UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
 
FORM 10-Q
 
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2024
 
OR
 
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____ to ____
 
Commission file number: 333-60608
 
JANEL CORPORATION
(Exact name of registrant as specified in its charter)
 
Nevada
  
86-1005291
(State or other jurisdiction of
incorporation or organization)
   
(I.R.S. Employer
Identification No.)

80 Eighth Avenue    
New York, New York
   
10011
(Address of principal executive offices)
  
(Zip Code)

Registrant’s telephone number, including area code: (212) 373-5895
Former name, former address and former fiscal year, if changed from last report: N/A
Securities registered pursuant to Section 12(b) of the Act:
 
Title of each class
  
Trading symbols(s)
  
Name of each exchange
on which registered
None
  
None
  
None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes ☒ No ☐
 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes ☒ No ☐
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.
 
Large accelerated filer ☐
Accelerated filer
 ☐
Non-accelerated filer ☐
Smaller reporting company
 ☒
 
Emerging growth company
☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
Yes ☐ No ☒
 
The number of shares of Common Stock outstanding as of August 2, 2024 was 1,186,354.
 
JANEL CORPORATION
QUARTERLY REPORT ON FORM 10-Q
For Quarterly Period Ended June 30, 2024

TABLE OF CONTENTS

     
Page
       
3
       
 
Item 1.
3
       
   
3
       
   
4
       
   
5
       
   
6
       
   
7
       
 
Item 2.
19
       
 
Item 4.
28
       
29
       
 
Item 1.
29
       
 
Item 1A.
29
       
 
Item 2.
29
       
 
Item 6.
29
       
   
30

PART I - FINANCIAL INFORMATION
 
ITEM 1.
FINANCIAL STATEMENTS
 
JANEL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
(Unaudited)


  
June 30,
2024		    
September 30,
2023
  
ASSETS
            
Current Assets:
            
Cash
  
$
3,054
    
$
2,461
  
Accounts receivable, net of allowance for doubtful accounts
    
32,627
      
27,518
  
Inventory, net
    
4,556
      
4,850
  
Prepaid expenses and other current assets
    
4,477
      
4,459
  
Total current assets
    
44,714
      
39,288
  
Property and Equipment, net
    
5,296
      
4,922
  
Other Assets:
                
Intangible assets, net
    
23,830
      
22,683
  
Goodwill
    
23,946
      
20,317
  
Restricted cash
     250       —  
Investment in Rubicon at fair value     831       1,573  
Operating lease right of use asset
    
9,113
      
7,460
  
Security deposits and other long-term assets
    
586
      
591
  
Total other assets
    
58,556
      
52,624
  
Total assets
  
$
108,566
    
$
96,834
  
LIABILITIES AND STOCKHOLDERS’ EQUITY
                
Current Liabilities:
                
Lines of credit
  
$
22,081
    
$
19,709
  
Accounts payable - trade
    
32,058
      
25,447
  
Accrued expenses and other current liabilities
    
6,973
      
6,337
  
Dividends payable
    
2,271
      
2,029
  
Current portion of earnout
    
1,149
      
592
  
Current portion of long-term debt
    
716
      
715
  
Current portion of subordinated promissory notes-related party
    
1,683
      
1,988
  
Current portion of operating lease liabilities
    
2,445
      
2,020
  
Total current liabilities
    
69,376
      
58,837
  
Other Liabilities:
                
Long-term debt
    
4,282
      
5,784
  
Long-term portion of earnout
    
2,011
      
1,738
  
Subordinated promissory notes-related party
    
3,790
      
3,424
  
Mandatorily redeemable non-controlling interest
    
965
      
565
  
Deferred income taxes
    
1,341
      
1,341
  
Long-term operating lease liabilities
    
7,034
      
5,689
  
Other liabilities
    
529
      
483
  
Total other liabilities
    
19,952
      
19,024
  
Total liabilities
    
89,328
      
77,861
  
Stockholders’ Equity:
                
Preferred Stock, $0.001 par value; 100,000 shares authorized
                
Series C 30,000 shares authorized and 11,368 shares issued and outstanding at June 30, 2024 and September 30, 2023, liquidation value of $7,955 and $7,713 at June 30, 2024 and September 30, 2023, respectively
     —       —  
Common stock, $0.001 par value; 4,500,000 shares authorized, 1,206,354 issued and 1,186,354 outstanding as of June 30, 2024 and September 30, 2023, respectively
    
1
      
1
  
Paid-in capital
    
17,068
      
17,107
  
Common treasury stock, at cost, 20,000 shares
    
(240
)
    
(240
)
Accumulated earnings
    
2,409
      
2,105
  
Total stockholders’ equity
    
19,238
      
18,973
  
Total liabilities and stockholders’ equity
  
$
108,566
    
$
96,834
  

The accompanying notes are an integral part of these condensed consolidated financial statements.
 
3
JANEL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(Unaudited)
 
   
Three Months Ended
June 30,
    
Nine Months Ended
June 30,
  
   
2024
    
2023
    
2024
    
2023
  
Revenues
  
$
46,724
    
$
42,557
    
$
129,881
    
$
144,979
  
Forwarding expenses and cost of revenues
    
31,633
      
28,898
      
86,822
      
102,654
  
Gross profit
    
15,091
      
13,659
      
43,059
      
42,325
  
Cost and Expenses:
                                
Selling, general and administrative
    
13,358
      
12,948
      
38,664
      
38,261
  
Amortization of intangible assets
    
555
      
524
      
1,635
      
1,593
  
Total Costs and Expenses
    
13,913
      
13,472
      
40,299
      
39,854
  
Income from Operations
    
1,178
      
187
      
2,760
      
2,471
  
Other Items:
                                
Interest expense
    
(589
)
    
(528
)
    
(1,663
)
    
(1,476
)
Other expense
    
(437
)
    
(269
)
     (381 )     (779 )
Income (Loss) Before Income Taxes
    
152
      
(610
)
    
716
      
216
  
Income tax benefit (expense)
    
(343
)
    
180
      
(412
)
    
(68
)
Net Income (Loss)
    
(191
)
    
(430
)
    
304
      
148
  
Preferred stock dividends
    
(85
)
    
(70
)
    
(242
)
    
(212
)
Net Income (Loss) Available to Common Stockholders
  
$
(276
)
  
$
(500
)
  
$
62
    
$
(64
)
                                 
Net income (loss) per share
                                
Basic
  
$
(0.16
)
  
$
(0.36
)
  
$
0.25
    
$
0.12
  
Diluted
  
$
(0.16
)
  
$
(0.36
)
  
$
0.25
    
$
0.12
  
Net income (loss) per share attributable to common stockholders:
                                
Basic
  
$
(0.23
)
  
$
(0.42
)
  
$
0.05
    
$
(0.05
)
Diluted
  
$
(0.23
)
  
$
(0.42
)
  
$
0.05
    
$
(0.05
)
Weighted average number of shares outstanding:
                                
Basic
    
1,186.4
      
1,186.4
      
1,186.4
      
1,186.4
  
Diluted
    
1,186.4
      
1,186.4
      
1,205.9
      
1,186.4
  

The accompanying notes are an integral part of these condensed consolidated financial statements.
 
4
JANEL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY
(in thousands, except share and per share data)
(Unaudited)

   
PREFERRED
STOCK
    
COMMON STOCK
    
PAID-IN
CAPITAL
    
COMMON TREASURY
STOCK
    
ACCUMULATED
EARNINGS
    
TOTAL
EQUITY
  
   
SHARES
     $
   
SHARES
      $     $
   
SHARES
      $      $     $
 
Balance - September 30, 2023
    
11,368
    
$
—
      
1,206,354
    
$
1
    
$
17,107
      
20,000
    
$
(240
)
  
$
2,105
    
$
18,973
  
Net Income
    
—
      
—
      
—
      
—
      
—
      
—
      
—
      
276
      
276
  
Dividends to preferred stockholders
    
—
      
—
      
—
      
—
      
(72
)
    
—
      
—
      
—
      
(72
)
Stock-based compensation
    
—
      
—
      
—
      
—
      
68
      
—
      
—
      
—
      
68
  
Balance - December 31, 2023
    
11,368
    
$
—
      
1,206,354
    
$
1
    
$
17,103
      
20,000
    
$
(240
)
  
$
2,381
    
$
19,245
  
Net Income
     —       —       —       —       —       —       —       219       219  
Dividends to preferred stockholders
     —       —       —       —       (85 )     —       —       —       (85 )
Stock based compensation
     —       —       —       —       68       —       —       —       68  
Balance - March 31, 2024
     11,368     $ —       1,206,354     $ 1     $ 17,086       20,000     $ (240 )   $ 2,600     $ 19,447  
Net Loss
     —       —       —       —       —       —       —       (191 )     (191 )
Dividends to preferred stockholders
     —       —       —       —       (85 )     —       —       —       (85 )
Stock based compensation
     —       —       —       —       67       —       —       —       67  
Balance – June 30, 2024
     11,368     $ —       1,206,354     $ 1     $ 17,068       20,000     $ (240 )   $ 2,409     $ 19,238  

   
PREFERRED
STOCK
    
COMMON STOCK
    
PAID-IN
CAPITAL
    
COMMON TREASURY
STOCK
    
ACCUMULATED
EARNINGS
    
TOTAL
EQUITY
  
   
SHARES
     $
   
SHARES
      $     $
   
SHARES
      $     $
    $
 
Balance - September 30, 2022
    
11,368
    
$
—
      
1,206,354
    
$
1
    
$
17,184
      
20,000
    
$
(240
)
  
$
1,382
    
$
18,327
  
Net Income
    
—
      
—
      
—
      
—
      
—
      
—
      
—
      
360
      
360
  
Dividends to preferred stockholders
    
—
      
—
      
—
      
—
      
(72
)
    
—
      
—
      
—
      
(72
)
Stock-based compensation    
—
      
—
      
—
      
—
      
51
      
—
      
—
      
—
      
51
  
Balance - December 31, 2022
    
11,368
    
$
—
      
1,206,354
    
$
1
    
$
17,163
      
20,000
    
$
(240
)
  
$
1,742
    
$
18,666
  
Net Income
     —       —       —       —       —       —       —       218       218  
Dividends to preferred stockholders
     —       —       —       —       (70 )     —       —       —       (70 )
Stock based compensation
     —       —       —       —       53       —       —       —       53  
Balance - March 31, 2023
     11,368     $ —       1,206,354     $ 1     $ 17,146       20,000     $ (240 )   $ 1,960     $ 18,867  
Net Loss
     —       —       —       —       —       —       —       (430 )     (430 )
Dividends to preferred stockholders
     —       —       —       —       (70 )     —       —       —       (70 )
Stock based compensation
     —       —       —       —       51       —       —       —       51  
Balance - June 30, 2023
     11,368     $ —       1,206,354     $ 1     $ 17,127       20,000     $ (240 )   $ 1,530     $ 18,418  
 
The accompanying notes are an integral part of these condensed consolidated financial statements.
 
5
JANEL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
 
 
  
Nine Months Ended
June 30,
  
   
2024
    
2023
  
Cash flows from operating activities:
            
Net income
  
$
304
    
$
148
  
Adjustments to reconcile net income to net cash provided by operating activities:
                
Recovery of uncollectible accounts
    
(71
)
    
(292
)
Depreciation
    
404
      
373
  
Deferred income tax provision
    
—
      
(8
)
Amortization of intangible assets
    
1,635
      
1,593
  
Amortization of acquired inventory valuation
    
264
      
320
  
Amortization of loan costs
    
72
      
63
  
Stock-based compensation
    
214
      
185
  
Unrealized loss on marketable securities
     742       779
  
Change in fair value of mandatorily redeemable noncontrolling interest
    
400
      
—
  
Fair value adjustments of contingent earnout liabilities
     553       —  
Gain on extinguishment of debt
     (21 )     —  
Changes in operating assets and liabilities, net of effects of acquisitions:
                
Accounts receivable
    
(3,292
)
    
27,056
  
Inventory
    
38
      
(106
)
Prepaid expenses and other current assets
    
102
      
(1,151
)
Security deposits and other long-term assets
    
4
      
(82
)
Accounts payable and accrued expenses
    
4,844
      
(17,996
)
Other liabilities
    
162
      
174
  
Net cash provided by operating activities
    
6,354
      
11,056
  
Cash flows from investing activities:
                
Acquisition of property and equipment, net of disposals
    
(658
)
    
(267
)
Earnout payment
     (740 )     (1,693 )
Acquisitions, net of cash acquired
    
(3,795
)
    
(4,401
)
Net cash used in investing activities
    
(5,193
)
    
(6,361
)
Cash flows from financing activities:
                
Repayments of term loan
    
(1,573
)
    
(1,113
)
  Proceeds from (Payments to) Lines of credit, net
    
2,372
      
(7,101
)
Repayment of subordinate promissory notes, net
    
(1,117
)
    
(299
)
Net cash used in financing activities
    
(318
)
    
(8,513
)
Net increase (decrease) in cash
    
843
      
(3,818
)
Cash at beginning of the period
    
2,461
      
6,591
  
Cash and restricted cash at end of period
    
3,304
      
2,773
  
                 
Supplemental disclosure of cash flow information:
                
Cash paid during the period for:
                
Interest
  
$
1,442
    
$
1,208
  
Income taxes
  
$
556
    
$
1,300
  
Non-cash operating activities:
                
Contingent earnout acquisition
   $ 64     $ 300  
Due to former owners
   $ 740     $ 455  
Non-cash investing activities:
                
Airschott subordinated promissory note
   $ 1,200     $ —  
  Airschott contingent deferred consideration
   $ 952     $ —  
Non-cash financing activities:
                
Dividends declared to preferred stockholders
  
$
242
    
$
212
  

The accompanying notes are an integral part of these condensed consolidated financial statements.

6
JANEL CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (in thousands, except per share data)
(Unaudited)

1.
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

The accompanying interim unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of Article 8 of Regulation S-X and the instructions to Form 10-Q of the Securities and Exchange Commission. As a result, certain information and footnote disclosures normally included in audited financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. Janel Corporation (the “Company” or “Janel”) believes that the disclosures made are adequate to make the information presented not misleading. The condensed consolidated financial statements reflect all adjustments which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. The results of operations for the periods presented are not necessarily indicative of the results to be expected for a full fiscal year, or any other period. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s Form 10-K as filed with the Securities and Exchange Commission.
 
Business Description

Janel is a holding company with subsidiaries in three business segments: Logistics, Life Sciences and Manufacturing. The Company strives to create shareholder value primarily through three strategic priorities: supporting its businesses’ efforts to make investments and to build long-term profits; allocating Janel’s capital at high risk-adjusted rates of return; and attracting and retaining exceptional talent.

Management at the holding company focuses on significant capital allocation decisions, corporate governance and supporting Janel’s subsidiaries where appropriate. Janel expects to grow through its subsidiaries’ organic growth and by completing acquisitions. We plan to either acquire businesses within our existing segments or expand our portfolio into new strategic segments. Our acquisition strategy focuses on reasonably-priced companies with strong and capable management teams, attractive existing business economics and stable and predictable earnings power.

Restricted Cash

Commencing in the second half of 2024, the Company insures certain risks through a newly formed wholly-owned captive insurance company, Gainesville Insurance Company, Inc. (“Gainesville”). In addition, we also maintain some of our normal, historical insurance policies with third-party insurers. Restricted cash represents deposits held by Gainesville that are required by state insurance regulations to remain in the captive insurance company as cash or cash equivalents. The Company considers all highly liquid investments with an original maturity of three months or less, when purchased, to be cash equivalents.

Revenue and revenue recognition
 

Logistics



Revenues are recognized upon transfer of control of promised services to customers. With respect to its Logistics segment, the Company has determined that, in general, each shipment transaction or service order constitutes a separate contract with the customer. When the Company provides multiple services to a customer, different contracts may be present for different services.



The Company typically satisfies its performance obligations as services are rendered at a point in time. A typical shipment would include services rendered at origin, such as pick-up and delivery to port, freight services from origin to destination port and destination services, such as customs clearance and final delivery. The Company measures the performance of its obligations as services are completed at a point in time during the life of a shipment, including services at origin, freight and destination. The Company fulfills nearly all of its performance obligations within a one- to two-month period.



The Company evaluates whether amounts billed to customers should be reported as gross or net revenues. Generally, revenues are recorded on a gross basis when the Company is acting as principal and is primarily responsible for fulfilling the promise to provide the services, when it has discretion in setting the prices for the services to the customers, and the Company has the ability to direct the use of the services provided by the third party. Revenues are recognized on a net basis when the Company is acting as agent, and we do not have latitude in carrier selection or in establishing rates with the carrier.



In the Logistics segment, the Company disaggregates its revenue by its four primary service categories: Trucking, Ocean, Air, Customs Brokerage and Other. A summary of the Company’s revenues disaggregated by major service lines for the three and nine months ended June 30, 2024 and 2023 is as follows (in thousands):
 
7
   
Three Months Ended
June 30,
   
Nine Months Ended
June 30,
 
   
2024
    
2023
    
2024
    
2023
  
Service Type
                      
Trucking
  
$
18,689
    
$
19,314
    
$
55,040
    
$
61,671
  
Ocean
     10,443       7,502       25,204       34,908  
Air
   
6,733
      
5,638
      
19,261
      
17,096
  
Customs Brokerage and Other    
4,812
      
5,030
      
12,486
      
15,487
  
Total
  
$
40,677
    
$
37,484
    
$
111,991
    
$
129,162
  


Life Sciences and Manufacturing



Revenues from the Life Sciences segment are derived from the sale of high-quality monoclonal and polyclonal antibodies, diagnostic reagents and diagnostic kits and other immunoreagents for biomedical research and antibody manufacturing. Revenues from the Company’s Manufacturing segment, which is comprised of Indco, a majority-owned subsidiary of the Company that manufactures and distributes mixing equipment and apparatus for specific applications within various industries (“Indco”), are derived from the engineering, manufacture and delivery of specialty mixing equipment and accessories. Revenues for Life Sciences and Manufacturing are recognized when products are shipped and the risk of loss is transferred to the carrier(s) used.

2.
ACQUISITIONS
 
Fiscal 2024 Acquisitions


Logistics


On June 5, 2024, the Company completed a business combination whereby it acquired a majority ownership position in Airschott, Inc. (“Airschott”), a non-asset-based freight forwarder and customs broker, for an aggregate purchase price of $5,900.  At closing, the Company purchased 80% of the outstanding stock of Airschott for $3,600 in cash, a $1,200 floating-rate seller’s note, and net liabilities assumed of $170.  The Company also agreed to purchase the remaining 20% of Airschott stock in three years for deferred consideration of the greater of 20% of 1.25 times the trailing twelve months gross profit of Airschott and $1,200.  The acquisition was funded by our existing acquisition draw facility with First Merchants Bank (“First Merchants”) and through our existing asset-backed facility with Santander Bank, N.A. (“Santander”). In connection with the combination, the Company recorded an aggregate of $3,500 in goodwill and $2,400 in other identifiable intangibles. Supplemental pro forma information has not been provided as the acquisition did not have a significant impact on Janel’s condensed consolidated results of operations, individually or in aggregate. Airschott was founded in 1977 and is headquartered in Dulles, Virginia. The acquisition of Airschott was completed to expand our service offerings in our Logistics segment.

The Company is still finalizing the valuation of assets acquired, liabilities assumed, and the deferred consideration for Airschott, and, as such, the fair value amounts are preliminary and subject to change. Primary amounts subject to adjustment include, but are not limited to, intangible assets, fair value of accounts receivable or a change in the goodwill balance.

Life Sciences

On February 1, 2024, the Company completed a business combination whereby it acquired all of the outstanding stock of ViraQuest, Inc. (“ViraQuest”), for an aggregate purchase price of $635, net of $29 cash received. At closing, $600 was paid in cash and $64 was recorded as a preliminary earnout consideration. The acquisition was funded with cash provided by operating activities, and the results of operations of ViraQuest are included in Janel’s condensed consolidated results of operations since the date of the acquisition. In connection with the combination, the Company recorded an aggregate of $74 in goodwill and $412 in other identifiable intangibles. Supplemental pro forma information has not been provided as the acquisition did not have a significant impact on Janel’s condensed consolidated results of operations, individually or in aggregate. ViraQuest is a biotechnology custom service provider specializing in adenovirus production services. ViraQuest was founded in 2000 and is headquartered in North Liberty, Iowa. The acquisition of ViraQuest was completed to expand our service offerings in our Life Sciences segment.

The Company is still finalizing the valuation of assets acquired and liabilities assumed for ViraQuest, and, as such, the fair value amounts are preliminary and subject to change. Primary amounts subject to adjustment include, but are not limited to, intangible assets, fair value of accounts receivable or a change in the goodwill balance.

8
Fiscal 2023 Acquisitions
 
Life Sciences

On November 1, 2022, the Company completed a business combination whereby it acquired all of the outstanding stock of ImmunoBioScience Corporation (“IBS”), for an aggregate purchase price of $3,602, net of $153 cash received.  At closing, $3,000 was paid in cash, $250 was due to the former stockholder of IBS as a deferred acquisition payment upon integration, $300 was recorded as a preliminary earnout consideration (not to exceed $750) and $205 was recorded as a preliminary working capital adjustment. The acquisition was funded with cash provided by normal operations, and the results of operations of IBS are included in Janel’s condensed consolidated results of operations since the date of the acquisition. In connection with the combination, the Company recorded an aggregate of $1,468 in goodwill and $1,680 in other identifiable intangibles. Supplemental pro forma information has not been provided as the acquisition did not have a significant impact on Janel’s condensed consolidated results of operations, individually or in aggregate. IBS is a developer and manufacturer of high-quality reagents used by research and diagnostic customers. IBS was founded in 2007 and is headquartered in Mukilteo, Washington. The acquisition of IBS was completed to expand our product offerings in our Life Sciences segment.

On March 2, 2023, the Company completed a business combination whereby it acquired all of the outstanding stock of Stephen Hall PhD, Ltd. (“SH”) for an aggregate purchase price of $600. At closing, $500 was paid in cash and $100 was due to the former stockholder of SH as a deferred acquisition payment upon integration. The acquisition was funded with cash provided by normal operations, and the results of operations of SH are included in Janel’s condensed consolidated results of operations since the date of the acquisition. In connection with the combination, the Company recorded an aggregate of $181 in goodwill and $202 in other identifiable intangibles. SH is a developer and manufacturer of antibodies and cell culture media for research and diagnostic uses. SH was founded in 2011 and is headquartered in Lafayette, Indiana. The acquisition of SH was completed to expand our product offerings in our Life Sciences segment.

On May 22, 2023, the Company acquired all the rights, title and interests to a royalty agreement for certain antibody products for a purchase price of $500. The Company recorded this acquisition as a royalty asset, which is included in intangible assets in the accompanying condensed consolidated balance sheet (reclassed from Security deposits and other long-term assets in the current period) and will be amortized over the estimated life of ten years.

3.
INVENTORY
 
Inventories consisted of the following (in thousands):

   
June 30,
2024
    
September 30,
2023
  
Finished goods
  
$
1,998
    
$
2,095
  
Work-in-process
    
800
      
969
  
Raw materials
    
1,789
      
1,811
  
Gross inventory
    
4,587
      
4,875
  
Less – reserve for inventory valuation
    
(31
)
    
(25
)
Inventory net
  
$
4,556
    
$
4,850
  

4.
INTANGIBLE ASSETS
 
A summary of intangible assets and the estimated useful lives used in the computation of amortization is as follows (in thousands):

   
June 30,
2024
    
September 30,
2023
  
Life
Customer relationships
  
$
27,939
    
$
25,238
  
10-24 Years
Trademarks/names
    
4,541
      
4,559
  
1-20 Years
Trademarks/names
    
541
      
521
  
Indefinite
Other
    
2,007
      
1,929
  
2-22 Years

   
35,028
      
32,247
    
Less: Accumulated Amortization
    
(11,198
)
    
(9,564
)
  
Intangible assets, net
  
$
23,830
    
$
22,683
    

9
The composition of the intangible assets balance at June 30, 2024 and September 30, 2023 is as follows (in thousands):

   
June 30,
2024
    
September 30,
2023
  
Logistics
  
$
20,543
    
$
18,174
  
Life Sciences     6,785       6,373  
Manufacturing
    
7,700
      
7,700
  

   
35,028
      
32,247
  
Less: Accumulated Amortization
    
(11,198
)
    
(9,564
)
Intangible assets, net
  
$
23,830
    
$
22,683
  

Amortization expense for the nine months ended June 30, 2024 and 2023 was $1,635 and $1,593, respectively.
 
5.
GOODWILL
 
The Company’s goodwill carrying amounts relate to acquisitions in the Logistics, Life Sciences and Manufacturing business segments.

The composition of the goodwill balance at June 30, 2024 and September 30, 2023 was as follows (in thousands):

   
June 30,
2024
    
September 30,
2023
  
Logistics
  
$
12,729
    
$
9,175
  
Life Sciences     6,171       6,096  
Manufacturing
    
5,046
      
5,046
  
Total
  
$
23,946
    
$
20,317
  

6.
NOTES PAYABLE – BANKS
 
(A)
Santander Bank Facility

The wholly-owned subsidiaries that comprise the Company’s Logistics segment (collectively, the “Janel Group Borrowers”), with the Company as a guarantor, have a Loan and Security Agreement (as amended, the “Santander Loan Agreement”) with Santander with respect to a revolving line of credit facility (the “Santander Facility”).

On January 30, 2023, the Santander Loan Agreement was further amended by the Third Amendment to the Amended and Restated Loan and Security Agreement (the “Third Santander Amendment”). As amended by the terms of the Third Santander Amendment, the percentage of the Borrowers’ eligible accounts receivable used to calculate the borrowing base under the Santander Loan Agreement was increased from 85% to 90% for Domestic Insured Accounts (as defined in the Third Santander Amendment), subject to adjustments set forth in the Santander Loan Agreement.

On April 25, 2023, in connection with an amendment to the Credit Agreement entered into with First Merchants as described further below, we entered into the Fourth Amendment to the Amended and Restated Loan and Security Agreement (the “Fourth Santander Amendment”).  The Fourth Santander Amendment (i) included modifications to address the amendments made to the First Merchants Credit Facilities (as defined below) and the consolidation of the debt thereunder and (ii) terminated the subordination agreement relating to the Company’s guarantee of the First Merchants Credit Facilities (as defined below).

On August 22, 2023, we entered into the Fifth Amendment to the Santander Loan Agreement (the “Fifth Santander Amendment”).  The Fifth Santander Amendment permitted certain unsecured guaranties by the Company in the ordinary course of business guarantying obligations of subsidiaries in an aggregate amount not to exceed $4,000 and related modifications to certain negative covenants.

On December 1, 2023, in connection with an amendment (the “Purchase Agreement Amendment”) to that certain Membership Interest Purchase Agreement dated as of September 21, 2021 (the “Purchase Agreement”) among Janel Group, Inc. (“Janel Group”), a wholly-owned subsidiary of the Company, Expedited Logistics and Freight Services, LLC (“ELFS”) and former shareholders of ELFS (the “ELFS Sellers”), (i) the Janel Group Borrowers and Santander entered into an Acknowledgment and Consent Agreement pursuant to which Santander consented to the Purchase Agreement Amendment and the effect of the modifications thereunder on the Santander Loan Agreement and (ii) the ELFS Sellers and Santander entered into an Acknowledgment and Consent Agreement pursuant to which Santander consented to the Purchase Agreement Amendment and the effect of the modifications thereunder on the Subordination Agreement (as defined in the Santander Loan Agreement) between Santander and the ELFS Sellers.

