HireQuest, Inc.

Previous wording

This Quarterly Report on Form 10-Q and other documents incorporated herein by reference include, and our officers and other representatives may sometimes make or provide, certain estimates and other forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act, and Section 21E of the Exchange Act, including, among others, statements with respect to future revenue; franchise sales and system-wide sales; net income and Adjusted EBITDA (a Non-GAAP Financial Measure); operating results; dividends and shareholder returns; statements regarding any proposed transaction; benefits and synergies of any proposed transaction and future opportunities, including statements regarding value, profitability or growth prospects; cost synergies of any mergers or acquisitions including those we have completed in 2023 and 2024; intended office openings or closings; expectations of the effect on our financial condition of claims and litigation; strategies for customer retention and growth; strategies for risk management; and all other statements that are not purely historical and that may constitute statements of future expectations. Forward-looking statements can be identified by words such as: “anticipate,” “intend,” “plan,” “goal,” “seek,” “believe,” “project,” “estimate,” “expect,” “strategy,” “future,” “likely,” “may,” “should,” “will,” and similar references to future periods.

Current wording

This Quarterly Report on Form 10-Q and other documents incorporated herein by reference include, and our officers and other representatives may sometimes make or provide, certain estimates and other forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act, and Section 21E of the Exchange Act, including, among others, statements with respect to future revenue; franchise sales and system-wide sales; net income and Adjusted EBITDA (a non-GAAP Financial Measure); operating results; dividends and shareholder returns; anticipated benefits and synergies of any proposed transaction and future opportunities, including statements regarding value, profitability or growth prospects; cost synergies of any mergers or acquisitions including those we have completed in 2023 and 2024; intended office openings or closings; expectations of the effect on our financial condition of claims and litigation; strategies for customer retention and growth; strategies for risk management; and all other statements that are not purely historical and that may constitute statements of future expectations. Forward-looking statements can be identified by words such as: “anticipate,” “intend,” “plan,” “goal,” “seek,” “believe,” “project,” “estimate,” “expect,” “strategy,” “future,” “likely,” “may,” “should,” “will,” and similar references to future periods.

Previous wording

While we believe these statements are accurate, forward-looking statements are not historical facts and are inherently uncertain. They are based only on our current beliefs, expectations, and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy, and other future conditions. We cannot assure you that these expectations will occur, and our actual results may be significantly different. Therefore, you should not place undue reliance on these forward-looking statements. Important factors that may cause actual results to differ materially from those contemplated in any forward-looking statements made by us include the following: the level of demand and financial performance of the temporary staffing and permanent placement industry; the financial performance of our franchisees; our and our franchisees’ customers’ ability to navigate successfully the challenges posed by instability in the financial and capital markets and the overall economic environment including the impact of any potential recession; the possibility that any strategic target will not agree to consummate a transaction or that any such transaction is consummated on different terms than currently anticipated; the possibility that conditions to the completion of a proposed transaction, including the receipt of any required shareholder approvals and any required regulatory approvals, will not be met; the possibility that we may be unable to achieve expected synergies and operating efficiencies within an expected time frame or at all and to successfully integrate any acquired operations with ours; the possibility that such integration may be more difficult, time-consuming, or costly than expected, or that operating costs, customer loss and business disruption (including, without limitation, difficulties in maintaining relationships with employees, customers, or suppliers) may be greater than expected following a proposed transaction or the public announcement of a proposed transaction; strategic actions, including acquisitions and dispositions and our success in integrating acquired businesses including, without limitation, successful integration following the acquisitions of Ready Temporary Staffing, TEC Staffing Services, MRI Network, Snelling Staffing, LINK, Recruit Media, Dental Power, Temporary Alternatives, Inc., and subsequent or smaller acquisitions; changes in customer demand; the extent to which we are successful in gaining new long-term relationships with customers or retaining existing ones: the level of service failures that could lead customers to use competitors’ services; workers' compensation expenses that fluctuate from period to period based on the mix of classifications, the level of payroll, recent claims resolution and cumulative experience; significant investigative or legal proceedings including, without limitation, those brought about by the existing regulatory environment or changes …

Excerpt shortened here; the source contains the full paragraph.

