Item 4.02 Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review.
On February 14, 2018, the board of directors of Janel Corporation (the "Company") concluded that the Company's previously issued financial statements included in its Annual Report on Form 10-K for the years ended September 30, 2017 and September 30, 2016 and Quarterly Reports on Form 10-Q for the quarters ended March 31, 2016, June 30, 2016, December 31, 2016, March 31, 2017 and June 30, 2017 should no longer be relied upon. In connection with changing auditors, the Company identified errors in such
financial statements with respect to reporting of goodwill and deferred tax liabilities relating to the Company's March 21, 2016 acquisition of Indco, Inc., a majority-owned subsidiary of the Company, and other income tax matters. Accordingly
, the Company deemed it necessary to adjust the previously issued financial statements for the prior periods and to record deferred tax liabilities associated with the book and tax bases differences of the intangible assets acquired in the Indco, Inc. acquisition. The Company has discussed these matters with its current independent registered public accounting firm and its prior independent registered public accounting firm. The Company's prior independent registered public accounting firm audited the Company's financial statements for the years ended September 30, 2017 and September 30, 2016.
The Company does not intend to amend any Quarterly Reports on Form 10-Q filed during the 2017 and 2016 fiscal years, as the impact of the accounting errors described in this report on the quarters ended March 31, 2016, June 30, 2016, December 31, 2016, March 31, 2017 and June 30, 2017 will be corrected in an amendment to the Company's Annual Report on Form 10-K for the years ended September 30, 2017 and September 30, 2016, which will include appropriate footnote disclosure of the errors and the corrected amounts for each such quarter.
These non-cash adjustments do not relate to the Company's operating performance and will have no impact on revenues, EBITA (a non-GAAP measure) or cash flows, including total and segment net revenue.
The Company is working toward filing its restated consolidated financial statements as soon as practicable. At this time, however, the Company cannot predict with certainty when the preparation of those prior period restated financial statements will be completed. The restated consolidated financial statements will reflect any additional accounting adjustments that arise as a result of the efforts described above.
The Company is committed to addressing the issues identified, and to re-establishing timely financial reporting, as soon as practicable.