EX-9.01.2 3 v043134_ex91-2.txt EXHIBIT 9.01.2 VIKEN MANAGEMENT, INC. Audited balance sheet of Viken Management, Inc. and Consolidated Variable Interest Entities as of December 31, 2005, and the related statements of income, stockholders' deficit, and cash flows for the year ended December 31 2005. CONSOLIDATED FINANCIAL STATEMENTS December 31, 2005 VIKEN MANAGEMENT, INC. AND CONSOLIDATED VARIABLE INTEREST ENTITIES: SOUTHWEST TEMPORARY DEVELOPMENT, LLC ZAZ, LLC RASCALS, LLC AARDVARK STAFFING, LLC SAN ANTONIO ARMADILLO, LLC BROADWAY GARDENS, LLC TRUCKEE RIVER SERVICES, LLC AWESOME POSSUM STAFFING, LLC SACRAMENTO TEMPORARY STAFFING SERVICES, LLC [LOGO] EideBailly CPAs & BUSINESS ADVISORS INDEPENDENT AUDITOR'S REPORT -------------------------------------------------------------------------------- The Members VIKEN MANAGEMENT, INC. AND CONSOLIDATED VARIABLE INTEREST ENTITIES Scottsdale, Arizona We have audited the accompanying consolidated balance sheets of VIKEN MANAGEMENT, INC. AND CONSOLIDATED VARIABLE INTEREST ENTITIES as of December 31, 2005, and the related consolidated statements of income, stockholders' deficit, and cash flows for the year ended December 31, 2005. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we do not express such an opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of VIKEN MANAGEMENT, INC. AND CONSOLIDATED VARIABLE INTEREST ENTITIES as of December 31, 2005, and the results of its operation and its cash flows for the years ended December 31, 2005, in conformity with accounting principles generally accepted in the United States of America. The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 12 to the financial statements, the Company's significant operating losses raise substantial doubt about its ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. /s/ Eide Bailly LLP Phoenix, Arizona March 10, 2006 PEOPLE. PRINCIPLES. POSSIBILITIES. www.eidebailly.com 1850 N. Central Avenue Suite 400 Phoenix, Arizona 85004 Phone 602.264.5844 Fax 602.277.4845 EOE VIKEN MANAGEMENT, INC. AND CONSOLIDATED VARIABLE INTEREST ENTITIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2005 -------------------------------------------------------------------------------- ASSETS CURRENT ASSETS Cash $ 79,036 Receivables Trade receivables 3,610,354 Less: Allowance for doubtful accounts 630,639 ----------- 2,979,715 ----------- Other receivables 263,876 Related party receivables 22,000 Prepaid expenses 111,412 Deposits 38,239 ----------- Total current assets 3,494,278 ----------- PROPERTY AND EQUIPMENT, net 309,029 ----------- OTHER ASSETS Note receivable - related party 30,000 Goodwill 40,000 ----------- 70,000 ----------- $ 3,873,307 =========== LIABILITIES AND STOCKHOLDERS' DEFICIT CURRENT LIABILITIES Checks in excess of bank deposits $ 290,033 Current maturities of long-term debt 48,017 Accounts payable and accrued expenses 1,367,920 Payroll withholdings 1,712,203 Funding payable 1,309,832 ----------- Total current liabilities 4,728,005 ----------- LONG-TERM DEBT, net of current maturities 103,067 ----------- STOCKHOLDERS' DEFICIT Controlling interest in equity Common Stock 100 Additional paid-in capital 1,522,062 Retained earnings (deficit) (651,177) Noncontrolling interest in equity (1,828,750) ----------- Total stockholders' deficit (957,765) ----------- $ 3,873,307 =========== See Notes to Consolidated Financial Statements -2- VIKEN MANAGEMENT, INC. AND CONSOLIDATED VARIABLE INTEREST ENTITIES CONSOLIDATED STATEMENTS OF INCOME FOR THE YEAR ENDED DECEMBER 31, 2005 -------------------------------------------------------------------------------- REVENUES $ 27,785,110 COST OF SALES 19,954,507 ------------ GROSS PROFIT 7,830,603 OPERATING EXPENSES 10,326,811 ------------ LOSS FROM OPERATIONS (2,496,208) ------------ INTEREST EXPENSE 28,237 ------------ NET LOSS $ (2,524,445) ============ See Notes to Consolidated Financial Statements -3- VIKEN MANAGEMENT, INC. AND CONSOLIDATED VARIABLE INTEREST ENTITIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT FOR THE YEAR ENDED DECEMBER 31, 2005 --------------------------------------------------------------------------------
