Accrued Expenses and Other Current Liabilities |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2026 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accrued Liabilities and Other Liabilities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accrued Expenses and Other Current Liabilities | Note 9: Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consist of the following:
Legacy Stockholder Dividend Settlements 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. 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. 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. In full and final satisfaction of any and all obligations related to the dividend and consulting services, the Company agreed to the following: •$25,000 cash payment as an initial payment under the Consulting Agreement •Consulting fees will be paid at the sum of $7,500 per month, paid quarterly •757,833 shares will be issued as additional consideration for up to 10 hours of services a week. Any weekly hours in excess of those hours will be billed at a negotiated rate •230,027 shares will be issued as a Dividend settlement Professional Employer Organization 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 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. Share Settled Redemption Option Granted to PEO On February 3, 2026, (the “Amendment Date”) the Company amended its agreement with the PEO, to whom it had a specific outstanding payable of $2,207,944 (“the Repayment Amount”). 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. 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. 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 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.
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||