What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2026-08-19 compared with 2026-06-22 · 579 added, 418 removed, 1241 unchanged (45% of the section changed)

Financial Statements.

ATLANTIC INTERNATIONAL CORP AND SUBSIDIARIES

CIRCLE8 GROUP INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

17 unchanged sentences

Due from related parties 438,912 —

Deferred tax assets, net 381,266 —

Other assets 1,359,666 2,257,405

9 unchanged sentences

Current finance lease liabilities 669,078 —

Warrant liabilities, current 6,080,000 —

Line of credit, current portion 41,198,353 49,308,253

3 unchanged sentences

Factoring debt, current portion 202,127,079 3,205,506

Other short-term debt 2,463,482 —

Contingent consideration liability – related parties 7,950,000 —

2 unchanged sentences

Notes payable, net of current portion 19,332,292 —

Notes payable, net of current portion - related parties 89,638,035 28,826,281

Warrant liabilities, non-current 1,526,672 —

8 unchanged sentences

Preferred stock, $ 0.00001 par value;

20,000,000 shares authorized at March 31, 2026 and December 31, 2025

Series B convertible preferred stock, 5 % cumulative dividends, 15,000 and 0 shares designated;

and 5,600 and 0 shares issued and outstanding at March 31, 2026 and December 31, 2025, respectively, redemption amount of $ 7,300,387 and $ 0 as of March 31, 2026 and December 31, 2025, respectively

20,000,000 shares authorized at June 30, 2026 and December 31, 2025

Series B convertible preferred stock, 5 % cumulative dividends, 15,000 and 0 shares designated at June 30, 2026 and December 31, 2025, respectively;

8,950 and 240 shares issued and outstanding at June 30, 2026 and December 31, 2025 , respectively and 0 shares issued and outstanding at December 31, 2025, redemption amount of $ 554,764 and $ 0 as of June 30, 2026 and December 31, 2025, respectively

Redeemable noncontrolling interest 3,357,497 —

2 unchanged sentences

300,000,000 shares authorized;

79,289,016 and 55,713,259 shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively

89,963,174 and 55,713,259 shares issued and outstanding as of June 30, 2026 and December 31, 2025, respectively

Additional paid-in capital 293,569,042 162,819,982

4 unchanged sentences

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

ATLANTIC INTERNATIONAL CORP AND SUBSIDIARIES

CIRCLE8 GROUP INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

Three Months Ended

June 30, Six Months Ended

2026 2025 2026 2025

Service revenue, net $ 319,806,775 $ 102,896,993 $ 569,693,668 $ 205,705,800

4 unchanged sentences

(Loss) income from operations ( 15,396,271 ) ( 8,684,591 ) ( 30,300,065 ) ( 18,134,337 )

Gain on debt extinguishment ( 233,022 ) —

Loss on debt extinguishment 237,848 — 4,826 —

Loss on settlement

60,414,821 — 60,414,821 —

Interest expense 4,276,743 2,023,960 7,831,413 3,308,782

4 unchanged sentences

Net income attributable to redeemable noncontrolling interest — — ( 57,001 ) —

Net loss attributable to Atlantic ( 30,746,125 ) ( 10,744,185 )

Net loss attributable to Circle8

( 86,368,718 ) ( 10,718,169 ) ( 117,114,843 ) ( 21,462,354 )

Net loss per share attributable to common stockholders, basic and diluted $ ( 0.98 ) $ ( 0.20 ) $ ( 1.45 ) $ ( 0.40 )

6 unchanged sentences

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

ATLANTIC INTERNATIONAL CORP AND SUBSIDIARIES

CIRCLE8 GROUP INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY

18 unchanged sentences

Balance - March 31, 2026 5,600 $ 8,927,475 $ 3,388,143 $ 12,315,618 79,289,016 $ 793 $ 269,299,380 $ ( 225,656,934 ) $ ( 1,217,248 ) $ 42,425,991

Net loss - - - - - - - ( 86,368,718 ) - ( 86,368,718 )

Other comprehensive income - - ( 30,646 ) ( 30,646 ) - - - - ( 5,868,594 ) ( 5,868,594 )

Other issuance of Series B convertible preferred stock 150 140,784 - 140,784 - - - - - -

Exercise of Series B Preferred Stock warrants 3,200 3,003,392 - 3,003,392 - - - - - -

Exercise of Common Stock warrants - - - - 1,268,933 13 833,164 - - 833,177

Redemption of Series B Preferred Stock ( 8,710 ) ( 11,847,637 ) - ( 11,847,637 ) 9,380,796 94 17,125,183 - - 17,125,277

Equity-classified contingent consideration issued as partial consideration for a business - - - - - - 5,600,000 - - 5,600,000

Stock based compensation - - - - - - 772,933 - - 772,933

Stock issued for services - - - - 24,429 - 75,000 - - 75,000

Dividends payable

- - - - - - ( 136,618 ) - - ( 136,618 )

Balance - June 30, 2026 240 $ 224,014 $ 3,357,497 $ 3,581,511 89,963,174 $ 900 $ 293,569,042 $ ( 312,025,652 ) $ ( 7,085,842 ) $ ( 25,541,552 )

Stockholders’ (Deficit)

9 unchanged sentences

54,553,801 $ 546 $ 132,188,332 $ ( 146,224,075 ) $ ( 14,035,197 )

Net loss - - - ( 10,718,169 ) ( 10,718,169 )

Stock based compensation - - 6,269,751 - 6,269,751

Stock issued for legacy stockholders

9,458 - 19,200 - 19,200

Balance - June 30, 2025 54,563,259 $ 546 $ 138,477,283 $ ( 156,942,244 ) $ ( 18,464,415 )

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

ATLANTIC INTERNATIONAL CORP AND SUBSIDIARIES

CIRCLE8 GROUP INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended

Six Months Ended

Net loss $ ( 117,057,842 ) $ ( 21,462,354 )

1 unchanged sentence

Bad debt expense 1,963,045 —

Non-customer valuation allowance

Amortization, deferred financing cost 428,282 91,108

Gain on debt extinguishment ( 233,022 ) —

Loss on debt extinguishment 4,826 —

Loss on settlement

Change in estimated fair value of contingent consideration 251,426 —

Change in fair value of warrants 2,428,727 —

Change in fair value of bifurcated derivatives

Loss on financing transaction 11,613,736 —

Gain on warrant exercise

( 639,808 ) —

Payment of fee by issuance of Preferred Stock

Shares issued for services 75,000 326,400

27 unchanged sentences

Payments on factoring debt ( 1,648,504 ) —

Borrowings on other short-term debt

Payments on other short-term debt

( 570,157 ) —

Proceeds from issuance of preferred stock and warrants, net of issuance costs 5,543,739 —

Proceeds received upon exercise of warrants

Debt issuance costs payment ( 40,500 ) ( 188,351 )

11 unchanged sentences

Share settled earnout value $ 5,600,000 $ —

Transaction costs as partial consideration for a business $ 991,313 $ —

Fair value of common shares issued as partial consideration for a business $ 48,312,030 $ —

2 unchanged sentences

Fair value of common shares issued to designee of the Circle8 Seller as partial consideration for a business $ 15,440,000 $ —

Refinancing of factoring agreements

$ 2,221,965 $ —

Fair value of Common Stock issued to satisfy redemption of Series B Preferred Stock

$ 9,981,037 $ —

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

ATLANTIC INTERNATIONAL CORP AND SUBSIDIARIES

CIRCLE8 GROUP INC.

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

Organization and Nature of Operations

On June 18, 2024 (the “Closing Date”), Atlantic International Corp (“Atlantic” or the “Company,” formerly known as SeqLL Inc.) completed the acquisition (the “Merger”) of Lyneer Investments LLC and its operating subsidiaries, including Lyneer Staffing Solutions, LLC (collectively, “Lyneer”).

On June 18, 2024 (the “Closing Date”), Atlantic International Corp (“Atlantic”, formerly known as SeqLL Inc.) completed the acquisition (the “Merger”) of Lyneer Investments LLC and its operating subsidiaries, including Lyneer Staffing Solutions, LLC (collectively, “Lyneer”).

On January 23, 2026, the Company completed the acquisition (“Circle8 Closing Date” or the “Circle8 Acquisition”) of Circle8 Group B.V.

(“Circle8 Group B.V.”).

Merger and Acquisition for further information.

On June 29, 2026, Atlantic changed its name from Atlantic International Corp to Circle8 Group Inc.

(“Circle8” or the “Company”).

The Company started trading under the Nasdaq ticker CIRC on July 2, 2026.

The Company was incorporated in Delaware under the name SeqLL Inc.

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Lyneer Investments, Lyneer Holdings, and LSS are collectively referred to herein as “Lyneer.”

Circle8 was formed in 1987, under the laws of the Netherlands.

Until its acquisition by Atlantic on January 23, 2026, Circle8 was owned by Axiom Partners GmbH (“Axiom”), which, in turn, is 100% owned by Mr.

Circle8 Group B.V.

was formed in 1987, under the laws of the Netherlands.

Until its acquisition by Atlantic on January 23, 2026.

Circle8 Group B.V.

was owned by Axiom Partners GmbH (“Axiom”), which, in turn, is 100% owned by Mr.

Franke became Executive Chairman of the Board upon the completion of the Circle8 Acquisition.

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In Europe, the Company specializes in workforce solutions to enterprises, technology companies, financial institutions, and public-sector organizations.

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 approximately 8,500 technology professionals and specializes in software development, data analytics, cybersecurity, project management, and emerging technologies.

Circle8 Group B.V.

focuses on sourcing, deploying, and managing highly skilled professionals in information technology and related digital disciplines.

Circle8 Group B.V.

is one of the fastest-growing IT and technology staffing companies, operating across Europe through a portfolio of specialized brands.

Circle8 Group B.V.

manages approximately 8,300 technology professionals and specializes in software development, data analytics, cybersecurity, project management, and emerging technologies.

On October 29, 2024, the Company formed a subsidiary in Delaware.

2 unchanged sentences

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 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”).

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:

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Determination of Accounting Acquirer

The Merger was accounted for as a reverse recapitalization in accordance with GAAP.

The Merger was accounted for as a reverse recapitalization in accordance with United States (“U.S.”) generally accepted accounting principles (“GAAP”).

Under this method of accounting, although SeqLL acquired all of the outstanding equity interests of Lyneer in the Merger, Atlantic was treated as the “acquiree” and Lyneer was treated as the “acquirer” for financial reporting purposes.

2 unchanged sentences

There was no change in the historical carrying amount of Lyneer’s assets or liabilities because of the Merger.

The Merger did not represent a business combination accounted for under Accounting Standards Codification

(“ASC”) 805 — Business Combinations (“ASC 805”), because neither Atlantic Merger LLC nor SeqLL met the definition of a business.

The Merger did not represent a business combination accounted for under Accounting Standards Codification (“ASC”) 805 — Business Combinations (“ASC 805”), because neither Atlantic Merger LLC nor SeqLL met the definition of a business.

Having considered Topic 12 of the SEC Financial Reporting Manual, Lyneer was determined to be the continuing entity for accounting purposes and the Merger represents a reverse recapitalization with regard to Atlantic.

9 unchanged sentences

On January 23, 2026, the Company completed the Circle8 Acquisition.

Circle8 is a company organized under the laws of the Netherlands.

The Circle8 Acquisition was consummated pursuant to the terms of the Acquisition Agreement, dated January 22, 2026 (the “Acquisition Agreement”), by and among the Company, Axiom (or “the Circle8 Seller”) and Circle8.

The Company determined it was the accounting acquirer for this transaction because it incurred liabilities payable to the Circle8 Seller, including a Convertible Note, and became contingently obligated to transfer assets to the seller, all in exchange for a controlling financial interest in Circle8.

Accordingly, upon the consummation of the Circle8 Acquisition, Circle8 ceased to be under the control of Axiom.

Circle8 Group B.V.

is a company organized under the laws of the Netherlands.

Accordingly, upon the consummation of the Circle8 Acquisition, Circle8 Group B.V.

ceased to be under the control of Axiom.

This conclusion was reached as Axiom did not control the Company post-acquisition as demonstrated by its inability to appoint the majority of the Company’s directors.

2 unchanged sentences

The Company is pursuing a strategy of building a global staffing organization through strategic acquisitions.

Through the acquisition of Circle8, Atlantic has extended its capabilities into specialized high-growth information technology and other technological staffing capabilities across Europe, complementing the Company’s North American industrial staffing operations.

Through the acquisition of Circle8 Group B.V., the Company has extended its capabilities into specialized high-growth information technology and other technological staffing capabilities across Europe, complementing the Company’s North American industrial staffing operations.

ASC 805 dictates that if the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the acquirer shall report in its financial statements provisional amounts for the items for which the accounting is incomplete.

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Thus, the acquirer shall adjust its financial statements as needed, including recognizing in its current-period earnings, the full effect of changes in depreciation, amortization, or other income effects, by line item, if any, as a result of the change to the provisional amounts calculated as if the accounting had been completed at the acquisition date.

The Company is in the process of obtaining and validating information about Circle8’s balance sheet related to substantially all categories of assets and liabilities, as well as related to the valuation of certain elements of the consideration and other elements of the transaction.

The Company is in the process of obtaining and validating information about Circle8 Group B.V.’s balance sheet related to substantially all categories of assets and liabilities, as well as related to the valuation of certain elements of the consideration and other elements of the transaction.

Further details are provided below.

On the Circle8 Closing Date, the Company acquired 100 % of the outstanding voting equity of Circle8.

On the Circle8 Closing Date, the Company acquired 100 % of the outstanding voting equity of Circle8 Group B.V..

However, upon the closing of the Circle8 Acquisition, a third party retained a noncontrolling 20 % equity interest (“Redeemable NCI”) in Circle8 Consulting GmbH (“Circle8 Consulting”).

Circle8 Consulting was a consolidated subsidiary of Circle8 immediately prior to the Circle8 Acquisition and became a consolidated subsidiary of the Company upon the closing thereof.

Circle8 Consulting was a consolidated subsidiary of Circle8 Group B.V.

immediately prior to the Circle8 Acquisition and became a consolidated subsidiary of the Company upon the closing thereof.

The Company recorded the Redeemable NCI at its estimated fair value as of the Circle8 Closing Date using a discounted cash flow (“DCF”) model.

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• The Company entered into an obligation to issue 4,000,000 shares of the Company’s Common Stock with an aggregate fair value of $ 15,440,000 on the Circle8 Acquisition Date to settle a liability for transaction expenses incurred by Circle8 (the “Advisor Equity Payment”).

The Advisor Equity Payment represents an obligation to the investment banking firm that represented and advised Circle8 in connection with the Circle8 Acquisition and was settled via the issuance of Common Stock on January 28, 2026.

The Advisor Equity Payment represents an obligation to the investment banking firm that represented and advised Circle8 Group B.V.

in connection with the Circle8 Acquisition and was settled via the issuance of Common Stock on January 28, 2026.

The fair value of these shares was also measured using the Per Share Closing Price, a Level 1 measurement.

3 unchanged sentences

The amount initially recognized is considered provisional as the Company is in the process of evaluating the initial approach selected and the validity of certain assumptions related thereto.

• A contingent consideration arrangement pursuant to which the Company is obligated to pay the Circle8 Seller a fixed amount totaling $ 2,500,000 if Circle8 revenue equals or exceeds € 600 million (the equivalent of approximately $ 693 million at March 31, 2026) during the calendar year ended December 31, 2026 (the “Circle8 Contingent Consideration”).

• A contingent consideration arrangement pursuant to which the Company is obligated to pay the Circle8 Seller a fixed amount totaling $ 2,500,000 if Circle8 Group B.V.’s revenue equals or exceeds € 600 million (the equivalent of approximately $ 693 million at June 30, 2026) during the calendar year ended December 31, 2026 (the “Circle8 Contingent Consideration”).

The Company has assigned a provisional fair value of $ 2,098,574 to the Circle8 Contingent Consideration as of the Circle8 Acquisition Date.

2 unchanged sentences

Fair Value Measurements for additional information related to the valuation of the contingent consideration.

• In exchange for the Circle8 business, the Company has agreed to make an additional payment (if greater than $0) to the Circle8 Seller equal to the net profit of Circle8 as set forth on the Circle8 financial statements for the year ended December 31, 2025, less any post-acquisition cash payments made to Circle8 in calendar year 2026 by Atlantic to support Circle8’s operations (the “Profit Payment Amount”).

• In exchange for the Circle8 Group B.V.

business, the Company has agreed to make an additional payment (if greater than $0) to the Circle8 Seller equal to the net profit of Circle8 Group B.V.

as set forth on the Circle8 Group B.V.

financial statements for the year ended December 31, 2025, less any post-acquisition cash payments made to Circle8 in calendar year 2026 by the Company to support Circle8 Group B.V.’s operations (the “Profit Payment Amount”).

The Company has recorded a provisional fair value of $ 0 for the Circle8 Profit Payment which is subject to revision as the Company is currently evaluating whether this appropriately considers the facts and circumstances of the Circle8 Acquisition Date and accurately reflects the fair value that would be assigned to this obligation by a market participant.

The Company and Circle8 are in the process of determining Circle8’s 2025 net profit, which entails the preparation of a set of consolidated audited financial statements to be prepared by Circle8.

Because the Profit Payment Amount depends on the level of support provided by Atlantic in 2026, the Company considers the obligation to be a contingent consideration arrangement.

The Company and Circle8 Group B.V.

are in the process of determining Circle8 Group B.V.’s 2025 net profit, which entails the preparation of a set of consolidated audited financial statements to be prepared by Circle8 Group B.V..

Because the Profit Payment Amount depends on the level of support provided by the Company in 2026, the Company considers the obligation to be a contingent consideration arrangement.

There is no contractual cap or limit to the Profit Payment Amount.

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The Company has assigned a provisional fair value of $ 5,600,000 to the Share Settled Earnout, but is obtaining additional information regarding the nature of the obligation and whether this provisional fair value reflects the approach and assumptions that a market participant would use in the calculation thereof.

