JANEL CORP

Previous wording

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 level focuses on significant capital allocation decisions and corporate governance. 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.

Current wording

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 Janel holding company level 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 into new strategic segments. Our acquisition strategy focuses on reasonably priced companies with strong and capable management teams, attractive existing business economics and stable, predictable earnings power.

Previous wording

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 subject to certain closing conditions.

Current wording

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, which we include in our Logistics segment. At closing, the Company purchased 80% of the outstanding stock of Airschott. The Company also agreed to purchase the remaining 20% of Airschott stock three years from the closing date, subject to certain closing conditions.

Previous wording

As of each of September 30, 2023 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.

Current wording

As of each of September 30, 2024 and September 30, 2025, the Company owned 1,108,000 shares, or approximately 46.6%, of the common stock of 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. Refer to Note 20 – Subsequent Events for additional information regarding the investment.

Previous wording

Consolidated revenues for the year ended September 30, 2024 were $183,184, or 1.8% lower than fiscal 2023. Revenues decreased primarily due to lower freight prices in our Logistics segment as a result of lower freight demand relative to improved global transportation capacity. Income from operations for fiscal 2024 was $3,758 compared to income from operations of $2,599 for fiscal 2023, an increase of $1,159, largely as a result of increased profits across all of our operating segments. Adjusted operating income for fiscal 2024 increased to $6,720 versus $5,353 in the prior fiscal year primarily due to an overall increase in profits at our business segments.

Current wording

Consolidated revenues for the year ended September 30, 2025 were $207,443, or 13.2% higher than fiscal 2024. Revenues increased primarily due to our Life Sciences and Logistics business segments. Income from operations for fiscal 2025 was $6,434 compared to income from operations of $3,758 for fiscal 2024, an increase of $2,676, as a result of increased profits from the Logistics segment. Adjusted operating income for fiscal 2025 increased to $10,546 as compared to $6,720 in the prior fiscal year due to an overall increase in profits at our Logistics segment.

Previous wording

The Company’s net income for the year ended September 30, 2024 totaled $551 or $0.45 per diluted share, compared to net income of $723 or $0.60 per diluted share for the year ended September 30, 2023. The decrease in net income was largely due to an increase in the fair value of mandatorily redeemable non-controlling interest and higher income tax expense, partially offset by higher profits in our business segments.

Current wording

The Company’s net income for the year ended September 30, 2025 totaled $5,657 or $4.69 per diluted share, compared to net income of $551 or $0.45 per diluted share for the year ended September 30, 2024. The increase in net income was largely due to higher profits from our Logistics segment and non-cash gains from marketable securities.

Previous wording

Total revenues in fiscal 2024 were $159,958 as compared to $166,052 in fiscal 2023, a decrease of $6,094 or 3.7%. Revenues decreased primarily due to lower freight prices as a result of lower freight demand relative to improved global transportation capacity. Lower prices for ocean, air and trucking services led to a decrease in both gross revenues and forwarding expenses. Compared to fiscal 2023, our volume in fiscal 2024, as measured in ocean freight by twenty-foot equivalent units, fell 4%, while air freight volume as measured by metric tons fell 5% and customs entries increased 5%. Organic growth, which represents revenues growth excluding revenues from acquisitions within the preceding 12 months, decreased in fiscal 2024 by 7.3%.

Current wording

Total revenues in fiscal 2025 were $183,823 as compared to $159,958 in fiscal 2024, an increase of 14.9% or $23,865. Revenues primarily increased due to higher freight rates, the inclusion of acquired revenue from acquisitions of $13,434 and higher demand as customers prepared for anticipated tariff increases. Compared to fiscal 2024, our volume in fiscal 2025, as measured in ocean freight by twenty-foot equivalent units, increased 20%, while air freight volume as measured by metric tons increased 8% and customs entries increased 2%. Organic revenue growth, which represents revenues growth excluding revenues from acquisitions within the preceding 12 months, increased in fiscal 2025 by 6.5%.

Previous wording

Income from operations increased to $5,400 in fiscal 2024 compared to $4,804 in fiscal 2023. Income from operations increased as a result of normalization in the market, lower personnel expense, insurance costs, and the additional profit from an acquisition. Operating margin as a percentage of gross profit was 12.7% in fiscal 2024 compared to 11.4% in fiscal 2023, largely due to higher gross profits.

Current wording

Income from operations increased to $10,383 in fiscal 2025 compared to $5,400 in fiscal 2024. Income from operations increased as a result of revenue growth and the inclusion of revenue from acquisitions combined with lower personnel costs. Income from operations as a percentage of gross profit was 21.2% in fiscal 2025 compared to 12.7% in fiscal 2024, largely due to business growth, acquisitions and cost reductions.

Previous wording

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.

Current wording

The Company’s Life Sciences segment is comprised of several 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.

Previous wording

Total revenues were $13,154 in fiscal 2024 compared with $11,059 in fiscal 2023. Revenues increased 18.9% or $2,095 primarily related to increased product demand and current year acquisitions. Organic growth, which represents revenues growth excluding revenues from acquisitions within the preceding 12 months, increased in fiscal 2024 by 15.6%.

Current wording

Total revenues were $14,126 in fiscal 2025 compared with $13,154 in fiscal 2024. Revenues increased 7.4% or $972, of which $373 was acquired. Revenues primarily increased dueto higher product demand and current year acquisitions. Organic revenue growth increased in fiscal 2025 by 4.6%.

Previous wording

Gross profit was $10,516 and $8,683 for fiscal years 2024 and 2023, respectively, representing a year-over-year increase of $1,833. In the fiscal years ended September 30, 2024 and 2023, the Life Sciences segment had a gross profit margin of 79.9% and 78.5%, respectively. The increase in gross profit margin resulted from an improvement in product mix.

Current wording

Gross profit was $10,865 and $10,516 for fiscal years 2025 and 2024, respectively, representing a year-over-year increase of $349. In the fiscal years ended September 30, 2025 and 2024, the Life Sciences segment had a gross profit margin of 76.9% and 79.9%, respectively. The decrease in gross profit margin resulted from higher cost recognized upon sale of acquired inventory, increased component costs and changes in product mix.

Previous wording

Selling, general and administrative expenses for the Life Sciences segment were $7,216 and $6,149 for fiscal years 2024 and 2023, respectively. The year-over-year increase was due to additional expenses from acquired businesses. As a percentage of revenue, selling, general and administrative expenses were 54.9% and 55.6% for fiscal 2024 and fiscal 2023, respectively.

Current wording

Selling, general and administrative expenses for the Life Sciences segment were $8,402 and $7,216 for fiscal years 2025 and 2024, respectively. The year-over-year increase was due to additional expenses from acquired businesses and an earnout accrual related to an acquisition payment. As a percentage of revenue, selling, general and administrative expenses were 59.5% and 54.9% for fiscal 2025 and fiscal 2024, respectively.

Previous wording

The Life Sciences business earned $3,300 and $2,534 in income from operations for fiscal 2024 and 2023, respectively. The increase in operating income was primarily due to increased product demand and incremental revenue from acquisitions. As a result of these factors, income from operations as a percentage of revenue increased from 22.9% in fiscal year 2023 to 25.1% in fiscal year 2024.

Current wording

The Life Sciences business earned $2,463 and $3,300 in income from operations for fiscal 2025 and 2024, respectively. The decrease in operating income was primarily due to increased costs from cost recognized upon sale of acquired inventory, an earnout accrual and integration expenses related to an acquisition. As a result of these factors, income from operations as a percentage of revenue decreased from 25.1% in fiscal year 2024 to 17.4% in fiscal year 2025.

Previous wording

Total revenues were $10,072 in fiscal 2024 compared with $9,338 in fiscal 2023, an increase of 7.9%. The increase in revenues largely reflected an increase in manufacturing volume in the business.

Current wording

Total revenues were $9,494 in fiscal 2025 compared with $10,072 in fiscal 2024, a decrease of 5.7%. The decrease in revenues was largely reflective of a decrease in both manufacturing and plastic agitator volume in the business.

Previous wording

Gross profit was $5,411 and $4,875 for fiscal years 2024 and 2023, respectively. The year-over-year increase in gross profit reflected an increase in sales volume. Gross profit margin for the Manufacturing segment during fiscal 2024 was 53.7%, as compared to 52.2%, in fiscal 2023. The increase in gross profit margin was generally due to the increase in sales volume and economies of scale.

Current wording

Gross profit was $5,065 and $5,411 for fiscal years 2025 and 2024, respectively. The year-over-year decrease in gross profit reflected both a decrease in overall sales volume and a negative product mix variance. Gross profit margin for the Manufacturing segment during fiscal 2025 was 53.3%, as compared to 53.7%, in fiscal 2024. The decrease in gross profit margin was generally due to the decrease in sales volume and a negative product mix variance.

Previous wording

Selling, general and administrative expenses for the Manufacturing segment were $3,129 and $2,978 for fiscal years 2024 and 2023, respectively, an increase of $151, or 5.1%. As a percentage of gross revenues, selling, general and administrative expenses were 31.1% and 31.9% for fiscal 2024 and fiscal 2023, respectively. This decrease in selling, general and administrative expenses as a percentage of gross revenues was the result of our leverage over overhead expenses due to higher volumes and revenues.

Current wording

Selling, general and administrative expenses for the Manufacturing segment were $3,253 and $3,129 for fiscal years 2025 and 2024, respectively, an increase of $124, or 4.0%. As a percentage of gross revenues, selling, general and administrative expenses were 34.3% and 31.1% for fiscal 2025 and fiscal 2024, respectively. This increase in selling, general and administrative expenses as a percentage of gross revenues was the result of a decrease in our leverage over overhead expenses due to lower volumes and revenues.

Previous wording

Income from operations for fiscal 2024 was $2,282 compared to $1,897 in fiscal 2023, representing a 20.3% increase compared to the prior fiscal year and consistent with the increase in revenues and gross margin, combined with a proportionally lower increase in selling, general and administrative expenses.

Current wording

Income from operations for fiscal 2025 was $1,812 compared to $2,282 in fiscal 2024, representing a 20.6% decrease compared to the prior fiscal year and consistent with the decrease in revenues and gross margin, combined with a slight increase in selling, general and administrative expenses.

Previous wording

Below is a reconciliation of income from operating segments to net (loss) available to common stockholders:

Current wording

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

Previous wording

Corporate expenses, which include amortization of intangible assets, stock-based compensation and merger and acquisition expenses, increased by $588 to $7,224, or 8.9%, in fiscal 2024 as compared to fiscal 2023. The increase was primarily due to higher stock-based compensation expense and amortization expense. We incur merger and acquisition deal-related expenses and intangible amortization at the Corporate level rather than at the segment level.

Current wording

Corporate expenses, which include amortization of intangible assets, stock-based compensation and merger and acquisition expenses, increased by $999 to $8,223, or 13.8%, in fiscal 2025 as compared to $7,224 in fiscal 2024. The increase was primarily due to higher acquisition-related expenses. We incur acquisition deal-related expenses and intangible amortization at the Corporate level rather than at the segment level.

Previous wording

Interest expense for the consolidated company increased $320, or 16.0%, to $2,318 in fiscal 2024 from $1,998 in fiscal 2023. The increase was primarily due to a higher average debt outstanding and higher interest rates.

Current wording

Interest expense for the consolidated company decreased by $245, or 10.6%, to $2,073 in fiscal 2025 from $2,318 in fiscal 2024. The decrease was primarily due to lower average debt outstanding.

Previous wording

On a consolidated basis, the Company recorded an income tax expense of $543 in fiscal 2024, as compared to an income tax benefit of $198 in fiscal 2023. The increase in income tax expense was primarily due to an increase in pretax income.

Current wording

On a consolidated basis, the Company recorded an income tax expense of $1,222 in fiscal 2025, as compared to an income tax expense of $543 in fiscal 2024. The increase in income tax expense was primarily due to an increase in pretax income.

Previous wording

Preferred stock dividends include the Company’s Series C Stock dividends accrued or paid. For the fiscal years ended September 30, 2024 and 2023, preferred stock dividends were $328 and $284, respectively. Preferred stock dividends for fiscal 2024 increased by $44, or 15.5%, compared to fiscal 2023. The increase in preferred stock dividends was the result of the increase in the dividend rate of the Series C Stock by 1% on January 1, 2024. Such rate is set to increase on each January 1 thereafter for three years to a maximum rate of 9%. The dividend rate of the Series C Stock as of each of September 30, 2024 and September 30, 2023 was 6% and 5%, respectively. Dividends accrued on the Company’s Series C Stock were $2,271 and $2,029 as of September 30, 2024 and 2023, respectively.

Current wording

Preferred stock dividends include the Company’s Series C Stock dividends accrued or paid. For the fiscal years ended September 30, 2025 and 2024, preferred stock dividends were $384 and $328, respectively. Preferred stock dividends for fiscal 2025 increased due to an increase in the dividend rate to 7% as of September 30, 2025 from 6% at September 30, 2024. The dividend rate is set to increase annually on January 1 to a maximum rate of 9%. Dividends accrued on the Company’s Series C Stock were $1,649 and $2,271 as of September 30, 2025 and 2024, respectively.

Previous wording

Net income was $551, or $0.45 per diluted share, for fiscal 2024 and $723, or $0.60 per diluted share, for fiscal year 2023. The decrease in net income was primarily due to a change in fair value of an earnout, higher stock-based compensation and higher income tax expense, partially offset by higher profits in our operating segments.

Current wording

Net income was $5,657, or $4.69 per diluted share, for fiscal 2025 and $551, or $0.45 per diluted share, for fiscal year 2024. The increase in net income was primarily due to higher profits in our operating segments and non-cash gains from marketable securities.

Previous wording

Net income available to common stockholders was $223 or $0.18 per diluted share for fiscal 2024 and $439 or $0.36 per diluted share for fiscal 2023. The decrease in net income available to common stockholders was due to the change in net income discussed above and higher preferred stock dividends.

Current wording

Net income available to common stockholders was $5,030 or $4.17 per diluted share for fiscal 2025 and $223 or $0.18 per diluted share for fiscal 2024. The increase in net income available to common stockholders was due to the change in net income discussed above and partially offset by higher preferred stock dividends.

Previous wording

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 or expense. 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.

Current wording

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 or expense. 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.

Previous wording

As of September 30, 2024, and compared with the prior fiscal year, the Company’s cash and cash equivalents increased by $371, or 15.1%, to $2,832 from $2,461 as of September 30, 2023. During the fiscal year ended September 30, 2024, Janel’s net working capital deficiency (current assets less current liabilities) increased by $5,855, from ($19,549) at September 30, 2023 to ($25,404) at September 30, 2024.

Current wording

As of September 30, 2025, and compared with the prior fiscal year, the Company’s cash and cash equivalents (including restricted cash) increased by $8,958 to $12,040 from $3,082 as of September 30, 2024. During the fiscal year ended September 30, 2025, Janel’s net working capital deficiency (current assets less current liabilities) increased by $6,482, from ($25,348) at September 30, 2024 to ($31,830) at September 30, 2025.

Previous wording

Net cash provided by operating activities for fiscal years 2024 and 2023 was $6,832 and $11,388, respectively. The decrease in cash provided by operations for the year ended September 30, 2024 was driven principally by reduced net income, unrealized loss on marketable securities, and the timing of cash collections for accounts receivables primarily in our Logistics segment for the year ended September 30, 2024.

Current wording

Net cash provided by operating activities for fiscal years 2025 and 2024 was $43,066 and $6,831, respectively. The increase in cash provided by operations for the year ended September 30, 2025 was driven principally by increased net income and the timing of cash collections for accounts receivables and cash payments for payables primarily in our Logistics segment for the year ended September 30, 2025.

Previous wording

Net cash used in investing activities, mainly for the acquisition of subsidiaries, was $5,636 for fiscal 2024 and $6,500 for fiscal 2023. Net cash used in investing activities for fiscal 2024 related to two acquisitions; one in our Life Sciences segment and one in our Logistics segment. The fiscal 2023 net cash used in investing activities related to the two acquisitions in our Life Sciences segment and earnout payments to the former owners of ELFS. The Company also used $1,003 for the acquisition of property and equipment for the year ended September 30, 2024 compared to $360 for the year ended September 30, 2023.

Current wording

Net cash used in investing activities, mainly for the acquisition of subsidiaries, was $15,207 for fiscal 2025 and $5,636 for fiscal 2024. Net cash used in investing activities for fiscal 2025 related to three acquisitions: one in our Life Sciences segment and two in our Logistics segment. Additionally, $1,374 of cash was used to repurchase outstanding shares of Indco from two minority shareholders. The fiscal 2024 net cash used in investing activities related to the two acquisitions in our Life Sciences segment and earnout payments to the former owners of ELFS. The Company also used $590 for the acquisition of property and equipment for the year ended September 30, 2025 compared to $1,003 for the year ended September 30, 2024.

Previous wording

Net cash used in financing activities was $574 for fiscal 2024 and $9,018 for fiscal 2023. Net cash used in financing activities in fiscal 2024 primarily came from repayments on our term loan as well as repayment on our subordinated promissory note, partially offset by borrowings from our line of credit. Net cash used in financing activities in fiscal year 2023 primarily included repayment of our term loan and line of credit.

Current wording

Net cash used in financing activities was $18,901 for fiscal 2025 and $574 for fiscal 2024. Net cash used in financing activities in fiscal 2025 primarily resulted from repayments on revolving lines of credit and subordinated promissory notes, partially offset by borrowings from our term loan. Net cash used in financing activities in fiscal year 2024 primarily included repayment of our term loan and line of credit.

Previous wording

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 provides for the following: (i) the maximum revolving facility amount available of $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) a one-time increase from $1,000 to $3,000 in the amount the Company was permitted to distribute to holders of the Company’s Series C Preferred Stock if specified conditions are met; and (iv) the amount of indebtedness of the Company’s Antibodies Incorporated subsidiary that the Company was permitted to guaranty was increased from $2,920 to $5,000.

Current wording

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”).

Previous wording

At September 30, 2023, outstanding borrowings under the Santander Facility were $18,759, representing 53.6% of the $35,000 available thereunder, and interest was accruing at an effective interest rate of 7.60%.

Current wording

At September 30, 2025, outstanding borrowings under the Santander Facility were $0, representing 0% of the $35,000 available thereunder (subject to certain limitations), and interest was accruing at an effective interest rate of 6.68%.

Previous wording

Through September 30, 2024, the Logistics segment’s cash needs were met by the Santander Facility and cash on hand. As of September 30, 2024, the Logistics segment had, subject to collateral availability, $5,852 available for future borrowings under its $35,000 Santander Facility and $748 in cash.

Current wording

Through September 30, 2025, the Logistics segment’s cash needs were met by the Santander Facility and cash on hand. As of September 30, 2025, the Logistics segment had, subject to collateral availability, $35,000 available for future borrowings under its $35,000 Santander Facility and $10,600 in cash.

Previous wording

On April 25, 2023, Indco and certain other Subsidiaries of the Company that are part of the Life Science and Manufacturing segments (together with Indco, the “Borrowers” and each, a “Borrower”), entered into a Credit Agreement (the “Credit Agreement”) with First Merchants. The Credit Agreement constitutes an amendment and restatement of the Prior First Merchants Credit Agreement. The credit facilities provided under the Credit Agreement (the “First Merchants Credit Facilities”) consist of a $3,000 revolving loan (limited to the borrowing base and reserves), a $5,000 acquisition loan, a $6,905 Term A loan and a $620 Term B loan as a continuation of the mortgage loan under the Prior First Merchants Credit Agreement. Interest accrues on the outstanding revolving loan, Term A loan and acquisition loan at an annual rate equal to one-month adjusted term SOFR plus either (i) 2.75% (if the Borrowers’ total funded debt to EBITDA ratio is less or equal to 1.75:1.00) or (ii) 3.50% (if the Borrowers’ total funded debt to EBITDA ratio is greater than to 1.75:1.00). Interest accrues on the Term B loan at an annual rate of 4.19%. The Borrowers’ obligations under the First Merchants Credit Facilities are secured by all of the Borrowers’ real property and other assets, and are guaranteed by the Company, and the Company’s guarantee of the Borrowers’ obligations is secured by a pledge of the Company’s equity interests in certain of the Borrowers. The revolving loan portion will expire on August 1, 2027, the Term A loan portion will mature on April 25, 2033, the Term B loan portion will mature on July 1, 2025 and the acquisition loan will permit multiple draws until October 25, 2024, at which point the outstanding principal amount will amortize, with all remaining amounts due at maturity of the acquisition loan on April 25, 2029; each of the foregoing maturities, subject to earlier termination as provided in the Credit Agreement and unless renewed or extended.

Current wording

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 equal to the Term A loan. The Borrowers’ obligations under the First Merchants Credit Agreement are secured by all of the Borrowers’ real property and other assets, and are guaranteed by the Company, and the Company’s guarantee of the Borrowers’ obligations is secured by a pledge of the Company’s equity interests in certain of the Borrowers. The revolving line of credit expires on November 22, 2029 and the acquisition line of credit expires on November 22, 2026.

Previous wording

As of September 30, 2023, there were $500 of outstanding borrowings under the acquisition loan, $450 of outstanding borrowings under the revolving loan, $6,235 of outstanding borrowings under the Term A loan and $610 of outstanding borrowings under the Term B loan, with interest accruing on the acquisition loan and revolving loan at an effective interest rate of 8.18% and on the Term A loan and Term B loan at an effective interest rate of 8.18% and 4.19%, respectively.

Current wording

As of September 30, 2025, there were$2,900 of outstanding borrowings under the acquisition loan, $7,885 of outstanding borrowings under the Term A loan, $559 of outstanding borrowings under the Term B loan and $1,000 of outstanding borrowings on the revolving loan, with interest accruing on all four loans at an effective interest rate of 6.89%.

Previous wording

As of September 30, 2024, there were $3,700 of outstanding borrowings under the acquisition 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 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.

Current wording

As of September 30, 2024, there were $3,700 of outstanding borrowings under the acquisition 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 loan, Term A loan and revolving loan at an effective interest rate of 7.82% each, and Term B loan at an effective interest rate of 4.19%.

Previous wording

Life Sciences and Manufacturing’s cash needs are currently met by the Term A loan, Term B loan, revolving loan and acquisition loan under the First Merchants Credit Facilities and cash on hand. As of September 30, 2024, Life Sciences and Manufacturing had $3,000 available under its $3,000 revolving loan and had $1,300 available under its $5,000 acquisition loan subject to collateral availability and $800 and $1,075 in cash, respectively. The Company believes that the current financial resources will be sufficient to finance the Life Sciences and Manufacturing segment’s operations and obligations (current and long-term liabilities) for the long- and short- term. However, actual working capital needs will depend upon numerous factors, including operating results; the cost associated with growing the Life Sciences and Manufacturing segments, either organically or through acquisitions; competition; and availability under the revolving credit facility, none of which can be predicted with certainty. If cash flow and available credit are not sufficient to fund working capital, Life Sciences and Manufacturing’s operations will be materially negatively impacted.

Current wording

Life Sciences and Manufacturing’s cash needs are currently met by the Term A loan, Term B loan, revolving loan and acquisition loan under the First Merchants Credit Facilities and cash on hand. As of September 30, 2025, Life Sciences and Manufacturing had $2,000 available under its $3,000 revolving loan and had $4,100 available under its $7,000 acquisition loan subject to collateral availability and $290 and $647 in cash, respectively. The Company believes that the current financial resources will be sufficient to finance the Life Sciences and Manufacturing segment's operations and obligations (current and long-term liabilities) for the long- and short- term. However, actual working capital needs will depend upon numerous factors, including operating results; the cost associated with growing the Life Sciences and Manufacturing segments, either organically or through acquisitions; competition; and availability under the revolving credit facility, none of which can be predicted with certainty. If cash flow and available credit are not sufficient to fund working capital, Life Sciences and Manufacturing’s operations will be materially negatively impacted.

Previous wording

The Company cannot accurately forecast many of these factors, nor can it estimate accurately the relative influence of any particular factor and, as a result, there can be no assurance that historical patterns, if any, will continue in future periods.

Current wording

The Company cannot accurately forecast many of these factors, nor can it accurately estimate the relative influence of any particular factor and, as a result, there can be no assurance that historical patterns, if any, will continue in future periods.

Previous wording

The Company’s subsidiaries are implementing business strategies to grow revenues and profitability for fiscal 2025 and beyond. Our Logistics strategy calls for additional branch offices, introduction of new revenue streams for existing locations, sales force expansion, additional acquisitions and a continued focus on implementing lean methodologies to contain operating expenses.

Current wording

The Company’s subsidiaries are implementing business strategies to grow revenues and profitability for fiscal 2026 and beyond. Our Logistics strategy calls for additional branch offices, introduction of new revenue streams for existing locations, sales force expansion, additional acquisitions and a continued focus on implementing lean methodologies to contain operating expenses. Our Life Sciences and Manufacturing segments expect to introduce new product lines and wider distribution and promotion of their products with internet sales efforts.