Controlling Interests in Equity ---------------------------------------------- Noncontrolling Total Common Additional Retained Interests in Stockholders' Stock Paid in Capital Deficit Deficit Deficit ------------ --------------- ------------ --------------- --------------- BALANCE, JANUARY 1, 2005 $ -- $ -- $ -- $ -- $ -- Cumulative effect adjustment of accounting change -- -- -- (60,635) (60,635) ------------ --------------- ------------ --------------- --------------- -- -- -- (60,635) (60,635) ------------ --------------- ------------ --------------- --------------- Issuance of common stock 100 1,522,062 -- -- 1,522,162 ------------ --------------- ------------ --------------- --------------- Net loss Controlling interests net loss -- -- (651,177) -- (651,177) Noncontrolling interests net loss -- -- -- (1,873,268) (1,873,268) ------------ --------------- ------------ --------------- --------------- -- -- (651,177) (1,873,268) (2,524,445) ------------ --------------- ------------ --------------- --------------- Distributions -- -- (65,000) (28,700) (93,700) ------------ --------------- ------------ --------------- --------------- Capital contributions -- -- -- 198,853 198,853 ------------ --------------- ------------ --------------- --------------- BALANCE, DECEMBER 31, 2005 $ 100 $ 1,522,062 $ (716,177) $ (1,763,750) $ (957,765) ============ =============== ============ =============== ===============
See Notes to Consolidated Financial Statements -4- VIKEN MANAGEMENT, INC. AND CONSOLIDATED VARIABLE INTEREST ENTITIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2005 -------------------------------------------------------------------------------- CASH FROM OPERATING ACTIVITIES Net loss $(2,524,445) Charges and credits to net income not affecting cash Depreciation 29,950 Allowance for doubtful accounts 1,524,983 Changes in assets and liabilities Trade receivables (2,694,207) Related party receivables (52,000) Other receivables (192,982) Prepaid expenses (107,948) Deposits (21,931) Checks in excess of bank deposit 181,893 Accounts payable and accrued expenses 1,077,649 Payroll withholdings 1,331,865 Funding payable 60,246 ----------- Net cash used in operating activities (1,386,927) ----------- CASH FROM INVESTING ACTIVITIES Purchase of property and equipment (191,083) ----------- Net cash used in investing activities (191,083) ----------- CASH FROM FINANCING ACTIVITIES Principal payments on long-term debt (58,186) Issuance of stock 1,522,162 Member contributions-noncontrolling 198,853 Member distributions-noncontrolling (93,700) ----------- Net cash provided by financing activities 1,569,129 ----------- NET CHANGE IN CASH (8,881) CASH, BEGINNING OF YEAR 87,917 ----------- CASH, END OF YEAR $ 79,036 =========== SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION Cash payments for interest $ 229,416 =========== See Notes to Consolidated Financial Statements -5- VIKEN MANAGEMENT, INC. AND CONSOLIDATED VARIABLE INTEREST ENTITIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2005 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- NOTE 1 - NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES -------------------------------------------------------------------------------- NATURE OF OPERATIONS Viken Management Inc. (Viken) an S-Corporation organized under the laws of the jurisdiction of the State of Nevada. The Corporation was formed for the purpose of providing management services to related variable interests entities which operate temporary labor and staffing agencies providing manual labor jobs to customers. PRINCIPLES OF CONSOLIDATION In December 2003, the Financial Accounting Standards Board (FASB) issued revised FASB Interpretation 46, "Consolidation of Variable Interest Entities" (FIN 46). FIN 46 requires certain VIEs to be consolidated by the primary beneficiary of the entity if the equity investors in the entity do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. The consolidated financial statements include the accounts