10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2021

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____ to ____

Commission file number: 333-60608

JANEL CORPORATION

(Exact name of registrant as specified in its charter)

Nevada	86-1005291
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

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

Registrant’s telephone number, including area code: (212) 373-5895

Former name, former address and former fiscal year, if changed from last report: N/A

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbols(s)	Name of each exchange on which registered
None	None	None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer	☐
Non-accelerated filer ☐	Smaller reporting company	☒
	Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

Yes ☐ No ☒

The number of shares of Common Stock outstanding as of February 9, 2022 was 959,707.

JANEL CORPORATION

QUARTERLY REPORT ON FORM 10-Q

For Quarterly Period Ended December 31, 2021

TABLE OF CONTENTS

			Page
Part I - Financial Information			3
	Item 1.	Financial Statements	3
		Condensed Consolidated Balance Sheets as of December 31, 2021 (unaudited) and September 30, 2021	3
		Condensed Consolidated Statements of Operations for the three months ended December 31, 2021 and 2020 (unaudited)	4
		Condensed Consolidated Statement of Stockholders’ Equity for the three months ended December 31, 2021 and 2020 (unaudited)	5
		Condensed Consolidated Statements of Cash Flows for the three months ended December 31, 2021 and 2020 (unaudited)	6
		Notes to Condensed Consolidated Financial Statements (unaudited)	7
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
	Item 4.	Controls and Procedures	28
Part II - Other Information			28
	Item 1.	Legal Proceedings	28
	Item 1A.	Risk Factors	28
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	28
	Item 6.	Exhibit Index	29
		Signatures	30

2

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

JANEL CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)

	(Unaudited) December 31, 2021			September 30, 2021
ASSETS
Current Assets:
Cash	$	5,186		$	6,234
Accounts receivable, net of allowance for doubtful accounts of $945 and $812, respectively		57,161			52,312
Inventory, net		3,521			3,227
Prepaid expenses and other current assets		2,318			3,002
Total current assets		68,186			64,775
Property and Equipment, net		5,038			4,977
Other Assets:
Intangible assets, net		23,664			24,173
Goodwill		18,486			18,486
Operating lease right of use asset		6,353			2,936
Security deposits and other long-term assets		510			577
Total other assets		49,013			46,172
Total assets	$	122,237		$	115,924
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Line of credit	$	23,842		$	29,637
Accounts payable – trade		45,851			37,243
Accrued expenses and other current liabilities		4,886			6,311
Dividends payable		2,638			2,427
Current portion of earnout		1,054			1,054
Current portion of deferred acquisition payments		190			188
Current portion of subordinated promissory note-related party		500			550
Current portion of long-term debt		872			868
Current portion of operating lease liabilities		1,797			1,281
Total current liabilities		81,630			79,559
Other Liabilities:
Long-term debt		4,450			4,744
Long-term portion of earnout		2,546			2,546
Subordinated promissory notes-related party		5,404			5,525
Long-term portion of deferred acquisition payments		185			183
Mandatorily redeemable non-controlling interest		841			783
Deferred income taxes		2,432			2,299
Long-term operating lease liabilities		4,708			1,751
Other liabilities		331			415
Total other liabilities		20,897			18,246
Total liabilities		102,527			97,805
Stockholders' Equity:
Preferred Stock, $0.001 par value; 100,000 shares authorized
Series B 5,700 shares authorized, 31 shares issued and outstanding		—			—
Series C 30,000 shares authorized and 20,960 shares issued and 20,960 outstanding at December 31, 2021 and September 30, 2021, liquidation value of $13,118 and $12,907 at December 31, 2021 and September 30, 2021, respectively		—			—
Common stock, $0.001 par value; 4,500,000 shares authorized, 979,707 issued and 959,707 outstanding as of December 31, 2021 and 962,207 issued and 942,207 outstanding as of September 30, 2021		1			1
Paid-in capital		14,741			14,838
Common Treasury stock, at cost, 20,000 shares		(240	)		(240	)
Accumulated earnings		5,208			3,520
Total stockholders' equity		19,710			18,119
Total liabilities and stockholders' equity	$	122,237		$	115,924

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

3

JANEL CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(Unaudited)

	Three Months Ended December 31,
	2021			2020
Revenue	$	83,314		$	26,478
Forwarding expenses and cost of revenues		67,825			20,029
Gross profit		15,489			6,449
Cost and Expenses:
Selling, general and administrative		12,338			5,709
Amortization of intangible assets		509			251
Total Costs and Expenses		12,847			5,960
Income from Operations		2,642			489
Other Items:
Interest expense		(279	)		(119	)
Income Before Income Taxes		2,363			370
Income tax expense		(675	)		(115	)
Net Income		1,688			255
Preferred stock dividends		(211	)		(174	)
Net Income Available to Common Stockholders	$	1,477		$	81
Net income per share
Basic	$	1.76		$	0.27
Diluted	$	1.66		$	0.26
Net income per share attributable to common stockholders:
Basic	$	1.54		$	0.09
Diluted	$	1.45		$	0.08
Weighted average number of shares outstanding:
Basic		959.1			935.9
Diluted		1,018.1			966.8

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

4

JANEL CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

(in thousands, except share and per share data)

(Unaudited)

	PREFERRED STOCK				COMMON STOCK				PAID-IN CAPITAL			COMMON TREASURY STOCK					ACCUMULATED EARNINGS (DEFICIT)			TOTAL EQUITY
	SHARES		$		SHARES		$		$			SHARES		$			$			$
Balance - September 30, 2021		20,991	$	—		962,207	$	1	$	14,838			20,000	$	(240	)	$	3,520		$	18,119
Net Income		—		—		—		—		—			—		—			1,688			1,688
Dividends to preferred stockholders		—		—		—		—		(211	)		—		—			—			(211	)
Stock-based compensation		—		—		—		—		29			—		—			—			29
Stock options exercise		—		—		17,500		—		85			—		—			—			85
Balance - December 31, 2021		20,991	$	—		979,707	$	1	$	14,741			20,000	$	(240	)	$	5,208		$	19,710
Balance - September 30, 2020		19,791		—		918,652	$	1	$	14,604			20,000	$	(240	)	$	(1,683	)	$	12,682
Net Income		—		—		—		—		—			—		—			255			255
Dividends to preferred stockholders		—		—		—		—		(174	)		—		—			—			(174	)
Stock-based compensation		—		—		—		—		10			—		—			—			10
Stock options exercise		—		—		2,502		—		21			—		—			—			21
Balance – December 31, 2020		19,791	$	—		921,154	$	1	$	14,461			20,000	$	(240	)	$	(1,428	)	$	12,794

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

5

JANEL CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(Unaudited)

	Three Months Ended December 31,
	2021			2020
Cash Flows From Operating Activities:
Net income	$	1,688		$	255
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Provision for (recovery of) uncollectible accounts		102			(32	)
Depreciation		107			86
Deferred income tax provision		133			86
Amortization of intangible assets		509			251
Amortization of acquired inventory valuation		171			214
Amortization of loan costs		2			2
Stock-based compensation		40			24
Changes in fair value of mandatorily redeemable noncontrolling interest		58			86
Changes in operating assets and liabilities, net of effects of acquisitions:
Accounts receivable		(4,952	)		(1,857	)
Inventory		(464	)		(150	)
Prepaid expenses and other current assets		684			(326	)
Security deposits and other long-term assets		67			(40	)
Accounts payable and accrued expenses		7,172			607
Other liabilities		(26	)		(18	)
Net cash provided by (used in) operating activities		5,291			(812	)
Cash Flows From Investing Activities:
Acquisition of property and equipment, net of disposals		(169	)		(55	)
Acquisitions, net of cash acquired		-			(2,806	)
Net cash used in investing activities		(169	)		(2,861	)
Cash Flows From Financing Activities:
Repayments of term loan		(292	)		(206	)
Proceeds from stock options exercise		85			21
Line of credit, (payments) proceeds, net		(5,795	)		2,380
Repayment of subordinated promissory notes		(168	)		(39	)
Net cash (used in) provided by financing activities		(6,170	)		2,156
Net decrease in cash		(1,048	)		(1,517	)
Cash at beginning of the period		6,234			3,349
Cash at end of period	$	5,186		$	1,832
Supplemental Disclosure of Cash Flow Information:
Cash paid during the period for:
Interest	$	194		$	99
Income taxes	$	10		$	12
Non-cash investing activities:
Subordinated promissory notes of ICT	$	-		$	1,850
Non-cash financing activities:
Dividends declared to preferred stockholders	$	211		$	174

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

6

JANEL CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (in thousands, except per share data)

1. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

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

Revenue and revenue recognition

Logistics

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

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

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

In the Logistics segment, the Company disaggregates its revenues by its five primary service categories: ocean freight, air freight, trucking, customs brokerage, and other. A summary of the Company’s revenues disaggregated by major service lines for the three months ended December 31, 2021 and 2020 was as follows:

	Three Months Ended December 31,		Three Months Ended December 31,
Service Type	2021		2020
Ocean freight	$	32,876	$	9,039
Trucking		21,775		4,352
Air freight		13,874		6,202
Other		5,330		12
Customs brokerage		3,701		2,655
Total	$	77,556	$	22,260

7

Life Sciences

Revenues from the Life Sciences segment are derived from the sale of high-quality monoclonal and polyclonal antibodies, diagnostic reagents and diagnostic kits and other immunoreagents for biomedical research and antibody manufacturing. Revenues are recognized when products are shipped and risk of loss is transferred to the carrier(s) used.

Manufacturing

The Company’s Manufacturing segment is comprised of Indco, Inc. (“Indco”), a majority-owned subsidiary of the Company.  Revenues from Indco are derived from the engineering, manufacture and delivery of specialty mixing equipment and accessories. Revenues are recognized when products are shipped and risk of loss is transferred to the carrier(s) used.

2. ACQUISITION

Fiscal 2021 Acquisition

Logistics

On September 21, 2021, the Company completed the acquisition of all of the membership interests of Expedited Logistics and Freight Services, LLC (“ELFS”) and ELFS Brokerage LLC, a wholly-owned subsidiary of ELFS.  The purchase price for the membership interests was $19,000, subject to certain closing adjustments as set forth in the related purchase agreement.  Further earnout payments in an amount not anticipated to exceed $4,500 will be due to the former members of ELFS based on the operating profit earned by ELFS.  Upon the closing of the transaction, the former members of ELFS were paid $13,000 in cash and were issued an aggregate amount of $6,000 in subordinated promissory notes.

The ELFS acquisition was funded with cash provided by normal operations, borrowings under the Amended Loan and Security Agreement (the “Santander Loan Agreement”) with Santander Bank, N.A. (“Santander”) dated September 21, 2021, as well as subordinated promissory notes issued to the former members of ELFS. This acquisition was completed to expand our product offerings in our Logistics segment.

The following table summarizes, on an unaudited pro forma basis, the condensed combined results of operations of the Company for the three months ended December 31, 2020 assuming the acquisition of ELFS was made on October 1, 2020. The pro forma unaudited condensed consolidated results give effect to, among other things, amortization of intangible assets and interest expense on acquisition-related debt.  The pro forma results are not necessarily indicative of the operating results that would have occurred had the acquisitions been consummated as of the date indicated, nor are they necessarily indicative of future operating results.

	Three Months Ended December 31, 2020
Revenue	$	44,375
Income from Operations	$	630
Net Income	$	245
Net Income Available to Common Stockholders	$	71
Net income per share:
Basic	$	0.26
Diluted	$	0.25
Net income per share attributable to common stockholders:
Basic	$	0.08
Diluted	$	0.07

The foregoing unaudited pro forma results are for informational purposes only and are not necessarily indicative of the actual results of operations that might have occurred had the acquisition occurred on October 1, 2019, nor are they necessarily indicative of future results.

8

3. INVENTORY

Inventories consisted of the following (in thousands):

	December 31, 2021			September 30, 2021
Finished goods	$	860		$	919
Work-in-process		944			968
Raw materials		1,745			1,365
Gross inventory		3,549			3,252
Less – reserve for inventory valuation		(28	)		(25	)
Inventory net	$	3,521		$	3,227

4. INTANGIBLE ASSETS

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

	December 31, 2021			September 30, 2021			Life
Customer relationships	$	23,482		$	23,482		12-24 Years
Trademarks/names		4,490			4,490		1-20 Years
Trademarks/names		521			521		Indefinite
Other		1,149			1,149		2-22 Years
		29,642			29,642
Less: Accumulated Amortization		(5,978	)		(5,469	)
Intangible assets, net	$	23,664		$	24,173

The composition of the intangible assets balance at December 31, 2021 and September 30, 2021 is as follows (in thousands):

	December 31, 2021			September 30, 2021
Logistics	$	18,174		$	18,174
Life Sciences		3,768			3,768
Manufacturing		7,700			7,700
		29,642			29,642
Less: Accumulated Amortization		(5,978	)		(5,469	)
Intangible assets, net	$	23,664		$	24,173

Amortization expense for the three months ended December 31, 2021 and 2020 was $509 and $251, respectively.

5. GOODWILL

The Company’s goodwill carrying amounts relate to the acquisitions in the Logistics, Life Sciences and Manufacturing businesses.

9

The composition of the goodwill balance at December 31, 2021 and September 30, 2021 was as follows (in thousands):

	December 31, 2021		September 30, 2021
Logistics	$	9,063	$	9,063
Life Sciences		4,377		4,377
Manufacturing		5,046		5,046
Total	$	18,486	$	18,486

6. NOTES PAYABLE – BANKS

(A) Santander Bank Facility

The wholly-owned subsidiaries which comprise the Company’s Logistics segment (collectively, the “Janel Group Borrowers”), with the Company as a guarantor, have a Loan and Security Agreement with Santander with respect to a revolving line of credit facility (the “Santander Facility”). As most recently amended in September 2021, the Santander Facility provides that the Janel Group Borrowers can borrow up to $30,000 limited to 85% of the borrowers’ eligible accounts receivable, borrowing base and reserves, subject to adjustments set forth in the Santander Loan Agreement. Interest accrues at an annual rate equal to LIBOR (30, 60 or 90 day) plus 2.25% subject to a LIBOR floor of 75 basis points at close, with a potential LIBOR floor reduction to 25 basis points upon certain conditions. The Company is provided the option of making Series C preferred payments or distributions if specified conditions are met. The Santander Loan Agreement matures on September 21, 2026. The Janel Group Borrowers’ obligations under the Santander Facility are secured by all of the assets of the Janel Group Borrowers, while the Santander Loan Agreement contains customary terms and covenants. As a result of its terms, the Santander Facility is classified as a current liability on the consolidated balance sheet.

At December 31, 2021, outstanding borrowings under the Santander Facility were $23,842, representing 79.47% of the $30,000 available subject to limitations thereunder, and interest was accruing at an effective interest rate of 3.00%.

At September 30, 2021, outstanding borrowings under the Santander Facility were $29,637, representing 98.8% of the $30,000 available subject to limitations thereunder, and interest was accruing at an effective interest rate of 3.00%.

 The Company was in compliance with the covenants defined in the Santander Loan Agreement at both December 31, 2021 and September 30, 2021.

(B) First Merchants Bank Credit Facility

Indco has a Credit Agreement (the “First Merchants Credit Agreement”) with First Merchants Bank with respect to a $5,500 term loan, a $1,000 (limited to the borrowing base and reserves) revolving loan and a $680 mortgage loan (together, the “First Merchant Facility”).  Interest accrues on the term loan at an annual rate equal to the one-month LIBOR plus either 2.75% (if Indco’s total funded debt to EBITDA ratio is less than 2:1) or 3.5% (if Indco’s total funded debt to EBITDA ratio is greater than or equal to 2:1). Interest accrues on the revolving loan at an annual rate equal to the one-month LIBOR plus 2.75%. Interest accrues on the mortgage loan at an annual rate of 4.19%. Indco’s obligations under the First Merchants Facility are secured by all of Indco’s real property and other assets, and are guaranteed by Janel. Additionally, Janel’s guarantee of Indco’s obligations is secured by a pledge of Janel’s Indco shares.

The term loan and revolving loan portions of the First Merchants Facility will expire on August 30, 2024, and the mortgage loan will mature on July 1, 2025 (subject to earlier termination as provided in the First Merchants Credit Agreement), unless renewed or extended.

 As of December 31, 2021, there were no outstanding borrowings under the revolving loan, $2,519 of borrowings under the term loan, and $649 of borrowing under the mortgage loan with interest accruing on the term loan and mortgage loan at an effective interest rate of 2.85% and 4.19%, respectively.

As of September 30, 2021, there were no outstanding borrowings under the revolving loan, $2,713 of borrowings under the term loan, and $655 of borrowing under the mortgage loan with interest accruing on the term loan and mortgage loan at an effective interest rate of 2.83% and 4.19%, respectively.

10

Indco was in compliance with the covenants defined in the First Merchants Credit Agreement at both December 31, 2021 and September 30, 2021.

	December 31, 2021			September 30, 2021
	(in thousands)
Total Debt*	$	3,168		$	3,368
Less Current Portion		(809	)		(809	)
Long Term Portion	$	2,359		$	2,559

* Note: Term Loan is due in monthly installments of $65 plus monthly interest, at LIBOR plus 2.75% to 3.5% per annum, mortgage loan is due in monthly installments of $4, including interest at 4.19%. The credit facilities are collateralized by all of Indco’s assets and guaranteed by Janel.

