Attached files
| file | filename |
|---|---|
| 8-K/A - FORM 8-K/A - JANEL CORP | v423177_8ka.htm |
| EX-10.1 - EXHIBIT 10.1 - JANEL CORP | v423177_ex10-1.htm |
| EX-99.1 - EXHIBIT 99.1 - JANEL CORP | v423177_ex99-1.htm |
Exhibit 99.2
JANEL CORPORATION
UNAUDITED PRO FORMA CONDENSED FINANCIAL INFORMATION
The transaction (the “Transaction”) contemplated by the Stock Purchase Agreement (the "Agreement") by and among, Janel Corporation, (the ”Company”) and Liberty International Inc. (“Liberty”) closed on September 14, 2015.
The following unaudited pro forma financial information for the Company and Liberty are attached hereto:
Unaudited pro forma condensed balance sheet at June 30, 2015, presenting the balance sheets of the Company and Liberty, giving effect to the Transaction, as if it had closed on October 1, 2014
Unaudited pro forma condensed income statement for the nine months ended June 30, 2015 and the fiscal year ended September 30, 2014, presenting the statements of income of the Company and Liberty giving effect to the Transaction as if it had closed on October 1, 2014 and 2013 respectively.
In presenting the pro forma financial information, we have adjusted the historical financial information to give effect to pro forma events that are (1) attributable directly to the Transaction, (2) factually supportable, and (3) with respect to the statement of operations, expected to have a continuing impact on the results. Accordingly, we have adjusted the historical financial statements to give effect to the following:
| · | An estimated increase in bank borrowings used for the purchase price and additional working capital for Liberty. |
| · | A charge to income for the additional interest expense associated with the increase in bank borrowings. |
| · | A charge to income for the costs associated with the acquisition ($63,595). |
| · | A charge to income for the estimated amortization of the intangible assets. |
The Transaction will be accounted for under the acquisition method of accounting in accordance with the authoritative guidance of the Financial Accounting Standards Board for generally accepted accounting principles in the United States with the Company treated as the accounting acquirer. The allocation of the purchase price is preliminary and is dependent upon certain valuations that have not progressed to a stage where there is sufficient information to make a final allocation. Accordingly, the final acquisition accounting adjustments may be materially different from the unaudited pro forma adjustments presented herein.
You should read this information in conjunction with:
| · | The accompanying notes to the unaudited pro forma condensed financial information. |
| · | The Company’s Form 10-K for the fiscal year ended September 30, 2014 and Form 10-Q for the nine months ended June 30, 2015. |
| · | The Company’s Current Report on Form 8-K dated September 21, 2015. |
| · | Liberty’s separate audited financial statements as of and for the years ended September 30, 2014 and 2013 included in Exhibit 99.1 hereto and its unaudited financial statements as of and for the nine months ended June 30, 2015 included in Exhibit 99.1 hereto. |
The unaudited pro forma condensed financial information has been prepared for informational purposes only. The unaudited pro forma adjustments represent management's estimates based on information available at this time. The unaudited pro forma condensed financial information is not necessarily indicative of what the financial position or results of operations actually would have been had the Transactions been completed at the dates indicated. In addition, the unaudited pro forma condensed financial information does not purport to project the future financial position or operating results of the combined company.
