent public offerings, especially among those with relatively smaller public floats.
There have been instances of extreme stock price run-ups followed by rapid price declines and strong stock price volatility with recent public offerings, especially among those with relatively smaller public floats. As a smaller-capitalization company with a small public float, we may experience greater stock price volatility, extreme price run-ups, lower trading volume, and less liquidity than larger-capitalization companies.
See Part II, Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations. Lyneer operates in an intensely competitive and rapidly changing business environment, and there is a substantial risk that its services could become obsolete or uncompetitive . The markets for Lyneer’s services are highly competitive.
Lyneer operates in an intensely competitive and rapidly changing business environment, and there is a substantial risk that its services could become obsolete or uncompetitive . The markets for Lyneer’s services are highly competitive. Lyneer’s markets are characterized by pressures to provide high levels of service, incorporate new capabilities and technologies, accelerate job completion schedules and reduce prices.
Lyneer’s service revenue increased by $41,235,113, or 10.3%, during the year ended December 31, 2024, as compared to the prior fiscal year. This increase was was predominately due to the higher revenues from Lyneer’s temporary placement services business due primarily to a strong sales initiative by the Company.
Lyneer’s service revenue decreased by $6,731,084, or 1.5%, during the year ended December 31, 2025, as compared to the prior fiscal year. This decrease was predominately due to lower revenues from Lyneer’s temporary placement services business due primarily to a decrease in the revenues associated with our largest client.
The nature of these arrangements further exacerbates the difficulty in predicting Lyneer’s future results. Lyneer may be unable to find sufficient candidates for its talent solutions business. 12 Table of Contents Lyneer’s talent solutions services business consists of the placement of individuals seeking employment. There can be no assurance that candidates for employment will continue to seek employment through Lyneer.
Lyneer’s talent solutions services business consists of the placement of individuals seeking employment. There can be no assurance that candidates for employment will continue to seek employment through Lyneer. Candidates generally seek contract or permanent positions through multiple sources, including Lyneer and its competitors.
Any failure or perceived failure to successfully manage the collection, use, disclosure, or security of personal information or other privacy related matters, or any failure to comply with changing regulatory requirements in this area, could result in legal liability or impairment to our reputation in the marketplace. 16 Table of Contents The Company has obtained cybersecurity insurance coverage in the event we become subject to various cybersecurity attacks, however, we cannot ensure that it will be sufficient to cover any particular losses we may experience as a result of such cyberattacks, including governmental actions.
Any failure or perceived failure to successfully manage the collection, use, disclosure, or security of personal information or other privacy related matters, or any failure to comply with changing regulatory requirements in this area, could result in legal liability or impairment to our reputation in the marketplace.
As a smaller-capitalization company with a small public float, we may experience greater stock price volatility, extreme price run-ups, lower trading volume, and less liquidity than larger-capitalization companies. In particular, our common stock may be subject to rapid and substantial price volatility, low volumes of trades, and large spreads in bid and asked prices.
In particular, our common stock may be subject to rapid and substantial price volatility, low volumes of trades, and large spreads in bid and asked prices.
Lyneer has been and may be exposed to employment-related claims and losses, including class action lawsuits that could have a material adverse effect on its business. Lyneer employs people internally and in the workplaces of other businesses. Many of these individuals have access to customer information systems and confidential information.
An unfavorable 19 outcome could result in liabilities that have a material adverse effect upon our business, financial condition or results of operations. General Risks Affecting Our Combined Business The Company has been and may be exposed to employment-related claims and losses, including class action lawsuits that could have a material adverse effect on its business.
Because long-term contracts are not a significant part of Lyneer’s staffing services business, future results cannot be reliably predicted by considering past trends or extrapolating past results. Additionally, Lyneer’s clients will frequently enter nonexclusive arrangements with several firms, which the client is generally able to terminate on short notice and without penalty.
Additionally, Lyneer’s clients will frequently enter nonexclusive arrangements with several firms, which the client is generally able to terminate on short notice and without penalty. The nature of these arrangements further exacerbates the difficulty in predicting Lyneer’s future results. Lyneer may be unable to find sufficient candidates for its talent solutions business.
Lyneer’s plan for strategic growth is dependent upon finding suitable acquisition targets and executing upon the transactions in a viable manner. Lyneer has not reached any definitive agreement with any acquisition targets, and Lyneer cannot assure you that it will consummate any acquisition on favorable terms or at all. General Risks Affecting Our Business.
Following its acquisition of Circle8, the Company has not reached any definitive agreement with any acquisition targets, and the Company cannot assure you that it will consummate any acquisition on favorable terms or at all. Our principal stockholders may be able to control the election and removal of the majority of our directors.
Lyneer’s failure to comply with its obligations under its existing indebtedness following the Merger, or to repay or refinance such indebtedness when due, including our indebtedness under the Merger Note, would likely have a material adverse impact on our financial condition and long-term viability.
RISK FACTOR SUMMARY Our business is subject to numerous risks and uncertainties, These risks include, but are not limited to the following: Risks Related to Lyneer’s Business • Lyneer has a significant amount of debt obligations and its failure to restructure or pay such obligations when due could have a material adverse impact on Lyneer’s financial condition and long-term viability.
The loss for the year ended December 31, 2024, resulted primarily from: (i) selling, general and administrative costs of $45,441,659 due primarily to higher transaction costs related to the Merger, (ii) $43,000,000 of stock based compensation paid to the stockholders of Atlantic Acquisition Corp. for advisory services in connection with the Merger and (iii) $52,047,957 related to a potential settlement for legacy stockholders and stock compensation expense related to third parties as advisors to the Company.
The loss for the year ended December 31, 2025, resulted primarily from: (i) selling, general and administrative costs of $64,021,052 due primarily to higher stock compensation expense.
This, in turn, would be expected to have a material adverse effect on Lyneer’s business and financial condition. Lyneer could be harmed by improper disclosure or loss of sensitive or confidential company, employee, associate or customer data, including personal data.
This, in turn, would be expected to have a material adverse effect on Lyneer’s business and financial condition. Long-term contracts do not comprise a significant portion of Lyneer’s revenue. Because long-term contracts are not a significant part of Lyneer’s staffing services business, future results cannot be reliably predicted by considering past trends or extrapolating past results.
Removed
In addition, under the Allocation Agreement, IDC and Prateek Gattani, IDC’s Chief Executive Officer and our Chairman of the Board, have agreed for IDC to work with Lyneer to implement a plan to refinance or otherwise satisfy the Assumed Debt and to restructure their revolving credit facility with current credit availability of up to $60,000,000 for which Lyneer is currently jointly and severally liable with IDC so that Lyneer will be obligated for only its portion under the facility.
Added
Furthermore, Lyneer had been in default under its principal credit facilities and outstanding promissory notes and any future defaults by Lyneer under its credit facilities could also have a material adverse impact on Lyneer’s financial condition and long-term viability. • Lyneer operates in an intensely competitive and rapidly changing business environment, and there is a substantial risk that its services could become obsolete or uncompetitive. • Lyneer is a party to debt instruments which contain covenants that could limit its financing options and liquidity position, which would limit its ability to grow its business.
Removed
Lyneer intends to enter into a new revolving credit facility with its current lender or a new lender that will be supportable by Lyneer’s stand-alone borrowing base and is expected to be on terms similar to those of the existing agreement.
Added
Lyneer’s failure to comply with the restrictions in these debt instruments could result in events of default, which, if not cured or waived, could result in Lyneer being required to repay these borrowings before their due date. • Lyneer’s customers can terminate their agreements at any time, making Lyneer particularly vulnerable to a significant decrease in revenue within a short period of time that could be difficult to quickly replace. • The Company and Lyneer are parties to litigation with their former lender that could force the Company to repay indebtedness to its former lender which would have a material adverse effect on the Company. • The Company’s audited financial statements have been prepared with a going concern qualification.
Removed
It is contemplated that the new credit facility will provide credit availability to Lyneer of up to $60,000,000 and will replace Lyneer’s remaining obligations under the existing revolving credit facility.
Added
Risks Related to Circle8’s Business • As a staffing company, Circle8 is prone to cash flow imbalances.
Removed
However, there can be no assurance that Lyneer will be able to refinance its credit facility or support its continuing indebtedness, to generate revenues sufficient in amount to enable us to pay our indebtedness under the Merger Note, or to repay or refinance any such indebtedness when due.
