What changed in this filing

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

2025-12-17 compared with 2024-12-19 · 292 added, 222 removed, 549 unchanged (48% of the section changed)

2 unchanged sentences

Consolidated Financial Statements and Supplementary Data.

Report of Independent Registered Public Accounting Firm for the year ended September 30, 2024

Report of Independent Registered Public Accounting Firm for the year ended September 30, 2023

Report of Independent Registered Public Accounting Firm

Consolidated Balance Sheets as of September 30, 2025 and 2024

9 unchanged sentences

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheet of GEE Group Inc.

and Subsidiaries (collectively, the “Company”) as of September 30, 2024, and the related consolidated statements of operations, shareholders’ equity, and cash flows for the year then ended, and the related notes (collectively, the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of September 30, 2024, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

We have audited the accompanying consolidated balance sheets of GEE Group Inc.

and Subsidiaries (collectively, the “Company”) as of September 30, 2025 and 2024, and the related consolidated statements of operations, shareholders’ equity, and cash flows for the years then ended, and the related notes (collectively, the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of September 30, 2025 and 2024, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audit.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

We conducted our audits in accordance with the standards of the PCAOB.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Our audits included performing procedures to assess the risks of material misstatements of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audit provides a reasonable basis for our opinion.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe our audits provide a reasonable basis for our opinion.

Critical Audit Matter

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(1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit mattes below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Goodwill Impairment Assessment

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The Company’s consolidated goodwill balance was $24.8 million as of September 30, 2025.

The Company’s evaluation of goodwill for impairment involves the comparison of the fair value of each reporting unit to its carrying value.

The fair value of each reporting unit is estimated using the discounted cash flow and guideline public company methods, which requires the use of estimates and assumptions related to cash flow forecasts, discount rates, terminal values, and market multiples of comparable companies.

Management’s cash flow forecasts included significant judgments and assumptions relating to revenue growth rates and operating margins.

The fair values of the reporting units did not exceed their carrying values as of June 30, 2024;

therefore, an impairment charge of $15.3 million was recognized during the year ended September 30, 2024 related to the Company’s Professional Staffing and Industrial Staffing reporting units.

The impairment charge was recognized for the amount by which the carrying amounts exceeded the reporting units’ estimated fair values.

As more fully described in Note 6 to the consolidated financial statements, as of September 30, 2024, the fair values of the reporting units exceeded their carrying values.

Management made significant judgments when developing the fair value estimate of the reporting units.

The Company’s evaluation of goodwill for impairment involves the comparison of the fair value of its Professional Staffing reporting unit to its carrying value.

The fair value of the reporting unit is estimated using the discounted cash flow and guideline public company methods, which requires the use of estimates and assumptions related to cash flow forecasts, discount rates, terminal values, and market multiples of comparable companies.

Management’s cash flow forecasts included significant judgments and assumptions relating to revenue growth rates, expense reductions and operating margins.

The fair value of the reporting unit did not exceed its carrying value as of March 31, 2025;

therefore, an impairment charge of $22 million was recognized as of March 31, 2025 and during the year ended September 30, 2025.

The impairment charge was recognized for the amount by which the carrying amount exceeded the reporting unit’s estimated fair value.

As more fully described in Note 8 to the consolidated financial statements, as of September 30, 2025, the fair value of the reporting unit exceeded its carrying value.

Management made significant judgments when developing the fair value estimate of the reporting unit.

As a result, a high degree of auditor judgment and effort was required, including involving the use of our valuation specialists, in performing audit procedures to evaluate the reasonableness of management’s cash flow forecasts and the significant assumptions identified above.

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Obtained an understanding of the internal controls and processes in place over the Company’s goodwill impairment review process, including management’s review of the significant assumptions described above.

· Evaluated the reasonableness of management’s revenue, operating margins, and other forecasted amounts by comparing the forecasts to actual historical results.

Evaluated the reasonableness of management’s revenue, expenses, operating margins, and other forecasted amounts by comparing the forecasts to actual historical results.

Evaluated the reasonableness of guideline public company valuation multiples.

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December 17, 2025

Report of Independent Registered Public Accounting Firm

To the Shareholders, Board of Directors, and Audit Committee

GEE GROUP INC.

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheet of GEE Group Inc.

(the “Company”) as of September 30, 2023, the related consolidated statements of operations, shareholders’ equity, and cash flows for the year ended September 30, 2023, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of September 30, 2023, and the results of its operations and its cash flows for the year ended September 30, 2023, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

/s/ Forvis Mazars, LLP

We served as the Company’s auditor from 2022 to 2024.

We were dismissed in March 2024.

Tampa, Florida

December 18, 2023

GEE GROUP INC.

CONSOLIDATED BALANCE SHEETS

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Prepaid expenses and other current assets

Current assets of discontinued operations

Total current assets

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Other long-term assets

Noncurrent assets of discontinued operations

LIABILITIES AND SHAREHOLDERS' EQUITY

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Current operating lease liabilities

Current portion of notes payable

Other current liabilities

Current liabilities of discontinued operations

Total current liabilities

Deferred taxes, net

Noncurrent operating lease liabilities

Notes payable

Other long-term liabilities

Noncurrent liabilities of discontinued operations

Total liabilities

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authorized - 200,000 shares;

114,900 shares issued and 109,413 shares outstanding at September 30, 2024 and 114,900 shares issued and 111,488 shares outstanding at September 30, 2023

114,900 shares issued and 109,413 shares outstanding at September 30, 2025 and September 30, 2024

Accumulated deficit

Treasury stock;

at cost - 5,487 shares at September 30, 2024 and 3,412 shares at September 30, 2023

at cost - 5,487 shares at September 30, 2025 and September 30, 2024

Total shareholders' equity

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CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in thousands, except basic and diluted earnings per share)

(Amounts in thousands, except basic and diluted loss per share)

Year Ended September 30,

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Goodwill impairment charges

INCOME (LOSS) FROM OPERATIONS

LOSS FROM OPERATIONS

Interest expense

Interest income

INCOME (LOSS) BEFORE INCOME TAX PROVISION

Provision for income tax benefit

NET INCOME (LOSS)

BASIC EARNINGS (LOSS) PER SHARE

DILUTED EARNINGS (LOSS) PER SHARE

WEIGHTED AVERAGE SHARES OUTSTANDING:

LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAX PROVISION

Provision for income tax (expense) benefit attributable to continuing operations

LOSS FROM CONTINUING OPERATIONS

Loss from discontinued operations, net of tax (Note 5)

CONSOLIDATED NET LOSS

WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC AND DILUTED

BASIC AND DILUTED LOSS PER SHARE

From continuing operations

From discontinued operations

Consolidated net loss per share

The accompanying notes are an integral part of these consolidated financial statements.

