ATLANTIC INTERNATIONAL CORP.
For the period ended Sep 30, 2025. Filed Nov 14, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2025 · Filed Nov 14, 2025
CIRC$0.19-6.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-06-30; filed 2025-08-14.
0001605888-25-000031
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-11-14.
0001605888-25-000055
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 128 previous paragraphs and 131 current paragraphs.
90 unchanged; 35 reworded; 5 added; 3 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 12 previous and 12 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (5)
Current report
Advisory fees incurred in connection with the Merger for the three and nine months ended September 30, 2025 and 2024 were as follows:
Current report
Interest expense for the three and nine months ended September 30, 2025 and 2024 were as follows:
Current report
Other expense for the three and nine months ended September 30, 2025 and 2024 were as follows:
Current report
On July 4, 2025, the “One Big Beautiful Bill Act” (“OBBBA”), was signed into law, which is considered the enactment date under U.S. GAAP. Key corporate tax provisions include the restoration of 100% bonus depreciation, immediate expensing for domestic research and experimental expenditures, changes to Internal Revenue Service (“IRS”) Section 163(j) interest limitations, updates to “Global Intangible Low-Taxed Income” (“GILTI”), and “Foreign-Derived Intangible Income” (“FDII”) rules, amendments to energy credits, and expanded IRS Section 162(m) aggregation requirements. In accordance with ASC Topic 740 — “Income Taxes” (“ASC 740”), the effects of the new tax law were recognized in the period of enactment, our quarter ended September 30, 2025. We are currently evaluating the impact of the OBBBA, and do not expect the legislation to have a material financial statement effect.
Current report
In accordance with ASC 740, the effects of new tax legislation are recognized in the period of enactment. Management has evaluated the provisions of OBBBA, recalculated temporary differences, reassessed valuation allowances, and considered any necessary adjustments. Based on this evaluation, management concluded that the effects of the OBBBA are not material to the Company’s consolidated financial statements for the current period. Management will continue to monitor forthcoming guidance, interpretations, and technical clarifications to assess whether any future adjustments or additional disclosures may be required.
Removed paragraphs (3)
Previous report
Advisory fees paid in merger for the three and six months ended June 30, 2025 and 2024 were as follows:
Previous report
Interest expense for the three and six months ended June 30, 2025 and 2024 were as follows:
Previous report
Other expense for the three and six months ended June 30, 2025 and 2024 were as follows:
Reworded paragraphs (35)
Previous wording
Comparison of the Three and Six Months Ended June 30, 2025 and 2024:
Current wording
Comparison of the Three and Nine Months Ended September 30, 2025 and 2024:
Previous wording
Service revenue, net of discounts, for the three and six months ended June 30, 2025 and 2024 consisted of the following:
Current wording
Service revenue, net of discounts, for the three and nine months ended September 30, 2025 and 2024 consisted of the following:
Previous wording
Service revenue, net was $102,896,993 and $104,636,273 for the three months ended June 30, 2025 and 2024, respectively, a decrease of $1,739,280, or 1.7%. This decrease was predominately due to lower revenues from the Company’s temporary placement services business, which decreased $1,864,205 or 1.8% in the three months ended June 30, 2025 as compared to the same period in 2024 due primarily to customers were slower based on economic conditions. Permanent placement and other services increased $124,925 or 16.9% due to strong demand from our current clients.
Current wording
Service revenue, net was $110,127,203 and $107,803,843 for the three months ended September 30, 2025 and 2024, respectively, an increase of $2,323,360, or 2.2%. This increase was predominately due to higher revenues from the Company’s temporary placement services business, which increased $2,034,230 or 1.9% in the three months ended September 30, 2025 as compared to the same period in 2024 due primarily a strong sales initiative by the Company. Permanent placement and other services increased $289,130 or 28.0% due to strong demand from our current clients.
Previous wording
Service revenue, net was $205,705,800 and $205,259,485 for the six months ended June 30, 2025 and 2024, respectively, an increase of $446,315, or 0.2%. The Company’s temporary placement services business, slightly increased $289,232 or 0.1% in the six months ended June 30, 2025 as compared to the same period in 2024. Permanent placement and other services increased $157,083 or 9.3% due to strong demand from our current clients.
