job_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

☐	QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2025

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 1-05707

GEE GROUP INC.

(Exact name of registrant as specified in its charter)

Illinois

36-6097429

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification Number)

7751 Belfort Parkway, Suite 150, Jacksonville, FL 32256

(Address of principal executive offices)

(630) 954-0400

(Registrant’s telephone number, including area code)

___________________________________________________________

(Former name, former address and former fiscal year, if changed since last report)

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

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, no par value	JOB	NYSE American

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging Growth Company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares outstanding of the registrant’s common stock as of May 13, 2025 was 109,413,244.

GEE GROUP INC.

Form 10-Q

For the Quarter Ended March 31, 2025

INDEX

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS		3

PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements (unaudited)	4
	Condensed Consolidated Balance Sheets	4
	Condensed Consolidated Statements of Operations	5
	Condensed Consolidated Statements of Shareholders’ Equity	6
	Condensed Consolidated Statements of Cash Flows	7
	Notes to Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	30
Item 4.	Controls and Procedures	30

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	31
Item 1A.	Risk Factors	31
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	31
Item 3.	Defaults Upon Senior Securities	31
Item 4.	Mine Safety Disclosures	31
Item 5.	Other Information	31
Item 6.	Exhibits	32
	Signatures	33

Table of Contents

CAUTIONARY STATEMENT REGARDING FORWARD LOOKING STATEMENTS

As a matter of policy, the Company does not provide forecasts of future financial performance. The statements made in this quarterly report on Form 10-Q, which are not historical facts, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements often contain or are prefaced by words such as “anticipate”, "believe", “may”, “might”, “could”, "will", “shall”, “plan” and "expect", or similar expressions of future tense. These statements are based on current expectations, estimates and projections about our business based, in part, on assumptions made by management. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. As a result of a number of factors, our actual results could differ materially from those set forth in the forward-looking statements. Certain factors that might cause the Company's actual results to differ materially from those in the forward-looking statements include, without limitation, general business conditions, economic uncertainties, changed socioeconomic norms following the Coronavirus Pandemic (“COVID-19”), the demand for the Company's services, competitive market pressures, the ability of the Company to attract and retain qualified personnel for regular full-time placement and contract assignments, the possibility of incurring liability for the Company's business activities, including the activities of its contract employees and events affecting its contract employees on client premises, cyber risks, including network security intrusions and/or loss of information, and the ability to attract and retain qualified corporate and branch management, as well as those risks discussed in the Company's Annual Report on Form 10-K for the year ended September 30, 2024, and in other documents which we file with the Securities and Exchange Commission (“SEC”). Any forward-looking statements speak only as of the date on which they are made, and the Company is under no obligation to (and expressly disclaims any such obligation to) and does not intend to update or alter its forward-looking statements whether as a result of new information, future events or otherwise.

Table of Contents

Part I -FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (unaudited)

GEE GROUP INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)

(Amounts in thousands)

	March 31, 2025			September 30, 2024
ASSETS
CURRENT ASSETS:
Cash	$	18,501		$	20,735
Accounts receivable, less allowances ($133 and $144, respectively)		11,873			12,751
Prepaid expenses and other current assets		889			762
Current assets of discontinued operations		1,209			1,153
Total current assets		32,472			35,401
Property and equipment, net		438			546
Goodwill		24,607			46,008
Intangible assets, net		1,047			834
Deferred tax assets, net		-			9,495
Right-of-use assets		3,035			3,115
Other long-term assets		171			295
Noncurrent assets of discontinued operations		-			208
TOTAL ASSETS	$	61,770		$	95,902

LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable	$	1,876		$	1,960
Accrued compensation		4,346			5,026
Current operating lease liabilities		1,042			1,090
Current portion of notes payable		196			-
Other current liabilities		590			899
Current liabilities of discontinued operations		313			347
Total current liabilities		8,363			9,322
Deferred taxes, net		288			-
Noncurrent operating lease liabilities		2,240			2,254
Notes payable		196			-
Other long-term liabilities		42			82
Noncurrent liabilities of discontinued operations		-			33
Total liabilities		11,129			11,691

Commitments and contingencies (Note 15)

SHAREHOLDERS' EQUITY:
Common stock, no-par value; authorized - 200,000 shares; 114,900 shares issued and 109,413 shares outstanding at March 31, 2025 and September 30, 2024		113,370			113,129
Accumulated deficit		(59,543	)		(25,732	)
Treasury stock; at cost - 5,487 shares at March 31, 2025 and September 30, 2024		(3,186	)		(3,186	)
Total shareholders' equity		50,641			84,211
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	61,770		$	95,902

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

Table of Contents

GEE GROUP INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

(Amounts in thousands except per share data)

	Three Months Ended						Six Months Ended
	March 31,						March 31,
	2025			2024			2025			2024
NET REVENUES:
Contract staffing services	$	21,495		$	23,134		$	43,009		$	48,216
Direct hire placement services		3,000			2,455			5,511			5,510
NET REVENUES		24,495			25,589			48,520			53,726

Cost of contract services		16,135			17,196			32,234			35,997
GROSS PROFIT		8,360			8,393			16,286			17,729

Selling, general and administrative expenses		9,305			9,556			17,744			19,738
Depreciation expense		50			66			105			138
Amortization of intangible assets		225			719			430			1,439
Goodwill impairment charge		22,000			-			22,000			-
LOSS FROM OPERATIONS		(23,220	)		(1,948	)		(23,993	)		(3,586	)
Interest expense		(89	)		(65	)		(155	)		(134	)
Interest income		139			179			294			369
LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAX PROVISION		(23,170	)		(1,834	)		(23,854	)		(3,351	)
Provision for income tax (expense) benefit attributable to continuing operations		(9,786	)		915			(9,786	)		915
LOSS FROM CONTINUING OPERATIONS		(32,956	)		(919	)		(33,640	)		(2,436	)
Loss from discontinued operations, net of tax		(163	)		(89	)		(171	)		(127	)
CONSOLIDATED NET LOSS	$	(33,119	)	$	(1,008	)	$	(33,811	)	$	(2,563	)

WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC AND DILUTED		109,413			108,772			109,413			109,339

BASIC AND DILUTED LOSS PER SHARE
From continuing operations	$	(0.30	)	$	(0.01	)	$	(0.31	)	$	(0.02	)
From discontinued operations	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)
Consolidated net loss per share	$	(0.30	)	$	(0.01	)	$	(0.31	)	$	(0.02	)

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

Table of Contents

GEE GROUP INC.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (unaudited)

(Amounts in thousands)

													Total
	Common Stock				Treasury Stock					Accumulated			Shareholders'
	Shares		Amount		Shares		Amount			Deficit			Equity
Balance, September 30, 2024		114,900	$	113,129		5,487	$	(3,186	)	$	(25,732	)	$	84,211
Share-based compensation		-		118		-		-			-			118
Net loss		-		-		-		-			(692	)		(692	)
Balance, December 31, 2024		114,900	$	113,247		5,487	$	(3,186	)	$	(26,424	)	$	83,637

Share-based compensation		-		123		-		-			-			123
Net loss		-		-		-		-			(33,119	)		(33,119	)
Balance, March 31, 2025		114,900	$	113,370		5,487	$	(3,186	)	$	(59,543	)	$	50,641

													Total
	Common Stock				Treasury Stock					Accumulated			Shareholders'
	Shares		Amount		Shares		Amount			Deficit			Equity
Balance, September 30, 2023		114,900	$	112,915		3,412	$	(1,984	)	$	(1,630	)	$	109,301
Purchase of treasury stock		-		-		2,717		(1,575	)		-			(1,575	)
Share-based compensation		-		153		-		-			-			153
Net loss		-		-		-		-			(1,555	)		(1,555	)
Balance, December 31, 2023		114,900	$	113,068		6,129	$	(3,559	)	$	(3,185	)	$	106,324

Share-based compensation		-		157		-		-			-			157
Net loss		-		-		-		-			(1,008	)		(1,008	)
Balance, March 31, 2024		114,900	$	113,225		6,129	$	(3,559	)	$	(4,193	)	$	105,473

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

Table of Contents

GEE GROUP INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

(Amounts in thousands)

	Six Months Ended
	March 31,
	2025			2024
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(33,811	)	$	(2,563	)
Adjustments to reconcile net loss to cash used in operating activities:
Loss on disposal of assets		3			-
Depreciation and amortization		540			1,600
Amortization of operating lease right-of-use assets		640			731
Goodwill impairment charge		22,000			-
Share-based compensation		241			310
Provisions for credit losses		10			50
Deferred income taxes		9,783			(695	)
Amortization of debt issuance costs		76			76
Changes in operating assets and liabilities, net of effect of acquisition:
Accounts receivable		1,514			4,184
Other assets		(5	)		(545	)
Accounts payable		(443	)		(228	)
Accrued compensation		(742	)		(1,128	)
Operating lease liabilities		(624	)		(764	)
Other liabilities		(323	)		(605	)
Net cash (used in) provided by operating activities		(1,141	)		423

CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property and equipment		(4	)		(38	)
Business acquisition, net of cash acquired		(968	)		-
Net cash used in investing activities		(972	)		(38	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Purchases of treasury stock		-			(1,575	)
Payments on finance leases		(39	)		(81	)
Net cash used in financing activities		(39	)		(1,656	)

Net change in cash		(2,152	)		(1,271	)

Cash at beginning of period		20,828			22,471

Cash at end of period		18,676			21,200
Less cash from discontinued operations		(175	)		(303	)
Cash from continuing operations at end of period	$	18,501		$	20,897

SUPPLEMENTAL CASH FLOW INFORMATION:

Cash paid for interest	$	78		$	62
Cash paid for taxes		10			102

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

Table of Contents

GEE GROUP INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Amounts in thousands except per share data, unless otherwise stated)

1. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Article 8 of Regulation S-X. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete consolidated financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the six-month period ended March 31, 2025 are not necessarily indicative of the results that may be expected for the year ending September 30, 2025. The unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended September 30, 2024 as filed on December 19, 2024.

A discontinued operation is a component of an entity that has either been disposed of, or that is classified as held for sale, which represents a strategic shift that has an effect on an entity’s operation and financial results. In accordance with U.S. GAAP, the assets and liabilities of discontinued operations are presented separately on the Company’s unaudited condensed consolidated balance sheets for all periods presented. Net losses from discontinued operations are reported as a separate component of net loss on the unaudited condensed consolidated statements of operations. Cash flows from discontinued operations are not reported separately on the unaudited condensed consolidated statements of cash flows. All footnotes included herein present only continuing operations and exclude amounts related to discontinued operations for all periods presented, unless otherwise stated.

Certain additional reclassifications have been made to the prior year’s condensed consolidated financial statements and/or related disclosures to conform to the current year’s presentation.

2. Business Acquisition

On January 3, 2025, the Company entered into a Stock Purchase Agreement (the “Purchase Agreement”) with Hornet Staffing, Inc., a Georgia corporation (“Hornet”) and its shareholders, and purchased 100 shares of its capital stock which represents 100% of the ownership interest in Hornet. Hornet is an Atlanta-based provider of staff augmentation services with national service capability. Hornet provides staffing solutions to many markets serving large scale, "blue chip" companies in the information technology ("IT"), professional and customer service staffing verticals.

The total consideration paid for the purchased shares was $1,500, consisting of (i) a $1,100 cash payment, and (ii) the issuance to its former shareholders of subordinated and unsecured promissory notes (the "Promissory Notes") totaling an aggregate initial principal amount of $400. Interest on the outstanding principal balances of the Promissory Notes is payable at a fixed rate of 5% per annum. Payments on the Promissory Notes shall be made annually with the first payment due on the first anniversary of the issuance dates and the second and final payment due on the second anniversary of the issuance date.

The Purchase Agreement also provides that for the initial two-year period after closing, Hornet is required to achieve an agreed upon minimum average gross profit measure equal to $720 for each of the two subsequent twelve-month periods (each twelve-month period being separately measured). If the average gross profit measure during either of the subsequent two years is less than the minimum required average gross profit, then the Company will reduce the remaining balance under the Promissory Notes proportionally by an amount equal to the amount of the shortfall; provided the Company may not deduct more than the amount due under the then current payment for the Promissory Notes and may not seek to claw back any previous payments made under the Notes.

The Purchase Agreement contains certain representations and warranties customary and standard for this type of transaction.

Table of Contents

GEE GROUP INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Amounts in thousands except per share data, unless otherwise stated)

The assets and liabilities of Hornet were recorded at their estimated fair values as of the closing date of the Purchase Agreement. The Promissory Notes were recorded net of discounts of $8 at the acquisition date. The following table summarizes the preliminary balance sheet at January 3, 2025:

Assets purchased	$	612
Liabilities assumed		362
Net assets purchased		250
Purchase consideration:
Cash paid at closing		1,100
Promissory notes, net		392
Intangible assets from purchase	$	1,242

An independent preliminary purchase price allocation and valuation has been performed to identify intangible assets acquired. The allocation to these intangible assets is as follows:

	Fair Value		Useful Life
Customer relationships	$	564	8 years
Tradename		68	10 years
Non-compete		11	2 years
Goodwill		599	Indefinite
Total intangible assets acquired	$	1,242

The following table represents the unaudited consolidated pro forma results of operations for the three and six-month periods ended March 31, 2025 and 2024 had the acquisition occurred on October 1, 2023, the first day of the most historic period reported in this Quarterly Report on Form 10-Q. This unaudited pro forma information does not purport to present what the Company’s actual results would have been had the acquisition occurred on October 1, 2023. This information is based on Hornet’s unaudited historical financial statements.

	Three Months Ended, March 31,						Six Months Ended, March 31,
	2025			2024			2025			2024
Net revenues	$	24,560		$	26,827		$	50,108		$	56,718
Cost of contract services		16,178			18,258			33,592			38,558
Gross profit		8,382			8,569			16,516			18,160
Selling, general and administrative expenses		9,319			9,671			17,896			20,076
Net loss		(32,949	)		(857	)		(33,563	)		(2,342	)

Basic and diluted loss per share	$	(0.30	)	$	(0.01	)	$	(0.31	)	$	(0.02	)

3. Discontinued Operations

On April 18, 2024, the Company’s Mergers and Acquisitions (“M&A”) committee of the Board of Directors completed its review of strategic alternatives recommended by an outside investment banking firm. This included recommendation of divesture of the Company’s Industrial Segment which was subsequently approved by the Company’s full Board of Directors on May 13, 2024. Management thereafter began the process of identifying and contacting potential buyers and expects to complete this divesture in 2025. As of March 31, 2025, the Company’s plan to sell its Industrial Segment met all the criteria for the first time to be reported as discontinued operations under U.S. GAAP, the final one being making the determination that the sale or other disposition would now be completed within twelve months.

Table of Contents

GEE GROUP INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Amounts in thousands except per share data, unless otherwise stated)

Assets and Liabilities of Discontinued Operations

The balances of assets and liabilities under the Industrial Segment as of March 31, 2025 and September 30, 2024 consisted of the following:

	March 31, 2025		September 30, 2024
Assets of discontinued operations:
Cash	$	175	$	93
Accounts receivable, net		829		996
Prepaid expenses and other current assets		33		64
Property and equipment, net		4		13
Right-of-use assets		144		138
Other long-term assets		24		57
Total assets of discontinued operations	$	1,209	$	1,361

Liabilities of discontinued operations:
Accounts payable	$	29	$	27
Accrued compensation		135		197
Current operating lease liabilities		97		105
Other current liabilities		4		18
Noncurrent operating lease liabilities		48		33
Total liabilities of discontinued operations	$	313	$	380

Net Loss from Discontinued Operations

Results of the Industrial Segment for the three and six-month periods ended March 31, 2025 and 2024, respectively, consisted of the following:

	Three Months Ended						Six Months Ended
	March 31,						March 31,
	2025			2024			2025			2024

Revenue	$	1,545		$	2,462		$	3,546		$	4,955
Expenses:
Cost of contract services		1,288			2,087			2,919			4,181
Selling, general and administrative expenses		418			450			794			874
Depreciation expense		2			12			4			23
Interest expense		-			2			-			4
Loss from discontinued operations before income taxes		(163	)		(89	)		(171	)		(127	)
Provision for income tax expense attributable to discontinued operations		-			-			-			-
Loss from discontinued operations, net of tax	$	(163	)	$	(89	)	$	(171	)	$	(127	)

Cash Flows from Discontinued Operations

There were no capital expenditures or other significant cash flows under the Industrial Segment during either of the six-month periods ended March 31, 2025 and 2024.

