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SECURITIES AND EXCHANGE COMMISSION
TO
UNDER
THE SECURITIES ACT OF 1933
Delaware (State or Other Jurisdiction of Incorporation or Organization) | 7363 (Primary Standard Industrial Classification Code Number) | 43-2069359 (I.R.S. Employer Identification Number) |
Lone Tree, Colorado 80124
Telephone: (303) 216-9500
(Address, including zip code, and telephone number, including
area code, of registrant’s principal executive offices)
Howard Brill
Global Employment Holdings, Inc.
10375 Park Meadows Drive, Suite 375
Lone Tree, Colorado 80124
Telephone: (303) 216-9500
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copy to:
Jeffrey M. Knetsch
Brownstein Hyatt Farber Schreck, P.C.
410 Seventeenth Street, Suite 2200
Denver, Colorado 80202
Telephone: (303) 223-1100
Facsimile: (303) 223-1111
From time to time after the effective date of this registration statement.
(Approximate date of commencement of proposed sale to the public)
Large accelerated filero | Accelerated filero | Non-accelerated filero | Smaller reporting companyþ | |||
(Do not check if a smaller reporting company) |
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The information in this prospectus is not complete and may be changed. The selling stockholders may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
Lone Tree, Colorado 80124
Telephone: (303) 216-9500
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Overview | 18 | |||
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Results of Continuing Operations | 24 | |||
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Our Directors and Executive Officers | 43 | |||
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Certain Relationships and Related Transactions | 56 | |||
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Director Independence | 58 |
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List of Subsidiaries | ||||||||
Consent of Mayer Hoffman McCann P.C. |
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Common stock offered (1) | 18,803,103 | |
Offering price | The selling stockholders will sell their shares at prevailing market prices or privately negotiated prices. | |
Common stock outstanding (2) | 10,548,330 shares as of August 29, 2008. | |
Use of proceeds | We will not receive any proceeds from the sale of the shares of common stock. | |
Risk factors | An investment in our common stock involves a high degree of risk. You should carefully consider the risk factors set forth under “Risk Factors” beginning on page 4 and the other information contained in this prospectus before making an investment decision regarding our common stock. |
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(1) | In accordance with the terms of registration rights agreements we entered into with the selling stockholders, this prospectus covers the resale of (i) 2,461,133 outstanding shares of our common stock, (ii) 112,440 shares of our common stock issuable upon exercise of outstanding warrants to purchase our common stock, (iii) 130% of the sum of the number of shares of common stock issuable upon conversion of the convertible notes and shares of Series A mandatorily redeemable convertible preferred stock as of the trading day immediately preceding the date the post-effective amendment no. 3 to our registration statement, of which this prospectus forms a part, is initially filed with the Securities and Exchange Commission, also referred to as the SEC and (iv) additional shares to cover automatic adjustments to the conversion and exercise prices of the Company’s currently outstanding senior secured convertible notes and Series A mandatorily redeemable convertible preferred stock in such manner as provided for by the terms of the respective securities. We agreed to register the excess shares as a negotiated precaution for the selling stockholders to cover adjustments to the conversion prices of our convertible notes and preferred stock and the exercise price of the warrants. The number of shares of our common stock into which our convertible notes and preferred stock are convertible and our warrants are exercisable will be adjusted to account for future stock splits, stock dividends, reclassifications, recapitalizations or other similar events, fundamental transactions, distributions of company assets, issuance of common stock, options, convertible securities or purchase rights, or if we take an action with regard to our common stock that would diminish the value of our convertible notes, preferred stock or warrants. | |
(2) | The number of outstanding shares does not include shares issuable upon conversion of convertible notes and convertible preferred stock, or shares issuable upon exercise of warrants or stock options. |
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Six Months Ended | Years Ended | |||||||||||||||||||||||||||
(All amounts in thousands, except per share data) | June 2008 | June 2007 | 2007 | 2006 | 2005 | 2004 | 2003 | |||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||
Revenues, net | $ | 89,328 | $ | 80,960 | $ | 173,893 | $ | 128,790 | $ | 111,563 | $ | 97,126 | $ | 85,568 | ||||||||||||||
Operating income (loss) | $ | 2,622 | $ | 2,729 | $ | 5,334 | $ | 7,835 | (a) | $ | (11,837 | )(b) | $ | 5,530 | $ | 3,894 | ||||||||||||
Net income (loss) | $ | 2,612 | $ | 9,778 | $ | 10,966 | $ | 1,309 | $ | (15,725 | ) | $ | 2,793 | $ | 1,673 | |||||||||||||
Dividend paid to Series C preferred shareholders | $ | — | $ | — | $ | — | $ | — | $ | (6,300 | ) | $ | — | $ | — | |||||||||||||
Valuation of redeemable preferred stock | $ | — | $ | — | $ | — | $ | — | $ | (36,693 | ) | $ | — | $ | — | |||||||||||||
Income (loss) available to common stockholders | $ | 2,612 | $ | 9,778 | $ | 10,966 | $ | 1,309 | $ | (58,718 | ) | $ | 2,793 | $ | 1,673 | |||||||||||||
Income (loss) per share: | ||||||||||||||||||||||||||||
Basic earnings (loss) per share | $ | 0.25 | $ | 1.62 | $ | 1.67 | $ | 0.23 | $ | (10.95 | ) | $ | 0.51 | $ | 0.30 | |||||||||||||
Weighted average number of shares outstanding | 10,548 | 6,024 | 6,550 | 5,745 | 5,363 | 5,471 | 5,547 | |||||||||||||||||||||
Diluted earnings (loss) per share | $ | 0.22 | $ | 0.97 | $ | 1.04 | $ | 0.23 | $ | (10.95 | ) | $ | 0.51 | $ | 0.30 | |||||||||||||
Weighted average number of shares outstanding | 15,811 | 12,715 | 15,586 | 5,745 | 5,363 | 5,471 | 5,547 |
(a) | Includes $1,048 of non-recurring compensation expense in connection with the March 31, 2006 recapitalization. | |
(b) | Includes $21,152 of share based compensation related to our restricted stock plan recorded in connection with the March 31, 2006 recapitalization. |
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• | Develop and expand their infrastructure and service offerings more quickly and achieve greater cost savings. | ||
• | Invest in new technologies. | ||
• | Expand operations into new markets more rapidly. | ||
• | Devote greater resources to marketing. | ||
• | Compete for acquisitions more effectively and complete acquisitions more easily. | ||
• | Aggressively price products and services and increase benefits in ways that we may not be able to match. |
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• | Claims of misconduct or negligence on the part of our employees. | ||
• | Claims against our employees of discrimination or harassment. | ||
• | Claims by our employees of discrimination or harassment directed at them, including claims relating to actions of our customers. | ||
• | Immigration-related claims, such as claims related to the employment of illegal aliens or unlicensed personnel. | ||
• | Payment of workers’ compensation claims and other similar claims. | ||
• | Violations of wage, hour and other workplace regulations. | ||
• | Claims relating to employee benefits, entitlements to employee benefits, or errors in the calculation or administration of such benefits. |
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• | Retroactive entitlement to employee benefits. | ||
• | Errors and omissions of our temporary employees, particularly in the case of professionals. | ||
• | Claims by our customers relating to our employees’ misuse of customer proprietary information, misappropriation of funds, other criminal activity or torts, or other similar claims. |
• | Impose additional regulations that prohibit or restrict employment-related businesses like ours. | ||
• | Require additional licensing or add restrictions on existing licenses to provide employment-related services. | ||
• | Increase taxes or make changes in the way in which taxes are calculated for providers of employment related services. |
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• | Make changes in the way in which employee benefits are required for providers of employment related services. |
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• | The lack of readily available price quotations. | ||
• | The absence of consistent administrative supervision of “bid” and “ask” quotations. | ||
• | Lower trading volume. | ||
• | Market conditions. |
• | Actual or anticipated variations in our operating results. | ||
• | Changes in the market valuations of other human capital solutions companies. | ||
• | Announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures or capital commitments. | ||
• | Adoption of new accounting standards affecting our industry. | ||
• | Additions or departures of key personnel. | ||
• | Introduction of new services by our competitors or us. | ||
• | Sales of our common stock or other securities in the open market. | ||
• | Changes in financial estimates by securities analysts. | ||
• | Conditions or trends in the market in which we operate. | ||
• | Changes in earnings estimates and recommendations by financial analysts. | ||
• | Our failure to meet financial analysts’ performance expectations. | ||
• | Other events or factors, many of which are beyond our control. |
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RELATED STOCKHOLDER MATTERS
High | Low | |||||||
Third quarter ended October 1, 2006 | $ | 5.30 | $ | 5.15 | ||||
Fourth quarter ended December 31, 2006 | $ | 5.25 | $ | 5.15 | ||||
First quarter ended April 1, 2007 | $ | 5.25 | $ | 5.00 | ||||
Second quarter ended July 1, 2007 | $ | 5.25 | $ | 3.75 | ||||
Third quarter ended September 30, 2007 | $ | 3.75 | $ | 1.50 | ||||
Fourth quarter ended December 30, 2007 | $ | 2.50 | $ | 1.50 | ||||
First quarter ended March 30, 2008 | $ | 2.50 | $ | 1.50 | ||||
Second quarter ended June 29, 2008 | $ | 2.45 | $ | 1.05 |
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Number of | ||||||||||||
securities remaining | ||||||||||||
available for future | ||||||||||||
Weighted-average | issuance under | |||||||||||
Number of securities to be | exercise price of | compensation plans | ||||||||||
issued upon exercise of | outstanding | (excluding | ||||||||||
outstanding options, | options, warrants | securities reflected | ||||||||||
Plan Category | warrants and rights | and rights | in column (a)) | |||||||||
(a) | (b) | (c) | ||||||||||
Equity compensation plans approved by security holders | 2,072,092 | $ | 2.61 | 2,734,908 | ||||||||
Equity compensation plans not approved by security holders | — | — | — | |||||||||
Total | 2,072,092 | $ | 2.61 | 2,734,908 | ||||||||
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Six Months Ended | Years Ended | |||||||||||||||||||||||||||
(All amounts in thousands, except per | June 2008 | June 2007 | 2007 | 2006 | 2005 | 2004 | 2003 | |||||||||||||||||||||
share data) | (unaudited) | (unaudited) | ||||||||||||||||||||||||||
Revenues, net | $ | 89,328 | $ | 80,960 | $ | 173,893 | $ | 128,790 | $ | 111,563 | $ | 97,126 | $ | 85,568 | ||||||||||||||
Gross profit | $ | 22,652 | $ | 22,036 | $ | 45,329 | $ | 36,719 | $ | 34,370 | $ | 30,200 | $ | 27,231 | ||||||||||||||
SG&A expenses | $ | 18,660 | $ | 18,210 | $ | 37,432 | (d) | $ | 28,311 | (a) | $ | 45,478 | (b) | $ | 23,936 | $ | 22,630 | |||||||||||
Depreciation and amortization | $ | 1,370 | $ | 1,097 | $ | 2,563 | $ | 573 | $ | 729 | $ | 734 | $ | 707 | ||||||||||||||
Operating income (loss) | $ | 2,622 | $ | 2,729 | $ | 5,334 | $ | 7,835 | $ | (11,837 | ) | $ | 5,530 | $ | 3,894 | |||||||||||||
Other income (expense) | $ | (688 | ) | $ | 6,840 | $ | 5,543 | $ | (7,959 | )(c) | $ | (256 | ) | $ | (703 | ) | $ | (798 | ) | |||||||||
Net income (loss) | $ | 2,612 | $ | 9,778 | $ | 10,966 | $ | 1,309 | $ | (15,725 | ) | $ | 2,793 | $ | 1,673 | |||||||||||||
Dividend paid to Series C preferred shareholders | $ | — | $ | — | $ | — | $ | — | $ | (6,300 | ) | $ | — | $ | — | |||||||||||||
Valuation of redeemable preferred stock | $ | — | $ | — | $ | — | $ | — | $ | (36,693 | ) | $ | — | $ | — | |||||||||||||
Income (loss) available to common stockholders | $ | 2,612 | $ | 9,778 | $ | 10,966 | $ | 1,309 | $ | (58,718 | ) | $ | 2,793 | $ | 1,673 | |||||||||||||
Income (loss) per share: | ||||||||||||||||||||||||||||
Basic earnings (loss) per share | $ | 0.25 | $ | 1.62 | $ | 1.67 | $ | 0.23 | $ | (10.95 | ) | $ | 0.51 | $ | 0.30 | |||||||||||||
Weighted average number of shares outstanding | 10,548 | 6,024 | 6,550 | 5,745 | 5,363 | 5,471 | 5,547 | |||||||||||||||||||||
Diluted earnings (loss) per share | $ | 0.22 | $ | 0.97 | $ | 1.04 | $ | 0.23 | $ | (10.95 | ) | $ | 0.51 | $ | 0.30 | |||||||||||||
Weighted average number of shares outstanding | 15,811 | 12,715 | 15,586 | 5,745 | 5,363 | 5,471 | 5,547 | |||||||||||||||||||||
Total assets | $ | 68,758 | $ | 70,927 | $ | 69,486 | $ | 57,202 | $ | 52,920 | $ | 51,014 | $ | 51,953 | ||||||||||||||
Long-term debt, net | $ | 17,375 | $ | 22,880 | $ | 16,114 | $ | 15,138 | $ | 17,824 | $ | 17,800 | $ | 17,370 | ||||||||||||||
Long-term mandatorily redeemable preferred stock, net | $ | 5,886 | $ | 3,264 | $ | 4,588 | $ | 2,013 | $ | — | $ | 5,856 | $ | 5,837 | ||||||||||||||
Stockholders’ equity (deficit) | $ | 4,256 | $ | (8,936 | ) | $ | 983 | $ | (19,641 | ) | $ | (24,921 | ) | $ | 11,234 | $ | 8,443 | |||||||||||
Dividends declared and paid per common share | $ | — | $ | — | $ | — | $ | — | $ | 1.20 | $ | — | $ | — |
(a) | Includes $1,048 of non-recurring compensation expense in connection with the March 31, 2006 recapitalization. | |
(b) | Includes $21,152 of share based compensation related to our restricted stock plan recorded in connection with the March 31, 2006 recapitalization. | |
(c) | Includes $3,359 of expenses recorded in connection with the March 31, 2006 recapitalization. | |
(d) | Includes $2,355 of compensation expense related to the granting of stock options and conversion of warrants. |
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2008 Quarters | 1st | 2nd | ||||||
Revenues, net | $ | 46,018 | $ | 43,310 | ||||
Gross profit | $ | 11,134 | $ | 11,518 | ||||
Net income (loss) | $ | (169 | ) | $ | 2,781 | |||
Income (loss) available to common shareholders | $ | (169 | ) | $ | 2,781 | |||
Income (loss) per share: | ||||||||
Basic | $ | (0.02 | ) | $ | 0.26 | |||
Diluted | $ | (0.04 | ) | $ | 0.19 |
2007 Quarters | 1st | 2nd | 3rd | 4th | ||||||||||||
Revenues, net | $ | 36,621 | $ | 44,338 | $ | 46,889 | $ | 46,045 | ||||||||
Gross profit | $ | 10,177 | $ | 11,859 | $ | 12,149 | $ | 11,144 | ||||||||
Net income (loss) | $ | 991 | $ | 8,788 | $ | 8,947 | $ | (7,760 | ) | |||||||
Income (loss) available to common shareholders | $ | 991 | $ | 8,788 | $ | 8,947 | $ | (7,760 | ) | |||||||
Income (loss) per share: | ||||||||||||||||
Basic | $ | 0.16 | $ | 1.46 | $ | 1.48 | $ | (0.98 | ) | |||||||
Diluted | $ | 0.16 | $ | 0.77 | $ | 0.57 | $ | (0.98 | ) |
2006 Quarters | 1st | 2nd | 3rd | 4th | ||||||||||||
Revenues, net | $ | 31,208 | $ | 33,411 | $ | 33,287 | $ | 30,884 | ||||||||
Gross profit | $ | 8,844 | $ | 9,710 | $ | 9,203 | $ | 8,962 | ||||||||
Net income (loss) | $ | (1,691 | ) | $ | 1,330 | $ | 1,085 | $ | 585 | |||||||
Income (loss) available to common shareholders | $ | (1,691 | ) | $ | 1,330 | $ | 1,085 | $ | 585 | |||||||
Income (loss) per share: | ||||||||||||||||
Basic | $ | (0.35 | ) | $ | 0.22 | $ | 0.18 | $ | 0.10 | |||||||
Diluted | $ | (0.35 | ) | $ | 0.21 | $ | 0.18 | $ | 0.10 |
OPERATIONS
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• | The stock options are granted at-the-money; | ||
• | Exercisability is conditional only on performing service through the vesting date; | ||
• | If an employee terminates service prior to vesting, the employee would forfeit the stock options; | ||
• | If an employee terminates service after vesting, the employee would have a limited time to exercise the vested stock options (typically 30-90 days); | ||
• | The stock options are nontransferable and nonhedgeable; and | ||
• | The Company utilizes the Black-Scholes closed-form model for valuing its employee stock options. |
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Six Months | Year | |||||||||||||||||||
2008 | 2007 | 2007 | 2006 | 2005 | ||||||||||||||||
(unaudited) | (unaudited) | |||||||||||||||||||
REVENUES: | ||||||||||||||||||||
Staffing | 81.8 | % | 78.4 | % | 80.4 | % | 73.9 | % | 72.8 | % | ||||||||||
PEO | 18.2 | % | 21.6 | % | 19.6 | % | 26.1 | % | 27.2 | % | ||||||||||
TOTAL REVENUES, net | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||||
COST OF SERVICES | 74.6 | % | 72.8 | % | 73.9 | % | 71.5 | % | 69.2 | % | ||||||||||
GROSS PROFIT | 25.4 | % | 27.2 | % | 26.1 | % | 28.5 | % | 30.8 | % | ||||||||||
OPERATING EXPENSES | ||||||||||||||||||||
Selling, general and administrative | 20.9 | % | 22.5 | % | 21.5 | %(d) | 22.0 | %(a) | 40.8 | %(b) | ||||||||||
Depreciation and amortization | 1.5 | % | 1.3 | % | 1.5 | % | 0.4 | % | 0.7 | % | ||||||||||
Total operating expenses | 22.4 | % | 23.8 | % | 23.0 | % | 22.4 | % | 41.5 | % | ||||||||||
OPERATING INCOME (LOSS) | 3.0 | % | 3.4 | % | 3.1 | % | 6.1 | % | -10.7 | % | ||||||||||
OTHER INCOME (EXPENSE) | ||||||||||||||||||||
Interest expense: | ||||||||||||||||||||
Other interest expense, net of interest income | -5.3 | % | -6.1 | % | -5.3 | % | -5.1 | % | -0.2 | % | ||||||||||
Fair market valuation of warrant liability | 5.2 | % | 14.5 | % | 8.7 | % | 1.3 | % | 0.0 | % | ||||||||||
Other income (expense) | -0.7 | % | 0.0 | % | -0.2 | % | -2.4 | %(c) | 0.0 | % | ||||||||||
Total other income (expense), net | -0.8 | % | 8.4 | % | 3.2 | % | -6.2 | % | -0.2 | % | ||||||||||
INCOME (LOSS) BEFORE INCOME TAXES | 2.2 | % | 11.8 | % | 6.3 | % | -0.1 | % | -10.9 | % | ||||||||||
INCOME TAXES | -0.8 | % | -0.3 | % | 0.0 | % | -1.1 | % | 3.2 | % | ||||||||||
NET INCOME (LOSS) | 3.0 | % | 12.1 | % | 6.3 | % | 1.0 | % | -14.1 | % | ||||||||||
(a) | Includes $1,048,000 (<1%) of non-recurring compensation expense in connection with the March 31, 2006 recapitalization. | |
(b) | Includes $21,152,000 (19.0%) of share based compensation related to our restricted stock plan in connection with the March 31, 2006 recapitalization. | |
(c) | Includes $3,359,000 (2.6%) of expenses recorded in connection with the March 31, 2006 recapitalization. | |
(d) | Includes $2,355,000 (1.4%) of share based compensation expense related to the granting of stock options and conversion of warrants. |
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Gross reporting | Net reporting | |||||||||||
Years | method | Reclassification | method | |||||||||
2007 | ||||||||||||
Revenues, net | $ | 577,927,000 | $ | (404,034,000 | ) | $ | 173,893,000 | |||||
Cost of services | (532,598,000 | ) | 404,034,000 | (128,564,000 | ) | |||||||
Gross profit | $ | 45,329,000 | $ | — | $ | 45,329,000 | ||||||
2006 | ||||||||||||
Revenues, net | $ | 507,906,000 | $ | (379,116,000 | ) | $ | 128,790,000 | |||||
Cost of services | (471,187,000 | ) | 379,116,000 | (92,071,000 | ) | |||||||
Gross profit | $ | 36,719,000 | $ | — | $ | 36,719,000 | ||||||
2005 | ||||||||||||
Revenues, net | $ | 439,991,000 | $ | (328,428,000 | ) | $ | 111,563,000 | |||||
Cost of services | (405,621,000 | ) | 328,428,000 | (77,193,000 | ) | |||||||