Current wording
Service revenue, net was $315,833,003 and $313,063,328 for the nine months ended September 30, 2025 and 2024, respectively, an increase of $2,769,675, or 0.9%. The Company’s temporary placement services business, slightly increased $2,323,462 or 0.7% in the nine months ended September 30, 2025 as compared to the same period in 2024. Permanent placement and other services increased $446,213 or 16.4% due to strong demand from our current clients.
Previous wording
Gross profit reflects the difference between realized service revenue, net and cost of revenues for providing temporary and permanent placement solutions. Cost of revenue consists primarily of fixed and variable directs costs, including payroll, payroll taxes and employee benefit costs. Cost of revenue and gross profit for the three and six months ended June 30, 2025 and 2024 consisted of the following:
Current wording
Gross profit reflects the difference between realized service revenue, net and cost of revenues for providing temporary and permanent placement solutions. Cost of revenue consists primarily of fixed and variable directs costs, including payroll, payroll taxes and employee benefit costs. Cost of revenue and gross profit for the three and nine months ended September 30, 2025 and 2024 consisted of the following:
Previous wording
Cost of revenue for the three months ended June 30, 2025 and 2024 was $91,478,299 and $93,146,627, respectively, a decrease of $1,668,328 or 1.8%. The decrease in cost of revenue was due primarily to lower service revenue, net driven primarily by lower temporary placement services revenue, which decreased $1,864,205 or 1.8%. Gross profit for the three months ended June 30, 2025 and 2024 was $11,418,694 and $11,489,646, respectively, a decrease of $70,952 or 0.6%. As a percentage of service revenue, net, gross profit was 11.1% and 11.0% for the three months ended June 30, 2025 and 2024, respectively, essentially flat quarter over quarter.
Current wording
Cost of revenue for the three months ended September 30, 2025 and 2024 was $97,725,227 and $95,918,373, respectively, an increase of $1,806,854 or 1.9%. The increase in cost of revenue was due primarily to higher service revenue, net driven primarily by higher temporary placement services revenue, which increased $2,034,230 or 1.9%. Gross profit for the three months ended September 30, 2025 and 2024 was $12,401,976 and $11,885,470, respectively, an increase of $516,506 or 4.3%. As a percentage of service revenue, net, gross profit was 11.3% and 11.0% for the three months ended September 30, 2025 and 2024, respectively, which increased due to the Company’s initiative to sell higher margin accounts.
Previous wording
Cost of revenue for the six months ended June 30, 2025 and 2024 was $183,100,984 and $183,304,457, respectively, a decrease of $203,473 or 0.1%, essentially flat on year-to-date over year-to-date basis. Gross profit for the six months ended June 30, 2025 and 2024 was $22,604,816 and $21,955,028, respectively, an increase of $649,788 or 3.0%. As a percentage of service revenue, net, gross profit was 11.0% and 10.7% for the six months ended June 30, 2025 and 2024, respectively, which increased due to the Company’s initiative to sell higher margin accounts.
Current wording
Cost of revenue for the nine months ended September 30, 2025 and 2024 was $280,826,211 and $279,222,830, respectively, an increase of $1,603,381 or 0.6%, essentially flat on year-to-date over year-to-date basis. Gross profit for the nine months ended September 30, 2025 and 2024 was $35,006,792 and $33,840,498, respectively, an increase of $1,166,294 or 3.4%. As a percentage of service revenue, net, gross profit was 11.1% and 10.8% for the nine months ended September 30, 2025 and 2024, respectively, which increased due to the Company’s initiative to sell higher margin accounts.
Previous wording
Total operating expenses for the three and six months ended June 30, 2025 and 2024 consisted of the following:
Current wording
Total operating expenses for the three and nine months ended September 30, 2025 and 2024 consisted of the following:
Previous wording
Selling, general and administrative expenses for the three months ended June 30, 2025 and 2024 were $18,870,535 and $18,553,150, respectively, an increase of $317,385, or 1.7%, due primarily to stock compensation expense, a full quarter of expenses incurred as a result of the Merger compared to a partial month, partially offset by lower transaction costs related to the Merger. As a percentage of service revenue, net, selling, general and administrative costs were 18.3% in the three months ended June 30, 2025 as compared to 17.7% in the three months ended June 30, 2024. The increase in selling, general and administrative costs as a percentage of service revenue, net was due primarily to stock compensation expense, a full quarter of expenses incurred as a result of the Merger compared to a partial month, partially offset by lower transaction costs related to the Merger.
