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Yep. I was wrong. And like everyone else I had no idea that the CEO was buying billions of LTNC shares using $220,000 of company funds that he issued to himself in the form of a bonus.
Billions of shares before PRs about a partnership proposal with another publicly traded company that is caught up in an FBI investigation into securities fraud as recently as November.
A company the CEO used LTNC capital to buy a 10% stake in.
Yep...a lot of people were wrong and a few flippers got lucky in the process.
More SEC violations charges related to TSGL
That's "Staffing Group, LTD". You know, the same company that the LaborSMART CEO recently used LTNC capital to purchase a 10% stake in and wants to partner with.
NOVEMBER 6th 2015 (is that recent enough for ya'?)
In a parallel action, the Securities and Exchange Commission brought stock manipulation charges Wednesday against Morris, Ofsink and Halcyon's Ronald Heineman. The regulator had previously brought charges in July 2014 against Discala, Josephberg, Wexler and broker Matthew Bird.
"Brokers serve important gatekeeper functions in our markets and deterring market manipulation is among them," said Joseph Sansone, co-chief of enforcement for the SEC's market abuse unit, in a statement. "We allege that Morris and Heineman didn't just fail to deter the stock fraud being perpetrated at their brokerage firm, they actively participated in it."
The indictment alleges that Ofsink and others agreed to defraud investors and potential investors in CodeSmart, Cubed Inc., StarStream Entertainment Inc. and the Staffing Group Ltd., between October 2012 and July 2014. The DOJ alleges that the group conspired to control the prices and trading volumes of the companies by issuing misleading press releases and false SEC filings, and hid their ownership in the four companies, rigged price movements and trading volume, and made unauthorized purchases of the stocks in the accounts of unwitting investors.
ROTFLMAO!!!! So, you're implying that Ryan Schadel bought shares...no, no, no...not just shares, but a 10% stake in a company using LaborSMART capital THAT HE KNEW is entangled in securities fraud...
and you're CELEBRATING it???
<chuckles>
FBI investigation into "Staffing Group Manipulation"
On May 7, 2014, Bell sent a text message to Discala, stating, “TSGL is tanking. We still good?” In response, Discala stated, “Yes. Buy all u can at 20 or better. We’re cleaning it up.” That day, Staffing Group’s stock price closed at $0.25 on 178,300 trading volume, a significant decrease from the previous day’s closing price of $0.36 on no trading volume. Similarly, on May 30, 2014, Discala sent a text message to Wexler, stating, “Buy 5k more ts [TSGL] market im gonna get this thing flying.” That day, Staffing Group’s stock price closed at $0.42 per share on 187,300 trading volume, which was almost double the closing price of $0.23 on 6,000 trading volume on the previous day.
Funny how Schadel glosses over these facts:
The company is on track for well over $3 million in losses on "around" $21 million in revenue. It's currently at $2.5 million in losses. Last quarter there would have been close to $1.5 million in losses if Schadel hadn't recorded a gain of $1 million for the sale of 5 branches. I'm guessing that total losses will be over $4 million for this year alone.
If revenue for 2015 totals $21 million as the CEO projected with 30 branches at the beginning of the year and 20 branches by the beginning of the 3rd quarter, what does that say about the direction of this company when last year started off with only 6 branches and ended with 15 generating total revenue of $24 million? Remember also that half of those branches were in their first year. All branches now are well over a year old.
Let's look at some other info regarding the recent conference call:
A: The stock buyback program is a complete joke when he's simultaneously talking about 500 million shares for a supposed employee stock program ESPECIALLY when we factor that a traditional employee stock program was previously cancelled. If 500 million shares is going to (somehow...they're privately owned by the CEO) be the employee stock account, then what the hell is the AS supposed to be while the CEO holds on to over 1.6 billion shares? Remember...10% controlling interest is the goal. Doesn't sound like he intends to buy back much of anything.
B: Convertible note holders most certainly can do conversions in the event Schadel misses any of the monthly payments he has allegedly negotiated with late notes. Furthermore, if we look at the recent 8K we see that Schadel himself openly reserves the right to convert the debt. Considering that Schadel couldn't afford the notes when he was generating more revenue with fewer branches there is only one direction that arrangement can go. And since conversions are absolutely still on the table what will come of that 3-5x share reserves he repeatedly raised the AS to cover in the past?
C: The "True debt" is $3.5 million- not 45% of it- because there is no math in the world that can pay late debt with nothing.
