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, 2023

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 2, 2024 was 1,186,354.

JANEL CORPORATION

QUARTERLY REPORT ON FORM 10-Q

For Quarterly Period Ended December 31, 2023

TABLE OF CONTENTS

			Page
Part I - Financial Information			3
	Item 1.	Financial Statements	3
		Condensed Consolidated Balance Sheets as of December 31, 2023 (unaudited) and September 30, 2023	3
		Condensed Consolidated Statements of Operations for the three months ended December 31, 2023 and 2022 (unaudited)	4
		Condensed Consolidated Statement of Stockholders’ Equity for the three months ended December 31, 2023 and 2022 (unaudited)	5
		Condensed Consolidated Statements of Cash Flows for the three months ended December 31, 2023 and 2022 (unaudited)	6
		Notes to Condensed Consolidated Financial Statements (unaudited)	7
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
	Item 4.	Controls and Procedures	24
Part II - Other Information			25
	Item 1.	Legal Proceedings	25
	Item 1A.	Risk Factors	25
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	25
	Item 5.	Other Information	25
	Item 6.	Exhibit Index	25
		Signatures	26

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, 2023			September 30, 2023
ASSETS
Current Assets:
Cash	$	1,579		$	2,461
Accounts receivable, net of allowance for doubtful accounts		25,965			27,518
Inventory, net		4,628			4,850
Prepaid expenses and other current assets		3,844			4,459
Total current assets		36,016			39,288
Property and Equipment, net		4,845			4,922
Other Assets:
Intangible assets, net		22,145			22,683
Goodwill		20,317			20,317
Investment in Rubicon at fair value		864			1,573
Operating lease right of use asset		6,853			7,460
Security deposits and other long-term assets		462			591
Total other assets		50,641			52,624
Total assets	$	91,502		$	96,834
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Lines of credit	$	17,002		$	19,709
Accounts payable - trade		24,058			25,447
Accrued expenses and other current liabilities		5,856			6,337
Dividends payable		2,100			2,029
Current portion of earnout		740			592
Current portion of long-term debt		716			715
Current portion of subordinated promissory note-related party		1,395			1,988
Current portion of operating lease liabilities		1,935			2,020
Total current liabilities		53,802			58,837
Other Liabilities:
Long-term debt		5,197			5,784
Long-term portion of earnout		1,996			1,738
Subordinated promissory notes-related party		3,480			3,424
Mandatorily redeemable non-controlling interest		711			565
Deferred income taxes		1,341			1,341
Long-term operating lease liabilities		5,221			5,689
Other liabilities		509			483
Total other liabilities		18,455			19,024
Total liabilities		72,257			77,861
Stockholders’ Equity:
Preferred Stock, $0.001 par value; 100,000 shares authorized
Series C; 30,000 shares authorized and 11,368 shares issued and outstanding at December 31, 2023 and September 30, 2023, liquidation value of $7,784 and $7,713 at December 31, 2023 and September 30, 2023, respectively		—			—
Common stock, $0.001 par value; 4,500,000 shares authorized, 1,206,354 issued and 1,186,354 outstanding as of December 31, 2023 and September 30, 2023, respectively		1			1
Paid-in capital		17,103			17,107
Common treasury stock, at cost, 20,000 shares		(240	)		(240	)
Accumulated earnings		2,381			2,105
Total stockholders’ equity		19,245			18,973
Total liabilities and stockholders’ equity	$	91,502		$	96,834

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

3

JANEL CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(Unaudited)

	Three Months Ended December 31,
	2023			2022
Revenues	$	41,035		$	57,044
Forwarding expenses and cost of revenues		26,890			42,127
Gross profit		14,145			14,917
Cost and Expenses:
Selling, general and administrative		12,605			13,011
Amortization of intangible assets		538			526
Total Costs and Expenses		13,143			13,537
Income from Operations		1,002			1,380
Interest expense		(524	)		(474	)
Other income (expense)		(10	)		(399	)
Income Before Income Taxes		468			507
Income tax expense		(192	)		(147	)
Net Income		276			360
Preferred stock dividends		(72	)		(72	)
Net Income Available to Common Stockholders	$	204		$	288
Net income per share
Basic	$	$ 0.23		$	$ 0.30
Diluted	$	$ 0.23		$	$ 0.30
Net income per share attributable to common stockholders:
Basic	$	$ 0.17		$	$ 0.24
Diluted	$	$ 0.17		$	$ 0.24
Weighted average number of shares outstanding:
Basic		1,186.3			1,186.3
Diluted		1,202.1			1,208.2

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

4

JANEL CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

(in thousands, except share and per share data)

(Unaudited)

	PREFERRED STOCK				COMMON STOCK				PAID-IN CAPITAL			COMMON TREASURY STOCK					ACCUMULATED EARNINGS		TOTAL EQUITY
	SHARES			$	SHARES		$			$		SHARES		$			$			$
Balance - September 30, 2023		11,368	$	—		1,206,354	$	1	$	17,107			20,000	$	(240	)	$	2,105	$	18,973
Net Income		—		—		—		—		—			—		—			276		276
Dividends to preferred stockholders		—		—		—		—		(72	)		—		—			—		(72	)
Stock based compensation		—		—		—		—		68			—		—			—		68
Balance - December 31, 2023		11,368	$	—		1,206,354	$	1	$	17,103			20,000	$	(240	)	$	2,381	$	19,245

	PREFERRED STOCK				COMMON STOCK				PAID-IN CAPITAL			COMMON TREASURY STOCK					ACCUMULATED EARNINGS (DEFICIT)		TOTAL EQUITY
	SHARES			$	SHARES		$			$		SHARES		$				$		$
Balance - September 30, 2022		11,368	$	—		1,206,354	$	1	$	17,184			20,000	$	(240	)	$	1,382	$	18,327
Net Income		—		—		—		—		—			—		—			360		360
Dividends to preferred stockholders		—		—		—		—		(72	)		—		—			—		(72	)
Stock based compensation		—		—		—		—		51			—		—			—		51
Balance - December 31, 2022		11,368	$	—		1,206,354	$	1	$	17,163			20,000	$	(240	)	$	1,742	$	18,666

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,
	2023			2022
Cash flows from operating activities:
Net income	$	276		$	360
Adjustments to reconcile net income to net cash provided by operating activities:
(Recovery of) Provision for uncollectible accounts		(153	)		(71	)
Depreciation		130			121
Deferred income tax provision		—			(15	)
Amortization of intangible assets		538			526
Amortization of acquired inventory valuation		83			90
Amortization of loan costs		26			4
Stock-based compensation		71			61
Unrealized loss on marketable securities		709			399
Change in fair value of mandatorily redeemable noncontrolling interest		146			—
Fair value adjustment of contingent earnout liabilities		405			—
Gain on extinguishment		(21	)		—
Changes in operating assets and liabilities, net of effects of acquisitions:
Accounts receivable		1,706			14,656
Inventory		139			84
Prepaid expenses and other current assets		616			623
Security deposits and other long-term assets		130			31
Accounts payable and accrued expenses		(1,876	)		(11,115	)
Other liabilities		81			26
Net cash provided by operating activities		3,006			5,780
Cash flows from investing activities:
Acquisition of property and equipment, net of disposals		(53	)		(80	)
Acquisitions		—			(2,847	)
Net cash used in investing activities		(53	)		(2,927	)
Cash flows from financing activities:
Repayments of term loan		(612	)		(347	)
Lines of credit payments, net		(2,707	)		(5,076	)
Repayment of subordinate promissory notes, net		(516	)		134
Net cash used in financing activities		(3,835	)		(5,289	)
Net (decrease) in cash		(882	)		(2,436	)
Cash at beginning of the period		2,461			6,591
Cash at end of period	$	1,579		$	4,155
Supplemental Disclosure of Cash Flow Information:
Cash paid during the period for:
Interest	$	511		$	380
Income taxes	$	156		$	9
Non-cash operating activities:
Contingent earnout acquisition	$	—		$	600
Due to former owner	$	—		$	455
Non-cash financing activities:
Dividends declared to preferred stockholders	$	72		$	72

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.

Business Description

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

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

Revenue and revenue recognition

Logistics

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

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

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

In the Logistics segment, the Company disaggregates its revenue by its four primary service categories: trucking, air, ocean and customs brokerage and other. The Company has aggregated customs brokerage and other for the periods ended December 31, 2023 and 2022. A summary of the Company’s revenues disaggregated by major service lines for the three months ended December 31, 2023 and 2022 was as follows (in thousands):

	Three Months Ended December 31,
	2023		2022
Service Type
Trucking	$	17,997	$	22,761
Air		6,711		6,239
Ocean		6,448		18,166
Customs brokerage and other		4,059		4,634
Total	$	35,215	$	51,800

7

Life Sciences and Manufacturing

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

2. ACQUISITIONS

Fiscal 2023 Acquisitions

Life Sciences

On November 1, 2022, the Company completed a business combination whereby it acquired all of the outstanding stock of ImmunoBioScience Corporation (“IBS”), for an aggregate purchase price of $3,755, net of $153 cash received.  At closing, $3,000 was paid in cash, $250 was due to the former stockholder of IBS as a deferred acquisition payment upon integration, $300 was recorded as a preliminary earnout consideration (not to exceed $750) and $205 was recorded as a preliminary working capital adjustment. The acquisition was funded with cash provided by normal operations, and the results of operations of IBS are included in Janel’s condensed consolidated results of operations since the date of the acquisition. In connection with the combination, the Company recorded an aggregate of $1,468 in goodwill and $1,680 in other identifiable intangibles. Supplemental pro forma information has not been provided as the acquisition did not have a significant impact on Janel’s condensed consolidated results of operations, individually or in aggregate. IBS is a developer and manufacturer of high-quality reagents used by research and diagnostic customers. IBS was founded in 2007 and is headquartered in Mukilteo, Washington. The acquisition of IBS was completed to expand our product offerings in our Life Sciences segment.

On March 2, 2023, the Company completed a business combination whereby it acquired all of the outstanding stock of Stephen Hall PhD, Ltd. (“SH”) for an aggregate purchase price of $600. At closing, $500 was paid in cash and $100 was due to the former stockholder of SH as a deferred acquisition payment upon integration. The acquisition was funded with cash provided by normal operations, and the results of operations of SH are included in Janel’s condensed consolidated results of operations since the date of the acquisition. In connection with the combination, the Company recorded an aggregate of $181 in goodwill and $202 in other identifiable intangibles. Supplemental pro forma information has not been provided as the acquisition did not have a significant impact on Janel’s condensed consolidated results of operations, individually or in aggregate. SH is a developer and manufacturer of antibodies and cell culture media for research and diagnostic uses. SH was founded in 2011 and is headquartered in Lafayette, Indiana. The acquisition of SH was completed to expand our product offerings in our Life Sciences segment.

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

3. INVENTORY

Inventories consisted of the following (in thousands):

	December 31, 2023			September 30, 2023
Finished goods	$	1,953		$	2,095
Work-in-process		922			969
Raw materials		1,781			1,811
Gross inventory		4,656			4,875
Less – reserve for inventory valuation		(28	)		(25	)
Inventory net	$	4,628		$	4,850

8

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, 2023			September 30, 2023			Life
Customer relationships	$	25,238		$	25,238		10-24 Years
Trademarks/names		4,559			4,559		1-20 Years
Trademarks/names		521			521		Indefinite
Other		1,929			1,929		2-22 Years
Total intangible assets		32,247			32,247
Less: accumulated amortization		(10,102	)		(9,564	)
Total intangible assets, net	$	22,145		$	22,683

The composition of the intangible assets balance at December 31, 2023 and September 30, 2023 is as follows (in thousands):

	December 31, 2023			September 30, 2023
Logistics	$	18,174		$	18,174
Life Sciences		6,373			6,373
Manufacturing		7,700			7,700
Total intangible assets		32,247			32,247
Less: accumulated amortization		(10,102	)		(9,564	)
Total intangible assets, net	$	22,145		$	22,683

Amortization expense for the three months ended December 31, 2023 and 2022 was $538 and $526, respectively.

5. GOODWILL

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

The composition of the goodwill balance at December 31, 2023 and September 30, 2023 was as follows (in thousands):

	December 31, 2023		September 30, 2023
Logistics	$	9,175	$	9,175
Life Sciences		6,096		6,096
Manufacturing		5,046		5,046
Total	$	20,317	$	20,317

6. NOTES PAYABLE – BANKS

(A) Santander Bank Facility

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

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

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

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

9

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

On December 21, 2023, we entered into the Sixth Amendment to the Amended and Restated Loan and Security Agreement, which modified the reporting due date of the monthly borrowing base calculation from the fifth day to the fifteenth day of each month.

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

At December 31, 2023, outstanding borrowings under the Santander Facility were $16,252, representing 46.4% of the $35,000 available subject to limitations thereunder, and interest was accruing at an effective interest rate of 7.68%.

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

The Company was in compliance with the financial covenants defined in the Santander Loan Agreement at both December 31, 2023 and September 30, 2023.

(B) First Merchants Bank Credit Facility

On February 29, 2016, Indco entered into a Credit Agreement (as amended, the “Prior First Merchants Credit Agreement”) with First Merchants.

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

As of December 31, 2023, there were $500 of outstanding borrowings under the acquisition loan, $250 of outstanding borrowings under the revolving loan, $5,645 of outstanding borrowings under the Term A loan and $604 of outstanding borrowings under the Term B loan, with interest accruing on the acquisition loan and revolving loan at an effective interest rate of 8.22% and on the Term A loan and Term B loan at an effective interest rate of 8.22% and 4.19%, respectively.