JANEL Corporation
PROFORMA BALANCE SHEET
(Unaudited)
| JANEL | Liberty | Combined | ||||||||||||||
| June 30, | June 30, | Proforma | ||||||||||||||
| 2015 | 2015 | Proforma | June 30, | |||||||||||||
| Historical | Historical | Adjustments | 2015 | |||||||||||||
| ASSETS | ||||||||||||||||
| CURRENT ASSETS: | ||||||||||||||||
| Cash and cash equivalents | 323,580 | 184,876 | 508,456 | |||||||||||||
| Accounts receivable, net of allowance for doubtful accounts of accounts of $168,629 and $0 respectively | 9,870,703 | 3,178,209 | - | 13,048,912 | ||||||||||||
| Loans receivable - other | - | - | - | |||||||||||||
| Prepaid expenses and sundry current assets | 162,060 | 14,919 | - | 176,979 | ||||||||||||
| Assets of discontinued operations | - | - | - | - | ||||||||||||
| Total current assets | 10,356,343 | 3,378,004 | - | 13,734,347 | ||||||||||||
| PROPERTY AND EQUIPMENT, NET | 73,468 | 187,467 | - | 260,935 | ||||||||||||
| OTHER ASSETS: | ||||||||||||||||
| Security deposits | 99,658 | 34,024 | - | 133,682 | ||||||||||||
| Intangible assets | 6,926,795 | - | 1,358,504 | A | 8,285,299 | |||||||||||
| Goodwill | - | 881,586 | A | 881,586 | ||||||||||||
| Total other assets | 7,026,453 | 34,024 | 2,240,090 | 9,300,567 | ||||||||||||
| Total assets | 17,456,264 | 3,599,495 | 2,240,090 | 23,295,849 | ||||||||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||||||
| CURRENT LIABILITIES: | ||||||||||||||||
| Note payable - bank | 2,950,306 | 2,500,000 | B | 5,450,306 | ||||||||||||
| Note payable - other | - | - | ||||||||||||||
| Accounts payable - trade | 9,417,308 | 3,363,920 | 12,781,228 | |||||||||||||
| Accrued expenses and other current liabilities | 597,179 | 47,160 | 185,470 | C | 829,809 | |||||||||||
| Current portion of long-term debt - related party | 488,595 | - | 488,595 | |||||||||||||
| Assets of discontinued operations | - | - | - | - | ||||||||||||
| Total current liabilities | 13,453,388 | 3,411,081 | 2,685,470 | 19,549,939 | ||||||||||||
| LONG-TERM DEBT - RELATED PARTY | 905,217 | - | 905,217 | |||||||||||||
| DEFERRED COMPENSATION | 78,568 | - | - | 78,568 | ||||||||||||
| Total other liabilities | 983,785 | - | - | 983,785 | ||||||||||||
| SHAREHOLDERS' EQUITY: | ||||||||||||||||
| Preferred Stock | 28 | - | 28 | |||||||||||||
| Common stock | 560 | 1,000 | (1,000 | ) D | 560 | |||||||||||
| Paid-in capital | 8,367,488 | 25,000 | (25,000 | ) D | 8,367,488 | |||||||||||
| Retained earnings | (5,348,985 | ) | 162,414 | (419,380 | ) C & D | (5,605,951 | ) | |||||||||
| Total shareholders' equity | 3,019,091 | 188,414 | (445,380 | ) | 2,762,125 | |||||||||||
| Total liabilities shareholders' equity | 17,456,264 | 3,599,495 | 2,240,090 | 23,295,848 | ||||||||||||
See notes to the unaudited proforma consolidated financial statements
NOTES:
| A. | Reflects the allocation of the purchase price. The purchase price includes cash paid at closing in the amount of $2,500,000 less the elimination of equity and retained earnings of Liberty in the amount of $188,414. The allocation of the purchase price is preliminary and therefore subject to change. |
| Total purchase price | 2,311,586 | |||
| Less: Net assets acquired: | ||||
| Intangible assets | 1,430,000 | |||
| Goodwill | 881,586 |
The intangible assets is net of an estimated $71,500 of accumulated amortization for the nine months ended June 30, 2015.
| B. | Estimate of additional bank borrowings used for the purchase price and additional working capital for Liberty. |
| C. | Acquisition and interest costs. |
| D. | Elimination of Stockholders' equity. |
JANEL CORPORATION
PROFORMA STATEMENT OF OPERATIONS
(Unaudited)
| JANEL | Liberty | Combined | ||||||||||||||
| Nine Months Ended | Nine Months Ended | Nine Months Ended | ||||||||||||||
| June 30, | June 30, | Proforma | ||||||||||||||
| 2015 | 2015 | Proforma | June 30, | |||||||||||||
| Historical | Historical | Adjustments | 2015 | |||||||||||||
