<SEC-DOCUMENT>0001477932-18-002543.txt : 20180516
<SEC-HEADER>0001477932-18-002543.hdr.sgml : 20180516
<ACCEPTANCE-DATETIME>20180516095818
ACCESSION NUMBER:		0001477932-18-002543
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20180515
ITEM INFORMATION:		Results of Operations and Financial Condition
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20180516
DATE AS OF CHANGE:		20180516

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			GEE Group Inc.
		CENTRAL INDEX KEY:			0000040570
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-EMPLOYMENT AGENCIES [7361]
		IRS NUMBER:				366097429
		STATE OF INCORPORATION:			IL
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-05707
		FILM NUMBER:		18839035

	BUSINESS ADDRESS:	
		STREET 1:		184 SHUMAN BLVD
		STREET 2:		SUITE 420
		CITY:			NAPERVILLE
		STATE:			IL
		ZIP:			60563
		BUSINESS PHONE:		(630) 954-0400

	MAIL ADDRESS:	
		STREET 1:		184 SHUMAN BLVD
		STREET 2:		SUITE 420
		CITY:			NAPERVILLE
		STATE:			IL
		ZIP:			60563

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	GENERAL EMPLOYMENT ENTERPRISES INC
		DATE OF NAME CHANGE:	19920703

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	OSHEA CHARLES M CORP
		DATE OF NAME CHANGE:	19670413
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>gee_8k.htm
<DESCRIPTION>FORM 8-K
<TEXT>
<html><head><title>gee_8k.htm</title><!--Document Created by EDGARMaster--></head><BODY spellcheck="true" style="text-align:justify;font:10pt TIMES NEW ROMAN;margin:0px 7%"><p style="MARGIN: 0px" align="center">
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<p style="MARGIN: 0px">&nbsp;</p>
<p style="MARGIN: 0px" align="center"><b><font size="3">UNITED STATES</font></b></p>
<p style="MARGIN: 0px" align="center"><b><font size="3">SECURITIES AND EXCHANGE COMMISSION</font></b></p>
<p style="MARGIN: 0px" align="center"><b><font size="3">WASHINGTON, DC 20549</font></b></p>
<p style="MARGIN: 0px" align="center">&nbsp;</p>
<p style="MARGIN: 0px" align="center"><b><font size="5">FORM 8-K</font></b></p>
<p style="MARGIN: 0px" align="center">&nbsp;</p>
<p style="MARGIN: 0px" align="center"><b><font size="3">CURRENT REPORT</font></b></p>
<p style="MARGIN: 0px" align="center">Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934</p>
<p style="MARGIN: 0px" align="center">&nbsp;</p>
<p style="MARGIN: 0px" align="center">Date of Report (Date of earliest event reported): <b><u>May 15, 2018</u></b></p>
<p style="MARGIN: 0px">&nbsp;</p>
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<p style="MARGIN: 0px" align="center"><b style="MARGIN: 0px"><font size="5">GEE GROUP, INC</font></b></p></td></tr>
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<p style="MARGIN: 0px" align="center">(Exact name of registrant as specified in its charter)</p></td></tr></table></p>
<p style="MARGIN: 0px">&nbsp;</p>
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<p style="MARGIN: 0px" align="center"><b>Illinois</b></p></td>
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<p align="center">&nbsp;</p></td>
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<p style="MARGIN: 0px" align="center"><b>1-05707</b></p></td>
<td width="5%">
<p align="center">&nbsp;</p></td>
<td style="BORDER-BOTTOM: 1px solid" valign="top" width="30%">
<p style="MARGIN: 0px" align="center"><b>36-6097429</b></p></td></tr>
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<p style="MARGIN: 0px" align="center">(State or other jurisdiction of</p>
<p style="MARGIN: 0px" align="center">incorporation or organization)</p></td>
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<p style="MARGIN: 0px" align="center">(Commission</p>
<p style="MARGIN: 0px" align="center">File Number)</p></td>
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<p align="center">&nbsp;</p></td>
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<p style="MARGIN: 0px" align="center">(I.R.S. Employer</p>
<p style="MARGIN: 0px" align="center">Identification Number)</p></td></tr></table>
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<p style="MARGIN: 0px" align="center"><b>184 Shuman Blvd. Ste. 420 Naperville, Illinois</b></p></td>
<td valign="top" width="10%"></td>
<td style="BORDER-BOTTOM: 1px solid" valign="top" width="45%">
<p style="MARGIN: 0px" align="center"><b>60563</b></p></td></tr>
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<p style="MARGIN: 0px" align="center">(Address of principal executive offices)</p></td>
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<p style="MARGIN: 0px" align="center">&nbsp;</p>
<p style="MARGIN: 0px" align="center">Registrant&#8217;s telephone number, including area code: <b><u>(630) 954-0400</u></b> </p>
<p style="MARGIN: 0px" align="justify">&nbsp;</p>
<p style="MARGIN: 0px" align="justify">Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:</p>
<p style="MARGIN: 0px">&nbsp;</p>
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<p style="MARGIN: 0px" align="justify"><font face="Wingdings">o</font></p></td>
<td valign="top" width="96%">
<p style="MARGIN: 0px" align="justify">Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)</p></td></tr></table>
<p style="MARGIN: 0px">&nbsp;</p>
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<p style="MARGIN: 0px" align="justify"><font face="Wingdings">o</font></p></td>
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<p style="MARGIN: 0px" align="justify">Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)</p></td></tr></table>
<p style="MARGIN: 0px">&nbsp;</p>
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<p style="MARGIN: 0px" align="justify"><font face="Wingdings">o</font></p></td>
<td valign="top" width="96%">
<p style="MARGIN: 0px" align="justify">Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))</p></td></tr></table>
<p style="MARGIN: 0px">&nbsp;</p>
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<p style="MARGIN: 0px" align="justify"><font face="Wingdings">o</font></p></td>
<td valign="top" width="96%">
<p style="MARGIN: 0px" align="justify">Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))</p></td></tr></table>
<p style="MARGIN: 0px" align="justify">&nbsp;</p>
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<p style="MARGIN: 0px"><b>Item 2.02 Results of Operations and Financial Conditions.</b></p>
<p style="MARGIN: 0px" align="justify">&nbsp;</p>
<p style="MARGIN: 0px" align="justify">May 15, 2018, GEE Group Inc. (the &#8220;Company&#8221;) (NYSE MKT: JOB) issued a press release announcing financial results for the second quarter ended, March 31, 2018. A copy of the release is attached as Exhibit 99.1.</p>
<p style="MARGIN: 0px" align="justify">&nbsp;</p>
<p style="MARGIN: 0px" align="justify">The information furnished herein, including Exhibit 99.1, is not deemed to be &#8220;filed&#8221; for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section. This information will not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates them by reference.</p>
<p style="MARGIN: 0px" align="justify">&nbsp;</p>
<p style="MARGIN: 0px" align="justify"><b>Item 9.01 Financial Statements and Exhibits.</b></p>
<p style="MARGIN: 0px">&nbsp;</p>
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<p style="MARGIN: 0px" align="justify"><b>Exhibit No.</b></p></td>
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<p style="MARGIN: 0px" align="justify"><b>Description</b></p></td></tr>
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<p style="MARGIN: 0px" align="justify">&nbsp;</p></td></tr>
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<p style="MARGIN: 0px" align="justify"><a href="gee_ex991.htm">99.1</a></p></td>
<td valign="bottom"></td>
<td valign="top">
<p style="MARGIN: 0px" align="justify"><a href="gee_ex991.htm">Press release issued by GEE Group Inc. dated May 15, 2018.</a></p></td></tr></table>
<p style="MARGIN: 0px">&nbsp;</p>
<p style="MARGIN: 0px">
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<p style="MARGIN: 0px">&nbsp;</p>
<p style="MARGIN: 0px" align="center"><b>SIGNATURES</b></p>
<p style="MARGIN: 0px" align="justify">&nbsp;</p>
<p style="MARGIN: 0px" align="justify">Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.</p>
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<p style="MARGIN: 0px" align="justify"><b>GEE GROUP, INC.</b></p></td>
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<p style="MARGIN: 0px">(Registrant) </p></td>
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<p style="MARGIN: 0px" align="justify">Date: May 16, 2018</p></td>
<td valign="top">
<p style="MARGIN: 0px" align="justify">By:</p></td>
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<p style="MARGIN: 0px" align="justify"><i>/s/ Andrew J. Norstrud</i></p></td>
