Labor SMART, Inc.

February 12, 2016 07:45 ET

Labor SMART, Inc. to Explore Sale of Six Branch Locations to The Staffing Group

Company to Announce Live Stream Q & A

ATLANTA, GA--(Marketwired - Feb 12, 2016) - Labor SMART, Inc. (OTCQB: LTNC) (the "Company"), a leader in providing on-demand blue collar staffing primarily in the southeastern United States, today announced that it is exploring the sale of six Labor SMART branch locations to The Staffing Group, Ltd., (TSGL) a publicly traded company controlled by Labor SMART, Inc.

The proposed arms-length transaction would be structured as an asset sale in which Labor SMART, Inc. would receive $1.3 million in cash, $1.3 million in restricted stock of TSGL, and $1 million in a senior secured convertible debenture with a maturity date 24 months from the closing date of the transaction. Labor SMART, Inc. would retain its open accounts receivable at time of close and would continue to operate its remaining branch locations. The six branch locations included in the sale would continue to operate under the laborSMART™ brand and no staff changes would be necessary.

Ryan Schadel, President and CEO of Labor SMART, Inc., commented, "Executing a transaction with this structure allows Labor SMART to monetize some of its operating assets while still participating in the upside performance of those assets via our equity stake in The Staffing Group as well as consolidated financials. All cash received in the transaction would be used to eliminate our remaining convertible debt."

"I believe consummating this transaction would unlock hidden value on our balance sheet and provide some clarity and certainty to Labor SMART shareholders (co-owners) that we have the desire, resources and financial ability to clean up our balance sheet and share structure. Furthermore, this transaction would allow us to invest ongoing resources into the development and launch our Skillcorps™ platform and seek revenue growth from the remaining Labor SMART locations without the heavy weight of toxic debt on our balance sheet."

"As The Staffing Group, Ltd. executes its recently announced acquisition strategy, Labor SMART stands to gain much from its equity position, which can later be monetized or distributed to shareholders through a share dividend of TSGL. A stock dividend of $1.3 million would be an excellent way of rewarding the co-owners that have seen the Labor SMART vision and remained faithful during the difficult last two years."

In the interest of shareholder value, fairness, and avoidance of doubt, Labor SMART will entertain competitive bids for these assets before executing definitive documents for the sale of these six branch locations to The Staffing Group, Ltd.

The Company is requesting feedback on the proposed transaction from all shareholders and requests that questions and comments be emailed to A live stream Q & A via will be announced in the coming days.

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.

Follow us on Twitter: @laborsmart Investor Relations: @laborSMART_LTNC
CEO - Ryan Schadel: @CRyanSchadel

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.

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