Current wording
Selling, general and administrative expenses for the three months ended September 30, 2025 and 2024 were $19,888,692 and $17,151,567, respectively, an increase of $2,737,125, or 16.0%, due primarily to stock compensation expense, partially offset by lower transaction costs attributed to the Merger in 2024. As a percentage of service revenue, net, selling, general and administrative costs were 18.1% in the three months ended September 30, 2025 as compared to 15.9% in the three months ended September 30, 2024. The increase in selling, general and administrative costs as a percentage of service revenue, net was due primarily to stock compensation expense, partially offset by lower transaction costs related to the Merger.
Previous wording
Selling, general and administrative expenses for the six months ended June 30, 2025 and 2024 were $38,270,014 and $28,894,187, respectively, an increase of $9,375,827, or 32.4%, due primarily to higher stock compensation expense, a full six months of expenses incurred as a result of the Merger compared to a partial month, partially offset by lower transaction costs related to the Merger. As a percentage of service revenue, net, selling, general and administrative costs were 18.6% in the six months ended June 30, 2025 as compared to 14.1% in the six months ended June 30, 2024. The increase in selling, general and administrative costs as a percentage of service revenue, net was due primarily to stock compensation expense, a full six months of expenses incurred as a result of the Merger compared to a partial month, partially offset by lower transaction costs related to the Merger in the six months ended June 30, 2025 compared to the six months ended June 30, 2024.
Current wording
Selling, general and administrative expenses for the nine months ended September 30, 2025 and 2024 were $58,158,706 and $46,045,754, respectively, an increase of $12,112,952, or 26.3%, due primarily to higher stock compensation expense, a full nine months of expenses incurred as a result of the Merger compared to a three and a half months, partially offset by lower transaction costs related to the Merger. As a percentage of service revenue, net, selling, general and administrative costs were 18.4% in the nine months ended September 30, 2025 as compared to 14.7% in the nine months ended September 30, 2024. The increase in selling, general and administrative costs as a percentage of service revenue, net was due primarily to stock compensation expense, a full nine months of expenses incurred as a result of the Merger compared to three and a half months, partially offset by lower transaction costs related to the Merger in the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024.
Previous wording
Depreciation and amortization expense for the three months ended June 30, 2025 and 2024 was $1,232,750 and $1,249,054, respectively, a decrease of $16,304 or 1.3%, which was slightly lower on a year-over year basis primarily due to more of the Company’s computer software being fully depreciated at the end of 2024.
Current wording
Depreciation and amortization expense for the three months ended September 30, 2025 and 2024 was $1,230,307 and $1,245,557, respectively, a decrease of $15,250 or 1.2%, which was slightly lower on a year-over year basis primarily due to more of the Company’s computer software being fully depreciated at the end of 2024.
Previous wording
Depreciation and amortization expense for the six months ended June 30, 2025 and 2024 was $2,469,139 and $2,508,608, respectively, a decrease of $39,469 or 1.6%, which was slightly lower on a year-over year basis primarily due to more of the Company’s computer software being fully depreciated at the end of 2024.
Current wording
Depreciation and amortization expense for the nine months ended September 30, 2025 and 2024 was $3,699,446 and $3,754,165, respectively, a decrease of $54,719 or 1.5%, which was slightly lower on a year-over year basis primarily due to more of the Company’s computer software being fully depreciated at the end of 2024.
Previous wording
Loss on debt extinguishment, for the three and six months ended June 30, 2025 and 2024 were as follows:
Current wording
Loss on debt extinguishment, for the three and nine months ended September 30, 2025 and 2024 were as follows:
Previous wording
Loss on debt extinguishment during the three and six months ended June 30, 2024 relate to the Seventh Amendment and Forbearance Agreement to the Revolver being treated as a debt extinguishment after the Company’s analysis of Accounting Standards Codification (“ASC”) Topic 470 –Debt.
