I checked all the filings back to the beginning of PTSC and found the following:
The resolution for the preferred shares was concluded in June 1997:

"Effective June 19, 1997, by means of an Action By Written Consent of the Shareholders of the Company the following matter was voted upon:

1. The shareholders approved an increase in the authorized shares of capital stock to 65,000,000 shares of which 5,000,000 shares were designated Preferred Stock, par value $.00001, and 60,000,000 shares were designated as Common Stock, par $.00001. "

Of course I don't know why they mention it now in the risk section, maybe my inquiry to the company will be answered.