Yep, the last thing they want to spent money on is produciton of actual product. Trading .0001 paper or convertible preferreds for toxic financing cash is much more lucrative and all you do is sit back and watch the cash money roll in while stuckholders get some soon to be worthless paper.
Some people, not real shareholders, but some posters, are really concerned about the share count. When the POs are announced REAL SHAREHOLDERS won't care about how many shares are O/S because they will ALL move up in price (ALONG WITH THE PRICE OF THE 'SHORTED SHARES')