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<p style="MARGIN: 0px" align="justify">Andrew J. Norstrud</p></td>
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<p style="MARGIN: 0px" align="justify">Chief Financial Officer</p></td>
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<p style="MARGIN: 0px" align="left">&nbsp;</p>
<p style="MARGIN: 0px">&nbsp;</p>
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<p style="MARGIN: 0px" align="center">3</p></td></tr></table></p>
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<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>2
<FILENAME>gee_ex991.htm
<DESCRIPTION>PRESS RELEASE
<TEXT>
<html><head><title>gee_ex991.htm</title><!--Document Created by EDGARMaster--></head><BODY spellcheck="true" style="text-align:justify;font:10pt TIMES NEW ROMAN;margin:0px 7%"><p style="MARGIN: 0px" align="right"><b>EXHIBIT 99.1</b></p>
<p style="MARGIN: 0px">&nbsp;</p>
<p style="MARGIN: 0px" align="center"><b>GEE Group Announces Results for the Fiscal 2018 Second Quarter</b></p>
<p style="MARGIN: 0px">&nbsp;</p>
<p style="MARGIN: 0px"><b>Naperville, IL, May 15, 2018</b>/&nbsp;&#8211;<b>&nbsp;GEE Group Inc. </b><b>(NYSE American: JOB)</b>&nbsp;(&#8220;the Company&#8221; or &#8220;GEE Group&#8221;), a provider of professional staffing services and human resource solutions, today announced results for the second quarter ended March&nbsp;31, 2018.</p>
<p style="MARGIN: 0px">&nbsp;</p>
<p style="MARGIN: 0px 0px 0px 45px"><b>2018</b><b> Fiscal Second Quarter Highlights</b></p>
<p style="MARGIN: 0px 0px 0px 42pt; TEXT-INDENT: 0px">&nbsp;</p>
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<td valign="top">Revenue for the fiscal 2018 second quarter was approximately $39.9 million, up by approximately 85% over the $21.6 million recorded in the second quarter of fiscal 2017. Contract staffing services contributed approximately $34.5 million or approximately 87% of revenue and direct placement services contributed approximately $5.3 million or approximately 13% of revenue. This compares to contract staffing services of approximately $20.1 million or approximately 93% of revenue and direct hire placement services of approximately $1.5 million or approximately 7% of revenue respectively for the same quarter of fiscal 2017. Both direct hire placement and contract staffing services revenue and related gross profit were impacted somewhat by a slower than normal post holiday recovery in hiring in many markets coupled with inclement weather stemming from Nor&#8217;easters and Snow Storms in the Northeast, Mid-Atlantic and Midwest regions where the Company has offices. The result was a slower than normal start for the 2018 fiscal second quarter resulting in a reduction in billable hours for contract workers as well as fewer direct hire placements during the months of January and February. The Company experienced a strong pickup in business in March which extended into April.</td></tr>
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<td valign="top">Revenue from the combined professional contract staffing and professional direct hire placement services, which is comprised of staffing and solutions in the information technology, engineering, healthcare, legal, and finance and accounting specialties, was approximately $34.7 million, and represents approximately 87% of total revenue for the 2018 fiscal second quarter. The SNI acquisition contributed significantly to the increase in overall revenue, with a major contribution to both professional contract staffing and professional direct hire services revenue.</td></tr>
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<td valign="top">Overall gross margin for the fiscal second quarter ended March 31, 2018 (including direct placement services) was approximately 34.2% compared to approximately 26.2% for the fiscal second quarter ended March 31, 2017. The change in the overall gross margin was primarily due to an overall increase in contract staffing revenue and the change in revenue mix for the 2018 fiscal second quarter vs. the 2017 prior year fiscal second quarter, and greater direct hire placement revenue (which is recorded at 100% gross margin) for the current year fiscal second quarter. Professional contract staffing services gross margin increased (excluding direct placement services) for the 2018 fiscal second quarter to approximately 25.8% compared to approximately 24.1% for the 2017 fiscal second quarter. The change in professional contract staffing services gross margin was due to various factors including increased revenue from higher margin customers, decreased revenue from lower margin vendor management systems (VMS) and managed service providers (MSP) customers, and specialty revenue mix change. Industrial contract services gross margin for the 2018 fiscal second quarter was virtually unchanged at approximately 13.6% when compared to approximately 13.7% for the 2017 fiscal second quarter.</td></tr></tr></tr></table></p>
<p style="MARGIN: 0px">&nbsp;</p>
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<td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">1</td></tr>
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<td valign="top">Selling, general and administrative expenses (SG&amp;A) increased as a percentage of revenue for the 2018 fiscal second quarter and was approximately 29.8%, compared to approximately 22.3% of revenue for the 2017 fiscal second quarter, an increase of approximately 7.5 percentage points. The increase was primarily attributable to costs related to inclusion of SNI expenses including direct hire commissions paid for direct placement services.</td></tr>
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<td valign="top">GAAP income from operations was approximately $15,000 for the 2018 fiscal second quarter, compared to GAAP income from operations of approximately $327,000 for the comparable 2017 fiscal second quarter.</td></tr>
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<td valign="top">GAAP net loss for the 2018 fiscal second quarter was approximately $2.8 million, compared to GAAP net loss of approximately $129,000 for the comparable 2017 fiscal second quarter.</td></tr>
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<td valign="top">Higher interest expense and amortization of intangible assets related to the fiscal third quarter 2017 acquisition of the SNI companies contributed to the lower GAAP income from operations and the increase in GAAP net loss for the fiscal second quarter of 2018 compared with the fiscal second quarter of 2017.</td></tr>
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<td valign="top">Adjusted earnings before interest, taxes, depreciation, amortization, noncash stock and stock option expenses, acquisition, integration and restructuring expenses (adjusted EBITDA, a non-GAAP financial measure) for the 2018 fiscal second quarter was approximately $2.02 million vs. approximately $1.04 million for the comparable prior fiscal year second quarter<b> (see non-GAAP adjusted EBITDA reconciliation to GAAP net income (net loss) attached to this press release)</b>.</td></tr>
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<td valign="top">Other GAAP financial information: GAAP interest expense of approximately $2.2 million for the 2018 fiscal second quarter included noncash payments in kind (&#8220;PIK&#8221;) of the Company&#8217;s common stock of approximately $402,000. GAAP current liabilities of approximately $26.9 million includes an acquisition deposit for a working capital guarantee of $1.5 million, which GEE is seeking to recover through a mediation process.</td></tr></tr></tr></tr></tr></tr></table></p>
<p style="MARGIN: 0px">&nbsp;</p>
<p style="MARGIN: 0px"><b>The aforementioned 2018 Fiscal Second Quarter Highlights and Financial Information should be read in conjunction with all of the financial and other information included in GEE Group&#8217;s Quarterly Reports filed with the SEC on Form 10Q for the respective periods, Current Reports on Forms 8K &amp; 8K/A and Information Statements on Schedules 14A &amp; 14C filed with the SEC, and Annual Reports on Form 10K filed with the SEC for the fiscal years ended in 2015, 2016, and 2017. Also, </b><b>the discussion of financial results in this press release and disclosures regarding the use of non-GAAP financial measures and related schedules attached hereto which reconcile non-GAAP financial measures to the financial information prescribed by GAAP are important to readers to help gain a more comprehensive understanding of the Company&#8217;s financial results. The non-GAAP financial measures and metrics of financial results or financial performance presented herein are not a substitute for the financial measures provided by GAAP and should not be considered as alternatives, replacements or superior to financial measures presented in accordance with GAAP. Financial information provided in this press release may consist of estimates, projections and certain assumptions that are considered forward looking statements and that are predictive in nature and depend on future events. The estimates and assumptions and related projected financial results may not be realized nor are they guarantees of future performance. </b></p>
