UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For
the quarterly period ended
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from ____________ to ____________
Commission
file number:
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of | (I.R.S. Employer | |
| incorporation or organization) | Identification No.) |
(Address of principal executive offices, including zip code)
Tel:
(Registrant’s telephone number, including area code)
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES ☐ NO ☒
Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. YES ☐ NO ☒
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and emerging growth company in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| ☒ | Smaller reporting company | ||
| Emerging growth company |
If
an emerging growth company, indicate by check mark if this registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. Indicate by check mark
whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☒
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate
by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
As of August 14, 2025, the Company had shares of common stock, $ par value, issued and outstanding.
Documents Incorporated by Reference: None.
CALLAN JMB INC.
FORM 10-Q
TABLE OF CONTENTS
| 2 |
CALLAN JMB INC.
(Formerly known as Coldchain Technology Services, LLC)
CONDENSED CONSOLIDATED BALANCE SHEETS
| June 30, 2025 (Unaudited) | December 31, 2024 | |||||||
| Assets | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable, net of allowance for credit losses of $ | ||||||||
| Inventory | ||||||||
| Related party loans | ||||||||
| Tax refund receivable | ||||||||
| Prepaid insurance | ||||||||
| Other current assets | ||||||||
| Deferred offering costs | ||||||||
| Total current assets | ||||||||
| Right of use assets – operating lease | ||||||||
| Property and equipment, net of accumulated depreciation of $ | ||||||||
| Security deposit | ||||||||
| Total assets | $ | $ | ||||||
| Liabilities and Stockholders’ Equity | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued expenses | ||||||||
| Corporate taxes payable | ||||||||
| Deferred revenue | ||||||||
| Operating lease liabilities – current | ||||||||
| Total current liabilities | ||||||||
| Operating lease liabilities – non-current | ||||||||
| Deferred tax liabilities | ||||||||
| Total long-term liabilities | ||||||||
| Total liabilities | ||||||||
| Commitments and Contingencies – Note 10 | ||||||||
| Stockholders’ Equity | ||||||||
| Preferred stock - authorized shares, $ par value; issued and outstanding as of June 30, 2025 and December 31, 2024 | $ | $ | ||||||
| Common stock - authorized shares, par value $ par value; issued and outstanding as of June 30, 2025 and December 31, 2024 | ||||||||
| Additional Paid in Capital | ||||||||
| Accumulated Deficit | ( | ) | ( | ) | ||||
| Total Stockholders’ Equity | ||||||||
| Total Liabilities and Stockholders’ Equity | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 3 |
CALLAN JMB INC.
(Formerly known as Coldchain Technology Services, LLC)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
| Three months ended | Six months ended | |||||||||||||||
| June 30, 2025 | June 30, 2024 | June 30, 2025 | June 30, 2024 | |||||||||||||
| Revenue | $ | $ | $ | $ | ||||||||||||
| Cost of revenue | ||||||||||||||||
| Gross profit | ||||||||||||||||
| Selling, general and administrative expenses | ||||||||||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income (expenses) | ||||||||||||||||
| Interest income | ||||||||||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ||||||||||
| Total other income (expenses) | ||||||||||||||||
| Loss before income taxes | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Provision (benefit) for income taxes | ( | ) | ( | ) | ( | ) | ||||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Weighted average common shares outstanding - basic and diluted (See Notes 3 and 4) | ||||||||||||||||
| Net loss per common share - basic and diluted (See Notes 3 and 4) | $ | ) | $ | ) | $ | ) | $ | ) | ||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 4 |
CALLAN JMB INC.
(Formerly known as Coldchain Technology Services, LLC)
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(UNAUDITED)
| Preferred Stock | Common Stock | Additional Paid in | Accumulated | Stockholders’ | ||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Equity | ||||||||||||||||||||||
| January 1, 2025 | $ | $ | $ | ( | ) | $ | | |||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Common stock issued in initial public offering, net of costs | - | |||||||||||||||||||||||||||
| Common stock issued in initial public offering (over allotment), net of costs | - | |||||||||||||||||||||||||||
| Stock based compensation | - | - | ||||||||||||||||||||||||||
| March 31, 2025 | ( | ) | ||||||||||||||||||||||||||
| Immaterial revisions (See Note 2) | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Stock based compensation | - | - | ||||||||||||||||||||||||||
| Restricted stock unit awards vesting | - | ( | ) | |||||||||||||||||||||||||
| June 30, 2025 | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||
| Preferred Stock | Common Stock | Total Members | Additional Paid in | Accumulated | Stockholders’ | |||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Capital | Deficit | Equity | |||||||||||||||||||||||||
| January 1, 2024 | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Distributions | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Membership exchange for common stock (See Note 3) | - | ( | ) | |||||||||||||||||||||||||||||
| March 31, 2024 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| June 30, 2024 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 5 |
CALLAN JMB INC.
(Formerly known as Coldchain Technology Services, LLC)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
| Six months ended | ||||||||
| June 30, 2025 | June 30, 2024 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustment to reconcile net loss to net cash provided by (used in) operating activities: | ||||||||
| Depreciation | ||||||||
| Provision (recoveries) for credit losses | ( | ) | ||||||
| Stock based compensation | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ||||||||
| Inventory | ( | ) | ( | ) | ||||
| Tax refund receivable | ||||||||
| Other current assets | ( | ) | ||||||
| Operating lease liabilities | ||||||||
| Accounts payable and accrued expenses | ||||||||
| Deferred revenue | ( | ) | ( | ) | ||||
| Deferred tax liabilities | ( | ) | ||||||
| Corporate taxes payable | ( | ) | ||||||
| Net cash provided by (used in) operating activities | $ | ( | ) | $ | ||||
| Cash flows used in investing activity: | ||||||||
| Purchase of property and equipment | ( | ) | ( | ) | ||||
| Net cash used in investing activity | $ | ( | ) | $ | ( | ) | ||
| Cash flows from (used in) financing activities: | ||||||||
| Related party loans | ( | ) | ||||||
| Deferred offering costs | ( | ) | ||||||
| Partner distributions | ( | ) | ||||||
| Decrease in note payable | ( | ) | ||||||
| Proceeds from IPO and overallotment, net | ||||||||
| Net cash provided by (used in) financing activities | $ | $ | ( | ) | ||||
| Increase (decrease) in cash and cash equivalents | ( | ) | ||||||
| Cash and cash equivalents at beginning of period | ||||||||
| Cash and cash equivalents at end of period | $ | $ | ||||||
| Supplemental disclosures of cash flow information: | ||||||||
| Cash paid for interest | $ | $ | ||||||
| Supplemental Schedule of Non-Cash Financing and Investing Activities: | ||||||||
| Right of use assets acquired and operating lease liabilities | $ | $ | ||||||
| Right-of-use assets and operating lease liabilities due to lease modifications | $ | |||||||
| Membership exchange for common stock | $ | |||||||
| Fair value of Stock Warrants issued at IPO | $ | |||||||
| Deferred offering costs charged to additional paid-in-capital | $ | |||||||
| Restricted stock unit awards vesting | $ | |||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 6 |
CALLAN JMB INC.
