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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Janel Corporation (PK) | USOTC:JANL | OTCMarkets | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 43.73 | 32.03 | 175.00 | 0.00 | 21:18:57 |
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)
|
Title of each class
|
Trading symbols(s)
|
Name of each exchange
on which registered
|
||
None
|
None
|
None
|
Large accelerated filer ☐
|
Accelerated filer
|
☐
|
Non-accelerated filer ☐
|
Smaller reporting company
|
☒
|
Emerging growth company
|
☐
|
Page
|
|||
3
|
|||
Item 1.
|
3
|
||
3
|
|||
4
|
|||
5
|
|||
6
|
|||
7
|
|||
Item 2.
|
25
|
||
Item 3.
|
37
|
||
Item 4.
|
37
|
||
39
|
|||
Item 1.
|
39
|
||
Item 1A.
|
39
|
||
Item 2.
|
39
|
||
Item 3.
|
39
|
||
Item 4.
|
39
|
||
Item 5.
|
39
|
||
Item 6.
|
40 | ||
41
|
ITEM 1. |
FINANCIAL STATEMENTS
|
June 30, 2020
(Unaudited)
|
September 30,
2019
|
|||||||
ASSETS
|
||||||||
Current Assets:
|
||||||||
Cash
|
$
|
2,679
|
$
|
2,163
|
||||
Accounts receivable, net of allowance for doubtful accounts
|
12,476
|
21,351
|
||||||
Inventory, net
|
3,956
|
4,371
|
||||||
Prepaid expenses and other current assets
|
354
|
531
|
||||||
Note receivable
|
71
|
139
|
||||||
Total current assets
|
19,536
|
28,555
|
||||||
Property and Equipment, net
|
4,044
|
3,954
|
||||||
Other Assets:
|
||||||||
Intangible assets, net
|
12,869
|
13,598
|
||||||
Goodwill
|
13,641
|
13,525
|
||||||
Operating lease right of use asset
|
1,498
|
—
|
||||||
Security deposits and other long-term assets
|
206
|
87
|
||||||
Total other assets
|
28,214
|
27,210
|
||||||
Total assets
|
$
|
51,794
|
$
|
59,719
|
||||
LIABILITIES
|
||||||||
Current Liabilities:
|
||||||||
Line of credit
|
$
|
5,923
|
$
|
8,391
|
||||
Accounts payable – trade
|
14,539
|
22,061
|
||||||
Accrued expenses and other current liabilities
|
2,562
|
2,272
|
||||||
Dividends payable
|
1,541
|
1,041
|
||||||
Current portion of subordinated promissory note
|
157
|
152
|
||||||
Short-term lease liabilities
|
438
|
—
|
||||||
Current portion of Paycheck Protection Program (PPP) loan
|
1,351
|
—
|
||||||
Current portion of long-term debt
|
919
|
828
|
||||||
Total current liabilities
|
27,430
|
34,745
|
||||||
Other Liabilities:
|
||||||||
Long-term debt
|
5,991
|
6,602
|
||||||
Paycheck Protection Program (PPP) loan
|
1,380
|
—
|
||||||
Subordinated promissory notes
|
424
|
541
|
||||||
Mandatorily redeemable non-controlling interest
|
619
|
619
|
||||||
Deferred income taxes
|
2,360
|
2,000
|
||||||
Long-term operating lease liabilities
|
1,082
|
—
|
||||||
Other liabilities
|
320
|
334
|
||||||
Total other liabilities
|
12,176
|
10,096
|
||||||
Total liabilities
|
39,606
|
44,841
|
||||||
STOCKHOLDERS’ EQUITY
|
||||||||
Preferred Stock, $0.001 par value; 100,000 shares authorized
|
||||||||
Series B 5,700 shares authorized and 331 and 631 shares issued and outstanding as of June 30, 2020 and September 30, 2019, respectively.
