Boston Carriers Inc. (fka BSTN)

[Huggy Bear]

That's a deep discount, and it is drawn off the lowest of VWAP in the 10 prior days before the conversion request. Therefore the actual conversion discount is likely to be higher than 25 percent. Conversions are limited to five percent of OS at a clip, so I expect to see a slow bleed here.

The Exchange Note is convertible, at the option of the holder, into shares of the Company’s common stock, par value $0.0001 per share, at a per share price equal to the result of dividing such principal and accrued and unpaid interest thereon by the lesser of: (i) the lowest VWAP of the Common Stock, discounted at a rate of 25%, for the ten trading days prior to but not including the date upon which the Holder delivers the Notice of Conversion, and (ii) $0.03 per share, subject to adjustment as provided in the Exchange Note, and subject to a total beneficial ownership limitation of 4.99% of the Company’s issued and outstanding common stock. The Exchange Note bears interest at the rate of 15% per year. The Exchange Note has a maturity date (the “Maturity Date”) that is one year from the Closing Date. The Maturity Date may be accelerated, at the option of the holder, upon the occurrence of an Event of Default (as defined in the Exchange Note). After the occurrence of any Event of Default that has not been cured that results in the eventual acceleration of the Exchange Note, the interest rate shall accrue at an additional interest rate equal to the lesser of 2% per month (24% per year) or the maximum rate permitted under applicable law.