Janel Corp 8-K/A, filed Nov 4, 2022
Janel Corp (JANL)
8-K/A
2022-11-04
For: 2022-08-19
View Original
Added on
April 06, 2026
About this 8-K/A
Janel Corp filed this 8-K/A on November 4, 2022, reporting on events of August 19, 2022.
Items reported
- Item 9.01: Financial statements and exhibits
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
(Amendment No. 1)
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): August 19, 2022
(Exact name of registrant as specified in its charter)
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(State or Other Jurisdiction of Incorporation)
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(Commission File Number)
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(IRS Employer Identification No.)
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(Address of Principal Executive Offices)
Registrant’s telephone number, including area code: (212 ) 373-5895
Inapplicable
(Former Name or Former Address if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Securities registered pursuant to Section 12(b) of the Act:
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Title of each class
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Trading symbol
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Name of each exchange on which registered
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this
chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any
new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
EXPLANATORY NOTE
This Amendment No. 1 to Current Report on Form 8-K (this “Amendment”) amends the Current Report on Form 8-K filed by Janel Corporation (the “Company”)
with the Securities and Exchange Commission (the “SEC”) on August 23, 2022 (the “Original Form 8-K”) to provide the information required by Items 9.01(a) and (b) of Form 8-K related to the completion of the previously announced acquisition (the
“Acquisition”) of 1,108,000 shares of common stock, par value $0.001 per share, of Rubicon Technology, Inc. (“Rubicon”), at a price per share of $20.00, in a cash tender offer made pursuant to the Stock Purchase and Sale Agreement, dated July 1,
2022, between the Company and Rubicon. Except as otherwise stated above, all other information in the Original Form 8-K remains unchanged.
| Item 9.01 |
Financial Statements and Exhibits
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(a)
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Financial Statements of Business or Funds Acquired.
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The audited consolidated financial statements of Rubicon for the years ended December 31, 2021 and 2020 and unaudited condensed consolidated financial
statements of Rubicon for the six months ended June 30, 2022 and 2021 are filed as Exhibit 99.1 and Exhibit 99.2, respectively, to this Amendment and incorporated herein by reference.
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(b)
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Pro Forma Financial Information.
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The unaudited pro forma condensed consolidated financial information identified below giving effect to the Acquisition is attached as Exhibit 99.3 to
this Amendment and incorporated herein by reference:
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Pro forma balance sheet as of June 30, 2022
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Pro forma statement of operations for the fiscal year ended September 30, 2021
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Pro forma statement of operations for the nine months ended June 30, 2022
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(c) Exhibits.
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Exhibit No.
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Description
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Consent of Marcum LLP, independent registered public accounting firm of Rubicon Technology, Inc.
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Audited consolidated financial statements of Rubicon Technology, Inc. for the years ended December 31, 2021 and 2020 (incorporated by reference to Part II, Item 8 of Rubicon Technology,
Inc.’s Annual Report on Form 10-K, filed with the SEC on March 28, 2022)
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Unaudited condensed consolidated financial statements of Rubicon Technology, Inc. for the three and six months ended June 30, 2022 and 2021 (incorporated by reference to Part I, Item 1 of
Rubicon Technology, Inc.’s Quarterly Report on Form 10-Q, filed with the SEC on August 12, 2022)
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Unaudited pro forma financial information of Janel Corporation for the fiscal year ended September 30, 2021 and the nine months ended June 30, 2022
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104
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Cover Page Interactive Data File (embedded within the Inline XBRL document)
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
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JANEL CORPORATION
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(Registrant)
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Date: November 4, 2022
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By:
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/s/ Dominique Schulte
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Name: Dominique Schulte
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Title: Chief Executive Officer
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Exhibit 23.1
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM’S CONSENT
We consent to the incorporation by reference in this Form 8-K/A (Amendment No. 1) of Janel Corporation our report dated March 25, 2022 with respect to our
audits of the consolidated financial statements of Rubicon Technology, Inc. and Subsidiaries as of December 31, 2021 and 2020 and for the years then ended appearing in the Annual Report on Form 10-K of Rubicon Technology, Inc. and Subsidiaries for
the year ended December 31, 2021.