10
On December 21, 2023, we entered into the Sixth Amendment to the Santander Loan Agreement (the “Sixth Santander Amendment”). The Sixth Santander Amendment modified the reporting due date of the monthly borrowing base calculation from the fifth day to the fifteenth day of each month.

On June 5, 2024, we entered into the Seventh Amendment to the Santander Loan Agreement (the “Seventh Santander Amendment”).  The Seventh Santander Amendment added Airschott as a loan party obligor and borrower.

The Santander Loan Agreement matures on September 21, 2026.  Interest accrues on the Santander Facility at an annual rate equal to the one-month SOFR plus 2.75%. The Janel Group Borrowers’ obligations under the Santander Facility are secured by all of the assets of the Janel Group Borrowers, while the Santander Loan Agreement contains customary terms and covenants. As a result of its terms, the Santander Facility is classified as a current liability on the consolidated balance sheet.

At June 30, 2024, outstanding borrowings under the Santander Facility were $18,231, representing 52.1% of the $35,000 available subject to limitations thereunder, and interest was accruing at an effective interest rate of 7.69%.

At September 30, 2023, outstanding borrowings under the Santander Facility were $18,759, representing 53.6% of the $35,000 available thereunder, and interest was accruing at an effective interest rate of 7.60%.

The Company was in compliance with the financial covenants defined in the Santander Loan Agreement at both June 30, 2024 and September 30, 2023.
 
(B)
First Merchants Bank Credit Facility
 
On February 29, 2016, Indco entered into a Credit Agreement (as amended, the “Prior First Merchants Credit Agreement”) with First Merchants.

On April 25, 2023, Indco and certain other Subsidiaries of the Company that are part of the Life Sciences and Manufacturing segments  (together with Indco, the “Borrowers” and each, a “Borrower”), entered into a Credit Agreement (the “First Merchants Credit Agreement”) with First Merchants.  The First Merchants Credit Agreement constitutes an amendment and restatement of  the Prior First Merchants Credit Agreement.  The credit facilities provided under the First Merchants Credit Agreement (the “First Merchants Credit Facilities”) consist of a $3,000 revolving loan (limited to the borrowing base and reserves), a $5,000 acquisition loan, a $6,905 Term A loan and a $620 Term B loan as a continuation of the mortgage loan under the Prior First Merchants Credit Agreement.  Interest accrues on the outstanding revolving loan, Term A loan and acquisition loan at an annual rate equal to one-month adjusted term SOFR plus either (i) 2.75% (if the Borrowers’ total funded debt to EBITDA ratio is less or equal to 1.75:1.00) or (ii) 3.50% (if the Borrowers’ total funded debt to EBITDA ratio is greater than to 1.75:1.00).  Interest accrues on the Term B loan at an annual rate of 4.19%.  The Borrowers’ obligations under the First Merchants Credit Facilities are secured by all of the Borrowers’ real property and other assets, and are guaranteed by the Company, and the Company’s guarantee of the Borrowers’ obligations is secured by a pledge of the Company’s equity interests in certain of the Borrowers.  The revolving loan portion will expire on August 1, 2027, the Term A loan portion will mature on April 25, 2033, and the Term B loan portion will mature on July 1, 2025. The acquisition loan will permit multiple draws until October 25, 2024, at which point the outstanding principal amount will amortize, with all remaining amounts of the acquisition loan due at maturity on April 25, 2029.

On January 10, 2024, the First Merchants Credit Facilities was amended to provide for, among other changes, permitted affiliate loans provided availability on its revolving loan both before and after giving effect to any such loan, is not less than $1,000 and maturity of such permitted affiliate loans are not to exceed fourteen days from disbursement.

As of June 30, 2024, there were $3,850 of outstanding borrowings under the acquisition loan, $4,725 of outstanding borrowings under the Term A loan and $591 of outstanding borrowings under the Term B loan, with interest accruing on the acquisition loan and revolving loan at an effective interest rate of 8.20% each, and on the Term A loan and Term B loan at an effective interest rate of 8.20% and 4.19%, respectively.

As of September 30, 2023, there were $500 of outstanding borrowings under the acquisition loan, $450 of outstanding borrowings under the revolving loan, $6,235 of outstanding borrowings under the Term A loan and $610 of outstanding borrowings under the Term B loan, with interest accruing on the acquisition loan and revolving loan at an effective interest rate of 8.18% and on the Term A loan and Term B loan at an effective interest rate of 8.18% and 4.19%, respectively.
 
The Company was in compliance with the financial covenants defined in the First Merchants Credit Agreement at June 30, 2024 and September 30, 2023.
 
11
The table below sets forth the total long-term debt, net of capitalized loan fees of $319 for the First Merchants Credit Agreement (in thousands):

(in thousands)
  
June 30,
2024
    
September 30,
2023
  
Total Debt
  
$
4,998
    
$
6,499
  
Less Current Portion
    
(716
)
    
(715
)
Long-term Portion  
$
4,282
    
$
5,784
  

7.
SUBORDINATED PROMISSORY NOTES - RELATED PARTY
 
(A)
ICT Subordinated Promissory Note

Aves Labs, Inc., a wholly-owned subsidiary of the Company, is the obligor on a fixed 0.5% subordinated promissory note in the amount of $1,850 (the “ICT Subordinated Promissory Note”) issued to the former owner of ImmunoChemistry Technologies, LLC (“ICT”), in connection with a business combination whereby the Company acquired all of the membership interests of ICT. The ICT Subordinated Promissory Note is payable in sixteen scheduled quarterly installments of principal and interest beginning March 4, 2021, matures on December 4, 2024, and may be prepaid, in whole or in part, without premium or penalty. 

The ICT Subordinated Promissory Note is subordinate to and junior in right of payment for principal interest premiums and other amounts payable to Santander and First Merchants.

As of June 30, 2024, the amount outstanding under the ICT Subordinated Promissory Note was $110, net of a $28 discount, which is included in the current portion of subordinated promissory notes.

As of September 30, 2023, the amount outstanding under the ICT Subordinated Promissory Note was $312, of which $288 is included in the current portion of subordinated promissory notes and $24 is included in the long-term portion of subordinated promissory notes.

(B)
ELFS Subordinated Promissory Notes

Janel Group is the obligor on four fixed 4% subordinated promissory notes totaling $6,000 in the aggregate (together, the “ELFS Subordinated Promissory Notes”), payable to certain former shareholders of ELFS, in connection with the Company’s business combination whereby it acquired all the membership interest of ELFS and its related subsidiaries.  All of the ELFS Subordinated Promissory Notes are guaranteed by the Company and are subordinate to and junior in right of payment for principal, interest, premiums and other amounts payable to the Santander Facility and the First Merchants Credit Facility. The ELFS Subordinated Promissory Notes are payable in twelve equal consecutive quarterly installments of principal together with accrued interest. Beginning October 15, 2021 and on the same day of the next eight consecutive calendar quarters, thereafter payment of accrued interest and unpaid interest is due to the former shareholders. Beginning October 15, 2023, and on the same day of the next twelve consecutive calendar quarters thereafter payment of principal together with accrued interest and unpaid interest is due to the former shareholders. In June 2022, the principal amount of the ELFS Subordinated Promissory Notes was adjusted to $5,100 due to a revised working capital adjustment of $900.


On December 1, 2023, in connection with the Purchase Agreement Amendment among Janel Group and the ELFS Sellers, the Company extended the ELFS Subordinated Promissory Notes maturity by two years and restored the working capital adjustment (as defined in the Purchase Agreement) by $900 which increased the principal amount of the ELFS Subordinated Promissory Notes to $6,000. The Company evaluated the accounting treatment related to the amendment and determined the agreements are substantially different and extinguished the original subordinated promissory notes and recorded the amended subordinated promissory notes at fair value of $4,654. As a result, the Company recorded a debt discount of approximately $921 and a $21 gain on extinguishment.

As of June 30, 2024, the gross amount outstanding under the ELFS Subordinated Promissory Notes was $4,164, ($3,340 net of $824 unamortized discount), of which $1,174 was included in the current portion of subordinated promissory notes and $2,990 was included in the long-term portion of subordinated promissory notes.

As of September 30, 2023, the amount outstanding under the ELFS Subordinated Promissory Notes was $5,100, of which $1,700 was included in the current portion of subordinated promissory notes and $3,400 was included in the long-term portion of subordinated promissory notes.

(C)
Airschott Subordinated Promissory Note

Janel Group is the obligor on a floating rate (Prime Rate plus 2%) subordinated promissory note in the amount of $1,200 issued (the “Airschott Subordinated Promissory Note”), to a former owner of Airschott, in connection with the business combination whereby Janel Group acquired Airschott.  The note is payable in twelve consecutive quarterly payments, commencing in July 2024, of $100 together with accrued interest on the outstanding principal balance.

12
As of June 30, 2024, the amount outstanding under the Airschott Subordinated Promissory Note was $1,200, $400 which is included in the current portion of subordinated promissory notes.

The table below sets forth the total long-term portion of subordinated promissory notes (in thousands):

(in thousands)  
June 30,
2024
    
September 30,
2023
  
Total subordinated promissory notes
  
$
5,473
    
$
5,412
  
Less current portion of subordinated promissory notes
    
(1,683
)
    
(1,988
)
Long-term portion of subordinated promissory notes
  
$
3,790
    
$
3,424
  

8.
STOCKHOLDERS’ EQUITY
(in thousands, except share and per share data)

Preferred Stock

Series C Cumulative Preferred Stock

Shares of the Company’s Series C Cumulative Preferred Stock (the “Series C Stock”) were initially entitled to receive annual dividends at a rate of 7% per annum of the original issuance price of $500, when and if declared by the Company’s board of directors, with such rate to increase by 2% annually beginning on the third anniversary of issuance of such Series C Stock to a maximum rate of 13%. By the filing of the Certificate of Amendment to the Company’s Certificate of Incorporation on March 31, 2022, the annual dividend rate decreased to 5% per annum of the original issuance price, when and if declared by the Company’s board of directors, and increased by 1% on January 1, 2024. Such rate is to increase on each January 1 thereafter for four years to a maximum rate of 9%. The dividend rate of the Series C Stock as of June 30, 2024 and September 30, 2023 was 6% and 5%, respectively.

9.
STOCK-BASED COMPENSATION
(in thousands, except share and per share data)

On October 30, 2013, the board of directors of the Company adopted the Company’s 2013 Non-Qualified Stock Option Plan (the “2013 Option Plan”) providing for options to purchase up to 100,000 shares of common stock for issuance to directors, officers, employees of and consultants to the Company and its subsidiaries.
 
On September 21, 2021, the board of directors of the Company adopted the Amended and Restated 2017 Janel Corporation Equity Incentive Plan (the “Amended Plan”) pursuant to which non-statutory stock options, restricted stock awards and stock appreciation rights of the Company’s Common Stock may be granted to employees, directors and consultants to the Company and its subsidiaries. The Amended Plan increased the number of shares of Common Stock that may be issued pursuant to the Amended Plan from 100,000 to 200,000 shares of Common Stock of the Company and was updated to reflect certain other non-substantive amendments.
 
Total stock-based compensation for the nine months ended June 30, 2024 and 2023 amounted to $214 and $185, respectively, and is included in selling, general and administrative expense in the Company’s statements of operations.
 
Options

   
Number
of Options
    
Weighted
Average
Exercise
Price
    
Weighted
Average
Remaining
Contractual
Term (in years)
    
Aggregate
Intrinsic
Value
(in thousands)
  
Outstanding balance at September 30, 2023
    
40,993
    
$
22.53
      
6.6
    
$
962.27
  
Granted
    
12,500
    
$
28.25
      
9.3
    
$
193.50
  
Expired     (3,500 )   $
 3.25       —     $ —  
Outstanding balance at June 30, 2024
    
49,993
    
$
25.31
      
7.1
    
$
1,014.09
  
Exercisable at June 30, 2024
    
24,162
    
$
12.63
      
5.5
    
$
751.52
  
 
The aggregate intrinsic value in the above table was calculated as the difference between the closing price of the Company’s common stock at June 30, 2024 of $43.73 per share and the exercise price of the stock options that had strike prices below such closing price.
 
As of June 30, 2024, there was approximately $344 of total unrecognized compensation expense related to the unvested employee stock options, which is expected to be recognized over a weighted average period of two years.
13
Liability classified share-based awards
 
During the nine months ended June 30, 2024 and fiscal year ended September 30, 2023, there were no options granted and no options were exercised with respect to Indco’s common stock.

10.
INCOME PER COMMON SHARE
 
The following table provides a reconciliation of the basic and diluted earnings per share (“EPS”) computations for the three and nine months ended June 30, 2024 and 2023:
 
   
Three Months Ended
June 30,
    
Nine Months Ended
June 30,
  
(in thousands, except per share data)
   2024
    
2023
     2024    
2023
  
Income:
                        
Net income (loss)
  
$
(191
)
  
$
(430
)
  
$
304
    
$
148
  
Preferred stock dividends
    
(85
)
    
(70
)
    
(242
)
    
(212
)
Net income (loss) available to common stockholders
  
$
(276
)
  
$
(500
)
  
$
62
    
$
(64
)
                                 
Common Shares:
                                
Basic - weighted average common shares
    
1,186.4
      
1,186.4
      
1,186.4
      
1,186.4
  
Effect of dilutive securities:
                                
Stock options
    
—
      
—
      
19.5
      
—
  
Diluted - weighted average common stock
    
1,186.4
      
1,186.4
      
1,205.9
      
1,186.4
  
                                 
Income per Common Share:
                                
Basic -
                                
Net income (loss)
  
$
(0.16
)
  
$
(0.36
)
  
$
0.25
    
$
0.12
  
Preferred stock dividends
    
(0.07
)
    
(0.06
)
    
(0.20
)
    
(0.17
)
Net  income (loss) available to common stockholders
  
$
(0.23
)
  
$
(0.42
)
  
$
0.05
    
$
(0.05
)
                                 
Diluted -
                                
Net income (loss)
  
$
(0.16
)
  
$
(0.36
)
  
$
0.25
    
$
0.12
  
Preferred stock dividends
    
(0.07
)
    
(0.06
)
    
(0.20
)
    
(0.17
)
Net income (loss) available to common stockholders
  
$
(0.23
)
  
$
(0.42
)
  
$
0.05
    
$
(0.05
)
 
The computation for the diluted number of shares excludes unexercised stock options that are anti-dilutive. There were 10 anti-dilutive shares for each of the three- and nine-month periods ended June 30, 2023. There were 22.5 anti-dilutive shares for each of the three- and nine-month periods ended June 30, 2024.

11.
INCOME TAXES
 
The reconciliation of income tax computed at the Federal statutory rate to the provision for income taxes from continuing operations for the three- and nine-month periods ended June 30, 2024 and 2023 was as follows (in thousands):

   
Three Months Ended
June 30,
    
Nine Months Ended
June 30,
  

  2024
    
2023
     2024    
2023
  
Federal taxes at statutory rates
  
$
(32
)
  
$
129
    
$
(150
)
  
$
(45
)
Permanent differences and other
    
(184
)
    
31
      
(91
)
    
(5
)
State and local taxes, net of Federal benefit
     (127 )     20       (171 )     (18 )
Total
  
$
(343
)
  
$
180
    
$
(412
)
  
$
(68
)

12.
BUSINESS SEGMENT INFORMATION

As referenced above in Note 1, the Company operates in three reportable segments: Logistics, Life Sciences and Manufacturing.

The Company’s Chief Executive Officer regularly reviews financial information at the reporting segment level in order to make decisions about resources to be allocated to the segments and to assess their performance.
 
14

The following tables present selected financial information about the Company’s reportable segments and Corporate for the purpose of reconciling to the consolidated totals for the three and nine months ended June 30, 2024:
 
For the three months ended June 30, 2024
(in thousands)
  
Consolidated
    
Logistics
    
Life Sciences
    
Manufacturing
    
Corporate
  
Revenues
  
$
46,724
    
$
40,677
    
$
3,208
    
$
2,839
    
$
—
  
Forwarding expenses and cost of revenues
    
31,633
      
29,725
      
609
      
1,299
      
—
  
Gross profit
    
15,091
      
10,952
      
2,599
      
1,540
      
—
  
Selling, general and administrative
    
13,358
      
9,444
      
1,812
      
793
      
1,309
  
Amortization of intangible assets
    
555
      
—
      
—
      
—
      
555
  
Income (loss) from operations
    
1,178
      
1,508
      
787
      
747
      
(1,864
)
Interest expense
    
589
      
426
      
97
      
66
      
—
  
Identifiable assets
    
108,566
      
42,025
      
12,075
      
4,374
      
50,092
  
Capital expenditures, net of disposals
  
331
    
21
    
302
    
8
    
—
  

For the nine months ended June 30, 2024
(in thousands)
  
Consolidated
    
Logistics
    
Life Sciences
    
Manufacturing
    
Corporate
  
Revenues
  
$
129,881
    
$
111,991
    
$
10,213
    
$
7,677
    
$
—
  
Forwarding expenses and cost of revenues
    
86,822
      
81,232
      
2,065
      
3,525
      
—
  
Gross profit
    
43,059
      
30,759
      
8,148
      
4,152
      
—
  
Selling, general and administrative
    
38,664
      
27,186
      
5,307
      
2,364
      
3,807
  
Amortization of intangible assets
    
1,635
      
—
      
—
      
—
      
1,635
  
Income (loss) from operations
    
2,760
      
3,573
      
2,841
      
1,788
      
(5,442
)
Interest expense
    
1,663
      
1,188
      
245
      
230
      
—
  
Identifiable assets
    
108,566
      
42,025
      
12,075
      
4,374
      
50,092
  
Capital expenditures, net of disposals
  
658
    
47
    
603
    
8
    
—
  

The following tables present selected financial information about the Company’s reportable segments and Corporate for the purpose of reconciling to the consolidated totals for the three and nine months ended June 30, 2023:
 
For the three months ended June 30, 2023
(in thousands)
  
Consolidated
    
Logistics
    
Life Sciences
    
Manufacturing
    
Corporate
  
Revenues
  
$
42,557
    
$
37,484
    
$
2,811
    
$
2,262
    
$
—
  
Forwarding expenses and cost of revenues
    
28,898
      
27,241
      
575
      
1,082
      
—
  
Gross profit
    
13,659
      
10,243
      
2,236
      
1,180
      
—
  
Selling, general and administrative
    
12,948
      
9,629
      
1,512
      
717
      
1,090
  
Amortization of intangible assets
    
524
      
—
      
—
      
—
      
524
  
Income (loss) from operations
    
187
      
614
      
724
      
463
      
(1,614
)
Interest expense
    
528
      
347
      
86
      
95
      
—
  
Identifiable assets
    
99,566
      
38,066
      
11,025
      
4,228
      
46,247
  
Capital expenditures, net of disposals
  
89
    
89
    
—
    
—
    
—
  

For the nine months ended June 30, 2023
(in thousands)
 
Consolidated
    
Logistics
    
Life Sciences
    
Manufacturing
    
Corporate
  
Revenues
  
$
144,979
    
$
129,162
    
$
8,717
    
$
7,100
    
$
—
  
Forwarding expenses and cost of revenues
    
102,654
      
97,339
      
1,930
      
3,385
      
—
  
Gross profit
    
42,325
      
31,823
      
6,787
      
3,715
      
—
  
Selling, general and administrative
    
38,261
      
27,891
      
4,592
      
2,267
      
3,511
  
Amortization of intangible assets
    
1,593
      
—
      
—
      
—
      
1,593
  
Income (loss) from operations
    
2,471
      
3,932
      
2,195
      
1,448
      
(5,104
)
Interest expense
    
1,476
      
1,006
      
165
      
305
      
—
  
Identifiable assets
    
99,566
      
38,066
      
11,025
      
4,228
      
46,247
  
Capital expenditures, net of disposals
  
267
    
214
    
51
    
2
    
—
  
15

13.
FAIR VALUE MEASUREMENTS

Recurring Fair Value Measurements

The following table presents the Company’s assets that are measured at fair value on a recurring basis based on the three-level valuation hierarchy (in thousands):

Assets
  
June 30,
  2024
    
September 30,
2023
  
Level 1 Investment in Rubicon at fair value
  
$
831
    

1,573
  
 
On August 19, 2022, the Company acquired 1,108,000 shares of the common stock, par value $0.001 per share, of Rubicon Technology, Inc. (“Rubicon”), at a price per share of $20.00, in a cash tender offer. As of each of June 30, 2024 and September 30, 2023, the Company held 46.6% of the total issued and outstanding shares of Rubicon and reported its investment under the fair value method pursuant to ASC 320. Management determined that it was appropriate to carry its investment in Rubicon at fair value because the investment was traded on the NASDAQ stock exchange through January 2, 2023, began trading on the OTCQB Capital Market on January 3, 2023 and had daily trading activity, the combination of which provide a better indicator of value. The investment in Rubicon is re-measured at the end of each quarter based on the trading price and any change in the value is reported on the income statement as an unrealized gain or loss on marketable securities in other income (expense).

On October 4, 2023, Rubicon announced that it had authorized a cash dividend of $1.10 per share of common stock of Rubicon and set October 16, 2023 as the record date for the distribution. On October 23, 2023, the Company received $1,219 in dividends and recorded a fair value adjustment to its investment in Rubicon of $709, which is included in other income and expense.

The following table sets forth a summary of the changes in the fair value of the Company’s investment in Rubicon, which is measured at fair value on a recurring basis utilizing Level 1 assumptions in its valuation (in thousands):

   
June 30,
2024
    
September 30,
2023
  
Balance beginning of period
  
$
1,573
    
$
2,371
  
Fair value adjustment to Rubicon investment
    
(742
)
    
(798
)
Balance end of period
  
$
831
    
$
1,573
  

The following table presents the Company’s liabilities that are measured at fair value on a recurring basis based on the three-level valuation hierarchy (in thousands):

Contingent earnout liabilities
 
June 30,
2024
    
September 30,
2023
 
Level 1 Contingent earnout liabilities
   $ 2,070     $ —  
Level 3 Contingent earnout liabilities
     1,090       2,330  
Total  
$
3,160
    
$
2,330
  

These liabilities relate to the estimated fair value of earnout payments to former IBS, ViraQuest, ELFS, and Airschott owners for the periods ending June 30, 2024 and September 30, 2023.

On December 1, 2023, in connection with the Purchase Agreement Amendment among Janel Group and the ELFS Sellers described above, the parties agreed to certain modifications fixing the amount of the remaining earnout payments to ELFS in earnout years three and four to $1,078 each year. As a result, the measurement of the earnout liability became a Level 1 fair value measurement based on the present value of the negotiated payments.

On June 5, 2024, the Company completed a business combination whereby it acquired a majority ownership position in Airschott, a non-asset-based freight forwarder and customs broker. As part of the business combination, the Company agreed to purchase the remaining 20% of Airschott stock in three years for deferred consideration of the greater of 20% of 1.25 times the trailing twelve months gross profit of Airschott and $1,200.

The current and non-current portions of the fair value of the contingent earnout liabilities at June 30, 2024 were $1,149 and $2,011, respectively. The current and non-current portions of the fair value of the contingent earnout liabilities at September 30, 2023 were $592 and $1,738, respectively.

16
The following table sets forth a summary of the changes in the fair value of the Company’s contingent earnout liabilities, which are measured at fair value on a recurring basis utilizing Level 1 and Level 3 assumptions in their valuation (in thousands):

   
June 30,
2024
    
September 30,
2023
 
Balance beginning of period
 
$
2,330
    
$
4,580
  
Fair value of contingent consideration recorded in connection with business combinations
    
1,017
      
300
  
Earnout payment     (740 )     (1,693 )
Adjustments to earnout     435       —  
Fair value adjustment of contingent earnout liabilities     118       (857 )
Balance end of period
 
$
3,160
    
$
2,330
  

The Company determined the fair value of the Level 3 contingent earnout liability using forecasted results through the expected earnout periods. The principal inputs to the approach include expectations of the specific business’s revenues in fiscal years 2024 through 2025 using an appropriate discount rate. Given the use of significant inputs that are not observable in the market, the contingent earnout liability is classified within Level 3 of the fair value hierarchy.

14.
LEASES
 
The Company has operating leases for office and warehouse space in certain locations where it conducts business. As of June 30, 2024, the remaining terms of the Company’s operating leases were between one and 116 months, and certain lease agreements contain provisions for future rent increases. Payments due under the lease contracts include the minimum lease payments that the Company is obligated to make under the non-cancelable initial terms of the leases as the renewal terms are at the Company’s option and the Company is not reasonably certain to exercise those renewal options at lease commencement.
 
The components of lease cost for the three- and nine-month periods ended June 30, 2024 and 2023 were as follows (in thousands):

   
Three Months Ended
June 30,
    
Nine Months Ended
June 30,
  

  2024
    
2023
     2024    
2023
  
Operating lease cost
  
$
644
    
$
523
    
$
1,857
    
$
1,540
  
Short-term lease cost
     38       150       125       283  
Total lease cost
  
$
682
    
$
673
    
$
1,982
    
$
1,823
  

Rent expense for the nine months ended June 30, 2024 and 2023 was $1,982 and $1,823, respectively.

Operating lease right of use assets, current portion of operating lease liabilities and long-term operating lease liabilities reported in the condensed consolidated balance sheets for operating leases as of June 30, 2024 were $9,113, $2,445 and $7,034, respectively.

Operating lease right of use assets, current portion of operating lease liabilities and long-term operating lease liabilities reported in the condensed consolidated balance sheets for operating leases as of September 30, 2023 were $7,460, $2,020 and $5,689, respectively.

As of June 30, 2024 and September 30, 2023, the weighted-average remaining lease term and the weighted-average discount rate related to the Company’s operating leases were 5.7 years and 4.46% and 5.9 years and 4.01%, respectively.

17
Future minimum lease payments under non-cancelable operating leases as of June 30, 2024 were as follows (in thousands):
 
2025
  
$
2,906
  
2026
    
2,543
  
2027
    
1,812
  
2028    
1,540
  
2029
    
769
  
Thereafter
     1,656  
Total undiscounted lease payments
    
11,226
  
Less imputed interest
    
(1,747
)
Total lease obligations
  
$
9,479
  

18
ITEM 2.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with our unaudited interim condensed consolidated financial statements and related notes thereto as of and for the three and nine months ended June 30, 2024, which have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”). Amounts presented in this section are in thousands, except share and per share data.

