Beamz Interactive, Inc. (OTCBB:BZIC) announced that it has entered into convertible debt and security agreement for a private placement of convertible secured subordinated promissory notes for gross proceeds of $371,192 on May 1, 2013. The notes will bear a fixed interest rate of 10% and will be convertible into common shares of the company at $0.40 per share on the earlier of December 31, 2014 or completion of a $2,000,000 financing by the company. The company issued $1,017,664.53 in principal amount of notes to TM 07 Investments, LLC, an entity controlled by Charles R. Mollo, Chief Executive Officer and Janice L. Mollo, to retire accounts payable of $996,472.07 and receive $21,192.46 in cash.

The company will also issue warrants to the investor to purchase 658,832 shares in this tranche. The warrants will be exercisable at $0.02 per share for a period of three years.