Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Mar. 31, 2020 | May 11, 2020 | |
Cover [Abstract] | ||
Entity Registrant Name | JANEL CORP | |
Entity Central Index Key | 0001133062 | |
Current Fiscal Year End Date | --09-30 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Shell Company | false | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 850,652 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 | |
Entity Address, State or Province | NY |
CONSOLIDATED BALANCE SHEETS (Un
CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2020 | Sep. 30, 2019 |
Current Assets: | ||
Cash | $ 1,928 | $ 2,163 |
Accounts receivable, net of allowance for doubtful accounts | 13,677 | 21,351 |
Inventory, net | 4,178 | 4,371 |
Prepaid expenses and other current assets | 349 | 531 |
Note receivable | 142 | 139 |
Total current assets | 20,274 | 28,555 |
Property and Equipment, net | 3,992 | 3,954 |
Other Assets: | ||
Intangible assets, net | 13,112 | 13,598 |
Goodwill | 13,641 | 13,525 |
Operating lease right of use asset | 1,599 | 0 |
Security deposits and other long term assets | 250 | 87 |
Total other assets | 28,602 | 27,210 |
Total assets | 52,868 | 59,719 |
Current Liabilities: | ||
Line of credit | 7,533 | 8,391 |
Accounts payable - trade | 15,314 | 22,061 |
Accrued expenses and other current liabilities | 2,891 | 2,272 |
Dividends payable | 1,366 | 1,041 |
Current portion of operating lease liabilities | 479 | 0 |
Current portion of subordinated promissory note | 155 | 152 |
Current portion of long-term debt | 838 | 828 |
Total current liabilities | 28,576 | 34,745 |
Other Liabilities: | ||
Long-term debt | 6,310 | 6,602 |
Subordinated promissory notes | 465 | 541 |
Mandatorily redeemable non-controlling interest | 619 | 619 |
Deferred income taxes | 1,817 | 2,000 |
Long-term operating lease liabilities | 1,142 | 0 |
Other liabilities | 302 | 334 |
Total other liabilities | 10,655 | 10,096 |
Total liabilities | 39,231 | 44,841 |
Stockholders' Equity: | ||
Common stock, $0.001 par value; 4,500,000 shares authorized, 867,652 issued and 847,652 outstanding as of March 31, 2020 and 863,812 issued and 843,812 outstanding as of September 30, 2019 | 1 | 1 |
Paid-in capital | 14,891 | 15,075 |
Treasury stock, at cost, 20,000 shares | (240) | (240) |
Accumulated (deficit) earnings | (1,015) | 42 |
Total stockholders' equity | 13,637 | 14,878 |
Total liabilities and stockholders' equity | 52,868 | 59,719 |
Series B [Member] | ||
Stockholders' Equity: | ||
Preferred stock | 0 | 0 |
Series C [Member] | ||
Stockholders' Equity: | ||
Preferred stock | $ 0 | $ 0 |
CONSOLIDATED BALANCE SHEETS (_2
CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2020 | Sep. 30, 2019 |
Stockholders' Equity: | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 100,000 | 100,000 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 4,500,000 | 4,500,000 |
Common stock, shares issued (in shares) | 867,652 | 863,812 |
Common stock, shares outstanding (in shares) | 847,652 | 843,812 |
Treasury stock, at cost (in shares) | 20,000 | 20,000 |
Series B [Member] | ||
Stockholders' Equity: | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | |
Preferred stock, shares authorized (in shares) | 5,700 | 5,700 |
Preferred Stock, shares issued (in shares) | 631 | 631 |
Preferred stock, shares outstanding (in shares) | 631 | 631 |
Series C [Member] | ||
Stockholders' Equity: | ||
Preferred stock, shares authorized (in shares) | 20,000 | 20,000 |
Preferred Stock, shares issued (in shares) | 20,000 | 20,000 |
Preferred stock, shares outstanding (in shares) | 20,000 | 20,000 |
Preferred stock, liquidation value | $ 12,867 | $ 12,541 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) [Abstract] | ||||
Revenue | $ 19,121 | $ 20,969 | $ 38,942 | $ 43,296 |
Forwarding expenses and cost of revenues | 13,125 | 14,599 | 26,659 | 30,439 |
Gross profit | 5,996 | 6,370 | 12,283 | 12,857 |
Cost and Expenses: | ||||
Selling, general and administrative | 6,584 | 5,692 | 12,669 | 11,081 |
Amortization of intangible assets | 243 | 236 | 486 | 444 |
Total Costs and Expenses | 6,827 | 5,928 | 13,155 | 11,525 |
(Loss) Income from Operations | (831) | 442 | (872) | 1,332 |
Other Items: | ||||
Interest expense net of interest income | (141) | (198) | (304) | (360) |
(Loss) Income Before Income Taxes | (972) | 244 | (1,176) | 972 |
Income tax benefit (expense) | 35 | (69) | 119 | (253) |
Net (Loss) Income | (937) | 175 | (1,057) | 719 |
Preferred stock dividends | (175) | (148) | (326) | (270) |
Net (Loss) Income Available to Common Stockholders | $ (1,112) | $ 27 | $ (1,383) | $ 449 |
Net (loss) Income per share | ||||
Basic (in dollars per share) | $ (1.08) | $ 0.21 | $ (1.22) | $ 0.85 |
Diluted (in dollars per share) | (1.08) | 0.18 | (1.22) | 0.77 |
Net (loss) income per share attributable to common stockholders: | ||||
Basic (in dollars per share) | (1.29) | 0.04 | (1.60) | 0.53 |
Diluted (in dollars per share) | $ (1.29) | $ 0.03 | $ (1.60) | $ 0.48 |
Weighted average number of shares outstanding: | ||||
Basic (in shares) | 865,985 | 847,784 | 865,630 | 847,621 |
Diluted (in shares) | 865,985 | 931,960 | 865,630 | 934,137 |
CONSOLIDATED STATEMENT OF CHANG
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (Unaudited) - USD ($) $ in Thousands | Preferred Stock [Member] | Common Stock [Member] | Paid-in Capital [Member] | Treasury Stock [Member] | Accumulated Earnings (Deficit) [Member] | Total |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Cumulative effect of change in accounting principle | $ 0 | $ 0 | $ 0 | $ 0 | $ 32 | $ 32 |
Balance at Sep. 30, 2018 | $ 0 | $ 1 | 15,872 | $ (240) | (606) | 15,027 |
Balance (in shares) at Sep. 30, 2018 | 21,271 | 837,951 | 20,000 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net (loss) income | $ 0 | $ 0 | 0 | $ 0 | 719 | 719 |
Dividends to preferred stockholders | 0 | 0 | (270) | 0 | 0 | (270) |
Vested restricted stock unissued | 0 | 0 | (236) | 0 | 0 | (236) |
Stock-based compensation | 0 | 0 | 172 | 0 | 0 | 172 |
Stock option exercise | $ 0 | $ 0 | 5 | $ 0 | 0 | 5 |
Stock option exercise (in shares) | 0 | 1,500 | 0 | |||
Balance at Mar. 31, 2019 | $ 0 | $ 1 | 15,543 | $ (240) | 145 | 15,449 |
Balance (in shares) at Mar. 31, 2019 | 21,271 | 839,451 | 20,000 | |||
Balance at Sep. 30, 2019 | $ 0 | $ 1 | 15,075 | $ (240) | 42 | 14,878 |
Balance (in shares) at Sep. 30, 2019 | 20,631 | 863,812 | 20,000 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net (loss) income | $ 0 | $ 0 | 0 | $ 0 | (1,057) | (1,057) |
Dividends to preferred stockholders | 0 | 0 | (326) | 0 | 0 | (326) |
Stock-based compensation | 0 | 0 | 111 | 0 | 0 | 111 |
Stock option exercise | $ 0 | $ 0 | 31 | 0 | 0 | 31 |
Stock option exercise (in shares) | 0 | 3,840 | ||||
Balance at Mar. 31, 2020 | $ 0 | $ 1 | $ 14,891 | $ (240) | $ (1,015) | $ 13,637 |
Balance (in shares) at Mar. 31, 2020 | 20,631 | 867,652 | 20,000 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash Flows From Operating Activities: | ||
Net (loss) income | $ (1,057) | $ 719 |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||
Provision for uncollectible accounts | 164 | 330 |
Depreciation | 92 | 152 |
Deferred income tax | (183) | 302 |
Amortization of intangible assets | 486 | 444 |
Amortization of acquired inventory valuation | 447 | 129 |
Amortization of loan costs | 14 | 5 |
Stock-based compensation | 149 | 236 |
Changes in operating assets and liabilities, net of effects of acquisitions: | ||
Accounts receivable | 7,510 | (1,002) |
Inventory | (254) | (131) |
Prepaid expenses and other current assets | 182 | (134) |
Security deposits and other long term assets | (166) | (5) |
Accounts payable and accrued expenses | (6,166) | 171 |
Lease liability | 5 | 0 |
Other liabilities | (14) | 56 |
Net cash provided by operating activities | 1,209 | 1,272 |
Cash Flows From Investing Activities: | ||
Acquisition of property and equipment, net of disposals | (131) | (253) |
Acquisitions | (116) | (1,935) |
Net cash used in investing activities | (247) | (2,188) |
Cash Flows From Financing Activities: | ||
Repayments of term loan | (282) | (491) |
Proceeds from stock option exercise | 31 | 5 |
Line of credit, proceeds, net | (873) | 2,234 |
Repayment of subordinated promissory notes | (73) | (36) |
Net cash (used) in provided by financing activities | (1,197) | 1,712 |
Net (decrease) increase in cash | (235) | 796 |
Cash at beginning of the period | 2,163 | 585 |
Cash at end of period | 1,928 | 1,381 |
Cash paid during the period for: | ||
Interest | 309 | 360 |
Income taxes | 9 | 81 |
Non-cash operating activities: | ||
Operating lease right of use asset | 1,900 | 0 |
Operating lease liabilities | 1,917 | 0 |
Non-cash investing activities: | ||
Contingent earn-out acquisition | 0 | 50 |
Subordinated Promissory notes of Honor | 0 | 456 |
Non-cash financing activities: | ||
Dividends declared to preferred stockholders | 326 | 270 |
Vested restricted stock unissued | $ 0 | $ 236 |
BASIS OF PRESENTATION, SUMMARY
BASIS OF PRESENTATION, SUMMARY OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Mar. 31, 2020 | |
BASIS OF PRESENTATION, SUMMARY OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
BASIS OF PRESENTATION, SUMMARY OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES | 1. BASIS OF PRESENTATION, SUMMARY OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES The accompanying interim unaudited consolidated financial statements have been prepared pursuant to the rules and regulations of Article 8 of Regulation S-X and the instructions to Form 10-Q of the Securities and Exchange Commission. As a result, certain information and footnote disclosures normally included in audited financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. Janel Corporation (the “Company” or “Janel”) believes that the disclosures made are adequate to make the information presented not misleading. The consolidated financial statements reflect all adjustments which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. The results of operations for the periods presented are not necessarily indicative of the results to be expected for a full fiscal year, or any other period. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s Form 10-K as filed with the Securities and Exchange Commission. Business description Janel is a holding company with subsidiaries in three business segments: Global Logistics Services, Manufacturing and Life Sciences. A management group at the holding company level (the “corporate group”) focuses on significant capital allocation decisions, corporate governance and supporting Janel’s subsidiaries where appropriate. Janel expects to grow through its subsidiaries’ organic growth and by completing acquisitions. We plan to either acquire businesses within our existing segments or expand our portfolio into new strategic segments. Our acquisition strategy focuses on reasonably priced companies with strong and capable management teams, attractive existing business economics and stable and predictable earnings power. Global Logistics Services The Company’s Global Logistics Services segment is comprised of several wholly-owned subsidiaries, collectively known as “Janel Group.” Janel Group 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, and other value-added logistics services. On November 20, 2018, we completed a business combination whereby we acquired the membership interest of Honor Worldwide Logistics, LLC (“Honor”), a global logistics services provider with two U.S. locations. See note 2. On October 17, 2018, we completed a business combination whereby we acquired substantially all of the assets and certain liabilities of a global logistics services provider with one U.S. location. See note 2. Manufacturing The Company’s manufacturing segment is comprised of Indco, Inc. (“Indco”), a majority-owned subsidiary of the Company that manufactures and distributes mixing equipment and apparatus for specific applications within various industries. Indco’s customer base is comprised of small- to mid-sized businesses as well as other larger customers for which Indco fulfills repetitive production orders. Life Sciences The Company’s Life Sciences segment is comprised of Aves Labs, Inc. (“Aves”), Antibodies Incorporated (“Antibodies”), IgG, LLC (“IgG”) and PhosphoSolutions, LLC, which are wholly-owned subsidiaries of the Company. The Company’s Life Sciences segment manufactures and distributes high-quality monoclonal and polyclonal antibodies, diagnostic reagents and other immunoreagents for biomedical research and provides antibody manufacturing for academic and industry research scientists. Our Life Sciences business also produces products for other life science companies on an original equipment manufacturer (“OEM”) basis. Through Aves, the Company acquired the membership interests of a small life sciences company on July 1, 2019 and the equity interests of PhosphoSolutions, LLC. (“Phospho”) on September 6, 2019. Both acquisitions were completed primarily to expand our product offerings in Life Sciences. See note 2. Basis of consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, as well as Indco, of which Janel owns 91.65%, with a non-controlling interest held by existing Indco management. The Indco non-controlling interest is mandatorily redeemable and is recorded as a liability. All intercompany transactions and balances have been eliminated in consolidation. Uses of estimates in the preparation of financial statements The preparation of financial statements in conformity with generally accepted accounting principles in the United States (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of financial statements, as well as the reported amounts of revenues and expenses during the reporting period. The most critical estimates made by the Company are those relating to accounts receivables valuation, the useful lives of long-term assets, accrual of cost related to ancillary services the Company provides and accrual of tax expense on an interim basis. Cash The Company maintains cash balances at various financial institutions. Accounts at each institution are insured by the Federal Deposit Insurance Corporation up to $250. The Company’s accounts at these institutions may, at times, exceed the federally insured limits. The Company has not experienced any losses in such accounts. Accounts receivable and allowance for doubtful accounts receivable Accounts receivable are recorded at the contractual amount. The Company records its allowance for doubtful accounts based upon its assessment of various factors. The Company considers historical collection experience, the age of the accounts receivable balances, credit quality of the Company’s customers, any specific customer collection issues that have been identified, current economic conditions, and other factors that may affect the customers’ ability to pay. The Company writes off accounts receivable balances that have aged significantly once all collection efforts have been exhausted and the receivables are no longer deemed collectible from the customer. The allowance for doubtful accounts as of March 31, 2020 Inventory Inventory is valued at the lower of cost (using the first-in, first-out method) or net realizable value. The Company maintains an inventory valuation reserve to provide for slow moving and obsolete inventory, inventory not meeting quality control standards and inventory subject to expiration for its Antibodies business. The products of Antibodies require the initial manufacture of multiple batches to determine if quality standards can consistently be met. In addition, the Company will produce larger batches of established products than current sales requirements due to economies of scale. The manufacturing process for these products, therefore, has and will continue to produce quantities in excess of forecasted usage. The Company values acquired manufactured antibody inventory based on a three-year forecast. Inventory quantities in excess of the forecast are not valued due to uncertainty over salability. Amounts are charged to the reserve when the Company scraps or disposes of inventory. Property and equipment and depreciation policy Property and equipment are recorded at cost. Property and equipment acquired in business combinations are initially recorded at fair value. Depreciation is provided for in amounts sufficient to amortize the costs of the related assets over their estimated useful lives on the straight-line and accelerated methods for both financial reporting and income tax purposes. Maintenance and repairs are recorded as expenses when incurred. Goodwill The Company records as goodwill the excess of purchase price over the fair value of the tangible and identifiable intangible assets acquired in a business combination. Under current authoritative guidance, goodwill is not amortized but is tested for impairment annually (on September 30) as well as when an event or change in circumstance indicates impairment may have occurred. Goodwill is tested for impairment by comparing the fair value of the Company’s individual reporting units to their carrying amount to determine if there is potential goodwill impairment. If the fair value of the reporting unit is less than the carrying value, an impairment loss is recorded to the extent that the implied fair value of the goodwill of the reporting unit is less than its carrying value. If there is a material change in economic conditions, including as a result of continued disruption due to the coronavirus (COVID-19) pandemic, or other circumstances influencing the estemate of future cas flows or significantly affect the fair value of