Labor Smart Inc (OTCMKTS:LTNC) Hoping To Bounce

Labor Smart Inc (OTCMKTS:LTNC) has been a frustrating name for many investors in penny stock land. The company has been trading in triple zero territory for quite some time. Each time it's tried to bounce, shares fell right back down. However, this time the folks over Labor Smart are hoping a $15k pump from the Penny Stock Hub will give the stock the boost it's been looking for.Labor Smart 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.Like many penny stocks, Labor Smart has been the victim of toxic financings. This is the problem the stock has been facing and why it can't hold a bounce. There are currently over 7 BILLION shares outstanding even though in January, CEO Ryan Schnadel cancelled 706,867,658 personally owned shares that were purchased in November 2015. The debt conversions have gotten so toxic that the company had to put out a press release last month to calm the markets. Labor Smart said:

"The company can also confirm that no conversions of debt into equity have occurred since the company's announcement in December that it had entered into various settlement agreements with note holders. Additionally, the company believes that recent aggressive selling may be related to an attempted but failed conversion request by one note holder, that may have sold shares before delivery. The shares requested under this conversion request have not and will not be issued pursuant to the forbearance agreement."

Labor Smart is trying to shore up its financial position and clean up from past mistakes. Last month, Labor Smart sold one branch location to an unrelated 3^rd party. The deal, valued at a total of $677,650 was closed on February 19, 2016. The company received $336,000 cash and retained open accounts receivable of $341,605 in the transaction.This follows the company's earlier announcement to sell six Labor SMART branch locations to The Staffing Group Ltd (OTCMKTS:TSGL) a publicly traded company controlled by Labor SMART. The proposed arms-length transaction would be structured as an asset sale in which Labor SMART 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 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 Labor SMART brand and no staff changes would be necessary.The company's goal is to raise cash and clean up its convertible debt and share structure. Labor Smart has just eliminated over $800,000 in convertible notes payable through its structured cash payment agreements with noteholders. CEO Ryan Schadel said:

"We are making great progress as we reposition the Company for future growth. I look forward to providing updates on the many initiatives the Labor SMART Team is working on, including final elimination of convertible toxic debt from our balance sheet, the launch of our Skillcorps platform, our ongoing discussion surrounding The Staffing Group, Ltd., and our crowdfunding concept for future expansion."

Labor Smart needs to clean up its share structure at a much quicker pace. Until it can reduce its outstanding share count, any bounces will be most likely short lived. Trade accordingly! We will be updating Insider Financial as soon as we know more. For continuing coverage on LTNC and our other hot stock picks, sign up for our free newsletter today and get our next hot stock pick!Disclosure: We have no position in LTNC and have not been compensated for this article.