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, 2026

☐	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, 2026 was 109,870,686.

GEE GROUP INC.

Form 10-Q

For the Quarter Ended March 31, 2026

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	34
Item 4.	Controls and Procedures	34

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	35
Item 1A.	Risk Factors	35
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	35
Item 3.	Defaults Upon Senior Securities	35
Item 4.	Mine Safety Disclosures	35
Item 5.	Other Information	35
Item 6.	Exhibits	36
	Signatures	37

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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, 2025, 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)

	March 31, 2026			September 30, 2025
ASSETS
CURRENT ASSETS:
Cash	$	20,331		$	21,364
Accounts receivable, less allowances ($76 and $76, respectively)		9,541			9,695
Prepaid expenses and other current assets		577			622
Total current assets		30,449			31,681
Property and equipment, net		373			354
Goodwill		24,759			24,759
Intangible assets, net		540			620
Right-of-use assets		3,419			2,443
Other long-term assets		124			140
TOTAL ASSETS	$	59,664		$	59,997

LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable	$	1,255		$	1,392
Accrued compensation		3,961			4,519
Current operating lease liabilities		993			986
Current portion of promissory notes payable		196			196
Other current liabilities		275			595
Total current liabilities		6,680			7,688
Deferred taxes, net		234			262
Noncurrent operating lease liabilities		2,704			1,829
Promissory notes payable		-			196
Other long-term liabilities		-			12
Total liabilities		9,618			9,987

Commitments and contingencies (Note 15)

SHAREHOLDERS' EQUITY:
Common stock, no-par value; authorized - 200,000 shares; 114,900 shares issued and 109,870 shares outstanding at March 31, 2026 and 114,900 shares issued and 109,413 shares outstanding at September 30, 2025		113,530			113,675
Accumulated deficit		(60,615	)		(60,479	)
Treasury stock; at cost - 5,030 shares at March 31, 2026 and 5,487 shares at September 30, 2025		(2,869	)		(3,186	)
Total shareholders' equity		50,046			50,010
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	59,664		$	59,997

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

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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,
	2026			2025			2026			2025
NET REVENUES:
Contract staffing services	$	16,294		$	21,495		$	34,094		$	43,009
Direct hire placement services		3,187			3,000			5,903			5,511
NET REVENUES		19,481			24,495			39,997			48,520

Cost of contract services		12,066			16,135			25,177			32,234
GROSS PROFIT		7,415			8,360			14,820			16,286

Selling, general and administrative expenses		7,407			9,305			15,115			17,744
Depreciation expense		45			50			91			105
Amortization of intangible assets		20			225			80			430
Goodwill impairment charge		-			22,000			-			22,000
LOSS FROM OPERATIONS		(57	)		(23,220	)		(466	)		(23,993	)
Interest expense		(66	)		(89	)		(131	)		(155	)
Interest income		116			139			244			294
Other income		-			-			196			-
LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAX PROVISION		(7	)		(23,170	)		(157	)		(23,854	)
Provision for income tax (expense) benefit attributable to continuing operations		21			(9,786	)		21			(9,786	)
INCOME (LOSS) FROM CONTINUING OPERATIONS		14			(32,956	)		(136	)		(33,640	)
Loss from discontinued operations, net of tax (Note 3)		-			(163	)		-			(171	)
CONSOLIDATED NET INCOME (LOSS)	$	14		$	(33,119	)	$	(136	)	$	(33,811	)

WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC		109,881			109,413			109,741			109,413
WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED		110,596			109,413			109,741			109,413

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

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, 2025		114,900	$	113,675			5,487		$	(3,186	)	$	(60,479	)	$	50,010
Share-based compensation		-		113			-			-			-			113
Issuance of shares under incentive stock plan		-		(344	)		(592	)		344			-			-
Net loss		-		-			-			-			(150	)		(150	)
Balance, December 31, 2025		114,900	$	113,444			4,895		$	(2,842	)	$	(60,629	)	$	49,973
Share-based compensation		-		86			-			-			-			86
Return of shares issued under incentive stock plan for taxes		-		-			135			(27	)		-			(27	)
Net Income		-		-			-			-			14			14
Balance, March 31, 2026		114,900	$	113,530			5,030		$	(2,869	)	$	(60,615	)	$	50,046