(C) First Northern Bank of Dixon

Antibodies Incorporated (“Antibodies”), a wholly-owned subsidiary of the Company (by succession), has a loan agreement (the “First Northern Loan Agreement”) with First Northern Bank of Dixon (“First Northern”), with respect to a $2,235 term loan (the “First Northern Term Loan”) which bears interest at an annual rate of Prime plus 325 basis points (currently 4.18%) and matures on November 14, 2029. In addition, Antibodies has a $750 revolving credit facility with First Northern which currently bears interest at the annual rate of Prime plus 325 basis points (currently 4.18%) and matures on November 5, 2022 (the “First Northern Revolving Loan”). There were no outstanding borrowings on the revolving credit facility as of December 31, 2021 or September 30, 2021.

Antibodies also has two separate business loan agreements with First Northern: a $125 term loan in connection with the expansion of solar generation capacity on the Antibodies property (“First Northern Solar Loan”) bearing interest at the annual rate of 4.43% (subject to adjustment in five years) and maturing on November 14, 2029; and a $60 term loan in connection with the expansion of generator capacity on the Antibodies property (“Generator Loan”) bearing interest at the annual rate of 4.25% and maturing on November 5, 2025. There were no outstanding borrowings under the Generator Loan as of December 31, 2021 or September 30, 2021.

As of December 31, 2021, the total amount outstanding under the First Northern Term Loan was $2,126, of which $2,070 is included in long-term debt and $56 is included in current portion of long-term debt, with interest accruing at an effective interest rate of 4.18%.

 
As of September 30, 2021, the total amount outstanding under the First Northern Term Loan was $2,139, of which $2,084 is included in long-term debt and $55 is included in current portion of long-term debt, with interest accruing at an effective interest rate of 4.18%.

As of December 31, 2021, the total amount outstanding under the First Northern Solar Loan was $28, of which $21 is included in long-term debt, and $7 is included in current portion of long-term debt, with interest accruing at an effective interest rate of 4.43%.

 As of September 30, 2021, the total amount outstanding under the First Northern Solar Loan was $105, of which $101 is included in long-term debt and $4 is included in current portion of long-term debt, with interest accruing at an effective interest rate of 4.43%.

11

The Company was in compliance with the covenants defined in the First Northern Loan Agreement at December 31, 2021 and September 30, 2021.

	December 31, 2021			September 30, 2021
	(in thousands)
Total Debt*	$	2,154		$	2,244
Less Current Portion		(63	)		(59	)
Long Term Portion	$	2,091		$	2,185

* Long-term debt is due in monthly installments of $12 plus monthly interest, at 4.18% per annum. The note is collateralized by real property owned by Antibodies and guaranteed by Janel.

7. SUBORDINATED PROMISSORY NOTES - RELATED PARTY

 Aves Labs, Inc., a wholly-owned subsidiary of the Company, is the obligor on a 0.5% subordinated promissory note in the amount of $1,850 (the “ICT Subordinated Promissory Note”) issued to the former owner of ImmunoChemistry Technologies, LLC (“ICT”), in connection with a business combination whereby the Company acquired all of the membership interests of ICT.  The ICT Subordinated Promissory Note is payable in sixteen scheduled quarterly installments of principal and interest beginning March 4, 2021, matures on March 21, 2025, and may be prepaid, in whole or in part, without premium or penalty.  The ICT Subordinated Promissory Note is guaranteed by the Company and is secured by the membership interests in ICT. The ICT Subordinated Promissory Note is subordinate to and junior in right of payment for principal interest premiums and other amounts payable to the Santander Bank Facility, First Merchants Facility and the First Northern Bank of Dixon.

As of December 31, 2021, the amount outstanding under the ICT Subordinated Promissory Note was $1,066, of which $500 is included in the current portion of subordinated promissory notes and $566 is included in the long-term portion of subordinated promissory notes.

As of September 30, 2021, the amount outstanding under the ICT Subordinated Promissory Note was $1,237, of which $550 is included in the current portion of subordinated promissory notes and $687 is included in the long-term portion of subordinated promissory notes.

Janel Group is the obligor on four 4% subordinated promissory notes totaling $6,000 (together, the “ELFS Subordinated Promissory Notes”) payable to certain former shareholders of ELFS.  All of the ELFS Subordinated Promissory Notes are guaranteed by the Company and are subordinate to and junior in right of payment for principal, interest, premiums and other amounts payable to the Santander Bank Facility and the First Merchants Facility. The ELFS Subordinated Promissory Notes are payable in twelve equal consecutive quarterly installments of principal together with accrued interest.  Beginning October 15, 2021 and on the same day of the next eight consecutive calendar quarters, thereafter payment of accrued interest and unpaid interest is due to the former shareholders.  Beginning October 15, 2023 and on the same day of the next twelve consecutive calendar quarters, thereafter payment of principal together with accrued interest and unpaid interest is due to the former shareholders. The ELFS Subordinated Promissory Notes totaling $6,000 were recorded net of working capital adjustment of $1,163.

As of both of December 31, 2021 and September 30, 2021, the amount outstanding under the ELFS Subordinated Promissory Notes was $4,838 and was included in the long-term portion of subordinated promissory notes.

	December 31, 2021			September 30, 2021
	(in thousands)
Total subordinated promissory notes	$	5,904		$	6,075
Less current portion of subordinated promissory notes		(500	)		(550	)
Long term portion of subordinated promissory notes	$	5,404		$	5,525

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8. STOCK-BASED COMPENSATION

On October 30, 2013, the board of directors of the Company adopted the Company’s 2013 Non-Qualified Stock Option Plan (the “2013 Option Plan”) providing for options to purchase up to 100,000 shares of common stock for issuance to directors, officers, employees of and consultants to the Company and its subsidiaries.

On September 21, 2021, the board of directors of the Company adopted the Amended and Restated 2017 Janel Corporation Equity Incentive Plan (the “Amended Plan”) pursuant to which non-statutory stock options, restricted stock awards and stock appreciation rights of the Company’s Common Stock, par value $0.001 per share (“Common Stock”), may be granted to employees, directors and consultants to the Company and its subsidiaries. The Amended Plan increased the number of shares of Common Stock that may be issued pursuant to the Amended Plan from 100,000 to 200,000 shares of Common Stock of the Company and was updated to reflect certain other non-substantive amendments.

Total stock-based compensation for the three months ended December 31, 2021 and 2020 amounted to $29 and $24, respectively, and is included in selling, general and administrative expense in the Company’s statements of operations.

(A) Stock Options

The Company uses the Black-Scholes option pricing model to estimate the fair value of our share-based awards. In applying this model, we use the following assumptions:

• 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.

The fair values of our employee option awards were estimated using the assumptions below, which yielded the following weighted average grant date fair values for the periods presented:

	Three Months Ended December 31, 2021
Risk-free interest rate	1.10%
Expected option term in years	5.5-6.5
Expected volatility	100.3% - 110.3%
Dividend yield	—%
Weighted average grant date fair value	$17.60 - $19.07

Options for Employees

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value (in thousands)
Outstanding balance at September 30, 2021		98,994		$	5.93		4.5	$	1,689.38
Granted		10,000		$	23.00		9.8	$	—
Exercised		(17,500	)	$	4.87		—	$	—
Outstanding balance at December 31, 2021		91,494		$	8.00		5.1	$	1,463.60
Exercisable at December 31, 2021		73,998		$	5.88		4.1	$	1,341.14

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The aggregate intrinsic value in the above table was calculated as the difference between the closing price of the Company’s common stock at December 31, 2021 of $24 per share and the exercise price of the stock options that had strike prices below such closing price.

As of December 31, 2021, there was approximately $153 of total unrecognized compensation expense related to the unvested employee stock options which is expected to be recognized over a weighted average period of less than one year.

Liability classified share-based awards

During the three months ended December 31, 2021, 7,018 options were granted and 10,372 options were exercised with respect to Indco’s common stock. The Company uses the Black-Scholes option pricing model to estimate the fair value of Indco’s share-based awards. In applying this model, the Company used the following assumptions:

	Three Months Ended December 31, 2021
Risk-free interest rate		1.10%
Expected option term in years		5.5-6.5
Expected volatility		39%
Dividend yield		—%
Weighted average grant date fair value		$5.57 - $6.66

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value (in thousands)
Outstanding balance at September 30, 2021		38,961		$	10.28		6.62	$	78.16
Granted		7,018		$	17.16		9.75	$	—
Exercised		(10,372	)	$	8.30		—	$	—
Outstanding balance at December 31, 2021		35,607		$	12.22		7.51	$	175.98
Exercisable at December 31, 2021		21,663		$	10.72		6.49	$	139.47

The aggregate intrinsic value in the above table was calculated as the difference between the valuation price of Indco’s common stock at December 31, 2021 of $17.16 per share and the exercise price of the stock options that had strike prices below such closing price.

The liability classified awards were measured at fair value at each reporting date until the final measurement date, which was the date of completion of services required to earn the option. The accrued compensation cost related to these options was approximately $279 and $361 as of December 31, 2021 and September 30, 2021, respectively, and is included in other liabilities in the condensed consolidated financial statement. The compensation cost related to these options was approximately $11 and $15 for the three months ended December 31, 2021 and 2020, respectively.

The cost associated with the options issued on each grant date is being recognized ratably over the period of service required to earn each tranche of options.

Upon vesting, the options continue to be accounted for as a liability in accordance with ASC 480-10-25-8 and are measured in accordance with ASC 480-10-35 at every reporting period until the options are settled.

On December 13, 2021, minority owners of Indco exercised 7,000 and 3,372 options to purchase Indco’s common stock at an exercise price of $6.48 and $12.07 for an aggregate purchase price of $45 and $41, respectively. Indco issued related party promissory notes in the amount of $45 and $41, respectively which bear interest at 1% per annum; both interest and principal are payable on the maturity date of December 31, 2024. These notes are included in security deposits and other long-term assets. The fair value of the 7,000 and 3,372 shares of Indco’s common stock was recorded as an increase in mandatorily redeemable non-controlling interest. On December 13, 2021, Indco repurchased 7,000 shares of Indco’s stock at a purchase price of $17.16 per share from a minority owner of Indco for the aggregate purchase price of $120. The fair value of the repurchased 7,000 shares of Indco’s common stock was recorded as a decrease in mandatorily redeemable non-controlling interest. As a result of the exercise of 10,372 options and the repurchase of 7,000 shares of Indco’s stock, the mandatorily redeemable non-controlling interest percentage was 9.77% as of December 31, 2021.

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Changes in the fair value of the vested options are recognized in earnings in the consolidated financial statements.

The options are classified as liabilities, and the underlying shares of Indco’s common stock also contain put options which result in their classification as a mandatorily redeemable security. While their redemption does not occur on a fixed date, there is an unconditional obligation for the Company to repurchase the shares upon death, which is certain to occur at some point in time.

As of December 31, 2021, there was approximately $70 of total unrecognized compensation expense related to the unvested Indco stock options. This expense is expected to be recognized over a weighted average period of less than one year.

9. INCOME PER COMMON SHARE

The following table provides a reconciliation of the basic and diluted income per share (“EPS”) computations for the three months ended December 31, 2021 and 2020 (in thousands, except per share data):

	For the three Months Ended December 31,
	2021			2020
Income:
Net income	$	1,688		$	255
Preferred stock dividends		(211	)		(174	)
Net income available to common stockholders	$	1,477		$	81
Common Shares:
Basic - weighted average common shares		959.1			935.9
Effect of dilutive securities:
Stock options		58.7			30.6
Convertible preferred stock		0.3			0.3
Diluted - weighted average common stock		1,018.1			966.8
Income per Common Share:
Basic -
Net income	$	1.76		$	0.27
Preferred stock dividends		(0.22	)		(0.18	)
Net income attributable to common stockholders	$	1.54		$	0.09
Diluted -
Net income	$	1.66		$	0.26
Preferred stock dividends		(0.21	)		(0.18	)
Net income available to common stockholders	$	1.45		$	0.08

The computation for the diluted number of shares excludes unvested restricted stock and unexercised stock options that are anti-dilutive. There were 10 anti-dilutive shares for the three-month period ended December 31, 2021 and no anti-dilutive shares for the three-month period ended December 31, 2020.

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Potentially diluted securities as of December 31, 2021 and 2020 are as follows:

	December 31,
	2021		2020
Employee stock options		91.5		98.9
Non-employee stock options		—		6.1
Convertible preferred stock		0.3		0.3
		91.8		105.3

10. INCOME TAXES

The reconciliation of income tax computed at the Federal statutory rate to the provision for income taxes from continuing operations is as follows (in thousands):

	December 31, 2021		December 31, 2020
Federal taxes at statutory rates	$	496	$	78
Permanent differences		10		3
State and local taxes, net of Federal benefit		169		34
Total	$	675	$	115

11. BUSINESS SEGMENT INFORMATION

As referenced above in note 1, the Company operates in three reportable segments: Logistics (previously known as Global Logistics Services), Life Sciences and Manufacturing. In the fourth quarter of 2021, our former Global Logistics Services segment was renamed “Logistics”; this change was in name only and had no impact on the Company’s previously reported historical financial position, results of operations, cash flow or segment level results.

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

The following tables presents selected financial information about the Company’s reportable segments and Corporate for the purpose of reconciling to the consolidated totals for the three months ended December 31, 2021 and 2020:

For the three months ended December 31, 2021 (in thousands)	Consolidated		Logistics		Life Sciences		Manufacturing		Corporate
Revenues	$	83,314	$	77,556	$	3,244	$	2,514	$	—
Forwarding expenses and cost of revenues		67,825		65,610		1,001		1,214		—
Gross margin		15,489		11,946		2,243		1,300		—
Selling, general and administrative		12,338		9,349		1,250		729		1,010
Amortization of intangible assets		509		—		—		—		509
Income (loss) from operations		2,642		2,597		993		571		(1,519	)
Interest expense		279		224		29		26		—
Identifiable assets		122,237		64,899		10,083		4,017		43,238
Capital expenditures	$	169	$	65	$	102	$	2	$	—

For the three months ended December 31, 2020 (in thousands)	Consolidated		Logistics		Life Sciences		Manufacturing		Corporate
Revenues	$	26,478	$	22,260	$	2,349	$	1,869	$	—
Forwarding expenses and cost of revenues		20,029		18,395		756		878		—
Gross margin		6,449		3,865		1,593		991		—
Selling, general and administrative		5,709		3,374		976		642		717
Amortization of intangible assets		251		—		—		—		251
Operating income (loss)		489		491		617		349		(968	)
Interest expense		119		37		28		47		7
Identifiable assets		68,224		22,418		10,252		3,501		32,053
Capital expenditures	$	55	$	19	$	24	$	12	$	—

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12. FAIR VALUE MEASUREMENTS

Recurring Fair Value Measurements

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

Level 3	December 31, 2021		September 30, 2021
Contingent earnout liabilities	$	3,600	$	3,600
Level 3 Liabilities	$	3,600	$	3,600

This liability relates to the estimated fair value of earnout payments to former ELFS owners for the earnout period ending December 31, 2021 and September 30, 2021. The current and non-current portions of the fair value of the contingent earnout liability at December 31, 2021 and September 30, 2021 are $1,054 and $2,546, respectively.

Refer to Note 2 to Consolidated Financial Statements for ELFS acquisition information. The following table sets forth a summary of the changes in the fair value of the Company’s contingent earnout liabilities, which are measured at fair value on a recurring basis utilizing Level 3 assumptions in their valuation (in thousands):

	December 31, 2021		September 30, 2021
Balance at beginning of period	$	3,600	$	—
Fair value of contingent consideration recorded in connection with business combinations		—		3,600
Change in fair value of contingent consideration		—		—
Balance at end of period	$	3,600	$	3,600

13. LEASES

The Company has operating leases for office and warehouse space in all districts where it conducts business. As of December 31, 2021, the remaining terms of the Company’s operating leases were between one and 60 months, and certain lease agreements contain provisions for future rent increases. Payments due under the lease contracts include the minimum lease payments that the Company is obligated to make under the non-cancelable initial terms of the leases as the renewal terms are at the Company’s option and the Company is not reasonably certain to exercise those renewal options at lease commencement.

The components of lease cost for the three-month periods ended December 31, 2021 and 2020 are as follows (in thousands):

	Three Months Ended December 31, 2021		Three Months Ended December 31, 2020
Operating lease cost	$	480	$	231
Short-term lease cost		152		14
Total lease cost	$	632	$	245

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Rent expense for the three months ended December 31, 2021 and 2020 was $632 and $245, respectively. Operating lease right of use assets, current portion of operating lease liabilities and long-term operating lease liabilities reported in the condensed consolidated balance sheets for operating leases as of December 31, 2021 were $6,353, $1,797 and $4,708, respectively. Operating lease right of use assets, current portion of operating lease liabilities and long-term operating lease liabilities reported in the condensed consolidated balance sheets for operating leases as of September 30, 2021 were $2,936, $1,281 and $1,751, respectively.

During the three months ended December 31, 2021, the Company, through its wholly owned subsidiary ELFS entered into new operating leases and recorded an additional $3,842 in operating lease right of use assets and corresponding lease liabilities.

