What changed in this filing

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Item 9A. Controls and Procedures

2023-12-08 compared with 2022-12-09 · 594 added, 625 removed, 1091 unchanged (53% of the section changed)

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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 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

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.

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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.

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

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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

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.

Changes in Internal Control Over Financial Reporting

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.

There was no change in our internal control over financial reporting that occurred during the quarter ended September 30, 2023 that has materially affected, or is reasonably likely to

materially affect, our internal control over financial reporting.

OTHER INFORMATION

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Directors and Executive Officers

The executive officers and directors of the Company are as follows:

Dominique Schulte

Board Chair, President and Chief Executive Officer

Director, Chief Information Officer

The current executive officers and directors of the Company are as follows:

Board Chairman, President and Chief Executive Officer

John Eidinger

Board Vice Chairman

Gerard van Kesteren

Director, Chair of Audit Committee

Director, Senior Advisor for Mergers and Acquisitions

Director, Chair of Nominating and Corporate Governance Committee

Karen Miller Ryan

Director, Chair of Compensation Committee

Director, Chair of Nominating and Corporate Governance Committee

Director, Senior Advisor for Mergers and Acquisitions

Principal Financial Officer, Treasurer and Secretary

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.

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.

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.

Seirer has served as Board Chairman, President and Chief Executive Officer of the Company since January 1, 2023.

Seirer has been a

private investor since 2019 and he has served as an advisor to the Company since 2021.

Seirer was previously at Select Equity Group, L.P.

from 1993 to 2019.

Seirer has served as a director of Rubicon Technology, an investment of the

Seirer is well-qualified to serve as a member of the Company’s board of directors based on his extensive experience in financial services and mergers and acquisitions.

John Eidinger has served as Vice Chairman of the Board since January 1, 2023.

Since 2019, Mr.

Eidinger has advised and assisted the Company in business

Previously, Mr.

Eidinger was a private investor.

From 2011 until 2017, Mr.

Eidinger was an associate portfolio manager from Select Equity Group, L.P.

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

directors based on his extensive experience in financial services and mergers and acquisitions.

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

From 1999 until 2014, Mr.

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 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

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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.

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

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.

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

He also 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.

Melsen serves as

Chair of the Nominating and Corporate Governance Committee.

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

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executive leadership experience.

On September 28, 2022, Ms.

Miller Ryan was appointed as chair of the Compensation Committee.

Miller Ryan serves as chair of the Compensation Committee.

Graves, has served as a Director of Janel since May 31, 2023.

Graves served as Executive Vice

President and Chief Financial Officer and Treasurer of Entegris, Inc.

(“Entegris”), a company focused on specialty chemicals and advanced materials solutions, from July 2008 to May 15, 2023.

served as a director of Laird Superfood, Inc.

(a plant-based food company) since September 2018, and was a member of the board of directors of Plug Power Inc.

(an energy solutions provider) from May 2017 to June 2019.

Graves joined

the board of directors of Skywater Technologies, Inc., a semiconductor manufacturer.

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

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

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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.

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.

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.

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.

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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 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.

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, 2023 .

Board of Directors

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

During the fiscal year ended September 30, 2023, the board of directors met eleven times.

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

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

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 .

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.

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van Kesteren as the chair, Mr.

Gonzalez, Mr.

Melsen and Ms.

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:

Graves and Ms.

The Audit Committee met four times during fiscal 2023.

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

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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.

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

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 criteria.

The board of directors of the Company has

determined that Ms.

Miller Ryan and Mr.

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

Gonzalez, Graves, Melsen and van Kesteren and Ms.

Miller Ryan meet the definition of independent directors under

the Company’s criteria.

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

Miller Ryan, Mr.

Graves and Mr.

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 2023 for services rendered to the Company’s Logistics segment.

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

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.

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 2023 for services rendered to the Company’s Logistics segment.

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.

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

Graves, Melsen and van Kesteren to

be an audit committee financial expert based on their respective experiences.

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.

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

The Compensation Committee met four times during fiscal 2023.

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annually reviewing succession plans for key positions within the Company.

The Company’s Compensation Committee consists of Messrs.

Gonzalez, Melsen and van Kesteren and Ms.

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.

The Company’s Compensation Committee consists of Ms.

Miller Ryan as the chair and Messrs.

Gonzalez, Graves, Melsen and van Kesteren.

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

Miller Ryan and Messrs.

Gonzalez, Graves, Melsen and van Kesteren are independent members of the Compensation Committee.

Nominating and Corporate Governance Committee

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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

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(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.

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 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 director.

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

Seirer and Eidinger are not independent by virtue of the fact that they are Executive Officers of the Company.

The board of directors has determined that Messrs.

Gonzalez, Melsen and van Kesteren and Ms.

Gonzalez, Graves, Melsen, and van Kesteren and Ms.

Miller Ryan are independent directors.

Director Compensation

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):

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, 2023 (actual dollar

Fees Earned or

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Karen Miller Ryan

Brendan Killackey (6)

Compensation is paid on a monthly basis.

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Represents compensation paid to Mr.

van Kesteren in connection with his consulting agreement.

van Kesteren in connection with his consulting arrangement.

Represents compensation paid to Mr.

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.

Represents compensation paid to Mr.

Graves in connection with his board of directors fee since being appointed effective May 31, 2023.

Director through January 1, 2023.Directors who also serve as executive officers of the Company do not receive additional compensation for their board service.

Pursuant to the Company’s non-employee director compensation policy, for the fiscal year 2023 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.

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Employment Arrangements

No active employment arrangements.

The Company has no active employment agreements with any of its officers or directors.

Code of Business Conduct and Ethics

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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.

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 .

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Leadership Structure and Risk Oversight

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.

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 Mr.

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

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(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, Vice Chairman, our former Chief Executive Officer

and President, 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, 2022 and 2021 (actual dollar amounts):

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

during the fiscal years ended September 30, 2023 and 2022 (actual dollar amounts):

Name and Principal Position

Seirer, Chief Executive Officer and President

Dominique Schulte, Chief Executive Officer and President

Killackey, Chief Information Officer

Verde, Principal Financial Officer,

Treasurer and Secretary

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.

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.

John Eidinger, Vice Chairman

Verde, Principal Financial Officer, Treasurer and Secretary

Amounts reported under all other compensation for the fiscal year ended September 30, 2023 include $751 of 401(k) contributions paid on behalf of Mr.