													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

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)

	Six Months Ended
	March 31,
	2026			2025
CASH FLOWS FROM OPERATING ACTIVITIES:
Consolidated net loss	$	(136	)	$	(33,811	)
Adjustments to reconcile net loss to cash used in operating activities:
Loss on disposal of assets		-			3
Depreciation and amortization		171			540
Amortization of operating lease right-of-use assets		472			640
Goodwill impairment changes		-			22,000
Gain on reduction of promissory notes payable		(196	)		-
Share-based compensation		199			241
Provisions for credit losses		-			10
Deferred income taxes		(28	)		9,783
Amortization of debt issuance costs		76			76
Changes in operating assets and liabilities:
Accounts receivable		154			1,514
Other assets		(15	)		(5	)
Accounts payable		(137	)		(443	)
Accrued compensation		(558	)		(742	)
Operating lease liabilities		(566	)		(624	)
Other liabilities		(298	)		(323	)
Net cash used in operating activities		(862	)		(1,141	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property and equipment		(110	)		(4	)
Business acquisition, net of cash acquired		-			(968	)
Net cash used in investing activities		(110	)		(972	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Return of shares issued under incentive stock plan for taxes		(27	)		-
Payments on finance leases		(34	)		(39	)
Net cash used in financing activities		(61	)		(39	)

Net change in cash		(1,033	)		(2,152	)

Cash at beginning of period		21,364			20,828

Cash at end of period		20,331			18,676
Less cash from discontinued operations		-			(175	)
Cash from continuing operations at end of period		20,331			18,501

SUPPLEMENTAL CASH FLOW INFORMATION:

Cash paid for interest	$	55		$	78
Cash paid for taxes		7			10
Non-cash investing and financing activities:
Operating ROU assets obtained in exchange for new lease liabilities		1,448			488

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 six-month period ended March 31, 2026 are not necessarily indicative of the results that may be expected for the year ending September 30, 2026. 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, 2025 as filed on December 17, 2025.

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, if applicable. 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 $75 related to the purchase during the six months ended March 31, 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 (“AGP”), 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.

As of December 31, 2025, upon conclusion of the first twelve-month measurement period, there was a shortfall in the minimum required AGP under the Purchase Agreement. This shortfall resulted in the elimination of the amounts of $196 that would have been due under the first installment of the Promissory Notes, which were written down during the six months ended March 31, 2026 and recorded as other income on the unaudited condensed consolidated statements of operations. No payments were required to be made to Hornet’s former shareholders on the first installment of the Promissory Notes. The minimum required AGP for the second twelve-month measurement period is still projected to be achievable. As such, the second installments of the Promissory Notes remain accrued in full.

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GEE GROUP INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

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

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 measured at fair value using Level 3 inputs and were recorded net of discounts of $8 at the acquisition date. The following table summarizes the balance sheet at January 3, 2025:

Assets purchased	$	612
Liabilities assumed (a)		514
Net assets purchased		98
Purchase consideration:
Cash paid at closing		1,100
Promissory notes, net (b)		392
Intangible assets from purchase	$	1,394

	(a)	Liabilities assumed includes a $151 deferred tax liability present at January 3, 2025 but recorded by the Company post-close due to a tax election made in the second half of fiscal 2025.
	(b)	Represents the initial amount of the Promissory Notes at closing, not including the elimination of the first installments during the six months ended March 31, 2026, as discussed above.

An independent 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		751	Indefinite
Total intangible assets acquired	$	1,394

The following table represents the unaudited consolidated pro forma results of operations for the three and six-month periods ended March 31, 2025 had the acquisition occurred on October 1, 2024, 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, 2024. This information is based on Hornet’s unaudited historical financial statements.

	Three Months Ended March 31, 2025			Six Months Ended March 31, 2025
Net revenues	$	24,560		$	50,108
Cost of contract services		16,178			33,592
Gross profit		8,382			16,516
Selling, general and administrative expenses		9,319			17,896
Loss from continuing operations		(32,949	)		(33,563	)

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

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GEE GROUP INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

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

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.

