**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**





**FORM
      10-K**




x
              ANNUAL
                  REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE
                  ACT OF
                  1934For
                  the fiscal year ended: September 30, 2006o
              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
              Incorporation
                or organization)
            (IRS
                Employer Identification No.)150-14
                132ndAvenue, Jamaica, NY
            11434(Address
                of principal executive offices)
            (Zip
                Code)Issuer’s
                telephone number, including area code:
            (718)
                527-3800Securities
                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. $5,317,545 (last sale as of 3/31/06).





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.




2


**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 1974 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 2006
      (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 $77.2 million in fiscal 2006, $73.5 million in fiscal
      2005 and $69.9 million in 2004. In fiscal 2006, approximately 70% of revenue
      related to import activities (unchanged from 2005), 5% to export, 20% to
      break-bulk and forwarding, and 5% to warehousing, distribution and trucking
      (unchanged from 2005). By market, the company’s revenue in fiscal 2006 derived
      from four principal industries: consumer wearing apparel/textiles -
      approximately 35% (unchanged from 2005); machines/machine parts - approximately
      10% (unchanged from 2005); household appliances - approximately 20% (unchanged
      from 2005); and sporting goods and accessories - approximately 10% (unchanged
      from 2005) **.**




**History**




Janel
      commenced business in 1974 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.




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.




3


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 five leased locations in the United States: Jamaica
      (headquarters) and Lynbrook (accounting) in New York; 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. 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, 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 28 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 repackaging, domestic pickup
      and forwarding, “hazmat” certifications for hazardous cargoes, letters of
      credit, language translation services, online shipment tracking and electronic
      billing.




**Information
      Systems**




In
      May
      2000, Janel upgraded its information system hardware to 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 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 tracing 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 2006, 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 2006 were: H.H. Brown Shoe Company (which accounts for approximately
      10.85% of revenue), The Conair Corporation, Leisure Merchandise, Modell’s
      Sporting Goods, and The Selmer Company,




5


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, 2006, Janel employed 64 people; 34 in its Jamaica, New York
      headquarters and Lynbrook, New York back office; 8 in Elk Grove Village,
      Illinois; 7 in Forest Park, Georgia; and 15 in Inglewood, California.
      Approximately 47 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.




**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.




6


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.




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.




7


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;




-
      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.


8


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.




**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.




9


**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.




**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


**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.




**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 $132,300 through
      January 31, 2005, and $145,500 thereafter. Its administrative office in
      Lynbrook, New York is approximately 1,318 square feet and is occupied under
      a
      lease which expires February 28, 2008, with an annual rent of $35,000 for 2005,
      which increases to $38,000 in the last year of the lease. Janel’s 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 $38,478 until December 1, 2007, when the rent increases to
      $40,536 for the remainder of the lease term. 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 $29,190, which increases
      to $30,066 on September 1, 2007 and 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 2007 with an annual rent of $61,380. Certain of the leases
      also provide for annual increases based upon increases in taxes or service
      charges.




11




**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.




**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, 2006.





**PART
      II**





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




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
                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





Fiscal
                2005
            
            High
                Bid
            
            Low
                BidFirst
                Quarter
            
            $
            .63
            
            $
            .31Second
                Quarter
            
            $
            .57
            
            $
            .38Third
                Quarter
            
            $
            .50
            
            $
            .27Fourth
                Quarter
            
            $
            .85
            
            $
            .27





At
      December 7, 2006, the company had 45 holders of record and approximately 550
      beneficial holders of its shares of common stock. On December 27, 2006, the
      last
      sale price of the shares of common stock as reported by the OTC Bulletin Board
      was $0.42 per share.




12


Securities
      which were issued or sold by the Registrant within the past three years and
      which were not registered under the Securities Act of 1933 (the “Securities
      Act”), are as follows:




On
      March
      13, 2006, Janel authorized the issuance to Strategic Growth International,
      Inc.
      (“SGI”) of 180,000 unregistered shares of Janel’s $.001 par value common stock,
      18,000 shares to Karl Birkenfeld, and 2,000 shares to Westcap Securities, Inc.
      The shares were valued at $1.02 per share. SGI was also issued a warrant to
      purchase up to 400,000 shares of Janel common stock exercisable from February
      1,
      2007 to October 2, 2010 at an exercise price of $1.02 per share. The 200,000
      Janel shares issued to SGI and its associates are subject to a lock-up
      agreement. The 400,000 Janel shares issuable upon exercise of the warrants
      are
      subject to antidilution provisions and also have limited registration rights.
      The shares and warrants were issued as part of the compensation due to SGI
      pursuant to an agreement with respect to the provision of consulting services
      with regard to financial and investor relations for a term which began October
      3, 2005 and ended October 2, 2006. The lock-up provisions require the holders
      to
      refrain from selling, transferring, hypothecating or otherwise disposing of
      their Janel shares until February 1, 2007.