our reporting units, the Company could be required to recognized impairment charges in the future. There were no indicators of impairment of goodwill as of March 31, 2020 and September 30, 2019. The fair value of our reporting units was in excess of carrying value and goodwill was not deemed to be impaired as of March 31, 2020 Intangibles and long-lived assets Long-lived assets, including fixed assets and intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. In reviewing for impairment, the carrying value of such assets is compared to the estimated undiscounted future cash flows expected from the use of the assets and their eventual disposition. If such cash flows are not sufficient to support the asset’s recorded value, an impairment charge is recognized to reduce the carrying value of the long-lived asset to its estimated fair value. The determination of future cash flows, as well as the estimated fair value of long-lived assets, involves significant estimates on the part of management. If there is a material change in economic conditions, including as a result of continued disruption due to the coronavirus (COVID-19) pandemic, or other circumstances influencing the estimate of future cash flows or fair value, the Company could be required to recognize impairment charges in the future. There were no indicators of impairment of long-lived assets as of March 31, 2020 Business segment information The Company operates in three reportable segments: Global Logistics Services, Manufacturing and Life Sciences. The Company’s Chief Executive Officer regularly reviews financial information at the reporting segment level in order to make decisions about resources to be allocated to the segments and to assess their performance. Revenues and revenue recognition Adoption of ASC Topic 606, “Revenue from Contracts with Customers” On October 1, 2018, the Company adopted ASU 2014-09, Revenue from Contracts with Customers The Company recorded an increase Global Logistics Services Revenue Recognition Revenue is recognized upon transfer of control of promised services to customers. With respect to its Global Logistics Services segment, the Company has determined that in general each shipment transaction or service order constitutes a separate contract with the customer. When the Company provides multiple services to a customer, different contracts may be present for different services. The Company typically satisfies its performance obligations as services are rendered at a point in time. A typical shipment would include services rendered at origin, such as pick-up and delivery to port, freight services from origin to destination port and destination services, such as customs clearance and final delivery. The Company measures the performance of its obligations as services are completed at a point in time during the life of a shipment, including services at origin, freight and destination. The Company fulfills nearly all of its performance obligations within a one to two-month period. The Company evaluates whether amounts billed to customers should be reported as gross or net revenue. Generally, revenue is recorded on a gross basis when the Company is primarily responsible for fulfilling the promise to provide the services, when it has discretion in setting the prices for the services to the customers, and the Company has the ability to direct the use of the services provided by the third party. Revenue is recognized on a net basis when we do not have latitude in carrier selection or to establish rates with the carrier. In the Global Logistics Services segment, the Company disaggregates its revenues by its four primary service categories: ocean import and export, freight forwarding, customs brokerage and air import and export. A summary of the Company’s revenues disaggregated by major service lines for the three and six months ended March 31, 2020 Three Months Ended March 31, Six Months Ended March 31, Service Type 2020 2020 Ocean import and export $ 5,880 $ 11,737 Freight forwarding 2,653 6,462 Customs brokerage 3,111 5,305 Air import and export 3,684 7,903 Total $ 15,328 $ 31,407 Manufacturing Revenues from Indco are derived from the engineering, manufacture and delivery of specialty mixing equipment and accessories. Indco receives customer product orders via phone call, email, internet or fax. The pricing of each standard product sold is listed in Indco’s print and web-based catalog. Customer specific products are priced by quote. A sales order acknowledgement is sent to every customer for every order to confirm pricing and the specifications of the products ordered. The revenue is recognized at a point in time when the product is shipped to the customer. Life Sciences Revenues from the Life Sciences segment are derived from the sale of high-quality monoclonal and polyclonal antibodies, diagnostic reagents and diagnostic kits and other immunoreagents for biomedical research and antibody manufacturing. Revenues are recognized when products are shipped and risk of loss is transferred to the carrier(s) used. Income (loss) per common share Basic net income (loss) per share is computed by dividing net income (loss) for the period by the weighted average number of common shares outstanding, excluding unvested restricted stock, during the period. Diluted net income (loss) per share reflects the additional dilution from potential issuances of common stock, such as stock issuable pursuant to the exercise of stock options or warrants or the vesting of restricted stock units. The treasury stock method is used to calculate the potential dilutive effect of these common stock equivalents. Potentially dilutive shares are excluded from the computation of diluted net income (loss) per share when their effect is anti-dilutive. Stock-based compensation to employees Equity classified share-based awards The Company recognizes compensation expense for stock-based payments granted based on the grant-date fair value estimated in accordance with ASC Topic 718, “Compensation-Stock Compensation.” For employee stock-based awards, we calculate the fair value of the award on the date of grant using the Black-Scholes method for stock options and the quoted price of our common stock for restricted shares; the expense is recognized over the service period for awards expected to vest. Stock-based compensation to non-employees Liability classified share-based awards The Company maintains other share unit compensation grants for shares of Indco, the Company’s majority-owned subsidiary, which vest over a period of up to three years following their grant. The shares contain certain put features where the Company is either required or expects to settle vested awards on a cash basis. These awards are classified as liability awards, measured at fair value at the date of grant and re-measured at fair value at each reporting date up to and including the settlement date. The determination of the fair value of the share units under these plans is described in note 10. The fair value of the awards is expensed over the respective vesting period of the individual awards with recognition of a corresponding liability. Changes in fair value after vesting are recognized through compensation expense. Compensation expense reflects estimates of the number of instruments expected to vest. The impact of forfeitures and fair value revisions, if any, are recognized in earnings such that the cumulative expense reflects the revisions, with a corresponding adjustment to the settlement liability. Liability-classified share unit liabilities due within 12 months of the reporting date are presented in trade and other payables while settlements due beyond 12 months of the reporting date are presented in non-current liabilities. Non-employee share-based awards In prior periods up to September 30, 2019, the Company accounted for stock-based compensation to non-employees and consultants in accordance with the provisions of ASC 505-50, “Equity-Based Payments to Non-employees.” Measurement of share-based payment transactions with non-employees are based on the fair value of whichever is more reliably measurable: (a) the goods or services received; or (b) the equity instruments issued. The fair value of share-based payment transactions is determined at the earlier of performance commitment date or performance completion date. The Company believes that the fair value of the stock-based award is more reliably measurable than the fair value of the services received. The fair value of the granted stock-based awards is remeasured at each reporting date and expense is recognized over the vesting period of the award. In June 2018, the FASB issued ASU No. 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. The guidance was issued to simplify the accounting for share-based transactions by expanding the scope of Topic 718 from only being applicable to share-based payments to employees to also include share-based payment transactions for acquiring goods and services from nonemployees. As a result, nonemployee share-based transactions will be measured by estimating the fair value of the equity instruments at the grant date, taking into consideration the probability of satisfying performance conditions. The Company adopted ASU 2018-07 on October 1, 2019. The adoption of the standard did not have a material impact on our financial statements for the six months ended March 31, 2020. Mandatorily Redeemable Non-Controlling Interests The non-controlling interests that are reflected as mandatorily redeemable non-controlling interests in the consolidated financial statements consist of non-controlling interests related to the Indco acquisition whose owners have certain redemption rights that allow them to require the Company to purchase the non-controlling interests of those owners upon certain events outside the control of the Company, including upon the death of the holder. The Company is required to purchase 20% of the 8.35% mandatorily redeemable non-controlling interest at the option of the holder beginning on the third anniversary of the date of the Indco acquisition, which was March 21, 2019. On the date the Company acquires the controlling interest in a business combination, the fair value of the non-controlling interest is recorded in the long-term liabilities section of the consolidated balance sheet under the caption “ Mandatorily redeemable non-controlling interest change in fair value of mandatorily redeemable non-controlling interest Note receivable On March 2, 2018, the Company issued a convertible promissory note in the amount of $125 with a potential non- related party acquisition target. The note bears interest on the outstanding principal amount at a rate of 8% per annum, and both principal and interest is payable on the maturity date of April 24, 2020. The convertible note, at the election of the Company, can be converted into common stock of the acquisition target. As of March 31, 2020, and September 30, 2019, amounts outstanding including accrued interest were $142 and $139, respectively. As of March 31, 2020, the Company is no longer pursuing this potential acquisition target. Income taxes The Company uses the asset and liability method of accounting for income taxes in accordance with ASC Topic 740, “Income Taxes.” Under this method, income tax expense is recognized for the amount of: (i) taxes payable or refundable for the current year and (ii) deferred tax consequences of temporary differences resulting from matters that have been recognized in an entity’s financial statements or tax returns. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income and the reversal of deferred tax liabilities during the period in which related temporary differences become deductible. The benefit of tax positions taken or expected to be taken in the Company’s income tax returns are recognized in the consolidated financial statements if such positions are more likely than not of being sustained. Recent accounting pronouncements Recently adopted accounting pronouncements On October 1, 2019, the Company adopted ASU No. 2016-02, Leases The Company adopted the new standards effective October 1, 2019 using the modified retrospective transition method. The Company elected to use the package of practical expedients which allowed the Company to (i) not reassess whether an arrangement contains a lease, (ii) carry forward its lease classification as oper ating or capital leases and (iii) not reassess its previously-recorded initial direct costs. For all existing operating leases as of October 1, 2019, the Company recorded operating lease right-of-use assets of $1,043 and corresponding lease liabilities of $1,060, with an offset to other liabilities of $17 to eliminate deferred rent on the consolidated balance sheets. Operating lease expense is recognized on a straight-line basis over the lease term. At each balance sheet date, operating lease liabilities represent the present value of the future minimum payments related to non-cancelable periods. Leases with an initial term of 12 months or less (short-term leases) are not recognized in the balance sheet, and the related lease payments are recognized as incurred over the lease term. All significant lease arrangements after October 1, 2019 are recognized as right-of-use assets and lease liabilities at lease commencement. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term, and lease liabilities represent its obligation to make lease payments arising from the lease. Right-of-use assets and liabilities are recognized at the commencement date based on the present value of the future lease payments using the Company’s incremental borrowing rate. The adoption of the new lease accounting standard did not have a material impact on the Company’s results of operations or cash flows. In June 2018, the FASB issued ASU 2018-07, Compensation - Stock Compensation Recently issued accounting pronouncements not yet adopted In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other: Simplifying the Test for Goodwill Impairment, to simplify the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. This new accounting standard is effective for annual periods beginning after December 15, 2019. Early adoption is permitted. The Company is evaluating the effects that the adoption of this guidance will have on its consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326), which replaces the incurred loss methodology previously employed to measure credit losses for most financial assets and requires the use of a forward-looking expected loss model. Current accounting delays the recognition of credit losses until it is probable a loss has been incurred, while the update will require financial assets to be measured at amortized costs less a reserve and equal to the net amount expected to be collected. This standard is effective for annual periods beginning after December 15, 2019, including interim periods within those fiscal years, with early adoption permitted. The Company is evaluating the effects that the adoption of this guidance will have on its consolidated financial statements. Reclassifications Prior year financial statement amounts are reclassified as necessary to conform to the current year presentation. These prior period reclassifications did not affect the Company’s net income, earnings per share, stockholders’ equity or working capital. |
ACQUISITIONS
ACQUISITIONS | 6 Months Ended |
Mar. 31, 2020 | |
ACQUISITIONS [Abstract] | |
ACQUISITIONS | 2. ACQUISITIONS The Company completed four business acquisitions in the fiscal year ended September 30, 2019, with an aggregate purchase price of $6,768, net of cash acquired. The Company recorded an aggregate $2,067 in goodwill and $2,165 in other identifiable intangibles. The results of operations of the acquired businesses are included in Janel’s consolidated results of operations since the date of each acquisition. Supplemental pro forma information has not been provided as the acquisitions did not have a material impact on Janel’s consolidated results of operations, individually or in the aggregate. Honor Worldwide Logistics, LLC Through its wholly-owned subsidiary, Janel Group, the Company acquired the membership interests of Honor on November 20, 2018 in a transaction pursuant to which Honor became a direct wholly-owned subsidiary of Janel Group and an indirect wholly-owned subsidiary of the Company. At closing, a subordinated promissory note in the aggregate amount of $456 was issued to a former member. The acquisition of Honor was funded with cash provided by normal operations along with a subordinated promissory note. Honor provides global logistics services with two U.S. locations and expands the domestic network of the Company’s Global Logistics Services segment. The results of operations for Honor are reflected in the Global Logistics Services reporting segment. PhosphoSolutions Through Aves, the Company completed a business combination whereby we acquired Phospho on September 6, 2019. The aggregate purchase price for Phospho was $4,043, net of $13 of cash received. At closing, $4,000 was paid in cash and $56 was recorded in accrued expenses as preliminary tax gross up due to former owners. Phospho is a manufacturer and distributor of monoclonal and polyclonal antibodies, principally used in neuroscience research. Phospho was founded in 2001 and is headquartered in Aurora, Colorado. The results of operations for Phospho are reflected in the Life Sciences reporting segment. As of March 31, 2020, the Company paid $172 in tax gross up consideration to former owners and recorded an additional $116 of goodwill related to the Phospho acquistion. Other Acquisitions On October 17, 2018, we completed a business combination whereby we acquired substantially all of the assets and certain liabilities of a global logistics services provider with one U.S. location. On July 1, 2019, we acquired the membership interests of a life sciences company to expand our product offerings in Life Sciences. The results of operations for these acquisitions are reported in our Global Logistics Services and Life Sciences segments. |