As of December 31, 2021 and September 31, 2021, the weighted-average remaining lease term and the weighted-average discount rate related to the Company’s operating leases were 5.2 years and 3.18% and 2.9 years and 3.89%, respectively.

Future minimum lease payments under non-cancelable operating leases as of December 31, 2021 are as follows (in thousands):

	Year End December 31, 2021
2022	$	1,798
2023		1,441
2024		1,147
2025		853
2026		620
Thereafter		1,168
Total undiscounted loan payments		7,027
Less: Imputed interest		(522	)
Total lease obligation	$	6,505

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

The following discussion and analysis should be read in conjunction with our unaudited interim condensed consolidated financial statements and related notes thereto as of and for the three months ended December 31, 2021, which have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”). Amounts presented in this section are in thousands, except share and per share data.

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

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (the “Report”) contains certain statements that are, or may deemed to be, “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and that reflect management’s current expectations with respect to our operations, performance, financial condition, and other developments. These forward-looking statements may generally be identified by the use of the words “may,” “will,” “intends,” “plans,” projects,” “believes,” “should,” “expects,” “predicts,” “anticipates,” “estimates,” and similar expressions or the negative of these terms or other comparable terminology. These statements are necessarily estimates reflecting management’s best judgment based upon current information and involve a number of risks, uncertainties and assumptions. We caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made, and readers are advised that various factors, including, but not limited to, those set forth elsewhere in this Report, could affect our financial performance and could cause our actual results for future periods to differ materially from those anticipated or projected. While it is impossible to identify all such factors, such factors include, but are not limited to, the impact of the coronavirus on the worldwide economic conditions and on our businesses, our strategy of expanding our business through acquisitions of other businesses; the risk that we may fail to realize the expected benefits or strategic objectives of any acquisition, or that we spend resources exploring acquisitions that are not consummated; risks associated with litigation, including contingent auto liability and insurance coverage; indemnification claims and other unforeseen claims and liabilities that may arise from an acquisition; economic and other conditions in the markets in which we operate; the risk that we may not have sufficient working capital to continue operations; instability in the financial markets; our dependence on key employees; impacts from climate change, including the increased focus by third-parties on sustainability issues and our ability to comply therewith; competition from parties who sell their businesses to us and from professionals who cease working for us; terrorist attacks and other acts of violence or war; security breaches or cybersecurity attacks; our compliance with applicable privacy, security and data laws; competition faced by our logistics services freight carriers with greater financial resources and from companies that operate in areas in which we plan to expand; our dependence on the availability of cargo space from third parties; recessions and other economic developments that reduce freight volumes; other events affecting the volume of international trade and international operations; risks arising from our logistics services business’ ability to manage staffing needs; competition faced in the freight forwarding, freight brokerage, logistics and supply chain management industry; industry consolidation and our ability to gain sufficient market presence with respect to our logistics services business; risks arising from our ability to comply with governmental permit and licensing requirements or statutory and regulatory requirements; seasonal trends; competition faced by our manufacturing (Indco) business from competitors with greater financial resources; Indco’s dependence on individual purchase orders to generate revenue; any decrease in the availability, increase in the cost or supply shortages, of raw materials used by Indco; Indco’s ability to obtain and retain skilled technical personnel; risks associated with product liability claims due to alleged defects in Indco’s products; risks arising from the environmental, health and safety regulations applicable to Indco; the reliance of our Indco and life sciences businesses on a single location to manufacture their products; the ability of our life sciences business to compete effectively; the ability of our life sciences business to introduce new products in a timely manner; product or other liabilities associated with the manufacture and sale of new products and services; changes in governmental regulations applicable to our life sciences business; the ability of our life sciences business to continually produce products that meet high quality standards such as purity, reproducibility and/or absence of cross-reactivity; the controlling influence exerted by our officers and directors and one of our stockholders; our inability to issue dividends in the foreseeable future; and risks related to ownership of our common stock, including volatility and the lack of a guaranteed continued public trading market for our common stock, the impact of COVID-19 on our operations and financial results; and such other factors that may be identified from time to time in our Securities and Exchange Commission (“SEC”) filings. In addition, the global economic climate and additional or unforeseen effects from the COVID-19 pandemic amplify many of these risks. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual outcomes may vary materially from those projected. You should not place undue reliance on any of our forward-looking statements which speak only as of the date they are made. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. For a more detailed discussion of these factors, see our periodic reports filed with the SEC, including our most recent Annual Report on Form 10-K for the fiscal year ended September 30, 2021.

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OVERVIEW

Janel Corporation (“Janel,” the “Company” or the “Registrant”) is a holding company with subsidiaries in three business segments: Logistics (previously known as Global Logistics Services), Life Sciences and Manufacturing. In the fourth quarter of 2021, our former Global Logistics Services segment was renamed “Logistics”; this change related to the name only and had no impact on the Company’s previously reported historical financial position, results of operations, cash flow or segment level results. The Company strives to create shareholder value primarily through three strategic priorities: supporting its businesses’ efforts to make investments and to build long-term profits; allocating Janel’s capital at high risk-adjusted rates of return; and attracting and retaining exceptional talent.

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

Logistics

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

On September 21, 2021, the Company completed a business combination whereby it acquired all of the membership interests of Expedited Logistics and Freight Services, LLC. (“ELFS”) and related subsidiaries which we include in our Logistics segment.

On December 31, 2020, the Company completed a business combination whereby it acquired substantially all of the assets and certain liabilities of W.R. Zanes & Co. of LA., Inc., (“W.R. Zanes”) which we include in our Logistics segment.

Life Sciences

The Company’s Life Sciences segment is comprised of several wholly-owned subsidiaries. The Company’s Life Sciences segment manufactures and distributes high-quality monoclonal and polyclonal antibodies, diagnostic reagents and other immunoreagents for biomedical research and provides antibody manufacturing for academic and industry research scientists. Our Life Sciences segment also produces products for other life science companies on an original equipment manufacturer (OEM) basis.

On December 4, 2020, the Company completed a business combination whereby it acquired all of the membership interests of ImmunoChemistry Technologies, LLC. (“ICT”) which we include in our Life Sciences segment.

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Manufacturing

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

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

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

Our senior management has reviewed the critical accounting policies and estimates with the Audit Committee of our Board of Directors. Our significant accounting policies are described in Note 1, “Summary of Business and Significant Accounting Policies,” in the Notes to our Consolidated Financial Statements for the fiscal year ended September 30, 2021, which are included in our Annual Report on Form 10-K filed with the SEC on December 27, 2021. Critical accounting policies are those that are most important to the portrayal of our financial condition, results of operations and cash flows and require management’s most difficult, subjective and complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. If actual results were to differ significantly from estimates made, the reported results could be materially affected. There were no significant changes to our critical accounting policies during the three months ended December 31, 2021.

NON-GAAP FINANCIAL MEASURES

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

Organic Growth

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

Adjusted Operating Income

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

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

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

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

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

Results of Operations – Janel Corporation

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

Our consolidated results of operations are as follows:

	Three Months Ended December 31, 2021		Three Months Ended December 31, 2020
Revenues	$	83,314	$	26,478
Forwarding expenses and cost of revenues		67,825		20,029
Gross profit		15,489		6,449
Operating expenses		12,847		5,960
Operating income	$	2,642	$	489
Net income	$	1,688	$	255
Adjusted operating income	$	3,362	$	978

Consolidated revenues for the three months ended December 31, 2021 were $83,314, or 214.7% higher than the prior year period. Revenues increased across all three segments due to a recovery from the impact of the COVID-19 pandemic experienced in the prior fiscal year as well as the impact of acquisitions, which accounted for $24,840 of additional revenue compared to the prior year. Operating income for the three months ended December 31, 2021 was $2,642 compared with $489 in the prior year period as a result of the economic recovery experienced across all of our segments, partially offset by higher spending in the corporate segment.  Adjusted operating income for the three months ended December 31, 2021 increased to $3,362 versus $978 in the prior year period.  The Company’s net income for the three months ended December 31, 2021 totaled approximately $1,688 or $1.66 per diluted share, compared to a net income of $255 or $0.26 per diluted share for the three months ended December 31, 2020.

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

	Three Months Ended December 31,
	2021		2020
Operating income	$	2,642	$	489
Amortization of intangible assets		509		251
Stock-based compensation		40		24
Cost recognized on sale of acquired inventory		171		214
Adjusted operating income	$	3,362	$	978

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Results of Operations – Logistics – Three Months Ended December 31, 2021 and 2020

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

	Three Months Ended December 31,
	2021			2020
Revenue	$	77,556		$	22,260
Forwarding expense		65,610			18,395
Gross profit	$	11,946		$	3,865
Gross profit margin		15.4	%		17.4	%
Selling, general and administrative expenses	$	9,349		$	3,374
Income from operations	$	2,597		$	491

Revenue

Total revenue for the three months ended December 31, 2021 was $77,556 as compared to $22,260 for the three months ended December 31, 2020, an increase of $55,296 or 248.4%. The increase in revenue was primarily driven by the rise in transportation rates as a result of capacity issues globally and a recovery in business compared with the depressed levels in the prior year period, while two acquisitions accounted for $24,840 of additional revenue compared to the prior year.

Gross Profit

Gross profit for the three months ended December 31, 2021 was $11,946, an increase of $8,081, or 209.1%, as compared to $3,865 for the three months ended December 31, 2020. Two acquisitions accounted for $5,834 of additional gross profit compared to the prior year period. A recovery in business accounted for the balance of the gross profit increase compared with the depressed levels in the prior fiscal year and drove organic gross profit growth of 58%. Gross margin as a percentage of revenue decreased to 15.4% for the three months ended December 31, 2021 compared to 17.4% for the prior year period due to the increase in transportation rates, partially offset by higher gross profit margins at an acquired business.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the three months ended December 31, 2021 were $9,349, as compared to $3,374 for the three months ended December 31, 2020. This increase of $5,975, or 177.1%, was mainly due to additional expenses from acquired businesses. As a percentage of revenue, selling, general and administrative expenses were 12.1% and 15.2% of revenue for the three months ended December 31, 2021 and 2020, respectively. The decline in selling, general and administrative expenses as a percentage of revenue largely reflected the rise in transportation rates as a result of capacity issues globally.

Income from Operations

Income from operations increased to $2,597 for the three months ended December 31, 2021, as compared to income from operations of $491 for the three months ended December 31, 2020, an increase of $2,106. Income from operations increased as a result of the economic recovery from the COVID-19 pandemic compared to the prior fiscal year and contributions from two acquisitions. Operating margin as a percentage of gross profit for the three months ended December 31, 2021 was 21.7% compared to 12.7% in the prior year period largely due to operating leverage from significantly higher gross profit as business recovered compared with the depressed levels in the prior year period.

23

Results of Operations – Life Sciences – Three Months Ended December 31, 2021 and 2020

The Company’s Life Sciences segment manufactures and distributes high-quality monoclonal and polyclonal antibodies, diagnostic reagents and other immunoreagents for biomedical research and provides antibody manufacturing for academic and industry research scientists. Our Life Sciences business also produces products for other life science companies on an OEM basis.

Life Sciences – Selected Financial Information:

	Three Months Ended December 31,
	2021			2020
Revenue	$	3,244		$	2,349
Cost of sales		830			542
Cost recognized upon sale of acquired inventory		171			214
Gross profit	$	2,243		$	1,593
Gross profit margin		69.1	%		67.8	%
Selling, general and administrative expenses	$	1,250		$	976
Income from operations	$	993		$	617

Revenue

Total revenue was $3,244 and $2,349 for the three months ended December 31, 2021 and 2020, respectively, an increase of $895 or 38.1%. An acquisition accounted for $404 of the revenue increase in the quarter, while organic growth of 21% accounted for the balance of revenue growth as academic research recovered from the impacts of the COVID-19 pandemic.

Gross Profit

Gross profit was $2,243 and $1,593 for the three months ended December 31, 2021 and 2020, respectively, an increase of $650 or 40.8%. During the three months ended December 31, 2021 and 2020, gross profit margin was 69.1% and 67.8%, respectively, as favorable product mix and lower cost recognized upon sale of acquired inventory benefited gross profit margin.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the Life Sciences segment were $1,250 and $976 for the three months ended December 31, 2021 and 2020, respectively. The year-over-year increase was largely due to an acquired business.

Income from Operations

Income from operations for the three months ended December 31, 2021 and 2020 was $993 and $617, an increase of $376 or 60.9%, largely due to positive operating leverage from the increase in revenue as a result of the recovery from the impact of the COVID-19-related shut downs experienced in the prior fiscal year and, to a lesser extent, a contribution from an acquisition.

Results of Operations - Manufacturing – Three Months Ended December 31, 2021 and 2020

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

24

Manufacturing – Selected Financial Information:

	Three Months Ended December 31,
	2021			2020
Revenue	$	2,514		$	1,869
Cost of revenues		1,214			878
Gross profit	$	1,300		$	991
Gross profit margin		51.7	%		53.0	%
Selling, general and administrative expenses	$	729		$	642
Income from operations	$	571		$	349

Revenue

Total revenue was $2,514 and $1,869 for the three months ended December 31, 2021 and 2020, respectively, an increase of $645, or 34.5%. The revenue increase reflected a broad increase across the business relative to the COVID-19 related slowdown in the prior fiscal year.

Gross Profit

Gross profit was $1,300 and $991 for the three months ended December 31, 2021 and 2020, respectively, an increase of $309, or 31.2%. Gross profit margin for the three months ended December 31, 2021 and 2020 was 51.7% and 53.0%, respectively. The year-over-year decrease in gross profit margin was generally due to the mix of business.

Selling, General and Administrative Expenses

Selling, general and administrative expenses were $729 and $642 for the three months ended December 31, 2021 and 2020, respectively, an increase of $87 or 13.6%. The increase in expenses relative to revenue reflected positive operating leverage on higher volumes.

Income from Operations

Income from operations was $571 for the three months ended December 31, 2021 compared to $349 for the three months ended December 31, 2020, representing a 63.6% increase from the prior year period. The increase was due to favorable operating leverage as revenue recovered.

Results of Operations – Corporate and Other – Three Months Ended December 31, 2021 and 2020

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

	Three Months Ended December 31,
	2021			2020
	(In thousands)
Total income from operating segments	$	4,161		$	1,457
Administrative expenses		(1,000	)		(707	)
Amortization expense		(509	)		(251	)
Stock-based compensation		(10	)		(10	)
Total Corporate expenses		(1,519	)		(968	)
Interest expense		(279	)		(119	)
Net income before taxes		2,363			370
Income tax expense		(675	)		(115	)
Net income		1,688			255
Preferred stock dividends		(211	)		(174	)
Net income Available to Common Stockholders	$	1,477		$	81

25

Total Corporate Expenses

Total corporate expenses, which include amortization of intangible assets, stock-based compensation and merger and acquisition expenses, increased by $551, or 56.9%, to $1,519 for the three months ended December 31, 2021 as compared to $968 for the three months ended December 31, 2020. The increase was due primarily to higher accounting related professional expense, increased merger and acquisition expenses and increases in amortization of intangible expenses. We incur merger and acquisition deal-related expenses and intangible amortization at the corporate level rather than at the segment level.

Interest Expense

Interest expense for the consolidated company increased $160, or 134.5%, to $279 for the three months ended December 31, 2021 from $119 for the three months ended December 31, 2020 primarily due to higher average debt balances to support our acquisition efforts and higher working capital within Logistics to support business growth partially offset by lower interest rates.

Income Taxes Expense

On a consolidated basis, the Company recorded an income tax expense of $675 for the three months ended December 31, 2021, as compared to an income tax expense of $115 for the three months ended December 31, 2020.  The increase in expense was primarily due to an increase in pretax income. In 2016, a deferred tax asset was established to reflect a net operating loss carryforward, which the Company has begun using, and expects to continue to use, through ongoing profitability.

Preferred Stock Dividends

Preferred stock dividends include any dividends accrued but not paid on the Company’s Series C Cumulative Preferred Stock (the “Series C Stock”). For the three months ended December 31, 2021 and 2020, preferred stock dividends were $211 and $174, respectively, representing an increase of $37, or 21.3%.  The increase in preferred stock dividends was the result of a higher number of shares of Series C Stock outstanding and an increase in dividend rate as of January 1, 2021 to 8%.

Net Income

Net income was $1,688, or $1.66 per diluted share, for the three months ended December 31, 2021 compared to net income of $255, or $0.26 per diluted share, for the three months ended December 31, 2020. The increase was primarily due to higher revenues and gross profit, partially offset by higher selling, general and administrative expenses across our operating segments and at corporate.

Income Available to Common Shareholders

Income available to holders of common shares was $1,477, or $1.45 per diluted share, for the three months ended December 31, 2021 compared to income available to holders of common shares of $81, or $0.08 per diluted share, for the three months ended December 31, 2020. The increase in net income was primarily due higher revenues, partially offset by higher selling, general and administrative expenses across our businesses and corporate in both periods and an increase in the dividend rate with respect to the Series C Stock as of January 1, 2021 to 8%.