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 an additional $788 during the first 90 days following closing. A pre-tax net gain of $133, including transaction costs of $97, was included in discontinued operations for fiscal 2025. The remaining assets of the Industrial Segment not sold were distributed to the Company.

Assets and Liabilities of Discontinued Operations

There were no assets or liabilities remaining under the Industrial Segment as of March 31, 2026 and September 30, 2025.

Net Loss from Discontinued Operations

Results of the Industrial Segment for the three and six-month periods ended March 31, 2026 and 2025 consisted of the following:

	Three Months Ended					Six Months Ended
	March 31,					March 31,
	2026		2025			2026		2025

Revenue	$	-	$	1,545		$	-	$	3,546
Expenses:
Cost of contract services		-		1,288			-		2,919
Selling, general and administrative expenses		-		418			-		794
Depreciation expense		-		2			-		4
Loss from discontinued operations before gain on sale and income taxes		-		(163	)		-		(171	)
Provision for income tax expense attributable to discontinued operations		-		-			-		-
Loss from discontinued operations, net of tax	$	-	$	(163	)	$	-	$	(171	)

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, 2026 or 2025.

4. Recent Accounting Pronouncements

Recently Adopted

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“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 for interim periods during fiscal years beginning after December 15, 2024. The new guidance was implemented during the quarter ended September 30, 2025 and did not have a material effect on the Company’s consolidated financial statements and disclosures.

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GEE GROUP INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

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

In July 2025, the FASB issued ASU 2025-05, Financial Instruments-Credit Losses (Topic 326), which introduces a practical expedient for estimating credit losses under CECL for current accounts receivable and contract assets arising from revenue transactions under Accounting Standards Codification (“ASC”) 606. If elected, this expedient allows entities to assume that current conditions at the balance sheet date will persist through the forecast period, simplifying the estimation process. The new guidance is effective for fiscal years and interim periods beginning after December 15, 2025. The Company elected to early adopt the expedient during the quarter ended September 30, 2025 which did not have a material impact on its consolidated financial statements.

In December 2025, the FASB issued ASU 2025‑11, Interim Reporting (Topic 270), which clarifies content and disclosure requirements for interim financial statements and adds a principle requiring disclosure of material events occurring after the most recent annual reporting period. The guidance is effective for interim periods within fiscal years beginning after December 15, 2027. The Company elected to early adopt the guidance during the quarter ended March 31, 2026, which did not have a material impact on its consolidated financial statements or disclosures.

Not Yet Adopted

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 applies to annual periods only and is effective for fiscal years beginning after December 15, 2024. The Company has not yet determined the effects of the new guidance 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 has not yet determined the effects of the new guidance on its consolidated financial statements and disclosures.

No other recent accounting pronouncements were issued by FASB and the SEC that are believed by management to have a material impact on the Company’s present or future financial statements.

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, 2026 and September 30, 2025, 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 $15,330 and $15,087 as of March 31, 2026 and September 30, 2025, respectively. The Company also holds funds in various other bank accounts that may exceed FDIC insured limits. These uninsured amounts, in aggregate, were $3,945 and $5,067 as of March 31, 2026 and September 30, 2025, respectively. The Company has never experienced any material losses related to cash on deposit with banks.

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GEE GROUP INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

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

Customer Concentrations

There was no customer that represented 10% or more of the Company’s consolidated revenues for the three and six-month periods ended March 31, 2026. There was one customer that represented 10% of the Company’s consolidated revenues for the three and six-month periods ended March 31, 2025. The Company is no longer doing business with this customer. The Company had one customer that made up approximately 20% and 21% of the consolidated accounts receivable balances as of March 31, 2026 and September 30, 2025. This customer is offered extended payment terms due to the frequency and volume of our services it utilizes and has demonstrated consistent creditworthiness since doing business with us. The Company has not experienced any losses related to this customer historically.

