x
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QUARTERLY
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
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¨
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TRANSITION
REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE
ACT
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COMMAND CENTER,
INC.
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(Exact
name of issuer as specified in its
charter)
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Washington
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91-2079472
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(State
or other jurisdiction of incorporation or organization)
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(IRS
Employer Identification
Number)
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3773
West Fifth Avenue, Post Falls, Idaho 83854
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(Address
of principal executive
offices)
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(208)
773-7450
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(Issuer’s
telephone number)
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N.A.
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(Former
name, former address and former fiscal year, if changed since last
report)
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Large
accelerated filer ¨
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Accelerated
filer ¨
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||
Non-accelerated
filer ¨
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Smaller
reporting company x
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(Do
not check if registrant)
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Page
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PART
I
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Item
1. Financial Statements (unaudited)
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Management
Statement
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10-Q
Page 3
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Balance
Sheet at June 26, 2009 and December 26, 2008
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10-Q
Page 4
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Statements
of Operations for the thirteen week periods and the Twenty-six week
periods ended June 26, 2009 and June 27, 2008
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10-Q
Page 5
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Statements
of Cash Flows for the thirteen week periods ended June 26, 2009 and June
26, 2008
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10-Q
Page 6
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Notes
to Financial Statements
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10-Q
Page 7
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Item
2. Management’s Discussion and Analysis of Financial Condition and Results
of Operations
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10-Q
Page 14
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Item
3. Quantitative and Qualitative Disclosures about Market
Risk
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10-Q
Page 17
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Item
4. Controls and Procedures
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10-Q
Page 17
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Part
II
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Item
2. Unregistered Sales of Equity Securities
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10-Q
Page 18
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Item
6. Exhibits and Reports on Form 8-K
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10-Q
Page 19
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Signatures
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10-Q
Page 19
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Certifications
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10-Q
Page 20
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Command Center, Inc.
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||||||||
Balance Sheet
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||||||||
June 26, 2009
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December 26, 2008
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|||||||
Unaudited
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||||||||
Assets
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||||||||
CURRENT
ASSETS:
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||||||||
Cash
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$ | 305,817 | $ | 2,174,960 | ||||
Accounts
receivable trade, net of allowance for bad debts of $500,000 at March 27,
2009 and December 26, 2008
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4,591,973 | 5,223,113 | ||||||
Other
receivables - current
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284,244 | 284,244 | ||||||
Prepaid
expenses, deposits, and other
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825,445 | 975,909 | ||||||
Current
portion of workers' compensation risk pool deposits
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1,800,000 | 1,500,000 | ||||||
Total
current assets
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7,807,479 | 10,158,226 | ||||||
PROPERTY
AND EQUIPMENT, NET
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2,210,340 | 2,589,201 | ||||||
OTHER
ASSETS:
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||||||||
Workers'
compensation risk pool deposits
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2,167,647 | 2,729,587 | ||||||
Goodwill
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2,500,000 | 2,500,000 | ||||||
Intangible
assets - net
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413,505 | 503,606 | ||||||
Total
other assets
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5,081,152 | 5,733,193 | ||||||
$ | 15,098,971 | $ | 18,480,620 | |||||
Liabilities
and Stockholders' Equity
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||||||||
CURRENT
LIABILITIES:
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||||||||
Accounts
payable
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$ | 922,335 | $ | 1,080,735 | ||||
Line
of credit facility
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2,774,092 | 2,579,313 | ||||||
Accrued
wages and benefits
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802,361 | 981,293 | ||||||
Other
current liabilities
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504,934 | 195,566 | ||||||
Current