As used throughout this Report, “we,” “us”, “our,” “Janel,” “the Company,” “Registrant” and similar words refer to Janel Corporation and its subsidiaries.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (the “Report”) contains certain statements that are, or may deemed to be, “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and that reflect management’s current expectations with respect to our operations, performance, financial condition, and other developments. These forward – looking statements may generally be identified using the words “may,” “will,” “intends,” “plans,” projects,” “believes,” “should,” “expects,” “predicts,” “anticipates,” “estimates,” and similar expressions or the negative of these terms or other comparable terminology. These statements are necessarily estimates reflecting management’s best judgment based upon current information and involve several risks, uncertainties and assumptions. We caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made, and readers are advised that various factors, including, but not limited to, those set forth elsewhere in this Report, could affect our financial performance and could cause our actual results for future periods to differ materially from those anticipated or projected. While it is impossible to identify all such factors, such factors include, but are not limited to, our strategy of expanding our business through acquisitions of other businesses; we may be required to record a significant charge to earnings related to the impairment of acquired assets; we may fail to realize the expected benefits or strategic objectives of any acquisition, or that we spend resources exploring acquisitions that are not consummated; risks associated with litigation, including contingent auto liability and insurance coverage, and indemnification claims and other unforeseen claims and liabilities that may arise from an acquisition; changes in tax rates, laws or regulations and our acquired companies and subsidiaries’ ability to utilize anticipated tax benefits; the impact of inflation and rising interest rates on our investments, business and operations; conflicts of interest with the minority shareholders of our business; economic and other conditions in the markets in which we operate; we may not have sufficient working capital to continue operations; we may lose customers who are not obligated to long-term contracts to transact with us; instability in the financial markets; changes or developments in U.S. laws or policies; competition from companies with greater financial resources and from companies that operate in areas in which we plan to expand; our dependence on technically skilled employees; impacts from climate change, including the increased focus by third-parties on sustainability issues and our ability to comply therewith; the impact of increases in shipping costs, long lead times, supply shortages and supply changes; competition from parties who sell their businesses to us and from professionals who cease working for us; terrorist attacks and other acts of violence or war; security breaches or cybersecurity attacks; the level of our insurance coverage, including related to product and other liability risks; our compliance with applicable privacy, security and data laws; risks related to the diverse platforms and geographies which host our management information and financial reporting systems; our dependence on the availability of cargo space from third parties; the impact of claims arising from transportation of freight by the carriers with which we contract, including an increase in premium costs; risks related to the classification of owner-operators in the transportation industry; recessions and other economic developments that reduce freight volumes; other events affecting the volume of international trade and international operations; risks arising from our ability to comply with governmental permit and licensing requirements or statutory and regulatory requirements; the impact of seasonal trends and other factors beyond our control on our Logistics business; changes in governmental regulations applicable to our Life Sciences business; the ability of our Life Sciences business to continually produce products that meet high-quality standards such as purity, reproducibility and/or absence of cross-reactivity; the ability of our Life Sciences business to maintain, determine the scope of and defend its and its competitors’ intellectual property rights; the impact of pressures in the life sciences industry to increase the predictability of or reduce healthcare costs; any decrease in the availability, or increase in the cost or supply shortages, of raw materials used by Indco; risks arising from the environmental, health and safety regulations applicable to Indco; the reliance of our Indco business on a single location to manufacture their products; the controlling influence exerted by our officers and directors and one of our stockholders; the unlikelihood that we will issue dividends in the foreseeable future; and risks related to ownership of our common stock, including share price volatility, the lack of a guaranteed continued public trading market for our common stock, our ability to issue shares of preferred stock with greater rights than our common stock and costs related to maintaining our status as a public company; and such other factors that may be identified from time to time in our Securities and Exchange Commission (“SEC”) filings. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual outcomes may vary materially from those projected. You should not place undue reliance on any of our forward-looking statements which speak only as of the date they are made. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. For a more detailed discussion of these factors, see our periodic reports filed with the SEC, including our most recent Annual Report on Form 10-K for the fiscal year ended September 30, 2023.

19
OVERVIEW

Janel Corporation ("Janel," the "Company," or the "Registrant") is a holding company with subsidiaries in three business segments: Logistics, Life Sciences and Manufacturing. The Company strives to create shareholder value primarily through three strategic priorities: supporting its businesses’ efforts to make investments and to build long-term profits; allocating Janel's capital at high risk-adjusted rates of return; and attracting and retaining exceptional talent.

Management at the Janel holding company focuses on significant capital allocation decisions, corporate governance and supporting Janel’s subsidiaries where appropriate. Janel expects to grow through its subsidiaries’ organic growth and by completing acquisitions. We plan to either acquire businesses within our existing segments or expand our portfolio into new strategic segments. Our acquisition strategy focuses on reasonably priced companies with strong and capable management teams, attractive existing business economics and stable and predictable earnings power.

Logistics

The Company’s Logistics segment is comprised of several wholly-owned subsidiaries. The Logistics segment is a non-asset based, full-service provider of cargo transportation logistics management services, including freight forwarding via air, ocean and land-based carriers; customs brokerage services; warehousing and distribution services; trucking and other value-added logistics services. In addition to these revenue streams, the Company earns accessorial revenues in connection with its core services. Accessorial revenues include, but are not limited to, fuel service charges, wait time fees, hazardous cargo fees, labor charges, handling, cartage, bonding and additional labor charges.

On June 5, 2024, the Company completed a business combination whereby it acquired a majority ownership position in Airschott, a non-asset-based freight forwarder and customs broker.  At closing, the Company purchased 80% of the outstanding stock of Airschott.  The Company also agreed to purchase the remaining 20% of Airschott stock in three years.

Life Sciences

The Company’s Life Sciences segment is comprised of several wholly-owned subsidiaries. The Company’s Life Sciences segment manufactures and distributes antibodies, research and diagnostic reagents, and provides custom services, for academic, non-profit and commercial customers.

On November 1, 2022, the Company completed a business combination whereby it acquired all of the outstanding stock of ImmunoBioScience Corporation, which we include in our Life Sciences segment.

On March 2, 2023, the Company completed a business combination whereby it acquired all of the outstanding stock of Stephen Hall, PhD Ltd., which we include in our Life Sciences segment.

On May 22, 2023, the Company acquired all the rights, title and interests to a royalty agreement for certain antibody products, which we include in our Life Sciences segment.

On February 1, 2024, the Company completed a business combination whereby it acquired all of the outstanding stock of ViraQuest Inc., which we include in our Life Sciences segment.

Manufacturing

The Company’s Manufacturing segment is comprised of Indco, Inc. (“Indco”). Indco is a majority-owned subsidiary of the Company that manufactures and distributes mixing equipment and apparatus for specific applications within various industries. Indco’s customer base is comprised of small- to mid-sized businesses as well as other larger customers for which Indco fulfills repetitive production orders.

20
Investment in Marketable Securities - Rubicon

On August 19, 2022, the Company acquired 1,108,000 shares of the common stock, par value $0.001 per share, of Rubicon Technology, Inc. (“Rubicon”), at a price per share of $20.00, in a cash tender offer made pursuant to the Stock Purchase and Sale Agreement, dated July 1, 2022, between the Company and Rubicon (the “Rubicon Purchase Agreement”). Pursuant to the terms of the Rubicon Purchase Agreement, the acquired shares represented 45.0% of Rubicon’s issued and outstanding shares of common stock as of August 3, 2022, as reported in Rubicon’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2022, filed with the SEC on August 12, 2022. The Company owned approximately 46.6% of Rubicon’s total issued and outstanding shares of common stock as of June 30, 2024 and September 30, 2023.
 
Rubicon is an advanced materials provider specializing in monocrystalline sapphire for applications in optical and industrial systems. The purpose of our investment in Rubicon is for Janel to acquire a significant ownership interest in Rubicon, together with representation on Rubicon’s board, in an attempt to (i) restructure the Rubicon business to achieve profitability and (ii) assist Rubicon in utilizing its net operating loss carry-forward assets. Although we are optimistic about our investment in Rubicon, our investment involves risks and uncertainties that are beyond our control.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Our Condensed Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles in the United States. These generally accepted accounting principles require management to make estimates and assumptions that affect the reported amounts of assets, liabilities, net sales and expenses during the reporting period.

Our senior management has reviewed the critical accounting policies and estimates with the Audit Committee of our board of directors. For a description of the Company’s critical accounting policies and estimates, refer to “Part II—Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Estimates” in our Annual Report on Form 10-K filed with the SEC on December 8, 2023. Critical accounting policies are those that are most important to the portrayal of our financial condition, results of operations and cash flows and require management’s most difficult, subjective and complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. If actual results were to differ significantly from estimates made, the reported results could be materially affected. There were no significant changes to our critical accounting policies during the nine months ended June 30, 2024.

NON-GAAP FINANCIAL MEASURES

While we prepare our financial statements in accordance with U.S. GAAP, we also utilize and present certain financial measures, in particular adjusted operating income, which is not based on or included in U.S. GAAP (we refer to these as “non-GAAP financial measures”).

Organic Growth

Our non-GAAP financial measure of organic growth represents revenue growth excluding revenues from acquisitions within the preceding 12 months. The organic growth presentation provides useful period-to-period comparison of revenue results as it excludes revenues from acquisitions that would not be included in the comparable prior period.

Adjusted Operating Income

As a result of our acquisition strategy, our net income includes material non-cash charges relating to the amortization of customer-related intangible assets in the ordinary course of business as well as other intangible assets acquired in our acquisitions. Although these charges may increase as we complete more acquisitions, we believe we will be growing the value of our intangible assets such as customer relationships. Because these charges are not indicative of our operations, we believe that adjusted operating income is a useful financial measure for investors because it eliminates the effect of these non-cash costs and provides an important metric for our business that is more representative of the actual results of our operations.

Adjusted operating income (which excludes the non-cash impact of amortization of intangible assets, stock-based compensation and cost recognized on the sale of acquired inventory valuation) is used by management as a supplemental performance measure to assess our business’s ability to generate cash and economic returns.

Adjusted operating income is a non-GAAP measure of income and does not include the effects of preferred stock dividends, interest and taxes.

21
We believe that organic growth and adjusted operating income provide useful information in understanding and evaluating our operating results in the same manner as management. However, organic growth and adjusted operating income are not financial measures calculated in accordance with U.S. GAAP and should not be considered as a substitute for total revenues, operating income or any other operating performance measures calculated in accordance with U.S. GAAP. Using these non-GAAP financial measures to analyze our business has material limitations because the calculations are based on the subjective determination of management regarding the nature and classification of events and circumstances that users of the financial statements may find significant.

In addition, although other companies may report measures titled organic growth, adjusted operating income or similar measures, such non-GAAP financial measures may be calculated differently from how we calculate our non-GAAP financial measures, which reduces their overall usefulness as comparative measures. Because of these limitations, you should consider organic growth and adjusted operating income alongside other financial performance measures, including total revenues, operating income and our other financial results presented in accordance with U.S. GAAP.

Results of Operations – Janel Corporation - Three and Nine Months Ended June 30, 2024 and 2023

Our results of operations and period-over-period changes are discussed in the following section. The tables and discussion should be read in conjunction with the accompanying Condensed Consolidated Financial Statements and the notes thereto.

Our consolidated results of operations are as follows:

   
Three Months Ended
June 30,
    
Nine Months Ended
June 30,
  
(in thousands)
  
2024
    
2023
    
2024
    
2023
  
Revenues
  
$
46,724
    
$
42,557
    
$
129,881
    
$
144,979
  
Forwarding expenses and cost of revenues
    
31,633
      
28,898
      
86,822
      
102,654
  
Gross profit
    
15,091
      
13,659
      
43,059
      
42,325
  
Total costs and expenses
    
13,913
      
13,472
      
40,299
      
39,854
  
Income from operations
    
1,178
      
187
      
2,760
      
2,471
  
Net income (loss)
    
(191
)
    
(430
)
    
304
      
148
  
Adjusted operating income
  
$
1,897
    
$
876
    
$
4,873
    
$
4,569
  

Consolidated revenues for the three months ended June 30, 2024 were $46,724, which was $4,167 or 9.8% higher than the prior year period. Consolidated revenues for the nine months ended June 30, 2024 were $129,881, which was $15,098 or 10.4% lower than the prior year period. Revenues increased for the three months ended June 30, 2024 primarily due to a recent increase in freight rates and increased project business in the quarter. Revenues decreased for the nine months ended June 30, 2024 primarily due to a reduction in transportation rates over prior year as lower freight demand aligned more closely with global transportation capacity.

Income from operations for the three months ended June 30, 2024 was $1,178 compared with $187 in the prior year period. Income from operations for the nine months ended June 30, 2024 was $2,760 compared with $2,471 in the prior year period. The increase for both the three and nine months ended June 30, 2024 resulted from greater revenues in the applicable recently completed period from product demand at Manufacturing as well as product mix improvements at Life Sciences.

Net loss for the three months ended June 30, 2024 totaled $191 or ($0.16) per diluted share, compared to net loss of $430 or ($0.36) per diluted share for the three months ended June 30, 2023. Net income for the nine months ended June 30, 2024 totaled $304 or $0.25 per diluted share, compared to net income of $148 or $0.12 per diluted share for the nine months ended June 30, 2023. The change in net income (loss) for the three and nine months ended June 30, 2024 was largely due to greater revenues in the applicable recently completed period from product demand at Manufacturing, and product mix improvements at Life Sciences, which was partially offset by a fair value adjustment to the mandatorily redeemable non-controlling interest.

Adjusted operating income for the three months ended June 30, 2024 increased to $1,897 versus $876 in the prior year period. Adjusted operating income for the nine months ended June 30, 2024 increased to $4,873 versus $4,569 in the prior year period. The increase for the three months ended June 30, 2024 was primarily the result of higher revenues and profits across all segments. The increase for the nine months ended June 30, 2024 related to higher revenues and profits in the Life Sciences and Manufacturing segments.

22
The following table sets forth a reconciliation of operating income to adjusted operating income:

   
Three Months Ended
June 30,
    
Nine Months Ended
June 30,
  
(in thousands)
  
2024
    
2023
    
2024
    
2023
  
Income from operations
  
$
1,178
    
$
187
    
$
2,760
    
$
2,471
  
Amortization of intangible assets
    
555
      
524
      
1,635
      
1,593
  
Stock-based compensation
    
71
      
62
      
214
      
185
  
Cost recognized on sale of acquired inventory
    
93
      
103
      
264
      
320
  
Adjusted operating income
  
$
1,897
    
$
876
    
$
4,873
    
$
4,569
  

Results of Operations – Logistics – Three and Nine Months Ended June 30, 2024 and 2023

Our Logistics business helps its clients move and manage freight efficiently to reduce inventories and to increase supply chain speed and reliability. Key services include arrangement of freight forwarding by air, ocean and ground, customs entry filing, warehousing, cargo insurance procurement, logistics planning, product repackaging and online shipment tracking.

   
Three Months Ended
June 30,
    
Nine Months Ended
June 30,
  
   
2024
    
2023
    
2024
    
2023
  
(in thousands)
                        
Revenues
  
$
40,677
    
$
37,484
    
$
111,991
    
$
129,162
  
Forwarding expenses
    
29,725
      
27,241
      
81,232
      
97,339
  
Gross profit
    
10,952
      
10,243
      
30,759
      
31,823
  
Gross profit margin
    
26.9
%
    
27.3
%
    
27.5
%
    
24.6
%
Selling, general and administrative expenses
    
9,444
      
9,629
      
27,186
      
27,891
  
Income from operations
  
$
1,508
    
$
614
    
$
3,573
    
$
3,932
  

Revenues

Total revenues for the three months ended June 30, 2024 was $40,677 as compared to $37,484 for the three months ended June 30, 2023, an increase of $3,193, or 8.5%. Total revenues for the nine months ended June 30, 2024 was $111,991 as compared to $129,162 for the nine months ended June 30, 2023, a decrease of $17,171 or 13.3%. Revenues increased for the three months ended June 30, 2024 primarily due to a recent increase in freight rates and increased project business during the quarter. Revenues decreased for the nine months ended June 30, 2024 primarily due to a reduction in transportation rates over the prior year period as lower freight demand aligned more closely with global transportation capacity. Organic growth for the three months ended June 30, 2024 was similar to the overall growth in the prior year period as the acquisition of Airschott on June 5, 2024 did not contribute a material amount to the quarter. 

Gross Profit

Gross profit for the three months ended June 30, 2024 was $10,952, an increase of $709, or 6.9%, as compared to $10,243 for the three months ended June 30, 2023. Gross profit margin as a percentage of revenues decreased to 26.9% for the three months ended June 30, 2024, compared to 27.3% for the prior year period, primarily due to the impact of increased rate prices on forwarding expenses.

Gross profit for the nine months ended June 30, 2024 was $30,759, a decrease of $1,064, or 3.3%, as compared to $31,823 for the nine months ended June 30, 2023. Gross profit margin as a percentage of revenue increased to 27.5% compared to 24.6% for the prior year period, primarily due to the impact of lower freight prices on forwarding expenses.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the three months ended June 30, 2024 were $9,444, as compared to $9,629 for the three months ended June 30, 2023. This decrease of $185, or 1.9%, was mainly due to decreases across several selling, general and administrative categories, largely offset by an increase in bad debt expense. Selling, general and administrative expenses as a percentage of revenue were 23.2% and 25.7% for the three months ended June 30, 2024 and 2023, respectively. The decrease in selling, general and administrative expenses as a percentage of revenue was due to the reduction in costs combined with the increase in revenues.

Selling, general and administrative expenses for the nine months ended June 30, 2024 were $27,186, as compared to $27,891 for the nine months ended June 30, 2023. This decrease of $705, or 2.5%, was mainly due to a reduction in various costs including insurance claims and premiums. Selling, general and administrative expenses as a percentage of revenues were 24.3% and 21.6% of revenues for the nine months ended June 30, 2024 and 2023, respectively. The increase in selling, general and administrative expenses as a percentage of revenues for the nine-month period was due to the decrease in revenues for the period.

23
Income from Operations

Income from operations increased to $1,508 for the three months ended June 30, 2024, as compared to income from operations of $614 for the three months ended June 30, 2023, an increase of $894, or 145.6%. Operating margin as a percentage of gross profit for the three months ended June 30, 2024 was 13.8% compared to 6.0% in the prior year period. These increases were the result of an increase in revenues and a decrease in selling, general and administrative expenses.

Income from operations decreased to $3,573 for the nine months ended June 30, 2024, as compared to $3,932 for the nine months ended June 30, 2023, a decrease of $359, or 9.1%. Operating margin as a percentage of gross profit for the nine months ended June 30, 2024 was 11.6% compared to 12.4% in the prior year. These decreases were a result of lower transportation demands.

Results of Operations – Life Sciences – Three and Nine Months Ended June 30, 2024 and 2023

The Company’s Life Sciences segment manufactures and distributes antibodies, research and diagnostic reagents, and provides custom services, for academic, non-profit and commercial customers.

   
Three Months Ended
June 30,
    
Nine Months Ended
June 30,
  
   
2024
    
2023
    
2024
    
2023
  
(in thousands)
                        
Revenues
  
$
3,208
    
$
2,811
    
$
10,213
    
$
8,717
  
Cost of sales
    
521
      
472
      
1,801
      
1,610
  
Cost recognized upon sale of acquired inventory
    
88
      
103
      
264
      
320
  
Gross profit
    
2,599
      
2,236
      
8,148
      
6,787
  
Gross profit margin
    
81.0
%
    
79.5
%
    
79.8
%
    
77.9
%
Selling, general and administrative expenses
    
1,812
      
1,512
      
5,307
      
4,592
  
Income from operations
  
$
787
    
$
724
    
$
2,841
    
$
2,195
  

Revenues

Total revenues were $3,208 and $2,811 for the three months ended June 30, 2024 and 2023, respectively, reflecting an increase of $397, or 14.1%, compared to the prior year period, primarily due to increased sales of research and diagnostic reagents to commercial customers. Organic growth excluding acquisition revenue increased $324, or 11.5%.

Total revenues were $10,213 and $8,717 for the nine months ended June 30, 2024 and 2023, respectively, reflecting an increase of $1,496, or 17.2%, compared to the prior year period, primarily due to increased sales of research and diagnostic reagents to commercial customers. Organic growth excluding acquisition revenue increased $1,209, or 13.9%.

Gross Profit

Gross profit was $2,599 and $2,236 for the three months ended June 30, 2024 and 2023, respectively, an increase of $363, or 16.2%. During the three months ended June 30, 2024 and 2023, gross profit margin was 81.0% and 79.5%, respectively, with higher margins primarily due to product mix improvement.

Gross profit was $8,148 and $6,787 for the nine months ended June 30, 2024 and 2023, respectively, an increase of $1,361 or 20.1%. In the nine months ended June 30, 2024 and 2023, gross profit margin was 79.8% and 77.9%, respectively. Gross profit margin increased primarily due to product mix improvement.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the Life Sciences segment were $1,812 and $1,512 for the three months ended June 30, 2024 and 2023, respectively. Selling, general and administrative expenses were $5,307 and $4,592 for the nine months ended June 30, 2024 and 2023, respectively. The year-over-year increases for both periods were largely due to additional expenses from acquired businesses  and increased expenses supporting organic growth.

24
Income from Operations

Income from operations for the three months ended June 30, 2024 and 2023 was $787 and $724, respectively, an increase of $63, or 8.7%. Income from operations for the nine months ended June 30, 2024 and 2023 was $2,841 and $2,195, respectively, an increase of $646, or 29.4%. Both the three-month and nine-month periods were impacted by higher sales of research and diagnostic reagents and product mix improvements.

Results of Operations - Manufacturing – Three and Nine Months Ended June 30, 2024 and 2023

The Company’s Manufacturing segment reflects its majority-owned Indco subsidiary, which manufactures and distributes industrial mixing equipment.

   
Three Months Ended
June 30,
    
Nine Months Ended
June 30,
  
   
2024
    
2023
    
2024
    
2023
  
(in thousands)
                        
Revenues
  
$
2,839
    
$
2,262
    
$
7,677
    
$
7,100
  
Cost of sales
    
1,299
      
1,082
      
3,525
      
3,385
  
Gross profit
    
1,540
      
1,180
      
4,152
      
3,715
  
Gross profit margin
    
54.2
%
    
52.2
%
    
54.1
%
    
52.3
%
Selling, general and administrative expenses
    
793
      
717
      
2,364
      
2,267
  
Income from operations
  
$
747
    
$
463
    
$
1,788
    
$
1,448
  

Revenues

Total revenues were $2,839 and $2,262 for the three months ended June 30, 2024 and 2023, respectively, an increase of $577, or 25.5%. Total revenues were $7,677 and $7,100 for the nine months ended June 30, 2024 and 2023, respectively, an increase of $577, or 8.1%. The increase in revenues for the three and nine months ended June 30, 2024 reflected an increase in certain sales categories within the business.

Gross Profit

Gross profit was $1,540 and $1,180 for the three months ended June 30, 2024 and 2023, respectively, an increase of $360, or 30.5%. Gross profit margin for the three months ended June 30, 2024 and 2023 was 54.2% and 52.2%, respectively. Gross profit was $4,152 and $3,715 for the nine months ended June 30, 2024 and 2023, respectively, an increase of $437, or 11.8%. Gross profit margin for the nine months ended June 30, 2024 and 2023 was 54.1% and 52.3%, respectively. The year-over-year increase in gross profit margin in both periods was generally due to the increase in both sales volume and sales mix of business.

Selling, General and Administrative Expenses

Selling, general and administrative expenses were $793 and $717 for the three months ended June 30, 2024 and 2023, respectively, an increase of $76, or 10.6%. Selling, general and administrative expenses were $2,364 and $2,267 for the nine months ended June 30, 2024 and 2023, respectively, an increase of $97, or 4.3%. The modest increase in expenses in both periods was reflective of the overall increase in sales volume, the mix of sales and general economic cost increases.

Income from Operations

Income from operations was $747 for the three months ended June 30, 2024 compared to $463 for the three months ended June 30, 2023, representing a 61.3% increase from the prior year period due to increases in sales of certain product categories versus the prior year period combined with effective selling, general and administrative cost management. Income from operations was $1,788 for the nine months ended June 30, 2024 compared to $1,448 for the nine months ended June 30, 2023, representing a 23.5% increase from the prior year period as a result of increased revenues and effective selling, general and administrative cost management.

25
Results of Operations – Corporate and Other – Three and Nine Months Ended June 30, 2024 and 2023

Below is a reconciliation of income from operating segments to net income available to common stockholders.

   
Three Months Ended
June 30,
    
Nine Months Ended
June 30,
  
(in thousands)
  
2024
    
2023
    
2024
    
2023
  
Total income from operations by segment
  
$
3,042
    
$
1,801
    
$
8,202
    
$
7,575
  
Corporate expenses
    
(1,238
)
    
(1,028
)
    
(3,593
)
    
(3,326
)
Amortization of intangible assets
    
(555
)
    
(524
)
    
(1,635
)
    
(1,593
)
Stock-based compensation
    
(71
)
    
(62
)
    
(214
)
    
(185
)
Total corporate expenses
    
(1,864
)
    
(1,614
)
    
(5,442
)
    
(5,104
)
Interest expense
    
(589
)
    
(528
)
    
(1,663
)
    
(1,476
)
Fair value adjustments to Rubicon investment (net of dividends)
    
(95
)
    
(269
)
    
481
      
(779
)
Fair value adjustments of contingent earnout liabilities
    
(88
)
    
—
      
(483
)
    
—
  
Gain on extinguishment
    
—
      
—
      
21
      
—
  
Change in fair value of mandatorily redeemable non-controlling interest
    
(254
)
    
—
      
(400
)
    
—
  
Net income (loss) before taxes
    
152
      
(610
)
    
716
      
216
  
Income tax benefit (expense)
    
(343
)
    
180
      
(412
)
    
(68
)
Net income (loss)
    
(191
)
    
(430
)
    
304
      
148
  
Preferred stock dividends
    
(85
)
    
(70
)
    
(242
)
    
(212
)
Net income (loss) Available to Common Stockholders
  
$
(276
)
  
$
(500
)
  
$
62
    
$
(64
)

Total Corporate Expenses

Total Corporate expenses, which include amortization of intangible assets, stock-based compensation and merger and acquisition expenses, increased by $210, or 20.4%, to $1,238 in the three months ended June 30, 2024 as compared to $1,028 for the three months ended June 30, 2023. Total Corporate expenses increased by $267, or 8.0%, to $3,593 for the nine months ended June 30, 2024 as compared to $3,326 for the nine months ended June 30, 2023. The increase in both periods was due primarily to higher stock-based compensation related to more issuances of stock options, higher legal-related professional expense, and increased merger and acquisition expenses. We incur merger and acquisition deal-related expenses and intangible amortization at the Corporate level rather than at the segment level.

Interest Expense

Interest expense for the consolidated company increased $61, or 11.6%, to $589 for the three months ended June 30, 2024 from $528 for the three months ended June 30, 2023. Interest expense for the consolidated company increased by $187, or 12.7%, to $1,663 for the nine months ended June 30, 2024 from $1,476 for the nine months ended June 30, 2023. The increase in both periods was primarily due to higher interest rates partially offset by lower average debt balances.

Income Tax Expense

On a consolidated basis, the Company recorded an income tax expense of $343 for the three months ended June 30, 2024, as compared to an income tax benefit of $181 for the three months ended June 30, 2023. On a consolidated basis, the Company recorded an income tax expense of $412 for the nine months ended June 30, 2024, as compared to an income tax expense of $68 for the nine months ended June 30, 2023.

Preferred Stock Dividends

Preferred stock dividends include any dividends accrued but not paid on the Company’s Series C Cumulative Preferred Stock (the “Series C Preferred Stock”). For the three months ended June 30, 2024 and 2023, preferred stock dividends were $85 and $70, respectively, representing an increase of $15, or 21.4%. For the nine months ended June 30, 2024 and 2023, preferred stock dividends were $242 and $212, respectively, representing an increase of $30, or 14.2%. The increase in preferred stock dividends in both periods was the result of the increase in the dividend rate of the Series C Stock by 1% on January 1, 2024. Such rate is set to increase on each January 1 thereafter for four years to a maximum rate of 9%. The dividend rate of the Series C Stock as of each of June 30, 2024 and September 30, 2023 was 6% and 5%, respectively.

Net Income (Loss)

Net loss was $191, or ($0.16) per diluted share, for the three months ended June 30, 2024 compared to net loss of $430 or ($0.36) per diluted share, for the three months ended June 30, 2023. The change in net loss for the three months ended June 30, 2024 was largely due to stronger revenues and profits across all segments.

26
Net income was $304, or 0.25 per diluted share, for the nine months ended June 30, 2024 compared to net income of $148, or $0.12 per diluted share, for the nine months ended June 30, 2023. The increase in net income for the nine months ended June 30, 2024 was largely due to stronger revenues and profits in the Life Sciences and Manufacturing segments.

