It's all in the conversion feature. A conversion at a continual discount to the market is a disaster as participants will continue to sell, exercise, cover.....sell, exercise, cover...until every pfd has been converted.
You are correct about the "pecking order" of these pfds, too. They're secondary to debt holders and creditors. Since we have no debt, these shs have a claim on any exisitng assets after Wave's accounts payable are paid. WavExpress and Signonline should be worth millions so it shouldn't be hard to cover $757,000.