Current wording
Loss on debt extinguishment during the nine months ended September 30, 2024 relates to the Seventh Amendment and Forbearance Agreement to the previous Revolver being treated as a debt extinguishment after the Company’s analysis of Accounting Standards Codification (“ASC”) Topic 470 –Debt. See Note 8: Debt for further information.
Previous wording
Interest expense for the three months ended June 30, 2025 and 2024 was $2,023,960 and $4,000,024, respectively. The decrease of $1,976,064, or 49.4%, in the three months ended June 30, 2025 compared to the three months ended June 30, 2024 was primarily attributed to the Company deconsolidating the joint and several debt obligations as of the Merger date and a lower interest rate of the previous Revolver as compared to the new Revolver entered into on April 29,2025.
Current wording
Interest expense for the three months ended September 30, 2025 and 2024 was $2,094,177 and $1,472,564, respectively. The increase of $621,613, or 42.2%, in the three months ended September 30, 2025 compared to the three months ended September 30, 2024 was primarily attributed to the Company incurring interest expense related to an agreement with a professional employer organization (“PEO”) who processes the payroll for the Company, related to the unpaid balance, partially offset by the Company deconsolidating the joint and several debt obligations as of the Merger date and a lower interest rate from the previous Revolver as compared to the new Revolver entered into on April 29, 2025.
Previous wording
Interest expense for the six months ended June 30, 2025 and 2024 was $3,308,782 and $9,022,254, respectively. The decrease of $5,713,472, or 63.3%, in the six months ended June 30, 2025 compared to the six months ended June 30, 2024 was attributed to the Company deconsolidating the joint and several debt obligations as of the Merger date and a lower interest rate of the previous Revolver as compared to the new Revolver entered into on April 29,2025.
Current wording
Interest expense for the nine months ended September 30, 2025 and 2024 was $5,402,959 and $10,494,818, respectively. The decrease of $5,091,859, or 48.5%, in the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 was attributed to the Company deconsolidating the joint and several debt obligations as of the Merger date and a lower interest rate from the previous Revolver as compared to the new Revolver entered into on April 29, 2025.
Previous wording
Other expense for the three and six months ended June 30, 2024 related to accrued amounts pertaining to a potential settlement for legacy shareholders and stock compensation expense related to third parties as advisors to the Company.
Current wording
Other expense for the three and nine months ended September 30, 2024 relates to accrued amounts pertaining to a potential settlement for legacy shareholders and stock compensation expense related to third parties as advisors to the Company.
Previous wording
Provision for income taxes for the three and six months ended June 30, 2025 and 2024 were as follows:
Current wording
Provision for income taxes for the three and nine months ended September 30, 2025 and 2024 were as follows:
Previous wording
Income tax (expense)/benefit for the three months ended June 30, 2025 and 2024 was $(9,618) and $17,221,979, respectively. The change between the periods was primarily due to the establishment of a valuation allowance on the Company’s deferred tax assets, initially recorded during the fourth quarter of 2024.
Current wording
Income tax (expense)/benefit for the three months ended September 30, 2025 and 2024 was $(9,144) and $1,220,072, respectively. The change between the periods was primarily due to the establishment of a valuation allowance on the Company’s deferred tax assets, initially recorded during the fourth quarter of 2024.
Previous wording
Income tax (expense)/benefit for the six months ended June 30, 2025 and 2024 was $(19,235) and $18,512,574, respectively. The change between the periods was primarily due to the establishment of a valuation allowance on the Company’s deferred tax assets, initially recorded during the fourth quarter of 2024.
Current wording
Income tax (expense)/benefit for the nine months ended September 30, 2025 and 2024 was $(28,379) and $19,732,646, respectively. The change between the periods was primarily due to the establishment of a valuation allowance on the Company’s deferred tax assets, initially recorded during the fourth quarter of 2024.
