Financial Analysis

Merger and Acquisition On May 29, 2023 and subsequently amended on June 23, 2023, October 5, 2023, October 17, 2023, November 3, 2023, January 16, 2024, March 7, 2024 and April 15, 2024, the Company, now known as Atlantic International Corp., a Delaware corporation (SeqLL), a Delaware corporation, SeqLL Merger, LLC, a Delaware limited liability company (SeqLL Merger Sub), Atlantic Acquisition Corp., a Delaware corporation (Atlantic), Atlantic Merger LLC, a Delaware limited liability company and a majority-owned subsidiary of Atlantic (Atlantic Merger Sub), Lyneer, IDC and LMH, a Delaware limited liability company (Lyneer Management), entered into an Agreement and Plan of Merger (the Merger Agreement), pursuant to which (i) Atlantic Merger Sub was merged with and into Lyneer with Lyneer continuing as the surviving entity and as an approximately 41.7%-owned subsidiary of Atlantic, and an approximately 58.3%-owned subsidiary of IDC, and (ii) SeqLL Merger Sub was subsequently be merged with and into Lyneer, with Lyneer continuing as the surviving entity and a wholly-owned subsidiary of the Company (collectively referred to as the Merger). On June 4, 2024, the Company entered into an Amended and Restated Agreement and Plan of Reorganization (the Amended Merger Agreement), which amended certain provisions of the Merger Agreement: (i) fixed the number of shares of SeqLL common stock to be issued, (ii) replaced the Cash Consideration that was to be paid with a short-term promissory n …

BusinessCombinationDisclosureTextBlock · excerpt; the full note is in the filing

Note 11: Commitments and Contingencies Litigation The Company is subject to lawsuits and other claims arising in the ordinary course of business. The Company is required to assess the likelihood of any adverse judgments or outcomes to these matters as well as potential ranges of probable losses. A determination of the amount of accrual required, if any, for these contingencies is made after careful analysis of each matter. The required accrual may change in the future due to new developments in a particular matter or changes in approach, such as a change in settlement strategy in dealing with these matters. With respect to material matters for which the Company believes an unfavorable outcome is reasonably possible, the Company has disclosed the nature of the matter and an estimate of potential exposure. The Company believes that the loss for any other litigation matters and claims that are reasonably possible to occur will not have a material adverse effect on the Companys results of operations, financial position or cash flows, although such litigation is subject to certain inherent uncertainties. On February 2, 2018, Michael Smith on his own behalf and on behalf of a putative class of allegedly similarly situated individuals, filed a complaint against various defendants in the Superior Court of California, Los Angeles County, that was subsequently amended to add Lyneer as a defendant on April 28, 2022. The complaint alleges wage and hour claims, and inaccurate wage stateme …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

Debt Some of the Companys debt obligations consist of joint and several liabilities with the Companys parent which are accounted for under ASC 405-40. Lyneer will remain jointly and severally liable with IDC to the lenders of the debt obligations until such time as such joint and several indebtedness is restructured. As of the date of the Merger, the Company deconsolidated the joint and several liabilities with regard to the Debt Allocation Agreement, dated December 31, 2023, between Lyneer and IDC. See below for further discussion. The table below provides a breakdown of the Companys recognized debt: December 31, 2025 December 31, 2024 Revolver $ 49,454,401 $ 42,508,379 Credit Agreement 1,950,000 1,950,000 Promissory Note 1,375,000 1,375,000 Merger Note 28,943,615 35,000,000 Other debt 3,266,445 Less: unamortized debt issuance costs (324,421) (244,565) Total debt $ 84,665,040 $ 80,588,814 Current portion $ 55,838,759 $ 43,883,379 Non-current portion $ 28,826,281 $ 36,705,435 On April 29, 2025, the Company closed on a new ABL lender with a maturity date of April 29, 2028. See below for further discussion. Debt Allocation Agreement Lyneer and IDC entered into a debt allocation agreement (the Allocation Agreement) dated as of December 31, 2023, which specifies and allocates responsibility for repaying (or refinancing) the joint-and-several debts between Lyneer and IDC. The Company reassessed its accounting for joint-and-several liabilities under ASC 405-40 as of the Merger date …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

The Companys disaggregated revenues are as follows: 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 …