As of September 30, 2023, there were $500 of outstanding borrowings under the acquisition loan, $450 of outstanding borrowings under the revolving loan, $6,235 of outstanding borrowings under the Term A loan and $610 of outstanding borrowings under the Term B loan, with interest accruing on the acquisition loan and revolving loan at an effective interest rate of 8.18% and on the Term A loan and Term B loan at an effective interest rate of 8.18% and 4.19%, respectively.

The Company was in compliance with the financial covenants defined in the First Merchants Credit Agreement at December 31, 2023 and September 30, 2023.

10

The table below sets forth the total long-term debt, net of capitalized loan fees of $349 for the First Merchants Credit Agreement (in thousands):

	December 31, 2023			September 30, 2023
Total debt	$	5,913		$	6,499
Less current portion		(716	)		(715	)
Long-term portion	$	5,197		$	5,784

7. SUBORDINATED PROMISSORY NOTES - RELATED PARTY

(A)          ICT Subordinated Promissory Note

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

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

As of December 31, 2023, the amount outstanding under the ICT Subordinated Promissory Note was $221, net of a $28 discount, which is included in the current portion of subordinated promissory notes.

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

(B)          ELFS Subordinated Promissory Notes

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

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

As of December 31, 2023, the gross principal amount outstanding under the ELFS Subordinated Promissory Notes was $5,575 ($4,654 net of a $921 unamortized discount), of which $1,174 was included in the current portion of subordinated promissory notes and $3,480 was included in the long-term portion of subordinated promissory notes.

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

(in thousands)	December 31, 2023			September 30, 2023
Total subordinated promissory notes	$	4,875		$	5,412
Less current portion of subordinated promissory notes		(1,395	)		(1,988	)
Long-term portion of subordinated promissory notes	$	3,480		$	3,424

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8. STOCKHOLDERS’ EQUITY

(in thousands, except share and per share data)

Preferred Stock

Series C Cumulative Preferred Stock

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

9. STOCK-BASED COMPENSATION

(in thousands, except share and per share data)

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

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

Total stock-based compensation for the three months ended December 31, 2023 and 2022 amounted to $68 and $51, respectively, and is included in selling, general and administrative expense in the Company’s statements of operations.

Options

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value (in thousands)
Outstanding balance at September 30, 2023		40,993		$	22.53		6.6	$	482.49
Granted		12,500		$	28.25		9.8	$	—
Expired		(3,500	)	$	3.25		—	$	—
Outstanding balance at December 31, 2023		49,993		$	25.31		7.6	$	305.63
Exercisable at December 31, 2023		24,162		$	12.63		6.0	$	298.97

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, 2023 of $25.00 per share and the exercise price of the stock options that had strike prices below such closing price.

As of December 31, 2023, there was approximately $479 of total unrecognized compensation expense related to the unvested employee stock options which is expected to be recognized over a weighted average period of 1.73 years.

Liability classified share-based awards

During the three months ended December 31, 2023 and fiscal year ended September 30, 2023, there were no options granted and no options were exercised with respect to Indco’s common stock.

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10. INCOME PER COMMON SHARE

The following table provides a reconciliation of the basic and diluted earnings per share (“EPS”) computations for the three months ended December 31, 2023 and 2022:

	Three Months Ended December 31,
(in thousands, except per share data)	2023			2022
Income:
Net income	$	276		$	360
Preferred stock dividends		(72	)		(72	)
Net income available to common stockholders	$	204		$	288
Common Shares:
Basic - weighted average common shares		1,186.3			1,186.3
Effect of dilutive securities:
Stock options		15.8			21.9
Diluted - weighted average common stock		1,202.1			1,208.2
Income per Common Share:
Basic -
Net income	$	0.23		$	0.30
Preferred stock dividends		(0.06	)		(0.06	)
Net income available to common stockholders	$	0.17		$	0.24
Diluted -
Net income	$	0.23		$	0.30
Preferred stock dividends		(0.06	)		(0.06	)
Net income available to common stockholders	$	0.17		$	0.24

The computation for the diluted number of shares excludes unexercised stock options that are anti-dilutive. There were 22.5 and 10 anti-dilutive shares for the three-month periods ended December 31, 2023 and 2022, respectively.

11. INCOME TAXES

The reconciliation of income tax computed at the Federal statutory rate to the provision for income taxes from continuing operations for the three month periods ended December 31, 2023 and 2022 was as follows (in thousands):

	Three Months Ended December 31,
	2023		2022
Federal taxes at statutory rates	$	98	$	107
Permanent differences		58		1
State and local taxes, net of Federal benefit		36		39
Total	$	192	$	147

12. BUSINESS SEGMENT INFORMATION

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

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

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The following tables present selected financial information about the Company’s reportable segments and Corporate for the purpose of reconciling to the consolidated totals for the three months ended December 31, 2023:

For the three months ended December 31, 2023 (in thousands)	Consolidated		Logistics		Life Sciences		Manufacturing		Corporate
Revenues	$	41,035	$	35,215	$	3,481	$	2,339	$	—
Forwarding expenses and cost of revenues		26,890		25,214		606		1,070		—
Gross profit		14,145		10,001		2,875		1,269		—
Selling, general and administrative		12,605		8,865		1,750		784		1,206
Amortization of intangible assets		538		—		—		—		538
Income (loss) from operations		1,002		1,136		1,125		485		(1,744	)
Interest expense		524		357		78		89		—
Identifiable assets		91,502		31,128		11,786		3,875		44,713
Capital expenditures, net of disposals	$	53	$	18	$	35	$	—	$	—

The following tables present selected financial information about the Company’s reportable segments and Corporate for the purpose of reconciling to the consolidated totals for the three months ended December 31, 2022:

For the three months ended December 31, 2022 (in thousands)	Consolidated		Logistics		Life Sciences		Manufacturing		Corporate
Revenues	$	57,044	$	51,800	$	2,838	$	2,406	$	—
Forwarding expenses and cost of revenues		42,127		40,267		728		1,132		—
Gross profit		14,917		11,533		2,110		1,274		—
Selling, general and administrative		13,011		9,528		1,510		774		1,199
Amortization of intangible assets		526		—		—		—		526
Income (loss) from operations		1,380		2,005		600		500		(1,725	)
Interest expense		474		334		37		103		—
Identifiable assets		111,564		49,220		11,317		4,085		46,942
Capital expenditures, net of disposals	$	80	$	68	$	10	$	2	$	—

13. FAIR VALUE MEASUREMENTS

Recurring Fair Value Measurements

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

Level 1 Assets	December 31,  2023		September 30, 2023
Investment in Rubicon at fair value	$	864	$	1,573

On August 19, 2022, the Company acquired 1,108,000 shares of the common stock, par value $0.001 per share, of Rubicon Technology, Inc. (“Rubicon”), at a price per share of $20.00, in a cash tender offer. As of each of December 31, 2023 and September 30, 2023, the Company held 46.6% of the total issued and outstanding shares of Rubicon and reported its investment under the fair value method pursuant to ASC 320. Management determined that it was appropriate to carry its investment in Rubicon at fair value because the investment was traded on the NASDAQ stock exchange through January 2, 2023, began trading on the OTCQB Capital Market on January 3, 2023 and had daily trading activity, the combination of which provide a better indicator of value. The investment in Rubicon is re-measured at the end of each quarter based on the trading price and any change in the value is reported on the income statement as an unrealized gain or loss on marketable securities in other income (expense).

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

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

	December 31, 2023			September 30, 2023
Balance beginning of period	$	1,573		$	2,371
Fair value adjustment to Rubicon investment		(709	)		(798	)
Balance end of period	$	864		$	1,573

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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):

	December 31, 2023		September 30, 2023
Level 1 Contingent earnout liabilities	$	2,435	$	—
Level 3 Contingent earnout liabilities		300		2,330
Total	$	2,735	$	2,330

These liabilities relate to the estimated fair value of earnout payments to former IBS and ELFS Sellers for the periods ending December 31, 2023 and September 30, 2023.

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

The current and non-current portions of the fair value of the contingent earnout liabilities at December 31, 2023 were $740 and $1,996, respectively. The current and non-current portions of the fair value of the contingent earnout liabilities at September 30, 2023 were $592 and $1,738, respectively.

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

	December 31, 2023			September 30, 2023
Balance beginning of period	$	2,330		$	4,580
Fair value of contingent consideration recorded in connection with business combinations		—			300
Earnout payment		—			(1,693	)
Fair value adjustment of contingent earnout liabilities		405			(857	)
Transfer to Level 1		(2,435	)		—
Balance end of period	$	300		$	2,330

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

14. LEASES

The Company has operating leases for office and warehouse space in all locations where it conducts business. As of December 31, 2023, the remaining terms of the Company’s operating leases were between one and 123 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, 2023 and 2022 were as follows (in thousands):

	Three Months Ended December 31,
	2023			2022
Operating lease cost		$	599		$	551
Short-term lease cost			100			20
Total lease cost		$	699		$	571

Rent expense for the three months ended December 31, 2023 and 2022 was $699 and $571, 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, 2023 were $6,853, $1,935 and $5,221, respectively.

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

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As of December 31, 2023 and September 30, 2023, the weighted-average remaining lease term and the weighted-average discount rate related to the Company’s operating leases were 5.8 years and 4.53% and 5.9 years and 4.01%, respectively.

Future minimum lease payments under non-cancelable operating leases as of December 31, 2023 were as follows (in thousands):

2024	$	1,985
2025		1,523
2026		1,193
2027		1,215
2028		978
Thereafter		1,467
Total undiscounted loan payments		8,361
Less: imputed interest		(1,205	)
Total lease obligation	$	7,156

15. SUBSEQUENT EVENTS

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

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

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OVERVIEW

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

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

Logistics

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

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

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

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

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.

Investment in Marketable Securities - Rubicon

On August 19, 2022, the Company acquired 1,108,000 shares of the common stock, par value $0.001 per share, of Rubicon Technology, Inc. (“Rubicon”), at a price per share of $20.00, in a cash tender offer made pursuant to the Stock Purchase and Sale Agreement, dated July 1, 2022, between the Company and Rubicon (the “Rubicon Purchase Agreement”). Pursuant to the terms of the Rubicon Purchase Agreement, the acquired shares represented 45.0% of Rubicon’s issued and outstanding shares of common stock as of August 3, 2022, as reported in Rubicon’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2022, filed with the SEC on August 12, 2022. On October 4, 2023, Rubicon announced that it had authorized a cash dividend of $1.10 per share of common stock of Rubicon and set October 16, 2023 as the record date for the distribution. On October 23, 2023, the Company received $1,219 in dividends. The Company owned approximately 46.6% of Rubicon’s issued and outstanding shares of common stock as of each of December 31, 2023 and September 30, 2023.

Rubicon is an advanced materials provider specializing in monocrystalline sapphire for applications in optical and industrial systems. The purpose of our investment in Rubicon is for Janel to acquire a significant ownership interest in Rubicon, together with representation on Rubicon’s board, in an attempt to (i) restructure the Rubicon business to achieve profitability and (ii) assist Rubicon in utilizing its net operating loss carry-forward assets. Although we are optimistic about our investment in Rubicon, our investment involves risks and uncertainties that are beyond our control.

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CRITICAL ACCOUNTING POLICIES AND ESTIMATES

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

Our senior management has reviewed the critical accounting policies and estimates with the audit committee of our board of directors. For a description of the Company’s critical accounting policies and estimates, refer to “Part II—Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Estimates” in our Annual Report on Form 10-K filed with the SEC on December 8, 2023. Critical accounting policies are those that are most important to the portrayal of our financial condition, results of operations and cash flows and require management’s most difficult, subjective and complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. If actual results were to differ significantly from estimates made, the reported results could be materially affected. There were no significant changes to our critical accounting policies during the three months ended December 31, 2023.

NON-GAAP FINANCIAL MEASURES

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

Organic Growth

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

Adjusted Operating Income

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

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

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

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

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

Results of Operations – Janel Corporation – Three Months Ended December 31, 2023 and 2022

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.

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Our consolidated results of operations are as follows:

	Three Months Ended December 31,
(in thousands)	2023		2022
Revenues	$	41,035	$	57,044
Forwarding expenses and cost of revenues		26,890		42,127
Gross profit		14,145		14,917
Operating expenses		13,143		13,537
Income from operations		1,002		1,380
Net income		276		360
Adjusted operating income	$	1,694	$	2,057

Consolidated revenues for the three months ended December 31, 2023 were $41,035, which was $16,009 or 28% lower than the prior year period. Revenues over this period decreased primarily due to lower freight prices in our Logistics segment as lower freight demand aligned more closely with global transportation capacity.

Income from operations for the three months ended December 31, 2023 was $1,002 compared with $1,380 in the prior year period. The decrease for the three months ended December 31, 2023 resulted from lower profits primarily in our Logistics segment.

Net income for the three months ended December 31, 2023 totaled $276 or $0.23 per diluted share, compared to net income of $360 or $0.30 per diluted share for the three months ended December 31, 2022. The decline in net income was largely due to lower profits primarily in our Logistics segment, higher interest expense and a non-cash mark-to-market write-down of our equity investment.

Adjusted operating income for the three months ended December 31, 2023 was $1,694, a decrease of $363 versus $2,057 in the prior year period. The decrease for the three months ended December 31, 2023 resulted primarily from a decline in profits in our Logistics segment partially offset by an increase in profits at our Life Sciences business.

