Our Business

GEX Management is a management consulting and technology business services company providing client employers and their employees with a broad portfolio of related products and services. We provide both long and short-term consulting solution services, including enterprise strategy and technology consulting, enterprise project management; and Human Capital Management (HCM) solution capabilities.





Business Operations

GEX Management works continuously to expand its service offerings to its clients in order to assist them to achieve their respective business goals. Our unique and tailored approach, coupled with an ever-expanding array of services, has significantly differentiated the Company from competitors. GEX likewise distinguished itself in the market via accessible and exceptional client support ensuring that we will not only gain new clients but will retain those we currently have, resulting in long-term sustainability. Clients typically initiate service by means of a three-month agreement with the Company. The contract thereby automatically renews until terminated with a 30-day notice by either party.





Critical Accounting Policies

The Company's financial statements were prepared in conformity with U.S. generally accepted accounting principles. As such, management is required to make certain estimates, judgments and assumptions that they believe are reasonable based upon the information available. These estimates and assumptions affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of income and expense during the periods presented.





Revenue Recognition

Staffing Services and Professional Services

Staffing services revenue is derived from supplying temporary staff to clients. Temporary staff generally consists of temporary workers working under a contract for a fixed period of time, or on a specific client project. The temporary staff includes both GEX employees and third-parties contracted by GEX.

Temporary staff are provided to clients through a Staffing Service Agreement ('SSA') involving a specified service that the temporary staff will provide to the client. When GEX is the principal or primary obligor for the temporary staff, GEX records the gross amount of the revenue and expense from the SSA.

GEX is generally the primary obligor when GEX is responsible for the fulfillment of services under the SSA, even if the temporary staff are not employees of GEX. This typically occurs when GEX contracts third-parties to fulfill all or part of the SSA with the client, but GEX remains the holder of the credit risk associated with the SSA, and GEX has total discretion in establishing the pricing under the SSA.

All other Professional Services revenues are recognized in the period the services are performed as stipulated in the client's Outsourcing Agreement, when the client is invoiced, and collectability is reasonably assured. Revenue recognition for arrangements with multiple deliverables constituting a single unit of accounting is recognized generally over the greater of the term of the arrangement or the expected period of performance.

All staffing and consulting workers are completely vetted by the company to ensure their employment terms are in adherence to all applicable state. federal and immigration laws. Additionally, GEX Management carries professional liability and fidelity/crime insurance to protect against risks involving working at third party client locations that require the workers to handle sensitive client data and equipment.





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Results of Operations for the Year Ended December 31, 2021 Compared to the Year Ended December 31, 2020





Revenues

Revenues for the year ended December 31, 2021 and 2020 were $1,315,669 and $750,682, respectively. The 75% increase in year over year sales is attributable to a significant expansion in client footprints, aggressive business development efforts and a focus on higher end management and technology consulting business expansion and growth opportunities. Additionally, the management has put in processes in place to strengthen internal controls such as, (1) adherence to established contract markups through enforcement of systematic and auto-invoicing processes to minimize manual errors and enforcing timely invoice submission to clients (2) frequent follow ups by the executive management team to ensure invoices and receivables are tracked and closed in a timely manner, and (3) timely alerts to customers to notify on upcoming billing cycles and payment dues. All of these efforts have resulted in a strong

Cost of Services and Gross Profit

The Company's gross profit in 2021 was $820,971 compared to $636,965 in 2020. The 29% increase in gross margin was primarily due to signing more consulting contracts in 2021 compared to 2020 and also significant cost rationalization efforts associated with customer contracts relating to our business services in 2021 compared to 2020 and prior periods.





Operating Expense

Total operating expense in the years ended December 31, 2021 and 2020 were $2,719,876 and $680,202 respectively. The increased expenses reflect the increased operating expenses associated with higher staff addition and costs related to greater volume of customer contracts relating to our business services in 2021 compared to 2020





Net Loss

Net loss for the years ended December 31, 2021 and 2020 was $6,052,523 and $224,947, respectively. The higher losses for 2021 compared to 2020 was attributable to increased operating expenses and non-operating expenses resulting from the loss on debt extinguishment and impairment of long-lived assets.

Liquidity and Capital Resources

The Company has identified several potential financing sources in order to raise the capital necessary to fund operations through December 31, 2022. Management believes that it has been historically difficult for minority and women owned businesses to get access to reasonably price capital at scale which creates an opportunity to invest into these companies and receive a greater than average return for our shareholders. However, the opportunity to make a significant return for our investors is so overwhelmingly compelling that management had in the past taken short term working capital loans against future receivables in order to timely fund the growth of the company. Management intends to move away from these expensive debt like obligations and rely on other traditional and non-traditional debt instruments primarily in the form of convertible notes as well as explore various other alternatives including debt and equity financing vehicles, strategic partnerships, government programs that may be available to the Company, as well as trying to generate additional sales and increase margins. However, at this time the Company has no commitments to obtain any additional funds, and there can be no assurance such funds will be available on acceptable terms or at all. If the Company is unable to obtain additional funding, the Company's financial condition and results of operations may be materially adversely affected and the Company may not be able to continue operations.

Additionally, even if the Company raises sufficient capital through additional equity or debt financing, strategic alternatives or otherwise, there can be no assurances that the revenue or capital infusion will be sufficient to enable it to develop its business to a level where it will be profitable or generate positive cash flow. If the Company incurs additional debt, a substantial portion of its operating cash flow may be dedicated to the payment of principal and interest on such indebtedness, thus limiting funds available for business activities. The terms of any debt securities issued could also impose significant restrictions on the Company's operations. Broad market and industry factors may seriously harm the market price of our common stock, regardless of our operating performance, and may adversely impact our ability to raise additional funds. Similarly, if the Company's common stock is delisted from the public exchange markets, it may limit its ability to raise additional funds.

In addition, at this time we cannot predict the impact of COVID-19 on our ability to obtain financing necessary for the Company to fund its working capital requirements.





10






A summary of our cash flows for the twelve months ended December 31, was as
follows:



                                                         2021           2020
Net cash used in operating activities                 $  (948,045 )   $ (93,192 )
Net cash used in investing activities                           -             -
Net cash provided by financing activities               1,048,067        95,570

Net increase(decrease) in cash and cash equivalents $ 130,997 $ 2,378

Net cash in operating activities was a use of $2,140,047 for the twelve months ended December 31, 2021 as compared to $461,038 cash in operating activities for the twelve months ended December 31, 2020. The increase in cash used in operating activities was in part due to higher operating expenses in 2021 as the Company focused on significantly expanding the business development effort, streamlined operating costs, marketed high margin customer contracts, deployed business acquisition capital and rationalizing expenses to support long term growth.

Net cash provided by financing activities of $1,048,067 for the twelve months ended December 31, 2021 was primarily from debt /debt like instruments in the balance sheet.

Net cash used in investing activities for the twelve months ended December 31, 2021 was $0.

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