|
—
|
—
|
||||||
Series C 20,000 shares authorized and 20,000 shares issued and outstanding at June 30, 2020 and September 30, 2019, liquidation value of $13,041 and $12,541 at June 30,
2020 and September 30, 2019, respectively
|
—
|
—
|
||||||
Common stock, $0.001 par value; 4,500,000 shares authorized, 875,652 issued and 855,652 outstanding as of June 30, 2020 and 863,812 issued and 843,812 outstanding as of
September 30, 2019
|
1
|
1
|
||||||
Paid-in capital
|
14,739
|
15,075
|
||||||
Treasury stock, at cost, 20,000 shares
|
(240
|
)
|
(240
|
)
|
||||
Accumulated (deficit) earnings
|
(2,312
|
)
|
42
|
|||||
Total stockholders’ equity
|
12,188
|
14,878
|
||||||
Total liabilities and stockholders’ equity
|
$
|
51,794
|
$
|
59,719
|
Three Months Ended
June 30,
|
Nine Months Ended
June 30,
|
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
Revenue
|
$
|
18,498
|
$
|
20,311
|
$
|
57,440
|
63,607
|
|||||||||
Forwarding expenses and cost of revenues
|
13,405
|
14,225
|
40,064
|
44,664
|
||||||||||||
Gross profit
|
5,093
|
6,086
|
17,376
|
18,943
|
||||||||||||
Costs and Expenses:
|
||||||||||||||||
Selling, general and administrative
|
5,482
|
5,600
|
18,151
|
16,681
|
||||||||||||
Amortization of intangible assets
|
243
|
230
|
729
|
674
|
||||||||||||
Total Costs and Expenses
|
5,725
|
5,830
|
18,880
|
17,355
|
||||||||||||
(Loss) Income from Operations
|
(632
|
)
|
256
|
(1,504
|
)
|
1,588
|
||||||||||
Other Items:
|
||||||||||||||||
Interest expense net of interest income
|
(108
|
)
|
(183
|
)
|
(412
|
)
|
(543
|
)
|
||||||||
(Loss) Income Before Income Taxes
|
(740
|
)
|
73
|
(1,916
|
)
|
1,045
|
||||||||||
Income tax expense
|
(557
|
)
|
(103
|
)
|
(438
|
)
|
(356
|
)
|
||||||||
Net (Loss) Income
|
(1,297
|
)
|
(30
|
)
|
(2,354
|
)
|
689
|
|||||||||
Preferred stock dividends
|
(174
|
)
|
(150
|
)
|
(500
|
)
|
(420
|
)
|
||||||||
Net (Loss) Income Available to Common Stockholders
|
$
|
(1,471
|
)
|
$
|
(180
|
)
|
$
|
(2,854
|
)
|
$
|
269
|
|||||
Net (loss) Income per share
|
||||||||||||||||
Basic
|
$
|
(1.49
|
)
|
$
|
(0.04
|
)
|
$
|
(2.71
|
)
|
$
|
0.81
|
|||||
Diluted
|
$
|
(1.49
|
)
|
$
|
(0.04
|
)
|
$
|
(2.71
|
)
|
$
|
0.73
|
|||||
Net (loss) income per share attributable to common stockholders:
|
||||||||||||||||
Basic
|
$
|
(1.69
|
)
|
$
|
(0.22
|
)
|
$
|
(3.29
|
)
|
$
|
0.32
|
|||||
Diluted
|
$
|
(1.69
|
)
|
$
|
(0.22
|
)
|
$
|
(3.29
|
)
|
$
|
0.28
|
|||||
Weighted average number of shares outstanding:
|
||||||||||||||||
Basic
|
872,838
|
852,071
|
868,033
|
849,104
|
||||||||||||
Diluted
|
872,838
|
852,071
|
868,033
|
938,830
|
PREFERRED STOCK
|
COMMON STOCK
|
PAID-IN
CAPITAL
|
TREASURY STOCK
|
ACCUMULATED
EARNINGS
(DEFICIT)
|
TOTAL
EQUITY
|
|||||||||||||||||||||||||||||||
SHARES
|
|
$ |
SHARES
|
|
$ |
|
$ |
SHARES
|
|
$ |
|
$ |
|
$ | ||||||||||||||||||||||
Balance - September 30, 2019
|
20,631
|
$
|
—
|
863,812
|
$
|
1
|
$
|
15,075
|
20,000
|
$
|
(240
|
)
|
$
|
42
|
$
|
14,878
|
||||||||||||||||||||
Net Loss
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
(2,354
|
)
|
(2,354
|
)
|
|||||||||||||||||||||||||
Dividends to preferred stockholders
|
—
|
—
|
—
|
—
|
(500
|
)
|
—
|
—
|
—
|
(500
|
)
|
|||||||||||||||||||||||||
Conversion of Preferred B shares to Common Shares
|
(300
|
)
|
—
|
3,000
|
—
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||||||||||
Issuance of Restricted Stock
|
—
|
—
|
5,000
|
—
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||||||||||||||||
Restricted stock vested but not issued
|
—
|
—
|
—
|
—
|
(30
|
)
|
—
|
—
|
—
|
(30
|
)
|
|||||||||||||||||||||||||
Stock-based compensation
|
—
|
—
|
—
|
—
|
163
|
—
|
—
|
—
|
163
|
|||||||||||||||||||||||||||
Stock option exercise
|
—
|
—
|
3,840
|
—
|
31
|
—
|
—
|
—
|
31
|
|||||||||||||||||||||||||||
Balance – June 30, 2020
|
20,331
|
$
|
—
|
875,652
|
$
|
1
|
$
|
14,739
|
20,000
|
$
|
(240
|
)
|
$
|
(2,312
|
)
|
$
|
12,188
|
PREFERRED STOCK
|
COMMON STOCK
|
PAID-IN
CAPITAL
|
TREASURY STOCK
|
ACCUMULATED
EARNINGS
(DEFICIT)
|
TOTAL
EQUITY
|
|||||||||||||||||||||||||||||||
SHARES
|
|
$
|
SHARES
|
|
$ |
|
$ |
SHARES
|
|
$ |
|
$ |
|
$ | ||||||||||||||||||||||
Balance -September 30, 2018
|
21,271
|
$
|
—
|
837,951
|
$
|
1
|
$
|
15,872
|
20,000
|
$
|
(240
|
)
|
$
|
(606
|
)
|
$
|
15,027
|
|||||||||||||||||||
Net Income
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
689
|
689
|
|||||||||||||||||||||||||||
Cumulative effect of change in accounting principle
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
32
|
32
|
|||||||||||||||||||||||||||
Dividends to preferred stockholders
|
—
|
—
|
—
|
—
|
(420
|
)
|
—
|
—
|
—
|
(420
|
)
|
|||||||||||||||||||||||||
Restricted stock vested but not issued
|
—
|
—
|
—
|
—
|
(235
|
)
|
—
|
—
|
—
|
(235
|
)
|
|||||||||||||||||||||||||
Stock option exercise
