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Document and Entity Information
3 Months Ended
Mar. 29, 2013
May 07, 2013
Document And Entity Information
Entity Registrant Name Command Center, Inc.
Entity Central Index Key 0001140102
Document Type 10-Q
Document Period End Date Mar 29, 2013
Amendment Flag false
Current Fiscal Year End Date --12-27
Is Entity a Well-known Seasoned Issuer? No
Is Entity a Voluntary Filer? No
Is Entity's Reporting Status Current? Yes
Entity Filer Category Smaller Reporting Company
Entity Common Stock, Shares Outstanding 59,611,242
Document Fiscal Period Focus Q1
Document Fiscal Year Focus 2013
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Statement - Consolidated Condensed Balance Sheets (Unaudited) (USD $) (USD $)
Mar. 29, 2013
Dec. 28, 2012
Current assets
Cash $ 848,578 $ 1,632,993
Restricted cash 17,313 21,295
Accounts receivable, net of allowance for doubtful accounts 10,919,142 13,701,396
Prepaid expenses, deposits and other 325,860 409,547
Prepaid workers' compensation 0 22,852
Other receivables 17,799 17,618
Current portion of workers' compensation deposits 1,000,000 1,200,000
Total Current Assets 13,128,692 17,005,701
Property and equipment - net 563,672 609,772
Workers' compensation risk pool deposits, less current portion 861,788 506,196
Goodwill 3,306,786 3,306,786
Intangible assets - net 487,551 522,535
Total Assets 18,348,489 21,950,990
Current liabilities
Accounts payable 506,328 722,150
Checks issued and payable 579,120 511,105
Account purchase agreement facility 6,670,725 9,051,999
Other current liabilities 291,452 507,122
Contingent liability 0 322,874
Accrued wages and benefits 1,659,089 1,713,480
Current portion of workers' compensation premiums and claims liability 1,195,175 2,005,579
Total Current Liabilities 10,901,889 14,834,309
Long-term liabilities
Warrant liabilities 543,717 599,473
Workers compensation claims liability, less current portion 2,512,230 2,510,687
Total liabilities 13,957,836 17,944,469
Commitments and contingencies      
Stockholders equity:
Preferred stock - $0.001 par value, 5,000,000 shares authorized; none issued 0 0
Common stock - 100,000,000 shares, $0.001 par value, authorized; 59,611,242 shares issued and outstanding 59,611 59,611
Additional paid-in capital 56,005,303 55,633,377
Accumulated deficit (51,674,261) (51,686,467)
Total Stockholders' Equity 4,390,653 4,006,521
Total Liabilities and Stockholders' Equity $ 18,348,489 $ 21,950,990
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Statement - Consolidated Condensed Balance Sheets (USD $) (Parenthetical) (USD $)
Mar. 29, 2013
Dec. 28, 2012
Stockholders equity:
Preferred stock par value $ 0.001 $ 0.001
Preferred stock shares authorized 5,000,000 5,000,000
Preferred stock shares issued 0 0
Common stock par value $ 0.001 $ 0.001
Common stock shares authorized 100,000,000 100,000,000
Common stock shares issued 59,611,242 59,611,242
Common stock shares outstanding 59,611,242 59,611,242
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Consolidated Condensed Statements of Income (Operations) (Unaudited) (USD $)
3 Months Ended
Mar. 29, 2013
Mar. 30, 2012
Income Statement [Abstract]
Revenue $ 19,904,718 $ 19,093,681
Cost of staffing services 14,685,127 14,452,123
Gross Profit 5,219,591 4,641,558
Selling, general and administrative expenses 4,953,830 4,319,335
Depreciation and amortization 89,011 120,463
Income from operations 176,750 201,760
Interest expense and other financing expense (220,300) (147,073)
Change in fair value of derivative liability 55,756 (616,183)
Net income (loss) before income taxes 12,206 (561,496)
(Provision) for income tax 0 0
Net Income (loss) $ 12,206 $ (561,496)
Earnings (loss) per share:
Basic $ 0 $ (0.01)
Diluted $ 0 $ (0.01)
Weighted average shares outstanding:
Basic 59,611,242 59,044,786
Diluted 62,644,642 59,044,786
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Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $)
3 Months Ended
Mar. 29, 2013
Mar. 30, 2012
Cash flows from operating activities:
Net income (loss) $ 12,206 $ (561,496)
Adjustments to reconcile net loss to net income (loss) cash provided by operations:
Depreciation and amortization 89,011 120,463
Change in allowance for doubtful accounts 39,159 (28,704)
Change in fair value of derivative liabilities (55,756) 616,183
Common stock issued for interest and services 0 12,600
Stock based compensation 49,052 18,323
Change in assets and liabilities:
Accounts receivable - trade 2,743,095 (862,822)
Restricted cash 3,982 0
Prepaid workers' compensation 22,852 11,881
Other receivables (181) (568)
Prepaid expenses, deposits and other 83,687 52,897
Workers' compensation risk pool deposits (155,593) 116,371
Accounts payable (215,822) (530,745)
Checks issued and payable 68,015 275,651
Other current liabilities (215,670) (99,197)
Accrued wages and benefits (54,391) 832,875
Workers' compensation premiums and claims liability (808,859) 217,172
Net cash provided by operating activities 1,604,787 190,884
Cash flows from investing activities:
Purchases of property and equipment (7,928) (70,404)
Cash paid for acquisition of subsidiary 0 (150,000)
Net cash provided by investing activities (7,928) (220,404)
Cash flows from financing activities:
Repayments to account purchase agreement facility (2,381,274) (144,752)
Payments on notes payable 0 (50,000)
Net cash used by financing activities (2,381,274) (194,752)
Net decrease in cash (784,415) (224,272)
Cash, beginning of period 1,632,993 1,131,296
Cash, end of period 848,578 907,024
Non-cash investing and financing activities
Common stock issued for subsidiary 0 390,000
Contingent consideration recorded in acquisition of subsidiary 0 851,727
Note payable issued for subsidiary 0 150,000
Shares to be issued for contingent consideration 322,874 0
Supplemental disclosure of cash flow information
Interest paid 141,171 101,065
Income taxes paid $ 0 $ 0
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Disclosure - 1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
3 Months Ended
Mar. 29, 2013
Notes to Financial Statements
Note 1 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