Current wording

While we believe these statements are accurate, forward-looking statements are not historical facts and are inherently uncertain. They are based only on our current beliefs, expectations, and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy, and other future conditions. We cannot assure you that these expectations will materialize, and our actual results may be significantly different. Therefore, you should not place undue reliance on these forward-looking statements. Important factors that may cause actual results to differ materially from those contemplated in any forward-looking statements made by us include the following: the level of demand for and financial performance of the temporary staffing and permanent placement industry; the financial performance of our franchisees; our franchisees’ and our customers’ ability to navigate successfully the challenges posed by instability in the financial and capital markets and the overall economic environment including increases in the price of oil and gas and any potential recession; changes in customer demand; the extent to which we are successful in gaining new long-term relationships with customers or retaining existing ones, and the level of service failures that could lead customers to use competitors’ services; workers’ compensation expenses that fluctuate from period to period based on the mix of classifications, the level of payroll, recent claims resolution, and cumulative experience; significant investigative or legal proceedings including, without limitation, those brought about by the existing regulatory environment or changes in the regulations governing the temporary staffing and permanent placement industry and those arising from the action or inaction of our franchisees and temporary employees; strategic actions, including acquisitions and dispositions and our success in integrating acquired businesses including, without limitation, successful integration following the acquisitions of Ready Temporary Staffing, TEC Staffing Services, MRINetwork, Snelling Staffing, LINK Staffing, Recruit Media, Inc., Dental Power Staffing, Temporary Alternatives, Inc., and subsequent or smaller acquisitions; the possibility that any strategic target will not agree to consummate a transaction or that any such transaction is consummated on different terms than currently anticipated; the possibility that conditions to the completion of a proposed transaction, including the receipt of any required shareholder approvals and any required regulatory approvals, will not be met; the possibility that we may be unable to achieve expected synergies and operating efficiencies within an expected time frame or at all and to successfully integrate any acquired operations with ours; the possibility that such integration may be more difficult, time-consuming, or costly than expected, or that operating costs, customer loss and business d…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

As of September 30, 2025, we had 399 franchisee-owned offices and 1 company-owned office in 43 states, the District of Columbia, and 13 countries outside of the United States, and we licensed our trade names to 6 offices in California. In addition, on such date, there were 12 MRI locations that provided contract staffing services only. We provide employment for an estimated 65 thousand temporary employees annually working for thousands of clients in many industries including construction, healthcare, recycling, warehousing, logistics, auctioneering, manufacturing, hospitality, landscaping, retail, and dental.

Current wording

As of March 31, 2026, we had 257 franchisee-owned offices and 1 company-owned office in 39 states, the District of Columbia, and 1 country outside of the United States. We provide employment for an estimated 75 thousand temporary employees annually working for thousands of clients in many industries including construction, healthcare, recycling, warehousing, logistics, auctioneering, manufacturing, hospitality, landscaping, retail, and dental.

Previous wording

The following table displays our Consolidated Statements of Operations for the three and nine months ended September 30, 2025 and September 30, 2024. Percentages reflect the line item as a percentage of total revenue (in thousands, except percentages).

Current wording

The following table displays our Consolidated Statements of Income for three months ended March 31, 2026 and March 31, 2025. Percentages reflect the line item as a percentage of total revenue.

Previous wording

In addition, our Credit Agreement requires us to comply with a fixed charge coverage ratio and a leverage ratio, both of which include Adjusted EBITDA substantially as defined above. For all of these reasons, we believe that Adjusted EBITDA provides us, and investors, with information that is relevant and useful in evaluating our business.

Current wording

In addition, our Revolving Credit Agreement with Bank of America, N.A. (our “Credit Agreement”) requires us to comply with a fixed charge coverage ratio and a leverage ratio, both of which include Adjusted EBITDA substantially as defined above. For all of these reasons, we believe that Adjusted EBITDA provides us, and investors, with information that is relevant and useful in evaluating our business.