DisaggregationOfRevenueTableTextBlock · excerpt; the full note is in the filing

Stock-Based Compensation Upon the consummation of the Merger, the 2023 Equity Incentive Plan (the 2023 Incentive Plan) became effective. The 2023 Incentive Plan provides for the grant of stock options, stock appreciation rights, restricted stock, restricted stock units (RSUs), dividend equivalents, and other stock or cash-based awards, or collectively, awards to officers, employees, non-employee directors, and consultants and those of our subsidiaries as selected from time to time by the plan administrator in its discretion. Unless otherwise set forth in an individual award agreement, each award shall vest over a four-year period, with one-quarter of the award vesting on the first annual anniversary of the date of grant, with the remainder of the award vesting monthly thereafter. On July 22, 2024 the Company filed a registration statement on Form S-8 to register up to 15% (initially 7,309,322 shares) of the number of shares of common stock, par value $0.00001, to be outstanding immediately following consummation of the Initial Capital Raise following the Merger issuable pursuant to outstanding unvested or unexercised stock options, stock appreciation rights, restricted stock, restricted stock units, dividend equivalents, and other stock or cash based awards (collectively, Awards) granted under the Companys 2023 Incentive Plan which became effective upon the consummation and completion of the Merger. On November 7, 2025, the stockholders approved the 2025 Omnibus Equity Incent …

DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock · excerpt; the full note is in the filing

Fair Value Measurements Financial Instruments not Carried at Fair Value The Carrying values of the Companys cash and cash equivalents approximated their fair values due to their short-term maturities. The carrying values of other current assets and liabilities including accounts receivable, accounts payable, accrued expenses and other current liabilities approximated their fair value due to their short-term maturities. As of December 31, 2025 and 2024 the Companys variable rate indebtedness consists of the new Revolving Credit Facility and the Revolver, respectively which bears interest at variable rates. The carrying value of the Companys recognized borrowings under the new Revolving Credit Facility and the Revolver approximates their fair value as the debt is at variable rates currently available and resets on a monthly basis. The fair value of the Companys fixed rate debt, which consists of the Merger Note, Credit Agreement, Promissory Note as of December 31, 2025 and December 31, 2024 and the Factoring Agreements at December 31, 2025 is estimated using Level 2 inputs by discounting future cash flows using estimated rates which the Company believes approximate current market interest rate for similar obligations. A summary of the carrying value and fair value of the Companys debt is as follows: December 31, 2025 December 31, 2024 Carrying Value Fair Value Carrying Value Fair Value Variable Rate Debt $ 49,454,401 $ 49,454,401 $ 42,508,379 $ 42,508,379 Fixed Rate Debt $ 41,6 …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

"Income Taxes For the years ended December 31, 2025 and 2024, the Company recorded an income tax expense of $33,991 and $5,379,102, respectively. The Companys effective tax rate for the years ended December 31, 2025 and 2024 was (0.1)% and (4.1)%, respectively. The decrease in effective tax rates between the periods was primarily due to the establishment of a valuation allowance on the Companys deferred tax assets in 2024. Prior to the Merger, Lyneer Investments filed as a partnership for US federal income tax purposes and was considered a pass-through entity. As such, the taxable activities of Lyneer Investments for the first short-period, leading up to the Merger, were allocated to its two Members, IDC and LMH, both of which reported those results on separate income tax returns. For all periods post-merger, Lyneer Investments taxable activities are included on Atlantic International Corp.s income tax returns. For the period of June 18, 2024 to December 31, 2024, along with the full 2025 tax year, the Company filed consolidated income tax returns for federal and state income tax purposes. As a single member LLC (owned 100% by Lyneer Holdings, a corporation), LSS is a disregarded entity for US federal tax income tax purposes and its activities were included on the corporate returns filed by Atlantic International Corp. Prior to the Merger, IDC included the activities and balances of the Company on designated IDC consolidated state and local income tax returns. In these return …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

Leases We determine whether an arrangement is a lease at inception and whether such leases are operating or financing leases. The Company does not have any material leases, individually or in the aggregate, classified as finance leases. For each lease agreement, the Company determines its lease term as the non-cancellable period of the lease and includes options to extend or terminate the lease when it is reasonably certain that it will exercise that option. We use these options in determining our capitalized financing and right-of-use assets and lease liabilities. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. To determine the discount rate to use in determining the present value of the lease payments, we use the rate implicit in the lease if determinable, otherwise we use our incremental borrowing rate. The Company maintains operating leases for corporate and field offices. The Companys leases have initial terms ranging from one month to three years, some of which include the option to renew, and some of which include an early termination option. During the year ended December 31, 2025, the Company extended certain of its leases for periods ranging from one to five years. Variable Lease Costs Certain of the Companys leases require payments for taxes, insurance, and other costs applicable to the property, in addition to the minimum lease payments. These costs are considered variable costs which are based on actua …

