United American Petroleum Corp. (OTCBB:UAPC) announced a private placement of promissory note for gross proceeds of $360,000 on January 31, 2013. The note will be issued to new investor, JMJ Financial Group Inc. The company will issue the note in the principal amount of $400,000 at 10% original issue discount. The transaction will take place in tranches. The note has a maturity of 12 months from January 31, 2013 and will bear 0% interest if it is repaid within 90 days from January 31, 2013 after which, a one-time 12% interest rate will be applicable. The notes carry default interest rate of 18% per annum. The investor has the rights to convert all or part of the outstanding and unpaid principal sum and accrued interest due under the note into common shares at a conversion price equal to the lesser of $0.11 per share or 60% of the lowest trading price of the common shares in the 25 days prior to any conversion. The company will issue securities pursuant to exemption provided under Regulation D. The investor will not hold more than 4.99% stake in the company upon conversion.

On February 13, 2013, the company received $50,000 in its first tranche.