Gross profit | $ | 34,370,000 | $ | — | $ | 34,370,000 | ||||||
For the six months ended June 2008 | ||||||||||||
Revenues, net | $ | 283,722,000 | $ | (194,394,000 | ) | $ | 89,328,000 | |||||
Cost of services | (261,070,000 | ) | 194,394,000 | (66,676,000 | ) | |||||||
Gross profit | $ | 22,652,000 | $ | — | $ | 22,652,000 | ||||||
For the six months ended June 2007 | ||||||||||||
Revenues, net | $ | 283,193,000 | $ | (202,233,000 | ) | $ | 80,960,000 | |||||
Cost of services | (261,157,000 | ) | 202,233,000 | (58,924,000 | ) | |||||||
Gross profit | $ | 22,036,000 | $ | — | $ | 22,036,000 | ||||||
• | Additional revenue from the acquisition of Career Blazers of $8.1 million; | ||
• | 6.6% increase in permanent placement fee revenues; | ||
• | 10.3% increase in the number of billed hours in the commercial division, offset by; | ||
• | 10.6% decrease in the number of billed hours in the professional division. |
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• | lower average outstanding balances on our senior credit facilities and senior subordinated secured notes in 2008 compared to 2007 and; | ||
• | lower interest rates on our mandatorily redeemable preferred stock and senior secured subordinated notes; offset by; | ||
• | $525,000 of unamortized debt issuance costs and termination fees recorded related to the refinancing of our senior credit facility in 2008; and | ||
• | $395,000 of unamortized debt issuance costs and termination fees recorded related to the refinancing of our senior credit facility in 2007. |
• | Additional revenue from the acquisition of Career Blazers of $47.1 million, | ||
• | 3.8% increase in the number of billed hours in professional division of the staffing services segment, excluding Career Blazer revenues; | ||
• | 3.6% increase in average bill rates in the staffing services segment, excluding Career Blazer revenues; offset by; |
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• | 4.6% decrease in billed hours in the commercial division of the staffing services segment. |
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Payments due by period | ||||||||||||||||||||
Less than | 1-3 | 3-5 | After | |||||||||||||||||
Total | 1 year | years | years | 5 years | ||||||||||||||||
Long-term debt | $ | 33,388,000 | $ | 9,375,000 | $ | — | $ | 24,013,000 | $ | — | ||||||||||
Mandatorily redeemable convertible preferred stock (a) | 19,991,000 | — | — | — | 19,991,000 | |||||||||||||||
Operating leases (b) | 10,046,000 | 2,020,000 | 2,871,000 | 1,672,000 | 3,483,000 | |||||||||||||||
Total contractual cash obligations | $ | 63,425,000 | $ | 11,395,000 | $ | 2,871,000 | $ | 25,685,000 | $ | 23,474,000 | ||||||||||
(a) | Fully accreted balance | |
(b) | Excluding sub lease rentals |
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• | Temporary Placement Service, Inc. (“TPS”) | • | Friendly Advanced Software Technology, Inc. (“FAST”) | |||
• | Main Line Personnel Services, Inc. (“Main Line”) | • | Excell Personnel Services Corporation (“Excell”) |
• | Global Employment Solutions PEO, Inc. | • | Global Employment Solutions PEO IV, Inc. | |||
• | Global Employment Solutions PEO II, Inc. | • | Global Employment Solutions PEO V, Inc. | |||
• | Global Employment Solutions PEO III, Inc. | • | Global Employment Solutions PEO VI, Inc. |
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• | Global Employment Solutions PEO VII, Inc. | • | Global Employment Solutions PEO IX, Inc. | |||
• | Global Employment Solutions PEO VIII, Inc. | • | Keystone Alliance, Inc. |
• | Relief from the burden of employment administration. | ||
• | A wide range of personnel management solutions through a team of experienced professionals. | ||
• | Improved employment practices, compliance and risk management to reduce potential liabilities. | ||
• | Access to a comprehensive employee benefits package, allowing customers to be competitive in the labor market. | ||
• | Improved profitability resulting from safety engineering, control and management of workers’ compensation losses and costs, and “one-stop shopping” for employee benefits, workers’ compensation insurance, 401(k) plans, payroll services, risk management services and guidance for compliance with most federal and state employment laws. | ||
• | Safety training and education. |
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• | Co-employ workers at customer locations, and thereby assume responsibility as an employer for specified purposes of the workers assigned to the client locations. | ||
• | Reserve a right of direction and control of the employees. | ||
• | Share or allocate with customer employers responsibilities in a manner consistent with maintaining the customers’ responsibility for their products or services. | ||
• | Pay wages and employment taxes of the employees out of our own accounts. | ||
• | Report, collect and deposit employment taxes with state and federal authorities. | ||
• | Establish and maintain an employment relationship with our employees that are intended to be long-term and not temporary. | ||
• | Retain a right to hire, reassign and fire the employees. |
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Name | Age | Position | ||||
Howard Brill | 38 | President, chief executive officer and director of Global Employment Holdings | ||||
Steven List | 39 | Chief operating officer and director of Global Employment Holdings | ||||
Dan Hollenbach | 52 | Chief financial officer of Global Employment Holdings | ||||
Terry Koch | 54 | President of PEO services | ||||
Stephen Pennington | 66 | President of staffing services | ||||
Luci Staller Altman | 42 | Director of Global Employment Holdings | ||||
Richard Goldman | 52 | Director of Global Employment Holdings | ||||
Charles Gwirtsman | 54 | Director of Global Employment Holdings |
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• | Individual performance; |
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• | The success of the business division within the individual’s area of responsibility; | ||
• | Competitiveness with salary levels of similarly sized companies; | ||
• | Internal compensation comparability standards and; | ||
• | Our ability to pay an appropriate and competitive salary based upon our size and profitability. |
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• | Base salary: Mr. Brill received a base salary of $425,000. | ||
• | Annual incentive compensation: Pursuant to Mr. Brill’s incentive compensation arrangement, Mr. Brill received a $215,000 bonus for fiscal 2007 based on our earnings before interest, income taxes, depreciation, and amortization and achievement of certain management objectives set by the compensation committee. The bonus represented 51% of his base salary and was 63% of his 2007 bonus opportunity amount. | ||
• | Long-term incentive compensation: Mr. Brill was granted 411,500 stock options during fiscal year 2007. |
Option | ||||||||||||||||||||||||
Awards | Other | |||||||||||||||||||||||
Name and principal position | Year | Salary | Bonus | (5) | compensation | Total | ||||||||||||||||||
Howard Brill | 2007 | $ | 404,038 | 215,000 | 801,430 | 79,298 | (1)(2) | $ | 1,499,766 | |||||||||||||||
(Chief executive officer) | 2006 | $ | 358,846 | 187,500 | — | 412,624 | (3)(2) | $ | 958,970 | |||||||||||||||
Steven List(4) | 2007 | $ | 241,250 | 67,705 | 158,546 | 5,996 | (1) | $ | 473,497 | |||||||||||||||
(Chief operating officer) | ||||||||||||||||||||||||
Dan Hollenbach | 2007 | $ | 199,039 | 25,000 | 163,929 | 4,759 | (1)(2) | $ | 392,727 | |||||||||||||||
(Chief financial officer) | 2006 | $ | 170,678 | 45,000 | — | 30,000 | (3) | $ | 245,678 | |||||||||||||||
Stephen Pennington | 2007 | $ | 203,000 | 30,450 | 191,926 | 628 | (1) | $ | 426,004 | |||||||||||||||
(President of staffing services) | 2006 | $ | 195,154 | 50,000 | — | 255,000 | (3) | $ | 500,154 | |||||||||||||||
Terry Koch | 2007 | $ | 178,462 | 32,400 | 119,852 | 1,379 | (1) | $ | 332,093 | |||||||||||||||
(President of PEO services) | 2006 | $ | 150,000 | 42,000 | — | — | $ | 192,000 |
(1) | Represents amount reimbursed to the officers for 2007, grossed up for taxes, related to original issue discount interest income incurred on the subordinated debt owned by each. Mr. Brill — $62,798; Mr. List — $5,996; Mr. Hollenbach — $1,159; Mr. Pennington — $628; and Mr. Koch — $1,379. | |
(2) | Consists of the business portion of automobile lease payments or automobile allowance. In Mr. Brill’s case, an aggregate of $16,500 in 2007 and $10,500 in 2006 for automobile lease payments or automobile allowance and $2,124 of health insurance premiums in 2006. In Mr. Hollenbach’s case, an aggregate of $3,600 related to the business portion of automobile lease payments in 2007. | |
(3) | Includes retention bonuses paid in connection with our March 2006 recapitalization in the following amounts for the following individuals: Howard Brill $400,000, Dan Hollenbach $30,000 and Stephen Pennington $255,000. | |
(4) | Mr. List became our chief operating officer in March 2007. These amounts exclude any compensation associated with his role on the board of directors prior to that, as disclosed in the board of director compensation table under the “Compensation of Directors” section above. | |
(5) | Stock awards reflect the portion of stock option grants awarded to officers under the Company’s 2006 Stock Plan and warrant conversion compensation that was recognized by the company as stock based compensation expense in fiscal |
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2007 in accordance with the provisions of revised Statement of Financial Accounting Standards No. 123(r), Share-Based Payments. |
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Wgt. Avg. | ||||||||||||||||||||||||
Remaining | ||||||||||||||||||||||||
Wgt. Avg. | Contractual | Wgt. Avg. | Aggregate | |||||||||||||||||||||
Range of | Stock | Exercise | Life | Grant Date | Intrinsic | |||||||||||||||||||
Exercise Prices | Options | Price | (Years) | Fair Value | Value | |||||||||||||||||||
As of December 2007 | ||||||||||||||||||||||||
Outstanding | $ | 1.50 - $3.00 | 1,499,540 | $ | 2.97 | 9.32 | $ | 2.58 | $ | 28,500 | ||||||||||||||
Vested | $ | 3.00 | 273,329 | $ | 3.00 | 9.13 | $ | 3.04 | — | |||||||||||||||
Nonvested | $ | 1.50 - $3.00 | 1,226,211 | $ | 2.96 | 9.36 | $ | 2.48 | $ | 28,500 | ||||||||||||||
Period Activity | ||||||||||||||||||||||||
Issued | $ | 1.75 | 606,802 | $ | 1.75 | — | $ | 0.94 | — | |||||||||||||||
Exercised | — | — | — | — | — | |||||||||||||||||||
Forfeited | $ | 3.00 | 34,250 | $ | 3.00 | — | $ | 1.63 | — | |||||||||||||||
Expired | — | — | — | — | — | |||||||||||||||||||
As of June 2008 | ||||||||||||||||||||||||
Outstanding | $ | 1.50 - $3.00 | 2,072,092 | $ | 2.61 | 9.10 | $ | 2.08 | — | |||||||||||||||
Vested and Exercisable | $ | 3.00 | 587,835 | $ | 3.00 | 8.64 | $ | 3.06 | — | |||||||||||||||
Nonvested | $ | 1.50 - $3.00 | 1,484,257 | $ | 2.46 | 9.28 | $ | 1.73 | — |
As of June 2008: | ||||
Total intrinsic value of options exercised: | $ | — | ||
Total fair value of shares vested: | $ | 1,801,000 | ||
Unrecognized compensation cost related to nonvested awards: | $ | 1,788,000 | ||
Weighted-average period over which nonvested awards are expected to be recognized: | 1.31 years |
Number of Securities | Option | Option | ||||||||||
Underlying Unexercised | Exercise | Expiration | ||||||||||
Name | Options | Price | Date | |||||||||
Howard Brill | 262,500 | $ | 3.00 | 2/14/2017 | ||||||||
149,000 | $ | 3.00 | 8/16/2017 | |||||||||
150,000 | $ | 1.75 | 4/3/2018 | |||||||||
Steven List(1) | 12,323 | $ | 3.00 | 2/14/2017 | ||||||||
100,000 | $ | 3.00 | 3/14/2017 | |||||||||
68,100 | $ | 3.00 | 8/16/2017 | |||||||||
90,000 | $ | 1.75 | 4/3/2018 | |||||||||
Dan Hollenbach | 72,916 | $ | 3.00 | 2/14/2017 | ||||||||
41,400 | $ | 3.00 | 8/16/2017 | |||||||||
60,000 | $ | 1.75 | 4/3/2018 | |||||||||
Terry Koch | 54,028 | $ | 3.00 | 2/14/2017 | ||||||||
39,900 | $ | 3.00 | 8/16/2017 | |||||||||
35,000 | $ | 1.75 | 4/3/2018 |
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Number of Securities | Option | Option | ||||||||||
Underlying Unexercised | Exercise | Expiration | ||||||||||
Name | Options | Price | Date | |||||||||
Steven Pennington | 72,011 | $ | 3.00 | 2/14/2017 | ||||||||
4,700 | $ | 3.00 | 8/16/2017 | |||||||||
25,000 | $ | 1.75 | 4/3/2018 |
(1) | On March 14, 2006, our compensation committee awarded Steven List 100,000 stock options in his capacity as our chief operating officer .. Each of the awarded stock options is exercisable into one share of our common stock at an exercise price of $3.00, the closing quoted market price on March 14, 2007. Mr. List’s options vest one third on the first anniversary of the grant date, one third on the second anniversary of the grant date, and one third on the third anniversary of the grant date. Previously, on February 14, 2007, our compensation committee awarded Mr. List 34,125 options in his capacity as one of our directors. Upon his becoming our chief operating officer and in connection with awarding him 100,000 stock options, we agreed to accelerate the vesting of 948 options granted on February 14, 2007, the pro rata share of the 34,125 aggregate amount of the options that would have vested between February 14, 2007 and March 13, 2007. Mr. List retained the 11,375 stock options that vested upon grant and agreed to forfeit the remaining 21,802 options he received as a director on February 14, 2007. |
All other | ||||||||||||||||
Name | Fee earned | Option awards(4) | Compensation (3) | Total | ||||||||||||
Luci Staller Altman | $ | 15,625 | 48,311 | 3,167 | $ | 67,103 | ||||||||||
Richard Goldman | $ | 20,000 | 67,349 | 3,167 | $ | 90,516 | ||||||||||
Charles Gwirtsman | $ | 15,000 | 89,866 | 6,280 | (2) | $ | 111,146 | |||||||||
Steven List(1) | $ | 4,011 | 32,331 | — | $ | 36,342 | ||||||||||
Jay Wells(5) | $ | 20,000 | 72,467 | 655 | $ | 93,122 |
(1) | Mr. List served on our audit and compensation committees until his appointment as our chief operating officer in March of 2007. | |
(2) | Paid to Gwirtsman Family Partners, LLC of which Mr. Gwirtsman is the managing member. | |
(3) | Represents amount reimbursed to the directors, grossed up for taxes, related to original issue discount interest income incurred on the subordinated debt owned by each. | |
(4) | Stock awards reflect the portion of stock option grants awarded to board members under the Company’s 2006 Stock Plan that was recognized by the company as stock based compensation expense in fiscal 2007 in accordance with the provisions of revised Statement of Financial Accounting Standards No. 123(r), Share-Based Payments. | |
(5) | Mr. Wells resigned from the board of directors effective April 16, 2008. |
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2007 | 2008 | |||||||
Number of | Number of | |||||||
Name | options | options | ||||||
Luci Staller Altman | 36,500 | 30,432 | ||||||
Richard Goldman | 51,125 | 45,649 | ||||||
Charles Gwirtsman | 68,500 | 50,721 | ||||||
Steven List (1) | 12,323 | — | ||||||
Jay Wells (2) | 54,750 | — |
(1) | We initially awarded Mr. List 34,125 options on February 14, 2007, of which 11,375 vested upon grant. Upon his becoming our chief operating officer on March 14, 2007, our compensation committee awarded Mr. List an aggregate of 100,000 stock options as further disclosed herein under the caption “Executive Compensation — Grants of plan-based awards and our management equity plan.” In connection therewith, we agreed to accelerate the vesting of 948 options granted on February 14, 2007, the pro rata share of the 34,125 aggregate amount of the options that would have vested between February 14, 2007 and March 13, 2007. Mr. List retained the 11,375 stock options that vested upon grant and agreed to forfeit the remaining 21,802 options he received as a director on February 14, 2007. | |
(2) | At the date of Mr. Wells’ resignation, he was vested in 24,500 options. The board of directors extended to April 16, 2010, his right to exercise such vested options. The remaining options were forfeited. |
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Name | Benefit (base pay) | |
Howard Brill | Two years’ base salary and bonus equal to the amount paid for the previous year | |
Steven List | One year base salary* and bonus equal to the amount paid for the previous year | |
Dan Hollenbach | One year base salary and bonus equal to the amount paid for the previous year | |
Terry Koch | One year base salary | |
Stephen Pennington | One year base salary and bonus equal to the amount paid for the previous year |
* | Eighteen months upon the sale of the company. |
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AND MANAGEMENT
Name of beneficial owner | ||||||||||||||||||||||||
Shares of | ||||||||||||||||||||||||
Conversion | Conversion | Common | ||||||||||||||||||||||
of | of | Common | Stock | |||||||||||||||||||||
Convertible | Preferred | Stock | Vested | Beneficially | Percentage | |||||||||||||||||||
Principal security holders: | Note | Stock | Owned | Options | Owned | of Stock | ||||||||||||||||||
Howard Brill | 228,680 | 138,318 | 924,646 | 224,667 | 1,516,311 | 12.57 | % | |||||||||||||||||
Charles Gwirtsman (1) | 53,827 | 21,464 | 1,334,679 | 38,000 | 1,447,970 | 12.07 | % | |||||||||||||||||
Other Officers and Directors: | ||||||||||||||||||||||||
Steven List | — | 53,199 | 214,796 | 68,356 | 336,351 | 3.09 | % | |||||||||||||||||
Dan Hollenbach | — | 10,639 | 100,403 | 62,411 | 173,453 | 1.62 | % | |||||||||||||||||
Stephen Pennington | 2,614 | 15,959 | 421,959 | 49,574 | 490,106 | 4.44 | % | |||||||||||||||||
Terry Koch | — | 10,639 | 171,427 | 49,319 | 231,385 | 2.15 | % | |||||||||||||||||
Luci Altman | 11,533 | — | 435 | 20,333 | 32,302 | 0.31 | % | |||||||||||||||||
Richard Goldman | 11,533 | — | 21,706 | 28,417 | 61,656 | 0.58 | % | |||||||||||||||||
All directors and executive officers as a group | 308,187 | 250,218 | 3,190,051 | 541,076 | 4,289,533 | 36.82 | % | |||||||||||||||||
(1) | Includes (i) 5,005 shares of common stock directly owned by Mr. Gwirtsman, (ii) 3,754 shares owned by his spouse, (iii) 1,001 shares held by his spouse as custodian for his children, (iv) 104,447 shares owned by KRG Capital Management, L.P., of which Mr. Gwirtsman is a managing director, (v) 58,023 shares owned by KRG Colorado, LLC, of which Mr. Gwirtsman is a managing director, (vi) 31,045 shares owned by Capital Resources Growth, Inc., of which Mr. Gwirtsman is the President and sole shareholder, and (vii) 1,131,404 owned by Gwirtsman Family Partners LLC, of which Mr. Gwirtsman is the managing member. For the securities owned by KRG Capital Management and KRG Colorado, Mr. Gwirtsman shares voting and investment power with the other managing directors thereof. |
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Principal Amount | Interest Earned | |||||||||||||||||||
Maximum | Current | |||||||||||||||||||
amount | amount | |||||||||||||||||||
Name | Relationship | owned | owned | 2007 | 2008 | |||||||||||||||
Howard Brill | President, chief executive officer and director | $ | 1,150,000 | $ | 1,006,193 | (5) | $ | 100,625 | $ | 56,892 | ||||||||||
Dan Hollenbach | Chief financial officer | $ | 29,000 | $ | — | (3) | $ | 1,958 | $ | — | ||||||||||
Terry Koch | President of PEO services | $ | 34,500 | $ | — | (3) | $ | 2,329 | $ | — | ||||||||||
Steven List | Chief operating officer and director | $ | 150,000 | $ | — | (3) | $ | 10,125 | $ | — | ||||||||||
Stephen Pennington | President of staffing services | $ | 11,500 | $ | 11,500 | $ | 1,006 | $ | 603 | |||||||||||
Luci Staller Altman | Director | $ | 58,000 | $ | 50,747 | (5) | $ | 5,075 | $ | 2,869 | ||||||||||
Richard Goldman | Director | $ | 58,000 | $ | 50,747 | (5) | $ | 5,075 | $ | 2,869 | ||||||||||
Charles Gwirtsman | Director | $ | 115,000 | $ | 115,000 | (1) | $ | 10,063 | $ | 6,031 | (2) | |||||||||
Jay Wells | Former Director | $ | 12,000 | $ | 12,000 | (4) | $ | 1,050 | $ | 629 |
