UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For
the quarterly period ended
| 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:
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of | (I.R.S. Employer | |
| incorporation or organization) | Identification No.) |
(Address of principal executive offices, including zip code)
Tel:
(Registrant’s telephone number, including area code)
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| The
|
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES ☐ NO ☒
Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. YES ☐ NO ☒
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.
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).
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 definition 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 | ☐ |
| ☒ | Smaller reporting company | ||
| Emerging growth company |
If
an emerging growth company, indicate by check mark if this 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 Exchange Act). Yes ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate
by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
7
As of May 15, 2025, the Company had shares of common stock, $ par value, issued and outstanding.
Documents Incorporated by Reference: None.
CALLAN JMB INC.
FORM 10-Q
TABLE OF CONTENTS
| 2 |
CALLAN JMB INC.
(Formerly known as Coldchain Technology Services, LLC)
CONDENSED CONSOLIDATED BALANCE SHEETS as of
March 31, 2025 (Unaudited) AND DECEMBER 31, 2024
| March 31, 2025 | December 31, 2024 | |||||||
| Assets | ||||||||
| Current Assets: | ||||||||
| Cash | $ | $ | ||||||
| Accounts receivable, net of allowance for credit losses of $ | ||||||||
| Inventory | ||||||||
| Related party loans | ||||||||
| Tax refund receivable | ||||||||
| Prepaid insurance | ||||||||
| Other current assets | ||||||||
| Deferred offering costs | ||||||||
| Total current assets | ||||||||
| Right of use asset | ||||||||
| Property and equipment, net | ||||||||
| Security deposit | ||||||||
| Total assets | $ | $ | ||||||
| Liabilities and Stockholders’ Equity | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued expenses – Note 5 | ||||||||
| Corporate taxes payable | ||||||||
| Deferred revenue | ||||||||
| Right of use liability – current | ||||||||
| Total current liabilities | ||||||||
| Right of use liability | ||||||||
| Deferred tax liability | ||||||||
| Total long-term liabilities | ||||||||
| Total liabilities | ||||||||
| Commitments and Contingencies – Note 10 | ||||||||
| Stockholders’ Equity | ||||||||
| Preferred stock - authorized shares, $ par value; issued and outstanding as of March 31, 2025 and December 31, 2024 | ||||||||
| Common stock - authorized shares, par value $ par value; issued and outstanding as of March 31, 2025 and December 31, 2024 | ||||||||
| Additional Paid in Capital | ||||||||
| Accumulated Deficit | ( | ) | ( | ) | ||||
| Total Stockholders’ Equity | ||||||||
| Total Liabilities and Stockholders’ Equity | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 3 |
CALLAN JMB INC.
(Formerly known as Coldchain Technology Services, LLC)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2025 and 2024 (Unaudited)
| Three
months ended March 31, 2025 | Three
months ended March 31, 2024 | |||||||
| Revenue | $ | $ | ||||||
| Cost of revenue | ||||||||
| Gross profit | ||||||||
| Operating expenses | ||||||||
| Selling, general and administrative expenses | ||||||||
| Operating loss | ( | ) | ( | ) | ||||
| Other income (expenses) | ||||||||
| Interest income | ||||||||
| Interest expense | ( | ) | ( | ) | ||||
| Total other income (expenses) | ||||||||
| Loss before income taxes | ( | ) | ( | ) | ||||
| Provision (benefit) for income taxes | ( | ) | ||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Weighted average common shares outstanding - basic and diluted | ||||||||
| Net loss per common share - basic and diluted | $ | ) | $ | ) | ||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 4 |
CALLAN JMB INC.
(Formerly known as Coldchain Technology Services, LLC)
Condensed Consolidated Statement of Stockholders’ Equity for the Three Months ended March 31, 2025 and 2024
(Unaudited)
Callan JMB Inc.
(Formerly Coldchain Technology Services, LLC)
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 2025
| Additional | Total | |||||||||||||||||||||||||||
| Preferred Stock | Common Stock | Paid in | Accumulated | Stockholders’ | ||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Equity | ||||||||||||||||||||||
| January 1, 2025 | $ | $ | $ | $ | ( | ) | $ | | ||||||||||||||||||||
| Net loss | ( | ) | ( | ) | ||||||||||||||||||||||||
| Common stock issued in initial public offering, net of costs | ||||||||||||||||||||||||||||
| Common stock issued in initial public offering (over allotment), net of costs | ||||||||||||||||||||||||||||
| Stock based compensation | ||||||||||||||||||||||||||||
| March 31, 2025 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY / MEMBERS’ CAPITAL
FOR THE THREE MONTHS ENDED MARCH 31, 2024
| Total | ||||||||||||||||||||||||||||||||
| Stockholders’ | ||||||||||||||||||||||||||||||||
| Preferred Stock | Common Stock | Total | Additional | Equity/ | ||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Members’ Capital | Paid in Capital | Accumulated Deficit | Members’ Capital | |||||||||||||||||||||||||
| January 1, 2024 | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||
| Net loss | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Distributions | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Membership exchange for common stock | ( | ) | ||||||||||||||||||||||||||||||
| March 31, 2024 | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 5 |
CALLAN JMB INC.