The number of additional shares of Common Stock that would be issued to Axiom under this arrangement if the Merger Note were to be settled in shares amounted to 7,498,346 and 9,552,348 on the Circle8 Acquisition Date and March 31, 2026, respectively.

The number of additional shares of Common Stock that would be issued to Axiom under this arrangement if the Merger Note were to be settled in shares amounted to 7,498,346 and 31,460,451 on the Circle8 Acquisition Date and June 30, 2026, respectively.

• Consideration transferred in connection with the acquisition consisted of cash payments on behalf of the seller’s benefit.

1 unchanged sentence

The Company incurred costs for certain transaction-related costs, including due diligence and advisory fees.

These payments were negotiated as part of the overall purchase arrangement and were incurred on behalf of the seller.

These payments

were negotiated as part of the overall purchase arrangement and were incurred on behalf of the seller.

The total amount of such costs incurred was $ 991,313 .

The Company paid $887,400 in March 2026 and the remaining $103,917 has not yet been paid but is included in “accrued expenses and other current liabilities” on the

accompanying unaudited condensed consolidated balance sheets.

The Company paid $887,400 in March 2026 and the remaining $103,913 has not yet been paid but is included in “accrued expenses and other current liabilities” on the accompanying unaudited condensed consolidated balance sheets.

The Company recorded the $ 991,313 incurred as an increase to consideration transferred, which resulted in a corresponding increase to goodwill recognized in the transaction.

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Accounts receivable, contract assets, prepaid expenses and other current assets, accounts payable and accrued expenses were valued at the existing carrying values as they represented a reasonable approximation of the fair value due to their short-term nature.

However, these values are provisional as the Company is in the process of validating the propriety of cutoff and classification of the recorded amounts and other information provided by Circle8 and these balances are subject to potential adjustment within the measurement period.

and these balances are subject to potential adjustment within the measurement period.

Intangible assets recognized as a result of the Circle8 Acquisition consist of customer relationships, trademarks, a trade name and software and these have been recorded using provisional values as of the Circle8 Acquisition Date.

1 unchanged sentence

The Company used the multi-period excess earnings method to provisionally value the customer relationship intangible assets.

The multi-period excess earning method determines the fair value of an intangible asset as the present value of excess cash flows attributable to a specific intangible asset after an appropriate return for all other assets used in the operation of the business have been accounted for.

The multi-period excess earnings method determines the fair value of an intangible asset as the present value of excess cash flows attributable to a specific intangible asset after an appropriate return for all other assets used in the operation of the business have been accounted for.

The significant assumptions used to estimate the fair value of customer relationships included projected future cash flows related to existing customer relationships, customer attrition rates, useful lives, and discount rates.

The provisional valuations are based on projected cash flows related to existing customer relationships for each Circle8 sub-group according to the underlying business plans.

The provisional valuations are based on projected cash flows related to existing customer relationships for each Circle8 Group B.V.

sub-group according to the underlying business plans.

Determining the useful lives of customer relationships requires judgment, as it involves estimating the retention of existing customer relationships.

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The Company has provisionally assigned a ten -year useful life to both its trademarks and trade name.

Circle8’s intangible assets representing software have been provisionally recognized at the historical net book value of Circle8 prior to the Circle8 Acquisition.

Circle8 Group B.V.’s intangible assets representing software have been provisionally recognized at the historical net book value of Circle8 Group B.V.

prior to the Circle8 Acquisition.

The Company is obtaining information from the Circle8 Seller related to the cost, nature, and age of these assets and will determine within the measurement period if an adjustment to the provisionally recognized amounts is necessary.

Property and equipment have been provisionally recognized using Circle8’s net book value as of the Circle8 Acquisition Date.

The Company is in the process of validating certain information provided by Circle8 and considering if the recorded value differs materially from the value that would be assigned by a market participant.

Property and equipment have been provisionally recognized using Circle8 Group B.V.’s net book value as of the Circle8 Acquisition Date.

The Company is in the process of validating certain information provided by Circle8 Group B.V.

and considering if the recorded value differs materially from the value that would be assigned by a market participant.

The Company is obtaining information about the type, age and location, and condition of the assets acquired and will finalize the acquisition date accounting during the measurement period.

Operating lease right-of-use assets and operating lease liabilities have been recorded using the legacy carrying amounts of Circle8.

These amounts are provisional as the Company is in the process of verifying the accuracy of the reported amounts and will evaluate the need to apply an incremental borrowing rate calculation and potential adjustment for off-market lease terms to the initial amount recognized, based on materiality.

Finance lease right-of-use assets and finance lease liabilities have been provisionally recorded using the historical carrying amounts of Circle8.

Operating lease right-of-use assets and operating lease liabilities have been recorded using the legacy carrying amounts of Circle8 Group B.V..

These amounts are provisional as the Company is in the process of verifying the accuracy of the

reported amounts and will evaluate the need to apply an incremental borrowing rate calculation and potential adjustment for off-market lease terms to the initial amount recognized, based on materiality.

Finance lease right-of-use assets and finance lease liabilities have been provisionally recorded using the historical carrying amounts of Circle8 Group B.V..

The Company is in the process of obtaining information about these obligations and the underlying assets and determining if adjustments to the recorded amounts are necessary.

Notes and loans payable have been provisionally recognized at the historical carrying amounts of Circle8.

Notes and loans payable have been provisionally recognized at the historical carrying amounts of Circle8 Group B.V..

The Company is in the process of obtaining information about outstanding balances, recorded items and loan terms in order to evaluate if the recorded value of these instruments approximates the fair value as of the Circle8 Acquisition Date.

Deferred tax assets and deferred tax liabilities are provisional, and the Company is in the process of obtaining and validating information about the initial income tax bases for these assets.

Additionally, measurement period changes to other assets and liabilities on Circle8’s opening balance sheet, as well as other items currently being recognized on a provisional basis could materially impact the final deferred tax asset and liability amounts recognized on the Circle8 Acquisition Date.

Other liabilities consist primarily of a warrant payable to the seller of a business to Circle8 in a prior acquisition.

Additionally, measurement period changes to other assets and liabilities on Circle8 Group B.V.’s opening balance sheet, as well as other items currently being recognized on a provisional basis could materially impact the final deferred tax asset and liability amounts recognized on the Circle8 Acquisition Date.

Other liabilities consist primarily of a warrant payable to the seller of a business to Circle8 Group B.V.

in a prior acquisition.

It has been provisionally recognized as a liability in the amount of approximately $ 1,795,491 .

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The Company is currently evaluating whether it will recognize any material tax-deductible goodwill as a result of the Circle8 Acquisition.

The Company incurred acquisition-related expenses of $ 744,920 which represent legal fees and bonuses and are included in “selling, general and administrative” on the accompanying unaudited condensed consolidated statement of operations for the three months ended March 31, 2026.

The Company incurred $ 744,920 of acquisition related expenses , consisting primarily of legal fees and bonuses and are included in “selling, general and administrative” on the accompanying unaudited condensed consolidated statement of operations and comprehensive loss for the six months ended June 30, 2026.

Costs to issue debt and equity securities in connection with the Circle8 Acquisition were de minimis and charged to expense at the time they were incurred.

Contingent Liabilities

Circle8 and its subsidiaries are subject to various claims and legal proceedings in the ordinary course of business.

Circle8 Group B.V.

and its subsidiaries are subject to various claims and legal proceedings in the ordinary course of business.

The Company is evaluating all known claims and potential contingencies in accordance with ASC 450 — Contingencies .

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Pro Forma Information

Revenue and net loss of Circle8 included in the accompanying condensed consolidated statement of operations and comprehensive loss for the period from January 23, 2026 through March 31, 2026 amounted to $ 145,248,041 and $ 5,008,996 , respectively.

Revenue and net loss of Circle8 Group B.V.

included in the accompanying condensed consolidated statement of operations and comprehensive loss for the period from January 23, 2026 through June 30, 2026 amounted to $ 351,239,106 and $ 13,517,672 , respectively.

Components of these amounts in some cases were dependent on the use of provisional values for assets and liabilities on the Circle8 Acquisition Date.

The Company has made reasonable efforts to obtain the information necessary to disclose about Circle8’s operating results for the period from January 1, 2026 through January 23, 2026 pursuant to U.S.

The Company has made reasonable efforts to obtain the information necessary to disclose about Circle8 Group B.V.’s operating results for the period from January 1, 2026 through January 23, 2026 pursuant to U.S.

GAAP, and has not been able to obtain this information.

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For the same reasons the Company has also found it to be impracticable to obtain the necessary information to present pro forma information.

The Company is actively working with Circle8’s legacy reporting team as well as external accounting advisors to obtain and validate this information and fully intends to include it in future filings once it is available.

The Company is actively working with

Circle8’s legacy reporting team as well as external accounting advisors to obtain and validate this information and fully intends to include it in future filings once it is available.

Board Service Agreement, Employment Agreement and Consulting Agreements

In connection with the Circle8 Acquisition, the Company and Guus Franke entered into an Employment and Board Service Agreement (the “Franke Agreement”) which has provisionally been accounted for separately from the Circle8 Acquisition.

Amounts payable under the Franke Agreement during the first quarter of 2026 have been accounted for as compensation expense during the period in which they are incurred.

The Company is currently evaluating whether any part of the Franke Agreement should be accounted for as a component of the consideration transferred for Circle8 and will complete this analysis during the measurement period.

Amounts recognized as expense under the Franke Agreement during the quarter ended March 31, 2026 amounted to $ 302,582 and are included in “selling, general and administrative” in the accompanying unaudited condensed consolidated statement of operations.

Axiom and an affiliated entity, Axiom Partners B.V.

Amounts payable under the Franke Agreement during 2026 have been accounted for as compensation expense during the period in which they are incurred.

The Company is currently evaluating whether any part of the Franke Agreement should be accounted for as a component of the consideration transferred for Circle8 Group B.V.

and will complete this analysis during the measurement period.

Amounts recognized as expense under the Franke Agreement during the three and six months ended June 30, 2026 amounted to $ 412,402 and $ 714,984 , respectively, and are included in “selling, general and administrative” in the accompanying unaudited condensed consolidated statement of operations and comprehensive loss.

Axiom and an affiliated entity, Axiom Partners Group B.V.

(“Axiom Netherlands”) each entered into separate consulting agreements with Circle8 on January 20, 2026.

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The Company is currently evaluating whether any part of either of the Axiom Consulting Agreements should be accounted for as a component of the consideration transferred for Circle8 and will complete this analysis during the measurement period.

Related Party Transactions for disclosure of amounts incurred under the Axiom Consulting Agreements from the Circle8 Acquisition Date through March 31, 2026.

Related Party Transactions for disclosure of amounts incurred under the Axiom Consulting Agreements from the Circle8 Acquisition Date through June 30, 2026.

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.

GAAP”) for complete financial statements can be condensed or omitted.

The unaudited condensed consolidated financial statements of the Company are prepared following the requirements of the U.S.

Securities and Exchange Commission (“SEC”) for interim reporting.

As permitted under those rules, certain notes or other financial information that is required by 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.

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This evaluation includes considerations related to covenants contained in the Company’s credit facilities, forecasted liquidity, net losses and negative net working capital.

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 unaudited condensed consolidated financial statements.

The Company expects that the acquisition of Circle8 will enhance its scale, liquidity, and access to capital, positioning the combined entity for potential premium valuation multiples and expanded international reach with established global clients.

Management further anticipates that the transaction will drive operating efficiencies, improve profitability, and strengthen revenue stability through a diversified customer base and balanced geographic exposure across the United States and Europe.

Circle8 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 unaudited condensed consolidated financial statements.

The Company expects that the acquisition of Circle8 Group B.V.

will enhance its scale, liquidity, and access to capital, positioning the combined entity for potential premium valuation multiples and expanded international reach with established global clients.

Management further anticipates that the transaction will drive operating efficiencies, improve

profitability, and strengthen revenue stability through a diversified customer base and balanced geographic exposure across the U.S.

The unaudited condensed consolidated financial statements have been prepared on a basis that assumes the Company will continue as a going concern and do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern.

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Changes in estimates are reflected in reported results in the period in which they become known.

Reclassification of Prior Year Presentation

Certain prior year amounts have been reclassified for consistency with the current year presentation.

These reclassifications had no effect on the reported results of operations.

An adjustment has been made to the consolidated balance sheets.

Foreign Currency Translation

Generally, the functional currency of operations outside the United States (“U.S.”) is the respective local currency, including the European Union euro and the Swiss franc.

Generally, the functional currency of operations outside the U.S.

is the respective local currency, including the European Union euro and the Swiss franc.

The assets and liabilities of all international subsidiaries are translated from the respective local currency to the U.S.

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Related translation adjustments are recorded as a component of accumulated other comprehensive loss.

The Company's condensed consolidated statements of operations and comprehensive loss of all international subsidiaries are translated from the respective local currencies to the U.S.

The Company's unaudited condensed consolidated statements of operations and comprehensive loss of all international subsidiaries are translated from the respective local currencies to the U.S.

dollar using average exchange rates for the period covered by the statements of operations and comprehensive loss.

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Participating securities are securities that may participate in undistributed earnings with common stock.

Because the Series B Preferred Stock is entitled to participate in certain distributions with common stockholders, the Company applies the two-class method when required.

The Series B Preferred Stock is entitled to participate in certain distributions with common stockholders, and as a result the Company applies the two-class method when required.

Under the two-class method, earnings are allocated to common stockholders and participating securities based on their respective rights to receive dividends and share in undistributed earnings for the period, as if all current-period earnings had been distributed.

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The Series B Preferred Stock does not have a contractual obligation to share in losses.

The Company considers the settlements of its Series B Preferred Stock that occurred during the quarter ended June 30, 2026, and were effectuated by the issuance of the Company’s common stock to represent variable share-settled “redemptions” of the Series B Preferred Stock rather than fixed-share conversions.

When accounting for such settlements the fair value of the common stock issued is recorded at its fair value on the settlement date and the difference between the fair value of these shares and the carrying value of the stock, inclusive of the settlement date fair value of the embedded bifurcated derivatives is recorded as a gain or loss directly to additional paid-in capital and increasing or decreasing net income (loss) available to common shareholders for basic and diluted EPS.

The Company also evaluates the effect of redeemable noncontrolling interests on EPS.

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This assessment is conducted at the time of warrant issuance and at each reporting period end date while the warrants are outstanding.

Liability classified warrants are initially measured at their fair value and remeasured at each reporting date with changes in fair value recognized within “other expenses, gains and losses” in the Company’s condensed consolidated statement of operations and comprehensive loss.

Liability classified warrants are initially measured at their fair value and remeasured at each reporting date with changes in fair value recognized within “other expenses, gains and losses” in

the Company’s unaudited condensed consolidated statement of operations and comprehensive loss.

When liability classified warrants are exercised, they are remeasured immediately prior to exercise with changes in fair value recognized within “other expense, gains and losses” in the Company’s unaudited condensed consolidated statement of operations and comprehensive loss.

Embedded Derivatives

The Company has issued certain convertible and redeemable preferred stock and debt instruments that meet the definition of hybrid instruments.

Pursuant to ASC 815, the Company evaluates embedded features in hybrid instruments to determine whether such features must be bifurcated and accounted for separately as derivative instruments.

Pursuant to ASC 815, the Company evaluates embedded features in hybrid instruments to determine whether such features must be bifurcated from the host instrument and accounted for separately as derivative instruments.

An embedded feature is bifurcated if:

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If a feature qualifies for bifurcation, it is initially measured at fair value and subsequently remeasured at each reporting date until the host instrument is extinguished or the feature no longer qualifies for separate accounting.

Gains and losses on bifurcated derivatives are reported within “other expenses, gains and losses” in the Company’s condensed consolidated statements of operations and comprehensive loss.

Gains and losses on bifurcated derivatives are reported within “other expenses, gains and losses” in the Company’s unaudited condensed consolidated statements of operations and comprehensive loss.

Preferred Stock

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The Company classifies its issued and outstanding preferred securities that are mandatorily redeemable as liabilities, whereas under ASC 480 the Company classifies its preferred securities whose redemption is contingent upon an event not entirely within the control of the Company as mezzanine equity.

The resulting classification is then evaluated quarterly to determine whether any change to the classification is required.

Redeemable Noncontrolling Interests (“NCI”)

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For redeemable noncontrolling interests that are not currently redeemable, but probable of becoming redeemable in the future, the Company recognizes the adjustment to carry it at the redemption value (provided this exceeds the value of the instrument after the attribution of allocable gains and losses) either immediately or over time using the effective interest method, depending on which method management determines best reflects the economics of the instrument.

At March 31, 2026 the Company had one outstanding redeemable noncontrolling interest.

At June 30, 2026 the Company had one outstanding redeemable noncontrolling interest.

This redeemable noncontrolling interest resulted from the Circle8 Acquisition.

The Company’s redeemable noncontrolling interest was probable of becoming redeemable in the future and accreted to its full redemption value during the period ending March 31, 2026 .

The Company’s redeemable noncontrolling interest was probable of becoming redeemable in the future and accreted to its full redemption value during the period ending June 30, 2026 .

Adjustments to the redemption value are recorded as equity transactions and are recognized as reductions of retained earnings, or, in the absence of retained earnings due to an accumulated deficit, as reductions of additional paid-in capital.

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If no agreement with the co-obligors exists a reporting entity should recognize the full amount that it could be required to pay under the joint and several liability obligations.

The amounts recognized in the Company’s financial statements represents its portion of amounts Lyneer expects to repay under its respective joint and several liability agreements as of March 31, 2026 and December 31, 2025, respectively.

The amounts recognized in the Company’s financial statements represent its portion of amounts Lyneer expects to repay under its respective joint and several liability agreements as of June 30, 2026 and December 31, 2025, respectively.

As of the date of the Merger, the Company derecognized its joint and several debt obligations as it believed it was reasonably probable that IDC has the ability to repay their portion.

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In accordance with ASC Topic 350 — Intangibles-Goodwill and Other (“ASC 350”), goodwill is tested for impairment annually, at the reporting unit level and between annual tests if events and circumstances indicate it is more likely than not that the fair value of a reporting unit is less than its carrying value.

