Pinky stock scam CEOs like Kennay the Diluter can and do manufacture shares at almost no cost to themselves and sell them to anybody who can be persuaded to buy them, all the way down into the triple zeros. That, IMO, is what has happened to KATX, just as has happened to hundreds, if not thousands, of penny-stock scams just like it.
Pinky stock scam CEOs like Kennay the Diluter NEVER have to cover.