• Filing Date: 2013-08-09
  • Form Type: 10-Q
  • Description: Quarterly report
v2.4.0.8
Document and Entity Information
6 Months Ended
Jun. 28, 2013
Aug. 08, 2013
Document And Entity Information    
Entity Registrant Name Command Center, Inc.  
Entity Central Index Key 0001140102  
Document Type 10-Q  
Document Period End Date Jun. 28, 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 Q2  
Document Fiscal Year Focus 2013  
v2.4.0.8
Statement - Consolidated Condensed Balance Sheets (Unaudited) (USD $) (USD $)
Jun. 28, 2013
Dec. 28, 2012
Current assets    
Cash $ 1,298,181 $ 1,632,993
Restricted cash 0 21,295
Accounts receivable, net of allowance for doubtful accounts of $1,167,000 and $558,000 11,112,950 13,701,396
Prepaid expenses, deposits and other 387,974 409,547
Prepaid workers' compensation 123,218 22,852
Other receivables 17,608 17,618
Current portion of workers' compensation deposits 995,738 1,200,000
Total Current Assets 13,935,669 17,005,701
Property and equipment - net 415,725 609,772
Workers' compensation risk pool deposits, less current portion 1,302,518 506,196
Goodwill 3,306,786 3,306,786
Intangible assets - net 453,067 522,535
Total Assets 19,413,765 21,950,990
Current liabilities    
Accounts payable 546,149 722,150
Checks issued and payable 392,684 511,105
Account purchase agreement facility 7,569,224 9,051,999
Other current liabilities 356,653 507,122
Contingent liability 0 322,874
Accrued wages and benefits 1,324,441 1,713,480
Current portion of workers' compensation premiums and claims liability 1,277,929 2,005,579
Total Current Liabilities 11,467,080 14,834,309
Long-term liabilities    
Warrant liabilities 502,069 599,473
Workers compensation claims liability, less current portion 2,540,390 2,510,687
Total liabilities 14,509,539 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 and 59,611,242 shares issued and outstanding, respectively 59,611 59,611
Additional paid-in capital 56,046,303 55,633,377
Accumulated deficit (51,201,688) (51,686,467)
Total Stockholders' Equity 4,904,226 4,006,521
Total Liabilities and Stockholders' Equity $ 19,413,765 $ 21,950,990
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Statement - Consolidated Condensed Balance Sheets (USD $) (Parenthetical) (USD $)
Jun. 28, 2013
Dec. 28, 2012
Statement of Financial Position [Abstract]    
Allowance for bad debt $ 1,167,000 $ 558,000
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 6 Months Ended
Jun. 28, 2013
Jun. 29, 2012
Jun. 28, 2013
Jun. 29, 2012
Income Statement [Abstract]        
Revenue $ 23,294,561 $ 24,269,530 $ 43,199,279 $ 43,363,211
Cost of staffing services 17,412,312 18,256,277 32,097,439 32,708,400
Gross Profit 5,882,249 6,013,253 11,101,840 10,654,811
Selling, general and administrative expenses 5,204,200 5,066,979 10,158,030 9,386,315
Depreciation and amortization 128,038 82,937 217,049 203,400
Income from operations 550,011 863,337 726,761 1,065,096
Interest expense and other financing expense (119,086) (191,792) (339,385) (338,864)
Change in fair value of derivative liability 41,648 461,538 97,404 (154,645)
Net income before income taxes 472,573 1,133,083 484,779 571,587
Provision for income taxes 0 (290,500) 0 (290,500)
Net Income $ 472,573 $ 842,583 $ 484,779 $ 281,087
Earnings per share:        
Basic $ 0.01 $ 0.01 $ 0.01 $ 0.00
Diluted $ 0.01 $ 0.01 $ 0.01 $ 0.00
Weighted average shares outstanding:        
Basic 59,611,242 59,146,678 59,611,242 59,095,732
Diluted 62,484,459 63,985,995 62,794,132 63,720,922
v2.4.0.8
Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $)
6 Months Ended
Jun. 28, 2013
Jun. 29, 2012
Cash flows from operating activities:    
Net income $ 484,779 $ 281,087
Adjustments to reconcile net income to net cash used by operations:    
Depreciation and amortization 217,049 203,400
Change in allowance for doubtful accounts 648,299 (76,574)
Change in fair value of derivative liabilities (97,404) 154,645
Common stock issued for interest and services 0 26,880
Stock based compensation 90,052 52,013
Change in assets and liabilities:    
Accounts receivable - trade 1,940,147 (3,053,377)
Restricted cash 21,295 (47,055)
Prepaid workers' compensation (100,366) (50,771)
Other receivables 10 57
Prepaid expenses, deposits and other 21,573 (155,652)
Loss on disposition of property and equipment 34,563 0
Deferred tax asset 0 290,500
Workers' compensation risk pool deposits (592,061) (433,607)
Accounts payable (176,001) (295,563)
Checks issued and payable (118,421) 179,299
Other current liabilities (150,469) 8,180
Accrued wages and benefits (389,039) 739,402
Workers' compensation premiums and claims liability (697,946) 835,953
Net cash provided (used) by operating activities 1,136,060 (1,341,183)
Cash flows from investing activities:    
Purchases of property and equipment (18,097) (98,607)
Sale of property and equipment 30,000 0
Cash paid for acquisition of subsidiary 0 (150,000)
Net cash provided (used) by investing activities 11,903 (248,607)
Cash flows from financing activities:    
Net proceeds from account purchase agreement facility (1,482,775) 949,091
Payments on notes payable 0 (125,000)
Net cash (used) provided by financing activities (1,482,775) 824,091
Net decrease in cash (334,812) (765,699)
Cash, beginning of period 1,632,993 1,131,296
Cash, end of period 1,298,181 365,597
Non-cash investing and financing activities    
Common stock issued for subsidiary 0 411,101
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 215,313 254,063
Income taxes paid $ 0 $ 0
v2.4.0.8
Disclosure - 1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
6 Months Ended
Jun. 28, 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 June 28, 2013 and December 28, 2012, we held deposits in excess of FDIC insured limits of approximately $855,000 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 June 28, 2013 and December 28, 2012, and the fair value calculation input hierarchy level that we have determined applies to each asset and liability category.

 

  June 28, 2013   December 28, 2012   Input Hierarchy Level
Recurring:          
Warrant liabilities  $    502,069    $         599,473   Level 2
Contingent liability  $           -    $         322,874   Level 2

 

Recent Accounting Pronouncements:  Other accounting standards that have been issued by the Financial Accounting Standards Board 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 June 28, 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
6 Months Ended
Jun. 28, 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 June 28, 2013 and June 29, 2012 were 10,184,000 and 13,510,803, respectively.

 

Diluted common shares outstanding were calculated as follows: 

 

   Thirteen Weeks Ended  Twenty-six Weeks Ended
   June 28, 2013  June 29, 2012  June 28, 2013  June 29, 2012
Weighted average number of common shares used in basic net income per common share   59,611,242    59,146,678    59,611,242    59,095,732 
Dilutive effects of outstanding stock warrants   2,611,636    4,126,503    2,796,627    3,979,415 
Dilutive effects of vested stock options   261,581    712,814    386,263    645,775 
Weighted average number of common shares used in diluted net income per common share   62,484,459    63,985,995    62,794,132    63,720,922 
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3. ACCOUNT PURCHASE AGREEMENT
6 Months Ended
Jun. 28, 2013
Notes to Financial Statements  
Note 3 - ACCOUNT PURCHASE AGREEMENT

At June 28, 2013, net accounts receivable sold pursuant to our account purchase agreement were approximately $7.6 million, and the facility maximum was $14 million. The effective interest rate pursuant to this agreement was 3.2% 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 June 28, 2013, we were in compliance with this covenant.

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4. WORKERS' COMPENSATION INSURANCE AND RESERVES
6 Months Ended
Jun. 28, 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 injuries arising during the policy year. For workers' compensation claims originating in Washington, North Dakota and New York, we pay workers' compensation insurance premiums and obtain full coverage under state government administered programs. Accordingly, in these jurisdictions our consolidated financial statements reflect only the mandated workers' compensation insurance premium liability for workers' compensation claims.

 

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 June 28, 2013 and December 28, 2012 we had collateral deposits of approximately $2.3 million and $1.7 million, respectively.

 

Workers' compensation expense for temporary workers is recorded as a component of our cost of staffing services and totaled approximately $1.7 million and $1.9 million for the period ended June 28, 2013 and June 29, 2012, respectively.

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5. STOCKHOLDERS EQUITY
6 Months Ended
Jun. 28, 2013
Notes to Financial Statements  
Note 5 - STOCKHOLDERS EQUITY

Issuance of Common Stock: There were no shares issued during the thirteen and twenty-six weeks ended June 28, 2013. There are approximately 1.3 million shares to be issued related to the acquisition of assets of DR Services of Louisiana, LLC as part of a contingent fee calculation. The shares are to be issued to DR Services of Louisiana, LLC upon final approval by our Board of Directors. Due to the pending issuance, we reclassified approximately $323,000 recorded as a contingent liability to additional paid-in capital in stockholders' equity as of June 28, 2013 as the contingent fee was fully earned.

 

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

 

  June 28, 2013   December 28, 2012
Warrants outstanding at beginning of period 11,887,803   12,137,803
Expired  (6,312,803)    (250,000)
Warrants outstanding at end of period 5,575,000   11,887,803

 

A detail of warrants outstanding June 28, 2013 is as follows:

 

  Number of Warrants   Expiration Date
Exercisable at $0.08 per share 4,200,000   4/1/2014
Exercisable at between $0.50 and $1.00 per share 1,375,000   4/15/14 to 4/15/15
  5,575,000    

 

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:

 

  June 28, 2013   December 28, 2012
Expected terms (years) 0.8   1.3
Expected volatility 103.9%   95.2%
Dividend yield 0.0%   0.0%
Risk-free rate 0.2%   0.2%

 

The change in fair value amounted to approximately $97,000 and $(155,000) for the twenty-six weeks ended June 28, 2013 and June 29, 2012, respectively. These changes are included in the line item Change in fair value of derivative liabilities in our Statements of Income.

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6. STOCK BASED COMPENSATION
6 Months Ended
Jun. 28, 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 Chief Executive Officer stock options for 1.5 million shares 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. Pursuant to previous awards, there were 1,695,500 options vested at June 28, 2013 and 1,373,000 options vested at June 29, 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: 

 

  June 28, 2013   June 29, 2012
Expected term (years) 5.0   5.0
Expected volatility 114.1%   116.9%
Dividend yield 0.0%   0.0%
Risk-free rate 0.8%   0.8%

 

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

 

    Number of Shares Under Option   Weighted Average Exercise Price Per Share   Weighted Average Grant Date Fair Value   Aggregate Intrinsic Value
Outstanding, December 28, 2012 4,083,000   $           0.20   $          0.17   $   1,774,460
  Granted 1,500,000   0.20   0.16   375,000
  Forfeited  (68,500)   0.39   0.32    (17,125)
  Expired  (5,000)   0.17   0.15    (400)
Outstanding, March 29, 2013 5,509,500   0.26   0.21     2,131,935
  Forfeited  (563,500)   0.28   0.22    (107,065)
  Expired  (337,000)   0.18   0.15    (1,740)
Outstanding, June 28, 2013 4,609,000   0.26    0.21    $   2,023,130

  

The following table summarizes our nonvested stock options outstanding at December 28, 2012, and changes during the period ended June 28, 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
  Granted 1,500,000   0.20   0.16   375,000
  Forfeited  (68,500)   0.39   0.32    (17,125)
Nonvested, March 29, 2013 4,167,250   0.28   0.23        1,841,487
  Vested  (690,250)   0.30   0.25    (131,147)
  Forfeited  (563,500)   0.28   0.22    (107,065)
Nonvested, June 28, 2013 2,913,500   0.28    0.22    $    1,603,275

 

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 June 28, 2013:

 

   Number of Options    Weighted Average Exercise Price Per Share    Weighted Average Remaining Contractual Life (years)    Aggregate Intrinsic Value  
Outstanding          4,609,000   $           0.26   3.36   $     826,945
Exercisable          1,695,500   0.23   2.19   98,570

 

 We recognized share-based compensation expense relating to the vesting of issued stock options of approximately $90,000 and $52,000 for the periods ended June 28, 2013 and June 29, 2012, respectively. As of June 28, 2013, there was unrecognized share-based compensation expense totaling approximately $504,000 relating to non-vested options that will be recognized over the next 3.7 years.

v2.4.0.8
7. COMMITMENTS AND CONTINGENCIES
6 Months Ended
Jun. 28, 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. The administrative law judge ordered Trident Seafoods and its insurer Liberty Mutual to pay workers compensation benefits to the employee following a serious injury. Trident Seafoods alleges we have a contractual duty to pay the workers’ compensation benefits for the injured “borrowed” employee. We believe the claims asserted by Trident are unfounded and we are vigorously defending this case. This case is presently in the pretrial discovery phase.

v2.4.0.8
1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)
6 Months Ended
Jun. 28, 2013
Change in fair value of warrant liability  
Basis of Presentation

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 June 28, 2013 and December 28, 2012, we held deposits in excess of FDIC insured limits of approximately $855,000 and $705,000, respectively.

Fair Value Measurements

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 June 28, 2013 and December 28, 2012, and the fair value calculation input hierarchy level that we have determined applies to each asset and liability category.

 

  June 28, 2013   December 28, 2012   Input Hierarchy Level
Recurring:          
Warrant liabilities  $    502,069    $         599,473   Level 2
Contingent liability  $           -    $         322,874   Level 2
Recent Accounting Pronouncements

Other accounting standards that have been issued by the Financial Accounting Standards Board 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 June 28, 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.

v2.4.0.8
1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)
6 Months Ended
Jun. 28, 2013
Workers' compensation expense for temporary worker  
Schedule of fair value of financial instruments
  June 28, 2013   December 28, 2012   Input Hierarchy Level
Recurring:          
Warrant liabilities  $    502,069    $         599,473   Level 2
Contingent liability  $           -    $         322,874   Level 2
v2.4.0.8
2. EARNINGS PER SHARE (Tables)
6 Months Ended
Jun. 28, 2013
Earnings Per Share Tables  
Schedule of earnings per share
   Thirteen Weeks Ended  Twenty-six Weeks Ended
   June 28, 2013  June 29, 2012  June 28, 2013  June 29, 2012
Weighted average number of common shares used in basic net income per common share   59,611,242    59,146,678    59,611,242    59,095,732 
Dilutive effects of outstanding stock warrants   2,611,636    4,126,503    2,796,627    3,979,415 
Dilutive effects of vested stock options   261,581    712,814    386,263    645,775 
Weighted average number of common shares used in diluted net income per common share   62,484,459    63,985,995    62,794,132    63,720,922 
v2.4.0.8
5. STOCKHOLDERS EQUITY (Tables)
6 Months Ended
Jun. 28, 2013
Stockholders Equity Tables  
Stock Warrants

The following warrants for our common stock were issued and outstanding on June 28, 2013 and December 28, 2012, respectively:

 

  June 28, 2013   December 28, 2012
Warrants outstanding at beginning of period 11,887,803   12,137,803
Expired  (6,312,803)    (250,000)
Warrants outstanding at end of period 5,575,000   11,887,803

 

A detail of warrants outstanding June 28, 2013 is as follows:

 

  Number of Warrants   Expiration Date
Exercisable at $0.08 per share 4,200,000   4/1/2014
Exercisable at between $0.50 and $1.00 per share 1,375,000   4/15/14 to 4/15/15
  5,575,000    
Warrant fair value assumptions
  June 28, 2013   December 28, 2012
Expected terms (years) 0.8   1.3
Expected volatility 103.9%   95.2%
Dividend yield 0.0%   0.0%
Risk-free rate 0.2%   0.2%
v2.4.0.8
6. STOCK BASED COMPENSATION (Tables)
6 Months Ended
Jun. 28, 2013
Stock Based Compensation Tables  
Fair Value Assumption

 

  June 28, 2013   June 29, 2012
Expected term (years) 5.0   5.0
Expected volatility 114.1%   116.9%
Dividend yield 0.0%   0.0%
Risk-free rate 0.8%   0.8%

Stock based Compensation

    Number of Shares Under Option   Weighted Average Exercise Price Per Share   Weighted Average Grant Date Fair Value   Aggregate Intrinsic Value
Outstanding, December 28, 2012 4,083,000   $           0.20   $          0.17   $   1,774,460
  Granted 1,500,000   0.20   0.16   375,000
  Forfeited  (68,500)   0.39   0.32    (17,125)
  Expired  (5,000)   0.17   0.15    (400)
Outstanding, March 29, 2013 5,509,500   0.26   0.21     2,131,935
  Forfeited  (563,500)   0.28   0.22    (107,065)
  Expired  (337,000)   0.18   0.15    (1,740)
Outstanding, June 28, 2013 4,609,000   0.26    0.21    $   2,023,130

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
  Granted 1,500,000   0.20   0.16   375,000
  Forfeited  (68,500)   0.39   0.32    (17,125)
Nonvested, March 29, 2013 4,167,250   0.28   0.23        1,841,487
  Vested  (690,250)   0.30   0.25    (131,147)
  Forfeited  (563,500)   0.28   0.22    (107,065)
Nonvested, June 28, 2013 2,913,500   0.28    0.22    $    1,603,275

 

Intrinsic value

   Number of Options    Weighted Average Exercise Price Per Share    Weighted Average Remaining Contractual Life (years)    Aggregate Intrinsic Value  
Outstanding          4,609,000   $           0.26   3.36   $     826,945
Exercisable          1,695,500   0.23   2.19   98,570

 

v2.4.0.8
1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICES (Details) (USD $)
Jun. 28, 2013
Dec. 28, 2012
Recurring:    
Warrant Liabilities (Level 2) $ 502,069 $ 599,473
Contingent liability (Level 2)    $ 322,874
v2.4.0.8
2. EARNINGS PER SHARE (Details)
3 Months Ended 6 Months Ended
Jun. 28, 2013
Jun. 29, 2012
Jun. 28, 2013
Jun. 29, 2012
Earnings Per Share Details        
Weighted average number of common shares used in basic net income (loss) per common share 59,611,242 59,146,678 59,611,242 59,095,732
Dilutive effects of outstanding stock warrants 2,611,636 4,126,503 2,796,627 3,979,415
Dilutive effects of vested stock options 261,581 712,814 386,263 645,775
Weighted average number of common shares used in diluted net income (loss) per common share 62,484,459 63,985,995 62,794,132 63,720,922
v2.4.0.8
5. STOCKHOLDERS' EQUITY (Details)
Jun. 28, 2013
Dec. 28, 2012
Stockholders Equity Details    
Warrants outstanding at beginning of period 11,887,803 12,137,803
Expired (6,312,803) (250,000)
Warrants outstanding at end of period 5,575,000 11,887,803
v2.4.0.8
5. STOCKHOLDERS' EQUITY (Details 1)
Jun. 28, 2013
Number of warrants 5,575,000
Exercisable at $0.08 per share [Member]
 
Number of warrants 4,200,000
Expiration Date of waraants 4/1/2014
Exercisable at between $0.50 and $1.00 per share [Member]
 
Number of warrants 1,375,000
Expiration Date of waraants 4/15/14 to 4/15/15
v2.4.0.8
5. STOCKHOLDERS' EQUITY (Details 2)
Jun. 28, 2013
Dec. 28, 2012
Stockholders Equity Details 2    
Expected terms (years) 9 months 18 days 1 year 3 months 18 days
Expected volatility 103.90% 95.20%
Dividend yield 0.00% 0.00%
Risk-free rate 0.20% 0.20%
v2.4.0.8
6. STOCK BASED COMPENSATION (Details )
6 Months Ended
Jun. 28, 2013
Jun. 29, 2012
Stock Based Compensation Details    
Expected term (years) 5 years 5 years
Expected volatility 114.10% 116.90%
Dividend yield 0.00% 0.00%
Risk-free rate 0.80% 0.80%
v2.4.0.8
6. STOCK BASED COMPENSATION (Details 1) (USD $)
3 Months Ended
Jun. 28, 2013
Mar. 29, 2013
Note 5 - WORKERS' COMPENSATION INSURANCE AND RESERVES    
Number of Options Outstanding, Beginning Balance 5,509,500 4,083,000
Granted, option    1,500,000
Forfeited, option (563,500) (68,500)
Expired, Option (337,000) (5,000)
Number of Options Outstanding, Ending Balance 4,609,000 5,509,500
Weighted Average Exercise Price Per Share, Outstanding, Beginning $ 0.26 $ 0.20
Granted, Weighted Average Exercise Price Per Share   $ 0.20
Forfeited, Weighted Average Exercise Price Per Share $ 0.28 $ 0.39
Weighted Average Exercise Price Per Share, Expired $ 0.18 $ 0.17
Weighted Average Exercise Price Per Share, Outstanding, Ending $ 0.26 $ 0.26
Weighted Average Fair Value Per Share Outstanding, Beginning $ 0.21 $ 0.17
Granted, Weighted Average Fair Value Per Share   $ 0.16
Forfeited, Weighted Average Fair Value Per Share $ 0.22 $ 0.32
Weighted Average Fair Value Per Share, Expired $ 0.15 $ 0.15
Weighted Average Fair Value Per ShareOutstanding, Ending $ 0.21 $ 0.21
Aggregate Intrinsic Value, Outstanding, Beginning $ 2,131,935 $ 1,774,460
Granted, Aggregate Intrinsic Value   375,000
Forfeited,Aggregate Intrinsic Value (107,065) (17,125)
Aggregate Intrinsic Value, Expired (1,740) (400)
Aggregate Intrinsic Value, Outstanding, Ending $ 2,023,130 $ 2,131,935
v2.4.0.8
6. STOCK BASED COMPENSATION (Details 2) (USD $)
3 Months Ended
Jun. 28, 2013
Mar. 29, 2013
Stock Based Compensation Details 2    
Number of Nonvested Options Outstanding, Beginning Balance 4,167,250 2,735,750
Granted, Nonvested   1,500,000
Vested, Nonvested (690,250)  
Forfeited, Nonvested (563,500) (68,500)
Number of Nonvested Options Outstanding, Ending Balance 2,913,500 4,167,250
Weighted Average Exercise Price Per Share, Outstanding, Nonvested, Beginning $ 0.28 $ 0.17
Granted, Weighted Average Exercise Price Per Share   $ 0.20
Weighted Average Exercise Price Per Share, Vested $ 0.30  
Forfeited, Weighted Average Exercise Price Per Share $ 0.28 $ 0.39
Weighted Average Exercise Price Per Share, Outstanding, Nonvested, Ending $ 0.28 $ 0.28
Weighted Average Fair Value Per Share Outstanding, Nonvested, Beginning $ 0.23 $ 0.15
Granted, Weighted Average Grant Date Fair Value   $ 0.16
Weighted Average Grant Date Fair Value, Vested $ 0.25  
Forfeited, Weighted Average Grant Date Fair Value $ 0.22 $ 0.32
Weighted Average Fair Value Per Share Outstanding, Nonvested, Ending $ 0.22 $ 0.23
Aggregate Intrinsic Value, Outstanding, Nonvested, Beginning 1,841,487 1,483,612
Granted, Aggregate Intrinsic Value   375,000
Aggregate Intrinsic Value, Vested (131,147)  
Forfeited,Aggregate Intrinsic Value (107,065) (17,125)
Aggregate Intrinsic Value, Outstanding, Nonvested, Ending 1,603,275 1,841,487
v2.4.0.8
6. STOCK BASED COMPENSATION (Details 3) (USD $)
Jun. 28, 2013
Stock Based Compensation Details 3  
Number of Options, outstanding 4,609,000
Weighted Average Exercise Price Per Share, Outstanding $ 0.26
Weighted Average Remaining Contractual Life (years), outstanding 3 years 4 months 10 days
Aggregate Intrinsic Value, outstanding $ 826,945
Number of Options, Exercisable 1,695,500
Weighted Average Exercise Price Per Share, Exercisable $ 0.23
Weighted Average Remaining Contractual Life (years), Exercisable 2 years 2 months 8 days
Aggregate Intrinsic Value, Exercisable $ 98,570
v2.4.0.8
3. ACCOUNT PURCHASE AGREEMENT (Details Narrative) (USD $)
In Millions, unless otherwise specified
Jun. 28, 2013
AccountPurchaseAgreementDetailsNarrativeAbstract  
Current facility Maximum $ 14
Effective interest rate 3.20%
Interest payable Actual amount advanced or $3 million, whichever is greater.
v2.4.0.8
4. WORKERS' COMPENSATION INSURANCE AND RESERVES (Details Narrative) (USD $)
6 Months Ended
Jun. 28, 2013
Jun. 29, 2012
Dec. 28, 2012
Workers Compensation Insurance And Reserves Details Narrative      
Collateral deposits (approximately) $ 2,300,000   $ 1,700,000
Workers' compensation expense for temporary worker $ 1,700,000 $ 1,900,000  
v2.4.0.8
2. EARNINGS PER SHARE (Details Narrative) (USD $)
Jun. 28, 2013
Jun. 29, 2012
Earnings Per Share Details Narrative    
Total outstanding common stock equivalents $ 10,184,000 $ 13,510,803
v2.4.0.8
5. STOCKHOLDERS EQUITY (Details Narrative) (USD $)
6 Months Ended
Jun. 28, 2013
Jun. 29, 2012
Stockholders Equity Details Narrative    
Change in fair value $ 97,000 $ (155,000)
v2.4.0.8
6. STOCK BASED COMPENSATION (Details Narrative) (USD $)
6 Months Ended
Jun. 28, 2013
Jun. 29, 2012
Stock Based Compensation Details Narrative    
Options vested 1,695,500 1,373,000
Share-based compensation expense relating to the vesting of issued stock options $ 90,000 $ 52,000
Unrecognized share-based compensation expense $ 504,000  
Unrecognized share-based compensation expense, period of recognition 3 years 8 months 12 days