The
      registration rights of the 400,000 Janel shares issuable upon exercise of the
      warrant provide the holders with the right to have their shares 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
      during the entire term of the warrant.





The
      amount and terms of the issuance of the Janel shares and the warrant were
      determined by arms-length negotiation between the parties. There are no material
      relationships between Janel or its respective officers, directors, affiliates
      and principal shareholders, and the officers, directors, and affiliates of
      SGI.




Exemption
      from registration under the Securities Act is claimed for the sales of common
      stock referred to above in reliance upon the exemption afforded by Section
      4(2)
      of the Securities Act for transactions not involving a public offering. Each
      certificate evidencing such shares of common stock bears an appropriate
      restrictive legend, and “stop transfer” orders are maintained on the company’s
      stock transfer records with respect to each of the holders of that common stock.
      None of the sales involved participation by an underwriter or a
      broker-dealer.




13


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




**Year
      Ended September 30,**




**2006**
            
            **2005**
            
            **2004**
            
            **2003**
            
            **2002**Freight
                Forwarding Revenues
            
            $
            77,220,070
            
            $
            73,484,334
            
            $
            69,981,639
            
            $
            56,916,276
            
            $
            44,848,442Net
                Income (Loss)
            
            $
            56,995
            
            $
            430,019
            
            $
            264,355
            
            $
            196,787
            
            $
            (120,923
            )Net
                Income (Loss) per common share
            
            $
            0.0034
            
            $
            0.0256
            
            $
            0.0157
            
            $
            0.0117
            
            $
            (0.0079
            )Total
                Assets
            
            $
            6,743,091
            
            $
            6,731,129
            
            $
            7,030,489
            
            $
            5,798,260
            
            $
            4,726,296Long-Term
                Obligations
            
            $
            84,905
            
            $
            92,140
            
            $
            100,530
            
            $
            78,568
            
            $
            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.




14


**Overview**




The
      following discussion and analysis addresses the results of operations for the
      fiscal year ended September 30, 2006, as compared to the results of operations
      for the fiscal year ended September 30, 2005; the fiscal year ended September
      30, 2005 as compared to the results of operations for the fiscal year ended
      September 30, 2004; and the results of operations for the fiscal year ended
      September 30, 2004, as compared to the results of operations for the fiscal
      year
      ended September 30, 2003. 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, 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.




15


**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.




16


**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.




**Fiscal
      Year Ended September 30, 2004 Compared to Fiscal Year Ended September 30,
      2003**




**Revenue.** ****** Total
      revenue for fiscal 2004 was a record $69,981,639, as compared to $56,916,276
      for
      fiscal 2003, a year-over-year increase of $13,065,363, or 23.0%. The increase
      in
      revenue was primarily due to the general improvement in international trade
      during fiscal 2004 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 2004, the company
      substantially increased its overall business activities with existing clients
      as
      well as through the addition of new clients. Net revenue in fiscal 2004 was
      a
      record $6,940,462, an increase of $624,485, or 9.9%, as compared to $6,315,977
      in fiscal 2003.




**Forwarding
      Expense.** For
      fiscal year 2004, forwarding expense increased by $12,440,878, or 24.6%, to
      $63,041,177 as compared to $50,600,299 for fiscal year 2003. Forwarding expense
      increased year-over-year at a slightly higher percentage than revenue because,
      in fiscal 2004, a somewhat higher proportion of the company’s total shipments
      utilized ocean freight, for which the company earns slightly lower margins
      than
      for air-freight.




**Selling,
      General and Administrative Expense.** Selling,
      general and administrative expense
      increased $367,015, or 6.2%, to $6,323,606 in fiscal 2004, as compared to
      $5,956,591 in fiscal 2003. However, as a percentage of revenue, SG&A expense
      in fiscal 2004 was 9.03%, an improvement of 143 basis points as compared to
      10.46% as a percentage of revenue in fiscal 2003.




17


**Income
      (Loss) Before Taxes.** Income
      before taxes in fiscal 2004 was a record $468,955, which was less than income
      before other items for the period, primarily as a result a charge of $119,160
      taken in the fiscal fourth quarter reflecting costs related to abandoned
      business acquisitions. Nonetheless, this represented a year-to-year improvement
      of $112,668., or 31.6%, as compared to income before taxes of $356,287 in fiscal
      2003.




**Income
      Taxes.** The
      effective income tax rate in both fiscal 2004 and fiscal 2003 generally reflects
      the U.S. federal statutory rate and applicable state income taxes.




