What changed in this filing

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Item 9A. Controls and Procedures

2022-12-09 compared with 2021-12-27 · 838 added, 1012 removed, 878 unchanged (68% of the section changed)

1 unchanged sentence

Evaluation of Disclosure Controls and Procedures

Janel maintains a system of disclosure controls and procedures that is designed to provide reasonable assurance that information, which is required to be

disclosed in the reports that it files or submits under the Securities Exchange Act of 1934, as amended (“Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities

and Exchange Commission (“SEC”) and is accumulated and communicated to management, including its Chief Executive Officer and Principal Financial Officer, to allow timely decisions regarding required disclosures.

Any controls and procedures, no

matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

The Company’s management, with the participation of the Chief Executive Officer and Principal Financial Officer, has

evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of September 30, 2021, and based on their evaluation, has concluded that our disclosure controls and procedures were effective.

For purposes of conducting its 2021 evaluation of the effectiveness of the Company’s internal control over financial reporting, management has excluded the acquisition of ELFS,

completed on September 21, 2021, which constitutes 14 percent of total assets and 1 percent of income before income taxes of the Company, as of and for the year ended September 30, 2021.

Refer to Note 2 – Acquisitions in Part II, Item 8 of this

report for further discussion of the acquisition and its impact on the Company’s Consolidated Financial Statements.”

Janel maintains a system of disclosure controls and procedures that is designed to provide reasonable assurance that information, which is required to be disclosed in the reports that it files or

submits under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and is accumulated and communicated to management, including its Chief Executive Officer and

Principal Financial Officer, to allow timely decisions regarding required disclosures.

Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

Company’s management, with the participation of the Chief Executive Officer and Principal Financial Officer, has evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of September 30, 2022,

and based on their evaluation, has concluded that our disclosure controls and procedures were effective.

Management’s Annual Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting for the Company.

Internal control over

financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Exchange Act, as amended, as a process designed by, or under the supervision of, our Chief Executive Officer and Principal Financial Officer and effected by our

board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S.

GAAP and includes

those policies and procedures that:

(i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that

transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S.

GAAP, and that the Company’s receipts and expenditures are being made only in accordance with authorizations of management and

directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become

inadequate because of changes in conditions, or that the degree of compliance with policies or procedures may deteriorate.

Under the supervision and with the participation of our management, including our Chief Executive Officer and Principal Financial Officer, we have performed an

evaluation of the effectiveness of our internal control over financial reporting under the framework in Internal Control-Integrated Framework (2013) , issued by the Committee of Sponsoring Organizations

of the Commission.

Based on this assessment, management, including our Chief Executive Officer and Principal Financial Officer, has concluded that our internal control over financial reporting was effective as of September 30, 2021.

This Annual Report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial

Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to the exemption provided to issuers that are neither “large accelerated filers” nor “accelerated filers” under the

Dodd-Frank Wall Street Reform and Consumer Protection Act.

Internal control over financial reporting is defined in Rule

13a-15(f) or 15d-15(f) promulgated under the Exchange Act, as amended, as a process designed by, or under the supervision of, our Chief Executive Officer and Principal Financial Officer and effected by our board of directors, management and other

personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S.

GAAP and includes those policies and procedures that:

pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit

preparation of financial statements in accordance with U.S.

GAAP, and that the Company’s receipts and expenditures are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable

assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over

financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree

of compliance with policies or procedures may deteriorate.

Under the supervision and with the participation of our management, including our Chief Executive Officer and Principal Financial Officer, we have performed an evaluation of the effectiveness of our

internal control over financial reporting under the framework in Internal Control-Integrated Framework (2013) , issued by the Committee of Sponsoring Organizations of the Commission.

Based on this

assessment, management, including our Chief Executive Officer and Principal Financial Officer, has concluded that our internal control over financial reporting was effective as of September 30, 2022.

This Annual Report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting.

Management’s report was not subject

to attestation by the Company’s registered public accounting firm pursuant to the exemption provided to issuers that are neither “large accelerated filers” nor “accelerated filers” under the Dodd-Frank Wall Street Reform and Consumer Protection

Changes in Internal Control Over Financial Reporting

Other than the remediation efforts described below, there was no change in our internal control over financial reporting that occurred during the quarter ended

September 30, 2021 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Remedial Actions

As previously reported, in connection with the preparation of the Company’s Annual Report on Form 10-K for fiscal year 2020 and thereafter, we previously

identified a number of material weaknesses involving our Life Sciences and Logistics segments as well as our corporate office, as described below.

As part of our remediation actions we engaged an external consultant to assist in the development

and execution of a plan to remediate the material weaknesses related to our Life Sciences and Logistics segments and our Corporate office.

This process included review of our controls and implementation of new controls addressing the underlying

causes of the material weaknesses.

In connection with the preparation of the Company’s Annual Report on Form 10-K for fiscal year 2020, management identified certain material weaknesses as of

September 30, 2020.

In particular, the Company had inadequate controls over the following:

order entry, invoicing, collections and timeliness of revenue recognition in accordance with ASC Topic 606, Revenue from Contracts with Customers – Principal Agent

Consideration (“ASC Topic 606”) (Life Sciences)

review of sales orders including pricing, and revenue cut off procedures (Life Sciences)

assessment of gross versus net revenue recognition criteria in accordance with ASC Topic 606 (Logistics)

Financial Close Process

month-end closing activities (i.e.

journal entry review, account reconciliations, closing checklists, budget to actual analysis, review of financial package, inventory

account analysis, etc.) (Life Sciences)

inventory management and valuation of inventory (Life Sciences)

inventory valuation controls, inventory counts and reconciliation to general ledger (Life Sciences)

General IT Controls

accounting manager’s administrative access to financial accounting software and banking portal, roles and responsibilities around significant processes including financial

close without independent review or back-up results in segregation of duties issue (Life Sciences)

certain information technology general controls, including segregation of duties, user access, change management, data back-ups and review of SOC 1 and 2 reports from critical vendors, some of

which could have a direct impact on the Company’s financial reporting (Life Sciences)

prevention and timely detection of funds transfers to an unauthorized account (Logistics)

segregation of duties between Principal Financial Officer and corporate accountant regarding administrative access to financial accounting software and

banking portal and the financial close process (Corporate).

With respect to the material weaknesses described above we designed and implemented the specific remediation initiatives described below:

We designed and implemented certain revenue general controls that enhanced the processes associated with sales order entry and review of pricing, invoicing, collections, revenue cut-off

procedures, and to ensure timeliness of revenue recognition in accordance with ASC Topic 606.

We implemented formal processes, policies and procedures supporting our financial close process, including (i) frequency of balance sheet reconciliations, (ii) review of accounting memorandums,

and (iii) reviewing journal entries in a timely manner.

Additionally, we have increased the amount of formal documentation supporting journal entry reviews, balance sheet reconciliations, and other month end close activities.

Several valuation and analyses controls were implemented to improve the effectiveness and efficiency over the management of inventory and the inventory valuation process.

We designed and implemented certain IT general controls that address risks associated with user access and security, focused training for control owners to help sustain effective control

operations, and implemented controls relating to segregation of duties to strengthen user access controls and security.

These changes were made in operational controls as well as access to banking portals.

We made certain personnel changes within our accounting organization and implemented enhanced processes and procedures related to the review of principal-agent considerations around revenue

recognition in accordance with ASC Topic 606, including the addition of accounting personnel with technical accounting expertise who will review transactions and the engagement of an additional third-party service provider to supplement

the aforementioned team, as needed.

We implemented a formal review of charge codes in fiscal 2021;

updated company policies and controls with respect to the prevention and timely detection of funds transfers to unauthorized accounts including multifactor authentication, implemented a new

payment processing validation procedure, updated internal firewall protocols related to e-mails and conducted updated training on finance-related internal controls policies.

As a result of our remediation efforts, we determined that the material weaknesses at our Corporate office have been remediated as of September 30, 2021.

There was no change in our internal control over financial reporting that occurred during the quarter ended September 30, 2022 that has materially affected, or is reasonably likely to materially

affect, our internal control over financial reporting.

OTHER INFORMATION

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Director, Chair of Audit Committee

Director, Senior Advisor for Mergers and Acquisitions and Chair of Compensation Committee

Director, Senior Advisor for Mergers and Acquisitions

Director, Chair of Nominating and Corporate Governance Committee

Karen Miller Ryan

Director, Chair of Compensation Committee

Principal Financial Officer, Treasurer and Secretary

Dominique Schulte has served as a Director of Janel since November 2015 and as Board Chair since May 8, 2018.

October 1, 2018, Ms.

Schulte has served as the Company’s President and Chief Executive Officer.

Schulte practiced law at Simpson Thacher & Bartlett LLP in New York, from 1999 through 2009, where she specialized in corporate and

securities law and oversaw a number of successful securities transactions.

Dominique Schulte has served as a Director of the Company since November 2015 and as Board Chair since May 8, 2018.

Since October 1, 2018, Ms.

served as the Company’s President and Chief Executive Officer.

Schulte practiced law at Simpson Thacher & Bartlett LLP in New York from 1999 through 2009, where she specialized in corporate and securities law and oversaw a number of

successful securities transactions.

Schulte is the managing member of Oaxaca Group, LLC (“Oaxaca”), which is the Company’s largest individual shareholder.

Schulte is well-qualified to serve as a

member of the Company’s board of directors based on her extensive experience in the practice of corporate and securities law.

Killackey was elected to the Company’s board of directors in September 2014 and served as Chief Executive

Officer from February 2015 through September 2018.

Schulte is well-qualified to serve as a member of the Company’s board of directors

based on her extensive experience in the practice of corporate and securities law.

Killackey was elected to the Company’s board of directors in September 2014 and served as Chief Executive Officer from February 2015 through

September 2018.

Since October 1, 2018, Mr.

Killackey has served as the Company’s Chief Information Officer.

Killackey previously owned Progressive Technology Partners, LLC, a technology consultancy firm,

which he founded in 2001.

Given Janel’s and its subsidiaries’ reliance on technology, Mr.

Killackey’s background and experience are valuable to the Company, and, therefore, he is well-qualified to serve as a member of the Company’s board of

Killackey previously owned Progressive Technology Partners, LLC, a technology consultancy firm, which he founded in 2001.

Janel’s and its subsidiaries’ reliance on technology, Mr.

Killackey’s background and experience are valuable to the Company, and, therefore, he is well-qualified to serve as a member of the Company’s board of directors.

Gerard van Kesteren has served as a Director of Janel since November 2015.

From 1999 until 2014, Mr.

served as the Chief Financial Officer of Kuehne + Nagel Group, an international freight forwarder and leading global provider of innovative and fully integrated supply chain solutions.

van Kesteren has served as a director of Gategroup

Holding AG since April 2015.

van Kesteren is well-qualified to serve as a member of the Company’s board of directors based on his extensive experience in the freight forwarding and logistics industry.

van Kesteren serves as the chair of

the Audit Committee.

van Kesteren served as the Chief Financial Officer of

Kuehne + Nagel Group, an international freight forwarder and leading global provider of innovative and fully integrated supply chain solutions.

van Kesteren has served as a director of Raben Group NV (Netherlands) and Planzer Holding AG

(Switzerland) since 2015, and CTP NV (Netherlands) since 2021 and Deufol SE (Germany) since 2022.

van Kesteren is well-qualified to serve as a member of the Company’s board of directors based on his extensive experience in the freight

forwarding and logistics industry.

van Kesteren serves as the chair of the Audit Committee.

Gonzalez, II has served as a Director of Janel since June 2016.

Prior to that, he was a Senior Managing

Director of Janel Group, following the August 2014 purchase by the Company of Alpha International and President Container Lines (“Alpha/PCL”), which he co-founded in 1979.

Prior to that, he was a Senior Managing Director of Janel Group, following the

August 2014 purchase by the Company of Alpha International and President Container Lines (“Alpha/PCL”), which he co-founded in 1979.

Gonzalez has been involved in the transportation business since 1969.

Gonzalez is well-qualified to serve as a member of the Company’s board of directors based on his extensive experience in the freight forwarding and logistics industry.

Gonzalez serves as chair of the Compensation Committee.

Gonzalez is well-qualified to serve

as a member of the Company’s board of directors based on his extensive experience in the freight forwarding and logistics industry.

Gonzalez served as chair of the Compensation Committee through September 28, 2022.

Melsen has served as a Director of Janel since January 2018.

Prior to that, he was Chief Financial Officer

and Vice President of Human Resources for Healthsense, Inc., a leading provider of passive remote monitors for seniors from 2014 to 2015; and was Vice President-Finance, Treasurer and Chief Financial Officer of Techne Corporation (now

Bio-Techne Corporation), a holding company for biotechnology and clinic diagnostic brands.

He also served as Interim Chief Executive Officer of Techne Corporation from December 2012 through March 2013.

Melsen has over 40 years of business

experience, primarily in the accounting and finance areas.

He has served as Chief Financial Officer at a number of companies and has 19 years of public accounting experience, including nine years as partner at Deloitte.

well-qualified to serve as a member of the Company’s board of directors based on his extensive experience in accounting and finance.

Melsen serves as Chair of the Nominating and Governance Committee.

Karen Miller Ryan , also known professionally as Karen Padgett, has served as a Director of Janel since

October 2021.

Prior to that, she served as Vice President of Global Marketing and Vice President of the Antibody Business Unit of Bio-Techne, a public global life science business from 2014 until 2019.

Prior to that, he was Chief Financial Officer and Vice President of Human Resources

for Healthsense, Inc., a leading provider of passive remote monitors for seniors from 2014 to 2015; and was Vice President-Finance, Treasurer and Chief Financial Officer of Techne Corporation (now Bio-Techne Corporation), a holding company for

biotechnology and clinic diagnostic brands.

Melsen has over 45 years of business experience, primarily in the accounting and finance areas.

He has served as Chief Financial Officer at a number of companies and has 19 years of public

accounting experience, including nine years as partner at Deloitte.

Melsen is well-qualified to serve as a member of the Company’s board of directors based on his extensive experience in accounting and finance.

Melsen serves as Chair of

the Nominating and Governance Committee.

Karen Miller Ryan , also known professionally as Karen Padgett, has served as a Director of Janel since October 2021.

Prior to that, she served as Vice

President of Global Marketing and Vice President of the Antibody Business Unit of Bio-Techne, a public global life science business from 2014 until 2019.

From 1996 until 2014, Ms.

was the founder and Chief Executive Officer of Novus Biologicals, a private research reagent company, which she successfully grew until its sale to Bio-Techne.

Miller Ryan is well qualified to serve as a member of the Company’s board of

directors based on her extensive life science and executive leadership experience.

Verde is Principal Financial Officer, Treasurer and Secretary of the Company and has served in such

capacities since May 2018.

From February 2018 to May 2018, Mr.

Miller Ryan was the founder and Chief Executive Officer of Novus

Biologicals, a private research reagent company, which she successfully grew until its sale to Bio-Techne.

Miller Ryan is well qualified to serve as a member of the Company’s board of directors based on her extensive life science and

executive leadership experience.

On September 28, 2022, Ms.

Miller Ryan was appointed as chair of the Compensation Committee.

Verde is Principal Financial Officer, Treasurer and Secretary of the Company and has served in such capacities since May 2018.

From February 2018

to May 2018, Mr.

Verde served as Controller of the Company.

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Verde served as a consultant for the Company.

Prior to joining the Company, from December 2016 to

February 2017, Mr.

Verde served as a consultant for Xylem Inc., a publicly traded manufacturer and servicer of engineered solutions.

Verde served from November 2014 to November 2016 as Subsidiary Controller for Teledyne Bolt, Inc., a

developer, manufacturer and distributor of marine seismic data acquisition equipment and underwater remotely operated robotic vehicles and subsidiary of Teledyne Technologies Inc.

Prior to joining the Company, from December 2016 to February 2017, Mr.

Verde served as a consultant

for Xylem Inc., a publicly traded manufacturer and servicer of engineered solutions.

Verde served from November 2014 to November 2016 as Subsidiary Controller for Teledyne Bolt, Inc., a developer, manufacturer and distributor of marine

seismic data acquisition equipment and underwater remotely operated robotic vehicles and subsidiary of Teledyne Technologies Inc.

(“Teledyne”).

From January 2012 to November 2014, Mr.

served as Vice President and Corporate Controller for Bolt Technology Corporation, a then-publicly traded manufacturer and distributor of geophysical equipment and industrial clutches, which was acquired by Teledyne in November 2014.

has 17 years of public accounting experience, including eight years as Audit manager at Deloitte.

Verde served as Vice President and Corporate Controller for

Bolt Technology Corporation, a then-publicly traded manufacturer and distributor of geophysical equipment and industrial clutches, which was acquired by Teledyne in November 2014.

Verde has 17 years of public accounting experience, including

eight years as Audit manager at Deloitte.

Directors hold office for a one-year term until they are re-elected, or their successors have been duly elected and qualified.

The executive officers are

elected by the board of directors on an annual basis and serve under the direction of the Board.

The executive officers are elected by the Board of Directors on an

annual basis and serve under the direction of the Board.

Executive officers devote all of their business time to the Company’s affairs.

Delinquent Section 16(a) Reports

Section 16(a) of the Exchange Act requires the Company’s directors, executive officers and persons who beneficially own more than 10% of its Class A common stock to file reports of

ownership and changes in ownership with the Commission and to furnish the Company with copies of all such reports they file.

Based on the Company’s review of the copies of such forms received by it, or written representations from certain reporting persons, the Company believes that none of its

directors, executive officers or persons who beneficially own more than 10% of the Company’s Class A common stock failed to comply with Section 16(a) reporting requirements during the fiscal year ended September 30, 2021, except for Mr.

van Kesteren and Mr.

Gonzalez , each of whom had one late Form 4 filing reporting one transaction.

Section 16(a) of the Exchange Act requires the Company’s directors, executive officers and persons who beneficially own more than 10% of its Class A common stock to file reports of ownership and

changes in ownership with the SEC and to furnish the Company with copies of all such reports they file.

Based on the Company’s review of the copies of such forms received by it, or written representations from certain reporting persons, the Company believes that none of its directors, executive

officers or persons who beneficially own more than 10% of the Company’s common stock failed to comply with Section 16(a) reporting requirements during the fiscal year ended September 30, 2022.

Board of Directors

During the fiscal year ended September 30, 2021, the board of directors met seventeen times.

directors attended fewer than 75% of the aggregate of the total number of meetings of the board of directors of the Company and the total number of meetings held by all board committees in which that

director served.

During the fiscal year ended September 30, 2022, the board of directors met fourteen times.

No incumbent director attended fewer than 75% of the aggregate of the total number of meetings of the

board of directors of the Company and the total number of meetings held by all board committees in which that director served.

The Company’s Board of Directors has established an Audit Committee, a Compensation Committee and a Nominating and Corporate Governance Committee.

committee operates under a charter that has been approved by the Company’s board of directors and is available on its website located at www.janelcorp.com .

Each committee operates under a charter that has

been approved by the Company’s board of directors and is available on its website located at www.janelcorp.com .

Audit Committee.

The Company’s audit committee (“Audit Committee”) oversees its corporate accounting and financial reporting process.

The Audit Committee consists of

The Audit Committee consists of Mr.

van Kesteren as the chair, Mr.

2 unchanged sentences

The Audit Committee met five times during fiscal 2022.

