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Item 1A. Risk Factors

2022-12-09 compared with 2021-12-27 · 520 added, 494 removed, 95 unchanged (91% of the section changed)

The following risk factors should be read carefully in connection with an evaluation of the Company’s business and any forward-looking statements made in

this Annual Report on Form 10-K and elsewhere.

The following risk factors should be read carefully in connection with an evaluation of the Company’s business and any forward-looking statements made in this Annual Report on Form 10-K and

See the section entitled “Cautionary Statement Regarding Forward-Looking Statements” set forth above.

Any of the following risks or others discussed in this Annual Report on Form 10-K or the Company’s

other SEC filings could materially adversely affect the Company’s business, operating results and financial condition.

Any of the following risks or others discussed in this Annual Report on Form 10-K or the Company’s other SEC filings could materially

adversely affect the Company’s business, operating results and financial condition.

An investment in Janel’s common stock is subject to risks inherent to the Company’s business.

The material risks and

uncertainties that management believes affect Janel are described below.

Additional risks and uncertainties that management is not aware of or focused on or that management currently deems immaterial may also impair the Company’s business

Risk Factors Related To The COVID-19 Pandemic

The coronavirus pandemic has significantly impacted worldwide economic conditions and has had, and may likely to continue to have, an adverse effect on our business operations,

results of operations, cash flows and financial position.

The COVID-19 pandemic continues to have widespread implications and while we see improvements in the broader economy, it is difficult to predict how COVID-19 will impact the overall economy in the future.

to closely monitor the impact of the COVID-19 pandemic on all aspects of our business and geographies, including how it has and will continue to impact our customers, suppliers, employees and other business partners.

Many countries have begun the

process of vaccinating their residents against COVID-19.

However, the large scale and challenging logistics of distributing the vaccines, as well as uncertainty over the efficacy of the vaccines against new variants of the virus, may impact the

economy as well as our operations in the future.

Our results for the fiscal year 2021 showed encouraging recovery as we navigate through this unique environment.

While we are seeing positive results despite the current COVID-19 environment, there remains uncertainty regarding how COVID-19 will impact the Company’s results in the future.

The effects of the COVID-19 pandemic may last for a significant period of time and may continue to adversely affect our business, results of operations and financial condition even after the COVID-19 outbreak has

The extent to which the COVID-19 pandemic impacts us will depend on numerous evolving factors and future developments that we are not able to predict, including the duration and scope of the pandemic;

governmental, business, and

individuals’ actions in response to the pandemic;

our ability to maintain sufficient qualified personnel due to employee illness, quarantine, willingness to return to work, vaccine and/or testing mandates, face-coverings and other safety

requirements, general scarcity of employees, or travel and other restrictions;

current global supply chain disruptions caused by the COVID-19 pandemic;

and the impact on economic activity including the possibility of recession or financial market

These factors may adversely impact consumer, business, and government spending as well as customers’ ability to pay for our services on an ongoing basis.

This uncertainty also affects management’s accounting estimates and assumptions,

which could result in greater variability in a variety of areas that depend on these estimates and assumptions, including receivables and forward-looking guidance.

The material risks and uncertainties that management believes affect

Janel are described below.

Additional risks and uncertainties that management is not aware of or focused on or that management currently deems immaterial may also impair the Company’s business operations.

Risk Factors Related To Janel's Growth Strategy

Janel's strategy of expanding its business through acquisitions of other businesses presents special risks.

Janel expects to grow its businesses in part by completing acquisitions.

Janel will either acquire businesses within its existing segments, or expand its portfolio into new segments.

Janel expects to grow its businesses in part by completing acquisitions, either through acquisitions of businesses within its existing segments or the expansion of its portfolio into new segments.

In either case:

Janel's financial condition may not be sufficient to support the funding needs of an expansion program;

Janel may not be able to successfully identify suitable investment opportunities;

acquisitions that Janel undertakes may not be successfully consummated or enhance profitability; or

acquisitions that Janel undertakes may not be successfully consummated or enhance profitability;

expansion opportunities may not be available to Janel upon reasonable terms.

There may be a limited number of operating companies available for acquisition that Janel deems to be desirable targets.

Additionally, in recent years, the number of special purpose acquisition

companies (“SPACs”) that have been formed has increased substantially.

Many potential targets for SPACs have already entered into an initial business combination, and there are still SPACs seeking targets for their initial business combination, as

well as many SPACs currently in registration with the SEC.

As a result, at times, fewer attractive targets may be available, and it may require more time, more effort and more resources to identify a suitable target and to consummate an acquisition.

Janel may compete with entities whose financial resources, technical expertise and managerial capabilities are significantly greater than Janel’s.

Therefore, Janel may be at a competitive disadvantage in negotiating and executing possible

acquisitions.

Even if Janel is successful in a competitive bidding process for an acquisition, this competition may affect the terms of completed transactions, and, as a result, Janel may pay more or receive less favorable terms than it expected

for potential acquisitions.

In addition, even if Janel is able to successfully compete with these entities, it expects future acquisitions to encounter risks similar to those that

past acquisitions have encountered, such as:

At times, there may be a limited number of operating companies availible for acquisition an

fewer attractive targets may be available, and it may require more time, more effort and more resources to identify a suitable target and to consummate an acquisition.

Janel may compete with entities whose financial resources, technical

expertise and managerial capabilities are significantly greater than Janel's.

Therefore, Janel may be at a competitive disadvantage in negotiating and executing possible acquisitions.

Even if Janel is successful in a competitive bidding process

for an acquisition, this competition may affect the terms of completed transactions, and, as a result, Janel may pay more or receive less favorable terms than it expected for potential acquisitions.

In addition, even if Janel is able to successfully compete with these entities, it expects future acquisitions to encounter risks similar to those that past acquisitions have encountered, such as:

difficulty in assimilating/integrating the operations and personnel of the acquired businesses;

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impairment of relationships with employees and clients resulting from integration of the newly acquired company;

strain on managerial and operational resources as management tries to oversee larger operations;

strain on managerial and operational resources as management tries to oversee larger operations and newly acquired businesses;

significantly increased need for working capital to operate the acquired companies;

exposure to unforeseen liabilities of acquired companies; and

need to incur additional indebtedness, issue stock (which may have rights superior to the rights of Janel’s common stock and which may have a dilutive effect on Janel’s stockholders), or use cash in order to

complete the acquisition.

exposure to unforeseen liabilities of acquired companies.

Furthermore, management’s attention may be diverted by acquisition, investment, transition or integration activities.

Janel may be required to dedicate additional management and other resources

to newly acquired businesses.

Janel may be required to dedicate additional management and other resources to newly acquired

Additionally, should Janel acquire a new line of business in which it has no operating history, the success of such new business cannot be assured.

If an acquired entity is not efficiently or

completely integrated, then Janel’s business, financial condition and operating results could be materially adversely affected.

Janel might fail to realize the expected benefits or strategic objectives of any acquisition it undertakes, or it may spend resources exploring acquisitions

that are not consummated.

Due to its acquisition strategy, Janel faces a number of risks that could adversely affect Janel’s business, financial condition and operating results.

Janel might not achieve its expected return

on investment or may lose money.

Janel may be adversely impacted by liabilities that it assumes from an acquired business, including from that business’s known and unknown obligations, intellectual property or other assets, terminated employees,

current or former clients or other third parties.

In addition, Janel may fail to identify or adequately assess the magnitude of certain liabilities, shortcomings or other circumstances prior to acquiring, investing in or partnering with a

company, including potential exposure to regulatory sanctions or liabilities resulting from an acquired business’s previous activities, internal controls and security environment.

If any of these circumstances occurs, they could result in

unexpected legal or regulatory exposure, unfavorable accounting treatment, unexpected increases in taxes or other adverse effects on Janel’s business.

If an acquired entity is not efficiently or completely

integrated, there may be a material adverse effect on Janel’s business and operations.

Janel may be required to record a significant change to earnings if its goodwill and other amortizable intangible assets, or other investments, become impaired, which could

have a material adverse effect on the company’s financial condition and/or stock price.

Under generally accepted accounting principles in the United States (“GAAP”), we are required to test goodwill for impairment at least annually and to review our goodwill, amortizable intangible assets and other

assets acquired through merger and acquisition activity for impairment when events or changes in circumstance indicate that the carrying value of such assets may no longer be recoverable.

Factors that could lead to impairment of goodwill,

amortizable intangible assets and other assets acquired via acquisitions include significant adverse changes in the business climate, actual or projected operating results affecting Janel or any of its particular segments, and a decline in the

financial condition of our business.

If our goodwill, amortizable intangible assets or other investments become impaired in the future, we may be required to record additional charges to earnings.

Such charges would have a material adverse

effect on our financial results.

Janel might fail to realize the expected benefits or strategic objectives of any acquisition it undertakes, or it may spend resources exploring acquisitions that are not

Due to its acquisition strategy, Janel faces a number of risks that may have a material adverse effect on our business and operations.

Janel might not achieve its expected return on investment or may lose

Furthermore, Janel may be materially adversely impacted by liabilities that it assumes from an acquired business, including from that business’s known and unknown obligations, intellectual property or other assets, terminated

employees, current or former clients or other third parties.

In addition, Janel may fail to identify or adequately assess the magnitude of certain liabilities, shortcomings or other circumstances prior to acquiring, investing in or partnering with a company, including

potential exposure to regulatory sanctions or liabilities resulting from an acquired business’s previous activities, internal controls and security environment.

If any of these circumstances occurs, they could result in unexpected legal or

regulatory exposure, unfavorable accounting treatment, unexpected increases in taxes or other adverse effects on Janel’s business and operations.

Litigation, indemnification claims and other unforeseen claims and liabilities may arise from the acquisition or operation of acquired businesses.

Janel may face litigation or other claims as a result of certain terms and conditions of our acquisition agreements, such as earn-out payments or closing net asset adjustments.

Alternatively,

shareholder litigation may arise as a result of proposed acquisitions.

If Janel is unable to complete the number and kind of acquisitions for which it plans, or if Janel is inefficient or unsuccessful at integrating any acquired businesses into its

operations, Janel may not be able to achieve its planned rates of growth or improve its market share, profitability or competitive position.

Janel may face litigation or other claims as a result of certain terms and conditions of our acquisition agreements, stock purchase agreements, tender offers and other agreements to purchase equity interests in

target companies, such as earn-out payments or closing net asset adjustments.

Alternatively, shareholder litigation may arise as a result of proposed acquisitions.

Acquired businesses may have liabilities, or be subject to claims, litigation,

or investigations that we did not anticipate or which exceed our estimates at the time of the acquisition.

Any litigation relating to a potential acquisition will increase expenses associated with the acquisition or cause a delay in completing

the acquisition, which may impact Janel’s profitability.

Litigation related to acquisitions would also divert management time and resources.

Janel may experience disruptions that could have a material adverse effect on its business and

operations, especially where an acquisition target may have pre-existing compliance issues or deficiencies, or material weaknesses in internal controls over financial reporting.

Our subsidiaries may not be able to fully utilize their tax benefits, which could result in increased cash payments for taxes in future periods.

Net operating losses ("NOLs") may be carried forward to offset federal and state taxable income in future years and reduce the amount of cash paid for income taxes otherwise payable on such taxable income,

subject to certain limits and adjustments.