Previous wording

Franchise royalties for the three months ended September 30, 2025 were approximately $8.1 million, a decrease of approximately 9.8% from $9.0 million for the three months ended September 30, 2024. The relative decrease in franchise royalties approximates the decrease in system-wide-sales. A summary of franchise royalties by brand for the three months ended September 30, 2025 and September 30, 2024 follows:

Current wording

Franchise royalties for the three months ended March 31, 2026 were approximately $6.1 million, a decrease of approximately 12.9% from $7.0 million for the three months ended March 31, 2025. The decrease in royalties was largely due to the loss of $506 thousand in royalties related to the MRINetwork assets divestiture, and a decrease in HireQuest Direct royalties that approximates the decrease in system-wide-sales. A summary of franchise royalties by brand for the three months ended March 31, 2026 and March 31, 2025 follows:

Previous wording

Service revenue consists of interest we charge our franchisees on overdue customer accounts receivable and other miscellaneous fees for optional services we provide. Direct costs to provide certain services are reflected as a reduction in service revenue. As accounts receivable age over 42 days, our franchisees pay us interest on these accounts equal to 0.5% of the amount of the uncollected receivable each 14-day period. All accounts that age beyond 84 days are charged back to the franchisee and no longer incur interest, although some of our franchisees elect to charge back accounts that age over 42 days in order to avoid the interest charge. In addition to royalty fees, we also charge a license fee to some locations that utilize our intellectual property that are not franchisees. License fees are 9% of the gross margin for those locations. We have no employees and provide no services at the licensed locations. Service revenue also includes amounts charged for various optional services and cost-sharing arrangements such as bulk vendor programs or IT license blocks. Generally, we do not profit from these arrangements as they represent pass-through items, although there may be timing differences. In addition, there are occasionally classification differences where the cost is embedded in selling, general and administrative expenses.

Current wording

Service revenue consists of interest we charge our franchisees on overdue customer accounts receivable and other miscellaneous fees for optional services we provide. Direct costs to provide certain services are reflected as a reduction in service revenue. As accounts receivable age over 42 days, our franchisees pay us interest on these accounts equal to 0.5% of the amount of the uncollected receivable each 14-day period. All accounts that age beyond 84 days are charged back to the franchisee and no longer incur interest, although some of our franchisees elect to charge back accounts that age over 42 days in order to avoid the interest charge. Fees related to the MRINetwork national advertising fund are also included in service revenue. We do not profit from this fee as it represents pass-though items. As of January 1, 2026, all franchisees that had franchise agreements with the MRINetwork national advertising fund fee were divested to a new entity so going forward service revenue will no longer include such fees as a component. MRINetwork national advertising fund fees were $0 for the three months ended March 31, 2026, compared to $74 thousand for the three months ended March 31, 2025. Service revenue also includes amounts charged for various optional services and cost-sharing arrangements such as bulk vendor programs or IT license blocks. Generally, we do not profit from these arrangements as they represent pass-through items, although there may be timing differences. In addition, there are occasionally classification differences where the cost is embedded in selling, general and administrative expenses.

Previous wording

Service revenue for the three months ended September 30, 2025 was approximately $387 thousand, a decrease of $41 thousand from the three months ended September 30, 2024, when service revenue was approximately $428 thousand. Interest income on overdue customer accounts receivable, which is included in service revenue was $231 thousand for the three months ended September 30, 2025 and $197 thousand for the three months ended September 30, 2024. Fluctuations in interest generally follow the mix of aged accounts in our accounts receivable, although relatively few age over 42 days and result in service revenue for us. Many of our franchisees have elected tocharge back accounts early in order to avoid or reduce the interest charge. Therefore, there will not be a proportionally large increase in service revenue even when there is a large increase in accounts receivable. We pride ourselves on maintaining quality, creditworthy customers who pay timely. We view the imposition of higher interest rates on aged accounts receivable to serve as an incentive for our franchisees to select credit-worthy customers. Service revenue is expected to fluctuate from quarter-to-quarter.

