No that is not what it means, look at it this way. The warrants were just the option to purchase shares around .005 that were a bonus attached to the debt, so they were basically free money
So $265k in debt and 194M shares
At .04 those 194M shares were worth $6.8M + the $265k debt for a total value of just over $7M
Now they get 221k preferred shares protected from a split that = 221M common shares