LIQUIDITY AND CAPITAL RESOURCES

General

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

26

As a customs broker, our Logistics segment makes significant cash advances for a select group of our credit-worthy customers. These cash advances are for customer obligations such as the payment of duties and taxes to customs authorities primarily in the United States. Increases in duty rates could result in increases in the amounts we advance on behalf of our customers. Cash advances are a “pass through” and are not recorded as a component of revenue and expense. The billings of such advances to customers are accounted for as a direct increase in accounts receivable from the customer and a corresponding increase in accounts payable to governmental customs authorities. These “pass through” billings can influence our traditional credit collection metrics. For customers that meet certain criteria, we have agreed to extend payment terms beyond our customary terms. Management believes that it has established effective credit control procedures and has historically experienced relatively insignificant collection problems.

The COVID-19 pandemic has negatively impacted our liquidity and cash flows. On April 19, 2020, we entered into a loan agreement with Santander and executed a U.S. Small Business Administration note pursuant to which we borrowed $2,726 from Santander pursuant to the Paycheck Protection Program (“PPP”) under The Coronavirus Aid, Relief and Economic Security Act, Section 7(a)(36) of the Small Business Act in order to be able to continue to cover our payroll costs, group health care benefits, mortgage payments, rent and utilities. The duration and magnitude of the pandemic is not reasonably estimable at this point, and if the pandemic persists, our liquidity and capital resources could be further negatively impacted. During fiscal 2021, the Company applied for and received forgiveness for its PPP Loan.

Our subsidiaries depend on commercial credit facilities to fund day-to-day operations as there is a difference between the timing of collection cycles and the timing of payments to vendors. Generally, we do not make significant capital expenditures.

Janel’s cash flow performance for the 2022 fiscal year may not necessarily be indicative of future cash flow performance.

As of December 31, 2021, the Company’s cash and working capital deficiency (current assets minus current liabilities) were $5,186 and $13,444, respectively. As of September 30, 2021, the Company’s cash and working capital deficiency were $6,234 and $14,784.  Compared with the prior period, the Company’s cash decreased $1,048, or 17%, and its working capital deficiency (current assets minus current liabilities) decreased $1,340, or 9%. The decrease in cash and working capital deficiency was primarily the result of an increase in accounts receivables collections offset by decreases in accounts payables and accrued expense payments.

Cash flows from operating activities

Net cash provided by operating activities was $5,291 for the three months ended December 31, 2021, versus ($812) used in operating activities for the three months ended December 31, 2020. The increase in cash provided by operations for the three months ended December 31, 2021 compared to the prior year period was driven principally by higher profits, timing of cash payments for accounts payables and accrued expenses, partially offset by the timing of cash collections for accounts receivables.

Cash flows from investing activities

Net cash used in investing activities totaled $169 for the three months ended December 31, 2021, versus $2,861 for three months ended December 31, 2020. The Company used $169 for the acquisition of property and equipment for the three months ended December 31, 2021 compared to $2,806 for the acquisition of two businesses and $55 for the acquisition of property and equipment for the three months ended December 31, 2020.

Cash flows from financing activities

Net cash used in financing activities was $6,170 for the three months ended December 31, 2021, versus net cash provided by financing activities of $2,156 for the three months ended December 31, 2020. Net cash used in financing activities for the three months ended December 31, 2021 primarily included repayment of funds from our line of credit partially, term loan and notes payable related party. Net cash provided financing activities for the three months ended December 31, 2020 primarily included proceeds from our line of credit partially offset by repayments on term loan and notes payable related party.

27

Off-Balance Sheet Arrangements

As of December 31, 2021, we had no off-balance sheet arrangements or obligations.

ITEM 4. CONTROLS AND PROCEDURES

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

Our management, with the participation of our Chief Executive Officer and our Principal Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of December 31, 2021, the end of the period covered by this Quarterly Report on Form 10-Q.  Consistent with guidance issued by the SEC that an assessment of internal controls over financial reporting of a recently acquired business may be omitted from management’s evaluation of disclosure controls and procedures, management is excluding an assessment of such internal controls of ELFS from its evaluation of the effectiveness of the Company’s disclosure controls and procedures. ELFS, which the Company acquired on September 21, 2021, constituted 15 percent of the Company’s total assets and 34 percent of income before income taxes of the Company as of and for the quarter ended December 31, 2021. Based on this evaluation, the Company’s Chief Executive Officer and Principal Financial Officer have concluded that as of the end of such period, the Company’s disclosure controls and procedures were effective.

As referenced above, the Company acquired ELFS on September 21, 2021. The Company is in the process of reviewing the internal control structure of ELFS and, if necessary, will make appropriate changes as it integrates ELFS into the Company’s overall internal control over financial reporting process.  Other than as described above, there have been no changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended December 31, 2021 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

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

ITEM 1A. RISK FACTORS

For a discussion of the Company’s potential risks or uncertainties, please see “Part I—Item 1A—Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended September 30, 2021. There have been no material changes to the risk factors disclosed in Part I—Item 1A of the Company’s 2021 Annual Report.

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

There were no unregistered sales of equity securities during the three months ended December 31, 2021. In addition, there were no shares of common stock purchased by us during the three months ended December 31, 2021.

28

ITEM 6. EXHIBIT INDEX

31.1	Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer (filed herewith)
31.2	Rule 13a-14(a)/15d-14(a) Certification of Principal Financial Officer (filed herewith)
32.1	Section 1350 Certification of Principal Executive Officer (filed herewith)
32.2	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 December 31, 2021 for the three months ended December 31, 2021 and 2020 in Inline XBRL (eXtensible Business Reporting Language) pursuant to Rule 405 of Regulation S-T: (i) Condensed Consolidated Balance Sheets as of December 31, 2021 and September 30, 2021, (ii) Condensed Consolidated Statements of Operations for the three months ended December 31, 2021 and 2020, (iii) Condensed Consolidated Statement of Changes in Stockholders’ Equity for the three months ended December 31, 2021 and 2020, (iv) Condensed Consolidated Statements of Cash Flows for the three months ended December 31, 2021 and 2020, and (v) Notes to Condensed Consolidated Financial Statements.
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in the Interactive Data Files submitted as Exhibit 101) (filed herewith)

29

SIGNATURES

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

Dated: February 9, 2022	JANEL CORPORATION
	Registrant
	/s/ Dominique Schulte
	Dominique Schulte
	Chairman, President and Chief Executive Officer
	(Principal Executive Officer)
Dated: February 9, 2022	JANEL CORPORATION
	Registrant
	/s/ Vincent A. Verde
	Vincent A. Verde
	Principal Financial Officer, Treasurer and Secretary

30

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Dominique Schulte, certify that:

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

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

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

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

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

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

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

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

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

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

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

Date: February 9, 2022	/s/ Dominique Schulte
	Dominique Schulte
	Chairman, President and Chief Executive Officer
	(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Vincent A. Verde, certify that:

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

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

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

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

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

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

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

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

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

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

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

Date: February 9, 2022	/s/ Vincent A. Verde
	Vincent A. Verde
	Principal Financial Officer, Treasurer and Secretary

EX-32.1

Exhibit 32.1

CERTIFICATION

PURSUANT TO 18 U.S.C. §1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the report on Form 10-Q of Janel Corporation for the quarter ended June 30, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Dominique Schulte, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

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

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

Date: February 9, 2022	/s/ Dominique Schulte
	Dominique Schulte
	Chairman, President and Chief Executive Officer
	(Principal Executive Officer)

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

EX-32.2

Exhibit 32.2

CERTIFICATION

PURSUANT TO 18 U.S.C. §1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the report on Form 10-Q of Janel Corporation for the quarter ended June 30, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Vincent A. Verde, Principal Financial Officer, Treasurer and Secretary of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

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

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

Date: February 9, 2022	/s/ Vincent A. Verde
	Vincent A. Verde
	Principal Financial Officer, Treasurer and Secretary

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

XML

Document and Entity Information - shares	3 Months Ended
	Dec. 31, 2021	Feb. 09, 2022
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Period End Date	Dec. 31, 2021
Current Fiscal Year End Date	--09-30
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q1
Document Transition Report	false
Entity File Number	333-60608
Entity Registrant Name	JANEL CORP
Entity Central Index Key	0001133062
Entity Incorporation, State or Country Code	NV
Entity Tax Identification Number	86-1005291
Entity Address, Address Line One	80 Eighth Avenue
Entity Address, City or Town	New York
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	10011
City Area Code	212
Local Phone Number	373-5895
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		959,707

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2021	Sep. 30, 2021
Current Assets:
Cash	$ 5,186	$ 6,234
Accounts receivable, net of allowance for doubtful accounts of $945 and $812, respectively	57,161	52,312
Inventory, net	3,521	3,227
Prepaid expenses and other current assets	2,318	3,002
Total current assets	68,186	64,775
Property and Equipment, net	5,038	4,977
Other Assets:
Intangible assets, net	23,664	24,173
Goodwill	18,486	18,486
Operating lease right of use asset	6,353	2,936
Security deposits and other long-term assets	510	577
Total other assets	49,013	46,172
Total assets	122,237	115,924
Current Liabilities:
Line of credit	23,842	29,637
Accounts payable - trade	45,851	37,243
Accrued expenses and other current liabilities	4,886	6,311
Dividends payable	2,638	2,427
Current portion of earnout	1,054	1,054
Current portion of deferred acquisition payments	190	188
Current portion of subordinated promissory note-related party	500	550
Current portion of long-term debt	872	868
Current portion of operating lease liabilities	1,797	1,281
Total current liabilities	81,630	79,559
Other Liabilities:
Long-term debt	4,450	4,744
Long-term portion of earnout	2,546	2,546
Subordinated promissory notes-related party	5,404	5,525
Long-term portion of deferred acquisition payments	185	183
Mandatorily redeemable non-controlling interest	841	783
Deferred income taxes	2,432	2,299
Long-term operating lease liabilities	4,708	1,751
Other liabilities	331	415
Total other liabilities	20,897	18,246
Total liabilities	102,527	97,805
Stockholders' Equity:
Common stock, $0.001 par value; 4,500,000 shares authorized, 979,707 issued and 959,707 outstanding as of December 31, 2021 and 962,207 issued and 942,207 outstanding as of September 30, 2021	1	1
Paid-in capital	14,741	14,838
Common Treasury stock, at cost, 20,000 shares	(240)	(240)
Accumulated earnings	5,208	3,520
Total stockholders' equity	19,710	18,119
Total liabilities and stockholders' equity	122,237	115,924
Series B [Member]
Stockholders' Equity:
Preferred stock	0	0
Series C [Member]
Stockholders' Equity:
Preferred stock	$ 0	$ 0

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2021	Sep. 30, 2021
Current Assets:
Allowance for doubtful accounts	$ 945	$ 812
Stockholders' Equity:
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)	100,000	100,000
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	4,500,000	4,500,000
Common stock, shares issued (in shares)	979,707	962,207
Common stock, shares outstanding (in shares)	959,707	942,207
Common Treasury stock, at cost (in shares)	20,000	20,000
Series B [Member]
Stockholders' Equity:
Preferred stock, shares authorized (in shares)	5,700	5,700
Preferred Stock, shares issued (in shares)	31	31
Preferred stock, shares outstanding (in shares)	31	31
Series C [Member]
Stockholders' Equity:
Preferred stock, shares authorized (in shares)	30,000	30,000
Preferred Stock, shares issued (in shares)	20,960	20,960
Preferred stock, shares outstanding (in shares)	20,960	20,960
Preferred stock, liquidation value	$ 13,118	$ 12,907

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS [Abstract]
Revenue	$ 83,314	$ 26,478
Forwarding expenses and cost of revenues	67,825	20,029
Gross profit	15,489	6,449
Cost and Expenses:
Selling, general and administrative	12,338	5,709
Amortization of intangible assets	509	251
Total Costs and Expenses	12,847	5,960
Income from Operations	2,642	489
Other Items:
Interest expense	(279)	(119)
Income Before Income Taxes	2,363	370
Income tax expense	(675)	(115)
Net Income	1,688	255
Preferred stock dividends	(211)	(174)
Net Income Available to Common Stockholders	$ 1,477	$ 81
Net Income per share
Basic (in dollars per share)	$ 1.76	$ 0.27
Diluted (in dollars per share)	1.66	0.26
Net income per share attributable to common stockholders:
Basic (in dollars per share)	1.54	0.09
Diluted (in dollars per share)	$ 1.45	$ 0.08
Weighted average number of shares outstanding:
Basic (in shares)	959,100	935,900
Diluted (in shares)	1,018,100	966,800

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CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Preferred Stock [Member]	Common Stock [Member]	Paid-in Capital [Member]	Common Treasury Stock [Member]	Accumulated Earnings (Deficit) [Member]	Total
Balance at Sep. 30, 2020	$ 0	$ 1	$ 14,604	$ (240)	$ (1,683)	$ 12,682
Balance (in shares) at Sep. 30, 2020	19,791	918,652		20,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income	$ 0	$ 0	0	$ 0	255	255
Dividends to preferred stockholders	0	0		0	0	(174)
Dividends to preferred stockholders			(174)
Stock-based compensation	0	0	10	0	0	10
Stock options exercise	$ 0	$ 0	21	0	0	21
Stock options exercise (in shares)	0	2,502
Balance at Dec. 31, 2020	$ 0	$ 1	14,461	$ (240)	(1,428)	12,794
Balance (in shares) at Dec. 31, 2020	19,791	921,154		20,000
Balance at Sep. 30, 2021	$ 0	$ 1	14,838	$ (240)	3,520	18,119
Balance (in shares) at Sep. 30, 2021	20,991	962,207		20,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income	$ 0	$ 0	0	$ 0	1,688	1,688
Dividends to preferred stockholders	0	0		0	0	(211)
Dividends to preferred stockholders			(211)
Stock-based compensation	0	0	29	0	0	29
Stock options exercise	$ 0	$ 0	85	0	0	85
Stock options exercise (in shares)	0	17,500
Balance at Dec. 31, 2021	$ 0	$ 1	$ 14,741	$ (240)	$ 5,208	$ 19,710
Balance (in shares) at Dec. 31, 2021	20,991	979,707		20,000

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Cash Flows From Operating Activities:
Net income	$ 1,688	$ 255
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Provision for (recovery of) uncollectible accounts	102	(32)
Depreciation	107	86
Deferred income tax provision	133	86
Amortization of intangible assets	509	251
Amortization of acquired inventory valuation	171	214
Amortization of loan costs	2	2
Stock-based compensation	40	24
Changes in fair value of mandatorily redeemable noncontrolling interest	58	86
Changes in operating assets and liabilities, net of effects of acquisitions:
Accounts receivable	(4,952)	(1,857)
Inventory	(464)	(150)
Prepaid expenses and other current assets	684	(326)
Security deposits and other long-term assets	67	(40)
Accounts payable and accrued expenses	7,172	607
Other liabilities	(26)	(18)
Net cash provided by (used in) operating activities	5,291	(812)
Cash Flows From Investing Activities:
Acquisition of property and equipment, net of disposals	(169)	(55)
Acquisitions, net of cash acquired	0	(2,806)
Net cash used in investing activities	(169)	(2,861)
Cash Flows From Financing Activities:
Repayments of term loan	(292)	(206)
Proceeds from stock options exercise	85	21
Line of credit, (payments) proceeds, net	(5,795)	2,380
Repayment of subordinated promissory notes	(168)	(39)
Net cash (used in) provided by financing activities	(6,170)	2,156
Net decrease in cash	(1,048)	(1,517)
Cash at beginning of the period	6,234	3,349
Cash at end of period	5,186	1,832
Cash paid during the period for:
Interest	194	99
Income taxes	10	12
Non-cash investing activities:
Subordinated promissory notes of ICT	0	1,850
Non-cash financing activities:
Dividends declared to preferred stockholders	$ 211	$ 174

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BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

3 Months Ended

Dec. 31, 2021

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES [Abstract]

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

1. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

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

Revenue and revenue recognition

Logistics

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

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

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

In the Logistics segment, the Company disaggregates its revenues by its five primary service categories: ocean freight, air freight, trucking, customs brokerage, and other. A summary of the Company’s revenues disaggregated by major service lines for the three months ended December 31, 2021 and 2020 was as follows:

	Three Months Ended December 31,		Three Months Ended December 31,
Service Type	2021		2020
Ocean freight	$	32,876	$	9,039
Trucking		21,775		4,352
Air freight		13,874		6,202
Other		5,330		12
Customs brokerage		3,701		2,655
Total	$	77,556	$	22,260

Life Sciences

Revenues from the Life Sciences segment are derived from the sale of high-quality monoclonal and polyclonal antibodies, diagnostic reagents and diagnostic kits and other immunoreagents for biomedical research and antibody manufacturing. Revenues are recognized when products are shipped and risk of loss is transferred to the carrier(s) used.

Manufacturing

The Company’s Manufacturing segment is comprised of Indco, Inc. (“Indco”), a majority-owned subsidiary of the Company.  Revenues from Indco are derived from the engineering, manufacture and delivery of specialty mixing equipment and accessories. Revenues are recognized when products are shipped and risk of loss is transferred to the carrier(s) used.

