CJMB

Business Context and Reporting Period

Company: CALLAN JMB INC. (CJMB)
Filing Type: Form 10-K (Annual Report)
Period Ended: December 31, 2025
Business Overview: Callan JMB is a vertically integrated logistics and fulfillment company providing thermal management solutions to the life sciences industry. Services include emergency preparedness, specialty temperature-regulating packaging, and advanced monitoring (Sentry technology) for cryogenic and frozen shipments. The company operates as a holding company with its primary operating subsidiary, Coldchain Technology Services, LLC.

Key Financial Metrics

Liquidity: The company reported a net loss of approximately $8.0 million for 2025. Cash used in operating activities was $4.5 million, offset by $5.2 million provided by financing activities, primarily from the IPO and an Equity Line of Credit (ELOC). As of December 31, 2025, the company held $2.13 million in cash.

Material Changes vs. Prior Period

• Revenue Decline: Revenue decreased by 13% ($840,234) to $5.72 million. Management attributed this to reduced demand for emergency preparedness services from state and local governments and the temporary suspension of orders by a significant customer.
• Expense Surge: Selling, General, and Administrative (SG&A) expenses increased by 77% ($3.76 million) to $8.60 million. This was driven by professional fees for the IPO, increased IT support, and marketing/investor relations costs.
• Impairment Loss: The company recorded a non-cash impairment loss of $542,088 on property and equipment, as the carrying amount was deemed unrecoverable.
• Derivative Liability: A new derivative liability of $371,216 was recognized related to the ELOC Facility, resulting in a change in fair value expense of $603,093 and transaction expenses of $569,552.

Guidance, Outlook, Risks, and Contingencies

Going Concern: The filing explicitly states that substantial doubt exists regarding the company's ability to continue as a going concern due to recurring losses and an accumulated deficit. Continuation depends on shareholder support, equity/debt financing, and achieving profitability.

Liquidity Strategy: The company relies on an Equity Line of Credit (ELOC) with a $25 million aggregate capacity. As of March 31, 2026, $1.55 million had been raised under this facility, with $23.45 million remaining. Management plans to utilize this facility and potential additional funding from the CEO to support operations.

Key Risks:

• Customer Concentration: Three customers accounted for 79% of 2025 revenue (Customer 1: 58%, Customer 2: 10%, Customer 3: 11%). Loss of these customers would materially harm the business.
• Internal Controls: Management identified a material weakness in internal control over financial reporting related to the timeliness and consistency of oversight and governance.
• Legal Proceedings: A vendor dispute was settled in February 2025 for $240,800. Litigation with a former employee remains pending, though management does not believe material losses are probable.
• Related Party Transactions: Significant lease arrangements exist with related parties (Outlaw Run Ranch and Warehouse Asset Management), totaling approximately $297,000 in rent expense for 2025.

Investor Verification Checklist

• Going Concern Status: Verify the company's ability to access the remaining $23.45 million under the ELOC facility and the likelihood of future equity dilution.
• Customer Concentration: Assess the stability of the top customer (58% of revenue) and the terms of their agreements (expiring 2026 and 2029).
• Internal Control Remediation: Review the specific steps taken to remediate the material weakness in internal controls over financial reporting.
• Derivative Liability Impact: Monitor the fair value fluctuations of the ELOC derivative liability, which significantly impacted the 2025 net loss.
• Related Party Leases: Confirm the terms and market comparability of lease agreements with related parties (Outlaw Run Ranch and Warehouse Asset Management).