**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**





**FORM
      10-K**





(Mark
      One)


x
              ANNUAL
                  REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE
                  ACT OF 1934For
                  the fiscal year ended: September 30, 2007o
              TRANSITION
                  REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE
                  ACT OF 1934For
                  the transition period from:


Commission
      File No. 333-60608





**JANEL
      WORLD TRADE, LTD.** ****


(Name
      of
      small business issuer in its charter)


Nevada
              86-1005291(State
                  of other jurisdiction of
              (IRS
                  Employer Identification No.)Incorporation
                  or organization)150-14
                  132ndAvenue, Jamaica, NY
              11434(Address
                  of principal executive offices)
              (Zip
                  Code)Issuer's
                  telephone number, including area code:
              (718)
                  527-3800


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




Name
                  of exchange onTitle
                  of each class
              
              which
                  registeredNone
              
              None




Securities
      registered pursuant to Section 12(g) of the Act: None




Indicate
      by check mark if the registrant is a well-known seasoned issuer, as defined
      in
      Rule 405 of the Securities Act. Yes o No x




Indicate
      by check mark if the registrant is not required to file reports pursuant to
      Section 13 or Section 15(d) of the Act. Yes o No x







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 (the “Act”)
      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 x No o




Indicate
      by check mark if disclosure of delinquent filers pursuant to Item 405 of
      Regulation S-K is not contained herein, and will not be contained, to the best
      of registrant's knowledge, in definitive proxy or information statements
      incorporated by reference in Part III of this Form 10-K or any amendment to
      this
      Form 10-K. x





Indicate
      by check mark whether the registrant is a large accelerated filer, an
      accelerated filer, or a non-accelerated filer. See definition of “large
      accelerated filer and accelerated filer in Rule 12b-2 of the Exchange
      Act.


Large
                  accelerated filer o
              Accelerated
                  filer o
              Non-Accelerated
                  filer x




State
      the
      aggregate market value of the voting and non-voting common equity held by
      non-affiliates computed by reference to the price at which the common equity
      was
      last sold, or the average bid and asked price of such common equity, as of
      the
      last business day of the registrant's most recently completed second fiscal
      quarter. $2,508,180 (last sale as of 3/30/07).





Indicate
      by checkmark whether the registrant is a shell company (as defined in Rule
      12b-2
      of the Act).  Yes o
      No x




(APPLICABLE
      ONLY TO CORPORATE REGISTRANTS)




State
      the
      number of shares outstanding of each of the issuer's class of common equity,
      as
      of the latest practicable date: 17,043,000




DOCUMENTS
      INCORPORATED BY REFERENCE




List
      hereunder the following documents if incorporated by reference and the Part
      of
      the Form 10-K into which the document is incorporated: (1) Any annual report
      to
      security holders; (2) Any proxy or information statement; and (3) Any prospectus
      filed pursuant to Rule 424(b) or (c) under the Securities Act of 1933. The
      listed documents should be clearly described for identification purposes (e.g.,
      annual report to securities holders for fiscal year ended December 31, 1980).




None.










**PART
      1**




**Item 1.**
            **Description
                of Business.**




**General
      Development of Business**




Janel
      World Trade, Ltd. has its executive offices at 150-14 132 nd Avenue,
      Jamaica, NY 11434, tel. (718) 527-3800, adjacent to the John F. Kennedy
      International Airport. The company and its predecessors have been in business
      since 1975 as a logistics services provider for importers and exporters
      worldwide. It is primarily engaged, through its wholly owned subsidiaries,
      in
      full-service cargo transportation logistics management, including freight
      forwarding – via air, ocean and land-based carriers – customs
      brokerage services, and warehousing and distribution services.




In
      addition to its traditional freight forwarding and customs brokerage activities,
      Janel offers various related, value-added logistics services, such as freight
      consolidation, insurance, a direct client computer access interface, logistics
      planning, landed-cost calculations, in-house computer tracking, product
      repackaging, online shipment tracking and electronic billing. The value-added
      services and systems are intended to help its customers streamline operations,
      reduce inventories, increase the speed and reliability of worldwide deliveries
      and improve the overall management and efficiency of the customer’s supply-chain
      activities.




Janel
      conducts its business through a network of company-operated facilities and
      independent agent relationships in most trading countries. During fiscal 2007
      (Janel’s fiscal year ends September 30), the company handled approximately
      28,000 individual import and export shipments, predominately originating or
      terminating in the United States, Europe and the Far East. Janel generated
      gross
      revenue of approximately $74.9 million in fiscal 2007, $77.2 million in fiscal
      2006 and $73.5 million in 2005. In fiscal 2007, approximately 70% of revenue
      related to import activities (unchanged from 2006), 5% to export, 20% to
      break-bulk and forwarding, and 5% to warehousing, distribution and trucking
      (unchanged from 2006). By market, the company’s revenue in fiscal 2007 derived
      from four principal industries: consumer wearing apparel/textiles -
      approximately 35% (unchanged from 2006); machines/machine parts - approximately
      10% (unchanged from 2006); household appliances - approximately 20% (unchanged
      from 2006); and sporting goods and accessories – approximately 10%
      (unchanged from 2006) **.**




**History**




Janel
      commenced business in 1975 as Janel International Forwarding Company, Inc.,
      a
      New York corporation. In 1976, the “Janel Group” was established in New York
      City as a company primarily focused on quality import customs brokerage and
      related transportation services. Janel’s initial customer base consisted of
      importers and exporters of machines and machine parts, principally through
      what
      was then West Germany. Shortly thereafter, the company began expanding its
      business scope into project transportation and high-value general cargo
      forwarding. In 1979, Janel expanded to the Midwest and West Coast, opening
      branches in Chicago and Los Angeles, respectively. Additional locations were
      opened in Atlanta (1995) and Miami (franchise agent) **** (1997).
      In 1980, C and N Corp. was organized as a Delaware corporation to be the
      corporate parent of the various Janel Group operating subsidiaries.




3




In
      1990,
      Janel agreed to the use of its name by a Bangkok, Thailand office to facilitate
      business operations during 1990 and 1992 in which it serviced a United States
      cellular communications carrier. In 1997, Janel designed and manufactured
      (through a subcontractor) electronic switching equipment shelters, which it
      sold
      to the carrier together with consulting services on transportation logistics
      and
      coordination for construction of cellular telephone sites in Thailand.




In
      2000,
      Janel opened the office in Shanghai, China, followed by the opening of the
      Hong
      Kong office in 2001 and the opening of an office in Shenzhen, China in 2003.




In
      June
      and July 2002, the corporate parent, C and N Corp., entered into and completed
      a
      reverse merger transaction with Wine Systems Design, Inc. in which it formally
      changed its state of incorporation from Delaware to Nevada, changed its
      corporate name to Janel World Trade, Ltd. and became a public company traded
      on
      the Nasdaq Bulletin Board under the symbol “JLWT.”




The
      company operates out of six leased locations in the United States: Jamaica
      (headquarters) and Lynbrook (accounting) in New York; Champaign, Illinois,
      Elk
      Grove Village (Chicago, Illinois); Forest Park (Atlanta, Georgia); and Inglewood
      (Los Angeles, California). Each Janel office is managed independently, with
      each
      manager having over 20 years experience with the company (except for Champaign,
      which was recently acquired). Janel Shanghai, Janel Hong Kong and Janel China
      (Shenzhen) operate as independently owned franchises within the company’s
      network. Janel’s President, Stephen P. Cesarski, and its Executive Vice
      President, James N. Jannello, each personally own a 10% profit interest in
      each
      of Janel Shanghai and Janel Hong Kong. Janel Miami (Florida) and Janel Bangkok
      (Thailand) operate only as franchises under the Janel name, but are not
      otherwise affiliated with the company’s corporate network. Mr. Jannello, Janel’s
      Executive Vice President, owns 50% of the Janel Miami office **.**




**Freight
      Forwarding and Related Services**




As
      a
      cargo freight forwarder, Janel procures shipments from its customers,
      consolidates shipments bound for a particular destination from a common place
      of
      origin, determines the routing over which the consolidated shipment will move,
      selects a carrier (air, ocean, land) serving that route on the basis of
      departure time, available cargo capacity and rate, and books the consolidated
      shipment for transportation with the selected carrier. In addition, Janel
      prepares all required shipping documents, delivers the shipment to the
      transporting carrier and, in many cases, and arranges clearance of the various
      components of the shipment through customs at the final destination. If so
      requested by its customers, Janel will also arrange for delivery of the
      individual components of the consolidated shipment from the arrival terminal
      to
      their intended consignees.




As
      a
      result of its consolidation of customer shipments and its ongoing volume
      relationships with numerous carriers, a freight forwarder is usually able to
      obtain lower rates from such carriers than its customers could obtain directly.
      Accordingly, a forwarder is generally able to offer its customers a lower rate
      than would otherwise be available directly to the customer, providing the
      forwarder with its profit opportunity as an intermediary between the carrier
      and
      end-customer. The forwarder’s gross profit is represented by the difference
      between the rate it is charged by the carrier and the rate it, in turn, charges
      its customer.




In
      fulfilling its intermediary role, the forwarder can draw upon the transportation
      assets and capabilities of any individual carrier or combination thereof
      comprised of airlines and/or air cargo carriers, ocean shipping carriers and
      land-based carriers, such as trucking companies. Janel solicits freight from
      its
      customers to fill containers, charging rates lower than the rates that would
      be
      offered directly to its customers for similar type shipments.




4




**Customs
      Brokerage Services**




As
      part
      of its integrated logistics services, Janel provides customs brokerage clearance
      services in the United States and in most foreign countries. These services
      typically entail the preparation and assembly of required documentation in
      many
      instances (Janel provides in-house translation services into Chinese, Spanish
      or
      Italian), the advancement of customs duties on behalf of importers, and the
      arrangement for the delivery of goods after the customs clearance process is
      completed. Additionally, other services may be provided such as the procurement
      and placement of surety bonds on behalf of importers and the arrangement of
      bonded warehouse services, which allow importers to store goods while deferring
      payment of customs duties until the goods are delivered.




Janel
      has
      over 30 years of experience clearing a wide range of goods through U.S. Customs,
      from automobiles to heavy machinery to textiles. The company currently has
      seven
      fully licensed customs house brokers on staff. Janel is fully certified with
      U.S. Customs for both ABI and AES transmissions. The company has established
      an
      active “correspondent Customs House Broker Network” of individuals specially
      chosen for their ability to service customers throughout those locations in
      the
      United States where Janel does not have its own branch office. In addition,
      the
      company regularly works with a group of proven independent attorneys, whose
      specialization in transportation, U.S. Customs law and classifications has
      resulted in substantial savings to customers.




**Other
      Logistics Services**




In
      addition to providing air, ocean and land freight forwarding and customs
      brokerage services, Janel provides its import and export customers with an
      array
      of fully integrated global logistics services. These logistics services include
      warehousing and distribution services, door-to-door freight pickup and delivery,
      cargo consolidation and de-consolidation, project cargo management, insurance,
      direct client computer access interface, logistics planning, landed-cost
      calculations, duty-drawback (recovery of previously paid duties when goods
      are
      re-exported), in-house computer tracking, product promotion, product packaging
      and repackaging utilizing Janel mobile packaging machinery, domestic pickup
      and
      forwarding, “hazmat” certifications for hazardous cargoes, letters of credit,
      language translation services, online shipment tracking and electronic
      billing.




In
      October 2007, Janel completed the acquisition of certain assets of Order
      Logistics, Inc. (“OLI”), a Delaware corporation, comprised of proprietary
      technology, intellectual property (including the brand name “Order Logistics”),
      office locations and equipment, and customer relationships, for use in the
      management and expansion of Janel’s international integrated logistics transport
      services business. The Web-based supply-chain technology acquired by Janel
      enables its customers to collaborate in the planning, execution, management
      and
      tracking of shipments, financial settlement, procurement and quality control
      activities on a worldwide basis. Janel filed a Form 8-K report regarding the
      asset acquisition transaction with the SEC on October 22, 2007.




5




**Information
      Systems**




Janel’s
      information system hardware consists of an IBM AS 400 system that is utilized
      by
      all of its offices in the United States. The company’s information technology
      capabilities also include DCS/HBU Logistics software, a T-1 online national
      network, recently acquired Web-based supply-chain technology, and a nationwide
      in-house e-mail network. These systems enable Janel to perform in-house computer
      tracking and to offer customers landed-cost calculations and online Internet
      information availability via the company’s websites relative to the tracking and
      tracking of customer shipments.




**Customers,
      Sales and Marketing**




While
      Janel’s customer base represents a multitude of diverse industry groups, the
      bulk of the company’s shipments are related to three principal markets: consumer
      wearing apparel and textiles, machines and machine parts, and household
      appliances. During fiscal 2007, the company shipped goods and provided logistics
      services for approximately 1,000 individual accounts. Janel markets its global
      cargo transportation and integrated logistics services worldwide. In markets
      where the company does not operate its own facilities, its direct sales efforts
      are supplemented by the referral of business through one or more of the
      company’s franchise or agent relationships. The company’s six largest accounts
      in fiscal 2007 were: H.H. Brown Shoe Company (which accounts for approximately
      19.9% of revenue), the Conair Corporation, Leisure Merchandise, Modell’s
      Sporting Goods, and The Selmer Company.




James
      N.
      Jannello and Stephen P. Cesarski are principally responsible for the marketing
      of the company's services. Each branch office manager is responsible for sales
      activities in their U.S. local market area. Janel attempts to cultivate strong,
      long-term relationships with its customers and referral sources through
      high-quality service and management.




**Employees**




As
      of
      September 30, 2007, Janel employed 69 people; 35 in its Jamaica, New York
      headquarters and Lynbrook, New York back office; 9 in Elk Grove Village,
      Illinois; 7 in Forest Park, Georgia; and 18 in Inglewood, California (2
      additional employees have recently been hired). The October 2007 asset
      acquisition has resulted in our adding 6 employees, based in Champaign, Ill.
      Approximately 52 of the company’s employees are engaged principally in
      operations, 11 in finance and administration and 6 in sales, marketing and
      customer service. Janel is not a party to any collective bargaining agreement
      and considers its relations with its employees to be good.




To
      retain
      the services of highly qualified, experienced and motivated employees, Janel
      management emphasizes an incentive compensation program and adopted a stock
      option plan in December 2002.




**Competition**




Competition
      within the freight forwarding industry is intense, characterized by low economic
      barriers to entry resulting in a large number of highly fragmented participants
      around the world. Janel competes for customers on the basis of its services
      and
      capabilities against other providers ranging from multinational, multi-billion
      dollar firms with hundreds of offices worldwide to regional and local freight
      forwarders to “mom-and-pop” businesses with only one or a few
      customers.




