Baron Energy, Inc. (OTCPK:BROE) announced a private placement of convertible promissory notes on December 8, 2011. On February 2, 2012, Baron Energy, Inc. closed the transaction. The company issued three convertible promissory notes in the principal amount of $33,333 each, to Roger A. Tichenor, Siesta Fiesta Holdings, LLC, and Randall Oser. The notes will mature on February 2, 2013. The company expected to raise gross proceeds of $300,000. The securities were issued pursuant to exemption provided under Regulation D. Under the terms of the notes, each note holder may elect, at any time after 180 days from February 2, 2012, to convert the outstanding principal amount and unpaid interest thereon in whole or in part into common shares at higher of 80% of the average of the three lowest daily closing prices of its common stock during the period beginning on the date the company receives notice of the note holders' election to convert and ending on and including the date that is five trading days after receipt of said notice and $0.005. In the event, the company is at default under the notes; the conversion rate per share is the highest of 70% of the market price and $0.004. In the event, the company consummate an equity financing pursuant to which it sell shares for an aggregate gross sales price of not less than $1,000,000, a note holder may elect to redeem all but not less than all of the then outstanding principal amount, plus accrued and unpaid interest, or continue to hold the note until the maturity date or conversion. The company must also pay the holders of the notes 110% of the outstanding principal balance plus any accrued interest if, prior to the maturity date, they merge into another entity in which, after such merger holders of a majority of our voting securities immediately prior to the merger do not hold a majority of the voting securities of the successor entity or sell or convey all or substantially all of its assets or common stock to any other person or entity. The note bears interest rate of 8% per annum.