Washington | 7363 | 91-2079472 | ||
(State or other jurisdiction of | (Primary Standard Industrial | (I.R.S. Employer | ||
incorporation or organization) | Classification Code Number) | Identification No.) |
Proposed | Proposed | |||||||||||||||||||||
maximum | maximum | |||||||||||||||||||||
Title of each class of | offering | aggregate | Amount of | |||||||||||||||||||
securities | Amount to be | price per | offering | registration | ||||||||||||||||||
to be registered | registered (1) | share (2) | price (2) | fee (3) | ||||||||||||||||||
Common Stock, $0.001 par value
|
10,296,885 | $ | 1.29 | $ | 13,282,981 | $ | 522.02 | |||||||||||||||
Common Stock issuable upon
exercise of Warrants
|
5,264,878 | $ | 1.25 | $ | 6,581,098 | $ | 258.64 | |||||||||||||||
Common Stock issuable upon
exercise of Placement Agent
Warrants
|
1,047,925 | $ | 1.25 | $ | 1,309,906 | $ | 51.48 | |||||||||||||||
Total
|
16,609,688 | $ | 21,173,985 | $ | 832.14 | |||||||||||||||||
(1) | In addition, pursuant to Rule 416 under the Securities Act of 1933, this Registration Statement includes an indeterminate number of additional shares as may be issuable as a result of stock splits or stock dividends which occur during this continuous offering. | |
(2) | Estimated solely for the purpose of calculating the amount of the registration fee pursuant to Rule 457(c) under the Securities Act of 1933 based upon the average of the bid and asked prices of the registrants common stock on January 11, 2008 as reported by the OTC Bulletin Board. |
The information in this prospectus is not complete and may be changed. The selling shareholders may
not sell these securities until the registration statement filed with the Securities and Exchange
Commission is effective. This prospectus is not an offer to sell these securities and is not
soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not
permitted.
Page 2
PROSPECTUS
16,609,688 Shares
Common Stock
Page 4
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Page 7
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Page 14
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Page 16
Page 17
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Page 28
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Page 40
Page 41
Page 42
Page 43
Page 44
F-1
F-2
F-3
F-4
F-5
F-6
F-7
F-8
F-9
F-10
F-11
F-12
F-13
F-14
F-15
F-16
F-17
F-18
F-19
F-20
F-21
F-22
F-23
F-24
F-25
F-26
F-27
F-28
F-29
F-30
F-31
F-32
F-33
F-34
F-35
F-36
F-37
F-38
F-39
F-40
F-41
F-42
F-43
F-44
F-45
F-46
F-47
F-48
F-49
F-50
F-51
F-52
F-53
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(Unaudited)
(Unaudited)
Fifty-two weeks
Thirty-Nine Weeks
Thirty-Nine Weeks
Year Ended
Year Ended
Year Ended
Ended
Ended
Ended
Statements of Operations
December 31, 2003
December 31, 2004
December 31, 2005
December 29, 2006
September 29, 2006
September 28, 2007
70,622,505
45,431,317
74,158,370
425,789
988,042
1,749,381
535,745
535,745
5,792
58,993
440,878
113,376
30,343
262,684
431,581
1,047,035
2,190,259
71,271,626
45,997,405
74,421,054
51,054,838
32,719,116
53,661,722
431,581
1,047,035
2,190,259
20,216,788
13,278,289
20,759,332
629,251
1,184,698
1,833,280
22,020,314
13,866,027
23,606,467
(197,670
)
(137,663
)
356,979
(1,803,526
)
(587,738
)
(2,847,135
)
(11,789
)
(2,221
)
(615,622
)
(321,564
)
(1,108,957
)
(209,459
)
(137,663
)
354,758
(2,419,148
)
(909,302
)
(3,956,092
)
Balance Sheets
December 31, 2003
December 31, 2004
December 31, 2005
December 29, 2006
September 29, 2006
September 28, 2007
230,061
117,250
2,045,373
12,475,943
13,926,747
14,814,741
67,193
129,147
1,589,253
3,390,696
2,796,761
3,348,636
62,085
130,045
1,635,232
33,493,356
34,038,737
36,844,629
359,339
376,442
5,269,858
49,359,995
50,762,245
55,008,006
128,608
110,564
592,201
12,303,901
13,014,825
18,291,495
106,190
1,125,000
2,062,928
1,715,407
2,507,791
234,798
110,564
1,717,201
14,366,829
14,730,232
20,799,286
124,541
265,878
3,552,657
34,993,166
36,032,013
34,208,720
359,339
376,442
5,269,858
49,359,995
50,762,245
55,008,006
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RESULTS OF OPERATIONS
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Thirty-nine Weeks Ended
September 28, 2007
%
of Revenue
September 29, 2006
%
of Revenue
% Change
$
74,421,054
$
45,997,405
62
%
53,661,722
72.1
%
32,719,116
71.1
%
64
%
20,759,332
27.9
%
13,278,289
28.9
%
56
%
22,984,458
30.9
%
13,650,147
29.7
%
68
%
622,009
0.8
%
215,880
0.5
%
188
%
1,108,957
1.5
%
365,994
0.8
%
203
%
0.0
%
(44,430
)
-0.1
%
$
(3,956,092
)
-5.3
%
$
(909,302
)
-2.0
%
335
%
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Increase the level of direct selling activities at each existing store;
Implement direct mail campaigns, radio and billboard advertising, limited
yellow-page advertising and word of mouth; and
Develop national accounts with large corporate customers.
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Chairman of the Board, Chief Executive Officer, and President
Director, Chief Financial Officer and Secretary
Director, Executive Vice President and Chief Information Officer
Director and Chief Operating Officer
Director
Executive Vice President and General Counsel
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appointing, approving the compensation of, and assessing the independence of our
independent registered public accounting firm;
reviewing and discussing with management and the independent registered public
accounting firm our annual and quarterly financial statements and related disclosures;
pre-approving auditing and permissible non-audit services, and the terms of such
services, to be provided by our independent registered public accounting firm;
coordinating the oversight and reviewing the adequacy of our internal control over
financial reporting;
establishing policies and procedures for the receipt and retention of accounting related
complaints and concerns; and
preparing the audit committee report required by Securities and Exchange Commission
rules to be included in our annual proxy statement.
annually reviewing and approving corporate goals and objectives relevant to
compensation of our chief executive officer;
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evaluating the performance of our chief executive officer in light of such corporate
goals and objectives and determining the compensation of our chief executive officer;
reviewing and approving the compensation of our other executive officers;
overseeing and administering our compensation, welfare, benefit and pension plans and
similar plans; and
reviewing and making recommendations to the board with respect to director
compensation.
developing and recommending to the board criteria for board and committee membership;
establishing procedures for identifying and evaluating director candidates including
nominees recommended by shareholders;
identifying individuals qualified to become board members;
recommending to the board the persons to be nominated for election as directors and to
each of the boards committees;
developing and recommending to the board a code of business conduct and ethics and a
set of corporate governance guidelines; and
overseeing the evaluation of the board and management.
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Cash compensation in the form of base salary and incentive compensation
(performance-based bonuses);
Equity-based awards;
Deferred compensation plans; and
Other components of compensation.
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All Other
Name and Principal Position
Year
Salary
Compensation
Total
2007
$
180,000
$
180,000
2006
$
180,000
$
180,000
2007
$
120,000
$
120,000
2006
$
120,000
$
120,000
2007
$
120,000
$
120,000
2006
$
120,000
$
120,000
2007
$
120,000
$
120,000
2006
$
27,692
$
20,770
$
48,462
2006
$
110,769
$
110,769
(1)
Glenn Welstad is employed by the company at an annual salary of $180,000. During the first
half of 2006, Mr. Welstad deferred $90,000 of his salary. This amount was subsequently
converted into $90,000 of common stock in the third quarter of 2007 (6,000 shares).
(2)
Brad E. Herr was employed by the Company part time on October 1, 2006, and full time on
December 1, 2006. Prior to that time, Mr. Herr performed consulting services for the company
at $3,000 per month. At September 28, 2007, Mr. Herr was owed $20,770 for consulting services
performed prior to his employment.
(3)
Mr. Olsen served as chief financial officer from January 1, 2006 through December 19, 2006.
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$
360,654
94,091
60,306
27,659
2,714
814
31,909
$
578,147
(1)
Mr. Welstad is our Chief Executive Officer and a director. The amount
due Mr. Welstad included balances owing for new store surcharge fees, accrued
salary owed from 2006, other assumed liabilities in connection with equipment
purchases, other expenses related to our acquisition of temporary staffing stores,
the Anytime Labor acquisitions, and additional advances for working capital.
(2)
Mr. Enget, Mr. Gilbert, Mr. Hancock, Mr. Junck, and Mr. Todd Welstad are
or were directors and officers of our company. The amounts due consist of
liabilities incurred in connection with the purchase of temporary staffing stores
owned or controlled by such individuals in 2006.
(3)
Mr. Wallace is a former franchisee and is currently employed as a manager
with the Company.
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Name and Address of Beneficial Owner
Common Stock
Percent of Class
P.O. Box 969
Minot, ND 58702
3,811,631
10.69
%
8528 Carriage Hill Circle
Savage, MN 55378
3,588,961
10.06
%
1307 N. King James Lane
Liberty Lake, WA 99019
2,036,168
5.71
%
(1)
Mr. Thompson and Mr. Semerad share beneficial ownership of 3,477,626 shares through
common ownership of the entities that legally own the referenced shares. Mr. Semerad is a
Regional Vice President with the company.
(2)
Mr. Coghlans ownership includes shares beneficially owned through the Coghlan Family
Corporation and Coghlan LLC.
Total
Individual
Shared
Beneficial
Percent of
Name of Beneficial Owner
Ownership
Ownership
Ownership
Class
601,879
601,879
1.69
%
240,000
240,000
0.67
%
419,054
2,553,311
2,972,365
8.33
%
5,523,453
4,316,646
9,840,099
27.59
%
19,864
343,522
363,386
1.02
%
6,804,250
7,213,479
14,017,729
39.30
%
(3)
The individuals listed acquired a portion or all of their shares at the time of the
acquisitions of assets from the franchisees in May and June, 2006. The number of shares
indicated includes shares held in the names of the legal entities whose assets were
acquired. The shares are considered beneficially owned by the individual if he has the
power to vote and the power to sell the shares owned by the LLC. Shares owned by an LLC in
which multiple officers or directors held an interest and over which such officers or
directors had shared voting and investment power over the shares are deemed beneficially
owned by each such officer or director and have been counted more than once for purposes of
this Table. Such shares are reflected in the Shared Ownership column.