Added
If it is unable to satisfy those needs from cash generated from its operations or borrowings under its debt instruments, upon mutual agreement we will be required to fund such shortfall. • Circle8’s clients come from a variety of enterprises and their needs may change rapidly as their businesses and industries evolve. • The worldwide employment services industry is highly competitive with limited barriers to entry into many markets, which could limit our ability to maintain or increase our market share or profitability. • Circle8’s international operations subject us to numerous risks outside of our control, including risks arising from political unrest, military conflicts, natural disasters, severe weather conditions, and global health emergencies. 10 • Foreign currency fluctuations, changes in tax rates, adoption of new international tax legislation or tax audits that could result in additional income tax liabilities may have a material adverse effect on our operating results. • New laws and government regulations, including labor and employment laws, privacy laws, antibribery and corruption laws may result in prohibition or restriction of certain types of employment services or the imposition of additional licensing or tax requirements which may negative affect our future earnings.
Removed
Lyneer will remain jointly and severally liable for the Assumed Debt until such indebtedness is restructured to remove Lyneer as an obligor or such indebtedness is paid in full.
Added
General Risks Affecting Our Combined Business • We have been and may be exposed to employment-related claims and losses, including class action lawsuits that could have a material adverse effect on our business. • Our growth strategy and our expansion and acquisition strategy may not be executed effectively.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe principal offices of Lyneer are located at 133 Franklin Corner Road, Lawrenceville, New Jersey 08648; telephone number (609) 503-4400. Lyneer occupies approximately 1,825 square feet of office space under a three-year lease ending September 30, 2025 with an unaffiliated landlord. The monthly rental is $3,650 increasing to $3,870.
Biggest changeCircle8 operates through approximately eight European offices located in the Netherlands, Germany, Belgium, Luxembourg and Switzerland. The principal offices of Lyneer are located at 133 Franklin Corner Road, Lawrenceville, New Jersey 08648; telephone number (609) 503-4400. Lyneer occupies approximately 1,825 square feet of office space under a three-year lease ending September 30, 2028 with an unaffiliated landlord.
Item 2. Properties Our corporate headquarters are located at 270 Sylvan Avenue, Suite 2230, Englewood Cliffs, New Jersey 07632, telephone number (201) 899-4470. The lease is for approximately 3,578 square feet, expiring on or about September 2026 with an unaffiliated landlord. The monthly rental is $9,237 increasing to $10,038.
Item 2. Properties Our corporate headquarters are located at 270 Sylvan Avenue, Suite 2230, Englewood Cliffs, New Jersey 07632, telephone number (201) 899-4470. The lease is for approximately 3,578 square feet, expiring on or about September 2026 with an unaffiliated landlord. The monthly rental is $9,763 increasing to $10,038.
Added
Circle8’s headquarters are located at Prins Hendriklaan 56, Amsterdam, 1075BE, Netherlands; telephone number +31 20 261 34 00. The lease is for approximately 4700 square feet, expiring on August 31, 2027 with an unaffiliated landlord landlord. The current monthly rental is €4,682, increasing to €4,795.
Added
The monthly rental is $3,870 increasing to $4,105. 32

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeThe Company has accrued the full amount of the $650,000 settlement payment due, which is recognized in “accrued expenses and other current liabilities” on the accompanying consolidated balance sheets.
Biggest changeThe Company has accrued the full amount of the $200,000 settlement payment due, which is recognized in “accrued expenses and other current liabilities” on the accompanying consolidated balance sheets. The final settlement agreement was executed, and the full settlement amount was paid by the Company in January 2026. Theresa Alvarez and Mirna Reyes vs. vs.
Liquid Graphics, Inc., Lyneer Staffing Solutions, LLC, Liz Long, et. al, Case No 30-2021-01225386-CU-WT-CJC, Superior Court for the State of California, County of Orange On October 8, 2021, a class action wage and hour complaint was filed in the Superior Court of California, Orange County, by Maria Reyes and Teresa Alvarez as class representatives.
Liquid Graphics, Inc., Lyneer Staffing Solutions, LLC, Liz Long, et. al, Case No 30-2021-01225386-CU-WT-CJC, Superior Court for the State of California, County of Orange On October 8, 2021, a class action wage and hour complaint was filed in the Superior Court of California, Orange County, by Teresa Alvarez and Maria Flores as class representatives.
The matter settled for $425,000, $300,000 of which is to be paid by the Company, and the remaining $125,000 is to be paid by the client. The settlement agreement was signed on December 17, 2024 and has been finalized and executed and provided to the Court for approval , and the Company is currently awaiting such approval.
The matter settled for $425,000, $300,000 of which is to be paid by the Company, and the remaining $125,000 is to be paid by the client. The settlement agreement was signed on December 17, 2024 and has been finalized and executed and provided to the Court for approval.
As a result of the matter, Lyneer’s client sought indemnification from Lyneer pursuant to an indemnification demand issued to Lyneer on June 10, 2022. Accordingly, Lyneer agreed to pay approximately $1,030,000 over 36 months, beginning in July 2023, to settle the claim. 22 Table of Contents Enrique Briseno , et al. vs.
As a result of the matter, Lyneer’s client sought indemnification from Lyneer pursuant to an indemnification demand issued to Lyneer on June 10, 2022. Accordingly, Lyneer agreed to pay approximately $1,030,000 over 36 months, beginning in July 2023, to settle the claim.
A settlement conference was held on August 28, 2024, but was unsuccessful. The Company’s liability insurance carrier and the Company's worker's compensation insurance carrier and the liability insurance carrier for the client held a settlement conference for March 11, 2025, but was unsuccessful and the mater is now listed for trial on April 28, 2025.
A settlement conference was held on August 28, 2024, but was unsuccessful. The Company’s liability insurance carrier and the Company's worker's compensation insurance carrier and the liability insurance carrier for the client held a settlement conference on April 14, 2025, but was unsuccessful.
The Complaint was filed against the Company as well as the Company’s client. The matter settled for $750,000, $650,000 of which is to be paid by the Company, and the remaining $100,000 is to be paid by the client.
The Complaint was filed against the Company as well as the Company’s client. The matter settled for $750,000, $650,000 of which is to be paid by the Company, and the remaining $100,000 is to be paid by the client. The settlement agreement was signed November 16, 2023 and has been finalized and executed.
If approved, it is anticipated that the settlement payment will be due in the second quarter of 2025. The Company has accrued the full amount of the $300,000 settlement payment due, which is recognized in “accrued expenses and other current liabilities” on the accompanying consolidated balance sheets. Aguilar, et al v Lyneer Staffing Solutions, et al Docket No.
The settlement was approved by the Court, and the Company’s settlement payment is now overdue. The Company has accrued the full amount of the $300,000 settlement payment due, which is recognized in “accrued expenses and other current liabilities” on the accompanying consolidated balance sheets. Aguilar, et al v Lyneer Staffing Solutions, et al Docket No.
The complaint alleges wage and hour claims, and inaccurate wage statement claims on behalf of the class and plaintiff. The parties have agreed to a $300,000 settlement which is pending court approval. Rosanna Vargas v. DHL Express (USA), Inc. et. al., Case No.
The complaint alleges wage and hour claims, and inaccurate wage statement claims on behalf of the class and plaintiff. The $300,000 final settlement funds were disbursed on March 21, 2024. Rosanna Vargas v. DHL Express (USA), Inc. et. al., Case No.
The Company has accrued $291,667 towards the potential settlement, which is recognized in “accrued expenses and other current liabilities” on the accompanying consolidated balance sheets. Maria Reyes vs.
The matter settled at a mandatory settlement conference held on October 10, 2025, for $925,000, which is recognized in “accrued expenses and other current liabilities” on the accompanying consolidated balance sheets.
Removed
The Company believes it has issues for appeal, but believes it is probable to receive an unfavorable outcome. The Company believes that the insurance carriers will contribute a significant amount, if not all, of the potential settlement.
Added
As of December 31, 2025, the Company owes $230,000 and has accrued this full amount, which is recognized in “accrued expenses and other current liabilities on the accompanying consolidated balance sheets”. Enrique Briseno , et al. vs.
Removed
The settlement agreement was signed on November 16, 2023 and has been finalized and executed and provided to the Court for approval, and the Company is currently awaiting such approval. If approved, it is anticipated that the settlement payment will be due in the first or second quarter of 2025.
Added
The trial commenced April 28, 2025 and a settlement was reached on May 2, 2025 for a total value of $3,050,000, $2,800,000 in cash and $250,000 by virtue of a lien release, of which the Company is responsible for $200,000, with the insurance carriers collectively responsible for the remainder.
Added
The full settlement amount of $671,858, which includes employment taxes, was paid on October 23, 2025, and Lyneer’s portion of the settlement has now been paid in full. Maria Reyes vs.
