ThZeal - The Zeal

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____ to ____

Commission file number: 333-60608

JANEL CORPORATION

(Exact name of registrant as specified in its charter)


Nevada		86-1005291
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)


80 Eighth Avenue
New York, New York		10011
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (212) 373-5895

Former name, former address and former fiscal year, if changed from last report: N/A

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading symbols(s)	Name of each exchange on which registered
None	None	None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer ☐	Accelerated filer	☐
Non-accelerated filer ☐	Smaller reporting company	☒
	Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

Yes ☐ No ☒

The number of shares of Common Stock outstanding as of August 1, 2025 was 1,186,354.

JANEL CORPORATION

QUARTERLY REPORT ON FORM 10-Q

For Quarterly Period Ended June 30, 2025

TABLE OF CONTENTS


			Page

Part I - Financial Information			3

	Item 1.	Financial Statements	3

		Condensed Consolidated Balance Sheets as of June 30, 2025 (unaudited) and September 30, 2024	3

		Condensed Consolidated Statements of Operations for the three and nine months ended June 30, 2025 and 2024 (unaudited)	4

		Condensed Consolidated Statement of Stockholders’ Equity for the three and nine months ended June 30, 2025 and 2024 (unaudited)	5

		Condensed Consolidated Statements of Cash Flows for the nine months ended June 30, 2025 and 2024 (unaudited)	6

		Notes to Condensed Consolidated Financial Statements (unaudited)	7

	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20

	Item 4.	Controls and Procedures	29

Part II - Other Information			30

	Item 1.	Legal Proceedings	30

	Item 1A.	Risk Factors	30

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	30

	Item 6.	Exhibit Index	30

		Signatures	31

PART I - FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS

JANEL CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)

(Unaudited)


		June 30, 2025			September 30, 2024
ASSETS
Current Assets:
Cash	$	3,908		$	2,888
Accounts receivable, net of allowance for doubtful accounts		42,382			33,815
Inventory, net		5,259			4,478
Prepaid expenses and other current assets		5,348			4,829
Total current assets		56,897			46,010
Property and Equipment, net		5,954			5,492
Other Assets:
Intangible assets, net		24,879			25,117
Goodwill		25,351			23,030
Restricted cash		1,193			194
Restricted investments		183			56
Investment in marketable securities at fair value		2,327			1,518
Operating lease right of use asset		7,956			8,621
Security deposits and other long-term assets		1,292			572
Total other assets		63,181			59,108
Total assets	$	126,032		$	110,610
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Lines of credit	$	10,499		$	23,013
Accounts payable - trade		52,696			32,000
Accrued expenses and other current liabilities		7,837			7,489
Dividends payable		2,243			2,271
Current portion of earnout		1,407			1,262
Current portion of long-term debt		1,439			1,276
Current portion of subordinated promissory notes-related party		1,574			1,628
Current portion of operating lease liabilities		2,331			2,419
Total current liabilities		80,026			71,358
Other Liabilities:
Long-term debt		6,867			3,028
Long-term portion of earnout		1,134			2,119
Subordinated promissory notes-related party		2,411			3,445
Mandatorily redeemable non-controlling interest		3,352			1,529
Deferred income taxes		2,514			2,514
Long-term operating lease liabilities		6,296			6,585
Other liabilities		311			531
Total other liabilities		22,885			19,751
Total liabilities		102,911			91,109
Stockholders' Equity:
Preferred Stock, $0.001 par value; 100,000 shares authorized
Series C 30,000 shares authorized and 11,368 shares issued and outstanding at June 30, 2025 and September 30, 2024, liquidation value of $7,927 at June 30, 2025 and $7,957 at September 30, 2024		—			—
Common stock, $0.001 par value; 4,500,000 shares authorized, 1,206,354 issued and 1,186,354 outstanding as of June 30, 2025 and September 30, 2024, respectively		1			1
Paid-in capital		17,721			17,084
Common treasury stock, at cost, 20,000 shares		(240	)		(240	)
Accumulated earnings		5,639			2,656
Total stockholders' equity		23,121			19,501
Total liabilities and stockholders' equity	$	126,032		$	110,610

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

JANEL CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(Unaudited)


	Three Months Ended June 30,						Nine Months Ended June 30,
		2025			2024			2025			2024
Revenues:
Logistics	$	43,231		$	40,677		$	133,361		$	111,991
Life Sciences and Manufacturing		5,914			6,047			17,869			17,890
Total Revenues		49,145			46,724			151,230			129,881
Forwarding Expenses and Cost of Revenues:
Forwarding expenses - Logistics		31,259			29,725			98,155			81,232
Cost of revenues - Life Sciences and Manufacturing		1,776			1,908			5,252			5,590
Total Forwarding Expenses and Cost of Revenues		33,035			31,633			103,407			86,822
Gross profit		16,110			15,091			47,823			43,059
Operating Expenses:
Selling, general and administrative		13,525			13,358			40,576			38,664
Amortization of intangible assets		654			555			1,937			1,635
Total Operating Expenses		14,179			13,913			42,513			40,299
Income from Operations		1,931			1,178			5,310			2,760
Other Items:
Interest expense		(442	)		(589	)		(1,668	)		(1,663	)
Other income (loss)		(157	)		(437	)		402			(381	)
Income Before Income Taxes		1,332			152			4,044			716
Income tax expense		(445	)		(343	)		(1,058	)		(412	)
Net Income (Loss)		887			(191	)		2,986			304
Preferred stock dividends		(77	)		(85	)		(271	)		(242	)
Non-controlling interest dividends		—			—			(243	)		—
Net Income (Loss) Available to Common Stockholders	$	810		$	(276	)	$	2,472		$	62


Net income (loss) per share:
Basic	0.75	(0.16	)	2.52	0.25
Diluted	0.74	(0.16	)	2.48	0.25
Net income (loss) per share attributable to common stockholders:
Basic	0.68	(0.23	)	2.08	0.05
Diluted	0.67	(0.23	)	2.05	0.05
Weighted average number of shares outstanding:
Basic	1,186.4	1,186.4		1,186.4	1,186.4
Diluted	1,206.6	1,186.4		1,206.1	1,205.9

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

JANEL CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

(in thousands, except share and per share data)

(Unaudited)


	PREFERRED STOCK			COMMON STOCK				PAID-IN CAPITAL		COMMON TREASURY STOCK					ACCUMULATED EARNINGS		TOTAL EQUITY
	SHARES		$	SHARES		$				SHARES		$			$		$
Balance - September 30, 2024	11,368	$	—	1,206,354	$	1	$	17,084		20,000	$	(240	)	$	2,656	$	19,501
Net Income	—		—	—		—		—		—		—			657		657
Dividends to preferred stockholders	—		—	—		—		(86	)	—		—			—		(86	)
Dividends to non-controlling interest	—		—	—		—		(243	)	—		—			—		(243	)
Stock-based compensation	—		—	—		—		123		—		—			—		123
Balance - December 31, 2024	11,368	$	—	1,206,354	$	1	$	16,878		20,000	$	(240	)	$	3,313	$	19,952
Net Income	—		—	—		—		—		—		—			1,439		1,439
Dividends to preferred stockholders	—		—	—		—		(108	)	—		—			—		(108	)
Stock based compensation	—		—	—		—		123		—		—			—		123
Stock option exercise	—		—	—		—		783		—		—			—		783
Balance - March 31, 2025	11,368	$	—	1,206,354	$	1	$	17,676		20,000	$	(240	)	$	4,752	$	22,189
Net Income	—		—	—		—		—		—		—			887		887
Dividends to preferred stockholders	—		—	—		—		(77	)	—		—			—		(77	)
Stock based compensation	—		—	—		—		122		—		—			—		122
Balance - June 30, 2025	11,368	$	—	1,206,354	$	1	$	17,721		20,000	$	(240	)	$	5,639	$	23,121


	PREFERRED STOCK			COMMON STOCK				PAID-IN CAPITAL		COMMON TREASURY STOCK					ACCUMULATED EARNINGS			TOTAL EQUITY
	SHARES		$	SHARES		$		$		SHARES		$			$			$
Balance - September 30, 2023	11,368	$	—	1,206,354	$	1	$	17,107		20,000	$	(240	)	$	2,105		$	18,973
Net Income	—		—	—		—		—		—		—			276			276
Dividends to preferred stockholders	—		—	—		—		(72	)	—		—			—			(72	)
Stock-based compensation	—		—	—		—		68		—		—			—			68
Balance - December 31, 2023	11,368	$	—	1,206,354	$	1	$	17,103		20,000	$	(240	)	$	2,381		$	19,245
Net Income	—		—	—		—		—		—		—			219			219
Dividends to preferred stockholders	—		—	—		—		(85	)	—		—			—			(85	)
Stock based compensation	—		—	—		—		68		—		—			—			68
Balance - March 31, 2024	11,368	$	—	1,206,354	$	1	$	17,086		20,000	$	(240	)	$	2,600		$	19,447
Net Loss	—		—	—		—		—		—		—			(191	)		(191	)
Dividends to preferred stockholders	—		—	—		—		(85	)	—		—			—			(85	)
Stock based compensation	—		—	—		—		67		—		—			—			67
Balance - June 30, 2024	11,368	$	—	1,206,354	$	1	$	17,068		20,000	$	(240	)	$	2,409		$	19,238

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

JANEL CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(Unaudited)