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Balance, September 30, 2024

Purchase of treasury stock

Share-based compensation

Issuance of shares under incentive stock plan

Balance, September 30, 2025

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CASH FLOWS FROM OPERATING ACTIVITIES:

Net income (loss)

Adjustments to reconcile net income (loss) to cash provided by operating activities:

Gain on disposal of assets

Consolidated net loss

Adjustments to reconcile consolidated net loss to cash provided by operating activities:

Loss (gain) on disposal of assets

Depreciation and amortization

Amortization of operating lease right-of-use assets

Goodwill impairment charges

Intangible assets impairment charges

Goodwill impairment charges

Share-based compensation

Provisions for (recoveries of) credit losses

Provisions for credit losses

Gain on sale of Industrial Segment

Deferred income taxes

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Acquisition of property and equipment

Net cash used in investing activities

Business acquisition, net of cash acquired

Proceeds from sale of Industrial Segment

Net cash provided by (used in) investing activities

CASH FLOWS FROM FINANCING ACTIVITIES:

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Cash at end of year

Less cash from discontinued operations

Cash from continuing operations at end of year

SUPPLEMENTAL CASH FLOW INFORMATION:

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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 September 30, 2024, we operated from locations in eleven (11) states, including twenty-three (23) branch offices in downtown or suburban areas of major U.S.

cities and three (3) additional U.S.

and its wholly owned material operating subsidiaries, Access Data Consulting Corporation, Agile Resources, Inc., Hornet Staffing, Inc., Paladin Consulting, Inc., Scribe Solutions, Inc., SNI Companies, Inc., and Triad Personnel Services, Inc.

(collectively referred to as the “Company,” “us,” “our” or “we”) are providers of permanent and temporary professional 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.

The Company markets its services using the trade names Access Data Consulting, Agile Resources, Ashley Ellis, GEE Group (Columbus), General Employment, Hornet Staffing, Omni One, Paladin Consulting, Scribe Solutions, SNI Companies, Accounting Now, Staffing Now®, SNI Banking, SNI Certes®, SNI Energy®, SNI Financial® and SNI Technology®.

As of September 30, 2025, we operated from locations in ten (10) states, including nineteen (19) branch offices in downtown or suburban areas of major U.S.

cities and four (4) additional U.S.

locations utilizing local staff members working remotely.

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Cash deposit accounts are maintained at financial institutions and, at times, balances may exceed federally insured limits guaranteed by the FDIC.

During 2023, the Company entered into enhanced deposit arrangements with two financial institution in which monies are deposited through a brokerage account and are further placed on deposit by the broker amongst U.S.

During 2023, the Company entered into enhanced deposit arrangements with two financial institutions in which monies are deposited through a brokerage account and are further placed on deposit by the broker amongst U.S.

banks pre-screened by the broker in amounts per bank that do not exceed the individual $ 250 FDIC per depositor limit.

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The Company also holds funds in various other bank accounts that may exceed FDIC insured limits.

These uninsured amounts, in aggregate, were $ 5,194 as of September 30, 2024.

These uninsured amounts, in aggregate, were $ 5,067 and $ 5,194 as of September 30, 2025 and 2024, respectively.

We have never experienced any material losses related to cash on deposit with banks.

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The amendments in ASU 2016-13 replace the probable incurred loss impairment methodology underlying our previous allowance for doubtful accounts with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates.

During fiscal 2025, the Company elected to use the practical expedient introduced by ASU 2025-05 which simplifies the calculation of these estimates by assuming that current conditions will continue through the forecast period.

Under ASU 2016-13, an allowance is recorded with a corresponding charge to bad debt expense for expected credit losses in our accounts receivable including consideration of the effects of past, present and future conditions that may reasonably be expected to impact credit losses.

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The allowance for credit losses is reflected in the consolidated balance sheets as a reduction of accounts receivable.

The impact of the adoption of ASU 2016-13 was immaterial to the Company’s consolidated financial statements.

As of September 30, 2024 and September 30, 2023 the allowance for credit losses was $ 568 and $ 562 , respectively.

The impact of adoptions of ASUs 2016-13 and 2025-05 were immaterial to the Company’s consolidated financial statements.

As of September 30, 2025 and 2024 the allowance for credit losses was $ 76 and $ 144 , respectively.

A summary of changes in this account is as follows:

Allowance for credit losses as of September 30, 2023

Year Ended September 30,

Beginning balance

Provisions for credit losses

Accounts receivable written-off

Allowance for credit losses as of September 30, 2024

The Company’s has two customers that, in aggregate, made up approximately 25 % of the consolidated accounts receivable balance as of both September 30, 2024 and 2023.

These two customers are offered extended payment terms due to the frequency and volume of our services that they utilize.

Each maintains excellent creditworthiness and the Company has not experienced any losses related to these two customers historically.

Accounts receivable write-offs

Ending balance

The Company has one customer that made up approximately 21 % of the consolidated accounts receivable balance as of September 30, 2025 and two customers that, in aggregate, made up approximately 27 % of the consolidated accounts receivable balance as of September 30, 2024.

These customers are offered extended payment terms due to the frequency and volume of our services that they utilize.

Each has demonstrated consistent creditworthiness since doing business with us and the Company has not experienced any losses related to these two customers historically.

GEE GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Property and Equipment

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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 fiscal 2024 and 2023.

GEE GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

There was no impairment of property and equipment in fiscal 2025 and 2024.

The Company determines if a contractual arrangement is a lease at inception and evaluates and classifies leases as operating or finance leases for financial reporting purposes.

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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 currently has one sublease which is accounted for on a net basis in other non-operational costs within selling, general, and administrative expenses and is not material to the consolidated financial statements.

