10-K

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Non-accelerated filer

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General Employment Enterprises, Inc.

By:
Name:		Andrew Norstrud
Title:		Chief Executive Officer

Goodwill and Intangible Assets - Schedule of Finite-Lived Intangible Assets (Detail) (USD $)
In Thousands, unless otherwise specified

Income Taxes - Schedule of Deferred Income Tax Assets (Detail) (USD $)

Stock Option Plans - Additional Information (Detail) (USD $)

Income Taxes - Additional Information (Detail) (USD $)

Common Stock - Additional Information (Detail) (USD $)

Significant Accounting Policies and Estimates - Additional Information (Detail) (USD $)

- Definition

Securities (including those issuable pursuant to contingent stock agreements) that could potentially dilute basic earnings per share (EPS) or earnings per unit (EPU) in the future that were not included in the computation of diluted EPS or EPU because to do so would increase EPS or EPU amounts or decrease loss per share or unit amounts for the period presented.

+ References+ Details

Leases - Additional Information (Detail) (USD $)

Goodwill and Intangible Assets (Tables)

Intangible Assets

As of September 30, 2014


(In Thousands)	Cost		Accumulated Amortization		Loss on Impairment of Intangible Assets		Net Book Value

Customer Relationships	$	2,690	$	1,137	$	—	$	1,553
Trade Name		17		10		—		7


	$	2,707	$	1,147	$	—	$	1,560

As of September 30, 2013


(In Thousands)	Cost		Accumulated Amortization		Loss on Impairment of Intangible Assets		Net Book Value

Customer Relationships	$	2,690	$	816	$	—	$	1,874
Trade Name		17		7		—		10


	$	2,707	$	823	$	—	$	1,884

Stock Option Plans - Schedule of Stock Options Outstanding (Detail) (USD $)
In Thousands, except Per Share data, unless otherwise specified

Convertible Note - Summary of Convertible Note (Detail) (USD $)

Property and Equipment - Additional Information (Detail) (USD $)

- Definition

Amount equal to the present value (the principal) at the beginning of the lease term of minimum lease payments during the lease term (excluding that portion of the payments representing executory costs such as insurance, maintenance, and taxes to be paid by the lessor, together with any profit thereon) net of payments or other amounts applied to the principal, through the balance sheet date and due to be paid more than one year (or one operating cycle, if longer) after the balance sheet date.

+ References+ Details

Income Taxes - Schedule of Components of the Provision for Income Taxes (Detail) (USD $)
In Thousands, unless otherwise specified

- Definition

Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations.

+ References+ Details

- Definition

Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations.

+ References+ Details

Related Party Transactions - Additional Information (Detail) (USD $)

Common Stock - Summary of Warrants (Detail) (USD $)
In Thousands, except Per Share data, unless otherwise specified

Property and Equipment

3. Property and Equipment

Property and equipment consisted of the following as of September 30:


(In thousands)	Useful Lives	2014			2013

Computer software	5 years	$	1,447		$	1,447
Office equipment, furniture and fixtures and leasehold improvements	2 to 10 years		1,413			2,325

Total property and equipment, at cost			2,860			3,772
Accumulated depreciation and amortization			(2,407	)		(3,242	)

Property and equipment, net		$	453		$	530

Disposals of property and equipment, consisting primarily of fully-depreciated office furniture, a vehicle and equipment, had an original cost of approximately $49,000 and $28,000 in fiscal 2014 and 2013, respectively. Leasehold improvements are amortized over the term of the lease.

During the year ended September 30, 2013, the Company sold vehicles with a value of approximately $225,000 and leased them back under a 30 month agreement at an interest rate of approximately 23%. At September 30, 2014, approximately $72,000 is current and included in other current liabilities and approximately $7,000 is included in other long term liabilities.

Depreciation expense for the year ended September 30, 2014 and 2013 was approximately $174,000 and $165,000, respectively.

- Definition

The entire disclosure for long-lived, physical assets used in the normal conduct of business and not intended for resale. Includes, but is not limited to, accounting policies and methodology, roll forwards, depreciation, depletion and amortization expense, including composite depreciation, accumulated depreciation, depletion and amortization expense, useful lives and method used, income statement disclosures, assets held for sale and public utility disclosures.

+ References+ Details

Subsequent Events - Additional Information (Detail) (Subsequent Event [Member], USD $)

Subsequent Event [Member]

Convertible Note - Summary of Change of Derivative Liability (Detail) (USD $)

Stock Option Plans (Tables)

A summary of stock option activity is as follows:


	Year Ended September 30,
(Number of Options in Thousands)	2014			2013

Number of options outstanding:
Beginning of year		1,478			1,747
Granted		2,595			108
Exercised		—			—
Terminated		(654	)		(377	)


End of year		3,419			1,478


Number of options exercisable at end of year		1,470			1,418
Number of options available for grant at end of year		7,408			10,000

Weighted average option prices per share:
Granted during the year	$	.28		$	.49
Exercised during the year		—			—
Terminated during the year		.42			.40
Outstanding at end of year		.32			.40
Exercisable at end of year		.38			.41

Stock options outstanding as of September 30, 2014 were as follows (number of options in thousands):


Range of Exercise Prices	Number Outstanding		Weighted Average Price		Number Exercisable		Weighted Average Price		Average Remaining Life (Years)

Under $1.00		3,404	$	0.32		1,455	$	0.38		8.5
$1.01 to 2.39		15	$	2.39		15	$	2.39		3

The average fair value of stock options granted was estimated to be $0.21 per share in fiscal 2014 and $0.43 per share in fiscal 2013. This estimate was made using the Black-Scholes option pricing model and the following weighted average assumptions:


	2014			2013

Expected option life (years)		9		10
Expected stock price volatility		95	%	94%
Expected dividend yield		—	%	— %
Risk-free interest rate		2.75	%	2.64% to 1.86%

Common Stock (Tables)

Warrants


(Number of Warrants in Thousands)	Number of Shares		Exercise Price		Expiration
Outstanding at September 30, 2013		—

Warrants Granted
Aracle Warrants		1,500	$	0.25		3/31/2018
Brio Warrants		2,372	$	0.25		2/07/2020


Outstanding at September 30, 2014		3,872

Contingencies and Commitments - Additional Information (Detail) (USD $)

Other Current Liabilities - Other Current Liabilities (Detail) (USD $)
In Thousands, unless otherwise specified

Income Taxes (Tables)

The components of the provision for income taxes are as follows:


	Year Ending September 30,
(In Thousands)	2014		2013

Current tax provision	$	24	$	8
Deferred tax provision		—		—


Provision for income taxes	$	24	$	8

The differences between income taxes calculated at the statutory U.S. federal income tax rate and the Company’s provision for income taxes are as follows:


	Year Ended September 30,
(In Thousands)	2014			2013

Income tax provision at statutory federal tax rate	$	32		$	22
Valuation allowance		(8	)		(14	)


Provision for income taxes	$	24		$	8

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


	Year Ended September 30,
(In Thousands)	2014			2013

Temporary differences
Stock option expense	$	461		$	326
Deferred compensation expense		24			(59	)
Vacation expense		64			69
Intangible assets		107			107
Allowance for doubtful accounts		208			74
Other		5			(49	)
Net operating loss carryforwards		4,956			4,292
Valuation allowances		(5,825	)		(4,760	)


Net deferred income tax asset	$	—		$	—

Segment Data (Tables)

Unallocated Corporate expenses primarily include, corporate legal expenses, consulting expenses, audit fees, corporate rent and facility costs, board fees and interest expense.


	Fiscal Year Ended
	September 30,
(In Thousands)	2014			2013

Direct Hire Placement Services
Revenue	$	7,088		$	7,317
Placement services gross margin		100	%		100	%
Operating loss		(983	)		(700	)
Depreciation & amortization		230			224
Accounts receivable – net		805			625
Intangible assets		228			347
Goodwill		24			24
Total assets		2,285			4,810

Contract Staffing Services
Industrial services revenue	$	25,031		$	29,816
Professional services revenue		7,692			9,371
Industrial services gross margin		15.60	%		12.61	%
Professional services gross margin		31.10	%		33.19	%
Operating income	$	1,159		$	890
Depreciation and amortization		268			261
Accounts receivable – industrial services		3,318			4,778
Accounts receivable – professional services		784			1,294
Intangible assets		1,332			1,537
Goodwill		1,082			1,082
Total assets	$	7,559		$	6,184

Unallocated Expenses
Corporate administrative expenses	$	541		$	1,160
Corporate facility expenses		160			247
Board related expenses		93			98
Interest expense		507			251

Total unallocated expenses	$	1,301		$	1,756


Consolidated
Total revenue	$	39,811		$	46,504
Operating loss		(1,125	)		(1,566	)
Depreciation and amortization		498			485
Total accounts receivables – net		4,907			6,697
Intangible assets		1,560			1,884
Goodwill		1,106			1,106
Assets from continuing operations		9,844			10,994
Assets from discontinued operations		0			238
Total assets	$	9,844		$	11,232

Significant Accounting Policies and Estimates

2. Significant Accounting Policies and Estimates

Basis of Presentation

The consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America and the rules of the United States Securities and Exchange Commission.

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.

Estimates and Assumptions

Management makes estimates and assumptions that can affect the amounts of assets and liabilities reported as of the date of the condensed consolidated financial statements, as well as the amounts of reported revenues and expenses during the periods presented. Those estimates and assumptions typically involve expectations about events to occur subsequent to the balance sheet date, and it is possible that actual results could ultimately differ from the estimates. If differences were to occur in a subsequent period, the Company would recognize those differences when they became known. Significant matters requiring the use of estimates and assumptions include, but may not be limited to, deferred income tax valuation allowances, accounts receivable allowances, accounting for acquisitions, accounting for derivatives and evaluation of impairment. Management believes that its estimates and assumptions are reasonable, based on information that is available at the time they are made.

Revenue Recognition

Direct hire placement service revenues are recognized when applicants accept offers of employment, less a provision for estimated losses due to applicants not remaining employed for the Company’s guarantee period. Contract staffing service revenues are recognized when services are rendered.

The provision for falloffs and refunds, which is reflected in the consolidated statements of operations as a reduction of placement service revenues, was $939,000 in fiscal 2014 and $969,000 in fiscal 2013.

Cost of Contract Staffing Services

The cost of contract services includes the wages and the related payroll taxes and employee benefits of the Company’s employees while they work on contract assignments.

Cash and Cash Equivalents

Highly liquid investments with a maturity of three months or less when purchased are considered to be cash equivalents. At September 30, 2014, and September 30, 2013, there were no cash equivalents. The Company maintains deposits in financial institutions in excess of amounts guaranteed by the Federal Deposit Insurance Corporation. Cash and cash equivalents are maintained at financial institutions and, at times, balances may exceed federally insured limits. We have never experienced any losses related to these balances. Beginning 2013, insurance coverage reverted to $250,000 per depositor at each financial institution, and our non-interest bearing cash balances may again exceed federally insured limits.