Added
Lyneer Staffing Solutions, LLC, Case No CIVSB2317672, Superior Court of the State of California for the County of San Bernardino 33 On August 1, 2023, a class action wage and hour PAGA complaint was filed in the Superior Court of California, County of San Bernardino, by Maria Reyes as class representative.
Added
The settlement funds will be due from the Company within 90 days after final approval of the settlement, but in no event less than six months from October 10, 2025. The final settlement agreement has been presented to the Court for approval. BAC Rhino 3 Federal LLC vs.
Added
Atlantic International Corp, Civil Action No 2484CV03189, Suffolk County Superior Court On December 9, 2024, BAC Rhino 3 Federal LLC (“Rhino”) filed a complaint in Suffolk County Superior Court, against Atlantic for breach of contract, seeking damages for accelerated rent, plus costs of collection and outstanding rent to date, for Atlantic’s default under the lease and failure to pay monies owed thereunder.
Added
On December 18, 2025, the Company and Rhino entered into a settlement agreement whereby the Company shall pay $1,000,000. As of December 31, 2025, the Company owes $950,000 and has accrued this full amount, which is recognized in “accrued expenses and other current liabilities on the accompanying consolidated balance sheets”.
Added
The Company has agreed to monthly payments of $30,000 until the balance is paid in full.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeOn March 21, 2025, the closing stock price for our common stock on the Nasdaq Global Select Market was $6.20. Holders As of March 21, 2025, there were approximately 336 stockholders of record, according to the records of our transfer agent, and in excess of 500 additional holders of common stock held in ‘street name’.
Biggest changeHolders As of April 10, 2026, there were 79,358,271 shares of Common Stock outstanding held by approximately 305 stockholders of record, according to the records of our transfer agent, and in excess of 3,000 additional holders of common stock held in ‘street name’. Dividends We have not declared any common stock dividends to date.
Dividends We have not declared any common stock dividends to date. We have no present intention of paying any cash dividends on our common stock in the foreseeable future, as we intend to use earnings, if any, to generate growth.
We have no present intention of paying any cash dividends on our common stock in the foreseeable future, as we intend to use earnings, if any, to generate growth.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information for Common Stock Prior to November 13, 2023, our common stock traded on the Nasdaq Capital Market under the symbol SQLL.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information for Common Stock On December 11, 2024, we started trading on the Nasdaq Global Market under the trade symbol “ATLN”.
Unregistered Sales of Equity Securities None. Issuer Purchases of Equity Securities None.
Unregistered Sales of Equity Securities None. Any sales have previously been reported on a Current Report on Form 8-K. Issuer Purchases of Equity Securities None.
Removed
Pursuant to the terms of the Merger, the Company changed its corporate name from SeqLL Inc. to Atlantic International Corp. and its trading symbol to ATLN. Our common stock was originally listed for quotation on the OTC Pink Market.
Added
During the year ended December 31, 2025, the high and low closing bid price of our Common Stock was $6.55 and $1.16 respectively. On April 10, 2026, the closing stock price for our common stock on the Nasdaq Global Select Market was $2.78.
Removed
Trading in our common stock in the over-the-counter market was limited and the quotations for our common stock on the OTC Pink Market were not necessarily indicative of actual market values. On December 11, 2024, we started trading on the Nasdaq Global Select Market.
Added
Securities Authorized for Issuance under Equity Compensation Plans Share-based compensation such as restricted stock units (“RSUs”), incentive and non-statutory stock options, restricted shares, share appreciation rights and share payments may be granted to any directors, employees and consultants of the Company or affiliated companies under the 2025 Omnibus Equity Incentive Plan, under which 4,727,887 RSUs and stock options have been granted as of December 31, 2025.
Removed
During the period from June 18, 2024 to December 31, 2024, the high and low closing bid price of our common stock was $8.97 and $2.36 respectively. All quotations for the OTC Pink Market reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions.
Added
Equity Compensation Plan Information Plan Category Number of Securities to be Issued Upon Exercise of Outstanding RSUs, Options, Warrants and Rights Weighted-average Exercise Price of Outstanding Options, Warrants and Rights Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) (a) (b) (c) Equity compensation plans approved by security holders 4,727,887 $ — 4,272,113 Equity compensation plans not approved by security holders — $ — Total 4,727,887 35

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeComparison of the Years Ended December 31, 2024 and 2023: Certain related party and non-related party financial statement line-item amounts have been aggregated for purposes of analysis below, which is consistent with management’s evaluation of its business results. 25 Table of Contents The following table summarizes our results of operations for the periods presented: Year Ended December 31, Change 2024 2023 Amount Percent Service revenue, net $ 442,609,814 $ 401,374,701 $ 41,235,113 10.3 % Cost of revenue 395,431,491 354,496,441 40,935,050 11.5 % Gross profit 47,178,323 46,878,260 300,063 0.6 % Selling, general and administrative 64,021,052 45,441,659 18,579,393 40.9 % Change in fair value of contingent consideration liabilities — (150,093) 150,093 (100.0) % Depreciation and amortization 4,991,863 5,038,218 (46,355) (0.9) % (Loss) income from operations (21,834,592) (3,451,524) (18,383,068) + Loss on debt extinguishment 1,213,379 189,951 1,023,428 + Advisory fees paid in merger 43,000,000 — 43,000,000 + Interest expense 12,004,860 17,538,816 (5,533,956) (31.6) % Other expense 52,047,957 — 52,047,957 + Net loss before (provision for)/benefit from income taxes (130,100,788) (21,180,291) (108,920,497) + Income tax (expense)/benefit (5,379,102) 5,928,271 (11,307,373) + Net loss $ (135,479,890) $ (15,252,020) $ (120,227,870) + Net loss per share, basic and diluted $ (3.68) $ (0.60) $ (3.08) + Weighted average shares outstanding, basic and diluted 36,783,626 25,423,729 11,359,897 44.7 % ___________________________________ + - change greater than ± 100% Service Revenue, Net Service revenue, net of discounts, for years ended December 31, 2024 and 2023 consisted of the following: Year Ended December 31, 2024 2023 Temporary placement services $ 438,820,825 $ 396,739,483 Permanent placement and other services 3,788,989 4,635,218 Total service revenues, net $ 442,609,814 $ 401,374,701 Service revenue, net was $442,609,814 and $401,374,701 for the years ended December 31, 2024 and 2023, respectively, an increase of $41,235,113, or 10.3%.
Biggest changeComparison of the Years Ended December 31, 2025 and 2024: Certain related party and non-related party financial statement line-item amounts have been aggregated for purposes of analysis below, which is consistent with management’s evaluation of its business results. 37 The following table summarizes our results of operations for the periods presented: Year Ended December 31, Change 2025 2024 Amount Percent Service revenue, net $ 435,878,730 $ 442,609,814 $ (6,731,084) (1.5) % Cost of revenue 389,892,967 395,431,491 (5,538,524) (1.4) % Gross profit 45,985,763 47,178,323 (1,192,560) (2.5) % Selling, general and administrative 91,289,682 64,021,052 27,268,630 42.6 % Depreciation and amortization 4,928,514 4,991,863 (63,349) (1.3) % (Loss) income from operations (50,232,433) (21,834,592) (28,397,841) + Loss on debt extinguishment — 1,213,379 (1,213,379) (100.0) % Advisory fees paid in merger — 43,000,000 (43,000,000) (100.0) % Interest expense 9,164,495 12,004,860 (2,840,365) (23.7) % Other expense — 52,047,957 (52,047,957) (100.0) % Net loss before provision for income taxes (59,396,928) (130,100,788) 70,703,860 (54.3) % Income tax expense (33,991) (5,379,102) 5,345,111 (99.4) % Net loss $ (59,430,919) $ (135,479,890) $ 76,048,971 (56.1) % Net loss per share, basic and diluted $ (1.08) $ (3.68) $ 2.60 (70.7) % Weighted average shares outstanding, basic and diluted 54,846,155 36,783,626 18,062,529 49.1 % ___________________________________ + - change greater than ± 100% Service Revenue, Net Service revenue, net of discounts, for years ended December 31, 2025 and 2024 consisted of the following: Year Ended December 31, 2025 2024 Temporary placement services $ 431,401,261 $ 438,820,825 Permanent placement and other services 4,477,469 3,788,989 Total service revenues, net $ 435,878,730 $ 442,609,814 Service revenue, net was $435,878,730 and $442,609,814 for the years ended December 31, 2025 and 2024, respectively, a decrease of $6,731,084, or 1.5%.
If an event of default should occur under the Merger Note, the Merger Note will bear interest at the rate of 7% per annum commencing upon the date of such event of default and will be convertible into shares of our common stock at a price per share that equals the lowest daily volume weighted average price per share (VWAP) during the five trading days immediately preceding the date on which the applicable conversion notice is delivered to us, but not less than 80% of the price per share in our Initial Capital Raise, provided, however, that the number of shares of our common stock issuable upon conversion of the Merger Note will not exceed 19.99% of the number of our outstanding shares of common stock without shareholder approval.
