Cover
Cover - shares | 9 Months Ended | |
Jun. 30, 2022 | Aug. 12, 2022 | |
Cover [Abstract] | ||
Entity Registrant Name | GEE GROUP INC. | |
Entity Central Index Key | 0000040570 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Current Fiscal Year End Date | --09-30 | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Emerging Growth Company | false | |
Entity Current Reporting Status | Yes | |
Document Period End Date | Jun. 30, 2022 | |
Entity Filer Category | Non-accelerated Filer | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2022 | |
Entity Common Stock Shares Outstanding | 114,100,455 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 1-05707 | |
Entity Incorporation State Country Code | IL | |
Entity Tax Identification Number | 36-6097429 | |
Entity Interactive Data Current | Yes | |
Entity Address Address Line 1 | 7751 Belfort Parkway | |
Entity Address Address Line 2 | Suite 150 | |
Entity Address City Or Town | Jacksonville | |
Entity Address State Or Province | FL | |
Entity Address Postal Zip Code | 32256 | |
City Area Code | 630 | |
Local Phone Number | 954-0400 | |
Security 12b Title | Common Stock, no par value | |
Trading Symbol | JOB | |
Security Exchange Name | NYSEAMER |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2022 | Sep. 30, 2021 |
CURRENT ASSETS | ||
Cash | $ 17,540 | $ 9,947 |
Accounts receivable, less allowances ($774 and $286, respectively) | 21,151 | 23,070 |
Prepaid expenses and other current assets | 769 | 668 |
Total current assets | 39,460 | 33,685 |
Property and equipment, net | 1,034 | 765 |
Goodwill | 61,293 | 63,443 |
Intangible assets, net | 12,005 | 14,754 |
Right-of-use assets | 3,168 | 3,920 |
Other long-term assets | 831 | 1,022 |
TOTAL ASSETS | 117,791 | 117,589 |
CURRENT LIABILITIES | ||
Accounts payable | 2,574 | 2,257 |
Accrued compensation | 5,921 | 6,413 |
Current Paycheck Protection Program loans | 0 | 16,741 |
Current operating lease liabilities | 1,462 | 1,681 |
Other current liabilities | 2,982 | 4,065 |
Total current liabilities | 12,939 | 31,157 |
Deferred taxes | 522 | 591 |
Noncurrent operating lease liabilities | 2,196 | 3,006 |
Other long-term liabilities | 509 | 2,066 |
Total liabilities | 16,166 | 36,820 |
SHAREHOLDERS' EQUITY | ||
Common stock, no-par value; authorized - 200,000 shares; issued and outstanding 114,100 shares at June 30, 2022 and September 30, 2021 | 111,884 | 111,416 |
Accumulated deficit | (10,259) | (30,647) |
Total shareholders' equity | 101,625 | 80,769 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 117,791 | $ 117,589 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2022 | Sep. 30, 2021 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Accounts Receivable, Allowances | $ 774 | $ 286 |
Common Stock, Shares Authorized | 200,000,000 | 200,000,000 |
Common Stock, Shares Issued | 114,100,000 | 114,100,000 |
Common Stock, Shares Outstanding | 114,100,000 | 114,100,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
NET REVENUES: | ||||
Contract staffing services | $ 33,087 | $ 32,539 | $ 103,516 | $ 94,850 |
Direct hire placement services | 8,026 | 5,529 | 20,073 | 12,579 |
NET REVENUES | 41,113 | 38,068 | 123,589 | 107,429 |
Cost of contract services | 24,612 | 24,242 | 76,992 | 70,115 |
GROSS PROFIT | 16,501 | 13,826 | 46,597 | 37,314 |
Selling, general and administrative expenses | 12,860 | 11,113 | 37,447 | 29,779 |
Depreciation expense | 96 | 78 | 276 | 228 |
Amortization of intangible assets | 720 | 1,015 | 2,749 | 3,074 |
Goodwill impairment charge | 0 | 0 | 2,150 | 0 |
INCOME FROM OPERATIONS | 2,825 | 1,620 | 3,975 | 4,233 |
Gain (loss) on extinguishment of debt | 0 | (2,047) | 16,773 | (1,768) |
Interest expense | (96) | (539) | (301) | (5,759) |
INCOME (LOSS) BEFORE INCOME TAX PROVISION | 2,729 | (966) | 20,447 | (3,294) |
Provision for income tax expense (benefit) | 96 | (29) | 59 | (307) |
NET INCOME (LOSS) | $ 2,633 | $ (937) | $ 20,388 | $ (2,987) |
BASIC EARNINGS (LOSS) PER SHARE | $ 0.02 | $ (0.01) | $ 0.18 | $ (0.07) |
DILUTED EARNINGS (LOSS) PER SHARE | $ 0.02 | $ (0.01) | $ 0.18 | $ (0.07) |
WEIGHTED AVERAGE SHARES OUTSTANDING: | ||||
BASIC | 114,100 | 92,354 | 114,100 | 42,563 |
DILUTED | 115,642 | 92,354 | 115,609 | 42,563 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY (unaudited) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Accumulated Deficit |
Balance, shares at Sep. 30, 2020 | 17,667,000 | |||
Balance, amount at Sep. 30, 2020 | $ 27,378 | $ 58,031 | $ (30,653) | |
Share-based compensation | 311 | $ 0 | 311 | 0 |
Net loss | (315) | (315) | ||
Balance, shares at Dec. 31, 2020 | 17,667,000 | |||
Balance, amount at Dec. 31, 2020 | 27,374 | 58,342 | (30,968) | |
Balance, shares at Sep. 30, 2020 | 17,667,000 | |||
Balance, amount at Sep. 30, 2020 | 27,378 | 58,031 | (30,653) | |
Net loss | (2,987) | |||
Balance, shares at Jun. 30, 2021 | 114,100,000 | |||
Balance, amount at Jun. 30, 2021 | 77,641 | 111,281 | (33,640) | |
Balance, shares at Dec. 31, 2020 | 17,667,000 | |||
Balance, amount at Dec. 31, 2020 | 27,374 | 58,342 | (30,968) | |
Share-based compensation | 293 | 293 | ||
Net loss | (1,735) | (1,735) | ||
Balance, shares at Mar. 31, 2021 | 17,667,000 | |||
Balance, amount at Mar. 31, 2021 | 25,932 | 58,635 | (32,703) | |
Share-based compensation | 231 | 231 | ||
Net loss | (937) | (937) | ||
Issuance of stock for restricted stock, shares | 600,000 | |||
Sale of common stock in public offering, shares | 95,833,000 | |||
Sale of common stock in public offering, amount | 52,415 | 52,415 | ||
Balance, shares at Jun. 30, 2021 | 114,100,000 | |||
Balance, amount at Jun. 30, 2021 | 77,641 | 111,281 | (33,640) | |
Balance, shares at Sep. 30, 2021 | 114,100,000 | |||
Balance, amount at Sep. 30, 2021 | 80,769 | 111,416 | (30,647) | |
Share-based compensation | 147 | $ 0 | 147 | 0 |
Net income | 16,668 | $ 0 | 0 | 16,668 |
Balance, shares at Dec. 31, 2021 | 114,100,000 | |||
Balance, amount at Dec. 31, 2021 | 97,584 | 111,563 | (13,979) | |
Balance, shares at Sep. 30, 2021 | 114,100,000 | |||
Balance, amount at Sep. 30, 2021 | 80,769 | 111,416 | (30,647) | |
Net loss | 20,388 | |||
Balance, shares at Jun. 30, 2022 | 114,100,000 | |||
Balance, amount at Jun. 30, 2022 | 101,625 | 111,884 | (10,259) | |
Balance, shares at Dec. 31, 2021 | 114,100,000 | |||
Balance, amount at Dec. 31, 2021 | 97,584 | 111,563 | (13,979) | |
Share-based compensation | 152 | $ 0 | 152 | 0 |
Net income | 1,087 | $ 0 | 0 | 1,087 |
Balance, shares at Mar. 31, 2022 | 114,100,000 | |||
Balance, amount at Mar. 31, 2022 | 98,823 | 111,715 | (12,892) | |
Share-based compensation | 169 | 169 | ||
Net loss | 2,633 | |||
Net income | 2,633 | 2,633 | ||
Balance, shares at Jun. 30, 2022 | 114,100,000 | |||
Balance, amount at Jun. 30, 2022 | $ 101,625 | $ 111,884 | $ (10,259) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income (loss) | $ 20,388 | $ (2,987) |
Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities: | ||
(Gain) loss on extinguishment of debt | (16,773) | 1,768 |
Depreciation and amortization | 3,025 | 3,302 |
Non-cash lease expense | 1,046 | 1,013 |
Goodwill impairment charge | 2,150 | 0 |
Share-based compensation | 468 | 835 |
Increase (decrease) in allowance for doubtful accounts | 488 | (522) |
Deferred income taxes | (69) | (231) |
Amortization of debt issuance costs | 115 | 903 |
Paid in kind interest on term loan | 0 | 1,210 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 1,431 | (3,775) |
Accounts payable | 317 | (234) |
Accrued compensation | (492) | (168) |
Accrued interest | 32 | 487 |
Change in other assets, net of change in other liabilities | (4,308) | (3,877) |
Net cash provided by (used in) operating activities | 7,818 | (2,276) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Acquisition of property and equipment | (225) | (68) |
Net cash used in investing activities | (225) | (68) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from the sale of common stock in public offering | 0 | 52,415 |
Payment on term loan | 0 | (44,194) |
Net payments on revolving credit | 0 | (11,828) |
Debt issue costs | 0 | (764) |
Net cash used in financing activities | 0 | (4,371) |
Net change in cash | 7,593 | (6,715) |
Cash at beginning of period | 9,947 | 14,074 |
Cash at end of period | 17,540 | 7,359 |
SUPPLEMENTAL CASH FLOW INFORMATION: | ||
Cash paid for interest | 154 | 3,619 |
Cash paid for taxes | 396 | 245 |
Non-cash investing and financing activities | ||
Right-of-use assets | 294 | 0 |
Acquisition of equipment with finance lease | $ 320 | $ 76 |
Description of Business
Description of Business | 9 Months Ended |
Jun. 30, 2022 | |
Description of Business | |
Description Of Business | 1. Description of Business GEE Group Inc. was incorporated in the State of Illinois in 1962 and is the successor to employment offices doing business since 1893. GEE Group Inc. and its wholly owned material operating subsidiaries, Access Data Consulting Corporation, Agile Resources, Inc., BMCH, Inc., Paladin Consulting, Inc., Scribe Solutions, Inc., SNI Companies, Inc., Triad Logistics, Inc., and Triad Personnel Services, Inc. (collectively referred to as the “Company”, “us”, “our”, or “we”) are providers of permanent and temporary professional and industrial staffing and placement services in and near several major U.S cities. We specialize in the placement of information technology, accounting, finance, office, engineering, and medical professionals for direct hire and contract staffing for our professional clients and provide temporary staffing services for our industrial clients. The Company markets its services using the trade names General Employment Enterprises, Omni One, Ashley Ellis, Agile Resources, Scribe Solutions Inc., Access Data Consulting Corporation, Paladin Consulting Inc., SNI Companies (including Staffing Now, Accounting Now, and Certes), Triad Personnel Services and Triad Staffing. As of June 30, 2022, we operated twenty-eight (28) branch offices in downtown or suburban areas of major U.S. cities in eleven (11) states and serve four (4) additional U.S. locations utilizing local staff members working remotely. Liquidity The primary sources of liquidity for the Company are revenues earned and collected from its clients for the placement of contractors and permanent employment candidates and borrowings available under its current and former asset-based senior secured revolving credit facilities. Uses of liquidity include primarily the costs and expenses necessary to fund operations, including payment of compensation to the Company’s contract and permanent employees, payment of operating costs and expenses, payment of taxes, payment of interest, fees and principal under its debt agreements, and capital expenditures. On April 19, 2021, the Company completed the initial closing of a follow-on public offering of 83,333 shares of common stock at a public offering price of $0.60 per share. Gross proceeds of the offering totaled $50,000, which after deducting the underwriting discount, legal fees, and offering expenses, resulted in net proceeds of $45,478. On April 27, 2021, the underwriters of the Company’s follow-on public offering exercised, in full, their 