4. NOTE PAYABLE TO CELLULAR CONNECTIONS LTD.
The $76,333 advance from Cellular Connection, Ltd. was a result of a convertible secured promissory note with a face amount of $120,000 issued to Cellular Connection Ltd. on January 20, 2009 which include one year of interest totaling $20,000 and actual loan amount totaling $100,000. The convertible secured promissory note accrues interest at a rate of 20% per year and has a maturity date of January 19, 2010. The outstanding face amount of the convertible secured promissory note shall increase by 20% on January 19, 2011, by another 20% on January 19, 2012 and again on each one year anniversary of January 19, 2012 until it has been paid in full. The note entitles the note holder to convert the note, plus accrued interest, anytime prior to the maturity date, at 75% of the average of the lowest closing bid price during the fifteen (15) trading days immediately preceding the conversion date.
The note has been accounted for as an original issue discount note due to the conversion feature. The discount totaling $40,000 shall be accreted over the life of the note for a total accreted value of $160,000.
Furthermore, the $20,000 interest which has been included as part of the overall face amount of the note shall also be accreted over a one year period. As of January 31, 2009, the total accretion of both discount and interest totaled $2,500. The remaining portion of the note not advanced totaling $23,667 was received by the Company in February 2009.
Pursuant to the terms of the convertible secured promissory note, Cellular Connection Ltd. may elect to secure a portion of our assets not to exceed 200% of the face amount of the note, including, but not limited to, accounts receivable, cash, marketable securities, equipment, building, land or inventory.
During the period between December 29, 2008 and January 9, 2009, Metro One Development, Inc. converted $195,000 in interest accrued under a promissory note into an aggregate of 26,000,000 shares of our common stock, all at a conversion price of $0.0075 per share.
"They" are not putting money into this business, the shareholders are. "They" have payed for every action they have taken with shares. The company is paying a minimum of 20%.
I give you cash, you pay me back in shares at a minimum 20% premium which I then sell into the market. I guess I would have to pay short term gain on that but 20% is still pretty good. Plus they are receiving the shares at a 25% discount, cheaper than you will ever see.
I stick by my cash register theory