The accompanying unaudited consolidated condensed financial statements have been prepared by Command Center, Inc. (Command, us, we, or our) in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial reporting, as well as the instructions to Form 10-Q. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP may have been condensed or omitted. In the opinion of our management, all adjustments, consisting of only normal recurring accruals, necessary for a fair presentation of the financial position, results of operations, and cash flows for the fiscal periods presented have been included. The information included in this Form 10-Q should be read in conjunction with the audited financial statements and notes to the financial statements included in our Annual Report filed on Form 10-K for the year ended December 28, 2012.

 

Consolidation: The consolidated financial statements include the accounts of Command and all of its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.

 

Reclassifications: Certain financial statement amounts for the prior period have been reclassified to conform to the current period presentation. These reclassifications had no effect on the net income or loss, or accumulated deficit as previously reported.

 

Cash and Cash Equivalents: Cash and cash equivalents consists of demand deposits, including interest-bearing accounts with original maturities of three months or less, held in banking institutions and a trust account. These accounts are guaranteed by the Federal Deposit Insurance Corporation FDIC up to $250,000 per institution. As of March 29, 2013 and December 28, 2012, we held deposits in excess of FDIC insured limits of approximately $456,000 and $705,000, respectively.

 

Fair Value Measures:  Fair value is the price that would be received to sell an asset, or paid to transfer a liability, in the principal or most advantageous market for the asset or liability in an ordinary transaction between market participants on the measurement date. Our policy on fair value measures requires us to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The policy establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The policy prioritizes the inputs into three levels that may be used to measure fair value:

 

Level 1: Applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

 

 Level 2: Applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

 

 Level 3: Applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

 

Our financial instruments consist principally of stock warrants and a contingent liability.

 

The following table sets forth our assets and liabilities measured at fair value, whether recurring or non-recurring, at March 29, 2013 and December 28, 2012, and the fair value calculation input hierarchy level that we have determined applies to each asset and liability category.

