Nano Labs Corp announced a private placement of a convertible note for gross proceeds of $27,500 with new investor Black Mountain Equities, Inc. on January 8, 2015. The note is issued at an original discount of $2,500. The note carries a fixed coupon rate of 10% per annum and mature two years from the date of issuance.

The principal amount of note and accrued interest may be converted at any time on or after the date of issuance at a conversion price equal to the lesser of $0.02 or 60% of the lowest trade occuring during the ten consecutive trading days immediately preceding the conversion date. If the company fails to issue and deliver common stock which the investor is entitled upon conversion, the original principal amount of the convertible note shall increase by $500 per day until the company issues and delivers a certificate to or credits the account of the investor for the number of shares of common stock or if the company fails to deliver the shares of common stock per conversion and if the investor incurs a market price loss, then at any time subsequent to incurring the loss, the investor may provide the company written notice indicating the amounts payable to the investor in respect of the market price loss and the company must make whole by either paying such loss in cash or adding to the principal amount then due and owing or in the event conversion shares are not delivered via DWAC, an additional 10% discount to the conversion price shall apply, or in the event the company fails to maintain its DTC eligibility or if the conversion price is less than $0.01, the principal amount of the convertible note shall increase by $10,000 and the conversion price shall be redefined to equal the lesser of $0.01 or 50% of the lowest trade occuring during the 25 consecutive trading days immediately preceding the conversion or no conversions shall be effected if such conversion results in the investor's holding in excess 4.99% of the total number of shares of common stock issued and outstanding, or at any time within ninety days immediately following the issuance of the note, the company shall have the option upon ten business day notice to the investor, to pre-pay the entire remaining outstanding principal amount in cash provided that the company shall pay the investor 145 of the outstanding balance and such amount must be paid in cash on the next business day.