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(4)
Mr. Gilberts shares include shares owned by Thomas E. and Bonita L. Gilbert. Trustees of
the Thomas E. Gilbert Revocable Trust Dated 6-29-1999.
(5)
Mr. Herrs ownership includes shares beneficially owned through his IRA account.
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Ownership
BENEFICIAL OWNERSHIP
Percentage
Number
After
Shareholder
Shares
Warrants
Total
of Total (1)
Offered
Offering
17,404
68,373
85,777
0.20
%
85,777
75,000
37,500
112,500
0.27
%
112,500
100,000
50,000
150,000
0.36
%
150,000
25,000
12,500
37,500
0.09
%
37,500
25,000
12,500
37,500
0.09
%
37,500
10,000
5,000
15,000
0.04
%
15,000
30,000
15,000
45,000
0.11
%
45,000
250,000
125,000
375,000
0.89
%
375,000
200,000
100,000
300,000
0.71
%
300,000
400,000
200,000
600,000
1.43
%
600,000
100,000
50,000
150,000
0.36
%
150,000
50,000
25,000
75,000
0.18
%
75,000
100,000
50,000
150,000
0.36
%
150,000
40,000
20,000
60,000
0.14
%
60,000
200,000
100,000
300,000
0.71
%
300,000
100,000
50,000
150,000
0.36
%
150,000
41,169
91,160
132,329
0.32
%
132,329
30,000
15,000
45,000
0.11
%
45,000
50,000
25,000
75,000
0.18
%
75,000
511,169
446,160
957,329
2.28
%
957,329
50,000
25,000
75,000
0.18
%
75,000
25,000
12,500
37,500
0.09
%
37,500
50,000
25,000
75,000
0.18
%
75,000
1,500,000
750,000
2,250,000
5.36
%
2,250,000
100,000
50,000
150,000
0.36
%
150,000
25,000
12,500
37,500
0.09
%
37,500
100,000
50,000
150,000
0.36
%
150,000
750,000
375,000
1,125,000
2.68
%
1,125,000
100,000
50,000
150,000
0.36
%
150,000
25,152
12,837
37,989
0.09
%
37,989
30,000
15,000
45,000
0.11
%
45,000
50,000
25,000
75,000
0.18
%
75,000
5,000
2,500
7,500
0.02
%
7,500
300,000
150,000
450,000
1.07
%
450,000
50,000
25,000
75,000
0.18
%
75,000
10,884
24,100
34,984
0.08
%
34,984
30,000
15,000
45,000
0.11
%
45,000
913,107
1,164,738
2,077,845
4.95
%
2,077,845
100,000
50,000
150,000
0.36
%
150,000
50,000
25,000
75,000
0.18
%
75,000
8,000
4,000
12,000
0.03
%
12,000
100,000
50,000
150,000
0.36
%
150,000
10,000
5,000
15,000
0.04
%
15,000
456,628
228,314
684,942
1.63
%
684,942
418,590
209,295
627,885
1.50
%
627,885
624,782
312,391
937,173
2.23
%
937,173
30,000
15,000
45,000
0.11
%
45,000
130,000
65,000
195,000
0.46
%
195,000
100,000
50,000
150,000
0.36
%
150,000
0
116,435
116,435
0.28
%
116,435
1,200,000
600,000
1,800,000
4.29
%
1,800,000
100,000
50,000
150,000
0.36
%
150,000
500,000
250,000
750,000
1.79
%
750,000
10,296,885
6,312,803
16,609,688
39.58
%
16,609,688
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(1)
The Total and Percentage of Total columns include shares issuable on exercise of
the Warrants. For purposes of this Table, all warrants are deemed exercised.
(2)
The Ownership After Offering column assumes that all selling shareholders sell 100%
of their ownership in this offering.
ordinary brokerage transactions and transactions in which the broker-dealer solicits
purchasers;
block trades in which the broker-dealer will attempt to sell the shares as agent but may
position and resell a portion of the block as principal to facilitate the transaction;
purchases by a broker-dealer as principal and resale by the broker-dealer for its account;
an exchange distribution in accordance with the rules of the applicable exchange;
privately negotiated transactions;
short sales;
broker-dealers may agree with the selling shareholders to
sell a specified number of such shares at a stipulated price per share;
a combination of any such methods of sale; and
any other method permitted pursuant to applicable law.
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Warrants to purchase up to 6,031,943 shares of our common stock, exercisable at $1.25
per share (subject to certain adjustments), with a five year term expiring on November 30,
2012. This warrant includes a full ratchet anti-dilution provision. See Adjustments and
Other Terms in the Warrants below.
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Warrants to purchase up to 280,860 shares of our common stock, exercisable at $1.25 per
share (subject to certain adjustments), with a five year term expiring on December 27,
2012. This warrant includes a full ratchet anti-dilution provision. See Adjustments and
Other Terms in the Warrants below.
Warrant to purchase up to 200,000 shares of our common stock, exercisable at $3.00 per
share (subject to adjustment to reflect stock dividends, stock splits, combinations or
exchanges of shares, or other capital changes), with a two year term expiring on March 31,
2009. This warrant includes a full ratchet anti-dilution provision for issuances of our
securities at a per share issue price below $3.00.
Warrant to purchase up to 250,000 shares of our common stock, exercisable at $1.50 per
share, with a five year term expiring on August 14, 2012. This warrant includes certain
adjustments and other specific terms. See Adjustments and other Terms in the Warrants
below.
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F-2
F -3
F -4
F -5
F-6 through F-14
F-15
F-16
F-17
F -18
F-19
F-20
F-21 through F-38
F-39
F-40
F-41
F -42
F -43
F- 44
F-45 through F-53
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Balance Sheet (Unaudited)
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Statements of Operations (Unaudited)
Thirteen Weeks Ended
Thirty-nine Weeks Ended
September 28, 2007
September 29, 2006
September 28, 2007
September 29, 2006
$
26,242,962
$
27,747,156
$
74,158,370
$
45,431,317
535,745
136,832
15,667
262,684
30,343
26,379,794
27,762,823
74,421,054
45,997,405
18,473,276
19,624,124
53,661,722
32,719,116
7,906,518
8,138,699
20,759,332
13,278,289
3,887,965
3,348,914
13,102,565
7,143,361
42,184
219,247
428,890
447,843
383,756
143,998
1,324,841
563,520
214,600
111,848
622,009
215,880
638,242
547,335
1,868,944
1,032,674
480,361
98,398
1,886,071
348,796
305,569
194,900
909,690
353,950
178,377
198,472
571,212
293,651
159,106
93,142
528,120
124,504
636,319
2,209,973
2,364,125
3,341,848
6,926,479
7,166,227
23,606,467
13,866,027
980,039
972,472
(2,847,135
)
(587,738
)
(535,697
)
(286,526
)
(1,108,957
)
(365,994
)
9,098
44,430
(535,697
)
(277,428
)
(1,108,957
)
(321,564
)
$
444,342
$
695,044
$
(3,956,092
)
$
(909,302
)
$
0.02
$
0.03
$
(0.16
)
$
(0.05
)
24,612,054
23,048,555
24,019,256
16,541,304
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Statements of Cash Flows (Unaudited)
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$
247,500
252,500
912,000
$
1,412,000
$
0
25,000
125,000
1,262,000
$
1,412,000
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$
360,654
94,091
60,306
27,659
2,714
814
31,909
$
578,147
(1)
Mr. Welstad is our CEO and a director. The amount due Mr. Welstad includes
balances owing for new store surcharge fees, accrued salary owed from 2006, other assumed
liabilities in connection with equipment purchases and other expenses related to our
acquisition of temporary staffing stores, the Anytime Labor acquisitions, and additional
advances for working capital.
(2)
Mr. Enget, Mr. Gilbert, Mr. Hancock, Mr. Junck, and Mr. Todd Welstad are directors
and officers of the Company. The amounts due consist of liabilities incurred in connection
with the purchase of temporary staffing stores owned or controlled by them in 2006.
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(3)
Mr. Wallace is a former franchisee and is currently employed as a manager with our
company.
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$
328,000
1,166,000
918,000
543,000
155,000
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10,000 shares were sold in the first quarter at $3.00 per share.
466,666 were sold in the second quarter at $1.50 per share.
200,000 shares were issued as partial consideration for the acquisition of temporary
staffing store assets from Anytime Labor, Inc. Management estimated the value of the
shares issued in the Anytime Labor asset acquisition at $4.56 per share as provided in the
acquisition agreement (See Note 4).
We issued 98,951 shares of common stock for prepaid sales force training services.
Management estimated the value of these shares at $3.96 per share in accordance with the
consulting services agreement.
We issued 66,000 shares to terminated employees as severance pay. Management estimated
the value of the severance pay shares on the dates of issuance and recorded an aggregate of
$130,640 as compensation expense in the period.
We issued 17,555 shares as payment of interest relating to the lease agreement on our
Post Falls corporate headquarters building. (See Notes 5 and 10).
We issued 385,431 shares on conversion of $578,147 of notes payable to affiliates. (See
Note 7).
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Report of Independent Registered
Public Accounting Firm
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Balance Sheets
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Statements of Operations
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Statements of Stockholders Equity
Additional
Retained
Preferred Stock
Common Stock
Paid-in
Earnings
Shares
Par Value
Shares
Par Value
Capital
(Deficit)
Total
$
5,852,333
$
5,852
$
397,689
$
(137,663
)
$
265,878
2,809,120
2,809
(2,809
)
1,404,560
1,405
1,403,155
1,404,560
1,527,461
1,527,461
354,758
354,758
10,066,013
10,066
3,325,496
217,095
3,552,657
12,897,463
12,897
32,230,760
32,243,657
4,700
5
469,995
470,000
(4,700
)
(5
)
156,667
157
(152
)
29,718
30
119,970
120,000
342,001
342
1,025,658
1,026,000
(2,419,148
)
(2,419,148
)
$
23,491,862
$
23,492
$
37,171,727
$
(2,202,053
)
$
34,993,166
Table of Contents
Statements of Cash Flows
Table of Contents
Table of Contents
As
Originally
As
Filed
Restated
Change
$
2,601,286
$
5,269,858
$
2,668,572
$
$
1,125,000
$
1,125,000
$
2,009,085
$
3,552,657
$
1,543,572
$
372,211
$
2,190,259
$
1,818,048
$
572,333
$
1,835,501
$
1,263,168
$
(200,122
)
$
354,758
$
554,880
$
(0.05
)
$
0.04
$
0.09
Table of Contents
Table of Contents
Table of Contents
Table of Contents
$
7,233,185
(672,797
)
149,000
147,644
230,870
75,670
800,000
29,675,557
37,639,129
(4,760,855
)
(105,101
)
(529,516
)
(5,395,472
)
$
32,243,657
Table of Contents
2006
2005
$
97,351,310
$
83,667,069
$
(4,015,664
)
$
(2,669,593
)
$
(0.17
)
$
(0.12
)
$
(0.17
)
$
(0.12
)
$
47,529
6,771
147,400
1,543,572
1,745,272
(69,447
)
(67,647
)
(203,620
)
(340,714
)
$
1,404,560
2005
2004
$
2,298,268
$
1,174,865
$
147,500
$
(123,425
)
$
0.02
$
(0.02
)
$
0.02
Table of Contents
Table of Contents
2006
2005
$
1,274,000
$
1,125,000
750,364
261,461
271,106
864,327
(296,226
)
(94,583
)
2,853,926
1,301,523
714,913
400,000
(178,143
)
(112,000
)
536,770
288,000
$
3,390,696
$
1,589,253
Table of Contents
2006
$
800,000
(69,000
)
$
731,000
Table of Contents
$
719,407
90,306
114,091
2,714
349,535
$
1,276,053
(1)
Mr. Welstad is our CEO and a director, the amount due him includes: $175,000 in
new store surcharge fees (See Note 4), $70,000 of which was recognized in 2006; $90,000 of
accrued salary due during 2006, $351,525 of prior years amounts due, and $102,882 of other
assumed liabilities in connection with equipment purchases and other expenses related to our
acquisition of temporary staffing stores.
(2)
Mr. Gilbert is a director and an officer, the amount due him consists of
liabilities incurred in connection with the purchase of temporary staffing stores owned or
controlled by Mr. Gilbert in 2006.
(3)
Mr. Enget is a director and an officer, the amount due him consists of liabilities
incurred in connection with the purchase of temporary staffing stores owned or controlled by
Mr. Enget in 2006.
(4)
Mr. Junck is a director and the Companys chief counsel, the amount due him
consists of liabilities incurred in connection with the purchase of temporary staffing
stores owned or controlled by Mr. Junck in 2006.
(5)
These beneficial owners include the members of the various LLCs or the
shareholders of the incorporated entities. Many are current employees of the Company and
are not officers or directors, with the exception of the persons named in this paragraph.
Amounts due consist of liabilities incurred in connection with the purchase of temporary
staffing stores.
Table of Contents
Table of Contents
$
8,445
8,966
9,519
10,106
10,729
55,312
$
103,077
Table of Contents
Table of Contents
Table of Contents
The following schedule reflects the combined future minimum payments under outstanding leases as of
December 29, 2006.
$
1,898,314
1,616,789
1,052,410
577,442
232,385
Table of Contents
Franchise
Temporary Staffing
Business
Store Operations
Combined
$
535,745
$
70,735,881
$
71,271,626
51,054,838
51,054,838
535,745
19,681,043
20,216,788
205,032
21,598,766
21,803,798
336,516
336,516
330,713
(2,254,239
)
(1,923,526
)
(495,622
)
(495,622
)
$
330,713
$
(2,749,861
)
$
(2,419,148
)
$
11,896,530
$
11,896,530
2,265,696
2,265,696
2,052,710
2,052,710
31,219,129
31,219,129
731,000
731,000
Table of Contents
2006
2005
$
583,513
$
3,650
$
$
1,527,461
$
$
(600,000
)
$
$
600,000
$
$
525,000
$
470,000
$
$
6,560,388
$
41,529
603,184
154,171
(4,760,855
)
(137,094
)
(105,101
)
(203,620
)
(529,516
)
30,475,557
1,543,572
$
32,243,657
$
1,404,558
Table of Contents
Report of Independent Registered
Public Accounting Firm
Table of Contents
Table of Contents
Table of Contents
Statements of Operations
As restated
Year Ended December 31,
2005
2004
27,928
66,819
(31,040
)
28,491
1,721,453
921,223
412,387
90,033
2,190,259
1,047,035
415,787
301,908
3
160,416
4,883
85,548
36,905
159,831
94,653
13,750
78,943
37,588
83,227
195,313
118,131
83,762
72,321
493,946
117,308
2,221
6,201
58,104
24,110
284,765
90,575
1,835,501
1,184,698
354,758
(137,663
)
$
354,758
$
(137,663
)
$
0.04
$
(0.01
)
9,563,835
9,363,733
Table of Contents
Statements of Stockholders Equity, restated
Additional
Members
Common Stock
Paid-in
Retained Earnings
Equity
Shares
Par Value
Capital
(Deficit)
Total
$
124,541
$
$
$
$
124,541
279,000
279,000
(137,663
)
(137,663
)
(403,541
)
5,852,333
5,852
397,689
0
5,852,333
5,852
397,689
(137,663
)
265,878
2,809,120
2,809
(2,809
)
1,404,560
1,405
1,403,155
1,404,560
1,527,461
1,527,461
354,758
354,758
$
10,066,013
$
10,066
$
3,325,496
$
217,095
$
3,552,657
Table of Contents
Statements of Cash Flows
As restated
Year Ended December 31,
2005
2004
$
354,758
$
(137,663
)
53,917
24,110
27,000
4,187
(279,683
)
(2,044
)
438,605
115,433
47,394
31,040
(45,714
)
26,278
(169,530
)
83,727
(11,771
)
105,000
181,176
266,773
535,934
129,110
(609,869
)
(86,064
)
(99,000
)
335,009
200,835
(74,025
)
(185,064
)
(133,333
)
(196,190
)
279,000
(133,333
)
82,810
328,576
26,856
41,268
14,412
$
369,844
$
41,268
$
3,650
$
1,527,461
$
1,404,560
$
(600,000
)
$
600,000
$
525,000
Table of Contents
Table of Contents
As
Originally
As
Filed
Restated
Change
$
2,601,286
$
5,269,858
$
2,668,572
$
$
1,125,000
$
1,125,000
$
2,009,085
$
3,552,657
$
1,543,572
$
372,211
$
2,190,259
$
1,818,048
$
572,333
$
1,835,501
$
1,263,168
$
(200,122
)
$
354,758
$
554,880
$
(0.05
)
$
0.04
$
0.09
4,445,208
9,563,835
As
Originally
As
Filed
Restated
Change
$
1,653,276
$
376,442
$
(1,276,834
)
$
110,564
$
110,564
$
1,653,276
$
265,878
$
(1,387,398
)
$
415,085
$
1,047,035
631,950
291,218
1,184,698
893,480
$
123,867
$
(137,663
)
$
(261,530
)
$
0.04
$
(0.01
)
$
(0.05
)
3,515,715
9,363,733
Table of Contents
$
47,529
6,771
147,400
1,543,572
$
1,745,272
$
(69,447
)
(67,647
)
(203,620
)
$
(340,714
)
$
1,404,560
For years ended December 31,
2005
2004
$
2,298,268
$
1,174,865
$
147,500
$
(123,425
)
$
0.02
$
(0.02
)
$
0.02
Table of Contents
Table of Contents
Table of Contents
Table of Contents
2005
2004
$
19,591
$
3,000
1,376,515
152,356
(94,853
)
(31,210
)
1,301,253
129,147
400,000
(112,000
)
288,000
$
1,589,253
$
129,147
Table of Contents
Table of Contents
Table of Contents
Table of Contents
Employee
Number of Shares Issued
Debt Converted
240,436
$360,654
62,728
94,091
40,205
60,306
18,439
27,659
1,810
2,714
543
814
21,270
31,909
Exhibit No.
Description
Articles of Incorporation (Previously filed as Exhibit 3.1 to Form SB-2 filed on May 7, 2001,
and incorporated herein by reference.)
Amendment to the Articles of Incorporation (Previously filed as Exhibit 3.1 to Form 8-K filed on
November 16, 2005 and incorporated herein by reference.)
Table of Contents
Exhibit No.
Description
Amendment to the Articles of Incorporation (Previously filed as Exhibit 3.3 to Form 10-KSB
filed on April 2, 2007 and incorporated herein by reference.)
Bylaws (Previously filed as
Exhibit 3(b) to Form SB-2 filed on May 7, 2001 and incorporated
herein by reference.)
Amendment to Bylaws (Previously
filed as Exhibit 3.2 to Form 8-K dated November 16, 2005 and
incorporated herein by reference.)
Securities Purchase and Registration Rights Agreement dated November 30, 2007 by and among
Command Center, Inc. and the Investors named therein. (Previously filed as Exhibit 4.1 to
Form 8-K filed on December 5, 2007 and incorporated herein by reference).
Exhibit A to Securities Purchase and Registration Rights Agreement dated November 30,
2007 and December 27, 2007 (combined) by and among Command Center, Inc. and the Investors
named therein. Exhibit A reflects all investors that purchased in the Offering and the
aggregate proceeds and Common Shares and Warrants issued (previously filed as Exhibit
4.1/A to Amendment No. 1 Form 8-K/A filed on January 14, 2008 and incorporated herein by
reference).
Form of Warrant (Previously filed
as Exhibit 4.2 to Form 8-K filed on December 5,
2007 and incorporated herein by reference.)
Common Stock Purchase Warrant for 250,000 shares of common stock exercisable at $1.50 per
share (previously filed as Exhibit 10.2 to form 10-QSB filed in November 13, 2007 and
incorporated herein by reference).
Form of Common Stock Certificate filed herewith
Opinion of Rogers & Hool, LLP to be filed by amendment
Material Contracts
Acquisition Agreement: Asset Purchase Agreement dated as of November 9,
2005 by and among Command Center, Inc. (formerly Temporary Financial
Services, Inc.), Command Staffing LLC, Harborview Software, Inc., and the
Operations Entities as defined therein. (Previously filed as Exhibit 10.1 to
Form 8-K filed on November 16, 2005 and incorporated herein by reference.)
Sale and Leaseback Agreement dated as of December 29, 2005 by and among
Command Center, Inc. and John R. Coghlan. (Previously filed as Exhibit 10.1
to Form 8-K filed on January 4, 2006 and incorporated herein by reference.)
Employment Agreement with Glenn Welstad (Previously filed as Exhibit 10.3 to
Form 10-KSB filed on April 2, 2007 and incorporated herein by
reference).
Employment Agreement with Tom Gilbert (Previously filed as Exhibit 10.3 to
Form 10-KSB filed on April 2, 2007 and incorporated
herein by reference).
Employment Agreement with Todd Welstad (Previously filed as Exhibit 10.3 to
Form 10-KSB filed on April 2, 2007 and incorporated
herein by reference).
Acquisition Agreement: Asset Purchase Agreement dated February 19, 2007 by
and among Command Center, Inc. (formerly Temporary Financial Services, Inc.)
and Anytime Labor, Inc. (Previously filed as Exhibit 10.1 to Form 10-QSB filed
on May 14, 2007 and incorporated herein by reference.)
Table of Contents
Exhibit No.
Description
Loan and Security Agreement dated April 7, 2006 by and between Command
Center, Inc. and Capital Tempfunds, a division of Capital Factors, LLC
(Capital) filed herewith
First Amendment to Loan and Security Agreement dated July 24, 2006 by and
between Command Center, Inc. and Capital filed herewith
Second Amendment to Loan and Security Agreement dated August 22, 2006 by and
between Command Center, Inc. and Capital filed herewith
Third Amendment to Loan and Security Agreement dated November 29, 2006 by
and between Command Center, Inc. and Capital filed herewith
Fourth Amendment to Loan and Security Agreement dated April 2, 2007 by and
between Command Center, Inc. and Capital filed herewith
Fifth Amendment to Loan and Security Agreement dated July 18, 2007 by and
between Command Center, Inc. and Capital filed herewith
Sixth Amendment to Loan and Security Agreement dated November 13, 2007 by
and between Command Center, Inc. and Capital filed herewith
Summary of Principal Terms Loan Transaction with Warrants by Command Center,
Inc. in favor of Sonoran Pacific Resources, LLP dated March 30,
2007. filed herewith
Securities Purchase Agreement, dated August 14, 2007, by and between Command
Center, Inc. and MDB Capital Group, LLC filed herewith
MDB Capital Group Engagement Letter, dated June 22, 2007, by and between
Command Center, Inc. and MDB Capital Group, LLC filed herewith
Indemnification and Pledge Agreement dated November 30, 2007 between Glenn
Welstad and Command Center, Inc. filed herewith
Unanimous Written Consent of the Board of Directors of Command Center, Inc. dated July
25, 2007 approving Cancellation and Exchange Agreement and Share Exchange Agreement to
cancel New Store Surcharge Fee filed herewith
Consent of DeCoria, Maichel and Teague, P.S. filed herewith
Consent of Rogers & Hool, LLP (included in Exhibit 5.1) to be filed by amendment
Power of Attorney included on signature page
*
To be filed by amendment.
Table of Contents
Table of Contents
Command Center, Inc.
By:
/s/ Glenn Welstad
Glenn Welstad, Chief Executive Officer
/s/ Glenn Welstad
Chief Executive Officer, Chairman and Director
/s/ Brad E. Herr
Principal Financial Officer and Director
/s/ Thomas Gilbert
Director
/s/ Todd Welstad
Director
/s/ Ralph E. Peterson
Director
Table of Contents
Exhibit No.
Description
Articles of Incorporation (Previously filed as Exhibit 3.1 to Form SB-2 filed on May 7, 2001,
and incorporated herein by reference.)
Amendment to the Articles of Incorporation (Previously filed as Exhibit 3.1 to Form 8-K filed on
November 16, 2005 and incorporated herein by reference.)
Amendment to the Articles of Incorporation (Previously filed as Exhibit 3.3 to Form 10-KSB
filed on April 2, 2007 and incorporated herein by reference.)
Bylaws (Previously filed as
Exhibit 3(b) to Form SB-2 filed on May 7, 2001 and incorporated
herein by reference.)
Amendment to Bylaws (Previously
filed as Exhibit 3.2 to Form 8-K dated November 16, 2005 and
incorporated herein by reference.)
Securities Purchase and Registration Rights Agreement dated November 30, 2007 by and among
Command Center, Inc. and the Investors named therein. (Previously filed as Exhibit 4.1 to
Form 8-K filed on December 5, 2007 and incorporated herein by reference).
Exhibit A to Securities Purchase and Registration Rights Agreement dated November 30,
2007 and December 27, 2007 (combined) by and among Command Center, Inc. and the Investors
named therein. Exhibit A reflects all investors that purchased in the Offering and the
aggregate proceeds and Common Shares and Warrants issued (previously filed as Exhibit
4.1/A to Amendment No. 1 Form 8-K/A filed on January 14, 2008 and incorporated herein by
reference).
Form of Warrant (Previously filed
as Exhibit 4.2 to Form 8-K filed on December 5,
2007 and incorporated herein by reference.)
Common Stock Purchase Warrant for 250,000 shares of common stock exercisable at $1.50 per
share (previously filed as Exhibit 10.2 to form 10-QSB filed in November 13, 2007 and
incorporated herein by reference).
Form of Common Stock Certificate filed herewith
Opinion of Rogers & Hool, LLP to be filed by amendment
Material Contracts
Acquisition Agreement: Asset Purchase Agreement dated as of November 9,
2005 by and among Command Center, Inc. (formerly Temporary Financial
Services, Inc.), Command Staffing LLC, Harborview Software, Inc., and the
Operations Entities as defined therein. (Previously filed as Exhibit 10.1 to
Form 8-K filed on November 16, 2005 and incorporated herein by reference.)
Sale and Leaseback Agreement dated as of December 29, 2005 by and among
Command Center, Inc. and John R. Coghlan. (Previously filed as Exhibit 10.1
to Form 8-K filed on January 4, 2006 and incorporated herein by reference.)
Employment Agreement with Glenn Welstad (Previously filed as Exhibit 10.3 to
Form 10-KSB filed on April 2, 2007 and incorporated herein by
reference).
Employment Agreement with Tom Gilbert (Previously filed as Exhibit 10.3 to
Form 10-KSB filed on April 2, 2007 and incorporated
herein by reference).
Employment Agreement with Todd Welstad (Previously filed as Exhibit 10.3 to
Form 10-KSB filed on April 2, 2007 and incorporated
herein by reference).
Acquisition Agreement: Asset Purchase Agreement dated February 19, 2007 by
and among Command Center, Inc. (formerly Temporary Financial Services, Inc.)
and Anytime Labor, Inc. (Previously filed as Exhibit 10.1 to Form 10-QSB filed
on May 14, 2007 and incorporated herein by reference.)
Table of Contents
Exhibit No.
Description
Loan and Security Agreement dated April 7, 2006 by and between Command
Center, Inc. and Capital Tempfunds, a division of Capital Factors, LLC
(Capital) filed herewith
First Amendment to Loan and Security Agreement dated July 24, 2006 by and
between Command Center, Inc. and Capital filed herewith
Second Amendment to Loan and Security Agreement dated August 22, 2006 by and
between Command Center, Inc. and Capital filed herewith
Third Amendment to Loan and Security Agreement dated November 29, 2006 by
and between Command Center, Inc. and Capital filed herewith
Fourth Amendment to Loan and Security Agreement dated April 2, 2007 by and
between Command Center, Inc. and Capital filed herewith
Fifth Amendment to Loan and Security Agreement dated July 18, 2007 by and
between Command Center, Inc. and Capital filed herewith
Sixth Amendment to Loan and Security Agreement dated November 13, 2007 by
and between Command Center, Inc. and Capital filed herewith
Summary of Principal Terms Loan Transaction with Warrants by Command Center,
Inc. in favor of Sonoran Pacific Resources, LLP dated March 30,
2007. filed herewith
Securities Purchase Agreement, dated August 14, 2007, by and between Command
Center, Inc. and MDB Capital Group, LLC filed herewith
MDB Capital Group Engagement Letter, dated June 22, 2007, by and between
Command Center, Inc. and MDB Capital Group, LLC filed herewith
Indemnification and Pledge Agreement dated November 30, 2007 between Glenn
Welstad and Command Center, Inc. filed herewith
Unanimous Written Consent of the Board of Directors of Command Center, Inc. dated July
25, 2007 approving Cancellation and Exchange Agreement and Share Exchange Agreement to
cancel New Store Surcharge Fee filed herewith
Consent of DeCoria, Maichel and Teague, P.S. filed herewith
Consent of Rogers & Hool, LLP (included in Exhibit 5.1) to be filed by amendment
Power of Attorney included on signature page
*
To be filed by amendment.
NUMBER | Common Shares | |
(___) | ( ) |
|
||||||
|
|
Executed under seal this ___ day of March 2006 | ||||||
COMMAND CENTER INC, a Washington corporation | ||||||
|
||||||
|
By | /s/ Glenn Welstad | ||||
Signature
|
||||||
Glenn Welstad, President
|
||||||
Name and Title
|
|
/s/ ELAINE L. WILSON | |||
(NOTARY SEAL)
|
|
|||
|
ELAINE L. WILSON | |||
|
(Notary Name Printed) | |||
|
NOTARY PUBLIC Commission No. 9/9/06 |
Accepted by Capital this 7 day of apr. 2006 | ||||||
at Charlotte, North Carolina (hereinafter, the Acceptance Date.) | ||||||
|
||||||
CAPITAL TEMPFUNDS, a division of Capital Factors LLC | ||||||
|
||||||
|
By | /s/ Michael J. Sullivan | ||||
Signature: Michael J. Sullivan | ||||||
|
(Corporate Seal) |
(NOTARY SEAL)
|
/s/ Nancy M. Watson
|
|||
|
NANCY M. WATSON | |||
|
(Notary Name Printed) | |||
|
NOTARY PUBLIC Commission No. |
1. | The Acceptance Date referred to in the opening paragraph of this Agreement means the date signed and accepted by a duly authorized officer of Capital. | |
2. | Borrower referred to in the opening paragraph means COMMAND CENTER, INC., a Washington corporation with its principal place of business and chief executive office at 3773 W. 5 th Avenue, Post Falls, ID 83854 hereinafter referred to as Borrower . Borrower is the assignor of the Accounts and debtor under the Code. Borrower may also sometimes be referred to as Client. | |
3. | Term Days as referred to in Section 3 (iii) thirty (30) days. | |
4. | Maximum Days as referred to in Sections 3 (iv) and 34 means; sixty (60) days from date of invoice provided the invoice date is not greater than ten (10) days from the last date of service. | |
5. | Maximum Concentration Amount as referred to in Section 3 (f) means: $100,000 | |
6. | Cross Aging Percentage as referred to in Section 3 (h) means: fifty percent (50%). | |
7. | Past Due Days as referred to in Section 3 (h) means: 60 days. | |
8. | Permanent Placement Accounts which mean any Accounts which arise from the permanent placement of an employee who will be hired by a Customer and will be an addition to the ongoing payroll of the Customer (hereinafter PPA). Notwithstanding the foregoing, PPAs may be considered Acceptable Accounts provided they are otherwise in compliance with the provisions of Sections 2 and 3 of the Agreement and the employee, which is the subject of the Account, has reported to the Customers place of employment (which may be verified by Capital in its sole discretion), and the total of such Accounts are less than ten percent (10%) of the total amount of the Acceptable Accounts. Capital shall also maintain a dilution reserve on Acceptable Accounts which are the result of PPAs of ten percent (10%) of the invoice amount plus actual Dilution. | |
9. | Organizational State as referred to in Section 9 means: Washington | |
10. | Borrowers Trade names as referenced in Section 11 are as follows: COMMAND CENTER | |
11. | Borrowers Federal Identification Number as referenced in Section 12 is, 91-2079472 | |
12. | Borrowers Organizational Number as referenced in Section 12 is; 602071264 | |
13. | Other Security Interest as referred to in Section 23 means; None | |
NOTE: | As to the interests listed above, the listing thereof in this Loan and Security Agreement shall not, in any manner whatsoever, be deemed to be an acknowledgement by Capital as to the perfection, priority, validity or enforceability thereof. | |
14. | Other Insurance as referred to in Section 24 means; General Liability with Capital named as additional insured. | |
15. | Periodic Period as described in Section 27 means; 45 days after each calendar quarter. | |
16. | Annual Period as described in Section 27 means; one hundred twenty (120) days after the end of each Borrowers fiscal years. | |
17. | Financial Statement means: (i) at the end of each calendar quarter internally prepared financial statements certified by Borrowers management; (ii) at the end of each fiscal year audited financial statements prepared by a Certified Public Accountant acceptable to TEMPFUNDS. | |
18. | Excluded Collateral as referred to in Section 30 means; None | |
19. | Costs and Expenses as referred to in Section 30 means; Borrower is liable for, and Capital may charge Borrowers account with, all customary and usual out of pocket wire charges and overnight delivery expenses, and all reasonable costs and expenses of filling financing statements (including any filing or recording taxes), making lien searches, and any attorneys fees and expenses that may be incurred by Capital in perfecting, protecting, preserving, modifying, or enforcing its security interest and rights hereunder, | |
20. | Advance Rate as referred to in Section 34 means; eighty-five percent (85%) of the face amount of each Acceptable Account approved by Capital and assigned by Borrower on a Schedule of Accounts. | |
21. | Maximum Credit Facility as referred to in Section 34 means; Seven Million ($7,000,000.00) dollars. | |
22. | Dilution Reserve referred to in Section 34 means the Dilution Percentage less the Base Dilution. The Dilution Percentage is defined as: (i) uncollected sales (as determined by Capital in its sole discretion, exercised in a commercially reasonable manner, and including all sales subject to a Customer Dispute) excluding Accounts that remain unpaid but are collectable, divided by (ii) total sales and (iii) stated as a percentage. Base Dilution means: five percent (5%). | |
23. | Loan Account as referred to in Section 34 means that account established on Capitals books, upon which Capital shall enter all advances as debits to the Loan Account and shall also record in the Loan Account all payments made by Borrower on any Obligations and all proceeds of Collateral which are finally paid to Capital, and may record therein, In accordance with customary accounting practice, other debits and credits, including interest and all charges and expenses properly chargeable to Borrower. | |
24. | Lock box address as referenced in Section 40 shall be one of the following: |
OPERATIONS CENTER
|
OPERATIONS CENTER | OPERATIONS CENTER | ||
P.O. BOX 951753
|
PO BOX 932665 | PO BOX 79081 | ||
Dallas, TX 75395-1753
|
Atlanta, GA 31193-2685 | City of Industry, CA 91716-9081 |
25. | Collection Day Period as referenced in Section 40 means; 3 days. |
26. | Wire Account referred to in Section 40 shall mean: |
27. | Field Examination Expenses as referred to in Section 41 means: Out of pocket expenses including, but not limited to, transportation, hotel, parking, and meals plus $800 per Capitals representative per day for each day of the field examination including preparation of the field examination report. | |
28. |
The broker, if any, referred to in Section 49 is: None
|
|
29. | Term as referred to in Section 52 means: Twenty-four (24) months. | |
30. |
Wire Fee as referred to in Section 65 means
$20.00 per wire, ACH shall be no charge.
|
|
31. | In accordance with Section 65, please send all our transfers via: (circle one) |
Instructions are as follows:
|
Wire / ACH | |||
Bank Name
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Bank Address
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Bank Phone Number
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Bank Contact
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Transit Number (ABA#)
|
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Company Name (on Bank Account)
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Address
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Account Number
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Type of Account (circle one)
|
Operating Other |
32. | Borrower to maintain a Working Capital ratio of not less than 1:1. Working Capital Ratio for the purposes of this Agreement shall mean the ratio of current assets to current liabilities, as determined in accordance with generally accepted accounting principals, consistently applied (GAAP). |
|
Yours truly | ||
|
/s/ C.E. Olsen | ||
C.E. Olsen, CFO
Name/title |
Chief Executive Officer and President
|
Glenn Welstad | /s/ Glenn Welstad | ||
|
||||
|
(Print Name) | (Signature) | ||
|
||||
Chief Financial Officer and Treasurer
|
C. Eugene Olsen | /a/ C. Eugene Olsen | ||
|
||||
|
(Print Name) | (Signature) | ||
|
||||
Chief Operating Officer
|
Tom Gilbert | /s/ Tom Gilbert | ||
|
||||
|
(Print Name) | (Signature) | ||
|
||||
Secretary
|
Brad E. Herr | |||
|
||||
|
(Print Name) | (Signature) |
FURTHER AFFIANT SAYETH NAUGHT.
|
||||
/s/ Michael J. Sullivan | ||||
Michael J. Sullivan | Affiant | |||
Exec. Vice Pres. | Title | |||
/s/ Nancy M. Watson | ||||
[NOTARIAL SEAL]
|
||||
Notary Public, State of North Carolina
Print Name: NANCY M. WATSON My Commission Expires: June 23, 2006 |
||||
21. | Maximum Credit Facility as referred to in Section 34 means: Eight Million ($8,000,000.00) dollars effective as of the date of the Amendment and through April 7, 2007, at which time the Maximum Credit Facility shall reduce to Seven Million ($7,000,000.00). A Temporary Increase Fee in the amount of $10,000 shall be due and payable upon the effective date of this Amendment. |
Executed under seal this
___ day of July 2006
COMMAND CENTER INC., a Washington corporation |
||||
By | /s/ Glenn Welstad | |||
Signature | ||||
Glenn Welstad, President
Name and Title |
||||
(NOTARY SEAL) |
/s/ Joely Lee
Joely Lee NOTARY PUBLIC Commission No. 47648 |
|||
CAPITAL TEMPFUNDS, a division of Capital Business Credit
LLC f/k/a a division of Capital Factors LLC
|
||||
By | /s/ Jerry T. ONeil | |||
Signature: JERRY T. ONeil, V.P. | ||||
2
/s/ Nancy M. Watson | ||||
(Notary Signature) | ||||
(NOTARY SEAL) |
NANCY M. WATSON
NOTARY PUBLIC Commission No. |
|||
3
21. | Maximum Credit Facility as referred to in Section 34 means: Eight Million Five Hundred Thousand ($8,500,000.00) dollars effective as of the date of the Amendment and through September 30, 2006, at which time the Maximum Credit Facility shall reduce to Eight Million ($8,000,000.00) through April 7, 2007. A Increase Fee in the amount of $10,000 shall be due and payable upon the effective date of this Amendment. |
Executed under seal this 25 day of August 2006
COMMAND CENTER, INC ., a Washington corporation |
||||
By | /s/ Glenn Welstad | |||
Signature | ||||
Glenn Welstad, President
Name and Title |
||||
/s/ Judith L. Kabrick | ||||
(Notary Signature) | ||||
(NOTARY SEAL) | Judith L. Kabrick | |||
(Notary Name Printed) | ||||
NOTARY PUBLIC Commission No. 47647 | ||||
CAPITAL TEMPFUNDS, a division of Capital Business Credit LLC
f/k/a a division of Capital Factors LLC
|
||||
By | ||||
Signature: | ||||
2