<p style="MARGIN: 0px">&nbsp;</p>
<p style="MARGIN: 0px">
<table id="pagebreak956ddc6b-63a1-4cfb-948a-a4c673085be7" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0">
<tr>
<td class="hpbhr">&nbsp;</td></tr>
<tr>
<td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">2</td></tr>
<tr>
<td>
<div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr>
<tr>
<td>&nbsp;</td></tr></table></p>
<p style="MARGIN: 0px">&nbsp;&nbsp;</p>
<p style="MARGIN: 0px"><b>2018 Second Quarter Financial Results: Discussion</b></p>
<p style="MARGIN: 0px">&nbsp;</p>
<p style="MARGIN: 0px">The Company reported consolidated revenue of approximately $39.9 million for the fiscal second quarter ended March&nbsp;31, 2018, compared to revenue of approximately $21.6 million for the fiscal second quarter ended March 31, 2017. Contract staffing services contributed approximately $34.5 million or approximately 87% of consolidated revenue, up by approximately 72% over the comparable prior year second quarter, and direct hire placement services contributed approximately $5.3 million or approximately 13% of consolidated revenue, up by approximately 253% over the second quarter of fiscal 2017. This compares to the fiscal 2017 second quarter contract staffing services revenue of approximately $20.1 million or approximately 93% of consolidated revenue and direct hire placement revenue of approximately $1.5 million or approximately 7% of consolidated revenue respectively for the 2017 fiscal second quarter. The increase in contract staffing services revenue of approximately $14.4 million for the 2018 fiscal second quarter over the comparable prior year fiscal second quarter was primarily due to an increase of approximately $15.4 million in professional contract staffing services revenue offset by a decrease of approximately $1.0 million in industrial contract staffing services revenue. The professional contract services revenue for the quarter includes staffing and solutions in the information technology, engineering, healthcare, legal, and finance and accounting specialties. GEE Group&#8217;s strategic plan contains both internal and acquisition growth objectives to increase revenue in the aforementioned higher margin and more profitable professional services sectors of staffing which represents approximately 87% of total revenue for the 2018 fiscal second quarter, as compared with 72% of total revenue for the 2017 fiscal second quarter. </p>
<p style="MARGIN: 0px">&nbsp;</p>
<p style="MARGIN: 0px">GEE Group&#8217;s overall staffing services gross profit margin, including direct placement services (recorded at 100% gross margin) for the 2018 fiscal second quarter, was approximately 34.2% versus approximately 26.2% for the comparable 2017 prior year fiscal second quarter. The change in the overall gross margin from the comparable prior year fiscal second quarter was due to several factors, including an increase in contract staffing, change in revenue mix and greater direct hire placement revenue for the 2018 fiscal second quarter, including significant contributions in both temporary and permanent placement staffing revenue from acquired company SNI. In the professional contract staffing services segment, the gross margin (excluding direct placement services) improved to approximately 25.8% for the 2018 fiscal second quarter compared to approximately 24.1% for the 2017 fiscal second quarter. The change in professional contract staffing services gross margin was primarily due to decreased revenue from VMS and MSP accounts which have lower margins, specialty revenue mix composition (information technology (IT), engineering, healthcare, legal, and finance and accounting) and higher gross margin from the IT project solutions business and from professional contract staffing revenue contributed from acquired company SNI. The Company&#8217;s industrial staffing services gross margin for the 2018 fiscal second quarter was 13.6% versus approximately 13.7% for the 2017 fiscal second quarter. </p>
<p style="MARGIN: 0px">&nbsp;</p>
<p style="MARGIN: 0px">
<table id="pagebreak3573fd0f-140b-430d-916a-1fad7b3e2823" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0">
<tr>
<td class="hpbhr">&nbsp;</td></tr>
<tr>
<td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">3</td></tr>
<tr>
<td>
<div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr>
<tr>
<td>&nbsp;</td></tr></table></p>
<p style="MARGIN: 0px">&nbsp;&nbsp;</p>
<p style="MARGIN: 0px">The Company&#8217;s selling, general and administrative expenses (SG&amp;A) for the fiscal second quarter ended March 31, 2018 increased as a percentage of revenue and was approximately 29.8% compared to approximately 22.3% of revenue for the fiscal second quarter ended March 31, 2017. SG&amp;A increased by approximately $7.1 million from the 2017 fiscal second quarter to approximately $11.9 million for the 2018 fiscal second quarter. Direct hire commissions and other expenses from acquired company SNI contributed significantly to the increase in SG&amp;A. </p>
<p style="MARGIN: 0px">&nbsp;</p>
<p style="MARGIN: 0px">GEE Group recorded GAAP income from operations of approximately $15,000 for the fiscal second quarter ended March 31, 2018, compared to GAAP income from operations of approximately $327,000 for the fiscal second quarter ended March 31, 2017. GAAP net loss for the fiscal second quarter ended March 31, 2018 was approximately $2.8 million, compared to GAAP net loss for the fiscal second quarter ended March 31, 2017 of approximately $129,000. </p>
<p style="MARGIN: 0px">&nbsp;</p>
<p style="MARGIN: 0px">Higher interest expense and the amortization of intangible assets related to the fiscal third quarter 2017 acquisition of the SNI companies contributed to the lower GAAP income from operations and the increase in GAAP net loss for the fiscal 2018 second quarter compared with the fiscal 2017 second quarter.</p>
<p style="MARGIN: 0px">&nbsp;</p>
<p style="MARGIN: 0px">The Company&#8217;s adjusted earnings before interest, taxes, depreciation, amortization, noncash stock and stock option expenses, acquisition, integration, and restructuring expenses (adjusted EBITDA, a non-GAAP financial measure) was approximately $2.02 million for the fiscal second quarter ended March 31, 2018, compared to approximately $1.04 million for the fiscal second quarter ended March 31, 2017.</p>
<p style="MARGIN: 0px">&nbsp;</p>
<p style="MARGIN: 0px"><b>GEE Group uses the above-mentioned non-GAAP financial measures internally to evaluate its operating performance and for planning purposes and believes that these are useful financial measures also used by investors .These non-GAAP financial measures are not a substitute for nor superior to financial measures provided by GAAP and all measures and disclosures of financial information pursuant to GAAP as reflected in the Form 10Q filed with the SEC for the respective periods should be read to obtain a comprehensive and thorough understanding of the Company&#8217;s financial results. The reconciliation of non-GAAP adjusted EBITDA to GAAP net income (net loss) is provided in a schedule that is a part of this press release. </b></p>
<p style="MARGIN: 0px">&nbsp;</p>
<p style="MARGIN: 0px"><b>Management Comments</b></p>
<p style="MARGIN: 0px">&nbsp;</p>
<p style="MARGIN: 0px">Derek E. Dewan, Chairman and Chief Executive Officer of GEE Group, commented, &#8220;The Company gained momentum across all of its lines of business late in the second quarter that carried over into April. We are optimistic that it will continue for the remainder of GEE&#8217;s fiscal year ending September 30, 2018.&#8221; </p>
<p style="MARGIN: 0px">&nbsp;</p>
<p style="MARGIN: 0px">Mr. Dewan added, &#8220;We are encouraged about the increased use of contingent labor in the &#8216;gig economy&#8217;. Secular changes in the workforce coupled with a very tight domestic job market are driving the demand for all of our services. GEE&#8217;s enhanced service capability in providing professional staffing services and human resource solutions together with its expanded geographic footprint will help the Company achieve continued growth in revenue and profitability while providing outstanding customer service and rewarding careers for our employees and associates.&#8221; </p>
<p style="MARGIN: 0px">&nbsp;</p>