Net Income (Loss) Available to Common Stockholders

Net loss available to holders of Common Stock was $276, or ($0.23) per diluted share, for the three months ended June 30, 2024 compared to net loss available to holders of Common Stock of $500, or ($0.42) per diluted share, for the three months ended June 30, 2023. Net income available to holders of Common Stock was $62, or $0.05 per diluted share, for the nine months ended June 30, 2024 compared to net loss available to holders of Common Stock of $64, or ($0.05) per diluted share, for the nine months ended June 30, 2023. The decrease in net loss available to common stockholders for the three months ended June 30, 2024 was the result of an increase in income across all segments. The increase in net income available to common stockholders for the nine months ended June 30, 2024 was also the result of an increase in income across all segments.

LIQUIDITY AND CAPITAL RESOURCES

General

Our ability to satisfy liquidity requirements—including meeting debt obligations and funding working capital, day-to-day operating expenses, and capital expenditures—depends upon future performance, which is subject to general economic conditions, competition and other factors, some of which are beyond our control. Our Logistics segment depends on commercial credit facilities to fund day-to-day operations as there is a difference between the timing of collection cycles and the timing of payments to vendors.

As a customs broker, our Logistics segment makes significant cash advances for a select group of our credit-worthy customers. These cash advances are for customer obligations such as the payment of duties and taxes to customs authorities primarily in the United States. Increases in duty rates could result in increases in the amounts we advance on behalf of our customers. Cash advances are a “pass through” and are not recorded as a component of revenues and expenses. The billings of such advances to customers are accounted for as a direct increase in accounts receivable from the customer and a corresponding increase in accounts payable to governmental customs authorities. These “pass through” billings can influence our traditional credit collection metrics.

For customers that meet certain criteria, we have agreed to extend payment terms beyond our customary terms. Management believes that it has established effective credit control procedures and has historically experienced relatively insignificant collection problems. Our subsidiaries depend on commercial credit facilities to fund day-to-day operations as there is a difference between the timing of collection cycles and the timing of payments to vendors. Generally, we do not make significant capital expenditures.

Our cash flow performance for the 2024 fiscal year may not necessarily be indicative of future cash flow performance.

Cash flows from operating activities

Net cash provided by operating activities was $6,354 for the nine months ended June 30, 2024, versus $11,056 provided by operating activities for the nine months ended June 30, 2023. The decrease in cash provided by operations for the nine months ended June 30, 2024 compared to the prior year period was driven principally by a lower net working capital benefit at our Logistics segment.

Cash flows from investing activities

Net cash used in investing activities totaled $5,193 for the nine months ended June 30, 2024, versus $6,361 for the nine months ended June 30, 2023. We used $3,795 for the acquisition of two businesses, $740 in earnout payments to the former owners of ELFS and IBS, and $658 for the acquisition of property and equipment for the nine months ended June 30, 2024, compared to $4,401 for the acquisition of two businesses, $1,693 in earnout payment to the former owners of ELFS, and $267 for the acquisition of property and equipment for the nine months ended June 30, 2023.

Cash flows from financing activities

Net cash provided by financing activities was $318 for the nine months ended June 30, 2024, versus net cash used in financing activities of $8,513 for the nine months ended June 30, 2023. Net cash provided in financing activities for the nine months ended June 30, 2024 included repayment of funds from our lines of credit, repayment of funds from our term loan and repayment of subordinated promissory notes. Net cash provided financing activities for the nine months ended June 30, 2023 primarily included repayment of funds from our lines of credit and repayment of term loans.

27
Off-Balance Sheet Arrangements

As of June 30, 2024, we had no off-balance sheet arrangements or obligations.

ITEM 4.
CONTROLS AND PROCEDURES

The Company maintains disclosure controls and procedures designed to ensure that information required to be disclosed in reports filed under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the specified time periods, and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of June 30, 2024, the end of the period covered by this Quarterly Report on Form 10-Q.  Consistent with guidance issued by the SEC that an assessment of internal controls over financial reporting of a recently acquired business may be omitted from management’s evaluation of disclosure controls and procedures, management is excluding an assessment of such internal controls of ViraQuest and Airschott from its evaluation of the effectiveness of the Company’s disclosure controls and procedures. ViraQuest, which the Company acquired on February 1, 2024, constituted approximately 1 percent of the Company’s total assets and 4 percent of income before income taxes of the Company as of and for the quarter ended March 31, 2024. Airschott, which the Company acquired on June 5, 2024, constituted approximately 2 percent of the Logistics segment's total assets and a 4 percent of income before income taxes of the Logistics segment as of and for the quarter ended June 30, 2024. Based on this evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that as of the end of such period, the Company’s disclosure controls and procedures were effective.
 
As referenced above, the Company acquired ViraQuest on February 1, 2024 and Airschott on June 5, 2024. The Company is in the process of reviewing the internal control structure of ViraQuest and Airschott and, if necessary, will make appropriate changes as it integrates ViraQuest and Airschott into the Company’s overall internal control over financial reporting process.  Other than as described above, there have been no changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended June 30, 2024 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

28
PART II - OTHER INFORMATION

ITEM 1.
LEGAL PROCEEDINGS

Janel is occasionally subject to claims and lawsuits which typically arise in the normal course of business. While the outcome of these claims cannot be predicted with certainty, management does not believe that the outcome of any of these legal matters will have a material adverse effect on the Company’s business, results of operations, financial condition or cash flows.

ITEM 1A.
RISK FACTORS

For a discussion of the Company’s potential risks or uncertainties, please see “Part I—Item 1A—Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended September 30, 2023. There have been no material changes to the risk factors disclosed in Part I—Item 1A of the Company’s 2023 Annual Report.

ITEM 2.
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

There were no unregistered sales of equity securities during the nine months ended June 30, 2024. In addition, there were no shares of Common Stock purchased by us during the nine months ended June 30, 2024.

ITEM 6.
EXHIBIT INDEX

Consent, Joinder and Seventh Amendment to Amended and Restated Loan and Security Agreement, dated as of June 5, 2024, by and among Santander Bank, N.A., as lender, Janel Group, Inc., Expedited Logistics and Freight Services, LLC, ELFS Brokerage LLC, Janel Corporation, Expedited Logistics and Freight Services, LLC and Airschott, Inc. (filed herewith)
Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer (filed herewith)
Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer (filed herewith)
Section 1350 Certification of Principal Executive Officer (filed herewith)
Section 1350 Certification of Chief Financial Officer (filed herewith)
101
Interactive data files providing financial information from the Company’s Quarterly Report on Form 10-Q for the three and nine months ended June 30, 2024 and 2023 in Inline XBRL (eXtensible Business Reporting Language) pursuant to Rule 405 of Regulation S-T: (i) Condensed Consolidated Balance Sheets as of June 30, 2024 and September 30, 2023, (ii) Condensed Consolidated Statements of Operations for the three and nine months ended June 30, 2024 and 2023, (iii) Condensed Consolidated Statement of Changes in Stockholders’ Equity for the three and nine months June 30, 2024 and 2023, (iv) Condensed Consolidated Statements of Cash Flows for the nine months ended June 30, 2024 and 2023, and (v) Notes to Condensed Consolidated Financial Statements.
104
Cover Page Interactive Data File (formatted as Inline XBRL and contained in the Interactive Data Files submitted as Exhibit 101) (filed herewith)

29
SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Dated: August 2, 2024
JANEL CORPORATION
 
Registrant
   
 
/s/ Darren C. Seirer
 
Darren C. Seirer
 
Chairman, President and Chief Executive Officer
 
(Principal Executive Officer)
   
Dated: August 2, 2024
JANEL CORPORATION
 
Registrant
   
 
/s/ Joseph R. Ferrara
 
Joseph R. Ferrara
 
Chief Financial Officer, Treasurer and Secretary


30
Exhibit 10.1

CONSENT, JOINDER AND SEVENTH AMENDMENT TO
AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
 
This CONSENT, JOINDER AND SEVENTH AMENDMENT TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (this “Seventh Amendment”) is made as of this 4th day of June, 2024, by and among:
 
SANTANDER BANK, N.A., a national bank having a place of business at 28 State Street, Boston, Massachusetts 02109 (the “Lender”);
 
JANEL GROUP, INC., a New York corporation (“Janel”), EXPEDITED LOGISTICS AND FREIGHT SERVICES, LLC, a Texas limited liability company (“ELFS”), ELFS BROKERAGE LLC, a Texas limited liability company (“ELFS Brokerage”, and together with Janel, ELFS, and ELFS Brokerage, individually and collectively, and jointly and severally referred to herein as “Borrower”);
 
JANEL CORPORATION, a Nevada corporation (“Parent”) and EXPEDITED LOGISTICS AND FREIGHT SERVICES, LLC, an Oklahoma limited liability company (“ELFS OK, and together with Parent, each, a “Loan Party Obligor” and collectively, the “Loan Party Obligors”); and
 
AIRSCHOTT, INC., a Virginia corporation (the “New Borrower”),
 
in consideration of the mutual covenants herein contained and benefits to be derived herefrom.
 
W I T N E S S E T H:
 
WHEREAS, the Borrower and the Loan Party Obligors and the Lender entered into that certain Amended and Restated Loan and Security Agreement dated as of September 21, 2021 (together with any further modifications, amendments, and restatements thereof, the “Agreement”);
 
WHEREAS, the Borrower and the Loan Party Obligors intend to complete the Airschott Acquisition (as defined below), pursuant to which, among other things, New Borrower shall become a Subsidiary of the Borrower, and, in order to complete such acquisition, the Borrower and the Loan Party Obligors have requested that the Lender modify and amend certain terms and conditions of the Agreement;
 
WHEREAS, in connection therewith, among other things, the New Borrower desires to become a party to and to be bound by the terms of the Agreement and the other Loan Documents and to become a Loan Party Obligor (as a Borrower) in the same capacity and to the same extent as the existing Loan Party Obligors thereunder and, in connection therewith, the parties desire to amend the Agreement as set forth herein; and
 
WHEREAS, the Lender has agreed to modify and amend certain terms and conditions of the Agreement, all as provided for herein.
 
NOW, THEREFORE, it is hereby agreed among the parties hereto as follows:
 
1.
Capitalized Terms.  All capitalized terms used herein and not otherwise defined shall have the same meaning herein as in the Agreement.
 
2.
Amendments to Agreement.
 

 a.
Schedule B of the Agreement (Definitions) is hereby amended as follows:
 

 i.
By inserting the following new definitions in their correct alphabetical order:
 

 A)
“Airschott” means Airschott, Inc., a Virginia corporation.
 

 B)
“Airschott Acquisition” means collectively, (i) the Airschott Acquisition- Closing Date, and (ii) Airschott Acquistion- Future Closing Date.
 

 C)
“Airschott Acquisition- Closing Date” means, the acquisition, on the Seventh Amendment Effective Date, by Janel of eighty percent (80%) of the outstanding Airschott Stock consisting of the JP Stock and the RJS First Closing Stock, and the satisfaction of the conditions set forth in Section 10 and Section 11 of the Airschott SPA, in accordance with the provisions of this Agreement and the Airschott Acquisition Documentation.
 

 D)
“Airschott Acquisition- Future Closing Date” means, the acquisition, on the Future Closing Date, by Janel of twenty percent (20%) of the remaining outstanding Airschott Stock consisting of the remaining forty (40) shares of the RJS Stock, in accordance with the provisions of this Agreement and the Airschott Acquisition Documentation.
 

 E)
“Airschott Acquisition Documentation” means the Airschott SPA, together with any other documents executed and delivered in connection therewith.
 

 F)
“Airschott Guaranty” means that certain guaranty of the Parent in favor of RJS Seller, dated on or about the Seventh Amendment Effective Date, of the obligations of Janel pursuant to the Airschott Seller Note.
 

 G)
“Airschott Seller Note” means that certain promissory note dated on or about the Seventh Amendment Effective Date made payable by Janel to RJS Seller in the original principal amount of $1,200,000.
 

 H)
“Airschott SPA” means that certain Stock Purchase Agreement, dated as of June 4, 2024 by and among Janel, as “Buyer”, and JP Seller and RJS Seller, collectively as “Sellers”, in effect as of the Seventh Amendment Closing Date.
 

 I)
“Airschott Stock” means the shares of capital stock of Airschott, par value $1.00 per share.
 

 J)
“Future Closing Date” has the meaning given that term in the Airschott SPA.
 

 K)
“Future Closing Payment” has the meaning given that term in the Airschott SPA.
 

 L)
“Future Closing RJS Stock” means forty (40) shares of RJS Stock, constituting twenty percent (20%) of the issued and outstanding shares of Airschott Stock.
 
-2-

 M)
“JP Seller” means Joanne Perlman, Trustee of the Joanne Perlman Revocable Living Trust.
 

 N)
“JP Stock” means all of the shares of Airschott Stock owned by JP Seller, constituting ninety-eight (98) shares of Airschott Stock, equal to forty-nine percent (49%) of the issued and outstanding shares of Airschott Stock.
 

 O)
“RJS First Closing Stock” means Sixty-two (62) shares of RJS Stock, constituting thirty-one percent (31%) of the issued and outstanding shares of Airschott Stock.
 

 P)
“RJS Seller” means Robert J. Schott, Trustee of the Robert J. Schott, Revocable Living Trust.
 

 Q)
“RJS Stock” means all of the shares of Airschott Stock owned by RJS Seller, constituting one hundred and two (102) shares of Airschott Stock, equal to fifty-one percent (51%) of the issued and outstanding shares of Airschott Stock.
 

 R)
“Sellers” collectively, JP Seller and RJS Seller.
 

 S)
“Seller Principals” collectively, Joanne Perlman and Robert J. Schott.
 

 T)
“Seventh Amendment” means that certain Consent, Joinder, and Seventh Amendment to Amended and Restated Loan and Security Agreement dated as of the Seventh Amendment Effective Date by and among the Lender, the Borrower and the Loan Party Obligors.
 

 U)
“Seventh Amendment Effective Date” means June 4, 2024.
 

 ii.
The following definitions in Schedule B are hereby amended as follows:
 

 A)
The definition of “Acquisition Seller Financing” is hereby amended and restated as follows:
 
“Acquisition Seller Financing” means any unsecured Indebtedness incurred in connection with an acquisition made by Parent, or any wholly-owned Subsidiary of Parent, and subordinated on terms and conditions satisfactory to the Lender; provided, however, that the aggregate outstanding principal amount of such Indebtedness shall not exceed $8,500,000 at any time.  For the avoidance of doubt, the aggregate amount of Acquisition Seller Financing (after giving effect to the Airschott Seller Note) as of the Seventh Amendment Effective Date is $6,188,157, as more particularly described on Schedule H to this Agreement.
 

 B)
The definition of “Parent Ordinary Course Guaranty” is hereby amended by adding the following sentence thereto:
 
“For avoidance of doubt, the Airschott Guaranty constitutes a Parent Ordinary Course Guaranty.”
 
-3-

 C)
The definition of “Permitted Acquisition” is hereby amended by amending and restating clause (c) thereof in its entirety as follows:
 
(c) the aggregate consideration for all such acquisitions occurring during any Fiscal Year shall not exceed $4,000,000 (except for Fiscal Year 2024, the aggregate consideration for all such acquisitions occurring during Fiscal Year shall not exceed $4,800,000 in the aggregate);
 

 b.
Section 5.27 of the Agreement (Negative Covenants) is hereby amended as follows:
 

 i.
Subclause (q) is hereby deleted in its entirety and the following substituted in its stead:
 
“(q)          agree, consent, permit or otherwise undertake to amend or otherwise modify any of the terms or provisions of (i) any Loan Party Obligor’s Organic Documents, (ii) the Aves Guaranty, (iii) the ELFS Notes, (iv) the ELFS Acquisition Documentation, (v) the First Merchants Guaranty, (vi) the Airschott Seller Note, (vii) the Airschott Guaranty, (viii) the Airschott Acquisition Documentation, except, in each instance, for such amendments or other modifications required by applicable law or that are not adverse to Lender, and then, only to the extent such amendments or other modifications are fully disclosed in writing to Lender no less than five (5) Business Days prior to being effectuated, or (vi) any Parent Ordinary Course Guaranty.”
 

 ii.
Subclause (t) is hereby deleted in its entirety and the following substituted in its stead:
 
“(t)          make any payment on account of (i) the Atlantic Deferred Purchase Price Payments, the ELFS Notes, the ELFS Earn-Out Payments, or the Airschott Seller Note, or the Future Closing Payment, unless, in each instance, the Restricted Payment Conditions are satisfied, and/or (ii) the Aves Guaranty in violation of the Aves Subordination Agreement; or”
 

 c.
The Disclosure Schedule is hereby amended and restated by the Disclosure Schedule attached hereto.
 
-4-

 d.
Schedule H to the Agreement (Acquisition Seller Financing) is hereby amended by deleting the table contained therein and substituting the following in its stead:
 
 
Obligee
Date of Note/Agreement
  
Outstanding Balance as
of Seventh Amendment Effective Date
  
           
 
Peter Schlesinger
July 23, 2020
  
$
0
  
             
 
David W. Flake
September 21, 2021
  
$
1,448,062
  
             
 
Randall L. Cockrell
September 21, 2021
  
$
1,448,062
  
             
 
Steven R. Lalumandier
September 21, 2021
  
$
643,971
  
             
 
Frederick J. Lalulamdier
September 21, 2021
  
$
1,448,062
  
             
 
Robert J. Schott, Trustee of the Robert J. Schott Revocable Living Trust
June 4, 2024
  
$
1,200,000
  
             
 
 Total:  
$
6,188,157
  

3.
Additional Representations, Warranties and Covenants Regarding Airschott Acquisition.
 

 a.
In addition to the representations, warranties and covenants set forth in Article 5 of the Agreement, the Loan Party Obligors make the following representations, warranties and covenants as of the Seventh Amendment Effective Date with respect to the Airschott Acquisition, which representations, warranties and covenants are made on the terms and conditions set forth in the preamble paragraph of Article 5:
 

 i.
Loan Party Obligors have delivered to Lender a complete and correct copy of the Airschott Acquisition Documents, including all schedules and exhibits thereto.  The execution, delivery and performance of each of the Airschott Acquisition Documents has been duly authorized by all necessary action on the part of Janel.  Each Airschott Acquisition Document is the legal, valid and binding obligation of Janel, enforceable against Janel in accordance with its terms, in each case, except (i) as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting generally the enforcement of creditors’ rights and (ii) the availability of the remedy of specific performance or injunctive or other equitable relief is subject to the discretion of the court before which any proceeding therefor may be brought.  Janel is not in default in the performance or compliance with any provisions thereof.  All representations and warranties made by Janel in the Airschott Acquisition Documents and in the certificates delivered in connection therewith are true and correct in all material respects. To the knowledge of Janel, none of the representations or warranties of Sellers and Seller Principals in the Airschott Acquisition Documents contain any untrue statement of a material fact or omit any fact necessary to make the statements therein not misleading, in any case that could reasonably be expected to result in a Material Adverse Effect.
 

 ii.
No Default or Event of Default exists as of the Seventh Amendment Effective Date or would arise from the consummation of such Airschott Acquisition;
 

 iii.
The business acquired in connection with such Airschott Acquisition is (A) located in the United States, (B) organized under the laws of any state of the United States or the District of Columbia, and (C) Airschott is engaged in the business of non-asset based transportation logistics;
 
-5-

 iv.
After giving effect to (i) the Airschott Acquisition-Closing Date and this Seventh Amendment, Janel will own, directly, 80% of the equity interests Airschott free and clear of all Liens and shall control all of the voting interests or shall otherwise control the governance of Airschott, will have good title to the assets acquired pursuant to the Airschott Acquisition Agreement, free and clear of all Liens other than Permitted Liens, and Lender shall have a first priority Lien in all of the assets of Airschott, subject to Permitted Liens, and (ii) the Airschott Acquisition-Future Closing Date, Janel will own, directly, the remaining 20% of the equity interests Airschott, free and clear of all Liens;
 

 v.
Such Airschott Acquisition has been approved by the board of directors of Airschott and such board of directors has not announced that it will oppose such Airschott Acquisition or has not commenced any action which alleges that such Airschott Acquisition shall violate applicable law;
 

 vi.
The Loan Party Obligors have furnished the Lender with historic financial statements of Airschott, pro forma projected financial statements of Airschott, and such other information as the Lender may reasonably require, all of which shall be reasonably satisfactory to the Lender.
 

 vii.
Contemporaneous with the effectiveness of this Seventh Amendment the Airschott Acquisition-Closing Date shall have been consummated in all material respects, in accordance with all applicable laws and this Agreement and all requisite approvals by Governmental Authorities having jurisdiction over Janel and Airschott and, to Janel’s knowledge, the Seller, with respect to the Airschott Acquisition, have been obtained (including filings or approvals required under the Hart-Scott-Rodino Antitrust Improvements Act), except for any approval the failure to obtain could not reasonably be expected to be material to the interests of the Lender.
 
4.
Consents.  The Loan Party Obligors have requested that the Lender provide the following consents (the “Consents”) related to the Airschott Acquisition, and the Lender has agreed to provide such Consents, but only on the terms and conditions set forth herein:
 

 a.
Airschott Acquisition.  By entering into this Seventh Amendment, the Lender hereby consents to the modification of the definitions of the “Acquisition Seller Financing” and “Permitted Acquisitions as provided herein; provided however, that Loan Party Obligors acknowledge and agree that (i) the Future Closing Payment is subject to the provisions of clause (c) of Permitted Acquisitions with respect to the Fiscal Year in which such payment is made, and (ii) payment of the Future Closing Payment is subject to the satisfaction of the Payment Conditions.  Within five (5) Business Days of the determination of the amount of the Future Closing Payment by Janel and RJS Seller, Janel will provide Lender with calculations with respect thereto and evidence that Janel shall be able to satisfy the Payment Conditions prior to making such payment.
 

 b.
One Time Consent. The foregoing Consents are a one-time Consents and relate solely to the Airschott Acquisition, and shall not be deemed to constitute an agreement by the Lender to consent to or waive any other provision of the Loan Agreement (i) in the future, or (ii) which do not relate to either of the Airschott Acquisition.
 
-6-
5.
Joinder and Assumption of Obligations.  As of the Seventh Amendment Effective Date, the New Borrower hereby acknowledges that it has received and reviewed a copy of the Agreement and the other Loan Documents, and hereby:
 

 a.
joins in the execution of, and becomes a party to, the Agreement and the other Loan Documents as a Loan Party Obligor thereunder as indicated with its signature below;
 

 b.
covenants and agrees to be bound by all covenants, agreements, liabilities and acknowledgments of a Loan Party Obligor under the Agreement and the other Loan Documents as of the date hereof (other than covenants, agreements, liabilities and acknowledgments that relate solely to an earlier date), in each case, with the same force and effect as if such New Borrower was a signatory to the Agreement and the other Loan Documents and was expressly named as a Loan Party Obligor therein;
 

 c.
makes all representations, warranties, and other statements of a Loan Party Obligor under the Agreement and the other Loan Documents, as of the date hereof (other than representations, warranties and other statements that relate solely to an earlier date), in each case, with the same force and effect as if such New Borrower was a signatory to the Agreement and the other Loan Documents and was expressly named as a Loan Party Obligor therein;
 

 d.
assumes and agrees to perform all applicable duties and Obligations of a Loan Party Obligor under the Agreement and the other Loan Documents; and
 

 e.
without limiting the provisions of subparagraph (a) above, New Borrower hereby agrees as follows:
 
To secure the full payment and performance of all of the Obligations, New Borrower hereby assigns to Lender and grants to Lender a continuing security interest in all property of such New Borrower, whether tangible or intangible, real or personal, now or hereafter owned, existing, acquired or arising and wherever now or hereafter located, and whether or not eligible for lending purposes, including: (i) all Accounts (whether or not Eligible Accounts) and all Goods whose sale, lease or other disposition by such New Borrower has given rise to Accounts and have been returned to, or repossessed or stopped in transit by, such New Borrower; (ii) all Chattel Paper (including Electronic Chattel Paper), Instruments, Documents, and General Intangibles (including all patents, patent applications, trademarks, trademark applications, trade names, trade secrets, goodwill, copyrights, copyright applications, registrations, licenses, software, franchises, customer lists, tax refund claims, claims against carriers and shippers, guarantee claims, contracts rights, payment intangibles, security interests, security deposits and rights to indemnification); (iii) all Inventory; (iv) all Goods (other than Inventory), including Equipment, Farm Products, Health-Care-Insurance Receivables, vehicles, and Fixtures; (v) all Investment Property, including all rights, privileges, authority, and powers of such New Borrower as an owner or as a holder of Pledged Equity, including all economic rights, all control rights, authority and powers, and all status rights of such New Borrower as a member, equity holder or shareholder, as applicable, of each Issuer; (vi) all Deposit Accounts, bank accounts, deposits and cash; (vii) all Letter-of-Credit Rights; (viii) all Commercial Tort Claims; (ix) all Supporting Obligations; (x) any other property of such New Borrower now or hereafter in the possession, custody or control of Lender or any agent or any parent, Affiliate or Subsidiary of Lender or any Participant with Lender in the Loans, for any purpose (whether for safekeeping, deposit, collection, custody, pledge, transmission or otherwise); and (xi) all additions and accessions to, substitutions for, and replacements, products and Proceeds of the foregoing property, including proceeds of all insurance policies insuring the foregoing property, and all of such New Borrower’s books and records relating to any of the foregoing and to such New Borrower’s business.
 
-7-
6.
Representations Regarding the Airschott Acquisition. The Loan Party Obligors hereby warrant and represent to the Lender, as of the Seventh Amendment Effective Date, as follows:
 

 a.
The Loan Party Obligors have delivered to the Lender complete, correct and duly executed copies of the Airschott SPA including all schedules and exhibits thereto.
 

 b.
To the best knowledge of the Loan Party Obligors, representations made by the the Airschott SPA Representations are true and correct in all material respects (or in all respects, if separately qualified by materiality).
 
7.
Ratification of Loan Documents/Waiver.  Except as provided for herein, all terms and conditions of the Agreement or the other Loan Documents remain in full force and effect.  Each Loan Party Obligor each hereby ratifies, confirms, and reaffirms all representations, warranties, and covenants contained therein (including, without limitation, (i) with respect to the Disclosure Schedule, and (ii) representations and warranties set forth in Section 5.11 of the Agreement, each of which the Loan Party Obligors represent and warrant is true and correct as of the date hereof) and acknowledges and agrees that the Obligations, as amended hereby, are and continue to be secured by the Collateral.  Each Loan Party Obligor acknowledges and agrees that each such Loan Party Obligor does not have any offsets, defenses, or counterclaims against the Lender arising out of the Agreement or the other Loan Documents, and to the extent that any such offsets, defenses, or counterclaims arising out of the Agreement or the other Loan Documents may exist, each such Loan Party Obligor hereby WAIVES and RELEASES the Lender therefrom.
 
8.
[Reserved]
 
9.
Conditions to Effectiveness.  This Seventh Amendment shall not be effective until each of the following conditions precedent have been fulfilled to the satisfaction of the Lender:
 

 a.
This Seventh Amendment shall have been duly executed and delivered by the respective parties hereto and, shall be in full force and effect and shall be in form and substance satisfactory to the Lender.
 

 b.
New Borrower and the other Loan Party Obligors shall have executed and delivered such documents and agreements set forth on the closing checklist, attached hereto as Exhibit A, as required by Lender.
 

 c.
The Lender shall have received customary opinions; corporate documents and officers’ certifications; organizational documents; customary evidence of authorization to enter into this Seventh Amendment; and good standing certificates in jurisdictions of formation/organization (to the extent such a certificate exists in the applicable jurisdiction) of the Loan Party Obligors.
 

 d.
The Airschott Acquisition shall occur contemporaneously with the delivery of this Seventh Amendment.
 