(Formerly known as Coldchain Technology Services, LLC)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 – NATURE OF OPERATIONS
Callan
JMB Inc. (which may be referred to as “Callan,” “Callan JMB,” , “CJMB”, “Company,” “we,”
“us,” or “our”) was formed on January 24, 2024, in the state of Nevada for the purposes of reorganizing and becoming
a holding company for Coldchain Technology Services, LLC and Callan JMB Services (India) Private Limited. CTS was formed on December
27, 2006, in the state of Texas and is our main operating subsidiary engaged in a vertically integrated logistics and fulfillment ecosystem
that utilizes advanced predictive technology for the supply chain by guaranteeing the safety, effectiveness, and potency of every product
handled to ensure product integrity, and to provide immediate response in time sensitive industries while ensuring environmental responsibility.
Callan JMB Services (India) Private Limited is domiciled in Pune, Maharashtra, India and is
The interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements for the year ended December 31, 2024 and notes thereto contained in the Company’s Form 10-K filed with the Securities and Exchange Commission. The condensed consolidated balance sheet at December 31, 2024 has been derived from the audited financial statements at that date. The results of operations for the three and six months ended June 30, 2025 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2025.
NOTE 2 – RECLASSIFICATIONS AND REVISIONS TO MARCH 31, 2025 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Reclassifications
Certain prior year amounts in the Consolidated Financial Statements and the notes thereto have been reclassified where necessary to conform to the current period’s presentation. These reclassifications did not affect the prior period’s total assets, total liabilities, stockholders’ equity, net income, or net cash provided by operating activities.
Revisions to March 31, 2025 Condensed Consolidated Financial Statements
During the preparation of the financial statements for the three months and six months period ended June 30, 2025, the Company identified revisions in the previously issued financial statements for the three months ended March 31, 2025. These revisions related to lease modifications during the three months ended March 31, 2025 as well as separate revisions related to the timing of expense recognition for invoices received and certain prepaid assets. These items were identified as part of management’s review of the financial results for the three and six months ended June 30, 2025. The amounts of the revisions to the March 31, 2025 consolidated financial statements were not deemed to be material by management.
The revisions to the three months ended March 31, 2025 consolidated financial statements are as follows:
| Financial Statement Line Item | As Previously Reported | Revisions | As Revised | |||||||||
| Right of use asset | $ | $ | $ | |||||||||
| Other current assets | $ | $ | $ | |||||||||
| Total Assets | $ | $ | $ | |||||||||
| Operating lease liabilities – current | $ | $ | $ | |||||||||
| Operating lease liabilities - non-current | $ | $ | $ | |||||||||
| Accrued expenses | $ | $ | $ | |||||||||
| Total Liabilities | $ | $ | $ | |||||||||
| Retained earnings | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
| Total Equity | $ | $ | ( | ) | $ | |||||||
NOTE 3 – REORGANIZATION
Pursuant
to the Reorganization Agreement dated February 2, 2024, and for the six months ended June 30, 2024, each member of CTS exchanged
Pursuant to an Exchange and Reorganization Agreement, dated as of November 14, 2024, among the Company and all of the existing stockholders of the Company, such stockholders have exchanged all their existing shares for new shares at a ratio of 0.6 new share for 1 existing share (“reverse stock split”). As a result of the exchange, the total number of shares of Company stock outstanding was reduced from shares to shares. As a result of this reverse stock split, we have retroactively presented the outstanding number of shares and related earnings per-share calculations for the three months and six months ended June 30, 2024 comparative period consolidated financial statements.
| 7 |
CALLAN JMB INC.
(Formerly known as Coldchain Technology Services, LLC)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 3 – REORGANIZATION (CONTINUED)
The following unaudited pro forma financial information has been prepared to reflect the effects of the reorganization of CTS from a partnership to a C corporation on February 14, 2024. The pro-forma financial information presents the financial results of the Company as if it had been taxed as a C corporation for the six months ended June 30, 2024.
Callan JMB
(formerly known as Coldchain Technology Services, LLC)
Balance Sheets
| Unaudited Historical | Unaudited Pro-forma with tax accrual | |||||||
| June 30, 2024 | June 30, 2024 | |||||||
| Assets | ||||||||
| Total assets | $ | $ | ||||||
| Liabilities and Stockholders’ Equity | ||||||||
| Liabilities: | ||||||||
| Corporate taxes payable | ||||||||
| Related party loans | ||||||||
| Total liabilities | ||||||||
| Stockholders’ Equity | ||||||||
| Common stock | ||||||||
| Additional paid in capital | ||||||||
| Retained earnings (deficit) | ( | ) | ( | ) | ||||
| Total Stockholders’ Equity | ||||||||
| Total Liabilities and Stockholders’ Equity | $ | $ | ||||||
Assumptions for each of the pro-forma balance sheets are below:
a. The Company was a C Corporation as of January 1, 2022.
b.
The pro forma balance sheets include an accrual for federal tax and state corporate taxes at a “blended rate” of
c.
Stockholders/loan the Company $
d. The pro-forma adjustments do not include adjustments for deferred tax assets or liabilities due to the immateriality of the temporary differences at the date of the reorganization and are expected to reverse in the near term with minimal impact on the financial statements.
e. No other financial data is being shown as there is no impact to the conversion to a C-Corp.
Pro forma income statements showing the pro-forma income taxes, net earnings per share for the six months June 30, 2024 are produced below. This information is unaudited.
| Unaudited Actual | Unaudited Pro-forma with tax accrual | |||||||
| June 30, 2024 | June 30, 2024 | |||||||
| Revenue | $ | $ | ||||||
| Operating loss | ( | ) | ( | ) | ||||
| Provision for income taxes | ( | ) | ( | ) | ||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Basic and diluted loss per common share | $ | ) | $ | ) | ||||
NOTE 4 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation and Principles of consolidation
The accompanying consolidated financial statements and related notes have been prepared in accordance with “U.S. GAAP” and present the consolidated financial statements of the Company and its wholly owned subsidiary. All intercompany transactions and balances are eliminated in consolidation.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions about future events that affect the amounts reported in the consolidated financial statements and the accompanying notes. Management bases its estimates on historical experience and other assumptions that it believes to be reasonable at the time. Actual results could differ from those estimates and any such differences may be material to the financial statements. Significant estimates are contained in the accompanying financial statements for the useful lives for depreciation and amortization of long-lived assets, allowance for credit losses, stock based compensation and the incremental borrowing rate used in determining the right-of-use assets and operating lease liabilities.
| 8 |
CALLAN JMB INC.