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ACQUISITION

3 Months Ended

Dec. 31, 2021

ACQUISITION [Abstract]

ACQUISITION

2. ACQUISITION

Fiscal 2021 Acquisition

Logistics

On September 21, 2021, the Company completed the acquisition of all of the membership interests of Expedited Logistics and Freight Services, LLC (“ELFS”) and ELFS Brokerage LLC, a wholly-owned subsidiary of ELFS.  The purchase price for the membership interests was $19,000, subject to certain closing adjustments as set forth in the related purchase agreement.  Further earnout payments in an amount not anticipated to exceed $4,500 will be due to the former members of ELFS based on the operating profit earned by ELFS.  Upon the closing of the transaction, the former members of ELFS were paid $13,000 in cash and were issued an aggregate amount of $6,000 in subordinated promissory notes.

The ELFS acquisition was funded with cash provided by normal operations, borrowings under the Amended Loan and Security Agreement (the “Santander Loan Agreement”) with Santander Bank, N.A. (“Santander”) dated September 21, 2021, as well as subordinated promissory notes issued to the former members of ELFS. This acquisition was completed to expand our product offerings in our Logistics segment.

The following table summarizes, on an unaudited pro forma basis, the condensed combined results of operations of the Company for the three months ended December 31, 2020 assuming the acquisition of ELFS was made on October 1, 2020. The pro forma unaudited condensed consolidated results give effect to, among other things, amortization of intangible assets and interest expense on acquisition-related debt.  The pro forma results are not necessarily indicative of the operating results that would have occurred had the acquisitions been consummated as of the date indicated, nor are they necessarily indicative of future operating results.

	Three Months Ended December 31, 2020
Revenue	$	44,375
Income from Operations	$	630
Net Income	$	245
Net Income Available to Common Stockholders	$	71
Net income per share:
Basic	$	0.26
Diluted	$	0.25
Net income per share attributable to common stockholders:
Basic	$	0.08
Diluted	$	0.07

The foregoing unaudited pro forma results are for informational purposes only and are not necessarily indicative of the actual results of operations that might have occurred had the acquisition occurred on October 1, 2019, nor are they necessarily indicative of future results.

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INVENTORY

3 Months Ended

Dec. 31, 2021

INVENTORY [Abstract]

INVENTORY

3. INVENTORY

Inventories consisted of the following (in thousands):

	December 31, 2021			September 30, 2021
Finished goods	$	860		$	919
Work-in-process		944			968
Raw materials		1,745			1,365
Gross inventory		3,549			3,252
Less – reserve for inventory valuation		(28	)		(25	)
Inventory net	$	3,521		$	3,227

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INTANGIBLE ASSETS

3 Months Ended

Dec. 31, 2021

INTANGIBLE ASSETS [Abstract]

INTANGIBLE ASSETS

4. INTANGIBLE ASSETS

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

	December 31, 2021			September 30, 2021			Life
Customer relationships	$	23,482		$	23,482		12-24 Years
Trademarks/names		4,490			4,490		1-20 Years
Trademarks/names		521			521		Indefinite
Other		1,149			1,149		2-22 Years
		29,642			29,642
Less: Accumulated Amortization		(5,978	)		(5,469	)
Intangible assets, net	$	23,664		$	24,173

The composition of the intangible assets balance at December 31, 2021 and September 30, 2021 is as follows (in thousands):

	December 31, 2021			September 30, 2021
Logistics	$	18,174		$	18,174
Life Sciences		3,768			3,768
Manufacturing		7,700			7,700
		29,642			29,642
Less: Accumulated Amortization		(5,978	)		(5,469	)
Intangible assets, net	$	23,664		$	24,173

Amortization expense for the three months ended December 31, 2021 and 2020 was $509 and $251, respectively.

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GOODWILL

3 Months Ended

Dec. 31, 2021

GOODWILL [Abstract]

GOODWILL

5. GOODWILL

The Company’s goodwill carrying amounts relate to the acquisitions in the Logistics, Life Sciences and Manufacturing businesses.

The composition of the goodwill balance at December 31, 2021 and September 30, 2021 was as follows (in thousands):

	December 31, 2021		September 30, 2021
Logistics	$	9,063	$	9,063
Life Sciences		4,377		4,377
Manufacturing		5,046		5,046
Total	$	18,486	$	18,486

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NOTES PAYABLE - BANKS

3 Months Ended

Dec. 31, 2021

NOTES PAYABLE - BANKS [Abstract]

NOTES PAYABLE - BANKS

6. NOTES PAYABLE – BANKS

(A) Santander Bank Facility

The wholly-owned subsidiaries which comprise the Company’s Logistics segment (collectively, the “Janel Group Borrowers”), with the Company as a guarantor, have a Loan and Security Agreement with Santander with respect to a revolving line of credit facility (the “Santander Facility”). As most recently amended in September 2021, the Santander Facility provides that the Janel Group Borrowers can borrow up to $30,000 limited to 85% of the borrowers’ eligible accounts receivable, borrowing base and reserves, subject to adjustments set forth in the Santander Loan Agreement. Interest accrues at an annual rate equal to LIBOR (30, 60 or 90 day) plus 2.25% subject to a LIBOR floor of 75 basis points at close, with a potential LIBOR floor reduction to 25 basis points upon certain conditions. The Company is provided the option of making Series C preferred payments or distributions if specified conditions are met. The Santander Loan Agreement matures on September 21, 2026. The Janel Group Borrowers’ obligations under the Santander Facility are secured by all of the assets of the Janel Group Borrowers, while the Santander Loan Agreement contains customary terms and covenants. As a result of its terms, the Santander Facility is classified as a current liability on the consolidated balance sheet.

At December 31, 2021, outstanding borrowings under the Santander Facility were $23,842, representing 79.47% of the $30,000 available subject to limitations thereunder, and interest was accruing at an effective interest rate of 3.00%.

At September 30, 2021, outstanding borrowings under the Santander Facility were $29,637, representing 98.8% of the $30,000 available subject to limitations thereunder, and interest was accruing at an effective interest rate of 3.00%.

 The Company was in compliance with the covenants defined in the Santander Loan Agreement at both December 31, 2021 and September 30, 2021.

(B) First Merchants Bank Credit Facility

Indco has a Credit Agreement (the “First Merchants Credit Agreement”) with First Merchants Bank with respect to a $5,500 term loan, a $1,000 (limited to the borrowing base and reserves) revolving loan and a $680 mortgage loan (together, the “First Merchant Facility”).  Interest accrues on the term loan at an annual rate equal to the one-month LIBOR plus either 2.75% (if Indco’s total funded debt to EBITDA ratio is less than 2:1) or 3.5% (if Indco’s total funded debt to EBITDA ratio is greater than or equal to 2:1). Interest accrues on the revolving loan at an annual rate equal to the one-month LIBOR plus 2.75%. Interest accrues on the mortgage loan at an annual rate of 4.19%. Indco’s obligations under the First Merchants Facility are secured by all of Indco’s real property and other assets, and are guaranteed by Janel. Additionally, Janel’s guarantee of Indco’s obligations is secured by a pledge of Janel’s Indco shares.

The term loan and revolving loan portions of the First Merchants Facility will expire on August 30, 2024, and the mortgage loan will mature on July 1, 2025 (subject to earlier termination as provided in the First Merchants Credit Agreement), unless renewed or extended.

 As of December 31, 2021, there were no outstanding borrowings under the revolving loan, $2,519 of borrowings under the term loan, and $649 of borrowing under the mortgage loan with interest accruing on the term loan and mortgage loan at an effective interest rate of 2.85% and 4.19%, respectively.

As of September 30, 2021, there were no outstanding borrowings under the revolving loan, $2,713 of borrowings under the term loan, and $655 of borrowing under the mortgage loan with interest accruing on the term loan and mortgage loan at an effective interest rate of 2.83% and 4.19%, respectively.

Indco was in compliance with the covenants defined in the First Merchants Credit Agreement at both December 31, 2021 and September 30, 2021.

	December 31, 2021			September 30, 2021
	(in thousands)
Total Debt*	$	3,168		$	3,368
Less Current Portion		(809	)		(809	)
Long Term Portion	$	2,359		$	2,559

* Note: Term Loan is due in monthly installments of $65 plus monthly interest, at LIBOR plus 2.75% to 3.5% per annum, mortgage loan is due in monthly installments of $4, including interest at 4.19%. The credit facilities are collateralized by all of Indco’s assets and guaranteed by Janel.

(C) First Northern Bank of Dixon

Antibodies Incorporated (“Antibodies”), a wholly-owned subsidiary of the Company (by succession), has a loan agreement (the “First Northern Loan Agreement”) with First Northern Bank of Dixon (“First Northern”), with respect to a $2,235 term loan (the “First Northern Term Loan”) which bears interest at an annual rate of Prime plus 325 basis points (currently 4.18%) and matures on November 14, 2029. In addition, Antibodies has a $750 revolving credit facility with First Northern which currently bears interest at the annual rate of Prime plus 325 basis points (currently 4.18%) and matures on November 5, 2022 (the “First Northern Revolving Loan”). There were no outstanding borrowings on the revolving credit facility as of December 31, 2021 or September 30, 2021.

Antibodies also has two separate business loan agreements with First Northern: a $125 term loan in connection with the expansion of solar generation capacity on the Antibodies property (“First Northern Solar Loan”) bearing interest at the annual rate of 4.43% (subject to adjustment in five years) and maturing on November 14, 2029; and a $60 term loan in connection with the expansion of generator capacity on the Antibodies property (“Generator Loan”) bearing interest at the annual rate of 4.25% and maturing on November 5, 2025. There were no outstanding borrowings under the Generator Loan as of December 31, 2021 or September 30, 2021.

As of December 31, 2021, the total amount outstanding under the First Northern Term Loan was $2,126, of which $2,070 is included in long-term debt and $56 is included in current portion of long-term debt, with interest accruing at an effective interest rate of 4.18%.

 
As of September 30, 2021, the total amount outstanding under the First Northern Term Loan was $2,139, of which $2,084 is included in long-term debt and $55 is included in current portion of long-term debt, with interest accruing at an effective interest rate of 4.18%.

As of December 31, 2021, the total amount outstanding under the First Northern Solar Loan was $28, of which $21 is included in long-term debt, and $7 is included in current portion of long-term debt, with interest accruing at an effective interest rate of 4.43%.

 As of September 30, 2021, the total amount outstanding under the First Northern Solar Loan was $105, of which $101 is included in long-term debt and $4 is included in current portion of long-term debt, with interest accruing at an effective interest rate of 4.43%.

The Company was in compliance with the covenants defined in the First Northern Loan Agreement at December 31, 2021 and September 30, 2021.

	December 31, 2021			September 30, 2021
	(in thousands)
Total Debt*	$	2,154		$	2,244
Less Current Portion		(63	)		(59	)
Long Term Portion	$	2,091		$	2,185

* Long-term debt is due in monthly installments of $12 plus monthly interest, at 4.18% per annum. The note is collateralized by real property owned by Antibodies and guaranteed by Janel.

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SUBORDINATED PROMISSORY NOTES - RELATED PARTY

3 Months Ended

Dec. 31, 2021

SUBORDINATED PROMISSORY NOTES - RELATED PARTY [Abstract]

SUBORDINATED PROMISSORY NOTES - RELATED PARTY

7. SUBORDINATED PROMISSORY NOTES - RELATED PARTY

 Aves Labs, Inc., a wholly-owned subsidiary of the Company, is the obligor on a 0.5% subordinated promissory note in the amount of $1,850 (the “ICT Subordinated Promissory Note”) issued to the former owner of ImmunoChemistry Technologies, LLC (“ICT”), in connection with a business combination whereby the Company acquired all of the membership interests of ICT.  The ICT Subordinated Promissory Note is payable in sixteen scheduled quarterly installments of principal and interest beginning March 4, 2021, matures on March 21, 2025, and may be prepaid, in whole or in part, without premium or penalty.  The ICT Subordinated Promissory Note is guaranteed by the Company and is secured by the membership interests in ICT. The ICT Subordinated Promissory Note is subordinate to and junior in right of payment for principal interest premiums and other amounts payable to the Santander Bank Facility, First Merchants Facility and the First Northern Bank of Dixon.

As of December 31, 2021, the amount outstanding under the ICT Subordinated Promissory Note was $1,066, of which $500 is included in the current portion of subordinated promissory notes and $566 is included in the long-term portion of subordinated promissory notes.

As of September 30, 2021, the amount outstanding under the ICT Subordinated Promissory Note was $1,237, of which $550 is included in the current portion of subordinated promissory notes and $687 is included in the long-term portion of subordinated promissory notes.

Janel Group is the obligor on four 4% subordinated promissory notes totaling $6,000 (together, the “ELFS Subordinated Promissory Notes”) payable to certain former shareholders of ELFS.  All of the ELFS Subordinated Promissory Notes are guaranteed by the Company and are subordinate to and junior in right of payment for principal, interest, premiums and other amounts payable to the Santander Bank Facility and the First Merchants Facility. The ELFS Subordinated Promissory Notes are payable in twelve equal consecutive quarterly installments of principal together with accrued interest.  Beginning October 15, 2021 and on the same day of the next eight consecutive calendar quarters, thereafter payment of accrued interest and unpaid interest is due to the former shareholders.  Beginning October 15, 2023 and on the same day of the next twelve consecutive calendar quarters, thereafter payment of principal together with accrued interest and unpaid interest is due to the former shareholders. The ELFS Subordinated Promissory Notes totaling $6,000 were recorded net of working capital adjustment of $1,163.

As of both of December 31, 2021 and September 30, 2021, the amount outstanding under the ELFS Subordinated Promissory Notes was $4,838 and was included in the long-term portion of subordinated promissory notes.

	December 31, 2021			September 30, 2021
	(in thousands)
Total subordinated promissory notes	$	5,904		$	6,075
Less current portion of subordinated promissory notes		(500	)		(550	)
Long term portion of subordinated promissory notes	$	5,404		$	5,525

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STOCK-BASED COMPENSATION

3 Months Ended

Dec. 31, 2021

STOCK-BASED COMPENSATION [Abstract]

STOCK-BASED COMPENSATION

8. STOCK-BASED COMPENSATION

On October 30, 2013, the board of directors of the Company adopted the Company’s 2013 Non-Qualified Stock Option Plan (the “2013 Option Plan”) providing for options to purchase up to 100,000 shares of common stock for issuance to directors, officers, employees of and consultants to the Company and its subsidiaries.

On September 21, 2021, the board of directors of the Company adopted the Amended and Restated 2017 Janel Corporation Equity Incentive Plan (the “Amended Plan”) pursuant to which non-statutory stock options, restricted stock awards and stock appreciation rights of the Company’s Common Stock, par value $0.001 per share (“Common Stock”), may be granted to employees, directors and consultants to the Company and its subsidiaries. The Amended Plan increased the number of shares of Common Stock that may be issued pursuant to the Amended Plan from 100,000 to 200,000 shares of Common Stock of the Company and was updated to reflect certain other non-substantive amendments.

Total stock-based compensation for the three months ended December 31, 2021 and 2020 amounted to $29 and $24, respectively, and is included in selling, general and administrative expense in the Company’s statements of operations.

(A) Stock Options

The Company uses the Black-Scholes option pricing model to estimate the fair value of our share-based awards. In applying this model, we use the following assumptions:

• 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.

The fair values of our employee option awards were estimated using the assumptions below, which yielded the following weighted average grant date fair values for the periods presented:

	Three Months Ended December 31, 2021
Risk-free interest rate	1.10%
Expected option term in years	5.5-6.5
Expected volatility	100.3% - 110.3%
Dividend yield	—%
Weighted average grant date fair value	$17.60 - $19.07

Options for Employees

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value (in thousands)
Outstanding balance at September 30, 2021		98,994		$	5.93		4.5	$	1,689.38
Granted		10,000		$	23.00		9.8	$	—
Exercised		(17,500	)	$	4.87		—	$	—
Outstanding balance at December 31, 2021		91,494		$	8.00		5.1	$	1,463.60
Exercisable at December 31, 2021		73,998		$	5.88		4.1	$	1,341.14

The aggregate intrinsic value in the above table was calculated as the difference between the closing price of the Company’s common stock at December 31, 2021 of $24 per share and the exercise price of the stock options that had strike prices below such closing price.

As of December 31, 2021, there was approximately $153 of total unrecognized compensation expense related to the unvested employee stock options which is expected to be recognized over a weighted average period of less than one year.

Liability classified share-based awards

During the three months ended December 31, 2021, 7,018 options were granted and 10,372 options were exercised with respect to Indco’s common stock. The Company uses the Black-Scholes option pricing model to estimate the fair value of Indco’s share-based awards. In applying this model, the Company used the following assumptions:

	Three Months Ended December 31, 2021
Risk-free interest rate		1.10%
Expected option term in years		5.5-6.5
Expected volatility		39%
Dividend yield		—%
Weighted average grant date fair value		$5.57 - $6.66

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value (in thousands)
Outstanding balance at September 30, 2021		38,961		$	10.28		6.62	$	78.16
Granted		7,018		$	17.16		9.75	$	—
Exercised		(10,372	)	$	8.30		—	$	—
Outstanding balance at December 31, 2021		35,607		$	12.22		7.51	$	175.98
Exercisable at December 31, 2021		21,663		$	10.72		6.49	$	139.47

The aggregate intrinsic value in the above table was calculated as the difference between the valuation price of Indco’s common stock at December 31, 2021 of $17.16 per share and the exercise price of the stock options that had strike prices below such closing price.