|
—
|
—
|
9,461
|
—
|
72
|
—
|
—
|
—
|
72
|
|||||||||||||||||||||||||||
Stock-based compensation
|
—
|
—
|
—
|
—
|
251
|
—
|
—
|
—
|
251
|
|||||||||||||||||||||||||||
Balance – June 30, 2019
|
21,271
|
$
|
—
|
847,412
|
$
|
1
|
$
|
15,540
|
20,000
|
$
|
(240
|
)
|
$
|
115
|
$
|
15,416
|
Nine Months Ended
June 30,
|
||||||||
2020
|
2019
|
|||||||
Cash Flows From Operating Activities:
|
||||||||
Net (loss) income
|
$
|
(2,354
|
)
|
$
|
689
|
|||
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
|
||||||||
Provision for uncollectible accounts
|
137
|
353
|
||||||
Depreciation and amortization
|
198
|
229
|
||||||
Deferred income tax
|
360
|
318
|
||||||
Amortization of intangible assets
|
729
|
674
|
||||||
Amortization of acquired inventory valuation
|
597
|
195
|
||||||
Amortization of loan costs
|
7
|
7
|
||||||
Stock-based compensation
|
217
|
329
|
||||||
Changes in operating assets and liabilities, net of effects of acquisitions:
|
||||||||
Accounts receivable
|
8,738
|
(1,108
|
)
|
|||||
Inventory
|
(182
|
)
|
(161
|
)
|
||||
Prepaid expenses and other current assets
|
177
|
(276
|
)
|
|||||
Security deposits and other long term assets
|
(51
|
)
|
(8
|
)
|
||||
Accounts payable and accrued expenses
|
(7,317
|
)
|
1,910
|
|||||
Other liabilities
|
7
|
68
|
||||||
Net cash provided by operating activities
|
1,263
|
3,219
|
||||||
Cash Flows From Investing Activities:
|
||||||||
Acquisition of property and equipment, net of disposals
|
(288
|
)
|
(303
|
)
|
||||
Acquisitions
|
(115
|
)
|
(1,935
|
)
|
||||
Net cash used in investing activities
|
(403
|
)
|
(2,238
|
)
|
||||
Cash Flows From Financing Activities:
|
||||||||
Repayments of term loan
|
(519
|
)
|
(916
|
)
|
||||
Proceeds from stock option exercise
|
31
|
72
|
||||||
Line of credit, net
|
(2,472
|
)
|
712
|
|||||
Proceeds from PPP loan
|
2,727
|
-
|
||||||
Repayment of subordinated promissory notes
|
(111
|
)
|
(72
|
)
|
||||
Net cash used in financing activities
|
(344
|
)
|
(204
|
)
|
||||
Net increase in cash
|
516
|
777
|
||||||
Cash at beginning of the period
|
2,163
|
585
|
||||||
Cash at end of period
|
$
|
2,679
|
$
|
1,362
|
||||
Supplemental Disclosure of Cash Flow Information:
|
||||||||
Cash paid during the period for:
|
||||||||
Interest
|
$
|
420
|
$
|
542
|
||||
Income taxes
|
$
|
7
|
$
|
132
|
||||
Non-cash operating activities:
|
||||||||
Operating lease right of use asset
|
$
|
1,900
|
$
|
-
|
||||
Operating lease liabilities
|
||||||||
Non-cash investing activities:
|
$
|
1,917
|
$
|
-
|
||||
Contingent earn-out acquisition
|
$
|
-
|
$
|
50
|
||||
Subordinated Promissory notes of Honor
|
$
|
-
|
$
|
456
|
||||
Non-cash financing activities:
|
||||||||
Dividends declared to preferred stockholders
|
$
|
500
|
$
|
420
|
||||
Vested restricted stock unissued
|
$
|
30
|
$
|
235
|
1. |
BASIS OF PRESENTATION, SUMMARY OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
|
Three Months Ended
June 30,
|
Nine Months Ended
June 30,
|
|||||||
Service Type
|
2020
|
2020
|
||||||
Ocean import and export
|
$
|
6,376
|
$
|
18,113
|
||||
Freight forwarding
|
2,873
|
9,335
|
||||||
Customs brokerage
|
2,411
|
7,716
|
||||||
Air import and export
|
3,905
|
11,808
|
||||||
Total
|
$
|
15,565
|
$
|
46,972
|
2. |
ACQUISITIONS
|
3. |
INVENTORY
|
June 30,
2020
|
September 30,
2019
|
|||||||
Finished Goods
|
$
|
2,484
|
$
|
2,988
|
||||
Work-in-Process
|
298
|
461
|
||||||
Raw Materials
|
1,201
|
946
|
||||||
Less - Reserve for Inventory Valuation
|
(27
|
)
|
(24
|
)
|
||||
Inventory Net
|
$
|
3,956
|
$
|
4,371
|
4. |
PROPERTY AND EQUIPMENT
|
June 30,
2020
|
September 30,
2019
|
Life
|
|||||||
Building and Improvements
|
$
|
2,672
|
$
|
2,577
|
15-30 Years
|
||||
Land and Improvements
|
869
|
835
|
Indefinite
|
||||||
Furniture & Fixtures
|
282
|
218
|
3-7 Years
|
||||||
Computer Equipment
|
302
|
465
|
3-5 Years
|
||||||
Machinery & Equipment
|
1,151
|
973
|
3-15 Years
|
||||||
Leasehold Improvements
|
183
|
181
|
Shorter of Lease Term or Asset Life
|
||||||
5,459
|
5,249
|
||||||||
Less: Accumulated Depreciation and Amortization
|
(1,415
|
)
|
(1,295
|
)
|
|||||
Property and Equipment Net
|
$
|
4,044
|
$
|
3,954
|
5. |
INTANGIBLE ASSETS
|
June 30,
2020
|
September 30,
2019
|
Life
|
|||||||
Customer Relationships
|
$
|
13,762
|
$
|
13,762
|
15-20 Years
|
||||
Trademarks / Names
|
2,251
|
2,251
|
20 Years
|
||||||
Other
|
978
|
978
|
2-5 Years
|
||||||
16,991
|
16,991
|
||||||||
Less: Accumulated Amortization
|
(4,122
|
)
|
(3,393
|
)
|
|||||
Intangible Assets Net
|
$
|
12,869
|
$
|
13,598
|
6. |
GOODWILL
|
June 30,
2020
|
September 30,
2019
|
|||||||
Global Logistics Services
|
$
|
5,655
|
$
|
5,655
|
||||
Manufacturing
|
5,046
|
5,046
|
||||||
Life Sciences
|
2,940
|
2,824
|
||||||
Total Goodwill
|
$
|
13,641
|
$
|
13,525
|
7.
