UNITED
      STATES


SECURITIES
      AND EXCHANGE COMMISSION


Washington,
      D.C. 20549


FORM
      10-QSB




(Mark
      One)


x
            QUARTERLY
                REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
                1934




For
      the
      quarterly period ended **September
      28, 2007**





o
            TRANSITION
                REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE
                ACT




For
      the
      transition period from _____________ to ___________.




Commission
      File Number: **333-60326**




**COMMAND
      CENTER, INC.**


(Exact
      name of small business issuer as specified in its charter)




Washington
            91-2079472(State
                or other jurisdiction of incorporation or
                organization)
            (IRS
                Employer Identification
                Number)3773
                West Fifth Avenue, Post Falls, Idaho
                83854(Address
                of principal executive
                offices)(208)
                773-7450(Issuer’s
                telephone number)N.A.(Former
                name, former address and former fiscal
                year, if changed since last report)





Indicate
      by check mark whether the registrant: (1) has filed all documents and reports
      required to be filed by Section 13, or 15(d) of the Securities Exchange Act
      of
      1934 during the preceding twelve months (or for such shorter period as the
      Registrant was required to file such reports), and (2) has been subject to
      such
      filing requirements for the past ninety days.


Yes
x  No
o





The number of shares of common stock
              outstanding on November 2, 2007 was:
            24,736,465Transitional Small Business Disclosure
              Format.
            Yes
o 
NoxIndicate by check mark whether the registrant
              is a shell company(as defined in Rule 12b-2 of the Exchange
              Act).
            Yes
o 
Nox




10-QSB
          Page
          1




**Command
      Center, Inc.**







**Contents**







**FORM
      10-QSB**




**PART
                I**
            PageItem
                1. Financial Statements (unaudited)Management
                Statement
            10-QSB
                Page 3Balance
                Sheet at September 28, 2007
            10-QSB
                Page 4Statements
                of Operations for the thirteen and thirty-nine week periods ended
                September 28, 2007 and September 29, 2006
            10-QSB
                Page 5Statements
                of Cash Flows for the thirty-nine week periods ended September 28,
                2007
                and September 29, 2006
            10-QSB
                Page 6Notes
                to Financial Statements
            10-QSB
                Page 7Item 2. Management’s Discussion and Analysis
              or Plan of Operations
            10-QSB
                Page 16Item
                3. Controls and Procedures
            10-QSB
                Page 21**Part
                II**Item 2. Unregistered Sales of Equity
              Securities
            10-QSB
                Page 22Item 6. Exhibits and Reports on Form
              8-K
            10-QSB
                Page 22**Signatures**
            10-QSB
                Page 23**Certifications**
            10-QSB
                Page 24 - 27


10-QSB
          Page
          2




PART
      I





Item
      1.  Financial
      Statements.




MANAGEMENT
      STATEMENT




The
      accompanying (unaudited) balance sheet of Command Center, Inc. as of September
      28, 2007, and the related statements of operations for the thirteen and
      thirty-nine week periods ended September 28, 2007 and September 29, 2006, and
      cash flows for the thirty-nine week periods ended September 28, 2007 and
      September 29, 2006, were prepared by Management of the Company.





The
      accompanying financial statements should be read in conjunction with the audited
      financial statements of Command Center, Inc. (the “Company”) as of and for the
      52 weeks ended December 29, 2006, and the notes thereto contained in the
      Company’s annual report on Form 10-KSB for the 52 weeks ended December 29, 2006,
      filed with the Securities and Exchange Commission.





Management


Command
      Center, Inc.


November
      9, 2007




10-QSB
          Page
          3




**Command
                  Center, Inc.****Balance
                  Sheet (Unaudited)*****Assets***
              
              
              September
                  28, 2007*CURRENT
                  ASSETS:*Cash
                  and cash equivalents
              
              $
              251,095Accounts
                  receivable - trade, net of allowance for bad debts of
                  $430,000
              
              
              10,706,633Prepaid
                  expenses, deposits, and other
              
              
              1,472,123Prepaid
                  workers' compensation insurance
              
              
              1,320,890Workers'
                  compensation risk pool deposits - current
              
              
              1,064,000Total
                  current assets14,814,741*PROPERTY
                  AND EQUIPMENT, NET*
              
              
              3,348,636*OTHER
                  ASSETS:*Workers'
                  compensation risk pool deposits - non-current
              
              
              3,581,000Goodwill
              
              
              32,481,129Amortizable
                  intangibles - net
              
              
              740,345Other
                  assets
              
              
              42,155Total
                  other assets36,844,629$
              55,008,006***Liabilities
                  and Stockholders' Equity****CURRENT
                  LIABILITIES:*Accounts
                  payable
              
              
              1,615,078Checks
                  issued and outstanding
              
              
              1,160,444Accrued
                  payroll, benefits and taxes
              
              
              3,052,465Line
                  of credit facility
              
              
              6,718,579Notes
                  payable
              
              
              2,664,219Workers'
                  compensation insurance and reserves payable
              
              
              2,016,710Workers'
                  compensation claims liability - current
              
              
              1,064,000Total
                  current liabilities
              
              
              18,291,495*LONG-TERM
                  LIABILITIES*Notes
                  payable net of current portion
              
              
              96,791Finance
                  obligation
              
              
              1,125,000Workers'
                  compensation claims liability - non-current
              
              
              1,286,000Total
                  long term liabilities
              
              
              2,507,791Total
                  liabilities
              
              
              20,799,286*COMMITMENTS
                  AND CONTINGENCIES**STOCKHOLDERS'
                  EQUITY:*Preferred
                  stock - 5,000,000 shares, $0.001 par value,authorized;
                  no shares issued and outstandingCommon
                  stock - 100,000,000 shares, $0.001 par value, authorized24,736,465
                  shares issued and outstanding
              
              
              24,735Additional
                  paid-in capital
              
              
              40,342,130Accumulated
                  deficit
              
              
              (6,158,145
              )Total
                  stockholders' equity
              
              
              34,208,720$
              55,008,006See
                  accompanying notes to unaudited financial statements.


10-QSB
          Page
          4


**Command
                  Center, Inc.****Statements
                  of Operations (Unaudited)**Thirteen
                  Weeks Ended
              
              Thirty-nine
                  Weeks EndedSeptember
                  28, 2007
              
              September
                  29, 2006
              
              September
                  28, 2007
              
              September
                  29, 2006*REVENUE:*Staffing
                  services revenue
              
              $
              26,242,962
              
              $
              27,747,156
              
              $
              74,158,370
              
              $
              45,431,317Franchise
                  fee revenues
              
              
              -
              
              
              -
              
              
              -
              
              
              535,745Other
                  income
              
              
              136,832
              
              
              15,667
              
              
              262,684
              
              
              30,343Total
                  revenue
              
              
              26,379,794
              
              
              27,762,823
              
              
              74,421,054
              
              
              45,997,405*COST
                  OF STAFFING SERVICES*
              
              
              18,473,276
              
              
              19,624,124
              
              
              53,661,722
              
              
              32,719,116*GROSS
                  PROFIT*
              
              
              7,906,518
              
              
              8,138,699
              
              
              20,759,332
              
              
              13,278,289*OPERATING
                  EXPENSES:*Compensation
                  and related expenses
              
