Ted...
I agree just a little but there's a couple major problems with your logic.
If the purpose of the share structure is to provide an end run around any share count, then you are basically saying they have no intention but to dilute more common.
If that is the case, they would be selling shares to buy, buy, and buy some more companies. But with each conversion to Preferred II share, a quarterly dividend is now due. This would be self defeating for two reasons:
First, to future acquisitions unless they pay cash for future acquisitions (what company would want shares in exchange for their company from a company that is increasingly dilutive?).
Second, because of the cash flow problem it would create. What you are claiming is a modest possibility in the short term but could not in realty go on to the extent you claim. Why? Because of liquidity, plain and simple. If they are selling shares to raise cash because the entire company is a scam, eventually most of that cash would have to go into quarterly dividends for the Preferred IIs. What would be the point for the company then?
Also, the preferred conversion is currently for a limited time though it could be extended again. But it could not be extended indefinitely. If it was, it would be a red flag to those looking to exchange to preferred.
Also, how do you know for certain that the shares converted into Preferred IIs are not retired? Oh right, forgot, we don't know much of anything...
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