The preferred shares are not new. The shares converted from the note will be new shares. Since the shares will be sold to retail before being converted, there's no "change of control" unless one entity buys 51% of the O/S.
Most likely many retail buyers will end up with a small number of shares. Investors who could afford to take control of the company don't usually like to buy from toxic lenders as they know they'll lose out.
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