I did not see where the 8K stated where or how the funds would be spent. I would expect the funds to go toward operations and not payments to directors and board members.
My view of the deal is as follows (some one else can check my math):
For each $7 in cash from the Investor, the Investor receives 1 Series C share and an option/warrant to get 1000 shares of common stock for $15 in cash, $0.015 per share exercise price. The option/warrant can be exercised anytime during the next three years from the warrant issue date.
After 6 months the 1 share of Series C may be converted into 1000 shares of common at the option of the holder (i.e. I did not see a mandatory conversion feature on the warrant or the preferred.)
Effectively, the Investor can get 2000 shares common for $22 that translates to $0.011 price per share. So if the stock price rises above the $0.011 effective price then the Investor makes money. I might add that the effective price of the Series C following conversion is $0.007 per share.
The closing price today was $0.008.
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