Gorb. It's common for startup public companies to use the stock to raise funds. I'm aware of this.
The problem is that the more the company utilizes this method to raise funds, it increases the likilhood of two things.
Decrease in the PPS
The chance of a R/S
At some point in time the share structure MUST be dealt with. Either through buyback and retire or R/S. The higher the O/S goes, the less likely Dan can come up with enough money to buy back the necessary amount of shares.
In addition, the higher the O/S the tougher for Dan to realize his NEEDED goal of increasing the PPS. We can't get into the pennies with this kind of O/S. The tradable MUST be reduced to have any chance of hitting the pennies.