(Formerly known as Coldchain Technology Services, LLC)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 4 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Cash and Cash Equivalents
The
Company deposits its cash with high credit quality financial institutions. The Company’s accounts at these institutions are insured
by the Federal Deposit Insurance Corporation (“FDIC”) up to $
Accounts Receivable
Accounts
receivable are recorded at the invoiced amount, which is the amount the Company expects to collect from its customers. Generally, payment
is due from customers within 30-90 days of the invoice date. On a regular basis, the Company evaluates its accounts receivable and establishes
the allowance for credit losses based on an evaluation of certain criteria and evidence of collection uncertainty including historical
collection trends, reasonable expectations of future collections, current economic trends and changes in customer payment patterns. Past-due
receivable balances are written off when the Company’s collection efforts have been deemed unsuccessful. The Company maintains
an allowance for credit losses to reserve for potential uncollectible receivables. The allowance for credit losses as of June 30, 2025,
and December 31, 2024, was $
Credit Concentration
The concentration of credit risks in accounts receivable is due to certain large customers comprising the Company’s customer base throughout North America. The Company maintains policies over credit extension that include credit evaluations, credit limits and collection monitoring procedures on a customer-by-customer basis. However, the Company generally does not require collateral before services are performed.
The Company has several customers for the three and six months ended June 30, 2025 and 2024 that make up in excess of 10% of revenue as follows:
| Three Months Ended | Six Months Ended | |||||||||||||||||
| Customer | June 30, 2025 | June 30, 2024 | June 30, 2025 | June 30, 2024 | ||||||||||||||
| 1 | % | % | % | % | ||||||||||||||
| 2 | % | % | % | % | ||||||||||||||
| 3 | % | % | % | % | ||||||||||||||
The Company has several customers as of June 30, 2025 and December 31, 2024 that make up in excess of 10% of accounts receivable as follows:
| Customer | 2025 | 2024 | ||||||||
| 1 | % | % | ||||||||
| 2 | % | % | ||||||||
| 3 | % | % | ||||||||
| 4 | % | % | ||||||||
The Company has several vendors as of June 30, 2025 and December 31, 2024 that make up in excess of 10% of accounts payable as follows:
| Vendor | 2025 | 2024 | ||||||||
| 1 | % | % | ||||||||
| 2 | % | % | ||||||||
| 3 | % | % | ||||||||
| 4 | % | % | ||||||||
The Company has one vendor for the three and six months ended June 30, 2025 and 2024 that make up equal to or more than 10% of services rendered to us as follows:
| Three Months Ended | Six Months Ended | |||||||||||||||||
| Vendor | June 30, 2025 | June 30, 2024 | June 30, 2025 | June 30, 2024 | ||||||||||||||
| 1 | % | % | ||||||||||||||||
| 9 |
CALLAN JMB INC.
(Formerly known as Coldchain Technology Services, LLC)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 4 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Inventory
Inventory is stated at the lower of cost (using the first-in, first-out method (“FIFO”)) or net realizable value. We continually analyze our slow moving and excess inventories. Based on historical and projected sales volumes and anticipated selling prices, we determined that establishing a reserve was not necessary at this time. Inventory that is in excess of current and projected use is reduced by an allowance to a level that approximates its estimate of future demand. Products that are determined to be obsolete are written down to net realizable value. The Company’s inventory is comprised of raw materials for customer packaging needs as follows:
| June 30, 2025 | December 31, 2024 | |||||||
| Raw materials | $ | $ | ||||||
Property and Equipment
Property and equipment, net, is stated at cost less accumulated depreciation. Expenditures for major renewals and improvements that extend the life or usefulness of the asset are capitalized. Items of an ordinary repair or maintenance nature are charged directly to operating expense as incurred. During the construction and development period of an asset, the costs incurred, including interest expense, are classified as construction-in-progress. When the asset is ready for its intended use, the asset is reclassified to an appropriate asset classification and depreciation, or amortization commences.
The Company depreciates and amortizes the capitalized cost of these assets, using the straight-line method, as follows:
Asset Classification:
Computer
equipment
Furniture
and fixtures
Leasehold Improvements
The
Company recognized depreciation expense of $
The Company tests for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. An impairment in the carrying value of long-lived assets is recognized if the expected future undiscounted cash flows derived from the assets, or group of assets, are less than their carrying value. The Company did not record any impairment charges related to long-lived assets in the periods presented.
Revenue Recognition
The Company recognizes revenue when control of the promised goods or services is transferred to the Company’s customers. Revenue is recorded at the transaction price, which is the amount that reflects the consideration the Company expects to receive in exchange for providing the goods or services. The Company’s primary performance obligations in our contracts with customers are to provide services related to emergency preparedness or to deliver specialty packaging. Most of the Company’s revenues are for services, which are recognized over time as the related time and materials are incurred at contractually agreed-upon rates. Product revenues are recognized at a point in time when the products are delivered and control transfers to the customer. The Company’s payment terms vary by the type of customer and the products or services offered. The periods between invoicing and when payments are due are not significant. Amounts billed to customers related to shipping and handling are classified as revenue and the Company’s shipping and handling costs are included in costs of revenues.
Disaggregation of Revenue
The following table presents our disaggregated revenues by distribution channel:
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| Sales by distribution channel: | 2025 | 2024 | 2025 | 2024 | ||||||||||||
| Emergency preparedness | $ | $ | $ | $ | ||||||||||||
| Specialty packaging | ||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||
| 10 |
CALLAN JMB INC.
(Formerly known as Coldchain Technology Services, LLC)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 4 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| Sales by customer type: | 2025 | 2024 | 2025 | 2024 | ||||||||||||
| Governmental | $ | $ | $ | $ | ||||||||||||
| Non-governmental | ||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||
Emergency preparedness
We provide comprehensive services primarily to state and local governments. These services include managing their building sites, medical stockpiles of equipment, supplies and responding to state or local emergencies. We also provide Quality Control/Assurance to safeguard vaccines, medical supplies, and equipment. Revenue is recognized when services are rendered or medical supplies are shipped.
Specialty Packaging.