| REVENUES | $ | 47,182,227 | $ | 19,532,586 | $ | - | $ | 66,714,813 | ||||||||
| COST AND EXPENSES: | ||||||||||||||||
| Forwarding expenses | 39,203,833 | 17,060,888 | - | 56,264,721 | ||||||||||||
| Selling, general and administrative | 7,020,382 | 2,455,038 | 63,595 | A | 9,539,015 | |||||||||||
| Depreciation and amortization | 238,135 | 49,776 | 71,496 | B | 359,407 | |||||||||||
| TOTAL COSTS AND EXPENSES | 46,462,350 | 19,565,701 | 135,091 | 66,163,142 | ||||||||||||
| INCOME (LOSS) FROM CONTINUING OPERATIONS | 719,877 | (33,114 | ) | (135,091 | ) | 551,672 | ||||||||||
| OTHER ITEMS: | ||||||||||||||||
| Interest expense, net of interest and dividend income | (373,612 | ) | (547 | ) | (121,875 | ) C | (496,034 | ) | ||||||||
| TOTAL OTHER ITEMS | (373,612 | ) | (547 | ) | (121,875 | ) | (496,034 | ) | ||||||||
| INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | 346,265 | (33,661 | ) | (256,966 | ) | 55,638 | ||||||||||
| Income taxes | 25,773 | - | - | 25,773 | ||||||||||||
| NET INCOME (LOSS) FROM CONTINUING OPERATIONS | 320,492 | (33,661 | ) | (256,966 | ) | 29,865 | ||||||||||
| Loss from discontinued operations | (128,129 | ) | - | - | (128,129 | ) | ||||||||||
| NET INCOME (LOSS) | 192,363 | (33,661 | ) | (256,966 | ) | (98,264 | ) | |||||||||
| Preferred stock dividends | 180,940 | - | - | 180,940 | ||||||||||||
| NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS | 11,423 | (33,661 | ) | (256,966 | ) | (279,204 | ) | |||||||||
See notes to the unaudited proforma consolidated financial statements
NOTES:
| A. | Acquisition costs. |
| B. | Estimated $71,496 of amortization expense for the nine months ended June 30, 2015. |
| C. | Estimated interest expense associated with the additional financing used to purchase Liberty at 6.5% |
| JANEL CORPORATION |
| PROFORMA STATEMENT OF OPERATIONS |
| (Unaudited) |
| JANEL | Liberty | Combined | ||||||||||||||
| Year Ended | Year Ended | Year Ended | ||||||||||||||
| September 30, | September 30, | Proforma | ||||||||||||||
| 2014 | 2014 | Proforma | September 30, | |||||||||||||
| Historical | Historical | Adjustments | 2014 | |||||||||||||
| REVENUES | $ | 47,940,095 | $ | 30,023,030 | $ | - | $ | 77,963,125 | ||||||||
| COST AND EXPENSES: | ||||||||||||||||
| Forwarding expenses | 41,390,621 | 26,298,815 | 67,689,436 | |||||||||||||
| Selling, general and administrative | 6,618,289 | 3,738,917 | 63,595 | A | 10,420,801 | |||||||||||
| Depreciation and amortization | 28,315 | - | 95,328 | B | 123,643 | |||||||||||
| TOTAL COSTS AND EXPENSES | 48,037,225 | 30,037,732 | 158,923 | 78,233,880 | ||||||||||||
| LOSS From Continuing Operations | (97,130 | ) | (14,702 | ) | (158,923 | ) | (270,755 | ) | ||||||||
| OTHER ITEMS: | ||||||||||||||||
| Interest expense, net of interest and dividend income | (144,239 | ) | (592 | ) | (162,500 | ) C | (307,331 | ) | ||||||||
| Other income or loss | - | 7,907 | - | 7,907 | ||||||||||||
| TOTAL OTHER ITEMS | (144,239 | ) | 7,315 | (162,500 | ) | (299,424 | ) | |||||||||
| LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | (241,369 | ) | (7,387 | ) | (321,423 | ) | (570,179 | ) | ||||||||
| Income taxes | 22,000 | - | - | 22,000 | ||||||||||||
| NET LOSS FROM CONTINUING OPERATIONS | (263,369 | ) | (7,387 | ) | (321,423 | ) | (592,179 | ) | ||||||||
| Loss from discontinued operations | (71,824 | ) | - | - | (71,824 | ) | ||||||||||
| NET LOSS | (335,193 | ) | (7,387 | ) | (321,423 | ) | (664,003 | ) | ||||||||
| Preferred stock dividends | 27,262 | - | - | 27,262 | ||||||||||||
| NET LOSS AVAILABLE TO COMMON SHAREHOLDERS | (362,455 | ) | (7,387 | ) | (321,423 | ) | (691,265 | ) | ||||||||
See notes to the unaudited proforma consolidated financial statements
NOTES:
| A. | Acquisition costs |
| B. | Estimated $95,328 of amortization expense for the fiscal year ended September 30, 2015. |
| C. | Estimated interest expense associated with the additional financing used to purchase Liberty at 6.5% |