FONU2 Inc. (OTCPK:FONU) announced that it has entered into a material definitive agreement for the private placement of a convertible note for gross proceeds of $28,125 on October 28, 2015. The transaction included participation from returning investor SBI Investments LLC, a fund managed by Sea Otter Global Ventures. The convertible note carries fixed 8% interest per annum payable quarterly on January 28, 2016, April 28, 2016, July 28, 2016 and the balance on maturity date October 27, 2016.

The convertible note will mature on October 27, 2016. The convertible note is convertible after 180 days at a 45% discount to the lowest trading price of 20 days prior to conversion date. The interest rate will be fixed 22% per annum in case of default.

The convertible note is secured by the pledge by Joel Jake Shapiro, Chairman of the company, of 6,250 shares of the company's series B convertible preferred stock owned by Joel Jake Shapiro. The company issued convertible note on discount of 9%.