Accounts Receivable

The Company extends credit to its various customers based on evaluation of the customer’s financial condition and ability to pay the Company in accordance with the payment terms. An allowance for placement fall-offs is recorded, as a reduction of revenues, for estimated losses due to applicants not remaining employed for the Company’s guarantee period. An allowance for doubtful accounts is recorded, as a charge to bad debt expense, where collection is considered to be doubtful due to credit issues. These allowances together reflect management’s estimate of the potential losses inherent in the accounts receivable balances, based on historical loss statistics and known factors impacting its customers. The nature of the contract service business, where companies are dependent on employees for the production cycle allows for a small accounts receivable allowance. Based on management’s review of accounts receivable, an allowance for doubtful accounts of approximately $395,000 and $272,000 is considered necessary as of September 30, 2014, and September 30, 2013, respectively. The Company charges uncollectible accounts against the allowance once the invoices are deemed unlikely to be collectible. Based on management’s review of accounts receivables related to discontinued operations, an allowance of approximately $265,000 and $35,000 are considered necessary as of September 30, 2014 and September 30, 2013, respectively.

Property and Equipment

Property and equipment are recorded at cost. Depreciation expense is calculated on a straight-line basis over estimated useful lives of five years for computer equipment and two to ten years for office equipment, furniture and fixtures. The Company capitalizes computer software purchased or developed for internal use and amortizes it over an estimated useful life of five years. The carrying value of property and equipment is reviewed for impairment whenever events or changes in circumstances indicate that it may not be recoverable. If the carrying amount of an asset group is greater than its estimated future undiscounted cash flows, the carrying value is written down to the estimated fair value. There was no impairment of property and equipment for the years ended September 30, 2014 and 2013. For property and equipment included in current asset of discontinued operations in the accompanying balance sheet the Company has ceased recording depreciation expense.

Goodwill

Goodwill represents the excess of cost over the fair value of the net assets acquired in the acquisitions of DMCC Staffing, LLC, RFFG of Cleveland, LLC, and Ashley Ellis, LLC (“Ashley Ellis”). The Company assesses goodwill for impairment at least annually. Testing Goodwill for Impairment, which allows the Company to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the entity determines that this threshold is not met, then performing the two-step impairment test is unnecessary. An impairment loss would be recognized to the extent the carrying value of goodwill exceeds its implied fair value.

Fair Value Measurement

The Company follows the provisions of the accounting standard which defines fair value, establishes a framework for measuring fair value and enhances fair value measurement disclosure. Under these provisions, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the “exit price”) in an orderly transaction between market participants at the measurement date.

The standard establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use on unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is described below:

Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.

Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data.

Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs.

The fair value of the Company’s current assets and current liabilities, excluding the derivative liability, approximate their carrying values due to their short term nature. The carrying value of the Company’s long-term liabilities and the derivative liability represents their fair value based on level 3 inputs, as discussed in Notes 6 and 8. The Company’s goodwill and other intangible assets are measured at fair value on a non-recurring basis using level 3 inputs, as discussed in Note 4.

Derivative Financial Instruments

The Company does not use derivative instruments to hedge exposure to cash flow, market or foreign currency risk. Terms of convertible promissory note instruments are reviewed to determine whether or not they contain embedded derivative instruments that are required under ASC 815 “Derivative and Hedging” (ASC 815) to be accounted for separately from the host contract, and recorded on the balance sheet at fair value. The fair value of derivative liabilities, if any, is required to be revalued at each reporting date, with corresponding changes in fair value recorded in current period operating results.

Freestanding warrants issued by the Company in connection with the issuance or sale of debt and equity instruments are considered to be derivative instruments and are evaluated and accounted for in accordance with the provisions of ASC 815. Pursuant to ASC 815, an evaluation of specifically identified conditions is made to determine whether fair value of warrants issued is required to be classified as equity or as a derivative liability.

Earnings (loss) per Share

Basic income (loss) per share is computed by dividing net income (loss) attributable to common stockholders by the weighted average common shares outstanding for the period. Diluted income (loss) per share is computed giving effect to all potentially dilutive common shares. Potentially dilutive common shares may consist of incremental shares issuable upon the exercise of stock options and warrants and the conversion of notes payable to common stock. In periods in which a net loss has been incurred, all potentially dilutive common shares are considered anti-dilutive and thus are excluded from the calculation. Common share equivalents of approximately 468,000 and 47,000 were excluded from the computation of diluted earnings per share for the years ended September 30, 2014 and 2013, respectively, because their effect is anti-dilutive.

Reclassification

Certain reclassifications have been made to the financial statements as of and for the year ended September 30, 2013 to conform to the presentation as of and for the year ended September 30, 2014.

Advertising Expenses

The majority of the Company’s advertising expense budget is used to support the Company’s business. Most of the advertisements are in print or internet media, with expenses recorded as they are incurred. For the years ended September 30, 2014 and 2013, included in selling, general and administrative expenses was advertising expense totaling approximately $718,000 and $733,000, respectively.

Intangible Assets

Customer lists, non-compete agreements, customer relationships, management agreements and trade names were recorded at their estimated fair value at the date of acquisition and are amortized over their estimated useful lives ranging from two to ten years using both accelerated and straight-line methods.

Impairment of Long-lived Assets

The Company records an impairment of long-lived assets used in operations, other than goodwill, when events or circumstances indicate that the asset might be impaired and the estimated undiscounted cash flows to be generated by those assets over their remaining lives are less than the carrying amount of those items. The net carrying value of assets not recoverable is reduced to fair value, which is typically calculated using the discounted cash flow method.

Stock-Based Compensation

The Company accounts for stock-based awards to employees in accordance with applicable accounting principles, which requires compensation expense related to share-based transactions, including employee stock options, to be measured and recognized in the financial statements based on a determination of the fair value of the stock options. The grant date fair value is determined using the Black-Scholes-Merton (“Black-Scholes”) pricing model. For all employee stock options, we recognize expense over the requisite service period on an accelerated basis over the employee’s requisite service period (generally the vesting period of the equity grant). The Company’s option pricing model requires the input of highly subjective assumptions, including the expected stock price volatility, expected term, and forfeiture rate. Any changes in these highly subjective assumptions significantly impact stock-based compensation expense.

Options awarded to purchase shares of common stock issued to non-employees in exchange for services are accounted for as variable awards in accordance with applicable accounting principles. Such options are valued using the Black-Scholes option pricing model.

See Note 9 for the assumptions used to calculate the fair value of stock-based employee and non-employee compensation. Upon the exercise of options, it is the Company’s policy to issue new shares rather than utilizing treasury shares.

Income Taxes

We record a provision for income taxes for the anticipated tax consequences of the reported results of operations using the asset and liability method. Under this method, we recognize deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial reporting and tax basis of assets and liabilities, as well as for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using the tax rates that are expected to apply to taxable income for the years in which those tax assets and liabilities are expected to be realized or settled. We record a valuation allowance to reduce our deferred tax assets to the net amount that we believe is more likely than not to be realized.

Due to the private sale of shares of common stock to LEED HR during fiscal 2012 and the resulting change in control, the Company may be limited by Section 382 of the Internal Revenue Code as to the amount of net operating losses that may be used in future years.

We recognize tax benefits from uncertain tax positions only if we believe that it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. Although we believe that we have adequately reserved for our uncertain tax positions, we can provide no assurance that the final tax outcome of these matters will not be materially different. We make adjustments to these reserves when facts and circumstances change, such as the closing of a tax audit or the refinement of an estimate. To the extent that the final tax outcome of these matters is different than the amounts recorded, such differences will affect the provision for income taxes in the period in which such determination is made and could have a material impact on our financial condition and operating results.

Discontinued Operations

A discontinued operation is a component of an entity that has either been disposed of or that is classified as held for sale, which represents a separate major line of business or geographical area of operations and is part of a single coordinated plan to dispose of a separate line of business or geographical area of operations. In accordance with the rules regarding the presentation of discontinued operations, the assets, liabilities and activity of our agricultural business have been reclassified as a discontinued operation for all periods presented.

Segment Data

The Company has two operating business segments a) Contract staffing services, and b) Direct hire placement. These operating segments were determined based primarily on how the chief operating decision maker views and evaluates our operations. Operating results are regularly reviewed by the chief operating decision maker to make decisions about resources to be allocated to the segment and to assess its performance. Other factors, including type of business, type of employee, length of employment and revenue recognition are considered in determining these operating segments.

Recent Accounting Pronouncements

In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers,” which supersedes or replaces nearly all GAAP revenue recognition guidance. The new guidance establishes a new control-based revenue recognition model, changes the basis for deciding when revenue is recognized over time or at a point in time and will expand disclosures about revenue. ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2016 and interim periods within those years. Early adoption is not permitted. The Company is currently assessing the impact of ASU 2014-09.

In August 2014, the FASB issued Accounting Standards Update 2014–15 (“ASU 2014-15), “Presentation of Financial Statements – Going Concern (Subtopic 205 – 40): Disclosure of Uncertainties About an Entity’s Ability to Continue as a Going Concern.” ASU 2014-15 requires management to evaluate whether there are conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern, and to provide certain disclosures when it is probable that the entity will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued. ASU 2014-15 is effective for the annual period ended December 31, 2016 and for annual periods and interim periods thereafter with early adoption permitted. The Company does not expect this ASU to have a significant impact on its financial position or results of operations.

In November 2014, FASB issued ASU No. 2014-17, Business Combinations (Topic 805): Pushdown Accounting (a consensus of the FASB Emerging Issues Task Force. The amendments in this Update provide an acquired entity with an option to apply pushdown accounting in its separate financial statements upon occurrence of an event in which an acquirer obtains control of the acquired entity. An acquired entity may elect the option to apply pushdown accounting in the reporting period in which the change-in-control event occurs. An acquired entity should determine whether to elect to apply pushdown accounting for each individual change-in-control event in which an acquirer obtains control of the acquired entity. If pushdown accounting is not applied in the reporting period in which the change-in-control event occurs, an acquired entity will have the option to elect to apply pushdown accounting in a subsequent reporting period to the acquired entity’s most recent change-in-control event. An election to apply pushdown accounting in a reporting period after the reporting period in which the change-in-control event occurred should be considered a change in accounting principle in accordance with Topic 250, Accounting Changes and Error Corrections. If pushdown accounting is applied to an individual change-in-control event, that election is irrevocable. The amendments in this Accounting Standards Update are effective on November 18, 2014. After the effective date, an acquired entity can make an election to apply the guidance to future change-in-control events or to its most recent change-in-control event. However, if the financial statements for the period in which the most recent change-in-control event occurred already have been issued or made available to be issued, the application of this guidance would be a change in accounting principle. The adoption of ASU 2014-17 did not have a material impact on the Company’s consolidated financial statements.

Other recent accounting pronouncements issued by FASB and the SEC did not or are not believed by management to have a material impact on the Company’s present or future financial statements.

