It does look like in the sb-2 after doing a little more reading that there is another possibility for dilution to occur (not likely though if Rufus is buying up shares), but after a certain date in nov 2008, it can happen (I won't post the rest). I guessing people will have to do a lot more DD on this company before making up their minds...:
The notes bear interest at 8%, mature three years from the date of issuance, and are convertible into our common stock, at the investors’ option, at 55% of the average of the three lowest intraday trading prices for the common stock on a principal market for the 20 trading days before but not including the conversion date.
We have a call option under the terms of the secured convertible notes. The call option provides us with the right to prepay all of the outstanding secured convertible notes at any time, provided we are not in default and our stock is trading at or below $.20 per share. Prepayment of the notes is to be made in cash equal to either (i) 125% of the outstanding principal and accrued interest for prepayments occurring within 30 days following the issue date of the secured convertible notes; (ii) 135% of the outstanding principal and accrued interest for prepayments occurring between 31 and 60 days following the issue date of the secured convertible notes; and (iii) 145% of the outstanding principal and accrued interest for prepayments occurring after the 60th day following the issue date of the secured convertible notes.