The Audit Committee has the

following responsibilities, among others, as set forth in the audit committee charter:

reviewing and assessing the effectiveness of external auditors, their independence from Janel and any additional assignments they may be given, as well as reviewing their

appointment, termination, and remuneration;

reviewing and assessing the scope and plan of the audit, the examination process, audit results and reports, as well as whether auditor recommendations have been

implemented by management;

recommending the approval of the annual internal audit concept and report, including the responses of management thereto;

The Audit Committee has the following responsibilities, among others, as

set forth in the Audit Committee charter:

reviewing and assessing the effectiveness of external auditors, their independence from Janel and any additional assignments they may be given, as well as reviewing their appointment, termination and

remuneration;

reviewing and assessing the scope and plan of the audit, the examination process, audit results and reports, as well as whether auditor recommendations have been implemented by management;

recommending the approval of the annual internal audit report, including the responses of management thereto;

assessing management’s established risk assessment and any proposed measures to reduce risk;

assessing the Company’s efforts and policies of compliance with relevant laws and regulations;

reviewing, in tandem with external auditors, as well as the Chief Executive Officer and the Principal Financial Officer, whether accounting principles and the financial

control mechanisms of Janel and its subsidiaries are appropriate in view of Janel’s size and complexity; and

reviewing, in tandem with external auditors, as well as the Chief Executive Officer and the Principal Financial Officer, whether accounting principles and the financial control mechanisms of Janel and its

subsidiaries are appropriate in view of Janel’s size and complexity; and

reviewing annual and interim statutory and consolidated financial statements intended for publication and recommending such financial statements to the board of directors.

The Company’s board of directors designated Gerard van Kesteren as an audit committee financial expert considering his experience as Chief Financial Officer of

Kuehne + Nagel Group.

In addition, the Company’s board of directors has determined that Mr.

The Company’s board of directors designated Gerard van Kesteren as an audit committee financial expert considering his experience as Chief Financial Officer of Kuehne + Nagel Group.

In addition, the

Company’s board of directors has determined that Mr.

Melsen’s extensive experience as a partner with Deloitte and his experience as Chief Financial Officer of Healthsense, Inc.

and Techne Corporation

qualifies him as an audit committee financial expert.

and Techne Corporation qualifies him as an audit committee financial

The board of directors of the Company has determined that Messrs.

Gonzalez, Melsen and van Kesteren and Ms.

Miller Ryan meet the definition of independent directors under the Company’s

The board of directors of the Company has determined that Ms.

Miller Ryan meet the definition of independent directors under the Company’s criteria.

The board of directors of the Company has

determined that Ms.

Miller Ryan and Mr.

Melsen are independent based on the Company’s independence criteria for audit committee membership which is based on the Nasdaq rules regarding audit

committee independence.

Furthermore, the board of directors of the Company has determined that Mr.

van Kesteren is not “independent” based on the Company’s independence criteria for audit committee membership, as he received an annual $20,000

consulting fee during the fiscal year 2021 for services rendered to the Company’s Logistics segment.

Melsen meet the Company’s independence criteria for audit committee membership, which is based on the Nasdaq rules regarding audit committee independence.

The board of directors of the Company, however, has

determined that Mr.

van Kesteren does not meet the Company’s independence criteria for audit committee membership, as he received an annual $40,000 consulting fee during the fiscal year 2022 for services rendered to the Company’s Logistics

The board of directors of the Company has also determined that Mr.

Gonzalez is not “independent” based on the Company’s independence criteria

for audit committee membership, as he received an annual $90,000 consulting fee and cost of health insurance of $19,000 during the fiscal year 2021 for services rendered to the Company’s Logistics segment.

Gonzalez does not meet the Company’s independence criteria for audit committee membership, as he received an annual $90,000 consulting fee and cost of health insurance of

$19,000 during the fiscal year 2022 for services rendered to the Company’s Logistics segment.

Compensation Committee

The Company’s compensation committee (the “Compensation Committee”) formulates, reviews and recommends compensation policies that are consistent with Janel’s

established compensation philosophy and that will enable it to attract and retain high-quality leadership.

The Company’s compensation committee (the “Compensation Committee”) formulates, reviews and recommends compensation policies that are consistent with Janel’s established compensation philosophy and

that will enable it to attract and retain high-quality leadership.

The Compensation Committee met four times during fiscal 2022.

The Compensation Committee has the following

responsibilities, among others, as set forth in the Compensation Committee’s charter:

The Compensation Committee has the following responsibilities, among others, as set forth in the Compensation Committee’s charter:

reviewing and approving the Company’s general compensation philosophy and objectives;

reviewing and approving the corporate goals and individual objectives relevant to the compensation of the Company’s Chief Executive Officer and evaluating the performance

of the Chief Executive Officer considering these objectives;

approving base salary amounts, incentive and bonus compensation amounts and individual stock and/or option grants and awards for the Chief Executive Officer and, based on

the recommendation of the Chief Executive Officer, all corporate officers at or above the Vice President level;

reviewing all forms of compensation for the Company’s senior management, including the form and amount of current salary, deferred salary, cash and non-cash benefits, and

all compensation plans;

reviewing and approving the corporate goals and individual objectives relevant to the compensation of the Company’s Chief Executive Officer and evaluating the performance of the Chief Executive Officer

considering these objectives;

approving base salary amounts, incentive and bonus compensation amounts and individual stock and/or option grants and awards for the Chief Executive Officer and, based on the recommendation of the Chief

Executive Officer, all corporate officers at or above the Vice President level;

reviewing all forms of compensation for the Company’s senior management, including the form and amount of current salary, deferred salary, cash and non-cash benefits, and all compensation plans;

reviewing the Company’s severance or similar termination payments and administering the Company’s stock option and other incentive compensation plans and programs;

6 unchanged sentences

Gonzalez, Melsen and van Kesteren and Ms.

Gonzalez serves as the chair of the

Compensation Committee.

Through September 28, 2022, Mr.

Gonzalez served as the chair of the Compensation

On September 28, 2022, Ms.

Miller Ryan was appointed as chair of the Compensation Committee.

The Company’s board of directors has determined that Messrs.

Gonzalez, Melsen and van Kesteren, and Ms.

Miller Ryan are independent members of the Compensation Committee.

Miller Ryan are independent members of

the Compensation Committee.

Nominating and Corporate Governance Committee

The Company’s nominating and corporate governance committee (the “Nominating and Corporate Governance Committee”) is responsible for developing and

implementing policies and procedures that are intended to assure that Janel’s board of directors and the boards of directors (or equivalent) of its subsidiaries will be appropriately constituted and organized to meet its fiduciary obligations

to the Company and its stockholders on an ongoing basis.

The Nominating and Corporate Governance Committee met four t imes during fiscal 2021.

Among other matters, the Nominating and Corporate Governance

Committee is responsible for the following, as set forth in the Nominating and Corporate Governance Committee’s charter:

making recommendations to Janel’s board of directors regarding matters and practices concerning the board, its committees and individual directors, as well as matters and

practices of the boards, committees and individual directors of each of Janel’s subsidiaries;

periodically evaluating the size, composition and governance structure of Janel’s board of directors and its committees and the boards and committees of Janel’s

subsidiaries and determining the future requirements of each such body;

periodically making recommendations concerning the qualifications, criteria, compensation and retirement age of members of Janel’s board of directors and the boards of its

subsidiaries, which recommendations, upon approval by Janel’s board of directors, shall be incorporated in Janel’s Corporate Governance Guidelines;

The Company’s nominating and corporate governance committee (the “Nominating and Corporate Governance Committee”) is responsible for developing and implementing policies and procedures that are

intended to assure that Janel’s board of directors and the boards of directors (or equivalent) of its subsidiaries will be appropriately constituted and organized to meet its fiduciary obligations to the Company and its stockholders on an ongoing

The Nominating and Corporate Governance Committee met four times during fiscal 2022.

Among other matters, the Nominating and Corporate Governance Committee is responsible for the following, as set forth in the Nominating and Corporate

Governance Committee’s charter:

making recommendations to Janel’s board of directors regarding matters and practices concerning the board, its committees and individual directors, as well as matters and practices of the boards, committees

and individual directors of each of Janel’s subsidiaries;

periodically evaluating the size, composition and governance structure of Janel’s board of directors and its committees and the boards and committees of Janel’s subsidiaries and determining the future

requirements of each such body;

periodically making recommendations concerning the qualifications, criteria, compensation and retirement age of members of Janel’s board of directors and the boards of its subsidiaries, which

recommendations, upon approval by Janel’s board of directors, shall be incorporated in Janel’s Corporate Governance Guidelines;

recommending nominees for election to Janel’s board of directors and the boards of its subsidiaries and establishing and administering a board evaluation process; and

reviewing timely nominations by stockholders for the election of individuals to Janel’s board of directors, and ensure that such stockholders are advised of any action

taken by the board of directors with respect thereto.

reviewing timely nominations by stockholders for the election of individuals to Janel’s board of directors and ensure that such stockholders are advised of any action taken by the board of directors with

respect thereto.

The Company’s Nominating and Corporate Governance Committee consists of the Company’s full board of directors.

Melsen serves as the chair of the Nominating

and Corporate Governance Committee.

Melsen serves as the chair of the Nominating and Corporate Governance Committee.

Independence of Directors

The Company is not currently subject to listing requirements of any national securities exchange or inter-dealer quotation system which has requirements that a

majority of the board of directors be “independent” and, as a result, is not at this time required to (and does not) have a board of directors comprised of a majority of independent directors.

Pursuant to Item 407(a) of Regulation S-K, however,

Janel must disclose each director that is independent under the independence standards of either the New York Stock Exchange or Nasdaq, as selected by Janel.

The Company has elected to use the independence standards prescribed under Nasdaq Rule

5605(2), which defines an “independent director” as a person who does not have any relationship with the Company which, in the opinion of the Company’s board of directors would interfere with the exercise of independent judgment in carrying out

the responsibilities of a director.

The Company is not currently subject to listing requirements of any national securities exchange or inter-dealer quotation system which has requirements that a majority of the board of directors be

“independent” and, as a result, is not at this time required to (and does not) have a board of directors comprised of a majority of independent directors.

Pursuant to Item 407(a) of Regulation S-K, however, Janel must disclose each director that

is independent under the independence standards of either the New York Stock Exchange or Nasdaq, as selected by Janel.

The Company has elected to use the independence standards prescribed under Nasdaq Rule 5605(a)(2), which defines an

“independent director” as a person who does not have any relationship with the Company which, in the opinion of the Company’s board of directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a

Based on the applicable criteria, the Company’s board of directors has determined that Mr.

Killackey is not independent, as he is an employee of the Company.

Schulte is not independent by virtue of the

fact that she is an Executive Officer of the Company.

Schulte is not independent by virtue of the fact that she is an Executive

Officer of the Company.

The board of directors has determined that Messrs.

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Director Compensation

During the Company’s fiscal year ended September 30, 2021, Mr.

Killackey, the Company’s Chief Information Officer, did not receive any additional compensation

for serving as a director.

Schulte waived any board compensation during fiscal year 2021.

The following table summarizes the compensation paid to the other directors for their services during the Company’s fiscal year ended September 30,

2021 (actual dollar amounts):

The following table summarizes the compensation paid to the Company’s non-executive directors for their services during the Company’s fiscal year ended September 30, 2022 (actual dollar amounts):

Fees Earned or

Paid in Cash (1)

Gerard van Kesteren

Karen Miller Ryan

Compensation is paid on a monthly basis.

1 unchanged sentence

Gerard van Kesteren – 4,999, John J.

Gonzalez II – 47,500, and Gregory J.

Melsen – 9,375.

Gonzalez II – 4,999, Gregory J.

Melsen – 11,875, and Karen Miller

Ryan – 2,500.

Represents compensation paid to Mr.

1 unchanged sentence

Represents compensation paid to Mr.

Gonzalez in connection with his consulting agreement.

Pursuant to the Company’s non-employee director compensation policy, for the fiscal year 2021 non-employee directors received a retainer at an annual rate of

$30,000, payable on a monthly basis, and 2,500 options, pursuant to the Amended and Restated Janel Corporation 2017 Equity Incentive Plan or such other equity plan that the Company may adopt from time to time.

Gonzalez in connection with his consulting arrangement and payment of medical insurance premiums.

Pursuant to the Company’s non-employee director compensation policy, for the fiscal year 2022 non-employee directors received a retainer at an annual rate of $40,000, payable on a monthly basis, and

2,500 options, pursuant to the Amended and Restated Janel Corporation 2017 Equity Incentive Plan or such other equity plan that the Company may adopt from time to time.

Directors who also serve as executive officers of the Company do not receive

additional compensation for their board service.

Committee chairs receive an additional retainer at an annual rate of $10,000.

According to the non-employee director compensation policy, non-employee

directors will be reimbursed for their reasonable travel and other expenses incurred to attend board of directors or board committee meetings.

According to the non-employee director compensation policy, non-employee directors will be reimbursed for their

reasonable travel and other expenses incurred to attend board of directors or board committee meetings.

Employment Arrangements

(actual dollar amounts)

On February 26, 2017, the Company entered into an agreement with Mr.

Gonzalez to serve as a Director and Senior Advisor for mergers and acquisitions

for the Company, effective October 1, 2017.

The original term of the agreement ended on September 30, 2021, and thereafter will renew automatically for an additional two-year term unless either party provides notice that it does not wish to

Under the terms of the agreement, during fiscal year 2021 the Company paid Mr.

Gonzalez an annual retainer pursuant to non-employee director compensation policy of $40,000 for his service as a director and chair of the Compensation

Committee, an annual consulting fee of $90,000 and the cost of health insurance of $19,000.

This agreement was renewed and for fiscal 2022 the Company pays Mr.

Gonzalez an annual retainer of $50,000 for his

service as a director and chair of the Compensation Committee, an annual consulting fee of $90,000 and the cost of health insurance of $19,000.

No active employment arrangements.

Code of Business Conduct and Ethics

The Company has adopted a code of business conduct and ethics, including a whistleblower policy that applies to all of its employees, including executive

officers and directors.

The code of business conduct and ethics, including our whistleblower policy is available on the Company’s website at www.janelcorp.com .

The Company intends to disclose, if required, any future amendments to, or

waivers from, the code of business conduct and ethics within four business days of the waiver or amendment through a website posting or by filing a Current Report on Form 8-K with the SEC.

The Company has adopted a code of business conduct and ethics, including a whistleblower policy, that applies to all of its employees, including executive officers and directors.

business conduct and ethics, including our whistleblower policy, is available on the Company’s website at www.janelcorp.com .

The Company intends to disclose, if required, any future amendments to, or waivers from, the code of business

conduct and ethics within four business days of the waiver or amendment through a website posting or by filing a Current Report on Form 8-K with the SEC.

Corporate Governance Guidelines

The Company’s board of directors has adopted corporate governance guidelines that serve as a flexible framework within which its board of directors

and its committees operate.

These guidelines cover a number of areas, including the size and composition of the board of directors, director selection criteria and qualifications, the agenda for board meetings, board member access to

management and independent advisors, director compensation, director orientation and continuing education and annual board and committee self-evaluations.

A copy of the corporate governance guidelines is available on the Company’s website at

www.janelcorp.com .

The Company’s board of directors has adopted corporate governance guidelines that serve as a flexible framework within which its board of directors and its committees operate.

These guidelines cover

a number of areas, including the size and composition of the board of directors, director selection criteria and qualifications, the agenda for board meetings, board member access to management and independent advisors, director compensation,

director orientation and continuing education and annual board and committee self-evaluations.

A copy of the corporate governance guidelines is available on the Company’s website at www.janelcorp.com .

Communications with the Board

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Board of Directors (Attention:

director(s), as applicable)), c/o the Company’s Secretary, 80 Eighth Avenue, New York, New York 10011.

(Name(s) of director(s), as applicable)), c/o the

Company’s Secretary, 80 Eighth Avenue, New York, New York 10011.

Any proper communication so received will be processed by the Secretary.

If it is unclear from the communication received whether it was

intended or appropriate for the board, the Secretary will (subject to any applicable regulatory requirements) use his or her judgment to determine whether such communication should be conveyed to the board or, as appropriate, to the member(s)

of the board named in the communication.

If it is unclear from the communication received whether it was intended or appropriate for the board, the

Secretary will (subject to any applicable regulatory requirements) use his or her judgment to determine whether such communication should be conveyed to the board of directors or, as appropriate, to the member(s) of the board of directors named

in the communication.

Leadership Structure and Risk Oversight

While the board believes that there are various structures which can provide successful leadership to the Company, the Company’s executive functions are

carried out by Ms.

Schulte, the Company’s President and Chief Executive Officer, who also serves as chair of the Company’s board of directors and, together with the other directors, brings experience, oversight and expertise to the management

of the Company.

The board believes that, due to the small size of the Company, this leadership structure best serves the Company and its stockholders.

Management is

responsible for the day-to-day management of risks the Company faces, while the board has collective responsibility for the oversight of risk management.

In its risk oversight role, the board has the responsibility to satisfy itself that the

risk management processes designed and implemented by management are adequate and functioning as designed.

To do this, management discusses with the board the risks facing the Company and its strategy for managing them.

While the board of directors believes that there are various structures that can provide successful leadership to the Company, the Company’s executive functions are carried out by Ms.

Company’s President and Chief Executive Officer, who also serves as chair of the Company’s board of directors and, together with the other directors, brings experience, oversight and expertise to the management of the Company.

The board of directors believes that, due to the small size of the Company, this leadership structure best serves the Company and its stockholders.

Management is responsible for the day-to-day

management of risks the Company faces, while the board of directors has collective responsibility for the oversight of risk management.

In its risk oversight role, the board of directors has the responsibility to satisfy itself that the risk

management processes designed and implemented by management are adequate and functioning as designed.

To do this, management discusses with the board of directors the risks facing the Company and its strategy for managing them.

EXECUTIVE COMPENSATION

(actual dollar amounts)

The following table provides summary information concerning compensation paid or accrued by us to our Chief Executive Officer and President, our Chief

Information Officer and our Principal Financial Officer, Treasurer and Secretary.

The following table provides summary information concerning compensation paid or accrued by us to our Chief Executive Officer and President, our Chief Information Officer and our Principal Financial

Officer, Treasurer and Secretary.

We refer to these individuals collectively as the “named executive officers”.

Summary Compensation Table

The following table sets forth information regarding the total compensation paid or earned by the named executive officers as compensation for their services

in all capacities during the fiscal years ended September 30, 2021 and 2020 (actual dollar amounts):

The following table sets forth information regarding the total compensation paid or earned by the named executive officers as compensation for their services in all capacities during the fiscal

years ended September 30, 2022 and 2021 (actual dollar amounts):

Name and Principal Position

3 unchanged sentences

Treasurer and Secretary

Amounts reported under all other compensation for the fiscal year ended September 30, 2021 include $15,860 of medical insurance premiums and $618 of retirement

contributions paid for the fiscal year ended 2021.

Amounts reported under all other compensation for the fiscal year ended September 30, 2022, include $18,360 of medical insurance premiums and $939 of 401K contributions paid for the fiscal year ended 2022.

Includes $6,763 of medical insurance premiums and $5,009 of 401(k) contributions paid on behalf of Mr.

Killackey for the fiscal year ended 2022.

Killackey was elected

to the Company’s board of directors in September 2014 and served as Chief Executive Officer from February 2015 through September 2018.

Effective October 1, 2018, Mr.

Killackey was appointed as the Company’s Chief Information Officer.

Amounts reported under all other compensation for the fiscal year ended September 30, 2021 include $17,948 of medical insurance premiums and $9,490 of 401(k) contributions

paid on behalf of Mr.

Verde for the fiscal year ended 2021.

Amounts reported under all other compensation for the fiscal year ended September 30, 2022 include $20,864 of medical insurance premiums and $6,742 of 401(k) contributions paid on behalf of Mr.

the fiscal year ended 2022.

Long-Term Incentive Plan Awards

While the Company has adopted the Amended and Restated 2017 Equity Incentive Plan, pursuant to which certain stock awards may be granted to the Company’s

directors, officers, employees and consultants, our current intent is to utilize this plan only to make annual equity awards to the Company’s non-employee directors.

While the Company has adopted the Amended and Restated 2017 Equity Incentive Plan, pursuant to which certain stock awards may be granted to the Company’s directors, officers, employees and

consultants, our current intent is to utilize this plan only to make annual equity awards to the Company’s non-employee directors.

