ATLANTIC INTERNATIONAL CORP.

Atlantic International Corp. (ATLN) operates in the strategic staffing and workforce solutions industry, primarily through its subsidiary Lyneer Investments LLC ("Lyneer") and, following a recent acquisition, Circle8 Group B.V. ("Circle8"). The company's core business involves providing comprehensive staffing services across various sectors, including food production, manufacturing, logistics, and specialized high-growth IT and technology staffing [Item 1]. The industry is characterized by fragmentation and intense competition, with low barriers to entry in many markets. Consolidation is a key trend, driven by the opportunity for larger agencies to develop national relationships with major customers [Item 1].

Lyneer's business model focuses on temporary placement, direct hire, permanent placement, and vendor management services/managed service provider support. Revenue is generated through client contracts that are typically for one to two years and automatically renewable, though clients can terminate for convenience at any time [Item 1]. Lyneer primarily serves small- and medium-sized businesses, as well as large national and multinational clients, with over 60% of its revenue base coming from the latter [Item 1]. The company's service offerings span accounting & finance, administrative & clerical, hospitality, IT, legal, light industrial, and medical fields [Item 1].

Circle8, acquired on January 23, 2026, is a European IT-technology talent and consulting enablement platform. It provides specialized workforce solutions to enterprises, technology companies, financial institutions, and public-sector organizations, focusing on sourcing, deploying, and managing highly skilled professionals in information technology and related digital disciplines [Item 1]. Circle8 generates the substantial majority of its revenue from the placement of technology professionals on temporary and contract assignments, billing clients based on hourly or daily rates. It also offers payrolling services and recruitment for permanent positions [Item 1].

For the fiscal year ended December 31, 2025, Atlantic International Corp. reported total service revenue, net, of $435,878,730 [Item 7]. Cost of revenue was $389,892,967 [Item 7], resulting in a gross profit of $45,985,763 [Item 7] and a gross margin of 10.6% [Item 7]. Selling, general and administrative expenses amounted to $91,289,682 [Item 7], and depreciation and amortization was $4,928,514 [Item 7]. The company reported a loss from operations of $(50,232,433) [Item 7]. Net loss before provision for income taxes was $(59,396,928) [Item 7], and income tax expense was $(33,991) [Item 7], leading to a net loss of $(59,430,919) [Item 7]. Diluted EPS was $(1.08) [Item 7]. Cash and cash equivalents stood at $81,134 [Item 8], while total debt was $84,665,040 [Item 8]. The company's total committed resources were over-advanced by $(341,622) [Item 7].

Comparing the fiscal year 2025 to 2024, total service revenue, net, decreased by $6,731,084 [Item 7], or 1.5% [Item 7]. This decline was primarily driven by a $7,419,564 [Item 7] (1.7%) [Item 7] decrease in temporary placement services revenue, mainly due to lower revenues from the largest client. Conversely, permanent placement and other services revenue increased by $688,480 [Item 7], or 18.2% [Item 7]. Gross profit decreased by $1,192,560 [Item 7], or 2.5% [Item 7], and the gross margin slightly decreased from 10.7% in 2024 to 10.6% in 2025 [Item 7]. Selling, general and administrative expenses increased significantly by $27,268,630 [Item 7], or 42.6% [Item 7], primarily due to higher stock compensation expense and a full year of expenses as a result of the Merger [Item 7]. Net loss improved from $(135,479,890) in 2024 to $(59,430,919) in 2025 [Item 7], a change of $76,048,971 [Item 7] or 56.1% [Item 7]. Diluted EPS improved from $(3.68) in 2024 to $(1.08) in 2025 [Item 7].

During the reported period, Atlantic International Corp. completed the acquisition of Circle8 Group B.V. on January 23, 2026, extending its capabilities into specialized high-growth IT and technology staffing across Europe [Item 1]. The acquisition involved issuing 12,516,070 shares of common stock to Guus Franke, valued at $48.3 million, and a convertible promissory note of $161,961,751 convertible into 53,291,744 shares of common stock to Axiom [Item 1]. Additionally, Axiom is entitled to an earnout of US $2.5 million based on revenue metrics and a one-time Profit Payment equal to Circle8 Group's net profit for 2025 [Item 1]. The company also settled certain seller-side acquisition-related costs by issuing 4,000,000 shares of common stock, valued at $15.4 million, to Axiom's financial advisor [Item 1]. The company also entered into a new $70 million senior secured revolving credit facility on April 29, 2025, replacing a prior facility [Item 7].

Management anticipates that the combination with Circle8 will enhance scale, liquidity, and access to capital, positioning the combined entity for potential premium valuation multiples and expanded international reach with established global clients [Item 7]. The transaction is expected to drive operating efficiencies, improve profitability, and strengthen revenue stability through a diversified customer base and balanced geographic exposure across the United States and Europe [Item 7]. Circle8 is a European IT-technology talent and consulting enablement platform that manages over 16,000 technology professionals and specializes in software development, data analytics, cybersecurity, project management, and emerging technologies [Item 1]. The acquisition of Circle8 is expected to diversify revenue and end markets, balancing industrial staffing with higher-margin, higher-growth IT and technology talent solutions, expand multinational customer coverage, enhance scale and operating leverage, increase revenue visibility, and provide a platform for disciplined future growth [Item 1].

The company's growth strategy is dependent upon finding suitable acquisition targets and executing transactions in a viable manner, aiming to build a global staffing organization that redefines how companies grow professional teams [Item 1]. Atlantic plans to integrate companies and maximize synergies and economics to improve sales and lower operating costs, while continuing to focus on acquiring high-margin, profitable outsourced services and workforce solution providers [Item 1]. The company believes this approach is particularly applicable in several growth sectors, including legal and financial services, technology, and healthcare [Item 1]. The acquisition of Circle8 demonstrated this strategic rationale by extending capabilities into specialized high-growth IT and technology staffing across Europe, complementing North American industrial staffing operations [Item 1].

Regarding operational outlook, the company plans to leverage new technologies and business partnerships to create streamlined hiring processes [Item 1]. This includes utilizing artificial intelligence (AI) to reduce recruitment times by leveraging automation for certain aspects of the job search process [Item 1]. Lyneer's scalable model is designed to fit business needs for medium and large clients, or clients with disparate locations, through consistent team effort for staffing and recruitment, program management, custom database solutions for data management, and continuous improvement through open communication with clients [Item 1].

For capital allocation, the company continues to pursue additional debt and equity financing to fund its business plan [Item 1A]. The 2025 Omnibus Equity Incentive Plan, approved on November 7, 2025, initially reserved 10,000,000 shares of common stock for issuance, with the number of shares adjusted upward to reflect 15% of the issued and outstanding shares as of December 31st of each year [Item 18]. The company does not anticipate paying any cash dividends on its common stock in the foreseeable future, intending to retain all available funds and future earnings to fund the development and growth of its business [Item 5].

Management has explicitly flagged several structural headwinds and execution risks to its growth plan. The company has an accumulated deficit, recurring losses, and expects future losses, raising substantial doubt about its ability to continue as a going concern [Item 8]. The company believes its cash on hand and cash generated from operations will not be sufficient to pay the Merger Note and other outstanding indebtedness in full when due and to fund ongoing operations, requiring additional financing [Item 1A]. Lyneer has been in default under its principal credit facilities and outstanding promissory notes, and any future defaults could materially adversely impact its financial condition and long-term viability [Item 1A]. The company is also a party to litigation with its former lender, which could force repayment of indebtedness and have a material adverse effect [Item 1A].

Geographic, regulatory, and macro factors also pose constraints. Circle8's international operations subject the company to risks from political unrest, military conflicts, natural disasters, severe weather conditions, and global health emergencies [Item 1A]. Foreign currency fluctuations, changes in tax rates, adoption of new international tax legislation, or tax audits could materially adversely affect operating results [Item 1A]. Government regulations in jurisdictions where Circle8 operates, such as Germany, Switzerland, and the Netherlands, are stringent and may restrict contract lengths, impose special taxes, or require equal-pay for temporary workers, potentially impacting revenues, costs, and operating margins [Item 1A]. More restrictive immigration regulations may also lead to greater expense or inability to fulfill client demand [Item 1A].

The company faces material macroeconomic risks, including the intensely competitive and rapidly changing business environment, which could render its services obsolete or uncompetitive, leading to reduced margins and loss of market share [Item 1A]. Circle8's international operations are subject to risks from political unrest, military conflicts, natural disasters, severe weather conditions, and global health emergencies, which could materially adversely affect reputation, business, and financial results [Item 1A]. Foreign currency fluctuations, particularly the Euro, and changes in tax rates or new international tax legislation, such as the OECD's Pillar Two global minimum effective tax rate, could materially adversely affect operating results and tax positions [Item 1A]. Regulatory risks include government regulations in Europe that restrict contract lengths, impose special taxes, or require equal-pay for temporary workers, potentially impacting revenues, costs, and operating margins [Item 1A]. More restrictive immigration regulations may also lead to greater expense or inability to fulfill client demand [Item 1A]. Operational risks include significant debt obligations, with Lyneer having been in default under its principal credit facilities and outstanding promissory notes, and the company believing its cash on hand will not be sufficient to repay the Merger Note and other outstanding indebtedness when due [Item 1A]. The company is also exposed to employment-related claims and losses, including class action lawsuits, which could result in substantial liabilities and consume financial and managerial resources [Item 1A]. Cybersecurity risks are significant, as the company currently lacks formalized cybersecurity measures, a dedicated team, or specific protocols, making it vulnerable to cyberattacks, data breaches, and improper disclosure or loss of sensitive data, which could damage business operations and reputation [Item 1C]. The company's growth and acquisition strategy may not be executed effectively, and there is no assurance that future acquisitions will be consummated on favorable terms or that acquired operations will be profitable [Item 1A].

Management's overall tone emphasizes a strategic vision of building a global staffing organization through mergers and acquisitions, leveraging new technologies, and expanding into high-growth sectors. The company explicitly states its mission to redefine how companies grow professional teams and to create streamlined hiring processes that address modern employment economics [Item 1]. Key strategic priorities include the diversification of revenue and end markets, balancing industrial staffing with higher-margin IT and technology talent solutions, expanding multinational customer coverage, enhancing scale and operating leverage, increasing revenue visibility, and establishing a platform for disciplined future growth [Item 1]. Management anticipates that the combination with Circle8 will enhance scale, liquidity, and access to capital, positioning the combined entity for potential premium valuation multiples and expanded international reach [Item 7]. Jeffrey Jagid, CEO, has an annual base salary of $800,000 [Item 11] and an annual bonus of $800,000 [Item 11], contingent upon the company recording a minimum of $250,000,000 in revenues [Item 11]. He is also entitled to a one-time bonus of $300,000 [Item 11] if the company completes a registered direct offering or other financing of at least $5,000,000 in 2026 [Item 11]. Guus Franke, Executive Chairman of the Board, has an annual base salary of $800,000 [Item 11] with 5% automatic annual increases [Item 11], and is eligible for an annual bonus equal to his base salary commencing in 2027, contingent on the company meeting certain revenue targets [Item 11].