LesseeOperatingLeasesTextBlock · excerpt; the full note is in the filing

Recent Accounting Pronouncements Standards Recently Adopted In December 2023, the FASB issued ASU 2023-09 Income Taxes (ASU 2023-09) to enhance income tax disclosures primarily related to the rate reconciliation and income taxes paid information. The Company adopted ASU 2023-09 in the Companys Annual Report on Form 10-K for the year ended December 31, 2025. The Company does not believe ASU 2023-09 have a material effect on its consolidated financial statements. Standards Not Yet Adopted In November 2024, the FASB issued ASU 2024-03 Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40) (ASU 2024-03) to improve the disclosures about an entitys expenses and provide more detailed information about the types of expenses. The guidance is effective for annual reporting periods beginning after December 15, 2026. Early adoption is permitted. The Company plans to adopt ASU 2024-03 for the reporting period December 31, 2026. In January 2025, the FASB issued ASU 2025-01 Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40) (ASU 2025-01) to clarify that all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company plans to adopt ASU 2025-01 for the annual reporting period December 31, 2026 and interim perio …

NewAccountingPronouncementsPolicyPolicyTextBlock · excerpt; the full note is in the filing

Retirement Plan The Company maintains a 401(k) plan for qualified employees. The plan covers substantially all full-time employees of the Company who meet certain age and length of service requirements. There is no requirement for the Company to match employee contributions to the plan. The Company did not contribute to the plan during the years ended December 31, 2025 and 2024.

PensionAndOtherPostretirementBenefitsDisclosureTextBlock

Related Party Transactions Transactions with Lyneer Management Holdings LMH was a non-controlling member of the Company with a 10% ownership interest at December 31, 2023. Two of Lyneers officers, specifically its CEO and CFO, each owned 44.5% of LMH, respectively. On November 15, 2022, Lyneer and IDC as co-borrowers issued Year 1 Earnout Notes to LMH with total balances of $5,127,218. The balance of the Year 1 Earnout Notes payable to LMH was $0 as of 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. The balance of the Year 2 Earnout Notes payable to LMH was $0 as of both December 31, 2025 and December 31, 2024. As of both December 31, 2025 and December 31, 2024, the combined Earnout Note balances payable to LMH was $0. Interest expense incurred on the Earnout Notes to LMH totaled $0 and $292,996 for the years ended December 31, 2025 and 2024, respectively. The balance of the earnout liability payable to LMH as of both December 31, 2025 and December 31, 2024, was $0. On June 18, 2024 as part of the Merger, LMH entered into a $6,000,000 guarantee agreement with the PEO, replacing and cancelling the $6,000,000 letter of credit previously held by the lenders of the Revolver. This obligation was terminated on December 31, 2024. Transactions with IDC The Company and IDC were co-borrowers and were jointly and severally liable for principal and interest payments un …

RelatedPartyTransactionsDisclosureTextBlock · excerpt; the full note is in the filing

Revenue Recognition and Accounts Receivable The Companys disaggregated revenues are as follows: 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 When disaggregating revenue, the Company considered all of the economic factors that may affect its revenues. Because all its revenues are from placement services, there are no differences in the nature, timing and uncertainty of the Companys revenues and cash flows from its revenue generating activities. For the period ended December 31, 2024, revenues from the Companys largest customer accounted for approximately 16% of consolidated revenues; no other customers accounted for more than 10% of the Companys consolidated revenues in either period. Economic factors specific to this customer could impact the nature, timing and uncertainty of the Companys revenues and cash flows. Contract assets consists of unbilled accounts receivable of $4,242,245 and $9,368,565 as of December 31, 2025 and December 31, 2024, respectively. Accounts receivable are uncollateralized customer obligations due under normal trade terms requiring payment upon receipt of invoice. Accounts receivable is as follows: December 31, 2025 December 31, 2024 Accounts receivable $ 68,973,316 $ 66,800,444 Allowance for doubtful accounts (3,222,723) (2,726,107) Accounts receivable, net $ 65,750,593 $ 64,074,337 The Compa …