The liability classified awards were measured at fair value at each reporting date until the final measurement date, which was the date of completion of services required to earn the option. The accrued compensation cost related to these options was approximately $279 and $361 as of December 31, 2021 and September 30, 2021, respectively, and is included in other liabilities in the condensed consolidated financial statement. The compensation cost related to these options was approximately $11 and $15 for the three months ended December 31, 2021 and 2020, respectively.

The cost associated with the options issued on each grant date is being recognized ratably over the period of service required to earn each tranche of options.

Upon vesting, the options continue to be accounted for as a liability in accordance with ASC 480-10-25-8 and are measured in accordance with ASC 480-10-35 at every reporting period until the options are settled.

On December 13, 2021, minority owners of Indco exercised 7,000 and 3,372 options to purchase Indco’s common stock at an exercise price of $6.48 and $12.07 for an aggregate purchase price of $45 and $41, respectively. Indco issued related party promissory notes in the amount of $45 and $41, respectively which bear interest at 1% per annum; both interest and principal are payable on the maturity date of December 31, 2024. These notes are included in security deposits and other long-term assets. The fair value of the 7,000 and 3,372 shares of Indco’s common stock was recorded as an increase in mandatorily redeemable non-controlling interest. On December 13, 2021, Indco repurchased 7,000 shares of Indco’s stock at a purchase price of $17.16 per share from a minority owner of Indco for the aggregate purchase price of $120. The fair value of the repurchased 7,000 shares of Indco’s common stock was recorded as a decrease in mandatorily redeemable non-controlling interest. As a result of the exercise of 10,372 options and the repurchase of 7,000 shares of Indco’s stock, the mandatorily redeemable non-controlling interest percentage was 9.77% as of December 31, 2021.

Changes in the fair value of the vested options are recognized in earnings in the consolidated financial statements.

The options are classified as liabilities, and the underlying shares of Indco’s common stock also contain put options which result in their classification as a mandatorily redeemable security. While their redemption does not occur on a fixed date, there is an unconditional obligation for the Company to repurchase the shares upon death, which is certain to occur at some point in time.

As of December 31, 2021, there was approximately $70 of total unrecognized compensation expense related to the unvested Indco stock options. This expense is expected to be recognized over a weighted average period of less than one year.

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INCOME PER COMMON SHARE

3 Months Ended

Dec. 31, 2021

INCOME PER COMMON SHARE [Abstract]

INCOME PER COMMON SHARE

9. INCOME PER COMMON SHARE

The following table provides a reconciliation of the basic and diluted income per share (“EPS”) computations for the three months ended December 31, 2021 and 2020 (in thousands, except per share data):

	For the three Months Ended December 31,
	2021			2020
Income:
Net income	$	1,688		$	255
Preferred stock dividends		(211	)		(174	)
Net income available to common stockholders	$	1,477		$	81
Common Shares:
Basic - weighted average common shares		959.1			935.9
Effect of dilutive securities:
Stock options		58.7			30.6
Convertible preferred stock		0.3			0.3
Diluted - weighted average common stock		1,018.1			966.8
Income per Common Share:
Basic -
Net income	$	1.76		$	0.27
Preferred stock dividends		(0.22	)		(0.18	)
Net income attributable to common stockholders	$	1.54		$	0.09
Diluted -
Net income	$	1.66		$	0.26
Preferred stock dividends		(0.21	)		(0.18	)
Net income available to common stockholders	$	1.45		$	0.08

The computation for the diluted number of shares excludes unvested restricted stock and unexercised stock options that are anti-dilutive. There were 10 anti-dilutive shares for the three-month period ended December 31, 2021 and no anti-dilutive shares for the three-month period ended December 31, 2020.

Potentially diluted securities as of December 31, 2021 and 2020 are as follows:

	December 31,
	2021		2020
Employee stock options		91.5		98.9
Non-employee stock options		—		6.1
Convertible preferred stock		0.3		0.3
		91.8		105.3

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INCOME TAXES

3 Months Ended

Dec. 31, 2021

INCOME TAXES [Abstract]

INCOME TAXES

10. INCOME TAXES

The reconciliation of income tax computed at the Federal statutory rate to the provision for income taxes from continuing operations is as follows (in thousands):

	December 31, 2021		December 31, 2020
Federal taxes at statutory rates	$	496	$	78
Permanent differences		10		3
State and local taxes, net of Federal benefit		169		34
Total	$	675	$	115

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BUSINESS SEGMENT INFORMATION

3 Months Ended

Dec. 31, 2021

BUSINESS SEGMENT INFORMATION [Abstract]

BUSINESS SEGMENT INFORMATION

11. BUSINESS SEGMENT INFORMATION

As referenced above in note 1, the Company operates in three reportable segments: Logistics (previously known as Global Logistics Services), Life Sciences and Manufacturing. In the fourth quarter of 2021, our former Global Logistics Services segment was renamed “Logistics”; this change was in name only and had no impact on the Company’s previously reported historical financial position, results of operations, cash flow or segment level results.

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

The following tables presents selected financial information about the Company’s reportable segments and Corporate for the purpose of reconciling to the consolidated totals for the three months ended December 31, 2021 and 2020:

For the three months ended December 31, 2021 (in thousands)	Consolidated		Logistics		Life Sciences		Manufacturing		Corporate
Revenues	$	83,314	$	77,556	$	3,244	$	2,514	$	—
Forwarding expenses and cost of revenues		67,825		65,610		1,001		1,214		—
Gross margin		15,489		11,946		2,243		1,300		—
Selling, general and administrative		12,338		9,349		1,250		729		1,010
Amortization of intangible assets		509		—		—		—		509
Income (loss) from operations		2,642		2,597		993		571		(1,519	)
Interest expense		279		224		29		26		—
Identifiable assets		122,237		64,899		10,083		4,017		43,238
Capital expenditures	$	169	$	65	$	102	$	2	$	—

For the three months ended December 31, 2020 (in thousands)	Consolidated		Logistics		Life Sciences		Manufacturing		Corporate
Revenues	$	26,478	$	22,260	$	2,349	$	1,869	$	—
Forwarding expenses and cost of revenues		20,029		18,395		756		878		—
Gross margin		6,449		3,865		1,593		991		—
Selling, general and administrative		5,709		3,374		976		642		717
Amortization of intangible assets		251		—		—		—		251
Operating income (loss)		489		491		617		349		(968	)
Interest expense		119		37		28		47		7
Identifiable assets		68,224		22,418		10,252		3,501		32,053
Capital expenditures	$	55	$	19	$	24	$	12	$	—

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FAIR VALUE MEASUREMENTS

3 Months Ended

Dec. 31, 2021

FAIR VALUE MEASUREMENTS [Abstract]

FAIR VALUE MEASUREMENTS

12. FAIR VALUE MEASUREMENTS

Recurring Fair Value Measurements

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

Level 3	December 31, 2021		September 30, 2021
Contingent earnout liabilities	$	3,600	$	3,600
Level 3 Liabilities	$	3,600	$	3,600

This liability relates to the estimated fair value of earnout payments to former ELFS owners for the earnout period ending December 31, 2021 and September 30, 2021. The current and non-current portions of the fair value of the contingent earnout liability at December 31, 2021 and September 30, 2021 are $1,054 and $2,546, respectively.

Refer to Note 2 to Consolidated Financial Statements for ELFS acquisition information. The following table sets forth a summary of the changes in the fair value of the Company’s contingent earnout liabilities, which are measured at fair value on a recurring basis utilizing Level 3 assumptions in their valuation (in thousands):

	December 31, 2021		September 30, 2021
Balance at beginning of period	$	3,600	$	—
Fair value of contingent consideration recorded in connection with business combinations		—		3,600
Change in fair value of contingent consideration		—		—
Balance at end of period	$	3,600	$	3,600

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LEASES

3 Months Ended

Dec. 31, 2021

LEASES [Abstract]

LEASES

13. LEASES

The Company has operating leases for office and warehouse space in all districts where it conducts business. As of December 31, 2021, the remaining terms of the Company’s operating leases were between one and 60 months, and certain lease agreements contain provisions for future rent increases. Payments due under the lease contracts include the minimum lease payments that the Company is obligated to make under the non-cancelable initial terms of the leases as the renewal terms are at the Company’s option and the Company is not reasonably certain to exercise those renewal options at lease commencement.

The components of lease cost for the three-month periods ended December 31, 2021 and 2020 are as follows (in thousands):

	Three Months Ended December 31, 2021		Three Months Ended December 31, 2020
Operating lease cost	$	480	$	231
Short-term lease cost		152		14
Total lease cost	$	632	$	245

Rent expense for the three months ended December 31, 2021 and 2020 was $632 and $245, respectively. Operating lease right of use assets, current portion of operating lease liabilities and long-term operating lease liabilities reported in the condensed consolidated balance sheets for operating leases as of December 31, 2021 were $6,353, $1,797 and $4,708, respectively. Operating lease right of use assets, current portion of operating lease liabilities and long-term operating lease liabilities reported in the condensed consolidated balance sheets for operating leases as of September 30, 2021 were $2,936, $1,281 and $1,751, respectively.

During the three months ended December 31, 2021, the Company, through its wholly owned subsidiary ELFS entered into new operating leases and recorded an additional $3,842 in operating lease right of use assets and corresponding lease liabilities.

As of December 31, 2021 and September 31, 2021, the weighted-average remaining lease term and the weighted-average discount rate related to the Company’s operating leases were 5.2 years and 3.18% and 2.9 years and 3.89%, respectively.

Future minimum lease payments under non-cancelable operating leases as of December 31, 2021 are as follows (in thousands):

	Year End December 31, 2021
2022	$	1,798
2023		1,441
2024		1,147
2025		853
2026		620
Thereafter		1,168
Total undiscounted loan payments		7,027
Less: Imputed interest		(522	)
Total lease obligation	$	6,505

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BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies)

3 Months Ended

Dec. 31, 2021

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES [Abstract]

Revenue and revenue recognition

Revenue and revenue recognition

Logistics

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

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

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

In the Logistics segment, the Company disaggregates its revenues by its five primary service categories: ocean freight, air freight, trucking, customs brokerage, and other. A summary of the Company’s revenues disaggregated by major service lines for the three months ended December 31, 2021 and 2020 was as follows:

	Three Months Ended December 31,		Three Months Ended December 31,
Service Type	2021		2020
Ocean freight	$	32,876	$	9,039
Trucking		21,775		4,352
Air freight		13,874		6,202
Other		5,330		12
Customs brokerage		3,701		2,655
Total	$	77,556	$	22,260

Life Sciences

Revenues from the Life Sciences segment are derived from the sale of high-quality monoclonal and polyclonal antibodies, diagnostic reagents and diagnostic kits and other immunoreagents for biomedical research and antibody manufacturing. Revenues are recognized when products are shipped and risk of loss is transferred to the carrier(s) used.

Manufacturing

The Company’s Manufacturing segment is comprised of Indco, Inc. (“Indco”), a majority-owned subsidiary of the Company.  Revenues from Indco are derived from the engineering, manufacture and delivery of specialty mixing equipment and accessories. Revenues are recognized when products are shipped and risk of loss is transferred to the carrier(s) used.

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BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Tables)

3 Months Ended

Dec. 31, 2021

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES [Abstract]

Disaggregation of Revenue

A summary of the Company’s revenues disaggregated by major service lines for the three months ended December 31, 2021 and 2020 was as follows:

	Three Months Ended December 31,		Three Months Ended December 31,
Service Type	2021		2020
Ocean freight	$	32,876	$	9,039
Trucking		21,775		4,352
Air freight		13,874		6,202
Other		5,330		12
Customs brokerage		3,701		2,655
Total	$	77,556	$	22,260

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ACQUISITION (Tables)

3 Months Ended

Dec. 31, 2021

ACQUISITION [Abstract]

Unaudited Pro Forma Basis Information

The following table summarizes, on an unaudited pro forma basis, the condensed combined results of operations of the Company for the three months ended December 31, 2020 assuming the acquisition of ELFS was made on October 1, 2020. The pro forma unaudited condensed consolidated results give effect to, among other things, amortization of intangible assets and interest expense on acquisition-related debt.  The pro forma results are not necessarily indicative of the operating results that would have occurred had the acquisitions been consummated as of the date indicated, nor are they necessarily indicative of future operating results.

	Three Months Ended December 31, 2020
Revenue	$	44,375
Income from Operations	$	630
Net Income	$	245
Net Income Available to Common Stockholders	$	71
Net income per share:
Basic	$	0.26
Diluted	$	0.25
Net income per share attributable to common stockholders:
Basic	$	0.08
Diluted	$	0.07

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INVENTORY (Tables)

3 Months Ended

Dec. 31, 2021

INVENTORY [Abstract]

Inventories

Inventories consisted of the following (in thousands):

	December 31, 2021			September 30, 2021
Finished goods	$	860		$	919
Work-in-process		944			968
Raw materials		1,745			1,365
Gross inventory		3,549			3,252
Less – reserve for inventory valuation		(28	)		(25	)
Inventory net	$	3,521		$	3,227

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INTANGIBLE ASSETS (Tables)

3 Months Ended

Dec. 31, 2021

INTANGIBLE ASSETS [Abstract]

Intangible Assets and Estimated Useful Lives used in Computation of Amortization

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

	December 31, 2021			September 30, 2021			Life
Customer relationships	$	23,482		$	23,482		12-24 Years
Trademarks/names		4,490			4,490		1-20 Years
Trademarks/names		521			521		Indefinite
Other		1,149			1,149		2-22 Years
		29,642			29,642
Less: Accumulated Amortization		(5,978	)		(5,469	)
Intangible assets, net	$	23,664		$	24,173

The composition of the intangible assets balance at December 31, 2021 and September 30, 2021 is as follows (in thousands):

	December 31, 2021			September 30, 2021
Logistics	$	18,174		$	18,174
Life Sciences		3,768			3,768
Manufacturing		7,700			7,700
		29,642			29,642
Less: Accumulated Amortization		(5,978	)		(5,469	)
Intangible assets, net	$	23,664		$	24,173

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GOODWILL (Tables)

3 Months Ended

Dec. 31, 2021

GOODWILL [Abstract]

Composition of Goodwill

The composition of the goodwill balance at December 31, 2021 and September 30, 2021 was as follows (in thousands):

	December 31, 2021		September 30, 2021
Logistics	$	9,063	$	9,063
Life Sciences		4,377		4,377
Manufacturing		5,046		5,046
Total	$	18,486	$	18,486

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NOTES PAYABLE - BANKS (Tables)

3 Months Ended

Dec. 31, 2021

First Merchants Bank Credit Facility [Member]

Debt Instrument [Line Items]

Schedule of Debt

Indco was in compliance with the covenants defined in the First Merchants Credit Agreement at both December 31, 2021 and September 30, 2021.

	December 31, 2021			September 30, 2021
	(in thousands)
Total Debt*	$	3,168		$	3,368
Less Current Portion		(809	)		(809	)
Long Term Portion	$	2,359		$	2,559

* Note: Term Loan is due in monthly installments of $65 plus monthly interest, at LIBOR plus 2.75% to 3.5% per annum, mortgage loan is due in monthly installments of $4, including interest at 4.19%. The credit facilities are collateralized by all of Indco’s assets and guaranteed by Janel.

First Northern Bank Dixon [Member]

Debt Instrument [Line Items]

Schedule of Debt

The Company was in compliance with the covenants defined in the First Northern Loan Agreement at December 31, 2021 and September 30, 2021.

	December 31, 2021			September 30, 2021
	(in thousands)
Total Debt*	$	2,154		$	2,244
Less Current Portion		(63	)		(59	)
Long Term Portion	$	2,091		$	2,185

* Long-term debt is due in monthly installments of $12 plus monthly interest, at 4.18% per annum. The note is collateralized by real property owned by Antibodies and guaranteed by Janel.

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SUBORDINATED PROMISSORY NOTES - RELATED PARTY (Tables)

3 Months Ended

Dec. 31, 2021

SUBORDINATED PROMISSORY NOTES - RELATED PARTY [Abstract]

Amounts Outstanding

As of both of December 31, 2021 and September 30, 2021, the amount outstanding under the ELFS Subordinated Promissory Notes was $4,838 and was included in the long-term portion of subordinated promissory notes.