	Nine Months Ended June 30,
		2025			2024
Cash Flows from Operating Activities:
Net income	$	2,986		$	304
Adjustments to reconcile net income to net cash provided by operating activities:
(Recovery of) Provision for uncollectible accounts		18			(71	)
Depreciation		469			404
Amortization of intangible assets		1,937			1,635
Amortization of acquired inventory valuation		211			264
Amortization of loan costs		143			72
Stock-based compensation		367			214
Unrealized (gain) loss on marketable securities		(794	)		742
Change in fair value of mandatorily redeemable noncontrolling interest		337			400
Fair value adjustments of contingent earnout liabilities		335			553
Gain on extinguishment of debt		—			(21	)
Changes in operating assets and liabilities, net of effects of acquisitions:
Accounts receivable		(8,436	)		(3,292	)
Inventory		(431	)		38
Prepaid expenses and other current assets		(507	)		102
Security deposits and other long-term assets		(286	)		4
Accounts payable and accrued expenses		21,000			4,844
Other liabilities		283			162
Net Cash Provided by Operating Activities		17,632			6,354
Cash Flows from Investing Activities:
Acquisition of property and equipment, net of disposals		(396	)		(658	)
Investment in marketable securities (net of dividends)		(142	)		—
Earnout Payment		(1,078	)		(740	)
Acquisitions, net of cash acquired		(2,752	)		(3,795	)
Net Cash Used in Investing Activities		(4,368	)		(5,193	)
Cash Flows from Financing Activities:
Proceeds from (Repayments of) term loan		3,386			(1,573	)
Issuance of Note Receivable		(298	)		—
Proceeds from (Repayments of) Lines of credit, net		(8,903	)		2,372
Repayment of subordinate promissory notes, net		(1,186	)		(1,117	)
Repayment of acquisition loan		(3,700	)		—
Dividends paid to non-controlling interest		(244	)		—
Dividends paid to preferred shareholders		(300	)		—
Net Cash Used in Financing Activities		(11,245	)		(318	)
Net increase in cash		2,019			843
Cash at beginning of the period		3,082			2,461
Cash and Restricted Cash at End of Period		5,101			3,304

Supplemental Disclosure of Cash Flow Information:
Cash paid during the period for:
Interest		1,291			1,442
Income taxes		853			556
Non-cash operating activities:
Contingent earnout acquisition		—			64
Due to former owners		338			740
Non-cash investing activities:
Airschott subordinated promissory note		—			1,200
Airschott contingent deferred consideration		48			952
Non-cash financing activities:
Dividends declared to preferred stockholders		271			242

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

JANEL CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (in thousands, except per share data)

(Unaudited)

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

The accompanying interim unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of Article 8 of Regulation S-X and the instructions to Form 10-Q of the Securities and Exchange Commission. As a result, certain information and footnote disclosures normally included in audited financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. Janel Corporation (the “Company” or “Janel”) believes that the disclosures made are adequate to make the information presented not misleading. The condensed consolidated financial statements reflect all adjustments which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. The results of operations for the periods presented are not necessarily indicative of the results to be expected for a full fiscal year, or any other period. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s Form 10-K as filed with the Securities and Exchange Commission.

Business Description

Janel 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; and attracting and retaining exceptional talent.

Management at the holding company focuses on significant capital allocation decisions, corporate governance and supporting Janel’s subsidiaries where appropriate. Janel expects to grow through its subsidiaries’ organic growth and by completing acquisitions. We plan to either acquire businesses within our existing segments or expand our portfolio into new strategic segments. Our acquisition strategy focuses on reasonably-priced companies with strong and capable management teams, attractive existing business economics and stable and predictable earnings power.

Restricted Cash and Investments

Commencing in the second half of 2024, the Company insures certain risks through a newly formed wholly-owned captive insurance company, Gainesville Insurance Company, Inc. (“Gainesville”). In addition, we also maintain some of our normal, historical insurance policies with third-party insurers. $250 in cash, cash equivalents, or equity investments is maintained by Gainesville as required by state insurance regulations. As of June 30, 2025, the Company held $67 in restricted cash and $183 in restricted investments.

During the first quarter of 2025, as part of the Eighth Amendment (the “Eighth Santander Amendment”) to the Santander Loan Agreement (as defined herein), the Company deposited $2,164 into a restricted cash account. Following a pre-approved earnout payment in January 2025, the Company held $1,126 in a restricted cash account as of June 30, 2025.

The Company considers all highly liquid investments with an original maturity of three months or less, when purchased, to be cash equivalents.

Investment in Marketable Securities at fair value

The Company has investments in assets that are measured at their fair value.

As of June 30, 2025 and September 30, 2024, the Company owned 1,108,000 shares, or approximately 46.6%, of the common stock of Rubicon Technology, Inc. (“Rubicon”). Rubicon is an advanced materials provider specializing in monocrystalline sapphire for applications in optical and industrial systems. The purpose of our investment in Rubicon was 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. As of June 30, 2025 and September 30, 2024, the fair value of the Rubicon investment was $2,327 and $1,518, respectively.

The Company also has other investments in marketable securities whose fair value as of June 30, 2025 and September 30, 2024 was $183 and $56, respectively.

Revenue and revenue recognition

Logistics

Revenues are recognized upon transfer of control of promised services to customers. With respect to its Logistics segment, the Company has determined that, in general, each shipment transaction or service order constitutes a separate contract with the customer. When the Company provides multiple services to a customer, different contracts may be present for different services.

The Company typically satisfies its performance obligations as services are rendered at a point in time. A typical shipment would include services rendered at origin, such as pick-up and delivery to port, freight services from origin to destination port and destination services, such as customs clearance and final delivery. The Company measures the performance of its obligations as services are completed at a point in time during the life of a shipment, including services at origin, freight and destination. The Company fulfills nearly all of its performance obligations within a one- to two-month period.

The Company evaluates whether amounts billed to customers should be reported as gross or net revenues. Generally, revenues are recorded on a gross basis when the Company is acting as principal and is primarily responsible for fulfilling the promise to provide the services, when it has discretion in setting the prices for the services to the customers, and the Company has the ability to direct the use of the services provided by the third party. Revenues are recognized on a net basis when the Company is acting as agent, and we do not have latitude in carrier selection or in establishing rates with the carrier.

In the Logistics segment, the Company disaggregates its revenue by its four primary service categories: trucking, ocean freight, air freight, and customs brokerage and other. A summary of the Company’s revenues disaggregated by major service lines for the three and nine months ended June 30, 2025 and 2024 is as follows (in thousands):


	Three Months Ended June 30,				Nine Months Ended June 30,
		2025		2024		2025		2024
Service Type
Trucking	$	16,908	$	18,689	$	52,620	$	55,040
Ocean Freight		10,671		10,443		35,554		25,204
Air Freight		7,394		6,733		21,254		19,261
Customs Brokerage and Other		8,258		4,812		23,933		12,486
Total	$	43,231	$	40,677	$	133,361	$	111,991

Life Sciences and Manufacturing

Revenues from the Life Sciences segment are derived from the sale of high-quality monoclonal and polyclonal antibodies, diagnostic reagents, diagnostic kits, and other immunoreagents for biomedical research and antibody manufacturing. Revenues from the Company’s Manufacturing segment, which 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, are derived from the engineering, manufacture and delivery of specialty mixing equipment and accessories. Revenues for Life Sciences and Manufacturing are recognized when products are shipped and risk of loss is transferred.

Mandatorily Redeemable Non-Controlling Interests

On January 14, 2025, two minority owners of Indco exercised 21,778 and 13,829 options to purchase Indco’s common stock at an average exercise price of $11.60 and $13.19, respectively, for an aggregate purchase price of $253 and $182, respectively. In conjunction with the exercise, Indco issued related party promissory notes to the two minority owners for amounts totaling the aggregate purchase price. The notes are included in security deposits and other long-term assets. As a result of the exercise of options to purchase Indco’s stock, the mandatorily redeemable non-controlling interest percentage was 14.4% as of the exercise date.

On June 4, 2025, the Company completed a business combination whereby it acquired 80% of the outstanding stock of Biosensis Pty Ltd (“Biosensis”). The Company and the former shareholders of Biosensis have put-call options exercisable before June 4, 2028 for the remaining 20% of outstanding common stock. As a result of the acquisition, the Life Sciences segment recorded a mandatorily redeemable non-controlling interest of $1,486.

ACQUISITIONS

Fiscal 2025 Acquisition

Life Sciences

The Company's acquisition of a majority ownership position in Biosensis was for an aggregate purchase price of $5,136, net of $199 cash received and net non-interest bearing liabilities assumed of $166. Additionally, the Company assumed debt of $563 and recorded a liability of $1,486 relating to the non-controlling interest. At closing, the Company purchased 80% of the outstanding common stock of Biosensis for $2,754 in cash and $298 in the form of a conversion of a note receivable. The Company and the former shareholders have put-call options exercisable before June 4, 2028 for the remaining 20% of outstanding common stock. The acquisition was funded by the Company’s existing acquisition draw facility with First Merchants Bank (“First Merchants”), and the results of operations of Biosensis 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 $2,124 in goodwill and $1,700 in other identifiable intangible assets. 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. Biosensis is a developer and manufacturer of antibodies and cell culture media for research and diagnostic uses. Biosensis was founded in 2006 and is headquartered in Thebarton, Australia. The acquisition of Biosensis was completed to expand our product offerings in our Life Sciences segment.

Fiscal 2024 Acquisitions

Logistics

On June 5, 2024, the Company completed a business combination whereby it acquired a majority ownership position in Airschott, Inc. (“Airschott”), a non-asset-based freight forwarder and customs broker, for an aggregate purchase price of $5,810. At closing, the Company purchased 80% of the outstanding stock of Airschott for $3,600 in cash, a $1,200 floating-rate seller’s note, and net liabilities assumed of $170. The Company also agreed to purchase the remaining 20% of Airschott stock in three years for deferred consideration of the greater of 20% of 1.25 times the trailing twelve months gross profit of Airschott and $1,200. The acquisition was funded by our existing acquisition draw facility with First Merchants and through our existing asset-backed facility with Santander Bank, N.A. (“Santander”). In connection with the combination, the Company recorded an aggregate of $1,661 in goodwill and $4,320 in other identifiable intangible assets. Subsequently, the Company recorded a deferred tax liability of $977. In the three months ended December 31, 2024, an additional payment of $197 was made on liabilities that existed prior to the date of acquisition, increasing the goodwill related to the acquisition by the same amounts. 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. Airschott was founded in 1977 and is headquartered in Dulles, Virginia. The acquisition of Airschott was completed to expand our service offerings in our Logistics segment.