(1) | Purchased by Gwirtsman Family Partners, LLC of which Mr. Gwirtsman is the managing member. |
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(2) | Earned by Gwirtsman Family Partners, LLC of which Mr. Gwirtsman is the managing member. | |
(3) | Notes were exchanged in connection with the Subscription Agreement, as more fully explained below. | |
(4) | Mr. Wells resigned effective April 16, 2008. | |
(5) | Repurchased as more fully explained below. |
Name | Aggregate Shares | |||
Howard Brill | 207,061 | |||
Steven List | 42,796 | |||
Dan Hollenbach | 12,124 | |||
Terry Koch | 6,411 | |||
Stephen Pennington | 39,774 | |||
Gwirtsman Family Partners, LLC(1) | 422,737 | |||
Jay Wells | 90 | |||
Luci Altman | 435 | |||
Richard Goldman | 8,373 | |||
Total | 739,801 |
(1) | Issued to Gwirtsman Family Partners, LLC of which Mr. Gwirtsman is the managing member. |
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Number of | Number of | |||||||||||
shares | shares | |||||||||||
underlying | underlying | |||||||||||
warrants prior to | warrants after | Original | ||||||||||
transaction | transaction | Expiration date | ||||||||||
Note Warrants | 551,287 | — | March 31, 2011 | |||||||||
Preferred Warrants | 2,358,948 | 112,440 | * | March 31, 2013 | ||||||||
Common Warrants | 1,205,678 | — | March 31, 2013 | |||||||||
Placement Agent Warrants | 558,758 | — | March 31, 2013 | |||||||||
Backstop Warrants | 1,838,339 | — | September 30, 2014 | |||||||||
TOTAL | 6,513,010 | 112,440 | ||||||||||
* | - All held by a single holder and subject to exercise as explained above |
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Conversion | ||||||||||||||||||||||||
of | Conversion of | Preferred | ||||||||||||||||||||||
Convertible | Preferred | Stock | Common | |||||||||||||||||||||
Name of Selling Stockholder | Note | Stock | Warrants | Stock Owned | Total * | |||||||||||||||||||
Amatis Limited c/o Amaranth Advisors, LLC | (1 | ) | — | 88,665 | — | 77,040 | 192,305 | |||||||||||||||||
Arnold Kling | (2 | ) | — | — | — | 28,949 | 28,949 | |||||||||||||||||
Gwirtsman Family Partners, LLC, Charles Gwirtsman | D | 53,827 | 21,464 | — | 2,523 | 100,401 | ||||||||||||||||||
Context Advantage Master Fund, L.P. | (3 | ) | 227,347 | — | — | 55,424 | 350,975 | |||||||||||||||||
Cranshire Capital, L.P. | (4 | ) | — | — | — | 29,696 | 29,696 | |||||||||||||||||
Dan Hollenbach | O | — | 10,639 | — | 618 | 14,449 | ||||||||||||||||||
Diamond Opportunity Fund, LLC | (5 | ) | — | 88,665 | — | 77,040 | 192,305 |
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Conversion | ||||||||||||||||||||||||
of | Conversion of | Preferred | ||||||||||||||||||||||
Convertible | Preferred | Stock | Common | |||||||||||||||||||||
Name of Selling Stockholder | Note | Stock | Warrants | Stock Owned | Total * | |||||||||||||||||||
Enable Growth Partners LP | (6 | ) | — | 207,123 | — | 158,531 | 427,791 | |||||||||||||||||
Enable Opportunity Partners LP | (6 | ) | — | 34,047 | — | 26,060 | 70,321 | |||||||||||||||||
Fred Viarrial | E | — | 26,599 | — | 1,218 | 35,797 | ||||||||||||||||||
Gregory Bacharach | E | 11,533 | — | — | 435 | 15,428 | ||||||||||||||||||
Guggenheim Portfolio XXXI, LLC | (7 | ) | 122,411 | 26,599 | — | 8,886 | 202,599 | |||||||||||||||||
Howard Brill | O,D | 228,680 | 138,318 | — | 13,825 | 490,923 | ||||||||||||||||||
Jay Wells | (8 | ) | 2,727 | — | — | 90 | 3,635 | |||||||||||||||||
Kenneth Michaels | E | 130,682 | 10,639 | — | 4,713 | 188,430 | ||||||||||||||||||
Kirk Warshaw | (9 | ) | — | — | — | 7,237 | 7,237 | |||||||||||||||||
Lakeview Fund, LP | (10 | ) | — | 177,331 | — | 110,037 | 340,567 | |||||||||||||||||
Luci Staller Altman | D | 11,533 | — | — | 435 | 15,428 | ||||||||||||||||||
Michael Lazrus | E | — | — | — | 173 | 173 | ||||||||||||||||||
Nite Capital, LP | (11 | ) | — | — | — | 13,840 | 13,840 | |||||||||||||||||
Noam J. Rubinstein | (12 | ) | — | 4,433 | — | 5,321 | 11,084 | |||||||||||||||||
Pandora Select Partners, LP | (7 | ) | 192,192 | 56,155 | — | 18,914 | 341,765 | |||||||||||||||||
Pierce Diversified Strategy Master Fund LLC | (6 | ) | — | 42,559 | — | 32,585 | 87,912 | |||||||||||||||||
R&R Investment I, LLC | (13 | ) | — | — | — | 144,742 | 144,742 | |||||||||||||||||
R&R Opportunity Fund, LP | (13 | ) | — | — | — | 94,428 | 94,428 | |||||||||||||||||
Radcliffe SPC, Ltd. for and on behalf of the Class A Convertible Crossover Segregated Portfolio | (14 | ) | 1,135,447 | 1,108,324 | 112,440 | 525,161 | 3,554,503 | |||||||||||||||||
Richard Goldman | D | 11,533 | — | — | 435 | 15,428 | ||||||||||||||||||
Rodman & Renshaw, LLC | (15 | ) | — | — | — | 184,390 | 184,390 | |||||||||||||||||
Stephen Pennington | O | 2,614 | 15,959 | — | 687 | 24,831 | ||||||||||||||||||
Steven List | O,D | — | 53,199 | — | 3,125 | 72,284 | ||||||||||||||||||
Tariq Jawad | (16 | ) | — | 7,388 | — | 56,881 | 66,485 | |||||||||||||||||
Terry Koch | O | — | 10,639 | — | 659 | 14,490 | ||||||||||||||||||
Victory Park Capital | (17 | ) | 647,753 | 1,234,636 | — | 609,497 | 3,056,603 | |||||||||||||||||
Whitebox Convertible Arbitrage Partners, LP | (7 | ) | 1,602,977 | 348,752 | — | 119,303 | 2,656,551 | |||||||||||||||||
Whitebox Intermarket Partners, LP | (7 | ) | 192,192 | 56,155 | — | 18,914 | 341,765 | |||||||||||||||||
Whitebox Special Opportunities Funds Series B Partners, LP | (7 | ) | 197,120 | — | — | — | 256,256 | |||||||||||||||||
Other | (18 | ) | — | — | — | 29,321 | 29,321 |
* | These amounts represent the fully-diluted common stock ownership of the listed selling stockholders and include (i) common stock owned; (ii) 130% of the sum of the number of shares of common stock issuable upon conversion of the convertible notes and shares of Series A mandatorily redeemable convertible preferred stock, including accreted premium, as of the 24 th of August, 2008 and (iii) the number of shares of common stock issuable upon exercise of warrants. Ownership as so determined does not reflect “beneficial ownership” as calculated pursuant to Rule 13d-3 of the rules and regulations under the Securities Exchange Act of 1934, as amended. Accordingly, for purposes of setting forth ownership in the above table, we have disregarded the 4.99% limitation on ownership applicable to our convertible notes, convertible preferred stock and warrants. | |
O — current named officer D — current director E — current employee | ||
(1) | Amaranth Advisors L.L.C., the trading advisor for Amatis Limited, exercises dispositive power with respect to the common stock, convertible notes, convertible preferred stock and warrants to purchase common stock currently held by Amatis Limited, and voting and/or dispositive power with respect to the common stock issuable upon conversion of the convertible notes and convertible preferred stock, and exercise of warrants to purchase common stock. Amaranth Advisors L.L.C. has designated authorized signatories who will sign on behalf of Amatis Limited, the selling stockholder. Nicholas M. Maounis is the managing member of Amaranth Advisors L.L.C. |
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(2) | Consists solely of common stock. Arnold P. Kling served as the president and a director of R& R Acquisition I (before the recapitalization which involved changing its name to Global Employment Holdings) from its formation until the recapitalization on March 31, 2006. | |
(3) | Context Advantage Master Fund, LP resulted from a master-feeder conversion of Context Advantage Fund LP (formerly named Context Convertible Arbitrage Fund L.P.) and Context Offshore Advantage Fund Ltd (formerly named Context Convertible Arbitrage Offshore, Ltd.). Michael S. Rosen and William D. Fertig have voting and investment control over the securities held. | |
(4) | Mitchell P. Kopin, president of Downsview Capital Inc., the general partner of Cranshire Capital L.P., has sole voting control and dispositive powers of the securities. Mr. Kopin disclaims all beneficial ownership of the securities. | |
(5) | David Hokin, Rob Rubin and Richard Marks in their capacities as manager and managing directors of Diamond Opportunity Fund, LLC, respectively, have shared power to vote and dispose of the shares owned by Diamond Opportunity Fund, LLC. Messrs. Hokin, Rubin and Marks disclaim beneficial ownership of these shares. | |
(6) | Mitch Levine is the managing member of Enable Capital Management LLC and the manager of Enable Growth Partners LP., Enable Opportunity Partners LP., and Pierce Diversified Strategy Master Fund LLC. Mr. Levine has discretionary authority to vote and dispose of the securities. | |
(7) | Whitebox Advisors, LLC has an investment management agreement with Guggenheim Portfolio Company XXXI LLC. As a result of this relationship, Andrew Redleaf of Whitebox Advisors, LLC may be deemed to have indirect beneficial ownership of the shares of common stock beneficially owned by Guggenheim Portfolio Company XXXI LLC. . Andrew Redleaf of Whitebox Advisors, LLC is the managing member of the general partner of Pandora Select Partners, LP, Pandora select Advisors, LLC. As a result of this relationship, Andrew Redleaf may be deemed to have indirect beneficial ownership of the shares of common stock beneficially owned by Pandora Select Partners, LP. Andrew Redleaf of Whitebox Advisors, LLC is the managing member of the general partner of Whitebox Convertible Arbitrage Partners, L.P., Whitebox Convertible Arbitrage Advisors, LLC. As a result of this relationship, Andrew Redleaf may be deemed to have indirect beneficial ownership of the shares of common stock beneficially owned by Whitebox Convertible Arbitrage Partners, L.P. Andrew Redleaf of Whitebox Advisors, LLC is the managing member of the general partner of Whitebox Intermarket Partners, L.P., Whitebox Intermarket Advisors, LLC. As a result of this relationship, Andrew Redleaf may be deemed to have indirect beneficial ownership of the shares of common stock beneficially owned by Whitebox Intermarket Partners, L.P. | |
(8) | Mr. Wells was one of our directors and served in that position from March 2006 until his resignation in April 2008. | |
(9) | Consists solely of common stock. Kirk M. Warshaw served as the secretary and chief financial officer of R&R Acquisition I from its formation until the recapitalization on March 31, 2006. | |
(10) | Ari Levy has sole voting control and dispositive powers of the securities. | |
(11) | Keith Goodman, manager of the general partner of Nite Capital, LP, has voting control and investment discretion over securities held by Nite Capital LP. Mr. Goodman disclaims beneficial ownership of the shares held by Nite Capital, LP. |
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(12) | Mr. Rubenstein is an employee of Rodman & Renshaw , which served as a placement agent in the recapitalization of Global Employment Solutions on March 31, 2006 and is an affiliate of R&R Investment I, one of the original stockholders of R&R Acquisition I. | |
(13) | R&R Investments I and R&R Opportunity Find, LP are affiliates of Rodman & Renshaw who served as the placement agent in the recapitalization of Global Employment Solutions on March 31, 2006 and who is a market maker for our common stock on the OTC BB. | |
(14) | Pursuant to an investment agreement, RG Capital Management, L.P. serves as the investment manager of Radcliffe SPC, Ltd.’s Class A Convertible Crossover Segregated Portfolio. RGC Management Company, LLC is the general partner of RG Capital Management, L.P. Steve Katznelson and Gerald Stahlecker serve as the managing members of RGC Management Company, LLC. Each of RG Capital Management, L.P., RGC Management Company, LLC and Messers. Katznelson and Stahlecker disclaim beneficial ownership of the securities owned by the selling stockholder. | |
(15) | Rodman & Renshaw served as a placement agent in the recapitalization of Global Employment Solutions on March 31, 2006 and is an affiliate of R&R Investment I, one of the original stockholders of R&R Acquisition I. | |
(16) | Mr. Jawad is an employee of Rodman & Renshaw, which served as a placement agent in the recapitalization of Global Employment Solutions on March 31, 2006 and is an affiliate of R&R Investment I, one of the original stockholders of R&R Acquisition I. | |
(17) | Victory Park Capital Advisors, LLC is the investment advisor of Victory Park Master Fund, Ltd. and consequently has voting controls and investment discretion over securities held by Victory Park Master Fund, Ltd. Richard Levy is the sole member of Jacob Capital L.L.C., and sole manager of Victory Park Capital Advisors, LLC. | |
(18) | Consists of shares of common stock originally registered and sold by some of the original selling shareholders. |
• | On any national securities exchange or quotation service on which the securities may be listed or quoted at the time of sale. | ||
• | In the over-the-counter market. | ||
• | In transactions otherwise than on these exchanges or systems or in the over-the-counter market. | ||
• | Through the writing of options, whether such options are listed on an options exchange or otherwise. | ||
• | Ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers. | ||
• | Block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction. | ||
• | Purchases by a broker-dealer as principal and resale by the broker-dealer for its account. | ||
• | An exchange distribution in accordance with the rules of the applicable exchange. | ||
• | Privately negotiated transactions. | ||
• | Short sales. | ||
• | Sales pursuant to Rule 144 under the Securities Act of 1933, as amended. |
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• | Broker-dealers may agree with the selling stockholders to sell a specified number of such shares at a stipulated price per share. | ||
• | A combination of any such methods of sale. | ||
• | Any other method permitted pursuant to applicable law. |
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AND FINANCIAL DISCLOSURE
SECURITIES ACT LIABILITIES
67
Table of Contents
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
F-2 | ||
F-3 | ||
F-4 | ||
F-5 | ||
F-6 | ||
F-7 | ||
I-1 | ||
I-2 | ||
I-3 | ||
I-4 | ||
I-5 |
F-1
Table of Contents
Denver, Colorado
F-2
Table of Contents
December | December | |||||||
2007 | 2006 | |||||||
ASSETS | ||||||||
CURRENT ASSETS | ||||||||
Cash and cash equivalents | $ | 330,000 | $ | 58,000 | ||||
Accounts receivable, less allowance for doubtful accounts of $476,000 and $431,000 for 2007 and 2006, respectively | 27,784,000 | 23,478,000 | ||||||
Deferred income taxes | 1,809,000 | 2,095,000 | ||||||
Prepaid expenses and other current assets | 2,344,000 | 2,603,000 | ||||||
Total current assets | 32,267,000 | 28,234,000 | ||||||
Property and equipment, net | 2,040,000 | 1,168,000 | ||||||
Deferred income taxes | 8,406,000 | 7,796,000 | ||||||
Other assets, net | 1,823,000 | 1,256,000 | ||||||
Intangibles, net of accumulated amortization of $1,955,000 | 5,463,000 | — | ||||||
Goodwill | 19,487,000 | 18,748,000 | ||||||
Total assets | $ | 69,486,000 | $ | 57,202,000 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | ||||||||
CURRENT LIABILITIES | ||||||||
Bank overdrafts | $ | 1,220,000 | $ | 2,176,000 | ||||
Accounts payable | 343,000 | 614,000 | ||||||
Accrued liabilities | 24,338,000 | 19,542,000 | ||||||
Current portion of long-term debt | 9,375,000 | 2,903,000 | ||||||
Line of credit | 6,735,000 | 9,049,000 | ||||||
Total current liabilities | 42,011,000 | 34,284,000 | ||||||
Warrant and conversion liability | 5,568,000 | 24,496,000 | ||||||
Warrant and conversion liability due to related parties | 222,000 | 912,000 | ||||||
Long-term debt, net of unamortized discount of $7,222,000 and $9,019,000 for 2007 and 2006, respectively | 14,731,000 | 13,781,000 | ||||||
Long-term debt due to related parties, net of unamortized discount of $677,000 and $946,000 for 2007 and 2006, respectively | 1,383,000 | 1,357,000 | ||||||
Mandatorily redeemable preferred stock, net of unamortized discount of $10,069,000 and $11,510,000 for 2007 and 2006, respectively | 4,588,000 | 2,013,000 | ||||||
Total liabilities | 68,503,000 | 76,843,000 | ||||||
COMMITMENTS AND CONTINGENCIES | ||||||||
STOCKHOLDERS’ EQUITY (DEFICIT) | ||||||||
Series A preferred stock, $0.001 par value, 10,000,000 authorized shares designated, 12,750 issued and outstanding in 2007 and 2006. Included above under mandatorily redeemable preferred stock, net | — | — | ||||||
Common stock, $0.001 par value, 40,000,000 shares authorized; 10,555,010 issued, 10,548,330 outstanding in 2007 and 6,030,122 issued, 6,023,442 outstanding in 2006 | 1,000 | 1,000 | ||||||
Treasury stock at cost, 6,680 shares for 2007 and 2006 | — | — | ||||||
Additional paid in capital | 33,418,000 | 23,760,000 | ||||||
Accumulated deficit | (32,436,000 | ) | (43,402,000 | ) | ||||
Total stockholders’ equity (deficit) | 983,000 | (19,641,000 | ) | |||||
Total liabilities and stockholders’ equity (deficit) | $ | 69,486,000 | $ | 57,202,000 | ||||
F-3
Table of Contents
Years Ended | ||||||||||||
December | December | December | ||||||||||
2007 | 2006 | 2005 | ||||||||||
REVENUES, net | $ | 173,893,000 | $ | 128,790,000 | $ | 111,563,000 | ||||||
COST OF SERVICES | 128,564,000 | 92,071,000 | 77,193,000 | |||||||||
GROSS PROFIT | 45,329,000 | 36,719,000 | 34,370,000 | |||||||||
OPERATING EXPENSES | ||||||||||||
Selling, general and administrative | 37,432,000 | 28,311,000 | 45,478,000 | |||||||||
Depreciation and amortization | 2,563,000 | 573,000 | 729,000 | |||||||||
Total operating expenses | 39,995,000 | 28,884,000 | 46,207,000 | |||||||||
OPERATING INCOME (LOSS) | 5,334,000 | 7,835,000 | (11,837,000 | ) | ||||||||
OTHER INCOME (EXPENSE) | ||||||||||||
Interest expense: | ||||||||||||
Other interest expense, net of interest income | (9,191,000 | ) | (6,507,000 | ) | (256,000 | ) | ||||||
Fair market valuation of warrant and conversion liability | 15,156,000 | 1,634,000 | — | |||||||||
Other income (expense) | (422,000 | ) | (3,086,000 | ) | — | |||||||
Total other income (expense), net | 5,543,000 | (7,959,000 | ) | (256,000 | ) | |||||||
INCOME (LOSS) BEFORE INCOME TAXES | 10,877,000 | (124,000 | ) | (12,093,000 | ) | |||||||
INCOME TAX (BENEFIT) EXPENSE | (89,000 | ) | (1,433,000 | ) | 3,632,000 | |||||||
NET INCOME (LOSS) | 10,966,000 | 1,309,000 | (15,725,000 | ) | ||||||||
Valuation of redeemable preferred stock | — | — | (36,693,000 | ) | ||||||||
Dividend paid to Series C preferred stockholders ($0.92 per share) | — | — | (6,300,000 | ) | ||||||||
Income (loss) available to common stockholders | $ | 10,966,000 | $ | 1,309,000 | $ | (58,718,000 | ) | |||||
Basic earnings (loss) per share of common stock | $ | 1.67 | $ | 0.23 | $ | (10.95 | ) | |||||
Weighted average number of basic common shares outstanding | 6,550,054 | 5,744,742 | 5,362,600 | |||||||||
Diluted earnings (loss) per share of common stock | $ | 1.04 | $ | 0.23 | $ | (10.95 | ) | |||||
Weighted average number of diluted common shares outstanding | 15,586,644 | 5,744,742 | 5,362,600 |
F-4
Table of Contents
Preferred stock | Common stock | Treasury stock | Additional | Accumulated | ||||||||||||||||||||||||||||||||
Amount | Shares | Amount | Shares | Amount | Shares | paid in capital | deficit | Total | ||||||||||||||||||||||||||||
Balances at January 2, 2005 | $ | — | — | $ | 1,000 | 5,433,241 | $ | — | — | $ | 33,219,000 | $ | (21,986,000 | ) | $ | 11,234,000 | ||||||||||||||||||||
Cash dividends ($1.20 per restricted common share and $0.92 per Series C share) | — | — | — | — | — | — | (7,000,000 | ) | (7,000,000 | ) | ||||||||||||||||||||||||||
Issuance of restricted common stock | — | — | — | 91,762 | — | — | 2,000 | — | 2,000 | |||||||||||||||||||||||||||
Repurchase of restricted common stock | — | — | — | (533 | ) | — | — | — | — | — | ||||||||||||||||||||||||||
Reclassification of redeemable restricted stock to a liability | — | — | — | (659,785 | ) | — | — | 23,261,000 | — | 23,261,000 | ||||||||||||||||||||||||||