|
NOTES PAYABLE – BANKS
|
(A) |
Santander Bank Facility
|
(B) |
First Merchants Bank Credit Facility
|
June 30,
2020
|
September 30,
2019
|
|||||||
Long Term Debt*
|
$
|
4,625
|
$
|
5,455
|
||||
Less Current Portion
|
(786
|
)
|
(786
|
)
|
||||
$
|
3,839
|
$
|
4,669
|
* |
Note: Long Term Debt is due in monthly installments of $65 plus monthly interest, at LIBOR plus 3.75% to 4.75% per annum. The note is collateralized by all of Indco’s assets and guaranteed by Janel.
|
(C) |
First Northern Bank of Dixon
|
June 30,
2020
|
September 30,
2019
|
|||||||
Long Term Debt*
|
$
|
2,285
|
$
|
1,975
|
||||
Less Current Portion
|
(133
|
)
|
(42
|
)
|
||||
$
|
2,152
|
$
|
1,933
|
* |
Note: Long Term Debt is due in monthly principal and interest installments of $12 plus monthly interest, at an effective interest rate of 4.18% as of June 30, 2020 and 5.28% as of September 2019, per annum. The
note is collateralized by real property owned by Antibodies and guaranteed by Janel.
|
8. |
SUBORDINATED PROMISSORY NOTES
|
June 30,
2020
|
September 30,
2019
|
|||||||
Long term subordinated promissory notes
|
$
|
581
|
$
|
693
|
||||
Less current portion of subordinated promissory note
|
(157
|
)
|
(152
|
)
|
||||
$
|
424
|
$
|
541
|
9. |
SBA PAYCHECK PROTECTION PROGRAM LOAN
|
10. |
STOCKHOLDERS’ EQUITY
|
(A) |
Preferred Stock
|
(B) |
Equity Incentive Plan
|
11. |
STOCK-BASED COMPENSATION
|
(A) |
Stock Options
|
• |
Risk-free interest rate - We determine the risk-free interest rate by using a weighted average assumption equivalent to the expected term based on the U.S. Treasury constant maturity rate.
|
• |
Expected term - We estimate the expected term of our options on the average of the vesting date and term of the option.
|
• |
Expected volatility - We estimate expected volatility using daily historical trading data of a peer group.
|
• |
Dividend yield - We have never paid dividends on our common stock and currently have no plans to do so; therefore, no dividend yield is applied.
