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The Company has several subsidiary corporations all of which are wholly owned and consolidated under GEE Group, Inc.
−Removed: The Company’s material operating subsidiaries include Access Data Consulting Corporation, Agile Resources, Inc., BMCH, Inc., Paladin Consulting, Inc., Scribe Solutions, Inc., SNI Companies, Triad Logistics, Inc., and Triad Personnel Services, Inc.
+Added: The Company’s material operating subsidiaries include 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.
In addition, the Company and its operating subsidiaries own and operate under other trade names, including Ashley Ellis, Certes Financial Professionals, General Employment Enterprises and Omni One.
−Removed: On October 4, 2015, the Company entered a Stock Purchase Agreement with William Daniel Dampier and Carol Lee Dampier (the “Access Sellers”) pursuant to which the Company acquired on October 4, 2015, 100% of the outstanding stock of Access Data Consulting Corporation., a Colorado corporation, for a purchase price equal to approximately $16.0 million in consideration.
−Removed: The purchase price consisted of $8.0 million in cash (subject to minimum working capital), the issuance to the Access Sellers 327,869 shares of Company common stock, a Promissory note in the aggregate of $3.0 million and up to $2.0 million of an “earnout”.
−Removed: On April 4, 2016, the Company issued approximately 123,000 of additional shares of common stock to the Sellers of Access Data Consulting Corporation.
−Removed: This was based on the market value of the stock on April 4, 2016 being approximately $0.5 million less than $2.0 million six month guaranteed and based on the closing stock price of $4.44 per common share.
−Removed: The Company recognized a loss on change of contingent consideration of approximately $44,000 for the year ended September 30, 2016.
−Removed: The earnout was not achieved.
−Removed: In addition, the Company increased the original purchase price by approximately $0.6 million related to a mutual tax election as described in the purchase agreement.
−Removed: On January 1, 2016, the Company entered a Stock Purchase Agreement (the “Paladin Agreement”) with Enoch S.
−Removed: Timothy and Dorothy Timothy.
−Removed: Pursuant to the terms of the Paladin Agreement the Company acquired on January 1, 2016, 100% of the outstanding stock of Paladin Consulting Inc., a Texas corporation (“Paladin”), for a purchase price (the “Purchase Price”) equal to $1.8 million, minus the Circle Lending Loan Amount ( as defined in the Paladin Agreement) plus up to $1.0 million in contingent promissory notes, minus the NWC Reduction Amount (as defined in the Paladin Agreement ) (if any) plus up to $1.3 million of “earnouts”, for a total of approximately $2.6 million.
−Removed: The Company entered into an Agreement and Plan of Merger dated as of March 31, 2017 (the “Merger Agreement”) by and among the Company, GEE Group Portfolio, Inc., a Delaware corporation and a wholly owned subsidiary of the Company, (the “GEE Portfolio”), SNI Holdco Inc., a Delaware corporation (“SNI Holdco”), Smith Holdings, LLC a Delaware limited liability company, Thrivent Financial for Lutherans, a Wisconsin corporation, organized as a fraternal benefits society (“Thrivent”), Madison Capital Funding, LLC, a Delaware limited liability company (“Madison”) and Ronald R.
−Removed: Smith, in his capacity as a stockholder (“Mr.
−Removed: Smith” and collectively with Smith Holdings, LLC, Thrivent and Madison, the “Principal Stockholders”) and Ronald R.
−Removed: Smith in his capacity as the representative of the SNIH Stockholders (“Stockholders’ Representative”).
−Removed: The Merger Agreement provided for the merger subject to the terms and conditions set forth in the Merger Agreement of SNI Holdco with and into GEE Portfolio pursuant to which GEE Portfolio would be the surviving corporation (the “Merger”).
−Removed: The Merger was consummated on April 3, 2017.
−Removed: As a result of the Merger, GEE Portfolio became the owner 100% of the outstanding capital stock of SNI Companies, a Delaware corporation and a wholly-owned subsidiary of SNI Holdco (“SNI Companies” and collectively with SNI Holdco, the “Acquired Companies”).
