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Labor Smart, Inc (LTNC)

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Labor Smart, Inc

No 2015 10K
No 2016 First Quarter 10Q
Form 15 filed, so NO 2016 Second Quarter 10Q
LaborSMART has gone dark!


Company Overview:

Labor SMART, Inc. provides On-Demand temporary labor to a variety of industries. Their clients range from small businesses to fortune 100 companies. Labor SMART was founded to provide a reliable, dependable, and flexible resources for on-demand personnel to small and large businesses.
Every day they provide manpower for jobs in construction, manufacturing, hospitality, events, restoration, warehousing, retail, disaster relief and more. As one of the fastest growing temporary labor providers, their goal is to become a
nationwide resource and partner for their clients. Labor SMART takes pride in the belief that they can make a positive impact each and every day for the benefit of both their clients and temporary employees.


CEO Currently Owns: 2.185billion Shares

*Shortly before buying over 1 billion shares at or near no-bid in November 2015, Ryan Schadel gave himself a $220,000 cash bonus as revealed in the 2015 3rd quarter 10Q.
Since no further reports have been filed, it is unknown how much more cash he has given himself in the form of bonuses or increased salary.

Labor SMART Issues Open Letter to The Staffing Group CEO

Company Seeks to Form Strategic Alliance

ATLANTA, GA -- (Marketwired) -- 12/01/15 -- Labor SMART, Inc. (OTCQB: LTNC) (the "Company"), a leader in providing on-demand blue collar staffing primarily in the southeastern United States, today delivered via email the following open letter to the President and Chief Executive Officer of The Staffing Group, Ltd. (TSGL).

December 1, 2015
400 Poydras St., Suite 1165 
New Orleans La 70130
Delivered Via Email

RE: 13D Filing by Labor Smart, Inc.

Mr. McLoone,

As you are now aware, our purchase of 2,000,000 shares of The Staffing Group Ltd. common stock on November 30, 2015 was followed by a Schedule 13D filing with the SEC, due to our previously unannounced acquisition of 1,758, 618 shares of common stock in the open market and the nature of our intentions. The purpose of this letter to you today is to clearly state what those intentions are and seek common ground for a mutually beneficial discussion.

Having launched Labor SMART, Inc. as a publicly traded startup, I am sensitive to the challenges of building a sustainable business from scratch with the added fun of engaging the public markets and all that entails. I am quite familiar with the history of your company and we've had some discussions over the last two years regarding potential opportunities, business combinations, etc. I'm also aware of the burdens you were handed almost immediately upon becoming CEO of a public company. Given those challenges, I commend you for the successes you've been able to claim along the way. 

At this time, we have three separate, but related proposals that we would like to discuss with you in a formal setting.

Leveraging Synergies

In your Form 10-Q for the quarter ended June 30, 2015, you discuss improved gross margins after shedding some high volume business. This is a tough and gutsy decision to make for the long term health of the company, and again, I commend you for taking this action. Still, with gross profit margins under 19%, a lot of profitability is left on the table. As you may know, Labor SMART attained a large deductible workers compensation policy in 2014 that drastically reduced our cost of sales. A business combination with Labor SMART could unlock value and profits hidden behind the high cost of workers compensation you are incurring. I propose that we work together to prepare a detailed analysis of the potential gains that could be had with Labor SMART's strong workers compensation program as the backbone of a reduction in cost of sales. This analysis should start with an examination of your loss runs for the last three years. There may also be a number of synergies that could be obtained leveraging Labor SMART's corporate support structure and your company's footprint. Additionally, there are undoubtedly vertical sales opportunities given the combined size of our respective customer bases. 

Leveraging Experience

Having worked with you at WTS before it was sold to MDT (and subsequently TrueBlue), I know that you are a solid operator with a conservative approach to risk. It is my belief that our combined teams and their experience would offer much to our collective customers, shareholders, and employees. The first component of this proposal is that we work together to create a joint venture, or similar structure, to license the Labor SMART brand, processes, and methods in addition to a management service agreement whereby Labor SMART will provide the necessary infrastructure to facilitate an aggressive growth plan and The Staffing Group provides the day to day management. 

Any growth plan will require capital. I've encountered a number of challenges to raising capital as a publicly traded company. Raising startup capital itself is expensive and as our share structure indicates, extremely dilutive without a substantial amount of financial engineering from the beginning. I've raised a small amount of money for Labor SMART and we successfully grew our business to over $20 million in less than three years. I'm grateful that we were able to get funding to build the company, but I would do it differently knowing what I know now. I've expended the better part of 2015 playing defensive and trying to protect LaborSMART's shareholders from massive dilution. Fortunately, we have been able to renegotiate the mechanics of our convertible debt and believe we can repair the share structure now that we have better control of conversion rights, but the time lost can never be recovered. And that leads me to the second part of this specific proposal.

Should we reach mutually beneficial terms to have Labor SMART license its systems to The Staffing Group, I propose that we take a "fund from the ground up" approach. Crowd funding legislation is due to go in to affect next year. I believe there is an opportunity to crowd fund the startup capital for each new individual branch that's opened. Labor SMART will agree to be the lead investor with a minority ownership percentage of each branch opened under the licensing agreement, but with an option to acquire the branch at its discretion in the future for a predetermined multiple of earnings. This structure would insulate your shareholders from massive dilution and still allow for continued growth of the Labor SMART brand. For The Staffing Group, this structure offers a runway to ramp up sales and branch network in a meaningful way and an equity event as licensed branches are acquired by Labor SMART. 

Expand the Board

Lastly, we propose that The Staffing Group increase its Board of Directors from two directors to a total of five directors, two of whom will be appointed by Labor SMART, Inc. and a third by mutual agreement of Labor SMART and The Staffing Group. I do not expect that this request would be obliged without some consideration. We are open to exploring a number of different options to get this request effectuated in a swift manner. I believe you would agree that one of the most important tasks you currently face is getting your Form 10-Q filed for the period ended September 30, 2015. We do not wish to upend that process with added procedural burdens. To be clear, Labor SMART will take steps to protect its investment if necessary, but we do not have the intent of becoming a hostile suitor. Our industry is built on relationships and Labor SMART believes in creating partnerships and opportunity, not enemies. 

In summary, both companies can benefit greatly by engaging in a mutual partnership, even if the structure is somewhat different from the ones we have proposed. I believe it is in the best interest of The Staffing Group's shareholders, with Labor SMART, Inc. as one of the largest holders, to explore any and every opportunity that may be present to build value and sustainable profitability for the benefit of all. As two sizeable regional players in our industry, we must act boldly to create opportunities for the future. 

I look forward to scheduling a meeting with at your earliest convenience,


C. Ryan Schadel
President & CEO - Labor SMART, Inc.

Safe Harbor Statement This release contains statements that constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements appear in a number of places in this release and include all statements that are not statements of historical fact regarding the intent, belief or current expectations of Labor SMART, Inc., its directors or its officers with respect to, among other things: (i) financing plans; (ii) trends affecting its financial condition or results of operations; (iii) growth strategy and operating strategy. The words "may", "would", "will", "expect", "estimate", "can", "believe", "potential", and similar expressions and variations thereof are intended to identify forward-looking statements. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, many of which are beyond Labor SMART, Inc.'s ability to control, and that actual results may differ materially from those projected in the forward-looking statements as a result of various factors. More information about the potential factors that could affect the business and financial results is and will be included in Labor SMART, Inc.'s filings with the U.S. Securities and Exchange Commission.

Contact: Labor SMART, Inc.

Source: Labor SMART, Inc. 


Unknown address for headquarters!
Ryan Schadel tweeted at the end of June 2016 that he moved to a more "cost effective location", but has not disclosed the location.

Founded 5/31/2011





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#68499  Sticky Note When will shareholders hold Schadel accountable for his agribusiness72 12/22/16 04:22:09 AM
#66569  Sticky Note Fraud suit against LaborSMART back on track! DD2Gain 08/25/16 12:41:40 AM
#65374  Sticky Note Excellent DD - Scott Stoner forgot about the I-Glow 07/14/16 03:28:22 PM
#47868  Sticky Note Please stay on topic. The only topic to IH Admin [Dan] 02/14/16 12:22:26 AM
#69107   I see Ryan pushing other penny stocks on Richard4000 03/25/17 10:50:33 PM
#69103   LTNC is no more! Ryan move on months ago. cpw13154 03/22/17 05:52:16 PM
#69102   About 4 posters here.. any investors have future Prime-Time 03/22/17 01:54:16 AM
#69101   Funny you quote Reuters and Etrade but neither Nacho15 03/21/17 09:15:14 PM
#69100   No link, as it's listed in E*TRADE under Prime-Time 03/21/17 09:01:33 PM
#69099   I see that the incompetent Schadel is now I-Glow 03/21/17 05:33:20 PM
#69098   I've looked on e-Trade multiple times this afternoon, N2Pennies 03/21/17 03:36:55 PM
#69097   Post the article if it is that great I-Glow 03/21/17 01:23:07 PM
#69096   On E*TRADE under news on LTNC Prime-Time 03/21/17 11:00:53 AM
#69095   Link? r1aviator 03/21/17 02:23:56 AM
#69094   Reuters Global has listed analysts research report for Prime-Time 03/21/17 01:55:22 AM
#69093   $1,414 to be exact Figures 03/20/17 07:59:28 PM
#69092   Great daily volume, cleaning up that share structure Prime-Time 03/20/17 07:29:24 PM
#69091   Guaranteed POS, Ryan already states this ticker is #1 PATRIOTS_RSOX FAN 03/18/17 02:21:03 PM
#69090   lol really, a guarantee... please do explain? Nacho15 03/18/17 01:55:44 PM
#69088   This one for sure... it's a guarantee IMO! $$$LTNC Prime-Time 03/17/17 11:30:44 PM
#69087   Some OTC gamblers will buy just about anything Monksdream 03/17/17 08:28:34 PM
#69086   Since when has Schadel been truthful? IG I-Glow 03/17/17 07:50:11 PM
#69085   You do realize going dark and gagging ta Nacho15 03/16/17 05:30:41 PM
#69084   Ryan said in past posts, about 300K of Prime-Time 03/16/17 02:33:56 PM
#69083   Someone's loading every day.. thinking it's Ryan, 7,000,000 Prime-Time 03/16/17 02:33:15 PM
#69082   Armageddon tired of waiting on this POS AllSeeingEyeDog 03/16/17 11:52:17 AM
#69081   I couldn't agree with you more. RamsnastyMcBickle 03/15/17 06:29:00 PM
#69080   OH but the really funny one was when cpw13154 03/14/17 05:08:19 PM
#69079   What ever happened to the job opening where agribusiness72 03/14/17 12:21:15 PM
#69078   Still believe Ryan is loading and cleaning up Prime-Time 03/14/17 02:03:30 AM
#69076   Schadel already said, never coming out of dark. #1 PATRIOTS_RSOX FAN 03/13/17 07:52:20 AM
#69075   Lots of recent job postings listed on Zip Prime-Time 03/13/17 01:15:54 AM
#69074   young ryan schadel sold me a moonshine still once.. dizzydon 03/10/17 08:01:43 PM
#69073   I've got lots of bags! AllSeeingEyeDog 03/09/17 11:50:25 AM
#69072   Forget the shadow stocks Ryan finds surrounding $LTNC. Prime-Time 03/08/17 12:47:08 AM
#69070   Mabye afpw will earn a shiny STOP SIGN too? TRLRPRK-TRADER 03/06/17 10:47:44 PM
#69068   Funny how Schadel has left LTNC in the #1 PATRIOTS_RSOX FAN 03/06/17 10:39:53 AM
#69067   You mean like listen to his video? Funny cpw13154 03/05/17 08:33:13 PM
#69066   I've done my due diligence here. malc stone 03/05/17 05:58:50 PM
#69065   That is correct. LTNC is never getting akyno47 03/05/17 02:36:32 PM
#69064   guess it wasn't a lie as we were cpw13154 03/05/17 02:45:06 AM
#69063   Yes, plus just to reiterate as prime is Nacho15 03/04/17 04:33:15 PM
#69062   So as we were told list to the cpw13154 03/04/17 04:16:24 PM
#69061   It does not take DD to see Shady Sound Judgement 03/04/17 12:55:04 PM
#69060   Great live stream with Ryan today... $LTNC seams Prime-Time 03/04/17 06:00:01 AM
#69059   Sorry 21 minute mark not 24 minute mark. #1 PATRIOTS_RSOX FAN 03/04/17 12:19:35 AM
#69058   26 minute mark he avoids the Dark question #1 PATRIOTS_RSOX FAN 03/04/17 12:17:30 AM
#69057   Here's a link to the video where you Nacho15 03/04/17 12:15:14 AM
#69056   You must have watched the wrong video or Nacho15 03/04/17 12:06:41 AM
#69055   21 minute mark he said, ltcn dark forever #1 PATRIOTS_RSOX FAN 03/04/17 12:04:09 AM
#69054   Ryan speaks English and all can listen to Prime-Time 03/03/17 11:54:11 PM
#69053  Restored This is exactly what POS CEO Ryan said #1 PATRIOTS_RSOX FAN 03/03/17 11:47:26 PM
#69052  Restored Re: Nacho15 Post# 69050 False! Not what was said... Prime-Time 03/03/17 11:41:58 PM