|
Nine Months Ended
June 30,
2020
|
|||
Risk-free Interest Rate
|
1.59%
|
|
|
Expected Option Term in Years
|
5.5-6.5
|
||
Expected Volatility
|
101.2% - 101.7%
|
|
|
Dividend Yield
|
0%
|
|
|
Weighted Average Grant Date Fair Value
|
$6.97 - $7.33
|
Number of
Options
|
Weighted
Average Exercise
Price
|
Weighted Average
Remaining Contractual
Term (in years)
|
Aggregate
Intrinsic Value
(in thousands)
|
|||||||||||||
Outstanding Balance at September 30, 2019
|
110,837
|
$
|
5.05
|
5.98
|
$
|
438.06
|
||||||||||
Granted
|
7,500
|
$
|
9.00
|
9.25
|
$
|
—
|
||||||||||
Exercised
|
(3,841
|
)
|
$
|
8.17
|
—
|
$
|
—
|
|||||||||
Outstanding Balance at June 30, 2020
|
114,496
|
$
|
5.21
|
5.42
|
$
|
310.00
|
||||||||||
Exercisable on June 30, 2020
|
101,164
|
$
|
4.77
|
4.98
|
$
|
310.00
|
Number of
Options
|
Weighted
Average Exercise
Price
|
Weighted Average
Remaining Contractual
Term (in years)
|
Aggregate
Intrinsic Value
(in thousands)
|
|||||||||||||
Outstanding Balance at September 30, 2019
|
51,053
|
$
|
7.58
|
7.80
|
$
|
72.68
|
||||||||||
Forfeited
|
(15,000
|
)
|
$
|
8.04
|
—
|
$
|
—
|
|||||||||
Outstanding Balance at June 30, 2020
|
36,053
|
$
|
7.38
|
7.01
|
$
|
21.91
|
||||||||||
Exercisable on June 30, 2020
|
6,053
|
$
|
4.13
|
6.25
|
$
|
21.91
|
Nine Months Ended
June 30,
2020
|
|||
Risk-free Interest Rate
|
1.59%
|
|
|
Expected Option Term in Years
|
5.5 - 6.5
|
||
Expected Volatility
|
101.2% - 101.7%
|
|
|
Dividend Yield
|
0%
|
|
|
Weighted Average Grant Date Fair Value
|
$8.59 - $9.03
|
Number of
Options
|
Weighted
Average Exercise
Price
|
Weighted Average
Remaining Contractual
Term (in years)
|
Aggregate
Intrinsic Value
(in thousands)
|
|||||||||||||
Outstanding Balance at September 30, 2019
|
32,133
|
$
|
8.85
|
7.34
|
$
|
85.45
|
||||||||||
Granted
|
6,880
|
$
|
11.08
|
9.25
|
$
|
—
|
||||||||||
Outstanding Balance at June 30, 2020
|
39,013
|
$
|
9.24
|
7.06
|
$
|
85.45
|
||||||||||
Exercisable on June 30, 2020
|
25,343
|
$
|
7.98
|
6.24
|
$
|
85.45
|
(B) |
Restricted Stock
|
Restricted Stock
|
Weighted Average
Grant Date Fair Value
|
Weighted Average
Remaining
Contractual Term
(in years)
|
||||||||||
Unvested at September 30, 2019
|
5,000
|
$
|
8.01
|
0.61
|
||||||||
Vested
|
(5,000
|
)
|
$
|
8.01
|
—
|
|||||||
Unvested at June 30, 2020
|
—
|
$
|
—
|
—
|
Restricted Stock
(in thousands)
|
Weighted Average
Grant Date Fair Value
|
Weighted Average
Remaining
Contractual Term
(in years)
|
||||||||||
Unvested at September 30, 2019
|
26,667
|
$
|
8.04
|
0.88
|
||||||||
Vested
|
(3,333
|
)
|
$
|
—
|
—
|
|||||||
Unvested at June 30, 2020
|
23,334
|
$
|
8.04
|
0.16
|
12.
|
INCOME PER COMMON SHARE
|
For the Three Months Ended
June 30,
|
For the Nine Months Ended
June 30,
|
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
Income:
|
||||||||||||||||
Net income (loss)
|
$
|
(1,297
|
)
|
$
|
(30
|
)
|
$
|
(2,354
|
)
|
$
|
689
|
|||||
Preferred stock dividends
|
(174
|
)
|
(150
|
)
|
(500
|
)
|
(420
|
)
|
||||||||
Net Income (loss) available to common stockholders
|
$
|
(1,471
|
)
|
$
|
(180
|
)
|
$
|
(2,854
|
)
|
$
|
269
|
|||||
Common Shares:
|
||||||||||||||||
Basic - weighted average common shares
|
872,838
|
852,071
|
868,033
|
849,104
|
||||||||||||
Effect of dilutive securities:
|
||||||||||||||||
Stock options
|
—
|
—
|
—
|
56,697
|
||||||||||||
Restricted stock
|
—
|
—
|
—
|
20,319
|
||||||||||||
Convertible preferred stock
|
—
|
—
|
—
|
12,710
|
||||||||||||
Diluted - weighted average common stock
|
$
|
872,838
|
$
|
852,071
|
$
|
868,033
|
$
|
938,830
|
||||||||
Income per Common Share:
|
||||||||||||||||
Basic -
|
||||||||||||||||
Net income (loss)
|
$
|
(1.49
|
)
|
$
|
(0.04
|
)
|
$
|
(2.71
|
)
|
$
|
0.81
|
|||||
Preferred stock dividends
|
(0.20
|
)
|
(0.18
|
)
|
(0.58
|
)
|
(0.49
|
)
|
||||||||
Net Income (loss) available to common stockholders
|
$
|
(1.69
|
)
|
$
|
(0.22
|
)
|
$
|
(3.29
|
)
|
$
|
0.32
|
|||||
Diluted -
|
||||||||||||||||
Net income (loss)
|
$
|
(1.49
|
)
|
$
|
(0.04
|
)
|
$
|
(2.71
|
)
|
$
|
0.73
|
|||||
Preferred stock dividends
|
(0.20
|
)
|
(0.18
|
)
|
(0.58
|
)
|
(0.45
|
)
|
||||||||
Net income (loss) available to common stockholders
|
$
|
(1.69
|
)
|
$
|
(0.22
|
)
|
$
|
(3.29
|
)
|
$
|
0.28
|
June 30,
|
||||||||
2020
|
2019
|
|||||||
Employee Stock Options
|
114,496
|