If fully utilized, the NOLs and other carryforwards of our minority-owned investment could provide them with significant tax savings in future periods.

Their ability to utilize these tax benefits in

future years will depend upon their ability to generate sufficient taxable income and to comply with the rules relating to the preservation and use of NOLs, as well as potential future changes in tax laws.

The potential benefit of the NOLs and

other carryforwards may be limited or permanently lost as a result of the following:

a change in control of our subsidiaries that would trigger limitations on the amount of taxable income in future years that may be offset by NOLs and other carryforwards that existed prior to the change in control;

examinations and audits by the IRS and other taxing authorities could reduce the amount of NOLs and other credit carryforwards that are available for future years.

Our actions may have an impact on the NOL's of our minority-owned investment.

The inability to use these NOLs, or the diminution in value of such NOLs, could have a material adverse effect on our business and

Rising interest rates may negatively impact our investments and have a material adverse effect on our business and operations.

Interest rates are highly sensitive to many factors that are beyond our control, including general economic conditions and policies of various governmental and regulatory agencies

and, in particular, the Federal Reserve Board.

In response to the COVID-19 pandemic, the Federal Reserve Board’s Open Market Committee (“FOMC”) decreased interest rates to near zero in March 2020.

The low interest rate environment

remained in effect until March 2022.

However, in light of elevated inflation and a strong labor market, the FOMC commenced increasing the target range for the federal funds rate starting in March 2022, with total increases of 3.0% since March

2022, and announced that it would continue to battle inflation with additional increases in interest rates in 2022 and 2023.

Changes in interest rates could have an adverse impact on our business by increasing the cost of borrowing, affecting our interest costs and our ability to make new investments on favorable terms or at all.

Additionally, interest rate fluctuations and changes in credit spreads on floating rate loans may have a negative impact on our investments and investment opportunities and, accordingly, may have a material adverse effect on our rate of return

on invested capital, our net investment income, our net asset value and the market price of our securities.

In addition, an increase in interest rates may make it difficult or impossible to make payments on outstanding debt.

Any increase in

interest rates could have a negative effect on our interest costs and investments, which could have a material adverse effect on our business and operations.

We may experience conflicts of interest with the minority shareholders of our businesses.

The boards of directors and officers of Janel’s non-wholly owned affiliated businesses have fiduciary duties to their respective shareholders.

As a result, to the extent Janel engages in transactions with these

affiliates, they may make decisions that are in the best interest of their shareholders generally, but which are not necessarily in the best interest of our shareholders.

In dealings with us, the directors and officers of our affiliated

businesses may make decisions that are different from the decisions we would make.

These decisions may not be in the best interests of our shareholders, which may have an adverse effect on our business and operations.

Risk Factors Related To Janel’s Business And Industries

(in thousands except per share data)

Economic and other conditions in the markets in which Janel operates can affect demand for services and the Company’s results of operations.

Janel’s future operating results are dependent upon the economic environments of the markets in which it operates.

Demand for services could be adversely

affected by economic conditions in the industries of Janel’s customers.

Janel expects the demand for its services (and, consequently, results of operations) to continue to be sensitive to domestic and, increasingly, global economic conditions and other factors beyond

Janel’s control.

Janel may not have sufficient working capital to continue operations.

The coronavirus pandemic has significantly impacted worldwide economic conditions and has had, and may likely continue to have, an adverse effect on our business operations,

results of operations, cash flows and financial position.

continue to closely monitor the impact of the COVID-19 pandemic on all aspects of our business and geographies, including how it has and will continue to impact our customers, suppliers, employees and other business partners.

governmental, business and

individuals’ actions in response to the pandemic;

our ability to maintain sufficient qualified personnel due to employee illness, quarantine, willingness to return to work, vaccine and/or testing mandates, face-coverings and other safety

requirements, general scarcity of employees, or travel and other restrictions;

current global supply chain disruptions caused by the COVID-19 pandemic;

and the impact on economic activity including the possibility of recession or financial market

These factors may adversely impact consumer, business and government spending as well as customers’ ability to pay for our services on an ongoing basis.

This uncertainty also affects management’s accounting estimates and assumptions,

which could result in greater variability in a variety of areas that depend on these estimates and assumptions, including receivables and forward-looking guidance.

Janel may not have sufficient working capital to continue operations, and our current asset-based lending facility is dependent upon an accounts receivable balance that may

fluctuate as a result of national and global events.

Janel’s cash needs are currently met by commercial bank credit facilities, cash on hand and cash generated from current operations.

Actual short- and long-term working capital needs will depend

upon numerous factors, including operating results, the availability of a revolving line of credit, competition, and the cost associated with growing, either internally or through acquisition, none of which can be predicted with certainty.

results of operations and availability under Janel’s bank lines of credit are insufficient to meet cash needs, Janel will be required to obtain additional investment capital or debt funding to continue operations.

Our substantial debt obligations could restrict our operations and financial condition.

Additionally, our ability to generate cash to make payments on our indebtedness depends on many factors

beyond our control.

Actual short- and long-term working capital needs will depend upon numerous

factors, including operating results, the availability of a revolving line of credit, competition and the cost associated with growing, either internally or through acquisition, none of which can be predicted with certainty.

If results of

operations and availability under Janel’s bank lines of credit are insufficient to meet cash needs, Janel will be required to obtain additional investment capital or debt funding to continue operations.

Our substantial debt obligations could

restrict our operations and financial condition.

Additionally, our ability to generate cash to make payments on our indebtedness depends on many factors beyond our control.

As of September 30, 2022, we had approximately $40,361 of short-term borrowings and long-term debt.

We may also incur additional indebtedness in the future.

Our debt service obligations will require us to use a portion of our operating cash flow to pay interest and principal on indebtedness rather than for other corporate purposes, including funding

future expansion of our business and ongoing capital expenditures, which could impede our growth.

Our debt service obligations will require us to use a portion of our operating cash flow to pay interest and principal on indebtedness rather than for other corporate purposes, including funding future expansion of

our business and ongoing capital expenditures, which could impede our growth.

Our substantial indebtedness could have other adverse consequences, including:

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limiting our ability to compete and our flexibility in planning for, or reacting to, changes in our business and the industries in which we operate;

limiting our ability to borrow additional funds for working capital, capital expenditures, acquisitions, and general corporate or other purposes; and

limiting our ability to borrow additional funds for working capital, capital expenditures, acquisitions and general corporate or other purposes;

exposing us to greater interest rate risk, including the risk to variable borrowings of a rate increase and the risk to fixed borrowings of a rate decrease.

Our ability to make payments on our indebtedness will depend on our ability to generate cash in the future.

Our ability to generate cash is subject to general economic, financial, competitive,

legislative, regulatory, and other factors, many of which are beyond our control.

Our business may not generate sufficient cash flow from operations, and future borrowings may not be available to us in an amount sufficient to enable us to pay our indebtedness when scheduled

payments are due or to fund other liquidity needs.

Our ability to generate cash is subject to general economic, financial, competitive, legislative,

regulatory and other factors, many of which are beyond our control.

Our business may not generate sufficient cash flow from operations, and future borrowings may not be available to us in an amount sufficient to enable us to pay our indebtedness when scheduled payments are due or

to fund other liquidity needs.

In these circumstances, we may need to refinance all or a portion of our indebtedness on or before maturity.

Any refinancing of our debt could be at higher interest rates and may require make-whole

payments and compliance with more onerous covenants, which could further restrict our business operations.

Our ability to refinance our indebtedness or obtain additional financing would depend on, among other things, our financial condition at the

time, restriction in the agreements governing our indebtedness, and the condition of the financial markets and the industries in which we operate.

As a result, we may not be able to refinance any of our indebtedness on commercially reasonable terms

Any refinancing of our debt could be at higher interest rates and may require make-whole payments and

compliance with more onerous covenants, which could further restrict our business operations.

Our ability to refinance our indebtedness or obtain additional financing would depend on, among other things, our financial condition at the time,

restriction in the agreements governing our indebtedness and the condition of the financial markets and the industries in which we operate.

As a result, we may not be able to refinance any of our indebtedness on commercially reasonable terms or

Without this financing, we may have to seek additional equity or debt financing or restructure our debt, which could harm our long-term business prospects.

Our failure to comply with the terms of any existing or future indebtedness could

result in an event of default which, if not cured or waived, could result in the acceleration of the payment of all of our debt.

Instability in the financial markets may adversely affect our business.

Instability in the global financial markets could reduce availability of credit to our business.

Although we currently have a revolving credit agreement with Santander Bank, N.A.

in place until

September 21, 2026 and another with First Merchants Bank in place until July 1, 2025 , tightening credit markets could make it more difficult for us to access funds, refinance our existing indebtedness,

enter into agreements for new indebtedness, or obtain funding through the issuance of the Company’s securities.

In 2017, the U.K.’s Financial Conduct Authority, which regulates LIBOR, announced its intention to phase out LIBOR by the end of 2021.

The deadline has been mostly extended and most U.S.

dollar-denominated LIBOR maturity tenors will continue to be published under June 30, 2023.

We may need to renegotiate our revolving credit facility, as well as Indco’s credit agreement with First Merchants Bank.

This could have an adverse effect on our financing costs by increasing the cost of our variable rate indebtedness.

Janel’s businesses are dependent upon technically skilled employees.

Janel believes that the success of its business is highly dependent on the continuing efforts of certain technically skilled employees, particularly experienced engineers in our Manufacturing segment and scientists

in our Life Sciences segment.

Only some of our employees are subject to employment agreements.

The competition for experienced engineers in the Manufacturing segment and scientists in our Life Sciences business is intense.

The loss of the services

of technical skilled employees could have a material adverse effect on Janel’s business.

Climate change and increased focus by governmental and non-governmental organizations and customers on sustainability issues, including those related to climate change, may

adversely affect our business and financial results.

Scientists have concluded that increasing concentrations of greenhouse gases in the Earth’s atmosphere may produce climate changes that have significant physical effects, such as increased

frequency and severity of storms, droughts, floods, wildfires and other climatic events.

Our failure to comply with the terms of any existing or future indebtedness

could result in an event of default which, if not cured or waived, could result in the acceleration of the payment of all of our debt.

Pursuant to the borrowing agreement, our ability to borrow under our current asset-based lending facility relies on our accounts receivable balance as collateral.

This accounts receivable balance is heavily

influenced by tariffs, global freight prices, international trade and other global events.

Our ability to collect on these accounts receivables may further impact our ability to borrow under our current agreement.

In the event that our accounts

receivable balance decreases, we may face limited opportunities to borrow on our line of credit.

Our subsidiaries do not have long-term contracts with all of their customers, and the loss of customers with which we do not have long-term contracts may have a material

adverse effect on our business and operations.

Our businesses, especially Indco, are based primarily upon individual orders, sales and service agreements with customers—not long-term contracts.

Therefore, customers could cease purchasing products or using our

services at any time, for any reason, and with little or no notice, and we would have no recourse.

If a significant number of our customers reduce or choose not to purchase products or use our services, or we have to lower prices to retain

customers, it may have a material adverse effect on our business and operations.

Significant changes or developments in U.S.

laws or policies, including changes in U.S.

trade policies and tariffs and the reaction of other countries thereto, may have a

material adverse effect on our business and financial statements.