of the following (Operating Companies): Viken Management, Inc. San Antonio Armadillo, LLC Southwest Temporary Development, LLC Broadway Gardens, LLC Zaz, LLC Truckee River Services, LLC Rascals, LLC Awesome Possum Staffing, LLC Aardvark Staffing, LLC Sacramento Temporary Staffing Services, LLC All significant interrelated accounts have been eliminated in consolidation. Viken is the primary beneficiary of the Operating Companies and FASB Interpretation No. 46, "Consolidation of Variable Interest Entities." consolidates the results of operations from the Operating Companies. Viken has no ownership interest in the variable interest entities. VARIABLE INTEREST ENTITIES Southwest Temporary Development, LLC , a variable interest entity of is a limited liability company organized under the laws of the jurisdiction of the State of Arizona on April 21, 2001 The Company was formed for the purpose of providing temporary staffing for manual labor jobs to customers. The Company grants credit to customers in all of these locations. Zaz, LLC, a variable interest entity of is a limited liability company organized under the laws of the jurisdiction of the State of Arizona on September 10, 2002. The Company was formed for the purpose of providing temporary staffing for manual labor jobs to customers. The Company grants credit to customers in all of these locations. Rascals, LLC and Lil'l Kids Enterprises, LLC (Rascals, LLC) , a variable interest entity of a re limited liability companies organized under the laws of the jurisdiction of the State of California on August, 13 2002 and November 20, 2003, respectively and are combined for financial reporting purposes. The Companies were formed for the purpose of providing temporary staffing for manual labor jobs to customers. The Companies grant credit to customers in all of these locations. Lil'l Kids became Harbor Bay in 2005. (Continued) -6- NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -------------------------------------------------------------------------------- Aardvark Staffing, LLC, a variable interest entity of is a limited liability company organized under the laws of the jurisdiction of the State of Arizona on October 28, 2003. The Company was formed for the purpose of providing temporary staffing for manual labor jobs to customers. The Company grants credit to customers in all of these locations. San Antonio Armadillo, LLC, a variable interest entity of is a limited liability company organized under the laws of the jurisdiction of the State of Texas on June 16, 2003. The Company was formed for the purpose of providing temporary staffing for manual labor jobs to customers. The Company grants credit to customers in all of these locations. Broadway Gardens, LLC, a variable interest entity of is a limited liability company organized under the laws of the jurisdiction of the State of Kentucky on April 23, 2004. The Company was formed for the purpose of providing temporary staffing for manual labor jobs to customers. The Company grants credit to customers in all of these locations. Truckee River Services, LLC, a variable interest entity of is a limited liability company organized under the laws of the jurisdiction of the State of Nevada on February 18, 2004. The Company was formed for the purpose of providing temporary staffing for manual labor jobs to customers. The Company grants credit to customers in all of these locations. Awesome Possum Staffing, LLC a variable interest entity of is a limited liability company organized under the laws of the jurisdiction of the State of Wyoming on June 28, 2001. The Company was formed for the purpose of providing temporary staffing for manual labor jobs to customers. The Company grants credit to customers in all of these locations. Sacramento Temporary Staffing Services, LLC a variable interest entity of is a limited liability company organized under the laws of the jurisdiction of the State of California on November 19, 2003. The Company was formed for the purpose of providing temporary staffing for manual labor jobs to customers. The