/s/ Marcum llp
Marcum llp
New York, NY
November 4, 2022
Exhibit 99.3
JANEL CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
The following unaudited pro forma condensed consolidated financial information and accompanying notes reflect the pro forma effects of the following
transaction (the “Transaction”). On August 19, 2022, Janel Corporation (the “Company” or “Janel”) acquired 1,108,000 shares (the “Acquired Shares”) of common stock, par value $0.001 per share, of Rubicon Technology, Inc. (“Rubicon”), at a price per
share of $20.00, in a cash tender offer made pursuant to the Stock Purchase and Sale Agreement, dated July 1, 2022, between the Company and Rubicon (the “Purchase Agreement”) and on the terms and subject to the conditions provided for in the Offer to
Purchase, dated July 13, 2022 (the “Offer to Purchase”) filed as Exhibit (a)(1)(A) to the Schedule TO-T filed by the Company with the Securities and Exchange Commission (the “SEC”) on July 13, 2022 (the “Schedule TO”). Pursuant to the terms of the
Purchase Agreement, the Acquired Shares represented 44.99% of Rubicon’s issued and outstanding shares of common stock as of August 3, 2022, as reported in Rubicon's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2022, filed
with the SEC on August 12, 2022.
The Company acquired the Acquired Shares on a pro rata basis from all stockholders of
Rubicon who had validly tendered and not properly withdrawn shares of Rubicon’s common stock in the Offer as of its expiration at 12:00 Midnight (New York City time) on Friday, August 12, 2022. The Company accepted the Acquired Shares for payment
in accordance with the terms of the Offer at a price per share of $20.00, or $22,160,000.00 in the aggregate, paid from (a) the Company’s cash on hand, (b) proceeds of a new bridge loan (the “Bridge Loan”) under the Amended and Restated Loan and
Security Agreement dated September 21, 2021, by and among Santander Bank, N.A., Janel Group, Inc., Expedited Logistics and Freight Services, LLC, ELFS Brokerage LLC, the Company and Expedited Logistics and Freight Services, LLC (the “Santander Credit Facility”), (c) other funds available under the Santander Credit Facility, and (d) funds available under Amendment No. 3, dated August 1, 2022, to the First Merchants Credit Agreement (the “First
Merchants Facility”) dated February 29, 2016, by and between Indco, Inc., a subsidiary of the Company, and First Merchants Bank.
In accordance with the Purchase Agreement, effective as of August 19, 2022, two designees of the Company became directors of Rubicon, replacing two
directors who resigned upon consummation of the Transaction.
The unaudited pro forma balance sheet assumes that the Transaction was completed on June 30, 2022. The unaudited pro forma statements of operations for
the fiscal year ended September 30, 2021 and for the nine months ended June 30, 2022 assume the Transaction was completed on October 1, 2020 and reflect the pro forma operating results of Janel for its fiscal year 2021, derived from the Company’s
audited financial statements for such period, and for the nine months ended June 30, 2022, derived from the Company’s unaudited financial statements for such period.
The Company prepares its financial statements in accordance with U.S. Generally Accepted Accounting Principles. The unaudited pro forma financial
statements were prepared in accordance with the rules and regulations of the SEC and should not be considered indicative of the financial position or results of operations that would have occurred if the Transaction had been completed on the dates
indicated, nor are they indicative of the future financial position or results of operations of Janel and Rubicon following completion of the Transaction. The historical consolidated financial information of Janel has been adjusted in the unaudited
pro forma financial statements to give effect to pro forma events that are (1) directly attributable to the acquisition, (2) factually supportable, and (3) with respect to the statement of income, expected to have a continuing impact on the combined
results.