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

	Three Months Ended December 31,
(in thousands)	2023		2022
Income from operations	$	1,002	$	1,380
Amortization of intangible assets		538		526
Stock-based compensation		71		61
Cost recognized on sale of acquired inventory		83		90
Adjusted operating income	$	1,694	$	2,057

Results of Operations – Logistics – Three Months Ended December 31, 2023 and 2022

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

	Three Months Ended December 31,
	2023			2022
(in thousands)
Revenues	$	35,215		$	51,800
Forwarding expenses		25,214			40,267
Gross profit		10,001			11,533
Gross profit margin		28.4	%		22.3	%
Selling, general and administrative expenses		8,865			9,528
Income from operations	$	1,136		$	2,005

Revenues

Total revenues for the three months ended December 31, 2023 were $35,215 as compared to $51,800 for the three months ended December 31, 2022, a decrease of $16,585 or 32%. Revenues decreased primarily due to a reduction in transportation rates as lower freight demand aligned more closely with global transportation capacity.

20

Gross Profit

Gross profit for the three months ended December 31, 2023 was $10,001, a decrease of $1,532, or 13%, as compared to $11,533 for the three months ended December 31, 2022. Gross margin as a percentage of revenues increased to 28.4% for the three months ended December 31, 2023, compared to 22.3% for the prior year period, as forwarding expenses declined in line with transportation freight rates.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the three months ended December 31, 2023 were $8,865, as compared to $9,528 for the three months ended December 31, 2022. This decrease of $633, or 7%, was mainly due to lower personnel expenses and a recovery of previously expensed bad debt. As a percentage of revenues, selling, general and administrative expenses were 25.2% and 18.4% of revenues for the three months ended December 31, 2023 and 2022, respectively. The increase in selling, general and administrative expenses as a percentage of revenues largely reflected the decrease in transportation rates and its impact on revenues.

Income from Operations

Income from operations decreased to $1,136 for the three months ended December 31, 2023, as compared to income from operations of $2,005 for the three months ended December 31, 2022, a decrease of $869. Income from operations decreased as a result of lower transportation volume and prices partially offset by lower personnel expense. Operating margin as a percentage of gross profit for the three months ended December 31, 2023 was 11.4% compared to 17.4% in the prior year period, largely due to lower gross profits.

Results of Operations – Life Sciences – Three Months Ended December 31, 2023 and 2022

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,
	2023			2022
(in thousands)
Revenues	$	3,481		$	2,838
Cost of sales		523			638
Cost recognized upon sale of acquired inventory		83			90
Gross profit		2,875			2,110
Gross profit margin		82.6	%		74.3	%
Selling, general and administrative expenses		1,750			1,510
Income from operations	$	1,125		$	600

Revenues

Total revenues were $3,481 and $2,838 for the three months ended December 31, 2023 and 2022, respectively, reflecting an increase of $643 or 23% compared to the prior year period, primarily due to the timing of orders, in particular for diagnostic reagents. Organic growth for the three months ended December 31, 2023 increased $558 or 20% from the prior year period excluding acquired revenues of $85, as diagnostic reagent orders recovered from prior-year inventory adjustments.

Gross Profit

Gross profit was $2,875 and $2,110 for the three months ended December 31, 2023 and 2022, respectively, an increase of $765 or 36.3%. During the three months ended December 31, 2023 and 2022, gross profit margin was 82.6% and 74.3%, respectively, as cost recognized upon sale of acquired inventory declined slightly and product mix improved due to contributions from past acquisitions.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the Life Sciences segment were $1,750 and $1,510 for the three months ended December 31, 2023 and 2022, respectively. The year-over-year increase was largely due to personnel expenses and investments to support growth.

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Income from Operations

Income from operations for the three months ended December 31, 2023 and 2022 was $1,125 and $600, respectively, an increase of $525 or 87.5%, due to the timing of orders, in particular for diagnostic reagents.

Results of Operations - Manufacturing – Three Months Ended December 31, 2023 and 2022

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

Manufacturing – Selected Financial Information:

	Three Months Ended December 31,
	2023			2022
(in thousands)
Revenues	$	2,339		$	2,406
Cost of sales		1,070			1,132
Gross profit		1,269			1,274
Gross profit margin		54.3	%		53.0	%
Selling, general and administrative expenses		784			774
Income from operations	$	485		$	500

Revenues

Total revenues were $2,339 and $2,406 for the three months ended December 31, 2023 and 2022, respectively, a decrease of $67 or 3%. The decrease in revenues for the three months ended December 31, 2023 primarily reflected a slight decrease in volume across the business offset in part by higher product pricing.

Gross Profit

Gross profit was $1,269 and $1,274 for the three months ended December 31, 2023 and 2022, respectively, a decrease of $5. Gross profit margin for the three months ended December 31, 2023 and 2022 was 54.3% and 53.0%, respectively. The modest year-over-year increase in gross profit margin was generally due to the mix of business.

Selling, General and Administrative Expenses

Selling, general and administrative expenses were $784 and $774 for the three months ended December 31, 2023 and 2022, respectively, an increase of $10 or 1%. The modest increase in expenses relative to revenues for the three-month periods reflected the mix of business.

Income from Operations

Income from operations was $485 for the three months ended December 31, 2023 compared to $500 for the three months ended December 31, 2022, representing a 3% decrease from the prior year period as a result of the factors set forth above.

Results of Operations – Corporate and Other – Three Months Ended December 31, 2023 and 2022

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

	Three Months Ended December 31,
(in thousands)	2023			2022
Total income from operations by segment	$	2,746		$	3,105
Corporate expenses		(1,135	)		(1,138	)
Amortization of intangible assets		(538	)		(526	)
Stock-based compensation		(71	)		(61	)
Total corporate expenses		(1,744	)		(1,725	)
Interest expense		(524	)		(474	)
Fair value adjustments to Rubicon investment (net of dividends)		510			(399	)
Fair value adjustment of contingent earnout liabilities		(395	)		—
Gain on extinguishment		21			—
Change in fair value of mandatorily redeemable non-controlling interest		(146	)		—
Net income before taxes		468			507
Income tax expense		(192	)		(147	)
Net Income		276			360
Preferred stock dividends		(72	)		(72	)
Net Income Available to Common Stockholders	$	204		$	288

22

Total Corporate Expenses

Total Corporate expenses, which include amortization of intangible assets, stock-based compensation and merger and acquisition expenses, increased by $19, or 1%, to $1,744 in the three months ended December 31, 2023 as compared to $1,725 for the three months ended December 31, 2022. 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 $50 or 11%, to $524 for the three months ended December 31, 2023 from $474 for the three months ended December 31, 2022. The increase was primarily due to higher interest rates partially offset by lower average debt balances.

Income Tax Expense

On a consolidated basis, the Company recorded an income tax expense of $192 for the three months ended December 31, 2023, as compared to an income tax expense of $147 for the three months ended December 31, 2022. The increase in income tax expense was primarily due to higher taxable income.

Preferred Stock Dividends

Preferred stock dividends include any dividends accrued but not paid on the Company’s Series C Cumulative Preferred Stock (the “Series C Preferred Stock”). For each of the three months ended December 31, 2023 and 2022, preferred stock dividends were $72.

Net Income

Net income was $276, or $0.23 per diluted share, for the three months ended December 31, 2023 compared to net income of $360, or $0.30 per diluted share, for the three months ended December 31, 2022. The decline in net income was largely due to lower profits in our business segments, higher interest expenses, a non-cash charge resulting from a change to the ELFS earnout liability and fair value adjustment to the mandatorily redeemable non-controlling interest, offset by a non-cash mark-to-market write-down of an equity investment.

Income Available to Common Stockholders

Income available to holders of common stock was $204, or $0.17 per diluted share, for the three months ended December 31, 2023 compared to income available to holders of common stock of $288, or $0.24 per diluted share, for the three months ended December 31, 2022. The decrease in net income available to common stockholders reflected lower net income.

LIQUIDITY AND CAPITAL RESOURCES

General

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

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

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

23

Our cash flow performance for the 2023 fiscal year may not necessarily be indicative of future cash flow performance.

Cash flows from operating activities

Net cash provided by operating activities was $3,006 for the three months ended December 31, 2023, versus $5,780 for the three months ended December 31, 2022. The decrease in cash provided by operations for the three months ended December 31, 2023 compared to the prior year period was driven principally by a lower net working capital benefit at our Logistics segment.

Cash flows from investing activities

Net cash used in investing activities totaled $53 for the three months ended December 31, 2023, versus $2,927 for the three months ended December 31, 2022. We used $53 for the acquisition of property and equipment for the three months ended December 31, 2023, compared to $80 for the acquisition of property and equipment and $2,847 for the acquisition of one business for the three months ended December 31, 2022.

Cash flows from financing activities

Net cash used in financing activities was $3,835 for the three months ended December 31, 2023, versus net cash used in financing activities of $5,289 for the three months ended December 31, 2022. Net cash used in financing activities for the three months ended December 31, 2023 included repayment of funds from our lines of credit, repayment of funds from our term loan and repayment of subordinated promissory notes. Net cash used in financing activities for the three months ended December 31, 2022 primarily included repayment of funds from our lines of credit and repayment of term loans.

Off-Balance Sheet Arrangements

As of December 31, 2023, 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, 2023, the end of the period covered by this Quarterly Report on Form 10-Q. Based on such evaluation, our Chief Executive Officer and our Principal Financial Officer have concluded that as of December 31, 2023, our disclosure controls and procedures are designed at a reasonable assurance level and are effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the SEC, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and our Principal Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

There has been no change in the Company’s overall internal control over financial reporting (as such is defined in Rules 13a-15(f) and 15(d)-15(f) under the Exchange Act) that occurred during the quarter ended December 31, 2023 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

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

ITEM 1A. RISK FACTORS

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

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

There were no unregistered sales of equity securities during the three months ended December 31, 2023. In addition, there were no shares of Common Stock purchased by us during the three months ended December 31, 2023.

ITEM 5. OTHER INFORMATION

Not applicable

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)
10.1	Amendment, dated December 1, 2023, to Membership Interest Purchase Agreement dated September 21, 2021, by and among Janel Group, Expedited Logistics and Freight Services, LLC and former shareholders of Expedited Logistics and Freight Services, LLC (filed herewith).
10.2	Sixth Amendment to Amended and Restated Loan and Security Agreement, dated December 21, 2023, by and among Santander Bank, N.A., as lender, and Janel Group, Inc., Expedited Logistics and Freight Services, LLC, and ELFS Brokerage, LLC, as borrowers, and Janel Corporation and Expedited Logistics and Freight Services, LLC, as loan party obligors (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, 2023 for the three months ended December 31, 2023 and 2022 in Inline XBRL (eXtensible Business Reporting Language) pursuant to Rule 405 of Regulation S-T: (i) Condensed Consolidated Balance Sheets as of December 31, 2023 and September 30, 2023, (ii) Condensed Consolidated Statements of Operations for the three months ended December 31, 2023 and 2022, (iii) Condensed Consolidated Statement of Changes in Stockholders’ Equity for the three months December 31, 2023 and 2022, (iv) Condensed Consolidated Statements of Cash Flows for the three months ended December 31, 2023 and 2022, 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)

25

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 2, 2024	JANEL CORPORATION
	Registrant
	/s/ Darren C. Seirer
	Darren C. Seirer
	Chairman, President and Chief Executive Officer
	(Principal Executive Officer)
Dated:    February 2, 2024	JANEL CORPORATION
	Registrant
	/s/ Vincent A. Verde
	Vincent A. Verde
	Principal Financial Officer, Treasurer and Secretary

26

EX-10.1

Exhibit 10.1

AMENDMENT TO

MEMBERSHIP INTEREST PURCHASE AGREEMENT

This AMENDMENT TO MEMBERSHIP INTEREST PURCHASE AGREEMENT (this “Amendment”) is made as of December 1, 2023, by and among:

A.          JANEL GROUP, INC., a New York corporation (“Janel”),

B.          EXPEDITED LOGISTICS AND FREIGHT SERVICES, LLC, a Texas limited liability company (“ELFS”); and

C.          DAVID W. FLAKE, RANDALL L. COCKRELL, STEVEN R. LALUMANDIER, and FREDERICK J. LALUMANDIER (each a "Seller" and, collectively, "Sellers");

in consideration of the mutual covenants herein contained and benefits to be derived herefrom.

W I T N E S E T H:

WHEREAS, the Janel ELFS and Sellers entered into that certain Membership Interest Purchase Agreement dated as of September 21, 2021 (together with any further modifications, amendments, and restatements thereof, the “Purchase Agreement”);

WHEREAS, the Sellers and Janel would like to modify and amend certain terms of the Purchase Agreement and related Notes issued to each of the Sellers.

NOW, THEREFORE, it is hereby agreed among the parties hereto as follows:

1. Capitalized Terms.  All capitalized terms used herein and not otherwise defined shall have the same meaning herein as in the Purchase Agreement.

2. Amendment to Purchase Agreement.  Section 3.2 of the Agreement is hereby amended by adding the following new Section 3.2.6:

3.2.6          Notwithstanding the terms of the second instance of Section 3.2.1 and Section 3.2.2 and 3.2.3, the Earn-Out Payments for (a) Earn-Out Year ending September 30, 2024 (“Earn-Out Year Three”) shall be $ 1,077,728.50 and (b) Earn-Out Year ending September 30, 2025 (“Earn-Out Year Four”) shall be $ 1,077,728.50.  The parties hereto acknowledge and agree that Section 3.2.3 (relating to the Earn-Out Statement) and Section 3.2.4 (relating to Review and Dispute Procedures) shall not be applicable to Earn-Out Payments for Earn-Out Year Three and Earn-Out Year Four.  For the avoidance of doubt, the first instance of Section 3.2.1 titled “Subordination of Earn-Out” shall be fully applicable to all Earn-out Payments, including those made during Earnout Year Three and Earn-Out Year Four.