	December 31, 2021			September 30, 2021
	(in thousands)
Total subordinated promissory notes	$	5,904		$	6,075
Less current portion of subordinated promissory notes		(500	)		(550	)
Long term portion of subordinated promissory notes	$	5,404		$	5,525

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STOCK-BASED COMPENSATION (Tables)

3 Months Ended

Dec. 31, 2021

Employee [Member]

Stock Based Compensation [Abstract]

Fair Value Assumptions

The fair values of our employee option awards were estimated using the assumptions below, which yielded the following weighted average grant date fair values for the periods presented:

	Three Months Ended December 31, 2021
Risk-free interest rate	1.10%
Expected option term in years	5.5-6.5
Expected volatility	100.3% - 110.3%
Dividend yield	—%
Weighted average grant date fair value	$17.60 - $19.07

Activity of Stock Options

Options for Employees

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value (in thousands)
Outstanding balance at September 30, 2021		98,994		$	5.93		4.5	$	1,689.38
Granted		10,000		$	23.00		9.8	$	—
Exercised		(17,500	)	$	4.87		—	$	—
Outstanding balance at December 31, 2021		91,494		$	8.00		5.1	$	1,463.60
Exercisable at December 31, 2021		73,998		$	5.88		4.1	$	1,341.14

Indco [Member]

Stock Based Compensation [Abstract]

Fair Value Assumptions

The Company uses the Black-Scholes option pricing model to estimate the fair value of Indco’s share-based awards. In applying this model, the Company used the following assumptions:

	Three Months Ended December 31, 2021
Risk-free interest rate		1.10%
Expected option term in years		5.5-6.5
Expected volatility		39%
Dividend yield		—%
Weighted average grant date fair value		$5.57 - $6.66

Activity of Stock Options

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value (in thousands)
Outstanding balance at September 30, 2021		38,961		$	10.28		6.62	$	78.16
Granted		7,018		$	17.16		9.75	$	—
Exercised		(10,372	)	$	8.30		—	$	—
Outstanding balance at December 31, 2021		35,607		$	12.22		7.51	$	175.98
Exercisable at December 31, 2021		21,663		$	10.72		6.49	$	139.47

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INCOME PER COMMON SHARE (Tables)

3 Months Ended

Dec. 31, 2021

INCOME PER COMMON SHARE [Abstract]

Reconciliation of Basic and Diluted Income (Loss) per Share

The following table provides a reconciliation of the basic and diluted income per share (“EPS”) computations for the three months ended December 31, 2021 and 2020 (in thousands, except per share data):

	For the three Months Ended December 31,
	2021			2020
Income:
Net income	$	1,688		$	255
Preferred stock dividends		(211	)		(174	)
Net income available to common stockholders	$	1,477		$	81
Common Shares:
Basic - weighted average common shares		959.1			935.9
Effect of dilutive securities:
Stock options		58.7			30.6
Convertible preferred stock		0.3			0.3
Diluted - weighted average common stock		1,018.1			966.8
Income per Common Share:
Basic -
Net income	$	1.76		$	0.27
Preferred stock dividends		(0.22	)		(0.18	)
Net income attributable to common stockholders	$	1.54		$	0.09
Diluted -
Net income	$	1.66		$	0.26
Preferred stock dividends		(0.21	)		(0.18	)
Net income available to common stockholders	$	1.45		$	0.08

Potentially Diluted Securities

Potentially diluted securities as of December 31, 2021 and 2020 are as follows:

	December 31,
	2021		2020
Employee stock options		91.5		98.9
Non-employee stock options		—		6.1
Convertible preferred stock		0.3		0.3
		91.8		105.3

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INCOME TAXES (Tables)

3 Months Ended

Dec. 31, 2021

INCOME TAXES [Abstract]

Income Tax Reconciliation

The reconciliation of income tax computed at the Federal statutory rate to the provision for income taxes from continuing operations is as follows (in thousands):

	December 31, 2021		December 31, 2020
Federal taxes at statutory rates	$	496	$	78
Permanent differences		10		3
State and local taxes, net of Federal benefit		169		34
Total	$	675	$	115

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BUSINESS SEGMENT INFORMATION (Tables)

3 Months Ended

Dec. 31, 2021

BUSINESS SEGMENT INFORMATION [Abstract]

Segment Reporting Information by Segment

The following tables presents selected financial information about the Company’s reportable segments and Corporate for the purpose of reconciling to the consolidated totals for the three months ended December 31, 2021 and 2020:

For the three months ended December 31, 2021 (in thousands)	Consolidated		Logistics		Life Sciences		Manufacturing		Corporate
Revenues	$	83,314	$	77,556	$	3,244	$	2,514	$	—
Forwarding expenses and cost of revenues		67,825		65,610		1,001		1,214		—
Gross margin		15,489		11,946		2,243		1,300		—
Selling, general and administrative		12,338		9,349		1,250		729		1,010
Amortization of intangible assets		509		—		—		—		509
Income (loss) from operations		2,642		2,597		993		571		(1,519	)
Interest expense		279		224		29		26		—
Identifiable assets		122,237		64,899		10,083		4,017		43,238
Capital expenditures	$	169	$	65	$	102	$	2	$	—

For the three months ended December 31, 2020 (in thousands)	Consolidated		Logistics		Life Sciences		Manufacturing		Corporate
Revenues	$	26,478	$	22,260	$	2,349	$	1,869	$	—
Forwarding expenses and cost of revenues		20,029		18,395		756		878		—
Gross margin		6,449		3,865		1,593		991		—
Selling, general and administrative		5,709		3,374		976		642		717
Amortization of intangible assets		251		—		—		—		251
Operating income (loss)		489		491		617		349		(968	)
Interest expense		119		37		28		47		7
Identifiable assets		68,224		22,418		10,252		3,501		32,053
Capital expenditures	$	55	$	19	$	24	$	12	$	—

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FAIR VALUE MEASUREMENTS (Tables)

3 Months Ended

Dec. 31, 2021

FAIR VALUE MEASUREMENTS [Abstract]

Liabilities Measured at Fair Value on Recurring Basis

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

Level 3	December 31, 2021		September 30, 2021
Contingent earnout liabilities	$	3,600	$	3,600
Level 3 Liabilities	$	3,600	$	3,600

Changes in Fair Value of Contingent Earnout Liabilities Measured at Fair Value on Recurring Basis Utilizing Level 3 Assumptions

Refer to Note 2 to Consolidated Financial Statements for ELFS acquisition information. The following table sets forth a summary of the changes in the fair value of the Company’s contingent earnout liabilities, which are measured at fair value on a recurring basis utilizing Level 3 assumptions in their valuation (in thousands):

	December 31, 2021		September 30, 2021
Balance at beginning of period	$	3,600	$	—
Fair value of contingent consideration recorded in connection with business combinations		—		3,600
Change in fair value of contingent consideration		—		—
Balance at end of period	$	3,600	$	3,600

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LEASES (Tables)

3 Months Ended

Dec. 31, 2021

LEASES [Abstract]

Components of Lease Expense

The components of lease cost for the three-month periods ended December 31, 2021 and 2020 are as follows (in thousands):

	Three Months Ended December 31, 2021		Three Months Ended December 31, 2020
Operating lease cost	$	480	$	231
Short-term lease cost		152		14
Total lease cost	$	632	$	245

Future Minimum Lease Payments for Operating Leases

Future minimum lease payments under non-cancelable operating leases as of December 31, 2021 are as follows (in thousands):

	Year End December 31, 2021
2022	$	1,798
2023		1,441
2024		1,147
2025		853
2026		620
Thereafter		1,168
Total undiscounted loan payments		7,027
Less: Imputed interest		(522	)
Total lease obligation	$	6,505

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BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Details) $ in Thousands	3 Months Ended
	Dec. 31, 2021 USD ($) Category	Dec. 31, 2020 USD ($)
Revenues and revenue recognition [Abstract]
Number of primary service categories | Category	5
Revenue	$ 83,314	$ 26,478
Logistics [Member]
Revenues and revenue recognition [Abstract]
Revenue	77,556	22,260
Logistics [Member] | Ocean Freight [Member]
Revenues and revenue recognition [Abstract]
Revenue	32,876	9,039
Logistics [Member] | Trucking [Member]
Revenues and revenue recognition [Abstract]
Revenue	21,775	4,352
Logistics [Member] | Air Freight [Member]
Revenues and revenue recognition [Abstract]
Revenue	13,874	6,202
Logistics [Member] | Other [Member]
Revenues and revenue recognition [Abstract]
Revenue	5,330	12
Logistics [Member] | Customs Brokerage [Member]
Revenues and revenue recognition [Abstract]
Revenue	$ 3,701	$ 2,655

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ACQUISITION (Details) - ELFS [Member] - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended
	Sep. 21, 2021	Dec. 31, 2020
Business Combination, Consideration Transferred [Abstract]
Aggregate purchase price	$ 19,000
Consideration paid in cash	13,000
Consideration transferred - liabilities incurred	6,000
Pro Forma Information [Abstract]
Revenue		$ 44,375
Income from Operations		630
Net Income		245
Net Income Available to Common Stockholders		$ 71
Net income per share:
Basic (in dollars per share)		$ 0.26
Diluted (in dollars per share)		0.25
Net income per share attributable to common stockholders:
Basic (in dollars per share)		0.08
Diluted (in dollars per share)		$ 0.07
Maximum [Member]
Business Combination, Consideration Transferred [Abstract]
Earnout payments due, estimable amount	$ 4,500

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INVENTORY (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Sep. 30, 2021
INVENTORY [Abstract]
Finished goods	$ 860	$ 919
Work-in-process	944	968
Raw materials	1,745	1,365
Gross inventory	3,549	3,252
Less - reserve for inventory valuation	(28)	(25)
Inventory net	$ 3,521	$ 3,227

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INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Sep. 30, 2021
Intangible Assets, Net [Abstract]
Intangible assets, gross	$ 29,642		$ 29,642
Less: Accumulated Amortization	(5,978)		(5,469)
Intangible assets, net	23,664		24,173
Amortization expense	509	$ 251
Logistics [Member]
Intangible Assets, Net [Abstract]
Intangible assets, gross	18,174		18,174
Life Sciences [Member]
Intangible Assets, Net [Abstract]
Intangible assets, gross	3,768		3,768
Manufacturing [Member]
Intangible Assets, Net [Abstract]
Intangible assets, gross	7,700		7,700
Customer Relationships [Member]
Intangible Assets, Net [Abstract]
Finite lived intangible assets, gross	$ 23,482		23,482
Customer Relationships [Member] | Minimum [Member]
Intangible Assets, Net [Abstract]
Life	12 years
Customer Relationships [Member] | Maximum [Member]
Intangible Assets, Net [Abstract]
Life	24 years
Trademarks/Names [Member]
Intangible Assets, Net [Abstract]
Finite lived intangible assets, gross	$ 4,490		4,490
Indefinite-lived intangible assets, gross	$ 521		521
Trademarks/Names [Member] | Minimum [Member]
Intangible Assets, Net [Abstract]
Life	1 year
Trademarks/Names [Member] | Maximum [Member]
Intangible Assets, Net [Abstract]
Life	20 years
Other [Member]
Intangible Assets, Net [Abstract]
Finite lived intangible assets, gross	$ 1,149		$ 1,149
Other [Member] | Minimum [Member]
Intangible Assets, Net [Abstract]
Life	2 years
Other [Member] | Maximum [Member]
Intangible Assets, Net [Abstract]
Life	22 years

XML

GOODWILL (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Sep. 30, 2021
Composition of Goodwill [Abstract]
Goodwill	$ 18,486	$ 18,486
Logistics [Member]
Composition of Goodwill [Abstract]
Goodwill	9,063	9,063
Life Sciences [Member]
Composition of Goodwill [Abstract]
Goodwill	4,377	4,377
Manufacturing [Member]
Composition of Goodwill [Abstract]
Goodwill	$ 5,046	$ 5,046

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NOTES PAYABLE - BANKS, Santander Bank Facility (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2021	Sep. 30, 2021
Revolving Line of Credit Facility [Abstract]
Outstanding borrowings	$ 23,842	$ 29,637
Santander Bank Facility [Member]
Revolving Line of Credit Facility [Abstract]
Maximum borrowing capacity	$ 30,000	30,000
Percentage of accounts receivable	85.00%
Maturity date of facility	Sep. 21, 2026
Outstanding borrowings	$ 23,842	$ 29,637
Percentage of outstanding borrowings	79.47%	98.80%
Effective interest rate	3.00%	3.00%
Santander Bank Facility [Member] | LIBOR [Member]
Revolving Line of Credit Facility [Abstract]
Variable rate term	30, 60 or 90 day
Basis spread on variable rate	2.25%
Interest rate floor	0.75%
Reduction of Interest rate floor	0.25%

XML

NOTES PAYABLE - BANKS, First Merchants Bank Credit Facility (Details) - USD ($) $ in Thousands		3 Months Ended
		Dec. 31, 2021	Sep. 30, 2021
Note Payable - Bank [Abstract]
Less Current Portion		$ (872)	$ (868)
Long Term Portion		4,450	4,744
First Merchants Bank Credit Facility [Member]
Note Payable - Bank [Abstract]
Total Debt	[1]	3,168	3,368
Less Current Portion		(809)	(809)
Long Term Portion		2,359	2,559
Term Loan [Member]
Long Term Debt [Abstract]
Face amount of debt		$ 5,500
Term of variable rate		one-month
Outstanding borrowings		$ 2,519	$ 2,713
Effective interest rate		2.85%	2.83%
Note Payable - Bank [Abstract]
Debt instrument installment		$ 65
Frequency of debt instrument installment		monthly
Term Loan [Member] | LIBOR [Member] | Minimum [Member]
Long Term Debt [Abstract]
Basis spread on variable rate		2.75%
EBITDA ratio		2
Term Loan [Member] | LIBOR [Member] | Maximum [Member]
Long Term Debt [Abstract]
Basis spread on variable rate		3.50%
EBITDA ratio		2
Revolving Loan [Member]
Long Term Debt [Abstract]
Maximum borrowing capacity		$ 1,000
Term of variable rate		one-month
Outstanding borrowings		$ 0	$ 0
Revolving Loan [Member] | LIBOR [Member]
Long Term Debt [Abstract]
Basis spread on variable rate		2.75%
Mortgage Loan [Member]
Long Term Debt [Abstract]
Face amount of debt		$ 680
Interest rate percentage		4.19%
Maturity date of facility		Jul. 01, 2025
Outstanding borrowings		$ 649	$ 655
Effective interest rate		4.19%	4.19%
Note Payable - Bank [Abstract]
Debt instrument installment		$ 4
Frequency of debt instrument installment		monthly
Term Loan and Revolving Loan [Member]
Long Term Debt [Abstract]
Maturity date of facility		Aug. 30, 2024

[1] Note: Term Loan is due in monthly installments of $65 plus monthly interest, at LIBOR plus 2.75% to 3.5% per annum, mortgage loan is due in monthly installments of $4, including interest at 4.19%. The credit facilities are collateralized by all of Indco’s assets and guaranteed by Janel.

XML

NOTES PAYABLE - BANKS, First Northern Bank of Dixon (Details) $ in Thousands		3 Months Ended
		Dec. 31, 2021 USD ($) Agreement	Sep. 30, 2021 USD ($)
Note Payable - Bank [Abstract]
Less Current Portion		$ (872)	$ (868)
Long Term Portion		$ 4,450	4,744
First Northern Loan Agreement [Member]
Long Term Debt [Abstract]
Number of business loan agreements | Agreement		2
Note Payable - Bank [Abstract]
Total Debt	[1]	$ 2,154	2,244
Less Current Portion		(63)	(59)
Long Term Portion		2,091	$ 2,185
Term Loan [Member]
Long Term Debt [Abstract]
Face amount of debt		$ 2,235
Annual interest rate percentage		4.18%
Maturity date of facility		Nov. 14, 2029
Effective interest rate		4.18%	4.18%
Note Payable - Bank [Abstract]
Total Debt		$ 2,126	$ 2,139
Less Current Portion		(56)	(55)
Long Term Portion		2,070	2,084
Debt instrument installment		$ 12
Frequency of debt instrument installment		monthly
Term Loan [Member] | Prime Rate [Member]
Long Term Debt [Abstract]
Interest rate floor		3.25%
Revolving Loan [Member]
Long Term Debt [Abstract]
Annual interest rate percentage		4.18%
Maturity date of facility		Nov. 05, 2022
Maximum borrowing capacity		$ 750
Outstanding borrowings		$ 0	$ 0
Revolving Loan [Member] | Prime Rate [Member]
Long Term Debt [Abstract]
Interest rate floor		3.25%
Solar Loan [Member]
Long Term Debt [Abstract]
Face amount of debt		$ 125
Maturity date of facility		Nov. 14, 2029
Effective interest rate		4.43%	4.43%
Variable rate term		5 years
Note Payable - Bank [Abstract]
Total Debt		$ 28	$ 105
Less Current Portion		(7)	(4)
Long Term Portion		21	101
Generator Loan [Member]
Long Term Debt [Abstract]
Face amount of debt		$ 60
Maturity date of facility		Nov. 05, 2025
Outstanding borrowings		$ 0	$ 0
Effective interest rate		4.25%

[1] Long-term debt is due in monthly installments of $12 plus monthly interest, at 4.18% per annum. The note is collateralized by real property owned by Antibodies and guaranteed by Janel.