(Formerly known as Coldchain Technology Services, LLC)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2025 AND 2024
(Unaudited)
| For the
three months ended March 31, 2025 | For the
three months ended March 31, 2024 | |||||||
| Cash flows from operating activities | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustment to reconcile net loss to net cash provided by (used in) operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Provision (Recovery) for credit losses | ( | ) | ||||||
| Stock based compensation | ||||||||
| Changes in operating assets and liabilities | ||||||||
| Accounts receivable | ( | ) | ( | ) | ||||
| Inventory | ( | ) | ( | ) | ||||
| Tax refund receivable | ||||||||
| Prepaid insurance | ( | ) | ||||||
| Other current assets | ( | ) | ||||||
| Right of use asset - net | ||||||||
| Security Deposits and other assets | ||||||||
| Accounts payable and accrued expenses | ( | ) | ||||||
| Deferred revenue | ( | ) | ( | ) | ||||
| Corporate taxes payable | ( | ) | ||||||
| Net cash provided by (used in) operating activities | ( | ) | ||||||
| Cash flows used in investing activities | ||||||||
| Purchase of property and equipment | ( | ) | ( | ) | ||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| Cash flows from (used in) financing activities | ||||||||
| Related party loans | ( | ) | ||||||
| Deferred offering costs | ( | ) | ||||||
| Partner distributions | ( | ) | ||||||
| Increase (decrease) in note payable | ( | ) | ||||||
| Proceeds from IPO and overallotment, net | ||||||||
| Net cash used in financing activities | ( | ) | ||||||
| Increase (decrease) in cash | ( | ) | ||||||
| Cash beginning of period | ||||||||
| Cash end of period | $ | $ | ||||||
| Supplemental disclosures of cash flow information: | ||||||||
| Cash paid for interest | $ | $ | ||||||
| Supplemental Schedule of Non-Cash Financing and Investing Activities: | ||||||||
| Membership exchange for common stock | $ | $ | ||||||
| Fair value of Stock Warrants issued at IPO | $ | $ | ||||||
| Deferred offering costs charged to additional paid-in-capital | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 6 |
CALLAN JMB INC.
(Formerly known as Coldchain Technology Services, LLC)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 – NATURE OF OPERATIONS
Callan JMB Inc. was formed on January 24, 2024, in the State of Nevada for the purpose of reorganizing and becoming a holding company for Coldchain Technology Services, LLC. Coldchain Technology Services, LLC (“CTS”) was formed on December 27, 2006, in the state of Texas. Coldchain Technology Services, LLC is our main operating subsidiary engaged in a vertically integrated logistics and fulfillment ecosystem that utilizes advanced predictive technology for the supply chain by guaranteeing the safety, effectiveness, and potency of every product handled to ensure product integrity, and to provide immediate response in time sensitive industries while ensuring environmental responsibility. The financial statements of Callan JMB Inc. (which may be referred to as the “Callan” “Company”, “we,” “us,” or “our”) are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The Company’s headquarters are located in Spring Branch, Texas.
The interim statements should be read in conjunction with the consolidated financial statements for the year ended December 31, 2024 and notes thereto contained in the Company’s Form 10-K filed with the Securities and Exchange Commission. The condensed consolidated balance sheet at December 31, 2024 has been derived from the audited financial statements at that date. The results of operations for the three months ended March 31, 2025 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2025.
NOTE 2 RECLASSIFICATIONS
Certain prior year amounts in the Consolidated Financial Statements and the notes thereto have been reclassified where necessary to conform to the current period’s presentation. These reclassifications did not affect the prior period’s total assets, total liabilities, stockholders’ equity, net income, or net cash provided by operating activities.
NOTE 3 – REORGANIZATION
Pursuant
to the Reorganization Agreement, each member of CTS exchanged
Pursuant to an Exchange and Reorganization Agreement, dated as of November 14, 2024, among the Company and all of the existing stockholders of the Company, such stockholders have exchanged all their existing shares for new shares at a ratio of 0.6 new share for 1 existing share. As a result of the exchange, the total number of shares of Company stock outstanding was reduced from shares to shares.
The following unaudited pro forma financial information has been prepared to reflect the effects of the reorganization of Coldchain Technology Services LLC (the “Company”) from a partnership to a C corporation on February 14, 2024. The pro-forma financial information presents the financial results of the Company as if it had been taxed as a C corporation for the three months ended March 31, 2024.
Callan JMB Inc.
(Formerly known as Coldchain Technology Services, LLC)
Balance Sheet
| Unaudited | ||||
| Pro-forma | ||||
| with tax accrual | ||||
| March 31, 2024 | ||||
| Assets | ||||
| Total assets | $ | |||
| Liabilities and Stockholders’ Equity | ||||
| Current Liabilities: | ||||
| Corporate taxes payable | ||||
| Related party loans | ||||
| Total current liabilities | ||||
| Total long-term liabilities | ||||
| Total liabilities | ||||
| Stockholders’ Equity | ||||
| Retained Earnings | ||||
| Total Stockholders’ Equity | ||||
| Total Liabilities and Stockholders’ Equity | $ | |||
| 7 |
Assumptions for each of the pro-forma balance sheets are below:
a. The Company was a C Corporation as of January 1, 2022.
b.
The pro forma balance sheets include an accrual for federal tax and state corporate taxes at a “blended rate” of
c.
Stockholders/loan the Company $
d. The pro-forma adjustments do not include adjustments for deferred tax assets or liabilities due to the immateriality of the temporary differences at the date of the reorganization and are expected to reverse in the near term with minimal impact on the financial statements.
e. No other financial data is being shown as there is no impact to the conversion to a C-Corp.
| Unaudited | ||||||||
| Unaudited | Pro-forma | |||||||
| Actual | with tax accrual | |||||||
| March 31, 2024 | March 31, 2024 | |||||||
| Revenue | $ | $ | ||||||
| Operating income (loss) | ( | ) | ( | ) | ||||
| Provision for income taxes | ( | ) | ( | ) | ||||
| Net income (loss) | $ | ( | ) | $ | ( | ) | ||
| Basic and diluted income per common share | $ | ) | $ | ) | ||||
| Weighted-average number of common | ||||||||
| shares outstanding | ||||||||
| 8 |
CALLAN JMB INC.
(Formerly known as Coldchain Technology Services, LLC)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 4 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation:
The financial statements and related disclosures have been prepared in conformity with GAAP.
