CJMB

Business Context and Reporting Period

Company: CALLAN JMB INC. (CJMB)
Filing Type: Form 10-Q (Quarterly Report)
Period Ended: June 30, 2026
Business Overview: A vertically integrated logistics and fulfillment company providing thermal management solutions to the life sciences industry. Operations include emergency preparedness services for government entities and specialty temperature-regulating packaging.
Listing Status: Nasdaq Capital Market (Symbol: CJMB). The company is a smaller reporting company and non-accelerated filer.

Key Financial Metrics

Material Changes vs. Prior Period

• Revenue Decline: Revenue decreased by 20% ($633,219) year-over-year, primarily due to reduced demand for emergency preparedness services from state and local governments.
• Increased Net Loss: Net loss increased by 68% to $4.45 million. This was driven by a $1.39 million increase in "Other expenses," largely attributed to the Equity Line of Credit (ELOC) facility.
• ELOC Impact: The company recognized $1.18 million in ELOC transaction expenses and a $217,388 loss on the change in fair value of the derivative liability associated with the ELOC facility.
• Operating Expenses: Selling, General, and Administrative (SG&A) expenses increased by 8% ($331,137), driven by higher legal fees ($274k), accounting fees ($153k), and salaries ($147k), partially offset by reduced marketing spend.
• Liquidity Reduction: Cash and cash equivalents dropped by approximately $1.27 million during the period, leaving the company with $860,273 as of June 30, 2026.

Guidance, Outlook, Risks, and Unusual Items

• Going Concern Warning: Management has raised substantial doubt about the company's ability to continue as a going concern within one year due to recurring losses, an accumulated deficit of $14.7 million, and negative operating cash flows. Continued operations depend on securing additional capital.
• Nasdaq Compliance Issues:
  • Stockholders' Equity: Received notice of non-compliance with the $2.5 million minimum stockholders' equity requirement (Rule 5550(b)(1)). A compliance plan has been submitted.
  • Minimum Bid Price: Received notice of non-compliance with the $1.00 minimum closing bid price requirement (Rule 5550(a)(2)). The company has until December 28, 2026, to regain compliance.
• Capital Resources: The company raised $915,000 net proceeds via its ELOC facility during the period. It also established a $5.0 million At-The-Market (ATM) offering program in May 2026, though no shares have been sold under this program as of June 30, 2026.
• Unusual Items: A $150,000 settlement with a former executive was fully offset by a $150,000 insurance recovery, resulting in no net impact on earnings.
• Internal Controls: Management concluded that disclosure controls and procedures were not effective as of June 30, 2026, citing a material weakness in oversight reviews and governance.

Investor Verification Checklist

• Cash Runway: Verify the sufficiency of the $860k cash balance against the $2.1M operating cash burn rate for the six-month period.
• Financing Availability: Assess the likelihood of securing additional equity or debt financing given the Nasdaq non-compliance notices and going concern warning.
• Customer Concentration: Review the dependency on a single customer representing 63% of revenue for the six months ended June 30, 2026.
• ELOC Terms: Analyze the dilution impact and fair value volatility of the $25M ELOC facility, which currently carries a $588k derivative liability.
• Nasdaq Compliance Plan: Monitor the status of the compliance plan for stockholders' equity and the timeline for regaining the $1.00 minimum bid price.