Life Sciences

On February 1, 2024, the Company completed a business combination whereby it acquired all the outstanding stock of ViraQuest, Inc. (“ViraQuest”) for an aggregate purchase price of $635, net of $29 cash received. At closing, $600 was paid in cash and $64 was recorded as a preliminary earnout consideration. The acquisition was funded with cash provided by operating activities, and the results of operations of ViraQuest are included in Janel’s consolidated results of operations since the date of the acquisition. In connection with the combination, the Company recorded an aggregate of $74 in goodwill and $412 in other identifiable intangible assets. 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. ViraQuest is a biotechnology custom service provider specializing in adenovirus production services. ViraQuest was founded in 2000 and was headquartered in North Liberty, Iowa. The acquisition of ViraQuest was completed to expand our service offerings in our Life Sciences segment.

INVENTORY

Inventories consisted of the following (in thousands):


		June 30, 2025			September 30, 2024
Finished goods	$	2,549		$	1,860
Work-in-process		1,139			1,236
Raw materials		1,973			1,884
Gross inventory		5,661			4,980
Less – reserve for inventory valuation		(402	)		(502	)
Inventory net	$	5,259		$	4,478

INTANGIBLE ASSETS

A summary of intangible assets and the estimated useful lives used in the computation of amortization is as follows (in thousands):


		June 30, 2025			September 30, 2024		Life
Customer relationships	$	30,979		$	29,790		10-24 Years
Trademarks/names		5,036			4,661		1-20 Years
Trademarks/names		521			521		Indefinite
Other		2,142			2,007		2-22 Years
		38,678			36,979
Less: Accumulated Amortization		(13,799	)		(11,862	)
Intangible assets, net	$	24,879		$	25,117

The composition of the intangible assets balance at June 30, 2025 and September 30, 2024 is as follows (in thousands):


		June 30, 2025			September 30, 2024
Logistics	$	22,494		$	22,494
Life Sciences		8,484			6,785
Manufacturing		7,700			7,700
		38,678			36,979
Less: Accumulated Amortization		(13,799	)		(11,862	)
Intangible assets, net	$	24,879		$	25,117

Amortization expense for the nine months ended June 30, 2025 and 2024 was $1,937 and $1,635, respectively.

GOODWILL

The Company’s goodwill carrying amounts relate to acquisitions in the Logistics, Life Sciences and Manufacturing business segments.

The composition of the goodwill balance at June 30, 2025 and September 30, 2024 was as follows (in thousands):


		June 30, 2025		September 30, 2024
Logistics	$	12,010	$	11,813
Life Sciences		8,295		6,171
Manufacturing		5,046		5,046
Total	$	25,351	$	23,030

NOTES PAYABLE – BANKS

Logistics

Santander Bank Facility

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 Bank, N.A. (“Santander”) with respect to a revolving line of credit facility (the “Santander Facility”).

The Santander Loan Agreement matures on September 21, 2026. 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.

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, Inc. (“Janel Group”), a wholly-owned subsidiary of the Company, Expedited Logistics and Freight Services, LLC (“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.

On December 21, 2023, we entered into the Sixth Amendment to the Santander Loan Agreement (the “Sixth Santander Amendment”). The Sixth Santander Amendment modified the reporting due date of the monthly borrowing base calculation from the fifth day to the fifteenth day of each month.

On June 5, 2024, we entered into the Seventh Amendment to the Santander Loan Agreement (the “Seventh Santander Amendment”). The Seventh Santander Amendment added Airschott as a loan party obligor and borrower.

On November 1, 2024, we entered into the Eighth Amendment to the Santander Loan Agreement. The Eighth Santander Amendment changed terms to modify the structure of our debt covenant and borrowing base calculation, including: (i) the maximum revolving facility amount available was modified to $35,000 (limited to 90% of the Janel Group 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 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) the amount the Company is permitted to distribute to holders of the Company’s Series C Preferred Stock if specified conditions are met received a one-time increase from $1,000 to $3,000; 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.

At June 30, 2025, outstanding borrowings under the Santander Facility were $7,199, representing 20.6% of the $35,000 available subject to limitations thereunder, and interest was accruing at an effective interest rate of 6.67%.

At September 30, 2024, outstanding borrowings under the Santander Facility were $19,313, representing 55.2% of the $35,000 available thereunder, and interest was accruing at an effective interest rate of 7.65%.

The Company was in compliance with the financial covenants defined in the Santander Loan Agreement at both June 30, 2025 and September 30, 2024.

Life Sciences and Manufacturing

First Merchants Bank Credit Facility

On February 29, 2016, Indco entered into a Credit Agreement (as amended, the “Prior First Merchants Credit Agreement”) with First Merchants.

On April 25, 2023, Indco and certain other Subsidiaries of the Company that are part of the Life Science and Manufacturing segment (together with Indco, the “Borrowers” and each, a “Borrower”), entered into a Credit Agreement (the “Credit Agreement”) with First Merchants. The Credit Agreement constituted an amendment and restatement of the Prior First Merchants Credit Agreement. The credit facilities provided under the Credit Agreement (the “First Merchants Credit Facilities”) consisted of a $3,000 revolving loan (limited to the borrowing base and reserves), a $5,000 Acquisition A 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.

On January 10, 2024, the First Merchants Credit Facilities was amended to provide for, among other changes, permitted affiliate loans provided availability on its revolving loan both before and after giving effect to any such loan, is not less than $1,000 and maturity of such permitted affiliate loans are not to exceed fourteen days from disbursement.

On November 22, 2024, the First Merchants Credit Facilities was amended to provide for, among other changes, the conversion and extinguishment of the $3,700 under the existing Acquisition A loan into the Term A loan, an incremental increase to the Term A loan of $1,000, and the establishment of a new Acquisition B loan with a borrowing capacity of $7,000.

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. Pursuant to the November 22, 2024 amendment, the revolving loan portion will expire on November 22, 2029, the Term A loan portion will mature on November 22, 2029, the Term B loan portion matured on July 1, 2025 and the Acquisition B loan will permit multiple draws until November 22, 2026, at which point the outstanding principal amount will amortize, with all remaining amounts due at maturity of the Acquisition B loan on November 22, 2031; each of the foregoing maturities are subject to earlier termination as provided in the Credit Agreement and unless renewed or extended.

As of June 30, 2025, there were no outstanding borrowings under the Acquisition B loan, $8,104 of outstanding borrowings under the Term A loan, $566 of outstanding borrowings under the Term B loan, $400 of outstanding borrowings on the revolving loan, with interest accruing on revolving loan, Acquisition B loan and the Term A loan at an effective interest rate of 7.07% and on the Term B loan at an effective interest rate of 4.19%.

As of September 30, 2024, there were $3,700 of outstanding borrowings under the Acquisition A loan, $4,028 of outstanding borrowings under the Term A loan and $585 of outstanding borrowings under the Term B loan, with interest accruing on the Acquisition A loan and revolving loan at an effective interest rate of 7.82% each, and on the Term A loan and Term B loan at an effective interest rate of 7.82% and 4.19%, respectively.

The Company was in compliance with the financial covenants defined in the First Merchants Credit Agreement at June 30, 2025 and September 30, 2024.

The table below sets forth the total long-term debt, net of capitalized loan fees of $363 and $309 for the First Merchants Credit Agreement as of June 30, 2025 and September 30, 2024, respectively (in thousands):


		June 30, 2025			September 30, 2024
Total Debt	$	8,306		$	4,304
Less Current Portion		(1,439	)		(1,276	)
Long-term Portion	$	6,867		$	3,028

SUBORDINATED PROMISSORY NOTES - RELATED PARTY

(A) ICT Subordinated Promissory Note

Aves Labs, Inc., a wholly-owned subsidiary of the Company, was 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 was payable in sixteen scheduled quarterly installments of principal and interest beginning March 4, 2021 and matured on December 4, 2024 when it was fully paid.

As of September 30, 2024, the amount outstanding under the ICT Subordinated Promissory Note was $55, all of which was included in the current portion of subordinated promissory notes.

(B) ELFS 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, 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 Facility and the First Merchants Credit Facility. The ELFS Subordinated Promissory Notes are payable in twelve equal consecutive quarterly installments of principal together with accrued interest. Beginning October 15, 2021 and on the same day of the next eight consecutive calendar quarters, thereafter payment of accrued interest and unpaid interest is due to the former shareholders. Beginning October 15, 2023, and on the same day of the next twelve consecutive calendar quarters thereafter payment of principal together with accrued interest and unpaid interest is due to the former shareholders. 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.

On December 1, 2023, in connection with the Purchase Agreement Amendment among Janel Group and the ELFS Sellers, the Company extended the ELFS Subordinated Promissory Notes maturity by two years and restored the working capital adjustment (as defined in the Purchase Agreement) by $900 which increased the principal amount of the ELFS Subordinated Promissory Notes to $6,000. The Company evaluated the accounting treatment related to the amendment and determined the agreements are substantially different. Therefore, the Company extinguished the original subordinated promissory notes and recorded the amended subordinated promissory notes at fair value of $4,654. As a result, the Company recorded a debt discount of approximately $921 and a $21 gain on extinguishment.

As of June 30, 2025, the gross amount outstanding under the ELFS Subordinated Promissory Notes was $3,185, of which $1,174 was included in the current portion of subordinated promissory notes and $2,011 was included in the long-term portion of subordinated promissory notes.

As of September 30, 2024, the amount outstanding under the ELFS Subordinated Promissory Notes was $3,918, of which $1,173 was included in the current portion of subordinated promissory notes and $2,745 was included in the long-term portion of subordinated promissory notes.

Janel Group is the obligor on a floating rate (Prime Rate plus 2%) subordinated promissory note in the amount of $1,200 (the "Airschott Subordinated Promissory Note") issued to a former owner of Airschott, in connection with the business combination whereby Janel Group acquired Airschott. The note is payable in twelve consecutive quarterly payments, commencing July 2024, of $100 together with accrued interest on the outstanding principal balance.

As of June 30, 2025, the amount outstanding under the Airschott Subordinated Promissory Note was $800, with $400 included in the current portion of subordinated promissory notes and $400 included in the long-term portion of subordinated promissory notes.

As of September 30, 2024, the amount outstanding under the Airschott Subordinated Promissory Note was $1,100, of which $400 was included in the current portion of subordinated promissory notes and $700 was included in the long-term portion of subordinated promissory notes.

The table below sets forth the total long-term portion of subordinated promissory notes (in thousands):


		June 30, 2025			September 30, 2024
Total subordinated promissory notes	$	3,985		$	5,073
Less current portion of subordinated promissory notes		(1,574	)		(1,628	)
Long-term portion of subordinated promissory notes	$	2,411		$	3,445

STOCKHOLDERS’ EQUITY

(in thousands, except share and per share data)

Janel is authorized to issue 4,500,000 shares of common stock, par value $0.001. In addition, the Company is authorized to issue 100,000 shares of preferred stock, par value $0.001. The preferred stock is issuable in series with such voting rights, if any, designations, powers, preferences and other rights and such qualifications, limitations and restrictions as may be determined by the Company’s Board of Directors or a duly authorized committee thereof, without stockholder approval. The Board of Directors may fix the number of shares constituting each series and increase or decrease the number of shares of any series.

(A)

Preferred Stock

Series C Cumulative Preferred Stock

Shares of the Company’s Series C Cumulative Preferred Stock (the “Series C Stock”) are entitled to receive annual dividends at a rate of 5% per annum of the original issuance price of $500, when and if declared by the Company’s Board of Directors, and increased by 1% on January 1, 2024. Such rate is to increase on each January 1 thereafter for four years to a maximum rate of 9%. The dividend rate of the Series C Stock as of June 30, 2025 and September 30, 2024 was 7% and 6%, respectively. In the event of liquidation, holders of Series C Stock shall be paid an amount equal to the original issuance price, plus any accrued dividends thereon. Shares of Series C Stock may be redeemed by the Company at any time upon notice and payment of the original issuance price, plus any accrued dividends thereon. The liquidation value of Series C Stock was $7,927 and $7,957 as of June 30, 2025 and September 30, 2024, respectively.

For the nine months ended June 30, 2025 and 2024, the Company declared dividends on Series C Stock of $271 and $242, respectively. At June 30, 2025 and September 30, 2024, the Company had accrued dividends of $2,243 and $2,271, respectively.

(B)

Equity Incentive Plan

On October 30, 2013, the Board of Directors of the Company adopted the Company’s 2013 Non-Qualified Stock Option Plan (the “2013 Option Plan”) providing for options to purchase up to 100,000 shares of common stock for issuance to directors, officers, employees of and consultants to the Company and its subsidiaries.

On May 12, 2017, the Company adopted the 2017 Equity Incentive Plan (the “2017 Plan”) pursuant to which the Company may grant (i) incentive stock options, (ii) non-statutory stock options, (iii) restricted stock awards and (iv) stock appreciation rights with respect to shares of the Company’s common stock, par value of $0.001 per share (“Common Stock”), to directors, officers, employees of and consultants to the Company. On September 21, 2021, the Board of Directors of the Company adopted the Amended and Restated 2017 Janel Corporation Equity Incentive Plan (the “Amended Plan”) pursuant to which the Company may grant non-statutory stock options, restricted stock awards and stock appreciation rights of Common Stock to employees, directors and consultants to the Company and its subsidiaries.

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

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

STOCK-BASED COMPENSATION

(in thousands, except share and per share data)

Total stock-based compensation for the nine months ended June 30, 2025 and 2024 amounted to $367 and $214, respectively, and is included in selling, general and administrative expense in the Company’s statements of operations.

Options


	Number of Options		Weighted Average Exercise Price	Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value (in thousands)
Outstanding balance at September 30, 2024	49,993	$	25.31	6.9	$	544.96
Granted	12,500	$	40.50	5.0	$	—
Outstanding balance at June 30, 2025	62,493	$	28.35	6.7	$	544.96
Exercisable at June 30, 2025	27,493	$	13.88	4.7	$	498.09

The aggregate intrinsic value in the above table was calculated as the difference between the closing price of the Company’s Common Stock at June 30, 2025 of $32.00 per share and the exercise price of the stock options that had strike prices below such closing price.

As of June 30, 2025, there was approximately $122 of total unrecognized compensation expense related to the unvested employee stock options, which is expected to be recognized in fiscal year 2025.

Liability classified share-based awards

During the nine months ended June 30, 2025, 35,607 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:


	Number of Options			Weighted Average Exercise Price	Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value (in thousands)
Outstanding balance at September 30, 2024	35,607		$	12.22	4.8	$	375.02
Exercised	(35,607	)	$	12.22	—	$	—
Outstanding balance at June 30, 2025	—		$	—	—	$	—
Exercisable at June 30, 2025	—		$	—	—	$	—

The aggregate intrinsic value in the above table was calculated as the difference between the valuation of Indco’s common stock at September 30, 2024 of $22.75 per share and the exercise price of the stock options that had strike prices below such closing price.

10.

INCOME PER COMMON SHARE

The following table provides a reconciliation of the basic and diluted earnings per share (“EPS”) computations for the three and nine months ended June 30, 2025 and 2024:


		Three Months Ended June 30,					Nine Months Ended June 30,
(in thousands, except per share data)		2025			2024			2025			2024
Income:
Net income (loss)	$	887		$	(191	)	$	2,986		$	304
Preferred stock dividends		(77	)		(85	)		(271	)		(242	)
Non-controlling interest dividends		—			—			(243	)		—
Net income (loss) available to common stockholders	$	810		$	(276	)	$	2,472		$	62

Common Shares:
Basic - weighted average common shares		1,186.4			1,186.4			1,186.4			1,186.4
Effect of dilutive securities:
Stock options		20.2			—			19.7			19.5
Diluted - weighted average common stock		1,206.6			1,186.4			1,206.1			1,205.9

Income per Common Share:
Basic -
Net income (loss)	$	0.75		$	(0.16	)	$	2.52		$	0.25
Preferred stock dividends		(0.07	)		(0.07	)		(0.24	)		(0.20	)
Non-controlling interest dividends		—			—			(0.20	)		—
Net income (loss) available to common stockholders	$	0.68		$	(0.23	)	$	2.08		$	0.05

Diluted -
Net income (loss)	$	0.74		$	(0.16	)	$	2.48		$	0.25
Preferred stock dividends		(0.07	)		(0.07	)		(0.23	)		(0.20	)
Non-controlling interest dividends		—			—			(0.20	)		—
Net income (loss) available to common stockholders	$	0.67		$	(0.23	)	$	2.05		$	0.05

The computation for the diluted number of shares excludes unexercised stock options that are anti-dilutive. There were 22.5 anti-dilutive shares for each of the three- and nine-month periods ended June 30, 2025 and June 30, 2024.

11.

INCOME TAXES

The reconciliation of income tax computed at the Federal statutory rate to the provision for income taxes from continuing operations for the three- and nine-month periods ended June 30, 2025 and 2024 was as follows (in thousands):


	Three Months Ended June 30,						Nine Months Ended June 30,
		2025			2024			2025			2024

Federal taxes at statutory rates	$	(315	)	$	(32	)	$	(891	)	$	(150	)
Permanent differences		(54	)		(184	)		89			(91	)
State and local taxes, net of Federal benefit		(76	)		(127	)		(256	)		(171	)
Total	$	(445	)	$	(343	)	$	(1,058	)	$	(412	)

12.

BUSINESS SEGMENT INFORMATION

As referenced above in Note 1, the Company operates in three reportable segments: Logistics, Life Sciences and Manufacturing.

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

The following tables present selected financial information about the Company’s reportable segments and Corporate for the purpose of reconciling to the consolidated totals for the three and nine months ended June 30, 2025 (in thousands):


For the three months ended June 30, 2025		Consolidated		Logistics		Life Sciences		Manufacturing		Corporate
Revenues	$	49,145	$	43,231	$	3,490	$	2,424	$	—
Forwarding expenses and cost of revenues		33,035		31,259		624		1,152		—
Gross profit		16,110		11,972		2,866		1,272		—
Selling, general and administrative		13,525		9,434		2,062		764		1,265
Amortization of intangible assets		654		—		—		—		654
Income (loss) from operations		1,931		2,538		804		508		(1,919	)
Interest expense		442		289		73		80		—
Identifiable assets		126,032		52,255		13,349		4,453		55,975
Capital expenditures, net of disposals		69		5		45		19		—




For the nine months ended June 30, 2025		Consolidated		Logistics		Life Sciences		Manufacturing		Corporate
Revenues	$	151,230	$	133,361	$	10,639	$	7,230	$	—
Forwarding expenses and cost of revenues		103,407		98,155		1,870		3,382		—
Gross profit		47,823		35,206		8,769		3,848		—
Selling, general and administrative		40,576		28,327		5,979		2,507		3,763
Amortization of intangible assets		1,937		—		—		—		1,937
Income (loss) from operations		5,310		6,879		2,790		1,341		(5,700	)
Interest expense		1,668		1,168		280		220		—
Identifiable assets		126,032		52,255		13,349		4,453		55,975
Capital expenditures, net of disposals		396		31		346		19		—


For the three months ended June 30, 2024	Consolidated		Logistics		Life Sciences		Manufacturing		Corporate
Revenues	46,724	$	40,677	$	3,208	$	2,839	$	—
Forwarding expenses and cost of revenues	31,633		29,725		609		1,299		—
Gross profit	15,091		10,952		2,599		1,540		—
Selling, general and administrative	13,358		9,444		1,812		793		1,309
Amortization of intangible assets	555		—		—		—		555
Income (loss) from operations	1,178		1,508		787		747		(1,864	)
Interest expense	589		426		97		66		—
Identifiable assets	108,566		42,025		12,075		4,374		50,092
Capital expenditures, net of disposals	331		21		302		8		—


For the nine months ended June 30, 2024		Consolidated		Logistics		Life Sciences		Manufacturing		Corporate
Revenues	$	129,881	$	111,991	$	10,213	$	7,677	$	—
Forwarding expenses and cost of revenues		86,822		81,232		2,065		3,525		—
Gross profit		43,059		30,759		8,148		4,152		—
Selling, general and administrative		38,664		27,186		5,307		2,364		3,807
Amortization of intangible assets		1,635		—		—		—		1,635
Income (loss) from operations		2,760		3,573		2,841		1,788		(5,442	)
Interest expense		1,663		1,188		245		230		—
Identifiable assets		108,566		42,025		12,075		4,374		50,092
Capital expenditures, net of disposals		658		47		603		8		—

13.

FAIR VALUE MEASUREMENTS

Recurring Fair Value Measurements

The following table presents the Company’s assets that are measured at fair value on a recurring basis based on the three-level valuation hierarchy (in thousands):


Assets		June 30, 2025	September 30, 2024
Level 1 Investment in Rubicon at fair value	$	2,327	1,518
Level 1 Investment in other marketable securities at fair value		183	56
Total Investment in marketable securities at fair value		2,510	1,574

On August 19, 2022, the Company acquired 1,108,000 shares of the common stock, par value $0.001 per share, of Rubicon at a price per share of $20.00, in a cash tender offer. As of each of June 30, 2025 and September 30, 2024, the Company held 46.6% of the total issued and outstanding shares of Rubicon and reported its investment under the fair value method pursuant to ASC 320, Investments - Debt Securities. 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 provides 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).

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 and recorded a fair value adjustment to its investment in Rubicon of $709, which is included in other income and expense.

The following table sets forth a summary of the changes in the fair value of the Company’s investment in Rubicon, which is measured at fair value on a recurring basis utilizing Level 1 assumptions in its valuation (in thousands):


		June 30, 2025		September 30, 2024
		June 30, 2025		September 30, 2024
Balance beginning of period	$	1,518	$	1,573
Fair value adjustment to Rubicon investment		809		(55	)
Balance end of period	$	2,327	$	1,518

The following table presents the Company’s liabilities that are measured at fair value on a recurring basis based on the three-level valuation hierarchy (in thousands):


Contingent earnout liabilities		June 30, 2025		September 30, 2024
Level 1 Contingent earnout liabilities	$	1,162	$	2,100
Level 3 Contingent earnout liabilities		1,379		1,281
Total	$	2,541	$	3,381

These liabilities relate to the estimated fair value of earnout payments to former ImmunoBioScience Corp. (“IBSC”), ViraQuest, ELFS, and Airschott owners as of June 30, 2025 and September 30, 2024.

On December 1, 2023, in connection with the Purchase Agreement Amendment among Janel Group and the ELFS Sellers described above, the parties agreed to certain modifications fixing the amount of the remaining earnout payments to ELFS in earnout years three and four to $1,078 each year. As a result, the measurement of the earnout liability became a Level 1 fair value measurement based on the present value of the negotiated payments.

On June 5, 2024, the Company completed a business combination whereby it acquired a majority ownership position in Airschott, a non-asset-based freight forwarder and customs broker. As part of the business combination, the Company agreed to purchase the remaining 20% of Airschott stock in three years for deferred consideration of the greater of 20% of 1.25 times the trailing twelve months gross profit of Airschott and $1,200.

The current and non-current portions of the fair value of the contingent earnout liabilities at June 30, 2025 were $1,407 and $1,134, respectively. The current and non-current portions of the fair value of the contingent earnout liabilities at September 30, 2024 were $1,262 and $2,119, 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 1 and Level 3 assumptions in their valuation (in thousands):


		June 30, 2025			September 30, 2024
Balance beginning of period	$	3,381		$	2,330
Fair value of contingent consideration recorded in connection with business combinations		—			1,017
Earnout payment		(1,078	)		(740	)
Fair value adjustment of contingent earnout liabilities		238			774
Balance end of period	$	2,541		$	3,381

The Company determined the fair value of the Level 3 contingent earnout liability using forecasted results through the expected earnout periods. The principal inputs to the approach include expectations of the specific business’s revenues in fiscal years 2024 through 2025 using an appropriate discount rate. Given the use of significant inputs that are not observable in the market, the contingent earnout liability is classified within Level 3 of the fair value hierarchy.

14.

LEASES

The Company determines if an arrangement is a lease at inception. Assets and obligations related to operating leases are included in operating lease right-of-use (“ROU”) assets; current portion of operating lease liability; and operating lease liability, net of current portion in our consolidated balance sheets. Assets and obligations related to finance leases are included in property, technology and equipment, net; current portion of finance lease liability; and finance lease liability, net of current portion in our consolidated balance sheets.

ROU assets represent our right to use an underlying asset for the lease term, and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the incremental borrowing rate based on the information available at commencement date is used in determining the present value of lease payments. We use the implicit rate when readily determinable. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option.

The Company’s agreements with lease and non-lease components are each accounted for as a single lease component.

For leases with an initial term of twelve months or less, the Company elected the exemption from recording ROU assets and lease liabilities for all leases that qualify and records rent expense on a straight-line basis over the lease term.

The Company has operating leases for office and warehouse space in certain locations where it conducts business. As of June 30, 2025, the remaining terms of the Company’s operating leases were between 1 and 104 months and certain lease agreements contain provisions for future rent increases. Payments due under the lease contracts include the minimum lease payments that the Company is obligated to make under the non-cancelable initial terms of the leases as the renewal terms are at the Company’s option and the Company is not reasonably certain to exercise those renewal options at lease commencement.

The components of lease cost for the three- and nine-month periods ended June 30, 2025 and 2024 were as follows (in thousands):


	Three Months Ended June 30,				Nine Months Ended June 30,
		2025		2024		2025		2024
Operating lease cost	$	642	$	644	$	1,943	$	1,857
Short-term lease cost		59		38		208		125
Total lease cost	$	701	$	682	$	2,151	$	1,982

Rent expense for the nine months ended June 30, 2025 and 2024 was $2,151 and $1,982, respectively.

Operating lease ROU assets, current portion of operating lease liabilities and long-term operating lease liabilities reported in the condensed consolidated balance sheets for operating leases as of June 30, 2025 were $7,956, $2,331 and $6,296, respectively.

Operating lease ROU assets, current portion of operating lease liabilities and long-term operating lease liabilities reported in the condensed consolidated balance sheets for operating leases as of September 30, 2024 were $8,621, $2,419 and $6,585, respectively.

As of June 30, 2025 and September 30, 2024, the weighted-average remaining lease term and the weighted-average discount rate related to the Company’s operating leases were 4.7 years and 6.08% and 5.3 years and 5.72%, respectively.

Future minimum lease payments under non-cancelable operating leases as of June 30, 2025 were as follows (in thousands):


2026	$	2,521
2027		2,276
2028		2,234
2029		1,378
2030		517
Thereafter		965
Total undiscounted lease payments		9,891
Less imputed interest		(1,264	)
Total lease obligations	$	8,627

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with our unaudited interim condensed consolidated financial statements and related notes thereto as of and for the nine months ended June 30, 2025, which have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”). Amounts presented in this section are in thousands, except share and per share data.

As used throughout this Report, “we,” “us”, “our,” “Janel,” “the Company,” “Registrant” and similar words refer to Janel Corporation and its subsidiaries.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (the “Report”) contains certain statements that are, or may deemed to be, “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and that reflect management’s current expectations with respect to our operations, performance, financial condition, and other developments. These forward – looking statements may generally be identified using the words “may,” “will,” “intends,” “plans,” projects,” “believes,” “should,” “expects,” “predicts,” “anticipates,” “estimates,” and similar expressions or the negative of these terms or other comparable terminology. These statements are necessarily estimates reflecting management’s best judgment based upon current information and involve several risks, uncertainties and assumptions. We caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made, and readers are advised that various factors, including, but not limited to, those set forth elsewhere in this Report, could affect our financial performance and could cause our actual results for future periods to differ materially from those anticipated or projected. While it is impossible to identify all such factors, such factors include, but are not limited to, our strategy of expanding our business through acquisitions of other businesses; we may be required to record a significant charge to earnings related to the impairment of acquired assets; we may fail to realize the expected benefits or strategic objectives of any acquisition, or that we spend resources exploring acquisitions that are not consummated; risks associated with litigation, including contingent auto liability and insurance coverage, and indemnification claims and other unforeseen claims and liabilities that may arise from an acquisition; changes in tax rates, laws or regulations and our acquired companies and subsidiaries’ ability to utilize anticipated tax benefits; the impact of rising interest rates on our investments, business and operations; conflicts of interest with the minority shareholders of our business; we may not have sufficient working capital to continue operations; we may lose customers who are not obligated to long-term contracts to transact with us; instability in the financial markets; changes or developments in U.S. laws or policies (including the imposition of tariffs and any resulting counter-tariffs as well as reductions in federal government funding, such as budget cuts for the National Institutes of Health and funding reductions for universities); competition from companies with greater financial resources and from companies that operate in areas in which we plan to expand; our dependence on technically skilled employees; impacts from climate change, including the increased focus by third-parties on sustainability issues and our ability to comply therewith; competition from parties who sell their businesses to us and from professionals who cease working for us; the level of our insurance coverage, including related to product and other liability risks; our compliance with applicable privacy, security and data laws; risks related to the diverse platforms and geographies which host our management information and financial reporting systems; our dependence on the availability of cargo space from third parties; the impact of claims arising from transportation of freight by the carriers with which we contract, including an increase in premium costs; higher carrier prices may result in decreased adjusted gross profit; risks related to the classification of owner-operators in the transportation industry; recessions and other economic developments that reduce freight volumes; other events affecting the volume of international trade and international operations; risks arising from our ability to comply with governmental permit and licensing requirements or statutory and regulatory requirements; the impact of seasonal trends and other factors beyond our control on our Logistics business; changes in governmental regulations applicable to our Life Sciences business; the ability of our Life Sciences business to continually produce products that meet high-quality standards such as purity, reproducibility and/or absence of cross-reactivity; the ability of our Life Sciences business to maintain, determine the scope of and defend its and its competitors’ intellectual property rights; the impact of pressures in the life sciences industry to increase the predictability of or reduce healthcare costs; any decrease in the availability, or increase in the cost or supply shortages, of raw materials used by Indco; risks arising from the environmental, health and safety regulations applicable to Indco; the reliance of our Indco business on a single location to manufacture their products; the controlling influence exerted by our officers and directors and one of our stockholders; the unlikelihood that we will issue dividends in the foreseeable future; and risks related to ownership of our common stock, including share price volatility, our ability to issue shares of preferred stock with greater rights than our common stock, the lack of a guaranteed continued public trading market for our common stock, and costs related to maintaining our status as a public company; terrorist attacks and other acts of violence or war and such other factors that may be identified from time to time in our Securities and Exchange Commission (“SEC”) filings. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual outcomes may vary materially from those projected. You should not place undue reliance on any of our forward-looking statements which speak only as of the date they are made. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. For a more detailed discussion of these factors, see our periodic reports filed with the SEC, including our most recent Annual Report on Form 10-K for the fiscal year ended September 30, 2024.

OVERVIEW

Janel Corporation ("Janel," the "Company," or the "Registrant") 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; and attracting and retaining exceptional talent.

Management at the Janel holding company focuses on significant capital allocation decisions, corporate governance and supporting Janel’s subsidiaries where appropriate. Janel expects to grow through its subsidiaries’ organic growth and by completing acquisitions. We plan to either acquire businesses within our existing segments or expand our portfolio into new strategic segments. Our acquisition strategy focuses on reasonably priced companies with strong and capable management teams, attractive existing business economics and stable and predictable earnings power.

Our Business Segments

Logistics

The Company’s Logistics segment is comprised of several 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 revenues in connection with its core services. Accessorial revenues include, but are not limited to, fuel service charges, wait time fees, hazardous cargo fees, labor charges, handling, cartage, bonding and additional labor charges.

On June 5, 2024, the Company completed a business combination whereby it acquired a majority ownership position in Airschott, a non-asset-based freight forwarder and customs broker. At closing, the Company purchased 80% of the outstanding stock of Airschott. The Company also agreed to purchase the remaining 20% of Airschott stock in three years.

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 segment also produces products for other life sciences companies on an original equipment manufacturer basis.

On February 1, 2024, the Company completed a business combination whereby it acquired all of the outstanding stock of ViraQuest Inc., which we include in our Life Sciences segment.

On June 4, 2025, the Company completed a business combination whereby it acquired 80% of the outstanding stock of Biosensis. The Company and the former shareholders of Biosensis have put-call options exercisable on June 4, 2028 for the remaining 20% of outstanding stock.

Manufacturing

The Company’s Manufacturing segment is comprised of Indco, Inc. (“Indco”). Indco is 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.

Investment in Marketable Securities - Rubicon

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 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. The Company owned approximately 46.6% of Rubicon’s total issued and outstanding shares of common stock as of June 30, 2025 and September 30, 2024.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Our Condensed Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles in the United States. These generally accepted accounting principles require management to make estimates and assumptions that affect the reported amounts of assets, liabilities, net sales and expenses during the reporting period.

Our senior management has reviewed the critical accounting policies and estimates with the Audit Committee of our Board of Directors. For a description of the Company’s critical accounting policies and estimates, refer to “Part II—Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Estimates” in our Annual Report on Form 10-K filed with the SEC on December 6, 2024. Critical accounting policies are those that are most important to the presentation of our financial condition, results of operations and cash flows and require management’s most difficult, subjective and complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. If actual results were to differ significantly from estimates made, the reported results could be materially affected. There were no significant changes to our critical accounting policies during the nine months ended June 30, 2025.

NON-GAAP FINANCIAL MEASURES

While we prepare our financial statements in accordance with U.S. GAAP, we also utilize and present certain financial measures, in particular adjusted operating income, which are not based on or included in U.S. GAAP (we refer to these as “non-GAAP financial measures”).

Organic Growth

Our non-GAAP financial measure of organic growth represents revenues and gross profit excluding revenues and gross profit from acquisitions within the preceding 12 months. The organic growth presentation provides useful period-to-period comparison of revenues and gross profit as it excludes revenues and gross profit from acquisitions that would not be included in the comparable prior period.

Adjusted Operating Income

As a result of our acquisition strategy, our net income includes material non-cash charges relating to the amortization of customer-related intangible assets in the ordinary course of business as well as other intangible assets acquired in our acquisitions. Although these charges may increase as we complete more acquisitions, we believe we will be growing the value of our intangible assets such as customer relationships. Because these charges are not indicative of our operations, we believe that adjusted operating income is a useful financial measure for investors because it eliminates the effect of these non-cash costs and provides an important metric for our business that is more representative of the actual results of our operations.

Adjusted operating income (which excludes the non-cash impact of amortization of intangible assets, stock-based compensation and cost recognized on the sale of acquired inventory valuation) is used by management as a supplemental performance measure to assess our business’s ability to generate cash and economic returns.

Adjusted operating income is a non-GAAP measure of income and does not include the effects of preferred stock dividends, interest and taxes.

We believe that organic growth and adjusted operating income provide useful information in understanding and evaluating our operating results in the same manner as management. However, organic growth and adjusted operating income are not financial measures calculated in accordance with U.S. GAAP and should not be considered as a substitute for total revenues, operating income or any other operating performance measures calculated in accordance with U.S. GAAP. Using these non-GAAP financial measures to analyze our business has material limitations because the calculations are based on a subjective determination by management regarding the nature and classification of events and circumstances that users of the financial statements may find significant.

In addition, although other companies in our industries may report measures titled organic growth, adjusted operating income or similar measures, such non-GAAP financial measures may be calculated differently from how we calculate our non-GAAP financial measures, which reduces their overall usefulness as comparative measures. Because of these limitations, you should consider organic growth and adjusted operating income alongside other financial performance measures, including total revenues, operating income and our other financial results presented in accordance with U.S. GAAP.

Results of Operations – Janel Corporation - Three and Nine Months Ended June 30, 2025 and 2024

Our results of operations and period-over-period changes are discussed in the following section. The tables and discussion should be read in conjunction with the accompanying Condensed Consolidated Financial Statements and the notes thereto.

Our consolidated results of operations are as follows (in thousands):


	Three Months Ended June 30,					Nine Months Ended June 30,
		2025		2024			2025		2024
Revenues	$	49,145	$	46,724		$	151,230	$	129,881
Forwarding expenses and cost of revenues		33,035		31,633			103,407		86,822
Gross profit		16,110		15,091			47,823		43,059
Total operating expenses		14,179		13,913			42,513		40,299
Income from operations		1,931		1,178			5,310		2,760
Net income (loss)		887		(191	)		2,986		304
Adjusted operating income	$	2,770	$	1,897		$	7,825	$	4,873

Consolidated revenues for the three months ended June 30, 2025 were $49,145, which was $2,421 or 5.2% higher than the prior year period. Consolidated revenues for the nine months ended June 30, 2025 were $151,230, which was $21,349 or 16.4% higher than the prior year period. The increase in revenues for both the three and nine months ended June 30, 2025 was primarily due to our Logistics and Life Sciences business segments.

Income from operations for the three months ended June 30, 2025 was $1,931 compared with $1,178 in the prior year period. Income from operations for the nine months ended June 30, 2025 was $5,310 compared with $2,760 in the prior year period. The increase in income from operations for both the three and nine months ended June 30, 2025 primarily resulted from higher profits in our Logistics segment.

Net income for the three months ended June 30, 2025 totaled $887, or $0.74 per diluted share, compared to a net loss of $(191), or $(0.16) per diluted share, for the three months ended June 30, 2024. Net income for the nine months ended June 30, 2025 totaled $2,986, or $2.48 per diluted share, compared to net income of $304, or $0.25 per diluted share, for the nine months ended June 30, 2024. The increase in net income for the three and nine months ended June 30, 2025 was largely due to higher profits in our Logistics segment.

Adjusted operating income for the three months ended June 30, 2025 increased to $2,770 versus $1,897 in the prior year period. Adjusted operating income for the nine months ended June 30, 2025 increased to $7,825 versus $4,873 in the prior year period. The increase in adjusted operating income for both the three and nine months ended June 30, 2025 resulted primarily from higher profits in our Logistics segment.

The following table sets forth a reconciliation of operating income to adjusted operating income (in thousands):


		Three Months Ended June 30,				Nine Months Ended June 30,
		2025		2024		2025		2024
Income from operations	$	1,931	$	1,178	$	5,310	$	2,760
Amortization of intangible assets		654		555		1,937		1,635
Stock-based compensation		122		71		367		214
Cost recognized on sale of acquired inventory		63		93		211		264
Adjusted operating income	$	2,770	$	1,897	$	7,825	$	4,873

Results of Operations – Logistics – Three and Nine Months Ended June 30, 2025 and 2024

Our Logistics business helps its clients move and manage freight efficiently to reduce inventories and to increase supply chain speed and reliability. Key services include 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 revenues in connection with its core services. Accessorial revenues include, but are not limited to, fuel service charges, wait time fees, hazardous cargo fees, labor charges, handling, cartage, bonding and additional labor charges.