Valuation of redeemable preferred stock | — | — | — | — | — | — | (36,693,000 | ) | — | (36,693,000 | ) | |||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | (15,725,000 | ) | (15,725,000 | ) | |||||||||||||||||||||||||
Balances at January 1, 2006 | — | — | 1,000 | 4,864,685 | — | — | 19,789,000 | (44,711,000 | ) | (24,921,000 | ) | |||||||||||||||||||||||||
Issuance of common stock to new investors | — | — | — | 850,000 | — | — | 4,250,000 | — | 4,250,000 | |||||||||||||||||||||||||||
Issuance of common stock to KRG Colorado, LLC for services | — | — | — | 50,000 | — | — | 250,000 | — | 250,000 | |||||||||||||||||||||||||||
Issuance of common stock to former shareholders of R&R Acquisition I, Inc. | — | — | — | 180,928 | — | — | 905,000 | — | 905,000 | |||||||||||||||||||||||||||
Issuance of common stock to former debt holders of Global Employment Solutions, Inc. | — | — | — | 85,315 | — | — | 427,000 | — | 427,000 | |||||||||||||||||||||||||||
Warrant liability related to common stock warrants | — | — | — | — | — | — | (2,766,000 | ) | — | (2,766,000 | ) | |||||||||||||||||||||||||
Offering costs | — | — | — | — | — | — | (1,049,000 | ) | — | (1,049,000 | ) | |||||||||||||||||||||||||
Extinguishment of related party debt | — | — | — | — | — | — | 1,960,000 | — | 1,960,000 | |||||||||||||||||||||||||||
Issuance of preferred stock | 12,750,000 | 12,750 | — | — | — | — | — | — | 12,750,000 | |||||||||||||||||||||||||||
Reclassification of mandatorily redeemable preferred stock to liabilities | (12,750,000 | ) | (12,750 | ) | — | — | — | — | — | — | (12,750,000 | ) | ||||||||||||||||||||||||
Forfeiture of common stock | — | — | — | — | — | (6,680 | ) | — | — | — | ||||||||||||||||||||||||||
Repurchase of common stock | — | — | — | (806 | ) | — | — | (6,000 | ) | — | (6,000 | ) | ||||||||||||||||||||||||
Net income | — | — | — | — | — | — | — | 1,309,000 | 1,309,000 | |||||||||||||||||||||||||||
Balances at December 31, 2006 | — | — | 1,000 | 6,030,122 | — | (6,680 | ) | 23,760,000 | (43,402,000 | ) | (19,641,000 | ) | ||||||||||||||||||||||||
Fractional shares | — | — | — | 310 | — | — | — | — | — | |||||||||||||||||||||||||||
Stock option compensation | — | — | — | — | — | — | 1,802,000 | — | 1,802,000 | |||||||||||||||||||||||||||
Warrant conversion compensation | — | — | — | — | — | — | 553,000 | — | 553,000 | |||||||||||||||||||||||||||
Sale of common stock at $1.50 per share, net | — | — | — | 2,000,000 | — | — | 2,970,000 | — | 2,970,000 | |||||||||||||||||||||||||||
Warrant liability related to common stock warrants | — | — | — | — | — | — | (1,723,000 | ) | — | (1,723,000 | ) | |||||||||||||||||||||||||
Conversion of warrants, net | — | — | — | 2,524,578 | — | — | 6,150,000 | — | 6,150,000 | |||||||||||||||||||||||||||
Conversion of related party debt | — | — | — | — | — | — | (94,000 | ) | — | (94,000 | ) | |||||||||||||||||||||||||
Net income | — | — | — | — | — | — | — | 10,966,000 | 10,966,000 | |||||||||||||||||||||||||||
Balances at December 30, 2007 | $ | — | — | $ | 1,000 | 10,555,010 | $ | — | (6,680 | ) | $ | 33,418,000 | $ | (32,436,000 | ) | $ | 983,000 | |||||||||||||||||||
F-5
Table of Contents
Years ended | ||||||||||||
December | December | December | ||||||||||
2007 | 2006 | 2005 | ||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||
Net income (loss) | $ | 10,966,000 | $ | 1,309,000 | $ | (15,725,000 | ) | |||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||||||||||
Depreciation | 608,000 | 540,000 | 519,000 | |||||||||
Amortization of intangibles and other assets | 1,955,000 | 33,000 | 210,000 | |||||||||
Amortization of debt discount and issuance costs | 2,458,000 | 1,951,000 | 47,000 | |||||||||
Accretion of preferred stock | 1,134,000 | 773,000 | — | |||||||||
Amortization of warrant discount on preferred stock | 1,441,000 | 1,039,000 | — | |||||||||
Bad debt expense | 124,000 | 394,000 | 330,000 | |||||||||
Deferred taxes | (324,000 | ) | (1,707,000 | ) | 3,355,000 | |||||||
Stock option and warrant conversion compensation expense | 2,355,000 | — | — | |||||||||
Fair market valuation of warrant and conversion liability | (15,156,000 | ) | (1,634,000 | ) | — | |||||||
Loss (gain) on debt repurchase | 395,000 | (273,000 | ) | — | ||||||||
Restricted common stock valuation | — | 80,000 | 21,152,000 | |||||||||
Issuance of common stock to KRG Colorado, LLC for services | — | 250,000 | — | |||||||||
Issuance of common stock to former shareholders of R&R Acquisition I, Inc. | — | 905,000 | — | |||||||||
Changes in operating assets and liabilities, net of effects of acquisition: | ||||||||||||
Accounts receivable | (1,528,000 | ) | (2,178,000 | ) | (5,364,000 | ) | ||||||
Prepaid expenses and other | 60,000 | 348,000 | (648,000 | ) | ||||||||
Accounts payable | (332,000 | ) | 109,000 | 101,000 | ||||||||
Income taxes payable | — | (241,000 | ) | (388,000 | ) | |||||||
Accrued expenses and other liabilities | 2,240,000 | 3,681,000 | 1,478,000 | |||||||||
Net cash flows provided by operating activities | 6,396,000 | 5,379,000 | 5,067,000 | |||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||
Purchase of property and equipment | (745,000 | ) | (686,000 | ) | (324,000 | ) | ||||||
Acquisition of Career Blazers, net of cash and cash equivalents acquired | (9,689,000 | ) | — | — | ||||||||
Net cash used in investing activities | (10,434,000 | ) | (686,000 | ) | (324,000 | ) | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||
Bank overdrafts | (956,000 | ) | (533,000 | ) | 2,266,000 | |||||||
Net (repayments) borrowings on revolving credit facility | (2,314,000 | ) | 9,049,000 | — | ||||||||
Borrowings on term note | 12,000,000 | 5,000,000 | — | |||||||||
Repayments of term notes | (6,375,000 | ) | (1,250,000 | ) | — | |||||||
Proceeds from convertible debt | — | 30,000,000 | — | |||||||||
Repurchase of convertible debt | — | (4,997,000 | ) | — | ||||||||
Debt and stock issuance costs | (802,000 | ) | (2,986,000 | ) | (25,000 | ) | ||||||
Reduction of KRG subordinated note | — | (1,460,000 | ) | — | ||||||||
Reduction of shareholder subordinated debt | — | (14,064,000 | ) | — | ||||||||
Issuance of preferred stock | — | 12,750,000 | — | |||||||||
Issuance of restricted common stock | — | — | 2,000 | |||||||||
Issuance of common stock | 2,757,000 | 4,250,000 | — | |||||||||
Repurchase of common stock | — | (6,000 | ) | — | ||||||||
Repurchase of preferred stock and restricted common stock | — | (40,526,000 | ) | — | ||||||||
Cash dividend paid | — | — | (7,000,000 | ) | ||||||||
Net cash flows provided by (used in) financing activities | 4,310,000 | (4,773,000 | ) | (4,757,000 | ) | |||||||
Net increase (decrease) in cash and cash equivalents | 272,000 | (80,000 | ) | (14,000 | ) | |||||||
Cash and cash equivalents, beginning of year | 58,000 | 138,000 | 152,000 | |||||||||
Cash and cash equivalents, end of year | $ | 330,000 | $ | 58,000 | $ | 138,000 | ||||||
Supplemental Disclosure of Cash Flow Information | ||||||||||||
Cash paid during the period for income taxes | $ | 278,000 | $ | 548,000 | $ | 665,000 | ||||||
Cash paid during the period for interest | $ | 4,158,000 | $ | 2,276,000 | $ | 208,000 | ||||||
Supplemental Disclosure of Non-Cash Information | ||||||||||||
Landlord leasehold incentives recorded as leasehold improvements | $ | 363,000 | $ | — | $ | — | ||||||
Conversion of senior subordinated secured convertible notes for common stock | $ | 243,000 | $ | — | $ | — | ||||||
F-6
Table of Contents
Our staffing services segment consists of:
• | Temporary Placement Service, Inc. (“TPS”) | • | Friendly Advanced Software Technology, Inc. (“FAST”) | |||
• | Main Line Personnel Services, Inc. (“Main Line”) | • | Excell Personnel Services Corporation (“Excell”) |
• | Southeastern Personnel Management, Inc. | • | Southeastern Staffing III, Inc. | |||
• | Southeastern Staffing, Inc. | • | Southeastern Staffing IV, Inc. | |||
• | Bay HR, Inc. | • | Southeastern Staffing V, Inc. | |||
• | Southeastern Georgia HR, Inc. | • | Southeastern Staffing VI, Inc. | |||
• | Southeastern Staffing II, Inc. | • | Keystone Alliance, Inc. |
F-7
Table of Contents
Notes to Consolidated Financial Statements
F-8
Table of Contents
Notes to Consolidated Financial Statements
2007 | 2006 | 2005 | ||||||||||
Georgia | 37 | % | 52 | % | 48 | % | ||||||
Florida | 19 | % | 25 | % | 27 | % | ||||||
New York | 27 | % | * | * | ||||||||
Pennsylvania | * | 10 | % | 11 | % |
* | - Less than 10% |
F-9
Table of Contents
Notes to Consolidated Financial Statements
Office equipment 3 to 7 years
Furniture and fixtures 5 to 10 years
F-10
Table of Contents
Notes to Consolidated Financial Statements
F-11
Table of Contents
Notes to Consolidated Financial Statements
Basic Net Income | $ | 10,966,000 | ||
Convertible debt interest and amortization, net of tax | 2,704,000 | |||
Make whole conversion interest, net of tax (a) | (1,454,000 | ) | ||
Fair market valuation of backstop warrants | 1,388,000 | |||
Preferred stock accretion and amortization | 2,575,000 | |||
Diluted Net Income | $ | 16,179,000 | ||
F-12
Table of Contents
Notes to Consolidated Financial Statements
Weighted average number of basic common shares outstanding | 6,550,054 | |||
Impact of the assumed conversion or exercise of: | ||||
Stock options | 1,684 | |||
Warrants | 37,626 | |||
Convertible notes | 5,498,797 | |||
Convertible debt make whole (a) | — | |||
Preferred stock | 3,498,483 | |||
Weighted average number of diluted common shares outstanding | 15,586,644 | |||
(a) | As more fully explained in Note H, the Company currently has assumed payment of the present value of interest under a redemptive event in cash. |
F-13
Table of Contents
Notes to Consolidated Financial Statements
F-14
Table of Contents
Notes to Consolidated Financial Statements
Shares of | ||||||||
Cash | common stock in | |||||||
Distribution | Holdings | |||||||
Restricted stockholders | $ | 11,624,000 | 1,924,889 | |||||
Series C preferred stockholders | 22,243,000 | 869,426 | ||||||
Series D preferred stockholders | 6,653,000 | 2,070,371 | ||||||
Senior Subordinated Notes | 13,593,000 | 74,703 | ||||||
Purchase Money Subordinated Notes | 471,000 | 2,588 | ||||||
KRG Subordinated Notes | 1,460,000 | 8,023 | ||||||
Total | $ | 56,044,000 | 4,950,000 | |||||
December | December | |||||||
2007 | 2006 | |||||||
Accounts receivable billed | $ | 14,588,000 | $ | 12,653,000 | ||||
Accounts receivable unbilled | 11,955,000 | 10,971,000 | ||||||
Accounts receivable other | 1,717,000 | 285,000 | ||||||
Allowance for doubtful accounts | (476,000 | ) | (431,000 | ) | ||||
Total | $ | 27,784,000 | $ | 23,478,000 | ||||
2007 | 2006 | 2005 | ||||||||||
Balance, beginning of year | $ | 431,000 | $ | 536,000 | $ | 469,000 | ||||||
Additions charged to cost and expense | 124,000 | 394,000 | 330,000 | |||||||||
Acquisition of Career Blazers | 319,000 | — | — | |||||||||
Accounts receivable written-off, net of recoveries | (398,000 | ) | (499,000 | ) | (263,000 | ) | ||||||
Balance, end of year | $ | 476,000 | $ | 431,000 | $ | 536,000 | ||||||
December | December | |||||||
2007 | 2006 | |||||||
Office equipment | $ | 1,938,000 | $ | 1,924,000 | ||||
Furniture and fixtures | 759,000 | 685,000 | ||||||
Computer software | 1,017,000 | 957,000 | ||||||
Leasehold improvements | 955,000 | 451,000 | ||||||
4,669,000 | 4,017,000 | |||||||
Less accumulated depreciation and amortization | (2,629,000 | ) | (2,849,000 | ) | ||||
Total | $ | 2,040,000 | $ | 1,168,000 | ||||
F-15
Table of Contents
Notes to Consolidated Financial Statements
December | December | |||||||
2007 | 2006 | |||||||
Debt issuance costs, net of accumulated amortization of $857,000 and $428,000 for 2007 and 2006, respectively | $ | 1,391,000 | $ | 1,126,000 | ||||
Deposits and other | 432,000 | 130,000 | ||||||
Total | $ | 1,823,000 | $ | 1,256,000 | ||||
Years | ||||
2008 | $ | 477,000 | ||
2009 | 516,000 | |||
2010 | 325,000 | |||
2011 | 73,000 | |||
Total | $ | 1,391,000 | ||
December | December | |||||||
2007 | 2006 | |||||||
Accrued payroll and related benefits | $ | 17,444,000 | $ | 13,884,000 | ||||
Accrued workers’ compensation losses and premiums | 2,584,000 | 2,651,000 | ||||||
Unearned benefit deductions | 1,086,000 | 1,019,000 | ||||||
Accrued rent and leasehold incentives | 904,000 | 182,000 | ||||||
Other | 2,320,000 | 1,806,000 | ||||||
Total | $ | 24,338,000 | $ | 19,542,000 | ||||
F-16
Table of Contents
Notes to Consolidated Financial Statements
Election | Rate | Amount | ||||||||
Revolving line of credit | Prime + 2.25% | 9.50 | % | $ | 1,735,000 | |||||
90 day Libor + 3.50% | 8.56 | % | $ | 5,000,000 | ||||||
Term Note | 90 day Libor + 5.00% | 10.06 | % | $ | 9,375,000 |
F-17
Table of Contents
Notes to Consolidated Financial Statements
F-18
Table of Contents
Notes to Consolidated Financial Statements
December | December | |||||||
2007 | 2006 | |||||||
CapitalSource term note | $ | 9,375,000 | $ | — | ||||
Senior subordinated secured convertible notes, net of unamortized discount of $7,222,000 and $9,019,000, respectively | 14,731,000 | 12,934,000 | ||||||
Senior subordinated secured convertible notes due to related parties, net of unamortized discount of $677,000 and $946,000, respectively | 1,383,000 | 1,357,000 | ||||||
Wells Fargo term note | — | 3,750,000 | ||||||
25,489,000 | 18,041,000 | |||||||
Less current portion | (9,375,000 | ) | (2,903,000 | ) | ||||
Total long-term debt | $ | 16,114,000 | $ | 15,138,000 | ||||
Non Related Party | Related Party | Discount | Net | |||||||||||||
Issuance of senior secured convertible notes | $ | 30,000,000 | $ | — | $ | (14,099,000 | ) | $ | 15,901,000 | |||||||
Amortization of discount | — | — | 1,658,000 | 1,658,000 | ||||||||||||
Repurchase of notes by the Company | (5,744,000 | ) | — | 2,476,000 | (3,268,000 | ) | ||||||||||
Purchase of notes by related parties | (2,303,000 | ) | 2,303,000 | — | — | |||||||||||
Balance at December 2006 | 21,953,000 | 2,303,000 | (9,965,000 | ) | 14,291,000 | |||||||||||
Amortization of discount | — | — | 1,981,000 | 1,981,000 | ||||||||||||
Conversion of notes by related parties | — | (243,000 | ) | 85,000 | (158,000 | ) | ||||||||||
Balance at December 2007 | $ | 21,953,000 | $ | 2,060,000 | $ | (7,899,000 | ) | $ | 16,114,000 | |||||||
F-19
Table of Contents
Notes to Consolidated Financial Statements
F-20
Table of Contents
Notes to Consolidated Financial Statements
2007 | ||||||||||||
Current | Deferred | Total | ||||||||||
U.S. Federal | $ | — | $ | (292,000 | ) | $ | (292,000 | ) | ||||
State and local | 235,000 | (32,000 | ) | 203,000 | ||||||||
Total | $ | 235,000 | $ | (324,000 | ) | $ | (89,000 | ) | ||||
2006 | ||||||||||||
Current | Deferred | Total | ||||||||||
U.S. Federal | $ | — | $ | (1,521,000 | ) | $ | (1,521,000 | ) | ||||
State and local | 274,000 | (186,000 | ) | 88,000 | ||||||||
Total | $ | 274,000 | $ | (1,707,000 | ) | $ | (1,433,000 | ) | ||||
2005 | ||||||||||||
Current | Deferred | Total | ||||||||||
U.S. Federal | $ | 159,000 | $ | 3,253,000 | $ | 3,412,000 | ||||||
State and local | 118,000 | 102,000 | 220,000 | |||||||||
Total | $ | 277,000 | $ | 3,355,000 | $ | 3,632,000 | ||||||
2007 | 2006 | 2005 | |||||||||||||
Tax computed at federal statutory rate | 34.0 | % | 34.0 | % | 34.0 | % | |||||||||
State tax, net of federal tax benefit | 1.4 | (146.3 | ) | (0.6 | ) | ||||||||||
Mandatorily redeemable convertible preferred stock accretion and amortization | 8.1 | (498.2 | ) | — | |||||||||||
Warrant valuation | (47.5 | ) | 1,101.6 | — | |||||||||||
FICA tip credit, net | (5.0 | ) | 369.8 | 2.8 | |||||||||||
Restricted stock valuation | — | 107.8 | (58.5 | ) | |||||||||||
Stock issued to former shareholders of R&R Acquisition, Inc. | — | (248.9 | ) | — | |||||||||||
Stock compensation | 5.9 | 348.0 | — | ||||||||||||
Permanent differences and other | 2.3 | 87.8 | (7.7 | ) | |||||||||||
Effective Rate | (0.8 | )% | 1,155.6 | % | (30.0 | )% | |||||||||
F-21
Table of Contents
Notes to Consolidated Financial Statements
December | December | |||||||
Deferred tax asset (liability): | 2007 | 2006 | ||||||
Allowance for doubtful accounts | $ | 184,000 | $ | 164,000 | ||||
Net operating loss carry forwards | 796,000 | 1,157,000 | ||||||
AMT and FICA tip tax credit | 41,000 | — | ||||||
Other reserves | 788,000 | 774,000 | ||||||
Deferred tax assets — current | 1,809,000 | 2,095,000 | ||||||
AMT and FICA tip tax credit | 4,047,000 | 3,282,000 | ||||||
Net operating loss carry forwards | 1,988,000 | 1,791,000 | ||||||
Stock options | 184,000 | — | ||||||
Amortization of goodwill and other intangibles | 3,094,000 | 3,323,000 | ||||||
Depreciation of property and equipment | 120,000 | 144,000 | ||||||
Valuation allowance | (1,027,000 | ) | (744,000 | ) | ||||
Deferred tax assets — long-term | 8,406,000 | 7,796,000 | ||||||
Net deferred tax assets | $ | 10,215,000 | $ | 9,891,000 | ||||
F-22
Table of Contents
Notes to Consolidated Financial Statements
F-23
Table of Contents
Notes to Consolidated Financial Statements
Principal | Discount | Net | ||||||||||
Balance at issuance on March 31, 2006 | $ | 12,750,000 | $ | (12,549,000 | ) | $ | 201,000 | |||||
8% accretion | 773,000 | — | 773,000 | |||||||||
Amortization of discount | — | 1,039,000 | 1,039,000 | |||||||||
Balance at December 2006 | 13,523,000 | (11,510,000 | ) | 2,013,000 | ||||||||
8%/9.5% accretion | 1,134,000 | — | 1,134,000 | |||||||||
Amortization of discount | — | 1,441,000 | 1,441,000 | |||||||||
Balance at December 2007 | $ | 14,657,000 | $ | (10,069,000 | ) | $ | 4,588,000 | |||||
Number of | Number of | |||||||||||
shares | shares | |||||||||||
underlying | underlying | |||||||||||
warrants prior to | warrants after | Original | ||||||||||
transaction | transaction | Expiration date | ||||||||||
Note Warrants | 551,287 | — | March 31, 2011 | |||||||||
Preferred Warrants | 2,358,948 | 112,440 | * | March 31, 2013 | ||||||||
Common Warrants | 1,205,678 | — | March 31, 2013 | |||||||||
Placement Agent Warrants | 558,758 | — | March 31, 2013 | |||||||||
Backstop Warrants | 1,838,339 | — | September 30, 2014 | |||||||||
TOTAL | 6,513,010 | 112,440 | ||||||||||
* | - All held by a single holder and subject to exercise as explained above |
F-24
Table of Contents
Notes to Consolidated Financial Statements
F-25
Table of Contents
Notes to Consolidated Financial Statements
• | The stock options are granted at-the-money; | ||
• | Exercisability is conditional only on performing service through the vesting date ; | ||
• | If an employee terminates service prior to vesting, the employee would forfeit the stock options; | ||
• | If an employee terminates service after vesting, the employee would have a limited time to exercise the vested stock options (typically 30-90 days); | ||
• | The stock options are nontransferable and nonhedgeable; and | ||
• | The Company utilizes the Black-Scholes closed-form model for valuing its employee stock options. |
F-26
Table of Contents
Notes to Consolidated Financial Statements
Wgt. Avg. | ||||||||||||||||||||
Wgt. Avg. | Remaining | Wgt. Avg. | Aggregate | |||||||||||||||||
Exercise | Contractual | Grant Date | Intrinsic | |||||||||||||||||
Stock Options | Price | Life (years) | Fair Value | Value | ||||||||||||||||
As of January 2007 | ||||||||||||||||||||
Outstanding | — | — | — | — | — | |||||||||||||||
Vested | — | — | — | — | — | |||||||||||||||
Nonvested | — | — | — | — | — | |||||||||||||||
Period Activity | ||||||||||||||||||||
Issued | 1,557,361 | $ | 3.05 | — | $ | 2.60 | — | |||||||||||||
Exercised | — | — | — | — | — | |||||||||||||||
Forfeited | 57,821 | $ | 5.00 | — | $ | 2.62 | — | |||||||||||||
Expired | — | — | — | — | — | |||||||||||||||
As of December 2007 | ||||||||||||||||||||
Outstanding | 1,499,540 | $ | 2.97 | 9.32 | $ | 2.58 | $ | 28,500 | ||||||||||||
Vested | 273,329 | $ | 3.00 | 9.13 | $ | 3.04 | — | |||||||||||||
Nonvested | 1,226,211 | $ | 2.96 | 9.36 | $ | 2.48 | $ | 28,500 | ||||||||||||
Wgt. Avg. | ||||||||||||
Wgt. Avg. | Remaining | |||||||||||
Stock Options | Exercise | Contractual | ||||||||||
Range of Exercise Prices | Outstanding | Price | Life (years) | |||||||||