Discontinued Operations (Tables)


	Years Ended
	September 30,
(In Thousands)	2014			2013

Discontinued Operations
Agricultural services revenue – net	$	—		$	6,801
Agricultural services gross margin		—			3.3	%
Agricultural services net loss		(230	)		(324	)
Accounts receivable net – Agricultural services		—			238
A Fixed assets – Agricultural services		—			—
Total assets – Agricultural services		—			238
Total liabilities – Agricultural services	$	—		$	30

Short-term Debt - Additional Information (Detail) (USD $)

Income Taxes - Schedule of Provision for Income Taxes (Detail) (USD $)
In Thousands, unless otherwise specified

Consolidated Balance Sheets (USD $)
In Thousands, unless otherwise specified

Long-Term Liabilities - Additional Information (Detail) (Former CEO [Member], USD $)

Consolidated Statements of Cash Flows (USD $)
In Thousands, unless otherwise specified

Discontinued Operations - Additional Information (Detail) (USD $)

Significant Accounting Policies and Estimates (Intangible Assets) - Additional Information (Detail) (Finite-Lived Intangible Assets [Member])

Subsequent Events

17. Subsequent Events

On November 14, 2014, the Company entered into a Securities Purchase Agreement, with 16 individuals who collectively have subscribed to purchase a total of 200,000 shares of Preferred Stock from the Company for a total purchase price of $2,000,000. The purchase price is being held in escrow pending a closing of the transactions set forth in the Agreement. The net proceeds to the Company from the offering will be approximately $2,000,000, with approximately $1,000,000 to be used as working capital and the remaining $1,000,000 for marketing, acquisitions, expansion and to further the operations of the Company. The Preferred Stock was designated by the Company on December 15, 2014 through the filing of a Certificate of Designation of Series A Convertible Preferred Stock with the Illinois Secretary of State. Each share of Preferred Stock is initially convertible, at the election of the holder, into 50 shares of the Company’s Common Stock. The foregoing conversion ratio is subject to standard adjustment mechanisms, as set forth in the Designation. The Company expects to close this offering in early January, 2015.

Property and Equipment - Schedule of Property and Equipment (Detail) (USD $)
In Thousands, unless otherwise specified

Property and Equipment (Tables)

Property and equipment consisted of the following as of September 30:


(In thousands)	Useful Lives	2014			2013

Computer software	5 years	$	1,447		$	1,447
Office equipment, furniture and fixtures and leasehold improvements	2 to 10 years		1,413			2,325

Total property and equipment, at cost			2,860			3,772
Accumulated depreciation and amortization			(2,407	)		(3,242	)

Property and equipment, net		$	453		$	530

Description of Business

1. Description of Business

General Employment Enterprises, Inc. (the “Company”, “us”, “our” or “we”) was incorporated in the State of Illinois in 1962 and is the successor to employment offices doing business since 1893 and provides staffing services through a network of branch offices located in major metropolitan areas throughout the United States. The Company’s professional staffing services provide information technology, engineering and accounting professionals to clients on either a regular placement basis or a temporary contract basis. The Company’s agricultural staffing services provided agricultural workers for farms and groves, until July 7, 2013, when the Company ceased operations within its Agricultural Division, terminated all the division’s employees and began the process of liquidating all assets of this Division. The Company’s industrial staffing business provides weekly temporary staffing for light industrial clients in Ohio and Pennsylvania.

The Company has experienced significant losses in the past. Management has implemented a strategy which included cost reduction efforts, closure of the Agricultural Division as well as identifying strategic acquisitions, financed primarily through the issuance of stock and convertible debt, to improve the overall profitability and cash flows of the Company. The Company entered into a three year revolving credit agreement with ACF Finco I LP (formerly Keltic) to provide working capital financing. The agreement allows ACF Finco I LP to advance the Company funds based on a percentage of eligible invoices. Management believes with current cash flow from operations, the preferred offering and the availability under the ACF Finco I LP loan agreement, the Company will have sufficient liquidity for the next 12 months.

Consolidated Balance Sheets (Parenthetical) (USD $)
In Thousands, except Share data, unless otherwise specified

Contingencies and Commitments

12. Contingencies and Commitments

On April 22, 2013, the Company finalized an Amendment to the Asset Purchase Agreement by and among DMCC Staffing, LLC, an Ohio limited liability company, RFFG of Cleveland, LLC an Ohio limited liability company (each a “Seller” and together, “Sellers”), the Company, and Triad Personnel Services, Inc., an Illinois corporation and wholly owned subsidiary of the Company.

The Company agreed to pay Sellers additional cash consideration of between $550,000 and $650,000 depending on the length of payments and 1,100,000 shares of common stock, in full satisfaction of all amounts owed to Seller, related to the Asset Purchase Agreement. The Company issued 1,100,000 shares of common stock on July 2, 2013, which was valued at approximately $330,000. During the year ended September 30, 2013, the Company paid $200,000 of the cash consideration noted above. The Company has accrued $350,000, which is included in other current liabilities on the consolidated balance sheet at September 30, 2013, for the liability, however has elected to pay the remaining amount over two years. The total payments will be approximately $450,000 with additional $100,000 to be recorded as interest expense. During the year ended September 30, 2014, the Company paid approximately $225,000 to the Sellers, $150,000 of principle and approximately $75,000 of interest. The Company had approximately $200,000 accrued at September 30, 2014 related to the remaining liability.

During 2013, the Company sold vehicles with a value of approximately $225,000 and leased them back under a 30 month agreement at an interest rate of approximately 23%. At September 30, 2014, approximately $72,000 is included in other current liabilities and approximately $7,000 in other long term liabilities.

Document and Entity Information (USD $)

13. Leases

The Company leases space for all of its branch offices, which are located either in downtown or suburban business centers, and for its corporate headquarters. Branch offices are generally leased over periods from three to five years. The corporate office lease expires in 2018. The leases generally provide for payment of basic rent plus a share of building real estate taxes, maintenance costs and utilities.

Rent expense was $897,000 in fiscal 2014 and $1,087,000 in fiscal 2013. As of September 30, 2014, future minimum lease payments due under non-cancelable lease agreements having initial terms in excess of one year, including certain closed offices, totaled approximately $1,019,000, as follows: fiscal 2015 - $415,000, fiscal 2016 - $323,000, fiscal 2017 - $164,000, fiscal 2018 – 90,000, fiscal 2019 – 27,000 and thereafter - $0.

Consolidated Statements of Operations (USD $)
In Thousands, except Per Share data, unless otherwise specified

Other Current Liabilities

7. Other Current Liabilities

Other current liabilities consisted of the following:


	September 30,
(In Thousands)	2014		2013
Accrued expenses	$	174	$	256
Accrued sales tax		762		226
Capital lease – short-term		72		72
Earn-out liability		201		350
Deferred rent		5		77


Total other current liabilities	$	1,214	$	981

5. Short-term Debt

On September 27, 2013, the Company entered into agreements with ACF FINCO I LP (successor-in-interest to Keltic Financial Partners II, LP), a limited partnership formed under the laws of the State of Delaware (“ACF”) that provide the Company with long term financing through a six million dollar ($6,000,000) secured revolving note (the “Note”). The Note has a term of three years and has no amortization prior to maturity. The interest rate for the Note is a fluctuating rate that, when annualized, is equal to the greatest of (A) the Prime Rate plus three and one quarter percent (3.25%), (B) the LIBOR Rate plus six and one quarter percent (6.25%), and (C) six and one half percent (6.50%), with the interest paid on a monthly basis. At September 30, 2014 and September 30, 2013 the interest rate was 6.5%. Loan advances pursuant to the Note are based on the accounts receivable balance and other assets. Upon execution of the Note, approximately three million fifty thousand dollars ($3,050,000) was advanced for the full repayment of the AR Credit Facility and fees from Wells Fargo related to the early termination thereof. At the time of close, there was approximately nine hundred thousand ($900,000) of availability under the new Note in excess of amounts paid to extinguish the debt and fees with Wells Fargo. The Company incurred certain cash expense and commitment fees related to obtaining the agreement of approximately $170,000, which has been paid. The Note is secured by all of the Company’s property and assets, whether real or personal, tangible or intangible, and whether now owned or hereafter acquired, or in which it now has or at any time in the future may acquire any right, title or interests. On April 21, 2014, the Company entered into the First Amendment and Waiver to the Loan and Security Agreement with ACF to adjust the covenants. On December 3, 2014 the Company entered into a Second Amendment and Waiver to the Loan and Security Agreement with ACF to adjust the future covenants as outlined below and waived certain defaults. The ACF facility includes certain covenants which require compliance until termination of the agreement. As of the date of this report, the Company was in compliance with all such covenants or had received waivers related thereto.

The Company has several administrative covenants and the following financial covenant:

The Company must maintain the following EBITDA:

(a) The three (3) consecutive calendar month period ending on December 31, 2014, to be a negative number exceeding negative Two Hundred Fifty Thousand and 00/100 Dollars ($250,000);

(b) The six (6) consecutive calendar month period ending on March 31, 2015, to be a negative number exceeding negative Five Hundred Thousand and 00/100 Dollars ($500,000);

(c) The nine (9) consecutive calendar month period ending on June 30, 2015, to be a negative number exceeding negative Seven Hundred Fifty Thousand and 00/100 Dollars ($750,000);

(d) The twelve (12) consecutive calendar month period ending on September 30, 2015, to be a negative number exceeding negative One Million and 00/100 Dollars ($1,000,000); and

(e) For any period commencing on or after October 1, 2015, no less than such amounts as are established by Lender for such period in Lender’s permitted discretion based on the annual financial projections including such period delivered by Borrower pursuant to Section 6.6, above.

The agreement includes certain covenants which require compliance until termination of the agreement. As of the September 30, 2014 the Company was not in compliance with the EBITDA covenant or other administrative covenants, however as of the date of this report, the Company was in compliance with the above EBITDA covenant and had received a waiver from the Lender for other administrative covenants. At September 30, 2014 there was approximately $730,000 available on the line of credit.

Significant Accounting Policies and Estimates (Policies)

Basis of Presentation

Principles of Consolidation

Estimates and Assumptions

Revenue Recognition

Cost of Contract Staffing Services

The cost of contract services includes the wages and the related payroll taxes and employee benefits of the Company’s employees while they work on contract assignments.

Cash and Cash Equivalents

Accounts Receivable

Property and Equipment

Goodwill

Fair Value Measurement

Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.

Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data.

Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs.

Derivative Financial Instruments

Earnings (loss) per Share

Reclassification

Certain reclassifications have been made to the financial statements as of and for the year ended September 30, 2013 to conform to the presentation as of and for the year ended September 30, 2014.

Advertising Expenses

Intangible Assets

Impairment of Long-lived Assets

Stock-Based Compensation

Income Taxes

Discontinued Operations

Segment Data

Recent Accounting Pronouncements

In August 2014, the FASB issued Accounting Standards Update 2014–15 (“ASU 2014-15), “Presentation of Financial Statements – Going Concern (Subtopic 205 – 40): Disclosure of Uncertainties About an Entity’s Ability to Continue as a Going Concern.” ASU 2014-15 requires management to evaluate whether there are conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern, and to provide certain disclosures when it is probable that the entity will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued. ASU 2014-15 is effective for the annual period ended December 31, 2016 and for annual periods and interim periods thereafter with early adoption permitted. The Company does not expect this ASU to have a significant impact on its financial position or results of operations.