4. Recent Accounting Pronouncements

Recently Adopted

In June 2016, Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments-Credit Losses (Topic 326), which contains authoritative guidance amending how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The guidance requires the application of a current expected credit loss model, which is a new impairment model based on expected losses. The new guidance was effective for fiscal years beginning after December 15, 2022. ASU 2016-13 became effective for the Company on October 1, 2023. The new guidance was implemented during the quarter ended December 31, 2023, is applicable to the Company’s trade (accounts) receivable and did not have a material impact on its unaudited condensed consolidated financial statements taken as a whole.

Table of Contents

GEE GROUP INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Amounts in thousands except per share data, unless otherwise stated)

Not Yet Adopted

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280), which enhances prior reportable segment disclosure requirements in part by requiring entities to disclose significant expenses related to their reportable segments. The guidance also requires disclosure of the Chief Operating Decision Maker's (“CODM”) position for each segment and detail of how the CODM uses financial reporting to assess their segment’s performance. The new guidance is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. The Company has not yet determined the potential impact of implementation of the new guidance on its condensed consolidated financial statements taken as a whole.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740), which expands income tax disclosure requirements in part by requiring entities to disclose a reconciliation of their effective tax rates to statutory rates and provide disaggregation of taxes paid. The guidance also eliminates existing disclosure requirements related to anticipated changes in unrecognized tax benefits and temporary differences related to unrecorded deferred tax liabilities. The new guidance is effective for fiscal years beginning after December 15, 2024. The Company does not expect implementation of the new guidance to have a material impact on its consolidated financial statements and disclosures.

In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses (Subtopic 220-40), which expands expense disclosure requirements in part by requiring entities to provide tabular disclosure of the nature of expenses making up relevant captions on the face of the income statement. The guidance requires disclosure of the amounts making up each caption in categories such as inventory purchases, employee compensation, depreciation, intangible asset amortization, and depletion. The guidance also requires qualitative descriptions of other amounts included in each caption that are not separately disaggregated. The new guidance is effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027. The Company does not expect implementation of the new guidance to have a material impact on its consolidated financial statements and disclosures.

5. Cash and Cash Equivalents, Customer Concentrations, and Allowances for Credit Losses

Cash and Cash Equivalents

Highly liquid investments with a maturity of three months or less when purchased are considered to be cash equivalents. As of March 31, 2025 and September 30, 2024, there were no cash equivalents.

Cash deposit accounts are maintained at financial institutions and, at times, balances may exceed federally insured limits guaranteed by the FDIC. During 2023, the Company entered into enhanced deposit arrangements with two financial institutions in which monies are deposited through a brokerage account and are further placed on deposit by the broker amongst U.S. banks pre-screened by the broker in amounts per bank that do not exceed the individual $250 FDIC per depositor limit. The aggregate amount of all funds on deposit under these accounts was $14,804 and $14,515 as of March 31, 2025 and September 30, 2024, respectively. The Company also holds funds in various other bank accounts that may exceed FDIC insured limits. These uninsured amounts, in aggregate, were $2,949 and $5,194 as of March 31, 2025 and September 30, 2024, respectively. We have never experienced any material losses related to cash on deposit with banks.

Customer Concentrations

The Company’s single largest customer made up just over 10% of the Company’s consolidated revenues for the three and six-month periods ended March 31, 2025.

The Company has two customers that, in aggregate, made up approximately 26% and 27% of the consolidated accounts receivable balance as of March 31, 2025 and September 30, 2024, respectively. These two customers are offered extended payment terms due to the frequency and volume of our services that they utilize. Each maintains excellent creditworthiness and the Company has not historically experienced any losses related to these two customers.

Table of Contents

GEE GROUP INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Amounts in thousands except per share data, unless otherwise stated)

Allowance for Credit Losses

The Company extends credit to its various customers based on evaluation of the customer’s financial condition and ability to pay the Company in accordance with the payment terms. An allowance for credit losses is recorded as a charge to bad debt expense where collection is considered to be doubtful due to credit issues. The Company adopted the methodology under ASU 2016-13, Financial Instruments-Credit Losses (Topic 326), during the quarter ended December 31, 2023. The amendments in ASU 2016-13 replace the probable incurred loss impairment methodology underlying our previous allowance for doubtful accounts with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. Under ASU 2016-13, an allowance is recorded with a corresponding charge to bad debt expense for expected credit losses in our accounts receivable including consideration of the effects of past, present and future conditions that may reasonably be expected to impact credit losses. The Company charges off uncollectible accounts against the allowance once the invoices are deemed unlikely to be collectible. The allowance for credit losses is reflected in the unaudited condensed consolidated balance sheet as a reduction of accounts receivable. The impact of the adoption of ASU 2016-13 was immaterial to the Company’s unaudited condensed consolidated financial statements.