-8-
10.
Conditions Subsequent to Effectiveness.  The Loan Parties agree that, in addition to all other terms, conditions, and provisions set forth in this Seventh Amendment, including, without limitation, those set forth in Paragraph 9, the Loan Parties shall satisfy each of the conditions subsequent set forth below on or before the date applicable thereto:
 

 a.
Within ninety (90) days of the Seventh Amendment Effective Date, or such greater period of time as the Lender shall agree to in its reasonable discretion, the Loan Party Obligors shall close any deposit accounts or securities accounts maintained at any other financial institution other than Lender and transfer any balances in such accounts to an account maintained at Lender.
 

 b.
Within thirty (30) days of the Seventh Amendment Effective Date, or such greater period of time as the Lender shall agree to in its reasonable discretion, the Loan Party Obligors shall use commercially reasonable efforts to deliver to Lender a collateral access Agreement for the following location(s):
 

 i.
23901 Cargo Drive Cargo Building 4 Doors 116-119 Dulles, VA 20166 USA.
 

 c.
Within thirty (30) days of the Seventh Amendment Effective Date, or such greater period of time as the Lender shall agree to in its reasonable discretion, the Loan Party Obligors shall deliver the insurance materials, including, without limitation, certificates and endorsements, required by Section 5.14 of the Loan Agreement, with respect to the insurance policies of the New Borrower.
 
11.
Miscellaneous.
 

 a.
This Seventh Amendment may be executed in several counterparts and by each party on a separate counterpart, each of which when so executed and delivered shall be an original, and all of which together shall constitute one instrument.
 

 b.
The provisions of Section 10.15 (Governing Law) and 10.16 (Consent to Jurisdiction; Waiver of Jury Trial) are specifically incorporated herein by reference.
 

 c.
This Seventh Amendment expresses the entire understanding of the parties with respect to the transactions contemplated hereby.  No prior negotiations or discussions shall limit, modify, or otherwise affect the provisions hereof.
 

 d.
Any determination that any provision of this Seventh Amendment or any application hereof is invalid, illegal or unenforceable in any respect and in any instance shall not affect the validity, legality, or enforceability of such provision in any other instance, or the validity, legality or enforceability of any other provisions of this Seventh Amendment.
 

 e.
The Borrower shall pay on demand all costs and expenses of the Lender, including, without limitation, reasonable attorneys’ fees in connection with the preparation, negotiation, execution and delivery of this Seventh Amendment.
 

 f.
The Loan Party Obligors each warrants and represents that such Person has consulted with independent legal counsel of such Person’s selection in connection with this Seventh Amendment and is not relying on any representations or warranties of the Lender or its counsel in entering into this Seventh Amendment.
 
-9-
[remainder of page left intentionally blank]
 
-10-
IN WITNESS WHEREOF, the parties have hereunto caused this Seventh Amendment to be executed and their seals to be hereto affixed as of the date first above written.
 
 
LENDER
   
 
SANTANDER BANK, N.A.
   
 
By:
/s/ Matthew Cunningham
 
Name:
Matthew Cunningham
 
Its:
Vice President

[Signature Page to Seventh Amendment to Amended and Restated Loan and Security Agreement]

 
BORROWERS
     
 
JANEL GROUP, INC., a New York
corporation, as Borrower
     
 
By:
/s/ William J. Lally
 
Name:
William J. Lally
 
Its:
President
     
 
EXPEDITED LOGISTICS AND FREIGHT
SERVICES LLC, a Texas limited liability
company, as Borrower
     
 
By:
/s/ William J. Lally
 
Name:
William J. Lally
 
Its:
Vice President

 
ELFS BROKERAGE LLC, a Texas limited
liability company, as Borrower
     
 
By:
Janel Group, Inc., its Manager
     

  By:
/s/ William J. Lally
  Name:
William J. Lally
  Its:
President
     
 
AIRSCHOTT, INC., a Virginia corporation, as
New Borrower
     
 
By:
/s/ William J. Lally
 
Name:
William J. Lally
 
Its:
Vice President

[Signature Page to Seventh Amendment to Amended and Restated Loan and Security Agreement]

 
LOAN PARTY OBLIGORS
     
 
JANEL CORPORATION, a Nevada
corporation, as a Loan Party Obligor and Term
Loan Borrower
     
 
By:
/s/ Darren. C Seirer
 
Name:
Darren C. Seirer
 
Its:
President
     
 
EXPEDITED LOGISTICS AND FREIGHT
SERVICES LLC, an Oklahoma limited liability
company, as a Loan Party Obligor
     
 
By:
Expedited Logistics and Freight Services
LLC, a Texas limited liability company,
its manager
     
   
By:
/s/ William J. Lally
   
Name:
William J. Lally
   
Its:
Vice President

[Signature Page to Seventh Amendment to Amended and Restated Loan and Security Agreement]


Exhibit 31.1

CERTIFICATION
I, Darren Seirer, certify that:

1.
I have reviewed this Quarterly Report on Form 10-Q of Janel Corporation (the “Registrant”);

2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4.
The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

  (a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


(b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


(c)
Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


(d)
Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5.
The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent function):


(a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and


(b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date: August 2, 2024
/s/ Darren C. Seirer
 
Darren C. Seirer
 
Chairman, President and Chief Executive Officer
 
(Principal Executive Officer)


Exhibit 31.2

CERTIFICATION

I, Joseph R. Ferrara, certify that:

1.
I have reviewed this Quarterly Report on Form 10-Q of Janel Corporation (the “Registrant”);

2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4.
The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

  (a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


(b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


(c)
Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


(d)
Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5.
The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent function):


(a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and


(b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date: August 2, 2024
/s/ Joseph R. Ferrara
 
Joseph R. Ferrara
 
Chief Financial Officer, Treasurer and Secretary


Exhibit 32.1

CERTIFICATION
PURSUANT TO 18 U.S.C. §1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the report on Form 10-Q of Janel Corporation (the “Company”) for the quarter ended June 30, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Darren Seirer, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1.
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2.
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 2, 2024
/s/ Darren C. Seirer
 
Darren C. Seirer
 
Chairman, President and Chief Executive Officer
 
(Principal Executive Officer)

The foregoing certification is being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Section 1350 of Chapter 63 of Title 18 of the United States Code) and is not being filed as part of the Report or as a separate disclosure document.


Exhibit 32.2

CERTIFICATION
PURSUANT TO 18 U.S.C. §1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the report on Form 10-Q of Janel Corporation (the “Company”) for the quarter ended June 30, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Joseph R. Ferrara, Chief Financial Officer, Treasurer and Secretary of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1.
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2.
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 2, 2024
/s/ Joseph R. Ferrara
 
Joseph R. Ferrara
 
Chief Financial Officer, Treasurer and Secretary

The foregoing certification is being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Section 1350 of Chapter 63 of Title 18 of the United States Code) and is not being filed as part of the Report or as a separate disclosure document.


v3.24.2.u1
Document and Entity Information - shares
 9 Months Ended
Jun. 30, 2024
Aug. 02, 2024
Cover [Abstract]    
Document Type 10-Q  
Amendment Flag false  
Document Quarterly Report true  
Document Period End Date Jun. 30, 2024  
Current Fiscal Year End Date --09-30  
Document Fiscal Year Focus 2024  
Document Fiscal Period Focus Q3  
Document Transition Report false  
Entity File Number 333-60608  
Entity Registrant Name JANEL CORP  
Entity Central Index Key 0001133062  
Entity Incorporation, State or Country Code NV  
Entity Tax Identification Number 86-1005291  
Entity Address, Address Line One 80 Eighth Avenue  
Entity Address, City or Town New York  
Entity Address, State or Province NY  
Entity Address, Postal Zip Code 10011  
City Area Code 212  
Local Phone Number 373-5895  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Non-accelerated Filer  
Entity Small Business true  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   1,186,354
v3.24.2.u1
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)
$ in Thousands
Jun. 30, 2024
Sep. 30, 2023
Current Assets:    
Cash $ 3,054 $ 2,461
Accounts receivable, net of allowance for doubtful accounts 32,627 27,518
Inventory, net 4,556 4,850
Prepaid expenses and other current assets 4,477 4,459
Total current assets 44,714 39,288
Property and Equipment, net 5,296 4,922
Other Assets:    
Intangible assets, net 23,830 22,683
Goodwill 23,946 20,317
Restricted cash 250 0
Investment in Rubicon at fair value 831 1,573
Operating lease right of use asset 9,113 7,460
Security deposits and other long-term assets 586 591
Total other assets 58,556 52,624
Total assets 108,566 96,834
Current Liabilities:    
Lines of credit 22,081 19,709
Accounts payable - trade 32,058 25,447
Accrued expenses and other current liabilities 6,973 6,337
Dividends payable 2,271 2,029
Current portion of earnout 1,149 592
Current portion of long-term debt 716 715
Current portion of subordinated promissory notes-related party $ 1,683 $ 1,988
Notes Payable, Current, Related Party, Type [Extensible Enumeration] us-gaap:RelatedPartyMember us-gaap:RelatedPartyMember
Current portion of operating lease liabilities $ 2,445 $ 2,020
Total current liabilities 69,376 58,837
Other Liabilities:    
Long-term debt 4,282 5,784
Long-term portion of earnout 2,011 1,738
Subordinated promissory notes-related party $ 3,790 $ 3,424
Notes Payable, Noncurrent, Related Party, Type [Extensible Enumeration] us-gaap:RelatedPartyMember us-gaap:RelatedPartyMember
Mandatorily redeemable non-controlling interest $ 965 $ 565
Deferred income taxes 1,341 1,341
Long-term operating lease liabilities 7,034 5,689
Other liabilities 529 483
Total other liabilities 19,952 19,024
Total liabilities 89,328 77,861
Stockholders' Equity:    
Common stock, $0.001 par value; 4,500,000 shares authorized, 1,206,354 issued and 1,186,354 outstanding as of June 30, 2024 and September 30, 2023, respectively 1 1
Paid-in capital 17,068 17,107
Common treasury stock, at cost, 20,000 shares (240) (240)
Accumulated earnings 2,409 2,105
Total stockholders' equity 19,238 18,973
Total liabilities and stockholders' equity 108,566 96,834
Series C [Member]    
Stockholders' Equity:    
Series C 30,000 shares authorized and 11,368 shares issued and outstanding at June 30, 2024 and September 30, 2023, liquidation value of $7,955 and $7,713 at June 30, 2024 and September 30, 2023, respectively $ 0 $ 0
v3.24.2.u1
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)
$ in Thousands
Jun. 30, 2024
Sep. 30, 2023
Stockholders' Equity:    
Preferred stock, par value (in dollars per share) $ 0.001 $ 0.001
Preferred stock, shares authorized (in shares) 100,000 100,000
Common stock, par value (in dollars per share) $ 0.001 $ 0.001
Common stock, shares authorized (in shares) 4,500,000 4,500,000
Common stock, shares issued (in shares) 1,206,354 1,206,354
Common stock, shares outstanding (in shares) 1,186,354 1,186,354
Common treasury stock, at cost (in shares) 20,000 20,000
Series C [Member]    
Stockholders' Equity:    
Preferred stock, shares authorized (in shares) 30,000 30,000
Preferred Stock, shares issued (in shares) 11,368 11,368
Preferred stock, shares outstanding (in shares) 11,368 11,368
Preferred stock, liquidation value $ 7,955 $ 7,713
v3.24.2.u1
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS [Abstract]        
Revenues $ 46,724 $ 42,557 $ 129,881 $ 144,979
Forwarding expenses and cost of revenues 31,633 28,898 86,822 102,654
Gross profit 15,091 13,659 43,059 42,325
Cost and Expenses:        
Selling, general and administrative 13,358 12,948 38,664 38,261
Amortization of intangible assets 555 524 1,635 1,593
Total Costs and Expenses 13,913 13,472 40,299 39,854
Income from Operations 1,178 187 2,760 2,471
Other Items:        
Interest expense (589) (528) (1,663) (1,476)
Other expense (437) (269) (381) (779)
Income (Loss) Before Income Taxes 152 (610) 716 216
Income tax benefit (expense) (343) 180 (412) (68)
Net Income (Loss) (191) (430) 304 148
Preferred stock dividends (85) (70) (242) (212)
Net Income (Loss) Available to Common Stockholders $ (276) $ (500) $ 62 $ (64)
Net income (loss) per share        
Basic (in dollars per share) $ (0.16) $ (0.36) $ 0.25 $ 0.12
Diluted (in dollars per share) (0.16) (0.36) 0.25 0.12
Net income (loss) per share attributable to common stockholders:        
Basic (in dollars per share) (0.23) (0.42) 0.05 (0.05)
Diluted (in dollars per share) $ (0.23) $ (0.42) $ 0.05 $ (0.05)
Weighted average number of shares outstanding:        
Basic (in shares) 1,186,400 1,186,400 1,186,400 1,186,400
Diluted (in shares) 1,186,400 1,186,400 1,205,900 1,186,400
v3.24.2.u1
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY - USD ($)
$ in Thousands
Preferred Stock [Member]
Common Stock [Member]
Paid-in Capital [Member]
Common Treasury Stock [Member]
Accumulated Earnings [Member]
Total
Balance at Sep. 30, 2022 $ 0 $ 1 $ 17,184 $ (240) $ 1,382 $ 18,327
Balance (in shares) at Sep. 30, 2022 11,368 1,206,354   20,000    
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Net Income (Loss) $ 0 $ 0 0 $ 0 360 360
Dividends to preferred stockholders 0 0   0 0 (72)
Dividends to preferred stockholders     (72)      
Stock based compensation 0 0 51 0 0 51
Balance at Dec. 31, 2022 $ 0 $ 1 17,163 $ (240) 1,742 18,666
Balance (in shares) at Dec. 31, 2022 11,368 1,206,354   20,000    
Balance at Sep. 30, 2022 $ 0 $ 1 17,184 $ (240) 1,382 18,327
Balance (in shares) at Sep. 30, 2022 11,368 1,206,354   20,000    
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Net Income (Loss)           148
Balance at Jun. 30, 2023 $ 0 $ 1 17,127 $ (240) 1,530 18,418
Balance (in shares) at Jun. 30, 2023 11,368 1,206,354   20,000    
Balance at Dec. 31, 2022 $ 0 $ 1 17,163 $ (240) 1,742 18,666
Balance (in shares) at Dec. 31, 2022 11,368 1,206,354   20,000    
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Net Income (Loss) $ 0 $ 0 0 $ 0 218 218
Dividends to preferred stockholders 0 0   0 0 (70)
Dividends to preferred stockholders     (70)      
Stock based compensation 0 0 53 0 0 53
Balance at Mar. 31, 2023 $ 0 $ 1 17,146 $ (240) 1,960 18,867
Balance (in shares) at Mar. 31, 2023 11,368 1,206,354   20,000    
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Net Income (Loss) $ 0 $ 0 0 $ 0 (430) (430)
Dividends to preferred stockholders 0 0   0 0 (70)
Dividends to preferred stockholders     (70)      
Stock based compensation 0 0 51 0 0 51
Balance at Jun. 30, 2023 $ 0 $ 1 17,127 $ (240) 1,530 18,418
Balance (in shares) at Jun. 30, 2023 11,368 1,206,354   20,000    
Balance at Sep. 30, 2023 $ 0 $ 1 17,107 $ (240) 2,105 18,973
Balance (in shares) at Sep. 30, 2023 11,368 1,206,354   20,000    
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Net Income (Loss) $ 0 $ 0 0 $ 0 276 276
Dividends to preferred stockholders 0 0   0 0 (72)
Dividends to preferred stockholders     (72)      
Stock based compensation 0 0 68 0 0 68
Balance at Dec. 31, 2023 $ 0 $ 1 17,103 $ (240) 2,381 19,245
Balance (in shares) at Dec. 31, 2023 11,368 1,206,354   20,000    
Balance at Sep. 30, 2023 $ 0 $ 1 17,107 $ (240) 2,105 18,973
Balance (in shares) at Sep. 30, 2023 11,368 1,206,354   20,000    
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Net Income (Loss)           304
Balance at Jun. 30, 2024 $ 0 $ 1 17,068 $ (240) 2,409 19,238
Balance (in shares) at Jun. 30, 2024 11,368 1,206,354   20,000    
Balance at Dec. 31, 2023 $ 0 $ 1 17,103 $ (240) 2,381 19,245
Balance (in shares) at Dec. 31, 2023 11,368 1,206,354   20,000    
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Net Income (Loss) $ 0 $ 0 0 $ 0 219 219
Dividends to preferred stockholders 0 0   0 0 (85)
Dividends to preferred stockholders     (85)      
Stock based compensation 0 0 68 0 0 68
Balance at Mar. 31, 2024 $ 0 $ 1 17,086 $ (240) 2,600 19,447
Balance (in shares) at Mar. 31, 2024 11,368 1,206,354   20,000    
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Net Income (Loss) $ 0 $ 0 0 $ 0 (191) (191)
Dividends to preferred stockholders 0 0   0 0 (85)
Dividends to preferred stockholders     (85)      
Stock based compensation 0 0 67 0 0 67
Balance at Jun. 30, 2024 $ 0 $ 1 $ 17,068 $ (240) $ 2,409 $ 19,238
Balance (in shares) at Jun. 30, 2024 11,368 1,206,354   20,000    
v3.24.2.u1
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended 12 Months Ended
Jun. 30, 2024
Dec. 31, 2023
Jun. 30, 2023
Dec. 31, 2022
Jun. 30, 2024
Jun. 30, 2023
Sep. 30, 2023
Cash flows from operating activities:              
Net income $ (191) $ 276 $ (430) $ 360 $ 304 $ 148  
Adjustments to reconcile net income to net cash provided by operating activities:              
Recovery of uncollectible accounts         (71) (292)  
Depreciation         404 373  
Deferred income tax provision         0 (8)  
Amortization of intangible assets 555   524   1,635 1,593  
Amortization of acquired inventory valuation         264 320  
Amortization of loan costs         72 63  
Stock-based compensation         214 185  
Unrealized loss on marketable securities         742 779  
Change in fair value of mandatorily redeemable noncontrolling interest         400 0  
Fair value adjustments of contingent earnout liabilities         553 0  
Gain on extinguishment of debt         (21) 0  
Changes in operating assets and liabilities, net of effects of acquisitions:              
Accounts receivable         (3,292) 27,056  
Inventory         38 (106)  
Prepaid expenses and other current assets         102 (1,151)  
Security deposits and other long-term assets         4 (82)  
Accounts payable and accrued expenses         4,844 (17,996)  
Other liabilities         162 174  
Net cash provided by operating activities         6,354 11,056  
Cash flows from investing activities:              
Acquisition of property and equipment, net of disposals         (658) (267)  
Earnout payment         (740) (1,693)  
Acquisitions, net of cash acquired         (3,795) (4,401)  
Net cash used in investing activities         (5,193) (6,361)  
Cash flows from financing activities:              
Repayments of term loan         (1,573) (1,113)  
Proceeds from (Payments to) Lines of credit, net         2,372 (7,101)  
Repayment of subordinate promissory notes, net         (1,117) (299)  
Net cash used in financing activities         (318) (8,513)  
Net increase (decrease) in cash         843 (3,818)  
Cash at beginning of the period   $ 2,461   $ 6,591 2,461 6,591 $ 6,591
Cash and restricted cash at end of period $ 3,304   $ 2,773   3,304 2,773 $ 2,461
Cash paid during the period for:              
Interest         1,442 1,208  
Income taxes         556 1,300  
Non-cash operating activities:              
Contingent earnout acquisition         64 300  
Due to former owners         740 455  
Non-cash investing activities:              
Airschott subordinated promissory note         1,200 0  
Airschott contingent deferred consideration         952 0  
Non-cash financing activities:              
Dividends declared to preferred stockholders         $ 242 $ 212  
v3.24.2.u1
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
 9 Months Ended
Jun. 30, 2024
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES [Abstract]  
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
1.
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

The accompanying interim unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of Article 8 of Regulation S-X and the instructions to Form 10-Q of the Securities and Exchange Commission. As a result, certain information and footnote disclosures normally included in audited financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. Janel Corporation (the “Company” or “Janel”) believes that the disclosures made are adequate to make the information presented not misleading. The condensed consolidated financial statements reflect all adjustments which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. The results of operations for the periods presented are not necessarily indicative of the results to be expected for a full fiscal year, or any other period. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s Form 10-K as filed with the Securities and Exchange Commission.
 
Business Description

Janel is a holding company with subsidiaries in three business segments: Logistics, Life Sciences and Manufacturing. The Company strives to create shareholder value primarily through three strategic priorities: supporting its businesses’ efforts to make investments and to build long-term profits; allocating Janel’s capital at high risk-adjusted rates of return; and attracting and retaining exceptional talent.

Management at the holding company focuses on significant capital allocation decisions, corporate governance and supporting Janel’s subsidiaries where appropriate. Janel expects to grow through its subsidiaries’ organic growth and by completing acquisitions. We plan to either acquire businesses within our existing segments or expand our portfolio into new strategic segments. Our acquisition strategy focuses on reasonably-priced companies with strong and capable management teams, attractive existing business economics and stable and predictable earnings power.

Restricted Cash

Commencing in the second half of 2024, the Company insures certain risks through a newly formed wholly-owned captive insurance company, Gainesville Insurance Company, Inc. (“Gainesville”). In addition, we also maintain some of our normal, historical insurance policies with third-party insurers. Restricted cash represents deposits held by Gainesville that are required by state insurance regulations to remain in the captive insurance company as cash or cash equivalents. The Company considers all highly liquid investments with an original maturity of three months or less, when purchased, to be cash equivalents.

Revenue and revenue recognition
 

Logistics



Revenues are recognized upon transfer of control of promised services to customers. With respect to its Logistics segment, the Company has determined that, in general, each shipment transaction or service order constitutes a separate contract with the customer. When the Company provides multiple services to a customer, different contracts may be present for different services.



The Company typically satisfies its performance obligations as services are rendered at a point in time. A typical shipment would include services rendered at origin, such as pick-up and delivery to port, freight services from origin to destination port and destination services, such as customs clearance and final delivery. The Company measures the performance of its obligations as services are completed at a point in time during the life of a shipment, including services at origin, freight and destination. The Company fulfills nearly all of its performance obligations within a one- to two-month period.



The Company evaluates whether amounts billed to customers should be reported as gross or net revenues. Generally, revenues are recorded on a gross basis when the Company is acting as principal and is primarily responsible for fulfilling the promise to provide the services, when it has discretion in setting the prices for the services to the customers, and the Company has the ability to direct the use of the services provided by the third party. Revenues are recognized on a net basis when the Company is acting as agent, and we do not have latitude in carrier selection or in establishing rates with the carrier.



In the Logistics segment, the Company disaggregates its revenue by its four primary service categories: Trucking, Ocean, Air, Customs Brokerage and Other. A summary of the Company’s revenues disaggregated by major service lines for the three and nine months ended June 30, 2024 and 2023 is as follows (in thousands):
 
   
Three Months Ended
June 30,
   
Nine Months Ended
June 30,
 
   
2024
    
2023
    
2024
    
2023
  
Service Type
                      
Trucking
  
$
18,689
    
$
19,314
    
$
55,040
    
$
61,671
  
Ocean
     10,443       7,502       25,204       34,908  
Air
   
6,733
      
5,638
      
19,261
      
17,096
  
Customs Brokerage and Other    
4,812
      
5,030
      
12,486
      
15,487
  
Total
  
$
40,677
    
$
37,484
    
$
111,991
    
$
129,162
  


Life Sciences and Manufacturing



Revenues from the Life Sciences segment are derived from the sale of high-quality monoclonal and polyclonal antibodies, diagnostic reagents and diagnostic kits and other immunoreagents for biomedical research and antibody manufacturing. Revenues from the Company’s Manufacturing segment, which is comprised of Indco, a majority-owned subsidiary of the Company that manufactures and distributes mixing equipment and apparatus for specific applications within various industries (“Indco”), are derived from the engineering, manufacture and delivery of specialty mixing equipment and accessories. Revenues for Life Sciences and Manufacturing are recognized when products are shipped and the risk of loss is transferred to the carrier(s) used.
v3.24.2.u1
ACQUISITIONS
 9 Months Ended
Jun. 30, 2024
ACQUISITIONS [Abstract]  
ACQUISITIONS
2.
ACQUISITIONS
 
Fiscal 2024 Acquisitions


Logistics


On June 5, 2024, the Company completed a business combination whereby it acquired a majority ownership position in Airschott, Inc. (“Airschott”), a non-asset-based freight forwarder and customs broker, for an aggregate purchase price of $5,900.  At closing, the Company purchased 80% of the outstanding stock of Airschott for $3,600 in cash, a $1,200 floating-rate seller’s note, and net liabilities assumed of $170.  The Company also agreed to purchase the remaining 20% of Airschott stock in three years for deferred consideration of the greater of 20% of 1.25 times the trailing twelve months gross profit of Airschott and $1,200.  The acquisition was funded by our existing acquisition draw facility with First Merchants Bank (“First Merchants”) and through our existing asset-backed facility with Santander Bank, N.A. (“Santander”). In connection with the combination, the Company recorded an aggregate of $3,500 in goodwill and $2,400 in other identifiable intangibles. Supplemental pro forma information has not been provided as the acquisition did not have a significant impact on Janel’s condensed consolidated results of operations, individually or in aggregate. Airschott was founded in 1977 and is headquartered in Dulles, Virginia. The acquisition of Airschott was completed to expand our service offerings in our Logistics segment.

The Company is still finalizing the valuation of assets acquired, liabilities assumed, and the deferred consideration for Airschott, and, as such, the fair value amounts are preliminary and subject to change. Primary amounts subject to adjustment include, but are not limited to, intangible assets, fair value of accounts receivable or a change in the goodwill balance.

Life Sciences

On February 1, 2024, the Company completed a business combination whereby it acquired all of the outstanding stock of ViraQuest, Inc. (“ViraQuest”), for an aggregate purchase price of $635, net of $29 cash received. At closing, $600 was paid in cash and $64 was recorded as a preliminary earnout consideration. The acquisition was funded with cash provided by operating activities, and the results of operations of ViraQuest are included in Janel’s condensed consolidated results of operations since the date of the acquisition. In connection with the combination, the Company recorded an aggregate of $74 in goodwill and $412 in other identifiable intangibles. Supplemental pro forma information has not been provided as the acquisition did not have a significant impact on Janel’s condensed consolidated results of operations, individually or in aggregate. ViraQuest is a biotechnology custom service provider specializing in adenovirus production services. ViraQuest was founded in 2000 and is headquartered in North Liberty, Iowa. The acquisition of ViraQuest was completed to expand our service offerings in our Life Sciences segment.

The Company is still finalizing the valuation of assets acquired and liabilities assumed for ViraQuest, and, as such, the fair value amounts are preliminary and subject to change. Primary amounts subject to adjustment include, but are not limited to, intangible assets, fair value of accounts receivable or a change in the goodwill balance.