Principles of consolidation
The accompanying consolidated financial statements and related notes have been prepared in accordance with “U.S. GAAP” and present the consolidated financial statements of the Company and its wholly owned subsidiary. All significant intercompany transactions and balances are eliminated in consolidation.
Use of Estimates
The preparation of financial statements in conformity with GAAP, requires management to make estimates and assumptions about future events that affect the amounts reported in the consolidated financial statements and the accompanying notes. Management bases its estimates on historical experience and other assumptions that it believes to be reasonable at the time. Actual results could differ from those estimates, and any such differences may be material to the financial statements. Significant estimates are contained in the accompanying financial statements for the useful lives for depreciation and amortization of long-lived assets, allowance for credit losses, and the incremental borrowing rate used in determining the right-of-use liability.
Cash and Cash Equivalent
The
Company places its cash with high credit quality financial institutions. The Company’s account at these institutions are insured
by the Federal Deposit Insurance Corporation (“FDIC”) up to $
Accounts Receivable
Accounts
receivables are recorded at the invoiced amount. which is the amount the Company expects to collect from its customers. Generally, payment
is due from customers within 30-90 days of the invoice date. On a regular basis, the Company evaluates its accounts receivable and establishes
the allowance for credit losses based on an evaluation of certain criteria and evidence of collection uncertainty including historical
collection trends, reasonable expectations of future collections, current economic trends and changes in customer payment patterns. Past-due
receivable balances are written off when the Company’s collection efforts have been deemed unsuccessful in collecting the outstanding
balance due. The Company maintains an allowance for credit losses to reserve for potential uncollectible receivables. The allowance for
credit losses as of March 31, 2025 and December 31, 2024, was $
| 9 |
CALLAN JMB INC.
(Formerly known as Coldchain Technology Services, LLC)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Credit Concentration
The concentration of credit risks in accounts receivable is due to several large customers comprising the Company’s customer base throughout North America. The Company maintains policies over credit extension that include credit evaluations, credit limits and collection monitoring procedures on a customer-by-customer basis. However, the Company generally does not require collateral before services are performed.
The Company has several customers as of March 31, 2025 and 2024 that make up in excess of 10% of revenue as follows:
| Customer | 2025 | 2024 | ||||||
| 1 | % | % | ||||||
| 2 | % | % | ||||||
| 3 | % | % | ||||||
The Company has several customers as of March 31, 2025 and December 31, 2024 that make up in excess of 10% of accounts receivable as follows:
| Customer | 2025 | 2024 | ||||||
| 1 | % | % | ||||||
| 2 | % | % | ||||||
| 3 | % | % | ||||||
| 4 | % | % | ||||||
The Company has several vendors as of March 31, 2025 and December 31, 2024 that make up in excess of 10% of accounts payable as follows:
| Vendor | 2025 | 2024 | ||||||
| 1 | % | % | ||||||
| 2 | % | % | ||||||
| 3 | % | % | ||||||
The Company has several vendors as of March 31, 2025 and 2024 that make up equal to or more than 10% of services rendered to us as follows:
| Vendor | 2025 | 2024 | ||||||
| 1 | % | % | ||||||
| 2 | % | % | ||||||
| 3 | % | % | ||||||
| 10 |
CALLAN JMB INC.
(Formerly known as Coldchain Technology Services, LLC)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Inventory
Inventory is stated at the lower of cost (using the first-in, first-out method (“FIFO”)) or net realizable value. We continually analyze our slow moving and excess inventories. Based on historical and projected sales volumes and anticipated selling prices, we determined that establishing a reserve was not necessary at this time. Inventory that is in excess of current and projected use is reduced by an allowance to a level that approximates its estimate of future demand. Products that are determined to be obsolete are written down to net realizable value. The Company’s inventory is comprised of raw materials for a customers packaging needs as follows:
| March 31, 2025 | December 31, 2024 | |||||||
| Raw materials | $ | $ | ||||||
Property and Equipment
Property and equipment, net is stated at cost less accumulated depreciation. Expenditures for major renewals and improvements which extend the life or usefulness of the asset are capitalized. Items of an ordinary repair or maintenance nature are charged directly to operating expense as incurred. During the construction and development period of an asset, the costs incurred, including interest expense, are classified as construction-in-progress. When the asset is ready for its intended use, the asset is reclassified to an appropriate asset classification and depreciation, or amortization commences.
The Company depreciates and amortizes the capitalized cost of these assets, using the straight-line method as follows:
Asset Classification:
Computer
equipment
Furniture
and fixtures
Leasehold Improvements
Fully depreciated assets are retained in property, plant and equipment and accumulated depreciation until they are removed from service.
The Company tests for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. An impairment in the carrying value of long-lived assets is recognized if the expected future undiscounted cash flows derived from the assets, or group of assets, are less than their carrying value. The Company did not record any impairment charges related to long-lived assets in the periods presented.
Revenue Recognition
The Company recognizes revenue when control of the promised goods or services is transferred to the Company’s customers. Revenue is recorded at the transaction price, which is the amount that reflects the consideration the Company expects to receive in exchange for providing the goods or services. The Company’s primary performance obligations in our contracts with customers are to provide services related to emergency preparedness or to deliver specialty packaging. Most of the Company’s revenues are for services, which are recognized over time as the related time and materials are incurred at contractually agreed-upon rates. Product revenues are recognized at a point in time when the products are delivered and control transfers to the customer. The Company’s payment terms vary by the type of customers and the products or services offered. The periods between invoicing and when payments are due are not significant. Amounts billed to customers related to shipping and handling are classified as revenue, and the Company’s shipping and handling costs are included in costs of revenues.
| 11 |
CALLAN JMB INC.