If an event of default should occur under the Merger Note, the Merger Note will bear interest at the rate of 7% per annum commencing upon the date of such event of default and will be convertible into shares of our common stock at a price per share that equals the lowest daily volume weighted average price per share (VWAP) during the five trading days immediately preceding the date on which the applicable conversion 44 notice is delivered to us, but not less than 80% of the price per share in our Initial Capital Raise, provided, however, that the number of shares of our common stock issuable upon conversion of the Merger Note will not exceed 19.99% of the number of our outstanding shares of common stock without shareholder approval.
To determine revenue recognition for arrangements that an entity determines are within the scope of ASC Topic 606 — “ Revenue From Contracts with Customers ” (“ASC 606”), the Company performs the following five steps: (i) it identifies the contracts with a customer; (ii) it identifies the performance obligations in the contract; (iii) it determines the transaction price; (iv) it allocates the transaction price to the performance obligations in the contract; and (v) it recognizes revenue when (or as) the Company satisfies a performance obligation.
To determine revenue recognition for arrangements that an entity determines are within the scope of ASC Topic 606 — Revenue From Contracts with Customers (“ASC 606”), the Company performs the following five steps: (i) it identifies the contracts with a customer; (ii) it identifies the performance obligations in the contract; (iii) it determines the transaction price; (iv) it allocates the transaction price to the performance obligations in the contract; and (v) it recognizes revenue when (or as) the Company satisfies a performance obligation.
Most engagement professionals placed on assignment by the Company are legally our employees while they are working on assignments. The Company pays all related costs of employment, including workers’ compensation insurance, state and federal unemployment taxes, social security, and certain fringe benefits. The Company assumes the risk of acceptability of its employees to its customers.
Most engagement professionals placed on assignment by the Company are legally our employees while they are working on assignments. The Company pays all related costs of employment, including workers’ compensation insurance, 48 state and federal unemployment taxes, social security, and certain fringe benefits. The Company assumes the risk of acceptability of its employees to its customers.
Earnout Notes As contingent consideration milestones are met in connection with the Transaction Agreement, Lyneer and IDC can elect to pay the milestone payments in cash or to issue notes payable. During 2022, Lyneer and IDC as co-borrowers have issued nine promissory notes in the aggregate principal amount of $13,494,133.
Earnout Notes As contingent consideration milestones are met in connection with the Transaction Agreement, Lyneer and IDC can elect to pay the milestone payments in cash or to issue notes payable. During 2022, Lyneer and IDC as co-borrowers issued nine promissory notes in the aggregate principal amount of $13,494,133.
LMH had the right, but not the obligation to require IDC to purchase LMH’s interest in the Company (the “LMH Put”). On February 28, 2024, LMH exercised its right to put the LMH Units to IDC and entered into a Put-Call Option Note on April 17, 2024, in the amount of $10,796,912.
Put-Option LMH had the right, but not the obligation to require IDC to purchase LMH’s 10% interest in the Company (the “LMH Put”). On February 28, 2024, LMH exercised its right to put the LMH Units to IDC and entered into a Put-Call Option 46 Note on April 17, 2024, in the amount of $10,796,912.
As we do not believe we will have sufficient liquidity and capital resources to pay the Merger Note in full when due, as well as to restructure our joint and several debt obligations, we believe we will have to sell additional equity or debt securities prior to the maturity date of the Merger Note to pay or refinance the Merger Note when due.
As we do not currently believe we will have sufficient liquidity and capital resources to pay the Merger Note in full when due, as well as to restructure our joint and several debt obligations, we believe we will have to sell additional equity or debt securities prior to the maturity date of the Merger Note to pay or refinance the Merger Note when due.
The Put-Call Option Note provides for the acceleration of payment principal under certain conditions, including upon a change of control, as defined. The Put-Call Option Note bears interest at a stated annual interest rate of 5.25% which is payable quarterly in arrears commending December 31, 2024. IDC may prepay the Put-Call Option Note at any time without premium or penalty.
The Put-Call Option Note provides for the acceleration of payment principal under certain conditions, including upon a change of control, as defined. The Put-Call Option Note bears interest at a stated annual interest rate of 5.25% which is payable quarterly in arrears commencing December 31, 2024. IDC may prepay the Put-Call Option Note at any time without premium or penalty.
Advisory Fees Paid in the Merger Advisory fees paid in the Merger for the years ended December 31, 2024 and 2023 were as follows: Year Ended December 31, 2024 2023 Advisory fees paid in the merger $ 43,000,000 $ — The stockholders of Atlantic Acquisition Corp. were issued an aggregate of 18,220,338 shares of Company’s common stock at a market value of $2.36 per share, or $43,000,000 in the aggregate, on the date of the Merger.
Advisory Fees Paid in the Merger Advisory fees paid in the Merger for the years ended December 31, 2025 and 2024 were as follows: Year Ended December 31, 2025 2024 Advisory fees paid in the merger $ — $ 43,000,000 The stockholders of Atlantic Acquisition Corp. were issued an aggregate of 18,220,338 shares of Company’s common stock at a market value of $2.36 per share, or $43,000,000 in the aggregate, on the date of the Merger.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion relates to Atlantic International Corp. (Atlantic or the Company) and its consolidated subsidiaries and should be read together with the Company’s Consolidated Financial Statements and accompanying notes included in Part IV, Item 8.— Financial Statements and Supplementary Data.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion relates to Atlantic International Corp. (Atlantic or the Company) and its consolidated subsidiaries and should be read together with the Company’s Consolidated Financial Statements and accompanying notes included in Item 8.— Financial Statements and Supplementary Data.
For the years ended December 31, 2024 and December 31, 2023 no impairments were recognized on our intangible assets. Income Taxes Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis.
For the years ended December 31, 2025 and December 31, 2024 no impairments were recognized on our intangible assets. Income Taxes Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis.
Merger Note In connection with the closing of the Merger, we issued to IDC the Merger Note in the principal amount of $35,000,000 that originally matured on September 30, 2024. The Merger Note does not bear interest and is not convertible prior to an event of default under the Merger Note.
Merger Note In connection with the closing of the Merger on June 18, 2024, we issued to IDC the Merger Note in the principal amount of $35,000,000 that originally matured on September 30, 2024. The Merger Note does not bear interest and is not convertible prior to an event of default under the Merger Note.
The Put-Call Option Note provides that IDC owned one hundred percent (100%) of all the membership interests in Lyneer Investments and requires IDC to pay 50% of outstanding principal six months after issuance with the remaining 50% payable in six equal quarterly payments beginning on December 31, 2024 and continuing until the maturity date of June 30, 2026.
The Put-Call Option Note provides that IDC would own one hundred percent (100%) of all the membership interests in Lyneer Investments and requires IDC to pay 50% of outstanding principal six months after issuance with the remaining 50% payable in six equal quarterly payments beginning on December 31, 2024 and continuing until the maturity date of June 30, 2026.
Intangible Assets The Company’s identifiable intangible assets as of December 31, 2024 and December 31, 2023 consisted of customer relationships and tradenames and were initially recognized as a result of the Transaction and represent definite lived intangible assets. The Company does not currently have any indefinite lived intangible assets.
Intangible Assets The Company’s identifiable intangible assets as of December 31, 2025 and December 31, 2024 consisted of customer relationships and tradenames and were initially recognized as a result of the Transaction and represent definite lived intangible assets. The Company does not currently have any indefinite lived intangible assets.
The facility was partially used to finance the acquisition of Lyneer by IDC in August 2021, with additional borrowing capacity available under the Revolver to finance Lyneer’s working capital. All of Lyneer’s cash collections and disbursements are currently linked with bank accounts associated with the lender and funded using the Revolver.
The facility was partially used to finance the acquisition of Lyneer by IDC in August 2021, with additional borrowing capacity available under the Revolver to finance Lyneer’s working capital. All of Lyneer’s cash collections and disbursements were linked with bank accounts associated with the lender and funded using the Revolver.
Investing Activities Cash used in investing activities for the year ended December 31, 2024 decreased compared to December 31, 2023 and consisted entirely of purchases of property and equipment.
Investing Activities Cash used in investing activities for the year ended December 31, 2025 decreased compared to December 31, 2024 and consisted entirely of purchases of property and equipment.
Payments on each of the Earnout Notes are due in quarterly installments through their maturity date of January 16, 2026 and each note bears interest at a rate of 6.25% per annum. The Company missed the March 31, 2024 principal and interest payment and the interest rate increased to the default rate of 11.25%.