Significant changes or developments in U.S.

laws and policies, such as laws and policies surrounding international trade, foreign affairs, manufacturing and development and investment in the territories and

countries where we or our customers operate, can materially adversely affect our business and financial statements.

Under the previous U.S.

administration, the imposition of significant tariffs and increased trade tension between the United

States and China greatly impacted domestic industries’ access to foreign markets.

Similar trade restrictions in the future may have a material adverse effect on our business and financial statements.

Janel’s businesses face aggressive competition from other companies with greater financial resources and from companies that operate in areas in which our companies plan to

expand in the future.

Our businesses face intense competition within the logistics, manufacturing and life science industries on a local, regional, national, and global basis.

Competitors include companies ranging from start-up

companies, which may be able to respond to customers' needs more quickly, to large multinational companies, which may have greater financial, marketing, operational and research and development resources than Janel.

In the freight forwarding industry, our Logistics business competes with a large and diverse group of freight forwarding concerns, commercial air and ocean carriers and a large number of locally established

companies in geographic areas where our Logistics business does business or intends to do business in the future.

The loss of customers, agents or employees to competitors could adversely impact the ability of our Logistics business to be

In addition, the transport of freight, both domestically and internationally, is highly competitive and price sensitive, and new competitors emerge annually.

Changes in the volume of freight transported, shippers’ preferences as to

the timing of deliveries as a means to control shipping costs, economic and political conditions (including as a result of the COVID-19 pandemic), both in the United States and abroad, work stoppages, labor constraints (including as a result of

wage inflation), U.S.

and foreign laws relating to tariffs, trade restrictions, foreign investments and taxation may all have significant impact on our Logistics business overall business, growth and profitability.

Indco competes within the highly fragmented industrial mixer manufacturing industry, which has low barriers to entry.

New competitors emerge annually, and many aggressively market through electronic media.

competitors may be more innovative than us, and, as a result, Indco may be unable to compete effectively.

Our Life Sciences business faces significant competition across many of its product lines.

To remain competitive, Life Sciences must develop new products and periodically enhance its existing products, otherwise,

it may lose market share and be unable to achieve revenue growth targets.

We anticipate that Life Sciences may also have to adjust the prices of many of its products to stay competitive.

In addition, new competitors, technologies, or market

trends may emerge to threaten or reduce the value of our product lines.

Failure to innovate and develop new products may impact the future sales and earnings of Life Sciences and, therefore, Janel.

Janel’s businesses are dependent upon technically skilled employees, and failure to obtain and retain skilled technical personnel could materially adversely affect their

scientists in our Life Sciences segment.

For example, Indco’s production facilities require skilled personnel to operate and provide technical services and support for its business.

Competition for the personnel required for Indco’s business

intensifies as activity increases.

In periods of high utilization, it may become more difficult to find and retain qualified individuals.

This could increase Indco’s costs or have other adverse effects on its operations.

Only some of our

employees are subject to employment agreements.

The loss of the services of technically skilled employees may have an adverse effect on Janel’s business and operations.

In order to respond to the high variability in our Logistics business model, it may be necessary to adjust staffing levels to changing market demands.

In periods of rapid change, it is more difficult to match our

Logistics business staffing levels to its business needs.

Additionally, there have been, and may continue to be, labor constraints as a result of the COVID-19 pandemic, among other factors.

Climate change and increased focus by governmental and non-governmental organizations, stockholders and customers on sustainability issues, including those related to

climate change, may have a material adverse effect on our business and operations.

Scientists have concluded that increasing concentrations of greenhouse gases in the Earth’s atmosphere may produce climate changes that have significant physical effects, such as increased frequency and severity

of storms, droughts, floods, wildfires and other climatic events.

Our Life Sciences business operates out of three locations and our Manufacturing business in a single location.

Increased frequency of extreme weather could

cause increased incidence of disruption to the production and distribution of our products at these locations.

Increasing natural disasters in connection with climate change could also be a direct threat to our third-party vendors, service

providers or other stakeholders, including disruptions on supply chains or information technology or other necessary services for our Company.

Increased frequency of extreme weather could cause increased

incidence of disruption to the production and distribution of our products at these locations.

Increasing natural disasters in connection with climate change could also be a direct threat to our third-party vendors, service providers or other

stakeholders, including disruptions on supply chains or information technology or other necessary services for Janel.

If Janel’s facilities, supply chains, distribution systems, or information technology systems experience any catastrophic loss

as a result of such natural disasters, such event could disrupt the company’s operations, delay production and shipments, result in defective products or services, diminish demand, damage customer relationships and our reputation and result in

legal exposure and significant repair or replacement expenses.

Federal, state and local governments, as well as some of our customers, are beginning to respond to climate change issues.

This increased focus on sustainability may result in new legislation or

regulations and customer requirements that could negatively affect us as we may incur additional costs or be required to make changes to our operations in order to comply with any new regulations or customer requirements.

Legislation or regulations

that potentially impose restrictions, caps, taxes, or other controls on emissions of greenhouse gases such as carbon dioxide, a by-product of burning fossil fuels such as those used in the Company’s trucks in our Logistics segment, could adversely

affect our operations and financial results.

More specifically, legislative, or regulatory actions related to climate change could adversely impact the Company by increasing our Logistics business fuel costs and reducing fuel efficiency and

could result in the creation of substantial additional capital expenditures and operating costs in the form of taxes, emissions allowances, or required equipment upgrades.

This increased focus on sustainability may result in new legislation or regulations and

customer requirements that could negatively affect us as we may incur additional costs or be required to make changes to our operations in order to comply with any new regulations or customer requirements.

Legislation or regulations that

potentially impose restrictions, caps, taxes, or other controls on emissions of greenhouse gases such as carbon dioxide, a by-product of burning fossil fuels such as those used in the trucks in our Logistics segment, may have a material adverse

effect on our business and operations.

More specifically, legislative, or regulatory actions related to climate change may have a material adverse effect on Janel by increasing our Logistics business fuel costs and reducing fuel efficiency and could

result in the creation of substantial additional capital expenditures and operating costs in the form of taxes, emissions allowances, or required equipment upgrades.

Any of these factors could impair our operating efficiency and productivity

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In addition, revenues could decrease if we are unable to meet regulatory or customer sustainability requirements.

These additional costs, changes in operations, or loss of revenues could have a material adverse

effect on our business, financial condition, and results of operations.

Increases in shipping costs, long lead times, supply shortages, and supply changes could disrupt our supply chain and factors such as wage rate increases and inflation can have

a material adverse effect on our business, financial condition, and operating results.

We may experience supply delays and shortages due to a variety of macroeconomic factors, including disruptions on the global supply chain as a result of the ongoing COVID-19 pandemic, especially with respect to goods

Furthermore, on March 21, 2022, the SEC proposed new rules relating to the disclosure of a

range of climate-related risks.

We are currently assessing the rule, but at this time we cannot predict the costs of implementation or any potential adverse impacts resulting from the rule.

To the extent this rule is finalized as proposed, we

could incur increased costs relating to the assessment and disclosure of climate-related risks.

These additional costs, changes in operations, or loss of revenues may have a material adverse effect on our business and operations.

the motor carriers we contract with are subject to increasingly restrictive laws protecting the environment, including those relating to climate change, which could directly or indirectly have a material adverse effect on our business.

Future and existing environmental regulatory requirements may have a material adverse effect on operations and increase operating expenses, which in turn could increase our purchased

transportation costs.

Our customers, our business and operations could be materially adversely affected by these new rules and costs.

Increases in shipping costs, long lead times, supply shortages and supply changes could disrupt our supply chain and factors such as wage rate increases and inflation can

have a material adverse effect on our business and operations.

We may experience supply delays and shortages due to a variety of macroeconomic factors, including disruption on the global supply chain as a result of the ongoing COVID-19 pandemic, especially with respect to

goods from China.

The ongoing COVID-19 pandemic has resulted in significant disruption to the operations of certain suppliers in China and the related transportation of their goods to the United States that are parts of our global supply chain.

been able to make alternative delivery arrangements for limited quantities of goods, at increased cost.

While we have not yet experienced material shortages in supply as a result of these disruptions and our alternative delivery arrangements, if they were to be prolonged or expanded in scope, there could be resulting

supply shortages that could impact our ability to manufacture and to deliver our products to our customers.

Accordingly, such supply shortages and delivery limitations could have and material adverse effect on our business, financial condition,

results of operations, and cash flows.

Furthermore, increases in compensation, wage pressure, and other expenses for our employees, may adversely affect our profitability.

These cost increases may be the result of inflationary pressures that could further

reduce our sales or profitability.

We have been able to make alternative delivery arrangements for limited quantities of goods, at increased cost.

resulting supply shortages that could impact our ability to manufacture and to deliver our products to our customers.

Accordingly, such supply shortages and delivery limitations could have a material adverse effect on our business, financial

condition, results of operations and cash flows.

Futhermore, increases in compensation, wage pressure and other expenses for our employees, may adversely affect our profitability.

These cost increases may be the result of inflationary pressures that could

further reduce our sales or profitability.

Increases in other operating costs, including changes in energy prices and lease and utility costs, may increase our cost of products sold or selling, general and administrative expenses.

Our competitive price

model and pricing pressures in the industry may inhibit our ability to reflect these increased costs in the prices of our products, in which case such increased costs could have a material adverse effect on our business, financial condition, and

results of operations.

competitive price model and pricing pressures in the industry may inhibit our ability to reflect these increased costs in the price of our products, in which case such increased costs could have a material adverse effect on our business,

financial condition and results of operations.

Janel may face competition from parties who sell their businesses to Janel and from professionals who cease working for Janel.

While we typically enter into non-competition and non-solicitation agreements with parties that sell their businesses to us, one or more of the former owners of an acquired business who cease

working for Janel or persons who leave Janel’s employment may compete with Janel or solicit Janel’s employees or clients in the future.

Even if ultimately resolved in Janel’s favor, any litigation associated with enforcing non-competition or non-solicitation agreements could be time consuming, costly and distract management’s

focus from Janel’s business.

While we typically enter into non-competition and non-solicitation agreements with parties that sell their businesses to us, one or more of the former owners of an acquired business who cease working for Janel or

persons who leave Janel’s employment may compete with Janel or solicit Janel’s employees or clients in the future.

Even if ultimately resolved in Janel’s favor, any litigation associated with enforcing non-competition or non-solicitation

agreements could be time consuming, costly and distract management’s focus from Janel’s business.

Moreover, states and foreign jurisdictions may interpret restrictions on competition narrowly and in favor of employees.

Therefore, certain restrictions on competition or solicitation may be unenforceable.

In addition, Janel may decide not to pursue legal remedies if it determines that the costs or other factors

outweigh the benefits of any possible legal recourse or if the likelihood of success does not justify the costs of pursuing a legal remedy.

Such persons, because they have worked for Janel or an acquired business, may be able to compete more

effectively with Janel and may be more successful in soliciting its employees and clients than unaffiliated third parties.

Terrorist attacks and other acts of violence or war may affect any market on which the Company’s shares trade, the markets in which the Company’s

subsidiaries operate, and the Company’s business operations and profitability.

Terrorist acts or acts of war or armed conflict could negatively affect Janel’s business operations.