6




**Currency
      Risks**




The
      nature of Janel’s operations requires it to deal with currencies other than the
      U.S. Dollar. This results in the company being exposed to the inherent risks
      of
      international currency markets and governmental interference. A number of
      countries where Janel maintains offices or agent relationships have currency
      control regulations that influence its ability to hedge foreign currency
      exposure. The company tries to compensate for these exposures by accelerating
      international currency settlements among those offices or agents.




**Seasonality**




Historically,
      Janel’s quarterly operating results have been subject to seasonal trends. The
      fiscal first quarter has traditionally been the weakest and the fiscal third
      and
      fourth quarters have traditionally been the strongest. This pattern has been
      the
      result of, or influenced by, numerous factors including climate, national
      holidays, consumer demand, economic conditions and other similar and subtle
      forces. This historical seasonality has also been influenced by the growth
      and
      diversification of Janel’s international network and service offerings. The
      company cannot accurately forecast many of these factors, nor can it estimate
      the relative impact of any particular factor and, as a result, there is no
      assurance that historical patterns will continue in the future.




A
      significant portion of Janel’s revenues are derived from customers in industries
      with shipping patterns closely tied to consumer demand and from customers with
      shipping patterns dependent upon just-in-time production schedules. Therefore,
      the timing of Janel’s revenues are, to a large degree, affected by factors
      beyond the company’s control, such as shifting consumer demand for retail goods
      and manufacturing production delays. Many of Janel’s customers may ship a
      significant portion of their goods at or near the end of a quarter and the
      company may not learn of a resulting shortfall in revenue until late in a
      quarter.




**Environmental
      Issues**




In
      the
      United States, Janel is subject to federal, state and local provisions
      regulating the discharge of materials into the environment or otherwise for
      the
      protection of the environment. Similar laws apply in many foreign jurisdictions
      in which Janel operates. Although current operations have not been significantly
      affected by compliance with these environmental laws, governments are becoming
      increasingly sensitive to environmental issues and the company cannot predict
      what impact future environmental regulations may have on its business. Janel
      does not anticipate making any material capital expenditures for environmental
      control purposes during the remainder of the current or succeeding fiscal
      years.




**Regulation**




With
      respect to Janel’s activities in the air transportation industry in the United
      States, it is subject to regulation by the Department of Transportation as
      an
      indirect air carrier. The company’s overseas offices and agents are licensed as
      freight forwarders in their respective countries of operation. Janel is licensed
      in each of its offices as a freight forwarder by the International Air Transport
      Association. IATA is a voluntary association of airlines which prescribes
      certain operating procedures for freight forwarders acting as agents of its
      members. The majority of the company’s freight forwarding businesses is
      conducted with airlines that are IATA members.




Janel
      is
      licensed as a customs broker by the Department of Homeland Security Customs
      and
      Border Service. All U.S. customs brokers are required to maintain prescribed
      records and are subject to periodic audits by the Customs Service. In other
      jurisdictions in which Janel performs clearance services, it is licensed by
      the
      appropriate governmental authority.




7




Janel
      is
      registered as an Ocean Transportation Intermediary and licensed as a NVOCC
      carrier (non-vessel operating common carrier) by the Federal Maritime
      Commission. The FMC has established certain qualifications for shipping agents,
      including certain surety bonding requirements.




Janel
      does not believe that current U.S. and foreign governmental regulations impose
      significant economic restraint on its business operations.




**Cargo
      Liability**




When
      acting as an airfreight consolidator, Janel assumes a carrier’s liability for
      lost or damaged shipments. This legal liability is typically limited by contract
      to the lower of the transaction value or the released value ($9.07 per pound
      unless the customer declares a higher value and pays a surcharge), excepted
      for
      loss or damages caused by willful misconduct in the absence of an appropriate
      airway bill. The airline that the company utilizes to make the actual shipment
      is generally liable to Janel in the same manner and to the same extent. When
      acting solely as the agent of an airline or shipper, Janel does not assume
      any
      contractual liability for loss or damage to shipments tendered to the
      airline.




When
      acting as an ocean freight consolidator, Janel assumes a carrier’s liability for
      lost or damaged shipments. This liability is strictly limited by contract to
      the
      lower of a transaction value or the released value ($500 for package or
      customary freight unit unless the customer declares a higher value and pays
      a
      surcharge). The steamship line which Janel utilizes to make the actual shipment
      is generally liable to the company in the same manner and to the same extent.
      In
      its ocean freight forwarding and customs clearance operations, Janel does not
      assume cargo liability.




When
      providing warehouse and distribution services, Janel limits its legal liability
      by contract to an amount generally equal to the lower of fair value or $.50
      per
      pound with a maximum of $50 per “lot,” defined as the smallest unit that the
      warehouse is required to track. Upon payment of a surcharge for warehouse and
      distribution services, Janel would assume additional liability.




The
      company maintains marine cargo insurance covering claims for losses attributable
      to missing or damaged shipments for which it is legally liable. Janel also
      maintains insurance coverage for the property of others stored in company
      warehouse facilities.




**Item 1A.**
            **Risk
                Factors**




**1.
      We May Not Be Successful in Growing Either Internally or Through
      Acquisitions.**




Our
      growth strategy primarily focuses on internal growth in domestic and
      international freight forwarding, local pick up and delivery, customs brokerage
      and acquisitions. Our ability to grow will depend on a number of factors,
      including:




-
      existing and emerging competition;




-
      ability
      to operate profitably in the face of competitive pressures;




-
      the
      recruitment, training and retention of operating and management
      employees;




8




-
      the
      strength of demand for our services;




-
      the
      availability of capital to support our growth; and




-
      the
      ability to identify, negotiate and fund acquisitions when appropriate.




**2.
      Acquisitions Involve Risks, Including Those Relating to:**




-
      the
      integration of acquired businesses, including different information
      systems;




-
      the
      retention of prior levels of business;




-
      the
      retention of employees;




-
      the
      diversion of management attention;




-
      the
      write-offs resulting from impairment of acquired intangible assets;
      and




-
      unexpected liabilities.




We
      cannot
      assure that we will be successful in implementing any of our business strategies
      or plans for future growth.




**3.
      Events Affecting the Volume of International Trade and International Operations
      Could Adversely Affect Our International Operations.**




Our
      international operations are directly related to and dependent on the volume
      of
      international trade, particularly trade between the United States and foreign
      nations. This trade, as well as our international operations, are influenced
      by
      many factors, including:




-
      economic and political conditions in the United States and abroad;




-
      major
      work stoppages, such as the 2002 West Coast work stoppage;




-
      exchange controls, currency conversion and fluctuations;




-
      war,
      other armed conflicts and terrorism; and




-
      United
      States and foreign laws relating to tariffs, trade restrictions, foreign
      investment and taxation.




Trade-related
      events beyond our control, such as a failure of various nations to reach or
      adopt international trade agreements or an increase in bilateral or multilateral
      trade restrictions, could have a material adverse effect on our international
      operations. Our operations also depend on the availability of independent
      carriers that provide cargo space for international operations.




**4.
      Our Business Has Been and Could Continue to Be Adversely Affected by Negative
      Conditions in the United States Economy or the Industries of Our Principal
      Customers.**




Demand
      for our services had been adversely affected by negative conditions in the
      United States economy or the industries of our customers. A substantial number
      of our principal customers are in the household products, garments, industrial
      equipment, telecommunications and related industries, and their business had
      been adversely affected, particularly during the 2001-2002 period. These
      customers collectively account for a substantial percentage of our revenue.
      Adverse conditions or worsening conditions in the industries of our customers
      could cause us to lose a significant customer or experience a decrease in the
      shipment volume and business levels of our customers. Either of these events
      could negatively affect our financial results. Adverse economic conditions
      outside the United States can also have an adverse effect on our customers
      and
      our business. We expect that demand for our services, and consequently our
      results of operations, will be sensitive to domestic and global economic
      conditions and other factors beyond our control.




9




**5.
      The Terrorist Attacks on September 11, 2001, and their Aftermath, Have Created
      Economic, Political and Regulatory Uncertainties, Some of Which May Materially
      Harm Our Business and Prospects and Our Ability to Conduct Business in the
      Ordinary Course.**




The
      terrorist attacks that took place in the United States on September 11, 2001,
      have adversely affected many businesses, including our business. The national
      and global responses to these terrorist attacks, which are varied and
      unpredictable, may materially adversely affect us in ways we cannot currently
      predict. Some of the possible future effects include reduced business activity
      by our customers, increased shipping costs, changes in security measures or
      regulatory requirements for air and other travel and reductions in available
      commercial flights that may make it more difficult for us to arrange for the
      transport of our customers' freight and increased credit and business risk
      for
      customers in industries that were severely affected by the attacks.




**6.
      Our Ability to Serve Our Customers Depends on the Availability of Cargo Space
      from Third Parties.**




Our
      ability to serve our customers depends on the availability of air and sea cargo
      space, including space on passenger and cargo airlines and ocean carriers that
      service the transportation lanes that we use. Shortages of cargo space are
      most
      likely to develop around holidays and in especially heavy transportation lanes.
      In addition, available cargo space could be reduced as a result of decreases
      in
      the number of passenger airlines or ocean carriers serving particular shipment
      lanes at particular times. This could occur as a result of economic conditions,
      transportation strikes, regulatory changes and other factors beyond our control.
      Our future operating results could be adversely affected by significant
      shortages of suitable cargo space and associated increases in rates charged
      by
      passenger airlines or ocean carriers for cargo space.




**7.
      We May Lose Business to Competitors.**




Competition
      within the freight industry is intense. We compete in North America primarily
      with fully integrated carriers, including much larger and well-financed national
      companies and smaller freight forwarders. Internationally, we compete primarily
      with the major European-based freight forwarders. We expect to encounter
      continued competition from those forwarders that have a predominantly
      international focus and have established international networks, including
      those
      based in the United States and Europe. We also expect to continue to encounter
      competition from other forwarders with nationwide networks, regional and local
      forwarders, passenger and cargo air carriers, trucking companies, cargo sales
      agents and brokers, and carriers and associations of shippers organized for
      the
      purpose of consolidating their members' shipments to obtain lower freight rates
      from carriers. As a customs broker and ocean freight forwarder, we encounter
      strong competition in every port in which we do business, often competing with
      large domestic and foreign firms as well as local and regional firms. Our
      inability to compete successfully in our industry could cause us to lose
      customers or lower the volume of our shipments.




10




**8.
      Our Success Depends on the Efforts of Our Founders and Other Key Managers and
      Personnel.**




Our
      founder, James N. Jannello, continues to serve as Executive Vice President
      and
      Chief Executive Officer, and Stephen P. Cesarski continues to serve as President
      and Chief Operating Officer. We believe that our success is highly dependent
      on
      the continuing efforts of Mr. Jannello and the other executive officers and
      key
      employees, as well as our ability to attract and retain other skilled managers
      and personnel. None of our officers or key employees are subject to employment
      contracts. The loss of the services of any of our key personnel could have
      a
      material adverse effect on us.




**9.
      Janel’s Officers and Directors Control the Company.**




The
      officers and directors of the company control the vote of approximately 71%
      of
      the outstanding shares of common stock. The company's stock option plan provides
      1,600,000 shares of common stock regarding which options may be granted to
      key
      employees of the company. As a result, the officers and directors of the company
      control the election of the company's directors and will have the ability to
      control the affairs of the company. Furthermore, they will, by virtue of their
      control of a large majority of the voting shares, have controlling influence
      over, among other things, the ability to amend the company's Certificate of
      Incorporation and By-Laws or effect or preclude fundamental corporate
      transactions involving the company, including the acceptance or rejection of
      any
      proposals relating to a merger of the company or an acquisition of the company
      by another entity.




**10.
      Failure to Comply with Governmental Permit and Licensing Requirements Could
      Result in Fines or Revocation of Our Operating Authorities, and Changes in
      These
      Requirements Could Adversely Affect Us.**




Our
      operations are subject to various state, local, federal and foreign regulations
      that in many instances require permits and licenses. Our failure to maintain
      required permits or licenses, or to comply with applicable regulations, could
      result in substantial fines or revocation of our operating authorities.
      Moreover, government deregulation efforts, "modernization" of the regulations
      governing customs clearance and changes in the international trade and tariff
      environment could require material expenditures or otherwise adversely affect
      us.




**11.
      Our Stock Price Is Subject to Volatility.**




Our
      common stock trades on the OTC Bulletin Board under the symbol "JLWT." The
      market price of our common stock has been subject to significant fluctuations.
      Such fluctuations, as well as economic conditions generally, may adversely
      affect the market price of our securities.




**12.
      We Have No Assurance of a Continued Public Trading Market.**




Janel’s
      common stock is quoted in the over-the-counter market on the OTC Bulletin Board
      and is subject to the low-priced security or so-called "penny stock" rules
      that
      impose additional sales practice requirements on broker-dealers who sell such
      securities. For any transaction involving a penny stock, the rules require,
      among other things, the delivery, prior to the transaction, of a disclosure
      schedule required by the SEC relating to the penny stock market. The
      broker-dealer also must disclose the commissions payable to both the
      broker-dealer and the registered representative and current quotations for
      the
      securities. Finally, monthly statements must be sent disclosing recent price
      information for the penny stocks held in the customer's account. As a result,
      characterization as a “penny stock” can adversely affect the market liquidity
      for the securities.




11




**13.
      We Have No History of Paying Dividends.**




Janel
      has
      not paid cash dividends on our common stock. We currently anticipate that we
      will retain all future earnings for use in our business and do not anticipate
      paying any cash dividends in the foreseeable future.




**Item
      1B. Unresolved Staff Comments.**




None.




**Item 2.**
              **Properties.**




Janel
      leases all of its office facilities. The executive offices in Jamaica, New
      York
      consist of approximately **** 5,000
      square feet **** of
      office
      space adjoined by 9,000 square feet of warehouse space, all subject to a lease
      with a term ending January 31, 2010, and an annual base rent of $145,500. Its
      administrative office in Lynbrook, New York is approximately 1,459 square feet
      and is occupied under a lease which is being renewed to expire February 28,
      2013, with an annual base rent of $38,381.74 for 2007, which increases at the
      rate of 3% per year of the lease. Janel’s Elk Grove Illinois office occupies
      approximately 2,063 square feet with an additional 800 square feet of warehouse
      space under a lease which expires November 30, 2009, with an annual rent of
      $40,536. The Champaign, Illinois office we obtained in the October 2007 asset
      acquisition has approximately 2,400 square feet subject to a lease ending August
      31, 2008 (renewable for 3 more years), with an annual base rent of $34,968.
      Janel’s Georgia location occupies approximately 3,000 square feet of office and
      warehouse space, under a lease which expires in August 31, 2009 with an annual
      rent of $30,066 which increases to $30,968 on September 1, 2008. Janel’s Los
      Angeles office occupies approximately 3,000 square feet of office under a lease
      which expires in June 2012 with an annual rent of $72,000 through December
      31,
      2008, with annual increases based upon the CPI with a limit of up to 4.5% per
      year. Certain of the leases also provide for annual increases based upon
      increases in taxes or service charges.