Other recent accounting pronouncements issued by FASB and the SEC did not or are not believed by management to have a material impact on the Company’s present or future financial statements.

14. Segment Data

The Company provides the following distinctive services: (a) direct hire placement services, (b) temporary professional services staffing in the fields of information technology, engineering, and accounting, and (c) temporary light industrial staffing. Intersegment net service revenues are not significant. Revenues generated from the temporary professional services staffing and light industrial staffing are classified as contract staffing services revenues in the statements of operations. Selling, general and administrative expenses are not separately allocated among agricultural, professional services or industrial staffing services within the contract staffing services sector for internal reporting purposes.

Unallocated Corporate expenses primarily include, corporate legal expenses, consulting expenses, audit fees, corporate rent and facility costs, board fees and interest expense.


	Fiscal Year Ended
	September 30,
(In Thousands)	2014			2013

Direct Hire Placement Services
Revenue	$	7,088		$	7,317
Placement services gross margin		100	%		100	%
Operating loss		(983	)		(700	)
Depreciation & amortization		230			224
Accounts receivable – net		805			625
Intangible assets		228			347
Goodwill		24			24
Total assets		2,285			4,810

Contract Staffing Services
Industrial services revenue	$	25,031		$	29,816
Professional services revenue		7,692			9,371
Industrial services gross margin		15.60	%		12.61	%
Professional services gross margin		31.10	%		33.19	%
Operating income	$	1,159		$	890
Depreciation and amortization		268			261
Accounts receivable – industrial services		3,318			4,778
Accounts receivable – professional services		784			1,294
Intangible assets		1,332			1,537
Goodwill		1,082			1,082
Total assets	$	7,559		$	6,184

Unallocated Expenses
Corporate administrative expenses	$	541		$	1,160
Corporate facility expenses		160			247
Board related expenses		93			98
Interest expense		507			251

Total unallocated expenses	$	1,301		$	1,756


Consolidated
Total revenue	$	39,811		$	46,504
Operating loss		(1,125	)		(1,566	)
Depreciation and amortization		498			485
Total accounts receivables – net		4,907			6,697
Intangible assets		1,560			1,884
Goodwill		1,106			1,106
Assets from continuing operations		9,844			10,994
Assets from discontinued operations		0			238
Total assets	$	9,844		$	11,232

Stock Option Plans

10. Stock Option Plans

As of September 30, 2014, there were stock options outstanding under the Company’s 1995 Stock Option Plan, Second Amended and Restated 1997 Stock Option Plan, 1999 Stock Option Plan and the 2011 Company Incentive Plan. All four plans were approved by the shareholders. The 1995 Stock Option Plan and the 1999 Stock Option Plan have expired, and no further options may be granted under those plans. During fiscal 2009, the Second Amended and Restated 1997 Stock Option Plan was amended to make an additional 592,000 options available for granting and as of September 30, 2013 there were no shares available for issuance under the Amended and Restated 1997 Stock Option Plan. As of September 30, 2014, there were no shares available for issuance under the 2011 Company Incentive Plan. The plans granted specified numbers of options to non-employee directors, and they authorized the Compensation Committee of the Board of Directors to grant either incentive or non-statutory stock options to employees. Vesting periods are established by the Compensation Committee at the time of grant. All stock options outstanding as of September 30, 2014 and September 30, 2013 were non-statutory stock options, had exercise prices equal to the market price on the date of grant, and had expiration dates ten years from the date of grant.

On July 23, 2013, the Board of Directors approved the Company’s 2013 Incentive Stock Plan (the “2013 Plan”), and resolved to cease issuing securities under all prior Company equity compensation plans. The 2013 Plan was approved by the Company’s shareholders at the Annual Meeting of Stockholders on September 9, 2013. The purpose of the 2013 Plan is to provide additional incentives to select persons who can make, are making, and continue to make substantial contributions to the growth and success of the Company, to attract and retain the employment and services of such persons, and to encourage and reward such contributions, by providing these individuals with an opportunity to acquire or increase stock ownership in the Company through either the grant of options or restricted stock. The 2013 Plan is administered by the Compensation Committee or such other committee as is appointed by the Board of Directors pursuant to the 2013 Plan (the “Committee”). The Committee has full authority to administer and interpret the provisions of the 2013 Plan including, but not limited to, the authority to make all determinations with regard to the terms and conditions of an award made under the 2013 Plan. The maximum number of shares that may be granted under the 2013 Plan is 10,000,000. This number is subject to adjustment to reflect changes in the capital structure or organization of the Company.

A summary of stock option activity is as follows:


	Year Ended September 30,
(Number of Options in Thousands)	2014			2013

Number of options outstanding:
Beginning of year		1,478			1,747
Granted		2,595			108
Exercised		—			—
Terminated		(654	)		(377	)


End of year		3,419			1,478


Number of options exercisable at end of year		1,470			1,418
Number of options available for grant at end of year		7,408			10,000

Weighted average option prices per share:
Granted during the year	$	.28		$	.49
Exercised during the year		—			—
Terminated during the year		.42			.40
Outstanding at end of year		.32			.40
Exercisable at end of year		.38			.41

Stock options outstanding as of September 30, 2014 were as follows (number of options in thousands):


Range of Exercise Prices	Number Outstanding		Weighted Average Price		Number Exercisable		Weighted Average Price		Average Remaining Life (Years)

Under $1.00		3,404	$	0.32		1,455	$	0.38		8.5
$1.01 to 2.39		15	$	2.39		15	$	2.39		3

As of September 30, 2014, the aggregate intrinsic value of outstanding stock options and exercisable stock options was approximately $0.21 per share.


	2014			2013

Expected option life (years)		9		10
Expected stock price volatility		95	%	94%
Expected dividend yield		—	%	— %
Risk-free interest rate		2.75	%	2.64% to 1.86%

Stock-based compensation expense attributable to stock options was $98,000 and $68,000 in 2014 and 2013, respectively. As of September 30, 2014, there was approximately $422,000 of unrecognized compensation expense related to unvested stock options outstanding, and the weighted average vesting period for those options was 1.5 years.

Discontinued Operations - Discontinued Operations (Detail) (USD $)
In Thousands, unless otherwise specified

Long-Term Liabilities

8. Long-Term Liabilities

In connection with the completion of the sale of shares of common stock to PSQ in fiscal year 2009, the Company’s then Chairman, Chief Executive Officer and President (the “former CEO”) retired from those positions and his employment agreement with the Company was replaced by a new consulting agreement. Under the consulting agreement, the Company became obligated to pay an annual consulting fee of $180,000 over a five-year period and to issue 500,000 shares of common stock to the former CEO for no additional consideration. During fiscal year 2009, the Company recorded a liability for the net present value of the future payments in the amount of $790,000 and recorded a charge to operations in the amount of $280,000 based on a quoted market price of $0.56 per share on the date of the award. On January 31, 2013, the former CEO retired from all positions with the Company, however he will continue to receive his monthly payments required under his consulting agreement. As of September 30, 2014 and September 30, 2013, the liability for future payments was reflected on the consolidated balance sheet as short term accrued compensation of $60,000 and $135,000, respectively.

Included in long-term liabilities as of September 30, 2013 are capital leases as disclosed in Note 3 and deferred rent.

9. Common Stock

In 2013, the Company executed an Amended and Restated Purchase agreement with RFFG that required the issuance of 1.1 million shares of common stock. The stock was officially issued on July 2, 2013. The stock price on July 2, 2013 was $0.2999 and there were shares traded that day at that price. The value related to the transaction on July 2, 2013 was $329,890.

On September 9, 2013, the shareholders approved the increase of common shares authorized to be issued by the Company from 50,000,000 to 200,000,000 and preferred shares from 1,000,000 to 20,000,000.

On March 31, 2014, the Company and Aracle SPF I, LLC, a New York based fund (“Aracle”) entered into a Securities Purchase Agreement (the “SPA”) pursuant to which Aracle has the right to acquire up to 12 units (the “Units”), for $50,000 per Unit, with each Unit consisting of 250,000 shares of common stock of the Company and 125,000 common stock purchase warrants. The warrants are exercisable 6 months after issuance, have a term of 4 years, and have an exercise price of $0.25 per warrant share. The SPA contains standard representations, warranties, and covenants. In addition, the SPA contains a price adjustment mechanism that requires the Company, with certain exceptions, to issue additional shares of common stock to the investor in the event the Company, within 12 months of the initial closing under the SPA, issues certain equity securities at a price per share less than $0.20, provided, however, as long as the Company is listed on the NYSE MKT the total number of shares issuable under the foregoing adjustment provision may not exceed 19.9% of the Company’s outstanding shares of common stock on March 30, 2014. Further, in the event the Company is delisted from NYSE MKT while Aracle owns at least 51% of the shares issued to it under the SPA, the Company shall issue an additional 3,000,000 shares to Aracle, and the 12 month price adjustment period shall be extended to 36 months. The Company agreed to appoint two new members to the Company’s Board of Directors within 60 days of the initial closing, which new members are subject to the prior approval of Aracle. The Company granted Aracle piggyback registration rights with respect to the shares and the shares of common stock underlying the warrants. The warrants do not include any price protection clause.

Concurrently with the execution of the SPA the Company and Aracle conducted an initial closing thereunder, in which Aracle purchased 9.5 Units for $475,000. The Units and the securities underlying the Units were issued to Aracle, an accredited investor, pursuant to the exemption from registration provided by Rule 506 of Regulation D as promulgated under the Securities Act of 1933, as amended, and other applicable exemptions. The issued securities contain a standard restricted legend.

On April 16, 2014, the Company, Aracle and a second institutional investor entered into certain Securities Purchase Agreements (“SPA”) pursuant to which the Investors purchased 2.5 Units for $125,000.

The Company incurred certain expenses related to the SPA of approximately $130,000, which were paid from the proceeds, for a net proceeds of approximately $470,000.

The shares and securities underlying the warrants were issued to the investors, pursuant to the exemption from registration provided by Rule 506 of Regulation D as promulgated under the Securities Act of 1933, as amended, and other applicable exemptions. The issued securities contain a standard restricted legend.

Warrants


(Number of Warrants in Thousands)	Number of Shares		Exercise Price		Expiration
Outstanding at September 30, 2013		—

Warrants Granted
Aracle Warrants		1,500	$	0.25		3/31/2018
Brio Warrants		2,372	$	0.25		2/07/2020


Outstanding at September 30, 2014		3,872

The weighted average exercise price of outstanding warrants was $0.25 at September 30, 2014, with expiration dates ranging from March 31, 2018 to February 7, 2020.

