ATLANTIC INTERNATIONAL CORP. (ATLN) FY 2023 MD&A

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.

You should read the following discussion of our financial condition
and results of operations in conjunction with our audited consolidated financial statements for the year ended December 31, 2023, and
related notes included elsewhere in this report. This discussion and analysis and other parts of this report contain forward-looking statements
based upon current beliefs, plans and expectations that involve risks, uncertainties and assumptions. Our actual results and the timing
of selected events could differ materially from those anticipated in these forward-looking statements as a result of several factors,
including those set forth under “Risk Factors” and elsewhere in this report. You should carefully read the “Risk Factors”
section of this report to gain an understanding of the important factors that could cause actual results to differ materially from our
forward-looking statements. Please also see the section entitled “Cautionary Note Regarding Forward-Looking Statements and Industry
and Market Data” in this report.

Overview

This overview and outlook provide a high-level discussion of our operating
results and significant known trends that affect our business. We believe that an understanding of these trends is important to understanding
our financial results for the periods being reported herein as well as our future financial performance. This summary is not intended
to be exhaustive, nor is it intended to be a substitute for the detailed discussion and analysis provided elsewhere in this report.

About SeqLL

We are an early commercial-stage life sciences instrumentation and
research services company engaged in the development of scientific assets and novel intellectual property across multiple “omics”
fields. We leverage our expertise with True Single Molecule Sequencing (tSMS) technology enabling researchers and clinicians to contribute
major advancements to scientific research and development.

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Our customers are primarily the early adopters of genomics technology
and tSMS in academic research, biomarker discovery, and molecular diagnostic product development.

Our financial results have been, and will continue to be, impacted
by several significant trends, which are described below. While these trends are important to understanding and evaluating our financial
results, this discussion should be read in conjunction with our consolidated financial statements and the notes thereto within the Consolidated
Financial Statements section of this report, and trends discussed in “Risk Factors” within the Business section of this report.

Proposed Merger Agreement

Terms used and not defined in the following discussion
have the respective meanings set forth in Note 1 to our consolidated financial statements included in Part IV to this report.

On May 29, 2023, we entered into the Merger Agreement
with Atlantic, Atlantic Merger Sub, SeqLL Merger Sub, Lyneer, and the Sellers subject to the approval of our stockholders at a special
meeting, which approval has been obtained. Pursuant to the Merger Agreement and subject to the terms and conditions set forth therein,
Atlantic Merger Sub will initially be merged into Lyneer, and SeqLL Merger Sub will then be merged into Lyneer, with Lyneer continuing
as the surviving entity and as our wholly-owned subsidiary. In connection with the consummation of the Merger, we will be renamed “Atlantic
International Corp.”

Lyneer, through its subsidiaries, specializes
in the placement of temporary and temporary-to-permanent labor across various industries within the United States. Lyneer primarily places
individuals in accounting and finance, administrative and clerical, information technology, legal, light industrial, and medical roles.
It is also a leading provider of productivity consulting and workforce management solutions. Lyneer is headquartered in Lawrenceville,
New Jersey and has more than 100 locations in the U.S.

For further description of the terms of the Merger
Agreement, please refer to Note 1 to the consolidated financial statements.

Results of operations

We incurred net losses of $5,627,591 and $4,094,833 for the year ended
December 31, 2023 and 2022, respectively. We had negative cash flow from operating activities of $5,004,558 and $3,662,568 for the year
ended December 31, 2023 and 2022, respectively, and had an accumulated deficit of $24,136,275 as of December 31, 2023.

Results of operations may be adversely affected
by various factors that could cause economic uncertainty and volatility in the financial markets, many of which are beyond our control.
Our business could be impacted by, among other things, downturns in the financial markets or in economic conditions, inflation, increases
in interest rates, and geopolitical instability, such as the military conflict in Ukraine and the Israel-Hamas war. We cannot at this
time fully predict the likelihood of one or more of the above events, their duration or magnitude or the extent to which they may negatively
impact our business.

Our financial results have been, and will continue to be, impacted
by several significant trends, which are described below. While these trends are important to understanding and evaluating our financial
results, this discussion should be read in conjunction with our consolidated financial statements and the notes thereto within the Consolidated
Financial Statements section of this report, and trends discussed in “Risk Factors” in Item 1-A of Part I of this report.

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Results of Operations

Comparison of the Years Ended December 31, 2023 and 2022

The following table summarizes our results of operations for the years
ended December 31, 2023 and 2022:

Revenues

Our revenues
during the year ended December 31, 2023, were $0 as compared to revenues of $78,659 during the year ended December 31, 2022, representing
a decrease of $78,659, or 100%. During the year ended December 31, 2022, revenue included grant revenue of $77,482 and $1,177 from product
sales. The decrease in revenue was due to the fact that we do not currently have any active grants under which we are providing services,
nor have we sold any of our products to customers. We do not expect to recognize revenues until a market for our sequencing technology
further develops.

