SUBSEQUENT EVENTS

On November 20, 2018, the Company and its wholly-owned subsidiaries, entered into the Limited Waiver, Joinder and Second Amendment (“Amendment No. 2”) to the Loan and Security Agreement, dated October 17, 2017 (as amended by the Limited Waiver, Joinder and First Amendment dated as of March 21, 2018), with Santander Bank, N.A. Pursuant to, and among other changes effected by, Amendment No. 2: (1) Honor WW, HWL and Global were added as new borrowers under the Loan Agreement; (2) Aves was released as a loan party obligor under the Loan Agreement; (3) the maximum revolving facility amount available was increased from $11,000 to $17,000 (limited to 85% of the borrowers’ eligible accounts receivable borrowing base and reserves); (4) the foreign account sublimit was increased from $2,000 to $2,500; (5) the letter of credit limit was increased from $500 to $1,000; (6) the definitions of “Debt Service Coverage Ratio”, “Debt Service Coverage Ratio (Borrower Group)” and “Loan Party” were restated; (7) the permitted acquisition debt basket was increased from $2,500 to $4,000; and (8) the permitted indebtedness basket was increased from $500 to $1,000.

On November 20, 2018, Janel Group, Inc., (“Group”), a wholly-owned subsidiary of Janel, entered into a Membership Interest Purchase Agreement (the “Agreement”) with Honor Worldwide Logistics LLC (“Honor”), Onor Group LLC, (“Onor”) and Biehl Logistics LLC, Onor and Biehl are hereinafter referred to as the “Members”. Pursuant to the Agreement, Janel Group will indirectly acquire Honor and Honor will become a direct wholly-owned subsidiary of Group and an indirect wholly-owned subsidiary of Janel.

Under the terms of the Agreement, the aggregate merger consideration is $2,282, subject to certain adjustments as set forth in the Agreement. At closing, the former Members were paid $1,826 in cash and a former Member was issued an aggregate amount of $456 in a subordinated promissory note.

In addition to the Honor acquisition, during the period subsequent to September 30, 2018 and through July 26, 2019, the Company completed two individually immaterial acquisitions for total cash consideration of $380. These acquisitions were completed primarily to expand our services and offerings and were related to both our Global Logistics Services Business and Manufacturing Business (Life Sciences). The fair value of the purchase price and the allocation thereof for both acquisitions have not yet been determined.

As of May 1, 2019, Santander had granted the Janel Group Borrowers a one-time waiver until July 31, 2019 for an event of default related to the delivery of the audited financial statements for the fiscal year ended September 30, 2018. Other than as specifically referenced above, the Janel Group Borrowers were in compliance with the covenants defined in the Santander Loan Agreement as of September 30, 2018.

Janel has determined that there were no other events or transactions occurring subsequent to September 30, 2018 that would have a material impact on Janel’s results of operations or financial condition as of September 30, 2018.