11. Income Taxes

The components of the provision for income taxes are as follows:


	Year Ending September 30,
(In Thousands)	2014		2013

Current tax provision	$	24	$	8
Deferred tax provision		—		—


Provision for income taxes	$	24	$	8

The differences between income taxes calculated at the statutory U.S. federal income tax rate and the Company’s provision for income taxes are as follows:


	Year Ended September 30,
(In Thousands)	2014			2013

Income tax provision at statutory federal tax rate	$	32		$	22
Valuation allowance		(8	)		(14	)


Provision for income taxes	$	24		$	8

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


	Year Ended September 30,
(In Thousands)	2014			2013

Temporary differences
Stock option expense	$	461		$	326
Deferred compensation expense		24			(59	)
Vacation expense		64			69
Intangible assets		107			107
Allowance for doubtful accounts		208			74
Other		5			(49	)
Net operating loss carryforwards		4,956			4,292
Valuation allowances		(5,825	)		(4,760	)


Net deferred income tax asset	$	—		$	—

As of September 30, 2014, there were approximately $12,150,000 of losses available to reduce federal taxable income in future years through 2033, and there were approximately $10,800,000 of losses available to reduce state taxable income in future years, expiring from 2014 through 2033. Due to common stock transactions in the prior years, it is likely that the Company will be limited by Section 382 of the Internal Revenue Code as to the amount of net operating losses that may be used in future years. The Company is currently evaluating the effects of any such limitation.

Future realization of the tax benefits of existing temporary differences and net operating loss carryforwards ultimately depends on the existence of sufficient taxable income within the carryforward period. As of September 30, 2014 and 2013, the Company performed an evaluation to determine whether a valuation allowance was needed. The Company considered all available evidence, both positive and negative, which included the results of operations for the current and preceding years. The Company also considered whether there was any currently available information about future years. Because long-term contracts are not a significant part of the Company’s business, future results cannot be reliably predicted by considering past trends or by extrapolating past results. Moreover, the Company’s earnings are strongly influenced by national economic conditions and have been volatile in the past. Considering these factors, the Company determined that it was not possible to reasonably quantify future taxable income. The Company determined that it is more likely than not that all of the deferred tax assets will not be realized. Accordingly, the Company maintained a full valuation allowance as of September 30, 2014 and 2013.

As a result of continuing losses, we have determined that it is more likely than not that we will not realize the benefits of the deferred tax assets and therefore we have recorded a valuation allowance to reduce the carrying value of the deferred tax assets to zero. The valuation allowance increased by $1,065,000 and $537,000 in 2014 and 2013, respectively.

We file federal and state income tax returns in jurisdictions with varying statutes of limitations. Due to our net operating loss carryforwards, our income tax returns generally remain subject to examination by federal and most state tax authorities. We are not currently under examination in any federal or state jurisdiction.

Significant Accounting Policies and Estimates (Property and Equipment) - Additional Information (Detail) (USD $)

Stock Option Plans - Schedule of Black-Scholes Option Pricing Model and Weighted Average Assumptions (Detail)

Related Party Transactions

16. Related Party Transactions

The Company contracted with Norco Accounting & Consulting Inc. (“Norco”) to provide accounting and consulting services prior to Andrew J. Norstrud joining the Company. Norco charged approximately $63,000 for consulting services and approximately $13,000 in related expense during the second quarter ended March 31, 2013. Norco is 50% owned by Andrew J. Norstrud, who joined the Company on March 29, 2013, as the Company’s Chief Financial Officer and became the Company’s Chief Executive Officer on March 7, 2014. The Company no longer uses Norco for accounting and consulting services.

To ensure the Company has adequate near-term liquidity, the officers of the Company have loaned the Company short-term loans. In most cases, the loans are for less than 30 days and no interest is expensed or paid to the officers. There were no amounts owed to officers of the Company, other than reimbursable expenses, at September 30, 2014.

On May 29, 2014, the Company entered into a settlement agreement related to an indemnification agreement with the former Chief Executive Officer of the Company under which the Company agreed to pay a total of $51,850 as settlement in full of certain disputes among the parties. As of September 30, 2014 this has been paid by the Company.

The above related party transactions are not necessarily indicative of the amounts and terms that would have been incurred had comparable transactions been entered into with independent parties.

Short-term Debt (Tables)

To recognize the fair value of the warrants, the Company discounted the note and increased additional paid in capital. The fair value of the conversion feature was approximately $178,000, the Company discounted the note and created a derivative liability, which will be evaluated each quarter and adjusted for any change in value. For the year ended September 30, 2014, the Company recognized interest expense and the amortization of the discount of approximately $36,000.


(In Thousands)	September 30, 2014

Original principal balance	$	633
Debt discount for issuance costs and original discount		(105	)
Debt discount for issuance of warrants		(219	)
Debt discount for conversion feature		(178	)

Total		131
Interest expense and amortization of debt discount		36

Balance at September 30, 2014		167

Current portion of convertible debt		(35	)
Total long-term portion of convertible debt, net of debt discount	$	132

6. Convertible Note

On August 7, 2014 the Company issued a Convertible Note (the “Note”) with an original principal balance of $632,500 to Brio Capital Master Fund LTD (“Brio”), for a purchase price of $550,000. The Note matures on February 6, 2016, and is payable in thirteen monthly installments of $48,654, commencing in the sixth month post-closing. Brio has the right, however not the obligation, six months after closing, to convert all or any part of the outstanding Note into the Company’s common stock at an initial conversion price of $0.20 per share. After six months from closing, the conversion price will have a one-time reset to the lower of $0.20 or 90% of the average of the 3 lowest closing prices for the previous 10 trading days, subject to a floor of $0.14 per share. The Company can force conversion if the Company’s common stock trades at 250% greater than the conversion price for 20 consecutive trading days.

In addition to the Note, the Company issued a warrant to purchase up to 2,371,875 shares of the Company common stock. The warrant is exercisable at $0.25 per share, vests 6 months after the closing, and expires 5 years thereafter.

The Convertible Note contains an embedded conversion feature requiring bifurcation and liability treatment. The Company accounted for this conversion feature and the detachable warrants by allocating the proceeds from issuance of the convertible notes to the conversion feature and the warrants. These were based on a relative fair value and the conversion feature was valued by a third party.


(In Thousands)	September 30, 2014

Original principal balance	$	633
Debt discount for issuance costs and original discount		(105	)
Debt discount for issuance of warrants		(219	)
Debt discount for conversion feature		(178	)

Total		131
Interest expense and amortization of debt discount		36

Balance at September 30, 2014		167

Current portion of convertible debt		(35	)
Total long-term portion of convertible debt, net of debt discount	$	132

During the period from August 7, 2014 to September 30, 2014 there was a gain on the change of derivative liability of approximately $47,000, which was recorded as a decrease to the derivative liability and in decrease to net loss to the statement of operations.


	Derivative Liability
Balance at August 7, 2014	$	178,000
Changes in fair value		(47,000	)

Balance at September 30, 2014	$	131,000


	Derivative Liability
Balance at August 7, 2014	$	178,000
Changes in fair value		(47,000	)

Balance at September 30, 2014	$	131,000

Stock Option Plans - Schedule of Stock Option Activity (Detail) (USD $)
In Thousands, except Per Share data, unless otherwise specified

Convertible Note - Additional Information (Detail) (USD $)

Consolidated Statements of Shareholder's Equity (USD $)
In Thousands

Common Stock [Member]

Accumulated Deficit [Member]

Goodwill and Intangible Assets

4. Goodwill and Intangible Assets

Goodwill

Goodwill represents the excess of cost over the fair value of the net assets acquired from various acquisitions. Goodwill is not amortized. The Company performs a goodwill impairment test annually, by reporting unit, in the fourth quarter of the fiscal year, or whenever potential impairment triggers occur. Should the two-step process be necessary, the first step of the impairment test identifies potential impairment by comparing the fair value of a reporting unit to its carrying value including goodwill. In applying a fair-value-based test, estimates are made of the expected future cash flows to be derived from the reporting unit. Similar to the review for impairment of other long-lived assets, the resulting fair value determination is significantly impacted by estimates of future margins, capital needs, economic trends and other factors. If the carrying value of the reporting unit exceeds its fair value, the second step of the impairment test is performed to measure the amount of impairment loss, if any. The second step of the impairment test compares the implied fair value of the reporting unit goodwill with the carrying amount of that goodwill. An impairment loss would be recognized to the extent the carrying value of goodwill exceeds its implied fair value. No impairment loss was recorded in fiscal year 2014 or 2013.

Intangible Assets

As of September 30, 2014


(In Thousands)	Cost		Accumulated Amortization		Loss on Impairment of Intangible Assets		Net Book Value

Customer Relationships	$	2,690	$	1,137	$	—	$	1,553
Trade Name		17		10		—		7


	$	2,707	$	1,147	$	—	$	1,560

As of September 30, 2013


(In Thousands)	Cost		Accumulated Amortization		Loss on Impairment of Intangible Assets		Net Book Value

Customer Relationships	$	2,690	$	816	$	—	$	1,874
Trade Name		17		7		—		10


	$	2,707	$	823	$	—	$	1,884

Amortization expense was approximately $326,000 and $320,000 for the years ended September 30, 2014 and 2013, respectively.

The trade names are amortized on a straight – line basis over the estimated useful life of five years. Customer relationships are amortized based on the future undiscounted cash flows over estimated remaining useful lives of three to ten years. Over the next five years, annual amortization expense for these finite life intangible assets will be approximately $320,000 in 2015, $320,000 in 2016, $320,000 in 2017, $320,000 in 2018 and $280,000 in 2019.

Long-lived assets, such as purchased intangibles subject to amortization, are reviewed for impairment when events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company regularly evaluates whether events and circumstances have occurred that indicate possible impairment and relies on a number of factors, including operating results, business plans, economic projections, and anticipated future cash flows. The Company uses an estimate of the future undiscounted net cash flows of the related asset or asset group over the remaining life in measuring whether the assets are recoverable.

During the year ended September 30, 2014, the Company did not record any impairment of intangible assets.

Segment Data - Schedule of Segment Reporting Information (Detail) (USD $)
In Thousands, unless otherwise specified

Other Current Liabilities (Tables)

Other current liabilities consisted of the following:


	September 30,
(In Thousands)	2014		2013
Accrued expenses	$	174	$	256
Accrued sales tax		762		226
Capital lease – short-term		72		72
Earn-out liability		201		350
Deferred rent		5		77


Total other current liabilities	$	1,214	$	981

Goodwill and Intangible Assets - Additional Information (Detail) (USD $)

Discontinued Operations

15. Discontinued Operations

As of July 7, 2013, the Board of Directors of the Company determined that the best course of action related to its Agricultural Division was to terminate operations, to liquidate the Division’s assets, and to focus the business on the light industrial and professional divisions. On July 7, 2013, all staffing was discontinued and the entire operations of the Agricultural Division were discontinued as of August 1, 2013. All employees have been terminated and a one-time expense of approximately $100,000 was recognized as of September 30, 2013.