Any of these acts could result in increased volatility in, or damage to, the United States and

worldwide financial markets and economy, and, in particular, could lead to increased regulatory requirements with respect to the security and safety of freight shipments and transportation.

Acts of terrorism or armed conflict, and the uncertainty

caused by such conflicts, could cause a reduction in demand for Janel’s businesses.

In particular, this would have a corresponding negative effect on Janel’s Logistics business.

Security breaches or cybersecurity attacks could adversely affect Janel’s ability to operate, could result in personal information being misappropriated,

and may cause Janel to be held liable or suffer harm to its reputation.

Therefore, certain

restrictions on competition or solicitation may be unenforceable.

In addition, Janel may decide not to pursue legal remedies if it determines that the costs or other factors outweigh the benefits of any possible legal recourse.

Such persons,

because they have worked for Janel or an acquired business, may be able to compete more effectively with Janel and may be more successful in soliciting its employees and clients than unaffiliated third parties.

Terrorist attacks and other acts of violence or war may affect any market on which the Company’s shares trade, the markets in which the Company’s subsidiaries operate and

the Company’s business operations and profitability.

Terrorist acts or acts of war or armed conflict may have a material adverse effect on Janel’s business and operations.

Any of these acts could result in increased volatility in, or damage to, the United States

and worldwide financial markets and economy, and, in particular, could lead to increased regulatory requirements with respect to the security and safety of freight shipments and transportation.

Acts of terrorism or armed conflict, and the

uncertainty caused by such conflicts, could cause a reduction in demand for Janel’s businesses.

In particular, this would have a corresponding adverse effect on Janel’s Logistics business.

Security breaches or cybersecurity attacks may have a material adverse effect on Janel’s ability to operate, could result in personal information being misappropriated and

may cause Janel to be held liable or suffer harm to its reputation.

We are dependent on information technology systems and infrastructures to carry out important operational activities and to maintain our business records.

In addition, we rely on the systems of

third parties.

As part of our normal business operations, we connect and store certain personal identifying and confidential information relating to our customers, vendors, employees and suppliers.

External and internal risks, such as malware,

insecure coding, “Acts of God,” data leakage and human error pose a direct threat to our information technology systems and operations.

Our third parties and we may be subject to cybersecurity attacks and other intentional hacking.

Any failure to identify and address such defects or errors or prevent a cyber-attack could result

in service interruptions, operational difficulties, loss of revenues or market share, liability to customers or others, diversion of resources, injury to our reputation and increased service and maintenance costs.

Addressing such issues could prove

to be impossible or very costly and responding to resulting claims or liability could similarly involve substantial cost.

In addition, our insurance coverage and/or indemnification arrangements that we enter into, if any, may not be adequate to cover all of the costs related to cybersecurity attacks or disruptions

resulting from such events.

In addition, we rely on the systems of third parties.

part of our normal business operations, we connect and store certain personal identifying and confidential information relating to our customers, vendors, employees and suppliers.

External and internal risks, such as malware, insecure coding,

“Acts of God,” data leakage and human error pose a direct threat to our information technology systems and operations.

We, and the third parties with whom we conduct business, have faced, and may continue to be subject to, cybersecurity attacks and other intentional hacking.

Any failure to identify and address such defects or

errors or prevent a cyber-attack, including a ransomware attack, could result in service interruptions, operational difficulties, loss of revenues or market share, liability to customers or others, diversion of resources, injury to our

reputation and increased service and maintenance costs.

Addressing such issues could prove to be impossible or very costly and responding to resulting claims or liability could similarly involve substantial cost.

In addition, our insurance coverage and/or indemnification arrangements that we enter into, if any, may not be adequate to cover all of the costs related to cybersecurity attacks or disruptions resulting from

We must also rely on the safeguards put in place by customers, suppliers, vendors or other third parties to minimize the impact of cyber threats, other security threats or business disruptions.

These third parties may

have varying levels of cybersecurity expertise and safeguards.

These third parties may have varying

levels of cybersecurity expertise and safeguards.

In the event of a breach affecting these third parties, our business and financial results could suffer materially.

With respect to our commercial arrangements with these third parties,

we have processes designed to require that the third parties and their employees and agents agree to maintain certain standards for the storage, protection and transfer of confidential, personal and proprietary information.

While, to date, we have not had a significant cyber-attack or breach that has had a material impact on our business or results of operations, we remain at risk of a data breach due to the

intentional or unintentional non-compliance by a third party’s employee or agent, the breakdown of a third party’s data protection processes or a cyber-attack on a third party’s information network and systems.

Acquired companies will need to be integrated with our information technology systems, which may cause additional training or licensing cost, along with potential delays and disruption.

In such event, our revenue,

financial results and ability to operate profitably could be negatively impacted.

While, to date, we have not had a significant cyber-attack or breach that has had a material impact on our business or results of operations, we remain at risk of a data breach due, in part, to the intentional or

unintentional non-compliance by a third party’s employee or agent, the breakdown of a third party’s data protection processes or a cyber-attack on a third party’s information network and systems.

Additionally, acquired companies will need to be

integrated with our information technology systems, which may cause additional training or licensing cost, along with potential delays and disruption.

In such event, our revenue, financial results and ability to operate profitably could be

materially adversely affected.

The challenges associated with integration of our acquisitions may increase these risks.

If we fail to comply with applicable privacy, security and data laws, regulations and standards, our business and reputation could be materially adversely affected.

As disclosed above, we connect and store certain personal identifying and confidential information relating to our customers, vendors, employees and supplier.

Janel may be subject to product and other liability risks for which it may not have adequate insurance coverage.

We may be named a defendant in product liability lawsuits alleging that products or services provided by Janel have resulted or could result in an unsafe condition or injury to consumers, particularly for our

Life Sciences and Manufacturing segment products.

There are several factors beyond our control that could lead to liability claims, such as the reliability and competence of the customers’ operators and the training of such operators.

third party claims and product liability claims filed against Janel could carry potential liabilities in excess of our insurance coverage.

We cannot be certain that our current insurance will be sufficient to cover any adverse determinations in

such product liability lawsuits.

In the ordinary course of our Logistics business, we are a defendant in several legal proceedings arising out of the conduct of our Logistics business.

These proceedings include third-party claims for property

damage or bodily injury incurred in connection with our services.

Within our Logistics segment, ELFS maintains auto liability for commercial trucking claims of up to $6,000,000 per occurrence, and general liability with of up to $6,000,000 per

Any such third-party claims filed against ELFS could carry potential liabilities in excess of our insurance coverage.

We cannot be certain that our current insurance will be sufficient to cover any adverse determinations in such

liability claims or lawsuits.

Life Sciences faces an inherent business risk of exposure to product and other liability claims if its products or services are alleged or found to have caused injury, damage or loss.

While we retain product

liability insurance, we may be unable to obtain insurance with adequate levels of coverage for potential liability on acceptable terms or claims of this nature may be excluded from coverage under the terms of any insurance policy that we

If we are unable to obtain such insurance or the amounts of any claims successfully brought against us substantially exceed our coverage, our business could be materially adversely affected.

If Indco’s customers successfully assert product liability claims against it due to defects in Indco’s products, its operating results may suffer, and its reputation may be harmed.

Indco faces an inherent risk of exposure to claims in the event that the failure, use or misuse of its products results, or is alleged to result, in bodily injury, property damage or economic loss.

believes that it meets or exceeds existing professional specification standards recognized or required in the industries in which it operates, Indco has been subject to claims in the past, and it may be subject to claims in the future.

successful product liability claim or series of claims against Indco, or a significant warranty claim or series of claims against it, could materially decrease its liquidity, and, therefore, Janel’s financial condition.

There are several

factors beyond our control that could lead to liability claims, such as the reliability and competence of the customers’ operators and the training of such operators.

Any such product liability claims filed against Indco could carry potential

liabilities in excess of our insurance coverage.

We cannot be certain that our current insurance will be sufficient to cover any adverse determinations in such product liability lawsuits.

If we fail to comply with applicable privacy, security and data laws, regulations and standards, our business and reputation may be materially adversely affected.

As disclosed above, we connect and store certain personal identifying and confidential information relating to our customers, vendors, employees and suppliers.

The collection, maintenance, protection, use,

transmission, disclosure and disposal of sensitive personal information are regulated at the federal, state, international and industry levels and requirements are imposed on us by contracts with clients.

transmission, disclosure and disposal of sensitive personal information are regulated at the federal, state, international and industry levels and requirements are also imposed on us by contracts with clients.

In some cases, such laws, rules,

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International laws, rules and regulations governing the use and disclosure of such

information, such as the GDPR, can be more stringent than in the United States, and they vary across jurisdictions.

In addition, more jurisdictions are regulating the transfer of data across borders and domestic privacy and data protection laws are

generally becoming more onerous.

information, such as the European Union’s General Data Protection Regulation, can be more stringent than laws in the United States, and they vary across jurisdictions.

In addition, more jurisdictions are regulating the transfer of data across

borders and domestic privacy and data protection laws are generally becoming more onerous.

These laws, rules and contractual requirements are subject to change and the regulatory environment surrounding data security and privacy is increasingly demanding.

Compliance with existing or new privacy, security

and data laws, regulations and requirements may result in increased operating costs, and may constrain or require us to alter our business model or operations.

Compliance with existing or new privacy,

security and data laws, regulations and requirements may result in increased operating costs, and may constrain or require us to alter our business model or operations.

Our management information and financial reporting systems are spread across diverse platforms and geographies.

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concerning customer orders, carrier payment, payroll and other critical business data.

We continue to make progress towards migrating our various legacy operating and accounting systems to a singular Oracle- based system.

As long as an acquired

business remains on another information technology system, we face additional manual calculations, training costs, delays, and an increased possibility of inaccuracies in the data we use to manage our business and report our financial results.

delay in compiling, assessing, and reporting information could adversely impact our business, our ability to timely react to changes in volumes, prices, or other trends, or to take actions to comply with financial covenants, all of which could

negatively impact our stock price.

Risks related to our receipt of Paycheck Protection Program funding.

In response to the COVID-19 pandemic and the resulting impact on our current and future operations, we applied for a loan under the Paycheck Protection Program (the “PPP”).

In April 2020 we were

approved for the amount of $2,760, which we received in April 2020 and on July 23, 2020, as part of the ACB acquisition, the Company assumed a PPP loan in the amount of $135.

The PPP loan application required us to certify, among other things, that the current economic uncertainty made the

PPP loan request necessary to support our ongoing operations.

While we made this certification in good faith, the certification does not contain any objective criteria and is subject to interpretation.

In early 2020, the Small Business

Administration provided guidance that it would be unlikely that a public company with substantial market value and access to capital markets would be able to make the required certification in good faith, and such company should be prepared to

demonstrate to the Small Business Administration, upon request, the basis for its certification.

Further, the Secretary of the Treasury and the Small Business Administration Administrator announced that the government will conduct a full audit of

all PPP loans of more than $2,000 for which the borrower applies for forgiveness.

While we believe we have satisfied all eligibility requirements for the PPP loans, there is a risk that we may be deemed ineligible to have received the PPP loans

or in violation of any of the laws or governmental regulations that apply to us in connection with the PPP loans.

In such event, we may be required to repay the PPP loans in their entirety and we could be subject to additional penalties.

The Company applied for forgiveness during the year and received forgiveness during the current fiscal year.