Current wording

Service revenue for the three months ended March 31, 2026 was approximately $462 thousand, a decrease of $50 thousand from the three months ended March 31, 2025, when service revenue was approximately $512 thousand. Interest income on overdue customer accounts receivable, which is included in service revenue was $203 thousand for the three months ended March 31, 2026 and $240 thousand for the three months ended March 31, 2025. Fluctuations in interest generally follow the mix of aged accounts in our accounts receivable, although relatively few age over 42 days and result in service revenue for us. Many of our franchisees have elected tocharge back accounts early in order to avoid or reduce the interest charge. Therefore, there will not be a proportionally large increase in service revenue even when there is a large increase in accounts receivable. We pride ourselves on maintaining quality, creditworthy customers who pay timely. We view the imposition of higher interest rates on aged accounts receivable to serve as an incentive for our franchisees to select credit-worthy customers. Service revenue is expected to fluctuate from quarter-to-quarter.

Previous wording

Workers' compensationbenefitwas approximately $99 thousand for the three months ended September 30, 2025, a decrease of $598 thousand when compared to a netexpense of approximately $499 thousand recorded in the three months ended September 30, 2024. Our workers' compensation reserves provide benefits following a workplace injury. Benefits are usually statutory in nature and are generally provided in partial or complete replacement of the injured worker’s recourse to the liability system. Payments may include medical treatment, rehabilitation, lost wages, and survivor benefits. Workers compensation rating is typically based on job classification, and our workers fall in hundreds of classifications. Annually, we use third-party actuaries to ensure that the overall ratings are sound, that individual insurer rates are adequate, and that individual risks receive a fair rate that reflects both the characteristics of the job classification and the Company's risk experience. The company pays premiums, actual claims, and establishes reserves for future claims. In turn we charge our franchises a percentage of payroll as determined by our workers' compensation carrier, plus or minus certain incentives and charges we provide for good or bad workers' compensation claims history. The overall charge is an estimate of the fully developed future costs and may not always coincide with the actual costs we incur resulting in expense or benefit in a given period. Over the long-term, our workers' compensation expense should equal the amounts we collect from franchisees and essentially be a pass-through cost. In the short-term, we cannot accurately predict the effects of workers' compensation in specific future periods, and historical trends are not indicative of future results.

Current wording

Net workers' compensationexpensewas approximately $39 thousand for the three months ended March 31, 2026, compared to $28 thousand recorded in the three months ended March 31, 2025. Our workers' compensation reserves provide benefits following a workplace injury. Benefits are usually statutory in nature and are generally provided in partial or complete replacement of the injured worker’s recourse to the liability system. Payments may include medical treatment, rehabilitation, lost wages, and survivor benefits. Workers compensation rating is typically based on job classification, and our workers fall in hundreds of classifications. Annually, we use third-party actuaries to ensure that the overall ratings are sound, that individual insurer rates are adequate, and that individual risks receive a fair rate that reflects both the characteristics of the job classification and the Company's risk experience. The company pays premiums, actual claims, and establishes reserves for future claims. In turn we charge our franchises a percentage of payroll as determined by our workers' compensation carrier, plus or minus certain incentives and charges we provide for good or bad workers' compensation claims history. The overall charge is an estimate of the fully developed future costs and may not always coincide with the actual costs we incur resulting in expense or benefit in a given period. Over the long-term, our workers' compensation expense should equal the amounts we collect from franchisees and essentially be a pass-through cost. In the short-term, we cannot accurately predict the effects of workers' compensation in specific future periods, and historical trends are not indicative of future results.

Previous wording

Compensation-related expenses include wages, payroll taxes, benefits, and stock-based compensation. Compensation and benefits for the three months ended September 30, 2025 was approximately $2.7 million, a decrease of $152 thousand when compared to $2.8 million for the three months ended September 30, 2024.