INVENTORY
INVENTORY | 6 Months Ended |
Mar. 31, 2020 | |
INVENTORY [Abstract] | |
INVENTORY | 3. INVENTORY Inventories consisted of the following: March 31, 2020 September 30, 2019 Finished Goods $ 2,627 $ 2,988 Work-in-Process 326 461 Raw Materials 1,251 946 Less - Reserve for Inventory Valuation (26 ) (24 ) Inventory Net $ $ 4,178 $ 4,371 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 6 Months Ended |
Mar. 31, 2020 | |
PROPERTY AND EQUIPMENT [Abstract] | |
PROPERTY AND EQUIPMENT | 4. PROPERTY AND EQUIPMENT A summary of property and equipment and the estimated lives used in the computation of depreciation and amortization is as follows: March 31, 2020 September 30, 2019 Life Building and Improvements $ 2,553 $ 2,577 15-30 Years Land and Improvements 869 835 Indefinite Furniture & Fixtures 285 218 3-7 Years Computer Equipment 299 465 3-5 Years Machinery & Equipment 1,151 973 3-15 Years Leasehold Improvements 181 181 Shorter of Lease Term or Asset Life 5,338 5,249 Less: Accumulated Depreciation (1,346 ) (1,295 ) $ 3,992 $ 3,954 Depreciation expense for the six months ended March 31, 2020 and 2019 was $92 and $152, respectively. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 6 Months Ended |
Mar. 31, 2020 | |
INTANGIBLE ASSETS [Abstract] | |
INTANGIBLE ASSETS | 5. INTANGIBLE ASSETS A summary of intangible assets and the estimated useful lives used in the computation of amortization is as follows: March 31, 2020 September 30, 2019 Life Customer Relationships $ 13,762 $ 13,762 15-20 Years Trademarks / Names 2,251 2,251 20 Years Other 978 978 2-5 Years 16,991 16,991 Less: Accumulated Amortization (3,879 ) (3,393 ) $ 13,112 $ 13,598 Amortization expense for the six months ended March 31, 2020 and 2019 was $486 and $444, respectively. |
GOODWILL
GOODWILL | 6 Months Ended |
Mar. 31, 2020 | |
GOODWILL [Abstract] | |
GOODWILL | 6. GOODWILL The Company’s goodwill carrying amounts relate to the acquisitions in the Global Logistics Services, Manufacturing and Life Sciences businesses. As of March 31, 2020, the Company paid $172 in tax gross up consideration to former owners and recorded an additional $116 of goodwill related to the Phospho acquistion. The composition of the goodwill balance at March 31, 2020 and September 30, 2019 was as follows: March 31, 2020 September 30, 2019 Global Logistics Services $ 5,655 $ 5,655 Manufacturing 5,046 5,046 Life Sciences 2,940 2,824 $ 13,641 $ 13,525 |
NOTES PAYABLE - BANKS
NOTES PAYABLE - BANKS | 6 Months Ended |
Mar. 31, 2020 | |
NOTES PAYABLE - BANKS [Abstract] | |
NOTES PAYABLE - BANKS | 7. NOTES PAYABLE - BANKS (A) Santander Bank Facility On October 17, 2017, the Janel Group subsidiaries (collectively the “Janel Group Borrowers”), with the Company as a guarantor, entered into a Loan and Security Agreement (the “Santander Loan Agreement”) with Santander Bank, N.A. (“Santander”) with respect to a revolving line of credit facility (the “Santander Facility”). As amended in March 2018, November 2018 and March 2020, the Santander Facility currently provides that the Janel Group Borrowers can borrow up to $17,000 limited to 85% of the Janel Group Borrowers’ aggregate outstanding eligible accounts receivable, subject to adjustment as set forth in the Santander Loan Agreement. Interest accrues on the Santander Facility at an annual rate equal to, at the Janel Group Borrowers’ option, prime plus 0.50%, or LIBOR (30, 60 or 90 day) plus 2.25% subject to a LIBOR floor of 75 basis points. The Janel Group Borrowers’ obligations under the Santander Facility are secured by all of the assets of the Janel Group Borrowers, while the Santander Loan Agreement contains customary terms and covenants. The Santander Facility matures on October 17, 2022, unless earlier terminated or renewed. As a result of its terms, the Santander Facility is classified as a current liability on the consolidated balance sheet. At March 31, 2020, outstanding borrowings under the Santander Facility were $7,533, representing 82.33% of the available amount thereunder, and interest was accruing at an effective interest rate of 3.26%. The Janel Group Borrowers were in compliance with the covenants defined in the Santander Loan Agreement at March 31, 2020 and September 30, 2019. (B) First Merchants Bank Credit Facility On March 21, 2016, as amended in August 2019, Indco entered into a Credit Agreement (the “First Merchants Credit Agreement”) with First Merchants Bank with respect to a $5,500 term loan and $1,000 (limited to the borrowing base and reserves) revolving loan (together, the “First Merchants Facility”). Interest accrues on the term loan at an annual rate equal to the one-month LIBOR plus either 2.75% (if Indco’s total funded debt to EBITDA ratio is less than 2:1), or 3.5% (if Indco’s total funded debt to EBITDA ratio is greater than or equal to 2:1). Interest accrues on the revolving loan at an annual rate equal to the one-month LIBOR plus 2.75%. Indco’s obligations under the First Merchants Facility are secured by all of Indco’s assets and are guaranteed by the Company, and the Company’s guarantee of Indco’s obligations is secured by a pledge of the Company’s Indco shares. The First Merchants Credit Agreement contains customary terms and covenants. The First Merchants Facility will expire on August 30, 2024 (subject to earlier termination as provided in the Credit Agreement) unless renewed. As of March 31, 2020, there were no outstanding borrowings under the revolving loan and $4,931 of borrowings under the term loan, with interest accruing on the term loan at an effective interest rate of 5.08%. The Company was in compliance with the covenants defined in the First Merchants Credit Agreement at March 31, 2020 and September 30, 2019. March 31, 2020 September 30, 2019 Long Term Debt * $ 4,931 $ 5,455 Less Current Portion (786 ) (786 ) $ 4,145 $ 4,669 * Note: Long Term Debt is due in monthly installments of $71 plus monthly interest, at LIBOR plus 3.75% to 4.75% per annum. The note is collateralized by all of Indco’s assets and guaranteed by Janel. (C) First Northern Bank of Dixon On June 21, 2018, AB Merger Sub, Inc., a wholly-owned, indirect subsidiary of the Company, entered into a Business Loan Agreement (the “First Northern Loan Agreement”) with First Northern Bank of Dixon (“First Northern”), with respect to a $2,025 First Northern Term Loan (the “First Northern Term Loan”). The proceeds of the First Northern Term Loan were used to fund a portion of the merger consideration to acquire Antibodies. Interest was to accrue on the First Northern Term Loan at an annual rate based on the five-year Treasury constant maturity (index) plus 2.50% (margin) for years one through five then adjusted and fixed for years six through ten using the same index and margin. The borrower’s and the Company’s obligations to First Northern under the First Northern Loan Agreement are secured by certain real property owned by Antibodies as of the closing of the Antibodies merger. The First Northern Loan Agreement contains customary terms and covenants and matures on June 14, 2028 (subject to earlier termination). On November 18, 2019, Antibodies modified and refinanced its existing credit facilities with First Northern Bank. The existing First Northern Term Loan was increased to $2,235, the initial interest rate decreased to 4.18%, and the maturity date was extended to November 14, 2029, with all other terms, covenants and conditions substantially unchanged. The existing revolving credit facility was expanded to $500, the interest rate decreased to 6.0%, and the maturity date was extended to October 1, 2020, with all other terms, covenants and conditions substantially unchanged. Additionally, Antibodies entered into a new business loan agreement (“Solar Loan”) which provided for a $125 term loan in connection with a potential expansion of solar generation capacity on the Antibodies property. The initial interest rate on the facility is 4.43%, subject to adjustment in five years. As of March 31, 2020, there were no outstanding borrowings under the revolving credit facility and $2,217 of borrowings under the term loan. March 31, 2020 September 30, 2019 Long Term Debt * $ 2,217 $ 1,975 Less Current Portion (52 ) (42 ) $ $2,165 $ 1,933 * Note: Long Term Debt is due in monthly principal and interest installments of $12 plus monthly interest, at an effective interest rate of 4.18% as of March 31, 2020 and 5.28% as of September, 2019, per annum. The note is collateralized by real property owned by Antibodies and guaranteed by Janel. The Company was in compliance with the covenants defined in the First Northern Loan Agreement at March 31, 2020 and September 30, 2019. |
SUBORDINATED PROMISSORY NOTES
SUBORDINATED PROMISSORY NOTES | 6 Months Ended |
Mar. 31, 2020 | |
SUBORDINATED PROMISSORY NOTES [Abstract] | |
SUBORDINATED PROMISSORY NOTES | 8. SUBORDINATED PROMISSORY NOTES On June 22, 2018, in connection with the Antibodies acquisition, AB HoldCo, Inc. (“AB HoldCo”), a wholly-owned subsidiary of the Company, entered into two subordinated promissory notes (“AB HoldCo Subordinated Promissory Notes”) with certain former shareholders of Antibodies. As the result of the merger of AB HoldCo into Antibodies, Antibodies became the obligor under the AB HoldCo Subordinated Promissory Notes. Both of the AB HoldCo Subordinated Promissory Notes are guaranteed by the Company and are subordinate to the terms of any credit agreement, loan agreement, indenture, promissory note, guaranty or other debt instrument pursuant to which the obligor or any affiliate of the obligor incurs, borrows, extends, guarantees, renews or refinances any indebtedness for borrowed money or other extensions of credit with any federal or state bank or other institutional lender and are unsecured. Each of the AB HoldCo Subordinated Promissory Notes has a 4% annual interest rate payable in arrears on the last business day of each calendar quarter, commencing on September 30, 2018, and the full outstanding principal balance and accrued, unpaid interest is due on June 22, 2021. Both notes are subject to prepayment in whole or in part, without premium or penalty, of the outstanding principal amount of the notes, together with all accrued interest on such principal amount up to the date of prepayment. Any prepayment shall be applied first to accrued but unpaid interest, and then to outstanding principal. As of March 31, 2020, and September 30, 2019, amounts outstanding under the two AB HoldCo Subordinated Promissory Notes was $344 and is included in the l ong term portion of subordinated promissory notes. On November 20, 2018, in connection with the Honor acquisition, Janel Group, a wholly-owned subsidiary of the Company, entered into a subordinated promissory note (“Janel Group Subordinated Promissory Note”) with a former owner of Honor. The Janel Group Subordinated Promissory Note is guaranteed by the Company. The Janel Group Subordinated Promissory Note is subordinate to and junior in right of payment for principal interest premiums and other amounts payable to the Santander Bank Facility and the First Merchants Bank Credit Facility. The Janel Group Subordinated Promissory Note, has a 6.75% annual interest rate, payable in twelve equal consecutive quarterly installments of principal and interest, on the last day of January, April, July and October beginning in January 2019, and shall be due and payable each in the amount of $42. The outstanding principal and accrued and unpaid interest are payable in a single payment on the three-year anniversary date of November 20, 2021. The note is subject to prepayment in whole or in part, without premium or penalty, of the outstanding principal amount of the notes, together with all accrued but unpaid interest on such principal amount up to the date of prepayment. As of March 31, 2020, and September 30, 2019, the amounts outstanding under the Janel Group Subordinated Promissory Note was $276 and $349, respectively. March 31, September 30, Long term portion of subordinated promissory notes $ 121 $ 197 Current portion of subordinated promissory note 155 152 $ 276 $ 349 |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 6 Months Ended |
Mar. 31, 2020 | |
STOCKHOLDERS' EQUITY [Abstract] | |
STOCKHOLDERS' EQUITY | 9. STOCKHOLDERS’ EQUITY Janel is authorized to issue 4,500,000 shares of common stock, par value $0.001. In addition, the Company is authorized to issue 100,000 shares of preferred stock, par value $0.001. The preferred stock is issuable in series with such voting rights, if any, designations, powers, preferences and other rights and such qualifications, limitations and restrictions as may be determined by the Company’s board of directors or a duly authorized committee thereof, without stockholder approval. The board of directors may fix the number of shares constituting each series and increase or decrease the number of shares of any series. (A) Preferred Stock Series B Convertible Preferred Stock Shares of the Company’s Series B Convertible Preferred Stock (the “Series B Stock”) are convertible into shares of the Company’s $0.001 par value common stock at any time on a one-share (of Series B Stock) for ten-shares (of common stock) basis. On September 6, 2019, a holder of the Series B Stock converted 640 shares of Series B Stock into 6,400 shares of the Company’s Common Stock. Series C Cumulative Preferred Stock Shares of the Company’s Series C Cumulative Preferred Stock (the “Series C Stock”) are entitled to receive annual dividends at a rate of 5% per annum of the original issuance price of $10, when and if declared by the Company’s board of directors, with such rate increased by 1% annually beginning on January 1, 2019. Such rate is to increase on each January 1 thereafter for four years to a maximum rate of 9%. The dividend rate of the Series C Stock as of March 31, 2020 was 7%. In the event of liquidation, holders of the Series C Stock shall be paid an amount equal to the original issuance price, plus any accrued but unpaid dividends thereon. Shares of the Series C Stock may be redeemed by the Company at any time upon notice and payment of the original issuance price, plus any accrued but unpaid dividends thereon. The liquidation value of the Series C Stock was $12,867 as of March 31, 2020. For the six months ended March 31, 2020, the Company declared dividends on the Series C Stock of $326. As of March 31, 2020, the Company had accrued dividends of $1,366. (B) Equity Incentive Plan On May 12, 2017, the Company adopted the 2017 Equity Incentive Plan which was amended on May 8, 2018 (as amended, the “2017 Plan”). Under the 2017 Plan, non-statutory stock options, restricted stock awards and stock appreciation rights with respect to shares of the Company’s common stock may be granted to directors, officers, employees of and consultants to the Company. Participants and all terms of any awards under the Plan are at the discretion of the Company’s Compensation Committee of the board of directors. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 6 Months Ended |
Mar. 31, 2020 | |
STOCK-BASED COMPENSATION [Abstract] | |