We continue to make progress towards migrating our various legacy operating and accounting systems to a singular system.

As long as an acquired business

remains on another information technology system, we face additional manual calculations, training costs, delays and an increased possibility of inaccuracies in the data we use to manage our business and report our financial results.

in compiling, assessing and reporting information could materially adversely impact our business;

our ability to react timely to changes in volumes, prices, or other trends;

or to take actions to comply with financial covenants, all of which

could negatively impact our stock price.

Risk Factors Related To Janel’s Logistics Business

Our Logistics business faces aggressive competition from freight carriers with greater financial resources and from companies that operate in areas in which

our Logistics business plans to expand in the future.

Our Logistics business faces intense competition within the freight industry on a local, regional, national and global basis.

Many of our Logistics business competitors have much larger

facilities and far greater financial resources.

In the freight forwarding industry, our Logistics business competes with a large and diverse group of freight forwarding concerns, commercial air and ocean carriers and a large number of locally

established companies in geographic areas where our Logistics business does business or intends to do business in the future.

The loss of customers, agents or employees to competitors could adversely impact our Logistics business’ ability to maintain profitability.

In addition, the transport of freight, both domestically and internationally, is highly competitive and price sensitive, and new competitors emerge annually.

Changes in the volume of freight

transported, shippers’ preferences as to the timing of deliveries as a means to control shipping costs, economic and political conditions (including as a result of the COVID-19 pandemic), both in the United States and abroad, work stoppages, labor

constraints (including as a result of wage inflation), U.S.

and foreign laws relating to tariffs, trade restrictions, foreign investments and taxation may all have significant impact on our Logistics business overall business, growth and

profitability.

Our Logistics business depends

on third-party carriers to transport our customers’ cargo.

Our Logistics business’s ability to serve its customers depends on the availability of air and sea cargo space,

including space on passenger and cargo airlines, ocean carriers that service the transportation lanes and trucking companies that our Logistics business uses.

Our Logistics business depends on third-party carriers to transport our customers’ cargo.

As a non-asset-based provider of global logistics services, our Logistics business’s ability to serve its customers depends on the availability of air and sea cargo space, including space on passenger and cargo

airlines, ocean carriers that service the transportation lanes and trucking companies that our Logistics business uses.

Shortages of cargo space are most likely to develop around holidays and in especially heavy transportation lanes.

available cargo space could be reduced as a result of decreases in the number of airlines or ocean carriers serving particular shipment lanes at particular times.

Consequently, our ability to provide services for our customers could be

adversely impacted by, among other things:

addition, available cargo space could be reduced as a result of decreases in the number of airlines or ocean carriers serving particular shipment lanes at particular times.

Consequently, our ability to provide services for our customers could

be adversely impacted by, among other things:

shortages in available cargo capacity;

changes by carriers and transportation companies in policies and practices such as scheduling, pricing, payment terms and frequency of service, increases in the

cost of fuel, taxes and labor, changes in the financial stability or operating capabilities of carriers, and other factors not within our control.

Reductions in airfreight or ocean freight capacity could negatively impact our yields.

interruptions in service or stoppages in transportation, whether caused by strike, work stoppage, lock-out, slowdown or otherwise, could adversely impact our business, results of operations and financial condition.

changes by carriers and transportation companies in policies and practices such as scheduling, pricing, payment terms and frequency of service, increases in

the cost of fuel, taxes and labor, changes in the financial stability or operating capabilities of carriers and other factors not within our control.

Reductions in airfreight or ocean freight capacity may have a material adverse effect on our

Material interruptions in service or stoppages in transportation, whether caused by strike, work stoppage, lock-out, slowdown or otherwise, may materially adversely affect our business and operations.

When demand substantially exceeds available capacity in a given market, which has been increasingly common for several services and markets since the beginning of the COVID-19 pandemic in 2020 as well as the

onset of the Russia-Ukraine conflict, we may not always be able to find acceptable transportation or other service solutions to meet our customers’ needs, and the routing and delivery of freight may be subject to delays that are outside of our

Quality customer service is important to our success, and any challenges in meeting our customers’ needs and requirements may result in loss of business, thereby materially adversely affecting our operating results.

In addition, any determination that our third-party carriers have violated laws and regulations could seriously damage our reputation and brands, resulting in diminished revenue and profit and increased operating

Higher carrier prices may result in decreased gross profits.

Carriers can be expected to charge higher prices if market conditions warrant, or to cover higher operating expenses.

Our gross profit and income from operations may decrease if we are unable to increase our pricing

to our customers.

Increased demand for truckload services and pending changes in regulations may reduce available capacity and increase carrier pricing.

We may be subject to claims arising from transportation of freight by the carriers with which we contract.

We use the services of thousands of transportation companies in connection with our transportation operations.

From time to time, the drivers employed and engaged by the carriers we contract with are involved in

accidents, which may result in death or serious personal injuries.

The resulting types and/or amounts of damages may be excluded from or exceed the amount of insurance coverage maintained by the contracted carrier.

Although these drivers are not our employees and all of these

drivers are employees, owner-operators, or independent contractors working for carriers, from time to time, claims may be asserted against us for their actions, or for our actions in retaining them.

Claims against us may exceed the amount of our

insurance coverage or may not be covered by insurance at all.

A material increase in the frequency or severity of accidents, liability claims or workers’ compensation claims, or unfavorable resolutions of claims, could materially and adversely

affect our operating results.

In addition, significant increases in insurance costs or the inability to purchase insurance as a result of these claims could reduce our profitability.

Our involvement in the transportation of certain goods,

including but not limited to hazardous materials, could also increase our exposure in the event one of our contracted carriers is involved in an accident resulting in injuries or contamination.

One or more significant claims or the cost of maintaining our insurance could have an adverse effect on our results of operations.

We use the services of transportation companies and their drivers in connection with our transportation operations.

From time to time, these drivers are, or may be, involved in

accidents which may cause injuries and in which goods carried by them are lost or damaged.

We may be subject to claims arising from transportation of freight by the carriers with which we contract, and increased insurance premium costs may have a material adverse

effect on our results of operations.

We use the services of multiple transportation companies in connection with our transportation operations.

From time to time, drivers are, or may be, involved in accidents which may cause injuries and in which

goods carried by them are lost or damaged.

Such accidents usually result in equipment damage and, unfortunately, can also result in injuries or death.

Although these drivers are work for third-party carriers, from time-to-time claims may be asserted against us for their actions or for our actions in retaining them.

against us may exceed the amount of our insurance coverage, or may not be covered by insurance at all.

Our involvement in the transportation of certain goods, including, but not limited to, hazardous materials, could also increase our exposure in

the event of an accident resulting in injuries or contamination.

The resulting types and/or amounts of damages may under any of these circumstances be excluded by or exceed the amount of our insurance coverage or the insurance coverage maintained

by the contracted carrier.

A material increase in the frequency or severity of accidents, claims for lost or damaged goods, liability claims, workers’ compensation claims, or unfavorable resolutions of any such claims could adversely affect

our results of operations to the extent claims are not covered by our insurance or such losses exceed our reserves.

Significant increases in insurance costs or the inability to purchase insurance as a result of these claims could also reduce our

profitability and have an adverse effect on our results of operations.

The timing of the incurrence of these costs could also significantly and adversely impact our operating results compared to prior periods.

Increased insurance premium cost could have an adverse effect on our results of operations.

Insurance carriers may increase premiums for transportation companies generally.

We could also experience additional increases in our insurance premiums in the future if our claims experience worsens.

insurance or claims expense increases and we are unable to offset the increase with desired levels of insurance at reasonable rates, it could have an adverse effect on our results of operations and financial position.

In some instances, certain

insurance could become unavailable or available only for reduced amounts of coverage.

If we were to incur a significant liability for which we were not fully insured, it could have an adverse effect on our results of operations and financial

The motor carriers we contract with are subject to increasingly restrictive laws protecting the environment, including those relating to climate change, which could directly or

indirectly have a material adverse effect on our business.

Future and existing environmental regulatory requirements could adversely affect operations and increase operating expenses, which in turn could increase our purchased transportation costs.

If we are unable to pass

such costs along to our customers, our business could be materially and adversely affected.

Even without any new legislation or regulation, increased public concern regarding greenhouse gases emitted by transportation carriers could harm the

reputations of companies operating in the transportation logistics industries and shift consumer demand toward more locally sourced products and away from our services.

The resulting types and/or amounts of damages may be excluded from or exceed the amount of

insurance coverage maintained by the contracted carrier.

Although these drivers are not our employees and all of these drivers are employees, owner-operators, or independent contractors working for carriers, from time to time, claims may be

asserted against us for their actions, or for our actions in retaining them.

Claims against us may exceed the amount of our insurance coverage or may not be covered by insurance at all.

A material increase in the frequency or severity of

accidents, liability claims or workers’ compensation claims, or unfavorable resolutions of claims, may materially adversely affect our operating results.

A material increase in the frequency or severity of accidents, claims for lost or damaged

goods, liability claims, workers’ compensation claims, or unfavorable resolutions of any such claims could materially adversely affect our results of operations to the extent claims are not covered by our insurance or such losses exceed our

Significant increases in insurance costs or the inability to purchase insurance as a result of these claims could also reduce our profitability and have an adverse effect on our results of operations.

The timing of the incurrence of

these costs may also materially adversely affect our operating results compared to prior periods.

Additionally, insurance carriers may increase premiums for transportation companies generally.

We may also experience additional increases in our insurance premiums in the future if our claims experience worsens.

If our insurance or claims expense increases and we are unable to offset the increase with desired levels of insurance at reasonable rates, it may have a material adverse effect on our results of operations and financial position.

instances, certain insurance could become unavailable or available only for reduced amounts of coverage.

If we were to incur a significant liability for which we were not fully insured, it may have a material adverse effect on our business and

Finally, we face risks associated with the handling of customer inventory.

Some of our operating agreements include maintaining the inventory of our customers.

Failure to property handle such inventory could

expose us to monetary claims and expenses, as well as reputational harm to our business.

A determination that owner-operators are employees, rather than independent contractors, could expose us to various liabilities and additional costs.

Federal and state legislation as well as tax and other regulatory authorities may seek to assert that independent

contractors in the transportation service industry, such as our owner-operators, are employees rather than independent contractors.

For example, on September 18, 2019, the state of California passed Assembly Bill 5 (AB5), which codified a

standard test for determining a worker’s status as an employee or independent contractor for purposes of determining employee benefits such as paid vacation, sick

leave, meals and rest breaks, and overtime, known as the ABC test .

The ABC test is generally

thought to lower the threshold for classifying a worker as an employee as opposed to an independent contractor.

AB5 was scheduled to go into effect on January 1, 2020;

however, a California Federal District judge issued a preliminary injunction

enjoining California from enforcing AB5 as to motor carriers.

California can appeal the decision to grant the preliminary injunction.

While new in California, versions of the ABC test have existed in a number of other states over the years and have been challenged in various courts as violating the federal government’s

exclusive right to regulate motor carriers in interstate commerce.

There can be no assurance that these interpretations and tax laws that consider these persons independent contractors will not change, that other federal or state legislation will

not be enacted or that various authorities will not successfully assert a position that reclassifies independent contractors to be employees.