Seirer for the fiscal year ended 2023.

Schulte served as Chief Executive Officer and President and as a Director through January 1, 2023.

Amounts reported under all other compensation for the fiscal year ended September 30, 2023, include

$23,319 of medical insurance premiums and $1,502 of 401(k) contributions paid for the fiscal year ended 2023.

Amounts reported under the “Bonus” column for fiscal year ended September 30, 2023 include a discretionary bonus $177,778 related to fiscal year 2022 performance.

Amounts reported under all other

compensation for fiscal year ended September 30, 2023 include $27,740 of medical insurance premiums and $7,754 of 401(k) contributions paid on behalf of Mr.

Verde for the fiscal year ended 2023.

Long-Term Incentive Plan Awards

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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

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 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, 2023 and 2022 were approximately

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The administrative expense charged to operations for the fiscal years ended September 30, 2023 and 2022 aggregated approximately $65,600 and $64,000, 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 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

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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, 2022.

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, 2023.

Name and address of Beneficial Owner (1)

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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

van Kesteren Foundation (4)

The address of each person and entity included in this table is 80 Eighth Avenue, New York, NY 10011, except for the van Kesteren Foundation which is Seestrasse 39, 8846 Willerzell,

Switzerland .

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

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Includes 1,666 shares of common stock issuable upon the exercise of stock options that may be exercised within 60 days of September 30, 2023.

van Kesteren, a director of the Company, and his wife are members of the board of directors of the van Kesteren Foundation.

van Kesteren disclaims beneficial ownership of the shares of the

Company’s common stock held by the van Kesteren Foundation.

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.

The following table sets forth information with respect to the beneficial ownership of the shares of common stock as of September 30, 2023 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%.

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Dominique Schulte (1)

John Eidinger

Gonzalez, II (2)

Gerard van Kesteren (2)

Brendan Killackey

Karen Miller Ryan (3)

All directors and executive officers as a group

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

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Includes 833 shares of common stock issuable upon the exercise of stock options that may be exercised within 60 days of September 30, 2023.

Does not include shares beneficially owned by Dominique Schulte, Mr.

Seirer’s spouse, which are referenced above and for which Mr.

Seirer disclaims beneficial ownership.

Equity Compensation Plan Information

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outstanding options

warrants and rights

Weighted-average

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outstanding options

warrants and rights

Number of securities

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compensation plans

2013 Stock Option Plan (1)

2013 Non-Qualified Stock Option Plan (1)

Amended and Restated 2017 Equity Incentive Plan (2)

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(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.

We are not aware of any transactions since October 1, 2022 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

(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.

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

2023 and 2022, and fees billed for other services provided by Prager Metis during those periods.

Year End September 30,

Audit-Related Fees

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 include fees paid and accrued for professional services rendered by Prager Metis CPA’s for 2023 and 2022, fees for the audits of our financial statements included in our Annual

Report on Form 10-K for 2023 and 2022, and reviews of the financial statements included in our Quarterly Reports on Form 10-Q.

Audit fees also include comfort letter fees for 2022.

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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.

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

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(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)

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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)

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 (incorporated by reference to Exhibit 4.1 to the Company’s Annual Report on Form 10-K for fiscal year ended December 31, 2022 filed December 9,

Janel World Trade, Ltd.

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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)

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.

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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

payable to First Merchants 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 Merchants Bank (incorporated by reference to Exhibit 10.4 of the Company’s Current Report on Form 8-K

filed on September 6, 2019)

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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)

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

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(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)

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)

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

, and First Merchants Bank (incorporated by reference to Exhibit 10.23 of the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2022)

Third Amendment to 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 January 30, 2023 ( incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2022)

Amended and Restated Credit Agreement, by and among Indco, Inc., Antibodies Incorporated, Aves Labs, Inc., Phosphosolutions

LLC, Immunochemistry Technologies LLC, ECM Biosciences, LLC, Stephen Hall PhD LTD, Immunobioscience Corp., (collectively as borrowers), and each individually, a “Borrower”), and First Merchants Bank dated April 25, 2023 (incorporated by

reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2023).

Fourth Amendment to 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, and ELFS Brokerage, LLC (collectively as borrowers) and Janel Corporation and Expedited Logistics and Freight Services, LLC, as loan party obligors dated April 25, 2023 (incorporated by reference to Exhibit 10.2 of

the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2023).

Fifth Amendment to 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, and ELFS Brokerage, LLC (collectively as borrowers) and Janel Corporation and Expedited Logistics and Freight Services, LLC, as loan party obligors dated August 22, 2023 ( 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, 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)

Interactive data files providing financial information from the Registrant’s Annual Report on Form 10-K for the fiscal year ended September 30, 2023 in Inline XBRL (eXtensible

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

(i) Consolidated Balance Sheets as of September 30, 2023 and September 30, 2022, (ii) Consolidated Statements of Operations for the years ended September 30, 2023 and

2022, (iii) Consolidated Statements of Stockholders’ Equity for the years ended September 30, 2023 and 2022, (iv) Consolidated Statements of Cash Flows for the years ended September 30, 2023 and 2022, 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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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.

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

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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

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.

JANEL CORPORATION

December 8, 2023

/s/ Dominique Schulte

Dominique Schulte

/s/ Darren C.

Director, Board Chair, President and Chief Executive Officer

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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

/s/ Dominique Schulte

Director, Board Chair, President and Chief Executive Officer

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.

/s/ Darren C.

Director, Board Chairman, President and Chief Executive Officer

December 8, 2023

Dominique Schulte

/s/ John Eidinger

Director, Board Vice Chairman

December 8, 2023

John Eidinger

/s/ Vincent A.

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December 8, 2023

/s/Brendan J.

December 9, 2022

/s/ Gregory J.

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Gerard van Kesteren

/s/ Gregory B.

December 8, 2023

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

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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).

In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of September 30, 2022 and 2021, and the results of its

operations, stockholders’ equity and its cash flows for the years ended September 30, 2022 and 2021, in conformity with accounting principles generally accepted in the United States of America.

We have audited the accompanying consolidated balance sheets of Janel Corporation and Subsidiaries (the “Company”) as of September 30, 2023 and 2022, and the related consolidated statements of operations, changes in

stockholders’ equity and cash flows for the years ended September 30, 2023 and 2022, and the related notes to the consolidated financial statements (collectively, the consolidated financial statements).

In our opinion, the consolidated

financial statements present fairly, in all material respects, the consolidated financial position of the Company as of September 30, 2023 and 2022, and the results of its operations, stockholders’ equity and its cash flows for the years

ended September 30, 2023 and 2022, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

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

federal 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 the U.S.

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.

Those standards require that we plan and perform the audits to obtain

reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

The company is not required to have, nor were we engaged to perform, an audit of its internal control

over financial reporting.

As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control

over financial reporting.

Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are

free of material misstatement, whether due to error or fraud.

The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits, we are required to obtain an

understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

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.

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

Our audits also included

evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audit provides a reasonable basis for our

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.

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

Our audits also included evaluating the accounting principles used and significant estimates made by

management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audit provides a reasonable basis for our opinion.

Critical Audit Matters

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.

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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Subordinated promissory notes- related party

Long-term portion of deferred acquisition payments

Mandatorily redeemable non-controlling interest

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

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

and September 30, 2021 , respectively

Series C 30,000 shares authorized and 11,368 shares issued and outstanding at September 30, 2023 and September 30, 2022 , liquidation value of $ 7,713 and $ 7,429 at

September 30, 2023 and September 30, 2022 , respectively

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

issued and 1,186,354 outstanding as of September 30, 2022 , and 962,207 issued and 942,207 outstanding as of September 30, 2021 ,

issued, and 1,186,354 outstanding as of September 30, 2023 and September 30, 2022 , respectively

Paid-in capital

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Year Ended September 30,

Forwarding expenses and cost of revenue

Forwarding expenses and cost of revenues

Cost and Expenses:

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Interest expense

Gain on Paycheck Protection Program loan forgiveness

Fair value adjustments to Rubicon investment (net of dividends)

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Income Before Income Taxes

Income tax expense

Net (Loss) Income

Income tax benefit (expense)

Net Income (Loss)

Preferred stock dividends

Non-controlling interest dividends

Net (Loss) Income Available to Common Stockholders

Net (loss) Income per share

Net Income (Loss) Available to Common Stockholders

Net income (loss) per share:

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

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Dividends to preferred stockholders

Preferred C shares purchased

Preferred C shares sold

Preferred B shares converted

Restricted stock issued

Stock based compensation

Stock option exercise

Balance - September 30, 2021

Dividends to preferred stockholders

Dividends to non-controlling interest

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Balance - September 30, 2022

Dividends to preferred stockholders

Stock based compensation

Balance - September 30, 2023

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

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Cash Flows from Operating Activities:

Net (loss) income

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

Provision for (recovery of) uncollectible accounts

Net income (loss)

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

Provision for uncollectible accounts, net of recoveries

Deferred income provision

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Change in fair value of earnout

Change in fair value of mandatorily redeemable non-controlling interest

Gain on Paycheck Protection Program loan forgiveness

Change in fair value of mandatorily redeemable noncontrolling interest

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

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Other liabilities

Net cash provided by (used in) operating activities

Net cash provided by operating activities

Cash Flows from Investing Activities:

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Investment in Rubicon (net of dividend)

Earnout payment

Net cash used in investing activities

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Dividends paid to minority shareholders

Borrowings (repayments) of term loan

Repayments borrowings of term loan

Proceeds from stock option exercise

Line of credit, (payments) proceeds, net

Line of credit (payments)

Repurchase of Series C Preferred Stock

Restricted Stock Issued

Proceeds from sale of Series C Preferred Stock

Proceeds from Private Placement

Repayment of subordinated promissory note-related party

Net cash (used in) provided by financing activities

Net increase in cash

Net cash (used in) financing activities

Net (decrease) increase in cash

Cash at beginning of the period

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Non-cash investing activities:

Contingent earn-out acquisition

Subordinated Promissory notes of ELFS

Subordinated Promissory notes of ICT

Due to former ECM owner

Contingent earnout acquisition

Due to former owner

Non-cash financing activities:

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Business description

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:

Corporation (“Janel” or the “Company”) is a holding company with subsidiaries in three business segments:

Logistics, Life

Sciences and Manufacturing.

The Company strives to create shareholder value primarily through three strategic priorities:

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

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

attracting and retaining exceptional talent.

allocating Janel’s capital at

high risk-adjusted rates of return;

and attracting and retaining exceptional talent.

Management at

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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.

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.

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

The Logistics segment is a non-asset based, full-service

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

logistics services.

In addition to these revenue streams, the Company earns accessorial revenue in connection with its 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.

Life Sciences

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

The Company’s Life Sciences segment manufactures and distributes

high-quality monoclonal and polyclonal antibodies, diagnostic reagents and other immunoreagents for biomedical research and provides antibody manufacturing for academic and industry research scientists.

Our Life Sciences business also

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.

The Company’s Life Sciences segment manufactures and

distributes high-quality monoclonal and polyclonal antibodies, diagnostic reagents and other immunoreagents for biomedical research and provides antibody manufacturing for academic and industry research scientists.

Our Life Sciences segment

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

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

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

The acquisition of Stephen Hall,

PhD Ltd., was completed to expand our product offering in our Life Sciences segment.

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

The acquisition of

ImmunoBioScience Corporation was completed to expand our product offering in our Life Sciences segment.

On August 15, 2022, the Company completed a business combination whereby it acquired all the membership interests of ECM Biosciences LLC, 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.

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 apparatuses for specific applications within various industries.

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

production orders.

Investment in Marketable Securities

On August 19, 2022, the Company acquired 1,108,000 shares of the common stock, par value $ 0.001 per share, of Rubicon Technology, Inc.

(“Rubicon”), at a price per share of $ 20.00 ,

in a cash tender offer made pursuant to the Stock Purchase and Sale Agreement, dated July 1, 2022, between the Company and Rubicon (the “Rubicon Purchase Agreement”).

Pursuant to the terms of the Rubicon Purchase Agreement, the

acquired shares represent 45.0 % of Rubicon’s issued and outstanding shares of common stock as of August 3, 2022, as

reported in Rubicon’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2022, filed with the SEC on August 12, 2022.

The Company owned approximately 46.6 % of Rubicon’s issued and outstanding shares of common stock as of September 30, 2023.

Rubicon is an advanced materials provider specializing in monocrystalline sapphire for applications in optical and industrial systems.The purpose of our investment

in Rubicon is for Janel to acquire a significant ownership interest in Rubicon, together with representation on Rubicon’s Board, in an attempt to (i) restructure the Rubicon business to achieve profitability and (ii) assist

Rubicon in utilizing its net operating loss carry-forward assets.

Basis of consolidation

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from the customer.

Recoveries of previously written off accounts receivables are charged back to the allowance for doubtful accounts.

The allowance for doubtful accounts as of September 30, 2023 and September 30, 2022 was $ 1,255 and $ 1,547 , respectively.

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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

used as of each July 1 of prior reporting periods without the use of hindsight.

As such, the change in annual impairment test date has been prospectively applied beginning July 1, 2021.

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

The change in the impairment test date lessens 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 did not represent a material change to our method of applying an accounting principle, and therefore does not delay, accelerate or avoid an impairment charge.

The fair value of our reporting units were in excess of carrying value and goodwill was not deemed to be impaired as of September 30, 2023 and 2022.

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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.

See Notes 16 and 17 for further information about the

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

Business segment information

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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 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.

These notes are included in security deposits and other long-term assets.

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 9.8 % as of each of September 30, 2023 and 2022.

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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Recent accounting pronouncements

Recently issued accounting pronouncements not yet adopted

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

In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting

Standards Update (“ASU”) 2020 - 04, Reference Rate Reform (Topic 848) .

In December 2022, the FASB issued ASU 2022 - 06 to temporarily ease the potential burden in accounting for reference rate reform.

The standards provide optional expedients and exceptions for applying accounting

principles generally accepted in the United States to existing contracts, hedging relationships, and other transactions affected by reference rate reform.

The standards apply only to contracts and hedging relationships that reference the

London Interbank Offered Rate (“LIBOR”) or another reference rate to be discontinued because of reference rate reform.

The standards were effective upon issuance and can generally be applied through December 31, 2024.

While there has been no material effect to our financial condition, results of operations, or cash flows from

reference rate reform as of September 30, 2023, we continue to monitor our contracts and

transactions for potential application of these ASUs.

In January 2017, the FASB issued ASU 2017 - 04, Intangibles - Goodwill and Other:

Simplifying the Test for Goodwill Impairment , to simplify the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test.

This standard will be effective for us in the first quarter of fiscal

Early adoption of the new standard is permitted; however, we have not elected to early adopt the standard.

The new standard is required to be applied 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.

In June 2016, the FASB issued ASU 2016-13, Financial

Instruments - Credit Losses (Topic 326) , which replaces the incurred loss methodology previously employed to measure credit losses for most financial assets and requires the use of a forward-looking expected loss model.

accounting delays the recognition of credit losses until it is probable a loss has been incurred, while the update will require financial assets to be measured at amortized costs less a reserve and equal to the net amount expected to be

This standard will be effective for us in the first quarter of fiscal 2023.

Early adoption of the new standard is permitted; however, we have not elected to early adopt the standard.

The new standard is required to be applied

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.

2022 Acquisitions

This standard became effective for us in the first quarter of fiscal year 2023.

new standard is required to be applied using a cumulative-effect transition method.

The adoption of this standard did not have a material effect on our consolidated financial statements and related disclosures.

In June 2016, the FASB issued ASU 2016 - 13, Financial Instruments - Credit Losses (Topic 326) , which replaces the incurred loss methodology previously employed to measure credit losses for most financial assets and requires the use of a

forward-looking expected loss model.

Current accounting delays the recognition of credit losses until it is probable a loss has been incurred, while the update will require financial assets to be measured at amortized costs less a

reserve and equal to the net amount expected to be collected.

This standard became effective for us in the first quarter of fiscal 2023.

standard is required to be applied using a cumulative-effect transition method.

The adoption of this standard did not have a material effect on our consolidated financial statements and related disclosures.

Fiscal 2023 Acquisitions

Life Sciences

On November 1, 2022, the Company completed a business combination whereby it acquired all of the outstanding stock of

ImmunoBioScience Corporation (“IBS”), for an aggregate purchase price of $ 3,755 , net of $ 153 cash received.

At closing, $ 3,000

was paid in cash, $ 250 was due to the former stockholder of IBS as a deferred acquisition payment upon integration, $ 300 was recorded as a preliminary earnout consideration (not to exceed $ 750 ) and $ 205 was recorded as a preliminary working capital

The acquisition was funded with cash provided by normal operations, and the results of operations of IBS are included in Janel’s condensed consolidated results of operations since the date of the acquisition.

In connection

with the combination, the Company recorded an aggregate of $ 1,468 in goodwill and $ 1,680 in other identifiable intangibles.

Supplemental pro forma information has not been provided as the acquisition did not have a significant impact on Janel’s

condensed consolidated results of operations, individually or in aggregate.

IBS is a developer and manufacturer of high-quality reagents used by research and diagnostic customers.

IBS was founded in 2007 and is headquartered in Mukilteo,

The acquisition of IBS was completed to expand our product offerings in our Life Sciences segment.

On March 2, 2023, the Company completed a business combination whereby it acquired all of the outstanding stock of Stephen

Hall PhD, Ltd.

(“SH”) for an aggregate purchase price of $ 600 .

At closing, $ 500 was paid in cash and $ 100 was due to the former

stockholder of SH as a deferred acquisition payment upon integration.

The acquisition was funded with cash provided by normal operations, and the results of operations of SH are included in Janel’s condensed consolidated results of

operations since the date of the acquisition.

In connection with the combination, the Company recorded an aggregate of $ 181 in

goodwill and $ 202 in other identifiable intangibles.

Supplemental pro forma information has not been provided as the

acquisition did not have a significant impact on Janel’s condensed consolidated results of operations, individually or in aggregate.

SH is a developer and manufacturer of antibodies and cell culture media for research and diagnostic uses.

SH was founded in 2011 and is headquartered in Lafayette, Indiana.

The acquisition of SH was completed to expand our product offerings in our Life Sciences segment.

On May 22, 2023, the Company acquired all the rights, title and interests to a royalty agreement for certain antibody

products for a purchase price of $ 500 .

The Company recorded this acquisition as a royalty asset, which is included in security

deposits and other long-term assets in the accompanying condensed consolidated balance sheet and will be amortized over the estimated life of ten years .

Fiscal 2022 Acquisitions

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.

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.

In 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

(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.

The Company is headquartered in Houston, Texas and also has other offices in Texas, Louisiana, Colorado and Oklahoma and has dedicated agents, who work in

specific areas to assist in logistics, in the following locations:

Texas, Louisiana, North Dakota and Oklahoma.

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’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

Prepaid expenses and other current assets

Property & equipment, net

Security deposits and other long-term assets

Operating lease right of use asset

Intangible assets

Accounts payable

Current portion of operating lease liabilities

Accrued expenses and other current liabilities

Long-term operating lease liabilities

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 assuming the acquisition of ELFS was made on October 1, 2020 (in thousands).

Forwarding expense

Selling, general and administrative expenses

Income from operations

The foregoing unaudited pro forma results are for informational purposes only and are not necessarily indicative

of the actual results of operations that might have occurred had the acquisition occurred on October 1, 2020, nor are they necessarily indicative of future results.

The pro forma financial information includes the impact of purchase

accounting and other nonrecurring items directly attributable to the acquisition, which include:

Amortization expense of acquired intangibles

Adjustments to interest expense to remove historical ELFS interest costs and reflect Janel’s current debt profile

The related tax impact of the above referenced adjustments

The pro forma

results do not include any cost savings or operational synergies that may be generated or realized due to the acquisition of ELFS.

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 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.

The results of operations of the acquired businesses are

included in Janel’s consolidated results of operations since the date of the acquisition and are included in our Life Sciences segment.

The acquisition of ECM was completed to expand our product offerings in our Life Sciences segment.

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.

Life Sciences

On December 4, 2020, the Company completed a business combination whereby it acquired all of the membership interests of ImmunoChemistry Technologies, LLC (“ICT”) for an aggregate

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

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.

Investment in Marketable Securities - Rubicon

On August 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 Agreement”).

Pursuant to the terms of the Purchase Agreement, the Acquired Shares represented 45.0 % of Rubicon’s issued and outstanding shares of common stock as of August 3, 2022, as reported in Rubicon’s Quarterly Report on Form 10-Q for the quarterly period

ended June 30, 2022, filed with the SEC on August 12, 2022.

Due to share repurchases effectuated by Rubicon, the Company owned approximately 46.6 %

of Rubicon’s issued and outstanding shares of common stock as of September 30, 2023.

Rubicon is an advanced materials provider specializing in monocrystalline sapphire for applications in optical and industrial

PROPERTY AND EQUIPMENT

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Leasehold Improvements

Less Accumulated Depreciation

Less Accumulated Amortization

Depreciation expense for the fiscal year ended September 30, 2023 and 2022 was $ 508 and $ 484 , respectively.

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Less – reserve for inventory valuation

Inventory net

INTANGIBLE ASSETS

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Trademarks/names

Accumulated Depreciation

Accumulated Amortization

The composition of the intangible assets balance at September 30, 2023 and 2022 is as follows (in thousands) :

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Manufacturing

Accumulated Depreciation

Accumulated Amoritzation

Amortization expense of intangible assets for the year ended September 30, 2023 and 2022 was $ 2,098 and $ 1,976 , respectively.

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Santander Bank Facility

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:

The wholly-owned

subsidiaries that comprise the Company’s Logistics segment (collectively, the “Janel Group Borrowers”), with the Company as a guarantor, have a Loan and Security Agreement (as amended, the “Santander Loan Agreement”) with Santander with

respect to a revolving line of credit facility (the “Santander Facility”).

The Santander Loan Agreement was amended on March 31, 2022 to provide for, among other changes, the following:

(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.

Agreement); (ii) the LIBOR basis on which interest under the Santander Loan Agreement was calculated under certain circumstances 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 that 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 a 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 Janel Group 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 (the “Rubicon Transaction”) by the Company of up to 45 %

of the outstanding shares of Rubicon Technology, Inc.

(“Rubicon”) .

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.

The Second 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 , Inc.

(the Janel Group”) to the Company.

On January 30, 2023, the Santander Loan Agreement was further amended by the Third

Amendment to the Amended and Restated Loan and Security Agreement (the “Third Santander Amendment”).

As amended by the terms of the Third Santander Amendment, the percentage of the Borrowers’ eligible accounts receivable used to

calculate the borrowing base under the Loan Agreement was increased from 85 % to 90 % for Domestic Insured Accounts (as defined in the Amendment), subject to adjustments set forth in the Loan Agreement.

25, 2023, in connection with an amendment to the Credit Agreement entered into with First Merchants Bank (“First Merchant”) as described further below, we entered into the Fourth Amendment to the Amended and Restated Loan and Security

Agreement (the “Fourth Santander Amendment”).

The Fourth Santander Amendment (i) included modifications to address the amendments made to the First Merchants Credit Facilities (as defined below) and the consolidation of the debt

thereunder and (ii) terminated the subordination agreement relating to the Company’s guarantee of the First Merchants Credit Facilities.

22, 2023, we entered into the Fifth Amendment to the Amended and Restated Loan and Security Agreement (the “Fifth Santander Amendment”).

The Fifth Santander Amendment permitted certain unsecured guaranties by the Company in the

ordinary course of business guarantying obligations of subsidiaries in an aggregate amount not to exceed $ 4,000 and related

modifications to certain negative covenants.

The Santander Loan Agreement matures on September 21, 2026 .

Interest accrues on the Santander Facility at an annual rate equal to the one-month SOFR plus 2.75 %.

The Janel Group Borrowers’ obligations

under the Santander Facility are secured by all of the assets of the Janel Group Borrowers, while the Santander Loan Agreement contains customary terms and covenants.

As a result of its terms, the Santander Facility is classified as a

current liability on the consolidated balance sheet.

At September 30, 2023, outstanding borrowings under the Santander Facility were $ 18,759 , representing 53.6 % of the $ 35,000

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First Merchants Bank Credit Facility

On March 21, 2016, Indco entered into a Credit Agreement (the “First Merchants Credit Agreement”) with First Merchants Bank (“First Merchant”), as amended .

On February 29, 2016, Indco entered into a Credit Agreement (as amended, the “Prior First Merchants Credit Agreement”) with First Merchants, which was subsequently amended on August 30, 2019 and July 1, 2020.

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

outstanding borrowings under the revolving loan, $ 5,420 of borrowings under the term loan, and $ 631 of borrowing under the mortgage loan with interest accruing on the term loan and mortgage loan at an effective interest rate of 6.63 % and 4.19 %, respectively.

3 to the Prior First Merchants Credit Agreement, modifying the terms of Indco’s credit

Under the revised terms, the credit facilities consisted 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 “Prior First Merchants Facility” ).

Interest accrued 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 was less than 2 :1), or 3.5 % (if Indco’s total funded debt to EBITDA ratio was greater than or equal to 2 :1).

Interest accrued on the revolving loan at an annual rate equal to one-month adjusted term SOFR plus 2.75 %.

Interest accrued

on the mortgage loan at an annual rate of 4.19 %.

Indco’s obligations under the Prior First Merchants Credit Facility were secured

by all of Indco’s real property and other assets, and are guaranteed by Janel, and Janel’s guarantee of Indco’s obligations was secured by a pledge of Janel’s Indco shares.

On April 25, 2023, Indco and certain other Subsidiaries of the Company that are part of the Life Science and Manufacturing segments (together with Indco, the “Borrowers” and each, a “Borrower”), entered into a

Credit Agreement (the “Credit Agreement”) with First Merchants.

The Credit Agreement constitutes an amendment and restatement of the Prior First Merchants Credit Agreement.

The credit facilities provided under the Credit Agreement (the

“First Merchants Credit Facilities”) consist of a $ 3,000 revolving loan (limited to the borrowing base and reserves), a $ 5,000 acquisition loan, a $ 6,905

Term A loan and a $ 620 Term B loan as a continuation of the mortgage loan under the Prior First Merchants Credit Agreement.

Interest accrues on the outstanding revolving loan, Term A loan and acquisition loan at an annual rate equal to one-month

adjusted term SOFR plus either (i) 2.75 % (if the Borrowers’ total funded debt to EBITDA ratio is less or equal to 1.75 :1.00) or (ii) 3.50 %

(if the Borrowers’ total funded debt to EBITDA ratio is greater than to 1.75 :1.00).

Interest accrues on the Term B loan

at an annual rate of 4.19 %.

The Borrowers’ obligations under the First Merchants Credit Facilities are secured by all of the

Borrowers’ real property and other assets, and are guaranteed by the Company, and the Company’s guarantee of the Borrowers’ obligations is secured by a pledge of the Company’s equity interests in certain of the Borrowers.

The revolving

loan portion will expire on August 1, 2027 , the Term A loan portion will mature on April 25, 2033 , the Term B loan portion will mature on July 1, 2025

and the acquisition loan will permit multiple draws until October 25, 2024, at which point the outstanding principal amount will amortize, with all remaining amounts due at maturity of the acquisition loan on April 25, 2029 ;

each of the foregoing maturities, subject to earlier termination as provided in the Credit Agreement and unless renewed or

of September 30, 2023, there were $ 500 of outstanding borrowings under the acquisition loan, $ 450 of outstanding borrowings under the revolving loan, $ 6,235 of outstanding borrowings under the Term A loan and $ 610 of

outstanding borrowings under the Term B loan, with interest accruing on the acquisition loan and revolving loan at an effective interest rate of 8.18 % and on the Term A loan and Term B loan at an effective interest rate of 8.18 %

and 4.19 %, respectively.

As of September 30, 2022, there were no

outstanding borrowings under the revolving loan, $ 2,713 of borrowings

under the term loan, and $ 655 of borrowing under the mortgage loan with interest accruing on the term loan and mortgage loan at

an effective interest rate of 2.83 % and 4.19 %, respectively.

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).

outstanding borrowings under the revolving loan under the Prior First Merchants Credit Agreement , $ 5,420 of borrowings under the term loan under

the Prior First Merchants Credit Agreement, and $ 631 of borrowings under the mortgage loan under the Prior First Merchants Credit Agreement with interest accruing on such term loan and mortgage loan at an effective interest rate of 6.63 % and 4.19 %, respectively.

Indco was in compliance with the financial covenants define d in the First Merchants Credit Agreement at September 30, 2023 and September 30, 2022.

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

September 30,

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Long-term Portion

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 %.

The credit facilities are

collateralized by all of Indco’s assets and guaranteed by Janel.

These obligations mature as follows (in thousands):

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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, 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 Incorporated (“Antibodies”), a wholly-owned subsidiary of the Company, entered into a Business Loan Agreement (as amended, the “First Northern Loan Agreement”) with First Northern Bank of Dixon (“First Northern”) on June 21, 2018.

The First Northern Loan Agreement provided for a $ 2,235 term loan (the “First Northern Term Loan”) and a $ 750

revolving credit facility (the “First Northern Revolving Loan”).

Antibodies also entered into two separate

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a $ 125 term loan in connection with a potential expansion of solar generation

capacity on the Antibodies property.

(“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 .

There were no outstanding borrowings

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 .

capacity on the Antibodies property (the “First Northern Solar Loan”) on November 18, 2019 and a $ 60 term loan in connection with a potential expansion of generator capacity on the Antibodies property (the

“First Northern Generator Loan”) on June 19, 2020.

On April 25, 2023, each of the First Northern Term Loan, the

First Northern Revolving Loan, the First Northern Solar Loan and the First Northern Generator Loan was paid in full with the proceeds provided by the First Merchants Credit Facilities and the First Merchants Loan Agreement.

In connection

with the repayment, each business loan agreement governing such First Northern loans was terminated and all liens granted to First Northern in connection with the First Northern Loan Agreement and such business loan agreements on any

property of Antibodies were released.

Antibodies has no further obligations owing to First Northern in connection with the First Northern Loan Agreement and such business loan agreements.

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 $ 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,

(in thousands)

Less Current Portion

Long-term Portion

Long-term debt is due in monthly installments of $ 12 plus monthly interest, at 4.18 % per annum.

The note is collateralized by real property owned by Antibodies and guaranteed by Janel.

These obligations mature as follows (in thousands):

Fiscal Year 2023

Fiscal Year 2024

Fiscal Year 2025

Fiscal Year 2026

Fiscal Year 2027

The Company was in compliance with the financial covenants defined in the First Northern Loan Agreement at September 30, 2022 and September 30, 2021.

and $ 57 is included in 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 current portion of long-term debt, with interest accruing at an effective interest rate of 4.43 %.