STOCK-BASED COMPENSATION | 10. STOCK-BASED COMPENSATION On October 30, 2013, the board of directors of the Company adopted the Company’s 2013 Non-Qualified Stock Option Plan (the “2013 Option Plan”) providing for options to purchase up to 100,000 shares of the Company’s common stock for issuance to directors, officers, employees of and consultants to the Company and its subsidiaries. Total stock-based compensation for the six months ended March 31, 2020 and 2019 amounted to $149 and $236, respectively, and was included in selling, general and administrative expense in the Company’s statements of operations. (A) Stock Options The Company uses the Black-Scholes option pricing model to estimate the fair value of our share-based awards. In applying this model, we use the following assumptions: • Risk-free interest rate - We determine the risk-free interest rate by using a weighted average assumption equivalent to the expected term based on the U.S. Treasury constant maturity rate. • Expected term - We estimate the expected term of our options on the average of the vesting date and term of the option. • Expected volatility - We estimate expected volatility using daily historical trading data of a peer group. • 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. The fair values of our employee option awards were estimated using the assumptions below, which yielded the following weighted average grant date fair values for the periods presented: Six Months Ended March 31, 2020 Risk-free Interest Rate 1.59% Expected Option Term in Years 5.5-6.5 Expected Volatility 101.2% - 101.7% Dividend Yield 0% Weighted Average Grant Date Fair Value $6.97 - $7.33 Options for Employees Number of Options Weighted Average Exercise Price Weighted Remaining Contractual Term (in years) Aggregate Intrinsic Value (in thousands) Outstanding Balance at September 30, 2019 110,837 $ 5.05 5.98 $ 438.06 Granted 7,500 $ 9.00 9.75 $ — Exercised (3,841 ) $ 8.17 — $ — Outstanding Balance at March 31, 2020 114,496 $ 5.21 5.67 $ 290.88 Exercisable on March 31, 2020 96,792 $ 4.62 5.15 $ 290.88 The aggregate intrinsic value in the above table was calculated as the difference between the closing price of the Company’s common stock at March 31, 2020 of $7.50 per share and the exercise price of the stock options that had strike prices below such closing price. As of March 31, 2020, there was approximately $51 of total unrecognized compensation expense related to the unvested employee stock options which is expected to be recognized over a weighted average period of less than one year. Options for Non-Employees There were no non-employee options awarded during the six-month period ended March 31, 2020. During the six-month period ended March 31, 2020, 15,000 non-employee options were forfeited. Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in thousands) Outstanding Balance at September 30, 2019 51,053 $ 7.58 7.80 $ 72.68 Forfeited (15,000 ) $ 8.04 — $ — Outstanding Balance at March 31, 2020 36,053 $ 7.38 7.26 $ 20.40 Exercisable on March 31, 2020 6,053 $ 4.13 6.50 $ 20.40 The aggregate intrinsic value in the above table was calculated as the difference between the closing price of our common stock at March 31, 2020, of $7.50 per share and the exercise price of the stock options that had strike prices below such closing price. As of March 31, 2020, there was approximately $32 of total unrecognized compensation expense related to the unvested stock options, which is expected to be recognized over a weighted average period of less than one year. Liability classified share-based awards Additionally, during the six months ended March 31, 2020, 6,880 options were granted with respect to Indco’s common stock. The Company uses the Black-Scholes option pricing model to estimate the fair value of Indco’s share-based awards. In applying this model, the Company used the following assumptions: Six Months Ended March 31, 2020 Risk-free Interest Rate 1.59% Expected Option Term in Years 5.5 - 6.5 Expected Volatility 101.2% - 101.7% Dividend Yield 0% Weighted Average Grant Date Fair Value $8.59 - $9.03 Number of Options Weighted Average Exercise Weighted Average Remaining Contractual Aggregate Intrinsic Value (in thousands) Outstanding Balance at September 30, 2019 32,133 $ 8.85 7.34 $ 85.45 Granted 6,880 $ 11.08 9.75 $ — Outstanding Balance at March 31, 2020 39,013 $ 9.24 7.31 $ 85.45 Exercisable on March 31, 2020 23,343 $ 7.98 6.49 $ 85.45 The aggregate intrinsic value in the above table was calculated as the difference between the valuation price of Indco’s common stock at March 31, 2020 of $11.08 per share and the exercise price of the stock options that had strike prices below such closing price. The liability classified awards were measured at fair value at each reporting date until the final measurement date, which was the date of completion of services required to earn the option. The accrued compensation cost related to these options was approximately $302 and $172 as of March 31, 2020 and September 30, 2019, respectively, and is included in other liabilities in the consolidated financial statement. The cost associated with the options issued on each grant date is being recognized ratably over the period of service required to earn each tranche of options. Upon vesting, the options continue to be accounted for as a liability in accordance with ASC 480-10-25-8 and are measured in accordance with ASC 480-10-35 at every reporting period until the options are settled. Changes in the fair value of the vested options are recognized in earnings in the consolidated financial statements. The options are classified as liabilities, and the underlying shares of Indco’s common stock also contain put options which result in their classification as mandatorily redeemable securities. While their redemption does not occur on a fixed date, there is an unconditional obligation for the Company to repurchase the shares upon death, which is certain to occur at some point in time. As of March 31, 2020, there was approximately $66 of total unrecognized compensation expense related to the unvested Indco stock options. This expense is expected to be recognized over a weighted average period of less than one year. (B) Restricted Stock During the six months ended March 31, 2020, there were no shares of restricted stock granted. Under the 2017 Plan, each grant of restricted stock vests over a three-year period, and the cost to the recipient is zero. Restricted stock compensation expense, which is a non-cash item, is being recognized in the Company’s financial statements over the vesting period of each restricted stock grant. The following table summarizes the status of our employee unvested restricted stock under the 2017 Plan for the six months ended March 31, 2020: Restricted Stock (in thousands) Weighted Average Grant Date Fair Value Weighted Average Remaining Contractual Term (in years) Unvested at September 30, 2019 5,000 $ 8.01 0.61 Vested — $ — — Unvested at March 31, 2020 5,000 $ 8.01 0.11 As of March 31, 2020, there was approximately $2 of total unrecognized compensation cost related to unvested employee restricted stock. The cost is expected to be recognized over a weighted-average period of approximately 0.11 years. The following table summarizes the status of our non-employee unvested restricted stock under the 2017 Plan for the six months ended March 31, 2020: Restricted Stock (in thousands) Weighted Average Grant Date Fair Value Weighted Average Remaining Contractual Term (in years) Unvested at September 30, 2019 26,667 $ 8.04 0.88 Vested — $ — — Unvested at March 31, 2020 26,667 $ 8.04 0.38 As of March 31, 2020, there was approximately $30 of unrecognized compensation cost related to non-employee unvested restricted stock. The cost is expected to be recognized over a weighted-average period of approximately 0.38 years. As of March 31, 2020, included in accrued expenses and other current liabilities was $159 which represents 18,333 shares of restricted stock that vested but were not issued. |
INCOME PER COMMON SHARE
INCOME PER COMMON SHARE | 6 Months Ended |
Mar. 31, 2020 | |
INCOME PER COMMON SHARE [Abstract] | |
INCOME PER COMMON SHARE | 11. INCOME PER COMMON SHARE The following table provides a reconciliation of the basic and diluted income (loss) per share (“EPS”) computations for the three and six months ended March 31, 2020 and 2019 (in thousands, except share and per share data): For the Three Months Ended March 31, For the Six Months Ended March 31, 2020 2019 2020 2019 Income: Net income (loss) $ (937 ) $ 175 $ (1,057 ) $ 719 Preferred stock dividends (175 ) (148 ) (326 ) (270 ) Net Income (loss) available to common stockholders $ (1,112 ) $ 27 $ (1,383 ) $ 449 Common Shares: Basic - weighted average common shares 865,985 847,784 865,630 847,621 Effect of dilutive securities: Stock options — 51,097 — 54,644 Restricted stock — 20,369 — 19,162 Convertible preferred stock — 12,710 — 12,710 Diluted - weighted average common stock $ 865,985 $ 931,960 $ 865,630 $ 934,137 Income per Common Share: Basic - Net income (loss) $ (1.08 ) $ 0.21 $ (1.22 ) $ 0.85 Preferred stock dividends (0.21 ) (0.17 ) (0.38 ) (0.32 ) Net Income (loss) available to common stockholders $ (1.29 ) $ 0.04 $ (1.60 ) $ 0.53 Diluted - Net income (loss) $ (1.08 ) $ 0.18 $ (1.22 ) $ 0.77 Preferred stock dividends (0.21 ) (0.15 ) (0.38 ) (0.29 ) Net income (loss) available to common stockholders $ (1.29 ) $ 0.03 $ (1.60 ) $ 0.48 The computation for the diluted number of shares excludes unvested restricted stock, unexercised stock options and unexercised warrants that are anti-dilutive. There were no anti-dilutive shares for the six-month periods ended March 31, 2020. Potentially dilutive securities as of March 31, 2020 and 2019 were as follows: March 31, 2020 2019 Employee Stock Options 114,496 118,798 Non-employee Stock Options 36,053 51,053 Employee Restricted Stock 5,000 5,000 Non-employee Restricted Stock 26,667 26,667 Convertible Preferred Stock 6,310 12,710 188,526 214,228 |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Mar. 31, 2020 | |
INCOME TAXES [Abstract] | |
INCOME TAXES | 12. INCOME TAXES The Company’s estimated fiscal 2020 and 2019 blended U.S. federal statutory corporate income tax rate of 10.1% and 25.2%, respectively, were applied in the computation of the Company’s income tax provision for the six months ended and 2019. The reconciliation of income tax computed at the Federal statutory rate to the benefit (provision) for income taxes for the six months ended March 31, 2020 is as follows: March 31, 2020 March 31, 2019 Federal taxes at statutory rates $ 247 $ (204 ) Permanent differences (28 ) (13 ) Other (63 ) - State and local taxes (37 ) (36 ) Income tax benefit (expense) $ 119 $ (253 ) |
BUSINESS SEGMENT INFORMATION
BUSINESS SEGMENT INFORMATION | 6 Months Ended |
Mar. 31, 2020 | |
BUSINESS SEGMENT INFORMATION [Abstract] | |
BUSINESS SEGMENT INFORMATION | 13. BUSINESS SEGMENT INFORMATION As discussed above in note 1, the Company operates in three reportable segments: 1) Global Logistics Services, 2) Manufacturing and 3) Life Sciences, supported by a corporate group which conducts activities that are non-segment specific. The following tables present selected financial information about the Company’s reportable segments for the three and six months ended March 31, 2020: For the three months ended March 31, 2020 Consolidated Global Logistics Services Manufacturing Life Sciences Corporate Revenue $ 19,121 $ 15,328 $ 2,056 $ 1,737 $ — Forwarding expenses and cost of revenues 13,125 11,615 908 602 — Gross profit 5,996 3,713 1,148 1,135 — Selling, general and administrative 6,584 3,952 701 1,071 860 Amortization of intangible assets 243 — — — 243 Operating (loss) income (831 ) (239 ) 447 64 (1,103 ) Interest expense (income) net 141 54 66 24 (3 ) Identifiable assets 55,868 14,012 2,425 9,650 26,781 Capital expenditures 34 17 — 17 — For the six months ended March 31, 2020 Consolidated Global Logistics Services Manufacturing Life Sciences Corporate Revenue $ 38,942 $ 31,407 $ 3,926 $ 3,609 $ — Forwarding expenses and cost of revenues 26,659 23,702 1,753 1,204 — Gross profit 12,283 7,705 2,173 2,405 — Selling, general and administrative 12,669 7,590 1,383 2,051 1,645 Amortization of intangible assets 486 — — — 486 Operating (loss) income (872 ) 115 790 354 (2,131 ) Interest expense (income) net 304 120 138 51 (5 ) Identifiable assets 52,868 14,012 2,425 9,650 26,781 Capital expenditures 131 64 23 44 — The following tables present selected financial information about the Company’s reportable segments for the three and six months ended March 31, 2019: For the three months ended March 31, 2019 Consolidated Global Logistics Services Manufacturing Life Sciences Corporate Revenue $ 20,969 $ 16,865 $ 2,452 $ 1,652 $ — Forwarding expenses and cost of revenues 14,599 12,957 1,077 565 — Gross profit 6,370 3,908 1,375 1,087 — Selling, general and administrative 5,692 3,468 759 724 741 Amortization of intangible assets 236 — — — 236 Operating income (loss) 442 440 616 363 (977 ) Interest expense (income) net 198 127 36 37 (2 ) Identifiable assets 55,348 20,825 2,418 6,672 25,433 Capital expenditures 71 2 — 69 — For the six months ended March 31, 2019 Consolidated Global Logistics Services Manufacturing Life Sciences Corporate Revenue $ 43,296 $ 35,670 $ 4,533 $ 3,093 $ — Forwarding expenses and cost of revenues 30,439 27,375 2,010 1,054 — Gross profit 12,857 8,295 2,523 2,039 — Selling, general and administrative 11,081 6,828 1,467 1,431 1,355 Amortization of intangible assets 444 — — — 444 Operating income (loss) 1,332 1,467 1,056 608 (1,799 ) Interest expense (income) net 360 225 76 64 (5 ) Identifiable assets 55,348 20,825 2,418 6,672 25,433 Capital expenditures 253 16 41 196 — |
RISKS AND UNCERTAINTIES
RISKS AND UNCERTAINTIES | 6 Months Ended |
Mar. 31, 2020 | |
RISKS AND UNCERTAINTIES [Abstract] | |
RISKS AND UNCERTAINTIES | 14. RISKS AND UNCERTAINTIES (A) Currency Risks The nature of Janel’s operations requires it to deal with currencies other than the U.S. Dollar. As a result, the Company is exposed to the inherent risks of international currency markets and governmental interference. A number of countries where Janel maintains offices or agent relationships have currency control regulations. The Company attempts to compensate for these exposures by accelerating international currency settlements among those agents. (B) Concentration of Credit Risk The Company’s assets that are exposed to concentrations of credit risk consist primarily of cash and receivables from customers. The Company places its cash with financial institutions that have high credit ratings. The receivables from clients are spread over many customers. The Company maintains an allowance for uncollectible accounts receivable based on expected collectability and performs ongoing credit evaluations of its customers’ financial condition. We have experienced heightened customer credit risk as a result of the negative impact to customers’ financial condition, employment levels and consumer confidence arising from economic disruptions related to the COVID-19 pandemic, and expect that our risk in this area will remain high as long as the disruptions persist. (C) Legal Proceedings Janel is occasionally subject to claims and lawsuits which typically arise in the normal course of business. While the outcome of these claims cannot be predicted with certainty, management does not believe that the outcome of any of these legal matters will have a material adverse effect on the Company’s business, results of operations, financial condition or cash flows. In December 2017, Janel Group received a Notice of Copyright Infringement letter from counsel for Warren Communications News, Inc. (“Warren”), the publisher of the International Trade Today (“ITT”) newsletter. The letter alleges that Janel Group infringed upon Warren’s registered copyrights in its ITT newsletter (the “Warren Matter”). As of March 31, 2020, the Company had a liability for settlement costs related to the Warren Matter, which is included in accrued expenses and other current liabilities. On May 11, 2020, the parties reached a settlement agreement and release to resolve any and all concerns between the parties, voluntarily and without admission of copyright infringement. (D) COVID-19 In March 2020, the World Health Organization declared the outbreak of a novel coronavirus (COVID-19) as a pandemic. As a result, public health measures have been taken by federal, state and local governments to minimize exposure to and contain the virus. Measures intended to reduce the spread of COVID-19, such as quarantines, travel restrictions and other governmental restrictions such as social distancing protocols, have has, and are likely to continue to have, an adverse impact on economic activity, including with respect to business closures, increasing unemployment levels and financial market instability. The extent or duration of the disruption on global, national, and local economies cannot be reasonably estimated at this time. However, should the pandemic and its economic impact continue for an extended period, the Company’s future business operations, including its results of operations, cash flows and financial position could be significantly affected. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Mar. 31, 2020 | |
COMMITMENTS AND CONTINGENCIES [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 15. COMMITMENTS AND CONTINGENCIES On February 4, 2020, Indco, Inc., a majority-owned subsidiary of the Company, entered into a Purchase and Sale Agreement with 4040 Earnings Way, LLC (“Seller”) to acquire from Seller the land and building which serves as the Indco office and manufacturing facility in New Albany, Indiana, for a purchase price of $845. Indco anticipates that the purchase price will be financed with cash from operations and a loan of up to $700 from First Merchants Bank secured by the subject property. Closing is expected to occur during the third quarter of fiscal 2020, ending June 30, 2020. |
LEASES
LEASES | 6 Months Ended |
Mar. 31, 2020 | |
LEASES [Abstract] | |
LEASES | 16. LEASES The Company has operating leases for office and warehouse space in all districts where it conducts business. As of March 31, 2020, the remaining terms of the Company’s operating leases were between one and 58 months and certain lease agreements contain provisions for future rent increases. Payments due under the lease contracts include the minimum lease payments that the Company is obligated to make under the non-cancelable initial terms of the leases as the renewal terms are at the Company’s option and the Company is not reasonably certain to exercise those renewal options at lease commencement.. The components of lease cost for the six-month period ended March 31, 2020 are as follows: Six Months Ended March 31, 2020 Operating lease cost $ 353 Short-term lease cost 68 Total lease cost $ 421 Rent expense for the six-month period March 31, 2019 was $372. Operating lease right of use asset, current portion of operating lease liabilities and long-term operating lease liabilities reported in the consolidated balance sheets for operating leases as of March 31, 2020 were $1,599, $479 and $1,142, respectively. During the three months ended March 31, 2020, the Company entered into a new operating lease and recorded an addition $857 in operating lease right of use asset of and corresponding lease liabilities. As of March 31, 2020, the weighted-average remaining lease term and the weighted-average discount rate related to the Company’s operating leases were 3.9 years and 6.58%, respectively. Cash paid for amounts included in the measurement of operating lease obligations were $410 for the six months ended March 31, 2020. Future minimum lease payments under non-cancelable operating leases as of March 31, 2020 are as follows: 2020 $ 493 2021 469 2022 414 2023 241 2024 221 Total undiscounted lease payments 1,838 Less: Imputed interest (217 ) Total lease obligations $ 1,621 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Mar. 31, 2020 | |