Previous wording

Our Life Sciences and Manufacturing segments expect to introduce new product lines and wider distribution and promotion of their products with internet sales efforts. In addition to supporting its subsidiaries’ growth plans, the Company may seek to grow by entering new business segments through acquisition.

Current wording

In addition to supporting its subsidiaries’ growth plans, the Company may seek to grow by entering new business segments through acquisition.

Previous wording

As part of acquisitions of businesses, we acquired certain identifiable intangible assets, which are valued as of the acquisition date using a discounted cash flow (“DCF”) model. Key assumptions in the DCF model include (i) future revenues, (ii) earnings before interest, taxes depreciation and amortization (“EBITDA”) and (iii) the weighted average cost of capital discount rate. Estimated future revenues include assumptions about our ability to renew contracts in a competitive bidding process. A decrease in revenues or gross and EBITDA margins may adversely affect the value of identifiable intangible assets. The discount rate focuses on rates of return for equity and debt and is calculated using public information from selected guideline companies. The magnitude of the discount rate reflects the perceived risk of an investment. A change in the estimated risk of the acquired company cash flows would change the discount rate, which in turn could significantly affect the valuation of acquired identifiable intangible assets.

Current wording

As part of our acquisitions of businesses, we acquired certain identifiable intangible assets, which are valued as of the acquisition date using a discounted cash flow (“DCF”) model. Key assumptions in the DCF model include (i) future revenues, (ii) earnings before interest, taxes depreciation and amortization (“EBITDA”) and (iii) the weighted average cost of capital discount rate. Estimated future revenues include assumptions about our ability to renew contracts in a competitive bidding process. A decrease in revenues or gross and EBITDA margins may adversely affect the value of identifiable intangible assets. The discount rate focuses on rates of return for equity and debt and is calculated using public information from selected guideline companies. The magnitude of the discount rate reflects the perceived risk of an investment. A change in the estimated risk of the acquired company cash flows would change the discount rate, which in turn could significantly affect the valuation of acquired identifiable intangible assets.

Previous wording

The excess amount of the aggregated purchase consideration paid over the fair value of the net of assets acquired and liabilities assumed is recorded as goodwill. Goodwill is evaluated for impairment annually or more frequently if an event occurs or circumstances change, such as material deterioration in performance that would indicate an impairment may exist. When evaluating goodwill for impairment, we may first perform a qualitative assessment (“step zero” of the impairment test) to determine whether it is more likely than not that a reporting unit is impaired. If we decide not to perform a qualitative assessment, or if we determine that it is more likely than not the carrying amount of a reporting unit exceeds its the fair value, then we perform a quantitative assessment (“step one” of the impairment test) and calculate the estimated fair value of the reporting unit. If the carrying amount of the reporting unit exceeds the estimated fair value, an impairment charge would be recorded to reduce the carrying amount to its estimated fair value. The decision to perform a qualitative impairment assessment in a given year is influenced by a number of factors, including the significance of the excess of the reporting units’ estimated fair value over carrying amount at the last quantitative assessment date, the amount of time in between quantitative fair value assessments and the date of our acquisitions.

Current wording

The excess amount of the aggregated purchase consideration paid over the fair value of the net of assets acquired and liabilities assumed is recorded as goodwill. Goodwill is evaluated for impairment annually or more frequently if an event occurs or circumstances change, such as material deterioration in performance that would indicate an impairment may exist. When evaluating goodwill for impairment, we may first perform a qualitative assessment (“step zero” of the impairment test) to determine whether it is more likely than not that a reporting unit is impaired. If we decide not to perform a qualitative assessment, or if we determine that it is more likely than not that the carrying amount of a reporting unit exceeds its fair value, then we perform a quantitative assessment (“step one” of the impairment test) and calculate the estimated fair value of the reporting unit. If the carrying amount of the reporting unit exceeds the estimated fair value, an impairment charge would be recorded to reduce the carrying amount to its estimated fair value. The decision to perform a qualitative impairment assessment in a given year is influenced by a number of factors, including the significance of the excess of the reporting units’ estimated fair value over carrying amount at the last quantitative assessment date, the amount of time in between quantitative fair value assessments and the date of our acquisitions.