15% over–allotment option to purchase an additional 12,500 common shares (the “option shares”) of the Company at the public offering price of $0.60 per share. The Company closed the transaction on April 28, 2021 and received net proceeds from the sale of the option shares of approximately $6,937, after deducting the applicable underwriting discount. On April 20, 2021, as the result of the completion of the public offering, the Company repaid $56,022 in aggregate outstanding indebtedness under the Former Credit Agreement, including accrued interest, using the net proceeds of its underwritten public offering and available cash. The repaid debt was originally obtained from investors led by MGG Investment Group LP (“MGG”) on April 21, 2017 and had a maturity date of June 30, 2023. The MGG debt was comprised of a revolving credit facility with a principal balance on the date of repayment of approximately $11,828, which was subject to an annual interest rate comprised of the greater of the London Interbank Offering Rate (“LIBOR”) or 1%, plus a 10% margin (approximately 11% per annum), and a term loan with a principal balance on the date of repayment of approximately $43,735, which was subject to an annual interest rate of the greater of LIBOR or 1% plus a 10% margin. The term loan also had an annual payment-in-kind (“PIK”) interest rate of 5% in addition to its cash interest rate, which was being added to the term loan principal balance (cash and PIK interest rate combined of approximately 16% per annum). Accrued interest of approximately $459 was paid in connection with the principal repayments. On May 14, 2021, the Company entered a Loan, Security and Guaranty Agreement for a $20 million asset-based senior secured revolving credit facility with CIT Bank, N.A. (the “CIT Facility”). Concurrent with the May 14, 2021 closing of the CIT Facility, the Company borrowed $5,326 and utilized these funds to pay all remaining unpaid Exit and Restructuring Fees due to its former senior lenders in the amount of $4,978, with the remainder going to direct fees and costs associated with the CIT Facility. Additional information regarding the CIT Facility is presented in Note 8. Management believes that the Company has adequate cash and working capital and can generate adequate liquidity to meet its obligations for the foreseeable future and at least for one year after the date that these unaudited condensed consolidated financial statements are issued. Coronavirus Pandemic (“COVID-19”), Paycheck Protection Program Loans and Deferral of Federal Payroll Taxes under the CARES Act In approximately mid-March 2020, the Company began to experience the severe negative effects of the economic disruptions resulting from COVID-19. These included abrupt reductions in demand for the Company’s primary sources of revenue, its temporary and direct hire placements, lost productivity due to business closings both by clients and at the Company’s own operating locations, and the significant disruptive impacts to many other aspects of normal operations. Some effects of COVID-19 and the subsequent variants of the virus continue to be felt, although to a lesser extent, with the most severe impacts being felt in the commercial (“Industrial”) segment and, to a lesser extent, in the professional segment including finance, accounting and office clerical (“FAO”) contract staffing service end markets. Between April 29 and May 7, 2020, the Company and eight of its operating subsidiaries obtained loans in the aggregate amount of $19,927 from BBVA USA (now known as PNC Bank), as lender, pursuant to the Paycheck Protection Plan (“PPP”), which was established under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) and administered by the U.S. Small Business Administration (“SBA”). These funds were the only source of financing available to our companies and businesses and were critical to our ability to maintain operations, including the employment of our temporary and full-time employees, in order to provide our services and meet our liquidity requirements in the midst of the worldwide Coronavirus Pandemic. The PPP loans were used primarily to restore employee pay-cuts, recall furloughed or laid-off employees, support the payroll costs for existing employees, hire new employees, and for other allowable purposes including interest costs on certain business mortgage obligations, rent and utilities. The Company accounted for the PPP loans as a debt (see Note 9) in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 470, Debt The Company and its operating subsidiaries have been granted forgiveness of their respective outstanding PPP loans, including the Company’s last four remaining PPP loans and interest for GEE Group Inc., BMCH, Inc., Paladin Consulting, Inc., and SNI Companies, Inc., in the amounts of $2,024, $2,630, $1,956, and $10,163, respectively, which were forgiven by the SBA in December 2021. The Company recognized net gains of $16,773, in aggregate, during the nine months ended June 30, 2022. The PPP loans obtained by GEE Group Inc., and its operating subsidiaries together as an affiliated group, have exceeded the $2,000 audit threshold established by the SBA, and therefore, also will be subject to audit by the SBA in the future. If any of the nine forgiven PPP loans are reinstated in whole or in part as the result of a future audit, a charge or charges would be incurred, accordingly, and they would need to be repaid. If the companies are unable to repay the portions of their PPP loans that ultimately may be reinstated from available liquidity or operating cash flow, we may be required to raise additional equity or debt capital to repay the PPP loans. The Company and its subsidiaries, under the CARES Act, also were eligible to defer paying $3,654, in aggregate, of applicable payroll taxes incurred during fiscal 2020. One half of the deferred deposits of the employer’s share of Social Security tax were required to be paid on or before December 31, 2021 to be considered timely (and avoid a failure to deposit penalty), and the remaining fifty percent (50%) of the eligible deferred amounts are required to be paid similarly by December 31, 2022. The first half of the required deferred deposits payments totaling $1,827, in aggregate, were paid prior to December 31, 2021, as required. The remaining deferred amounts are included in other current liabilities on the accompanying unaudited condensed consolidated financial statements. |
Significant Accounting Policies
Significant Accounting Policies and Estimates | 9 Months Ended |
Jun. 30, 2022 | |
Significant Accounting Policies and Estimates | |
Significant Accounting Policies And Estimates | 2. Significant Accounting Policies and Estimates Basis of Presentation The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Article 8 of Regulation S-X. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete consolidated financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the three and nine-month periods ended June 30, 2022 are not necessarily indicative of the results that may be expected for the year ending September 30, 2022. The unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended September 30, 2021, as filed on December 23, 2021. Principles of Consolidation The unaudited condensed consolidated financial statements include the accounts and transactions of the Company and its wholly owned subsidiaries. All significant inter-company accounts and transactions are eliminated in consolidation. Use of Estimates The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Revenue Recognition Revenues from contracts with customers are generated from direct hire placement services, professional contract services, and industrial contract services. Revenues are recognized when promised services are performed for customers, and in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services. Our revenues are recorded net of variable consideration such as sales adjustments or allowances. Direct hire placement service revenues from contracts with customers are recognized when employment candidates accept offers of employment, less a provision for estimated credits or refunds to customers as the result of applicants not remaining employed for the entirety of the Company’s guarantee period (referred to as “falloffs”). The Company’s guarantee periods for permanently placed employees generally range from 60 to 90 days from the date of hire. Fees associated with candidate placement are generally calculated as a percentage of the new employee’s annual compensation. No fees for permanent placement services are charged to employment candidates. Temporary staffing service revenues from contracts with customers are recognized in amounts the Company has a right to invoice as the services are rendered by the Company’s temporary employees. The Company records temporary staffing revenue on a gross basis rather than on a net basis as an agent in the presentation of revenues and expenses. The Company has concluded that gross reporting is appropriate because the Company maintains primary responsibility for and controls the staff members that it provides to perform services for its clients. The Company has the risk of identifying and hiring qualified employees (as opposed to client employees), has the discretion to select the employees and establish their price, is responsible for compensating them, and bears the risk for services that are not fully paid for by customers. Falloffs and refunds during the period are reflected in the unaudited condensed consolidated statements of operations as a reduction of direct hire placement service revenues and were approximately $521 and $2,018, and $271 and $1,044 for the three and nine-month periods ended June 30, 2022 and 2021, respectively. Expected future falloffs and refunds are reflected in the unaudited condensed consolidated balance sheet as a reduction of accounts receivable as described under Accounts Receivable, below. See Note 14 for disaggregated revenues by segment. Payment terms in our contracts vary by the type and location of our customer and the services offered. The terms between invoicing and when payments are due are not significant. Cost of Contract Staffing Services The cost of contract services includes the wages and the related payroll taxes, employee benefits and certain other employee-related costs of the Company’s contract service employees, while they work on contract assignments. Cash and Cash Equivalents The Company maintains deposits in financial institutions and balances may exceed federally insured limits. We have never experienced any losses related to these balances. Highly liquid investments with a maturity of three months or less when purchased, if any, are considered to be cash equivalents. As of June 30, 2022 and September 30, 2021, there were no cash equivalents. Accounts Receivable The Company extends credit to its various customers based on evaluation of the customer’s financial condition and ability to pay the Company in accordance with the payment terms. An allowance for placement falloffs is recorded as a reduction of revenues for