The Company does not currently have residual value guarantees or restrictive covenants in its leases.

The Company evaluates its goodwill for possible impairment as prescribed by FASB ASC 350, Intangibles — Goodwill and Other:

Goodwill, at least annually, and more frequently when one or more triggering events or circumstances indicate that the goodwill might be impaired.

Goodwill , at least annually and on an interim basis when one or more triggering events or circumstances indicate that the goodwill might be impaired.

Under this guidance, annual or interim goodwill impairment testing is performed by comparing the estimated fair value of a reporting unit with its carrying amount.

The Company allocates its goodwill among two reporting units:

its Professional Services reporting unit and its Industrial Services reporting unit for purposes of evaluation for impairments.

An impairment charge is recognized for the amount by which the carrying amount exceeds a reporting unit’s estimated fair value, not to exceed the carrying value of goodwill.

In determining the fair value of our two reporting units, we use one or a combination of commonly accepted valuation methodologies:

(1) the income approach, which is based on the present value of discounted cash flows projected for the reporting unit or, in certain instances, capitalization of earnings, and (2) the market approach, which estimates a fair value based on an appropriate revenue and/or earnings multiple(s) derived from comparable companies.

These valuation techniques rely upon assumptions and other factors, such as the estimated future cash flows of our reporting units, the discount rate used to determine the present value of future cash flows, and the market multiples of comparable companies utilized.

In applying our methods, we consider and use averages and medians in the selection of assumptions derived from comparable companies or market data, where applicable, and in the application of the income and/or market approaches if we determine that this will provide a more appropriate estimated fair value or range of fair value estimates of the reporting units.

Changes to input assumptions and other factors used or considered in the analysis could result in materially different evaluations of goodwill impairment.

The Company allocates its goodwill to its Professional Services reporting unit for purposes of evaluation for impairments.

An impairment charge is recognized for the amount by which the carrying amount exceeds the reporting unit’s estimated fair value, not to exceed the carrying value of goodwill.

GEE GROUP INC.

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

The Company performed an interim goodwill impairment assessment as of June 30, 2024, which indicated the Company’s goodwill assigned to both its Professional and Industrial Services reporting units was impaired.

As a result, the Company reduced its goodwill associated with its Professional and Industrial Services reporting units by $14,202 and $1,083, respectively, with corresponding non-cash impairment charges recognized in its consolidated statements of operations for fiscal 2024 .

This resulted in all goodwill previously allocated to the Industrial Services reporting unit being impaired and written off as of that date.

The Company performed its annual goodwill impairment assessment for its Professional Services reporting unit as of September 30, 2024, and found its goodwill was not further impaired.

The Company performed its prior goodwill impairment assessment as of September 30, 2023, and found that its goodwill was not impaired at that time.

In determining the fair value of our Professional Services reporting unit, we use one or a combination of commonly accepted valuation methodologies:

These valuation techniques rely upon assumptions and other factors, such as the estimated future cash flows of our reporting unit, the discount rate used to determine the present value of future cash flows, and the market multiples of comparable companies utilized.

Changes to input assumptions and other factors used or considered in the analysis could result in materially different evaluations of goodwill impairment.

The Company performed interim goodwill impairment assessments during fiscal 2025 and 2024, as of March 31, 2025 and June 30, 2024, respectively, which indicated the goodwill assigned to the Company’s Professional Services reporting unit was impaired as of each date.

As a result of these interim assessments, the Company reduced its goodwill by $22,000 and $14,201, with corresponding non-cash impairment charges being recognized in its consolidated statements of operations for fiscal 2025 and 2024, respectively .

The Company performed annual goodwill impairment assessments for its Professional Services reporting unit as of September 30, 2025 and September 30, 2024 and found its goodwill was not further impaired as of each date.

Intangible Assets

Separately identifiable intangible assets held in the form of 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 five to ten years using the straight-line method.

Separately identifiable intangible assets held in the form of customer relationships, non-competes 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 the straight-line method.

Impairment of Long-lived Assets (other than Goodwill)

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The net carrying value of assets not recoverable is reduced to fair value, which is typically calculated using the discounted cash flow method.

For purposes of testing the long-lived assets other than goodwill, long-lived assets are grouped and considered with other assets and liabilities within the Professional and Industrial Services reporting units.

For purposes of testing the long-lived assets other than goodwill, long-lived assets are grouped and considered with other assets and liabilities within the Professional Services reporting unit.

An evaluation performed as of June 30, 2024, determined that certain asset groups associated with the Company’s intangible assets were producing negative or sufficiently low gross cash flows and that their estimated future discounted cash flows indicated impairments.

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Earnings per Share

Basic earnings per share are computed by dividing net income attributable to common stockholders by the weighted average common shares outstanding for the period, which is computed using shares issued and outstanding.

Basic earnings per share are computed by dividing net loss attributable to common stockholders by the weighted average common shares outstanding for the period, which is computed using shares issued and outstanding.

Diluted earnings per share is computed giving effect to all potentially dilutive common shares.

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The dilutive effect of the common stock equivalents is reflected in earnings per share by use of the treasury stock method.

Due to the net loss reported for fiscal 2024, there were no dilutive incremental shares considered in the calculation of dilutive shares.

The weighted average dilutive incremental shares, or common stock equivalents, included in the calculations of dilutive shares for fiscal 2023 were 694 .

Due to the loss from continuing operations reported for fiscal 2025 and 2024, there were no dilutive incremental shares considered in the calculation of dilutive shares.

Common stock equivalents, which are excluded because their effect is anti-dilutive, were approximately 4,377 and 4,206 for fiscal 2025 and 2024, respectively.

Revenue Recognition

Revenues from contracts with customers are generated from direct hire placement services, professional contract services, and industrial contract services.

Revenues from contracts with customers are generated from direct hire placement services and professional contract services.

Revenues are recognized when all placement obligations entitling the company to payment have been met.

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The terms between invoicing and when payments are due are not significant.

Direct hire placement service revenues from contracts with customers are recognized when the Company has met each of the criteria under ASC Topic 606, Revenue from Contracts with Customers , including its performance obligations under the contracts.