SUBSEQUENT EVENTS [Abstract] | |
SUBSEQUENT EVENTS | 17. SUBSEQUENT EVENTS CARES Act Loan The Coronavirus Aid, Relief and Economic Security Act, Section 7(a)(36) of the Small Business Act (the “CARES Act”), which was signed into law in March 2020, established the Paycheck Protection Program (the “PPP”). The PPP authorizes up to $349 billion in forgivable loans to small businesses. Loan amounts are forgiven to the extent proceeds are used to cover documented payroll, mortgage interest, rent and utility costs over an eight-week measurement period following loan funding. Loans have a maturity of two years and bear interest at a rate of 1.00% per annum. Prepayments may be made at any time prior to maturity without penalty. On April 19, 2020, (the “Loan”) from Santander pursuant to the PPP under the The Loan matures on April 19, 2022 and bears interest at a rate of 1.00% per annum, payable monthly commencing on November 19, 2020. The Note may be prepaid by Janel at any time prior to maturity with no prepayment penalties. Funds from the Loan may only be used for payroll costs, costs used to continue group health care benefits, mortgage payments, rent and utilities (collectively, “Qualifying Expenses”). Under the terms of the PPP, certain amounts of the Loan may be forgiven if they are used for Qualifying Expenses as described in the CARES Act. The Company's participation in the PPP subsequent to quarter end should allow the Company to avoid significant staff reductions in the near term. As discussed in note 14 (C) above, the Company received a letter in December 2017 from legal counsel representing Warren in which Warren made certain allegations against the Company of copyright infringement concerning an electronic newsletter by Warren. On May 11, 2020, the parties reached a settlement agreement and release to resolve any and all concerns between the parties, voluntarily and without admission of copyright infringement. As of March 31, 2020, the Company had a liability for settlement costs related to the Warren Matter, which is included in accrued expenses and other current liabilities. |
BASIS OF PRESENTATION, SUMMAR_2
BASIS OF PRESENTATION, SUMMARY OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Mar. 31, 2020 | |
BASIS OF PRESENTATION, SUMMARY OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
Basis of consolidation | Basis of consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, as well as Indco, of which Janel owns 91.65%, with a non-controlling interest held by existing Indco management. The Indco non-controlling interest is mandatorily redeemable and is recorded as a liability. All intercompany transactions and balances have been eliminated in consolidation. |
Uses of estimates in the preparation of financial statements | Uses of estimates in the preparation of financial statements The preparation of financial statements in conformity with generally accepted accounting principles in the United States (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of financial statements, as well as the reported amounts of revenues and expenses during the reporting period. The most critical estimates made by the Company are those relating to accounts receivables valuation, the useful lives of long-term assets, accrual of cost related to ancillary services the Company provides and accrual of tax expense on an interim basis. |
Cash | Cash The Company maintains cash balances at various financial institutions. Accounts at each institution are insured by the Federal Deposit Insurance Corporation up to $250. The Company’s accounts at these institutions may, at times, exceed the federally insured limits. The Company has not experienced any losses in such accounts. |
Accounts receivable and allowance for doubtful accounts receivable | Accounts receivable and allowance for doubtful accounts receivable Accounts receivable are recorded at the contractual amount. The Company records its allowance for doubtful accounts based upon its assessment of various factors. The Company considers historical collection experience, the age of the accounts receivable balances, credit quality of the Company’s customers, any specific customer collection issues that have been identified, current economic conditions, and other factors that may affect the customers’ ability to pay. The Company writes off accounts receivable balances that have aged significantly once all collection efforts have been exhausted and the receivables are no longer deemed collectible from the customer. The allowance for doubtful accounts as of March 31, 2020 |
Inventory | Inventory Inventory is valued at the lower of cost (using the first-in, first-out method) or net realizable value. The Company maintains an inventory valuation reserve to provide for slow moving and obsolete inventory, inventory not meeting quality control standards and inventory subject to expiration for its Antibodies business. The products of Antibodies require the initial manufacture of multiple batches to determine if quality standards can consistently be met. In addition, the Company will produce larger batches of established products than current sales requirements due to economies of scale. The manufacturing process for these products, therefore, has and will continue to produce quantities in excess of forecasted usage. The Company values acquired manufactured antibody inventory based on a three-year forecast. Inventory quantities in excess of the forecast are not valued due to uncertainty over salability. Amounts are charged to the reserve when the Company scraps or disposes of inventory. |
Property and equipment and depreciation policy | Property and equipment and depreciation policy Property and equipment are recorded at cost. Property and equipment acquired in business combinations are initially recorded at fair value. Depreciation is provided for in amounts sufficient to amortize the costs of the related assets over their estimated useful lives on the straight-line and accelerated methods for both financial reporting and income tax purposes. Maintenance and repairs are recorded as expenses when incurred. |
Goodwill | Goodwill The Company records as goodwill the excess of purchase price over the fair value of the tangible and identifiable intangible assets acquired in a business combination. Under current authoritative guidance, goodwill is not amortized but is tested for impairment annually (on September 30) as well as when an event or change in circumstance indicates impairment may have occurred. Goodwill is tested for impairment by comparing the fair value of the Company’s individual reporting units to their carrying amount to determine if there is potential goodwill impairment. If the fair value of the reporting unit is less than the carrying value, an impairment loss is recorded to the extent that the implied fair value of the goodwill of the reporting unit is less than its carrying value. If there is a material change in economic conditions, including as a result of continued disruption due to the coronavirus (COVID-19) pandemic, or other circumstances influencing the estemate of future cas flows or significantly affect the fair value of our reporting units, the Company could be required to recognized impairment charges in the future. There were no indicators of impairment of goodwill as of March 31, 2020 and September 30, 2019. The fair value of our reporting units was in excess of carrying value and goodwill was not deemed to be impaired as of March 31, 2020 |
Intangibles and long-lived assets | Intangibles and long-lived assets Long-lived assets, including fixed assets and intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. In reviewing for impairment, the carrying value of such assets is compared to the estimated undiscounted future cash flows expected from the use of the assets and their eventual disposition. If such cash flows are not sufficient to support the asset’s recorded value, an impairment charge is recognized to reduce the carrying value of the long-lived asset to its estimated fair value. The determination of future cash flows, as well as the estimated fair value of long-lived assets, involves significant estimates on the part of management. If there is a material change in economic conditions, including as a result of continued disruption due to the coronavirus (COVID-19) pandemic, or other circumstances influencing the estimate of future cash flows or fair value, the Company could be required to recognize impairment charges in the future. There were no indicators of impairment of long-lived assets as of March 31, 2020 |
Business segment information | Business segment information The Company operates in three reportable segments: Global Logistics Services, Manufacturing and Life Sciences. The Company’s Chief Executive Officer regularly reviews financial information at the reporting segment level in order to make decisions about resources to be allocated to the segments and to assess their performance. |
Revenues and revenue recognition | Revenues and revenue recognition Adoption of ASC Topic 606, “Revenue from Contracts with Customers” On October 1, 2018, the Company adopted ASU 2014-09, Revenue from Contracts with Customers The Company recorded an increase Global Logistics Services Revenue Recognition Revenue is recognized upon transfer of control of promised services to customers. With respect to its Global Logistics Services segment, the Company has determined that in general each shipment transaction or service order constitutes a separate contract with the customer. When the Company provides multiple services to a customer, different contracts may be present for different services. The Company typically satisfies its performance obligations as services are rendered at a point in time. A typical shipment would include services rendered at origin, such as pick-up and delivery to port, freight services from origin to destination port and destination services, such as customs clearance and final delivery. The Company measures the performance of its obligations as services are completed at a point in time during the life of a shipment, including services at origin, freight and destination. The Company fulfills nearly all of its performance obligations within a one to two-month period. The Company evaluates whether amounts billed to customers should be reported as gross or net revenue. Generally, revenue is recorded on a gross basis when the Company is primarily responsible for fulfilling the promise to provide the services, when it has discretion in setting the prices for the services to the customers, and the Company has the ability to direct the use of the services provided by the third party. Revenue is recognized on a net basis when we do not have latitude in carrier selection or to establish rates with the carrier. In the Global Logistics Services segment, the Company disaggregates its revenues by its four primary service categories: ocean import and export, freight forwarding, customs brokerage and air import and export. A summary of the Company’s revenues disaggregated by major service lines for the three and six months ended March 31, 2020 Three Months Ended March 31, Six Months Ended March 31, Service Type 2020 2020 Ocean import and export $ 5,880 $ 11,737 Freight forwarding 2,653 6,462 Customs brokerage 3,111 5,305 Air import and export 3,684 7,903 Total $ 15,328 $ 31,407 Manufacturing Revenues from Indco are derived from the engineering, manufacture and delivery of specialty mixing equipment and accessories. Indco receives customer product orders via phone call, email, internet or fax. The pricing of each standard product sold is listed in Indco’s print and web-based catalog. Customer specific products are priced by quote. A sales order acknowledgement is sent to every customer for every order to confirm pricing and the specifications of the products ordered. The revenue is recognized at a point in time when the product is shipped to the customer. Life Sciences Revenues from the Life Sciences segment are derived from the sale of high-quality monoclonal and polyclonal antibodies, diagnostic reagents and diagnostic kits and other immunoreagents for biomedical research and antibody manufacturing. Revenues are recognized when products are shipped and risk of loss is transferred to the carrier(s) used. |
Income (loss) per common share | Income (loss) per common share Basic net income (loss) per share is computed by dividing net income (loss) for the period by the weighted average number of common shares outstanding, excluding unvested restricted stock, during the period. Diluted net income (loss) per share reflects the additional dilution from potential issuances of common stock, such as stock issuable pursuant to the exercise of stock options or warrants or the vesting of restricted stock units. The treasury stock method is used to calculate the potential dilutive effect of these common stock equivalents. Potentially dilutive shares are excluded from the computation of diluted net income (loss) per share when their effect is anti-dilutive. |
Stock-based compensation to employees and non-employees | Stock-based compensation to employees Equity classified share-based awards The Company recognizes compensation expense for stock-based payments granted based on the grant-date fair value estimated in accordance with ASC Topic 718, “Compensation-Stock Compensation.” For employee stock-based awards, we calculate the fair value of the award on the date of grant using the Black-Scholes method for stock options and the quoted price of our common stock for restricted shares; the expense is recognized over the service period for awards expected to vest. Stock-based compensation to non-employees Liability classified share-based awards The Company maintains other share unit compensation grants for shares of Indco, the Company’s majority-owned subsidiary, which vest over a period of up to three years following their grant. The shares contain certain put features where the Company is either required or expects to settle vested awards on a cash basis. These awards are classified as liability awards, measured at fair value at the date of grant and re-measured at fair value at each reporting date up to and including the settlement date. The determination of the fair value of the share units under these plans is described in note 10. The fair value of the awards is expensed over the respective vesting period of the individual awards with recognition of a corresponding liability. Changes in fair value after vesting are recognized through compensation expense. Compensation expense reflects estimates of the number of instruments expected to vest. The impact of forfeitures and fair value revisions, if any, are recognized in earnings such that the cumulative expense reflects the revisions, with a corresponding adjustment to the settlement liability. Liability-classified share unit liabilities due within 12 months of the reporting date are presented in trade and other payables while settlements due beyond 12 months of the reporting date are presented in non-current liabilities. Non-employee share-based awards In prior periods up to September 30, 2019, the Company accounted for stock-based compensation to non-employees and consultants in accordance with the provisions of ASC 505-50, “Equity-Based Payments to Non-employees.” Measurement of share-based payment transactions with non-employees are based on the fair value of whichever is more reliably measurable: (a) the goods or services received; or (b) the equity instruments issued. The fair value of share-based payment transactions is determined at the earlier of performance commitment date or performance completion date. The Company believes that the fair value of the stock-based award is more reliably measurable than the fair value of the services received. The fair value of the granted stock-based awards is remeasured at each reporting date and expense is recognized over the vesting period of the award. In June 2018, the FASB issued ASU No. 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. The guidance was issued to simplify the accounting for share-based transactions by expanding the scope of Topic 718 from only being applicable to share-based payments to employees to also include share-based payment transactions for acquiring goods and services from nonemployees. As a result, nonemployee share-based transactions will be measured by estimating the fair value of the equity instruments at the grant date, taking into consideration the probability of satisfying performance conditions. The Company adopted ASU 2018-07 on October 1, 2019. The adoption of the standard did not have a material impact on our financial statements for the six months ended March 31, 2020. |