estimated losses due to applicants not remaining employed during the Company’s guarantee period. An allowance for doubtful accounts is recorded as a charge to bad debt expense where collection is considered to be doubtful due to credit issues. These allowances taken together reflect management’s estimate of the potential losses inherent in the accounts receivable balances based on historical loss statistics and known factors impacting our clients. Management believes that the nature of the contract services business, wherein client companies are generally dependent on our contract employees in the same manner as permanent employees for their production cycles and the conduct of their respective businesses contributes to a relatively small accounts receivable allowance. As of June 30, 2022 and September 30, 2021, the allowance for doubtful accounts was $774 and $286, respectively. The Company charges off uncollectible accounts once the invoices are deemed unlikely to be collectible. The allowance also includes reserves for permanent placement falloffs of $243 and $115 as of June 30, 2022 and September 30, 2021, respectively. Property and Equipment Property and equipment are recorded at cost. Depreciation expense is calculated on a straight-line basis over estimated useful lives of five years for computer equipment and two to ten years for office equipment, furniture and fixtures. The Company capitalizes computer software purchased or developed for internal use and amortizes it over an estimated useful life of five years. The carrying value of property and equipment is reviewed for impairment whenever events or changes in circumstances indicate that it may not be recoverable. If the carrying amount of an asset group is greater than its estimated future undiscounted cash flows, the carrying value is written down to the estimated fair value. There was no impairment of property and equipment for the three and nine-month periods ended June 30, 2022 and 2021. Leases The Company determines if a contractual arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, current operating lease liabilities, and noncurrent operating lease liabilities on the Company’s unaudited condensed consolidated balance sheet. The Company evaluates and classifies leases as operating or finance leases for financial reporting purposes. The classification evaluation begins at the commencement date and the lease term used in the evaluation includes the non-cancellable period for which the Company has the right to use the underlying asset, together with renewal option periods when the exercise of the renewal option is reasonably certain or failure to exercise such option results in an economic penalty. All the Company’s real estate leases are classified as operating leases. Also, the Company elected the practical expedient which allows aggregation of non-lease components with the related lease components when evaluating accounting treatment. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date of the lease based on the present value of lease payments over the lease term. The lease payments included in the present value are fixed lease payments. As most of the Company’s leases do not provide an implicit rate, the Company estimates its collateralized incremental borrowing rate, based on information available at the commencement date, in determining the present value of lease payments. The Company applies the portfolio approach in applying discount rates to its classes of leases. The operating lease ROU assets include any payments made before the commencement date. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company does not currently have subleases. The Company also does not currently have residual value guarantees or material or unusual restrictive covenants in its leases. Goodwill The Company evaluates its goodwill for possible impairment as prescribed by FASB Accounting Standards Update (“ASU”) 2017-04, Intangibles — Goodwill and Other (Topic 350), Simplifying the Test for Goodwill Impairment Intangible Assets Separately identifiable intangible assets held in the form of non-compete agreements, customer relationships, and trade names were recorded at their estimated fair value at the date of acquisition and are amortized over their estimated useful lives ranging from two to ten years using both accelerated and straight-line methods. Impairment of Long-lived Assets (other than Goodwill) The Company recognizes an impairment of long-lived intangible assets used in operations, other than goodwill, when events or circumstances indicate that the asset might be impaired and the estimated undiscounted cash flows to be generated by those assets over their remaining lives are less than the carrying amount of those items. The net carrying value of assets not recoverable is reduced to fair value, which is typically calculated using the discounted cash flow method. The Company did not recognize and record any impairments of long-lived intangible assets used in operations during the three and nine-month periods ended June 30, 2022 and 2021. Fair Value Measurement The Company follows the provisions of FASB ASC 820, Fair Value Measurement The standard establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances when observable inputs are not available. The hierarchy is described below: Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. Level 2: Observable prices that are based on inputs not quoted on active markets but corroborated by market data. Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs. The fair value of the Company’s current assets and current liabilities approximate their carrying values due to their short-term nature. The fair value disclosures of the Company’s long-term liabilities approximate their respective fair values based on current yield for debt instruments with similar terms. The Company has no assets or liabilities which are measured at fair value on a recurring basis. Fair value measurements utilized in evaluating the Company’s goodwill and other intangible assets for impairments are measured at fair value on a non-recurring basis using a combination of Level 2 and Level 3 inputs. Earnings and Loss per Share Basic earnings and loss per share are computed by dividing net income or loss attributable to common stockholders by the weighted average common shares outstanding for the period. Diluted earnings and loss per share are computed giving effect to all potentially dilutive common shares. Potentially dilutive common shares may consist of incremental shares issuable upon the vesting of restricted shares granted but unissued, and exercise of stock options and warrants. The dilutive effect of outstanding warrants and options is reflected in earnings and loss per share by use of the treasury stock method. For the three and nine-month periods ended June 30, 2022, the weighted average dilutive incremental shares, or common stock equivalents, included in the calculations of dilutive shares were 1,542 and 1,508. Common stock equivalents, which are excluded because their effect is anti-dilutive, were approximately 2,483 and 1,983, and 3,110 and 2,882 for the three and nine-month periods ended June 30, 2022 and 2021, respectively. For the three and nine-month periods ended June 30, 2021, in which a net loss was incurred, all potentially dilutive common shares are considered antidilutive and thus are excluded from the calculation. Advertising Expenses The Company expenses the costs of print and internet media advertising and promotions as incurred and reports these costs in selling, general and administrative expenses. For the three and nine-month periods ended June 30, 2022 and 2021, advertising expense totaled $484 and $1,485, and $442 and $1,324 respectively. Share-Based Compensation The Company accounts for share-based awards to employees in accordance with FASB ASC 718, Compensation-Stock Compensation See Note 11 for the assumptions used to calculate the fair value of share-based employee and non-employee compensation. Upon the exercise of options, it is the Company's policy to issue new shares rather than utilizing treasury shares. Income Taxes The Company accounts for income taxes under the asset and liability method, FASB ASC 740, Income Taxes The Company recognizes deferred tax assets to the extent that it is believed these assets are more likely than not to be realized. In making such a determination, all available positive and negative evidence is considered, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If it's determined that the Company would be able to realize deferred tax assets in the future in excess of the net recorded amount, an adjustment would be made to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. The Company records uncertain tax positions on the basis of a two-step process in which (1) determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, the Company recognizes the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. Interest and penalties related to unrecognized tax benefits are recognized on the income tax expense line in the accompanying unaudited condensed consolidated statement of operations. As of June 30, 2022 and September 30, 2021, no accrued interest or penalties are included on the related tax liability line in the accompanying unaudited condensed consolidated balance sheet. |
New Accounting Pronouncements
New Accounting Pronouncements | 9 Months Ended |
Jun. 30, 2022 | |
New Accounting Pronouncements | |
New Accounting Pronouncements | 3. New Accounting Pronouncements Recently Issued Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting Reference Rate Reform (Topic 848): Scope No other recent accounting pronouncements were issued by the FASB and the Securities and Exchange Commission (“SEC”) that are believed by management to have a material impact on the Company’s present or future financial statements. |
Property and Equipment
Property and Equipment | 9 Months Ended |
Jun. 30, 2022 | |
Property and Equipment | |
Property And Equipment | 4. Property and Equipment Property and equipment, net consisted of the following: June 30, 2022 September 30, 2021 Computer software $ 481 $ 462 Office equipment, furniture, fixtures and leasehold improvements 3,568 3,042 Total property and equipment, at cost 4,049 3,504 Accumulated depreciation and amortization (3,015 ) (2,739 ) Property and equipment, net $ 1,034 $ 765 Depreciation expense for three and nine-month periods ended June 30, 2022 and 2021 was $96 and $276, and $78 and $228, respectively. |
Leases
Leases | 9 Months Ended |
Jun. 30, 2022 | |
Leases | |