 

   

March 29,

2013

   

December 28,

2012

    Input Hierarchy Level  
Recurring:                  
Warrant liabilities   $ 543,717     $ 599,473     Level 2  
Contingent liability   $ -     $ 322,874     Level 2  

 

Recent Accounting Pronouncements:  Other accounting standards that have been issued by the FASB or other standards-setting bodies are not expected to have a material impact on our financial position, results of operations and cash flows. For period ended March 29, 2013, the adoption of other accounting standards had no material impact on our financial positions, results of operations or cash flows.

 

Recent Accounting Pronouncements not yet Adopted:  In July 2012, the Financial Accounting Standards Board issued guidance on testing indefinite-lived intangibles for impairment. The new guidance provides an entity the option to first perform a qualitative assessment to determine whether it is more likely than not that the fair value of its indefinite-lived intangible assets are less than their carrying amounts. If an entity determines that it is more likely than not that the fair value of each asset exceeds its carrying amount, it would not need to calculate the fair value of the asset in that year. If the entity concludes otherwise, it is required to perform an impairment test comparing the carrying value of the intangible asset with its fair value and recognize an impairment loss if necessary. The new guidance is effective for us beginning in our fiscal year 2013.

 

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2. EARNINGS PER SHARE
3 Months Ended
Mar. 29, 2013
Notes to Financial Statements
Note 2 - EARNINGS PER SHARE

 

Basic earnings per share is calculated by dividing net income or loss available to common stockholders by the weighted average number of common shares outstanding, and does not include the impact of any potentially dilutive common stock equivalents. Diluted earnings per share reflect the potential dilution of securities that could share in our earnings through the conversion of common shares issuable via outstanding stock options and stock warrants, except where its inclusion would be anti-dilutive. Total outstanding common stock equivalents at March 29, 2013 and March 30, 2012 were 13,230,053 and 13,524,803, respectively.

 

Diluted common shares outstanding were calculated as follows:

 

    March 29,
2013
    March 30,
2102
 
Weighted average number of common shares used in basic net income (loss) per common share     59,611,242       59,044,786  
Dilutive effects of outstanding stock warrants     2,734,228       -  
Dilutive effects of vested stock options     299,172       -  
Weighted average number of common shares used in diluted net income (loss) per common share     62,644,642       59,044,786  

 

 

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3. ACCOUNT PURCHASE AGREEMENT
3 Months Ended
Mar. 29, 2013
Notes to Financial Statements
Note 3 - ACCOUNT PURCHASE AGREEMENT

 

Net accounts receivable sold pursuant to our account purchase agreement were approximately $6.7 million, and the facility maximum was $15 million, at March 29, 2013. At March 29, 2013 the effective interest rate pursuant to this agreement was 6.25% and is payable on the actual amount advanced or $3 million, whichever is greater.

 

The agreement requires that the sum of the excess available advances, plus our book cash balance at month end, must at all times be greater than accrued payroll and accrued payroll taxes. At March 29, 2013, we were in compliance with this covenant.

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4. WORKERS' COMPENSATION INSURANCE AND RESERVES
3 Months Ended
Mar. 29, 2013
Notes to Financial Statements
Note 4 - WORKERS' COMPENSATION INSURANCE AND RESERVES

 

On April 1, 2012, we changed our workers’ compensation carrier to Dallas National in all states in which we operate other than Washington, North Dakota and New York. The Dallas National coverage is a large deductible policy where we have primary responsibility for claims under the policy. Dallas National provides insurance for covered losses and expenses in excess of $350,000 per incident. Per our contractual agreements with Dallas National, we will make payments into, and maintain a balance of, $900,000 in a non-depleting deposit account to cover claims within our self-insured layer. For workers' compensation claims originating in Washington, North Dakota and New York consolidated we pay workers' compensation insurance premiums and obtain full coverage under state government administered programs. Accordingly, our financial statements reflect only the mandated workers' compensation insurance premium liability for workers' compensation claims in these jurisdictions.

 

As part of our large deductible workers’ compensation programs, our carriers require that we collateralize a portion of our future workers’ compensation obligations in order to secure future payments which become due. This collateral is typically in the form of cash and cash equivalents. At March 29, 2013 and December 28, 2012 we had collateral deposits of approximately $1.9 million and $1.7 million, respectively.

 

Workers' compensation expense for temporary workers is recorded as a component of our cost of services and totaled approximately $558,000 and $656,000 for the period ended March 29, 2013 and March 30, 2012, respectively.