Savings and Stock Option Plans

2 unchanged sentences

The Company maintains a qualified retirement plan, commonly referred to as a 401(k) plan covering substantially all full-time employees under each segment.

The Janel Corporation 401(k) Plan allows for employee salary deferrals including Roth 401(k) deferrals, employer matching contributions, employer profit

sharing contributions and employee rollovers.

The Janel Corporation 401(k) Plan allows for employee salary deferrals including Roth 401(k) deferrals, employer matching contributions, employer profit sharing contributions and employee rollovers.

The Janel Corporation 401(k) Plan provides for participant contributions of up to 50% of annual compensation (not to exceed the IRS limit), as defined by the plan.

The Company contributes an amount

equal to 50% of the participant’s first 6% of contributions.

The combined expenses charged to operations for contributions made to the plans for the benefit of the employees for the fiscal years ended September 30, 2021 and 2020

were approximately $288,000 and $196,000 respectively.

The Company contributes an amount equal to 50% of the participant’s first 6% of

contributions.

The combined expenses charged to operations for contributions made to the plans for the benefit of the employees for the fiscal years ended September 30, 2022 and 2021 were approximately $379,300

and $288,000, respectively.

The administrative expense charged to operations for the fiscal years ended September 30, 2022 and 2021 aggregated approximately $64,000 and $59,000, respectively.

On October 30, 2013, the board of directors adopted Janel’s 2013 Non-Qualified Stock Option Plan (the “2013 Option Plan”) providing for options to purchase up

to 100,000 shares of common stock for issuance to directors, officers, employees of and consultants to the Company and its subsidiaries.

The exercise price and other terms of any nonqualified option granted under the 2013 Option Plan is

determined by the Compensation Committee of the board of directors.

On May 12, 2017, the board of directors adopted the Company’s 2017 Plan pursuant to which (i) incentive stock options, (ii) non-statutory stock options, (iii)

restricted stock awards and (iv) stock appreciation rights with respect to up to 100,000 shares of the Company’s common stock could be granted to directors, officers, employees of and consultants to the Company.

On May 8, 2018, the board of directors of the Company adopted the Amended 2017 Plan.

The provisions and terms of the Amended 2017 Plan were the same as those

in the 2017 Plan, except that the Amended 2017 Plan removed the ability of the Company to award incentive stock options and removed the requirement for stockholder approval of the 2017 Plan.

On September 21, 2021, the board of directors of the Company adopted the Amended and Restated 2017 Janel Corporation Equity Incentive Plan (the “Amended and Restated Plan”), which

amended and restated the prior Amended 2017 Plan and pursuant to which non-statutory stock options, restricted stock awards and stock appreciation rights of the Company’s Common Stock, par value $.001 per share (“Common Stock”), may be granted

to employees, directors and consultants to the Company and its subsidiaries.

The provisions and terms of the Amended and Restated Plan are substantially the same as those in the Amended 2017 Plan except that the Amended and Restated Plan

increased the number of shares of Common Stock that may be issued pursuant to the Amended and Restated Plan from 100,000 to 200,000 shares of Common Stock of the Company and adopted certain other non-substantive amendments.

Participants and

all terms of any grant under the Amended and Restated Plan are in the discretion of the Company’s Compensation Committee.

On October 30, 2013, the Board of Directors adopted Janel’s 2013 Non-Qualified Stock Option Plan (the “2013 Option Plan”) providing for options to purchase up to 100,000 shares of common stock for

issuance to directors, officers, employees of and consultants to the Company and its subsidiaries.

The exercise price and other terms of any nonqualified option granted under the 2013 Option Plan is determined by the Compensation Committee of the

board of directors.

On September 21, 2021, the Board of Directors of the Company adopted the Amended and Restated 2017 Janel Corporation Equity Incentive Plan (the “Amended and Restated Plan”), which amended and

restated the prior 2017 Equity Incentive Plan, as previously amended, and pursuant to which non-statutory stock options, restricted stock awards and stock appreciation rights with respect to up to 200,000 shares of the Company’s Common Stock, par

value $.001 per share, may be granted to employees, directors and consultants to the Company and its subsidiaries.

Participants and all terms of any grant under the Amended and Restated Plan are in the discretion of the Company’s Compensation

Outstanding Equity Awards at September 30, 2022

2 unchanged sentences

The following tables set forth information concerning beneficial ownership of shares of Common Stock outstanding as of September 30, 2022.

For purposes of

calculating beneficial ownership, Rule 13d-3 of the Exchange Act requires inclusion of shares of common stock that may be acquired within sixty days of the stated date.

Unless otherwise indicated in the footnotes to a table, beneficial

ownership of shares represents sole voting and investment power with respect to those shares.

For purposes of calculating beneficial ownership, Rule

13d-3 of the Exchange Act requires inclusion of shares of common stock that may be acquired within sixty days of the stated date.

Unless otherwise indicated in the footnotes to a table, beneficial ownership of shares represents sole voting and

investment power with respect to those shares.

Certain Beneficial Owners

The following table reflects the names and addresses of the only persons or entities known to the Company to be the beneficial owners of 5% or more of the

outstanding shares of the Company’s common stock as of September 30, 2021.

The following table reflects the names and addresses of the only persons or entities known to the Company to be the beneficial owners of 5% or more of the outstanding shares of the Company’s common

stock as of September 30, 2022.

Name and address of Beneficial Owner (1)

Oaxaca Group L.L.C.

Gonzalez, II (2)

John Eidinger

Gonzalez, II (3)

Gerard van Kesteren (3)

Brendan Killackey

The address of each person and entity included in this table is 80 Eighth Avenue, New York, NY 10011

Includes 45,001 shares of common stock issuable upon the exercise of stock options that may be exercised within 60 days of September 30, 2021.

These shares are held by Oaxaca Group L.L.C.

Dominique Schulte is the sole member of Oaxaca Group L.L.C.

Schulte is the sole member of Oaxaca Group L.L.C.

and, therefore, shares beneficial ownership of the shares.

The following table sets forth information with respect to the beneficial ownership of the shares of common stock as of September 30, 2021 by each “named

executive officer”, each current director and each nominee for election as a director and all directors and executive officers of the Company as a group.

Includes 2,500 shares of common stock issuable upon the exercise of stock options that may be exercised within 60 days of September 30, 2022.

Directors and Executive Officers

The following table sets forth information with respect to the beneficial ownership of the shares of common stock as of September 30, 2022 by each “named executive officer”, each current director

and each nominee for election as a director and all directors and executive officers of the Company as a group.

An asterisk (*) indicates ownership of less than 1%.

2 unchanged sentences

Gonzalez, II (2)

Killackey (4)

Gerard van Kesteren (2)

Brendan Killackey

Karen Miller Ryan (3)

These shares are held by Oaxaca Group L.L.C.

3 unchanged sentences

Includes 834 shares of common stock issuable upon the exercise of stock options that may be exercised within 60 days of September 30, 2022.

Includes 13,000 shares of common stock issuable upon the exercise of stock options that may be exercised within 60 days of September 30, 2021.

Includes 6,876 shares of common stock issuable upon the exercise of stock options that

may be exercised within 60 days of September 30, 2021.

Equity Compensation Plan Information

The following table provides information, as of September 30, 2021, with respect to all compensation arrangements maintained by the Company under which shares

of common stock may be issued:

The following table provides information, as of September 30, 2022, with respect to all compensation arrangements maintained by the Company under which shares of common stock may be issued:

Plan Category:

Equity Compensation plans not approved by security holders:

Number of securities

to be issued,

upon exercise of

outstanding options,

warrants and rights

Weighted-average

exercise price of

outstanding options,

warrants and rights

Number of securities

remaining available

for future issuance

compensation plans

2013 Stock Option Plan (1)

Amended and Restated 2017 Equity Incentive Plan (2)

John Joseph Gonzalez, II – Options

On October 30, 2013, the board of directors of the Company adopted the Company’s 2013 Non-Qualified Stock Option Plan (the “2013 Option Plan”) providing for options to

purchase up to 100,000 shares of common stock for issuance to directors, officers, employees of and consultants to the Company and its subsidiaries.

The exercise price and other terms of any nonqualified option granted under the 2013

Option Plan is determined by the Compensation Committee (the “Committee”) of the board of directors or, if the board does not create the Committee, by the board which shall function as the Committee.

On May 12, 2017, the board of directors adopted the Company’s 2017 Plan pursuant to which (i) incentive stock options, (ii) non-statutory stock options, (iii)

On May 8, 2018, the

board of directors of Janel adopted the Amended 2017 Plan.

The provisions and terms of the Amended 2017 Plan were the same as those in the 2017 Plan, except that the Amended 2017 Plan removed the ability of Janel to award incentive

stock options and removed the requirement for stockholder approval of the 2017 Plan.

On September 21, 2021, the board of directors of the Company adopted the Amended and Restated 2017 Janel Corporation Equity Incentive Plan.

The provisions and terms of the Amended and Restated 2017 Janel Corporation Equity Incentive Plan are substantially the same as those in the Amended 2017 Plan except that the Amended and Restated 2017 Janel Corporation Equity Incentive Plan increased the number of shares of Common Stock that may be issued pursuant to the

Amended Plan from 100,000 to 200,000 shares of Common Stock of the Company.

On October 30, 2013, the Board of Directors of the Company adopted the Company’s 2013 Non-Qualified Stock Option Plan providing for options to purchase up to 100,000 shares of common stock for issuance to

directors, officers, employees of and consultants to the Company and its subsidiaries.

The exercise price and other terms of any nonqualified option granted under the 2013 Option Plan is determined by the Compensation Committee of the

board of directors.

On September 21, 2021, the Board of Directors of the Company adopted the Amended and Restated 2017 Janel Corporation Equity Incentive Plan pursuant to which non-statutory stock options, restricted stock

awards and stock appreciation rights with respect to up to 200,000 shares of the Company’s common stock may be granted to employees, directors and consultants to the Company and its subsidiaries.

Participants and all terms of any grant

under the Amended and Restated Plan are in the discretion of the Compensation Committee.

CERTAIN RELATIONSHIPS, RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

Related Party Transactions

We are not aware of any transactions since October 1, 2020 or any proposed transactions in which the Company was a party where the amount involved exceeded the

lesser of 1% of the average of the Company’s total assets at year-end for the last two completed fiscal years and $120,000, and in which a director, executive officer, holder of more than 5% of our common stock or any member of the immediate

family of any of the foregoing persons, had or will have a direct or indirect material interest.

(actual dollar amounts)

We are not aware of any transactions since October 1, 2021 or any proposed transactions in which the Company was a party where the amount involved exceeded the lesser of 1% of the average of the

Company’s total assets at year-end for the last two completed fiscal years and $120,000, and in which a director, executive officer, holder of more than 5% of our common stock or any member of the immediate family of any of the foregoing persons,

had or will have a direct or indirect material interest.

PRINCIPAL ACCOUNTING FEES AND SERVICES

The firm of Prager Metis CPAs, LLC served as the Company’s sole independent public accountants for the fiscal years ended September 30, 2021 and 2020.

Audit fees include fees paid and accrued by the Company to the Auditors in connection with the annual audit of the Company’s consolidated financial statements,

and review of the Company’s interim financial statements.

Audit fees also include fees for services performed by the Auditors that are closely related to the audit and in many cases could only be provided by the

Such services include consents related to SEC and other regulatory filings.

The aggregate fees billed to the Company by the Auditors, as applicable, for audit services rendered to the Company totaled $292,500 for

the year ended September 30, 2021 and $280,770 for the year ended September 30, 2020.

(actual dollar amounts)

The following reflects Prager Metis CPAs, LLC, the Company’s sole independent public accountants, fees for the audit of our financial statements for the fiscal years ended September 30, 2022 and

2021, and fees billed for other services provided by Prager Metis during those periods.

Year End September 30,

Audit-Related Fees

Audit related services include agreed upon procedures.

The aggregate fees billed and accrued to the Company by Prager Metis CPAs, LLC for audit

related fees rendered to the Company for the fiscal years ended September 30, 2021 and 2020 totaled $41,500 and $12,000, respectively.

Tax fees include corporate tax compliance, counsel and advisory services.

The aggregate fees billed to the Company by the Auditors, as

applicable, for the tax related services rendered to the Company for the fiscal years ended September 30, 2021 and 2020 totaled $48,741 and $20,875, respectively.

All Other Fees

The Auditors did not bill other fees to the Company for fiscal years ended September 30, 2021 and 2020.

Audit fees include fees paid and accrued for professional services rendered by Prager Metis CPA's for 2022 and 2021, fees for the audits of our financial statements included in our Annual Report on

Form 10-K for 2022 and 2021, and reviews of the financial statements included in our Quarterly Reports on Form 10-Q.

Audit fees also include comfort letter fees for 2021.

Audit-Related Fees

Audit-related services fees include fees paid and accrued for transaction related audit services and agreed upon procedures.

Tax fees include fees paid and accrued for corporate tax compliance, counsel and advisory services.

Approval of Independent Auditor Services and Fees

The Audit Committee reviews all fees charged by the Company’s independent auditors and actively monitors the relationship between audit and non-audit services

The Audit Committee must pre-approve all audit and non-audit services provided by the Company’s independent auditors and fees charged.

The Audit Committee reviews all fees charged by the Company’s independent auditors and actively monitors the relationship between audit and non-audit services provided.

The Audit Committee must

pre-approve all audit and non-audit services provided by the Company’s independent auditors and fees charged.

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

2 unchanged sentences

The Consolidated Financial Statements filed as part of this report are listed on the Table of Contents to Consolidated Financial Statements.

All other schedules are omitted because they are not applicable, are not required, or because the required information is included in the consolidated financial statements or notes

Agreement and Plan of Merger, dated May 8, 2018, by and among Antibodies Incorporated, AB HoldCo, Inc., AB Merger Sub, Inc., Richard Krogsrud, as

Representative of the Stockholders, and the Rollover Stockholders signatory thereto (incorporated by reference to Exhibit 2.1 of the Company’s Current Report on Form 8-K filed May 11, 2018)

All other schedules are omitted because they are not applicable, are not required, or because the required information is included in the consolidated financial statements or notes thereto.

Stock Purchase and Sale Agreement, dated July 1, 2022, between Janel Corporation and Rubicon Technology, Inc.

(incorporated by reference to Exhibit 2.1 to the Company’s Current Report

on Form 8-K filed July 5, 2022)

Articles of Incorporation of Wine Systems Design, Inc.

(predecessor name) (incorporated by reference to Exhibit 3A to Wine Systems Design, Inc.

(predecessor name) Registration Statement on Form SB-2 filed May 10, 2001)

(predecessor name) Registration Statement

on Form SB-2 filed May 10, 2001)

Amended and Restated By-Laws of Janel Corporation (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed November 1, 2013)

Certificate of Designations of Series B Convertible Stock (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed October 22, 2007)

Certificate of Designations of Series C Cumulative Preferred Stock (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form

8-K filed August 29, 2014)

Certificate of Change filed Pursuant to NRS 78.209 for Registrant (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K

filed April 21, 2015)

Certificate of Amendment to Articles of Incorporation of the Registrant (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on

Form 8-K filed April 21, 2015)

Amendment to Certificate of Designation After Issuance of Class or Series pursuant to NRS 78.1955 for Series C Cumulative Preferred Stock (incorporated

by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed March 25, 2016)

Amendment to Certificate of Designation After Issuance of Class or Series pursuant to NRS 78.1955 for Series C Cumulative Preferred Stock (incorporated

by reference to Exhibit 3.7 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2017)

Amendment to Certificate of Designation After Issuance of Class or Series pursuant to NRS 78.1955 for Series C Cumulative Preferred Stock (incorporated

by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K/A filed October 17, 2017)

Description of Registrant’s Securities (incorporated by reference to Exhibit 4.1 of the Company’s Annual Report on Form 10-K for the fiscal year ended

September 30, 2020)

Certificate of Designations of Series C Cumulative Preferred Stock (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed August 29, 2014)

Certificate of Change filed Pursuant to NRS 78.209 for Registrant (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed April 21, 2015)

Certificate of Amendment to Articles of Incorporation of the Registrant (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed April 21, 2015)

Amendment to Certificate of Designation After Issuance of Class or Series pursuant to NRS 78.1955 for Series C Cumulative Preferred Stock (incorporated by reference to Exhibit 3.1 to

the Company’s Current Report on Form 8-K filed March 25, 2016)

Amendment to Certificate of Designation After Issuance of Class or Series pursuant to NRS 78.1955 for Series C Cumulative Preferred Stock (incorporated by reference to Exhibit 3.7 to

the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2017)

Amendment to Certificate of Designation After Issuance of Class or Series pursuant to NRS 78.1955 for Series C Cumulative Preferred Stock (incorporated by reference to Exhibit 3.1 to

the Company’s Current Report on Form 8-K/A filed October 17, 2017)

Amendment to Certificate of Designation After Issuance of Class or Series pursuant to NRS 78.1955 for Series C Cumulative Preferred Stock (incorporated by reference to Exhibit 10.1 to

the Company's Current Report on Form 8-K filed on October 5, 2021)

Certificate, Amendment or Withdrawal of Designation pursuant to NRS 78.1955 with respect to Series C Cumulative Preferred Stock

(incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on April 5, 2022)

Description of Registrant’s Securities (filed herewith)

Janel World Trade, Ltd.

2013 Non-Qualified Stock Option Plan (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K

filed November 1, 2013)

Loan and Security Agreement dated March 27, 2014 between Janel World Trade, Ltd.

and its subsidiaries, and Presidential Financial Corporation

(incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed April 2, 2014)

First Amendment to the Loan and Security Agreement, dated September 10, 2014 between Janel World Trade, Ltd.

and its subsidiaries, and Presidential Financial Corporation (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed September 16, 2014)

Second Amendment to the Loan and Security Agreement, dated September 25, 2014 between Janel World Trade, Ltd.

and its subsidiaries, and Presidential

Financial Corporation (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed September 30, 2014)

Third Amendment to the Loan and Security Agreement, dated October 9, 2014 between Janel World Trade, Ltd.

and its subsidiaries, and Presidential

Financial Corporation (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed October 15, 2014)

Fourth Amendment to the Loan and Security Agreement and Demand Secured Promissory Note, dated August 18, 2015, by and among Janel Corporation

(formerly, Janel World Trade, Ltd.), Janel Group, Inc.

(formerly, the Janel Group of New York), The Janel Group of Illinois, The Janel Group of Georgia, The Janel Group of Los Angeles, Janel Ferrara Logistics, LLC, Alpha International,

LP, PCL Transport, LLC and Presidential Financial Corporation (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed August 20, 2015)

Amended and Restated Demand Secured Promissory Note made by Janel Corporation (and its subsidiaries) in favor of Presidential Financial Corporation,

dated August 18, 2015 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed August 20, 2015)

2013 Non-Qualified Stock Option Plan (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed November 1, 2013)

Credit Agreement, effective as of February 29, 2016, by and between Indco, Inc.

and First Merchants Bank (incorporated by reference to Exhibit 10.5 to

the Company’s Current Report on Form 8-K filed March 25, 2016)

Term Loan Promissory Note, effective as of February 29, 2016, made by Indco, Inc.

payable to First Merchants Bank (incorporated by reference to Exhibit

10.6 to the Company’s Current Report on Form 8-K filed March 25, 2016)

Revolving Loan Promissory Note, effective as of February 29, 2016, made by Indco, Inc.

payable to First Merchants Bank (incorporated by reference to

Exhibit 10.7 to the Company’s Current Report on Form 8-K filed March 25, 2016)

and First Merchants Bank (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on

Form 8-K filed March 25, 2016)

Security Agreement, effective as of February 29, 2016, made by Indco and the Company, Inc.

for the benefit of

First Merchants Bank (incorporated by reference to Exhibit 10.8 to the Company’s Current Report on Form 8-K filed March 25, 2016)

Continuing Guaranty Agreement, effective as of February 29, 2016, made by Janel Corporation for the benefit of First Merchants Bank (incorporated by

reference to Exhibit 10.9 to the Company’s Current Report on Form 8-K filed March 25, 2016)

Agreement of Lease dated January 2, 2015 between 303 Merrick LLC and The Janel Group of New York, Inc.

