v3.26.1
Related Party Transactions
 3 Months Ended
Mar. 31, 2026
Related Party Transactions [Abstract]  
Related Party Transactions
Note 16: Related Party Transactions
Transactions with Lyneer Management Holdings
LMH was a noncontrolling member of the Company with a 10% ownership interest at December 31, 2023. Two of Lyneer’s officers, specifically its CEO and CFO, each owned 44.5% of LMH, respectively.
On November 15, 2022, Lyneer and IDC as co-borrowers issued Year 1 Earnout Notes to LMH with a total balance of $5,127,218. The balance of the Year 1 Earnout Notes payable was $0 as of both March 31, 2026 and December 31, 2025. On January 16, 2024, Lyneer and IDC as co-borrowers issued Year 2 Earnout Notes to LMH with a total balance of $2,013,041. The balance of the Year 2 Earnout Notes payable to LMH was $0 as of both March 31, 2026 and December 31, 2025. On the date of the Merger, the Company derecognized this debt. Refer to Note 8: Debt for additional information.
Interest expense incurred on the Earnout Notes to LMH totaled $0 for both the three months ended March 31, 2026 and 2025.
Transactions with IDC
The Company and IDC were co-borrowers and were jointly and severally liable for principal and interest payments under the BMO Revolver, the Term Loan related to the BMO Revolver, the Term Note, the Seller Notes and the Earnout Notes.
As a result of the Merger, the Company was required to file short-term income tax returns for the periods of January 1, 2024 to June 18, 2024 and June 19, 2024 to December 31, 2024. For the first short-period, Lyneer and IDC filed consolidated income tax returns in certain states. In connection with this arrangement the Company has recorded a liability payable to IDC for taxes payable by IDC which represented taxes attributable to the Company’s operations included on consolidated state and local income tax returns filed by IDC. 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. 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. 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. There are no formalized repayment terms.
Pursuant to the Amended and Restated Convertible Promissory Note, any amounts paid to BMO will be in satisfaction of this Note. The Company offset the December 31, 2025 balance related to the IDC receivable that was remaining on the BMO Revolver and rolled into the current Revolver as allowed per the Amended and Restated Convertible Promissory Note. See Note 8: Debt for the Company’s gross and net offsetting liability amounts. Below is presented the calculation of the net amount of the receivable from IDC as of December 31, 2025 included in “other assets” on the accompanying consolidated balance sheets.
Gross AmountAmount OffsetNet Receivable from IDC included in “Other assets” on Consolidating Balance Sheet
Receivable from IDC included in “Other assets”$7,426,218 $(6,056,385)$1,369,833 
On June 18, 2024, the Company entered into a $35,000,000 Merger Note with IDC. See Note 8: Debt for further information. 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.
On April 28, 2025, IDC was no longer considered a related party according to ASC Topic 850 — Related-party Disclosures.
Transactions with SPP Credit Advisors, LLC (“SPP”)
SPP is a related party due to being a beneficial owner of more than 5% of the Company’s Common Stock. On June 18, 2024, the Company entered into a Credit Agreement with SPP in the principal amount of $1,950,000 at an interest rate of 5% per annum. See Note 8: Debt for further information.
Transactions with Axiom and Related Entities
The Axiom Consulting Agreement and Axiom Netherlands Consulting Agreement stipulate that Axiom and Axiom Netherlands, respectively, will provide ongoing services consisting of advisory, management, strategic, operational and transaction support services to Circle8. 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.