Current wording

Compensation-related expenses include wages, payroll taxes, benefits, and stock-based compensation. Compensation and benefits for the three months ended March 31, 2026 were approximately $2.3 million, a decrease of $535 thousand when compared to $2.9 million for the three months ended March 31, 2025. The decrease in compensation and benefits was primarily driven by the elimination of expenses related to the MRINetwork assets divestiture for the three months ended March 31, 2026, which accounted for $365 thousand in three months ended March 31, 2025.

Previous wording

Depreciation and amortization for the three months ended September 30, 2025 was approximately $752 thousand compared to $697 thousand for the three months ended September 30, 2024. This increase is primarily the result of an IT project being placed in service causing amortization to begin.

Current wording

Depreciation and amortization for the three months ended March 31, 2026 was approximately $778 thousand compared to $734 thousand for the three months ended March 31, 2025. This increase is primarily the result of increased amortization related to shortening the estimated useful life of the MRI franchise agreements.

Previous wording

For the nine months ended September 30, 2025, other miscellaneous* income was approximately $195 thousand, compared to other miscellaneous income of $12 thousand for the nine months ended September 30, 2024. This change was primarily driven by againof $103 thousand on the disposal of a franchise business we took control of and then sold to another franchisee during the period ended September 30, 2025 compared to aloss*of $100 thousand on the disposal of a franchise business we took control of and then sold to another franchisee in the period ended September 30, 2024.

Current wording

For the three months ended March 31, 2026, other miscellaneous* income* was approximately $16 thousand, compared to other miscellaneousincome of $131 thousand for the three months ended March 31, 2025. During the period ended March 31, 2025, we recognized a gain on the disposal of a franchise business we took control of and then sold to another franchisee in the same period.

Previous wording

Interest income for the three months ended September 30, 2025 was approximately $131 thousand compared to $138 thousand for the three months ended September 30, 2024. Interest income represents interest related to the financing of franchised locations.

Current wording

Interest income for the three months ended March 31, 2026 was approximately $101 thousand compared to $134 thousand for the three months ended March 31, 2025. Interest income represents interest related to the financing of franchised locations.

Previous wording

Interest and other financing expense relates primarily to the Credit Agreement with Bank of America, N.A. Interest and other financing expense decreased from $268 thousand for the three months ended September 30, 2024 to $63 thousand for the three months ended September 30, 2025. Interest and other financing expense will fluctuate as we utilize the line of credit for acquisitions or other short-term liquidity needs. The decrease in interest expense is consistent with the decrease in the outstanding line of credit balance.

Current wording

Interest and other financing expense relates primarily to the Credit Agreement. Interest and other financing expense decreased from $144 thousand for the three months ended March 31, 2025 to $8 thousand for the three months ended March 31, 2026. Interest and other financing expense will fluctuate as we utilize the line of credit for acquisitions or other short-term liquidity needs. The decrease in interest expense is consistent with the decrease in the outstanding line of credit balance.

Previous wording

Income tax expense was approximately $137 thousand for the three months ended September 30, 2025. We estimate an annual projected effective tax rate ("ETR") for the year to determine income tax expense or benefit in the interim periods. The estimated annual ETR does not include tax effects from significant unusual or infrequently occurring items. Such items are accounted for discretely during the period in which they occur. The ETR is primarily driven by the federal WOTC, which is included as part of income tax expense because it can be claimed only on the income tax return and can be realized only through the existence of taxable income. Other significant items affecting our tax rate are windfall tax deductions related to stock-based compensation, and overall limits on executive compensation. Our net ETR for the three months ended September 30, 2025 was 5.4%.

Current wording

Income tax expense was approximately $264 thousand for the three months ended March 31, 2026. Our net ETR for the three months ended March 31, 2026 was 14.4%. We estimate an annual projected effective tax rate ("ETR") for the year to determine income tax expense or benefit in the interim periods. The estimated annual ETR does not include tax effects from significant unusual or infrequently occurring items. Such items are accounted for discretely during the period in which they occur. The ETR is primarily driven by federal hiring credits, which is included as part of income tax expense because it can be claimed only on the income tax return and can be realized only through the existence of taxable income. Other significant items affecting our tax rate result from state income taxes, certain non-deductible expenses, and tax effects of stock-based compensation.