110,837
|
||||||
Non-employee Stock Options
|
36,053
|
51,053
|
||||||
Employee Restricted Stock
|
5,000
|
5,000
|
||||||
Non-employee Restricted Stock
|
26,667
|
26,667
|
||||||
Convertible Preferred Stock
|
3,310
|
12,710
|
||||||
185,526
|
206,267
|
13. |
INCOME TAXES
|
Nine Months Ended
|
||||||||
June 30,
2020
|
June 30,
2019
|
|||||||
Federal taxes at statutory rates
|
$
|
402
|
(219
|
)
|
||||
Permanent differences
|
(332
|
)
|
(35
|
)
|
||||
Other
|
(451
|
)
|
-
|
|||||
State and local taxes
|
(57
|
)
|
(102
|
)
|
||||
Income tax expense
|
$
|
(438
|
)
|
(356
|
)
|
14. |
BUSINESS SEGMENT INFORMATION
|
For the three months ended
June 30, 2020
|
Consolidated
|
Global Logistics
Services
|
Manufacturing
|
Life Sciences
|
Corporate
|
|||||||||||||||
Revenue
|
$
|
18,498
|
$
|
15,565
|
$
|
1,605
|
$
|
1,328
|
$
|
-
|
||||||||||
Forwarding expenses and cost of revenues
|
13,405
|
12,194
|
752
|
459
|
-
|
|||||||||||||||
Gross profit
|
5,093
|
3,371
|
853
|
869
|
-
|
|||||||||||||||
Selling, general and administrative
|
5,482
|
3,429
|
482
|
951
|
620
|
|||||||||||||||
Amortization of intangible assets
|
243
|
-
|
-
|
-
|
243
|
|||||||||||||||
Operating (loss) income
|
(632
|
)
|
(58
|
)
|
371
|
(82
|
)
|
(863
|
)
|
|||||||||||
Interest expense (income) net
|
108
|
30
|
49
|
25
|
4
|
|||||||||||||||
Identifiable assets as of June 30, 2020
|
51,794
|
13,173
|
2,472
|
9,776
|
26,373
|
|||||||||||||||
Capital expenditures
|
$
|
157
|
$
|
28
|
$
|
11
|
$
|
118
|
$
|
-
|
For the nine months ended
June 30, 2020
|
Consolidated
|
Global Logistics
Services
|
Manufacturing
|
Life Sciences
|
Corporate
|
|||||||||||||||
Revenue
|
$
|
57,440
|
$
|
46,972
|
$
|
5,531
|
$
|
4,937
|
$
|
-
|
||||||||||
Forwarding expenses and cost of revenues
|
40,064
|
35,896
|
2,505
|
1,663
|
-
|
|||||||||||||||
Gross profit
|
17,376
|
11,076
|
3,026
|
3,274
|
-
|
|||||||||||||||
Selling, general and administrative
|
18,151
|
11,019
|
1,865
|
3,002
|
2,265
|
|||||||||||||||
Amortization of intangible assets
|
729
|
-
|
-
|
-
|
729
|
|||||||||||||||
Operating (loss) income
|
(1,504
|
)
|
57
|
1,161
|
272
|
(2,994
|
)
|
|||||||||||||
Interest expense (income) net
|
412
|
150
|
187
|
76
|
(1
|
)
|
||||||||||||||
Identifiable assets as of June 30, 2020
|
51,794
|
13,173
|
2,472
|
9,776
|
26,373
|
|||||||||||||||
Capital expenditures
|
$
|
288
|
$
|
92
|
$
|
34
|
$
|
162
|
$
|
-
|
For the three months ended
June 30, 2019
|
Consolidated
|
Global Logistics
Services
|
Manufacturing
|
Life Sciences
|
Corporate
|
|||||||||||||||
Revenue
|
$
|
20,311
|
$
|
16,708
|
$
|
2,419
|
$
|
1,184
|
$
|
—
|
||||||||||
Forwarding expenses and cost of revenues
|
14,225
|
12,872
|
1,066
|
287
|
—
|
|||||||||||||||
Gross profit
|
6,086
|
3,836
|
1,353
|
897
|
—
|
|||||||||||||||
Selling, general and administrative
|
5,600
|
3,600
|
492
|
795
|
713
|
|||||||||||||||
Amortization of intangible assets
|
230
|
—
|
—
|
—
|
230
|
|||||||||||||||
Operating income (loss)
|
256
|
236
|
861
|
102
|
(943
|
)
|
||||||||||||||
Interest expense (income) net
|
183
|
127
|
31
|
27
|
(2
|
)
|
||||||||||||||
Identifiable assets as of June 30, 2019
|
55,266
|
20,672
|
2,753
|
6,566
|
25,275
|
|||||||||||||||
Capital expenditures
|
$
|
50
|
$
|
—
|
$
|
26
|
$
|
24
|
$
|
—
|
For the nine months ended
June 30, 2019
|
Consolidated
|
Global Logistics
Services
|
Manufacturing
|
Life Sciences
|
Corporate
|
|||||||||||||||
Revenue
|
$
|
63,607
|
$
|
52,378
|
$
|
6,952
|
$
|
4,277
|
$
|
—
|
||||||||||
Forwarding expenses and cost of revenues
|
44,664
|
40,247
|
3,076
|
1,341
|
—
|
|||||||||||||||
Gross profit
|
18,943
|
12,131
|
3,876
|
2,936
|
—
|
|||||||||||||||
Selling, general and administrative
|
16,681
|
10,220
|
2,167
|
2,226
|
2,068
|
|||||||||||||||
Amortization of intangible assets
|
674
|
—
|
—
|
—
|
674
|
|||||||||||||||
Operating income (loss)
|
1,588
|
1,911
|
1,709
|
710
|
(2,742
|
)
|
||||||||||||||
Interest expense (income) net
|
543
|
352
|
107
|
91
|
(7
|
)
|
||||||||||||||
Identifiable assets as of June 30, 2019
|
55,266
|
20,672
|
2,753
|
6,566
|
25,275
|
|||||||||||||||
Capital expenditures
|
$
|
303
|
$
|
16
|
$
|
67
|
$
|
220
|
$
|
—
|
15. |
RISKS AND UNCERTAINTIES
|
(A) |
Currency Risks
|
(B) |
Concentration of Credit Risk
|
(C) |
Legal Proceedings
|
(D) |
COVID-19
|
16.
