Ejag, there are two commonly used ways Pinks dilute:
1. Debt wrap: Essentially taking an "aged" debt, one that is more than 12 months old and converting into free trading shares. Discounts can range from 25-90%, depending on funder and company desperation. So, a worse case is that if someone is owed $100, and they get a 90% discount, they can get $900 of free trading stock for eliminating the $100 debt.
2. Funding companies: (e.g. Asher, Southridge, Iron Ridge). They get restricted shares, with a hold of 12 months. The current methodology is to convert at a 50% discount of the lowest 10 day bid price prior to the date of the conversion. There is also a funding fee at inception of the deal, size of which depends of the amount of funding.