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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 10-K
 ANNUAL REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
 For the Fiscal Year Ended December 31, 2006
 Commission File Number 000-51737
 GLOBAL EMPLOYMENT HOLDINGS, INC.
 (Exact name of registrant as specified in its charter)
 Delaware
(State or other jurisdiction 
of incorporation)
    
    43-2069359
(IRS Employer
Identification Number)10375 Park Meadows Drive, Suite 375
Lone Tree, Colorado
(Address of Principal Executive Offices)
    
    80124
(Zip Code)
 (303) 216-9500
(Registrants telephone number, including area code)
 Securities
registered pursuant to Section 12(b) of the Act: None
 Title of Each Class

    
    Name of Each Exchange on Which Registered
N/A
 Securities registered pursuant to Section 12 (g) of the Act: Common Stock, $.0001 par value
 Indicate by check mark if the registrant is a well seasoned issuer, as defined in
Rule 405 of the Securities Act. Yes o No þ
 Indicate by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act. Yes o No þ
 Indicate by check mark whether the Registrant (1) has filed all reports required to
be filed by Section 13 of 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the Registrant was required to
file such reports) and (2) has been subject to such filing requirements for the past
90 days. Yes þ No o
 Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best of
the Registrants knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K . þ
 Indicate by check mark whether the Registrant is a large accelerated filer, an
accelerated filer or a non-accelerated filer (as defied in Exchange Act Rule 12b-2).
 Large Accelerated Filer o Accelerated Filer o Non-Accelerated Filer þ
 Indicate by check mark whether the Registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes o No þ
 Our
stock was not quoted and did not trade as of the last day of our second fiscal
quarter ended July 2, 2006. We have computed the aggregate market value of the
common stock held by non-affiliates of the Registrant to be approximately
$21,000,000, based on the closing price of $5.25 per share on the OTC BB
as of August 11, 2006, the first day our stock began trading. Shares of common
stock held beneficially by executive officers and directors have been excluded,
without conceding that all such persons are affiliates of the Registrant.
 The number of shares of common stock outstanding at April 6, 2007 was 6,023,442.
 DOCUMENTS INCORPORATED BY REFERENCE
 Portions
of the Registrants Proxy Statement for its 2007 Annual Meeting are incorporated by
reference into Part III of this Form 10-K report.




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PART IITEM 1. BUSINESS
    
    
    1ITEM 1A. RISK FACTORS
    
    
    11ITEM 1B. UNRESOLVED STAFF COMMENTS
    
    
    26ITEM 2. PROPERTIES
    
    
    26ITEM 3. LEGAL PROCEEDINGS
    
    
    26ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
    
    
    26PART IIITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED
STOCKHOLDER MATTERS AND ISSUER PURCHASES OF
EQUITY SECURITIES
    
    
    27ITEM 6. SELECTED FINANCIAL DATA
    
    
    28ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
    
    
    29ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK
    
    
    44ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
    
    
    44ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
    
    
    44ITEM 9A. CONTROLS AND PROCEDURES
    
    
    45ITEM 9B. OTHER INFORMATION
    
    
    46PART IIIITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
    
    
    46ITEM 11. EXECUTIVE COMPENSATION
    
    
    46ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS
    
    
    46ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
    
    
    46ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
    
    
    47PART IVITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
    
    
    47SIGNATURESConsent of Mayer Hoffman McCann P.C.Consent of Preferred Insurance Capital Consultants, LLCCertification of CEO & President Pursuant to Rule 13a-14(a)Certification of CFO Pursuant to Rule 13a-14(a)Certification of CEO/President, and CFO Pursuant to 18 U.S.C. Section 1350




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PART I.
 Cautionary Note
 FORWARD LOOKING STATEMENTS
  
 ITEM 1. BUSINESS.
 Overview of our business
  Staffing services segment overview
  1




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PEO segment overview
  Company overview
 Our history
    2




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Subsidiaries
   Ø Temporary Placement Service, Inc. (TPS)Ø Main Line Personnel Services, Inc. (Main Line)Ø Friendly Advanced Software Technology, Inc.; and (FAST)Ø Excell Personnel Services Corporation (Excell)
  Ø Southeastern Personnel Management, Inc.Ø Southeastern Staffing, Inc.Ø Bay HR, Inc.Ø Southeastern Georgia HR, Inc.Ø Southeastern Staffing II, Inc.Ø Southeastern Staffing III, Inc.Ø Southeastern Staffing IV, Inc.Ø Southeastern Staffing V, Inc.Ø Southeastern Staffing VI, Inc.; andØ Keystone Alliance, Inc.
 Services
  Staffing Services
   3




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PEO Services
  Operations
  Recruiting
  4




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Marketing
 Overall
  Marketing in the staffing services segment
  Marketing in the PEO services segment
  Customers
    5




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Growth strategy
 Support, strengthen and expand branch office operations
  Increase client utilization of our services
  Enhance management information system
  Penetrate other selected markets
  Pursue strategic acquisitions
  6




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Financial information about segments
  Financial information about geographic areas
  Competition
   7




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Research and development
  Seasonality
   Management information systems
  Risk management programs
   8




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Employees
   
    
    Co-employ workers at customer locations, and thereby assume responsibility as
an employer for specified purposes of the workers assigned to the client locations.
    
    Reserve a right of direction and control of the employees.
    
    Share or allocate with customer employers responsibilities in a manner
consistent with maintaining the customers responsibility for their products or
services.
    
    Pay wages and employment taxes of the employees out of our own accounts.
    
    Report, collect and deposit employment taxes with state and federal authorities.
    
    Establish and maintain an employment relationship with our employees that is
intended to be long term and not temporary.
    
    Retain a right to hire, reassign and fire the employees
  Intellectual property and other proprietary rights
  9




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Regulation
  Working capital practices
  Available information
  10




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Item 1A. RISK FACTORS
  Factors
affecting future operating results and stock price
 We face price competition which could result in a decrease in our gross margins or, if we are
unable to compete effectively, loss of revenues.
 
 
    
    Develop and expand their infrastructure and service offerings more quickly and achieve
greater cost savings.
    
    Invest in new technologies.
    
    Expand operations into new markets more rapidly.
    
    Devote greater resources to marketing.
    
    Compete for acquisitions more effectively and complete acquisitions more easily.
    
    Aggressively price products and services and increase benefits in ways that we may not
be able to match.
   11




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Our staffing business is vulnerable to economic fluctuations because our customers tend to use
fewer temporary employees when economic activity slows, while recruiting employees to fill our
customers needs becomes increasingly difficult during economic booms.
  Our business is subject to risks associated with geographic market concentration.
  Our service agreements may be terminated on short notice, leaving us vulnerable to loss of a
significant amount of customers in a short period of time.
  If we are unable to retain existing customers or attract new customers, our results of operations
could suffer.
    12




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We have significant working capital needs and if we are unable to satisfy those needs from cash
generated from our operations or borrowings under our revolving line of credit, we may not be able
to meet payroll or statutory tax payment requirements.
      13




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We currently have a negative net worth and may not have sufficient liquidity and capital
resources necessary to meet our future financial obligations.
   The amount of collateral that we are required to maintain to support our workers compensation
obligations could increase, reducing the amount of capital we have available to support and
grow our field operations.
  14




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We depend on our senior management and key personnel recruitment and retention, both of which may
be difficult and expensive.
     We depend on attracting and retaining qualified employees; during periods of economic growth our
costs to do so increase and it becomes more difficult to attract and retain people.
  15




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We face risks associated with maintaining our professional reputation and establishing and
maintaining our brand name.
  Because we assume the obligation to make wage, tax and regulatory payments in respect of some
employees, we are exposed to customer credit risks.
  If we are found not to be an employer under certain laws and regulations, our customers may stop
using our services, and we may be subject to additional liabilities.
   16




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We may be exposed to employment-related claims, legal liability and costs from and related to
customers and employers that could increase our cost of doing business, thereby decreasing our
profits, and our insurance coverage may not cover all of our potential liability.
  
    
    Claims of misconduct or negligence on the part of our employees.
    
    Claims against our employees of discrimination or harassment.
    
    Claims by our employees of discrimination or harassment directed at them, including
claims relating to actions of our customers.
    
    Immigration-related claims, such as claims related to the employment of illegal aliens
or unlicensed personnel.
    
    Payment of workers compensation claims and other similar claims.
    
    Violations of wage, hour and other workplace regulations.
    
    Claims relating to employee benefits, entitlements to employee benefits, or errors
in the calculation or administration of such benefits.
    
    Retroactive entitlement to employee benefits.
    
    Errors and omissions of our temporary employees, particularly in the case of
professionals.
    
    Claims by our customers relating to our employees misuse of customer proprietary
information, misappropriation of funds, other criminal activity or torts, or other
similar claims.
  17




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Adverse developments in the market for excess workers compensation insurance could lead to
increase in our costs.
  The cost of unemployment insurance for temporary employees may rise and reduce our margins.
  We operate in a complex regulatory environment, and failure to comply with applicable laws and
regulations could result in fines or other penalties.
  Changes in government regulations may result in restrictions or prohibitions applicable to the
provision of employment services or the imposition of additional licensing, regulatory or tax
requirements.
  
    
    Impose additional regulations that prohibit or restrict employment-related businesses
like ours.
    
    Require additional licensing or add restrictions on existing licenses to provide
employment-related services.
    
    Increase taxes or make changes in the way in which taxes are calculated for providers
of employment related services.
    
    Make changes in the way in which employee benefits are required for providers of
employment related services.
 18




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We may find it difficult to expand our business into additional states due to varying state
regulatory requirements.
  Changes in state unemployment tax laws and regulations could restrict our ability to market our
services and make our services less attractive to current or potential customers thereby resulting
in a flattening or decrease of our revenues.
  We are dependent upon technology services, and if we experience damage, service interruptions or
failures in our computer and telecommunications systems, or if our security measures are breached,
our customer relationships and our ability to attract new customers may be adversely affected.
  19




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Acquisitions subject us to various risks, including risks relating to selection and pricing of
acquisition targets, integration of acquired companies into our business and assumption of
unanticipated liabilities.
  There has been no active public market for our common stock, and prospective investors may not be
able to resell their shares at or above the purchase price paid by such investor, or at all.
  
    
    The lack of readily available price quotations.
    
    The absence of consistent administrative supervision of bid and ask quotations.
    
    Lower trading volume.
    
    Market conditions.
  
    
    Actual or anticipated variations in our operating results.
    
    Changes in the market valuations of other human capital solutions companies.
    
    Announcements by us or our competitors of significant acquisitions,
strategic partnerships, joint ventures or capital commitments.
    
    Adoption of new accounting standards affecting our industry.
 20




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
    
    Additions or departures of key personnel.
    
    Introduction of new services by our competitors or us.
    
    Sales of our common stock or other securities in the open market.
    
    Changes in financial estimates by securities analysts.
    
    Conditions or trends in the market in which we operate.
    
    Changes in earnings estimates and recommendations by financial analysts.
    
    Our failure to meet financial analysts performance expectations.
    
    Other events or factors, many of which are beyond our control.
  Our common stock may be considered a penny stock and may be difficult to sell.
  A significant amount of common stock will be eligible for sale on the one-year anniversary of the
recapitalization, and its sale could depress the market price of our common stock.
  21




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A significant amount of common stock is subject to issuance upon the conversion of our convertible
subordinated notes and mandatorily redeemable convertible preferred
stock and upon exercise of warrants to purchase common stock. The conversion of these financial instruments and sale could depress
the market price of our common stock.
    22




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Number
of shares underlying warrants
    

Exercise price
    

Expiration date388,096 *
    
    $
    6.25
    
    
    March 31, 20112,513,053
    
    $
    6.00
    
    
    March 31, 2013393,365
    
    $
    6.25
    
    
    March 31, 2013
 
 (*  includes 36,848 held by related parties)  We cannot assure that we will list our common stock on NASDAQ or any other national securities
system or exchange.
  Securities
analysts have not initiated coverage and may not initiate coverage of our common stock and
this may have a negative impact on our common stocks market price.
  23




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Our certificate of incorporation contains anti-takeover provisions which could discourage or
prevent a takeover even if an acquisition would be beneficial to our stockholders.
  Our compliance with the Sarbanes-Oxley Act and SEC rules concerning internal controls may be time
consuming, difficult and costly.
  If we fail to comply in a timely manner with the requirements of Section 404 of the Sarbanes-Oxley
Act regarding internal control over financial reporting or to remedy any material weaknesses in our
internal controls that we may identify, such failure could result in material misstatements in our
financial statements, cause investors to lose confidence in our reported financial information and
have a negative effect on the trading price of our common stock.
   24




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Accounting
for Derivative Instruments and Hedging Activities Accounting for Derivative
Financial Instruments Indexed to, and Potentially Settled in, a Companys Own Stock
 25




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We are a defendant in a variety of litigation and other actions from time to time, which may have a
material adverse effect on our business, financial condition and
results of operations if we are unable to recover any monetary
liability resulting from a successful claim with insurance proceeds or working capital.
  
 ITEM 1B. UNRESOLVED STAFF COMMENTS.
  
 ITEM 2. PROPERTIES.
  
 ITEM 3. LEGAL PROCEEDINGS.
   
