Do I have this right? The preferred shares should capitalize the company for 1-2 years? Would that not mean the company would no longer need to dilute the common shares?

I think it would depend on who bought the shares. If Warren buffet bought them I would feel pretty good about it. If mrib_god bought in and got in and micro managed them well....maybe not so much.

I think they are doing this because they are being pinched cash flow wise right now. They don't get much for their dilution on common shares at sub penny levels. Five million shares at .008 is forty thousand dollars.