Previous wording

Income taxbenefit for the three months ended September 30, 2024 was approximately $725 thousand. Our net ETR for the three months ended September 30, 2024 was 25.1%. The decrease in the net ETR was driven by the level of WOTCs applied during the three months ended September 30, 2025.

Current wording

Income tax expense for the three months ended March 31, 2025 was approximately $169 thousand. Our net ETR for the three months ended March 31, 2025 was 10.5%. The increase in the net ETR was driven by the level of hiring credits applied during the three months ended March 31, 2025.

Previous wording

At September 30, 2025, our current assets exceeded our current liabilities by approximately $31.3 million. Our current assets included approximately $1.1 million of cash and $46.9 million of net accounts receivable, which our franchisees have billed to customers and which we own in accordance with our franchise agreements. Our largest current liabilities as of September 30, 2025 included approximately $11.6 million due to our franchisees on pending settlement statements, $3.2 million related to our workers’ compensation claims liability, and $2.2 million of borrowings under our line of credit.

Current wording

At March 31, 2026, our current assets exceeded our current liabilities by approximately $32.5 million. Our current assets included approximately $1.0 million of cash and $44.7 million of net accounts receivable, which our franchisees have billed to customers and which we own in accordance with our franchise agreements. Our largest current liabilities as of March 31, 2026 included approximately $10.5 million due to our franchisees on pending settlement statements and $2.9 million related to our workers’ compensation claims liability.

Previous wording

During the nine months ended September 30, 2025, cash provided by continuing operations was approximately $5.5 million and included net income from continuing operations of approximately $4.9 million, adjusted by non-cash items (primarily depreciation and stock-based compensation) of approximately $3.7 million. These provisions were offset by changes in operating assets and liabilities requiring cash of approximately $3.1 million. During the nine months ended September 30, 2024, cash provided by continuing operating activities was approximately $3.5 million and included net income from continuing operations of approximately $1.6 million, adjusted by non-cash items of approximately $8.4 million (primarily goodwill and intangible asset impairment, depreciation and stock-based compensation). These provisions were partially offset by changes in operating assets and liabilities requiring cash (primarily accounts receivable) of approximately $6.5 million.

Current wording

During the three months ended March 31, 2026, cash provided by continuing operations was approximately $259 thousand and included net income from continuing operations of approximately $1.6 million, adjusted by non-cash items (primarily depreciation, gain of divestiture of business, and stock-based compensation) of approximately $587 thousand. These provisions were offset by changes in operating assets and liabilities requiring cash (primarily accounts receivable) of approximately $1.9 million. During the three months ended March 31, 2025, cash provided by continuing operating activities was approximately $1.9 million and included net income from continuing operations of approximately $1.4 million, adjusted by non-cash items of approximately $1.3 million (depreciation, deferred taxes. and stock-based compensation). These provisions were partially offset by changes in operating assets and liabilities requiring cash (primarily prepaid expenses) of approximately $770 thousand.

Previous wording

During the nine months ended September 30, 2025, cash provided by investing activities was approximately $679 thousand, primarily from payments on notes receivable of approximately $1.1 million. These provisions were offset by cash issued for notes receivable of approximately $322 thousand. During thenine months ended September 30, 2024, cash provided by investing activities was approximately $557 thousand, primarily from payments on notes receivable of approximately $1.2 million. These provisions were offset by an investment in an intangible asset of approximately $338 thousand.

Current wording

During the three months ended March 31, 2026, cash used by investing activities was approximately $435 thousand, primarily from cash issued for notes receivable of approximately $398 thousand, and capital contribution to unconsolidated affiliate of approximately $192 thousand. These provisions were offset by cash received from payments on notes receivable of approximately $148 thousand. During thethree months ended March 31, 2025, cash provided by investing activities was approximately $316 thousand, primarily from payments on notes receivable of approximately $362 thousand.

