Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 27, 2013 | Mar. 20, 2014 | Jun. 28, 2013 | |
Document And Entity Information | ' | ' | ' |
Entity Registrant Name | 'Command Center, Inc. | ' | ' |
Entity Central Index Key | '0001140102 | ' | ' |
Document Type | '10-K | ' | ' |
Document Period End Date | 27-Dec-13 | ' | ' |
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 Public Float | ' | ' | $10,853,000 |
Entity Common Stock, Shares Outstanding | ' | 59,711,242 | ' |
Document Fiscal Period Focus | 'FY | ' | ' |
Document Fiscal Year Focus | '2013 | ' | ' |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 27, 2013 | Dec. 28, 2012 |
Current Assets | ' | ' |
Cash | $5,820,309 | $1,632,993 |
Restricted cash | 25,619 | 21,295 |
Accounts receivable, net of allowance for doubtful accounts | 10,577,250 | 13,701,396 |
Prepaid expenses, deposits and other | 328,920 | 409,547 |
Prepaid workers' compensation | 28,044 | 22,852 |
Other receivables | 27,933 | 17,618 |
Current portion of workers' compensation deposits | 1,113,000 | 1,200,000 |
Total Current Assets | 17,921,075 | 17,005,701 |
Property and equipment - net | 350,767 | 609,772 |
Workers' compensation risk pool deposits, less current portion | 1,783,112 | 506,196 |
Goodwill | 3,306,786 | 3,306,786 |
Intangible assets - net | 386,956 | 522,535 |
Total Assets | 23,748,696 | 21,950,990 |
Current liabilities | ' | ' |
Accounts payable | 402,672 | 722,150 |
Checks issued and payable | 189,830 | 511,105 |
Account purchase agreement facility | 8,050,633 | 9,051,999 |
Other current liabilities | 326,319 | 507,122 |
Contingent liability | ' | 322,874 |
Accrued wages and benefits | 1,717,235 | 1,713,480 |
Current portion of workers' compensation premiums and claims liability | 1,648,058 | 2,005,579 |
Total Current Liabilities | 12,334,747 | 14,834,309 |
Long-term liabilities | ' | ' |
Warrant liabilities | 1,386,088 | 599,473 |
Workers compensation claims liability, less current portion | 2,613,871 | 2,510,687 |
Total liabilities | 16,334,706 | 17,944,469 |
Stockholders' Equity: | ' | ' |
Preferred stock - 0.001 par value, 5,000,000 shares authorized; none issued | ' | ' |
Common stock - 100,000,000 shares, $0.001 par value, authorized; 59,711,242 and 59,611,242 shares issued and outstanding, respectively | 59,711 | 59,611 |
Additional paid-in capital | 56,099,875 | 55,633,377 |
Accumulated deficit | -48,745,596 | -51,686,467 |
Total Stockholders' Equity | 7,413,990 | 4,006,521 |
Total Liabilities and Stockholders' Equity | $23,748,696 | $21,950,990 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 27, 2013 | Dec. 28, 2012 |
Stockholders equity: | ' | ' |
Preferred stock par value | $0.00 | $0.00 |
Preferred stock shares authorized | 5,000,000 | 5,000,000 |
Preferred stock shares issued | 0 | 0 |
Common stock par value | $0.00 | $0.00 |
Common stock shares authorized | 100,000,000 | 100,000,000 |
Common stock shares issued | 59,711,242 | 59,611,242 |
Common stock shares outstanding | 59,711,242 | 59,611,242 |
Consolidated_Statements_of_Inc
Consolidated Statements of Income (USD $) | 12 Months Ended | |
Dec. 27, 2013 | Dec. 28, 2012 | |
Consolidated Statements Of Income | ' | ' |
Revenue | $93,748,261 | $98,432,059 |
Cost of staffing services | 69,500,997 | 73,538,819 |
Gross Profit | 24,247,264 | 24,893,240 |
Selling, general and administrative expenses | 19,527,784 | 22,043,268 |
Depreciation and amortization | 351,240 | 370,768 |
Income from operations | 4,368,240 | 2,479,204 |
Interest expense and other financing expense | -503,626 | -804,036 |
Change in fair value of derivative liabilities | -786,615 | 842,256 |
Net income before income taxes | 3,077,999 | 2,517,424 |
Provision for income taxes | -137,128 | -958,147 |
Net income | $2,940,871 | $1,559,277 |
Earnings per share: | ' | ' |
Basic | $0.05 | $0.03 |
Diluted | $0.05 | $0.02 |
Weighted average shares outstanding: | ' | ' |
Basic | 59,613,989 | 59,235,990 |
Diluted | 61,307,455 | 63,124,705 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | |
Dec. 27, 2013 | Dec. 28, 2012 | |
Cash flows from operating activities: | ' | ' |
Net income | $2,940,871 | $1,559,277 |
Adjustments to reconcile net income to net cash used by operations: | ' | ' |
Depreciation and amortization | 351,240 | 370,768 |
Change in allowance for doubtful accounts | 117,483 | 287,116 |
Change in fair value of derivative liabilities | 786,615 | -842,256 |
Common stock issued for services | 39,000 | 83,440 |
Stock based compensation | 104,724 | 138,600 |
Change in assets and liabilities: | ' | ' |
Accounts receivable - trade | 3,006,664 | -5,750,776 |
Restricted cash | -4,324 | -21,295 |
Prepaid workers' compensation | -5,192 | 4,780 |
Other receivables | -10,315 | -6,590 |
Prepaid expenses, deposits and other | 80,627 | -12,638 |
Loss on disposition of property and equipment | 61,940 | ' |
Deferred tax asset | ' | 912,195 |
Workers' compensation risk pool deposits | -1,189,918 | -777,361 |
Accounts payable | -319,479 | -178,024 |
Checks issued and payable | -321,275 | 341,367 |
Other current liabilities | -180,803 | -51,699 |
Accrued wages and benefits | 3,755 | 927,815 |
Workers' compensation premiums and claims liability | -254,336 | 1,180,929 |
Net cash provided (used) by operating activities | 5,207,277 | -1,834,352 |
Cash flows from investing activities: | ' | ' |
Purchases of property and equipment | -58,895 | -293,285 |
Sale of property and equipment | 40,300 | ' |
Cash paid for acquisition of subsidiary | ' | -150,000 |
Net cash used by investing activities | -18,595 | -443,285 |
Cash flows from financing activities: | ' | ' |
Net proceeds from account purchase agreement facility | -1,001,366 | 2,929,334 |
Payments on notes payable | ' | -150,000 |
Net cash (used) provided by financing activities | -1,001,366 | 2,779,334 |
Net increase in cash | 4,187,316 | 501,697 |
Cash, beginning of period | 1,632,993 | 1,131,296 |
Cash, end of period | 5,820,309 | 1,632,993 |
Non-cash investing and financing activities | ' | ' |
Common stock issued for subsidiary | ' | 390,000 |
Contingent consideration recorded in acquisition of subsidiary | ' | 851,727 |
Common shares issued for contigent consideration | ' | 70,540 |
Note payable issued for subsidiary | ' | 150,000 |
Shares to be issued for contingent consideration | 322,874 | ' |
Equipment received in exchange for accounts receivable | ' | 45,000 |
Supplemental disclosure of cash flow information | ' | ' |
Interest paid | 306,250 | 571,144 |
Income taxes paid | $32,128 | $45,951 |
Consolidated_Statement_of_Chan
Consolidated Statement of Changes in Stockholders’ Equity (USD $) | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Total |
Beginning Balance, Amount at Dec. 30, 2011 | $57,606 | $54,952,802 | ($53,245,744) | $1,764,664 |
Beginning Balance, Shares at Dec. 30, 2011 | 57,606,368 | ' | ' | ' |
Common stock issued for services, Amount | 293 | 83,147 | ' | 83,440 |
Common stock issued for services, Shares | 293,000 | ' | ' | ' |
Common shares issued for the acquisition of DRS, LLC, Amount | 1,500 | 388,500 | ' | 390,000 |
Common shares issued for the acquisition of DRS, LLC, Shares | 1,500,000 | ' | ' | ' |
Common shares issued for contingent liability, Amount | 212 | 70,328 | ' | 70,540 |
Common shares issued for contingent liability, Shares | 211,874 | ' | ' | ' |
Stock based compensation expense | ' | 138,600 | ' | 138,600 |
Net income | ' | ' | 1,559,277 | 1,559,277 |
Ending Balance, Amount at Dec. 28, 2012 | 59,611 | 55,633,377 | -51,686,467 | 4,006,521 |
Ending Balance, Shares at Dec. 28, 2012 | 59,611,242 | ' | ' | ' |
Common stock issued for services, Amount | 100 | 38,900 | ' | 39,000 |
Common stock issued for services, Shares | 100,000 | ' | ' | ' |
Stock based compensation expense | ' | 104,724 | ' | 104,724 |
Reclass contingent consideration for DRS, LLC | ' | 322,874 | ' | 322,874 |
Net income | ' | ' | 2,940,871 | 2,940,871 |
Ending Balance, Amount at Dec. 27, 2013 | $59,711 | $56,099,875 | ($48,745,596) | $7,413,990 |
Ending Balance, Shares at Dec. 27, 2013 | 59,711,242 | ' | ' | ' |
1_SUMMARY_OF_SIGNIFICANT_ACCOU
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended | |||||||||
Dec. 27, 2013 | ||||||||||
Summary Of Significant Accounting Policies | ' | |||||||||
Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | |||||||||
Description of Business: Command Center, Inc. ("Command Center,” the “Company,” “CCI,” “we,” "us," or “our”) is a Washington corporation initially organized in 2002. We reorganized in 2005 and 2006 and now provide on-demand employees for manual labor, light industrial, and skilled trade’s applications. Our customers are primarily small to mid-sized businesses in the restoration, wholesale trades, manufacturing, hospitality, construction and retail industries. We currently operate 56 stores located in 23 states. Our largest 10 customers represent approximately 20% of our revenue. We operate as: Command Center, Inc., Disaster Recovery Services, Inc. (“DR Services”), and as Bakken Staffing, a dba utilized in North Dakota. | ||||||||||
Basis of Presentation: The consolidated financial statements include the accounts of Command Center, Inc. and all of our wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. The consolidated financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). | ||||||||||
Use of Estimates: The preparation of consolidated financial statements in conformity with generally accepted accounting principles requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. | ||||||||||
Fiscal Year End: Our consolidated financial statements are presented on a 52/53-week fiscal year end basis, with the last day of the fiscal year being the last Friday of each calendar year. In fiscal years consisting of 53 weeks, the final quarter will consist of 14 weeks. Fiscal years 2013 and 2012 both consisted of 52 weeks. | ||||||||||
Reclassifications: Certain amounts in the consolidated financial statements for 2012 have been reclassified to conform to the 2013 presentation. These reclassifications have no effect on net income, earnings per share, or stockholders’ equity as previously reported. | ||||||||||
Revenue Recognition: We generate revenues primarily from providing on-demand labor services. Revenue from services is recognized at the time the service is performed and is net of adjustments related to customer credits. Revenues are reported net of customer credits and taxes collected from customers that are remitted to taxing authorities. | ||||||||||
Cost of Staffing Services: Cost of services includes the wages of temporary employees, related payroll taxes, workers’ compensation expenses, and other direct costs of services. | ||||||||||
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. At December 27, 2013, we held deposits in excess of FDIC insured limits of approximately $5.2 million. | ||||||||||
Restricted Cash: We maintained a cash balance that is held on deposit as a requirement of our workers’ compensation insurance provider. | ||||||||||
Accounts Receivable and Allowance for Doubtful Accounts: Accounts receivable are carried at their estimated recoverable amount, net of allowances. We regularly review our accounts receivable for collectability. The allowance for doubtful accounts is determined based on historical write-off experience, age of receivable, other qualitative factors and extenuating circumstances, and current economic data and represents our best estimate of the amount of probable losses on our accounts receivable. The allowance for doubtful accounts is reviewed monthly. Generally, we refer overdue balances to a collection agency at 120 days and the collection agent typically pursues collection for another 60 or more days. All balances over 180 days past due are either written off as bad debt or fully reserved. At December 27, 2013 and December 28, 2012, our allowance for doubtful accounts was approximately $637,000 and $519,000, respectively. | ||||||||||
Property and Equipment: Property and equipment are recorded at cost. We compute depreciation using the straight-line method over the estimated useful lives, typically three to five years. Leasehold improvements are capitalized and amortized over the shorter of the non-cancelable lease term or their useful lives. Repairs and maintenance are expensed as incurred. When assets are sold or retired, cost and accumulated depreciation are eliminated from the consolidated balance sheet and gain or loss is reflected in the consolidated statement of income. | ||||||||||
Capitalized Software Development Costs: We expense costs incurred in the preliminary project stage of developing or acquiring internal use software. Once the preliminary assessment is complete, management authorizes the project. When it is probable that the project will be completed, will result in new software or added functionality of existing software, and the software will be used for the function intended, we capitalize subsequent software development costs. The capitalized costs are amortized on a straight-line basis over the estimated useful life of the software which ranges from three to seven years. | ||||||||||
Workers’ Compensation Reserves: In accordance with the terms of our workers’ compensation liability insurance policy, we maintain reserves for workers’ compensation claims to cover our cost of all claims. We use third party actuarial estimates of the future costs of the claims and related expenses discounted by a 3% present value interest rate to determine the amount of our reserves. We evaluate the reserves regularly throughout the year and make adjustments as needed. If the actual cost of the claims incurred and related expenses exceed the amounts estimated, additional reserves may be required. In monopolistic states, we utilize the state funds for our workers’ compensation insurance and pay our premiums in accordance with the state plans. | ||||||||||
Goodwill and Other Intangible Assets: Goodwill represents the excess purchase price over the fair value of identifiable assets received attributable to business acquisitions and combinations. Goodwill and other intangible assets are measured for impairment at least annually and/or whenever events and circumstances arise that indicate impairment may exist, such as a significant adverse change in the business climate. In assessing the value of goodwill, assets and liabilities are assigned to the reporting units and the appropriate valuation methodologies are used to determine fair value at the reporting unit level. Identified intangible assets are amortized using the straight-line method over their estimated useful lives which are estimated to be between three and seven years. | ||||||||||
Fair Value of Financial Instruments: We carry financial instruments on the consolidated balance sheet at the fair value of the instruments as of the consolidated balance sheet date. At the end of each period, management assesses the fair value of each instrument and adjusts the carrying value to reflect its assessment. At December 27, 2013 and December 28, 2012, the carrying values of accounts receivable and accounts payable approximated their fair values due to relatively short maturities. | ||||||||||
Derivatives: From time to time, we enter into transactions which contain conversion privileges, the settlement of which may entitle the holder or us to settle the obligation(s) by issuance of Company securities. When we enter into transactions which allow us to settle obligations by the issuance of Company securities, fair value is estimated each reporting period. | ||||||||||
Income Taxes: We account for income taxes under the liability method, whereby deferred income tax liabilities or assets at the end of each period are determined using the tax rate expected to be in effect when the taxes are actually paid or recovered. A valuation allowance is recognized on deferred tax assets when it is more likely than not that some or all of these deferred tax assets will not be realized. Our policy is to prescribe a recognition threshold and measurement attribute for the recognition and measurement of a tax position taken or expected to be taken in a tax return. We have analyzed our filing positions in all jurisdictions where we are required to file returns, and found no positions that would require a liability for unrecognized income tax positions to be recognized. We are subject to tax examinations. In the event that we are assessed penalties and or interest, penalties will be charged to other financing expense and interest will be charged to interest expense. | ||||||||||
Earnings per Share: We follow financial accounting standards which require the calculation of basic and diluted 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 warrants, and/or stock options. We had common stock equivalents outstanding to purchase 6,879,125 and 13,835,053 shares of common stock at December 27, 2013 and December 28, 2012, respectively. If we incur losses in the periods presented, or if conversion into common shares is anti-dilutive, basic and dilutive earnings per share are equal. At December 27, 2013 and December 28, 2012, we had 1,693,466 and 3,888,715 dilutive shares relating to vested stock options, warrants, and shares to be issued for contingent consideration, respectively. | ||||||||||
Share-Based Compensation: Periodically, we issue common shares or options to purchase our common shares to our officers, directors, employees, or other parties. Compensation expense for these equity awards are recognized over the vesting period, based on the fair value on the grant date. We recognize compensation expense for only the portion of options that are expected to vest, rather than record forfeitures when they occur. If the actual number of forfeitures differs from those estimated by management, additional adjustments to compensation expense may be required in the future periods. We determine the fair value of equity awards using the Black-Scholes valuation model. | ||||||||||
Advertising Costs: Advertising costs consist primarily of print and other promotional activities. We expense advertisements as incurred. During the years ended December 27, 2013 and December 28, 2012, advertising cost were included in selling, general and administrative expenses were approximately $34,000 and $62,000, respectively. | ||||||||||
Concentrations: At December 27, 2013 we had a concentration in accounts receivable where the total balance due from a single client was 13.0% of total accounts receivable. At December 27, 2013 and December 28, 2012, we had a concentration in accounts payable where the total balance due to a single vendor was 10.3% and 10.9% of total accounts payable, respectively. A reduction or loss of business with this client, or service from this vendor, could have a material adverse effect on our results of operations and financial condition. | ||||||||||
Long-lived asset impairment: Long-lived assets include property and equipment and definite-lived intangible assets. Definite-lived intangible assets consist of customer relationships, trade names and non-compete agreements. Long-lived assets are measured for impairment at least annually and/or whenever events and circumstances arise that indicate that the carrying value of the assets may not be recoverable. | ||||||||||
Business Combinations: We account for business combinations using the purchase method of accounting to recognize and measure the identifiable assets and goodwill acquired in business combinations. Identifiable assets are recorded at fair value at the acquisition date. Goodwill represents the excess of the purchase price over the fair value of net assets, including the amount assigned to identifiable intangible assets. The results of operations of acquired businesses are included in the consolidated financial statements from the acquisition date. | ||||||||||
Checks Issued and Outstanding: When checks drafted at a financial institution are in excess of funds on deposit at that financial institution, determined on an entity by entity basis, they are presented as a current liability on the consolidated balance sheet. | ||||||||||
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 a stock warrant and contingent liability. | ||||||||||
The following table sets forth our assets and liabilities measured at fair value, whether recurring or non-recurring, at December 27, 2013 and December 28, 2012, and the fair value calculation input hierarchy level that we have determined applies to each asset and liability category. | ||||||||||
2013 | 2012 | Input Hierarchy Level | ||||||||
Recurring: | ||||||||||
Stock Warrant liability | $ | 1,386,088 | $ | 599,473 | Level 2 | |||||
Contingent liability | - | 322,874 | Level 2 | |||||||
Recent Accounting Pronouncements: 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 guidance became effective for us beginning in our fiscal year 2013. | ||||||||||
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. In fiscal year 2013, the adoption of other accounting standards had no material impact on our financial positions, results of operations or cash flows. |
2_ACQUISITIONS
2. ACQUISITIONS | 12 Months Ended | ||||
Dec. 27, 2013 | |||||
AcquisitionsAbstract | ' | ||||
Note 2 - ACQUISITIONS | ' | ||||
On January 4, 2012 (effective January 1, 2012), through our wholly-owned and newly formed subsidiary DR Services, we entered into an asset purchase agreement (the “Agreement”), with DR Services of Louisiana, LLC, a Louisiana limited liability company, and Environmental Resource Group, LLC, a Louisiana limited liability company (collectively “DRS, LLC”). Under the terms of the Agreement, we acquired substantially all of the assets of DRS, LLC. | |||||
The following tables summarize the consideration transferred and the recognized amounts of assets acquired: | |||||
Consideration Transferred: | |||||
Cash | $ | 150,000 | |||
Note payable | 150,000 | ||||
Equity instruments (1.5 million shares of restricted common stock) | 390,000 | ||||
Contingent consideration (Up to an additional 1.5 million shares of restricted common stock) | 851,727 | ||||
$ | 1,541,727 | ||||
Identifiable Assets and Goodwill Acquired: | |||||
Customer list | $ | 608,096 | |||
Trade name | 36,830 | ||||
Vehicles and machinery | 79,852 | ||||
Other tangible property | 10,163 | ||||
Goodwill | 806,786 | ||||
$ | 1,541,727 | ||||
The number of shares to be issued pursuant to the contingent consideration is based on the sum of two calculations performed each quarter for the 8 quarters following the acquisition. The first calculation takes 9% of net revenue divided by the greater of our current stock price or $0.50 divided by 2. The second calculation takes 9% of actual net revenue less the prior year’s quarterly revenue, stepped up by 5% each quarter (i.e., 5% increase in the first of eight quarters and a 40% increase in the eighth of eight quarters) with the increase, if any, divided by the greater of our current stock price or $0.50. | |||||
The fair value of the 1.5 million shares issued was determined based on the closing price of our common stock on the date of issuance. | |||||
The fair value of the contingent shares to be issued was determined based upon a binomial model where we estimated our future stock price and the future revenue growth of DR Services over the 8 quarters following the acquisition. The assumptions used to calculate the fair value of the contingent liability are as follows: | |||||
Command Center, Inc. future stock price | $ | 0.50 - $2.10 | |||
DRSI quarterly revenue growth | 10.0% - 40.0 | % | |||
The change in fair value amounted to approximately $458,000 for the fiscal year ended December 28, 2012, and is included in the line item change in fair value of derivative liabilities in our consolidated statement of income. This gain was primarily related to the accelerated earning of the contingent consideration and an actual per share price that was lower than originally estimated by management. The original estimate assumed the contingent consideration would be earned over eight quarters where our stock price was anticipated to steadily increase over that time period. Actual results show the contingent liability was earned over four quarters, over a period where our stock price remained relatively constant. | |||||
At December 27, 2013 and December 28, 2012, there were approximately 1.3 million shares issuable to the owners of DRS, LLC valued at approximately $323,000 related to contingent consideration earned and due. During 2013, we determined that these shares were earned and due. As such, we reclassed the contingent liability to additional paid in capital and we expect these shares to be issued in 2014. | |||||
As part of the agreement, the owners of DRS, LLC entered into employment agreements with us with a term of one year in which we agreed to pay them an annual salary, and a vehicle allowance. Also as part of the agreement, the owners of DRS, LLC entered into non-compete agreements with a term of two years. | |||||
Our consolidated financial statements for fiscal year 2012 reflect all DR Services transactions for the entire period. Accordingly, no pro forma information for 2012 is being presented. |
3_PROPERTY_AND_EQUIPMENT
3. PROPERTY AND EQUIPMENT | 12 Months Ended | ||||||||
Dec. 27, 2013 | |||||||||
Property And Equipment | ' | ||||||||
Note 3 - PROPERTY AND EQUIPMENT | ' | ||||||||
The following table summarizes the book value of the assets and accumulated depreciation and amortization at December 27, 2013 and December 28, 2012: | |||||||||
2013 | 2012 | ||||||||
Leasehold improvements | $ | 587,593 | $ | 573,796 | |||||
Vehicles and machinery | 99,509 | 224,361 | |||||||
Furniture and fixtures | 51,696 | 56,883 | |||||||
Computer hardware and licensed software | 250,964 | 233,594 | |||||||
Accumulated depreciation | (644,935 | ) | (534,988 | ) | |||||
344,827 | 553,646 | ||||||||
Software development costs | 292,495 | 356,848 | |||||||
Accumulated amortization | (286,555 | ) | (300,722 | ) | |||||
5,940 | 56,126 | ||||||||
Total property and equipment, net | $ | 350,767 | $ | 609,772 | |||||
During the fiscal year ended December 27, 2013 and December 28, 2012, we recognized approximately $216,000 and $197,000, respectively, of depreciation and amortization expense related to property and equipment. |
4_GOODWILL_AND_INTANGIBLE_ASSE
4. GOODWILL AND INTANGIBLE ASSETS | 12 Months Ended | ||||||||
Dec. 27, 2013 | |||||||||
Goodwill And Intangible Assets | ' | ||||||||
Note 4 - GOODWILL AND INTANGIBLE ASSETS | ' | ||||||||
In 2012, we recorded an increase in goodwill of approximately $807,000 related to the acquisition of DR Services (see Note 2). | |||||||||
At least annually, or whenever events or circumstances arise indicating an impairment may exist, we review goodwill for impairment. We are a single reporting unit consisting of purchased on-demand labor stores, thus the analysis was conducted for the Company as a whole. Our goodwill represents the consideration given for acquisitions in excess of the fair value of identifiable assets received. We did not record an impairment of goodwill in fiscal years 2013 or 2012 as the estimated fair value of the reporting unit exceeded its carrying value. | |||||||||
The following table presents our purchased intangible assets, other than goodwill, for the fiscal years ended December 27, 2013 and December 28, 2012: | |||||||||
2013 | 2012 | ||||||||
Customer relationships | $ | 1 ,420,096 | $ | 1,420,096 | |||||
Trade names and other | 41,780 | 41,780 | |||||||
Accumulated amortization | (1,074,920 | ) | (939,341 | ) | |||||
Intangible asset, net | $ | 386,956 | $ | 522,535 | |||||
During the fiscal year ended December 27, 2013 and December 28, 2012, we recognized approximately $136,000 and $174,000, respectively, of amortization expense related to intangible assets. | |||||||||
We obtained our amortizable intangible asset as a result of the acquisition of DR Services in 2012 (see Note 2) and the acquisition of on-demand labor stores in 2006 and 2007. | |||||||||
5_FACTORING_AGREEMENT_LINE_OF_
5. FACTORING AGREEMENT & LINE OF CREDIT FACILITY | 12 Months Ended |
Dec. 27, 2013 | |
Factoring Agreement Line Of Credit Facility | ' |
Note 5 - FACTORING AGREEMENT & LINE OF CREDIT FACILITY | ' |
Our current financing agreement is an account purchase agreement which allows us to sell eligible accounts receivable for 90% of the invoiced amount on a full recourse basis up to the facility maximum, $14 million on December 27, 2013 and $15 million on December 28, 2012. When the account is paid by our customers, the remaining 10% is paid to us, less applicable fees and interest. Eligible accounts receivable are generally defined to include accounts that are not more than ninety days past due. Prior to November 13, 2012, eligible accounts receivable were generally defined to include accounts that were not more than sixty days past due. | |
Net accounts receivable sold pursuant to this agreement at December 27, 2013 and December 28, 2012 were approximately $8.1 million and $9.1 million, respectively. The term of the current agreement is through April 7, 2016. The current agreement bears interest at the London Interbank Offered Rate (LIBOR) plus 3.0% per annum. At December 27, 2013 the effective interest rate was 3.2%. Interest is payable on the actual amount advanced or $3 million, whichever is greater. Additional charges include an annual facility fee equal to 0.75% of the facility threshold in place and lockbox fees. As collateral for repayment of any and all obligations, we granted Wells Fargo Bank, N.A. a security interest in our all of our property including, but not limited to, accounts receivable, intangible assets, contract rights, deposit accounts, and other such assets. | |
The agreement contains a covenant that requires the sum of the excess available advances, plus or minus our cash balance at month end, must at all times be greater than accrued payroll and accrued payroll taxes. At December 27, 2013 and December 28, 2012, we were in compliance with this covenant. |
6_WORKERS_COMPENSATION_INSURAN
6. WORKERS' COMPENSATION INSURANCE AND RESERVES | 12 Months Ended | ||||||||
Dec. 27, 2013 | |||||||||
Workers Compensation Insurance And Reserves | ' | ||||||||
Note 6 - 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 made payments into, and maintain a balance of, $1.8 million in a non-depleting deposit account to cover claims within our self-insured layer. For workers' compensation claims originating in the monopolistic jurisdictions of Washington and North Dakota we pay workers' compensation insurance premiums and obtain full coverage under state government administered programs. We also obtain full coverage in New York under a policy issued by the State Fund of New York. Accordingly, our consolidated financial statements reflect only the mandated workers' compensation insurance premium liability for workers' compensation claims in these jurisdictions. | |||||||||
From April 1, 2011 to March 31, 2012 our workers’ compensation coverage was obtained through Zurich American Insurance Company (“Zurich”). The policy with Zurich was a guaranteed cost plan, which is in contrast to our current and previous coverage where we are and were substantially self-insured through a large deductible policy. Zurich provided workers’ compensation coverage in all states in which we operate other than Washington and North Dakota. | |||||||||
Our previous workers’ compensation coverage was a large deductible policy where we had primary responsibility for claims under the policy. Our previous workers’ compensation carriers provide insurance for covered losses and expenses in excess of $250,000 per claim. | |||||||||
Workers' compensation expense for temporary workers is recorded as a component of our cost of services and totaled approximately $4.3 million and 4.1 million for the year ended December 27, 2013 and December 28, 2012, respectively. | |||||||||
Prior to Zurich, we maintained workers' compensation policies through AMS Staff Leasing II (“AMS”) for coverage in the non-monopolistic jurisdictions in which we operated. The AMS coverage was a large deductible policy where we have primary responsibility for claims under the policy. Under this policy, AMS provides re-insurance for covered losses and expenses in excess of $250,000 per claim, which results in us being substantially self-insured on claims originating under AMS. | |||||||||
Under the AMS policies, we make payments into a risk pool fund to cover claims within our self-insured layer. Per our contractual agreements for this coverage, we were originally required to maintain a deposit in the amount of $715,000. At December 27, 2013, our deposit with this previous insurer was approximately $684,000. | |||||||||
For the two year period prior to May 13, 2008, our workers’ compensation coverage was obtained through policies issued by AIG. At December 27, 2013, our risk pool deposit with AIG was approximately $414,000. All liabilities associated with these claims are fully reserved on our consolidated balance sheet. | |||||||||
Expected losses will extend over the life of the longest lived claim which may be outstanding for many years. Our current actuarial analysis is based largely on industry averages which may not be applicable to us. If our average claims period is longer than industry average, our actual claims losses could exceed our current estimates. Conversely, if our average claims period is shorter than industry average, our actual claims could be less than current reserves. | |||||||||
Workers’ compensation expense for temporary workers is recorded as a component of our cost of services and consists of the following components: changes in our self-insurance reserves, net of the discount; actual claims paid; insurance premiums and administrative fees; and premiums paid in monopolistic jurisdictions. Workers’ compensation expense for our temporary workers totaled approximately $4.1 million for the fiscal years ended December 27, 2013 and December 28, 2012. | |||||||||
2013 | 2012 | ||||||||
Workers’ Compensation Deposits | |||||||||
Workers’ compensation deposits available at the beginning of the period | $ | 1,706,195 | $ | 928,834 | |||||
Additional workers’ compensation deposits made during the period | 1,360,000 | 1,850,000 | |||||||
Deposits applied to payment of claims during the period | (170,082 | ) | (1,072,639 | ) | |||||
Deposits available for future claims at the end of the period | $ | 2,896,113 | $ | 1,706,195 | |||||
Workers’ Compensation Claims Liability | |||||||||
Estimated future claims liabilities at the beginning of the period | $ | 3,710,925 | $ | 2,946,675 | |||||
Claims paid during the period | (1,653,694 | ) | (1,626,182 | ) | |||||
Additional future claims liabilities recorded during the period | 1,669,640 | 2,390,432 | |||||||
Estimated future claims liabilities at the end of the period | $ | 3,726,871 | $ | 3,710,925 | |||||
The workers’ compensation risk pool deposits are classified as current and non-current assets on the consolidated balance sheet based upon management’s estimate of when the related claims liabilities will be paid. The deposits have not been discounted to present value in the accompanying consolidated financial statements. | |||||||||
7_STOCKHOLDERS_EQUITY
7. STOCKHOLDERS' EQUITY | 12 Months Ended | ||||||||
Dec. 27, 2013 | |||||||||
Stockholders' Equity: | ' | ||||||||
Note 7 - STOCKHOLDERS' EQUITY | ' | ||||||||
Issuance of Common Stock: In the fiscal year ending December 27, 2013, we issued 100,000 shares of common stock valued at $39,000 to the outside members of our Board of Directors for partial payment of their services. | |||||||||
In the fiscal year ending December 28, 2012, we issued 1,711,874 shares of common stock in relation to the acquisition of DR Services (see Note 2). | |||||||||
We issued 153,000 shares of common stock valued at approximately $47,000 to our investor relations firm as partial payment for their investor relations fees. The average price of the shares issued was $0.31. The shares were recorded as an expense when earned and issuable. | |||||||||
We issued 140,000 shares of common stock valued at approximately $36,000 to the outside members of our Board of Directors for partial payment of their services. | |||||||||
The following warrants for our common stock were issued and outstanding on December 27, 2013 and December 28, 2012, respectively: | |||||||||
2013 | 2012 | ||||||||
Warrants outstanding at beginning of year | 11,887,803 | 12,137,803 | |||||||
Expired | (6,312,803 | ) | - | ||||||
Cancelled | - | (250,000 | ) | ||||||
Warrants outstanding at end of year | 5,575,000 | 11,887,803 | |||||||
A detail of warrants outstanding at December 27, 2013 is as follows: | |||||||||
Number | Expiration Date | ||||||||
Exercisable at $0.08 per share | 4,200,000 | 4/1/14 | |||||||
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 are estimated each period using the Black-Scholes pricing model. The assumptions used to calculate the fair values are as follows: | |||||||||
December 27, | December 28, | ||||||||
2013 | 2012 | ||||||||
Expected term (years) | 0.26 | 1.3 | |||||||
Expected volatility | 93.2 | % | 95.2 | % | |||||
Dividend yield | 0 | % | 0 | % | |||||
Risk-free rate | 0.07 | % | 0.2 | % | |||||
The change in fair value amounted to approximately $(787,000) and $384,000 for the year ended December 27, 2013 and December 28, 2012, respectively. These changes are included in the line item change in fair value of derivative liabilities in our consolidated statement of income. |
8_STOCK_BASED_COMPENSATION
8. STOCK BASED COMPENSATION | 12 Months Ended | ||||||||||||||||
Dec. 27, 2013 | |||||||||||||||||
Stock Based Compensation | ' | ||||||||||||||||
8. STOCK BASED COMPENSATION | ' | ||||||||||||||||
Employee Stock Incentive Plan: 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, directors, as well as advancing our own interests. | |||||||||||||||||
During 2013, we granted 1,500,000 stock options to our CEO exercisable at $0.20, which expire on March 28, 2018. During 2012, we granted 1,875,000 stock options to employees, officers and directors exercisable at $0.41, which expire on May 9, 2017. Options granted in 2013 and 2012 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 following table reflects the summary of stock options outstanding at December 30, 2011 and changes during the fiscal years ended December 28, 2012 and December 27, 2013: | |||||||||||||||||
Number of Shares Under Options | Weighted Average Exercise Price Per Share | Weighted Average Fair Value Per Share | |||||||||||||||
Outstanding, December 30, 2011 | 3,092,000 | $ | 0.2 | $ | 0.17 | ||||||||||||
Granted | 1,875,000 | 0.41 | 0.33 | ||||||||||||||
Forfeited | (281,750 | ) | 0.28 | 0.24 | |||||||||||||
Expired | (602,250 | ) | 0.3 | 0.22 | |||||||||||||
Outstanding, December 28, 2012 | 4,083,000 | 0.2 | 0.17 | ||||||||||||||
Granted | 1,500,000 | 0.2 | 0.16 | ||||||||||||||
Forfeited | (899,125 | ) | 0.3 | 0.25 | |||||||||||||
Expired | (733,375 | ) | 0.21 | 0.17 | |||||||||||||
Outstanding, December 27, 2013 | 3,950,500 | 0.26 | 0.17 | ||||||||||||||
The fair value of each option award is estimated on the date of grant using the Black-Scholes pricing model. Expected volatility is based on historical annualized volatility of our stock. The expected term of options granted represents the period of time that options granted are expected to be outstanding. The risk-free rate is based upon the U.S. Treasury yield curve in effect at the time of grant. Currently we do not foresee the payment of dividends in the near term. The assumptions used to calculate the fair value are as follows: | |||||||||||||||||
December 27, | December 28, | ||||||||||||||||
2013 | 2012 | ||||||||||||||||
Expected term (years) | 5 | 5 | |||||||||||||||
Expected volatility | 114.1 | % | 116.9 | % | |||||||||||||
Dividend yield | 0 | % | 0 | % | |||||||||||||
Risk-free rate | 0.8 | % | 0.8 | % | |||||||||||||
Under the fair value recognition provisions of the Accounting Standards Codification, share-based compensation cost is measured at the grant date based on the value of the award and is recognized as an expense over the vesting period using the straight-line method of amortization. The expected post vesting exercise rate was determined based on an estimated annual turnover percentage of 15% with an estimated 90% of vested options expected to be exercised. Options granted to certain key employees were not taken into consideration when determining the post vesting effects due to turnover. During the fiscal year ended December 27, 2013 and December 28, 2012, we recognized share-based compensation expense of approximately $105,000 and $139,000 relating to the issuance of stock options, respectively. | |||||||||||||||||
The following table reflects a summary of our nonvested stock options outstanding at December 30, 2011 and changes during the fiscal years ended December 28, 2012 and December 27, 2013: | |||||||||||||||||
Number of | Weighted Average Exercise Price per Share | Weighted Average Grant Date Fair Value | |||||||||||||||
Options | |||||||||||||||||
Nonvested, December 30, 2011 | 1,652,750 | 0.17 | 0.15 | ||||||||||||||
Granted | 1,875,000 | 0.41 | 0.33 | ||||||||||||||
Vested | (510,250 | ) | 0.17 | 0.15 | |||||||||||||
Forfeited | (281,750 | ) | 0.28 | 0.24 | |||||||||||||
Nonvested, December 28, 2012 | 2,735,750 | 0.17 | 0.15 | ||||||||||||||
Granted | 1,500,000 | 0.2 | 0.16 | ||||||||||||||
Vested | (690,250 | ) | 0.3 | 0.25 | |||||||||||||
Forfeited | (899,125 | ) | 0.3 | 0.25 | |||||||||||||
Nonvested, December 27, 2013 | 2,646,375 | 0.27 | 0.22 | ||||||||||||||
As of December 27, 2013, there was unrecognized share-based compensation expense totaling approximately $420,000 relating to non-vested options that will be recognized over the next 3.2 years. | |||||||||||||||||
The following summarizes information about the stock options outstanding at December 27, 2013: | |||||||||||||||||
Number of Options | Weighted Average Exercise Price Per Share | Weighted Average Remaining Contractual Life (years) | Aggregate Intrinsic Value | ||||||||||||||
Outstanding | 3,950,500 | $ | 0.26 | 3.02 | $ | 737,454 | |||||||||||
Exercisable | 1,304,125 | 0.23 | 1.77 | 75,860 | |||||||||||||
Employee Stock Purchase Plan: We approved an employee stock purchase plan in 2008 permitting the grant of 1.0 million shares of common stock to employees. No options or shares have been issued pursuant to this plan. |
9_INCOME_TAX
9. INCOME TAX | 12 Months Ended | ||||||||||||||||
Dec. 27, 2013 | |||||||||||||||||
Income Tax | ' | ||||||||||||||||
Note 9 - INCOME TAX | ' | ||||||||||||||||
The provision for deferred income taxes is comprised of the follows: | |||||||||||||||||
December 27, | December 28, | ||||||||||||||||
2013 | 2012 | ||||||||||||||||
Current | |||||||||||||||||
Federal | $ | 96,000 | $ | 39,000 | |||||||||||||
State | 41,000 | 7,000 | |||||||||||||||
Deferred | |||||||||||||||||
Federal | 1,239,000 | (40,000 | ) | ||||||||||||||
State | 395,000 | 208,000 | |||||||||||||||
Change in valuation allowance | (1,634,000 | ) | 744,000 | ||||||||||||||
Provision for income taxes | $ | 137,000 | $ | 958,000 | |||||||||||||
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of our deferred taxes are as follows: | |||||||||||||||||
December 27, | December 28, | ||||||||||||||||
2013 | 2012 | ||||||||||||||||
Current deferred tax assets and liabilities | |||||||||||||||||
Accrued Bonus | $ | 220,000 | $ | - | |||||||||||||
Accrued Vacation | 62,000 | 65,000 | |||||||||||||||
Total current deferred tax asset | 282,000 | 65,000 | |||||||||||||||
Long-term deferred tax assets and liabilities | |||||||||||||||||
Workers' compensation claims liability | 1,401,000 | 1,444,000 | |||||||||||||||
Property, plant, equipment and intangibles | 252,000 | 238,000 | |||||||||||||||
Bad debt reserve | 239,000 | 202,000 | |||||||||||||||
Other assets | 17,000 | 14,000 | |||||||||||||||
NOL | 3,486,000 | 5,460,000 | |||||||||||||||
AMT Credit | 151,000 | 39,000 | |||||||||||||||
Total long-term deferred tax asset | 5,546,000 | 7,397,000 | |||||||||||||||
Total deferred tax asset | 5,828,000 | 7,462,000 | |||||||||||||||
Valuation allowance | (5,828,000 | ) | (7,462,000 | ) | |||||||||||||
Total deferred tax asset, net of valuation allowance | $ | - | $ | - | |||||||||||||
At December 27, 2013, we fully reserved our deferred tax asset by a valuation allowance because of uncertainties concerning our ability to generate sufficient taxable income in future periods to realize the tax benefit. Management does not believe that information is available to support a reduction in the valuation allowance based upon the more likely than not test of future utilization of these deferred tax attributes. Based upon our future results of operations, management will review the future utilization of the deferred tax attributes annually. | |||||||||||||||||
Our federal and state net operating loss carryover of approximately $9.3 million will expire in the years 2028 through 2031. In addition, certain portions of the net operating loss carry forward may be limited related to Section 382 of the Internal Revenue Code. Our charitable contribution carryover will expire in the years 2013 through 2018. The net change in the valuation allowance account from December 28, 2012 to December 27, 2013 was a decrease of approximately $1.6 million. | |||||||||||||||||
Management estimates that our combined federal and state tax rates will be approximately 38%. The items accounting for the difference between income taxes computed at the statutory federal income tax rate and the income taxes reported on the statements of income are as follows: | |||||||||||||||||
27-Dec-13 | 28-Dec-12 | ||||||||||||||||
Income tax expense (benefit) based on statutory rate | $ | 1,036,000 | 34 | % | $ | 856,000 | 34 | % | |||||||||
Permanent differences | 48,000 | 2 | % | (202,000 | ) | -8 | % | ||||||||||
State income taxes expense net of federal taxes | 422,000 | 14 | % | 215,000 | 9 | % | |||||||||||
Change in valuation allowance | (1,634,000 | ) | -55 | % | 744,000 | 29 | % | ||||||||||
Change in fair value of derivatives | 267,000 | 9 | % | (286,000 | ) | -11 | % | ||||||||||
Other | (2,000 | ) | 0 | % | (369,000 | ) | -15 | % | |||||||||
Total taxes (benefits) on income | $ | 137,000 | 4 | % | $ | 958,000 | 38 | % | |||||||||
We have analyzed our filing positions in all jurisdictions where we are required to file income tax returns and found no positions that would require a liability for unrecognized income tax benefits to be recognized. We are subject to possible tax examinations for the years 2010 through 2013. We deduct interest and penalties as interest expense on the consolidated financial statements. |
10_COMMITMENTS_AND_CONTINGENCI
10. COMMITMENTS AND CONTINGENCIES | 12 Months Ended | ||||
Dec. 27, 2013 | |||||
Commitments And Contingencies | ' | ||||
Note 10 - COMMITMENTS AND CONTINGENCIES | ' | ||||
We presently lease office space for our corporate headquarters in Coeur d’Alene, Idaho. In August 2012, we executed the lease on this facility for a three year term, expiring September 14, 2015, with an option to renew for an additional three years. We pay approximately $4,000 per month for use of the building. Pursuant to the lease, as the sole occupant of the property we are responsible for payment of typical triple net charges for property taxes, insurance and maintenance. | |||||
We also lease the facilities for all of our store locations. All of these facilities are leased at market rates that vary in amount depending on location. Each store is between 1,000 and 5,000 square feet, depending on location and market conditions. | |||||
Operating leases: We lease store facilities, vehicles, and equipment. Most of our store leases have terms that extend over three to five years. Some of the leases have cancellation provisions that allow us to cancel with 90 days' notice. Other leases have been in existence long enough that the term has expired and we are currently occupying the premises on month-to-month tenancies. Minimum lease obligations for the next five years as of December 27, 2013 are: | |||||
Year | Operating Lease Obligation | ||||
2014 | $ | 700,836 | |||
2015 | 549,931 | ||||
2016 | 285,663 | ||||
2017 | 52,146 | ||||
2018 | - | ||||
$ | 1,588,576 | ||||
Total lease expense for the fiscal years ended December 27, 2013 and December 28, 2012 were approximately $1.4 million and $1.5 million, respectively. | |||||
Legal Proceeding: From time to time we are involved in various legal proceedings. We believe that the outcome of these proceedings, even if determined adversely, will not have a material adverse effect on our business, financial condition and results of operations. |
11_SUBSEQUENT_EVENTS
11. SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 27, 2013 | |
Subsequent Events [Abstract] | ' |
Note 11 - SUBSEQUENT EVENTS | ' |
In March 2014 we received notice that a non-management owner has elected to exercise 4.2 million warrants with a strike price of $0.08 per share. These shares have not been issued as of the date of the release of these financial statements, but we anticipate they will be issued in the near future. |
1_BASIS_OF_PRESENTATION_AND_SU
1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended | |||||||||
Dec. 27, 2013 | ||||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies Policies | ' | |||||||||
Nature of Business | ' | |||||||||
Description of Business: Command Center, Inc. ("Command Center,” the “Company,” “CCI,” “we,” "us," or “our”) is a Washington corporation initially organized in 2002. We reorganized in 2005 and 2006 and now provide on-demand employees for manual labor, light industrial, and skilled trade’s applications. Our customers are primarily small to mid-sized businesses in the restoration, wholesale trades, manufacturing, hospitality, construction and retail industries. We currently operate 56 stores located in 23 states. Our largest 10 customers represent approximately 20% of our revenue. We operate as: Command Center, Inc., Disaster Recovery Services, Inc. (“DR Services”), and as Bakken Staffing, a dba utilized in North Dakota. | ||||||||||
Basis of Presentation | ' | |||||||||
Basis of Presentation: The consolidated financial statements include the accounts of Command Center, Inc. and all of our wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. The consolidated financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). | ||||||||||
Use of Estimates | ' | |||||||||
Use of Estimates: The preparation of consolidated financial statements in conformity with generally accepted accounting principles requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. | ||||||||||
Fiscal Year End | ' | |||||||||
Fiscal Year End: Our consolidated financial statements are presented on a 52/53-week fiscal year end basis, with the last day of the fiscal year being the last Friday of each calendar year. In fiscal years consisting of 53 weeks, the final quarter will consist of 14 weeks. Fiscal years 2013 and 2012 both consisted of 52 weeks. | ||||||||||
Reclassifications | ' | |||||||||
Reclassifications: Certain amounts in the consolidated financial statements for 2012 have been reclassified to conform to the 2013 presentation. These reclassifications have no effect on net income, earnings per share, or stockholders’ equity as previously reported. | ||||||||||
Revenue Recognition | ' | |||||||||
Revenue Recognition: We generate revenues primarily from providing on-demand labor services. Revenue from services is recognized at the time the service is performed and is net of adjustments related to customer credits. Revenues are reported net of customer credits and taxes collected from customers that are remitted to taxing authorities. | ||||||||||
Cost of Staffing Services | ' | |||||||||
Cost of Staffing Services: Cost of services includes the wages of temporary employees, related payroll taxes, workers’ compensation expenses, and other direct costs of services. | ||||||||||
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. At December 27, 2013, we held deposits in excess of FDIC insured limits of approximately $5.3 million. | ||||||||||
Restricted Cash | ' | |||||||||
Restricted Cash: We maintained a cash balance that is held on deposit as a requirement of our workers’ compensation insurance provider. | ||||||||||
Accounts Receivable and Allowance for Doubtful Accounts | ' | |||||||||
Accounts Receivable and Allowance for Doubtful Accounts: Accounts receivable are carried at their estimated recoverable amount, net of allowances. We regularly review our accounts receivable for collectability. The allowance for doubtful accounts is determined based on historical write-off experience, age of receivable, other qualitative factors and extenuating circumstances, and current economic data and represents our best estimate of the amount of probable losses on our accounts receivable. The allowance for doubtful accounts is reviewed monthly. Generally, we refer overdue balances to a collection agency at 120 days and the collection agent typically pursues collection for another 60 or more days. All balances over 180 days past due are either written off as bad debt or fully reserved. At December 27, 2013 and December 28, 2012, our allowance for doubtful accounts was approximately $637,000 and $519,000, respectively. | ||||||||||
Property and Equipment | ' | |||||||||
Property and Equipment: Property and equipment are recorded at cost. We compute depreciation using the straight-line method over the estimated useful lives, typically three to five years. Leasehold improvements are capitalized and amortized over the shorter of the non-cancelable lease term or their useful lives. Repairs and maintenance are expensed as incurred. When assets are sold or retired, cost and accumulated depreciation are eliminated from the consolidated balance sheet and gain or loss is reflected in the consolidated statement of income. | ||||||||||
Capitalized Software Development Costs | ' | |||||||||
Capitalized Software Development Costs: We expense costs incurred in the preliminary project stage of developing or acquiring internal use software. Once the preliminary assessment is complete, management authorizes the project. When it is probable that the project will be completed, will result in new software or added functionality of existing software, and the software will be used for the function intended, we capitalize subsequent software development costs. The capitalized costs are amortized on a straight-line basis over the estimated useful life of the software which ranges from three to seven years. | ||||||||||
Workersb Compensation Reserves | ' | |||||||||
Workers’ Compensation Reserves: In accordance with the terms of our workers’ compensation liability insurance policy, we maintain reserves for workers’ compensation claims to cover our cost of all claims. We use third party actuarial estimates of the future costs of the claims and related expenses discounted by a 3% present value interest rate to determine the amount of our reserves. We evaluate the reserves regularly throughout the year and make adjustments as needed. If the actual cost of the claims incurred and related expenses exceed the amounts estimated, additional reserves may be required. In monopolistic states, we utilize the state funds for our workers’ compensation insurance and pay our premiums in accordance with the state plans. | ||||||||||
Goodwill and Other Intangible Assets | ' | |||||||||
Goodwill and Other Intangible Assets: Goodwill represents the excess purchase price over the fair value of identifiable assets received attributable to business acquisitions and combinations. Goodwill and other intangible assets are measured for impairment at least annually and/or whenever events and circumstances arise that indicate impairment may exist, such as a significant adverse change in the business climate. In assessing the value of goodwill, assets and liabilities are assigned to the reporting units and the appropriate valuation methodologies are used to determine fair value at the reporting unit level. Identified intangible assets are amortized using the straight-line method over their estimated useful lives which are estimated to be between three and seven years. | ||||||||||
Fair Value of Financial Instruments | ' | |||||||||
Fair Value of Financial Instruments: We carry financial instruments on the consolidated balance sheet at the fair value of the instruments as of the consolidated balance sheet date. At the end of each period, management assesses the fair value of each instrument and adjusts the carrying value to reflect its assessment. At December 27, 2013 and December 28, 2012, the carrying values of accounts receivable and accounts payable approximated their fair values. | ||||||||||
Derivatives | ' | |||||||||
Derivatives: From time to time, we enter into transactions which contain conversion privileges, the settlement of which may entitle the holder or us to settle the obligation(s) by issuance of Company securities. When we enter into transactions which allow us to settle obligations by the issuance of Company securities, fair value is estimated each reporting period. | ||||||||||
Income Taxes | ' | |||||||||
Income Taxes: We account for income taxes under the liability method, whereby deferred income tax liabilities or assets at the end of each period are determined using the tax rate expected to be in effect when the taxes are actually paid or recovered. A valuation allowance is recognized on deferred tax assets when it is more likely than not that some or all of these deferred tax assets will not be realized. Our policy is to prescribe a recognition threshold and measurement attribute for the recognition and measurement of a tax position taken or expected to be taken in a tax return. We have analyzed our filing positions in all jurisdictions where we are required to file returns, and found no positions that would require a liability for unrecognized income tax positions to be recognized. We are subject to tax examinations. In the event that we are assessed penalties and or interest, penalties will be charged to other financing expense and interest will be charged to interest expense. | ||||||||||
Earnings per Share | ' | |||||||||
Earnings per Share: We follow financial accounting standards which require the calculation of basic and diluted 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 warrants, and/or stock options. We had common stock equivalents outstanding to purchase 6,879,125 and 13,835,053 shares of common stock at December 27, 2013 and December 28, 2012, respectively. If we incur losses in the periods presented, or if conversion into common shares is anti-dilutive, basic and dilutive earnings per share are equal. At December 27, 2013 and December 28, 2012, we had 1,693,466 and 3,888,715 dilutive shares relating to vested stock options, warrants, and shares to be issued for contingent consideration, respectively. | ||||||||||
Share-Based Compensation | ' | |||||||||
Share-Based Compensation: Periodically, we issue common shares or options to purchase our common shares to our officers, directors, employees, or other parties. Compensation expense for these equity awards are recognized over the vesting period, based on the fair value on the grant date. We recognize compensation expense for only the portion of options that are expected to vest, rather than record forfeitures when they occur. If the actual number of forfeitures differs from those estimated by management, additional adjustments to compensation expense may be required in the future periods. We determine the fair value of equity awards using the Black-Scholes valuation model. | ||||||||||
Advertising Costs | ' | |||||||||
Advertising Costs: Advertising costs consist primarily of print and other promotional activities. We expense advertisements as incurred. During the years ended December 27, 2013 and December 28, 2012, advertising cost were included in selling, general and administrative expenses were approximately $34,000 and $62,000, respectively. | ||||||||||
Concentrations | ' | |||||||||
Concentrations: At December 27, 2013 we had a concentration in accounts receivable where the total balance due from a single client was 13.0% of total accounts receivable. At December 27, 2013 and December 28, 2012, we had a concentration in accounts payable where the total balance due to a single vendor was 10.3% and 10.9% of total accounts payable, respectively. A reduction or loss of business with this client, or service from this vendor, could have a material adverse effect on our results of operations and financial condition. | ||||||||||
Long-lived asset impairment | ' | |||||||||
Long-lived asset impairment: Long-lived assets include property and equipment and definite-lived intangible assets. Definite-lived intangible assets consist of customer relationships, trade names and non-compete agreements. Long-lived assets are measured for impairment at least annually and/or whenever events and circumstances arise that indicate that the carrying value of the assets may not be recoverable. | ||||||||||
Checks Issued and Outstanding | ' | |||||||||
Checks Issued and Outstanding: When checks drafted at a financial institution are in excess of funds on deposit at that financial institution, determined on an entity by entity basis, they are presented as a current liability on the consolidated balance sheet. | ||||||||||
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 a stock warrant and contingent liability. | ||||||||||
The following table sets forth our assets and liabilities measured at fair value, whether recurring or non-recurring, at December 27, 2013 and December 28, 2012, and the fair value calculation input hierarchy level that we have determined applies to each asset and liability category. | ||||||||||
2013 | 2012 | Input Hierarchy Level | ||||||||
Recurring: | ||||||||||
Stock Warrant liability | $ | 1,386,088 | $ | 599,473 | Level 2 | |||||
Contingent liability | - | 322,874 | Level 2 | |||||||
Recent Accounting Pronouncements | ' | |||||||||
Recent Accounting Pronouncements: 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 guidance became effective for us beginning in our fiscal year 2013. | ||||||||||
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. In fiscal year 2013, the adoption of other accounting standards had no material impact on our financial positions, results of operations or cash flows. |
1_BASIS_OF_PRESENTATION_AND_SU1
1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended | |||||||||
Dec. 27, 2013 | ||||||||||
Basis Of Presentation And Summary Of Significant Accounting Policies Tables | ' | |||||||||
Schedule of fair value of financial instruments | ' | |||||||||
2013 | 2012 | Input Hierarchy Level | ||||||||
Recurring: | ||||||||||
Stock Warrant liability | $ | 1,386,088 | $ | 599,473 | Level 2 | |||||
Contingent liability | - | 322,874 | Level 2 |
2_ACQUISITIONS_Tables
2. ACQUISITIONS (Tables) | 12 Months Ended | ||||
Dec. 27, 2013 | |||||
Acquisitions Tables | ' | ||||
Asset purchase agreement | ' | ||||
Consideration Transferred: | |||||
Cash | $ | 150,000 | |||
Note payable | 150,000 | ||||
Equity instruments (1.5 million shares of restricted common stock) | 390,000 | ||||
Contingent consideration (Up to an additional 1.5 million shares of restricted common stock) | 851,727 | ||||
$ | 1,541,727 | ||||
Identifiable Assets and Goodwill Acquired: | |||||
Customer list | $ | 608,096 | |||
Trade name | 36,830 | ||||
Vehicles and machinery | 79,852 | ||||
Other tangible property | 10,163 | ||||
Goodwill | 806,786 | ||||
$ | 1,541,727 | ||||
Fair value of contingent liability | ' | ||||
Command Center, Inc. future stock price | $ | 0.50 - $2.10 | |||
DRSI quarterly revenue growth | 10.0% - 40.0 | % |
3_PROPERTY_AND_EQUIPMENT_Table
3. PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended | ||||||||
Dec. 27, 2013 | |||||||||
Property And Equipment Tables | ' | ||||||||
Property and equipment | ' | ||||||||
2013 | 2012 | ||||||||
Leasehold improvements | $ | 587,593 | $ | 573,796 | |||||
Vehicles and machinery | 99,509 | 224,361 | |||||||
Furniture and fixtures | 51,696 | 56,883 | |||||||
Computer hardware and licensed software | 250,964 | 233,594 | |||||||
Accumulated depreciation | (644,935 | ) | (534,988 | ) | |||||
344,827 | 553,646 | ||||||||
Software development costs | 292,495 | 356,848 | |||||||
Accumulated amortization | (286,555 | ) | (300,722 | ) | |||||
5,940 | 56,126 | ||||||||
Total property and equipment, net | $ | 350,767 | $ | 609,772 |
4_GOODWILL_AND_INTANGIBLE_ASSE1
4. GOODWILL AND INTANGIBLE ASSETS (Tables) | 12 Months Ended | ||||||||
Dec. 27, 2013 | |||||||||
Goodwill And Intangible Assets Tables | ' | ||||||||
Intangible assets, other than goodwill | ' | ||||||||
2013 | 2012 | ||||||||
Customer relationships | $ | 1 ,420,096 | $ | 1,420,096 | |||||
Trade names and other | 41,780 | 41,780 | |||||||
Accumulated amortization | (1,074,920 | ) | (939,341 | ) | |||||
Intangible asset, net | $ | 386,956 | $ | 522,535 |
6_WORKERS_COMPENSATION_INSURAN1
6. WORKERS' COMPENSATION INSURANCE AND RESERVES (Tables) | 12 Months Ended | ||||||||
Dec. 27, 2013 | |||||||||
Workers Compensation Insurance And Reserves Tables | ' | ||||||||
Workers' compensation expense | ' | ||||||||
2013 | 2012 | ||||||||
Workers’ Compensation Deposits | |||||||||
Workers’ compensation deposits available at the beginning of the period | $ | 1,706,195 | $ | 928,834 | |||||
Additional workers’ compensation deposits made during the period | 1,360,000 | 1,850,000 | |||||||
Deposits applied to payment of claims during the period | (170,082 | ) | (1,072,639 | ) | |||||
Deposits available for future claims at the end of the period | $ | 2,896,113 | $ | 1,706,195 | |||||
Workers’ Compensation Claims Liability | |||||||||
Estimated future claims liabilities at the beginning of the period | $ | 3,710,925 | $ | 2,946,675 | |||||
Claims paid during the period | (1,653,694 | ) | (1,626,182 | ) | |||||
Additional future claims liabilities recorded during the period | 1,669,640 | 2,390,432 | |||||||
Estimated future claims liabilities at the end of the period | $ | 3,726,871 | $ | 3,710,925 |
7_STOCKHOLDERS_EQUITY_Tables
7. STOCKHOLDERSb EQUITY (Tables) | 12 Months Ended | ||||||||
Dec. 27, 2013 | |||||||||
Stockholders Equity Tables | ' | ||||||||
Warrants Outstanding | ' | ||||||||
2013 | 2012 | ||||||||
Warrants outstanding at beginning of year | 11,887,803 | 12,137,803 | |||||||
Expired | (6,312,803 | ) | - | ||||||
Cancelled | - | (250,000 | ) | ||||||
Warrants outstanding at end of year | 5,575,000 | 11,887,803 | |||||||
Detail of Warrants Outstanding | ' | ||||||||
Number | Expiration Date | ||||||||
Exercisable at $0.08 per share | 4,200,000 | 4/1/14 | |||||||
Exercisable at between $0.50 and $1.00 per share | 1,375,000 | 4/15/14 to 4/15/15 | |||||||
5,575,000 | |||||||||
Fair value of outstanding warrants using the Black-Scholes pricing model | ' | ||||||||
December 27, | December 28, | ||||||||
2013 | 2012 | ||||||||
Expected term (years) | 0.26 | 1.3 | |||||||
Expected volatility | 93.2 | % | 95.2 | % | |||||
Dividend yield | 0 | % | 0 | % | |||||
Risk-free rate | 0.07 | % | 0.2 | % |
8_STOCK_BASED_COMPENSATION_Tab
8. STOCK BASED COMPENSATION (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 27, 2013 | |||||||||||||||||
Stock Based Compensation | ' | ||||||||||||||||
Stock based Compensation | ' | ||||||||||||||||
Number of Shares Under Options | Weighted Average Exercise Price Per Share | Weighted Average Fair Value Per Share | |||||||||||||||
Outstanding, December 30, 2011 | 3,092,000 | $ | 0.2 | $ | 0.17 | ||||||||||||
Granted | 1,875,000 | 0.41 | 0.33 | ||||||||||||||
Forfeited | (281,750 | ) | 0.28 | 0.24 | |||||||||||||
Expired | (602,250 | ) | 0.3 | 0.22 | |||||||||||||
Outstanding, December 28, 2012 | 4,083,000 | 0.2 | 0.17 | ||||||||||||||
Granted | 1,500,000 | 0.2 | 0.16 | ||||||||||||||
Forfeited | (899,125 | ) | 0.3 | 0.25 | |||||||||||||
Expired | (733,375 | ) | 0.21 | 0.17 | |||||||||||||
Outstanding, December 27, 2013 | 3,950,500 | 0.26 | 0.17 | ||||||||||||||
Fair Value Assumption | ' | ||||||||||||||||
December 27, | December 28, | ||||||||||||||||
2013 | 2012 | ||||||||||||||||
Expected term (years) | 5 | 5 | |||||||||||||||
Expected volatility | 114.1 | % | 116.9 | % | |||||||||||||
Dividend yield | 0 | % | 0 | % | |||||||||||||
Risk-free rate | 0.8 | % | 0.8 | % | |||||||||||||
Nonvested stock options outstanding | ' | ||||||||||||||||
Number of | Weighted Average Exercise Price per Share | Weighted Average Grant Date Fair Value | |||||||||||||||
Options | |||||||||||||||||
Nonvested, December 30, 2011 | 1,652,750 | 0.17 | 0.15 | ||||||||||||||
Granted | 1,875,000 | 0.41 | 0.33 | ||||||||||||||
Vested | (510,250 | ) | 0.17 | 0.15 | |||||||||||||
Forfeited | (281,750 | ) | 0.28 | 0.24 | |||||||||||||
Nonvested, December 28, 2012 | 2,735,750 | 0.17 | 0.15 | ||||||||||||||
Granted | 1,500,000 | 0.2 | 0.16 | ||||||||||||||
Vested | (690,250 | ) | 0.3 | 0.25 | |||||||||||||
Forfeited | (899,125 | ) | 0.3 | 0.25 | |||||||||||||
Nonvested, December 27, 2013 | 2,646,375 | 0.27 | 0.22 | ||||||||||||||
Intrinsic value | ' | ||||||||||||||||
Number of Options | Weighted Average Exercise Price Per Share | Weighted Average Remaining Contractual Life (years) | Aggregate Intrinsic Value | ||||||||||||||
Outstanding | 3,950,500 | $ | 0.26 | 3.02 | $ | 737,454 | |||||||||||
Exercisable | 1,304,125 | 0.23 | 1.77 | 75,860 |
9_INCOME_TAX_Tables
9. INCOME TAX (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 27, 2013 | |||||||||||||||||
Income Tax Tables | ' | ||||||||||||||||
Provision for income taxes | ' | ||||||||||||||||
December 27, | December 28, | ||||||||||||||||
2013 | 2012 | ||||||||||||||||
Current | |||||||||||||||||
Federal | $ | 96,000 | $ | 39,000 | |||||||||||||
State | 41,000 | 7,000 | |||||||||||||||
Deferred | |||||||||||||||||
Federal | 1,239,000 | (40,000 | ) | ||||||||||||||
State | 395,000 | 208,000 | |||||||||||||||
Change in valuation allowance | (1,634,000 | ) | 744,000 | ||||||||||||||
Provision for income taxes | $ | 137,000 | $ | 958,000 | |||||||||||||
Deferred tax assets | ' | ||||||||||||||||
December 27, | December 28, | ||||||||||||||||
2013 | 2012 | ||||||||||||||||
Current deferred tax assets and liabilities | |||||||||||||||||
Accrued Bonus | $ | 220,000 | $ | - | |||||||||||||
Accrued Vacation | 62,000 | 65,000 | |||||||||||||||
Total current deferred tax asset | 282,000 | 65,000 | |||||||||||||||
Long-term deferred tax assets and liabilities | |||||||||||||||||
Workers' compensation claims liability | 1,401,000 | 1,444,000 | |||||||||||||||
Property, plant, equipment and intangibles | 252,000 | 238,000 | |||||||||||||||
Bad debt reserve | 239,000 | 202,000 | |||||||||||||||
Other assets | 17,000 | 14,000 | |||||||||||||||
NOL | 3,486,000 | 5,460,000 | |||||||||||||||
AMT Credit | 151,000 | 39,000 | |||||||||||||||
Total long-term deferred tax asset | 5,546,000 | 7,397,000 | |||||||||||||||
Total deferred tax asset | 5,828,000 | 7,462,000 | |||||||||||||||
Valuation allowance | (5,828,000 | ) | (7,462,000 | ) | |||||||||||||
Total deferred tax asset, net of valuation allowance | $ | - | $ | - | |||||||||||||
Effective income tax reconciliation | ' | ||||||||||||||||
27-Dec-13 | 28-Dec-12 | ||||||||||||||||
Income tax expense (benefit) based on statutory rate | $ | 1,036,000 | 34 | % | $ | 856,000 | 34 | % | |||||||||
Permanent differences | 48,000 | 2 | % | (202,000 | ) | -8 | % | ||||||||||
State income taxes expense net of federal taxes | 422,000 | 14 | % | 215,000 | 9 | % | |||||||||||
Change in valuation allowance | (1,634,000 | ) | -55 | % | 744,000 | 29 | % | ||||||||||
Change in fair value of derivatives | 267,000 | 9 | % | (286,000 | ) | -11 | % | ||||||||||
Other | (2,000 | ) | 0 | % | (369,000 | ) | -15 | % | |||||||||
Total taxes (benefits) on income | $ | 137,000 | 4 | % | $ | 958,000 | 38 | % |
10_COMMITMENTS_AND_CONTINGENCI1
10. COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended | ||||
Dec. 27, 2013 | |||||
Commitments And Contingencies Tables | ' | ||||
Minimum lease obligations | ' | ||||
Year | Operating Lease Obligation | ||||
2014 | $ | 700,836 | |||
2015 | 549,931 | ||||
2016 | 285,663 | ||||
2017 | 52,146 | ||||
2018 | - | ||||
$ | 1,588,576 |
1_SUMMARY_OF_SIGNIFICANT_ACCOU1
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $) | Dec. 27, 2013 | Dec. 28, 2012 |
Recurring: | ' | ' |
Stock warrant liability (Level 2) | $1,386,088 | $599,473 |
Contingent liability (Level 2) | ' | $322,874 |
1_SUMMARY_OF_SIGNIFICANT_ACCOU2
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) (USD $) | Dec. 27, 2013 | Dec. 28, 2012 |
Summary Of Significant Accounting Policies Details Narrative | ' | ' |
FDIC insured limits | $250,000 | ' |
Allowance for doubtful accounts | 637,000 | 519,000 |
Common stock equivalents outstanding to purchase | 6,879,125 | 13,835,053 |
Dilutive shares relating to vested stock options and warrants | 1,693,466 | 3,888,715 |
Advertising cost | $34,000 | $62,000 |
Accounts payable customer percentage | 10.30% | 10.90% |
4_ACQUISITIONS_Details
4. ACQUISITIONS (Details) (USD $) | 12 Months Ended |
Dec. 27, 2013 | |
Consideration Transferred: | ' |
Cash | $150,000 |
Note payable | 150,000 |
Equity instruments (1.5 million shares of restricted common stock) | 390,000 |
Contingent consideration (Up to an additional 1.5 million shares of restricted common stock) | 851,727 |
Total Considerations | 1,541,727 |
Identifiable Assets and Goodwill Acquired: | ' |
Customer list | 608,096 |
Trade name | 36,830 |
Vehicles and machinery | 79,852 |
Other tangible property | 10,163 |
Goodwill | 806,786 |
Total Identifiable Assets and Goodwill | $1,541,727 |
2_ACQUISITIONS_Details_1
2. ACQUISITIONS (Details 1) (USD $) | Dec. 27, 2013 |
Common stock issued for interest and services | ' |
Command Center, Inc. future stock price, minimum | $0.50 |
Command Center, Inc. future stock price, maximum | $2.10 |
DRSI quarterly revenue growth, minimum | 10.00% |
DRSI quarterly revenue growth, maximum | 40.00% |
2_ACQUISITIONS_Details_Narrati
2. ACQUISITIONS (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 28, 2012 | Dec. 27, 2013 | |
Business Combination, Description [Abstract] | ' | ' |
Change in fair value of derivative liabilities | $458,000 | ' |
Shares issuable | 1,300,000 | 1,300,000 |
Contingent consideration earned and due | $323,000 | $323,000 |
3_PROPERTY_AND_EQUIPMENT_Detai
3. PROPERTY AND EQUIPMENT (Details) (USD $) | Dec. 27, 2013 | Dec. 28, 2012 |
Property And Equipment Details | ' | ' |
Leasehold improvements | $587,593 | $573,796 |
Vehicles and machinery | 99,509 | 224,361 |
Furniture and fixtures | 51,696 | 56,883 |
Computer hardware and licensed software | 250,964 | 233,594 |
Accumulated depreciation | -644,935 | -534,988 |
Subtotal | 344,827 | 553,646 |
Software development costs | 292,495 | 356,848 |
Accumulated amortization | -286,555 | -300,722 |
Software development costs, Net | 5,940 | 56,126 |
Total property and equipment, net | $350,767 | $609,772 |
3_PROPERTY_AND_EQUIPMENT_Detai1
3. PROPERTY AND EQUIPMENT (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 27, 2013 | Dec. 28, 2012 | |
Property And Equipment Details Narrative | ' | ' |
Depreciation and amortization expense | $216,000 | $197,000 |
4_GOODWILL_AND_INTANGIBLE_ASSE2
4. GOODWILL AND INTANGIBLE ASSETS (Details) (USD $) | Dec. 27, 2013 | Dec. 28, 2012 |
Goodwill And Intangible Assets Details | ' | ' |
Customer relationships | $1,420,096 | $1,420,096 |
Trade names and other | 41,780 | 41,780 |
Accumulated amortization | -1,074,920 | -939,341 |
Intangible asset, net | $386,956 | $522,535 |
4_GOODWILL_AND_INTANGIBLE_ASSE3
4. GOODWILL AND INTANGIBLE ASSETS (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 27, 2013 | Dec. 28, 2012 | |
Goodwill And Intangible Assets Details Narrative | ' | ' |
Amortization expense related to intangible assets | $136,000 | $174,000 |
5_FACTORING_AGREEMENT_LINE_OF_1
5. FACTORING AGREEMENT & LINE OF CREDIT FACILITY (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 27, 2013 | Dec. 28, 2012 | |
Factoring Agreement Line Of Credit Facility Details Narrative | ' | ' |
Line of credit facility maximum | $14,000,000 | $15,000,000 |
Net accounts receivable sold | $8,100,000 | $9,100,000 |
Term of the agreement expired | 'April 7, 2016 | ' |
Effective interest rate | 3.20% | ' |
5_WORKERS_COMPENSATION_INSURAN
5. WORKERS' COMPENSATION INSURANCE AND RESERVES (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 27, 2013 | Dec. 28, 2012 | |
Workers Compensation Insurance And Reserves Details Narrative | ' | ' |
Workers' compensation expense for temporary worker | $4,300,000 | $4,100,000 |
Deposit with previous insurer | 684,000 | ' |
Risk pool deposit | $414,000 | ' |
6_WORKERS_COMPENSATION_INSURAN2
6. WORKERS' COMPENSATION INSURANCE AND RESERVES (Details) (USD $) | 12 Months Ended | |
Dec. 27, 2013 | Dec. 28, 2012 | |
Workersb Compensation Deposits | ' | ' |
Workersb compensation deposits available at the beginning of the period | $1,706,195 | $928,834 |
Additional workersb compensation deposits made during the period | 1,360,000 | 1,850,000 |
Deposits applied to payment of claims during the period | -170,082 | -1,072,639 |
Deposits available for future claims at the end of the period | 2,896,113 | 1,706,195 |
Workersb Compensation Claims Liability | ' | ' |
Estimated future claims liabilities at the beginning of the period | 3,710,925 | 2,946,675 |
Claims paid during the period | -1,653,694 | -1,626,182 |
Additional future claims liabilities recorded during the period | 1,669,640 | 2,390,432 |
Estimated future claims liabilities at the end of the period | $3,726,871 | $3,710,925 |
7_STOCKHOLDERS_EQUITY_Details
7. STOCKHOLDERS' EQUITY (Details) | 12 Months Ended | |
Dec. 27, 2013 | Dec. 28, 2012 | |
Stockholders Equity Details | ' | ' |
Warrants outstanding at beginning of year | 11,887,803 | 12,137,803 |
Expired | -6,312,803 | ' |
Cancelled | ' | -250,000 |
Warrants outstanding at end of year | 5,575,000 | 11,887,803 |
7_STOCKHOLDERS_EQUITY_Details_
7. STOCKHOLDERS' EQUITY (Details 1) | Dec. 27, 2013 | Dec. 28, 2012 | Dec. 30, 2011 |
Number of warrants | 5,575,000 | 11,887,803 | 12,137,803 |
Exercisable at $0.08 per share [Member] | ' | ' | ' |
Number of warrants | 4,200,000 | ' | ' |
Expiration Date of warants | '4/1/2014 | ' | ' |
Exercisable at between $0.50 and $1.00 per share [Member] | ' | ' | ' |
Number of warrants | 1,375,000 | ' | ' |
Expiration Date of warants | '4/15/14 to 4/15/15 | ' | ' |
7_STOCKHOLDERS_EQUITY_Details_1
7. STOCKHOLDERS' EQUITY (Details 2) | Dec. 27, 2013 | Dec. 28, 2012 |
Stockholders Equity Details 2 | ' | ' |
Expected terms (years) | '3 months 4 days | '1 year 3 months 18 days |
Expecteced volatility | 93.20% | 95.20% |
Dividend yield | 0.00% | 0.00% |
Risk-free rate | 0.07% | 0.20% |
7_STOCKHOLDERS_EQUITY_Details_2
7. STOCKHOLDERS' EQUITY (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 27, 2013 | Dec. 28, 2012 | |
Stockholders Equity Details Narrative | ' | ' |
Change in fair value | ($787,000) | $384,000 |
8_STOCK_BASED_COMPENSATION_Det
8. STOCK BASED COMPENSATION (Details) (USD $) | 12 Months Ended | |
Dec. 27, 2013 | Dec. 28, 2012 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ' | ' |
Number of Options Outstanding, Beginning Balance | 4,083,000 | 3,092,000 |
Granted, option | 1,500,000 | 1,875,000 |
Forfeited, option | -899,125 | -281,750 |
Expired, Option | -733,375 | -602,250 |
Number of Options Outstanding, Ending Balance | 3,950,500 | 4,083,000 |
Weighted Average Exercise Price Per Share, Outstanding, Beginning | $0.20 | $0.20 |
Granted, Weighted Average Exercise Price Per Share | $0.20 | $0.41 |
Forfeited, Weighted Average Exercise Price Per Share | $0.30 | $0.28 |
Weighted Average Exercise Price Per Share, Expired | $0.21 | $0.30 |
Weighted Average Exercise Price Per Share, Outstanding, Ending | $0.26 | $0.20 |
Weighted Average Fair Value Per Share Outstanding, Beginning | $0.17 | $0.17 |
Granted, Weighted Average Fair Value Per Share | $0.16 | $0.33 |
Forfeited, Weighted Average Fair Value Per Share | $0.25 | $0.24 |
Weighted Average Fair Value Per Share, Expired | $0.17 | $0.22 |
Weighted Average Fair Value Per ShareOutstanding, Ending | $0.17 | $0.17 |
8_STOCK_BASED_COMPENSATION_Det1
8. STOCK BASED COMPENSATION (Details 1) | 12 Months Ended | |
Dec. 27, 2013 | Dec. 28, 2012 | |
Stock Based Compensation Details 1 | ' | ' |
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% |
8_STOCK_BASED_COMPENSATION_Det2
8. STOCK BASED COMPENSATION (Details 2) (USD $) | 12 Months Ended | |
Dec. 27, 2013 | Dec. 28, 2012 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ' | ' |
Number of Nonvested Options Outstanding, Beginning Balance | 2,735,750 | 1,652,750 |
Granted, Nonvested | 1,500,000 | 1,875,000 |
Vested, Nonvested | -690,250 | -510,250 |
Forfeited, Nonvested | -899,125 | -281,750 |
Number of Nonvested Options Outstanding, Ending Balance | 2,646,375 | 2,735,750 |
Weighted Average Exercise Price Per Share, Outstanding, Nonvested, Beginning | $0.17 | $0.17 |
Granted, Weighted Average Exercise Price Per Share | $0.20 | $0.41 |
Weighted Average Exercise Price Per Share, Vested | $0.30 | $0.17 |
Forfeited, Weighted Average Exercise Price Per Share | $0.30 | $0.28 |
Weighted Average Exercise Price Per Share, Outstanding, Nonvested, Ending | $0.27 | $0.17 |
Weighted Average Grant Date Fair Value Per Share Outstanding, Nonvested, Beginning | $0.15 | $0.15 |
Granted, Weighted Average Grant Date Fair Value | $0.16 | $0.33 |
Weighted Average Grant Date Fair Value, Vested | $0.25 | $0.15 |
Forfeited, Weighted Average Grant Date Fair Value | $0.25 | $0.24 |
Weighted Average Grant Date Fair Value Per Share Outstanding, Nonvested, Ending | $0.22 | $0.15 |
8_STOCK_BASED_COMPENSATION_Det3
8. STOCK BASED COMPENSATION (Details 3) (USD $) | Dec. 27, 2013 |
Stock Based Compensation Details 3 | ' |
Number of Options, outstanding | 3,950,500 |
Weighted Average Exercise Price Per Share, Outstanding | $0.26 |
Weighted Average Remaining Contractual Life (years), outstanding | '3 years 7 days |
Aggregate Intrinsic Value, outstanding | $737,454 |
Number of Options, Exercisable | 1,304,125 |
Weighted Average Exercise Price Per Share, Exercisable | $0.23 |
Weighted Average Remaining Contractual Life (years), Exercisable | '1 year 9 months 7 days |
Aggregate Intrinsic Value, Exercisable | $75,860 |
9_INCOME_TAX_Details
9. INCOME TAX (Details) (USD $) | 12 Months Ended | |
Dec. 27, 2013 | Dec. 28, 2012 | |
Current | ' | ' |
Federal | $96,000 | $39,000 |
State | 41,000 | 7,000 |
Deferred | ' | ' |
Federal | 1,239,000 | -40,000 |
State | 395,000 | 208,000 |
Change in valuation allowance | -1,634,000 | 744,000 |
Provision for income taxes | $137,000 | $958,000 |
9_INCOME_TAX_Details_1
9. INCOME TAX (Details 1) (USD $) | Dec. 27, 2013 | Dec. 28, 2012 |
Current deferred tax assets and liabilities | ' | ' |
Accrued Bonus | $220,000 | ' |
Accrued Vacation | 62,000 | 65,000 |
Total current deferred tax asset | 282,000 | 65,000 |
Long-term deferred tax assets and liabilities | ' | ' |
Workers' compensation claims liability | 1,401,000 | 1,444,000 |
Property, plant, equipment and intangibles | 252,000 | 238,000 |
Bad debt reserve | 239,000 | 202,000 |
Other assets | 17,000 | 14,000 |
NOL | 3,486,000 | 5,460,000 |
AMT Credit | 151,000 | 39,000 |
Total long-term deferred tax asset | 5,546,000 | 7,397,000 |
Total deferred tax assets | 5,828,000 | 7,462,000 |
Valuation allowance | -5,828,000 | -7,462,000 |
Total deferred tax asset net of valuation allowance | ' | ' |
9_INCOME_TAX_Details_2
9. INCOME TAX (Details 2) (USD $) | 12 Months Ended | |
Dec. 27, 2013 | Dec. 28, 2012 | |
Income Tax Details 2 | ' | ' |
Income tax expense (benefit) based on statutory rate, Amount | $1,036,000 | $856,000 |
Permanent differences, Amount | 48,000 | -202,000 |
State income taxes expense net of federal taxes, Amount | 422,000 | 215,000 |
Change in valuation allowance, Amount | -1,634,000 | 744,000 |
Change in fair value of derivatives, Amount | 267,000 | -286,000 |
Other, Amount | -2,000 | -369,000 |
Total taxes (benefits) on income, Amount | $137,000 | $958,000 |
Income tax expense (benefit) based on statutory rate, Rate | 34.00% | 34.00% |
Permanent differences, Rate | 2.00% | -8.00% |
State income taxes expense net of federal taxes, Rate | 14.00% | 9.00% |
Change in valuation allowance, Rate | -55.00% | 29.00% |
Change in fair value of derivatives, Rate | 9.00% | -11.00% |
Other, Rate | 0.00% | -15.00% |
Total taxes (benefits) on income, Rate | 4.00% | 38.00% |
10_COMMITMENTS_AND_CONTINGENCI2
10. COMMITMENTS AND CONTINGENCIES (Details) (USD $) | Dec. 27, 2013 |
Commitments And Contingencies Details | ' |
2014 | $700,836 |
2015 | 549,931 |
2016 | 285,663 |
2017 | 52,146 |
2018 | ' |
Total | $1,588,576 |