Our specialty temperature-regulating packaging solutions provide a better thermal system to maintain and protect products and ensure peak customer experience. In utilizing this packaging, customers yield the benefits of lower costs and overhead while improving process, agility, velocity, accuracy, and repeatability of complex fulfillment networks. Revenue is recorded when products are delivered, or services are rendered. Additionally, it also includes amounts billed to customers related to shipping and handling are classified as revenue and the Company’s shipping and handling costs are included in costs of revenues.as well as the Company’s contract with a customer for cloud-based temperature monitoring software. The customer paid their contract in advance and therefore revenue is earned monthly over the term of the contract.
Stock Warrants
During the six months ended June 30, 2025, the Company granted stock warrants to various individuals of the underwriting firm that assisted the Company with its initial public offering on February 4, 2025. The stock warrants were issued in lieu of cash for a portion of their services. The Company accounts for its warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in ASC 480, “Distinguishing Liabilities from Equity” and ASC 815, “Derivatives and Hedging”. The assessment considers whether the warrants are freestanding financial instruments that would require classification as a liability under ASC 480, as well as whether the warrants qualify for equity classification or require liability classification after consideration of the guidance and criteria outlined in ASC 815, including whether the warrants are indexed to the Company’s own common shares and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions that impact classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance. For issued warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. As of June 30, 2025, the Company’s consolidated balance sheet included equity classified warrants, reported as part of the additional paid in capital.
The Company provides stock-based compensation to its employees and Board of Directors. The Company is required to exercise judgment and make estimates when determining the (i) fair value of each award granted and (ii) projected number of awards expected to vest. The Company calculates the fair value of all stock-based awards at the date of grant using the Black-Scholes option-pricing model for stock options and Monte Carlo simulation model for market-based awards. The Company uses the straight-line method to amortize this fair value as compensation cost over the requisite service period. Any forfeitures are recognized as they occur.
| 11 |
CALLAN JMB INC.
(Formerly known as Coldchain Technology Services, LLC)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 4 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
| June 30, 2025 | June 30, 2024 | |||||||
| Stock Options | ||||||||
| Restricted Stock Awards | ||||||||
| Stock Warrants | ||||||||
| Total | ||||||||
Cost of Revenues
Our cost of revenue primarily includes the amounts paid to outside service providers, monitoring, direct and indirect labor, warehouse rent and other related expenses.
Advertising Expense
Advertising
costs primarily consist of trade shows, other promotional expenses and the cost to retain our marketing firm. Advertising costs are expensed
as incurred. Advertising expense for the three months ended June 30, 2025 and 2024 was $
Deferred Offering Costs
Deferred
offering costs consist of investment banking fees, professional fees and other expenses incurred through the balance sheet date that
are directly related to the IPO and were charged to Additional Paid in Capital upon the completion of the IPO. As of June 30, 2025 and
December 31, 2024, the Company had deferred offering costs of $ and $
Deferred Revenue
Deferred
revenue represents customer billings for services that are not yet rendered and is primarily related to customer invoices billed before
services are rendered and for billings of annual or multi-year service contracts. As of June 30, 2025 and December 31, 2024, the Company
has deferred revenue of $
| 12 |
CALLAN JMB INC.
(Formerly known as Coldchain Technology Services, LLC)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 4 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Income Tax
Prior to the reorganization as described in Note 1, the Company’ historical operations were contained within a limited liability company. Accordingly, under the Internal Revenue Code, all taxable income or loss flowed through to its members until February 14, 2024. Therefore, no provision for federal income tax had been recorded in the accompanying financial statements for January 2024 and through February 14, 2024. Income from the Company was reported and taxed to the members on their individual tax returns. However, the Company has provided a provision for taxes in certain states that require an entity level tax.
The Company provides for income taxes and the related accounts under the asset and liability method. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates expected to be in effect during the year in which the basis differences reverse. Valuation allowances are established when management determines it is more likely than not that some portion, or all, of the deferred tax assets will not be realized.
Leases
The
Company’s leases predominantly relate to real estate and equipment, such as vehicles and industrial equipment utilized in
operations. Contracts are reviewed at inception to determine if the arrangement is a lease. The Company generally enters into
long-term real estate leases with one to ten-year terms. In the normal course of business, the Company also enters into short-term
leases having terms of one year or less. These leases are generally equipment leases and storage areas entered into for short
periods of time (e.g., daily, weekly, or monthly) to satisfy immediate and/or short-term operational needs of the business which can
arise based upon the nature of particular services performed. Short term lease expenses relating to these agreements amounted to $
| 13 |
CALLAN JMB INC.
(Formerly known as Coldchain Technology Services, LLC)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 5- ACCRUED EXPENSES
Accrued expenses consist of the following:
| (Unaudited) | ||||||||
| June 30, 2025 | December 31, 2024 | |||||||
| Payroll and related costs | $ | $ | ||||||
| Credit card | ||||||||
| Professional Fees | ||||||||
| Settlement of lawsuit | ||||||||
| Consulting fees | ||||||||
| Storage | ||||||||
| Other | ||||||||
| $ | $ | |||||||
NOTE 6 – RELATED PARTY TRANSACTIONS
Business Partner
Health
Hero America, who is a related party by virtue of common ownership of the Company. There were no transactions with the related party
during the three months and six months ended June 30, 2025 and 2024. As of June 30, 2025, and December 31, 2024, the Company has
$
Cold
Chain Delivery Systems (“CCDS”), who is a related party by virtue of common ownership of the Company. There were no transactions
with the related party during the three and six months ended June 30, 2025 and 2024. As of June 30, 2025, and December 31, 2024,
the Company has $
Outlaw
Run Ranch (“ORR”) is a related party by virtue of common ownership of the Company. The Company pays $
Warehouse
Asset Management is a related party by virtue of common ownership. The Company leases its headquarters, warehouse, other warehouse equipment
and a box truck for $
During
the six months ended June 30, 2025, and the year ended December 31, 2024 the Company made advancements of $
During the six months ended June 30, 2025 the Company awarded stock options to the CEO’s son as compensation for services rendered in a prior period and is subject to the same vesting condition as the Company’s other stock option awards. stock options have vested and fully exercisable as of June 30, 2025 and stock options remain unvested. The key terms and fair value inputs and assumptions utilized for this stock option are disclosed in Note 9. The Company recognized $ as an expense for the six months ended June 30, 2025.
