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Labor Smart, Inc (LTNC)

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Labor Smart, Inc


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

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. 


44 Darby's Crossing Drive
Suite 116
Hiram, GA 30141
Phone: 770-222-5888
Fax: 770-222-5550

Founded 5/31/2011





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Current Price
Bid Ask Day's Range
LTNC News: Termination of Registration of a Class of Security Under Section 12(g) (15-12g) 06/27/2016 02:27:46 PM
LTNC News: Statement of Changes in Beneficial Ownership (4) 06/13/2016 04:52:55 PM
LTNC News: Court Dismisses Fraud Claims Against Labor SMART, Inc. 05/31/2016 10:45:56 AM
LTNC News: National Council on Compensation Insurance Improves Labor SMART, Inc. RatingsSignificant Improvement in Gross Profit Margins 05/03/2016 09:30:00 AM
LTNC News: Labor SMART, Inc. First Quarter 2016 Revenue Jumps $304,100 04/28/2016 11:00:00 AM
#64265  Sticky Note Amazing Support here, Over 1 BILLION BIDDING now! Wowza PENNYMACHINE 06/22/16 10:21:43 AM
#64199  Sticky Note January 2016 is a long time?? mmmmmmmm agribusiness72 06/21/16 06:21:50 AM
#64096  Sticky Note They state news is coming in this dated 6/18/2016.. Prime-Time 06/18/16 02:45:00 AM
#63825  Sticky Note LOL Mr. Mastermind tweeted he thought the retail cpw13154 06/14/16 07:54:19 AM
#47868  Sticky Note Please stay on topic. The only topic to IH Admin [Dan] 02/14/16 12:22:26 AM
#64752   No scam here this one is good. m_m007 06/29/16 01:56:05 PM
#64751   LTNC bid 0.0001 ask 0.0002 volume cuthy 06/29/16 01:41:49 PM
#64750   Guess some haven't been here long enough or cpw13154 06/29/16 01:26:51 PM
#64749   Back to no bid the pump lasted a stock1ace1 06/29/16 01:22:03 PM
#64748   And the overnight trip to Hartford..Also have you cpw13154 06/29/16 01:20:05 PM
#64747   No answers to tweets, emails or phones, cell trader guy 06/29/16 01:04:26 PM
#64746   Lol...yeah sure looks like the LTNC lights are whizent1 06/29/16 01:04:15 PM
#64745   Really LOL better look again! But there was cpw13154 06/29/16 12:59:45 PM
#64744   Maybe retail should dump the rest of your LBYRD 06/29/16 12:59:29 PM
#64743   Until Ryan sets up shop at the "new lam86 06/29/16 12:50:57 PM
#64742   Anyone have any luck finding someone to talk trader guy 06/29/16 12:38:58 PM
#64741   Thanks PT! North we go! LBYRD 06/29/16 12:37:18 PM
#64740   Yes Sir! Happy I loaded yesterday $$$LTNC LBYRD 06/29/16 12:33:59 PM
#64739   Bid support growing, huge huge bounce northward now!! zeffie 06/29/16 12:33:06 PM
#64738   I trust him.. Banking on big moves in Prime-Time 06/29/16 12:30:52 PM
#64737   Nicely done!! Prime-Time 06/29/16 12:30:04 PM
#64736   Sorry you missed on loading 1's I filled LBYRD 06/29/16 12:24:48 PM
#64735   Oops looks like no bid didnt last long. zeffie 06/29/16 12:14:03 PM
#64734   Day 2 of the massive buy back. In Miami Sun 06/29/16 12:07:51 PM
#64733   Because they know what's up...LTNC LBYRD 06/29/16 11:59:35 AM
#64732   Not buys? Hmmm...then explain how 2s are lam86 06/29/16 11:54:50 AM
#64731   Dark buys lol LBYRD 06/29/16 11:52:13 AM
#64730   more 1s peep lol RammageRaul 06/29/16 11:50:51 AM
#64729   2's up!!!! LTNC northbound!!!! zeffie 06/29/16 11:50:18 AM
#64728   The trip to DC should have tipped everyone off. agribusiness72 06/29/16 11:48:42 AM
#64727   LOLOL!!! LTNC is no bid - those aren't I-Glow 06/29/16 11:33:56 AM
#64726   Throwing good money after bad. This scam is toast. malc stone 06/29/16 11:21:04 AM
#64725   90.3 Million BUYS - WOW! This seem's ScottAllen 06/29/16 11:16:56 AM
#64724   LOL still laughing at his PR he put cpw13154 06/29/16 10:42:45 AM
#64723   Why won't Schadel provide the address for the I-Glow 06/29/16 10:36:10 AM
#64721   So I guess some seem to think Ryan cpw13154 06/29/16 10:32:44 AM
#64720   What I posted was that Schadel knew he I-Glow 06/29/16 10:30:28 AM
#64719   Problem is it has a time frame within dheminger 06/29/16 10:22:24 AM
#64716   Only 89 mil on the ask! Get slapping!!! zeffie 06/29/16 10:17:41 AM
#64713   I glow. Where is the proof Tmyz 06/29/16 10:15:01 AM
#64711   Schadel could easily issue more shares after the I-Glow 06/29/16 10:03:45 AM
#64710   Everyone might want to go to the SEC cpw13154 06/29/16 09:40:07 AM
#64709   It seems odd that Schadel moved out of I-Glow 06/29/16 08:48:52 AM
#64708   10 Bagger!!! LOL so lets see all the cpw13154 06/29/16 07:29:16 AM
#64707   LOL This time I think I agree about cpw13154 06/29/16 07:18:20 AM
#64706   Agreed 110% Prime-Time 06/29/16 01:34:10 AM
#64705   No RS IMO, Ryan, all his family, and Prime-Time 06/29/16 01:33:27 AM
#64704   That post was 4:43 PM - 17 May 2016 ScottAllen 06/29/16 12:50:32 AM
#64703   Maybe a 10 bagger will happen after a DD2Gain 06/29/16 12:49:55 AM
#64702   CHRISTOPHER RYAN SCHADEL IS A FRAUD! It's been DD2Gain 06/29/16 12:48:04 AM
#64701   Ever since multiple brokers put a freeze on DD2Gain 06/29/16 12:46:11 AM
#64700   People pouring salt into sounds are creepy. TASBES0101 06/29/16 12:32:14 AM
#64699   Looking forward to another 10 bagger :-) OnFireMyAss 06/28/16 11:31:25 PM
#64698   Bullsh*t videos to make it seem things were Luckydog83 06/28/16 11:13:51 PM
#64697   Acquisition target??? Luckydog83 06/28/16 11:07:47 PM