Previous wording

During the nine months ended September 30, 2025, cash used by financing activities was approximately $7.2 million and included net payments on our revolving line of credit of approximately $4.6 million and the payment of approximately $2.5 million in dividends. During the nine months ended September 30, 2024, cash used by financing activities was approximately $3.7 million and included the payment of dividends totaling approximately $2.5 million andnet payments on our revolving line of credit of approximately $717 thousand.

Current wording

During the three months ended March 31, 2026, cash used by financing activities was approximately $2.7 million and included purchase of treasury stockof approximately $1.9 million and the payment of approximately $838 thousand in dividends. During the three months ended March 31, 2025, cash used by financing activities was approximately $2.3 million and included the payment of dividends totaling approximately $842 thousand andnet payments on our revolving line of credit of approximately $1.4 million.

Previous wording

On February 28, 2023 the Company and all of its subsidiaries as borrowers (collectively, the "Borrowers") entered into a Revolving Credit Agreement with Bank of America, N.A. (the "Bank") for a $50,000,000 revolving facility (the “Senior Credit Facility”), which includes a $20,000,000 sublimit for the issuance of standby letters of credit. The Company also has a one-time right, upon at least ten business days’ prior written notice to the Bank to increase the maximum amount of the Senior Credit Facility to $60 million. The Senior Credit Facility provides for certain financial covenants including maintaining an Asset Coverage Ratio of at least 1.0:1.0 at all times; maintaining a Total Funded Debt to Adjusted EBITDA Ratio not exceeding 3.0:1.0; and maintaining, on a consolidated basis, a Fixed Charge Coverage Ratio of at least 1.25:1.0. Interest will accrue on the outstanding balance of the Senior Credit Facility at a variable rate equal to (a) the Term SOFR Daily Floating Rate plus a margin between 1.00% and 1.75% per annum. In each case, the applicable margin is determined by the Company's Total Funded Debt to Adjusted EBITDA, as defined in the related credit agreement (the "Credit Agreement"). The Senior Credit Facility will mature on February 28, 2028.

Current wording

On February 28, 2023 the Company and all of its subsidiaries as borrowers (collectively, the "Borrowers") entered into a Revolving Credit Agreement with Bank of America, N.A. (the "Bank") for a $50,000,000 revolving facility (the “Senior Credit Facility”), which includes a $20,000,000 sublimit for the issuance of standby letters of credit. The Company also has a one-time right, upon at least ten business days’ prior written notice to the Bank to increase the maximum amount of the Senior Credit Facility to $60 million. The Senior Credit Facility provides for certain financial covenants including maintaining an Asset Coverage Ratio of at least 1.0:1.0 at all times; maintaining a Total Funded Debt to Adjusted EBITDA Ratio not exceeding 3.0:1.0; and maintaining, on a consolidated basis, a Fixed Charge Coverage Ratio of at least 1.25:1.0. Interest will accrue on the outstanding balance of the Senior Credit Facility at a variable rate equal to (a) the Term SOFR Daily Floating Rate plus a margin between 1.00% and 1.75% per annum. In each case, the applicable margin is determined by the Company's Total Funded Debt to Adjusted EBITDA, as defined in the Credit Agreement. The Senior Credit Facility will mature on February 28, 2028.

Previous wording

The Company utilized the proceeds of the Senior Credit Facility (i) first to pay off its existing credit agreement with Truist (described below), (ii) second, to pay off its existing term loan with Truist (described below), and (iii) third, to pay transaction fees and expenses incurred in connection with closing the transactions described above. The Company intends to utilize the proceeds of any loans made under the Senior Credit Facility for working capital, required letters of credit, and general corporate purposes in accordance with the terms of the Senior Credit Facility.

Current wording

The Company intends to utilize the proceeds of any loans made under the Senior Credit Facility for transaction fees and expenses incurred in connection with strategic acquisitions and dispositions, working capital, required letters of credit, and general corporate purposes in accordance with the terms of the Senior Credit Facility.

Previous wording

At September 30, 2025, availability under the Senior Credit Facility was approximately$42.5 million based on eligible collateral, less letter of credit reserves, bank product reserves, and current advances, assuming continued covenant compliance. Our all-in-rate of borrowing was 5.3% and is repriced daily.