              
              3,887,965
              
              
              3,348,914
              
              
              13,102,565
              
              
              7,143,361Selling
                  and marketing expenses
              
              
              42,184
              
              
              219,247
              
              
              428,890
              
              
              447,843Professional
                  expenses
              
              
              383,756
              
              
              143,998
              
              
              1,324,841
              
              
              563,520Depreciation
                  and amortization
              
              
              214,600
              
              
              111,848
              
              
              622,009
              
              
              215,880Rents
              
              
              638,242
              
              
              547,335
              
              
              1,868,944
              
              
              1,032,674Travel
                  and transportation
              
              
              480,361
              
              
              98,398
              
              
              1,886,071
              
              
              348,796Utilities
                  and communications
              
              
              305,569
              
              
              194,900
              
              
              909,690
              
              
              353,950Insurance
              
              
              178,377
              
              
              198,472
              
              
              571,212
              
              
              293,651Bank
                  fees
              
              
              159,106
              
              
              93,142
              
              
              528,120
              
              
              124,504Other
                  expenses
              
              
              636,319
              
              
              2,209,973
              
              
              2,364,125
              
              
              3,341,8486,926,479
              
              
              7,166,227
              
              
              23,606,467
              
              
              13,866,027*INCOME
                  (LOSS) FROM OPERATIONS*
              
              
              980,039
              
              
              972,472
              
              
              (2,847,135
              )
              
              (587,738
              )*OTHER
                  INCOME (EXPENSE)*Interest
                  expense
              
              
              (535,697
              )
              
              (286,526
              )
              
              (1,108,957
              )
              
              (365,994
              )Interest
                  and dividend income
              
              
              -
              
              
              9,098
              
              
              -
              
              
              44,430Total
                  other income/(expense)
              
              
              (535,697
              )
              
              (277,428
              )
              
              (1,108,957
              )
              
              (321,564
              )*NET
                  INCOME (LOSS)*
              
              $
              444,342
              
              $
              695,044
              
              $
              (3,956,092
              )
              $
              (909,302
              )*INCOME
                  (LOSS) PER SHARE - BASIC*
              
              $
              0.02
              
              $
              0.03
              
              $
              (0.16
              )
              $
              (0.05
              )*WEIGHTED
                  AVERAGE COMMON**SHARES
                  OUTSTANDING*
              
              
              24,612,054
              
              
              23,048,555
              
              
              24,019,256
              
              
              16,541,304See
                  accompanying notes to unaudited financial statements.




10-QSB
          Page
          5


**Command
                  Center, Inc.****Statements
                  of Cash Flows (Unaudited)*****Increase
                  (Decrease) in Cash***
              
              
              Thirty-nine
                  Weeks Ended*CASH
                  FLOWS FROM OPERATING ACTIVITIES:*
              
              
              September
                  28, 2007
              
              
              September
                  29, 2006Net
                  loss
              
              $
              (3,956,092
              )
              $
              (909,302
              )Adjustments
                  to reconcile net loss to net cash used by operating
                  activities:Depreciation
                  and amortization
              
              
              622,009
              
              
              275,883Allowance
                  for bad debts
              
              
              39,137
              
              
              -Stock
                  issued for interest and compensation
              
              
              180,640
              
              
              90,000Amortization
                  of note payable discount
              
              
              153,500
              
              
              -Changes
                  in assets and liabilitiesAccounts
                  receivable - trade, net
              
              
              (1,417,622
              )
              
              (4,472,497
              )Due
                  from affiliates
              
              
              -
              
              
              123,418Prepaid
                  expenses
              
              
              (1,290,247
              )
              
              (1,553,880
              )Workers'
                  compensation risk pool deposits
              
              
              (2,592,290
              )
              
              (2,305,000
              )Accounts
                  payable
              
              
              417,159
              
              
              1,126,974Amounts
                  due to affiliates
              
              
              (782,184
              )
              
              55,564Accrued
                  expenses
              
              
              1,494,601
              
              
              1,216,410Workers'
                  compensation insurance and risk pool deposits
                  payable
              
              
              1,207,045
              
              
              2,024,167Workers'
                  compensation claims liability
              
              
              927,291
              
              
              822,709Total
                  adjustments
              
              
              (1,040,961
              )
              
              (2,596,252
              )Net
                  cash used by operating activities
              
              
              (4,997,053
              )
              
              (3,505,554
              )*CASH
                  FLOWS FROM INVESTING ACTIVITIES:*Purchases
                  of property and equipment
              
              
              (439,294
              )
              
              (820,204
              )Purchase
                  of Anytime Labor
              
              
              (247,500
              )
              
              -Collections
                  on note receivable
              
              
              118,384
              
              
              131,586Proceeds
                  from sale of investments
              
              
              -
              
              
              404,000Net
                  cash provided by (used by) investing activities
              
              
              (568,410
              )
              
              (284,618
              )*CASH
                  FLOWS FROM FINANCING ACTIVITIES:*Net
                  advances on line of credit facility
              
              
              993,433
              
              
              1,195,684Change
                  in checks issued and outstanding
              
              
              311,048
              
              
              495,729Advances
                  payable
              
              
              -
              
              
              673,915Sale
                  of common stock
              
              
              730,000
              
              
              585,000Sale
                  of preferred stock
              
              
              -
              
              
              470,000Proceeds
                  received from notes payable
              
              
              2,111,210
              
              
              -Proceeds
                  received from issue of warrants in connection with notes
                  payable
              
              
              380,000
              
              
              -Payment
                  made for note payable financing fee
              
              
              (100,000
              )
              
              -Net
                  cash provided by financing activities
              
              
              4,425,691
              
              
              3,420,328*NET
                  INCREASE (DECREASE) IN CASH*
              
              
              (1,139,772
              )
              
              (369,844
              )*CASH,
                  BEGINNING OF PERIOD*
              
              
              1,390,867
              
              
              369,844*CASH,
                  END OF PERIOD*
              
              $
              251,095
              
              $
              -*NON-CASH
                  INVESTING AND FINANCING ACTIVITIES*Common
                  stock issued on conversion of preferred stock
              
              $
              -
              
              $
              470,000Common
                  stock issued on conversion of amounts due affiliates
              
              $
              578,147
              
              $
              -Common
                  stock issued for acquisition of:Accounts
                  receivable, net
              
              $
              -
              
              $
              6,477,104Property,
                  plant and equipment
              
              
              -
              
              
              603,184Prepaid
                  expenses
              
              
              390,860
              
              
              -Financing
                  liability assumed
              
              
              -
              
              
              (4,767,262
              )Amounts
                  due to affiliates
              
              
              
              
              
              (529,516
              )Payables
                  assumed in acquisitons
              
              
              -
              
              
              (105,101
              )Goodwill
                  and intangible assets
              
              
              -
              
              
              30,565,248Assets
                  acquired in Anytime Labor purcahse
              
              
              912,000
              
              
              -Total
              
              $
              1,302,860
              
              $
              32,243,657Debt
                  assumed in Anytime Labor purchase
              
              $
              252,500
              
              $
              -See
                  accompanying notes to unaudited financial statements.




10-QSB
          Page
          6


**NOTES
        TO THE UNAUDITED FINANCIAL STATEMENTS OF COMMAND CENTER,
        INC.**









***NOTE
      1 — BASIS OF PRESENTATION:***








The
      accompanying unaudited financial statements have been prepared in conformity
      with generally accepted accounting principles and reflect all normal recurring
      adjustments which, in the opinion of Management of the Company, are necessary
      for a fair presentation of the results for the periods presented. The results
      of
      operations for such periods are not necessarily indicative of the results
      expected for the full fiscal year or any future period. 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 the reported amounts of assets and
      liabilities at the date of the financial statements and the reported amounts
      of
      revenues and expenses during the reporting periods. Actual results could differ
      significantly from these estimates.





The
      accompanying unaudited financial statements should be read in conjunction with
      the audited financial statements of the Company as of and for the 52 weeks
      ended
      December 29, 2006, and the notes thereto contained in the Company’s annual
      report on Form 10-KSB for the 52 weeks ended December 29, 2006, filed with
      the
      Securities and Exchange Commission. Certain
      items previously reported in specific financial statement captions have been
      reclassified to conform to the 2007 presentation.