(Formerly known as Coldchain Technology Services, LLC)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Disaggregation of Revenue
The following table presents our disaggregated revenues by distribution channel:
| Sales by distribution channel: | March 31, 2025 | March 31, 2024 | ||||||
| Emergency preparedness | $ | $ | ||||||
| Specialty packaging | ||||||||
| Total | $ | $ | ||||||
Emergency preparedness
| Sales by customer type: | March 31, 2025 | March 31, 2024 | ||||||
| Governmental | $ | $ | ||||||
| Non-governmental | ||||||||
| Total | $ | $ | ||||||
Emergency preparedness
Provides comprehensive services to mainly state and local governments, which includes managing their building sites, medical stockpiles of equipment, supplies and responding to state or local emergencies. We also provide Quality Control/Assurance to safeguard vaccines, medical supplies and equipment. Revenue is recognized when services are rendered, or medical supplies are shipped.
Perishable (non-pharma) Client Packaging.
Our specialty temperature-regulating packaging solutions provide a better thermal system to maintain and protect products and ensure peak customer experience. In utilizing this packaging, customers yield the benefits of lower costs and overhead while improving process, agility, velocity, accuracy, and repeatability of complex fulfillment networks. Revenue is recorded when products are delivered or services are rendered. The Company has a contract with a customer for cloud-based temperature monitoring software. The customer paid their contract in advance and therefore revenue is earned monthly over the term of the contract.
Stock Warrants
During the first quarter ended March 31, 2025, the Company granted stock warrants to various individuals of the underwriting firm that assisted the Company’s with its initial public offering on February 4, 2025. The stock warrants were issued in lieu of cash for a portion of their services. The Company accounts for its warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in ASC 480, “Distinguishing Liabilities from Equity” and ASC 815, “Derivatives and Hedging”. The assessment considers whether the warrants are freestanding financial instruments that would require classification as a liability under ASC 480, as well as whether the warrants qualify for equity classification or require liability classification after consideration of the guidance and criteria outlined in ASC 815, including whether the warrants are indexed to the Company’s own common shares and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions that impact classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance. For issued warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. As of March 31, 2025, the Company’s consolidated balance sheet included equity classified warrants, reported as additional paid in capital.
The Company provides share-based compensation to its employees and Board of Directors. The Company is required to exercise judgment and make estimates when determining the (i) fair value of each award granted and (ii) projected number of awards expected to vest. The Company calculates the fair value of all share-based awards at the date of grant using the Black-Scholes option-pricing model for stock options and Monte Carlo simulation model for market-based awards. The Company uses the straight-line method to amortize this fair value as compensation cost over the requisite service period. Any forfeitures are recognized as they occur.
| Three Months ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Stock Options | ||||||||
| Stock Warrants | ||||||||
| 12 |
CALLAN JMB INC.
(Formerly known as Coldchain Technology Services, LLC)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Cost of Revenues
Our cost of revenue primarily includes the amounts paid to outside service providers, monitoring, direct and indirect labor, warehouse rent and other related expenses.
Advertising Expense
Advertising
costs primarily consist of trade shows, other promotional expenses and the cost to retain our marketing firm. Advertising costs are expensed
as incurred. Advertising expense for the three months ended March 31, 2025 and 2024 was $1
Deferred Offering Costs
Deferred
offering costs consist of investment banking fees, professional fees and other expenses incurred through the balance sheet date that
are directly related to the IPO and that will be charged to Additional Paid in Capital upon the completion of the IPO. As of March 31, 2025 and December 31, 2024, the Company had deferred offering costs of $
and $
Deferred Revenue
Deferred
revenue represents customer billings for services that are not yet rendered and is primarily related to a customer invoice billed
before service was rendered and for billings of annual or multi-year service contracts. As of March 31, 2025 and December 31, 2024,
the Company has deferred revenue of $
Income Tax
Prior to the reorganization as described in Note 1, the Company’ historical operations were contained within a limited liability company. Accordingly, under the Internal Revenue Code, all taxable income or loss flowed through to its members until February 14, 2024. Therefore, no provision for federal income tax had been recorded in the accompanying financial statements for January 2024 and through February 14, 2024. Income from the Company was reported and taxed to the members on their individual tax returns. However, the Company has provided a provision for taxes in certain states that require an entity level tax.
Leases
The Company’s leases predominately relate to real estate equipment, such as vehicles and industrial equipment utilized in operations. Contracts are reviewed at inception to determine if the arrangement is a lease. The Company generally enters into long-term real estate leases with one to ten-year terms. In the normal course of business, the Company also enters into short-term leases having terms of one year or less. These leases are generally equipment leases entered into for short periods of time (e.g., daily, weekly, or monthly) to satisfy immediate and/or short-term operational needs of the business which can arise based upon the nature of particular services performed. The Company has elected not to recognize right-of-use (“ROU”) assets and lease liabilities for these short-term leases. Operating leases with terms exceeding one year are recognized as ROU assets and lease liabilities and measured at commencement date based on the present value of the future lease payments over the lease term. Certain of the Company’s real estate leases contain escalating future lease payments. Escalating lease payments that are based upon explicit amounts contained in the lease or an index (e.g., consumer price index) are included in the Company’s determination of future lease payments to determine the ROU asset and lease liability recognized at the commencement date. Any differences in the future lease payments from initial recognition are not anticipated to be material and will be recorded as variable lease cost in the period incurred. The variable lease cost will also include the Company’s portion of property tax, utilities, and common area maintenance. A significant portion of the Company’s real estate lease agreements include renewal periods at the Company’s option. The Company includes these renewal periods in the lease term only when renewal is reasonably certain based upon facts and circumstances specific to the lease and known by the Company. The Company uses its incremental borrowing rate available at the lease commencement date in determining the present value of future lease payments as the implicit rate is typically not readily determinable. For operating leases, lease cost is recognized on a straight-line basis over the lease term and is included in cost of revenues or selling, general and administrative expenses depending on the use of the asset. As of March 31, 2025 and December 31, 2024, the Company did not have any leases that were classified as finance leases.
| 13 |
CALLAN JMB INC.