RevenueFromContractWithCustomerTextBlock · excerpt; the full note is in the filing

Segment Reporting The Company reports information about operating segments in accordance with ASU 2023-07, which requires financial information to be reported based on the way management organizes segments within a company for making operating decision and evaluating performance. The Company derives revenue from hourly fees charged from the placement of light industrial temporary staffing and placement fees earned from the placement of professional permanent employees at its customers. Revenues are accounted for and tracked by each branch location by temporary or permanent placement. The direct costs are not reported by temporary or permanent placement, but rather reported together. Direct costs, primarily payroll and payroll related costs are included in cost of revenue which is deducted from revenues to determine gross profit. Each branchs operating expenses, which, similar to direct costs, are not separated into temporary or permanent placement costs are then deducted from gross profit. So ultimately the segment manager does not review discrete financial information summarized by temporary or permanent placement, but rather total by operating branch. Therefore, the Company has one reportable segment, which is the business of providing commercial staffing solutions. The accounting policies of the commercial staffing solutions segment are the same as those described in Note 3: Summary of Significant Accounting Policies . The Companys CEO is the CODM and reviews financial inf …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

Summary of Significant Accounting Policies Cash and Cash Equivalents Cash includes funds deposited in banks. The Company considers all highly liquid investments with a maturity at the date of purchase of three months or less to be cash equivalents. Accounts Receivable Accounts receivable are uncollateralized customer obligations due under normal trade terms requiring payment upon receipt of invoice. The Company extends credit to customers with normal payment terms of 30 days; however the Company may extend to 150 days from the invoice date. Customer account balances which have not been timely paid according to the customer-specific payment terms are considered delinquent. Accounts receivable are stated at the amount billed to the customer. Upon determination by management, accounts receivable balances are placed into legal, collect and bankruptcy classification, usually on balances over ninety days past the due date. Payments of accounts receivable are allocated to the invoices specified on the customers remittance advice or, if unspecified, are applied as payments on account until the specific invoices paid are determined. Contracts with certain customers allow the Company to charge interest at a rate of 1.5% per month once invoices are considered delinquent, which varies based on the terms of the contracts. The carrying amount of accounts receivable is reduced by a valuation allowance that reflects managements best estimate of the amounts that will not be collected. Managem …

SignificantAccountingPoliciesTextBlock · excerpt; the full note is in the filing

"Subsequent Events The Company has evaluated subsequent events through April 15, 2026, as detailed below. Kevin J. Murphy Appointed CFO Effective February 2, 2026, Mr. Murphy entered into an employment agreement with our Company as Chief Financial Officer. The employment agreement is for one year with an additional one-year extension unless terminated by either party upon 60 days written notice prior to the end of the initial term. Mr. Murphys base salary is $375,000 per annum. Mr. Murphy will be eligible to receive a yearly bonus of $200,000 based upon mutually agreed upon goals. Mr. Murphy will also be eligible to earn annual variable compensation, the amount of which will be set by the Companys Compensation Committee based upon the Companys achievement of stated financial and strategic goals, as established by the Compensation Committee. Mr. Murphy shall be eligible to participate fully in annual stock option grants, and any other long-term equity incentive program at levels commensurate with Mr. Murphys position and as determined by the Compensation Committee. The Company shall provide to Mr. Murphy, at the Companys cost, health insurance pursuant to the terms of the Companys health insurance plans. Mr. Murphy received an initial grant of 400,000 stock options under the Companys equity incentive plan. The options have an exercise price of $3.46 equal to the fair market value of the underlying shares on the day prior to grant. The options will vest over four years, with 25 …

