SUBORDINATED PROMISSORY NOTES - RELATED PARTY |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SUBORDINATED PROMISSORY NOTES - RELATED PARTY [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SUBORDINATED PROMISSORY NOTES - RELATED PARTY |
(A) ICT Subordinated Promissory Note
Aves
Labs, Inc., a wholly-owned subsidiary of the Company, is the obligor on a fixed 0.5% subordinated promissory note in the
amount of $1,850 (the “ICT Subordinated Promissory Note”) issued to the former owner of ImmunoChemistry Technologies, LLC
(“ICT”), in connection with a business combination whereby the Company acquired all of the membership interests of ICT. The ICT Subordinated Promissory Note is payable in sixteen scheduled quarterly installments of
principal and interest beginning March 4, 2021, matures on December 4, 2024, and may be prepaid, in whole or in part,
without premium or penalty.
The ICT Subordinated Promissory Note is subordinate to and junior in right of payment for principal interest premiums and other
amounts payable to Santander and First Merchants.
As of September 30, 2024, the amount outstanding under the ICT Subordinated Promissory Note was $55, all of which is included in the current portion of subordinated promissory notes.
As of September 30, 2023, the amount outstanding under the ICT Subordinated Promissory Note was $312, of which $288 is
included in the current portion of subordinated promissory notes and $24 is included in the long-term portion of subordinated
promissory notes.
(B) ELFS Subordinated Promissory Notes
Janel Group is the obligor on four
fixed 4% subordinated promissory notes totaling $6,000 in the aggregate (together, the “ELFS Subordinated Promissory Notes”), payable to certain former shareholders of ELFS, in connection with the Company’s
business combination whereby it acquired all the membership interest of ELFS and its related subsidiaries. All of the ELFS Subordinated Promissory Notes are guaranteed by the Company and are subordinate to and junior in right of
payment for principal, interest, premiums and other amounts payable to the Santander Facility and the First Merchants Credit Facility. The ELFS Subordinated Promissory Notes are payable in twelve equal consecutive quarterly installments of
principal together with accrued interest. Beginning October 15, 2021 and on the same day of the next eight consecutive
calendar quarters, thereafter payment of accrued interest and unpaid interest is due to the former shareholders. Beginning October 15, 2023, and on the same day of the next twelve consecutive calendar quarters thereafter payment of principal together with accrued interest and unpaid interest is due to the former shareholders. In June 2022, the
principal amount of the ELFS Subordinated Promissory Notes was adjusted to $5,100 due to a revised working capital adjustment
of $900.
On December 1, 2023, in connection with the Purchase Agreement Amendment among Janel Group and the ELFS Sellers, the Company extended the ELFS
Subordinated Promissory Notes maturity by two years and restored the working capital adjustment (as defined in the
Purchase Agreement) by $900 which increased the principal amount of the ELFS Subordinated Promissory Notes to $6,000. The Company evaluated the accounting treatment related to the amendment and determined the agreements are substantially
different and extinguished the original subordinated promissory notes and recorded the amended subordinated promissory notes at fair value of $4,654. As a result, the Company recorded a debt discount of approximately $921
and a $21 gain on extinguishment.
As of September 30, 2024, the amount outstanding under the ELFS Subordinated Promissory Notes was $3,918, of which $1,173 is included in the current
portion of subordinated promissory notes and $2,745 was included in the long-term portion of subordinated promissory
notes.
As of September 30, 2023, the amount outstanding under the ELFS Subordinated Promissory Notes was $5,100, of which $1,700 was
included in the current portion of subordinated promissory notes and $3,400 was included in the long-term portion of
subordinated promissory notes.
(C) Airschott Subordinated Promissory Note
Janel Group is the obligor on a floating rate (Prime Rate plus 2%) subordinated promissory note (the “Airschott Subordinated Promissory Note”) in the amount of $1,200 issued, to a former owner of Airschott, in connection with the business combination whereby Janel Group acquired Airschott. The note is payable in twelve consecutive quarterly
payments, which commenced in July 2024, of $100 together with accrued interest on the outstanding principal balance.
As of
September 30, 2024, the amount outstanding under the Airschott Subordinated Promissory Note was $1,100, of which $400 was included in the current portion of subordinated promissory notes and $700 was included in the long-term portion of subordinated promissory notes.
These obligations mature as follows (in thousands):
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