Allowance for Credit Losses

The Company extends credit to customers based on evaluation of their 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 follows the methodology under ASU 2016-13, Financial Instruments-Credit Losses (Topic 326), which requires consideration of a broad range of reasonable and supportable information to inform credit loss estimates. During fiscal 2025, the Company elected to use the practical expedient introduced by ASU 2025-05 which simplifies the calculation of these estimates by assuming that current conditions will continue through the forecast period. The Company records an allowance with a corresponding charge to bad debt expense and charges off uncollectible accounts against the allowance once the invoices are considered unlikely to be collected. The allowance for credit losses is reflected in the unaudited condensed consolidated balance sheets as a reduction of accounts receivable. The impact of the adoption of ASU 2025-05 was immaterial to the Company’s unaudited condensed consolidated financial statements.

As of March 31, 2026 and September 30, 2025, the allowance for credit losses was $76 and $76, respectively.

A summary of changes in this account is as follows:

	Three Months Ended				Six Months Ended
	March 31,				March 31,
	2026		2025		2026		2025
Beginning balance	$	71	$	125	$	76	$	144
Provisions for credit losses		5		8		-		12
Accounts receivable write-offs		-		-		-		(23	)
Ending balance	$	76	$	133	$	76	$	133

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 ASC 606, Revenue from Contracts with Customers, 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 $38 and $72, as of March 31, 2026, and September 30, 2025, respectively. The corresponding charges included in the unaudited condensed consolidated statements of operations as reductions of direct hire placement service revenues were $20 and $30 for the three-month periods and $105 and $252 for the six-month periods ended March 31, 2026 and 2025, respectively.

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GEE GROUP INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

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

6. Advertising Expenses

The Company expenses the costs of job boards used for identifying and recruiting candidates, print and internet media advertising and promotions as incurred and reports these costs in selling, general and administrative expenses. Advertising expenses totaled $313 and $475 for the three-month periods and $629 and $933 for the six-month periods ended March 31, 2026 and 2025, respectively.

7. Earnings per Share

Basic earnings per share are computed by dividing net income or 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.

Basic and diluted weighted-average shares outstanding for the three-month period ended March 31, 2026 were 109,881 and 110,596, respectively. Dilutive incremental shares were included in the calculation of diluted shares for the three-month period ended March 31, 2026 due to net income from continuing operations. No dilutive incremental shares were included for the six-month period ended March 31, 2026 or for the three-month and six-month periods ended March 31, 2025 due to net losses from continuing operations. Common stock equivalents, which are excluded because their effect is anti-dilutive, were approximately 3,907 and 4,730 for the three-month periods and 4,155 and 4,160 for the six-month periods ended March 31, 2026 and 2025, respectively.

8. Property and Equipment

Property and equipment, net consisted of the following:

	March 31, 2026			September 30, 2025
Computer software	$	223		$	117
Computer equipment		1,174			1,174
Furniture and fixtures		630			630
Leasehold improvements		103			99
Total property and equipment, at cost		2,130			2,020
Accumulated depreciation		(1,757	)		(1,666	)
Property and equipment, net	$	373		$	354

9. Leases

The Company leases space for all its branch offices, which are generally located either in downtown or suburban business centers, and for its corporate headquarters. Branch offices are generally leased over periods ranging from three to five years. The corporate office lease expires in 2026. The Company’s leases generally provide for payment of basic rent plus a share of building real estate taxes, maintenance costs and utilities.

Operating lease expenses included in selling, general, and administrative expenses on the unaudited condensed consolidated statements of operations were $363 and $437 for the three-month periods and $729 and $919 for the six-month periods ended March 31, 2026 and 2025, respectively.

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GEE GROUP INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

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

Supplemental cash flow information related to operating leases consisted of the following:

	Six Months Ended
	March 31,
	2026		2025
Cash paid for operating lease liabilities	$	553	$	646
Right-of-use assets obtained in exchange for new operating lease liabilities		1,448		488

Supplemental balance sheet information related to operating leases consisted of the following:

March 31,

2026

September 30,

2025

Weighted average remaining lease term for operating leases

3.4 years

2.6 years

Weighted average discount rate for operating leases

5.3%

5.5%

The table below reconciles the undiscounted future minimum lease payments under non-cancelable operating lease agreements having initial terms in excess of one year to the total operating lease liabilities recognized on the unaudited condensed consolidated balance sheet as of March 31, 2026, including certain closed offices are as follows:

Remainder of Fiscal 2026	$	579
Fiscal 2027		1,124
Fiscal 2028		878
Fiscal 2029		588
Fiscal 2030		401
Thereafter		592
Less: Imputed interest		(466	)
Present value of operating lease liabilities (a)	$	3,696

(a)

Includes current portion of $993 for operating leases.