3. Amendments to Notes.

(a) The definition of “Maturity Date” in each of the Notes is hereby amended by deleting the words “the five-year anniversary of the date hereof“ in the paragraph titled “Payments of Principal and Interest” and the words “the seven-year anniversary of the date hereof” are inserted in replacement thereof.

(b) Schedule A to each of the Notes is hereby replaced by the applicable Schedule A attached hereto on Annex I.

4. Conditions to Effectiveness.  This Amendment shall not be effective until each of the following conditions precedent have been fulfilled to the satisfaction of the Lender:

(a) This Amendment shall have been duly executed and delivered by the respective parties hereto and, shall be in full force and effect.

(b) Janel shall have received an Acknowledgement and Consent from Santander Bank consenting the modifications set forth in this Amendment in form and substance acceptable to Janel.

5. Miscellaneous.

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

(a) The provisions of Section 22 (Governing Law) and 23 (Arbitration) are specifically incorporated herein by reference.

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

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

[Remainder of page left intentionally blank.]

- 2 -

IN WITNESS WHEREOF, the parties have hereunto caused this Amendment to be executed and their seals to be hereto affixed as of the date first above written.

JANEL:
JANEL GROUP, INC., a New York corporation, as   Borrower
By:
Name:
Its:	President

ELFS:
EXPEDITED LOGISTICS AND FREIGHT SERVICES LLC, a Texas limited liability company, as Borrower
By:
Name:
Its:	Vice President

SELLERS:

David W. Flake

Randall L Cockrell

Stephen R. Lalumandier

Frederick J. Lalumandier

[Signature Page to Amendment to Membership Interest Purchase Agreement]

Acknowledged and Agreed to by:

PARENT GUARANTOR:
JANEL CORPORATION
By:
Name:
Its:	Vice President

[Signature Page to Amendment to Membership Interest Purchase Agreement]

ANNEX I

to

Amendment to Membership Interest Purchase Agreement

1. Subordinated Promissory Note dated September 21, 2021 in favor of David W. Flake:

SCHEDULE A

PAYMENTS

Beginning on October 15, 2021 and on the same day of each of the next eight (8) consecutive calendar quarters thereafter, payment of accrued and unpaid interest on the outstanding principal balance only.

Beginning on October 15, 2023, for $123,378, and on the same day of each of the next nineteen (19) consecutive calendar quarters thereafter, payment of principal in the amount of $85,180 each, together with accrued and unpaid interest on the outstanding principal balance.

The entire balance of the principal sum of $1,741,800, all accrued and unpaid interest and all other amounts due hereunder, if not sooner paid, shall be due and payable in full on July 15, 2028.

2. Subordinated Promissory Note dated September 21, 2021 in favor of Randall L Cockrell:

SCHEDULE A

PAYMENTS

Beginning on October 15, 2021 and on the same day of each of the next eight (8) consecutive calendar quarters thereafter, payment of accrued and unpaid interest on the outstanding principal balance only.

Beginning on October 15, 2023, for $123,378, and on the same day of each of the next nineteen (19) consecutive calendar quarters thereafter, payment of principal in the amount of $85,180 each, together with accrued and unpaid interest on the outstanding principal balance.

The entire balance of the principal sum of $1,741,800, all accrued and unpaid interest and all other amounts due hereunder, if not sooner paid, shall be due and payable in full on July 15, 2028.

3. Subordinated Promissory Note dated September 21, 2021 in favor of Steven R. Lalumandier:

SCHEDULE A

PAYMENTS

Beginning on October 15, 2021 and on the same day of each of the next eight (8) consecutive calendar quarters thereafter, payment of accrued and unpaid interest on the outstanding principal balance only.

Beginning on October 15, 2023, for $54,868, and on the same day of each of the next nineteen (19) consecutive calendar quarters thereafter, payment of principal in the amount of $37,881 each, together with accrued and unpaid interest on the outstanding principal balance.

The entire balance of the principal sum of $774,600, all accrued and unpaid interest and all other amounts due hereunder, if not sooner paid, shall be due and payable in full on July 15, 2028.

4. Subordinated Promissory Note dated September 21, 2021 in favor of Frederick J. Lalumandier:

SCHEDULE A

PAYMENTS

Beginning on October 15, 2021 and on the same day of each of the next eight (8) consecutive calendar quarters thereafter, payment of accrued and unpaid interest on the outstanding principal balance only.

Beginning on October 15, 2023, for $123,378, and on the same day of each of the next nineteen (19) consecutive calendar quarters thereafter, payment of principal in the amount of $85,180 each, together with accrued and unpaid interest on the outstanding principal balance.

The entire balance of the principal sum of $1,741,800, all accrued and unpaid interest and all other amounts due hereunder, if not sooner paid, shall be due and payable in full on July 15, 2028.

EX-10.2

Exhibit 10.2

Execution Version

SIXTH AMENDMENT TO

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

This SIXTH AMENDMENT TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (this “Sixth Amendment”) is made as of this __ day of December, 2023, by and among:

SANTANDER BANK, N.A., a national bank having a place of business at 28 State Street, Boston, Massachusetts 02109 (the “Lender”);

JANEL GROUP, INC., a New York corporation (“Janel”), EXPEDITED LOGISTICS AND FREIGHT SERVICES, LLC, a Texas limited liability company (“ELFS”) and ELFS BROKERAGE LLC, a Texas limited liability company (“ELFS Brokerage”, and together with Janel and ELFS, individually and collectively, and jointly and severally referred to herein as “Borrower”); and

JANEL CORPORATION, a Nevada corporation (“Parent”) and EXPEDITED LOGISTICS AND FREIGHT SERVICES, LLC, an Oklahoma limited liability company (“ELFS OK, and together with Parent, each, a “Loan Party Obligor” and collectively, the “Loan Party Obligors”)

in consideration of the mutual covenants herein contained and benefits to be derived herefrom.

W I T N E S S E T H:

WHEREAS, the Borrower and the other Loan Party Obligors and the Lender entered into that certain Amended and Restated Loan and Security Agreement dated as of September 21, 2021 (together with any further modifications, amendments, and restatements thereof, the “Agreement”);

WHEREAS, the Borrower and the other Loan Party Obligors have requested that the Lender modify and amend certain terms and conditions of the Agreement; and

WHEREAS, the Lender has agreed to modify and amend certain terms and conditions of the Agreement, all as provided for herein.

NOW, THEREFORE, it is hereby agreed among the parties hereto as follows:

1. Capitalized Terms.  All capitalized terms used herein and not otherwise defined shall have the same meaning herein as in the Agreement.

2. Amendments to Agreement.

a. Schedule B of the Agreement (Definitions) is hereby amended by inserting the following new definitions in their correct alphabetical order:

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

B) ““Sixth Amendment Effective Date” means December __ 2023.”

b. Schedule E of the Agreement is hereby amended by deleting the top row of said Schedule E and replacing it with the following:

Twice per month, reported (i) as of the 15^th day of each month, and (ii) as of the last day of each month, provided that as to (i) and (ii), such information shall be delivered no later than 15 calendar days after each such respective date; provided that if a BBC Reduction Trigger Event has occurred and is continuing, then once per month, on the 15th of each month, as of the immediately preceding month end; provided further that, in any event, if any day on which the information required to be delivered hereunder is not a Business Day, such information shall be delivered on the next Business Day.   (a) a completed and signed Borrowing Base certificate in the form provided to Borrower by Lender prior to the date hereof,

(b) a roll-forward with supporting details with respect to Borrower’s Accounts (delivered electronically in an acceptable format).
(c) notice of all claims, offsets, or disputes asserted by Account Debtors with respect to Borrower’s Accounts,
(d) a detailed aging, by total, of Borrower’s Accounts, together with a reconciliation and supporting documentation for any reconciling items noted,

3. Ratification of Loan Documents/Waiver.  Except as provided for herein, all terms and conditions of the Agreement or the other Loan Documents remain in full force and effect.  Each Loan Party Obligor each hereby ratifies, confirms, and reaffirms all representations, warranties, and covenants contained therein (including, without limitation, with respect to the Disclosure Schedule, each of which the Loan Party Obligors represent and warrant is true and correct as of the date hereof) and acknowledges and agrees that the Obligations, are and continue to be secured by the Collateral.  Each Loan Party Obligor acknowledges and agrees that each such Loan Party Obligor does not have any offsets, defenses, or counterclaims against the Lender arising out of the Agreement or the other Loan Documents, and to the extent that any such offsets, defenses, or counterclaims arising out of the Agreement or the other Loan Documents may exist, each such Loan Party Obligor hereby WAIVES and RELEASES the Lender therefrom.

- 2 -

4. Conditions to Effectiveness.  This Sixth Amendment shall not be effective until this Sixth Amendment shall have been duly executed and delivered by the respective parties hereto.

5. Miscellaneous.

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

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

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

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

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

f. The Loan Party Obligors each warrants and represents that such Person has consulted with independent legal counsel of such Person’s selection in connection with this Sixth Amendment and is not relying on any representations or warranties of the Lender or its counsel in entering into this Sixth Amendment.

[remainder of page left intentionally blank]

- 3 -

IN WITNESS WHEREOF, the parties have hereunto caused this Sixth Amendment to be executed and their seals to be hereto affixed as of the date first above written.

LENDER
SANTANDER BANK, N.A.
By:
Name:	Matthew Cunningham
Its:	Vice President

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

BORROWERS
JANEL GROUP, INC., a New York corporation, as   Borrower
By:
Name:	William J. Lally
Its:	President

EXPEDITED LOGISTICS AND FREIGHT SERVICES LLC, a Texas limited liability company, as Borrower
By:
Name:	William J. Lally
Its:	Vice President

ELFS BROKERAGE LLC, a Texas limited liability company, as Borrower
By:	Janel Group, Inc., its Manager
	By:
	Name:	William J. Lally
	Its:	President

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

LOAN PARTY OBLIGORS
JANEL CORPORATION, a Nevada corporation, as a Loan Party Obligor and Term Loan Borrower
By:
Name:	Darren C. Seirer
Its:	President

EXPEDITED LOGISTICS AND FREIGHT SERVICES LLC, an Oklahoma limited liability company, as a Loan Party Obligor
By:	Expedited Logistics and Freight Services LLC, a Texas limited liability company, its manager
	By:
	Name:	William J. Lally
	Its:	Vice President

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

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Darren Seirer, certify that:

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

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

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

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

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

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

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

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

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

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

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

Date: February 2, 2024	/s/ Darren C. Seirer
	Darren C. Seirer
	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 2, 2024	/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 (the “Company”) for the quarter ended December 31, 2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Darren Seirer, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

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

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

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

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

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 (the “Company”) for the quarter ended December 31, 2023, 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 2, 2024	/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, 2023	Feb. 02, 2024
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Period End Date	Dec. 31, 2023
Current Fiscal Year End Date	--09-30
Document Fiscal Year Focus	2024
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		1,186,354

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2023	Sep. 30, 2023
Current Assets:
Cash	$ 1,579	$ 2,461
Accounts receivable, net of allowance for doubtful accounts	25,965	27,518
Inventory, net	4,628	4,850
Prepaid expenses and other current assets	3,844	4,459
Total current assets	36,016	39,288
Property and Equipment, net	4,845	4,922
Other Assets:
Intangible assets, net	22,145	22,683
Goodwill	20,317	20,317
Investment in Rubicon at fair value	864	1,573
Operating lease right of use asset	6,853	7,460
Security deposits and other long-term assets	462	591
Total other assets	50,641	52,624
Total assets	91,502	96,834
Current Liabilities:
Lines of credit	17,002	19,709
Accounts payable - trade	24,058	25,447
Accrued expenses and other current liabilities	5,856	6,337
Dividends payable	2,100	2,029
Current portion of earnout	740	592
Current portion of long-term debt	716	715
Current portion of subordinated promissory note-related party	$ 1,395	$ 1,988
Notes Payable, Current, Related Party, Type [Extensible Enumeration]	us-gaap:RelatedPartyMember	us-gaap:RelatedPartyMember
Current portion of operating lease liabilities	$ 1,935	$ 2,020
Total current liabilities	53,802	58,837
Other Liabilities:
Long-term debt	5,197	5,784
Long-term portion of earnout	1,996	1,738
Subordinated promissory notes-related party	$ 3,480	$ 3,424
Notes Payable, Noncurrent, Related Party, Type [Extensible Enumeration]	us-gaap:RelatedPartyMember	us-gaap:RelatedPartyMember
Mandatorily redeemable non-controlling interest	$ 711	$ 565
Deferred income taxes	1,341	1,341
Long-term operating lease liabilities	5,221	5,689
Other liabilities	509	483
Total other liabilities	18,455	19,024
Total liabilities	72,257	77,861
Stockholders' Equity:
Common stock, $0.001 par value; 4,500,000 shares authorized, 1,206,354 issued and 1,186,354 outstanding as of December 31, 2023 and September 30, 2023, respectively	1	1
Paid-in capital	17,103	17,107
Common treasury stock, at cost, 20,000 shares	(240)	(240)
Accumulated earnings	2,381	2,105
Total stockholders' equity	19,245	18,973
Total liabilities and stockholders' equity	91,502	96,834
Series C [Member]
Stockholders' Equity:
Series C; 30,000 shares authorized and 11,368 shares issued and outstanding at December 31, 2023 and September 30, 2023, liquidation value of $7,784 and $7,713 at December 31, 2023 and September 30, 2023, respectively	$ 0	$ 0

