Quest Patent Research Corp (QPRC)

[StockMedic1]

Thats just how convertible notes are written. It is couched as a loan, because there is a promissory note, but it is also a stock purchase so the note holder gets tack-back provisions and will have "AGED" stock at the time of conversion. That how it works on the OTC. So the company has reserve share requirements in their documents in order to have enough supply of stock available when those notes convert. Usually 5 - 7 times, depending on the greed of the note holder. And when they do convert, especially that much, even assuming they stay under the 4.99%, , it will be lights out for an underperforming company.

And just so you know - its called Death Spiral Funding. Picture a fighter jet that lost its only engine. In this case, the holder converts up to 4.99% of the outstanding FLOAT. Not A/S. This way they do not have to report sales. They convert at a discount to market, say 35%. So the stock is trading at a dollar, they get 4.99% of the outstanding shares at .65 cents then WHAM! Sell out those shares, slamming down the stock price to say .50 a share. Then they convert another amount equal to 4.99% of the NEW FLOAT, which includes the shares they just sold - actually giving them even MORE shares than before at a 35% discount to .50 cents. Say now .30. Then Wham!!!! Slam down the market by selling even more. Now down to .30 a share, and they repeat until they are out. Its just how it works so BEWARE.