Payments on each of the Earnout Notes were due in quarterly installments through their maturity date of January 16, 2026 and each note bears interest at a rate of 6.25% per annum. The Company missed the March 31, 2024 principal and interest payment and all subsequent payments and the interest rate increased to the default rate of 11.25%.
The Put-Call Option Note contains customary covenants. As part of the consummation of the Merger on June 18, 2024, IDC paid $2,000,000 to LMH as a partial payment on the Put-Call Option Note.
The Put-Call Option Note contains customary covenants. As part of the consummation of the Merger on June 18, 2024, IDC paid $2,000,000 to LMH as a partial payment on the Put-Call Option Note. IDC is in default to LMH.
As a result of the Merger, the Company is required to file short-term income tax returns for the periods of January 1, 2024 to June 18, 2024 and June 19, 2024 to December 31, 2024. For the first short-period, Lyneer and IDC will file consolidated income tax returns in certain states.
As a result of the Merger, the Company was required to file short-term income tax returns for the periods of January 1, 2024 to June 18, 2024 and June 19, 2024 to December 31, 2024. For the first short-period, Lyneer and IDC filed consolidated income tax returns in certain states.
Temporary Placement Services Revenue Temporary placement services revenue from contracts with customers are recognized in the amount which the Company has a right to invoice when the services are rendered by its engagement professionals. The Company invoices its 34 Table of Contents customers for temporary placement services concurrently with each periodic payroll which coincides with the services provided.
Temporary Placement Services Revenue Temporary placement services revenue from contracts with customers are recognized in the amount which the Company has a right to invoice when the services are rendered by its engagement professionals. The Company invoices its customers for temporary placement services concurrently with each periodic payroll which coincides with the services provided.
On January 16, 2024, Lyneer and IDC as co-borrowers issued Year 2 Earnout Notes to LMH with total balances of $2,013,041. The balance of the Year 2 Earnout Notes payable to LMH was $0 for both December 31, 2024 and December 31, 2023.
The balance of the Year 1 Earnout Notes payable to LMH was $0 for both December 31, 2025 and December 31, 2024. On January 16, 2024, Lyneer and IDC as co-borrowers issued Year 2 Earnout Notes to LMH with a total balance of $2,013,041.
This evaluation includes considerations related to financial and other covenants contained in Atlantic’s credit facilities, as well as Atlantic’s forecasted liquidity. Atlantic has concluded that there is no substantial doubt about its ability to continue as a going concern for at least one year from the date of issuance of its consolidated financial statements.
This evaluation includes considerations related to covenants contained in Atlantic’s credit facilities, as well as Atlantic’s forecasted liquidity for the new combined company including Circle8. Atlantic has concluded that there is substantial doubt about its ability to continue as a going concern for at least one year from the date of issuance of its consolidated financial statements.
The increase in selling, general and administrative costs as a percentage of service revenue, net was due primarily to higher transactions costs related to the Merger in the year ended December 31, 2024 compared to the year ended December 31, 2023.
The increase in selling, general and administrative costs as a percentage of service revenue, net was due primarily to higher stock compensation expense and lower transactions costs related to the Merger in the year ended December 31, 2025 compared to the year ended December 31, 2024.
Upon the consummation of the Merger, the Company determined that it was no longer probable that IDC would default on its portion of the joint and several obligations and deconsolidated the joint and several debt obligations in the accompanying financial statements. In the Allocation Agreement, IDC and Mr.
Upon the consummation of the Merger on June 18, 2024, the Company determined that it was no longer probable that IDC would default on its portion of the joint and several obligations and deconsolidated the joint and several debt obligations in the accompanying financial statements.
Lyneer and IDC did not make the principal and interest payments due July 31, 2023 and October 31, 2023 on the Seller Notes as payments to any other debt holders was prohibited by the administrative agent of the lender under the Revolver.
Lyneer and IDC did not make the principal and interest payments due July 31, 2023 and October 31, 2023 and any subsequent dates on the Seller Notes as payments to any other debt holders were prohibited by the administrative agent of the lender under the previous lender and also the current Revolver.
As a percentage of service revenue, net, selling, general and administrative costs were 14.5% in the year ended December 31, 2024 as compared to 11.3% in the year ended December 31, 2023.
As a percentage of service revenue, net, selling, general and administrative costs were 20.9% in the year ended December 31, 2025 as compared to 14.5% in the year ended December 31, 2024.
The Omnibus Amendment changed the interest rate of the Seller Notes and the Earnout Notes to 11.25% per annum from 6.25% per annum for all remaining payments. 31 Table of Contents On January 16, 2024, Lyneer and IDC signed an amendment to the Omnibus Agreement with the holders of the Seller Notes and the Earnout Notes to defer the missed July 31, 2023 and October 31, 2023 principal and interest payments, each in the amount of $1,575,000 plus accrued interest, together with the principal payment in the amount of $1,575,000 plus accrued interest that is payable on January 31, 2024, all of which were payable on February 28, 2024.
On January 16, 2024, Lyneer and IDC signed an amendment to the Omnibus Agreement with the holders of the Seller Notes and the Earnout Notes to defer the missed July 31, 2023 and October 31, 2023 principal and interest payments, each in the amount of $1,575,000 plus accrued interest, together with the principal payment in the amount of $1,575,000 plus accrued interest that is payable on January 31, 2024, all of which were payable on February 28, 2024.
However, it is expected that the Company will not be legally released from its joint and several obligations with respect to the indebtedness to be assumed by IDC until payment in full of the Merger Note, which originally matured on September 30, 2024.
Gattani agreed to implement a plan to refinance or otherwise satisfy the joint and several indebtedness. It is expected that the Company will not be legally released from its joint and several obligations with respect to the indebtedness to be assumed by IDC until payment in full of the Merger Note, which originally matured on September 30, 2024.
In connection with this arrangement the Lyneer has recorded a liability payable to IDC for taxes payable by IDC which represent taxes attributable to Lyneer’s operations included on consolidated state and local income tax returns filed by IDC. These amounts are calculated by determining Lyneer’s taxable income multiplied by the applicable tax rate.
In connection with this arrangement the Company recorded a liability payable to IDC for taxes payable by IDC which represented taxes attributable to the Company’s operations included on consolidated state and local income tax returns filed by IDC. These amounts were determined by calculating the Company’s taxable income multiplied by the applicable tax rate.
Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. 35 Table of Contents The Company assesses, on a quarterly basis, the likelihood that deferred tax assets will be realized in accordance with the provisions of ASC Topic 740 — “ Income Taxes ” (“ASC 740”).
The Company assesses, on a quarterly basis, the likelihood that deferred tax assets will be realized in accordance with the provisions of ASC Topic 740 — Income Taxes (“ASC 740”). ASC 740 requires that a valuation allowance be established when it is “more likely than not” that all, or a portion of, deferred tax assets will not be realized.
Interest Expense Interest expense for the years ended December 31, 2024 and 2023 were as follows: Year Ended December 31, 2024 2023 Interest expense $ 12,004,860 $ 17,538,816 Interest expense for years December 31, 2024 and 2023 was $12,004,860 and $17,538,816, respectively.
Interest Expense Interest expense for the years ended December 31, 2025 and 2024 were as follows: Year Ended December 31, 2025 2024 Interest expense $ 9,164,495 $ 12,004,860 Interest expense for years December 31, 2025 and 2024 was $9,164,495 and $12,004,860, respectively.
Cost of revenue consists primarily of fixed and variable directs costs, including 26 Table of Contents payroll, payroll taxes and employee benefit costs.
Cost of revenue consists primarily of fixed and variable direct costs, including payroll, 38 payroll taxes and employee benefit costs.
Amounts payable to IDC of this nature amounted to $548,432 and $522,472 as of December 31, 2024 and December 31, 2023, respectively, and are included in “accrued expenses and other current liabilities” and “due to related parties” on the accompanying consolidated balance sheets as of December 31, 2024, and December 31, 2023, respectively.
Amounts payable to IDC of this nature amounted to $548,432 for both December 31, 2025 and December 31, 2024, and are included in “other receivables” and “due to related parties” on the accompanying consolidated balance sheets as of December 31, 2025, and December 31, 2024, respectively.
Loss on debt extinguishment during the year ended December 31, 2023 relates to the Fourth Amendment and Forbearance Agreement to the Revolver being treated as a debt extinguishment after the Company’s analysis of ASC Topic 470 – Debt .
