0001640334-17-002155.txt : 20171012 0001640334-17-002155.hdr.sgml : 20171012 20171012104848 ACCESSION NUMBER: 0001640334-17-002155 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 17 CONFORMED PERIOD OF REPORT: 20171010 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Unregistered Sales of Equity Securities ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20171012 DATE AS OF CHANGE: 20171012 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Solar Quartz Technologies Corp CENTRAL INDEX KEY: 0001497649 STANDARD INDUSTRIAL CLASSIFICATION: METAL MINING [1000] IRS NUMBER: 272888719 STATE OF INCORPORATION: CO FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 333-174194 FILM NUMBER: 171133987 BUSINESS ADDRESS: STREET 1: 21 WATERWAY AVENUE, SUITE 300 CITY: THE WOODLANDS STATE: TX ZIP: 77380 BUSINESS PHONE: (281) 362-2725 MAIL ADDRESS: STREET 1: 21 WATERWAY AVENUE, SUITE 300 CITY: THE WOODLANDS STATE: TX ZIP: 77380 FORMER COMPANY: FORMER CONFORMED NAME: Vanguard Energy Corp DATE OF NAME CHANGE: 20100728 8-K 1 vnge_8k.htm FORM 8-K vnge_8k.htm

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (date of earliest event reported): October 10, 2017

 

SOLAR QUARTZ TECHNOLOGIES CORPORATION

(Exact name of registrant as specified in its charter)

 

Colorado

None

27-2888719

(State or other jurisdiction
of incorporation)

(Commission
File No.)

(IRS Employer
Identification No.)

 

21 Waterway Avenue, Suite 300

The Woodlands, Texas 77380

(Address of principal executive offices, including Zip Code)

 

Registrant’s telephone number, including area code: (713) 627-2500

 

____________________________________________

(Former name or former address if changed since last report)

 

Check appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below)

 

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o Pre-commencement communications pursuant to Rule 13e-14(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 
 
 
 

 

Item 3.02 Unregistered Sales of Equity Securities

 

On July 1, 2017, Solar Quartz Technologies Inc. (OTC:SQTI, sold 100% of its wholly owned shares of common stock of Solar Quartz Technologies Limited, a New Zealand corporation to Vanguard Energy Corporation (OTC:VNGE). The Share Sale & Purchase Agreement (SS&PA) provided for VNGE shareholders to retain 5% of the shares of the company once the purchase was completed. Prior to completion only 1,002,134 shares of VNGE were issued and outstanding. Accordingly 10,021,340 additional SQTX bonus shares are required to be issued to the remaining VNGE shareholders to maintain their 5% interest in the company.

 

Concurrent with the completion, the company applied to FINRA to change its name from Vanguard Energy Corporation to Solar Quartz Technologies Corporation with a new stock trading symbol ‘SQTX’. SQTX plans to complete the distribution of the additional 10,021,340 bonus shares (10:1 approx.) to all ex-VNGE shareholders, including all new SQTX shareholders of record as of October 17, 2017 (the “Record Date”) at no additional cost before November 30th 2017.

 

SQTX has prepared a Private Placement Memorandum Offering (PPM), allocating up to 1,000,000 restricted shares of its Common Stock, $0.00001 par value, at an offering price of $1.50 per share, for potential gross proceeds of $1,500,000.

 

Proceeds will be applied to expenses for regulatory, legal, auditing and accounting costs to bring current all SQTX SEC filings, and to then apply to the SEC for “fully reporting status”. Once SEC approval is obtained the company will then apply for an Uplift to a more senior stock Exchange stock such as; OTC:QX, NYSE.Mkts, and/or possibly NASDAQ. Substantial listing costs and professional’s fees are required to accomplish this process.

 

S1 Registration Statement:

 

The Company is currently preparing an S-1 Registration Statement application to file with the SEC upon completion and approval of the Uplift to a senior exchange. The S-1 will also provide for a new Queensland Australia and Texas capital raising of $150 million to complete the establishment of new HPQS Processing Factories in Queensland Australia and in Texas.

 

10:1. Bonus Offering:

 

Furthermore, per the Private Placement Memorandum Offering, for a specified period, qualified investors can purchase new shares of the restricted common stock of SQTX from the company at a cost of US$1.50 per share. Each investor purchasing the shares at US$1.50 price, or $30,000 will also be eligible for a 10:1 bonus issuance at no additional cost. Essentially for each allotment of 20,000 shares purchased, the purchaser will receive an issuance of 200,000 new SQTX restricted shares from the company for no additional cost.

 
 
2
 
 

 

The company retains the right to change, modify, cancel or terminate the PPM offering, or reject any specific share purchase application at any time without notice, or further obligation at its sole discretion.

 

Under the terms of the Private Placement Memorandum Offering, the minimum purchase per investor will be 20,000 shares, for $30,000.00 (200,000 total shares). Should all 1,000,000 shares be purchased, there will then be a total of 10,000,000 new SQTX shares issued from the company.

 

The Officers and Directors of the Company will make offers and sales of the shares; however, the Company will retain the right to utilize any broker-dealers registered with the National Association of Securities Dealers, Inc. (“NASD”) and applicable state securities authorities to sell all or any portion of the shares. If the Company so elects, it may pay such broker-dealers a commission in the amount of up to 13% and a non-accountable expense allowance of up to 5% of the proceeds they have sold. Offers and sales of the shares will be made only to “Accredited Investors” as such term is defined in Rule 501 of Regulation D promulgated under the Securities Act of 1933, as amended, which includes the Company’s officers, directors and affiliate

 

2.02 Results of Operations and Financial Condition

 

The Company has engaged auditors, Thayer O’Neal Company, LLC, to perform audits of its financial statements and enable the Company to bring all required Securities and Exchange Commission (“SEC”) filings up-to-date, enabling it to resume its fully reporting status.

 

The Company’s financial statements have been prepared and audits of those statements are currently in process for the fiscal years ended September 30, 2015 and 2016, each of which will be attached to filings of Forms 10-K for each respective year, for which drafts of the respective Forms 10-K have been prepared. Concurrently, the Company’s financial statements have been prepared for the fiscal quarters ended December 31, 2015, March 31, 2016, June 30, 2016, December 31, 2016, March 31, 2017 and June 30, 2017. These financial statements are being reviewed by the company’s auditors and will be filed as individual Forms 10-Q for the respective dates. We expect all of this audit activity and form filing with the SEC to be completed by October 31, 2017.

 

Following the completion of all filings, the Company will take all the necessary steps to become fully reporting with the SEC as well as apply for the Company to be relisted on the OTC:QX board. VNGE was previously listed on the OTC:QX.

 

The Company’s latest unaudited financial statements including its Balance Sheets, Statement of Operations and Statement of Cash Flows are presented below. Since all of the Company’s financials are under audit for FY2015 and FY2016, these reports are subject to adjustment and should not be relied upon until final reports are filed.

 
 
3
 
 

 

CONSOLIDATED BALANCE SHEETS

 

 

 

 

 

 

 

 

 

June 30,

 

 

September 30,

 

 

 

2017

 

 

2016

 

 

 

(Unaudited)

 

 

(Unaudited)

 

 

 

 

 

 

 

 

ASSETS

Current assets

 

 

 

 

 

 

Cash and cash equivalents

 

$ 66

 

 

$ 35

 

Other receivables

 

 

-

 

 

 

966

 

Total current assets

 

 

66

 

 

 

1,001

 

 

 

 

 

 

 

 

 

 

Debt issuance costs

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Total assets

 

$ 66

 

 

$ 1,001

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ DEFICIT

Current liabilities

 

 

 

 

 

 

 

 

Accounts payable

 

$ 62,772

 

 

$ 51,212

 

Accrued interest payable

 

 

44,003

 

 

 

36,044

 

Accrued liabilities

 

 

23,885

 

 

 

17,511

 

Short term notes payable

 

 

85,000

 

 

 

85,000

 

Other liabilities

 

 

92

 

 

 

92

 

Current portion of notes payable, net of discount $- and $71,754

 

 

70,747

 

 

 

70,747

 

Total current liabilities

 

 

286,500

 

 

 

260,606

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Stockholders’ deficit

 

 

 

 

 

 

 

 

Preferred stock, $0.00001 par value; 5,000,000 shares authorized; none issued or outstanding

 

 

-

 

 

 

-

 

Common stock, $0.00001 par value; 100,000,000 and 50,000,000 shares authorized; 1,002,134 and 979,109 shares issued and outstanding

 

 

1,002

 

 

 

1,002

 

Additional paid-in capital

 

 

6,318,920

 

 

 

6,318,920

 

Accumulated deficit

 

 

(6,606,356 )

 

 

(6,579,527 )

 

 

 

 

 

 

 

 

 

Total stockholders’ deficit

 

 

(286,434 )

 

 

(259,605 )

 

 

 

 

 

 

 

 

 

Total liabilities and stockholders’ deficit

 

$ 66

 

 

$ 1,001

 

 
 
4
 
 

 

CONSOLIDATED STATEMENT OF OPERATIONS

 

 

 

 

 

 

Nine Months Ended June 30

 

 

 

2017

 

 

2016

 

 

 

(Unaudited)

 

 

(Unaudited)

 

Revenues

 

 

 

 

 

 

Oil and gas sales

 

$ -

 

 

$ -

 

 

 

 

 

 

 

 

 

 

Costs and expenses

 

 

 

 

 

 

 

 

Lease operating expense

 

 

-

 

 

 

-

 

Production taxes

 

 

-

 

 

 

-

 

Depreciation, depletion and amortization

 

 

 

 

 

 

 

 

Impairment of O&G properties

 

 

-

 

 

 

-

 

Asset retirement obligation accretion

 

 

-

 

 

 

-

 

General and administrative

 

 

12,522

 

 

 

27,549

 

Total costs and expenses

 

 

12,522

 

 

 

27,549

 

 

 

 

 

 

 

 

 

 

Loss from operations

 

 

(12,522 )

 

 

(27,549 )

 

 

 

 

 

 

 

 

 

Other income (expense)

 

 

 

 

 

 

 

 

Other income

 

 

27

 

 

 

-

 

Interest income

 

 

-

 

 

 

-

 

Interest expense

 

 

(7,959 )

 

 

(9,755 )

Other interest costs

 

 

(6,375 )

 

 

(4,948 )

Gain on debt extinguishment

 

 

-

 

 

 

91,102

 

Total other income (expense)

 

 

(14,307 )

 

 

76,399

 

 

 

 

 

 

 

 

 

 

Net Income (Loss) before income taxes

 

 

(26,829 )

 

 

48,850

 

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Net Income (Loss)

 

$ (26,829 )

 

$ 48,850

 

 
 
5
 
 

 

CONSOLIDATED STATEMENT OF CASH FLOWS

 

 

 

 

 

 

Nine Month ended June 30,

 

 

 

2017

 

 

2016

 

 

 

(Unaudited)

 

 

(Unaudited)

 

Cash flows from operating activities

 

 

 

 

 

 

Net Income (loss)

 

$ (26,829 )

 

$ 48,850

 

Adjustments to reconcile net income/(loss) to net cash from operating activities:

 

 

 

 

 

 

 

 

Gain on debt extinguishment

 

 

-

 

 

 

(76,190 )

Change in operating assets and liabilities:

 

 

 

 

 

 

 

 

Other assets

 

 

966

 

 

 

(966 )

Accounts payable

 

 

11,560

 

 

 

(6,217 )

Accrued interest payable

 

 

7,959

 

 

 

(5,180 )

Accrued liabilities

 

 

6,374

 

 

 

4,923

 

Other liabilities

 

 

0

 

 

 

(183 )

Net cash from operating activities

 

 

31

 

 

 

(34,963 )

 

 

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

 

 

 

Issuance of common stock

 

 

-

 

 

 

23

 

Issuance of short term note payable

 

 

-

 

 

 

35,000

 

Net cash from financing activities

 

 

-

 

 

 

35,023

 

Net change in cash and cash equivalents

 

 

31

 

 

 

60

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

 

 

 

 

 

 

Beginning of period

 

 

35

 

 

 

5

 

End of period

 

$ 66

 

 

$ 65

 

 
 
6
 
 

 

Notice Regarding Forward-Looking Statements:

 

This release includes “forward-looking statements” within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. These statements are based upon the current beliefs and expectations of the company’s management and are subject to significant risks and uncertainties. If underlying assumptions prove inaccurate or risks or uncertainties materialize, actual results may differ materially from those set forth in the forward-looking statements.

 

Risks and uncertainties include, but are not limited to, availability of capital; the inherent uncertainties associated with developing new products or technologies and operating as a development stage company; our ability to raise the additional funding we will need to continue to pursue our business and product development plans; our ability to develop and commercialize products based on our technology platform; competition in the industry in which we operate and market; general industry conditions; general economic factors; the impact of industry regulation; technological advances; new products and patents attained by competitors; manufacturing difficulties or delays; dependence on the effectiveness of the company’s patents; and the exposure to litigation, including patent litigation, and/or regulatory actions.

 
 
7
 
 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

SOLAR QUARTZ TECHNOLOGIES CORPORATION

       
Date: October 12, 2017 By: /s/ Warren M. Dillard/

 

 

Warren M. Dillard,

President and Chief Executive Officer

 

 

 

8

 

EX-9 2 vnge_ex9.htm FINAL SQTX BUS. OVERVIEW vnge_ex9.htm

EXHIBIT 9

 

 

 

 

 

SOLAR QUARTZ TECHNOLOGIES CORP.

Rare Solar & Semi-conductor Industry Investment Opportunity

New Solar Grade HPQS Production Plant in USA & Australia

US Public Company – “OTC: SQTX” (Oct. 2017 Update)

 

 

 

 

1. The Company

 

Following the July 2017 completion of its US $530 million take-over by a USA publicly listed corporation, (formerly known as Vanguard Energy Corp), Solar Quartz Technologies Corp.(SQTX) is proceeding to establish its new commercial production level High Purity Quartz Sand (HPQS) factory. HPQS production worldwide never meets the demand from the solar PV crucible and semi-conductor industries. There are only three significant commercial HPQS manufacturers worldwide. The SQTX technology team have a long established and proven track record of their technological production capability of making Solar grade HPQS in compliance with global solar and semiconductor industry quality and purity standards. SQTX’s executive management team has 6-10 years’ experience in all facets of the production of specialised HPQ products critical for the high-end solar and electronics components industry. SQTX has the added advantage of owning its own high purity silica deposits, capable of providing 25 to 30 years supply of HPQ feed-stock for the HPQS products. SQTX is seeking to raise additional development funds of US$38 million, with an initial US$10 million, from an Industry Joint Venture partner, Equity investment or appropriate Debt instrument.

 

2.     High Purity Quartz Sand (HPQS)– Essential Component in PV Solar & all High-end Electronics.

 

High purity quartz (“HPQ”) and HPQ sands (“HPQS”) are extensively used during the manufacturing of mono-crystalline silicon, through the Czochralski process, as crucibles in which silicon ingots are produced for use in solar cell and all electronics, and semi-conductors. HPQ is the only preferred material for this process and the essential crucibles, as it shares the same element (Si) and is almost non-reactive, assuring high quality silicon ingots. Apart from this, High Purity Quartz (HPQ) also finds primary applications in advanced lighting, telecom, optic and microelectronics industry. HPQS/powders are required for epoxy molding compound (EMC) used in manufacture of most electronic semiconductors, and is a fast growth sector, which includes auto electronics. –

 

Video Explanation CZOCHRALSKI process for silicon wafer production for Solar PV cell and Electronics Semiconductors from HPQS: https://www.youtube.com/watch?v=xftnhfa-Dmo

 

 

HPQS is a critical material necessary for the successful manufacture of Photovoltaic (“PV”) Solar panels, semi-conductors, and other high-end electronics, all of which cannot be manufactured without adequate supplies industry-standard HPQS. For five (5) years the SQTX technical team worked at a previously associated test facility, with two of the world's leading HPQS experts from the US and Germany. They have developed advanced new refining and processing techniques for manufacturing commercial grade purity and quantities of HPQS from the SQTX-owned, high purity quartz silica deposits, located in North Queensland, Australia. One of these experts directly established two (2) of the other three global factories, and has been retained to establish the new SQTX HPQS processing factory. There is always a shortage, globally, in adequate supplies of industry standard HPQ and HPQS, which have directly caused many businesses to fail as a direct result of supply shortages of HPQ and HPQS. It should be noted that Industry requirements for HPQS are not limited to the solar and electronics marketplace there is extensive usage as detailed in Item 11 in the Dropbox Web-link provided on Page 5 below.

 
 
1
 
 

 

3. Australian HPQS Factory

 

SQTX is currently positioned to establish its new commercial scale (50,000 tons per annum) HPQS factory in Australia where it has substantial equipment and infrastructure already located. Production at the new HPQS Factory will commence 6 to 8 months after receipt of funding and is profitable from the first year of operations.

 

 

HP Quartz Factory Processing and Testing HPQS

 

4. Three Stage Investment & High Profit Returns - IRR 108%

 

The US$ 38 million factory financing is a multi-staged investment, with US$ 10 million required initially to begin construction of the new Townsville, Queensland-located pre-processing plant to facilitate low-end unprocessed sale of quartz rock directly from the Quartz Hill mine site. (SEE DD Dropbox Item 3b) The balance of funds will be due as below herein.

 

4.1. Stage One – US$ 10 Million – Townsville Pre-Processing Factory “ SQ1” and “SQ5” Products

 

The initial US$10 million application of funds will be specifically allocated to sponsor the generation of early revenue from sales of un-processed raw quartz directly from the Quartz Hill mine site. The raw quartz rock will be shipped to the new Townsville Pre-Processing Factory for low-cost preparation involving high pressure washing, crushing and sizing, ready for shipping to international markets. SQT management is confident of re-establishing previous US$ 100 Million plus orders from China and several other new emerging markets that require basic HPQ for their own “value adding” production centres. While SQTX considers generation of early sales revenues is a vital function, the Pre-Processing Factory will also produce “SQ5” Feedstock for the new Commercial Scale HPQS Factory to generate sales into the solar industry, semi-conductor and all high-end electronics markets. By building the new Townsville factory, Stage One funding will provide a base for international sales operations focusing on generating high volume, low-end sales revenues from largely unprocessed quartz. The factory is designed with more than enough production capacity to meet both SQ5 feedstock and low-end production demands.

 

4.2. Stage Two – US$ 20 Million - HPQS Production Factory - “SQ7” Products

 

These funds will be needed six (6) months after the initial US$10 million. Funds will pay for establishing the fully operational Solar Grade, or Crucible Grade HPQS manufacturing facility. The factory will focus on manufacturing Solar Grade, or Crucible Grade HPQS products to world standard purity grade HPQS, for supply to all high-end electronics manufacturers. The Solar industry utilizes SQ7 HPQS extensively. This operational segment is the most challenging, requiring almost spotless production facilities and high-tech Clean Rooms, to insure ultimate high purity standards in the production process. The SQTX technical team has a previous proven ability to meet these standards and successfully achieve appropriate production quality for solar and crucible grade HPQS.

 
 
2
 
 

 

4.3. Stage Three - US$ 8 million - Factory Up-Grade Semi-Conductor Grade-“SQ9” Products

 

This funding is scheduled for one year after receipts of the Stage Two funding and will be used to purchase additional high-level refining equipment and meet the cost of facility upgrades to the existing HPQS factory to facilitate production of SQ9 semi-conductor grade HPQ. This grade of HPQ is the highest purity and yields the largest profit margin. It is extensively used in the semiconductor industry for tool wear applications and has consistent market demand. Semi-conductor grade SQ9 requires SQ7 solar grade HPQS as essential feedstock to enable manufacture of SQ9 semi-conductor

 

5. Completion of US$ 530 Million Reverse Take Over of US OTC PLC – SQTX is USA OTC Public Corp.

 

Vanguard Energy Corp. (VNGE) completed its US$ 530 Million acquisition of Solar Quartz Technologies Limited, a New Zealand private company, in July 2017, and obtained US Agency FINRA approval of its name change to Solar Quartz Technologies Corp and confirmation of the new stock symbol, “SQTX. Update of the Company audits and filings are currently being prepared and the Company will then look to file an application to uplift SQTX to trade on a more senior exchange OTC:QX, NYSE and/or NASDAQ. Accordingly, the company has a very strong asset base, no finance debt, owns it factory feedstock, and has the advantage of fully trading on the US markets for additional liquidity.

 

6. OPERATIONAL OVERVIEW – High Purity Quartz Sand (“HPQS”) & Quartz Assets

 

The constant demand for HPQS in high-end global markets has historically always exceeded available supply, and the current “booming” global solar industry, due to the rapid growth of utility scale PV solar farm installations, and micro-grid networks, has substantially increased global demand for HPQS. The re-tooling of the semiconductor industry to produce nano-chips has also increased HPQS demand. Many high-tech industries have had to curtail production and expansion due to the global shortage of HPQS. There are only three (3) commercial scale HPQS factories in the world, with the capability to refine raw quartz into commercial grade HPQS. They are located in the USA, Norway, and the Arctic Circle, collectively producing less than 60% of the world latent demand for HPQS.

 

SQTX has its own guaranteed supply of raw silica material to convert to HPQS feedstock, from its wholly owned ultra-high purity quartz deposit of 99.99% ultra-pure raw Quartz at its White Springs deposit (Estimated 1.5 million tonnes), located 230 kilometres inland from the major Queensland coastal port of Townsville.

 

The White Springs material is ideal for processing into HPQS and the estimated tonnage indicates sufficient reserve to fuel 15 to 20 years of processing into electronics grade HPQS. In addition, SQTX also owns the nearby “Quartz Hill” deposit that has an “AusIMM JORC” compliant resource of 14 million tonnes of high purity quartz, ideal to produce polysilicon metal, as well as for solar cell wafer production.

 

The current global price for Solar Crucible grade HPQS is US$8,000 to US$10,000 per tonne.. The global market price is projected to keep increasing, due to a global shortage of HPQS.

 

SQTX is also confident we can re-establish pre-existing HPQS sales orders for US$550 million (over 5 years) from five (5) Chinese crucible manufacturers, at a price of US$7,500+ per tonne (potential gross profit US$450 million over five years). Copies available.

 

The current solar industry global “boom” and the semi-conductor industry re-tooling for nano-tech chips have further increased potential HPQS sales. Existing global HPQS production capacity is unable to meet the current and forecasts future increased demand trends, including that from the main competitor, located in North Carolina, USA.

 
 
3
 
 

 

7. TOWNSVILLE, AUSTRALIA – Quartz Mining & Pre-Processing Factory & Unprocessed Raw Quartz Sales Centre

 

SQTX has a successful long-term association with its Townsville-based Contract Miner, NORDEV, and has entered into an agreement for NORDEV to mine the raw silica from the nearby White Springs and Quartz Hill deposits, and then freight the raw quartz to Townsville for pre-processing at the new factory being established in Townsville. The raw quartz will undergo minimal crushing, sizing, and mild acid washing to produce a semi-processed feedstock product, labelled as SQ5. The SQ5 product is the feedstock for HPQS production, as well as being suitable in a more refined form for sales to HD and LCD television screen manufacturers, especially those in Korea. SQTX also has access to re-establish a previous sales order for US$180 million of raw quartz (unprocessed & as mined) with a strong possibility of an additional $160 million sale from China. These sales and deliveries would be processed and shipped from the new Townsville facility. Copies of the previous Chinese orders are available.

 

SQTX is also considering establishing a full-scale commercial HPQS Factory in Townsville, Queensland, subject to further evaluation of cost and other productivity issues, including skilled resource availability at this location, pending securing funding and assessing other local incentives.

 

White Springs & Quartz Hill Deposits

 

8. UNIQUE INVESTMENT OPPORTUNITY-US$ 10 million to US$ 38 million

 

SQTX is seeking to raise US$38 million by way of convertible notes, equity, or JV to establish its new full-scale commercial production factory, to manufacture 50,000 tons per annum of electronics grade HPQS. First full year production, 10,000 t/p/a, increasing to 30,000 t/p/a in the second year, and then 50,000 tpa. The first stage HPQS processing is mainly for HPQS crucible sand for the PV Solar markets (US$8.0k-US$10.0k p/ton). Some crucible grade HPQS will also be utilized for 2nd stage processing into semiconductor grade HPQS, at an extra processing cost of $2,500 per tonne, that sells for US$12K – US$25K per tonne. Production of semi-conductor grade HPQS will be introduced from the 2nd year operations. The early timeframe commencement of operations at the new pre-processing and HPQS processing facility will enable significant early stage revenues to create early profitability, as well as to fund additional costs for semi-conductor grade processing. Production of crucible grade HPQS will begin 6 months after receipt of new funding.

 

The SQTX investment will produce an IRR of 108% with profits exceeding $100 million in year three (3). SQT has no debt or financial liabilities. Any funding can be secured over the entire US$ 530 Million asset base of SQT.

 

Upon completion of the planned Uplift to OTC:QX, NYSE or NASDAQ, SQTX will then initiate a US$ 100 - $150 million Secondary Public Offering (IPO) in the US markets to fund the expansion of US operations and to establish the planned new West Coast HPQS factory (production of 50,000 to 100,000 tons per annum).

 
 
4
 
 

 

9. ESTABLISHED COMPARITIVE MARKET VALUE - SUMITOMO JAPAN & RUSSIAN QUARTZ (RQ)

 

In 2015, Sumitomo Japan completed its purchase of a 28% equity holding for US$52 million in one of the other three (3) HPQS manufacturing factories, known as Russian Quartz (RQ). This producer has significant disadvantages over the SQTX operations, some of which are as follows:

 

(A) RQ factory only produces 3,000 t/p/a. Sumitomo now planning an increase to 10,000 t/p/a.

 

(B) RQ factory located in the Arctic Circle can only operate three months of the year.

 

(C) RQ silica deposits are 30 meters to 90 meters’ underground, substantially higher mining costs.

 

(D) RQ deposit fractionally less pure than White Springs Silica, extra purification processing cost.

 

By comparison the SQTX deposits allow for surface mining, or quarrying, that can be operational year-round in ideal climate conditions. In addition, the new SQTX HPQS factory will produce 30,000+ tons of HPQS per year.

 

The Sumitomo purchase firmly establishes a minimum value of US$200 million for the Russian Quartz operation. The SQTX HPQS processing operations (when fully operational), combined with SQTX’s solely owned silica assets at White Springs and Quartz Hill, indicate a Market Value far more than the Russian Quartz-established US$200 million.

 

10. TOWNSVILLE JV SOLAR SILICON METAL SMELTER (For Photovoltaic PV cells)

 

The Quartz Hill 14 million tons high purity quartz deposit was previously the target of a Joint Venture with the largest manufacturer of PV solar panels in Korea. The foundation basis for this agreement was the fact that the unusual high purity of the Quartz Hill deposit provides significant opportunities for cost savings in the smelting of the product into solar grade silicon metal. In addition, SQTX’s sole debt free ownership of this deposit allows for the company to supply the raw quartz for processing at an extremely competitive price, significantly below current market value, for less pure raw quartz currently being used in silicon metal production.

 

SQT believes there are significant opportunities, given the increased demand for PV solar panels, to negotiate a new joint venture with a major end user of the solar grade silicon metal. SQTX would not entertain establishing a PV silicon metal factory without a major International end-user partner. However, SQT is currently re-exploring this option, and believes it will be successful in attracting an appropriate joint-venture partner that can use the low-cost silicon metal in its own global manufacturing. The original party is now the second or third largest manufacturer of solar panels in the world and we understand they still have interest in the original proposal. There is substantial information regarding this proposal in the SQT Drop-box.

 

11. EXTENSIVE DUE DILIGENCE & ADDITIONAL INFORMATION

 

SQTX DROPBOX WEB-LINK:

Available on Request

 

 

SQT WEBPAGE LINK:

www.sqt.solar

 

 

Contact Email:

wd@sqt.solar or rm@sqt.solar Phone +613 8639 5777

 

“A US$38 million investment indicates an exceptional IRR of 108%”

   

 
5
 
 

SQTX -FINANCIAL SUMMARY

  

 

 

 

 

The above figures demonstrate the growth in Solar investment in 2015 and forecast on-going strong growth forecast for PV Solar Industry globally. This trend underpins the significant additional demand that will be required for high purity quartz sand products vital for PV Solar panel production.

 

Contact Emails: Warren Dillard CEO wd@sqt.solar & Roger May rm@sqt.solar

  

 

6

EX-20 3 vnge_ex20.htm FINAL PPM vnge_ex20.htm

EXHIBIT 20

 

Copy Number

___________________

 

CONFIDENTIAL PRIVATE PLACEMENT MEMORANDUM

 

Solar Quartz Technologies Corporation

SQTX

 

Up to 1,000,000 Shares of Common Stock at $1.50 per share,

Minimum Purchase Per Investor – 20,000 Shares

__________________

 

This Confidential Private Placement Memorandum (the "Memorandum") has been prepared in connection with an offering (the "Offering") of up to 1,000,000 shares of Common Stock, $0.00001 par value (the "Shares") of Solar Quartz Technologies Corporation (the "Company"). The minimum offering amount is 20,000 shares ("Minimum Offering Amount"). The minimum purchase per investor is 20,000 shares, or $30,000.00. Officers and directors of the Company will make offers and sales of the Shares; however, the Company retains the right to utilize any broker-dealers registered with the National Association of Securities Dealers, Inc. ("NASD") and applicable state securities authorities to sell all or any portion of the Shares. If the Company so elects, it may pay such broker-dealers a commission in the amount of up to 13% and a non-accountable expense allowance of up to 5% of the proceeds they have sold. Offers and sales of the Shares will be made only to "Accredited Investors" as such term is defined in Rule 501 of Regulation D promulgated under the Securities Act of 1933, as amended (the "Act"), which includes the Company's officers, directors and affiliates.

 

We expect the offering to commence on the date of this Memorandum, set forth below. The Offering is scheduled to terminate on November 30, 2017. The Company reserves the right, however, to extend the term of this Offering for a period of up to 30 days. See "The Offering." We reserve the right to reject orders for the purchase of shares in whole or in part, and if a subscription is rejected the subscriber’s funds will be returned without interest the next business day after rejection. The proceeds from the sale will be payable to us in cash. Upon receipt and acceptance of a subscription, the proceeds will be immediately deposited in a bank account of ours to be used as specified herein.

