SEC Company Response from Graphene & Solar Technologies Ltd (GSTX) (CIK 0001497649) (GSTX) — Oct 9, 2012
Graphene & Solar Technologies Ltd (GSTX) (CIK 0001497649)
Date: Oct. 9, 2012 · CIK: 0001497649 · Accession: 0001004878-12-000334
AI Filing Summary & Sentiment
File numbers found in text: 333-174194, 333-180987
Referenced dates: May 17, 2012
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HART & TRINEN, LLP
ATTORNEYS AT LAW
1624 Washington Street
Denver, CO 80203
William T. Hart, P.C. ________ Email: harttrinen@aol.com
Donald T. Trinen Facsimile: (303) 839-5414
(303) 839-0061
--
Will Hart
October 9, 2012
Sirimal R. Mukerjee
Securities and Exchange Commission
100 F Street, NE
Washington, DC 20549
Re: Vanguard Energy Corporation
Registration Statement on Form S-1
File No. 333-180987
This office represents Vanguard Energy Corporation (the "Company").
Amendment No. 1 to the Company's registration statement on Form S-1 has been
filed with the Commission. This letter provides the Company's responses to the
comments received from the staff by letter dated May 17, 2012. The paragraph
numbers in this letter correspond with the numbered paragraphs in the staff's
comment letter. The number under the "page number" column indicates the page
number in the report where the response to the comment can be found. A number
preceded with the letter "F" indicates the page number of the financial
statements where the response to the comment can be found.
Page Number
1. The Company's exchange offer is not subject to
Rule 13e-4 since the Commission does not have the authority
to subject the Company, which does nothave a class of
securities registered pursuant to Section 12 of the Securities
Exchange Act of 1934, to the provisions of Section 13(e)
of the 1934 Act.
Since 1968, the regulation of tender offers has
revolved around theWilliams Act and its offspring of
amendments and regulations. The Williams Actadded the
following sections to the Securities Exchange Act of 1934:
13(d)
13(e)
14(d)
14(e)
14(f)
With the exception of Section 14(e), the sections to
the 1934 Act added bythe Williams Act pertain to securities,
or issuers which have a class of securities,
registered under Section 12 of the 1934 Act.
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Page Number
Shortly before the passage of the Williams Act, the
bill was beingdiscussed on the Senate floor. During
this discussion, Senator Williams made the
following statement:
"Mr. Williams of New Jersey. Mr. President, S.510,
as passed by the House amended in several respects
the provisions of the Senate bill dealing with
re-purchases by issuers of their own securities.
As the sponsor of this legislation in the Senate,
I would like to clarify the
purposes of these amendments.
One amendment restricts those purchases to
equity securities registered pursuant to
Section 12 of the Securities Exchange Act of
1934 or issued by closed-end investment
companies registered under the Investment
Company Act of 1940. Neither this change nor
anything else in the bill affects the Commission's
existing authority under the general antifraud
provisions of the securities acts. The Commission
thus has ample authority to deal with problems
involving the securities of other companies."
(Source: Congressional Record- Senate/July 18, 1968/page 21954)
Senator Williams' reference to "other companies" of
course meant companieswhose securities were not registered
under Section 12.
It was clearly the intent of Congress that Section
13(e) of the Exchange Act would only apply to issuers
which have a class of equity securities registered pursuant
to Section 12. Where the intent of Congress is clear, the
Commission does not have the authority, through the adoption
of rules, to change the law.
In the case of Ernst & Ernst v. Hochfelder, 425 U.S.
185, the Commission argued that since ss.10(b) of the
Securities Act of 1933 is not by its terms explicitly
restricted to willful, knowing, or purposeful conduct,
it should not be construed in all cases to require
more than negligent action or inaction as a
precondition for civil liability.
In rejecting the Commission's argument, the Supreme
Court stated:
"We would be unwilling to bring about this
result absent substantial support in the
legislative history, and there is none".
"The rulemaking power granted to an
administrative agency charged with
the administration of a federal statue is
not the power to make law.Rather, it is the
power to adopt regulations to carry into effect
the will of Congress as expressed by the statute".
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Page Number
However, and notwithstanding the fact that the
Commission does not have the authority to subject
the Company to Rule 13e-4, the Company's proposed
exchange offer is not a tender offer.
