Well, they could do a smaller r/s. Consider the deal at 1:2,500. The numbers change, by a factor or 10. But it still comes down to how they set the conversion price.
Or if they go all the way (1:25,000) just buy fewer shares.
The problem here is the conversion price. Look at CVM, a biotech company with a drug in PIII, but still a ways out from approval. They just did a deal for more money.
The stock was about 0.42 when the announcement came out. The deal was set at 0.35. Well guess where the price is today, a month after the deal was announced? It is in the 0.35 range. The deal was done at about a 17-18% discount to the the stock price.
The price drops to the deal price, but as soon as they make the next press release about their trials, it will go back up. Just watch.
The same could happen here to.
But if they get greedy here and set the conversion too low, this will get killed.
They have a chance to get this right, let's just see what they do.