The Company acquires some of its 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				Six Months Ended
	March 31,				March 31,
	2026		2025		2026		2025
Amortization of finance lease assets	$	21	$	23	$	42	$	46
Interest on finance lease liabilities		-		2		1		4

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GEE GROUP INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

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

Supplemental balance sheet information related to finance leases consisted of the following:

	March 31, 2026		September 30, 2025
Net book value of finance leases	$	71	$	113
Weighted average remaining lease term for finance leases	0.7 years		1.2 years
Weighted average discount rate for finance leases		5.3%		5.3%

The table below reconciles the undiscounted future minimum lease payments under non-cancellable finance lease agreements to the total finance lease liabilities recognized on the unaudited condensed consolidated balance sheets, included in other current liabilities as of March 31, 2026:

Remainder of Fiscal 2026	$	36
Fiscal 2027		13
Less: Imputed interest		(1	)
Present value of finance lease liabilities	$	48

10. Goodwill and Intangible Assets

Goodwill

The Company performs a goodwill impairment assessment at least annually. The Company completed its most recent annual goodwill impairment assessment as of September 30, 2025 and determined that its goodwill was not impaired. The estimated fair value of the Professional Services reporting unit resulting from the September 30, 2025 assessment exceeded the reporting unit’s carrying value by approximately 39%, or approximately $12.7 million.

The Company also may perform interim assessments if a triggering event occurs that may indicate the fair value of a reporting unit decreased below its carrying value. Upon reevaluation of its financial projections for the March 31, 2025 quarterly results and other indications of a potential triggering event, the Company performed an interim impairment assessment of its goodwill using the updated information as of March 31, 2025. For purposes of performing its interim goodwill impairment assessment, the Company applied certain valuation techniques and assumptions to its Professional Segment reporting unit and also considered recent trends in the Company’s stock price, implied control or acquisition premiums, earnings, and other possible factors and their effects on estimated fair value of the Company’s reporting unit. The results of the interim assessment indicated the Company’s goodwill assigned to its Professional Services reporting unit was impaired. As a result, the Company reduced its goodwill by $22,000 with a corresponding non-cash impairment charge recognized in its unaudited condensed consolidated statements of operations for the three-month period ended March 31, 2025.

Should industry conditions remain consistently negative, or worsen, or if assumptions such as control premiums, revenue growth projections, cost reduction projections, cost of capital or discount rates or business enterprise value multiples change such conditions could result in a deficit of the fair value of the Company’s Professional Services reporting unit as compared to its remaining carrying value, leading to an impairment in the future.

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GEE GROUP INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

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

Intangible Assets

The following provides a summary of the Company’s separately identifiable intangible assets as of March 31, 2026 and September 30, 2025 and estimated future amortization expense:

	March 31, 2026										September 30, 2025
	Cost		Impairment Charges			Accumulated Amortization			Net Book Value		Cost		Impairment Charges			Accumulated Amortization			Net Book Value
Customer relationships	$	27,521	$	(5,153	)	$	(21,892	)	$	476	$	27,521	$	(5,153	)	$	(21,833	)	$	535
Trade names		8,397		(56	)		(8,281	)		60		8,397		(56	)		(8,262	)		79
Non-competes		4,342		-			(4,338	)		4		4,342		-			(4,336	)		6
Total	$	40,260	$	(5,209	)	$	(34,511	)	$	540	$	40,260	$	(5,209	)	$	(34,431	)	$	620

Remainder of Fiscal 2026	$	41
Fiscal 2027		79
Fiscal 2028		77
Fiscal 2029		77
Fiscal 2030		77
Thereafter		189
	$	540

Intangible assets that represent customer relationships are amortized on the basis of estimated future undiscounted cash flows or using the straight-line basis over estimated remaining useful lives of five to ten years. Trade names are amortized on a straight-line basis over their respective estimated useful lives of between five and ten years. Non-competes are amortized on a straight-line basis over their respective estimated useful lives of between two and five years.