(Formerly known as Coldchain Technology Services, LLC)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 5 – ACCRUED EXPENSES
Accrued expenses consist of the following:
| March 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| (unaudited) | ||||||||
| Payroll and related costs | $ | $ | ||||||
| Credit card | ||||||||
| Employment fee | ||||||||
| Settlement of lawsuit | ||||||||
| Director fees | ||||||||
| Other | ||||||||
| $ | $ | |||||||
NOTE 6 – RELATED PARTY TRANSACTIONS
Business Partner
Health Hero America, who is a related party by virtue of common ownership of the Company.
Cold
Chain Delivery Systems (“CCDS”), who is a related party by virtue of common ownership of the Company. As of March 31, 2025,
and December 31, 2024, the Company has $
Outlaw
Run Ranch (“ORR”) is a related party by virtue of common ownership of the Company. The Company pays $
Warehouse
Asset Management is a related party by virtue of common ownership. The Company’s leases its headquarters, warehouse, other warehouse
equipment and a box truck for $
During
the three months ended and March 31, 2025 and the year ended December 31, 2024 the Company made advancements of $
During the three months ended March 31, 2025 the Company awarded stock options to the CEO’s son as compensation for services rendered in a prior period (See Note 8 for valuation details).
Related party rent expenses are as follows:
| Three Months ended March 31, | ||||||||
| Related Party | 2025 | 2024 | ||||||
| ORR | $ | $ | ||||||
| Warehouse Asset Management | ||||||||
| Total | $ | 68,775 | $ | 42,600 | ||||
The Company has done an analysis under ASC 810 and has determined that the aforementioned related parties do not qualify as a Variable Interest Entity and therefore those entities were not consolidated in the preparation of the accompanying financial statements.
| 14 |
CALLAN JMB INC.
(Formerly known as Coldchain Technology Services, LLC)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 7 - SEGMENTS
Operating segments are identified as components of an enterprise for which separate discrete financial information is available for evaluation by the Company’s Chief Operating Decision Maker (“CODM”) to make decisions with respect to resource allocation and assessment of performance. To date, the Company has viewed its operations and manages its business as one operating segment. The results of its operating segment are reviewed monthly by the Company’s Chief Executive Officer and President, who has been identified as the CODM.
The CODM regularly assesses the performance of the single operating segment and reporting segment and decides how to allocate resources based on net income calculated on the same basis as net income reported in the Company’s statements of operations. The CODM is also regularly provided with expense information at a level consistent with that disclosed in the Company’s statements of operations.
NOTE 8 - EQUITY
During
February 2025, we completed our initial public offering (“IPO”) of shares of common stock at a price of $
per share, generating gross proceeds of $
Overview
The Company grants share-based compensation awards to the Company’s employees as provided by the 2024 Equity Incentive Plan (“2024 Plan”), which was approved by the Company’s stockholders on October 24, 2024. The 2024 Plan provides that grants may be in any of the following forms: incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock, restricted stock units, and performance awards. The 2024 Plan will be administered and interpreted by the Compensation Committee of the Board of Directors. The Compensation Committee has the authority to determine the individuals to whom grants will be made under the 2024 Plan, determine the type, size and terms of the grants, determine the time when grants will be made and the duration of any applicable exercise or restriction period (subject to the limitations of the 2024 Plan) and deal with any other matters arising under the 2024 Plan. All the employees of the Company and its subsidiaries are eligible for grants under the 2024 Plan. Non-employee directors and consultants of the Company are also eligible to receive grants under the 2024 Plan.
The Company has reserved shares of common stock for the granting of such awards. As of March 31, 2025, shares remain available for future grants. As of March 31, 2025, the Company has exceeded the permissible number of shares to be issued under the 2024 Plan by share awards. The Company plans to file an amended Form S-8 to register shares to account for the overallotment. During the three months ended March 31, 2025, the Company recognized share-based compensation expense of $, which is recorded in selling, general and administrative expenses on the condensed consolidated statement of operations.
| 15 |
CALLAN JMB INC.
(Formerly known as Coldchain Technology Services, LLC)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Stock Options
| Number of Awards | Weighted- Average Exercise Price | Weighted- Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value | |||||||||||||
| Outstanding at December 31, 2024 | ||||||||||||||||
| Granted | $ | |||||||||||||||
| Exercised | ||||||||||||||||
| Forfeited | ||||||||||||||||
| Outstanding at March 31, 2025 | $ | $ | ||||||||||||||
| Outstanding and exercisable | $ | $ | ||||||||||||||
| 2025 | ||||
| Expected life (in years) | ||||
| Expected stock price volatility | % | |||
| Risk-free interest rate | % | |||
| Dividend rate | % | |||
The risk-free interest rate was based on U.S. Treasury interest rates, the terms of which are consistent with the expected life of the stock options. Expected volatility was derived using the Company’s peer volatility calculated from its peer companies’ volatilities over the time period commensurate with the expected life of the stock options. The expected life for the stock options granted was calculated using the midpoint assumption equal to the time from the grate date to the midpoint of the weighted average vesting date and the expiration date. The Company does not currently pay dividends on its common stock nor does it expect to in the foreseeable future.
The weighted average grant date fair value of options granted was $per share. As of March 31, 2025, there was $of unrecognized expense for unvested stock options that is expected to be recognized over a weighted average period of years. During the three months ended March 31, 2025, the Company recognized share-based compensation expense of $, which is recorded in selling, general and administrative expenses on the condensed consolidated statement of operations.
Performance-Based Awards
During the first quarter ended March 31, 2025, the Company granted performance-based stock awards to its Chief Executive Officer. The grant date fair value was $ per share. The vesting is subject to the Company meeting certain business and financial goals by October 15, 2026. As of March 31, 2025, none of the performance-based awards were probable of vesting and thus no expense was recognized during the first quarter.
| 16 |
CALLAN JMB INC.
(Formerly known as Coldchain Technology Services, LLC)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Market-Based Awards
During
the first quarter ended Mach 31, 2025, the Company granted
market-based stock awards to its Chief Executive Officer. The weighted average grant date fair value was $
per share, which was calculated using a Monte Carlo simulation model. The vesting is subject to the Company meeting certain
market-based targets by October 15, 2026. The Company recognized $
| Performance-Based | Market-Based | |||||||||||||||
| Number of Awards | Weighted- Average Grant Date Fair Value | Number of Awards | Weighted- Average Grant Date Fair Value | |||||||||||||
| Outstanding at December 31, 2024 | ||||||||||||||||
| Granted | $ | $ | ||||||||||||||
| Change in units based on performance | ||||||||||||||||
| Forfeited | ||||||||||||||||
| Outstanding at March 31, 2025 | $ | $ | ||||||||||||||
Restricted Stock Units
During the three months ended March 31, 2025, the Company granted restricted stock units (“RSUs”) to its Board of Directors. The RSUs were awarded at a price equal to the market price of the Company’s underlying common stock on the date of grant. One-fourth of the RSUs vests each calendar quarter of 2025. During the three months ended March 31, 2025, the Company recognized share-based compensation expense of $, which is recorded in selling, general and administrative expenses on the condensed consolidated statement of operations.
Stock Warrants
| 2025 | ||||
| Expected life (in years) | ||||
| Expected stock price volatility | % | |||
| Risk-free interest rate | % | |||
| Dividend rate | % | |||
During the first quarter ended Mach 31, 2025, the Company fully recognized the fair value expense of $, which is included with other costs related to the Company’s issuance of common stock and presented as an offset to Additional Paid in Capital in the Condensed Consolidated Balance Sheet.
NOTE 10 - COMMITMENTS AND CONTINGENCIES
Legal Proceedings
The Company may be subject to legal proceedings and claims arising from contracts or other matters from time to time in the ordinary course of business.
During May 2024, the Company was sent a demand letter
alleging that the company breached the terms of a Customer Service Agreement with one of its vendors that it did business within a prior
year. The vendor alleges that the Company improperly terminated the agreement without proper notice and therefore owes it $
Management is not aware of any other pending or threatened litigation where the ultimate disposition or resolution could have a material adverse effect on its financial position, results of operations or liquidity.
NOTE 11 – SUBSEQUENT EVENTS
On
April 1, 2025, the Company entered into a new five-year lease with ORR (a related party) for warehouse space at a monthly rent of $
On April 1, 2025 the Company entered into a lease agreement, pursuant to
which the Company agreed to lease an approximately a
The Company has evaluated subsequent events that occurred after March 31, 2025, through May 15, 2025. There have been no other events or transactions during this time which would have a material effect on these consolidated financial statements.
| 17 |
PART II
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis is intended as a review of significant factors affecting our financial condition and results of operations for the periods indicated. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and the accompanying notes thereto included elsewhere in this Quarterly Report on Form 10-Q. Unless the context requires otherwise, references in this Quarterly Report on Form 10-Q to “we,” “us,” and “our” refer to Callan JMB Inc.
Forward-Looking Statements
The information in this discussion contains forward-looking statements and information within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, which are subject to the “safe harbor” created by those sections. These forward-looking statements include, but are not limited to, statements concerning our strategy, future operations, future financial position, future revenues, projected costs, prospects and plans and objectives of management. The words “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “plans,” “projects,” “will,” “would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements that we make. These forward-looking statements involve risks and uncertainties that could cause our actual results to differ materially from those in the forward-looking statements, including, without limitation, the risks set forth in our filings with the SEC. The forward-looking statements are applicable only as of the date on which they are made, and we do not assume any obligation to update any forward-looking statements
Overview
Callan JMB is a vertically integrated logistics and fulfillment company which provides thermal management logistics solutions to the life sciences industry through a combination of proprietary packaging, information technology and specialized cold chain logistics knowhow. We provide a system that utilizes advanced predictive technology to revolutionize the supply chain by guaranteeing the safety, effectiveness, and potency of every product handled to ensure product integrity, and to provide immediate response in time-sensitive industries while ensuring environmental responsibility.
Strategy
Our strategy involves leveraging our core competitive strengths to develop and maintain ongoing relationships with a diversified group of customers while continuing to grow our service lines, ensuring that we can meet our customers’ changing needs. We strive to be recognized as the premier provider of logistics and fulfillment of a broad range of value-added services based upon the breadth of those services, quality, responsiveness, customer service, information technologies, safety, and cost effectiveness.
We view our solutions as disruptive to the “older technologies” of dry ice and liquid nitrogen, in that our solutions are comprehensive and combine our competencies in configurations that are customized to our client’s requirements. We provide comprehensive, reliable, economic alternatives to all existing logistics solutions and services utilized for frozen shipping in the life sciences industry (e.g., personalized medicine, cell therapies, stem cells, cell lines, vaccines, diagnostic materials, semen, eggs, embryos, cord blood, organs, bio-pharmaceuticals, infectious substances, and other commodities that require continuous exposure to cryogenic or frozen temperatures). As part of our services, we provide the ability to monitor, record and archive crucial information for each shipment that can be used for scientific and regulatory purposes.
