Quarterly report pursuant to Section 13 or 15(d)

Contingencies and Commitments

Contingencies and Commitments
6 Months Ended
Mar. 31, 2013
Contingencies and Commitments [Abstract]  
Contingencies and Commitments
8. 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"), General Employment Enterprises, Inc., an Illinois corporation ("Parent"), and Triad Personnel Services, Inc., an Illinois corporation and wholly owned subsidiary of Parent ("Buyer").

The Company has agreed to pay Sellers additional cash consideration of between $550,000 and $650,000 depending on the length of payment term and 1,100,000 shares of Parent common stock, which at the time was valued at approximately $320,000 for full satisfaction of all amounts owed to Seller, related to the Asset Purchase Agreement.  The Company has accrued approximately $870,000 in short term liabilities.

As with any asset purchase of a business the purchaser may be held accountable for the seller's debts and liabilities where; (i) there is an express or implied agreement of assumption; (ii) the transaction amounts to a de facto consolidation or merger of the buyer or seller corporation; (iii) the purchaser is merely a continuation of the seller; or (iv) the transaction is for the fraudulent purpose of escaping liability for the seller's obligations. There are always several factors in the determination of any successor corporation legal liabilities related to the predecessor company. Other than the Ohio Bureau of Workers Compensation, the Company has not been noticed of any additional claims, however additional claims could be material to the business.


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 2015. The leases generally provide for payment of basic rent plus a share of building real estate taxes, maintenance costs and utilities.

Rent expense was approximately $278,000 and $555,000 and $224,000 and $445,000 for the three and six month periods ended March 31, 2013 and March 31, 2012, respectively. As of March 31, 2013, future minimum lease payments due under non-cancelable lease agreements having initial terms in excess of one year, including certain closed offices, totaled approximately $2,322,000, as follows: fiscal 2013 - $527,000, fiscal 2014 - $763,000, fiscal 2015 - $521,000, fiscal 2016 - $236,000 and thereafter - $275,000.