Previous wording
In the Allocation Agreement, IDC and Mr. Gattani have agreed to implement a plan to refinance or otherwise satisfy the joint and several indebtedness. It is expected that the Company will not be legally released from its joint and several obligations with respect to the indebtedness to be assumed by IDC until payment in full of the Merger Note, which originally matured on September 30, 2024. The maturity date of the Merger Note has been extended to March 31, 2027 when the Company entered into an Amended and Restated Convertible Promissory Note. On April 29, 2025, the Company closed on a new ABL lender, replacing the previous Revolver, with a maturity date of April 29, 2028. On April 29, 2025, the previous BMO Revolver lender funded the shortfall of $6,000,000, the IDC portion owed, and IDC entered into a term note for this amount, plus a $1,000,000 exit fee. The certain junior lenders assumed portions of IDC’s publicly owned stock of Atlantic International Corp as collateral and intends to sell these shares their respective joint and several debt. See Note 8: Debt for further information.
Current wording
In the Allocation Agreement, IDC and Mr. Gattani agreed to implement a plan to refinance or otherwise satisfy the joint and several indebtedness. It is expected that the Company will not be legally released from its joint and several obligations with respect to the indebtedness to be assumed by IDC until payment in full of the Merger Note, which originally matured on September 30, 2024. The maturity date of the Merger Note has been extended to March 31, 2027 when the Company entered into an Amended and Restated Convertible Promissory Note. On April 29, 2025, the Company closed on a new ABL lender, replacing the previous Revolver, with a maturity date of April 29, 2028. On April 29, 2025, the previous BMO Revolver lender funded the shortfall of $6,000,000, the IDC portion owed, and IDC entered into a term note for this amount, plus a $1,000,000 exit fee. The certain junior lenders assumed portions of IDC’s publicly owned stock of Atlantic International Corp as collateral and intends to sell these shares their respective joint and several debt. See Note 8: Debt for further information.
Previous wording
Cash flows for the six months ended June 30, 2025 and 2024 consisted of the following:
Current wording
Cash flows for the nine months ended September 30, 2025 and 2024 consisted of the following:
Previous wording
Cash flows provided by operating activities for the six months ended June 30, 2025 compared to the six months June 30, 2024 was higher primarily due to a decrease in accounts receivable from the prior year end.
Current wording
Cash flows provided by (used in) operating activities for the nine months ended September 30, 2025 compared to the nine months September 30, 2024 was higher primarily due to a decrease in deferred income taxes and a decrease in accounts receivable from the prior year end, partially offset by a decrease in accrued expenses from the prior year end and an increase in due from related parties.
Previous wording
Cash used in investing activities for the six months ended June 30, 2025 decreased compared to June 30, 2024 and consisted entirely of purchases of property and equipment.
Current wording
Cash used in investing activities for the nine months ended September 30, 2025 decreased compared to September 30, 2024 and consisted entirely of purchases of property and equipment.
Previous wording
Cash used in financing activities increased for the six months ended June 30, 2025 compared to June 30, 2024 and consisted of borrowings and payments under the Company’s debt arrangements of the Revolver and the New Revolving Credit Facility.
Current wording
Cash (used in) provided by financing activities increased for the nine months ended September 30, 2025 compared to September 30, 2024 and consisted of borrowings and payments under the Company’s debt arrangements of the Revolver and the New Revolving Credit Facility.
Previous wording
On April 29, 2025, the Company closed on a new ABL credit facility, replacing the current Revolver, with a maturity date of April 29, 2028. The previous lender funded the shortfall of $6,000,000, the IDC portion owed, and IDC entered into a term loan for this amount, plus a $1,000,000 exit fee. The $6,000,000 term loan and $1,000,000 exit fee are joint-and-several with IDC and is fully covered by the Allocation Agreement with IDC discussed above. The current Revolver’s lender has assumed IDC’s publicly owned stock of Atlantic International Corp as collateral. The interest rate on the New Revolving Credit Facility is calculated as 1.00% per annum above the Prime Rate, but not less than 5.75% per annum. The interest rate as of June 30, 2025 was 8.50% per annum. See Note 8: Debt for further information.
