A convertible note is a just a normal loan until it is exercised by the noteholder (First Samuel - FS). If TPS redeems the notes early (and FS does not elected to convert the notes) they have to pay in cash, paying $.167 cash per note + interest. Only FS can elect to convert the notes into shares, not TPS. The premiums does not apply when the notes are converted, only when TPS redeems the notes for cash e.g. paying off the loan.