The Company tests impairment annually during the fourth calendar quarter.

Events that could indicate impairment include, but are not limited to, current economic and market conditions, including a significant adverse change in legal factors, business climate, operational performance of the business or key personnel, and an adverse action or assessment by a regulator.

The Company tests impairment annually during the fourth calendar quarter and further periodic tests to the extent indicators of impairment develop between annual impairment tests.

Events that could indicate impairment include, but are not limited to, current macroeconomic and market conditions, including a significant adverse change in legal factors, business climate, operational performance of the business or key personnel, and an adverse action or assessment by a regulator.

In performing the impairment test, the Company utilizes the single step approach prescribed under ASC 350.

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Our acquisitions may include contingent consideration, which requires us to recognize the fair value of the estimated liability at the time of the acquisition.

Subsequent changes in the estimate of the amount to be paid under the contingent consideration arrangement are recognized on the condensed consolidated statements of operations and comprehensive loss.

Cash payments to settle the contingent consideration liability within a relatively short period of time after the acquisition is completed are classified as investing activities in the condensed consolidated statements of cash flows.

Cash payments to settle the contingent consideration liability up to the acquisition date fair value (including measurement period adjustments) that are not within a relatively short period of time are recorded as financing activities in the condensed consolidated statements of cash flows.

Cash payments to settle contingent consideration liability in excess of the acquisition date fair value (including measurement period adjustments) are recorded as operating activities in the condensed consolidated statements of cash flows.

Subsequent changes in the estimate of the amount to be paid under the contingent consideration arrangement are recognized on the unaudited condensed consolidated statements of operations and comprehensive loss.

Cash payments to settle the contingent consideration liability up to the acquisition date fair value (including

measurement period adjustments) that are not within a relatively short period of time are recorded as financing activities in the unaudited condensed consolidated statements of cash flows.

Alternatively, in connection with acquisitions, we may enter into obligations to make contingent payments to certain selling shareholders, which are in substance, compensation for future services and not payment for the acquired business.

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As the business is driven primarily by large customers with high credit scores, credit checks are not usually performed in our International segment.

Revenues that have been recognized but not invoiced for Temporary Staffing Services customers are included in “unbilled accounts receivable” on

the accompanying consolidated balance sheets and represent a contract asset under ASC 606.

Revenues that have been recognized but not invoiced for Temporary Staffing Services customers are included in “unbilled accounts receivable” on the accompanying consolidated balance sheets and represent a contract asset under ASC 606.

Terms of collection vary based on the customer;

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For Managed Service Provider (“MSP”) revenue, the Company provides end-to-end hiring management services for customers seeking to hire temporary labor, seconded staff, and self-employed professionals.

The services performed by the Company include coordination with pre-approved workforce suppliers during the hiring process, posting and managing job

vacancies, onboarding and offboarding contractors, and performing hiring administration.

The services performed by the Company include coordination with pre-approved workforce suppliers during the hiring process, posting and managing job vacancies, onboarding and offboarding contractors, and performing hiring administration.

As these services are interrelated, they are not considered to be individually distinct and therefore are accounted for as a single performance obligation.

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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”).

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.

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Early adoption is permitted.

The Company plans to adopt ASU 2024-03 for the reporting period ended December 31, 2026.

See ASU 2025-01 below for revision of effective date.

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.

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Three Months Ended

June 30, Six Months Ended

2026 2025 2026 2025

Temporary placement services $ 313,961,556 $ 102,033,461 $ 559,531,850 $ 203,859,800

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Because substantially all of its revenues are from placement services, there are no differences in the nature, timing and uncertainty of the Company’s 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 Company’s consolidated revenues.

For the three months ended March 31, 2025, one customer accounted for 13 % of the Company’s consolidated revenues.

customers accounted for more than 10% of the Company’s consolidated revenues in either period.

For the three and six months ended June 30, 2026, and the three months ended June 30, 2025, no customers accounted for more than 10% of the Company’s consolidated revenues.

For the six months ended June 30, 2025 one customer accounted for 11 % of the Company’s consolidated revenues.

No other customers accounted for more than 10% of the Company’s consolidated revenues in either period.

Economic factors specific to this customer could impact the nature, timing and uncertainty of the Company’s 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.

Contract assets consist 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 invoiced or accounts receivable upon invoicing.

The Company records contract liabilities (deferred revenue) when payments are made or due prior to the related performance obligations being satisfied.

The current portion of contract liabilities is included in “accrued expenses and other current liabilities” on the accompanying condensed consolidated balance sheets.

The current portion of contract liabilities is included in “accrued expenses and other current liabilities” on the accompanying unaudited condensed consolidated balance sheets.

Refer to Note 9:

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The Company does not have any long-term contract liabilities.

Contract assets were $ 101,757,781 and $ 0 as of March 31, 2026 and December 31, 2025, respectively

Unbilled accounts receivable were $ 6,679,154 and $ 4,242,245 as of March 31, 2026 and December 31, 2025, respectively.

Contract assets were $ 105,595,021 and $ 0 as of June 30, 2026 and December 31, 2025, respectively

Unbilled accounts receivable were $ 5,481,333 and $ 4,242,245 as of June 30, 2026 and December 31, 2025, respectively.

Accounts receivable are uncollateralized customer obligations due under normal trade terms requiring payment upon receipt of invoice.

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Accounts receivable, net $ 180,003,393 $ 65,750,593

The Company’s accounts receivable serves as collateral for the Revolver and the Term Note (see Note 8:

The Company’s accounts receivable serve as collateral for the Revolver and the Term Note (see Note 8:

Debt ) has a second lien after the Revolver.

The Company recognized $ 1,233,099 and $ 0 bad debt expense during the periods ended March 31, 2026 and March 31, 2025, respectively.

None of the Company’s customers accounted for more than 10% of the Company’s accounts receivable as of March 31, 2026 and December 31, 2025.

The Company recognized $ 1,963,045 and $ 0 bad debt expense during the periods ended June 30, 2026 and June 30, 2025, respectively.

None of the Company’s customers accounted for more than 10% of the Company’s accounts receivable as of June 30, 2026 and December 31, 2025.

Property and Equipment

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Property and equipment, net $ 1,372,529 $ 239,207

Total depreciation expense of $ 119,930 and $ 38,056 was recorded during the three months ended March 31, 2026 and 2025, respectively and is included in “depreciation and amortization” in the accompanying unaudited condensed consolidated statements of operations and comprehensive loss.

Total depreciation expense of $ 124,252 and $ 34,416 was recorded during the three months ended June 30, 2026 and 2025, respectively, and $ 244,182 and $ 111,942 was recorded during the six months ended June 30, 2026 and 2025, respectively, and is included in “depreciation and amortization” in the accompanying unaudited condensed consolidated statements of operations and comprehensive loss.

Intangible Assets and Goodwill

Intangible assets consisted of the following:

March 31, 2026 December 31, 2025

June 30, 2026 December 31, 2025

Amount Accumulated

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Total intangible assets $ 218,433,600 $ ( 32,406,140 ) $ 186,027,460 $ 47,400,000 $ ( 20,797,777 ) $ 26,602,223

Total amortization expense of $ 4,212,164 and $ 1,198,333 was recorded during the three months ended March 31, 2026 and 2025, respectively.

The Company continuously monitors for events and circumstances that could indicate that it is more likely than not that its finite lived intangible assets and other long-lived assets are impaired or not recoverable (a triggering event), requiring an interim impairment test.

During the three months ended March 31, 2026, the Company considered a number of factors including, but not limited to, current macroeconomic conditions such as inflation, economic growth, and interest rate movements, industry and market considerations, and overall financial performance of the Company.

Based on the analysis of relevant events and circumstances, the Company concluded a triggering event had not occurred as of March 31, 2026.

Total amortization expense of $ 4,309,555 and $ 1,198,333 was recorded during the three months ended June 30, 2026 and 2025, respectively, and $ 8,521,719 and $ 2,396,666 was recorded during the six months ended June 30, 2026 and 2025, The Company continuously monitors for events and circumstances that could indicate that it is more likely than not that its finite lived intangible assets and other long-lived assets are impaired or not recoverable (a triggering event), requiring an interim impairment test.

During the six months ended June 30, 2026, the Company considered a number of factors including, but not limited to, current macroeconomic conditions such as inflation, economic growth, and interest rate movements, industry and market considerations, and overall financial performance of the Company.

Based on the analysis of relevant events and circumstances, the Company concluded an impairment was not necessary as of June 30, 2026.

A summary of the activities related to the Company’s goodwill consists of the following:

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Currency translation effects ( 30,175,252 )

Net book value at March 31, 2026 $ 448,745,779

Net book value at June 30, 2026 $ 438,896,402

We determine whether an arrangement is a lease at inception and whether such leases are operating or financing leases.

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The Company’s 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 .

During the six months ended June 30, 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 .

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The Company continues to recognize the right-of-use asset and lease liability for the original lease, while rental income from the subleases is recognized over the term of the sublease.

The Company recognized rental income $ 105,019 and $ 0 for the three months ended March 31, 2026 and 2025, respectively.

The following table summarizes the weighted-average remaining lease term and discount rate for operating and finance leases as of March 31, 2026 and December 31, 2025:

The Company recognized rental income of $ 129,564 and $ 234,583 and for the three and six months ended June 30, 2026, respectively.

The Company recognized rental income of $ 0 for both the three and six months ended June 30, 2025.

The following table summarizes the weighted-average remaining lease term and discount rate for operating and finance leases as of June 30, 2026 and December 31, 2025:

2026 December 31,

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Weighted-average discount rate for finance leases 3.79 % N/A

The following table summarizes the future minimum payments for operating and finance leases as of March 31, 2026, due in each year ending December 31:

The following table summarizes the future minimum payments for operating and finance leases as of June 30, 2026, due in each year ending December 31:

Year Operating Leases Finance Leases

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Revolver $ 41,313,110 $ 49,454,401

Credit Agreement 1,950,000 1,950,000

Term Note - related party 56,872,782 —

Credit Agreement - related party 3,892,039 1,950,000

Promissory Note — 1,375,000

Merger Note 28,943,615 28,943,615

Merger Note - related party 28,943,615 28,943,615

Convertible Note 161,961,751 —

Factoring debt 202,148,718 3,266,445

Other short-term debt 2,479,843 —

Acquisition loans 50,937,998 —

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The Allocation Agreement, which continues to be a valid and enforceable contract between Lyneer and IDC, states that repayment (or refinancing) of the Term Note, Seller Notes and Earnout Notes was assumed by and the responsibility of IDC.

In the event IDC cannot repay any of the assumed debt and Lyneer is require to make payments, IDC is obligated to repay Lyneer for amounts paid on IDC’s behalf.

The Company reassessed its accounting for joint-and-several liabilities under ASC 405-40 as of March 31, 2026 and concluded it is reasonably probable that IDC can repay their portion of the debt allocated per the Allocation Agreement and the Company does not expect to repay additional amounts on behalf of IDC.

In the event IDC cannot repay any of the assumed debt and Lyneer is required to make payments, IDC is obligated to repay Lyneer for amounts paid on IDC’s behalf.

The Company reassessed its accounting for joint-and-several liabilities under ASC 405-40 as of December 31, 2024 and concluded it is reasonably probable that IDC can repay their portion of the debt allocated per the Allocation Agreement and the Company does not expect to repay additional amounts on behalf of IDC.

As a result, the Company has not recorded any liability related to these joint and several debt obligations in accordance with ASC 405-40.

See Revolver (discussing the previous BMO Revolver), Term Note, Seller Notes and Earnout Notes below for those joint-and-several debts that are applicable to the Allocation Agreement.

At March 31, 2026, such indebtedness totaled approximately $ 70,035,397 .

The Company maintained a Revolver with BMO Bank, N.A.

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These borrowings are determined by the Company’s availability based on a formula of billed and unbilled accounts receivable as defined in the loan agreement.

On April 29, 2025, the Company’s subsidiary, Lyneer Staffing Solutions, LLC (“Lyneer”) entered into a Loan and Security Agreement (the “Loan Agreement”) with North Mill Capital, LLC (d/b/a SLR Business Credit (“SLR”)), providing for a $ 70 million (“Advanced Limit”) senior secured revolving credit facility (the “Revolver”).

providing for a $ 70 million (“Advanced Limit”) senior secured revolving credit facility (the “Revolver”).

The Loan Agreement replaced Lyneer’s prior senior secured revolving credit facility provided by BMO.

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BMO also assumed 3,439,803 shares of Atlantic International Corp previously owned by IDC as collateral for the new term loan.

The Company incurred $ 130,453 in

issuance costs and, according to ASC 470 — Debt (“ASC 470”) , is deferring these costs and will amortize as an adjustment to interest expense over the remaining term using the effective interest method.

The Company incurred $ 188,351 in issuance costs and, according to ASC 470 — Debt (“ASC 470”) , is deferring these costs and will amortize as an adjustment to interest expense over the remaining term using the effective interest method.

All the Company’s cash collections and disbursements are currently linked with bank accounts associated with the lender and funded using the Revolver.

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The interest rate on the Revolver is calculated as 1.00 % per annum above the Prime Rate, but not less than 5.75 % per annum.

The interest rate as of March 31, 2026 was 7.75 % per annum.

The interest rate as of June 30, 2026 was 7.75 % per annum.

The Revolver matures on April 29, 2028, unless the lender, at its option, in writing agrees to extend for a period of one year .

As of March 31, 2026, and December 31, 2025, the Company has recognized liability balances on the Revolver of $ 45,141,541 , including $ 130,453 of unamortized deferred issuance costs and $ 49,308,253 , including $ 146,148 of unamortized deferred issuances costs, respectively.

As of June 30, 2026, and December 31, 2025, the Company has recognized liability balances on the Revolver of $ 41,198,353 , including $ 114,757 of unamortized deferred issuance costs and $ 49,308,253 , including $ 146,148 of unamortized deferred issuances costs, respectively.

The Revolver contains certain customary covenants, including affirmative and negative covenants.

On April 17, 2026, SLR notified the Company of certain defaults.

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.

Commitments and Contingencies for further discussion.

On August 7, 2026, the Company and SPP entered into a settlement agreement.

Subsequent Events for further discussion.

Under the terms of the Revolver, the Company is prohibited from making dividends or distributions to owners who are not also co-borrowers on the Revolver.

Total available borrowing capacity on the Revolver as of March 31, 2026 was $ 4,760,718 .

Total available borrowing capacity on the Revolver as of June 30, 2026 was $ 3,267,809 .

On August 31, 2021, the Company and IDC as co-borrowers entered into a Term Note in the amount of $ 30,300,000 .

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Due to the remaining amount outstanding from IDC on the BMO Revolver being converted to a term loan and the new Revolver taking first position, the terms of the Tenth Amendment were superseded by the terms of the Revolver.

As of both March 31, 2026, and December 31, 2025, the Company has derecognized the Term Note, as discussed above;

therefore, the Company recognized liability balances on the Term Note of $ 0 .

The Term Note obligation is joint-and-several with IDC and is subject to IDC’s obligation under the Allocation Agreement with IDC discussed above.

On April 28, 2025, the Term Note lender foreclosed on IDC’s remaining 21,983,926 shares of Atlantic International Corp common stock (“IDC Shares”), after taking into consideration the shares assumed by BMO discussed above.

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The value of the IDC Shares on the day of the foreclosure was approximately $ 77,383,420 which far exceeded the liability due under the Term Note.

As of this report, the IDC Shares are pending transfer to the Term Note Lender due to litigation between IDC and an unrelated third party creditor of IDC.

The Company is reviewing the implications of the foreclosure on the Company’s obligations under the Term Note as the collateral received by the Term Note holders significantly exceeded the purported amounts due under the Term Note and the value of the securities is readily ascertainable.

The Company believes the resolution of this matter will not have an impact on the Company’s financial position or results of operations.

Lyneer had recognized liability balances on the Term Note of $ 0 as of both March 31, 2026 and December 31, 2025.

The Term Note is allegedly in default and the Company has sued the Term Note Lender.

The Term Note includes certain customary financial and non-financial covenants that the Company is required to comply with.

The Term Note is allegedly in default and the Company has sued the Term Note Lender.

Commitments and Contingencies and Note 20:

Subsequent Events for discussion on lawsuits related to the Term Note.

As a result and considering the Allocation Agreement, the Company did not recognize a joint-and-several liability owed to SPP for the Term Note as of December 31, 2025.

As disclosed in Note 20:

Subsequent Events , the Company and SPP subsequently agreed to a settlement agreement in August 2026 which provided a framework to settle obligations under the Term Note.

The Settlement Agreement was accounted for as a Type I subsequent event with respect to the Term Note which is jointly-and-severally liable with IDC and the Company has recognized the $ 56,872,782 liability owed to SPP under the Term Note within the “Loss on

settlement” line within the condensed unaudited consolidated statement of operations and comprehensive loss as of June 30, 2026.

As part of the purchase price consideration for the Transaction, the Company and IDC as co-borrowers issued various Seller Notes to former owners totaling $ 15,750,000 .

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As provided in the inter-creditor agreement between SLR and the Seller Note holders, Lyneer is prevented from making payments and the Seller Note holder are prevented from accepting payments from Lyneer.

As of both March 31, 2026, and December 31, 2025, the Company has derecognized the Seller Notes, as discussed above;

As of both June 30, 2026, and December 31, 2025, the Company has derecognized the Seller Notes, as discussed above;

therefore, the Company recognized liability balances of $ 0 .

10 unchanged sentences

As provided in the inter-creditor agreement between SLR and the Earnout Note holders, Lyneer is prevented from making payments and the Earnout Note holders are prevented from accepting payments from Lyneer.

As of both March 31, 2026, and December 31, 2025, the Company has derecognized the Earnout Notes, as discussed above;

As of both June 30, 2026, and December 31, 2025, the Company has derecognized the Earnout Notes, as discussed above;

therefore, the Company recognized liability balances of $ 0 .

7 unchanged sentences

On July 22, 2024, the Company entered into an amendment to extend the maturity date of the Credit Agreement to June 18, 2026.

