ProTek Capital Inc (PRPM)

[Kool Aid Man]

Question about new restricted shares answered--

I posed the question to an expert. Here's their answer--

Toxic lenders want them. They get convertible notes at a big discount to market. As much as 50 percent. And the discount doesn't get applied till they convert. So even though they can't convert for a year (unless they find a way to cheat), they'll get tons and tons of stock at that time. The 2.5 billion is only a guess. The exact figure won't be known till conversion, which will happen in tranches, with the stock price sinking further as they convert and sell.

In other words "death spiral financing." Eddie has sold these shares and pocketed the cash. Once the restrictions expire the toxic lender(s) will present their contract to the Transfer Agent and legally compel them to issue tranches of shares --typically just under 10% of the debt they're owed. These shares are dumped on the market thereby driving the price lower. At that point the lender orders the company to issue more shares in order to "true up" the remaining debt they're owed.. even if it means compelling the company to authorize many billions of additional shares. The process repeats and destroys retail investors as it does. It's all perfectly legal.

PRPM disclosed "Total shares of Class C/ D/ E preferred: >0< as of date: 04/30/21" despite there being none authorized with the Wyoming SOS.

IMO if Eddie has indeed sold those shares to toxic lenders then this ticker and its subsidiary are screwed.