 

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5. STOCKHOLDERS EQUITY
3 Months Ended
Mar. 29, 2013
Notes to Financial Statements
Note 5 - STOCKHOLDERS EQUITY

 

Issuance of Common Stock: There were no shares issued during the quarter ended March 29, 2013. There are approximately 1.3 million shares to be issued related to the acquisition of DRS, LLC as part of a contingent fee calculation. The shares are to be issued to the owners of DRS, LLC pending final approval by our Board of Directors. Due to the pending issuance, we reclassed $322,874 recorded as a contingent liability to additional paid-in capital in stockholders' equity at March 29, 2013 as the contingent fee was fully earned.

 

Stock Warrants: The following warrants for our common stock were issued and outstanding on March 29, 2013 and December 28, 2012, respectively:

 

   

March 29,

2013

   

December 28,

2012

 
Warrants outstanding at beginning of period     11,887,803       12,137,803  
Exercised     -       (250,000 )
Warrants outstanding at end of period     11,887,803       11,887,803  

 

A detail of warrants outstanding March 29, 2013 is as follows:

 

    Number of Warrants     Expiration Date  
Exercisable at $1.25 per share     6,312,803     6/20/2013  
Exercisable at $0.08 per share     4,200,000     4/1/2014  
Exercisable at between $0.32 and $1.00 per share     1,375,000     4/15/13 to 4/15/15  
      11,887,803        

 

Of the warrants outstanding, 4.2 million are defined as a derivative instrument and the fair value of these warrants is estimated each period using the Black-Scholes pricing model. Expected volatility is based on historical annualized volatility of our stock. The expected term of warrants issued represents the period of time that warrants issued are expected to be outstanding. The risk-free rate is based upon the U.S. Treasury yield curve in effect at the time of issuance. The assumptions used to calculate the fair value are as follows:

 

   

March 29,

2013

   

December 28,

2012

 
Expected terms (years)     1.0       1.3  
Expected volatility     92.5 %     95.2 %
Dividend yield     0.0 %     0.0 %
Risk-free rate     0.1 %     0.2 %

 

The change in fair value amounted to approximately $56,000 and $616,000 for the thirteen weeks ended March 29, 2013 and March 30, 2012, respectively. These changes are included in the line item Change in fair value of derivative liabilities in our Statements of Income (Operations).

 

 

 

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6. STOCK BASED COMPENSATION
3 Months Ended
Mar. 29, 2013
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Note 6 - STOCK BASED COMPENSATION

 

We approved an option plan in 2008 permitting the grant of 6.4 million stock options to employees for the purpose of attracting and motivating employees, officers and directors.

 

On February 22, 2013, we awarded our new CEO 1.5 million stock options pursuant to our 2008 Stock Incentive Plan. These options were granted with a term of ten years from the date of grant and vest over a period of four years, with 25% vesting on the first anniversary of the date of grant and 25% vesting each anniversary thereafter for the following three years. The exercise price is $.20 per share.

  

There were 1,342,250 options vested at March 29, 2013 and 1,387,000 options vested at March 30, 2012.

 

The fair value of each option award is estimated on the date of grant using the Black-Scholes option-pricing model. The assumptions used to calculate the fair value are as follows:

 

   

March 29,

2013

 
Expected term (years)     5.0  
Expected volatility     114.1 %
Dividend yield     0.0 %
Risk-free rate     0.8 %

 

The following table summarizes our stock options outstanding at December 28, 2012 and changes during the period ended March 29, 2013:

 

    Number of Shares Under Options     Weighted Average Exercise Price Per Share     Average Fair Value Per Share     Aggregate Intrinsic Value  
Outstanding, December 28, 2012     4,083,000     $ 0.20     $ 0.17     $ 1,774,460  
Forfeited     (68,500 )     0.39       0.32       (17,125 )
Expired     (5,000 )     0.17       0.15       (400 )
Granted     1,500,000       0.20       0.16       375,000  
Outstanding, March 29, 2013     5,509,500       0.26       0.21     $ 2,131,935  

 

The following table summarizes our nonvested stock options outstanding at December 28, 2012, and changes during the period ended March 29, 2013:

 

   

Number of

Options

    Weighted Average Exercise Price per Share     Weighted Average Grant Date Fair Value     Aggregate Intrinsic Value  
Nonvested, December 28, 2012     2,735,750     $ 0.17     $ 0.15     $ 1,483,612  
Forfeited     (68,500 )     0.39       0.32       (17,125 )
Granted     1,500,000       0.20       0.16       375,000  
Nonvested, March 29, 2013     4,167,250       0.28       0.23     $ 1,841,487  

 

The following table summarizes information about our stock options outstanding, and reflects the intrinsic value recalculated based on the closing price of our common stock at March 29, 2013:

 

   

Number of

Options

    Weighted Average Exercise Price Per Share     Weighted Average Remaining Contractual Life (years)    

Aggregate

Intrinsic Value

 
Outstanding     5,509,500     $ 0.26       3.45     $ 1,136,193  
Exercisable     1,342,250       0.18       1.98       94,380  

 

We recognized share-based compensation expense relating to the vesting of issued stock options of approximately $50,000 and $18,000 for the periods ended March 29, 2013 and March 30, 2012, respectively. As of March 29, 2013, there was unrecognized share-based compensation expense totaling approximately $525,000 relating to non-vested options that will be recognized over the next 3.9 years.

 

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7. COMMITMENTS AND CONTINGENCIES
3 Months Ended
Mar. 29, 2013
Notes to Financial Statements
Note 7 - COMMITMENTS AND CONTINGENCIES

Legal Proceeding: On August 3, 2012, Trident Seafoods Corporation and Liberty Mutual filed a lawsuit against us in the United States District Court, Western District of Washington, for declaratory judgment, breach of contract and violation of the Consumer Protection Act. This action is the result of a previous decision of the administrative law judge for the U.S. Department of Labor, wherein it was determined that a former employee of ours was, in fact, an employee of Trident Seafoods, for purposes of the U.S. Longshore and Harbor Workers' Compensation Act. Trident Seafoods alleges we have a contractual duty to pay workers’ compensation benefits for the injured “borrowed” employee. We believe the claims asserted by Trident are unfounded and intend to vigorously defend this case.

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8. SUBSEQUENT EVENTS
3 Months Ended
Mar. 29, 2013
Subsequent Events [Abstract]
Note 8 - SUBSEQUENT EVENTS

 

On April 30, 2013, an amendment to our Account Purchase Agreement with Wells Fargo was signed. The amendment extends the term of the agreement through April, 2016. The facility maximum was reduced from $15 million to $14 million. The major modification to the terms of the previous agreement includes a decrease in the interest rate assessed on any amounts advanced from the greater of 5.50% plus Libor (subject to a minimum of 6.25%) to 3.00% plus Libor. In addition to other changes, the annual facility fee of 1% of the facility threshold in place was reduced to 0.75%, and monitoring fees of $5,000 per month were removed.

 

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1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)
3 Months Ended
Mar. 29, 2013
Basis Of Presentation And Summary Of Significant Accounting Policies Policies
Consolidation

 

Consolidation: The consolidated financial statements include the accounts of Command and all of its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.

Reclassifications

 

Reclassifications: Certain financial statement amounts for the prior period have been reclassified to conform to the current period presentation. These reclassifications had no effect on the net income or loss, or accumulated deficit as previously reported.

Cash and Cash Equivalents

 

Cash and Cash Equivalents: Cash and cash equivalents consists of demand deposits, including interest-bearing accounts with original maturities of three months or less, held in banking institutions and a trust account. These accounts are guaranteed by the Federal Deposit Insurance Corporation FDIC up to $250,000 per institution. As of March 29, 2013 and December 28, 2012, we held deposits in excess of FDIC insured limits of approximately $456,000 and $705,000, respectively.

Fair Value Measurements

 

 

Fair Value Measures:  Fair value is the price that would be received to sell an asset, or paid to transfer a liability, in the principal or most advantageous market for the asset or liability in an ordinary transaction between market participants on the measurement date. Our policy on fair value measures requires us to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The policy establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The policy prioritizes the inputs into three levels that may be used to measure fair value:

 

Level 1: Applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

 

 Level 2: Applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

 

 Level 3: Applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

 

Our financial instruments consist principally of stock warrants and a contingent liability.

 

The following table sets forth our assets and liabilities measured at fair value, whether recurring or non-recurring, at March 29, 2013 and December 28, 2012, and the fair value calculation input hierarchy level that we have determined applies to each asset and liability category.

 

   

March 29,

2013

   

December 28,

2012

    Input Hierarchy Level  
Recurring:                  
Warrant liabilities   $ 543,717     $ 599,473     Level 2  
Contingent liability   $ -     $ 322,874     Level 2  

Recent Accounting Pronouncements

Recent Accounting Pronouncements:  Other accounting standards that have been issued by the FASB or other standards-setting bodies are not expected to have a material impact on our financial position, results of operations and cash flows. For period ended March 29, 2013, the adoption of other accounting standards had no material impact on our financial positions, results of operations or cash flows.

Recent Accounting Pronouncements not yet Adopted

Recent Accounting Pronouncements not yet Adopted:  In July 2012, the Financial Accounting Standards Board issued guidance on testing indefinite-lived intangibles for impairment. The new guidance provides an entity the option to first perform a qualitative assessment to determine whether it is more likely than not that the fair value of its indefinite-lived intangible assets are less than their carrying amounts. If an entity determines that it is more likely than not that the fair value of each asset exceeds its carrying amount, it would not need to calculate the fair value of the asset in that year. If the entity concludes otherwise, it is required to perform an impairment test comparing the carrying value of the intangible asset with its fair value and recognize an impairment loss if necessary. The new guidance is effective for us beginning in our fiscal year 2013.

 

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1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)
3 Months Ended
Mar. 29, 2013
Basis Of Presentation And Summary Of Significant Accounting Policies Tables
Schedule of fair value of financial instruments
    March 29, 2013     December 28, 2012     Input Hierarchy Level  
Recurring:                  
Warrant liabilities   $ 543,717     $ 599,473     Level 2  
Contingent liability   $ -     $ 322,874     Level 2  
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2. EARNINGS PER SHARE (Tables)
3 Months Ended
Mar. 29, 2013
Earnings Per Share Tables
Schedule of earnings per share
  March 29, 2013   March 30, 2102
Weighted average number of common shares used in basic net income (loss) per common share 59,611,242   59,044,786
Dilutive effects of outstanding stock warrants 2,734,228                          -   
Dilutive effects of vested stock options 299,172   -   
Weighted average number of common shares used in diluted net income (loss) per common share 62,644,642   59,044,786
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5. STOCKHOLDERS EQUITY (Tables)
3 Months Ended
Mar. 29, 2013
Stockholders Equity Tables
Stock Warrants

Stock Warrants: The following warrants for our common stock were issued and outstanding on March 29, 2013 and December 28, 2012, respectively:

 

    March 29, 2013     December 28, 2012  
Warrants outstanding at beginning of period     11,887,803       12,137,803  
Exercised     -       (250,000 )
Warrants outstanding at end of period     11,887,803       11,887,803  

 

A detail of warrants outstanding March 29, 2013 is as follows:

 

    Number of Warrants     Expiration Date  
Exercisable at $1.25 per share     6,312,803     6/20/2013  
Exercisable at $0.08 per share     4,200,000     4/1/2014  
Exercisable at between $0.32 and $1.00 per share     1,375,000     4/15/13 to 4/15/15  
      11,887,803        
Warrant fair value assumptions
    March 29, 2013     December 28, 2012  
Expected terms (years)     1.0       1.3  
Expected volatility     92.5 %     95.2 %
Dividend yield     0.0 %     0.0 %
Risk-free rate     0.1 %     0.2 %
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6. STOCK BASED COMPENSATION (Tables)
3 Months Ended
Mar. 29, 2013
Stock Based Compensation Tables
Fair Value Assumption
    March 29, 2013  
Expected term (years)     5.0  
Expected volatility     114.1 %
Dividend yield     0.0 %
Risk-free rate     0.8 %
Stock based Compensation
    Number of Shares Under Options     Weighted Average Exercise Price Per Share     Average Fair Value Per Share     Aggregate Intrinsic Value  
Outstanding, December 28, 2012     4,083,000     $ 0.20     $ 0.17     $ 1,774,460  
Forfeited     (68,500 )     0.39       0.32       (17,125 )
Expired     (5,000 )     0.17       0.15       (400 )
Granted     1,500,000       0.20       0.16       375,000  
Outstanding, March 29, 2013     5,509,500       0.26       0.21     $ 2,131,935  
Nonvested stock options outstanding
   

Number of

Options

    Weighted Average Exercise Price per Share     Weighted Average Grant Date Fair Value     Aggregate Intrinsic Value  
Nonvested, December 28, 2012     2,735,750     $ 0.17     $ 0.15     $ 1,483,612  
Forfeited     (68,500 )     0.39       0.32       (17,125 )
Granted     1,500,000       0.20       0.16       375,000  
Nonvested, March 29, 2013     4,167,250       0.28       0.23     $ 1,841,487  
Intrinsic value
   

Number of

Options

    Weighted Average Exercise Price Per Share     Weighted Average Remaining Contractual Life (years)    

Aggregate

Intrinsic Value

 
Outstanding     5,509,500     $ 0.26       3.45     $ 1,136,193  
Exercisable     1,342,250       0.18       1.98       94,380  
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1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICES (Details) (USD $)
Mar. 29, 2013
Dec. 28, 2012
Recurring:
Warrant Liabilities (Level 2) $ 543,717 $ 599,473
Contingent liability (Level 2) $ 0 $ 322,874
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2. EARNINGS PER SHARE (Details)
3 Months Ended
Mar. 29, 2013
Mar. 30, 2012
Earnings Per Share Details
Weighted average number of common shares used in basic net income (loss) per common share 59,611,242 59,044,786
Dilutive effects of outstanding stock warrants 2,734,228   
Dilutive effects of vested stock options 299,172   
Weighted average number of common shares used in diluted net income (loss) per common share 62,644,642 59,044,786
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5. STOCKHOLDERS' EQUITY (Details)
Mar. 29, 2013
Dec. 28, 2012
Stockholders Equity Details
Warrants outstanding at beginning of period 11,887,803 12,137,803
Exercised    (250,000)
Warrants outstanding at end of period 11,887,803 11,887,803
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5. STOCKHOLDERS' EQUITY (Details 1)
Dec. 28, 2012
Number of warrants 11,887,803
Exercisable at $1.25 per share [Member]
Number of warrants 6,312,803
Expiration Date of waraants 6/20/2013
Exercisable at $0.08 per share [Member]
Number of warrants 4,200,000
Expiration Date of waraants 04-01-2014
ExercisableAtBetween0.32And1.00PerShareMember
Number of warrants 1,375,000
Expiration Date of waraants 4/15/13 to 4/15/15
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5. STOCKHOLDERS' EQUITY (Details 2)
Mar. 29, 2013
Dec. 28, 2012
Stockholders Equity Details 2
Expected terms (years) 1 year 1 year 3 months 18 days
Expecteced volatility 92.50% 95.20%
Dividend yield 0.00% 0.00%
Risk-free rate 0.10% 0.20%
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6. STOCK BASED COMPENSATION (Details )
3 Months Ended
Mar. 29, 2013
Stock Based Compensation Details
Expected term (years) 5 years
Expected volatility 114.10%
Dividend yield 0.00%
Risk-free rate 0.80%
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6. STOCK BASED COMPENSATION (Details 1) (USD $)
3 Months Ended
Mar. 29, 2013
Stock Based Compensation Details 1
Number of Options Outstanding, Beginning of fiscal year 4,083,000
Granted, option 1,500,000
Forfeited, option (68,500)
Expired, Option (5,000)
Number of Options Outstanding, End of fiscal year 5,509,500
Weighted Average Exercise Price Per Share, Outstanding, Beginning of fiscal year $ 0.2
Granted, Weighted Average Exercise Price Per Share $ 0.2
Forfeited, Weighted Average Exercise Price Per Share $ 0.39
Weighted Average Exercise Price Per Share, Expired $ 0.17
Weighted Average Exercise Price Per Share, Outstanding, End of fiscal year $ 0.26
Weighted Average Fair Value Per Share Outstanding, Beginning of fiscal year $ 0.17
Granted, Weighted Average Fair Value Per Share $ 0.16
Forfeited, Weighted Average Fair Value Per Share $ 0.32
Weighted Average Fair Value Per Share, Expired $ 0.15
Weighted Average Fair Value Per ShareOutstanding, End of fiscal year $ 0.21
Aggregate Intrinsic Value, Outstanding, Beginning of fiscal year $ 1,774,460
Granted, Aggregate Intrinsic Value 375,000
Forfeited,Aggregate Intrinsic Value (17,125)
Aggregate Intrinsic Value, Expired (400)
Aggregate Intrinsic Value, Outstanding, End of fiscal year $ 2,131,935
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6. STOCK BASED COMPENSATION (Details 2) (USD $)
3 Months Ended
Mar. 29, 2013
Stock Based Compensation Details 2
Number of options outstanding, Nonvested, Beginning of fiscal year 2,735,750
Granted, Nonvested 1,500,000
Forfeited, Nonvested (68,500)
Number of options outstanding, Nonvested, End of fiscal year 4,167,250
Weighted Average Exercise Price Per Share, Outstanding, Nonvested, Beginning of fiscal year $ 0.17
Granted, Weighted Average Exercise Price Per Share $ 0.2
Forfeited, Weighted Average Exercise Price Per Share $ 0.39
Weighted Average Exercise Price Per Share, Outstanding, Nonvested, End of fiscal year $ 0.28
Weighted Average Fair Value Per Share Outstanding, Nonvested, Beginning of fiscal year $ 0.15
Granted, Weighted Average Grant Date Fair Value $ 0.16
Forfeited, Weighted Average Grant Date Fair Value $ 0.32
Weighted Average Fair Value Per Share Outstanding, Nonvested, End of fiscal year $ 0.23
Aggregate Intrinsic Value, Outstanding, Nonvested, Beginning of fiscal year 1,483,612
Granted, Aggregate Intrinsic Value 375,000
Forfeited,Aggregate Intrinsic Value (17,125)
Aggregate Intrinsic Value, Outstanding, Nonvested, End of fiscal year 1,841,487
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6. STOCK BASED COMPENSATION (Details 3) (USD $)
Mar. 29, 2013
Stock Based Compensation Details 3
Number of Options, outstanding 5,509,500
Weighted Average Exercise Price Per Share, Outstanding $ 0.26
Weighted Average Remaining Contractual Life (years), outstanding 3 years 5 months 12 days
Aggregate Intrinsic Value, outstanding $ 1,136,193
Number of Options, Exercisable 1,342,250
Weighted Average Exercise Price Per Share, Exercisable $ 0.18
Weighted Average Remaining Contractual Life (years), Exercisable 1 year 11 months 23 days
Aggregate Intrinsic Value, Exercisable $ 94,380
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3. ACCOUNT PURCHASE AGREEMENT (Details Narrative) (USD $)
In Millions, unless otherwise specified
Mar. 29, 2013
Account Purchase Agreement Details Narrative
Current facility Maximum $ 15
Effective interest rate 6.25%
Interest payable Actual amount advanced or $3 million, whichever is greater.
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4. WORKERS' COMPENSATION INSURANCE AND RESERVES (Details Narrative) (USD $)
3 Months Ended
Mar. 29, 2013
Mar. 30, 2012
Dec. 28, 2012
Workers Compensation Insurance And Reserves Details Narrative
Collateral deposits (approximately) $ 1,900,000 $ 1,700,000
Workers' compensation expense for temporary worker $ 558,000 $ 656,000
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5. STOCKHOLDERS EQUITY (Details Narrative) (USD $)
3 Months Ended
Mar. 29, 2013
Mar. 30, 2012
Stockholders Equity Details Narrative
Change in fair value $ 55,000 $ 616,000
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2. EARNINGS PER SHARE (Details Narrative) (USD $)
Mar. 29, 2013
Dec. 28, 2012
Earnings Per Share Details Narrative
Total outstanding common stock equivalents $ 13,230,053 $ 13,524,803
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6. STOCK BASED COMPENSATION (Details Narrative) (USD $)
3 Months Ended
Mar. 29, 2013
Mar. 30, 2012
Stock Based Compensation Details Narrative
Share-based compensation expense relating to the vesting of issued stock options $ 50,000 $ 18,000
Unrecognized share-based compensation expense $ 525,000
Stock grant to employess for motivation vested (Years) 3 years 10 months 24 days
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