***NOTE
      2 — RECENT ACCOUNTING PRONOUNCEMENTS:***





On
      January 1, 2007, we adopted Financial Accounting Standards Board Interpretation
      No. 48, Accounting for Uncertainty in Tax Positions (“FIN48”). FIN48 prescribes
      a recognition threshold and measurement attribute for the recognition and
      measurement of tax positions taken or expected to be taken in income tax
      returns. FIN48 also provides guidance on de-recognition of income tax assets
      and
      liabilities, classification of current and deferred income tax assets and
      liabilities, and accounting for interest and penalties associated with tax
      positions.





In
      the
      course of our assessment, we determined that we were subject to examination
      of
      our income tax filings in the United States and various state jurisdictions for
      the 2003 - 2006 tax years. Within each of these jurisdictions we examined our
      material tax positions to determine whether we believed they would be sustained
      under the more-likely-than-not guidance provided by FIN48. If interest and
      penalties were to be assessed, we would charge interest to interest expense,
      and
      penalties to other operating expense.





As
      a
      result of our assessment, we have concluded that the adoption of FIN48 had
      no
      significant impact on the Company’s results of operations or balance sheet for
      the thirty-nine weeks ended September 28, 2007, and required no adjustment
      to
      opening balance sheet accounts as of December 30, 2006.





In
      September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements," (“SFAS
      157”), which will become effective in our 2008 financial statements. SFAS 157
      establishes a framework for measuring fair value and expands disclosure about
      fair value measurements, but does not require any new fair value measurements.
      We have not yet determined the effect that adoption of SFAS 157 may have on
      our
      results of operations or financial position.





10-QSB
          Page
          7


**NOTES
        TO THE UNAUDITED FINANCIAL STATEMENTS OF COMMAND CENTER,
        INC.**


The
      FASB
      issued Statement No. 159, “The Fair Value Option for Financial Assets and
      Financial Liabilities — including an amendment of FASB Statement
      No. 115,” in the first quarter 2007. The statement allows entities to value
      financial instruments and certain other items at fair value. The statement
      provides guidance over the election of the fair value option, including the
      timing of the election and specific items eligible for the fair value
      accounting. Changes in fair values would be recorded in earnings. The statement
      is effective for fiscal years beginning after November 15, 2007. The
      Company is evaluating the impact the adoption of this statement will have,
      if
      any, on its financial statements.





***NOTE
      3 — EARNINGS PER SHARE:***








Basic
      earnings (loss) per share (“EPS”) is computed as net income divided by the
      weighted average number of common shares outstanding for the period.
 Diluted EPS reflects the potential dilution that could occur from common
      shares issuable through stock options, warrants, and other convertible
      securities. At September 28, 2007, the Company had 450,000 warrants outstanding
      in two blocks. One block of warrants entitles the holder to purchase 200,000
      shares of common stock at $3.00 per share expiring on April 1, 2009. The second
      block of warrants entitles the holder to purchase 250,000 shares of common
      stock
      at $1.50 per share, expiring on August 14, 2012. In addition, the Company issued
      a convertible note in the amount of $500,000 to our investment banker in a
      bridge funding transaction on August 14, 2007. The note is convertible into
      the
      securities offered in the next equity funding undertaken by the Company. The
      type of securities and the number of shares that may be issuable pursuant to
      the
      conversion feature cannot be determined at this time. Diluted EPS is not
      presented for the thirteen and thirty-nine week periods ended September 28,
      2007. The dilutive effect of the warrants is not material.





***NOTE
      4 — BUSINESS COMBINATIONS:***








On
      January 1, 2007, we agreed to acquire certain assets and liabilities of Anytime
      Labor, Inc. for $247,500 in cash and 200,000 shares of our common stock having
      an estimated value of $4.56 per share. The acquired assets represent three
      temporary staffing stores. Two of the acquired stores are in Oregon and one
      is
      in Washington. We closed the transaction on February 19, 2007. From January
      1,
      2007 through the closing date of the transaction, we operated the stores under
      the Command Center name pursuant to the acquisition agreement, and operations
      from these stores are reflected in our financial statements for the thirteen
      and
      thirty-nine week periods ended September 28, 2007.





The
      following represents management’s estimate of the fair value of the assets
      acquired and liabilities assumed in the acquisitions.




Cash
                  consideration
              
              $
              247,500Liabilities
                  assumed
              
              
              252,500Common
                  stock
              
              
              912,000Total
                  consideration
              
              $
              1,412,000Accounts
                  receivable
              
              $
              0Furniture
                  and fixtures and equipment
              
              
              25,000Intangible
                  assets (customer relationships)
              
              
              125,000Goodwill
                  (estimated)
              
              
              1,262,000Total
                  assets acquired
              
              $
              1,412,000
   10-QSB
            Page
            8


**NOTES
        TO THE UNAUDITED FINANCIAL STATEMENTS OF COMMAND CENTER,
        INC.**


Prior
      to
      closing the acquisitions, Glenn Welstad, our CEO, loaned Anytime Labor $252,500
      to allow Anytime Labor to payoff an existing contractual obligation. Upon
      completion of the acquisitions, the Company assumed the obligation due Mr.
      Welstad. This amount was repaid to Mr. Welstad in the second quarter.





The
      Company also assumed certain obligations on existing operating leases and other
      contractual rights in conjunction with the purchase. Management has estimated
      that the fair value of these obligations and the contractual rights is
      immaterial and has not assigned any separately identifiable value to these
      items. Management has estimated the fair value of Anytime Labor’s customer list
      and recorded it as an intangible asset that will be amortized over a three
      year
      period. Goodwill has been recorded based on the excess of the consideration
      paid
      over the net identifiable assets and liabilities acquired.





The
      acquisitions were undertaken as an ongoing part of our growth strategy.





***NOTE
      5 — RELATED-PARTY TRANSACTIONS:***








The
      Company has had the following transactions with related parties:





*New
      store surcharge fee.* As part
      of the acquisition of the franchise operations of Command Staffing and
      Harborview in November 2005, the Company assumed the obligation of Command
      Staffing to pay Glenn Welstad, our CEO and Chairman, $5,000 for each new
      temporary staffing store opened by the Company. Amounts owed to Mr. Welstad
      pursuant to the new store surcharge agreement were paid in 50,000 shares of
      common stock in the thirteen weeks ended September 28, 2007. In order to
      minimize the cash flow impact of the new store surcharge agreement, any amounts
      due for future store openings will be paid in stock at the rate of 2,200 shares
      per store at the time the new stores are opened. This obligation will end at
      the
      earlier of December 31, 2001 of the opening of 250 new stores.





Mr.
      Welstad also owns Alligator LLC (Alligator), an automobile leasing company.
      Alligator provides approximately 20 vans and van drivers to the Company for
      use
      in transporting temoporary workers to job sites at various locations within
      our
      sphere of operations. The Company provides fuel for the vehicles and pays
      Alligator a lease payment for use of the vans plus reimbursement for the cost
      of
      the drivers. As of September 28, 2007, the Company owed Alligator $159,755
      under
      this arrangement.





The
      Company has also advanced funds to Viken Management, a company controlled by
      Mr.
      Welstad, to pay obligations of Viken that were incurred prior to the roll-up
      of
      the franchisee operations. As of September 28, 2007, Mr. Welstad owed the
      Company $229,000. With the agreement of Mr. Welstad, this receivable balance
      will be offset against the balance due Alligator in the fourth quarter. Any
      balance remaining after the offset will be repaid or subject to additional
      offsets prior to year end.