Leases | 5. Leases The Company leases space for all its branch offices, which are generally located either in downtown or suburban business centers, and for its corporate headquarters. Branch offices are generally leased over periods ranging from three to five years. The corporate office lease expires in 2026. The Company’s leases generally provide for payment of basic rent plus a share of building real estate taxes, maintenance costs and utilities. Operating lease expenses were $548 and $1,625, and $551 and $1,674 for the three and nine-month periods ended June 30, 2022 and 2021, respectively. Supplemental cash flow information related to leases consisted of the following: Nine Months Ended June 30, 2022 2021 Cash paid for operating lease liabilities $ 1,490 1,425 Supplemental balance sheet information related to leases consisted of the following: June 30, 2022 September 30, 2021 Weighted average remaining lease term for operating leases (in years) 2.0 2.7 Weighted average discount rate for operating leases 5.0 % 5.9 % The table below reconciles the undiscounted future minimum lease payments under non-cancelable lease agreements having initial terms in excess of one year to the total operating lease liabilities recognized on the unaudited condensed consolidated balance sheet as of June 30, 2022, including certain closed offices are as follows: Remainder of Fiscal 2022 $ 482 Fiscal 2023 1,472 Fiscal 2024 1,172 Fiscal 2025 602 Fiscal 2026 194 Thereafter 29 Less: Imputed interest (293 ) Present value of operating lease liabilities (a) $ 3,658 (a) Includes current portion of $1,462 for operating leases. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Jun. 30, 2022 | |
Goodwill and Intangible Assets | |
Goodwill And Intangible Assets | 6. Goodwill and Intangible Assets Goodwill Goodwill as of June 30, 2022 and September 30, 2021 consisted of the following: June 30, 2022 September 30, 2021 Acquisition Value Accumulated Impairment Net Book Value Acquisition Value Accumulated Impairment Net Book Value Goodwill $ 76,593 $ (15,300 ) $ 61,293 $ 76,593 $ (13,150 ) $ 63,443 The Company completed its most recent annual goodwill impairment assessment, as of September 30, 2021, and determined that its goodwill was not impaired. The amount of discount inherent in the Company’s market capitalization reported on the NYSE American exchange when compared with consolidated stockholders’ equity, or net book value, had increased since September 30, 2021; therefore, the Company performed an interim assessment of its goodwill for impairment as of December 31, 2021. The estimated fair values of its Professional Services and Industrial Services reporting units were adjusted based on qualitative and quantitative analysis so that they reconcile more precisely with the Company’s market capitalization as of December 31, 2021, plus an assumed control premium. As a result, the Company recognized a non-cash impairment charge of $2,150 during the three-month period ended December 31, 2021. The Company reassessed its qualitative and quantitative analysis of goodwill for impairment as of June 30, 2022 and, as a result, no additional impairment charge was taken. Intangible Assets The following tables set forth the costs, accumulated amortization, and net book value of the Company’s separately identifiable intangible assets as of June 30, 2022 and September 30, 2021 and estimated future amortization expense. June 30, 2022 September 30, 2021 Cost Accumulated Amortization Net Book Value Cost Accumulated Amortization Net Book Value Customer relationships $ 29,070 $ (17,822 ) $ 11,248 $ 29,070 $ (15,844 ) $ 13,226 Trade names 8,329 (7,572 ) 757 8,329 (6,801 ) 1,528 Non-Compete 4,331 (4,331 ) - 4,331 (4,331 ) - Total $ 41,730 $ (29,725 ) $ 12,005 $ 41,730 $ (26,976 ) $ 14,754 Estimated Amortization Expense Remaining Fiscal 2022 $ 720 Fiscal 2023 2,879 Fiscal 2024 2,879 Fiscal 2025 2,741 Fiscal 2026 1,870 Thereafter 916 $ 12,005 The trade names are amortized on a straight-line basis over their respective estimated useful lives of between five and ten years. Intangible assets that represent customer relationships are amortized on the basis of estimated future undiscounted cash flows or using the straight-line basis over estimated remaining useful lives of five to ten years. The amortization expense for intangible assets was $720 and $2,749, and $1,015 and $3,074 for three and nine-month periods ended June 30, 2022 and 2021, respectively. |
Former Revolving Credit Facilit
Former Revolving Credit Facility and Term Loan | 9 Months Ended |
Jun. 30, 2022 | |
Former Revolving Credit Facility and Term Loan | |
Former Revolving Credit Facility And Term Loan | 7. Former Revolving Credit Facility and Term Loan The Company and its subsidiaries, as borrowers, were parties to a Revolving Credit, Term Loan and Security Agreement (the “Former Credit Agreement”) with certain investment funds managed by MGG. The principal and remaining unpaid accrued interest and fee balances under the Revolving Credit Facility and Term Loan balances outstanding under the Former Credit Agreement, as amended, were fully repaid and the Former Credit Agreement was retired on April 20, 2021. Additional information regarding the repayment of the Former Credit Agreement is presented in Note 1. |
Senior Bank Loan Security and G
Senior Bank Loan Security and Guarantee Agreement | 9 Months Ended |
Jun. 30, 2022 | |
Senior Bank Loan Security and Guarantee Agreement | |
Senior Bank Loan, Security And Guarantee Agreement | 8. Senior Bank Loan, Security and Guarantee Agreement On May 14, 2021, the Company and its subsidiaries entered a Loan, Security and Guaranty Agreement for a $20 million asset-based senior secured revolving credit facility with CIT Bank, N.A. The CIT Facility is collateralized by 100% of the assets of the Company and its subsidiaries who are co-borrowers and/or guarantors. The CIT Facility matures on the fifth anniversary of the closing date (May 14, 2026). As of June 30, 2022, the Company had no outstanding borrowings and $14,317 available for borrowing under the terms of the CIT Facility. The Company also had $599 in unamortized debt issue cost associated with the CIT Facility. The amortization expense of these debt costs totaled $38 and $115 for the three and nine-month periods ended June 30, 2022, respectively. Under the CIT Facility, advances will be subject to a borrowing base formula that is computed based on 85% of eligible accounts receivable of the Company and subsidiaries as defined in the CIT Facility, and subject to certain other criteria, conditions, and applicable reserves, including any additional eligibility requirements as determined by the administrative agent. The CIT Facility is subject to usual and customary covenants and events of default for credit facilities of this type. The interest rate, at the Company’s election, will be based on either the Base Rate, as defined, plus the applicable margin; or LIBOR (or any successor thereto) for the applicable interest period, subject to a 1% floor, plus the applicable margin. The CIT Facility also contains provisions addressing the potential future replacement of LIBOR utilized and referenced in the loan agreement, in the event LIBOR becomes no longer available. In addition to interest costs on advances outstanding, the CIT Facility will provide for an unused line fee ranging from 0.375% to 0.50% depending on the amount of undrawn credit, original issue discount and certain fees for diligence, implementation, and administration. |
CARES Act Paycheck Protection P
CARES Act Paycheck Protection Program Loans | 9 Months Ended |
Jun. 30, 2022 | |
CARES Act Paycheck Protection Program Loans | |
Cares Act Paycheck Protection Program Loans | 9. CARES Act Paycheck Protection Program Loans Between April 29 and May 7, 2020, the Company obtained PPP loans for each of its operating subsidiaries. The PPP loans were used primarily to restore employee pay-cuts, recall furloughed or laid-off employees, support the payroll costs for existing employees, hire new employees, and for other allowable purposes including interest costs on certain business mortgage obligations, rent and utilities. Each of the Company’s subsidiaries executed a separate promissory note evidencing unsecured loans under the PPP. The following promissory notes were executed by the Company and its subsidiaries: GEE Group, Inc. for $1,992; Scribe Solutions, Inc. for $277; Agile Resources, Inc. for $1,206; Access Data Consulting Corporation for $1,456; Paladin Consulting, Inc. for $1,925; SNI Companies, Inc. for $10,000; Triad Personnel Services, Inc. for $404; Triad Logistics, Inc. for $78; and BMCH, Inc. for $2,589. The Company and its operating subsidiaries have been granted forgiveness of their respective outstanding PPP loans, including the Company’s last four remaining PPP loans and interest for GEE Group Inc., BMCH, Inc., Paladin Consulting, Inc., and SNI Companies, Inc., in the amounts of $2,024, $2,630, $1,956, and $10,163, respectively, which were forgiven by the SBA in December 2021. The Company recognized net gains of $16,773, in aggregate, during the nine months ended June 30, 2022 as a result of the forgiveness of its last four PPP loans. The PPP loans obtained by GEE Group Inc., as a public company, and some of its operating subsidiaries, together as an affiliated group, have exceeded the $2,000 audit threshold established by the SBA, and therefore, also will be subject to audit by the SBA in the future. If any of the nine forgiven PPP loans are reinstated in whole or in part as the result of a future audit, a charge or charges would be incurred, accordingly, and they would need to be repaid. If the companies are unable to repay the portions of their PPP loans that ultimately may be reinstated from available liquidity or operating cash flow, we may be required to raise additional equity or debt capital to repay the PPP loans. |
Accrued Compensation
Accrued Compensation | 9 Months Ended |
Jun. 30, 2022 | |
Accrued Compensation | |
Accrued Compensation | 10. Accrued Compensation Accrued Compensation is comprised of accrued wages, the related payroll taxes, employee benefits of the Company's employees, including those working on contract assignments, commissions earned and not yet paid and estimated commissions and bonuses payable. |
Equity
Equity | 9 Months Ended |
Jun. 30, 2022 | |
Equity | |