|
COMMITMENTS AND CONTINGENCIES
|
17. |
LEASES
|
Nine Months Ended
June 30,
2020
|
||||
Operating lease cost
|
$
|
559
|
||
Short-term lease cost
|
103
|
|||
Total lease cost
|
$
|
662
|
2020
|
$
|
485
|
||
2021
|
467
|
|||
2022
|
372
|
|||
2023
|
223
|
|||
2024
|
166
|
|||
Total undiscounted lease payments
|
1,713
|
|||
Less: Imputed interest
|
(193
|
)
|
||
Total lease obligations
|
$
|
1,520
|
18. |
SUBSEQUENT EVENTS
|
ITEM 2. |
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
accounts receivable valuation;
|
•
|
the useful lives of long-term assets;
|
•
|
the accrual of costs related to ancillary services the Company provides;
|
•
|
accrual of tax expense on an interim basis; and
|
•
|
inventory valuation.
|
Three Months Ended
June 30,
|
Nine Months Ended
June 30,
|
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
(in thousands)
|
(in thousands)
|
|||||||||||||||
Operating (loss) income
|
$
|
(632
|
)
|
$
|
256
|
$
|
(1,504
|
)
|
$
|
1,588
|
||||||
Amortization of intangible assets(1)
|
243
|
230
|
729
|
674
|
||||||||||||
Stock-based compensation(2)
|
68
|
93
|
217
|
329
|
||||||||||||
Amortization of acquired inventory valuation(3)
|
150
|
66
|
597
|
195
|
||||||||||||
Adjusted operating (loss) income
|
$
|
(171
|
)
|
$
|
645
|
$
|
39
|
$
|
2,786
|
(1) |
Amortization of intangible assets represents non-cash amortization expense or impairment expense, if any, attributable to acquisition-related intangible assets, including any portion that is allocated to
noncontrolling interests. Management believes that making this adjustment aids in comparing the Company’s operating results with other companies in our industry that have not engaged in acquisitions.
|
(2) |
The Company eliminates the impact of stock-based compensation because it does not consider such non-cash expenses to be indicative of the Company’s core operating performance. The exclusion of stock-based
compensation expenses also facilitates comparisons of the Company’s underlying operating performance on a period-to-period basis.
|
(3) |
The Company has excluded the impact of amortization of acquired inventory valuation in connection with acquisitions as such adjustments represent non-cash items, are not consistent in amount and frequency and are
significantly impacted by the timing and size of the Company’s acquisitions.
|
Three Months Ended
June 30,
|
Nine Months Ended
June 30,
|
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
(in thousands)
|
(in thousands)
|
|||||||||||||||
Revenue:
|
||||||||||||||||
Global Logistics Services
|
$
|
15,565
|
$
|
16,708
|
$
|
46,972
|
$
|
52,378
|
||||||||
Manufacturing
|
1,605
|
2,419
|
5,531
|
6,952
|
||||||||||||
Life Sciences
|
1,328
|
1,184
|
4,937
|
4,277
|
||||||||||||
Total Revenues
|
18,498
|
20,311
|
57,440
|
63,607
|
||||||||||||
Gross Profit:
|
||||||||||||||||
Global Logistics Services
|
3,371
|
3,836
|
11,076
|
12,131
|
||||||||||||
Manufacturing
|
853
|
1,353
|
3,026
|
3,876
|
||||||||||||
Life Sciences
|
869
|
897
|
3,274
|
2,936
|
||||||||||||
Total Gross Profit
|
5,093
|
6,086
|
17,376
|
18,943
|
||||||||||||
Income (loss) from Operations:
|
||||||||||||||||
Global Logistics Services
|
(58
|
)
|
236
|
57
|
1,911
|
|||||||||||
Manufacturing
|
371
|
861
|
1,161
|
1,709
|
||||||||||||
Life Sciences
|
(82
|
)
|
102
|
272
|
710
|
|||||||||||
Total Income from Operations by Segment
|
231
|
1,199
|
1,490
|
4,330
|
||||||||||||
Corporate administrative expense
|
(620
|
)
|
(713
|
)
|
(2,265
|
)
|
(2,068
|
)
|
||||||||
Amortization expense
|
(243
|
)
|
(230
|
)
|
(729
|
)
|
(674
|
)
|
||||||||
Interest expense, net
|
(108
|
)
|
(183
|
)
|
(412
|
)
|
(543
|
)
|
||||||||
Net (loss) income before taxes
|
(740
|
)
|
73
|
(1,916
|
)
|
1,045
|
||||||||||
Income tax expense
|
(557
|
)
|
(103
|
)
|
(438
|
)
|
(356
|
)
|
||||||||
Net (loss) income
|
$
|
(1,297
|
)
|
$
|
(30
|
)
|
$
|
(2,354
|
)
|
$
|
689
|
|||||
Preferred stock dividends
|
(174
|
)
|
(150
|
)
|
(500
|
)
|
(420
|
)
|
||||||||
Net (Loss) Income available to Common Stockholders
|
$
|
(1,471
|
)
|
$
|