portion of note payable
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9,520 | 9,520 | ||||||
Short-term
notes payable
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1,291,680 | 1,868,748 | ||||||
Workers'
compensation and risk pool deposits payable
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629,054 | 531,062 | ||||||
Warrant
liability
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336,000 | - | ||||||
Current
portion of workers' compensation claims liability
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1,800,000 | 1,500,000 | ||||||
Total
current liabilities
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9,069,976 | 8,746,237 | ||||||
LONG-TERM
LIABILITIES:
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||||||||
Note
payable, less current portion
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71,447 | 76,135 | ||||||
Finance
obligation
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1,125,000 | 1,125,000 | ||||||
Workers'
compensation claims liability, less current portion
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2,800,000 | 2,986,372 | ||||||
Total
long-term liabilities
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3,996,447 | 4,187,507 | ||||||
COMMITMENTS
AND CONTINGENCIES (Note 10)
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||||||||
STOCKHOLDERS'
EQUITY:
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||||||||
Preferred
stock - 5,000,000 shares, $0.001 par value, authorized; no shares issued
and outstanding
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- | - | ||||||
Common
stock - 100,000,000 shares, $0.001 par value, authorized; 37,014,798 and
36,290,053 shares issued and outstanding, respectively
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37,015 | 36,290 | ||||||
Additional
paid-in capital
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51,425,623 | 51,370,627 | ||||||
Accumulated
deficit
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(49,430,090 | ) | (45,860,041 | ) | ||||
Total
stockholders' equity
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2,032,548 | 5,546,876 | ||||||
$ | 15,098,971 | $ | 18,480,620 |
Command Center, Inc. | ||||||||||||||||
Statements of Operations (Unaudited) | ||||||||||||||||
Thirteen
Weeks Ended
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Twenty-six
Weeks Ended
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|||||||||||||||
June
26
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June
27
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June
26
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June
27
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|||||||||||||
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2009
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2008
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2009
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2008
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||||||||||||
REVENUE:
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||||||||||||||||
Revenue
from services
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$ | 12,365,592 | $ | 21,092,331 | $ | 25,158,658 | $ | 40,927,729 | ||||||||
Other
income
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25,781 | 154,045 | 56,019 | 255,735 | ||||||||||||
12,391,373 | 21,246,376 | 25,214,677 | 41,183,464 | |||||||||||||
COST OF SERVICES:
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||||||||||||||||
Temporary
worker costs
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8,486,143 | 14,261,352 | 17,379,577 | 27,567,943 | ||||||||||||
Workers'
compensation costs
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1,018,654 | 2,015,229 | 1,707,141 | 3,768,923 | ||||||||||||
Other
direct costs of services
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4,409 | 19,542 | 29,131 | 27,792 | ||||||||||||
9,509,206 | 16,296,123 | 19,115,849 | 31,364,658 | |||||||||||||
GROSS
PROFIT
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2,882,167 | 4,950,253 | 6,098,828 | 9,818,806 | ||||||||||||
SELLING,
GENERAL, AND ADMINISTRATIVE EXPENSES:
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||||||||||||||||
Personnel
costs
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1,895,150 | 3,288,251 | 4,178,887 | 7,302,186 | ||||||||||||
Selling
and marketing expenses
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9,527 | 218,073 | 69,811 | 524,098 | ||||||||||||
Transportation
and travel
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289,317 | 702,064 | 569,341 | 1,336,583 | ||||||||||||
Office
expenses
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82,678 | 136,733 | 176,210 | 366,879 | ||||||||||||
Legal,
professional and consulting
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95,484 | 136,660 | 414,376 | 548,425 | ||||||||||||
Depreciation
and amortization
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204,768 | 215,030 | 415,547 | 428,826 | ||||||||||||
Rents
and leases
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396,153 | 691,291 | 1,224,978 | 1,293,207 | ||||||||||||
Other
expenses
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873,732 | 818,074 | 1,888,581 | 1,716,418 | ||||||||||||
3,846,809 | 6,206,176 | 8,937,731 | 13,516,622 | |||||||||||||
LOSS
FROM OPERATIONS
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(964,642 | ) | (1,255,923 | ) | (2,838,903 | ) | (3,697,816 | ) | ||||||||
OTHER
INCOME (EXPENSE):
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||||||||||||||||
Interest
expense
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(120,824 | ) | (141,254 | ) | (334,317 | ) | (292,069 | ) | ||||||||
Loss
on extinguishment of debt
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(518,251 | ) | - | (518,251 | ) | - | ||||||||||
Change
in fair value of warrant liability
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126,000 | - | 126,000 | - | ||||||||||||
Interest
and other income (expenses)
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(4,550 | ) | (5,278 | ) | (4,576 | ) | 656 | |||||||||
(517,625 | ) | (146,532 | ) | (731,144 | ) | (291,413 | ) | |||||||||
BASIC
AND DILUTED NET LOSS
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$ | (1,482,267 | ) | $ | (1,402,455 | ) | $ | (3,570,047 | ) | $ | (3,989,229 | ) | ||||
BASIC
AND DILUTED LOSS PER SHARE
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$ | (0.04 | ) | $ | (0.04 | ) | $ | (0.10 | ) | $ | (0.11 | ) | ||||
WEIGHTED
AVERAGE COMMON SHARES OUTSTANDING
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36,488,679 | 36,097,086 | 36,398,337 | 35,911,070 |
Command
Center, Inc.