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2023	Sep. 30, 2023
Stockholders' Equity:
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)	100,000	100,000
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	4,500,000	4,500,000
Common stock, shares issued (in shares)	1,206,354	1,206,354
Common stock, shares outstanding (in shares)	1,186,354	1,186,354
Common treasury stock, at cost (in shares)	20,000	20,000
Series C [Member]
Stockholders' Equity:
Preferred stock, shares authorized (in shares)	30,000	30,000
Preferred Stock, shares issued (in shares)	11,368	11,368
Preferred stock, shares outstanding (in shares)	11,368	11,368
Preferred stock, liquidation value	$ 7,784	$ 7,713

XML

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS [Abstract]
Revenues	$ 41,035	$ 57,044
Forwarding expenses and cost of revenues	26,890	42,127
Gross profit	14,145	14,917
Cost and Expenses:
Selling, general and administrative	12,605	13,011
Amortization of intangible assets	538	526
Total Costs and Expenses	13,143	13,537
Income from Operations	1,002	1,380
Other Items:
Interest expense	(524)	(474)
Other income (expense)	(10)	(399)
Income Before Income Taxes	468	507
Income tax expense	(192)	(147)
Net Income	276	360
Preferred stock dividends	(72)	(72)
Net Income Available to Common Stockholders	$ 204	$ 288
Net income per share
Basic (in dollars per share)	$ 0.23	$ 0.3
Diluted (in dollars per share)	0.23	0.3
Net income per share attributable to common stockholders:
Basic (in dollars per share)	0.17	0.24
Diluted (in dollars per share)	$ 0.17	$ 0.24
Weighted average number of shares outstanding:
Basic (in shares)	1,186,300	1,186,300
Diluted (in shares)	1,202,100	1,208,200

XML

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Preferred Stock [Member]	Common Stock [Member]	Paid-in Capital [Member]	Common Treasury Stock [Member]	Accumulated Earnings [Member]	Total
Balance at Sep. 30, 2022	$ 0	$ 1	$ 17,184	$ (240)	$ 1,382	$ 18,327
Balance (in shares) at Sep. 30, 2022	11,368	1,206,354		20,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income	$ 0	$ 0	0	$ 0	360	360
Dividends to preferred stockholders	0	0		0	0	(72)
Dividends to preferred stockholders			(72)
Stock based compensation	0	0	51	0	0	51
Balance at Dec. 31, 2022	$ 0	$ 1	17,163	$ (240)	1,742	18,666
Balance (in shares) at Dec. 31, 2022	11,368	1,206,354		20,000
Balance at Sep. 30, 2023	$ 0	$ 1	17,107	$ (240)	2,105	18,973
Balance (in shares) at Sep. 30, 2023	11,368	1,206,354		20,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income	$ 0	$ 0	0	$ 0	276	276
Dividends to preferred stockholders	0	0		0	0	(72)
Dividends to preferred stockholders			(72)
Stock based compensation	0	0	68	0	0	68
Balance at Dec. 31, 2023	$ 0	$ 1	$ 17,103	$ (240)	$ 2,381	$ 19,245
Balance (in shares) at Dec. 31, 2023	11,368	1,206,354		20,000

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Sep. 30, 2023
Cash flows from operating activities:
Net income	$ 276	$ 360
Adjustments to reconcile net income to net cash provided by operating activities:
(Recovery of) Provision for uncollectible accounts	(153)	(71)
Depreciation	130	121
Deferred income tax provision	0	(15)
Amortization of intangible assets	538	526
Amortization of acquired inventory valuation	83	90
Amortization of loan costs	26	4
Stock-based compensation	71	61
Unrealized loss on marketable securities	709	399
Change in fair value of mandatorily redeemable noncontrolling interest	146	0
Fair value adjustment of contingent earnout liabilities	405	0
Gain on extinguishment	(21)	0
Changes in operating assets and liabilities, net of effects of acquisitions:
Accounts receivable	1,706	14,656
Inventory	139	84
Prepaid expenses and other current assets	616	623
Security deposits and other long-term assets	130	31
Accounts payable and accrued expenses	(1,876)	(11,115)
Other liabilities	81	26
Net cash provided by operating activities	3,006	5,780
Cash flows from investing activities:
Acquisition of property and equipment, net of disposals	(53)	(80)
Acquisitions	0	(2,847)
Net cash used in investing activities	(53)	(2,927)
Cash flows from financing activities:
Repayments of term loan	(612)	(347)
Lines of credit payments, net	(2,707)	(5,076)
Repayment of subordinate promissory notes, net	(516)	134
Net cash used in financing activities	(3,835)	(5,289)
Net (decrease) in cash	(882)	(2,436)
Cash at beginning of the period	2,461	6,591	$ 6,591
Cash at end of period	1,579	4,155	$ 2,461
Cash paid during the period for:
Interest	511	380
Income taxes	156	9
Non-cash operating activities:
Contingent earnout acquisition	0	600
Due to former owner	0	455
Non-cash financing activities:
Dividends declared to preferred stockholders	$ 72	$ 72

XML

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

3 Months Ended

Dec. 31, 2023

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES [Abstract]

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

1. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

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

Business Description

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

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

Revenue and revenue recognition

Logistics

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

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

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

In the Logistics segment, the Company disaggregates its revenue by its four primary service categories: trucking, air, ocean and customs brokerage and other. The Company has aggregated customs brokerage and other for the periods ended December 31, 2023 and 2022. A summary of the Company’s revenues disaggregated by major service lines for the three months ended December 31, 2023 and 2022 was as follows (in thousands):

	Three Months Ended December 31,
	2023		2022
Service Type
Trucking	$	17,997	$	22,761
Air		6,711		6,239
Ocean		6,448		18,166
Customs brokerage and other		4,059		4,634
Total	$	35,215	$	51,800

Life Sciences and Manufacturing

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

XML

ACQUISITIONS

3 Months Ended

Dec. 31, 2023

ACQUISITIONS [Abstract]

ACQUISITIONS

2. ACQUISITIONS

Fiscal 2023 Acquisitions

Life Sciences

On November 1, 2022, the Company completed a business combination whereby it acquired all of the outstanding stock of ImmunoBioScience Corporation (“IBS”), for an aggregate purchase price of $3,755, net of $153 cash received.  At closing, $3,000 was paid in cash, $250 was due to the former stockholder of IBS as a deferred acquisition payment upon integration, $300 was recorded as a preliminary earnout consideration (not to exceed $750) and $205 was recorded as a preliminary working capital adjustment. The acquisition was funded with cash provided by normal operations, and the results of operations of IBS are included in Janel’s condensed consolidated results of operations since the date of the acquisition. In connection with the combination, the Company recorded an aggregate of $1,468 in goodwill and $1,680 in other identifiable intangibles. Supplemental pro forma information has not been provided as the acquisition did not have a significant impact on Janel’s condensed consolidated results of operations, individually or in aggregate. IBS is a developer and manufacturer of high-quality reagents used by research and diagnostic customers. IBS was founded in 2007 and is headquartered in Mukilteo, Washington. The acquisition of IBS was completed to expand our product offerings in our Life Sciences segment.

On March 2, 2023, the Company completed a business combination whereby it acquired all of the outstanding stock of Stephen Hall PhD, Ltd. (“SH”) for an aggregate purchase price of $600. At closing, $500 was paid in cash and $100 was due to the former stockholder of SH as a deferred acquisition payment upon integration. The acquisition was funded with cash provided by normal operations, and the results of operations of SH are included in Janel’s condensed consolidated results of operations since the date of the acquisition. In connection with the combination, the Company recorded an aggregate of $181 in goodwill and $202 in other identifiable intangibles. Supplemental pro forma information has not been provided as the acquisition did not have a significant impact on Janel’s condensed consolidated results of operations, individually or in aggregate. SH is a developer and manufacturer of antibodies and cell culture media for research and diagnostic uses. SH was founded in 2011 and is headquartered in Lafayette, Indiana. The acquisition of SH was completed to expand our product offerings in our Life Sciences segment.

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

XML

INVENTORY

3 Months Ended

Dec. 31, 2023

INVENTORY [Abstract]

INVENTORY

3. INVENTORY

Inventories consisted of the following (in thousands):

	December 31, 2023			September 30, 2023
Finished goods	$	1,953		$	2,095
Work-in-process		922			969
Raw materials		1,781			1,811
Gross inventory		4,656			4,875
Less – reserve for inventory valuation		(28	)		(25	)
Inventory net	$	4,628		$	4,850

XML

INTANGIBLE ASSETS

3 Months Ended

Dec. 31, 2023

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, 2023			September 30, 2023			Life
Customer relationships	$	25,238		$	25,238		10-24 Years
Trademarks/names		4,559			4,559		1-20 Years
Trademarks/names		521			521		Indefinite
Other		1,929			1,929		2-22 Years
Total intangible assets		32,247			32,247
Less: accumulated amortization		(10,102	)		(9,564	)
Total intangible assets, net	$	22,145		$	22,683

The composition of the intangible assets balance at December 31, 2023 and September 30, 2023 is as follows (in thousands):

	December 31, 2023			September 30, 2023
Logistics	$	18,174		$	18,174
Life Sciences		6,373			6,373
Manufacturing		7,700			7,700
Total intangible assets		32,247			32,247
Less: accumulated amortization		(10,102	)		(9,564	)
Total intangible assets, net	$	22,145		$	22,683

Amortization expense for the three months ended December 31, 2023 and 2022 was $538 and $526, respectively.

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GOODWILL

3 Months Ended

Dec. 31, 2023

GOODWILL [Abstract]

GOODWILL

5. GOODWILL

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

The composition of the goodwill balance at December 31, 2023 and September 30, 2023 was as follows (in thousands):

	December 31, 2023		September 30, 2023
Logistics	$	9,175	$	9,175
Life Sciences		6,096		6,096
Manufacturing		5,046		5,046
Total	$	20,317	$	20,317

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NOTES PAYABLE - BANKS

3 Months Ended

Dec. 31, 2023

NOTES PAYABLE - BANKS [Abstract]

NOTES PAYABLE - BANKS

6. NOTES PAYABLE – BANKS

(A) Santander Bank Facility

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

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

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

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

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

On December 21, 2023, we entered into the Sixth Amendment to the Amended and Restated Loan and Security Agreement, which modified the reporting due date of the monthly borrowing base calculation from the fifth day to the fifteenth day of each month.

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

At December 31, 2023, outstanding borrowings under the Santander Facility were $16,252, representing 46.4% of the $35,000 available subject to limitations thereunder, and interest was accruing at an effective interest rate of 7.68%.

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

The Company was in compliance with the financial covenants defined in the Santander Loan Agreement at both December 31, 2023 and September 30, 2023.

(B) First Merchants Bank Credit Facility

On February 29, 2016, Indco entered into a Credit Agreement (as amended, the “Prior First Merchants Credit Agreement”) with First Merchants.

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

As of December 31, 2023, there were $500 of outstanding borrowings under the acquisition loan, $250 of outstanding borrowings under the revolving loan, $5,645 of outstanding borrowings under the Term A loan and $604 of outstanding borrowings under the Term B loan, with interest accruing on the acquisition loan and revolving loan at an effective interest rate of 8.22% and on the Term A loan and Term B loan at an effective interest rate of 8.22% and 4.19%, respectively.

As of September 30, 2023, there were $500 of outstanding borrowings under the acquisition loan, $450 of outstanding borrowings under the revolving loan, $6,235 of outstanding borrowings under the Term A loan and $610 of outstanding borrowings under the Term B loan, with interest accruing on the acquisition loan and revolving loan at an effective interest rate of 8.18% and on the Term A loan and Term B loan at an effective interest rate of 8.18% and 4.19%, respectively.

The Company was in compliance with the financial covenants defined in the First Merchants Credit Agreement at December 31, 2023 and September 30, 2023.

The table below sets forth the total long-term debt, net of capitalized loan fees of $349 for the First Merchants Credit Agreement (in thousands):

	December 31, 2023			September 30, 2023
Total debt	$	5,913		$	6,499
Less current portion		(716	)		(715	)
Long-term portion	$	5,197		$	5,784

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SUBORDINATED PROMISSORY NOTES - RELATED PARTY

3 Months Ended

Dec. 31, 2023

SUBORDINATED PROMISSORY NOTES - RELATED PARTY [Abstract]

SUBORDINATED PROMISSORY NOTES - RELATED PARTY

7. SUBORDINATED PROMISSORY NOTES - RELATED PARTY

(A)          ICT Subordinated Promissory Note

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

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

As of December 31, 2023, the amount outstanding under the ICT Subordinated Promissory Note was $221, net of a $28 discount, which is included in the current portion of subordinated promissory notes.

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

(B)          ELFS Subordinated Promissory Notes

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

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

As of December 31, 2023, the gross principal amount outstanding under the ELFS Subordinated Promissory Notes was $5,575 ($4,654 net of a $921 unamortized discount), of which $1,174 was included in the current portion of subordinated promissory notes and $3,480 was included in the long-term portion of subordinated promissory notes.

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

(in thousands)	December 31, 2023			September 30, 2023
Total subordinated promissory notes	$	4,875		$	5,412
Less current portion of subordinated promissory notes		(1,395	)		(1,988	)
Long-term portion of subordinated promissory notes	$	3,480		$	3,424

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STOCKHOLDERS' EQUITY

3 Months Ended

Dec. 31, 2023

STOCKHOLDERS' EQUITY [Abstract]

STOCKHOLDERS' EQUITY

8. STOCKHOLDERS’ EQUITY

(in thousands, except share and per share data)

Preferred Stock

Series C Cumulative Preferred Stock

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

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STOCK-BASED COMPENSATION

3 Months Ended

Dec. 31, 2023

STOCK-BASED COMPENSATION [Abstract]

STOCK-BASED COMPENSATION

9. STOCK-BASED COMPENSATION

(in thousands, except share and per share data)

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

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

Total stock-based compensation for the three months ended December 31, 2023 and 2022 amounted to $68 and $51, respectively, and is included in selling, general and administrative expense in the Company’s statements of operations.