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
  26




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ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER                PURCHASES OF EQUITY SECURITIES.
 Market
information
  Fiscal 2006:
    
    High
    
    LowThird Quarter ended October 1, 2006
    
    $
    5.30
    
    
    $
    5.15Fourth Quarter ended December 31, 2006
    
    $
    5.25
    
    
    $
    5.15
  Sales
of unregistered securities and use of proceeds.
 Issuer
purchases of securities.
 Dividends.
 Securities
authorized for issuance under equity compensation plans
 Number ofsecurities remainingNumber of
    
    
    
    
    
    available for futuresecurities to be
    
    
    
    
    
    issuance underissued upon exercise
    
    Weighted-average
    
    equity compensationof outstanding
    
    exercise price of
    
    plans (excludingoptions, warrants
    
    outstanding options,
    
    securities reflectedPlan Category
    
    and rights
    
    warrants and rights
    
    in column (a)(a)
    
    (b)
    
    (c)Equity compensation
plans approved by
security holders
    
    
    1,001,198
    
    
    
    5.04
    
    
    
    1,098,802Equity
compensation plans not approved by
security holders
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    1,001,198
    
    
    
    5.04
    
    
    
    1,098,802
  27




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ITEM 6. SELECTED FINANCIAL DATA.
  Fiscal Years Ended2006
    
    2005
    
    2004
    
    2003
    
    2002(All amounts in thousands, except per share data)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (Unaudited)Revenues, net
    
    $
    128,790
    
    
    $
    111,563
    
    
    $
    97,126
    
    
    $
    85,568
    
    
    $
    64,144Gross profit
    
    $
    36,719
    
    
    $
    34,370
    
    
    $
    30,200
    
    
    $
    27,231
    
    
    $
    22,414SG&A expenses
    
    $
    28,311
    (a)
    
    $
    45,478
    (b)
    
    $
    23,936
    
    
    $
    22,630
    
    
    $
    25,341Depreciation and amortization
    
    $
    573
    
    
    $
    729
    
    
    $
    734
    
    
    $
    707
    
    
    $
    1,560Operating income (loss)
    
    $
    7,835
    
    
    $
    (11,837
    )
    
    $
    5,530
    
    
    $
    3,894
    
    
    $
    (4,487
    )Other income (expense)
    
    $
    (8,232
    )(c)
    
    $
    (256
    )
    
    $
    (703
    )
    
    $
    (798
    )
    
    $
    (969
    )Gain on extinguishment of debt
    
    $
    273
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    23,026Net income (loss)
    
    $
    1,309
    
    
    $
    (15,725
    )
    
    $
    2,793
    
    
    $
    1,673
    
    
    $
    19,313Dividend paid to Series C preferred shareholders
    
    
    
    
    
    $
    (6,300
    )
    
    
    
    
    
    
    
    
    
    $
    (289
    )Valuation of redeemable preferred stock
    
    
    
    
    
    $
    (36,693
    )
    
    
    
    
    
    
    
    
    
    
    Income (loss) available to common stockholders
    
    $
    1,309
    
    
    $
    (58,718
    )
    
    $
    2,793
    
    
    $
    1,673
    
    
    $
    19,024Income (loss) per share:Basic and diluted
Net income (loss) before extraordinary items
    
    $
    .23
    
    
    $
    (10.95
    )
    
    $
    0.51
    
    
    $
    0.30
    
    
    $
    0.70Gain on extinguishment of debt
    
    $
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    4.35Income (loss) available to common stockholders
    
    $
    .23
    
    
    $
    (10.95
    )
    
    $
    0.51
    
    
    $
    0.30
    
    
    $
    3.59Weighted average number of shares outstanding
    
    
    5,745
    
    
    
    5,363
    
    
    
    5,471
    
    
    
    5,547
    
    
    
    5,298Total assets
    
    $
    57,202
    
    
    $
    52,920
    
    
    $
    51,014
    
    
    $
    51,953
    
    
    $
    51,215Long-term debt, net
    
    $
    15,138
    
    
    
    
    
    
    $
    17,800
    
    
    $
    17,370
    
    
    $
    16,940Long-term mandatorily redeemable convertible
preferred stock, net
    
    $
    2,013
    
    
    
    
    
    
    $
    5,856
    
    
    $
    5,837
    
    
    $
    5,853Stockholders equity (deficit)
    
    $
    (19,641
    )
    
    $
    (24,921
    )
    
    $
    11,234
    
    
    $
    8,443
    
    
    $
    6,770
 
 (a)
    
    Includes $968 of non-recurring retention bonus paid to senior management in connection with the March 31, 2006 recapitalization.(b)
    
    Includes $21,152 of restricted stock compensation recorded in connection with the March 31, 2006 recapitalization.(c)
    
    Includes $3,359 of expenses recorded in connection with the March 31, 2006 recapitalization. 28




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ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
  Cautionary Statement
  Critical Accounting Policies
   29




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Revenue Recognition
 Reporting Revenue Gross as a Principal versus Net as an Agent
    Allowance for Doubtful Accounts
   30




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Goodwill
 Goodwill and Other Intangible Assets
   Stock-Based Compensation
 Share-Based Payments
 Accounting for Stock-Based Compensation Accounting for Stock Issued to Employees
 31




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Warrant and conversion feature valuation
 Accounting for Derivative Instruments and Hedging
Activities Accounting for Derivative Financial Instruments Indexed to, and
Potentially Settled in, a Companys Own Stock
      Recent Accounting Pronouncements
  32




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Executive Overview
  Fluctuations in quarterly operating results
  33




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Results of continuing operations
  Fiscal Year2006
    
    
    2005
    
    
    2004REVENUES, net
    
    
    100.00
    %
    
    
    100.00
    %
    
    
    100.00
    %COST OF SERVICES
    
    
    71.49
    %
    
    
    69.19
    %
    
    
    68.91
    %GROSS PROFIT
    
    
    28.51
    %
    
    
    30.81
    %
    
    
    31.09
    %OPERATING EXPENSESSelling, general and administrative
    
    
    21.98
    %(a)
    
    
    40.76
    %(b)
    
    
    24.64
    %Depreciation and amortization
    
    
    0.45
    %
    
    
    0.65
    %
    
    
    0.76
    %Total operating expenses
    
    
    22.43
    %
    
    
    41.42
    %
    
    
    25.40
    %OPERATING INCOME
    
    
    6.08
    %
    
    
    -10.61
    %
    
    
    5.70
    %OTHER INCOME (EXPENSE)Interest expense:Other interest expense, net of interest income
    
    
    -5.05
    %
    
    
    -0.23
    %
    
    
    -0.71
    %Fair market valuation of warrant liability
    
    
    1.27
    %
    
    
    0.00
    %
    
    
    0.00
    %Other income (expense)
    
    
    -2.61
    %(c)
    
    
    0.00
    %
    
    
    -0.01
    %Gain on extinguishment of debt
    
    
    0.21
    %
    
    
    0.00
    %
    
    
    0.00
    %Total other expense, net
    
    
    -6.18
    %
    
    
    -0.23
    %
    
    
    -0.72
    %INCOME (LOSS) BEFORE INCOME TAXES
    
    
    -0.10
    %
    
    
    -10.84
    %
    
    
    4.97
    %INCOME TAXES
    
    
    -1.11
    %
    
    
    3.26
    %
    
    
    2.09
    %NET INCOME (LOSS)
    
    
    1.02
    %
    
    
    -14.10
    %
    
    
    2.88
    %Valuation of
redeemable preferred stock
    
    
    0.00
    %
    
    
    32.88
    %
    
    
    0.00
    %Dividend paid to Series C preferred stockholders
    
    
    0.00
    %
    
    
    -5.65
    %
    
    
    0.00
    %Income (loss) available to common stockholders
    
    
    1.02
    %
    
    
    -52.63
    %
    
    
    2.88
    %
 
 (a)
    
    Includes $968 of non-recurring retention bonus paid to senior management in connection with the March 31, 2006 recapitalization.(b)
    
    Includes $21,152 of restricted stock compensation recorded in connection with the March 31, 2006 recapitalization.(c)
    
    Includes $3,359 of expenses recorded in connection with the March 31, 2006 recapitalization. 34




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Gross reporting method
    
    
    Reclassification
    
    
    Net reporting methodFor the fiscal year 2006Revenues, net
    
    $
    507,906,000
    
    
    $
    (379,116,000
    )
    
    $
    128,790,000Cost of services
    
    
    (471,187,000
    )
    
    
    379,116,000
    
    
    
    (92,071,000
    )Gross profit
    
    $
    36,719,000
    
    
    $
    
    
    
    $
    36,719,000For the fiscal year 2005Revenues, net
    
    $
    439,991,000
    
    
    $
    (328,428,000
    )
    
    $
    111,563,000Cost of services
    
    
    (405,621,000
    )
    
    
    328,428,000
    
    
    
    (77,193,000
    )Gross profit
    
    $
    34,370,000
    
    
    $
    
    
    
    $
    34,370,000For the fiscal year 2004Revenues, net
    
    $
    381,368,000
    
    
    $
    (284,242,000
    )
    
    $
    97,126,000Cost of services
    
    
    (351,168,000
    )
    
    
    284,242,000
    
    
    
    (66,926,000
    )Gross profit
    
    $
    30,200,000
    
    
    $
    
    
    
    $
    30,200,000
 CHANGES IN RESULTS OF OPERATIONS FOR THE FISCAL YEARS ENDED DECEMBER 31, 2006 AND JANUARY 1,
2006
 Revenues
   35




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Gross profit and gross margin percentage
  36




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Selling, general and administrative expenses
   37




---



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Depreciation
  Other expense
  Interest Expense
   Income Taxes
  Acquisition
  38




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CHANGES IN RESULTS OF OPERATIONS FOR THE FISCAL YEARS ENDED JANUARY 1, 2006 AND JANUARY 2, 2005
 Revenues
   Gross profit and gross margin percentage
  Selling, general and administrative expenses
  Depreciation
  Interest expense
  39




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Income taxes
  LIQUIDITY AND CAPITAL RESOURCES
        40




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41




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Ø
    
    We will conduct an offering of at least $5 million of our common stock in a
private placement or public offering to close no later than September 30, 2007. The
common stock shall be issued for cash consideration.
 Ø
    
    If we have not closed the offering by September 30, 2007, the Company is obligated
to call upon the commitments it has received from Howard Brill, President and CEO, John Borer, Managing Director of Rodman & Renshaw and Charles Gwirtsman,
Chairman of the Board, also referred to as the stand-by purchasers, to
purchase an aggregate of $3 million of our common stock on September 30, 2007.
 Ø
    
    If the dollar amount of common stock sold after February 28, 2007 and prior to
September 30, 2007 exceeds $2 million, the obligation of the stand-by purchasers will be
reduced by the amount of such excess with such reduction being allocated among them in
proportion to their respective purchase commitments.
 Ø
    
    The purchase price for the shares of common stock to be purchased by each stand-by
purchaser will be equal to the volume weighted average price per share of our common stock
for the ten consecutive trading day period ending on September 29, 2007 as reported by
Bloomberg (or, if Bloomberg terminates such reporting, then using such other reporting
system as our board of the directors may designate in good faith) on the primary national
or regional securities exchange or quotation system on which our common stock is then
listed or quoted; provided, that if we have not conducted the offering in good faith
using commercially reasonable efforts the purchase price for the shares shall be the
higher of that price or $4.00 per share. The purchase price paid by the stand-by
purchasers may be paid in cash, by delivery to us of our convertible notes held by such
stand-by purchaser having an aggregate principal amount, including accrued interest, equal
to the purchase price of the common stock to be so purchased, or a combination thereof, at
the election of the stand-by purchaser making such payment.
 Ø
    
    We will issue to each stand-by purchaser a warrant to purchase one share of
common stock for each share purchased by such stand-by purchaser at an exercise price
 42




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##### Table of Contents



equal to 120% of the price at which the common stock is purchased. The warrants will expire
on the seventh anniversary of issuance; provided, however, that no warrants shall be issued
with respect to any portion of the common stock purchased by such stand-by purchasers
through the surrender of convertible notes.
   Off-Balance Sheet Arrangements
  Contractual obligations
  Payments due by periodLess than
    
    
    1-3
    
    
    3-5
    
    
    AfterTotal
    
    
    1 year
    
    
    years
    
    
    years
    
    
    5 yearsLong-term debt
    
    $
    28,006,000
    
    
    $
    2,903,000
    
    
    $
    847,000
    
    
    $
    24,256,000
    
    
    $
    Mandatorily redeemable
convertible preferred stock (a)
    
    
    19,991,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    19,991,000Operating leases
    
    
    5,826,000
    
    
    
    1,533,000
    
    
    
    938,000
    
    
    
    1,571,000
    
    
    
    1,784,000Total contractual cash obligations
    
    $
    58,823,000
    
    
    $
    4,436,000
    
    
    $
    1,785,000
    
    
    $
    25,827,000
    
    
    $
    21,775,000
 
 (a)
    
    Fully accreted balance  Amount ofQuarterly Payment Date
    
    Principal PaymentJune 30, 2007, September 30, 2007, December 15,
2007, March 31, 2008, June 30, 2008, September
30, 2008, December 15, 2008, March 31, 2009,
June 30, 2009, September 30, 2009, and December
15, 2009
    
    $
    875,000.00March 31, 2010 and June 30, 2010
    
    $
    800,000.00September 30, 2010
    
    $
    775,000.00
 43




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##### Table of Contents



Inflation
  
 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
    
 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
  
 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
  44




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##### Table of Contents



ITEM 9A. CONTROLS AND PROCEDURES.
  45




---



##### Table of Contents



Form 10-K Form 10-Qs
   
 ITEM 9B. OTHER INFORMATION.
  
 PART III
 
 ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
 www.gesnetwork.com
 
 ITEM 11. EXECUTIVE COMPENSATION.
  
 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED 
                  STOCKHOLDER MATTERS.
  
 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
  46




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##### Table of Contents



ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
  
 PART IV
 
 ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
  1.
    
    Financial Statements
 Report of Independent Registered Public Accounting Firm
    
    
    F-1Consolidated Balance Sheets as of December 31, 2006 and January 1, 2006
    
    
    F-2Consolidated Statements of Operations For the Fiscal Years ended
December 31, 2006, January 1, 2006 and January 2, 2005
    
    
    F-3Consolidated Statements of Stockholders Equity (Deficit) For the
Fiscal Years ended December 31, 2006, January 1, 2006 and January 2,
2005
    
    
    F-4Consolidated Statements of Cash Flows For the Fiscal Years ended
December 31, 2006, January 1, 2006 and January 2, 2005
    
    
    F-5Notes to Consolidated Financial Statements
    
    
    F-6
 2.
    
    Financial Statement Schedules.
  3.
    
    Exhibits.
  Exhibit #
    
    Description
    
    Reference2.1
    
    Plan of Merger between Global Merger Corp and Global Employment Solutions, Inc.
    
    Incorporated by
reference to
Exhibit 2.1 to the
Registrants Form
8-K filed on April
4, 2006, as
amended.3.1
    
    Amendment No. 1 to Certificate of Designations, Preferences and Rights of Series A Convertible Preferred Stock of Global Employment Holdings, Inc.
    
    Incorporated by
reference to Item
3.1 in the
Registrants Form
8-K filed March 6,
20073.2
    
    Amended and Restated Certificate of Incorporation of Global Employment Holdings, Inc.
    
    Incorporated by
reference to
Exhibit 3.1 to the
Registrants Form
8-K filed on April
4, 2006, as
amended.
 47




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##### Table of Contents



Exhibit #
    
    Description
    
    Reference3.3
    
    Certificate of Designations, Preferences and Rights of Global Employment Holdings, Inc.
    
    Incorporated by
reference to
Exhibit 3.2 to the
Registrants Form
8-K filed on April
4, 2006, as
amended.3.4
    
    Amended and Restated Bylaws of Global Employment Holdings, Inc.
    