−Removed: The aggregate consideration paid for the shares of SNI Holdco (the “Merger Consideration”) was $86.0 million minus the $20.2 million of Long Term Debt (as defined in the Merger Agreement) of the Acquired Companies immediately before closing plus or minus the “NWC Adjustment Amount” or the difference in the book value of the Closing Net Working Capital (as defined in the Merger Agreement) of the Acquired Companies as compared to the Benchmark Net Working Capital (as defined in the Merger Agreement) of the Acquired Companies of $9.2 million.
−Removed: On April 3, 2017, the Company paid to certain SNIH Stockholders as part of the Merger Consideration (i) an aggregate of approximately $18.6 million in cash, (ii) an aggregate of $12.5 million in aggregate principal amount of its 9.5% Convertible Subordinated Notes and (iii) an aggregate of 5,926,000 shares of its Series B convertible preferred stock.
−Removed: The 9.5% Notes mature on October 3, 2021 .
−Removed: The 9.5% Notes are convertible into shares of the Company’s Common Stock at a conversion price equal to $5.83 per share.
−Removed: The Series B Convertible Preferred Stock has a liquidation preference of $4.86 per share.
−Removed: Each share of Series B Convertible Preferred Stock is convertible at the option of the holder thereof into one share of Common Stock at an initial conversion price equal to $4.86 per share.
−Removed: At Closing, $1.5 million of the cash of the Merger Consideration was retained by the Company (the “Working Capital Reserve Fund”) and is subject to payment and adjustment as follows.
−Removed: The Merger Consideration will be adjusted (positively or negatively) based upon the difference in the book value of the Closing Net Working Capital (as defined in the Merger Agreement) as compared to the Benchmark Net Working Capital (as defined in the Merger Agreement) of $9.2 million (such difference to be called the “NWC Adjustment Amount”).
−Removed: If the NWC Adjustment Amount is positive, the Merger Consideration will be increased by the NWC Adjustment Amount.
−Removed: If the NWC Adjustment Amount is negative, the Merger Consideration will be decreased by the NWC Adjustment Amount.
−Removed: If the Merger Consideration increases, then the Company will pay the Stockholders’ Representative account for payment to SNIH Stockholders the amount of the increase plus the Working Capital Reserve Fund in immediately available funds within three (3) business days of a final determination thereof.
−Removed: If the Merger Consideration decreases, then SNIH Stockholders will pay the amount of the decrease to the Company within three (3) business days of a final determination thereof, which first shall be funded from the Working Capital Reserve Fund (which shall be credited to the SNIH Stockholders).
−Removed: If the amount of the Merger Consideration decrease exceeds the Working Capital Reserve Fund, then the SNIH Stockholders, will pay the difference to the Company, severally, not jointly, in accordance with their SNIH Ownership Proportion (as defined in the Merger Agreement), in immediately available funds within twenty (20) days of a final determination.
−Removed: If the Working Capital Reserve Fund exceeds the payment due from SNIH Stockholders then the remaining balance of those funds after the payment to the Company shall be paid to the Stockholders’ Representative’s account for payment to the SNIH Stockholders in immediately available funds.
−Removed: As of September 30, 2018, the SNI Merger Consideration held in the Working Capital Reserve Fund of $1.5 million was reduced by $0.6 million (“NWC Adjustment Amount”), following completion of the process provided for in the Merger Agreement, in which an independent accounting firm (the “firm”) was engaged to review related working capital-related claims made by the Company against such funds.
−Removed: As a result of the firm’s findings, the Company has recognized and reported a corresponding gain in its consolidated statement of operations for the fiscal year ended September 30, 2018.
−Removed: As of September 30, 2019, the SNI Merger Consideration held in the Working Capital Reserve Fund is $0.8 million.