Related party rent expenses are as follows:
| Three Months ended | Six Months ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| Related Party | 2025 | 2024 | 2025 | 2024 | ||||||||||||
| ORR | $ | $ | $ | $ | ||||||||||||
| Warehouse Asset Management | ||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||
The Company has performed an analysis under ASC 810 and has determined that the aforementioned related parties do not qualify as a Variable Interest Entity and therefore those entities were not consolidated in the preparation of the accompanying financial statements.
| 14 |
CALLAN JMB INC.
(Formerly known as Coldchain Technology Services, LLC)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 7 - SEGMENTS
Operating segments are identified as components of an enterprise for which separate discrete financial information is available for evaluation by the Company’s Chief Operating Decision Maker (“CODM”) to make decisions with respect to resource allocation and assessment of performance. To date, the Company has viewed its operations and manages its business as one operating segment. The results of its operating segment are reviewed monthly by the Company’s Chief Executive Officer and President, who has been identified as the CODM.
The CODM regularly assesses the performance of the single operating segment and reporting segment and decides how to allocate resources based on net income calculated on the same basis as net income reported in the Company’s statements of operations. The CODM is also regularly provided with expense information at a level consistent with that disclosed in the Company’s statements of operations.
NOTE 8 - EQUITY
During
February 2025, we completed our initial public offering (“IPO”) of shares
of common stock at a price of $ per
share, generating gross proceeds of $
During
the three months ended June 30, 2025, we did not issue any additional shares of common stock in public offerings. However, equity activity
during the period primarily consisted of the issuance of restricted stock units (“RSUs”) and the related common stock issued
upon their vesting. In connection with previously granted RSUs under the 2025 Equity Incentive Plan, on June 30, 2025, holders of total
of RSUs have fully vested, resulting in the issuance of
As
of June 30, 2025, the Company had the following equity awards outstanding: RSUs: vested RSUs for the six months ended June 30,
2025 in total out of the total . Performance based RSUs: and market based RSUs: . Stock Options: options
outstanding under the Option 2035/02/05 plans. Underwriter Warrants: warrants issued in February 2025 with a five-year term and
an exercise price of $
Overview
The Company grants share-based compensation awards to the Company’s employees as provided by the 2024 Equity Incentive Plan (“2024 Plan”), which was approved by the Company’s stockholders on October 24, 2024. The 2024 Plan provides that grants may be in any of the following forms: incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock, restricted stock units, and performance awards. The 2024 Plan will be administered and interpreted by the Compensation Committee of the Board of Directors. The Compensation Committee has the authority to determine the individuals to whom grants will be made under the 2024 Plan, determine the type, size and terms of the grants, determine the time when grants will be made and the duration of any applicable exercise or restriction period (subject to the limitations of the 2024 Plan) and deal with any other matters arising under the 2024 Plan. All the employees of the Company and its subsidiaries are eligible for grants under the 2024 Plan. Non-employee directors and consultants of the Company are also eligible to receive grants under the 2024 Plan.
The Company has reserved shares of common stock for the granting of such awards. As of June 30, 2025, the Company has exceeded the permissible number of shares to be issued under the 2024 Plan by share awards. The Company plans to file an amended Form S-8 to register shares to account for the overallotment. During the three months ended and six months ended June 30, 2025, the Company recognized share-based compensation expense of $ and $, respectively, which is recorded in selling, general and administrative expenses on the condensed consolidated statement of operations.
| 15 |
CALLAN JMB INC.
(Formerly known as Coldchain Technology Services, LLC)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 9 - SHARE BASED COMPENSATION (CONTINUED)
Stock Options
| Number of Awards | Weighted- Average Exercise Price | Weighted- Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value | |||||||||||||
| Outstanding at January 1, 2025 | - | - | ||||||||||||||
| Granted | $ | - | - | |||||||||||||
| Exercised | - | - | ||||||||||||||
| Forfeited | - | - | ||||||||||||||
| Outstanding at March 31, 2025 | $ | $ | ||||||||||||||
| Granted | - | - | ||||||||||||||
| Exercised | - | - | ||||||||||||||
| Forfeited | ( | ) | - | - | ||||||||||||
| Outstanding at June 30, 2025 | $ | |||||||||||||||
| Outstanding and Exercisable | $ | $ | ||||||||||||||
| June 30, 2025 | ||||
| Expected life (in years) | - years | |||
| Expected stock price volatility | -% | |||
| Risk-free interest rate | %-% | |||
| Dividend rate | % | |||
The risk-free interest rate was based on U.S. Treasury interest rates, the terms of which are consistent with the expected life of the stock options. Expected volatility was derived using the Company’s peer volatility calculated from its peer companies’ volatilities over the time period commensurate with the expected life of the stock options. The expected life for the stock options granted was calculated using the midpoint assumption equal to the time from the grate date to the midpoint of the weighted average vesting date and the expiration date. The Company does not currently pay dividends on its common stock nor does it expect to in the foreseeable future.
The weighted average grant date fair value of options granted was $ per share. As of June 30, 2025, there was $ of unrecognized expense for unvested stock options that is expected to be recognized over a weighted average period of years. During the three months ended and six months ended June 30, 2025, the Company recognized share-based compensation expense of $ and $, respectively, which is recorded in selling, general and administrative expenses on the condensed consolidated statement of operations.
Performance-Based Awards
During the six months ended June 30, 2025, the Company granted performance-based stock awards to its Chief Executive Officer. The grant date fair value was $ per share. The vesting is subject to the Company meeting certain business and financial goals by October 15, 2026. As of June 30, 2025, none of the performance-based awards were probable of vesting and thus no expense was recognized during the three months and six months ended June 30, 2025.
| 16 |
CALLAN JMB INC.
(Formerly known as Coldchain Technology Services, LLC)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 9 - SHARE BASED COMPENSATION (CONTINUED)
Market-Based Awards
During
the six months ended June 30, 2025, the Company granted
market-based stock awards to its Chief Executive Officer. The weighted average grant date fair value was $
per share, which was calculated using a Monte Carlo simulation model. The vesting is subject to the Company meeting certain
market-based targets by October 15, 2026. The Company recognized $
| Performance-Based | Market-Based | |||||||||||||||
| Number of Awards | Weighted- Average Grant Date Fair Value | Number of Awards | Weighted- Average Grant Date Fair Value | |||||||||||||
| Outstanding at January 1, 2025 | ||||||||||||||||
| Granted | $ | $ | ||||||||||||||
| Change in units based on performance | ||||||||||||||||
| Forfeited | ||||||||||||||||
| Outstanding at March 31, 2025 | $ | $ | ||||||||||||||
| Granted | ||||||||||||||||
| Change in units based on performance | ||||||||||||||||
| Forfeited | ||||||||||||||||
| Outstanding at June 30, 2025 | $ | $ | ||||||||||||||
Restricted Stock Units
During the six months ended June 30, 2025, the Company granted restricted stock units (“RSUs”) to its Board of Directors. The RSUs were awarded at a price equal to the market price of the Company’s underlying common stock on the date of grant. One-fourth of the RSUs vests each calendar quarter of 2025. During the three months ended and six months ended June 30, 2025, the Company recognized share-based compensation expense of $ and $, respectively, which is recorded in selling, general and administrative expenses on the condensed consolidated statement of operations. A total of RSUs have fully vested as of June 30, 2025, resulting in the issuance of shares of common stock.