Loss on Debt Extinguishment Loss on debt extinguishment, for the years ended December 31, 2025 and 2024 were as follows: Year Ended December 31, 2025 2024 Loss on debt extinguishment $ — $ 1,213,379 39 Loss on debt extinguishment during the year ended December 31, 2024 relates to the Seventh Amendment and Forbearance Agreement to the Revolver being treated as a debt extinguishment after the Company’s analysis of ASC Topic 470 — Debt (“ASC 470”) .
Total Operating Expenses Total operating expenses for the years ended December 31, 2024 and 2023 consisted of the following: Year Ended December 31, 2024 2023 Selling, general and administrative $ 64,021,052 $ 45,441,659 Change in fair value of contingent consideration liabilities — (150,093) Depreciation and amortization 4,991,863 5,038,218 Total operating expenses $ 69,012,915 $ 50,329,784 The changes in each financial statement line item for the respective periods are described below.
Total Operating Expenses Total operating expenses for the years ended December 31, 2025 and 2024 consisted of the following: Year Ended December 31, 2025 2024 Selling, general and administrative $ 91,289,682 $ 64,021,052 Depreciation and amortization 4,928,514 4,991,863 Total operating expenses $ 96,218,196 $ 69,012,915 The changes in each financial statement line item for the respective periods are described below.
IDC, Lyneer and Prateek Gattani, IDC’s Chief Executive Officer and our Chairman of the Board following the Merger, have entered into an Allocation Agreement dated as of December 31, 2023, pursuant to which IDC agreed that, subject to subordination to the taxes as between IDC and Lyneer, in connection with the Merger, the Term Note and the Seller Notes, will either be paid in full or assumed by IDC, and all but $35 million of the Revolver will be paid in full or assumed by IDC, and Lyneer will have no further liability or responsibility for such indebtedness.
Pursuant to the terms of the Allocation Agreement, IDC agreed that, subject to subordination to the taxes as between IDC and Lyneer, in connection with the Merger, the Term Note and the Seller Notes, will either be paid in full or assumed by IDC, and Lyneer will have no further liability or responsibility for such indebtedness.
Financing Activities Cash provided by financing activities decreased for the year ended December 31, 2024 compared to the year ended December 31, 2023 and consisted of borrowings and payments under the Company’s debt arrangements of the Revolver and Seller Notes (as described below).
Financing Activities Cash provided by financing activities decreased for the year ended December 31, 2025 compared to the year ended December 31, 2024 and consisted of borrowings and payments under the Company’s debt arrangements of the Revolver, and the New Revolving Credit Facility and entered into additional debt obligations.
Permanent placement and other services decreased $846,229 or 18.3% due to lower permanent job demand as companies cut back on hiring permanent positions. Cost of Revenue and Gross Profit Gross profit reflects the difference between realized service revenue, net and cost of revenues for providing temporary and permanent placement solutions.
Permanent placement and other services increased $688,480 or 18.2% due to higher permanent job demand. Cost of Revenue and Gross Profit Gross profit reflects the difference between realized service revenue, net and cost of revenues for providing temporary and permanent placement solutions.
Credit Agreement The Lenders’ consent to IDC’s transfer of ownership of the equity of Lyneer was conditioned upon substantially the same terms stated above under the Revolver, as well as issuance of a secured bridge loan (“Credit Agreement”), which was entered into on June 18, 2024, the Company entered into a secured bridge loan (“Credit Agreement”) in the principal amount of $1,950,000 at an interest rate of 5% per annum.
Credit Agreement As part of the Merger on June 18, 2024, the Company entered into a secured bridge loan (“Credit Agreement”), which was entered into on the same day, in the principal amount of $1,950,000 at an interest rate of 5% per annum.
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 revolving credit agreement (the “Revolver”).
As receipts from client partners lag behind payments to personnel, working capital requirements increase substantially in periods of growth. Prior to its acquisition of Circle8, Atlantic’s primary sources of liquidity have historically been cash generated from operations supported through borrowings under its previous Revolver.
Cash flows for the years ended December 31, 2024 and 2023 consisted of the following: Year Ended December 31, 2024 2023 Net cash used in operating activities $ (5,985,036) $ (9,082,597) Net cash used in investing activities (73,456) (73,711) Net cash provided by financing activities 5,384,241 8,793,074 Net decrease in cash and cash equivalents $ (674,251) $ (363,234) Cash flows used in operating activities for the year ended December 31, 2024 compared to the year ended December 31, 2023 was higher due to an increase in accounts receivable and accrued expenses.
See Note 8: Debt for further information. 41 Cash flows for the years ended December 31, 2025 and 2024 consisted of the following: Year Ended December 31, 2025 2024 Net cash used in operating activities $ (4,396,505) $ (5,985,036) Net cash used in investing activities (66,768) (73,456) Net cash provided by financing activities 3,865,731 5,384,241 Net decrease in cash and cash equivalents $ (597,542) $ (674,251) Cash flows used in operating activities for the year ended December 31, 2025 compared to the year ended December 31, 2024 was lower due to an increase in and accrued expenses and other current liabilities.
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 contingent consideration and debt payments.
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.
Principal payments on the Seller Notes are due in quarterly installments of $1,575,000, and $3,150,000 is due at their amended maturity dates of April 30, 2024. The Seller Notes bear interest at an amended fixed rate of 11.25% per annum. The Seller Notes represent unsecured borrowings and are subordinated to the Revolver and to the Term Note.
The Seller Notes bear interest at an amended fixed rate of 11.25% per annum. The Seller Notes represent unsecured borrowings and are subordinated to the Revolver and to the Term Note.
These borrowings are determined by Lyneer’s availability based on a formula of billed and unbilled accounts receivable as defined in the loan agreement. As of December 31, 2024 and December 31, 2023, the total balance on the Revolver was $53,983,962 and $90,906,217, respectively.
These borrowings were determined by Lyneer’s availability based on a formula of billed and unbilled accounts receivable as defined in the loan agreement.
The maturity date of the Credit Agreement was originally September 30, 2024. However, mandatory prepayments shall be made from the Initial Capital Raise, on the issuance of new debt or new equity interests, or upon a change of control.
However, mandatory prepayments shall be made from the Initial Capital Raise, on the issuance of new debt or new equity interests, or upon a change of control. Conditions have not been met to make mandatory prepayments. On July 22, 2024, the Company entered into an amendment to extend the maturity date of the Credit Agreement to June 18, 2026.
Off Balance Sheet Arrangements The Company has not entered into any off-balance sheet arrangements and does not have any holdings in variable interest entities.
Off Balance Sheet Arrangements The Company did not have any off-balance sheet arrangements or any holdings in variable interest entities as of December 31, 2025.
Total amounts payable to IDC, including the above taxes payable to IDC, amounted to $2,091,035 and $4,384,178 as of December 31, 2024, and December 31, 2023, respectively and are included in “accrued expenses and other current liabilities” and “due to related parties” on the accompanying consolidated balance sheets as of December 31, 2024, and December 31, 2023, respectively.
The total amounts payable to IDC amounted to $2,091,035 as of December 31, 2024 and is included in “due to related parties” on the accompanying consolidated balance sheets. This consists of $1,542,603 related to a payable to IDC for expenses they paid for Lyneer and $548,432 payable to IDC for taxes payable.
Other Expense Other expense for the years ended December 31, 2024 and 2023 were as follows: Year Ended December 31, 2024 2023 Other expense $ 52,047,957 $ — Other expense for the year ended December 31, 2024 related to accrued amounts pertaining to a potential settlement for legacy stockholders and stock compensation expense for third parties as advisors to the Company for RSUs. 28 Table of Contents Income Tax (Expense) Benefit Provision for income taxes for the years ended December 31, 2024 and 2023 were as follows: Year Ended December 31, 2024 2023 Income tax (expense)/benefit $ (5,379,102) $ 5,928,271 Income tax expense was $5,379,102 for the year ended December 31, 2024 and an income tax benefit of $5,928,271 for the year ended December 31, 2023, an increase of $11,307,373, was primarily due to the establishment of a valuation allowance on the Company’s deferred tax assets.
Other Expense Other expense for the years ended December 31, 2025 and 2024 were as follows: Year Ended December 31, 2025 2024 Other expense $ — $ 52,047,957 Other expense for the year ended December 31, 2024 related to accrued amounts pertaining to a potential settlement for legacy stockholders and stock compensation expense for third parties as advisors to the Company for RSUs.
Additionally, the Term Note is covered by the Allocation Agreement discussed above. Seller Notes As part of the purchase price consideration for the Transaction, Lyneer and IDC as co-borrowers issued various Seller Notes to former owners in the aggregate principal amount of $15,750,000.
