Business Context and Reporting Period
Company: CALLAN JMB INC. (CJMB)
Filing Type: Form 10-Q (Unaudited)
Period Ended: March 31, 2026
Business Overview: A vertically integrated logistics and fulfillment company providing thermal management solutions for the life sciences industry. The company operates as a holding company for Coldchain Technology Services, LLC and Callan JMB Services (India) Private Limited.
Key Financial Metrics
| Metric | Q1 2026 | Q1 2025 |
|---|---|---|
| Revenue | $1,106,143 | $1,449,377 |
| Gross Profit | $427,235 | $615,940 |
| Gross Margin | 38.6% | 42.5% |
| Net Loss | $(3,215,054) | $(1,240,590) |
| Loss Per Share (Basic/Diluted) | $(0.59) | $(0.32) |
| Cash and Cash Equivalents | $1,415,566 | $5,219,929 |
| Stockholders' Equity | $1,599,533 | $6,807,581 |
| Derivative Liability | $709,445 | $0 |
Liquidity: Cash decreased by approximately $715,000 during the quarter. The company maintains an Equity Line of Credit (ELOC) with $23.45 million remaining availability as of March 31, 2026.
Material Changes vs. Prior Period
- Revenue Decline: Revenue decreased 24% year-over-year, primarily due to the non-renewal of a government contract and lower non-governmental customer revenue.
- Increased Operating Expenses: Selling, general, and administrative (SG&A) expenses rose 15% to $2.13 million. Increases were driven by executive compensation, new corporate office lease costs, professional fees, and stock-based compensation.
- Significant Non-Operating Losses: The company recorded a $1.51 million loss in "Other income (expenses)" driven by:
- $1.18 million in ELOC facility transaction expenses.
- $338,229 in changes to the fair value of a derivative liability associated with the ELOC.
- Equity Dilution: Issued approximately 769,000 shares of common stock pursuant to the ELOC facility and 75,000 RSUs to the Board of Directors.
Outlook, Risks, and Contingencies
- Nasdaq Delisting Risk: On April 7, 2026, the company received a deficiency letter from Nasdaq for failing to maintain the required $2.5 million in stockholders' equity (current equity is ~$1.6 million). The company must submit a compliance plan by May 22, 2026, or risk delisting.
- Going Concern: Management notes substantial doubt regarding the company's ability to continue as a going concern due to accumulated deficits and reliance on external financing, though they believe the ELOC and potential funding from the CEO alleviate this for the next 12 months.
- Internal Controls: Management concluded that disclosure controls and procedures were not effective as of March 31, 2026, citing issues with oversight and governance.
- Customer Concentration: One customer accounted for 67% of revenue in Q1 2026, and another 51% of accounts receivable.
Investor Verification Checklist
- Compliance Plan Status: Verify if the company has submitted a plan to Nasdaq to regain compliance with the $2.5 million equity requirement by the May 22, 2026 deadline.
- ELOC Terms: Review the specific terms of the ELOC facility, particularly the pricing mechanism (95% of lowest closing price) and the impact of the derivative liability on future earnings.
- Customer Renewals: Assess the status of the non-renewed government contract and the stability of the single customer representing 67% of revenue.
- Internal Control Remediation: Monitor progress on remediation of the material weakness in internal controls over financial reporting.
- Cash Burn Rate: Evaluate the sustainability of operations given the $1.68 million cash used in operating activities and the current cash balance of $1.4 million.