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) |
Title of each class | Trading symbols(s) | Name of each exchange on which registered | ||
None | None | None |
Large accelerated filer ☐ | Accelerated filer | ☐ |
Non-accelerated filer ☐ | Smaller reporting company | ☒ |
Emerging growth company | ☐ |
Page | |||
3 | |||
Item 1. | 3 | ||
3 | |||
4 | |||
5 | |||
6 | |||
7 | |||
Item 2. | 19 | ||
Item 4. | |||
28 | |||
Item 1. | 28 | ||
Item 1A. | 28 | ||
Item 2. | 28 | ||
Item 5. | Other Information | 28 | |
Item 6. | |||
ITEM 1. | FINANCIAL STATEMENTS |
(Unaudited) December 31, 2021 | September 30, 2021 | |||||||
ASSETS | ||||||||
Current Assets: | ||||||||
Cash | $ | 5,186 | $ | 6,234 | ||||
Accounts receivable, net of allowance for doubtful accounts of $945 and $812, respectively | 57,161 | 52,312 | ||||||
Inventory, net | 3,521 | 3,227 | ||||||
Prepaid expenses and other current assets | 2,318 | 3,002 | ||||||
Total current assets | 68,186 | 64,775 | ||||||
Property and Equipment, net | 5,038 | 4,977 | ||||||
Other Assets: | ||||||||
Intangible assets, net | 23,664 | 24,173 | ||||||
Goodwill | 18,486 | 18,486 | ||||||
Operating lease right of use asset | 6,353 | 2,936 | ||||||
Security deposits and other long-term assets | 510 | 577 | ||||||
Total other assets | 49,013 | 46,172 | ||||||
Total assets | $ | 122,237 | $ | 115,924 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current Liabilities: | ||||||||
Line of credit | $ | 23,842 | $ | 29,637 | ||||
Accounts payable – trade | 45,851 | 37,243 | ||||||
Accrued expenses and other current liabilities | 4,886 | 6,311 | ||||||
Dividends payable | 2,638 | 2,427 | ||||||
Current portion of earnout | 1,054 | 1,054 | ||||||
Current portion of deferred acquisition payments | 190 | 188 | ||||||
Current portion of subordinated promissory note-related party | 500 | 550 | ||||||
Current portion of long-term debt | 872 | 868 | ||||||
Current portion of operating lease liabilities | 1,797 | 1,281 | ||||||
Total current liabilities | 81,630 | 79,559 | ||||||
Other Liabilities: | ||||||||
Long-term debt | 4,450 | 4,744 | ||||||
Long-term portion of earnout | 2,546 | 2,546 | ||||||
Subordinated promissory notes-related party | 5,404 | 5,525 | ||||||
Long-term portion of deferred acquisition payments | 185 | 183 | ||||||
Mandatorily redeemable non-controlling interest | 841 | 783 | ||||||
Deferred income taxes | 2,432 | 2,299 | ||||||
Long-term operating lease liabilities | 4,708 | 1,751 | ||||||
Other liabilities | 331 | 415 | ||||||
Total other liabilities | 20,897 | 18,246 | ||||||
Total liabilities | 102,527 | 97,805 | ||||||
Stockholders' Equity: | ||||||||
Preferred Stock, $0.001 par value; 100,000 shares authorized | ||||||||
Series B 5,700 shares authorized, 31 shares issued and outstanding | 0 | 0 | ||||||
Series C 30,000 shares authorized and 20,960 shares issued and 20,960 outstanding at December 31, 2021 and September 30, 2021, liquidation value of $13,118 and $12,907 at December 31, 2021 and September 30, 2021, respectively | 0 | 0 | ||||||
Common stock, $0.001 par value; 4,500,000 shares authorized, 979,707 issued and 959,707 outstanding as of December 31, 2021 and 962,207 issued and 942,207 outstanding as of September 30, 2021 | 1 | 1 | ||||||
Paid-in capital | 14,741 | 14,838 | ||||||
Common Treasury stock, at cost, 20,000 shares | (240 | ) | (240 | ) | ||||
Accumulated earnings | 5,208 | 3,520 | ||||||
Total stockholders' equity | 19,710 | 18,119 | ||||||
Total liabilities and stockholders' equity | $ | 122,237 | $ | 115,924 |
December 31, 2022 | September 30, 2022 | |||||||
ASSETS | ||||||||
Current Assets: | ||||||||
Cash | $ | 4,155 | $ | 6,591 | ||||
Accounts receivable, net of allowance for doubtful accounts | 42,598 | 57,077 | ||||||
Inventory, net | 4,979 | 4,802 | ||||||
Prepaid expenses and other current assets | 2,800 | 3,423 | ||||||
Total current assets | 54,532 | 71,893 | ||||||
Property and Equipment, net | 5,004 | 5,044 | ||||||
Other Assets: | ||||||||
Intangible assets, net | 24,389 | 22,420 | ||||||
Goodwill | 19,576 | 18,622 | ||||||
Investment in marketable securities at fair value | 1,972 | 2,371 | ||||||
Operating lease right of use asset | 5,600 | 5,660 | ||||||
Security deposits and other long-term assets | 491 | 522 | ||||||
Total other assets | 52,028 | 49,595 | ||||||
Total assets | $ | 111,564 | $ | 126,532 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current Liabilities: | ||||||||
Lines of credit | $ | 21,320 | $ | 26,396 | ||||
Accounts payable - trade | 35,323 | 44,960 | ||||||
Accrued expenses and other current liabilities | 6,186 | 7,194 | ||||||
Dividends payable | 1,816 | 1,745 | ||||||