Stock Warrants
| June 30, 2025 | ||||
| Expected life (in years) | years | |||
| Expected stock price volatility | % | |||
| Risk-free interest rate | % | |||
| Dividend rate | % | |||
During the six months ended June 30, 2025, the Company fully recognized the fair value expense of $, which is included with other costs related to the Company’s issuance of common stock and presented as an offset to Additional Paid in Capital in the Condensed Consolidated Balance Sheet.
NOTE 10 - COMMITMENTS AND CONTINGENCIES
Operating Leases
The
Company has various leases that expire between now and 2036. The Company’s right-of-use assets and lease liabilities primarily
represent lease payments that are fixed at the commencement of a lease and variable lease payments that are dependent on an index or
rate. Lease payments are recognized as lease cost on a straight-line basis over the lease term, which is determined as the
non-cancelable period, including periods in which termination options are reasonably certain of not being exercised and periods in
which renewal options are reasonably certain of being exercised. The discount rate is determined using the Company’s estimated
incremental borrowing rate coinciding with the lease term at the commencement of a lease. The estimated incremental borrowing rate
for the Company was determined to be between 3.0% - 10.6%. Rent expense for the three months ended June 30, 2025 and 2024 was $
| 17 |
CALLAN JMB INC.
(Formerly known as Coldchain Technology Services, LLC)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 10 - COMMITMENTS AND CONTINGENCIES (Continued)
Operating Leases (Continued)
On
October 21, 2024, the Company entered into a long-term lease agreement for corporate office space with a third party. This agreement
commenced on April 1, 2025, and requires payments of $
On January 1, 2025, the Company
entered into an amendment in its lease agreement with a third party wherein the Company is the lessee of certain commercial
property. The amendment commenced on January 1, 2025, and extended the term from May 31, 2025 to December 31, 2029, and increase in
monthly rent payments to from $
On
March 20, 2025, the Company entered into an amendment in its long-term lease agreement with a related party wherein the Company is
the lessee of certain commercial property. The amendment commenced on April 1, 2025, and extended the term from December 31, 2025 to
December 31, 2029, and increase the square footage of the leased property, a corresponding increase in monthly rent payments to from
$
| Six Months Ended (Unaudited) | ||||||||
| Lease cash flow information: | June 30, 2025 | June 30, 2024 | ||||||
| Cash paid for amounts included in the measurement of lease liabilities: | ||||||||
| Operating cash flows from operating leases | $ | $ | ||||||
| $ | $ | |||||||
| Summary of lease-related assets and liabilities: | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | ||||||
| Operating lease right-of-use assets | $ | $ | ||||||
| Accumulated amortization | ( | ) | ( | ) | ||||
| Net operating ROU assets | $ | $ | ||||||
| Current operating liabilities | $ | ( | ) | $ | ( | ) | ||
| Noncurrent operating lease liabilities | ( | ) | ( | ) | ||||
| Total operating lease liabilities | $ | ( | ) | $ | ( | ) | ||
Maturity of lease liabilities | June 30, 2025 (Unaudited) | |||
| 2026 | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| Thereafter | ||||
| Total future undiscounted lease payments | ||||
| Less: interest | ( | ) | ||
| Present value of lease liabilities | $ | |||
| 18 |
CALLAN JMB INC.
(Formerly known as Coldchain Technology Services, LLC)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 10 - COMMITMENTS AND CONTINGENCIES (Continued)
Legal Proceedings
The Company may be subject to legal proceedings and claims arising from contracts or other matters from time to time in the ordinary course of business.
During
May 2024, the Company was sent a demand letter alleging that the Company breached the terms of a Customer Service Agreement with one
of its vendors in a prior year. The vendor alleges that the Company improperly terminated the agreement without proper notice and
therefore owes it $
Management is not aware of any other pending or threatened litigation where the ultimate disposition or resolution could have a material adverse effect on its financial position, results of operations or liquidity.
NOTE 11 – SUBSEQUENT EVENTS
The Company has evaluated subsequent events that occurred after June 30, 2025, through August 14, 2025.
On
July 24, 2025, CJMB, entered into a Purchase Agreement with a certain investor, whereby CJMB has the right, but not the obligation, to
sell to the Investor, up to an aggregate of $
The
Purchase Agreement has a term ending on the earlier of (i) the first day of the month following the 18-month anniversary of the Commencement
Date or (ii) the date the Investor has purchased the shares equal to the agreed investment amount. Upon effectiveness of the related
registration statement, the Company will issue shares of Common Stock to the Investor as Commitment Shares. During the term, CJMB
may, at its discretion, deliver Regular Purchase Notices for $
There have been no other events or transactions during this time which would have a material effect on these consolidated financial statements.
| 19 |
PART II
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis is intended as a review of significant factors affecting our financial condition and results of operations for the periods indicated. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and the accompanying notes thereto included elsewhere in this Quarterly Report on Form 10-Q. Unless the context requires otherwise, references in this Quarterly Report on Form 10-Q to “we,” “us,” and “our” refer to Callan JMB Inc.
Forward-Looking Statements
The information in this discussion contains forward-looking statements and information within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, which are subject to the “safe harbor” created by those sections. These forward-looking statements include, but are not limited to, statements concerning our strategy, future operations, future financial position, future revenues, projected costs, prospects and plans and objectives of management. The words “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “plans,” “projects,” “will,” “would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements that we make. These forward-looking statements involve risks and uncertainties that could cause our actual results to differ materially from those in the forward-looking statements, including, without limitation, the risks set forth in our filings with the SEC. The forward-looking statements are applicable only as of the date on which they are made, and we do not assume any obligation to update any forward-looking statements
Overview
Callan JMB is a vertically integrated logistics and fulfillment company which provides thermal management logistics solutions to the life sciences industry through a combination of proprietary packaging, information technology and specialized cold chain logistics knowhow. We provide a system that utilizes advanced predictive technology to revolutionize the supply chain by guaranteeing the safety, effectiveness, and potency of every product handled to ensure product integrity, and to provide immediate response in time-sensitive industries while ensuring environmental responsibility.