The unaudited pro forma financial information should be read in conjunction with the accompanying notes thereto. In addition, the unaudited pro forma financial information was based on, and should be read in conjunction with:
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the separate historical financial statements of Janel as of and for the fiscal year ended September 30, 2021 and the related notes included in Janel’s Annual Report on Form 10-K
for the fiscal year ended September 30, 2021, filed with the SEC on December 27, 2021, and the historical financial statements for the quarter ended June 30, 2022, including related notes, included in Janel’s Quarterly Report on Form 10-Q for
the quarter ended June 30, 2022, filed with the SEC on August 5, 2022; and
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the separate historical financial statements of Rubicon as of and for the year ended December 31, 2021 and 2020 and the related notes, and the historical financial statements for the three and six
months ended June 30, 2022 and 2021, including related notes, which are attached as Exhibit 99.1 and Exhibit 99.2, respectively, to this Form 8-K/A.
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Janel Corporation and Subsidiaries
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||||||||||||||||
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Unaudited Pro Forma Condensed Consolidated Statements of Operations
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Transaction
Accounting
Adjustments
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|||||||||||||||
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For the Year Ended September 30, 2021
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(in thousands, except share and per share data)
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As Reported
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Pro Forma
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Revenue
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$
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146,419
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$ |
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$
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146,419
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Forwarding expenses and cost of revenues
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113,986
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- |
113,986
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Gross profit
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32,433
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- |
32,433
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Cost and Expenses:
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Selling, general and administrative
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27,362
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623
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4
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a
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27,985
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Amortization of intangible assets
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1,120
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- |
1,120
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Total Costs and Expenses
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28,482
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623
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29,105
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Income from Operations
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3,951
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(623
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)
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3,328
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Other Items:
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- |
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Interest expense
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(589
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)
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(268
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)
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4
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b
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(857
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)
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Gain on Paycheck Protection Program (PPP) loan forgiveness
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2,895
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- |
2,895
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Change in fair value of mandatorily redeemable non-controlling interest
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(93
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)
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- |
(93
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)
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Fair value adjustment to Rubicon investment (net of dividend)
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-
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1,274
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4
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c
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1,274
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Income Before Income Taxes
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6,164
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383
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6,547
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Income tax expense
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(961
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)
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42
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4
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d
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(919
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)
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Net Income
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5,203
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425
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5,628
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Preferred stock dividends
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(766
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)
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(766
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)
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Net Income Available to Common Stockholders
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$
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4,437
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$
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425
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$
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4,862
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Net Income per share
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Basic
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$
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5.54
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$
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6.00
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Diluted
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$
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5.26
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$
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5.69
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Net Income per share attributable to common stockholders:
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Basic
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$
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4.73
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$
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5.18
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Diluted
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$
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4.48
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$
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4.91
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Weighted average number of shares outstanding:
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||||||||||||||||
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Basic
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938.5
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938.5
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Diluted
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989.5
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989.5
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See the accompanying notes to the unaudited pro forma condensed consolidated financial statements, which are an integral part of these financial
statements.
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Janel Corporation and Subsidiaries
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Unaudited Pro Forma Condensed Consolidated Statements of Operations
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Transaction
Accounting
Adjustments
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|||||||||||||||
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For the Nine Months Ended June 30, 2022
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||||||||||||||||
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(in thousands, except share and per share data)
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As Reported
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Pro Forma
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||||||||||||||
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Revenue
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$
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243,149
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$
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-
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$
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243,149
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||||||||||
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Forwarding expenses and cost of revenues
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193,986
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- |
193,986
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|||||||||||||
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Gross profit
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49,163
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-
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49,163
|
|||||||||||||
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Cost and Expenses:
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||||||||||||||||
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Selling, general and administrative
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39,718
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623
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4
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a
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40,341
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|||||||||||
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Amortization of intangible assets
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1,485
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- |
1,485
|
|||||||||||||
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Total Costs and Expenses
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41,203
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623
|
41,826
|
|||||||||||||
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Income from Operations
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7,960
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(623
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)
|
7,337
|
||||||||||||
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Other Items:
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||||||||||||||||
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Interest (expense)
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(847
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)
|
(197
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)
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4
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b
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(1,044
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)
|
||||||||
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Fair value adjustment to Rubicon investment (net of dividend)
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-
|
211
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4
|
c
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211
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|||||||||||
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Income Before Income Taxes
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7,113
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(609
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)
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6,504
|
||||||||||||
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Income tax expense
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(1,994
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)
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55
|
4
|
d
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(1,939
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)
|
|||||||||
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Net Income
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5,119
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(554
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)
|
4,565
|
||||||||||||
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Preferred stock dividends
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(515
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)
|
- |
(515
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)
|
|||||||||||
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Non-controlling interest dividends
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(61
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)
|
- |
(61
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)
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|||||||||||
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Net Income Available to Common Stockholders
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$
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4,543
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$
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(554
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)
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$
|
3,989
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|||||||||
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Net Income per share
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||||||||||||||||
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Basic
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$
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5.13
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$
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4.58
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||||||||||||
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Diluted
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$
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4.85
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$
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4.00
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||||||||||||
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Net Income per share attributable to common stockholders:
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||||||||||||||||
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Basic
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$
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4.56
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$
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4.33
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||||||||||||
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Diluted
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$
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4.31
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$
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3.78
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||||||||||||
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Weighted average number of shares outstanding:
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||||||||||||||||
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Basic
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996.9
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996.9
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||||||||||||||
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Diluted
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1,055.0
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1,055.0
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||||||||||||||
See the accompanying notes to the unaudited pro forma condensed consolidated financial statements, which are an integral part of these financial statements.