Current portion of earnout | 1,892 | 1,664 | ||||||
Current portion of long-term debt | 640 | 639 | ||||||
Current portion of deferred acquisition payments | 440 | 188 | ||||||
Current portion of subordinated promissory note-related party | 825 | 425 | ||||||
Current portion of operating lease liabilities | 1,729 | 1,825 | ||||||
Total current liabilities | 70,171 | 85,036 | ||||||
Other Liabilities: | ||||||||
Long-term debt | 7,176 | 7,519 | ||||||
Long-term portion of earnout | 3,288 | 2,916 | ||||||
Subordinated promissory notes-related party | 4,864 | 5,382 | ||||||
Mandatorily redeemable non-controlling interest | 430 | 430 | ||||||
Deferred income taxes | 2,526 | 2,541 | ||||||
Long-term operating lease liabilities | 4,053 | 4,001 | ||||||
Other liabilities | 390 | 380 | ||||||
Total other liabilities | 22,727 | 23,169 | ||||||
Total liabilities | 92,898 | 108,205 | ||||||
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 December 31, 2022 and September 30, 2022, liquidation value of $7,500 and $7,429 at December 31, 2022 and September 30, 2022, respectively | — | — | ||||||
Common stock, $0.001 par value; 4,500,000 shares authorized, 1,206,354 issued and 1,186,354 outstanding as of December 31, 2022 and September 30, 2022, respectively | 1 | 1 | ||||||
Paid-in capital | 17,163 | 17,184 | ||||||
Common treasury stock, at cost, 20,000 shares | (240 | ) | (240 | ) | ||||
Accumulated earnings | 1,742 | 1,382 | ||||||
Total stockholders’ equity | 18,666 | 18,327 | ||||||
Total liabilities and stockholders’ equity | $ | 111,564 | $ | 126,532 |
Three Months Ended December 31, | Three Months Ended December 31, | |||||||||||||||
2021 | 2020 | 2022 | 2021 | |||||||||||||
Revenue | $ | 83,314 | $ | 26,478 | $ | 57,044 | $ | 83,314 | ||||||||
Forwarding expenses and cost of revenues | 67,825 | 20,029 | ||||||||||||||
Forwarding expenses and cost of revenue | 42,127 | 67,825 | ||||||||||||||
Gross profit | 15,489 | 6,449 | 14,917 | 15,489 | ||||||||||||
Cost and Expenses: | ||||||||||||||||
Selling, general and administrative | 12,338 | 5,709 | 13,011 | 12,338 | ||||||||||||
Amortization of intangible assets | 509 | 251 | 526 | 509 | ||||||||||||
Total Costs and Expenses | 12,847 | 5,960 | 13,537 | 12,847 | ||||||||||||
Income from Operations | 2,642 | 489 | 1,380 | 2,642 | ||||||||||||
Other Items: | ||||||||||||||||
Interest expense | (279 | ) | (119 | ) | (474 | ) | (279 | ) | ||||||||
Unrealized loss on marketable securities | (399 | ) | — | |||||||||||||
Income Before Income Taxes | 2,363 | 370 | 507 | 2,363 | ||||||||||||
Income tax expense | (675 | ) | (115 | ) | (147 | ) | (675 | ) | ||||||||
Net Income | 1,688 | 255 | 360 | 1,688 | ||||||||||||
Preferred stock dividends | (211 | ) | (174 | ) | (72 | ) | (211 | ) | ||||||||
Net Income Available to Common Stockholders | $ | 1,477 | $ | 81 | $ | 288 | $ | 1,477 | ||||||||
Net income per share | ||||||||||||||||
Net Income per share | ||||||||||||||||
Basic | $ | 1.76 | $ | 0.27 | $ | 0.30 | $ | 1.76 | ||||||||
Diluted | $ | 1.66 | $ | 0.26 | $ | 0.30 | $ | 1.66 | ||||||||
Net income per share attributable to common stockholders: | ||||||||||||||||
Basic | $ | 1.54 | $ | 0.09 | $ | 0.24 | $ | 1.54 | ||||||||
Diluted | $ | 1.45 | $ | 0.08 | $ | 0.24 | $ | 1.45 | ||||||||
Weighted average number of shares outstanding: | ||||||||||||||||
Basic | 959.1 | 935.9 | 1,186.3 | 959.1 | ||||||||||||
Diluted | 1,018.1 | 966.8 | 1,208.2 | 1,018.1 |
PREFERRED STOCK | COMMON STOCK | PAID-IN CAPITAL | COMMON TREASURY STOCK | ACCUMULATED EARNINGS (DEFICIT) | TOTAL EQUITY | PREFERRED STOCK | COMMON STOCK | PAID-IN CAPITAL | COMMON TREASURY STOCK | ACCUMULATED EARNINGS | TOTAL EQUITY | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SHARES | $ | SHARES | $ | $ | SHARES | $ | $ | $ | SHARES | $ | SHARES | $ | $ | SHARES | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance - September 30, 2021 | 20,991 | $ | 0 | 962,207 | $ | 1 | $ | 14,838 | 20,000 | $ | (240 | ) | $ | 3,520 | $ | 18,119 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance - September 30, 2022 | 11,368 | $ | — | 1,206,354 | $ | 1 | $ | 17,184 | 20,000 | $ | (240 | ) | $ | 1,382 | $ | 18,327 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Income | — | 0 | — | 0 | 0 | — | 0 | 1,688 | 1,688 | — | — | — | — | — | — | — | 360 | 360 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dividends to preferred stockholders | — | 0 | — | 0 | (211 | ) | — | 0 | 0 | (211 | ) | — | — | — | — | (72 | ) | — | — | — | (72 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | 0 | — | 0 | 29 | — | 0 | 0 | 29 | — | — | — | — | 51 | — | — | — | 51 