The Company did not make the payment by the maturity date and is in default.

On April 17, 2026, the lender notified the Company of certain defaults.

Subsequent Events for further discussion.

Commitments and Contingencies for discussion.

Promissory Note

19 unchanged sentences

Merger Note $ 34,882,666 $ ( 6,056,385 ) $ 28,826,281

As of March 31, 2026, and December 31, 2025, the Company has recognized liability balances on the Merger Note of $ 28,849,748 , including $ 93,867 of unamortized deferred issuance costs and $ 28,826,281 , including $ 117,334 of unamortized deferred issuance costs, respectively.

As of June 30, 2026, and December 31, 2025, the Company has recognized liability balances on the Merger Note of $ 28,873,215 , including $ 70,400 of unamortized deferred issuance costs and $ 28,826,281 , including $ 117,334 of unamortized deferred issuance costs, respectively.

Subsequent Events for information concerning the release, discharge and cancellation of the Merger Note as a result of the SPP settlement agreement entered into on August 7, 2026.

Convertible Note

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Upon the occurrence of an event of default, the holder may declare the entire outstanding principal amount immediately due and payable.

In addition, in the event of a default, interest accrues on the outstanding principal amount at

a rate of 10 % per annum from the date of the event of default until payment, together with any other amounts due under the Convertible Note.

As of March 31, 2026, no events of default have occurred.

In addition, in the event of a default, interest accrues on the outstanding principal amount at a rate of 10 % per annum from the date of the event of default until payment, together with any other amounts due under the Convertible Note.

As of June 30, 2026, no events of default have occurred.

The Company concluded the holder’s put option upon an event of default meets the definition of a derivative requiring bifurcation, however the fair value of such derivative was of nominal value.

Other than in the case of default, the Convertible Note does not provide the holder with one or more contingent redemption options.

As of March 31, 2026, the outstanding principal balance of the Convertible Note is $ 161,961,751 , which reflects its carrying amount as of that date.

The Company is accounting for the liability portion of the note using the stated interest rate of zero , accordingly no interest has been recognized for the quarter ended March 31, 2026.

As of June 30, 2026, the outstanding principal balance of the Convertible Note is $ 161,961,751 , which reflects its carrying amount as of that date.

The Company is accounting for the liability portion of the note using the stated interest rate of zero , accordingly no interest has been recognized for the quarter ended June 30, 2026.

Due to the amount of the Company’s outstanding stock owned by the holder of the Convertible Note, the holder is a related party with respect to the Company and accordingly the Convertible Note is considered a note payable to a related party.

Factoring Debt

In connection with the Circle8 Acquisition, the Company assumed a receivables purchase agreement between Circle8 and Argentum Securities Ireland Plc (“Argentum”), which permits Circle8 to sell eligible billed and unbilled receivables to Argentum for cash proceeds in certain circumstances.

This arrangement is akin to a revolving line of credit with a borrowing base of approximately 90 % of Circle8’s eligible receivables and a borrowing capacity limit of € 174.9 million approximately $ 201.1 million as of March 31, 2026).

As of the acquisition date of January 23, 2026, Circle8 had previously borrowed up to the facility limit of € 174.9 million (approximately $ 201.1 million as of March 31, 2026).

The facility includes multiple financial and non-financial covenants, including an over-collateralization provision requiring Circle8 to maintain an eligible receivables balance greater than 1.1111 times the amount borrowed under the facility.

In connection with the Circle8 Acquisition, the Company assumed a receivables purchase agreement between Circle8 Group B.V.

and Argentum Securities Ireland Plc (“Argentum”), which permits Circle8 Group B.V.

to sell eligible billed and unbilled receivables to Argentum for cash proceeds in certain circumstances.

This arrangement is akin to a revolving line of credit with a borrowing base of approximately 90 % of Circle8 Group B.V.’s eligible receivables and a borrowing capacity limit of € 174.9 million approximately $ 199.3 million as of June 30, 2026).

As of the acquisition date of January 23, 2026, Circle8 Group B.V.

had previously borrowed up to the facility limit of € 174.9 million (approximately $ 199.3 million as of June 30, 2026).

The facility includes multiple financial and non-financial covenants, including an over-collateralization provision requiring Circle8 Group B.V.

to maintain an eligible receivables balance greater than 1.1111 times the amount borrowed under the facility.

The facility matures on the earlier of May 18, 2029, or (i) upon an event of default or (ii) if Argentum exercises a subjective acceleration clause, which would require the facility to be repaid within 85 days.

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The Company concluded that the facility, while legally described as a factoring agreement, does not qualify as a sale of a financial instrument under ASC Topic 860 — Transfers and Servicing, and continues to recognize receivables on the balance sheet and a liability recorded to reflect the consideration received.

Circle8 was in compliance with all provisions of the facility as of March 31, 2026.

During 2025 and the first quarter of 2026, the Company entered into four agreements to sell future receivables which allows for the factoring of receivables.

Circle8 Group B.V.

was in compliance with all provisions of the facility as of June 30, 2026.

During 2025 and the six months ended June 30, 2026, the Company entered into the following agreements to sell future receivables which allows for the factoring of receivables.

• On October 1, 2025, the Company sold $ 3,150,000 of receivables and received cash proceeds of $ 2,500,000 less $ 50,000 in origination fees.

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The weekly payments are $ 24,802 and the imputed interest rate is 47.10 %.

• On January 23, 2026, the Company also sold $ 2,500,000 of receivables and received cash proceeds of $ 2,000,000 less $ 20,000 in origination fees.

• On April 29, 2026, the Company refinanced the then outstanding balances of its October 2025 factoring agreements above, into a new factoring agreement for $ 2,805,511 of receivables.

The cash of $ 2,221,965 , less $ 22,444 in origination fees, was used for the payoff.

The refinancing was treated as a debt extinguishment after the Company’s analysis of ASC 470 and the Company recorded a $ 237,848 loss on debt extinguishment.

The weekly payments are $ 55,665 and the imputed interest rate is 47.10 %.

These four agreements have a good faith term of twelve months and also allow for a discounted repurchase price if the Company pays the cash proceeds back early.

On April 29, 2026, the Company refinanced the October agreements described above.

Subsequent Events for further information.

As of March 31, 2026, and December 31, 2025, the Company has recognized liability balances on the factoring agreements of $ 205,933,405 , including $ 47,771 of unamortized deferred issuance costs and $ 3,205,506 , including $ 60,939 of unamortized deferred issuance costs, respectively.

These agreements have a good faith term of twelve months , were made without recourse and also allow for a discounted repurchase price if the Company pays the cash proceeds back early.

The Company has not made payments on the above remaining agreements since May 21, 2026 and is in default as of June 30, 2026.

On August 6, 2026, the Company received a notice of default from the lender.

Subsequent Events for further discussion.,

As of June 30, 2026, and December 31, 2025, the Company has recognized liability balances on the factoring agreements of $ 202,127,079 , including $ 21,639 of unamortized deferred issuance costs and $ 3,205,506 , including $ 60,939 of unamortized deferred issuance costs, respectively.

Other short-term debt

During the six months ended June 30, 2026, the Company entered into the following business loan service agreements with the same lender of the domestic factoring agreements above.

• On January 23, 2026, the Company entered into a loan for $ 2,000,000 and $ 20,000 in origination fees, with contractual payments totaling $ 2,500,000 .

The weekly payments are $ 48,077 and the imputed interest rate is 45.67 %.

• On April 30, 2026, the Company entered into a loan for $ 1,050,000 and $ 10,500 in origination fees, with contractual payments totaling $ 1,312,500 .

The weekly payments are $ 25,240 and the imputed interest rate is 45.67 %.

These agreements have a good faith term of twelve months , were made without recourse and also allow for a discounted repurchase price if the Company pays the cash proceeds back early.

The Company has not made payments on the above remaining agreements since May 21, 2026 and is in default as of June 30, 2026.

On August 6, 2026, the Company received a notice of default from the lender.

Subsequent Events for further discussion.,

As of June 30, 2026, and December 31, 2025, the Company has recognized liability balances on other short-term debts of $ 2,463,482 , including $ 16,361 of unamortized deferred issuance costs and $ 0 , including $ 0 of unamortized deferred issuance costs, respectively.

Acquisition Loans

Swisslinx Acquisition Loan

In February 2023, Circle8 entered into a loan agreement with Luzerner Kantonalbank AG as Lender, for a credit facility of up to Fr.

29,000,000 (approximately $ 36,285,000 as of March 31, 2026) to partially finance the acquisition of 100 % of the shares in Swisslinx AG and Swisslinx International Ltd.

In February 2023, Circle8 Switzerland AG entered into a loan agreement with Luzerner Kantonalbank AG (“LUKB”) as Lender, for a credit facility of up to Fr.

29,000,000 (approximately $ 35,822,000 as of June 30, 2026) to partially finance the acquisition of 100 % of the shares in Swisslinx AG and Swisslinx International Ltd.

The facility has a maturity date of June 30, 2028.

1 unchanged sentence

The minimum amount per fixed advance or loan is Fr.

2,000,000 (approximately $ 2,502,000 as of March 31, 2026), with a maximum of 5 credit tranches.

The facility was fully drawn down at inception, with no additional advances as of March 31, 2026.

The interest rate consists of the Swiss Average Overnight Rate (“SARON”) plus an applicable margin based on the net debt ratio as of March 31 each reporting period.

2,000,000 (approximately $ 2,471,000 as of June 30, 2026), with a maximum of 5 credit tranches.

The facility was fully drawn down at inception, with no additional advances as of June 30, 2026.

The interest rate consists of the Swiss Average Overnight Rate (“SARON”) plus an applicable margin based on the net debt ratio each reporting period.

If the SARON rate is negative, a rate of 0.00 % is used as the base rate.

As of March 31, 2026, the margin was 3.70 % and the interest rate was 3.70 %.

As of March 31, 2026, the Company has a recognized liability balance on the Swisslinx acquisition loan of $ 28,890,147 .

As of June 30, 2026, the margin was 3.70 % and the interest rate was 3.70 %.

As of June 30, 2026, the Company has a recognized liability balance on the Swisslinx acquisition loan of $ 28,574,850 .

The Company did not make the June 30, 2026 principal payment of Fr.

3,750,000 (approximately $ 4,632,000 as of June 30, 2026);

however a formal default has not been declared by LUKB.

Circle8 Switzerland AG and LUKB are in discussions on renegotiation of the loan terms.

Seven Stars Acquisition Loan

On October 26, 2022, Circle8 entered into a credit agreement with Beechbrook Capital, LLP, to partially fund the acquisition of all outstanding shares in the capital of Seven Stars Holding B.V.

On October 26, 2022, Circle8 Group B.V.

entered into a credit agreement with Beechbrook Capital, LLP, to partially fund the acquisition of all outstanding shares in the capital of Seven Stars Holding B.V.

and each of its subsidiaries.

The agreement provides a credit facility (“Facility B”) in the aggregate amount of € 15,000,000 (approximately $ 17,330,000 as of March 31, 2026), and an available Accordion Facility for up to € 15,000,000 (approximately $ 17,330,000 as of March 31, 2026) of additional borrowing capacity as an increase to Facility B or, alternatively, an additional term facility on a pari passu basis with Facility B.

The agreement provides a credit facility (“Facility B”) in the aggregate amount of € 15,000,000 (approximately $ 17,091,000 as of June 30, 2026), and an available Accordion Facility for up to € 15,000,000 (approximately $ 17,091,000 as of June 30, 2026) of additional borrowing capacity as an increase to Facility B or, alternatively, an additional term facility on a pari passu basis with Facility B.

The maturity date is October 26, 2027.

2 unchanged sentences

Interest payments became due on December 31, 2022, and each March 31, June 30, September 30, and December 31, thereafter.

As of March 31, 2026, the interest rate was 10.53 %.

As of March 31, 2026, the Company has a recognized liability balance on the Seven Stars acquisition loan of $ 16,932,099 .

As of June 30, 2026, the interest rate was 10.68 %.

As of June 30, 2026, the Company has a recognized liability balance on the Seven Stars acquisition loan of $ 16,824,365 .

Königstein Acquisition Loans

On April 26, 2023, Circle8 entered into a loan agreement with Sparkasse KölnBonn to finance a portion of the purchase price payable under a share purchase agreement for the acquisition of 80 % of the shares outstanding in Konigstein Beratungsgesellschaft für EDV-Dienstleistungen GmbH.

This loan agreement provided Circle8 with loans totalling up to € 7,000,000 (approximately $ 8,087,000 as of March 31, 2026) in the following tranches:

On April 26, 2023, Circle8 GmbH entered into a loan agreement with Sparkasse KölnBonn to finance a portion of the purchase price payable under a share purchase agreement for the acquisition of 80 % of the shares outstanding in

Konigstein Beratungsgesellschaft für EDV-Dienstleistungen GmbH.

This loan agreement provided Circle8 with loans totaling up to € 7,000,000 (approximately $ 7,976,000 as of June 30, 2026) in the following tranches:

Investment Loan A:

Up to € 4,500,000 (approximately $ 5,199,000 as of March 31, 2026) as an amortizing loan with payments of € 250,000 (approximately $ 289,000 as of March 31, 2026) due at the end of each quarter, starting on December 30, 2023.

The maturity date is March 31, 2028, with quarterly payments of € 250,000 (approximately $ 289,000 as of March 31, 2026) The interest rate on the utilized amounts consists of the EURIBOR 3M, which resets quarterly, plus a margin of 3.20 % per annum.

As of March 31, 2026, the interest rate was 5.23 %.

As of March 31, 2026, the Company has a recognized liability balance on the Königstein Investment Loan A of $ 2,463,294 .

Up to € 4,500,000 (approximately $ 5,127,000 as of June 30, 2026) as an amortizing loan with payments of € 250,000 (approximately $ 285,000 as of June 30, 2026) due at the end of each quarter, starting on December 30, 2023.

The maturity date is March 31, 2028, with quarterly payments of € 250,000 (approximately $ 285,000 as of June 30, 2026) The interest rate on the utilized amounts consists of the EURIBOR 3M, which resets quarterly, plus a margin of 3.20 % per annum.

As of June 30, 2026, the interest rate was 5.38 %.

As of June 30, 2026, the Company has a recognized liability balance on the Königstein Investment Loan A of $ 2,182,508 .

The Investment A loan was in default in the amount of € 250,000 (approximately $ 285,000 as of June 30, 2026).

The € 250,000 payment was made in July 2026.

Investment Loan B:

Up to € 2,500,000 (approximately $ 2,888,000 as of March 31, 2026) as a bullet loan, with payment in full due on the maturity date of September 30, 2028.

Up to € 2,500,000 (approximately $ 2,849,000 as of June 30, 2026) as a bullet loan, with payment in full due on the maturity date of September 30, 2028.

The interest rate on the utilized amounts consists of the EURIBOR 3M, which resets quarterly, plus a margin of 3.60 % per annum.

As of March 31, 2026, the interest rate was 5.63 %.

As of March 31, 2026, the Company has a recognized liability balance on the Königstein Investment Loan B of $ 2,498,072 .

As of June 30, 2026, the interest rate was 5.78 %.

As of June 30, 2026, the Company has a recognized liability balance on the Königstein Investment Loan B of $ 2,507,929 .

The loan agreement stipulates that certain financial indicators in the form of annual financial statements are due no later than 180 days after the end of each financial year and no later than 45 days after the end of each quarter.

Failure to submit these required reports timely constitutes a breach of financial indicators under the loan agreement, and will increase the corresponding margin of each loan by 1.50 % per annum until such financial reports are submitted to the lender.

Seller Loans Entered into by Circle8

Seller Loans Entered into by Circle8 Group B.V.

Swisslinx Seller Loan

In March 2023, Circle8 entered into a seller loan agreement with Swisslinx AG and Swisslinx International Limited to partially fund the acquisition of 100 % of the shares in Swisslinx AG and Swisslinx International Limited.

The agreement provided Circle8 with a loan of Fr.

13,500,000 (approximately $ 16,891,000 as of March 31, 2026) with a maturity date of July 1, 2028.

In March 2023, Circle8 Switzerland AG entered into a seller loan agreement with Swisslinx AG and Swisslinx International Limited to partially fund the acquisition of 100 % of the shares in Swisslinx AG and Swisslinx International Limited.

The agreement provided Circle8 Switzerland AG with a loan of Fr.

13,500,000 (approximately $ 16,676,000 as of June 30, 2026) with a maturity date of July 1, 2028.

The interest rate is 5.00 % per annum.

Principal payments of Fr.

3,623,569 (approximately $ 4,534,000 as of March 31, 2026) and interest payments are due annually.

As of March 31, 2026, the Company has a recognized liability balance on the Swisslinx seller loan of $ 16,252,462 .

The Swisslinx seller loan is currently in default in the amount of

3,375,000 (approximately $ 4,223,000 as of March 31, 2026) due to litigation.

3,375,000 (approximately $ 4,169,000 as of June 30, 2026) and interest payments are due annually.

As of June 30, 2026, the Company has a recognized liability balance on the Swisslinx seller loan of $ 16,165,000 .

The Swisslinx seller loan is currently in default in the amount of Fr.

3,375,000 (approximately $ 4,169,000 as of June 30, 2026) due to litigation.

Commitments and Contingencies for further information.

Fixed Today Seller Loan

In April 2022, Circle8 entered into a seller loan agreement with Payment Secured B.V.

In April 2022, Circle8 Group B.V.

entered into a seller loan agreement with Payment Secured B.V.

to partially fund the acquisition of 100% of the shares in Fixed Today Holding B.V.

The agreement provided Circle8 with € 2,000,000 (approximately $ 2,311,000 as of March 31, 2026).

The agreement provided Circle8 Group B.V.

with € 2,000,000 (approximately $ 2,279,000 as of March 31, 2026).

The Fixed Today seller loan had a maturity date of April 14, 2024.

As of March 31, 2026, the Company has a recognized liability balance on the Fixed Today seller loan liability of $ 2,299,600 .

