0001520138-21-000354.txt : 20210716 0001520138-21-000354.hdr.sgml : 20210716 20210716164330 ACCESSION NUMBER: 0001520138-21-000354 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20210714 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Completion of Acquisition or Disposition of Assets ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20210716 DATE AS OF CHANGE: 20210716 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Labor Smart, Inc. CENTRAL INDEX KEY: 0001522469 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-HELP SUPPLY SERVICES [7363] IRS NUMBER: 452433287 STATE OF INCORPORATION: NV FISCAL YEAR END: 1226 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-54654 FILM NUMBER: 211095907 BUSINESS ADDRESS: STREET 1: 3270 FLORENCE ROAD STREET 2: SUITE 200 CITY: POWDER SPRINGS STATE: GA ZIP: 30127 BUSINESS PHONE: 770-222-5888 MAIL ADDRESS: STREET 1: PO BOX 1500 CITY: POWDER SPRINGS STATE: GA ZIP: 30127 8-K 1 ltnc-20210716_8k.htm CURRENT REPORT
 
 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

PURSUANT TO SECTION 13 0R 15 (D) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

Date of Report (Date of earliest event reported) July 14, 2021

 

LABOR SMART, INC.
(Exact name of registrant as specified in its charter)

 

Nevada   45-2433287
(State or other jurisdiction of incorporation or organization)   (I.R.S. Employer Identification No.)

 

3270 Florence Road, Suite 200, Powder Springs, GA   30127
(Address of principal executive offices)   (Zip Code)

 

Registrant’s telephone number, including area 770-800-3728

 

Copies to:

Ken Bart

Mitchell Silberberg & Knupp LLP.

437 Madison Avenue, 25th Floor

New York, NY 10022

Tel: 917-546-7768

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class Ticker symbol(s) Name of each exchange on which registered
None    

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ¨

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

 
 
 
 

Forward-Looking Statements

 

This Current Report on Form 8-K and other written and oral statements made from time to time by us may contain so-called “forward-looking statements,” all of which are subject to risks and uncertainties. Forward-looking statements can be identified by the use of words such as “expects,” “plans,” “will,” “forecasts,” “projects,” “intends,” “estimates,” and other words of similar meaning. One can identify them by the fact that they do not relate strictly to historical or current facts. These statements are likely to address our growth strategy, financial results and product and development programs. One must carefully consider any such statement and should understand that many factors could cause actual results to differ from our forward looking statements. These factors may include inaccurate assumptions and a broad variety of other risks and uncertainties, including some that are known and some that are not. No forward looking statement can be guaranteed and actual future results may vary materially.

 

Information regarding market and industry statistics contained in this Current Report on Form 8-K is included based on information available to us that we believe is accurate. It is generally based on industry and other publications that are not produced for purposes of securities offerings or economic analysis. We have not reviewed or included data from all sources, and cannot assure investors of the accuracy or completeness of the data included in this Current Report. Forecasts and other forward-looking information obtained from these sources are subject to the same qualifications and the additional uncertainties accompanying any estimates of future market size, revenue and market acceptance of products and services. We do not assume any obligation to update any forward-looking statement. As a result, investors should not place undue reliance on these forward-looking statements.

 

Item 1.01 . Entry into a Material Definitive Agreement

 

On July 14, 2021, Labor Smart, Inc. (the “Company”) entered into a Purchase and Sale Agreement (the “Agreement”), whereby the Company sold all of the assets and liabilities related to its staffing business the (“Staffing Business”) to the former Chief Executive Officer of the Company. The Company, pursuant to the Agreement, sold the Staffing Business for a purchase price of $500,000, $300,000 of which has been received by the Company, with the additional $200,000 to be received within 90 days from the date of the Agreement.

 

The foregoing description of the above referenced Agreement does not purport to be complete. For an understanding of the terms and provisions, reference should be made to the Agreement attached as Exhibit 10.1 to this Current Report on Form 8-K.

 

Item 2.01. Completion of Acquisition or Disposition of Assets.

 

The information described in Item 1.01 above is incorporated herein by reference to this Item 2.01.

 

Item 9.01 Financial Statements and Exhibits.

 

(d) Exhibits.

 

In reviewing the agreements included or incorporated by reference as exhibits to this Current Report on Form 8-K, please remember that they are included to provide you with information regarding their terms and are not intended to provide any other factual or disclosure about the Company or the other parties to the agreements. The agreements may contain representations and warranties by each of the parties to the applicable agreement. These representations and warranties have been made solely for the benefit of the parties to the applicable agreement and accordingly, these representations and warranties may not describe the actual state of affairs as of the date they were made or at any other time. Additional information about the Company may be found elsewhere in this Current Report on Form 8-K and in our other public filings, which are available without charge through the SEC’s website at http://www.sec.gov.

 

 -1-

 

Number   Description
10.1   Purchase and Sale Agreement.

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

  LABOR SMART, INC.  
       
Date: July 15, 2021 By: /s/ Joe Pavlik  
    Joe Pavlik  
    Chief Executive Officer  

 

 -2-

 EX-10.1 2 ltnc-20210716_8kex10z1.htm EXHIBIT 10.1

Purchase and Sale Agreement

This Purchase and Sale Agreement (this “Agreement”), dated as of July 6, 2021 (the “Effective Date”), is entered into by and between Labor Smart, Inc., (“Labor Smart”), Takeover Industries, Inc. (“Takeover”) (Labor Smart and Takeover may be referred to collectively as the “Seller”), and Ryan Schadel (“Schadel”).

RECITALS

WHEREAS, Labor Smart, Inc., entered into a Stock Purchase Agreement and a Business Purchase Agreement (collectively, the “Purchase Agreement”) with the shareholders of Takeover on February 26, 2021, with TakeOver becoming a wholly owned subsidiary of Labor Smart, and the shareholders of Takeover collectively assuming a controlling voting interest of Labor Smart; 

WHEREAS, Labor Smart is in the business of providing temporary staffing and employment services (the “Staffing Business”, as defined in Section 1 below);

WHEREAS, TakeOver is in the business of creation and sale of food, beverages and associated lifestyle brands (the “Takeover Business”);

WHEREAS, Prior to the closing of the Purchase Agreement, the CEO of Labor Smart was Schadel, a resident of Georgia;

WHEREAS, Joseph “Joe” Pavlik, the CEO of TakeOver, has become the CEO of Labor Smart and has installed new management and a sales team to operate the Takeover Business;

WHEREAS, Labor Smart, through Schadel, continued to operate the Staffing Business subsequent to the closing of the Purchase Agreement without the knowledge of TakeOver’s management team; and

WHEREAS, TakeOver and Labor Smart wish to sell the Staffing Business in its entirety, including all assets and liabilities of any kind or nature related to the Staffing Business, which may have exist as of the date of this Agreement, or which may arise subsequent to the date of this Agreement, whether known or unknown,, to Schadel.

NOW THEREFORE, in consideration of the mutual promises of Seller and Schadel contained herein, and other good and valuable considerations, the receipt and sufficiency of which is hereby acknowledged, on the Effective Date, THE PARTIES HERETO AGREE AS FOLLOWS:

 

1. Sale and Purchase of Staffing Business

With the execution and delivery of this Agreement, Seller shall have sold, transferred, assigned and conveyed to Schadel, and Schadel shall have purchased and received from Seller, all one hundred percent (100%) of Seller’s rights, title to and interest in the Staffing Business, all of Seller’s interest in all of Seller’s rights, title to, interests in, and obligations under all contracts, agreements, assets, and liabilities of any kind or nature, known or unknown, which exist as of the date of this Agreement or that exist subsequent to the date of this Agreement pertaining to said Staffing Business. “Staffing Business” means and includes all of Seller’s rights, title and interest in any business operating within Labor Smart before the closing of the Purchase Agreement, and, after the TakeOver purchase, any business providing employment or staffing services or any other business of any kind or nature operated by Schadel not disclosed to TakeOver. “Staffing Business” further includes all of Seller’s rights, title to, interests in and obligations under agreements, contracts and all liabilities related to the Staffing Business as defined herein.

 
 
  2.2 Assignments and Assumptions

Upon execution of this Agreement, Seller shall sell, transfer, convey and assign to Schadel, and Schadel shall purchase, receive and assume from Seller, all of Seller’s rights, title to, interests in and liabilities and obligations in connection with the Staffing Business. It is explicitly agreed and acknowledged by Schadel that Labor Smart, Takeover, and each of their respective officers and directors shall have no liability for any of the liabilities associated with the Staffing Business or any other business operated by Schadel or his affiliates either prior to, or subsequent to the date of this Agreement.

 

3. Purchase Price

In exchange for the assets, liabilities, and interests purchased, transferred, conveyed and assigned by Seller to Schadel, Schadel shall pay a non-refundable cash fee of Five Hundred Thousand Dollars ($500,000) as follows:

1. Upon execution, Schadel will pay $300,000 cash to Labor Smart or Takeover, in the discretion of the board of directors of Labor Smart. 

2. Within 90 days of the Effective Date, Schadel will pay, or will cause to be paid, an additional $200,000 to Labor Smart or Takeover, in the sole discretion of the board of directors of Labor Smart.

3. Schadel will assume the approximately $1,300,000 of known debt related to the Staffing Business, as well as all other debts related to the Staffing Business that are unknown to Labor Smart and Takeover. 

4. Schadel will assume all liability for repayment on two promissory notes from Alpha Capital, Inc. to Takeover, which are as follows: (i) a promissory note for $150,000, executed on April 20, 2021; and (ii) a promissory note for $90,000, executed on May 25, 2021.

5. With respect to the Staffing Business, Schadel will assume any and all associated leases, liabilities, loans, claims, accounts, known or unknown, public or private, now known or in the future, including but not limited to: 

(i) A Paycheck Protection Program Loan to Laborsmart, Inc., SBA Loan #6345837805, in the amount of $1,007,000.

 
 

(ii) Any Alpha Capital Group, Inc. promissory notes or other debts related to Laborsmart, Inc., Labor Smart, Inc. or the Staffing Business. 

5. Representations and Warranties of Seller.

Seller is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and has all necessary power and authority: to conduct its business in the manner in which its business is currently being conducted and to own or lease and use its property and assets in the manner in which its property and assets are currently owned or leased and used.

The Seller has all necessary corporate power and authority to enter into and to perform its obligations under this Agreement. The Seller’s Board has (i) determined that this Agreement is fair to, advisable and in the best interests of the Seller and its stockholders, and (ii) approved and declared advisable this Agreement. This Agreement has been duly executed and delivered by the Seller and assuming the due authorization, execution and delivery by Schadel, constitutes the legal, valid and binding obligation of the Seller, enforceable against the Seller in accordance with its terms.

Representations and Warranties of Schadel.

Ryan Schadel represents and warrants as follows:

The Staffing Business is duly organized, validly existing and in good standing under the laws of the states in which it operates. The Staffing Business is qualified to do business in and is in good standing under the laws of each state in which it does business or holds property, other than other than any failure to be so qualified or in good standing that would not have a material adverse effect (“MAE”) on the Staffing Business to be transferred, considered collectively as a whole.

The Staffing Business is not subject to, and Schadel does not believe there is any potential for, any judgments, liens, contracts, lawsuits, potential lawsuits, claims, loans, debts, encumbrances, demands, rights, actions, causes of action, damages, losses, obligations, duties, suits, costs, expenses, matters and issues of any kind or nature whatsoever, known or unknown, contingent or absolute, suspected or unsuspected, disclosed or undisclosed, hidden or concealed, liquidated or unliquidated, matured or unmatured, accrued or unaccrued other than those specifically identified in this Agreement, and Schadel has not failed to disclose any such liabilities to Seller.

All banks account associated in any way with the Staffing Business have been identified by Ryan Schadel.

Schadel has the ability to pay the purchase price listed in Section 3 of this Agreement.

All taxes due under or with respect to the Staffing Business have been properly and timely paid when due, or funds have been set aside by Schadel for such purpose.

 
 
6. Assumption of Obligations

As of the Effective Date, and for purposes of clarity, it is explicitly agreed and acknowledged by Schadel that Labor Smart, Takeover, and each of their respective officers and directors shall have no liability for any of the liabilities associated with the Staffing Business or any other business operated by Schadel or his affiliates either prior to, or subsequent to the date of this Agreement, and Shadel shall assume all such liabilities.

 

7. Integration. As of the Effective Date, this document and any attachments hereto contain the entire understanding of the parties related to the sale of the Staffing Business to Schadel, and there are no additional oral agreements, understandings or representations relied upon by the parties.  Any modifications must be in writing and signed by all parties. As time is of the essence for this transaction, the parties recognize that addenda to this Agreement may be necessary, particularly with regard to the liabilities of the Staffing Business. The parties agree to work together to create any such addenda.

8.  Indemnity.  Seller has relied on the accuracy of information supplied by Schadel in order to enter into this Agreement.  Seller assumes no responsibility for accuracy of such information or for errors or omissions.   Schadel shall be responsible for, shall pay on a current basis, and shall indemnify, save, hold harmless, discharge and release Seller, all of its affiliates, successors and permitted assignees, and all of their respective stockholders, directors, officers, employees, agents and representatives (collectively, “Seller Indemnified Parties”) from and against any and all Liabilities arising from, based upon, related to or associated with (a) any act, omission, liability, or event involving or relating to the Staffing Business or any other business operated by Schadel or his affiliates, known or unknown, and that occur subsequent to the date of this Agreement, or that have occurred prior to the date of this Agreement; (b) the material inaccuracy of any representation or warranty of Schadel set forth in this Agreement or in any other agreement, instrument, document or certificate executed or delivered in connection with this Agreement; (c) the material breach of, or failure to, perform or satisfy, any of the covenants of Schadel set forth in this Agreement or in any other agreement, instrument, document or certificate executed or delivered in connection with this Agreement; and (d) any liability of Schadel not expressly assumed by Seller hereunder.

 

Schadel agrees to defend, indemnify and hold harmless Seller and its agents, partners, officers, directors, contractors and advisors against any damages, losses, claims, liabilities and/or lawsuits to which any of them may become subject in connection with services rendered herein, this Agreement or caused or alleged to be caused by the acts or omissions of Schadel, including payment of all reasonable attorneys’ fees and litigation expenses incurred by them arising from or in connection with any action or claim made in connection therewith, whether or not resulting in any liability. Provisions of this Section shall indefinitely survive termination or expiration of this Agreement.

 
 

It is understood that Schadel will obtain his own legal, accounting, tax, investment or securities advice in connection with this transaction.

 

9. Conflict Waiver

Schadel and Seller each acknowledge that they have been involved in Labor Smart at one time, and that they and their counsel may have had access to material information. The parties agree to waive any conflicts of interest because of their association with Labor Smart. Counsel for the parties (i.e., Mitchell Silberberg & Knupp LLP and Karish & Bjorgum PC) have not negotiated any term herein but have merely attempted to reduce to writing the agreements reached between the parties. Schadel and Seller have been advised that a conflict of interest exists between their respective interests. As a result, Schadel and Seller have been advised to consider seeking the advice of their own independent counsel. Each of Schadel and Seller hereby acknowledge that it had ample opportunity to do so, has obtained such independent advice as it deems necessary, or has elected not to seek such independent advice. Each of Schadel and Seller further acknowledge and agree that any and all claims against (i.e., Mitchell Silberberg & Knupp LLP and Karish & Bjorgum PC) regarding any possible conflict of interest with regard to this Agreement, the Exhibits and Schedules hereunder, the preparation thereof, are now and are forever irrevocably waived.

 

10. Invalid Provisions

 

If any provision of this Agreement is held to be illegal, invalid or unenforceable under present or future laws effective during the term hereof, such provision shall be fully severable; this Agreement shall be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a part hereof; and the remaining provisions of this Agreement shall remain in full force and effect and shall not be affected by the illegal, invalid or unenforceable provision or by its severance from this Agreement.

 

11. Multiple Counterparts

This Agreement may be executed in a number of identical counterparts, each of which for all purposes is to be deemed an original, and all of which constitute, collectively, one agreement. In addition, this Agreement may be executed in a number of counterparts, any one of which may contain the execution of either Schadel or Seller, and all of such counterparts taken together shall constitute one completely executed original agreement.

12. Governing Law

This Agreement shall be governed and construed in accordance with the laws of the State of California without giving effect to any principles of conflicts of laws. The validity of the various conveyances affecting title to real property shall be governed by and construed in accordance with the laws of the jurisdiction in which such property is situated. The representations and warranties contained in such conveyances and the remedies available because of a breach of such representations and warranties shall be governed by and construed in accordance with the laws of the State of California without giving effect to the principles of conflicts of laws.

 
 
13. Notices

All notices required or permitted under this Agreement shall be in writing and, (a) if by air courier, shall be deemed to have been given one Business Day after the date deposited with a recognized carrier of overnight mail, with all freight or other charges prepaid, (b) if by telecopier, shall be deemed to have been given when actually received, and (c) if mailed, shall be deemed to have been given three Business Days after the date when sent by registered or certified mail, postage prepaid, addressed as follows:

 

To Schadel:

Ryan

 

To Seller:

Takeover Industries, Inc.

c/o Eric Bjorgum

Karish & Bjorgum

119 E. Union St., Suite B

Pasadena, CA 91103

Fax: (213) 995-5010

 

14. Like-Kind Exchange

Either of Seller and Schadel may consummate (and the other Parties represent and commit that they shall reasonably cooperate with) the sale/acquisition of the Staffing Business as part of a so-called like kind exchange (the “Exchange”) pursuant to Section 1031 of the Internal Revenue Code of 1986, as amended, provided that; (i) the Closing shall not be delayed or affected by reason of the Exchange, nor shall the consummation or accomplishment of the Exchange be a condition precedent or condition subsequent to any party’s obligations under this Agreement; and (ii) no Party shall be required to acquire or hold title to any real property for purposes of consummating the other party’s Exchange; and (iii) neither Party shall incur any cost or liability in connection with the other Party’s exchange. No Party shall, by this Agreement or acquiescence to the other Party’s exchange, have its rights under this Agreement affected or diminished in any manner or be responsible for compliance with or be deemed to have warranted to the other party that any Exchange in fact complies with Section 1031 of the Internal Revenue Code of 1986, as amended.

 

 
 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered, effective as of the Effective Date.

 

Takeover Industries, Inc.   Ryan Schadel   
       
By: Toby McBride   /s/ Ryan Schadel  
Name: Toby McBride   Dated: 7/14/2021
Its: Chief Executive Officer      
       
Dated: 7/14/2021      
       
Labor Smart, Inc.      
       
/s/ Joe Pavlick      
Joe Pavlick      
Its: Chief Executive Officer      
Dated: 7/14/2021