I don't think this is about dilution of the stock at all. My thoughts go back many years when XSUNX was developing various new products, ie. solar cells in windows, making solar chips with a new, inexpensive production technique, etc. At that time, the company was concerned about being acquired by another company and losing its controlling powers. So, XSUNX voted to make available this huge number of shares that they could buy, if necessary, to keep control. This situation never materialized (as the products never made it to the commercial market) so most of these shares have NOT been issued, but are still available and on the books.
That's my recollection. If others know different, please respond.