   

This Memorandum may not be reproduced in whole or in part without the express prior written consent of the Company.

 

The date of this Confidential Private Placement Memorandum is October 10, 2017.

 
 
 
 

 

THIS MEMORANDUM IS FOR CONFIDENTIAL USE AND MAY NOT BE REPRODUCED. DISTRIBUTION THAT IS NOT APPROVED BY THE COMPANY MAY RESULT IN A VIOLATION OF FEDERAL AND STATE SECURITIES REGULATIONS. THIS MEMORANDUM AND ALL ACCOMPANYING MATERIALS SHALL BE RETURNED TO AN AUTHORIZED OFFICER OF THE COMPANY UPON REQUEST.

 

THE SECURITIES HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT OF 1933 (THE "ACT") OR THE SECURITIES LAWS OF ANY STATE, IN RELIANCE UPON ONE OR MORE SPECIFIC EXEMPTIONS FROM REGISTRATION OR QUALIFICATION REQUIREMENTS. SUCH EXEMPTIONS LIMIT THE NUMBER AND TYPES OF INVESTORS TO WHICH THE OFFERING WILL BE MADE. AS A RESULT, THE SECURITIES OFFERED HEREBY ARE OFFERED ONLY TO "ACCREDITED INVESTORS" AS SUCH TERM IS DEFINED IN RULE 501 OF REGULATION D OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

THE SECURITIES OFFERED HEREBY ARE HIGHLY SPECULATIVE AND INVOLVE A HIGH DEGREE OF RISK, AND SHOULD NOT BE PURCHASED BY ANYONE WHO CANNOT AFFORD THE LOSS OF HIS OR HER ENTIRE INVESTMENT. NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS MEMORANDUM IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

 

THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER FEDERAL AND APPLICABLE STATE SECURITIES LAWS. THERE IS CURRENTLY NO PUBLIC MARKET FOR THE SECURITIES, AND INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.

 

THE STATEMENTS CONTAINED HEREIN ARE BASED ON INFORMATION BELIEVED BY THE COMPANY TO BE RELIABLE. NO WARRANTY CAN BE MADE THAT CIRCUMSTANCES HAVE NOT CHANGED SINCE THE DATE SUCH INFORMATION WAS SUPPLIED. THERE CAN BE NO ASSURANCE THAT THE COMPANY WILL BE ABLE TO SUCCESSFULLY IMPLEMENT ANY OF ITS PLANS, OR THAT ACTUAL FUTURE PLANS AND PERFORMANCE WILL NOT BE MATERIALLY DIFFERENT FROM THE COMPANY'S PRESENT EXPECTATIONS.

 

ANY INFORMATION OR REPRESENTATIONS CONTAINED IN THE COMPANY'S PROMOTIONAL OR MARKETING SOURCES OTHER THAN THIS MEMORANDUM MAY NOT BE AS CURRENT OR ACCURATE AS INFORMATION OR REPRESENTATIONS CONTAINED IN THIS MEMORANDUM, AND THEIR CONTENTS ARE EXCLUDED FROM THIS MEMORANDUM.

 
 
 
 

 

THIS OFFERING IS SUBJECT TO WITHDRAWAL, CANCELLATION OR MODIFICATION BY THE COMPANY WITHOUT NOTICE. THE COMPANY RESERVES THE RIGHT, IN ITS SOLE DISCRETION, TO REJECT ANY SUBSCRIPTION IN WHOLE OR IN PART FOR ANY REASON OR TO ALLOT TO ANY SUBSCRIBER LESS THAN THE NUMBER OF SHARES SUBSCRIBED FOR OR TO WAIVE CONDITIONS TO THE PURCHASE OF THE SHARES.

 

PROSPECTIVE INVESTORS ARE NOT TO CONSTRUE THE CONTENTS OF THIS MEMORANDUM AS LEGAL, INVESTMENT OR TAX ADVICE. IN MAKING AN INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE COMPANY AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED.

 

THIS MEMORANDUM DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITY OTHER THAN THE SECURITIES OFFERED HEREBY, NOR DOES IT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OF SOLICITATION IS NOT AUTHORIZED, OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO. IN ADDITION, THE OFFERING MATERIALS CONSTITUTE AN OFFER ONLY IF A NAME AND IDENTIFICATION NUMBER APPEAR IN THE APPROPRIATE SPACES PROVIDED ON THE COVER PAGE AND CONSTITUTE AN OFFER ONLY TO THE PERSON WHOSE NAME APPEARS IN THOSE SPACES.

 

EXECUTIVE SUMMARY

 

Solar Quartz Technologies Corporation (hereinafter "the Company") is a Colorado corporation located at 21 Water Way Avenue, Suite 300, The Woodlands, Texas 77380

 

The Company was originally incorporated in Colorado on June 21, 2010 as Vanguard Energy Corporation. Between February 1, 2011 and June 14, 2014, it was involved in the exploration and development of oil and gas properties in southeast Texas.

 

It never earned a profit and in January of 2013 began investigating the possibility of selling their oil and gas properties.

 

The Company sold its oil and gas properties in 2014. The sale of the oil and gas properties represented the sale of substantially all of the assets.

 
 
 
 

 

On July 1, 2017 the Company authorized an increase in its authorized common shares to 500,000,000 and its authorized preferred shares to 10,000,000.

 

On July 1, 2017 the Company acquired all of the shares of Solar Quartz Technologies Limited, a company incorporated in New Zealand (“SQTNZ”). These shares were purchased from Solar Quartz Technologies, Inc. (“SQTI”). The agreed value of that company’s assets is US$530 million. We subsequently changed our name to Solar Quartz Technologies Corporation in Colorado and with FINRA, and have also been cleared by FINRA to use the new trading symbol SQTX. The Company issued 213,402,755 new shares of common stock to SQTI in exchange for 122 (100%) of the common shares of SQTNZ. The issuance of these shares was equivalent to 95% of the Company's shares issued, after we issue an additional 10,021,224 shares of common stock to those holders of our common stock immediately prior to the acquisition. The Company does not anticipate any further reorganization of its common stock. We are currently preparing filings of all necessary reports to the SEC with audited financial statements in order to resume our status as fully reporting with the SEC, and subsequently apply to trade on the more senior OTCQX exchange or NASDAQ.

 

SQTNZ is a corporation that has no prior business activity other than being the title owner of the exclusive mining and development rights for two High Purity Quartz (HPQ) Silica deposits known as Quartz Hill (represented by leases ML 30235, ML 30236 and ML 30237) and White Springs (represented by leases ML 30238 and ML 30239) located in North Queensland, Australia. Together they contain in excess of 15 million tons of High Purity Quartz, which is feedstock in high demand in the marketplace to be used in the production of High Purity Quartz Sand (HPQS).

   

HPQS is an essential primary material for the manufacture of:

 

 

· Photo-Voltaic (PV) solar panels;

 

· Semi-conductors; and

 

· AL High-end electronic products

 

· Fiber Optical cables

 

· Halogen Lamps

 

· HD and LCD television screens.

 

· Epoxy Mounding Compounds (EMC)

 

The Company will focus on re-establishing previous Chinese orders for low-end sales of unprocessed raw quartz from the mine sites directly from the Pre-Processing Factory currently being established in Townsville, North Queensland, Australia. The SQTX management team is highly optimistic following strong indications from the Australian Federal Government's Clean Energy Fund ($ One Billion) that they may fund the first stage funding requirement of $10 million to build the Pre-Processing Factory as well as the second stage funding of US$30 million required to build the high tech HPQS production factory land to be developed con-currently with the Townsville based Pre-processing factory. These fundings are not in place at this time, but we are confident regarding the positive outcome of important high-level discussions with the Director/CEO of the Clean Energy Fund in Brisbane, Australia

 
 
 
 

 

1. THE OFFERING

 

The Company intends to raise a minimum of $30,000.00 and a maximum of $1,500,000.00 in this Offering to fund the continued growth of our business. The Common Stock will be offered in a private Rule 144 placement offering under applicable state securities laws, and in reliance upon the representations and warranties of each of the purchasers that they are purchasing the Common Stock for investment purposes and not with a view to any resale or distribution thereof, (the "Conversion Ratio"). At the option of the holders, the Shares will be convertible into Common Stock at the then Conversion Ratio at any time prior to redemption. The Shares will be converted automatically into Common Stock at the Conversion Ratio then in effect upon the closing of an initial public offering. The company commits to issue 10 shares for each share purchased at no additional cost within 3 months from the execution date of this Offering.

 

The Offering is being made, at least, until the Minimum Offering Amount of $30,000 is raised. Proceeds received prior to raising the Minimum Offering Amount will be held in an escrow account with the Company's bank. Upon raising the Minimum Offering Amount, these proceeds will be released for use by the Company and, thereafter, 100% of the proceeds raised in the Offering, up to the Maximum Offering Amount of $1,500,000 will be immediately available for use by the Company without impound or escrow.

 

The net proceeds from the sale of the Shares offered hereby will be approximately $1,230,000 if all 1,000,000 shares are sold. The net proceeds from this offering will be used to expand marketing, sales and distribution capabilities and provide working capital. The following itemizes the intended use of proceeds:

 

Broker Commissions and Offering Expenses

 

$ 270,000

 

Marketing

 

$ 200,000

 

Factory Funding Process

 

$ 200,000

 

Working Capital

 

$ 830,000

 

Total Proceeds

 

$ 1,500,000

 

 

The expenditures projected in the foregoing list are estimates based on management projections of the operating needs of the business. Although the amounts set forth represent our present intentions with respect to proposed expenditures, actual expenditures may vary substantially, depending upon future developments such as marketing decisions, sales activity, and certain other factors.

 
 
 
 

 

The following table sets forth the actual capitalization of the Company prior to the Offering and as adjusted to reflect receipt of the Maximum Offering Amount proceeds from the issuance and sale of all 1,000,000 Shares in the Offering.

 

Minimum Offering

 

Shares Purchased

Total Consideration

 

Number

Percent

Amount

Percent

Average Price/Share

Shareholders at June 30, 2017 (1)

1,002,134

0.47%

$6,319,899

99.52%

$6.31

Seller of SQTNZ (2)

213,402,755

99.52%

N/A

N/A

N/A

New Investors (1)

20,000

0.01%

$30,000

0.48%

$1.50

Total

214,424,889

100.00%

$6,349,899

100.00%

 

_________

(1) Does Not Include 10 Shares to be issued for each 1 Share Purchased

(2) All Costs associated with Acquisition of Leases owned by SQTNZ absorbed by affiliates

  

Maximum Offering

 

Shares Purchased

Total Consideration

 

Number

Percent

Amount

Percent

Average Price/Share

Shareholders at June 30, 2017 (1)

1,002,134

0.47%

$6,319,899

80.80%

$6.31

Seller of SQTNZ (2)

213,402,755

99.07%

N/A

N/A

N/A

New Investors (1)

1,000,000

0.46%

$1,500,000

19.20%

$1.50

Total

215,404,889

100.00%

$7,819,899

100.00%

 

_________

(1) Does Not Include 10 Shares to be issued for Each 1 Share Purchased

(2) All Costs associated with Acquisition of Leases owned by SQTNZ absorbed by affiliates

 

The total shareholder's equity was ($286,434) at June 30, 2017. (See financial statements below)

 

The following description of certain matters relating to the securities of the Company does not purport to be complete and is subject in all respects to applicable Colorado law and to the provisions of the Company's articles of incorporation ("Articles of Incorporation") and bylaws (the "Bylaws").

 

Each share of Common Stock entitles the holder thereof to one vote on all matters submitted to a vote of the shareholders. The holders of Common Stock do not have preemptive rights or rights to convert their Common Stock into other securities. Holders of Common Stock are entitled to receive, pro rata, such dividends as may be declared by our Board of Directors out of legally available funds. Upon liquidation, dissolution or winding up of the Company, and after payment of creditors and the liquidated preference to preferred stockholders, if any, the assets will be divided pro-rata on a share-for-share basis among the holders of the shares of Common Stock. All shares of Common Stock now outstanding are fully paid, validly issued and non-assessable

 

The certificates representing the Shares being offered hereby will bear a legend to the effect that the Shares represented by the certificate are not registered under the Act, or under the securities laws of any state, and therefore cannot be transferred unless properly registered under the Act or pursuant to an opinion of counsel satisfactory to counsel to the Company that an exemption from the Act is available.

 
 
 
 

 

The following table sets forth certain information, as of June 30, 2017 and as adjusted to give effect to the Offering, regarding the beneficial ownership of the Common Stock by (i) each beneficial owner of more than 5% of the outstanding shares of Common Stock, (ii) each director of the Company, and each executive officer of the Company, and (iii) by all executive officers, directors of the Company as a group.

 

Name and Address of Beneficial Owner

 

Number of Shares Beneficially Owned

 

 

Percentage

of Class

 

 

Percentage Owned After Minimum Amount is Raised

 

 

Percentage Owned After Maximum Amount is Raised

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Roger T. May

 

 

-

 

 

 

0 %

 

 

0.000 %

 

 

0.000 %

88 Lorimer St.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Melbourne, Victoria 3008,Australia

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Warren M. Dillard

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

21 Waterway, Ste.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

300

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Woodlands, TX 77380

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Steven M. Powers (1)

 

 

7,500

 

 

 

0.003 %

 

 

0.003 %

 

 

0.003 %

2426 Topanga Canyon Blvd.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Topanga, CA 90290

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

David AB Halstead

 

 

-

 

 

 

0 %

 

 

0.000 %

 

 

0.000 %

Level 1, 19 Auburn St

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Newton, Auckland 1023, New Zealand

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Michael Selsman

 

 

-

 

 

 

0 %

 

 

0.000 %

 

 

0.000 %

433 N. Camden Dr., Ste. 500

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beverly Hills, CA 90212

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

All officers and directors as a group (5 persons)

 

 

7,500

 

 

 

0.003 %

 

 

0.003 %

 

 

0.003 %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total class:

 

 

214,404,889

 

 

 

214,424,889

 

 

 

215,404,889

 

 

 

 

 

___________

(1) Entitled to 10 shares of common for each share owned

 

The Company currently intends to retain its earnings for future growth and, therefore, do not anticipate declaring any dividends in the foreseeable future. The Company would expect that determinations to pay dividends on its shares would be based primarily upon the financial condition, results of operations, regulatory and business capital requirements, any restrictions contained in financing or other agreements binding upon the Company, and other factors that the board of directors deems relevant.

 
 
 
 

 

2. BUSINESS PLAN

 

The Company is proceeding to establish its new commercial production level High Purity Quartz Sand (HPQS) factory. HPQS production worldwide never meets the demand from the solar Phto-Voltaic crucible and semi-conductor industries. There are only three significant commercial HPQS manufacturers worldwide. The SQTX technology team has a long established and proven track record of their technological production capability of making Solar grade HPQS in compliance with global solar and semiconductor industry quality and purity standards. SQTX’s executive management team has 6-10 years’ experience in all facets of the production of specialized HPQ products critical for the high-end solar and electronics components industry. SQTX has the added significant advantage of owning 15 million tons its own 99% pure high purity silica deposits, capable of providing 25 to 30 years supply of HPQ feed-stock for the HPQS products. SQTX is seeking to raise additional development funds of US$38 million, with an initial US$10 million, from an Industry Joint Venture partner, Equity investor or appropriate Lender.

 

High purity quartz (“HPQ”) and HPQ sands (“HPQS”) are extensively used during the manufacturing of mono-crystalline silicon, through the Czochralski process, in crucibles in which silicon ingots are produced for use in solar cell and all electronics, and semi-conductor manufacturing. HPQ is the only preferred material for this process and the essential crucibles, as it shares the same element (Si) and is almost non-reactive, assuring high quality silicon ingots. Apart from this, High Purity Quartz (HPQ) also finds primary applications in advanced lighting, telecom, optic and microelectronics industry. HPQS/powders are required for epoxy molding compound (EMC) used in manufacture of most electronic semiconductors, and is a fast growth sector, which includes auto electronics.

 

The company plans significant new funding in order to initiate revenues from exploiting its considerable resources:

 

Stage One – US$ 10 Million – Townsville Pre-Processing Factory “ SQ1” and “SQ5” Products

The company will initially seek $10 million to sponsor the generation of early revenue from sales of un-processed raw quartz directly from the Quartz Hill mine site. The raw quartz rock will be shipped to the new Townsville Pre-Processing Factory for low-cost preparation involving high pressure washing, crushing and sizing, ready for shipping to international markets. SQT management is confident of re-establishing previous US$ 100 Million plus orders from China and several other new emerging markets that require basic HPQ for their own “value adding” production centers. While SQTX considers generation of early sales revenues is a vital function, the Pre-Processing Factory will also produce “SQ5” Feedstock for the new Commercial Scale HPQS Factory to generate sales into the solar industry, semi-conductor and all high-end electronics markets. By building the new Townsville factory, Stage One funding will provide a base for international sales operations focusing on generating high volume, low-end sales revenues from largely unprocessed quartz. The factory is designed with more than enough production capacity to meet both SQ5 feedstock and low-end production demands.

 
 
 
 

 

Stage Two – US$ 20 Million - HPQS Production Factory - “SQ7” Products

These funds will be needed six (6) months after the initial US$10 million. Funds will pay for establishing the fully operational Solar Grade, or Crucible Grade HPQS manufacturing facility. The factory will focus on manufacturing Solar Grade, or Crucible Grade HPQS products to world standard purity grade HPQS, for supply to all high-end electronics manufacturers. The Solar industry utilizes SQ7 HPQS extensively. This operational segment is the most challenging, requiring almost spotless production facilities and high-tech Clean Rooms, to insure ultimate high purity standards in the production process. The SQTX technical team has a previous proven ability to meet these standards and successfully achieve appropriate production quality for solar and crucible grade HPQS.

 

Stage Three - US$ 8 million - Factory Up-Grade Semi-Conductor Grade-“SQ9” Products

This funding is scheduled for one year after receipts of the Stage Two funding and will be used to purchase additional high-level refining equipment and meet the cost of facility upgrades to the existing HPQS factory to facilitate production of SQ9 semi-conductor grade HPQ. This grade of HPQ is the highest purity and yields the largest profit margin. It is extensively used in the semiconductor industry for tool wear applications and has consistent market demand. Semi-conductor grade SQ9 requires SQ7 solar grade HPQS as essential feedstock to enable manufacture of SQ9 semi-conductor

 

3. MANAGEMENT

 

The following table sets forth each director, principal director, and other control person:

  

Name

 

Age

 

Position

Roger T. May

 

71

 

Principal Director

 

 

 

 

 

Warren M. Dillard

 

75

 

Chief Executive, Financial and Accounting Officer and Director

 

 

 

 

 

Steven M. Powers

 

75

 

Vice President, Secretary and Director

 

 

David AB Halstead

 

70

 

Director

 

 

Michael Selsman

 

80

 

Director

    

Roger T. May - Mr. May has extensive international business experience over the last 40 years. He resided in the USA for 22 years, returning to Australia in September 2001. He is a recognized expert in "start-up" enterprises from inception to fully operational commercial ventures. He is regarded as an excellent corporate leader and successful achiever. He overcomes obstacles with great ability, tenacity, flexibility and creative initiative. Mr. May is regarded as an acknowledged visionary and creator combined with strong implementation skills. His capital raising skills have yielded tens of millions of dollars. Mr. May has been the Founder, Chairman & CEO of five (5) publicly listed companies in USA and Australia. He resided in the U. S. for 22 years, where he founded several high-tech. communications and mineral resource development companies. He is presently focused on global commercialization of primary component material essential in manufacture of PV Solar panels, Semi-conductor, and all high-end electronics in the USA and Australia.

 
 
 
 

 

Warren M. Dillard – Mr. Dillard has been our President, Chief Executive, Financial and Accounting Officer and a director since June 2010. Since February 2011 Mr. Dillard has been our Principal Financial and Accounting Officer. He has previously managed mutual funds with the American Funds group of funds, was CFO of Pepperdine University and has been active in the development of numerous early stage companies in a variety of industries. Since 2005, Mr. Dillard has served as the President and a director of Enercor, Inc., a private corporation involved in oil and gas exploration and development in the western United States. Since the spring of 2010, Mr. Dillard’s involvement with Enercor has been minimal. Mr. Dillard holds a degree in Accounting from Texas A & M University and an MBA in Finance from the Harvard Business School.

 

Steven M. Powers - Mr. Powers has been a director since June 2010. Since February 2011, Mr. Powers has been our Vice President of Business Development and our Secretary. Since 2005, Mr. Powers has served as Chief Executive Officer, Chairman and a director of Enercor, Inc., a private corporation involved in oil and gas exploration and development. Prior to his association with Enercor, Mr. Powers was a real estate developer. Mr. Powers earned a degree in philosophy from the University of California at Santa Barbara as well as an MBA from the University of California at Los Angeles.

 

David AB Halstead– Mr. Halstead has been a director since July 1, 2017. David has a wide range of corporate, secretarial and trusts experience, in both offshore and onshore companies. In 1973 he became a partner in a local chartered accounting firm and in 1984 a principal in the Hong Kong office of Coopers & Lybrand [now PWC] specializing in international corporate and secretarial services, and offshore tax structures. Upon his return to Auckland in 1994, he established and operated, several integrated medical centers, a surgical hospital in Auckland and a state of the art diagnostic center. He then spent 3 years working with World Vision fund raising for its micro finance arm “Vision Fund” involved with the capitalization and establishment of Vision Fund Cambodia. Reflecting his interest in health care delivery, in 2003 to this day, he became, and is a Trustee of the New Zealand based international medical aid charity, Medical Aid Abroad. Since 2006, David has acted as a director, company secretary and treasurer for a group of international clients. Contemporaneously he established and operated, until recently, a unique world-first web based joint venture service for the New Zealand Government processing immigration medicals online in a secure platform through a company called NZimed Limited.

 

He is a director of an immigration sector “lead generation” company, Leadgen Matrix Ltd, Business Epic Ltd, a company focused on assisting baby boomer SME owner operators maximize their business exit strategies and value, and Asia Capital (China) Ltd, a NZ registered Financial Services Provider facilitating investment into Australia and New Zealand. He is a director of several Hong Kong and Singapore companies as well as other NZ entities. Mr. Halstead was educated at Kings College, Auckland, the son of a former New Zealand Cabinet Minister and diplomat. He is a graduate of the University of Auckland with a Bachelor of Commerce and further qualifications in accounting and taxation.

 

Michael Selsman– Mr. Selsman is a Principal of Public Communications Company, Beverly Hills, CA, representing publicly traded companies as a consultant in both public relations and investor relations. He also conducts research and writes due diligence reports for brokerages, public and private companies (www.publiccommunicationsco.com). He is also a partner in Troika Publishing Media, a digital new media company.

 
 
 
 

 

Mr. Selsman has held public relations and publicity positions with 20th Century Fox, Paramount Pictures and Artists Agency Corporation (now ICM), representing such entertainment celebrities as Judy Garland, Marilyn Monroe, Peter Sellers, James Stewart, among others. He has also represented authors including Truman Capote, Ronald Dahl and others. He has also advised political campaigns of Diane Feinstein, U.S. Senator from California and others.

 

Directors will hold office until their successors have been elected or qualified at an annual shareholders' meeting, or until their death, resignation, retirement, removal, or disqualification. Vacancies on the board will be filled by a majority vote of the remaining directors. Officers of the Company serve at the discretion of the Board of Directors.

 

We may establish an informal Executive Advisory Board with appointments made by the Board of Directors. The role of the Executive Advisory Board will be to assist our management with general business and strategic planning. We intend to compensate Executive Advisory Board members with any combination of cash, common stock, or stock options.

 

Our Articles of Incorporation and bylaws provide blanket indemnification for our directors and officers to the fullest extent permissible under Colorado law. The Company has entered into indemnification agreements with members of the management team that indemnify, defend and hold harmless these members from liability incurred in connection with their duties as officers and directors of the Company.

 

We will maintain insurance policies under which the directors and officers of the Company will be insured, against certain losses arising from claims made against such directors and officers by reason of any acts or omissions in their respective capacities as directors or officers, including liabilities under the Securities Act.

 
 
 
 

 

4. HISTORICAL FINANCIAL INFORMATION

 

 

 

June 30,

 

 

September 30,

 

 

2017

 

 

2016

 

 

 

(Unaudited)

 

 

(Unaudited)

 

ASSETS

 

$

 

 

$

 

Current assets

 

 

 

 

 

 

Cash and cash equivalents

 

 

66

 

 

 

35

 

Other receivables

 

 

-

 

 

 

966

 

Total current assets

 

 

66

 

 

 

1,001

 

 

 

 

 

 

 

 

 

 

Debt issuance costs

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Total assets

 

$ 66

 

 

$ 1,001

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ DEFICIT

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

Accounts payable

 

 

62,772

 

 

 

51,212

 

Accrued interest payable

 

 

44,003

 

 

 

36,044

 

Accrued liabilities

 

 

23,885

 

 

 

17,511

 

Short term notes payable

 

 

85,000

 

 

 

85,000

 

Other liabilities

 

 

92

 

 

 

92

 

Current portion of notes payable

 

 

70,747

 

 

 

70,747

 

Total current liabilities

 

$ 286,500

 

 

$ 260,606

 

 

 

 

 

 

 

 

 

 

Stockholders' deficit

 

 

 

 

 

 

 

 

Preferred stock, $0.00001 par value; 5,000,000 shares

 

 

 

 

 

 

 

 

authorized; none issued or outstanding

 

 

-

 

 

 

-

 

Common stock, $0.00001 par value; 100,000,000 and 50,000,000

 

 

 

 

 

 

 

 

shares authorized; 1,002,134 and 979,109 shares issued and

 

 

 

 

 

 

 

 

outstanding

 

 

1,002

 

 

 

1,002

 

Additional paid-in capital

 

 

6,318,920

 

 

 

6,318,920

 

Accumulated deficit

 

 

(6,606,356 )

 

 

(6,579,527 )

 

 

 

 

 

 

 

 

 

Total stockholders' deficit

 

 

(286,434 )

 

 

(259,605 )

 

 

 

 

 

 

 

 

 

Total liabilities and stockholders' deficit

 

 

66

 

 

 

1,001

 

 
 
 
 

  

 

 

Three Months Ended June 30

 

 

Nine Months Ended June 30

 

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

 

 

(Unaudited)

 

 

(Unaudited)

 

 

(Unaudited)

 

 

(Unaudited)

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

Sales

 

$ -

 

 

$ -

 

 

$ -

 

 

$ -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs and expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative

 

 

3,788

 

 

 

11,005

 

 

 

12,522

 

 

 

27,549

 

Total costs and expenses

 

 

3,788

 

 

 

11,005

 

 

 

12,522

 

 

 

27,549

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss from operations

 

 

(3,788 )

 

 

(11,005 )

 

 

(12,522 )

 

 

(27,549 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income

 

 

27

 

 

 

-

 

 

 

27

 

 

 

-

 

Interest expense

 

 

(2,653 )

 

 

(5,510 )

 

 

(7,959 )

 

 

(9,755 )

Other interest costs

 

 

(2,125 )

 

 

-

 

 

 

(6,375 )

 

 

(4,948 )

Gain on debt extinguishment

 

 

-

 

 

 

-

 

 

 

-

 

 

 

91,102

 

Total other income (expense)

 

 

(4,751 )

 

 

(5,510 )

 

 

(14,307 )

 

 

76,399

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income (Loss) before income taxes

 

 

(8,539 )

 

 

(5,500 )

 

 

(26,829 )

 

 

48,850

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income (Loss)

 

$ (8,539 )

 

$ (16,515 )

 

$ (26,829 )

 

$ 48,850

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (Loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

$ (0.01 )

 

$ (0.02 )

 

$ (0.03 )

 

$ 0.05

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding

 

 

1,002,134

 

 

 

1,002,134

 

 

 

1,002,134

 

 

 

1,002,134

 

 
 
 
 

 

 

 

Nine Month ended June 30,

 

 

 

2017

 

 

2016

 

 

 

(Unaudited)

 

 

(Unaudited)

 

Cash flows from operating activities

 

 

 

 

 

 

Net Income (loss)

 

$ (26,829 )

 

$ 48,850

 

Adjustments to reconcile net income/(loss)

 

 

 

 

 

 

 

 

to net cash from operating activities:

 

 

 

 

 

 

 

 

Gain on debt extinguishment

 

 

-

 

 

 

(76,190 )

Change in operating assets and liabilities:

 

 

 

 

 

 

 

 

Other assets

 

 

966

 

 

 

(966 )

Accounts payable

 

 

11,560

 

 

 

(6,217 )

Accrued interest payable

 

 

7,959

 

 

 

(5,180 )

Accrued liabilities

 

 

6,374

 

 

 

4,923

 

Other liabilities

 

 

0

 

 

 

(183 )

Net cash from operating activities

 

 

31

 

 

 

(34,963 )

 

 

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

 

 

 

Issuance of common stock

 

 

-

 

 

 

23

 

Issuance of short term note payable

 

 

-

 

 

 

35,000

 

Net cash from financing activities

 

 

-

 

 

 

35,023

 

 

 

 

 

 

 

 

 

 

Net change in cash and cash equivalents

 

 

31

 

 

 

60

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

 

 

 

 

 

 

Beginning of period

 

 

35

 

 

 

5

 

 

 

 

 

 

 

 

 

 

End of period

 

$ 66

 

 

$ 65

 

 

 

 

 

 

 

 

 

 

Supplemental cash flow information

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Month ended March 31,

 

 

 

2016

 

 

2015

 

 

 

(Unaudited)

 

 

(Unaudited)

 

Noncash investing and financing activities:

 

 

 

 

 

 

 

 

Issuance of shares for settlement of debt

 

 

-

 

 

$ 23,025

 

 
 
 
 

 

The accompanying notes are an integral part of these consolidated financial statements:

 

BASIS OF PRESENTATION – Note 1

 

These unaudited consolidated financial statements of Vanguard Energy Corporation (Vanguard or the Company) have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). In the opinion of management, these financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the results for the interim periods. Certain information, accounting policies and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been omitted pursuant to Securities and Exchange Commission (SEC) rules and regulations. These financial statements should be read along with Vanguard’s audited financial statements as of September 30, 2016.