(incorporated by reference to Exhibit 10.4 to

the Company’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2014)

Janel Corporation 2017 Amended and Restated Equity Incentive Plan (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form

8-K filed May 11, 2018)

Restricted Stock Award Agreement between Janel Corporation and Gerard van Kesteren dated May 12, 2017 (incorporated by reference to Exhibit 10.1 to the

Company’s Current Report on Form 8-K filed September 5, 2017)

Loan and Security Agreement, effective as of October 17, 2017, by and between Janel Corporation, Janel Group, Inc., PCL Transport, LLC, Janel Alpha GP,

Byrnes & Co., Liberty International, Inc., and The Janel Group of Georgia, Inc., and Santander Bank, N.A.

(incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed October 17, 2017)

Revolving Credit Note, effective as of October 17, 2017 payable to Santander Bank, N.A.

(incorporated by reference to Exhibit 10.2 to the Company’s

Current Report on Form 8-K filed October 17, 2017)

First Amendment to the Loan and Security Agreement, dated March 21, 2018, by and among Janel Group, Inc., PCL Transport, LLC, Janel Alpha GP, LLC, W.J.

Byrnes & Co., Inc., Liberty International, Inc., The Janel Group Georgia, Inc., Aves Labs, Inc., Janel Corporation and Santander Bank, N.A.

(incorporated by reference to Exhibit 10.1 to the Company’s Current Report in Form 8-K filed

March 23, 2018)

Limited Waiver, Joiner and Second Amendment, dated November 20, 2018, to the Loan and Security Agreement, by and among Janel Group, Inc., The Janel Group of Georgia, Inc.,

Aves Labs, Inc., Honor Worldwide Logistics LLC, HWL Brokerage LLC, Global Trading Resources, Inc., Janel Corporation and Santander Bank, N.A.

(incorporated by reference to Exhibit 10.1 to Company’s Current Report on Form 8-K filed

November 26, 2018)

Redemption Agreement, dated September 24, 2018, among the Company and the holders of all of the issued and outstanding shares of the Company’s Series A Convertible Preferred Stock (incorporated

by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed September 28, 2018)

for the benefit of First Merchants Bank (incorporated by reference to Exhibit 10.7 to the

Company’s Current Report on Form 8-K filed March 25, 2016)

Continuing Guaranty Agreement, effective as of February 29, 2016, made by Janel Corporation for the benefit of First Merchants Bank (incorporated by reference to Exhibit 10.9 to the

Company’s Current Report on Form 8-K filed March 25, 2016)

Restricted Stock Award Agreement between Janel Corporation and Gerard van Kesteren dated May 12, 2017 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form

8-K filed September 5, 2017)

Business Loan Agreement, dated June 14, 2018, by and between AB Merger Sub, Inc.

and First Northern Bank of Dixon (incorporated by reference to Exhibit 10.1 of the

Company’s Current Report on Form 8-K filed June 27, 2018)

and First Northern Bank of Dixon (incorporated by reference to Exhibit 10.1 of the Company’s Current

Report on Form 8-K filed June 27, 2018)

Promissory Note, dated June 14, 2018, made by AB Merger Sub, Inc.

payable to First Northern Bank of Dixon (incorporated by reference to Exhibit 10.2 of the Company’s

Current Report on Form 8-K filed June 27, 2018)

payable to First Northern Bank of Dixon (incorporated by reference to Exhibit 10.2 of the Company’s Current Report on

Form 8-K filed June 27, 2018)

Deed of Trust, dated June 14, 2018, by Antibodies Incorporated, as Trustor (incorporated by reference to Exhibit 10.3 of the Company’s Current Report on Form 8-K filed June 27, 2018)

Commercial Guaranty, dated June 14, 2018, from Janel Corporation (as Guarantor) to First Northern Bank of Dixon (incorporated by reference to Exhibit 10.4 of the Company’s

Current Report on Form 8-K filed June 27, 2018)

Commercial Guaranty, dated June 14, 2018, from AB HoldCo, Inc.

(as Guarantor) to First Northern Bank of Dixon (incorporated by reference to Exhibit 10.5 of the Company’s

Current Report on Form 8-K filed June 27, 2018)

Note Purchase Agreement, dated June 22, 2018, by and between AB HoldCo, Inc.

and Richard Krogsrud (incorporated by reference to Exhibit 10.6 of the

Company’s Current Report on Form 8-K filed June 27, 2018)

Note Purchase Agreement, dated June 22, 2018, by and between AB HoldCo, Inc.

and the Michael L.

Smith and Ardyce F.

Smith 1994 Revocable Trust

(incorporated by reference to Exhibit 10.7 of the Company’s Current Report on Form 8-K filed June 27, 2018)

Subordinated Promissory Note, dated June 22, 2018, made by AB HoldCo, Inc.

payable to Richard Krogsrud (incorporated by reference to Exhibit 10.8 of

the Company’s Current Report on Form 8-K filed June 27, 2018)

Subordinated Promissory Note, dated June 22, 2018, made by AB HoldCo, Inc.

payable to the Michael L.

Smith and Ardyce F.

Smith 1994 Revocable Trust

(incorporated by reference to Exhibit 10.9 of the Company’s Current Report on Form 8-K filed June 27, 2018)

Commercial Guaranty, dated June 14, 2018, from Janel Corporation (as Guarantor) to First Northern Bank of Dixon (incorporated by reference to Exhibit 10.4 of the Company’s Current

Report on Form 8-K filed June 27, 2018)

Amendment No.

1 to Credit Agreement, effective as of August 30, 2019, by and between Indco, Inc.

and First Merchants Bank (incorporated by reference to

Exhibit 10.1 of the Company’s Current Report on Form 8-K filed on September 6, 2019)

and First Merchants Bank (incorporated by reference to Exhibit 10.1 of the Company’s

Current Report on Form 8-K filed on September 6, 2019)

Term Loan Promissory Note, effective as of August 30, 2019, made by Indco, Inc.

payable to First Merchants Bank (incorporated by reference to Exhibit

10.2 to the Company’s Current Report on Form 8-K filed on September 6, 2019).

payable to First Merchants Bank (incorporated by reference to Exhibit 10.2 to the Company’s Current

Report on Form 8-K filed on September 6, 2019)

Revolving Loan Promissory Note, effective as of August 30, 2019, made by Indco, Inc.

payable to First Merchant Bank (incorporated by reference to

Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on September 6, 2019).

Pledge Agreement, effective as of August 30, 2019, by Janel Corporation to First Merchant Bank (incorporated by reference to Exhibit 10.4 of the

Company’s Current Report on Form 8-K filed on September 6, 2019)

payable to First Merchant Bank (incorporated by reference to Exhibit 10.3 to the Company’s Current

Report on Form 8-K filed on September 6, 2019)

Pledge Agreement, effective as of August 30, 2019, by Janel Corporation to First Merchant Bank (incorporated by reference to Exhibit 10.4 of the Company’s Current Report on Form 8-K

filed on September 6, 2019)

Consulting Agreement, dated February 26, 2017, between Janel Corporation and John J.

Gonzalez, II (incorporated by reference to Exhibit 10.30 of the

Company’s Form 10-K for the year ended September 30, 2018 filed on July 26, 2019).

Consulting Agreement, dated September 28, 2016, between Janel Corporation and Gerard van Kesteren (incorporated by reference to Exhibit 10.31 of the

Company’s Form 10-K for the year ended September 30, 2018 filed on July 26, 2019)

Purchase and Sale Agreement dated February 4, 2020 by and between 4040 Earnings Way, LLC, and Indco, Inc.

(incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed March 4, 2020, as amended by the Company’s Current Report on Form 8-K/A filed March 6, 2020)

Third Amendment to Loan and Security Agreement dated March 4, 2020 by and between Santander Bank, N.A., Janel Group, Inc., Honor Worldwide Logistics

LLC and Janel Corporation (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed March 4, 2020, as amended by the Company’s Current Report on Form 8-K/A filed March 6, 2020)

Loan Agreement dated April 19, 2020, by and between Janel Corporation and Santander Bank, N.A., together with the U.S.

Small Business Administration

Note dated April 19, 2020 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020)

Gonzalez, II (incorporated by reference to Exhibit 10.30 of the Company’s Form 10-K for the year

ended September 30, 2018, filed on July 26, 2019)

Consulting Agreement, dated September 28, 2016, between Janel Corporation and Gerard van Kesteren (incorporated by reference to Exhibit 10.31 of the Company’s Form 10-K for the year

ended September 30, 2018, filed on July 26, 2019)

Amendment No.

2 to Credit Agreement effective as of July 1, 2020, by and between Indco Inc.

and First Merchants Bank (incorporated by reference to

Exhibit 10.39 of the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2020)

Consent, Joinder and Fourth Amendment to the Loan and Security Agreement dated as of July 22, 2020 by and among Janel Group, Inc., Atlantic Customs

Brokers, Inc., Janel Corporation and Santander Bank, N.A.

(incorporated by reference to Exhibit 10.40 of the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2020)

Consent, Joinder and Fifth Amendment to the Loan and Security Agreement dated as of December 4, 2020 by and among Janel Group, Inc., Atlantic Customs

Brokers, Inc., Janel Corporation and Santander Bank, N.A.

(incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2020)

Subscription Agreement for sale of Series C Preferred Stock dated as of September 29, 2020 between Janel Corporation and Oaxaca Group LLC (incorporated

by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed October 2, 2020)

Membership Interest Purchase Agreement, by and between Janel Group, Inc., Expedited Logistics and Freight Services, LLC and the principal members of ELFS dated September

21, 2021 (filed herewith) *

Amended and Restated Loan and Security Agreement, by and among Santander Bank, N.A., as lender, and Janel Group, Inc., Expedited Logistics and Freight Services, LLC, a

Texas limited liability company, and ELFS Brokerage, LLC (collectively as borrowers) and Janel Corporation and Expedited Logistics and Freight Services, LLC, an Oklahoma limited liability company, as loan party obligors dated September

21, 2021 (filed herewith)

Amended and Restated 2017 Janel Corporation Equity Incentive Plan dated September 21, 2021 (filed herewith)

Amendment to Certificate of Designation After Issuance of Class or Series pursuant to NRS 78.1955 for Series C Cumulative Preferred Stock (incorporated

by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on October 5, 2021)

Subscription Agreement for sale of Series C Preferred Stock dated as of September 30, 2021 between Janel Corporation and Oaxaca Group LLC (incorporated

by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed October 5, 2021)

Letter from Crowe LLP to the Securities and Exchange Commission, dated February 22, 2019 (incorporated by reference to Exhibit 16.1 to the Company’s

Current Report on Form 8-K filed on February 22, 2019).

and First Merchants Bank (incorporated by reference to Exhibit 10.39 of the Company’s Annual

Report on Form 10-K for the fiscal year ended September 30, 2020)

Amended and Restated Loan and Security Agreement, by and among Santander Bank, N.A., as lender, and Janel Group, Inc., Expedited Logistics and Freight Services, LLC, a Texas limited

liability company, and ELFS Brokerage, LLC (collectively as borrowers) and Janel Corporation and Expedited Logistics and Freight Services, LLC, an Oklahoma limited liability company, as loan party obligors dated September 21, 2021

(incorporated by reference to Exhibit 10.44 of the Company’s Annual Report on Form 10-K for the year ended September 30, 2021)

First Amendment to Amended and Restated Loan and Security Agreement between (incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q for

the quarter ended March 31, 2022)

Consent, Waiver and Second Amendment to Amended and Restated Loan Agreement, dated as of July 13, 2022, by and among Santander Bank,

N.A., Janel Group, Inc., Expedited Logistics and Freight Services, LLC, ELFS Brokerage LLC, Janel Corporation and Expedited Logistics and Freight Services, LLC (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on

Form 8-K filed on July 13, 2022)

Form letter purchase agreement, dated March 31, 2022, between the Company and holders of Series C Stock (incorporated by reference to Exhibit 10.2 of the Company’s

Quarterly Report on Form 10-Q for the quarter ended March 31, 2022)

Amended and Restated 2017 Janel Corporation Equity Incentive Plan dated September 21, 2021 (incorporated by reference to Exhibit 10.45 of the Company’s Annual Report on Form 10-K for the

fiscal year ended September 30, 2021)

Subscription Agreement for sale of Series C Preferred Stock dated as of September 30, 2021 between Janel Corporation and Oaxaca Group LLC (incorporated by reference to

Exhibit 10.2 to the Company's Current Report on Form 8-K filed on October 5, 2021)

Amendment No.

3 to Credit Agreement effective as of August 1, 2022 entered into by and among Indco,

, and First Merchants Bank (filed herewith)

Subsidiaries of the Registrant (filed herewith)

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Section 1350 Certification of Principal Financial Officer (furnished herewith)

Interactive data files providing financial information from the Registrant’s Annual Report on Form 10-K for the fiscal year ended September 30, 2021 in

XBRL (eXtensible Business Reporting Language) pursuant to Rule 405 of Regulation S-T:

(i) Consolidated Balance Sheets as of September 30, 2021 and September 30, 2020, (ii) Consolidated Statements of Operations for the years ended

September 30, 2021 and 2020, (iii) Consolidated Statements of Stockholders’ Equity for the years ended September 30, 2021 and 2020, (iv) Consolidated Statements of Cash Flows for the years ended September 30, 2021 and 2020, and (v)

Notes to Consolidated Financial Statements (filed herewith)

Interactive data files providing financial information from the Registrant’s Annual Report on Form 10-K for the fiscal year ended September 30, 2022 in Inline XBRL (eXtensible Business

Reporting Language) pursuant to Rule 405 of Regulation S-T:

(i) Consolidated Balance Sheets as of September 30, 2022 and September 30, 2021, (ii) Consolidated Statements of Operations for the years ended September 30, 2022 and 2021, (iii)

Consolidated Statements of Stockholders’ Equity for the years ended September 30, 2022 and 2021, (iv) Consolidated Statements of Cash Flows for the years ended September 30, 2022 and 2021, and (v) Notes to Consolidated Financial

Statements (filed herewith)

Cover Page Interactive Data File (formatted as Inline XBRL and contained in the Interactive Data Files submitted as Exhibit 101) (filed herewith)

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Schedules to this exhibit have been omitted pursuant to Item 601(b)(2) of Registration S-K.

The Registrant hereby agrees to furnish a copy of any omitted schedules to the Commission upon

The agreements and other documents filed as exhibits to this report are not intended to provide factual information or other disclosure other than with respect

to the terms of the agreements or other documents themselves, and you should not rely on them for that purpose.

In particular, any representations and warranties made by us in these agreements or other documents were made solely within the

specific context of the relevant agreement or document and may not describe the actual state of affairs as of the date they were made or at any other time.

The Registrant hereby agrees to furnish a copy of any omitted schedules to the SEC upon request

The agreements and other documents filed as exhibits to this report are not intended to provide factual information or other disclosure other than with respect to the terms of the agreements or

other documents themselves, and you should not rely on them for that purpose.

In particular, any representations and warranties made by us in these agreements or other documents were made solely within the specific context of the relevant

agreement or document and may not describe the actual state of affairs as of the date they were made or at any other time.

FORM 10-K SUMMARY

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Janel Corporation has duly caused this report to

be signed on its behalf by the undersigned, thereto duly authorized.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Janel Corporation has duly caused this report to be signed on its behalf by the undersigned, thereto duly

JANEL CORPORATION

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Principal Financial Officer, Treasurer and Secretary

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of

the Registrant and in the capacities and on the dates indicated.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates

/s/ Dominique Schulte

Director, Board Chair, President and Chief Executive Officer

December 9, 2022

Dominique Schulte

/s/ Vincent A.

Principal Financial Officer, Treasurer and Secretary

December 9, 2022

/s/Brendan J.

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Gerard van Kesteren

Report of Registered Independent Public Accounting Firm – Prager Metis CPAs, LLC

Report of Registered Independent Public Accounting Firm – Prager Metis CPAs, LLC (PCAOB ID number 273 )

Consolidated Balance Sheets as of September 30, 2022 and 2021

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Directors of Janel Corporation and Subsidiaries

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Janel Corporation and Subsidiaries (the “Company”) as of September 30, 2021

and 2020, and the related consolidated statements of operations, changes in stockholders’ equity and cash flows for the years ended September 30, 2021 and 2020, and the related notes to the consolidated financial statements (collectively, the

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Janel Corporation and Subsidiaries (the “Company”) as of September 30, 2022 and

2021, and the related consolidated statements of operations, changes in stockholders’ equity and cash flows for the years ended September 30, 2022 and 2021, and the related notes to the consolidated financial statements (collectively, the

consolidated financial statements).

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These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements

based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB

Our responsibility is to express an opinion on the Company’s

financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

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Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due

to error or fraud, and performing procedures that respond to those risks.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to

error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

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Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was

communicated or required to be communicated to the audit committee and that (1) relates to an account or disclosure that is material to the financial statements and (2) involved especially challenging, subjective, or complex judgments.

communication of the critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical

audit matter or on the accounts or disclosures to which it relates.

Evaluation of the acquisition-date fair values of customer relationship intangible asset

Critical Audit Matter Description

As discussed in Notes 2 to the consolidated financial statements, o n

September 21, 2021, the Company completed the acquisition of all of the membership interests of Expedited Logistics and Freight Services, LLC (“ELFS”) and ELFS Brokerage LLC, a wholly-owned subsidiary of ELFS.

As a result of the transaction, the Company acquired customer relationships representing those relationships that cause customers to do business with an entity on an ongoing basis.

The acquisition-date fair value for the customer relationships asset is included in intangibles acquired of $10 million.

We identified the evaluation of the acquisition-date fair value of the customer relationship intangible asset as a critical audit matter.

A high degree of subjective auditor judgment was involved in evaluating certain inputs to the multi-period excess earnings method used to determine the fair value of the customer relationships intangible asset.

The key inputs used in the

multi-period excess earnings method included attrition rates, discount rates, and forecasted revenue growth and EBITDA.

There was limited observable market information and the calculated fair value of the customer relationships intangible

asset was sensitive to possible changes in these key inputs.

How the Critical Audit Matter Was Addressed in the Audit

The primary procedures we performed to address this critical audit matter included the following.

In connection with our assessment of the

inputs used in the valuation, we compared attrition rates, forecasted revenue growth rates and EBITDA as a percentage of revenue to historical actual results and performing sensitivity analyses to assess the impact of changes to the

forecasted revenue growth rates.

In addition, we involved valuation professionals with specialized skills and knowledge, who assisted in:

Evaluating the selected discount rates by comparing them against discount rate ranges that were independently developed using

publicly available market data;

Assessing the forecasted revenue growth rates and EBITDA as a percentage of revenue by comparing them against revenue growth rates

and EBITDA as a percentage of revenue of publicly available market data for comparable companies;

Reviewing the mathematical accuracy of the calculations of goodwill and trademark impairment used by management.

Critical audit matters are a matter arising from the current-period audit of the financial statements that were communicated or required to be

communicated to the audit committee and that (1) relate to an account or disclosure that is material to the consolidated financial statements and (2) involved especially challenging, subjective, or complex judgments.

We determined that there

are no critical audit matters.