	Three Months Ended June 30,							Nine Months Ended June 30,
		2025			2024			2025			2024
(in thousands)
Revenues	$	43,231		$	40,677		$	133,361		$	111,991
Forwarding expenses		31,259			29,725			98,155			81,232
Gross profit		11,972			10,952			35,206			30,759
Gross profit margin		27.7	%		26.9	%		26.4	%		27.5	%
Selling, general and administrative expenses		9,434			9,444			28,327			27,186
Income from operations	$	2,538		$	1,508		$	6,879		$	3,573

Revenues

Total revenues for the three months ended June 30, 2025 was $43,231 as compared to $40,677 for the three months ended June 30, 2024, an increase of $2,554, or 6.3%. Total revenues for the nine months ended June 30, 2025 was $133,361 as compared to $111,991 for the nine months ended June 30, 2024, an increase of $21,370 or 19.1%. Revenues in both periods primarily increased due to higher freight rates, the inclusion of acquired revenue from an acquisition and higher demand as customers prepared for anticipated tariff increases.

Gross Profit

Gross profit for the three months ended June 30, 2025 was $11,972, an increase of $1,020, or 9.3%, as compared to $10,952 for the three months ended June 30, 2024. The increase in gross profit for the three months ended June 30, 2025 compared to the prior year period was primarily related to the incremental gross profit from the Airschott acquisition. Excluding the Airschott acquisition, organic growth in gross profit increased 1.6% versus the prior year period. Gross profit in the three months ended June 30, 2025 benefited from customer preparations ahead of anticipated increases in tariffs. Gross profit margin as a percentage of revenues increased to 27.7% for the three months ended June 30, 2025, compared to 26.9% for the prior year period.

Gross profit for the nine months ended June 30, 2025 was $35,206, an increase of $4,447, or 14.5%, as compared to $30,759 for the nine months ended June 30, 2024. The increase in gross profit for the nine months ended June 30, 2025, compared to the prior year period was primarily related to the incremental gross profit from the Airschott acquisition. Excluding the Airschott acquisition, organic growth in gross profit increased 4.7% in the nine months versus the prior year period. Gross profit in the nine months ended June 30, 2025 benefited from customer preparations ahead of anticipated increases in tariffs. Gross profit margin as a percentage of revenue decreased to 26.4% compared to 27.5% for the prior year period, primarily due to higher freight prices resulting in greater forwarding expenses relative to revenues.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the three months ended June 30, 2025 were $9,434, as compared to $9,444 for the three months ended June 30, 2024, remaining in line with the prior year period. Despite the acquisition of Airschott on June 5, 2024, there was a decrease in selling, general and administrative expenses for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024. Selling, general and administrative expenses as a percentage of revenue were 21.8% and 23.2% for the three months ended June 30, 2025 and 2024, respectively. The decrease in selling, general and administrative expenses as a percentage of revenue was primarily due to an increase in revenue caused by higher freight rates, the inclusion of acquired revenue from an acquisition and higher demand as customers prepared for anticipated tariff increases.

Selling, general and administrative expenses for the nine months ended June 30, 2025 were $28,327, as compared to $27,186 for the nine months ended June 30, 2024. This increase of $1,141, or 4.2%, was mainly due to the Airschott acquisition, partially offset by a reduction in various expenses, including personnel costs. Selling, general and administrative expenses as a percentage of revenues were 21.2% and 24.3% of revenues for the nine months ended June 30, 2025 and 2024, respectively. The decrease in selling, general and administrative expenses as a percentage of revenues for the nine-month period was primarily due to an increase in revenue caused by higher freight rates, the inclusion of acquired revenue from an acquisition and higher demand as customers prepared for anticipated tariff increases.

Income from Operations

Income from operations increased to $2,538 for the three months ended June 30, 2025, as compared to $1,508 for the three months ended June 30, 2024, an increase of $1,030, or 68.3%. Operating margin as a percentage of gross profit for the three months ended June 30, 2025 was 21.2% compared to 13.8% in the prior year period.

Income from operations increased to $6,879 for the nine months ended June 30, 2025, as compared to $3,573 for the nine months ended June 30, 2024, an increase of $3,306, or 92.5%. Operating margin as a percentage of gross profit for the nine months ended June 30, 2025 was 19.5% compared to 11.6% in the prior year period. The increase in operating margin for the three- and nine-month periods was primarily the result of greater returns from higher freight rates, the inclusion of acquired revenue from an acquisition and higher demand as customers prepared for anticipated tariff increases.

Results of Operations – Life Sciences – Three and Nine Months Ended June 30, 2025 and 2024

The Company’s Life Sciences segment is comprised of several wholly-owned subsidiaries. The Company’s Life Sciences segment manufactures and distributes antibodies as well as research and diagnostic reagents for, and provides custom services to, academic, non-profit and commercial customers.


		Three Months Ended June 30,						Nine Months Ended June 30,
		2025			2024			2025			2024
(in thousands)
Revenues	$	3,490		$	3,208		$	10,639		$	10,213
Cost of sales		561			521			1,659			1,801
Cost recognized upon sale of acquired inventory		63			88			211			264
Gross profit		2,866			2,599			8,769			8,148
Gross profit margin		82.1	%		81.0	%		82.4	%		79.8	%
Selling, general and administrative expenses		2,062			1,812			5,979			5,307
Income from operations	$	804		$	787		$	2,790		$	2,841

Revenues

Total revenues were $3,490 and $3,208 for the three months ended June 30, 2025 and 2024, respectively, reflecting an increase of $282, or 8.8%, primarily due to increased diagnostic and research reagent sales. Organic growth excluding acquisition revenue increased $243, or 7.6%.

Total revenues were $10,639 and $10,213 for the nine months ended June 30, 2025 and 2024, respectively, reflecting an increase of $426 or 4.2%. Organic growth excluding acquisition revenue increased $340, or 3.3%.

Gross Profit

Gross profit was $2,866 and $2,599 for the three months ended June 30, 2025 and 2024, respectively, an increase of $267, or 10.3%. During the three months ended June 30, 2025 and 2024, gross profit margin was 82.1% and 81.0%, respectively, as product mix improvements and price increases yielded higher margins.

Gross profit was $8,769 and $8,148 for the nine months ended June 30, 2025 and 2024, respectively, an increase of $621, or 7.6%. In the nine months ended June 30, 2025 and 2024, gross profit margin was 82.4% and 79.8%, respectively. Gross profit margin increased as product mix improvements and price increases yielded higher margins.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the Life Sciences segment were $2,062 and $1,812 for the three months ended June 30, 2025 and 2024, respectively. Selling, general and administrative expenses were $5,979 and $5,307 for the nine months ended June 30, 2025 and 2024, respectively. The year-over-year increases for both periods were largely due to additional expenses from acquired business, higher supply costs, and increased throughput.

Income from Operations

Income from operations for the three months ended June 30, 2025 and 2024 was $804 and $787, respectively, an increase of $17, or 2.2%. Income from operations for the nine months ended June 30, 2025 and 2024 was $2,790 and $2,841, respectively, a decrease of $51, or 1.8%.

Results of Operations - Manufacturing – Three and Nine Months Ended June 30, 2025 and 2024

The Company’s Manufacturing segment manufactures and distributes mixing equipment and apparatuses for specific applications within various industries. The customer base is comprised of small- to mid-sized businesses as well as other larger customers for which they fulfill repetitive production orders.


		Three Months Ended June 30,						Nine Months Ended June 30,
		2025			2024			2025			2024
(in thousands)
Revenues	$	2,424		$	2,839		$	7,230		$	7,677
Cost of sales		1,152			1,299			3,382			3,525
Gross profit		1,272			1,540			3,848			4,152
Gross profit margin		52.5	%		54.2	%		53.2	%		54.1	%
Selling, general and administrative expenses		764			793			2,507			2,364
Income from operations	$	508		$	747		$	1,341		$	1,788

Revenues

Total revenues were $2,424 and $2,839 for the three months ended June 30, 2025 and 2024, respectively, a decrease of $415, or 14.6%. Total revenues were $7,230 and $7,677 for the nine months ended June 30, 2025 and 2024, respectively, a decrease of $447, or 5.8%. Total revenues for the three and nine months ended June 30, 2025 primarily declined due to the timing of larger orders versus the respective prior year period.

Gross Profit

Gross profit was $1,272 and $1,540 for the three months ended June 30, 2025 and 2024, respectively, a decrease of $268, or 17.4%. Gross profit margin for the three months ended June 30, 2025 and 2024 was 52.5% and 54.2%, respectively. Gross profit was $3,848 and $4,152 for the nine months ended June 30, 2025 and 2024, respectively, a decrease of $304, or 7.3%, largely as a result of product mix. Gross profit margin for the nine months ended June 30, 2025 and 2024 was 53.2% and 54.1%, respectively.

Selling, General and Administrative Expenses

Selling, general and administrative expenses were $764 and $793 for the three months ended June 30, 2025 and 2024, respectively, a decrease of $29, or 3.7%. Selling, general and administrative expenses were $2,507 and $2,364 for the nine months ended June 30, 2025 and 2024, respectively, an increase of $143 or 6.0%. The increase in selling, general and administrative expenses for the nine months ended June 30, 2025 was reflective of general economic cost increases.

Income from Operations

Income from operations was $508 for the three months ended June 30, 2025 compared to $747 for the three months ended June 30, 2024, representing a 32.0% decrease from the prior year period. Income from operations was $1,341 for the nine months ended June 30, 2025 compared to $1,788 for the nine months ended June 30, 2024, representing a 25.0% decrease from the prior year period, primarily as a result of a decrease in revenues due to timing of larger orders and an increase in costs.

Results of Operations – Corporate and Other – Three and Nine Months Ended June 30, 2025 and 2024

Below is a reconciliation of income from operating segments to net income available to common stockholders.