	Years Ended
	September 30,
(In Thousands)	2014			2013

Discontinued Operations
Agricultural services revenue – net	$	—		$	6,801
Agricultural services gross margin		—			3.3	%
Agricultural services net loss		(230	)		(324	)
Accounts receivable net – Agricultural services		—			238
A Fixed assets – Agricultural services		—			—
Total assets – Agricultural services		—			238
Total liabilities – Agricultural services	$	—		$	30

The Company has no assets or liabilities related to the discontinued operations as of September 30, 2014.


184 Shuman Blvd., Suite 420, Naperville, IL		60563
(Address of principal executive offices)		(Zip Code)


Title of each class		Name of each exchange on which registered
Common Stock, no par value		NYSE MKT


		Page

PART I

Item 1.	Business.		3

Item 1A.	Risk Factors.		5

Item 1B.	Unresolved Staff Comments.		10

Item 2.	Properties.		10

Item 3.	Legal Proceedings.		10

Item 4.	Mine Safety Disclosures.		10

PART II

Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.		11

Item 6.	Selected Financial Data.		13

Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.		13

Item 7A.	Quantitative and Qualitative Disclosures About Market Risk.		22

Item 8.	Financial Statements and Supplementary Data.		23

Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.		44

Item 9A.	Controls and Procedures.		44

Item 9B.	Other Information.		45

PART III

Item 10.	Directors, Executive Officers and Corporate Governance.		46

Item 11.	Executive Compensation.		50

Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.		53

Item 13.	Certain Relationships and Related Transactions, and Director Independence.		54

Item 14.	Principal Accountant Fees and Services.		54

PART IV

Item 15.	Exhibits and Financial Statement Schedules.		55

	SIGNATURES		60


	Fourth Quarter		Third Quarter		Second Quarter		First Quarter
Fiscal 2014:
High	$	.20	$	.23	$	.43	$	.30
Low		.16		.16		.18		.17

Fiscal 2013:
High	$	.47	$	.37	$	.56	$	.68
Low		.16		.27		.31		.42


(number of shares in thousands)
Plan category	Number of securities to be issued upon exercise of outstanding options, warrants and rights		Weighted- average exercise price of outstanding options, warrants and rights		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in first column)

Equity compensation plans approved by security holders		3,419	$	0.32		7,408	(1)

Equity compensation plans not approved by security holders		—		—		—


Total		3,419	$	0.32		7,408	(1)


Gross Profit Margin %	Year Ended September 30, 2014			Year Ended September 30, 2013
Direct hire placement services		100	%		100	%
Industrial contract services		15.6	%		12.6	%
Professional contract services		31.1	%		33.2	%

Combined Gross Profit Margin % (1)		33.6	%		30.5	%


	For the year ended September 30, 2014			For the year ended September 30, 2013
Cash flows provided by (used in) continuing operating activities	$	308		$	(1,112	)
Cash flows used in investing activities	$	(371	)	$	(341	)
Cash flows (used in) provided by financing activities	$	(108	)	$	1,413


	Page

Report of Independent Registered Public Accounting Firm		24

Consolidated Balance Sheets as of September 30, 2014 and September 30, 2013		25

Consolidated Statements of Operations for the years ended September 30, 2014 and September 30, 2013		26

Consolidated Statements of Shareholders’ Equity for the years ended September 30, 2014 and September 30, 2013		27

Consolidated Statements of Cash Flows for the years ended September 30, 2014 and September 30, 2013		28

Notes to Consolidated Financial Statements		29


	September 30, 2014			September 30, 2013

ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	168		$	361
Accounts receivable, less allowances (2014 - $395; 2013 - $272)		4,907			6,697
Other current assets		1,650			416
Assets of discontinued operations, less allowances (2014 - $265; 2013 - $35)		—			238

Total current assets		6,725			7,712

Property and equipment, net		453			530
Goodwill		1,106			1,106
Intangible assets, net		1,560			1,884

TOTAL ASSETS	$	9,844		$	11,232

LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Short-term debt	$	2,711		$	3,734
Accounts payable		910			1,015
Accrued compensation		2,633			2,733
Convertible note payable - current portion, net of discount		35			—
Derivative liability		131			—
Other current liabilities		1,214			981
Liabilities from discontinued operations		—			30

Total current liabilities		7,634			8,493
Convertible note payable, net of discount		132
Other long-term liabilities		13			126

Total long-term liabilities		145			126

Commitments and contingencies
SHAREHOLDERS’ EQUITY
Preferred stock; no par value; authorized - 20,000 shares; issued and outstanding - none		—			—
Common stock, no-par value; authorized - 200,000 shares; issued and outstanding - 25,899 shares at September 30, 2014 and 22,799 shares at September 30, 2013		—			—
Additional paid in capital		11,658			10,851
Accumulated deficit		(9,593	)		(8,238	)

Total shareholders’ equity		2,065			2,613

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	9,844		$	11,232


	Years Ended September 30,
	2014			2013

NET REVENUES:
Contract staffing services	$	32,723		$	39,187
Direct hire placement services		7,088			7,317

NET REVENUES		39,811			46,504

Cost of contract services		26,417			32,318
Selling, general and administrative expenses		13,709			15,173
Amortization of intangible assets		326			320

LOSS FROM OPERATIONS		(641	)		(1,307	)
Gain on change in derivative liability		47			—
Interest expense		(507	)		(251	)

LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAX PROVISION		(1,101	)		(1,558	)
Provision for income tax		(24	)		(8	)

LOSS FROM CONTINUING OPERATIONS	$	(1,125	)	$	(1,566	)

Loss from discontinued operations	$	(230	)	$	(324	)

NET LOSS	$	(1,355	)	$	(1,890	)

BASIC AND DILUTED LOSS PER SHARE
From continuing operations	$	(0.05	)	$	(0.07	)

From discontinued operations	$	(0.01	)	$	(0.01	)

Total net loss per share	$	(0.06	)	$	(0.09	)

WEIGHTED AVERAGE NUMBER OF SHARES - BASIC AND DILUTED		24,360			21,969


	Common Stock		Additional Paid		Accumulated			Total Shareholders’
	Shares		In Capital		Deficit			Equity

Balance, September 30, 2012		21,699	$	10,453	$	(6,348	)	$	4,105

Issuance of common stock		1,100		330		—			330

Stock compensation expense		—		68		—			68

Net loss		—		—		(1,890	)		(1,890	)


Balance, September 30, 2013		22,799	$	10,851	$	(8,238	)	$	2,613

Stock compensation expense		—		98		—			98

Issuance of warrants related to debt		—		219		—			219

Issuance of common stock, net		3,000		470		—			470

Stock issued for services		100		20		—			20

Net loss		—		—		(1,355	)		(1,355	)


Balance, September 30, 2014		25,899	$	11,658	$	(9,593	)	$	2,065


Name	Age	Position
Andrew J. Norstrud	41	Chief Executive Officer, Principal Financial Officer, Director
Dennis W. Baker	68	Chairman of the Board
Jack Zwick	78	Director
Michael K. Schroering	57	Director
Thomas C. Williams	55	Director


Name and Principal Position	Fiscal Year		Salary ($)		Bonus ($)		Stock Awards ($)		Option Awards ($)		NonEquity Incentive Plan Compensation ($)		Nonqualified Deferred Compensation Earnings ($)			All Other Compensation ($)		Total ($)

Andrew Norstrud (3)		2014		229,200		25,000								306,000	(1)				560,200
Chief Executive Officer, Chief Financial Officer and Treasurer		2013		126,000				—		—		—		—			63,000		189,000


Michael Schroering (4)		2014		30,000										52,000	(2)				82,000
Former Chief Executive Officer and Chairman		2013		40,000				—		—		—		—			—		40,000
Former Chief Executive Officer and Chairman


	Option Awards										Stock Awards
Name	Number of Securities Underlying Unexercised Options: # Exercisable		Number of Securities Underlying Unexercised Options: # Unexercisable		Equity Incentive Plan Awards: Number of Securities Underlying Unearned and Unexercisable Options:		Option Exercise Price $		Option Expiration Date		# of Shares or Units of Stock That Have Not Vested #		Market Value of Shares or Units of Stock That Have Not Vested $		Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested #		Equity Incentive Plan Awards: Market of Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested $

Andrew Norstrud,				200,000		—		0.25		1/27/2024		—		—		—		—
Chief Executive Officer, Chief Financial Officer and Treasurer				1,000,000				0.35		3/04/2024


Michael Schroering,				300,000		—		0.25		1/27/2024		—		—		—		—
Former Chief Executive Officer and Chairman		15,000						0.48		12/19/22
Former Chief Executive Officer and Chairman


Name	Fees Earned or Paid in Cash ($)		Option Awards (1) ($)		Total ($)

Dennis W. Baker		30,000		0		30,000
Jack Zwick (2)		10,950		0		10,950
Thomas C. Williams		24,000		0		24,000
Michael Schroering		24,000		52,000		76,000
Edward Hunter (2)		6,000		0		6,000


Name and Address of Beneficial Owner	Amount and Nature of Beneficial Ownership			Percent of Class(1)
LEED HR, LLC and Michael Schroering LEED HR, LLC 2650 East Point Parkway, Suite 280 Louisville, KY 40223		16,023,744	(2)		61.9	%
Dennis W. Baker		432,800	(3)		1.7	%
Thomas C. Williams		315,000	(4)		1.2	%
Jack Zwick		175,000	(5)			*
Andrew J. Norstrud		1,250,000	(7)		4.8	%
Michael Schroering		315,000	(6)		1.2	%
Current directors and executive officers as a group (5 individuals)		18,511,544			71.5	%


	Fiscal		Fiscal

Audit fees	$	155,000	$	155,000
Audit-related fees		18,500		18,500
Tax fees		—		—
All other fees		—		—


No.		Description of Exhibit

2.01		Securities Purchase and Tender Offer Agreement, dated March 30, 2009, by and among General Employment Enterprises, Inc. and PSQ, LLC. Incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K dated March 30, 2009, Commission File No. 1-05707.

2.02		Acquisition of Assets of On-Site Services dated June 2. 2010. Incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K dated June 8, 2010, File No. 1-05707.

2.03		Financial Statements of On-Site Services dated August 16, 2010, Incorporated by reference to Exhibit 99.1, Exhibit 99.2 and Exhibit 99.3 to the Company’s Current Report on Form 8-K dated August 16, 2010, File No. 1-05707.

3.01		Articles of Incorporation and amendments thereto. Incorporated by reference to Exhibit 3 to the Company’s Quarterly Report on Form 10-QSB for the quarter ended March 31, 1996, Commission File No. 1-05707.

3.02		Amended and Restated Articles of Incorporation. Incorporated by reference to Exhibit 3(i) to the Company’s Form 8-K filed with the Commission on December 6, 2013.

3.03		By-Laws of General Employment Enterprises, Inc., as amended June 30, 2009. Incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K dated March 30, 2009, Commission File No. 1-05707

3.04		Certificate of designation of series a convertible preferred stock of General Employment Enterprises, Inc.

4.01		Rights Agreement dated as of February 4, 2000, between General Employment Enterprises, Inc. and Continental Stock Transfer and Trust Company, as Rights Agent. Incorporated by reference to Exhibit 1 to the Company’s Registration Statement on Form 8-A filed with the Securities and Exchange Commission on February 7, 2000, Commission File No. 1-05707.