Gross Profit

Gross profit for the year ended December 31, 2023 was $0, as compared
to gross profit of $77,969 for the year ended December 31, 2022, which represented a decrease of $77,969, or 100%, primarily due to the
fact that we do not currently have any active grants under which we are providing services, nor have we sold any of our products to customers.

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Research and Development Expenses

Research and development expenses increased by $685,088, or 44%, from
$1,568,266 for the year ended December 31, 2022 compared to $2,253,354 for the year ended December 31, 2023. The increase in expenses
was a result of our progressive return to research and development activities in relation to applications for our tSMS technology to pre-COVID-19
levels prior to entering into the Merger agreement with Lyneer. Going forward, we expect to reduce our research and development expenses
until after the closing of the Merger with Lyneer as we continue to preserve our cash resources to effect the Merger.

General and Administrative Expenses

General and administrative expenses increased by $972,304, or 39%,
from $2,506,851 for the year ended December 31, 2022 compared to $3,479,155 for the year ended December 31, 2023. The increase was primarily
attributable to approximately $705,000 in additional legal and professional fees related to the Merger in order to facilitate SEC filings,
increased operating expenses of approximately $105,000 related to accounting, legal, insurance and audit related services, and approximately
$96,000 of additional incremental expenses incurred in connection with the Merger. General and administrative expenditures will continue
to increase until the closing of the Merger with Lyneer.

Interest and Other Income/Loss

We recognized $188,716 of investment income, of which $106,051 related
to marketable debt securities and $82,665 related to cash invested in money market accounts and cash that was held in investments that
have a maturity date of less than three months during the year ended December 31, 2023. We recognized $0 of investment income related
to marketable securities and $44,879 of income earned from money market accounts during the year ended December 31, 2022.

Interest expense incurred on the promissory notes was $68,370 and $90,748
for the years ended December 31, 2023 and 2022, respectively. During the year ended December 31, 2023, we also incurred $15,428 of
interest expense related to our finance lease.

Net Loss

Overall, the net loss increased by $1,532,758, or 37%, to $5,627,591
as compared to $4,094,833 for the year ended December 31, 2022. This increase in net loss was primarily attributable to increased expenses
associated with the Merger.

Liquidity and Capital
Resources

The accompanying consolidated financial statements
have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal
course of business. We experienced negative cash flows from operations of $5,004,558 for the year ended December 31, 2023, which included
our costs and expenses related to the transactions contemplated by the Merger Agreement. As a result of our recent common stock offerings
in August 2021 and February of 2023 and the maturity of our marketable debt securities, we had cash and cash equivalents of we had cash
and cash equivalents of $2,693,991 at December 31, 2023.

The Company estimates cash resources will be sufficient
to fund its operations into the first quarter of 2025. The Company will need additional capital to fund its planned operations for the
next 12 months, if the Merger is not completed. These conditions raise substantial doubt about the Company’s ability to continue
as a going concern.

The consolidated financial statements for the years
ended December 31, 2023 and 2022 were prepared under the assumption that the Company will continue as a going concern, which contemplates
that the Company will be able to realize assets and discharge liabilities in the normal course of business.

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Since inception, we have funded our operations primarily through equity
and debt financings, as well as from modest sales of products and research services. As of December 31, 2023, and we had an accumulated
deficit of $24,136,275.

On February 15, 2023, we issued 50,000 shares of common stock to investors
at a price of $36.00 per share (after the Reverse Stock Split). The gross proceeds of the issuance were $1.8 million. We incurred offering
expenses of approximately $0.3 million, which were paid with proceeds from the common stock issuance.

The Company expects that it will seek to raise additional capital
through equity offerings, grant financing, and convertible debt. Additional funds may not be available when it needs them on terms that
are acceptable to them, or at all. If adequate funds are not available, it may be required to delay its operational strategies, and to
delay or reduce the scope of its research or development programs.

Cash Flows

The following table sets forth the primary sources and uses of cash
and cash equivalents for each of the periods presented.

Net cash used in operating activities

Net cash used in operating activities was approximately $5.0 million
and $3.7 million for the year ended December 31, 2023 and 2022, respectively. The increase in operating spending was a result of our progressive
return to research and development activities to levels of pre-COVID-19 pandemic, prior to the announcement of the proposed Merger. In
addition, we experienced an increase in our general and administrative spending associated with legal, accounting, and consulting fees
in connection with the proposed Merger with Lyneer.

Net cash provided by investing activities

Net cash provided by investing activities was approximately $4.1 million
for the year ended December 31, 2023 as compared to approximately $1.8 million for the year ended December 31, 2022. The cash from the
investing activities is primarily attributable to the sales and maturities of marketable securities during the years ended December 31,
2023 and 2022.

Net cash provided by financing activities

Net cash provided by financing activities was approximately $1.5 million,
and $0, for the year ended December 31, 2023 and 2022, respectively. We issued 50,000 shares of common stock to investors at a price of
$36.00 per share during the year ended December 31, 2023 (after the effect of the Reverse Stock Split). The gross proceeds of the issuance
was $1.8 million. We incurred offering costs of approximately $0.3 million, which were paid with proceeds from the common stock issuance.
No such transaction occurred during the year ended December 31, 2022.

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Recent Accounting Pronouncements

In June 2016,
the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, Financial
Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments. ASU 2016-13 requires measurement and recognition of
expected credit losses for financial assets. In April 2019, the FASB issued clarification to ASU 2016-13 within ASU 2019-04, Codification
Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments,
or ASU 2016-13. The guidance is effective for fiscal years beginning after December 15, 2022. We adopted this standard on January 1,
2023, which had no material impact on the our consolidated financial statements.

We do not believe that any other recently issued but not yet effective
accounting pronouncements are expected to have a material effect on our consolidated financial statements.

Critical Accounting Policies and Estimates

We prepare our financial statements and accompanying
notes in conformity with accounting principles generally accepted in the United States of America, which require management to make estimates
and assumptions about future events that affect reported amounts. Estimations are considered critical accounting estimates based on, among
other things, its impact on the portrayal of our financial condition, results of operations, or liquidity, as well as the degree of difficulty,
subjectivity, and complexity in its deployment. Critical accounting estimates address accounting matters that are inherently uncertain
due to unknown future resolution of such matters. Management routinely discusses the development, selection, and disclosure of each critical
accounting estimates.

Stock-based Compensation

Our stock-based compensation program awards include stock options and
restricted stock awards. The fair value of stock option grants is estimated as of the date of the grant using the Black-Scholes option
pricing model. The fair value of restricted stock units is based on the fair value of our common stock on the date of the grant. The fair
value of the awards is then expensed over the requisite service period, generally the vesting period, for each award as compensation expense.

Our expected stock price volatility assumption is based on the volatility
of comparable public companies. The expected term of a stock option granted to employees and directors (including non-employee directors)
is based on the average of the contractual term (generally 10 years) and the vesting period. For non-employee options, the expected term
is the contractual term. The risk-free interest rate is based on the yield of U.S. Treasury securities consistent with the life of the
option. The expected dividend yield was set to zero as wedo not pay dividends on our common stock and there was no expectation of doing
so as of the respective grant dates. We recognize forfeitures related to stock-based awards as they occur.

We have periodically granted stock options and restricted stock units
to non-employees for services pursuant to ourstock plans at the fair market value on the respective dates of grant. Should we terminate
any of our consulting agreements, the unvested options underlying the agreements would be cancelled. For awards granted to non-employees,
compensation expense is recognized over the service period.

We granted stock options to purchase an aggregate of 13,550 and 27,125
shares of common stock in the years ended December 31, 2023 and 2022, respectively.

We granted restricted stock units to purchase an aggregate of 13,825
for the year ended December 31, 2023. No such restricted stock units were granted during the year ended December 31, 2022.

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JOBS Act

Section 107 of the JOBS Act provides that an “emerging growth
company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying
with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of new or revised accounting
standards until those standards would otherwise apply to private companies. We have irrevocably elected to avail ourselves of this exemption
from new or revised accounting standards and, therefore, we will not be subject to the same new or revised accounting standards as other
public companies that are not emerging growth companies.

For as long as we remain an emerging growth company under the recently-enacted
JOBS Act, we will, among other things:

We currently intend to take advantage of some or all of the reduced
regulatory and reporting requirements that will be available to us so long as we qualify as an “emerging growth company.”
Among other things, this means that our independent registered public accounting firm will not be required to provide an attestation report
on the effectiveness of our internal control over financial reporting so long as we qualify as an emerging growth company, which may increase
the risk that weaknesses or deficiencies in our internal control over financial reporting go undetected.

Likewise, so long as we qualify as an emerging growth company, we may
elect not to provide certain information, including certain financial information and certain information regarding compensation of our
executive officers, that we would otherwise have been required to provide in filings we make with the SEC, which may make it more difficult
for investors and securities analysts to evaluate our company. As a result, investor confidence in our company and the market price of
our common stock may be materially and adversely affected.

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