Company grants credit to customers in all of these locations. Viken Management, Inc. is the primary beneficiary as a result of providing significant financing for operations to the VIE's in addition through common ownership the shareholders of Viken have the ability to control future financing and management. The Operating Companies operate as franchisees of Command Center, Inc. and operate under the trade name "Command Labor." The "Command Labor" name is owned by Command Center, Inc. Command Center, Inc. formerly operating under Command Staffing, LLC was formed in 2002 in the state of Arizona for the purpose of providing temporary help in the labor, staffing, hospitality and events industries. The Company operates under the trade name of Command Center. The Company currently holds over 70 storefronts which do business in 19 states in the U.S. BASIS OF ACCOUNTING AND PRESENTATION The financial statements of the Consolidated Companies are prepared on the accrual basis of accounting and accordingly reflect all significant receivables, payables, and other liabilities. CASH AND CASH EQUIVALENTS The Consolidated Companies considers all highly liquid assets having a maturity of three months or less to be cash equivalents. The Consolidated Companies maintain cash at various financial institutions which may at times exceed federally insured amounts. (Continued) -7- NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -------------------------------------------------------------------------------- ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS Accounts receivable are recorded at the invoiced price and most do not bear interest. Accounts receivable is reviewed regularly for collectibility. The allowance for doubtful accounts is estimated based on a percentage of receivables aged over 60 days. Accounts receivable are written off when determined uncollectible. Recoveries of previously written off are recorded when collected. PROPERTY AND EQUIPMENT Property and equipment are stated at cost. Expenditures for renewals and improvements that significantly add to the productive capacity or extend the useful life of an asset are capitalized. Expenditures for maintenance and repairs are charged to expense currently. Depreciation and amortization are provided using accelerated and straight-line methods for financial reporting purposes and are applied over the estimated lives of the respective assets. The Company reviews its property and equipment whenever events indicate that the carrying amount of the asset may not be recoverable. An impairment loss is recorded when the sum of the future cash flows is materially less than the carrying amount of the asset. An impairment loss is measured as the amount by which the carrying amount of the asset exceeds its fair value. No impairment loss is recorded at December 31, 2005. GOODWILL AND OTHER INTANGIBLE ASSETS The Company records goodwill and intangible assets in accordance with SFAS No. 142, Goodwill and Other Intangible Assets. INCOME TAXES Viken Management, Inc. has elected by unanimous consent of its stockholders to be taxed under the provisions of subchapter S of the Internal Revenue Code. Under those provisions, Viken Management, Inc. does not pay Federal or State corporate income taxes on its taxable income. Instead, the stockholders are liable for the individual Federal and State income tax on Viken Management, Inc.'s taxable income. The Operating Companies and its members have elected to be taxed as a limited liability corporation for income tax purposes. Under such election, the Company is not subject to corporate income taxes. Instead, the Company's tax basis earnings are reported by the respective members for income tax reporting purposes. USE OF ESTIMATES The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. ADVERTISING Advertising costs are expenses as incurred. Advertising expense was $267,068 for the year ended December 31, 2005. -8- NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- NOTE 2 - GOODWILL -------------------------------------------------------------------------------- Goodwill represents the excess of cost over fair value of net assets acquired related to the acquisition of a business during 2003. In accordance with Statement of Financial Accounting Standards ("SFAS") No. 142 issued in June 2001, amortization of goodwill ceased as of December 31, 2001, and the Company evaluates the goodwill on an annual basis for potential impairment. There was no impairment to the value of recorded goodwill for the year ended December 31, 2005. -------------------------------------------------------------------------------- NOTE 3 - PROPERTY AND EQUIPMENT -------------------------------------------------------------------------------- Property and equipment consisted of the following at December 31, 2005: Building $ 155,000 Equipment 8,989 Leasehold improvements 117,895 Software 64,199 --------- 346,083 Accumulated depreciation (37,054) --------- $ 655,112 ========= -------------------------------------------------------------------------------- NOTE 4 - FUNDING PAYABLE -------------------------------------------------------------------------------- The Operating Companies (Franchisee) factor their accounts receivable, with recourse, with Capital Temp Funds, Inc. (CTF). In exchange for cash advances (asset based loans), CTF receives a security interest in the receivables through the assignment of each week's billing. The Franchisee performs all collection activity on the assigned accounts; however, customers forward their remittances directly to a CTF lockbox. CTF maintains an inventory of open customer receivables against which it issues funding advances. CTF provides funding, via wire transfer, to the Franchisee generally on a weekly basis following receipt and review of a new receivable assignment. The maximum that CTF will loan the Franchisee is 80% of the population of eligible open invoices less than 60 days old. Invoices that age beyond 60 days (past the invoice date) fall out of eligibility and are excluded from subsequent CTF funding calculations. CTF establishes its own credit limits for each customer. Franchisee billing that exceeds these limits is not eligible for funding, however, the receivables continue to be assigned and monitored by CTF. The Franchisee is charged interest calculated on the daily net loan balance during each month. This interest charge is added to the loan balance at the end of each month. Interest rates are established at Prime Rate plus 4%. The Franchisee paid interest related to funding of receivables of $204,179. -9- NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- NOTE 5 - LONG-TERM DEBT --------------------------------------------------------------------------------
Long-term debt consisted of the following at December 31, 2005: Note payable to a former member bearing interest at 6%, unsecured, due in monthly installments of $4,563, matures in 2006 $ 40,062 Note payable to Citizens Bank, due in monthly installments of $1,485 and a balloon payment in 2009. The note is secured by a building 111,022 --------- 151,084 Less current maturities (48,017) --------- $ 103,067 =========
Future minimum payments required on long-term debt are as follows for the years ending December 31: 2006 $ 48,017 2007 8,445 2008 8,966 2009 85,656 --------- $ 151,084 ========= -------------------------------------------------------------------------------- NOTE 6 - LEASE COMMITMENTS -------------------------------------------------------------------------------- The Company leases facilities at each location in which they operate. The rent expense totaled approximately $546,534 for the year ended December 31, 2005, respectively. Future minimum rental commitments for these leases are as follows for the years ending December 31: 2006 $ 532,701 2007 497,642 2008 447,158 2009 348,083 2010 160,119 ---------- $1,985,703 ========== -------------------------------------------------------------------------------- NOTE 7 - RELATED PARTY TRANSACTIONS -------------------------------------------------------------------------------- At December 31, 2005, $22,000 was due from ZMP Associates, Inc., a related party through common ownership, and $75,500 was due from a Member owner. (Continued) -10- NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -------------------------------------------------------------------------------- Notes receivable - related parties consisted of the following at December 31, 2005: Note receivable from a Inland Empire, LLC, a related party through common ownership due in a lump sum payment, plus accrued interest in January 2009. $ 30,000 ======== At December 31, 2005, $320,809 was due to Command Center, Inc., the franchisor and related party through common ownership, $25,784 was due to Harborview Software, Inc., a related party through common ownership, and $29,594 was due to a Member. At December 31, 2005, $138,474 was due from Command Center, Inc., the franchisor. -------------------------------------------------------------------------------- NOTE 8 - COMMITMENTS -------------------------------------------------------------------------------- The Operating Companies are obligated under a signed Franchise Agreement to pay franchise royalty fees to Command Center, Inc., royalty fees are paid based on percentage of sales, for the year ended December 31, 2005 the Operating Companies incurred royalty fees of approximately $502,962. -------------------------------------------------------------------------------- NOTE 9 - SUBSEQUENT EVENT -------------------------------------------------------------------------------- The Consolidated Group has entered into an agreement whereby its Shareholders and Members will exchange their ownership rights in each franchise for stock in Command Center, Inc. This agreement is subject to continuing due diligence review by Command Center, Inc. Command Center, Inc. is registered with the Securities and Exchange Commission and is traded on the OTCBB under the symbol CCNI. # # # # # -11- [LOGO] EideBailly CPAs & BUSINESS ADVISORS INDEPENDENT AUDITOR'S REPORT ON SUPPLEMENTARY INFORMATION -------------------------------------------------------------------------------- The Members VIKEN MANAGEMENT, INC. AND CONSOLIDATED VARIABLE INTEREST ENTITIES Scottsdale, Arizona Our audits were made for the purpose of forming an opinion on the basic consolidated financial statements taken as a whole. The supplementary information is presented for purposes of additional analysis and is not a required part of the basic consolidated financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic consolidated financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic consolidated financial statements taken as a whole. /s/ Eide Bailly LLP Phoenix, Arizona March 10, 2006 PEOPLE. PRINCIPLES. POSSIBILITIES. www.eidebailly.com 1850 N. Central Avenue Suite 400 Phoenix, Arizona 85004 Phone 602.264.5844 Fax 602.277.4845 EOE VIKEN MANAGEMENT, INC. AND CONSOLIDATED VARIABLE INTEREST ENTITIES CONSOLIDATING BALANCE SHEETS - WITH SUPPLEMENTARY COMBINING INFORMATION DECEMBER 31, 2005 --------------------------------------------------------------------------------
Southwest San Viken Temporary Aardvark Antonio Management Development, Zaz, Rascals, Staffing, Armadillo, ASSETS Inc. LLC LLC LLC LLC LLC ------------ ------------ ------------ ------------ ------------ ------------ CURRENT ASSETS Cash $ 79,036 $ -- $ -- $ -- $ -- $ -- Receivables Trade receivables 280,968 213,908 621,580 776,734 417,603 489,903 Less: Allowance for doubtful accounts 22,974 26,430 172,706 92,896 57,038 85,139 ------------ ------------ ------------ ------------ ------------ ------------ 257,994 187,478 448,874 683,838 360,565 404,764 ------------ ------------ ------------ ------------ ------------ ------------ Other receivables 143,765 66,611 -- 75,500 -- -- Related party receivables 30,000 -- -- -- -- -- Intercompany receivables 2,412,678 346,789 -- -- -- 93,195 ------------ ------------ ------------ ------------ ------------ ------------ Prepaid expenses 13,877 2,043 5,054 15,353 2,285 36,595 Deposits 20,346 1,756 1,603 6,000 -- -- ------------ ------------ ------------ ------------ ------------ ------------ Total current assets 2,957,696 604,677 455,531 780,691 362,850 534,554 ------------ ------------ ------------ ------------ ------------ ------------ PROPERTY AND EQUIPMENT, net 158,711 140,146 -- -- -- 10,172 OTHER ASSETS Goodwill -- -- -- -- -- 40,000 ------------ ------------ ------------ ------------ ------------ ------------ Total assets $ 3,116,407 $ 744,823 $ 455,531 $ 780,691 $ 362,850 $ 584,726 ============ ============ ============ ============ ============ ============ LIABILITIES AND MEMBERS' EQUITY CURRENT LIABILITIES Checks in excess of bank deposits $ 290,033 $ -- $ -- $ -- $ -- $ -- Current maturities of long-term debt -- 48,017 -- -- -- -- Accounts payable and accrued expenses 1,158,254 -- -- 159,282 -- -- Payroll withholdings 477,865 26,914 55,521 699,494 24,090 178,409 Funding payable 97,076 16,084 170,905 263,036 140,314 252,780 222,194 350,476 (341,402) (177,078) (120,556) (6,698) Intercompany payables -- 156,399 1,318,507 529,275 403,677 -- ------------ ------------ ------------ ------------ ------------ ------------ Total current liabilities 2,245,422 597,890 1,203,531 1,474,009 447,525 424,491 ------------ ------------ ------------ ------------ ------------ ------------ LONG-TERM DEBT, net of current maturities -- 103,067 -- -- -- -- ------------ ------------ ------------ ------------ ------------ ------------ SHAREHOLDERS' EQUITY Controlling interest in equity Common Stock 100 -- -- -- -- -- Additional paid-in capital 1,522,062 -- -- -- -- -- Retained earnings (deficit) (651,177) -- -- -- -- -- Noncontrolling interest in equity -- 43,866 (748,000) (693,318) (84,675) 160,235 ------------ ------------ ------------ ------------ ------------ ------------ Total stockholders' equity 870,985 43,866 (748,000) (693,318) (84,675) 160,235 ------------ ------------ ------------ ------------ $ 3,116,407 $ 744,823 $ 455,531 $ 780,691 $ 362,850 $ 584,726 ============ ============ ============ ============ ============ ============ Truckee Awesome Broadway River Possum Sacramento Gardens, Services, Staffing Staffing Consolidated ASSETS LLC LLC LLC LLC Eliminations Total ------------ ------------ ------------ ------------ ------------ ------------ CURRENT ASSETS Cash $ -- $ -- $ -- $ -- $ -- $ 79,036 Receivables Trade receivables 222,617 245,206 149,371 192,464 -- 3,610,354 Less: Allowance for doubtful accounts 80,875 10,399 46,410 35,772 -- 630,639 ------------ ------------ ------------ ------------ ------------ ------------ 141,742 234,807 102,961 156,692 -- 2,979,715 ------------ ------------ ------------ ------------ ------------ ------------ Other receivables -- -- -- -- -- 285,876 Related party receivables -- -- -- -- -- 30,000 Intercompany receivables -- -- -- 144,086 (2,996,748) -- ------------ ------------ ------------ ------------ ------------ ------------ Prepaid expenses 2,400 28,513 2,286 3,006 -- 111,412 Deposits -- 1,450 1,616 5,468 -- 38,239 ------------ ------------ ------------ ------------ ------------ ------------ Total current assets 144,142 264,770 106,863 309,252 (2,996,748) 3,524,278 ------------ ------------ ------------ ------------ ------------ ------------ PROPERTY AND EQUIPMENT, net -- -- -- -- -- 309,029 OTHER ASSETS Goodwill -- -- -- -- -- 40,000 ------------ ------------ ------------ ------------ ------------ ------------ Total assets $ 144,142 $ 264,770 $ 106,863 $ 309,252 $ (2,996,748) $ 3,873,307 ============ ============ ============ ============ ============ ============ LIABILITIES AND MEMBERS' EQUITY CURRENT LIABILITIES Checks in excess of bank deposits $ -- $ -- $ -- $ -- $ -- $ 290,033 Current maturities of long-term debt -- -- -- -- -- 48,017 Accounts payable and accrued expenses 50,384 -- -- -- -- 1,367,920 Payroll withholdings 7,994 105,722 8,947 127,247 -- 1,712,203 Funding payable 98,386 145,919 31,186 94,146 -- 1,309,832 5,949 (36,525) (1,510) 105,150 Intercompany payables 441,920 55,241 91,729 -- (2,996,748) -- ------------ ------------ ------------ ------------ ------------ ------------ Total current liabilities 604,633 270,357 130,352 326,543 (2,996,748) 4,728,005 ------------ ------------ ------------ ------------ ------------ ------------ LONG-TERM DEBT, net of current maturities -- -- -- -- -- 103,067 ------------ ------------ ------------ ------------ ------------ ------------ SHAREHOLDERS' EQUITY Controlling interest in equity Common Stock -- -- -- -- -- 100 Additional paid-in capital -- -- -- -- -- 1,522,062 Retained earnings (deficit) -- -- -- -- -- (651,177) Noncontrolling interest in equity (460,491) (5,587) (23,489) (17,291) -- (1,828,750) ------------ ------------ ------------ ------------ ------------ ------------ Total stockholders' equity (460,491) (5,587) (23,489) (17,291) -- (957,765) ------------ ------------ ------------ ------------ ------------ ------------ $ 144,142 $ 264,770 $ 106,863 $ 309,252 $ (2,996,748) $ 3,873,307 ============ ============ ============ ============ ============ ============
-13- VIKEN MANAGEMENT, INC. AND CONSOLIDATED VARIABLE INTEREST ENTITIES CONSOLIDATED INCOME STATEMENTS WITH SUPPLEMENTARY COMBINING INFORMATION FOR THE YEAR ENDED DECEMBER 31, 2005 --------------------------------------------------------------------------------
Southwest San Viken Temporary Aardvark Antonio Management Development, Zaz, Rascals, Staffing, Armadillo, Inc. LLC LLC LLC LLC LLC ------------ ------------ ------------ ------------ ------------ ------------ OPERATIONS REVENUES $ 914,670 $ 2,158,613 $ 3,034,555 $ 7,400,780 $ 3,158,893 $ 4,969,057 COST OF SALES (414,888) 1,631,183 2,326,969 5,950,568 2,215,310 3,774,573 ------------ ------------ ------------ ------------ ------------ ------------ GROSS PROFIT 1,329,558 527,430 707,586 1,450,212 943,583 1,194,484 OPERATING EXPENSES 1,980,735 845,538 1,189,050 1,946,947 1,034,534 1,173,804 ------------ ------------ ------------ ------------ ------------ ------------ INCOME FROM OPERATIONS (651,177) (318,108) (481,464) (496,735) (90,951) 20,680 ------------ ------------ ------------ ------------ ------------ ------------ OTHER INCOME (EXPENSES) -- (15,648) -- -- -- -- ------------ ------------ ------------ ------------ ------------ ------------ NET INCOME (LOSS) (651,177) (333,756) (481,464) (496,735) (90,951) 20,680 ------------ ------------ ------------ ------------ ------------ ------------ RETAINED EARNINGS (DEFICIT) BEGINNING OF YEAR -- (911,833) (698,406) (439,312) (165,724) (27,963) ------------ ------------ ------------ ------------ ------------ ------------ RETAINED EARNINGS END OF YEAR $ (651,177) $ (1,245,589) $ (1,179,870) $ (936,047) $ (256,675) $ (7,283) ============ ============ ============ ============ ============ ============ Truckee Awesome Broadway River Possum Sacramento Gardens, Services, Staffing Staffing Consolidated LLC LLC LLC LLC Eliminations Total ------------ ------------ ------------ ------------ ------------ ------------ OPERATIONS REVENUES $ 1,524,375 $ 2,331,235 $ 1,420,827 $ 872,105 $ -- $ 27,785,110 COST OF SALES 1,303,585 1,527,837 1,088,228 551,142 -- 19,954,507 ------------ ------------ ------------ ------------ ------------ ------------ GROSS PROFIT 220,790 803,398 332,599 320,963 -- 7,830,603 OPERATING EXPENSES 613,824 770,251 369,730 402,398 -- 10,326,811 ------------ ------------ ------------ ------------ ------------ ------------ INCOME FROM OPERATIONS (393,034) 33,147 (37,131) (81,435) -- (2,496,208) ------------ ------------ ------------ ------------ ------------ ------------ OTHER INCOME (EXPENSES) (5,231) (7,358) -- -- -- (28,237) ------------ ------------ ------------ ------------ ------------ ------------ NET INCOME (LOSS) (398,265) 25,789 (37,131) (81,435) -- (2,524,445) ------------ ------------ ------------ ------------ ------------ ------------ RETAINED EARNINGS (DEFICIT) BEGINNING OF YEAR (77,226) (166,976) -- -- -- (2,487,440) ------------ ------------ ------------ ------------ ------------ ------------ RETAINED EARNINGS END OF YEAR $ (475,491) $ (141,187) $ (37,131) $ (81,435) $ -- $ (5,011,885) ============ ============ ============ ============ ============ ============
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