SubsequentEventsTextBlock · excerpt; the full note is in the filing

Note 2: Merger and Acquisition Merger On May 29, 2023 and subsequently amended on June 23, 2023, October 5, 2023, October 17, 2023, November 3, 2023, January 16, 2024, March 7, 2024 and April 15, 2024, the Company, now known as Atlantic International Corp a Delaware corporation (SeqLL), a Delaware corporation, SeqLL Merger, LLC, a Delaware limited liability company (SeqLL Merger Sub), Atlantic Acquisition Corp., a Delaware corporation (Atlantic), Atlantic Merger LLC, a Delaware limited liability company and a majority-owned subsidiary of Atlantic (Atlantic Merger Sub), Lyneer, IDC Technologies, Inc., a California corporation (IDC) and Lyneer Management Holdings, LLC (LMH), a Delaware limited liability company (Lyneer Management), entered into an Agreement and Plan of Merger (the Merger Agreement), pursuant to which (i) Atlantic Merger Sub was merged with and into Lyneer with Lyneer continuing as the surviving entity and as an approximately 41.7%-owned subsidiary of Atlantic, and an approximately 58.3%-owned subsidiary of IDC, and (ii) SeqLL Merger Sub was subsequently to be merged with and into Lyneer, with Lyneer continuing as the surviving entity and a wholly-owned subsidiary of the Company (collectively referred to as the Merger). On June 4, 2024, the Company entered into an Amended and Restated Agreement and Plan of Reorganization (the Amended Merger Agreement), which amended certain provisions of the Merger Agreement: (i) fixed the number of shares of SeqLL common stock …

BusinessCombinationDisclosureTextBlock · excerpt; the full note is in the filing

"Note 11: Commitments and Contingencies Litigation The Company is subject to lawsuits and other claims arising in the ordinary course of business. The Company is required to assess the likelihood of any adverse judgments or outcomes to these matters as well as potential ranges of probable losses. A determination of the amount of accrual required, if any, for these contingencies is made after careful analysis of each matter. The required accrual may change in the future due to new developments in a particular matter or changes in approach, such as a change in settlement strategy in dealing with these matters. With respect to material matters for which the Company believes an unfavorable outcome is reasonably possible, the Company has disclosed the nature of the matter and an estimate of potential exposure. The Company believes that the loss for any other litigation matters and claims that are reasonably possible to occur will not have a material adverse effect on the Companys results of operations, financial position or cash flows, although such litigation is subject to certain inherent uncertainties. On October 30, 2019, Rosanna Vargas filed a complaint in the Superior Court of New Jersey at Camden County against Lyneer and various defendants, including Lyneers client, alleging severe personal injury sustained at work. The case is now closed as to all parties. As a result of the matter, Lyneers client sought indemnification from Lyneer pursuant to an indemnification demand is …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

Note 8: Debt Some of the Companys debt obligations consist of joint and several liabilities with the Companys previous parent which are accounted for under ASC 405-40. Lyneer will remain jointly and severally liable with the IDC to the lenders of the debt obligations until such time as such joint and several indebtedness is restructured. As of the date of the Merger, the Company derecognized the joint and several liabilities with regard to the Debt Allocation Agreement, dated December 31, 2023, between Lyneer and IDC. See below for further information. The table below provides a summary of the Companys recognized debt: March 31, 2026 December 31, 2025 Revolver $ 45,271,994 $ 49,454,401 Credit Agreement 1,950,000 1,950,000 Promissory Note 1,375,000 Merger Note 28,943,615 28,943,615 Convertible Note 161,961,751 Factoring debt 205,981,176 3,266,445 Acquisition loans 51,784,958 Seller loans 19,182,675 Less: unamortized debt issuance costs (1,904,052) (324,421) Total debt $ 513,172,117 $ 84,665,040 Current portion $ 468,515,500 $ 55,838,759 Non-current portion $ 44,656,617 $ 28,826,281 On April 29, 2025, the Company closed on a new revolving credit facility with a maturity date of April 29, 2028. See below for further information. Debt Allocation Agreement Lyneer and IDC entered into a debt allocation agreement (the Allocation Agreement) dated as of December 31, 2023, which specifies and allocates responsibility for repaying (or refinancing) the joint-and-several debts between Lyn …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

The Companys disaggregated revenues are as follows: Three Months Ended March 31, 2026 2025 Temporary placement services $ 245,570,294 $ 101,826,339 Brokerage services 1,972,827 Payrolling services 938,988 Permanent placement and other services 1,404,784 982,468 Total service revenues, net $ 249,886,893 $ 102,808,807 …