The Fixed Today seller loan is currently in default in the amount of € 2,000,000 (approximately $ 2,311,000 as of March 31, 2026).

As of June 30, 2026, the Company has a recognized liability balance on the Fixed Today seller loan liability of $ 2,278,800 .

The Fixed Today seller loan is currently in default in the amount of € 2,000,000 (approximately $ 2,279,000 as of June 30, 2026).

Subsequent to the executed amendments of the Company’s debt obligations described herein, the future minimum principal payments on the Company’s outstanding debt are as follows:

March 31, 2026

June 30, 2026

Remainder of 2026 $ 16,103,536

1 unchanged sentence

2028 68,070,727

2029 89,708,436

Total $ 567,504,609

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(“Citibank”) on March 5, 2019, whereby Citibank purchases specific receivables and pays the invoices at the discounted amount and the Company incurs a discount charge equal to the Secured Overnight Financing Rate plus 0.75 % to process the payments.

The discount charged ranged from 4.71 % to 4.83 % for the three months ended March 31, 2026.

The Company recognized total interest expense of $ 3,554,670 and $ 1,284,822 during the three months ended March 31, 2026 and 2025, respectively.

Interest expense related to the PEO was $ 1,018,013 and $ 0 for the three month periods ended March 31, 2026 and 2025, respectively.

Interest expense related to the discount charge was $ 67,869 and $ 331,763 for the three months ended March 31, 2026 and 2025, respectively.

$ 317,193 and $ 48,913 of deferred financing costs were recognized as a component of “interest expense” on the accompanying unaudited condensed consolidated statements of operations and comprehensive loss for the three months ended March 31, 2026 and 2025, respectively.

The discount charged ranged from 4.71 % to 4.88 % for the six months ended June 30, 2026.

The Company recognized total interest expense of $ 4,276,743 and $ 2,023,960 during the three months ended June 30, 2026 and 2025, respectively, and $ 7,831,413 and $ 3,308,782 during the six months ended June 30, 2026 and 2025, respectively.

Interest expense related to the PEO was $ 1,018,013 and $ 2,150,746 for the three and six ended June 30, 2026, and $ 838,327 for the three and six months ended June 30, 2025.

Interest expense related to the discount charge was $ 67,869 and $ 139,721 for the three months ended June 30, 2026 and 2025, respectively and $ 145,705 and $ 471,484 during the six months ended June 30, 2026 and 2025, respectively.

$ 111,089 and $ 42,195 of deferred financing costs were recognized as a component of “interest expense” on the accompanying unaudited condensed consolidated statements of operations and comprehensive loss for the three months ended June 30, 2026 and 2025, respectively, and $ 428,282 and $ 91,108 for the six months ended June 30, 2026, respectively.

Accrued Expenses and Other Current Liabilities

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The Company upon the Merger on June 18, 2024, put in escrow 4,704,098 shares at a closing price of $ 2.36 per share valued at $ 11,101,671 , as a reserve for the potential settlement amounts of Legacy SeqLL stockholders and was required to extend a settlement offer within 90 days from June 18, 2024.

The Company extended offers for settlement to the legacy stockholders, as a result of the Company failing to declare and pay a declared dividend as described in the Company’s filings, to issue shares of Atlantic International Corp stock at the September 10, 2024 closing stock price of $ 6.45 .

The Company has issued 773,944 shares in partial satisfaction of this settlement as of the issuance date of the Company’s March 31, 2026 unaudited condensed consolidated financial statements with an issuance stock price range of $ 2.03 - $ 6.20 per share, with an estimated additional 1,000,701 shares pending issuance, as of March 31, 2026.

On October 24, 2024 the Company entered into an Amended and Restated Settlement Agreement and General Release of Claims with the Company’s former Chief Executive Officer with regard to the Company failing to declare and pay a declared dividend as described in the Company’s filings and the Company’s former Chief Executive Officer agreed to provide consulting services to the Company.

On September 10, 2024, the Company extended offers for settlement to the legacy stockholders, as a result of the Company failing to declare and pay a declared dividend as described in the Company’s filings, to issue shares of Atlantic International Corp stock at the then closing stock price of $ 6.45 , which has no impact on the accrued expense balance.

During 2025, the Company executed settlement agreements with certain stockholders, which amounted to $ 2,378,470 of value based on the issuance of 773,944 shares of common stock multiplied by the closing stock price on each respective date of settlement, which ranged from $ 2.03 - $ 6.20 per share.

Accordingly, the Company reduced its accrued expense balance during 2025 to reflect such issuances.

The offer has ended and for the six months ended June 30, 2026, there have been no additional settlement agreements executed and no additional shares have been issued.

provide consulting services to the Company.

In full and final satisfaction of any and all obligations related to the dividend and consulting services, the Company agreed to the following:

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The PEO is engaged to process the Company’s payroll which is subject to a periodic charge of 1.5 % per calendar month for any unpaid balances.

The total liability due to the PEO as of March 31, 2026 was $ 39,908,098 , consisting of $ 35,301,862 of wages and salaries paid by the PEO and $ 4,606,236 of accrued interest.

The total liability due to the PEO as of June 30, 2026 was $ 44,200,332 , consisting of $ 38,461,363 of wages and salaries paid by the PEO and workers compensation accruals and $ 5,738,969 of accrued interest.

The total liability due to the PEO as of December 31, 2025 was $ 32,894,331 , consisting of $ 29,306,108 of wages and salaries paid by the PEO and $ 3,588,223 of accrued interest.

2 unchanged sentences

At the PEO’s option, at any time from March 16, 2026 to January 31, 2031, it may elect to settle any portion of the Repayment Amount by requiring the Company to issue shares of Common Stock with an aggregate value equal thereto, calculated using the quoted per-share closing price, equal to the amount designated by the PEO for share settlement.

At March 31, 2026 the carrying value of the obligation that can be settled in shares was $ 2,207,944 .

If the PEO elected full settlement of the obligation on March 31, 2026, the Company

would be required to issue 728,694 shares of its Common Stock to settle the obligation.

As the number of shares to be issued varies inversely with the market value of the Company’s Common stock, there is no contractual limit on the number shares that may be issued to settle the obligation.

On June 11, 2026, the PEO exercised 1,268,933 shares at a aggregate value of $ 833,177 based on the Company’s closing price on said date.

At June 30, 2026 the carrying value of the remaining obligation that can be settled in shares was $ 1,374,767 .

If the PEO elected full settlement of the remaining obligation on June 30, 2026, the Company would be required to issue 1,494,311 shares of its Common Stock to settle the obligation.

As the number of shares to be issued varies inversely with the market value of the Company’s Common stock, there is no contractual limit on the number of shares that may be issued to settle the obligation.

On May 4, 2026, Employers Personnel, LLC ("EP"), the Company's PEO provider for Lyneer, delivered a notice alleging that Lyneer was in material default under the parties' Professional Employee Services Agreement.

EP claimed the outstanding balance owed totaled approximately $ 37.4 million, which includes over $ 6.4 million in recent unpaid payroll funding advances, payroll taxes, fees and workers' compensation premiums.

Despite the alleged default, EP continued to provide payroll funding and maintain workers' compensation coverage for Lyneer's employees while the parties negotiated a resolution.

On May 4, 2026, the Company entered into a Common Stock Purchase Warrant Agreement (“CS Purchase Warrant Agreement”) with the PEO.

The warrants are to satisfy an outstanding payable of $ 4,144,416 .

Pursuant to the agreement, the PEO has the option, at any time from May 15, 2026 through January 31, 2031, to elect to settle all or a portion of the repayment amount by requiring the Company to issue shares of its Common Stock having an aggregate value equal thereto, calculated using the quoted per-share closing price, equal to the amount designated by the PEO for share settlement.

At June 30, 2026 the carrying value of the obligation that can be settled in shares was $ 4,144,416 .

If the PEO elected full settlement of the obligation on June 30, 2026, the Company would be required to issue 4,504,800 shares of its Common Stock to settle the obligation.

On May 11, 2026, EP withdrew the notice of default after the parties entered into the CS Purchase Warrant Agreement.

As of the filing date, EP continues to provide payroll funding and workers' compensation coverage under the Professional Employee Services Agreement.

While the notice of default was withdrawn, the agreement contains provisions that permit EP to terminate the agreement and/or discontinue payroll funding and related services upon the occurrence of certain events of default, including payment defaults.

Management continues to work collaboratively with EP and currently expects the relationship to continue in the ordinary course of business.

Retirement Plans

1 unchanged sentence

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.

There is no requirement for the

Company to match employee contributions to the plan.

The Company did not contribute to the plan during the six months ended June 30, 2026.

The Company’s European subsidiaries participate in government-mandated social security programs in the jurisdictions in which they operate.

1 unchanged sentence

These programs are administered by the government authorities and do not create any future payment obligations beyond the Company’s 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.

The Company recorded total statutory social security contributions in “cost of revenue” on the accompanying unaudited condensed consolidated statements of operations and comprehensive loss of $ 21,069 and $ 0 for the three months ended June 30, 2026 and 2025, respectively and $ 43,780 and $ 0 for the six months ended June 30, 2026 and 2025, respectively.

The Company recorded total statutory social security contributions in “selling, general and administrative” on the accompanying unaudited condensed consolidated statements of operations and comprehensive loss of $ 433,404 and $ 0 for the three months ended June 30, 2026 and 2025, respectively and $ 869,253 and $ 0 for the six months ended June 30, 2026 and 2025, respectively.

Commitments and Contingencies

9 unchanged sentences

Accordingly, Lyneer agreed to pay approximately $ 1,030,000 over 36 months, beginning in July 2023, to settle the claim.

As of March 31, 2026, the Company owes $ 131,429 and has accrued this full amount, which is recognized in “accrued expenses and other current liabilities” on the accompanying condensed consolidated balance sheets.

As of June 30, 2026, the Company owes $ 32,857 and has accrued this full amount, which is recognized in “accrued expenses and other current liabilities” on the accompanying unaudited condensed consolidated balance sheets.

On January 6, 2021, a class action wage and hour complaint was filed in the Superior Court of California, Los Angeles County, by Enrique Briseno as class representative.

2 unchanged sentences

The settlement agreement was signed on December 17, 2024 and has been finalized and executed and provided to the Court for approval.

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 condensed consolidated balance sheets.

The Company has paid $ 150,000 as of the date of this filing.

As of June 30, 2026 the Company owes $ 150,000 , which is recognized in “accrued expenses and other current liabilities” on the accompanying unaudited condensed consolidated balance sheets.

The remaining payments are due as follows:

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and August 31, 2026-$ 80,674 , which includes the employer’s side of payroll taxes of $ 5,674 .

The Company has not made the August 1, 2026 payment.

On June 16, 2021, a complaint was filed in the Superior Court of New Jersey Law Division, Middlesex County.

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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 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.

The final settlement agreement was executed and the full settlement amount was paid by the Company in January 2026.

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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.

The settlement agreement was signed November 16, 2023 and has been

finalized and executed.

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.

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.

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 condensed consolidated balance sheets.

The final settlement agreement is being reviewed by the Court for final approval.

The settlement funds will now be due from the Company within 90 days from June 25, 2026 (or about September 25, 2026) at the earliest.

The Judgment on the PAGA settlement was entered on July 20, 2026.

The settlement amount will be due in 90 days from that date, on or about October 16, 2026.

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.

On December 18, 2025, the Company and Rhino entered into a settlement agreement whereby the Company shall pay $ 1,000,000 .

As of March 31, 2026, the Company owes $ 860,000 and has accrued this full amount, which is recognized in “accrued expenses and other current liabilities” on the accompanying condensed consolidated balance sheets The Company has agreed to monthly payments of $ 30,000 until the balance is paid in full.

On April 2, 2026, Atlantic and its Lyneer subsidiaries, Lyneer Investments, LLC, Lyneer Holdings, Inc.

As of June 30, 2026, the Company owes $ 770,000 and has accrued this full amount, which is recognized in “accrued expenses and other current liabilities” on the accompanying unaudited condensed consolidated balance sheets The Company has agreed to monthly payments of $ 30,000 until the balance is paid in full.

On April 2, 2026, Atlantic and its Lyneer subsidiaries:

Lyneer Investments, LLC, Lyneer Holdings, Inc.

and Lyneer Staffing Solutions, LLC (collectively the “Lyneer Subsidiaries”) commenced a lawsuit in the Supreme Court of the State of New York, County of New York (Civil Index No.

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Atlantic is seeking a preliminary injunction enjoining SPP from continuing to proceed as if the outstanding indebtedness owed under the loans at issue had not been satisfied.

Subsequent Events for further discussion.

Atlantic has alleged in its complaint, that SPP launched a coordinated, pre-planned attack to seize control of the Lyneer subsidiaries based on a fabricated default, set forth in the Default Notices, and in bad faith of its own financial interests.

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The plaintiff is seeking declaratory relief that he was able to remove all officers of the Company and is entitled to declaratory, preliminary and permanent injunctive relief to take control of the Company.

Subsequent Events for further discussion.

On March 30, 2026, SPP notified Atlantic and the Lyneer Subsidiaries that certain events of default have occurred and are continuing under the Amended and Restated Loan Agreement dated as of April 29, 2025 (the "Financing Agreement"), SPP asserted that the events of default relate to our failure to satisfy certain financial and non-financial covenants under the Financing Agreement.

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(iii) the right to exercise all voting and economic interests in the Lyneer entities;

and (iv) the right to take all actions and exercise all remedies available to the Agents and/or the Lenders under the Loan Documents and applicable

and (iv) the right to take all actions and exercise all remedies available to the Agents and/or the Lenders under the Loan Documents and applicable law.

Additionally, SPP has attempted to exercise its pledge and has sought to try to replace the management of Lyneer.

The Company believes it has meritorious defenses to the claims of SPP and, as described above, has commenced a lawsuit to contest SPP’s actions.

Simultaneous with the default letter under the Financing Agreement as described above, SPP notified the Company of certain events of default under (a) the Credit Agreement, dated June 18, 2024, and (b) the Pledge and Security Agreement dated as of June 18, 2024.

Simultaneously with the default letter under the Financing Agreement as described above, SPP notified the Company of certain events of default under (a) the Credit Agreement, dated June 18, 2024, and (b) the Pledge and Security Agreement dated as of June 18, 2024.

Similar to the Financing Agreement default notice, SPP has asserted that the events of default also relate to our failure to satisfy certain financial and non-financial covenants under the Credit Agreement.

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In addition, SPP has attempted to exercise its pledge and has sought to try to replace the management of Lyneer.

The Company believes it has meritorious defenses to the claims of SPP and, as described above, and has commenced a lawsuit to contest SPP’s actions.

Circle8 Swisslinx Litigations

On August 7, 2026, the Company and SPP entered into a settlement agreement.

Subsequent Events for further discussion.

Circle8 Switzerland AG Swisslinx Litigations

Earn-Out Claim and Seller Loan Suspension Claim Settlement – Swisslinx Acquisition

In March 2025, Circle8 asserted a claim of approximately Fr.

24.6 million ($ 28.2 million as of March 31, 2026) against the sellers of Swisslinx International Ltd ("Swisslinx"), as well as against the W&I insurance company and Markel International Insurance Company Limited ("Markel"), in connection with alleged breaches of the Share Purchase Agreement dated February 22, 2023 (the "Swisslinx SPA"), including (to the extent this relates to the claim against the sellers) claims related to misleading and/or incorrect information.

In March 2025, Circle8 Switzerland AG.

asserted a claim of approximately Fr.

24.6 million ($ 30.4 million as of June 30, 2026) against the sellers of Swisslinx International Ltd ("Swisslinx"), as well as against the W&I insurance company and Markel International Insurance Company Limited ("Markel"), in connection with alleged breaches of the Share Purchase Agreement dated February 22, 2023 (the "Swisslinx SPA"), including (to the extent this relates to the claim against the sellers) claims related to misleading and/or incorrect information.

With respect to the claim against the sellers, an in-court settlement was reached in May 2026 whereby the sellers' claim of in total Fr.

20,100,000 ($ 23,100,000 as of March 31, 2026) (see below under Earn-Out Claim – Swisslinx Acquisition and Seller Loan Suspension Claim – Swisslinx Acquisition) was reduced to Fr.

10,100,000 (approximately $ 12,600,000 as of March 31, 2026).

20,100,000 ($ 24,829,000 as of June 30, 2026) (see below under Earn-Out Claim – Swisslinx Acquisition and Seller Loan Suspension Claim – Swisslinx Acquisition) was reduced to Fr.

10,100,000 (approximately $ 12,476,000 as of June 30, 2026).

Parties are currently in the process of finalizing the settlement.

Seller Loan Suspension Claim Settlement

Earn-Out Claim – Swisslinx Acquisition

In July 2025, the sellers of Swisslinx initiated legal proceedings against Circle8 Switzerland AG (as buyer), as well as against Circle8 Group B.V.

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The aggregate amount claimed by the sellers totals approximately Fr.

6.6 million ($ 7.6 million as of March 31, 2026), comprising Earn-Out 1 of Fr.

2.6 million ($ 3.0 million as of March 31, 2026), accounted for as contingent consideration, and Earn-Out 2 of Fr.

4.0 million ($ 4.6 million as of March 31, 2026), accounted for as a compensation arrangement under U.S.

6.6 million ($ 8.2 million as of June 30, 2026), comprising Earn-Out 1 of Fr.

2.6 million ($ 3.2 million as of June 30, 2026), accounted for as contingent consideration, and Earn-Out 2 of Fr.

4.0 million ($ 4.9 million as of June 30, 2026), accounted for as a compensation arrangement under U.S.

This total reflects the final calculated amount agreed upon following formal negotiations between the parties and subsequently accepted by the sellers.

Circle8 has disputed the sellers’ claim and has asserted its contractual rights in connection with its own claim arising from the alleged breaches of the Swisslinx SPA.

Circle8 has offset the Fr.

6.6 million ($ 7.6 million as of March 31, 2026) earn-out against its asserted claim of Fr.

24.6 million ($ 28.2 million as of March 31, 2026), rather than settling in cash.