Strategy
Our strategy involves leveraging our core competitive strengths to develop and maintain ongoing relationships with a diversified group of customers while continuing to grow our service lines, ensuring that we can meet our customers’ changing needs. We strive to be recognized as the premier provider of logistics and fulfillment of a broad range of value-added services based upon the breadth of those services, quality, responsiveness, customer service, information technologies, safety, and cost effectiveness.
We view our solutions as disruptive to the “older technologies” of dry ice and liquid nitrogen, in that our solutions are comprehensive and combine our competencies in configurations that are customized to our client’s requirements. We provide comprehensive, reliable, economic alternatives to all existing logistics solutions and services utilized for frozen shipping in the life sciences industry (e.g., personalized medicine, cell therapies, stem cells, cell lines, vaccines, diagnostic materials, semen, eggs, embryos, cord blood, organs, bio-pharmaceuticals, infectious substances, and other commodities that require continuous exposure to cryogenic or frozen temperatures). As part of our services, we provide the ability to monitor, record and archive crucial information for each shipment that can be used for scientific and regulatory purposes.
Seasonality
Based on our industry and our historic trends, we expect our operations to vary seasonally. Typically, revenue will be highest in the third and fourth calendar quarters and lowest in the first and second calendar quarters. These seasonal variations result in fluctuations in waste volumes due to weather conditions and general economic activity. We also expect that our operating expenses may be higher during the winter months due to periodic adverse weather conditions that can slow the collection of waste, resulting in higher labor and operational costs.
| 20 |
Results of Operations
Three and Six Months Ended June 30, 2025, Compared to the Three and Six Months Ended June 30, 2024
The following table provides certain selected financial information for the periods presented:
| (Unaudited) | ||||||||||||||||
| Three months ended June 30, | ||||||||||||||||
| 2025 | 2024 | Change | Change % | |||||||||||||
| Revenue | $ | 1,666,309 | $ | 1,985,768 | $ | (319,459 | ) | -16 | % | |||||||
| Cost of Revenue | 1,022,439 | 1,023,552 | (1,113) | 0 | % | |||||||||||
| Gross Profit | $ | 643,870 | $ | 962,216 | $ | (318,346 | ) | -33 | % | |||||||
| Selling, General and administrative expenses | 2,046,537 | 1,095,639 | 950,898 | 87 | % | |||||||||||
| Loss from operations | $ | (1,402,667 | ) | $ | (133,423 | ) | $ | (1,269,244 | ) | 951 | % | |||||
| Other income (expense) | 2,042 | 947 | 1,095 | 116 | % | |||||||||||
| Loss before income taxes | $ | (1,400,625 | ) | $ | (132,476 | ) | $ | (1,268,149 | ) | 957 | % | |||||
| Provision for income taxes | (3,102 | ) | (20,000 | ) | 16,898 | -84 | % | |||||||||
| Net loss | $ | (1,397,523 | ) | $ | (112,476 | ) | $ | (1,285,047 | ) | 1143 | % | |||||
| (Unaudited) | ||||||||||||||||
| Six months ended June 30, | ||||||||||||||||
| 2025 | 2024 | Change | Change % | |||||||||||||
| Revenue | $ | 3,115,687 | $ | 3,776,289 | $ | (660,602 | ) | -17 | % | |||||||
| Cost of Revenue | 1,858,724 | 2,096,490 | (237,766 | ) | -11 | % | ||||||||||
| Gross Profit | $ | 1,256,963 | $ | 1,679,799 | $ | (422,836 | ) | -25 | % | |||||||
| Selling, General and administrative expenses | 3,901,878 | 1,900,681 | 2,001,197 | 105 | % | |||||||||||
| Loss from operations | $ | (2,644,915 | ) | $ | (220,882 | ) | $ | (2,424,033 | ) | 1097 | % | |||||
| Other income (expense) | 4,188 | 1,273 | 2,915 | 229 | % | |||||||||||
| Loss before income taxes | $ | (2,640,727 | ) | $ | (219,609 | ) | $ | (2,421,118 | ) | 1102 | % | |||||
| Provision for income taxes | 1,259 | (26,000 | ) | 27,259 | -105 | % | ||||||||||
| Net loss | $ | (2,641,986 | ) | $ | (193,609 | ) | $ | (2,448,377 | ) | 1264 | % | |||||
Revenue
Revenue for the three and six months ended June 30, 2025, was $1,666,309 and $3,115,687 respectively as compared to $1,985,768 and $3,776,289 for the three and six months ended June 30, 2024, a decrease of $(319,459) and $(660,602), respectively. This decrease was due to the decrease in demand for our emergency preparedness services by certain states and local governments.
| 21 |
Cost of revenue
Cost of revenue for the three and six months ended June 30, 2025, was $1,022,439 and $1,858,724 respectively as compared to $1,023,552 and $2,096,490 for the three and six months ended June 30, 2024, respectively. The decrease in the comparative three month period is due to a $119,990 increase in storage fees offset by a $120,120 decrease in direct labor. The decrease in the comparative six month period is due to a $357,136 decrease in fees for service, a $99,337 decrease in labels, and a $48,930 decrease in freight forwarding offset by a $237,223 increase in storage fees.
Operating Expenses
Selling, General and Administrative Expenses
Our selling, general and administrative costs include personnel costs, consulting and professional fees, and other overhead expenses. Selling, general and administrative expenses for the three and six months ended June 30, 2025, were $2,046,537 and $3,901,878 respectively compared to $1,095,639 and $1,900,681 respectively for the three and six months ended June 30, 2024, an increase of $950,898 and $2,001,197 respectively. The Company’s consulting and professional fees increased by $111,584 and $420,007 for the three and six months ended June 30, 2025 respectively, compared to the same period in 2024 as a result of hiring professionals to support our capital raising process for our initial public offering. The Company’s information technology support increased by $5,726 and $11,305 for the three and six months ended June 30, 2025, compared to the same period in 2024 as the result of the purchase of additional equipment and hosting software. The Company’s marketing and advertising increased by $164,013 and $357,764 for the three and six months ended respectively as on June 30, 2025, compared to the same period in 2024 as a result of hiring a marketing firm that specializes in pharma-based businesses, and the hiring an investor relations firm for our IPO.
Other income (expense)
Other income (expense) for the three and six months ended June 30, 2025, was $2,042 and $4,188 respectively and for the three and six months ended June 30, 2024, it was $947 and $1,273 respectively, resulting in observed changes of $1,095 and $2,915 respectively. The increase for each period is a result of a decrease in interest expense.