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Janel Corporation and Subsidiaries
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||||||||||||||||
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Unaudited Pro Forma Condensed Consolidated Balance Sheet
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Transaction
Accounting
Adjustments
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|||||||||||||||
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As of June 30, 2022
|
||||||||||||||||
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(in thousands, except share and per share data)
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As Reported
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Pro Forma
|
||||||||||||||
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ASSETS
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||||||||||||||||
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Current Assets:
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||||||||||||||||
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Cash
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$
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3,836
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$
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(2,991
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)
|
3
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$
|
845
|
||||||||
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Accounts receivable, net of allowance for doubtful accounts
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61,984
|
- |
61,984
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|||||||||||||
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Inventory, net
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4,133
|
- |
4,133
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|||||||||||||
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Prepaid expenses and other current assets
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3,726
|
- |
3,726
|
|||||||||||||
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Total current assets
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73,679
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(2,991
|
)
|
70,688
|
||||||||||||
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Property and Equipment, net
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5,103
|
5,103
|
||||||||||||||
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Other Assets:
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-
|
|||||||||||||||
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Intangible assets, net
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22,689
|
- |
22,689
|
|||||||||||||
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Goodwill
|
18,598
|
- |
18,598
|
|||||||||||||
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Operating lease right of use asset
|
5,505
|
- |
5,505
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|||||||||||||
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Security deposits and other long term assets
|
532
|
- |
532
|
|||||||||||||
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Investment in Rubicon at fair value
|
-
|
10,183
|
4
|
e
|
10,183
|
|||||||||||
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Total other assets
|
47,324
|
10,183
|
57,507
|
|||||||||||||
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Total assets
|
126,106
|
7,192
|
133,298
|
|||||||||||||
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LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||||||||||
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Current Liabilities:
|
||||||||||||||||
|
Line of credit
|
$
|
22,920
|
$
|
3,500
|
3
|
$
|
26,420
|
|||||||||
|
Accounts payable - trade
|
47,585
|
- |
47,585
|
|||||||||||||
|
Accrued expenses and other current liabilities
|
8,276
|
765
|
4
|
f
|
9,041
|
|||||||||||
|
Dividends payable
|
1,673
|
- |
1,673
|
|||||||||||||
|
Current portion of earnout
|
1,054
|
- |
1,054
|
|||||||||||||
|
Current portion of deferred acquisition payments
|
192
|
- |
192
|
|||||||||||||
|
Current portion of subordinated promissory note-related party
|
450
|
- |
450
|
|||||||||||||
|
