Because ultimately he can own common stock. If an insider acquires an option, or a derivative security that is convertible into common stock, it must be reported.
They actually converted their near worthless preferred shares to common shares at a rate of .98 per common share in preferred shares' face value. The preferred shares' actual value was much less than the face value, given the company's situation. They probably sold those common shares into the buying frenzy the last couple of days to recoup much more than they would have under the old deal.
This whole transaction was part of the new deal, as the new deal eliminates all the preferred shares.
They obviously didn't really pay .98 a share in cash for those common shares on 11/5, when they were trading in the market at .014.
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