Current wording
On April 29, 2025, the Company closed on a new ABL credit facility, replacing the current Revolver, with a maturity date of April 29, 2028. The previous lender funded the shortfall of $6,000,000, the IDC portion owed, and IDC entered into a term loan for this amount, plus a $1,000,000 exit fee. The $6,000,000 term loan and $1,000,000 exit fee are joint-and-several between the Company and IDC and is fully covered by the Allocation Agreement with IDC discussed above. The current Revolver’s lender has assumed IDC’s publicly owned stock of Atlantic International Corp as collateral. The interest rate on the New Revolving Credit Facility is calculated as 1.00% per annum above the
Previous wording
As of June 30, 2025 and December 31, 2024, the Company recorded a liability of $37,385,643 and $42,508,379, respectively. Total available borrowing capacity on the Revolver as of June 30, 2025 was $7,832,330. The borrowing base calculation is based on Lyneer’s eligible assets.
Current wording
As of September 30, 2025 and December 31, 2024, the Company recorded a liability of $38,363,904 and $42,508,379, respectively. Total available borrowing capacity on the Revolver as of September 30, 2025 was $342,712. The borrowing base calculation is based on Lyneer’s eligible assets.
Previous wording
The Lenders’ consent to IDC’s transfer of ownership of the equity of Lyneer was conditioned upon substantially the same terms stated above under the Revolver, as well as issuance of a secured bridge loan (“Credit Agreement”), which was entered into on June 18, 2024, the Company entered into a secured bridge loan (“Credit Agreement”) in the principal amount of $1,950,000 at an interest rate of 5% per annum. The maturity date of the Credit Agreement was originally September 30, 2024. However, mandatory prepayments shall be made from the Initial Capital Raise, on the issuance of new debt or new equity interests, or upon a change of control.
Current wording
The Lenders’ consent to IDC’s transfer of ownership of the equity of Lyneer was conditioned upon substantially the same terms stated above under the Revolver, as well as issuance of a secured bridge loan (“Credit Agreement”), which was entered into on June 18, 2024, the Company entered into a secured bridge loan (“Credit Agreement”) in the principal amount of $1,950,000 at an interest rate of 5% per annum. The maturity date of the Credit Agreement was originally September 30, 2024. However, mandatory prepayments shall be made from the Initial Capital Raise (as defined), on the issuance of new debt or new equity interests, or upon a change of control.
Previous wording
From April 29, 2019 to April 29, 2020, the Company entered into a series of non-convertible promissory notes (the “Promissory Notes”) with St. Laurent Investments LLC amounting to $1,375,000. The Promissory Notes had a one-year term, most recently extended through July 31, 2025 or a later date to be mutually agreed upon. The Promissory Notes bear interest accruing at the rate of 5% per annum, and increased to 10% for the period from August 1, 2024 through July 31, 2025. The Company is in negotiations with the lender to extend the agreement two years and the lender has waived default.
Current wording
From April 29, 2019 to April 29, 2020, the Company entered into a series of non-convertible promissory notes (the “Promissory Notes”) with St. Laurent Investments LLC amounting to $1,375,000. The Promissory Notes had a one-year term, most recently extended through July 31, 2025 or a later date to be mutually agreed upon. The Promissory Notes bear interest accruing at the rate of 5% per annum, and increased to 10% for the period from August 1, 2024 through July 31, 2025. The Company is in negotiations with the lender to extend the agreement for two years and the lender has agreed to waive default. In any event, the Company is in negotiations to extended the Promissory Note and is confident that it will be extended at least through December 31, 2025.
Previous wording
For the three and six months ended June 30, 2025 total interest expense was $2,023,960 and $3,308,782, respectively. For the three and six months ended June 30, 2024 total interest expense was $4,000,024 and $9,022,254 respectively. Interest expense related to the PEO was $838,327 for each of the three and six month periods ended June 30, 2025, and $0 for each of the three and six month periods ended June 30, 2024. Total cash paid for interest for the three and six months ended June 30, 2025 totaled $847,891 and $2,306,780, respectively, and $1,744,605 and $4,051,095 for the three and six months ended June 30, 2024, respectively, with the remaining portion of the interest expense as non-cash due to the paid-in-kind interest and change in values of the accrued interest liability and amortization of deferred financing costs.
