An Open Letter to Members, Investors, and Potential Investors of ProtoGroup, LLC and to anyone dealing with Mr. Christos Fotiadis:

Let me begin by stating that I am a former Board Member of ProtoGroup LLC. My goal in writing this is to inform all those involved with ProtoGroup LLC, and/or Christos Fotiadis, of the severe financial condition of the company and of breaches of fiduciary duty and possible crimes committed by ProtoGroup’s founder and CEO, Mr. Fotiadis. ProtoGroup LLC, its agent and offices are located at 2043 West Belmont Street, Suite 4, Chicago, IL 60618.

If you are an investor, member, vendor with outstanding invoices, someone who has provided services in exchange for ownership, are considering making an investment in ProtoGroup, are considering making introductions to potential investors for Mr. Fotiadis, or loaning Mr. Fotiadis money, then you should consider the information in this message prior to making such an investment.

As a former member of the Board of Directors of ProtoGroup, I was appointed by Mr. Fotiadis to help grow the company and to represent the interests of all the stakeholders in ProtoGroup in 2009. One of my duties as a board member was to ensure that the LLC membership is kept abreast of material developments affecting the company and their investment. For more than a year, the Board of Directors demanded that a letter be sent to the LLC members advising them of the severe technical problems with the company’s assets as well as the financial and legal liabilities facing the company and Mr. Fotiadis personally. When Mr. Fotiadis (the CEO) refused to comply with this request, the Board requested contact information for all the membership so we could contact the members directly. CEO Fotiadis refused to provide member contact information to multiple members, not just the BoD. Thus this is our last effort to try to contact the membership to describe the present status of the company and your investment.

In addition to refusing to provide member contact information, Mr. Fotiadis obstructed the BoD from performing its duties by refusingd to provide numerous documents and data that the Board requested, and in fact, had a duty to review pursuant to its role as representatives of the membership. The list of documents Fotiadis refused to provide includes but is not limited to financial statements, contracts, sales records, legal actions threatened or filed against the company, tax returns, emails and the disclosure of any other material information that would have a direct impact on the company. It has come to my attention that several members who have knowledge of the deteriorated status of the company also requested similar information and all were refused access by Mr. Fotiadis. It is important for you to know that Mr. Fotiadis’ failure to supply the requested information to the Board and Members is, in and of itself, a breach the company’s Operating Agreement, and of Federal and State Securities Laws requiring full disclosure to owners of material information regarding such matters.

The former General Counsel and VP of ProtoGroup, Jason Lechter, had also received numerous requests from the Board of Directors for this same information. Like Mr. Fotiadis, Mr. Lechter also refused to provide any of the requested documents or Member contact information to the Board of Directors or to other members, citing that he would only provide information that the CEO authorized him to provide. Given Mr. Lechter’s position as General Counsel, his refusal to recognize the authority of the board of directors over the CEO has raised suspicions as to the degree of his involvement in the matters detailed in this letter.

Unfortunately, the problems with ProtoGroup and with Mr. Fotiadis do not stop here. The company’s one and only asset, a software tool called ReGen, is incomplete, not functionally valuable to customers, is precluded from being sold due to unpaid invoices and Mr. Fotiadis’ failure to obtain proper licensing for third-party (integrated) software, and more. These problems were presented to Mr. Fotiadis in numerous Board meetings and in memos and were ignored.
As an entity, ProtoGroup is currently insolvent and has serious pending legal actions and debt collections that could drive the company into bankruptcy. It is my opinion that, based on the amount of money ProtoGroup raised, the revenues it likely generated, and the minimal amount of money it actually spent on building its business, that it should be anywhere close to being insolvent. In fact, I believe the company should be flush with cash but is instead flush with debt. I will detail below some of my views as to how ProtoGroup likely reached its current state:

Embezzlement

My best estimate indicates that there as much as 80% of the money invested in ProtoGroup remains unaccounted for. I have been unable to determine how the vast majority of the company’s funds were spent and Mr. Fotiadis has refused to answer any and all formal requests for documents, spreadsheets, bank statements, financial statements and/or tax returns that would explain the dire financial condition of the company. What is clear is that more than $1, 100, 000 was raised from investors or generated in revenues by the company. In the 18 months since the Board began making inquiries, Mr. Fotiadis has provided nothing to dispute the fact that as much as 80% of the money that flowed through ProtoGroup was spent on non-company matters or on personal (non-company related) expenses claimed by Mr. Fotiadis or on extravagant travel, accommodates and amenities solely to Mr. Fotiadis’ benefit.

In fact I believe it likely that Mr. Fotiadis used the missing ProtoGroup money to pay his mortgage, utilities, living expenses, fly around the world first-class and stay in lavish hotels in places like Japan, China, and Greece to name a few without ever completing the development of the company’s software and without securing enough sales to sustain the business. On top of this, Fotiadis lists himself as the single biggest debtor to the company, claiming back salary due to him of more than $780, 000 and back rent (for what it is unclear).. As a result of Fotiadis’ refusal to provide any evidence to refute these claims, I have every reason to believe that the company’s funds were misused and misappropriated by Mr. Fotiadis, making him guilty of embezzlement of corporate funds. I have been left with no choice but to reported him to a number of civil and criminal authorities and to my knowledge there is at least one formal investigation against him is underway and other authorities have contacted me and told me that they are “processing” the claims and considering investigations of their own.

Investor Fraud, Stock Fraud and More

Mr. Fotiadis and ProtoGroup already have several lawsuit judgments that have been won and are being pursued for payment. There are also likely to be more actions filed in both Federal and State courts around the country. I know this because the first few judgments were mine. Two of the judgments I obtained were for fraud and were handed down to ProtoGroup and to Mr. Fotiadis personally by a court in Virginia where ProtoGroup asked me to set up offices for the company during my tenure there in 2009. In spite of the fact that these debts are currently “first in line to be paid by both parties”, I am strongly recommending that no one invest in ProtoGroup before doing extensive due diligence and speaking with me, the other investors that I have been able to contact, and/or with State and Federal Authorities before doing so. Contact information for these authorities and for the few members of ProtoGroup that I am in contact with will be made available to you upon request.

Those familiar with the law will understand just how rare and difficult it is to prove and obtain a fraud judgment through an actual trial where there is testimony from both parties. Fraud charges are regularly dismissed as “your word against mine” claims and thus carry a high-burden of proof. In Mr. Fotiadis’ case, the charges were not dismissed and my claims were upheld against both ProtoGroup and against Mr. Fotiadis personally. You should recognize that it requires an overwhelming amount of evidence and testimony to obtain a fraud judgment. A transcript of my trial is available for anyone seeking it – it is public information and I will be happy to provide it.

Also available are copies of other lawsuits filed against Fotiadis and ProtoGroup, which are also a matter of public record. My judgments will, in my opinion, be the first of many investor fraud judgments that will befall the company and Mr. Fotiadis personally. With the possibility of up to $1 million in fraud judgments potentially facing ProtoGroup, any investor that puts new money into the company will likely find that it quickly went out the back door in payment of an existing judgment against the company. Mr. Fotiadis routinely omits and misrepresents material information before and after money is invested, essentially telling any investor what he believes at that time will cause that investor to write a check with a total disregard for the truth or the law.

Members should specifically note that Mr. Fotiadis was given multiple opportunities over the last year and a half to address the problems facing the company and himself personally. He has simply chosen not to because he knows that facing his accusers and disclosing the information they have been requesting will bring his actions to the light of day and result in a complete shutdown of ProtoGroup and destroy his only source of income. This ending is inevitable given the circumstances.

I suspect that Mr. Fotiadis is praying that by keeping the members and investors “in the dark”, that they all will simply write off their losses and go away. This appears to have been his mode of operation for the first 4 years of the company’s existence. Mr. Fotiadis has gone to great lengths to find money to pay his personal debts and mounting legal bills, even going so far as to creating an “anonymous charity website” and forwarding the link to that site and requesting donations via email from his former colleagues, friends, family and strangers. As he has done on numerous occasions, Mr. Fotiadis made these requests for money without fully disclosing all of the material information required regarding how the money he was very willing to take would be spent.

I felt it to be my duty to all Members in ProtoGroup to pursue my personal claims and to notify everyone of this horrible situation. The reality is that allowing Mr. Fotiadis to start over without any accountability for the money he squandered, the bills he accumulated, or the money he embezzled might encourage him to defraud and harm even more innocent people.

Regarding the company’s intellectual property, there is another matter that all Members should be aware of. Anyone who invested in ProtoGroup prior to 2009 (when I signed on with the company) invested in a company that was structured simply as a “shell” and that ProtoGroup itself had no ownership in the software assets being built with the money invested. In other words, investors who may have thought they were investing in the ownership of ReGen, which is ProtoGroup’s only asset, were not doing that at all. When I tried to validate ownership of the actual asset before signing my agreement, Mr. Fotiadis explained to me that he personally retained ownership of ReGen and that ProtoGroup was subject to a license agreement with him. This situation, in hindsight, is particularly disturbing because I fear that had Mr. Fotiadis succeeded in building a valuable product - which he did not - then an “exit” for the company would have been at the mercy of Mr. Fotiadis. ProtoGroup would likely have had no say in such an exit and Mr. Fotiadis would have been the only “seller”. Mr. Fotiadis would have had no obligation to pay his original investors anything back even if the company was wildly successful.

I mention this because as part of my agreement with Mr. Fotiadis, I demanded that the rights to the software belong solely with ProtoGroup and not with him personally. While he agreed to do so and provided me with a document of the transfer of the asset that is ReGen, as the majority shareholder in ProtoGroup, he could easily rescind such an agreement and leave all of the current members with nothing of value. Should Mr. Fotiadis transfer the ownership of the company’s software assets back to himself personally, he could leave the owners and investors holding nothing but an empty shell of a company that has debt and law suits pending.

Additional actions are being pursued against both ProtoGroup and Mr. Fotiadis personally as I write this letter and they will undoubtedly have an impact upon your ownership and investments. That is why I feel compelled to post this message. It is my personal goal to provide a way for all those who feel they have claims to obtain as much information as possible regarding these matters – to get it. And I urge that if you know of other investors or vendors who may not be aware of these issues, and/or who are owed money by ProtoGroup or by Mr. Fotiadis personally, that you share this letter with them.

You should also be aware that several of the other owners/investors have reported Mr. Fotiadis and ProtoGroup to State and Federal Authorities as well because we believe that the evidence supports criminal charges as well as civil actions. We are encouraging everyone who has evidence of Mr. Fotiadis’ personal or professional misdeeds to provide it to the appropriate authorities evertying available to support their investigations.

If Mr. Fotiadis is as innocent as he claims, then he should be willing to respond to this letter publically and to immediately provide every member with the information requested herein. The law compels Mr. Fotiadis in his role as CEO to provide every member with this information. Mr. Fotiadis is accountableto all of the other Members of ProtoGroup and must provide explanations regarding his misuse of corporate funds, his decisions that resulted in the creation of a valueless and unsellable product, and his personal actions and inactions that led to fraud judgments, additional pending litigation and the company’s insolvency.

As stated, additional actions are being taken and there is information that you, as a Member in ProtoGroup, LLC, should have if you wish to either join in those actions with fellow Members or start your own action in an effort to seek some form of restitution.

Please feel free to contact me via the email address below. To support you, I have prepared a document outlining the summary of crimes that I believe Mr. Fotiadis and ProtoGroup are guilty of and a body of evidence to support the facts. I will be gladly share that information with all those who can prove that they are owners, members, and/or debtors of ProtoGroup LLC.

I regret having to inform you of this situation using a public forum but Mr. Fotiadis really left me no other choice. And I regret that I was unable to do more to inform and support you.

Respectfully Yours
[email protected]