(180
|
)
|
$
|
(2,854
|
)
|
$
|
269
|
Three Months Ended
June 30,
|
Nine Months Ended
June 30,
|
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
(in thousands)
|
(in thousands)
|
|||||||||||||||
Corporate expenses
|
$
|
458
|
$
|
557
|
$
|
1,928
|
$
|
1,602
|
||||||||
Amortization of intangible assets
|
243
|
230
|
729
|
674
|
||||||||||||
Stock-based compensation
|
106
|
93
|
217
|
329
|
||||||||||||
Merger and acquisition expenses
|
56
|
63
|
120
|
137
|
||||||||||||
Total corporate expenses
|
$
|
863
|
$
|
943
|
$
|
2,994
|
$
|
2,742
|
Three Months Ended
June 30,
|
Nine Months Ended
June 30,
|
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
(in thousands)
|
(in thousands)
|
|||||||||||||||
Revenue
|
$
|
15,565
|
$
|
16,708
|
$
|
46,972
|
$
|
52,378
|
||||||||
Forwarding expenses
|
12,194
|
12,872
|
35,896
|
40,247
|
||||||||||||
Net revenue
|
3,371
|
3,836
|
11,076
|
12,131
|
||||||||||||
Gross profit margin
|
22
|
%
|
23
|
%
|
24
|
%
|
23
|
%
|
||||||||
Selling, general & administrative
|
3,429
|
3,600
|
11,019
|
10,220
|
||||||||||||
(Loss) income from operations
|
$
|
(58
|
)
|
$
|
236
|
$
|
57
|
$
|
1,911
|
Three Months Ended
June 30,
|
Nine Months Ended
June 30,
|
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
(in thousands)
|
(in thousands)
|
|||||||||||||||
Revenue
|
$
|
1,605
|
$
|
2,419
|
$
|
5,531
|
$
|
6,952
|
||||||||
Cost of sales
|
752
|
1,066
|
2,505
|
3,076
|
||||||||||||
Gross profit
|
853
|
1,353
|
3,026
|
3,876
|
||||||||||||
Gross profit margin
|
53
|
%
|
56
|
%
|
55
|
%
|
56
|
%
|
||||||||
Selling, general & administrative
|
482
|
492
|
1,865
|
2,167
|
||||||||||||
Income from Operations
|
$
|
371
|
$
|
861
|
$
|
1,161
|
$
|
1,709
|
Three Months Ended
June 30,
|
Nine Months Ended
June 30,
|
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
(in thousands)
|
(in thousands)
|
|||||||||||||||
Revenue
|
$
|
1,328
|
$
|
1,184
|
$
|
4,937
|
$
|
4,277
|
||||||||
Cost of sales
|
459
|
287
|
1,663
|
1,341
|
||||||||||||
Gross profit
|
869
|
897
|
3,274
|
2,936
|
||||||||||||
Gross profit margin
|
65
|
%
|
76
|
%
|
66
|
%
|
69
|
%
|
||||||||
Selling, general & administrative
|
951
|
795
|
3,002
|
2,226
|
||||||||||||
Income (loss) from Operations
|
$
|
(82
|
)
|
$
|
102
|
$
|
272
|
$
|
710
|
ITEM 3. |
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
|
ITEM 4. |
CONTROLS AND PROCEDURES
|
ITEM 1A. |
RISK FACTORS
|
ITEM 2. |
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
ITEM 3. |
DEFAULTS UPON SENIOR SECURITIES
|
ITEM 4. |
MINE SAFETY DISCLOSURES
|
ITEM 5. |
OTHER INFORMATION
|
Exhibit No.
|
|
Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer (filed herewith)
|
|
Rule 13a-14(a)/15d-14(a) Certification of Principal Financial Officer (filed herewith)
|
|
Section 1350 Certification of Principal Executive Officer (filed herewith)
|
|
Section 1350 Certification of Principal Financial Officer (filed herewith)
|
|
101
|
Interactive data files providing financial information from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2020 for the nine months ended June 30, 2020 and 2019 in
XBRL (Extensible Business Reporting Language) pursuant to Rule 405 of Regulation S-T: (i) Consolidated Balance Sheets as of June 30, 2020 and September 30, 2019, (ii) Consolidated Statements of Operations for the nine months ended June 30,
2020 and 2019, (iii) Consolidated Statement of Changes in Stockholders’ Equity for the nine months ended June 30, 2020 and 2019, (iv) Consolidated Statements of Cash Flows for the nine months ended June 30, 2020 and 2019, and (v) Notes to
Consolidated Financial Statements.
|
Dated: August 7, 2020
|
JANEL CORPORATION
|
Registrant
|
|
/s/ Dominique Schulte
|
|
Dominique Schulte
|
|
Chairman, President and Chief Executive Officer
|
|
(Principal Executive Officer)
|
Dated: August 7, 2020
|
JANEL CORPORATION
|
Registrant
|
|
/s/ Vincent A. Verde
|
|
Vincent A. Verde
|
|
Principal Financial Officer, Treasurer and Secretary
|
1 Year Janel (PK) Chart |
1 Month Janel (PK) Chart |
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