What changed in this filing

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Item 1A. Risk Factors

2023-12-08 compared with 2022-12-09 · 131 added, 128 removed, 487 unchanged (35% of the section changed)

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

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

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

In either case:

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

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

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

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

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

Janel may compete with entities whose financial resources, technical

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potential disruption of Janel’s or the target’s ongoing business;

inability to realize the projected operational and financial benefits from the acquisition or to maximize financial and strategic benefits through the incorporation of acquired personnel and clients;

inability to realize the projected operational and financial benefits from the acquisition or to maximize financial and strategic benefits through the incorporation of acquired personnel and clients, particularly in a high interest

difficulty maintaining uniform standards, controls, procedures and policies;

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

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

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

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

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

exposure to unforeseen liabilities of acquired companies.

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effect on our financial results.

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

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

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

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

employees, current or former clients or other third parties.

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

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

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

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

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

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

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

target companies, such as earnout payments or closing net asset adjustments.

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

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

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

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

the acquisition, which may impact Janel’s profitability.

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

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

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

acquisition, which may impact Janel’s profitability.

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

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

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

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

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

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

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subject to certain limits and adjustments.

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

Their ability to utilize these tax benefits in

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

The potential benefit of the NOLs and

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

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

Our subsidiaries ability to utilize

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

The potential

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

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

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

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

and, in particular, the Federal Reserve Board.

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

The low interest rate environment

remained in effect until March 2022.

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

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

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

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

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

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

agencies and, in particular, the Federal Reserve Board.

The Federal Reserve has raised interest rates with total increases of 525 basis points since March 2022.

Changes in interest rates could have an adverse impact on our business by

increasing the cost of borrowing, affecting our interest costs and our ability to make new investments on favorable terms or at all.

Additionally, interest rate fluctuations and changes in credit spreads on floating rate loans may have a

negative impact on our investments and investment opportunities and, accordingly, may have a material adverse effect on our rate of return on invested capital, our net investment income, our net asset value and the market price of our

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

Any increase in

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

Any increase in interest rates could have a negative effect on our interest costs and investments, which could have

a material adverse effect on our business and operations.

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

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

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

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

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

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

As a result, they may make decisions that are in the best interest of

their shareholders generally, but which are not necessarily in the best interest of our shareholders.

In dealings with us, the directors and officers of our affiliated businesses may make decisions that are different from the decisions we would

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

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(in thousands except per share data)

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

results of operations, cash flows and financial position.

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

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

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

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

governmental, business and

individuals’ actions in response to the pandemic;

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

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

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

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

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

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

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

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

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adverse effect on our business and operations.

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

Therefore, customers could cease purchasing products or using our

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

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

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

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

Therefore, customers could cease purchasing products or using our services at any

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

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

have a material adverse effect on our business and operations.

Significant changes or developments in U.S.

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

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

wage inflation), U.S.

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

the timing of deliveries as a means to control shipping costs, economic and political conditions , both in the United States and abroad, work stoppages, labor constraints , U.S.

and foreign laws relating

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

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

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Logistics business staffing levels to its business needs.

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

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

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

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

range of climate-related risks.

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

To the extent this rule is finalized as proposed, we

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

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

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

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

transportation costs.

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

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

have a material adverse effect on our business and operations.

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

goods from China.

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

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

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

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

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

condition, results of operations and cash flows.

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

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

further reduce our sales or profitability.

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

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

financial condition and results of operations.

Furthermore, over the past several years, new rules relating to the disclosure of a range of

climate-related risks have been proposed and/or adopted by certain authorities, including the SEC and the state of California.

We are currently assessing the applicability of these rules, but at this time we cannot predict the costs of

implementation or any potential adverse impacts resulting therefrom.

We could ultimately incur increased costs relating to the assessment and disclosure of climate-related risks as a result of these regulatory and legislative actions.

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

For example, the motor carriers we contract with are subject to increasingly restrictive laws protecting the

environment, including those relating to climate change, which could directly or indirectly have a material adverse effect on our business.

Future and existing environmental regulatory

requirements may have a material adverse effect on operations and increase operating expenses, which in turn could increase our purchased transportation costs.

Our customers, our business and operations could be materially adversely affected by

these new rules and costs.

Our business is subject to evolving corporate governance and public disclosure regulations and expectations, including with respect to environmental, social and governance

matters, that could expose us to numerous risks.

We are subject to changing rules and regulations promulgated by a number of governmental and self-regulatory organizations, including the SEC and the Financial Accounting Standards Board.

These rules and regulations continue to evolve in scope and complexity and many new requirements have been created in response to laws enacted by Congress, making compliance more difficult and uncertain.

In addition, increasingly regulators,

customers, investors, employees and other stakeholders are focusing on environmental, social and governance (“ESG”) matters and related disclosures.

These changing rules, regulations and stakeholder expectations have resulted in, and are likely

to continue to result in, increased general and administrative expenses and increased management time and attention spent complying with or meeting such regulations and expectations.

For example, developing and acting on initiatives within the

scope of ESG, and collecting, measuring and reporting ESG-related information and metrics can be costly, difficult and time-consuming and is subject to evolving reporting standards, including the SEC’s recently proposed and California’s

recently enacted climate-related reporting requirements, and similar proposals by other international regulatory bodies.

We may also communicate certain initiatives and goals, regarding environmental matters, diversity, responsible sourcing and

social investments and other ESG related matters, in our SEC filings or in other public disclosures.