Fiscal 2023 Acquisitions
 
Life Sciences

On November 1, 2022, the Company completed a business combination whereby it acquired all of the outstanding stock of ImmunoBioScience Corporation (“IBS”), for an aggregate purchase price of $3,602, net of $153 cash received.  At closing, $3,000 was paid in cash, $250 was due to the former stockholder of IBS as a deferred acquisition payment upon integration, $300 was recorded as a preliminary earnout consideration (not to exceed $750) and $205 was recorded as a preliminary working capital adjustment. The acquisition was funded with cash provided by normal operations, and the results of operations of IBS are included in Janel’s condensed consolidated results of operations since the date of the acquisition. In connection with the combination, the Company recorded an aggregate of $1,468 in goodwill and $1,680 in other identifiable intangibles. Supplemental pro forma information has not been provided as the acquisition did not have a significant impact on Janel’s condensed consolidated results of operations, individually or in aggregate. IBS is a developer and manufacturer of high-quality reagents used by research and diagnostic customers. IBS was founded in 2007 and is headquartered in Mukilteo, Washington. The acquisition of IBS was completed to expand our product offerings in our Life Sciences segment.

On March 2, 2023, the Company completed a business combination whereby it acquired all of the outstanding stock of Stephen Hall PhD, Ltd. (“SH”) for an aggregate purchase price of $600. At closing, $500 was paid in cash and $100 was due to the former stockholder of SH as a deferred acquisition payment upon integration. The acquisition was funded with cash provided by normal operations, and the results of operations of SH are included in Janel’s condensed consolidated results of operations since the date of the acquisition. In connection with the combination, the Company recorded an aggregate of $181 in goodwill and $202 in other identifiable intangibles. SH is a developer and manufacturer of antibodies and cell culture media for research and diagnostic uses. SH was founded in 2011 and is headquartered in Lafayette, Indiana. The acquisition of SH was completed to expand our product offerings in our Life Sciences segment.

On May 22, 2023, the Company acquired all the rights, title and interests to a royalty agreement for certain antibody products for a purchase price of $500. The Company recorded this acquisition as a royalty asset, which is included in intangible assets in the accompanying condensed consolidated balance sheet (reclassed from Security deposits and other long-term assets in the current period) and will be amortized over the estimated life of ten years.
v3.24.2.u1
INVENTORY
 9 Months Ended
Jun. 30, 2024
INVENTORY [Abstract]  
INVENTORY
3.
INVENTORY
 
Inventories consisted of the following (in thousands):

   
June 30,
2024
    
September 30,
2023
  
Finished goods
  
$
1,998
    
$
2,095
  
Work-in-process
    
800
      
969
  
Raw materials
    
1,789
      
1,811
  
Gross inventory
    
4,587
      
4,875
  
Less – reserve for inventory valuation
    
(31
)
    
(25
)
Inventory net
  
$
4,556
    
$
4,850
  
v3.24.2.u1
INTANGIBLE ASSETS
 9 Months Ended
Jun. 30, 2024
INTANGIBLE ASSETS [Abstract]  
INTANGIBLE ASSETS
4.
INTANGIBLE ASSETS
 
A summary of intangible assets and the estimated useful lives used in the computation of amortization is as follows (in thousands):

   
June 30,
2024
    
September 30,
2023
  
Life
Customer relationships
  
$
27,939
    
$
25,238
  
10-24 Years
Trademarks/names
    
4,541
      
4,559
  
1-20 Years
Trademarks/names
    
541
      
521
  
Indefinite
Other
    
2,007
      
1,929
  
2-22 Years

   
35,028
      
32,247
    
Less: Accumulated Amortization
    
(11,198
)
    
(9,564
)
  
Intangible assets, net
  
$
23,830
    
$
22,683
    

The composition of the intangible assets balance at June 30, 2024 and September 30, 2023 is as follows (in thousands):

   
June 30,
2024
    
September 30,
2023
  
Logistics
  
$
20,543
    
$
18,174
  
Life Sciences     6,785       6,373  
Manufacturing
    
7,700
      
7,700
  

   
35,028
      
32,247
  
Less: Accumulated Amortization
    
(11,198
)
    
(9,564
)
Intangible assets, net
  
$
23,830
    
$
22,683
  

Amortization expense for the nine months ended June 30, 2024 and 2023 was $1,635 and $1,593, respectively.
v3.24.2.u1
GOODWILL
 9 Months Ended
Jun. 30, 2024
GOODWILL [Abstract]  
GOODWILL
5.
GOODWILL
 
The Company’s goodwill carrying amounts relate to acquisitions in the Logistics, Life Sciences and Manufacturing business segments.
The composition of the goodwill balance at June 30, 2024 and September 30, 2023 was as follows (in thousands):
   
June 30,
2024
    
September 30,
2023
  
Logistics
  
$
12,729
    
$
9,175
  
Life Sciences     6,171       6,096  
Manufacturing
    
5,046
      
5,046
  
Total
  
$
23,946
    
$
20,317
  
v3.24.2.u1
NOTES PAYABLE - BANKS
 9 Months Ended
Jun. 30, 2024
NOTES PAYABLE - BANKS [Abstract]  
NOTES PAYABLE - BANKS
6.
NOTES PAYABLE – BANKS
 
(A)
Santander Bank Facility

The wholly-owned subsidiaries that comprise the Company’s Logistics segment (collectively, the “Janel Group Borrowers”), with the Company as a guarantor, have a Loan and Security Agreement (as amended, the “Santander Loan Agreement”) with Santander with respect to a revolving line of credit facility (the “Santander Facility”).

On January 30, 2023, the Santander Loan Agreement was further amended by the Third Amendment to the Amended and Restated Loan and Security Agreement (the “Third Santander Amendment”). As amended by the terms of the Third Santander Amendment, the percentage of the Borrowers’ eligible accounts receivable used to calculate the borrowing base under the Santander Loan Agreement was increased from 85% to 90% for Domestic Insured Accounts (as defined in the Third Santander Amendment), subject to adjustments set forth in the Santander Loan Agreement.

On April 25, 2023, in connection with an amendment to the Credit Agreement entered into with First Merchants as described further below, we entered into the Fourth Amendment to the Amended and Restated Loan and Security Agreement (the “Fourth Santander Amendment”).  The Fourth Santander Amendment (i) included modifications to address the amendments made to the First Merchants Credit Facilities (as defined below) and the consolidation of the debt thereunder and (ii) terminated the subordination agreement relating to the Company’s guarantee of the First Merchants Credit Facilities (as defined below).

On August 22, 2023, we entered into the Fifth Amendment to the Santander Loan Agreement (the “Fifth Santander Amendment”).  The Fifth Santander Amendment permitted certain unsecured guaranties by the Company in the ordinary course of business guarantying obligations of subsidiaries in an aggregate amount not to exceed $4,000 and related modifications to certain negative covenants.

On December 1, 2023, in connection with an amendment (the “Purchase Agreement Amendment”) to that certain Membership Interest Purchase Agreement dated as of September 21, 2021 (the “Purchase Agreement”) among Janel Group, Inc. (“Janel Group”), a wholly-owned subsidiary of the Company, Expedited Logistics and Freight Services, LLC (“ELFS”) and former shareholders of ELFS (the “ELFS Sellers”), (i) the Janel Group Borrowers and Santander entered into an Acknowledgment and Consent Agreement pursuant to which Santander consented to the Purchase Agreement Amendment and the effect of the modifications thereunder on the Santander Loan Agreement and (ii) the ELFS Sellers and Santander entered into an Acknowledgment and Consent Agreement pursuant to which Santander consented to the Purchase Agreement Amendment and the effect of the modifications thereunder on the Subordination Agreement (as defined in the Santander Loan Agreement) between Santander and the ELFS Sellers.

On December 21, 2023, we entered into the Sixth Amendment to the Santander Loan Agreement (the “Sixth Santander Amendment”). The Sixth Santander Amendment modified the reporting due date of the monthly borrowing base calculation from the fifth day to the fifteenth day of each month.

On June 5, 2024, we entered into the Seventh Amendment to the Santander Loan Agreement (the “Seventh Santander Amendment”).  The Seventh Santander Amendment added Airschott as a loan party obligor and borrower.

The Santander Loan Agreement matures on September 21, 2026.  Interest accrues on the Santander Facility at an annual rate equal to the one-month SOFR plus 2.75%. The Janel Group Borrowers’ obligations under the Santander Facility are secured by all of the assets of the Janel Group Borrowers, while the Santander Loan Agreement contains customary terms and covenants. As a result of its terms, the Santander Facility is classified as a current liability on the consolidated balance sheet.

At June 30, 2024, outstanding borrowings under the Santander Facility were $18,231, representing 52.1% of the $35,000 available subject to limitations thereunder, and interest was accruing at an effective interest rate of 7.69%.

At September 30, 2023, outstanding borrowings under the Santander Facility were $18,759, representing 53.6% of the $35,000 available thereunder, and interest was accruing at an effective interest rate of 7.60%.

The Company was in compliance with the financial covenants defined in the Santander Loan Agreement at both June 30, 2024 and September 30, 2023.
 
(B)
First Merchants Bank Credit Facility
 
On February 29, 2016, Indco entered into a Credit Agreement (as amended, the “Prior First Merchants Credit Agreement”) with First Merchants.

On April 25, 2023, Indco and certain other Subsidiaries of the Company that are part of the Life Sciences and Manufacturing segments  (together with Indco, the “Borrowers” and each, a “Borrower”), entered into a Credit Agreement (the “First Merchants Credit Agreement”) with First Merchants.  The First Merchants Credit Agreement constitutes an amendment and restatement of  the Prior First Merchants Credit Agreement.  The credit facilities provided under the First Merchants Credit Agreement (the “First Merchants Credit Facilities”) consist of a $3,000 revolving loan (limited to the borrowing base and reserves), a $5,000 acquisition loan, a $6,905 Term A loan and a $620 Term B loan as a continuation of the mortgage loan under the Prior First Merchants Credit Agreement.  Interest accrues on the outstanding revolving loan, Term A loan and acquisition loan at an annual rate equal to one-month adjusted term SOFR plus either (i) 2.75% (if the Borrowers’ total funded debt to EBITDA ratio is less or equal to 1.75:1.00) or (ii) 3.50% (if the Borrowers’ total funded debt to EBITDA ratio is greater than to 1.75:1.00).  Interest accrues on the Term B loan at an annual rate of 4.19%.  The Borrowers’ obligations under the First Merchants Credit Facilities are secured by all of the Borrowers’ real property and other assets, and are guaranteed by the Company, and the Company’s guarantee of the Borrowers’ obligations is secured by a pledge of the Company’s equity interests in certain of the Borrowers.  The revolving loan portion will expire on August 1, 2027, the Term A loan portion will mature on April 25, 2033, and the Term B loan portion will mature on July 1, 2025. The acquisition loan will permit multiple draws until October 25, 2024, at which point the outstanding principal amount will amortize, with all remaining amounts of the acquisition loan due at maturity on April 25, 2029.

On January 10, 2024, the First Merchants Credit Facilities was amended to provide for, among other changes, permitted affiliate loans provided availability on its revolving loan both before and after giving effect to any such loan, is not less than $1,000 and maturity of such permitted affiliate loans are not to exceed fourteen days from disbursement.

As of June 30, 2024, there were $3,850 of outstanding borrowings under the acquisition loan, $4,725 of outstanding borrowings under the Term A loan and $591 of outstanding borrowings under the Term B loan, with interest accruing on the acquisition loan and revolving loan at an effective interest rate of 8.20% each, and on the Term A loan and Term B loan at an effective interest rate of 8.20% and 4.19%, respectively.

As of September 30, 2023, there were $500 of outstanding borrowings under the acquisition loan, $450 of outstanding borrowings under the revolving loan, $6,235 of outstanding borrowings under the Term A loan and $610 of outstanding borrowings under the Term B loan, with interest accruing on the acquisition loan and revolving loan at an effective interest rate of 8.18% and on the Term A loan and Term B loan at an effective interest rate of 8.18% and 4.19%, respectively.
 
The Company was in compliance with the financial covenants defined in the First Merchants Credit Agreement at June 30, 2024 and September 30, 2023.
 
The table below sets forth the total long-term debt, net of capitalized loan fees of $319 for the First Merchants Credit Agreement (in thousands):

(in thousands)
  
June 30,
2024
    
September 30,
2023
  
Total Debt
  
$
4,998
    
$
6,499
  
Less Current Portion
    
(716
)
    
(715
)
Long-term Portion  
$
4,282
    
$
5,784
  
v3.24.2.u1
SUBORDINATED PROMISSORY NOTES - RELATED PARTY
 9 Months Ended
Jun. 30, 2024
SUBORDINATED PROMISSORY NOTES - RELATED PARTY [Abstract]  
SUBORDINATED PROMISSORY NOTES - RELATED PARTY
7.
SUBORDINATED PROMISSORY NOTES - RELATED PARTY
 
(A)
ICT Subordinated Promissory Note

Aves Labs, Inc., a wholly-owned subsidiary of the Company, is the obligor on a fixed 0.5% subordinated promissory note in the amount of $1,850 (the “ICT Subordinated Promissory Note”) issued to the former owner of ImmunoChemistry Technologies, LLC (“ICT”), in connection with a business combination whereby the Company acquired all of the membership interests of ICT. The ICT Subordinated Promissory Note is payable in sixteen scheduled quarterly installments of principal and interest beginning March 4, 2021, matures on December 4, 2024, and may be prepaid, in whole or in part, without premium or penalty. 

The ICT Subordinated Promissory Note is subordinate to and junior in right of payment for principal interest premiums and other amounts payable to Santander and First Merchants.

As of June 30, 2024, the amount outstanding under the ICT Subordinated Promissory Note was $110, net of a $28 discount, which is included in the current portion of subordinated promissory notes.

As of September 30, 2023, the amount outstanding under the ICT Subordinated Promissory Note was $312, of which $288 is included in the current portion of subordinated promissory notes and $24 is included in the long-term portion of subordinated promissory notes.

(B)
ELFS Subordinated Promissory Notes

Janel Group is the obligor on four fixed 4% subordinated promissory notes totaling $6,000 in the aggregate (together, the “ELFS Subordinated Promissory Notes”), payable to certain former shareholders of ELFS, in connection with the Company’s business combination whereby it acquired all the membership interest of ELFS and its related subsidiaries.  All of the ELFS Subordinated Promissory Notes are guaranteed by the Company and are subordinate to and junior in right of payment for principal, interest, premiums and other amounts payable to the Santander Facility and the First Merchants Credit Facility. The ELFS Subordinated Promissory Notes are payable in twelve equal consecutive quarterly installments of principal together with accrued interest. Beginning October 15, 2021 and on the same day of the next eight consecutive calendar quarters, thereafter payment of accrued interest and unpaid interest is due to the former shareholders. Beginning October 15, 2023, and on the same day of the next twelve consecutive calendar quarters thereafter payment of principal together with accrued interest and unpaid interest is due to the former shareholders. In June 2022, the principal amount of the ELFS Subordinated Promissory Notes was adjusted to $5,100 due to a revised working capital adjustment of $900.


On December 1, 2023, in connection with the Purchase Agreement Amendment among Janel Group and the ELFS Sellers, the Company extended the ELFS Subordinated Promissory Notes maturity by two years and restored the working capital adjustment (as defined in the Purchase Agreement) by $900 which increased the principal amount of the ELFS Subordinated Promissory Notes to $6,000. The Company evaluated the accounting treatment related to the amendment and determined the agreements are substantially different and extinguished the original subordinated promissory notes and recorded the amended subordinated promissory notes at fair value of $4,654. As a result, the Company recorded a debt discount of approximately $921 and a $21 gain on extinguishment.

As of June 30, 2024, the gross amount outstanding under the ELFS Subordinated Promissory Notes was $4,164, ($3,340 net of $824 unamortized discount), of which $1,174 was included in the current portion of subordinated promissory notes and $2,990 was included in the long-term portion of subordinated promissory notes.

As of September 30, 2023, the amount outstanding under the ELFS Subordinated Promissory Notes was $5,100, of which $1,700 was included in the current portion of subordinated promissory notes and $3,400 was included in the long-term portion of subordinated promissory notes.

(C)
Airschott Subordinated Promissory Note

Janel Group is the obligor on a floating rate (Prime Rate plus 2%) subordinated promissory note in the amount of $1,200 issued (the “Airschott Subordinated Promissory Note”), to a former owner of Airschott, in connection with the business combination whereby Janel Group acquired Airschott.  The note is payable in twelve consecutive quarterly payments, commencing in July 2024, of $100 together with accrued interest on the outstanding principal balance.

As of June 30, 2024, the amount outstanding under the Airschott Subordinated Promissory Note was $1,200, $400 which is included in the current portion of subordinated promissory notes.

The table below sets forth the total long-term portion of subordinated promissory notes (in thousands):

(in thousands)  
June 30,
2024
    
September 30,
2023
  
Total subordinated promissory notes
  
$
5,473
    
$
5,412
  
Less current portion of subordinated promissory notes
    
(1,683
)
    
(1,988
)
Long-term portion of subordinated promissory notes
  
$
3,790
    
$
3,424
  
v3.24.2.u1
STOCKHOLDERS' EQUITY
 9 Months Ended
Jun. 30, 2024
STOCKHOLDERS' EQUITY [Abstract]  
STOCKHOLDERS' EQUITY
8.
STOCKHOLDERS’ EQUITY
(in thousands, except share and per share data)

Preferred Stock

Series C Cumulative Preferred Stock

Shares of the Company’s Series C Cumulative Preferred Stock (the “Series C Stock”) were initially entitled to receive annual dividends at a rate of 7% per annum of the original issuance price of $500, when and if declared by the Company’s board of directors, with such rate to increase by 2% annually beginning on the third anniversary of issuance of such Series C Stock to a maximum rate of 13%. By the filing of the Certificate of Amendment to the Company’s Certificate of Incorporation on March 31, 2022, the annual dividend rate decreased to 5% per annum of the original issuance price, when and if declared by the Company’s board of directors, and increased by 1% on January 1, 2024. Such rate is to increase on each January 1 thereafter for four years to a maximum rate of 9%. The dividend rate of the Series C Stock as of June 30, 2024 and September 30, 2023 was 6% and 5%, respectively.
v3.24.2.u1
STOCK-BASED COMPENSATION
 9 Months Ended
Jun. 30, 2024
STOCK-BASED COMPENSATION [Abstract]  
STOCK-BASED COMPENSATION
9.
STOCK-BASED COMPENSATION
(in thousands, except share and per share data)

On October 30, 2013, the board of directors of the Company adopted the Company’s 2013 Non-Qualified Stock Option Plan (the “2013 Option Plan”) providing for options to purchase up to 100,000 shares of common stock for issuance to directors, officers, employees of and consultants to the Company and its subsidiaries.
 
On September 21, 2021, the board of directors of the Company adopted the Amended and Restated 2017 Janel Corporation Equity Incentive Plan (the “Amended Plan”) pursuant to which non-statutory stock options, restricted stock awards and stock appreciation rights of the Company’s Common Stock may be granted to employees, directors and consultants to the Company and its subsidiaries. The Amended Plan increased the number of shares of Common Stock that may be issued pursuant to the Amended Plan from 100,000 to 200,000 shares of Common Stock of the Company and was updated to reflect certain other non-substantive amendments.
 
Total stock-based compensation for the nine months ended June 30, 2024 and 2023 amounted to $214 and $185, respectively, and is included in selling, general and administrative expense in the Company’s statements of operations.
 
Options
   
Number
of Options
    
Weighted
Average
Exercise
Price
    
Weighted
Average
Remaining
Contractual
Term (in years)
    
Aggregate
Intrinsic
Value
(in thousands)
  
Outstanding balance at September 30, 2023
    
40,993
    
$
22.53
      
6.6
    
$
962.27
  
Granted
    
12,500
    
$
28.25
      
9.3
    
$
193.50
  
Expired     (3,500 )   $
 3.25       —     $ —  
Outstanding balance at June 30, 2024
    
49,993
    
$
25.31
      
7.1
    
$
1,014.09
  
Exercisable at June 30, 2024
    
24,162
    
$
12.63
      
5.5
    
$
751.52
  
 
The aggregate intrinsic value in the above table was calculated as the difference between the closing price of the Company’s common stock at June 30, 2024 of $43.73 per share and the exercise price of the stock options that had strike prices below such closing price.
 
As of June 30, 2024, there was approximately $344 of total unrecognized compensation expense related to the unvested employee stock options, which is expected to be recognized over a weighted average period of two years.

Liability classified share-based awards
 
During the nine months ended June 30, 2024 and fiscal year ended September 30, 2023, there were no options granted and no options were exercised with respect to Indco’s common stock.
v3.24.2.u1
INCOME PER COMMON SHARE
 9 Months Ended
Jun. 30, 2024
INCOME PER COMMON SHARE [Abstract]  
INCOME PER COMMON SHARE
10.
INCOME PER COMMON SHARE
 
The following table provides a reconciliation of the basic and diluted earnings per share (“EPS”) computations for the three and nine months ended June 30, 2024 and 2023:
 
   
Three Months Ended
June 30,
    
Nine Months Ended
June 30,
  
(in thousands, except per share data)
   2024
    
2023
     2024    
2023
  
Income:
                        
Net income (loss)
  
$
(191
)
  
$
(430
)
  
$
304
    
$
148
  
Preferred stock dividends
    
(85
)
    
(70
)
    
(242
)
    
(212
)
Net income (loss) available to common stockholders
  
$
(276
)
  
$
(500
)
  
$
62
    
$
(64
)
                                 
Common Shares:
                                
Basic - weighted average common shares
    
1,186.4
      
1,186.4
      
1,186.4
      
1,186.4
  
Effect of dilutive securities:
                                
Stock options
    
—
      
—
      
19.5
      
—
  
Diluted - weighted average common stock
    
1,186.4
      
1,186.4
      
1,205.9
      
1,186.4
  
                                 
Income per Common Share:
                                
Basic -
                                
Net income (loss)
  
$
(0.16
)
  
$
(0.36
)
  
$
0.25
    
$
0.12
  
Preferred stock dividends
    
(0.07
)
    
(0.06
)
    
(0.20
)
    
(0.17
)
Net  income (loss) available to common stockholders
  
$
(0.23
)
  
$
(0.42
)
  
$
0.05
    
$
(0.05
)
                                 
Diluted -
                                
Net income (loss)
  
$
(0.16
)
  
$
(0.36
)
  
$
0.25
    
$
0.12
  
Preferred stock dividends
    
(0.07
)
    
(0.06
)
    
(0.20
)
    
(0.17
)
Net income (loss) available to common stockholders
  
$
(0.23
)
  
$
(0.42
)
  
$
0.05
    
$
(0.05
)
 
The computation for the diluted number of shares excludes unexercised stock options that are anti-dilutive. There were 10 anti-dilutive shares for each of the three- and nine-month periods ended June 30, 2023. There were 22.5 anti-dilutive shares for each of the three- and nine-month periods ended June 30, 2024.
v3.24.2.u1
INCOME TAXES
 9 Months Ended
Jun. 30, 2024
INCOME TAXES [Abstract]  
INCOME TAXES
11.
INCOME TAXES
 
The reconciliation of income tax computed at the Federal statutory rate to the provision for income taxes from continuing operations for the three- and nine-month periods ended June 30, 2024 and 2023 was as follows (in thousands):

   
Three Months Ended
June 30,
    
Nine Months Ended
June 30,
  

  2024
    
2023
     2024    
2023
  
Federal taxes at statutory rates
  
$
(32
)
  
$
129
    
$
(150
)
  
$
(45
)
Permanent differences and other
    
(184
)
    
31
      
(91
)
    
(5
)
State and local taxes, net of Federal benefit
     (127 )     20       (171 )     (18 )
Total
  
$
(343
)
  
$
180
    
$
(412
)
  
$
(68
)
v3.24.2.u1
BUSINESS SEGMENT INFORMATION
 9 Months Ended
Jun. 30, 2024
BUSINESS SEGMENT INFORMATION [Abstract]  
BUSINESS SEGMENT INFORMATION
12.
BUSINESS SEGMENT INFORMATION

As referenced above in Note 1, the Company operates in three reportable segments: Logistics, Life Sciences and Manufacturing.

The Company’s Chief Executive Officer regularly reviews financial information at the reporting segment level in order to make decisions about resources to be allocated to the segments and to assess their performance.
 

The following tables present selected financial information about the Company’s reportable segments and Corporate for the purpose of reconciling to the consolidated totals for the three and nine months ended June 30, 2024:
 
For the three months ended June 30, 2024
(in thousands)
  
Consolidated
    
Logistics
    
Life Sciences
    
Manufacturing
    
Corporate
  
Revenues
  
$
46,724
    
$
40,677
    
$
3,208
    
$
2,839
    
$
—
  
Forwarding expenses and cost of revenues
    
31,633
      
29,725
      
609
      
1,299
      
—
  
Gross profit
    
15,091
      
10,952
      
2,599
      
1,540
      
—
  
Selling, general and administrative
    
13,358
      
9,444
      
1,812
      
793
      
1,309
  
Amortization of intangible assets
    
555
      
—
      
—
      
—
      
555
  
Income (loss) from operations
    
1,178
      
1,508
      
787
      
747
      
(1,864
)
Interest expense
    
589
      
426
      
97
      
66
      
—
  
Identifiable assets
    
108,566
      
42,025
      
12,075
      
4,374
      
50,092
  
Capital expenditures, net of disposals
  
331
    
21
    
302
    
8
    
—
  

For the nine months ended June 30, 2024
(in thousands)
  
Consolidated
    
Logistics
    
Life Sciences
    
Manufacturing
    
Corporate
  
Revenues
  
$
129,881
    
$
111,991
    
$
10,213
    
$
7,677
    
$
—
  
Forwarding expenses and cost of revenues
    
86,822
      
81,232
      
2,065
      
3,525
      
—
  
Gross profit
    
43,059
      
30,759
      
8,148
      
4,152
      
—
  
Selling, general and administrative
    
38,664
      
27,186
      
5,307
      
2,364
      
3,807
  
Amortization of intangible assets
    
1,635
      
—
      
—
      
—
      
1,635
  
Income (loss) from operations
    
2,760
      
3,573
      
2,841
      
1,788
      
(5,442
)
Interest expense
    
1,663
      
1,188
      
245
      
230
      
—
  
Identifiable assets
    
108,566
      
42,025
      
12,075
      
4,374
      
50,092
  
Capital expenditures, net of disposals
  
658
    
47
    
603
    
8
    
—
  

The following tables present selected financial information about the Company’s reportable segments and Corporate for the purpose of reconciling to the consolidated totals for the three and nine months ended June 30, 2023:
 
For the three months ended June 30, 2023
(in thousands)
  
Consolidated
    
Logistics
    
Life Sciences
    
Manufacturing
    
Corporate
  
Revenues
  
$
42,557
    
$
37,484
    
$
2,811
    
$
2,262
    
$
—
  
Forwarding expenses and cost of revenues
    
28,898
      
27,241
      
575
      
1,082
      
—
  
Gross profit
    
13,659
      
10,243
      
2,236
      
1,180
      
—
  
Selling, general and administrative
    
12,948
      
9,629
      
1,512
      
717
      
1,090
  
Amortization of intangible assets
    
524
      
—
      
—
      
—
      
524
  
Income (loss) from operations
    
187
      
614
      
724
      
463
      
(1,614
)
Interest expense
    
528
      
347
      
86
      
95
      
—
  
Identifiable assets
    
99,566
      
38,066
      
11,025
      
4,228
      
46,247
  
Capital expenditures, net of disposals
  
89
    
89
    
—
    
—
    
—
  

For the nine months ended June 30, 2023
(in thousands)
 
Consolidated
    
Logistics
    
Life Sciences
    
Manufacturing
    
Corporate
  
Revenues
  
$
144,979
    
$
129,162
    
$
8,717
    
$
7,100
    
$
—
  
Forwarding expenses and cost of revenues
    
102,654
      
97,339
      
1,930
      
3,385
      
—
  
Gross profit
    
42,325
      
31,823
      
6,787
      
3,715
      
—
  
Selling, general and administrative
    
38,261
      
27,891
      
4,592
      
2,267
      
3,511
  
Amortization of intangible assets
    
1,593
      
—
      
—
      
—
      
1,593
  
Income (loss) from operations
    
2,471
      
3,932
      
2,195
      
1,448
      
(5,104
)
Interest expense
    
1,476
      
1,006
      
165
      
305
      
—
  
Identifiable assets
    
99,566
      
38,066
      
11,025
      
4,228
      
46,247
  
Capital expenditures, net of disposals
  
267
    
214
    
51
    
2
    
—
  
v3.24.2.u1
FAIR VALUE MEASUREMENTS
 9 Months Ended
Jun. 30, 2024
FAIR VALUE MEASUREMENTS [Abstract]  
FAIR VALUE MEASUREMENTS
13.
FAIR VALUE MEASUREMENTS

Recurring Fair Value Measurements

The following table presents the Company’s assets that are measured at fair value on a recurring basis based on the three-level valuation hierarchy (in thousands):

Assets
  
June 30,
  2024
    
September 30,
2023
  
Level 1 Investment in Rubicon at fair value
  
$
831
    

1,573
  
 
On August 19, 2022, the Company acquired 1,108,000 shares of the common stock, par value $0.001 per share, of Rubicon Technology, Inc. (“Rubicon”), at a price per share of $20.00, in a cash tender offer. As of each of June 30, 2024 and September 30, 2023, the Company held 46.6% of the total issued and outstanding shares of Rubicon and reported its investment under the fair value method pursuant to ASC 320. Management determined that it was appropriate to carry its investment in Rubicon at fair value because the investment was traded on the NASDAQ stock exchange through January 2, 2023, began trading on the OTCQB Capital Market on January 3, 2023 and had daily trading activity, the combination of which provide a better indicator of value. The investment in Rubicon is re-measured at the end of each quarter based on the trading price and any change in the value is reported on the income statement as an unrealized gain or loss on marketable securities in other income (expense).