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SUBORDINATED PROMISSORY NOTES - RELATED PARTY, Summary (Details) $ in Thousands	3 Months Ended
	Dec. 31, 2021 USD ($) Note Installment qtr	Sep. 30, 2021 USD ($)
Long-term Debt, Excluding Current Maturities [Abstract]
Current portion of subordinated promissory notes	$ 500	$ 550
Long-term portion of subordinated promissory notes	$ 5,404	5,525
ICT Subordinated Promissory Note [Member]
Long-term Debt, Excluding Current Maturities [Abstract]
Annual interest rate percentage	0.50%
Face amount of debt	$ 1,850
Number of consecutive installments | Installment	16
Frequency of periodic payment	quarterly
Debt instrument maturity date	Mar. 21, 2025
Outstanding amount	$ 1,066	1,237
Current portion of subordinated promissory notes	500	550
Long-term portion of subordinated promissory notes	$ 566	687
ELFS Subordinated Promissory Notes [Member]
Long-term Debt, Excluding Current Maturities [Abstract]
Number of subordinated promissory notes | Note	4
Annual interest rate percentage	4.00%
Face amount of debt	$ 6,000
Number of consecutive installments | Installment	12
Frequency of periodic payment	quarterly
Number of consecutive calendar quarters of payment from October 15, 2021 | qtr	8
Number of consecutive calendar quarters of payment from October 15, 2023 | qtr	12
Outstanding amount	$ 6,000
Long-term portion of subordinated promissory notes	4,838	$ 4,838
Working capital adjustment	$ (1,163)

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SUBORDINATED PROMISSORY NOTES - RELATED PARTY, Amounts Outstanding (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Sep. 30, 2021
Subordinated Promissory Notes [Abstract]
Less current portion of subordinated promissory notes	$ (500)	$ (550)
Long term portion of subordinated promissory notes	5,404	5,525
Subsidiary of Common Parent [Member] | Subordinated Debt [Member]
Subordinated Promissory Notes [Abstract]
Total subordinated promissory notes	5,904	6,075
Less current portion of subordinated promissory notes	(500)	(550)
Long term portion of subordinated promissory notes	$ 5,404	$ 5,525

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STOCK-BASED COMPENSATION, Expense and Authorized (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Sep. 30, 2021	Sep. 21, 2021	May 12, 2017	Oct. 30, 2013
Share-based Compensation [Abstract]
Common stock, par value (in dollars per share)	$ 0.001		$ 0.001
Selling, General and Administrative Expenses [Member]
Share-based Compensation [Abstract]
Stock-based compensation	$ 29	$ 24
2013 Option Plan [Member]
Share-based Compensation [Abstract]
Options to purchase common stock for issuance (in shares)						100,000
2017 Plan [Member]
Share-based Compensation [Abstract]
Options to purchase common stock for issuance (in shares)					100,000
Amended 2017 Plan [Member]
Share-based Compensation [Abstract]
Options to purchase common stock for issuance (in shares)				200,000
Common stock, par value (in dollars per share)				$ 0.001

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STOCK-BASED COMPENSATION, Employee Stock Options (Details) - USD ($)	3 Months Ended	12 Months Ended
	Dec. 31, 2021	Dec. 13, 2021	Sep. 30, 2021
Indco [Member]
Number of Options [Roll Forward]
Exercised (in shares)		(10,372)
Aggregate Intrinsic Value [Abstract]
Share price (in dollars per share)	$ 17.16
Total unrecognized compensation expense	$ 70,000
Indco [Member] | Maximum [Member]
Aggregate Intrinsic Value [Abstract]
Weighted-average vesting period	1 year
Stock Options [Member] | Employee [Member]
Share-based Payment Award, Fair Value Assumptions [Abstract]
Risk-free interest rate	1.10%
Dividend yield	0.00%
Number of Options [Roll Forward]
Outstanding, beginning balance (in shares)	98,994
Granted (in shares)	10,000
Exercised (in shares)	(17,500)
Outstanding, ending balance (in shares)	91,494		98,994
Exercisable, ending balance (in shares)	73,998
Weighted Average Exercise Price [Roll Forward]
Outstanding, beginning balance (in dollars per share)	$ 5.93
Granted (in dollars per share)	23.00
Exercised (in dollars per share)	4.87
Outstanding, ending balance (in dollars per share)	8.00		$ 5.93
Exercisable, ending balance (in dollars per share)	$ 5.88
Weighted Average Remaining Contractual Term [Abstract]
Outstanding	5 years 1 month 6 days		4 years 6 months
Granted	9 years 9 months 18 days
Exercisable	4 years 1 month 6 days
Aggregate Intrinsic Value [Abstract]
Outstanding, beginning balance	$ 1,689,380
Granted	0
Outstanding, ending balance	1,463,600		$ 1,689,380
Exercisable, ending balance	$ 1,341,140
Share price (in dollars per share)	$ 24
Total unrecognized compensation expense	$ 153,000
Weighted-average vesting period	1 year
Stock Options [Member] | Employee [Member] | Minimum [Member]
Share-based Payment Award, Fair Value Assumptions [Abstract]
Expected option term in years	5 years 6 months
Expected volatility	100.30%
Weighted average grant date fair value (in dollars per share)	$ 17.60
Stock Options [Member] | Employee [Member] | Maximum [Member]
Share-based Payment Award, Fair Value Assumptions [Abstract]
Expected option term in years	6 years 6 months
Expected volatility	110.30%
Weighted average grant date fair value (in dollars per share)	$ 19.07
Stock Options [Member] | Indco [Member]
Share-based Payment Award, Fair Value Assumptions [Abstract]
Risk-free interest rate	1.10%
Expected volatility	39.00%
Dividend yield	0.00%
Number of Options [Roll Forward]
Outstanding, beginning balance (in shares)	38,961
Granted (in shares)	7,018
Exercised (in shares)	(10,372)
Outstanding, ending balance (in shares)	35,607		38,961
Exercisable, ending balance (in shares)	21,663
Weighted Average Exercise Price [Roll Forward]
Outstanding, beginning balance (in dollars per share)	$ 10.28
Granted (in dollars per share)	17.16
Exercised (in dollars per share)	8.30
Outstanding, ending balance (in dollars per share)	12.22		$ 10.28
Exercisable, ending balance (in dollars per share)	$ 10.72
Weighted Average Remaining Contractual Term [Abstract]
Outstanding	7 years 6 months 3 days		6 years 7 months 13 days
Granted	9 years 9 months
Exercisable	6 years 5 months 26 days
Aggregate Intrinsic Value [Abstract]
Outstanding, beginning balance	$ 78,160
Granted	0
Outstanding, ending balance	175,980		$ 78,160
Exercisable, ending balance	$ 139,470
Stock Options [Member] | Indco [Member] | Minimum [Member]
Share-based Payment Award, Fair Value Assumptions [Abstract]
Expected option term in years	5 years 6 months
Weighted average grant date fair value (in dollars per share)	$ 5.57
Stock Options [Member] | Indco [Member] | Maximum [Member]
Share-based Payment Award, Fair Value Assumptions [Abstract]
Expected option term in years	6 years 6 months
Weighted average grant date fair value (in dollars per share)	$ 6.66

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STOCK-BASED COMPENSATION, Liability Classified Share-based Awards (Details) - USD ($)		3 Months Ended		12 Months Ended
	Dec. 13, 2021	Dec. 31, 2021	Dec. 31, 2020	Dec. 13, 2021	Sep. 30, 2021
Aggregate Intrinsic Value [Abstract]
Aggregate purchase price		$ 85,000	$ 21,000
Indco [Member]
Aggregate Intrinsic Value [Abstract]
Mandatorily redeemable non-controlling interest percentage		9.77%
Indco [Member]
Number of Options [Roll Forward]
Exercised (in shares)				(10,372)
Aggregate Intrinsic Value [Abstract]
Share price (in dollars per share)		$ 17.16
Stock-based compensation		$ 11,000	$ 15,000
Number of options exercised to purchase common stock (in shares)				10,372
Repurchased stock (in shares)	7,000
Purchase price (in dollars per share)	$ 17.16			$ 17.16
Purchase price	$ 120,000
Total unrecognized compensation expense		70,000
Indco [Member] | Other Liabilities [Member]
Aggregate Intrinsic Value [Abstract]
Accrued compensation cost		$ 279,000			$ 361,000
Indco [Member] | Maximum [Member]
Aggregate Intrinsic Value [Abstract]
Weighted-average vesting period		1 year
Minority Owner [Member]
Number of Options [Roll Forward]
Exercised (in shares)	(7,000)
Weighted Average Exercise Price [Roll Forward]
Outstanding, ending balance (in dollars per share)	$ 6.48			6.48
Aggregate Intrinsic Value [Abstract]
Number of options exercised to purchase common stock (in shares)	7,000
Exercise price (in dollars per share)	$ 6.48			$ 6.48
Aggregate purchase price	$ 45,000
Interest rate percentage	1.00%			1.00%
Maturity date		Dec. 31, 2024
Minority Owner [Member] | Security Deposits and Other Long-term Assets [Member]
Aggregate Intrinsic Value [Abstract]
Promissory note	$ 45,000			$ 45,000
Minority Owner [Member]
Number of Options [Roll Forward]
Exercised (in shares)	(3,372)
Weighted Average Exercise Price [Roll Forward]
Outstanding, ending balance (in dollars per share)	$ 12.07			$ 12.07
Aggregate Intrinsic Value [Abstract]
Number of options exercised to purchase common stock (in shares)	3,372
Exercise price (in dollars per share)	$ 12.07			$ 12.07
Aggregate purchase price	$ 41,000
Interest rate percentage	1.00%			1.00%
Maturity date		Dec. 31, 2024
Minority Owner [Member] | Security Deposits and Other Long-term Assets [Member]
Aggregate Intrinsic Value [Abstract]
Promissory note	$ 41,000			$ 41,000
Stock Options [Member] | Indco [Member]
Share-based Payment Award, Fair Value Assumptions [Abstract]
Risk-free interest rate		1.10%
Expected volatility		39.00%
Dividend yield		0.00%
Number of Options [Roll Forward]
Outstanding, beginning balance (in shares)		38,961
Granted (in shares)		7,018
Exercised (in shares)		(10,372)
Outstanding, ending balance (in shares)		35,607			38,961
Exercisable, ending balance (in shares)		21,663
Weighted Average Exercise Price [Roll Forward]
Outstanding, beginning balance (in dollars per share)		$ 10.28
Granted (in dollars per share)		17.16
Exercised (in dollars per share)		8.30
Outstanding, ending balance (in dollars per share)		12.22			$ 10.28
Exercisable, ending balance (in dollars per share)		$ 10.72
Weighted Average Remaining Contractual Term [Abstract]
Outstanding		7 years 6 months 3 days			6 years 7 months 13 days
Granted		9 years 9 months
Exercisable		6 years 5 months 26 days
Aggregate Intrinsic Value [Abstract]
Outstanding, beginning balance		$ 78,160
Granted		0
Outstanding, ending balance		175,980			$ 78,160
Exercisable, ending balance		$ 139,470
Number of options exercised to purchase common stock (in shares)		10,372
Exercise price (in dollars per share)		$ 12.22			$ 10.28
Stock Options [Member] | Indco [Member] | Minimum [Member]
Share-based Payment Award, Fair Value Assumptions [Abstract]
Expected option term in years		5 years 6 months
Weighted average grant date fair value (in dollars per share)		$ 5.57
Stock Options [Member] | Indco [Member] | Maximum [Member]
Share-based Payment Award, Fair Value Assumptions [Abstract]
Expected option term in years		6 years 6 months
Weighted average grant date fair value (in dollars per share)		$ 6.66

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INCOME PER COMMON SHARE, Reconciliation of Basic and Diluted EPS (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
INCOME PER COMMON SHARE [Abstract]
Net income	$ 1,688	$ 255
Preferred stock dividends	(211)	(174)
Net Income Available to Common Stockholders	$ 1,477	$ 81
Common Shares [Abstract]
Basic - weighted average common shares (in shares)	959,100	935,900
Effect of dilutive securities [Abstract]
Stock options (in shares)	58,700	30,600
Convertible preferred stock (in shares)	300	300
Diluted - weighted average common stock (in shares)	1,018,100	966,800
Income per Common Share - Basic [Abstract]
Net income (in dollars per share)	$ 1.76	$ 0.27
Preferred stock dividends (in dollars per share)	(0.22)	(0.18)
Net income attributable to common stockholders (in dollars per share)	1.54	0.09
Income per Common Share - Diluted [Abstract]
Net income (in dollars per share)	1.66	0.26
Preferred stock dividends (in dollars per share)	(0.21)	(0.18)
Net income available to common stockholders (in dollars per share)	$ 1.45	$ 0.08
Number of dilutive securities (in shares)	10	0

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INCOME PER COMMON SHARE, Potentially Diluted Securities (Details) - shares	Dec. 31, 2021	Dec. 31, 2020
Potentially Diluted Securities [Abstract]
Potentially diluted securities (in shares)	91,800	105,300
Convertible Preferred Stock [Member]
Potentially Diluted Securities [Abstract]
Potentially diluted securities (in shares)	300	300
Employee Stock Options [Member]
Potentially Diluted Securities [Abstract]
Potentially diluted securities (in shares)	91,500	98,900
Non-Employee Stock Options [Member]
Potentially Diluted Securities [Abstract]
Potentially diluted securities (in shares)	0	6,100

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INCOME TAXES (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Reconciliation of Income Tax [Abstract]
Federal taxes at statutory rates	$ 496	$ 78
Permanent differences	10	3
State and local taxes, net of Federal benefit	169	34
Total	$ 675	$ 115

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BUSINESS SEGMENT INFORMATION (Details) $ in Thousands	3 Months Ended
	Dec. 31, 2021 USD ($) Segment	Dec. 31, 2020 USD ($)	Sep. 30, 2021 USD ($)
Segment Reporting [Abstract]
Number of reportable segments | Segment	3
Revenues	$ 83,314	$ 26,478
Forwarding expenses and cost of revenues	67,825	20,029
Gross profit	15,489	6,449
Selling, general and administrative	12,338	5,709
Amortization of intangible assets	509	251
Income from Operations	2,642	489
Interest expense	279	119
Identifiable assets	122,237	68,224	$ 115,924
Capital expenditures	169	55
Corporate [Member]
Segment Reporting [Abstract]
Revenues	0	0
Forwarding expenses and cost of revenues	0	0
Gross profit	0	0
Selling, general and administrative	1,010	717
Amortization of intangible assets	509	251
Income from Operations	(1,519)	(968)
Interest expense	0	7
Identifiable assets	43,238	32,053
Capital expenditures	0	0
Logistics [Member] | Reportable Segments [Member]
Segment Reporting [Abstract]
Revenues	77,556	22,260
Forwarding expenses and cost of revenues	65,610	18,395
Gross profit	11,946	3,865
Selling, general and administrative	9,349	3,374
Amortization of intangible assets	0	0
Income from Operations	2,597	491
Interest expense	224	37
Identifiable assets	64,899	22,418
Capital expenditures	65	19
Life Sciences [Member] | Reportable Segments [Member]
Segment Reporting [Abstract]
Revenues	3,244	2,349
Forwarding expenses and cost of revenues	1,001	756
Gross profit	2,243	1,593
Selling, general and administrative	1,250	976
Amortization of intangible assets	0	0
Income from Operations	993	617
Interest expense	29	28
Identifiable assets	10,083	10,252
Capital expenditures	102	24
Manufacturing [Member] | Reportable Segments [Member]
Segment Reporting [Abstract]
Revenues	2,514	1,869
Forwarding expenses and cost of revenues	1,214	878
Gross profit	1,300	991
Selling, general and administrative	729	642
Amortization of intangible assets	0	0
Income from Operations	571	349
Interest expense	26	47
Identifiable assets	4,017	3,501
Capital expenditures	$ 2	$ 12

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FAIR VALUE MEASUREMENTS, Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Sep. 30, 2021
Liabilities Measured at Fair Value [Abstract]
Contingent earnout liability, current	$ 1,054	$ 1,054
Contingent earnout liability, noncurrent	2,546	2,546
Recurring Basis [Member] | Level 3 [Member]
Liabilities Measured at Fair Value [Abstract]
Contingent earnout liabilities	3,600	3,600
Liabilities	$ 3,600	$ 3,600

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FAIR VALUE MEASUREMENTS, Changes in Fair Value of Contingent Earnout Liabilities Measured at Fair Value on Recurring Basis Utilizing Level 3 Assumptions (Details) - Recurring [Member] - Level 3 [Member] - Contingent Earnout Liabilities [Member] - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Dec. 31, 2021	Sep. 30, 2021
Change in contingent consideration measured at fair value recurring basis using significant unobservable inputs (Level 3) [Roll Forward]
Balance at beginning of period	$ 3,600	$ 0
Fair value of contingent consideration recorded in connection with business combinations	0	3,600
Change in fair value of contingent consideration	0	0
Balance at end of period	$ 3,600	$ 3,600

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LEASES (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Sep. 30, 2021
Lease Cost [Abstract]
Operating lease cost	$ 480	$ 231
Short-term lease cost	152	14
Total lease cost	632	245
Rent expense	632	$ 245
Right of use assets	6,353		$ 2,936
Current portion of operating lease liabilities	1,797		1,281
Long-term lease liabilities	$ 4,708		$ 1,751
Weighted-average remaining lease term - operating leases	5 years 2 months 12 days		2 years 10 months 24 days
Weighted-average discount rate - operating leases	3.18%		3.89%
Future Minimum Lease Commitments under Non-cancellable Leases [Abstract]
2022	$ 1,798
2023	1,441
2024	1,147
2025	853
2026	620
Thereafter	1,168
Total undiscounted loan payments	7,027
Less: Imputed interest	(522)
Total lease obligation	$ 6,505
Minimum [Member]
Operating lease [Abstract]
Operating lease term	1 month
Maximum [Member]
Operating lease [Abstract]
Operating lease term	60 months
ELFS [Member]
Lease Cost [Abstract]
Increase in operating lease right-of-use assets	$ 3,842