Direct hire placement service revenues from contracts with customers are recognized when the Company has met each of the criteria under FASB ASC 606, Revenue from Contracts with Customers , including its performance obligations under the contracts.

This generally occurs when the employment candidates accept offers of employment and have started their newly placed positions, less a provision for estimated credits or refunds to customers as the result of applicants not remaining employed for the entirety of the Company’s guarantee period (referred to as “falloffs”).

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No fees for permanent placement services are charged to direct hire employment candidates.

Charges for expected future falloffs are recorded as reductions of revenues for estimated losses due to applicants not remaining employed for the Company’s guarantee period.

In connection with the adoption of ASU 2016-13, the Company reclassified its allowance for falloffs from being combined with the former allowance for doubtful accounts, a contra-asset, to other current liabilities.

Estimated future falloffs are determined by analyzing recent historical trends of actual falloffs and applying a formula comprised of average numbers of falloffs, average falloff amounts, and average cycle times between billing and fall off dates to derive an allowance for falloffs.

Thus, the estimated allowance is derived from observed trends in actual historical falloffs and assumes that historical trends are indicative of future falloff activity.

Liabilities for falloffs during the period are reflected in the consolidated balance sheets in the amounts of $ 102 and $ 118 , as of September 30, 2024 and 2023, respectively.

Falloffs during the period are reflected in the consolidated statements of operations as a reduction of placement service revenues and were approximately $ 401 in fiscal 2024 and $ 943 in fiscal 2023.

GEE GROUP INC.

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

Charges for expected future falloffs are recorded as reductions of revenues for estimated losses due to applicants not remaining employed for the Company’s guarantee period.

Estimated future falloffs are determined by analyzing recent historical trends of actual falloffs and applying a formula comprised of average number of falloffs, average falloff amounts, and average cycle times between billing and fall off dates to derive an allowance for falloffs.

Thus, the estimated allowance is derived from observed trends in actual historical falloffs and assumes that historical trends are indicative of future falloff activity.

Liabilities for falloffs during the period are reflected in the consolidated balance sheets in the amounts of $ 72 and $ 102 , as of September 30, 2025 and 2024, respectively.

Falloffs during the period are reflected in the consolidated statements of operations as a reduction of placement service revenues and were approximately $ 571 and $ 401 in fiscal 2025 and 2024, respectively.

Temporary staffing service revenues from contracts with customers are recognized in amounts for which the Company has a right to invoice, as the services are rendered by the Company’s temporary employees.

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There was no customer that represented 10% or more of the Company’s consolidated revenue in fiscal 2025 or 2024.

See Note 13 for disaggregated revenues by segment.

Cost of Contract Staffing Services

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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.

The Company expenses the costs of job boards used for identifying and recruiting candidates, print and internet media advertising and promotions as incurred and reports these costs in selling, general and administrative expenses.

Advertising expense totaled $ 1,881 and $ 2,083 for fiscal 2025 and 2024, respectively.

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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.

Upon the exercise of options, the Company may elect to utilize treasury shares instead of issuing new shares.

GEE GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

The Company accounts for income taxes under the asset and liability method, FASB ASC 740, Income Taxes , which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements.

Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statement and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse.

Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statement and tax basis of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse.

The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.

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In the event it is determined that the Company would be able to realize the deferred tax assets in the future in excess of their recorded amount, an adjustment would be made to the deferred tax asset valuation allowance, which would reduce the provision for income taxes.

GEE GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

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.

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In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326), which contains authoritative guidance amending how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income.

The guidance requires the application of a current expected credit loss model, which is a new impairment model based on expected losses.

The guidance requires the application of a current expected credit loss (“CECL”) model, which is a new impairment model based on expected losses.

The new guidance was effective for fiscal years beginning after December 15, 2022.

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The new guidance was implemented during the quarter ended December 31, 2023, is applicable to the Company’s trade (accounts) receivable and did not have a material impact on its consolidated financial statements taken as a whole.

Not Yet Adopte d

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280), which enhances prior reportable segment disclosure requirements in part by requiring entities to disclose significant expenses related to their reportable segments.

1 unchanged sentence

The new guidance is effective for fiscal years beginning after December 15, 2023, and for interim periods during fiscal years beginning after December 15, 2024.

The Company has not yet determined the effects of the implementation of the new guidance on its consolidated financial statements and disclosures.

The new guidance was implemented during the quarter ended September 30, 2025, as presented in Note 16, and did not have a material effect on the Company’s consolidated financial statements and disclosures.

In July 2025, the FASB issued ASU 2025-05, Financial Instruments-Credit Losses (Topic 326), which introduces a practical expedient for estimating credit losses under CECL for current accounts receivable and contract assets arising from revenue transactions under ASC 606.

If elected, this expedient allows entities to assume that current conditions at the balance sheet date will persist through the forecast period, simplifying the estimation process.

The new guidance is effective for fiscal years and interim periods beginning after December 15, 2025.

The Company elected to early adopt the expedient during the quarter ended September 30, 2025 which did not have a material impact on its consolidated financial statements.

GEE GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Not Yet Adopted

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740), which expands income tax disclosure requirements in part by requiring entities to disclose a reconciliation of their effective tax rates to statutory rates and provide disaggregation of taxes paid.

1 unchanged sentence

The new guidance is effective for fiscal years beginning after December 15, 2024.

The Company does not expect implementation of the new guidance to have a material impact on its consolidated financial statements and disclosures.

The Company has not yet determined the effects of the new guidance on its consolidated financial statements and disclosures.

In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses (Subtopic 220-40), which expands expense disclosure requirements in part by requiring entities to provide tabular disclosure of the nature of expenses making up relevant captions on the face of the income statement.

2 unchanged sentences

The new guidance is effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027.

The Company does not expect implementation of the new guidance to have a material impact on its consolidated financial statements and disclosures.

The Company has not yet determined the effects of the new guidance on its consolidated financial statements and disclosures.

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

Business Acquisition

On January 3, 2025, the Company entered into a Stock Purchase Agreement (the “Purchase Agreement”) with Hornet Staffing, Inc., a Georgia corporation (“Hornet”) and its shareholders, and purchased 100 shares of its capital stock which represents 100 % of the ownership interest in Hornet.

Hornet is an Atlanta-based provider of staff augmentation services with national service capability.