In Wellman v. Dickinson, 475 F.Supp. 783, 823-24,
the court adopted an eight-factor test against which
the actions of a purchaser are to be assessed in
order to determine whether the elements of a tender
offer are present. The eight factors, and their applicability
to the Company's proposed exchange offer, are:
(1) Active and widespread solicitation of public shareholders
for the shares of an issuer:
The Series C warrants are owned by 44 accredited
investors. There is no public market for the Series
C warrants. In connection with the Company's exchange
offer, there will be no active or widespread
solicitation of the holders of the Series C warrants.
(2) Solicitation made for a substantial percentage of the
issuer's stock;
As of June 30, 2012 the Company had approximately
12,725,000 outstanding shares of common stock.
At the present time, the Series C warrants
entitle the holders to purchase 1,500,000 shares
of the Company's common stock. The Class A warrants,
which the Company is offering to exchange for
the Series C warrants, would also allow the
holders to purchase up to 1,500,000 shares
of the Company's common stock. Regardless of
the number of Class A warrants that are
exchanged for the Series C warrants, the
number of shares issuable upon the exercise of
the Series C warrants, or the Class A warrants
accepted in exchange, would be the same.
(3) Offer to purchase made at a premium over the
prevailing market price;
Any Class A warrant issued in exchange for a
Series C warrant will entitle the holder to
purchase the same number of shares of the
Company's common stock, and upon the same terms,
as the Series C warrant.
Although there is presently a market for the
Class A warrants, any amount received upon
the sale of a Class A warrant by a former Series
C warrant holder would come from a person
purchasing the Class A warrant on the OTC
Bulletin Board, and not from the Company.
3
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Page Number
(4) Terms of the offer are firm rather than negotiable;
The terms of the offer are firm and not
negotiable.
(5) Offer contingent on the tender of a fixed number
of shares, often subject to a fixed maximum
number to be purchased;
The exchange offer is not contingent upon any
fixed number of Series C warrants being tendered.
(6) Offer open only for a limited period of time;
The exchange offer will be open for a period
ending nine months after the effective date
of the Company's registration statement, unless
extended by the Company.
(7) Offeree subjected to pressure to sell his stock;
The holders of the Series C warrants will not
be under any pressure to accept the exchange
offer. Although the Company committed to make
the exchange offer, and although the Company
has no problem in making the exchange offer,
the Company will likewise not have any problem
if none of the Series C warrant holders accept
the Company's exchange offer.
(8) The public announcement of a purchasing program
concerning the target company precede or accompany
rapid accumulation of a large amount of
target company's securities.
There will be no public announcement preceding or
accompanying the exchange offer.
2. We have supplied all of the information required by
the instructions to Form S-1 and Item 202 of Regulation S-K.
We did not see any reference to Form S-4 in the instructions
to the Form S-1. 10, 11, 37
3. Comment complied with.
Fee Table
4. Since the terms of the Series C warrants
automatically converted to the terms of the Class A
warrants when the Company's public offering was completed
in 2011, there are no differences between the Class A
warrants and the Series C warrants. 37
5. Comment complied with. 6/30/12 Financial
Statements
4
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Page Number
6. There are no written agreements as such between
the Company and the holders of the Series C warrants. The
only agreement relating to the registration of the shares
issuable upon the exercise of the Series C warrants
was that contained in a section of the Company's private
offering memorandum relating to the sale of the Series C
warrants. The relevant section is as
follows:
"We have agreed to file a registration statement
with the Securities and Exchange Commission so
that the Series C warrants, as well as any
shares of common stock issuable upon exercise of
the Series C warrants, can be resold in the
public market."
7. Comment complied with. The Class A warrants filed
as Exhibit 4.3 to the Company's registration statement on
Form S-1 (File No. 333-174194) were issued as part of a unit.
However, as disclosed in the Company's 8-K report filed on
December 9, 2011, the units
separated on December 19, 2011. Part II, Item 16
8. Comment complied with. Exhibit 5
If you should have any questions concerning the
foregoing, please do not hesitate to contact the
undersigned.
Very Truly Yours,
HART & TRINEN, L.L.P.
/s/ William Hart
William T. Hart
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