Mandatorily Redeemable Non-Controlling Interests | Mandatorily Redeemable Non-Controlling Interests The non-controlling interests that are reflected as mandatorily redeemable non-controlling interests in the consolidated financial statements consist of non-controlling interests related to the Indco acquisition whose owners have certain redemption rights that allow them to require the Company to purchase the non-controlling interests of those owners upon certain events outside the control of the Company, including upon the death of the holder. The Company is required to purchase 20% of the 8.35% mandatorily redeemable non-controlling interest at the option of the holder beginning on the third anniversary of the date of the Indco acquisition, which was March 21, 2019. On the date the Company acquires the controlling interest in a business combination, the fair value of the non-controlling interest is recorded in the long-term liabilities section of the consolidated balance sheet under the caption “ Mandatorily redeemable non-controlling interest change in fair value of mandatorily redeemable non-controlling interest |
Note receivable | Note receivable On March 2, 2018, the Company issued a convertible promissory note in the amount of $125 with a potential non- related party acquisition target. The note bears interest on the outstanding principal amount at a rate of 8% per annum, and both principal and interest is payable on the maturity date of April 24, 2020. The convertible note, at the election of the Company, can be converted into common stock of the acquisition target. As of March 31, 2020, and September 30, 2019, amounts outstanding including accrued interest were $142 and $139, respectively. As of March 31, 2020, the Company is no longer pursuing this potential acquisition target. |
Income taxes | Income taxes The Company uses the asset and liability method of accounting for income taxes in accordance with ASC Topic 740, “Income Taxes.” Under this method, income tax expense is recognized for the amount of: (i) taxes payable or refundable for the current year and (ii) deferred tax consequences of temporary differences resulting from matters that have been recognized in an entity’s financial statements or tax returns. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income and the reversal of deferred tax liabilities during the period in which related temporary differences become deductible. The benefit of tax positions taken or expected to be taken in the Company’s income tax returns are recognized in the consolidated financial statements if such positions are more likely than not of being sustained. |
Recent accounting pronouncements | Recent accounting pronouncements Recently adopted accounting pronouncements On October 1, 2019, the Company adopted ASU No. 2016-02, Leases The Company adopted the new standards effective October 1, 2019 using the modified retrospective transition method. The Company elected to use the package of practical expedients which allowed the Company to (i) not reassess whether an arrangement contains a lease, (ii) carry forward its lease classification as oper ating or capital leases and (iii) not reassess its previously-recorded initial direct costs. For all existing operating leases as of October 1, 2019, the Company recorded operating lease right-of-use assets of $1,043 and corresponding lease liabilities of $1,060, with an offset to other liabilities of $17 to eliminate deferred rent on the consolidated balance sheets. Operating lease expense is recognized on a straight-line basis over the lease term. At each balance sheet date, operating lease liabilities represent the present value of the future minimum payments related to non-cancelable periods. Leases with an initial term of 12 months or less (short-term leases) are not recognized in the balance sheet, and the related lease payments are recognized as incurred over the lease term. All significant lease arrangements after October 1, 2019 are recognized as right-of-use assets and lease liabilities at lease commencement. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term, and lease liabilities represent its obligation to make lease payments arising from the lease. Right-of-use assets and liabilities are recognized at the commencement date based on the present value of the future lease payments using the Company’s incremental borrowing rate. The adoption of the new lease accounting standard did not have a material impact on the Company’s results of operations or cash flows. In June 2018, the FASB issued ASU 2018-07, Compensation - Stock Compensation Recently issued accounting pronouncements not yet adopted In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other: Simplifying the Test for Goodwill Impairment, to simplify the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. This new accounting standard is effective for annual periods beginning after December 15, 2019. Early adoption is permitted. The Company is evaluating the effects that the adoption of this guidance will have on its consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326), which replaces the incurred loss methodology previously employed to measure credit losses for most financial assets and requires the use of a forward-looking expected loss model. Current accounting delays the recognition of credit losses until it is probable a loss has been incurred, while the update will require financial assets to be measured at amortized costs less a reserve and equal to the net amount expected to be collected. This standard is effective for annual periods beginning after December 15, 2019, including interim periods within those fiscal years, with early adoption permitted. The Company is evaluating the effects that the adoption of this guidance will have on its consolidated financial statements. |
Reclassifications | Reclassifications Prior year financial statement amounts are reclassified as necessary to conform to the current year presentation. These prior period reclassifications did not affect the Company’s net income, earnings per share, stockholders’ equity or working capital. |
BASIS OF PRESENTATION, SUMMAR_3
BASIS OF PRESENTATION, SUMMARY OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended |
Mar. 31, 2020 | |
BASIS OF PRESENTATION, SUMMARY OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
Disaggregation of Revenue | In the Global Logistics Services segment, the Company disaggregates its revenues by its four primary service categories: ocean import and export, freight forwarding, customs brokerage and air import and export. A summary of the Company’s revenues disaggregated by major service lines for the three and six months ended March 31, 2020 Three Months Ended March 31, Six Months Ended March 31, Service Type 2020 2020 Ocean import and export $ 5,880 $ 11,737 Freight forwarding 2,653 6,462 Customs brokerage 3,111 5,305 Air import and export 3,684 7,903 Total $ 15,328 $ 31,407 |
INVENTORY (Tables)
INVENTORY (Tables) | 6 Months Ended |
Mar. 31, 2020 | |
INVENTORY [Abstract] | |
Inventories | Inventories consisted of the following: March 31, 2020 September 30, 2019 Finished Goods $ 2,627 $ 2,988 Work-in-Process 326 461 Raw Materials 1,251 946 Less - Reserve for Inventory Valuation (26 ) (24 ) Inventory Net $ $ 4,178 $ 4,371 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 6 Months Ended |
Mar. 31, 2020 | |
PROPERTY AND EQUIPMENT [Abstract] | |
Property and Equipment and Estimated Lives Used in Computation of Depreciation and Amortization | A summary of property and equipment and the estimated lives used in the computation of depreciation and amortization is as follows: March 31, 2020 September 30, 2019 Life Building and Improvements $ 2,553 $ 2,577 15-30 Years Land and Improvements 869 835 Indefinite Furniture & Fixtures 285 218 3-7 Years Computer Equipment 299 465 3-5 Years Machinery & Equipment 1,151 973 3-15 Years Leasehold Improvements 181 181 Shorter of Lease Term or Asset Life 5,338 5,249 Less: Accumulated Depreciation (1,346 ) (1,295 ) $ 3,992 $ 3,954 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Mar. 31, 2020 | |
INTANGIBLE ASSETS [Abstract] | |
Intangible Assets and Estimated Useful Lives used in Computation of Amortization | 5. INTANGIBLE ASSETS A summary of intangible assets and the estimated useful lives used in the computation of amortization is as follows: March 31, 2020 September 30, 2019 Life Customer Relationships $ 13,762 $ 13,762 15-20 Years Trademarks / Names 2,251 2,251 20 Years Other 978 978 2-5 Years 16,991 16,991 Less: Accumulated Amortization (3,879 ) (3,393 ) $ 13,112 $ 13,598 Amortization expense for the six months ended March 31, 2020 and 2019 was $486 and $444, respectively. |
GOODWILL (Tables)
GOODWILL (Tables) | 6 Months Ended |
Mar. 31, 2020 | |
GOODWILL [Abstract] | |
Composition of Goodwill | 6. GOODWILL The Company’s goodwill carrying amounts relate to the acquisitions in the Global Logistics Services, Manufacturing and Life Sciences businesses. As of March 31, 2020, the Company paid $172 in tax gross up consideration to former owners and recorded an additional $116 of goodwill related to the Phospho acquistion. The composition of the goodwill balance at March 31, 2020 and September 30, 2019 was as follows: March 31, 2020 September 30, 2019 Global Logistics Services $ 5,655 $ 5,655 Manufacturing 5,046 5,046 Life Sciences 2,940 2,824 $ 13,641 $ 13,525 |
NOTES PAYABLE - BANKS (Tables)
NOTES PAYABLE - BANKS (Tables) | 6 Months Ended |
Mar. 31, 2020 | |
First Merchants Bank [Member] | |
Line of Credit Facility [Line Items] | |
Schedule of Debt | The Company was in compliance with the covenants defined in the First Merchants Credit Agreement at March 31, 2020 and September 30, 2019. March 31, 2020 September 30, 2019 Long Term Debt * $ 4,931 $ 5,455 Less Current Portion (786 ) (786 ) $ 4,145 $ 4,669 * Note: Long Term Debt is due in monthly installments of $71 plus monthly interest, at LIBOR plus 3.75% to 4.75% per annum. The note is collateralized by all of Indco’s assets and guaranteed by Janel. |
First Northern Bank Dixon [Member] | |
Line of Credit Facility [Line Items] | |
Schedule of Debt | As of March 31, 2020, there were no outstanding borrowings under the revolving credit facility and $2,217 of borrowings under the term loan. March 31, 2020 September 30, 2019 Long Term Debt * $ 2,217 $ 1,975 Less Current Portion (52 ) (42 ) $ $2,165 $ 1,933 * Note: Long Term Debt is due in monthly principal and interest installments of $12 plus monthly interest, at an effective interest rate of 4.18% as of March 31, 2020 and 5.28% as of September, 2019, per annum. The note is collateralized by real property owned by Antibodies and guaranteed by Janel. |
SUBORDINATED PROMISSORY NOTES (
SUBORDINATED PROMISSORY NOTES (Tables) | 6 Months Ended |
Mar. 31, 2020 | |
SUBORDINATED PROMISSORY NOTES [Abstract] | |
Amounts Outstanding [Table Text Block] | As of March 31, 2020, and September 30, 2019, the amounts outstanding under the Janel Group Subordinated Promissory Note was $276 and $349, respectively. March 31, September 30, Long term portion of subordinated promissory notes $ 121 $ 197 Current portion of subordinated promissory note 155 152 $ 276 $ 349 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 6 Months Ended |
Mar. 31, 2020 | |
Indco [Member] | |
Stock Based Compensation [Abstract] | |
Fair Value Assumptions | The Company uses the Black-Scholes option pricing model to estimate the fair value of Indco’s share-based awards. In applying this model, the Company used the following assumptions: Six Months Ended March 31, 2020 Risk-free Interest Rate 1.59% Expected Option Term in Years 5.5 - 6.5 Expected Volatility 101.2% - 101.7% Dividend Yield 0% Weighted Average Grant Date Fair Value $8.59 - $9.03 |
Activity of Stock Options | Number of Options Weighted Average Exercise Weighted Average Remaining Contractual Aggregate Intrinsic Value (in thousands) Outstanding Balance at September 30, 2019 32,133 $ 8.85 7.34 $ 85.45 Granted 6,880 $ 11.08 9.75 $ — Outstanding Balance at March 31, 2020 39,013 $ 9.24 7.31 $ 85.45 Exercisable on March 31, 2020 23,343 $ 7.98 6.49 $ 85.45 |
Employee Option Awards [Member] | |
Stock Based Compensation [Abstract] | |
Fair Value Assumptions | The fair values of our employee option awards were estimated using the assumptions below, which yielded the following weighted average grant date fair values for the periods presented: Six Months Ended March 31, 2020 Risk-free Interest Rate 1.59% Expected Option Term in Years 5.5-6.5 Expected Volatility 101.2% - 101.7% Dividend Yield 0% Weighted Average Grant Date Fair Value $6.97 - $7.33 |
Activity of Stock Options | Number of Options Weighted Average Exercise Price Weighted Remaining Contractual Term (in years) Aggregate Intrinsic Value (in thousands) Outstanding Balance at September 30, 2019 110,837 $ 5.05 5.98 $ 438.06 Granted 7,500 $ 9.00 9.75 $ — Exercised (3,841 ) $ 8.17 — $ — Outstanding Balance at March 31, 2020 114,496 $ 5.21 5.67 $ 290.88 Exercisable on March 31, 2020 96,792 $ 4.62 5.15 $ 290.88 |
Unvested Restricted Stock | The following table summarizes the status of our employee unvested restricted stock under the 2017 Plan for the six months ended March 31, 2020: Restricted Stock (in thousands) Weighted Average Grant Date Fair Value Weighted Average Remaining Contractual Term (in years) Unvested at September 30, 2019 5,000 $ 8.01 0.61 Vested — $ — — Unvested at March 31, 2020 5,000 $ 8.01 0.11 |
Non-Employee Option Awards [Member] | |
Stock Based Compensation [Abstract] | |
Activity of Stock Options | There were no non-employee options awarded during the six-month period ended March 31, 2020. During the six-month period ended March 31, 2020, 15,000 non-employee options were forfeited. Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in thousands) Outstanding Balance at September 30, 2019 51,053 $ 7.58 7.80 $ 72.68 Forfeited (15,000 ) $ 8.04 — $ — Outstanding Balance at March 31, 2020 36,053 $ 7.38 7.26 $ 20.40 Exercisable on March 31, 2020 6,053 $ 4.13 6.50 $ 20.40 |
Unvested Restricted Stock | The following table summarizes the status of our non-employee unvested restricted stock under the 2017 Plan for the six months ended March 31, 2020: Restricted Stock (in thousands) Weighted Average Grant Date Fair Value Weighted Average Remaining Contractual Term (in years) Unvested at September 30, 2019 26,667 $ 8.04 0.88 Vested — $ — — Unvested at March 31, 2020 26,667 $ 8.04 0.38 |
INCOME PER COMMON SHARE (Tables
INCOME PER COMMON SHARE (Tables) | 6 Months Ended |
Mar. 31, 2020 | |
INCOME PER COMMON SHARE [Abstract] | |
Reconciliation of Basic and Diluted Income (Loss) per Share | The following table provides a reconciliation of the basic and diluted income (loss) per share (“EPS”) computations for the three and six months ended March 31, 2020 and 2019 (in thousands, except share and per share data): For the Three Months Ended March 31, For the Six Months Ended March 31, 2020 2019 2020 2019 Income: Net income (loss) $ (937 ) $ 175 $ (1,057 ) $ 719 Preferred stock dividends (175 ) (148 ) (326 ) (270 ) Net Income (loss) available to common stockholders $ (1,112 ) $ 27 $ (1,383 ) $ 449 Common Shares: Basic - weighted average common shares 865,985 847,784 865,630 847,621 Effect of dilutive securities: Stock options — 51,097 — 54,644 Restricted stock — 20,369 — 19,162 Convertible preferred stock — 12,710 — 12,710 Diluted - weighted average common stock $ 865,985 $ 931,960 $ 865,630 $ 934,137 Income per Common Share: Basic - Net income (loss) $ (1.08 ) $ 0.21 $ (1.22 ) $ 0.85 Preferred stock dividends (0.21 ) (0.17 ) (0.38 ) (0.32 ) Net Income (loss) available to common stockholders $ (1.29 ) $ 0.04 $ (1.60 ) $ 0.53 Diluted - Net income (loss) $ (1.08 ) $ 0.18 $ (1.22 ) $ 0.77 Preferred stock dividends (0.21 ) (0.15 ) (0.38 ) (0.29 ) Net income (loss) available to common stockholders $ (1.29 ) $ 0.03 $ (1.60 ) $ 0.48 |
Potentially Diluted Securities | Potentially dilutive securities as of March 31, 2020 and 2019 were as follows: March 31, 2020 2019 Employee Stock Options 114,496 118,798 Non-employee Stock Options 36,053 51,053 Employee Restricted Stock 5,000 5,000 Non-employee Restricted Stock 26,667 26,667 Convertible Preferred Stock 6,310 12,710 188,526 214,228 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 6 Months Ended |
Mar. 31, 2020 | |
INCOME TAXES [Abstract] | |
Income Tax Reconciliation | The reconciliation of income tax computed at the Federal statutory rate to the benefit (provision) for income taxes for the six months ended March 31, 2020 is as follows: March 31, 2020 March 31, 2019 Federal taxes at statutory rates $ 247 $ (204 ) Permanent differences (28 ) (13 ) Other (63 ) - State and local taxes (37 ) (36 ) Income tax benefit (expense) $ 119 $ (253 ) |
BUSINESS SEGMENT INFORMATION (T
BUSINESS SEGMENT INFORMATION (Tables) | 6 Months Ended |
Mar. 31, 2020 | |
BUSINESS SEGMENT INFORMATION [Abstract] | |