Equity | 11. Equity Preferred Stock The Company has authorized 20,000 shares of preferred stock of which 1,000 shares have been designated Series A Preferred Stock, and no shares were issued or are outstanding; 5,950 shares have been designated Series B Preferred Stock, of which 5,926 shares were issued and none remain outstanding, and 3,000 shares have been designated Series C Preferred Stock, of which 2,093 shares were issued and none remain outstanding as of June 30, 2022 and September 30, 2021. Based on the terms of the Series B Convertible Preferred Stock, if certain fundamental transactions were to occur, the Series B Convertible Preferred Stock would require redemption, which would preclude permanent equity classification on the accompanying condensed consolidated balance sheets. The Series C Convertible Preferred Stock has a Liquidation Value equal to $1.00 per share and ranks pari passu with the Company’s Series B Convertible Preferred Stock and senior to all “Junior Securities” (including the Company’s Common Stock) with respect to any distribution of assets upon liquidation, dissolution or winding up of the Company, whether voluntary or involuntary. Amended and Restated 2013 Incentive Stock Plan As of June 30, 2022, there were stock options outstanding under the Company’s Amended and Restated 2013 Incentive Stock Plan (the “Plan”). During fiscal 2021, the 2013 Incentive Stock Plan was amended to increase the total shares available for restricted stock and stock option grants by 10,000 to a total of 15,000 (7,500 restricted stock shares and 7,500 stock option shares). The Plan authorizes the Compensation Committee of the Board of Directors to grant either incentive or non-statutory stock options to employees. Vesting periods are established by the Compensation Committee at the time of grant. As of June 30, 2022, there were 9,771 shares available to be granted under the Plan (4,913 shares available for stock option grants and 4,858 shares available for restricted stock grants). Restricted Stock The Company granted 100 shares of restricted common stock during the nine-month period ended June 30, 2022. Share-based compensation expense attributable to restricted stock was $76 and $224, and $138 and $475 during the three and nine-month periods ended June 30, 2022 and 2021, respectively. As of June 30, 2022, there was approximately $391 of unrecognized compensation expense related to restricted stock outstanding, and the weighted average vesting period for those grants was 3.08 years. A summary of restricted stock activity is presented as follows: Number of Shares Weighted Average Fair Value ($) Non-vested restricted stock outstanding as of September 30, 2021 1,442 0.60 Granted - - Vested - - Non-vested restricted stock outstanding as of December 31, 2021 1,442 0.60 Granted 100 0.53 Vested - - Non-vested restricted stock outstanding as of March 31, 2022 1,542 0.59 Granted - - Vested - - Non-vested restricted stock outstanding as of June 30, 2022 1,542 0.59 Warrants The Company had 77 warrants outstanding as of June 30, 2022 and September 30, 2021 with a weighted average exercise price per share of $2. The outstanding warrants had a weighted average remaining contractual life of 2.76 and 3.50 as of June 30, 2022 and September 30, 2021, respectively. No warrants were granted or expired during the three and nine-month periods ended June 30, 2022 and 2021. Stock Options All stock options outstanding as of June 30, 2022 and September 30, 2021 were non-statutory stock options, had exercise prices equal to the market price on the date of grant, and had expiration dates ten years from the date of grant. Share-based compensation expense attributable to stock options and warrants was $93 and $244, and $93 and $360 for the three and nine-month periods ended June 30, 2022 and 2021, respectively. As of June 30, 2022, there was approximately $678 of unrecognized compensation expense related to unvested stock options outstanding, and the weighted average remaining vesting period for those options was 3.78 years. A summary of stock option activity is presented as follows: Number of Shares Weighted Average Exercise Price Per Share ($) Weighted Average Remaining Contractual Life (Years) Total Intrinsic Value of Options ($) Options outstanding as of September 30, 2021 1,672 2.14 7.35 - Granted - - - - Forfeited (1 ) 2.99 - - Options outstanding as of December 31, 2021 1,671 2.14 7.10 - Granted 50 0.53 - - Forfeited (80 ) 1.12 - - Options outstanding as of March 31, 2022 1,641 2.14 6.89 - Granted 865 0.59 - - Forfeited (101 ) 0.88 - - Options outstanding as of June 30, 2022 2,405 1.55 7.87 - Exercisable as of September 30, 2021 890 3.14 6.08 - Exercisable as of June 30, 2022 1,114 2.58 6.07 - |
Income Tax
Income Tax | 9 Months Ended |
Jun. 30, 2022 | |
Income Tax | |
Income Tax | 12 . Income Tax The following table presents the provision for income taxes and our effective tax rate for the three and nine-month periods ended June 30, 2022 and 2021: Three Months Ended, June 30, Nine Months Ended, June 30, 2022 2021 2022 2021 Provision for income tax expense (benefit) $ 96 $ (29 ) $ 59 $ (307 ) Effective tax rate 3 % 3 % 0 % 9 % The effective income tax rate on operations is based upon the estimated income for the year and adjustments, if any, in the applicable quarterly periods for the potential tax consequences, benefits, resolutions of tax audits or other tax contingencies. Our effective tax rates for the three-month periods ended June 30, 2022 and 2021, are lower than the statutory rate primarily due to the effect of the valuation allowance on the net DTA position. Other than the deferred tax liability relating to indefinite lived assets, the Company is maintaining a valuation allowance against the remaining net DTA position. In addition, during the nine-month periods ended June 30, 2022 and 2021, the Company recognized non-taxable gains of $16,773 and $2,236, respectively, as discrete items from forgiveness and extinguishment of the Company’s PPP loans. The Company also incurred a discrete charge in the form of a noncash goodwill impairment charge of $2,150 during the nine-month period ended June 30, 2022. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Jun. 30, 2022 | |
Commitments and contingencies (Note 13) | |
Commitments And Contingencies | 13. Commitments and Contingencies Litigation and Claims On March 23, 2022, the Company settled a legal matter involving two separate, but related lawsuits, filed by plaintiff Sands Brothers Venture Capital II, LLC. These two lawsuits and others in which the Company was not a named party, involved a dispute amongst certain former affiliate and non-affiliate entities, and certain former officers and directors of the Company, stemming from a series of transactions that allegedly occurred during the period 2008 through 2010. The Company was sued in 2014 and 2017, based on the allegation that it was a participant and aided and abetted in the fraudulent conveyance of funds. The plaintiff was a creditor of an unaffiliated now defunct entity whose assets the Company is alleged to have received. Given the facts and circumstances of the case, it has been the Company’s belief and assessment that the lawsuits were meritless, and that the likelihood of a material adverse resolution was remote. The Company’s ongoing legal expenses including depositions, court filings, etc. incurred over the years to defend itself from the claims made by the plaintiff in the respective lawsuits, have, for the most part, been either paid directly to the law firms or reimbursed by insurance. The Company continues to believe that its defenses were meritorious and that the final results of litigation would, overall, have been favorable on the merits. However, given the age of the matter, the potential future significant ongoing uninsured portions of legal and other costs to be incurred, including the extraordinary expenses of flying and housing witnesses and experts for the trial, and the future time, attention and effort necessary by management to satisfactorily resolve the matter through the courts, the Company made the business decision to take advantage of an opportunity to settle the case. In this regard, the Company entered into a Confidential Settlement Agreement and Mutual Release, dated March 23, 2022, with the plaintiff for both lawsuits. Under the terms of the agreement and release, neither the plaintiff nor the Company have admitted or conceded to any wrongdoing, and the matter has been settled in its entirety for a one-time payment to the plaintiff of approximately $1,175, of which the Company’s portion is $975, with insurance paying the balance. This payment was due and paid by April 8, 2022, and the expense has been recognized as a pre-tax charge in the Company’s condensed consolidated financial statements for the nine-month period ended June 30, 2022. The Company and its subsidiaries are involved in various other litigation that arises in the ordinary course of business. There are no other pending significant legal proceedings to which the Company is a party for which management believes the ultimate outcome would have a material adverse effect on the Company’s financial position. |
Segment Data
Segment Data | 9 Months Ended |
Jun. 30, 2022 | |
Segment Data | 14. Segment Data The Company provides the following distinctive services: (a) direct hire placement services, (b) temporary professional services staffing in the fields of information technology, accounting, finance and office, engineering, and medical, and (c) temporary industrial staffing. These services can be divided into two reportable segments: Professional Staffing Services and Industrial Staffing Services. Some selling, general and administrative expenses are not fully allocated among Industrial Services and Professional Staffing Services. Unallocated corporate expenses primarily include certain executive compensation expenses and salaries, certain administrative salaries, corporate legal expenses, stock compensation expenses, consulting expenses, audit fees, corporate rent and facility costs, board fees, acquisition, integration and restructuring expenses, and interest expense. Three Months Ended Nine Months Ended June 30, June 30, 2022 2021 2022 2021 Industrial Staffing Services Contract services revenue $ 4,120 $ 3,792 $ 11,944 $ 12,927 Contract services gross margin (1) 16.6 % 15.4 % 15.5 % 25.2 % Income (loss) from operations $ 136 $ (389 ) $ 828 $ 1,525 Depreciation and amortization $ 17 $ 17 $ 48 $ 62 Professional Staffing Services Permanent placement revenue $ 8,026 $ 5,529 $ 20,073 $ 12,579 Placement services gross margin 100 % 100 % 100 % 100 % Contract services revenue $ 28,967 $ 28,747 $ 91,572 $ 81,923 Contract services gross margin 26.9 % 26.8 % 26.9 % 26.2 % Income from operations $ 4,031 $ 3,589 $ 8,882 $ 7,613 Depreciation and amortization $ 799 $ 1,076 $ 2,977 $ 3,240 Unallocated Expenses Corporate administrative expenses $ 1,040 $ 1,213 $ 4,882 $ 3,660 Corporate facility expenses 99 101 283 274 Share-based compensation expense 169 231 468 835 Board related expenses 34 35 102 136 Total unallocated expenses $ 1,342 $ 1,580 $ 5,735 $ 4,905 Consolidated Total revenue $ 41,113 $ 38,068 $ 123,589 $ 107,429 Income from operations $ 2,825 $ 1,620 $ 3,975 $ 4,233 Depreciation and amortization $ 816 $ 1,093 $ 3,025 $ 3,302 (1) Credits related to estimated and/or actual annual premium refunds from the Ohio Bureau of Workers Compensations totaling $46 and $19 are included in the three-month periods ended June 30, 2022 and 2021, respectively; and $83 and $1,337 for the nine-month periods ended June 30, 2022 and 2021, respectively. The Industrial Services gross margin normalized for the effects of these items were approximately 15.5% and 14.9% for the three-month periods ended June 30, 2022 and 2021, respectively; and 14.8% and 14.9% for the nine-month periods ended June 30, 2022 and 2021, respectively. |
Defined Contribution Plan
Defined Contribution Plan | 9 Months Ended |
Jun. 30, 2022 | |
Defined Contribution Plan | |
Defined Contribution Plan | 15. Defined Contribution Plan The Company provides a defined contribution plan (the “401(k) Plan”) for the benefit of its eligible core and field personnel, including those assigned to provide staffing services for clients. The 401(k) Plan allows participants to make contributions subject to applicable statutory limitations. The Company matches participants’ contributions with 10% of the first 10% of a participant’s contribution. The Company match contributed $28 and $65, and $25 and $55, respectively, from continuing operations to the 401(k) Plan for the three and nine-month periods ended June 30, 2022 and 2021. |