$1.50 - $3.00 | 1,499,540 | $ | 2.97 | 9.32 | ||||||||
Wgt. Avg. | ||||||||||||||||
Wgt. Avg. | Remaining | Aggregate | ||||||||||||||
Stock Options | Exercise | Contractual | Intrinsic | |||||||||||||
Range of Exercise Prices | Exercisable | Price | Life (years) | Value | ||||||||||||
$3.00 | 273,329 | $ | 3.00 | 9.13 | — | |||||||||||
2007 | ||||
Expected Volatility | 52.7% - 55.2 | % | ||
Weighted-Average Volatility | 53.60 | % | ||
Expected Dividends | 0 | % | ||
Expected Term (years) | 5.6 - 6.0 | |||
Risk-Free Rate | 4.29 | % | ||
Total intrinsic value of options exercised: | $ | — | ||
Total fair value of shares vested: | $ | 832,000 | ||
Unrecognized compensation cost related to nonvested awards: | $ | 2,388,000 | ||
Weighted-average period over which nonvested awards are expected to be recognized: | 1.13 years |
F-27
Table of Contents
Notes to Consolidated Financial Statements
F-28
Table of Contents
Notes to Consolidated Financial Statements
2007 | 2006 | |||||||
Average expected volatility | 55.1 | % | 59.7 | % | ||||
Contractual term ranged from | 3.25 to 6.75 years | 4.25 to 7.0 years | ||||||
Risk free interest rate | 4.18 | % | 4.76 | % | ||||
Expected dividend rate | -0- | -0- |
Years | ||||
2008 | $ | 2,020,000 | ||
2009 | 1,643,000 | |||
2010 | 1,228,000 | |||
2011 | 895,000 | |||
2012 and thereafter | 4,260,000 | |||
Total minimum lease payments | 10,046,000 | |||
Less Sublease rentals | (205,000 | ) | ||
Total | $ | 9,841,000 | ||
F-29
Table of Contents
Notes to Consolidated Financial Statements
F-30
Table of Contents
Notes to Consolidated Financial Statements
2007 | 2006 | 2005 | ||||||||||
Staffing revenues | $ | 139,877,000 | $ | 95,135,000 | $ | 81,175,000 | ||||||
PEO revenues | $ | 34,016,000 | $ | 33,609,000 | $ | 30,388,000 | ||||||
Total company revenues | $ | 173,893,000 | $ | 128,790,000 | $ | 111,563,000 | ||||||
Staffing depreciation | $ | 231,000 | $ | 116,000 | $ | 124,000 | ||||||
PEO depreciation | $ | 162,000 | $ | 136,000 | $ | 106,000 | ||||||
Total Company depreciation | $ | 608,000 | $ | 540,000 | $ | 519,000 | ||||||
Staffing amortization | $ | 1,955,000 | $ | — | $ | — | ||||||
PEO amortization | $ | — | $ | 18,000 | $ | 127,000 | ||||||
Total Company amortization | $ | 1,955,000 | $ | 33,000 | $ | 210,000 | ||||||
Staffing income before income taxes | $ | 7,109,000 | $ | 7,175,000 | $ | 7,881,000 | ||||||
PEO income before income taxes | $ | 6,650,000 | $ | 5,742,000 | $ | 4,563,000 | ||||||
Total company income (loss) before income taxes | $ | 10,877,000 | $ | (124,000 | ) | $ | (12,093,000 | ) | ||||
Staffing assets | $ | 43,874,000 | $ | 28,828,000 | $ | 23,506,000 | ||||||
PEO assets | $ | 33,684,000 | $ | 31,618,000 | $ | 26,612,000 | ||||||
Total company assets | $ | 69,486,000 | $ | 57,202,000 | $ | 52,920,000 | ||||||
Staffing goodwill and intangibles | $ | 12,860,000 | $ | 6,658,000 | $ | 6,658,000 | ||||||
PEO goodwill and intangibles | $ | 12,090,000 | $ | 12,090,000 | $ | 12,090,000 | ||||||
Total goodwill and intangibles | $ | 24,950,000 | $ | 18,748,000 | $ | 18,748,000 | ||||||
Staffing capital expenditures | $ | 420,000 | $ | 220,000 | $ | 103,000 | ||||||
PEO capital expenditures | $ | 99,000 | $ | 146,000 | $ | 134,000 | ||||||
Total capital expenditures | $ | 745,000 | $ | 686,000 | $ | 324,000 |
F-31
Table of Contents
Notes to Consolidated Financial Statements
2007 Quarters | 1st | 2nd | 3rd | 4th | ||||||||||||
Revenues, net | $ | 36,621 | $ | 44,338 | $ | 46,889 | $ | 46,045 | ||||||||
Gross profit | $ | 10,177 | $ | 11,859 | $ | 12,149 | $ | 11,144 | ||||||||
Net income (loss) | $ | 991 | $ | 8,788 | $ | 8,947 | $ | (7,760 | ) | |||||||
Income (loss) available to common shareholders | $ | 991 | $ | 8,788 | $ | 8,947 | $ | (7,760 | ) | |||||||
Income (loss) per share: | ||||||||||||||||
Basic | $ | 0.16 | $ | 1.46 | $ | 1.48 | $ | (0.98 | ) | |||||||
Diluted | $ | 0.16 | $ | 0.77 | $ | 0.57 | $ | (0.98 | ) |
2006 Quarters | 1st | 2nd | 3rd | 4th | ||||||||||||
Revenues, net | $ | 31,208 | $ | 33,411 | $ | 33,287 | $ | 30,884 | ||||||||
Gross profit | $ | 8,844 | $ | 9,710 | $ | 9,203 | $ | 8,962 | ||||||||
Net income (loss) | $ | (1,691 | ) | $ | 1,330 | $ | 1,085 | $ | 585 | |||||||
Income (loss) available to common shareholders | $ | (1,691 | ) | $ | 1,330 | $ | 1,085 | $ | 585 | |||||||
Income (loss) per share: | ||||||||||||||||
Basic | $ | (0.35 | ) | $ | 0.22 | $ | 0.18 | $ | 0.10 | |||||||
Diluted | $ | (0.35 | ) | $ | 0.21 | $ | 0.18 | $ | 0.10 |
F-32
Table of Contents
Notes to Consolidated Financial Statements
Current assets | $ | 2,979,000 | ||
Property and equipment, net | 72,000 | |||
Other assets | 19,000 | |||
Intangible assets | 7,418,000 | |||
Goodwill | 739,000 | |||
Total assets acquired | 11,227,000 | |||
Current liabilities | 1,538,000 | |||
Long-term debt | — | |||
Total liabilities assumed | 1,538,000 | |||
Net assets acquired | $ | 9,689,000 | ||
Amortization | ||||||||
Identifiable intangible assets | Allocation | period | ||||||
Trademark and trade name | $ | 2,292,000 | 3 years | |||||
Non-compete agreements | 635,000 | 1 year | ||||||
Temporary employee data base | 49,000 | 3 months | ||||||
Customer relationships | 4,442,000 | 5 years | ||||||
Total intangible assets | $ | 7,418,000 | ||||||
Years | ||||
2008 | $ | 1,758,000 | ||
2009 | 1,652,000 | |||
2010 | 1,016,000 | |||
2011 | 888,000 | |||
2012 | 149,000 | |||
Total | $ | 5,463,000 | ||
F-33
Table of Contents
Notes to Consolidated Financial Statements
(a) | To reclassify insurance expense classified as SG&A by Holdings. | ||
(b) | To eliminate an agreement with a third party service provider for back office functions that was terminated as Holdings now performs the activities covered by the previous agreement. | ||
(c) | To record interest expense on additional borrowings on the term note and revolving line of credit at a weighted average rate of approximately 9.6%. | ||
(d) | To eliminate the expense related to the repayment of debt which would have been recorded in the previous fiscal year. | ||
(e) | To record the net tax expense of Career Blazers pre tax income and the pro forma adjustments at an effective tax rate of approximately 38%. | ||
(f) | To record amortization of identifiable intangible assets. | ||
(g) | To eliminate the deferred tax benefit of Career Blazers. | ||
(h) | To eliminate parent allocation of expense for services which were terminated. | ||
(i) | To eliminate interest expense of Career Blazers. |
F-34
Table of Contents
Notes to Consolidated Financial Statements
UNAUDITED PROFORMA CONDENSED COMBINING STATEMENT OF OPERATIONS
Career Blazers | ||||||||||||||||
Global | Personnel | |||||||||||||||
Employment | Services, Inc. | Pro Forma | ||||||||||||||
Holdings, Inc. | Two months | Combined | ||||||||||||||
Year ended | ended | Year ended | ||||||||||||||
December | February | Pro Forma | December | |||||||||||||
2007 | 2007 | adjustments | 2007 | |||||||||||||
REVENUES, net | $ | 173,893,000 | $ | 8,205,000 | $ | — | $ | 182,098,000 | ||||||||
COST OF SERVICES | 128,564,000 | 6,891,000 | (12,000 | )(a) | 135,443,000 | |||||||||||
GROSS PROFIT | 45,329,000 | 1,314,000 | 12,000 | 46,655,000 | ||||||||||||
OPERATING EXPENSES | ||||||||||||||||
Selling, general and administrative | 37,432,000 | 1,122,000 | 12,000 | (a) | 38,484,000 | |||||||||||
(82,000 | )(b) | |||||||||||||||
Depreciation and amortization | 2,563,000 | 6,000 | 381,000 | (f) | 2,950,000 | |||||||||||
Total operating expenses | 39,995,000 | 1,128,000 | 311,000 | 41,434,000 | ||||||||||||
OPERATING INCOME | 5,334,000 | 186,000 | (299,000 | ) | 5,221,000 | |||||||||||
OTHER INCOME (EXPENSE) | �� | |||||||||||||||
Interest expense: | ||||||||||||||||
Other interest expense, net of interest income | (9,191,000 | ) | (2,000 | ) | (167,000 | )(c) | (9,360,000 | ) | ||||||||
Fair market valuation of warrant and conversion liability | 15,156,000 | — | — | 15,156,000 | ||||||||||||
Other income (expense) | (422,000 | ) | 3,000 | 395,000 | (d) | (24,000 | ) | |||||||||
Total other income (expense) | 5,543,000 | 1,000 | 228,000 | 5,772,000 | ||||||||||||
INCOME BEFORE INCOME TAXES | 10,877,000 | 187,000 | (71,000 | ) | 10,993,000 | |||||||||||
INCOME TAX (BENEFIT) EXPENSE | (89,000 | ) | — | 44,000 | (e) | (45,000 | ) | |||||||||
NET INCOME | $ | 10,966,000 | $ | 187,000 | $ | (115,000 | ) | $ | 11,038,000 | |||||||
Basic earnings per share of common stock | $ | 1.67 | $ | 1.69 | ||||||||||||
Weighted average number of basic common shares outstanding | 6,550,054 | 6,550,054 | ||||||||||||||
Diluted earnings per share of common stock | $ | 1.04 | $ | 1.04 | ||||||||||||
Weighted average number of diluted common shares outstanding | 15,586,644 | 15,586,644 |
F-35
Table of Contents
Notes to Consolidated Financial Statements
UNAUDITED PROFORMA CONDENSED COMBINING STATEMENT OF OPERATIONS
Global | Career Blazers | |||||||||||||||
Employment | Personnel | |||||||||||||||
Holdings, Inc. | Services, Inc. | Pro Forma Combined | ||||||||||||||
Year ended | Pro Forma | Year ended | ||||||||||||||
December 2006 | adjustments | December 2006 | ||||||||||||||
REVENUES, net | $ | 128,790,000 | $ | 54,210,000 | $ | — | $ | 183,000,000 | ||||||||
COST OF SERVICES | 92,071,000 | 44,078,000 | — | 136,149,000 | ||||||||||||
GROSS PROFIT | 36,719,000 | 10,132,000 | — | 46,851,000 | ||||||||||||
OPERATING EXPENSES | ||||||||||||||||
Selling, general and administrative | 28,311,000 | 7,738,000 | (641,000 | )(b) | 34,918,000 | |||||||||||
— | — | (490,000 | )(h) | — | ||||||||||||
Depreciation and amortization | 573,000 | 148,000 | 2,336,000 | (f) | 3,057,000 | |||||||||||
Total operating expenses | 28,884,000 | 7,886,000 | 1,205,000 | 37,975,000 | ||||||||||||
OPERATING INCOME | 7,835,000 | 2,246,000 | (1,205,000 | ) | 8,876,000 | |||||||||||
OTHER INCOME (EXPENSE) | ||||||||||||||||
Interest expense: | ||||||||||||||||
Other interest expense, net of interest income | (6,507,000 | ) | (2,590,000 | ) | (1,124,000 | )(c) | (7,631,000 | ) | ||||||||
2,590,000 | (i) | |||||||||||||||
Fair market valuation of warrant and conversion liability | 1,634,000 | — | — | 1,634,000 | ||||||||||||
Other income (expense) | (3,086,000 | ) | — | — | (3,086,000 | ) | ||||||||||
Total other income (expense) | (7,959,000 | ) | (2,590,000 | ) | 1,466,000 | (9,083,000 | ) | |||||||||
INCOME (LOSS) BEFORE INCOME TAXES | (124,000 | ) | (344,000 | ) | 261,000 | (207,000 | ) | |||||||||
INCOME TAX (BENEFIT) EXPENSE | (1,433,000 | ) | (1,292,000 | ) | 99,000 | (e) | (1,562,000 | ) | ||||||||
1,064,000 | (g) | |||||||||||||||
NET INCOME | $ | 1,309,000 | $ | 948,000 | $ | (902,000 | ) | $ | 1,355,000 | |||||||
Basic and diluted earnings per share of common stock | $ | 0.23 | $ | 0.24 | ||||||||||||
Weighted average number of basic and diluted common shares outstanding | 5,744,742 | 5,744,742 |
F-36
Table of Contents
June | December | |||||||
2008 | 2007 | |||||||
ASSETS | ||||||||
CURRENT ASSETS | ||||||||
Cash and cash equivalents | $ | 19,000 | $ | 330,000 | ||||
Restricted cash | 202,000 | — | ||||||
Accounts receivable, net | 27,086,000 | 27,784,000 | ||||||
Deferred income taxes | 1,214,000 | 1,809,000 | ||||||
Prepaid expenses and other current assets | 2,284,000 | 2,344,000 | ||||||
Total current assets | 30,805,000 | 32,267,000 | ||||||
Property and equipment, net | 2,468,000 | 2,040,000 | ||||||
Deferred income taxes | 9,868,000 | 8,406,000 | ||||||
Other assets, net | 1,299,000 | 1,823,000 | ||||||
Intangibles, net | 4,831,000 | 5,463,000 | ||||||
Goodwill | 19,487,000 | 19,487,000 | ||||||
Total assets | $ | 68,758,000 | $ | 69,486,000 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | ||||||||
CURRENT LIABILITIES | ||||||||
Bank overdrafts | $ | 1,153,000 | $ | 1,220,000 | ||||
Accounts payable | 284,000 | 343,000 | ||||||
Accrued liabilities | 23,332,000 | 23,737,000 | ||||||
Current portion of long-term debt — credit facility | 2,550,000 | 9,375,000 | ||||||
Line of credit | 12,213,000 | 6,735,000 | ||||||
Total current liabilities | 39,532,000 | 41,410,000 | ||||||
Other long-term liabilities | 813,000 | 601,000 | ||||||
Warrant and conversion liability | 830,000 | 5,568,000 | ||||||
Warrant and conversion liability due to related parties | 66,000 | 222,000 | ||||||
Long-term debt — credit facility | 2,338,000 | — | ||||||
Long-term debt — convertible notes, net | 13,696,000 | 14,731,000 | ||||||
Long-term debt — convertible notes, due to related parties, net | 1,341,000 | 1,383,000 | ||||||
Mandatorily redeemable preferred stock, net | 5,471,000 | 4,588,000 | ||||||
Mandatorily redeemable preferred stock, due to related parties, net | 415,000 | — | ||||||
Total liabilities | 64,502,000 | 68,503,000 | ||||||
COMMITMENTS AND CONTINGENCIES | ||||||||
STOCKHOLDERS’ EQUITY (DEFICIT) | ||||||||
Series A preferred stock, $.001 par value, 10,000,000 authorized shares designated, 12,750 issued and outstanding in 2008 and 2007. Included above under mandatorily redeemable preferred stock, net | ||||||||
Common stock, $.001 par value, 40,000,000 shares authorized; 10,555,010 issued, 10,548,330 outstanding in 2008 and 2007 | 1,000 | 1,000 | ||||||
Treasury stock, at cost, 6,680 shares in 2008 and 2007 | — | — | ||||||
Additional paid in capital | 34,079,000 | 33,418,000 | ||||||
Accumulated deficit | (29,824,000 | ) | (32,436,000 | ) | ||||
Total stockholders’ equity (deficit) | 4,256,000 | 983,000 | ||||||
Total liabilities and stockholders’ equity (deficit) | $ | 68,758,000 | $ | 69,486,000 | ||||
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Six months ended | ||||||||
June | June | |||||||
2008 | 2007 | |||||||
REVENUES, net | $ | 89,328,000 | $ | 80,960,000 | ||||
COST OF SERVICES | 66,676,000 | 58,924,000 | ||||||
GROSS PROFIT | 22,652,000 | 22,036,000 | ||||||
OPERATING EXPENSES | ||||||||
Selling, general and administrative | 18,660,000 | 18,210,000 | ||||||
Depreciation and amortization | 1,370,000 | 1,097,000 | ||||||
Total operating expenses | 20,030,000 | 19,307,000 | ||||||
OPERATING INCOME | 2,622,000 | 2,729,000 | ||||||
OTHER INCOME (EXPENSE) | ||||||||
Interest expense: | ||||||||
Other interest expense, net of interest income | (4,746,000 | ) | (4,925,000 | ) | ||||
Fair market valuation of warrant and conversion liability | 4,694,000 | 11,783,000 | ||||||
Other (expense) | (636,000 | ) | (18,000 | ) | ||||
Total other income (expense), net | (688,000 | ) | 6,840,000 | |||||
INCOME BEFORE INCOME TAXES | 1,934,000 | 9,569,000 | ||||||
INCOME TAX (BENEFIT) | (678,000 | ) | (209,000 | ) | ||||
NET INCOME | $ | 2,612,000 | $ | 9,778,000 | ||||
Basic earnings per share of common stock | $ | 0.25 | $ | 1.62 | ||||
Weighted average number of basic common shares outstanding | 10,548,330 | 6,023,752 | ||||||
Diluted earnings per share of common stock | $ | 0.22 | $ | 0.97 | ||||
Weighted average number of diluted common shares outstanding | 15,811,438 | 12,715,186 |
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(DEFICIT)
Six months ended June 2008
Preferred stock | Common stock | Treasury stock | Additional | Accumulated | ||||||||||||||||||||||||||||||||
Amount | Shares | Amount | Shares | Amount | Shares | paid in capital | deficit | Total | ||||||||||||||||||||||||||||
Balances at December 2007 | $ | — | — | $ | 1,000 | 10,555,010 | $ | — | (6,680 | ) | $ | 33,418,000 | $ | (32,436,000 | ) | $ | 983,000 | |||||||||||||||||||
Share-based compensation | — | — | — | — | — | — | 661,000 | — | 661,000 | |||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | — | 2,612,000 | 2,612,000 | |||||||||||||||||||||||||||
Balances at June 2008 | $ | — | — | $ | 1,000 | 10,555,010 | $ | — | (6,680 | ) | $ | 34,079,000 | $ | (29,824,000 | ) | $ | 4,256,000 | |||||||||||||||||||
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Six months ended | ||||||||
June | June | |||||||
2008 | 2007 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net income | $ | 2,612,000 | $ | 9,778,000 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation | 438,000 | 285,000 | ||||||
Amortization of intangibles | 932,000 | 812,000 | ||||||
Amortization of debt discount and issuance costs | 1,728,000 | 1,206,000 | ||||||
Bad debt expense | 119,000 | 39,000 | ||||||
Deferred taxes | (867,000 | ) | (344,000 | ) | ||||
Accretion of preferred stock | 510,000 | 577,000 | ||||||
Amortization of warrant discount on preferred stock | 788,000 | 674,000 | ||||||
Stock-based compensation | 661,000 | 927,000 | ||||||
Fair market valuation of warrant and conversion liability | (4,694,000 | ) | (11,783,000 | ) | ||||
Loss on debt extinguishment | 636,000 | — | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | 579,000 | (1,224,000 | ) | |||||
Prepaid expenses and other | 2,000 | (812,000 | ) | |||||
Accounts payable | (59,000 | ) | (283,000 | ) | ||||
Accrued expenses and other liabilities | (828,000 | ) | 3,454,000 | |||||
Net cash flows provided by operating activities | 2,557,000 | 3,306,000 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Purchase of property and equipment | (231,000 | ) | (398,000 | ) | ||||
Acquisitions, net of cash and cash equivalents acquired | (300,000 | ) | (9,600,000 | ) | ||||
Net cash flows used in investing activities | (531,000 | ) | (9,998,000 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Bank overdrafts | (67,000 | ) | (372,000 | ) | ||||
Restricted cash | (202,000 | ) | — | |||||
Net borrowings on revolving credit facility | 5,478,000 | 864,000 | ||||||
Borrowings on term note | 5,100,000 | 12,000,000 | ||||||
Repayments of term note | (9,587,000 | ) | (4,625,000 | ) | ||||
Debt issuance costs | (189,000 | ) | (737,000 | ) | ||||
Repurchase of convertible debt | (2,870,000 | ) | — | |||||
Net cash flows provided by (used in) financing activities | (2,337,000 | ) | 7,130,000 | |||||
Net increase in cash and cash equivalents | (311,000 | ) | 438,000 | |||||
Cash and cash equivalents, beginning of period | 330,000 | 58,000 | ||||||
Cash and cash equivalents, end of period | $ | 19,000 | $ | 496,000 | ||||
Supplemental Disclosure of Cash Flow Information | ||||||||
Cash paid during the period for income taxes | $ | 133,000 | $ | 237,000 | ||||
Cash paid during the period for interest | $ | 1,782,000 | $ | 2,057,000 | ||||
Supplemental Disclosure of Non-Cash Information | ||||||||
Landlord leasehold incentives recorded as leasehold improvements | $ | 501,000 | $ | — | ||||
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NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
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NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
Six months ended | ||||||||
June | June | |||||||
2008 | 2007 | |||||||
Options | 2,072,092 | 992,346 | ||||||
Warrants | 112,440 | 3,294,514 | ||||||
Preferred stock | 3,695,355 | — | ||||||
Total | 5,879,887 | 4,286,860 | ||||||
Six months ended | ||||||||
June | June | |||||||
2008 | 2007 | |||||||
Basic Net Income | $ | 2,612,000 | $ | 9,778,000 | ||||
Convertible debt interest and amortization, net of tax | 1,295,000 | 1,343,000 | ||||||
Loss on debt repurchase, net of tax | 319,000 | — | ||||||
Make whole conversion interest, net of tax | (772,000 | ) | — | |||||
Preferred stock accretion and amortization | — | 1,251,000 | ||||||
Diluted Net Income | $ | 3,454,000 | $ | 12,372,000 | ||||
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NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
Six months ended | ||||||||
June | June | |||||||
2008 | 2007 | |||||||
Weighted average number of basic common shares outstanding | 10,548,330 | 6,023,752 | ||||||
Impact of the assumed conversion or exercise of: | ||||||||
Convertible notes | 5,263,108 | 3,880,960 | ||||||
Convertible debt make whole (a) | — | 384,740 | ||||||
Preferred stock | — | 2,425,734 | ||||||
Weighted average number of diluted common shares outstanding | 15,811,438 | 12,715,186 | ||||||
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NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
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NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