Seasonality
Based on our industry and our historic trends, we expect our operations to vary seasonally. Typically, revenue will be highest in the third and fourth calendar quarters and lowest in the first and second calendar quarters. These seasonal variations result in fluctuations in waste volumes due to weather conditions and general economic activity. We also expect that our operating expenses may be higher during the winter months due to periodic adverse weather conditions that can slow the collection of waste, resulting in higher labor and operational costs.
| 18 |
Results of Operations
Three Months Ended March 31, 2025, Compared to the Three Months Ended March 31, 2024
The following table provides certain selected financial information for the periods presented:
| 2025 | 2024 | Change | Change % | |||||||||||||
| Revenue | $ | 1,449,377 | $ | 1,790,521 | $ | (341,144 | ) | -19 | % | |||||||
| Cost of Revenue | 833,437 | 1,072,938 | (239,501 | ) | -22 | % | ||||||||||
| Gross Profit | 615,940 | 717,583 | (101,643 | ) | -14 | % | ||||||||||
| Operating Expenses: | ||||||||||||||||
| Selling, General and administrative expenses | 1,854,316 | 805,042 | 1,049,274 | 130 | % | |||||||||||
| Total operating expenses | 1,854,316 | 805,042 | 1,049,274 | 130 | % | |||||||||||
| Income (loss) from operations | (1,238,376 | ) | (87,459 | ) | (1,150,917 | ) | 1316 | % | ||||||||
| Other income (expense) | 2,146 | 326 | 1,820 | 558 | % | |||||||||||
| Income (loss) before income taxes | (1,236,230 | ) | (87,133 | ) | (1,149,097 | ) | 1319 | % | ||||||||
| Provision for income taxes | 4,360 | (6,000 | ) | 10,360 | -173 | % | ||||||||||
| Net income (loss) | $ | (1,240,590 | ) | $ | (81,133 | ) | $ | (1,159,457 | ) | 1429 | % | |||||
Revenue
Revenue for the three months ended March 31, 2025, was $1,449,377 as compared to $1,790,521 for the three months ended March 31, 2024, a decrease of $341,144. This decrease was due to the diminution in demand for our emergency preparedness services by certain states and local governments.
| 19 |
Cost of revenue
Cost of revenue for the three months ended March 31, 2025, was $833,437 as compared to $1,072,938 for the three months ended March 31, 2024, a decrease of $239,501. This decrease is primarily attributed to a decrease in revenue.
Operating Expenses
Selling, General and Administrative Expenses
Our selling, general and administrative costs include personnel costs, consulting and professional fees, and other overhead expenses. Selling, general and administrative expenses for the three months ended March 31, 2025, were $1,854,316, compared to $805,042 for the three months ended March 31, 2024, an increase of $1,049,274. The Company’s personnel costs increased by $100,795 for the three months ended March 31, 2025, compared to the same period in 2024 as a result of our change from a LLC to a corporation. That change required us to put our CEO on payroll for the first time and hire additional staff in anticipation of our IPO. The Company’s consulting and professional fees increased by $212,677 for the three months ended March 31, 2025, compared to the same period in 2024 as a result of hiring professionals to support our capital raising process for our initial public offering. The Company’s information technology support increased by $5,579 for the three months ended March 31, 2025, compared to the same period in 2024 as the result of the purchase of additional equipment and hosting software. The Company’s marketing and advertising increased by $189,707 for the three months ended March 31, 2025, compared to the same period in 2024 as a result of hiring a marketing firm that specializes in pharma-based businesses, and the hiring an investor relations firm for our IPO. Company’s other expenses decreased by $538,516 for the three months ended March 31, 2025, compared to the same period in 2024, increase in stock based compensation of $330,825, increase in employment agency fees of $100,000, increase in meals and travel of $28,283, increase in state and local taxes of $8,742, increase in director fees of $11,457, increase in other expenses of $74,048, and an increase in depreciation and amortization of $2,281, offset by decrease in reserves for credit losses of $17,120.
Other income (expense)
Other income (expense) for the three months ended March 31, 2025, was $2,146 and $326 for the three months ended March 31, 2024, respectively, an increase in other income of $1,820. This increased income was the result of an increase in interest income of $1,225, offset by decreases in interest expense of $3,045.
Liquidity and Capital Resources
Our principal liquidity requirements are for working capital to fund our operations and growth. To date, we have funded our liquidity requirements primarily through cash on hand, and cash flows from operations. As of March 31, 2025, we had $5,219,929 cash and cash equivalents.
| For Three Months Ended | ||||||||||||
| March 31, | ||||||||||||
| 2025 | 2024 | Change | ||||||||||
| Cash provided by (used in) operating activities | $ | (1,561,698 | ) | $ | 6,839 | $ | (1,568,537 | ) | ||||
| Cash provided by (used in) investing activities | $ | (15,000 | ) | $ | (44,656 | ) | $ | 29,656 | ||||
| Cash provided by (used in) financing activities | $ | 4,698,682 | $ | (3,460,286 | ) | $ | 8,158,968 | |||||
| Increase (decrease) in cash | $ | 3,121,984 | $ | (3,498,103 | ) | $ | 6,620,087 | |||||
| 20 |
Cash provided by (used in) operating activities
For the three months ended March 31, 2025, cash used in operating activities was $1,561,698 compared to cash provided by operating activities of $6,839 during the three months ended March 31, 2024, a decrease of $1,568,538. This decrease was primarily due to a decrease in net income of $1,159,457, decrease in provision for credit losses of $17,120, a decrease in accounts receivable of $12,749, a decrease in inventory of $49,776, a decrease in prepaid insurance/other current assets of $274,534, a decrease in accounts payable and accrued expenses of $326,661, a decrease in deferred revenue of $86,023, and offset by an increase in stock based compensation of $330,825, an increase in tax refund receivable of $6,377, an increase in right of use asset of $4,546, an increase in security deposits and other assets of $3,650, an increase in depreciation and amortization of $2,279, and an increase in corporate taxes payable of $10,106.