If our owner-operators are determined to be our employees, that determination could materially increase

our exposure under a variety of federal and state tax, workers’ compensation, unemployment benefits, labor, employment, and tort laws, as well as our potential liability for employee benefits.

Federal and state legislation as well as tax and other regulatory authorities may seek to assert that independent contractors in the transportation service industry, such as our owner-operators, are employees

rather than independent contractors.

For example, on September 18, 2019, the state of California passed Assembly Bill 5 (AB5), which codified a standard test for determining a worker’s status as an employee or independent contractor for

purposes of determining employee benefits such as paid vacation, sick leave, meals, rest breaks and overtime, known as the ABC test.

The ABC test is generally thought to lower the threshold for classifying a worker as an employee as opposed to

an independent contractor.

A particular aspect of the ABC test poses a distinct threat to the trucking industry;

the test maintains that an independent contractor must undertake “work that is outside the usual course of the hiring entity’s

business” to avoid classification as an employee.

For trucking companies hiring third-party truck drivers, it is unclear whether this prong of the test is satisfied or not.

In August 2022, a federal District Court formally lifted the injunction

that had previously kept AB5 from applying to California’s trucking sector.

The lifting of the injunction further increases the likelihood that owner-operators may be classified as employees within the state.

While relatively new in California, versions of the ABC test have existed in a number of other states over the years and have been challenged in various courts as violating the federal government’s exclusive

right to regulate motor carriers in interstate commerce.

There can be no assurance that these interpretations and tax laws that consider these persons independent contractors will not change, that other federal or state legislation will not be

enacted or that various authorities will not successfully assert a position that reclassifies independent contractors to be employees.

If our owner-operators are determined to be our employees, that determination could materially increase our

exposure under a variety of federal and state tax, workers’ compensation, unemployment benefits, labor, employment and tort laws, as well as our potential liability for employee benefits.

In addition, such changes may be applied retroactively, and, if so, we may be required to pay additional amounts to compensate for prior periods.

Any of the above increased costs would adversely

affect our business and operating results.

Any of the above increased costs would materially adversely affect

our business and operations.

Recessions and other economic developments that reduce freight volumes could have a material adverse impact on our Logistics business.

The transportation industry historically has experienced cyclical fluctuations in financial results due to economic recession, downturns in business

cycles of customers like those serviced by our Logistics business, interest rate fluctuations and other economic factors beyond the control of our Logistics business.

Deterioration in the economic environment subjects our Logistics business to various risks that may have a material impact on its operating results and

cause it, and therefore Janel, to not reach its long-term growth goals, as a result of, for example, the following:

The transportation industry historically has experienced cyclical fluctuations in financial results due to economic recession, downturns in business cycles of customers like those serviced by our Logistics

business, interest rate fluctuations and other economic factors beyond the control of our Logistics business.

Deterioration in the economic environment subjects our Logistics business to various risks that may have a material impact on its

operating results and cause it, and, therefore, Janel, to not reach its long-term growth goals, as a result of, for example, the following:

a reduction in overall freight volumes in the marketplace, reducing our Logistics business’s opportunities for growth;

economic difficulties encountered by some of our Logistics business customers, who may, therefore, not be able to pay our Logistics business in a timely manner or at all, or may go out of business;

economic difficulties encountered by a significant number of our Logistics business’s transportation providers, who may go out of business and, therefore, leave our Logistics business unable to secure sufficient equipment or other transportation services to meet commitments to its customers; and

transportation services to meet commitments to its customers;

the inability of our Logistics business to appropriately adjust its expenses to changing market demands.

In addition, if a downturn in the business

cycles of our Logistics business customers causes a reduction in the volume of freight shipped by those customers, its, and therefore Janel’s, operating results could be adversely

Other events affecting the volume of international trade and international operations could adversely affect our Logistics international operations.

In addition to economic conditions, our Logistics business’s international supply chain services are directly related to, and dependent on, the volume of international trade, particularly trade

between the United States and foreign nations.

In addition, if a downturn in the business cycles of our Logistics business customers causes a reduction in the volume of freight shipped by those customers, its, and, therefore, Janel’s, operating results could

be materially adversely affected.

Other events affecting the volume of international trade and international operations may have a material adverse effect on our Logistics international operations.

In addition to economic conditions, our Logistics business’s international supply chain services are directly related to, and dependent on, the volume of international trade, particularly trade between the United

States and foreign nations.

This trade, as well as our Logistics business’s international supply chain services, is influenced by many factors, including:

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exchange controls, currency conversion and fluctuations;

war, other armed conflicts and terrorism; and

war, other armed conflicts and terrorism, such as the Russia-Ukraine conflict;

and foreign laws relating to tariffs, trade restrictions, foreign investment and taxation.

The foregoing and other events beyond our Logistics business control, such as a failure of various nations to reach or adopt

international trade agreements or an increase in bilateral or multilateral trade restrictions, could have a material adverse effect on our Logistics segment.

Our Logistics business may be unable to manage its staffing needs, which may have an adverse impact on its costs of doing business.

In order to respond to the high variability in our Logistics business model, it may be necessary to adjust staffing levels to changing

market demands.

In periods of rapid change, it is more difficult to match our Logistics business staffing levels to its business needs.

Additionally, there may be labor constraints as a

result of COVID-19-related vaccine mandates.

In addition, our Logistics business has other primarily variable expenses that are fixed for a period of time, and it may not be able to

adequately adjust them in a period of rapid change in market demand.

Our Logistics business faces competition in the freight forwarding, freight brokerage, logistics and supply chain management industry.

The freight forwarding, freight brokerage, logistics and supply chain management industry is intensely competitive and is expected to remain so for the foreseeable future.

Our Logistics business faces competition from a number of companies, including many that have significantly greater financial, technical and marketing resources.

Customers increasingly are turning to competitive bidding processes, in which they solicit bids from a number of competitors, including competitors that are larger than our Logistics business.

Increased competition may lead to revenue reductions, reduced profit margins or a loss of market share, any one of which could harm our Logistics business.

There are many factors that could impair our Logistics business’s profitability, including

the following:

competition with other transportation services companies, some of which have a broader coverage network, a wider range of services, more fully developed information technology systems and greater capital

resources than those of our Logistics business;

reduction by our Logistics business competitors of their rates to gain business, especially during times of declining growth rates in the economy,

which reductions may limit our Logistics business’s ability to maintain or increase rates, maintain its operating margins or maintain significant growth in its business;

shifts in the business of shippers to asset-based trucking companies that also offer brokerage services in order to secure access to those companies’ trucking capacity, particularly in times of tight

industry-wide capacity;

solicitation by shippers of bids from multiple transportation providers for their shipping needs and the resulting depression of freight rates or loss of business to competitors; and

the use by our Logistics business competitors of cooperative relationships to increase their ability to address shipper needs.

The Logistics industry is consolidating, and if our Logistics business

cannot gain sufficient market presence , it may not be able to compete successfully against larger companies in its industry.

There currently is a trend within the logistics industry towards consolidation of the niche players into larger companies that are attempting to increase global operations through the

acquisition of regional and local freight forwarders, brokers and other freight logistics providers.

If our Logistics business cannot gain sufficient market presence or otherwise

establish a successful strategy in its industry, it may not be able to compete successfully against larger companies in its industry.

Failure to comply with governmental permit and licensing requirements or statutory and regulatory requirements could result in civil and criminal

sanctions, fines or revocation of our Logistics business’s operating authorities, and changes in these requirements could adversely affect our Logistics business.

Our Logistics business’s operations are subject to various state, local, federal and foreign statutes and regulations prohibiting

various activities that in many instances require permits and licenses.

Failure to maintain compliance with applicable law and regulations, required permits or licenses, or to comply with applicable regulations, could result in substantial fines

or revocation of our Logistics business operating authorities.

Moreover, government deregulation efforts, “modernization” of the regulations governing customs clearance and changes in the international trade and tariff environment could require material

expenditures or otherwise adversely affect our Logistics business specifically.

Our Logistics business is subject to seasonal trends.

Historically, our Logistics business’s operating results have been subject to seasonal

trends when measured on a quarterly basis.

Its second fiscal quarter has traditionally been the weakest, and the third and fourth fiscal quarters have traditionally been the strongest.

As a result, its quarterly operating results are likely to

continue to fluctuate.

This trend is dependent on numerous factors, including the markets in which our Logistics business operates, holiday seasons, consumer demand, climate, economic conditions and numerous other factors.

This historical

seasonality has also been influenced by the growth and diversification of our Logistics business international network and service offerings.

A substantial portion of our Logistics

business’s revenue is derived from customers in industries whose shipping patterns are tied closely to consumer demand which can sometimes be difficult to predict or are based on

The foregoing and other events beyond the control of our Logistics business, such as a failure of various nations to reach or adopt international trade agreements or an increase in bilateral or multilateral trade

restrictions, may have a material adverse effect on our Logistics segment.

The difficulty in accurately forecasting timing or volumes of customer shipments and/or rate changes by carriers could increase the cost of our operations.

The unpredictability of short- and long-term

fluctuations in such factors is influenced by volatile market conditions, global developments, consumer trends and numerous other factors outside of our company’s direct control.

Failure to comply with governmental permit and licensing requirements or statutory and regulatory requirements could result in civil and criminal sanctions, fines or

revocation of our Logistics business’s operating authorities, and changes in these requirements may have a material adverse effect on our Logistics business.

Our Logistics business’s operations are subject to various state, local, federal and foreign statutes and regulations prohibiting various activities that in many instances require permits and licenses.

maintain compliance with applicable law and regulations, required permits or licenses, or to comply with applicable regulations, could result in substantial fines or revocation of our Logistics business operating authorities.

government deregulation efforts, “modernization” of the regulations governing customs clearance and changes in the international trade and tariff environment could require material expenditures or otherwise have a material adverse effect on our

Logistics business specifically.

Our Logistics business is subject to seasonal trends and other factors beyond our control.

Historically, our Logistics business’s operating results have been subject to seasonal trends when measured on a quarterly basis.

Its second fiscal quarter has traditionally been the weakest, and the third and

fourth fiscal quarters have traditionally been the strongest.

As a result, its quarterly operating results are likely to continue to fluctuate.

This trend is dependent on numerous factors, including the markets in which our Logistics business

operates, holiday seasons, consumer demand, climate, economic conditions and numerous other factors.

This historical seasonality has also been influenced by the growth and diversification of our Logistics business international network and

service offerings.

A substantial portion of our Logistics business’s revenue is derived from customers in industries whose shipping patterns are tied closely to consumer demand which can sometimes be difficult to predict or are based on

just-in-time production schedules.

Therefore, our Logistics business’s revenue is, to a large degree, affected by factors that are outside of its control.

Our Logistics business historic operating patterns may not continue in future periods as it cannot influence or forecast many of these factors.

In addition, our Logistics business has several primarily variable expenses that are

fixed for a period of time, and it may not be able to adequately adjust them in a period of rapid change in market demand.

Our Logistics business historic operating patterns may not continue in future periods as it cannot influence or forecast

many of these factors.

Comparisons of our operating results from period to period are, therefore, not necessarily meaningful and should not be relied upon as an indicator of future performance.

Factors Related To Janel’s Life Sciences Business

Changes in governmental regulations may reduce demand for our products and/or increase our expenses.