DisaggregationOfRevenueTableTextBlock · excerpt; the full note is in the filing

Note 17: Stock-Based Compensation Upon the consummation of the Merger, the 2023 Equity Incentive Plan (the 2023 Incentive Plan) became effective. The 2023 Incentive Plan provides for the grant of stock options, stock appreciation rights, restricted stock, restricted stock units (RSUs), dividend equivalents, and other stock or cash-based awards, or collectively, awards to officers, employees, non-employee directors, and consultants and those of our subsidiaries as selected from time to time by the plan administrator in its discretion. Unless otherwise set forth in an individual award agreement, each award shall vest over a four-year period, with one-quarter of the award vesting on the first annual anniversary of the date of grant, with the remainder of the award vesting monthly thereafter. On July 22, 2024, the Company filed a registration statement on Form S-8 to register up to 15% (initially 7,309,322 shares) of the number of shares of common stock, par value $0.00001, to be outstanding immediately following consummation of the Initial Capital Raise following the Merger issuable pursuant to outstanding unvested or unexercised stock options, stock appreciation rights, restricted stock, restricted stock units, dividend equivalents, and other stock or cash based awards (collectively, Awards) granted under the Companys 2023 Incentive Plan which became effective upon the consummation and completion of the Merger. On November 7, 2025, the stockholders approved the 2025 Omnibus Equ …

DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock · excerpt; the full note is in the filing

Note 12: Fair Value Measurements A summary of the activities of Level 3 fair value measurements is as follows: March 31, 2026 Circle8 Benelux Warrant Preferred Stock Purchase Warrant Bifurcated Derivatives Share Settled Earnout Circle8 Contingent Consideration Total Beginning balance $ $ $ $ $ $ Assumed during Circle8 Acquisition 1,795,491 1,795,491 Issuance 5,970,000 2,260,000 5,600,000 2,098,574 15,928,574 Change in fair value (28,976) (1,520,000) 160,000 (1,388,976) Ending balance $ 1,766,515 $ 4,450,000 $ 2,420,000 $ 5,600,000 $ 2,098,574 $ 16,335,089 The Circle8 Benelux Warrant and the Preferred Stock Purchase Warrant are recorded in warrant liabilities, non-current, the Bifurcated Derivatives are recorded in other liabilities, the Share Settled Earnout and the Circle8 Contingent Consideration are recorded in contingent consideration liabilities, current portion - related parties on the accompanying condensed consolidated balance sheets. The income statement impact of changes in fair value of all items in the table above are recorded in the other expenses, gains and losses line item of the unaudited condensed consolidated statements of operations and comprehensive loss. See Note 15: Warrants, Mezzanine Preferred Stock and Mezzanine Equity for further discussion regarding the warrants. Valuation Methodology and Assumptions Circle8 Benelux Warrant The provisionally recognized fair value of the Circle8 Benelux Warrant amounts to Circle8s pre-acquisition carrying value for t …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

Note 18: Income Taxes For the three months ended March 31, 2026 and 2025, the Company recorded an income tax expense (benefit) of $73,181 and $9,617 for the three months ended March 31, 2026 and 2025, respectively. The Companys effective tax rate for the three months ended March 31, 2026 and 2025 was 0.2% and 0.1%, respectively. The effective tax rate for the three months ended March 31, 2026 differs from the statutory rate primarily as a result of having a full valuation allowance maintained against our U.S. net deferred tax assets, along with certain foreign deferred tax assets, as well as foreign rate differential on foreign jurisdictions for which we do not maintain a valuation allowance. The change in effective tax rate between the periods was primarily due to the tax benefit associated with foreign jurisdictions where we do not maintain a valuation allowance. The application of purchase accounting resulted in a provisional recognition as of January 23, 2026 of $33,266,355 of deferred tax liabilities, net related to book-to-tax temporary differences for recognized intangible assets. As of March 31, 2026, the deferred tax asset was $381,266 and the deferred tax liability of $32,215,449. As of March 31, 2026, the Company maintained a valuation allowance against all of its U.S. deferred tax assets for which realization cannot be considered more likely than not at this time. Management assesses the need for the valuation allowance on a quarterly basis. In assessing the need …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

Note 7: Leases We determine whether an arrangement is a lease at inception and whether such leases are operating or financing leases. For each lease agreement, the Company determines its lease term as the non-cancellable period of the lease and includes options to extend or terminate the lease when it is reasonably certain that it will exercise that option. We use these options in determining our capitalized financing and right-of-use assets and lease liabilities. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. To determine the discount rate to use in determining the present value of the lease payments, we use the rate implicit in the lease if determinable, otherwise we use our incremental borrowing rate. The Company maintains operating leases for corporate and field offices. The Companys leases have initial terms ranging from one month to five years, some of which include the option to renew, and some of which include an early termination option. During the three months ended March 31, 2026, the Company extended certain of its leases for periods ranging from one to three years. The Company maintains finance leases for vehicles that have a lease term of four to five years. Subleases The Company has entered into sublease agreements for portions of its leased office buildings. The remaining enforceable lease term of the original lease is one year. The Company continues to recognize the right-of-use asset and lease li …

