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 June 30, 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 August 12, 2025 was 109,413,244.

GEE GROUP INC.

Form 10-Q

For the Quarter Ended June 30, 2025

INDEX

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

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	22
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	32
Item 4.	Controls and Procedures	32

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	33
Item 1A.	Risk Factors	33
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	33
Item 3.	Defaults Upon Senior Securities	33
Item 4.	Mine Safety Disclosures	33
Item 5.	Other Information	33
Item 6.	Exhibits	34
	Signatures	35

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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.

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Part I -FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (unaudited)

GEE GROUP INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)

(Amounts in thousands)

	June 30, 2025			September 30, 2024
ASSETS
CURRENT ASSETS:
Cash	$	18,622		$	20,735
Accounts receivable, less allowances ($117 and $144, respectively)		11,752			12,751
Prepaid expenses and other current assets		1,304			762
Current assets of discontinued operations		-			1,153
Total current assets		31,678			35,401
Property and equipment, net		401			546
Goodwill		24,762			46,008
Intangible assets, net		822			834
Deferred tax assets, net		-			9,495
Right-of-use assets		2,759			3,115
Other long-term assets		142			295
Noncurrent assets of discontinued operations		-			208
TOTAL ASSETS	$	60,564		$	95,902

LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable	$	1,426		$	1,960
Accrued compensation		3,992			5,026
Current operating lease liabilities		1,050			1,090
Current portion of notes payable		196			-
Other current liabilities		902			899
Current liabilities of discontinued operations		-			347
Total current liabilities		7,566			9,322
Deferred taxes, net		329			-
Noncurrent operating lease liabilities		2,048			2,254
Notes payable		196			-
Other long-term liabilities		30			82
Noncurrent liabilities of discontinued operations		-			33
Total liabilities		10,169			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 June 30, 2025 and September 30, 2024		113,547			113,129
Accumulated deficit		(59,966	)		(25,732	)
Treasury stock; at cost - 5,487 shares at June 30, 2025 and September 30, 2024		(3,186	)		(3,186	)
Total shareholders' equity		50,395			84,211
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	60,564		$	95,902

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

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GEE GROUP INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

(Amounts in thousands except per share data)

	Three Months Ended						Nine Months Ended
	June 30,						June 30,
	2025			2024			2025			2024
NET REVENUES:
Contract staffing services	$	21,301		$	23,761		$	64,310		$	71,977
Direct hire placement services		3,222			3,287			8,733			8,797
NET REVENUES		24,523			27,048			73,043			80,774

Cost of contract services		15,842			17,819			48,076			53,816
GROSS PROFIT		8,681			9,229			24,967			26,958

Selling, general and administrative expenses		8,951			9,753			26,695			29,491
Depreciation expense		49			63			154			201
Amortization of intangible assets		225			720			655			2,159
Intangible assets impairment charges		-			5,209			-			5,209
Goodwill impairment charges		-			14,201			22,000			14,201
LOSS FROM OPERATIONS		(544	)		(20,717	)		(24,537	)		(24,303	)
Interest expense		(112	)		(113	)		(267	)		(247	)
Interest income		140			179			434			548
LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAX PROVISION		(516	)		(20,651	)		(24,370	)		(24,002	)
Provision for income tax (expense) benefit attributable to continuing operations		115			2,546			(9,671	)		3,461
LOSS FROM CONTINUING OPERATIONS		(401	)		(18,105	)		(34,041	)		(20,541	)
Loss from discontinued operations, net of tax (Note 3)		(22	)		(1,181	)		(193	)		(1,308	)
CONSOLIDATED NET LOSS	$	(423	)	$	(19,286	)	$	(34,234	)	$	(21,849	)

WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC AND DILUTED		109,413			108,772			109,413			109,150

BASIC AND DILUTED LOSS PER SHARE
From continuing operations	$	(0.00	)	$	(0.17	)	$	(0.31	)	$	(0.19	)
From discontinued operations	$	(0.00	)	$	(0.01	)	$	(0.00	)	$	(0.01	)
Consolidated net loss per share	$	(0.00	)	$	(0.18	)	$	(0.31	)	$	(0.20	)

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

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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

Share-based compensation		-		177		-		-			-			177
Net loss		-		-		-		-			(423	)		(423	)
Balance, June 30, 2025		114,900	$	113,547		5,487	$	(3,186	)	$	(59,966	)	$	50,395

													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

Share-based compensation		-		149		-		-			-			149
Net loss		-		-		-		-			(19,286	)		(19,286	)
Balance, June 30, 2024		114,900	$	113,374		6,129	$	(3,559	)	$	(23,479	)	$	86,336

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

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GEE GROUP INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

(Amounts in thousands)

