American Power Group Corporation (OTCPK:APGI) announced a private placement of subordinated contingent convertible promissory notes for gross proceeds of $3,000,000 on January 27, 2017. The company has entered into Purchase Agreement with accredited investors including existing investors Arrow, LLC and Associated Private Equity, LLC. The company’s chairman and chief financial officer also converted certain amounts due to them into notes. The notes carry a fixed coupon of 10% per annum and would mature on July 27, 2017. The notes are convertible into series E 12.5% convertible preferred stock of the company at a conversion price of $100,000 per share. Each share of series E convertible preferred stock will be convertible to our common stock at a conversion price of $0.10 per share. The transaction is expected to close on or by July 27, 2017. The company will issue securities pursuant to regulation D. The notes issued are secured. On same date, the company has received $2,605,000 in funding in its first tranche.