dilution of shares

Just a query guys , what impact will 2.9 billion shares being issued for purchase of Bandanna have on share price, considering current shares on issue stands at approx 177million . By my calculations at say 20c per share and market cap at any point in time being constant ,
say 20c x 175m shares , = $35 000 000 market cap .
Now add in 2.9 billion shares
$35 000 000 market cap divided by 3,075,000,000 , shares(after purchase) equals $0.011 per share. That is a massive dilution.
Am I missing something?