**Item 3.**
              **Legal
                  Proceedings.**


Janel
      is
      occasionally subject to claims and lawsuits which typically arise in the normal
      course of business. While the outcome of these claims cannot be predicted with
      certainty, management does not believe that the outcome of any of these legal
      matters will have a material adverse effect on the company's financial position
      or results of operations.




Subsequent
      to the October 2007 acquisition of certain assets of Order Logistics, Inc.
      (“OLI”), a Delaware corporation, consisting principally of proprietary
      technology, office locations and personnel, and customer relationships, Janel
      learned that immediately prior to the closing of the acquisition, OLI had
      entered into an undisclosed agreement with a third party (the “Settlement
      Agreement”) which permitted that party to use OLI proprietary technology and
      customer relationships being purchased by Janel, and to solicit OLI employees
      in
      its South Carolina office. Janel believes that OLI’s failure to disclose the
      Settlement Agreement prior to the closing of the asset acquisition was a
      material violation of the OLI covenants, representations and warrantees set
      forth in the October 18, 2007 Asset Purchase Agreement which has damaged the
      value of the assets acquired by Janel. The company is in discussions to obtain
      appropriate for the damage, and is considering the initiation of litigation
      against OLI and its president to obtain an appropriate award of
      damages.




12




**Item 4.**
              **Submission
                  of Matters to a Vote of Security
                  Holders.**


There
      was
      no submission of matters to a vote of security holders during the company’s
      fiscal year ended September 30, 2007, except for the re-election of the board
      of
      directors by written consent of a majority of the company’s shareholders in July
      2007.





**PART
      II**


**Item 5.**
              **Market
                  for Registrant’s Common Equity and Related Stockholder Matters, and Issuer
                  Purchases of Equity Security
                  Securities.**


**(b)**  The
      company's common stock is quoted on the OTC Bulletin Board. The following table
      sets forth the range of the high and low bid prices for the company's common
      stock as reported on the OTC Bulletin Board for the periods indicated.
      Quotations do not necessarily represent actual transactions and do not reflect
      related mark-ups, mark-downs or commissions:


Fiscal
                  2007
              
              High Bid
              
              Low BidFirst
                  Quarter
              
              $
              .69
              
              $
              .35Second
                  Quarter
              
              $
              .71
              
              $
              .43Third
                  Quarter
              
              $
              .53
              
              $
              .42Fourth
                  Quarter
              
              $
              .50
              
              $
              .40




Fiscal
                  2006
              
              High Bid
              
              Low BidFirst
                  Quarter
              
              $
              1.12
              
              $
              0.61Second
                  Quarter
              
              $
              1.30
              
              $
              0.87Third
                  Quarter
              
              $
              1.20
              
              $
              0.65Fourth
                  Quarter
              
              $
              0.80
              
              $
              0.41


At
      January 8, 2008, the company had 45 holders of record and approximately 550
      beneficial holders of its shares of common stock. On January 11, 2007, the
      last
      sale price of the shares of common stock as reported by the OTC Bulletin Board
      was $1.32 per share.




13






**ISSUER
                PURCHASES OF EQUITY SECURITIES****Period**
            
            **(a)
                TotalNumber ofShares
                (orUnits)Purchased**
            
            **(b)
                AveragePrice Paidper Share(or Unit)**
            
            **(c)
                Total Numberof Shares (orUnits) Purchasedas Part
                ofPubliclyAnnounced Plansor Programs**
            
            **(d)
                Maximum Number(or ApproximateDollar Value) of Shares(or Units)
                that May YetBe Purchased Underthe Plans or
                Programs**Month
                #1 (identify beginning and ending dates)
            
            7-1-07/7-31-07
              -0-
            
            -0-
            
            -0-
            
            183,000Month
                #2 (identify beginning and ending dates)
            
            8-1-07/8-31-07
              20,000
            
            .446
            
            20,000
            
            163,000Month
                #3 (identify beginning and ending dates)
            
            9-1-07/9-30-07
              -0-
            
            -0-
            
            -0-
            
            163,000Total
            
            20,000
            
            .446
            
            20,000
            
            163,000




14




**Item
              6.**
            **Selected
                Financial Data.**




**Year
      Ended September 30,**




**2007**
            
            **2006**
            
            **2005**
            
            **2004**
            
            **2003**Freight
                Forwarding Revenues
            
            $
            74,947,442
            
            $
            77,220,070
            
            $
            73,484,334
            
            $
            69,981,639
            
            $
            56,916,276Net
                Income
            
            $
            322,979
            
            $
            56,995
            
            $
            430,019
            
            $
            264,355
            
            $
            196,787Net
                Income per common share
            
            $
            0.0184
            
            $
            0.0034
            
            $
            0.02553
            
            $
            0.0157
            
            $
            0.0117Total
                Assets
            
            $
            8,317,501
            
            $
            6,743,091
            
            $
            6,731,129
            
            $
            7,030,489
            
            $
            5,798,260Long-Term
                Obligations
            
            $
            81,118
            
            $
            84,905
            
            $
            92,140
            
            $
            100,530
            
            $
            78,568Cash
                Dividends Declaredper
                common share
            
            
            N/A
            
            
            N/A
            
            
            N/A
            
            
            N/A
            
            
            N/A




**Item
                7.**
            
            **Management’s
                Discussion and Analysis of Financial Condition and Results of
                Operations.**




**Forward-Looking
      Statements**




The
      statements contained in all parts of this document that are not historical
      facts
      are, or may be deemed to be, “forward-looking statements” within the meaning of
      Section 27A of the Securities Act of 1933 and Section 21E of the Securities
      Exchange Act of 1934. Such forward-looking statements include, but are not
      limited to, those relating to the following: the effect and benefits of the
      company’s reverse merger transaction; Janel’s plans to reduce costs (including
      the scope, timing, impact and effects thereof); potential annualized cost
      savings; plans for direct entry into the trucking and warehouse distribution
      business (including the scope, timing, impact and effects thereof); the
      company's ability to improve its cost structure; plans for opening additional
      domestic and foreign branch offices (including the scope, timing, impact and
      effects thereof); the sensitivity of demand for the company's services to
      domestic and global economic and political conditions; expected growth; future
      operating expenses; future margins; fluctuations in currency valuations;
      fluctuations in interest rates; future acquisitions and any effects, benefits,
      results, terms or other aspects of such acquisitions; ability to continue growth
      and implement growth and business strategy; the ability of expected sources
      of
      liquidity to support working capital and capital expenditure requirements;
      future expectations and outlook and any other statements regarding future
      growth, cash needs, operations, business plans and financial results and any
      other statements that are not historical facts. ****




When
      used
      in this document, the words "anticipate," "estimate," "expect," "may," "plans,"
      "project," and similar expressions are intended to be among the statements
      that
      identify forward-looking statements. Janel’s results may differ significantly
      from the results discussed in the forward-looking statements. Such statements
      involve risks and uncertainties, including, but not limited to, those relating
      to costs, delays and difficulties related to the company's dependence on its
      ability to attract and retain skilled managers and other personnel; the intense
      competition within the freight industry; the uncertainty of the company's
      ability to manage and continue its growth and implement its business strategy;
      the company's dependence on the availability of cargo space to serve its
      customers; effects of regulation; its vulnerability to general economic
      conditions and dependence on its principal customers; accuracy of accounting
      and
      other estimates; risk of international operations; risks relating to
      acquisitions; the company's future financial and operating results, cash needs
      and demand for its services; and the company's ability to maintain and comply
      with permits and licenses; as well as other risk factors described in this
      Annual Report. Should one or more of these risks or uncertainties materialize,
      or should underlying assumptions prove incorrect, actual outcomes may vary
      materially from those projected.




15




**Overview**




The
      following discussion and analysis addresses the results of operations for the
      fiscal year ended September 30, 2007, as compared to the results of operations
      for the fiscal year ended September 30, 2006; the fiscal year ended September
      30, 2006 as compared to the results of operations for the fiscal year ended
      September 30, 2005; and the results of operations for the fiscal year ended
      September 30, 2005, as compared to the results of operations for the fiscal
      year
      ended September 30, 2004. The discussion and analysis then addresses the
      liquidity and financial condition of the company, and other
      matters.




**Results
      of Operations**




Janel
      operates its business as a single segment primarily comprised of full-service
      cargo transportation logistics management, including freight forwarding via
      air,
      ocean and land-based carriers, customs brokerage services, warehousing and
      distribution services, and other value-added logistics services.




**Fiscal
      Year Ended September 30, 2007 Compared to Fiscal Year Ended September 30,
      2006**




**Revenue.** Total
      revenue for fiscal 2007 was $74,947,442, as compared to $77,220,070 for fiscal
      2006, a year-over-year decrease of $(2,272,628), or (2.9)%. The slight decrease
      in revenue was primarily due to a generally quieter overall environment in
      international trade during fiscal 2007 in all of the principal industry sectors
      served by the company, which include wearing apparel and finished garments,
      footwear, household appliances and electronics, and sporting goods and
      accessories. Revenue in 2007 was also negatively affected by the continuing
      substitution, when possible, of lower-priced ocean freight versus airfreight
      by
      many of our customers. During fiscal 2007, the company essentially maintained
      its overall business activities with existing clients, and through the addition
      of new clients. Net revenue (revenue minus forwarding expenses) in fiscal 2007
      was a record $8,172,364, an increase of $119,542, or 1.5%, as compared to
      $8,052,822 in fiscal 2006.




**Forwarding
      Expense.** Forwarding
      expense is primarily comprised of the fees paid by Janel directly to cargo
      carriers to handle and transport its actual freight shipments on behalf of
      its
      customers between initial and final terminal points. Forwarding expense also
      includes any duties and/or trucking charges related to the shipments. For fiscal
      year 2007, forwarding expense decreased by $2,392,170, or 3.5%, to $66,775,078,
      as compared to $69,167,248 for fiscal year 2006. The company’s export business
      is conducted predominantly by ocean freight. Continuing customer attention
      to
      and improvements in supply-chain management and inventory planning resulted
      in a
      reduced reliance on and frequency of time-critical shipments which require
      airfreight. These factors have resulted in the increased use of lower-cost
      ocean
      freight. As a general rule, ocean freight costs less than airfreight, and is
      marked up at a lower percentage than are shipments via airfreight, i.e.,
      forwarding expense as a percentage of revenue is generally higher (and the
      company earns less) for ocean freight than for airfreight.




16


**Selling,
      General and Administrative Expense.** Selling,
      general and administrative expense
      increased $325,321, or 4.5%, to $ 7,624,360 in fiscal 2007, as compared to
      $7,299,039 in fiscal 2006. As a percentage of revenue, SG&A expense in
      fiscal 2007 was 10.17% as compared to 9.45% as a percentage of revenue in fiscal
      2006. The year-over-year dollar increase in SG&A resulted from a general
      increase in most categories of SG&A expenses in fiscal 2007, including the
      addition of up to seven persons in sales and administrative capacities as
      compared to fiscal 2006.




**Income
      Before Taxes.** Income
      before taxes in fiscal 2007 was $606,679, which represented a year-to-year
      increase of $278,184, or 84.7%, as compared to income before taxes of $328,495
      in fiscal 2006. The principal reason for the rise was the absence of any
      stock-based compensation in fiscal 2007 in contrast to $452,360 of such
      compensation, which was incurred in fiscal 2006.




**Income
      Taxes.** ****** **.** ****** The
      effective income tax rates in fiscal 2007 and fiscal 2006 are 47% and 83%,
      respectively. The decrease of 36% is attributable to the absence of stock-based
      compensation in 2007 as was paid in 2006, the stock warrant portion of which
      was
      non-deductible. No deferred taxes were provided in 2006 in connection with
      the
      issuance of the warrant.




**Net
      Income.** For
      fiscal 2007, Janel reported net income of $322,979, an increase of $265,984,
      or
      466.7%, as compared to the reported net income of $56,995 in fiscal 2006.
      Janel’s net profit margin (net income as a percent of net revenue) was 3.95% in
      fiscal 2007, an increase of 324 basis points as compared to 0.71% in fiscal
      2006. The principal reason for the significant increase was the absence of
      a
      stock-based compensation expense in fiscal 2007 in contrast to the negative
      effect on net income resulting from the payment in fiscal 2006 of stock-based
      compensation in the amount of $452,360.




**Fiscal
      Year Ended September 30, 2006 Compared to Fiscal Year Ended September 30,
      2005**




**Revenue.** Total
      revenue for fiscal 2006 was a record $77,220,070, as compared to $73,484,334
      for
      fiscal 2005, a year-over-year increase of $3,735,736, or 5.1%. The increase
      in
      revenue was primarily due to the general improvement in international trade
      during fiscal 2006 in all of the principal industry sectors served by the
      company, in particular, wearing apparel and finished garments, household
      electronics, and sporting goods and accessories. During fiscal 2006, the company
      increased its overall business activities with existing clients, and through
      the
      addition of new clients. Net revenue (revenue minus forwarding expenses) in
      fiscal 2006 was a record $8,052,822, an increase of $442,161, or 5.8%, as
      compared to $7,610,661 in fiscal 2005.




**Forwarding
      Expense.** Forwarding
      expense is primarily comprised of the fees paid by Janel directly to cargo
      carriers to handle and transport its actual freight shipments on behalf of
      its
      customers between initial and final terminal points. Forwarding expense also
      includes any duties and/or trucking charges related to the shipments. For fiscal
      year 2006, forwarding expense increased by $3,293,575, or 5.0%, to $69,167,248,
      as compared to $65,873,673 for fiscal year 2005. The company’s export business
      is conducted predominantly by ocean freight. Customer improvements in
      supply-chain management and inventory planning have reduced the frequency of
      time-critical shipments which require airfreight. These factors have resulted
      in
      the increased use of lower-cost ocean freight. As a general rule, ocean freight
      costs less than airfreight, and is marked up at a lower percentage than are
      shipments via airfreight, i.e., forwarding expense as a percentage of revenue
      is
      generally higher (and the company earns less) for ocean freight than for
      airfreight.




17


**Selling,
      General and Administrative Expense.** Selling,
      general and administrative expense
      increased $520,470, or 7.7%, to $7,299,039 in fiscal 2006, as compared to
      $6,778,569 in fiscal 2005. As a percentage of revenue, SG&A expense in
      fiscal 2006 was 9.45% as compared to 9.22% as a percentage of revenue in fiscal
      2005. The year-over-year dollar increase in SG&A resulted from a general
      increase in most categories of SG&A expenses in fiscal 2006, including
      increased commissions on increased sales, as compared to fiscal
      2005.




**Income
      Before Taxes.** Income
      before taxes in fiscal 2006 was $328,495, which represented a year-to-year
      decrease of $446,374, or 57.6%, as compared to income before taxes of $774,869
      in fiscal 2005. The principal reason for the decline was the payment of
      stock-based compensation in fiscal 2006 in the amount of $452,360, which
      accounted for more than the total dollar decrease. No stock-based compensation
      was paid in fiscal 2005.




