UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 30, 2006
COMMAND CENTER, INC.
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(Exact name of registrant as specified in its charter)
Washington 333-60326 91-2079472
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
3773 West Fifth Avenue, Post Falls, Idaho 83854
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Address of principal executive offices Zip Code
Registrant's telephone number, including area code: 208-773-7450
N.A.
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(Former name or former address, if changes since last report.)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Background Information Applicable to All Items in this Current Report on Form
8-K.
We were incorporated on October 11, 2000 as Temporary Financial Services,
Inc. ("TFS") under the laws of the State of Washington. We were originally
organized to provide accounts receivable financing to temporary labor
businesses. We commenced our lending activities in 2001 and continued providing
accounts receivable financing to temporary labor businesses through 2004. In
2004, we reassessed our lending activities and elected to change our business
focus. As a result, we considered other lending operations, provided financing
to an affiliated financial services firm, and also began looking for other
business opportunities.
On October 6, 2005, TFS entered into a letter of intent to acquire the
assets of Command Staffing, LLC ("Command Staffing"), Harborview Software, Inc.
("Harborview"), and up to 45 companies (collectively, the "Operations Entities")
that collectively owned approximately 70 temporary staffing stores which were
then being operated as either Command Staffing franchisees or independently
owned businesses located throughout the United States. The acquisitions of
Command Staffing, Harborview, and the Operations Entities pursuant to that
certain Asset Purchase Agreement, dated as of November 9, 2005, by and among
TFS, Command Staffing, Harborview, and the Operations Entities (the "Purchase
Agreement") are collectively referred to herein as the "Command Transaction."
The Command Transaction was completed in two phases, with the second phase
being accomplished in two stages. The acquisition of Command Staffing and
Harborview was completed in Phase I of the Command Transaction on November 9,
2005. At that time, we amended our articles of incorporation to change our name
from Temporary Financial Services, Inc. to Command Center, Inc. effective as of
November 14, 2005. The acquisition of the Operations Entities was completed in
Phase II of the Command Transaction.
Phase II was carried out in two stages. Effective May 12, 2006, we
initially closed on the acquisition of 31 Operations Entities (owning a total of
48 temporary staffing stores) in exchange for the issuance of 11,438,022 shares
of our common stock. Eight of the Operations Entities located in the state of
Minnesota received shares in the Command Transaction in exchange for cash in
lieu of the transfer of substantially all of the assets of such Operations
Entities. The Minnesota Operations Entities also agreed to transfer their
respective franchise rights with our company back to us, effectively terminating
such rights and the directors and shareholders of the Minnesota Operations
Entities agreed not to compete with our company.
The second stage of the Phase II Closing involved the acquisition of four
additional Operations Entities (owning a total of nine temporary staffing
stores) in exchange for the issuance of up to 1,459,441 shares of our common
stock. The second stage of the Phase II Closing was completed as of June 30,
2006.
Following completion of the second stage of the Phase II Closing, we have
now acquired 35 Operations Entities owning a total of 57 temporary staffing
stores for 12,897,463 shares of our common stock. We have also opened fourteen
additional temporary staffing stores as company-owned operations since November
9, 2005. As a result, we currently operate 71 temporary staffing stores and
expect to open a small number of additional stores during the remainder of 2006.
Item 1.01. Entry into a Material Definitive Agreement.
The following describes certain aspects of Phase II of the Command
Transaction, including material provisions of the Purchase Agreement. The
following description of the Purchase Agreement does not purport to be complete,
and is subject to, and qualified in its entirety by reference to, the Purchase
Agreement, a copy of which is attached as Exhibit 10.1 to our current report on
Form 8-K dated November 9, 2005 (as filed on November 16, 2005) and is
incorporated herein by reference.
The Purchase Agreement
The Purchase Agreement sets forth the terms and conditions of the Command
Transaction. The acquisition of Command Staffing and Harborview was completed in
Phase I of the Command Transaction on November 9, 2005. We issued 3,745,493 and
2,809,120 shares of our common stock, respectively, for the assets of Command
Staffing and Harborview.
The acquisition of the Operations Entities was completed in Phase II of
the Command Transaction. The Purchase Agreement provided for acquisition of the
net assets of some or all of the Operations Entities in exchange for up to
13,198,512 shares of our common stock. The shares of our common stock issued in
Phase II of the Command Transaction are restricted securities as that term is
defined in Rule 144 adopted under the Securities Act. The company has now
actually acquired the assets of 57 temporary staffing stores from 35 Operations
Entities in exchange for a total of 12,897,463 shares of our common stock. The
remaining Operations Entities referenced in the Purchase Agreement have either
been closed for business reasons or did not meet acquisition due diligence
standards prior to the second stage of the Phase II Closing.
All of the assets of each Operations Entity participating in the Phase II
Closing were acquired, except as set forth in the Purchase Agreement or other
documents executed in connection with the Phase II Closing. In addition, we
assumed only those liabilities of each Operations Entity specified in the
Purchase Agreement or other documents executed in connection with the Phase II
Closing. Liabilities assumed consisted primarily of the balances due under
accounts receivable financing credit facilities of each Operations Entity.
Per the terms of the Purchase Agreement, the Phase II Closing was subject
to customary closing conditions, including, without limitation, (i) our receipt
of all required governmental approvals and third party consents, and (ii) our
satisfaction that workers compensation coverage is available to us for the
business of the Operations Entities following the Phase II Closing. The Phase II
Closing was completed in two stages, with the first stage closing on May 12,
2006, and the second stage closing as of June 30, 2006.
Accounting Treatment
We are accounting for the first and second stages of the Phase II Closing
of the Command Transaction under the purchase method of accounting for business
combinations. Under the purchase method of accounting, the total estimated
purchase price is allocated to the net tangible and intangible assets of an
acquired entity based on their estimated fair values as of the completion of the
transaction. A final determination of these fair values will include
management's consideration of the stock value we place on our common stock being
issued. This valuation will be based on the actual net tangible and intangible
assets of the Operations Entities that exist as of the closing date of the
combination. To the extent that the value of the consideration given by us in
the form of our common stock exceeds the tangible assets acquired, the
difference will be recorded as goodwill.
Tax Treatment
Pursuant to the Purchase Agreement, the Command Transaction is intended to
qualify as a tax free reorganization under Sections 351 and/or 368 of the
Internal Revenue Code of 1986, as amended.
The Operations Entities
The following list includes the Operations Entities whose assets were
acquired as of June 30, 2006 and the total number of shares issued to each
Operations Entity in consideration of the acquisition.
Operations Entity Name Shares
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Everyday Staffing, LLC 579,277
7809-01 Kent, WA, LLC 452,036
Workers for You, Inc. 263,844
Everyday Staffing East, LLC 164,284
TOTAL 1,459,441
Item 2.01. Completion of Acquisition or Disposition of Assets.
Effective as of June 30, 2006, we acquired the operating assets and
assumed a portion of the operating liabilities and obligations of four
Operations Entities comprising nine temporary staffing stores. The assets
acquired consisted primarily of accounts receivable, a small amount of furniture
and fixtures, and intangible rights to operate the business in the future. We
also assumed accounts receivable financing liabilities for each Operations
Entity.
The Operations Entities were owned in part, directly or indirectly, by
officers and directors of our company, among other persons, including:
Glenn Welstad, President and Director
Dwight Enget, Director
The post closing ownerships of the officers and directors are reflected below.
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Post Closing
Name Ownership(1) Post Closing %
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John R. Coghlan 1,753,483 7.6%
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Dwight Enget 1,108,652 4.8%
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Tom Gilbert 561,674 2.4%
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Brad E. Herr 240,000 1.1%
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Ronald L. Junck 2,098,641 9.1%
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C. Eugene Olsen 12,500 0.1%
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Kevin Semerad 1,293,728 5.6%
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Glenn Welstad 7,660,268 33.4%
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Todd Welstad 143,777 0.6%
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Tommy R. Hancock 194,115 0.8%
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All Officers and Directors as a Group 15,066,838 65.5%
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(1) Reflects beneficial ownership after taking into account the issuance of
the shares of our common stock to the Operations Entities in the first and
second stages of the Phase II Closing.
The consideration for the acquisition relating to the second stage of the
Phase II Closing was the issuance of 1,459,441 shares of common stock. Fair
value of the shares was determined in part based on the public market price for
the shares on June 30, 2006, discounted to reflect the estimated effect of
trading restrictions. All of the shares issued in the Command Transaction are
restricted securities as that term is defined in Rule 144 adopted under the
Securities Act of 1933, as amended.
Item 3.02. Unregistered Sales of Equity Securities.
In accordance with the Purchase Agreement, we issued 1,459,441 shares of
our common stock in acquisition of the assets of the Operations Entities in
connection with the second stage of the Phase II Closing. The shares were issued
pursuant to an exemption from registration afforded by Rule 506 of Regulation D
promulgated under the Securities Act of 1933, as amended (the "Act"), and the
exemptions afforded under state "Blue Sky" laws of those states in which the
recipients of our common stock reside. We relied, as applicable, upon the
representations made by the recipients of our common stock and other facts
represented to us after reasonable inquiry in determining that such exemptions
were available. Certificates representing the shares of our common stock
deliverable on the Closing Date are considered restricted stock, as that term is
defined in Rule 144 adopted under the Act, and bear a restrictive legend
prohibiting transfer of the securities unless first registered, or an exemption
from registration is established to our satisfaction.
Item 7.01. Regulation FD Disclosure.
On July 6, 2006, we announced that we acquired the operating assets of the
following four operations entities comprising nine temporary staffing stores. A
copy of the press release is attached to this report as Exhibit 99.1 and is
incorporated herein by reference.
This information is being disclosed pursuant to Regulation FD.
Accordingly, the information in this Form 8-K and the Exhibit attached hereto
shall not be deemed "filed" for purposes of Section 18 of the Securities Act of
1934, nor shall it be deemed incorporated by reference in any filing under the
Securities Act of 1934, except as shall be expressly set forth by specific
reference in such filing.
Item 9.01. Financial Statements and Exhibits.
Financial statements of businesses acquired are not included with this
Form 8-K. As described herein, the acquisitions of the temporary staffing stores
in the second stage of the Phase II Closing was part of the Command Transaction
involving the acquisitions of a number of Operations Entities acquired on May
12, 2006, in addition to those acquired as of June 30, 2006. The stores acquired
as of June 30, 2006 were not audited prior to acquisition and separate financial
information has not provided on these stores. Audited financial statements on
the substantial majority of stores acquired in the Command Transaction and the
corresponding pro forma financial information on the acquisitions are included
as Exhibits to the Form 8-K dated May 16, 2006, and are incorporated herein by
reference.
Exhibit Number Item
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10.1 Asset Purchase Agreement dated as of November 9, 2005 by and
among Command Center, Inc. (formerly Temporary Financial
Services, Inc.), Command Staffing LLC, Harborview Software,
Inc., and the Operations Entities as defined herein.
(Previously filed as Exhibit 10.1 to Form 8-K dated November
9, 2005 and incorporated herein by reference.)
99.1 Press Release, dated July 6, 2006, concerning the acquisition
of the assets of four Operations Entities comprising nine
temporary staffing stores.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Command Center, Inc. July 6, 2006
/s/ Brad E. Herr, Secretary
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Brad E. Herr, Secretary