The principal and interest is convertible into shares of common stock at the discretion of the note holder at a price equal to fifty-eight percent (58%) of the average of the three lowest reported sales prices of the Company’s common stock for the ten (10) trading days prior to the conversion date.
The keys here are: 1) 58% 2) of 3) prices
Don't mistake #2 with "off". I can't make it any clearer.