Liquidity and Capital Resources
On July 24, 2025, CJMB, entered into a Purchase Agreement with a certain investor, whereby CJMB has the right, but not the obligation, to sell to the Investor, up to an aggregate of $25 million of shares of CJMB’s common stock, par value $0.001 per share, subject to the terms and conditions set forth therein.
The Purchase Agreement has a term ending on the earlier of (i) the first day of the month following the 18-month anniversary of the Commencement Date or (ii) the date the Investor has purchased the shares equal to the agreed investment amount. Upon effectiveness of the related registration statement, the Company will issue 15,000 shares of Common Stock to the Investor as Commitment Shares. During the term, CJMB may, at its discretion, deliver Regular Purchase Notices for $500,000 to $2,000,000 per notice. Each Regular Purchase is priced at 95% of the lowest daily VWAP during the applicable measurement period (or 80% if the Company’s stock is not trading on the Nasdaq Capital Market). In connection with each Regular Purchase, CMB will provide an estimate of the number of the shares deliverable, based on 90% of the prior day’s closing price.
Our principal liquidity requirements are for working capital to fund our operations and growth. To date, we have funded our liquidity requirements primarily through cash on hand, and cash flows from operations. As of June 30, 2025 and 2024, we had $4,224,151 and $1,847,721 of cash and cash equivalents, respectively.
| (Unaudited) | ||||||||||||
| For Six Months Ended | ||||||||||||
| June 30, | ||||||||||||
| 2025 | 2024 | Change | ||||||||||
| Cash provided by (used in) operating activities | $ | (2,124,970 | ) | $ | 275,524 | $ | (2,400,494 | ) | ||||
| Cash used in investing activities | (447,506 | ) | (45,874 | ) | (401,632 | ) | ||||||
| Cash provided by (used in) financing activities | 4,698,682 | (3,537,549 | ) | 8,236,231 | ||||||||
| Increase (decrease) in cash and cash equivalents | $ | 2,126,206 | $ | (3,307,899 | ) | $ | 5,434,105 | |||||
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Cash provided by (used in) operating activities
For the six months ended June 30, 2025, cash used in operating activities was $(2,124,970) compared to cash provided by operating activities of $275,524 during the six months ended June 30, 2024, a decrease of $(2,400,494). This decrease was primarily due to a decrease in net loss of $(2,641,986), a decrease in inventory of $(39,144), a decrease in other current assets of $(271,834), a decrease in deferred revenue of $(92,079), and offset by an increase in stock based compensation of $749,927.
Cash provided by (used in) investing activities
For the six months ended June 30, 2025, cash used in investing activities was $(447,506) compared to $(45,874) for the six months ended June 30, 2024, a decrease of $(401,632). The decrease is a result of leasehold improvements made to the new corporate office during 2025.
Cash provided by (used in) financing activities
During the six months ended June 30, 2025, cash provided by (used in) financing activities was $4,698,682 compared to ($3,537,549) during the six months ended June 30, 2024, an increase of $8,236,231. Our financing activities for the six months ended June 30, 2025 compared to June 30, 2024 included a decrease in related party loans of $35,742, an decrease in deferred offering costs of $65,000, and an increase in partners distributions of $3,382,254 and an increase in proceeds from IPO and overallotment, net of $4,680,013.
Off-Balance Sheet Arrangements
We have no off-balance sheet financing arrangements.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Under SEC rules and regulations, because we are considered to be a “smaller reporting company,” we are not required to provide the information required by this item in this report.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Our Chief Executive Officer and Chief Financial Officer conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of June 30, 2025, to ensure that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the SEC, including to ensure that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as of June 30, 2025, our disclosure controls and procedures were not effective at the reasonable assurance level in that:
| ● | We do not have written documentation for some of our internal control policies and procedures. Written documentation of key internal controls over financial reporting is a requirement of Section 404 of the Sarbanes-Oxley Act. Management evaluated the impact of our failure to have written documentation for some of our internal controls and procedures on our assessment of our disclosure controls and procedures and has concluded that the control deficiency that resulted does not represent a material weakness. | |
| ● | We do not have complete segregation of duties within accounting functions, which is a basic internal control. Due to our size and nature, segregation of all conflicting duties may not always be possible and may not be economically feasible. However, to the extent possible, the initiation of transactions, the custody of assets and the recording of transactions should be performed by separate individuals. Management evaluated the impact of our failure to have segregation of duties on our assessment of our disclosure controls and procedures and procedures and has concluded that the control deficiency that resulted does not represent a material weakness. |
Our Chief Executive Officer and Chief Financial Officer do not expect that our disclosure controls or internal controls will prevent all errors and all fraud. Although our disclosure controls and procedures were designed to provide reasonable assurance of achieving their objectives and our Chief Executive Officer and Chief Financial Officer have determined that our disclosure controls and procedures are effective at doing so, a control system, no matter how well conceived and operated, can provide only reasonable, not absolute assurance that the objectives of the system are met. Further, the design of any control system is subject to resource constraints and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple errors or mistakes. Additionally, controls can be circumvented if there exists in an individual a desire to do so. There can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
| (b) | Changes in Internal Controls Over Financial Reporting |
There were no changes in our internal controls over financial reporting that occurred during the last fiscal quarter covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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PART II — OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There currently is no material pending legal proceeding to which we are a party or to which any of our property is subject, and our management is not aware of any contemplated proceeding by any governmental authority against us. From time to time, we may become involved in legal proceedings or subject to claims incident to the ordinary course of business. Regardless of outcome, such proceedings or claims can have an adverse impact on us because of defense and settlement costs, diversion of resources, negative publicity, reputational harm, and other factors and there can be no assurances that favorable outcomes will be obtained.
ITEM 1A. RISK FACTORS
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and, as such, are not required to provide the information under this Item.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Recent Sale of Unregistered Equity Securities
During the quarter ended June 30, 2025 no unregistered sales of equity securities occurred.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
None.
ITEM 6. EXHIBITS
| * | Filed herewith. |
| ** | Furnished herewith. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| CALLAN JMB INC. | ||
| By: | /s/ Wayne Williams | |
| Wayne Williams | ||
| Chief Executive Officer, President, and Chairman of the Board | ||
| SIGNATURE | TITLE | DATE | ||
| /s/ Wayne Williams | Chief Executive Officer, President | August 14, 2025 | ||
| Wayne Williams | (Principal Executive Officer) and Chairman of the Board | |||
| /s/ Shannon Badger | Interim Chief Financial Officer | August 14, 2025 | ||
| Shannon Badger. | (Principal Financial and Accounting Officer) |
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