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NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
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NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
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NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
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NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
June | December | |||||||
2008 | 2007 | |||||||
Non Related Party | ||||||||
Principal | $ | 19,118,000 | $ | 21,953,000 | ||||
Discount | (5,422,000 | ) | (7,222,000 | ) | ||||
Net | $ | 13,696,000 | $ | 14,731,000 | ||||
Related Party | ||||||||
Principal | $ | 1,872,000 | $ | 2,060,000 | ||||
Discount | (531,000 | ) | (677,000 | ) | ||||
Net | $ | 1,341,000 | $ | 1,383,000 | ||||
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NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
June | December | |||||||
2008 | 2007 | |||||||
Non Related Party | ||||||||
Principal and premium | $ | 14,097,000 | $ | 14,657,000 | ||||
Discount | (8,626,000 | ) | (10,069,000 | ) | ||||
Net | $ | 5,471,000 | $ | 4,588,000 | ||||
Related Party | ||||||||
Principal and premium | $ | 1,070,000 | $ | — | ||||
Discount | (655,000 | ) | — | |||||
Net | $ | 415,000 | $ | — | ||||
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NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
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NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
Wgt. Avg. | ||||||||||||||||||||||||
Remaining | ||||||||||||||||||||||||
Wgt. Avg. | Contractual | Wgt. Avg. | Aggregate | |||||||||||||||||||||
Range of | Stock | Exercise | Life | Grant Date | Intrinsic | |||||||||||||||||||
Exercise Prices | Options | Price | (Years) | Fair Value | Value | |||||||||||||||||||
As of December 2007 | ||||||||||||||||||||||||
Outstanding | $ | 1.50 - $3.00 | 1,499,540 | $ | 2.97 | 9.32 | $ | 2.58 | $ | 28,500 | ||||||||||||||
Vested | $ | 3.00 | 273,329 | $ | 3.00 | 9.13 | $ | 3.04 | — | |||||||||||||||
Nonvested | $ | 1.50 - $3.00 | 1,226,211 | $ | 2.96 | 9.36 | $ | 2.48 | $ | 28,500 | ||||||||||||||
Period Activity | ||||||||||||||||||||||||
Issued | $ | 1.75 | 606,802 | $ | 1.75 | — | $ | 0.94 | — | |||||||||||||||
Exercised | — | — | — | — | — | |||||||||||||||||||
Forfeited | $ | 3.00 | 34,250 | $ | 3.00 | — | $ | 1.63 | — | |||||||||||||||
Expired | — | — | — | — | — | |||||||||||||||||||
As of June 2008 | ||||||||||||||||||||||||
Outstanding | $ | 1.50 - $3.00 | 2,072,092 | $ | 2.61 | 9.10 | $ | 2.08 | — | |||||||||||||||
Vested and Exercisable | $ | 3.00 | 587,835 | $ | 3.00 | 8.64 | $ | 3.06 | — | |||||||||||||||
Nonvested | $ | 1.50 - $3.00 | 1,484,257 | $ | 2.46 | 9.28 | $ | 1.73 | — |
Total intrinsic value of options exercised: | $ | — | ||
Total fair value of shares vested: | $ | 1,801,000 | ||
Unrecognized compensation cost related to nonvested awards: | $ | 1,788,000 | ||
Weighted-average period over which nonvested awards are expected to be recognized: | 1.31 years |
Six Months Ended | ||
June 2008 | June 2007 | |
$661,000 | $927,000 | |
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NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
Six Months Ended | ||
June 2008 | June 2007 | |
$932,000 | $812,000 | |
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NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
Six Months Ended | ||||||||
June 2008 | June 2007 | |||||||
Staffing revenues | $ | 73,058,000 | $ | 63,463,000 | ||||
PEO revenues | $ | 16,270,000 | $ | 17,497,000 | ||||
Total company revenues | $ | 89,328,000 | $ | 80,960,000 | ||||
Staffing depreciation | $ | 225,000 | $ | 88,000 | ||||
PEO depreciation | $ | 81,000 | $ | 80,000 | ||||
Total company depreciation | $ | 438,000 | $ | 285,000 | ||||
Staffing amortization | $ | 932,000 | $ | 812,000 | ||||
PEO amortization | $ | — | $ | — | ||||
Total company amortization | $ | 932,000 | $ | 812,000 | ||||
Staffing income before income taxes | $ | 3,394,000 | $ | 3,043,000 | ||||
PEO income before income taxes | $ | 2,784,000 | $ | 3,316,000 | ||||
Total company income before income taxes | $ | 1,934,000 | $ | 9,569,000 | ||||
Staffing capital expenditures | $ | 128,000 | $ | 269,000 | ||||
PEO capital expenditures | $ | 34,000 | $ | 61,000 | ||||
Total company capital expenditures | $ | 231,000 | $ | 398,000 |
As of | ||||||||
June 2008 | December 2007 | |||||||
Staffing assets | $ | 46,342,000 | $ | 43,874,000 | ||||
PEO assets | $ | 35,673,000 | $ | 33,684,000 | ||||
Total company assets | $ | 68,758,000 | $ | 69,486,000 | ||||
Staffing goodwill and intangibles | $ | 12,228,000 | $ | 12,860,000 | ||||
PEO goodwill and intangibles | $ | 12,090,000 | $ | 12,090,000 | ||||
Total company goodwill and intangibles | $ | 24,318,000 | $ | 24,950,000 |
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INFORMATION NOT REQUIRED IN PROSPECTUS
Amount | ||||
SEC registration fee | $ | — | ||
Printing and engraving expenses | 4,500.00 | |||
Legal fees and expenses | 3,000.00 | |||
Accounting fees and expenses | 6,000.00 | |||
Miscellaneous fees and expenses | 1,500.00 | |||
Total: | $ | 15,000.00 | ||
�� |
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• | Convertible notes and warrants. $30.0 million (currently $21.0 million) aggregate principal amount of 8% senior secured convertible notes were issued for $30.0 million and warrants to purchase 480,000 shares of common stock at an exercise price of $6.25 (currently $4.40) per share were issued for no additional consideration. The senior notes are secured by a second lien on substantially all of our assets and are convertible into 4.8 million shares of our common stock. | ||
• | Convertible preferred stock and warrants. 12,750 shares of Series A convertible preferred stock were issued at $1,000 per share and warrants to purchase 1,663,053 shares of common stock at an exercise price of $6.00 (currently $4.07) per share were issued for no additional consideration and are convertible into approximately 3.8 million shares of our common stock. |
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Exhibit # | Description | Reference | ||
2.1 | Plan of Merger between Global Merger Corp and Global Employment Solutions, Inc. | Incorporated by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 4, 2006 (File No. 000-51737), as amended. | ||
3.1 | Amended and Restated Certificate of Incorporation of Global Employment Holdings, Inc. | Incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 4, 2006 (File No. 000-51737), as amended. | ||
3.2 | Certificate of Designations, Preferences and Rights of Global Employment Holdings, Inc. | Incorporated by reference to Exhibit 3.2 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 4, 2006 (File No. 000-51737), as amended. |
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Exhibit # | Description | Reference | ||
3.3 | Amendment No. 1 to Certificate of Designations, Preferences and Rights of Series A Convertible Preferred Stock of Global Employment Holdings, Inc. | Incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 6, 2007 (File No. 000-51737), as amended. | ||
3.4 | Amended and Restated Bylaws of Global Employment Holdings, Inc. | Incorporated by reference to Exhibit 3.3 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 4, 2006 (File No. 000-51737), as amended. | ||
3.5 | Amended and Restated Certificate of Incorporation of Global Employment Holdings, Inc. | Incorporated by reference to Exhibit 3.2 to the Registrant’s Current Report on Form 10-K filed with the Securities and Exchange Commission on April 15, 2007 (File No. 000-51737), as amended. | ||
3.6 | Amended and Restated Certificate of Incorporation of Global Employment Holdings, Inc. | Incorporated by reference to Exhibit 3.2 to the Registrant’s Current Report on Form 10-K filed with the Securities and Exchange Commission on April 15, 2008 (File No. 000-51737), as amended | ||
4.1 | Form of Warrant issued under Notes Securities Purchase Agreement, dated as of March 31, 2006 | Incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 4, 2006 (File No. 000-51737), as amended. | ||
4.2 | Form of Warrant issued under Preferred Stock Securities Purchase Agreement, dated as of March 31, 2006 | Incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 4, 2006 (File No. 000-51737), as amended. | ||
4.3 | Form of Warrant issued under Common Stock Securities Purchase Agreement, dated as of March 31, 2006 | Incorporated by reference to Exhibit 4.3 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 4, 2006 (File No. 000-51737), as amended. | ||
4.4 | Registration Rights Agreement under Notes Securities Purchase Agreement | Incorporated by reference to Exhibit 4.4 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 4, 2006 (File No. 000-51737), as amended. |
4.5 | Registration Rights Agreement under Preferred Stock Securities Purchase Agreement | Incorporated by reference to Exhibit 4.5 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 4, 2006 (File No. 000-51737), as amended. | ||
4.6 | Registration Rights Agreement under Common Stock Securities Purchase Agreement | Incorporated by reference to Exhibit 4.6 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 4, 2006 (File No. 000-51737), as amended. |
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Exhibit # | Description | Reference | ||
4.7 | Registration Rights Agreement, dated as of March 31, 2006, among Global Employment Holdings, Inc., R&R Investments I, Arnold P. Kling and Kirk M. Warshaw | Incorporated by reference to Exhibit 4.7 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 4, 2006 (File No. 000-51737), as amended. | ||
4.8 | Lock-Up Agreement, dated as of March 31, 2006, among Global Employment Holdings, Inc., R&R Investments I, Arnold P. Kling and Kirk M. Warshaw | Incorporated by reference to Exhibit 4.8 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 4, 2006 (File No. 000-51737), as amended. | ||
4.9 | Form of Warrant issued under Subscription Agreement, dated as of October 3, 2007 | Incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 9, 2007 (File No. 000-51737) | ||
5.1 | Opinion of Brownstein Hyatt & Farber, P.C. regarding legality of securities offered | Incorporated by reference to Exhibit 5.1 to Amendment No. 1 to the Registrant’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on June 20, 2006. | ||
10.1 | Employment Agreement, dated as of March 14, 2007, among Global Employment Holdings, Inc., Global Employment Solutions, Inc. and Steven List | Incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 20, 2007 (File No. 000-51737). | ||
10.2 | Asset Purchase Agreement, dated as of December 29, 2006, by and among Global Employment Holdings, Inc., Career Blazers Personnel Services, Inc., Career Blazers Contingency Professionals, Inc., Career Blazers Personnel Services of Washington, D.C., Inc. and CapeSuccess LLC | Incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 5, 2007 (File No. 000-51737). | ||
10.3 | Amendment to Asset Purchase Agreement, dated as of February 28, 2007, by and among Global Employment Holdings, Inc., Career Blazers Personnel Services, Inc., Career Blazers Contingency Professionals, Inc., Career Blazers Personnel Services of Washington, D.C., Inc., and CapeSuccess LLC | Incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 6, 2007 (File No. 000-51737), as amended. | ||
10.4 | Credit Agreement, dated as of February 28, 2007, by and among Global Employment Solutions, Inc., Global Employment Holdings, Inc., Temporary Placement Service, Inc., Southeastern Personnel Management, Inc., Main Line Personnel Services, Inc., Friendly Advanced Software Technology, Inc., Excell Personnel Services Corporation, Southeastern Staffing, Inc., Bay HR, Inc., Southeastern Georgia HR, Inc., Southeastern Staffing II, Inc., Southeastern Staffing III, Inc., Southeastern Staffing IV, Inc., Southeastern Staffing V, Inc., Southeastern Staffing VI, Inc., Keystone Alliance, Inc., and CapitalSource Finance LLC, as administrative agent for the lenders, and the lenders from time to time parties hereto | Incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 6, 2007 (File No. 000-51737), as amended. |
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Exhibit # | Description | Reference | ||
10.5 | Subordination Agreement, dated as of February 28, 2007, by and among Whitebox Convertible Arbitrage Partners, L.P., for itself and in its capacity as collateral agent for the subordinated creditors, Radcliffe SPC, Ltd., for and on behalf of the Class A Convertible Crossover Segregated Portfolio, Magnetar Capital Master Fund, Ltd., Guggenheim Portfolio XXXI, LLC, Pandora Select Partners, LP, Whitebox Intermarket Partners, LP, Context Advantage Master Fund, L.P., on behalf of itself, Context Advantage Fund, LP, f/k/a Context Convertible Arbitrage Fund, L.P., and Context Offshore Advantage Fund, Ltd., f/k/a Context Convertible Arbitrage Offshore, Ltd., Context Opportunistic Master Fund, L.P., Gwirtsman Family Partners, LLC, Luci Altman, Gregory Bacharach, Howard Brill, Richard Goldman, Daniel Hollenbach, Terry Koch, Michael Lazrus, Steven List, Kenneth Michaels, Steven Pennington, Fred Viarrial, and Jay Wells, for the benefit of CapitalSource Finance LLC, for itself and as agent for the lenders now or hereafter existing under the Credit Agreement | Incorporated by reference to Exhibit 10.4 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 6, 2007 (File No. 000-51737), as amended. | ||
10.6 | Security Agreement, dated as of February 28, 2007, by and among Global Employment Solutions, Global Employment Holdings, Inc., Temporary Placement Service, Inc., Southeastern Personnel Management, Inc., Main Line Personnel Services, Inc., Friendly Advanced Software Technology, Inc., Excell Personnel Services Corporation, Southeastern Staffing, Inc., Bay HR, Inc., Southeastern Georgia HR, Inc., Southeastern Staffing II, Inc., Southeastern Staffing III, Inc., Southeastern Staffing IV, Inc., Southeastern Staffing V, Inc., Southeastern Staffing VI, Inc., Keystone Alliance, Inc., and CapitalSource Finance LLC, in its capacity as agent for the lender parties | Incorporated by reference to Exhibit 10.5 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 6, 2007 (File No. 000-51737), as amended. | ||
10.7 | Securities Pledge Agreement, dated as of February 28, 2007, between CapitalSource Finance LLC, as administrative agent for the lenders under the Credit Agreement, and Global Employment Holdings, Inc. | Incorporated by reference to Exhibit 10.6 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 6, 2007 (File No. 000-51737), as amended. | ||
10.8 | Securities Pledge Agreement, dated as of February 28, 2007, between CapitalSource Finance LLC, as administrative agent for the lenders under the Credit Agreement, and Global Employment Solutions | Incorporated by reference to Exhibit 10.7 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 6, 2007 (File No. 000-51737), as amended. | ||
10.9 | Securities Pledge Agreement, dated as of February 28, 2007, between CapitalSource Finance LLC, as administrative agent for the lenders under the Credit Agreement, and Southeastern Staffing, Inc. | Incorporated by reference to Exhibit 10.8 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 6, 2007 (File No. 000-51737), as amended | ||
10.10 | Securities Pledge Agreement, dated as of February 28, 2007, between CapitalSource Finance LLC, as administrative agent for the lenders under the Credit Agreement, and Excell Personnel Services Corporation | Incorporated by reference to Exhibit 10.9 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 6, 2007 (File No. 000-51737), as amended. |
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Exhibit # | Description | Reference | ||
10.11 | First Amendment to Senior Secured Convertible Notes, dated as of February 28, 2007, by and among Global Employment Holdings, Inc. and the holders of Global Employment Holdings, Inc. senior secured convertible notes | Incorporated by reference to Exhibit 10.10 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 6, 2007 (File No. 000-51737), as amended. | ||
10.12 | Letter from Global Employment Holdings, Inc., dated February 28, 2007, to holders of the senior convertible notes and the Series A convertible preferred stock regarding commitment to issue equity | Incorporated by reference to Exhibit 10.11 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 6, 2007 (File No. 000-51737), as amended. | ||
10.13 | Amended and Restated Employment Agreement, dated as of January 2, 2007, between Global Employment Solutions, Inc. and Terry Koch | Incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 5, 2007 (File No. 000-51737). | ||
10.14 | Global Employment Holdings, Inc. 2006 Stock Plan | Incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 15, 2006, as amended | ||
10.15 | Convertible Note and Warrant Sale Agreement, dated as of September 28, 2006, between Amatis Limited, Global Employment Holdings, Inc. and the purchasers named in Schedule I thereto | Incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 4, 2006 (File No. 000-51737). | ||
10.16 | First Amendment to Notes Securities Purchase Agreement, dated as of September 28, 2006, by and among Global Employment Holdings, Inc., Global Employment Solutions, Inc. and the investors listed on the signature pages thereto | Incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 4, 2006 (File No. 000-51737). | ||
10.17 | First Amendment to Security Agreement, Pledge Agreement and Guaranty, dated as of September 28, 2006, by and among Global Employment Holdings, Inc. Global Employment Solutions, Inc., various subsidiaries of Global Employment Solutions, Inc., Amatis Limited and Whitebox Convertible Arbitrage Partners, LP | Incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 4, 2006 (File No. 000-51737). | ||
10.18 | First Amendment to Amended and Restated Credit and Security Agreement, dated as of September 26, 2006, by and among Wells Fargo Bank, National Association, Global Employment Solutions, Inc. and various subsidiaries | Incorporated by reference to Exhibit 10.4 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 4, 2006 (File No. 000-51737). | ||
10.19 | Amended and Restated Credit and Security Agreement among Wells Fargo Bank, National Association, Global Employment Solutions, Inc. and various subsidiaries | Incorporated by reference to Exhibit 10.19 to Amendment No. 3 to the Registrant’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on July 26, 2006. | ||
10.20 | Fifth Amended and Restated Revolving Promissory Note under Amended and Restated Credit and Security Agreement | Incorporated by reference to Exhibit 10.20 to Amendment No. 3 to the Registrant’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on July 26, 2006. |
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Exhibit # | Description | Reference | ||
10.21 | First Amended and Restated Term Note under Amended and Restated Credit and Security Agreement | Incorporated by reference to Exhibit 10.21 to Amendment No. 3 to the Registrant’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on July 26, 2006. | ||
10.22 | Form of Pledge Agreement under Amended and Restated Credit and Security Agreement | Incorporated by reference to Exhibit 10.22 to Amendment No. 3 to the Registrant’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on July 26, 2006. | ||
10.23 | Form of Patent and Trademark Security Agreement under Amended and Restated Credit and Security Agreement | Incorporated by reference to Exhibit 10.23 to Amendment No. 3 to the Registrant’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on July 26, 2006. | ||
10.24 | Form of Copyright Security Agreement under Amended and Restated Credit and Security Agreement | Incorporated by reference to Exhibit 10.24 to Amendment No. 3 to the Registrant’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on July 26, 2006. | ||