On October 4, 2023, Rubicon announced that it had authorized a cash dividend of $1.10 per share of common stock of Rubicon and set October 16, 2023 as the record date for the distribution. On October 23, 2023, the Company received $1,219 in dividends and recorded a fair value adjustment to its investment in Rubicon of $709, which is included in other income and expense.

The following table sets forth a summary of the changes in the fair value of the Company’s investment in Rubicon, which is measured at fair value on a recurring basis utilizing Level 1 assumptions in its valuation (in thousands):

   
June 30,
2024
    
September 30,
2023
  
Balance beginning of period
  
$
1,573
    
$
2,371
  
Fair value adjustment to Rubicon investment
    
(742
)
    
(798
)
Balance end of period
  
$
831
    
$
1,573
  

The following table presents the Company’s liabilities that are measured at fair value on a recurring basis based on the three-level valuation hierarchy (in thousands):

Contingent earnout liabilities
 
June 30,
2024
    
September 30,
2023
 
Level 1 Contingent earnout liabilities
   $ 2,070     $ —  
Level 3 Contingent earnout liabilities
     1,090       2,330  
Total  
$
3,160
    
$
2,330
  

These liabilities relate to the estimated fair value of earnout payments to former IBS, ViraQuest, ELFS, and Airschott owners for the periods ending June 30, 2024 and September 30, 2023.

On December 1, 2023, in connection with the Purchase Agreement Amendment among Janel Group and the ELFS Sellers described above, the parties agreed to certain modifications fixing the amount of the remaining earnout payments to ELFS in earnout years three and four to $1,078 each year. As a result, the measurement of the earnout liability became a Level 1 fair value measurement based on the present value of the negotiated payments.

On June 5, 2024, the Company completed a business combination whereby it acquired a majority ownership position in Airschott, a non-asset-based freight forwarder and customs broker. As part of the business combination, the Company agreed to purchase the remaining 20% of Airschott stock in three years for deferred consideration of the greater of 20% of 1.25 times the trailing twelve months gross profit of Airschott and $1,200.

The current and non-current portions of the fair value of the contingent earnout liabilities at June 30, 2024 were $1,149 and $2,011, respectively. The current and non-current portions of the fair value of the contingent earnout liabilities at September 30, 2023 were $592 and $1,738, respectively.

The following table sets forth a summary of the changes in the fair value of the Company’s contingent earnout liabilities, which are measured at fair value on a recurring basis utilizing Level 1 and Level 3 assumptions in their valuation (in thousands):

   
June 30,
2024
    
September 30,
2023
 
Balance beginning of period
 
$
2,330
    
$
4,580
  
Fair value of contingent consideration recorded in connection with business combinations
    
1,017
      
300
  
Earnout payment     (740 )     (1,693 )
Adjustments to earnout     435       —  
Fair value adjustment of contingent earnout liabilities     118       (857 )
Balance end of period
 
$
3,160
    
$
2,330
  

The Company determined the fair value of the Level 3 contingent earnout liability using forecasted results through the expected earnout periods. The principal inputs to the approach include expectations of the specific business’s revenues in fiscal years 2024 through 2025 using an appropriate discount rate. Given the use of significant inputs that are not observable in the market, the contingent earnout liability is classified within Level 3 of the fair value hierarchy.
v3.24.2.u1
LEASES
 9 Months Ended
Jun. 30, 2024
LEASES [Abstract]  
LEASES
14.
LEASES
 
The Company has operating leases for office and warehouse space in certain locations where it conducts business. As of June 30, 2024, the remaining terms of the Company’s operating leases were between one and 116 months, and certain lease agreements contain provisions for future rent increases. Payments due under the lease contracts include the minimum lease payments that the Company is obligated to make under the non-cancelable initial terms of the leases as the renewal terms are at the Company’s option and the Company is not reasonably certain to exercise those renewal options at lease commencement.
 
The components of lease cost for the three- and nine-month periods ended June 30, 2024 and 2023 were as follows (in thousands):

   
Three Months Ended
June 30,
    
Nine Months Ended
June 30,
  

  2024
    
2023
     2024    
2023
  
Operating lease cost
  
$
644
    
$
523
    
$
1,857
    
$
1,540
  
Short-term lease cost
     38       150       125       283  
Total lease cost
  
$
682
    
$
673
    
$
1,982
    
$
1,823
  

Rent expense for the nine months ended June 30, 2024 and 2023 was $1,982 and $1,823, respectively.

Operating lease right of use assets, current portion of operating lease liabilities and long-term operating lease liabilities reported in the condensed consolidated balance sheets for operating leases as of June 30, 2024 were $9,113, $2,445 and $7,034, respectively.

Operating lease right of use assets, current portion of operating lease liabilities and long-term operating lease liabilities reported in the condensed consolidated balance sheets for operating leases as of September 30, 2023 were $7,460, $2,020 and $5,689, respectively.
As of June 30, 2024 and September 30, 2023, the weighted-average remaining lease term and the weighted-average discount rate related to the Company’s operating leases were 5.7 years and 4.46% and 5.9 years and 4.01%, respectively.
Future minimum lease payments under non-cancelable operating leases as of June 30, 2024 were as follows (in thousands):
 
2025
  
$
2,906
  
2026
    
2,543
  
2027
    
1,812
  
2028    
1,540
  
2029
    
769
  
Thereafter
     1,656  
Total undiscounted lease payments
    
11,226
  
Less imputed interest
    
(1,747
)
Total lease obligations
  
$
9,479
  
v3.24.2.u1
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies)
 9 Months Ended
Jun. 30, 2024
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES [Abstract]  
Restricted Cash
Restricted Cash

Commencing in the second half of 2024, the Company insures certain risks through a newly formed wholly-owned captive insurance company, Gainesville Insurance Company, Inc. (“Gainesville”). In addition, we also maintain some of our normal, historical insurance policies with third-party insurers. Restricted cash represents deposits held by Gainesville that are required by state insurance regulations to remain in the captive insurance company as cash or cash equivalents. The Company considers all highly liquid investments with an original maturity of three months or less, when purchased, to be cash equivalents.
Revenue and revenue recognition
Revenue and revenue recognition
 

Logistics



Revenues are recognized upon transfer of control of promised services to customers. With respect to its Logistics segment, the Company has determined that, in general, each shipment transaction or service order constitutes a separate contract with the customer. When the Company provides multiple services to a customer, different contracts may be present for different services.



The Company typically satisfies its performance obligations as services are rendered at a point in time. A typical shipment would include services rendered at origin, such as pick-up and delivery to port, freight services from origin to destination port and destination services, such as customs clearance and final delivery. The Company measures the performance of its obligations as services are completed at a point in time during the life of a shipment, including services at origin, freight and destination. The Company fulfills nearly all of its performance obligations within a one- to two-month period.



The Company evaluates whether amounts billed to customers should be reported as gross or net revenues. Generally, revenues are recorded on a gross basis when the Company is acting as principal and is primarily responsible for fulfilling the promise to provide the services, when it has discretion in setting the prices for the services to the customers, and the Company has the ability to direct the use of the services provided by the third party. Revenues are recognized on a net basis when the Company is acting as agent, and we do not have latitude in carrier selection or in establishing rates with the carrier.



In the Logistics segment, the Company disaggregates its revenue by its four primary service categories: Trucking, Ocean, Air, Customs Brokerage and Other. A summary of the Company’s revenues disaggregated by major service lines for the three and nine months ended June 30, 2024 and 2023 is as follows (in thousands):
 
   
Three Months Ended
June 30,
   
Nine Months Ended
June 30,
 
   
2024
    
2023
    
2024
    
2023
  
Service Type
                      
Trucking
  
$
18,689
    
$
19,314
    
$
55,040
    
$
61,671
  
Ocean
     10,443       7,502       25,204       34,908  
Air
   
6,733
      
5,638
      
19,261
      
17,096
  
Customs Brokerage and Other    
4,812
      
5,030
      
12,486
      
15,487
  
Total
  
$
40,677
    
$
37,484
    
$
111,991
    
$
129,162
  


Life Sciences and Manufacturing



Revenues from the Life Sciences segment are derived from the sale of high-quality monoclonal and polyclonal antibodies, diagnostic reagents and diagnostic kits and other immunoreagents for biomedical research and antibody manufacturing. Revenues from the Company’s Manufacturing segment, which is comprised of Indco, a majority-owned subsidiary of the Company that manufactures and distributes mixing equipment and apparatus for specific applications within various industries (“Indco”), are derived from the engineering, manufacture and delivery of specialty mixing equipment and accessories. Revenues for Life Sciences and Manufacturing are recognized when products are shipped and the risk of loss is transferred to the carrier(s) used.
v3.24.2.u1
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Tables)
 9 Months Ended
Jun. 30, 2024
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES [Abstract]  
Disaggregation of Revenue A summary of the Company’s revenues disaggregated by major service lines for the three and nine months ended June 30, 2024 and 2023 is as follows (in thousands):
 
   
Three Months Ended
June 30,
   
Nine Months Ended
June 30,
 
   
2024
    
2023
    
2024
    
2023
  
Service Type
                      
Trucking
  
$
18,689
    
$
19,314
    
$
55,040
    
$
61,671
  
Ocean
     10,443       7,502       25,204       34,908  
Air
   
6,733
      
5,638
      
19,261
      
17,096
  
Customs Brokerage and Other    
4,812
      
5,030
      
12,486
      
15,487
  
Total
  
$
40,677
    
$
37,484
    
$
111,991
    
$
129,162
  
v3.24.2.u1
INVENTORY (Tables)
 9 Months Ended
Jun. 30, 2024
INVENTORY [Abstract]  
Inventories
Inventories consisted of the following (in thousands):

   
June 30,
2024
    
September 30,
2023
  
Finished goods
  
$
1,998
    
$
2,095
  
Work-in-process
    
800
      
969
  
Raw materials
    
1,789
      
1,811
  
Gross inventory
    
4,587
      
4,875
  
Less – reserve for inventory valuation
    
(31
)
    
(25
)
Inventory net
  
$
4,556
    
$
4,850
  
v3.24.2.u1
INTANGIBLE ASSETS (Tables)
 9 Months Ended
Jun. 30, 2024
INTANGIBLE ASSETS [Abstract]  
Intangible Assets and Estimated Useful Lives used in Computation of Amortization
A summary of intangible assets and the estimated useful lives used in the computation of amortization is as follows (in thousands):

   
June 30,
2024
    
September 30,
2023
  
Life
Customer relationships
  
$
27,939
    
$
25,238
  
10-24 Years
Trademarks/names
    
4,541
      
4,559
  
1-20 Years
Trademarks/names
    
541
      
521
  
Indefinite
Other
    
2,007
      
1,929
  
2-22 Years

   
35,028
      
32,247
    
Less: Accumulated Amortization
    
(11,198
)
    
(9,564
)
  
Intangible assets, net
  
$
23,830
    
$
22,683
    

The composition of the intangible assets balance at June 30, 2024 and September 30, 2023 is as follows (in thousands):

   
June 30,
2024
    
September 30,
2023
  
Logistics
  
$
20,543
    
$
18,174
  
Life Sciences     6,785       6,373  
Manufacturing
    
7,700
      
7,700
  

   
35,028
      
32,247
  
Less: Accumulated Amortization
    
(11,198
)
    
(9,564
)
Intangible assets, net
  
$
23,830
    
$
22,683
  
v3.24.2.u1
GOODWILL (Tables)
 9 Months Ended
Jun. 30, 2024
GOODWILL [Abstract]  
Composition of Goodwill
The composition of the goodwill balance at June 30, 2024 and September 30, 2023 was as follows (in thousands):
   
June 30,
2024
    
September 30,
2023
  
Logistics
  
$
12,729
    
$
9,175
  
Life Sciences     6,171       6,096  
Manufacturing
    
5,046
      
5,046
  
Total
  
$
23,946
    
$
20,317
  
v3.24.2.u1
NOTES PAYABLE - BANKS (Tables)
 9 Months Ended
Jun. 30, 2024
NOTES PAYABLE - BANKS [Abstract]  
Schedule of Debt
The table below sets forth the total long-term debt, net of capitalized loan fees of $319 for the First Merchants Credit Agreement (in thousands):

(in thousands)
  
June 30,
2024
    
September 30,
2023
  
Total Debt
  
$
4,998
    
$
6,499
  
Less Current Portion
    
(716
)
    
(715
)
Long-term Portion  
$
4,282
    
$
5,784
  
v3.24.2.u1
SUBORDINATED PROMISSORY NOTES - RELATED PARTY (Tables)
 9 Months Ended
Jun. 30, 2024
SUBORDINATED PROMISSORY NOTES - RELATED PARTY [Abstract]  
Amounts Outstanding
The table below sets forth the total long-term portion of subordinated promissory notes (in thousands):

(in thousands)  
June 30,
2024
    
September 30,
2023
  
Total subordinated promissory notes
  
$
5,473
    
$
5,412
  
Less current portion of subordinated promissory notes
    
(1,683
)
    
(1,988
)
Long-term portion of subordinated promissory notes
  
$
3,790
    
$
3,424
  
v3.24.2.u1
STOCK-BASED COMPENSATION (Tables)
 9 Months Ended
Jun. 30, 2024
STOCK-BASED COMPENSATION [Abstract]  
Activity of Stock Options
Options
   
Number
of Options
    
Weighted
Average
Exercise
Price
    
Weighted
Average
Remaining
Contractual
Term (in years)
    
Aggregate
Intrinsic
Value
(in thousands)
  
Outstanding balance at September 30, 2023
    
40,993
    
$
22.53
      
6.6
    
$
962.27
  
Granted
    
12,500
    
$
28.25
      
9.3
    
$
193.50
  
Expired     (3,500 )   $
 3.25       —     $ —  
Outstanding balance at June 30, 2024
    
49,993
    
$
25.31
      
7.1
    
$
1,014.09
  
Exercisable at June 30, 2024
    
24,162
    
$
12.63
      
5.5
    
$
751.52
  
v3.24.2.u1
INCOME PER COMMON SHARE (Tables)
 9 Months Ended
Jun. 30, 2024
INCOME PER COMMON SHARE [Abstract]  
Reconciliation of Basic and Diluted Earnings Per Share
The following table provides a reconciliation of the basic and diluted earnings per share (“EPS”) computations for the three and nine months ended June 30, 2024 and 2023:
 
   
Three Months Ended
June 30,
    
Nine Months Ended
June 30,
  
(in thousands, except per share data)
   2024
    
2023
     2024    
2023
  
Income:
                        
Net income (loss)
  
$
(191
)
  
$
(430
)
  
$
304
    
$
148
  
Preferred stock dividends
    
(85
)
    
(70
)
    
(242
)
    
(212
)
Net income (loss) available to common stockholders
  
$
(276
)
  
$
(500
)
  
$
62
    
$
(64
)
                                 
Common Shares:
                                
Basic - weighted average common shares
    
1,186.4
      
1,186.4
      
1,186.4
      
1,186.4
  
Effect of dilutive securities:
                                
Stock options
    
—
      
—
      
19.5
      
—
  
Diluted - weighted average common stock
    
1,186.4
      
1,186.4
      
1,205.9
      
1,186.4
  
                                 
Income per Common Share:
                                
Basic -
                                
Net income (loss)
  
$
(0.16
)
  
$
(0.36
)
  
$
0.25
    
$
0.12
  
Preferred stock dividends
    
(0.07
)
    
(0.06
)
    
(0.20
)
    
(0.17
)
Net  income (loss) available to common stockholders
  
$
(0.23
)
  
$
(0.42
)
  
$
0.05
    
$
(0.05
)
                                 
Diluted -
                                
Net income (loss)
  
$
(0.16
)
  
$
(0.36
)
  
$
0.25
    
$
0.12
  
Preferred stock dividends
    
(0.07
)
    
(0.06
)
    
(0.20
)
    
(0.17
)
Net income (loss) available to common stockholders
  
$
(0.23
)
  
$
(0.42
)
  
$
0.05
    
$
(0.05
)
v3.24.2.u1
INCOME TAXES (Tables)
 9 Months Ended
Jun. 30, 2024
INCOME TAXES [Abstract]  
Income Tax Reconciliation
The reconciliation of income tax computed at the Federal statutory rate to the provision for income taxes from continuing operations for the three- and nine-month periods ended June 30, 2024 and 2023 was as follows (in thousands):

   
Three Months Ended
June 30,
    
Nine Months Ended
June 30,
  

  2024
    
2023
     2024    
2023
  
Federal taxes at statutory rates
  
$
(32
)
  
$
129
    
$
(150
)
  
$
(45
)
Permanent differences and other
    
(184
)
    
31
      
(91
)
    
(5
)
State and local taxes, net of Federal benefit
     (127 )     20       (171 )     (18 )
Total
  
$
(343
)
  
$
180
    
$
(412
)
  
$
(68
)
v3.24.2.u1
BUSINESS SEGMENT INFORMATION (Tables)
 9 Months Ended
Jun. 30, 2024
BUSINESS SEGMENT INFORMATION [Abstract]  
Segment Reporting Information by Segment

The following tables present selected financial information about the Company’s reportable segments and Corporate for the purpose of reconciling to the consolidated totals for the three and nine months ended June 30, 2024:
 
For the three months ended June 30, 2024
(in thousands)
  
Consolidated
    
Logistics
    
Life Sciences
    
Manufacturing
    
Corporate
  
Revenues
  
$
46,724
    
$
40,677
    
$
3,208
    
$
2,839
    
$
—
  
Forwarding expenses and cost of revenues
    
31,633
      
29,725
      
609
      
1,299
      
—
  
Gross profit
    
15,091
      
10,952
      
2,599
      
1,540
      
—
  
Selling, general and administrative
    
13,358
      
9,444
      
1,812
      
793
      
1,309
  
Amortization of intangible assets
    
555
      
—
      
—
      
—
      
555
  
Income (loss) from operations
    
1,178
      
1,508
      
787
      
747
      
(1,864
)
Interest expense
    
589
      
426
      
97
      
66
      
—
  
Identifiable assets
    
108,566
      
42,025
      
12,075
      
4,374
      
50,092
  
Capital expenditures, net of disposals
  
331
    
21
    
302
    
8
    
—
  

For the nine months ended June 30, 2024
(in thousands)
  
Consolidated
    
Logistics
    
Life Sciences
    
Manufacturing
    
Corporate
  
Revenues
  
$
129,881
    
$
111,991
    
$
10,213
    
$
7,677
    
$
—
  
Forwarding expenses and cost of revenues
    
86,822
      
81,232
      
2,065
      
3,525
      
—
  
Gross profit
    
43,059
      
30,759
      
8,148
      
4,152
      
—
  
Selling, general and administrative
    
38,664
      
27,186
      
5,307
      
2,364
      
3,807
  
Amortization of intangible assets
    
1,635
      
—
      
—
      
—
      
1,635
  
Income (loss) from operations
    
2,760
      
3,573
      
2,841
      
1,788
      
(5,442
)
Interest expense
    
1,663
      
1,188
      
245
      
230
      
—
  
Identifiable assets
    
108,566
      
42,025
      
12,075
      
4,374
      
50,092
  
Capital expenditures, net of disposals
  
658
    
47
    
603
    
8
    
—
  

The following tables present selected financial information about the Company’s reportable segments and Corporate for the purpose of reconciling to the consolidated totals for the three and nine months ended June 30, 2023:
 
For the three months ended June 30, 2023
(in thousands)
  
Consolidated
    
Logistics
    
Life Sciences
    
Manufacturing
    
Corporate
  
Revenues
  
$
42,557
    
$
37,484
    
$
2,811
    
$
2,262
    
$
—
  
Forwarding expenses and cost of revenues
    
28,898
      
27,241
      
575
      
1,082
      
—
  
Gross profit
    
13,659
      
10,243
      
2,236
      
1,180
      
—
  
Selling, general and administrative
    
12,948
      
9,629
      
1,512
      
717
      
1,090
  
Amortization of intangible assets
    
524
      
—
      
—
      
—
      
524
  
Income (loss) from operations
    
187
      
614
      
724
      
463
      
(1,614
)
Interest expense
    
528
      
347
      
86
      
95
      
—
  
Identifiable assets
    
99,566
      
38,066
      
11,025
      
4,228
      
46,247
  
Capital expenditures, net of disposals
  
89
    
89
    
—
    
—
    
—
  

For the nine months ended June 30, 2023
(in thousands)
 
Consolidated
    
Logistics
    
Life Sciences
    
Manufacturing
    
Corporate
  
Revenues
  
$
144,979
    
$
129,162
    
$
8,717
    
$
7,100
    
$
—
  
Forwarding expenses and cost of revenues
    
102,654
      
97,339
      
1,930
      
3,385
      
—
  
Gross profit
    
42,325
      
31,823
      
6,787
      
3,715
      
—
  
Selling, general and administrative
    
38,261
      
27,891
      
4,592
      
2,267
      
3,511
  
Amortization of intangible assets
    
1,593
      
—
      
—
      
—
      
1,593
  
Income (loss) from operations
    
2,471
      
3,932
      
2,195
      
1,448
      
(5,104
)
Interest expense
    
1,476
      
1,006
      
165
      
305
      
—
  
Identifiable assets
    
99,566
      
38,066
      
11,025
      
4,228
      
46,247
  
Capital expenditures, net of disposals
  
267
    
214
    
51
    
2
    
—
  
v3.24.2.u1
FAIR VALUE MEASUREMENTS (Tables)
 9 Months Ended
Jun. 30, 2024
FAIR VALUE MEASUREMENTS [Abstract]  
Assets and Liabilities Measured at Fair Value on Recurring Basis
Recurring Fair Value Measurements

The following table presents the Company’s assets that are measured at fair value on a recurring basis based on the three-level valuation hierarchy (in thousands):

Assets
  
June 30,
  2024
    
September 30,
2023
  
Level 1 Investment in Rubicon at fair value
  
$
831
    

1,573
  
 
The following table presents the Company’s liabilities that are measured at fair value on a recurring basis based on the three-level valuation hierarchy (in thousands):

Contingent earnout liabilities
 
June 30,
2024
    
September 30,
2023
 
Level 1 Contingent earnout liabilities
   $ 2,070     $ —  
Level 3 Contingent earnout liabilities
     1,090       2,330  
Total  
$
3,160
    
$
2,330
  
Changes in Fair Value of Investment in Rubicon Measured at Fair Value on Recurring Basis Utilizing Level 1 Assumptions
The following table sets forth a summary of the changes in the fair value of the Company’s investment in Rubicon, which is measured at fair value on a recurring basis utilizing Level 1 assumptions in its valuation (in thousands):

   
June 30,
2024
    
September 30,
2023
  
Balance beginning of period
  
$
1,573
    
$
2,371
  
Fair value adjustment to Rubicon investment
    
(742
)
    
(798
)
Balance end of period
  
$
831
    
$
1,573
  
Changes in Fair Value of Contingent Earnout Liabilities Measured at Fair Value on Recurring Basis Utilizing Level 1 and Level 3 Assumptions
The following table sets forth a summary of the changes in the fair value of the Company’s contingent earnout liabilities, which are measured at fair value on a recurring basis utilizing Level 1 and Level 3 assumptions in their valuation (in thousands):

   
June 30,
2024
    
September 30,
2023
 
Balance beginning of period
 
$
2,330
    
$
4,580
  
Fair value of contingent consideration recorded in connection with business combinations
    
1,017
      
300
  
Earnout payment     (740 )     (1,693 )
Adjustments to earnout     435       —  
Fair value adjustment of contingent earnout liabilities     118       (857 )
Balance end of period
 
$
3,160
    
$
2,330
  
v3.24.2.u1
LEASES (Tables)
 9 Months Ended
Jun. 30, 2024
LEASES [Abstract]  
Components of Lease Expense
The components of lease cost for the three- and nine-month periods ended June 30, 2024 and 2023 were as follows (in thousands):

   
Three Months Ended
June 30,
    
Nine Months Ended
June 30,
  

  2024
    
2023
     2024    
2023
  
Operating lease cost
  
$
644
    
$
523
    
$
1,857
    
$
1,540
  
Short-term lease cost
     38       150       125       283  
Total lease cost
  
$
682
    
$
673
    
$
1,982
    
$
1,823
  
Future Minimum Lease Payments for Operating Leases
Future minimum lease payments under non-cancelable operating leases as of June 30, 2024 were as follows (in thousands):
 