Segment Reporting Information by Segment | The following tables present selected financial information about the Company’s reportable segments for the three and six months ended March 31, 2020: For the three months ended March 31, 2020 Consolidated Global Logistics Services Manufacturing Life Sciences Corporate Revenue $ 19,121 $ 15,328 $ 2,056 $ 1,737 $ — Forwarding expenses and cost of revenues 13,125 11,615 908 602 — Gross profit 5,996 3,713 1,148 1,135 — Selling, general and administrative 6,584 3,952 701 1,071 860 Amortization of intangible assets 243 — — — 243 Operating (loss) income (831 ) (239 ) 447 64 (1,103 ) Interest expense (income) net 141 54 66 24 (3 ) Identifiable assets 55,868 14,012 2,425 9,650 26,781 Capital expenditures 34 17 — 17 — For the six months ended March 31, 2020 Consolidated Global Logistics Services Manufacturing Life Sciences Corporate Revenue $ 38,942 $ 31,407 $ 3,926 $ 3,609 $ — Forwarding expenses and cost of revenues 26,659 23,702 1,753 1,204 — Gross profit 12,283 7,705 2,173 2,405 — Selling, general and administrative 12,669 7,590 1,383 2,051 1,645 Amortization of intangible assets 486 — — — 486 Operating (loss) income (872 ) 115 790 354 (2,131 ) Interest expense (income) net 304 120 138 51 (5 ) Identifiable assets 52,868 14,012 2,425 9,650 26,781 Capital expenditures 131 64 23 44 — The following tables present selected financial information about the Company’s reportable segments for the three and six months ended March 31, 2019: For the three months ended March 31, 2019 Consolidated Global Logistics Services Manufacturing Life Sciences Corporate Revenue $ 20,969 $ 16,865 $ 2,452 $ 1,652 $ — Forwarding expenses and cost of revenues 14,599 12,957 1,077 565 — Gross profit 6,370 3,908 1,375 1,087 — Selling, general and administrative 5,692 3,468 759 724 741 Amortization of intangible assets 236 — — — 236 Operating income (loss) 442 440 616 363 (977 ) Interest expense (income) net 198 127 36 37 (2 ) Identifiable assets 55,348 20,825 2,418 6,672 25,433 Capital expenditures 71 2 — 69 — For the six months ended March 31, 2019 Consolidated Global Logistics Services Manufacturing Life Sciences Corporate Revenue $ 43,296 $ 35,670 $ 4,533 $ 3,093 $ — Forwarding expenses and cost of revenues 30,439 27,375 2,010 1,054 — Gross profit 12,857 8,295 2,523 2,039 — Selling, general and administrative 11,081 6,828 1,467 1,431 1,355 Amortization of intangible assets 444 — — — 444 Operating income (loss) 1,332 1,467 1,056 608 (1,799 ) Interest expense (income) net 360 225 76 64 (5 ) Identifiable assets 55,348 20,825 2,418 6,672 25,433 Capital expenditures 253 16 41 196 — |
LEASES (Tables)
LEASES (Tables) | 6 Months Ended |
Mar. 31, 2020 | |
LEASES [Abstract] | |
Components of Lease Expense | The components of lease cost for the six-month period ended March 31, 2020 are as follows: Six Months Ended March 31, 2020 Operating lease cost $ 353 Short-term lease cost 68 Total lease cost $ 421 |
Future Minimum Lease Payments for Operating Leases | Future minimum lease payments under non-cancelable operating leases as of March 31, 2020 are as follows: 2020 $ 493 2021 469 2022 414 2023 241 2024 221 Total undiscounted lease payments 1,838 Less: Imputed interest (217 ) Total lease obligations $ 1,621 |
BASIS OF PRESENTATION, SUMMAR_4
BASIS OF PRESENTATION, SUMMARY OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||||
Mar. 31, 2020USD ($)Location | Mar. 31, 2019USD ($) | Mar. 31, 2020USD ($)SegmentLocationCategory | Mar. 31, 2019USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Mar. 02, 2018USD ($) | |
Business description [Abstract] | |||||||
Number of reportable segments | Segment | 3 | ||||||
Number of locations | Location | 1 | 1 | |||||
Cash [Abstract] | |||||||
Cash balances insured by Federal Deposit Insurance Corporation | $ 250 | $ 250 | |||||
Accounts receivable and allowance for doubtful accounts receivable [Abstract] | |||||||
Allowance for doubtful accounts | 654 | $ 503 | 654 | $ 503 | |||
Revenues and revenue recognition [Abstract] | |||||||
Cumulative effect of change in accounting principle | $ 32 | ||||||
Revenue | 19,121 | 20,969 | 38,942 | 43,296 | |||
Cost of revenue | 13,125 | $ 14,599 | 26,659 | 30,439 | |||
Recent Accounting Pronouncements [Abstract] | |||||||
Operating lease asset | 1,599 | 1,599 | $ 0 | ||||
Operating lease liability | $ 1,621 | 1,621 | |||||
ASU 2014-09 [Member] | |||||||
Revenues and revenue recognition [Abstract] | |||||||
Revenue | 218 | ||||||
Cost of revenue | $ 177 | ||||||
ASU 2016-02 [Member] | |||||||
Recent Accounting Pronouncements [Abstract] | |||||||
Operating lease asset | 1,043 | ||||||
Operating lease liability | 1,060 | ||||||
Deferred rent | 17 | ||||||
Retained Earnings [Member] | |||||||
Revenues and revenue recognition [Abstract] | |||||||
Cumulative effect of change in accounting principle | $ 32 | ||||||
Convertible Promissory Note [Member] | |||||||
Note Receivable [Abstract] | |||||||
Amount of note issued | $ 125 | ||||||
Interest rate percentage | 8.00% | ||||||
Maturity date of note | Apr. 24, 2020 | ||||||
Outstanding borrowings | $ 142 | 142 | $ 139 | ||||
Global Logistics Services [Member] | |||||||
Revenues and revenue recognition [Abstract] | |||||||
Revenue | 15,328 | $ 31,407 | |||||
Number of primary service categories | Category | 4 | ||||||
Global Logistics Services [Member] | Ocean Import and Export [Member] | |||||||
Revenues and revenue recognition [Abstract] | |||||||
Revenue | 5,880 | $ 11,737 | |||||
Global Logistics Services [Member] | Freight Forwarding [Member] | |||||||
Revenues and revenue recognition [Abstract] | |||||||
Revenue | 2,653 | 6,462 | |||||
Global Logistics Services [Member] | Customs Brokerage [Member] | |||||||
Revenues and revenue recognition [Abstract] | |||||||
Revenue | 3,111 | 5,305 | |||||
Global Logistics Services [Member] | Air Import and Export [Member] | |||||||
Revenues and revenue recognition [Abstract] | |||||||
Revenue | $ 3,684 | $ 7,903 | |||||
Honor Worldwide Logistics LLC [Member] | |||||||
Business description [Abstract] | |||||||
Number of locations | Location | 2 | 2 | |||||
Indco [Member] | |||||||
Basis of consolidation [Abstract] | |||||||
Ownership percentage by parent | 91.65% | 91.65% | |||||
Liability classified share-based awards [Abstract] | |||||||
Vesting period of grant | 3 years | ||||||
Mandatorily Redeemable Non-Controlling Interests [Abstract] | |||||||
Percentage of mandatorily redeemable non-controlling interests to be purchased | 20.00% | 20.00% | |||||
Minority interest | 8.35% | 8.35% |
ACQUISITIONS (Details)
ACQUISITIONS (Details) $ in Thousands | Sep. 06, 2019USD ($) | Jul. 01, 2019USD ($) | Nov. 20, 2018USD ($) | Mar. 31, 2020USD ($)Location | Mar. 31, 2020USD ($)Location | Mar. 31, 2019USD ($) | Sep. 30, 2019USD ($)Acquisition |
Business Combination, Consideration Transferred [Abstract] | |||||||
Goodwill | $ 13,641 | $ 13,641 | $ 13,525 | ||||
Number of locations | Location | 1 | 1 | |||||
Consideration paid in cash | $ 116 | $ 1,935 | |||||
Honor Worldwide Logistics LLC [Member] | |||||||
Business Combination, Consideration Transferred [Abstract] | |||||||
Number of locations | Location | 2 | 2 | |||||
Honor Worldwide Logistics LLC [Member] | Subordinated Promissory Notes [Member] | |||||||
Business Combination, Consideration Transferred [Abstract] | |||||||
Consideration transferred - Liabilities incurred | $ 456 | ||||||
2019 Acquisitions [Member] | |||||||
Business Combination, Consideration Transferred [Abstract] | |||||||
Number of acquisitions | Acquisition | 4 | ||||||
Purchase price, net of cash acquired | $ 6,768 | ||||||
Goodwill | 2,067 | ||||||
Identifiable intangibles | $ 2,165 | ||||||
PhosphoSolutions [Member] | |||||||
Business Combination, Consideration Transferred [Abstract] | |||||||
Purchase price, net of cash acquired | $ 4,043 | ||||||
Consideration transferred - Liabilities incurred | 56 | ||||||
Cash received | 13 | ||||||
Consideration paid in cash | $ 4,000 | ||||||
Tax gross up consideration paid to former owners | $ 172 | $ 172 | |||||
Additional goodwill recorded | $ 116 | $ 116 | |||||
Other Acquisitions [Member] | |||||||
Other Acquisitions [Abstract] | |||||||
Aggregate purchase price | $ 430 | ||||||
Earnout consideration - accrued expenses | $ 50 |
INVENTORY (Details)
INVENTORY (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Sep. 30, 2019 |
INVENTORY [Abstract] | ||
Finished Goods | $ 2,627 | $ 2,988 |
Work-in-Process | 326 | 461 |
Raw Materials | 1,251 | 946 |
Less - Reserve for Inventory Valuation | (26) | (24) |
Inventory Net | $ 4,178 | $ 4,371 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Sep. 30, 2019 | |
Property and Equipment, Net [Abstract] | |||
Property and Equipment, gross | $ 5,338 | $ 5,249 | |
Less: Accumulated Depreciation | (1,346) | (1,295) | |
Property and Equipment, net | 3,992 | 3,954 | |
Depreciation | 92 | $ 152 | |
Building and Improvements [Member] | |||
Property and Equipment, Net [Abstract] | |||
Property and Equipment, gross | $ 2,553 | 2,577 | |
Building and Improvements [Member] | Minimum [Member] | |||
Property and Equipment, Net [Abstract] | |||
Life | 15 years | ||
Building and Improvements [Member] | Maximum [Member] | |||
Property and Equipment, Net [Abstract] | |||
Life | 30 years | ||
Land and Improvements [Member] | |||
Property and Equipment, Net [Abstract] | |||
Property and Equipment, gross | $ 869 | 835 | |
Furniture & Fixtures [Member] | |||
Property and Equipment, Net [Abstract] | |||
Property and Equipment, gross | $ 285 | 218 | |
Furniture & Fixtures [Member] | Minimum [Member] | |||
Property and Equipment, Net [Abstract] | |||
Life | 3 years | ||
Furniture & Fixtures [Member] | Maximum [Member] | |||
Property and Equipment, Net [Abstract] | |||
Life | 7 years | ||
Computer Equipment [Member] | |||
Property and Equipment, Net [Abstract] | |||
Property and Equipment, gross | $ 299 | 465 | |
Computer Equipment [Member] | Minimum [Member] | |||
Property and Equipment, Net [Abstract] | |||
Life | 3 years | ||
Computer Equipment [Member] | Maximum [Member] | |||
Property and Equipment, Net [Abstract] | |||
Life | 5 years | ||
Machinery & Equipment [Member] | |||
Property and Equipment, Net [Abstract] | |||
Property and Equipment, gross | $ 1,151 | 973 | |
Machinery & Equipment [Member] | Minimum [Member] | |||
Property and Equipment, Net [Abstract] | |||
Life | 3 years | ||
Machinery & Equipment [Member] | Maximum [Member] | |||
Property and Equipment, Net [Abstract] | |||
Life | 15 years | ||
Leasehold Improvements [Member] | |||
Property and Equipment, Net [Abstract] | |||
Property and Equipment, gross | $ 181 | $ 181 |
INTANGIBLE ASSETS (Details)
INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | Sep. 30, 2019 | |
Intangible Assets, Net [Abstract] | |||||
Intangible assets, gross | $ 16,991 | $ 16,991 | $ 16,991 | ||
Less: Accumulated Amortization | (3,879) | (3,879) | (3,393) | ||
Intangible assets, net | 13,112 | 13,112 | 13,598 | ||
Amortization expense | 243 | $ 236 | 486 | $ 444 | |
Customer Relationships [Member] | |||||
Intangible Assets, Net [Abstract] | |||||
Intangible assets, gross | 13,762 | $ 13,762 | 13,762 | ||
Customer Relationships [Member] | Minimum [Member] | |||||
Intangible Assets, Net [Abstract] | |||||
Life | 15 years | ||||
Customer Relationships [Member] | Maximum [Member] | |||||
Intangible Assets, Net [Abstract] | |||||
Life | 20 years | ||||
Trademarks/ Names [Member] | |||||
Intangible Assets, Net [Abstract] | |||||
Intangible assets, gross | 2,251 | $ 2,251 | 2,251 | ||
Life | 20 years | ||||
Other [Member] | |||||
Intangible Assets, Net [Abstract] | |||||
Intangible assets, gross | $ 978 | $ 978 | $ 978 | ||
Other [Member] | Minimum [Member] | |||||
Intangible Assets, Net [Abstract] | |||||
Life | 2 years | ||||
Other [Member] | Maximum [Member] | |||||
Intangible Assets, Net [Abstract] | |||||
Life | 5 years |
GOODWILL (Details)
GOODWILL (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | |
Composition of Goodwill [Abstract] | |||
Goodwill | $ 13,641 | $ 13,641 | $ 13,525 |
Global Logistics Services [Member] | |||
Composition of Goodwill [Abstract] | |||
Goodwill | 5,655 | 5,655 | 5,655 |
Manufacturing [Member] | |||
Composition of Goodwill [Abstract] | |||
Goodwill | 5,046 | 5,046 | 5,046 |
Life Sciences [Member] | |||
Composition of Goodwill [Abstract] | |||
Goodwill | 2,940 | 2,940 | $ 2,824 |
PhosphoSolutions [Member] | |||
Business Combination [Abstract] | |||
Tax gross up consideration paid to former owners | 172 | 172 | |
Additional goodwill recorded | $ 116 | $ 116 |
NOTES PAYABLE - BANKS, Santande
NOTES PAYABLE - BANKS, Santander Bank Facility (Details) - Santander Bank Facility [Member] $ in Thousands | 6 Months Ended |
Mar. 31, 2020USD ($) | |
Line of Credit Facility [Abstract] | |
Aggregate borrowing capacity percentage, on eligible accounts receivable | 85.00% |
Outstanding borrowings | $ 7,533 |
Percentage of outstanding borrowings | 82.33% |
Effective interest rate | 3.26% |
Prime Rate [Member] | |
Line of Credit Facility [Abstract] | |
Basis spread on variable rate | 0.50% |
LIBOR [Member] | |
Line of Credit Facility [Abstract] | |
Basis spread on variable rate | 2.25% |
Term of variable rate | 30 days |
Term of variable rate, one | 60 days |
Term of variable rate, two | 90 days |
Libor rate floor | 0.75% |
NOTES PAYABLE - BANKS, First Me
NOTES PAYABLE - BANKS, First Merchants Bank Credit Facility (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Mar. 31, 2020 | Sep. 30, 2019 | ||
Long Term Debt [Abstract] | |||
Less Current Portion | $ (838) | $ (828) | |
Long-term debt | 6,310 | 6,602 | |
First Merchants Bank Credit Facility [Member] | Indco [Member] | |||
Long Term Debt [Abstract] | |||
Long Term Debt | [1] | 4,931 | 5,455 |
Less Current Portion | (786) | (786) | |
Long-term debt | $ 4,145 | $ 4,669 | |
First Merchants Bank Credit Facility [Member] | Term Loan [Member] | LIBOR [Member] | Minimum [Member] | |||
Long Term Debt [Abstract] | |||
Basis spread on variable rate | 3.75% | ||
First Merchants Bank Credit Facility [Member] | Term Loan [Member] | LIBOR [Member] | Maximum [Member] | |||
Long Term Debt [Abstract] | |||
Basis spread on variable rate | 4.75% | ||
First Merchants Bank Credit Facility [Member] | Term Loan [Member] | Indco [Member] | |||
Long Term Debt [Abstract] | |||
Face amount of debt | $ 5,500 | ||
Term of variable rate | 1 month | ||
Maturity date of facility | Aug. 30, 2024 | ||
Effective interest rate | 5.08% | ||
First Merchants Bank Credit Facility [Member] | Term Loan [Member] | Indco [Member] | LIBOR [Member] | Minimum [Member] | |||
Long Term Debt [Abstract] | |||
Basis spread on variable rate | 2.75% | ||
First Merchants Bank Credit Facility [Member] | Term Loan [Member] | Indco [Member] | LIBOR [Member] | Maximum [Member] | |||
Long Term Debt [Abstract] | |||
Basis spread on variable rate | 3.50% | ||
First Merchants Bank Credit Facility [Member] | Revolving Loan [Member] | Indco [Member] | |||
Long Term Debt [Abstract] | |||
Maximum borrowing capacity | $ 1,000 | ||
Term of variable rate | 1 month | ||
Maturity date of facility | Aug. 30, 2024 | ||
Outstanding borrowings | $ 0 | ||
Debt instrument monthly installment | $ 71 | ||
First Merchants Bank Credit Facility [Member] | Revolving Loan [Member] | Indco [Member] | LIBOR [Member] | |||
Long Term Debt [Abstract] | |||
Basis spread on variable rate | 2.75% | ||
[1] | Long Term Debt is due in monthly installments of $71 plus monthly interest, at LIBOR plus 3.75% to 4.75% per annum. The note is collateralized by all of Indco's assets and guaranteed by Janel. |
NOTES PAYABLE - BANKS, First No
NOTES PAYABLE - BANKS, First Northern Bank of Dixon (Details) - USD ($) $ in Thousands | 6 Months Ended | |||
Mar. 31, 2020 | Sep. 30, 2019 | Jun. 21, 2018 | ||
NOTE PAYABLE - BANK [Abstract] | ||||
Less Current Portion | $ (838) | $ (828) | ||
Long-term debt, non-current | 6,310 | $ 6,602 | ||
First Northern Bank Dixon [Member] | Term Loan [Member] | ||||
Line of Credit Facility [Abstract] | ||||
Face amount of debt | $ 2,235 | $ 2,025 | ||
Treasury constant maturity (index) | 5 years | |||
Basis spread on variable rate | 2.50% | |||
Maturity date of facility | Nov. 14, 2029 | |||
Effective interest rate | 4.18% | 5.28% | ||
NOTE PAYABLE - BANK [Abstract] | ||||
Long Term Debt | [1] | $ 2,217 | $ 1,975 | |
Less Current Portion | (52) | (42) | ||
Long-term debt, non-current | 2,165 | $ 1,933 | ||
Debt instrument monthly installment | $ 12 | |||
First Northern Bank Dixon [Member] | Revolving Loan [Member] | ||||
Line of Credit Facility [Abstract] | ||||
Maturity date of facility | Oct. 1, 2020 | |||
Effective interest rate | 6.00% | |||
Maximum borrowing capacity | $ 500 | |||
Outstanding borrowings | 0 | |||
First Northern Bank Dixon [Member] | Solar Loan [Member] | ||||
Line of Credit Facility [Abstract] | ||||
Face amount of debt | $ 125 | |||
Effective interest rate | 4.43% | |||
Term of variable rate | 5 years | |||
[1] | Long Term Debt is due in monthly principal and interest installments of $12 plus monthly interest, at an effective interest rate of 4.18% as of March 31, 2020 and 5.28% as of September, 2019, per annum. The note is collateralized by real property owned by Antibodies and guaranteed by Janel. |
SUBORDINATED PROMISSORY NOTES_2
SUBORDINATED PROMISSORY NOTES (Details) $ in Thousands | 6 Months Ended | |
Mar. 31, 2020USD ($)NoteInstallment | Sep. 30, 2019USD ($) | |
AB HoldCo Subordinated Promissory Notes [Member] | ||
Long-term Debt, Excluding Current Maturities [Abstract] | ||
Number of subordinated promissory notes | Note | 2 | |
Annual interest rate percentage | 4.00% | |
Debt instrument maturity date | Jun. 22, 2021 | |
Outstanding amount | $ 344 | |
Frequency of periodic payment | Quarterly | |
Janel Group Subordinated Promissory Note [Member] | ||
Long-term Debt, Excluding Current Maturities [Abstract] | ||
Annual interest rate percentage | 6.75% | |
Debt instrument maturity date | Nov. 20, 2021 | |
Outstanding amount | $ 276 | $ 349 |
Frequency of periodic payment | Quarterly | |
Number of consecutive installments | Installment | 12 | |
Quarterly periodic installments | $ 42 |
SUBORDINATED PROMISSORY NOTES,
SUBORDINATED PROMISSORY NOTES, Amounts Outstanding (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Sep. 30, 2019 |
Subordinated Promissory Notes [Abstract] | ||
Long term portion of subordinated promissory notes | $ 465 | $ 541 |
Current portion of subordinated promissory note | 155 | 152 |
Subordinated Debt [Member] | ||
Subordinated Promissory Notes [Abstract] | ||
Long term portion of subordinated promissory notes | 121 | 197 |
Current portion of subordinated promissory note | 155 | 152 |