These initiatives and goals within the scope of ESG could be difficult and expensive to implement, the technologies needed to implement them

may not be cost-effective and may not advance at a sufficient pace, and we could be criticized for the accuracy, adequacy or completeness of the disclosure.

Further, statements about our ESG-related initiatives and goals, and progress against

those goals, may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve, and assumptions that are subject to change in the future.

In addition, we could be criticized for

the scope or nature of such initiatives or goals, or for any revisions to these goals.

If our ESG-related data, processes and reporting are incomplete or inaccurate, or if we fail to achieve progress with respect to our goals within the scope

of ESG on a timely basis, or at all, our reputation, business, financial performance and growth could be adversely affected.

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

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

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

the Company’s business operations and profitability.

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

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

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

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

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

Acts of terrorism or armed conflict, and the

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

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

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

Acts of terrorism or armed

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

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

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

Our inability to successfully recover should we experience a catastrophic event, disaster or other business continuity problem could cause material financial loss, loss of

human capital, regulatory actions, reputational harm or legal liability.

Our operations are dependent upon our ability to protect our personnel, offices and technology infrastructure against damage from business continuity events that could have a significant

disruptive effect on our operations.

Should we or a key vendor or other third party experience a local or regional disaster or other business continuity problem, such as an earthquake, fire, flood, hurricane, or other weather event power loss,

terrorist attack, pandemic, security breach, power loss, telecommunications failure, software or hardware malfunctions or other natural or man-made disaster, our continued success will depend, in part, on the availability of our personnel, office

facilities and the proper functioning of existing, new or upgraded computer systems, telecommunications and other related systems and operations.

In events like these, while our operational size and our existing back-up systems provide us with

some degree of flexibility, we still can experience near-term operational challenges with regard to particular areas of our operations.

We could potentially lose access to key executives and personnel, sensitive data or experience material

adverse interruptions to our operations or delivery of services to our customers in a disaster recovery scenario.

For example, during the COVID-19 pandemic, there were concerns for and restrictions on our personnel (including health concerns,

quarantines, shelter-in-place orders and restrictions on travel), and increased privacy and cybersecurity risks in light of an increase in “remote work” among our workforce and our third-party service providers and vendors.

We regularly assess and take steps to improve upon our existing business continuity plans and key management succession.

However, a disaster on a significant scale or affecting certain of our

key operating areas within or across regions, or our inability to successfully recover should we experience a disaster or other business continuity problem, could materially interrupt our business operations and cause material financial loss,

loss of human capital, regulatory actions, reputational harm, damaged client relationships or legal liability.

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

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damage or bodily injury incurred in connection with our services.

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

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

liability with of up to $6,000,000 per occurrence.

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

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

liability claims or lawsuits.

We cannot be certain that our current insurance will be sufficient

to cover any adverse determinations in such liability claims or lawsuits.

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

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

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

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

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

information, such as the European Union’s General Data Protection Regulation and various regulations being adopted by states throughout the U.S., can be more stringent than laws in the United States, and they vary across jurisdictions.

addition, more jurisdictions are regulating the transfer of data across borders and domestic privacy and data protection laws are generally becoming more onerous.

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

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

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

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

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

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

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

Higher carrier prices may result in decreased adjusted gross profit.

Carriers can be expected to charge higher prices if market conditions warrant, including as a result of increased costs of fuel, labor shortages, and increased shipping times due to supply

chain disruptions.

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

Increased demand for truckload services and pending changes in regulations may reduce available capacity

and also lead to increased carrier pricing.

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

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

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

The lifting of the injunction further increases the likeli hood that owner-operators may be classified as employees within the

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

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

As a result of the

enactment of AB5, the lack of clear guidance from regulatory authorities and the courts on the application of AB5, and the possibility that other jurisdictions may enact similar laws, there is uncertainty regarding what the worker

classification regulatory landscape will look like in future years

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

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

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

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

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

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

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

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

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

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

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

procurement of such raw materials, including as a result of international conflicts, or climate change.

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

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Indco could experience prolonged periods of reduced

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

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

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

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

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

production due to unforeseen catastrophic events occurring in or around its facility in Indiana.

As a result, Indco may be unable to shift manufacturing capabilities to alternate locations, accept materials from suppliers, meet customer

shipment needs or address other severe consequences that may be encountered, and Indco may suffer damage to its reputation.

Indco’s, and, therefore, Janel’s, financial condition and results of operations may be materially adversely affected

were such events to occur.

Risk Factors Related To Ownership of Janel’s Common Stock

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

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

through the exercise of vested options granted to them.

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

Furthermore, one particular investor

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

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

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

The interests of these officers, directors and stockholders may conflict

with those of other stockholders.

A small number of Janel’s stockholders have a controlling influence over Janel.

A small number of Janel’s stockholders control the vote of approximately 6 7.3% o f the outstanding shares of Janel’s common stock as of September 30, 2023, which includes

Janel common stock such persons can acquire through the exercise of vested options granted to them.

As a result, these stockholders could control the election of Janel’s directors and, therefore, have the ability to control the affairs of

Furthermore, one particular investor in the Company has the right to appoint 50% of the members of Janel’s board of directors.

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

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

The interests of these officers, directors and stockholders may conflict with those

of other stockholders.

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

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Not applicable.

CYBERSECURITY

Not applicable.

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 1A. Risk Factors