<p style="MARGIN: 0px">
<table id="pagebreak1aabc92b-e7e2-4b4c-87c3-196fa487ea7c" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0">
<tr>
<td class="hpbhr">&nbsp;</td></tr>
<tr>
<td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">4</td></tr>
<tr>
<td>
<div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr>
<tr>
<td>&nbsp;</td></tr></table></p>
<p style="MARGIN: 0px">&nbsp;</p>
<p style="MARGIN: 0px"><b>Use of Non-GAAP Financial Measures </b></p>
<p style="MARGIN: 0px">&nbsp;</p>
<p style="MARGIN: 0px"><b>To supplement the Company&#8217;s consolidated financial statements presented on a GAAP basis, the Company discloses certain financial information including non-GAAP adjusted EBITDA because management uses these supplemental non-GAAP financial measures to help evaluate performance period over period, to analyze the underlying trends in its business, to establish operational goals, to provide additional measures of operating performance, including using the information for internal planning relating to the Company&#8217;s ability to meet debt service, make capital expenditures and provide working capital needs. In addition, the Company believes investors already use these non-GAAP measures to monitor the Company&#8217;s performance. Non-GAAP adjusted EBITDA is defined by the Company as net income or net loss before interest, taxes, depreciation and amortization (EBITDA) plus non-cash stock option and stock-based compensation expenses, the change in contingent consideration and acquisition, integration and restructuring costs. Non-GAAP adjusted EBITDA is not a term defined by GAAP and, as a result, the Company&#8217;s measure of non-GAAP adjusted EBITDA might not be comparable to similarly titled measures used by other companies. Generally, a non-GAAP financial measure is a numerical measure of a company&#8217;s performance, financial position or cash flow that either excludes or includes amounts that are not normally included in the most directly comparable measure calculated and presented in accordance with GAAP. The non-GAAP financial measures discussed above, however, should be considered in addition to, and not as a substitute for, or superior to net income or net loss and income or loss from operations as reported for GAAP on the Consolidated Statements of Income, cash and cash flows as reported for GAAP on the Consolidated Statement of Cash Flows or other measures of financial performance prepared in accordance with GAAP, and as reflected on the Company&#8217;s financial statements prepared in accordance with GAAP included in GEE Group&#8217;s Form 10Q and Form 10K filed for the respective fiscal periods with the SEC. Reconciliation of GAAP net income or GAAP net loss to non-GAAP adjusted EBITDA is attached hereto. </b></p>
<p style="MARGIN: 0px">&nbsp;</p>
<p style="MARGIN: 0px"><b>Reconciliation of Non-GAAP Adjusted EBITDA to GAAP Net Income (net loss) </b></p>
<p style="MARGIN: 0px"><b>Quarter Ended March 31,</b></p>
<p style="MARGIN: 0px">(In thousands)</p>
<p style="MARGIN: 0px">&nbsp;</p>
<table style="WIDTH: 100%; TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0">
<tr>
<td valign="bottom">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="hdcell" style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="9%" colspan="2" align="center">
<p style="MARGIN: 0px" align="center"><b>2018</b></p></td>
<td valign="bottom">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="hdcell" style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="9%" colspan="2" align="center">
<p style="MARGIN: 0px" align="center"><b>2017</b></p></td>
<td valign="bottom">
<p style="MARGIN: 0px">&nbsp;</p></td></tr>
<tr bgcolor="#cceeff">
<td valign="top">
<p style="MARGIN: 0px"><b>Net income (net loss), GAAP</b></p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">$</td>
<td id="ffcell" valign="bottom" width="9%" align="right">(2,878</td>
<td valign="bottom" width="1%">)</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">$</td>
<td id="ffcell" valign="bottom" width="9%" align="right">(129</td>
<td valign="bottom" width="1%">)</td></tr>
<tr bgcolor="#ffffff">
<td valign="top">
<p style="MARGIN: 0px"><b>Interest expense, net</b></p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">2,199</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">392</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td></tr>
<tr bgcolor="#cceeff">
<td valign="top">
<p style="MARGIN: 0px"><b>Income tax expense</b></p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">694</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">64</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td></tr>
<tr bgcolor="#ffffff">
<td valign="top">
<p style="MARGIN: 0px"><b>Depreciation expense</b></p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">98</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">71</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td></tr>
<tr bgcolor="#cceeff">
<td valign="top">
<p style="MARGIN: 0px"><b>Amortization expense</b></p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">1,394</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">369</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td></tr>
<tr bgcolor="#ffffff">
<td valign="top">
<p style="MARGIN: 0px"><b>Stock compensation &amp; stock option expense</b></p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">336</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">192</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td></tr>
<tr bgcolor="#cceeff">
<td valign="top">
<p style="MARGIN: 0px"><b>Acquisition, integration &amp; restructuring</b></p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="9%" align="right">181</td>
<td style="PADDING-BOTTOM: 1px" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="9%" align="right">77</td>
<td style="PADDING-BOTTOM: 1px" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td></tr>
<tr bgcolor="#ffffff">
<td valign="top">
<p style="MARGIN: 0px"><b>Non-GAAP adjusted EBITDA</b></p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td style="BORDER-BOTTOM: black 3px double" valign="bottom" width="1%">$</td>
<td id="ffcell" style="BORDER-BOTTOM: black 3px double" valign="bottom" width="9%" align="right">2,024</td>
<td style="PADDING-BOTTOM: 3px" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td style="BORDER-BOTTOM: black 3px double" valign="bottom" width="1%">$</td>
<td id="ffcell" style="BORDER-BOTTOM: black 3px double" valign="bottom" width="9%" align="right">1,036</td>
<td style="PADDING-BOTTOM: 3px" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td></tr></table>
<p style="MARGIN: 0px">&nbsp;</p>
<p style="MARGIN: 0px">
<table id="pagebreak61a9fcb9-fc7a-45c4-bc7c-5e00473f0210" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0">
<tr>
<td class="hpbhr">&nbsp;</td></tr>
<tr>
<td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">5</td></tr>
<tr>
<td>
<div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr>
<tr>
<td>&nbsp;</td></tr></table></p>
<p style="MARGIN: 0px">&nbsp;</p>
<p style="MARGIN: 0px">
<table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0">
<tr>
<td valign="bottom" width="14%" colspan="9">
<p style="MARGIN: 0px 0px 0px 0in"><b>GEE GROUP INC.</b></p></td></tr>
<tr>
<td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="63%" colspan="9">
<p style="MARGIN: 0px 0px 0px 0in"><b>CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)</b></p></td></tr>
<tr>
<td valign="bottom" width="14%" colspan="9">
<p style="MARGIN: 0px 0px 0px 0in">(In Thousands)</p></td></tr></table></p>
<p style="MARGIN: 0px">&nbsp;&nbsp; </p>
<table style="WIDTH: 100%; TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0">
<tr>
<td valign="bottom">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="hdcell" valign="bottom" colspan="2" align="center">
<p style="MARGIN: 0px 0px 0px 0in" align="center"><b>March 31,</b></p></td>
<td valign="bottom">
<p style="MARGIN: 0px"><b>&nbsp;</b></p></td>
<td valign="bottom">
<p style="MARGIN: 0px"><b>&nbsp;</b></p></td>
<td id="hdcell" valign="bottom" colspan="2" align="center">
<p style="MARGIN: 0px 0px 0px 0in" align="center"><b>September 30,</b></p></td>
<td valign="bottom">
<p style="MARGIN: 0px"><b>&nbsp;</b></p></td></tr>
<tr>
<td valign="bottom">
<p style="MARGIN: 0px"><b>&nbsp;</b></p></td>
<td valign="bottom">
<p style="MARGIN: 0px"><b>&nbsp;</b></p></td>
<td id="hdcell" style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="9%" colspan="2" align="center">
<p style="MARGIN: 0px 0px 0px 0in" align="center"><b>2018</b></p></td>
<td style="PADDING-BOTTOM: 1px" valign="bottom">
<p style="MARGIN: 0px"><b>&nbsp;</b></p></td>
<td valign="bottom">
<p style="MARGIN: 0px"><b>&nbsp;</b></p></td>
<td id="hdcell" style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="9%" colspan="2" align="center">
<p style="MARGIN: 0px 0px 0px 0in" align="center"><b>2017</b></p></td>
<td style="PADDING-BOTTOM: 1px" valign="bottom">
<p style="MARGIN: 0px">&nbsp;</p></td></tr>
<tr>
<td valign="top">
<p style="MARGIN: 0px 0px 0px 0in"><b>ASSETS</b></p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" colspan="2" align="right">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" colspan="2" align="right">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td></tr>
<tr>
<td valign="top">
<p style="MARGIN: 0px 0px 0px 15px"><b>CURRENT ASSETS:</b></p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" colspan="2" align="right">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" colspan="2" align="right">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td></tr>
<tr>
<td valign="top">
<p style="MARGIN: 0px 0px 0px 30px">Cash</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">$</td>
<td id="ffcell" valign="bottom" width="9%" align="right">2,938</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">$</td>
<td id="ffcell" valign="bottom" width="9%" align="right">2,785</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td></tr>
<tr bgcolor="#cceeff">
<td valign="top">
<p style="MARGIN: 0px 0px 0px 30px">Accounts receivable, less allowances (March - $1,047 and September - $1,712)</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">20,598</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">23,178</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td></tr>
<tr bgcolor="#ffffff">
<td valign="top">
<p style="MARGIN: 0px 0px 0px 30px">Other current assets</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="9%" align="right">1,772</td>
<td style="PADDING-BOTTOM: 1px" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="9%" align="right">3,014</td>
<td style="PADDING-BOTTOM: 1px" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td></tr>
<tr bgcolor="#cceeff">
<td valign="top">
<p style="MARGIN: 0px 0px 0px 45px">Total current assets</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="9%" align="right">25,308</td>
<td style="PADDING-BOTTOM: 1px" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="9%" align="right">28,977</td>
<td style="PADDING-BOTTOM: 1px" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td></tr>
<tr bgcolor="#ffffff">
<td valign="top">
<p style="MARGIN: 0px 0px 0px 30px">Property and equipment, net </p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">918</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">914</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td></tr>
<tr bgcolor="#cceeff">
<td valign="top">
<p style="MARGIN: 0px 0px 0px 30px">Other long-term assets</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">19</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">282</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td></tr>
<tr bgcolor="#ffffff">
<td valign="top">
<p style="MARGIN: 0px 0px 0px 30px">Goodwill</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">76,593</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">76,593</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td></tr>
<tr bgcolor="#cceeff">
<td valign="top">
<p style="MARGIN: 0px 0px 0px 30px">Intangible assets, net</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="9%" align="right">32,259</td>
<td style="PADDING-BOTTOM: 1px" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="9%" align="right">35,049</td>
<td style="PADDING-BOTTOM: 1px" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td></tr>
<tr bgcolor="#ffffff">
<td valign="top">
<p style="MARGIN: 0px 0px 0px 15px"><b>TOTAL ASSETS</b></p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td style="BORDER-BOTTOM: black 3px double" valign="bottom" width="1%">$</td>
<td id="ffcell" style="BORDER-BOTTOM: black 3px double" valign="bottom" width="9%" align="right">135,097</td>
<td style="PADDING-BOTTOM: 3px" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td style="BORDER-BOTTOM: black 3px double" valign="bottom" width="1%">$</td>
<td id="ffcell" style="BORDER-BOTTOM: black 3px double" valign="bottom" width="9%" align="right">141,815</td>
<td style="PADDING-BOTTOM: 3px" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td></tr>
<tr bgcolor="#cceeff">
<td valign="top">
<p style="MARGIN: 0px 0px 0px 0in"><b>LIABILITIES AND SHAREHOLDERS' EQUITY</b></p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td></tr>
<tr bgcolor="#ffffff">
<td valign="top">
<p style="MARGIN: 0px 0px 0px 15px"><b>CURRENT LIABILITIES:</b></p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td></tr>
<tr bgcolor="#cceeff">
<td valign="top">
<p style="MARGIN: 0px 0px 0px 30px">Revolving credit facility</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">$</td>
<td id="ffcell" valign="bottom" width="9%" align="right">9,900</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">$</td>
<td id="ffcell" valign="bottom" width="9%" align="right">7,904</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td></tr>
<tr bgcolor="#ffffff">
<td valign="top">
<p style="MARGIN: 0px 0px 0px 30px">Acquisition deposit for working capital guarantee </p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">1,500</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">1,500</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td></tr>
<tr bgcolor="#cceeff">
<td valign="top">
<p style="MARGIN: 0px 0px 0px 30px">Accrued interest</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">1,151</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">2,175</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td></tr>
<tr bgcolor="#ffffff">
<td valign="top">
<p style="MARGIN: 0px 0px 0px 30px">Accounts payable</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">2,043</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">3,243</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td></tr>
<tr bgcolor="#cceeff">
<td valign="top">
<p style="MARGIN: 0px 0px 0px 30px">Accrued compensation</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">5,092</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">7,394</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td></tr>
<tr bgcolor="#ffffff">
<td valign="top">
<p style="MARGIN: 0px 0px 0px 30px">Other current liabilities</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">340</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">515</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td></tr>
<tr bgcolor="#cceeff">
<td valign="top">
<p style="MARGIN: 0px 0px 0px 30px">Short-term portion of subordinated debt</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">721</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">1,225</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td></tr>
<tr bgcolor="#ffffff">
<td valign="top">
<p style="MARGIN: 0px 0px 0px 30px">Short-term portion of term-note, net of discount</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="9%" align="right">6,187</td>
<td style="PADDING-BOTTOM: 1px" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="9%" align="right">3,433</td>
<td style="PADDING-BOTTOM: 1px" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td></tr>
<tr bgcolor="#cceeff">
<td valign="top">
<p style="MARGIN: 0px 0px 0px 45px">Total current liabilities</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">26,934</td>
<td style="PADDING-BOTTOM: 1px" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">27,389</td>
<td style="PADDING-BOTTOM: 1px" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td></tr>
<tr bgcolor="#ffffff">
<td valign="top">
<p style="MARGIN: 0px 0px 0px 30px">Deferred rent</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">238</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">334</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td></tr>
<tr bgcolor="#cceeff">
<td valign="top">
<p style="MARGIN: 0px 0px 0px 30px">Deferred taxes</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">930</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">958</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td></tr>
<tr bgcolor="#ffffff">
<td valign="top">
<p style="MARGIN: 0px 0px 0px 30px">Term-loan, net of debt discounts</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">38,336</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">42,018</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td></tr>
<tr bgcolor="#cceeff">
<td valign="top">
<p style="MARGIN: 0px 0px 0px 30px">Subordinated debt</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">1,000</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">1,000</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td></tr>
<tr bgcolor="#ffffff">
<td valign="top">
<p style="MARGIN: 0px 0px 0px 30px">Subordinated convertible debt</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">16,685</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">16,685</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td></tr>
<tr bgcolor="#cceeff">
<td valign="top">
<p style="MARGIN: 0px 0px 0px 30px">Other long-term liabilities</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="9%" align="right">24</td>
<td style="PADDING-BOTTOM: 1px" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="9%" align="right">35</td>
<td style="PADDING-BOTTOM: 1px" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td></tr>
<tr bgcolor="#ffffff">
<td valign="top">
<p style="MARGIN: 0px 0px 0px 45px">Total long-term liabilities</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="9%" align="right">57,213</td>
<td style="PADDING-BOTTOM: 1px" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="9%" align="right">61,030</td>
<td style="PADDING-BOTTOM: 1px" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td></tr>
<tr bgcolor="#cceeff">
<td>
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td></tr>
<tr bgcolor="#ffffff">
<td valign="top">
<p style="MARGIN: 0px 0px 0px 30px">Commitments and contingencies</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td></tr>
<tr bgcolor="#cceeff">
<td>
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td></tr>
<tr bgcolor="#ffffff">
<td valign="top">
<p style="MARGIN: 0px 0px 0px 15px"><b>MEZZANINE EQUITY</b></p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td></tr>
<tr bgcolor="#cceeff">
<td valign="top">
<p style="MARGIN: 0px 0px 0px 30px">Preferred stock; no par value; authorized - 20,000 shares; issued and outstanding - 5,926</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td></tr>
<tr bgcolor="#ffffff">
<td valign="top">
<p style="MARGIN: 0px 0px 0px 45px">Preferred series A stock - 160 authorized; issued and outstanding - none</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">-</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">-</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td></tr>
<tr bgcolor="#cceeff">
<td valign="top">
<p style="MARGIN: 0px 0px 0px 45px">Preferred series B stock - 5,950 authorized; issued and outstanding - 5,816 and 5,926 at March 31, 2018 and September 30, 2017, respectively</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td></tr>
<tr bgcolor="#ffffff">
<td valign="top">
<p style="MARGIN: 0px 0px 0px 45px">Liquidation value of the preferred series B stock is approximately $28,265 and $28,800 at March 31, 2018 and September 30, 2017, respectively</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">28,788</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">29,333</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td></tr>
<tr bgcolor="#cceeff">
<td valign="top">
<p style="MARGIN: 0px 0px 0px 15px"><b>SHAREHOLDERS' EQUITY</b></p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td></tr>
<tr bgcolor="#ffffff">
<td valign="top">
<p style="MARGIN: 0px 0px 0px 30px">Common stock, no-par value; authorized - 200,000 shares; issued and outstanding - 10,446 shares at March 31, 2018 and 9,879 shares at September 30, 2017, respectively</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">-</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">-</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td></tr>
<tr bgcolor="#cceeff">
<td valign="top">
<p style="MARGIN: 0px 0px 0px 30px">Additional paid in capital</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">42,285</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">39,517</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td></tr>
<tr bgcolor="#ffffff">
<td valign="top">
<p style="MARGIN: 0px 0px 0px 30px">Accumulated deficit</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="9%" align="right">(20,123</td>
<td style="PADDING-BOTTOM: 1px" valign="bottom" width="1%">)</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="9%" align="right">(15,454</td>
<td style="PADDING-BOTTOM: 1px" valign="bottom" width="1%">)</td></tr>
<tr bgcolor="#cceeff">
<td valign="top">
<p style="MARGIN: 0px 0px 0px 45px">Total shareholders' equity</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="9%" align="right">22,162</td>
<td style="PADDING-BOTTOM: 1px" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="9%" align="right">24,063</td>
<td style="PADDING-BOTTOM: 1px" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td></tr>
<tr bgcolor="#ffffff">
<td valign="top">
<p style="MARGIN: 0px 0px 0px 15px"><b>TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY</b></p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td style="BORDER-BOTTOM: black 3px double" valign="bottom" width="1%">$</td>
<td id="ffcell" style="BORDER-BOTTOM: black 3px double" valign="bottom" width="9%" align="right">135,097</td>
<td style="PADDING-BOTTOM: 3px" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td style="BORDER-BOTTOM: black 3px double" valign="bottom" width="1%">$</td>
<td id="ffcell" style="BORDER-BOTTOM: black 3px double" valign="bottom" width="9%" align="right">141,815</td>
<td style="PADDING-BOTTOM: 3px" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td></tr></table>&nbsp;
<table id="pagebreak21646caf-5b62-4d83-8671-55164def4caa" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0">
<tr>
<td class="hpbhr">&nbsp;</td></tr>
<tr>
<td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">6</td></tr>
<tr>
<td>
<div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr>
<tr>
<td>&nbsp;</td></tr></table>
<p style="MARGIN: 0px">&nbsp;</p>
<p style="MARGIN: 0px">
<table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0">
<tr>
<td valign="bottom" width="48%" colspan="17">
<p style="MARGIN: 0px 0px 0px 0in"><b>GEE GROUP INC.</b></p></td></tr>
<tr>
<td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="72%" colspan="17">
<p style="MARGIN: 0px 0px 0px 0in"><b>CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)</b></p></td></tr>
<tr>
<td valign="bottom" width="48%" colspan="17">
<p style="MARGIN: 0px 0px 0px 0in">(In Thousands, Except Per Share Data)</p></td></tr></table></p>
<table style="WIDTH: 100%; TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0">
<tr>
<td valign="bottom">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="hdcell" style="BORDER-BOTTOM: black 1px solid" valign="bottom" colspan="6" align="center">
<p style="MARGIN: 0px 0px 0px 0in" align="center"><b>Three Months Ended March 31,</b></p></td>
<td valign="bottom">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="hdcell" style="BORDER-BOTTOM: black 1px solid" valign="bottom" colspan="6" align="center">
<p style="MARGIN: 0px 0px 0px 0in" align="center"><b>Six Months Ended March 31,</b></p></td>
<td valign="bottom">
<p style="MARGIN: 0px">&nbsp;</p></td></tr>
<tr>
<td valign="bottom">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="hdcell" style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="9%" colspan="2" align="center">
<p style="MARGIN: 0px 0px 0px 0in" align="center"><b>2018</b></p></td>
<td style="PADDING-BOTTOM: 1px" valign="bottom">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="hdcell" style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="9%" colspan="2" align="center">
<p style="MARGIN: 0px 0px 0px 0in" align="center"><b>2017</b></p></td>
<td style="PADDING-BOTTOM: 1px" valign="bottom">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="hdcell" style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="9%" colspan="2" align="center">
<p style="MARGIN: 0px 0px 0px 0in" align="center"><b>2018</b></p></td>
<td style="PADDING-BOTTOM: 1px" valign="bottom">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="hdcell" style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="9%" colspan="2" align="center">
<p style="MARGIN: 0px 0px 0px 0in" align="center"><b>2017</b></p></td>
<td style="PADDING-BOTTOM: 1px" valign="bottom">
<p style="MARGIN: 0px">&nbsp;</p></td></tr>
<tr>
<td valign="top">
<p style="MARGIN: 0px 0px 0px 0in"><b>NET REVENUES:</b></p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" colspan="2" align="right">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" colspan="2" align="right">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" colspan="2" align="right">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" colspan="2" align="right">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td></tr>
<tr bgcolor="#cceeff">
<td valign="top">
<p style="MARGIN: 0px 0px 0px 15px">Contract staffing services</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">$</td>
<td id="ffcell" valign="bottom" width="9%" align="right">34,520</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">$</td>
<td id="ffcell" valign="bottom" width="9%" align="right">20,090</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">$</td>
<td id="ffcell" valign="bottom" width="9%" align="right">73,981</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">$</td>
<td id="ffcell" valign="bottom" width="9%" align="right">39,946</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td></tr>
<tr bgcolor="#ffffff">
<td valign="top">
<p style="MARGIN: 0px 0px 0px 15px">Direct hire placement services</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="9%" align="right">5,337</td>
<td style="PADDING-BOTTOM: 1px" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="9%" align="right">1,459</td>
<td style="PADDING-BOTTOM: 1px" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="9%" align="right">11,108</td>
<td style="PADDING-BOTTOM: 1px" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="9%" align="right">2,609</td>
<td style="PADDING-BOTTOM: 1px" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td></tr>
<tr bgcolor="#cceeff">
<td valign="top">
<p style="MARGIN: 0px 0px 0px 30px"><b>NET REVENUES</b></p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">39,857</td>
<td style="PADDING-BOTTOM: 1px" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">21,549</td>
<td style="PADDING-BOTTOM: 1px" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">85,089</td>
<td style="PADDING-BOTTOM: 1px" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">42,555</td>
<td style="PADDING-BOTTOM: 1px" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td></tr>
<tr bgcolor="#ffffff">
<td>
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td></tr>
<tr bgcolor="#cceeff">
<td valign="top">
<p style="MARGIN: 0px 0px 0px 15px">Cost of contract services</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="9%" align="right">26,231</td>
<td style="PADDING-BOTTOM: 1px" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="9%" align="right">15,894</td>
<td style="PADDING-BOTTOM: 1px" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="9%" align="right">55,689</td>
<td style="PADDING-BOTTOM: 1px" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="9%" align="right">31,457</td>
<td style="PADDING-BOTTOM: 1px" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td></tr>
<tr bgcolor="#ffffff">
<td valign="top">
<p style="MARGIN: 0px 0px 0px 30px"><b>GROSS PROFIT</b></p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">13,626</td>
<td style="PADDING-BOTTOM: 1px" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">5,655</td>
<td style="PADDING-BOTTOM: 1px" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">29,400</td>
<td style="PADDING-BOTTOM: 1px" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">11,098</td>
<td style="PADDING-BOTTOM: 1px" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td></tr>
<tr bgcolor="#cceeff">
<td>
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td></tr>
<tr bgcolor="#ffffff">
<td valign="top">
<p style="MARGIN: 0px 0px 0px 15px">Selling, general and administrative expenses</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">11,938</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">4,811</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">24,704</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">9,306</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td></tr>
<tr bgcolor="#cceeff">
<td valign="top">
<p style="MARGIN: 0px 0px 0px 15px">Acquisition, integration and restructuring expenses</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">181</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">77</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">221</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">100</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td></tr>
<tr bgcolor="#ffffff">
<td valign="top">
<p style="MARGIN: 0px 0px 0px 15px">Depreciation expense</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">98</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">71</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">195</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">150</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td></tr>
<tr bgcolor="#cceeff">
<td valign="top">
<p style="MARGIN: 0px 0px 0px 15px">Amortization of intangible assets</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="9%" align="right">1,394</td>
<td style="PADDING-BOTTOM: 1px" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="9%" align="right">369</td>
<td style="PADDING-BOTTOM: 1px" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="9%" align="right">2,790</td>
<td style="PADDING-BOTTOM: 1px" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="9%" align="right">738</td>
<td style="PADDING-BOTTOM: 1px" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td></tr>
<tr bgcolor="#ffffff">
<td valign="top">
<p style="MARGIN: 0px 0px 0px 0in"><b>INCOME FROM OPERATIONS</b></p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">15</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">327</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">1,490</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">804</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td></tr>
<tr bgcolor="#cceeff">
<td valign="top">
<p style="MARGIN: 0px 0px 0px 15px">Interest expense</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="9%" align="right">(2,199</td>
<td style="PADDING-BOTTOM: 1px" valign="bottom" width="1%">)</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="9%" align="right">(392</td>
<td style="PADDING-BOTTOM: 1px" valign="bottom" width="1%">)</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="9%" align="right">(5,493</td>
<td style="PADDING-BOTTOM: 1px" valign="bottom" width="1%">)</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="9%" align="right">(752</td>
<td style="PADDING-BOTTOM: 1px" valign="bottom" width="1%">)</td></tr>
<tr bgcolor="#ffffff">
<td valign="top">
<p style="MARGIN: 0px 0px 0px 0in"><b>INCOME (LOSS) BEFORE INCOME TAX PROVISION</b></p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">(2,184</td>
<td valign="bottom" width="1%">)</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">(65</td>
<td valign="bottom" width="1%">)</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">(4,003</td>
<td valign="bottom" width="1%">)</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">52</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td></tr>
<tr bgcolor="#cceeff">
<td valign="top">
<p style="MARGIN: 0px 0px 0px 15px">Provision for income tax</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="9%" align="right">(694</td>
<td style="PADDING-BOTTOM: 1px" valign="bottom" width="1%">)</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="9%" align="right">(64</td>
<td style="PADDING-BOTTOM: 1px" valign="bottom" width="1%">)</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="9%" align="right">(666</td>
<td style="PADDING-BOTTOM: 1px" valign="bottom" width="1%">)</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="9%" align="right">(130</td>
<td style="PADDING-BOTTOM: 1px" valign="bottom" width="1%">)</td></tr>
<tr bgcolor="#ffffff">
<td valign="top">
<p style="MARGIN: 0px 0px 0px 0in"><b>NET LOSS</b></p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td style="BORDER-BOTTOM: black 3px double" valign="bottom" width="1%">$</td>
<td id="ffcell" style="BORDER-BOTTOM: black 3px double" valign="bottom" width="9%" align="right">(2,878</td>
<td style="PADDING-BOTTOM: 3px" valign="bottom" width="1%">)</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td style="BORDER-BOTTOM: black 3px double" valign="bottom" width="1%">$</td>
<td id="ffcell" style="BORDER-BOTTOM: black 3px double" valign="bottom" width="9%" align="right">(129</td>
<td style="PADDING-BOTTOM: 3px" valign="bottom" width="1%">)</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td style="BORDER-BOTTOM: black 3px double" valign="bottom" width="1%">$</td>
<td id="ffcell" style="BORDER-BOTTOM: black 3px double" valign="bottom" width="9%" align="right">(4,669</td>
<td style="PADDING-BOTTOM: 3px" valign="bottom" width="1%">)</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td style="BORDER-BOTTOM: black 3px double" valign="bottom" width="1%">$</td>
<td id="ffcell" style="BORDER-BOTTOM: black 3px double" valign="bottom" width="9%" align="right">(78</td>
<td style="PADDING-BOTTOM: 3px" valign="bottom" width="1%">)</td></tr>
<tr bgcolor="#cceeff">
<td valign="top">
<p style="MARGIN: 0px 0px 0px 0in"><b>NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS</b></p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td style="BORDER-BOTTOM: black 3px double" valign="bottom" width="1%">$</td>
<td id="ffcell" style="BORDER-BOTTOM: black 3px double" valign="bottom" width="9%" align="right">(2,878</td>
<td style="PADDING-BOTTOM: 3px" valign="bottom" width="1%">)</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td style="BORDER-BOTTOM: black 3px double" valign="bottom" width="1%">$</td>
<td id="ffcell" style="BORDER-BOTTOM: black 3px double" valign="bottom" width="9%" align="right">(129</td>
<td style="PADDING-BOTTOM: 3px" valign="bottom" width="1%">)</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td style="BORDER-BOTTOM: black 3px double" valign="bottom" width="1%">$</td>
<td id="ffcell" style="BORDER-BOTTOM: black 3px double" valign="bottom" width="9%" align="right">(4,669</td>
<td style="PADDING-BOTTOM: 3px" valign="bottom" width="1%">)</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td style="BORDER-BOTTOM: black 3px double" valign="bottom" width="1%">$</td>
<td id="ffcell" style="BORDER-BOTTOM: black 3px double" valign="bottom" width="9%" align="right">(78</td>
<td style="PADDING-BOTTOM: 3px" valign="bottom" width="1%">)</td></tr>
<tr bgcolor="#ffffff">
<td>
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" valign="bottom" width="9%" align="right">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td></tr>
<tr bgcolor="#cceeff">
<td valign="top">
<p style="MARGIN: 0px 0px 0px 0in"><b>BASIC INCOME (LOSS) PER SHARE</b></p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td style="BORDER-BOTTOM: black 3px double" valign="bottom" width="1%">$</td>
<td id="ffcell" style="BORDER-BOTTOM: black 3px double" valign="bottom" width="9%" align="right">(0.28</td>
<td style="PADDING-BOTTOM: 3px" valign="bottom" width="1%">)</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td style="BORDER-BOTTOM: black 3px double" valign="bottom" width="1%">$</td>
<td id="ffcell" style="BORDER-BOTTOM: black 3px double" valign="bottom" width="9%" align="right">(0.01</td>
<td style="PADDING-BOTTOM: 3px" valign="bottom" width="1%">)</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td style="BORDER-BOTTOM: black 3px double" valign="bottom" width="1%">$</td>
<td id="ffcell" style="BORDER-BOTTOM: black 3px double" valign="bottom" width="9%" align="right">(0.46</td>
<td style="PADDING-BOTTOM: 3px" valign="bottom" width="1%">)</td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td style="BORDER-BOTTOM: black 3px double" valign="bottom" width="1%">$</td>
<td id="ffcell" style="BORDER-BOTTOM: black 3px double" valign="bottom" width="9%" align="right">(0.01</td>
<td style="PADDING-BOTTOM: 3px" valign="bottom" width="1%">)</td></tr>
<tr bgcolor="#ffffff">
<td valign="top">
<p style="MARGIN: 0px 0px 0px 0in"><b>WEIGHTED AVERAGE NUMBER OF SHARES - BASIC AND DILUTED</b></p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td style="BORDER-BOTTOM: black 3px double" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" style="BORDER-BOTTOM: black 3px double" valign="bottom" width="9%" align="right">10,426</td>
<td style="PADDING-BOTTOM: 3px" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td style="BORDER-BOTTOM: black 3px double" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" style="BORDER-BOTTOM: black 3px double" valign="bottom" width="9%" align="right">9,384</td>
<td style="PADDING-BOTTOM: 3px" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td style="BORDER-BOTTOM: black 3px double" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" style="BORDER-BOTTOM: black 3px double" valign="bottom" width="9%" align="right">10,165</td>
<td style="PADDING-BOTTOM: 3px" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td style="BORDER-BOTTOM: black 3px double" valign="bottom" width="1%">
<p style="MARGIN: 0px">&nbsp;</p></td>
<td id="ffcell" style="BORDER-BOTTOM: black 3px double" valign="bottom" width="9%" align="right">9,382</td>
<td style="PADDING-BOTTOM: 3px" valign="bottom" width="1%">
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<p style="MARGIN: 0px">&nbsp;&nbsp;</p>
<p style="MARGIN: 0px"><b>About&nbsp;GEE&nbsp;Group</b></p>
<p style="MARGIN: 0px">&nbsp;</p>
<p style="MARGIN: 0px">GEE&nbsp;Group Inc. is a provider of specialized staffing solutions and is the successor to employment offices doing business since 1893. The Company operates in two industry segments, providing professional staffing services and solutions in the information technology, engineering, finance and accounting specialties and commercial staffing services through the names of Access Data Consulting, Agile Resources, Ashley Ellis, General Employment, Omni-One, Paladin Consulting and Triad. Also, in the healthcare sector,&nbsp;GEE&nbsp;Group, through its Scribe Solutions brand, staffs medical scribes who assist physicians in emergency departments of hospitals and in medical practices by providing required documentation for patient care in connection with electronic medical records (EMR). Additionally, the Company provides contract and direct hire professional staffing services through the following SNI brands: Accounting Now&#174;, SNI Technology&#174;, Legal Now&#174;, SNI Financial&#174;, Staffing Now&#174;, SNI Energy&#174;, and SNI Certes.</p>
<p style="MARGIN: 0px">&nbsp;</p>
<p style="MARGIN: 0px"><b>Forward-Looking Statements</b></p>
<p style="MARGIN: 0px">&nbsp;</p>
<p style="MARGIN: 0px">In addition to historical information, this press release contains statements relating to the Company's future results (including certain projections, pro forma financial information, and business trends) that are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Act of 1934, as amended, (the "Exchange Act"), and are subject to the "safe harbor" created by those sections. The statements made in this press release that are not historical facts are forward-looking statements that are predictive in nature and depend upon or refer to future events. Such forward-looking statements often contain, or are prefaced by, words such as "will", "may," "plans," "expects," "anticipates," "projects," "predicts," &#8220;pro forma&#8221;, "estimates," "aims," "believes," "hopes," "potential," "intends," "suggests," "appears," "seeks," or variations of such words or similar words and expressions. Forward-looking statements are not guarantees of future performance, are based on certain assumptions, and are subject to various known risks and uncertainties, many of which are beyond the Company's control, and cannot be predicted or quantified and, consequently, as a result of a number of factors, the Company's actual results could differ materially from those expressed or implied by such forward-looking statements. Certain factors that might cause the Company's actual results to differ materially from those in the forward-looking statements include, without limitation: (i) the loss, default or bankruptcy of one or more customers; (ii) changes in general, regional, national or international economic conditions; (iii) an act of war or terrorism or cyber security breach that disrupts business; (iv) changes in the law and regulations; (v) the effect of liabilities and other claims asserted against the Company including the failure to repay indebtedness or comply with lender covenants ; (vi) changes in the size and nature of the Company's competition; (vii) the loss of one or more key executives; (viii) increased credit risk from customers; (ix) the Company's failure to grow internally or by acquisition or the failure to successfully integrate acquisitions; (x) the Company's failure to improve operating margins and realize cost efficiencies and economies of scale ; (xi) the Company's failure to attract, hire and retain quality recruiters, account managers and salesmen; (xii) the Company's failure to recruit qualified candidates to place at customers for contract or full-time hire; and such other factors as set forth under the heading "Forward-Looking Statements" in the Company's annual reports on Form 10-K, its quarterly reports on Form 10-Q and in the Company's other filings with the Securities and Exchange Commission (SEC). More detailed information about the Company and the risk factors that may affect the realization of forward-looking statements is set forth in the Company's filings with the SEC. Investors and security holders are urged to read these documents free of charge on the SEC's web site at&nbsp;http://www.sec.gov. The Company is under no obligation to (and expressly disclaims any such obligation to) and does not intend to publicly update, revise or alter its forward-looking statements whether as a result of new information, future events or otherwise.</p>
<p style="MARGIN: 0px">&nbsp;</p>
<p style="MARGIN: 0px"><b>Contact:</b></p>GEE Group Inc.
<p style="MARGIN: 0px">Andrew J. Norstrud</p>
<p style="MARGIN: 0px">813.803.8275</p>invest@genp.com
<p style="MARGIN: 0px">&nbsp;</p>
<p style="MARGIN: 0px">SOURCE:&nbsp;GEE Group Inc.</p>
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