GEE Group, Inc, (JOB) stock prices fell a daunting 20.56% on April 14th, coming to a market close of USD$0.85. This was followed by a devastating dip of more than 33% during pre-market hours, seeing the stock settling at USD$0.567.
JOB’s Public Offering
This development came after JOB announced the pricing of its public offering, wherein 83,333,333 shares of its common stock were made available for purchase at a price of USD$0.60 per share. Gross proceeds from this offering will amount to nearly USD$50 million, before the deduction of associated costs and the underwriting discount. An additional 12.5 million shares are set to cover over-allotments in a 45-day option granted to underwriters by JOB.
Allocation of Capital Raised
The capital generated will be used in conjunction with existing funds to offset an outstanding debt of USD$55 million, as per its Revolving Credit, Term Loan, and Security Agreement. Any capital left over will be put towards general working capital and prospective acquisitions. The offering is set to close on April 19th, 2021.
Improving Financials?
Q1 2021 reports indicate revenue of USD$3.6 million, an increase of 11.7% from Q4 2020, but an 8% decrease compared to the USD$37.6 million generated in Q1 2020. A major factor in decreased revenues is the pandemic, which had an adverse effect on the hiring of permanent and contract employees.
Comparative Financials 2020 vs 2021
GAAP income from operations for Q1 2021 was reported to be USD2 million, compared to a Q1 2020 report of a GAAP loss of USD$173,000. GAAP net loss for Q1 2021 was roughly USD$315,000 compared to an astounding USD$3.6 million loss in Q1 2020.
How has JOB Coped?
Nevertheless, JOB stock prices have been recovering over the course of the year since the pandemic hit. This is largely due to JOB adapting its strategic and operational procedures with the use of technology to offset the challenges presented by the pandemic.
JOB’s Outlook in a Pandemic Landscape
Moving forward, JOB plans to continue tackling the challenges presented by Covid by making use of the US governments PPP, lowering interest costs, deleveraging, and streamlining its capital structure. JOB and long-term investors hope these actions will strengthen future balance sheets and drive JOB stock prices up.
