JANEL CORP

Previous wording

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.

Current wording

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 three months ended December 31, 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.

Previous wording

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Current wording

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Previous wording

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 sel…

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Current wording

This Quarterly Report on Form 10-Q ("the Report") contains certain statements that are, or may be 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. 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 change to earnings related to the impairment of acquired assets; we may fail to realize the expected benefits or strategic objectives of any acquisition, or we may spend resources exploring acquisitions that are not consummated; risks associated with litigation and indemnification claims and other unforeseen claims and liabilities that may arise from an acquisition; changes in tax rates, laws or regulations and our ability to utilize anticipated tax benefits; the impact of volatile or changing 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; changes or developments in U.S. laws or policies, including the potential imposition of tariffs; 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; terrorist attacks and other acts of violence or war; security breaches or cybersecurity attacks; the impact of catastrophic events, such as health crises, natural disasters and armed conflict; the level of our insurance coverage, including related to product and other liability risks; our compliance with applicable privacy, security and data laws; risks relate…

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Previous wording

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.

Current wording

The Company’s Logistics segment is majority-owned and 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.

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.

Current wording

On September 2, 2025, the Company completed a business combination whereby it acquired a majority ownership position in Interlog USA, Inc., a non-asset-based freight forwarder and domestic truck broker, which we include in our Logistics segment. On that date, the Company purchased 80% of the outstanding stock of Interlog. The Company also agreed to purchase the remaining 20% of Interlog stock two years from the closing date, subject to certain closing conditions.

Previous wording

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.

Current wording

On June 4, 2025, the Company completed a business combination in which it acquired 80% of the outstanding stock of Biosensis, a biotech company in Australia focused on accelerating the development of new drugs for brain diseases, which we include in our Life Sciences segment. The Company and the former shareholders of Biosensis have put-call options, exercisable on June 4, 2028, for the Company to acquire the remaining 20% of outstanding Biosensis common stock.

Previous wording

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.

Current wording

Indco is a wholly 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.

Previous wording

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.

Current wording

Our condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (U.S. GAAP). 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.

Previous wording

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.

Current wording

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 Policies and Estimates” in our Annual Report on Form 10-K filed with the SEC on December 5, 2025. Critical accounting policies are those that are most important to the portrayal 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 three months ended December 31, 2025.

Previous wording

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”).

Current wording

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 is not based on or included in U.S. GAAP (we refer to these as “non-GAAP financial measures”).

Previous wording

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.

Current wording

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

Previous wording

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.

Current wording

We believe that organic revenue, organic revenue growth, organic gross profit, organic gross profit growth and adjusted operating income provide useful information in understanding and evaluating our operating results. However, organic revenue, organic revenue growth, organic gross profit, organic gross profit 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, gross profit, 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.

Previous wording

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.

Current wording

In addition, although other companies in our industries may report measures titled organic revenue, organic revenue growth, organic gross profit, organic gross profit 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 revenue, organic revenue growth, organic gross profit, organic gross profit growth and adjusted operating income alongside other financial performance measures, including total revenues, gross profit, operating income and our other financial results presented in accordance with U.S. GAAP.

Previous wording

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

Current wording

Results of Operations – Janel Corporation – Three Months Ended December 31, 2025 and 2024 (unaudited)

Previous wording

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

Current wording

Our consolidated results of operations are as follows:

Previous wording

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

Current wording

The following table sets forth a reconciliation of income from operations, the most directly comparable GAAP measure, to adjusted operating income:

Previous wording

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

Current wording

Results of Operations – Logistics – Three Months Ended December 31, 2025 and 2024 (unaudited)

Previous wording

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.

Current wording

Our Logistics segment 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 Logistics segment 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.

Previous wording

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

Current wording

Results of Operations – Life Sciences – Three Months Ended December 31, 2025 and 2024 (unaudited)

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

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Results of Operations - Manufacturing – Three Months Ended December 31, 2025 and 2024

Previous wording

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

Current wording

Results of Operations – Corporate and Other – Three Months Ended December 31, 2025 and 2024 (unaudited)

Previous wording

On a consolidated basis, the Company recorded an income tax expenseof $445 for the three months ended June 30, 2025, as compared to an income taxexpense of $343 for the three months ended June 30, 2024. On a consolidated basis, the Company recorded an income tax expenseof $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.

Current wording

On a consolidated basis, the Company recorded an income tax expense of $445 for the three months ended December 31, 2025, as compared to an income tax expense of $198 for the three months ended December 31, 2024. The increase in expense was primarily due to an increase in income from operations.

Previous wording

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.

Current wording

Preferred stock dividends include any dividends accrued on the Company’s Series C Cumulative Preferred Stock (the “Series C Preferred Stock”). For the three months ended December 31, 2025 and 2024, preferred stock dividends were $100 and $86, respectively.

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 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.

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 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 may influence our traditional credit collection metrics.

Previous wording

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.

Current wording

For customers that meet certain criteria, we have agreed to extend payment terms beyond our customary terms. Management believes their systematic criteria used to evaluate which customers to provide extended payment terms to are appropriate and has historically experienced relatively insignificant collection problems. Generally, we do not make significant capital expenditures.

Previous wording

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

Current wording

Our cash flow performance for first fiscal quarter of fiscal year 2026 is not necessarily indicative of future cash flow performance.

Previous wording

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 increasein net incomeof $2,682.

Current wording

Net cash (used in) provided by operating activities was $(14,527) for the three months ended December 31, 2025, versus $1,754 provided by operating activities for the three months ended December 31, 2024. The decrease in cash provided by operations for the three months ended December 31, 2025 compared to the prior year period was primarily due to increased accounts receivable and decreased accounts payable balances resulting from payment timing and higher transaction volumes.

Previous wording

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.

Current wording

Net cash provided by financing activities was $10,402 for the three months ended December 31, 2025, versus net cash used in financing activities of $252 for the three months ended December 31, 2024. The change in net cash provided in financing activities was primarily due to proceeds from the lines of credit, partially offset by $2,024 paid to acquire additional shares of common stock of Rubicon and the contingent earnout payment.