**Net
      Income (Loss).** ****** For
      fiscal 2004, Janel reported record net income of $264,355, an increase of
      $67,568, or 34.3%, as compared to the reported net income of $196,787 in fiscal
      2003. Janel’s net profit margin (net income as a percent of net revenue) was
      3.81% in fiscal 2004, an improvement of 69 basis points as compared to 3.12%
      in
      fiscal 2003.




**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, 2006, Janel’s net working capital
      (total current assets less total current liabilities) increased by $567,438,
      primarily as a result of a increase in cash and cash equivalents of
      $548,714.




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 $478,858. 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.




At
      September 30, 2005, cash decreased by $494,269 to $793,238 from $1,287,507
      at
      September 30, 2004. For the 12 months ended September 30, 2005, Janel’s primary
      source of cash was its net income of $430,019. In operating activities, the
      company used cash primarily to finance an increase in its accounts receivable
      by
      $53,879, which was more than offset by an increase in accounts payable and
      accrued expenses of $71,152. During fiscal 2005, net cash was also used in
      investing activities represented by the acquisition of property and equipment
      in
      the amount of $227,320. For financing activities, Janel decreased cash by
      $808,390 primarily through the repayment in full of a bank note payable in
      the
      amount of $800,000.




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 , 2006,
      Janel had $1,500,000 of available borrowing under its line of credit, bearing
      interest at prime less one-half of one percent (0.5%) per annum, collateralized
      by substantially all the assets of Janel and personal guarantees by certain
      shareholders of the company. 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.





18


**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.




Based
      upon the results for the fiscal year ended September 30, 2006, and its current
      operations, Janel conservatively projects that gross revenue from its currently
      existing accounts and businesses for its fiscal year ending September 30, 2007
      will grow by approximately 4% to approximately $80 million.




In
      addition, Janel is progressing with the implementation of its business plan
      and
      strategy to grow its revenue and profitability for fiscal 2007 and beyond
      through other avenues. The company’s strategy for growth includes plans to: open
      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
      2007 will be greater than its gross revenue for fiscal 2006, and that
      profitability will be commensurately greater than Janel’s fiscal 2006 results,
      as well.





**Contractual
      Obligations and Commitments**





The
      following table presents, as of September 30, 2006, the company’s significant
      fixed and determinable contractual obligations, by payment date. Further
      discussion of the nature of the obligations is included in Notes 7 and 11 to
      the
      Consolidated Financial Statements:




19




Years
                Ended September 30,2007
            
            2008
            
            2009
            
            2010
            
            2011Long
                term debt due as follows (1):
            
            $
            7,244
            
            $
            3,795
            
            $
            2,542Operating
                lease obligations (2)
            
            $
            290,000
            
            $
            232,000
            
            $
            214,400
            
            $
            55,000


________________


(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.





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.





20


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.





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.




21


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.





**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
      Securities and Exchange Commission, 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




22


**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
            
            62
            
            President,
                Chief OperatingOfficer
                and DirectorJames
                N. Jannello
            
            62
            
            Executive
                Vice President,Chief
                Executive Officer and DirectorWilliam
                J. Lally
            
            53
            
            DirectorNoel
              J. Jannello
            
            35
            
            Vice
              PresidentRuth
                Werra
            
            65
            
            SecretaryLinda
                Bieler
            
            45
            
            Controller
                and Chief Financial and Accounting
                Officer







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 Vice President and operations executive since 2003. His
      principal function is the overseeing of the company's U.S. operations. Mr.
      Janello is a graduate of Bradley University (B.A., Advertising & Marketing,
      1993), and is the son of James N. Jannello.




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 2006.




23





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




**Summary
      Compensation Table**




The
      following table sets forth, for the fiscal years ended September 30, 2006,
      2005
      and 2004, 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.




Name
                  and Principal Position
              Year
              Salary
                  ($)
              Bonus
                  ($)
              Other
                  Annual Compensation ($)
              Awards,
                  Restricted Stock Awards ($)
              Securities
                  Under-lying Options /SARs
              Payouts,
                  LTIP Payouts (#)
              All
                  Other Compensation ($)Stephen
                  P. Cesarski (1) President and Chief Operating Officer
              2004
                2005
                2006
              161,689
                172,089
                179,889
              14,630
                0
              48,656(1)
                52,268(1)
                47,680(1)James
                  N. Jannello (2) Executive Vice President and Chief Executive
                  Officer
              2004
                2005
                2006
              166,780
                178,840
                187,475
              14,630
                0
              49,750(2)
                48,910(2)
                52,318(2)Noel
                  J. Jannello (3) Vice President
              2004
                2005
                2006
              132,873
                143,851
                164,460
              
              24,242(3)
                15,693(3)
                17,510(3)William
                  J. Lally (4) Director
              2004
                2005
                2006
              108,382
                109,382
                117,949
              20,000
                10,000
              13,112(4)
                13,715(4)
                13,153(4)





(1)
            Includes
                $15,259, $15,755 and $12,821 of medical insurance premiums paid on
                behalf
                of such individual for each of the fiscal years ended 2006, 2005
                and 2004,
                respectively, $30,248, $34,437 and $33,889 for automobile and
                automobile-related costs, including insurance, incurred on behalf
                of such
                individual for each of the fiscal years ended 2006, 2005 and 2004,
                respectively, and $2,173, $2,076 and $1,946 of 401K paid on behalf
                of such
                individual for each of the fiscal years ended 2006, 2005 and 2004,
                respectively.




24




(2)
            Includes
                $13,366, $12,435 and $10,132 of medical insurance premiums paid on
                behalf
                of such individual for each of the fiscal years ended 2006, 2005
                and 2004,
                respectively, $36,714, $34,334 and $37,623 for automobile and
                automobile-related costs, including insurance, incurred on behalf
                of such
                individual for each of the fiscal years ended 2006, 2005 and 2004,
                respectively, and $2,238, $2,141 and $1,995 of 401K paid on behalf
                of such
                individual for each of the fiscal years ended 2006, 2005 and 2004,
                respectively.





(3)
            Includes
                $5,995, $5,172 and $10,132 of medical insurance premiums paid on
                behalf of
                such individual for each of the fiscal years ended 2006, 2005 and
                2004,
                respectively, $10,025, $9,210 and $12,937 for automobile and
                automobile-related costs, including insurance, incurred on behalf
                of such
                individual for each of the fiscal years ended 2006, 2005 and 2004,
                respectively, and $1,487, $1,311 and $1,173 of 401K paid on behalf
                of such
                individual for each fiscal years ended 2006, 2005 and 2004, respectively.
                Noel J. Jannello is the son of James N.
                Janello.





(4)
            Includes
                $13,153, $13,715 and $13,112 for automobile and automobile-related
                costs,
                including insurance, incurred on behalf of such individual for each
                of the
                fiscal years ended 2006, 2005 and 2004,
                respectively







**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 December 29, 2006, 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
            
            
            *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 (6 persons)
            
            
            12,125,000
            
            
            71.14
            %


__________________________


*
      Less
      than one percent (1%)


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




25
 **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.




**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.




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.




26


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 current transfer agent is Executive Registrar and Transfer Agency,
      Inc., 3615 South Huron Street, Suite 104, Englewood, CO 80110.


.




**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. 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, 2006, James N. Jannello was indebted to the
      company in the aggregate sum of $139,357, and William J. Lally was indebted
      in
      the aggregate amount of $5,150. 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.




27




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




**Audit
      Fees**




The
      aggregate fees billed by Paritz & Company, P.A. for the annual
      audit were $25,000 and $25,000 for the fiscal years ended September 30,
      2006 and 2005, respectively,
      and their fees for review of
      the interim financial statements were $15,000 and $10,500 for the
      fiscal years ended September 30, 2006 and 2005, 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, 2006 and
      2005.




**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,
      2006 and 2005, other than audit services, were $3,700 in the fiscal year
      ended September 30, 2006 and $13,907 for the fiscal year ended September 30,
      2005. These “other fees” were for services related to abandoned
      acquisitions and tax services ($5,000 in each of the two fiscal
      years).





**PART
      IV**







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




**(a)**  **Financial
      Statements.**




Report
      of
      Independent Registered Accounting Firm




Consolidated
      Balance Sheets as at September 30, 2006 and 2005




Consolidated
      Statement of Operations for the Years Ended September 30, 2006, 2005 and
      2004




Consolidated
      Statement of Changes in Stockholders’ Equity for the Years Ended September 30,
      2006, 2005 and 2004




Consolidated
      Statement of Cash Flows for the Years Ended September 30, 2006, 2005 and
      2004




Notes
      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.**




2.1
            Acquisition
                Agreement dated July 6, 2005 by and among Janel World Trade, Ltd.,
                Freight
                Wings, Inc. and Harjinder P. Singh.**** (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.*
  28


3
                (ii)
            By-laws
                of Wine Systems Design, Inc. (predecessor name) adopted on September
                1,
                2000.*




4.
            Form
                of Series A Warrant Agreement dated March 10, 2006, and form of Series
                A
                Warrant.******




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.******




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.*******


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
                            thefiscal
                            year and fourth quarter ended September 30,
                            2005.*****


99.1
                  August
                      17, 2006 Janel World Trade, Ltd. press release regarding the
consolidated
                      financial results for the three and ninemonth
                      periods ended June 30,
                      2006.*******
  99.1
                        October
                            12, 2006 Janel World Trade, Ltd. press release regarding
                            adoption of
                            a stock buy back
                            program.********
  _________________________


*
            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.




**
            Incorporated
                by reference to Exhibits filed as part of the company’s Form 8-K report,
                filed July 18, 2002.




***
            Incorporated
                by reference to Exhibits filed as part of the company’s Form 8-K/A report,
                filed August 1, 2002.




****
            Incorporated
                by reference to Exhibits filed as part of the company’s Form 8-K/A report,
                filed July 12, 2005.




*****
            Incorporated
                by reference to Exhibits filed as part of the company’s Form 8-K report,
                filed January 12, 2006.




******
              Incorporated
                  by reference to Exhibits filed as part of the company’s Form 8-K report,
                  filed March 17, 2006.
  *******
                  Incorporated
                      by reference to Exhibits filed as part of the company’s Form 8-K report,
                      filed August 22, 2006.
  ********
                        Incorporated
                            by reference to Exhibits filed as part of the company’s Form 8-K report,
                            filed October 16, 2006.


**(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.




29


**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.




JANEL
              WORLD TRADE,
              LTD.December 29, 2006
            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
            
            December
                29, 2006James
                N. Jannello
            
            Executive
                Officer and Director/s/
                Stephen P. Cesarski
            
            President,
                Chief Operating Officer
            
            December
                29, 2006Stephen
                P. Cesarski
            
            and
                Director/s/
                William J. Lally
            
            Director
            
            December
                29, 2006William
                J. Lally/s/
                Linda Bieler
            
            Controller
                and Chief Financial and
            
            December
                29, 2006Linda
                Bieler
            
            Accounting
                Officer/s/
                Ruth Werra
            
            Secretary
            
            December
                29, 2006Ruth
                Werra






***Paritz
        & Company, P.A.***


**JANEL
                    WORLD TRADE LTD. AND SUBSIDIARIES**
                  
                  CONSOLIDATED
                    FINANCIAL STATEMENTS
                  WITH
                  REPORT
                    OF INDEPENDENT REGISTERED ACCOUNTING FIRM
                  
                  YEARS
                      ENDED SEPTEMBER 30, 2006 AND 2005
 
 
 **Paritz
                  & Company, P.A.**
              15
                  Warren Street, Suite 25
                Hackensack,
                  New Jersey 07601
                (201)342-7753
                Fax:
                  (201) 342-7598
                E-Mail:
                  paritz @paritz.comCertified
                  Public Accountants
 
 
 
 **REPORT
          OF INDEPENDENT REGISTERED ACCOUNTING FIRM**
 
 
 
 Board
          of
          Directors
 Janel
          World Trade Ltd. and Subsidiaries
 Jamaica,
          New York
 
  We
          have
          audited the accompanying consolidated balance sheets of Janel World Trade
          Ltd.
          and Subsidiaries as of September 30, 2006 and 2005 and the related consolidated
          statements of operations, changes in stockholders’ equity and cash flows for
          each of the three years in the period ended September 30, 2006. These financial
          statements are the responsibility of the Company’s management. Our
          responsibility is to express an opinion on these financial statements based
          on
          our audits.
  We
          conducted our audits in accordance with the standards of the Public Company
          Accounting Oversight Board (United States). Those standards require that
          we plan
          and perform the audits to obtain reasonable assurance about whether the
          financial statements are free of material misstatement. An audit includes
          examining, on a test basis, evidence supporting the amounts and disclosures
          in
          the financial statements. An audit also includes assessing the accounting
          principles used and significant estimates made by management, as well as
          evaluating the overall financial statement presentation. We believe that
          our
          audits provide a reasonable basis for our opinion.
  In
          our
          opinion, the consolidated financial statements referred to above present
          fairly,
          in all material respects, the financial position of Janel World Trade Ltd.
          and
          Subsidiaries as of September 30, 2006 and 2005 and the results of its operations
          and its cash flows for each of the three years in the period ended September
          30,
          2006 in conformity with accounting principles generally accepted in the
          United
          States of America.
  ***Paritz
          & Company, P.A.***
 
  /s/
          Paritz & Company P.A.
 Hackensack,
          New Jersey
 December
          7, 2006
 F-1




**JANEL
        WORLD TRADE LTD. AND SUBSIDIARIES**
  CONSOLIDATED
                  BALANCE SHEETS**SEPTEMBER
                  30****2006**
              
              **2005****ASSETS****CURRENT
                  ASSETS**Cash
                  and cash equivalents**(
                  Note 1)**
              
              $
              1,341,952
              
              $
              793,238Accounts
                  receivable, net of allowance fordoubtful
                  accounts of $28,350 in 2006 and $26,067 in 2005
              
              
              4,809,324
              
              
              5,334,314Marketable
                  securities**(Note
                  3)**
              
              
              59,222
              
              
              55,742Loans
                  receivable - officers**(Note
                  4)**
              
              
              144,530
              
              
              146,192-
                  other
              
              
              33,868
              
              
              33,835Prepaid
                  expenses and sundry current assets
              
              
              126,678
              
              
              76,120**TOTAL
                  CURRENT ASSETS**
              
              
              **6,515,574**
              
              
              **6,439,441****Property
                  and equipment, net****(Note
                  5)**
              
              
              **178,099**
              
              
              **242,270****OTHER
                  ASSETS:**Security
                  deposits
              
              
              49,418
              
              
              49,418**TOTAL
                  OTHER ASSETS**
              
              
              **49,418**
              
              
              **49,418****$**
              **6,743,091**
              
              **$**
              **6,731,129****LIABILITIES
                  AND STOCKHOLDERS’ EQUITY****CURRENT
                  LIABILITIES**Accounts
                  payable
              
              $
              2,714,086
              
              $
              3,192,944Accrued
                  expenses and taxes payable
              
              
              185,563
              
              
              196,861Current
                  portion of long-term debt**(Note
                  7)**
              
              
              7,244
              
              
              8,393**TOTAL
                  CURRENT LIABILITIES**
              
              
              **2,906,893**
              
              
              **3,398,198****OTHER
                  LIABILITIES**:Long-term
                  debt**(Note
                  7)**
              
              
              6,337
              
              
              13,572Deferred
                  compensation
              
              
              78,568
              
              
              78,568**TOTAL
                  OTHER LIABILITIES**
              
              
              **84,905**
              
              
              **92,140****STOCKHOLDERS’
                  EQUITY (Note 8)**
              
              
              **3,751,293**
              
              
              **3,240,791****TOTAL
                  LIABILITIES AND STOCKHOLDERS’ EQUITY**
              
              **$**
              **6,743,091**
              
              **$**
              **6,731,129**
 
 The
        accompanying notes are an integral part of these consolidated financial
        statements  F-2
 **JANEL
        WORLD TRADE LTD. AND SUBSIDIARIES**
  CONSOLIDATED
                  STATEMENTS OF
                  OPERATIONS**YEAR
                  ENDED SEPTEMBER
                  30,****2006**
              
              
              **2005**
              
              
              **2004****REVENUES
                  (Note 1)**
              
              **$**
              **77,220,070**
              
              **$**
              **73,484,334**
              
              **$**
              **69,981,639****COSTS
                  AND EXPENSES:**Forwarding
                  expenses
              
              
              69,167,248
              
              
              65,873,673
              
              
              63,041,177Selling,
                  general and administrative
              
              
              7,299,039
              
              
              6,778,569
              
              
              6,323,606Stock
                  based compensation**(Note
                  8)**
              
              
              452,360
              
              
              -
              
              
              -**TOTAL
                  COSTS AND EXPENSES**
              
              
              **76,918,647**
              
              
              **72,652,242**
              
              
              **69,364,783****INCOME
                  BEFORE OTHER ITEMS**
              
              
              **301,423**
              
              
              **832,092**
              
              
              **616,856****OTHER
                  ITEMS:**Costs
                  related to abandoned businessacquisitions**(Note
                  2)**
              
              
              -
              
              
              (50,098
              )
              
              (119,160
              )Interest
                  and dividend income
              
              
              28,212
              
              
              14,494
              
              
              14,636Interest
                  expense
              
              
              (1,140
              )
              
              (21,619
              )
              
              (43,377
              )**TOTAL
                  OTHER ITEMS**
              
              
              **27,072**
              
              
              **(57,223**
              **)**
              
              **(147,901**
              **)****INCOME
                  BEFORE INCOME TAXES**
              
              
              **328,495**
              
              
              **774,869**
              
              
              **468,955**Income
                  taxes**(Note
                  9)**
              
              
              271,500
              
              
              344,850
              
              
              204,600**NET
                  INCOME**
              
              **$**
              **56,995**
              
              **$**
              **430,019**
              
              **$**
              **264,355****OTHER
                  COMPREHENSIVE INCOME****NET
                  OF TAX:**Unrealized
                  gain from availablefor
                  sale securities
              
              $
              1,147
              
              $
              7,859
              
              $
              4,691Basic
                  and diluted earnings per share
              
              $
              .0034
              
              $
              .02553
              
              $
              .01570Fully
                  diluted earnings per share
              
              $
              .0033
              
              $
              .02553
              
              $
              .01570Weighted
                  number of shares outstanding
              
              
              16,955,329
              
              
              16,843,000
              
              
              16,843,000Fully
                  diluted number of shares outstanding
              
              
              17,179,986
              
              
              16,843,000
              
              
              16,843,000
 
 The
        accompanying notes are an integral part of these consolidated financial
        statements
  F-3
 **JANEL
        WORLD TRADE LTD. AND SUBSIDIARIES**
 
 CONSOLIDATED
                  STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITYACCUMULATEDADDITIONAL
              
              
              
              
              
              OTHERCAPITAL
                  STOCK
              
              
              PAID-IN
              
              
              RETAINED
              
              
              COMPREHENSIVESHARES
              
              
              $
              
              
              CAPITAL
              
              
              EARNINGS
              
              
              GAIN
                  (LOSS)
              
              
              TOTAL**BALANCE
                  - SEPTEMBER 30, 2003**
              
              
              **16,843,000**
              
              
              **16,843**
              
              
              **501,003**
              
              
              **2,026,955**
              
              
              **(10,934**
              **)**
              
              **2,533,867**Net
                  income
              
              
              -
              
              
              -
              
              
              -
              
              
              264,355
              
              
              -
              
              
              264,355Other
                  comprehensive gains:Unrealized
                  gains on available-for-salemarketable
                  securities
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              4,691
              
              
              4,691**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-salemarketable
                  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-salemarketable
                  securities
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              1,147
              
              
              1,147**BALANCE
                  - SEPTEMBER 30, 2006**
              
              
              **17,043,000**
              
              **$**
              **17,043**
              
              **$**
              **953,163**
              
              **$**
              **2,778,324**
              
              **$**
              **2,763**
              
              **$**
              **3,751,293**
 
 The
        accompanying notes are an integral part of these consolidated financial
        statements
 
 F-4
  **JANEL
        WORLD TRADE LTD. AND SUBSIDIARIES**
  CONSOLIDATED
                  STATEMENTS OF CASH
                  FLOWS**YEAR
                  ENDED SEPTEMBER 30,****2006**
              
              **2005**
              
              **2004****OPERATING
                  ACTIVITIES:**Net
                  income
              
              $
              56,995
              
              $
              430,019
              
              $
              264,355*Adjustments
                  to reconcile net income to net**cash
                  provided by operating activities:*Depreciation
                  and amortization
              
              
              107,649
              
              
              96,866
              
              
              63,375Stock
                  based compensation
              
              
              452,360
              
              
              -
              
              
              -*Changes
                  in operating assets and liabilities:*Accounts
                  receivable
              
              
              524,990
              
              
              (53,879
              )
              
              (972,613
              )Prepaid
                  expenses and sundry current assets
              
              
              (50,558
              )
              
              (8,596
              )
              
              (9,680
              )Security
                  deposits
              
              
              -
              
              
              510
              
              
              1,426Accounts
                  payable and accrued expenses
              
              
              (490,156
              )
              
              71,152
              
              
              936,668**NET
                  CASH PROVIDED BY OPERATING ACTIVITIES**
              
              
              **601,280**
              
              
              **536,072**
              
              
              **283,531****INVESTING
                  ACTIVITIES:**Acquisition
                  of property and equipment, net
              
              
              (43,478
              )
              
              (227,320
              )
              
              (72,261
              )Purchase
                  of marketable securities
              
              
              (2,333
              )
              
              (1,746
              )
              
              (353
              )**NET
                  CASH USED IN INVESTING ACTIVITIES**
              
              
              **(45,811**
              **)**
              
              **(229,066**
              **)**
              
              **(72,614**
              **)****FINANCING
                  ACTIVITIES:**Repayment
                  of long-term debt, net
              
              
              (8,384
              )
              
              (8,390
              )
              
              26,515Repayment
                  of bank borrowings
              
              
              -
              
              
              (800,000
              )
              
              -Collection
                  (issuance) of loans receivable
              
              
              1,629
              
              
              7,115
              
              
              (10,331
              )**NET
                  CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES**
              
              
              **(6,755**
              **)**
              
              **(801,275**
              **)**
              
              **16,184****INCREASE
                  (DECREASE) IN CASH AND CASH EQUIVALENTS**
              
              
              **548,714**
              
              
              **(494,269**
              **)**
              
              **227,101****CASH
                  AND CASH EQUIVALENTS - BEGINNING OF YEAR**
              
              
              **793,238**
              
              
              **1,287,507**
              
              
              **1,060,406****CASH
                  AND CASH EQUIVALENTS - END OF YEAR**
              
              **$**
              **1,341,952**
              
              **$**
              **793,238**
              
              **$**
              **1,287,507****SUPPLEMENTAL
                  DISCLOSURES OF CASH FLOW INFORMATION:***Cash
                  paid during the year for:*Interest
              
              $
              1,140
              
              $
              21,619
              
              $
              43,377Income
                  taxes
              
              $
              332,164
              
              $
              286,994
              
              $
              173,277
 
 The
        accompanying notes are an integral part of these consolidated financial
        statements
  F-5
  **JANEL
        WORLD TRADE LTD. AND SUBSIDIARIES**
 
 NOTES
        TO
        CONSOLIDATED FINANCIAL STATEMENTS
 
 SEPTEMBER
                  30, 2006 AND 2005
 
 ******1**SUMMARY OF SIGNIFICANT ACCOUNTING
          POLICIES****
  ***Business
        description***
 
 The
        Company 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.
  F-6
  
 
  ***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.
  F-7
  
  ***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, 2006, accumulated other comprehensive income consists of
        unrealized gains on unrestricted available-for-sale marketable equity
        securities.
 
 **2** **ABANDONED
        ACQUISITIONS**
 
 During
        the years ended September 30, 2005 and 2004 the Company negotiated several
        business acquisitions. In connection therewith, the Company incurred legal
        and
        accounting fees aggregating $50,098 and $119,160, respectively. Since these
        transactions have 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, 2006:Mutual
                  Funds
              
              $
              58,075
              
              $
              1,147
              
              $
              59,222As
                  of September 30, 2005:Mutual
                  Funds
              
              $
              54,126
              
              $
              1,616
              
              $
              55,742
 
 **4 
          LOANS RECEIVABLE - OFFICERS**
 The
        loans
        receivable - officers bear interest at 4% per annum and are due on
        demand.
 
 F-8
 
 **** **5 
          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
                  30,2006
              
              
              2005
              
              
              LifeFurniture
                  and fixtures
              
              $
              74,102
              
              $
              79,426
              
              
              5-7
                  yearsComputer
                  equipment
              
              
              407,822
              
              
              517,697
              
              
              5
                  years481,924
              
              
              597,123Less
                  accumulated depreciation andamortization
              
              
              303,825
              
              
              354,853$
              178,099
              
              $
              242,270
 
 **6** **NOTE
        PAYABLE - BANK**
 
 The
        Company has an available line of credit with a bank pursuant to which it
        may
        borrow up to $1,500,000. Advances under this facility bear interest at prime
        minus 1⁄2%. The availability of credit under this line at no time shall exceed the
        borrowing base for this line, which is calculated as 80% of eligible accounts
        receivable. In addition, all borrowings under this agreement are personally
        guaranteed by certain stockholders of the Company.
 
 **7** **LONG-TERM
        DEBT**
 
 Long-term
        debt consists of various capitalized lease obligations payable in monthly
        installments of approximately $700 inclusive of interest at 5% to 11% per
        annum.
        These leases are collateralized by security interests in certain property
        and
        equipment.
 
 **8** **STOCKHOLDERS’
        EQUITY**
 
 Janel
        is
        authorized to issue 225,000,000 shares of common stock, par value
        $.001.
 
 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.
 
 **9** **INCOME
        TAXES**
 
 Income
        taxes consist of the following:
  Year
                  Ended September 30,2006
              
              
              2005
              
              
              2004Federal
              
              $
              182,000
              
              $
              234,600
              
              $
              152,000State
                  and local
              
              
              89,500
              
              
              110,250
              
              
              52,600$
              271,500
              
              $
              344,850
              
              $
              204,600
 
 The
        reconciliation of income tax computed at the Federal statutory rate to the
        provision for income taxes is as follows:
  Year
                  Ended September 30,2006
              
              
              2005
              
              
              2004Federal
                  taxes at statutory rates
              
              $
              111,700
              
              $
              263,500
              
              $
              159,500Non-deductible
                  expenses
              
              
              100,700
              
              
              9,500
              
              
              10,400State
                  and local taxes, net of Federal benefit
              
              
              59,100
              
              
              71,850
              
              
              34,700$
              271,500
              
              $
              344,850
              
              $
              204,600
  F-9
  
 
 **10** **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, 2006, 2005 and 2004 aggregated approximately $25,000,
        $23,000, and $23,000, respectively.
 
 
 **11** **RENTAL
        COMMITMENTS**
 
 The
        Company conducts its operations from leased premises. Rental expense on
        operating leases for the years ended September 30, 2006, 2005 and 2004 was
        approximately $324,000, $311,000 and $294,000, respectively.
 
 Future
        minimum lease commitments (excluding renewal options) under noncancelable
        leases
        are as follows;
 
 Year
                  ended September 30,
              2007
              $
              290,0002008
              
              232,0002009
              
              214,4002010
              
              55,000
 
 **12** **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.
 
 
 ***(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. 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.
 
 
 **13** **SUBSEQUENT
        EVENT**
 
 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.
 
 F-10