GEE Group received and signed a commitment letter for a $20 million asset-based senior secured revolving credit facility from CIT, who will also serve as administrative and collateral agent and sole lead arranger. The CIT Facility will be collateralized by 100% of the assets of the Company and its subsidiaries who will act as co-borrowers and guarantors. The CIT Facility will have a term that matures at the earlier of 180 days prior to the maturity date of the existing term loan or any indebtedness that refinances such term loan and the fifth anniversary of the closing date. Once closed, the CIT Facility will replace the Company's current asset-based lending credit facility ("ABL").

Under the CIT Facility, advances will be subject to a borrowing base formula that will be computed based on 85% of eligible accounts receivable of GEE Group and subsidiaries in general and as further defined in the loan documents, and subject to certain other criteria, conditions and applicable reserves, including any additional eligibility requirements as determined by the administrative agent. The CIT Facility will be subject to usual and customary covenants and events of default for credit facilities of this type. The interest rate, at GEE Group's election, will be based on either the Base Rate, as defined, plus the applicable margin; or, the London Interbank Offering Rate ("LIBOR" or any successor thereto) for the applicable interest period, subject to a 1% floor, plus the applicable margin. Based upon the Company's anticipated amount of borrowings under the CIT Facility, the estimated effective interest rate is expected to be in the range of approximately 4% to approximately 5.25%, based on the three months LIBOR rate as of March 26, 2021. This compares to an approximately 11% interest rate currently paid on the Company's present ABL. In addition to interest costs on advances outstanding, the CIT Facility provides for an unused line fee ranging from 0.375% to 0.50% depending on the amount of undrawn credit, original issue discount and certain fees for diligence, implementation and administration.

Derek Dewan, GEE Group's Chairman and Chief Executive Officer, stated, "We are very pleased to receive the commitment for a $20 million asset-based senior secured revolving credit facility from CIT which reflects the confidence that they have regarding the strength of our business. With the anticipated completion and implementation of the CIT Facility in the next quarter, we expect that it will provide the Company with the liquidity and working capital necessary to meet its current and future needs in addition to substantially lowering interest expense on asset-based borrowings."