11. Other Current Liabilities

Other current liabilities consisted of the following:

	March 31, 2026		September 30, 2025
Accrued client rebates	$	37	$	137
Reserve for falloffs		38		72
Current finance leases payable		48		70
Accrued audit fees		49		73
Other		103		243
Total other current liabilities	$	275	$	595

12. Senior Bank Loan, Security and Guarantee Agreement

The Company and its subsidiaries have a Loan, Security and Guaranty Agreement for a $20 million asset-based senior secured revolving credit facility (the “Facility”) with First Citizens Bank (“FCB”) (formerly CIT Bank, N.A.). The Facility is collateralized by 100% of the assets of the Company and its subsidiaries who are co-borrowers and/or guarantors. The Facility matures on the fifth anniversary of the closing date (May 14, 2026).

As of March 31, 2026, the Company had no outstanding borrowings and $4,895 of unused capacity available for borrowing under the terms of the Facility. The Company had $25 and $102 in unamortized debt issuance costs associated with the Facility as of March 31, 2026 and September 30, 2025, respectively, which are reflected in other current assets on the unaudited condensed consolidated balance sheets. The amortization expense of these debt costs totaled $38 for the three-month periods and $76 for the six-month periods ended March 31, 2026 and 2025. The unused line fees incurred and included in interest expense totaled $25 for the three-month periods and $51 for the six-month periods ended March 31, 2026 and 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)

On December 15, 2023, the Company and FCB entered into Amendment No. 2 to the Facility (“Amendment No. 2”), which provides for an increase in the Facility’s concentration limits for certain large clients at the discretion of FCB.

On January 3, 2025, in connection with its acquisition of Hornet, the Company and FCB entered into Consent and Amendment No. 3 to the Facility (“Amendment No. 3”), pursuant to which, FCB consented to the Hornet acquisition and the Company and its subsidiaries, as co-borrowers, the guarantors and FCB made certain amendments to the Loan Agreement and related collateral agreements to add Hornet to the Facility, accordingly.

On May 12, 2026, the Company and FCB entered into Amendment No. 4 to the Facility (“Amendment No. 4”) which extends the Facility expiration date from May 14, 2026, to May 13, 2027. Additionally, this amendment increases the availability block to the greater of $1.5 million, or 12.5% of the lesser of (i) the revolver commitment and (ii) the borrowing base. The Amendment No. 4 also contains two new requirements. First, during the term of the Facility, as amended, all cash and cash equivalents held by the Company will not exceed an aggregate amount of $25 million (or such greater amount that FCB may, in its sole discretion, otherwise consent to in writing). Second, within fourteen (14) days following the effective date of the Amendment No. 4, the Company has agreed to increase its cash on deposit with FCB and/or its affiliates and thereafter maintain such cash and cash equivalents on deposit in an aggregate amount of not less than $12 million (or such lesser amount that FCB may, in its sole discretion, otherwise consent to in writing).

13. Shareholders’ Equity

Share-based Compensation

Amended and Restated 2013 Incentive Stock Plan, as amended

As of March 31, 2026, there were vested and unvested shares of restricted stock and stock options outstanding under the Company’s Amended and Restated 2013 Incentive Stock Plan, as amended (“Incentive Stock Plan”). The Incentive Stock Plan, as amended, provides for total shares available for restricted stock and stock options of 15,000 (7,500 restricted stock shares and 7,500 stock option shares). The Incentive Stock Plan authorizes the Compensation Committee of the Board of Directors to grant non-statutory stock options and restricted stock to employees. Vesting periods are established by the Compensation Committee at the time of grant.

As of March 31, 2026, there were 7,204 shares available to be granted under the Plan (4,052 shares available for restricted stock grants and 3,152 shares available for non-qualified stock option grants).

SEC Form 10-Q filed by GEE Group Inc.