Life Sciences competes in markets in which it or its customers must comply with federal, state, local and foreign regulations, such as environmental, health and safety, and food and drug regulations.

configure and market our products to meet customer needs created by these regulations.

Any significant change in these regulations could reduce demand for our products and/or increase our costs of producing these products.

The success of Life Sciences depends on its ability to continually produce products that meet high quality standards such as purity, reproducibility and/or absence of cross-

Product quality and reputation are key purchasing decision factors for our Life Sciences customers.

While our Life Sciences operations have experienced and qualified personnel, long operating histories and

substantial production systems and protocols in place, failure on our part to meet our customers’ high-quality product expectations (in particular with respect to product purity, reproducibility and specificity) may have a material adverse

effect on our business and operations.

The success of Life Sciences is affected by its ability to maintain its intellectual property rights.

If we are unable to adequately protect our intellectual property, if

third parties infringe on our intellectual property rights, or if we are involved in disputes to determine the scope and validity of others' proprietary rights, we may suffer competitive injury or expend significant resources enforcing our

Intellectual property rights heavily influence product development and differentiation.

We own several patents, trademarks, copyrights, trade secrets and other intellectual property and licenses to intellectual

property owned by others, which together are important to our business operations.

However, the intellectual property rights we obtain are not always sufficiently broad and do not always guarantee a significant competitive advantage, and

patents may not be issued for pending or future patent applications owned, submitted by, or licensed to us.

Despite the steps that we and our licensors have taken to maintain and protect our intellectual property, we cannot fully prevent such

intellectual property from being challenged, invalidated, circumvented, designed-around or becoming subject to compulsory licensing.

Sometimes, enforcement may not be available to us because a third-party may have a dominant intellectual

property position or for other business reasons.

We also rely on nondisclosure and noncompetition agreements with employees, consultants and other parties to protect, in part, trade secrets and other proprietary rights.

There can be no guarantee that these

agreements sufficiently protect our trade secrets and other proprietary rights and will not be breached, that we will have sufficient remedies for any breach, that others will not independently develop substantially equivalent proprietary

information, or that third parties will not otherwise gain access to our trade secrets or other proprietary rights.

We may also be sued by third parties alleging that we have infringed their intellectual property rights.

Such lawsuits are expensive, time-consuming and divert management's focus away from other business

If we are found to be infringing the intellectual property of others, we could be required to cease certain activities, alter our products or processes, or pay licensing fees, any of which could cause unexpected costs and delays that

may materially adversely affect us.

If we are unable to obtain a required license on acceptable terms, or if we are unable to design around any third-party patent, we may be unable to sell some of our products and services, which could reduce

Additionally, if we do not prevail in such lawsuits, a court may find damages or award other remedies in favor of the opposing party, which may materially adversely affect our earnings.

The biomedical and life sciences industries that we serve are under constant pressures to increase the predictability of or reduce healthcare costs, all of which may

materially adversely affect our business and financial results due to our role in the healthcare supply chain.

Our Life Sciences products are sold primarily to research scientists at biomedical and life sciences companies and at academic research institutions.

Development spending by our customers and the availability of

government research funding can fluctuate due to changes in available resources, mergers of pharmaceutical and biotechnology companies, spending priorities, general economic conditions and institutional and governmental budgetary policies.

Efforts to reduce or increase the predictability of healthcare costs may impact all stages of the healthcare supply chain, including the acquisition of antibodies, diagnostic reagents, diagnostic kits and other immunoreagents for biomedical

research and antibody manufacturing.

In addition, consolidation trends in the pharmaceutical, biotechnology and diagnostic industries have served to create fewer customer accounts and to concentrate purchasing decisions for some customers.

Failure to anticipate and respond to competitors’ actions may materially adversely affect the future sales and earnings of Life Sciences and, therefore, Janel.

Risk Factors Related To Janel’s Manufacturing Business

Indco faces aggressive competition from competitors with greater financial resources.

Indco is a producer of industrial mixers and mixing equipment for a variety of industries.

The industrial mixer manufacturing industry is highly fragmented with low barriers to entry.

This market is addressed by companies ranging in size from large, publicly held concerns with resources greater than those of Indco to small

privately-owned entities.

New competitors emerge annually, and many aggressively market through electronic media.

Our competitors may be more innovative than us, and as a result, Indco may be unable to compete effectively.

Because most of Indco’s contracts are individual purchase orders and not long-term agreements, Indco may not be able to generate a similar amount of

revenue in the future.

Indco must bid or negotiate each of its contracts separately, and when it completes a contract, there is generally no continuing source of revenue under that contract.

As a result, Indco cannot assure that it will have a continuing stream of revenue from any contract.

Indco’s failure to generate new business on an ongoing basis would materially impair its

ability to operate profitably.

Any decrease in the availability, or increase in the cost, of raw materials could materially affect Indco’s revenue and earnings.

The availability of certain critical raw materials is subject to factors that are not within Indco’s control.

In some cases, these critical raw materials are purchased from suppliers operating

in countries that may be subject to unstable political and economic conditions, or there may be other supply chain issues related to the procurement of such raw materials, including as a result of the COVID-19 pandemic or climate change.

While Indco has historically been able to source its raw materials from an assortment of suppliers, at any given time, Indco may be unable to obtain an adequate supply of critical raw materials

on a timely basis, at prices and other terms acceptable to it, or at all.

The availability of certain critical raw materials such as motors, gear drivers, motor controls, standard hardware products, castings and steel bars, plates and shafts are subject to factors that are not within

Indco’s control.

In some cases, these critical raw materials are purchased from suppliers operating in countries that may be subject to unstable political and economic conditions, or there may be other supply chain issues related to the

procurement of such raw materials, including as a result of the COVID-19 pandemic, international conflicts, or climate change.

While Indco has historically been able to source its raw materials from an assortment of suppliers, at any given time, Indco may be unable to obtain an adequate supply of critical raw materials on a timely basis,

at prices and other terms acceptable to it, or at all.

If Indco is unable to obtain adequate and timely deliveries of required raw materials, it may be unable to timely manufacture sufficient quantities of products.

cause Indco to lose sales, incur additional costs, delay new product introductions or suffer harm to Indco’s reputation.

This could cause Indco to

lose sales, incur additional costs, delay new product introductions or suffer harm to Indco’s reputation.

If suppliers increase the price of critical raw materials or are unwilling or unable to meet Indco’s demand, it may not have alternative sources of supply.

In addition, costs of certain

critical raw materials have been volatile due to factors beyond Indco’s control.

Raw material costs are included in Indco’s contracts with customers, but in some cases Indco is exposed to changes in raw material costs from the time purchase

orders are placed to when it purchases the raw materials for production.

Changes in business conditions could adversely affect Indco’s ability to recover rapid increases in raw material costs and may adversely affect Indco’s, and therefore

In addition, costs of certain critical raw materials

have been volatile due to factors beyond Indco’s control.

Raw material costs are included in Indco’s contracts with customers, but in some cases Indco is exposed to changes in raw material costs from the time purchase orders are placed to when

it purchases the raw materials for production.

Changes in business conditions may have a material adverse effect on Indco’s ability to recover rapid increases in raw material costs and may materially adversely affect Indco’s, and, therefore,

Janel’s, results of operations.

Failure to obtain and retain skilled technical personnel could adversely affect Indco’s operations.

Indco’s production facilities require skilled personnel to operate and provide technical services and support for its business.

Competition for the personnel required for Indco’s business

intensifies as activity increases.

In periods of high utilization, it may become more difficult to find and retain qualified individuals.

This could increase Indco’s costs or have other adverse effects on its operations.

If Indco’s customers successfully assert product liability claims against it due to defects in Indco’s products, its operating results may suffer and its

reputation may be harmed.

Indco faces an inherent risk of exposure to claims in the event that the failure, use or misuse of its products results, or is alleged to result, in bodily injury, property damage or economic

While Indco believes that it meets or exceeds existing professional specification standards recognized or required in the industries in which it operates, Indco has been subject to claims in the past, and it may be subject to claims in the

A successful product liability claims or series of claims against Indco, or a significant warranty claim or series of claims against it, could materially decrease its liquidity, and therefore Janel’s financial condition.

The extensive environmental, health and safety regulatory regimes applicable to Indco’s operations create potential exposure to significant liabilities.

The nature of Indco’s manufacturing business subjects its operations to numerous and varied federal, state, local and international laws and regulations relating to pollution, protection of

public health and the environment, natural resource damages and occupational safety and health.

Failure to comply with these laws and regulations, or with the permits required for Indco’s operations, could result in fines or civil or criminal sanctions, third-party claims for property

damage or personal injury, and investigation and cleanup costs.

Potentially significant expenditures could be required in order to comply with new environmental laws or requirements that may be adopted or imposed in

The nature of Indco’s manufacturing business subjects its operations to numerous and varied federal, state, local and international laws and regulations relating to pollution, protection of public health and the

environment, natural resource damages and occupational safety and health.

Failure to comply with these laws and regulations, or with the permits required for Indco’s operations, could result in fines or civil or criminal sanctions, third-party

claims for property damage or personal injury and investigation and cleanup costs.

Potentially significant expenditures could be required in order to comply with new environmental laws or requirements that may be adopted or imposed in the

Indco has used, and currently uses, certain substances that are considered hazardous, extremely hazardous or toxic under worker safety and health laws and regulations.

Although Indco implements

controls and procedures designed to reduce continuing risk of adverse impacts and environmental, health, and safety issues, Indco could incur substantial cleanup costs, fines and civil or criminal sanctions, and third-party property damage or

personal injury claims as a result of violations, non-compliance or liabilities under these regulatory regimes.

As a manufacturing business, Indco also must comply with federal and state environmental laws and regulations which relate to the manner in which Indco stores and disposes of materials and the

reports that Indco is required to file.

Although Indco implements controls and procedures designed to reduce

the continuing risk of adverse impacts and environmental, health and safety issues, Indco could incur substantial cleanup costs, fines and civil or criminal sanctions, and third-party property damage or personal injury claims as a result of

violations, non-compliance or liabilities under these regulatory regimes.

As a manufacturing business, Indco also must comply with federal and state environmental laws and regulations that relate to the manner in which Indco stores and disposes of materials and the related reports that

Indco is required to file.

Indco cannot ensure that it will not incur additional costs to maintain compliance with environmental laws and regulations or that it will not incur significant penalties for failure to be in compliance.

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Indco employs lean manufacturing techniques and, therefore, carries little inventory.

Indco could experience prolonged

periods of reduced production due to unforeseen catastrophic events occurring in or around its facility in Indiana, including an outbreak of an infectious disease such as COVID-19.

As a result, Indco may be unable to shift manufacturing

capabilities to alternate locations, accept materials from suppliers, meet customer shipment needs or address other severe consequences that may be encountered, and Indco may suffer damage to its reputation.

Indco’s, and therefore Janel’s,

financial condition and results of operations could be materially adversely affected were such events to occur.

Risk Factors Related To Janel’s Life Sciences Business

It may be difficult for Life Sciences to implement its strategies for revenue growth in light of competitive challenges.

Life Sciences faces significant competition across many of its product lines.

Competitors include companies ranging from start-up companies, which may be able to more quickly respond to

customers’ needs, to large multinational companies, which may have greater financial, marketing, operational, and research and development resources than the Company.