/s/ Prager Metis CPAs, LLC

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Intangible assets, net

Investment in Rubicon at fair value

Operating lease right of use asset

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Current portion of earnout

Current portion of Paycheck Protection Program (PPP) loan

Current portion of long-term debt

Current portion of deferred acquisition payments

Current portion of subordinated promissory note-related party

Current portion of long-term debt

Current portion of operating lease liabilities

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Long-term portion of earnout

Long-term portion of Paycheck Protection Program (PPP) loan

Subordinated promissory notes-related party

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Preferred Stock, $ 0.001 par value; 100,000 shares authorized

Series B 5,700 shares authorized, and 31 shares issued and outstanding as of September 30, 2021 and 2020 , respectively

Series B 5,700 shares authorized and 0 shares issued and outstanding as of September 30, 2022 , and 31 shares issued and outstanding as of September

30, 2021 , respectively

Series C 30,000 shares authorized and 11,368 and 20,960

shares issued and outstanding at September 30, 2021 and September 30, 2020 , respectively, liquidation value of $ 12,907

and $ 11,541 at September 30, 2021 and September 30, 2020 , respectively

shares issued and outstanding at September 30, 2022 and September 30, 2021 , liquidation value of $ 7,429 and $ 12,907 at September 30, 2022

and September 30, 2021 , respectively

Common stock, $ 0.001 par value; 4,500,000 shares authorized, 1,206,354

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Common treasury stock, at cost, 20,000 shares

Accumulated earnings (deficit)

Accumulated earnings

Total stockholders’ equity

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CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share and per share data)

(in thousands, except per share data)

Year Ended September 30,

Forwarding expenses and cost of revenues

Forwarding expenses and cost of revenue

Cost and Expenses:

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Total Costs and Expenses

Income (loss) from operations

Income from Operations

Interest expense

Gain on Paycheck Protection Program (PPP) loan forgiveness

Gain on Paycheck Protection Program loan forgiveness

Fair value adjustments to Rubicon investment (net of dividends)

Change in fair value of earnout

Change in fair value of mandatorily redeemable non-controlling interest

Income (Loss) Before Income Taxes

Income tax (expense) benefit

Net Income (Loss)

Income Before Income Taxes

Income tax expense

Net (Loss) Income

Preferred stock dividends

Net Income (Loss) Available to Common Stockholders

Net Income (Loss) per share

Non-controlling interest dividends

Net (Loss) Income Available to Common Stockholders

Net (loss) Income per share

Net income (loss) per share attributable to common stockholders:

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Restricted stock issued

Vested restricted stock unissued.

Stock based compensation

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Dividends to preferred stockholders

Preferred C shares sold

Issuance of restricted stock issued

Dividends to non-controlling interest

Preferred C shares purchases

Preferred C shares converted

Preferred B shares converted

Common Stock issued in private placement

Stock based compensation

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Cash Flows from Operating Activities:

Net income (loss)

Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:

Provision for uncollectible accounts, net of recoveries

Depreciation and amortization

Deferred income tax

Net (loss) income

Adjustments to reconcile net (loss) income to net cash provided by operating activities:

Provision for (recovery of) uncollectible accounts

Deferred income provision

Amortization of intangible assets

Cost recognized on the sale of acquired inventory

Amortization of acquired inventory valuation

Amortization of loan costs

Stock based compensation

Change in fair value of mandatorily redeemable noncontrolling interest

Paycheck Protection Program (PPP) loan forgiveness

Unrealized loss on fair value adjustment to Rubicon investment (net of dividend)

Change in fair value of earnout

Change in fair value of mandatorily redeemable non-controlling interest

Gain on Paycheck Protection Program loan forgiveness

Changes in operating assets and liabilities, net of effects of acquisitions:

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Other liabilities

Net cash used in operating activities

Net cash provided by (used in) operating activities

Cash Flows from Investing Activities:

Acquisition of property and equipment, net of disposals

Investment in Rubicon (net of dividend)

Net cash used in investing activities

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Dividends paid to preferred stockholders

Repayments of (borrowings under) term loan

Proceeds from Paycheck Protection Program (PPP) loan

Dividends paid to minority shareholders

Borrowings (repayments) of term loan

Proceeds from stock option exercise

Line of credit, borrowing (repayment), net

Line of credit, (payments) proceeds, net

Repurchase of Series C Preferred Stock

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Proceeds from sale of Series C Preferred Stock

Repayment of subordinated promissory notes

Deferred acquisition payments

Net cash provided by financing activities

Proceeds from Private Placement

Repayment of subordinated promissory note-related party

Net cash (used in) provided by financing activities

Net increase in cash

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Subordinated Promissory notes of ICT

PPP loan assumed

Deferred payment on acquisition

Due to former ECM owner

Non-cash financing activities:

Dividends declared to preferred stockholders

Vested restricted stock unissued

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

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Business description

Janel is a holding company with subsidiaries in three

business segments:

Logistics (previously known as Global Logistics Services), Manufacturing and Life Sciences.

In the fourth quarter of 2021, our former Global Logistics Services segment was renamed “Logistics”;

this change related to the

name only and had no impact on the Company’s previously reported historical financial position, results of operations, cash flow or segment level results.

Management at the holding company focuses on significant capital allocation decisions

and corporate governance and supporting Janel’s subsidiaries where appropriate.

Janel expects to grow organically and by completing acquisitions.

We plan to either acquire businesses within our existing segments or expand our portfolio into

new strategic segments.

Our acquisition strategy focuses on reasonably-priced companies with strong and capable management teams, attractive existing business economics and stable and predictable earnings power.

The Company’s Logistics segment is comprised of several wholly-owned subsidiaries.

The Company’s Logistics business is a non-asset based,

full-service provider of cargo transportation logistics management services, including freight forwarding via air-, ocean- and land-based carriers, customs brokerage services, warehousing and distribution services, trucking, and other

value-added logistics services.

holding company with subsidiaries in three business segments:

Logistics, Life Sciences and Manufacturing.

The Company strives

to create shareholder value primarily through three strategic priorities:

supporting its businesses’ efforts to make investments and to build long-term profits;

allocating Janel’s capital at high risk-adjusted rates of return;

attracting and retaining exceptional talent.

Management at

the holding company focuses on significant capital allocation decisions, corporate governance and supporting Janel’s subsidiaries where appropriate.

Janel expects to grow through its subsidiaries’ organic growth and by completing

acquisitions.

We plan to either acquire businesses within our existing segments or expand our portfolio into new strategic segments.

Our acquisition strategy focuses on reasonably-priced companies with strong and capable management teams,

attractive existing business economics and stable and predictable earnings power.

The Company’s

Logistics segment is comprised of several wholly-owned subsidiaries.

The Logistics business is a non-asset based, full-service provider of cargo transportation logistics management services, including freight forwarding via air-, ocean-

and land-based carriers, customs brokerage services, warehousing and distribution services, trucking and other value-added logistics services.

In addition to these revenue streams are accessorial revenue to the core services.

Accessorial revenue includes, but is not limited to, fuel service charges, wait time fees, hazardous cargo fees, labor

charges, handling, cartage, bonding and additional labor charges.

On September 21, 2021, the Company completed a business combination whereby it acquired all of the membership interests of Expedited

Logistics and Freight Services, LLC.

(“ELFS”) and related subsidiaries, which we include in our Logistics segment.

On December 31, 2020, the Company completed a business combination whereby it acquired substantially all of the assets and certain

liabilities of W.R.

revenue includes, but is not limited to, fuel service charges, wait time fees, hazardous cargo fees, labor charges, handling, cartage, bonding and additional labor charges.

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

31, 2020, the Company completed a business combination whereby it acquired substantially all of the assets and certain liabilities of W.R.

Zanes”), which we include in our Logistics segment.

On July 23, 2020, the Company acquired all of the outstanding common stock of Atlantic Customs Brokers, Inc.

(“ACB”), which we include in

our Logistics segment.

Manufacturing

The Company’s manufacturing segment is comprised of Indco, Inc.

(“Indco”), a majority-owned subsidiary of the Company that manufactures and distributes mixing

equipment and apparatus for specific applications within various industries.

Indco’s customer base is comprised of small- to mid-sized businesses as well as other larger customers for which Indco fulfills repetitive production orders.

Life Sciences

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produces products for other life science companies on an original equipment manufacturer (“OEM”) basis.

August 15, 2022, the Company completed a business combination whereby it acquired all of the membership interests of ECM Biosciences LLC, which we include in our Life Sciences segment.

On December 4, 2020, the Company completed a business combination whereby it acquired all of the membership interests of ImmunoChemistry

Technologies, LLC.

(“ICT”), which we include in our Life Sciences segment.

Technologies, LLC (“ICT”), which we include in our Life Sciences segment.

Manufacturing

The Company’s

manufacturing segment is comprised of Indco, Inc.

(“Indco”), a majority-owned subsidiary of the Company that manufactures and distributes mixing equipment and apparatus for specific applications within various industries.

Indco’s customer

base is comprised of small- to mid-sized businesses as well as other larger customers for which Indco fulfills repetitive production orders.

19, 2022, the Company acquired 1,108,000 shares (the “Acquired Shares”) of the common stock, par value $ 0.001 per share, of Rubicon Technology, Inc.

(“Rubicon”), at a price per share of $ 20.00 , in a cash tender offer made pursuant to the Stock Purchase and Sale Agreement, dated July 1, 2022, between the Company and Rubicon (the “Purchase

Pursuant to the terms of the Purchase Agreement, the Acquired Shares represented 44.99 % of Rubicon’s issued

and outstanding shares of common stock as of August 3, 2022, as reported in Rubicon’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2022, filed with the SEC on August 12, 2022.

is a vertically integrated, advanced materials provider specializing in monocrystalline sapphire for applications in optical and industrial systems.

Rubicon uses proprietary crystal growth technology to produce high-quality sapphire

products to meet customers exacting specifications.

Basis of consolidation

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The Company records its allowance for doubtful accounts based upon its assessment of various factors.

The Company considers historical collection experience, the age of the accounts receivable balances, credit quality of the Company’s customers, any specific customer collection issues that have been identified, current economic conditions,

and other factors that may affect the customers’ ability to pay.

The Company writes off accounts receivable balances that have aged significantly once all collection efforts have been exhausted and the receivables are no longer deemed

collectible from the customer.

other factors that may affect the customers’ ability to pay.

The Company writes off accounts receivable balances that have aged significantly once all collection efforts have been exhausted and the receivables are no longer deemed collectible

from the customer.

The allowance for doubtful accounts as of September 30, 2022 and September 30, 2021 was $ 1,547 and $ 812 , respectively.

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The Company maintains an inventory valuation reserve to

provide for slow moving and obsolete inventory, inventory not meeting quality control standards and inventory subject to expiration for its Life Science business.

The products of the Life Science business require the initial manufacture of

provide for slow moving and obsolete inventory, inventory not meeting quality control standards and inventory subject to expiration for its Life Sciences business.

The products of the Life Sciences business require the initial manufacture of

multiple batches to determine if quality standards can consistently be met.

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Under current authoritative guidance, goodwill is not amortized but is tested for impairment annually as well as when an event or change in circumstance indicates impairment may have occurred.

Goodwill is tested for impairment by

comparing the fair value of the Company’s individual reporting units to their carrying amount to determine if there is potential goodwill impairment.

If the fair value of the reporting unit is less than the carrying value, an impairment loss

is recorded to the extent that the implied fair value of the goodwill of the reporting unit is less than its carrying value.

If there is a material change in economic conditions, or other circumstances influencing the estimate of future cash

flows or significantly affecting the fair value of our reporting units, the Company could be required to recognize impairment charges in the future.

During the fourth quarter of 2021, we changed the date of our annual impairment test of goodwill and indefinite-lived intangible assets

from September 30 to July 1.

The change in the impairment test date will lessen resource constraints that exist in connection with the Company’s year-end close and financial reporting process and provide for additional time to complete the

required impairment testing.

This change does not represent a material change to our method of applying an accounting principle, and therefore does not delay, accelerate or avoid an impairment charge.

Goodwill is tested for impairment

by comparing the fair value of the Company’s individual reporting units to their carrying amount to determine if there is potential goodwill impairment.

If the fair value of the reporting unit is less than the carrying value, an impairment

loss is recorded to the extent that the implied fair value of the goodwill of the reporting unit is less than its carrying value.

If there is a material change in economic conditions, or other circumstances influencing the estimate of

future cash flows or significantly affecting the fair value of our reporting units, the Company could be required to recognize impairment charges in the future.

We have determined that it is impracticable to objectively determine projected cash flows and related valuation estimates that would have been

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The Company concluded that the fair value of intangibles and long-lived assets were not deemed to be impaired as of September 30, 2022 and

Equity-Method Investments

The Company has determined that its investment in

Rubicon is subject to the equity method of accounting, and the Company has elected the fair value option under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 825-10, Financial Instruments (“ASC

825-10”) to account for the equity method investment.

In accordance with ASC 825-10, the Company will present its equity method investment in Rubicon at fair value each reporting period with changes in fair value and dividends received

from Rubicon recorded to income from investment in unconsolidated affiliate on the Company’s statements of operations.

See Note 17 for further information about the Company’s

investment in Rubicon’s equity securities accounted for under the fair value option.

Business segment information

The Company operates in three reportable

Logistics, Manufacturing and Life Sciences.

Logistics, Life Sciences and Manufacturing.

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

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In the Logistics segment, the Company disaggregates its revenues by its five primary service categories:

ocean freight, air freight, custom brokerage and trucking and other.

A summary of the Company’s revenues disaggregated by major

service lines for the fiscal year ended September 30, 2021 and 2020 was as follows:

September 30,

ocean freight, trucking, air freight, custom brokerage and other.

A summary of the Company’s revenues disaggregated by major service lines for the fiscal

year ended September 30, 2022 and 2021 was as follows:

Year Ended September 30,

Ocean freight

Customs brokerage

Manufacturing

Revenues from Indco are derived from the engineering, manufacture and delivery of specialty mixing equipment and accessories.

Indco receives customer product

orders via phone call, email, internet, or fax.

The pricing of each standard product sold is listed in Indco’s print and web-based catalog.

Customer specific products are priced by quote.

A sales order acknowledgement is sent to every

customer for every order to confirm pricing and the specifications of the products ordered.

The revenue is recognized at a point in time when the product is shipped to the customer.

Life Sciences

Revenues from the Life Sciences segment are derived from the sale of high-quality monoclonal and polyclonal antibodies, diagnostic reagents and diagnostic kits

and other immunoreagents for biomedical research and antibody manufacturing.

Revenues are recognized when products are shipped and risk of loss is transferred to the carrier(s) used.

Custom brokerage

Life Sciences and Manufacturing

Revenues from the Life Sciences segment are derived from the

sale of high-quality monoclonal and polyclonal antibodies, diagnostic reagents and diagnostic kits and other immunoreagents for biomedical research and antibody manufacturing.

Revenues from the

Company’s Manufacturing segment, which is comprised of Indco, a majority-owned subsidiary of the Company that manufactures and distributes mixing equipment and apparatus for specific applications within various industries, are derived from

the engineering, manufacture and delivery of specialty mixing equipment and accessories.

Revenues for Life Sciences and Manufacturing are recognized when products are shipped, and risk of loss is transferred to the carrier(s) used.

Income (loss) per common share

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unvested restricted stock, during the period.

Diluted net income (loss) per share reflects the additional dilution from potential issuances of common stock, such as stock issuable pursuant to the exercise of stock options or warrants or the

vesting of restricted stock units.

The treasury stock method is used to calculate the potential dilutive effect of these common stock equivalents.

Potentially dilutive shares are excluded from the computation of diluted net income (loss) per

share when their effect is anti-dilutive.

Stock-based compensation to employees

Diluted net income (loss) per share reflects the additional dilution from potential issuances of common stock, such as stock issuable pursuant to the exercise of stock options.

The treasury stock

method is used to calculate the potential dilutive effect of these common stock equivalents.

Potentially dilutive shares are excluded from the computation of diluted net income (loss) per share when their effect is anti-dilutive.

Equity classified share-based awards

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The Company is required to purchase 20 %

per year of the 8.35 % mandatorily redeemable non-controlling interest at the option of the holders beginning on the third

anniversary of the date of the Indco acquisition, which was March 21, 2019.

As of September 30, 2021, the holders had not exercised their redemption rights.

On November 30, 2020, a minority owner of Indco exercised 7,000 options to purchase Indco’s common stock at an exercise price of $ 6.48 for an aggregate

purchase price of $ 45 .

Indco issued a related party promissory note in the amount of $ 45 , which bears interest at 1 % per annum; both interest

and principal are payable on the maturity date of December 31, 2023 .

This note is included in security deposits and other

per year of the mandatorily redeemable non-controlling interest at the option of the holders beginning on the third anniversary of the date of the Indco acquisition, which was March 21, 2019.

As of September 30, 2022, the holders had not

exercised their redemption rights.

On December 13, 2021, two minority owners of Indco exercised 7,000 and 3,372 options to

purchase Indco’s common stock at an exercise price of $ 6.48 and $ 12.07 for an aggregate purchase price of $ 45 and $ 41 , respectively.

Indco issued related party promissory notes in the amount of $ 45 and $ 41 , respectively, which bear interest at 1 % per annum;

both interest and principal are payable on the maturity date of December 31, 2024 .

On November 30, 2020, a minority owner of Indco exercised 7,000

options to purchase Indco’s common stock at an exercise price of $ 6.48 for an aggregate purchase price of $ 45 .

Indco issued a related party promissory note in the amount of $ 45 , which bears interest at 1 % per annum; both interest and

principal are payable on the maturity date of December 31, 2023 .

These notes are included in security deposits and other

long-term assets.

The fair value of the 7,000 shares of Indco’s common stock was recorded as an increase in mandatorily redeemable non-controlling interest.

As a result of the exercise of 7,000 options to purchase Indco’s stock, the mandatorily redeemable non-controlling interest percentage was 9.32 % as of September 30, 2021.

The fair value of the shares issued of Indco’s common stock was recorded as an increase in mandatorily redeemable non-controlling interest.

As a result of the exercise of options to purchase Indco’s stock, the

mandatorily redeemable non-controlling interest percentage was 9.77 % and 9.32 % as of September 30, 2022 and 2021.

On the date the Company acquires the controlling interest in a business combination, the fair value of the non-controlling interest is recorded in the long-term

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Recently issued accounting pronouncements not yet adopted

In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-04, Reference Rate Reform (Topic 848) and subsequent amendments to the initial guidance:

ASU 2021-01, which provides temporary optional expedients and exceptions to the current

guidance on contract modifications to ease the financial reporting burdens related to the expected market transition from London Interbank Offered Rate (LIBOR) and other interbank offered rates to alternative reference rates.

The amendments

are effective as of March 12, 2020 and apply to contract modifications made before December 31, 2022.

As of September 30, 2021, the Company had not utilized any of the expedients discussed within this ASU;

however, it continues to assess

its agreements to determine if LIBOR is included and if the expedients would be utilized through the allowed period of December 31, 2022.

In March 2020 and January 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.

2020-04, “Facilitation of the Effects of Reference Rate Reform on Financial

Reporting” (“ASU 2020-04”), and ASU No.

2021-01, “Reference Rate Reform:

Scope” (“ASU 2021-01”), respectively.

Together, ASU 2020-04 and ASU 2021-01 provide temporary optional expedients and exceptions for the application of U.S.

certain criteria are met, to contract modifications, hedging relationships, and other arrangements that are expected to be impacted by the global transition away from certain reference rates, such as the London Interbank Offered Rate

(“LIBOR”) and other interbank offered rates, towards new reference rates, such as the Secured Overnight Financing Rate (“SOFR”).

The guidance in ASU 2020-04 and ASU 2021-01 was effective upon issuance and, once adopted, may be applied

prospectively to contract modifications and hedging relationships through December 31, 2022.

We are currently evaluating the effect that the new guidance will have on our financial position, results of operations and related disclosures.

In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and

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using a cumulative-effect transition method.

We are currently evaluating the effect that the new standard will have on our financial position, results of operations and

related disclosures.

We are currently evaluating the effect that the new standard will have on our financial position, results of operations and related disclosures.