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||||||||
Statements
of Cash Flows (Unaudited)
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||||||||
Twenty-six Weeks Ended
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||||||||
June 26, 2009
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June 27, 2008
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|||||||
Increase
(Decrease) in Cash
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||||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
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||||||||
Net
loss
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$ | (3,570,047 | ) | $ | (3,989,229 | ) | ||
Adjustments
to reconcile net loss to net cash used by operating
activities:
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||||||||
Depreciation
and amortization
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415,547 | 429,538 | ||||||
Write-off
of fixed assets
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53,415 | - | ||||||
Loss
on debt extinguishment
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518,251 | - | ||||||
Amortization
of note discount
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75,000 | - | ||||||
Change
in fair value of warrant liability
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(126,000 | ) | - | |||||
Closed
stores reserve
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300,000 | - | ||||||
Common
stock issued for rent compensation and consulting
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55,720 | 123,000 | ||||||
Changes
in assets and liabilities:
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||||||||
Accounts
receivable - trade
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631,140 | 421,469 | ||||||
Other
current liabilities
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76,048 | (171,640 | ) | |||||
Prepaid
expenses, deposits and other
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150,464 | (624,144 | ) | |||||
Workers'
compensation risk pool deposits
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261,940 | (1,814,148 | ) | |||||
Accounts
payable
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(158,400 | ) | (10,204 | ) | ||||
Accrued
wages & benefits
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(178,931 | ) | (228,589 | ) | ||||
Workers'
compensation insurance payable
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97,992 | 3,046,443 | ||||||
Workers'
compensation claims liability
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113,628 | 1,379,983 | ||||||
Net
cash used by operating activities
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(1,284,233 | ) | (1,437,521 | ) | ||||
CASH
FLOWS FROM INVESTING ACTIVITIES:
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||||||||
Purchases
of property and equipment
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- | (73,715 | ) | |||||
Collections
on note receivable
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- | 74,209 | ||||||
Net
cash provided by investing activities
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- | 494 | ||||||
CASH
FLOWS FROM FINANCING ACTIVITIES:
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||||||||
Advances
(payments) on line of credit facility, net
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194,778 | (211,285 | ) | |||||
Proceeds
received from short-term note
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- | 1,740,000 | ||||||
Proceeds
allocated to warrants issued in connection with short-term
note
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- | 260,000 | ||||||
Collection
of common stock subscriptions
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- | 1,878,000 | ||||||
Costs
of common stock offering and registration
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- | (163,166 | ) | |||||
Principal
payments on notes payable
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(779,668 | ) | (139,455 | ) | ||||
Net
cash provided (used) by financing activities
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(584,910 | ) | 3,364,094 | |||||
NET
INCREASE (DECREASE) IN CASH
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(1,869,143 | ) | 1,927,067 | |||||
CASH,
BEGINNING OF PERIOD
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2,174,960 | 580,918 | ||||||
CASH,
END OF PERIOD
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$ | 305,817 | $ | 2,507,985 | ||||
Noncash
investing and financing activities: Fair value of warrants
issued in connection with debt extinguishment
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$ | 446,000 | $ | - |
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·
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541,668
shares as interest on our finance obligation for our headquarters office
building. Aggregate value of the shares issued was
$37,400.
|
|
·
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75,000
shares for services and additional compensation. Aggregate
value of the shares issued was
$7,560.
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2009
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$ | 549,300 | ||
2010
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813,343 | |||
2011
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345,599 | |||
2012
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107,043 | |||
2013
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22,540 |
Part
I, Item 2.
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Management’s
Discussion and Analysis or Plan of
Operations.
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2009
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2008
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|||||||||||||||
REVENUE:
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$ | 12,391,373 | $ | 21,246,376 | ||||||||||||
COST
OF SERVICES:
|
||||||||||||||||
Temporary
worker costs
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8,486,143 | 68.5 | % | 14,261,352 | 67.1 | % | ||||||||||
Workers'
compensation costs
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1,018,654 | 8.2 | % | 2,015,229 | 9.5 | % | ||||||||||
Other
direct costs of services
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4,409 | 0.0 | % | 19,542 | 0.1 | % | ||||||||||
9,509,206 | 76.7 | % | 16,296,123 | 76.7 | % | |||||||||||
GROSS
PROFIT
|
2,882,167 | 23.3 | % | 4,950,253 | 23.3 | % | ||||||||||
SELLING,
GENERAL, AND
|
||||||||||||||||
ADMINISTRATIVE
EXPENSES:
|
||||||||||||||||
Personnel
costs
|
1,895,150 | 15.3 | % | 3,288,251 | 15.5 | % | ||||||||||
Selling
and marketing expenses
|
9,527 | 0.1 | % | 218,073 | 1.0 | % | ||||||||||
Transportation
and travel
|
289,317 | 2.3 | % | 702,064 | 3.3 | % | ||||||||||
Office
expenses
|
82,678 | 0.7 | % | 136,733 | 0.6 | % | ||||||||||
Legal,
professional and consulting
|
95,484 | 0.8 | % | 136,660 | 0.6 | % | ||||||||||
Depreciation
and amortization
|
204,768 | 1.7 | % | 215,030 | 1.0 | % | ||||||||||
Rents
and leases
|
396,153 | 3.2 | % | 691,291 | 3.3 | % | ||||||||||
Other
expenses
|
873,732 | 7.1 | % | 818,074 | 3.9 | % | ||||||||||
3,846,809 | 31.0 | % | 6,206,176 | 29.2 | % | |||||||||||
LOSS
FROM OPERATIONS
|
(964,642 | ) | -7.8 | % | (1,255,923 | ) | -5.9 | % | ||||||||
OTHER
INCOME (EXPENSE):
|
(517,625 | ) | -4.2 | % | (146,532 | ) | -0.7 | % | ||||||||
NET
LOSS
|
$ | (1,482,267 | ) | -12.0 | % | $ | (1,402,455 | ) | -6.6 | % |
|
·
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As
a young company, we continue to face challenges with hiring and retaining
qualified personnel in the finance department. Limitations in
both the number of personnel currently staffing the finance department,
and in the skill sets employed by such persons, create difficulties in the
segregation of duties essential for sound internal
controls.
|
|
·
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Documentation
of proper accounting procedures is not yet complete and some of the
documentation that exists has not yet been reviewed or approved by
management, or has not been properly communicated and made available to
employees responsible for portions of the internal control
system.
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Exhibit No.
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Description
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Page #
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||
31.1
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Certification
of Glenn Welstad, 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.
|
10-Q,
Page 20
|
||
31.2
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Certification
of Ralph Peterson, Chief Financial Officer of Command Center, Inc.
pursuant to Rule 13a-14(a) as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
|
10-Q,
Page 21
|
||
32.1
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Certification
of Glenn Welstad, 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.
|
10-Q,
Page 22
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||
32.2
|
|
Certification
of Ralph Peterson, Chief Financial 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.
|
|
10-Q,
Page 23
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/s/Glenn
Welstad
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President
and CEO
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Glenn
Welstad
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August
10, 2009
|
Signature
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Title
|
Printed
Name
|
Date
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/s/Ralph
Peterson
|
CFO,
Principal Financial Officer
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Ralph
Peterson
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August
10, 2009
|
Signature
|
Title
|
Printed
Name
|
Date
|