Why sell ALL of it?? Seems to me that 200k shares @ .08 cost him $16k. As of last year, only $3500 worth of capital loss could be applied toward your owed tax in any given tax year. To meet that maximum loss applicable of $3500, he would only have to sell 50k shares @ .01/share. 50k shares @ .08/share would equal $4000, and @ .01/share would equal $500, for a capital loss of $3500. Selling any more would be useless toward his 2018 taxes owed and he has to wait 30 days to buy those shares back or have it deemed a wash sale meaning he forfeits his capital loss write off. He may be the one throwing the bricks at you, cause he'll only get $2k for his shares @ .01, but even if the pps only goes to .04 inside of that 30 day waiting period, he'll have to come up with another $6k cash somewhere to get back his shares. Time will tell.