As of March 31, 2025 and September 30, 2024, the allowance for credit losses was $133 and $144, respectively.

A summary of changes in this account is as follows:

	Three Months Ended March 31,					Six Months Ended March 31,
	2025		2024			2025			2024
Beginning balance	$	125	$	167		$	144		$	118
Provisions for credit losses		8		13			12			73
Accounts receivable write-offs		-		(33	)		(23	)		(44	)
Ending balance	$	133	$	147		$	133		$	147

Liabilities for Direct Hire Placement Falloffs

Direct hire placement service revenues from contracts with customers are recognized when the Company has met each of the criteria under Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (ASC 606), including its performance obligations under the contracts. This generally occurs when the employment candidates accept offers of employment and have started their newly placed positions, less a provision for estimated credits or refunds to customers as the result of applicants not remaining employed for the entirety of the Company’s guarantee period (referred to as “falloffs”). The Company’s guarantee periods for permanently placed employees generally range from 60 to 90 days from the date of hire.

Charges for expected future falloffs are recorded as reductions of revenues for estimated losses due to applicants not remaining employed for the Company’s guarantee period. Liabilities for falloffs and refunds during the period are reflected in other current liabilities in the unaudited condensed consolidated balance sheets in the amounts of $59 and $102, as of March 31, 2025, and September 30, 2024, respectively. The corresponding charges included in the unaudited condensed consolidated statements of operations as reductions of direct hire placement service revenues were approximately $30 and $(14) for the three-month periods and $252 and $230 for the six-month periods ended March 31, 2025 and 2024, respectively.

6. Advertising Expenses

The Company expenses the costs of print and internet media advertising and promotions as incurred and reports these costs in selling, general and administrative expenses. Advertising expenses totaled $642 and $531 for the three-month periods and $1,269 and $1,068 for the six-month periods ended March 31, 2025 and 2024, respectively.

Table of Contents

GEE GROUP INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(Amounts in thousands except per share data, unless otherwise stated)

7. Earnings per Share

Basic earnings per share are computed by dividing net loss attributable to common stockholders by the weighted average common shares outstanding for the period, which is computed using shares issued and outstanding. Diluted earnings per share is computed giving effect to all potentially dilutive common shares. Potentially dilutive common shares may consist of incremental shares issuable upon the vesting of restricted shares granted but unissued, exercise of stock options and warrants. The dilutive effect of the common stock equivalents is reflected in earnings per share by use of the treasury stock method.

Due to the loss from continuing operations reported for the three and six-month periods ended March 31, 2025 and 2024, there were no dilutive incremental shares considered in the calculation of dilutive shares. Common stock equivalents, which are excluded because their effect is anti-dilutive, were approximately 4,730 and 4,472 for the three-month periods and 4,160 and 4,077 for the six-month periods ended March 31, 2025 and 2024, respectively.

8. Property and Equipment

Property and equipment, net consisted of the following:

	March 31, 2025			September 30, 2024
Computer software	$	121		$	472
Computer equipment		1,170			2,102
Furniture and fixtures		630			941
Leasehold improvements		87			176
Total property and equipment, at cost		2,008			3,691
Accumulated depreciation		(1,570	)		(3,145	)
Property and equipment, net	$	438		$	546

9. Leases

The Company occasionally acquires equipment under finance leases including hardware and software used by our IT department to improve security and capacity, and certain furniture for our offices. Terms for these leases generally range from two to six years. The assets obtained under finance leases are included in property and equipment, net, on the unaudited condensed consolidated balance sheets.

Finance lease expenses such as amortization of the lease assets and interest expense on the lease liabilities are included on the unaudited condensed consolidated statements of operations in depreciation expense and interest expense, respectively. Supplemental information related to these expenses consisted of the following:

	Three Months Ended, March 31,				Six Months Ended, March 31,
	2025		2024		2025		2024
Amortization of finance lease assets	$	23	$	23	$	46	$	49
Interest on finance lease liabilities		2

SEC Form 10-Q filed by GEE Group Inc.