Callan JMB Inc.: Form 10-Q for the period ended Jun 30, 2025

The following discussion and analysis is intended as a review of significant factors affecting our financial condition and results of operations for the periods indicated. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and the accompanying notes thereto included elsewhere in this Quarterly Report on Form 10-Q. Unless the context requires otherwise, references in this Quarterly Report on Form 10-Q to “we,” “us,” and “our” refer to Callan JMB Inc.

Forward-Looking Statements

The information in this discussion contains forward-looking statements and information within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, which are subject to the “safe harbor” created by those sections. These forward-looking statements include, but are not limited to, statements concerning our strategy, future operations, future financial position, future revenues, projected costs, prospects and plans and objectives of management. The words “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “plans,” “projects,” “will,” “would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements that we make. These forward-looking statements involve risks and uncertainties that could cause our actual results to differ materially from those in the forward-looking statements, including, without limitation, the risks set forth in our filings with the SEC. The forward-looking statements are applicable only as of the date on which they are made, and we do not assume any obligation to update any forward-looking statements

Overview

Callan JMB is a vertically integrated logistics and fulfillment company which provides thermal management logistics solutions to the life sciences industry through a combination of proprietary packaging, information technology and specialized cold chain logistics knowhow. We provide a system that utilizes advanced predictive technology to revolutionize the supply chain by guaranteeing the safety, effectiveness, and potency of every product handled to ensure product integrity, and to provide immediate response in time-sensitive industries while ensuring environmental responsibility.

Strategy

Our strategy involves leveraging our core competitive strengths to develop and maintain ongoing relationships with a diversified group of customers while continuing to grow our service lines, ensuring that we can meet our customers’ changing needs. We strive to be recognized as the premier provider of logistics and fulfillment of a broad range of value-added services based upon the breadth of those services, quality, responsiveness, customer service, information technologies, safety, and cost effectiveness.

We view our solutions as disruptive to the “older technologies” of dry ice and liquid nitrogen, in that our solutions are comprehensive and combine our competencies in configurations that are customized to our client’s requirements. We provide comprehensive, reliable, economic alternatives to all existing logistics solutions and services utilized for frozen shipping in the life sciences industry (e.g., personalized medicine, cell therapies, stem cells, cell lines, vaccines, diagnostic materials, semen, eggs, embryos, cord blood, organs, bio-pharmaceuticals, infectious substances, and other commodities that require continuous exposure to cryogenic or frozen temperatures). As part of our services, we provide the ability to monitor, record and archive crucial information for each shipment that can be used for scientific and regulatory purposes.

Seasonality

Based on our industry and our historic trends, we expect our operations to vary seasonally. Typically, revenue will be highest in the third and fourth calendar quarters and lowest in the first and second calendar quarters. These seasonal variations result in fluctuations in waste volumes due to weather conditions and general economic activity. We also expect that our operating expenses may be higher during the winter months due to periodic adverse weather conditions that can slow the collection of waste, resulting in higher labor and operational costs.

Results of Operations

Three and Six Months Ended June 30, 2025, Compared to the Three and Six Months Ended June 30, 2024

The following table provides certain selected financial information for the periods presented:

(Unaudited)

(Unaudited)

Revenue

Revenue for the three and six months ended June 30, 2025, was $1,666,309 and $3,115,687 respectively as compared to $1,985,768 and $3,776,289 for the three and six months ended June 30, 2024, a decrease of $(319,459) and $(660,602), respectively. This decrease was due to the decrease in demand for our emergency preparedness services by certain states and local governments.

Cost of revenue

Cost of revenue for the three and six months ended June 30, 2025, was $1,022,439 and $1,858,724 respectively as compared to $1,023,552 and $2,096,490 for the three and six months ended June 30, 2024, respectively. The decrease in the comparative three month period is due to a $119,990 increase in storage fees offset by a $120,120 decrease in direct labor. The decrease in the comparative six month period is due to a $357,136 decrease in fees for service, a $99,337 decrease in labels, and a $48,930 decrease in freight forwarding offset by a $237,223 increase in storage fees.

Operating Expenses

Selling, General and Administrative Expenses

Our selling, general and administrative costs include personnel costs, consulting and professional fees, and other overhead expenses. Selling, general and administrative expenses for the three and six months ended June 30, 2025, were $2,046,537 and $3,901,878 respectively compared to $1,095,639 and $1,900,681 respectively for the three and six months ended June 30, 2024, an increase of $950,898 and $2,001,197 respectively. The Company’s consulting and professional fees increased by $111,584 and $420,007 for the three and six months ended June 30, 2025 respectively, compared to the same period in 2024 as a result of hiring professionals to support our capital raising process for our initial public offering. The Company’s information technology support increased by $5,726 and $11,305 for the three and six months ended June 30, 2025, compared to the same period in 2024 as the result of the purchase of additional equipment and hosting software. The Company’s marketing and advertising increased by $164,013 and $357,764 for the three and six months ended respectively as on June 30, 2025, compared to the same period in 2024 as a result of hiring a marketing firm that specializes in pharma-based businesses, and the hiring an investor relations firm for our IPO.