2025
  
$
2,906
  
2026
    
2,543
  
2027
    
1,812
  
2028    
1,540
  
2029
    
769
  
Thereafter
     1,656  
Total undiscounted lease payments
    
11,226
  
Less imputed interest
    
(1,747
)
Total lease obligations
  
$
9,479
  
v3.24.2.u1
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Details)
$ in Thousands
 3 Months Ended 9 Months Ended
Jun. 30, 2024
USD ($)
Jun. 30, 2023
USD ($)
Jun. 30, 2024
USD ($)
Segment
Category
Jun. 30, 2023
USD ($)
Business Description [Abstract]        
Number of reportable segments | Segment     3  
Revenue and revenue recognition [Abstract]        
Revenues $ 46,724 $ 42,557 $ 129,881 $ 144,979
Logistics [Member]        
Revenue and revenue recognition [Abstract]        
Number of primary service categories | Category     4  
Revenues 40,677 37,484 $ 111,991 129,162
Logistics [Member] | Trucking [Member]        
Revenue and revenue recognition [Abstract]        
Revenues 18,689 19,314 55,040 61,671
Logistics [Member] | Ocean [Member]        
Revenue and revenue recognition [Abstract]        
Revenues 10,443 7,502 25,204 34,908
Logistics [Member] | Air [Member]        
Revenue and revenue recognition [Abstract]        
Revenues 6,733 5,638 19,261 17,096
Logistics [Member] | Custom Brokerage and Other [Member]        
Revenue and revenue recognition [Abstract]        
Revenues $ 4,812 $ 5,030 $ 12,486 $ 15,487
v3.24.2.u1
ACQUISITIONS (Details) - USD ($)
$ in Thousands
 9 Months Ended
Jun. 05, 2024
Feb. 01, 2024
May 22, 2023
Mar. 02, 2023
Nov. 01, 2022
Jun. 30, 2024
Sep. 30, 2023
Business Combination, Consideration Transferred [Abstract]              
Goodwill           $ 23,946 $ 20,317
Royalty Agreement Asset [Member]              
Asset Acquisition [Abstract]              
Purchase price     $ 500        
Airschott [Member]              
Business Combination, Consideration Transferred [Abstract]              
Aggregate purchase price $ 5,900            
Percentage of outstanding stock purchased at closing 80.00%            
Floating rate sellers note $ 1,200            
Net liabilities assumed 170            
Consideration paid in cash $ 3,600            
Remaining percentage agreed to purchase 20.00%            
Period agreed for acquiring remaining percentage of acquiree 3 years         3 years  
Maximum threshold percentage agreed to paid as deferred consideration 20.00%            
Gross profit rate for determining deferred compensation 1.25            
Gross profit trailing period for deferred consideration 12 months         12 months  
Deferred consideration $ 1,200            
Goodwill 3,500            
Identifiable intangibles $ 2,400            
ViraQuest [Member]              
Business Combination, Consideration Transferred [Abstract]              
Aggregate purchase price   $ 635          
Consideration transferred, cash received   29          
Consideration paid in cash   600          
Fair value of consideration transferred   64          
Goodwill   74          
Identifiable intangibles   $ 412          
IBS [Member]              
Business Combination, Consideration Transferred [Abstract]              
Aggregate purchase price         $ 3,602    
Consideration transferred, cash received         153    
Consideration paid in cash         3,000    
Deferred consideration         250    
Fair value of consideration transferred         300    
Maximum earnout payments due         750    
Preliminary working capital adjustment         205    
Goodwill         1,468    
Identifiable intangibles         $ 1,680    
SH [Member]              
Business Combination, Consideration Transferred [Abstract]              
Aggregate purchase price       $ 600      
Consideration paid in cash       500      
Deferred consideration       100      
Goodwill       181      
Identifiable intangibles       $ 202      
v3.24.2.u1
INVENTORY (Details) - USD ($)
$ in Thousands
Jun. 30, 2024
Sep. 30, 2023
INVENTORY [Abstract]    
Finished goods $ 1,998 $ 2,095
Work-in-process 800 969
Raw materials 1,789 1,811
Gross inventory 4,587 4,875
Less - reserve for inventory valuation (31) (25)
Inventory net $ 4,556 $ 4,850
v3.24.2.u1
INTANGIBLE ASSETS (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Sep. 30, 2023
Intangible Assets, Net [Abstract]          
Intangible assets, gross $ 35,028   $ 35,028   $ 32,247
Less: Accumulated Amortization (11,198)   (11,198)   (9,564)
Intangible assets, net 23,830   23,830   22,683
Amortization expense 555 $ 524 1,635 $ 1,593  
Logistics [Member]          
Intangible Assets, Net [Abstract]          
Intangible assets, gross 20,543   20,543   18,174
Life Sciences [Member]          
Intangible Assets, Net [Abstract]          
Intangible assets, gross 6,785   6,785   6,373
Manufacturing [Member]          
Intangible Assets, Net [Abstract]          
Intangible assets, gross 7,700   7,700   7,700
Customer Relationships [Member]          
Intangible Assets, Net [Abstract]          
Finite lived intangible assets, gross $ 27,939   $ 27,939   25,238
Customer Relationships [Member] | Minimum [Member]          
Intangible Assets, Net [Abstract]          
Life 10 years   10 years    
Customer Relationships [Member] | Maximum [Member]          
Intangible Assets, Net [Abstract]          
Life 24 years   24 years    
Trademarks/Names [Member]          
Intangible Assets, Net [Abstract]          
Finite lived intangible assets, gross $ 4,541   $ 4,541   4,559
Indefinite-lived intangible assets, gross $ 541   $ 541   521
Trademarks/Names [Member] | Minimum [Member]          
Intangible Assets, Net [Abstract]          
Life 1 year   1 year    
Trademarks/Names [Member] | Maximum [Member]          
Intangible Assets, Net [Abstract]          
Life 20 years   20 years    
Other [Member]          
Intangible Assets, Net [Abstract]          
Finite lived intangible assets, gross $ 2,007   $ 2,007   $ 1,929
Other [Member] | Minimum [Member]          
Intangible Assets, Net [Abstract]          
Life 2 years   2 years    
Other [Member] | Maximum [Member]          
Intangible Assets, Net [Abstract]          
Life 22 years   22 years    
v3.24.2.u1
GOODWILL (Details) - USD ($)
$ in Thousands
Jun. 30, 2024
Sep. 30, 2023
Composition of Goodwill [Abstract]    
Goodwill $ 23,946 $ 20,317
Logistics [Member]    
Composition of Goodwill [Abstract]    
Goodwill 12,729 9,175
Life Sciences [Member]    
Composition of Goodwill [Abstract]    
Goodwill 6,171 6,096
Manufacturing [Member]    
Composition of Goodwill [Abstract]    
Goodwill $ 5,046 $ 5,046
v3.24.2.u1
NOTES PAYABLE - BANKS, Santander Bank Facility (Details) - USD ($)
$ in Thousands
 9 Months Ended
Jun. 30, 2024
Sep. 30, 2023
Aug. 22, 2023
Jan. 30, 2023
Jan. 29, 2023
Revolving Line of Credit Facility [Abstract]          
Outstanding borrowings $ 22,081 $ 19,709      
Santander Bank Facility [Member]          
Revolving Line of Credit Facility [Abstract]          
Percentage of accounts receivable       90.00% 85.00%
Maturity date of facility Sep. 21, 2026        
Variable rate term one-month        
Basis spread on variable rate 2.75%        
Debt Instrument, Variable Interest Rate, Type [Extensible Enumeration] us-gaap:SecuredOvernightFinancingRateSofrMember        
Outstanding borrowings $ 18,231 $ 18,759      
Percentage of outstanding borrowings 52.10% 53.60%      
Maximum borrowing capacity $ 35,000 $ 35,000      
Effective interest rate 7.69% 7.60%      
Santander Bank Facility [Member] | Maximum [Member]          
Revolving Line of Credit Facility [Abstract]          
Face amount of debt     $ 4,000    
v3.24.2.u1
NOTES PAYABLE - BANKS, First Merchants Bank Credit Facility (Details) - USD ($)
$ in Thousands
 9 Months Ended
Jan. 10, 2024
Apr. 25, 2023
Jun. 30, 2024
Sep. 30, 2023
Note Payable - Bank [Abstract]        
Less Current Portion     $ (716) $ (715)
Long-term Portion     4,282 5,784
First Merchants Bank Credit Facility [Member]        
Long Term Debt [Abstract]        
Debt Instrument, Variable Interest Rate, Type [Extensible Enumeration]   us-gaap:SecuredOvernightFinancingRateSofrMember    
Maturity term of facility 14 days      
Note Payable - Bank [Abstract]        
Capitalized loan fees     319  
Total Debt     4,998 6,499
Less Current Portion     (716) (715)
Long-term Portion     $ 4,282 5,784
First Merchants Bank Credit Facility [Member] | Minimum [Member]        
Long Term Debt [Abstract]        
Base amount $ 1,000      
Revolving Loan [Member]        
Long Term Debt [Abstract]        
Maximum borrowing capacity   $ 3,000    
Term of variable rate     one-month  
EBITDA ratio   1.75    
Maturity date of facility     Aug. 01, 2027  
Outstanding borrowings       $ 450
Effective interest rate     8.20% 8.18%
Revolving Loan [Member] | Minimum [Member]        
Long Term Debt [Abstract]        
Basis spread on variable rate   2.75%    
Revolving Loan [Member] | Maximum [Member]        
Long Term Debt [Abstract]        
Basis spread on variable rate   3.50%    
Acquisition Loan [Member]        
Long Term Debt [Abstract]        
Maximum borrowing capacity   $ 5,000    
Term of variable rate     one-month  
EBITDA ratio   1.75    
Maturity date of facility     Apr. 25, 2029  
Outstanding borrowings     $ 3,850 $ 500
Effective interest rate     8.20% 8.18%
Acquisition Loan [Member] | Minimum [Member]        
Long Term Debt [Abstract]        
Basis spread on variable rate   2.75%    
Acquisition Loan [Member] | Maximum [Member]        
Long Term Debt [Abstract]        
Basis spread on variable rate   3.50%    
Term Loan A [Member]        
Long Term Debt [Abstract]        
Maximum borrowing capacity   $ 6,905    
Term of variable rate     one-month  
EBITDA ratio   1.75    
Maturity date of facility     Apr. 25, 2033  
Outstanding borrowings     $ 4,725 $ 6,235
Effective interest rate     8.20% 8.18%
Term Loan A [Member] | Minimum [Member]        
Long Term Debt [Abstract]        
Basis spread on variable rate   2.75%    
Term Loan A [Member] | Maximum [Member]        
Long Term Debt [Abstract]        
Basis spread on variable rate   3.50%    
Term Loan B [Member]        
Long Term Debt [Abstract]        
Maximum borrowing capacity   $ 620    
Interest rate percentage   4.19%    
Maturity date of facility     Jul. 01, 2025  
Outstanding borrowings     $ 591 $ 610
Effective interest rate     4.19% 4.19%
v3.24.2.u1
SUBORDINATED PROMISSORY NOTES - RELATED PARTY, Subordinated Promissory Note (Details)
$ in Thousands
 1 Months Ended 9 Months Ended
Dec. 01, 2023
USD ($)
Jun. 30, 2022
USD ($)
Jun. 30, 2024
USD ($)
Installment
qtr
Note
Jun. 30, 2023
USD ($)
Sep. 30, 2023
USD ($)
Long-term Debt, Excluding Current Maturities [Abstract]          
Current portion of subordinated promissory notes     $ 1,683   $ 1,988
Long-term portion of subordinated promissory notes     3,790   3,424
Gain on extinguishment of debt     $ 21 $ 0  
Aves Labs, Inc. [Member] | ICT Subordinated Promissory Note [Member]          
Long-term Debt, Excluding Current Maturities [Abstract]          
Annual fixed interest rate percentage     0.50%    
Face amount of debt     $ 1,850    
Number of consecutive installments | Installment     16    
Frequency of periodic payment     quarterly    
Debt instrument maturity date     Dec. 04, 2024    
Outstanding amount     $ 110   312
Current portion of subordinated promissory notes     $ 28   288
Long-term portion of subordinated promissory notes         24
Janel Group, Inc. [Member] | ELFS Subordinated Promissory Notes [Member]          
Long-term Debt, Excluding Current Maturities [Abstract]          
Number of subordinated promissory notes | Note     4    
Annual fixed interest rate percentage     4.00%    
Face amount of debt     $ 6,000    
Number of consecutive installments | Installment     12    
Frequency of periodic payment     quarterly    
Number of consecutive calendar quarters of payment from October 15, 2021 | qtr     8    
Number of consecutive calendar quarters of payment from October 15, 2023 | qtr     12    
Outstanding amount     $ 4,164   5,100
Current portion of subordinated promissory notes     1,174   1,700
Working capital adjustment $ 900 $ 900      
Long-term portion of subordinated promissory notes   $ 5,100 2,990   $ 3,400
Debt maturity extension 2 years        
Increase in working capital adjustment $ 6,000        
Subordinated net outstanding amount 4,654   3,340    
Unamortized debt discount 921   824    
Gain on extinguishment of debt $ 21        
Janel Group, Inc. [Member] | Airschott Subordinated Promissory Note [Member]          
Long-term Debt, Excluding Current Maturities [Abstract]          
Face amount of debt     $ 1,200    
Number of consecutive installments | Installment     12    
Frequency of periodic payment     quarterly    
Outstanding amount     $ 1,200    
Current portion of subordinated promissory notes     $ 400    
Basis spread on variable rate     2.00%    
Payments including accrued interest on the outstanding principal balance     $ 100    
v3.24.2.u1
SUBORDINATED PROMISSORY NOTES - RELATED PARTY, Amounts Outstanding (Details) - USD ($)
$ in Thousands
Jun. 30, 2024
Sep. 30, 2023
Subordinated Promissory Notes [Abstract]    
Less current portion of subordinated promissory notes $ (1,683) $ (1,988)
Long-term portion of subordinated promissory notes 3,790 3,424
Subsidiary of Common Parent [Member] | ICT and ELFS Subordinated Promissory Notes [Member]    
Subordinated Promissory Notes [Abstract]    
Total subordinated promissory notes 5,473 5,412
Less current portion of subordinated promissory notes (1,683) (1,988)
Long-term portion of subordinated promissory notes $ 3,790 $ 3,424
v3.24.2.u1
STOCKHOLDERS' EQUITY (Details) - Series C Cumulative Preferred Stock [Member] - $ / shares
 9 Months Ended 12 Months Ended
Mar. 31, 2022
Oct. 16, 2017
Jun. 30, 2024
Sep. 30, 2023
Series C Cumulative Preferred Stock [Abstract]        
Preferred stock, dividend rate 5.00% 7.00% 6.00% 5.00%
Share price (in dollars per share)   $ 500    
Annual increase in dividend rate   2.00% 1.00%  
Period of increase in dividend rate     4 years  
Maximum [Member]        
Series C Cumulative Preferred Stock [Abstract]        
Preferred stock, dividend rate   13.00% 9.00%  
v3.24.2.u1
STOCK-BASED COMPENSATION, Expense and Authorized (Details) - USD ($)
$ in Thousands
 9 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Sep. 21, 2021
Sep. 20, 2021
Oct. 30, 2013
Selling, General and Administrative Expenses [Member]          
Share-based Compensation [Abstract]          
Stock-based compensation $ 214 $ 185      
2013 Option Plan [Member]          
Share-based Compensation [Abstract]          
Options to purchase common stock for issuance (in shares)         100,000
2017 Plan [Member]          
Share-based Compensation [Abstract]          
Options to purchase common stock for issuance (in shares)       100,000  
Amended 2017 Plan [Member]          
Share-based Compensation [Abstract]          
Options to purchase common stock for issuance (in shares)     200,000    
v3.24.2.u1
STOCK-BASED COMPENSATION, Employee Stock Options (Details) - Stock Options [Member] - Employee [Member] - USD ($)
 9 Months Ended 12 Months Ended
Jun. 30, 2024
Sep. 30, 2023
Number of Options [Roll Forward]    
Outstanding, beginning balance (in shares) 40,993  
Granted (in shares) 12,500  
Expired (in shares) (3,500)  
Outstanding, ending balance (in shares) 49,993 40,993
Exercisable, ending balance (in shares) 24,162  
Weighted Average Exercise Price [Roll Forward]    
Outstanding, beginning balance (in dollars per share) $ 22.53  
Granted (in dollars per share) 28.25  
Expired (in dollars per share) 3.25  
Outstanding, ending balance (in dollars per share) 25.31 $ 22.53
Exercisable, ending balance (in dollars per share) $ 12.63  
Weighted Average Remaining Contractual Term [Abstract]    
Outstanding 7 years 1 month 6 days 6 years 7 months 6 days
Granted 9 years 3 months 18 days  
Exercisable 5 years 6 months  
Aggregate Intrinsic Value [Abstract]    
Outstanding, beginning balance $ 962,270  
Granted 193,500  
Expired 0  
Outstanding, ending balance 1,014,090.00 $ 962,270
Exercisable, ending balance $ 751,520  
Share price (in dollars per share) $ 43.73  
Total unrecognized compensation expense $ 344,000  
Weighted-average vesting period 2 years  
v3.24.2.u1
STOCK-BASED COMPENSATION, Liability Classified Share-based Awards (Details) - Stock Options [Member] - Indco [Member] - shares
 9 Months Ended 12 Months Ended
Jun. 30, 2024
Sep. 30, 2023
Number of Options [Roll Forward]    
Granted (in shares) 0 0
Exercised (in shares) 0 0
v3.24.2.u1
INCOME PER COMMON SHARE (Details) - USD ($)
$ / shares in Units, $ in Thousands
 3 Months Ended 9 Months Ended
Jun. 30, 2024
Mar. 31, 2024
Dec. 31, 2023
Jun. 30, 2023
Mar. 31, 2023
Dec. 31, 2022
Jun. 30, 2024
Jun. 30, 2023
INCOME PER COMMON SHARE [Abstract]                
Net Income (Loss) $ (191) $ 219 $ 276 $ (430) $ 218 $ 360 $ 304 $ 148
Preferred stock dividends (85)     (70)     (242) (212)
Net Income (Loss) Available to Common Stockholders $ (276)     $ (500)     $ 62 $ (64)
Common Shares [Abstract]                
Basic - weighted average common shares (in shares) 1,186,400     1,186,400     1,186,400 1,186,400
Stock options (in shares) 0     0     19,500 0
Diluted - weighted average common stock (in shares) 1,186,400     1,186,400     1,205,900 1,186,400
Income per Common Share - Basic [Abstract]                
Net income (loss) (in dollars per share) $ (0.16)     $ (0.36)     $ 0.25 $ 0.12
Preferred stock dividends (in dollars per share) (0.07)     (0.06)     (0.2) (0.17)
Net income (loss) available to common stockholders (in dollars per share) (0.23)     (0.42)     0.05 (0.05)
Income per Common Share - Diluted [Abstract]                
Net income (loss) (in dollars per share) (0.16)     (0.36)     0.25 0.12
Preferred stock dividends (in dollars per share) (0.07)     (0.06)     (0.2) (0.17)
Net income (loss) available to common stockholders (in dollars per share) $ (0.23)     $ (0.42)     $ 0.05 $ (0.05)
Number of dilutive securities (in shares) 10,000     22,500     10,000 22,500
v3.24.2.u1
INCOME TAXES (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Reconciliation of Income Tax [Abstract]        
Federal taxes at statutory rates $ (32) $ 129 $ (150) $ (45)
Permanent differences and other (184) 31 (91) (5)
State and local taxes, net of Federal benefit (127) 20 (171) (18)
Total $ (343) $ 180 $ (412) $ (68)
v3.24.2.u1
BUSINESS SEGMENT INFORMATION (Details)
$ in Thousands
 3 Months Ended 9 Months Ended
Jun. 30, 2024
USD ($)
Jun. 30, 2023
USD ($)
Jun. 30, 2024
USD ($)
Segment
Jun. 30, 2023
USD ($)
Sep. 30, 2023
USD ($)
Segment Reporting [Abstract]          
Number of reportable segments | Segment     3    
Revenues $ 46,724 $ 42,557 $ 129,881 $ 144,979  
Forwarding expenses and cost of revenues 31,633 28,898 86,822 102,654  
Gross profit 15,091 13,659 43,059 42,325  
Selling, general and administrative 13,358 12,948 38,664 38,261  
Amortization of intangible assets 555 524 1,635 1,593  
Income from Operations 1,178 187 2,760 2,471  
Interest expense 589 528 1,663 1,476  
Identifiable assets 108,566 99,566 108,566 99,566 $ 96,834
Capital expenditures, net of disposals 331 89 658 267  
Corporate [Member]          
Segment Reporting [Abstract]          
Revenues 0 0 0 0  
Forwarding expenses and cost of revenues 0 0 0 0  
Gross profit 0 0 0 0  
Selling, general and administrative 1,309 1,090 3,807 3,511  
Amortization of intangible assets 555 524 1,635 1,593  
Income from Operations (1,864) (1,614) (5,442) (5,104)  
Interest expense 0 0 0 0  
Identifiable assets 50,092 46,247 50,092 46,247  
Capital expenditures, net of disposals 0 0 0 0  
Logistics [Member] | Reportable Segments [Member]          
Segment Reporting [Abstract]          
Revenues 40,677 37,484 111,991 129,162  
Forwarding expenses and cost of revenues 29,725 27,241 81,232 97,339  
Gross profit 10,952 10,243 30,759 31,823  
Selling, general and administrative 9,444 9,629 27,186 27,891  
Amortization of intangible assets 0 0 0 0  
Income from Operations 1,508 614 3,573 3,932  
Interest expense 426 347 1,188 1,006  
Identifiable assets 42,025 38,066 42,025 38,066  
Capital expenditures, net of disposals 21 89 47 214  
Life Sciences [Member] | Reportable Segments [Member]          
Segment Reporting [Abstract]          
Revenues 3,208 2,811 10,213 8,717  
Forwarding expenses and cost of revenues 609 575 2,065 1,930  
Gross profit 2,599 2,236 8,148 6,787  
Selling, general and administrative 1,812 1,512 5,307 4,592  
Amortization of intangible assets 0 0 0 0  
Income from Operations 787 724 2,841 2,195  
Interest expense 97 86 245 165  
Identifiable assets 12,075 11,025 12,075 11,025  
Capital expenditures, net of disposals 302 0 603 51  
Manufacturing [Member] | Reportable Segments [Member]          
Segment Reporting [Abstract]          
Revenues 2,839 2,262 7,677 7,100  
Forwarding expenses and cost of revenues 1,299 1,082 3,525 3,385  
Gross profit 1,540 1,180 4,152 3,715  
Selling, general and administrative 793 717 2,364 2,267  
Amortization of intangible assets 0 0 0 0  
Income from Operations 747 463 1,788 1,448  
Interest expense 66 95 230 305  
Identifiable assets 4,374 4,228 4,374 4,228  
Capital expenditures, net of disposals $ 8 $ 0 $ 8 $ 2  
v3.24.2.u1
FAIR VALUE MEASUREMENTS, Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($)
$ / shares in Units, $ in Thousands
 3 Months Ended 9 Months Ended
Jun. 05, 2024
Oct. 23, 2023
Aug. 19, 2022
Dec. 31, 2023
Jun. 30, 2024
Dec. 01, 2023
Sep. 30, 2023
Liabilities [Abstract]              
Common stock, par value (in dollars per share)         $ 0.001   $ 0.001
Contingent Deferred Consideration: [Abstract]              
Contingent earnout liability, current         $ 1,149   $ 592
Contingent earnout liability, noncurrent         $ 2,011   1,738
Airschott [Member]              
Contingent Deferred Consideration: [Abstract]              
Remaining percentage agreed to purchase 20.00%            
Period agreed for acquiring remaining percentage of acquiree 3 years       3 years    
Maximum threshold percentage agreed to purchase as deferred consideration 20.00%            
Gross profit rate for determining deferred compensation 1.25            
Gross profit trailing period for deferred consideration 12 months       12 months    
Floating rate sellers note $ 1,200            
Recurring Basis [Member]              
Liabilities [Abstract]              
Contingent earnout liabilities         $ 3,160   2,330
Recurring Basis [Member] | Level 1 [Member]              
Assets [Abstract]              
Investment in Rubicon at fair value         831   1,573
Liabilities [Abstract]              
Contingent earnout liabilities         2,070   0
Recurring Basis [Member] | Level 3 [Member]              
Liabilities [Abstract]              
Contingent earnout liabilities         $ 1,090   $ 2,330
Janel Group, Inc. [Member] | ELFS Subordinated Promissory Notes [Member]              
Liabilities [Abstract]              
Fixed earnout payments           $ 1,078  
Rubicon Technology, Inc. [Member]              
Liabilities [Abstract]              
Common stock shares acquired (in shares)     1,108,000        
Common stock, par value (in dollars per share)     $ 0.001        
Share price (in dollars per share)     $ 20        
Percentage of issued and outstanding shares of Rubicon         46.60%   46.60%
Fair value adjustments to Rubicon investment   $ 709          
Rubicon Technology, Inc. [Member] | Dividend Declared Q1 2023 [Member]              
Liabilities [Abstract]              
Dividend declared date         Oct. 04, 2023    
Cash dividend (in dollars per share)       $ 1.1      
Dividend record date         Oct. 16, 2023    
Dividends paid date         Oct. 23, 2023    
Dividends received   $ 1,219          
v3.24.2.u1
FAIR VALUE MEASUREMENTS, Changes in Fair Value of Investment in Rubicon Measured at Fair Value on Recurring Basis Utilizing Level 1 Assumptions (Details) - USD ($)
$ in Thousands
 9 Months Ended 12 Months Ended
Jun. 30, 2024
Sep. 30, 2023
Changes in Fair Value of Investment [Abstract]    
Balance beginning of period $ 1,573  
Balance end of period 831 $ 1,573
Recurring Basis [Member] | Level 1 [Member]    
Changes in Fair Value of Investment [Abstract]    
Balance beginning of period 1,573 2,371
Fair value adjustment to Rubicon investment (742) (798)
Balance end of period $ 831 $ 1,573
v3.24.2.u1
FAIR VALUE MEASUREMENTS, Changes in Fair Value of Contingent Earnout Liabilities Measured at Fair Value on Recurring Basis Utilizing Level 1 and Level 3 Assumptions (Details) - USD ($)
$ in Thousands
 9 Months Ended 12 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Sep. 30, 2023
Change in contingent consideration measured at fair value recurring basis using significant unobservable inputs (Level 1 and Level 3) [Roll Forward]      
Earnout payment $ (740) $ (1,693)  
Adjustments to earnout 553 0  
Recurring [Member] | Level 1 and Level 3 [Member] | Contingent Earnout Liabilities [Member]      
Change in contingent consideration measured at fair value recurring basis using significant unobservable inputs (Level 1 and Level 3) [Roll Forward]      
Balance beginning of period 2,330 $ 4,580 $ 4,580
Fair value of contingent consideration recorded in connection with business combinations 1,017   300
Earnout payment (740)   (1,693)
Adjustments to earnout 435   0
Fair value adjustment of contingent earnout liabilities 118   (857)
Balance at end of year $ 3,160   $ 2,330
v3.24.2.u1
LEASES (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Sep. 30, 2023
Lease Cost [Abstract]          
Operating lease cost $ 644 $ 523 $ 1,857 $ 1,540  
Short-term lease cost 38 150 125 283  
Total lease cost 682 $ 673 1,982 1,823  
Rent expense     1,982 $ 1,823  
Right of use assets 9,113   9,113   $ 7,460
Current portion of operating lease liabilities 2,445   2,445   2,020
Long-term lease liabilities $ 7,034   $ 7,034   $ 5,689
Weighted-average remaining lease term - operating leases 5 years 8 months 12 days   5 years 8 months 12 days   5 years 10 months 24 days
Weighted-average discount rate - operating leases 4.46%   4.46%   4.01%
Future Minimum Lease Commitments under Non-cancellable Leases [Abstract]          
2025 $ 2,906   $ 2,906    
2026 2,543   2,543    
2027 1,812   1,812    
2028 1,540   1,540    
2029 769   769    
Thereafter 1,656   1,656    
Total undiscounted lease payments 11,226   11,226    
Less imputed interest (1,747)   (1,747)    
Total lease obligations $ 9,479   $ 9,479    
Minimum [Member]          
Operating lease [Abstract]          
Operating lease term 1 month   1 month    
Maximum [Member]          
Operating lease [Abstract]          
Operating lease term 116 months   116 months    
Janel (PK) (USOTC:JANL)
過去 株価チャート
から 10 2024 まで 11 2024 Janel (PK)のチャートをもっと見るにはこちらをクリック
Janel (PK) (USOTC:JANL)
過去 株価チャート
から 11 2023 まで 11 2024 Janel (PK)のチャートをもっと見るにはこちらをクリック