Summary of Significant Accounti
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Jun. 30, 2022 | |
Significant Accounting Policies and Estimates | |
Basis Of Presentation | The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Article 8 of Regulation S-X. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete consolidated financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the three and nine-month periods ended June 30, 2022 are not necessarily indicative of the results that may be expected for the year ending September 30, 2022. The unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended September 30, 2021, as filed on December 23, 2021. |
Principles Of Consolidation | The unaudited condensed consolidated financial statements include the accounts and transactions of the Company and its wholly owned subsidiaries. All significant inter-company accounts and transactions are eliminated in consolidation. |
Use Of Estimates | The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Revenue Recognition | Revenues from contracts with customers are generated from direct hire placement services, professional contract services, and industrial contract services. Revenues are recognized when promised services are performed for customers, and in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services. Our revenues are recorded net of variable consideration such as sales adjustments or allowances. Direct hire placement service revenues from contracts with customers are recognized when employment candidates accept offers of employment, less a provision for estimated credits or refunds to customers as the result of applicants not remaining employed for the entirety of the Company’s guarantee period (referred to as “falloffs”). The Company’s guarantee periods for permanently placed employees generally range from 60 to 90 days from the date of hire. Fees associated with candidate placement are generally calculated as a percentage of the new employee’s annual compensation. No fees for permanent placement services are charged to employment candidates. Temporary staffing service revenues from contracts with customers are recognized in amounts the Company has a right to invoice as the services are rendered by the Company’s temporary employees. The Company records temporary staffing revenue on a gross basis rather than on a net basis as an agent in the presentation of revenues and expenses. The Company has concluded that gross reporting is appropriate because the Company maintains primary responsibility for and controls the staff members that it provides to perform services for its clients. The Company has the risk of identifying and hiring qualified employees (as opposed to client employees), has the discretion to select the employees and establish their price, is responsible for compensating them, and bears the risk for services that are not fully paid for by customers. Falloffs and refunds during the period are reflected in the unaudited condensed consolidated statements of operations as a reduction of direct hire placement service revenues and were approximately $521 and $2,018, and $271 and $1,044 for the three and nine-month periods ended June 30, 2022 and 2021, respectively. Expected future falloffs and refunds are reflected in the unaudited condensed consolidated balance sheet as a reduction of accounts receivable as described under Accounts Receivable, below. See Note 14 for disaggregated revenues by segment. Payment terms in our contracts vary by the type and location of our customer and the services offered. The terms between invoicing and when payments are due are not significant. |
Cost Of Contract Staffing Services | The cost of contract services includes the wages and the related payroll taxes, employee benefits and certain other employee-related costs of the Company’s contract service employees, while they work on contract assignments. |
Cash And Cash Equivalents | The Company maintains deposits in financial institutions and balances may exceed federally insured limits. We have never experienced any losses related to these balances. Highly liquid investments with a maturity of three months or less when purchased, if any, are considered to be cash equivalents. As of June 30, 2022 and September 30, 2021, there were no cash equivalents. |
Accounts Receivable | The Company extends credit to its various customers based on evaluation of the customer’s financial condition and ability to pay the Company in accordance with the payment terms. An allowance for placement falloffs is recorded as a reduction of revenues for estimated losses due to applicants not remaining employed during the Company’s guarantee period. An allowance for doubtful accounts is recorded as a charge to bad debt expense where collection is considered to be doubtful due to credit issues. These allowances taken together reflect management’s estimate of the potential losses inherent in the accounts receivable balances based on historical loss statistics and known factors impacting our clients. Management believes that the nature of the contract services business, wherein client companies are generally dependent on our contract employees in the same manner as permanent employees for their production cycles and the conduct of their respective businesses contributes to a relatively small accounts receivable allowance. As of June 30, 2022 and September 30, 2021, the allowance for doubtful accounts was $774 and $286, respectively. The Company charges off uncollectible accounts once the invoices are deemed unlikely to be collectible. The allowance also includes reserves for permanent placement falloffs of $243 and $115 as of June 30, 2022 and September 30, 2021, respectively. |
Property And Equipment | Property and equipment are recorded at cost. Depreciation expense is calculated on a straight-line basis over estimated useful lives of five years for computer equipment and two to ten years for office equipment, furniture and fixtures. The Company capitalizes computer software purchased or developed for internal use and amortizes it over an estimated useful life of five years. The carrying value of property and equipment is reviewed for impairment whenever events or changes in circumstances indicate that it may not be recoverable. If the carrying amount of an asset group is greater than its estimated future undiscounted cash flows, the carrying value is written down to the estimated fair value. There was no impairment of property and equipment for the three and nine-month periods ended June 30, 2022 and 2021. |
Leases | The Company determines if a contractual arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, current operating lease liabilities, and noncurrent operating lease liabilities on the Company’s unaudited condensed consolidated balance sheet. The Company evaluates and classifies leases as operating or finance leases for financial reporting purposes. The classification evaluation begins at the commencement date and the lease term used in the evaluation includes the non-cancellable period for which the Company has the right to use the underlying asset, together with renewal option periods when the exercise of the renewal option is reasonably certain or failure to exercise such option results in an economic penalty. All the Company’s real estate leases are classified as operating leases. Also, the Company elected the practical expedient which allows aggregation of non-lease components with the related lease components when evaluating accounting treatment. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date of the lease based on the present value of lease payments over the lease term. The lease payments included in the present value are fixed lease payments. As most of the Company’s leases do not provide an implicit rate, the Company estimates its collateralized incremental borrowing rate, based on information available at the commencement date, in determining the present value of lease payments. The Company applies the portfolio approach in applying discount rates to its classes of leases. The operating lease ROU assets include any payments made before the commencement date. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company does not currently have subleases. The Company also does not currently have residual value guarantees or material or unusual restrictive covenants in its leases. |
Goodwill | The Company evaluates its goodwill for possible impairment as prescribed by FASB Accounting Standards Update (“ASU”) 2017-04, Intangibles — Goodwill and Other (Topic 350), Simplifying the Test for Goodwill Impairment |
Intangible Assets | Separately identifiable intangible assets held in the form of non-compete agreements, customer relationships, and trade names were recorded at their estimated fair value at the date of acquisition and are amortized over their estimated useful lives ranging from two to ten years using both accelerated and straight-line methods. |
Impairment Of Long-lived Assets (other Than Goodwill) | The Company recognizes an impairment of long-lived intangible assets used in operations, other than goodwill, when events or circumstances indicate that the asset might be impaired and the estimated undiscounted cash flows to be generated by those assets over their remaining lives are less than the carrying amount of those items. The net carrying value of assets not recoverable is reduced to fair value, which is typically calculated using the discounted cash flow method. The Company did not recognize and record any impairments of long-lived intangible assets used in operations during the three and nine-month periods ended June 30, 2022 and 2021. |
Fair Value Measurement | The Company follows the provisions of FASB ASC 820, Fair Value Measurement The standard establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances when observable inputs are not available. The hierarchy is described below: Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. Level 2: Observable prices that are based on inputs not quoted on active markets but corroborated by market data. Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs. The fair value of the Company’s current assets and current liabilities approximate their carrying values due to their short-term nature. The fair value disclosures of the Company’s long-term liabilities approximate their respective fair values based on current yield for debt instruments with similar terms. The Company has no assets or liabilities which are measured at fair value on a recurring basis. Fair value measurements utilized in evaluating the Company’s goodwill and other intangible assets for impairments are measured at fair value on a non-recurring basis using a combination of Level 2 and Level 3 inputs. |
