Wellstar convertible promissory noteholder agrees to limit conversion

By Jennifer Chiou

New York, Oct. 9 - Wellstar International, Inc. announced that JMJ Financial agreed to limit its ability to convert the $575,000 convertible promissory note issued to it on May 22.

Further, on Aug. 19, Wellstar issued another convertible promissory note to JMJ that amounted to $1.15 million, according to an 8-K filing with the Securities and Exchange Commission.

The three-year notes issued to JMJ bear interest at 12%. They are convertible into Wellstar common stock, at JMJ's option, at a conversion price equal to 30% of the lowest trade price for Wellstar's common stock during the 20 trading days prior to the conversion.

As of Wednesday, the lowest trading price for Wellstar's common stock during the 20 trading days was $0.0001 and, therefore, the conversion price for the notes issued to JMJ was $0.00007.

Based on this conversion price, the $1,725,000 of notes issued to JMJ is convertible into 24.6 billion shares of Wellstar common stock.

As a result, JMJ has agreed to restrict its ability to convert the notes so that it will not hold more than 4.99% of Wellstar's outstanding common stock.

In consideration for the notes, JMJ first issued Wellstar a $500,000 secured and collateralized promissory note and followed with a $1 million promissory note to Wellstar. These bear interest at 13.8% per year and mature in three years.

Prior to any conversion, JMJ must pay to Wellstar the amount it is owed under the notes issued to Wellstar.

Based in Holland, Ohio, Wellstar is a provider of specialized diagnostic software and equipment.

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