Current wording

At March 31, 2026, availability under the Senior Credit Facility was approximately$40.3 million based on eligible collateral, less letter of credit reserves, bank product reserves, and current advances, assuming continued covenant compliance. Our all-in-rate of borrowing was 4.7% and is repriced daily.

Previous wording

Recent shifts in U.S. government policies towards isolationism and trade protectionism, along with potential future shifts in policy, may lead to uncertainty in the economy which may impact whether businesses in many industries choose to expand operations or preserve resources which, in turn, may affect the market for temporary or permanent placement services. The recent imposition of and continuing negotiations with respect to tariffs and their effect on the overall economy of the United States could impact our share price as well as our results of operations.

Current wording

Recent shifts in U.S. government policies towards isolationism, trade protectionism, immigration policy, and other potential future shifts in policy, may lead to uncertainty in the economy which may impact whether businesses in many industries choose to expand operations or preserve resources which, in turn, may affect the market for temporary or permanent placement services. The imposition of, striking down by the United States Supreme Court, and continuing negotiations with respect to tariffs and their effect on the overall economy of the United States could impact our share price as well as our results of operations. In addition, the recent joint U.S.-Israeli strikes on Iran beginning in February 2026, as well as other conflicts in the Middle East, have led to higher oil prices and created supply imbalances in the global market for oil and natural gas.

Previous wording

In addition, the Russian invasion of Ukraine and the resulting economic sanctions imposed by the United States and other countries, along with certain international organizations, continue to impact the global economy, including by exacerbating inflationary pressures created by COVID-related supply chain disruptions, and have given rise to potential global security issues that have adversely affected and may continue to adversely affect international business and economic conditions. Furthermore, the threat of a wider war in the Middle East after the Hamas terrorist attacks on Israel could affect oil prices and have other effects on the global economy. Although we have no operations in Russia or Ukraine or in the Middle East certain of our or our franchisees’ customers may have been or may in the future be impacted by these events. The ongoing effects of the hostilities and sanctions are no longer limited to companies from such regions and have spilled over to and negatively impacted other regional and global economic markets.

Current wording

The extent and duration of these effects cannot be reliably predicted, and the U.S.-Israeli strikes may have other adverse effects on the global economy. The Russian invasion of Ukraine and the resulting economic sanctions imposed by the United States and other countries, along with certain international organizations, continue to impact the global economy, and have given rise to potential global security issues that have adversely affected and may continue to adversely affect international business and economic conditions. Furthermore, the threat of a wider war in the Middle East could further affect oil prices and have other effects on the global economy. Although we have no operations in the Middle East, Russia, or Ukraine, certain of our or our franchisees’ customers may have been or may in the future be impacted by these events. The ongoing effects of the hostilities and sanctions are no longer limited to companies from such regions and have spilled over to and negatively impacted other regional and global economic markets.

Previous wording

For the nine months ended September 30, 2025, nearly all of our offices were franchised with the only exceptions being a portion of the Dubin operations acquired in the first quarter of 2022. The following table reflects our system-wide sales broken into its components for each period indicated. The Dubin operations are presented in the consolidated financial statements as discontinued operations because they are considered held-for-sale, but their system-wide sales are reflected along with all other offices in the table below. Percentages indicate the change in system-wide sales relative to the comparable prior period.

Current wording

For the three months ended March 31, 2026, nearly all of our offices were franchised with the only exceptions being a portion of the Dubin operations acquired in the first quarter of 2022. The following table reflects our system-wide sales broken into its components for each period indicated. The Dubin operations are presented in the consolidated financial statements as discontinued operations because they are considered held-for-sale, but their system-wide sales are reflected along with all other offices in the table below. Percentages indicate the change in system-wide sales relative to the comparable prior period.

Previous wording

The following table accounts for the number of offices opened and closed or consolidated during the nine months ended September 30, 2025:

Current wording

The following table accounts for the number of offices opened and closed or consolidated during the three months ended March 31, 2026: