Washington
|
91-2079472
|
|
(State of other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
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3901 N. Schreiber Way, Coeur d‘Alene, ID
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83815
|
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(Address of Principal Executive Offices)
|
(Zip Code)
|
PART I. FINANCIAL INFORMATION
|
Page
|
||
Item 1.
|
Financial Statements
|
||
Consolidated Condensed Balance Sheets as of June 27, 2014 and December 27, 2013
|
3
|
||
Consolidated Condensed Statements of Income for the Twenty-six weeks ended June 27, 2014 and June 28, 2013
|
4
|
||
Consolidated Condensed Statements of Cash Flows for the Twenty-six weeks ended June 27, 2014 and June 28, 2013
|
5
|
||
Notes to Consolidated Condensed Financial Statements
|
6
|
||
Item 2.
|
Management's Discussion and Analysis of Financial Condition and Results of Operations
|
11
|
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Item 3.
|
Quantitative and Qualitative Disclosures about Market Risk
|
14
|
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Item 4.
|
Controls and Procedures
|
14
|
|
PART II. OTHER INFORMATION
|
|||
Item 1.
|
Legal Proceedings
|
14
|
|
Item 1A.
|
Risk Factors
|
14
|
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
15
|
|
Item 3.
|
Default on Senior Securities
|
15
|
|
Item 4.
|
Mine Safety Disclosure
|
15
|
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Item 5.
|
Other Information
|
15
|
|
Item 6.
|
Exhibits
|
15
|
|
Signatures
|
16
|
June 27,
2014
|
December 27,
2013
|
|||||||
ASSETS
|
(unaudited)
|
|||||||
Current Assets
|
||||||||
Cash
|
$ | 2,755,160 | $ | 5,820,309 | ||||
Restricted cash
|
19,197 | 25,619 | ||||||
Accounts receivable, net of allowance for doubtful accounts
|
9,418,680 | 10,577,250 | ||||||
Prepaid expenses, deposits and other
|
425,847 | 328,920 | ||||||
Prepaid workers' compensation
|
816,056 | 28,044 | ||||||
Other receivables
|
20,639 | 27,933 | ||||||
Current portion of workers' compensation deposits
|
1,098,000 | 1,113,000 | ||||||
Total Current Assets
|
14,553,579 | 17,921,075 | ||||||
Property and equipment - net
|
485,655 | 350,767 | ||||||
Workers' compensation risk pool deposit, less current portion
|
1,833,750 | 1,783,112 | ||||||
Goodwill
|
3,306,786 | 3,306,786 | ||||||
Intangible assets - net
|
322,464 | 386,956 | ||||||
Total Assets
|
$ | 20,502,234 | $ | 23,748,696 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||
Current Liabilities
|
||||||||
Accounts payable
|
$ | 342,329 | $ | 402,672 | ||||
Checks issued and payable
|
665,241 | 189,830 | ||||||
Account purchase agreement facility
|
2,875,270 | 8,050,633 | ||||||
Other current liabilities
|
365,297 | 326,319 | ||||||
Accrued wages and benefits
|
1,149,906 | 1,717,235 | ||||||
Current portion of workers' compensation premiums and claims liability
|
1,234,395 | 1,648,058 | ||||||
Total Current Liabilities
|
6,632,438 | 12,334,747 | ||||||
Long-Term Liabilities
|
||||||||
Warrant liabilities
|
- | 1,386,088 | ||||||
Workers' compensation claims liability, less current portion
|
2,632,041 | 2,613,871 | ||||||
Total Liabilities
|
9,264,479 | 16,334,706 | ||||||
Commitments and contingencies
|
||||||||
Stockholders' Equity
|
||||||||
Preferred stock - $0.001 par value, 5,000,000 shares authorized; none issued
|
- | - | ||||||
Common stock - 100,000,000 shares, $0.001 par value, authorized;
|
||||||||
65,252,184 and 59,711,242 shares issued and outstanding, respectively
|
65,253 | 59,711 | ||||||
Additional paid-in capital
|
57,911,332 | 56,099,875 | ||||||
Accumulated deficit
|
(46,738,830 | ) | (48,745,596 | ) | ||||
Total Stockholders' Equity
|
11,237,755 | 7,413,990 | ||||||
Total Liabilities and Stockholders' Equity
|
$ | 20,502,234 | $ | 23,748,696 |
Thirteen Weeks Ended
|
Twenty-six Weeks Ended
|
|||||||||||||||
June 27,
2014
|
June 28,
2013
|
June 27,
2014
|
June 28,
2013
|
|||||||||||||
Revenue
|
$ | 21,662,164 | $ | 23,294,561 | $ | 40,120,343 | $ | 43,199,279 | ||||||||
Cost of staffing services
|
15,824,305 | 17,412,312 | 29,404,480 | 32,097,439 | ||||||||||||
Gross profit
|