**Income
      Taxes.** ****** The
      effective income tax rates in fiscal 2006 and fiscal 2005 are 83% and 44%,
      respectively. The increase of 39% is attributable to the non-deductible stock
      warrant issued as part of the stock-based compensation. No deferred taxes have
      been provided in connection with the issuance of the warrant.




**Net
      Income.** For
      fiscal 2006, Janel reported record net income of $56,995, a decrease of
      $373,024, or 86.7%, as compared to the reported net income of $430,019 in fiscal
      2005. Janel’s net profit margin (net income as a percent of net revenue) was
      0.71% in fiscal 2006, a decline of 494 basis points as compared to 5.65% in
      fiscal 2005. The principal reason for the significant decline was the negative
      effect on net income resulting from the payment in fiscal 2006 of stock-based
      compensation in the amount of $452,360.




**Fiscal
      Year Ended September 30, 2005 Compared to Fiscal Year Ended September 30,
      2004**




**Revenue.** Total
      revenue for fiscal 2005 was a record $73,484,334, as compared to $69,981,639
      for
      fiscal 2004, a year-over-year increase of $3,502,695, or 5.0%. The increase
      in
      revenue was primarily due to the general improvement in international trade
      during fiscal 2005 in all of the principal industry sectors served by the
      company, in particular, wearing apparel and finished garments, household
      electronics, and sporting goods and accessories. During fiscal 2005, the company
      substantially increased its overall business activities with existing clients,
      and through the addition of new clients, notwithstanding its elimination of
      nine
      low-margin accounts that had accounted for approximately $10,800,000 of revenue
      during fiscal 2004, but accounted for only approximately $550,000 of revenue
      in
      fiscal 2005. Net revenue (revenue minus forwarding expenses) in fiscal 2005
      was
      a record $7,610,661, an increase of $670,199, or 9.7%, as compared to $6,940,462
      in fiscal 2004.




**Forwarding
      Expense.** For
      fiscal year 2005, forwarding expense increased by $2,832,496, or 4.5%, to
      $65,873,673 as compared to $63,041,177 for fiscal year 2004. The percentage
      increase in forwarding expense is less than the percentage increase in revenue
      because of the elimination of low-margin customer accounts. The company’s export
      business is conducted predominantly by ocean freight. Customer improvements
      in
      supply-chain management and inventory planning reduced the frequency of
      time-critical shipments which require airfreight. These factors resulted in
      the
      increased use of lower-cost ocean freight.




18


**Selling,
      General and Administrative Expense.** Selling,
      general and administrative expense
      increased $454,963, or 7.2%, to $6,778,569 in fiscal 2005, as compared to
      $6,323,606 in fiscal 2004. As a percentage of revenue, SG&A expense in
      fiscal 2005 was 9.22% as compared to 9.03% as a percentage of revenue in fiscal
      2004. The year-over-year dollar increase in SG&A resulted from an increase
      in accounting, legal and investor relations expenses, the hiring of three
      additional salespeople and the related incremental expenses in fiscal 2005,
      and
      increased commissions on increased sales, as compared to fiscal
      2004.




**Income
      (Loss) Before Taxes.** Income
      before taxes in fiscal 2005 increased to a record $774,869, which represented
      a
      year-to-year improvement of $305,914, or 65.2%, as compared to income before
      taxes of $468,955 in fiscal 2004. Income before taxes was lower than income
      before other items for the period primarily as the result of a charge of $50,098
      taken during the year reflecting costs related to abandoned business
      acquisitions. The principal reason for the significant increase was the
      elimination of low-margin customer accounts, increased business activity by
      new
      customer accounts and increased shipping activity by existing
      customers.




**Income
      Taxes.** ****** The
      effective income tax rates in both fiscal 2005 and fiscal 2004 generally reflect
      the U.S. federal statutory rate and applicable state income taxes.




**Net
      Income (Loss).** For
      fiscal 2005, Janel reported record net income of $430,019, an increase of
      $165,664, or 62.7%, as compared to the reported net income of $264,355 in fiscal
      2004. Janel’s net profit margin (net income as a percent of net revenue) was
      5.65% in fiscal 2005, an improvement of 184 basis points as compared to 3.81%
      in
      fiscal 2004. The principal reason for the significant gain was the elimination
      of the low-margin customer accounts, increased business activity by new customer
      accounts and increased shipping activity by existing customers.




**Liquidity
      and Capital Resources**




Janel’s
      ability to meet its liquidity requirements, which include satisfying its debt
      obligations, funding working capital, day-to-day operating expenses and capital
      expenditures depends upon its future performance, which is subject to general
      economic conditions and other factors, some of which are beyond its control.
      During the 12 months ended September 30, 2007, Janel’s net working capital
      (total current assets less total current liabilities) increased by $676,793,
      primarily as a result of a increase in cash and cash equivalents of
      $1,127,775.




At
      September 30, 2007, cash increased by $1,127,775 to $2,469,727 from $1,341,952
      at September 30, 2006. For the 12 months ended September 30, 2007, Janel’s
      primary source of cash from operating activities was a substantial increase
      in
      accounts payable and accrued expenses of $1,117,750 as well as its net income
      of
      $322,979. The increase in its accounts payable was largely offset by an increase
      in accounts receivable of $534,634. In addition, proceeds from the sale of
      preferred stock provided $464,395 in cash. During fiscal 2007, net cash was
      also
      used in investing activities represented by the acquisition of property and
      equipment in the amount of $138,844.




19


At
      September 30, 2006, cash increased by $548,714 to $1,341,952 from $793,238
      at
      September 30, 2005. For the 12 months ended September 30, 2006, Janel’s primary
      source of cash was the adjustment to net income of $452,360 representing the
      stock-based compensation expense as well as its net income of $56,995. The
      decrease in its accounts receivable of $524,990 was largely offset by a decrease
      in accounts payable of $490,156. During fiscal 2006, net cash was also used
      in
      investing activities represented by the acquisition of property and equipment
      in
      the amount of $43,478.




In
      March
      2004, Janel increased its line of credit with a bank from $1,500,000 to
      $2,000,000. In January 2005, Janel entered into agreements providing for a
      transfer of its line of credit to another bank on identical terms, except that
      the available line of credit increased to $3,000,000. In July 2005, Janel
      decreased its line of credit from $3,000,000 to $1,500,000 because its cash
      flow
      is adequate for financing its receivables, and it obtained a reduced interest
      rate. At September 30 , 2007,
      Janel had increased year-over-year its available borrowing under its line of
      credit by $200,000 to $1,700,000, bearing interest at prime less three-quarters
      of one percent (0.75%) per annum, collateralized by substantially all the assets
      of Janel and personal guarantees by certain shareholders of the company. In
      October 2007, Janel borrowed the $1,700,000 available under its line of credit
      for use in the acquisition of certain assets of OLI. Management believes that
      anticipated cash flow before other items and availability under its expanded
      line of credit are sufficient to meet its current working capital and operating
      needs. However, the company is also proceeding with its comprehensive growth
      strategy for fiscal 2006 and beyond, which encompasses a number of potential
      elements, as detailed below under “Current Outlook.” To successfully execute
      various of these growth strategy elements in the coming months, the company
      will
      need to secure additional capital funding estimated at up to $10,000,000 during
      that period. There is no assurance either that such additional capital as
      necessary to execute the company’s business plan and intended growth strategy
      will be available or, if available, will be extended to the company at mutually
      acceptable terms.




**Current
      Outlook**




Janel
      is
      primarily engaged in the business of providing full-service cargo transportation
      logistics management, including freight forwarding - via air, ocean and
      land-based carriers - customs brokerage services, warehousing and distribution
      services, and other value-added logistics services. Its results of operations
      are affected by the general economic cycle, particularly as it influences global
      trade levels and specifically the import and export activities of Janel’s
      various current and prospective customers. Historically, the company’s quarterly
      results of operations have been subject to seasonal trends which have been
      the
      result of, or influenced by, numerous factors including climate, national
      holidays, consumer demand, economic conditions, the growth and diversification
      of its international network and service offerings, and other similar and subtle
      forces.




In
      October 2007, Janel acquired the brand and software technologies, customer
      relationships and related assets of Order Logistics. Based upon the results
      for
      the fiscal year ended September 30, 2007, and its current operations, Janel
      conservatively projects that gross revenue from its currently existing accounts
      and businesses for its fiscal year ending September 30, 2008 will grow by
      approximately 5-10% to approximately $78-$82 million.




20


In
      addition, Janel is progressing with the implementation of its business plan
      and
      strategy to grow its revenue and profitability for fiscal 2008 and beyond
      through other avenues. The company’s strategy for growth includes plans to:
      open, as warranted, additional branch offices domestically and/or outside the
      continental United States; introduce additional revenue streams for its existing
      headquarters and branch locations; proceed with negotiations and due diligence
      with privately held transportation-related firms which may ultimately lead
      to
      their acquisition by the company; expand its existing sales force by hiring
      additional commission-only sales representatives with established customer
      bases; increase its focus on growing revenue related to export activities;
      evaluate direct entry into the trucking and warehouse distribution business
      as a
      complement to the services already provided to existing customers; and continue
      its focus on containing current and prospective overhead and operating expenses,
      particularly with regard to the efficient integration of any additional offices
      or acquisitions. Assuming successful execution of substantial elements of these
      growth strategies, the company projects that gross revenue for fiscal 2008
      (which may approximate $78 - $82 million) will be greater than its gross revenue
      for fiscal 2007, and that profitability will be commensurately greater than
      Janel’s fiscal 2007 results, as well.





**Contractual
      Obligations and Commitments**





The
      following table presents, as of September 30, 2007, the company’s significant
      fixed and determinable contractual obligations, by payment date. Further
      discussion of the nature of the obligations is included in Notes 8 and 12 to
      the
      Consolidated Financial Statements:





Years
      Ended September 30,


2008
              
              2009
              
              2010
              
              2011
              
              2012Long
                      term debt due as follows (1):
              
              $
              3,795
              
              $
              2,550Operating
                    lease obligations (2)
              
              $
              304,000
              
              $
              289,000
              
              $
              131,000
              
              $
              78,000
              
              $
              61,000







(1)
      Represents principal payments only.





(2)
      Leases represent future minimum lease payments under non-cancellable operating
      leases (primarily the rental of premises). In accordance with accounting
      principles generally accepted in the United States, the company’s operating
      leases are not recorded in its balance sheet.





**Critical
      Accounting Policies and Estimates**





Management’s
      Discussion and Analysis of Financial Condition and Results of Operations
      discusses the company’s consolidated financial statements, which have been
      prepared in accordance with accounting principles generally accepted in the
      United States of America. The preparation of these financial statements requires
      management to make estimates and assumptions about future events that affect
      the
      amounts reported in the financial statements and accompanying notes. Since
      future events and their effects cannot be determined with absolute certainty,
      the determination of estimates requires the exercise of judgment. Actual results
      could differ from those estimates, and such difference may be material to the
      financial statements. The most significant accounting estimates inherent in
      the
      preparation of our financial statements include estimates as to the appropriate
      carrying value of certain assets and liabilities that are not readily apparent
      from other sources, primarily allowance for doubtful accounts, accruals for
      transportation and other direct costs, and accruals for cargo insurance.
      Management bases its estimates on historical experience and on various
      assumptions that are believed to be reasonable under the circumstances. We
      reevaluate these significant factors as facts and circumstances change.
      Historically, actual results have not differed significantly from our estimates.
      These accounting policies are described at relevant sections in this discussion
      and analysis and in the notes to the consolidated financial statements included
      in this Annual Report on Form 10-K for the fiscal year ended September 30,
      2006.





21


Management
      believes that the nature of the company’s business is such that there are few,
      if any, complex challenges in accounting for operations. Revenue recognition
      is
      considered the critical accounting policy due to the complexity of arranging
      and
      managing global logistics and supply-chain management transactions.





**Revenue
      Recognition**





Revenues
      are derived from airfreight, ocean freight and custom brokerage services. The
      company is a non-asset-based carrier and accordingly does not own transportation
      assets. The company generates the major portion of its air and ocean freight
      revenues by purchasing transportation services from direct carriers (airlines,
      steam ship lines, etc.) and reselling those services to its customers. By
      consolidating shipments from multiple customers and availing itself of its
      buying power, the company is able to negotiate favorable rates from the direct
      carriers, while offering to its customers lower rates than the customers could
      obtain themselves.





Airfreight
      revenues include the charges for carrying the shipments when the company acts
      as
      a freight consolidator. Ocean freight revenues include the charges for carrying
      the shipments when the company acts as a Non-Vessel Operating Common Carrier
      (NVOCC). In each case, the company is acting as an indirect carrier. When acting
      as an indirect carrier, the company will issue a House Airway Bill (HAWB) or
      a
      House Ocean Bill of Lading (HOBL) to customers as the contract of carriage.
      In
      turn, when the freight is physically tendered to a direct carrier, the company
      receives a contract of carriage known as a Master Airway Bill for airfreight
      shipments and a Master Ocean Bill of Lading for ocean shipments. At this point
      the risk of loss passes to the carrier, however, in order to claim for any
      such
      loss, the customer is first obligated to pay the freight charges.





Based
      upon the terms in the contract of carriage, revenues related to shipments where
      the company issues a HAWB or a HOBL are recognized at the time the freight
      is
      tendered to the direct carrier. Costs related to the shipments are recognized
      at
      the same time.





Revenues
      realized when the company acts as an agent for the shipper and does not issue
      a
      HAWB or a HOBL include only the commission and fees earned for the services
      performed. These revenues are recognized upon completion of the
      services.





22


Customs
      brokerage and other services involves provide multiple services at destination
      including clearing shipments through customs by preparing required
      documentation, calculating and providing for payment of duties and other charges
      on behalf of the customers, arranging for any required inspections, and
      arranging for final delivery. These revenues are recognized upon completion
      of
      the services.





The
      movement of freight may require multiple services. In most instances the company
      may perform multiple services including destination breakbulk and value added
      services such as local transportation, distribution services and logistics
      management. Each of these services has separate fee that is recognized as
      revenue upon completion of the service.





Customers
      will frequently request an all-inclusive rate for a set of services that is
      known in the industry as “door-to-door services.” In these cases, the customer
      is billed a single rate for all services from pickup at origin to delivery.
      The
      allocation of revenue and expense among the components of services when provided
      under an all inclusive rate are done in an objective manner on a fair value
      basis in accordance with Emerging Issues Task Force (EITF) 00-21, “Revenue
      Arrangements with Multiple Deliverables.”





**Estimates**





While
      judgments and estimates are a necessary component of any system of accounting,
      the company’s use of estimates is limited primarily to the following areas that
      in the aggregate are not a major component of the company’s consolidated
      statements of income:





a.
            accounts
                receivable valuation;


b.
            the
                useful lives of long-term assets;


c.
            the
                accrual of costs related to ancillary services the company provides;
                and


c.
            accrual
                of tax expense on an interim basis.





