Labor Smart Inc (LTNC)

[DD2Gain]

Great facts...and fairly meaningless.

*Company has gone from 14 to 32 branches in 2014
By going delinquent on over $1million in payroll taxes and accumulating over $2.5 million in convertible notes.

*Company has surpassed 2013 revenues of $16 million by showing $18 million as of September 26th with 3 months left in the year and a projection of $25 million for 2014.
The Growth this year is anemic compared to last year and most of it can be attributed to the first 14 branches that tapped out their revenue growth before the peak labor season ended this year. I will be thoroughly surprised if revenue this year actually gets to $25 million.

*Company has bolstered its corporate infrastructure with additional proven management in 2014.
Really? Who? We need only take a look at the "management team" on the Labor Smart website to see who "they" are. here's that link: http://client.irwebkit.com/Laborsmart/management-team. Here's the board of directors (all two): http://client.irwebkit.com/Laborsmart/board-of-directors

*Gross profit margins have increased by 8% going from 15% to 23% so far in 2014.
Yu-huh. That's because of becoming self-insured. Wait until the medical claims roll in that there is no money to pay without convertible financing.

*Company is now showing positive EBITDA.
So....? How far are we from net profit?

*Losses as a percentage of revenues are declining.
Already addressed with gross profit margin.

*Company continues to accumulate over $2 million in assets. The majority of which are cash from receivables.
Great! Oh...but those darn losses and liabilities. And toxic financing. And IRS debt...


*Company has ponied up the money and is now self-insured which will bring about $350,000 to the company's bottom line
Talk about repetitive...


$2.5 million in toxic financing is not an "error in judgment". It's desperation.