Services Provided
The Company and its subsidiaries provide the following services:
−Removed: (a) professional placement services specializing in the placement of information technology, engineering, medical data entry assistants (medical scribes) who specialize in electronic medical records (EMR) services for emergency departments, specialty physician practices and clinics and accounting professionals for direct hire and contract staffing, and (b) temporary staffing services in light industrial staffing.
−Removed: Together with its subsidiaries, the Company provides staffing services through a network of branch offices located in major metropolitan areas throughout the United States.
−Removed: The Company’s professional staffing services provide information technology, engineering, medical and accounting professionals to clients on either a regular placement basis or a temporary contract basis.
−Removed: The Company’s industrial staffing business provides weekly temporary staffing for light industrial clients, primarily in Ohio.
+Added: (a) professional placement services specializing in the placement of information technology, finance, accounting and office, engineering, and medical data entry assistants (medical scribes) who specialize in electronic medical records (EMR) services for emergency departments, specialty physician practices and clinics and accounting professionals for direct hire and contract staffing, and (b) temporary staffing services in light industrial staffing.
+Added: Together with its subsidiaries, the Company provides staffing services through a network of branch offices located in several major metropolitan areas throughout the United States.
+Added: The Company’s professional staffing services involve providing information technology, finance, accounting and office, engineering, and medical scribe professionals to clients on either a regular placement basis or a temporary contract basis.
+Added: The Company’s industrial staffing business provides temporary staffing for light industrial clients, primarily in Ohio.
The Company’s contract and placement services are principally provided under two operating divisions or segments:
Professional Staffing Services and Industrial Staffing Services.
−Removed: The Company’s operating subsidiaries and service verticals served under each of its operating divisions are as follows:
+Added: The Company’s operating subsidiaries and vertical or end markets served under each of its operating divisions are as follows:
Access Data Consulting provides higher-end IT consulting and IT contract staffing services including project management support to businesses regionally and throughout the U.S.
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Scribe Solutions provides Emergency Room and Physician Practices with highly trained medical scribes for personal assistant work in connection with electronic medical records (EMR)
−Removed: SNI Companies provides recruitment and both direct hire and contract staffing services, specializing in Admin, Accounting, Finance, Banking, and IT, to fourteen major U.S.
+Added: SNI Companies provides recruitment and both direct hire and contract staffing services, specializing in Finance, Accounting and Office, Finance, Banking, and IT, to eighteen major U.S.
metropolitan markets
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GEE Group Inc.’s business strategy is multi-dimensional and encompasses both organic growth and growth through strategic acquisitions.
−Removed: Since 2015, the Company has completed three acquisitions, the most recent of which was SNI which to date has been its largest.
+Added: Since 2015, the Company has completed four acquisitions, the most recent of which was SNI which to date has been its largest.
The main tenants of the Company’s strategy are to:
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The percentage of revenues derived from each of the Company’s direct hire and contract services lines are as follows:
−Removed: Direct hire placement services
+Added: Professional direct hire placement services
Professional contract services
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The Company markets its staffing services using its corporate and trade names in their respective vertical markets.
−Removed: As of September 30, 2019, we operated thirty-three branch offices in downtown or suburban areas of major U.S.
−Removed: cities in fourteen states.
−Removed: We have one office located in each of Arizona, Washington D.C., Iowa, Connecticut, Georgia, Minnesota, New Jersey, and Virginia, three offices in Colorado and Massachusetts, two offices in Illinois, four offices in Texas, seven offices in Ohio and six offices in Florida.
+Added: As of September 30, 2020, we operated thirty branch offices in downtown or suburban areas of major U.S.
+Added: cities in eleven states.
+Added: We have one office located in each of Connecticut, Georgia, Minnesota, New Jersey, and Virginia, three offices in Colorado, two offices in Illinois and Massachusetts, four offices in Texas, seven offices each in Ohio and Florida.
The Company markets its staffing services to prospective clients primarily through telephone marketing by its recruiting and sales consultants, and through mailing of employment bulletins which list candidates available for placement and contract employees available for assignment.
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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.