2022 Acquisitions

On September 21, 2021, the Company completed the acquisition of all of the membership interests of Expedited

Logistics and Freight Services, LLC (“ELFS”) and ELFS Brokerage LLC, a wholly-owned subsidiary of ELFS.

The purchase price for the membership interests was $ 19,000 , subject to certain closing adjustments as set forth in the related purchase agreement.

Further earnout payments in an amount not anticipated to exceed $ 4,500 will be due to the former members of ELFS based on the operating profit earned by ELFS.

The transaction closed on September 21, 2021, upon

which the former members of ELFS were paid $ 13,000 in cash and were issued an aggregate amount of $ 6,000 in subordinated promissory notes.

The preliminary fair value of the consideration transferred of $ 21,437 was valued as of the date of the acquisition as follows:

Life Sciences

On August 15, 2022, the Company completed a business combination whereby it acquired all of the membership interests

of ECM Biosciences LLC (“ECM”), for $ 850 , net of $ 16 cash received.

At closing, the former member of ECM was paid $ 600 in

cash and an additional $ 250 was due to the former member which is included in accrued expenses and other current liabilities.

connection with the combination, the Company recorded an aggregate of $ 24 in goodwill and $ 222 in other identifiable intangibles.

This acquisition was funded with cash provided by normal operations.

The results of operations of the

acquired businesses are included in the Janel’s consolidated results of operations since the date of the acquisition.

Supplemental pro forma information has not been provided as the acquisition did not have a significant impact on Janel’s

consolidated results of operations individually or in aggregate.

2021 Acquisitions

On September 21, 2021, the Company completed the acquisition of all of the membership interests of ELFS and ELFS

Brokerage LLC, a wholly-owned subsidiary of ELFS.

The purchase price for the membership interests was $ 19,000 , subject to certain

closing adjustments as set forth in the related purchase agreement.

Further earnout payments in an amount not anticipated to exceed $ 4,500

will be due to the former members of ELFS based on the operating profit earned by ELFS.

Upon the closing of the transaction, the former members of ELFS were paid $ 13,000 in cash and were issued an aggregate amount of $ 6,000 in subordinated promissory notes.

Refer to Note 8 to the Condensed Consolidated Financial Statements for ELFS subordinated promissory notes information.

The ELFS acquisition was funded with cash provided by normal operations, borrowings under the Amended Loan and Security Agreement (the

“Santander Loan Agreement”) with Santander Bank, N.A.

(“Santander”) dated September 21, 2021, as well as subordinated promissory notes issued to the former members of ELFS.

This acquisition was completed to expand our product offerings in

our Logistics segment.

The preliminary fair value of the consideration transferred of $ 21,437 was valued a of the date of the

acquisition as follows:

cash - $ 13,000 ;

earnout payments - $ 3,600 ;

and subordinated promissory notes - $ 4,837 (net of working capital adjustment of $ 1,163 ).

Certain closing

adjustments to the purchase price were made, primarily related to calculations of net working capital (as described in the purchase agreement) versus the working capital target (as described in the purchase agreement).

Specifically, net

working capital was determined to be less than the working capital target by an amount of $ 1,163 , resulting in a reduction in the

purchase price and a reduction in the subordinated promissory notes of $ 1,163 .

As part of the purchase agreement, at closing the ending cash balance of ELFS in the amount of $ 1,322 will remain on deposit with the Company for up to ninety days and returned to the members as described in the Purchase Agreement;

this amount is included in cash and accrued liabilities.

This ELFS acquisition was funded with cash provided by normal operations, borrowings under the Amended Loan

Agreement dated September 21, 2021, as well as subordinated promissory notes issued to the Members.

This acquisition was completed to expand our product offerings in our Logistics segment.

ELFS results for the period from the acquisition

through September 30, 2021 are included in the results of operations for the twelve months ended September 30, 2021.

This includes revenues, forwarding expense, selling, general and administrative expense, and net

income from operations of ELFS, which amounted to $ 2,867 , $ 2,257 , $ 573 , and $ 37 , respectively.

ELFS provides a variety of logistic services, which include domestic and international

and subordinated promissory notes - $ 4,837

(preliminary net of working capital adjustment of $ 1,163 ).

In March 2022, the fair value of the consideration transferred was

adjusted to $ 21,700 , and the fair value of the subordinated promissory notes was adjusted to $ 5,100 , in each case due to a change in the net working capital adjustment of $ 263 .

ELFS provides a variety of logistics services, which include domestic and international

freight shipping and forwarding and hazardous material warehousing and distribution.

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Purchase price allocation

In accordance with the acquisition method of accounting, the Company allocated the consideration paid for ELFS to the net tangible and identifiable intangible

assets based on their estimated fair values.

The Company preliminary valuation of assets acquired and liabilities assumed, and, the fair value amounts noted are in the table below.

The final determination of the fair value of certain assets

and liabilities will be completed as soon as the necessary information is available but no later than one year from the acquisition date.

Goodwill represents the excess of the purchase price over the fair value of the underlying net tangible

and identifiable intangible assets ( in

In accordance with the acquisition method of accounting, the Company allocated the consideration paid for ELFS to the net tangible and identifiable

intangible assets based on their estimated fair values.

The Company’s valuation of assets acquired and liabilities assumed, and the fair value amounts noted, are in the table below.

Goodwill represents the excess of the purchase price over

the fair value of the underlying net tangible and identifiable intangible assets (in thousands) .

Accounts Receivable

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Total Consideration Paid

The following table summarizes, on an unaudited pro forma basis, the condensed combined results of operations of the Logistics Segment for the years ended September 30, 2021 and 2020 assuming the acquisition of ELFS was

made on October 1, 2019 (in thousands).

Fiscal years ended

September 30,

The following table summarizes, on an unaudited pro forma basis, the condensed combined

results of operations of the Logistics Segment for the years ended September 30, 2021 assuming the acquisition of ELFS was made on October 1, 2020 (in thousands).

Forwarding expense

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On December 31, 2020, through the Company’s Logistics segment, which is comprised of several wholly-owned subsidiaries completed a business combination whereby it acquired

substantially all of the assets and certain liabilities of a logistics services provider with two U.S.

aggregate purchase price for this acquisition was $ 1,282 .

At closing, $ 1,182 was paid in cash and $ 100 was placed in escrow

for a period of twelve months for the purpose of securing the indemnification obligations of former stockholders.

Company recorded an aggregate of $ 304 in goodwill and $ 531 in other identifiable intangibles.

The acquisition was funded with cash provided by normal operations, funds available under the Santander Credit Facility along

with a note to the former owner.

substantially all of the assets and certain liabilities of W.

Zanes, a logistics services provider with two U.S.

The aggregate purchase price for this acquisition was $ 1,282 .

At closing, $ 1,182 was paid in cash and $ 100

was placed in escrow for a period of twelve months for the purpose of securing the indemnification obligations of former

stockholders.

The Company recorded an aggregate of $ 304 in goodwill and $ 531 in other identifiable intangibles.

The acquisition was funded with cash provided by normal operations, funds available under the Santander Credit Facility.

Supplemental pro forma information has not been provided as the acquisition did not have a significant impact on Janel’s consolidated results of operations, individually or in aggregate.

This acquisition

was completed to expand our product offerings in our Logistics segment.

This acquisition was completed to expand our

product offerings in our Logistics segment.

Life Sciences

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purchase price of $ 3,419 , net of $ 105 cash received.

At closing, $ 1,628 was paid in cash and a

subordinated promissory note in the amount of $ 1,850 was issued to the former owner.

The Company recorded the present value

of $ 1,760 for the subordinated promissory note.

The Company recorded an aggregate of $ 1,438 in goodwill and $ 1,430

in other identifiable intangibles.

Subsequent to closing, the Company recorded an additional $ 30 purchase price adjustment

related to an I.R.S Code Section 338(h)(10) election that was made in connection with the ICT acquisition.

The ICT acquisition will be treated as an asset purchase for income tax purposes, which will allow for the tax deduction of ICT’s

The acquisition was funded with cash provided by normal operations along with a note to the former owner.

The results of operations of the acquired businesses are included in Janel’s condensed consolidated results of

operations since the date of the acquisition.

Supplemental pro forma information has not been provided as the acquisition did not have a significant impact on Janel’s condensed consolidated results of operations, individually or in

ICT is a developer and manufacturer of cell viability assay kits, ELISA buffers and fluorescent reagents for use in research and diagnostics.

ICT was founded in 1994 and is headquartered in Bloomington, Minnesota.

acquisition of ICT was completed to expand our product offerings in our Life Sciences segment.

2020 Acquisition

Effective July 23, 2020, the Company acquired all of the outstanding common stock of a logistics services provider with two U.S.

locations for $ 132 , net of $ 853 cash received.

At closing the former stockholder was paid $ 300 in cash and $ 194 , $ 193 and $ 193 was or is due to the stockholder as deferred

acquisition payments on the first, second and third anniversary of the closing date and the Company assumed $ 135 in the form of a

Paycheck Protection Program (PPP) loan.

The Company recorded an aggregate of $ 506 in goodwill and $ 690 in other identifiable intangibles.

This acquisition was funded with cash provided by normal operations along with a deferred acquisition

payment due to the former stockholder.

The results of operations of the acquired businesses are included in the Janel’s consolidated results of operations since the date of the acquisition.

Supplemental pro forma information has not been

provided as the acquisitions did not have a significant impact on Janel’s consolidated results of operations individually or in aggregate.

At closing, $ 1,628 was paid in cash and a subordinated promissory note

in the amount of $ 1,850 was issued to the former owner.

The Company recorded the present value of $ 1,760 for the subordinated promissory note.

The Company recorded an aggregate of $ 1,438 in goodwill and $ 1,430 in other identifiable

Subsequent to closing, the Company recorded an additional $ 30 purchase price adjustment related to an I.R.S Code

Section 338(h)(10) election that was made in connection with the ICT acquisition.

The ICT acquisition will be treated as an asset purchase for income tax purposes, which will allow for the tax deduction of ICT’s goodwill.

acquisition was funded with cash provided by normal operations along with a note to the former owner.

The results of operations of the acquired businesses are included in Janel’s condensed consolidated results of operations since the

date of the acquisition.

Supplemental pro forma information has not been provided as the acquisition did not have a significant impact on Janel’s condensed consolidated results of operations, individually or in aggregate.

developer and manufacturer of cell viability assay kits, ELISA buffers and fluorescent reagents for use in research and diagnostics.

ICT was founded in 1994.

The acquisition of ICT was completed to expand our product offerings in our

Life Sciences segment.

PROPERTY AND EQUIPMENT

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September 30,

Building and improvements

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Less Accumulated Depreciation

On February 4, 2020, Indco entered into a Purchase and Sale Agreement to acquire the land and building which serves as the Indco office and manufacturing

facility in New Albany, Indiana for a total purchase price of $ 884 .

This transaction closed on July 1, 2020.

Depreciation expense for the fiscal year ended September 30, 2022 and 2021 was $ 484 and $ 371 , respectively.

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September 30,

Customer relationships

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Trademarks/names

Accumulated Amortization

Accumulated Depreciation

The composition of the intangible assets balance at September 30, 2022 and 2021 is as follows (in thousands) :

September 30,

Manufacturing

Life Sciences

Accumulated Amortization

Manufacturing

Accumulated Depreciation

Amortization expense of intangible assets for the year ended September 30, 2022 and 2021 was $ 1,976 and $ 1,120 , respectively.

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Fiscal Year 2027

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

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

The composition of the goodwill balance at September 30, 2022 and 2021 is as follows (in thousands) :

September 30,

Manufacturing

Life Sciences

Manufacturing

NOTES PAYABLE - BANKS

Santander Bank Facility

On October 17, 2017, the Janel Group subsidiaries (collectively the “Janel Group Borrowers”), with the Company as a guarantor, entered into a Loan and Security

Agreement (the “Santander Loan Agreement”) with Santander Bank, N.A.

(“Santander”) with respect to a revolving line of credit facility (the “Santander Facility”).

As amended in March 2018, November 2018, March 2020, July 2020 and December

2020, the Santander Facility provided that the Janel Group Borrowers can borrow up to $ 17,000 limited to 85 % of the Janel Group Borrowers’ aggregate outstanding eligible accounts receivable, subject to adjustment as set forth in the Santander Loan

Interest accrued on the Santander Facility at an annual rate equal to, at the Janel Group Borrowers’ option, prime plus 0.50 %,

or LIBOR ( 30, 60 or 90 day ) plus 2.25 %

subject to a LIBOR floor of 75 basis points.

The Janel Group Borrowers’ obligations under the Santander Facility are secured by

all of the assets of the Janel Group Borrowers, while the Santander Loan Agreement contains customary terms and covenants.

As a result of its terms, the Santander Facility is classified as a current liability on the consolidated balance

On September 21.

2021, Janel Group, ELFS and ELFS Brokerage, LLC, each, wholly-owned subsidiaries of the Company, jointly and severally, individually and collectively as borrowers (collectively with Janel, the “Borrowers”),

the Company and Expedited Logistics and Freight services, LLC, an Oklahoma limited liability company, as loan party obligors, and Santander Bank, N.A., as lender, entered into an Amended and Restated Loan and Security Agreement (as amended

and restated, the “Loan Agreement”) that amended and restated the existing Santander Loan Agreement.

The Loan Agreement provides for, among other things, the following modifications to the existing Santander Loan Agreement:

(1) ELFS and ELFS Brokerage, LLC were added as borrowers;

(2) the maximum revolving facility amount

available was increased from $ 17.0 million to $ 30.0 million (limited to 85 % of the borrowers’ eligible accounts receivable borrowing base and

reserves, subject to adjustments set forth in the Loan Agreement);

(3) the maturity date was extended from October 12, 2022 to September 21, 2026 ;

(4) interest accrues at an annual rate equal to LIBOR ( 30, 60 or 90 day ) plus 2.25 % subject to a LIBOR floor of 75 basis points at

close, with a potential LIBOR floor reduction to 25 basis points upon certain conditions;

and (5) the Company was provided the

option of making Series C preferred payments or distributions if specified conditions are met.

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

On October 17, 2017, Janel Group (“Janel Group”), a wholly-owned subsidiary of the Company, and its subsidiaries, with the Company as a guarantor, entered into a

Loan and Security Agreement (the “Santander Loan Agreement”) with Santander Bank, N.A.

(“Santander”) with respect to a revolving line of credit facility (the “Santander Facility”), as amended.

The borrowers’ obligations under the Santander

Facility are secured by all of the assets of the borrowers, and the Santander Loan Agreement contains customary terms and covenants.

On September 21, 2021, the Santander Loan Agreement was amended and restated by the Amended and Restated

Loan and Security Agreement by and among Janel Group and Janel Group’s wholly-owned subsidiaries, ELFS and ELFS Brokerage, LLC, as borrowers (the “Borrowers”), the Company and Expedited Logistics and Freight services, LLC, an Oklahoma limited

liability company and wholly-owned subsidiary of Janel Group, as loan party obligors, and Santander.

As amended and restated , the Santander Loan Agreement provided that the maximum revolving facility amount available increased from $ 17,000 to $ 30,000 (limited to 85 % of the

borrowers’ eligible accounts receivable borrowing base and reserves, subject to adjustments set forth in the Loan Agreement), interest accrued at an annual rate equal to LIBOR ( 30, 60 or 90 day ) plus 2.25 % subject to a LIBOR floor of

75 basis points at close, with a potential LIBOR floor reduction to 25 basis points upon certain conditions;

the Company was provided the option of making distributions of up to $ 1 million annually on its outstanding shares of Series C Cumulative Preferred Stock (the “Series C Preferred Stock”) if specified conditions are met, and the maturity

date of the Santander Facility was extended to September 21, 2026 .

March 31, 2022, the Santander Loan Agreement was amended to provide for, among other changes:

(i) the maximum revolving facility amount available was increased from $ 30,000 to $ 31,500 (limited to 85 % of the Borrowers’ eligible accounts receivable borrowing base and reserves, subject to adjustments set forth in the Santander Loan

Agreement) ; (ii) the LIBOR basis on which interest under the Santander Loan Agreement was calculated was changed to the Secured Overnight Financing Rate (“SOFR”) and interest on the Santander Facility accrues at an annual rate equal to

the one-month SOFR plus 2.75 %;

(iii) a one-time increase from $ 1,000 to $ 3,000 in the amount the Company was permitted to distribute to holders of the Company’s Series C Preferred Stock if specified conditions are met; and (iv) the amount of indebtedness of the Company’s

Antibodies Incorporated subsidiary which the Company was permitted to guaranty was increased from $ 2,920 to $ 5,000 .

July 13, 2022, the Santander Loan Agreement was further amended by the Consent, Waiver and Second Amendment (the “Second Santander Amendment”) to (i) increase the maximum revolving facility amount available to $ 35,000 (limited to 85 % of

the Borrowers’ eligible accounts receivable borrowing base and reserves, subject to adjustments set forth in the Santander Loan Agreement), and (ii) provide for a new bridge term loan to the Company in the principal amount of up to $ 12,000 (the “Bridge Facility”) to be funded in connection with the acquisition by the Company of up to 45 % of the outstanding shares of Rubicon (the “Rubicon Transaction”), subject to the satisfaction of certain customary limited conditions.

The Bridge Facility was drawn on August 18, 2022 and matured on the earlier to occur of (i) twenty ( 20 ) business days

following the funding of the Bridge Facility and (ii) the date of funding of the dividend to be paid by Rubicon in connection with the Rubicon Transaction.

The Company repaid the Bridge Facility in full on August 30, 2022.

Santander Amendment also contained a one-time waiver and consent to (a) the consummation of the Rubicon Transaction, and (b) a dividend of $ 2,500

to be paid by Janel Group to the Company.

At September 30, 2022, outstanding borrowings under the Santander Facility were $ 26,396 , representing 75.4 % of the $ 35,000

available thereunder, and interest was accruing at an effective interest rate of 5.79 %.

The Company was in compliance with the covenants defined in the Santander Loan Agreement at both September 30, 2021 and September 30, 2020.

The Company was in compliance with the financial covenants defined in the Santander Loan Agreement at both September 30, 2022 and September 30, 2021.

First Merchants Bank Credit Facility

On March 21, 2016, as amended in August 2019 and July 2020, Indco executed a Credit Agreement (the “First Merchants Credit Agreement”) with First Merchants Bank

with respect to a $ 5,500 term loan, a $ 1,000

(limited to the borrowing base and reserves) revolving loan and a $ 680 mortgage loan (together, the “First Merchant Facility” ).

Interest accrues on

the term loan at an annual rate equal to the one-month LIBOR plus either 2.75 % (if Indco’s total funded debt to EBITDA ratio is less than 2 :1),

or 3.5 % (if Indco’s total funded debt to EBITDA ratio is greater than or equal to 2 :1).

Interest accrues on the revolving loan at an annual rate equal to the one-month

LIBOR plus 2.75 %.

Interest accrues on the mortgage loan at an annual rate of 4.19 %.

Indco’s obligations under the First Merchants Bank Facility are secured by all of Indco’s real property and other assets, and are guaranteed by Janel.

Additionally, Janel’s guarantee of Indco’s obligations is secured by a pledge of Janel’s Indco shares.

The term loan and revolving loan portions of the First Merchants Facility will expire on August 30, 2024 , and the mortgage loan will mature on July 1, 2025

(subject to earlier termination as provided in the First Merchants Credit Agreement), unless renewed or extended.

On March 21, 2016, Indco entered into a Credit Agreement (the “First Merchants Credit Agreement”) with First Merchants Bank (“First Merchant”), as amended .

On August 1, 2022, Indco and First Merchants entered into Amendment No.

3 to the First Merchants Credit Agreement, modifying the terms of Indco’s credit

Under the revised terms, the credit facilities consist of a $ 5,500 term loan, a $ 1,000 (limited to the borrowing base and reserves) revolving loan, and the continuation of a mortgage loan in the original principal amount of $ 680 (collectively, the “First Merchants Facility” ).