	Nine Months Ended
	June 30,
	2025			2024
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(34,234	)	$	(21,849	)
Adjustments to reconcile net loss to cash used in operating activities:
Loss on disposal of assets		3			-
Depreciation and amortization		814			2,394
Amortization of operating lease right-of-use assets		934			1,090
Intangible assets impairment charges		-			5,209
Goodwill impairment charges		22,000			15,285
Share-based compensation		418			459
Provisions for (recoveries of) credit losses		(1	)		59
Gain on sale of Industrial Segment		(133	)		-
Deferred income taxes		9,671			(3,461	)
Amortization of debt issuance costs		115			115
Changes in operating assets and liabilities:
Accounts receivable		2,024			3,764
Other assets		(402	)		(312	)
Accounts payable		(1,020	)		(396	)
Accrued compensation		(1,231	)		(1,593	)
Operating lease liabilities		(824	)		(1,156	)
Other liabilities		(18	)		(725	)
Net cash used in operating activities		(1,884	)		(1,117	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property and equipment		(16	)		(58	)
Business acquisition, net of cash acquired		(968	)		-
Proceeds from sale of Industrial Segment		712			-
Net cash used in investing activities		(272	)		(58	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Purchases of treasury stock		-			(1,575	)
Payments on finance leases		(50	)		(126	)
Net cash used in financing activities		(50	)		(1,701	)

Net change in cash		(2,206	)		(2,876	)

Cash at beginning of period		20,828			22,471

Cash at end of period		18,622			19,595
Less cash from discontinued operations		-			(233	)
Cash from continuing operations at end of period	$	18,622		$	19,362

SUPPLEMENTAL CASH FLOW INFORMATION:

Cash paid for interest	$	152		$	138
Cash paid for taxes		45			131

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

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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 nine-month period ended June 30, 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 Company also paid legal and professional fees of $111 related to the purchase during the nine months ended June 30, 2025, which are included in selling, general and administrative expenses in the unaudited condensed consolidated statements of operations.

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.

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:

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GEE GROUP INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

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

Assets purchased	$	612
Liabilities assumed (a)		517
Net assets purchased		95
Purchase consideration:
Cash paid at closing		1,100
Promissory notes, net		392
Intangible assets from purchase	$	1,397

(a)

Liabilities assumed includes a $155 deferred tax liability present at January 3, 2025 but recorded by the Company during the three months ended June 30, 2025 due to a post-closing tax election made during the quarter.

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 (a)		754	Indefinite
Total intangible assets acquired	$	1,397

(a)

Goodwill increased by $155 as a result of the deferred tax liability recorded during the three months ended June 30, 2025, as noted above.

The following table represents the unaudited consolidated pro forma results of operations for the three and nine-month periods ended June 30, 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, June 30,						Nine Months Ended, June 30,
	2025			2024			2025			2024
Net revenues	$	24,523		$	28,422		$	74,631		$	85,140
Cost of contract services		15,842			18,992			49,434			57,550
Gross profit		8,681			9,430			25,197			27,590
Selling, general and administrative expenses		8,951			9,876			26,847			29,952
Net loss		(401	)		(18,026	)		(33,964	)		(20,368	)

Basic and diluted loss per share	$	0.00		$	(0.17	)	$	(0.31	)	$	(0.19	)

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. 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 be completed within twelve months.

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GEE GROUP INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

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

On June 2, 2025, the Company entered into an agreement for the sale of certain operating assets of its Industrial Segment, including those of BMCH, Inc., Triad Logistics, Inc., and its Triad Staffing brand. The Company received total cash consideration of $250 from the buyer at closing and is to receive an additional $788 payable during the first 90 days following closing. The Company has received $462 of the additional payments due as of June 30, 2025. The remaining receivable of $326 is included in prepaid expenses and other current assets in the unaudited condensed consolidated balance sheet as of June 30, 2025. A pre-tax net gain of $133, including transaction costs of $97, is included in discontinued operations for the three-month period ended June 30, 2025. The remaining assets of the Industrial Segment not sold were distributed to the Company.

Assets and Liabilities of Discontinued Operations

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

	June 30, 2025		September 30, 2024
Assets of discontinued operations:
Cash	$	-	$	93
Accounts receivable, net		-		996
Prepaid expenses and other current assets		-		64
Property and equipment, net		-		13
Right-of-use assets		-		138
Other long-term assets		-		57
Total assets of discontinued operations	$	-	$	1,361

Liabilities of discontinued operations:
Accounts payable	$	-	$	27
Accrued compensation		-		197
Current operating lease liabilities		-		105
Other current liabilities		-		18
Noncurrent operating lease liabilities		-		33
Total liabilities of discontinued operations	$	-	$	380

Net Loss from Discontinued Operations

Results of the Industrial Segment for the three and nine-month periods ended June 30, 2025 and 2024, respectively, consisted of the following:

	Three Months Ended				Nine Months Ended
	June 30,				June 30,
	2025		2024		2025		2024

Revenue	$	1,068	$	2,408	$	4,614	$	7,363
Expenses:
Cost of contract services		744		2,042		3,663		6,223
Selling, general and administrative expenses		479		450		1,273		1,324
Depreciation expense		-		11		4		34
Goodwill impairment charge		-

SEC Form 10-Q filed by GEE Group Inc.