suissac, Chan may make very little. He takes a loan out for $500,000 that will be redirected to himself as income or bonus from a 3rd company debt holder that is owed by the debt lenders.
The loan is not paid in one lump sum or in advance, it’s a loan on paper that he is owed the money and it is only paid after the debt holders exercise the right to take shares after to they pay off debt and sell more shares to the diluted float.
The debt diluters will pay for instance $10,000 of debt for 100,000,000 shares at $.0001 and because the shares have dropped so low they have to sell more to make more money. If they dump the 100,000,000 for $.0003 the diluters are making only $20,000 profit which means they will only pay Jimmy $5,000 or less for those 100,000,000 making the purchase price only $00005 per share. So the sellers can sell them for any amount over that to make a profit while still keeping the price down so no one else can sell except at a loss.
That is a far cry from when they sold 200,000,000 for $.15 for $30,000,000. The next phase is to just dump as many as possible for $.0003 maybe another 500,000,000 is still only $100,000 profit after paying Jimmy $50,000 but I am sure he will get much less as the stock drops they price to buy goes down for more (Death Spiral)
If you think Jimmy is getting $500,000 at a conversion of $.0001 that would be another 5,000,000,000 shares issued to the diluted float. SGMD has 20 billion authorized and 12 billion issued so there is 8 billion available to add to the diluted float. That is what the loan will cause to have happen.
A rule of thumb is that any well-run company should have a ratio of 20% or less in the float of the issued. SGMD has 12 billion issued and 9.5 billion at the DTC that is about 80% of the issued in the float. That is BAD, very very bad!
The $500,000,000 will be paid to Jimmy over time as he issues shares to have the loan debt paid off. Well soon see 100,000,000 trade each day till the 5 billion is all sold.
Jimmy may not even get the whole $500,000 and maybe only $100,000 as the stock tanks the debt financiers will pay less per share and get more shares depleting the authorized. They may add more to the authorized as long as suckers are buying this but I anticipate a 1 for 10,000 RS.
As long as people keep buying these stocks, nothing will change except the additional curse words from investors towards the CEO.