Interest will

accrue on the term loan at an annual rate equal to one-month adjusted term SOFR plus either 2.75 % (if Indco’s total funded debt to EBITDA ratio is less than 2 :1), or 3.5 % (if Indco’s total funded debt to EBITDA ratio is greater

than or equal to 2 :1).

Interest will accrue on the revolving loan at an annual rate equal to one-month adjusted term SOFR plus 2.75 %.

Interest will accrue on the mortgage loan at an annual rate of 4.19 %.

Indco’s obligations under the First Merchants Credit

Facility are secured by all of Indco’s real property and other assets, and are guaranteed by Janel, and Janel’s guarantee of Indco’s obligations is secured by a pledge of Janel’s Indco shares.The term loan and revolving loan portions of the

First Merchants Credit Facility will expire on August 1, 2027 , and the mortgage loan will mature on July 1, 2025 (subject to earlier termination as provided in the First Merchants Credit Agreement), unless renewed or extended.

As of September 30, 2022, there were no

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an effective interest rate of 2.83 % and 4.19 %, respectively.

Indco was in compliance with the covenants defined in the First Merchants Credit Agreement at both September 30, 2021 and September 30, 2020 (in thousands) .

September 30,

Indco was in compliance with the financial covenants define d in the First Merchants Credit Agreement at both September 30, 2022 and September 30, 2021 (in thousands).

September 30,

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Long-term Portion

Term Loan is due in monthly installments of $ 65 plus monthly interest, at LIBOR plus 2.75 % to 3.5 % per annum,

Term Loan is due in monthly installments of $ 46 plus monthly interest, at SOFR plus 2.75 % to 3.5 % per annum,

mortgage loan is due in monthly installments of $ 4 , including interest at 4.19 %.

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First Northern Bank of Dixon

On June 21, 2018, as amended November 2019 and October 2, 2020, Antibodies Incorporated (“Antibodies”), a wholly-owned subsidiary of the Company (by succession), entered into a Business

Loan Agreement (the “First Northern Loan Agreement”) with First Northern Bank of Dixon (“First Northern”), with respect to a $ 2,235

term loan (the “First

Northern Term Loan”) which bears interest at an annual rate of 4.00 % and matures on November 14, 2029 .

In addition, Antibodies has a $ 500

revolving credit facility with First Northern which currently bears interest at the annual rate of 4.0 % and matures on October 5, 2021 (the “First Northern Revolving Loan”).

On June 21, 2018, as amended November 2019 and October 2, 2020, Antibodies Incorporated (“Antibodies”), a wholly-owned subsidiary of the Company, entered into a Business Loan Agreement

(the “First Northern Loan Agreement”) with First Northern Bank of Dixon (“First Northern”) as amended.

The First Northern Loan Agreement provides for a $ 2,235 term loan (“First Northern Term Loan”) which bears interest at an annual rate of 4.00 %

and matures on November 14, 2029 .

In addition, Antibodies has a $ 750 revolving credit facility with First Northern which currently bears interest at a variable index rate, currently 7.75 % and matures on November 10, 2023 (the “First

Northern Revolving Loan”).

Antibodies also entered into two separate

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(“First Northern Solar Loan”), bearing interest at the annual rate of 4.43 % (subject to adjustment in five years ) and maturing on November 14, 2029 ;

and a $ 60 term loan in connection with a potential expansion of generator capacity on the Antibodies property (“Generator Loan”) bearing

interest at the annual rate of 4.25 % and maturing on November 5, 2025 .

and a $ 60 term loan in connection with a potential expansion of generator capacity on the Antibodies property (“Generator Loan”),

bearing interest at the annual rate of 4.25 % and maturing on November 5, 2025 .

There were no outstanding borrowings

under the Generator Loan as September 30, 2021 and 2020.

under the Generator Loan at September 30, 2022 and 2021 .

Antibodies’ obligations to First Northern are secured by Antibodies’ real property and are guaranteed by Janel .

As of September 30, 2022, the total amount outstanding under the First Northern Term Loan was $ 2,084 , of which $ 2,027 is included in long-term debt

and $ 55 is included in current portion of long-term debt, with interest accruing at an effective interest rate of 4.18 %.

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

As of September 30, 2020, the total amount outstanding under the First Northern Term Loan was $ 2,192 , of which $ 2,139 is included in long-term debt and $ 53 is included in current portion of long-term debt, with interest accruing at an effective interest rate of 4.18 %.

As of September 30, 2020, the total amount outstanding under the First Northern Solar Loan was $ 81 , of which $ 76 is included in long-term debt and $ 5 is included in current portion of long-term debt, with interest accruing at an effective interest rate of 4.43 %.

September 30,

and $ 57 is included in the current portion of long-term debt, with interest accruing at an effective interest rate of 4.18 %.

As of September 30, 2022, the total amount outstanding under the First Northern Solar Loan was $ 23 , of which $ 15 is included in long-term debt and $ 8 is included in the current portion of long-term debt, with interest accruing at an effective interest rate of 4.43 %.

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

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

September 30,

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Fiscal Year 2027

The Company was in compliance with the covenants defined in the First Northern Loan Agreement at September 30, 2021 and September 30, 2020.

The Company was in compliance with the financial covenants defined in the First Northern Loan Agreement at September 30, 2022 and September 30, 2021.

SUBORDINATED PROMISSORY NOTES – RELATED PARTY

Antibodies is the obligor on two

4 % subordinated promissory notes (together, the “AB HoldCo Subordinated Promissory Notes”) payable to certain former shareholders

of Antibodies.

Both of the AB HoldCo Subordinated Promissory Notes are guaranteed by the Company, are unsecured and are subordinate to the terms of the Company’s debt to any federal or state bank or other institutional lender.

Interest on the AB HoldCo Subordinated Promissory Notes is payable in arrears on the last business day of each calendar quarter , the full outstanding principal balance and accrued, unpaid interest is due on June 22, 2021 and may be prepaid, in whole or in part, without premium or penalty.

As of June 30, 2021, the AB HoldCo Subordinated Promissory Notes had been repaid.

of September 30, 2020, the amount outstanding on the two AB HoldCo Subordinated Promissory Notes was $ 344 , which is included in the current portion of subordinated promissory notes.

Janel Group is the obligor on a 6.75 %

subordinated promissory note (the “Honor Subordinated Promissory Note”) with a former owner of Honor Worldwide Logistics LLC, now a direct wholly-owned subsidiary of Janel Group and an indirect wholly-owned subsidiary of the Company

The Honor Subordinated Promissory Note is guaranteed by the Company.

The Honor Subordinated Promissory Note is subordinate to and junior in right of payment for principal, interest, premiums and other

amounts payable to the Santander Bank Facility and the First Merchants Bank Credit Facility.

The Honor Subordinated Promissory Note is payable in twelve equal consecutive quarterly installments of principal and interest of $ 42 each, on the last day of January, April, July and October beginning in January 2019.

The outstanding principal and accrued and unpaid

interest are payable on November 20, 2021 and may be repaid, in whole or in part, without premium or penalty.

As of September

30, 2021, the Honor Subordinated Promissory Note had been repaid.

As of September 30, 2020, the total amount outstanding under the Honor Subordinated Promissory Note was $ 199 , of which $ 160 is included in the current portion

of subordinated promissory notes and $ 39 is included in long-term portion of subordinated promissory notes.

Aves is the obligor on a 0.5 %

subordinated promissory note in the amount of $ 1,850 issued to the former owner of ICT (the “ICT Subordinated Promissory

The ICT Subordinated Promissory Note is payable in sixteen scheduled quarterly installments of principal and interest beginning March 4, 2021, matures on March 21, 2025 , and may be prepaid, in whole or in part, without premium or penalty.

The ICT Subordinated Promissory Note is guaranteed by the Company and is secured by the membership interests in ICT.

The ICT Subordinated Promissory Note is subordinate to and junior in right of payment for principal interest premiums and other amounts payable to the Santander Bank Facility, First Merchants Bank Credit Facility and the First Northern

Bank of Dixon.

As of September 30, 2021, the amount outstanding under the ICT Subordinated Promissory Note was $ 1,237 , of which

$ 550 is included in the current portion of subordinated promissory notes and $ 687 is included in the long-term portion of subordinated promissory notes.

Aves Labs, Inc., a wholly-owned subsidiary of the Company, is the obligor on a fixed 0.5 % subordinated promissory note in the amount of $ 1,850 (the “ICT

Subordinated Promissory Note”) issued to the former owner of ImmunoChemistry Technologies, LLC, in connection with a business combination whereby the Company acquired all of the membership interests of ICT.

The ICT Subordinated Promissory

Note is payable in sixteen scheduled quarterly installments of principal and interest beginning March 4, 2021, matures on December 4, 2024 and may be prepaid, in whole or in part, without premium or penalty.

The ICT Subordinated Promissory Note is guaranteed by the Company and is secured by the Company’s membership interests in ICT.

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

As of September 30, 2022, the amount outstanding under the ICT Subordinated Promissory Note was $ 707 , of which $ 425 is

included in the current portion of subordinated promissory notes and $ 282 is included in the long-term portion of

subordinated promissory notes.

As of September 30, 2021, the amount outstanding under ICT Subordinated Promissory Note was $ 1,237 , of which $ 550 is included in the current

portion of subordinated promissory notes and $ 687 is included in the long-term portion of subordinated promissory notes.

Janel Group is the obligor on four

4 % subordinated promissory notes of totaling $ 6,000 (together, the “ELFS Subordinated Promissory Notes”) payable to certain former shareholders of ELFS.

All of the ELFS Subordinated Promissory Notes are guaranteed by the Company and are subordinate

to and junior in right of payment for principal, interest, premiums and other amounts payable to the Santander Bank Facility and the First Merchants Bank Credit Facility.

The ELFS Subordinated Promissory Notes are payable in twelve equal consecutive quarterly

installments of principal together with accrued interest.

Beginning October 15, 2021 and on the same day of the next eight

consecutive calendar quarters, thereafter payment of accrued interest and unpaid interest is due to the former shareholders.

Beginning October 15, 2023 and on the same day of the next twelve consecutive calendar quarters, thereafter payment of principal together with accrued interest and unpaid interest is due to the former shareholders.

described in Note 2.

The ELFS Subordinated Promissory Notes totaling $ 6,000 were recorded net of working capital adjustment of $ 1,163 .

September 30,

fixed 4 % subordinated promissory notes totaling $ 6,000 in the aggregate (together, the “ELFS Subordinated Promissory Notes”), payable to certain former shareholders of ELFS.

All of the ELFS Subordinated Promissory Notes are

guaranteed by the Company and are subordinate to and junior in right of payment for principal, interest, premiums and other amounts payable to the Santander Bank Facility and the First Merchants Facility.

The ELFS Subordinated

Promissory Notes are payable in twelve equal consecutive quarterly installments of principal together with accrued interest.

Beginning October 15, 2021, and on the same day of the next eight consecutive calendar quarters, thereafter payment of accrued interest and unpaid interest is due to the former shareholders.

Beginning October 15, 2023, and

on the same day of the next twelve consecutive calendar quarters, thereafter payment of principal together with accrued

interest and unpaid interest is due to the former shareholders.

In June 2022, the principal amount of the ELFS Subordinated Promissory Notes was adjusted to $ 5,100 due to a revised working capital adjustment of $ 900 .

As of September 30, 2022 and September 30, 2021, the amount outstanding under the ELFS Subordinated Promissory Notes was $ 5,100 and $ 4,837 ,

respectively, and was included in the long-term portion of subordinated promissory notes.

September 30,

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Fiscal Year 2026

SBA PAYCHECK PROTECTION PROGRAM LOANS

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Under the original terms, all principal and interest payments are deferred for six months from the date of the note.

The Paycheck Protection

Flexibility Act of 2020 P.L.

116-142, extended the deferral period for loan payments to either (1) the date that the SBA remits the borrower’s loan forgiveness amount to the lender or (2) if the borrower does not apply for loan forgiveness,

ten months after the end of the borrower’s loan forgiveness covered period.

To the extent the Company PPP Loan is not forgiven, principal and interest

payments in the amount of $ 153 are due monthly commencing on September 1, 2021.

The Company may prepay the note at any time prior to maturity without penalty.

The Company may only use funds from the Company PPP Loan for

purposes specified in the CARES Act and related PPP rules, which include payroll costs, costs used to continue group health care benefits, rent, utilities and certain mortgage payments (“qualifying expenses”).

The loan and accrued interest

are forgivable after eight weeks (or an extended 24-week covered period) as long as the borrower uses the loan proceeds for eligible purposes, including payroll, benefits, rent and utilities, and maintains its payroll levels.

On July 23, 2020, the Company assumed a PPP Loan in connection with an

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as a Gain on Paycheck Protection Program loan forgiveness.

As of September 30, 2020, the amount outstanding, including accrued interest, under the Acquisition PPP Loan and

Company PPP Loan was $ 135 and $ 2,738 ,

respectively, of which $ 960 is included in long-term debt and $ 1,913 is included in current portion of long-term debt.

STOCKHOLDERS’ EQUITY

Janel is authorized to issue 4,500,000 shares of

common stock, par value $ 0.001 .

In addition, the Company is authorized to issue 100,000 shares of preferred stock, par value $ 0.001 .

preferred stock is issuable in series with such voting rights, if any, designations, powers, preferences and other rights and such qualifications, limitations and restrictions as may be determined by the Company’s board of directors or a duly

authorized committee thereof, without stockholder approval.

The board of directors may fix the number of shares constituting each series and increase or decrease the number of shares of any series.

(in thousands, except share per share data)

Janel is authorized to issue 4,500,000 shares of common stock, par value $ 0.001 .

In addition, the Company is authorized to

issue 100,000 shares of preferred stock, par value $ 0.001 .

The preferred stock is issuable in series with such voting rights, if any, designations, powers, preferences and other rights and such qualifications, limitations and restrictions as may be determined

by the Company’s Board of Directors or a duly authorized committee thereof, without stockholder approval.

The Board of Directors may fix the number of shares constituting each series and increase or decrease the number of shares of any

On August 10, 2022, the Company issued 88,888 shares of its common stock, par value $ 0.001 per

share (“Common Stock”), at a purchase price of $ 45 per share (the closing sale price per share of Common Stock on August 9, 2022

as reported on the Pink tier of the OTC market, or an aggregate purchase price of $ 4,000 .

The shares were sold to accredited investors in a private placement in reliance upon the exemption from

registration provided by Section 4(a)(2) of the Securities Act of 1933 and Regulation D promulgated thereunder.

Preferred Stock

Series B Convertible Preferred Stock

Shares of the Company’s Series B Convertible Preferred Stock (the “Series B Stock”) are convertible into shares of the Company’s $ 0.001 par value common stock at any time on a one- share (of Series B Stock) for ten -shares (of common stock) basis.

On April 23, 2020, a holder of Series B Stock converted 300

Shares of the Company’s Series B Convertible Preferred Stock (the “Series B Stock”) are convertible into shares of the

Company’s Common Stock at any time on a one- share (of Series B Stock) for ten -shares (of Common Stock) basis.

The Company had 31 shares of Series B Stock outstanding as of September 30, 2021.

On March 31, 2022, the Company, on behalf of two holders, converted the remaining 31

shares of Series B Stock into 306 shares of the Company’s Common Stock.

On September 25, 2020, a holder of Series B Stock

converted 300 shares of Series B Stock into 3,000 shares of the Company’s Common Stock.

The Company has 31 shares of

Series B Stock outstanding as of September 30, 2021.

On March 31, 2022, the Company submitted for filing to the

Nevada Secretary of State a Certificate, Amendment or Withdrawal of Designation withdrawing the Company’s Series B Convertible Preferred Stock from the Company’s Articles of Incorporation.

As of September 30, 2022, the Company had no shares of Series B Stock outstanding.

Series C Cumulative Preferred Stock

Shares of the Company’s Series C Cumulative Preferred Stock (the “Series C Stock”) were initially entitled to receive annual dividends at a rate of 7 % per annum of the original issuance price of $ 10 ,

when and if declared by the Company’s board of directors, with such rate to increase by 2 % annually beginning on the third

anniversary of issuance of such Series C Stock to a maximum rate of 13 %.

By the filing of the Certificate of Amendment on October

17, 2017, the annual dividend rate decreased to 5 % per annum of the original issuance price, when and if declared by the Company’s

board of directors, and increased by 1 % beginning on January 1, 2019.

Shares of the Company’s Series C Cumulative Preferred Stock (the “Series C Stock”) were initially entitled to receive

annual dividends at a rate of 7 % per annum of the original issuance price of $ 500 , when and if declared by the Company’s Board of Directors, with such rate to increase by 2 % annually beginning on the third anniversary of issuance of such Series C Stock to a maximum rate of 13 %.

By the filing of the Certificate of Amendment to the Company’s Certificate of Incorporation on March 31, 2022, the annual dividend rate decreased to 5 % per annum of the original issuance price, when and if declared by the Company’s Board of Directors and will increase by 1 % beginning on January 1, 2024.

Such rate is to increase on each January 1 thereafter for four years to a maximum rate of 9 %.

The dividend rate of the Series C Stock as of September 30, 2021 and 2020 was 8 % and 7 %.

In the event of liquidation, holders of Series C Stock shall be paid an amount equal to the original issuance price, plus any accrued but unpaid dividends thereon.

The dividend rate of

the Series C Stock as of September 30, 2022 and 2021 was 5 % and 8 %, respectively .

In the event of liquidation, holders of Series C Stock shall be paid an amount equal to the original issuance price, plus any accrued but unpaid

dividends thereon.

Shares of Series C Stock may be redeemed by the Company at any time upon notice and payment of the original issuance price, plus any accrued but unpaid dividends thereon.

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30, 2022 and September 30, 2021, respectively.

On September 30, 2021, the Company sold 1,200

shares of Series C Stock to an accredited investor at a purchase price of $ 500 per share, or an aggregate of $ 600 .

On September 13, 2020, the Company purchased 890

shares of the Series C Stock from an accredited investor at a purchase price of $ 500 per share, or an aggregate of $ 445 .

On September 29, 2020, the Company sold 650

shares of the Series C Stock to an accredited investor at a purchase price of $ 500 per share, or an aggregate of $ 325 .

Such shares issued on September 30, 2021 and September 29, 2020, were sold in private placements in reliance upon the exemption from

registration provided by Section 4(a)(2) of the Securities Act of 1933 and Regulation D promulgated thereunder.

In August 2021, the Board of Directors approved an increase in the number of shares of Series C Stock, from 20,000 shares to 30,000 shares.

For the fiscal year ended September 30, 2020 the Company paid cash dividends of $ 55 to a holder of Series C Stock.

On March 31, 2022, the Company purchased 4,687 shares of the Series C Stock from two holders at a purchase price of $ 500 per share plus accrued dividends, or an aggregate of $ 3,000 , and exchanged 4,905 shares of Series C Stock plus accrued dividends from one holder, for the issuance of 65,205

shares of the Company’s Common Stock valued at $ 47.00 per share of Common Stock (the closing price for the Common Stock on March

30, 2022), or a total value of $ 3,065 .

As a result of these transactions, the number of issued and outstanding shares of Series C

Stock was reduced from 20,960 shares to 11,368 shares.

On September 30, 2021, the Company sold 1,200 shares of Series C Stock to an accredited investor at a purchase price of $ 500

per share, or an aggregate of $ 600 .

Such shares issued on March 31, 2022 and September 30, 2021, were sold in private placements in reliance upon the

exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933 and Regulation D promulgated thereunder.

In August 2021, the Board of Directors approved an increase in the number of shares of Series C Stock,

from 20,000 shares to 30,000

For the fiscal year ended September 30, 2022 and 2021, the Company declared dividends on Series C Stock of $ 586 and $ 766 , respectively.

At September 30, 2021 and 2020,

the Company had accrued dividends of $ 2,427 and $ 1,661 , respectively.