Other income (expense)

Other income (expense) for the three and six months ended June 30, 2025, was $2,042 and $4,188 respectively and for the three and six months ended June 30, 2024, it was $947 and $1,273 respectively, resulting in observed changes of $1,095 and $2,915 respectively. The increase for each period is a result of a decrease in interest expense.

Liquidity and Capital Resources

On July 24, 2025, CJMB, entered into a Purchase Agreement with a certain investor, whereby CJMB has the right, but not the obligation, to sell to the Investor, up to an aggregate of $25 million of shares of CJMB’s common stock, par value $0.001 per share, subject to the terms and conditions set forth therein.

The Purchase Agreement has a term ending on the earlier of (i) the first day of the month following the 18-month anniversary of the Commencement Date or (ii) the date the Investor has purchased the shares equal to the agreed investment amount. Upon effectiveness of the related registration statement, the Company will issue 15,000 shares of Common Stock to the Investor as Commitment Shares. During the term, CJMB may, at its discretion, deliver Regular Purchase Notices for $500,000 to $2,000,000 per notice. Each Regular Purchase is priced at 95% of the lowest daily VWAP during the applicable measurement period (or 80% if the Company’s stock is not trading on the Nasdaq Capital Market). In connection with each Regular Purchase, CMB will provide an estimate of the number of the shares deliverable, based on 90% of the prior day’s closing price.

Our principal liquidity requirements are for working capital to fund our operations and growth. To date, we have funded our liquidity requirements primarily through cash on hand, and cash flows from operations. As of June 30, 2025 and 2024, we had $4,224,151 and $1,847,721 of cash and cash equivalents, respectively.

(Unaudited)

22

Cash provided by (used in) operating activities

For the six months ended June 30, 2025, cash used in operating activities was $(2,124,970) compared to cash provided by operating activities of $275,524 during the six months ended June 30, 2024, a decrease of $(2,400,494). This decrease was primarily due to a decrease in net loss of $(2,641,986), a decrease in inventory of $(39,144), a decrease in other current assets of $(271,834), a decrease in deferred revenue of $(92,079), and offset by an increase in stock based compensation of $749,927.

Cash provided by (used in) investing activities

For the six months ended June 30, 2025, cash used in investing activities was $(447,506) compared to $(45,874) for the six months ended June 30, 2024, a decrease of $(401,632). The decrease is a result of leasehold improvements made to the new corporate office during 2025.

Cash provided by (used in) financing activities

During the six months ended June 30, 2025, cash provided by (used in) financing activities was $4,698,682 compared to ($3,537,549) during the six months ended June 30, 2024, an increase of $8,236,231. Our financing activities for the six months ended June 30, 2025 compared to June 30, 2024 included a decrease in related party loans of $35,742, an decrease in deferred offering costs of $65,000, and an increase in partners distributions of $3,382,254 and an increase in proceeds from IPO and overallotment, net of $4,680,013.

Off-Balance Sheet Arrangements

We have no off-balance sheet financing arrangements.

Under SEC rules and regulations, because we are considered to be a “smaller reporting company,” we are not required to provide the information required by this item in this report.

Evaluation of Disclosure Controls and Procedures

Our Chief Executive Officer and Chief Financial Officer conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of June 30, 2025, to ensure that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the SEC, including to ensure that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as of June 30, 2025, our disclosure controls and procedures were not effective at the reasonable assurance level in that:

• We do not have written documentation for some of our internal control policies and procedures. Written documentation of key internal controls over financial reporting is a requirement of Section 404 of the Sarbanes-Oxley Act. Management evaluated the impact of our failure to have written documentation for some of our internal controls and procedures on our assessment of our disclosure controls and procedures and has concluded that the control deficiency that resulted does not represent a material weakness.
• We do not have complete segregation of duties within accounting functions, which is a basic internal control. Due to our size and nature, segregation of all conflicting duties may not always be possible and may not be economically feasible. However, to the extent possible, the initiation of transactions, the custody of assets and the recording of transactions should be performed by separate individuals. Management evaluated the impact of our failure to have segregation of duties on our assessment of our disclosure controls and procedures and procedures and has concluded that the control deficiency that resulted does not represent a material weakness.

Our Chief Executive Officer and Chief Financial Officer do not expect that our disclosure controls or internal controls will prevent all errors and all fraud. Although our disclosure controls and procedures were designed to provide reasonable assurance of achieving their objectives and our Chief Executive Officer and Chief Financial Officer have determined that our disclosure controls and procedures are effective at doing so, a control system, no matter how well conceived and operated, can provide only reasonable, not absolute assurance that the objectives of the system are met. Further, the design of any control system is subject to resource constraints and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple errors or mistakes. Additionally, controls can be circumvented if there exists in an individual a desire to do so. There can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

(b) Changes in Internal Controls Over Financial Reporting

There were no changes in our internal controls over financial reporting that occurred during the last fiscal quarter covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and, as such, are not required to provide the information under this Item.