In addition, Circle8 has issued a counterclaim against the sellers of Swisslinx in the first quarter of 2026 to seek damages arising from the alleged provision of misleading and/or incorrect information concerning the business of Swisslinx.

Circle8 believes its position is supportable and that it has meritorious defenses and claims.

Earn-Out Claim – Swisslinx Acquisition

Circle8 Switzerland AG has disputed the sellers’ claim and has asserted its contractual rights in connection with its own claim arising from the alleged breaches of the Swisslinx SPA.

Circle8 Switzerland AG has offset the Fr.

6.6 million ($ 8.2 million as of June 30, 2026) earn-out against its asserted claim of Fr.

24.6 million ($ 30.4 million as of June 30, 2026), rather than settling in cash.

In addition, Circle8 Switzerland AG has issued a counterclaim against the sellers of Swisslinx in the first quarter of 2026 to seek damages arising from the alleged provision of misleading and/or incorrect information concerning the business of Swisslinx.

Circle8 Group B.V.

believes its position is supportable and that it has meritorious defenses and claims.

Seller Loan Suspension Claim Settlement

In connection with the Swisslinx acquisition, the sellers also provided a seller loan in the amount of Fr.

13,500,000 ($ 16,891,000 as of March 31, 2026) to Circle8 Switzerland AG.

Based on the seller loan agreement, repayment of the seller loan is due in several installments up to and including 2028, with the legal possibility for Circle8 to suspend payment of each installment for 12 months.

13,500,000 ($ 16,676,000 as of June 30, 2026) to Circle8 Switzerland AG.

Based on the seller loan agreement, repayment of the seller loan is due in several installments up to and including 2028, with the legal possibility for Circle8 Switzerland AG to suspend payment of each installment for 12 months.

The first installment of the seller loan has been suspended since May 2025 for a period of 12 months.

Circle8 Switzerland AG has asserted rights to set-off.

Circle8 asserts its financial claims by declaring a set-off against the sellers’ entitlements, including earn-out payments and the seller loan.

Circle8 Switzerland AG has asserted rights to set-off and asserts its financial claims by declaring a set-off against the sellers’ entitlements, including earn-out payments and the seller loan.

It further states that, as a precautionary measure, repayment of due obligations under the seller loan have been postponed until the dispute is fully resolved.

In May 2026, the parties reached an in-court settlement, whereby the sellers' claim of in total Fr.

20,100,000 ($ 23,100,000 as of March 31, 2026) was reduced to Fr.

10,100,000 (approximately $ 12,600,000 as of March 31, 2026).

In May 2026, the parties reached an in-court settlement, whereby the sellers' claim of Fr.

20,100,000 ($ 24,829,000 as of June 30, 2026) was reduced to Fr.

10,100,000 (approximately $ 12,476,000 as of June 30, 2026).

The parties are currently in the process of finalizing the settlement.

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A summary of the activities of Level 3 fair value measurements is as follows:

March 31, 2026

Three Months Ended June 30, 2026

Circle8 Benelux Warrant Preferred Stock Purchase Warrant Bifurcated Derivatives Share Settled Earnout Circle8 Contingent Consideration Total

Beginning balance $ 1,766,515 $ 4,450,000 $ 2,420,000 $ 5,600,000 $ 2,098,574 $ 16,335,089

Issuance — — 2,197,800 — — 2,197,800

Settlements — ( 1,902,784 ) ( 5,277,644 ) — — ( 7,180,428 )

Gain on warrant exercise — ( 639,808 ) — — — ( 639,808 )

Change in fair value 4,313,485 ( 380,736 ) 817,298 — 251,426 5,001,473

Ending balance $ 6,080,000 $ 1,526,672 $ 157,454 $ 5,600,000 $ 2,350,000 $ 15,714,126

Six Months Ended June 30, 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 4,457,800 5,600,000 2,098,574 18,126,374

Settlements — ( 1,902,784 ) ( 5,277,644 ) — — ( 7,180,428 )

Gain on warrant exercise — ( 639,808 ) — — — ( 639,808 )

Change in fair value 4,284,509 ( 1,900,736 ) 977,298 — 251,426 3,612,497

Ending balance $ 6,080,000 $ 1,526,672 $ 157,454 $ 5,600,000 $ 2,350,000 $ 15,714,126

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.

Warrants, Mezzanine Preferred Stock and Mezzanine Equity for further discussion regarding the warrants.

The Circle8 Benelux Warrant is recorded in “warrant liabilities, current” and the Preferred Stock Purchase Warrant is recorded in “warrant liabilities, non-current”, the Bifurcated Derivatives are recorded in “other liabilities”, the Share S ettled Earnout and the Circle8 Contingent Consideration are recorded in “contingent consideration liabilities, current portion - related parties” on the accompanying unaudited condensed consolidated balance sheets.

The Bifurcated Derivatives settlement amount includes $ 2,099,391 related to the embedded derivative liability attributable to the exercise of Preferred Stock Purchase Warrants, calculated as the three-month issuance amount of $ 2,197,800 , less the waiver-fee component of $ 98,409 .

During the three months ended June 30, 2026 , the Company settled bifurcated derivative liability associated with certain embedded features of its preferred stock.

As a result of the settlement, the Company recorded a reduction in the liability of $ 5,277,644 .

The derivative liability was remeasured to fair value on June 30, 2026 , with changes in fair value recognized for $ 977,298 in the “other expenses, gains and losses” line item of the unaudited condensed consolidated statements of operations and comprehensive loss, 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, with the exception of $ 98,409 included in the Issuance line of Bifurcated Derivatives in the table above, which is related to certain additional shares of Series B Preferred Stock issued on June 25, 2026 for no additional consideration, and is recorded, along with the fair value of the host instrument, in the “selling, general and administrative” line item of the accompanying unaudited condensed consolidated statement of operations and comprehensive loss.

During the six months ended June 30, 2026, the Company recorded aggregate realized gains of approximately $ 640,000 on the exercise of the Series B Preferred Stock Warrants which are included in “other expenses, gains and losses” in the accompanying unaudited condensed consolidated statement of operations and comprehensive loss.

Warrants, Mezzanine Preferred Stock and Mezzanine Equity for further discussion regarding the warrants and the additional Series B Preferred Stock issuance.

Valuation Methodology and Assumptions

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The Circle8 Benelux Warrant is categorized as a Level 3 fair value measurement because the Company utilized significant unobservable inputs, including expected volatility, expected term, probability weighting of exit and non-exit scenarios, discount for lack of marketability, discount for lack of control, and timing of expected liquidity events.

The provisional fair value and March 31, 2026 fair value of the Circle8 Benelux Warrant were determined using a Monte Carlo simulation model that simulated the equity value based on a Geometric Brownian Motion framework.

The provisional fair value and June 30, 2026 fair value of the Circle8 Benelux Warrant were determined using a Monte Carlo simulation model that simulated the equity value based on a Geometric Brownian Motion framework.

Significant inputs used in the model to derive the provisional fair value used as of December 31, 2025 are as follows:

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Risk-free interest rate 3.5 %

Significant inputs used in the model at March 31, 2026 are as follows :

Estimated term 1 year

Significant inputs used in the model at June 30, 2026 are as follows:

Estimated term 0.75 years

Estimated annual volatility of underlying stock 50 %

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Risk-free interest rate 3.4 %

Significant inputs used in the model at June 30, 2026 are as follows:

Expected revenue volatility 3.2 %

Revenue discount rate 7.1 %

Risk-free interest rate 3.9 %

Series B Preferred Stock, Bifurcated Derivatives and Preferred Stock Purchase Warrant

The fair value of the Preferred Stock Purchase Warrant was determined using a Black-Scholes model t hat incorporates the use of a Monte Carlo simulation to determine the input representing the value of the underlying Series B Preferred Stock.

The result was equivalent to a fair value of $ 795 for each of the 5,600 separately exercisable units of the warrant as of March 31, 2026 .

The fair value of the Preferred Stock Purchase Warrant was determined using a Black-Scholes model that incorporates the use of a Monte Carlo simulation to determine the input representing the value of the underlying Series B Preferred Stock.

The result was equivalent to a fair value of $ 636 for each of the remaining 2,400 separately exercisable units of the warrant as of June 30, 2026.

The Preferred Stock Purchase Warrant is categorized as a Level 3 fair value measurement because the Company utilizes significant unobservable inputs, including the estimated fair value of the underlying Series B Preferred Stock, estimated volatility and expected term.

Significant inputs used in the model at March 31, 2026 are as follows :

Estimated term 1 year

Significant inputs used in the model at June 30, 2026 are as follows:

Estimated term 1 years

Estimated annual volatility 60 %

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Strike price for each underlying share $ 1,000

The underlying per share fair value of the Series B Preferred Stock as of March 31, 2026 was determined as follows:

The underlying per share fair value of the Series B Preferred Stock as of June 30, 2026 was determined as follows:

Common Stock prices were simulated using Geometric Brownian Motion on a daily basis through the end of the term.

Then the Series B Preferred Stock was determined to either convert to Common Stock or receive its stated value plus accrued but unpaid dividends, whichever was more economically advantageous.

Significant inputs used in the model at March 31, 2026 are as follows:

Significant inputs used in the model at June 30, 2026 are as follows:

Common Stock price $ 0.92

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The initial fair value of the Series B Preferred Stock was also measured at March 20, 2026 using the same methodology employed at March 31, 2026 which resulted in a per share fair value of $ 2,002 .

Significant inputs used in to the model at March 20, 2026 are as follows:

Significant inputs used in the model at March 20, 2026 are as follows:

Common Stock price $ 4.38

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These bifurcated features include:

(i) the contingent increase in the dividend rate, and (ii) embedded redemption features, which include certain terms labeled in the governing documents as “conversion features” but functioning economically in a manner akin to share-settled redemption features, as well as the redemption features

described in Note 15:

Warrants, Mezzanine Preferred Stock and Mezzanine Equity.

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The approximate $ 2,260,000 difference between the “with” and “without” scenarios was recorded as the initial fair value of the Bifurcated Derivatives.

The Company subsequently remeasured the bifurcated Derivatives at March 31, 2026 using a consistent valuation methodology, resulting in a fair value of $ 2,420,000 .

The Company subsequently remeasured the bifurcated derivatives attributable to the remaining 240 shares outstanding at June 30, 2026 using a consistent valuation methodology, resulting in a fair value of $ 157,454 or $ 656 per share versus $ 404 per share at issuance.

The increase in fair value during the period was primarily due to changes in the Company’s common stock price and the resulting effect on the expected economic outcomes of the bifurcated features.

Because the valuation relies on significant unobservable inputs and simulation-based techniques, the bifurcated derivative liability is classified as a Level 3 fair value measurement .

Issuances of new Bifurcated Derivatives during the six months ended June 30, 2026 , result from the exercise of Preferred Stock Purchase Warrants during the six months and the issuance of 150 additional shares of Series B Preferred Stock as payment of a waiver fee.

Settlements of Bifurcated Derivatives during the six months ended June 30, 2026 , were due to the redemptions of the associated shares of Series B Preferred Stock in which the derivatives were embedded.

The bifurcated derivative liability is classified as a Level 3 fair value measurement because the valuation relies on significant unobservable inputs and simulation-based techniques .

Segment Reporting

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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.

Circle8 Group B.V.

and Lyneer each provide similar staffing/consulting services and use similar service delivery processes.

However, Circle8 Group B.V.

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.

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.

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So ultimately the segment manager does not review discrete financial information summarized by temporary or permanent placement, but rather total by operating branch.

Circle8 is comprised of multiple entities in various European countries, and each country operation (e.g.

Circle8 Group B.V.

is comprised of multiple entities in various European countries, and each country’s operation (e.g.

staffing company brand) is its own business unit and has its own business activities, managing director, and subsidiaries with discrete financial information.

Accordingly, each business unit/country operation represents a component under ASC 280.

The managing directors are all accountable to the Circle8 segment manager.

The managing directors are all accountable to the Circle8 Group B.V.

segment manager.

Therefore, the Company has two reportable segments, Domestic and International, which are in the business of providing commercial staffing solutions.

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The Company does not have intra-entity sales.

Transfers between the segments were immaterial for the three months ended March 31, 2026.

Segment information for the three months ended March 31, 2026 consisted of the following:

Three Months Ended March 31, 2026

Domestic International

Transfers between the segments were immaterial for the three and six months ended June 30, 2026.

Segment information for the three and six months ended June 30, 2026 consisted of the following:

Three Months Ended June 30, 2026 Six Months Ended June 30, 2026

Domestic International Domestic International

Service revenue, net $ 113,815,710 $ 205,991,065 $ 218,454,562 $ 351,239,106

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( 14,053,850 ) ( 1,342,421 ) ( 27,193,789 ) ( 3,106,276 )

Gain on debt extinguishment

Loss on debt extinguishment

237,848 — 4,826 —

Loss on settlement 60,414,821 — 60,414,821 —

Interest expense

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( 77,835,990 ) ( 9,915,776 ) ( 103,524,041 ) ( 14,990,030 )

Income tax benefit

Income tax benefit/(expense) ( 24,052 ) 1,407,100 ( 16,129 ) 1,472,358

$ ( 77,860,042 ) $ ( 8,508,676 ) $ ( 103,540,170 ) $ ( 13,517,672 )

The Company had one reportable segment as of March 31, 2025 and segment information for the three months ended March 31, 2025 consisted of the following:

Three Months Ended March 31, 2025

The Company had one reportable segment as of June 30, 2025 and segment information for the three and six months ended June 30, 2025 consisted of the following:

Three Months Ended June 30, 2025 Six Months Ended June 30, 2025

Service revenue, net $ 102,896,993 $ 205,705,800

Cost of revenue:

91,478,299 183,100,984

Gross profit 11,418,694 22,604,816

Selling, general and administrative

18,870,535 38,270,014

Depreciation and amortization

1,232,750 2,469,139

Loss from operations

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Interest expense

2,023,960 3,308,782

Net loss before provision for income taxes

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( 9,618 ) ( 19,235 )

$ ( 10,718,169 ) $ ( 21,462,354 )

Concentrations of Credit Risk

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The Company places its cash and cash equivalents with financial institutions which it believes are of high creditworthiness.

The Company has bank accounts in the United States as well as countries in Europe in which it operates.

The Company’s Deposits in the United States are with banks insured by the United States Federal Deposit Insurance Corporation (“FDIC”).

The Company has bank accounts in the U.S.

as well as countries in Europe in which it operates.

The Company’s Deposits in the U.S.

are with banks insured by the U.S.

Federal Deposit Insurance Corporation (“FDIC”).

The FDIC insures deposits at member banks up to $ 250,000 per depositor.

The Company also holds

a portion of its cash and cash equivalents in accounts with foreign financial institutions that are not federally insured.

The Company’s cash balances with US banks in excess of FDIC insured limits amounted to $ 332,811 and $ 0 as of March 31, 2026 and December 31, 2025, respectively.

The Company also holds a portion of its cash and cash equivalents in accounts with foreign financial institutions that are not federally insured.

The Company’s cash balances with US banks in excess of FDIC insured limits amounted to $ 2,783,406 and $ 0 as of June 30, 2026 and December 31, 2025, respectively.

The Company has not experienced any losses with regard to its bank accounts and believes it does not pose a significant credit risk to the Company.

Other Concentrations

As of March 31, 2026 and December 31, 2025, the Company has a deposit related to workers’ compensation insurance in the amount of $ 8,000,000 with a professional employer organization (“PEO”).

As of June 30, 2026 and December 31, 2025, the Company has a deposit related to workers’ compensation insurance in the amount of $ 8,000,000 with a professional employer organization (“PEO”).

The PEO is the employer of record for substantially all of the Company’s engagement professionals, and as such certain costs of revenue are paid to the PEO and subsequently distributed to Company engagement professionals.

Subsequent Events for information concerning a notice of default sent by the PEO.

Accrued Expenses and Other Current Liabilities for information concerning a notice of default sent by the PEO.

Warrants, Mezzanine Preferred Stock and Mezzanine Equity

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The Offering was completed on March 20, 2026 (the “Series B Preferred Stock Closing Date”).

The cash proceeds from the Offering were $ 5,565,000 , which is net of a deduction of $ 35,000 to compensate the holder for the incurrence of transaction expenses.

The cash proceeds from the Offering were $ 5,565,000 , which is net of a deduction of $ 35,000 to compensate the holder for the transaction expenses incurred by them.

The Series B Preferred Stock ranks senior to the Company’s Common Stock with respect to dividend payments, redemption rights, distributions and payments upon the liquidation, dissolution and winding up of the Company.

Each share of Series B Preferred Stock entitles the holder to dividends initially equal to 5.0 % of the stock’s Stated Value, per annum payable quarterly in cash or shares of Series B Preferred Stock, at the option of the Company.

The dividends are cumulative and as of March 31, 2026, the Company has accrued $ 9,986 of dividends payable to Series B Preferred Shareholders for the period from Series B Preferred Share Closing Date through March 31, 2026.

The dividends are cumulative and as of June 30, 2026, the Company has accrued $ 146,604 of dividends payable to Series B Preferred Shareholders for the period from Series B Preferred Share Closing Date through June 30, 2026.

If the closing value of the Company’s Common Stock is less than an established Floor Price (initially set at $ 2.25 per share) then in effect, for five consecutive days, the dividend rate increases to 18.0 % of the Stated Value of the Series B Preferred Stock per annum.

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The adjusted Floor Price will be equal to 65 % of the lowest closing price of the Common Stock during the 15 trading days immediately preceding the Floor Reset Date but in no case will the adjustment increase the Floor Price.

Subsequent to March 31, 2026, but before these condensed consolidated financial statements were filed, the Company’s Common Stock closed below the Floor Price for five consecutive days.

The Floor Reset Date occurred on May 15, 2026 at which time the Floor Price was reset to $ 0.8255 .

During the quarter ended June 30, 2026 the Company’s Common Stock closed below the Floor Price for five consecutive days and the dividend rate was therefore adjusted to 18.0 % effective April 23, 2026.