Options

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value (in thousands)
Outstanding balance at September 30, 2023		40,993		$	22.53		6.6	$	482.49
Granted		12,500		$	28.25		9.8	$	—
Expired		(3,500	)	$	3.25		—	$	—
Outstanding balance at December 31, 2023		49,993		$	25.31		7.6	$	305.63
Exercisable at December 31, 2023		24,162		$	12.63		6.0	$	298.97

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, 2023 of $25.00 per share and the exercise price of the stock options that had strike prices below such closing price.

As of December 31, 2023, there was approximately $479 of total unrecognized compensation expense related to the unvested employee stock options which is expected to be recognized over a weighted average period of 1.73 years.

Liability classified share-based awards

During the three months ended December 31, 2023 and fiscal year ended September 30, 2023, there were no options granted and no options were exercised with respect to Indco’s common stock.

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INCOME PER COMMON SHARE

3 Months Ended

Dec. 31, 2023

INCOME PER COMMON SHARE [Abstract]

INCOME PER COMMON SHARE

10. INCOME PER COMMON SHARE

The following table provides a reconciliation of the basic and diluted earnings per share (“EPS”) computations for the three months ended December 31, 2023 and 2022:

	Three Months Ended December 31,
(in thousands, except per share data)	2023			2022
Income:
Net income	$	276		$	360
Preferred stock dividends		(72	)		(72	)
Net income available to common stockholders	$	204		$	288
Common Shares:
Basic - weighted average common shares		1,186.3			1,186.3
Effect of dilutive securities:
Stock options		15.8			21.9
Diluted - weighted average common stock		1,202.1			1,208.2
Income per Common Share:
Basic -
Net income	$	0.23		$	0.30
Preferred stock dividends		(0.06	)		(0.06	)
Net income available to common stockholders	$	0.17		$	0.24
Diluted -
Net income	$	0.23		$	0.30
Preferred stock dividends		(0.06	)		(0.06	)
Net income available to common stockholders	$	0.17		$	0.24

The computation for the diluted number of shares excludes unexercised stock options that are anti-dilutive. There were 22.5 and 10 anti-dilutive shares for the three-month periods ended December 31, 2023 and 2022, respectively.

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INCOME TAXES

3 Months Ended

Dec. 31, 2023

INCOME TAXES [Abstract]

INCOME TAXES

11. INCOME TAXES

The reconciliation of income tax computed at the Federal statutory rate to the provision for income taxes from continuing operations for the three month periods ended December 31, 2023 and 2022 was as follows (in thousands):

	Three Months Ended December 31,
	2023		2022
Federal taxes at statutory rates	$	98	$	107
Permanent differences		58		1
State and local taxes, net of Federal benefit		36		39
Total	$	192	$	147

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BUSINESS SEGMENT INFORMATION

3 Months Ended

Dec. 31, 2023

BUSINESS SEGMENT INFORMATION [Abstract]

BUSINESS SEGMENT INFORMATION

12. BUSINESS SEGMENT INFORMATION

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

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

The following tables present selected financial information about the Company’s reportable segments and Corporate for the purpose of reconciling to the consolidated totals for the three months ended December 31, 2023:

For the three months ended December 31, 2023 (in thousands)	Consolidated		Logistics		Life Sciences		Manufacturing		Corporate
Revenues	$	41,035	$	35,215	$	3,481	$	2,339	$	—
Forwarding expenses and cost of revenues		26,890		25,214		606		1,070		—
Gross profit		14,145		10,001		2,875		1,269		—
Selling, general and administrative		12,605		8,865		1,750		784		1,206
Amortization of intangible assets		538		—		—		—		538
Income (loss) from operations		1,002		1,136		1,125		485		(1,744	)
Interest expense		524		357		78		89		—
Identifiable assets		91,502		31,128		11,786		3,875		44,713
Capital expenditures, net of disposals	$	53	$	18	$	35	$	—	$	—

The following tables present selected financial information about the Company’s reportable segments and Corporate for the purpose of reconciling to the consolidated totals for the three months ended December 31, 2022:

For the three months ended December 31, 2022 (in thousands)	Consolidated		Logistics		Life Sciences		Manufacturing		Corporate
Revenues	$	57,044	$	51,800	$	2,838	$	2,406	$	—
Forwarding expenses and cost of revenues		42,127		40,267		728		1,132		—
Gross profit		14,917		11,533		2,110		1,274		—
Selling, general and administrative		13,011		9,528		1,510		774		1,199
Amortization of intangible assets		526		—		—		—		526
Income (loss) from operations		1,380		2,005		600		500		(1,725	)
Interest expense		474		334		37		103		—
Identifiable assets		111,564		49,220		11,317		4,085		46,942
Capital expenditures, net of disposals	$	80	$	68	$	10	$	2	$	—

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FAIR VALUE MEASUREMENTS

3 Months Ended

Dec. 31, 2023

FAIR VALUE MEASUREMENTS [Abstract]

FAIR VALUE MEASUREMENTS

13. FAIR VALUE MEASUREMENTS

Recurring Fair Value Measurements

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

Level 1 Assets	December 31,  2023		September 30, 2023
Investment in Rubicon at fair value	$	864	$	1,573

On August 19, 2022, the Company acquired 1,108,000 shares of the common stock, par value $0.001 per share, of Rubicon Technology, Inc. (“Rubicon”), at a price per share of $20.00, in a cash tender offer. As of each of December 31, 2023 and September 30, 2023, the Company held 46.6% of the total issued and outstanding shares of Rubicon and reported its investment under the fair value method pursuant to ASC 320. Management determined that it was appropriate to carry its investment in Rubicon at fair value because the investment was traded on the NASDAQ stock exchange through January 2, 2023, began trading on the OTCQB Capital Market on January 3, 2023 and had daily trading activity, the combination of which provide a better indicator of value. The investment in Rubicon is re-measured at the end of each quarter based on the trading price and any change in the value is reported on the income statement as an unrealized gain or loss on marketable securities in other income (expense).

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

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

	December 31, 2023			September 30, 2023
Balance beginning of period	$	1,573		$	2,371
Fair value adjustment to Rubicon investment		(709	)		(798	)
Balance end of period	$	864		$	1,573

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

	December 31, 2023		September 30, 2023
Level 1 Contingent earnout liabilities	$	2,435	$	—
Level 3 Contingent earnout liabilities		300		2,330
Total	$	2,735	$	2,330

These liabilities relate to the estimated fair value of earnout payments to former IBS and ELFS Sellers for the periods ending December 31, 2023 and September 30, 2023.

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

The current and non-current portions of the fair value of the contingent earnout liabilities at December 31, 2023 were $740 and $1,996, respectively. The current and non-current portions of the fair value of the contingent earnout liabilities at September 30, 2023 were $592 and $1,738, respectively.

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

	December 31, 2023			September 30, 2023
Balance beginning of period	$	2,330		$	4,580
Fair value of contingent consideration recorded in connection with business combinations		—			300
Earnout payment		—			(1,693	)
Fair value adjustment of contingent earnout liabilities		405			(857	)
Transfer to Level 1		(2,435	)		—
Balance end of period	$	300		$	2,330

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

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LEASES

3 Months Ended

Dec. 31, 2023

LEASES [Abstract]

LEASES

14. LEASES

The Company has operating leases for office and warehouse space in all locations where it conducts business. As of December 31, 2023, the remaining terms of the Company’s operating leases were between one and 123 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, 2023 and 2022 were as follows (in thousands):

	Three Months Ended December 31,
	2023			2022
Operating lease cost		$	599		$	551
Short-term lease cost			100			20
Total lease cost		$	699		$	571

Rent expense for the three months ended December 31, 2023 and 2022 was $699 and $571, 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, 2023 were $6,853, $1,935 and $5,221, respectively.

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

As of December 31, 2023 and September 30, 2023, the weighted-average remaining lease term and the weighted-average discount rate related to the Company’s operating leases were 5.8 years and 4.53% and 5.9 years and 4.01%, respectively.

Future minimum lease payments under non-cancelable operating leases as of December 31, 2023 were as follows (in thousands):

2024	$	1,985
2025		1,523
2026		1,193
2027		1,215
2028		978
Thereafter		1,467
Total undiscounted loan payments		8,361
Less: imputed interest		(1,205	)
Total lease obligation	$	7,156

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SUBSEQUENT EVENTS

3 Months Ended

Dec. 31, 2023

SUBSEQUENT EVENTS [Abstract]

SUBSEQUENT EVENTS

15. SUBSEQUENT EVENTS

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

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Insider Trading Arrangements	3 Months Ended
	Dec. 31, 2023
Insider Trading Arrangements [Line Items]
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

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BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies)

3 Months Ended

Dec. 31, 2023

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES [Abstract]

Revenue and revenue recognition

Revenue and revenue recognition

Logistics

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

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

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

In the Logistics segment, the Company disaggregates its revenue by its four primary service categories: trucking, air, ocean and customs brokerage and other. The Company has aggregated customs brokerage and other for the periods ended December 31, 2023 and 2022. A summary of the Company’s revenues disaggregated by major service lines for the three months ended December 31, 2023 and 2022 was as follows (in thousands):

	Three Months Ended December 31,
	2023		2022
Service Type
Trucking	$	17,997	$	22,761
Air		6,711		6,239
Ocean		6,448		18,166
Customs brokerage and other		4,059		4,634
Total	$	35,215	$	51,800

Life Sciences and Manufacturing

Revenues from the Company’s Life Sciences segment are derived from the sale of high-quality monoclonal and polyclonal antibodies, diagnostic reagents and diagnostic kits and other immunoreagents for biomedical research and antibody manufacturing. Revenues from the Company’s Manufacturing segment, which is comprised of Indco, a majority-owned subsidiary of the Company that manufactures and distributes mixing equipment and apparatus for specific applications within various industries, are derived from the engineering, manufacture and delivery of specialty mixing equipment and accessories. Revenues for Life Sciences and Manufacturing are recognized when products are shipped, and 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, 2023

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES [Abstract]

Disaggregation of Revenue

The Company has aggregated customs brokerage and other for the periods ended December 31, 2023 and 2022. A summary of the Company’s revenues disaggregated by major service lines for the three months ended December 31, 2023 and 2022 was as follows (in thousands):

	Three Months Ended December 31,
	2023		2022
Service Type
Trucking	$	17,997	$	22,761
Air		6,711		6,239
Ocean		6,448		18,166
Customs brokerage and other		4,059		4,634
Total	$	35,215	$	51,800

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INVENTORY (Tables)

3 Months Ended

Dec. 31, 2023

INVENTORY [Abstract]

Inventories

Inventories consisted of the following (in thousands):

	December 31, 2023			September 30, 2023
Finished goods	$	1,953		$	2,095
Work-in-process		922			969
Raw materials		1,781			1,811
Gross inventory		4,656			4,875
Less – reserve for inventory valuation		(28	)		(25	)
Inventory net	$	4,628		$	4,850

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INTANGIBLE ASSETS (Tables)

3 Months Ended

Dec. 31, 2023

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, 2023			September 30, 2023			Life
Customer relationships	$	25,238		$	25,238		10-24 Years
Trademarks/names		4,559			4,559		1-20 Years
Trademarks/names		521			521		Indefinite
Other		1,929			1,929		2-22 Years
Total intangible assets		32,247			32,247
Less: accumulated amortization		(10,102	)		(9,564	)
Total intangible assets, net	$	22,145		$	22,683

The composition of the intangible assets balance at December 31, 2023 and September 30, 2023 is as follows (in thousands):

	December 31, 2023			September 30, 2023
Logistics	$	18,174		$	18,174
Life Sciences		6,373			6,373
Manufacturing		7,700			7,700
Total intangible assets		32,247			32,247
Less: accumulated amortization		(10,102	)		(9,564	)
Total intangible assets, net	$	22,145		$	22,683

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GOODWILL (Tables)

3 Months Ended

Dec. 31, 2023

GOODWILL [Abstract]

Composition of Goodwill

The composition of the goodwill balance at December 31, 2023 and September 30, 2023 was as follows (in thousands):

	December 31, 2023		September 30, 2023
Logistics	$	9,175	$	9,175
Life Sciences		6,096		6,096
Manufacturing		5,046		5,046
Total	$	20,317	$	20,317

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NOTES PAYABLE - BANKS (Tables)

3 Months Ended

Dec. 31, 2023

NOTES PAYABLE - BANKS [Abstract]

Schedule of Debt

The table below sets forth the total long-term debt, net of capitalized loan fees of $349 for the First Merchants Credit Agreement (in thousands):

	December 31, 2023			September 30, 2023
Total debt	$	5,913		$	6,499
Less current portion		(716	)		(715	)
Long-term portion	$	5,197		$	5,784

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SUBORDINATED PROMISSORY NOTES - RELATED PARTY (Tables)

3 Months Ended

Dec. 31, 2023

SUBORDINATED PROMISSORY NOTES - RELATED PARTY [Abstract]

Amounts Outstanding

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

(in thousands)	December 31, 2023			September 30, 2023
Total subordinated promissory notes	$	4,875		$	5,412
Less current portion of subordinated promissory notes		(1,395	)		(1,988	)
Long-term portion of subordinated promissory notes	$	3,480		$	3,424

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STOCK-BASED COMPENSATION (Tables)