Seller Notes As part of the purchase price consideration for the Transaction, Lyneer and IDC as co-borrowers issued various Seller Notes to former owners in the aggregate principal amount of $15,750,000. Principal payments on the Seller Notes are due in quarterly installments of $1,575,000, and $3,150,000 is due at their amended maturity dates of April 30, 2024.
Cost of revenue and gross profit for the years ended December 31, 2024 and 2023 consisted of the following: Year Ended December 31, 2024 2023 Service revenue, net $ 442,609,814 $ 401,374,701 Cost of revenue 395,431,491 354,496,441 Gross profit $ 47,178,323 $ 46,878,260 Cost of revenue for the years ended December 31, 2024 and 2023 was $395,431,491 and $354,496,441, respectively, an increase of $40,935,050 or 11.5%.
Cost of revenue and gross profit for the years ended December 31, 2025 and 2024 consisted of the following: Year Ended December 31, 2025 2024 Service revenue, net $ 435,878,730 $ 442,609,814 Cost of revenue 389,892,967 395,431,491 Gross profit $ 45,985,763 $ 47,178,323 Cost of revenue for the years ended December 31, 2025 and 2024 was $389,892,967 and $395,431,491, respectively, a decrease of $5,538,524 or 1.4%.
ASC 740 requires that a valuation allowance be established when it is “more likely than not” that all, or a portion of, deferred tax assets will not be realized. The assessment considers all available positive or negative evidence, including the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies.
The assessment considers all available positive or negative evidence, including the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies. 49
On July 22, 2024, the Company entered into an amendment to extend the maturity date of the Credit Agreement to June 18, 2026. Promissory Note From April 29, 2019 to April 29, 2020, the Company entered into a series of non-convertible promissory notes (the “Promissory Notes”) with St. Laurent Investments LLC amounting to $1,375,000.
Promissory Note From April 29, 2019 to April 29, 2020, the Company entered into a series of non-convertible promissory notes (the “Promissory Notes”) with St. Laurent Investments LLC (“St. Laurent”) amounting to $1,375,000. The Promissory Notes had a one-year term, most recently extended through July 31, 2025 or a later date to be mutually agreed upon.
This increase was predominately due to the higher revenues from Lyneer’s temporary placement services business, which increased $42,081,342 or 10.6% in the year ended December 31, 2024 as compared to the same period in 2023 due primarily to a strong sales initiative by the Company.
This decrease was predominately due to lower revenues from Lyneer’s temporary placement services business, which decreased $7,419,564 or 1.7% in the year ended December 31, 2025 as compared to the same period in 2024 due primarily to a decrease in the revenues associated with our largest client.
Selling, General and Administrative Costs Selling, general and administrative expenses for the years ended December 31, 2024 and 2023 were $64,021,052 and $45,441,659, respectively, an increase of $18,579,393, or 40.9%, due primarily to higher transaction costs related to the Merger, stock compensation expense and bad debt expense of $957,031 and $1,526,985 during the years ended December 31, 2024 and 2023, respectively, partially offset by cost cutting measures.
Selling, General and Administrative Costs Selling, general and administrative expenses for the years ended December 31, 2025 and 2024 were $91,289,682 and $64,021,052, respectively, an increase of $27,268,630, or 42.6%, due primarily to higher stock compensation expense and a full year of expenses as a result of the Merger compared to five and one-half months during the years ended December 31, 2025 and 2024, respectively, partially offset by cost cutting measures and lower transactional expenses related to the Merger.
On November 15, 2022, Lyneer and IDC as co-borrowers issued Year 1 Earnout Notes to LMH with total balances of November 15, 2022. The balance of the Year 1 Earnout Notes payable to LMH was $0 and $5,127,218 as of December 31, 2024 and December 31, 2023, respectively.
LMH was 90% owned by Lyneer’s Chief Financial Officer, James Radvany, and its Chief Executive Officer, Todd McNulty, each of whom owned 44.5% of LMH. Earnout Notes On November 15, 2022, Lyneer and IDC as co-borrowers issued Year 1 Earnout Notes to LMH with total balances of $5,127,218.
In the case of certain of those obligations, IDC generally 33 Table of Contents makes certain interest and principal payments to the lenders and collects reimbursement from Lyneer.
Transactions with IDC Lyneer and IDC are co-borrowers and are jointly and severally liable for principal and interest payments under the previous Revolver, the Term Note, the Seller Notes and the Earnout Notes. In the case of certain of those obligations, IDC generally makes certain interest and principal payments to the lenders and collects reimbursement from Lyneer.
The Earnout Note liability was $0 and $13,494,133 at the periods ended December 31, 2024 and December 31, 2023, respectively. 2023 Amendment to Seller and Earnout Notes Lyneer and IDC did not make the principal and interest payments due on the Seller Notes and the Earnout Notes during 2023 or the first six months of 2024.
The Earnout Notes are currently in default, but the note holders can take no action pursuant to the inter-creditor agreement with SLR. 2023 Amendment to Seller and Earnout Notes Lyneer and IDC did not make the principal and interest payments due on the Seller Notes and the Earnout Notes during 2023 or the first six months of 2024.
Total cash paid for interest for the years ended December 31, 2024 and December 31, 2023 32 Table of Contents totaled $6,926,853 and $9,150,636, respectively, with the remaining portion of the interest expense as non-cash due to the PIK interest and change in values of the accrued interest liability and amortization of deferred financing costs.
The remaining portion of the interest expense was non-cash due to PIK interest, the change in values of the accrued interest liability and amortization of deferred financing costs. Assessment of Liquidity Position The Company has assessed its liquidity position as of December 31, 2025 and December 31, 2024.
Related Party Transactions Transactions with Lyneer Management Holdings LLC (“LMH”) LMH was a non-controlling member of the Company with a 10% ownership interest at December 31, 2023, prior to the Merger. The remaining 90% was owned by Lyneer’s Chief Financial Officer, James Radvany, and its Chief Executive Officer, Todd McNulty, each of whom owned 44.5% of LMH.
Refer To Note 3: Summary of Significant Accounting Policies, Liquidity. Related Party Transactions Transactions with Lyneer Management Holdings LLC (“LMH”) LMH was a non-controlling member of the Company with a 10% ownership interest at December 31, 2023.
Lyneer has not refinanced or restricted the credit facility and missed all payments of the Seller Notes and the Earnout Notes during 2024 and is in default of the Seller Notes and Earnout Notes. The Seller Notes and Earnout Notes are covered by the Allocation Agreement discussed above.
Lyneer had not refinanced or restructured the credit facility and missed all payments of the Seller Notes and the Earnout Notes during 2024 and is currently in default of the Seller Notes and Earnout Notes, but the note holders can take no action pursuant to the inter-creditor agreement with SLR.
The Term Note is subordinated to the Revolver and initially bore interest at the stated interest rate of 14% per annum. As of December 31, 2024 and December 31, 2023, Lyneer had recognized liability balances on the Term Note of $0, and $34,223,489, respectively.
The Term Note is subordinated to the Revolver and initially bore interest at the stated interest rate of 14% per annum, and currently has a default interest rate of 19%.
Interest expense incurred on the Earnout Notes to LMH totaled $292,996 and $526,156 for the years ended December 31, 2024 and 2023, respectively. Transactions with IDC Lyneer and IDC are co-borrowers and are jointly and severally liable for principal and interest payments under the Revolver, the Term Note, the Seller Notes and the Earnout Notes.
The principal balance of the combined Earnout Notes payable to LMH was $0 for both December 31, 2025 and December 31, 2024. Interest expense incurred on the Earnout Notes to LMH totaled $0 and $292,996 for the years ended December 31, 2025 and 2024, respectively.
As of December 31, 2024 and December 31, 2023, the total committed resources available were as follows: December 31, 2024 December 31, 2023 Cash and Cash Equivalents $ 678,676 $ 1,352,927 Committed Liquidity Resources Available: Short-term Revolving Credit Facility (1,299,463) (22,518,585) Total Committed Resources Available $ (620,787) $ (21,165,658) As noted above , pursuant to the Forbearance Agreement, following the payment of the Merger Note, Lyneer intends to replace its obligations under the Revolver with a new revolving credit facility with a borrowing capacity of up to $60,000,000.
As of December 31, 2025 and December 31, 2024, the total committed resources available were as follows: December 31, 2025 December 31, 2024 Cash and Cash Equivalents $ 81,134 $ 678,676 Committed Liquidity Resources Over-advanced (422,756) (1,299,463) Total Committed Resources Over-advanced $ (341,622) $ (620,787) The Company closed on a new ABL lender facility on April 29, 2025, replacing its obligations under the previous Revolver, with an increased borrowing capacity of up to $70,000,000.