The Series B Preferred Stock may be converted into such number of shares of Common Stock as is equal to the Stated Value of the Series B Preferred Stock divided by the applicable Market Conversion Price (defined below).

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After the Initial Conversion Price Period, the Market Conversion Price will be the lesser of:

(i) 90 % of the average of the three

lowest closing prices of the Common Stock during the ten trading days immediately preceding the applicable conversion date and (ii) 110 % of the Closing Price on the Series B Preferred Stock Closing Date.

(i) 90 % of the average of the three lowest closing prices of the Common Stock during the ten trading days immediately preceding the applicable conversion date and (ii) 110 % of the Closing Price on the Series B Preferred Stock Closing Date.

In no case will the applicable Market Conversion Price be less than the Floor Price then in effect.

In the event that the Company issues Common Stock at price lower than the conversion price that would otherwise be in effect for the Series B Preferred Stock or issues securities other than certain exempted transactions that may be converted into or exercised to acquire the Company’s Common Stock that have a conversion price or an exercise price lower than the conversion price that would otherwise be in effect for the Series B Preferred Stock the conversion price of the Services B Preferred Stock will decrease to the aforementioned sale, conversion, or exercise price as applicable.

have a conversion price or an exercise price lower than the conversion price that would otherwise be in effect for the Series B Preferred Stock the conversion price of the Services B Preferred Stock will decrease to the aforementioned sale, conversion, or exercise price as applicable.

No conversion shall be effective if, after conversion and giving consideration to attribution parties of the holder, the holder will have a beneficial ownership interest in the Company exceeding 9.99 % of the number of shares of Common Stock outstanding immediately after the conversion.

At March 31, 2026, the aggregate outstanding shares of Series B Preferred Stock were convertible into 1,368,036 shares of the Company’s Common Stock.

The Company’s Series B Preferred Stock contains variable share settlement provisions which are predominantly based to a fixed monetary amount.

Accordingly, settlements of the Company’s Series B Preferred Stock pursuant to such terms are accounted for as share-settled redemptions, rather than fixed share conversion.

Preferred Stock During the Initial Conversion Price Period the closing price of the Company’s common stock fell below 85 % of the Initial Conversion Price and as a result, the Market Conversion Price became effective for all settlements of Series B Preferred Stock that occurred during the quarter ending June 30, 2026.

Share settled redemptions occurred on various dates within the quarter ending June 30, 2026 at prices ranging from $ 0.8255 per share to $ 3.09 per share.

On June 25, 2026, the Company issued an additional 150 shares of Series B Preferred Stock to the Holder as a fee for a waiver of certain obligations under the Certificate of Designations.

The shares were issued for no additional consideration and the fair value of the Series B Preferred Stock, inclusive of bifurcated derivatives, was $ 239,193 which the Company recorded as an expense.

The waiver fee is included in “selling, general and administrative” expenses on the accompanying unaudited condensed consolidated statement of operations and comprehensive loss.

At June 30, 2026, the aggregate outstanding shares of Series B Preferred Stock were convertible into 311,084 shares of the Company’s Common Stock.

The Company may, at any time commencing on the thirtieth business day after the Series B Preferred Stock Closing Date, at its sole option, redeem some or all of the Series B Preferred Stock then outstanding, at a redemption price equal to the sum of (i) 110 % of the aggregate Stated Value of the outstanding Series B Preferred Stock, (ii) accrued but unpaid dividends, and (iii) all liquidated damages and other amounts due in respect to the Series B Preferred Stock (the “Optional Redemption Amount”), upon a prior written notice to the holder given at least thirty (30) days before such redemption (the “Optional Redemption Notice”).

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Upon any issuance by the Company or any of its subsidiaries of Common Stock, Common Stock equivalents for cash consideration, indebtedness or a combination of units thereof (the “Subsequent Financing”), the Purchaser shall have the right to participate in up to 25 % of the aggregate amount of such Subsequent Financing on the same terms, conditions and price provided for in the Subsequent Financing, during a period of 24 months after the Series B Preferred Share Closing Date.

The Series B Preferred Stock is not considered mandatorily redeemable, however the Series B Preferred Stock is redeemable upon events not solely in control of the Company.

Accordingly, the Company determined that mezzanine treatment is appropriate for the Series B Preferred Stock and has presented it as such in the condensed consolidated balance sheets and condensed consolidated statements of changes in mezzanine equity and stockholders’ deficit.

The Company concluded that the holder redemption features within the Series B Preferred Stock met all requirements for bifurcation and accordingly the Company separately recognized a liability embodying the estimated fair value of these features (the “Bifurcated Derivatives”) upon the issuance of Series B Preferred Stock.

The Series B Preferred Stock is not considered mandatorily redeemable, however the Series B Preferred Stock is redeemable upon events not solely in the Company’s control.

Accordingly, the Company determined that mezzanine treatment is appropriate for the Series B Preferred Stock and has presented it as such in the unaudited condensed consolidated balance sheets and unaudited condensed consolidated statements of changes in mezzanine equity and stockholders’ deficit.

Refer to Note 12:

Fair Value Measurements for additional information regarding the valuation of the Bifurcated Derivatives.

The Preferred Stock Purchase Warrant was issued as part of the Offering initially accounted for as a liability by the Company and accordingly are required to be measured initially and subsequently at fair value with changes thereto recorded within net income.

The Preferred Stock Purchase Warrant was issued as part of the Offering initially accounted for as a liability by the Company and accordingly is required to be measured initially and subsequently at fair value with changes thereto recorded within net income.

The Company valued the Preferred Stock Purchase Warrant initially at fair value upon issuance using a Black-Sholes model (see Note 12:

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Loss on issuance $ ( 11,613,736 )

The Company determined certain features embedded in the Series B in the Series B Preferred Stock met the requirements to be separately accounted for as derivative instruments.

The Company determined certain features embedded in the Series B Preferred Stock met the requirements to be separately accounted for as derivative instruments.

These features have been accounted for as a single compound derivative and had a fair value on March 20, 2026 of $ 2,260,000 , the residual Series B Preferred Stock host had a fair value of $ 8,948,736 (the “Initial Host Amount”).

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Fair Value Measurements for additional information regarding the valuation of the Preferred Stock Purchase Warrant liability.

At March 31, 2026 the aggregate outstanding Preferred Stock Purchase Warrant was convertible into 5,600 shares of Series B Preferred Stock.

If the Preferred Stock Purchase Warrant was exercised on March 31, 2026 the 5,600 shares of Series B Preferred Stock received upon exercise would be convertible into 1,368,036 shares of the Company’s Common Stock.

At June 30, 2026 the aggregate outstanding Preferred Stock Purchase Warrant was convertible into 2,400 shares of Series B Preferred Stock.

If the Preferred Stock Purchase Warrant was exercised on June 30, 2026 the 2,400

shares of Series B Preferred Stock received upon exercise would be convertible into 3,110,842 shares of the Company’s Common Stock.

Circle8 Benelux Warrants

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The Circle8 Benelux Warrant expires on April 1, 2027.

The Circle8 Benelux Warrant enables the holder to acquire a 9.8 % equity interest in Circle8 Benelux for an aggregate exercise price of € 784,000 (approximately $ 906,000 at March 31, 2026).

The Circle8 Benelux Warrant enables the holder to acquire a 9.8 % equity interest in Circle8 Benelux for an aggregate exercise price of € 784,000 (approximately $ 893,000 at June 30, 2026).

The holder of the Circle8 Benelux Warrant may also elect to cash-settle the warrant during the final year during which it is outstanding, for an amount that is equal to 9.8 % of the product of eight times the prior year EBITDA of Circle8 Benelux, less downward adjustments for certain debt-like items.

The Circle8 Benelux Warrant has been recorded in “warrant liabilities, non-current” on the accompanying

condensed consolidated balance sheet.

The Circle8 Benelux Warrant was provisionally measured on the Circle8 Acquisition Date based on Circle8’s carrying value thereon, and revalued at March 31, 2026.

The Circle8 Benelux Warrant has been recorded in “warrant liabilities, current” on the accompanying unaudited condensed consolidated balance sheet.

The Circle8 Benelux Warrant was provisionally measured on the Circle8 Acquisition Date based on Circle8’s carrying value thereon, and revalued at June 30, 2026.

Refer to Note 12:

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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.

The balance of the Year 1 Earnout Notes payable was $ 0 as of both June 30, 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.

The balance of the Year 2 Earnout Notes payable to LMH was $ 0 as of both June 30, 2026 and December 31, 2025.

On the date of the Merger, the Company derecognized this debt.

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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.

Interest expense incurred on the Earnout Notes to LMH totaled $ 0 for both the three months ended June 30, 2026 and 2025.

Transactions with Officers

As of June 30, 2026, the Company has a receivable from officers of $ 628,809 related to payroll taxes as a result of RSU vestings, which is included in “due from related parties, current” in the accompanying unaudited condensed consolidated balance sheets.

Transactions with IDC

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These amounts were determined by calculating the Company’s taxable income multiplied by the applicable tax rate.

Amounts payable to IDC of this nature amounted to $ 548,432 as of both March 31, 2026 and December 31, 2025, and are included in “other assets”, on the accompanying condensed consolidated balance sheets.

Amounts payable to IDC of this nature amounted to $ 548,432 as of both June 30, 2026 and December 31, 2025, and are included in “other assets”, on the accompanying unaudited condensed consolidated balance sheets.

For the second short-period ended December 31, 2024, Lyneer has filed consolidated income tax returns with Atlantic International Corp.

Total amounts receivable from IDC, amounted to $ 2,692,867 as of March 31, 2026 and is included in “other assets”, on the accompanying condensed consolidated balance sheets.

This consists of $ 500,000 related to the expenses paid by Lyneer for the balance remaining on the BMO Revolver rolled into the current Revolver, $ 2,741,299 related to expenses

incurred by IDC and paid by the Company and $ 548,432 payable to IDC for taxes payable.

Total amounts receivable from IDC, amounted to $ 1,369,833 as of December 31, 2025, and is included in “other assets”, on the accompanying condensed consolidated balance sheets.

Total amounts receivable from IDC, amounted to $ 0 as of June 30, 2026 due to a one-time valuation allowance of $ 2,903,284 during the six months ended June 30, 2026 related to the two year anniversary of carrying balances related to IDC, thereby fully reserving the receivable balance.

Total amounts receivable from IDC, amounted to $ 1,369,833 as of December 31, 2025, and is included in “other assets”, on the accompanying unaudited condensed consolidated balance sheets.

This consists of $ 500,000 related to the expenses paid by Lyneer for the balance remaining on the BMO Revolver rolled into the current Revolver, $ 1,418,265 related to expenses incurred by IDC and paid by the Company and $ 548,432 payable to IDC for taxes payable.

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On June 18, 2024, the Company entered into a $ 35,000,000 Merger Note with IDC.

Debt for further information.

Debt and Note 20:

Subsequent Events for further discussion.

Additionally, IDC was issued 25,423,729 shares of the Company’s common stock at a market value of $ 2.36 per share, or $ 60,000,000 in the aggregate.

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Debt for further information.

On August 7, 2026, the Company and SPP entered into a settlement agreement.

Subsequent Events for further discussion.

Transactions with Axiom and Related Entities

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The Axiom Consulting Agreements have an initial term of one year , and thereafter automatically renew for successive periods of one year , unless terminated by either party giving at least 3 months prior written notice.

Pursuant to the Axiom Netherlands Consulting Agreement, the Company is required to pay Axiom Netherlands € 2,400,000 (approximately $ 2,759,000 as of March 31, 2026) annually, with four equal payments invoiced in advance on a quarterly basis and payable within 30 days of the invoice date.

Pursuant to the Axiom Consulting Agreement, the Company is required to pay Axiom € 1,200,000 (approximately $ 1,379,000 as of March 31, 2026) annually, with four equal payments invoiced in advance on a quarterly basis and payable within 30 days of the invoice date.

The Company recognized $ 693,879 as expense under the Axiom Consulting Agreements during the quarter ended March 31, 2026 and this amount is included in “selling, general and administrative” in the accompanying unaudited condensed consolidated statement of operations.

The Company additionally incurred $ 33,962 related to independent contractors placed by Axiom during the quarter ended March 31, 2026 and are included in “selling, general and administrative” in the accompanying unaudited condensed consolidated statement of operations.

Pursuant to the Axiom Netherlands Consulting Agreement, the Company is required to pay Axiom Netherlands € 2,400,000 (approximately $ 2,735,000 as of June 30, 2026) annually, with four equal payments invoiced in advance on a quarterly basis and payable within 30 days of the invoice date.

Pursuant to the Axiom Consulting Agreement,

the Company is required to pay Axiom € 1,200,000 (approximately $ 1,367,000 as of June 30, 2026) annually, with four equal payments invoiced in advance on a quarterly basis and payable within 30 days of the invoice date.

The Company recognized $ 1,161,164 as expense under the Axiom Consulting Agreements during the six months ended June 30, 2026, which is included in “selling, general and administrative” in the accompanying unaudited condensed consolidated statement of operations and comprehensive loss.

The Company additionally incurred $ 33,962 related to independent contractors placed by Axiom during six months ended June 30, 2026, which is included in “selling, general and administrative” in the accompanying unaudited condensed consolidated statement of operations and comprehensive loss.

Stock-Based Compensation

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Restricted Stock Units

The Company has granted 1,170,510 RSUs to employees, which are fully vested, and 1,000,000 RSUs to non-employees, which are fully vested, during the three months ended March 31, 2026.

As of March 31, 2026, the Company had 0 unvested RSUs.

The Company has granted 1,170,510 RSUs to employees, which are fully vested, and 1,000,000 RSUs to non-employees, which are fully vested, during the six months ended June 30, 2026.

As of June 30, 2026, the Company had 0 unvested RSUs.

The following table summarizes the Company’s restricted stock activity consisting of RSUs:

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Vested ( 8,924,634 ) $ 4.10

Unvested at March 31, 2026 — $ —

The vesting date fair value of RSUs that vested during the three months ended March 31, 2026 and 2025 was $ 4.10 and $ 2.36 , respectively.

8,924,634 and 120,969 shares vested during the three months ended March 31, 2026 and 2025, respectively.

The weighted-average grant date fair value per share of awards granted during the three months ended March 31, 2026 and 2025 was $ 1.59 and $ 5.91 , respectively.

As of March 31, 2026, there was $ 0 of unrecognized stock-based compensation related to RSUs outstanding.

Unvested at June 30, 2026 — $ —

The vesting date fair value of RSUs that vested during the six months ended June 30, 2026 and 2025 was $ 4.10 and $ 2.36 , respectively.

8,924,634 and 241,938 shares vested during the six months ended June 30, 2026 and 2025, respectively.

The weighted-average grant date fair value per share of awards granted during the six months ended June 30, 2026 and 2025 was $ 1.59 and $ 5.91 , respectively.

As of June 30, 2026, there was $ 0 of unrecognized stock-based compensation related to RSUs outstanding.

Stock Options

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The fair value of the Company’s stock options is estimated on the date of grant using the Black-Scholes option-pricing model.

The company has granted 1,625,000 stock options to employees during the three months ended March 31, 2026.

The weighted-average grant date fair value of the stock options granted during the three months ended March 31, 2026 and 2025 was $ 1.69 and $ 0.00 , respectively.

The Company has granted 1,625,000 stock options to employees during the six months ended June 30, 2026.

The weighted-average grant date fair value of the stock options granted during the six months ended June 30, 2026 and 2025 was $ 1.69 and $ 2.37 , respectively.

The following table summarizes the Company’s stock option activity:

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Forfeited ( 1,100,000 ) $ 2.25

Outstanding at March 31, 2026 1,525,000 $ 1.82 $ 3,165,978

Exercisable at March 31, 2026 — $ — $ —

Vested or expected to vest at March 31, 2026 1,525,000 $ 1.82 $ 3,165,978

As of March 31, 2026, there was $ 1,928,847 of unrecognized stock-based compensation related to stock options outstanding and the average remaining contractual life on outstanding options was 2.48 years.

Outstanding at June 30, 2026 1,525,000 $ 1.82 $ —

Exercisable at June 30, 2026 — $ — $ —

Vested or expected to vest at June 30, 2026 1,525,000 $ 1.82 $ —

As of June 30, 2026, there was $ 1,928,847 of unrecognized stock-based compensation related to stock options outstanding and the average remaining contractual life on outstanding options was 3.48 years.

Stock-based compensation expense is included in “selling, general and administrative” on the accompanying unaudited condensed consolidated statements of operations and comprehensive loss was:

Three Months Ended

June 30, Six Months Ended

2026 2025 2026 2025

Stock-based compensation expense $ 772,933 $ 6,291,751 $ 4,603,918 $ 12,309,724

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Three Months Ended

June 30, Six Months Ended

2026 2025 2026 2025

Shares retained to fund withholding taxes — — 2,026,237 —

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Common Stock Issuances for Services Performed

During the three months ended March 31, 2025, the Company issued 65,148 shares of the Company’s common stock outside of the Incentive Plan for prior services performed at an issuance stock price range of $ 4.64 - $ 5.85 .

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 Company’s 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.

During the six months ended June 30, 2026, the Company issued 24,429 shares of the Company’s common stock outside of the Incentive Plan for prior services performed at an issuance stock price of $ 3.07 .

During the six months ended June 30, 2025, the Company issued 65,148 shares of the Company’s common stock outside of the Incentive Plan for prior services performed at an issuance stock price range of $ 4.64 - $ 5.85 .

For the three months ended June 30, 2026 and 2025, the Company recorded an income tax expense (benefit) of $ 1,383,048 and $ 9,618 and $ 1,456,229 and $ 19,235 for the six months ended June 30, 2026 and 2025, respectively.

The Company’s effective tax rate for the six months ended June 30, 2026 and 2025 was 1.2 % and 0.1 %, respectively.

effective tax rate for the six months ended June 30, 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.

The application of purchase accounting resulted in a provisional recognition as of January 23, 2026 of $ 33,266,355 in deferred tax liabilities, net related to book-to-tax temporary differences for recognized intangible assets.

As of June 30, 2026, the deferred tax asset was $ 0 and the deferred tax liability of $ 29,738,302 .