Earnings And Loss Per Share | Basic earnings and loss per share are computed by dividing net income or loss attributable to common stockholders by the weighted average common shares outstanding for the period. Diluted earnings and loss per share are computed giving effect to all potentially dilutive common shares. Potentially dilutive common shares may consist of incremental shares issuable upon the vesting of restricted shares granted but unissued, and exercise of stock options and warrants. The dilutive effect of outstanding warrants and options is reflected in earnings and loss per share by use of the treasury stock method. For the three and nine-month periods ended June 30, 2022, the weighted average dilutive incremental shares, or common stock equivalents, included in the calculations of dilutive shares were 1,542 and 1,508. Common stock equivalents, which are excluded because their effect is anti-dilutive, were approximately 2,483 and 1,983, and 3,110 and 2,882 for the three and nine-month periods ended June 30, 2022 and 2021, respectively. For the three and nine-month periods ended June 30, 2021, in which a net loss was incurred, all potentially dilutive common shares are considered antidilutive and thus are excluded from the calculation. |
Advertising Expenses | The Company expenses the costs of print and internet media advertising and promotions as incurred and reports these costs in selling, general and administrative expenses. For the three and nine-month periods ended June 30, 2022 and 2021, advertising expense totaled $484 and $1,485, and $442 and $1,324 respectively. |
Stock-based Compensation | The Company accounts for share-based awards to employees in accordance with FASB ASC 718, Compensation-Stock Compensation See Note 11 for the assumptions used to calculate the fair value of share-based employee and non-employee compensation. Upon the exercise of options, it is the Company's policy to issue new shares rather than utilizing treasury shares. |
Income Taxes | The Company accounts for income taxes under the asset and liability method, FASB ASC 740, Income Taxes The Company recognizes deferred tax assets to the extent that it is believed these assets are more likely than not to be realized. In making such a determination, all available positive and negative evidence is considered, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If it's determined that the Company would be able to realize deferred tax assets in the future in excess of the net recorded amount, an adjustment would be made to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. The Company records uncertain tax positions on the basis of a two-step process in which (1) determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, the Company recognizes the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. Interest and penalties related to unrecognized tax benefits are recognized on the income tax expense line in the accompanying unaudited condensed consolidated statement of operations. As of June 30, 2022 and September 30, 2021, no accrued interest or penalties are included on the related tax liability line in the accompanying unaudited condensed consolidated balance sheet. |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Jun. 30, 2022 | |
Property and Equipment | |
Schedule Of Property And Equipment | June 30, 2022 September 30, 2021 Computer software $ 481 $ 462 Office equipment, furniture, fixtures and leasehold improvements 3,568 3,042 Total property and equipment, at cost 4,049 3,504 Accumulated depreciation and amortization (3,015 ) (2,739 ) Property and equipment, net $ 1,034 $ 765 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Jun. 30, 2022 | |
Leases | |
Schedule Of Supplemental Cash Flow Information | Nine Months Ended June 30, 2022 2021 Cash paid for operating lease liabilities $ 1,490 1,425 |
Schedule Of Supplemental Balance Sheet Information | June 30, 2022 September 30, 2021 Weighted average remaining lease term for operating leases (in years) 2.0 2.7 Weighted average discount rate for operating leases 5.0 % 5.9 % |
Schedule Of Undiscounted Future Minimum Lease Payments | Remainder of Fiscal 2022 $ 482 Fiscal 2023 1,472 Fiscal 2024 1,172 Fiscal 2025 602 Fiscal 2026 194 Thereafter 29 Less: Imputed interest (293 ) Present value of operating lease liabilities (a) $ 3,658 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Jun. 30, 2022 | |
Goodwill and Intangible Assets (Tables) | |
Schedule Of Goodwill Consisted Of The Following | June 30, 2022 September 30, 2021 Acquisition Value Accumulated Impairment Net Book Value Acquisition Value Accumulated Impairment Net Book Value Goodwill $ 76,593 $ (15,300 ) $ 61,293 $ 76,593 $ (13,150 ) $ 63,443 |
Schedule Of Identifiable Intangible Assets | June 30, 2022 September 30, 2021 Cost Accumulated Amortization Net Book Value Cost Accumulated Amortization Net Book Value Customer relationships $ 29,070 $ (17,822 ) $ 11,248 $ 29,070 $ (15,844 ) $ 13,226 Trade names 8,329 (7,572 ) 757 8,329 (6,801 ) 1,528 Non-Compete 4,331 (4,331 ) - 4,331 (4,331 ) - Total $ 41,730 $ (29,725 ) $ 12,005 $ 41,730 $ (26,976 ) $ 14,754 Estimated Amortization Expense Remaining Fiscal 2022 $ 720 Fiscal 2023 2,879 Fiscal 2024 2,879 Fiscal 2025 2,741 Fiscal 2026 1,870 Thereafter 916 $ 12,005 |
Equity (Tables)
Equity (Tables) | 9 Months Ended |
Jun. 30, 2022 | |
Equity | |
Summary Of Restricted Stock | Number of Shares Weighted Average Fair Value ($) Non-vested restricted stock outstanding as of September 30, 2021 1,442 0.60 Granted - - Vested - - Non-vested restricted stock outstanding as of December 31, 2021 1,442 0.60 Granted 100 0.53 Vested - - Non-vested restricted stock outstanding as of March 31, 2022 1,542 0.59 Granted - - Vested - - Non-vested restricted stock outstanding as of June 30, 2022 1,542 0.59 |
Summary Of Stock Option Activity | Number of Shares Weighted Average Exercise Price Per Share ($) Weighted Average Remaining Contractual Life (Years) Total Intrinsic Value of Options ($) Options outstanding as of September 30, 2021 1,672 2.14 7.35 - Granted - - - - Forfeited (1 ) 2.99 - - Options outstanding as of December 31, 2021 1,671 2.14 7.10 - Granted 50 0.53 - - Forfeited (80 ) 1.12 - - Options outstanding as of March 31, 2022 1,641 2.14 6.89 - Granted 865 0.59 - - Forfeited (101 ) 0.88 - - Options outstanding as of June 30, 2022 2,405 1.55 7.87 - Exercisable as of September 30, 2021 890 3.14 6.08 - Exercisable as of June 30, 2022 1,114 2.58 6.07 - |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Jun. 30, 2022 | |
Income Tax | |
Schedule Of Provision For Income Taxes | Three Months Ended, June 30, Nine Months Ended, June 30, 2022 2021 2022 2021 Provision for income tax expense (benefit) $ 96 $ (29 ) $ 59 $ (307 ) Effective tax rate 3 % 3 % 0 % 9 % |
Segment Data (Tables)
Segment Data (Tables) | 9 Months Ended |
Jun. 30, 2022 | |
Schedule Of Segment Reporting Information | Three Months Ended Nine Months Ended June 30, June 30, 2022 2021 2022 2021 Industrial Staffing Services Contract services revenue $ 4,120 $ 3,792 $ 11,944 $ 12,927 Contract services gross margin (1) 16.6 % 15.4 % 15.5 % 25.2 % Income (loss) from operations $ 136 $ (389 ) $ 828 $ 1,525 Depreciation and amortization $ 17 $ 17 $ 48 $ 62 Professional Staffing Services Permanent placement revenue $ 8,026 $ 5,529 $ 20,073 $ 12,579 Placement services gross margin 100 % 100 % 100 % 100 % Contract services revenue $ 28,967 $ 28,747 $ 91,572 $ 81,923 Contract services gross margin 26.9 % 26.8 % 26.9 % 26.2 % Income from operations $ 4,031 $ 3,589 $ 8,882 $ 7,613 Depreciation and amortization $ 799 $ 1,076 $ 2,977 $ 3,240 Unallocated Expenses Corporate administrative expenses $ 1,040 $ 1,213 $ 4,882 $ 3,660 Corporate facility expenses 99 101 283 274 Share-based compensation expense 169 231 468 835 Board related expenses 34 35 102 136 Total unallocated expenses $ 1,342 $ 1,580 $ 5,735 $ 4,905 Consolidated Total revenue $ 41,113 $ 38,068 $ 123,589 $ 107,429 Income from operations $ 2,825 $ 1,620 $ 3,975 $ 4,233 Depreciation and amortization $ 816 $ 1,093 $ 3,025 $ 3,302 |
Description of Business (Detail
Description of Business (Details Narrative) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 9 Months Ended | 12 Months Ended | ||||||
May 14, 2021 | Apr. 27, 2021 | Apr. 20, 2021 | Apr. 19, 2021 | May 07, 2020 | Jun. 30, 2022 | Jun. 30, 2021 | Sep. 30, 2020 | |
Exit And Restructuring Fees | $ 4,978 | |||||||
Deferred Payment | $ 1,827 | $ 3,654 | ||||||
Gain (loss) On Extinguishment Of Debt | (16,773) | $ 1,768 | ||||||
Repayment Of Loan | 0 | 44,194 | ||||||
Accrued Interest | 32 | $ 487 | ||||||
Fordham Financial Management [Member] | ||||||||
Common Stock Shares Issued | 83,333 | |||||||
Public Offering Price Per Share | $ 0.60 | $ 0.60 | ||||||
Gross Proceeds | $ 50,000 | |||||||
Net Proceeds | $ 45,478 | |||||||
Percentage Of Offering Over-Allotment Option | 15% | |||||||
Additional Shares Of Common Stock | 12,500 | |||||||
Proceeds From Sale Of Option Shares | $ 6,937 | |||||||
Repayment Of Loan | $ 56,022 | |||||||
Repaid Debt | 11,828 | |||||||
Principal Balance | $ 43,735 | |||||||
Description Of Interbank Offering Rate | which was subject to an annual interest rate comprised of the greater of the London Interbank Offering Rate (“LIBOR”) or 1%, plus a 10% margin (approximately 11% per annum) | |||||||
Description Of Annual Interest Rate | which was subject to an annual interest rate of the greater of LIBOR or 1% plus a 10% margin | |||||||
Pik Interest Rate | 5% | |||||||
Cash And Pik, Interest Rate | 16% | |||||||
Accrued Interest | $ 459 | |||||||
PPP loans One [Member] | ||||||||
Ppp Loans And Accrued Interest | 2,024 | |||||||
PPP loans Two [Member] | ||||||||
Ppp Loans And Accrued Interest | 2,630 | |||||||
PPP loans Three [Member] | ||||||||
Ppp Loans And Accrued Interest | 1,956 | |||||||
PPP loans Four [Member] | ||||||||
Ppp Loans And Accrued Interest | 10,163 | |||||||
Security And Guaranty Agreement [Member] | ||||||||
Revolving Credit Facility Availability | 20,000 | |||||||
Paycheck Protection Plan [Member] | ||||||||
Funds Received | $ 19,927 | |||||||
Gain (loss) On Extinguishment Of Debt | 16,773 | |||||||
Audit Threshold Limit, Amount | $ 2,000 | |||||||
CIT Facility [Member] | ||||||||
Loan Amount | $ 5,326 |
Significant Accounting Polici_2
Significant Accounting Policies and Estimates (Details Narrative) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Sep. 30, 2021 | |
Significant Accounting Policies and Estimates | |||||
Falloffs And Refunds | $ 521 | $ 271 | $ 2,018 | $ 1,044 | |
Allowance For Doubtful Accounts | 774 | 774 | $ 286 | ||
Reserve For Permanent Placement Falloffs | $ 243 | $ 243 | $ 115 | ||
Anti-dilutive Securities Excluded From Computation Of Earning Per Share | 1,542 | 1,508 | |||
Dilutive Securities Included In The Computation Of Earning Per Share | 2,483 | 3,110 | 1,983 | 2,882 | |
Advertising Expense | $ 484 | $ 442 | $ 1,485 | $ 1,324 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Sep. 30, 2021 |
Total Property And Equipment, At Cost | $ 4,049 | $ 3,504 |
Accumulated Depreciation And Amortization | (3,015) | (2,739) |
Property And Equipment, Net | 1,034 | 765 |
Computer software [Member] | ||
Total Property And Equipment, At Cost | 481 | 462 |
