UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the quarterly period ended
or
Commission File No.
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) |
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(I.R.S. Employer Identification No.) |
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(Address of principal executive offices) |
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(Zip Code) |
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
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Trading Symbol(s) |
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Name of each exchange on which registered |
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(The NASDAQ Capital Market) |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. ☒
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one)
Large accelerated filer |
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Accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
As of November 12, 2021, there were
JANONE INC.
INDEX TO FORM 10-Q
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Item 1. |
3 |
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Unaudited Condensed Consolidated Balance Sheets as of October 2, 2021 and January 2, 2021 |
3 |
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4 |
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5 |
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6 |
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Notes to Unaudited Condensed Consolidated Financial Statements |
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Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
28 |
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Item 3. |
35 |
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Item 4. |
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Item 1. |
37 |
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Item 1A. |
37 |
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Item 2. |
37 |
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Item 3. |
37 |
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Item 4. |
37 |
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Item 5 |
37 |
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Item 6. |
39 |
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41 |
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2
PART I. FINANCIAL INFORMATION
ITEM 1. Condensed Consolidated Financial Statements
JANONE INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share amounts)
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October 2, |
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January 2, |
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(Unaudited) |
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Assets |
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Cash and cash equivalents |
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$ |
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$ |
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Trade and other receivables, net |
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Income taxes receivable |
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Inventories |
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Prepaid expenses and other current assets |
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Total current assets |
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Property and equipment, net |
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Right of use asset - operating leases |
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Intangible assets, net |
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Deposits and other assets |
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Total assets |
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$ |
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$ |
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Liabilities and Stockholders' Equity |
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Liabilities: |
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Accounts payable |
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$ |
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$ |
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Accrued liabilities - other |
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Accrued liability - California Sales Taxes |
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Lease obligation short term - operating leases |
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Short term debt |
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Current portion of note payable |
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Related party note |
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Total current liabilities |
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Lease obligation long term - operating leases |
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Note payable |
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Other noncurrent liabilities |
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Total liabilities |
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Stockholders' equity: |
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Preferred stock, series A-1 - par value $ |
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Common stock, par value $ |
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Additional paid in capital |
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Accumulated other comprehensive loss |
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( |
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( |
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Accumulated deficit |
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( |
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( |
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Total stockholders' equity |
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Total liabilities and stockholders' equity |
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$ |
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$ |
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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
3
JANONE INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(UNAUDITED)
(Dollars in thousands, except per share)
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For the Thirteen Weeks Ended |
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For the Thirty-Nine Weeks Ended |
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October 2, |
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September 26, |
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October 2, |
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September 26, |
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Revenues |
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$ |
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$ |
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$ |
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$ |
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Cost of revenues |
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Gross profit |
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Operating expenses: |
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Selling, general and administrative expenses |
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Operating loss |
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( |
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( |
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( |
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( |
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Other income (expense): |
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Interest expense, net |
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( |
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( |
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( |
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( |
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Gain on Payroll Protection Program loan forgiveness |
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Gain on settlement of vendor advance payments |
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Loss on litigation settlement |
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( |
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Other income, net |
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Total other income (expense), net |
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( |
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( |
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Loss from operations before benefit from income taxes |
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( |
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( |
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( |
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( |
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Income tax benefit (expense) |
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( |
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( |
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Net loss |
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$ |
( |
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$ |
( |
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$ |
( |
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$ |
( |
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Dividends declared - Series A-1 preferred stock |
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$ |
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$ |
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$ |
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$ |
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Dividends declared - Common stock |
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$ |
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$ |
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$ |
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$ |
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Loss per share: |
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Basic loss per share |
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$ |
( |
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$ |
( |
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$ |
( |
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$ |
( |
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Diluted loss per share |
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$ |
( |
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$ |
( |
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$ |
( |
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$ |
( |
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Weighted average common shares outstanding: |
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Basic |
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Diluted |
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Net loss |
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$ |
( |
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$ |
( |
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$ |
( |
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$ |
( |
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Other comprehensive loss, net of tax: |
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Effect of foreign currency translation adjustments |
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( |
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( |
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( |
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Total other comprehensive loss, net of tax |
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( |
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( |
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( |
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Comprehensive income loss |
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$ |
( |
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$ |
( |
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$ |
( |
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$ |
( |
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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
4
JANONE INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(In thousands)
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For the Thirty-Nine Weeks Ended |
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October 2, 2021 |
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September 26, 2020 |
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OPERATING ACTIVITIES: |
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Net loss |
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$ |
( |
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$ |
( |
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Adjustments to reconcile net loss to net cash used in operating activities: |
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Depreciation and amortization |
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Amortization of debt issuance costs |
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Stock based compensation expense |
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Noncash lease expense |
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Gain on Payroll Protection Program loan forgiveness |
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( |
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Gain on settlement of vendor advance payments |
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( |
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Change in deferred income taxes |
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( |
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Other |
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( |
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Changes in assets and liabilities: |
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Accounts receivable |
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( |