3 Months Ended

Dec. 31, 2023

STOCK-BASED COMPENSATION [Abstract]

Activity of Stock Options

Options

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value (in thousands)
Outstanding balance at September 30, 2023		40,993		$	22.53		6.6	$	482.49
Granted		12,500		$	28.25		9.8	$	—
Expired		(3,500	)	$	3.25		—	$	—
Outstanding balance at December 31, 2023		49,993		$	25.31		7.6	$	305.63
Exercisable at December 31, 2023		24,162		$	12.63		6.0	$	298.97

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INCOME PER COMMON SHARE (Tables)

3 Months Ended

Dec. 31, 2023

INCOME PER COMMON SHARE [Abstract]

Reconciliation of Basic and Diluted Earnings Per Share

The following table provides a reconciliation of the basic and diluted earnings per share (“EPS”) computations for the three months ended December 31, 2023 and 2022:

	Three Months Ended December 31,
(in thousands, except per share data)	2023			2022
Income:
Net income	$	276		$	360
Preferred stock dividends		(72	)		(72	)
Net income available to common stockholders	$	204		$	288
Common Shares:
Basic - weighted average common shares		1,186.3			1,186.3
Effect of dilutive securities:
Stock options		15.8			21.9
Diluted - weighted average common stock		1,202.1			1,208.2
Income per Common Share:
Basic -
Net income	$	0.23		$	0.30
Preferred stock dividends		(0.06	)		(0.06	)
Net income available to common stockholders	$	0.17		$	0.24
Diluted -
Net income	$	0.23		$	0.30
Preferred stock dividends		(0.06	)		(0.06	)
Net income available to common stockholders	$	0.17		$	0.24

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INCOME TAXES (Tables)

3 Months Ended

Dec. 31, 2023

INCOME TAXES [Abstract]

Income Tax Reconciliation

The reconciliation of income tax computed at the Federal statutory rate to the provision for income taxes from continuing operations for the three month periods ended December 31, 2023 and 2022 was as follows (in thousands):

	Three Months Ended December 31,
	2023		2022
Federal taxes at statutory rates	$	98	$	107
Permanent differences		58		1
State and local taxes, net of Federal benefit		36		39
Total	$	192	$	147

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BUSINESS SEGMENT INFORMATION (Tables)

3 Months Ended

Dec. 31, 2023

BUSINESS SEGMENT INFORMATION [Abstract]

Segment Reporting Information by Segment

The following tables present selected financial information about the Company’s reportable segments and Corporate for the purpose of reconciling to the consolidated totals for the three months ended December 31, 2023:

For the three months ended December 31, 2023 (in thousands)	Consolidated		Logistics		Life Sciences		Manufacturing		Corporate
Revenues	$	41,035	$	35,215	$	3,481	$	2,339	$	—
Forwarding expenses and cost of revenues		26,890		25,214		606		1,070		—
Gross profit		14,145		10,001		2,875		1,269		—
Selling, general and administrative		12,605		8,865		1,750		784		1,206
Amortization of intangible assets		538		—		—		—		538
Income (loss) from operations		1,002		1,136		1,125		485		(1,744	)
Interest expense		524		357		78		89		—
Identifiable assets		91,502		31,128		11,786		3,875		44,713
Capital expenditures, net of disposals	$	53	$	18	$	35	$	—	$	—

The following tables present selected financial information about the Company’s reportable segments and Corporate for the purpose of reconciling to the consolidated totals for the three months ended December 31, 2022:

For the three months ended December 31, 2022 (in thousands)	Consolidated		Logistics		Life Sciences		Manufacturing		Corporate
Revenues	$	57,044	$	51,800	$	2,838	$	2,406	$	—
Forwarding expenses and cost of revenues		42,127		40,267		728		1,132		—
Gross profit		14,917		11,533		2,110		1,274		—
Selling, general and administrative		13,011		9,528		1,510		774		1,199
Amortization of intangible assets		526		—		—		—		526
Income (loss) from operations		1,380		2,005		600		500		(1,725	)
Interest expense		474		334		37		103		—
Identifiable assets		111,564		49,220		11,317		4,085		46,942
Capital expenditures, net of disposals	$	80	$	68	$	10	$	2	$	—

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FAIR VALUE MEASUREMENTS (Tables)

3 Months Ended

Dec. 31, 2023

FAIR VALUE MEASUREMENTS [Abstract]

Assets and Liabilities Measured at Fair Value on Recurring Basis

Recurring Fair Value Measurements

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

Level 1 Assets	December 31,  2023		September 30, 2023
Investment in Rubicon at fair value	$	864	$	1,573

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

	December 31, 2023		September 30, 2023
Level 1 Contingent earnout liabilities	$	2,435	$	—
Level 3 Contingent earnout liabilities		300		2,330
Total	$	2,735	$	2,330

Changes in Fair Value of Investment in Rubicon Measured at Fair Value on Recurring Basis Utilizing Level 1 Assumptions

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

	December 31, 2023			September 30, 2023
Balance beginning of period	$	1,573		$	2,371
Fair value adjustment to Rubicon investment		(709	)		(798	)
Balance end of period	$	864		$	1,573

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

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

	December 31, 2023			September 30, 2023
Balance beginning of period	$	2,330		$	4,580
Fair value of contingent consideration recorded in connection with business combinations		—			300
Earnout payment		—			(1,693	)
Fair value adjustment of contingent earnout liabilities		405			(857	)
Transfer to Level 1		(2,435	)		—
Balance end of period	$	300		$	2,330

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LEASES (Tables)

3 Months Ended

Dec. 31, 2023

LEASES [Abstract]

Components of Lease Expense

The components of lease cost for the three-month periods ended December 31, 2023 and 2022 were as follows (in thousands):

	Three Months Ended December 31,
	2023			2022
Operating lease cost		$	599		$	551
Short-term lease cost			100			20
Total lease cost		$	699		$	571

Future Minimum Lease Payments for Operating Leases

Future minimum lease payments under non-cancelable operating leases as of December 31, 2023 were as follows (in thousands):

2024	$	1,985
2025		1,523
2026		1,193
2027		1,215
2028		978
Thereafter		1,467
Total undiscounted loan payments		8,361
Less: imputed interest		(1,205	)
Total lease obligation	$	7,156

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BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Details) $ in Thousands	3 Months Ended
	Dec. 31, 2023 USD ($) Category Segment	Dec. 31, 2022 USD ($)
Business description [Abstract]
Number of reportable segments | Segment	3
Revenues and revenue recognition [Abstract]
Revenues	$ 41,035	$ 57,044
Logistics [Member]
Revenues and revenue recognition [Abstract]
Number of primary service categories | Category	4
Revenues	$ 35,215	51,800
Logistics [Member] | Trucking [Member]
Revenues and revenue recognition [Abstract]
Revenues	17,997	22,761
Logistics [Member] | Air [Member]
Revenues and revenue recognition [Abstract]
Revenues	6,711	6,239
Logistics [Member] | Ocean [Member]
Revenues and revenue recognition [Abstract]
Revenues	6,448	18,166
Logistics [Member] | Custom Brokerage and Other [Member]
Revenues and revenue recognition [Abstract]
Revenues	$ 4,059	$ 4,634

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ACQUISITIONS, Fiscal 2023 Acquisition (Details) - USD ($) $ in Thousands	May 22, 2023	Mar. 02, 2023	Nov. 01, 2022	Dec. 31, 2023	Sep. 30, 2023
Business Combination, Consideration Transferred [Abstract]
Goodwill				$ 20,317	$ 20,317
Royalty Agreement Asset [Member]
Asset Acquisition [Abstract]
Purchase price	$ 500
IBS [Member]
Business Combination, Consideration Transferred [Abstract]
Aggregate purchase price			$ 3,755
Consideration transferred, cash received			153
Consideration paid in cash			3,000
Due to the stockholder			250
Fair value of consideration transferred			300
Maximum earnout payments due			750
Preliminary working capital adjustment			205
Goodwill			1,468
Identifiable intangibles			$ 1,680
SH [Member]
Business Combination, Consideration Transferred [Abstract]
Aggregate purchase price		$ 600
Consideration paid in cash		500
Due to the stockholder		100
Goodwill		181
Identifiable intangibles		$ 202

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INVENTORY (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Sep. 30, 2023
INVENTORY [Abstract]
Finished goods	$ 1,953	$ 2,095
Work-in-process	922	969
Raw materials	1,781	1,811
Gross inventory	4,656	4,875
Less - reserve for inventory valuation	(28)	(25)
Inventory net	$ 4,628	$ 4,850

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INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Sep. 30, 2023
Intangible Assets, Net [Abstract]
Total intangible assets	$ 32,247		$ 32,247
Less: accumulated amortization	(10,102)		(9,564)
Total intangible assets, net	22,145		22,683
Amortization expense	538	$ 526
Logistics [Member]
Intangible Assets, Net [Abstract]
Total intangible assets	18,174		18,174
Life Sciences [Member]
Intangible Assets, Net [Abstract]
Total intangible assets	6,373		6,373
Manufacturing [Member]
Intangible Assets, Net [Abstract]
Total intangible assets	7,700		7,700
Customer Relationships [Member]
Intangible Assets, Net [Abstract]
Finite lived intangible assets, gross	$ 25,238		25,238
Customer Relationships [Member] | Minimum [Member]
Intangible Assets, Net [Abstract]
Life	10 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	$ 4,559		4,559
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	$ 1,929		$ 1,929
Other [Member] | Minimum [Member]
Intangible Assets, Net [Abstract]
Life	2 years
Other [Member] | Maximum [Member]
Intangible Assets, Net [Abstract]
Life	22 years

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GOODWILL (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Sep. 30, 2023
Composition of Goodwill [Abstract]
Goodwill	$ 20,317	$ 20,317
Logistics [Member]
Composition of Goodwill [Abstract]
Goodwill	9,175	9,175
Life Sciences [Member]
Composition of Goodwill [Abstract]
Goodwill	6,096	6,096
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, 2023	Sep. 30, 2023	Aug. 22, 2023	Jan. 30, 2023	Jan. 29, 2023
Revolving Line of Credit Facility [Abstract]
Outstanding borrowings	$ 17,002	$ 19,709
Santander Bank Facility [Member]
Revolving Line of Credit Facility [Abstract]
Percentage of accounts receivable				90.00%	85.00%
Maturity date of facility	Sep. 21, 2026
Outstanding borrowings	$ 16,252	$ 18,759
Percentage of outstanding borrowings	46.40%	53.60%
Maximum borrowing capacity	$ 35,000	$ 35,000
Effective interest rate	7.68%	7.60%
Santander Bank Facility [Member] | Maximum [Member]
Revolving Line of Credit Facility [Abstract]
Face amount of debt			$ 4,000
Santander Bank Facility [Member] | SOFR [Member]
Revolving Line of Credit Facility [Abstract]
Variable rate term	one-month
Basis spread on variable rate	2.75%

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NOTES PAYABLE - BANKS, First Merchants Bank Credit Facility (Details) - USD ($) $ in Thousands		3 Months Ended
	Apr. 25, 2023	Dec. 31, 2023	Sep. 30, 2023
Note Payable - Bank [Abstract]
Less current portion		$ (716)	$ (715)
Long-term portion		5,197	5,784
First Merchants Bank Credit Facility [Member]
Note Payable - Bank [Abstract]
Capitalized loan fees		349
Total debt		5,913	6,499
Less current portion		(716)	(715)
Long-term portion		$ 5,197	5,784
Revolving Loan [Member]
Long Term Debt [Abstract]
Maximum borrowing capacity	$ 3,000
EBITDA ratio	1.75
Maturity date of facility		Aug. 01, 2027
Outstanding borrowings		$ 250	$ 450
Effective interest rate		8.22%	8.18%
Revolving Loan [Member] | SOFR [Member]
Long Term Debt [Abstract]
Term of variable rate		one-month
Revolving Loan [Member] | SOFR [Member] | Minimum [Member]
Long Term Debt [Abstract]
Basis spread on variable rate	2.75%
Revolving Loan [Member] | SOFR [Member] | Maximum [Member]
Long Term Debt [Abstract]
Basis spread on variable rate	3.50%
Acquisition Loan [Member]
Long Term Debt [Abstract]
Maximum borrowing capacity	$ 5,000
EBITDA ratio	1.75
Maturity date of facility		Apr. 25, 2029
Outstanding borrowings		$ 500	$ 500
Effective interest rate		8.22%	8.18%
Acquisition Loan [Member] | SOFR [Member]
Long Term Debt [Abstract]
Term of variable rate		one-month
Acquisition Loan [Member] | SOFR [Member] | Minimum [Member]
Long Term Debt [Abstract]
Basis spread on variable rate	2.75%
Acquisition Loan [Member] | SOFR [Member] | Maximum [Member]
Long Term Debt [Abstract]
Basis spread on variable rate	3.50%
Term Loan A [Member]
Long Term Debt [Abstract]
Maximum borrowing capacity	$ 6,905
EBITDA ratio	1.75
Maturity date of facility		Apr. 25, 2033
Outstanding borrowings		$ 5,645	$ 6,235
Effective interest rate		8.22%	8.18%
Term Loan A [Member] | SOFR [Member]
Long Term Debt [Abstract]
Term of variable rate		one-month
Term Loan A [Member] | SOFR [Member] | Minimum [Member]
Long Term Debt [Abstract]
Basis spread on variable rate	2.75%
Term Loan A [Member] | SOFR [Member] | Maximum [Member]
Long Term Debt [Abstract]
Basis spread on variable rate	3.50%
Term Loan B [Member]
Long Term Debt [Abstract]
Maximum borrowing capacity	$ 620
Interest rate percentage	4.19%
Maturity date of facility		Jul. 01, 2025
Outstanding borrowings		$ 604	$ 610
Effective interest rate		4.19%	4.19%

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SUBORDINATED PROMISSORY NOTES - RELATED PARTY, Subordinated Promissory Note (Details) $ in Thousands		1 Months Ended	3 Months Ended
	Dec. 01, 2023 USD ($)	Jun. 30, 2022 USD ($)	Dec. 31, 2023 USD ($) qtr Installment Note	Dec. 31, 2022 USD ($)	Sep. 30, 2023 USD ($)
Long-term Debt, Excluding Current Maturities [Abstract]
Current portion of subordinated promissory notes			$ 1,395		$ 1,988
Long-term portion of subordinated promissory notes			3,480		3,424
Gain on extinguishment of debt			$ 21	$ 0
Aves Labs, Inc. [Member] | ICT Subordinated Promissory Note [Member]
Long-term Debt, Excluding Current Maturities [Abstract]
Annual fixed interest rate percentage			0.50%
Face amount of debt			$ 1,850
Number of consecutive installments | Installment			16
Frequency of periodic payment			quarterly
Debt instrument maturity date			Dec. 04, 2024
Outstanding amount			$ 221		312
Current portion of subordinated promissory notes			$ 28		288
Long-term portion of subordinated promissory notes					24
Janel Group, Inc. [Member] | ELFS Subordinated Promissory Notes [Member]
Long-term Debt, Excluding Current Maturities [Abstract]
Number of subordinated promissory notes | Note			4
Annual fixed interest rate percentage			4.00%
Face amount of debt			$ 6,000
Number of consecutive installments | Installment			12
Frequency of periodic payment			quarterly
Number of consecutive calendar quarters of payment from October 15, 2021 | qtr			8
Number of consecutive calendar quarters of payment from October 15, 2023 | qtr			12
Outstanding amount			$ 5,575		5,100
Current portion of subordinated promissory notes			1,174		1,700
Working capital adjustment	$ 900	$ 900
Long-term portion of subordinated promissory notes		$ 5,100	3,480		$ 3,400
Debt maturity extension	2 years
Increase in working capital adjustment	$ 6,000
Subordinated net outstanding amount	4,654		4,654
Unamortized debt discount	921		$ 921
Gain on extinguishment of debt	$ 21

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SUBORDINATED PROMISSORY NOTES - RELATED PARTY, Amounts Outstanding (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Sep. 30, 2023
Subordinated Promissory Notes [Abstract]
Less current portion of subordinated promissory notes	$ (1,395)	$ (1,988)
Long-term portion of subordinated promissory notes	3,480	3,424
Subsidiary of Common Parent [Member] | ICT and ELFS Subordinated Promissory Notes [Member]
Subordinated Promissory Notes [Abstract]
Total subordinated promissory notes	4,875	5,412
Less current portion of subordinated promissory notes	(1,395)	(1,988)
Long-term portion of subordinated promissory notes	$ 3,480	$ 3,424

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STOCKHOLDERS' EQUITY (Details) - Series C Cumulative Preferred Stock [Member] - $ / shares			3 Months Ended	12 Months Ended
	Mar. 31, 2022	Oct. 16, 2017	Dec. 31, 2023	Sep. 30, 2023
Series C Cumulative Preferred Stock [Abstract]
Preferred stock, dividend rate	5.00%	7.00%	5.00%	5.00%
Share price (in dollars per share)		$ 500
Annual increase in dividend rate		2.00%	1.00%
Period of increase in dividend rate			4 years
Maximum [Member]
Series C Cumulative Preferred Stock [Abstract]
Preferred stock, dividend rate		13.00%	9.00%

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STOCK-BASED COMPENSATION, Expense and Authorized (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Sep. 21, 2021	Sep. 20, 2021	Oct. 30, 2013
Selling, General and Administrative Expenses [Member]
Share-based Compensation [Abstract]
Stock-based compensation	$ 68	$ 51
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

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STOCK-BASED COMPENSATION, Employee Stock Options (Details) - Stock Options [Member] - Employee [Member] - USD ($)	3 Months Ended	12 Months Ended
	Dec. 31, 2023	Sep. 30, 2023
Number of Options [Roll Forward]
Outstanding, beginning balance (in shares)	40,993
Granted (in shares)	12,500
Expired (in shares)	(3,500)
Outstanding, ending balance (in shares)	49,993	40,993
Exercisable, ending balance (in shares)	24,162
Weighted Average Exercise Price [Roll Forward]
Outstanding, beginning balance (in dollars per share)	$ 22.53
Granted (in dollars per share)	28.25
Expired (in dollars per share)	3.25
Outstanding, ending balance (in dollars per share)	25.31	$ 22.53
Exercisable, ending balance (in dollars per share)	$ 12.63
Weighted Average Remaining Contractual Term [Abstract]
Outstanding	7 years 7 months 6 days	6 years 7 months 6 days
Granted	9 years 9 months 18 days
Exercisable	6 years
Aggregate Intrinsic Value [Abstract]
Outstanding, beginning balance	$ 482,490
Granted	0
Expired	0
Outstanding, ending balance	305,630	$ 482,490
Exercisable, ending balance	$ 298,970
Share price (in dollars per share)	$ 25
Total unrecognized compensation expense	$ 479,000
Weighted-average vesting period	1 year 8 months 23 days

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STOCK-BASED COMPENSATION, Liability Classified Share-based Awards (Details) - Stock Options [Member] - Indco [Member] - shares	3 Months Ended	12 Months Ended
	Dec. 31, 2023	Sep. 30, 2023
Number of Options [Roll Forward]
Granted (in shares)	0	0
Exercised (in shares)	0	0

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INCOME PER COMMON SHARE, Reconciliation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
INCOME PER COMMON SHARE [Abstract]
Net income	$ 276	$ 360
Preferred stock dividends	(72)	(72)
Net Income Available to Common Stockholders	$ 204	$ 288
Common Shares [Abstract]
Basic - weighted average common shares (in shares)	1,186,300	1,186,300
Effect of dilutive securities [Abstract]
Stock options (in shares)	15,800	21,900
Diluted - weighted average common stock (in shares)	1,202,100	1,208,200
Income per Common Share - Basic [Abstract]
Net income (in dollars per share)	$ 0.23	$ 0.3
Preferred stock dividends (in dollars per share)	(0.06)	(0.06)
Net income available to common stockholders (in dollars per share)	0.17	0.24
Income per Common Share - Diluted [Abstract]
Net income (in dollars per share)	0.23	0.3
Preferred stock dividends (in dollars per share)	(0.06)	(0.06)
Net income available to common stockholders (in dollars per share)	$ 0.17	$ 0.24
Number of anti-dilutive securities (in shares)	22,500	10,000

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INCOME TAXES (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Reconciliation of Income Tax [Abstract]
Federal taxes at statutory rates	$ 98	$ 107
Permanent differences	58	1
State and local taxes, net of Federal benefit	36	39
Total	$ 192	$ 147

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BUSINESS SEGMENT INFORMATION (Details) $ in Thousands	3 Months Ended
	Dec. 31, 2023 USD ($) Segment	Dec. 31, 2022 USD ($)	Sep. 30, 2023 USD ($)
Segment Reporting [Abstract]
Number of reportable segments | Segment	3
Revenues	$ 41,035	$ 57,044
Forwarding expenses and cost of revenues	26,890	42,127
Gross profit	14,145	14,917
Selling, general and administrative	12,605	13,011
Amortization of intangible assets	538	526
Income from Operations	1,002	1,380
Interest expense	524	474
Identifiable assets	91,502	111,564	$ 96,834
Capital expenditures, net of disposals	53	80
Corporate [Member]
Segment Reporting [Abstract]
Revenues	0	0
Forwarding expenses and cost of revenues	0	0
Gross profit	0	0
Selling, general and administrative	1,206	1,199
Amortization of intangible assets	538	526
Income from Operations	(1,744)	(1,725)
Interest expense	0	0
Identifiable assets	44,713	46,942
Capital expenditures, net of disposals	0	0
Logistics [Member] | Reportable Segments [Member]
Segment Reporting [Abstract]
Revenues	35,215	51,800
Forwarding expenses and cost of revenues	25,214	40,267
Gross profit	10,001	11,533
Selling, general and administrative	8,865	9,528
Amortization of intangible assets	0	0
Income from Operations	1,136	2,005
Interest expense	357	334
Identifiable assets	31,128	49,220
Capital expenditures, net of disposals	18	68
Life Sciences [Member] | Reportable Segments [Member]
Segment Reporting [Abstract]
Revenues	3,481	2,838
Forwarding expenses and cost of revenues	606	728
Gross profit	2,875	2,110
Selling, general and administrative	1,750	1,510
Amortization of intangible assets	0	0
Income from Operations	1,125	600
Interest expense	78	37
Identifiable assets	11,786	11,317
Capital expenditures, net of disposals	35	10
Manufacturing [Member] | Reportable Segments [Member]
Segment Reporting [Abstract]
Revenues	2,339	2,406
Forwarding expenses and cost of revenues	1,070	1,132
Gross profit	1,269	1,274
Selling, general and administrative	784	774
Amortization of intangible assets	0	0
Income from Operations	485	500
Interest expense	89	103
Identifiable assets	3,875	4,085
Capital expenditures, net of disposals	$ 0	$ 2

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FAIR VALUE MEASUREMENTS, Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) $ / shares in Units, $ in Thousands				3 Months Ended
	Oct. 23, 2023	Oct. 04, 2023	Aug. 19, 2022	Dec. 31, 2023	Dec. 01, 2023	Sep. 30, 2023
Liabilities [Abstract]
Common stock, par value (in dollars per share)				$ 0.001		$ 0.001
Contingent earnout liability, current				$ 740		$ 592
Contingent earnout liability, noncurrent				1,996		1,738
Recurring Basis [Member]
Liabilities [Abstract]
Contingent earnout liabilities				2,735		2,330
Recurring Basis [Member] | Level 1 [Member]
Assets [Abstract]
Investment in Rubicon at fair value				864		1,573
Liabilities [Abstract]
Contingent earnout liabilities				2,435		0
Recurring Basis [Member] | Level 3 [Member]
Liabilities [Abstract]
Contingent earnout liabilities				$ 300		$ 2,330
Janel Group, Inc. [Member] | ELFS Subordinated Promissory Notes [Member]
Liabilities [Abstract]
Fixed earnout payments					$ 1,078
Rubicon Technology, Inc. [Member]
Liabilities [Abstract]
Common stock shares acquired (in shares)			1,108,000
Common stock, par value (in dollars per share)			$ 0.001
Share price (in dollars per share)			$ 20
Percentage of issued and outstanding shares of Rubicon				46.60%		46.60%
Cash distribution (in dollars per share)		$ 1.1
Cash distribution record date				Oct. 23, 2023
Dividends received	$ 1,219
Fair value adjustments to Rubicon investment	$ 709

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FAIR VALUE MEASUREMENTS, Changes in Fair Value of Investment in Rubicon Measured at Fair Value on Recurring Basis Utilizing Level 1 Assumptions (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Dec. 31, 2023	Sep. 30, 2023
Changes in Fair Value of Investment [Abstract]
Balance beginning of period	$ 1,573
Balance end of period	864	$ 1,573
Recurring Basis [Member] | Level 1 [Member]
Changes in Fair Value of Investment [Abstract]
Balance beginning of period	1,573	2,371
Fair value adjustment to Rubicon investment	(709)	(798)
Balance end of period	$ 864	$ 1,573

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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) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Sep. 30, 2023
Change in contingent consideration measured at fair value recurring basis using significant unobservable inputs (Level 3) [Roll Forward]
Fair value adjustment of contingent earnout liabilities	$ 405	$ 0
Transfer to level 1	(2,435)		$ 0
Recurring [Member] | Level 3 [Member] | Contingent Earnout Liabilities [Member]
Change in contingent consideration measured at fair value recurring basis using significant unobservable inputs (Level 3) [Roll Forward]
Balance beginning of period	2,330	$ 4,580	4,580
Fair value of contingent consideration recorded in connection with business combinations	0		300
Earnout payment	0		(1,693)
Fair value adjustment of contingent earnout liabilities	405		(857)
Balance at end of year	$ 300		$ 2,330

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LEASES (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Sep. 30, 2023
Lease Cost [Abstract]
Operating lease cost	$ 599	$ 551
Short-term lease cost	100	20
Total lease cost	699	571
Rent expense	699	$ 571
Right of use assets	6,853		$ 7,460
Current portion of operating lease liabilities	1,935		2,020
Long-term lease liabilities	$ 5,221		$ 5,689
Weighted-average remaining lease term - operating leases	5 years 9 months 18 days		5 years 10 months 24 days
Weighted-average discount rate - operating leases	4.53%		4.01%
Future Minimum Lease Commitments under Non-cancellable Leases [Abstract]
2024	$ 1,985
2025	1,523
2026	1,193
2027	1,215
2028	978
Thereafter	1,467
Total undiscounted loan payments	8,361
Less: imputed interest	(1,205)
Total lease obligation	$ 7,156
Minimum [Member]
Operating lease [Abstract]
Operating lease term	1 month
Maximum [Member]
Operating lease [Abstract]
Operating lease term	123 months

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SUBSEQUENT EVENTS (Details) - First Merchants Bank Credit Facility [Member] - Subsequent Event [Member] $ in Thousands	Jan. 10, 2024 USD ($)
Subsequent Events [Abstract]
Maturity term of facility	14 days
Minimum [Member]
Subsequent Events [Abstract]
Base amount	$ 1,000