Labor Smart Inc (LTNC)

[sobe4life]

THE ONLY FALLACIES I SEE ARE OPINIONS MADE AS STATEMENTS WITHOUT COMPLETE AND THOROUGH DUE DILIGENCE.....

DD2Gain

1. The 2014 IRS agreement first reported in the 2014 1Q10Q includes no penalties

Frankly, this is plain ignorant especially considering LaborSMART was charged hefty penalties for being late with far less payroll taxes for 2012. Though late for 2012, LaborSMART managed to pay quickly enough to receive a PARTIAL refund of penalties and interest in 2014. That refund was applied toward a SECOND instance of being late for $1.012 million in 2013 payroll taxes that required a fully structured payment arrangement with the IRS. As anyone with any knowledge of how the IRS works, the second time around with being delinquent is not received kindly in the slightest, but a payment arrangement was achieved all the same. Since the amount delinquent is over $50,000 the IRS typically structures payments over a period of 10 years as that is the statue of limitations for collection action. If Labor SMART is late even once with the payment arrangement, then the IRS initiates seizure of assets as expedited through the placement of a lien on assets THAT IS CURRENTLY IN PLACE against LTNC to secure the delinquent principle of a little over $1 million in payroll taxes. Additionally, the payment structure and principle (principle delinquent not previously reported) owed as first outlined in the 2014 2Q10Q clearly shows that $1,690,000 will be required to be paid back over the full life of the agreement. A little further math shows that there are most certainly steep penalties for habitually playing games with the IRS as anyone with any sense would expect when we consider that just simple 4% interest over 10 years with no payments toward principle would total only $420,000 leaving AT LEAST $270,000 in penalties.

Under the terms of the Agreement, once Labor SMART complied and made a series of on time payments the IRS voluntarily withdrew and rescinded its penalties for the past due amount owed. The IRS successfully removed the penalties in accordance to the Agreement. There is also no 10 year term in the Agreement so any numbers being extrapolated under those terms would be incorrect with any math used to equate numbers. The company is also currently paying simple interest of 3% on the amount owed regardless of what anyone states. Lastly, this company projects to be doing over $100 million in revenues by 2018. More than likely, this debt will be paid off by then.

*THIS CAN BE VERIFIED BY CONTACTING THE COMPANY

2. The IRS lien is subordinate to other loans

Again, under the terms of the Agreement the IRS agreed to take a second position on their standard lien in order to allow Labor SMART the ability to keep the receivable financing through TransFac in place. Any statements to the contrary are false and without merit or knowledge to the actual facts of this matter. Opinions and guesses should not be considered a fact.

*THIS CAN BE VERIFIED BY CONTACTING THE COMPANY

3. There is a "floor" of .15 on a $1.15 million convertible note


No matter how many times we see specific sentences cut and pasted out of the company's SEC 8K filing on August 18, 2014 in order to prove a point, we deserve to look at every word in a document before making a statement or giving an opinion. Factually, the note specifically states that the shares are convertible at .15 cents. Any time there is a specific price of conversion that price is considered "the floor"

The fact that I have brought this out several times YET we continue to see a misrepresentation of facts with cut and pasted excerpts being used as a basis for the erroneous comments should be a red flag in evaluating the validity of the source which this information is coming from.

*AGAIN THIS ISSUE ABOUT THE FLOOR FOR THIS SPECIFIC NOTE CAN BE VERIFIED BY CALLING THE COMPANY

4. The company is transparent and the CEO is open with investors.

Labor SMART is a fully reporting company that must disclose any and all material events whether positive or negative. However, what may be considered material to one company may not be considered material to another. That is why this company has quality SEC counsel and Auditors to guide them with keeping transparent and in keeping compliant.

The issue with the company becoming delinquent in one quarters worth of payroll taxes DID NOT rise to the level of being considered a material event, regardless of what an individual who is not qualified to make that decision considers it to be. Because of that, no 8K was filed and instead it was properly disclosed in their 10Q filing.

A CLEAR PICTURE OF INTENT....

Quote:
This is a deeply troubled company with millions of dollars in losses that is solely dependent on millions of dollars in toxic financing to operate in an industry with very little overhead.

There are no "millions of dollars" in losses. If that were the case then LTNC would not currently be EBITDA positive. There are losses due to interest expenses, derivatives and interest expenses which are commonly referred to as "paper Losses" and non-cash write-offs. That is a clear and concise difference in the perception given as actual monetary losses. Again, a very obvious attempt at misinformation.

The toxic financing is commonplace for virtually every OTC company in existence and should not be construed as a sign of weakness since every company that trades on the OTC market suffers through the same thing. There may be one or two exceptions but convertible notes for start-up companies are the norm NOT the exception. As far as overhead in the industry, there may not be a lot of physical overhead but this industry is heavily taxed and requires a tremendous amount of administration in order to regulate payroll, taxes and insurance properly. Additionally, with triple digit growth every year since inception it is clear to see where they reinvest their revenue streams.

Is it an OTC scam?

OTC scams do not use widely recognized Auditors, accountants and SEC law firms. This is easily searchable through simple Google searches. Additionally, this company has been fully reporting since day one, has physical branches that anyone can go to and is very visible and tangible to the public eye. Over the last 3 years, they have been spot on with all their projections and each and every press release has been factual and accurate.

I believe that the above back and forth we see clearly demonstrates for us as individuals to question the validity of what we read on message boards as it is quite clear that for a very select few, there are no boundaries when it comes to deception.

Because of this, every investor should do there own due diligence. Fortunately, it is very easy to find everything you need to know about this company either by Google search, SEC filings or contacting the company itself.