LesseeOperatingLeasesTextBlock · excerpt; the full note is in the filing

Recent Accounting Pronouncements Standards Recently Adopted In May 2025, the FASB issued ASU 2025-03 Business Combinations (Topic 805) and Consolidation (Topic 810) (ASU 2025-03) to improve the requirements for identifying the accounting acquirer in Topic 805. Under ASU 2025-03, when a business combination is effected primarily through the exchange of equity interests, the reporting entity must apply the factors in ASC 805-10-55-12 through 55-15 to determine the accounting acquirer, regardless of whether the legal acquiree is a variable interest entity (VIE). Accordingly, we evaluate the guidance in ASC 805-10-55-12 through 55-15 to determine which entity should be identified as the accounting acquirer. The Company adopted ASU 2025-03 in the interim period March 31, 2026; however, the guidance was not applicable to the Circle8 transaction. On April 23, 2026, the FASB issued ASU 2026-01 Equity (Topic 505), Initial measurement of Paid-in-Kind Dividends on Equity-Classified Preferred St ock (ASU 2026-01). The ASU requires paid-in-kind (PIK) dividends to be initially measured on the basis of the PIK dividend rate stated in the preferred stock agreement. The measurement will be used for both recording the dividend in the financial statements and calculating earnings per share. The new guidance does not change when PIK dividends are recorded or when they impact earnings per share. It is effective for all entities for annual reporting periods beginning after December 15, 2026 (and i …

NewAccountingPronouncementsPolicyPolicyTextBlock · excerpt; the full note is in the filing

Note 10: Retirement Plans The U.S. maintains a 401(k) plan for qualified employees. The plan covers substantially all U.S.-based full-time employees of the Company who meet certain age and length of service requirements. There is no requirement for the Company to match employee contributions to the plan. The Company did not contribute to the plan during the three months ended March 31, 2026. The Companys European subsidiaries participate in government-mandated social security programs in the jurisdictions in which they operate. The plans cover all employees of the European subsidiaries and function on a pay-as-you-go basis whereby contributions are made by the employer and the employee. These programs are administered by the government authorities and do not create any future payment obligations beyond the Companys required contribution amounts as they become due. For the three months ended March 31, 2026 and 2025, the Company recorded total statutory social security contributions of $22,711 and $0 included in cost of revenue, respectively and $435,849 and $0 included in selling, general and administrative, respectively on the accompanying condensed consolidated statements of operations and comprehensive loss. …

PensionAndOtherPostretirementBenefitsDisclosureTextBlock · excerpt; the full note is in the filing

Note 16: Related Party Transactions Transactions with Lyneer Management Holdings LMH was a noncontrolling member of the Company with a 10% ownership interest at December 31, 2023. Two of Lyneers officers, specifically its CEO and CFO, each owned 44.5% of LMH, respectively. On November 15, 2022, Lyneer and IDC as co-borrowers issued Year 1 Earnout Notes to LMH with a total balance of $5,127,218. The balance of the Year 1 Earnout Notes payable was $0 as of both March 31, 2026 and December 31, 2025. 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. The balance of the Year 2 Earnout Notes payable to LMH was $0 as of both March 31, 2026 and December 31, 2025. On the date of the Merger, the Company derecognized this debt. Refer to Note 8: Debt for additional information. Interest expense incurred on the Earnout Notes to LMH totaled $0 for both the three months ended March 31, 2026 and 2025. Transactions with IDC The Company and IDC were co-borrowers and were jointly and severally liable for principal and interest payments under the BMO Revolver, the Term Loan related to the BMO Revolver, the Term Note, the Seller Notes and the Earnout Notes. 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 …

RelatedPartyTransactionsDisclosureTextBlock · excerpt; the full note is in the filing