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Income taxes receivable |
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( |
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Prepaid expenses and other current assets |
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( |
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( |
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Inventories |
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Right of use assets |
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( |
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Lease liability |
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Accounts payable and accrued expenses |
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( |
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Net cash used in operating activities |
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( |
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( |
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INVESTING ACTIVITIES: |
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Purchases of property and equipment |
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( |
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( |
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Purchases of intangibles |
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( |
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( |
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Net cash used in investing activities |
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( |
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( |
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FINANCING ACTIVITIES: |
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Proceeds from issuance of short term debt |
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Payment on short term debt |
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( |
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( |
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Proceeds from equity financing, net |
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Proceeds from stock option exercise |
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Proceeds from note payable |
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Payment on note payable |
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( |
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Payment on related party note |
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( |
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Payments on short term notes payable |
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( |
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Net cash provided by financing activities |
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Effect of changes in exchange rate on cash and cash equivalents |
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( |
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( |
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INCREASE IN CASH AND CASH EQUIVALENTS |
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CASH AND CASH EQUIVALENTS, beginning of period |
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CASH AND CASH EQUIVALENTS, end of period |
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$ |
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$ |
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Supplemental cash flow disclosures: |
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Interest paid |
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$ |
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$ |
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Income taxes paid |
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Right of use asset - operating leases capitalized |
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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
5
JANONE INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(UNAUDITED)
(Dollars in thousands)
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Series A-1 Preferred |
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Common Stock |
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Additional |
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Accumulated |
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Accumulated |
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Total |
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Shares |
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Amount |
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Shares |
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Amount |
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Capital |
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Deficit |
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Deficit |
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Equity |
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Balance, January 2, 2021 |
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$ |
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$ |
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$ |
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$ |
( |
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$ |
( |
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$ |
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Shares issued |
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— |
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— |
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— |
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— |
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— |
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Share based compensation |
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— |
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— |
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— |
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— |
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— |
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— |
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Stock option exercise |
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— |
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— |
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— |
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— |
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— |
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Series A-1 preferred converted |
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( |
) |
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— |
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— |
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— |
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— |
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— |
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— |
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Other comprehensive loss |
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— |
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— |
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— |
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— |
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— |
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— |
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( |
) |
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( |
) |
Net loss |
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— |
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— |
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— |
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— |
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— |
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( |
) |
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— |
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( |
) |
Balance, October 2, 2021 |
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$ |
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$ |
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$ |
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$ |
( |
) |
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$ |
( |
) |
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$ |
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Series A-1 Preferred |
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Common Stock |
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Additional |
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Accumulated |
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Accumulated |
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Total |
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Shares |
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Amount |
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Shares |
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Amount |
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Capital |
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Deficit |
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Deficit |
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Equity |
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Balance, December 28, 2019 |
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$ |
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$ |
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$ |
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$ |
( |
) |
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$ |
( |
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$ |
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Shares cancelled |
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— |
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— |
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( |
) |
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— |
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— |
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— |
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— |
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— |
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Share based compensation |
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— |
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— |
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— |
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— |
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— |
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Effect of foreign currency translation adjustments |
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— |
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— |
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— |
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— |
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— |
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— |
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( |
) |
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( |
) |
Net loss |
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— |
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— |
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— |
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— |
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— |
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( |
) |
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— |
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( |
) |
Balance, September 26, 2020 |
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$ |
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$ |
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$ |
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$ |
( |
) |
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$ |
( |
) |
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$ |
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Series A-1 Preferred |
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Common Stock |
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Additional |
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Accumulated |
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Accumulated |
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Total |
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Shares |
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Amount |
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Shares |
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Amount |
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Capital |
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Deficit |
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Deficit |
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Equity |
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Balance, July 3, 2021 |
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$ |
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$ |
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$ |
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$ |
( |
) |
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$ |
( |
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$ |
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Share based compensation |
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— |
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— |
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— |
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— |
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— |
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— |
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Net loss |
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— |
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— |
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— |
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— |
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— |
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( |
) |
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— |
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