Office equipment, furniture, fixtures and Leasehold Improvements [Member] | ||
Total Property And Equipment, At Cost | $ 3,568 | $ 3,042 |
Property and Equipment (Detai_2
Property and Equipment (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Property and Equipment | ||||
Depreciation Expense | $ 96 | $ 78 | $ 276 | $ 228 |
Leases (Details)
Leases (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Leases | ||
Cash Paid For Operating Lease Liabilities | $ 1,490 | $ 1,425 |
Leases (Details 1)
Leases (Details 1) | 9 Months Ended | 12 Months Ended |
Jun. 30, 2022 | Sep. 30, 2021 | |
Leases | ||
Weighted Average Remaining Lease Term For Operating Leases | 2 years | 2 years 8 months 12 days |
Weighted Average Discount Rate For Operating Leases | 5% | 5.90% |
Leases (Details 2)
Leases (Details 2) $ in Thousands | Jun. 30, 2022 USD ($) |
Leases | |
Remainder Of Fiscal 2022 | $ 482 |
Fiscal 2023 | 1,472 |
Fiscal 2024 | 1,172 |
Fiscal 2025 | 602 |
Fiscal 2026 | 194 |
Thereafter | 29 |
Less: Imputed Interest | (293) |
Present Value Of Operating Lease Liabilities (a) | $ 3,658 |
Leases (Details Narrative)
Leases (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Sep. 30, 2021 | |
Leases | |||||
Operating Lease Expires | office lease expires in 2026 | ||||
Operating Lease Expenses | $ 548 | $ 551 | $ 1,625 | $ 1,674 | |
Current Operating Lease Liabilities | $ 1,462 | $ 1,462 | $ 1,681 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Jun. 30, 2022 | Sep. 30, 2021 | |
Goodwill and Intangible Assets (Details) | ||
Goodwill acquisition value | $ 76,593 | $ 76,593 |
Impairment Of Goodwill | (15,300) | (13,150) |
Goodwill | $ 61,293 | $ 63,443 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets (Details 1) - USD ($) $ in Thousands | Jun. 30, 2022 | Sep. 30, 2021 |
Cost | $ 41,730 | $ 41,730 |
Accumulated Amortization | (29,725) | (26,976) |
Net Book Value | 12,005 | 14,754 |
Non-Compete [Member] | ||
Cost | 4,331 | 4,331 |
Accumulated Amortization | (4,331) | (4,331) |
Net Book Value | 0 | 0 |
Trade Names [Member] | ||
Cost | 8,329 | 8,329 |
Accumulated Amortization | (7,572) | (6,801) |
Net Book Value | 757 | 1,528 |
Common Stock | ||
Cost | 29,070 | 29,070 |
Accumulated Amortization | (17,822) | (15,844) |
Net Book Value | $ 11,248 | $ 13,226 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets (Details 2) - USD ($) $ in Thousands | Jun. 30, 2022 | Sep. 30, 2021 |
Estimated Amortization Expense | ||
Remaining Fiscal 2022 | $ 720 | |
Fiscal 2023 | 2,879 | |
Fiscal 2024 | 2,879 | |
Fiscal 2025 | 2,741 | |
Fiscal 2026 | 1,870 | |
Thereafter | 916 | |
Total | $ 12,005 | $ 14,754 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Goodwill and Intangible Assets (Details) | ||||
Amortization Expense | $ 720 | $ 1,015 | $ 2,749 | $ 3,074 |
Senior Bank Loan Security and_2
Senior Bank Loan Security and Guarantee Agreement (Details Narrative) - Security And Guaranty Agreement [Member] - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
May 14, 2021 | Jun. 30, 2022 | Jun. 30, 2022 | |
Credit Facility, Maturity Date | May 14, 2026 | ||
Line of Credit under the terms of the CIT Facility | $ 20,000 | ||
Revolving Credit Facility Availability | $ 14,317 | $ 14,317 | |
Unamortized Debt Costs | 599 | 599 | |
Amortization Expense For Debt Costs | $ 38 | $ 115 |
CARES Act Payroll Protection Pr
CARES Act Payroll Protection Program Loans (Details Narrative) $ in Thousands | 9 Months Ended |
Jun. 30, 2022 USD ($) | |
Gain (loss) On Extinguishment Of Debt | $ 16,773 |
Audit Threshold Limit, Amount | 2,000 |
Triad Logistics, Inc. [Member] | |
Promissory Notes | 78 |
GEE Group, Inc [Member] | |
Promissory Notes | 1,992 |
Forgiven Loan Balances | 2,024 |
Scribe Solutions, Inc [Member] | |
Promissory Notes | 277 |
Agile Resources, Inc [Member] | |
Promissory Notes | 1,206 |
Access Data Consulting Corporation [Member] | |
Promissory Notes | 1,456 |
Paladin Consulting, Inc [Member] | |
Promissory Notes | 1,925 |
Forgiven Loan Balances | 1,956 |
SNI Companies, Inc [Member] | |
Promissory Notes | 10,000 |
Forgiven Loan Balances | 10,163 |
Triad Personnel Services, Inc [Member] | |
Promissory Notes | 404 |
BMCH, Inc [Member] | |
Promissory Notes | 2,589 |
Forgiven Loan Balances | $ 2,630 |
Equity (Details)
Equity (Details) - Restricted Stock [Member] - $ / shares | 3 Months Ended | ||
Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | |
Non-vested Restricted Stock Outstanding, Beginning Balance | 1,542,000 | 1,442,000 | 1,442,000 |
Granted | 0 | 100,000 | |
Non-vested Restricted Stock Outstanding, Ending Balance | 1,542,000 | 1,542,000 | 1,442,000 |
Weighted Average Fair Value, Beginning Balance | $ 0.59 | $ 0.60 | $ 0.60 |
Weighted Average Fair Value, Granted | 0 | 0.53 | 0 |
Weighted Average Fair Value, Vested | 0 | 0 | 0 |
Weighted Average Fair Value, Ending Balance | $ 0.59 | $ 0.59 | $ 0.60 |
Equity (Details 1)
Equity (Details 1) - Options [Member] - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Jun. 30, 2022 | Sep. 30, 2021 | |
Options Outstanding, Beginning Balance | 1,641,000 | 1,671,000 | 1,672,000 | 1,672,000 | |
Granted | 865,000 | 50,000 | 0 | ||
Forfeited | (101,000) | (80,000) | (1,000) | ||
Options Outstanding, Ending Balance | 2,405,000 | 1,641,000 | 1,671,000 | 2,405,000 | 1,672,000 |
Exercisable | 1,114,000 | 1,114,000 | 890,000 | ||
Weighted Average Exercise Price Per Share, Outstanding, Beginning Balance | $ 2.14 | $ 2.14 | $ 2.14 | $ 2.14 | |
Weighted Average Exercise Price Per Share, Granted | 0.59 | 0.53 | 0 | ||
Weighted Average Exercise Price Per Share, Forfeited | 0.88 | 1.12 | 2.99 | ||
Weighted Average Exercise Price Per Share, Outstanding, Ending Balance | 1.55 | $ 2.14 | $ 2.14 | 1.55 | $ 2.14 |
Weighted Average Exercise Price Per Share, Exercisable | $ 2.58 | $ 2.58 | $ 3.14 | ||
Weighted Average Remaining Contractual Life (years), Outstanding | 7 years 10 months 13 days | 6 years 10 months 20 days | 7 years 1 month 6 days | 7 years 4 months 6 days | |
Weighted Average Remaining Contractual Life (years), Exercisable | 6 years 25 days | 6 years 29 days | |||
Total Intrinsic Value Of Options, Forfeited | $ 0 | $ 0 | $ 0 | ||
Total Intrinsic Value Of Options, Granted | 0 | 0 | 0 | ||
Total Intrinsic Value Of Warrants Warrants Exercisable, Beginning Balance | 0 | 0 | 0 | $ 0 | $ 0 |
Total Intrinsic Value Of Options, Outstanding | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 |
Equity (Details Narrative)
Equity (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Sep. 30, 2021 | |
Warrants [Member] | |||||
Warrants Outstanding | 77,000 | 77,000 | 77,000 | ||
Weighted Average Exercise Price Per Share Warrants Outstanding | $ 2 | $ 2 | $ 2 | ||
Weighted Average Remaining Contractual Life | 2 years 9 months 3 days | 3 years 6 months | |||
Warrants [Member] | Stock Option [Member] | |||||
Stock Granted Value Share-based Compensation | $ 93 | $ 93 | $ 244 | $ 360 | |
Unrecognized Compensation Expense | $ 678 | ||||
Weighted Average Vesting Period | 3 years 9 months 10 days | ||||
Series A Preferred Stock [Member] | |||||
Preferred Stock, Shares Authorized | 20,000,000 | 20,000,000 | 20,000,000 | ||
Preferred Stock, Shares designated | 1,000,000 | 1,000,000 | 1,000,000 | ||
Series B Preferred Stock [Member] | |||||
Preferred Stock, Shares designated | 5,950,000 | 5,950,000 | 5,950,000 | ||
Preferred Stock, Shares Issued | 5,926,000 | 5,926,000 | 5,926,000 | ||
Series C Preferred Stock [Member] | |||||
Preferred Stock, Shares designated | 3,000,000 | 3,000,000 | 3,000,000 | ||
Preferred Stock, Shares Issued | 2,093,000 | 2,093,000 | 2,093,000 | ||
Preferred Stock, Liquidation Preference Per Share | $ 1 | $ 1 | $ 1 | ||
2013 Incentive Stock Plan [Member] | |||||
Increased Restricted Stock And Stock Options Grants Under Amended Plan | 10,000,000 | ||||
Restricted Stock And Stock Options Available To Be Granted Under Amended Plan | 9,771,000 | 15,000,000 | |||
Restricted Stock Available To Be Granted Under Amended Plan | 4,858,000 | 7,500,000 | |||
Stock Options Available To Be Granted Under Amended Plan | 4,913,000 | 7,500,000 | |||
Restricted Stock [Member] | |||||
Stock Granted Value Share-based Compensation | $ 76 | $ 138 | $ 224 | $ 475 | |
Unrecognized Compensation Expense | $ 391 | ||||
Weighted Average Vesting Period | 3 years 29 days | ||||
Restricted Common Stock Shares Granted | 100,000 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Income Tax | ||||
Provision For Income Taxes | $ 96 | $ (29) | $ 59 | $ (307) |
Effective Tax Rate | 3% | 3% | 0% | 9% |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) $ in Thousands | 9 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Income Tax | ||
Non taxable gains | $ 16,773 | $ 2,236 |
Goodwill impairment charge | $ 2,150 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) $ in Thousands | 9 Months Ended |
Jun. 30, 2022 USD ($) | |
Commitments and contingencies (Note 13) | |
Legal Settlement | $ 1,175 |
Litigation Settlement Amount Of Company Portion | $ 975 |
Segment Data (Details)
Segment Data (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Income (loss) From Operations | $ 2,825 | $ 1,620 | $ 3,975 | $ 4,233 |
Total Revenue | 41,113 | 38,068 | 123,589 | 107,429 |
Consolidated [Member] | ||||
Income (loss) From Operations | 2,825 | 1,620 | 3,975 | 4,233 |
Depreciation And Amortization | 816 | 1,093 | 3,025 | 3,302 |
Total Revenue | 41,113 | 38,068 | 123,589 | 107,429 |
Industrial Staffing Services [Member] | ||||
Contract services revenue | $ 4,120 | $ 3,792 | $ 11,944 | $ 12,927 |
Contract services gross margin | 16.60% | 15.40% | 15.50% | 25.20% |
Income (loss) From Operations | $ 136 | $ (389) | $ 828 | $ 1,525 |
Depreciation And Amortization | 17 | 17 | 48 | 62 |
Professional Staffing Services [Member] | ||||
Contract services revenue | $ 28,967 | $ 28,747 | $ 91,572 | $ 81,923 |
Contract services gross margin | 26.90% | 26.80% | 26.90% | 26.20% |
Depreciation And Amortization | $ 799 | $ 1,076 | $ 2,977 | $ 3,240 |
Permanent Placement Revenue | $ 8,026 | $ 5,529 | $ 20,073 | $ 12,579 |
Placement Services Gross Margin | 100% | 100% | 100% | 100% |
Income from operations | $ 4,031 | $ 3,589 | $ 8,882 | $ 7,613 |
Unallocated Expenses [Member] | ||||
Corporate Administrative Expenses | 1,040 | 1,213 | 4,882 | 3,660 |
Corporate Facility Expenses | 99 | 101 | 283 | 274 |
Stock based Compensation Expense | 169 | 231 | 468 | 835 |
Board Related Expenses | 34 | 35 | 102 | 136 |
Total Unallocated Expenses | $ 1,342 | $ 1,580 | $ 5,735 | $ 4,905 |
Segment Data (Details Narrative
Segment Data (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Segment Data (Details Narrative) | ||||
Annual Premium Refunds | $ 46 | $ 19 | $ 83 | $ 1,337 |
Adjusted Industrial Services Gross Margin | 15.50% | 14.90% | 14.80% | 14.90% |
Defined Contribution Plan (Deta
Defined Contribution Plan (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Defined Contribution Plan | ||||
Defined contribution match, amount | $ 28 | $ 25 | $ 65 | $ 55 |
Defined contribution match, percentage | 10% | |||
Defined contribution match, description | The Company matches participants’ contributions with 10% of the first 10% of a participant’s contribution. |