Note 4: Revenue Recognition and Accounts Receivable The Companys disaggregated revenues are as follows: Three Months Ended March 31, 2026 2025 Temporary placement services $ 245,570,294 $ 101,826,339 Brokerage services 1,972,827 Payrolling services 938,988 Permanent placement and other services 1,404,784 982,468 Total service revenues, net $ 249,886,893 $ 102,808,807 When disaggregating revenue, the Company considered all of the economic factors that may affect its revenues. Because substantially all of its revenues are from placement services, there are no differences in the nature, timing and uncertainty of the Companys revenues and cash flows from its revenue generating activities. For the three months ended March 31, 2026, no customers accounted for more than 10% of the Companys consolidated revenues. For the three months ended March 31, 2025, one customer accounted for 13% of the Companys consolidated revenues. No other customers accounted for more than 10% of the Companys consolidated revenues in either period. Economic factors specific to this customer could impact the nature, timing and uncertainty of the Companys revenues and cash flows. Contract assets consists of revenue recognized related to claims for which clients have received economic value but has not been through the clients standard approved procedures as of the balance sheet date. Approval is expected, and upon approval the amounts owed will become unbilled accounts receivable if they have not yet been inv …

RevenueFromContractWithCustomerTextBlock · excerpt; the full note is in the filing

Note 13: Segment Reporting T he Company reports information about operating segments in accordance with ASU 2023-07 Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires financial information to be reported based on the way management organizes segments within a company for making operating decisions and evaluating performance. Circle8 and Lyneer each provide similar staffing/consulting services and use similar service delivery processes. However, Circle8 focuses on the European market, providing workplace solutions to enterprises, technology companies, financial institutions, and public-sector organizations, while Lyneer focuses on accounting, finance, customer service, hospitality, professional and medical, and light industrial staffing placement in the U.S. market. In the U.S., revenue is derived from hourly fees charged from the placement of light industrial temporary staffing and placement fees earned from the placement of professional permanent employees at its customers. Revenues are accounted for and tracked by each branch location by temporary or permanent placement. The direct costs are not reported by temporary or permanent placement, but rather reported together. Direct costs, primarily payroll and payroll -related costs are included in cost of goods sold. Each branchs operating expenses are not separated into temporary or permanent placement costs, but are reported in total at the branch level. So ultimately the segment man …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

Note 3: Summary of Significant Accounting Policies Basis of Presentation The unaudited condensed consolidated financial statements of the Company are prepared following the requirements of the United States Securities and Exchange Commission (SEC) for interim reporting. As permitted under those rules, certain notes or other financial information that is required by accounting principles generally accepted in the U.S. (U.S. GAAP) for complete financial statements can be condensed or omitted. Certain information and footnote disclosures normally included in our annual audited financial statements for the fiscal year ended December 31, 2025 have been condensed or omitted. These interim financial statements, in the opinion of management, reflect all normal recurring adjustments necessary for a fair presentation of the financial position and results of operations for the interim periods ended March 31, 2026 and 2025. These unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements of the Company for the year ended December 31, 2025. The results of operations for any interim period are not necessarily indicative of, nor comparable to, the results of operations for a full year. The unaudited condensed consolidated financial statements reflect the operations of Lyneer Investments and our wholly owned subsidiaries. All material intercompany balances and transactions have been eliminated. We operate as two operating segment …

SignificantAccountingPoliciesTextBlock · excerpt; the full note is in the filing

"Note 20: Subsequent Events The Company has evaluated subsequent events through June 19, 2026, as detailed below. Conversion of Series B Preferred Stock As of the date of this filing, 3,600 shares of Series B Preferred Stock were converted into 1,621,129 shares of Common Stock at a conversion price range of $0.8255 - $3.09 per share. SLR Business Credit Notice of Default On April 17, 2026, SLR notified Lyneer Staffing Solutions, LLC (Lyneer) of certain Events of Default as a result of (a) the occurrence of Events of Default described in the below-described letter from SPP to Atlantic dated March 30, 2026, and (b) Lyneer making certain payments to or for the benefit of Atlantic. Preferred Stock Dividend Rate Adjustment As set forth in the Certificate of Designations, if for any five consecutive Trading Days, the closing price of the Companys Common Stock is less than the Floor Price in effect at the time, the dividend rate, calculated as a percentage of the Series B Preferred Stocks Stated Value will increase from 5% per annum to 18% per annum. On April 21, 2026, the dividend rate increased to 18% per annum as the necessary requirements to trigger this increase were met. Refinancing of Factoring Agreements On April 29, 2026, the Company entered into a new factoring agreement which refinanced the then outstanding balances of its October 2025 factoring agreements into a new factoring agreement, resulting in cash proceeds of $1,039,500 to the Company, net of $32,944 in originatio …

SubsequentEventsTextBlock · excerpt; the full note is in the filing