(Notary Signature) | ||||
(NOTARY SEAL) | ||||
(Notary Name Printed)
NOTARY PUBLIC Commission No. |
||||
3
1
17. Financial Statement means: (i) at the end of each month internally prepared financial statements certified by Borrowers management; (ii) at the end of each fiscal year audited financial statements prepared by a Certified Public Accountant acceptable to TEMPFUNDS. |
2
3
a. | Borrower to maintain a Working Capital ratio of not less than 1:1. Working Capital Ratio for the purposes of this Agreement shall mean the ratio of current assets to current liabilities, as determined in accordance with generally accepted accounting principals, consistently applied (GAAP). | ||
b. | Borrower to at all times maintain a positive Cash Flow. Cash Flow for the purposes of this Agreement shall mean net income plus depreciation and amortization, less distributions, dividends, employee or shareholder loans, unfinanced capital expenditures and principal payments on debt. In the event that Cash Flow is negative, Borrower may cure such default by raising additional paid-in-capital or subordinated debt, or selling additional shares of stock of Borrower, so long as such actions do not create an event of Default hereunder. | ||
c. | Borrower shall maintain a minimum Tangible Net Worth of: (i) $2,000,000.00 of the period from September 30, 2006 through March 31, 2007, and (ii) $3,500,000.00 thereafter measured on a quarterly basis. | ||
d. | Borrower shall maintain a rolling twelve (12) month EBITDA based on the prior twelve (12) months as determined in accordance with GAAP, of no less than 75% of the projected EBITDA pursuant to the projections attached as Exhibit E. EBITDA for the purposes of this Agreement shall mean earning of the Borrower before interest, taxes, depreciation and amortization. |
4
5
WITNESSES |
BORROWER:
COMMAND CENTER, INC., a Washington corporation |
||||
/s/ Brad E. Herr | |||||
By: | /s/ Glenn Welstad | ||||
Glenn Welstad | |||||
/s/ Jim Meyers | Its President | ||||
Duly Authorized | |||||
CAPITAL: | |||||
/s/ Nancy M. Watson | CAPITAL TEMPFUNDS, | ||||
a division of CAPITAL BUSINESS CREDIT LLC, | |||||
a Delaware limited liability company
|
|||||
/s/ Mary E. Rusberg | By: | /s/ Michael J. Sullivan | |||
Print Name: | Michael J. Sullivan | ||||
Title: | Exec. Vice Pres. | ||||
GUARANTOR:
|
|||||
/s/ Brad E. Herr | /s/ Glenn Welstad | ||||
/s/ Jim Meyers | Glenn Welstad | ||||
6
1. | The Affiant is a E.V.P. of CAPITAL TEMPFUNDS, a division of CAPITAL BUSINESS CREDIT LLC, a Delaware limited liability company (TempFunds), and the Affiant is duly authorized to and does make this affidavit in said capacity on behalf of TempFunds, | ||
2. | That on the 29 day of November, 2006, In accepted delivery of that certain Third Amendment to Loan and Security Agreement of even date herewith (the Agreement), which Agreement is between COMMAND CENTER, INC., a Washington corporation, as borrower and CAPITAL TEMPFUNDS, a division of CAPITAL BUSINESS CREDIT LLC, a Delaware limited liability company, as lender | ||
3. | That I executed the Agreement on behalf of TempFunds in the City of Charlotte, State of n.c. |
FURTHER AFFIANT SAYETH NAUGHT
|
||||
/s/ Michael J. Sullivan | ||||
Michael J. Sullivan | ||||
Title: | Exec. Vice Pres. | |||
/s/ Nancy M. Watson | ||||
Notary Public State of N.C. | ||||
Print Name NANCY M. WATSON
My Commission Expires: June 23, 2011 [NOTARY SEAL] |
7
Yours truly,
|
||||
Name/title | ||||
8
Actual | Forecast - 2006 | Total | ||||||||||||||||||
Q 3-31-06 | Q 6-30-06 | 9/30/06 | 12/31/06 | 2006 | ||||||||||||||||
(*) | (**) | |||||||||||||||||||
Revenues
|
$ | 455,000 | $ | 17,674,000 | $ | 26,972,000 | $ | 22,315,000 | $ | 67,416,000 | ||||||||||
No of stores
|
2 | 58 | 72 | 78 | 80 | |||||||||||||||
Cost of sales
|
7,000 | 12,937.000 | 19,690,000 | 16,245,000 | 48,879,000 | |||||||||||||||
Percent of Sales
|
73.2 | % | 73.0 | % | 72.8 | % | 72.5 | % | ||||||||||||
Gross Margin
|
448,000 | 4,737,000 | 7,282.000 | 6,070,000 | 18,537,000 | |||||||||||||||
Percent of Sales
|
26.8 | % | 27.0 | % | 27.2 | % | 27.5 | % | ||||||||||||
Store Staff
|
32,000 | 1,732,000 | 2,427,000 | 2,120,000 | 6,311,000 | |||||||||||||||
Percent of Sales
|
9.8 | % | 9.0 | % | 9.5 | % | 9.4 | % | ||||||||||||
Store Costs
|
54,000 | 1,626,000 | 2,427,000 | 2,187,000 | 6,294,000 | |||||||||||||||
Percent of Sales
|
9.2 | % | 9.0 | % | 9.8 | % | 9.3 | % | ||||||||||||
|
||||||||||||||||||||
Store Contribution
|
362,000 | 1,379,000 | 2,428,000 | 1,763,000 | 5,932,000 | |||||||||||||||
Percent of Sales
|
8 | % | 9 | % | 6 | % | 9 | % | ||||||||||||
Admin Costs
|
||||||||||||||||||||
Salaries
|
412,000 | 1,273,000 | 1,349,000 | 1,227,000 | 4,261,000 | |||||||||||||||
Percent of Sales
|
7.2 | % | 5.0 | % | 5.5 | % | 5.5 | % | ||||||||||||
Operating Expense
|
622,000 | 1,290,000 | 701,000 | 669,000 | 3,282,000 | |||||||||||||||
Percent of Sales
|
7.3 | % | 2.6 | % | 3.0 | % | 3.0 | % | ||||||||||||
|
||||||||||||||||||||
NIBT
|
$ | (672,000 | ) | $ | (1,184,000 | ) | $ | 378,000 | $ | (133,000 | ) | $ | (1,611,000 | ) | ||||||
|
||||||||||||||||||||
Cash Flow Adjustments-
|
||||||||||||||||||||
Add-Depr/Amort
|
25,000 | 25,000 | ||||||||||||||||||
Add-Sale of Stock
|
150,000 | 300,000 | ||||||||||||||||||
Add-Collection
receivable from affiliates
|
225,000 | 100,000 | ||||||||||||||||||
Deduct-Payment on advances
|
(100,000 | ) | (400,000 | ) | ||||||||||||||||
Net Cash Flow Adjustments
|
$ | 300,000 | $ | 25,000 | ||||||||||||||||
(*) | Includes temp labor sales of $15,000, franchise fee income of $413,000 and investment income of $27,000 | |
(**) | Includes legal and other costs of completing the store acquisitions of approx $400,000, included in operating expense |
9
Forecast - 2007 | Total | |||||||||||||||||||
3/31/07 | 6/30/07 | 9/30/07 | 12/31/07 | 2007 | ||||||||||||||||
Revenues
|
$ | 22,394,000 | $ | 33,197,000 | $ | 39,378,000 | $ | 35,808,000 | $ | 130,777,000 | ||||||||||
No of stores
|
80 | 110 | 120 | 120 | 120 | |||||||||||||||
Cost of sales
|
16,191,000 | 23,736,000 | 27,565,000 | 24,708,000 | 92,200,000 | |||||||||||||||
Percent of Sales
|
72.3 | % | 71.5 | % | 70.0 | % | 69.0 | % | 70.5 | % | ||||||||||
Gross Margin
|
6,203,000 | 9,461,000 | 11,813,000 | 11,100,000 | 38,577,000 | |||||||||||||||
Percent of Sales
|
27.7 | % | 28.5 | % | 30.0 | % | 31.0 | % | 29.5 | % | ||||||||||
Store Staff
|
2,262,000 | 3,253,000 | 3,426,000 | 3,079,000 | 12,020,000 | |||||||||||||||
Percent of Sales
|
10.1 | % | 9.8 | % | 8.7 | % | 8.6 | % | 9.2 | % | ||||||||||
Store Costs
|
2,195,000 | 3,021,000 | 3,466,000 | 3,151,000 | 11,832,000 | |||||||||||||||
Percent of Sales
|
9.8 | % | 9.1 | % | 8.8 | % | 8.8 | % | 9.0 | % | ||||||||||
|
||||||||||||||||||||
Store Contribution
|
1,746,000 | 3,187,000 | 4,922,000 | 4,870,000 | 14,725,000 | |||||||||||||||
Percent of Sales
|
7.8 | % | 9.6 | % | 12.5 | % | 13.6 | % | 11.3 | % | ||||||||||
Admin Costs
|
||||||||||||||||||||
Salaries
|
1,120,000 | 1,461,000 | 1,654,000 | 1,647,000 | 5,882,000 | |||||||||||||||
Percent of Sales
|
5.0 | % | 4.4 | % | 4.2 | % | 4.6 | % | 4.5 | % | ||||||||||
Operating Expense
|
672,000 | 996,000 | 1,142,000 | 1,110,000 | 3,920,000 | |||||||||||||||
Percent of Sales
|
3.0 | % | 3.0 | % | 2.8 | % | 3.1 | % | 3.0 | % | ||||||||||
|
||||||||||||||||||||
NIBT
|
$ | (46,000 | ) | $ | 730,000 | $ | 2,126,000 | $ | 2,113,000 | $ | 4,923,000 | |||||||||
|
||||||||||||||||||||
Cash Flow Adjustments-
|
||||||||||||||||||||
Add-Depr/Amort
|
$ | 25,000 | $ | 25,000 | $ | 25,000 | $ | 25,000 | ||||||||||||
Private offering (1)
|
10,000,000 | |||||||||||||||||||
Deduct-New store equip
|
(783,750 | ) | (470,250 | ) | ||||||||||||||||
Deduct-Pmt on Advances
|
(400,000 | ) | ||||||||||||||||||
Net Cash Flow Adj-
|
$ | 8,841,250 | $ | 25,000 | $ | 25,000 | ||||||||||||||
(1) | Private offering to provide funding for new store expansion and potential acquisitions not yet identified | |
These forecasts contain forward-looking assumptions related to our expectations for future events and future financial performance. Forward-looking statements involve risks and uncertainties and future events and circumstances could differ significantly from those anticipated in these forecasts. These forecasts are only predictions and actual events or results could differ significantly from those anticipated in these forecasts. Moreover, we assume no responsibility for the accuracy or completeness of these forecasts and undertake no duty to update the statements to conform to actual results or to changes in our expectations. |
Chief Executive Officer and President
|
Glenn Welstad | /s/ Glenn Welstad | ||
|
||||
|
(Print Name) | (Signature) | ||
|
||||
Chief Financial Officer and Treasurer
|
C. Eugene Olsen | /s/ C. Eugene Olsen | ||
|
||||
|
(Print Name) | (Signature) | ||
|
||||
Chief Operating Officer
|
Tom Gilbert | /s/ Tom Gilbert | ||
|
||||
|
(Print Name) | (Signature) | ||
|
||||
Secretary
|
Brad E. Herr | /s/ Brad E. Herr | ||
|
||||
|
(Print Name) | (Signature) |
/s/ Brad E. Herr | ||||
Brad E. Herr, Secretary | ||||
1
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BORROWER: | ||||||||
|
||||||||
WITNESSES | COMMAND CENTER, INC., a Washington | |||||||
|
corporation | |||||||
|
||||||||
/s/ Brad
E. Herr
|
||||||||
|
||||||||
|
By: |
/s/ Glenn Welstad
|
||||||
|
Glenn Welstad | |||||||
/s/ Todd
Welstad
|
Its President
Duly Authorized |
|||||||
|
||||||||
CAPITAL: | ||||||||
/s/ Mary E. Rusberg | CAPITAL TEMPFUNDS, | |||||||
|
a division of CAPITAL BUSINESS CREDIT LLC, | |||||||
|
a Delaware limited liability company | |||||||
|
||||||||
|
By: |
/s/ JERRY T. ONeil
Title: Vice Pres. |
||||||
|
||||||||
GUARANTOR: | ||||||||
/s/ Brad E. Herr |
/s/ Glenn Welstad
|
|||||||
Glenn Welstad | ||||||||
/s/ Todd
Welstad
|
4
STATE OF North Carlina
|
) | |||||
|
) | SS: | ||||
COUNTY OF Mecklenburg
|
) |
1. | The Affiant is a Vice Pres. of CAPITAL TEMPFUNDS , a division of CAPITAL BUSINESS CREDIT LLC, a Delaware limited liability company (TempFunds), and the Affiant is duly authorized to and does make this affidavit in said capacity on behalf of TempFunds. | |
2. | That on the 2 day of April, 2007, I accepted delivery of that certain Fourth Amendment to Loan and Security Agreement of even date herewith (the Agreement), which Agreement is between COMMAND CENTER, INC., a Washington corporation, as borrower and CAPITAL TEMPFUNDS, a division of CAPITAL BUSINESS CREDIT LLC, a Delaware limited liability company, as lender | |
3. | That I executed the Agreement on behalf of TempFunds in the City of Charlotte, State of n.c. |
FURTHER AFFIANT SAYETH NAUGHT.