As of September 30, 2022, there were no outstanding borrowings under the First Northern Revolving Loan.

The Company was in compliance with the financial covenants defined in the First Northern Loan Agreement at April 25, 2023 .

SUBORDINATED PROMISSORY NOTES – RELATED PARTY

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.

Labs, Inc., a wholly-owned subsidiary of the Company, is the obligor on a fixed 0.5 % subordinated promissory note in the

amount of $ 1,850 (the “ICT Subordinated Promissory Note”) issued to the former owner of ImmunoChemistry Technologies, LLC

(“ICT”), in connection with a business combination whereby the Company acquired all of the membership interests of ICT.

The ICT Subordinated Promissory Note is payable in sixteen scheduled quarterly installments of

principal and interest beginning March 4, 2021, matures on December 4, 2024 , and may be prepaid, in whole or in part,

without premium or penalty.

The ICT Subordinated Promissory Note is guaranteed by the Company and is secured by the Company’s membership interests in ICT.

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As of September 30, 2023, the amount outstanding under the ICT Subordinated Promissory Note was $ 312 , of which $ 288 is

included in the current portion of subordinated promissory notes and $ 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

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.

included in the current portion of subordinated promissory notes and $ 24 is included in the long-term portion of subordinated

promissory notes.

As of September 30, 2022, the amount outstanding under 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.

Janel Group, Inc.

(“Janel Group”), a wholly-owned subsidiary of the Company, is the obligor on four fixed 4 % subordinated

promissory notes totaling $ 6,000 in the aggregate (together, the “ELFS Subordinated Promissory Notes”), payable to certain

former shareholders of Expedited Logistics and Freight Services, LLC (“ELFS”), in connection with the Company’s business combination whereby it acquired all the membership interest of ELFS and its related subsidiaries.

All of the ELFS

Subordinated Promissory Notes are guaranteed by the Company and are subordinate to and junior in right of payment for principal, interest, premiums and other amounts payable to the Santander Bank Facility and the First Merchants

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.

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.

As of September 30, 2023, the amount outstanding under the ELFS Subordinated Promissory Notes was $ 5,100 , of which $ 1,700 is

included in the current portion of subordinated promissory notes and $ 3,400 was included in the long-term portion of

subordinated promissory notes.

As of September 30, 2022, the amount outstanding under the ELFS Subordinated Promissory Notes was $ 5,100 and was included in the long-term portion of subordinated promissory notes.

September 30,

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These obligations mature as follows (in thousands):

Fiscal Year 2023

Fiscal Year 2024

Fiscal Year 2025

Fiscal Year 2026

SBA PAYCHECK PROTECTION PROGRAM LOANS

On April 19, 2020, the Company received a loan (the “Company PPP Loan”) in the aggregate amount of $ 2,726 from Santander, pursuant to the Paycheck Protection Program (the “PPP”) offered by the Small Business Administration (“SBA”) under the

Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), Section 7(a)(36) of the Small Business Act, which was enacted March 27, 2020, as amended by the Paycheck Protection Program Flexibility Act of 2020 (“Flexibility Act”).

The Company PPP Loan matures on April 19, 2022 and bears interest at a rate of 1.00 % per annum.

Under the original terms, all principal and interest payments are deferred for six months from the date of the note.

On July 23, 2020, the Company assumed a PPP Loan in connection with an

acquisition in the amount of $ 135 (the “Acquisition PPP Loan”).

The terms of the Acquisition PPP Loan were the same as the terms

of the Company PPP Loan.

In February 2021, the Company was informed that the Acquisition PPP Loan had been forgiven by the SBA.

In February 2021, the Company applied for forgiveness of the Company PPP Loan in accordance with the terms of the CARES Act and o n July 22, 2021, the Company received notification from Santander that the SBA had granted full forgiveness of the Company’s PPP Loan on July 20, 2021 in the amount of $ 2,726 and interest payable in the amount of $ 34 .

In accounting for the forgiveness of the Acquisition PPP Loan and Company PPP Loan, the Company is guided by ASC 470 Debt, and ASC 450-30

Gain contingency.

Accordingly, the Company derecognized both the Acquisition PPP Loan and Company PPP Loan and recorded $ 2,895

as a Gain on Paycheck Protection Program loan forgiveness.

STOCKHOLDERS’ EQUITY

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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.

As of September 30, 2023 and 2022, the Company had no shares of Series B Stock outstanding.

Series C Cumulative Preferred Stock

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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 .

shares of the Company’s Common Stock, par value $ 0.001 per share 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.

Such shares issued on March 31, 2022 and September 30, 2021, were sold in private placements in reliance upon the

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subsidiaries.

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.

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

administrative expense in the Company’s statements of operations.

Total stock-based compensation for the fiscal year ended September 30, 2023 and 2022 amounted to $ 231 and $ 832 , respectively, and was included in selling,

general and administrative expense in the Company’s statements of operations.

Stock Options

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Expected term - We estimate the expected term of our options on the average of the vesting date and term of the option.

Expected volatility - We estimate expected volatility using daily historical trading data of a peer group.

Expected volatility - We estimate expected volatility using daily historical trading data of our common stock.

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.

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100.3 % - 110.3

100.3 % - 105.4

Dividend yield

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Term (in years)

Intrinsic Value

(in thousands)

Outstanding balance September 30, 2021

Outstanding balance at September 30, 2022

Outstanding balance at September 30, 2023

Exercisable at September 30, 2023

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Liability classified share-based awards

During the fiscal year ended September 30, 2022, 7,018

options were granted and 10,372 options were exercised with respect to Indco’s common stock.

The Company uses the Black-Scholes option pricing model

to estimate the fair value of Indco’s share-based awards.

During the fiscal year ended September 30, 2023, there were no

options granted and no options were exercised with respect to Indco’s common stock.

The Company uses the

Black-Scholes option pricing model to estimate the fair value of Indco’s share-based awards.

In applying this model, the Company used the following assumptions:

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5.57 - $ 6.66

9.66 - $ 10.00

Exercise Price

Term (in years)

Intrinsic Value

(in thousands)

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Outstanding Balance at September 30, 2023

Exercisable at September 30, 2022

Exercisable on September 30, 2023

The aggregate intrinsic value in the above table was calculated as the difference between the valuation price of Indco’s common stock at September 30, 2023 of $ 15.19 per share and the exercise price of the stock options that had strike prices below such closing price.