Current portion of long-term debt
|
874
|
- |
874
|
|||||||||||||
|
Current portion of operating lease liabilities
|
1,623
|
- |
1,623
|
|||||||||||||
|
Bridge loan
|
-
|
-
|
3
|
-
|
||||||||||||
|
Total current liabilities
|
84,647
|
4,265
|
88,912
|
|||||||||||||
|
Other Liabilities:
|
||||||||||||||||
|
Long-term debt
|
4,017
|
3,481
|
3
|
7,498
|
||||||||||||
|
Long-term portion of earnout
|
2,546
|
- |
2,546
|
|||||||||||||
|
Subordinated promissory notes-related party
|
5,475
|
- |
5,475
|
|||||||||||||
|
Long term portion of deferred acquisition payments
|
187
|
- |
187
|
|||||||||||||
|
Mandatorily redeemable non-controlling interest
|
841
|
- |
841
|
|||||||||||||
|
Deferred income taxes
|
2,114
|
- |
2,114
|
|||||||||||||
|
Long-term operating lease liabilities
|
4,047
|
- |
4,047
|
|||||||||||||
|
Other liabilities
|
371
|
- |
371
|
|||||||||||||
|
Total other liabilities
|
19,598
|
3,481
|
23,079
|
|||||||||||||
|
Total liabilities
|
104,245
|
7,746
|
111,991
|
|||||||||||||
|
Stockholders' Equity:
|
||||||||||||||||
|
Preferred Stock, $0.001 par value; 100,000 shares authorized
|
||||||||||||||||
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Series B Preferred Stock - 5,700 shares authorized, 0 shares issued and outstanding as of June 30, 2022
|
-
|
- |
-
|
|||||||||||||
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Series C Preferred Stock - 30,000 shares authorized and 11,368 shares issued and outstanding at June 30, 2022, liquidation value of $7,357 at June 30, 2022
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-
|
- |
-
|
|||||||||||||
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Common stock, $0.001 par value; 4,500,000 shares authorized, 1,077,718 issued and 1,057,718 outstanding as of June 30, 2022
|
1
|
- |
1
|
|||||||||||||
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Paid-in capital
|
13,461
|
-
|
13,461
|
|||||||||||||
|
Common Stock held in treasury, at cost, 20,000 shares
|
(240
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)
|
- |
(240
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)
|
|||||||||||
|
Accumulated earnings
|
8,639
|
(554
|
)
|
8,085
|
||||||||||||
|
Total stockholders' equity
|
21,861
|
(554
|
)
|
21,307
|
||||||||||||
|
Total liabilities and stockholders' equity
|
$
|
126,106
|
$
|
7,192
|
$
|
133,298
|
||||||||||
See the accompanying notes to the unaudited pro forma condensed consolidated financial statements, which are an integral part of these financial
statements.
1. Description of Transaction:
On August 23, 2022, the Company acquired 1,108,000 shares of the common stock, par value
$0.001 per share, of Rubicon at a price per share of $20.00, in a cash tender offer made pursuant to the Purchase Agreement. The purchase price for the acquired Rubicon shares
was $22,160,000 and was paid from (a) the Company’s cash on hand, (b) proceeds of the Bridge Loan, (c) other funds available under the Santander Credit Facility and (d) funds available under the First Merchants Facility. On August 12, 2022, Rubicon announced that, in connection with the cash tender offer by Janel Corporation for up to 45% of Rubicon’s issued and outstanding common stock, the
Rubicon Board of Directors set August 23, 2022 (the “Record Date”) as the record date for a cash distribution of $11.00 per share of its common stock (the “Distribution”). The Distribution and the Record Date was conditioned upon the consummation
of the Transaction on August 19, 2022. Accordingly, the Company received a distribution in the amount of $12,188,000 in cash on August 29, 2022 as a result of its ownership of 1,108,000 shares of
Rubicon common stock.
2. Basis of Presentation:
The Company has determined that its investment in Rubicon is subject to the equity method of accounting and the Company has elected the fair value option
under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 825-10, Financial Instruments (“ASC 825-10”) to account for the equity method investment. In accordance with ASC 825-10, the Company will present its equity
method investment in Rubicon at fair value each reporting period with changes in fair value and dividends received from Rubicon recorded to income from investment in unconsolidated affiliate on the Company’s statements of operations.