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock options exercise | 0 | 0 | 17,500 | 0 | 85 | 0 | 0 | 0 | 85 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance - December 31, 2021 | 20,991 | $ | 0 | 979,707 | $ | 1 | $ | 14,741 | 20,000 | $ | (240 | ) | $ | 5,208 | $ | 19,710 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance - September 30, 2020 | 19,791 | 0 | 918,652 | $ | 1 | $ | 14,604 | 20,000 | $ | (240 | ) | $ | (1,683 | ) | $ | 12,682 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Income | — | 0 | — | 0 | 0 | — | 0 | 255 | 255 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dividends to preferred stockholders | — | 0 | — | 0 | (174 | ) | — | 0 | 0 | (174 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | 0 | — | 0 | 10 | — | 0 | 0 | 10 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock options exercise | 0 | 0 | 2,502 | 0 | 21 | 0 | 0 | 0 | 21 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance – December 31, 2020 | 19,791 | $ | 0 | 921,154 | $ | 1 | $ | 14,461 | 20,000 | $ | (240 | ) | $ | (1,428 | ) | $ | 12,794 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance - December 31, 2022 | 11,368 | $ | — | 1,206,354 | $ | 1 | $ | 17,163 | 20,000 | $ | (240 | ) | $ | 1,742 | $ | 18,666 |
PREFERRED STOCK | COMMON STOCK | PAID-IN CAPITAL | COMMON TREASURY STOCK | ACCUMULATED EARNINGS (DEFICIT) | TOTAL EQUITY | |||||||||||||||||||||||||||||||
SHARES | $ | SHARES | $ | $ | SHARES | $ | $ | $ | ||||||||||||||||||||||||||||
Balance - September 30, 2021 | 20,991 | $ | — | 962,207 | $ | 1 | $ | 14,838 | 20,000 | $ | (240 | ) | $ | 3,520 | $ | 18,119 | ||||||||||||||||||||
Net Income | — | — | — | — | — | — | — | 1,688 | 1,688 | |||||||||||||||||||||||||||
Dividends to preferred stockholders | — | — | — | — | (211 | ) | — | — | — | (211 | ) | |||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | 29 | — | — | — | 29 | |||||||||||||||||||||||||||
Stock option exercise | — | — | 17,500 | — | 85 | — | — | — | 85 | |||||||||||||||||||||||||||
Balance - December 31, 2021 | 20,991 | $ | — | 979,707 | $ | 1 | $ | 14,741 | 20,000 | $ | (240 | ) | $ | 5,208 | $ | 19,710 |
Three Months Ended December 31, | Three Months Ended December 31, | |||||||||||||||
2021 | 2020 | 2022 | 2021 | |||||||||||||
Cash Flows From Operating Activities: | ||||||||||||||||
Net income | $ | 1,688 | $ | 255 | $ | 360 | $ | 1,688 | ||||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||||||||||
Provision for (recovery of) uncollectible accounts | 102 | (32 | ) | |||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||||
(Recovery of) Provision for uncollectible accounts | (71 | ) | 102 | |||||||||||||
Depreciation | 107 | 86 | 121 | 107 | ||||||||||||
Deferred income tax provision | 133 | 86 | ||||||||||||||
Deferred income provision | (15 | ) | 133 | |||||||||||||
Amortization of intangible assets | 509 | 251 | 526 | 509 | ||||||||||||
Amortization of acquired inventory valuation | 171 | 214 | 90 | 171 | ||||||||||||
Amortization of loan costs | 2 | 2 | 4 | 2 | ||||||||||||
Stock-based compensation | 40 | 24 | 61 | 40 | ||||||||||||
Changes in fair value of mandatorily redeemable noncontrolling interest | 58 | 86 | ||||||||||||||
Unrealized loss on marketable securities | 399 | — | ||||||||||||||
Change in fair value of mandatorily redeemable noncontrolling interest | — | 58 | ||||||||||||||
Changes in operating assets and liabilities, net of effects of acquisitions: | ||||||||||||||||
Accounts receivable | (4,952 | ) | (1,857 | ) | 14,656 | (4,952 | ) | |||||||||
Inventory | (464 | ) | (150 | ) | 84 | (464 | ) | |||||||||
Prepaid expenses and other current assets | 684 | (326 | ) | 623 | 684 | |||||||||||
Security deposits and other long-term assets | 67 | (40 | ) | |||||||||||||
Security deposits and other long term assets | 31 | 67 | ||||||||||||||
Accounts payable and accrued expenses | 7,172 | 607 | (11,115 | ) | 7,172 | |||||||||||
Other liabilities | (26 | ) | (18 | ) | 26 | (26 | ) | |||||||||
Net cash provided by (used in) operating activities | 5,291 | (812 | ) | |||||||||||||
Net cash provided by operating activities | 5,780 | 5,291 | ||||||||||||||
Cash Flows From Investing Activities: | ||||||||||||||||
Acquisition of property and equipment, net of disposals | (169 | ) | (55 | ) | (80 | ) | (169 | ) | ||||||||
Acquisitions, net of cash acquired | 0 | (2,806 | ) | |||||||||||||
Acquisition | (2,847 | ) | — | |||||||||||||
Net cash used in investing activities | (169 | ) | (2,861 | ) | (2,927 | ) | (169 | ) | ||||||||
Cash Flows From Financing Activities: | ||||||||||||||||
Repayments of term loan | (292 | ) | (206 | ) | ||||||||||||