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every reporting period until the options are settled.

As a result of previous option exercise and

stock repurchase activity, the mandatorily redeemable non-controlling interest percentage was 9.8 % as of each of September

30, 2023 and 2022.

Changes in the fair value of the vested options are recognized in earnings in the consolidated financial statements.

7 unchanged sentences

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.

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,

(Loss) Income:

Net (loss) income

Income (Loss):

Net income (loss)

Preferred stock dividends

Non-controlling interest dividends

Net (loss) income available to common stockholders

Net income (loss) available to common stockholders

Common Shares:

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Diluted - weighted average common stock

(Loss) Income per Common Share:

Net (loss) income

Income (Loss) per Common Share:

Net income (loss)

Preferred stock dividends

Non-controlling interest dividends

Net (loss) income attributable to common stockholders

Net (loss) income

Net income (loss) attributable to common stockholders

Net income (loss)

Preferred stock dividends

Non-controlling interest dividends

Net (loss) income available to common stockholders

Net income (loss) 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.

There were 10,000 anti-dilutive shares for the fiscal years ended September 30, 2023 and 48,293 anti-dilutive shares for the fiscal years ended September 30, 2022.

Potentially diluted securities as of September 30, 2023 and 2022 are as follows:

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Employee stock options (Note 10)

Convertible preferred stock

The reconciliation of income tax computed at the Federal statutory rate to the 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 operations is as follows (in thousands):

Year Ended September 30,

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The tax effects of temporary differences that gave rise to significant portions of the deferred tax assets and liabilities were as follows (in thousands):

Deferred tax assets - net operating loss carryforwards

Deferred tax assets - net state operating loss carryforwards

Lease liability

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Prepaid expenses

Right of use asset

Right of use assets

Total deferred tax liabilities

Net deferred tax liability

The Company has no net operating loss

The Company has no Federal net operating loss

carryforwards for income tax purposes as of September 30, 2023.

2 unchanged sentences

accrued interest or penalties related to uncertain tax positions and no amounts have been recognized in the Company’s statement of

In October 2021, the Company received notification from the Internal

Revenue Service that the Internal Revenue Service audit for the 2018 tax year was completed with no changes to our reported tax for the 2018 tax year.

Income tax returns for tax years from 2019 through 2022 remain subject to examination by the taxing jurisdictions.

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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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September 30, 2023

Fiscal Year 2023

Fiscal Year 2024

Fiscal Year 2025

Fiscal Year 2026

Fiscal Year 2027

Total undiscounted loan payments

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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.

Merchants 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

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, 2023 and 2022 and recorded a loss of $ 798 and $ 19,789 , respectively 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, 2023 and 2022.

September 30,

Balance as of September 30, 2021

September 30,

Balance at beginning of year

Purchase of Rubicon investment

1 unchanged sentence

The summarized financial information of Rubicon as of and for the twelve months ended September 30, 2023 is as follows:

total assets $ 5,340 , total liabilities $ 2,337 , total revenues $ 3,883 , gross profit $ 1,505 and net income

total assets $ 4,185 , total liabilities $ 615 ,

total revenues $ 2,692 , gross profit $ 582

and net income $ 735 .

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 $ 810 .

FAIR VALUE MEASUREMENTS

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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.

Investment in Rubicon at fair value

of each of September 30, 2023 and September 30, 2022, the Company held 46.6 % and 45.0 %, respectively, of the total issued and outstanding shares of Rubicon and reported its investment under the fair value method pursuant to ASC 320.

Management determined

that it was appropriate to carry its investment in Rubicon at fair value because the investment was traded on the NASDAQ stock exchange through January 2, 2023, began trading on the OTCQB Capital Market on January 3, 2023 and had daily trading

activity, the combination of which provide a better indicator of value.

The investment in Rubicon is re-measured at the end of each quarter based on the trading price and any change in the value is reported on the income statement as an

unrealized gain or loss on marketable securities in other income (expense).

Refer to Note 16 to Consolidated Financial Statements for reconciliation of changes to the investment in Rubicon for the years ended September 30, 2023 and 2022.

Contingent earnout liabilities

These liabilities relate to the estimated fair

value of earnout payments to former IBS and ELFS owners for the periods ending September 30, 2023 and 2022.

The current and non-current portions of the fair value of the contingent earnout liability at September 30, 2023 were $ 592 and $ 1,738 , 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):

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 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

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.

Earnout payment

Fair value adjustment of contingent earnout liabilities

Balance at end of year

Company determined the fair value of the contingent earnout liability using forecasted results through the expected earnout periods.

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.

There were no significant

changes to this methodology during the year ended September 30, 2023.

COMMITMENTS AND CONTINGENCIES

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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.

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

SUBSEQUENT EVENTS

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 .

On October 4, 2023, Rubicon announced that it had authorized a cash dividend of $ 1.10 per share of Common Stock of Rubicon and set October 16, 2023 as the record date for the distribution.

On October 23, 2023 the Company received $ 1,219

in dividends .

On December 1, 2023, in connection with an amendment (the “Purchase Agreement Amendment”) to that certain Membership Interest Purchase Agreement dated as of September 21, 2021 (the “Purchase Agreement”) among Janel Group, ELFS and former shareholders of ELFS, (the “ELFS Sellers”), (i) the Janel Group Borrowers

and Santander entered into an Acknowledgment and Consent Agreement pursuant to which Santander consented to the Purchase Agreement Amendment and the effect of the modifications thereunder on the Santander Loan Agreement and (ii) the

ELFS Sellers and Santander entered into an Acknowledgment and Consent Agreement pursuant to which Santander consented to the Purchase Agreement Amendment and the effect of the modifications thereunder on the Subordination Agreement (as

defined in the Santander Loan Agreement) between Santander and the ELFS Sellers.

As amended, the parties agreed to (i) certain modifications fixing the amount of the remaining earnout payments in earnout year three and four (as

defined in the Purchase Agreement) to $ 1,078 each earnout year and (ii) extended the maturity by an additional two years and restored the pre-working capital adjusted amount of the ELFS Subordinated Promissory Notes (as defined in the Purchase

Agreement) to $ 6,000 (increase of $ 900 )

payable to the Subordinated Lender thereunder (collectively, the “Purchase Modifications”).

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