The Promissory Notes had a one-year term, most recently extended through July 31, 2025 or a later date to be mutually agreed upon. The Promissory Notes bear interest accruing at the rate of 5% per annum, and increased to 10% for the period from August 1, 2024 through July 31, 2025.
The Promissory Notes bear interest accruing at the rate of 5% per annum, and increased to 10% for the period from August 1, 2024 through July 31, 2025. The Company has accrued interest of $220,161 included in “accrued expenses and other current liabilities” on the accompanying consolidated balance sheets as of December 31, 2025.
However, as IDC and Lyneer were unable to obtain the release of Lyneer from the holders of such indebtedness for accounting purposes, with respect to any of such indebtedness that was not repaid by IDC with the Allocation Agreement not being given effect for accounting purposes and Lyneer will remain jointly and severally liable with IDC to such lenders until such time as such joint and several indebtedness is restructured, at which time IDC will be obligated to repay in full all remaining amounts payable under the Term Note and the Seller Notes and will repay or assume all but approximately $35 million under Revolver.
However, as IDC and Lyneer were unable to obtain the release of Lyneer from the holders of such indebtedness, Lyneer will remain jointly and severally liable with IDC to such lenders until such time as such joint and several indebtedness is restructured.
As a percentage of service revenue, net, gross profit was 10.7% and 11.7% for the years ended December 31, 2024 and 2023, respectively, which decreased due to increasing labor costs and reduced permanent placements.
Gross profit for the years ended December 31, 2025 and 2024 was $45,985,763 and $47,178,323, respectively, a decrease of $1,192,560 or 2.5%. As a percentage of service revenue, net, gross profit was 10.6% and 10.7% for the years ended December 31, 2025 and 2024, respectively, a slight decrease.
IDC is expected to use a portion of the cash proceeds it receives in the Merger to pay down the Revolver following the closing of the Merger. 30 Table of Contents Term Note On August 31, 2021, Lyneer and IDC as co-borrowers entered into a Term Note in the amount of $30,300,000.
The borrowing base calculation is based on Lyneer’s gross accounts receivable less the balance of ineligible balances (defined in the Loan Agreement). 42 Term Note On August 31, 2021, Lyneer and IDC as co-borrowers entered into a Term Note in the amount of $30,300,000.
For the second short-period ended December 31, 2024, Lyneer will file consolidated income tax returns with Atlantic International Corp.
For the second short-period ended December 31, 2024, Lyneer filed consolidated income tax returns with Atlantic International Corp. Total amounts receivable from IDC, amounted to $1,369,833 as of December 31, 2025 and is included in “other assets” on the accompanying consolidated balance sheets.
Interest Expense Total interest expense is comprised of a cash and non-cash component as described in the debt arrangements described above. For the years ended December 31, 2024 and December 31, 2023 total interest expense totaled $12,004,860 and $17,538,816, respectively.
Total amount due to the PEO of $32,894,331 is included in “PEO liability and accrued interest” on the accompanying consolidated balance sheets as of December 31, 2025. 45 Interest Expense Total interest expense is comprised of a cash and non-cash component as described in the debt arrangements above.
The maturity date of the 29 Table of Contents Merger Note has been extended to March 31, 2026. The Company has received conditional approval by a new ABL lender and expects to close on a new credit facility by the end of April 2025.
On April 29, 2025, the Company and IDC entered into an Amended and Restated Convertible Promissory Note for the Merger Note which extended the maturity date to March 31, 2027 On April 29, 2025, the Company closed on a new ABL revolver, replacing the previous Revolver, with a maturity date of April 29, 2028.
As of December 31, 2024 and December 31, 2023, the Company recorded a liability of $42,508,379 and $85,092,695, respectively, and IDC owed the remaining $11,475,583 and $5,813,522, respectively. Total available borrowing capacity on the Revolver as of December 31, 2024 was over-advanced by $1,299,463, net of a $5,000,000 reserve required on the Revolver.
As of December 31, 2025, and December 31, 2024, the Company has recognized liability balances on the Revolver of $49,308,253, including $146,148 of unamortized deferred issuance costs and $42,508,379, including $0 of unamortized deferred issuance costs, respectively. Total available borrowing capacity on the Revolver as of December 31, 2025 was over-advanced by $422,756.
Depreciation and Amortization Depreciation and amortization expense for the years ended December 31, 2024 and 2023 was $4,991,863 and $5,038,218, respectively, a decrease of $46,355 or 0.9%, a slight decrease on a year-over year basis. 27 Table of Contents Loss on Debt Extinguishment Loss on debt extinguishment, for the years ended December 31, 2024 and 2023 were as follows: Year Ended December 31, 2024 2023 Loss on debt extinguishment $ 1,213,379 $ 189,951 Loss on debt extinguishment during the year ended December 31, 2024 relates to the Seventh Amendment and Forbearance Agreement to the Revolver being treated as a debt extinguishment after the Company’s analysis of Accounting Standards Codification (“ASC”) Topic 470 – Debt .
Depreciation and Amortization Depreciation and amortization expense for the years ended December 31, 2025 and 2024 was $4,928,514 and $4,991,863, respectively, a decrease of $63,349 or 1.3%, a slight decrease on a year-over-year basis.
The decrease of $5,533,956, or 31.6%, in year ended December 31, 2024 compared to year ended December 31, 2023 was attributed to the Company deconsolidating the joint and several debt obligations as of the Merger date, partially offset by higher interest rates on the revolving credit facility on a year-over-year basis, an increase in the rates on the term, seller and earnout notes due to amendments in May 2023 and August 2023, and, new earnout notes issued in January 2024.
The decrease of $2,840,365, or 23.7%, in year ended December 31, 2025 compared to year ended December 31, 2024 was the Company deconsolidating the joint and several debt obligations as of the Merger date and a lower interest rate from the previous Revolver as compared to the new Revolver entered into on April 29, 2025, partially offset by the Company incurring $3,588,223 of interest expense related to an agreement with a professional employer organization (“PEO”) which processes the payroll for the Company, related to the unpaid balance.
Removed
The increase in cost of revenue was due primarily to higher service revenue, net driven primarily by higher temporary placement services revenue, net which increased $42,081,342 or 10.6%. Gross profit for the years ended December 31, 2024 and 2023 was $47,178,323 and $46,878,260, respectively, an increase of $300,063 or 0.6%.
Added
The decrease in cost of revenue was due primarily to lower service revenue, net driven primarily by lower temporary placement services revenue due primarily to a decrease in the revenues associated with our largest client., net which decreased $7,419,564 or 1.7%.
Removed
Changes in Fair Value of Contingent Consideration Liabilities Changes in the fair value of contingent consideration liabilities for the years ended December 31, 2024 and 2023 were $0 and $(150,093), respectively. The change of $150,093 reflects the change in fair value of the liability balance.
Added
Income Tax Expense Provision for income taxes for the years ended December 31, 2025 and 2024 were as follows: Year Ended December 31, 2025 2024 Income tax expense $ (33,991) $ (5,379,102) Income tax expense was $33,991 and $5,379,102 for the years ended December 31, 2025 and 2024, respectively, a decrease of $5,345,111, was primarily due to the establishment of a valuation allowance on the Company’s deferred tax assets in 2024. 40 Liquidity & Capital Resources Atlantic’s working capital requirements are primarily driven by personnel payments and client accounts receivable receipts.
Removed
The measurement period for the contingent consideration arrangements expired on August 31, 2023, at which time amounts owed Lyneer to its former owners were computed and represent fixed amounts.
Added
The Company is still in process of compiling and filing consolidated financial statements of Circle8, which is a significant subsidiary of Atlantic following closing of the acquisition on January 23, 2026. Atlantic is the accounting acquirer in this business combination.
Removed
If Atlantic is able to refinance its existing indebtedness as described below, Atlantic believes that the cash generated from operations, together with the borrowing availability under its portion of the Revolver or under any revolving credit facility that Lyneer may enter into to replace the Revolver, would be sufficient to meet its normal working capital needs for at least the 12-month period following the issue date of its financial statements, including investments made, and expenses incurred, in connection with opening new markets throughout the next year.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeItem 7A. Quantitative and Qualitative Disclosures About Market Risk As a Smaller Reporting Company as defined by Rule 12b-2 of the Exchange Act and in Item 10(f)(1) of Regulation S-K, we are electing scaled disclosure reporting obligations and therefore are not required to provide the information requested by this Item 7A. 36 Table of Contents
Biggest changeItem 7A. Quantitative and Qualitative Disclosures About Market Risk As a Smaller Reporting Company as defined by Rule 12b-2 of the Exchange Act and in Item 10(f)(1) of Regulation S-K, we are electing scaled disclosure reporting obligations and therefore are not required to provide the information requested by this Item 7A. 50

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