Cash provided by (used in) investing activities
For the three months ended March 31, 2025, cash used in investing activities was $15,000 compared to $44,656 for the three months ended March 31, 2024, a decrease of $29,656. The decrease is a result of less purchases of fixed assets during the three months ended March 31, 2025.
Cash provided by (used in) financing activities
During the three months ended March 31, 2025, cash provided by (used in) financing activities was $4.698,682 compared to ($3,420,286) during the three months ended March 31, 2024, an increase of $8,158,968. Our financing activities for the three months ended March 31, 2025 compared to March 31, 2024 included an increase in related party loans of $35,742, an increase in deferred offering costs of $25,000, an increase in partners distributions of $3,382,253 and an increase in notes payable of $35,960 and an increase in proceeds from IPO and overallotment, net of $4,680,013.
Off-Balance Sheet Arrangements
We have no off-balance sheet financing arrangements.
Recent Accounting Pronouncements
In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09). ASU 2023-09 is intended to enhance the decision usefulness of income tax disclosures and requires the disclosure of various disaggregated information, including an entity’s effective tax rate reconciliation as well as additional information on taxes paid. This ASU is effective on a prospective basis for annual periods beginning after December 15, 2024 with early adoption allowed. The Company is in the process of evaluating the effect of ASU 2023-09 on the financial statements.
The FASB issues ASUs to amend the authoritative literature in ASC. There have been a number of ASUs to date, including those above, that amend the original text of ASC. Management believes that those issued to date either (i) provide supplemental guidance, (ii) are technical corrections, (iii) are not applicable to us or (iv) are not expected to have a significant impact on our consolidated financial statements.
Recently Adopted Accounting Standards
In November 2023, the FASB issued ASU 2023-07 “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures.” These amendments require, among other things, that a public entity that has a single reportable segment provide all the disclosures required by the amendments in this ASU and all existing segment disclosures in Topic 208. The ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. A public entity should apply the amendments retrospectively to all periods presented in the consolidated financial statements. The Company adopted ASU 2023-07 for the year ending December 31, 2024 and it did not have a material impact on its consolidated financial statements. See Note 5 Segments for new disclosures related to significant expenses, the CODM and other segment items.
| 21 |
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Under SEC rules and regulations, because we are considered to be a “smaller reporting company,” we are not required to provide the information required by this item in this report.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Our Chief Executive Officer and Chief Financial Officer conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of March 31, 2025, to ensure that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the SEC, including to ensure that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as of March 31, 2025, our disclosure controls and procedures were not effective at the reasonable assurance level in that:
| ● | We do not have written documentation for some of our internal control policies and procedures. Written documentation of key internal controls over financial reporting is a requirement of Section 404 of the Sarbanes-Oxley Act. Management evaluated the impact of our failure to have written documentation for some of our internal controls and procedures on our assessment of our disclosure controls and procedures and has concluded that the control deficiency that resulted does not represent a material weakness. | |
| ● | We do not have complete segregation of duties within accounting functions, which is a basic internal control. Due to our size and nature, segregation of all conflicting duties may not always be possible and may not be economically feasible. However, to the extent possible, the initiation of transactions, the custody of assets and the recording of transactions should be performed by separate individuals. Management evaluated the impact of our failure to have segregation of duties on our assessment of our disclosure controls and procedures and procedures and has concluded that the control deficiency that resulted does not represent a material weakness. |
Our Chief Executive Officer and Chief Financial Officer do not expect that our disclosure controls or internal controls will prevent all errors and all fraud. Although our disclosure controls and procedures were designed to provide reasonable assurance of achieving their objectives and our Chief Executive Officer and Chief Financial Officer have determined that our disclosure controls and procedures are effective at doing so, a control system, no matter how well conceived and operated, can provide only reasonable, not absolute assurance that the objectives of the system are met. Further, the design of any control system is subject to resource constraints and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple errors or mistakes. Additionally, controls can be circumvented if there exists in an individual a desire to do so. There can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
(b) Changes in Internal Controls Over Financial Reporting
There were no changes in our internal controls over financial reporting that occurred during the last fiscal quarter covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
| 22 |
PART II — OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We are not currently a party to any material legal proceedings. From time to time, we may become involved in legal proceedings arising in the ordinary course of our business. Regardless of outcome, litigation can have an adverse impact on us due to defense and settlement costs, diversion of management resources, negative publicity, reputational harm and other factors.
ITEM 1A. RISK FACTORS
Factors that could cause our actual results to differ materially from those in this Quarterly Report are any of the risks described in the Form 10-K for the year ended December 31, 2024, any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations. As of the date of this Quarterly Report, there have been no material changes to the risk factors disclosed in the Form 10-K for the year ended December 31, 2024. We may disclose changes to such factors or disclose additional factors from time to time in our future filings with the SEC.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Recent Sale of Unregistered Equity Securities
During the quarter ended March 31, 2025 no unregistered sales of equity securities occurred.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
None.
ITEM 6. EXHIBITS
| * | Filed herewith. |
| ** | Furnished herewith. |
| 23 |
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.
| CALLAN JMB INC. | ||
| By: | /s/ Wayne Williams | |
| Wayne Williams | ||
| Chief Executive Officer, President, and Chairman of the Board | ||
| SIGNATURE | TITLE | DATE | ||
| /s/ Wayne Williams | Chief Executive Officer, President (Principal Executive Officer) and Chairman of the Board | May 15, 2025 | ||
| Wayne Williams | ||||
| /s/ Shannon Badger. | Interim Chief Financial Officer (Principal Financial and Accounting Officer) | May 15, 2025 | ||
| Shannon Badger. |
| 24 |