Hornet provides staffing solutions to many markets serving large scale, "blue chip" companies in the information technology ("IT"), professional and customer service staffing verticals.

The total consideration paid for the purchased shares was $ 1,500 , consisting of (i) a $ 1,100 cash payment, and (ii) the issuance to its former shareholders of subordinated and unsecured promissory notes (the "Promissory Notes") totaling an aggregate initial principal amount of $ 400 .

Interest on the outstanding principal balances of the Promissory Notes is payable at a fixed rate of 5 % per annum.

Payments on the Promissory Notes shall be made annually with the first payment due on the first anniversary of the issuance dates and the second and final payment due on the second anniversary of the issuance date.

The Company also paid legal and professional fees of $ 111 related to the purchase during fiscal 2025, which are included in selling, general and administrative expenses in the consolidated statements of operations.

The Purchase Agreement also provides that for the initial two-year period after closing, Hornet is required to achieve an agreed upon minimum average gross profit measure equal to $ 720 for each of the two subsequent twelve-month periods (each twelve-month period being separately measured).

If the average gross profit measure during either of the subsequent two years is less than the minimum required average gross profit, then the Company will reduce the remaining balance under the Promissory Notes proportionally by an amount equal to the amount of the shortfall;

provided the Company may not deduct more than the amount due under the then current payment for the Promissory Notes and may not seek to claw back any previous payments made under the Notes.

GEE GROUP INC.

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

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

The Purchase Agreement contains certain representations and warranties customary and standard for this type of transaction.

The assets and liabilities of Hornet were recorded at their estimated fair values as of the closing date of the Purchase Agreement.

The Promissory Notes were measured at fair value using Level 3 inputs and were recorded net of discounts of $8 at the acquisition date.

The following table summarizes the preliminary balance sheet at January 3, 2025:

Assets purchased

Liabilities assumed (a)

Net assets purchased

Purchase consideration:

Cash paid at closing

Promissory notes, net

Intangible assets from purchase

Liabilities assumed includes a $151 deferred tax liability present at January 3, 2025 but recorded by the Company post-acquisition due to a tax election made during fiscal 2025.

An independent purchase price allocation and valuation has been performed to identify intangible assets acquired.

The allocation to these intangible assets is as follows:

Customer relationships

Total intangible assets acquired

The following table represents the unaudited consolidated pro forma results of operations for fiscal 2025 and 2024 had the acquisition occurred on October 1, 2023, the first day of the most historic period reported in this Annual Report on Form 10-K.

This unaudited pro forma information does not purport to present what the Company’s actual results would have been had the acquisition occurred on October 1, 2023.

This information is based on Hornet’s unaudited historical financial statements.

Year Ended September 30,

Cost of contract services

Selling, general and administrative expenses

Loss from operations

Basic and diluted loss per share

GEE GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Discontinued Operations

On April 18, 2024, the Company’s Mergers and Acquisitions (“M&A”) committee of the Board of Directors completed its review of strategic alternatives recommended by an outside investment banking firm.

This included recommendation of divesture of the Company’s Industrial Segment which was subsequently approved by the Company’s full Board of Directors on May 13, 2024.

Management thereafter began the process of identifying and contacting potential buyers.

As of March 31, 2025, the Company’s plan to sell its Industrial Segment met all the criteria for the first time to be reported as discontinued operations under U.S.

GAAP, the final one being making the determination that the sale or other disposition would be completed within twelve months.

On June 2, 2025, the Company entered into an agreement for the sale of certain operating assets of its Industrial Segment, including those of BMCH, Inc., Triad Logistics, Inc., and its Triad Staffing brand.

The Company received total cash consideration of $ 250 from the buyer at closing and an additional $ 788 during the first 90 days following closing.

A pre-tax net gain of $ 133 , including transaction costs of $ 97 , is included in discontinued operations for fiscal 2025.

The remaining assets of the Industrial Segment not sold were distributed to the Company.

Assets and Liabilities of Discontinued Operations

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

September 30,

Assets of discontinued operations:

Accounts receivable, net

Prepaid expenses and other current assets

Property and equipment, net

Right-of-use assets

Deferred tax assets, net

Other long-term assets

Total assets of discontinued operations

Liabilities of discontinued operations:

Accounts payable

Accrued compensation

Current operating lease liabilities

Other current liabilities

Noncurrent operating lease liabilities

Total liabilities of discontinued operations

GEE GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Net Loss from Discontinued Operations

Results of the Industrial Segment for fiscal 2025 and 2024, respectively, consisted of the following:

Year Ended September 30,

Cost of contract services

Selling, general and administrative expenses

Depreciation expense

Goodwill impairment charge

Interest expense

Loss from discontinued operations before gain on sale and income taxes

Gain on sale of Industrial Segment

Provision for income tax expense attributable to discontinued operations

Loss from discontinued operations, net of tax

Cash Flows from Discontinued Operations

The net cash flows of the Industrial Segment during fiscal 2025 included the cash proceeds of $ 1,038 received as consideration on the sale.

There were no capital expenditures or other significant non-operating cash flows under the Industrial Segment during fiscal 2025 or 2024.

Property and Equipment

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Property and equipment, net

The Company occasionally acquires equipment under finance leases including hardware and software used by our IT department to improve security and capacity, vehicles used by our Industrial Segment, and certain furniture for our offices.

The Company occasionally acquires equipment under finance leases including hardware and software used by our IT department to improve security and capacity, and certain furniture for our offices.

Terms for these leases generally range from two to six years.

4 unchanged sentences

Interest on finance lease liabilities

GEE GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

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

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Present value of finance lease liabilities (a)

(a) Includes current portion of $ 67 for finance leases.

GEE GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Includes current portion of $ 70 for finance 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.

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Present value of operating lease liabilities (a)

(a) Includes current portion of $ 1,195 for operating leases.

Includes current portion of $ 986 for operating leases.

GEE GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Goodwill and Intangible Assets

For purposes of performing its annual goodwill impairment assessments as of September 30, 2024 and 2023, the Company applied the valuation techniques and assumptions to its professional and industrial segments as reporting units discussed in Note 2, above;

and also considered recent trends in the Company’s stock price, implied control or acquisition premiums, earnings, and other possible factors and their effects on estimated fair value of the Company’s reporting units.