The unaudited pro forma financial statements and underlying pro forma adjustments are based upon currently available information and include certain
estimates and assumptions made by management; accordingly, actual results could differ materially from the pro forma information. Management believes the assumptions provide a reasonable and reliably determinable basis for presenting the significant
effects of the transactions described above. These unaudited pro forma financial statements are provided for illustrative purposes only and may or may not provide an indication of results in the future.
3. Consideration Paid:
As noted in Note (1), the purchase price for the Acquired Shares was $22,160,000. This
consideration was funded by the Company’s cash on hand ($3,179,000), the proceeds of the Bridge Loan ($12,000,000), funds available under the Santander Credit Facility ($3,500,000) and funds available under
the First Merchants Facility ($3,481,000). As noted in Note (1), on August 29, 2022, the Company received a cash distribution of $12,188,000 as a result of its ownership of 1,108,000 shares of Rubicon common stock and subsequently repaid the Bridge Loan Distribution on August 30, 2022.
4. Adjustments to Unaudited Pro Forma Condensed Consolidated Income Statements and Balance Sheet:
Adjustments to the unaudited pro forma condensed consolidated income statements for the nine months ended June 30, 2022 and the fiscal year ended
September 30, 2021 and unaudited pro forma condensed consolidated balance sheet as of June 30, 2022 were as follows (in thousands):
a. Selling, general and administrative: Adjustments to Selling, general and administrative are comprised of the following:
|
Nine months ended
June 30, 2022
|
Twelve months ended
September 30, 2021
|
|||||||
|
Direct cost associated with transaction
|
$
|
623
|
$
|
623
|
||||
b. Interest expense: Adjustments to interest expense are comprised of the
following:
|
Nine months ended
June 30, 2022
|
Twelve months ended
September 30, 2021
|
|||||||
|
Interest expense incurred on acquisition
financing provided by the Santander Credit Facility
|
$
|
83
|
$
|
111
|
||||
|
Interest expense incurred on the Bridge Loan
|
8
|
11
|
||||||
|
Interest expense incurred on the First Merchants Facility
|
106
|
146
|
||||||
|
$
|
197
|
$
|
268
|
|||||
c. Fair value adjustment to Rubicon investment (net of dividend): Adjustments
to Rubicon investment are comprised of the following:
|
Nine months ended
June 30, 2022
|
Twelve months ended
September 30, 2021
|
|||||||
|
Unrealized loss on Rubicon investment
|
$
|
(11,977
|
)
|
$
|
(10,914
|
)
|
||
|
Cash dividend received
|
$ |
12,188
|
$ |
12,188
|
||||
|
Fair value adjustment to Rubicon investment (net of dividend)
|
$
|
211
|
$
|
1,274
|
||||
d. Income tax benefit (expense): We have reflected the applicable tax
provision on the pro forma adjustments presented in the unaudited pro forma combined income statements based on the estimated respective statutory tax rate in the tax jurisdictions of the adjustments. Adjustments to Income tax benefit (expense) are
comprised of the following:
|
Nine months ended
June 30, 2022
|
Twelve months ended
September 30, 2021
|
|||||||
|
Income tax benefit
|
$
|
55
|
$
|
42
|
||||
Adjustments to the unaudited pro forma condensed consolidated balance sheet as of June 30, 2022 were as follows (in thousands, other than per share data):
e. Investment in Rubicon at fair value: Represents consideration paid for shares of Rubicon
common stock adjusted to the fair value determined using Level 1 input, quoted market price of Rubicon publicly traded common stock as of June 30, 2022 of $9.19 per common share.
|
As of June 30, 2022
|
||||
|
Consideration paid for Rubicon shares
|
$
|
22,160
|
||
|
Unrealized loss on Rubicon investment
|
$ |
(11,997
|
)
|
|
|
Investment in Rubicon at fair value
|
$
|
10,163
|
||
f. Accrued expenses and other current liabilities: Adjustments to
Accrued expenses and other current liabilities are comprised of the following:
|
As of June 30, 2022
|
||||
|
Direct cost associated with transaction
|
$
|
623
|
||
|
Accrued interest expense
|
$ |
197
|
||
|
Income tax benefit
|
$ |
(55
|
)
|
|
|
Accrued expenses and other current liabilities
|
$
|
765
|
||