|
||||
/s/ Jerry T. ONeil | ||||
Jerry T. ONeil | ||||
Title: | Vice Pres. | |||
/s/ Nancy M. Watson | ||||
Notary Public State of N.C. | ||||
Print Name NANCY M. WATSON
My Commission Expires: 6-23-2011 [NOTARY SEAL] |
||||
5
1
3
|
BORROWER: | |
WITNESSES
|
COMMAND CENTER, INC.,
a Washington
corporation |
|
/s/ Brad
E. Herr
|
By: /s/ Glenn Welstad | |
|
||
|
Glenn Welstad | |
Its President | ||
Duly Authorized | ||
/s/ Mary
Rusberg
|
CAPITAL: | |
|
CAPITAL TEMPFUNDS,
a division of CAPITAL BUSINESS CREDIT LLC, a Delaware limited liability company |
|
|
By: /s/ Jerry T. ONeil | |
|
||
|
Print Name: Jerry T. ONeil
Title: Vice Pres. |
|
|
GUARANTOR: | |
/s/ Brad
E. Herr
|
By: /s/ Glenn Welstad | |
|
||
|
Glenn Welstad | |
STATE OF
COUNTY OF |
}
} } |
SS: |
1. | The Affiant is a V.P. of CAPITAL TEMPFUNDS , a division of CAPITAL BUSINESS CREDIT LLC , a Delaware limited liability company (TempFunds), and the Affiant is duly authorized to and does make this affidavit in said capacity on behalf of TempFunds. | |
2. | That on the 16 day of August, 2007, I accepted delivery of that certain Fifth Amendment to Loan and Security Agreement of even date herewith (the Agreement), which Agreement is between COMMAND CENTER, INC. , a Washington corporation, as borrower and CAPITAL TEMPFUNDS , a division of CAPITAL BUSINESS CREDIT LLC , a Delaware limited liability company, as lender. | |
3. | That I executed the Agreement on behalf of TempFunds in the City of Charlotte , State of N.C. . |
Title: | Vice Pres. |
5
Very truly yours,
CAPITAL TEMPFUNDS Division of Capital Business Credit LLC |
||||
By: | /s/ Beverly Fruan | |||
Vice President | ||||
Read and Agreed to:
COMMAND CENTER, INC. |
|||||
By: | /s/ Brad E. Herr | ||||
Brad E. Herr CFO | |||||
Confirmed
|
|||||
/s/ Glenn Welstad | |||||
Glenn Welstad, Individually | |||||
Maker (Company):
|
Command Center, Inc., a Washington corporation. | |
|
||
Holder:
|
Sonoran Pacific Resources, LLP, an Arizona limited liability partnership. | |
|
||
Promissory Note:
|
Company shall execute and deliver to Holder the Promissory Note in the form attached hereto. | |
|
||
Principal Amount:
|
Two Million Dollars ($2,000,000.00). | |
|
||
Interest Rate:
|
Eighteen percent (18%) per annum. If not paid in full when due, the interest rate shall be two percent (2%) per month. | |
|
||
Origination Fee:
|
Five percent (5%) of the principal amount, to be deducted from the first advance. | |
|
||
Warrants:
|
Command Center shall issue to Holder warrants for 200,000 shares of the companys common stock, $0.001 par value per share (the Warrants). Each Warrant shall be convertible, at the option of the Holder, at any time before April 1, 2009 into one share of the Companys common stock. $0.001 par value per share ( Common Stock ), at an initial conversion price equal to $3.00 per share, subject to adjustment to reflect certain stock dividends, stock splits, combinations or exchanges of shares, recapitalizations, or other changes in the capital structure of the Company (the Conversion Price ). If not previously converted, the Warrants will expire on April 1, 2009. | |
|
||
Antidilution Provisions
|
The Conversion Price of the Warrants shall be adjusted to provide the Holder with a full ratchet anti-dilution protection for any subsequent issuance by the Company of shares of Common Stock (including upon issuance of any new class or series of Preferred Stock or issuance or exchange of any other security convertible into or exchangeable for shares of Common Stock) at a per-share |
1
|
issue price below the Conversion Price. The foregoing provision shall not apply to securities issued or issuable pursuant to (i) the conversion of Series A Preferred Stock to Common Stock, (ii) dividends or distributions on Series A Preferred Stock, (iii) any broker, finder, lender, or placement agent in connection with bank loans, financing transactions, or other capital raising activities of the Company, (iv) certain dividends, stock splits, split-ups, or other distributions on shares of Common Stock as provided in the Companys Articles of Incorporation, as amended, or (v) issuances to employees, directors, agents, and consultants of the Company by authorization of the Companys Board of Directors. | |
|
||
Advances:
|
The amount of $1,000,000 shall be advanced to Company on the business day following the date the Promissory Note is executed and delivered to Holder. The second advance of an additional $1,000,000 shall be made on or before April 30, 2007. From the first advance, Maker may deduct and retain the Origination Fee in the total amount of $100,000. On the second advance, the present outstanding loan from Holder to Company in the present principal amount of $200,000 will become included within this loan, with the result that the net amount of the second advance will be $800,000. | |
|
||
Repayment:
|
The entire principal balance, along with all accrued interest, shall be paid in full on or before July 1, 2007. | |
|
||
Additional Interest:
|
Company previously borrowed $400,000 from Holder of which $200,000 has been repaid. As of April 30, 2007, the accrued interest on these loans at the agreed rate of 22% per annum will be $66,904. Company shall pay this amount to Holder on or before July 1, 2007. | |
|
||
Other Terms:
|
Confidentiality : This Summary of Principal Terms is being delivered by the Company with the understanding and on the condition that neither it nor its substance shall be disclosed publicly or privately except with the written consent of the Company. | |
|
||
|
Governing Law and Jurisdiction : Arizona. |
2
AGREED AND ACCEPTED:
COMMAND CENTER, INC. |
|||||
By: | /s/ Brad E. Herr | ||||
Name: | BRAD E. HERR | ||||
Title: | CFO |
By: | |||||
Name: | |||||
Title: |
3
$2,000,000.00 | March 30, 2007 (the Effective Date ) |
(a) | Declare the entire unpaid principal and all other sums owed hereunder immediately due and payable; | ||
(b) | Assess interest on the unpaid balance after July 1, 2007 at the rate of two percent (2%) per month; and | ||
(c) | Exercise any remedy set forth herein or otherwise available at law or in equity. |
2
If to Maker:
|
Mr. Brad Herr, CFO | |
|
Command Center, Inc. | |
|
3773 W. Fifth Avenue | |
|
Post Falls, ID 83854 | |
|
||
If to Holder:
|
Mr. Jerry Smith | |
|
Sonoran Pacific Resources, LLP | |
|
10446 North 74 th Street, Suite 120 | |
|
Scottsdale, AZ 85258 |
MAKER:
COMMAND CENTER, INC |
||||
/s/ Brad Herr | ||||
Brad Herr, Chief Financial Officer | ||||
Accepted and Agreed:
SONORAN PACIFIC RESOURCES, LLP |
||||
By: | ||||
Jerry Smith | ||||
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COMMAND CENTER, INC. | Address for Notice: | |||||||
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By:
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Command Center, Inc. | |||||||
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Name:
Title: |
3773 W. Fifth Avenue
Post Falls, ID 83854 Attention: Brad Herr, Secretary Phone: 208-773-7450 Fax: 208-773-7467 |
MDB CAPITAL GROUP, LLC | Address for Notice: | |||||||
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By:
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MDB Capital Group, LLC | |||||||
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Name:
Title: |
401 Wilshire Boulevard
Suite 1020 Santa Monica, California 9040 Attn: Anthony DiGiandomenico Phone: 310-526-5015 |
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Fax: 310-526-5020 |
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1. | Engagement of MDB . The Company hereby engages the MDB on an exclusive basis for the term of this Agreement, and the MDB hereby agrees to advise, consult with, and assist the Company in various matters including, but not limited to, |
(a) | reviewing the Companys business, operations, and financial condition, | ||
(b) | reviewing the Companys proposed acquisition and advising on capitalization structures and capital raising, | ||
(c) | acting as placement agent on a best efforts basis for one or more private placements of equity or debt securities of approximately $5 million (each one a Private Placement), as well as a subsequent underwritten offering of approximately $10-15 million. | ||
(d) | providing general corporate advice as requested, | ||
(e) | providing advice on the pending exchange listing. |
During the term of this Agreement, the Company agrees not to use the services of any other investment banker regarding matters similar to those outlined herein. | ||
This Agreement is subject to our completing satisfactory due diligence on the Company, in addition to the successful resolution of several conditions precedent to our engagement, including but not limited to the following: |
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(a) | Our satisfactory completion of background checks on The Companys management team. |
MDB also retains the right to bring in another placement agent to assist in the Private Placement as MDB deems appropriate. However, the Company shall have the right to request placement agents to assist MDB in the Private Placement, and MDB shall not unreasonably reject to such request. The compensation of any assisting placement agent shall be determined by MDB. | ||
2. | Compensation . As compensation for services rendered to the Company under this Agreement, the Company shall pay to the MDB the following compensation; |
2.1 | Except as otherwise contemplated by this Agreement, in consideration for performing or remaining available to perform the services identified in Section 1 of this Agreement, The Company shall pay the MDB a nonrefundable fee of $15,000. Such fee shall be due and payable on the date of this agreement. | ||
2.2 | in addition to any fees provided in Section 2.1,, The Company agrees to pay to MDB a fee at completion of any Private Placement as set forth in Exhibit A hereto. Any fee payable to the MDB under this Section 2.2 will be due in cash at the closing of any Private Placement and shall be payable to the MDB by the Company, provided, however, that the MDB shall not be entitled to any fee under this Section 2.2 unless the closing of the Private Placement occurs during the term of this Agreement or within twelve months after termination of this Agreement, with parties introduced to the Company by MDB during the term of this Agreement. | ||