Proceeds from stock options exercise | 85 | 21 | ||||||||||||||
Line of credit, (payments) proceeds, net | (5,795 | ) | 2,380 | |||||||||||||
Repayment of subordinated promissory notes | (168 | ) | (39 | ) | ||||||||||||
Net cash (used in) provided by financing activities | (6,170 | ) | 2,156 | |||||||||||||
Rrepayments of term loan | (347 | ) | (292 | ) | ||||||||||||
Proceeds from stock option exercise | — | 85 | ||||||||||||||
Lines of credit payments, net | (5,076 | ) | (5,795 | ) | ||||||||||||
Issuance (repayment) of subordinated promissory notes | 134 | (168 | ) | |||||||||||||
Net cash used in financing activities | (5,289 | ) | (6,170 | ) | ||||||||||||
Net decrease in cash | (1,048 | ) | (1,517 | ) | (2,436 | ) | (1,048 | ) | ||||||||
Cash at beginning of the period | 6,234 | 3,349 | 6,591 | 6,234 | ||||||||||||
Cash at end of period | $ | 5,186 | $ | 1,832 | $ | 4,155 | $ | 5,186 | ||||||||
Supplemental Disclosure of Cash Flow Information: | ||||||||||||||||
Cash paid during the period for: | ||||||||||||||||
Interest | $ | 194 | $ | 99 | $ | 380 | $ | 194 | ||||||||
Income taxes | $ | 10 | $ | 12 | $ | 9 | $ | 10 | ||||||||
Non-cash investing activities: | ||||||||||||||||
Subordinated promissory notes of ICT | $ | 0 | $ | 1,850 | ||||||||||||
Contingent earn-out acquisition | $ | 600 | $ | — | ||||||||||||
Due to former IBS owner | $ | 455 | $ | — | ||||||||||||
Non-cash financing activities: | ||||||||||||||||
Dividends declared to preferred stockholders | $ | 211 | $ | 174 | $ | 72 | $ | 211 |
1. | BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES |
Three Months Ended December 31, | ||||||||||||||||
Three Months Ended December 31, | Three Months Ended December 31, | 2022 | 2021 | |||||||||||||
Service Type | 2021 | 2020 | ||||||||||||||
Ocean freight | $ | 32,876 | $ | 9,039 | ||||||||||||
Trucking | 21,775 | 4,352 | $ | 22,761 | $ | 21,810 | ||||||||||
Air freight | 13,874 | 6,202 | ||||||||||||||
Ocean | 18,166 | 33,895 | ||||||||||||||
Air | 6,239 | 14,284 | ||||||||||||||
Customs brokerage | 2,434 | 3,755 | ||||||||||||||
Other | 5,330 | 12 | 2,200 | 3,812 | ||||||||||||
Customs brokerage | 3,701 | 2,655 | ||||||||||||||
Total | $ | 77,556 | $ | 22,260 | $ | 51,800 | $ | 77,556 |
2. |
Three Months Ended December 31, 2020 | ||||
Revenue | $ | 44,375 | ||
Income from Operations | $ | 630 | ||
Net Income | $ | 245 | ||
Net Income Available to Common Stockholders | $ | 71 | ||
Net income per share: | ||||
Basic | $ | 0.26 | ||
Diluted | $ | 0.25 | ||
Net income per share attributable to common stockholders: | ||||
Basic | $ | 0.08 | ||
Diluted | $ | 0.07 |
3. | INVENTORY |
December 31, 2021 | September 30, 2021 | December 31, 2022 | September 30, 2022 | |||||||||||||
Finished goods | $ | 860 | $ | 919 | $ | 1,704 | $ | 1,823 | ||||||||
Work-in-process | 944 | 968 | 958 | 763 | ||||||||||||
Raw materials | 1,745 | 1,365 | 2,364 | 2,260 | ||||||||||||
Gross inventory | 3,549 | 3,252 | 5,026 | 4,846 | ||||||||||||
Less – reserve for inventory valuation | (28 | ) | (25 | ) | (47 | ) | (44 | ) | ||||||||
Inventory net | $ | 3,521 | $ | 3,227 | $ | 4,979 | $ | 4,802 |
4. | INTANGIBLE ASSETS |
December 31, 2021 | September 30, 2021 | Life | December 31, 2022 | September 30, 2022 | Life | |||||||||||||
Customer relationships | $ | 23,482 | $ | 23,482 | 12-24 Years | $ | 25,653 | $ | 23,625 | 12-24 Years | ||||||||
Trademarks/names | 4,490 | 4,490 | 1-20 Years | 4,641 | 4,539 | 1-20 Years | ||||||||||||
Trademarks/names | 521 | 521 | Indefinite | 521 | 521 | Indefinite | ||||||||||||
Other | 1,149 | 1,149 | 2-22 Years | 1,545 | 1,180 | 2-22 Years | ||||||||||||
29,642 | 29,642 | 32,360 | 29,865 | |||||||||||||||
Less: Accumulated Amortization | (5,978 | ) | (5,469 | ) | (7,971 | ) | (7,445 | ) | ||||||||||
Intangible assets, net | $ | 23,664 | $ | 24,173 | $ | 24,389 | $ | 22,420 |
December 31, 2021 | September 30, 2021 | December 31, 2022 | September 30, 2022 | |||||||||||||
Logistics | $ | 18,174 | $ | 18,174 | $ | 18,174 | $ | 18,174 | ||||||||
Life Sciences | 3,768 | 3,768 | 6,486 | 3,991 | ||||||||||||
Manufacturing | 7,700 | 7,700 | 7,700 | 7,700 | ||||||||||||
29,642 | 29,642 | 32,360 | 29,865 | |||||||||||||
Less: Accumulated Amortization | (5,978 | ) | (5,469 | ) | (7,971 | ) | (7,445 | ) | ||||||||
Intangible assets, net | $ | 23,664 | $ | 24,173 | $ | 24,389 | $ | 22,420 |
5. | GOODWILL |
December 31, 2021 | September 30, 2021 | December 31, 2022 | September 30, 2022 | |||||||||||||
Logistics | $ | 9,063 | $ | 9,063 | $ | 9,175 | $ | 9,175 | ||||||||
Life Sciences | 4,377 | 4,377 | 5,355 | 4,401 | ||||||||||||
Manufacturing | 5,046 | 5,046 | 5,046 | 5,046 | ||||||||||||