Total subordinated debt | $ 276 | $ 349 |
STOCKHOLDERS' EQUITY, Shares Au
STOCKHOLDERS' EQUITY, Shares Authorized and Par Value (Details) - $ / shares | Mar. 31, 2020 | Sep. 30, 2019 |
STOCKHOLDERS' EQUITY [Abstract] | ||
Common stock, shares authorized (in shares) | 4,500,000 | 4,500,000 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 100,000 | 100,000 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
STOCKHOLDERS' EQUITY, Preferred
STOCKHOLDERS' EQUITY, Preferred Stock (Details) - USD ($) $ / shares in Units, $ in Thousands | Sep. 06, 2019 | Mar. 31, 2019 | Mar. 31, 2020 | Sep. 30, 2019 |
Preferred Stock [Abstract] | ||||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | ||
Accrued dividends | $ 1,366 | $ 1,041 | ||
Common Stock [Member] | ||||
Preferred Stock [Abstract] | ||||
Preferred shares converted to common stock (in shares) | 6,400 | |||
Series B Convertible Preferred Stock [Member] | ||||
Preferred Stock [Abstract] | ||||
Preferred stock, par value (in dollars per share) | $ 0.001 | |||
Convertible preferred stock, shares issued upon conversion (in shares) | 0.10 | |||
Series B Convertible Preferred Stock [Member] | Preferred Stock [Member] | ||||
Preferred Stock [Abstract] | ||||
Preferred shares converted to common stock (in shares) | 640 | |||
Series C Cumulative Preferred Stock [Member] | ||||
Preferred Stock [Abstract] | ||||
Preferred stock, dividend rate | 5.00% | 7.00% | ||
Common stock closing price per share (in dollars per share) | $ 10 | |||
Increase in dividend rate annually | 1.00% | |||
Period of increase in dividend rate | 4 years | |||
Preferred stock, liquidation preference, value | $ 12,867 | $ 12,541 | ||
Dividends declared | $ 326 | |||
Series C Cumulative Preferred Stock [Member] | Maximum [Member] | ||||
Preferred Stock [Abstract] | ||||
Preferred stock, dividend rate | 9.00% |
STOCK-BASED COMPENSATION, Expen
STOCK-BASED COMPENSATION, Expense and Authorized (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Oct. 30, 2013 | |
Selling, General and Administrative Expenses [Member] | |||
Share-based Compensation [Abstract] | |||
Stock-based compensation | $ 149 | $ 236 | |
2013 Option Plan [Member] | |||
Share-based Compensation [Abstract] | |||
Options to purchase common stock for issuance (in shares) | 100,000 |
STOCK-BASED COMPENSATION, Assum
STOCK-BASED COMPENSATION, Assumptions (Details) | 6 Months Ended |
Mar. 31, 2020$ / shares | |
Indco [Member] | |
Share-based Payment Award, Fair Value Assumptions [Abstract] | |
Risk-free Interest Rate | 1.59% |
Dividend Yield | 0.00% |
Indco [Member] | Minimum [Member] | |
Share-based Payment Award, Fair Value Assumptions [Abstract] | |
Expected Option Term in Years | 5 years 6 months |
Expected Volatility | 101.20% |
Weighted Average Grant Date Fair Value (in dollars per share) | $ 8.59 |
Indco [Member] | Maximum [Member] | |
Share-based Payment Award, Fair Value Assumptions [Abstract] | |
Expected Option Term in Years | 6 years 6 months |
Expected Volatility | 101.70% |
Weighted Average Grant Date Fair Value (in dollars per share) | $ 9.03 |
Employee Option Awards [Member] | |
Share-based Payment Award, Fair Value Assumptions [Abstract] | |
Risk-free Interest Rate | 1.59% |
Dividend Yield | 0.00% |
Employee Option Awards [Member] | Minimum [Member] | |
Share-based Payment Award, Fair Value Assumptions [Abstract] | |
Expected Option Term in Years | 5 years 6 months |
Expected Volatility | 101.20% |
Weighted Average Grant Date Fair Value (in dollars per share) | $ 6.97 |
Employee Option Awards [Member] | Maximum [Member] | |
Share-based Payment Award, Fair Value Assumptions [Abstract] | |
Expected Option Term in Years | 6 years 6 months |
Expected Volatility | 101.70% |
Weighted Average Grant Date Fair Value (in dollars per share) | $ 7.33 |
STOCK-BASED COMPENSATION, Summa
STOCK-BASED COMPENSATION, Summary of Stock Options (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Sep. 30, 2019 | |
Indco's [Member] | ||
Number of Options [Roll Forward] | ||
Outstanding, beginning balance (in shares) | 32,133 | |
Granted (in shares) | 6,880 | |
Outstanding, ending balance (in shares) | 39,013 | 32,133 |
Exercisable, ending balance (in shares) | 23,343 | |
Weighted Average Exercise Price [Roll Forward] | ||
Outstanding, beginning balance (in dollars per share) | $ 8.85 | |
Granted (in dollars per share) | 11.08 | |
Outstanding, ending balance (in dollars per share) | 9.24 | $ 8.85 |
Exercisable, ending balance (in dollars per share) | $ 7.98 | |
Weighted Average Remaining Contractual Term [Abstract] | ||
Outstanding | 7 years 3 months 22 days | 7 years 4 months 2 days |
Granted | 9 years 9 months | |
Exercisable | 6 years 5 months 26 days | |
Aggregate Intrinsic Value [Abstract] | ||
Outstanding, beginning balance | $ 85,450 | |
Granted | 0 | |
Outstanding, ending balance | 85,450 | $ 85,450 |
Exercisable, ending balance | $ 85,450 | |
Share price (in dollars per share) | $ 11.08 | |
Total unrecognized compensation expense | $ 66,000 | |
Stock-based compensation | $ 302,000 | $ 172,000 |
Indco's [Member] | Maximum [Member] | ||
Aggregate Intrinsic Value [Abstract] | ||
Weighted-average vesting period | 1 year | |
Employee Option Awards [Member] | ||
Number of Options [Roll Forward] | ||
Outstanding, beginning balance (in shares) | 110,837 | |
Granted (in shares) | 7,500 | |
Exercised (in shares) | (3,841) | |
Outstanding, ending balance (in shares) | 114,496 | 110,837 |
Exercisable, ending balance (in shares) | 96,792 | |
Weighted Average Exercise Price [Roll Forward] | ||
Outstanding, beginning balance (in dollars per share) | $ 5.05 | |
Granted (in dollars per share) | 9 | |
Exercised (in dollars per share) | 8.17 | |
Outstanding, ending balance (in dollars per share) | 5.21 | $ 5.05 |
Exercisable, ending balance (in dollars per share) | $ 4.62 | |
Weighted Average Remaining Contractual Term [Abstract] | ||
Outstanding | 5 years 8 months 1 day | 5 years 11 months 23 days |
Granted | 9 years 9 months | |
Exercisable | 5 years 1 month 24 days | |
Aggregate Intrinsic Value [Abstract] | ||
Outstanding, beginning balance | $ 438,060 | |
Granted | 0 | |
Outstanding, ending balance | 290,880 | $ 438,060 |
Exercisable, ending balance | $ 290,880 | |
Share price (in dollars per share) | $ 7.50 | |
Total unrecognized compensation expense | $ 51,000 | |
Employee Option Awards [Member] | Maximum [Member] | ||
Aggregate Intrinsic Value [Abstract] | ||
Weighted-average vesting period | 1 year | |
Non-Employee Option [Member] | ||
Number of Options [Roll Forward] | ||
Outstanding, beginning balance (in shares) | 51,053 | |
Forfeited (in shares) | (15,000) | |
Outstanding, ending balance (in shares) | 36,053 | 51,053 |
Exercisable, ending balance (in shares) | 6,053 | |
Weighted Average Exercise Price [Roll Forward] | ||
Outstanding, beginning balance (in dollars per share) | $ 7.58 | |
Forfeited (in dollars per share) | 8.04 | |
Outstanding, ending balance (in dollars per share) | 7.38 | $ 7.58 |
Exercisable, ending balance (in dollars per share) | $ 4.13 | |
Weighted Average Remaining Contractual Term [Abstract] | ||
Outstanding | 7 years 3 months 4 days | 7 years 9 months 18 days |
Forfeited | 0 years | |
Exercisable | 6 years 6 months | |
Aggregate Intrinsic Value [Abstract] | ||
Outstanding, beginning balance | $ 72,680 | |
Forfeited | 0 | |
Outstanding, ending balance | 20,400 | $ 72,680 |
Exercisable, ending balance | $ 20,400 | |
Share price (in dollars per share) | $ 7.50 | |
Total unrecognized compensation expense | $ 32,000 | |
Non-Employee Option [Member] | Maximum [Member] | ||
Aggregate Intrinsic Value [Abstract] | ||
Weighted-average vesting period | 1 year |
STOCK-BASED COMPENSATION, Restr
STOCK-BASED COMPENSATION, Restricted Stock (Details) - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | Sep. 30, 2019 | |
Weighted Average Remaining Contractual Term [Abstract] | |||
Restricted stock vested but not issued | $ 0 | $ 236 | |
Employee Restricted Stock [Member] | |||
Restricted Stock [Roll Forward] | |||
Unvested, beginning balance (in shares) | 5,000 | ||
Vested (in shares) | 0 | ||
Unvested, ending balance (in shares) | 5,000 | 5,000 | |
Weighted Average Grant Date Fair Value [Abstract] | |||
Unvested, beginning balance (in dollars per share) | $ 8.01 | ||
Vested (in dollars per share) | 0 | ||
Unvested, ending balance (in dollars per share) | $ 8.01 | $ 8.01 | |
Weighted Average Remaining Contractual Term [Abstract] | |||
Unvested | 1 month 10 days | 7 months 10 days | |
Granted in period (in shares) | 0 | ||
Vesting period | 3 years | ||
Grant date cost to recipient | $ 0 | ||
Total unrecognized compensation cost | $ 2 | ||
Weighted-average vesting period | 1 month 10 days | ||
Restricted stock vested but not issued | $ 159 | ||
Restricted stock vested but not issued (in shares) | 18,333 | ||
Non-Employee Restricted Stock [Member] | |||
Restricted Stock [Roll Forward] | |||
Unvested, beginning balance (in shares) | 26,667 | ||
Vested (in shares) | 0 | ||
Unvested, ending balance (in shares) | 26,667 | 26,667 | |
Weighted Average Grant Date Fair Value [Abstract] | |||
Unvested, beginning balance (in dollars per share) | $ 8.04 | ||
Vested (in dollars per share) | 0 | ||
Unvested, ending balance (in dollars per share) | $ 8.04 | $ 8.04 | |
Weighted Average Remaining Contractual Term [Abstract] | |||
Unvested | 4 months 17 days | 10 months 17 days | |
Total unrecognized compensation cost | $ 30 | ||
Weighted-average vesting period | 4 months 17 days |
INCOME PER COMMON SHARE, Reconc
INCOME PER COMMON SHARE, Reconciliation of Basic and Diluted EPS (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
INCOME PER COMMON SHARE [Abstract] | ||||
Net income (loss) | $ (937) | $ 175 | $ (1,057) | $ 719 |
Preferred stock dividends | (175) | (148) | (326) | (270) |
Net (Loss) Income Available to Common Stockholders | $ (1,112) | $ 27 | $ (1,383) | $ 449 |
Common Shares [Abstract] | ||||
Basic - weighted average common shares (in shares) | 865,985 | 847,784 | 865,630 | 847,621 |
Effect of dilutive securities [Abstract] | ||||
Stock options (in shares) | 0 | 51,097 | 0 | 54,644 |
Restricted stock (in shares) | 0 | 20,369 | 0 | 19,162 |
Convertible preferred stock (in shares) | 0 | 12,710 | 0 | 12,710 |
Diluted - weighted average common stock (in shares) | 865,985 | 931,960 | 865,630 | 934,137 |
Income per Common Share - Basic [Abstract] | ||||
Net income (loss) (in dollars per share) | $ (1.08) | $ 0.21 | $ (1.22) | $ 0.85 |
Preferred stock dividends (in dollars per share) | (0.21) | (0.17) | (0.38) | (0.32) |
Net income (loss) attributable to common stockholders (in dollars per share) | (1.29) | 0.04 | (1.60) | 0.53 |
Income per Common Share - Diluted [Abstract] | ||||
Net income (loss) (in dollars per share) | (1.08) | 0.18 | (1.22) | 0.77 |
Preferred stock dividends (in dollars per share) | (0.21) | (0.15) | (0.38) | (0.29) |
Net income (loss) available to common stockholders (in dollars per share) | $ (1.29) | $ 0.03 | $ (1.60) | $ 0.48 |
Anti-dilutive shares (in shares) | 0 |
INCOME PER COMMON SHARE, Potent
INCOME PER COMMON SHARE, Potentially Diluted Securities (Details) - shares | Mar. 31, 2020 | Mar. 31, 2019 |
Potentially Diluted Securities [Abstract] | ||
Potentially diluted securities (in shares) | 188,526 | 214,228 |
Convertible Preferred Stock [Member] | ||
Potentially Diluted Securities [Abstract] | ||
Potentially diluted securities (in shares) | 6,310 | 12,710 |
Employee Stock Options [Member] | ||
Potentially Diluted Securities [Abstract] | ||
Potentially diluted securities (in shares) | 114,496 | 118,798 |
Non-Employee Stock Options [Member] | ||
Potentially Diluted Securities [Abstract] | ||
Potentially diluted securities (in shares) | 36,053 | 51,053 |
Employee Restricted Stock [Member] | ||
Potentially Diluted Securities [Abstract] | ||
Potentially diluted securities (in shares) | 5,000 | 5,000 |
Non-Employee Restricted Stock [Member] | ||
Potentially Diluted Securities [Abstract] | ||
Potentially diluted securities (in shares) | 26,667 | 26,667 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
INCOME TAXES [Abstract] | ||||
Statutory federal income tax rate | 10.10% | 25.20% | ||
Reconciliation of Income Tax [Abstract] | ||||
Federal taxes at statutory rates | $ 247 | $ (204) | ||
Permanent differences | (28) | (13) | ||
Other | (63) | 0 | ||
State and local taxes | (37) | (36) | ||
Total | $ 35 | $ (69) | $ 119 | $ (253) |
BUSINESS SEGMENT INFORMATION (D
BUSINESS SEGMENT INFORMATION (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Mar. 31, 2020USD ($) | Mar. 31, 2019USD ($) | Mar. 31, 2020USD ($)Segment | Mar. 31, 2019USD ($) | Sep. 30, 2019USD ($) | |
Segment Reporting [Abstract] | |||||
Number of reportable segments | Segment | 3 | ||||
Revenue | $ 19,121 | $ 20,969 | $ 38,942 | $ 43,296 | |
Forwarding expenses and cost of revenues | 13,125 | 14,599 | 26,659 | 30,439 | |
Gross profit | 5,996 | 6,370 | 12,283 | 12,857 | |
Selling, general and administrative | 6,584 | 5,692 | 12,669 | 11,081 | |
Amortization of intangible assets | 243 | 236 | 486 | 444 | |
(Loss) Income from Operations | (831) | 442 | (872) | 1,332 | |
Interest expense (income), net | 141 | 198 | 304 | 360 | |
Identifiable assets | 52,868 | 55,348 | 52,868 | 55,348 | $ 59,719 |
Capital expenditures | 34 | 71 | 131 | 253 | |
Corporate [Member] | |||||
Segment Reporting [Abstract] | |||||
Revenue | 0 | 0 | 0 | 0 | |
Forwarding expenses and cost of revenues | 0 | 0 | 0 | 0 | |
Gross profit | 0 | 0 | 0 | 0 | |
Selling, general and administrative | 860 | 741 | 1,645 | 1,355 | |
Amortization of intangible assets | 243 | 236 | 486 | 444 | |
(Loss) Income from Operations | (1,103) | (977) | (2,131) | (1,799) | |
Interest expense (income), net | (3) | (2) | (5) | (5) | |
Identifiable assets | 26,781 | 25,433 | 26,781 | 25,433 | |
Capital expenditures | 0 | 0 | 0 | 0 | |
Global Logistics Services [Member] | |||||
Segment Reporting [Abstract] | |||||
Revenue | 15,328 | 31,407 | |||
Global Logistics Services [Member] | Reportable Segments [Member] | |||||
Segment Reporting [Abstract] | |||||
Revenue | 15,328 | 16,865 | 31,407 | 35,670 | |
Forwarding expenses and cost of revenues | 11,615 | 12,957 | 23,702 | 27,375 | |
Gross profit | 3,713 | 3,908 | 7,705 | 8,295 | |
Selling, general and administrative | 3,952 | 3,468 | 7,590 | 6,828 | |
Amortization of intangible assets | 0 | 0 | 0 | 0 | |
(Loss) Income from Operations | (239) | 440 | 115 | 1,467 | |
Interest expense (income), net | 54 | 127 | 120 | 225 | |
Identifiable assets | 14,012 | 20,825 | 14,012 | 20,825 | |
Capital expenditures | 17 | 2 | 64 | 16 | |
Manufacturing [Member] | Reportable Segments [Member] | |||||
Segment Reporting [Abstract] | |||||
Revenue | 2,056 | 2,452 | 3,926 | 4,533 | |
Forwarding expenses and cost of revenues | 908 | 1,077 | 1,753 | 2,010 | |
Gross profit | 1,148 | 1,375 | 2,173 | 2,523 | |
Selling, general and administrative | 701 | 759 | 1,383 | 1,467 | |
Amortization of intangible assets | 0 | 0 | 0 | 0 | |
(Loss) Income from Operations | 447 | 616 | 790 | 1,056 | |
Interest expense (income), net | 66 | 36 | 138 | 76 | |
Identifiable assets | 2,425 | 2,418 | 2,425 | 2,418 | |
Capital expenditures | 0 | 0 | 23 | 41 | |
Life Sciences [Member] | Reportable Segments [Member] | |||||
Segment Reporting [Abstract] | |||||
Revenue | 1,737 | 1,652 | 3,609 | 3,093 | |
Forwarding expenses and cost of revenues | 602 | 565 | 1,204 | 1,054 | |
Gross profit | 1,135 | 1,087 | 2,405 | 2,039 | |
Selling, general and administrative | 1,071 | 724 | 2,051 | 1,431 | |
Amortization of intangible assets | 0 | 0 | 0 | 0 | |
(Loss) Income from Operations | 64 | 363 | 354 | 608 | |
Interest expense (income), net | 24 | 37 | 51 | 64 | |
Identifiable assets | 9,650 | 6,672 | 9,650 | 6,672 | |
Capital expenditures | $ 17 | $ 69 | $ 44 | $ 196 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - Earnings Way, LLC [Member] - Indco [Member] $ in Thousands | Feb. 04, 2020USD ($) |
Purchase and Sale Agreement [Abstract] | |
Aggregate purchase price | $ 845 |
Maximum [Member] | |
Purchase and Sale Agreement [Abstract] | |
Consideration transferred - Liabilities incurred | $ 700 |
LEASES (Details)
LEASES (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | |
Lease Cost [Abstract] | |||
Operating lease cost | $ 353 | ||
Short-term lease cost | 68 | ||
Total lease cost | 421 | ||
Rent expense | 372 | ||
Right of use assets | $ 1,599 | 1,599 | $ 0 |
Short-term lease liabilities | 479 | 479 | 0 |
Long-term lease liabilities | 1,142 | $ 1,142 | $ 0 |
Increase in operating lease right-of-use asset | $ 857 | ||
Weighted-average remaining lease term - operating leases | 3 years 10 months 24 days | 3 years 10 months 24 days | |
Weighted-average discount rate - operating leases | 6.58% | 6.58% | |
Cash paid for amounts included in the measurement of operating lease obligations | $ 410 | ||
Future Minimum Lease Commitments under Non-cancellable Leases [Abstract] | |||
2020 | $ 493 | 493 | |
2021 | 469 | 469 | |
2022 | 414 | 414 | |
2023 | 241 | 241 | |
2024 | 221 | 221 | |
Total undiscounted lease payments | 1,838 | 1,838 | |
Less: Imputed interest | (217) | (217) | |
Total lease obligations | $ 1,621 | $ 1,621 | |
Minimum [Member] | |||
Operating lease [Abstract] | |||
Operating lease term | 1 month | 1 month | |
Maximum [Member] | |||
Operating lease [Abstract] | |||
Operating lease term | 58 months | 58 months |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - Subsequent Event [Member] - PPP Loans [Member] $ in Thousands | Apr. 19, 2020USD ($) |
CARES Act Loan [Abstract] | |
Face amount of debt | $ 2,726 |
Interest rate percentage | 1.00% |
Debt instrument maturity date | Apr. 19, 2022 |