10.25 | Amendment to Guarantor Documents under Amended and Restated Credit and Security Agreement | Incorporated by reference to Exhibit 10.37 to Amendment No. 3 to the Registrant’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on July 26, 2006. | ||
10.26 | Amended and Restated Employment Agreement, dated July 15, 2006, between Global Employment Holdings, Inc., Global Employment Solutions, Inc. and Howard Brill | Incorporated by reference to Exhibit 10.15 to Amendment No. 2 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 25, 2006 (File No. 000-51737). | ||
10.27 | Amended and Restated Employment Agreement, dated July 15, 2006, between Global Employment Holdings, Inc., Global Employment Solutions, Inc. and Dan Hollenbach | Incorporated by reference to Exhibit 10.16 to Amendment No. 2 to the Registrants Current Report on Form 8-K filed with the Securities and Exchange Commission on July 25, 2006 (File No. 000-51737). | ||
10.28 | Amended and Restated Employment Agreement, dated July 15, 2006, among Global Employment Solutions, Inc. and Stephen Pennington | Incorporated by reference to Exhibit 10.18 to Amendment No. 2 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 25, 2006 (File No. 000-51737). | ||
10.29 | Form of Share Purchase Agreement among Global Employment Solutions, Global Employment Holdings, Inc. and the shareholders of Global Employment Solutions, Inc. | Incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 4, 2006 (File No. 000-51737), as amended. |
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Exhibit # | Description | Reference | ||
10.30 | Notes Securities Purchase Agreement, dated as of March 31, 2006, among Global Employment Solutions, Inc. and the investors listed on the Schedule of Buyers attached thereto | Incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 4, 2006 (File No. 000-51737), as amended. | ||
10.31 | Joinder Agreement of Global Employment Holdings, Inc. to Notes Securities Purchase Agreement | Incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 4, 2006 (File No. 000-51737), as amended. | ||
10.32 | Form of Note under Notes Securities Purchase Agreement | Incorporated by reference to Exhibit 10.4 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 4, 2006 (File No. 000-51737), as amended. | ||
10.33 | Guaranty under Notes Securities Purchase Agreement | Incorporated by reference to Exhibit 10.5 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 4, 2006 (File No. 000-51737), as amended. | ||
10.34 | Pledge Agreement under Notes Securities Purchase Agreement | Incorporated by reference to Exhibit 10.6 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 4, 2006 (File No. 000-51737), as amended. | ||
10.35 | Security Agreement under Notes Securities Purchase Agreement | Incorporated by reference to Exhibit 10.7 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 4, 2006 (File No. 000-51737), as amended. | ||
10.36 | Subordination Agreement under Notes Securities Purchase Agreement | Incorporated by reference to Exhibit 10.8 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 4, 2006 (File No. 000-51737), as amended. |
10.37 | Preferred Stock Securities Purchase Agreement, dated as of March 31, 2006, among Global Employment Solutions, Inc. and the investors listed on the Schedule of Buyers attached thereto | Incorporated by reference to Exhibit 10.9 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 4, 2006 (File No. 000-51737), as amended. | ||
10.38 | Joinder Agreement of Global Employment Holdings, Inc. to Preferred Stock Securities Purchase Agreement | Incorporated by reference to Exhibit 10.10 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 4, 2006 (File No. 000-51737), as amended. | ||
10.39 | Common Stock Securities Purchase Agreement, dated as of March 31, 2006, among Global Employment Solutions, Inc. and the investors listed on the Schedule of Buyers attached thereto | Incorporated by reference to Exhibit 10.11 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 4, 2006 (File No. 000-51737), as amended. | ||
10.40 | Joinder Agreement of Global Employment Holdings, Inc. to Common Stock Securities Purchase Agreement | Incorporated by reference to Exhibit 10.12 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 4, 2006 (File No. 000-51737), as amended. |
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Exhibit # | Description | Reference | ||
10.41 | Form of Indemnification Agreement | Incorporated by reference to Exhibit 10.13 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 4, 2006 (File No. 000-51737), as amended. | ||
10.42 | Form of Noncompetition Agreement | Incorporated by reference to Exhibit 10.14 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 4, 2006 (File No. 000-51737), as amended. | ||
10.43 | Non-Disclosure, Non-Competition, Arbitration and Employment Agreement, dated April 4, 2001, among Global Employment Solutions, Inc., Southeastern Staffing, Inc. and Robert Larkin | Incorporated by reference to Exhibit 10.17 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 4, 2006 (File No. 000-51737), as amended. | ||
10.44 | Form of Guaranty under Fifth Amendment to Credit and Security Agreement and Waiver of Defaults and Amended and Restated Credit and Security Agreement | Incorporated by reference to Exhibit 10.25 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 4, 2006 (File No. 000-51737), as amended. | ||
10.45 | Form of Security Agreement under Fifth Amendment to Credit and Security Agreement and Waiver of Defaults | Incorporated by reference to Exhibit 10.26 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 4, 2006 (File No. 000-51737), as amended. | ||
10.46 | Form of Pledge Agreement under Fifth Amendment to Credit and Security Agreement and Waiver of Defaults | Incorporated by reference to Exhibit 10.22 to the Registrant’s Current Report on Form 8-K filed on July 25, 2006 (File No. 000-51737), as amended. | ||
10.47 | Form of Patent and Trademark Security Agreement under Fifth Amendment to Credit and Security Agreement and Waiver of Defaults | Incorporated by reference to Exhibit 10.23 to the Registrant’s Current Report on Form 8-K filed on July 25, 2006 (File No. 000-51737), as amended. | ||
10.48 | Form of Copyright Security Agreement under Fifth Amendment to Credit and Security Agreement and Waiver of Defaults | Incorporated by reference to Exhibit 10.24 to the Registrant’s Current Report on Form 8-K filed on July 25, 2006 (File No. 000-51737), as amended. |
10.49 | Sublease Agreement, dated as of March 23, 2006, among Continental Casualty Company and Global Employment Solutions, Inc. | Incorporated by reference to Exhibit 10.28 to the Registrant’s Current Report on Form 8-K filed on July 10, 2006 (File No. 000-51737), as amended. | ||
10.50 | Form of Employment Agreement for Consulting and Temporary Employees in Chicago, IL | Incorporated by reference to Exhibit 10.29 to Amendment No. 1 to the Registrant’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on June 20, 2006. | ||
10.51 | Form of Employment Agreement for Permanent Employees in Chicago, IL | Incorporated by reference to Exhibit 10.30 to Amendment No. 1 to the Registrant’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on June 20, 2006. |
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Exhibit # | Description | Reference | ||
10.52 | Form of Employment Agreement for Consulting and Temporary Employees in Hauppauge, NY | Incorporated by reference to Exhibit 10.31 to Amendment No. 1 to the Registrant’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on June 20, 2006. | ||
10.53 | Form of Employment Agreement for Permanent Employees in Hauppauge, NY | Incorporated by reference to Exhibit 10.32 to Amendment No. 1 to the Registrant’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on June 20, 2006. | ||
10.54 | Form of Employment Agreement for Consulting and Temporary Employees in Bala Cynwyd, PA | Incorporated by reference to Exhibit 10.33 to Amendment No. 1 to the Registrant’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on June 20, 2006. | ||
10.55 | Form of Employment Agreement for Permanent Employees in Bala Cynwyd, PA | Incorporated by reference to Exhibit 10.34 to Amendment No. 1 to the Registrant’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on June 20, 2006. | ||
10.56 | Form of Confidentiality, Noncompetition and Nonsolicitation Agreement | Incorporated by reference to Exhibit 10.34 to Amendment No. 1 to the Registrant’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on June 20, 2006. | ||
10.57 | Form of Confidentiality, Noncompetition and Nonsolicitation Agreement (Southeastern Companies, Inc.) | Incorporated by reference to Exhibit 10.35 to Amendment No. 1 to the Registrant’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on June 20, 2006. | ||
10.58 | Engagement Letter for Placement Agent Rodman & Renshaw, LLC | Incorporated by reference to Exhibit 10.27 to the Registrant’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on May 1, 2006, as amended. | ||
10.59 | Financial Statements of Career Blazers Personnel Services, Inc. and subsidiaries as of December 31, 2006 and 2005 and the related consolidated statements of operations, changes in stockholder’s equity (deficit) and cash flows for the years ended December 31, 2006, 2005 and 2004 | Incorporated by reference to Item 9.01 of Amendment No. 1 to the Registrant’s Current Report on Form 8-K filed on May 21, 2007 (File No. 000-51737). | ||
10.60 | Subscription Agreement, dated as of October 3, 2007, by and among Global Employment Holdings, Inc. and the purchasers signatory thereto | Incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on October 9, 2007 (File No. 000-51737). | ||
10.61 | Warrant Exercise and Cancellation Agreement dated as of December 26, 2007. | Incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on January 3, 2008 (File No. 000-51737). |
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Exhibit # | Description | Reference | ||
10.62 | Credit and Security Agreement | Incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 5, 2008 (File No. 000-51737). | ||
10.63 | $20,000,000 Revolving Promissory Note | Incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 5, 2008 (File No. 000-51737). | ||
10.64 | $6,000,000 Term Note | Incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 5, 2008 (File No. 000-51737). | ||
10.65 | Pledge Agreement | Incorporated by reference to Exhibit 10.4 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 5, 2008 (File No. 000-51737). | ||
10.66 | Patent and Trademark Security Agreement | Incorporated by reference to Exhibit 10.5 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 5, 2008 (File No. 000-51737). | ||
10.67 | Copyright Security Agreement | Incorporated by reference to Exhibit 10.6 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 5, 2008 (File No. 000-51737). | ||
10.68 | Guarantee | Incorporated by reference to Exhibit 10.7 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 5, 2008 (File No. 000-51737). | ||
10.69 | Guarantor Security Agreement | Incorporated by reference to Exhibit 10.8 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 5, 2008 (File No. 000-51737). | ||
10.70 | Subordination Agreement | Incorporated by reference to Exhibit 10.9 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 5, 2008 (File No. 000-51737). |
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Exhibit # | Description | Reference | ||
10.71 | Agreement to Enter into New Subordination Agreement | Incorporated by reference to Exhibit 10.10 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 5, 2008 (File No. 000-51737). | ||
21.1 | List of subsidiaries of Global Employment Holdings, Inc. | Filed herewith. | ||
23.1 | Consent of Mayer Hoffman McCann P.C. | Filed herewith. | ||
23.3 | Consent of Brownstein Hyatt Farber Schreck, P.C. | Incorporated by reference to Exhibit 5.1 to Amendment No. 1 to the Registrant’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on June 20, 2006. | ||
24.1 | Power of Attorney | Incorporated by reference to page II-9 of the Registrant’s Registration Statement on Form S-1 filed with the Securities Exchange Commission on May 1, 2006, as amended. |
(b) | Financial Statement Schedules |
• | To include any prospectus required by section 10(a)(3) of the Securities Act. |
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• | To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement. | ||
• | To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement. | ||
• | To supplement the prospectus, after the expiration of the subscription period, to set forth the results of the subscription offer, the transactions by the underwriters during the subscription period, the amount of unsubscribed securities to be purchased by the underwriters, and the terms of any subsequent reoffering thereof. If any public offering by the underwriters is to be made on terms differing from those set forth on the cover page of the prospectus, a post-effective amendment will be filed to set forth the terms of such offering. |
• | Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424; | ||
• | Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant; | ||
• | The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and | ||
• | Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser. |
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Global Employment Holdings, Inc. Registrant | ||||
August 29, 2008 | By: | /s/ Howard Brill | ||
Howard Brill | ||||
President and Chief Executive Officer | ||||
Principal Executive Officer and Director: | ||||||
/s/ Howard Brill | President, Chief Executive Officer and | |||||
Howard Brill | Director | |||||
Principal Financial and Accounting Officer: | ||||||
/s/ Dan Hollenbach | Chief Financial Officer, Treasurer and | |||||
Dan Hollenbach | Secretary | |||||
Directors: | ||||||
* | Director | |||||
Luci Staller Altman | ||||||
/s/ Richard Goldman | Director | |||||
Richard Goldman | ||||||
* | Director | |||||
Charles Gwirtsman | ||||||
* | Chief Operating Officer and Director | |||||
Steven List |
Howard Brill
(Attorney-in-fact)
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Exhibit # | Description | Reference | ||
2.1 | Plan of Merger between Global Merger Corp and Global Employment Solutions, Inc. | Incorporated by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 4, 2006 (File No. 000-51737), as amended. | ||
3.1 | Amended and Restated Certificate of Incorporation of Global Employment Holdings, Inc. | Incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 4, 2006 (File No. 000-51737), as amended. | ||
3.2 | Certificate of Designations, Preferences and Rights of Global Employment Holdings, Inc. | Incorporated by reference to Exhibit 3.2 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 4, 2006 (File No. 000-51737), as amended. | ||
3.3 | Amendment No. 1 to Certificate of Designations, Preferences and Rights of Series A Convertible Preferred Stock of Global Employment Holdings, Inc. | Incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 6, 2007 (File No. 000-51737), as amended. | ||
3.4 | Amended and Restated Bylaws of Global Employment Holdings, Inc. | Incorporated by reference to Exhibit 3.3 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 4, 2006 (File No. 000-51737), as amended. | ||
3.5 | Amended and Restated Certificate of Incorporation of Global Employment Holdings, Inc. | Incorporated by reference to Exhibit 3.2 to the Registrant’s Current Report on Form 10-K filed with the Securities and Exchange Commission on April 15, 2007 (File No. 000-51737), as amended. | ||
3.6 | Amended and Restated Certificate of Incorporation of Global Employment Holdings, Inc. | Incorporated by reference to Exhibit 3.2 to the Registrant’s Current Report on Form 10-K filed with the Securities and Exchange Commission on April 15, 2008 (File No. 000-51737), as amended | ||
4.1 | Form of Warrant issued under Notes Securities Purchase Agreement, dated as of March 31, 2006 | Incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 4, 2006 (File No. 000-51737), as amended. | ||
4.2 | Form of Warrant issued under Preferred Stock Securities Purchase Agreement, dated as of March 31, 2006 | Incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 4, 2006 (File No. 000-51737), as amended. | ||
4.3 | Form of Warrant issued under Common Stock Securities Purchase Agreement, dated as of March 31, 2006 | Incorporated by reference to Exhibit 4.3 to the Registrant’s Current Report on Form 8-K filed with the |
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Exhibit # | Description | Reference | ||
Securities and Exchange Commission on April 4, 2006 (File No. 000-51737), as amended. | ||||
4.4 | Registration Rights Agreement under Notes Securities Purchase Agreement | Incorporated by reference to Exhibit 4.4 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 4, 2006 (File No. 000-51737), as amended. |
4.5 | Registration Rights Agreement under Preferred Stock Securities Purchase Agreement | Incorporated by reference to Exhibit 4.5 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 4, 2006 (File No. 000-51737), as amended. | ||
4.6 | Registration Rights Agreement under Common Stock Securities Purchase Agreement | Incorporated by reference to Exhibit 4.6 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 4, 2006 (File No. 000-51737), as amended. | ||
4.7 | Registration Rights Agreement, dated as of March 31, 2006, among Global Employment Holdings, Inc., R&R Investments I, Arnold P. Kling and Kirk M. Warshaw | Incorporated by reference to Exhibit 4.7 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 4, 2006 (File No. 000-51737), as amended. | ||
4.8 | Lock-Up Agreement, dated as of March 31, 2006, among Global Employment Holdings, Inc., R&R Investments I, Arnold P. Kling and Kirk M. Warshaw | Incorporated by reference to Exhibit 4.8 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 4, 2006 (File No. 000-51737), as amended. | ||
4.9 | Form of Warrant issued under Subscription Agreement, dated as of October 3, 2007 | Incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 9, 2007 (File No. 000-51737) | ||
5.1 | Opinion of Brownstein Hyatt & Farber, P.C. regarding legality of securities offered | Incorporated by reference to Exhibit 5.1 to Amendment No. 1 to the Registrant’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on June 20, 2006. | ||
10.1 | Employment Agreement, dated as of March 14, 2007, among Global Employment Holdings, Inc., Global Employment Solutions, Inc. and Steven List | Incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 20, 2007 (File No. 000-51737). | ||
10.2 | Asset Purchase Agreement, dated as of December 29, 2006, by and among Global Employment Holdings, Inc., Career Blazers Personnel Services, Inc., Career Blazers Contingency Professionals, Inc., Career Blazers Personnel Services of Washington, D.C., Inc. and CapeSuccess LLC | Incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 5, 2007 (File No. 000-51737). |
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Exhibit # | Description | Reference | ||
10.3 | Amendment to Asset Purchase Agreement, dated as of February 28, 2007, by and among Global Employment Holdings, Inc., Career Blazers Personnel Services, Inc., Career Blazers Contingency Professionals, Inc., Career Blazers Personnel Services of Washington, D.C., Inc., and CapeSuccess LLC | Incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 6, 2007 (File No. 000-51737), as amended. | ||
10.4 | Credit Agreement, dated as of February 28, 2007, by and among Global Employment Solutions, Inc., Global Employment Holdings, Inc., Temporary Placement Service, Inc., Southeastern Personnel Management, Inc., Main Line Personnel Services, Inc., Friendly Advanced Software Technology, Inc., Excell Personnel Services Corporation, Southeastern Staffing, Inc., Bay HR, Inc., Southeastern Georgia HR, Inc., Southeastern Staffing II, Inc., Southeastern Staffing III, Inc., Southeastern Staffing IV, Inc., Southeastern Staffing V, Inc., Southeastern Staffing VI, Inc., Keystone Alliance, Inc., and CapitalSource Finance LLC, as administrative agent for the lenders, and the lenders from time to time parties hereto | Incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 6, 2007 (File No. 000-51737), as amended. | ||