Total | $ | 18,486 | $ | 18,486 | $ | 19,576 | $ | 18,622 |
6. | NOTES PAYABLE – BANKS |
(A) | Santander Bank Facility |
(B) | First Merchants Bank Credit Facility |
December 31, 2021 | September 30, 2021 | |||||||||||||||
(in thousands) | ||||||||||||||||
(in thousands) | December 31, 2022 | September 30, 2022 | ||||||||||||||
Total Debt* | $ | 3,168 | $ | 3,368 | $ | 5,725 | $ | 6,051 | ||||||||
Less Current Portion | (809 | ) | (809 | ) | (574 | ) | (574 | ) | ||||||||
Long Term Portion | $ | 2,359 | $ | 2,559 | ||||||||||||
Long-term Portion | $ | 5,151 | $ | 5,477 |
* | Note: Term Loan |
(C) | First Northern Bank of Dixon |
December 31, 2021 | September 30, 2021 | |||||||||||||||
(in thousands) | ||||||||||||||||
(in thousands) | December 31, 2022 | September 30, 2022 | ||||||||||||||
Total Debt* | $ | 2,154 | $ | 2,244 | $ | 2,091 | $ | 2,107 | ||||||||
Less Current Portion | (63 | ) | (59 | ) | (66 | ) | (65 | ) | ||||||||
Long Term Portion | $ | 2,091 | $ | 2,185 | ||||||||||||
Long-term Portion | $ | 2,025 | $ | 2,042 |
* | Long-term debt under the First Northern Loan Agreement is due in monthly installments of $12 plus monthly interest, at 4.18% per |
7. | SUBORDINATED PROMISSORY NOTES - RELATED PARTY |
December 31, 2021 | September 30, 2021 | |||||||||||||||
(in thousands) | ||||||||||||||||
(in thousands) | December 31, 2022 | September 30, 2022 | ||||||||||||||
Total subordinated promissory notes | $ | 5,904 | $ | 6,075 | $ | 5,689 | $ | 5,807 | ||||||||
Less current portion of subordinated promissory notes | (500 | ) | (550 | ) | (825 | ) | (425 | ) | ||||||||
Long term portion of subordinated promissory notes | $ | 5,404 | $ | 5,525 | $ | 4,864 | $ | 5,382 |
8. | STOCKHOLDERS’ EQUITY |
(in thousands, except share and per share data) |
(A) | Common Stock |
(B) | Preferred Stock |
STOCK-BASED COMPENSATION |
(in thousands, except share and per share data) |
(A) | Stock Options |
• | Dividend yield - We have never paid dividends on our common stock and currently have no plans to do so; therefore, no dividend yield is applied. |
Three Months Ended December 31, 2022 | ||||
Risk-free interest rate | % | |||
Expected option term in years | 5.5-6.5 | |||
Expected volatility | % | |||
Dividend yield | | % | ||
Weighted average grant date fair value | $ | 30.06 - |
Number of Options | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value (in thousands) | |||||||||||||
Outstanding balance at September 30, 2021 | 98,994 | $ | 5.93 | 4.5 | $ | 1,689.38 | ||||||||||
Granted | 10,000 | $ | 23.00 | 9.8 | $ | 0 | ||||||||||
Exercised | (17,500 | ) | $ | 4.87 | — | $ | — | |||||||||
Outstanding balance at December 31, 2021 | 91,494 | $ | 8.00 | 5.1 | $ | 1,463.60 | ||||||||||
Exercisable at December 31, 2021 | 73,998 | $ | 5.88 | 4.1 | $ | 1,341.14 |
Number of Options | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value (in thousands) | |||||||||||||
Outstanding balance at September 30, 2022 | 30,993 | $ | 12.68 | 6.8 | $ | 1,251.45 | ||||||||||
Granted | 10,000 | $ | 53.06 | 9.6 | $ | — | ||||||||||
Outstanding balance at December 31, 2022 | 40,993 | $ | 22.53 | 7.3 | $ | 812.57 | ||||||||||
Exercisable at December 31, 2022 | 21,831 | $ | 9.96 | 5.7 | $ | 631.90 |
Three Months Ended December 31, 2022 | ||||
Risk-free interest rate | ||||
Expected option term in years | ||||
Expected volatility | ||||
Dividend yield | ||||
Weighted average grant date fair value |
Number of Options | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value (in thousands) | |||||||||||||
Outstanding balance at September 30, 2021 | 38,961 | $ | 10.28 | 6.62 | $ | 78.16 | ||||||||||
Granted | 7,018 | $ | 17.16 | 9.75 | $ | 0 | ||||||||||
Exercised | (10,372 | ) | $ | 8.30 | — | $ | — | |||||||||
Outstanding balance at December 31, 2021 | 35,607 | $ | 12.22 | 7.51 | $ | 175.98 | ||||||||||
Exercisable at December 31, 2021 | 21,663 | $ | 10.72 | 6.49 | $ | 139.47 |
Number of Options | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value (in thousands) | |||||||||||||
Outstanding balance at September 30, 2022 | 35,607 | $ | 12.22 | 6.67 | $ | 175.98 | ||||||||||
Granted | 7,018 | $ | 15.20 | 9.75 | $ | — | ||||||||||
Outstanding balance at December 31, 2022 | 42,625 | $ | 12.71 | 7.10 | $ | 119.94 | ||||||||||
Exercisable at December 31, 2022 | 28,613 | $ | 11.40 | 6.00 | $ | 113.20 |
INCOME PER COMMON SHARE |
For the three Months Ended December 31, | Three Months Ended December 31, | |||||||||||||||
2021 | 2020 | |||||||||||||||
(in thousands, except per share data) | 2022 | 2021 | ||||||||||||||
Income: | ||||||||||||||||
Net income | $ | 1,688 | $ | 255 | $ | 360 | $ | 1,688 | ||||||||
Preferred stock dividends | (211 | ) | (174 | ) | (72 | ) | (211 | ) | ||||||||
Net income available to common stockholders | $ | 1,477 | $ | 81 | $ | 288 | $ | 1,477 | ||||||||
Common Shares: | ||||||||||||||||
Basic - weighted average common shares | 959.1 | 935.9 | 1,186.3 | 959.1 | ||||||||||||
Effect of dilutive securities: | ||||||||||||||||
Stock options | 58.7 | 30.6 | 21.9 | 58.7 | ||||||||||||
Convertible preferred stock | 0.3 | 0.3 | — | 0.3 | ||||||||||||
Diluted - weighted average common stock | 1,018.1 | 966.8 | 1,208.2 | 1,018.1 | ||||||||||||
Income per Common Share: | ||||||||||||||||
Basic - | ||||||||||||||||
Net income | $ | 1.76 | $ | 0.27 | $ | 0.30 | $ | 1.76 | ||||||||
Preferred stock dividends | (0.22 | ) | (0.18 | ) | (0.06 | ) | (0.22 | ) | ||||||||
Net income attributable to common stockholders | $ | 1.54 | $ | 0.09 | $ | 0.24 | $ | 1.54 | ||||||||
Diluted - | ||||||||||||||||
Net income | $ | 1.66 | $ | 0.26 | $ | 0.30 | $ | 1.66 | ||||||||
Preferred stock dividends | (0.21 | ) | (0.18 | ) | (0.06 | ) | (0.21 | ) | ||||||||
Net income available to common stockholders | $ | 1.45 | $ | 0.08 | $ | 0.24 | $ | 1.45 |
Three Months Ended December 31, | ||||||||
2022 | 2021 | |||||||
Employee stock options (Note 9) | 22 | 92 | ||||||
22 | 92 |
December 31, | ||||||||
2021 | 2020 | |||||||
Employee stock options | 91.5 | 98.9 | ||||||
Non-employee stock options | 0 | 6.1 | ||||||
Convertible preferred stock | 0.3 | 0.3 | ||||||
91.8 | 105.3 |
INCOME TAXES |
Three Months Ended December 31, | ||||||||
2022 | 2021 | |||||||
Federal taxes at statutory rates | $ | 107 | $ | 496 | ||||
Permanent differences | 1 | 10 | ||||||
State and local taxes, net of Federal benefit | 39 | 169 | ||||||
Total | $ | 147 | $ | 675 |
�� | December 31, 2021 | December 31, 2020 | ||||||
Federal taxes at statutory rates | $ | 496 | $ | 78 | ||||
Permanent differences | 10 | 3 | ||||||
State and local taxes, net of Federal benefit | 169 | 34 | ||||||
Total | $ | 675 | $ | 115 |
BUSINESS SEGMENT INFORMATION |
For the three months ended December 31, 2021 (in thousands) | Consolidated | Logistics | Life Sciences | Manufacturing | Corporate | |||||||||||||||||||||||||||||||||||
Revenues | $ | 83,314 | $ | 77,556 | $ | 3,244 | $ | 2,514 | $ | 0 | ||||||||||||||||||||||||||||||
Forwarding expenses and cost of revenues | 67,825 | 65,610 | 1,001 | 1,214 | 0 | |||||||||||||||||||||||||||||||||||
Gross margin | 15,489 | 11,946 | 2,243 | 1,300 | 0 | |||||||||||||||||||||||||||||||||||
For the three months ended December 31, 2022 (in thousands) | Consolidated | Logistics | Life Sciences | Manufacturing | Corporate | |||||||||||||||||||||||||||||||||||
Revenue | $ | 57,044 | $ | 51,800 | $ | 2,838 | $ | 2,406 | $ | — | ||||||||||||||||||||||||||||||
Forwarding expenses and cost of revenue | 42,127 | 40,267 | 728 | 1,132 | — | |||||||||||||||||||||||||||||||||||
Gross profit | 14,917 | 11,533 | 2,110 | 1,274 | — | |||||||||||||||||||||||||||||||||||
Selling, general and administrative | 12,338 | 9,349 | 1,250 | 729 | 1,010 | 13,011 | 9,528 | 1,510 | 774 | 1,199 | ||||||||||||||||||||||||||||||
Amortization of intangible assets | 509 | 0 | 0 | 0 | 509 | 526 | — | — | — | 526 | ||||||||||||||||||||||||||||||
Income (loss) from operations | 2,642 | 2,597 | 993 | 571 | (1,519 | ) | 1,380 | 2,005 | 600 | 500 | (1,725 | ) | ||||||||||||||||||||||||||||
Interest expense | 279 | 224 | 29 | 26 | 0 | 474 | 334 | 37 | 103 | — | ||||||||||||||||||||||||||||||
Identifiable assets | 122,237 | 64,899 | 10,083 | 4,017 | 43,238 | 111,564 | 49,220 | 11,317 | 4,085 | 46,942 | ||||||||||||||||||||||||||||||
Capital expenditures | $ | 169 | $ | 65 | $ | 102 | $ | 2 | $ | 0 | ||||||||||||||||||||||||||||||
Capital expenditures, net of disposals | 80 | 68 | 10 | 2 | — |
For the three months ended December 31, 2020 (in thousands) | Consolidated | Logistics | Life Sciences | Manufacturing | Corporate | |||||||||||||||
Revenues | $ | 26,478 | $ | 22,260 | $ | 2,349 | $ | 1,869 | $ | 0 | ||||||||||
Forwarding expenses and cost of revenues | 20,029 | 18,395 | 756 | 878 | 0 | |||||||||||||||
Gross margin | 6,449 | 3,865 | 1,593 | 991 | 0 | |||||||||||||||
Selling, general and administrative | 5,709 | 3,374 | 976 | 642 | 717 | |||||||||||||||
Amortization of intangible assets | 251 | 0 | 0 | 0 | 251 | |||||||||||||||
Operating income (loss) | 489 | 491 | 617 | 349 | (968 | ) | ||||||||||||||
Interest expense | 119 | 37 | 28 | 47 | 7 | |||||||||||||||
Identifiable assets | 68,224 | 22,418 | 10,252 | 3,501 | 32,053 | |||||||||||||||
Capital expenditures | $ | 55 | $ | 19 | $ | 24 | $ | 12 | $ | 0 |
For the three months ended December 31, 2021 (in thousands) | Consolidated | Logistics | Life Sciences | Manufacturing | Corporate | |||||||||||||||
Revenue | $ | 83,314 | $ | 77,556 | $ | 3,244 | $ | 2,514 | $ | — | ||||||||||
Forwarding expenses and cost of revenue | 67,825 | 65,610 | 1,001 | 1,214 | — | |||||||||||||||
Gross profit | 15,489 | 11,946 | 2,243 | 1,300 | — | |||||||||||||||
Selling, general and administrative | 12,338 | 9,349 | 1,250 | 729 | 1,010 | |||||||||||||||
Amortization of intangible assets | 509 | — | — | — | 509 | |||||||||||||||
Income (loss) from operations | 2,642 | 2,597 | 993 | 571 | (1,519 | ) | ||||||||||||||
Interest expense | 279 | 224 | 29 | 26 | — | |||||||||||||||
Identifiable assets | 122,237 | 64,899 | 10,083 | 4,017 | 43,238 | |||||||||||||||
Capital expenditures, net of disposals | 169 | | 65 | 102 | 2 | — |
FAIR VALUE MEASUREMENTS |
Level 1 | December 31, 2022 | September 30, 2022 | ||||||
Investment in Rubicon at fair value | $ | 1,972 | $ | 2,371 | ||||
Level 1 Assets | $ | 1,972 | $ | 2,371 |
December 31, 2022 | September 30, 2022 | |||||||
Balance beginning of period | $ | 2,371 | $ | — | ||||
Purchase of Rubicon Investment | — | 22,160 | ||||||
Unrealized loss on Rubicon investment | (399 | ) | (19,789 | ) | ||||
Balance end of period | $ | 1,972 | $ | 2,371 |
Level 3 | December 31, 2021 | September 30, 2021 | December 31, 2022 | September 30, 2022 | ||||||||||||
Contingent earnout liabilities | $ | 3,600 | $ | 3,600 | $ | 5,180 | $ | 4,580 | ||||||||
Level 3 Liabilities | $ | 3,600 | $ | 3,600 | $ | 5,180 | $ | 4,580 |
December 31, 2021 | September 30, 2021 | |||||||
Balance at beginning of period | $ | 3,600 | $ | 0 | ||||
Fair value of contingent consideration recorded in connection with business combinations | 0 | 3,600 | ||||||
Change in fair value of contingent consideration | 0 | 0 | ||||||
Balance at end of period | $ | 3,600 | $ | 3,600 |
December 31, 2022 | September 30, 2022 | |||||||
Balance beginning of period | $ | 4,580 | $ | 3,600 | ||||
Fair value of contingent consideration recorded in connection with business combinations | 600 | 980 | ||||||
Balance end of period | $ | 5,180 | $ | 4,580 |
LEASES |
Three Months Ended December 31, | ||||||||
2022 | 2021 | |||||||
Operating lease cost | $ | 551 | $ | 480 | ||||
Short-term lease cost | 20 | 152 | ||||||
Total lease cost | $ | 571 | $ | 632 |
Three Months Ended December 31,2021 | Three Months Ended December 31,2020 | |||||||
Operating lease cost | $ | 480 | $ | 231 | ||||
Short-term lease cost | 152 | 14 | ||||||
Total lease cost | $ | 632 | $ | 245 |
Year End December 31, 2021 | ||||||||
2022 | $ | 1,798 | ||||||
2023 | 1,441 | $ | 1,759 | |||||
2024 | 1,147 | 1,409 | ||||||
2025 | 853 | 1,005 | ||||||
2026 | 620 | 709 | ||||||
2027 | 723 | |||||||
Thereafter | 1,168 | 566 | ||||||
Total undiscounted loan payments | 7,027 | 6,171 | ||||||
Less: Imputed interest | (522 | ) | ||||||
Less: imputed interest | (389 | ) | ||||||
Total lease obligation | $ | 6,505 | $ | 5,782 |
15. | SUBSEQUENT EVENT |
Three Months Ended December 31, 2021 | Three Months Ended December 31, 2020 | Three Months Ended December 31, | ||||||||||||||
Revenues | $ | 83,314 | $ | 26,478 | ||||||||||||
Forwarding expenses and cost of revenues | 67,825 | 20,029 | ||||||||||||||
(in thousands) | 2022 | 2021 | ||||||||||||||
Revenue | $ | 57,044 | $ | 83,314 | ||||||||||||
Forwarding expenses and cost of revenue | 42,127 | 67,825 | ||||||||||||||
Gross profit | 15,489 | 6,449 | 14,917 | 15,489 | ||||||||||||
Operating expenses | 12,847 | 5,960 | 13,537 | 12,847 | ||||||||||||
Operating income | $ | 2,642 | $ | 489 | ||||||||||||
Income from operations | 1,380 | 2,642 | ||||||||||||||
Net income | $ | 1,688 | $ | 255 | 360 | 1,688 | ||||||||||
Adjusted operating income | $ | 3,362 | $ | 978 | $ | 2,057 | $ | 3,362 |
Three Months Ended December 31, | Three Months Ended December 31, | |||||||||||||||
2021 | 2020 | |||||||||||||||
Operating income | $ | 2,642 | $ | 489 | ||||||||||||
(in thousands) | 2022 | 2021 | ||||||||||||||
Income from operations | $ | 1,380 | $ | 2,642 | ||||||||||||
Amortization of intangible assets | 509 | 251 | 526 | 509 | ||||||||||||
Stock-based compensation | 40 | 24 | 61 | 40 | ||||||||||||
Cost recognized on sale of acquired inventory | 171 | 214 | 90 | 171 | ||||||||||||
Adjusted operating income | $ | 3,362 | $ | 978 | $ | 2,057 | $ | 3,362 |
Three Months Ended December 31, | ||||||||
2021 | 2020 | |||||||
Revenue | $ | 77,556 | $ | 22,260 | ||||
Forwarding expense | 65,610 | 18,395 | ||||||
Gross profit | $ | 11,946 | $ | 3,865 | ||||
Gross profit margin | 15.4 | % | 17.4 | % | ||||
Selling, general and administrative expenses | $ | 9,349 | $ | 3,374 | ||||
Income from operations | $ | 2,597 | $ | 491 |
Three Months Ended December 31, | ||||||||
2022 | 2021 | |||||||
(in thousands) | ||||||||
Revenue | $ | 51,800 | $ | 77,556 | ||||
Forwarding expense | 40,267 | 65,610 | ||||||
Gross profit | 11,533 | 11,946 | ||||||
Gross profit margin | 22.3 | % | 15.4 | % | ||||
Selling, general and administrative expenses | 9,528 | 9,349 | ||||||
Income from operations | $ | 2,005 | $ | 2,597 |
Three Months Ended December 31, | Three Months Ended December 31, | |||||||||||||||
2021 | 2020 | 2022 | 2021 | |||||||||||||
(in thousands) | ||||||||||||||||
Revenue | $ | 3,244 | $ | 2,349 | $ | 2,838 | $ | 3,244 | ||||||||
Cost of sales | 830 | 542 | 638 | 830 | ||||||||||||
Cost recognized upon sale of acquired inventory | 171 | 214 | 90 | 171 | ||||||||||||
Gross profit | $ | 2,243 | $ | 1,593 | 2,110 | 2,243 | ||||||||||
Gross profit margin | 69.1 | % | 67.8 | % | 74.3 | % | 69.1 | % | ||||||||
Selling, general and administrative expenses | $ | 1,250 | $ | 976 | ||||||||||||
Selling, general and administrative | 1,510 | 1,250 | ||||||||||||||
Income from operations | $ | 993 | $ | 617 | $ | 600 | $ | 993 |
Three Months Ended December 31, | Three Months Ended December 31, | |||||||||||||||
2021 | 2020 | 2022 | 2021 | |||||||||||||
(in thousands) | ||||||||||||||||
Revenue | $ | 2,514 | $ | 1,869 | $ | 2,406 | $ | 2,514 | ||||||||
Cost of revenues | 1,214 | 878 | ||||||||||||||
Cost of sales | 1,132 | 1,214 | ||||||||||||||
Gross profit | $ | 1,300 | $ | 991 | 1,274 | 1,300 | ||||||||||
Gross profit margin | 51.7 | % | 53.0 | % | 53.0 | % | 51.7 | % | ||||||||
Selling, general and administrative expenses | $ | 729 | $ | 642 | 774 | 729 | ||||||||||
Income from operations | $ | 571 | $ | 349 | $ | 500 | $ | 571 |
Three Months Ended December 31, | ||||||||
2021 | 2020 | |||||||
(In thousands) | ||||||||
Total income from operating segments | $ | 4,161 | $ | 1,457 | ||||
Administrative expenses | (1,000 | ) | (707 | ) | ||||
Amortization expense | (509 | ) | (251 | ) | ||||
Stock-based compensation | (10 | ) | (10 | ) | ||||
Total Corporate expenses | (1,519 | ) | (968 | ) | ||||
Interest expense | (279 | ) | (119 | ) | ||||
Net income before taxes | 2,363 | 370 | ||||||
Income tax expense | (675 | ) | (115 | ) | ||||
Net income | 1,688 | 255 | ||||||
Preferred stock dividends | (211 | ) | (174 | ) | ||||
Net income Available to Common Stockholders | $ | 1,477 | $ | 81 |
Three Months Ended December 31, | ||||||||
(in thousands) | 2022 | 2021 | ||||||
Total income from operations by segment | $ | 3,105 | $ | 4,161 | ||||
Corporate expenses | (1,138 | ) | (1,000 | ) | ||||
Amortization of intangible assets | (526 | ) | (509 | ) | ||||
Stock-based compensation | (61 | ) | (10 | ) | ||||
Total corporate expenses | (1,725 | ) | (1,519 | ) | ||||
Interest expense | (474 | ) | (279 | ) | ||||
Unrealized loss on Rubicon investment | (399 | ) | — | |||||
Net income before taxes | 507 | 2,363 | ||||||
Income taxes expense | (147 | ) | (675 | ) | ||||
Net Income | 360 | 1,688 | ||||||
Preferred stock dividends | (72 | ) | (211 | ) | ||||
Net Income Available to Common Stockholders | $ | 288 | $ | 1,477 |
ITEM 4. | CONTROLS AND PROCEDURES |
ITEM 6. | EXHIBIT INDEX |
Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer (filed herewith) | |
Rule 13a-14(a)/15d-14(a) Certification of Principal Financial Officer (filed herewith) | |
Section 1350 Certification of Principal Executive Officer (filed herewith) | |
Section 1350 Certification of Principal Financial Officer (filed herewith) | |
10.1 | Third Amendment to Amended and Restated Loan and Security Agreement, by and among Santander Bank, N.A., as lender, and Janel Group, Inc., Expedited Logistics and Freight Services, LLC, a Texas limited liability company, and ELFS Brokerage, LLC (collectively as borrowers) and Janel Corporation and Expedited Logistics and Freight Services, LLC, an Oklahoma limited liability company, as loan party obligors dated January 30, 2023 (filed herewith) |
101 | Interactive data files providing financial information from the Company’s Quarterly Report on Form 10-Q for the quarter ended December 31, |
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in the Interactive Data Files submitted as Exhibit 101) (filed herewith) |
Dated: February 3, 2023 | JANEL CORPORATION |
Registrant | |
/s/ | |
Chairman, President and Chief Executive Officer | |
(Principal Executive Officer) | |
Dated: February 3, 2023 | JANEL CORPORATION |
Registrant | |
/s/ Vincent A. Verde | |
Vincent A. Verde | |
Principal Financial Officer, Treasurer and Secretary |