4.02		Amendment No. 1 to Rights Agreement, dated as of March 30, 2009, by and between General Employment Enterprises, Inc. and Continental Stock Transfer and Trust Company, as Rights Agent. Incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form 8-A/A filed with the Securities and Exchange Commission on March 31, 2009, Commission File No. 1-05707.

10.01*		Key Manager Plan, adopted May 22, 1990. Incorporated by reference to Exhibit 10(h) to the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 1990, Commission File No. 1-05707.

10.02*		General Employment Enterprises, Inc. 1995 Stock Option Plan. Incorporated by reference to Exhibit 4.1 to the Company’s Form S-8 Registration Statement dated April 25, 1995, Registration No. 33-91550.

10.03*		Second Amended and Restated General Employment Enterprises, Inc. 1997 Stock Option Plan. Incorporated by reference to Exhibit 10.03 to the Company’s Annual Report on Form 10-K filed with the SEC on January 8, 2010.

10.04*		General Employment Enterprises, Inc. 1999 Stock Option Plan. Incorporated by reference to Exhibit 10 of the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 1999, Commission File No. 1-05707.

10.05*		Chief Executive Officer Bonus Plan, adopted September 24, 2001. Incorporated by reference to Exhibit 10.11 to the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2001, Commission File No. 1-05707.



10.06*		Operational Vice President Bonus Plan effective for fiscal years beginning on or after October 1, 2004. Incorporated by reference to Exhibit 10.01 to the Company’s Quarterly Report on Form 10-QSB for the quarterly period ended December 31, 2004, Commission File No. 1-05707.

10.07*		Form of stock option agreement under the General Employment Enterprises, Inc. 1997 Stock Option Plan. Incorporated by reference to Exhibit 99.01 to the Company’s current report on Form 8-K dated September 25, 2006, Commission File No. 1-05707.

10.08*		Chief Executive Officer Bonus Plan Amendment 1, effective for fiscal years beginning on or after October 1, 2006. Incorporated by reference to Exhibit 10.01 to the Company’s quarterly report on Form 10-QSB for the quarterly period ended December 31, 2006, Commission File No. 1-05707.

10.09*		Form of director stock option agreement under the Amended and Restated General Employment Enterprises, Inc. 1997 Stock Option Plan. Incorporated by reference to Exhibit 10.15 to the Company’s Annual Report on Form 10-KSB for the fiscal year ended September 30, 2007, Commission File No. 1-05707.

10.10*		Form of stock option agreement under the General Employment Enterprises, Inc. 1999 Stock Option Plan. Incorporated by reference to Exhibit 10.16 to the Company’s Annual Report on Form 10-KSB for the fiscal year ended September 30, 2007, Commission File No. 1-05707.

10.11*		Form of indemnity agreement with directors and officers, adopted November 19, 2007. Incorporated by reference to Exhibit 10.20 to the Company’s Annual Report on Form 10-KSB for the fiscal year ended September 30, 2007, Commission File No. 1-05707.

10.12*		Escrow Agreement, dated as of March 30, 2009, by and among General Employment Enterprises, Inc., PSQ, LLC and Park Avenue Bank, as escrow agent. Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated March 30, 2009, Commission File No. 1-05707.

10.13*		Consulting Agreement, dated as of March 30, 2009, by and among Herbert F. Imhoff, Jr., General Employment Enterprises, Inc. and PSQ LLC. Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K dated March 30, 2009, Commission File No. 1-05707.

10.14*		Registration Rights Agreement, dated as of March 30, 2009, by and between General Employment Enterprises, Inc., PSQ, LLC and Herbert F. Imhoff, Jr. Incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K dated March 30, 2009, Commission File No. 1-05707.

10.15*		Amendment No. 1, dated as of June 22, 2009, to Consulting Agreement, dated as of March 30, 2009, by and among Herbert F. Imhoff, Jr., General Employment Enterprises, Inc. and PSQ LLC. Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K dated June 22, 2009, Commission File No. 1-05707.

10.16*		Employment Agreement between General Employment Enterprises, Inc. and Kent M. Yauch, dated June 26, 2009. Incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K dated June 22, 2009, Commission File No. 1-05707.

10.17*		Employment Agreement between General Employment Enterprises, Inc. and Marilyn L. White, dated June 26, 2009. Incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K dated June 22, 2009, Commission File No. 1-05707.

10.18*		Form of director stock option under the Second Amended and Restated General Employment Enterprises, Inc. 1997 Stock Option Plan. Incorporated by reference to Appendix A to the Company’s Definitive Information Statement filed with the SEC on October 16, 2009.

10.19*		Form of employee stock option under the Second Amended and Restated General Employment Enterprises, Inc. 1997 Stock Option Plan. Incorporated by reference to Appendix A to the Company’s Definitive Information Statement filed with the SEC on October 16, 2009.



10.20*		Amendment No. 4 dated as of February 5, 2010 to Statement of Acquisition of Beneficial Ownership by Herbert F. Imhoff, Jr. Incorporated by reference to Form SC 13D dated February 5, 2010, Commission File No. 5-40677.

10.21		Account Purchase Agreement dated as December 14, 2010 by and between Wells Fargo Bank, National Association and Triad Personnel Services, Inc., the Company, BMPS, Inc., BMCH, Inc. d/b/a Triad Personnel Services, and BMCH PA, Inc. d/b/a Triad Temporaries (the “Account Purchase Agreement”). Incorporated by reference to Exhibit 10.01 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2011, Commission File No. 001-05707.

10.22		First Amendment to Account Purchase Agreement dated May 2, 2011. Incorporated by reference to Exhibit 10.22 to the Company’s Annual Report on Form 10-K filed with the SEC on March 29, 2013.

10.23		Second Amendment to Account Purchase Agreement dated as February 15, 2012. Incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K dated March 30, 2012, Commission File No. 001-05707.

10.24		Third Amendment to Account Purchase Agreement dated September 25, 2012. Incorporated by reference to Exhibit 10.24 to the Company’s Annual Report on Form 10-K filed with the SEC on March 29, 2013.

10.25		Fourth Amendment to Account Purchase Agreement dated December 14, 2012. Incorporated by reference to Exhibit 10.25 to the Company’s Annual Report on Form 10-K filed with the SEC on March 29, 2013.

10.26		Fifth Amendment to Account Purchase Agreement dated as January 14, 2013. Incorporated by reference to Exhibit 10.26 to the Company’s Annual Report on Form 10-K filed with the SEC on March 29, 2013.

10.27		Asset Purchase Agreement, dated as of August 31, 2011, by and among General Employment Enterprises, Inc., Ashley Ellis LLC and Brad A. Imhoff. Incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K dated September 7, 2011, Commission File No. 001-05707.

10.28		Registration Rights Agreement, dated as of August 31, 2011, by and between General Employment Enterprises, Inc. and Ashley Ellis LLC. Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated September 7, 2011, Commission File No. 001-05707.

10.29		Employment Agreement, dated as of August 31, 2011, by and between General Employment Enterprises, Inc. and Katy M. Imhoff. Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K dated September 7, 2011, Commission File No. 001-05707.

10.30		Change of Control Agreement, dated as of August 31, 2011, by and between General Employment Enterprises, Inc. and Katy M. Imhoff. Incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K dated September 7, 2011, Commission File No. 001-05707.

10.31		Employment Agreement, dated as of September 1, 2011, by and between General Employment Enterprises, Inc. and Salvatore J. Zizza. Incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K dated September 7, 2011, Commission File No. 001-05707.

10.32		Change of Control Agreement, dated as of September 1, 2011, by and between General Employment Enterprises, Inc. and Salvatore J. Zizza. Incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K dated September 7, 2011, Commission File No. 001-05707.

10.33		Employment Agreement, dated as of August 31, 2011, by and between General Employment Enterprises, Inc. and Brad A. Imhoff. Incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K dated September 7, 2011, Commission File No. 001-05707.

10.34		Change of Control Agreement, dated as of August 31, 2011, by and between General Employment Enterprises, Inc. and Brad A. Imhoff. Incorporated by reference to Exhibit 10.7 to the Company’s Current Report on Form 8-K dated September 7, 2011, Commission File No. 001-05707.



10.35		Registration Rights Agreement, effective as of December 30, 2010, by and among General Employment Enterprises, Inc., Triad Personnel Services, Inc., DMCC Staffing, LLC and RFFG of Cleveland, LLC. Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated January 5, 2011, Commission File No. 001-05707.

10.36		General Employment Enterprises, Inc. 2011 Incentive Plan. Incorporated by reference as Appendix B to the Company’s Proxy Statement dated January 23, 2012, Commission File No. 1-05707.*

10.37		Sixth Amendment to Account Purchase Agreement dated as March 27, 2013. Incorporated by reference to Exhibit 10.37 to the Company’s Annual Report on Form 10-K filed with the SEC on March 29, 2013.

10.38		Amended and Restated Employment Agreement with Brad A. Imhoff dated June 26, 2013. Incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed with the Commission on July 1, 2013.

10.39		Amended and Restated Employment Agreement with Katy Imhoff dated June 26, 2013. Incorporated by reference to Exhibit 10.2 to the Company’s Form 8-K filed with the Commission on July 1, 2013.

10.40		Executive Employment Agreement with Andrew Norstrud, dated March 29, 2013. Incorporated by reference to Exhibit 10.38 to the Company’s Form 10-Q filed with the Commission on August 15, 2013.

10.41		Amendment to Asset Purchase Agreement by and among DMCC Staffing, LLC, RFFG of Cleveland, LLC, the Company and Triad Personnel Services, Inc., dated April 17, 2013. Incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed with the Commission on April 24, 2013.

10.42		General Employment Enterprises, Inc. 2013 Incentive Stock Plan, effective July 23, 2013. Incorporated by reference as Exhibit A to the Company’s Proxy Statement dated August 21, 2013, Commission File No. 001-05707.*

10.43		Loan and Security agreement and between Keltic Financial Partners II, LLP and General Employment Enterprises Inc., Triad Personnel Services, Inc., BMPS, Inc., BMCH, Inc. d/b/a Triad Personnel Services, and BMCH PA, Inc., Triad Logistics (the “Loan Agreement”). Incorporated by reference to Exhibit 10.43 to the Company’s Form 10-K filed with the Commission on January 13, 2014.

10.44		Second Amendment to Loan and Security agreement and between ACF FINCO I LP (successor-in-interest to Keltic Financial Partners II, LP) and General Employment Enterprises Inc., Triad Personnel Services, Inc., BMPS, Inc., BMCH, Inc. d/b/a Triad Personnel Services, and BMCH PA, Inc., Triad Logistics (the “Loan Agreement”).

10.45		Securities Purchase Agreement by and between General Employment Enterprises, Inc. and Aracle SPF I, LLC dated March 31, 2014. Incorporated by reference to Exhibit 10.1 to the Company’s Form 10-Q filed with the Commission on May 20, 2014.