Management
      believes that the methods utilized in all of these areas are non-aggressive
      in
      approach and consistent in application. Management believes that there are
      limited, if any, alternative accounting principles or methods which could be
      applied to the company’s transactions. While the use of estimates means that
      actual future results may be different from those contemplated by the estimates,
      the company believes that alternative principles and methods used for making
      such estimates would not produce materially different results than those
      reported.





**Item
              7a.**
            **Quantitative
                and Qualitative Disclosures About Market
                Risk.**





Not
      applicable.





**Item
              8.**
            **Financial
                Statements and Supplementary
                Data.**





The
      financial statements and supplementary data required by this Item 8 are included
      in the company’s Consolidated Financial Statements listed in Item 15(a) of this
      Annual Report.





23




**Item
              9.**
            **Changes
                in and Disagreements with Accountants on Accounting and****Financial
                Disclosure.**





Not
      applicable.





**Item
              9A.**
            **Controls
                and Procedures.**





We
      maintain a system of disclosure controls and procedures that is designed to
      provide reasonable assurance that information, which is required to be disclosed
      by the company in the reports that it files or submits under the Securities
      and
      Exchange Act of 1934, as amended, is recorded, processed, summarized and
      reported within the time periods specified in the rules and forms of the SEC,
      and is accumulated and communicated to management in a timely manner. Our Chief
      Executive Officer and Chief Financial Officer have evaluated this system of
      disclosure controls and procedures as of the end of the period covered by this
      annual report, and believe that the system is effective. There have been no
      changes in our internal control over financial reporting during the most recent
      fiscal year that have materially affected, or are reasonably likely to
      materially affect, the company’s internal control over financial
      reporting.





**Item
              9B.**
            **Other
                Information.**





None





**PART
      III**





**Item
      10.**  **Directors,
      Executive Officers and Corporate Governance.**





The
      executive officers and directors of the Registrant are as follows:




Name
            Age
            PositionStephen
                P. Cesarski
            63
            President,
                Chief Operating
              Officer
                and DirectorJames
                N. Jannello
            63
            Executive
                Vice President,
              Chief
                Executive Officer and DirectorWilliam
                J. Lally
            54
            DirectorNoel
                J. Jannello
            36
            Director
                and Vice PresidentVincent
                Iacopella
            40
            DirectorRuth
                Werra
            66
            SecretaryLinda
                Bieler
            46
            Controller
                and Chief Financialand Accounting Officer




24




Stephen
      P. Cesarski has been the President and a director of Janel since 1978. Mr.
      Cesarski is the Chief Operating Officer and is principally engaged in sales
      and
      marketing and also manages the export side of the company's
      business.




James
      N.
      Jannello is the Executive Vice President and a director, and has been the Chief
      Executive Officer of Janel since it was founded in 1974. Mr. Jannello's
      principal function is the overseeing of all of the company's operations,
      management of the import side of the business and the setting of billing rates
      and charges, and the maintenance of relationships with overseas agents
      worldwide. Mr. Jannello is a licensed Customs House Broker.




William
      J. Lally was initially employed by Janel in New York City in 1975 and moved
      to
      Chicago, Illinois in 1979, where he is the President of the Janel Group of
      Illinois, Inc. Mr. Lally became a director of the company in July
      2002.




Noel
      J.
      Jannello was initially employed by Janel in 1995, and has been a Vice President
      and operations executive since 2003. His principal function is the overseeing
      of
      the company's U.S. operations. Mr. Jannello is a graduate of Bradley University
      (B.A., Advertising & Marketing, 1993), and is the son of James N.
      Jannello.




Vincent
      Iacopella has been the Managing Director of The Janel Group of Los Angeles
      since
      2004, and was the driving force in reorganizing the Los Angeles office into
      profitable operation. Prior to joining Janel, Mr. Iacopella was the Managing
      Director and President of the California subsidiary of Delmar Logistics, Inc..
      Mr. Iacopella is a member of the board of directors of Los Angeles Customs
      Brokers Freight Forwarders Association. He has recently become the Secretary
      of
      The Pacific Coast Council of Customs Brokers and Freight Forwarders
      Associations, Inc. Mr. Iacopella attended New York University, and is a licensed
      customs broker.




Ruth
      Werra has been the Secretary of Janel since 1994 and has been employed by the
      company since 1975. She is the office manager of the New York executive office
      and oversees the maintenance of Janel’s corporate records. Mrs. Werra also
      oversees the entry and clearance of all personal effects shipments handled
      by
      the New York office.




Linda
      Bieler has been the Controller of Janel since 1994. She is the Chief Financial
      and Accounting Officer and oversees accounting operations for all branches,
      and
      manages its information systems and generation of its reports.




Directors
      hold office until the next annual meeting of shareholders and thereafter until
      their successors have been duly elected and qualified. The executive officers
      are elected by the Board of Directors on an annual basis and serve under the
      direction of the board. Executive officers devote all of their business time
      to
      the company's affairs.




Janel’s
      Board of Directors does not yet include any "independent" directors, and the
      company does not have any standing Audit, Compensation or Nominating Committees.
      The Board of Directors met three times during fiscal 2007.




25


**Item
              11.**
            **Executive
                Compensation**




**Summary
      Compensation Table**




The
                following table sets forth, for the fiscal years ended September
                30, 2007,
                2006 and 2005, the cash compensation paid by the company, as well
                as
                certain other compensation paid with respect to those years and months,
                to
                the Chief Executive Officer and, to the extent applicable, each of
                the
                three other most highly compensated executive officers of the company
                in
                all capacities in which they
                served.




**ANNUAL**
                    **COMPENSATION**
              
              
              
              **LONG-TERM
                  COMPENSATION****SECURITIES****AWARDS**
              
              **UNDERLYING**
              
              **PAYOUTS****NAME
                AND**
              
              
              
              
              
              
              
              **OTHER ANNUAL**
              
              **RESTRICTED**
              
              **OPTIONS/**
              
              **LTIP**
              
              **ALL
                  OTHER****PRINCIPAL**
              
              **YEAR**
              
              **SALARY**
              
              **BONUS**
              
              **COMPENSATION**
              
              **STOCK**
              
              **SARS**
              
              **PAYOUTS**
              
              **COMPENSATION****POSITION**
              
              
              
              **($)**
              
              **($)**
              
              **($)**
              
              **AWARDS ($)**
              
              
              
              **(#)**
              
              **($)**Stephen
                  Cesarski (1)
              
              
              2005
              
              
              172,089
              
              
              14,630
              
              
              52,268
              (1)President
              
              
              2006
              
              
              179,889
              
              
              0
              
              
              47,680
              (1)2007
              
              
              182,489
              
              
              0
              
              
              50,965
              (1)James
                  Jannello (2)
              
              
              2005
              
              
              178,480
              
              
              14,630
              
              
              48,910
              (2)Executive
                  Vice President
              
              
              2006
              
              
              187,475
              
              
              
              
              
              52,318
              (2)2007
              
              
              195,436
              
              
              
              
              
              46,713
              (2)Noel
                  J. Jannello (3)
              
              
              2005
              
              
              143,851
              
              
              
              
              
              15,693
              (3)Vice
                  President
              
              
              2006
              
              
              164,460
              
              
              
              
              
              17,510
              (3)2007
              
              
              169,515
              
              
              
              
              
              19,192
              (3)William
                  Lally (4)
              
              
              2005
              
              
              109,382
              
              
              20,000
              
              
              13,715
              (4)Director
              
              
              2006
              
              
              117,949
              
              
              10,000
              
              
              13,153
              (4)2007
              
              
              119,188
              
              
              15,000
              
              
              14,046
              (4)Vincent
                  Iacopella (5)
              
              
              2005
              
              
              145,205
              
              
              
              
              
              5,813
              (5)Director
              
              
              2006
              
              
              149,266
              
              
              
              
              
              6,827
              (5)2007
              
              
              142,200
              
              
              
              
              
              8,978
              (5)





(1)
      Includes $13,778, $15,259, and $15,755 of medical insurance premiums paid on
      behalf of such individual for each of the fiscal years ended 2007, 2006, and
      2005 respectively, $34,981, $30,248, and $34,437 for automobile and
      automobile-related costs, including insurance, incurred on behalf of such individual,
      for each of the fiscal years ended 2007, 2006, and 2005 respectively, and
      $2,206, $2,173, and $2,076 of 401K paid on behalf of such individual for each
      of
      the fiscal years ended 2007, 2006, and 2005 respectively.





(2)
      Includes $11,430, $13,366, and $12,435 of medical insurance premiums paid on
      behalf of such individual for each of the fiscal years ended 2007, 2006, and
      2005, respectively, $32,947, $36,714, and $34,334 for automobile and
      automobile-related costs, including insurance, incurred on behalf of such
      individual, for each of the fiscal years ended 2007, 2006, and 2005
      respectively, and $2,336, $2,238, and $2,141 of 401K paid on behalf of such
      individual for each of the fiscal years ended 2007, 2006, and 2005 respectively.





(3)
      Includes $6,000, $5,995, and $5,172 of medical insurance premiums paid on behalf
      of such individual for each of the fiscal years ended 2007, 2006, and 2005,
      respectively, $11,678, $10,025, and $9,210, for automobile and
      automobile-related costs, including insurance, incurred on behalf of such
      individual, for each of the fiscal years ended 2007, 2006, and 2005
      respectively, and $1,514, $1,487, and $1,311 of 401K paid on behalf of such
      individual for each fiscal years ended 2007, 2006, and 2005
      respectively.




26




(4)
      Includes $14,046, $13,153, and $13,715 for automobile and automobile-related
      costs, including insurance, incurred on behalf of such individual for each
      of
      the fiscal years ended 2007, 2006, and 2005.





(5)
      Includes $3,610, $3,079, and $2,633 of medical insurance premiums paid on behalf
      of such individual for each of the fiscal years ended 2007, 2006, and 2005,
      respectively, $3,946, $3,748, and $3,180, for automobile and automobile-related
      costs, incurred on behalf of such individual for each of the fiscal years ended
      2007, 2006, and 2005 respectively, and $1,422 of 401K paid on behalf of such
      individual for the fiscal year ended 2007.




**Item
              12.**
            **Security
                Ownership of Certain Beneficial Owners and Management and Related
                Stockholder Matters.**




The
      following table sets forth certain information regarding shares of common stock
      beneficially owned as of January 14, 2008, by (i) each person, known to the
      company, who beneficially owns more than 5% of the common stock, (ii) each
      of
      the company's directors and (iii) all officers and directors as a
      group:




Name
                and Address of Beneficial Owner
            
            Shares Beneficially Owned
            
            Percentage of Stock
                Outstanding (1)Stephen
                P. Cesarski
              150-14
                132nd Avenue
              Jamaica,
                NY 11434
            
            
            5,500,000
            
            
            32.27
            %James
                N. Jannello
              150-14
                132nd Avenue
              Jamaica,
                NY 11434
            
            
            5,500,000
            
            
            32.27
            %William
                J. Lally
              17
                West 312thDeer Path Rd.
              Bensenville,
                IL 60106
            
            
            1,000,000
            
            
            5.87
            %Noel
                J. Jannello
              150-14
                132nd Avenue
              Jamaica,
                NY 11434
            
            
            25,000
            
            
            *Vincent
                Iacopella
              6069
                West 76th Street
              Los
                Angeles, CA.  90045
            
            
            -0-
            
            
            *Ruth
                Werra
              150-14
                132nd Avenue
              Jamaica,
                NY 11434
            
            
            25,000
            
            
            *Linda
                Bieler
              150-14
                132nd Avenue
              Jamaica,
                NY 11434
            
            
            25,000
            
            
            *All
                Officers and Directors as a Group (7 persons)
            
            
            12,125,000
            
            
            71.14
            %


27


*
      Less
      than one percent (1%).




(1)
      All
      of these shares are owned of record.




**Common
      Stock**




Janel
      is
      authorized to issue up to 225,000,000 shares of common stock, $.001 par value
      each, of which 17,043,000 shares are currently issued and outstanding. The
      holders of common stock are entitled to one vote for each share held of record
      on all matters to be voted on by shareholders. There is no cumulative voting
      with respect to the election of directors, with the result that the holders
      of
      more than 50% of the shares of common stock can elect all of the directors.
      The
      company's principal officers, James N. Jannello and Stephen P. Cesarski,
      collectively own 64.54% of the issued and outstanding common stock and therefore
      can elect all of the directors. The holders of common stock are entitled to
      receive dividends when and if declared by the Board of Directors out of funds
      legally available therefore. In the event of liquidation, dissolution or winding
      up of the company, the owners of common stock are entitled to share all assets
      remaining available for distribution after the payment of liabilities and after
      provision has been made for each class stock, if any, having a preference over
      the common stock as such. The common stock has no conversion, preemptive or
      other subscription rights, and there are no redemption revisions applicable
      to
      the common stock.




**Preferred
      Stock**





The
      Board
      of Directors of the company is authorized to issue up to 5,000,000 shares of
      preferred stock in one or more series and to fix the rights, preferences,
      privileges and restrictions thereof, including the dividend rights, dividend
      rate, conversion rights, voting rights, terms of redemption (including sinking
      fund provisions), redemption price or prices, liquidations preferences and
      the
      number of shares constituting any series or the designations of such series,
      without any further vote or action by the stockholders. It would be possible
      for
      the Board of Directors to issue shares of such preferred stock in a manner
      which
      would make acquisition of control of the company, other than as approved by
      the
      Board, exceedingly difficult.





The
      company currently has outstanding one million (1,000,000) shares of its Series
      A
      Convertible Preferred Stock, each share of which is convertible at any time
      into
      one (1) share of its common stock, and has authorized the issuance of up to
      285,000 shares of its Series B Convertible Preferred Stock, each share of which
      is convertible after October 18, 2009 into ten (10) shares of its common
      stock.





**Savings
      and Stock Option Plans**




401(k)
      and Profit-Sharing Plan.




The
      company maintains an Internal Revenue Code Section 401(k) salary deferral
      savings and profit-sharing plan (the "Plan") for all of its eligible employees
      who have been employed for at least one year and are at least 21 years old.
      Subject to certain limitations, the Plan allows participants to voluntarily
      contribute up to 15% of their pay on a pre-tax basis. Under the Plan, the
      company may make matching contributions on behalf of the pre-tax contributions
      made up to a maximum of 25% of the participant's first 5% of compensation
      contributed as Elective Deferrals in the year. All participants are fully vested
      in their accounts in the Plan with respect to their salary deferral
      contributions, and are vested in company matching contributions at the rate
      of
      20% after three years of service, 40% after four years of service, 60% after
      five years of service, 80% after six years of service, with 100% vesting after
      seven years of service.




28




Stock
      Option Plan.




On
      December 12, 2002, Janel’s Board of Directors and majority of its shareholders
      approved and adopted the Janel World Trade, Ltd. Stock Option Incentive Plan
      (the “Option Plan”) providing for options to purchase up to 1,600,000 shares of
      common stock for issuance to valued employees and consultants of the company
      as
      an incentive for superior performance.




To
      date,
      no options have been granted under the Option Plan. The Option Plan is
      administered by the Board of Directors, which is authorized to grant incentive
      stock options and non qualified stock options to selected employees and
      consultants of the company and to determine the participants, the number of
      options to be granted and other terms and provisions of each
      option.




The
      exercise price of any incentive stock option or nonqualified option granted
      under the Option Plan may not be less than 100% of the fair market value of
      the
      shares of common stock of the company at the time of the grant. In the case
      of
      incentive stock options granted to holders of more than 10% of the voting power
      of the company, the exercise price may not be less than 110% of the fair market
      value.




Under
      the
      terms of the Option Plan, the aggregate fair market value (determined at the
      time of grant) of shares issuable to any one recipient upon exercise of
      incentive stock options exercisable for the first time during any one calendar
      year may not exceed $100,000. Options granted under the Option Plan may be
      exercisable in either one, two or three equal annual installments at the
      discretion of the Board of Directors, but in no event may a stock option be
      exercisable prior to the expiration of six months from the date of grant, unless
      the grantee dies or becomes disabled prior thereto. Stock options granted under
      the Option Plan have a maximum term of 10 years from the date of grant, except
      that with respect to incentive stock options granted to an employee who, at
      the
      time of the grant, is a holder of more than 10% of the voting power of the
      company, the stock option shall expire not more than five years from the date
      of
      the grant. The option price must be paid in full on the date of exercise and
      is
      payable in cash or in shares of common stock having a fair market value on
      the
      date the option is exercised equal to the option price, as determined by the
      Board of Directors.




If
      a
      grantee’s employment by, or provision of services to, the company shall be
      terminated, the Board of Directors may, in its discretion, permit the exercise
      of stock options for a period not to exceed one year following such termination
      of employment with respect to incentive stock options and for a period not
      to
      extend beyond the expiration date with respect to non qualified options, except
      that no incentive stock option may be exercised after three months following
      the
      grantee’s termination of employment, unless due to death or permanent
      disability, in which case the option may be exercised for a period of up to
      one
      year following such termination.




Transfer
      Agent.




The
      company's transfer agent for shares of its Common Stock is Madison Stock
      Transfer, Inc., Brooklyn, NY 11229.




29




**Item
              13.**
            **Certain
                Relationships and Related Transactions and Director
                Independence.**




Stephen
      P. Cesarski, Janel’s President and Chief Operating Officer, and James N.
      Jannello, Janel’s Executive Vice President and Chief Executive Officer, each own
      a 10% profit interest in each of Janel Shanghai and Janel Hong Kong, and jointly
      own 100% of FCL/LCL International, Inc., a New York corporation which is
      an NVOCC executing paperwork for Janel, from which they each receive
      approximately $10,000 per year. Mr. Jannello also owns 50% of Janel Miami
      (Florida), which is a franchisee using the Janel name, but in which the company
      has no equity or other direct economic interest.




As
      of the
      fiscal year end of September 30, 2007, James N. Jannello was indebted to the
      company in the aggregate sum of $138,490, and William J. Lally was indebted
      in
      the aggregate amount of $3,950. The officer loan to Mr. Jannello bears interest
      at 4% per annum. The officer loan to Mr. Lally is non-interest bearing. The
      officer loans are due on demand.




The
      transactions described above involve actual or potential conflicts of interest
      between Janel and its officers. To reduce the potential for conflicts of
      interest between the company and its officers and directors in the future,
      Janel's policy will be not to enter into potential conflict-of-interest
      transactions with officers, directors or other affiliates unless the terms
      of
      such transactions are at least as favorable to Janel as those which would have
      been obtainable from an unaffiliated source. The company has no plans to enter
      into any additional transactions that involve actual or potential conflicts
      of
      interest between Janel and its officers or directors, and will not enter into
      any such transaction in the future without first obtaining an independent
      opinion with regard to fairness to Janel of the terms and conditions of any
      such
      transaction.




**Item
              14.**
            **Principal
                Accounting Fees and
                Services.**




**Audit
      Fees**




The
      aggregate fees billed by Paritz & Company, P.A. for the annual
      audit were $27,500 and $25,000 for the fiscal years ended September 30,
      2007 and 2006, respectively,
      and their fees for review of
      the interim financial statements were $15,000 for each of the fiscal
      years ended September 30, 2007 and 2006, respectively.




****  **Financial
      Information Systems Design and Implementation Fees**




Paritz
      & Company, P.A. did not render any professional services to Janel World
      Trade, Ltd. for financial information systems design and implementation, as
      described in Paragraph  (c)(4)(ii) of Rule 2-01 of Regulation 
S-X, during the fiscal years ended September 30, 2007 and
      2006.




**All
      Other Fees**




The
      aggregate fees billed by Paritz & Company, P.A. for all other services
      rendered to Janel World Trade, Ltd. during the fiscal years ended September
      30,
      2007 and 2006, other than audit services, were $6,100 in the fiscal year
      ended September 30, 2007, and $8,700 for the fiscal year ended September 30,
      2006. These "other fees" were for services related to  tax and
      other
      miscellaneousservices.




30




**PART
      IV**




**Item
              15.**
            **Exhibits,
                Financial Statement
                Schedules.**




**(a)**
            **Financial
                Statements.**Report
                of Independent Registered Accounting FirmConsolidated
                Balance Sheets as at September 30, 2007 and 2006Consolidated
                Statement of Operations for the Years Ended September 30, 2007, 2006
                and
                2005Consolidated
                Statement of Changes in Stockholders’ Equity for the Years Ended September
                30, 2007, 2006 and 2005Consolidated
                Statement of Cash Flows for the Years Ended September 30, 2007, 2006
                and
                2005Notes
                to Consolidated Financial Statements**(c)**
            **Exhibits.**2.
            Agreement
                and Plan of Merger dated July 18, 2002 by and among Wine Systems
                Design,
                Inc., WSD Acquisition, Inc. and Janel World Transport,
                Ltd.*(b)2.1
            Acquisition
                Agreement dated July 6, 2005 by and among Janel World Trade, Ltd.,
                Freight
                Wings, Inc. and Harjinder P. Singh.*(d) (The transaction proposed
                in this
                document was subsequently cancelled.)3
                (i)
            Articles
                of Incorporation of Wine Systems Design, Inc. (predecessor name)
                filed on
                August 31, 2000.*(a)3
                (ii)
            By-laws
                of Wine Systems Design, Inc. (predecessor name) adopted on September
                1,
                2000.*(a)3(iii)
            Certificate
                of Correction of the preferences, rights, qualifications, limitations
                and
                restrictions of Series A Convertible Preferred
                Stock.*(j)3(iv)
            Restated
                and Amended Articles of Incorporation of Janel World Trade,
                Ltd.*(j)4.
            Form
                of Series A Warrant Agreement dated March 10, 2006, and form of Series
                A
                Warrant.*(f)4.1
            Certificate
                of Designation of Series A Convertible Preferred Stock dated January
                10,
                2007.*(i)4.2
            Certificate
                of Designation of Series B Convertible Preferred Stock dated October
                16,
                2007.*(j)10.1
            Janel
                Stock Option Incentive Plan adopted December 12, 2002.10.2
            Financial
                Public & Investor Relations Agreement signed March 10, 2006 by Janel
                World Trade, Ltd. and Strategic Growth International,
                Inc.*(f)10.3
            Janel
                World Trade, Ltd. Securities Purchase Agreement with the Institutional
                Purchaser entered into January 10, 2007.*(i)10.4
            Janel
                World Trade, Ltd. Registration Rights Agreement with the Institutional
                Purchaser entered into January 10, 2007.*(i)10.5
            Asset
                Purchase Agreement among Janel World Trade, Ltd., Janel Newco, Inc.
                and
                Order Logistics, Inc. entered into October 18,
                2007.*(j)




31




23.1
            Consent
                of Paritz & Company, P.A.23.2
            Letter
                dated August 1, 2002, from Michael L. Stuck, C.P.A., P.C., the former
                independent certifying accountant.*(c)31
            Rule
                13(a)-14(a)/15(d)-14(a) Certifications.32
            Section
                1350 Certification.99.1
            January
                11, 2006 Janel World Trade, Ltd. earnings release regarding the fiscal
                year and fourth quarter ended September 30, 2005.*(e)99.1
            August
                17, 2006 Janel World Trade, Ltd. press release regarding the consolidated
                financial results for the three and nine month periods ended June
                30,
                2006.*(g)99.1
            October
                12, 2006 Janel World Trade, Ltd. press release regarding adoption
                of a
                stock buy back program.*(h)




*(a)
            Incorporated
                by reference to Exhibits filed as part of the Wine Systems Design,
                Inc.
                (predecessor name) Registration Statement on Form SB-2 under File
                No.
                333-60608, filed May 10, 2001.*(b)
            Incorporated
                by reference to Exhibits filed as part of the company's Form 8-K
                report,
                filed July 18, 2002.*(c)
            Incorporated
                by reference to Exhibits filed as part of the company's Form 8-K/A
                report,
                filed August 1, 2002.*(d)
            Incorporated
                by reference to Exhibits filed as part of the company's Form 8-K/A
                report,
                filed July 12, 2005.*(e)
            Incorporated
                by reference to Exhibits filed as part of the company's Form 8-K
                report,
                filed January 12, 2006.*(f)
            Incorporated
                by reference to Exhibits filed as part of the company's Form 8-K
                report,
                filed March 17, 2006.*(g)
            Incorporated
                by reference to Exhibits filed as part of the company's Form 8-K
                report,
                filed August 22, 2006.*(h)
            Incorporated
                by reference to Exhibits filed as part of the company's Form 8-K
                report,
                filed October 16, 2006.*(i)
            Incorporated
                by reference to Exhibits filed as part of the company’s Form 8-K Report
                filed January 17, 2007.*(j)
            Incorporated
                by reference to Exhibits filed as part of the company’s Form 8-K Report
                filed October 22, 2007.**(d)**
            **Financial
                Statement Schedules.**




Schedules
      are omitted because they are not applicable, are not required or because the
      information is included in the company’s Consolidated Financial Statements or
      notes thereto.




32


**SIGNATURES**




Pursuant
      to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
      1934, the Registrant has duly caused this Report to be signed on its behalf
      by
      the undersigned, thereunto duly authorized.




January
      14, 2008




JANEL
                WORLD TRADE, LTD.By:
            /s/
                James N. JannelloJames
                N. Jannello, Executive Vice President and Chief
              Executive
                Officer




Pursuant
      to the requirements of the Securities Exchange Act of 1934, this Report been
      signed below by the following persons on behalf of the Registrant and in the
      capacities and on the dates indicated.




/s/
                James N. Jannello
            
            Executive
                Vice President, Chief Executive
            
            January
                14, 2008James
                N. Jannello
            
            Officer
                and Director/s/
                Stephen P. Cesarski
            
            President,
                Chief OperatingOfficer
            
            January
                14, 2008Stephen
                P. Cesarski
            
            and
                Director/s/
                William J. Lally
            
            Director
            
            January
                14, 2008William
                J. Lally/s/
                Noel J. Jannello
            
            Vice
                President and Director
            
            January
                14, 2008Noel
                J. Jannello/s/
                Vincent Iacopella
            
            Director
            
            January
                14, 2008Vincent
                Iacopella/s/
                Linda Bieler
            
            Controller
                and Chief Financial and
            
            January
                14, 2008Linda
                Bieler
            
            Accounting
                Officer/s/
                Ruth Werra
            
            Secretary
            
            January
                14, 2008Ruth
                Werra








33


**JANEL
        WORLD TRADE LTD. AND SUBSIDIARIES**
 
 CONSOLIDATED
        BALANCE SHEETS
 **---------SEPTEMBER
                    30,----------****2007**
                
                **2006****ASSETS****CURRENT
                    ASSETS**Cash
                    and cash equivalents**(
                    Note 1)**
                
                $
                2,469,727
                
                $
                1,341,952Accounts
                    receivable, net of allowance fordoubtful
                    accounts of $42,600 in 2007 and $28,350 in 2006
                
                
                5,343,958
                
                
                4,809,324Marketable
                    securities**(Note
                    3)**
                
                
                70,880
                
                
                59,222Loans
                    receivable - officers**(Note
                    4)**
                
                
                142,440
                
                
                144,530-
                    related party**(Note
                    5)**
                
                
                111,700
                
                
                --
                    other
                
                
                21,994
                
                
                33,868Prepaid
                    expenses and sundry current assets
                
                
                156,802
                
                
                126,678**TOTAL
                    CURRENT ASSETS**
                
                
                **8,317,501**
                
                
                **6,515,574****Property
                    and equipment, net****(Note
                    6)**
                
                
                **217,528**
                
                
                **178,099****Security
                    deposits**
                
                
                **49,035**
                
                
                **49,418****$**
                **8,584,064**
                
                **$**
                **6,743,091****LIABILITIES
                    AND STOCKHOLDERS’ EQUITY****CURRENT
                    LIABILITIES**Accounts
                    payable
                
                $
                3,822,677
                
                $
                2,714,086Accrued
                    expenses and taxes payable
                
                
                205,555
                
                
                185,563Current
                    portion of long-term debt**(Note
                    8)**
                
                
                3,795
                
                
                7,244**TOTAL
                    CURRENT LIABILITIES**
                
                
                **4,032,027**
                
                
                **2,906,893****OTHER
                    LIABILITIES**:Long-term
                    debt**(Note
                    8)**
                
                
                2,550
                
                
                6,337Deferred
                    compensation
                
                
                78,568
                
                
                78,568**TOTAL
                    OTHER LIABILITIES**
                
                
                **81,118**
                
                
                **84,905****STOCKHOLDERS’
                    EQUITY (Note 9)**
                
                
                **4,470,919**
                
                
                **3,751,293****TOTAL
                    LIABILITIES AND STOCKHOLDERS’ EQUITY**
                
                **$**
                **8,584,064**
                
                **$**
                **6,743,091**
 
 The
        accompanying notes are an integral part of these consolidated financial
        statements
 
  
  **JANEL
        WORLD TRADE LTD. AND SUBSIDIARIES**
 
 CONSOLIDATED
        STATEMENTS OF INCOME
 **-----------YEAR
                    ENDED SEPTEMBER 30,-------------****2007**
                
                **2006**
                
                **2005****REVENUES
                    (Note 1)**
                
                **$**
                **74,947,442**
                
                **$**
                **77,220,070**
                
                **$**
                **73,484,334****COSTS
                    AND EXPENSES:**Forwarding
                    expenses
                
                
                66,775,078
                
                
                69,167,248
                
                
                65,873,673Selling,
                    general and administrative
                
                
                7,624,360
                
                
                7,299,039
                
                
                6,778,569Stock
                    based compensation**(Note
                    9)**
                
                
                -
                
                
                452,360
                
                
                -**TOTAL
                    COSTS AND EXPENSES**
                
                
                **74,399,438**
                
                
                **76,918,647**
                
                
                **72,652,242****INCOME
                    BEFORE OTHER ITEMS**
                
                
                **548,004**
                
                
                **301,423**
                
                
                **832,092****OTHER
                    ITEMS:**Costs
                    related to abandoned businessacquisitions**(Note
                    2)**
                
                
                -
                
                
                -
                
                
                (50,098
                )Interest
                    and dividend income
                
                
                59,175
                
                
                28,212
                
                
                14,494Interest
                    expense
                
                
                (500
                )
                
                (1,140
                )
                
                (21,619
                )**TOTAL
                    OTHER ITEMS**
                
                
                **58,675**
                
                
                **27,072**
                
                
                **(57,223**
                **)****INCOME
                    BEFORE INCOME TAXES**
                
                
                **606,679**
                
                
                **328,495**
                
                
                **774,869**Income
                    taxes**(Note
                    10)**
                
                
                283,700
                
                
                271,500
                
                
                344,850**NET
                    INCOME**
                
                
                **322,979**
                
                
                **56,995**
                
                
                **430,019**Preferred
                    stock dividends
                
                
                10,833
                
                
                -
                
                
                -**NET
                    INCOME AVAILABLE TO****COMMON
                    STOCKHOLDERS**
                
                **$**
                **312,146**
                
                **$**
                **56,995**
                
                **$**
                **430,019****OTHER
                    COMPREHENSIVE INCOME****NET
                    OF TAX:**Unrealized
                    gain from availablefor
                    sale securities
                
                $
                8,897
                
                $
                1,147
                
                $
                7,859Basic
                    earnings per share
                
                $
                .0184
                
                $
                .0034
                
                $
                .02553Fully
                    diluted earnings per share
                
                $
                .0180
                
                $
                .0033
                
                $
                .02553Basic
                    weighted number of shares outstanding
                
                
                16,978,142
                
                
                16,955,329
                
                
                16,843,000Fully
                    diluted weighted number of shares outstanding
                
                
                17,378,142
                
                
                17,179,986
                
                
                16,843,000
 
  
 The
        accompanying notes are an integral part of these consolidated financial
        statements
  
  
 **JANEL
        WORLD TRADE LTD. AND SUBSIDIARIES**
 
 CONSOLIDATED
        STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
 CAPITAL
                    STOCK
                
                PREFERRED
                    STOCKSHARES
                
                $
                
                SHARES
                
                $
                
                TREASURY
                  STOCK
                
                ADDITIONAL
                  PAID-IN
                  CAPITAL
                
                RETAINED
                  EARNINGS
                
                ACCUMULATED
                  OTHER
                  COMPREHENSIVE
                  GAIN
                    (LOSS)
                
                TOTAL**BALANCE-SEPTEMBER
                    30, 2004**
                
                
                **16,843,000**
                
                **$**
                **16,843**
                
                
                **-**
                
                **$**
                **-**
                
                **$**
                **-**
                
                **$**
                **501,003**
                
                **$**
                **2,291,310**
                
                **$**
                **(6,243**
                **)**
                **$**
                **2,802,913**Net
                    income
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                430,019
                
                
                -
                
                
                430,019Other
                    comprehensive gains:Unrealized
                    gains on available-for- sale
                  marketable
                    securities
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                7,859
                
                
                7,859**BALANCE-SEPTEMBER
                    30, 2005**
                
                
                **16,843,000**
                
                
                **16,843**
                
                
                **-**
                
                
                **-**
                
                
                **-**
                
                
                **501,003**
                
                
                **2,721,329**
                
                
                **1,616**
                
                
                **3,240,791**Net
                    income
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                56,995
                
                
                -
                
                
                56,995Stock
                    based compensation
                
                
                200,000
                
                
                200
                
                
                -
                
                
                -
                
                
                -
                
                
                452,160
                
                
                -
                
                
                -
                
                
                452,360Other
                    comprehensive gains:Unrealized
                    gains on available-for- sale
                  marketable
                    securities
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                1,147
                
                
                1,147**BALANCE-SEPTEMBER
                    30, 2006**
                
                
                **17,043,000**
                
                
                **17,043**
                
                
                **-**
                
                
                **-**
                
                
                **-**
                
                
                **953,163**
                
                
                **2,778,324**
                
                
                **2,763**
                
                
                **3,751,293**Net
                    income
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                322,979
                
                
                -
                
                
                322,979Convertible
                    preferred stock issuance
                  net
                    of expenses of $35,605
                
                
                -
                
                
                -
                
                
                1,000,000
                
                
                1,000
                
                
                -
                
                
                463,395
                
                
                -
                
                
                -
                
                
                464,395Purchase
                    of 137,000 shares
                  treasury
                    stock
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                (65,812
                )
                
                -
                
                
                -
                
                
                -
                
                
                (65,812
                )Dividends
                    to preferred shareholders
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                (10,833
                )
                
                -
                
                
                (10,833
                )Other
                    comprehensive gains:Unrealized
                    gains on available-for- sale
                  marketable
                    securities
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                8,897
                
                
                8,897**BALANCE-SEPTEMBER
                    30, 2007**
                
                
                **17,043,000**
                
                **$**
                **17,043**
                
                
                **1,000,000**
                
                **$**
                **1,000**
                
                **$**
                **(65,812**
                **)**
                **$**
                **1,416,558**
                
                **$**
                **3,090,470**
                
                **$**
                **11,660**
                
                **$**
                **4,470,919**
 
 
  
 The
        accompanying notes are an integral part of these consolidated financial
        statements
  
  **JANEL
        WORLD TRADE LTD. AND SUBSIDIARIES**
 
 CONSOLIDATED
        STATEMENTS OF CASH FLOWS
 **----------YEAR
                  ENDED SEPTEMBER 30,--------****2007**
              
              **2006**
              
              **2005****OPERATING
                  ACTIVITIES:**Net
                  income
              
              $
              322,979
              
              $
              56,995
              
              $
              430,019*Adjustments
                  to reconcile net income to net**cash
                  provided by operating activities:*Depreciation
                  and amortization
              
              
              99,415
              
              
              107,649
              
              
              96,866Stock
                  based compensation
              
              
              -
              
              
              452,360
              
              
              -*Changes
                  in operating assets and liabilities:*Accounts
                  receivable
              
              
              (534,634
              )
              
              524,990
              
              
              (53,879
              )Prepaid
                  expenses and sundry current assets
              
              
              (30,124
              )
              
              (50,558
              )
              
              (8,596
              )Security
                  deposits
              
              
              383
              
              
              -
              
              
              510Accounts
                  payable and accrued expenses
              
              
              1,117,750
              
              
              (490,156
              )
              
              71,152**NET
                  CASH PROVIDED BY OPERATING ACTIVITIES**
              
              
              **975,769**
              
              
              **601,280**
              
              
              **536,072****INVESTING
                  ACTIVITIES:**Acquisition
                  of property and equipment, net
              
              
              (138,844
              )
              
              (43,478
              )
              
              (227,320
              )Purchase
                  of marketable securities
              
              
              (2,761
              )
              
              (2,333
              )
              
              (1,746
              )**NET
                  CASH USED IN INVESTING ACTIVITIES**
              
              
              **(141,605**
              **)**
              
              **(45,811**
              **)**
              
              **(229,066**
              **)****FINANCING
                  ACTIVITIES:**Decrease
                  (increase) in loans receivable
              
              
              (97,736
              )
              
              1,629
              
              
              7,115Repayment
                  of long-term debt, net
              
              
              (7,236
              )
              
              (8,384
              )
              
              (8,390
              )Proceeds
                  from sale of preferred stock, net ofrelated
                  expenses of $35,605
              
              
              464,395Repayment
                  of bank borrowings
              
              
              -
              
              
              -
              
              
              (800,000
              )Purchase
                  of treasury stock
              
              
              (65,812
              )**NET
                  CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES**
              
              
              **293,611**
              
              
              **(6,755**
              **)**
              
              **(801,275**
              **)****INCREASE
                  (DECREASE) IN CASH AND CASH EQUIVALENTS**
              
              
              **1,127,775**
              
              
              **548,714**
              
              
              **(494,269**
              **)****CASH
                  AND CASH EQUIVALENTS - BEGINNING OF YEAR**
              
              
              **1,341,952**
              
              
              **793,238**
              
              
              **1,287,507****CASH
                  AND CASH EQUIVALENTS - END OF YEAR**
              
              **$**
              **2,469,727**
              
              **$**
              **1,341,952**
              
              **$**
              **793,238****SUPPLEMENTAL
                  DISCLOSURES OF CASH FLOW INFORMATION:***Cash
                  paid during the year for:*Interest
              
              $
              500
              
              $
              1,140
              
              $
              21,619Income
                  taxes
              
              $
              294,429
              
              $
              332,164
              
              $
              286,994*Non-cash
                  investing activities:*Unrealized
                  gain on marketable securities
              
              $
              8,897
              
              $
              1,147
              
              $
              1,616Dividends
                  declared to preferred shareholders
              
              $
              10,833
              
              $
              -
              
              $
              -
 
 The
        accompanying notes are an integral part of these consolidated financial
        statements
  
  **JANEL
        WORLD TRADE LTD. AND SUBSIDIARIES**
 
 NOTES
        TO
        CONSOLIDATED FINANCIAL STATEMENTS
 
 
 
 **1**
              **SUMMARY
                  OF SIGNIFICANT ACCOUNTING
                  POLICIES**
 
 ***Business
        description***
 
 Janel
        World Trade Ltd. and Subsidiaries (“the Company” or “Janel”) is primarily
        engaged in full-service cargo transportation logistics management, including
        freight forwarding via air, ocean and land-based carriers, customs brokerage
        services and warehousing and distribution services.
 
 ***Basis
        of consolidation***
 
 The
        accompanying consolidated financial statements include the accounts of the
        Company and its subsidiaries, all of which are wholly owned. All intercompany
        transactions and balances have been eliminated in consolidation.
 
 ***Uses
        of estimates in the preparation of financial
        statements***
 
 The
        preparation of financial statements in conformity with generally accepted
        accounting principles requires management to make estimates and assumptions
        that
        affect the reported amounts of assets and liabilities and disclosure of
        contingent assets and liabilities at the date of the financial statements
        and
        the reported amounts of net revenue and expenses during each reporting period.
        Actual results could differ from those estimates.
 
 ***Cash
        and cash equivalents***
 
 Cash
        and
        cash equivalents consist of cash and highly liquid investments with remaining
        maturities of less than ninety days at the date of purchase.
 
 The
        Company maintains cash balances at various financial institutions. Accounts
        at
        each institution are insured by the Federal Deposit Insurance Corporation
        up to
        $100,000. The Company’s accounts at these institutions may, at times, exceed the
        federally insured limits. The Company has not experienced any losses in such
        accounts.
 
 ***Marketable
        securities***
 
 The
        Company classifies all of its short-term investments as available-for-sale
        securities. Such short-term investments consist primarily of mutual funds
        which
        are stated at market value, with unrealized gains and losses on such securities
        reflected as other comprehensive income (loss) in stockholders’ equity. Realized
        gains and losses on short-term investments are included in earnings and are
        derived using the specific identification method for determining the cost
        of
        securities. It is the Company’s intent to maintain a liquid portfolio to take
        advantage of investment opportunities. Therefore, all securities are considered
        to be available for sale and are classified as current assets.
 
 ***Property
        and equipment and depreciation policy***
 
 Property
        and equipment are recorded at cost. Depreciation is provided for in amounts
        sufficient to amortize the costs of the related assets over their estimated
        useful lives on the straight-line and accelerated methods for both financial
        reporting and income tax purposes.
 
 Maintenance,
        repairs and minor renewals are charged to expense when incurred. Replacements
        and major renewals are capitalized.
  
  
 
  ***Revenues
        and revenue recognition***
 
 Revenues
        are derived from airfreight, ocean freight and custom brokerage services.
        The
        Company is a non-asset based carrier and accordingly, does not own
        transportation assets. The Company generates the major portion of its air
        and
        ocean freight revenues by purchasing transportation services from direct
        carriers (airlines, steam ship lines, etc.) and reselling those services
        to its
        customers. By consolidating shipments from multiple customers and availing
        itself of its buying power, the Company is able to negotiate favorable rates
        from the direct carriers, while offering to its customers lower rates than
        the
        customers could obtain themselves.
 
 Airfreight
        revenues include the charges to the Company for carrying the shipments when
        the
        Company acts as a freight consolidator. Ocean freight revenues include the
        charges to the Company for carrying the shipments when the Company acts as
        a
        Non-Vessel Operating Common Carrier (NVOCC). In each case, the Company is
        acting
        as an indirect carrier. When acting as an indirect carrier, the Company will
        issue a House Airway Bill (HAWB) or a house Ocean Bill of Lading (HOBL) to
        customers as the contract of carriage. In turn, when the freight is physically
        tendered to a direct carrier, the Company receives a contract of carriage
        known
        as a Master Airway Bill for airfreight shipments and a Master Ocean Bill
        of
        Lading for ocean shipments. At this point the risk of loss passes to the
        carrier, however, in order to claim for any such loss, the customer is first
        obligated to pay the freight charges.
 
 Based
        upon the terms in the contract of carriage, revenues related to shipments
        where
        the Company issues a HAWB or a HOBL are recognized at the time the freight
        is
        tendered to the direct carrier. Costs related to the shipments are recognized
        at
        the same time.
 
 Revenues
        realized when the Company acts as an agent for the shipper and does not issue
        a
        HAWB or a HOBL include only the commission and fees earned for the services
        performed. These revenues are recognized upon completion of the
        services.
 
 Customs
        brokerage and other services involves providing multiple services at
        destination, including clearing shipments through customs by preparing required
        documentation, calculating and providing for payment of duties and other
        charges
        on behalf of the customers, arranging for any required inspections, and
        arranging for final delivery. These revenues are recognized upon completion
        of
        the services.
 
 The
        movement of freight may require multiple services. In most instances, the
        Company may perform multiple services including destination breakbulk and
        value
        added services such as local transportation, distribution services and logistics
        management. Each of these services has a separate fee which is recognized
        as
        revenue upon completion of the service.
 
 Customers
        will frequently request an all inclusive rate for a set of services, which
        is
        known in the industry as “door-to-door services”. In these cases, the customer
        is billed a single rate for all services from pickup at origin to delivery.
        The
        allocation of revenue and expense among the components of service when provided
        under an all inclusive rate are done in an objective manner on a fair value
        basis in accordance with Emerging Issues Task Force (EITF) 00-21, “Revenue
        Arrangements with Multiple Deliverables”.
  ***Deferred
        compensation plan***
 
 The
        Company has a deferred compensation plan for key executives which provides
        benefits due to death, retirement or termination of employment. Such benefits
        shall be determined and paid in accordance with the plan. The plan does not
        qualify under the Internal Revenue Code and, therefore, tax deductions are
        allowable only when the benefits are paid.
  
  
 
 
 ***Impairment
        of long-lived assets***
 
 Long-lived
        assets are reviewed for impairment when circumstances indicate the carrying
        value of an asset may not be recoverable. For assets that are to be held
        and
        used, an impairment is recognized when the estimated undiscounted cash flows
        associated with the asset or group of assets is less than their carrying
        value.
        If impairment exists, an adjustment is made to write the asset down to its
        fair
        value, and a loss is recorded as the difference between the carrying value
        and
        fair value. Fair values are determined based on quoted market values, discounted
        cash flows or internal and external appraisals, as applicable. Assets to
        be
        disposed of are carried at the lower of carrying value or estimated net
        realizable value.
 
 ***Income
        per common share***
 
 Basic
        net
        income per common share is calculated by dividing net income available to
        common
        shareholders by the weighted average of common shares outstanding during
        the
        period. Diluted net income per common share is calculated using the weighted
        average of common shares outstanding adjusted to include the potentially
        dilutive effect of stock options.
 
 ***Comprehensive
        income***
 
 Comprehensive
        income encompasses all changes in stockholders’ equity other than those arising
        from stockholders, and generally consists of net income and unrealized gains
        and
        losses on unrestricted available-for-sale marketable equity securities. As
        of
        September 30, 2007, accumulated other comprehensive income consists of
        unrealized gains on unrestricted available-for-sale marketable equity
        securities.
 
 
 **2** **ABANDONED
        ACQUISITIONS**
 
 During
        the year ended September 30, 2005 the Company negotiated a business acquisition.
        In connection therewith, the Company incurred legal and accounting fees
        aggregating $50,098. Since this transaction has not been consummated and
        negotiations have terminated, these costs have been charged to expense in
        the
        accompanying consolidated statements of operations.
 
 
 **3** **MARKETABLE
        SECURITIES**
 
 Marketable
        securities consist of the following:
 Cost
                
                Unrealized
                  Holding
                  Gains
                
                Fair
                    ValueAs
                    of September 30, 2007:Mutual
                    Funds
                
                $
                61,983
                
                $
                8,897
                
                $
                70,880As
                    of September 30, 2006:Mutual
                    Funds
                
                $
                58,075
                
                $
                1,147
                
                $
                59,222
 
  **4**
              **LOANS
                  RECEIVABLE - OFFICERS**
 
 The
        loans
        receivable - officers bear interest at 4% per annum and are due on
        demand.
 
 
  
  
 
 
 
 
 
 **5** **LOAN
        RECEIVABLE - RELATED PARTY**
 
 The
        loan
        receivable - related party is due from a company owned by Janel’s President and
        Executive Vice President. The loan bears interest at 6% per annum and is
        due on
        demand.
 
 
 **6** **PROPERTY
        AND EQUIPMENT**
 
 A
        summary
        of property and equipment and the estimated lives used in the computation
        of
        depreciation and amortization is as follows:
 
 --------September
                  30,---------2007
              
              2006
              
              LifeFurniture
                  and fixtures
              
              $
              77,108
              
              $
              74,102
              
              
              5-7
                  yearsComputer
                  equipment
              
              
              489,410
              
              
              407,822
              
              
              5
                  years566,518
              
              
              481,924Less
                  accumulated depreciation andamortization
              
              
              348,990
              
              
              303,825$
              217,528
              
              $
              178,099
 
 
 **7** **NOTE
        PAYABLE - BANK**
 
 The
        Company has an available line of credit with a bank pursuant to which it
        may
        borrow up to $1,700,000. Advances under this facility bear interest at prime
        minus .75%. Borrowings of up to $1,500,000 under the line are personally
        guaranteed by the president and executive vice president of the Company.
        The
        line is secured by a blanket lien on the assets of the Company.
 
 **8** **LONG-TERM
        DEBT**
 
 Long-term
        debt consists of a capitalized lease obligation payable in monthly installments
        of approximately $300 inclusive of interest at 11% per annum and collateralized
        by security interests in certain property and equipment.
 
 
 **9** **STOCKHOLDERS’
        EQUITY**
 
 Janel
        is
        authorized to issue 225,000,000 shares of common stock, par value
        $.001.
 
 
 ***A.*** ***Issuance
        of convertible preferred stock***
 
 On
        January 10, 2007, the Company entered into a Securities Purchase agreement
        with
        an institutional purchaser, pursuant to which Janel sold an aggregate of
        one
        million unregistered shares of newly-authorized $0.001 par value 3% Series
        A
        Convertible Preferred Stock (the “Series A Stock”) for a total purchase price of
        $500,000. The shares are convertible into shares of Janel’s $0.001 par value
        common stock at any time on a one-share for one-share basis.
 
 
  
  
 
 
 
 Janel
        simultaneously entered into a Registration Rights Agreement with the
        Institutional Purchaser requiring the underlying shares of common stock issuable
        upon conversion of the Series A Stock to be included in the next securities
        registration statement (except for a registration statement on Forms S-4
        or S-8)
        filed by Janel with the Securities and Exchange Commission (“SEC”), and listed
        (if possible) on NASDAQ or a National Securities Exchange. The registration
        statement must be filed no later than nine months from closing, for an offering
        made on a continuous basis pursuant to SEC Rule 415, and become effective
        within
        ninety days after filing. Janel has agreed that none of its officers or
        directors will enter into any transaction for the disposition of any Janel
        shares owned by them or their affiliates until the expiration of nine months
        following the effective date of the required registration
        statement.
 
 In
        addition, Janel agreed to pay the purchasers an advisory fee of $2,000 per
        month
        for twelve months beginning March 1, 2007.
  ***B.***
              ***Stock
                  repurchase program***
 
 On
        October 12, 2006, the Company’s Board of Directors authorized the repurchase of
        up to 300,000 shares of the Company’s common stock, subject to certain
        conditions. It is expected that purchases under the program, depending upon
        prevailing market conditions, and other factors such as the Company’s cash
        position, will be made during the next twelve months. The repurchase plan
        may be
        suspended by the Company at any time. As of September 30, 2007, 137,000 shares
        of the Company’s common stock have been repurchased under the plan at a cost of
        $65,812.
 
 ***C.***
              ***Issuance
                  of common stock***
 
 On
        March
        10, 2006 the Company entered into a Financial Public & Investor Relations
        Agreement pursuant to which it agreed to pay a monthly fee of $6,000 through
        September 2006 plus issue 200,000 unregistered shares of the Company’s common
        stock valued at $1.02 per share and a warrant to purchase 400,000 shares
        of the
        Company’s common stock, exercisable from February 1, 2007 to October 2, 2010 at
        an exercise price of $1.02 per share, subject to antidilution.
 
 
 **10** **INCOME
        TAXES**
 
 Income
        taxes consist of the following :
 ---------Year
                    Ended September 30,--------2007
                
                
                2006
                
                
                2005Federal
                
                $
                187,000
                
                $
                182,000
                
                $
                234,600State
                    and local
                
                
                96,700
                
                
                89,500
                
                
                110,250$
                283,700
                
                $
                271,500
                
                $
                344,850
 
 The
        reconciliation of income tax computed at the Federal statutory rate to the
        provision for income taxes is as follows:
 ---------Year
                    Ended September 30,--------2007
                
                2006
                
                2005Federal
                    taxes at statutory rates
                
                $
                207,700
                
                $
                111,700
                
                $
                263,500Non-deductible
                    expenses
                
                
                12,200
                
                
                100,700
                
                
                9,500State
                    and local taxes, net of Federal benefit
                
                
                63,800
                
                
                59,100
                
                
                71,850$
                283,700
                
                $
                271,500
                
                $
                344,850
 
  
 
 
  
  
 
 
  **11** **PROFIT
        SHARING AND 401(k) PLANS**
 
 The
        Company maintains a non-contributory profit sharing and 401(k) plan covering
        substantially all full-time employees. The expense charged to operations
        for the
        years ended September 30, 2007, 2006, and 2005 aggregated approximately $28,000,
        $25,000, and $23,000, respectively.
 
 **12** **RENTAL
        COMMITMENTS**
 
 The
        Company conducts its operations from leased premises. Rental expense on
        operating leases for the years ended September 30, 2007, 2006 and 2005 was
        approximately $331,000, $324,000, and $311,000, respectively.
 
 Future
        minimum lease commitments (excluding renewal options) under noncancelable
        leases
        are as follows:
 Year
                  ended September 30,2008
              
              $
              304,0002009
              
              
              289,0002010
              
              
              131,0002011
              
              
              78,0002012
              
              
              61,000
 
 **13** **RISKS
        AND UNCERTAINTIES**
 
 ***(a)***
              ***Currency
                  risks***
 
 The
        nature of Janel’s operations requires it to deal with currencies other than the
        U.S. Dollar. This results in the Company being exposed to the inherent risks
        of
        international currency markets and governmental interference. A number of
        countries where Janel maintains offices or agent relationships have currency
        control regulations that influence its ability to hedge foreign currency
        exposure. The Company tries to compensate for these exposures by accelerating
        international currency settlements among those officers or agents.
 
 ***(b)***
              ***Legal
                  proceedings***
 
 Janel
        is
        occasionally subject to claims and lawsuits which typically arise in the
        normal
        course of business. While the outcome of these claims cannot be predicated
        with
        certainty, management does not believe that the outcome of any of these legal
        matters will have a material adverse effect on the Company’s financial position
        or results of operations. See Note 15.
 
 ***(c)***
              ***Relationships
                  with officers***
 
 Janel’s
        President and Chief Operating Officer and Executive Vice President and Chief
        Executive Officer (“EVP”), each own a 10% profit interest in each of Janel
        Shanghai and Janel Hong Kong, as well as 100% ownership in FCL/LCL International
        Inc. which operates as a “NVOCC” (non-vessel operating common carrier). In
        addition, the EVP owns 50% of Janel Miami (Florida), which is a franchise
        using
        the Janel name, but in which the Company has no equity or other direct economic
        interest.
 
 These
        relationships involve actual or potential conflicts of interest between Janel
        and its officers.
 
 ***(d)***
              ***Concentration
                  of sales***
 
 Sales
        to
        one customer aggregated approximately 19.9%, 13.5% and 10.9% of consolidated
        sales for the years ended September 30, 2007, 2006 and 2005, respectively.
        Amounts due from this customer aggregated $860,000, $705,000 and $220,000
        at
        September 30, 2007, 2006 and 2005, respectively.
  
  
 
 
 **14** **QUARTERLY
        RESULTS OF OPERATIONS (Unaudited)**
 
 
 First
              
              Second
              
              Third
              
              Fourth**Fiscal
                  2007**Net
                  sales
              
              $
              16,727,869
              
              $
              18,303,590
              
              $
              18,851,199
              
              $
              21,064,784Operating
                  income
              
              
              79,257
              
              
              52,378
              
              
              227,434
              
              
              188,935Net
                  income
              
              
              52,198
              
              
              37,018
              
              
              140,490
              
              
              93,273Per
                  share data (1):Basic
                  earnings per share
              
              $
              0.003
              
              $
              0.005
              
              $
              0.008
              
              $
              0.006Diluted
                  earnings per share
              
              $
              0.003
              
              $
              0.005
              
              $
              0.008
              
              $
              0.005**Fiscal
                  2006**Net
                  sales
              
              $
              18,781,315
              
              $
              18,791,602
              
              $
              19,534,537
              
              $
              20,112,616Operating
                  income (loss)
              
              
              152,823
              
              
              (190,835
              )
              
              187,928
              
              
              151,507Net
                  income (loss)
              
              
              88,655
              
              
              (160,190
              )
              
              100,146
              
              
              28,384Per
                  share data (1):Basic
                  earnings per share
              
              $
              0.005
              
              $
              (0.009
              )
              $
              0.006
              
              $
              0.002Diluted
                  earnings per share
              
              $
              0.005
              
              $
              (0.009
              )
              $
              0.006
              
              $
              0,002(1)
                  earnings per share were computed independently for each of the
                  periods
                  presented. Therefore, the sum of the earnings per share amounts
                  for the
                  quarters may not equal the total for the year.
 
 
 **15** **SUBSEQUENT
        EVENT**
 
 
 On
        October 18, 2007, the Company acquired certain assets of Order Logistics,
        Inc.
        (“OLI”) consisting of proprietary technology, intellectual property (including
        the name “Order Logistics”), office locations and equipment and customer lists
        for use in the management and expansion of the Company’s international
        integrated logistics transport services business. The technology acquired
        by the
        Company enables it to integrate all of the different aspects of movement
        and
        delivery of goods, making the entire process electronically visible in “real
        time”. The Agreement includes non-competition provisions restricting OLI from
        competing with Janel, and requiring OLI to change its name.
 
 The
        purchase price for the acquired assets was $3,888,429 and is comprised of
        $2,463,429 cash paid at closing and the issuance of 285,000 restricted shares
        of
        Janel’s newly-authorized $.001 par value Series B Convertible Preferred Stock
        (“Series B”), each share of which is convertible into ten shares of Janel’s
        $.001 par value common stock at any time after October 18, 2009. In connection
        therewith, the Company borrowed $1,700,000 under the line of credit referred
        to
        in Note 7 and entered into a term loan agreement for $500,000 with a different
        bank. The balance of the cash portion was paid from existing cash.
 
 Subsequent
        to the above mentioned acquisition, Janel learned that immediately prior
        to the
        closing of the acquisition, OLI had entered into an undisclosed agreement
        with a
        third party (the “Settlement Agreement”) which permitted that party to use OLI
        proprietary technology and customer relationships being purchased by Janel,
        and
        to solicit OLI employees in its South Carolina office. Janel believes that
        OLI’s
        failure to disclose the Settlement Agreement prior to the closing of the
        asset
        acquisition was a material violation of the OLI covenants, representations
        and
        warrantees set forth in the Asset Purchase Agreement which has damaged the
        value
        of the assets acquired by Janel. The Company is in discussions to obtain
        appropriate damages and is considering the initiation of litigation against
        OLI
        and its president to obtain an appropriate award of damages.
 
 
 
 
 
 
 
 
 ***Purchase
        price allocation***
 
 In
        accordance with the purchase method of accounting as prescribed by SFAS No.
        141,
“Business Combinations”, the Company has initially allocated the consideration
        to the net tangible and identifiable intangible assets, based on their estimated
        fair values. Goodwill represents the excess of the purchase price over the
        fair
        value of the underlying net tangible and identifiable intangible assets.
        The
        factors that contributed to the recognition of goodwill included securing
        buyer-specific synergies that increase revenue and profits and are not otherwise
        available to a marketplace participant, and the acquisition of a talented
        workforce.
 
 The
        initial consideration has been allocated as follows:
 
 Tangible
                  assets:Furniture
                  and equipment
              
              $
              165,117Intangible
                  assets:Identifiable
                  intangibles, subject to amortization
              
              
              3,260,000Goodwill
              
              
              463,3123,723,312Total
                  fair value
              
              $
              3,888,429