5,837,859 | 5,882,249 | 10,715,863 | 11,101,840 | ||||||||||||
Selling, general and administrative expenses
|
4,132,787 | 5,204,200 | 8,349,993 | 10,158,030 | ||||||||||||
Depreciation and amortization
|
68,964 | 128,038 | 133,806 | 217,049 | ||||||||||||
Income from operations
|
1,636,108 | 550,011 | 2,232,064 | 726,761 | ||||||||||||
Interest expense and other financing expense
|
(110,138 | ) | (119,086 | ) | (163,354 | ) | (339,386 | ) | ||||||||
Change in fair value of derivative liabilities
|
- | 41,648 | 87 | 97,404 | ||||||||||||
Net income before income taxes
|
1,525,970 | 472,573 | 2,068,797 | 484,779 | ||||||||||||
Provision for income taxes
|
(29,913 | ) | - | (62,031 | ) | - | ||||||||||
Net income
|
$ | 1,496,057 | $ | 472,573 | $ | 2,006,766 | $ | 484,779 | ||||||||
Earnings per share:
|
||||||||||||||||
Basic
|
$ | 0.02 | $ | 0.01 | $ | 0.03 | $ | 0.01 | ||||||||
Diluted
|
$ | 0.02 | $ | 0.01 | $ | 0.03 | $ | 0.01 | ||||||||
Weighted average shares outstanding:
|
||||||||||||||||
Basic
|
64,770,184 | 59,611,242 | 62,240,713 | 59,611,242 | ||||||||||||
Diluted
|
66,167,519 | 62,484,459 | 63,668,689 | 62,794,132 |
Twenty-six Weeks Ended
|
||||||||
June 27,
2014
|
June 28,
2013
|
|||||||
Cash flows from operating activities
|
|
|||||||
Net income
|
$ | 2,006,766 | $ | 484,779 | ||||
Adjustments to reconcile net income to net cash provided by operations:
|
||||||||
Depreciation and amortization
|
133,806 | 217,049 | ||||||
Change in allowance for doubtful accounts
|
76,769 | 648,299 | ||||||
Change in fair value of derivative liabilities
|
(87 | ) | (97,404 | ) | ||||
Stock based compensation
|
85,664 | 90,052 | ||||||
Changes in assets and liabilities:
|
||||||||
Accounts receivable - trade
|
1,081,801 | 1,940,147 | ||||||
Restricted cash
|
6,422 | 21,295 | ||||||
Prepaid workers' compensation
|
(788,012 | ) | (100,366 | ) | ||||
Other receivables
|
7,293 | 10 | ||||||
Prepaid expenses, deposits and other
|
(96,927 | ) | 21,573 | |||||
Loss on disposition of property and equipment
|
11,698 | 34,563 | ||||||
Workers' compensation risk pool deposits
|
(35,638 | ) | (592,061 | ) | ||||
Accounts payable
|
(60,343 | ) | (176,001 | ) | ||||
Checks issued and payable
|
475,411 | (118,421 | ) | |||||
Other current liabilities
|
38,978 | (150,469 | ) | |||||
Accrued wages and benefits
|
(567,329 | ) | (389,039 | ) | ||||
Workers' compensation premiums and claims liability
|
(395,493 | ) | (697,946 | ) | ||||
Net cash provided by operating activities
|
1,980,779 | 1,136,060 | ||||||
Cash flows from investing activities
|
||||||||
Purchase of property and equipment
|
(215,900 | ) | (18,097 | ) | ||||
Sale of property and equipment
|
- | 30,000 | ||||||
Net cash provided (used) by investing activities
|
(215,900 | ) | 11,903 | |||||
Cash flows from financing activities
|
||||||||
Net proceeds (repayment) from account purchase agreement facility
|
(5,175,363 | ) | (1,482,775 | ) | ||||
Proceeds from the exercise of common stock warrants
|
336,000 | - | ||||||
Proceeds from the exercise of stock options
|
9,335 | - | ||||||
Net cash used by financing activities
|
(4,830,028 | ) | (1,482,775 | ) | ||||
Net decrease in cash
|
(3,065,149 | ) | (334,812 | ) | ||||
Cash, beginning of period
|
5,820,309 | 1,632,993 | ||||||
Cash, end of period
|
$ | 2,755,160 | $ | 1,298,181 | ||||
Non-cash investing and financing activities
|
||||||||
Shares to be issued for contingent consideration
|
$ | - | $ | 322,874 | ||||
Supplemental disclosure of cash flow information
|
||||||||
Interest paid
|
$ | 92,669 | $ | 215,313 | ||||
Income taxes paid
|
$ | 155,431 | $ | - |
June 27,
2014
|
December 27,
2013
|
Input Hierarchy Level
|
|||||||
Recurring:
|
|||||||||
Warrant liabilities
|
$ | - | $ | 1,386,088 |
Level 2
|
Thirteen Weeks Ended
|
Twenty-six Weeks Ended
|
|||||||||||||||
June 27,
2014
|
June 28,
2013
|
June27,
2014
|
June 28,
2013
|
|||||||||||||
Weighted average number of common shares used in basic net income per common share
|
64,770,184 | 59,611,242 | 62,240,713 | 59,611,242 | ||||||||||||
Dilutive effects of stock options
|
1,397,335 | 261,581 | 1,427,976 | 386,263 | ||||||||||||
Dilutive effects of outstanding stock warrants
|
- | 2,611,636 | - | 2,796,627 | ||||||||||||
Weighted average number of common shares used in diluted net income per common share
|
66,167,519 | 62,484,459 | 63,668,689 | 62,794,132 |
June 27,
2014
|
December 27,
2013
|
|||||||
Warrants outstanding at beginning of period
|
5,575,000 | 11,887,803 | ||||||
Exercises
|
(4,200,000 | ) | - | |||||
Expired
|
- | (6,312,803 | ) | |||||
Warrants outstanding at end of period
|
1,375,000 | 5,575,000 |
December 27,
2013
|
||||
Expected terms (years)
|
0.26 | |||
Expected volatility
|
93.2 | % | ||
Dividend yield
|
0.0 | % | ||
Risk-free rate
|
0.07 | % |
Number of Shares Under Options
|
Weighted Average Exercise Price per Share
|
Weighted Average Grant Date Fair Value
|
||||||||||
Outstanding, December 27, 2013
|
3,950,500 | $ | 0.26 | $ | 0.21 | |||||||
Forfeited
|
(160,125 | ) | 0.38 | 0.31 | ||||||||
Expired
|
(6,875 | ) | 0.31 | 0.23 | ||||||||
Exercised
|
(53,500 | ) | 0.17 | 0.16 | ||||||||
Outstanding, June 27, 2014
|
3,730,000 | 0.25 | 0.21 |
Number of Options
|
Weighted Average Exercise Price per Share
|
Weighted Average Grant Date Fair Value
|
||||||||||
Nonvested, December 27, 2013
|
2,646,375 | $ | 0.27 | $ | 0.22 | |||||||
Vested
|
(717,625 | ) | 0.23 | 0.19 | ||||||||
Forfeited
|
(160,125 | ) | 0.38 | 0.31 | ||||||||
Nonvested, June 27, 2014
|
1,768,625 | 0.28 | 0.22 |
Number of Options
|
Weighted Average Exercise Price Per Share
|
Weighted Average Remaining Contractual Life (years)
|
Aggregate Intrinsic Value
|
|||||||||||||
Outstanding
|
3,730,000 | $ | 0.25 | 2.51 | $ | 1,704,986 | ||||||||||
Exercisable
|
1,903,875 | 0.23 | 1.77 | 679,184 |
Thirteen Weeks Ended
|
Twenty-six Weeks Ended
|
|||||||||||||||||||||||||||||||
June 27, 2014
|
June 28, 2013
|
June 27, 2014
|
June 28, 2013
|
|||||||||||||||||||||||||||||
Total Operating Revenue
|
$ | 21,662 | $ | 23,295 | $ | 40,120 | $ | 43,199 | ||||||||||||||||||||||||
Cost of Staffing Services
|
15,824 | 73.1 | % | 17,413 | 74.7 | % | 29,404 | 73.3 | % | 32,097 | 74.3 | % | ||||||||||||||||||||
Gross profit
|
5,838 | 26.9 | % | 5,882 | 25.3 | % | 10,716 | 26.7 | % | 11,102 | 25.7 | % | ||||||||||||||||||||
Selling, general and administrative expenses
|
4,133 | 19.1 | % | 5,204 | 22.3 | % | 8,350 | 20.8 | % | 10,158 | 23.5 | % | ||||||||||||||||||||
Depreciation and amortization
|
69 | 0.3 | % | 128 | 0.5 | % | 134 | 0.3 | % | 217 | 0.5 | % | ||||||||||||||||||||
Income from operations
|
1,636 | 7.6 | % | 550 | 2.4 | % | 2,232 | 5.6 | % | 727 | 1.7 | % | ||||||||||||||||||||
Interest expense and other financing expense
|
(110 | ) | -0.5 | % | (119 | ) | -0.5 | % | (163 | ) | -0.4 | % | (339 | ) | -0.8 | % | ||||||||||||||||
Change in fair value of warrant liability
|
- | 0.0 | % | 42 | 0.2 | % | - | 0.0 | % | 97 | 0.2 | % | ||||||||||||||||||||
Net income before income taxes
|
1,526 | 7.0 | % | 473 | 2.0 | % | 2,069 | 5.2 | % | 485 | 1.1 | % | ||||||||||||||||||||
Provision for income taxes
|
(30 | ) | -0.1 | % | - | 0.0 | % | (62 | ) | -0.2 | % | - | 0.0 | % | ||||||||||||||||||
Net income
|
$ | 1,496 | 6.9 | % | $ | 473 | 2.0 | % | $ | 2,007 | 5.0 | % | $ | 485 | 1.1 | % | ||||||||||||||||
Non-GAAP Data
|
||||||||||||||||||||||||||||||||
EBITDA-D
|
$ | 1,705 | 7.9 | % | $ | 678 | 2.9 | % | $ | 2,366 | 5.9 | % | $ | 944 | 2.2 | % |
Thirteen Weeks Ended
|
Twenty-six Weeks Ended
|
|||||||||||||||
June 27,
2014
|
June 28,
2013
|
June 27,
2014
|
June 28,
2013
|
|||||||||||||
EBITDA-D
|
$ | 1,705 | $ | 678 | $ | 2,366 | $ | 944 | ||||||||
Interest expense and other financing expense
|
(110 | ) | (119 | ) | (163 | ) | (339 | ) | ||||||||
Depreciation and amortization
|
(69 | ) | (128 | ) | (134 | ) | (217 | ) | ||||||||
Change in fair value of warrant liability
|
- | 42 | - | 97 | ||||||||||||
Provision for income taxes
|
(30 | ) | - | (62 | ) | - | ||||||||||
Net income
|
$ | 1,496 | $ | 473 | $ | 2,007 | $ | 485 |
Exhibit No.
|
Description
|
|
Certification of Frederick Sandford, Chief Executive Officer of Command Center, Inc. pursuant to Rule 13a-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
||
Certification of Ralph E. Peterson, Principal Accounting Officer of Command Center, Inc. pursuant to Rule 13a-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
||
Certification of Frederick Sandford, Chief Executive Officer of Command Center, Inc. pursuant to 18 U.S.C. Section 1350, as adopted in Section 906 of the Sarbanes-Oxley Act of 2002.
|
||
Certification of Ralph E. Peterson, Principal Accounting Officer of Command Center, Inc. pursuant to 18 U.S.C. Section 1350, as adopted in Section 906 of the Sarbanes-Oxley Act of 2002.
|
||
101.INS (1)
|
XBRL Instance Document
|
|
101.SCH (1)
|
XBRL Taxonomy Extension Schema Document
|
|
101.CAL (1)
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
101.DEF (1)
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
101.LAB (1)
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
101.PRE (1)
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
(1) The XBRL related information in Exhibit 101 to this Quarterly Report on Form 10-Q shall not be deemed “filed” for purposes of section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability of that section and shall not be incorporated by reference into any filing or other document pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing or document.
|
/s/
Frederick Sandford
|
President and CEO
|
Frederick Sandford
|
August 7, 2014
|
|||
Signature
|
Title
|
Printed Name
|
Date
|
|||
/s/
Ralph E. Peterson
|
Principal Accounting Officer
|
Ralph E. Peterson
|
August 7, 2014
|
|||
Signature
|
Title
|
Printed Name
|
Date
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Command Center, Inc.
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact nor omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15 (e) and 15d-15(e)) for the registrant and we have:
|
a)
|
Designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant is made known to us by others within those entities, particularly during the period in which this report is being prepared.
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation.
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's second fiscal quarter in the case of this quarterly report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information.
|
b)
|
Any fraud, whether material or not, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Dated: August 7, 2014
|
By:
|
/s/ Frederick Sandford
|
|
Frederick Sandford
|
|||
Chief Executive Officer
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Command Center, Inc.
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact nor omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report.
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report.
|
4.
|
The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15 (e) and 15d-15(e)) for the registrant and we have:
|
a)
|
Designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant is made known to us by others within those entities, particularly during the period in which this report is being prepared.
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation.
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's second fiscal quarter in the case of this quarterly report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information.
|
b)
|
Any fraud, whether material or not, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Dated: August 7, 2014
|
By:
|
/s/ Ralph E. Peterson
|
|
Ralph E. Peterson
|
|||
Principal Accounting Officer
|
1.
|
The report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934.
|
2.
|
The information contained in the report fairly presents, in all material respects, the financial condition and results of operations of the Company at the dates and for the periods covered by the report.
|
Dated: August 7, 2014
|
By:
|
/s/ Frederick Sandford
|
|
Frederick Sandford
|
|||
Chief Executive Officer
|
1.
|
The report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934.
|
2.
|
The information contained in the report fairly presents, in all material respects, the financial condition and results of operations of the Company at the dates and for the periods covered by the report.
|
Dated: August 7, 2014
|
By:
|
/s/ Ralph E. Peterson
|
|
Ralph E. Peterson
|
|||
Principal Accounting Officer
|