Vanguard Energy seals $5.18 million private placement of convertibles

Company sells three-year 15% promissory notes to fund drilling program

By Devika Patel

Knoxville, Tenn., Sept. 5 - Vanguard Energy Corp. settled a $5.18 million private placement of 15% convertible secured promissory notes on June 29, July 6, July 31 and Sept. 5, according to an 8-K filed Wednesday with the Securities and Exchange Commission. Of the proceeds, $2.1 million was paid in cash and $3.08 million was exchanged for notes the company sold in 2010.

The notes are due June 30, 2015 and are initially convertible into common stock at $1.25 per share. The conversion price is a 43.68% premium to $0.87, the June 28 closing share price.

Northland Capital Markets, MLV & Co. and GVC Capital LLC were the agents.

Proceeds will be used for an accelerated developmental drilling program in southeast Texas and to pay off any 2010 convertible notes that remain outstanding at maturity on Oct. 31.

Vanguard is a Houston-based oil and gas company.

Issuer:	Vanguard Energy Corp.
Issue:	Convertible secured promissory notes
Amount:	$5,179,500 ($2,104,500 in cash, $3,075,000 in exchange for 2010 notes)
Maturity:	June 30, 2015
Coupon:	15%
Conversion price:	$1.25
Conversion premium:	43.68%
Warrants:	No
Agents:	Northland Capital Markets, MLV & Co. and GVC Capital LLC
Settlement dates:	June 29, July 6, July 31, Sept. 5
Stock symbol:	OTCBB: VNGE
Stock price:	$0.87 at close June 28
Market capitalization:	$12.08 million

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