D: The Command Center fiasco is Schadel trying every EXPENSIVE LEGAL TRICK he can to drag on litigation over a debt he admits he owes. Bear in mind that speaking on the "intent" of Command Center to encourage other creditors to force bankruptcy is a clever legal maneuver that is likely the sole reason the judge dismissed a summary judgment because LaborSMART's argument HAS to be given due attention. "Intent" is a very difficult thing to prove and we're talking tortious interference here. Now, if Command Center blatantly tried such a stupid thing, then it's possible that there is a case, but we have seen enough from Schadel over the years to know full well that he is clever with his words to manipulate his shareholders and this appears to be just more of the same old Schadel.
E: The Skill Corps platform and Temp Buddy nonsense is simply nonsense wrapped in "billion dollar idea" rainbows. He is blowing hundreds of thousands of dollars in cash on unproven startups while he is struggling to prove he is anything but a complete fiscal failure.
F: The 10% stake of Staffing Group (TSGL) that he used company capital to acquire is such an obvious farce I can't believe it even needs to be addressed. But let's go ahead and take a look at investigations into stock manipulation of TSGL, shall we? It looks awfully similar to many of the characters Schadel has borrowed money from:
http://www.securitieslawyersblog.com/2014/07/23/investor-alert-brokers-matthew-bell-craig-josephberg-indicted-codesmart-holdings-otc-iten-scam/#more-1255
https://www.fbi.gov/newyork/press-releases/2014/corporate-executives-registered-brokers-and-an-attorney-indicted-for-orchestrating-a-300-million-market-manipulation-scheme-involving-four-publicly-traded-companies
G: Dividends....ROTFLMAO!!!!
To pay for very late notes that he no longer had the option to pay off with cash. At the same time, he was very calculated in his buys and making sure to buy into the run in order to create the illusion that there is significant market interest and drive the price higher for new conversations. Pretty much every time a Form 4 is released we see that insiders account for a giant chunk of the volume, so the market interest has been limited to primarily flippers who are either in on the game or got lucky. Longs, as always, are screwed.
8 billion OS. 20 billion AS. Note holders require 3-5x share reserve. RS is coming. But let me guess...
The CEO promised no more conversions.
No he didn't. The only thing he did was buy time by arranging monthly payments that he couldn't afford before and can't afford now. The note holders would not have been dumb enough to yield their right to convert when Schadel misses payments. The only reason all of that smoke was generated was to generate this run, but that is drying up too.
People have been warned, and warned, and warned.
The numbers speak for themselves and no amount of empty promises, spin, and market manipulation from the CEO is going to change the fact that this company has been run deep into the ground.
Congratulations to the flippers. As for the longs, it looks like the CEO has finally run out of company funds to funnel into conversations.
The losses will be staggering for this year.
Thems the breaks.
He said "plans" for a buyback.....again....and again...
I should have known better than to even try to get on that call. You would have enjoyed hearing the irritation in his voice when he talked about Command Center. They are presenting a HUGE threat and he couldn't quite hide it.
Why wouldn't it? Did you really think the CEO would announce an AS increase in a conference call during a run? Besides, what would he increase it to? 30 billion? 40 billion? What's the highest you've ever seen?
Just remember, note holders require 3-5x share reserves necessary for full conversion. The CEO has said so himself.
Really? $70+ million valuation with revenue that the CEO says may be around $21 million for this year with record losses and millions in negative equity. Right. Don't turn the flip into a trip...
I tried twice and wasn't acknowledged, though I could hear the notification that I was on the conference. The questions seemed really canned, but hey...I don't have skin in this anymore and after that CC I just have to chuckle.
Of course it was. Neat how Schadel had to say he's "not an attorney". I chuckled with the term "extortion". He owes the money. CCNI didn't have to intend to be a creditor when they bought the note. They bought the debt to collect on it and Schadel most likely left himself wide open for everything that means.
You got it. The news is now out and I don't think anyone will be impressed who isn't already holding bags. The OTC is weird, though. Tomorrow should be interesting.
That call was a complete waste of time. I tried twice to get questions in and never got in the queue. The only thing Schadel added to the discussion was that "certain" note holders are accepting monthly payments. He then went on to talk about how the total toxic note debt recorded in the Q is "fully accreted" so he should owe "just" 45% of the $3.5 million without going into how that is possible with the vast majority of the notes being beyond the maturity date (FULLY accreted).
The "non-partnership" with a company that is underperforming by Schadel's estimation is a farce. He claims that a partnership can't happen with Staffing Group until he has time to review their next filing. Funny, we heard a similar song and dance about a conditional acquisition several months ago that never happened. Shareholders should be pissed that he wasted any money on that company's stock, but for it to be $165,000 is just insane.
One of questions I desperately wanted to present was, "The OS is near 10 billion shares with an AS of 20 billion. How do you propose to continue to meet the 3-5x share reserves your not holders require?"
I also wanted to ask about what happened to the late $1 million 2013 payroll taxes that couldn't have been anywhere near paid off by now with the payment schedule the IRS agreed to.
And then there's the question about what happened to the $1 million in branch sales since liabilities reduced by only $258K while total assets reduced by $600K including a $10K reduction in cash on hand.
Ridiculous games. I wonder how the market will react tomorrow.
The CEO gave himself a $220,000 bonus to buy shares. What makes you think the COO wasn't also given a bonus?
There's plenty of yammering about how "good" this company is. It's turned into a great flip, which I certainly didn't think would happen, but hey...GLTA. In the mean time, I'm going keep watching this soap opera and bide my time until the CEO finally burns.
OS passed 10 billion yet?
Once again, there are no "bags" without a sale. Like Kenny Rogers said, "don't count yer money while yer sittin' at the table!"
What part of billions of shares purchased immediately BEFORE public releases detailing a 10% stake in another publicly traded (and pretty much bankrupt) company- USING COMPANY CAPITAL- in which the CEO is pushing a partnership with (through an email...lol) is not evidence of the possibility of illegal insider trading?
And while we're on that track. Exactly what miracle is everyone expecting the CEO to release in the conference call that wouldn't further support that suspicion?
Rest assured that the SEC has been made aware of the activities with this CEO.
Flippers are doing great here and that's awesome for them, but there are a lot of shareholders who have been diluted into a practically worthless position because of the CEO's latest activities and more.
Good luck to you.
Well, you're probably right. Which means that all this volume at progressively higher pps is largely a farce. So where does that leave the longs if Ryan Schadel doesn't have a genuinely epic conference call that does not solidly expose him as participating in illegal insider trading?
Without material developments (something that would land Schadel in jail for all his billions of pre-news purchases) there is nothing to keep this bubble from collapsing. Friday is a long way off for those holding at the bell today.
EOD should be interesting and tomorrow morning should be even more interesting.
The flippers know what they're doing. It's the longs who are going to get burned by the inevitable RS. Every tick up is a tick closer to disaster. The dump is going to be epic.
I wonder how close the OS is to 50% of the AS. Billions of shares have traded for the past few weeks and a solid chunk of that has been the CEO buying his own shares while note holders convert. Prior to that, there wasn't enough volume for note holders to do much of anything.
The Schadel Charity Fund is doing better than I expected, but I think the PPS is being floated largely by the CEO and by a lot of longs who have been around a very long time and waiting to seize an opportunity to get the hell out.
Common stock; $0.00001 par value; 20,000,000,000 shares authorized, 6,627,295,812 and 180,455,103 issued and outstanding as of September 25, 2015 and December 26, 2014, respectively.
There is no bagger unless it's sold. Flipping 101. Feeling lucky, I guess. If you think I've got anything to do with that, then I am pretty damn awesome. Thanks!
lol!!! Ryan Schadel was responsible for almost half the trades yesterday. So much empty support in this pps it's stupid.
1 billion shares were added to the OS after the CEO's buying spree with his "bonus" company cash. Ain't nothing getting fixed except an exit strategy.
Half a BILLION shares traded for just one more tick. And don't forget about the 200 million yesterday with no movement. How much closer to the 20 billion AS do you suppose the OS is now? Nothing is working except manipulation, but feel free to not care.
One more thing. If you're holding on, you might want to do the math on how many shares it takes to convert the late debt and what that means for the pps. Don't get stuck holding the bag because of blind faith in a CEO with a proven track record of failure.
Only a fool looks at LTNC as an investment. It's making a surprising and decent flip for a lucky few, but I'd venture to say that most shareholders are in at much higher than the current pps and desperate just to break even before the AS is completely used up and an RS is announced. I've no position here, so no I am not sweating in the slightest.
It has nothing to do with you agreeing. It has everything to do with the responsibility of executives running a publicly traded company. "Publicly traded company". That means the company does not belong to the CEO for his reckless whims. It belongs to the shareholders who tried to be investors with faith in Schadel and got thoroughly shafted by a loser CEO.
The more Ryan Schadel buys of his worthless stock the more volume you get. No mystery there. I'm interested to see more Form 4's to see how much Schadel has been propping up the stock.
It's not "his" money in any sense except that he called it a bonus. It's the note holder's money for late notes, it's the IRS's money for unpaid payroll taxes, and, most importantly, it's the shareholder's money.
All of this activity is a farce perpetrated by he CEO's irresponsibility and it WILL come crashing down in one way or another.
Nope. Just diluting all his shareholders.
7billion OS, 20billion AS. $3million in late notes.
Luckily for the CEO, he's got his Twitter groupies doing everything they can to promote this sham. Yeah, I see who he communicates with. His agenda is obvious and it looks like there's no shortage of people with rainbow colored glasses to sell a worthless company to.
I don't believe there is a substantial renegotiation of debt. Schadel used almost the exact same words earlier in the year only for us to find out that something like 3 note holders simply extended the maturity date at a steep cost. I wouldn't be surprised if he reveals something similar.
However, even if ALL of the note holders renegotiated how does Schadel cover $2 million in payroll taxes with only $125,000 cash on hand?
With the shift in branch numbers and seasonality it's difficult to say what revenue is truly doing, but numbers for numbers show a steady decline YOY.
Also, wasn't there an announcement earlier this year that the factor financing credit facility was increased to $4 million? According the the last Q, there is only $1.75 million factored, but $2.53 million in receivables. Looks to me like that credit facility was scaled back to $2 million, which means Schadel is not paying notes or taxes in order to keep up with payroll and that can only get worse when he is desperate enough to get loans for a straight 59% interest due in daily installments.
Schadel started something good that may be salvageable under the right terms, but I don't see note holders having any part of that without an even more substantial stake in the plan. My guess is that his recent purchase of billions in shares is part of a personal exit plan. Someone else stepping up to run the a private LaborSMART?
Imagine how crappy it was when you had to call a broker to execute a transaction. At least people pretty much control their own fate with online trading.
Here's an updated rehash of recent exciting developments:
CEO owes $3.5 million in toxic notes of which about $3 million is past due that converts at 60% of pps typically averaged over 10-20 trading days. (Currently, that would be 60% of approximately .0002)
The OS is over 7 billion, the AS is 20 Billion, and if the notes are currently converting at a generous .0002 (which they're not) it will take 14 billion shares to convert what's late, yet Schadel has repeatedly increased the AS in the past because he has stressed that note holders require 3-5x share reserve. 3-5x share reserve would require an AS of AT LEAST 63 BILLION SHARES!!!
CEO owes $2 million in payroll taxes with a $1 million delinquency from 2013.
$11 million in total losses.
$2 million in losses for 2015 alone.
Branches reduced from 32 to 20.
Revenue not even matching YOY despite up to twice as many branches.
CEO getting more toxic notes any chance he can.
CEO awarded himself $220,000 bonus, then used it all to buy LTNC shares for himself. In as much as the purchases were likely intended to create the impression that there is market interest in this stock, there is no denying the fact that he now owns 2.4 billion shares of the company, which secures a 10% stake through the FULL DILUTION of the AS and a reverse split.
CEO took out a $175,000 loan at 59% interest, then spent over $165,000 on stock purchases in another staffing company- AND IS FLIPPING SHARES PER THE LATEST FILINGS.
All the BILLIONS of LTNC stock that the CEO purchased recently was immediately BEFORE releasing a PR about a partnership offer sent to the company that he used company cash to purchase a 10% stake in. -Illegal insider trading???
Some other interesting things to consider:
1. Downgraded from OTCBB to OTC Pink.
2. AS increased to 20 billion two months after it was increased to 1 billion, after it was increased to 200 million (I think), after the initial AS of 75 million.
3. With every AS increase the CEO insisted it wasn't for dilution.
4. CEO retracted an S1 that was supposed to be for an uplist to NASDAQ.
5. CEO claimed there was an "interesting" buyout offer, then revealed the next day that it was actually a competitor leveraging a bankruptcy proceeding to collect on a late toxic note they bought.
6. CEO claimed there was another acquisition on the table, then never followed up on it, which we now know never happened.
This stock once traded for up to .80 and has lost 99.9% of it's value even from just ten cents. The current 52 week high is under a penny and going down rapidly.
It can't be said enough: BUYER BEWARE!!
RYAN SCHADEL...YOU OBVIOUSLY READ THESE POSTS:
I'll be in on the conference call next Monday if you have the cajones to actually go through with it.
You have a lot of nerve sending out a tweet about "bashers and trolls" after all you have done to wreck this company and strip 99.9% of any shareholder's investment who may have actually stuck with you for the past two years.
Why did you shut off comments on your blog? There was an interesting exchange going on with Tori Jackson about that silly "Gratitude" entry and the $220,000 in gratitude you gave yourself.
You'd best be ready...
Try reading this post REALLY slow for comprehension...
There was no point in mentioning "hostile takeover" unless the option was being put on the table. Didja' miss the part about "protecting" his "investment"?
And then for someone who claims to be a professional to send such a brazen letter by email of all ways is just trashy especially when we consider that Ryan Schadel has an almost identically failed company.
C'mon, if we're going to be mouthpieces for the CEO at least TRY to say something credible.
So much desperation. I wonder how many shareholders are stuck with averages much higher than this level and trying so hard for a run to recover their losses while fighting a wave of flippers trying to beat the $3,000,000 in convertible notes getting ready to pour into the market.
Well, getting my popcorn ready for tomorrow!