September 30, 2022 and 2021, the Company had accrued dividends of $ 1,745 and $ 2,427 , respectively.

Equity Incentive Plan

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Corporation Equity Incentive Plan (the “Amended Plan”) pursuant to which non-statutory stock options, restricted stock awards and stock appreciation rights of the Company’s Common Stock, par value $ 0.001 per share (“Common Stock”), may be granted to employees, directors and consultants to the Company and its subsidiaries.

The Amended Plan increases the number of shares of Common Stock that may be issued pursuant to the Amended Plan from 100,000 to 200,000 shares of Common Stock of the

Company and adopts certain other non-substantive amendments.

The Amended Plan increases the number of shares of Common Stock that may be issued pursuant to the Amended Plan from 100,000 to 200,000 shares of Common Stock of the Company and adopts

certain other non-substantive amendments.

and all terms of any grant under the Amended Plan are in the discretion of the Company’s Compensation Committee.

STOCK-BASED COMPENSATION

(in thousands, except share per share data)

On October 30, 2013, the Board of Directors of the Company adopted the Company’s 2013 Non-Qualified Stock Option Plan (the “2013 Option Plan”) providing for

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Company and its subsidiaries.

On May 12, 2017, the board of directors adopted the Company’s 2017 Plan pursuant to which (i) incentive stock options, (ii) non-statutory stock options, (iii)

restricted stock awards and (iv) stock appreciation rights with respect to up to 100,000 shares of the Company’s common stock

could be granted to directors, officers, employees of and consultants to the Company.

On May 8, 2018, the board of directors of Janel adopted the Amended 2017 Plan.

The provisions and terms of the Amended 2017 Plan were the same as those in the

2017 Plan, except that the Amended 2017 Plan removed the ability of Janel to award incentive stock options and removes the requirement for stockholder approval of the 2017 Plan.

On September 21, 2021, the board of directors of the

Company adopted the Amended and Restated 2017 Janel Corporation Equity Incentive Plan (the “Amended Plan”) pursuant to which non-statutory stock options, restricted stock awards and stock appreciation rights of the Company’s Common Stock,

par value $ 0.001 per share (“Common Stock”), may be granted to employees, directors and consultants to the Company and its

On September 21, 2021, the board of directors of the Company adopted the Amended and Restated 2017 Janel Corporation Equity Incentive Plan (the “Amended and

Restated Plan”), which amended and restated the prior 2017 plan, as previously amended, and pursuant to which non-statutory stock options, restricted stock awards and stock appreciation rights with respect to up to 200,000 shares of the Company’s Common Stock may be granted to directors, officers, employees of and consultants to the Company and its

subsidiaries.

The Amended Plan increased the number of shares of Common Stock that may be issued pursuant to the Amended Plan from 100,000

to 200,000 shares of Common Stock of the Company and adopts certain other non-substantive amendments.

The Amended and Restated Plan increased the number of shares of Common Stock that may be issued pursuant to the Amended and Restated Plan from 100,000 to 200,000 shares of Common Stock of the Company and adopts certain other

non-substantive amendments.

Participants and all terms of any grant under the Amended and Restated Plan are in the discretion of the Company’s Compensation Committee.

Total stock-based compensation for the fiscal year ended September 30, 2022 and 2021 amounted to $ 832 and $ 115 , respectively, and was included in selling, general and

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Dividend yield - We have never paid dividends on our common stock and currently have no plans to do so; therefore, no dividend yield is applied.

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

the periods presented:

The fair values of our employee option awards were estimated using the

assumptions below, which yielded the following weighted average grant date fair values for the periods presented:

Risk-free interest rate

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6.90 - $ 7.19

Option for Employees

Options for Employees

Exercise Price

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(in thousands)

Outstanding balance at September 30, 2020

Outstanding balance September 30, 2021

Outstanding balance at September 30, 2022

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of total unrecognized compensation expense related to the unvested employee stock options which is expected to be recognized over a weighted average period of two years .

Options for Non-Employees

There were no non-employee options awarded during the fiscal years ended September 30, 2021 and 2020, respectively.

Term (in years)

(in thousands)

Outstanding balance at September 30, 2020

Outstanding balance at September 30, 2021

Exercisable at September 30, 2021

The aggregate intrinsic value in the above table was calculated as the difference between the closing price of our common stock at September 30, 2021, of $ 23 per share and the exercise price of the stock options that had strike prices below such closing price.

As of September 30, 2021, there was no unrecognized compensation expense related to the unvested stock options.

Liability classified share-based awards

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Expected volatility

103.0 %- 105.4

101.2 %- 101.7

Dividend yield

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mandatorily redeemable security.

While their redemption does not occur on a fixed date, there is an unconditional obligation for the Company to repurchase the shares upon death, which is certain to occur at some point in time.

While their redemption does not occur on a fixed date, there is an unconditional obligation for the Company to repurchase the shares upon death.

As of September 30, 2022, there was approximately $ 39

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Restricted Stock

During the fiscal year ended September 30, 2021, there were no

shares of restricted stock granted.

Under the Amended 2017 Plan, each grant of restricted stock vests over a three-year period and

the cost to the recipient is zero .

Restricted stock compensation expense, which is a non-cash item, is being recognized in the

Company’s financial statements over the vesting period of each restricted stock grant.

As of September 30, 2021, there was no

unrecognized compensation cost related to non-employee unvested restricted stock.

As of September 30, 2021, the Company had issued 35,000 shares of vested restricted stock.

As of September 30, 2020, included in accrued expenses and other current liabilities was $ 306 which represents 35,000 shares of restricted stock that vested but

were not issued.

On March 30, 2022, the Board of Directors of the Company approved an equity grant of 15,000 shares of restricted stock to an employee of the Company pursuant to the Company’s Amended and Restated Plan, vesting immediately.

The compensation cost related to

this award was approximately $ 705 for the year ended September 30, 2022 and was included in selling, general and administrative

expense in the Company’s statements of operations.

INCOME PER COMMON SHARE

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Year Ended September 30,

Income (Loss):

Net income (loss)

(Loss) Income:

Net (loss) income

Preferred stock dividends

Net income (loss) available to common stockholders

Non-controlling interest dividends

Net (loss) income available to common stockholders

Common Shares:

Basic - weighted average common shares

Effect of dilutive securities:

Stock options

Convertible preferred stock

Effect of dilutive stock options

Diluted - weighted average common stock

Income (Loss) per Common Share:

Net income (loss)

(Loss) Income per Common Share:

Net (loss) income

Preferred stock dividends

Non-controlling interest dividends

Net income (loss) attributable to common stockholders

Net income (loss)

Net (loss) income attributable to common stockholders

Net (loss) income

Preferred stock dividends

Net income (loss) available to common stockholders

The computation for the diluted number of shares excludes unvested restricted stock, unexercised stock options and unexercised warrants that are anti-dilutive.

There were 48,293 anti-dilutive shares for the fiscal years ended

September 30, 2021 and no anti-dilutive shares for the fiscal years ended September 30, 2020.

Non-controlling interest dividends

Net (loss) income available to common stockholders

The computation for the diluted number of shares excludes unexercised stock options that are anti-dilutive.

There were 48,293 anti-dilutive shares for the fiscal years ended September 30, 2022 and no anti-dilutive shares for the fiscal years ended September 30, 2021.

Potentially diluted securities as of September 30, 2022 and 2021 are as follows:

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Employee stock options (Note 11)

Non-employee stock options (Note 11)

Convertible preferred stock

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

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

Year Ended September 30,

Federal taxes at statutory rates

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State and local taxes, net of Federal benefit

The provisions (benefit) of income taxes are summarized as follows (in thousands):

The provisions of income taxes are summarized as follows (in thousands):

Year Ended September 30,

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Net deferred tax liability

In assessing the need for a valuation allowance, management must determine that there will be sufficient taxable income to allow for the realization of deferred

Based upon the historical and anticipated future income, management has determined that the deferred tax assets meet the more-likely-than-not threshold for realizability.

Accordingly, a no valuation allowance has been recorded against the Company’s deferred tax assets as of September 30, 2021.

The Company has net operating loss carryforwards for income tax purposes that expire as follows (in thousands):

The Company has federal net operating loss of $ 2,080

and state net operating loss carryforwards of approximately $ 1,043 as of September 30, 2021.

If unused, the net operating loss

carryforwards will begin to expire 2033 and 2024 for federal and state purposes, respectively.

The Company has no net operating loss

carryforwards for income tax purposes as of September 30, 2022.

The Company will recognize interest and penalties related to uncertain tax positions as a component of income tax expense.

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Income tax returns for tax years from 2017 through 2021 remain subject to examination by the taxing jurisdictions.

The net operating loss carryforwards remain subject to review until

On August 16,

2022, the Inflation Reduction Act (“IRA”) was signed into law in the United States.

Among other provisions, the IRA includes a 15% corporate minimum tax rate applied to certain large corporations and a 1% excise tax on corporate stock

repurchases made after December 31, 2022.

We do not expect the IRA to have a material impact on our consolidated financial statements.

PROFIT SHARING AND 401(K) PLANS

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BUSINESS SEGMENT INFORMATION

As discussed above in note 1, the Company operates in three

reportable segments:

(previously known as Global Logistics Services), Manufacturing and Life Sciences.

In the fourth quarter of 2021, our former Global Logistics Services segment was renamed “Logistics”;

this change was in name only and had no impact on the

Company’s previously reported historical financial position, results of operations, cash flow or segment level results.

The Company’s Chief Executive Officer regularly reviews financial information at the reporting segment level in order to make decisions

about resources to be allocated to the segments and to assess their performance.

As discussed above in Note 1, the Company operates in three reportable segments:

Logistics, Life Sciences and Manufacturing.

The Company’s Chief Executive Officer regularly reviews financial information at the reporting segment level in order to make decisions about

resources to be allocated to the segments and to assess their performance.

The following tables presents selected financial

information about the Company’s reportable segments and Corporate for the purpose of reconciling to the consolidated totals for the fiscal years ended September 30, 2022 and 2021:

For the year ended September 30, 2021 (in thousands)

For the year ended September 30, 2022

(in thousands)

Life Sciences

Manufacturing

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Identifiable assets

Capital expenditures

For the year ended September 30, 2020 (in thousands)

Capital expenditures, net of disposals

For the year ended September 30, 2021

(in thousands)

Life Sciences

Manufacturing

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Amortization of intangible assets

(loss) Income from operations

Income (loss) from operations

Interest expense

Identifiable assets

Capital expenditures

Capital expenditures, net of disposals

Goodwill and intangible assets are recorded at the Corporate level and are included in identifiable assets.

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Short-term lease cost

Total lease cost

T otal lease cost

Rent expense for the year ended September 30, 2022 and 2021 was $ 2,222

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Cash paid for amounts included in the measurement of operating lease obligations were $ 1,797 and $ 785 for the twelve months ended September 30,

2022 and 2021.

Future minimum lease payments under non-cancelable operating leases as of September 30, 2022 are as follows (in thousands) :

September 30, 2022

Fiscal Year 2023

Fiscal Year 2024

Fiscal Year 2025

Fiscal Year 2026

Fiscal Year 2027

Total undiscounted loan payments

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Total lease obligation

RUBICON INVESTMENT

(in thousands, except per share data)

On August 19, 2022, the Company acquired 1,108,000

shares of the common stock, par value $ 0.001 per share, of Rubicon, at a price per share of $ 20.00 , in a cash tender offer made pursuant to the Stock Purchase and Sale Agreement, dated July 1, 2022, between the Company and Rubicon.

Pursuant to the terms of the Purchase

Agreement, the Acquired Shares represented 44.99 % of Rubicon’s issued and outstanding shares of common stock as of August 3, 2022, as

reported in Rubicon’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2022, filed with the SEC on August 12, 2022.

The purchase price for the acquired Rubicon shares was $ 22,160 and was paid from the Company’s cash on hand, proceeds of the Bridge Loan, funds available under the Santander Credit Facility and funds available under the First

Merchant Facility.

On August 12, 2022 Rubicon announced that, in connection with the cash tender offer by the Company for up to 45 % of

Rubicon’s issued and outstanding common stock, par value $ 0.001 per share, the Rubicon Board of Directors set August 23, 2022 (the “Record Date”) as the record date for its cash distribution of $ 11.00 per share of Common Stock (the “Distribution”).

The Distribution and the Record Date was conditioned upon the consummation of the cash tender offer on August 19, 2022, and the

Distribution in the amount of $ 12,188 was paid to the Company on August 29, 2022 .

The Company revalued the investment in Rubicon’s securities on September 30, 2022 and recorded a loss of $ 19,789 within other income (loss), net of dividends on the Company’s consolidated.

Below is reconciliation for the changes to the investment in Rubicon for the year ended

September 30, 2022.

Balance as of September 30, 2021

Purchase of Rubicon investment

Fair value adjustments to Rubicon investment

The summarized financial information of Rubicon as of and for the twelve months ended September 30, 2022 is as follows:

total assets $ 5,340 , total liabilities $ 2,337 , total revenues $ 3,883 , gross profit $ 1,505 and net income

FAIR VALUE MEASUREMENTS

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Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable

This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.

Recurring Fair Value Measurements

The following table presents the Company’s liabilities that are measured at fair value on a recurring basis based on the

three-level valuation hierarchy (in thousands):

The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis based on

the three-level valuation hierarchy (in thousands):

Total fair value at

September 30, 2022

Quoted prices in active

markets for identical

assets (Level 1)

Significant other

observable inputs

unobservable inputs

Investment in Rubicon at fair value

Contingent earnout liabilities

Level 3 Liabilities

This liability relates to the estimated fair value of earnout payments to former ELFS owners for the earnout period ending

Total fair value at

September 30, 2021

The current and non-current portions of the fair value of the contingent earnout liability at September 30, 2021 are $ 1,054

and $ 2,546 , respectively.

Quoted prices in active

markets for identical

assets (Level 1)

Significant other

observable inputs

unobservable inputs

earnout liabilities

Investment in Rubicon at fair value

of September 30, 2022, the Company held approximately 45 % of the total issued and outstanding shares of Rubicon and reported its

investment under the fair value method pursuant to ASC 320.

Management determined that it was appropriate to carry its investment in Rubicon at fair value because the investment is traded on the NASDAQ stock exchange and has daily trading

activity and is a better indicator of value.

The investment in Rubicon is re-measured at the end of each quarter based on the trading price and any change in the value is reported on the income statement as a realized gain or loss in other income

Refer to Note 17 to Consolidated Financial Statements for reconciliation of changes to the investment in Rubicon for the year ended September 30, 2022.

Contingent earnout liabilities

This liability relates to the estimated fair value of earnout payments to former ELFS owners for the earnout period ending September 30, 2022.

current and non-current portions of the fair value of the contingent earnout liability at September 30, 2022 were $ 1,664 and $ 2,916 , respectively.

The current and non-current portions of the fair value of the contingent earnout liability at September 30, 2021 were $ 1,054 and $ 2,546 , respectively.

Refer to Note 2 to Consolidated Financial Statements for ELFS acquisition information.

The following table sets forth a summary of the changes in the fair value of the Company’s contingent earnout liabilities, which are measured at fair value on a recurring basis

utilizing Level 3 assumptions in their valuation (in thousands):

The following table sets forth a summary of the changes in the fair value of the

Company’s contingent earnout liabilities, which are measured at fair value on a recurring basis utilizing Level 3 assumptions in their valuation (in thousands):

September 30,

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Fair value of contingent consideration recorded in connection with business combinations

Change in fair value of contingent consideration

Balance at end of year

Company determined the fair value of the contingent earnout liability at September 30, 2022, using forecasted results through the expected earnout period.

The principal inputs to the approach include expectations of the specific business’s

revenue in fiscal years 2023 through 2025 using an appropriate discount rate.

Given the use of significant inputs that are not observable in the market, the contingent liability is classified within Level 3 of the fair value hierarchy.

were no significant changes to this methodology during the year ended September 30, 2022.

COMMITMENTS AND CONTINGENCIES

Employment Agreements

The Company has various employment agreements, including employment agreements with the previous owners of ELFS, Honor and PhosphoSolutions.

The Company has various employment agreements, including employment agreements with the previous owners of ELFS and PhosphoSolutions.

RISK AND UNCERTAINTIES

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international currency markets and governmental interference.

A number of countries where Janel maintains offices or agent relationships have currency control regulations.

A number of countries where Janel maintains agent relationships have currency control regulations.

The Company attempts to compensate for these exposures by accelerating

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We have continued to experience heightened customer credit risk as a result of the negative impact to customers’ financial condition, employment levels and consumer confidence arising

from economic disruptions related to the COVID-19 pandemic, and expect that our risk in this area will remain high as long as the disruptions persist.

from economic disruptions related to the COVID-19 pandemic, and we expect that our risk in this area will remain high as long as the disruptions persist.

Legal Proceedings

Janel is occasionally subject to claims and lawsuits which typically arise in the normal course of business.

While the outcome of these claims cannot be

predicted with certainty, management does not believe that the outcome of any of these legal matters will have a material adverse effect on the Company’s business, results of operations, financial condition or cash flows.

occasionally subject to claims and lawsuits which typically arise in the normal course of business.

While the outcome of these claims cannot be predicted with certainty, management does not believe that the outcome of any of these legal

matters will have a material adverse effect on the Company’s business, results of operations, financial condition, or cash flows.

Concentration of Customers

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accounts receivable at September 30, 2022 and 2021.

We continue to navigate operating the Company in light of the COVID-19 pandemic, which continues to have widespread

implications.

On the one hand, we have seen improvements in the broader economy, and our results for fiscal 2021 improved significantly compared to the prior fiscal year.

That said, there remains uncertainty regarding how the ongoing

nature of the COVID-19 pandemic will impact the overall economy and the Company’s results in particular.

While many countries have begun the process of vaccinating their residents against COVID-19, 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 hinder any economic recovery as well as our operations in the future.

Even after the COVID-19 pandemic subsides, the effects of the COVID-19 pandemic may last for a significant period of time thereafter and may continue to

adversely affect our business, results of operations and financial condition.

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;

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

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.

Auto Insurance

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.

proceedings include third party claims for property damage or bodily injury incurred in connection with our services.

Although there can be no assurance as to the ultimate disposition of these proceedings, we do not believe, based upon

the information available at this time, that these property damage or bodily injury claims, in the aggregate, will have a material impact on our consolidated financial statements.

Within our Logistics segment, ELFS, maintains auto

liability for commercial trucking claims of up to $ 6,000 per occurrence, and general liability with of up to $ 6,000 per occurrence.

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.

Although there can be no assurance as to the ultimate disposition of these proceedings, we do not believe, based upon the information available at this time, that these property damage or bodily injury claims, in the

aggregate, will have a material impact on our consolidated financial statements.

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

per occurrence.

SUBSEQUENT EVENTS

The Company, through its wholly owned subsidiary ELFS entered into a lease for its corporate offices

commencing in October 2021 and ending in September 2028 for a new corporate headquarters.

Future minimum lease payments under this operating lease as of November 2021 are as follows (in thousands) :

Fiscal Year End

September 30,

Total lease obligation

On November 1, 2022, the Company completed a business combination whereby it acquired all of the outstanding

stock of ImmunoBioScience Corporation (“IBS”), which we include in our Life Sciences segment.

The aggregate purchase price for the outstanding stock was $ 4,000 , subject to certain closing adjustments, as set forth in the related stock purchase agreement.

At closing, $ 3,000 was paid in cash, while $ 250 is due to the former stockholder of

IBS as a deferred acquisition payment upon integration.

Further earnout payments—in an amount not to exceed $ 750 —will be due to

the former stockholder of IBS, based on applicable sales targets achieved during the three years post-close.

IBS is a developer

and manufacturer of high-quality reagents used by research and diagnostic customers.

IBS was founded in 2007 and is headquartered in Mukilteo, Washington.

The acquisition of IBS was completed to expand our product offerings in our Life

Sciences segment .

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures