Financial Analysis

"4. Business Acquisition On January 3, 2025, the Company entered into a Stock Purchase Agreement (the Purchase Agreement) with Hornet Staffing, Inc., a Georgia corporation (Hornet) and its shareholders, and purchased 100 shares of its capital stock which represents 100% of the ownership interest in Hornet. Hornet is an Atlanta-based provider of staff augmentation services with national service capability. Hornet provides staffing solutions to many markets serving large scale, ""blue chip"" companies in the information technology (""IT""), professional and customer service staffing verticals. The total consideration paid for the purchased shares was $1,500, consisting of (i) a $1,100 cash payment, and (ii) the issuance to its former shareholders of subordinated and unsecured promissory notes (the ""Promissory Notes"") totaling an aggregate initial principal amount of $400. Interest on the outstanding principal balances of the Promissory Notes is payable at a fixed rate of 5% per annum. Payments on the Promissory Notes shall be made annually with the first payment due on the first anniversary of the issuance dates and the second and final payment due on the second anniversary of the issuance date. The Company also paid legal and professional fees of $111 related to the purchase during fiscal 2025, which are included in selling, general and administrative expenses in the consolidated statements of operations. The Purchase Agreement also provides that for the initial two-year per …

BusinessCombinationDisclosureTextBlock · excerpt; the full note is in the filing

13. Commitments and Contingencies Litigation and Claims The Company and its subsidiaries are involved in litigation that arises in the ordinary course of business. There are no pending significant legal proceedings to which the Company is a party for which management believes the ultimate outcome would have a material adverse effect on the Companys financial position. Indemnification Agreements On April 27, 2023, the Company entered into Indemnification Agreements with certain of its officers and members of the Board to provide for indemnification of each individual in their respective capacities as officers and members of the Board of the Company to the fullest extent permitted under the Companys Amended and Restated Articles of Incorporation, Amended and Restated Bylaws, and the Illinois Business Corporation Act. The Company carries directors and officers liability insurance, which is intended to provide protection for potential claims against the Companys directors and officers. Management is not aware of any matters or circumstances under which potential liability arising from these agreements would be material to the consolidated financial statements. …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

8 . Goodwill and Intangible Assets Goodwill For purposes of performing its annual goodwill impairment assessments as of September 30, 2025 and 2024, the Company applied the valuation techniques and assumptions to its Professional Segment reporting unit as discussed in Note 2, above; and also considered recent trends in the Companys stock price, implied control or acquisition premiums, earnings, and other possible factors and their effects on estimated fair value of the Companys reporting unit. The Company completed its most recent annual goodwill impairment assessment as of September 30, 2025 and determined that its goodwill was not further impaired. Prior to this, as of March 31, 2025, an interim assessment was performed as the estimated fair value of the Professional Services reporting unit was determined to have decreased and indicated that the reporting units carrying value exceeded its estimated fair value. As a result, a non-cash goodwill impairment charge of $22,000 was recognized during fiscal 2025, as determined by the interim evaluation made of our goodwill as of March 31, 2025. Upon completion of the prior annual goodwill impairment assessment as of September 30, 2024, it was determined that the Companys goodwill was not further impaired. In fiscal 2024, an interim assessment was also performed due to the decline in operating results and market capitalization experienced during the year which, in managements view, represented one or more triggering events that coul …

GoodwillAndIntangibleAssetsDisclosureTextBlock · excerpt; the full note is in the filing

12. Income Taxes The components of the provision for income taxes is as follows: Year Ended September 30, 2025 2024 Current expense (benefit): Federal $ - $ - State (5 ) (123 ) Total current expense (benefit): $ (5 ) $ (123 ) Deferred expense (benefit): Federal $ (1,981 ) $ (3,027 ) State (390 ) (262 ) Total deferred expense (benefit): $ (2,371 ) $ (3,289 ) Change in valuation allowance: Federal $ 10,990 $ - State 974 793 Total change in valuation allowance: $ 11,964 $ 793 Provision for income tax expense (benefit) $ 9,588 $ (2,619 ) A reconciliation of the Companys statutory income tax rate to the Companys effective income tax rate is as follows: Year Ended September 30, 2025 2024 Income at US statutory rate $ (5,263 ) $ (5,484 ) State taxes, net of federal benefit (394 ) (366 ) Tax credits (46 ) (50 ) Stock compensation 323 24 Goodwill impairment 2,906 2,377 Valuation allowance 11,964 793 Other 98 87 Total income tax expense (benefit): $ 9,588 $ (2,619 ) The net deferred income tax asset (liability) balance related to the following: September 30, 2025 September 30, 2024 Net operating loss carryforwards $ 7,045 $ 5,823 Stock options 1,520 1,770 Allowance for credit losses 31 57 Accrued and prepaid expenses 326 448 Tax credit carryforwards 1,258 1,212 Right-of-use liabilities 622 746 Interest 2,996 3,088 Depreciation 33 16 Other - 6 Total deferred tax assets $ 13,831 $ 13,166 Intangible assets $ (797 ) $ (2,329 ) Right-of-use assets (519 ) (679 ) Other (20 ) - Total deferred …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

7. Leases The Company occasionally acquires equipment under finance leases including hardware and software used by our IT department to improve security and capacity, and certain furniture for our offices. Terms for these leases generally range from two to six years. The assets obtained under finance leases are included in property and equipment, net, on the consolidated balance sheets. Finance lease expenses such as amortization of the lease assets and interest expense on the lease liabilities are included on the consolidated statements of operations in depreciation expense and interest expense, respectively. Supplemental information related to these expenses consisted of the following: Fiscal 2025 Fiscal 2024 Amortization of finance lease assets $ 89 $ 95 Interest on finance lease liabilities 7 18 Supplemental balance sheet information related to finance leases consisted of the following: September 30, 2025 September 30, 2024 Net book value of finance lease assets $ 113 $ 202 Weighted average remaining lease term for finance leases 1.2 years 2.2 years Weighted average discount rate for finance leases 5.3% 5.3% The table below reconciles the undiscounted future minimum lease payments under non-cancelable finance lease agreements to the total finance lease liabilities recognized on the consolidated balance sheets, included in other current liabilities and other long-term liabilities, as of September 30, 2025: Fiscal 2026 $ 73 Fiscal 2027 12 Less: Imputed interest (3 ) Present …

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14. Related Party Transactions On January 3, 2025, the Company entered into an employment agreement with Lawrence Bruce, one of the former shareholders of Hornet. As part of the Purchase Agreement, the Company issued Promissory Notes to Lawrence Bruce and his spouse, Laurel Bruce, in the amounts of $160 and $240, representing their respective portions of this purchase consideration based on their percentage of Hornets stock ownership prior to the acquisition. The Promissory Notes have certain contingencies as disclosed under Note 4. …

RelatedPartyTransactionsDisclosureTextBlock · excerpt; the full note is in the filing

16. Segment Data The Company provides the following distinctive services: (a) direct hire placement services and (b) temporary professional staffing services in the fields of information technology, accounting, finance and office, engineering, and medical. These services make up the Companys Professional Segment. As disclosed in Note 5, the Companys Industrial Segment has been deemed a discontinued operation and, as such, is excluded from the table below which only reflects continuing operations. The results of the Professional Segment are assessed by the Companys chief operating decision-maker (CODM), our CEO, who decides how to allocate resources based on the segments income (loss) from operations. The CODM uses growth trends in both revenues and income (loss) from operations to compare the segments results to those of competitors as benchmarks. Additionally, the CODM reviews trends in revenues with reference to projected market conditions as provided by SIA in their quarterly and annual reports. These analyses provide the CODM with information needed to make decisions on capital use such as reinvesting into the Professional Segment or seeking acquisitions. Year Ended September 30, 2025 2024 Net revenues $ 96,504 $ 106,936 Cost of contract services 63,132 70,794 Personnel expenses 22,381 25,334 Occupancy expenses 1,689 1,973 Advertising expenses 1,848 2,021 Other segment expenses (a) 3,430 3,664 Depreciation and amortization 969 2,513 Intangible assets impairment charges - …

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"2. Significant Accounting Policies and Estimates Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) for financial information and with the instructions to Article 8 of Regulation S-X. Certain reclassifications have been made to the prior years consolidated financial statements and/or related disclosures to conform to the current years presentation. Principles of Consolidation The consolidated financial statements include the accounts and transactions of the Company and its wholly owned subsidiaries. All significant inter-company accounts and transactions are eliminated in consolidation. Use of Estimates The preparation of consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Cash and Cash Equivalents Highly liquid investments with a maturity of three months or less when purchased are considered to be cash equivalents. As of September 30, 2025, and September 30, 2024, there were no cash equivalents. Cash deposit accounts are maintained at financial institutions and, at times, balances may exceed federally ins …

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11. Shareholders Equity (Share-based Compensation and Share Repurchase Program) Preferred Stock The Company has authorized 20,000 shares of preferred stock of which 1,000 shares have been designated Series A Preferred Stock, and no shares were issued or are outstanding; 5,950 shares have been designated Series B Preferred Stock, of which 5,926 shares were issued and none remain outstanding, and 3,000 shares have been designated Series C Preferred Stock, of which 2,093 shares were issued and none remained outstanding as of September 30, 2025 and 2024. Based on the terms of the Series B Convertible Preferred Stock, if certain fundamental transactions were to occur, the Series B Convertible Preferred Stock would require redemption, which would preclude permanent equity classification on the accompanying consolidated balance sheets. The Series C Convertible Preferred Stock has a Liquidation Value equal to $1.00 per share and ranks pari passu with the Companys Series B Convertible Preferred Stock and senior to all Junior Securities (including the Companys Common Stock) with respect to any distribution of assets upon liquidation, dissolution or winding up of the Company, whether voluntary or involuntary. Amended and Restated 2013 Incentive Stock Plan, as amended As of September 30, 2025, there were vested and unvested shares of restricted stock and stock options outstanding under the Companys Amended and Restated 2013 Incentive Stock Plan, as amended (Incentive Stock Plan). The Inc …

StockholdersEquityNoteDisclosureTextBlock · excerpt; the full note is in the filing