Quarterly report pursuant to Section 13 or 15(d)

Commitments and Contingencies

Commitments and Contingencies
6 Months Ended
Mar. 31, 2015
Notes to Financial Statements  
Commitments and Contingencies

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. The Company elected to pay the amount over two years. To date, the Company paid $333,000 of the cash consideration noted above. The Company has approximately $102,000, which is included in other current liabilities on the condensed consolidated balance sheet at March 31, 2015, for the liability. There was approximately $17,000 and $35,000 of interest recorded for the three and six month periods ended March 31, 2015 and approximately $20,000 and $46,000 of interest recorded for the three and six months periods ended March 31, 2014, respectively.


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 March 31, 2015, approximately $45,000 is included in other current liabilities related to this transaction.




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 $181,000 and $386,000 and $220,000 and $457,000 for the three and six month periods ended March 31, 2015 and 2014, respectively. As of March 31, 2015, future minimum lease payments due under non-cancelable lease agreements having initial terms in excess of one year, including certain closed offices, totaled approximately $800,000, as follows: fiscal 2015 - $197,000, fiscal 2016 - $323,000, fiscal 2017 - $164,000, fiscal 2018 - $89,000 and thereafter - $27,000.