The Company completed its annual goodwill impairment assessments, as of September 30, 2024 and 2023, and determined that its goodwill was not impaired.

Due to the presence of one or more triggering events, including the presence of negative macroeconomic conditions impacting U.S.

staffing firms, including ours, and related reductions to the Company’s forecasts of future results, an interim assessment was performed as of June 30, 2024, which indicated the Company’s goodwill assigned to both its Professional and Industrial Services reporting units was impaired.

As a result, the Company reduced its goodwill associated with its Professional and Industrial Services reporting units by $ 14,202 and $ 1,083 , respectively, with corresponding non-cash impairment charges recognized in its consolidated statements of operations for fiscal 2024.

This resulted in all goodwill previously allocated to the Industrial Services reporting unit being impaired and written off as of that date.

For purposes of performing its annual goodwill impairment assessments as of September 30, 2025 and 2024, the Company applied the valuation techniques and assumptions to its Professional Segment reporting unit as discussed in Note 2, above;

The Company completed its most recent annual goodwill impairment assessment as of September 30, 2025 and determined that its goodwill was not further impaired.

Prior to this, as of March 31, 2025, an interim assessment was performed as the estimated fair value of the Professional Services reporting unit was determined to have decreased and indicated that the reporting unit’s carrying value exceeded its estimated fair value.

As a result, a non-cash goodwill impairment charge of $ 22,000 was recognized during fiscal 2025, as determined by the interim evaluation made of our goodwill as of March 31, 2025.

Upon completion of the prior annual goodwill impairment assessment as of September 30, 2024, it was determined that the Company’s goodwill was not further impaired.

In fiscal 2024, an interim assessment was also performed due to the decline in operating results and market capitalization experienced during the year which, in management’s view, represented one or more triggering events that could indicate an impairment in the Company’s goodwill.

The interim assessment was performed as of June 30, 2024 and indicated the goodwill assigned to the Professional Services reporting unit was impaired.

As a result, a non-cash goodwill impairment charge of $ 14,201 was recognized during fiscal 2024, as determined by the interim evaluation made of our goodwill as of June 30, 2024.

A summary of goodwill balances is presented as follows:

September 30, 2024

September 30, 2023

Accumulated Impairment Charges

Goodwill Carrying Amount

Accumulated Impairment Charges

Goodwill Carrying Amount

Professional Services reporting unit

Industrial Services reporting unit

Accumulated Impairment

Carrying Amount

As of September 30, 2024

Addition from business acquisition

Impairment adjustment

As of September 30, 2025

The estimated fair value of the Professional Services reporting unit resulting from the September 30, 2025 assessment exceeded the reporting unit’s adjusted carrying value, net of the impairment recorded during the March 31, 2025 interim assessment, by approximately 39 %, or approximately $ 12.7 million.

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

GEE GROUP INC.

1 unchanged sentence

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

The estimated fair value of the Professional Services reporting unit resulting from the September 30, 2024 assessment exceeded the reporting unit’s adjusted carrying value, net of the impairment recorded during the June 30, 2024 interim assessment, by approximately 10 %, or approximately $ 5.5 million.

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

Intangible Assets

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Net Book Value

Impairment Charges

Accumulated Amortization

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Intangible assets that represent customer relationships are amortized on the basis of estimated future undiscounted cash flows or using the straight-line basis over estimated remaining useful lives of five to ten years.

Trade names are amortized on a straight-line basis over their respective estimated useful lives of between five and ten years.

Non-competes and trade names are amortized on a straight-line basis over their respective estimated useful lives of between two and ten years.

Due to the presence of negative macroeconomic conditions impacting U.S.

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September 30,

Accrued audit fees

Accrued client rebates

Accrued legal fees

Accrued severance

Current finance leases payable

Reserve for falloffs

Current finance leases payable

Accrued audit fees

Accrued severance

Total other current liabilities

8 unchanged sentences

The Company had $ 102 and $ 255 in unamortized debt issuance costs associated with the Facility as of September 30, 2025 and 2024, respectively.

Of these costs, $ 153 is reflected in other current assets on the consolidated balance sheets as of both September 30, 2024, and September 30, 2023 with the remainder being reflected in other long term assets.

Of these costs, $ 102 and $ 153 were reflected in other current assets on the consolidated balance sheets as of September 30, 2025 and 2024, respectively, with the remainder, if any, being reflected in other long-term assets.

The amortization expense of these debt costs included in interest expense on the consolidated statements of operations was $153 in both fiscal 2025 and 2024.

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2”), which provides for an increase in the Facility’s concentration limits for certain large clients at the discretion of FCB.

On January 3, 2025, in connection with its acquisition of Hornet, the Company and FCB entered into Consent and Amendment No.

3 to the Facility (“Amendment No.

3”), pursuant to which, FCB consented to the Hornet acquisition and the Company and its subsidiaries, as co-borrowers, the guarantors and FCB made certain amendments to the Loan Agreement and related collateral agreements to add Hornet to the Facility, accordingly.

GEE GROUP INC.

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The Incentive Stock Plan, as amended, provides for total shares available for restricted stock and stock options of 15,000 ( 7,500 restricted stock shares and 7,500 stock option shares).

The Incentive Stock Plan authorizes the Compensation Committee of the Board of Directors to grant either incentive or non-statutory stock options to employees.

The Incentive Stock Plan authorizes the Compensation Committee of the Board of Directors to grant non-statutory stock options to employees.

Vesting periods are established by the Compensation Committee at the time of grant.

1 unchanged sentence

Restricted Stock

The Company granted 164 and 742 shares of restricted stock during fiscal 2024 and 2023, respectively.

Of the restricted shares granted during fiscal 2023, 150 were granted to new members of the Board of Directors upon their election in fiscal 2023.

On September 27, 2022, the Company adopted a new annual incentive compensation program (“AICP”) for its executives to be administered under the Company’s Incentive Stock Plan, under which all shares granted in fiscal 2024 and the remaining 592 shares granted in fiscal 2023 were awarded.

On September 27, 2022, the Company adopted a new annual incentive compensation program (“AICP”) for its executives to be administered under the Company’s Incentive Stock Plan.