		Three Months Ended June 30,						Nine Months Ended June 30,
(in thousands)		2025			2024			2025			2024
Total income from operating segments	$	3,850		$	3,042		$	11,010		$	8,202
Corporate expenses		(1,143	)		(1,238	)		(3,396	)		(3,593	)
Amortization of intangible assets		(654	)		(555	)		(1,937	)		(1,635	)
Stock-based compensation - Corporate		(122	)		(71	)		(367	)		(214	)
Total corporate expenses		(1,919	)		(1,864	)		(5,700	)		(5,442	)
Interest expense		(442	)		(589	)		(1,668	)		(1,663	)
Other expense		(157	)		(437	)		402			(381	)
Net income before taxes		1,332			152			4,044			716
Income tax expense		(445	)		(343	)		(1,058	)		(412	)
Net income		887			(191	)		2,986			304
Preferred stock dividends		(77	)		(85	)		(271	)		(242	)
Non-controlling interest dividends		—			—			(243	)		—
Net income available to common stockholders	$	810		$	(276	)	$	2,472		$	62

Total Corporate Expenses

Total Corporate expenses, which includes amortization of intangible assets, stock-based compensation and merger and acquisition expenses, increased by $55, or 3.0%, to $1,919 for the three months ended June 30, 2025 as compared to $1,864 for the three months ended June 30, 2024. Total Corporate expenses increased by $258, or 4.7%, to $5,700 for the nine months ended June 30, 2025 as compared to $5,442 for the nine months ended June 30, 2024. The increase in total corporate expenses in both periods was primarily due to higher stock-based compensation and higher amortization expense. We incur merger and acquisition deal-related expenses and intangible amortization at the Corporate level.

Interest Expense

Interest expense for the consolidated company decreased $147, or 25.0%, to $442 for the three months ended June 30, 2025 from $589 for the three months ended June 30, 2024. The decrease in interest expense for the three months ended June 30, 2025 was primarily due to lower average debt balances. Interest expense for the consolidated company increased by $5, or 0.3%, to $1,668 for the nine months ended June 30, 2025 from $1,663 for the nine months ended June 30, 2024.

Income Tax Expense

On a consolidated basis, the Company recorded an income tax expense of $445 for the three months ended June 30, 2025, as compared to an income tax expense of $343 for the three months ended June 30, 2024. On a consolidated basis, the Company recorded an income tax expense of $1,058 for the nine months ended June 30, 2025, as compared to an income tax expense of $412 for the nine months ended June 30, 2024.

Preferred Stock Dividends

Preferred stock dividends include any dividends accrued on the Company’s Series C Cumulative Preferred Stock. For the three months ended June 30, 2025 and 2024, preferred stock dividends were $77 and $85, respectively. For the nine months ended June 30, 2025 and 2024, preferred stock dividends were $271 and $242, respectively.

Non-Controlling Interest Dividends

Non-controlling interest dividends include the dividends accrued and paid to the non-controlling interest of Indco (the “Non-controlling interest dividends”). For the nine months ended June 30, 2025, Non-controlling interest dividends were $243.

Net Income

Net income was $887, or $0.74 per diluted share, for the three months ended June 30, 2025 compared to a net loss of $(191), or $(0.16) per diluted share, for the three months ended June 30, 2024. The increase in net income for the three months ended June 30, 2025 was largely due to stronger revenues and profits across the Logistics and Life Sciences segments.

Net income was $2,986, or $2.48 per diluted share, for the nine months ended June 30, 2025 compared to net income of $304, or $0.25 per diluted share, for the nine months ended June 30, 2024. The increase in net income for the nine months ended June 30, 2025 was largely due to stronger revenues in the Logistics segment.

Net Income Available to Common Stockholders

Net income available to common stockholders was $810, or $0.67 per diluted share, for the three months ended June 30, 2025 compared to net loss available to common stockholders of $(276), or $(0.23) per diluted share, for the three months ended June 30, 2024. The increase in net income available to common stockholders for the three months ended June 30, 2025 was the result of stronger revenues and profits across the Logistics and Life Sciences segments. Net income available to common stockholders was $2,472, or $2.05 per diluted share, for the nine months ended June 30, 2025 compared to net income available to common stockholders of $62, or $0.05 per diluted share, for the nine months ended June 30, 2024. The increase in net income available to common stockholders for the nine months ended June 30, 2025 was the result of stronger revenues in the Logistics and Life Sciences segments, partially offset by increases in non-controlling interest dividends.

LIQUIDITY AND CAPITAL RESOURCES

General

Our ability to satisfy liquidity requirements—including meeting debt obligations and funding working capital, day-to-day operating expenses, and capital expenditures—depends upon future performance, which is subject to general economic conditions, competition and other factors, some of which are beyond our control. Our Logistics segment depends on commercial credit facilities to fund day-to-day operations as there is a difference between the timing of collection cycles and the timing of payments to vendors.

As a customs broker, our Logistics segment makes significant cash advances for a select group of our credit-worthy customers. These cash advances are for customer obligations such as the payment of duties and taxes to customs authorities primarily in the United States. Increases in duty rates could result in increases in the amounts we advance on behalf of our customers. Cash advances are a “pass through” and are not recorded as a component of revenues and expenses. The billings of such advances to customers are accounted for as a direct increase in accounts receivable from the customer and a corresponding increase in accounts payable to governmental customs authorities. These “pass through” billings can influence our traditional credit collection metrics.

For customers that meet certain criteria, we have agreed to extend payment terms beyond our customary terms. Management believes that it has established effective credit control procedures and has historically experienced relatively insignificant collection problems. Our subsidiaries depend on commercial credit facilities to fund day-to-day operations as there is a difference between the timing of collection cycles and the timing of payments to vendors. Generally, we do not make significant capital expenditures.

Our cash flow performance for the 2025 fiscal year may not necessarily be indicative of future cash flow performance.

Cash flows from operating activities

Net cash provided by operating activities was $17,632 for the nine months ended June 30, 2025, versus $6,354 provided by operating activities for the nine months ended June 30, 2024. The increase in cash provided by operations for the nine months ended June 30, 2025 compared to the prior year period was primarily due to working capital benefits from the timing of duty collections on behalf of our customers and an increase in net income of $2,682.

Cash flows from investing activities

Net cash used in investing activities totaled $4,368 for the nine months ended June 30, 2025, versus $5,193 for the nine months ended June 30, 2024. We used $2,555 for the acquisition of Biosensis, $197 in additional purchase price relating to the Airschott acquisition, $1,078 in earnout payments, and $396 for the acquisition of property and equipment for the nine months ended June 30, 2025, compared to $3,795 for the acquisitions of Airschott and ViraQuest, $740 in earnout payments, and $658 for the acquisition of property and equipment for the nine months ended June 30, 2024.

Cash flows from financing activities

Net cash used in financing activities was $11,245 for the nine months ended June 30, 2025, versus net cash used in financing activities of $318 for the nine months ended June 30, 2024. The change in net cash used in financing activities was primarily due to debt reduction, dividends paid to preferred stockholders and dividends paid to non-controlling interest.

Off-Balance Sheet Arrangements

As of June 30, 2025, we had no off-balance sheet arrangements or obligations.

ITEM 4. CONTROLS AND PROCEDURES

The Company maintains disclosure controls and procedures designed to ensure that information required to be disclosed in reports filed under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the specified time periods, and that such information is accumulated and communicated to management, including our Principal Executive Officer and Principal Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

Our management, with the participation of our Principal Executive Officer and our Principal Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of June 30, 2025, the end of the period covered by this Quarterly Report on Form 10-Q. Based on such evaluation, our Principal Executive Officer and our Principal Financial Officer have concluded that as of June 30, 2025, our disclosure controls and procedures are designed at a reasonable assurance level and are effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the SEC, and that such information is accumulated and communicated to our management, including our Principal Executive Officer and our Principal Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

There has been no change in the Company’s overall internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended June 30, 2025 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Janel is occasionally subject to claims and lawsuits which typically arise in the normal course of business. While the outcome of these claims cannot be predicted with certainty, management does not believe that the outcome of any of these legal matters will have a material adverse effect on the Company’s business, results of operations, financial condition or cash flows.

ITEM 1A. RISK FACTORS

For a discussion of the Company’s potential risks or uncertainties, please see “Part I—Item 1A—Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended September 30, 2024. There have been no material changes to the risk factors disclosed in Part I—Item 1A of the Company’s 2024 Annual Report.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

There were no unregistered sales of equity securities during the nine months ended June 30, 2025. In addition, there were no shares of Common Stock purchased by us during the nine months ended June 30, 2025.

ITEM 6. EXHIBIT INDEX


31.1	Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer (filed herewith).
31.2	Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer (filed herewith).
32.1	Section 1350 Certification of Principal Executive Officer (filed herewith).
32.2	Section 1350 Certification of Chief Financial Officer (filed herewith).
101	Interactive data files providing financial information from the Company’s Quarterly Report on Form 10-Q for the three and nine months ended June 30, 2025 and 2024 in Inline XBRL pursuant to Rule 405 of Regulation S-T: (i) Condensed Consolidated Balance Sheets as of June 30, 2025 and September 30, 2024, (ii) Condensed Consolidated Statements of Operations for the three and nine months ended June 30, 2025 and 2024, (iii) Condensed Consolidated Statement of Changes in Stockholders’ Equity for the three and nine months June 30, 2025 and 2024, (iv) Condensed Consolidated Statements of Cash Flows for the nine months ended June 30, 2025 and 2024, and (v) Notes to Condensed Consolidated Financial Statements.
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in the Interactive Data Files submitted as Exhibit 101) (filed herewith).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


Dated: August 1, 2025	JANEL CORPORATION
	(Registrant)

	/s/ Darren C. Seirer
	Darren C. Seirer
	Chairman, President and Chief Executive Officer
	(Principal Executive Officer)

Dated: August 1, 2025	/s/ Joseph R. Ferrara
	Joseph R. Ferrara
	Chief Financial Officer, Treasurer and Secretary
	(Principal Financial Officer)