As of June 30, 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 for a valuation allowance, the Company considers all positive and

negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies, and past financial performance.

In assessing the need for a valuation allowance, the Company considers all positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies, and past financial performance.

Earnings per Share

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The Company applies the two-class method in computing earnings per share.

Because the Series B Preferred Stock does not participate in losses or negative undistributed earnings beyond its earned dividend for the period, no residual net loss was allocated to the Series B Preferred Stock for the three months ended March 31, 2026.

For purposes of determining diluted earnings per share, the Company evaluates the Series B Preferred Stock under both the two-class method and the if-converted method and reports the more dilutive result, if any.

Preferred stock dividends reduce income available to common stockholders in basic EPS, and when there is a net loss, the preferred dividend increases the loss attributable to common stockholders.

The “gain on redemption of preferred stock” results from the variable share-settled redemptions of Series B Preferred Stock effectuated through the issuance of the Company’s Common Stock.

On January 23, 2026, in connection with the Circle8 Acquisition, the Company recognized a redeemable NCI representing the common stock of Circle8 Consulting held by the noncontrolling holder.

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Because the redeemable NCI is in the form of common stock redeemable at an amount other than fair value, the periodic accretion affects the EPS numerator.

Consistent with the Company’s policy election, the $ 2,142,883 accretion recorded during the three months ended March 31, 2026 was treated as a reduction of income available to Atlantic common stockholders.

Because the Company had an accumulated deficit as of March 31, 2026, the accretion was recorded as a reduction of additional paid-in capital rather than retained earnings.

Consistent with the Company’s policy election, the $ 2,142,883 accretion recorded during the six months ended June 30, 2026 was treated as a reduction of income available to Atlantic common stockholders.

Because the Company had an accumulated deficit as of June 30, 2026, the accretion was recorded as a reduction of additional paid-in capital rather than retained earnings.

The redeemable NCI represents common stock of Circle8 Consulting, not Atlantic common stock, and therefore does not increase the denominator of Atlantic’s basic or diluted earnings per share.

For the three months ended March 31, 2026, net loss attributable to Atlantic common stockholders for basic and diluted earnings per share was further reduced by the earned and payable Series B Preferred Stock dividend of $ 9,986 .

For the six months ended June 30, 2026, net loss attributable to Atlantic common stockholders for basic and diluted earnings per share was further reduced by the earned and payable Series B Preferred Stock dividend of $ 146,604 .

ASC 260 requires the Company to start from income (loss) attributable to the parent after allocation to NCI and then deduct preferred dividends and other dividend-like adjustments in arriving at income (loss) available to common stockholders.

Diluted net loss per share reflects the potential dilution that could occur if securities or other contracts to issue Atlantic common stock were exercised, converted, or settled in shares.

For the three months ended March 31, 2026 and 2025, the Company reported net losses and, accordingly, all potential common shares were antidilutive and excluded from diluted earnings per share.

For the six months ended June 30, 2026 and 2025, the Company reported net losses and, accordingly, all potential common shares were antidilutive and excluded from diluted earnings per share.

As a result, diluted net loss per share equals basic net loss per share for each period presented

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Three Months Ended

Net loss attributable to Atlantic $ ( 30,746,125 ) $ ( 10,744,185 )

June 30, Six Months Ended

2026 2025 2026 2025

Net loss attributable to Circle8

$ ( 86,368,718 ) $ ( 10,718,169 ) $ ( 117,114,843 ) $ ( 21,462,354 )

Series B Preferred Stock dividend ( 136,617 ) — ( 146,604 ) —

Gain on redemption of preferred stock

7,144,244 — 7,144,244 —

Deemed dividend from accretion of redeemable NCI — — ( 2,142,883 ) —

Net loss available to Atlantic common stockholders $ ( 32,898,994 ) $ ( 10,744,185 )

Weighted-average Atlantic common shares outstanding, basic and diluted 74,007,596 53,975,575

Net loss available to Circle8 common stockholders $ ( 79,361,091 ) $ ( 10,718,169 ) $ ( 112,260,086 ) $ ( 21,462,354 )

Weighted-average Circle8 common shares outstanding, basic and diluted 80,971,660 54,553,905 77,508,866 54,266,337

Net loss per share, basic and diluted $ ( 0.98 ) $ ( 0.20 ) $ ( 1.45 ) $ ( 0.40 )

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• Stock options and RSUs — treasury stock method.

1,525,000 shares related to stock options and 322,580 shares related to RSUs were anti-dilutive for the three months ended March 31, 2026.

1,525,000 shares related to stock options and 322,580 shares related to RSUs were anti-dilutive for the six months ended June 30, 2026.

• Series B Preferred Stock — two-class method for basic earnings per share because the instrument is a participating security, and the if-converted method for diluted earnings per share, with the more dilutive result reported when applicable.

1,368,036 shares were anti-dilutive for the three months ended March 31, 2026.

311,084 shares were anti-dilutive for the six months ended June 30, 2026.

• Convertible Note — if-converted method, subject to the satisfaction of any conversion contingencies.

Because the Convertible Note was contingently exercisable as of March 31, 2026, the Company evaluated the instrument under the applicable contingently convertible/contingently issuable share guidance.

53,291,744 shares were anti-dilutive for the three months ended March 31, 2026.

Because the Convertible Note was contingently exercisable as of June 30, 2026, the Company evaluated the instrument under the applicable contingently convertible/contingently issuable share guidance.

53,291,744 shares were anti-dilutive for the six months ended June 30, 2026.

• Share Settled Earnout arrangement — contingently issuable share guidance.

The Company evaluates the arrangement based on the number of shares, if any, that would be issuable if the end of the reporting period were the end of the contingency period.

Because the arrangement was contingently issuable as of March 31, 2026, it was excluded from diluted earnings per share.

9,552,348 shares were anti-dilutive for the three months ended March 31, 2026.

Because the arrangement was contingently issuable as of June 30, 2026, it was excluded from diluted earnings per share.

31,460,451 shares were anti-dilutive for the six months ended June 30, 2026.

• Share Settled Payable outstanding indebtedness — If-converted method.

728,694 shares were anti-dilutive for the three months ended March 31, 2026.

5,999,112 shares were anti-dilutive for the six months ended June 30, 2026.

• Preferred Stock Purchase Warrants — treasury stock method.

1,368,036 shares were anti-dilutive for the three months ended March 31, 2026.

3,110,842 shares were anti-dilutive for the six months ended June 30, 2026.

• Merger Note — if-converted method, subject to the satisfaction of any conversion contingencies.

9,489,710 shares were anti-dilutive for the three months ended March 31, 2026.

Because the Convertible Note was contingently exercisable as of June 30, 2026, the Company evaluated the instrument under the applicable contingently convertible/contingently issuable share guidance.

31,460,451 shares were anti-dilutive for the six months ended June 30, 2026.

• Circle8 Benelux Warrant — not included in Atlantic’s denominator as settlement is not in the Company’s common stock.

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

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 Company’s 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 Stock’s 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 origination fees.

On the same date, the Company also entered into an additional factoring agreement.

The two new agreements allow for the factoring of $ 4,118,011 of receivables.

The weekly payments are $ 80,905 and the imputed interest rate ranges from 47.10 % - 45.67 %.

These agreements were made without recourse and also allow for a discounted repurchase price if the Company pays the cash proceeds back early.

SPP Litigation Updates

Atlantic Corp, Lyneer Investments LLC, Lyneer Holdings, Inc.

and Lyneer Staffing Solutions v.

SPP Credit SPP Credit Advisors LLC.

As previously reported in our Form 10-K for the year ended December 31, 2025, on April 2, 2026, Atlantic and Lyneer commenced a lawsuit in the Supreme Court of the State of New York, Count of New York (Civil Index No.

154264/2026) against SPP.

At the same time, Atlantic was seeking a preliminary injunction with an Order to Show Cause and Temporary Restraining Order.

Atlantic was seeking a preliminary injunction enjoining SPP from continuing to proceed as if the outstanding indebtedness owed under the loan at issue had not been satisfied.

On April 29, 2026, the Court denied Atlantic’s request for relief and set a trial date on the preliminary injunction for June 23, 2026.

The parties are currently in settlement discussions.

SPP Credit Advisors LLC and Rick Arrowsmith v.

Atlantic International Corp et al.

In the Court of Chancery of The State of Delaware (Case No.

2026-0448-JTL)

As previously reported in our Form 10-K for December 31, 2025, on April 2, 2026, Rick Arrowsmith, on behalf of SPP, and in response to the Company’s and its Lyneer Subsidiaries’ commencement on the same day of a lawsuit against SPP, commenced a lawsuit in the Court of Chancery of the State of Delaware against the Company, its’ officers and former officers, based on the unfounded alleged events of default, the plaintiff, appointed by SPP to take managerial control of the Lyneer subsidiaries.

On April 27, 2026, the Court entered a Status Quo Order (the “Order”).

The Order controls the governance and management of the Lyneer Subsidiaries pending (a) a final disposition of the matter, or (b) an order that expressly modifies or supersedes the Order.

The Order requires Lyneer to operate in the ordinary course of business (as defined) and to provide Mr.

Arrowsmith with certain current financial statements as reasonably requested.

SPP Lyneer Term Note Default Notice

On March 30, 2026, SPP notified Atlantic and Lyneer that certain events of default have occurred and are continuing under the Financing Agreement.

SPP asserted that the events of default related to our failure to satisfy certain financial and non-financial covenants under the Financing Agreement of the Term Note By letter dated April 30, 2026, SPP notified Atlantic and Lyneer that certain additional Events of Default had occurred, specifically as a result of (i) various Events of Default set forth in a statement from SLR to Lyneer Staffing dated April 17, 2026 (the “SLR Default”) as described below, and (ii) Certain payments made to or for the benefit of Atlantic.

SPP has attempted to exercise its pledge and has sought to try to replace the management of Lyneer.

The company believes it has meritorious defense to the claims of SPP and, as described above, has commenced a lawsuit to contest SPP’s actions.

SPP Credit Agreement Default Notice

By letter dated April 30, 2026, SPP notified Atlantic and Lyneer of certain additional Events of Default, specifically, as a result of (i) various Events of Default described in the above-described SLR Letter, (ii) various Events of Default described in the Default Notice dated March 30, 2026 from SPP to Lyneer, and (iii) permitting a subsidiary of Atlantic to make certain payments to or for the benefit of Atlantic.

The Company believes it has meritorious defenses to the claims of SPP and, as described above, has commenced a lawsuit to contest SPP’s actions.

The Company has evaluated subsequent events through August 19, 2026, as detailed below.

Series B Preferred Stock

On July 9, 2026, the Company issued 146 shares of Series B Preferred Stock as payment in kind for accrued dividends.

On July 9, 2026, 600 shares of Series B Preferred Stock was issued from the exercise of warrants.

From June 30, 2026 through the date of this filing, 896 shares of Series B Preferred Stock were converted into 1,161,379 shares of Common Stock at a conversion price of $ 0.8255 per share.

Company Symbol Changed to “CIRC”

The Company’s Common Stock will continue to be quoted on the Nasdaq Stock Market (“Nasdaq”) and began trading under the new name and ticker symbol “CIRC” on July 2, 2026.

There was no change to the Company’s CUSIP in connection with the change.

Employers Personnel, LCC

On May 4, 2026, Employers Personnel, LLC ("EP"), the Company's professional employer organization ("PEO") provider for Lyneer, delivered a notice alleging that Lyneer was in material default under the parties' Professional Employee Services Agreement..

On July 9, 2026, the Company issued 1,298,444 shares in satisfaction of the February 3, 2026 PEO warrant as the Company had previously issued a portion of the remaining Repayment Amount pursuant to the same Warrant due to calculation formula.

On August 5, 2026, Employers Personnel, LLC ("EP"), the Company's professional employer organization ("PEO") provider for Lyneer, delivered a notice alleging that Lyneer was in material default under the parties' Professional Employee Services Agreement.

EP claimed the outstanding balance owed totaled approximately $ 37 million in unpaid payroll funding advances, payroll taxes, and workers' compensation premiums.

Despite the alleged default, EP continued to provide payroll funding and maintain workers' compensation coverage for Lyneer's employees while the parties negotiated a resolution.

On May 4, 2026, the Company entered into a Common Stock Purchase Warrant Agreement (“CS Purchase Warrant Agreement”) with EP.

The warrants are to satisfy an outstanding payable of $ 4.1 million.

Pursuant to the agreement, EP has the option, at any time from May 15, 2026 through January 31, 2031, to elect to settle all or a portion of the repayment

amount by requiring the Company to issue shares of its common stock having an aggregate value equal to the amount designated for settlement, based on the quoted closing market price of the Company's common stock on the applicable settlement date.

On May 11, 2026, EP withdrew the notice of default after the parties entered into the CS Purchase Warrant Agreement.

On August 7, 2026, EP withdrew the notice of default after the parties entered into a term sheet (“Term Sheet”).

As of the filing date, EP continues to provide payroll funding and workers' compensation coverage under the Professional Employee Services Agreement.

Management continues to work collaboratively with EP and currently expects the relationship to continue in the ordinary course of business.

Delisting Notice

On May 29, 2026, the Company received a notice (the “Notice”) from the Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq”) stating that the Company is not in compliance with Nasdaq Listing Rule 5250(c)(1) (the “Rule”), due to the delayed filing of its Quarterly Report on Form 10-Q for the period ended March 31, 2026 (the “Form 10-Q”) with the U.S.

Securities and Exchange Commission (the “SEC”).

The Rule requires Nasdaq-listed companies to timely file all required periodic financial reports with the SEC.

The Company believes that the filing of the current Form-10-Q cures the rule deficiency.

Circle8 Swisslinx litigations

In May 2026, the parties reached an in-court settlement, whereby the sellers' claim of in total Fr.

20,100,000 ($ 23,100,000 as of March 31, 2026) was reduced to Fr.

10,100,000 (approximately $ 12,600,000 as of March 31, 2026).

The parties are currently in the process of finalizing the settlement.

While the notice of default was withdrawn, the agreement contains provisions that permit EP to terminate, suspend, modify or condition continued services or workers’ compensation coverage.

On August 7, 2026, the Company and the PEO signed a nonbinding Term Sheet intended to pay $ 20 million in debt owed by Lyneer through issuance of CIRC shares.

Factoring Agreements and Other Short-Term Debt

On August 6, 2026, the lender of the domestic factoring agreements and other short-term debt notified the Company that they were in default under the agreements dated January 23, 2026, April 29, 2026 and April 30, 2026.

At a minimum, it was requested to bring all outstanding balances current by end of day, Monday, August 10, 2026, or the lender would be forced to take legal action.

The Company did not make any further payments.

The Company is in discussions with the lender to settle the matter.

SPP Credit Advisors, LLC (“SPP”) Settlement

On August 7, 2026, the Company and SPP entered into a settlement agreement resolving all outstanding litigation between the parties, releasing, cancelling, and discharging the Company’s $ 35 million Merger Note due March 2027 and substantially restructuring the Company’s remaining legacy financing arrangements with SPP.

The settlement agreement cures purported defaults under the Company's obligations to SPP, restores the remaining indebtedness to its contractual non-default interest rate, eliminates default interest and establishes an orderly framework for settling the remaining indebtedness.

Main settlement highlights are as follows:

• Release, cancellation and discharge of the Company's $ 35 million Merger Note due March 2027, eliminating all associated future payments and stock conversion rights, including potential equity dilution.

• Resolution of all outstanding litigation between the parties and existing defaults, including dismissal of the Delaware and New York litigation and mutual releases among the parties.

• Capital structure protection through irrevocable share retirement rights.

As part of the transaction, SPP will grant the Company an irrevocable option to purchase all approximately 21.9 million existing shares currently held by SPP for $ 0.00001 per share, providing the Company with the unconditional right to retire those shares.

Simultaneously, the Company will issue approximately 21.9 million newly issued registered shares to SPP (“New Shares”).

The New Shares were issued to SPP on August 13, 2026.

• Immediate relinquishment of shareholder rights.

Effective upon closing, SPP will irrevocably relinquish all voting, dividend and other shareholder rights associated with the existing shares pending their retirement.

• Elimination of default interest and restoration of the remaining indebtedness to a 5.0 % non-default interest rate.

• Approximately 18 -month orderly share disposition framework designed to facilitate repayment obligations while supporting an orderly market for the Company's common stock.

Proceeds to SPP from the sale of New Shares will reduce indebtedness owed under the SPP Settlement, which is $ 62.5 million.

Of this amount, $ 56.9 million relates to the SPP term note which is jointly-and-severally liable with IDC.

The Debt Allocation Agreement between the Company and IDC remains valid and legally enforceable, such that the Company can take legal against IDC if SPP proceeds from the sale of New Shares does not cover the obligation.

In that instance, the residual shortfall owed to SPP would convert into a 13 month term note.

• The Company accounted for amounts owed under the SPP Settlement as a Type I subsequent event, and recognized a $ 60.4 million non-cash loss in the quarter ended June 30, 2026.

The Company will account for the issuance of New Shares to SPP in the third quarter of 2026, the period when the shares were issued.

NASDAQ Notice

On August 13, 2026, the Company received a deficiency letter from the Nasdaq Listing Qualifications Department (the “Staff”) of NASDAQ notifying the Company that, for the last 30 consecutive business days, the closing bid price for the Company’s common stock has been below the minimum $1.00 per share required for continued listing on The NASDAQ Global Select Market pursuant to NASDAQ Listing Rule 5450(a)(1) (the “Minimum Bid Price Requirement”).

The NASDAQ deficiency letter has no immediate effect on the listing of the Company’s common stock, and its common stock will continue to trade on The NASDAQ Global Market under the symbol “CIRC” at this time.

In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company has been given 180 calendar days, or until February 9, 2027, to regain compliance with the Minimum Bid Price Requirement.

If at any time before February 9, 2027, the bid price of the Company’s common stock closes at $1.00 per share or more for a minimum of 10 consecutive business days, the Staff will provide written confirmation that the Company has achieved compliance.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements