Acquisition Strategy - Atlantic completed the acquisition of Lyneer Investments LLC on June 18, 2024, marking a significant expansion of its business operations[19]. - Atlantic's acquisition strategy targets companies with over $50 million in revenue and EBITDA margins of at least 10%[24]. - Atlantic is focusing on high-demand fields such as medical, legal, and financial services for its acquisition targets[22]. - Atlantic plans to pursue both "cornerstone" and "tuck-in" acquisitions to enhance its service offerings and market reach[24]. - The staffing industry is experiencing fragmentation and economic uncertainty, presenting opportunities for strategic consolidation[23]. - Lyneer's growth strategy involves organic expansion and strategic acquisitions, but may strain its management systems and resources[100]. - Lyneer's acquisition strategy may not be executed effectively, and there are no definitive agreements with potential targets[103]. Financial Performance - Lyneer reported a net loss of $135,479,890 for the year ended December 31, 2024, with previous losses of $15,252,020 and $3,221,058 for 2023 and 2022 respectively[66]. - Service revenue for the year ended December 31, 2024, was $442,609,814, an increase of $41,235,113 or 10.3% compared to $401,374,701 in 2023, primarily driven by a 10.6% increase in temporary placement services revenue[178]. - Cost of revenue increased to $395,431,491 in 2024 from $354,496,441 in 2023, reflecting an increase of $40,935,050 or 11.5% due to higher service revenue[180]. - Gross profit for 2024 was $47,178,323, a slight increase of $300,063 or 0.6% from $46,878,260 in 2023, with gross profit as a percentage of service revenue decreasing to 10.7% from 11.7%[181]. - Selling, general and administrative expenses rose to $64,021,052 in 2024, an increase of $18,579,393 or 40.9% compared to $45,441,659 in 2023, primarily due to higher transaction costs related to the merger[183]. - The net loss for the year ended December 31, 2024, was $135,479,890, compared to a net loss of $15,252,020 in 2023, reflecting an increase in losses of $120,227,870[177]. Debt and Financing - Lyneer has approximately $104,045,357 in total debt obligations as of December 31, 2024, including a $35 million Merger Note to IDC[67][68]. - The company faces substantial risks from competition, with competitors having greater financial and marketing resources, and low barriers to entry in the staffing industry[74]. - Lyneer has been required to seek at least $20 million in future financing prior to September 15, 2024, to restructure outstanding indebtedness[76]. - The company relies on its ability to raise additional funds to support its operations and repay outstanding debts, which may not be available on favorable terms[77]. - The Company issued shares and entered into additional debt obligations during the year ended December 31, 2024[200]. - The Company has received conditional approval for a new credit facility expected to close by the end of April 2025[204]. Market and Industry Trends - The U.S. Bureau of Labor Statistics anticipates a 6% annual growth in demand for licensed and vocational nurses through 2031, with about 9,600 open positions annually[51]. - 82.4% of hiring managers in public companies struggle with talent retention, indicating a significant need for effective staffing solutions[51]. - The alternative legal service providers market is valued at $14 billion, highlighting a growing sector within staffing services[51]. - The staffing industry is highly competitive, with no single company dominating the market, reflecting trends such as increasing demand for skilled labor and flexible working models[58]. - Talent shortages persist in several disciplines, which could adversely affect Lyneer's ability to meet employer demands[99]. Legal and Compliance Risks - Lyneer faces risks associated with litigation, including class action lawsuits related to wage and hour violations, which could result in substantial liabilities[83]. - The company has accrued $300,000 for a pending settlement related to a wage and hour class action lawsuit, which is awaiting court approval[159]. - The company has accrued $650,000 for a settlement related to another class action wage and hour complaint, also pending court approval[161]. - Lyneer's contracts are largely terminable for convenience, making revenue unpredictable and vulnerable to sudden decreases[89]. - The company is subject to various U.S. and foreign trade laws, which if violated, could result in substantial fines and reputational harm[122]. Cybersecurity and Technology - The company acknowledges the increasing importance of cybersecurity and is in the process of developing appropriate measures to enhance its cybersecurity posture[148]. - The company is increasingly dependent on digital technology, facing growing cybersecurity risks that could potentially damage business operations[117]. - Cybersecurity incidents have occurred with third-party vendors, but none have had a material impact on the company to date[121]. - The company has obtained cybersecurity insurance, but it may not be sufficient to cover all potential losses from cyberattacks[121]. Corporate Governance - The principal stockholder, IDC, owns approximately 43% of Lyneer's common stock, which may lead to conflicts of interest and affect corporate governance[104]. - Anti-takeover provisions in the company's charter may hinder stockholder attempts to change management or control[134][135]. - The exclusive forum provision in the company's charter may limit stockholders' ability to bring claims in preferred jurisdictions, potentially increasing litigation costs[138]. Stock Performance and Future Outlook - The company does not anticipate paying any cash dividends on its common stock in the foreseeable future, with capital appreciation being the sole source of gain for investors[139]. - The high and low closing bid price of the company's common stock from June 18, 2024, to December 31, 2024, was $8.97 and $2.36 respectively[164]. - As of March 21, 2025, the closing stock price for the company's common stock on the Nasdaq Global Select Market was $6.20[165]. - The company has changed its corporate name from SeqLL Inc. to Atlantic International Corp. and its trading symbol to ATLN, with common stock trading on the Nasdaq Global Select Market starting December 11, 2024[164].
SEQLL(SQL) - 2024 Q4 - Annual Report