FONU2 Inc. (OTCPK:FONU) announced a private placement of a 8% convertible promissory note with a principal amount of $78,500 with existing investor, Asher Enterprises, Inc. for gross proceeds of $78,500 on January 24, 2014. The note bears interest at a rate of 8% per annum with default rate of interest of 22% per annum. The note will mature on October 8, 2014. The note will become convertible 180 days following the issuance date at a conversion price equal to 58% of the average of the lowest three trading prices for the common stock during the 10-trading day period ending on the trading day before the investor delivers its conversion notice to the company. The investor will not own more than 4.99% stake in the company upon conversion. Branden T. Burningham of Burningham & Burningham will act as legal advisor to the company. Naidich Wurman Birnbaum & Maday LLP will act as legal advisor to the investor. The company will reimburse the investor for expenses to incurred by it in connection with the negotiation, preparation, execution, delivery and performance of this agreement and the other agreements to be executed up to a maximum of $3,500. The company issued securities pursuant to exemption provided under Regulation D.

On January 24, 2014, FONU2 Inc. closed the transaction.