The AICP includes a long-term incentive (“LTI”) compensation plan in the form of restricted stock awards comprised of two components:

1 unchanged sentence

Initial awards under both service-only and service plus performance-based components of the AICP LTI plan are determined based on financial performance measures for the immediately preceding fiscal year.

The Company granted 164 shares of restricted stock under the AICP during fiscal 2024 all of which were based on actual fiscal 2023 results and will cliff vest on December 1, 2026, based on future service only.

The Company did not grant shares of restricted stock during fiscal 2025, however, it did grant 164 shares of restricted stock during fiscal 2024.

The 164 shares of restricted stock granted under the AICP during fiscal 2024 were based on actual fiscal 2023 results and will cliff vest on December 1, 2026, based on future service only.

No service plus performance-based restricted shares were granted in fiscal 2024 upon determination that financial targets set by the Company’s Board of Directors were not met for fiscal 2024.

During fiscal 2023, 551 of the 592 restricted shares granted under the AICP were granted based on actual results for fiscal 2022, as measured against corresponding financial targets for that year, and will cliff vest as of December 2, 2025.

The remaining 41 of the 592 restricted shares granted represent the earned portion of the initial performance-based shares granted based on fiscal 2022 results, as adjusted for the outcome with regard to the financial targets applicable to those shares set by the Company’s Board of Directors for fiscal 2023.

GEE GROUP INC.

18 unchanged sentences

December 1, 2026

November 28, 2025

December 1, 2025

December 1, 2026

Total shares granted or eligible to be granted in future

10 unchanged sentences

Non-vested restricted stock outstanding as of September 30, 2025

The Company had 77 warrants outstanding as of September 30, 2024 and September 30, 2023 with a weighted average exercise price per share of $ 2 .

The outstanding warrants had a weighted average remaining contractual life of 0.50 and 1.50 as of September 30, 2024 and 2023, respectively.

No warrants were granted or expired during fiscal 2024 and 2023.

The Company had no warrants outstanding as of September 30, 2025.

As of September 30, 2024, the Company had 77 warrants outstanding with a weighted average exercise price per share of $ 2 and a weighted average remaining contractual life of 0.5 years.

No warrants were granted during fiscal 2025 and 2024.

All outstanding warrants expired during fiscal 2025.

Stock Options

3 unchanged sentences

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

The Company did not grant stock options in fiscal 2024, however, did grant 1,720 stock options in fiscal 2023.

The Company granted 1,550 stock options during fiscal 2025 and did not grant stock options during fiscal 2024.

The Company’s stock options generally vest on annual schedules during periods ranging from two to four years from the date of grant, although some options are fully vested upon grant.

2 unchanged sentences

A summary of stock option activity is as follows:

Number of Shares

Weighted Average Exercise Price per share ($)

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Weighted average volatility factor

Weighted average expected life (years)

Weighted average expected life

Share Repurchase Program

5 unchanged sentences

During fiscal 2024, the Company repurchased 2,717 shares of its common stock at a net cost of $ 1,575 .

During fiscal 2023, the Company repurchased 3,412 shares of its common stock at a net cost of $ 1,984 .

Upon conclusion of the share repurchase program, as of December 31, 2023, the Company had repurchased 6,129 shares in aggregate (accounting for approximately 5.4% of our issued and outstanding shares of common stock immediately prior to the program).

Upon conclusion of the share repurchase program, as of December 31, 2023, the Company repurchased 6,129 shares in aggregate (accounting for approximately 5.4 % of our then issued and outstanding shares of common stock immediately prior to the program).

On August 13, 2024, the Company re-issued 642 of its treasury shares to fulfill commitments for the issuance of previously granted restricted share awards that became fully vested and unrestricted.

19 unchanged sentences

Valuation allowance

GEE GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

The net deferred income tax asset balance related to the following:

Total income tax expense (benefit):

The net deferred income tax asset (liability) balance related to the following:

September 30,

12 unchanged sentences

Valuation allowance

Deferred tax assets, net

Deferred tax assets (liabilities), net

GEE GROUP INC.

2 unchanged sentences

As of September 30, 2025, the Company had federal and state net operating loss (“NOL”) carryforwards of approximately $ 28.2 million and $ 29.5 million, respectively, which begin to expire in tax years 2034 for federal and 2026 for state purposes.

Of the $24.0 million of federal net operating losses, $ 6.6 million can be carried indefinitely.

Future realization of the tax benefits of existing temporary differences and net operating loss carryforwards ultimately depends on the existence of sufficient taxable income within the carryforward period.

Each year, the Company performs an evaluation to determine whether a valuation allowance is needed.

As of September 30, 2024, the Company considered all available evidence, both positive and negative, which included the results of operations for the current and preceding years.

The Company also considered whether there was any currently available information about future years.

As of September 30, 2024, management determined that there is sufficient evidence to conclude that it is more likely than not that the federal portion of its deferred tax assets are realizable.

Additionally, management determined that certain state NOLs are more likely than not to expire before utilization as they do not have an unlimited carryforward.

Accordingly, the Company recorded a valuation allowance against all of its state NOLs during fiscal 2024.

Prior to this, as of September 30, 2023, management determined that there was sufficient positive evidence to conclude that it was more likely than not that all deferred taxes were realizable.

The Company therefore fully released the former valuation allowance during fiscal 2023.

Under Internal Revenue Code 382, if a corporation undergoes an “ownership change,” the corporation’s ability to use its pre-change NOL carryforwards and other pre-change tax attributes to offset its post-change income may be limited.

As of the filing date, the Company has not completed a formal study to assess whether one or more ownership changes have occurred that would result in limitations on the usage of its NOLs for Federal or state income tax purposes under Section 382.

However, the Company has performed internal analysis and estimates of potential exposure to Section 382 limitations on usage of its NOLs and, as a result, believes that such limitations would not materially restrict its ability to use its pre-change NOL carryforwards and other pre-change tax attributes to offset its post-change income.

A key factor in its analysis and conclusion is the presence of significant net unrealized built-in gains available to the Company.

Future changes in our stock ownership, which may be outside of our control, may trigger an ownership change.

In addition, future equity offerings or acquisitions that have equity as a component of the purchase price could result in an ownership change.