In addition, consolidation trends in the pharmaceutical, biotechnology and diagnostics industries have served to create fewer customer accounts and to concentrate purchasing decisions for some

Failure to anticipate and respond to competitors’ actions may impact the future sales and earnings of Life Sciences and therefore Janel.

If Life Sciences does not compete effectively, its business may be harmed.

Life Sciences encounters aggressive competition from numerous competitors in many areas of its business.

It may not be able to compete effectively with all of these competitors.

competitive, Life Sciences must develop new products and periodically enhance its existing products.

We anticipate that Life Sciences may also have to adjust the prices of many of its products to stay competitive.

In addition, new competitors,

technologies or market trends may emerge to threaten or reduce the value of our product lines.

If Life Sciences does not introduce new products in a timely manner, it may lose market share and be unable to achieve revenue growth targets.

Life Sciences sells many of its products in industries characterized by frequent new product and service introductions and evolving customer needs and industry standards.

Many of the businesses

competing with Life Sciences in these industries have significant financial and other resources to invest in new technologies, substantial intellectual property portfolios, significant experience in new product development, regulatory expertise,

manufacturing capabilities and established distribution channels to deliver products to customers.

Failure to innovate and develop new products may impact the future sales and earnings of Life Sciences and therefore Janel.

The manufacture and sale of products and services may expose us to product and other liability claims for which we could have substantial liability.

Life Sciences faces an inherent business risk of exposure to product and other liability claims if its products, services or product candidates are alleged or found to have caused injury,

damage or loss.

While we retain product liability insurance, we may be unable to obtain insurance with adequate levels of coverage for potential liability on acceptable

terms or claims of this nature may be excluded from coverage under the terms of any insurance policy that we obtain.

If we are unable to obtain such insurance or the amounts of any claims successfully brought against us substantially exceed our coverage, then our business could be adversely impacted.

Changes in governmental regulations may reduce demand for our products or increase our expenses.

Life Sciences competes in markets in which it or its customers must comply with federal, state, local and foreign regulations, such as environmental, health and safety, and food and drug

We develop, configure and market our products to meet customer needs created by these regulations.

Any significant change in these regulations could reduce demand for our products or increase our costs of producing these products.

The Life Sciences business operates from three locations, which exposes it to certain risks.

Our Life Sciences business operates out of three locations in Davis, California, Aurora, Colorado and Bloomington, Minnesota.

Any significant disruption of those operations for any reason, such

as strikes or other labor unrest or constraints, including as a result of COVID-19 vaccine mandates, power interruptions, fire, earthquakes, outbreaks of infectious diseases such as COVID-19, or other events beyond our control, could adversely

affect our sales and customer relationships and therefore adversely affect our business.

The success of Life Sciences depends on its ability to continually produce products that meet high quality standards such as purity, reproducibility

and/or absence of cross- reactivity.

Product quality and reputation are key purchasing decision factors for our Life Sciences customers.

While our Life Sciences operations have experienced and qualified personnel, long operating

histories and substantial production systems and protocols in place, failure on our part to meet our customers’ high-quality product expectations (in particular with respect to product purity, reproducibility and specificity) could adversely

impact our business.

Indco could experience prolonged periods of reduced

production due to unforeseen catastrophic events occurring in or around its facility in Indiana, including an outbreak of an infectious disease such as COVID-19.

As a result, Indco may be unable to shift manufacturing capabilities to alternate

locations, accept materials from suppliers, meet customer shipment needs or address other severe consequences that may be encountered, and Indco may suffer damage to its reputation.

Indco’s, and, therefore, Janel’s, financial condition and

results of operations may be materially adversely affected were such events to occur.

Risk Factors Related To Ownership of Janel’s Common Stock

Janel’s officers and directors and one of its stockholders have a controlling influence over Janel.

Janel’s officers and directors control the vote of approximately 69.7% of the outstanding shares of Janel’s common stock as of September 30, 2021, which includes Janel common stock such persons can acquire through the exercise of vested options granted to them.

a result, Janel’s officers and directors control the election of Janel’s directors and therefore have the ability to control the affairs of Janel.

Furthermore, one particular investor in the Company has the right to appoint 50% of the members

of Janel’s board of directors.

As a result, these officers, directors and stockholders have controlling influence over, among other things, the ability to amend Janel’s certificate of incorporation and bylaws or effect or

preclude fundamental corporate transactions involving Janel, including the acceptance or rejection of any proposals relating to a merger of Janel or an acquisition of Janel by another entity.

The interests of these officers, directors and

stockholders may conflict with those of other stockholders.

This concentration of ownership may also delay, deter or prevent a change in control of Janel, and some transactions may be more difficult or impossible without the support of these

Janel’s officers and directors control the vote of approximately 61.7% of the outstanding shares of Janel’s common stock as of September 30, 2022, which includes Janel common stock such persons can acquire

through the exercise of vested options granted to them.

As a result, Janel’s officers and directors control the election of Janel’s directors and, therefore, have the ability to control the affairs of Janel.

Furthermore, one particular investor

in the Company has the right to appoint 50% of the members of Janel’s board of directors.

As a result, these officers, directors and stockholders have controlling influence over, among other things, the ability to amend Janel’s certificate of incorporation and bylaws or effect or preclude fundamental

corporate transactions involving Janel, including the acceptance or rejection of any proposals relating to a merger of Janel or an acquisition of Janel by another entity.

The interests of these officers, directors and stockholders may conflict

with those of other stockholders.

This concentration of ownership may also delay, deter or prevent a change in control of Janel, and some transactions may be more difficult or impossible without the support of these parties.

It is unlikely that Janel will issue dividends on its common stock in the foreseeable future.

Janel has never declared nor paid cash dividends on its common stock, and it does not intend to pay dividends in the foreseeable future.

The payment of dividends in the future will be at the

discretion of Janel’s board of directors.

The payment of dividends in the future will be at the discretion of Janel’s

board of directors.

Janel’s stock price is subject to volatility.

Janel’s common stock trades on the Pink tier of the OTC market under the symbol “JANL.” The market price of Janel’s common stock has been subject to significant fluctuations.

absence of a true market for Janel shares and thus a valid valuation is not readily maintained.

There is an absence of a true market

for Janel shares and thus a valid valuation is not readily maintained.

This result is caused in part by the concentrated holdings of Janel, which has led to abnormal price volatility.

Such fluctuations as well as economic

conditions generally may adversely affect the market price of Janel’s common stock.

We may issue shares of preferred stock with greater rights than our common stock.

Our certificate of incorporation authorizes our board of directors to issue shares of preferred stock and to determine the price and other terms for those shares without the

approval of our stockholders.

Any such preferred stock we may issue in the future could rank ahead of our common stock with respect to certain rights or obligations, including in terms of dividends, liquidation rights, and voting rights.

Such fluctuations as well as economic conditions generally

may adversely affect the market price of Janel’s common stock.

Our common stock is not as frequently traded as compared to the volume of trading activity associated with larger companies whose shares trade on the larger national exchanges.

Because of this limited liquidity,

stockholders may be unable to sell their shares at the prices or volumes they desire.

As a result, the trading price of our shares may occasionally fluctuate drastically.

The trading price may be affected by a number of factors including events

described in the risk factors set forth in this report as well as our operating results, financial condition, announcements, general conditions in the industry and the financial markets and other events or factors.

In recent years, broad stock

market indices, in general, and smaller capitalization companies, in particular, have experienced substantial price fluctuations.

In a volatile market, we may experience wide fluctuations in the market price of our common stock.

fluctuations may have a negative effect on the market price of our common stock.

We have issued, and may continue to issue, shares of preferred stock with greater rights than our common stock.

Our certificate of incorporation authorizes our board of directors to issue shares of preferred stock and to determine the price and other terms for those shares without the approval of our stockholders.

September 30, 2022, for example, we had 11,368 shares of Series C Cumulative Preferred Stock outstanding.

Any such preferred stock we may issue in the future could rank ahead of our common stock with respect to certain rights or obligations,

including in terms of dividends and liquidation rights.

Janel has no assurance of a continued public trading market.

Janel’s common stock is quoted in the over-the-counter market on the Pink tier of the OTC market and, to the extent the market price of our common stock falls below $5.00 per share, may be

subject to the low-priced security or so-called “penny stock” rules that impose additional sales practice requirements on broker-dealers who sell such securities.

For any transaction involving a penny stock, the rules require, among other things,

the delivery, prior to the transaction, of a disclosure schedule required by the SEC relating to the penny stock market.

Janel’s common stock is quoted in the over-the-counter market on the Pink tier of the OTC market and, to the extent the market price of our common stock falls below $5.00 per share, may be subject to the

low-priced security or so-called “penny stock” rules that impose additional sales practice requirements on broker-dealers who sell such securities.

For any transaction involving a penny stock, the rules require, among other things, the

delivery, prior to the transaction, of a disclosure schedule required by the SEC relating to the penny stock market.

The broker-dealer also must disclose the commissions payable to both the broker-dealer and the registered representative and

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Finally, monthly statements must be sent disclosing recent price information for the penny stocks held in the customer’s account.

These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules.

These disclosure requirements may have the effect of reducing the level of

trading activity in the secondary market for the stock that is subject to these penny stock rules.

Consequently, to the extent we are subject to the penny stock rules, such rules may affect the ability of broker-dealers to trade our securities.

As a result, characterization as a “penny

stock” can discourage investor interest in and limit the marketability of our common stock.

As a result, characterization as a “penny stock” can discourage investor interest in and limit the marketability of our common stock.

Janel incurs significant costs to comply with the laws and regulations affecting public companies, which could harm its business and results of operations.

Janel is subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Sarbanes-Oxley Act of 2002, as amended (the “Sarbanes- Oxley

Act”), and other applicable securities rules and regulations.

These rules and regulations have increased and will continue to increase Janel’s legal, accounting and financial compliance costs and have made, and will continue to make, some

activities more time-consuming and costly.

For example, these rules and regulations could make it more difficult and more costly for Janel to obtain director and officer liability insurance, and it may be required to accept reduced policy limits

and coverage or to incur substantial costs to maintain the same or similar coverage.

These rules and regulations could also make it more difficult for Janel to attract and retain qualified persons to serve on its board of directors or its board committees or as executive

Janel’s management and other personnel devote a substantial amount of time to these compliance initiatives.

As a result, management’s attention may be diverted from other business concerns, which could harm Janel’s business and

operating results.

Janel is subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Sarbanes-Oxley Act of 2002, as amended (the “Sarbanes- Oxley Act”), and other

applicable securities rules and regulations.

These rules and regulations have increased, and will continue to increase, Janel’s legal, accounting and financial compliance costs and have made, and will continue to make, some activities more

time-consuming and costly.

For example, these rules and regulations could make it more difficult and more costly for Janel to obtain director and officer liability insurance, and Janel may be required to accept reduced policy limits and

coverage or to incur substantial costs to maintain the same or similar coverage.

These rules and regulations could also make it more difficult for Janel to attract and retain qualified persons to serve on its board of directors or its board committees or as executive officers.

management and other personnel devote a substantial amount of time to these compliance initiatives.

As a result, management’s attention may be diverted from other business concerns, which could harm Janel’s business and operating results.

UNRESOLVED STAFF COMMENTS

1 unchanged sentence

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What changed 10-K

Item 1A. Risk Factors