10.46		First Amendment and Waiver to the Loan and Security Agreement between General Employment Enterprises, Inc. and Keltic Financial Partners II, LP, dated September 27, 2013 Incorporated by reference to Exhibit 10.2 to the Company’s Form 10-Q filed with the Commission on May 20, 2014.

10.47		Convertible Note Issued to Brio Capital Master Fund, Ltd. Dated August 6, 2014. Incorporated by reference to Exhibit 10.1 to the Company’s Form 10-Q filed with the Commission on August 14, 2014.

10.48		Securities Purchase Agreement by and between General Employment Enterprises, Inc. and Brio Capital Master Fund, Ltd. dated August 6, 2014. Incorporated by reference to Exhibit 10.2 to the Company’s Form 10-Q filed with the Commission on August 14, 2014.

14.01		General Employment Enterprises, Inc. Code of Ethics for Directors, Officers and Employees, adopted as of August 16, 2004. Incorporated by reference to Exhibit 14.01 to the Company’s Form 8-K Current Report dated August 16, 2004, Commission File No. 1-05707.



23.01		Consent of Independent Registered Public Accounting Firm.

31.01		Certification of the principal executive officer required by Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act.

31.02		Certification of the principal financial officer required by Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act.

32.01		Certifications of the principal executive officer required by Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act and Section 1350 of Chapter 63 of Title 18 of the United States Code.

32.02		Certifications for the principal financial officer required by Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act and Section 1350 of Chapter 63 of Title 18 of the United States Code.

101.INS		XBRL Instant Document

101.SCH		XBRL Schema Document

101.CAL		XBRL Calculation Linkbase Document

101.DEF		XBRL Definition Linkbase Document

101.LAB		XBRL Label Linkbase Document

101.PRE		XBRL Presentation Linkbase Document


GENERAL EMPLOYMENT ENTERPRISES, INC.						TRIAD PERSONNEL SERVICES, INC.

By:						By:

Name:						Name:

Its:						Its:

Date:						Date:


BUSINESS MANAGEMENT PERSONNEL, INC.						BMPS, INC.

By:						By:

Name:						Name:

Its:						Its:

Date:						Date:


Date: December 22, 2014				/s/ Andrew J. Norstrud
				Andrew J. Norstrud Chief Executive Officer
				(Principal Executive Officer)

Goodwill and Intangible Assets - Schedule of Finite-Lived Intangible Assets (Detail) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Sep. 30, 2013
Finite-Lived Intangible Assets [Line Items]
Cost	$ 2,707	$ 2,707
Accumulated Amortization	1,147	823
Loss on Impairment of Intangible Assets
Net Book Value	1,560us-gaap_FiniteLivedIntangibleAssetsNet	1,884us-gaap_FiniteLivedIntangibleAssetsNet
Customer Relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Cost	2,690	2,690
Accumulated Amortization	1,137	816
Loss on Impairment of Intangible Assets
Net Book Value	1,553	1,874
Trade Name [Member]
Finite-Lived Intangible Assets [Line Items]
Cost	17	17
Accumulated Amortization	10	7
Loss on Impairment of Intangible Assets
Net Book Value	$ 7	$ 10

Income Taxes - Schedule of Deferred Income Tax Assets (Detail) (USD $)	Sep. 30, 2014	Sep. 30, 2013
Temporary differences
Stock option expense	$ 461,000	$ 326,000
Deferred compensation expense	24,000	(59,000)
Vacation expense	64,000	69,000
Intangible assets	107,000	107,000
Allowance for doubtful accounts	208,000	74,000
Other	5,000us-gaap_DeferredTaxAssetsOther	(49,000)us-gaap_DeferredTaxAssetsOther
Net operating loss carryforwards	4,956,000	4,292,000
Valuation allowances	(5,825,000)	(4,760,000)
Net deferred income tax asset	$ 0us-gaap_DeferredTaxAssetsNet	$ 0us-gaap_DeferredTaxAssetsNet

Stock Option Plans - Additional Information (Detail) (USD $)	12 Months Ended
	Sep. 30, 2014 Plan	Sep. 30, 2013	Jul. 23, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of plans approved by shareholders	4job_NumberOfPlansApprovedByShareholders
Stock option available for grant under the plan (in shares)	7,408,000	10,000,000
Aggregate intrinsic value of stock options exercised and outstanding (in dollars per share)	$ 0.21
Estimated average fair value of stock options grant (in dollars per share)	$ 0.21	$ 0.43
Stock option expense	$ 98,000us-gaap_ShareBasedCompensation	$ 68,000us-gaap_ShareBasedCompensation
Unrecognized compensation expense related to unvested stock options outstanding	$ 422,000
Weighted average vesting period of unvested stock options	1 year 6 months
Employee Stock Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expiration period of stock option from the date of grant	10 years
1997 Stock Option Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock option available for grant under the plan (in shares)	592,000
Stock option available for issuance under the plan (in shares)		0
Incentive Plan 2013 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock option available for issuance under the plan (in shares)			10,000,000

Income Taxes - Additional Information (Detail) (USD $)	12 Months Ended
Income Taxes - Additional Information (Detail) (USD $)	Sep. 30, 2014	Sep. 30, 2013
Operating Loss Carryforwards [Line Items]
Carrying value of deferred tax assets	$ 0us-gaap_DeferredTaxAssetsNet	$ 0us-gaap_DeferredTaxAssetsNet
Change in valuation allowance for net deferred tax assets	1,065,000	537,000
Federal Tax [Member]
Operating Loss Carryforwards [Line Items]
Losses available to reduce taxable income in future years	12,150,000
State Tax [Member]
Operating Loss Carryforwards [Line Items]
Losses available to reduce taxable income in future years	$ 10,800,000

Common Stock - Additional Information (Detail) (USD $)	0 Months Ended	12 Months Ended	0 Months Ended
Common Stock - Additional Information (Detail) (USD $)	Jul. 02, 2013	Sep. 30, 2014	Apr. 16, 2014 Unit	Mar. 31, 2014	Sep. 30, 2013	Sep. 09, 2013
Subsidiary, Sale of Stock [Line Items]
Common stock issued (in shares)	1,100,000
Price per share (in dollars per share)	$ 0.2999us-gaap_SaleOfStockPricePerShare
Proceeds from issuance of stock	$ 329,890
Common stock, shares authorized (in shares)		200,000,000us-gaap_CommonStockSharesAuthorized			200,000,000us-gaap_CommonStockSharesAuthorized
Preferred stock, shares authorized (in shares)		20,000,000us-gaap_PreferredStockSharesAuthorized			20,000,000us-gaap_PreferredStockSharesAuthorized
Expenses related to SPA		130,000
Net proceeds from SPA		470,000
Weighted average exercise price of outstanding warrants		$ 0.25
Investor [Member]
Subsidiary, Sale of Stock [Line Items]
Number of units purchased under SPA			2.5
Value of unit issued under SPA			125,000
Aracle SPF I, LLC [Member]
Subsidiary, Sale of Stock [Line Items]
Number of units purchased under SPA		9.5
Value of unit issued under SPA		$ 475,000		$ 50,000
Number of shares in an unit under SPA				250,000
Number of purchase warrants under SPA				125,000
Common stock warrant term				4 years
Exercise price per warrant share				$ 0.25
Additional shares issued				3,000,000
Weighted average exercise price of outstanding warrants		$ 0.25
Warrants granted, expiration date		Mar. 31, 2018
Minimum [Member]
Subsidiary, Sale of Stock [Line Items]
Common stock, shares authorized (in shares)						50,000,000
Preferred stock, shares authorized (in shares)						1,000,000
Warrants granted, expiration date		Mar. 31, 2018
Minimum [Member] \| Aracle SPF I, LLC [Member]
Subsidiary, Sale of Stock [Line Items]
Percentage of shares owned				51.00%
Maximum [Member]
Subsidiary, Sale of Stock [Line Items]
Common stock, shares authorized (in shares)						200,000,000
Preferred stock, shares authorized (in shares)						20,000,000
Warrants granted, expiration date		Feb. 07, 2020
Maximum [Member] \| Aracle SPF I, LLC [Member]
Subsidiary, Sale of Stock [Line Items]
Number of units purchased under SPA				12
Common stock price per share under SPA				$ 0.20
Percentage of shares issued under adjustment provision				19.90%

Significant Accounting Policies and Estimates - Additional Information (Detail) (USD $)	12 Months Ended
	Sep. 30, 2014 Segments	Sep. 30, 2013
Accounting Policies [Abstract]
Provision for falloffs and refunds in connection with placement service revenue	$ 939,000us-gaap_SalesAllowancesServices	$ 969,000us-gaap_SalesAllowancesServices
Insurance coverage limit at each financial institution		250,000
Cash equivalents	0us-gaap_CashEquivalentsAtCarryingValue	0us-gaap_CashEquivalentsAtCarryingValue
Allowance for doubtful accounts	395,000	272,000
Accounts receivables related to discontinued operations	265,000	35,000
Number of shares excluded from earnings (loss) per share calculation (in shares)	468,000	47,000
Advertising costs	$ 718,000us-gaap_AdvertisingExpense	$ 733,000us-gaap_AdvertisingExpense
Number of operating business segments	2us-gaap_NumberOfOperatingSegments

Stock Option Plans - Schedule of Stock Options Outstanding (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	12 Months Ended
	Sep. 30, 2014
Under $1.00 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of Exercise Prices, Minimum	$ 0.00
Range of Exercise Prices, Maximum	$ 1.00
Number Outstanding	3,404
Weighted Average Price	$ 0.32
Number Exercisable	1,455
Weighted Average Price	$ 0.38
Average Remaining Life	8 years 6 months
$1.01 to $2.39 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of Exercise Prices, Minimum	$ 1.01
Range of Exercise Prices, Maximum	$ 2.39
Number Outstanding	15
Weighted Average Price	$ 2.39
Number Exercisable	15
Weighted Average Price	$ 2.39
Average Remaining Life	3 years

Convertible Note - Summary of Convertible Note (Detail) (USD $)	0 Months Ended	12 Months Ended
	Aug. 07, 2014	Sep. 30, 2014
Equity Method Investments And Cost Method Investments [Abstract]
Original principal balance		$ 633,000us-gaap_DebtInstrumentFaceAmount
Debt discount for issuance costs and original discount		(105,000)
Debt discount for issuance of warrants		(219,000)job_DebtInstrumentDiscountOnIssuance
Debt discount for conversion feature		(178,000)
Total		131,000us-gaap_DerivativeLiabilities
Interest expense and amortization of debt discount	36,000	36,000
Balance at September 30, 2014		167,000us-gaap_ConvertibleDebt
Balance at September 30, 2014		167,000us-gaap_ConvertibleDebt
Current portion of convertible debt		(35,000)us-gaap_ConvertibleDebtCurrent
Total long-term portion of convertible debt, net of debt discount		$ 132,000us-gaap_ConvertibleDebtNoncurrent