Also, ownership changes that have occurred or may occur in the future, could impact utilization of the NOL carryforwards or other tax attributes because of future events and circumstances, which could result in an increase of the Company’s future tax liability.

Of the $28.2 million of federal net operating losses, $ 10.9 million can be carried forward indefinitely.

As of each reporting date, management considers new evidence, both positive and negative, that could affect its view of the future realization of deferred tax assets (“DTA”).

In view of the significance of the Company’s recent pre-tax book losses and likelihood of continuing uncertainty in the industry and economy as a whole, management excluded projections of future income from its forecast of the reversal of its DTAs as of September 30, 2025.

As a result, it was determined that the Company's net DTAs would not be realized as there is not sufficient positive evidence to conclude that it is more likely than not that the deferred taxes are realizable.

The Company has recorded an additional $ 11,964 valuation allowance in fiscal 2025, resulting in a total valuation allowance of $ 12,757 as of September 30, 2025, accordingly.

Under Internal Revenue Code 382, if a corporation undergoes a specified change in ownership, the Corporation’s ability to use its pre-change net operating loss (“NOL”) carryforwards and other pre-change tax attributes to offset its post-change income may be limited.

Such limitation may result in the expiration of the NOL carryforwards generated before 2018 prior to their utilization.

The Company engaged outside tax experts to perform a comprehensive section 382 study to calculate the estimated limitation and evaluate the Corporation’s ability to use its NOL carryforwards and other pre-change tax attributes.

The study was finalized in the quarter ended March 31, 2025 and concluded that the Company’s pre-2018 NOL carryovers and other tax attributes are subject to limitation under section 382.

The calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax laws and regulations for both federal taxes and the many states and local tax jurisdictions in which we operate or do business in.

4 unchanged sentences

As of September 30, 2025, and 2024, we have not recorded any material uncertain tax positions in our consolidated financial statements.

We recognize interest and penalties related to uncertain tax benefits on the income tax expense line in the accompanying consolidated statements of operations.

Our policy is to recognize interest and penalties related to uncertain tax benefits, if any, on the income tax expense line in the accompanying consolidated statements of operations.

As of September 30, 2025, and 2024, no accrued interest or penalties are included on the related tax liability line in the consolidated balance sheets.

8 unchanged sentences

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

The One Big Beautiful Bill of 2025

On July 4, 2025, H.R.1 - One Big Beautiful Bill was enacted, introducing a wide range of tax reforms for businesses.

Due to the Company's loss position and limited exposure to affected provisions, the bill’s overall impact is not material.

The Company has historically elected out of bonus depreciation for all classes of property under Section 168(k)(7) and depreciates assets under MACRS without accelerated expensing.

The Company continues to monitor ongoing regulatory guidance related to the new law.

Commitments and Contingencies

6 unchanged sentences

Management is not aware of any matters or circumstances under which potential liability arising from these agreements would be material to the consolidated financial statements.

Related Party Transactions

On January 3, 2025, the Company entered into an employment agreement with Lawrence Bruce, one of the former shareholders of Hornet.

As part of the Purchase Agreement, the Company issued Promissory Notes to Lawrence Bruce and his spouse, Laurel Bruce, in the amounts of $ 160 and $ 240 , representing their respective portions of this purchase consideration based on their percentage of Hornet’s stock ownership prior to the acquisition.

The Promissory Notes have certain contingencies as disclosed under Note 4.

Defined Contribution Plan

7 unchanged sentences

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 these segments.

Unallocated corporate expenses primarily include certain executive and administrative salaries and related expenses, corporate legal expenses, share-based compensation expenses, consulting expenses, audit fees, corporate rent and facility costs, board related fees, acquisition, integration and restructuring expenses, and interest expense.

For purposes of determining total assets of the reportable segments, all corporate assets such as cash, prepaid expenses, and deferred tax assets have been allocated among these segments.

(a) direct hire placement services and (b) temporary professional staffing services in the fields of information technology, accounting, finance and office, engineering, and medical.

These services make up the Company’s Professional Segment.

As disclosed in Note 5, the Company’s Industrial Segment has been deemed a discontinued operation and, as such, is excluded from the table below which only reflects continuing operations.

The results of the Professional Segment are assessed by the Company’s chief operating decision-maker (“CODM”), our CEO, who decides how to allocate resources based on the segment’s income (loss) from operations.

The CODM uses growth trends in both revenues and income (loss) from operations to compare the segment’s results to those of competitors as benchmarks.

Additionally, the CODM reviews trends in revenues with reference to projected market conditions as provided by SIA in their quarterly and annual reports.

These analyses provide the CODM with information needed to make decisions on capital use such as reinvesting into the Professional Segment or seeking acquisitions.

Year Ended September 30,

Industrial Staffing Services

Contract services revenue

Contract services gross margin

Income (loss) from operations

Depreciation and amortization

Accounts receivable – net

Professional Staffing Services

Permanent placement revenue

Permanent placement services gross margin

Contract services revenue

Contract services gross margin

Income (loss) from operations

Cost of contract services

Personnel expenses

Occupancy expenses

Advertising expenses

Other segment expenses (a)

Depreciation and amortization

Accounts receivable – net

Intangible assets

Unallocated Expenses

Corporate administrative expenses

Corporate facility expenses

Share-based compensation expense

Board related expenses

Total unallocated expenses

Total revenue

Income (loss) from operations

Intangible assets impairment charges

Goodwill impairment charges

Professional Segment loss from operations

Corporate SG&A (b)

Depreciation and amortization

Loss from operations

Total accounts receivables net

Intangible assets

Total assets (c)

Other segment expenses mainly consist of consulting expenses, business insurance and licensing fees, applicant tracking systems and other software subscriptions, equipment-related costs, and background checks for candidates placed with clients.

Corporate SG&A primarily includes certain executive and administrative salaries and related expenses, corporate legal expenses, share-based compensation expenses, consulting expenses, audit fees, corporate rent and facility costs, board related fees, certain advertising and promotional expenses, and acquisition, integration and restructuring expenses.

All corporate assets such as cash and other assets have been presented together with those of the Professional Segment.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

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.

What changed 10-K

Item 7A. Quantitative and Qualitative Disclosures About Market Risk