Current wording
For the three and nine months ended September 30, 2025 total interest expense was $2,094,177 and $5,402,959, respectively. For the three and nine months ended September 30, 2024 total interest expense was $1,472,564 and $10,494,818 respectively. Interest expense related to the PEO was $863,402 and $1,701,729 for the three and nine month periods ended September 30, 2025, respectively, and $0 for each of the three and nine month periods ended September 30, 2024. Total cash paid for interest for the three and nine months ended September 30, 2025 totaled $1,202,388 and $3,509,168, respectively, and $1,386,833 and $5,437,928 for the three and nine months ended September 30, 2024, respectively, with the remaining portion of the interest expense as non-cash due to the paid-in-kind interest and change in values of the accrued interest liability and amortization of deferred financing costs.
Previous wording
Interest expense incurred on the Earnout Notes to LMH totaled $0 and $173,737 for the three months ended June 30, 2025 and 2024, respectively and $0 and $347,766 for the six months ended June 30, 2025 and 2024, respectively.
Current wording
Interest expense incurred on the Earnout Notes to LMH totaled $0 and $174,058 for the three months ended September 30, 2025 and 2024, respectively and $0 and $347,766 for the nine months ended September 30, 2025 and 2024, respectively.
Previous wording
Total amounts receivable from IDC, including the above taxes payable to IDC, amounted to $6,067,963 as of June 30, 2025 and total amounts payable to IDC of $2,091,035 as of December 31, 2024, and are included in “due from related parties” and “due to related parties”, respectively, on the accompanying condensed consolidated balance sheets. There are no formalized repayment terms.
Current wording
Total amounts receivable from IDC, including the above taxes payable to IDC, amounted to $7,417,863 as of September 30, 2025 and total amounts payable to IDC of $2,091,035 as of December 31, 2024, and are included in “due from related parties” and “due to related parties”, respectively, on the accompanying condensed consolidated balance sheets. There are no formalized repayment terms.
Previous wording
During the six months ended June 30, 2024, Lyneer included $402,500 as an expense paid for by IDC and recorded as a deemed capital contribution to Lyneer, of which all related to interest. Additionally, IDC agreed to reimburse certain expenses paid by Lyneer totaling $631,469 also recorded as deemed capital contributions, by reducing the payable balance owed to IDC. Of this amount, $611,969 related to professional fees and $19,500 related to a debt amendment fee.
Current wording
During the nine months ended September 30, 2024, Lyneer included $402,500 as an expense paid for by IDC and recorded as a deemed capital contribution to Lyneer, of which all related to interest. Additionally, IDC agreed to reimburse certain expenses paid by Lyneer totaling $631,469 also recorded as deemed capital contributions, by reducing the payable balance owed to IDC. Of this amount, $611,969 related to professional fees and $19,500 related to a debt amendment fee.
Previous wording
For long-lived assets to be held and used, the Company recognizes an impairment loss only if the carrying amount is not recoverable through its undiscounted cash flows and measures the impairment loss based on the difference between the carrying amount and fair value. For the six months ended June 30, 2025 and the year ended December 31, 2024 no impairments were recognized on our intangible assets.
Current wording
For long-lived assets to be held and used, the Company recognizes an impairment loss only if the carrying amount is not recoverable through its undiscounted cash flows and measures the impairment loss based on the difference between the carrying amount and fair value. For the nine months ended September 30, 2025 and the year ended December 31, 2024 no impairments were recognized on our intangible assets.
Previous wording
The Company assesses, on a quarterly basis, the likelihood that deferred tax assets will be realized in accordance with the provisions of ASC Topic 740 — “Income Taxes” (“ASC 740”). ASC 740 requires that a valuation allowance be established when it is “more likely than not” that all, or a portion of, deferred tax assets will not be realized. The assessment considers all available positive or negative evidence, including the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies.
Current wording
The Company assesses, on a quarterly basis, the likelihood that deferred tax assets will be realized in accordance with the provisions of ASC 740. ASC 740 requires that a valuation allowance be established when it is “more likely than not” that all, or a portion of, deferred tax assets will not be realized. The assessment considers all available positive or negative evidence, including the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Prime Rate, but not less than 5.75% per annum. The interest rate as of September 30, 2025 was 8.50% per annum. See Note 8: Debt for further information.