2.3 | The Company will pay or reimburse the MDB for all reasonable out-of-pocket costs and expenses incurred by the MDB in performing its obligations under this Agreement, which costs and expenses shall include, but not be limited to, travel expenses incurred in performing its duties, including due diligence and marketing, legal fees and expenses, consulting fees, costs of supplies, printing, copying and mailing and all other expenses reasonably incurred by the MDB in performing its obligations under this Agreement; provided, however, that the MDB shall obtain the prior approval of the Company for total expenditures greater than $25,000. Upon the Companys request, the MDB shall provide to the Company a written statement or statements detailing expenses for which reimbursement is sought. Reimbursable expenses shall be payable by the Company within 30 days of receipt by the Company of a statement requesting reimbursement or, if requested by the Company, copies of supporting documentation. |
3. | Right to Provide Future Investment Banking Services . In the event that a Private Placement is completed for a total of $4 million or more, MDB shall for 9 months following the closing have a right of first refusal to act as sole MDB, manager, underwriter or placement agent to the Company on any transactions for which the Company would require the services of an investment bank and whereby MDB provides such service. Such transactions shall be at a competitive market rate and include, but are not limited to, merger and/or acquisitions transactions and additional offerings or placements of debt or equity securities (public or private). A letter of intent to be negotiated and executed by the parties will contain the provisions of an anticipated transaction, including an underwritten public offering. | |
4. | Offerings . Any Private Placement arranged by MDB will be conducted pursuant to the terms and conditions of a customary placement agent agreement acceptable to MDB, the Company, and their respective counsel. Any Private Placement arranged by MDB will be as the Companys agent and not on an underwritten basis. The Company understands and acknowledges that in agreeing to act as the |
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Companys agent in a Private Placement, MDB does not guarantee that the Company will be able to obtain financing or that the Company will be able to obtain financing on specific terms. | ||
5. | Business Practice . The Company recognizes that the MDB is in the business of advising and consulting with other businesses, some of which businesses may be in competition with the Company. The Company acknowledges and agrees that the MDB may advise and consult with other businesses, including those which may be in competition with the Company, and shall not be required to devote its full time and resources to performing services on behalf of the Company under this Agreement. The MDB shall only be required to expend such time and resources as are reasonably appropriate to advise and assist the Company as provided for herein. | |
6. | Indemnification . The Company acknowledges that the MDB will be acting on behalf of the Company and will require indemnification by the Company. The Company further acknowledges that the indemnification provisions attached hereto as Exhibit B are incorporated by reference herein or are made a part hereof for all purposes as though set forth entirely herein. | |
7. | Term of Agreement . This Agreement shall terminate 12 months from the date of this Agreement, unless extended by mutual agreement of the parties. Upon termination of this Agreement, neither party shall have any further rights or obligations to the other, except that (i) the Company shall be obligated to pay fees under Sections 2.1 and 2.2 hereof relating to transactions commenced by MDB prior to termination of the Agreement and closed within twelve months after termination of this Agreement with a party introduced to the Company by MDB during the term of this Agreement, (ii) the Company shall be obligated to reimburse expenses under Section 2.3 incurred by the MDB during the period prior to termination of this Agreement, and (iii) the MDB and the Company shall continue to be bound by the provisions of Section 6 hereof. | |
8. | Relationship of Parties . The parties agree that their relationship under this Agreement is an advisory relationship only, and nothing herein shall cause the MDB to be partners, agents or fiduciaries of, or joint venturers with, the Company or with each other. | |
9. | Notices . All notices required or permitted herein must be in writing and shall be deemed to have been duly given the first business day following the date of service if served personally, on the first business day following the date of actual receipt if delivered by telecopier, telex or other similar communication to the party or parties to whom notice is to be given, or on the third business day after mailing if mailed to the party or parties to whom notice is to be given by registered or certified mail, return receipt requested, postage prepaid, to the MDB and to the Company at the addresses set forth below, or to such other addresses as either party hereto may designate to the other by notice from time to time for this purpose. |
10. | Parties . This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective successors and assigns. |
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11. | Governing Law . This Agreement shall be construed and enforced in accordance with the laws of the State of Arizona, except for its conflicts of law principles. | |
12. | Entire Agreement, Waiver . This Agreement, along with the Nondisclosure Agreement to be concurrently signed by the parties, constitutes the entire Agreement between the parties hereto and supersedes all prior Agreements relating to the subject matter hereof. This Agreement may not be amended or modified in any way except by subsequent Agreement executed in writing. Either the Company or the MDB may waive in writing any term, condition, or requirement under this Agreement which is intended for its own benefit, and written waiver of any breach of such term or condition of this Agreement shall not operate as a waiver of any other breach of such term or condition, nor shall any failure to enforce any provision hereof operate as a waiver of such provision or of any other provision hereof. | |
13. | Public Announcements . Neither The Company nor MDB can make a public announcement of this engagement that includes either The Companys or MDBs name without written consent of the other party. |
MDB Capital Group LLC. | Command Center, Inc. | |||||||||
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/s/ Anthony Di Giandomenico | /s/ Glenn Welstad | |||||||||
By:
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Anthony Di Giandomenico | By: | Glenn Welstad | |||||||
Authorized Signatory | Title: Chief Executive Officer |
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1. | Compensation for Private Equity Financing (Including PIPE Transactions). |
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PLEDGOR: | ||||
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/s/ GLENN WELSTAD | |||
GLENN WELSTAD, an individual | ||||
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Address: | 3773 W. 5th Avenue | ||
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Posts Falls, ID 83854 | |||
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Fax: | 208-777-0428 | ||
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Email: | |||
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STATE
OF IDAHO
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) | |||||
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) | ss. | ||||
County
of KOOTENAI
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) |
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/s/ Judith L. Kabrick | |||
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Notary Public |
My Commission Expires:
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July 21,
2012
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JUDITH L. KABRICK | THE COMPANY: | |||
NOTARY
PUBLIC
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STATE OF IDAHO | COMMAND CENTER, INC., a Washington corporation | |||
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By: | /s/ Brad E. Herr | ||
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Brad E. Herr, Secretary | |||
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Address: | ||||
3773 West Fifth Avenue | ||||
Post Falls, Idaho 83854 | ||||
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Fax: | 208-773-7450 Ext 112 | ||
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Email: | brad.herr@commandonline.com | ||
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STATE
OF IDAHO
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) | |||||
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) | ss. | ||||
County
of KOOTENAI
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) |
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/s/ Judith L. Kabrick | |||
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Notary Public |
My
Commission Expires: July 21, 2012
JUDITH L. KABRICK NOTARY PUBLIC STATE OF IDAHO |
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Tax Liabilities | IRS* | State* | ||||||||||
Aardvark
|
$ | 219,534 | $ | 35,196 | ||||||||
Anytime Labor
|
$ | 44,720 | $ | 1,682 | ||||||||
Awesome Possum
|
$ | 46,981 | | |||||||||
Broadway Gardens
|
$ | 89,142 | $ | 19,264 | ||||||||
Dogwood Staffing
|
$ | 819 | | |||||||||
Harbor Bay
|
$ | 657,471 | $ | 73,400 | ||||||||
Inland Empire
|
$ | 19,431 | $ | 2,375 | ||||||||
Rascals
|
$ | 341,098 | $ | 210,000 | ||||||||
San Antonio
|
$ | 35,586 | $ | 1,618 | ||||||||
Sonoran Management
|
$ | 101,465 | $ | 900 | ||||||||
Viken Management
|
($16,150 | ) | $ | 3,721 | ||||||||
ZMP
|
$ | 11,103 | | |||||||||
TOTAL
|
$ | 1,551,200 | $ | 348,156 | ||||||||
* | Additional penalties and interest may be due at the time of payment. |
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Spokane, Washington
January 14, 2008