10-QSB
          Page
          9




**NOTES
      TO THE UNAUDITED FINANCIAL STATEMENTS OF COMMAND CENTER,
      INC.**







***NOTE
      6 — LINE OF CREDIT FACILITY:***








On
      May
      12, 2006, we entered into an agreement with our principal lender for a financing
      arrangement collateralized by eligible accounts receivable. Eligible accounts
      receivable are generally defined to include accounts that are not more than
      sixty days past due. The loan agreement includes limitations on customer
      concentrations, accounts receivable with affiliated parties, accounts receivable
      from governmental agencies in excess of 5% of the Company’s accounts receivable
      balance, and when a customer’s aggregate past due account exceeds 50% of that
      customer’s aggregate balance due. The lender will advance 85% of the invoiced
      amount for eligible receivables. The credit facility includes a 1% facility
      fee
      payable annually, and a $1,500 monthly administrative fee. The financing bears
      interest at the greater of the prime rate plus two and one half percent (prime
      +2.5%) or 6.25% per annum. Our line of credit interest rate at September 28,
      2007 was 10.75%. The loan agreement further provides that interest is due at
      the
      applicable rate on the greater of the outstanding balance or $5,000,000. The
      credit facility expires on April 7, 2009. In December 2006, the Company
      negotiated an increase in the maximum credit facility to $9,950,000. The loan
      agreement includes certain financial covenants including a requirement that
      we
      maintain a working capital ratio of 1:1, that we maintain positive cash flow,
      that we maintain a tangible net worth of $3,500,000, and that we achieve
      operating results within a range of projected EBITDA. At September 28, 2007,
      we
      were not in compliance with these loan covenants. Our lender has waived
      compliance with the covenants as of September 28, 2007. The balance due our
      lender at September 28, 2007 was $6,718,579.





***NOTE
      7 — NOTES PAYABLE TO AFFILIATES:***








During
      the thirteen weeks ended September 28, 2007, the Company settled certain notes
      payable to affiliates for stock. These conversions are described
      below:


Glenn
                  Welstad(1)
              
              $
              360,654Dwight
                  Enget(2)
              
              
              94,091Tom
                  Gilbert(2)
              
              
              60,306Tom
                  Hancock(2)
              
              
              27,659Ronald
                  L. Junck(2)
              
              
              2,714Todd
                  Welstad(2)
              
              
              814Dave
                  Wallace(3)
              
              
              31,909$
              578,147


(1)
            Mr.
                Welstad is our CEO and a director. The amount due Mr. Welstad includes
                balances owing for new store surcharge fees, accrued salary owed
                from
                2006, other assumed liabilities in connection with equipment purchases
                and
                other expenses related to our acquisition of temporary staffing stores,
                the Anytime Labor acquisitions, and additional advances for working
                capital.





(2)
            Mr.
                Enget, Mr. Gilbert, Mr. Hancock, Mr. Junck, and Mr. Todd Welstad
                are
                directors and officers of the Company. The amounts due consist of
                liabilities incurred in connection with the purchase of temporary
                staffing
                stores owned or controlled by them in
                2006.





(3)
            Mr.
                Wallace is a former franchisee and is currently employed as a manager
                with
                our company.




The
      notes were converted into common stock at a
      conversion price of $1.50 per share. An aggregate of 385,431 shares of common
      stock were issued in the note conversions.


10-QSB
          Page
          10




**NOTES
        TO THE UNAUDITED FINANCIAL STATEMENTS OF COMMAND CENTER,
        INC.**


***NOTE
      8 — NOTES PAYABLE***





In
      the
      thirty-nine months ended September 28, 2007, we borrowed $2,000,000 on a
      short-term note payable to an unrelated third party for supplemental working
      capital. We also borrowed $500,000 from our investment banker on a short-term
      bridge loan to be repaid or converted upon completion of an equity
      funding.





The
      $2,000,000 loan funds were received in April and were used for working capital.
      The Note was originally due on July 1, 2007 but has been extended through
      November 30, 2007. The Note includes interest payable at 18% per annum through
      the original due date and 24% per annum from July 1, 2007 until paid in full.
      The note holder was also granted warrants to purchase up to 200,000 shares
      of
      common stock at $3.00 per share at any time before April 1, 2009. The warrants
      include a provision for adjustment of the warrant exercise price in the event
      of
      stock splits, dividends, combinations or exchanges or other changes in capital
      structure. The warrants also include a provision to adjust the exercise price
      if
      the Company sells other shares of common stock for less than $3.00 per share.
      Interest on this note is accrued monthly.





In
      the
      Company’s estimation, approximately $167,000 of the $2,000,000 note related to
      the value of the warrants, resulting in a note discount of $167,000. In
      accordance with EITF 00-27, the note discount is being amortized to interest
      expense over the life of the Note. In the thirteen weeks ended September 28,
      2007, $125,250 of the note discount was amortized to interest expense. The
      balance of the note discount will be amortized to expense in the thirteen weeks
      ended December 28, 2007.





On
      August
      14, 2007, the company also received $500,000 on a short-term Promissory Note
      from our investment banker. The Note does not bear interest during the term
      and
      matures on the earlier of the next equity funding or February 14, 2008. After
      maturity, the Note bears interest at the rate of 12% per annum until paid.
      The
      Note is convertible into securities at the time of the next equity funding
      undertaken by the Company. Terms of conversion will be the same as the terms
      of
      the next equity funding, and are not yet defined. We also granted our investment
      banker warrants to purchase up to 250,000 shares of our common stock at an
      exercise price of $1.50 per share. The warrants are exercisable immediately
      and
      expire on August 14, 2012 (five years after issuance).





In
      the
      Company’s estimation, approximately $213,000 of the $500,000 note related to the
      value of the warrants, resulting in a note discount of $213,000. In accordance
      with APB 14, the note discount is being amortized to interest expense over
      the
      life of the Note. In the thirteen weeks ended September 28, 2007, $53,250 of
      the
      note discount was amortized to interest expense. In the event the note is
      converted into common stock, the remaining balance of the note discount at
      the
      time of conversion will immediately be recognized as interest expense. Upon
      conversion, the conversion feature of the note will also be separately valued
      and may result in additional interest expense at the date of conversion. The
      amount of additional interest expense will depend on the terms of the next
      equity funding and the amount of additional interest cannot be determined as
      of
      September 28, 2007.





10-QSB
          Page
          11




**NOTES
          TO THE UNAUDITED FINANCIAL STATEMENTS OF COMMAND CENTER,
          INC.**


The
      Company is pursuing an equity funding with the assistance of our investment
      banker. We expect to utilize a portion of the funds from an equity funding,
      if
      successful, to repay the balances due on these notes if not converted into
      securities in conjunction with the equity funding.





***NOTE
      9 — WORKERS’ COMPENSATION INSURANCE AND RESERVES:***





We
      provide our temporary and permanent workers with workers’ compensation
      insurance. Currently, we maintain a large deductible workers’ compensation
      insurance policy through American International Group, Inc. (“AIG”). The policy
      covers the premium year from May 13, 2007 through May 12, 2008. While we have
      primary responsibility for all claims, our insurance coverage provides
      reimbursement for covered losses and expenses in excess of our deductible.
      For
      workers’ compensation claims arising in self-insured states, our workers’
compensation policy covers any claim in excess of the $250,000 deductible on
      a
“per occurrence” basis. This results in our being substantially
      self-insured.





We
      obtained our current policy in May 2007 and since the policy inception, we
      have
      made payments into a risk pool fund to cover claims within our self-insured
      layer. Our payments into the fund for the premium year will total $3,920,000
      based on estimates of expected losses calculated at inception of the policy.
      If
      our payments into the fund exceed our actual losses over the life of the claims,
      we may receive a refund of the excess risk pool payments. Correspondingly,
      if
      our workers’ compensation reserve risk pool deposits are less than the expected
      losses for any given policy period, we may be obligated to contribute additional
      funds to the risk pool fund. Our maximum exposure under the policy is capped
      at
      the greater of $7,500,000 or 10.1% of payroll expenses incurred during the
      premium year.





The
      workers’ compensation risk pool deposits totaled $4,645,000 as of September 28,
      2007, and were classified as current and non current assets 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 financial
      statements.





We
      have
      discounted the expected liability for future losses to present value using
      a
      discount rate of 4.5%, which approximates the risk free rate on US Treasury
      instruments. Our expected future liabilities will be evaluated on a quarterly
      basis and adjustments to these calculations will be made as
      warranted.





Expected
      losses will extend over the life of longest lived claim which may be outstanding
      for many years. As a new temporary staffing company, we have limited experience
      with which to estimate the average length of time during which claims will
      be
      open. As a result, our current actuarial analysis is based largely on industry
      averages which may not be applicable to our business. 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.





10-QSB
          Page
          12




**NOTES
          TO THE UNAUDITED FINANCIAL STATEMENTS OF COMMAND CENTER,
          INC.**


For
      workers’ compensation claims originating in Washington and North Dakota (our
“monopolistic jurisdictions”) we pay workers’ compensation insurance premiums
      and obtain full coverage under government administered programs. We are not
      the
      primary obligor on claims in these jurisdictions. Accordingly, our financial
      statements do not reflect liability for workers’ compensation claims in these
      jurisdictions.





Workers’
      compensation expense is recorded as a component of our cost of services and
      consists of the following components: self-insurance reserves net of the
      discount, insurance premiums, and premiums paid in monopolistic jurisdictions.
      Workers’ compensation expense for our temporary workers totaled $4,071,003 in
      the thirty-nine weeks ended September 28, 2007. Prior to April 1, 2006, the
      Company operated as a franchisor of temporary staffing businesses and workers’
compensation costs were not a materially significant component of operating
      costs.





***NOTE
      10 - COMMITMENTS AND CONTINGENCIES:***





*Finance
      obligation.* Our
      finance obligation consists of debt owed to a related party upon the purchase
      of
      the Company’s headquarters. The terms of the agreement call for lease payments
      of $10,000 per month commencing on January 1, 2006 for a period of three years.
      The Company has the option anytime after January 1, 2008 to purchase the
      building for $1,125,000 or continue to make payments of $10,000 per month for
      another two years under the same terms. The Company accounts for the lease
      payments as interest expense. The building is being depreciated over 30
      years.





*New
      store surcharge.* The
      Company has an obligation to pay Glenn Welstad, our CEO, 2200 shares of common
      stock for each new store opened. This obligation lasts until the earlier to
      occur of 250 new stores or December 31, 2011.





*Contingent
      payroll and other tax liabilities.* In May
      and June 2006, we acquired operating assets for a number of temporary staffing
      stores. The entities that owned and operated these stores received stock in
      consideration of the transaction. As operating businesses prior to our
      acquisition, each entity incurred obligations for payroll withholding taxes,
      workers’ compensation insurance fund taxes, and other liabilities. We structured
      the acquisition as an asset purchase and agreed to assume only the liability
      for
      each entity’s accounts receivable financing line of credit. We also obtained
      representations that liabilities for payroll taxes and other liabilities not
      assumed by the Company would be paid by the entities.





Since
      the
      acquisitions, it has come to our attention that certain tax obligations incurred
      on operations prior to our acquisitions have not been paid. The entities that
      sold us the assets (the “selling entities”) are primarily liable for these
      obligations. The owners of the entities may also be liable. In most cases,
      the
      entities were owned or controlled by Glenn Welstad, our CEO.





Based
      on
      the information currently available, we estimate that the total state payroll
      and other tax liabilities owed by the selling entities is between $300,000
      and
      $500,000 and that total payroll taxes due to the Internal Revenue Service is
      between $900,000 and $1,500,000. Our outside legal counsel has advised us that
      the potential for successor liability on the IRS claims is remote.





10-QSB
          Page
          13




**NOTES
          TO THE UNAUDITED FINANCIAL STATEMENTS OF COMMAND CENTER,
          INC.**


We
      have
      not accrued any amounts for these contingent payroll and other tax liabilities
      at September 28, 2007. We have obtained indemnification agreements from the
      selling entities and their principal members for any liabilities or claims
      we
      incur as a result of these predecessor tax liabilities. We have also secured
      the
      indemnification agreement with pledges of our common stock legally or
      beneficially owned by the selling entities or their members. We believe the
      selling entities and their principals have adequate resources to meet these
      obligations and have indicated through their actions to date that they fully
      intend to pay the amounts due.





We
      understand that the responsible parties have entered into payment agreements
      on
      the substantial majority of the tax obligations and expect to resolve these
      debts in full within the next twelve months. To the best of our knowledge,
      no
      new payroll tax obligations of acquired entities have been raised since December
      29, 2006.





*Operating
      leases.* The
      Company leases 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 on ninety day notice, and some
      of the leases have been in existence long enough that the term has expired
      and
      we are currently occupying the premises on month-to-month tenancies. Lease
      obligations for the next five years as of June 29, 2006 are:





Remainder of 2007
            $328,0002008
            1,166,0002009
            918,0002010
            543,0002011
            155,000




*Litigation.* On
      December 31, 2005, ProTrades Connection, Inc. filed a lawsuit against Command
      Staffing, LLC and seven individuals in the Superior Court for the State of
      California, Santa Clara County. The individual defendants are employees of
      Command Center, Inc. and were formerly employed by ProTrades. In the lawsuit,
      the plaintiff alleges that the individual defendants breached written covenants
      against the solicitation of ProTrades employees. Subsequently, the plaintiff
      has
      amended the Complaint to bring in as defendants other entities, including
      Command Center, Inc. and other individuals. In September 2007, following
      briefing and argument of our motion for summary judgment, the Judge granted
      our
      motion and dismissed all claims of ProTrades. ProTrades has now appealed the
      granting of our motion and the appeal is pending.





Command
      Center and the remaining defendants intend to continue their vigorous defense
      of
      this case. The Company has not established a contingent loss reserve as the
      outcome of the litigation is uncertain at this point in time.





*Payroll
      Tax Penalties and Interest.* As
      of
      September 28, 2007, the Company was delinquent in the payment of various payroll
      tax obligations totaling approximately $850,000. We have communicated with
      each
      of the various taxing authorities and now have deferred payment arrangements
      in
      place on substantially all of the delinquent balances. Accrued taxes recorded
      on
      the balance sheet as of September 28, 2007 adequately reflect the delinquencies
      and the known penalties and interest. We anticipate that additional penalties
      and interest may be incurred in connection with these delinquencies, but do
      not
      expect the amounts to be significant. If substantial additional penalties and
      interest are assessed, the company’s financial condition could be adversely
      affected.





10-QSB
          Page
          14


**NOTES
          TO THE UNAUDITED FINANCIAL STATEMENTS OF COMMAND CENTER,
          INC.**


***NOTE
      11 - STOCKHOLDERS’ EQUITY:***





In
      the
      thirty-nine week period ended on September 28, 2007, the Company issued an
      aggregate of 1,244,603 shares of Common Stock. The shares of Common Stock were
      issued for asset acquisitions, payment of consulting fees, as severance pay
      to
      terminated employees, for new investment in private placements of 10,000 and
      466,666 shares, and for conversion of notes payable to affiliates.


·
            10,000
                shares were sold in the first quarter at $3.00 per
                share.


·
            466,666
                were sold in the second quarter at $1.50 per share.


·
            200,000
                shares were issued as partial consideration for the acquisition of
                temporary staffing store assets from Anytime Labor, Inc. Management
                estimated the value of the shares issued in the Anytime Labor asset
                acquisition at $4.56 per share as provided in the acquisition agreement
                (See Note 4).


·
            We
                issued 98,951 shares of common stock for prepaid sales force training
                services. Management estimated the value of these shares at $3.96
                per
                share in accordance with the consulting services agreement.


·
            We
                issued 66,000 shares to terminated employees as severance pay. Management
                estimated the value of the severance pay shares on the dates of issuance
                and recorded an aggregate of $130,640 as compensation expense in
                the
                period.


·
            We
                issued 17,555 shares as payment of interest relating to the lease
                agreement on our Post Falls corporate headquarters building. (See
                Notes 5
                and 10).


·
            We
                issued 385,431 shares on conversion of $578,147 of notes payable
                to
                affiliates. (See Note 7).





10-QSB
          Page
          15


**FORM
      10-QSB**





**Part
      I, Item 2.**  **Management’s
      Discussion and Analysis or Plan of Operations.**





This
      Form
      10-QSB may contain forward-looking statements. These statements relate to our
      expectations for future events and future financial performance. Generally,
      the
      words “intend,” “expect,” “anticipate,” “estimate,” or “continue” and similar
      expressions identify forward-looking statements. Forward-looking statements
      involve risks and uncertainties, and future events and circumstances could
      differ significantly from those anticipated in the forward-looking statements.
      These statements are only predictions. Factors which could affect our financial
      results are described below. Readers are cautioned not to place undue reliance
      on these forward-looking statements, which speak only as of the date hereof.
      Although we believe that the expectations reflected in the forward-looking
      statements are reasonable, we cannot guarantee future results, levels of
      activity, performance or achievements. We do not, nor have we authorized any
      other person to, assume responsibility for the accuracy and completeness of
      the
      forward-looking statements. We undertake no duty to update any of the
      forward-looking statements after the date of this report. “CCNI,” the “Company,”
“we,” “us,” “our,” and similar references refer to Command Center,
      Inc.





**Executive
      Overview.**





Command
      Center is a provider of temporary employees to the light industrial,
      construction, warehousing, transportation and material handling industries.
      We
      provide unskilled and semi-skilled workers to our customers. Generally, we
      pay
      our workers the same day they perform the job. In 2005 and 2006, we underwent
      a
      series of evolutionary changes to convert our business from financial service
      to
      franchisor of temporary staffing stores to operator of temporary staffing
      stores. We accomplished these changes by rolling up a franchise and software
      company into the predecessor public shell corporation and then acquiring all
      of
      our franchisees for stock. We completed the rollup transactions in the second
      quarter of 2006.





Our
      vision is to be the preferred partner of choice for all staffing and employment
      solutions by placing the right people in the right jobs every time. With the
      acquisition of the temporary staffing stores, we have consolidated operations,
      established and implemented corporate operating policies and procedures, and
      are
      currently pursuing a unified branding strategy for all of our stores.





***Temporary
      Staffing Store Operations*** .
      We
      currently operate 78 temporary staffing stores serving thousands of customers
      and employing tens of thousands of temporary employees. In the months following
      the roll-up we focused on continuity of operations, reporting, and record
      keeping. Significant management attention has been devoted to assuring that
      the
      stores are seamlessly integrated into the Company’s corporate environment and
      culture. Rather than opening a large number of additional new stores, in 2007
      we
      are focusing our efforts on consolidating and refining our existing store
      operations, proving our business model, and operating our business in an
      efficient manner.





During
      the remainder of 2007, we will work for organic growth to increase our per-store
      revenue and profitability through directed selling activities and system-wide
      initiatives to improve the efficiency of our business processes. We may also
      seek growth from limited new store openings and growth through acquisition
      of
      existing locations from third party operators when such opportunities
      arise.





10-QSB
          Page
          16


We
      manage
      our field operations using in-store personnel, store managers, area managers,
      and corporate management personnel. We have established a national sales team
      to
      drive business to our stores. Our compensation plans for store managers, area
      managers, and business development specialists have been designed to aid in
      securing the qualified personnel needed to meet our business, financial and
      growth objectives. Our human resources practices are designed to support the
      need for attracting, screening, hiring, training, supporting and retaining
      qualified personnel at all levels of our business.





During
      the thirty-nine weeks ended September 28, 2007, we made additional changes
      in
      our business model and strategy. We began the year with a newly established
      sales force and the expectation that the sales force would drive increasing
      revenue to our existing stores. As we progressed through the quarter, we
      reorganized the management team to provide the direction and supervision needed
      for success. We consolidated field supervision in the corporate office and
      we
      are beginning to see the results of these steps through rising activity levels,
      improving margins and new customer generation. We have also reorganized our
      sales force to tighten control and accountability for results.





As
      described below, the changes to our business in the first nine months of 2007
      came at a significant cost. Looking forward to the remainder of 2007, we expect
      that our investment in infrastructure and personnel will result in strong
      momentum heading into 2008. We will continue to monitor activity levels and
      operating results as we move into the slower months of our business
      cycle.





Our
      operating results for the first nine months of 2007 are not comparable to the
      results of operations in the first nine months of 2006. We began operating
      temporary staffing stores in the second quarter of 2006. Operating results
      for
      the thirteen week periods ended September 28, 2007 and September 29, 2006 are
      comparable.





**Results
      of Operations**





***Thirteen
      Weeks Ended September 28, 2007 Compared to the Thirteen Weeks Ended September
      29, 2006***





The
      following table compares the operating results for the thirteen weeks ended
      September 28, 2007 and September 29, 2006:





10-QSB
          Page
          17




Thirteen
                  Weeks EndedSeptember
                  28, 2007
              
              
              
              September
                  29, 2006
              
              
              %
                  ChangeRevenue
              
              $
              26,379,794
              
              
              
              
              
              $
              27,762,823
              
              
              
              
              
              -5
              %Cost
                  of staffing services
              
              
              18,473,276
              
              
              70.0
              %
              
              
              19,624,124
              
              
              70.7
              %
              
              -6
              %Gross
                  profit
              
              
              7,906,518
              
              
              30.0
              %
              
              
              8,138,699
              
              
              29.3
              %
              
              -3
              %Selling,
                  general and administrative services
              
              
              6,711,879
              
              
              25.4
              %
              
              
              7,054,379
              
              
              25.4
              %
              
              -5
              %Depreciation
                  and amortization
              
              
              214,600
              
              
              0.8
              %
              
              
              111,848
              
              
              0.4
              %
              
              92
              %Interest
                  expense
              
              
              535,697
              
              
              2.0
              %
              
              
              286,526
              
              
              1.0
              %
              
              87
              %Interest
                  and other income
              
              
              -
              
              
              0.0
              %
              
              
              (9,098
              )
              
              0.0
              %
              
              -Net
                  Income
              
              $
              444,342
              
              
              1.7
              %
              
              $
              695,044
              
              
              2.5
              %
              
              -36
              %





***Revenues*** .
      Revenues decreased $1,383,029 (5%) in the thirteen weeks ended September 28,
      2007 compared to the same period a year earlier. The decrease is primarily
      the
      result of our efforts to increase margins through margin lockouts and our focus
      on standardizing business practices. We remain focused on long term
      profitability of our existing stores. Our consolidation efforts created some
      turnover and personnel relocations that impacted top line growth in the current
      period. At September 28, 2007 and September 29, 2006, the Company operated
      78
      and 76 temporary staffing stores, respectively.





***Cost
      of Services.*** Cost of
      services decreased $1,150,848 (6%) in
      the
      thirteen weeks ended September 28, 2007 compared to the thirteen weeks ended
      September 29, 2006 .
      As a
      percentage of revenues, cost of services declined slightly to 70.0% from 70.7%
      in the year earlier period. This decrease is directly related to the decrease
      in
      revenues in the current period when compared to the prior year. The improvement
      in cost of services as a percentage of revenue resulted from our efforts to
      increase margins through directed sales efforts, the institution of margin
      controls, and our focus on controlling workers’ compensation costs. Gross profit
      margins increased to 30.0% in the thirteen weeks ended September 28, 2007
      compared to 29.3% for the comparable period in 2006.





***Selling,
      General and Administrative Expenses.*** As
      a
      percentage of revenue, selling, general and administrative expenses remained
      steady at 25.4% in the thirteen weeks ended September 28, 2007 compared to
      25.4%
      in the thirteen weeks ended September 29, 2006. The decrease in selling, general
      and administrative expenses was the result of our efforts to control costs
      while
      supporting the infrastructure necessary to support the company’s business plan
      and future growth initiatives.





***Depreciation
      and Amortization Expenses.*** Depreciation and amortization expenses increased in the thirteen weeks ended
      September 28, 2007 to $214,600 (0.8% of revenue) compared to $111,848 (0.4%
      of
      revenue) for the thirteen weeks ended September 29, 2006. This increase is
      the
      result of acquisition of additional assets and customer lists between periods.





***Interest
      Expense.*** Interest
      expense increased to $535,697 (2.0% of revenue) in the thirteen weeks ended
      September 28, 2007, compared to $286,526 (0.4% of revenue) in the comparable
      period in 2006. The increase is a result of additional borrowing in thirteen
      weeks ended September 28, 2007 and the amortization of discounts on notes
      payable in connection with issuance of notes with warrants. Interest in the
      current quarter includes interest on short term debt at high interest
      rates.




10-QSB
          Page
          18


***Net
      Income.*** Net
      income decreased to $444,342 for the thirteen weeks ended September 28, 2007
      compared to $695,044 in the comparable period in the prior year. As a percentage
      of revenue, our net income was 1.7% in the thirteen weeks ended September 28,
      2007 compared to 2.5% in the comparable period in the prior year. In the
      thirteen weeks ended September 28, 2007 the significant increases in
      depreciation and amortization and interest expense when compared to the year
      earlier period were partially offset by decreases in cost of services.





***Thirty-nine
      Weeks Ended September 28, 2007 Compared to the Thirty-nine Weeks Ended September
      29, 2006***





The
      following table provides a side by side comparison of the thirty-nine week
      period results for 2007 and 2006. The thirty-nine week period ended September
      28, 2007 is not comparable to the thirty-nine week period ended September 29,
      2006. We operated as a franchisor in the first quarter of 2006 and did not
      undertake active temporary staffing store operations until April 1, 2006. The
      temporary staffing store operations model generates significantly more revenue
      and expense than the franchisor business model.




Thirty-nine
                  Weeks EndedSeptember
                  28, 2007
              
              
              September
                  29, 2006
              
              %
                  ChangeRevenue
              
              $
              74,421,054
              
              
              
              
              
              $
              45,997,405
              
              
              
              
              
              62
              %Cost
                  of staffing services
              
              
              53,661,722
              
              
              72.1
              %
              
              
              32,719,116
              
              
              71.1
              %
              
              64
              %Gross
                  profit
              
              
              20,759,332
              
              
              27.9
              %
              
              
              13,278,289
              
              
              28.9
              %
              
              56
              %Selling,
                  general and administrative services
              
              
              22,984,458
              
              
              30.9
              %
              
              
              13,650,147
              
              
              29.7
              %
              
              68
              %Depreciation
                  and amortization
              
              
              622,009
              
              
              0.8
              %
              
              
              215,880
              
              
              0.5
              %
              
              188
              %Interest
                  expense
              
              
              1,108,957
              
              
              1.5
              %
              
              
              365,994
              
              
              0.8
              %
              
              203
              %Interest
                  and other income
              
              
              -
              
              
              0.0
              %
              
              
              (44,430
              )
              
              -0.1
              %
              
              -Net
                  loss
              
              $
              (3,956,092
              )
              
              -5.3
              %
              
              $
              (909,302
              )
              
              -2.0
              %
              
              335
              %





***Revenues*** *.* Revenues
      increased to $74,421,054 for the thirty-nine weeks ended September 28, 2007
      compared to $45,997,405 for the thirty-nine weeks ended September 29, 2006.
      In
      2007, we operated as a temporary staffing store business for all thirty-nine
      weeks, compared to only twenty-six weeks in 2006.





***Cost
      of Staffing Services*** .
      As a
      percentage of revenue, cost of staffing services increased to 72.1% in the
      thirty-nine weeks ended September 28, 2007 compared to 71.1% for the thirty-nine
      weeks ended September 29, 2006. As noted, the Company generated revenue from
      franchise operations in the first quarter of 2006 and franchise revenues did
      not
      include a cost of services component. This had the effect of decreasing cost
      of
      staffing services as a percentage of revenue. For the thirty-nine weeks ended
      September 28, 2007, the company’s cost of services was above expectations,
      partially as a result of higher than expected workers’ compensation costs.
      During the first quarter 2007, we experienced an unusual increase in workers’
compensation claims that caused a spike in our compensation claims paid. Our
      loss history normalized in the second quarter and declined in the third quarter.
      Margins were also impacted in the first half of 2007 by the hang over of lower
      margin business brought into the Company from the acquisitions of the
      franchisees.





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          Page
          19


***Selling,
      General and Administrative Expenses.*** As
      a
      percentage of revenue, selling, general and administrative expenses increased
      to
      30.9% in the thirty-nine weeks ended September 28, 2007 compared to 29.7% in
      the
      thirty-nine weeks ended September 29, 2006. During the first quarter of 2006,
      the Company operated as a franchisor. The cost structure for selling, general
      and administrative expenses of a franchisor is lower than for an operating
      temporary staffing business. The first quarter 2006 difference in cost structure
      had the effect of reducing selling, general and administrative expenses for
      the
      thirty-nine weeks ended September 29, 2006 when compared to 2007.





***Depreciation
      and Amortization Expenses.*** Depreciation and amortization expenses increased in the thirty-nine weeks ended
      September 28, 2007 to 0.8% of revenue compared to 0.5% of revenue for the
      thirty-nine weeks ended September 29, 2006. This increase is the result of
      acquisition of additional assets and customer lists between periods.





***Interest
      Expense.*** Interest
      expense increased to 1.5% of revenue in the thirty-nine weeks ended September
      28, 2007, compared to 0.8% of revenue in the comparable period in 2006. The
      increase is a result of additional borrowing in 2007. The increase is a result
      of additional borrowing in thirty-nine weeks ended September 28, 2007 and the
      amortization of discounts on notes payable in connection with issuance of notes
      with warrants. Interest in the current year also includes interest on short
      term
      debt at high interest rates.





***Net
      Loss.*** Our net
      loss increased to $3,956,092 (-5.3% of revenue) in the thirty-nine weeks ended
      September 28, 2007 compared to $909,302 (2.0% of revenue) in the thirty-nine
      weeks ended September 29, 2006. The increase in was driven by increases in
      selling general and administrative costs, depreciation and interest and by
      a
      decline in gross margins as a percentage of revenues.





**Liquidity
      and Capital Resources**





At
      September 28, 2007, we had cash of $251,095, total current assets of
      $14,814,741, and total current liabilities of $18,291,495. Our trade accounts
      receivable total $10,706,633 net of the allowance for doubtful accounts of
      $430,000.





Weighted
      average aging of our trade accounts receivable was 37.35 days at September
      28,
      2007, representing a slight improvement over the weighted average aging of
      38
      days at September 29, 2006. Actual bad debt write-off expense as a percentage
      of
      total customer invoices during thirty-nine weeks ended September 28, 2007 was
      0.4%, which is consistent with our expectations. Our
      accounts receivable are recorded at the invoiced amount. We regularly review
      our
      accounts receivable for collectibility. The allowance for doubtful accounts
      is
      determined based on historical write-off experience 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 quarterly.
      We typically refer overdue balances to a collection agency at ninety days and
      the collection agent pursues collection for another thirty days. Most balances
      over 120 days past due are written off when it is probable the receivable will
      not be collected. As our business matures, we will continue to monitor and
      seek
      to improve our
      historical collection ratio and aging experience with respect to trade accounts
      receivable.




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          Page
          20


We
      will
      require additional capital to fund operations during fiscal year 2007, assuming
      we execute our business model and continue to grow our operations as planned.
      Timing of our cash flow requirements will depend in part on the timing of
      seasonal fluctuations, the effectiveness of directed selling efforts, and the
      extent to which our actual rate of growth throughout 2007 matches our growth
      projections for 2007.





As
      we
      grow, we will require significant new sources of working capital to fund
      continuing operations and finance the growth of operating store accounts
      receivable. We are now pursuing several alternatives to generate growth capital,
      either through debt or equity, to relieve the expected negative cash flow during
      2007.





We
      currently operate under a $9,950,000 line of credit facility with our principal
      lender for accounts receivable financing. The credit facility is collateralized
      with accounts receivable and entitles us to borrow up to 85% of the value of
      eligible receivables. Eligible accounts receivable are generally defined to
      include accounts that are not more than sixty days past due. The loan agreement
      includes limitations on customer concentrations, accounts receivable with
      affiliated parties, accounts receivable from governmental agencies in excess
      of
      5% of the Company’s accounts receivable balance, and when a customer’s aggregate
      past due account exceeds 50% of that customer’s aggregate balance due. The
      credit facility includes a 1% facility fee, payable annually, and a $1,500
      monthly administrative fee. The financing bears interest at the greater of
      the
      prime rate plus two and one half percent (prime +2.5%) or 6.25% per annum.
      Our
      line of credit interest rate at September 28, 2007 was 10.75%. The loan
      agreement further provides that interest is due at the applicable rate on the
      greater of the outstanding balance or $5,000,000. The credit facility expires
      on
      April 7, 2009. The balance due our lender at September 28, 2007 was
      $6,718,579.





The
      line
      of credit facility agreement includes certain financial covenants including
      a
      requirement that we maintain a working capital ratio of 1:1, that we maintain
      positive cash flow, that we maintain a tangible net worth of $3,500,000, and
      that we achieve operating results within a range of projected EBITDA. At
      September 28, 2007, we were not in compliance with these loan covenants. Our
      lender has waived compliance with these loan covenants for the period ended
      September 28, 2007.





No
      assurances can be given that we will be able to find additional capital on
      acceptable terms. If additional capital is not available, we may be forced
      to
      scale back operations, lay off personnel, slow planned growth initiatives,
      and
      take other actions to reduce our capital requirements, all of which will impact
      our profitability and long term viability.





**Item
      3.**  **Controls
      and Procedures.**





An
      evaluation was performed by the Company’s president and principal financial
      officer of the effectiveness of the design and operation of disclosure controls
      and procedures. On the basis of that evaluation, the Company’s president and
      principal financial officer concluded that disclosure controls and procedures
      were effective as of September 28, 2007, ensuring that all material information
      required to be filed in this quarterly report was made known to them in a timely
      fashion.





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          Page
          21


As
      discussed in our annual report on Form 10-KSB for the 52 week period ended
      December 29, 2006, we have identified areas of internal control weaknesses
      that
      are currently being addressed. We have made progress on procedures designed
      to
      assure the accurate and complete transfer of data from our temporary staffing
      store management software into our accounting system. We are also in the process
      of hiring additional professional accounting staff to strengthen the depth
      of
      accounting knowledge within the finance department. We continue to assess the
      internal control weaknesses on a monthly basis and are focused on resolving
      any
      remaining internal control deficiencies by the end of 2007.





During
      the fourth quarter of 2007, we also plan to conduct an assessment of our
      controls over financial reporting using criteria established in “Internal
      Control - Integrated Framework” issued by the Committee of Sponsoring
      Organizations of the Treadway Commission (“COSO”). In connection with the
      assessment, we are documenting all significant accounting procedures and will
      test the procedures to determine whether they are designed effectively and
      are
      operating as designed.





Except
      as
      noted above, there have been no changes in our internal controls over financial
      reporting during the thirteen weeks ended September 28, 2007 that have
      materially affected or are reasonably likely to materially affect our internal
      controls over financial reporting.





**PART
      II**





Item
      1.
      Legal Proceedings.





On
      December 31, 2005, ProTrades Connection, Inc. filed a lawsuit against Command
      Staffing, LLC and seven individuals in the Superior Court for the State of
      California, Santa Clara County. The individual defendants are employees of
      Command Center, Inc and were formerly employed by ProTrades. In the lawsuit,
      the
      plaintiff alleges that the individual defendants breached written covenants
      against the solicitation of ProTrades employees. Subsequently, the plaintiff
      amended the Complaint to bring in as defendants other entities, including
      Command Center, Inc. and other individuals. In September, 2007, following
      briefing and argument of our motion for summary judgment, the Judge granted
      our
      motion and dismissed all claims of ProTrades. ProTrades has now appealed the
      granting of our motion and the appeal is pending.





Command
      Center and the remaining defendants intend to continue their vigorous defense
      of
      this case. The Company has not established a contingent loss reserve as the
      outcome of the litigation is uncertain at this point in time.





**Item
      2. Unregistered Sales of Equity Securities.**





In
      the
      thirteen weeks ended September 28, 2007, we issued 385,431 shares of common
      stock in conversion of certain notes payable to affiliates as described in
      the
      footnotes to the financial statements. All of the recipients of these shares
      were either officers, directors, or persons that acquired the shares in the
      roll-up of the franchisees in 2006.





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          Page
          22


All
      of
      the unregistered securities described above were subscribed for or issued in
      accordance with exemptions from the registration requirements of the Securities
      Act of 1933 (the Act) under Section 4(2) and/or Rule 506 of Regulation D adopted
      under the Act and D and the corresponding exemption from registration afforded
      under the laws of the various states in which investors may reside. The
      certificates representing the Common Stock will be restricted securities and
      will bear a legend restricting further transfer unless the shares are first
      registered or an exemption from registration is established to the satisfaction
      of the Company. The shares subscribed for or issued as described above were
      placed by officers and directors of the Company and no commissions were paid
      in
      respect of the placements.





**Item
      6. Exhibits and Reports on Form 8-K.**




Exhibit
                10.1
            Convertible
                Promissory Note dated August 14, 2007 in the amount of
                $500,000.Exhibit 10.2
            Common Stock Purchase Warrant for 250,000
              shares of stock exercisable at $1.50 per
              share.




**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, thereunto
      duly authorized.





COMMAND
      CENTER, INC.





/s/Glenn
              Welstad
            President
                and CEO
            Glenn
                Welstad
            November
                9, 2007Signature
            Title
            Printed
                Name
            Date/s/Brad
              E. Herr
            CFO,
                Principal Financial Officer
            Brad
                E. Herr
            November
                9, 2007Signature
            Title
            Printed
                Name
            Date




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          Page
          23