10.5 | Subordination Agreement, dated as of February 28, 2007, by and among Whitebox Convertible Arbitrage Partners, L.P., for itself and in its capacity as collateral agent for the subordinated creditors, Radcliffe SPC, Ltd., for and on behalf of the Class A Convertible Crossover Segregated Portfolio, Magnetar Capital Master Fund, Ltd., Guggenheim Portfolio XXXI, LLC, Pandora Select Partners, LP, Whitebox Intermarket Partners, LP, Context Advantage Master Fund, L.P., on behalf of itself, Context Advantage Fund, LP, f/k/a Context Convertible Arbitrage Fund, L.P., and Context Offshore Advantage Fund, Ltd., f/k/a Context Convertible Arbitrage Offshore, Ltd., Context Opportunistic Master Fund, L.P., Gwirtsman Family Partners, LLC, Luci Altman, Gregory Bacharach, Howard Brill, Richard Goldman, Daniel Hollenbach, Terry Koch, Michael Lazrus, Steven List, Kenneth Michaels, Steven Pennington, Fred Viarrial, and Jay Wells, for the benefit of CapitalSource Finance LLC, for itself and as agent for the lenders now or hereafter existing under the Credit Agreement | Incorporated by reference to Exhibit 10.4 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 6, 2007 (File No. 000-51737), as amended. | ||
10.6 | Security Agreement, dated as of February 28, 2007, by and among Global Employment Solutions, Global Employment Holdings, Inc., Temporary Placement Service, Inc., Southeastern Personnel Management, Inc., Main Line Personnel Services, Inc., Friendly Advanced Software Technology, Inc., Excell Personnel Services Corporation, Southeastern Staffing, Inc., Bay HR, Inc., Southeastern Georgia HR, Inc., Southeastern Staffing II, Inc., Southeastern Staffing III, Inc., Southeastern Staffing IV, Inc., Southeastern Staffing V, Inc., Southeastern Staffing VI, Inc., Keystone Alliance, Inc., and CapitalSource Finance LLC, in its capacity as agent for the lender parties | Incorporated by reference to Exhibit 10.5 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 6, 2007 (File No. 000-51737), as amended. |
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Exhibit # | Description | Reference | ||
10.7 | Securities Pledge Agreement, dated as of February 28, 2007, between CapitalSource Finance LLC, as administrative agent for the lenders under the Credit Agreement, and Global Employment Holdings, Inc. | Incorporated by reference to Exhibit 10.6 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 6, 2007 (File No. 000-51737), as amended. | ||
10.8 | Securities Pledge Agreement, dated as of February 28, 2007, between CapitalSource Finance LLC, as administrative agent for the lenders under the Credit Agreement, and Global Employment Solutions | Incorporated by reference to Exhibit 10.7 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 6, 2007 (File No. 000-51737), as amended. | ||
10.9 | Securities Pledge Agreement, dated as of February 28, 2007, between CapitalSource Finance LLC, as administrative agent for the lenders under the Credit Agreement, and Southeastern Staffing, Inc. | Incorporated by reference to Exhibit 10.8 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 6, 2007 (File No. 000-51737), as amended | ||
10.10 | Securities Pledge Agreement, dated as of February 28, 2007, between CapitalSource Finance LLC, as administrative agent for the lenders under the Credit Agreement, and Excell Personnel Services Corporation | Incorporated by reference to Exhibit 10.9 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 6, 2007 (File No. 000-51737), as amended. | ||
10.11 | First Amendment to Senior Secured Convertible Notes, dated as of February 28, 2007, by and among Global Employment Holdings, Inc. and the holders of Global Employment Holdings, Inc. senior secured convertible notes | Incorporated by reference to Exhibit 10.10 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 6, 2007 (File No. 000-51737), as amended. |
10.12 | Letter from Global Employment Holdings, Inc., dated February 28, 2007, to holders of the senior convertible notes and the Series A convertible preferred stock regarding commitment to issue equity | Incorporated by reference to Exhibit 10.11 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 6, 2007 (File No. 000-51737), as amended. | ||
10.13 | Amended and Restated Employment Agreement, dated as of January 2, 2007, between Global Employment Solutions, Inc. and Terry Koch | Incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 5, 2007 (File No. 000-51737). | ||
10.14 | Global Employment Holdings, Inc. 2006 Stock Plan | Incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 15, 2006, as amended | ||
10.15 | Convertible Note and Warrant Sale Agreement, dated as of September 28, 2006, between Amatis Limited, Global Employment Holdings, Inc. and the purchasers named in Schedule I thereto | Incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 4, 2006 (File No. 000-51737). | ||
10.16 | First Amendment to Notes Securities Purchase Agreement, dated as of September 28, 2006, by and among Global Employment Holdings, Inc., Global Employment Solutions, Inc. and the investors listed on the signature pages thereto | Incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 4, 2006 (File No. 000-51737). |
Table of Contents
Exhibit # | Description | Reference | ||
10.17 | First Amendment to Security Agreement, Pledge Agreement and Guaranty, dated as of September 28, 2006, by and among Global Employment Holdings, Inc. Global Employment Solutions, Inc., various subsidiaries of Global Employment Solutions, Inc., Amatis Limited and Whitebox Convertible Arbitrage Partners, LP | Incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 4, 2006 (File No. 000-51737). | ||
10.18 | First Amendment to Amended and Restated Credit and Security Agreement, dated as of September 26, 2006, by and among Wells Fargo Bank, National Association, Global Employment Solutions, Inc. and various subsidiaries | Incorporated by reference to Exhibit 10.4 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 4, 2006 (File No. 000-51737). | ||
10.19 | Amended and Restated Credit and Security Agreement among Wells Fargo Bank, National Association, Global Employment Solutions, Inc. and various subsidiaries | Incorporated by reference to Exhibit 10.19 to Amendment No. 3 to the Registrant’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on July 26, 2006. | ||
10.20 | Fifth Amended and Restated Revolving Promissory Note under Amended and Restated Credit and Security Agreement | Incorporated by reference to Exhibit 10.20 to Amendment No. 3 to the Registrant’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on July 26, 2006. | ||
10.21 | First Amended and Restated Term Note under Amended and Restated Credit and Security Agreement | Incorporated by reference to Exhibit 10.21 to Amendment No. 3 to the Registrant’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on July 26, 2006. | ||
10.22 | Form of Pledge Agreement under Amended and Restated Credit and Security Agreement | Incorporated by reference to Exhibit 10.22 to Amendment No. 3 to the Registrant’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on July 26, 2006. | ||
10.23 | Form of Patent and Trademark Security Agreement under Amended and Restated Credit and Security Agreement | Incorporated by reference to Exhibit 10.23 to Amendment No. 3 to the Registrant’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on July 26, 2006. | ||
10.24 | Form of Copyright Security Agreement under Amended and Restated Credit and Security Agreement | Incorporated by reference to Exhibit 10.24 to Amendment No. 3 to the Registrant’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on July 26, 2006. | ||
10.25 | Amendment to Guarantor Documents under Amended and Restated Credit and Security Agreement | Incorporated by reference to Exhibit 10.37 to Amendment No. 3 to the Registrant’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on July 26, 2006. |
Table of Contents
Exhibit # | Description | Reference | ||
10.26 | Amended and Restated Employment Agreement, dated July 15, 2006, between Global Employment Holdings, Inc., Global Employment Solutions, Inc. and Howard Brill | Incorporated by reference to Exhibit 10.15 to Amendment No. 2 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 25, 2006 (File No. 000-51737). | ||
10.27 | Amended and Restated Employment Agreement, dated July 15, 2006, between Global Employment Holdings, Inc., Global Employment Solutions, Inc. and Dan Hollenbach | Incorporated by reference to Exhibit 10.16 to Amendment No. 2 to the Registrants Current Report on Form 8-K filed with the Securities and Exchange Commission on July 25, 2006 (File No. 000-51737). | ||
10.28 | Amended and Restated Employment Agreement, dated July 15, 2006, among Global Employment Solutions, Inc. and Stephen Pennington | Incorporated by reference to Exhibit 10.18 to Amendment No. 2 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 25, 2006 (File No. 000-51737). | ||
10.29 | Form of Share Purchase Agreement among Global Employment Solutions, Global Employment Holdings, Inc. and the shareholders of Global Employment Solutions, Inc. signatory thereto | Incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 4, 2006 (File No. 000-51737), as amended. | ||
10.30 | Notes Securities Purchase Agreement, dated as of March 31, 2006, among Global Employment Solutions, Inc. and the investors listed on the Schedule of Buyers attached thereto | Incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 4, 2006 (File No. 000-51737), as amended. | ||
10.31 | Joinder Agreement of Global Employment Holdings, Inc. to Notes Securities Purchase Agreement | Incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 4, 2006 (File No. 000-51737), as amended. | ||
10.32 | Form of Note under Notes Securities Purchase Agreement | Incorporated by reference to Exhibit 10.4 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 4, 2006 (File No. 000-51737), as amended. | ||
10.33 | Guaranty under Notes Securities Purchase Agreement | Incorporated by reference to Exhibit 10.5 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 4, 2006 (File No. 000-51737), as amended. | ||
10.34 | Pledge Agreement under Notes Securities Purchase Agreement | Incorporated by reference to Exhibit 10.6 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 4, 2006 (File No. 000-51737), as amended. | ||
10.35 | Security Agreement under Notes Securities Purchase Agreement | Incorporated by reference to Exhibit 10.7 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 4, 2006 (File No. 000-51737), as amended. |
Table of Contents
Exhibit # | Description | Reference | ||
10.36 | Subordination Agreement under Notes Securities Purchase Agreement | Incorporated by reference to Exhibit 10.8 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 4, 2006 (File No. 000-51737), as amended. | ||
10.37 | Preferred Stock Securities Purchase Agreement, dated as of March 31, 2006, among Global Employment Solutions, Inc. and the investors listed on the Schedule of Buyers attached thereto | Incorporated by reference to Exhibit 10.9 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 4, 2006 (File No. 000-51737), as amended. | ||
10.38 | Joinder Agreement of Global Employment Holdings, Inc. to Preferred Stock Securities Purchase Agreement | Incorporated by reference to Exhibit 10.10 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 4, 2006 (File No. 000-51737), as amended. | ||
10.39 | Common Stock Securities Purchase Agreement, dated as of March 31, 2006, among Global Employment Solutions, Inc. and the investors listed on the Schedule of Buyers attached thereto | Incorporated by reference to Exhibit 10.11 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 4, 2006 (File No. 000-51737), as amended. | ||
10.40 | Joinder Agreement of Global Employment Holdings, Inc. to Common Stock Securities Purchase Agreement | Incorporated by reference to Exhibit 10.12 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 4, 2006 (File No. 000-51737), as amended. | ||
10.41 | Form of Indemnification Agreement | Incorporated by reference to Exhibit 10.13 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 4, 2006 (File No. 000-51737), as amended. | ||
10.42 | Form of Noncompetition Agreement | Incorporated by reference to Exhibit 10.14 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 4, 2006 (File No. 000-51737), as amended. | ||
10.43 | Non-Disclosure, Non-Competition, Arbitration and Employment Agreement, dated April 4, 2001, among Global Employment Solutions, Inc., Southeastern Staffing, Inc. and Robert Larkin | Incorporated by reference to Exhibit 10.17 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 4, 2006 (File No. 000-51737), as amended. | ||
10.44 | Form of Guaranty under Fifth Amendment to Credit and Security Agreement and Waiver of Defaults and Amended and Restated Credit and Security Agreement | Incorporated by reference to Exhibit 10.25 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 4, 2006 (File No. 000-51737), as amended. | ||
10.45 | Form of Security Agreement under Fifth Amendment to Credit and Security Agreement and Waiver of Defaults | Incorporated by reference to Exhibit 10.26 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 4, 2006 (File No. 000-51737), as amended. | ||
10.46 | Form of Pledge Agreement under Fifth Amendment to Credit and Security Agreement and Waiver of Defaults | Incorporated by reference to Exhibit 10.22 to the Registrant’s Current Report on Form 8-K filed on July 25, 2006 (File No. 000-51737), as amended. |
Table of Contents
Exhibit # | Description | Reference | ||
10.47 | Form of Patent and Trademark Security Agreement under Fifth Amendment to Credit and Security Agreement and Waiver of Defaults | Incorporated by reference to Exhibit 10.23 to the Registrant’s Current Report on Form 8-K filed on July 25, 2006 (File No. 000-51737), as amended. | ||
10.48 | Form of Copyright Security Agreement under Fifth Amendment to Credit and Security Agreement and Waiver of Defaults | Incorporated by reference to Exhibit 10.24 to the Registrant’s Current Report on Form 8-K filed on July 25, 2006 (File No. 000-51737), as amended. | ||
10.49 | Sublease Agreement, dated as of March 23, 2006, among Continental Casualty Company and Global Employment Solutions, Inc. | Incorporated by reference to Exhibit 10.28 to the Registrant’s Current Report on Form 8-K filed on July 10, 2006 (File No. 000-51737), as amended. | ||
10.50 | Form of Employment Agreement for Consulting and Temporary Employees in Chicago, IL | Incorporated by reference to Exhibit 10.29 to Amendment No. 1 to the Registrant’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on June 20, 2006. | ||
10.51 | Form of Employment Agreement for Permanent Employees in Chicago, IL | Incorporated by reference to Exhibit 10.30 to Amendment No. 1 to the Registrant’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on June 20, 2006. | ||
10.52 | Form of Employment Agreement for Consulting and Temporary Employees in Hauppauge, NY | Incorporated by reference to Exhibit 10.31 to Amendment No. 1 to the Registrant’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on June 20, 2006. | ||
10.53 | Form of Employment Agreement for Permanent Employees in Hauppauge, NY | Incorporated by reference to Exhibit 10.32 to Amendment No. 1 to the Registrant’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on June 20, 2006. | ||
10.54 | Form of Employment Agreement for Consulting and Temporary Employees in Bala Cynwyd, PA | Incorporated by reference to Exhibit 10.33 to Amendment No. 1 to the Registrant’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on June 20, 2006. | ||
10.55 | Form of Employment Agreement for Permanent Employees in Bala Cynwyd, PA | Incorporated by reference to Exhibit 10.34 to Amendment No. 1 to the Registrant’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on June 20, 2006. | ||
10.56 | Form of Confidentiality, Noncompetition and Nonsolicitation Agreement | Incorporated by reference to Exhibit 10.34 to Amendment No. 1 to the Registrant’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on June 20, 2006. |
Table of Contents
Exhibit # | Description | Reference | ||
10.57 | Form of Confidentiality, Noncompetition and Nonsolicitation Agreement (Southeastern Companies, Inc.) | Incorporated by reference to Exhibit 10.35 to Amendment No. 1 to the Registrant’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on June 20, 2006. | ||
10.58 | Engagement Letter for Placement Agent Rodman & Renshaw, LLC | Incorporated by reference to Exhibit 10.27 to the Registrant’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on May 1, 2006, as amended. | ||
10.59 | Financial Statements of Career Blazers Personnel Services, Inc. and subsidiaries as of December 31, 2006 and 2005 and the related consolidated statements of operations, changes in stockholder’s equity (deficit) and cash flows for the years ended December 31, 2006, 2005 and 2004 | Incorporated by reference to Item 9.01 of Amendment No. 1 to the Registrant’s Current Report on Form 8-K filed on May 21, 2007 (File No. 000-51737). | ||
10.60 | Subscription Agreement, dated as of October 3, 2007, by and among Global Employment Holdings, Inc. and the purchasers signatory thereto | Incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on October 9, 2007 (File No. 000-51737). | ||
10.61 | Warrant Exercise and Cancellation Agreement dated as of December 26, 2007. | Incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on January 3, 2008 (File No. 000-51737). | ||
10.62 | Credit and Security Agreement | Incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 5, 2008 (File No. 000-51737). | ||
10.63 | $20,000,000 Revolving Promissory Note | Incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 5, 2008 (File No. 000-51737). | ||
10.64 | $6,000,000 Term Note | Incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 5, 2008 (File No. 000-51737). | ||
10.65 | Pledge Agreement | Incorporated by reference to Exhibit 10.4 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 5, 2008 (File No. 000-51737). | ||
10.66 | Patent and Trademark Security Agreement | Incorporated by reference to Exhibit 10.5 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 5, 2008 (File No. 000-51737). |
Table of Contents
Exhibit # | Description | Reference | ||
10.67 | Copyright Security Agreement | Incorporated by reference to Exhibit 10.6 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 5, 2008 (File No. 000-51737). | ||
10.68 | Guarantee | Incorporated by reference to Exhibit 10.7 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 5, 2008 (File No. 000-51737). | ||
10.69 | Guarantor Security Agreement | Incorporated by reference to Exhibit 10.8 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 5, 2008 (File No. 000-51737). | ||
10.70 | Subordination Agreement | Incorporated by reference to Exhibit 10.9 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 5, 2008 (File No. 000-51737). | ||
10.71 | Agreement to Enter into New Subordination Agreement | Incorporated by reference to Exhibit 10.10 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 5, 2008 (File No. 000-51737). | ||
21.1 | List of subsidiaries of Global Employment Holdings, Inc. | Filed herewith. | ||
23.1 | Consent of Mayer Hoffman McCann P.C. | Filed herewith. | ||
23.3 | Consent of Brownstein Hyatt Farber Schreck, P.C. | Incorporated by reference to Exhibit 5.1 to Amendment No. 1 to the Registrant’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on June 20, 2006. | ||
24.1 | Power of Attorney | Incorporated by reference to page II-9 of the Registrant’s Registration Statement on Form S-1 filed with the Securities Exchange Commission on May 1, 2006, as amended. |