    Incorporated by
reference to
Exhibit 3.3 to the
Registrants Form
8-K filed on April
4, 2006, as
amended.4.1
    
    Form of Warrant issued under Notes Securities Purchase Agreement
    
    Incorporated by
reference to
Exhibit 4.1 to the
Registrants Form 8-K
filed on April 4,
2006, as amended.4.2
    
    Form of Warrant issued under Preferred Stock Securities Purchase Agreement
    
    Incorporated by
reference to
Exhibit 4.2
to the Registrants
Form 8-K filed on
April 4, 2006, as
amended.4.3
    
    Form of Warrant issued under Common Stock Securities Purchase Agreement
    
    Incorporated by
reference to
Exhibit 4.3
to the Registrants
Form 8-K filed on
April 4, 2006, as
amended.4.4
    
    Registration Rights Agreement under Notes Securities
Purchase Agreement
    
    Incorporated by
reference to
Exhibit 4.4
to the Registrants
Form 8-K filed on
April 4, 2006, as
amended.4.5
    
    Registration Rights Agreement under Preferred Stock
Securities Purchase Agreement
    
    Incorporated by
reference to
Exhibit 4.5
to the Registrants
Form 8-K filed on
April 4, 2006, as
amended.4.6
    
    Registration Rights Agreement under Common Stock
Securities Purchase Agreement
    
    Incorporated by
reference to
Exhibit 4.6
to the Registrants
Form 8-K filed on
April 4, 2006, as
amended.4.7
    
    Registration Rights Agreement, dated as of March 31, 2006, among Global Employment Holdings, Inc., R&R Investments I, LLC, Arnold P. Kling and Kirk M. Warshaw
    
    Incorporated by
reference to
Exhibit 4.7
to the Registrants
Form 8-K filed on
April 4, 2006, as
amended.4.8
    
    Lock-Up Agreement, dated as of March 31, 2006, among Global Employment Holdings, Inc., R&R Investments I, LLC, Arnold P. Kling and Kirk M. Warshaw
    
    Incorporated by
reference to
Exhibit 4.8
to the Registrants
Form 8-K filed on
April 4, 2006, as
amended.5.1
    
    Opinion of Brownstein Hyatt & Farber, P.C. Regarding Legality of Securities Offered
    
    Incorporated by
reference to
Exhibit 5.1 to
Amendment No. 1 to
Registration
Statement on Form
S-1 filed on June
20, 200610.1
    
    Employment Agreement, dated as of March 14, 2007, between Global Employment Solutions, Inc. and Steven List
    
    Incorporated by
reference to Item
10.1 in the
Registrants Form
8-K filed March 20,
2007
 48




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##### Table of Contents



Exhibit #
    
    Description
    
    Reference10.2
    
    Asset Purchase Agreement, dated as of December 29, 2006, by and among Global Employment Holdings,
Inc., Career Blazers Personnel Services, Inc., Career Blazers Contingency Professionals, Inc., Career
Blazers Personnel Services of Washington, D.C., Inc. and CapeSuccess LLC
    
    Incorporated by reference to Exhibit 10.1 in the
Registrants Form 8-K filed January 5, 200710.3
    
    Amendment to Asset Purchase Agreement, dated as of February 28, 2007, by and among Global Employment
Holdings, Inc., Career Blazers Personnel Services, Inc., Career Blazers Contingency Professionals,
Inc., Career Blazers Personnel Services of Washington, D.C., Inc., and CapeSuccess LLC
    
    Incorporated by reference to Item 10.2 in the
Registrants Form 8-K filed March 6, 200710.4
    
    Credit Agreement, dated as of February 28, 2007, by and among Global Employment Solutions, Inc.,
Global Employment Holdings, Inc., Temporary Placement Service, Inc., Southeastern Personnel
Management, Inc., Main Line Personnel Services, Inc., Friendly Advanced Software Technology, Inc.,
Excell Personnel Services Corporation, Southeastern Staffing, Inc., Bay HR, Inc., Southeastern
Georgia HR, Inc., Southeastern Staffing II, Inc., Southeastern Staffing III, Inc., Southeastern
Staffing IV, Inc., Southeastern Staffing V, Inc., Southeastern Staffing VI, Inc., Keystone Alliance,
Inc., and CapitalSource Finance LLC, as administrative agent for the lenders, and the lenders from
time to time parties hereto
    
    Incorporated by reference to Item 10.3 in the
Registrants Form 8-K filed March 6, 200710.5
    
    Subordination Agreement, dated as of February 28, 2007, by and among Whitebox Convertible Arbitrage
Partners, L.P., for itself and in its capacity as collateral agent for the subordinated creditors,
Radcliffe SPC, Ltd., for and on behalf of the Class A Convertible Crossover Segregated Portfolio,
Magnetar Capital Master Fund, Ltd., Guggenheim Portfolio XXXI, LLC, Pandora Select Partners, LP,
Whitebox Intermarket Partners, LP, Context Advantage Master Fund, L.P., on behalf of itself, Context
Advantage Fund, LP, f/k/a Context Convertible Arbitrage Fund, L.P., and Context Offshore Advantage
Fund, Ltd., f/k/a Context Convertible Arbitrage Offshore, Ltd., Context Opportunistic Master Fund,
L.P., Gwirtsman Family Partners, LLC, Luci Altman, Gregory Bacharach, Howard Brill, Richard Goldman,
Daniel Hollenbach, Terry Koch, Michael Lazrus, Steven List, Kenneth Michaels, Steven Pennington, Fred
Viarrial, and Jay Wells, for the benefit of CapitalSource Finance LLC, for itself and as agent for
the lenders now or hereafter existing under the Credit Agreement
    
    Incorporated by reference to Item 10.4 in the
Registrants Form 8-K filed March 6, 200710.6
    
    Security Agreement, dated as of February 28, 2007, by and among Global Employment Solutions, Inc., Global Employment
Holdings, Inc., Temporary Placement Service, Inc., Southeastern Personnel Management, Inc., Main Line Personnel Services,
Inc., Friendly Advanced Software Technology, Inc., Excell Personnel Services Corporation, Southeastern Staffing, Inc.,
Bay HR, Inc., Southeastern Georgia HR, Inc., Southeastern Staffing II, Inc., Southeastern Staffing III, Inc.,
Southeastern Staffing IV, Inc., Southeastern Staffing V, Inc., Southeastern Staffing VI, Inc., Keystone Alliance, Inc.,
and CapitalSource Finance LLC, in its capacity as agent for the lender parties
    
    Incorporated by
reference to Item
10.5 in the
Registrants Form
8-K filed March 6,
200710.7
    
    Securities Pledge Agreement, dated as of February 28, 2007, between CapitalSource Finance LLC, as administrative agent
for the lenders under the Credit Agreement, and Global Employment Holdings, Inc.
    
    Incorporated by
reference to Item
10.6 in the
Registrants Form
8-K filed March 6,
200710.8
    
    Securities Pledge Agreement, dated as of February 28, 2007, between CapitalSource Finance LLC, as administrative agent
for the lenders under the Credit Agreement, and Global Employment Solutions, Inc.
    
    Incorporated by
reference to Item
10.7 in the
Registrants Form
8-K filed March 6,
200710.9
    
    Securities Pledge Agreement, dated as of February 28, 2007, between CapitalSource Finance LLC, as administrative agent
for the lenders under the Credit Agreement, and Southeastern Staffing, Inc.
    
    Incorporated by
reference to Item
10.8 in the
Registrants Form
8-K filed March 6,
200710.10
    
    Securities Pledge Agreement, dated as of February 28, 2007, between CapitalSource Finance LLC, as administrative agent
for the lenders under the Credit Agreement, and Excell Personnel Services Corporation
    
    Incorporated by
reference to Item
10.9 in the
Registrants Form
8-K filed March 6,
200710.11
    
    First Amendment to Senior Secured Convertible Notes, dated as of February 28, 2007,
by and among Global Employment Holdings, Inc. and the holders of Global Employment Holdings, Inc. senior secured
convertible notes
    
    Incorporated by
reference to Item
10.10 in the
Registrants Form
8-K filed March 6,
2007
 49




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##### Table of Contents



Exhibit #
    
    Description
    
    Reference10.12
    
    Letter from Global Employment Holdings, Inc., dated February 28, 2007, to holders of
the senior convertible notes and the Series A convertible preferred stock regarding
commitment to issue equity
    
    Incorporated by
reference to Item
10.11 in the
Registrants Form
8-K filed March 6,
200710.13
    
    Asset Purchase Agreement, dated as of December 29, 2006, between Global Employment Holdings, Inc.,
Career Blazers Personnel Services, Inc., Career Blazers Contingency Professionals, Inc., Career Blazers
Personnel Services of Washington, D.C., Inc. and CapeSuccess LLC
    
    Incorporated by reference to Item 10.1 in the
Registrants Form 8-K filed January 5, 200710.14
    
    Amended and Restated Employment Agreement, dated as of January 2, 2007, between
Global Employment Solutions, Inc. and Terry Koch
    
    Incorporated by reference to Item 10.2 in the
Registrants Form 8-K filed January 5, 200710.15
    
    Global Employment Holdings, Inc. 2006 Stock Plan
    
    Incorporated by reference to Item 10.1 in the
Registrants Quarterly Report on Form 10-Q filed
November 15, 200610.16
    
    Convertible Note and Warrant Sale Agreement, dated as of September 28, 2006, between Amatis Limited,
Global Employment Holdings, Inc. and the purchasers named in Schedule I thereto
    
    Incorporated by reference to Item 10.1 in the
Registrants Form 8-K filed October 4, 200610.17
    
    First Amendment to Notes Securities Purchase Agreement, dated as of September 28, 2006, by and among
Global Employment Holdings, Inc., Global Employment Solutions, Inc., and the investors listed on the
signature pages thereto
    
    Incorporated by reference to Item 10.2 in the
Registrants Form 8-K filed October 4, 200610.18
    
    First Amendment to Security Agreement, Pledge Agreement and Guaranty, dated as of September 28, 2006,
by and among Global Employment Holdings, Inc. Global Employment Solutions, Inc., various subsidiaries
of Global Employment Solutions, Inc., Amatis Limited and Whitebox Convertible Arbitrage Partners, LP
    
    Incorporated by reference to Item 10.3 in the
Registrants Form 8-K filed October 4, 200610.19
    
    First Amendment to Amended and Restated Credit and Security Agreement, dated as of September 26, 2006,
by and among Wells Fargo Bank, National Association, Global Employment Solutions, Inc. and various
subsidiaries
    
    Incorporated by reference to Item 10.4 in the
Registrants Form 8-K filed October 4, 200610.20
    
    Amended and Restated Credit and Security Agreement among Wells Fargo Bank, National Association, Global
Employment Solutions, Inc. and various subsidiaries
    
    Incorporated by reference to Exhibit 10.19 to
Amendment No. 3 to Registration Statement on Form
S-1 filed on July 26, 200610.21
    
    Fifth Amended and Restated Revolving Promissory Note under Amended and
Restated Credit and Security Agreement
    
    Incorporated by reference to Exhibit 10.20 to Amendment No. 3 to
Registration Statement on Form S-1 filed on July 26, 200610.22
    
    First Amended and Restated Term Note under Amended and Restated Credit and
Security Agreement
    
    Incorporated by reference to Exhibit 10.21 to Amendment No. 3 to
Registration Statement on Form S-1 filed on July 26, 200610.23
    
    Form of Pledge Agreement under Amended and Restated Credit and Security
Agreement
    
    Incorporated by reference to Exhibit 10.22 to Amendment No. 3 to
Registration Statement on Form S-1 filed on July 26, 200610.24
    
    Form of Patent and Trademark Security Agreement under Amended and Restated
Credit and Security Agreement
    
    Incorporated by reference to Exhibit 10.23 to Amendment No. 3 to
Registration Statement on Form S-1 filed on July 26, 200610.25
    
    Form of Copyright Security Agreement under Amended and Restated Credit and
Security Agreement
    
    Incorporated by reference to Exhibit 10.24 to Amendment No. 3 to
Registration Statement on Form S-1 filed on July 26, 2006
 50




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##### Table of Contents



Exhibit #
    
    Description
    
    Reference10.26
    
    Amendment to Guarantor Documents under Amended and Restated Credit and
Security Agreement
    
    Incorporated by reference to Exhibit 10.37 to Amendment No. 3 to
Registration Statement on Form S-1 filed on July 26, 200610.27
    
    Amended and Restated Employment Agreement, dated July 15, 2006, between
Global Employment Holdings, Inc., Global Employment Solutions, Inc. and
Howard Brill
    
    Incorporated by reference to Exhibit 10.15 to Amendment No. 2 to
Registrants Form 8-K filed on July 25, 200610.28
    
    Amended and Restated Employment Agreement, dated July 15, 2006, between
Global Employment Holdings, Inc., Global Employment Solutions, Inc. and Dan
Hollenbach
    
    Incorporated by reference to Exhibit 10.16 to Amendment No. 2 to Registrants Form 8-K filed on July 25, 200610.29
    
    Amended and Restated Employment Agreement, dated July 15, 2006, among
Global Employment Solutions, Inc. and Stephen Pennington
    
    Incorporated by reference to Exhibit 10.18 to Amendment No. 2 to Registrants Form 8-K filed on July 25, 200610.30
    
    Form of Share Purchase Agreement among Global Employment Solutions, Inc., Global Employment
Holdings, Inc. and the shareholders of Global Employment Solutions, Inc.
signatory thereto
    
    Incorporated by reference to Exhibit 10.1 to the Registrants Form 8-K filed with the Securities and Exchange
Commission on April 4, 2006 (File No. 000-51737), as amended.10.31
    
    Notes Securities Purchase Agreement, dated as of March 31, 2006, among Global
Employment Solutions, Inc. and the investors listed on the Schedule of Buyers
attached thereto
    
    Incorporated by reference to Exhibit 10.2 to the Registrants Form 8-K filed with the
Securities and Exchange Commission on April 4, 2006 (File No. 000-51737), as amended.10.32
    
    Joinder Agreement of Global Employment Holdings, Inc. to Notes Securities Purchase Agreement
    
    Incorporated by reference to Exhibit 10.3 to the Registrants Form 8-K filed with the
Securities and Exchange Commission on April 4, 2006 (File No. 000-51737), as amended.10.33
    
    Form of Note under Notes Securities Purchase Agreement
    
    Incorporated by reference to Exhibit 10.4 to the Registrants Form 8-K filed with the
Securities and Exchange Commission on April 4, 2006 (File No. 000-51737), as amended.10.34
    
    Guaranty under Notes Securities Purchase Agreement
    
    Incorporated by reference to Exhibit 10.5 to the Registrants Form 8-K filed with the
Securities and Exchange Commission on April 4, 2006 (File No. 000-51737), as amended.10.35
    
    Pledge Agreement under Notes Securities Purchase
Agreement
    
    Incorporated by reference to Exhibit 10.6 to the Registrants Form 8-K filed with the
Securities and Exchange Commission on April 4, 2006 (File No. 000-51737), as amended.10.36
    
    Security Agreement under Notes Securities Purchase
Agreement
    
    Incorporated by reference to Exhibit 10.7 to the Registrants Form 8-K filed with the
Securities and Exchange Commission on April 4, 2006 (File No. 000-51737), as amended.
 51




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##### Table of Contents



Exhibit #
    
    Description
    
    Reference10.37
    
    Subordination Agreement under Notes Securities Purchase
Agreement
    
    Incorporated by reference to Exhibit 10.8 to the Registrants Form 8-K filed with the
Securities and Exchange Commission on April 4, 2006 (File No. 000-51737), as amended.10.38
    
    Preferred Stock Securities Purchase Agreement, dated as of March 31, 2006, among Global
Employment Solutions, Inc. and the investors listed on the Schedule of Buyers attached thereto
    
    Incorporated by reference to Exhibit 10.9 to the Registrants Form 8-K filed with the Securities and Exchange
Commission on April 4, 2006 (File No. 000-51737), as amended.10.39
    
    Joinder Agreement of Global Employment Holdings, Inc. to Preferred Stock Securities Purchase
Agreement
    
    Incorporated by reference to Exhibit 10.10 to the Registrants Form 8-K filed with the Securities and Exchange
Commission on April 4, 2006 (File No. 000-51737), as amended.10.40
    
    Common Stock Securities Purchase Agreement, dated as of March 31, 2006, among Global
Employment Solutions, Inc. and the investors listed on the Schedule of Buyers attached thereto
    
    Incorporated by reference to Exhibit 10.11 to the Registrants Form 8-K filed with the Securities and Exchange
Commission on April 4, 2006 (File No. 000-51737), as amended.10.41
    
    Joinder Agreement of Global Employment Holdings, Inc. to Common Stock Securities Purchase
Agreement
    
    Incorporated by reference to Exhibit 10.12 to the Registrants Form 8-K filed with the Securities and Exchange
Commission on April 4, 2006 (File No. 000-51737), as amended.10.42
    
    Form of Indemnification Agreement
    
    Incorporated by reference to Exhibit 10.13 to the Registrants Form 8-K filed with the Securities and Exchange
Commission on April 4, 2006 (File No. 000-51737), as amended.10.43
    
    Form of Noncompetition Agreement
    
    Incorporated by reference to Exhibit 10.14 to the Registrants Form 8-K filed with the Securities and Exchange
Commission on April 4, 2006 (File No. 000-51737), as amended.10.44
    
    Amended and Restated Employment Agreement, dated July 15, 2006, between Global Employment
Holdings, Inc., Global Employment Solutions, Inc. and Howard Brill
    
    Incorporated by reference to Exhibit 10.15 to the Registrants Form 8-K filed with the Securities and Exchange
Commission on April 4, 2006 (File No. 000-51737), as amended.10.45
    
    Amended and Restated Employment Agreement, dated July 15, 2006, between Global Employment
Holdings, Inc., Global Employment Solutions, Inc. and Dan Hollenbach
    
    Incorporated by reference to Exhibit 10.16 to the Registrants Form 8-K filed with the Securities and Exchange
Commission on April 4, 2006 (File No. 000-51737), as amended.10.46
    
    Non-Disclosure, Non-Competition, Arbitration and Employment Agreement, dated April 4, 2001,
among Global Employment Solutions, Inc., Southeastern Staffing, Inc. and Robert Larkin
    
    Incorporated by reference to Exhibit 10.17 to the Registrants Form 8-K filed with the Securities and Exchange
Commission on April 4, 2006 (File No. 000-51737), as amended.
 52




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##### Table of Contents



Exhibit #
    
    Description
    
    Reference10.47
    
    Amended and Restated Employment Agreement, dated July 15, 2006, among Global Employment
Solutions, Inc. and Stephen Pennington
    
    Incorporated by reference to Exhibit 10.18 to the Registrants Form 8-K filed with the Securities and Exchange
Commission on April 4, 2006 (File No. 000-51737), as amended.10.48
    
    Form of Guaranty under Fifth Amendment to Credit and Security Agreement and Waiver of Defaults and Amended and
Restated Credit and Security Agreement
    
    Incorporated by reference to Exhibit 10.25 to the Registrants Form 8-K filed with the
Securities and Exchange Commission on April 4, 2006 (File No. 000-51737), as amended.10.49
    
    Form of Security Agreement under Fifth Amendment to Credit and Security Agreement and Waiver of Defaults
    
    Incorporated by reference to Exhibit 10.26 to the Registrants Form 8-K filed with the
Securities and Exchange Commission on April 4, 2006 (File No. 000-51737), as amended.10.50
    
    Form of Pledge Agreement under Fifth Amendment to Credit and Security Agreement and Waiver of Defaults
    
    Incorporated by reference to Exhibit 10.22 to the Registrants Form 8-K filed on July 25, 2006, as amended.10.51
    
    Form of Patent and Trademark Security Agreement under Fifth Amendment to
Credit and Security Agreement and Waiver of Defaults
    
    Incorporated by reference to Exhibit 10.23 to the Registrants Form 8-K filed on July 25, 2006, as amended10.52
    
    Form of Copyright Security Agreement under Fifth Amendment to Credit and
Security Agreement and Waiver of Defaults
    
    Incorporated by reference to Exhibit 10.24 to the Registrants Form 8-K filed on July 25, 2006, as amended10.53
    
    Sublease Agreement, dated as of March 23, 2006, among Continental Casualty Company and Global
Employment Solutions, Inc.
    
    Incorporated by reference to Exhibit 10.28 to the Registrants Form 8-K filed on July 10, 2006, as amended10.54
    
    Form of Employment Agreement for Consulting and Temporary Employees in Chicago, IL
    
    Incorporated by reference to Exhibit 5.1 to Amendment No. 1 to Registration Statement on Form S-1 filed on June 20,
200610.55
    
    Form of Employment Agreement for Permanent Employees in Chicago, IL
    
    Incorporated by reference to Exhibit 5.1 to Amendment No. 1 to Registration Statement on Form S-1 filed on June 20,
200610.56
    
    Form of Employment Agreement for Consulting and Temporary Employees in Hauppauge, NY
    
    Incorporated by reference to Exhibit 5.1 to Amendment No. 1 to Registration Statement on Form S-1 filed on June 20,
200610.57
    
    Form of Employment Agreement for Permanent Employees in Hauppauge, NY
    
    Incorporated by reference to Exhibit 5.1 to Amendment No. 1 to Registration Statement on Form S-1 filed on June 20,
200610.58
    
    Form of Employment Agreement for Consulting and Temporary Employees in Bala Cynwyd, PA
    
    Incorporated by reference to Exhibit 5.1 to Amendment No. 1 to Registration Statement on Form S-1 filed on June 20,
200610.59
    
    Form of Employment Agreement for Permanent Employees in Bala Cindy, PA
    
    Incorporated by reference to Exhibit 5.1 to Amendment No. 1 to Registration Statement on Form S-1 filed on June 20,
200610.60
    
    Form of Confidentiality, Noncompetition and Nonsolicitation Agreement
    
    Incorporated by reference to Exhibit 5.1 to Amendment No. 1 to Registration Statement on Form S-1 filed on June 20,
200610.61
    
    Form of Confidentiality, Noncompetition and Nonsolicitation Agreement (Southeastern Companies,
Inc.)
    
    Incorporated by reference to Exhibit 5.1 to Amendment No. 1 to Registration Statement on Form S-1 filed on June 20,
2006
 53




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##### Table of Contents



Exhibit #
    
    Description
    
    Reference10.62
    
    Engagement Letter for Placement Agent Rodman & Renshaw,
LLC
    
    Incorporated by reference to Exhibit 10.27 to Registration Statement on Form S-1 filed on May 1, 200614.1
    
    Code of Conduct of Global Employment Holdings, Inc.
    
    Incorporated by reference to Exhibit 14.1 to the Registrants Form 8-K filed on April 4, 2006, as amended14.2
    
    Audit Committee Charter of Global Employment Holdings, Inc.
    
    Incorporated by reference to Exhibit 14.1 to the Registrants Form 8-K filed on April 4, 2006, as amended14.3
    
    Compensation Committee Charter of Global Employment Holdings, Inc.
    
    Incorporated by reference to Exhibit 14.1 to the Registrants Form 8-K filed on April 4, 2006, as amended16.1
    
    Letter from Grant Thornton LLP regarding Change in Certifying Accountant
    
    Incorporated by reference to Exhibit 16.2 to the Registrants Form 8-K filed on July 25, 2006, as amended16.2
    
    Letter from Marcum & Kliegman LLP regarding Change in
Certifying Accountant
    
    Incorporated by reference to Exhibit 21.1 to Registration Statement on Form S-1 filed on May 1, 200621.1
    
    List of subsidiaries of Global Employment Holdings, Inc.
    
    Incorporated by reference to Exhibit 21.1 to Registration Statement on Form S-1 filed on May 1, 200623.1
    
    Consent of Mayer Hoffman McCann P.C.
    
    Filed herewith.23.2
    
    Consent of Preferred Insurance Capital Consultants, LLC
    
    Filed herewith.31.1
    
    Certification of Howard Brill, Chief Executive Officer and President pursuant to Rule 13a-14(a) and the
Exchange Act of 1934.
    
    Filed herewith.31.2
    
    Certification of Dan Hollenbach, Chief Financial Officer pursuant to Rule 13a-14(a) and the Exchange Act of
1934.
    
    Filed herewith.32.1
    
    Certification of Howard Brill, Chief Executive Officer and President, and Dan Hollenbach, Chief Financial
Officer pursuant to 18 U.S.C. Section 1350.
    
    Filed herewith.
 54




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##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
  GLOBAL EMPLOYMENT HOLDINGS, INC.
     
 F-1




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##### Table of Contents



GLOBAL EMPLOYMENT HOLDINGS, INC. AND SUBSIDIARIES
 
 CONSOLIDATED BALANCE SHEETS
 December 31,
    
    
    January 1,2006
    
    
    2006ASSETSCURRENT ASSETSCash and cash equivalents
    
    $
    58,000
    
    
    $
    138,000Accounts receivable, less allowance for doubtful accounts of $431,000 and $536,000 for
fiscal 2006 and 2005, respectively
    
    
    23,478,000
    
    
    
    21,694,000Deferred income taxes
    
    
    2,095,000
    
    
    
    978,000Prepaid expenses and other current assets
    
    
    2,603,000
    
    
    
    2,996,000Total current assets
    
    
    28,234,000
    
    
    
    25,806,000Property and equipment, net
    
    
    1,168,000
    
    
    
    1,022,000Deferred income taxes
    
    
    7,796,000
    
    
    
    7,206,000Other assets, net
    
    
    1,256,000
    
    
    
    138,000Goodwill
    
    
    18,748,000
    
    
    
    18,748,000Total assets
    
    $
    57,202,000
    
    
    $
    52,920,000LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)CURRENT LIABILITIESBank overdrafts
    
    $
    2,176,000
    
    
    $
    2,709,000Accounts payable
    
    
    614,000
    
    
    
    505,000Accrued liabilities
    
    
    19,542,000
    
    
    
    16,127,000Current portion of long-term debt
    
    
    2,903,000
    
    
    
    17,821,000Line of credit
    
    
    9,049,000
    
    
    
    Mandatorily redeemable restricted common stock
    
    
    
    
    
    
    11,542,000Mandatorily redeemable preferred stock
    
    
    
    
    
    
    28,897,000Income taxes payable
    
    
    
    
    
    
    240,000Total current liabilities
    
    
    34,284,000
    
    
    
    77,841,000Warrant liability
    
    
    24,496,000
    
    
    
    Warrant
liability  related parties
    
    
    912,000
    
    
    
    Long-term debt, net of unamortized discount of $9,019,000 for fiscal 2006
    
    
    13,781,000
    
    
    
    Long-term debt  related parties, net of unamortized discount of $946,000
for fiscal 2006
    
    
    1,357,000
    
    
    
    Mandatorily
redeemable preferred stock, net of unamortized discount of $11,510,000
for fiscal 2006
    
    
    2,013,000
    
    
    
    Total liabilities
    
    
    76,843,000
    
    
    
    77,841,000COMMITMENTS AND CONTINGENCIESSTOCKHOLDERS EQUITY (DEFICIT)Preferred stock, $.01 par value, 50,000,000 shares authorized:Series C preferred stock, 7,000,000 authorized shares designated, 5,718,729 issued
and outstanding in fiscal year 2005. Included above under mandatorily
redeemable preferred stock
    
    
    
    
    
    
    Series D preferred stock, 30,000,000 authorized shares designated, 8,315,204 issued
and outstanding in fiscal year 2005. Included above under mandatorily
redeemable preferred stock
    
    
    
    
    
    
    Series A preferred stock, $.0001 par value, 10,000,000 authorized shares designated,
12,750
issued and outstanding in fiscal year 2006. Included above under mandatorily
redeemable preferred stock, net
    
    
    
    
    
    
    Common stock, $.0001 par value, 75,000,000 shares authorized; 6,030,122 issued,
6,023,442 outstanding in fiscal 2006 and 4,864,685 shares issued and outstanding in
fiscal 2005
    
    
    1,000
    
    
    
    1,000Treasury
stock at cost, 6,680 shares in fiscal 2006
    
    
    
    
    
    
    Additional paid in capital
    
    
    23,760,000
    
    
    
    19,789,000Accumulated deficit
    
    
    (43,402,000
    )
    
    
    (44,711,000
    )Total stockholders equity (deficit)
    
    
    (19,641,000
    )
    
    
    (24,921,000
    )Total liabilities and stockholders equity (deficit)
    
    $
    57,202,000
    
    
    $
    52,920,000
  F-2




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##### Table of Contents



GLOBAL EMPLOYMENT HOLDINGS, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
 Fiscal Years EndedDecember 31,
    
    
    January 1,
    
    
    January 2,2006
    
    
    2006
    
    
    2005REVENUES, net
    
    $
    128,790,000
    
    
    $
    111,563,000
    
    
    $
    97,126,000COST OF SERVICES
    
    
    92,071,000
    
    
    
    77,193,000
    
    
    
    66,926,000GROSS PROFIT
    
    
    36,719,000
    
    
    
    34,370,000
    
    
    
    30,200,000OPERATING EXPENSESSelling, general and administrative
    
    
    28,311,000
    
    
    
    45,478,000
    
    
    
    23,936,000Depreciation and amortization
    
    
    573,000
    
    
    
    729,000
    
    
    
    734,000Total operating expenses
    
    
    28,884,000
    
    
    
    46,207,000
    
    
    
    24,670,000OPERATING INCOME (LOSS)
    
    
    7,835,000
    
    
    
    (11,837,000
    )
    
    
    5,530,000OTHER INCOME (EXPENSE)Interest expense:Other interest expense, net of interest income
    
    
    (6,507,000
    )
    
    
    (256,000
    )
    
    
    (690,000
    )Fair market valuation of warrant liability
    
    
    1,634,000
    
    
    
    
    
    
    
    Other income (expense)
    
    
    (3,359,000
    )
    
    
    
    
    
    
    (13,000
    )Gain on extinguishment of debt
    
    
    273,000
    
    
    
    
    
    
    
    Total other expense, net
    
    
    (7,959,000
    )
    
    
    (256,000
    )
    
    
    (703,000
    )INCOME (LOSS) BEFORE INCOME TAXES
    
    
    (124,000
    )
    
    
    (12,093,000
    )
    
    
    4,827,000INCOME TAX (BENEFIT) EXPENSE
    
    
    (1,433,000
    )
    
    
    3,632,000
    
    
    
    2,034,000NET INCOME (LOSS)
    
    
    1,309,000
    
    
    
    (15,725,000
    )
    
    
    2,793,000Valuation of redeemable preferred stock
    
    
    
    
    
    
    (36,693,000
    )
    
    
    Dividend paid to Series C preferred stockholders ($0.92 per share)
    
    
    
    
    
    
    (6,300,000
    )
    
    
    Income (loss) available to common stockholders
    
    $
    1,309,000
    
    
    $
    (58,718,000
    )
    
    $
    2,793,000Basic and diluted earnings (loss) per share of common stock
    
    $
    0.23
    
    
    $
    (10.95
    )
    
    $
    0.51Weighted average number of basic and diluted common shares outstanding
    
    
    5,744,742
    
    
    
    5,362,600
    
    
    
    5,470,953
  F-3




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##### Table of Contents



GLOBAL EMPLOYMENT HOLDINGS, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY (DEFICIT)
  Preferred stock
    
    
    Common stock
    
    
    Treasury stock
    
    
    Additional
    
    
    AccumulatedAmount
    
    
    Shares
    
    
    Amount
    
    
    Shares
    
    
    Amount
    
    
    Shares
    
    
    paid in capital
    
    
    deficit
    
    
    TotalBalances at December 28, 2003
    
    $
    
    
    
    
    
    
    
    $
    1,000
    
    
    
    5,510,667
    
    
    $
    
    
    
    
    
    
    
    $
    33,221,000
    
    
    $
    (24,779,000
    )
    
    $
    8,443,000Repuchase of 135,715 shares of restricted common stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (135,715
    )
    
    
    
    
    
    
    
    
    
    
    (3,000
    )
    
    
    
    
    
    
    (3,000
    )Issuance of 58,289 shares of restricted common stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    58,289
    
    
    
    
    
    
    
    
    
    
    
    1,000
    
    
    
    
    
    
    
    1,000Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,793,000
    
    
    
    2,793,000Balances at January 2, 2005
    
    
    
    
    
    
    
    
    
    
    1,000
    
    
    
    5,433,241
    
    
    
    
    
    
    
    
    
    
    
    33,219,000
    
    
    
    (21,986,000
    )
    
    
    11,234,000Cash dividends ($1.20 per restricted common share and $0.92 per Series C share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7,000,000
    )
    
    
    (7,000,000
    )Issuance of 91,762 shares of restricted common stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    91,762
    
    
    
    
    
    
    
    
    
    
    
    2,000
    
    
    
    
    
    
    
    2,000Repurchase of 533 shares of restricted common stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (533
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Reclassification of 659,785 shares of redeemable restricted stock to a liability
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (659,785
    )
    
    
    
    
    
    
    
    
    
    
    23,261,000
    
    
    
    
    
    
    
    23,261,000Valuation of redeemable preferred stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (36,693,000
    )
    
    
    
    
    
    
    (36,693,000
    )Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (15,725,000
    )
    
    
    (15,725,000
    )Balances at January 1, 2006
    
    
    
    
    
    
    
    
    
    
    1,000
    
    
    
    4,864,685
    
    
    
    
    
    
    
    
    
    
    
    19,789,000
    
    
    
    (44,711,000
    )
    
    
    (24,921,000
    )Issuance of common stock to new investors
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    850,000
    
    
    
    
    
    
    
    
    
    
    
    4,250,000
    
    
    
    
    
    
    
    4,250,000Issuance of common stock to KRG Colorado, LLC for services
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    50,000
    
    
    
    
    
    
    
    
    
    
    
    250,000
    
    
    
    
    
    
    
    250,000Issuance of common stock to former shareholders of R&R Acquisition I, Inc.
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    180,928
    
    
    
    
    
    
    
    
    
    
    
    905,000
    
    
    
    
    
    
    
    905,000Issuance of common stock to former debt holders of Global Employment Solutions,
Inc.
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    85,315
    
    
    
    
    
    
    
    
    
    
    
    427,000
    
    
    
    
    
    
    
    427,000Warrant liability related to common stock warrants
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,766,000
    )
    
    
    
    
    
    
    (2,766,000
    )Offering costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,049,000
    )
    
    
    
    
    
    
    (1,049,000
    )Extinguishment of related party debt
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,960,000
    
    
    
    
    
    
    
    1,960,000Issuance of preferred stock
    
    
    12,750,000
    
    
    
    12,750
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12,750,000Reclassification of mandatorily redeemable preferred stock to liabilities
    
    
    (12,750,000
    )
    
    
    (12,750
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (12,750,000
    )Forfeiture of common stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,680
    )
    
    
    
    
    
    
    
    
    
    
    Repurchase of common stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (806
    )
    
    
    
    
    
    
    
    
    
    
    (6,000
    )
    
    
    
    
    
    
    (6,000
    )Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,309,000
    
    
    
    1,309,000Balances at December 31, 2006
    
    $
    
    
    
    
    
    
    
    $
    1,000
    
    
    
    6,030,122
    
    
    $
    
    


    
    
    (6,680
    )
    
    $
    23,760,000
    
    
    $
    (43,402,000
    )
    
    $
    (19,641,000
    )
  F-4




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##### Table of Contents



GLOBAL EMPLOYMENT HOLDINGS, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 Fiscal years endedDecember 31,
    
    
    January 1,
    
    
    January 2,2006
    
    
    2006
    
    
    2005CASH FLOWS FROM OPERATING ACTIVITIES:Net income (loss)
    
    $
    1,309,000
    
    
    $
    (15,725,000
    )
    
    $
    2,793,000Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:Depreciation
    
    
    540,000
    
    
    
    519,000
    
    
    
    519,000Amortization of other assets
    
    
    33,000
    
    
    
    210,000
    
    
    
    215,000Amortization of debt discount and issuance costs
    
    
    1,951,000
    
    
    
    47,000
    
    
    
    436,000Bad debt expense
    
    
    394,000
    
    
    
    330,000
    
    
    
    492,000Deferred taxes
    
    
    (1,707,000
    )
    
    
    3,355,000
    
    
    
    1,619,000Issuance of Series C preferred stock for services
    
    
    
    
    
    
    
    
    
    
    340,000Restricted common stock compensation expense
    
    
    80,000
    
    
    
    21,152,000
    
    
    
    Gain on extinguishment of debt
    
    
    (273,000
    )
    
    
    
    
    
    
    Issuance of common stock to KRG Colorado, LLC for services
    
    
    250,000
    
    
    
    
    
    
    
    Issuance of common stock to former shareholders of R&R Acquisition I, Inc.
    
    
    905,000
    
    
    
    
    
    
    
    Offering costs
    
    
    (1,049,000
    )
    
    
    
    
    
    
    Accretion of preferred stock
    
    
    773,000
    
    
    
    
    
    
    
    Amortization of warrant discount on preferred stock
    
    
    1,039,000
    
    
    
    
    
    
    
    Fair market valuation of warrant liability
    
    
    (1,634,000
    )
    
    
    
    
    
    
    Changes in operating assets and liabilities:Accounts receivable
    
    
    (2,178,000
    )
    
    
    (5,364,000
    )
    
    
    (1,019,000
    )Prepaid expenses and other
    
    
    348,000
    
    
    
    (648,000
    )
    
    
    (321,000
    )Accounts payable
    
    
    109,000
    
    
    
    101,000
    
    
    
    (292,000
    )Income taxes payable
    
    
    (241,000
    )
    
    
    (388,000
    )
    
    
    169,000Accrued expenses and other liabilities
    
    
    3,681,000
    
    
    
    1,478,000
    
    
    
    1,219,000Net cash flows provided by operating activities
    
    
    4,330,000
    
    
    
    5,067,000
    
    
    
    6,170,000CASH FLOWS FROM INVESTING ACTIVITIES:Purchase of property and equipment
    
    
    (686,000
    )
    
    
    (324,000
    )
    
    
    (556,000
    )Net cash flows (used in) investing activities
    
    
    (686,000
    )
    
    
    (324,000
    )
    
    
    (556,000
    )CASH FLOWS FROM FINANCING ACTIVITIES:Bank overdrafts
    
    
    (533,000
    )
    
    
    2,266,000
    
    
    
    (631,000
    )Net borrowings on revolving credit facility
    
    
    9,049,000
    
    
    
    
    
    
    
    (4,742,000
    )Borrowings on term note
    
    
    5,000,000
    
    
    
    
    
    
    
    Repayments of term note
    
    
    (1,250,000
    )
    
    
    
    
    
    
    Proceeds from convertible debt
    
    
    30,000,000
    
    
    
    
    
    
    
    Repurchase of convertible debt
    
    
    (4,997,000
    )
    
    
    
    
    
    
    Debt issuance costs
    
    
    (1,937,000
    )
    
    
    (25,000
    )
    
    
    Reduction of KRG subordinated note
    
    
    (1,460,000
    )
    
    
    
    
    
    
    Reduction of shareholder subordinated debt
    
    
    (14,064,000
    )
    
    
    
    
    
    
    Issuance of preferred stock
    
    
    12,750,000
    
    
    
    
    
    
    
    Issuance of restricted common stock
    
    
    
    
    
    
    2,000
    
    
    
    1,000Issuance of common stock
    
    
    4,250,000
    
    
    
    
    
    
    
    Repurchase of common stock
    
    
    (6,000
    )
    
    
    
    
    
    
    Repurchase of preferred stock and restricted common stock
    
    
    (40,526,000
    )
    
    
    
    
    
    
    (228,000
    )Cash dividend paid
    
    
    
    
    
    
    (7,000,000
    )
    
    
    Net cash flows (used in) financing activities
    
    
    (3,724,000
    )
    
    
    (4,757,000
    )
    
    
    (5,600,000
    )Net increase (decrease) in cash and cash equivalents
    
    
    (80,000
    )
    
    
    (14,000
    )
    
    
    14,000Cash and cash equivalents, beginning of year
    
    
    138,000
    
    
    
    152,000
    
    
    
    138,000Cash and cash equivalents, end of year
    
    $
    58,000
    
    
    $
    138,000
    
    
    $
    152,000Supplemental Disclosure of Cash Flow InformationCash paid during the period for income taxes
    
    $
    548,000
    
    
    $
    665,000
    
    
    $
    231,000Cash paid during the period for interest
    
    $
    2,276,000
    
    
    $
    208,000
    
    
    $
    254,000
  F-5




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Global Employment Holdings, Inc. and Subsidiaries
 
 Notes to Consolidated Financial Statements
 NOTE A  SUMMARY OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES
 Organization
   Subsidiaries
   Ø
    
    Temporary Placement Service, Inc. (TPS)Ø
    
    Main Line Personnel Services, Inc. (Main Line)Ø
    
    Friendly Advanced Software Technology, Inc.; and (FAST)Ø
    
    Excell Personnel Services Corporation (Excell)
  Ø
    
    Southeastern Personnel Management, Inc.Ø
    
    Southeastern Staffing, Inc.Ø
    
    Bay HR, Inc.Ø
    
    Southeastern Georgia HR, Inc.Ø
    
    Southeastern Staffing II, Inc.Ø
    
    Southeastern Staffing III, Inc.Ø
    
    Southeastern Staffing IV, Inc.Ø
    
    Southeastern Staffing V, Inc.Ø
    
    Southeastern Staffing VI, Inc.; andØ
    
    Keystone Alliance, Inc.
 Consolidation of Variable Interest Entities 
an interpretation of ARB No. 51.
 F-6




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##### Table of Contents



Global Employment Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
 Basis of Presentation
  Fiscal Year
  Use of Estimates
  Revenue Recognition
 Reporting Revenue Gross as a Principal versus Net as an Agent
  F-7




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##### Table of Contents



Global Employment Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
    Cash and Cash Equivalents
  Financial Instruments
    Accounts Receivable and Allowance for Doubtful Accounts
  F-8




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##### Table of Contents



Global Employment Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
     Property and Equipment
  
  Accounting for the Cost of Computer Software Developed or
Obtained for Internal Use
 Long-Lived Assets
 , Accounting for the Impairment or Disposal of Long-Lived Assets
 F-9




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##### Table of Contents



Global Employment Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
  Goodwill
 Goodwill and Other Intangible Assets
   Workers Compensation Insurance
   F-10




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##### Table of Contents



Global Employment Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
   Advertising Expense
  Income Taxes
  Treasury Stock
  Stock-Based Compensation
 Share-Based Payments
 F-11




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##### Table of Contents



Global Employment Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
  Accounting for Stock-Based Compensation Accounting for Stock Issued to Employees
 Warrant and conversion feature valuation
 Accounting for Derivative Instruments and
Hedging Activities Accounting for Derivative Financial Instruments Indexed to, and
Potentially Settled in, a Companys Own Stock
   Net Earnings (Loss) per Share of Common Stock
  F-12




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##### Table of Contents



Global Employment Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
  Quantifying Materiality of Financial Statement Misstatements
 Considering the Effects of Prior Year Misstatements when Quantifying
Misstatements in Current Year Financial Statements
 Recent Accounting Pronouncements
 Fair Value Measurements.
 Accounting for Uncertainty in
Income Taxes  an Interpretation of SFAS Statement No. 109,
 How Taxes Collected from
Customers and Remitted to Governmental Authorities Should Be Presented in the Income Statement
(That Is, Gross Versus Net Presentation),
 F-13




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Global Employment Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
 Accounting for Servicing of Financial Assets  an
amendment of FASB Statement No. 140. Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of Liabilities,
 Accounting for Certain Hybrid Financial Instruments  an
amendment of FASB Statements No. 133 and 140. Accounting for Derivative Instruments and Hedging Activities, Accounting for Transfers
and Servicing of Financial Assets and Extinguishments of Liabilities. Application of Statement 133 to
Beneficial Interests in Securitized Financial Assets.
 Exchanges of Nonmonetary Assets  an Amendment to APB
Opinion No. 29, Accounting for Nonmonetary Transactions.
 NOTE B  MASTER INVESTMENT AGREEMENT
   Shares ofCash
    
    
    common stock inDistribution
    
    
    HoldingsRestricted stockholders
    
    $
    11,624,000
    
    
    
    1,924,889Series C preferred stockholders
    
    
    22,243,000
    
    
    
    869,426Series D preferred stockholders
    
    
    6,653,000
    
    
    
    2,070,371Senior Subordinated Notes
    
    
    13,593,000
    
    
    
    74,703Purchase Money Subordinated Notes
    
    
    471,000
    
    
    
    2,588KRG Subordinated Notes
    
    
    1,460,000
    
    
    
    8,023Total
    
    $
    56,044,000
    
    
    
    4,950,000
 F-14




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##### Table of Contents



Global Employment Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
 NOTE C  ACCOUNTS RECEIVABLE
  December 31,
    
    
    January 1,2006
    
    
    2006Accounts receivable billed
    
    $
    12,653,000
    
    
    $
    11,764,000Accounts receivable unbilled
    
    
    10,971,000
    
    
    
    10,127,000Accounts receivable other
    
    
    285,000
    
    
    
    339,000Allowance for doubtful accounts
    
    
    (431,000
    )
    
    
    (536,000
    )Total
    
    $
    23,478,000
    
    
    $
    21,694,000
  2006
    
    
    2005
    
    
    2004Balance, beginning of year
    
    $
    536,000
    
    
    $
    469,000
    
    
    $
    592,000Additions charged to cost and expense
    
    
    394,000
    
    
    
    330,000
    
    
    
    492,000Accounts receivable written-off, net
of recoveries
    
    
    (499,000
    )
    
    
    (263,000
    )
    
    
    (615,000
    )Balance, end of year
    
    $
    431,000
    
    
    $
    536,000
    
    
    $
    469,000
 NOTE D
 PROPERTY AND EQUIPMENT
  December 31,
    
    
    January 1,2006
    
    
    2006Office equipment
    
    $
    1,924,000
    
    
    $
    2,471,000Furniture and fixtures
    
    
    685,000
    
    
    
    712,000Computer software
    
    
    957,000
    
    
    
    1,970,000Leasehold improvements
    
    
    451,000
    
    
    
    271,0004,017,000
    
    
    
    5,424,000Less accumulated depreciation and
amortization
    
    
    (2,849,000
    )
    
    
    (4,402,000
    )Total
    
    $
    1,168,000
    
    
    $
    1,022,000
  F-15




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Global Employment Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
 NOTE E
 OTHER ASSETS
  December 31,
    
    
    January 1,2006
    
    
    2006Debt issuance costs, net of accumulated
amortization of $428,000 and $42,000 as of
December 31, 2006 and January 1, 2006,
respectively
    
    $
    1,126,000
    
    
    $
    21,000Deposits and other
    
    
    130,000
    
    
    
    117,000Total
    
    $
    1,256,000
    
    
    $
    138,000
  Fiscal Years2007
    
    $
    279,0002008
    
    
    238,0002009
    
    
    257,0002010
    
    
    279,0002011
    
    
    73,000Total
    
    $
    1,126,000
  NOTE F
 ACCRUED LIABILITIES
  December 31,
    
    
    January 1,2006
    
    
    2006Accrued payroll and related benefits
    
    $
    13,884,000
    
    
    $
    11,839,000Accrued workers compensation
    
    
    2,651,000
    
    
    
    2,465,000Unearned benefit deductions
    
    
    1,019,000
    
    
    
    757,000Other
    
    
    1,988,000
    
    
    
    1,066,000Total
    
    $
    19,542,000
    
    
    $
    16,127,000
 NOTE G  CREDIT AND SECURITY AGREEMENT
  F-16




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Global Employment Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
        F-17




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Global Employment Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
     NOTE H  LONG TERM DEBT
  December 31,
    
    
    January 1,2006
    
    
    2006Wells Fargo term note
    
    $
    3,750,000
    
    
    $
    Senior subordinated secured convertible notes, net of
unamortized discount of $9,019,000
    
    
    12,934,000
    
    
    
    Senior secured convertible notes due to related
parties, net of unamortized discount of $946,000
    
    
    1,357,000
    
    
    
    Senior subordinated notes; including accrued interest
through November 15, 2001 of $1,871,000
    
    
    
    
    
    
    15,837,000Purchase money subordinated notes  Southeastern sellers
    
    
    
    
    
    
    484,000KRG subordinated notes
    
    
    
    
    
    
    1,500,00018,041,000
    
    
    
    17,821,000Less current portion
    
    
    (2,903,000
    )
    
    
    (17,821,000
    )Total long-term debt
    
    $
    15,138,000
    
    
    $
    
 F-18




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##### Table of Contents



Global Employment Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
 Convertible Notes
    F-19




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##### Table of Contents



Global Employment Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
 Senior Subordinated Notes and Put Warrants
     Purchase Money Subordinated Notes
  F-20




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##### Table of Contents



Global Employment Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
  KRG Subordinated Notes
   NOTE I  INCOME TAXES
  Fiscal 2006Current
    
    
    Deferred
    
    
    TotalU.S. Federal
    
    $
    
    
    
    $
    (1,521,000
    )
    
    $
    (1,521,000
    )State and local
    
    
    274,000
    
    
    
    (186,000
    )
    
    
    88,000
    )Total
    
    $
    274,000
    
    
    $
    (1,707,000
    )
    
    $
    (1,433,000
    )Fiscal 2005Current
    
    
    Deferred
    
    
    TotalU.S. Federal
    
    $
    159,000
    
    
    $
    3,253,000
    
    
    $
    3,412,000State and local
    
    
    118,000
    
    
    
    102,000
    
    
    
    220,000Total
    
    $
    277,000
    
    
    $
    3,355,000
    
    
    $
    3,632,000Fiscal 2004Current
    
    
    Deferred
    
    
    TotalU.S. Federal
    
    $
    29,000
    
    
    $
    1,446,000
    
    
    $
    1,475,000State and local
    
    
    386,000
    
    
    
    173,000
    
    
    
    559,000Total
    
    $
    415,000
    
    
    $
    1,619,000
    
    
    $
    2,034,000
 F-21




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##### Table of Contents



Global Employment Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
  Fiscal2006
    
    2005
    
    2004Tax computed at federal statutory rate
    
    
    34.0
    %
    
    
    34.0
    %
    
    
    34.0
    %State tax, net of federal tax benefit
    
    
    (146.3
    )
    
    
    (0.6
    )
    
    
    5.3Mandatorily redeemable convertible
preferred stock accretion and
amortization
    
    
    (498.2
    )
    
    
    
    
    
    
    Warrant valuation
    
    
    1,101.6
    
    
    
    
    
    
    
    FICA tip credit, net
    
    
    369.8
    
    
    
    2.8
    
    
    
    (6.3
    )Restricted stock valuation
    
    
    107.8
    
    
    
    (58.5
    )
    
    
    Stock issued to former shareholders of
R&R Acquisition, Inc.
    
    
    (248.9
    )
    
    
    
    
    
    
    Reconciliation of tax return
    
    
    348.0
    
    
    
    
    
    
    
    Permanent differences and other
    
    
    87.8
    
    
    
    (7.7
    )
    
    
    9.1Effective Rate
    
    
    1,155.6
    %
    
    
    (30.0
    %)
    
    
    42.1
    %
  December 31,
    
    
    January 1,Deferred tax asset (liability):
    
    2006
    
    
    2006Allowance for doubtful accounts
    
    $
    164,000
    
    
    $
    204,000Net operating loss carry forwards
    
    
    1,157,000
    
    
    
    Other reserves
    
    
    774,000
    
    
    
    774,000Deferred tax assets  current
    
    
    2,095,000
    
    
    
    978,000AMT and FICA tip tax credit
    
    
    3,282,000
    
    
    
    2,589,000Net operating loss carry forwards
    
    
    1,791,000
    
    
    
    1,327,000Amortization of goodwill and other
intangibles
    
    
    3,323,000
    
    
    
    4,277,000Depreciation of property and equipment
    
    
    144,000
    
    
    
    (92,000
    )Valuation allowance
    
    
    (744,000
    )
    
    
    (895,000
    )Deferred tax assets  long term
    
    
    7,796,000
    
    
    
    7,206,000Net deferred tax assets
    
    $
    9,891,000
    
    
    $
    8,184,000
   F-22




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##### Table of Contents



Global Employment Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
  NOTE J  STOCKHOLDERS EQUITY
  Equity commitment and consideration
  Ø
    
    Holdings will conduct an offering of at least $5 million of our common stock in a
private placement or public offering to close no later than September 30, 2007. The
common stock shall be issued for cash consideration.Ø
    
    If Holdings has not closed the offering by September 30, 2007, the Company is obligated
to call upon the commitments it has received from Howard Brill, President and CEO of
Holdings, John Borer, Managing Director of Rodman & Renshaw and Charles Gwirtsman,
Chairman of the Board of Holdings, also referred to as the stand-by purchasers, to
purchase an aggregate of $3 million of our common stock on September 30, 2007.Ø
    
    If the dollar amount of common stock sold after February 28, 2007 and prior to
September 30, 2007 exceeds $2 million, the obligation of the stand-by purchasers will be
reduced by the amount of such excess with such reduction being allocated among them in
proportion to their respective purchase commitments.Ø
    
    The purchase price for the shares of common stock to be purchased by each stand-by
purchaser will be equal to the volume weighted average price per share of our common stock
for the ten consecutive trading day period ending on September 29, 2007 as reported by
Bloomberg (or, if Bloomberg terminates such reporting, then using such other reporting
system as our board of directors may designate in good faith) on the primary national or
regional securities exchange or quotation system on which our common stock is then listed
or quoted; provided, that if Holdings has not conducted the offering in good faith using
commercially reasonable efforts the purchase price for the shares shall be the higher of
that price or $4.00 per share. The purchase price paid by the stand-by purchasers may be
paid in cash, by delivery to us of our convertible notes held by such stand-by purchaser
having an aggregate principal amount, including accrued interest, equal to the purchase
price of the common stock to be so purchased, or a combination thereof, at the election of
the stand-by purchaser making such payment.Ø
    
    Holdings will issue to each stand-by purchaser a warrant to purchase one share of
common stock for each share purchased by such stand-by purchaser at an exercise price
equal to 120% of the price at which the common stock is purchased. The warrants will
expire on the seventh anniversary of issuance; provided, however, that no warrants shall
be issued with respect to
 F-23




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##### Table of Contents



Global Employment Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
 any portion of the common stock purchased by such stand-by purchasers through the surrender
of convertible notes.
 Series A Mandatorily Redeemable Convertible Preferred Stock
   Principal
    
    
    Discount
    
    
    NetBalance at issuance on
March 31, 2006
    
    $
    12,750,000
    
    
    $
    (12,549,000
    )
    
    $
    201,0008% accretion
    
    
    773,000
    
    
    
    
    
    
    
    773,000Amortization of discount
    
    
    
    
    
    
    1,039,000
    
    
    
    1,039,000Balance at December 31, 2006
    
    $
    13,523,000
    
    
    $
    (11,510,000
    )
    
    $
    2,013,000
  F-24




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##### Table of Contents



Global Employment Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
  Warrants to purchase common stock
    Number of Shares Underlying Warrants
    
    Exercise Price
    
    Expiration Date388,096 *
    
    $
    6.25
    
    
    March 31, 20112,513,053
    
    $
    6.00
    
    
    March 31, 2013393,365
    
    $
    6.25
    
    
    March 31, 2013
 
  Series C and D preferred stock
    F-25




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##### Table of Contents



Global Employment Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
 Classification and Measurement of Redeemable Securities.
  Series C
    
    
    Series DAmount
    
    
    Shares
    
    
    Amount
    
    
    Shares
    
    
    TotalBalance December 28,
2003
    
    $
    5,705,000
    
    
    
    5,704,518
    
    
    $
    132,000
    
    
    
    8,315,204
    
    
    $
    5,837,000Repurchase of 34,839
shares of Series C
preferred stock
    
    
    (37,000
    )
    
    
    (34,839
    )
    
    
    
    
    
    
    
    
    
    
    (37,000
    )Issuance of 49,050
shares of Series C
preferred stock in
lieu of compensation
    
    
    56,000
    
    
    
    49,050
    
    
    
    
    
    
    
    
    
    
    
    56,000Balance January 2, 2005
    
    
    5,724,000
    
    
    
    5,718,729
    
    
    
    132,000
    
    
    
    8,315,204
    
    
    
    5,856,000Estimated fair value
adjustment
    
    
    16,549,000
    
    
    
    
    
    
    
    6,492,000
    
    
    
    
    
    
    
    23,041,000Balance January 1, 2006
    
    $
    22,273,000
    
    
    
    5,718,729
    
    
    $
    6,624,000
    
    
    
    8,315,204
    
    
    $
    28,897,000
  Stock Options
   F-26




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Global Employment Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
        F-27




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##### Table of Contents



Global Employment Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
  Restricted Stock Plan
      F-28




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##### Table of Contents



Global Employment Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
 Dividends
  Compensation
  NOTE K  WARRANT AND CONVERSION FEATURE VALUATION
 Accounting for Derivative Instruments and
Hedging Activities Accounting for Derivative Financial Instruments Indexed to, and
Potentially Settled in, a Companys Own Stock
     Average expected volatility
    
    
    59.7%Contractual term ranged from
    
    
    4.25 to 7.0 yearsRisk free rate
    
    
    4.76%Expected dividend rate
    
    
    -0-
 F-29




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##### Table of Contents



Global Employment Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
 NOTE L
 COMMITMENTS AND CONTINGENCIES
 Contingencies
   Operating Leases
   Fiscal Years2007
    
    $
    1,533,0002008
    
    
    938,0002009
    
    
    827,0002010
    
    
    489,0002011 and thereafter
    
    
    2,039,000Total
    
    $
    5,826,000
  NOTE M  EMPLOYEE BENEFIT PLANS
  F-30




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##### Table of Contents



Global Employment Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
    NOTE N  RELATED PARTIES
    F-31




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##### Table of Contents



Global Employment Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
  NOTE O
 SEGMENT INFORMATION
 Disclosure about Segments of an Enterprise and Related
Information
 F-32




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##### Table of Contents



Global Employment Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
  Fiscal year2006
    
    2005
    
    2004Staffing revenue
    
    $
    95,135,000
    
    
    $
    81,175,000
    
    
    $
    70,055,000PEO revenue
    
    $
    33,609,000
    
    
    $
    30,388,000
    
    
    $
    27,071,000Total company revenue
    
    $
    128,790,000
    
    
    $
    111,563,000
    
    
    $
    97,126,000Staffing depreciation
    
    $
    116,000
    
    
    $
    124,000
    
    
    $
    141,000PEO depreciation
    
    $
    136,000
    
    
    $
    106,000
    
    
    $
    99,000Total Company depreciation
    
    $
    540,000
    
    
    $
    519,000
    
    
    $
    519,000Staffing income before income taxes
    
    $
    4,243,000
    
    
    $
    7,881,000
    
    
    $
    5,285,000PEO income before income taxes
    
    $
    4,877,000
    
    
    $
    4,563,000
    
    
    $
    2,945,000Total company income (loss) before income taxes
    
    $
    (124,000
    )
    
    $
    (12,093,000
    )
    
    $
    4,827,000Staffing assets
    
    $
    28,828,000
    
    
    $
    23,506,000
    
    
    $
    16,787,000PEO assets
    
    $
    31,618,000
    
    
    $
    26,612,000
    
    
    $
    18,659,000Total company assets
    
    $
    57,202,000
    
    
    $
    52,920,000
    
    
    $
    51,014,000Staffing capital expenditures
    
    $
    220,000
    
    
    $
    103,000
    
    
    $
    131,000PEO capital expenditures
    
    $
    146,000
    
    
    $
    134,000
    
    
    $
    164,000Total capital expenditures
    
    $
    686,000
    
    
    $
    324,000
    
    
    $
    556,000
 NOTE P
 SUBSEQUENT EVENTS
 Acquisition
    F-33




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##### Table of Contents



Global Employment Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
  Current assets
    
    $
    3,000Property, plant and equipment
    
    
    80Goodwill and intangible assets
    
    
    9,500Total Assets acquired
    
    
    12,580Current liabilities
    
    
    1,675Long-term debt
    
    
    Total liabilities assumed
    
    
    1,675Net assets acquired
    
    $
    10,905
  NOTE Q
 QUARTERLY FINANCIAL INFORMATION (Unaudited)
  2006 Quarters
    
    1st
    
    2nd
    
    3rd
    
    4thRevenues, net
    
    $
    31,208
    
    
    $
    33,411
    
    
    $
    33,287
    
    
    $
    30,884Gross profit
    
    $
    8,844
    
    
    $
    9,710
    
    
    $
    9,203
    
    
    $
    8,962Net income (loss)
    
    $
    (1,691
    )
    
    $
    1,330
    
    
    $
    1,085
    
    
    $
    585Income (loss) available
to common shareholders
    
    $
    (1,691
    )
    
    $
    1,330
    
    
    $
    1,085
    
    
    $
    585Income (loss) per share:Basic
    
    $
    (.35
    )
    
    $
    .22
    
    
    $
    .18
    
    
    $
    .10Diluted
    
    $
    (.35
    )
    
    $
    .21
    
    
    $
    .18
    
    
    $
    .102005 Quarters
    
    1st
    
    2nd
    
    3rd
    
    4thRevenues, net
    
    $
    24,673
    
    
    $
    26,476
    
    
    $
    29,987
    
    
    $
    30,427Gross profit
    
    $
    8,060
    
    
    $
    8,539
    
    
    $
    9,217
    
    
    $
    8,554Net income (loss)
    
    $
    1,027
    
    
    $
    1,436
    
    
    $
    1,667
    
    
    $
    (19,855
    )Income (loss) available
to common shareholders
    
    $
    (5,273
    )
    
    $
    1,436
    
    
    $
    1,667
    
    
    $
    (56,548
    )Income (loss) per share:Basic and diluted
    
    $
    (.96
    )
    
    $
    .26
    
    
    $
    .30
    
    
    $
    (11.48
    )
   F-34




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##### Table of Contents



SIGNATURES
  Global Employment Holdings, Inc. 
RegistrantBy:
    /s/ Howard BrillApril 17, 2007
    
    Howard BrillPresident and Chief Executive Officer th
 Principal Executive Officer and Director:/s/ Howard BrillPresident and Chief Executive Officer andHoward Brill
    
    DirectorPrincipal Financial and Accounting Officer:/s/ Dan HollenbachChief Financial Officer, Treasurer andDan Hollenbach
    
    SecretaryDirectors:/s/ Luci Staller Altman

Luci Staller Altman
    
    Director/s/ Charles Gwirtsman

Charles Gwirtsman
    
    Director/s/ Richard Goldman

Richard Goldman
    
    Director/s/ Steven List

Steven List
    
    Chief Operating Officer and Director/s/ Jay Wells

Jay Wells
    
    Director




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##### Table of Contents



Exhibit Index
 Exhibit #
    
    Description
    
    Reference2.1
    
    Plan of Merger between Global Merger Corp and
Global Employment Solutions, Inc.
    
    Incorporated by reference to Exhibit 2.1 to the
Registrants Form 8-K filed on April 4, 2006, as
amended.3.1
    
    Amendment No. 1 to Certificate of Designations,
Preferences and Rights of Series A Convertible
Preferred Stock of Global Employment Holdings, Inc.
    
    Incorporated by reference to Item 3.1 in the
Registrants Form 8-K filed March 6, 20073.2
    
    Amended and Restated Certificate of Incorporation
of Global Employment Holdings, Inc.
    
    Incorporated by reference to Exhibit 3.1 to the
Registrants Form 8-K filed on April 4, 2006, as
amended.




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##### Table of Contents



Exhibit #
    
    Description
    
    Reference3.3
    
    Certificate of Designations, Preferences and Rights
of Global Employment Holdings, Inc.
    
    Incorporated by reference to Exhibit 3.2 to the
Registrants Form 8-K filed on April 4, 2006, as
amended.3.4
    
    Amended and Restated Bylaws of Global Employment
Holdings, Inc.
    
    Incorporated by reference to Exhibit 3.3 to the
Registrants Form 8-K filed on April 4, 2006, as
amended.4.1
    
    Form of Warrant issued under Notes Securities
Purchase Agreement
    
    Incorporated by reference to Exhibit 4.1 to the
Registrants Form 8-K filed on April 4, 2006, as
amended.4.2
    
    Form of Warrant issued under Preferred Stock
Securities Purchase Agreement
    
    Incorporated by reference to Exhibit 4.2
to the Registrants Form 8-K filed on April 4, 2006, as
amended.4.3
    
    Form of Warrant issued under Common Stock
Securities Purchase Agreement
    
    Incorporated by reference to Exhibit 4.3
to the Registrants Form 8-K filed on April 4, 2006, as
amended.4.4
    
    Registration Rights Agreement under Notes Securities
Purchase Agreement
    
    Incorporated by reference to Exhibit 4.4
to the Registrants Form 8-K filed on April 4, 2006, as
amended.4.5
    
    Registration Rights Agreement under Preferred Stock
Securities Purchase Agreement
    
    Incorporated by reference to Exhibit 4.5
to the Registrants Form 8-K filed on April 4, 2006, as
amended.4.6
    
    Registration Rights Agreement under Common Stock
Securities Purchase Agreement
    
    Incorporated by reference to Exhibit 4.6
to the Registrants Form 8-K filed on April 4, 2006, as
amended.4.7
    
    Registration Rights Agreement, dated as of March
31, 2006, among Global Employment Holdings, Inc.,
R&R Investments I, LLC, Arnold P. Kling and Kirk M.
Warshaw
    
    Incorporated by reference to Exhibit 4.7
to the Registrants Form 8-K filed on April 4, 2006, as
amended.4.8
    
    Lock-Up Agreement, dated as of March 31, 2006,
among Global Employment Holdings, Inc., R&R
Investments I, LLC, Arnold P. Kling and Kirk M.
Warshaw
    
    Incorporated by reference to Exhibit 4.8
to the Registrants Form 8-K filed on April 4, 2006, as
amended.5.1
    
    Opinion of Brownstein Hyatt & Farber, P.C.
Regarding Legality of Securities Offered
    
    Incorporated by reference to Exhibit 5.1 to Amendment
No. 1 to Registration Statement on Form S-1 filed on
June 20, 200610.1
    
    Employment Agreement, dated as of March 14, 2007,
between Global Employment Solutions, Inc. and
Steven List
    
    Incorporated by reference to Item 10.1 in the
Registrants Form 8-K filed March 20, 2007




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##### Table of Contents



Exhibit #
    
    Description
    
    Reference10.2
    
    Asset Purchase
Agreement, dated as of
December 29, 2006, by
and among Global
Employment Holdings,
Inc., Career Blazers
Personnel Services,
Inc., Career Blazers
Contingency
Professionals, Inc.,
Career Blazers
Personnel Services of
Washington, D.C., Inc.
and CapeSuccess LLC
    
    Incorporated by reference to Exhibit 10.1 in the
Registrants Form 8-K filed January 5, 200710.3
    
    Amendment to Asset
Purchase Agreement,
dated as of February
28, 2007, by and among
Global Employment
Holdings, Inc., Career
Blazers Personnel
Services, Inc., Career
Blazers Contingency
Professionals, Inc.,
Career Blazers
Personnel Services of
Washington, D.C.,
Inc., and CapeSuccess
LLC
    
    Incorporated by reference to Item 10.2 in the
Registrants Form 8-K filed March 6, 200710.4
    
    Credit Agreement,
dated as of February
28, 2007, by and among
Global Employment
Solutions, Inc.,
Global Employment
Holdings, Inc.,
Temporary Placement
Service, Inc.,
Southeastern Personnel
Management, Inc., Main
Line Personnel
Services, Inc.,
Friendly Advanced
Software Technology,
Inc., Excell Personnel
Services Corporation,
Southeastern Staffing,
Inc., Bay HR, Inc.,
Southeastern Georgia
HR, Inc., Southeastern
Staffing II, Inc.,
Southeastern Staffing
III, Inc.,
Southeastern Staffing
IV, Inc., Southeastern
Staffing V, Inc.,
Southeastern Staffing
VI, Inc., Keystone
Alliance, Inc., and
CapitalSource Finance
LLC, as administrative
agent for the lenders,
and the lenders from
time to time parties
hereto
    
    Incorporated by reference to Item 10.3 in the
Registrants Form 8-K filed March 6, 200710.5
    
    Subordination
Agreement, dated as of
February 28, 2007, by
and among Whitebox
Convertible Arbitrage
Partners, L.P., for
itself and in its
capacity as collateral
agent for the
subordinated
creditors, Radcliffe
SPC, Ltd., for and on
behalf of the Class A
Convertible Crossover
Segregated Portfolio,
Magnetar Capital
Master Fund, Ltd.,
Guggenheim Portfolio
XXXI, LLC, Pandora
Select Partners, LP,
Whitebox Intermarket
Partners, LP, Context
Advantage Master Fund,
L.P., on behalf of
itself, Context
Advantage Fund, LP,
f/k/a Context
Convertible Arbitrage
Fund, L.P., and
Context Offshore
Advantage Fund, Ltd.,
f/k/a Context
Convertible Arbitrage
Offshore, Ltd.,
Context Opportunistic
Master Fund, L.P.,
Gwirtsman Family
Partners, LLC, Luci
Altman, Gregory
Bacharach, Howard
Brill, Richard
Goldman, Daniel
Hollenbach, Terry
Koch, Michael Lazrus,
Steven List, Kenneth
Michaels, Steven
Pennington, Fred
Viarrial, and Jay
Wells, for the benefit
of CapitalSource
Finance LLC, for
itself and as agent
for the lenders now or
hereafter existing
under the Credit
Agreement
    
    Incorporated by reference to Item 10.4 in the
Registrants Form 8-K filed March 6, 200710.6
    
    Security Agreement, dated as of February 28, 2007,
by and among Global Employment Solutions, Inc.,
Global Employment Holdings, Inc., Temporary
Placement Service, Inc., Southeastern Personnel
Management, Inc., Main Line Personnel Services,
Inc., Friendly Advanced Software Technology, Inc.,
Excell Personnel Services Corporation, Southeastern
Staffing, Inc., Bay HR, Inc., Southeastern Georgia
HR, Inc., Southeastern Staffing II, Inc.,
Southeastern Staffing III, Inc., Southeastern
Staffing IV, Inc., Southeastern Staffing V, Inc.,
Southeastern Staffing VI, Inc., Keystone Alliance,
Inc., and CapitalSource Finance LLC, in its
capacity as agent for the lender parties
    
    Incorporated by reference to Item 10.5 in the
Registrants Form 8-K filed March 6, 200710.7
    
    Securities Pledge Agreement, dated as of February
28, 2007, between CapitalSource Finance LLC, as
administrative agent for the lenders under the
Credit Agreement, and Global Employment Holdings,
Inc.
    
    Incorporated by reference to Item 10.6 in the
Registrants Form 8-K filed March 6, 200710.8
    
    Securities Pledge Agreement, dated as of February
28, 2007, between CapitalSource Finance LLC, as
administrative agent for the lenders under the
Credit Agreement, and Global Employment Solutions,
Inc.
    
    Incorporated by reference to Item 10.7 in the
Registrants Form 8-K filed March 6, 200710.9
    
    Securities Pledge Agreement, dated as of February
28, 2007, between CapitalSource Finance LLC, as
administrative agent for the lenders under the
Credit Agreement, and Southeastern Staffing, Inc.
    
    Incorporated by reference to Item 10.8 in the
Registrants Form 8-K filed March 6, 200710.10
    
    Securities Pledge Agreement, dated as of February
28, 2007, between CapitalSource Finance LLC, as
administrative agent for the lenders under the
Credit Agreement, and Excell Personnel Services
Corporation
    
    Incorporated by reference to Item 10.9 in the
Registrants Form 8-K filed March 6, 200710.11
    
    First Amendment to Senior Secured Convertible
Notes, dated as of February 28, 2007,
by and among Global Employment Holdings, Inc. and
the holders of Global Employment Holdings, Inc.
senior secured convertible notes
    
    Incorporated by reference to Item 10.10 in the
Registrants Form 8-K filed March 6, 2007




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##### Table of Contents



Exhibit #
    
    Description
    
    Reference10.12
    
    Letter from Global Employment Holdings, Inc., dated
February 28, 2007, to holders of
the senior convertible notes and the Series A
convertible preferred stock regarding
commitment to issue equity
    
    Incorporated by reference to Item 10.11 in the
Registrants Form 8-K filed March 6, 200710.13
    
    Asset Purchase Agreement, dated as of December 29,
2006, between Global Employment Holdings, Inc.,
Career Blazers Personnel Services, Inc., Career
Blazers Contingency Professionals, Inc., Career
Blazers Personnel Services of Washington, D.C.,
Inc. and CapeSuccess LLC
    
    Incorporated by reference to Item 10.1 in the
Registrants Form 8-K filed January 5, 200710.14
    
    Amended and Restated Employment Agreement, dated as
of January 2, 2007, between
Global Employment Solutions, Inc. and Terry Koch
    
    Incorporated by reference to Item 10.2 in the
Registrants Form 8-K filed January 5, 200710.15
    
    Global Employment Holdings, Inc. 2006 Stock Plan
    
    Incorporated by reference to Item 10.1 in the
Registrants Quarterly Report on Form 10-Q filed
November 15, 200610.16
    
    Convertible Note and Warrant Sale Agreement, dated
as of September 28, 2006, between Amatis Limited,
Global Employment Holdings, Inc. and the purchasers
named in Schedule I thereto
    
    Incorporated by reference to Item 10.1 in the
Registrants Form 8-K filed October 4, 200610.17
    
    First Amendment to Notes Securities Purchase
Agreement, dated as of September 28, 2006, by and
among Global Employment Holdings, Inc., Global
Employment Solutions, Inc., and the investors
listed on the signature pages thereto
    
    Incorporated by reference to Item 10.2 in the
Registrants Form 8-K filed October 4, 200610.18
    
    First Amendment to Security Agreement, Pledge
Agreement and Guaranty, dated as of September 28,
2006, by and among Global Employment Holdings, Inc.
Global Employment Solutions, Inc., various
subsidiaries of Global Employment Solutions, Inc.,
Amatis Limited and Whitebox Convertible Arbitrage
Partners, LP
    
    Incorporated by reference to Item 10.3 in the
Registrants Form 8-K filed October 4, 200610.19
    
    First Amendment to Amended and Restated Credit and
Security Agreement, dated as of September 26, 2006,
by and among Wells Fargo Bank, National
Association, Global Employment Solutions, Inc. and
various subsidiaries
    
    Incorporated by reference to Item 10.4 in the
Registrants Form 8-K filed October 4, 200610.20
    
    Amended and Restated Credit and Security Agreement
among Wells Fargo Bank, National Association,
Global Employment Solutions, Inc. and various
subsidiaries
    
    Incorporated by reference to Exhibit 10.19 to
Amendment No. 3 to Registration Statement on Form S-1
filed on July 26, 200610.21
    
    Fifth Amended and Restated Revolving Promissory
Note under Amended and Restated Credit and Security
Agreement
    
    Incorporated by reference to Exhibit 10.20 to
Amendment No. 3 to Registration Statement on Form S-1
filed on July 26, 200610.22
    
    First Amended and Restated Term Note under Amended
and Restated Credit and Security Agreement
    
    Incorporated by reference to Exhibit 10.21 to
Amendment No. 3 to Registration Statement on Form S-1
filed on July 26, 200610.23
    
    Form of Pledge Agreement under Amended and Restated
Credit and Security Agreement
    
    Incorporated by reference to Exhibit 10.22 to
Amendment No. 3 to Registration Statement on Form S-1
filed on July 26, 200610.24
    
    Form of Patent and Trademark Security Agreement
under Amended and Restated Credit and Security
Agreement
    
    Incorporated by reference to Exhibit 10.23 to
Amendment No. 3 to Registration Statement on Form S-1
filed on July 26, 200610.25
    
    Form of Copyright Security Agreement under Amended
and Restated Credit and Security Agreement
    
    Incorporated by reference to Exhibit 10.24 to
Amendment No. 3 to Registration Statement on Form S-1
filed on July 26, 2006




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##### Table of Contents



Exhibit #
    
    Description
    
    Reference10.26
    
    Amendment to Guarantor Documents under Amended and
Restated Credit and Security Agreement
    
    Incorporated by reference to Exhibit 10.37 to
Amendment No. 3 to Registration Statement on Form S-1
filed on July 26, 200610.27
    
    Amended and Restated Employment Agreement, dated
July 15, 2006, between Global Employment Holdings,
Inc., Global Employment Solutions, Inc. and Howard
Brill
    
    Incorporated by reference to Exhibit 10.15 to
Amendment No. 2 to Registrants Form 8-K filed on July
25, 200610.28
    
    Amended and Restated Employment Agreement, dated
July 15, 2006, between Global Employment Holdings,
Inc., Global Employment Solutions, Inc. and Dan
Hollenbach
    
    Incorporated by reference to Exhibit 10.16 to
Amendment No. 2 to Registrants Form 8-K filed on July
25, 200610.29
    
    Amended and Restated Employment Agreement, dated
July 15, 2006, among Global Employment Solutions,
Inc. and Stephen Pennington
    
    Incorporated by reference to Exhibit 10.18 to
Amendment No. 2 to Registrants Form 8-K filed on July
25, 200610.30
    
    Form of Share Purchase Agreement among Global
Employment Solutions, Inc., Global Employment
Holdings, Inc. and the shareholders of Global
Employment Solutions, Inc.
signatory thereto
    
    Incorporated by reference to Exhibit 10.1 to the
Registrants Form 8-K filed with the Securities and
Exchange Commission on April 4, 2006 (File No.
000-51737), as amended.10.31
    
    Notes Securities Purchase Agreement, dated as of
March 31, 2006, among Global
Employment Solutions, Inc. and the investors listed
on the Schedule of Buyers
attached thereto
    
    Incorporated by reference to Exhibit 10.2 to the
Registrants Form 8-K filed with the Securities and
Exchange Commission on April 4, 2006 (File No.
000-51737), as amended.10.32
    
    Joinder Agreement of Global Employment Holdings,
Inc. to Notes Securities Purchase Agreement
    
    Incorporated by reference to Exhibit 10.3 to the
Registrants Form 8-K filed with the Securities and
Exchange Commission on April 4, 2006 (File No.
000-51737), as amended.10.33
    
    Form of Note under Notes Securities Purchase
Agreement
    
    Incorporated by reference to Exhibit 10.4 to the
Registrants Form 8-K filed with the Securities and
Exchange Commission on April 4, 2006 (File No.
000-51737), as amended.10.34
    
    Guaranty under Notes Securities Purchase Agreement
    
    Incorporated by reference to Exhibit 10.5 to the
Registrants Form 8-K filed with the Securities and
Exchange Commission on April 4, 2006 (File No.
000-51737), as amended.10.35
    
    Pledge Agreement under Notes Securities Purchase
Agreement
    
    Incorporated by reference to Exhibit 10.6 to the
Registrants Form 8-K filed with the Securities and
Exchange Commission on April 4, 2006 (File No.
000-51737), as amended.10.36
    
    Security Agreement under Notes Securities Purchase
Agreement
    
    Incorporated by reference to Exhibit 10.7 to the
Registrants Form 8-K filed with the Securities and
Exchange Commission on April 4, 2006 (File No.
000-51737), as amended.




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##### Table of Contents



Exhibit #
    
    Description
    
    Reference10.37
    
    Subordination Agreement under Notes Securities
Purchase
Agreement
    
    Incorporated by reference to Exhibit 10.8 to the
Registrants Form 8-K filed with the Securities and
Exchange Commission on April 4, 2006 (File No.
000-51737), as amended.10.38
    
    Preferred Stock Securities Purchase Agreement,
dated as of March 31, 2006, among Global Employment
Solutions, Inc. and the investors listed on the
Schedule of Buyers attached thereto
    
    Incorporated by reference to Exhibit 10.9 to the
Registrants Form 8-K filed with the Securities and
Exchange Commission on April 4, 2006 (File No.
000-51737), as amended.10.39
    
    Joinder Agreement of Global Employment Holdings,
Inc. to Preferred Stock Securities Purchase
Agreement
    
    Incorporated by reference to Exhibit 10.10 to the
Registrants Form 8-K filed with the Securities and
Exchange Commission on April 4, 2006 (File No.
000-51737), as amended.10.40
    
    Common Stock Securities Purchase Agreement, dated
as of March 31, 2006, among Global Employment
Solutions, Inc. and the investors listed on the
Schedule of Buyers attached thereto
    
    Incorporated by reference to Exhibit 10.11 to the
Registrants Form 8-K filed with the Securities and
Exchange Commission on April 4, 2006 (File No.
000-51737), as amended.10.41
    
    Joinder Agreement of Global Employment Holdings,
Inc. to Common Stock Securities Purchase Agreement
    
    Incorporated by reference to Exhibit 10.12 to the
Registrants Form 8-K filed with the Securities and
Exchange Commission on April 4, 2006 (File No.
000-51737), as amended.10.42
    
    Form of Indemnification Agreement
    
    Incorporated by reference to Exhibit 10.13 to the
Registrants Form 8-K filed with the Securities and
Exchange Commission on April 4, 2006 (File No.
000-51737), as amended.10.43
    
    Form of Noncompetition Agreement
    
    Incorporated by reference to Exhibit 10.14 to the
Registrants Form 8-K filed with the Securities and
Exchange Commission on April 4, 2006 (File No.
000-51737), as amended.10.44
    
    Amended and Restated Employment Agreement, dated
July 15, 2006, between Global Employment Holdings,
Inc., Global Employment Solutions, Inc. and Howard
Brill
    
    Incorporated by reference to Exhibit 10.15 to the
Registrants Form 8-K filed with the Securities and
Exchange Commission on April 4, 2006 (File No.
000-51737), as amended.10.45
    
    Amended and Restated Employment Agreement, dated
July 15, 2006, between Global Employment Holdings,
Inc., Global Employment Solutions, Inc. and Dan
Hollenbach
    
    Incorporated by reference to Exhibit 10.16 to the
Registrants Form 8-K filed with the Securities and
Exchange Commission on April 4, 2006 (File No.
000-51737), as amended.10.46
    
    Non-Disclosure, Non-Competition, Arbitration and
Employment Agreement, dated April 4, 2001, among
Global Employment Solutions, Inc., Southeastern
Staffing, Inc. and Robert Larkin
    
    Incorporated by reference to Exhibit 10.17 to the
Registrants Form 8-K filed with the Securities and
Exchange Commission on April 4, 2006 (File No.
000-51737), as amended.




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##### Table of Contents



Exhibit #
    
    Description
    
    Reference10.47
    
    Amended and Restated Employment Agreement, dated
July 15, 2006, among Global Employment Solutions,
Inc. and Stephen Pennington
    
    Incorporated by reference to Exhibit 10.18 to the
Registrants Form 8-K filed with the Securities and
Exchange Commission on April 4, 2006 (File No.
000-51737), as amended.10.48
    
    Form of Guaranty under Fifth Amendment to Credit
and Security Agreement and Waiver of Defaults and
Amended and Restated Credit and Security Agreement
    
    Incorporated by reference to Exhibit 10.25 to the
Registrants Form 8-K filed with the Securities and
Exchange Commission on April 4, 2006 (File No.
000-51737), as amended.10.49
    
    Form of Security Agreement under Fifth Amendment to
Credit and Security Agreement and Waiver of
Defaults
    
    Incorporated by reference to Exhibit 10.26 to the
Registrants Form 8-K filed with the Securities and
Exchange Commission on April 4, 2006 (File No.
000-51737), as amended.10.50
    
    Form of Pledge Agreement under Fifth Amendment to
Credit and Security Agreement and Waiver of
Defaults
    
    Incorporated by reference to Exhibit 10.22 to the
Registrants Form 8-K filed on July 25, 2006, as
amended.10.51
    
    Form of Patent and Trademark Security Agreement
under Fifth Amendment to
Credit and Security Agreement and Waiver of Defaults
    
    Incorporated by reference to Exhibit 10.23 to the
Registrants Form 8-K filed on July 25, 2006, as
amended10.52
    
    Form of Copyright Security Agreement under Fifth
Amendment to Credit and
Security Agreement and Waiver of Defaults
    
    Incorporated by reference to Exhibit 10.24 to the
Registrants Form 8-K filed on July 25, 2006, as
amended10.53
    
    Sublease Agreement, dated as of March 23, 2006,
among Continental Casualty Company and Global
Employment Solutions, Inc.
    
    Incorporated by reference to Exhibit 10.28 to the
Registrants Form 8-K filed on July 10, 2006, as
amended10.54
    
    Form of Employment Agreement for Consulting and
Temporary Employees in Chicago, IL
    
    Incorporated by reference to Exhibit 5.1 to Amendment
No. 1 to Registration Statement on Form S-1 filed on
June 20, 200610.55
    
    Form of Employment Agreement for Permanent
Employees in Chicago, IL
    
    Incorporated by reference to Exhibit 5.1 to Amendment
No. 1 to Registration Statement on Form S-1 filed on
June 20, 200610.56
    
    Form of Employment Agreement for Consulting and
Temporary Employees in Hauppauge, NY
    
    Incorporated by reference to Exhibit 5.1 to Amendment
No. 1 to Registration Statement on Form S-1 filed on
June 20, 200610.57
    
    Form of Employment Agreement for Permanent
Employees in Hauppauge, NY
    
    Incorporated by reference to Exhibit 5.1 to Amendment
No. 1 to Registration Statement on Form S-1 filed on
June 20, 200610.58
    
    Form of Employment Agreement for Consulting and
Temporary Employees in Bala Cynwyd, PA
    
    Incorporated by reference to Exhibit 5.1 to Amendment
No. 1 to Registration Statement on Form S-1 filed on
June 20, 200610.59
    
    Form of Employment Agreement for Permanent
Employees in Bala Cindy, PA
    
    Incorporated by reference to Exhibit 5.1 to Amendment
No. 1 to Registration Statement on Form S-1 filed on
June 20, 200610.60
    
    Form of Confidentiality, Noncompetition and
Nonsolicitation Agreement
    
    Incorporated by reference to Exhibit 5.1 to Amendment
No. 1 to Registration Statement on Form S-1 filed on
June 20, 200610.61
    
    Form of Confidentiality, Noncompetition and
Nonsolicitation Agreement (Southeastern Companies,
Inc.)
    
    Incorporated by reference to Exhibit 5.1 to Amendment
No. 1 to Registration Statement on Form S-1 filed on
June 20, 2006




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##### Table of Contents



Exhibit #
    
    Description
    
    Reference16.62
    
    Engagement Letter for Placement Agent Rodman &
Renshaw, LLC
    
    Incorporated by reference to Exhibit 10.27 to
Registration Statement on Form S-1 filed on May 1, 200614.1
    
    Code of Conduct of Global Employment Holdings, Inc.
    
    Incorporated by reference to Exhibit 14.1 to the Registrants Form 8-K filed on April 4, 2006, as amended14.2
    
    Audit Committee Charter of Global Employment Holdings, Inc.
    
    Incorporated by reference to Exhibit 14.1 to the Registrants Form 8-K filed on April 4, 2006, as amended14.3
    
    Compensation Committee Charter of Global Employment Holdings, Inc.
    
    Incorporated by reference to Exhibit 14.1 to the Registrants Form 8-K filed on April 4, 2006, as amended21.1
    
    List of subsidiaries of Global Employment Holdings, Inc.
    
    Incorporated by reference to Exhibit 21.1 to
Registration Statement on Form S-1 filed on May 1,
200623.1
    
    Consent of Mayer Hoffman McCann P.C.
    
    Filed herewith.23.2
    
    Consent of Preferred Insurance Capital Consultants, LLC
    
    Filed herewith.31.1
    
    Certification of Howard Brill, Chief Executive Officer and President
pursuant to Rule 13a-14(a) and the Exchange Act of 1934.
    
    Filed herewith.31.2
    
    Certification of Dan Hollenbach, Chief Financial Officer pursuant to
Rule 13a-14(a) and the Exchange Act of 1934.
    
    Filed herewith.32.1
    
    Certification of Howard Brill, Chief Executive Officer and President
and Dan Hollenbach, Chief Financial Officer pursuant to 18 U.S.C.
Section 1350.
    
    , Filed herewith.