Company Quick10K Filing
Appliance Recycling Centers of America
Price4.26 EPS-4
Shares2 P/E-1
MCap8 P/FCF-2
Net Debt-1 EBIT-8
TEV8 TEV/EBIT-1
TTM 2019-09-28, in MM, except price, ratios
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8-K 2018-03-12
8-K 2018-03-05
8-K 2017-12-30

ARCI 10Q Quarterly Report

Part I. Financial Information
Item 1. Condensed Consolidated Financial Statements
Note 1: Background
Note 2: Summary of Significant Accounting Policies
Note 3: Trade and Other Receivables
Note 4: Inventory
Note 5: Prepaids and Other Current Assets
Note 6: Note Receivable
Note 7: Property and Equipment
Note 9: Deposits and Other Assets
Note 10: Leases
Note 11: Accrued Liabilities
Note 12: Accrued Liability - California Sales Tax
Note 13: Income Taxes
Note 14: Short Term Debt
Note 15: Commitments and Contingencies
Note 16: Shareholders' Equity
Note 17: Loss per Share
Note 18: Major Customers and Suppliers
Note 19: Defined Contribution Plan
Note 20: Segment Information
Note 21: Related Parties
Note 22: Subsequent Event
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II. Other Information
Item 1. Legal Proceedings.
Item 1A. Risk Factors.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Item 3. Defaults Upon Senior Securities.
Item 4. Mine Safety Disclosures.
Item 5. Other Information.
Item 5.03. Amendments To Articles of Incorporation or Bylaws; Change in Fiscal Year.
Item 5.07 Submission of Matters To A Vote of Security Holders.
Item 6. Exhibits.
EX-3.9 jan-ex39_224.htm
EX-4.2 jan-ex42_14.htm
EX-10.2 jan-ex102_13.htm
EX-10.3 jan-ex103_223.htm
EX-31.1 jan-ex311_10.htm
EX-31.2 jan-ex312_9.htm
EX-32.1 jan-ex321_8.htm
EX-32.2 jan-ex322_6.htm

Appliance Recycling Centers of America Earnings 2020-09-26

Balance SheetIncome StatementCash Flow
504030201002012201420172020
Assets, Equity
35217-7-21-352012201420172020
Rev, G Profit, Net Income
10.06.02.0-2.0-6.0-10.02012201420172020
Ops, Inv, Fin

10-Q 1 jan-10q_20200926.htm 10-Q jan-10q_20200926.htm

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended September 26, 2020

or

Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission File No. 0-19621

JANONE INC.

(Exact name of registrant as specified in its charter)

 

Nevada

(State or other jurisdiction of

incorporation or organization)

 

41-1454591

(I.R.S. Employer

Identification No.)

 

 

 

325 E. Warm Springs Road, Suite 102

Las Vegas, Nevada

(Address of principal executive offices)

 

89119

(Zip Code)

 

702-997-5968

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading Symbol(s)

 

Name of each exchange on which registered

Common Stock, $0.001 par value per share

 

JAN

 

The NASDAQ Stock Market LLC

(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.   Yes   No

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).   Yes   No

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

 

Accelerated filer

Non-accelerated filer

 

Smaller reporting company

Emerging growth company

 

 

 

 

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).   Yes   No

As of October 30, 2020, there were 1,829,982 outstanding shares of the registrant’s common stock, with a par value of $0.001.

 

 

 


JANONE INC.

 

INDEX TO FORM 10-Q

 

 

 

Page

PART I.  FINANCIAL INFORMATION

 

 

 

 

Item 1.

Condensed Consolidated Financial Statements

3

 

 

 

 

Unaudited Condensed Consolidated Balance Sheets as of September 26, 2020 and December 28, 2019

3

 

 

 

 

Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss for the 13 weeks and 39 weeks ended September 26, 2020 and September 28, 2019

4

 

 

 

 

Unaudited Condensed Consolidated Statements of Cash Flows for the 39 weeks ended September 26, 2020 and September 28, 2019

5

 

 

 

 

Unaudited Condensed Consolidated Statements of Stockholders’ Equity for the 13 weeks and 39 weeks ended September 26, 2020 and September 28, 2019

6

 

 

 

 

Notes to Unaudited Condensed Consolidated Financial Statements

7

 

 

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

26

 

 

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

33

 

 

 

Item 4.

Controls and Procedures

33

 

 

 

PART II.  OTHER INFORMATION

 

 

 

 

Item 1.

Legal Proceedings

34

 

 

 

Item 1A.

Risk Factors

34

 

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

34

 

 

 

Item 3.

Defaults Upon Senior Securities

34

 

 

 

Item 4.

Mine Safety Disclosures

34

 

 

 

Item 5

Other Information

35

 

 

 

Item 6.

Exhibits

36

 

 

 

SIGNATURES

37

 

2


 

PART I. FINANCIAL INFORMATION

 

ITEM 1. Condensed Consolidated Financial Statements

 

JANONE INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except per share amounts)

 

 

 

September 26,

2020

 

 

December 28,

2019

 

 

 

(Unaudited)

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

638

 

 

$

481

 

Trade and other receivables, net

 

 

5,019

 

 

 

6,578

 

Income taxes receivable

 

 

330

 

 

 

76

 

Inventories

 

 

1,071

 

 

 

1,348

 

Prepaid expenses and other current assets

 

 

931

 

 

 

356

 

Total current assets

 

 

7,989

 

 

 

8,839

 

Property and equipment, net

 

 

268

 

 

 

324

 

Right of use asset - operating leases

 

 

2,438

 

 

 

1,894

 

Intangible assets, net

 

 

14,950

 

 

 

17,705

 

Deposits and other assets

 

 

232

 

 

 

272

 

Total assets

 

$

25,877

 

 

$

29,034

 

Liabilities and Stockholders' Equity

 

 

Liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

2,253

 

 

$

4,365

 

Accrued liabilities - other

 

 

5,727

 

 

 

3,938

 

Accrued liability - California Sales Taxes

 

 

5,686

 

 

 

5,438

 

Lease obligation short term - operating leases

 

 

1,260

 

 

 

1,079

 

Short term debt

 

 

3,327

 

 

 

280

 

Related party note

 

 

1,000

 

 

 

2,473

 

Total current liabilities

 

 

19,253

 

 

 

17,573

 

Lease obligation long term - operating leases

 

 

1,350

 

 

 

850

 

Deferred income taxes, net

 

 

 

 

 

270

 

Total liabilities

 

 

20,603

 

 

 

18,693

 

Commitments and contingencies (Note 15)

 

 

 

 

 

 

 

 

Stockholders' equity:

 

 

 

 

 

 

 

 

Preferred stock, series A - par value $0.001 per share 2,000,000 authorized,

   259,729  shares issued and outstanding at September 26, 2020 and

   December 28, 2019, respectively

 

 

 

 

 

 

Common stock, par value $0.001 per share, 10,000,000 shares authorized,

   1,829,982 and 1,919,048 shares issued and outstanding at September 26, 2020

   and at December 28, 2019, respectively

 

 

2

 

 

 

2

 

Additional paid in capital

 

 

39,814

 

 

 

39,291

 

Accumulated other comprehensive loss

 

 

(588

)

 

 

(533

)

Accumulated deficit

 

 

(33,954

)

 

 

(28,419

)

Total stockholders' equity

 

 

5,274

 

 

 

10,341

 

Total liabilities and stockholders' equity

 

$

25,877

 

 

$

29,034

 

 

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)

 

 

 

For the Thirteen Weeks Ended

 

 

For the Thirty Nine Weeks Ended

 

 

 

September 26,

2020

 

 

September 28,

2019

 

 

September 26,

2020

 

 

September 28,

2019

 

Revenues

 

$

12,266

 

 

$

9,790

 

 

$

24,723

 

 

$

23,684

 

Cost of revenues

 

 

8,549

 

 

 

7,226

 

 

 

18,487

 

 

 

18,103

 

Gross profit

 

 

3,717

 

 

 

2,564

 

 

 

6,236

 

 

 

5,581

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

 

4,540

 

 

 

5,185

 

 

 

12,776

 

 

 

13,466

 

Operating loss

 

 

(823

)

 

 

(2,621

)

 

 

(6,540

)

 

 

(7,885

)

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

 

(88

)

 

 

(75

)

 

 

(255

)

 

 

(81

)

Other income, net

 

 

2

 

 

 

6

 

 

 

812

 

 

 

784

 

Total other income (expense), net

 

 

(86

)

 

 

(69

)

 

 

557

 

 

 

703

 

Loss from operations before benefit from income taxes

 

 

(909

)

 

 

(2,690

)

 

 

(5,983

)

 

 

(7,182

)

Income tax benefit

 

 

99

 

 

 

732

 

 

 

448

 

 

 

1,825

 

Net loss

 

$

(810

)

 

$

(1,958

)

 

$

(5,535

)

 

$

(5,357

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic loss per share

 

$

(0.43

)

 

$

(1.14

)

 

$

(2.98

)

 

$

(3.14

)

Diluted loss per share

 

$

(0.43

)

 

$

(1.14

)

 

$

(2.98

)

 

$

(3.14

)

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

1,871,321

 

 

 

1,721,547

 

 

 

1,860,270

 

 

 

1,703,559

 

Diluted

 

 

1,871,321

 

 

 

1,721,547

 

 

 

1,860,270

 

 

 

1,703,559

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(810

)

 

$

(1,958

)

 

$

(5,535

)

 

$

(5,357

)

Other comprehensive income (loss), net of tax:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Effect of foreign currency translation adjustments

 

 

(27

)

 

 

(14

)

 

 

(55

)

 

 

3

 

Total other comprehensive income (loss), net of tax

 

 

(27

)

 

 

(14

)

 

 

(55

)

 

 

3

 

Comprehensive loss

 

$

(837

)

 

$

(1,972

)

 

$

(5,590

)

 

$

(5,354

)

 

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)

 

 

 

For the Thirty Nine Weeks Ended

 

 

 

September 26, 2020

 

 

September 28, 2019

 

OPERATING ACTIVITIES:

 

 

 

 

 

 

 

 

Net loss

 

$

(5,535

)

 

$

(5,357

)

Adjustments to reconcile net loss to net cash used in operating

   activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

3,104

 

 

 

3,046

 

Amortization of debt issuance costs

 

 

27

 

 

 

111

 

Stock based compensation expense

 

 

523

 

 

 

447

 

Non cash lease expense

 

 

137

 

 

 

33

 

Change in deferred rent

 

 

 

 

 

(48

)

Change in deferred compensation

 

 

 

 

 

(148

)

Change in deferred income taxes

 

 

(270

)

 

 

(1,823

)

Other

 

 

40

 

 

 

376

 

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

1,561

 

 

 

(93

)

Income taxes receivable

 

 

(254

)

 

 

(47

)

Prepaid expenses and other current assets

 

 

(575

)

 

 

71

 

Inventories

 

 

277

 

 

 

(919

)

Accounts payable and accrued expenses

 

 

(77

)

 

 

708

 

Net cash used in operating activities

 

 

(1,042

)

 

 

(3,643

)

INVESTING ACTIVITIES:

 

 

 

 

 

 

 

 

Purchases of property and equipment

 

 

(12

)

 

 

(436

)

Purchases of intangibles

 

 

(281

)

 

 

 

Net payments received from ApplianceSmart note receivable

 

 

 

 

 

881

 

Net cash (used in) provided by investing activities

 

 

(293

)

 

 

445

 

FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

Proceeds from issuance of short term debt

 

 

3,469

 

 

 

 

Proceeds from issuance of long term debt obligations

 

 

 

 

 

471

 

Proceeds (payment) of related party note

 

 

(1,500

)

 

 

2,500

 

Payments on debt obligations

 

 

(422

)

 

 

(355

)

Net cash provided by financing activities

 

 

1,547

 

 

 

2,616

 

Effect of changes in exchange rate on cash and cash equivalents

 

 

(55

)

 

 

25

 

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

 

 

157

 

 

 

(557

)

CASH AND CASH EQUIVALENTS, beginning of period

 

 

481

 

 

 

1,195

 

CASH AND CASH EQUIVALENTS, end of period

 

$

638

 

 

$

638

 

Supplemental cash flow disclosures:

 

 

 

 

 

 

 

 

Interest paid

 

$

126

 

 

$

71

 

Income taxes paid

 

 

76

 

 

 

44

 

Right to use asset - operating leases capitalized

 

 

1,037

 

 

 

2,272

 

 

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)

 

 

 

 

 

Series A Preferred

 

 

Common stock

 

 

Additional

Paid in

 

 

Accumulated

Other

Comprehensive

 

 

Accumulated

 

 

Total

Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Deficit

 

 

Equity

 

Balance, June 27, 2020

 

 

259,729

 

 

$

 

 

 

1,871,321

 

 

$

2

 

 

$

39,802

 

 

$

(561

)

 

$

(33,144

)

 

$

6,099

 

Share based compensation

 

 

 

 

 

 

 

 

(41,339

)

 

 

 

 

 

12

 

 

 

 

 

 

 

 

 

12

 

Effect of foreign currency translation adjustments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(27

)

 

 

 

 

 

(27

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(810

)

 

 

(810

)

Balance, September 26, 2020

 

 

259,729

 

 

$

 

 

 

1,829,982

 

 

$

2

 

 

$

39,814

 

 

$

(588

)

 

$

(33,954

)

 

$

5,274

 

 

 

 

 

Series A Preferred

 

 

Common Stock

 

 

Additional

Paid in

 

 

Accumulated

Other

Comprehensive

 

 

Accumulated

 

 

Total

Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Deficit

 

 

Equity

 

Balance, June 29, 2019

 

 

259,729

 

 

$

 

 

 

1,694,565

 

 

$

2

 

 

$

38,660

 

 

$

(516

)

 

$

(19,917

)

 

$

18,229

 

Share based compensation

 

 

 

 

 

 

 

 

223,214

 

 

 

 

 

 

447

 

 

 

 

 

 

 

 

 

447

 

Effect of foreign currency translation adjustments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(14

)

 

 

 

 

 

(14

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,958

)

 

 

(1,958

)

Balance, September 28, 2019

 

 

259,729

 

 

$

 

 

 

1,917,779

 

 

$

2

 

 

$

39,107

 

 

$

(530

)

 

$

(21,875

)

 

$

16,704

 

 

 

 

 

Series A Preferred

 

 

Common Stock

 

 

Additional

Paid in

 

 

Accumulated

Other

Comprehensive

 

 

Accumulated

 

 

Total

Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Deficit

 

 

Equity

 

Balance, December 28, 2019

 

 

259,729

 

 

$

 

 

 

1,919,048

 

 

$

2

 

 

$

39,291

 

 

$

(533

)

 

$

(28,419

)

 

$

10,341

 

Shares cancelled

 

 

 

 

 

 

 

 

(122,257

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share based compensation

 

 

 

 

 

 

 

 

33,191

 

 

 

 

 

 

523

 

 

 

 

 

 

 

 

 

523

 

Effect of foreign currency translation adjustments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(55

)

 

 

 

 

 

(55

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(5,535

)

 

 

(5,535

)

Balance, September 26, 2020

 

 

259,729

 

 

$

 

 

 

1,829,982

 

 

$

2

 

 

$

39,814

 

 

$

(588

)

 

$

(33,954

)

 

$

5,274

 

 

 

 

 

Series A Preferred

 

 

Common Stock

 

 

Additional

Paid in

 

 

Accumulated

Other

Comprehensive

 

 

Accumulated

 

 

Total

Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Deficit

 

 

Equity

 

Balance, December 30, 2018

 

 

288,588

 

 

$

 

 

 

1,694,565

 

 

$

2

 

 

$

38,660

 

 

$

(533

)

 

$

(16,518

)

 

$

21,611

 

Shares cancelled

 

 

(28,859

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share based compensation

 

 

 

 

 

 

 

 

223,214

 

 

 

 

 

 

447

 

 

 

 

 

 

 

 

 

447

 

Effect of foreign currency translation adjustments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3

 

 

 

 

 

 

3

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(5,357

)

 

 

(5,357

)

Balance, September 28, 2019

 

 

259,729

 

 

$

 

 

 

1,917,779

 

 

$

2

 

 

$

39,107

 

 

$

(530

)

 

$

(21,875

)

 

$

16,704

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

6


 

Note 1: Background

The accompanying consolidated financial statements include the accounts of JanOne Inc., a Nevada corporation, and its subsidiaries (collectively the “Company” or “JanOne”). On September 10, 2019, Appliance Recycling Centers of America, Inc. changed its name to JanOne Inc.

 

The Company has three operating segments – Biotechnology, Recycling, and Technology.

During September 2019, JanOne, through its biotechnology segment, broadened its business perspectives to become a pharmaceutical company focused on finding treatments for conditions that cause severe pain and bringing to market drugs with non-addictive pain-relieving properties.

ARCA Recycling, Inc. (“ARCA Recycling”) provides turnkey recycling services for electric utility energy efficiency programs in the United States. ARCA Canada Inc. (“ARCA Canada”) provides turnkey recycling services for electric utility energy efficiency programs in Canada. Customer Connexx, LLC (“Connexx”) provides call center services for ARCA Recycling and ARCA Canada.

GeoTraq Inc. (“GeoTraq”) is engaged in the development, design and, ultimately, we expect the sale, of cellular transceiver modules, also known as Mobile IoT modules, and associated wireless services.

The Company reports on a 52- or 53-week fiscal year. The 2020 fiscal year (“2020”) will end on December 26, 2020, and the fiscal year (“2019”) ended on December 28, 2019, each fiscal year is 52 weeks in length.

Going concern

The Company currently faces a challenging competitive environment and is focused on improving its overall profitability, which includes managing expenses. The Company reported a net loss of $810 and $1,958 for the 13 weeks ended September 26, 2020 and September 28, 2019, respectively, and net loss of $5,535 and $5,357 for the 39 weeks ended September 26, 2020 and September 28, 2019, respectively. In addition, as of September 26, 2020, the Company had total current assets of $7,989 and total current liabilities $19,253 resulting in a net negative working capital of $11,264.

The Company has available cash balances and funds available under an accounts receivable factoring program with Prestige Capital Finance, LLC (“Prestige Capital”) to provide sufficient liquidity to fund the entity’s operations, the entity’s continued investments in center openings, and remodeling activities for at least the next twelve months. The Company expects to generate cash from operations for the remainder of fiscal year 2020 given its cost cutting measures in response to the revenue reductions resulting from the Coronavirus. However, depending on the U.S.’ continued restrictions related to the coronavirus public health crisis, the Company cannot be certain its efforts will suffice. The agreement with Prestige Capital allows the Company to get advance funding of 80% of an unpaid customer’s invoice amount within 2 days and the balance less a mutually agreed upon fee upon ultimate collection in cash of the invoice. The Company expects that it will be able to utilize the available funds under the accounts receivable factoring agreement to provide liquidity and to pursue acquisitions and other strategic transactions to expand and grow the business to enhance shareholder value. Management also regularly monitors capital market conditions to ensure no other conditions or events exist that may materially affect the Company’s financial conditions and liquidity and the Company may raise additional funds through borrowings or public or private sales of debt or equity securities, if necessary.

In March 2020, there was a global outbreak of COVID-19 (Coronavirus) that resulted in changes in global supply of certain products and an economic downturn.  Beginning in March 2020, the outbreak started to have a material adverse impact on our operations and financial condition. For example, several customers in our appliance recycling and appliance replacement business suspended our ability to pick up and or replace their customers’ appliances, resulting in decreased revenues for both recycling and replacement business. During April 2020, and in response to the impacts of the COVID-19 virus and public health crisis, in an effort to manage its financial position and further preserve financial flexibility and longevity, the Company temporarily closed its corporate office in Minnesota and c