![](http://images.investorshub.advfn.com/images/uploads/2015/1/28/Aspose.Words.54fee1d7-76cf-4c17-a7fe-91eaec1cfcb4.001.jpeg)
January 29, 2015 07:45 ET
Labor SMART, Inc. Provides Shareholder Update
Multi-Prong Approach to Improve Balance Sheet Is Progressing
Successfully
ATLANTA, GA - January 29, 2015 - Labor SMART, Inc.
(OTCBB: LTNC)
(the "Company"), a leader in providing on-demand blue collar
staffing primarily in the southeastern United States, is pleased to
report improved operating cash flow and provide its shareholders
with an update on its strategy to improve its balance sheet.
As reported in an 8-K filing on January 27, 2015, the Company
entered into three Partial Note Payment Agreements with holders of
outstanding convertible promissory notes. In aggregate, the Company
shall pay $153,000 in cash to satisfy $126,000 of principal due
under convertible promissory notes.
Ryan Schadel, Chairman and Chief Executive Officer of Labor
SMART, stated, "As expected, recent changes and improvements in
internal processes continue to bear fruit. After negotiating with
some of our note holders we were able to come to a reasonable
agreement to redeem portions of three promissory notes in cash,
preventing the potential issuance of approximately 700 million
shares in a conversion of debt to equity. We expect a continued
increase in cash flow over the next 2 months and will pay down our
debt with cash versus shares when possible, while not sacrificing
long term growth opportunities for our business. In addition to
utilizing our cash flow to reduce dilution to shareholders, we
continue to seek alternative means of financing that would enable
the company to prepay its entire promissory note balance, reducing
further dilution."
Commenting on the recent authorized share increase Mr. Schadel
said, "Late last year we found ourselves in a situation that
required us to reserve a significant amount of treasury stock as
required by note holders. This action was triggered by a much lower
share price than when the notes were entered into. Since the
November 2014 increase in authorized shares, our market cap has
continued to slide, resulting in a similar situation and another
increase in our authorized shares. I greatly underestimated the
repercussions caused by debt to equity conversions. Our note
holders require us to reserve as much as five times the amount of
shares necessary to pay off our debt with equity at any given time,
regardless of whether or not there is eligibility for a conversion.
Being in compliance with this covenant is important to preventing a
default on our debt, which would potentially cost the company many
millions of dollars and in some cases void the prepayment options
included in the notes. As painful as it is to give news of an
increase in authorized but unissued stock, it would be much worse
to give news of a default. We continue to work aggressively to
remove this debt from our balance sheet as quickly as
possible."
The company also confirmed it has not issued any new convertible
debt since November 2014 and expects to eliminate all convertible
debt from its balance sheet by mid-2015.
About Labor SMART, Inc.
Labor SMART, Inc. provides On-Demand temporary labor to a variety
of industries. The Company's clients range from small businesses to
Fortune 100 companies. Labor SMART was founded to provide reliable,
dependable and flexible resources for on-demand personnel to small
and large businesses in areas that include construction,
manufacturing, hospitality, event-staffing, restoration,
warehousing, retailing, disaster relief and cleanup, demolition and
landscaping. Labor SMART believes it can make a positive
contribution each and every day for the benefit of its clients and
temporary employees. The Company's mission is to be the provider of
choice to its growing portfolio of customers with a service-focused
approach that enables Labor SMART to be seen as a resource and
partner to its clients.
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.
Link back to original article on
NuziNet.com
Link back to Labor SMART, Inc. on
NuziNet.com
SOURCE: Labor SMART, Inc.
CONTACT INFORMATION
Contacts:
Hayden IR
917-658-7878
hart@haydenir.com