 

Going Concern – The Company has incurred cumulative net losses since its inception and will require capital for future operating activities to take place. The Company's ability to raise new funds through the future issuances of debt or common stock is unknown. The obtainment of additional financing, the successful development of a plan of operations, and its transition, ultimately, to the attainment of profitable operations are necessary for the Company to continue operations. The ability to successfully resolve these factors raise substantial doubt about the Company's ability to continue as a going concern.

 

Future issuances of the Company's equity or debt securities will be required in order for the Company to finance operations and continue as a going concern. The financial statements do not include any adjustments that may result from the outcome of these aforementioned uncertainties.

 

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Note 2

 

As of June 30, 2017, Vanguard’s significant accounting policies were consistent with those discussed in the audited financial statements as of September 30, 2016.

 

Earnings (Loss) Per ShareBasic earnings (loss) per share have been calculated based upon the weighted-average number of common shares outstanding. Diluted earnings per share have been calculated based upon the weighted-average number of common and potential common shares. The calculation of diluted weighted-average shares outstanding for the three-month periods ended June 30, 2017 and 2016 excludes 5,374 and 62,974 shares, respectively, issuable pursuant to outstanding warrants, stock options and debt conversion features because their effect is anti-dilutive.

 
 
 
 

 

SUBSEQUENT EVENT – Note 3

 

On July 1, 2017 the company acquired all of the shares of Solar Quartz Technologies Limited, a company incorporated in New Zealand (“SQTNZ”). These shares were purchased from Solar Quartz Technologies, Inc. (“SQTI”). The agreed value of that company’s assets is US$530 million. We subsequently changed our name to Solar Quartz Technologies Corporation in Colorado and with FINRA, and have also been cleared by FINRA to use the new trading symbol SQTX. In July 2017 the Company issued 213,402,755 new shares of common stock to SQTI in exchange for 122 (100%) of the common shares of SQTNZ. The issuance of these shares was equivalent to 95% of the Company's shares issued, after we issue an additional 10,021,224 shares of common stock to those holders of our common stock immediately prior to the acquisition. The Company does not anticipate any further reorganization of its common stock. We are currently preparing filing all necessary reports to the SEC with audited financial statements to resume our status as fully reporting with the SEC, and subsequently apply to trade on the more senior OTCQX exchange or NASDAQ.

     

SQTNZ is a corporation that has no prior business activity other than being the title owner of the exclusive mining and development rights for two High Purity Quartz (HPQ) Silica deposits known as Quartz Hill (represented by leases ML 30235, ML 30236 and ML 30237) and White Springs (represented by leases ML 30238 and ML 30239) located in North Queensland, Australia. Together they contain deposits in excess of 15 million tons of 99% pure High Purity Quartz which is feedstock in high demand in the marketplace to be used in the production of High Purity Quartz Sand (HPQS) based on independent professional reports.

 

HPQS is an essential primary material for the manufacture of: Photo-Voltaic (PV) solar panels; Semiconductors; all High-end Electronic products; Fiber Optical cables; Halogen Lamps; HD and LCD television screens; and Epoxy Mounding Compounds (EMC).

 

CONVERTIBLE NOTES PAYABLE – Note 4

 

At June 30, 2017, convertible notes totaling $70,747 remained outstanding together with accrued interest of $44,003.

 
 
 
 

 

INCOME TAXES – Note 5

 

The Company estimates its annual effective income tax rate in recording its quarterly provision for income taxes in the various jurisdictions in which the Company operates. Statutory tax rate changes and other significant or unusual items are recognized as discrete items in the quarter in which they occur. The Company recorded no income tax expense for the nine-month period ended June 30, 2017 because the Company estimates it will record no income tax expense for the tax year ending September 30, 2017. The Company has a valuation allowance that fully offsets net deferred tax assets.

 

5. RISK FACTORS

 

Investment in our Shares involves a high degree of risk and should be regarded as speculative. You should consider investing in our Shares only if you can afford the loss of your entire investment. Accordingly, you should consider carefully the following factors, in addition to the other information concerning our Company and our business contained in this Memorandum, before purchasing the Shares offered hereby. The following factors are not to be considered a definitive list of all the risks associated with an investment in our Shares.

 

Unanticipated obstacles to execution of business plan

Our proposed plan of operation and prospects will depend largely upon our ability to successfully establish Company's presence in a timely fashion, retain and continue to hire skilled management, technical, marketing and other personnel; and attract and retain significant numbers of quality business partners and corporate clients. There can be no assurance that we will be able to successfully implement our business plan or develop or maintain future business relationships, or that unanticipated expenses, problems or technical difficulties which would result in material delays in implementation will not occur.

 

Competition

The market can be highly competitive. Even though there are high barriers to entry, we expect that it’s possible competition will intensify in the future. We believe that numerous factors, including price, client base, brand name, and general economic trends (particularly unfavorable economic conditions adversely affecting consumer investment), could impact the market. Increased competition could result in significant price competition, which in turn could result in lower revenues, which could materially adversely affect our potential profitability.

 
 
 
 

 

Over Reliance on Management

We depend on our senior management to work effectively as a team, to execute our business strategy and business plan, and to manage employees and consultants. Our success will be dependent on the personal efforts of key personnel. Any of our officers or employees can terminate his or her employment relationship at any time, and the loss of the services of such individuals could have a material adverse effect on our business and prospects..

 

Forward Looking Statements

This Memorandum contains forward-looking statements that are based on our current expectations, assumptions, estimates, and projections about our business, our industry, and the industry of our clients. When used in this Memorandum, the words "expects," anticipates," "estimates," "intends," "believes," and similar expressions are intended to identify forward-looking statements. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected. The cautionary statements made in this Memorandum should be read as being applicable to all related forward-looking statements wherever they appear in this Memorandum.

 

ADDITIONAL INFORMATION

As a prospective investor, you and your professional advisors are invited to review any materials available to us relating to our Company, our plan of operation, our management and financial condition, this Offering and any other matter relating to this Offering. We will afford you and your professional advisors the opportunity to ask questions of, and receive answers from, our officers concerning such matters and to obtain any additional information (to the extent we possess such information and can acquire it without unreasonable expense) necessary to verify the accuracy of any information set forth in the Memorandum. All such information and materials may be requested from Roger May at rm@sqt.solar.com.

 

Investment in the Shares involves significant risks and is suitable only for persons of adequate financial means who have no need for liquidity with respect to this investment and who can bear the economic risk of a complete loss of their investment. The Offering is made in reliance on exemptions from the registration requirements of the Securities Act and applicable state securities laws and regulations.

 

The suitability standards discussed below represent minimum suitability standards for prospective investors. The satisfaction of such standards by a prospective investor does not necessarily mean that the Shares are suitable investment for such prospective investor. Prospective investors are encouraged to consult their personal financial advisors to determine whether an investment in the Shares is appropriate. The Company may reject subscriptions, in whole or in part, in its absolute discretion.

 
 
 
 

 

The Company will require each investor to represent in writing, among other things, that (i) by reason of the investor's business or financial experience, or that of the investor's professional advisor, the investor is capable of evaluating the merits and risks of an investment in the Shares and of protecting its own interests in connection with the transaction (ii) the investor is acquiring the Shares for its own account, for investment only and not with a view toward the resale or distribution thereof, (iii) the investor is aware that the Shares have not been registered under the Securities Act or any state securities laws, (iv) the investor is aware of, and has executed and delivered, the subscription agreement to be entered into in connection with the purchase of the Shares, (v) the investor is aware of the absence of a market for the Shares, and (vi) unless otherwise approved by the Company, such investor meets the suitability requirements set forth below.

 

Except as set forth below, each investor must represent in writing that he or she qualifies as an "accredited investor," as such term is defined in Rule 501(a) of Regulation D under the Securities Act, and must demonstrate the basis for such qualification. Such qualification will be outlined in detail in the Subscription Agreement.

 

 

Solar Quartz Technologies Corp.

 

__________________________________________

Offeree

 

 

 

 

EX-99.1 4 vnge_ex991.htm VANGUARD Q 3 FY 17 10-Q JUN 30, 2017 vnge_ex991.htm

EXHIBIT 99.1

 

DRAFT

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

x Quarterly Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934

 

For the quarterly period ended June 30, 2017

 

o Transition Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934

 

For the transition period from __________ to __________

 

Commission File Number: None

 

VANGUARD ENERGY CORPORATION

(Exact name of registrant as specified in its charter)

 

COLORADO

27-2888719

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

 

21 Waterway Ave., Ste. 300

The Woodlands, Texas 77380

(Address of principal executive offices, including Zip Code)

 

(281) 362-2725

(Issuer’s telephone number, including area code)

 

____________________________________________

(Former name or former address if changed since last report)

 

Check whether the issuer (1) filed all reports required to be filed by section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ¨ No x

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” “non-accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

¨

Accelerated filer

¨

Non-accelerated filer

¨

Smaller reporting company

x

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

 

As of September 30, 2017, the registrant had 195,004,639 outstanding shares of common stock. It was also contractually committed to issue an additional 10,021,340 shares of common stock to certain holders or their successors of its common stock prior to July 1, 2017.

  

 
1
 
 

 

DRAFT

 

FORWARD LOOKING STATEMENTS

 

The information contained in this Form 10-Q contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve risks and uncertainties, including among other things, statements regarding our capital needs, business strategy and expectations. Any statement which does not contain a historical fact may be deemed to be a forward-looking statement. In some cases, you can identify forward-looking statements by terminology such as “may”, “will”, “should”, “expect”, “plan”, “intend”, “anticipate”, “believe”, “estimate”, “predict”, “potential” or “continue”, the negative of such terms or other comparable terminology. In evaluating forward looking statements, you should consider various factors outlined in our Form 10-K report for the year ended September 30, 2016, filed with the U.S. Securities Exchange Commission (“SEC”) and, from time to time, in other reports we file with the SEC. These factors may cause our actual results to differ materially from any forward-looking statement. We disclaim any obligation to publicly update these statements, or disclose any difference between our actual results and those reflected in these statements.

 
 
2
 
 

 

DRAFT

 

VANGUARD ENERGY CORPORATION

UNAUDITED CONSOLIDATED BALANCE SHEETS

 

 

 

June 30,

 

 

September 30,

 

 

 

2017

 

 

2016

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

ASSETS

Current assets

 

 

 

 

 

 

Cash and cash equivalents

 

$ 66

 

 

$ 35

 

Other receivables

 

 

-

 

 

 

966

 

Total current assets

 

 

66

 

 

 

1,001

 

 

 

 

 

 

 

 

 

 

Debt issuance costs

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Total assets

 

$ 66

 

 

$ 1,001

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ DEFICIT

Current liabilities

 

 

 

 

 

 

 

 

Accounts payable

 

$ 62,772

 

 

$ 51,212

 

Accrued interest payable

 

 

44,003

 

 

 

36,044

 

Accrued liabilities

 

 

23,885

 

 

 

17,511

 

Short term notes payable

 

 

85,000

 

 

 

85,000

 

Other liabilities

 

 

92

 

 

 

92

 

Current portion of notes payable, net of discount $- and $71,754

 

 

70,747

 

 

 

70,747

 

Total current liabilities

 

 

286,500

 

 

 

260,606

 

 

 

 

 

 

 

 

 

 

Stockholders’ deficit

 

 

 

 

 

 

 

 

Preferred stock, $0.00001 par value; 5,000,000 shares authorized; none issued or outstanding

 

 

-

 

 

 

-

 

Common stock, $0.00001 par value; 100,000,000 and 50,000,000 shares authorized; 1,002,134 and 979,109 shares issued and outstanding

 

 

1,002

 

 

 

1,002

 

Additional paid-in capital

 

 

6,318,920

 

 

 

6,318,920

 

Accumulated deficit

 

 

(6,606,356 )

 

 

(6,579,527 )

 

 

 

 

 

 

 

 

 

Total stockholders’ deficit

 

 

(286,434 )

 

 

(259,605 )

 

 

 

 

 

 

 

 

 

Total liabilities and stockholders’ deficit

 

$ 66

 

 

$ 1,001

 

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

 
 
3
 
 

 

DRAFT

 

VANGUARD ENERGY CORPORATION

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

 

 

 

Three Months Ended June 30

 

 

Nine Months Ended June 30

 

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

 

 

(Unaudited)

 

 

(Unaudited)

 

 

(Unaudited)

 

 

(Unaudited)

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

Sales

 

$ -

 

 

$ -

 

 

$ -

 

 

$ -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs and expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative

 

 

3,788

 

 

 

11,005

 

 

 

12,522

 

 

 

27,549

 

Total costs and expenses

 

 

3,788

 

 

 

11,005

 

 

 

12,522

 

 

 

27,549

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss from operations

 

 

(3,788 )

 

 

(11,005 )

 

 

(12,522 )

 

 

(27,549 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income

 

 

27

 

 

 

-

 

 

 

27

 

 

 

-

 

Interest expense

 

 

(2,653 )

 

 

(5,510 )

 

 

(7,959 )

 

 

(9,755 )

Other interest costs

 

 

(2,125 )

 

 

-

 

 

 

(6,375 )

 

 

(4,948 )

Gain on debt extinguishment

 

 

-

 

 

 

-

 

 

 

-

 

 

 

91,102

 

Total other income (expense)

 

 

(4,751 )

 

 

(5,510 )

 

 

(14,307 )

 

 

76,399

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income (Loss) before income taxes

 

 

(8,539 )

 

 

(5,500 )

 

 

(26,829 )

 

 

48,850

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income (Loss)

 

$ (8,539 )

 

$ (16,515 )

 

$ (26,829 )

 

$ 48,850

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (Loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

$ (0.01 )

 

$ (0.02 )

 

$ (0.03 )

 

$ 0.05

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding

 

 

1,002,134

 

 

 

1,002,134

 

 

 

1,002,134

 

 

 

1,002,134

 

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

 

 
4
 
 

 

DRAFT

 

VANGUARD ENERGY CORPORATION

UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS

 

 

 

Nine Month ended June 30,

 

 

 

2017

 

 

2016

 

 

 

(Unaudited)

 

 

(Unaudited)

 

Cash flows from operating activities

 

 

 

 

 

 

Net Income (loss)

 

$ (26,829 )

 

$ 48,850

 

Adjustments to reconcile net income/(loss) to net cash from operating activities:

 

 

 

 

 

 

 

 

Gain on debt extinguishment

 

 

-

 

 

 

(76,190 )

Change in operating assets and liabilities:

 

 

 

 

 

 

 

 

Other assets

 

 

966

 

 

 

(966 )

Accounts payable

 

 

11,560

 

 

 

(6,217 )

Accrued interest payable

 

 

7,959

 

 

 

(5,180 )

Accrued liabilities

 

 

6,374

 

 

 

4,923

 

Other liabilities

 

 

0

 

 

 

(183 )

Net cash from operating activities

 

 

31

 

 

 

(34,963 )

 

 

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

 

 

 

Issuance of common stock

 

 

-

 

 

 

23

 

Issuance of short term note payable

 

 

-

 

 

 

35,000

 

Net cash from financing activities

 

 

-

 

 

 

35,023

 

 

 

 

 

 

 

 

 

 

Net change in cash and cash equivalents

 

 

31

 

 

 

60

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

 

 

 

 

 

 

Beginning of period

 

 

35

 

 

 

5

 

 

 

 

 

 

 

 

 

 

End of period

 

$ 66

 

 

$ 65

 

 

Supplemental cash flow information

 

 

 

 

 

Three Month ended March 31,

 

 

 

2016

 

 

2015

 

 

 

(Unaudited)

 

 

(Unaudited)

 

 

 

 

 

 

 

 

Noncash investing and financing activities:

 

 

 

 

 

 

Issuance of shares for settlement of debt

 

 

-

 

 

$ 23,025

 

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

 
 
5
 
 

 

DRAFT

 

VANGUARD ENERGY CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

 

NOTE 1 – BASIS OF PRESENTATION

 

These unaudited consolidated financial statements of Vanguard Energy Corporation (Vanguard or the Company) have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). In the opinion of management, these financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the results for the interim periods. Certain information, accounting policies and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been omitted pursuant to Securities and Exchange Commission (SEC) rules and regulations. These financial statements should be read along with Vanguard’s audited financial statements as of September 30, 2016.

 

Going Concern – The Company has incurred cumulative net losses since its inception and will require capital for future operating activities to take place. The Company’s ability to raise new funds through the future issuances of debt or common stock is unknown. The obtainment of additional financing, the successful development of a plan of operations, and its transition, ultimately, to the attainment of profitable operations are necessary for the Company to continue operations. The ability to successfully resolve these factors raise substantial doubt about the Company’s ability to continue as a going concern.

 

Future issuances of the Company’s equity or debt securities will be required in order for the Company to finance operations and continue as a going concern. The financial statements do not include any adjustments that may result from the outcome of these aforementioned uncertainties.

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

As of June 30, 2017, Vanguard’s significant accounting policies were consistent with those discussed in the audited financial statements as of September 30, 2016.

 

Earnings (Loss) Per ShareBasic earnings (loss) per share have been calculated based upon the weighted-average number of common shares outstanding. Diluted earnings per share have been calculated based upon the weighted-average number of common and potential common shares. The calculation of diluted weighted-average shares outstanding for the three-month periods ended June 30, 2017 and 2016 excludes 5,374 and 62,974 shares, respectively, issuable pursuant to outstanding warrants, stock options and debt conversion features because their effect is anti-dilutive.

 

NOTE 3 – SUBSEQUENT EVENT

   

On July 1, 2017 the company acquired all of the shares of Solar Quartz Technologies Limited, a company incorporated in New Zealand (“SQTNZ”). These shares were purchased from Solar Quartz Technologies, Inc. (“SQTI”). The agreed value of that company’s assets is US$530 million. We subsequently changed our name to Solar Quartz Technologies Corporation in Colorado and with FINRA, and have also been cleared by FINRA to use the new trading symbol SQTX. In July 2017 the Company issued 213,402,755 new shares of common stock to SQTI in exchange for 122 (100%) of the common shares of SQTNZ. The issuance of these shares was equivalent to 95% of the Company’s shares issued, after we issue an additional 10,021,224 shares of common stock to those holders of our common stock immediately prior to the acquisition. The Company does not anticipate any further reorganization of its common stock. We are currently preparing filing all necessary reports to the SEC with audited financial statements to resume our status as fully reporting with the SEC, and subsequently apply to trade on the more senior OTCQX exchange or NASDAQ.

    

 
6
 
 

 

DRAFT

 

VANGUARD ENERGY CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

  

SQTNZ is a corporation that has no prior business activity other than being the title owner of the exclusive mining and development rights for two High Purity Quartz (HPQ) Silica deposits known as Quartz Hill (represented by leases ML 30235, ML 30236 and ML 30237) and White Springs (represented by leases ML 30238 and ML 30239) located in North Queensland, Australia. Together they contain deposits in excess of 15 million tons of 99% pure High Purity Quartz which is feedstock in high demand in the marketplace to be used in the production of High Purity Quartz Sand (HPQS) based on independent professional reports.

HPQS is an essential primary material for the manufacture of: Photo-Voltaic (PV) solar panels; Semiconductors; all High-end Electronic products; Fiber Optical cables; Halogen Lamps; HD and LCD television screens; and Epoxy Mounding Compounds (EMC).

 

NOTE 4 – CONVERTIBLE NOTES PAYABLE

 

At June 30, 2017, convertible notes totaling $70,747 remained outstanding together with accrued interest of $44,003.

 

NOTE 5 – INCOME TAXES

 

The Company estimates its annual effective income tax rate in recording its quarterly provision for income taxes in the various jurisdictions in which the Company operates. Statutory tax rate changes and other significant or unusual items are recognized as discrete items in the quarter in which they occur. The Company recorded no income tax expense for the nine-month period ended June 30, 2017 because the Company estimates it will record no income tax expense for the tax year ending September 30, 2017. The Company has a valuation allowance that fully offsets net deferred tax assets.

 

* * * * *

 

 
7
 
 

 

DRAFT

 

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND PLAN OF OPERATION

   

In July 2017 we acquired Solar Quartz Technologies Limited, a New Zealand corporation, as described in Note 3 to the Financial Statements above. We are now seeking new financings to meet development and general operating obligations and to justify a market for our stock. Absent achieving such a transaction in the near future, our viability is in doubt. As of September 30, 2017, the Company has not been successful in meeting this goal; however, work is underway to secure such financing and we believe that such financing of the Company is possible in the near future.

 

ITEM 4. CONTROLS AND PROCEDURES.

 

(a) We maintain a system of controls and procedures designed to ensure that information required to be disclosed in reports filed or submitted under the Securities Exchange Act of 1934, as amended (“1934 Act”), is recorded, processed, summarized and reported within time periods specified in the SEC’s rules and forms and to ensure that information required to be disclosed by us in the reports that we file or submit under the 1934 Act is accumulated and communicated to our management, including our Principal Executive and Financial Officer, as appropriate to allow timely decisions regarding required disclosure. As of March 31, 2016, our Principal Executive and Financial Officer evaluated the effectiveness of the design and operation of our disclosure controls and procedures. Based on that evaluation, our Principal Executive and Financial Officer concluded that our disclosure controls and procedures were effective.

 

(b) Changes in Internal Controls. There were no changes in our internal control over financial reporting during the six-month period ended March 31, 2016 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

 
8
 
 

 

DRAFT

 

PART II

 

ITEM 6. EXHIBITS

 

Exhibits

 

 

 

 

 

31.1

 

Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 

31.2

 

Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 

32

 

Certification pursuant to Section 906 of the Sarbanes-Oxley Act.

 

 
9
 
 

 

DRAFT

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

VANGUARD ENERGY CORPORATION

       
Date: ______________ By:  /s/ Warren M. Dillard

 

 

Warren M. Dillard,

 
   

Chief Executive, Financial and Accounting Officer

 

 
10
 
 

  

DRAFT

 

EXHIBIT 31.1

 

CERTIFICATIONS

  

I, Warren M. Dillard, certify that;

 

1. I have reviewed this quarterly report on Form 10-Q of Vanguard Energy Corporation;

 

 

2. Based on my knowledge, this report, does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by the report;

 

 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

 

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

 

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

 

 

 

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

 

 

 

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

 

 

 

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

 

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

 

 

 

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: ______________

By:

/s/ Warren M. Dillard

Warren M. Dillard,

Principal Executive Officer

 

 
11
 
 

 

DRAFT

 

EXHIBIT 31.2

 

CERTIFICATIONS

 

I, Warren M. Dillard, certify that;

 

1. I have reviewed this quarterly report on Form 10-Q of Vanguard Energy Corporation;

 

 

2. Based on my knowledge, this report, does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by the report;

 

 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

 

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

 

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

 

 

 

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

 

 

 

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

 

 

 

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

 

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

 

 

 

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

 

Date: _____________

By:

/s/ Warren M. Dillard

Warren M. Dillard,

Principal Financial Officer

 

 
12
 
 

 

DRAFT

 

EXHIBIT 32

 

In connection with the Quarterly Report of Vanguard Energy Corporation (the “Company”) on Form 10-Q for the period ending JUNE 30, 2017 as filed with the Securities and Exchange Commission (the “Report”), Warren Dillard, the Principal Executive and Financial Officer of the Company, certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of his knowledge:

 

 

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

 

 

 

(2) The information contained in the Report fairly presents, in all material respects the financial condition and results of operations of the Company.

 

 

Date: ____________

By:

/s/ Warren M. Dillard

Warren M. Dillard,

Principal Executive and Financial Officer

 

Vanguard March 31, 2016 10-Q 9-22-17

 

 

13

 

EX-99.2 5 vnge_ex992.htm VANGUARD Q 2 FY 17 10-Q MAR 31, 2017 vnge_ex992.htm

EXHIBIT 99.2 

DRAFT

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

x Quarterly Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934

 

For the quarterly period ended March 31, 2017

 

o Transition Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934

 

For the transition period from __________ to __________

 

Commission File Number: None

 

VANGUARD ENERGY CORPORATION

(Exact name of registrant as specified in its charter)

 

COLORADO

 

27-2888719

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

 

21 Waterway Ave., Ste. 300

The Woodlands, Texas 77380

(Address of principal executive offices, including Zip Code)

 

(281) 362-2725

(Issuer’s telephone number, including area code)

 

____________________________________________

(Former name or former address if changed since last report)

 

Check whether the issuer (1) filed all reports required to be filed by section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes o No x

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No x

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” “non-accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

¨

Accelerated filer

¨

Non-accelerated filer

¨

Smaller reporting company

x

     

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

As of September 30, 2017, the registrant had 195,004,639 outstanding shares of common stock. It was also contractually committed to issue an additional 10,021,340 shares of common stock to certain holders or their successors of its common stock prior to July 1, 2017.

 

 
1
 
 

 

DRAFT

 

FORWARD LOOKING STATEMENTS

 

The information contained in this Form 10-Q contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve risks and uncertainties, including among other things, statements regarding our capital needs, business strategy and expectations. Any statement which does not contain a historical fact may be deemed to be a forward-looking statement. In some cases, you can identify forward-looking statements by terminology such as "may", "will", "should", "expect", "plan", "intend", "anticipate", "believe", "estimate", "predict", "potential" or "continue", the negative of such terms or other comparable terminology. In evaluating forward looking statements, you should consider various factors outlined in our Form 10-K report for the year ended September 30, 2016, filed with the U.S. Securities Exchange Commission (“SEC”) and, from time to time, in other reports we file with the SEC. These factors may cause our actual results to differ materially from any forward-looking statement. We disclaim any obligation to publicly update these statements, or disclose any difference between our actual results and those reflected in these statements.

 

 
2
 
 

 

DRAFT

 

VANGUARD ENERGY CORPORATION

UNAUDITED CONSOLIDATED BALANCE SHEETS

 

 

 

March 31

 

 

March 31

 

 

2017

 

 

2016

 

 

 

(Unaudited)

 

 

(Unaudited)

 

ASSETS

Current assets

 

 

 

 

 

 

Cash and cash equivalents

 

$ 68

 

 

$ 9,975

 

Other assets

 

 

-

 

 

 

-

 

Total current assets

 

 

68

 

 

 

9,975

 

 

 

 

 

 

 

 

 

 

Debt issuance costs

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Total assets

 

$ 68

 

 

$ 9,975

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ DEFICIT

 

Current liabilities

 

 

 

 

 

 

 

 

Accounts payable

 

$ 59,013

 

 

$ 19,983

 

Accrued interest payable

 

 

41,350

 

 

 

30,766

 

Accrued liabilities

 

 

21,761

 

 

 

13,290

 

Short term notes payable

 

 

85,000

 

 

 

85,000

 

Other liabilities

 

 

92

 

 

 

300

 

Current portion of notes payable, net of discount $- and $71,754

 

 

70,747

 

 

 

70,747

 

Total current liabilities

 

 

277,963

 

 

 

220,086

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Stockholders' deficit

 

 

 

 

 

 

 

 

Preferred stock, $0.00001 par value; 5,000,000 shares authorized; none issued or outstanding

 

 

-

 

 

 

-

 

Common stock, $0.00001 par value; 100,000,000 and 50,000,000 shares authorized; 1,002,134 and 1002,134 shares issued and outstanding

 

 

1,002

 

 

 

1,002

 

Additional paid-in capital

 

 

6,318,920

 

 

 

6,318,920

 

Accumulated deficit

 

 

(6,597,817 )

 

 

(6,530,033 )

 

 

 

 

 

 

 

 

 

Total stockholders' deficit

 

 

(277,895 )

 

 

(210,111 )

 

 

 

 

 

 

 

 

 

Total liabilities and stockholders' deficit

 

$ 68

 

 

$ 9,975

 

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

 

 
3
 
 

 

DRAFT

 

VANGUARD ENERGY CORPORATION

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

 

 

 

Three Months Ended March 31

 

 

Six Months Ended March 31

 

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

 

 

(Unaudited)

 

 

(Unaudited)

 

 

(Unaudited)

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

Oil and gas sales

 

$ -

 

 

$ -

 

 

$ -

 

 

$ -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs and expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lease operating expense

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Production taxes

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Depreciation, depletion and amortization

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Impairment of O&G properties

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Asset retirement obligation accretion

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

General and administrative

 

 

4,014

 

 

 

20,563

 

 

 

8,734

 

 

 

24,795

 

Total costs and expenses

 

 

4,014

 

 

 

20,563

 

 

 

8,734

 

 

 

24,795

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss from operations

 

 

(4,014 )

 

 

(20,563 )

 

 

(8,734 )

 

 

(24,795 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Interest income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Interest expense

 

 

(2,653 )

 

 

(2,854 )

 

 

(5,306 )

 

 

(7,131 )

Other interest costs

 

 

(2,125 )

 

 

(1,603 )

 

 

(4,250 )

 

 

(2,852 )

Gain on debt extinguishment

 

 

-

 

 

 

43,382

 

 

 

-

 

 

 

91,102

 

Total other income (expense)

 

 

(4,778 )

 

 

38,925

 

 

 

(9,556 )

 

 

81,119

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income (Loss) before income taxes

 

 

(8,792 )

 

 

18,362

 

 

 

(18,290 )

 

 

56,324

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income (Loss)

 

$ (8,792 )

 

$ 18,362

 

 

$ (18,290 )

 

$ 56,324

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (Loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

$ (0.01 )

 

$ 0.02

 

 

$ (0.02 )

 

$ 0.06

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding

 

 

1,002,134

 

 

 

1,002,134

 

 

 

1,002,134

 

 

 

1,002,134

 

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

 

 
4
 
 

 

DRAFT

 

VANGUARD ENERGY CORPORATION

UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS

  

 

 

Six Month ended March 31,

 

 

 

2017

 

 

2016

 

 

 

(Unaudited)

 

 

(Unaudited)

 

Cash flows from operating activities

 

 

 

 

 

 

Net Income (loss)

 

$ (67,784 )

 

$ 56,324

 

Adjustments to reconcile net income/(loss) to net cash from operating activities:

 

 

 

 

 

 

 

 

Gain on debt extinguishment

 

 

-

 

 

 

(76,190 )

Change in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

 

39,030

 

 

 

(234 )

Accrued interest payable

 

 

10,584

 

 

 

(7,805 )

Accrued liabilities

 

 

8,471

 

 

 

2,827

 

Other liabilities

 

 

(208 )

 

 

25

 

Net cash from operating activities

 

 

(9,907 )

 

 

(25,053 )

 

 

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

 

 

 

Capital expenditures on oil and gas properties

 

 

-

 

 

 

-

 

Net cash from investing activities

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

 

 

 

Issuance of common stock

 

 

-

 

 

 

23

 

Issuance of short term note payable

 

 

-

 

 

 

35,000

 

Net cash from financing activities

 

 

-

 

 

 

35,023

 

 

 

 

 

 

 

 

 

 

Net change in cash and cash equivalents

 

 

(9,907 )

 

 

9,970

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

 

 

 

 

 

 

Beginning of period

 

 

9,975

 

 

 

5

 

End of period

 

$ 68

 

 

$ 9,975

 

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

 

 
5
 
 

 

DRAFT

 

VANGUARD ENERGY CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 

NOTE 1 – BASIS OF PRESENTATION

 

These unaudited consolidated financial statements of Vanguard Energy Corporation (Vanguard or the Company) have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). In the opinion of management, these financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the results for the interim periods. Certain information, accounting policies and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been omitted pursuant to Securities and Exchange Commission (SEC) rules and regulations. These financial statements should be read along with Vanguard’s audited financial statements as of September 30, 2016.

 

Going Concern – The Company has incurred cumulative net losses since its inception and will require capital for future operating activities to take place. The Company's ability to raise new funds through the future issuances of debt or common stock is unknown. The obtainment of additional financing, the successful development of a plan of operations, and its transition, ultimately, to the attainment of profitable operations are necessary for the Company to continue operations. The ability to successfully resolve these factors raise substantial doubt about the Company's ability to continue as a going concern.

 

Future issuances of the Company's equity or debt securities will be required in order for the Company to finance operations and continue as a going concern. The financial statements do not include any adjustments that may result from the outcome of these aforementioned uncertainties.

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

As of March 31, 2017, Vanguard’s significant accounting policies were consistent with those discussed in the audited financial statements as of September 30, 2016.

 

Earnings (Loss) Per ShareBasic earnings (loss) per share have been calculated based upon the weighted-average number of common shares outstanding. Diluted earnings per share have been calculated based upon the weighted-average number of common and potential common shares. The calculation of diluted weighted-average shares outstanding for the six-month periods ended March 31, 2017 and 2016 excludes 5,374 and 62,974 shares, respectively, issuable pursuant to outstanding warrants, stock options and debt conversion features because their effect is anti-dilutive.

 

NOTE 3 – SUBSEQUENT EVENT

 

On July 1, 2017 the company acquired all of the shares of Solar Quartz Technologies Limited, a company incorporated in New Zealand (“SQTNZ”). These shares were purchased from Solar Quartz Technologies, Inc. (“SQTI”). The agreed value of that company’s assets is US$530 million. We subsequently changed our name to Solar Quartz Technologies Corporation in Colorado and with FINRA, and have also been cleared by FINRA to use the new trading symbol SQTX. In July 2017 the Company issued 213,402,755 new shares of common stock to SQTI in exchange for 122 (100%) of the common shares of SQTNZ. The issuance of these shares was equivalent to 95% of the Company's shares issued, after we issue an additional 10,021,224 shares of common stock to those holders of our common stock immediately prior to the acquisition. The Company does not anticipate any further reorganization of its common stock. We are currently preparing filing all necessary reports to the SEC with audited financial statements to resume our status as fully reporting with the SEC, and subsequently apply to trade on the more senior OTCQX exchange or NASDAQ.

 

 
6
 
 

 

DRAFT

 

VANGUARD ENERGY CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 

SQTNZ is a corporation that has no prior business activity other than being the title owner of the exclusive mining and development rights for two High Purity Quartz (HPQ) Silica deposits known as Quartz Hill (represented by leases ML 30235, ML 30236 and ML 30237) and White Springs (represented by leases ML 30238 and ML 30239) located in North Queensland, Australia. Together they contain deposits in excess of 15 million tons of 99% pure High Purity Quartz which is feedstock in high demand in the marketplace to be used in the production of High Purity Quartz Sand (HPQS) based on independent professional reports.

HPQS is an essential primary material for the manufacture of: Photo-Voltaic (PV) solar panels; Semiconductors; all High-end Electronic products; Fiber Optical cables; Halogen Lamps; HD and LCD television screens; and Epoxy Mounding Compounds (EMC).

 

NOTE 4 – CONVERTIBLE NOTES PAYABLE

 

At March 31, 2017, convertible notes totaling $70,747 remained outstanding together with accrued interest of $41,350.

 

NOTE 5 – INCOME TAXES

 

The Company estimates its annual effective income tax rate in recording its quarterly provision for income taxes in the various jurisdictions in which the Company operates. Statutory tax rate changes and other significant or unusual items are recognized as discrete items in the quarter in which they occur. The Company recorded no income tax expense for the six-month period ended March 31, 2017 because the Company estimates it will record no income tax expense for the tax year ending September 30, 2017. The Company has a valuation allowance that fully offsets net deferred tax assets.

 

* * * * *

 

 
7
 
 

 

DRAFT

 

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND PLAN OF OPERATION

 

In July 2017 we acquired Solar Quartz Technologies Limited, a New Zealand corporation, as described in Note 3 to the Financial Statements above. We are now seeking new financings to meet development and general operating obligations and to justify a market for our stock. Absent achieving such a transaction in the near future, our viability is in doubt. As of September 30, 2017, the Company has not been successful in meeting this goal; however, work is underway to secure such financing and we believe that such financing of the Company is possible in the near future.

 

ITEM 4. CONTROLS AND PROCEDURES.

 

(a) We maintain a system of controls and procedures designed to ensure that information required to be disclosed in reports filed or submitted under the Securities Exchange Act of 1934, as amended (“1934 Act”), is recorded, processed, summarized and reported within time periods specified in the SEC's rules and forms and to ensure that information required to be disclosed by us in the reports that we file or submit under the 1934 Act is accumulated and communicated to our management, including our Principal Executive and Financial Officer, as appropriate to allow timely decisions regarding required disclosure. As of March 31, 2016, our Principal Executive and Financial Officer evaluated the effectiveness of the design and operation of our disclosure controls and procedures. Based on that evaluation, our Principal Executive and Financial Officer concluded that our disclosure controls and procedures were effective.

 

(b) Changes in Internal Controls. There were no changes in our internal control over financial reporting during the six-month period ended March 31, 2016 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

 
8
 
 

 

DRAFT

 

PART II

 

ITEM 6. EXHIBITS

 

Exhibits

 

 

 

 

 

31.1

 

Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 

31.2

 

Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 

32

 

Certification pursuant to Section 906 of the Sarbanes-Oxley Act.

 

 
9
 
 

 

DRAFT

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

VANGUARD ENERGY CORPORATION

       
Date: ______________ By: /s/ Warren M. Dillard

 

 

Warren M. Dillard

 
   

Chief Executive, Financial and

 
    Accounting Officer  

 
10
 
 

 

DRAFT

 

EXHIBIT 31.1

 

CERTIFICATIONS

 

I, Warren M. Dillard, certify that;

 

1. I have reviewed this quarterly report on Form 10-Q of Vanguard Energy Corporation;

 

 

2. Based on my knowledge, this report, does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by the report;

 

 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

 

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

 

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

 

 

 

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

 

 

 

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

 

 

 

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

 

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

 

 

 

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

       

Date: ______________

By:

/s/ Warren M. Dillard

 

 

Warren M. Dillard,

 
   

Principal Executive Officer

 

 
11
 
 

 

DRAFT

 

EXHIBIT 31.2

 

CERTIFICATIONS

 

I, Warren M. Dillard, certify that;

 

1. I have reviewed this quarterly report on Form 10-Q of Vanguard Energy Corporation;

 

 

2. Based on my knowledge, this report, does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by the report;

 

 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

 

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

 

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

 

 

 

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

 

 

 

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

 

 

 

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

 

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

 

 

 

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

       

Date: _____________

By:

/s/ Warren M. Dillard

 

 

Warren M. Dillard,

 
   

Principal Financial Officer

 

 
12
 
 

 

DRAFT

 

EXHIBIT 32

 

In connection with the Quarterly Report of Vanguard Energy Corporation (the “Company”) on Form 10-Q for the period ending December 31, 2015 as filed with the Securities and Exchange Commission (the “Report”), Warren Dillard, the Principal Executive and Financial Officer of the Company, certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of his knowledge:

 

 

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

 

 

 

(2) The information contained in the Report fairly presents, in all material respects the financial condition and results of operations of the Company.

 

Date: ____________

By:

/s/ Warren M. Dillard

 

Warren M. Dillard,

 

Principal Executive and Financial Officer

 

Vanguard March 31, 2016 10-Q 9-22-17

 

13

 

EX-99.3 6 vnge_ex993.htm VANGUARD Q 1 FY 17 10-Q DEC 31, 2016 vnge_ex993.htm

EXHIBIT 99.3

 

DRAFT

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

x Quarterly Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934

 

For the quarterly period ended December 31, 2016

 

o Transition Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934

 

For the transition period from __________ to __________

 

Commission File Number: None

 

VANGUARD ENERGY CORPORATION

(Exact name of registrant as specified in its charter)

 

COLORADO

27-2888719

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

 

21 Waterway Ave., Ste. 300

The Woodlands, Texas 77380

(Address of principal executive offices, including Zip Code)

 

(281) 362-2725

(Issuer’s telephone number, including area code)

 

____________________________________________

(Former name or former address if changed since last report)

 

Check whether the issuer (1) filed all reports required to be filed by section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes o No x

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No x

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” “non-accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

¨

Accelerated filer

¨

Non-accelerated filer

¨

Smaller reporting company

x

       

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

  

As of September 30, 2017, the registrant had 195,004,639 outstanding shares of common stock. It was also contractually committed to issue an additional 10,021,340 shares of common stock to certain holders or their successors of its common stock prior to July 1, 2017.

 
1
 
 

    

DRAFT

 

FORWARD LOOKING STATEMENTS

 

The information contained in this Form 10-Q contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve risks and uncertainties, including among other things, statements regarding our capital needs, business strategy and expectations. Any statement which does not contain a historical fact may be deemed to be a forward-looking statement. In some cases, you can identify forward-looking statements by terminology such as "may", "will", "should", "expect", "plan", "intend", "anticipate", "believe", "estimate", "predict", "potential" or "continue", the negative of such terms or other comparable terminology. In evaluating forward looking statements, you should consider various factors outlined in our Form 10-K report for the year ended September 30, 2016, filed with the U.S. Securities Exchange Commission (“SEC”) and, from time to time, in other reports we file with the SEC. These factors may cause our actual results to differ materially from any forward-looking statement. We disclaim any obligation to publicly update these statements, or disclose any difference between our actual results and those reflected in these statements.

 

 
2
 
 

 

DRAFT

 

VANGUARD ENERGY CORPORATION

UNAUDITED CONSOLIDATED BALANCE SHEETS

 

 

 

December 31,

 

 

September 30,

 

 

2016

 

 

2016

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

Cash and cash equivalents

 

$ 98

 

 

$ 35

 

Other receivables

 

 

-

 

 

 

966

 

Total current assets

 

 

98

 

 

 

1,001

 

 

 

 

 

 

 

 

 

 

Debt issuance costs

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Total assets

 

$ 98

 

 

$ 1,001

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ DEFICIT

Current liabilities

 

 

 

 

 

 

 

 

Accounts payable

 

$ 55,030

 

 

$ 51,212

 

Accrued interest payable

 

 

38,696

 

 

 

36,044

 

Accrued liabilities

 

 

19,635

 

 

 

17,511

 

Short term notes payable

 

 

85,000

 

 

 

85,000

 

Other liabilities

 

 

92

 

 

 

92

 

Current portion of notes payable, net of discount $- and $71,754

 

 

70,747

 

 

 

70,747

 

Total current liabilities

 

 

269,201

 

 

 

260,606

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Stockholders' deficit

 

 

 

 

 

 

 

 

Preferred stock, $0.00001 par value; 5,000,000 shares authorized; none issued or outstanding

 

 

-

 

 

 

-

 

Common stock, $0.00001 par value; 100,000,000 and 50,000,000 shares authorized; 1,002,134 and 991,119 shares issued and outstanding

 

 

1,002

 

 

 

1,002

 

Additional paid-in capital

 

 

6,318,920

 

 

 

6,318,920

 

Accumulated deficit

 

 

(6,589,025 )

 

 

(6,579,527 )

 

 

 

 

 

 

 

 

 

Total stockholders' deficit

 

 

(269,103 )

 

 

(259,605 )

 

 

 

 

 

 

 

 

 

Total liabilities and stockholders' deficit

 

$ 98

 

 

$ 1,001

 

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

 

 
3
 
 

 

DRAFT

 

VANGUARD ENERGY CORPORATION

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

 

 

 

Three Months Ended

December 31

 

 

 

2016

 

 

2015

 

 

 

(Unaudited)

 

 

(Unaudited)

 

Revenues

 

 

 

 

 

 

Oil and gas sales

 

$ -

 

 

$ -

 

 

 

 

 

 

 

 

 

 

Costs and expenses

 

 

 

 

 

 

 

 

Lease operating expense

 

 

-

 

 

 

-

 

Production taxes

 

 

-

 

 

 

-

 

Depreciation, depletion and amortization

 

 

-

 

 

 

-

 

Impairment of O&G properties

 

 

-

 

 

 

-

 

Asset retirement obligation accretion

 

 

-

 

 

 

-

 

General and administrative

 

 

4,720

 

 

 

4,232

 

Total costs and expenses

 

 

4,720

 

 

 

4,232

 

 

 

 

 

 

 

 

 

 

Loss from operations

 

 

(4,720 )

 

 

(4,232 )

 

 

 

 

 

 

 

 

 

Other income (expense)

 

 

 

 

 

 

 

 

Other income

 

 

-

 

 

 

-

 

Interest income

 

 

-

 

 

 

-

 

Interest expense

 

 

(2,653 )

 

 

(4,276 )

Other interest costs

 

 

(2,125 )

 

 

(1,250.00 )

Gain on debt extinguishment

 

 

-

 

 

 

47,720.00

 

Total other income (expense)

 

 

(4,778 )

 

 

42,194

 

 

 

 

 

 

 

 

 

 

Net Income (Loss) before income taxes

 

 

(9,498 )

 

 

37,962

 

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Net Income (Loss)

 

$ (9,498 )

 

$ 37,962

 

 

 

 

 

 

 

 

 

 

Income (Loss) per share:

 

 

 

 

 

 

 

 

Basic and diluted

 

$ (0.01 )

 

$ 0.04

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding

 

 

1,002,134

 

 

 

991,119

 

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

 

 
4
 
 

  

DRAFT

 

VANGUARD ENERGY CORPORATION

UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS

  

 

 

Three Months Ended

December 31,

 

 

 

2016

 

 

2015

 

 

 

(Unaudited)

 

 

(Unaudited)

 

Cash flows from operating activities

 

 

 

 

 

 

Net Income (loss)

 

$ (9,498 )

 

$ 37,962

 

Adjustments to reconcile net income/(loss) to net cash from operating activities:

 

 

 

 

 

 

 

 

Gain on debt extinguishment

 

 

-

 

 

 

(39,909 )

Change in operating assets and liabilities:

 

 

 

 

 

 

 

 

Other assets

 

 

966

 

 

 

-

 

Accounts payable

 

 

3,818

 

 

 

3,586

 

Accrued interest payable

 

 

2,652

 

 

 

(3,547 )

Accrued liabilities

 

 

2,124

 

 

 

1,250

 

Other liabilities

 

 

-

 

 

 

410

 

Net cash from operating activities

 

 

63

 

 

 

(248 )

 

 

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

 

 

 

Capital expenditures on oil and gas properties

 

 

-

 

 

 

-

 

Net cash from investing activities

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

 

 

 

Issuance of common stock

 

 

-

 

 

 

12

 

Net cash from financing activities

 

 

-

 

 

 

12

 

Net change in cash and cash equivalents

 

 

63

 

 

 

(236 )

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

 

 

 

 

 

 

Beginning of period

 

 

35

 

 

 

5

 

 

 

 

 

 

 

 

 

 

End of period

 

$ 98

 

 

$ (231 )

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

 

 
5
 
 

 

DRAFT

 

VANGUARD ENERGY CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 

NOTE 1 – BASIS OF PRESENTATION

 

These unaudited consolidated financial statements of Vanguard Energy Corporation (Vanguard or the Company) have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). In the opinion of management, these financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the results for the interim periods. Certain information, accounting policies and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been omitted pursuant to Securities and Exchange Commission (SEC) rules and regulations. These financial statements should be read along with Vanguard’s audited financial statements as of September 30, 2016.

 

Going Concern – The Company has incurred cumulative net losses since its inception and will require capital for future operating activities to take place. The Company's ability to raise new funds through the future issuances of debt or common stock is unknown. The obtainment of additional financing, the successful development of a plan of operations, and its transition, ultimately, to the attainment of profitable operations are necessary for the Company to continue operations. The ability to successfully resolve these factors raise substantial doubt about the Company's ability to continue as a going concern.

 

Future issuances of the Company's equity or debt securities will be required in order for the Company to finance operations and continue as a going concern. The financial statements do not include any adjustments that may result from the outcome of these aforementioned uncertainties.

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

As of December 31, 2016, Vanguard’s significant accounting policies were consistent with those discussed in the audited financial statements as of September 30, 2016.

 

Earnings (Loss) Per ShareBasic earnings (loss) per share have been calculated based upon the weighted-average number of common shares outstanding. Diluted earnings per share have been calculated based upon the weighted-average number of common and potential common shares. The calculation of diluted weighted-average shares outstanding for the three-month periods ended December 31, 2016 and 2015 excludes 62,974 and 79,474 shares, respectively, issuable pursuant to outstanding warrants, stock options and debt conversion features because their effect is anti-dilutive.

 

NOTE 3 – SUBSEQUENT EVENT

 

On July 1, 2017 the company acquired all of the shares of Solar Quartz Technologies Limited, a company incorporated in New Zealand (“SQTNZ”). These shares were purchased from Solar Quartz Technologies, Inc. (“SQTI”). The agreed value of that company’s assets is US$530 million. We subsequently changed our name to Solar Quartz Technologies Corporation in Colorado and with FINRA, and have also been cleared by FINRA to use the new trading symbol SQTX. In July 2017 the Company issued 213,402,755 new shares of common stock to SQTI in exchange for 122 (100%) of the common shares of SQTNZ. The issuance of these shares was equivalent to 95% of the Company's shares issued, after we issue an additional 10,021,224 shares of common stock to those holders of our common stock immediately prior to the acquisition. The Company does not anticipate any further reorganization of its common stock. We are currently preparing filing all necessary reports to the SEC with audited financial statements to resume our status as fully reporting with the SEC, and subsequently apply to trade on the more senior OTCQX exchange or NASDAQ.

 

 
6
 
 

 

DRAFT

 

VANGUARD ENERGY CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 

SQTNZ is a corporation that has no prior business activity other than being the title owner of the exclusive mining and development rights for two High Purity Quartz (HPQ) Silica deposits known as Quartz Hill (represented by leases ML 30235, ML 30236 and ML 30237) and White Springs (represented by leases ML 30238 and ML 30239) located in North Queensland, Australia. Together they contain deposits in excess of 15 million tons of 99% pure High Purity Quartz which is feedstock in high demand in the marketplace to be used in the production of High Purity Quartz Sand (HPQS) based on independent professional reports.

 

HPQS is an essential primary material for the manufacture of: Photo-Voltaic (PV) solar panels; Semiconductors; all High-end Electronic products; Fiber Optical cables; Halogen Lamps; HD and LCD television screens; and Epoxy Mounding Compounds (EMC).

 

NOTE 4 – CONVERTIBLE NOTES PAYABLE

 

At December 31, 2016, convertible notes totaling $70,747 remained outstanding together with accrued interest of $38,696.

 

NOTE 5 – INCOME TAXES

 

The Company estimates its annual effective income tax rate in recording its quarterly provision for income taxes in the various jurisdictions in which the Company operates. Statutory tax rate changes and other significant or unusual items are recognized as discrete items in the quarter in which they occur. The Company recorded no income tax expense for the three-month period ended December 31, 2016 because the Company estimates it will record no income tax expense for the tax year ending September 30, 2017. The Company has a valuation allowance that fully offsets net deferred tax assets.

 

* * * * *

 

 
7
 
 

 

DRAFT

 

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND PLAN OF OPERATION

 

In July 2017 we acquired Solar Quartz Technologies Limited, a New Zealand corporation, as described in Note 3 to the Financial Statements above. We are now seeking new financings to meet development and general operating obligations and to justify a market for our stock. Absent achieving such a transaction in the near future, our viability is in doubt. As of September 30, 2017, the Company has not been successful in meeting this goal; however, work is underway to secure such financing and we believe that such financing of the Company is possible in the near future.

 

ITEM 4. CONTROLS AND PROCEDURES.

 

(a) We maintain a system of controls and procedures designed to ensure that information required to be disclosed in reports filed or submitted under the Securities Exchange Act of 1934, as amended (“1934 Act”), is recorded, processed, summarized and reported within time periods specified in the SEC's rules and forms and to ensure that information required to be disclosed by us in the reports that we file or submit under the 1934 Act is accumulated and communicated to our management, including our Principal Executive and Financial Officer, as appropriate to allow timely decisions regarding required disclosure. As of December 31, 2016, our Principal Executive and Financial Officer evaluated the effectiveness of the design and operation of our disclosure controls and procedures. Based on that evaluation, our Principal Executive and Financial Officer concluded that our disclosure controls and procedures were effective.

 

(b) Changes in Internal Controls. There were no changes in our internal control over financial reporting during the three-month period ended December 31, 2016 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

 
8
 
 

 

DRAFT

 

PART II

 

ITEM 6. EXHIBITS

Exhibits

 

 

 

 

 

31.1

 

Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 

31.2

 

Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 

32

 

Certification pursuant to Section 906 of the Sarbanes-Oxley Act.

 

 
9
 
 

 

DRAFT

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

VANGUARD ENERGY CORPORATION

       

Date: ______________

By: /s/ Warren M. Dillard

 

 

Warren M. Dillard

 
   

Chief Executive, Financial and

 
    Accounting Officer  

 
10
 
 

 

DRAFT

 

EXHIBIT 31.1

 

CERTIFICATIONS

 

I, Warren M. Dillard, certify that;

 

1. I have reviewed this quarterly report on Form 10-Q of Vanguard Energy Corporation;

 

 

2. Based on my knowledge, this report, does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by the report;

 

 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

 

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

 

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

 

 

 

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

 

 

 

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

 

 

 

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

 

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

 

 

 

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

 

Date: ______________

By:

/s/ Warren M. Dillard

Warren M. Dillard,

Principal Executive Officer

 

 
11
 
 

 

DRAFT

 

EXHIBIT 31.2

 

CERTIFICATIONS

 

I, Warren M. Dillard, certify that;

 

1. I have reviewed this quarterly report on Form 10-Q of Vanguard Energy Corporation;

 

 

2. Based on my knowledge, this report, does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by the report;

 

 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

 

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

 

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

 

 

 

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

 

 

 

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

 

 

 

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

 

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

 

 

 

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

 

 

 

Date: ___________

By:

/s/ Warren M. Dillard

Warren M. Dillard,

Principal Financial Officer

 

 
12
 
 

 

DRAFT

 

EXHIBIT 32

 

In connection with the Quarterly Report of Vanguard Energy Corporation (the “Company”) on Form 10-Q for the period ending December 31, 2016 as filed with the Securities and Exchange Commission (the “Report”), Warren Dillard, the Principal Executive and Financial Officer of the Company, certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of his knowledge:

 

 

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

 

 

 

(2) The information contained in the Report fairly presents, in all material respects the financial condition and results of operations of the Company.

 

 

Date: ____________

By:

/s/ Warren M. Dillard

Warren M. Dillard,

Principal Executive and Financial Officer

 

Vanguard March 31, 2016 10-Q 9-22-17

 

 

13

 

EX-99.4 7 vnge_ex994.htm DRAFT SEPT 2016 10-K vnge_ex994.htm

EXHIBIT 99.4

 

DRAFT

 

FORM 10-K

 

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

(Mark One)

 

x

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

Forthe fiscal year ended September 30, 2016

 

OR

 

o

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

Commission file number: None

 

VANGUARD ENERGY CORPORATION

(Exact name of registrant as specified in its charter)

 

COLORADO

 

27-2888719

(State or other jurisdiction

of incorporation or organization)

(I.R.S. Employer

Identification No.)

 

21 Waterway Ave., Ste. 300

The Woodlands, Texas

77380

(Address of principal executive offices)

(Zip Code)

 

Registrant's telephone number, including area code: (281) 362-2725

 

Securities registered pursuant to Section 12(b) of the Act: None.

 

Title of each class

Name of each exchange

on which registered

 

Securities registered pursuant to Section 12(g) of the Act: None.

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. o

 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. o

 

Indicate by check mark whether the registrant (1) has filed all reports to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulations S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such filing). Yes o No x

 

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

o

Accelerated filer

o

Non-accelerated filer

o

Smaller reporting company

x

(Do not check if a smaller reporting company)

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act): ¨ Yes    x No

 

The aggregate market value of the voting stock held by non-affiliates of the registrant on ______, 2017 was approximately $___

 

As of September 30, 2017, the registrant had 195,004,639 outstanding shares of common stock. It was also contractually committed to issue an additional 10,021,340 shares of common stock to certain holders or their successors of its common stock prior to July 1, 2017.

 

Documents Incorporated by Reference: None

 

 
1
 
 

 

DRAFT

 

PART I

 

ITEM 1. BUSINESS.

 

We were incorporated in Colorado on June 21, 2010. Between February 1, 2011 and June 14, 2014 we were involved in the exploration and development of oil and gas properties in southeast Texas.

 

We were never able to earn a profit and in January of 2013 we began investigating the possibility of selling our oil and gas properties.

 

On June 17, 2014 we sold our oil and gas properties to Vast Exploration, Inc..

 

The sale of our oil and gas properties represented the sale of substantially all of our assets.

 

On August 19, 2014, a 100-for-1 reverse split of our common stock became effective.

 

Subsequent Events

 

On July 1, 2017 the Company authorized an increase in its authorized common shares to 500,000,000 and its authorized preferred shares to 10,000,000.

On July 1, 2017 the company acquired all of the shares of Solar Quartz Technologies Limited, a company incorporated in New Zealand (“SQTNZ”). These shares were purchased from Solar Quartz Technologies, Inc. (“SQTI”). The agreed value of that company’s assets is US$530 million. We subsequently changed our name to Solar Quartz Technologies Corporation in Colorado and with FINRA, and have also been cleared by FINRA to use the new trading symbol SQTX. The Company issued 213,402,755 new shares of common stock to SQTI in exchange for 122 (100%) of the common shares of SQTNZ. The issuance of these shares was equivalent to 95% of the Company's shares issued, after we issue an additional 10,021,224 shares of common stock to those holders of our common stock immediately prior to the acquisition. The Company does not anticipate any further reorganization of its common stock. We are currently preparing filing all necessary reports to the SEC with audited financial statements to resume our status as fully reporting with the SEC, and subsequently apply to trade on the more senior OTCQX exchange or NASDAQ.

 

SQTNZ is a corporation that has had no prior business activity other than being the title owner of the exclusive mining and development rights for two High Purity Quartz (HPQ) Silica deposits known as Quartz Hill (represented by leases ML 30235, ML 30236 and ML 30237) and White Springs (represented by leases ML 30238 and ML 30239) located in North Queensland, Australia. Together they contain deposits in excess of 15 million tons of 99% pure High Purity Quartz which is feedstock in high demand in the marketplace to be used in the production of High Purity Quartz Sand (HPQS) according to independent professional reports.

 

HPQS is an essential primary material for the manufacture of: Photo-Voltaic (PV) solar panels; Semiconductors; all High-end Electronic products; Fiber Optical cables; Halogen Lamps; HD and LCD television screens; and Epoxy Mounding Compounds (EMC).

 

Employees and Offices

 

As of September 30, 2017, we did not have any employees.

 

Our office is located at 21 Waterway Avenue, Suite 300, The Woodlands, Texas 77380. This a virtual office leased for two years ended June 30, 2019 at a rate of $197 per month.

 

 
2
 
 

 

DRAFT

 

ITEM 1.A. RISK FACTORS.

 

Not applicable.

 

ITEM 1.B. UNRESOLVED STAFF COMMENTS.

 

Not Applicable

 

ITEM 2. PROPERTIES.

 

None.

 

ITEM 3. LEGAL PROCEEDINGS.

 

Not applicable

 

ITEM 4. MINE SAFETY DISCLOSURE.

 

Not applicable

 

 
3
 
 

 

DRAFT

 

PART II

 

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

 

Our common stock trades in the over-the-counter market under the symbol “SQTX”. Shown below is the range of high and low closing prices for our common stock for the periods indicated as reported by the FINRA. The market quotations reflect inter-dealer prices, without retail mark-up, mark-down or commissions and may not necessarily represent actual transactions.

    

Quarter Ended

 

  High

 

 

  Low

 

 

 

 

 

 

 

 

December 31, 2014

 

$ 1.55

 

 

$ 0.40

 

 March 31, 2015

 

$ 2.09

 

 

$ 0.90

 

June 30, 2015

 

$ 1.99

 

 

$ 1.01

 

September 30, 2015

 

$ 1.65 (1)

 

$ 1.01

 

 

 

 

 

 

 

 

 

 

December 31, 2015

 

$ 1.40

 

 

$ 0.80

 

March 31, 2016

 

$ 1.05

 

 

$ 0.85

 

June 30, 2016

 

$ 3.00

 

 

$

0.85

 

September 30, 2016

 

$ 1.15

 

 

$ 0.75

 

Holders of our common stock are entitled to receive dividends as may be declared by the Board of Directors. Our Board of Directors is not restricted from paying any dividends but is not obligated to declare a dividend. No cash dividends have ever been declared and it is not anticipated that cash dividends will ever be paid.

 

Our Articles of Incorporation authorize our Board of Directors to issue up to 500,000,000 shares of common stock and up to10,000,000 shares of preferred stock. The provisions in the Articles of Incorporation relating to the preferred stock allow our directors to issue preferred stock with multiple votes per share and dividend rights which would have priority over any dividends paid with respect to the holders of our common stock. The issuance of preferred stock with these rights may make the removal of management difficult even if the removal would be considered beneficial to shareholders generally, and will have the effect of limiting shareholder participation in certain transactions such as mergers or tender offers if these transactions are not favored by our management.

 

As of September 30, 2017, we had approximately 215 shareholders of record.

 

We have not declared or paid any dividends on our common stock since our inception, and we do not anticipate declaring or paying any dividends on our common stock for the foreseeable future. We currently intend to retain any future earnings to finance future growth. Any future determination to pay dividends will be at the discretion of our board of directors and will depend on our financial condition, results of operations, capital requirements and other factors the board of directors considers relevant.

 

 
4
 
 

 

DRAFT

 

ITEM 6. SELECTED FINANCIAL DATA.

 

Not applicable.

 

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

As a result of the sale of our oil and gas properties, as discussed in Item 1 of this report, we no longer have any oil and gas assets With the acquisition of Solar Quartz Technologies Limited we now own significant deposts of High Purity Quartz Silica.

 

Since we no longer have any field activity and have only minimal operations, a comparison of our financial statements with any prior period would not be meaningful.

 

Contractual Obligations

 

Our material future contractual obligations as of September 30, 2017 were as follows:

 

 

 

Total

 

 

2017

 

 

 

 

 

 

 

 

2012 Convertible notes 

 

$ 70,747

 

 

$ 70,747

 

 

Critical Accounting Policies and New Accounting Pronouncements

 

See Note 2 to the financial statements included as part of this report, for a description of our critical accounting policies and the potential impact of the adoption of any new accounting pronouncements.

 

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

 

Not applicable.

 

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

 

See the financial statements and accompanying notes included with this report.

 

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

 

None.

 

ITEM 9A. CONTROLS AND PROCEDURES.

 

An evaluation was carried out under the supervision and with the participation of our management, including our Principal Executive and Financial Officer, of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report on Form 10-K. Disclosure controls and procedures are procedures designed with the objective of ensuring that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, such as this Form 10-K, is recorded, processed, summarized and reported, within the time period specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and is communicated to our management, including our Principal Executive and Financial Officer, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure. Based on that evaluation, our management concluded that, as of September 30, 2017, our disclosure controls and procedures were effective.

 

 
5
 
 

 

DRAFT

 

Management's Report on Internal Control over Financial Reporting

 

Our management is responsible for establishing and maintaining adequate internal control over financial reporting and for the assessment of the effectiveness of internal control over financial reporting. As defined by the Securities and Exchange Commission, internal control over financial reporting is a process designed by, or under the supervision of our Principal Executive and Financial Officer and implemented by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our financial statements in accordance with U.S. generally accepted accounting principles.

 

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

 

Warren Dillard, our Principal Executive and Financial Officer, evaluated the effectiveness of our internal control over financial reporting as of September 30, 2017 based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission, or the COSO Framework (1992). Management’s assessment included an evaluation of the design of our internal control over financial reporting and testing of the operational effectiveness of those controls.

 

Based on this evaluation, management concluded that our internal control over financial reporting was effective as of September 30, 2017.

 

Changes in Internal Control Over Financial Reporting

 

There was no change in our internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

ITEM 9B. OTHER INFORMATION.

 

None.

 

 
6
 
 

 

DRAFT

 

PART III

 

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

 

Our officers and directors are listed below. Our directors are generally elected at our annual shareholders’ meeting and hold office until the next annual shareholders’ meeting, or until their successors are elected and qualified. Our executive officers are elected by our directors and serve at their discretion.

 

Name

Age

Position

Warren Dillard

75

President, Chief Executive, Financial and Accounting Officer and a Director

Steven M. Powers

75

Vice President of Business Development, Secretary and a Director

Roger T. May

71

Director

 

David AB Halstead 70 Director

 

Michael Selsman 80 Director

 

The principal occupations of our officers and directors during the past several years are as follows:

 

Warren M. Dillard has been our President, Chief Executive, Financial and Accounting Officer and a director since June 2010. Since February 2011 Mr. Dillard has been our Principal Financial and Accounting Officer. He has previously managed mutual funds with the American Funds group of funds, was CFO of Pepperdine University and has been active in the development of numerous early stage companies in a variety of industries. Since 2005, Mr. Dillard has served as the President and a director of Enercor, Inc., a private corporation involved in oil and gas exploration and development in the western United States. Since the spring of 2010, Mr. Dillard’s involvement with Enercor has been minimal. Mr. Dillard holds a degree in Accounting from Texas A & M University and an MBA in Finance from the Harvard Business School.

 

 
7
 
 

 

DRAFT

 

Steven M. Powers has been a director since June 2010. Since February 2011, Mr. Powers has been our Vice President of Business Development and our Secretary. Since 2005, Mr. Powers has served as Chief Executive Officer, Chairman and a director of Enercor, Inc., a private corporation involved in oil and gas exploration and development. Prior to his association with Enercor, Mr. Powers was a real estate developer. Mr. Powers earned a degree in philosophy from the University of California at Santa Barbara as well as an MBA from the University of California at Los Angeles.

 

Roger May has been a director since July 1, 2017. Mr. May has extensive international business experience over the last 40 years, resided in the USA for 22 years, returning to Australia September 2001. Recognized Expert in "start-up" enterprises from inception to fully operational commercial ventures. He has overcome obstacles with great ability, tenacity, flexibility and creative initiative. Acknowledged visionary and creator combined with strong implementation skills. He has excellent capital raising skills in tens of millions of dollars. He has been Founder, Chairman & CEO of five (5) publicly listed companies in the USA and Australia. He resided in the USA for 22 years. He has founded several high-tech. communications and mineral resource development companies. Presently focused on Global commercialization of primary component material essential in manufacture of PV Solar panels, Semi-conductor, and all high-end electronics in the USA and Australia.

 

David AB Halstead has been a director since July 1, 2017. David has a wide range of corporate, secretarial and trusts experience, in both offshore and onshore companies. In 1973 he became a partner in a local chartered accounting firm and in 1984 a principal in the Hong Kong office of Coopers & Lybrand [now PWC] specializing in international corporate and secretarial services, and offshore tax structures. Upon his return to Auckland in 1994, he established and operated, several integrated medical centers, a surgical hospital in Auckland and a state of the art diagnostic center. He then spent 3 years working with World Vision fund raising for its micro finance arm “Vision Fund” involved with the capitalization and establishment of Vision Fund Cambodia. Since 2006, David has acted as company secretary and treasurer for a group of international clients. Contemporaneously he established and operated, until recently, a unique world-first web based joint venture service for the New Zealand Government processing immigration medicals online in a secure platform. Mr. Halstead was educated at Kings College, Auckland, the son of a former New Zealand Cabinet Minister and diplomat. He is a graduate of the University of Auckland with a Bachelor of Commerce and further qualifications in taxation.

 

Michael Selsman has been a director since July 17, 2017. Mr. Selsman, as principal of Public Communications Company, Beverly Hills, CA, represents publicly traded companies as a consultant in both public relations and investor relations. He is a Director of Gawk, Inc. and is CEO of Archer Entertainment Media Communications, Inc. He also researches and writes due diligence reports for brokerages, public and private companies (www.publiccommunicationsco.com). He is also a partner in Troika Publishing Media, a digital new media company. He entered the entertainment industry with 20th Century-Fox in New York City, and was subsequently hired by Paramount Pictures as East Coast Publicity manager. In Hollywood, he became a public relations executive for motion picture actors, directors and writers. As a talent agent at Artists Agency (now ICM), he structured arrangements for prominent films and TV series. Becoming a producer, he re-joined 20th Century-Fox, and then MGM, and became an independent producer making films in various states. He has recently published his autobiography, “All is Vanity”. He has been a talent agent with Artist Agency Corporation (now ICM) participating in many highly regarded television series and talent. He has provided investor relations counsel to numerous publicly traded companies. Mr. Selsman has served on the boards of a number of major charities and lectured at most of the major universities in the Los Angeles area.

 

 
8
 
 

 

DRAFT

 

We believe that each of our directors’ experience in high quality minerals and/or business development qualifies him to serve as one of our directors.

 

Warren Dillard acts as our Principal Financial Officer.

 

We have adopted a code of ethics applicable to our principal executive, financial and accounting officers and persons performing similar functions.

 

ITEM 11. EXECUTIVE COMPENSATION

 

The following table summarizes the compensation received by our principal executive and financial officers during the two years ended September 30, 2016.

 

 

 

 

 

Other

 

 

 

 

Name and Principal Position

 

Fiscal

Year

 

Salary

(1)

 

 

Compensation

(2)

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

Warren Dillard

 

2016

 

$ 3,000

 

 

 

-

 

 

$ 3,000

 

President, Principal

 

2015

 

$ 20,000

 

 

 

-

 

 

$ 20,000

 

Financial and Accounting Officer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Steven M Powers

 

2016

 

 

-

 

 

 

-

 

 

 

-

 

Vice Presaident, Business

 

2015

 

 

-

 

 

 

-

 

 

 

-

 

___________

(1) The dollar value of base salary (cash and non-cash) earned.

 

 

(2) All other compensation received that could not be properly reported in any other column of the table.

   

Long-Term Incentive Plans. We do not provide our officers or employees with pension, stock appreciation rights, long-term incentive or other plans.

 

Employee Pension, Profit Sharing or other Retirement Plans. We do not have a defined benefit, pension plan, profit sharing or other retirement plan, although we may adopt one or more of such plans in the future.

 

Compensation of Directors During Year Ended September 30, 2016. During the year ended September 30, 2016, we did not compensate our directors for acting as such.

 

Compensation Committee Interlocks and Insider Participation.. During the year ended September 30, 2016, none of our officers was also a member of the compensation committee or a director of another entity, which other entity had one of its executive officers serving as one of our directors.

 

 
9
 
 

 

DRAFT

 

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

 

The following table shows the beneficial ownership of our common stock, as of September 30, 2017 by (i) each person whom we know beneficially owns more than 5% of the outstanding shares of our common stock, (ii) each of our officers, (iii) each of our directors, and (iv) all the officers and directors as a group. Unless otherwise indicated, each owner has sole voting and investment powers over his shares of common stock. Unless otherwise indicated, beneficial ownership is determined in accordance with the Rule 13d-3 promulgated under the Securities and Exchange Act of 1934, as amended, and includes voting or investment power with respect to shares beneficially owned.

 

 

 

Number of

Shares

 

 

 

 

 

 

Beneficially

 

 

Percentage

 

Name and Address of Beneficial Owner

 

Owned

 

 

of Class  

 

 

 

 

 

 

 

 

Warren M. Dillard

 

 

 

 

 

 

21 Waterway Ave., Ste. 300

 

 

 

 

 

 

The Woodlands, TX 77380

 

 

--

 

 

 

--

 

 

 

 

 

 

 

 

 

 

Steven M. Powers

 

 

7,750 (1)

 

 

-

 

2426 Topanga Canyon Blvd.

 

 

 

 

 

 

 

 

Topanga, CA 90290 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Roger May

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

David AB Halstead

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Michael Selsman

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

All officers and directors as a group (5 persons)

 

 

-

 

 

 

 

 

___________

(1) Mr. Powers is entitled to the issuance of an additional 77,500 shares pursuant to the Purchase and Sale Agreement in which the Company purchased the shares of Solar Quartz Technologies Limited on July 1, 2017 as reported in the Company’s Form 8-K filing on July 11, 2017.

 

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.

 

None.

 

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.

 

Briggs & Veselka Co. provided certain audit related services during the year ended September 30, 2015. Thayer O’Neal Company, LLC was engaged to audit our financial statements for the years ended September 30, 2015 and September 30, 2017 in September of 2017. The following table shows the fees billed to us for the periods presented by Briggs & Veselka.

 

 

Year Ended

 

Year Ended

 

 

September 30,

2016

 

September 30,

2015

 

 

 

 

 

Audit Fees

$

$

Audit-Related Fees

$

$

Tax Fees

$

$

 

Audit fees represent amounts billed for professional services rendered for the audit of our annual financial statements and reviews of our quarterly financial statements.

 

Audit-related fees represent amounts billed for consents related to regulatory filings, audit/review of financial statements included in our registration statements filed with the Securities and Exchange Commission, and consulting related to the implementation of accounting standards.

 

Tax fees include professional services for tax return preparation and income tax audit support.

 

The policy of our directors is to pre-approve all audit and non-audit services provided by our independent auditors.

 

 
10
 
 

 

DRAFT

 

PART IV

 

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

 

Exhibits

 

 

 

The following exhibits were filed with the company’s Registration Statement in 2011:

 

 

 

3.1*

Articles of Incorporation

3.2*

Bylaws

10.10*

Form of Convertible Note

14*

Code of Ethics

21*

Subsidiaries

31

Rule 13a-14(a) Certifications

32

Section 1350 Certifications

 

 

 

 

 

The following exhibit was filed with the company’s Form 8-K on July 11, 2017:

 

 

 

Amendment to Articles of Incorporation

________

*

Incorporated by reference to the same exhibit filed with the Company’s Registration Statement on Form S-1 (File # 333-174194).

**

Incorporated by reference to the same exhibit filed with the Company’s registration statement on Form S-1 (File # 333-180987).

 

 
11
 
 

 

DRAFT

 

SIGNATURES

 

In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant has caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized on the __ day of _____, 2017.

 

VANGUARD ENERGY CORPORATION

By:

Warren Dillard, Chief Executive Officer

 

Pursuant to the requirements of the Securities Exchange Act of l934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

 

Signature

Title

Date

Principal Executive, Financial and Accounting Officer and Director

__ __, 2017

Warren Dillard

Secretary, Director

J____, 2017

Steven M. Powers

 

Vanguard Sept 2015 10-K 9-22-17

 

 
12
 
 

 

DRAFT

 

CONTENTS

 

 

Page

 

 

 

Report of Independent Registered Public Accounting Firm

 

F-1

 

 

 

Unaudited Consolidated Balance Sheets

 

F-2

 

 

 

Unaudited Consolidated Statements of Operations

 

F-3

 

 

 

Unaudited Consolidated Statements of Changes in Stockholders’ Equity (Deficit)

 

F-4

 

 

 

Unaudited Consolidated Statements of Cash Flows

 

F-5

 

 

 

Notes to the Unaudited Consolidated Financial Statements

 

F-6

 

 

 
13
 
 

 

DRAFT

 

Report of Independent Registered Public Accounting Firm

 

To the Board of Directors and Stockholders of

Vanguard Energy Corporation

 

 
F-1
 
 

 

DRAFT

 

VANGUARD ENERGY CORPORATION

UNAUDITED CONSOLIDATED BALANCE SHEETS

 

 

 

September 30,

 

 

September 30,

 

 

2016

 

 

2015

 

 

 

(Unaudited)

 

 

 

 

ASSETS

Current assets

 

 

 

 

 

 

Cash and cash equivalents

 

$ 35

 

 

$ 5

 

Other receivables

 

 

966

 

 

 

-

 

Total current assets

 

 

1,001

 

 

 

5

 

 

 

 

 

 

 

 

 

 

Fixed assets

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Total assets

 

$ 1,001

 

 

$ 5

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ DEFICIT

 

Current liabilities

 

 

 

 

 

 

 

 

Accounts payable

 

$ 51,212

 

 

$ 20,217

 

Accrued interest payable

 

 

36,044

 

 

 

38,571

 

Accrued liabilities

 

 

17,511

 

 

 

10,463

 

Short term notes payable

 

 

85,000

 

 

 

50,000

 

Other liabilities

 

 

92

 

 

 

275

 

Current portion of notes payable, net of discount $- and $71,754

 

 

70,747

 

 

 

146,937

 

Total current liabilities

 

 

260,606

 

 

 

266,463

 

 

 

 

 

 

 

 

 

 

Stockholders' deficit

 

 

 

 

 

 

 

 

Preferred stock, $0.00001 par value; 5,000,000 shares authorized; none issued or outstanding

 

 

-

 

 

 

-

 

Common stock, $0.00001 par value; 100,000,000 and 50,000,000 shares authorized; 1,002,134 and 979,109 shares issued and outstanding

 

 

1,002

 

 

 

979

 

Additional paid-in capital

 

 

6,318,920

 

 

 

6,318,920

 

Accumulated deficit

 

 

(6,579,527 )

 

 

(6,586,357 )

 

 

 

 

 

 

 

 

 

Total stockholders' deficit

 

 

(259,605 )

 

 

(266,458 )

 

 

 

 

 

 

 

 

 

Total liabilities and stockholders' deficit

 

$ 1,001

 

 

$ 5

 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 
F-2
 
 

 

DRAFT

 

VANGUARD ENERGY CORPORATION

UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS

 

 

 

September 30

 

 

September 30

 

 

 

2016

 

 

2015

 

 

 

(Unaudited)

 

 

(Unaudited)

 

Revenues

 

 

 

 

 

 

Sales

 

$ -

 

 

$ -

 

 

 

 

 

 

 

 

 

 

Costs and expenses

 

 

 

 

 

 

 

 

General and administrative

 

 

64,790

 

 

 

109,593

 

Total costs and expenses

 

 

64,790

 

 

 

109,593

 

 

 

 

 

 

 

 

 

 

Loss from operations

 

 

(64,790 )

 

 

(109,593 )

 

 

 

 

 

 

 

 

 

Other income (expense)

 

 

 

 

 

 

 

 

Other income

 

 

-

 

 

 

(23,810 )

Interest income

 

 

-

 

 

 

-

 

Interest expense

 

 

(12,408 )

 

 

(31,608 )

Other interest costs

 

 

(7,074 )

 

 

-

 

Gain on debt extinguishment

 

 

91,102

 

 

 

2,576,890

 

Total other income (expense)

 

 

71,620

 

 

 

2,521,472

 

 

 

 

 

 

 

 

 

 

Net Income (Loss) before income taxes

 

 

6,830

 

 

 

2,411,879

 

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Net Income (Loss)

 

$ 6,830

 

 

$ 2,411,879

 

 

 

 

 

 

 

 

 

 

Income (Loss) per share:

 

 

 

 

 

 

 

 

Basic and diluted

 

$ 0.01

 

 

$ 2.46

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding

 

 

1,002,134

 

 

 

979,109

 

 

The accompanying notes are an integral part of these consolidated financial statements.

 
F-3
 
 

 

DRAFT

 

VANGUARD ENERGY CORPORATION

UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES

IN STOCKHOLDERS' DEFICIT

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

 

Common Stock

 

 

Paid In

 

 

Accumulated

 

 

Stockholders’

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at September 30, 2014

 

 

115,243

 

 

$ 127

 

 

$ 5,522,204

 

 

$ (9,022,045 )

 

$ (3,499,714 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Correction of par value

 

 

 

 

 

 

(12 )

 

 

12

 

 

 

 

 

 

 

-

 

Return of common stock

 

 

(2,484 )

 

 

(2 )

 

 

2

 

 

 

 

 

 

 

-

 

Write off of Treasury Stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

23,810

 

 

 

23,810

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of shares for settlement of debt

 

 

866,350

 

 

 

866

 

 

 

796,702

 

 

 

-

 

 

 

797,568

 

Net Income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

2,411,879

 

 

 

2,411,879

 

Balance at September 30, 2015

 

 

979,109

 

 

 

979

 

 

$ 6,318,920

 

 

$ (6,586,357 )

 

$ (266,458 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of shares for settlement of debt

 

 

23,025

 

 

 

23

 

 

 

 

 

 

 

 

 

 

 

23

 

Net Income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

6,830

 

 

 

6,830

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at September 30, 2016

 

 

1,002,134

 

 

 

1,002

 

 

 

6,318,920

 

 

 

(6,579,527 )

 

 

(259,605 )

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 
F-4
 
 

 

DRAFT

 

VANGUARD ENERGY CORPORATION

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOW

 

 

 

Year Ended

 

 

 

2016

 

 

2015

 

Cash flows from operating activities

 

 

 

 

 

 

Net Income (loss)

 

$ 6,830

 

 

$ 2,456,346

 

Adjustments to reconcile net income/(loss) to net cash from operating activities:

 

 

 

 

 

 

 

 

Amortization of debt issuance costs

 

 

-

 

 

 

4,107

 

Gain on debt extinguishment

 

 

(76,190 )

 

 

(2,677,698 )

Amortization of debt discount

 

 

-

 

 

 

3,523

 

Other assets

 

 

(966 )

 

 

12,500

 

Accounts payable

 

 

30,995

 

 

 

8,813

 

Accrued interest payable

 

 

(2,527 )

 

 

105,341

 

Accrued liabilities

 

 

7,048

 

 

 

-

 

Other liabilities

 

 

(183 )

 

 

-

 

Net cash from operating activities

 

 

(34,993 )

 

 

(87,068 )

 

 

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

 

 

 

Capital expenditures on oil and gas properties

 

 

-

 

 

 

-

 

Net cash from investing activities

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

 

 

 

Issuance of common stock

 

 

23

 

 

 

-

 

Issuance of short term note payable

 

 

35,000

 

 

 

50,000

 

Net cash from financing activities

 

 

35,023

 

 

 

50,000

 

Net change in cash and cash equivalents

 

 

30

 

 

 

(37,068 )

Cash and cash equivalents

 

 

 

 

 

 

 

 

Beginning of period

 

 

5

 

 

 

39,251

 

End of period

 

$ 35

 

 

$ 2,183

 

 

 

 

 

 

 

 

 

 

Supplemental cash flow information

 

 

Fiscal Year Ended

 

 

2016

 

 

2015

 

 

 

 

 

 

 

 

 

 

Noncash investing and financing activities:

 

 

 

 

 

 

 

 

Issuance of shares for settlement of debt

 

 

-

 

 

 

797,562

 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 
F-5
 
 

 

DRAFT

 

VANGUARD ENERGY CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE 1 – BASIS OF PRESENTATION

 

These consolidated financial statements of Vanguard Energy (Vanguard or the Company) have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). In the opinion of management, these financials statements include all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the interim periods. Certain information, accounting policies and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been omitted pursuant to Securities and Exchange Commission (SEC) rules and regulations.

 

The sale of the Company’s oil and gas properties, as explained in Note 3, raised substantial doubt of the Company to continue as a going concern. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business.

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Principles of Consolidation and Basis of Presentation— The consolidated financial statements include the accounts of Vanguard Energy Corporation and its subsidiaries. Vanguard’s significant accounting policies are consistent with those discussed in the audited financial statements as of September 30, 2016 and 2015. All significant intercompany accounts and transactions have been eliminated in consolidation.

 

The Company's fiscal year-end is September 30. The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") and pursuant to the accounting and disclosure rules and regulations of the U.S. Securities and Exchange Commission ("SEC"). A summary of the significant accounting policies applied in the preparation of the accompanying financial statements follows

 

Earnings Per Share – Basic earnings per share have been calculated based upon the weighted-average number of common shares outstanding. Diluted earnings per share have been calculated based upon the weighted-average number of common and potential shares. The calculation of diluted weighted-average shares outstanding for the years ended September 30, 2016 and 2015 excludes 62,974 and 79,474 shares, respectively, issuable pursuant to outstanding warrants and debt conversions features because their effect is anti-dilutive.

 

Reclassifications – Certain amounts previously presented for prior periods have been reclassified to conform to the current presentation. The reclassifications had no effect on net loss, working capital or equity previously reported.

 

Recently Issued Accounting Pronouncements – Various accounting standards updates have been recently issued, most of which represented technical corrections to the accounting literature or were applicable to specific industries. No new accounting pronouncements have been issued that are likely to have a material impact to the Company’s consolidated financial statements.

 

 
F-6
 
 

 

DRAFT

 

VANGUARD ENERGY CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

 

Fair Value Measurements—The carrying value of cash and cash equivalents, accounts receivable, and accounts payable, as reflected in the balance sheets, approximate fair value because of the short-term maturity of these instruments. The estimated fair value of long-term debt was determined by discounting future cash flows using rates currently available to the Company for debt with similar terms and remaining maturities. The Company calculated that the estimated fair value of the long term debt is not significantly different than the carrying value of the debt. The participation liability associated with outstanding long-term debt was determined by utilizing a present value factor of 10 applied to proved developed reserves associated with the wells drilled with the proceeds of the notes.

 

Fair value is defined as the price that would be received to sell an asset or price paid to transfer a liability in an orderly transaction between market participants at the measurement date. Inputs used in determining fair value are classified for disclosure purposes according to a hierarchy that prioritizes those inputs based upon the degree to which they are observable. The three levels of the fair-value-measurement hierarchy are as follows:

 

 

· Level 1—Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

 

 

 

 

· Level 2—Inputs that reflect quoted prices for identical assets or liabilities in markets that are not active; quoted prices for similar assets or liabilities in active markets; inputs other than quoted prices that are observable for the asset or the liability; or inputs that are derived principally from or corroborated by observable market data by correlation or other means.

 

 

 

 

· Level 3—Unobservable inputs reflecting the Company's own assumptions incorporated in valuation techniques used to determine fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available.

   

In determining fair value, the Company utilizes observable market data when available, or models that incorporate observable market data. In addition to market information, the Company incorporates transaction-specific details that, in management's judgment, market participants would take into account in measuring fair value. The Company utilizes the most observable inputs available for the valuation technique employed. If a fair value measurement reflects inputs at multiple levels within the hierarchy, the fair-value measurement of both financial and nonfinancial assets and liabilities are characterized based upon the lowest level of input that is significant to the fair value measurement.

 

 
F-7
 
 

   

DRAFT

 

VANGUARD ENERGY CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE 3 – SUBSEQUENT EVENT

 

On July 1, 2017 the company acquired all of the shares of Solar Quartz Technologies Limited, a company incorporated in New Zealand (“SQTNZ”). These shares were purchased from Solar Quartz Technologies, Inc. (“SQTI”). We have agreed with SQTI that the market value of that SQTNZ’s assets is US$530 million. We subsequently changed our name to Solar Quartz Technologies Corporation in Colorado and with FINRA, and have also been cleared by FINRA to use the new trading symbol SQTX. During July 2017 the Company issued 213,402,755 new shares of common stock to SQTI in exchange for 122 (100%) of the common shares of SQTNZ. The issuance of these shares was equivalent to 95% of the Company's shares issued, after we issue in the future an additional 10,021,224 shares of common stock to those holders of our common stock immediately prior to the acquisition. The Company does not anticipate any further reorganization of its common stock. We plan to apply to trade on the more senior OTCQX exchange or NASDAQ.

 

SQTNZ is a corporation that has no prior business activity other than being the title owner of the exclusive mining and development rights for two High Purity Quartz (HPQ) Silica deposits known as Quartz Hill (represented by leases ML 30235, ML 30236 and ML 30237) and White Springs (represented by leases ML 30238 and ML 30239) located in North Queensland, Australia. Together they contain deposts in excess of 15 million tons of 99% pure High Purity Quartz which is feedstock in high demand in the marketplace to be used in the production of High Purity Quartz Sand (HPQS) according to independent professional reports.

 

HPQS is an essential primary material for the manufacture of: Photo-Voltaic (PV) solar panels; Semiconductors; all High-end Electronic products; Fiber Optical cables; Halogen Lamps; HD and LCD television screens; and Epoxy Mounding Compounds (EMC).

 

 
F-8
 
 

 

DRAFT

 

VANGUARD ENERGY CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE 4 – INCOME TAXES

 

The provision for income taxes consists of the following:

 

 

 

Fiscal Year

 

 

Fiscal Year

 

 

 

Ended

 

 

Ended

 

 

 

September 30,

2016

 

 

September 30,

2015

 

 

 

 

 

 

 

 

Current

 

$ -

 

 

$ -

 

Deferred

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Total

 

$ -

 

 

$ -

 

 

The provision for income taxes differs from the amount computed by applying the federal statutory income tax rate (34%) on operations as follows:

 

 

 

Fiscal Year

 

 

Fiscal Year

 

 

 

Ended

 

 

Ended

 

 

 

September 30,

2016

 

 

September 30,

2015

 

 

 

 

 

 

 

 

Income tax expense computed at statutory rates

 

$ -

 

 

$ -

 

Non-deductible items

 

 

 

 

 

 

 

 

Change in valuation allowance

 

 

 

 

 

 

 

 

These three are $0 and need to be corrected. Embedded table

 

 

 

 

 

 

 

 

Total

 

$ -

 

 

$ -

 

 

The components of the net deferred tax asset were as follows:

 

 

 

September 30,

2015

 

 

September 30,

2014

 

Deferred tax assets

 

 

 

 

 

 

Net operating loss carryforwards

 

$ -

 

 

$ -

 

Stock-based compensation

 

 

 

 

 

 

 

 

Deferred tax liability - oil & gas properties

 

 

 

 

 

 

 

 

Participation liability

 

 

 

 

 

 

 

 

Subtotal

 

 

 

 

 

 

 

 

Valuation allowance

 

 

 

 

 

 

 

 

Net deferred tax asset

 

$ -

 

 

$ -

 

 

See note above

 

A valuation allowance has been established to offset reported deferred tax assets. The Company's accumulated net operating losses were approximately $__________ at September 30, 2016 and begin to expire if not utilized in the year 2030.

 

 
F-9
 
 

 

DRAFT

 

VANGUARD ENERGY CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE 5 – STOCKHOLDERS' EQUITY

 

NOTE 6 – STOCK-BASED COMPENSATION

 

On January 10, 2011, the Board of Directors approved a Non-Qualified Stock Option Plan (the "Plan") which authorizes the issuance of up to 1,500,000 shares of Company common stock to persons that exercise options granted pursuant to the Plan. The Company's employees, directors, officers, consultants and advisors are eligible to be granted options pursuant to the Plan, provided

however that bona fide services must be rendered by such consultants or advisors, and such services must not be in connection with the offer or sale of securities in a capital-raising transaction. As of September 30, 2016 no options were outstanding.

 

NOTE 7 – COMMITMENTS AND CONTINGENCIES

 

Office Lease – The Company leases a virtual office lease in The Woodlands, Texas until June 30, 2019 at $197 per month..

 

Contractual Obligations – The Company’s material future contractual obligations by fiscal year as of September 30, 2016 were as follows:

 

 

 

Total

 

 

2016

 

 

Thereafter

 

Convertible notes

 

$ 70,747

 

 

$ 70,747

 

 

 

-

 

 

The Company has contractual capital commitments outstanding in the principal balance of $70,474 at September 30, 2016. Accrued interest of $36,044 is due in addition to the principal balance of the Convertible notes.

 

NOTE 8 – FAIR VALUE OF FINANCIAL INSTRUMENTS

 

The following table summarizes the financial liabilities measured at fair value on a recurring basis as of September 30, 2016 and 2015:

 

 

 

 

 

September 30,

 

 

September 30,

 

 

 

Level

 

 

2016

 

 

2015

 

 

 

 

 

 

 

 

 

 

 

Convertible Notes

 

 

1

 

 

$ 70,474

 

 

$ 70,474

 

 

 
F-10
 
 

 

DRAFT

 

EXHIBIT 31.1

 

CERTIFICATIONS

 

I, Warren Dillard, certify that:

 

1. I have reviewed this annual report on Form 10-K of Vanguard Energy Corporation;

 

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

 

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15 and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

 

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

 

 

 

b) designed such internal control over financial reporting, or cause such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

 

 

 

c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

 

 

 

d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

 

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of the internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

 

 

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

 

 

 

 

b) any fraud, whether or not material, that involves management or other employees who have significant role in the registrant's internal control over financial reporting.

 

 

__, 2017

/s/ Warren Dillard,

Warren Dillard,

Principal Executive Officer

 

 
14
 
 

 

DRAFT

 

EXHIBIT 31.2

 

CERTIFICATIONS

 

I, Warren Dillard, certify that:

 

1. I have reviewed this annual report on Form 10-K of Vanguard Energy Corporation;

 

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

 

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15 and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

 

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

 

 

 

b) designed such internal control over financial reporting, or cause such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

 

 

 

c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

 

 

 

d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

 

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of the internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

 

 

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

 

 

 

 

b) any fraud, whether or not material, that involves management or other employees who have significant role in the registrant's internal control over financial reporting.

 

__, 2017

/s/ Warren Dillard

Warren Dillard,

Principal Financial Officer

 

 
15
 
 

 

DRAFT

 

EXHIBIT 32.1

 

CERTIFICATIONS

 

In connection with the Annual Report of Vanguard Energy Corporation (the "Company") on Form 10-K for the period ending September 30, 2015 as filed with the Securities and Exchange Commission (the "Report"), Warren Dillard, the Company’s Principal Executive and Financial Officer, certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of his knowledge:

 

 

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

 

 

 

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of the Company.

 

__, 2017

By:

/s/ Warren Dillard

Warren Dillard,

Principal Executive and Financial Officer

 

Vanguard Sept 2015 10-K 2-22-16

 

 

16

 

EX-99.5 8 vnge_ex995.htm VANGUARD 10-Q JUNE 30, 2016 vnge_ex995.htm

EXHIBIT 99.5

 

DRAFT

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

x Quarterly Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934

 

For the quarterly period ended June 30, 2016

 

o Transition Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934

 

For the transition period from __________ to __________

 

Commission File Number: None

 

VANGUARD ENERGY CORPORATION

(Exact name of registrant as specified in its charter)

 

COLORADO

27-2888719

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

 

21 Waterway Ave., Ste. 300

The Woodlands, Texas 77380

(Address of principal executive offices, including Zip Code)

 

(281) 362-2725

(Issuer’s telephone number, including area code)

 

____________________________________________

(Former name or former address if changed since last report)

 

Check whether the issuer (1) filed all reports required to be filed by section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes o No x

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No x

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” “non-accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

¨

Accelerated filer

¨

Non-accelerated filer

¨

Smaller reporting company

x

    

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

 

As of September 30, 2017, the registrant had 195,004,639 outstanding shares of common stock. It was also contractually committed to issue an additional 10,021,340 shares of common stock to certain holders or their successors of its common stock prior to July 1, 2017.

 

 
1
 
 

 

DRAFT

 

FORWARD LOOKING STATEMENTS

 

The information contained in this Form 10-Q contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve risks and uncertainties, including among other things, statements regarding our capital needs, business strategy and expectations. Any statement which does not contain a historical fact may be deemed to be a forward-looking statement. In some cases, you can identify forward-looking statements by terminology such as "may", "will", "should", "expect", "plan", "intend", "anticipate", "believe", "estimate", "predict", "potential" or "continue", the negative of such terms or other comparable terminology. In evaluating forward looking statements, you should consider various factors outlined in our Form 10-K report for the year ended September 30, 2015, filed with the U.S. Securities Exchange Commission (“SEC”) and, from time to time, in other reports we file with the SEC. These factors may cause our actual results to differ materially from any forward-looking statement. We disclaim any obligation to publicly update these statements, or disclose any difference between our actual results and those reflected in these statements.

 

 
2
 
 

 

DRAFT

 

VANGUARD ENERGY CORPORATION

UNAUDITED CONSOLIDATED BALANCE SHEETS

 

 

 

June 30,

 

 

September 30,

 

 

 

2016

 

 

2015

 

 

 

(Unaudited)

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

Cash and cash equivalents

 

$ 65

 

 

$ 5

 

Other receivables

 

 

966

 

 

 

-

 

Total current assets

 

 

1,031

 

 

 

5

 

 

 

 

 

 

 

 

 

 

Fixed assets

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Total assets

 

$ 1,031

 

 

$ 5

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ DEFICIT

 

Current liabilities

 

 

 

 

 

 

 

 

Accounts payable

 

$ 14,000

 

 

$ 20,217

 

Accrued interest payable

 

 

33,391

 

 

 

38,571

 

Accrued liabilities

 

 

15,386

 

 

 

10,463

 

Short term notes payable

 

 

85,000

 

 

 

50,000

 

Other liabilities

 

 

92

 

 

 

275

 

Current portion of notes payable, net of discount $- and $71,754

 

 

70,747

 

 

 

146,937

 

Total current liabilities

 

 

218,616

 

 

 

266,463

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Stockholders' deficit

 

 

 

 

 

 

 

 

Preferred stock, $0.00001 par value; 5,000,000 shares authorized; none issued or outstanding

 

 

-

 

 

 

-

 

Common stock, $0.00001 par value; 100,000,000 and 50,000,000 shares authorized; 1,002,134 and 979,109 shares issued and outstanding

 

 

1,002

 

 

 

979

 

Additional paid-in capital

 

 

6,318,920

 

 

 

6,318,920

 

Accumulated deficit

 

 

(6,537,507 )

 

 

(6,586,357 )

 

 

 

 

 

 

 

 

 

Total stockholders' deficit

 

 

(217,585 )

 

 

(266,458 )

 

 

 

 

 

 

 

 

 

Total liabilities and stockholders' deficit

 

$ 1,031

 

 

$ 5

 

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

 

 
3
 
 

 

DRAFT

 

VANGUARD ENERGY CORPORATION

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

 

 

 

Three Months Ended June 30

 

 

Nine Months Ended June 30

 

 

 

2016

 

 

2015

 

 

2016

 

 

2015

 

 

 

(Unaudited)

 

 

(Unaudited)

 

 

(Unaudited)

 

 

(Unaudited)

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

Sales

 

$ -

 

 

$ -

 

 

$ -

 

 

$ -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs and expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative

 

 

20,563

 

 

 

11,005

 

 

 

24,795

 

 

 

90,419

 

Total costs and expenses

 

 

20,563

 

 

 

11,005

 

 

 

24,795

 

 

 

90,419

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss from operations

 

 

(20,563 )

 

 

(11,005 )

 

 

(24,795 )

 

 

(90,419 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(2,854 )

 

 

(5,510 )

 

 

(7,131 )

 

 

(24,161 )

Other interest costs

 

 

(1,603 )

 

 

-

 

 

 

(2,852 )

 

 

-

 

Gain on debt extinguishment

 

 

43,382

 

 

 

-

 

 

 

91,102

 

 

 

2,570,926

 

Total other income (expense)

 

 

38,925

 

 

 

(5,510 )

 

 

81,119

 

 

 

2,546,765

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income (Loss) before income taxes

 

 

18,362

 

 

 

(5,500 )

 

 

56,324

 

 

 

2,456,346

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Net Income (Loss)

 

$ 18,362

 

 

$ (16,515 )

 

$ 56,324

 

 

$ 2,456,346

 

Income (Loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

$ 0.02

 

 

$ (0.02 )

 

$ 0.06

 

 

$ 2.52

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding

 

 

1,002,134

 

 

 

973,139

 

 

 

996,650

 

 

 

973,139

 

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

 

 
4
 
 

    

DRAFT

 

VANGUARD ENERGY CORPORATION

UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS

   

 

 

Nine Month ended June 30,

 

 

 

2016

 

 

2015

 

 

 

(Unaudited)

 

 

(Unaudited)

 

Cash flows from operating activities

 

 

 

 

 

 

Net Income (loss)

 

$ 48,850

 

 

$ 2,456,346

 

Adjustments to reconcile net income/(loss) to net cash from operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of debt issuance costs

 

 

-

 

 

 

4,107

 

Gain on debt extinguishment

 

 

(76,190 )

 

 

(2,677,698 )

Amortization of debt discount

 

 

-

 

 

 

3,523

 

Change in operating assets and liabilities:

 

 

 

 

 

 

 

 

Other assets

 

 

(966 )

 

 

12,500

 

Accounts payable

 

 

(6,217 )

 

 

8,813

 

Accrued interest payable

 

 

(5,180 )

 

 

105,341

 

Accrued liabilities

 

 

4,923

 

 

 

-

 

Other liabilities

 

 

(183 )

 

 

-

 

Net cash from operating activities

 

 

(34,963 )

 

 

(87,068 )

 

 

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

 

 

 

Capital expenditures on oil and gas properties

 

 

-

 

 

 

-

 

Net cash from investing activities

 

 

-

 

 

 

-

 

Cash flows from financing activities

 

 

 

 

 

 

 

 

Issuance of common stock

 

 

23

 

 

 

-

 

Issuance of short term note payable

 

 

35,000

 

 

 

50,000

 

Net cash from financing activities

 

 

35,023

 

 

 

50,000

 

Net change in cash and cash equivalents

 

 

60

 

 

 

(37,068 )

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

 

 

 

 

 

 

Beginning of period

 

 

5

 

 

 

39,251

 

End of period

 

$ 65

 

 

$ 2,183

 

 

 

 

 

 

 

 

 

 

Supplemental cash flow information

 

 

Three Month ended March 31,

 

 

2016

 

 

2015

 

 

 

(Unaudited)

 

 

(Unaudited)

 

Noncash investing and financing activities:

 

 

 

 

 

 

 

 

Issuance of shares for settlement of debt

 

 

-

 

 

 

797,562

 

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

 

 
5
 
 

 

DRAFT

 

VANGUARD ENERGY CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 

NOTE 1 – BASIS OF PRESENTATION

 

These unaudited consolidated financial statements of Vanguard Energy Corporation (Vanguard or the Company) have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). In the opinion of management, these financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the results for the interim periods. Certain information, accounting policies and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been omitted pursuant to Securities and Exchange Commission (SEC) rules and regulations. These financial statements should be read along with Vanguard’s audited financial statements as of September 30, 2015.

 

Going Concern – The Company has incurred cumulative net losses since its inception and will require capital for future operating activities to take place. The Company's ability to raise new funds through the future issuances of debt or common stock is unknown. The obtainment of additional financing, the successful development of a plan of operations, and its transition, ultimately, to the attainment of profitable operations are necessary for the Company to continue operations. The ability to successfully resolve these factors raise substantial doubt about the Company's ability to continue as a going concern.

 

Future issuances of the Company's equity or debt securities will be required in order for the Company to finance operations and continue as a going concern. The financial statements do not include any adjustments that may result from the outcome of these aforementioned uncertainties.

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

As of June 30, 2016, Vanguard’s significant accounting policies were consistent with those discussed in the audited financial statements as of September 30, 2015.

 

Earnings (Loss) Per ShareBasic earnings (loss) per share have been calculated based upon the weighted-average number of common shares outstanding. Diluted earnings per share have been calculated based upon the weighted-average number of common and potential common shares. The calculation of diluted weighted-average shares outstanding for the nine-month periods ended June 30, 2016 and 2015 excludes 79,474 shares, issuable pursuant to outstanding warrants, stock options and debt conversion features because their effect is anti-dilutive.

 

NOTE 3 – SUBSEQUENT EVENT

 

On July 1, 2017 the company acquired all of the shares of Solar Quartz Technologies Limited, a company incorporated in New Zealand (“SQTNZ”). These shares were purchased from Solar Quartz Technologies, Inc. (“SQTI”). The agreed value of that company’s assets is US$530 million. We subsequently changed our name to Solar Quartz Technologies Corporation in Colorado and with FINRA, and have also been cleared by FINRA to use the new trading symbol SQTX. In July 2017 the Company issued 213,402,755 new shares of common stock to SQTI in exchange for 122 (100%) of the common shares of SQTNZ. The issuance of these shares was equivalent to 95% of the Company's shares issued, after we issue an additional 10,021,224 shares of common stock to those holders of our common stock immediately prior to the acquisition. The Company does not anticipate any further reorganization of its common stock. We are currently preparing filing all necessary reports to the SEC with audited financial statements to resume our status as fully reporting with the SEC, and subsequently apply to trade on the more senior OTCQX exchange or NASDAQ.

 

 
6
 
 

 

DRAFT

 

VANGUARD ENERGY CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 

SQTNZ is a corporation that has no prior business activity other than being the title owner of the exclusive mining and development rights for two High Purity Quartz (HPQ) Silica deposits known as Quartz Hill (represented by leases ML 30235, ML 30236 and ML 30237) and White Springs (represented by leases ML 30238 and ML 30239) located in North Queensland, Australia. Together they contain deposits in excess of 15 million tons of 99% pure High Purity Quartz which is feedstock in high demand in the marketplace to be used in the production of High Purity Quartz Sand (HPQS) based on independent professional reports.

 

HPQS is an essential primary material for the manufacture of: Photo-Voltaic (PV) solar panels; Semiconductors; all High-end Electronic products; Fiber Optical cables; Halogen Lamps; HD and LCD television screens; and Epoxy Mounding Compounds (EMC).

 

NOTE 4 – CONVERTIBLE NOTES PAYABLE

 

At June 30, 2016, convertible notes totaling $70,747 remained outstanding together with accrued interest of $33,391.

 

NOTE 5 – INCOME TAXES

 

The Company estimates its annual effective income tax rate in recording its quarterly provision for income taxes in the various jurisdictions in which the Company operates. Statutory tax rate changes and other significant or unusual items are recognized as discrete items in the quarter in which they occur. The Company recorded no income tax expense for the nine-month period ended June 30, 2016 because the Company estimates it will record no income tax expense for the tax year ending September 30, 2016. The Company has a valuation allowance that fully offsets net deferred tax assets.

 

* * * * *

 

 
7
 
 

 

DRAFT

 

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND PLAN OF OPERATION

 

In July 2017 we acquired Solar Quartz Technologies Limited, a New Zealand corporation, as described in Note 3 to the Financial Statements above. We are now seeking new financings to meet development and general operating obligations and to justify a market for our stock. Absent achieving such a transaction in the near future, our viability is in doubt. As of September 30, 2017, the Company has not been successful in meeting this goal; however, work is underway to secure such financing and we believe that such financing of the Company is possible in the near future.

 

ITEM 4. CONTROLS AND PROCEDURES.

 

(a) We maintain a system of controls and procedures designed to ensure that information required to be disclosed in reports filed or submitted under the Securities Exchange Act of 1934, as amended (“1934 Act”), is recorded, processed, summarized and reported within time periods specified in the SEC's rules and forms and to ensure that information required to be disclosed by us in the reports that we file or submit under the 1934 Act is accumulated and communicated to our management, including our Principal Executive and Financial Officer, as appropriate to allow timely decisions regarding required disclosure. As of June 30, 2016, our Principal Executive and Financial Officer evaluated the effectiveness of the design and operation of our disclosure controls and procedures. Based on that evaluation, our Principal Executive and Financial Officer concluded that our disclosure controls and procedures were effective.

 

(b) Changes in Internal Controls. There were no changes in our internal control over financial reporting during the nine-month period ended June 30, 2016 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

 
8
 
 

 

DRAFT

 

PART II

 

ITEM 6. EXHIBITS

 

Exhibits

 

 

 

 

 

31.1

 

Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 

31.2

 

Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 

32

 

Certification pursuant to Section 906 of the Sarbanes-Oxley Act.

 

 
9
 
 

 

DRAFT

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

VANGUARD ENERGY CORPORATION

       

Date: ______________

By: /s/ Warren M. Dillard

 

 

Warren M. Dillard,

 
   

Chief Executive, Financial and

 
    Accounting Officer  

 
10
 
 

 

DRAFT

 

EXHIBIT 31.1

 

CERTIFICATIONS

 

I, Warren M. Dillard, certify that;

  

1. I have reviewed this quarterly report on Form 10-Q of Vanguard Energy Corporation;

 

 

2. Based on my knowledge, this report, does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by the report;

 

 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

 

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

 

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

 

 

 

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

 

 

 

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

 

 

 

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

 

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

 

 

 

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

 

Date: ______________

By:

/s/ Warren M. Dillard

Warren M. Dillard,

Principal Executive Officer

 

 
11
 
 

 

DRAFT

 

EXHIBIT 31.2

 

CERTIFICATIONS

I, Warren M. Dillard, certify that;

 

1. I have reviewed this quarterly report on Form 10-Q of Vanguard Energy Corporation;

 

 

2. Based on my knowledge, this report, does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by the report;

 

 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

 

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

 

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

 

 

 

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

 

 

 

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

 

 

 

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

 

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

 

 

 

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

 

Date: ___________

By:

/s/ Warren M. Dillard

Warren M. Dillard,

Principal Financial Officer

 

 
12
 
 

 

DRAFT

 

EXHIBIT 32

 

In connection with the Quarterly Report of Vanguard Energy Corporation (the “Company”) on Form 10-Q for the period ending June 30, 2016 as filed with the Securities and Exchange Commission (the “Report”), Warren Dillard, the Principal Executive and Financial Officer of the Company, certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of his knowledge:

 

 

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

 

 

 

(2) The information contained in the Report fairly presents, in all material respects the financial condition and results of operations of the Company.

 

 

Date: ____________

By:

/s/ Warren M. Dillard

Warren M. Dillard,

Principal Executive and Financial Officer

 

Vanguard June 30, 2016 10-Q 9-22-17

 

 

13

 

EX-99.6 9 vnge_ex996.htm VANGUARD 10-Q FY 16 MARCH 31, 2016 vnge_ex996.htm

 

EXHIBIT 99.6

 

DRAFT

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

x Quarterly Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934

 

For the quarterly period ended March 31, 2016

 

o Transition Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934

 

For the transition period from __________ to __________

 

Commission File Number: None

 

VANGUARD ENERGY CORPORATION

(Exact name of registrant as specified in its charter)

 

COLORADO

 

27-2888719

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

 

21 Waterway Ave., Ste. 300

The Woodlands, Texas 77380

(Address of principal executive offices, including Zip Code)

 

(281) 362-2725

(Issuer’s telephone number, including area code)

 

____________________________________________

(Former name or former address if changed since last report)

 

Check whether the issuer (1) filed all reports required to be filed by section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes o No x

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No x

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” “non-accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

¨

Accelerated filer

¨

Non-accelerated filer

¨

Smaller reporting company

x

  

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

  

As of September 30, 2017, the registrant had 195,004,639 outstanding shares of common stock. It was also contractually committed to issue an additional 10,021,340 shares of common stock to certain holders or their successors of its common stock prior to July 1, 2017.

 

 
1
 
 

 

DRAFT

 

FORWARD LOOKING STATEMENTS

 

The information contained in this Form 10-Q contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve risks and uncertainties, including among other things, statements regarding our capital needs, business strategy and expectations. Any statement which does not contain a historical fact may be deemed to be a forward-looking statement. In some cases, you can identify forward-looking statements by terminology such as "may", "will", "should", "expect", "plan", "intend", "anticipate", "believe", "estimate", "predict", "potential" or "continue", the negative of such terms or other comparable terminology. In evaluating forward looking statements, you should consider various factors outlined in our Form 10-K report for the year ended September 30, 2015, filed with the U.S. Securities Exchange Commission (“SEC”) and, from time to time, in other reports we file with the SEC. These factors may cause our actual results to differ materially from any forward-looking statement. We disclaim any obligation to publicly update these statements, or disclose any difference between our actual results and those reflected in these statements.

 

 
2
 
 

 

DRAFT

 

VANGUARD ENERGY CORPORATION

UNAUDITED CONSOLIDATED BALANCE SHEETS

 

 

 

March 31,

 

 

September 30,

 

 

2016

 

 

2015

 

 

 

(Unaudited)

 

 

 

 

ASSETS

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

Cash and cash equivalents

 

$ 9,975

 

 

$ 5

 

Other assets

 

 

-

 

 

 

-

 

Total current assets

 

 

9,975

 

 

 

5

 

 

 

 

 

 

 

 

 

 

Fixed assets

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Total assets

 

$ 9,975

 

 

$ 5

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ DEFICIT

Current liabilities

 

 

 

 

 

 

 

 

Accounts payable

 

$ 19,983

 

 

$ 20,217

 

Accrued interest payable

 

 

30,766

 

 

 

38,571

 

Accrued liabilities

 

 

13,290

 

 

 

10,463

 

Short term notes payable

 

 

85,000

 

 

 

50,000

 

Other liabilities

 

 

300

 

 

 

275

 

Current portion of notes payable, net of discount $- and $71,754

 

 

70,747

 

 

 

146,937

 

Total current liabilities

 

 

220,086

 

 

 

266,463

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Stockholders' deficit

 

 

 

 

 

 

 

 

Preferred stock, $0.00001 par value; 5,000,000 shares authorized; none issued or outstanding

 

 

-

 

 

 

-

 

Common stock, $0.00001 par value; 100,000,000 and 50,000,000 shares authorized; 1,002,134 and 979,109 shares issued and outstanding

 

 

1,002

 

 

 

979

 

Additional paid-in capital

 

 

6,318,920

 

 

 

6,318,920

 

Accumulated deficit

 

 

(6,530,033 )

 

 

(6,586,357 )

 

 

 

 

 

 

Total stockholders' deficit

 

 

(210,111 )

 

 

(266,458 )

 

 

 

 

 

 

 

 

 

Total liabilities and stockholders' deficit

 

$ 9,975

 

 

$ 5

 

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

 

 
3
 
 

 

DRAFT

 

VANGUARD ENERGY CORPORATION

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

  

 

 

Three Months Ended March 31

 

 

Six Months Ended March 31

 

 

 

2016

 

 

2015

 

 

2016

 

 

2015

 

 

 

(Unaudited)

 

 

(Unaudited)

 

 

(Unaudited)

 

 

(Unaudited)

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

Sales

 

$ -

 

 

$ -

 

 

$ -

 

 

$ -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs and expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative

 

 

20,563

 

 

 

11,005

 

 

 

24,795

 

 

 

98,035

 

Total costs and expenses

 

 

20,563

 

 

 

11,005

 

 

 

24,795

 

 

 

98,035

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss from operations

 

 

(20,563 )

 

 

(11,005 )

 

 

(24,795 )

 

 

(98,035 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(2,854 )

 

 

(5,510 )

 

 

(7,131 )

 

 

(18,650 )

Other interest costs

 

 

(1,603 )

 

 

-

 

 

 

(2,852 )

 

 

-

 

Gain on debt extinguishment

 

 

43,382

 

 

 

-

 

 

 

91,102

 

 

 

2,570,926

 

Total other income (expense)

 

 

38,925

 

 

 

(5,510 )

 

 

81,119

 

 

 

2,552,276

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income (Loss) before income taxes

 

 

18,362

 

 

 

(5,500 )

 

 

56,324

 

 

 

2,454,241

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income (Loss)

 

$ 18,362

 

 

$ (16,515 )

 

$ 56,324

 

 

$ 2,454,241

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (Loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

$ 0.02

 

 

$ (0.02 )

 

$ 0.06

 

 

$ 2.52

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding

 

 

1,002,134

 

 

 

973,139

 

 

 

996,650

 

 

 

973,139

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

 

 
4
 
 

    

DRAFT

 

VANGUARD ENERGY CORPORATION

UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS

  

 

 

Six Months ended March 31,

 

 

 

2016

 

 

2015

 

 

 

(Unaudited)

 

 

(Unaudited)

 

Cash flows from operating activities

 

 

 

 

 

 

Net Income (loss)

 

$ 56,324

 

 

$ 2,454,241

 

Adjustments to reconcile net income/(loss) to net cash from operating activities:

 

 

 

 

 

 

 

 

Amortization of debt issuance costs

 

 

-

 

 

 

4,107

 

Gain on debt extinguishment

 

 

(76,190 )

 

 

(2,677,698 )

Asset retirement obligation accretion

 

 

-

 

 

 

-

 

Amortization of debt discount

 

 

-

 

 

 

3,523

 

Change in operating assets and liabilities:

 

 

 

 

 

 

 

 

Other assets

 

 

-

 

 

 

12,500

 

Accounts payable

 

 

(234 )

 

 

55,945

 

Accrued interest payable

 

 

(7,805 )

 

 

99,831

 

Accrued liabilities

 

 

2,827

 

 

 

-

 

Other liabilities

 

 

25

 

 

 

8,332

 

Net cash from operating activities

 

 

(25,053 )

 

 

(39,219 )

 

 

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

 

 

 

Issuance of common stock

 

 

23

 

 

 

-

 

Issuance of short term note payable

 

 

35,000

 

 

 

-

 

Net cash from financing activities

 

 

35,023

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Net change in cash and cash equivalents

 

 

9,970

 

 

 

(39,219 )

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

 

 

 

 

 

 

Beginning of period

 

 

5

 

 

 

39,251

 

End of period

 

$ 9,975

 

 

$ 32

 

 

 

 

 

 

 

 

 

 

Supplemental cash flow information

 

 

Three Month ended March 31,

 

 

2016

 

 

2015

 

 

 

(Unaudited)

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

Noncash investing and financing activities:

 

 

 

 

 

 

 

 

Issuance of shares for settlement of debt

 

 

-

 

 

 

797,562

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

 

 
5
 
 

 

DRAFT

 

VANGUARD ENERGY CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 

NOTE 1 – BASIS OF PRESENTATION

 

These unaudited consolidated financial statements of Vanguard Energy Corporation (Vanguard or the Company) have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). In the opinion of management, these financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the results for the interim periods. Certain information, accounting policies and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been omitted pursuant to Securities and Exchange Commission (SEC) rules and regulations. These financial statements should be read along with Vanguard’s audited financial statements as of September 30, 2015.

 

Going Concern – The Company has incurred cumulative net losses since its inception and will require capital for future operating activities to take place. The Company's ability to raise new funds through the future issuances of debt or common stock is unknown. The obtainment of additional financing, the successful development of a plan of operations, and its transition, ultimately, to the attainment of profitable operations are necessary for the Company to continue operations. The ability to successfully resolve these factors raise substantial doubt about the Company's ability to continue as a going concern.

 

Future issuances of the Company's equity or debt securities will be required in order for the Company to finance operations and continue as a going concern. The financial statements do not include any adjustments that may result from the outcome of these aforementioned uncertainties.

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

As of March 31, 2016, Vanguard’s significant accounting policies were consistent with those discussed in the audited financial statements as of September 30, 2015.

 

Earnings (Loss) Per ShareBasic earnings (loss) per share have been calculated based upon the weighted-average number of common shares outstanding. Diluted earnings per share have been calculated based upon the weighted-average number of common and potential common shares. The calculation of diluted weighted-average shares outstanding for the six-month periods ended March 31, 2016 and 2015 excludes 62,974 and 79,474 shares, respectively, issuable pursuant to outstanding warrants, stock options and debt conversion features because their effect is anti-dilutive.

   

NOTE 3 – SUBSEQUENT EVENT

  

On July 1, 2017 the company acquired all of the shares of Solar Quartz Technologies Limited, a company incorporated in New Zealand (“SQTNZ”). These shares were purchased from Solar Quartz Technologies, Inc. (“SQTI”). The agreed value of that company’s assets is US$530 million. We subsequently changed our name to Solar Quartz Technologies Corporation in Colorado and with FINRA, and have also been cleared by FINRA to use the new trading symbol SQTX. In July 2017 the Company issued 213,402,755 new shares of common stock to SQTI in exchange for 122 (100%) of the common shares of SQTNZ. The issuance of these shares was equivalent to 95% of the Company's shares issued, after we issue an additional 10,021,224 shares of common stock to those holders of our common stock immediately prior to the acquisition. The Company does not anticipate any further reorganization of its common stock. We are currently preparing filing all necessary reports to the SEC with audited financial statements to resume our status as fully reporting with the SEC, and subsequently apply to trade on the more senior OTCQX exchange or NASDAQ.

 

 
6
 
 

 

DRAFT

 

VANGUARD ENERGY CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 

SQTNZ is a corporation that has no prior business activity other than being the title owner of the exclusive mining and development rights for two High Purity Quartz (HPQ) Silica deposits known as Quartz Hill (represented by leases ML 30235, ML 30236 and ML 30237) and White Springs (represented by leases ML 30238 and ML 30239) located in North Queensland, Australia. Together they contain deposits in excess of 15 million tons of 99% pure High Purity Quartz which is feedstock in high demand in the marketplace to be used in the production of High Purity Quartz Sand (HPQS) based on independent professional reports.

 

HPQS is an essential primary material for the manufacture of: Photo-Voltaic (PV) solar panels; Semiconductors; all High-end Electronic products; Fiber Optical cables; Halogen Lamps; HD and LCD television screens; and Epoxy Mounding Compounds (EMC).

 

NOTE 4 – CONVERTIBLE NOTES PAYABLE

 

At March 31, 2016, convertible notes totaling $70,747 remained outstanding together with accrued interest of $30,766.

 

NOTE 5 – INCOME TAXES

 

The Company estimates its annual effective income tax rate in recording its quarterly provision for income taxes in the various jurisdictions in which the Company operates. Statutory tax rate changes and other significant or unusual items are recognized as discrete items in the quarter in which they occur. The Company recorded no income tax expense for the six-month period ended March 31, 2016 because the Company estimates it will record no income tax expense for the tax year ending September 30, 2016. The Company has a valuation allowance that fully offsets net deferred tax assets.

 

* * * * *

 

 
7
 
 

 

DRAFT

 

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND PLAN OF OPERATION

 

In July 2017 we acquired Solar Quartz Technologies Limited, a New Zealand corporation, as described in Note 3 to the Financial Statements above. We are now seeking new financings to meet development and general operating obligations and to justify a market for our stock. Absent achieving such a transaction in the near future, our viability is in doubt. As of September 30, 2017, the Company has not been successful in meeting this goal; however, work is underway to secure such financing and we believe that such financing of the Company is possible in the near future.

 

ITEM 4. CONTROLS AND PROCEDURES.

 

(a) We maintain a system of controls and procedures designed to ensure that information required to be disclosed in reports filed or submitted under the Securities Exchange Act of 1934, as amended (“1934 Act”), is recorded, processed, summarized and reported within time periods specified in the SEC's rules and forms and to ensure that information required to be disclosed by us in the reports that we file or submit under the 1934 Act is accumulated and communicated to our management, including our Principal Executive and Financial Officer, as appropriate to allow timely decisions regarding required disclosure. As of March 31, 2016, our Principal Executive and Financial Officer evaluated the effectiveness of the design and operation of our disclosure controls and procedures. Based on that evaluation, our Principal Executive and Financial Officer concluded that our disclosure controls and procedures were effective.

 

(b) Changes in Internal Controls. There were no changes in our internal control over financial reporting during the six-month period ended March 31, 2016 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

 
8
 
 

 

DRAFT

 

PART II

 

ITEM 6. EXHIBITS

Exhibits

 

 

 

 

 

31.1

 

Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 

31.2

 

Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 

32

 

Certification pursuant to Section 906 of the Sarbanes-Oxley Act.

 

 
9
 
 

 

DRAFT

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

VANGUARD ENERGY CORPORATION

       

Date: ______________

By: /s/ Warren M. Dillard

 

 

Warren M. Dillard

 
   

Chief Executive, Financial and Accounting Officer

 

 
10
 
 

 

DRAFT

 

EXHIBIT 31.1

 

CERTIFICATIONS

 

I, Warren M. Dillard, certify that;

 

1. I have reviewed this quarterly report on Form 10-Q of Vanguard Energy Corporation;

 

 

2. Based on my knowledge, this report, does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by the report;

 

 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

 

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

 

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its unaudited consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

 

 

 

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

 

 

 

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

 

 

 

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

 

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

 

 

 

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

 

 

 

Date: ______________

By:

/s/ Warren M. Dillard

 

Warren M. Dillard,

 

Principal Executive Officer

 

 
11
 
 

 

DRAFT

 

EXHIBIT 31.2

 

CERTIFICATIONS

 

I, Warren M. Dillard, certify that;

 

1. I have reviewed this quarterly report on Form 10-Q of Vanguard Energy Corporation;

 

 

2. Based on my knowledge, this report, does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by the report;

 

 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

 

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

 

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its unaudited consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

 

 

 

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

 

 

 

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

 

 

 

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

 

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

 

 

 

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

 

 

 

Date: ___________

By:

/s/ Warren M. Dillard

 

Warren M. Dillard,

 

Principal Financial Officer

 

 
12
 
 

 

DRAFT

 

EXHIBIT 32

 

In connection with the Quarterly Report of Vanguard Energy Corporation (the “Company”) on Form 10-Q for the period ending December 31, 2015 as filed with the Securities and Exchange Commission (the “Report”), Warren Dillard, the Principal Executive and Financial Officer of the Company, certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of his knowledge:

 

 

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

 

 

 

(2) The information contained in the Report fairly presents, in all material respects the financial condition and results of operations of the Company.

 

Date: ____________

By:

/s/ Warren M. Dillard

 

Warren M. Dillard,

 

Principal Executive and Financial Officer

 

Vanguard March 31, 2016 10-Q 9-22-17

 

 

13

 

EX-99.7 10 vnge_ex997.htm VANGUARD 10-Q DECEMBER 31, 2015 vnge_ex997.htm

EXHIBIT 99.7

 

DRAFT

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

x Quarterly Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934

 

For the quarterly period ended December 31, 2015

 

o Transition Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934

 

For the transition period from __________ to __________

 

Commission File Number: None

 

VANGUARD ENERGY CORPORATION

(Exact name of registrant as specified in its charter)

 

COLORADO

27-2888719

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

 

21 Waterway Ave., Ste. 300

The Woodlands, Texas 77380

(Address of principal executive offices, including Zip Code)

 

(281) 362-2725

(Issuer’s telephone number, including area code)

 

____________________________________________

(Former name or former address if changed since last report)

 

Check whether the issuer (1) filed all reports required to be filed by section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes o No x

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No x

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” “non-accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

  

Large accelerated filer

¨

Accelerated filer

¨

Non-accelerated filer

¨

Smaller reporting company

x

  

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

 

As of September 30, 2017, the registrant had 195,004,639 outstanding shares of common stock. It was also contractually committed to issue an additional 10,021,340 shares of common stock to certain holders or their successors of its common stock prior to July 1, 2017.

 

 
1
 
 

 

DRAFT

 

FORWARD LOOKING STATEMENTS

 

The information contained in this Form 10-Q contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve risks and uncertainties, including among other things, statements regarding our capital needs, business strategy and expectations. Any statement which does not contain a historical fact may be deemed to be a forward-looking statement. In some cases, you can identify forward-looking statements by terminology such as "may", "will", "should", "expect", "plan", "intend", "anticipate", "believe", "estimate", "predict", "potential" or "continue", the negative of such terms or other comparable terminology. In evaluating forward looking statements, you should consider various factors outlined in our Form 10-K report for the year ended September 30, 2015, filed with the U.S. Securities Exchange Commission (“SEC”) and, from time to time, in other reports we file with the SEC. These factors may cause our actual results to differ materially from any forward-looking statement. We disclaim any obligation to publicly update these statements, or disclose any difference between our actual results and those reflected in these statements.

 

 
2
 
 

 

DRAFT

 

VANGUARD ENERGY CORPORATION

UNAUDITED CONSOLIDATED BALANCE SHEETS

 

 

 

December 31,

 

 

September 30,

 

 

December 31,

 

 

2015

 

 

2015

 

 

2014

 

 

 

(Unaudited)

 

 

 

 

 

(Unaudited)

 

ASSETS

 

 

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$ (231 )

 

$ 5

 

 

$ 120

 

Other assets

 

 

-

 

 

 

-

 

 

 

-

 

Total current assets

 

 

(231 )

 

 

5

 

 

 

120

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other assets

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

$ (231 )

 

$ 5

 

 

$ 120

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ DEFICIT

 

Current liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable

 

$ 23,253

 

 

$ 20,217

 

 

$ 45,606

 

Accrued interest payable

 

 

35,024

 

 

 

38,571

 

 

 

22,041

 

Accrued liabilities

 

 

11,713

 

 

 

10,463

 

 

 

16,933

 

Other liabilities

 

 

685

 

 

 

275

 

 

 

-

 

Notes Payable-Short Terms

 

 

50,000

 

 

 

50,000

 

 

 

-

 

Convertible Notes Payable

 

 

107,028

 

 

 

146,937

 

 

 

146,913

 

Total current liabilities

 

 

227,703

 

 

 

266,463

 

 

 

231,517

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Long Term Liabilities

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

_

 

Total liabilities

 

 

227,703

 

 

 

266,463

 

 

 

231,517

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders' deficit

 

 

 

 

 

 

 

 

 

 

 

 

Preferred stock, $0.00001 par value; 5,000,000 shares authorized, none issued or outstanding

 

 

-

 

 

 

-

 

 

 

-

 

Common stock, $0.00001 par value; 100,000,000 and 50,000,000 shares authorized at December 31, 2015 and 2014, respectively, 991,119 and 115,210 shares issued and outstanding December 31, 2015 and 2014, respectively

 

 

991

 

 

 

979

 

 

 

973

 

Additional paid-in capital

 

 

6,318,920

 

 

 

6,318,920

 

 

 

6,318,920

 

Accumulated deficit

 

 

(6,547,845 )

 

 

(6,586,357 )

 

 

(6,551,290 )

 

 

 

 

 

 

 

 

 

 

 

 

 

Total stockholders' deficit

 

 

(227,934 )

 

 

(266,458 )

 

 

(231,397 )

 

 

 

 

 

 

 

 

 

 

 

 

 

Total liabilities and stockholders' deficit

 

$ (231 )

 

$ 5

 

 

$ 120

 

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

 

 
3
 
 

  

DRAFT

 

VANGUARD ENERGY CORPORATION

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

 

 

 

Three Months Ended

December 31

 

 

 

2015

 

 

2014

 

 

 

(Unaudited)

 

 

(Unaudited)

 

Revenues

 

 

 

 

 

 

Sales

 

$ -

 

 

$ -

 

 

 

 

 

 

 

 

 

 

Costs and expenses

 

 

 

 

 

 

 

 

General and administrative

 

 

3,682

 

 

 

87,030

 

Total costs and expenses

 

 

3,682

 

 

 

87,030

 

 

 

 

 

 

 

 

 

 

Loss from operations

 

 

(3,682 )

 

 

(87,030 )

 

 

 

 

 

 

 

 

 

Other income (expense)

 

 

 

 

 

 

 

 

Interest expense

 

 

(5,526 )

 

 

(13,140 )

Gain from extinguishment of debt

 

 

47,720

 

 

 

2,570,927

 

Total other income (expense)

 

 

42,194

 

 

 

2,557,787

 

 

 

 

 

 

 

 

 

 

Net Income (Loss) before income taxes

 

 

38,512

 

 

 

2,470,757

 

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Net Income (Loss)

 

$ 38,512

 

 

$ 2,470,757

 

 

 

 

 

 

 

 

 

 

Income (Loss) per share:

 

 

 

 

 

 

 

 

Basic and diluted

 

$ 0.04

 

 

$ 2.54

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding

 

 

989,291

 

 

 

973,139

 

  

The accompanying notes are an integral part of these unaudited consolidated financial statements.

 

 
4
 
 

   

DRAFT

 

VANGUARD ENERGY CORPORATION

UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS

  

 

 

Three Month ended

December 31,

 

 

 

2015

 

 

2014

 

 

 

(Unaudited)

 

 

(Unaudited)

 

Cash flows from operating activities

 

 

 

 

 

 

Net Income (loss)

 

$ 38,512

 

 

$ 2,470,757

 

Adjustments to reconcile net income/(loss) to net cash from operating activities:

 

 

 

 

 

 

 

 

Amortization of debt issuance costs

 

 

-

 

 

 

4,107

 

Gain on debt extinguishment

 

 

-

 

 

 

(2,677,698 )

Amortization of debt discount

 

 

(39,897 )

 

 

3,523

 

Change in operating assets and liabilities:

 

 

 

 

 

 

 

 

Other assets

 

 

-

 

 

 

12,500

 

Accounts payable

 

 

3,036

 

 

 

46,127

 

Accrued interest payable

 

 

(3,547 )

 

 

94,321

 

Accrued liabilities

 

 

1,250

 

 

 

-

 

Other liabilities

 

 

410

 

 

 

7,232

 

Net cash from operating activities

 

 

(236 )

 

 

(39,131 )

 

 

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

-

 

 

 

-

 

Net cash from investing activities

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

 

 

 

Repayment of note payable

 

 

-

 

 

 

-

 

Net cash from financing activities

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Net change in cash and cash equivalents

 

 

(236 )

 

 

(39,131 )

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

 

 

 

 

 

 

Beginning of period

 

 

5

 

 

 

39,251

 

 

 

 

 

 

 

 

 

 

End of period

 

$ (231 )

 

$ 120

 

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

 

 
5
 
 

 

DRAFT

 

VANGUARD ENERGY CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 

NOTE 1 – BASIS OF PRESENTATION

 

These unaudited consolidated financial statements of Vanguard Energy Corporation (Vanguard or the Company) have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). In the opinion of management, these financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the results for the interim periods. Certain information, accounting policies and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been omitted pursuant to Securities and Exchange Commission (SEC) rules and regulations. These financial statements should be read along with Vanguard’s audited financial statements as of September 30, 2015.

 

Going Concern – The Company has incurred cumulative net losses since its inception and will require capital for future operating activities to take place. The Company's ability to raise new funds through the future issuances of debt or common stock is unknown. The obtainment of additional financing, the successful development of a plan of operations, and its transition, ultimately, to the attainment of profitable operations are necessary for the Company to continue operations. The ability to successfully resolve these factors raise substantial doubt about the Company's ability to continue as a going concern.

 

Future issuances of the Company's equity or debt securities will be required in order for the Company to finance operations and continue as a going concern. The financial statements do not include any adjustments that may result from the outcome of these aforementioned uncertainties.

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

As of December 31, 2015, Vanguard’s significant accounting policies were consistent with those discussed in the audited financial statements as of September 30, 2015.

 

Earnings (Loss) Per ShareBasic earnings (loss) per share have been calculated based upon the weighted-average number of common shares outstanding. Diluted earnings per share have been calculated based upon the weighted-average number of common and potential common shares. The calculation of diluted weighted-average shares outstanding for the three-month periods ended December 31, 2015 and 2014 excludes 79,474 and 79,474 shares, respectively, issuable pursuant to outstanding warrants, stock options and debt conversion features because their effect is anti-dilutive.

 

NOTE 3 – SUBSEQUENT EVENT

 

On July 1, 2017 the company acquired all of the shares of Solar Quartz Technologies Limited, a company incorporated in New Zealand (“SQTNZ”). These shares were purchased from Solar Quartz Technologies, Inc. (“SQTI”). The agreed value of that company’s assets is US$530 million. We subsequently changed our name to Solar Quartz Technologies Corporation in Colorado and with FINRA, and have also been cleared by FINRA to use the new trading symbol SQTX. In July 2017 the Company issued 213,402,755 new shares of common stock to SQTI in exchange for 122 (100%) of the common shares of SQTNZ. The issuance of these shares was equivalent to 95% of the Company's shares issued, after we issue an additional 10,021,224 shares of common stock to those holders of our common stock immediately prior to the acquisition. The Company does not anticipate any further reorganization of its common stock. We are currently preparing filing all necessary reports to the SEC with audited financial statements to resume our status as fully reporting with the SEC, and subsequently apply to trade on the more senior OTCQX exchange or NASDAQ.

 

 
6
 
 

 

DRAFT

 

VANGUARD ENERGY CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 

SQTNZ is a corporation that has no prior business activity other than being the title owner of the exclusive mining and development rights for two High Purity Quartz (HPQ) Silica deposits known as Quartz Hill (represented by leases ML 30235, ML 30236 and ML 30237) and White Springs (represented by leases ML 30238 and ML 30239) located in North Queensland, Australia. Together they contain in deposits in excess of 15 million tons of 99% pure High Purity Quartz which is feedstock in high demand in the marketplace to be used in the production of High Purity Quartz Sand (HPQS) based on independent professional reports.

 

HPQS is an essential primary material for the manufacture of: Photo-Voltaic (PV) solar panels; Semiconductors; all High-end Electronic products; Fiber Optical cables; Halogen Lamps; HD and LCD television screens; and Epoxy Mounding Compounds (EMC).

 

NOTE 4 – CONVERTIBLE NOTES PAYABLE

 

At December 31 2015, convertible notes totaling $107,028 remained outstanding together with accrued interest of $35,024.

 

NOTE 5 – INCOME TAXES

 

The Company estimates its annual effective income tax rate in recording its quarterly provision for income taxes in the various jurisdictions in which the Company operates. Statutory tax rate changes and other significant or unusual items are recognized as discrete items in the quarter in which they occur. The Company recorded no income tax expense for the three-month period ended December 31, 2015 because the Company estimates it will record no income tax expense for the tax year ending September 30, 2016. The Company has a valuation allowance that fully offsets net deferred tax assets.

 

* * * * *

 

 
7
 
 

 

DRAFT

 

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND PLAN OF OPERATION

 

In July 2017 we acquired Solar Quartz Technologies Limited, a New Zealand corporation, as described in Note 3 to the Financial Statements above. We are now seeking new financings to meet development and general operating obligations and to justify a market for our stock. Absent achieving such a transaction in the near future, our viability is in doubt. As of September 30, 2017, the Company has not been successful in meeting this goal; however, work is underway to secure such financing and we believe that such financing of the Company is possible in the near future.

 

ITEM 4. CONTROLS AND PROCEDURES.

 

(a) We maintain a system of controls and procedures designed to ensure that information required to be disclosed in reports filed or submitted under the Securities Exchange Act of 1934, as amended (“1934 Act”), is recorded, processed, summarized and reported within time periods specified in the SEC's rules and forms and to ensure that information required to be disclosed by us in the reports that we file or submit under the 1934 Act is accumulated and communicated to our management, including our Principal Executive and Financial Officer, as appropriate to allow timely decisions regarding required disclosure. As of December 31, 2015, our Principal Executive and Financial Officer evaluated the effectiveness of the design and operation of our disclosure controls and procedures. Based on that evaluation, our Principal Executive and Financial Officer concluded that our disclosure controls and procedures were effective.

 

(b) Changes in Internal Controls. There were no changes in our internal control over financial reporting during the three month period ended December 31, 2015 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

 
8
 
 

 

DRAFT

 

PART II

 

ITEM 6. EXHIBITS

Exhibits

 

 

 

 

 

31.1

 

Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 

31.2

 

Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 

32

 

Certification pursuant to Section 906 of the Sarbanes-Oxley Act.

 

 
9
 
 

 

DRAFT

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

VANGUARD ENERGY CORPORATION

       

Date: ______________

By: /s/ Warren M. Dillard

 

 

Warren M. Dillard,

 
   

Chief Executive, Financial and Accounting Officer

 

 
10
 
 

 

DRAFT

 

EXHIBIT 31.1

 

CERTIFICATIONS

 

I, Warren M. Dillard, certify that;

 

1. I have reviewed this quarterly report on Form 10-Q of Vanguard Energy Corporation;

 

 

2. Based on my knowledge, this report, does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by the report;

 

 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

 

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

 

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its unaudited consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

 

 

 

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

 

 

 

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

 

 

 

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

 

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

 

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

 

Date: ______________

By:

/s/ Warren M. Dillard

Warren M. Dillard,

Principal Executive Officer

 

 
11
 
 

 

DRAFT

 

EXHIBIT 31.2

 

CERTIFICATIONS

 

I, Warren M. Dillard, certify that;

 

1. I have reviewed this quarterly report on Form 10-Q of Vanguard Energy Corporation;

 

 

2. Based on my knowledge, this report, does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by the report;

 

 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

 

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

 

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its unaudited consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

 

 

 

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

 

 

 

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

 

 

 

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

 

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

 

 

 

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

 

 

 

Date: ____________

By:

/s/ Warren M. Dillard

Warren M. Dillard,

Principal Financial Officer

 

 
12
 
 

 

DRAFT

 

EXHIBIT 32

 

In connection with the Quarterly Report of Vanguard Energy Corporation (the “Company”) on Form 10-Q for the period ending December 31, 2015 as filed with the Securities and Exchange Commission (the “Report”), Warren Dillard, the Principal Executive and Financial Officer of the Company, certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of his knowledge:

 

 

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

 

 

 

(2) The information contained in the Report fairly presents, in all material respects the financial condition and results of operations of the Company.

 

 

Date: ____________

By:

/s/ Warren M. Dillard

Warren M. Dillard,

Principal Executive and Financial Officer

 

 

13

 

EX-99.8 11 vnge_ex998.htm DRAFT SEPT 2015 10-K vnge_ex998.htm

EXHIBIT 99.8

 

DRAFT

 

FORM 10-K

 

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

(Mark One)

 

x

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the fiscal year ended September 30, 2015

 

OR

 

o

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

Commission file number: None

 

VANGUARD ENERGY CORPORATION

(Exact name of registrant as specified in its charter)

 

COLORADO

27-2888719

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

 

21 Waterway Ave., Ste. 300

The Woodlands, Texas

77380

(Address of principal executive offices)

(Zip Code)

 

Registrant's telephone number, including area code: (713) 627-2500

 

Securities registered pursuant to Section 12(b) of the Act: None.

 

Title of each class

Name of each exchange

on which registered

 

Securities registered pursuant to Section 12(g) of the Act: None.

___________________

(Title of class)

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. o

 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. o

 

Indicate by check mark whether the registrant (1) has filed all reports to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes o No x

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulations S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such filing). Yes o No x

 

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

o

Accelerated filer

o

Non-accelerated filer

o

Smaller reporting company

x

(Do not check if a smaller reporting company)

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act): o Yes x No

 

The aggregate market value of the voting stock held by non-affiliates of the registrant on September 30, 2017 was approximately $___

 

As of September 30, 2017, the registrant had 195,004,639 outstanding shares of common stock. It was also contractually commited to issue an additional 10,021,340 shares of common stock to certain holders or their successors of its common stock prior to July 1, 2017.

 

Documents Incorporated by Reference: None

 

 
1
 
 

 

DRAFT

 

PART I

 

ITEM 1. BUSINESS.

 

We were incorporated in Colorado on June 21, 2010. Between February 1,2011 and June 14, 2014 we were involved in the exploration and development of oil and gas properties in southeast Texas.

 

We were never able to earn a profit and in January of 2013 we began investigating the possibility of selling our oil and gas properties.

 

As of April 30, 2014, we had liabilities of approximately $8,800,000. On March 31, 2014, we failed to make the interest payment on our convertible notes having an outstanding balance of $8,254,500. As a result, the note holders were entitled to declare the notes in default, in which case the principal amount of the notes, plus all accrued and unpaid interest, would be immediately due and payable.

 

With a view to paying our note holders, on June 17, 2014 we sold our oil and gas properties to Vast Exploration, Inc. for $5,500,000.

 

The proceeds from the sale were used to:

 

 

· purchase the net profits interest held by Vanguard Net Profits, LLC for $230,619; and

 

 

 

 

· pay the balance to the holders of the Convertible Notes.

 

In consideration for accepting less than the full amount due on their notes, and releasing their lien on our oil and gas properties, holders of notes in the remaining principal amount of $2,900,117 agreed to accept 860,380 shares of our common stock in payment of the notes and accrued interest.

 

On August 19, 2014, a 100-for-1 reverse split of our common stock became effective.

 

The sale of our oil and gas properties represented the sale of substantially all of our assets.

 

Subsequent Events

 

On July 1, 2017 the Company authorized an increase in its authorized common shares to 500,000,000 and its authorized preferred shares to 10,000,000.

 

July 1, 2017 the company acquired all of the shares of Solar Quartz Technologies Limited, a company incorporated in New Zealand (“SQTNZ”). These shares were purchased from Solar Quartz Technologies, Inc. (“SQTI”). The agreed value of that company’s assets is US$530 million. We subsequently changed our name to Solar Quartz Technologies Corporation in Colorado and with FINRA, and have also been cleared by FINRA to use the new trading symbol SQTX. The Company issued 213,402,755 new shares of common stock to SQTI in exchange for 122 (100%) of the common shares of SQTNZ. The issuance of these shares was equivalent to 95% of the Company's shares issued, after we issue an additional 10,021,224 shares of common stock to those holders of our common stock immediately prior to the acquisition. The Company does not anticipate any further reorganization of its common stock. We are currently preparing filing all necessary reports to the SEC with audited financial statements to resume our status as fully reporting with the SEC, and subsequently apply to trade on the more senior OTCQX exchange or NASDAQ.

 

SQTNZ is a corporation that has no prior business activity other than being the title owner of the exclusive mining and development rights for two High Purity Quartz (HPQ) Silica deposits known as Quartz Hill (represented by leases ML 30235, ML 30236 and ML 30237) and White Springs (represented by leases ML 30238 and ML 30239) located in North Queensland, Australia. Together they contain in excess of 15 million tons of High Purity Quartz which is feedstock in high demand in the marketplace to be used in the production of High Purity Quartz Sand (HPQS).

 

 
2
 
 

 

DRAFT

 

HPQS is an essential primary material for the manufacture of: Photo-Voltaic (PV) solar panels; Semiconductors; all High-end Electronic products; Fiber Optical cables; Halogen Lamps; HD and LCD television screens; and Epoxy Mounding Compounds (EMC).

 

Employees and Offices

 

As of September 30, 2017, we did not have any employees.

 

Our office is located at 21 Waterway Avenue, Suite 300, The Woodlands, Texas 77380. This virtual office is leased for two years at a rate of $197 per month.

 

ITEM 1.A. RISK FACTORS.

 

Not applicable.

 

ITEM 1.B. UNRESOLVED STAFF COMMENTS.

 

Not Applicable

 

ITEM 2. PROPERTIES.

 

None.

 

ITEM 3. LEGAL PROCEEDINGS.

 

Not applicable

 

ITEM 4. MINE SAFETY DISCLOSURE.

 

Not applicable

 

 
3
 
 

 

DRAFT

 

PART II

 

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

 

Our common stock trades in the over-the-counter market under the symbol “SQTX”. Shown below is the range of high and low closing prices for our common stock for the periods indicated as reported by the FINRA. The market quotations reflect inter-dealer prices, without retail mark-up, mark-down or commissions and may not necessarily represent actual transactions.

 

Quarter Ended

 

High

 

 

Low

 

 

 

 

 

 

 

 

December 31, 2013

 

$ 0.24

 

 

$ 0.13

 

March 31, 2014

 

$ 0.15

 

 

$ 0.10

 

June 30, 2014

 

$ 0.10

 

 

$ 0.02

 

September 30, 2014

 

$ 1.55 (1)

 

$ 0.02

 

 

 

 

 

 

 

 

 

 

December 31, 2014

 

$ 1.55

 

 

$ 0.40

 

March 31, 2015

 

$ 2.09

 

 

$ 0.90

 

June 30, 2015

 

$ 1.99

 

 

$ 1.01

 

September 30, 2015

 

$ 1.65

 

 

$ 1.01

 

_______________

(1) Price reflects a 100-for-1 stock split which became effective on August 19, 2014.

 

Holders of our common stock are entitled to receive dividends as may be declared by the Board of Directors. Our Board of Directors is not restricted from paying any dividends but is not obligated to declare a dividend. No cash dividends have ever been declared and it is not anticipated that cash dividends will ever be paid.

 

Our Articles of Incorporation authorize our Board of Directors to issue up to 10,000,000 shares of preferred stock. The provisions in the Articles of Incorporation relating to the preferred stock allow our directors to issue preferred stock with multiple votes per share and dividend rights which would have priority over any dividends paid with respect to the holders of our common stock. The issuance of preferred stock with these rights may make the removal of management difficult even if the removal would be considered beneficial to shareholders generally, and will have the effect of limiting shareholder participation in certain transactions such as mergers or tender offers if these transactions are not favored by our management.

 

As of August 31, 2017, we had approximately 215 shareholders of record.

 

We have not declared or paid any dividends on our common stock since our inception, and we do not anticipate declaring or paying any dividends on our common stock for the foreseeable future. We currently intend to retain any future earnings to finance future growth. Any future determination to pay dividends will be at the discretion of our board of directors and will depend on our financial condition, results of operations, capital requirements and other factors the board of directors considers relevant.

 

 
4
 
 

 

DRAFT

 

ITEM 6. SELECTED FINANCIAL DATA.

 

Not applicable.

 

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

As a result of the sale of our oil and gas properties, as discussed in Item 1 of this report, we no longer have any oil and gas assets With the acquisition of Solar Quartz Technologies Limited we now own significant deposits of High Purity Quartz Silica.

 

Since we no longer have any field activity and have only minimal operations, a comparison of our financial statements with any prior period would not be meaningful.

 

Contractual Obligations

 

Our material future contractual obligations as of September 30, 2017 were as follows:

 

 

 

Total

 

 

2017

 

 

 

 

 

 

 

 

2012 Convertible notes 

 

$ 70,747

 

 

$ 70,747

 

 

Critical Accounting Policies and New Accounting Pronouncements

 

See Note 2 to the financial statements included as part of this report, for a description of our critical accounting policies and the potential impact of the adoption of any new accounting pronouncements.

 

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

 

Not applicable.

 

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA (UNAUDITED).

 

See the financial statements and accompanying notes included with this report.

 

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

 

None.

 

ITEM 9A. CONTROLS AND PROCEDURES.

 

An evaluation was carried out under the supervision and with the participation of our management, including our Principal Executive and Financial Officer, of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report on Form 10-K. Disclosure controls and procedures are procedures designed with the objective of ensuring that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, such as this Form 10-K, is recorded, processed, summarized and reported, within the time period specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and is communicated to our management, including our Principal Executive and Financial Officer, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure. Based on that evaluation, our management concluded that, as of September 30, 2015, our disclosure controls and procedures were effective.

 

 
5
 
 

 

DRAFT

 

Management's Report on Internal Control over Financial Reporting

 

Our management is responsible for establishing and maintaining adequate internal control over financial reporting and for the assessment of the effectiveness of internal control over financial reporting. As defined by the Securities and Exchange Commission, internal control over financial reporting is a process designed by, or under the supervision of our Principal Executive and Financial Officer and implemented by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our financial statements in accordance with U.S. generally accepted accounting principles.

 

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

 

Warren Dillard, our Principal Executive and Financial Officer, evaluated the effectiveness of our internal control over financial reporting as of September 30, 2015 based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission, or the COSO Framework (1992). Management’s assessment included an evaluation of the design of our internal control over financial reporting and testing of the operational effectiveness of those controls.

 

Based on this evaluation, management concluded that our internal control over financial reporting was effective as of September 30, 2017.

 

Changes in Internal Control Over Financial Reporting

 

There was no change in our internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

ITEM 9B. OTHER INFORMATION.

 

None.

 

 
6
 
 

 

DRAFT

 

PART III

 

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

 

Our officers and directors are listed below. Our directors are generally elected at our annual shareholders’ meeting and hold office until the next annual shareholders’ meeting, or until their successors are elected and qualified. Our executive officers are elected by our directors and serve at their discretion.

 

Name

Age

Position

Warren Dillard

75

President, Chief Executive, Financial and Accounting Officer and a Director

Steven M. Powers

75

Vice President of Business Development, Secretary and a Director

Roger T. May

71

Director

 

 

 

 

 

David AB Halstead

 

70

 

Director

 

 

 

 

 

Michael Selsman

 

80

 

Director

 

The principal occupations of our officers and directors during the past several years are as follows:

 

Warren M. Dillard has been our President, Chief Executive, Financial and Accounting Officer and a director since June 2010. Since February 2011 Mr. Dillard has been our Principal Financial and Accounting Officer. He has previously managed mutual funds with the American Funds group of funds, was CFO of Pepperdine University and has been active in the development of numerous early stage companies in a variety of industries. Since 2005, Mr. Dillard has served as the President and a director of Enercor, Inc., a private corporation involved in oil and gas exploration and development in the western United States. Since the spring of 2010, Mr. Dillard’s involvement with Enercor has been minimal. Mr. Dillard holds a degree in Accounting from Texas A & M University and an MBA in Finance from the Harvard Business School.

 

 
7
 
 

 

DRAFT

 

Steven M. Powers has been a director since June 2010. Since February 2011, Mr. Powers has been our Vice President of Business Development and our Secretary. Since 2005, Mr. Powers has served as Chief Executive Officer, Chairman and a director of Enercor, Inc., a private corporation involved in oil and gas exploration and development. Prior to his association with Enercor, Mr. Powers was a real estate developer. Mr. Powers earned a degree in philosophy from the University of California at Santa Barbara as well as an MBA from the University of California at Los Angeles.

 

Roger May has been a director since July 1, 2017. Mr. May has extensive international business experience over the last 40 years, resided in the United States for 22 years, returning to Australia September 2001. Recognized Expert in "start-up" enterprises from inception to fully operational commercial ventures. He has overcome obstacles with great ability, tenacity, flexibility and creative initiative. Acknowledged visionary and creator combined with strong implementation skills. He has excellent capital raising skills in tens of millions of dollars. He has been Founder, Chairman & CEO of five (5) publicly listed companies in the United States and Australia. He resided the United States for 22 years, founded several high-tech. communications and mineral resource development companies. Presently focused on Global commercialization of primary component material essential in manufacture of PV Solar panels, Semi-conductor, and all high-end electronics in the USA and Australia.

 

David AB Halstead has been a director since July 1, 2017. David has a wide range of corporate, secretarial and trusts experience, in both offshore and onshore companies. In 1973 he became a partner in a local chartered accounting firm and in 1984 a principal in the Hong Kong office of Coopers & Lybrand [now PWC] specializing in international corporate and secretarial services, and offshore tax structures. Upon his return to Auckland in 1994, he established and operated, several integrated medical centers, a surgical hospital in Auckland and a state of the art diagnostic center. He then spent 3 years working with World Vision fund raising for its micro finance arm “Vision Fund” involved with the capitalization and establishment of Vision Fund Cambodia. Since 2006, David has acted as company secretary and treasurer for a group of international clients. Contemporaneously he established and operated, until recently, a unique world-first web based joint venture service for the New Zealand Government processing immigration medicals online in a secure platform. Mr. Halstead was educated at Kings College, Auckland, the son of a former New Zealand Cabinet Minister and diplomat. He is a graduate of the University of Auckland with a Bachelor of Commerce and further qualifications in taxation.

 

Michael Selsman has been a director since July 17, 2017. He is a director of Gawk, Inc. and is CEO of Archer Entertainment Media Communications, Inc. Mr. Selsman, as principal of Public Communications Company, Beverly Hills, CA, represents publicly traded companies as a consultant in both public relations and investor relations. He also researches and writes due diligence reports for brokerages, public and private companies (www.publiccommunicationsco.com). He is also a partner in Troika Publishing Media, a digital new media company. He entered the entertainment industry with 20th Century-Fox in New York City, and was subsequently hired by Paramount Pictures as East Coast Publicity manager. In Hollywood, he became a public relations executive for motion picture actors, directors and writers. As a talent agent at Artists Agency (now ICM), he structured arrangements for prominent films and TV series. Becoming a producer, he re-joined 20th Century-Fox, and then MGM, and became an independent producer making films in various states. He has recently published his autobiography, “All is Vanity,”. He has been a talent agent with Artist Agency Corporation (now ICM) participating in many highly regarded television series and talent. He has provided investor relations counsel to numerous publicly traded companies. Mr. Selsman has served on the boards of a number of major charities and lectured at most of the major universities in the Los Angeles area.

 

 
8
 
 

 

DRAFT

 

We believe that each of our directors’ experience in high quality minerals and business development qualifies him to serve as one of our directors.

 

Warren Dillard acts as our Principal Financial Officer.

 

We have adopted a code of ethics applicable to our principal executive, financial and accounting officers and persons performing similar functions.

 

ITEM 11. EXECUTIVE COMPENSATION

 

The following table summarizes the compensation received by our principal executive and financial officers during the two years ended September 30, 2015.

 

 

 

 

 

 

 

 

 

 

 

Restricted

 

 

 

 

 

Other

 

 

 

 

Name and

 

Fiscal

 

Salary

 

 

Bonus

 

 

Stock

Awards

 

 

Option

Awards

 

 

Annual

Compensation

 

 

 

 

Principal Position

 

Year

 

(1)

 

 

(2)

 

 

(3)

 

 

(4)

 

 

(5)

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Warren Dillard

 

2015

 

$ 20,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

 

 

$

 

President,

 

2014

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Principal Executive,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial and Accounting Officer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Steven Powers

 

2015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vice President of Business

 

2014

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Development

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

______________

(1) The dollar value of base salary (cash and non-cash) earned.
(2) The dollar value of bonus (cash and non-cash) earned.
(3) The value of the shares of restricted stock issued as compensation for services computed in accordance with ASC 718 on the date of grant.
(4) The value of all stock options computed in accordance with ASC 718 on the date of grant.
(5) All other compensation received that could not be properly reported in any other column of the table.

 

Long-Term Incentive Plans. We do not provide our officers or employees with pension, stock appreciation rights, long-term incentive or other plans.

 

Employee Pension, Profit Sharing or other Retirement Plans. We do not have a defined benefit, pension plan, profit sharing or other retirement plan, although we may adopt one or more of such plans in the future.

 

Compensation of Directors During Year Ended September 30, 2015. During the year ended September 30, 2015, we did not compensate our directors for acting as such.

 

Compensation Committee Interlocks and Insider Participation.. During the year ended September 30, 2015, none of our officers was also a member of the compensation committee or a director of another entity, which other entity had one of its executive officers serving as one of our directors.

 

 
9
 
 

 

DRAFT

 

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

 

The following table shows the beneficial ownership of our common stock, as of July15, 2017 by (i) each person whom we know beneficially owns more than 5% of the outstanding shares of our common stock, (ii) each of our officers, (iii) each of our directors, and (iv) all the officers and directors as a group. Unless otherwise indicated, each owner has sole voting and investment powers over his shares of common stock. Unless otherwise indicated, beneficial ownership is determined in accordance with the Rule 13d-3 promulgated under the Securities and Exchange Act of 1934, as amended, and includes voting or investment power with respect to shares beneficially owned.

 

 

 

Number of Shares

 

 

 

 

 

 

Beneficially

 

 

Percentage

 

Name and Address of Beneficial Owner

 

Owned (1)

 

 

of Class  

 

 

 

 

 

 

 

 

Warren M. Dillard

 

 

 

 

 

 

21 Waterway Ave., Ste. 300

 

 

 

 

 

 

The Woodlands, TX 77380

 

 

--

 

 

 

--

 

 

 

 

 

 

 

 

 

 

Steven M. Powers

 

 

-

 

 

 

-

 

2426 Topanga Canyon Blvd.

 

 

 

 

 

 

 

 

Topanga, CA 90290 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Roger May

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

David AB Halstead

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Michael Selsman

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

All officers and directors as a group (5 persons)

 

 

-

 

 

 

 

 

 

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.

 

None.

 

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.

 

Briggs & Veselka Co. audited our financial statements for the year ended September 30, 2014 and provided audit-related services during the year 2015.. Thayer O’Neal Company, LLC audited our financial statements for the year ended September 30, 2915. The following table shows the fees billed to us for the periods presented by each firm.

 

 

 

Year Ended

 

Year Ended

 

 

 

September 30

2015

 

September 30,

2014

 

 

 

 

 

 

 

Audit Fees

 

$

 

$ 87,280

 

Audit-Related Fees

 

$

 

$ 39,623

 

Tax Fees

 

$

 

$ 27,460

 

 

Audit fees represent amounts billed for professional services rendered for the audit of our annual financial statements and reviews of our quarterly financial statements.

 

Audit-related fees represent amounts billed for consents related to regulatory filings, audit/review of financial statements included in our registration statements filed with the Securities and Exchange Commission, and consulting related to the implementation of accounting standards.

 

Tax fees include professional services for tax return preparation and income tax audit support.

 

The policy of our directors is to pre-approve all audit and non-audit services provided by our independent auditors.

 

 
10
 
 

 

DRAFT

 

PART IV

 

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES (DRAFT).

 

The following exhibits were filed with the company’s Registration Statement in 2011.:

 

Exhibits

3.1*

Articles of Incorporation

3.2*

Bylaws

10.10*

Form of Convertible Note

14*

Code of Ethics

21*

Subsidiaries

31

Rule 13a-14(a) Certifications

32

Section 1350 Certifications

___________________

*

Incorporated by reference to the same exhibit filed with the Company’s Registration Statement on Form S-1 (File # 333-174194).

**

Incorporated by reference to the same exhibit filed with the Company’s registration statement on Form S-1 (File # 333-180987).

 

 
11
 
 

 

DRAFT

 

SIGNATURES

 

In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant has caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized on the __ day of _____, 2017.

 

VANGUARD ENERGY CORPORATION

By:

Warren Dillard, Chief Executive Officer

 

Pursuant to the requirements of the Securities Exchange Act of l934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

 

Signature

Title

Date

Principal Executive, Financial and Accounting Officer and Director

___ __, 2017

Warren Dillard

Secretary, Director

___ __, 2017

Steven M. Powers

 

Vanguard Sept 2015 10-K 9-21-17

 

 
12
 
 

 

DRAFT

 

CONTENTS

 

Page

 

 

Report of Independent Registered Public Accounting Firm

F-1

 

 

Unaudited Consolidated Balance Sheets

F-2

 

 

Unaudited Consolidated Statements of Operations

F-3

 

 

Unaudited Consolidated Statements of Changes in Stockholders’ Equity (Deficit)

F-4

 

 

Unaudited Consolidated Statements of Cash Flows

F-5

 

 

Unaudited Notes to the Consolidated Financial Statements

F-6

 

 

 
13
 
 

 

DRAFT

 

Report of Independent Registered Public Accounting Firm

 

To the Board of Directors and Stockholders of

Vanguard Energy Corporation

 

 

 

 

 
F-1
 
 

 

DRAFT

 

VANGUARD ENERGY CORPORATION

UNAUDITED CONSOLIDATED BALANCE SHEETS

 

 

 

September 30,

 

 

September 30,

 

 

2015

 

 

2014

 

ASSETS

Current assets

 

 

 

 

 

 

Cash and cash equivalents

 

$ 5

 

 

$ 39,251

 

 

 

 

 

 

 

 

 

 

Other assets

 

 

-

 

 

 

12,500

 

Total current assets

 

 

5

 

 

 

51,751

 

 

 

 

 

 

 

 

 

 

Debt issuance costs

 

 

-

 

 

 

83,654

 

 

 

 

 

 

 

 

 

 

Total assets

 

$ 5

 

 

$ 135,405

 

LIABILITIES AND STOCKHOLDERS’ EQUITY/(DEFICIT)

Current liabilities

 

 

 

 

 

 

 

 

Accounts payable

 

$ 20,217

 

 

$ 578

 

Accrued interest payable

 

 

38,571

 

 

 

702902

 

Other liabilities

 

 

60,738

 

 

 

8,600

 

Notes payable, net of discount of $0 and $0

 

 

146,937

 

 

 

2,923,040

 

Total current liabilities

 

 

266,463

 

 

 

3,635,120

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

-

 

 

 

-

 

Stockholders' deficit

 

 

 

 

 

 

 

 

Preferred stock, $0.00001 par value; 5,000,000 shares

 

 

 

 

 

 

 

 

authorized, none issued or outstanding

 

 

-

 

 

 

-

 

Common stock, $0..001 par value; 100,000,000 and 50,000,000

 

 

 

 

 

 

 

 

shares authorized at September 30, 2015 and 2014, respectively,

 

 

 

 

 

 

 

 

979,109 and 115,120 shares outstanding at

 

 

 

 

 

 

 

 

September 30, 2015 and 2014,

 

 

979

 

 

 

127

 

Additional paid-in capital

 

 

6,318,920

 

 

 

5,522,205

 

Accumulated deficit

 

 

(6,586,357 )

 

 

(9,022,047 )

Total stockholders' deficit

 

 

(266,458 )

 

 

(3,499,715 )

Total liabilities and stockholders' deficit

 

$ 5

 

 

$ 135,405

 

_________________

1) All common share amounts and per share amounts in these financial statements reflect the 1-for-100 share reverse stock split of the issued and outstanding shares of the Company’s common stock, effective August 19, 2014, including retroactive adjustment of common share amounts, See note 7.

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 
F-2
 
 

 

DRAFT

 

VANGUARD ENERGY CORPORATION

UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS

 

 

 

Fiscal Year

 

 

Fiscal Year

 

 

 

Ended

 

 

Ended

 

 

 

September 30,

2015

 

 

September 30,

2014

 

Revenues

 

 

 

 

 

 

Oil and gas sales

 

$ 0

 

 

$ 1,676,231

 

 

 

 

 

 

 

 

 

 

Costs and expenses

 

 

 

 

 

 

 

 

Lease operating expense

 

 

0

 

 

 

544,045

 

Production taxes

 

 

0

 

 

 

77,253

 

Depreciation, depletion and amortization

 

 

0

 

 

 

984,200

 

Impairment of Oil and Gas Properties

 

 

0

 

 

 

861,579

 

Asset retirement obligation accretion

 

 

0

 

 

 

29,088

 

General and administrative

 

 

109,594

 

 

 

905,514

 

Total costs and expenses

 

 

109,594

 

 

 

3,401,679

 

 

 

 

 

 

 

 

 

 

(Loss) from operations

 

 

(109,594 )

 

 

(1,725,448 )

 

 

 

 

 

 

 

 

 

Other income (expense)

 

 

 

 

 

 

 

 

Other income

 

 

0

 

 

 

3,745

 

Interest income

 

 

0

 

 

 

233

 

Write down of treasury stock

 

 

(23,809 )

 

 

0

 

Gain on settlement of participation liability

 

 

 

 

 

 

171,772

 

Interest expense

 

 

(31,608 )

 

 

(1,458,898 )

Other equipment write-off

 

 

0

 

 

 

20,819

 

Gain on debt extinguishment

 

 

2,576,890

 

 

 

(380,539 )

Total other income (expense)

 

 

2,521,473

 

 

 

(1,642,868 )

 

 

 

 

 

 

 

 

 

Income (loss) before income taxes

 

 

2,411,879

 

 

 

(3,368,316 )

Provision for income taxes

 

 

-

 

 

 

-

 

Net income (loss)

 

$ 2,411,879

 

 

$ (3,368,316 )

Income (loss) per share – Basic and Diluted

 

$ 3

 

 

$ (.27 )

Weighted average number of

 

 

 

 

 

 

 

 

common shares

 

 

759,953

 

 

 

12,532,234

 

_______________

(2) All common share amounts and per share amounts in these financial statements reflect the 1-for-100 share reverse stock split of the issued and outstanding shares of the Company’s common stock, effective August 19, 2014, including retroactive adjustment of common share amounts, See note 7.

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 
F-3
 
 

 

DRAFT

 

VANGUARD ENERGY CORPORATION

UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES

IN STOCKHOLDERS' DEFICIT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

Common Stock

 

 

Additional

 

 

Accumulated

 

 

Stockholders’

 

 

 

Shares

 

 

Amount

 

 

Paid In Capital

 

 

Deficit

 

 

Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30, 2013

 

$ 127,114

 

 

$ 127

 

 

$ 5,522,204

 

 

$ (5,653,730 )

 

$ (131,399 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock retired

 

 

(11,871 )

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(3,368,316 )

 

 

(3,368,316 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30, 2014

 

$ 115,243

 

 

$ 127

 

 

$ 5,522,204

 

 

$ (9,022,046 )

 

$ (3,499,715 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of shares for

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

settlement of debt

 

 

863,866

 

 

 

852

 

 

 

796,716

 

 

 

 

 

 

 

797,568

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Write down of treasury

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

23,810

 

 

 

23,810

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

2,411,879

 

 

 

2,411,879

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30, 2015

 

$ 979,109

 

 

$ 979

 

 

$ 6,318,920

 

 

$ (6,586,357 )

 

$ (266,458 )

_______________________

(3) All common share amounts and per share amounts in these financial statements reflect the 1-for-100 share reverse stock split of the issued and outstanding shares of the Company’s common stock, effective August 19, 2014, including retroactive adjustment of common share amounts, See note 7.

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 
F-4
 
 

 

DRAFT

 

VANGUARD ENERGY CORPORATION

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOW

 

 

 

Fiscal Year

 

 

Fiscal Year

 

 

 

Ended

 

 

Ended

 

 

 

September 30,

2015

 

 

September 30,

2014

 

Cash flows from operating activities

 

 

 

 

 

 

Net income (loss)

 

$ 2,411,879

 

 

$ (3,368,316 )

Adjustments to reconcile net loss

 

 

 

 

 

 

 

 

to net cash from operating activities:

 

 

 

 

 

 

 

 

Depreciation, depletion and amortization

 

 

0

 

 

 

941,294

 

Impairment of oil and gas properties

 

 

0

 

 

 

861,579

 

Amortization of debt issuance costs

 

 

83,070

 

 

 

274,740

 

Gain on settlement of participation liability

 

 

0

 

 

 

(171,772 )

Gain on debt extinguishment

 

 

(2,761,732 )

 

 

380,539

 

Asset retirement obligation accretion

 

 

0

 

 

 

29,088

 

Amortization of debt discount

 

 

0

 

 

 

169,145

 

Accretion of participation liability

 

 

0

 

 

 

(63,160 )

 

 

 

 

 

 

 

 

 

Change in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

0

 

 

 

343,194

 

Other assets

 

 

12,500

 

 

 

14,363

 

Accounts payable

 

 

19,639

 

 

 

(112,736 )

Accrued interest payable

 

 

121,314

 

 

 

393,358

 

Other liabilities

 

 

275

 

 

 

(4,050 )

Net cash from operating activities

 

 

(113,055 )

 

 

(291,915 )

Cash flows from investing activities

 

 

 

 

 

 

 

 

Capital expenditures on oil and gas properties

 

 

0

 

 

 

(1,012,794 )

Proceeds from sale of oil and gas properties

 

 

0

 

 

 

5,500,000

 

Proceeds from notes payable

Write down of treasury stock

 

 

50,000

 

 

 

0

 

Net cash from investing activities

 

 

73,809

 

 

 

4,487,206

 

Cash flows from financing activities

 

 

 

 

 

 

 

 

Repayment of notes payable

 

 

0

 

 

 

(5,259,706 )

Settlement of participation liability

 

 

 

 

 

 

(230,6190

 

Net cash from financing activities

 

 

50,000

 

 

 

(5,490,325 )

Net change in cash and cash equivalents

 

 

(39,246 )

 

 

(1,295,034 )

Cash and cash equivalents

 

 

 

 

 

 

 

 

Beginning of period

 

 

39,251

 

 

 

1,334,285

 

End of period

 

$ 5

 

 

$ 39,281

 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 
F-5
 
 

 

DRAFT

 

VANGUARD ENERGY CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE 1 – BASIS OF PRESENTATION

 

These consolidated financial statements of Vanguard Energy (Vanguard or the Company) have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). In the opinion of management, these financials statements include all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the interim periods. Certain information, accounting policies and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been omitted pursuant to Securities and Exchange Commission (SEC) rules and regulations. These financial statements should be read along with Vanguard’s audited financial statements as of September 30, 2014.

 

On March 31, 2014 the Company failed to make the schedules interest payments on its 2012 Convertible Notes (Notes). As a result, the note holders were entitled to declare the Notes in default, in which case the principal amount of the Notes, plus all accrued and unpaid interest would be immediately due and payable. For this reason, the Notes are classified as current obligations within the consolidated balance sheet at September 30, 2015.

 

The sale of the Company’s oil and gas properties, as explained in Note 3, raised substantial doubt of the Company to continue as a going concern. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business.

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Principles of Consolidation and Basis of Presentation— The consolidated financial statements include the accounts of Vanguard Energy Corporation and its subsidiaries. Vanguard’s significant accounting policies are consistent with those discussed in the audited financial statements as of September 30, 2015 and 2014. All significant intercompany accounts and transactions have been eliminated in consolidation.

 

The Company's fiscal year-end is September 30. The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") and pursuant to the accounting and disclosure rules and regulations of the U.S. Securities and Exchange Commission ("SEC"). A summary of the significant accounting policies applied in the preparation of the accompanying financial statements follows

 

Earnings Per Share – Basic earnings per share have been calculated based upon the weighted-average number of common shares outstanding. Diluted earnings per share have been calculated based upon the weighted-average number of common and potential shares. The calculation of diluted weighted-average shares outstanding for the years ended September 30, 2015 and 2014 excludes 759,474 and 167,610 shares, respectively, issuable pursuant to outstanding warrants and debt conversions features because their effect is anti-dilutive.

 

Reclassifications – Certain amounts previously presented for prior periods have been reclassified to conform to the current presentation. The reclassifications had no effect on net loss, working capital or equity previously reported.

 

Recently Issued Accounting Pronouncements – Various accounting standards updates have been recently issued, most of which represented technical corrections to the accounting literature or were applicable to specific industries. No new accounting pronouncements have been issued that are likely to have a material impact to the Company’s consolidated financial statements.

 

 
F-6
 
 

 

DRAFT

 

VANGUARD ENERGY CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

 

Participation Liability—In prior periods the Company recognized a participation liability related to a net profits interest granted to person who purchased the Company’s 2010 Convertible Promissory Notes. The net profits interest was held by Vanguard Net Profits, LLC and covered some of the Company’s oil and gas properties. On June 17, 2014 the Company settled the net profits interests for $230,619. The Company recognized a gain on the settlement of the participation liability of $171,772 during the quarter ended June 30, 2014 as a result.

 

Fair Value Measurements—The carrying value of cash and cash equivalents, accounts receivable, and accounts payable, as reflected in the balance sheets, approximate fair value because of the short-term maturity of these instruments. The estimated fair value of long-term debt was determined by discounting future cash flows using rates currently available to the Company for debt with similar terms and remaining maturities. The Company calculated that the estimated fair value of the long term debt is not significantly different than the carrying value of the debt. The participation liability associated with outstanding long-term debt was determined by utilizing a present value factor of 10 applied to proved developed reserves associated with the wells drilled with the proceeds of the notes.

 

Fair value is defined as the price that would be received to sell an asset or price paid to transfer a liability in an orderly transaction between market participants at the measurement date. Inputs used in determining fair value are classified for disclosure purposes according to a hierarchy that prioritizes those inputs based upon the degree to which they are observable. The three levels of the fair-value-measurement hierarchy are as follows:

 

 

· Level 1—Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

 

 

 

 

· Level 2—Inputs that reflect quoted prices for identical assets or liabilities in markets that are not active; quoted prices for similar assets or liabilities in active markets; inputs other than quoted prices that are observable for the asset or the liability; or inputs that are derived principally from or corroborated by observable market data by correlation or other means.

 

 

 

 

· Level 3—Unobservable inputs reflecting the Company's own assumptions incorporated in valuation techniques used to determine fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available.

 

In determining fair value, the Company utilizes observable market data when available, or models that incorporate observable market data. In addition to market information, the Company incorporates transaction-specific details that, in management's judgment, market participants would take into account in measuring fair value. The Company utilizes the most observable inputs available for the valuation technique employed. If a fair value measurement reflects inputs at multiple levels within the hierarchy, the fair-value measurement of both financial and nonfinancial assets and liabilities are characterized based upon the lowest level of input that is significant to the fair value measurement.

 

NOTE 3 –SALE OF OIL AND GAS PROPERTIES/ PAYMENT OF CONVERTIBLE NOTES

 

During 2012, the Company sold $8,254,500 of Convertible Promissory Notes. On March 31, 2014 the Company failed to make the scheduled interest payments on the notes. As a result, the note holders were entitled to declare the notes in default, in which case the principal amount of the notes plus all accrued and unpaid interest would be immediately due and payable.

 

The Company’s inability to make the interest payment to the note holders was the result of the expenditure of considerable capital to work over some of the Company’s wells. The costs of the work far exceeded the Company’s expectations and yet the work was required in order to get the wells back into production. This depleted the Company’s cash position far below its expectations. Further, although the initial work on those wells was successful in boosting production momentarily, further complications resulted in lower production than anticipated, which was not adequate to replenish the cash expended and enable the Company to make required interest payments.

 

With a view to paying its note holders, the Company, on June 17, 2014 sold its oil and gas properties to Vast Exploration, Inc. for $5,500,000, after obtaining approvals from the holders of a majority of the Company’s outstanding shares of common stock and approvals of a majority of note holders. An impairment charge of $880,213 was recognized during the quarter ended March 31, 2014 for the amount which the carrying value of the Company’s oil and gas properties exceeded the estimated net proceeds from the planned sale. The Company adjusted the impairment charge by $(18,634) during the quarter ended June 30, 2014 based on final closing of the transaction. The total impairment as of September 30, 2014 is $861,579.

 

 
F-7
 
 

 

DRAFT

 

VANGUARD ENERGY CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

 

The Company used the proceeds from the sale to:

 

Pay holders of the convertible notes

 

$ 5,259,206

 

Purchase the net profits interest held by Vanguard Net Profits, LLC

 

 

230,619

 

Pay legal and closing costs

 

 

9,675

 

 

 

$ 5,500,000

 

 

A loss on early extinguishment of debt totaling $380,539 was recognized during the quarter ended June 30, 2014 for the write-off of a portion of the debt issuance costs and debt issuance discount associated with the debt repayment. After the payment of the $5,259,706 approximately $2,900,000 remains to be paid to the convertible note holders. As of September 30, 2014 the unamortized discount on the 2012 Convertible Promissory Notes totaled $71,754. Interest expense for the amortization of debt issuance cost and discount on the notes for the period ending September 30, 2014 was $445,078. The effective interest rate of the 2012 Convertible Promissory Notes was 28.3% for the period ending September 30, 2014. Accrued interest at September 30, 2015 was $38,571 and at September 30, 2014 was $702,902.

 

In consideration for accepting less than the full amount due on the notes, and releasing their lien on the Company’s oil and gas properties, holders of notes in the approximated principal of amount of $2,923,040 as a group, have agreed to received shares in the Company’s stock in payment of the remaining balances on their notes, plus accrued interest. The conversion of most of the notes payable into shares was enacted in December 2014 represented approximately 90% of the Company’s issued and outstanding shares. As of September 30, 2015 nearly all of the notes payable had been exchanged for shares with the exception of $146,937.

 

NOTE 4 – SUBSEQUENT EVENT

 

On July 1, 2017 the company acquired all of the shares of Solar Quartz Technologies Limited, a company incorporated in New Zealand (“SQTNZ”). These shares were purchased from Solar Quartz Technologies, Inc. (“SQTI”). We have agreed with SQTI that the market value of that SQTNZ’s assets is US$530 million. We subsequently changed our name to Solar Quartz Technologies Corporation in Colorado and with FINRA, and have also been cleared by FINRA to use the new trading symbol SQTX. During July 2017 the Company issued 213,402,755 new shares of common stock to SQTI in exchange for 122 (100%) of the common shares of SQTNZ. The issuance of these shares was equivalent to 95% of the Company's shares issued, after we issue in the future an additional 10,021,224 shares of common stock to those holders of our common stock immediately prior to the acquisition. The Company does not anticipate any further reorganization of its common stock. We plan to apply to trade on the more senior OTCQX exchange or NASDAQ.

 

SQTNZ is a corporation that has no prior business activity other than being the title owner of the exclusive mining and development rights for two High Purity Quartz (HPQ) Silica deposits known as Quartz Hill (represented by leases ML 30235, ML 30236 and ML 30237) and White Springs (represented by leases ML 30238 and ML 30239) located in North Queensland, Australia. Together they contain deposts in excess of 15 million tons of 99% pure High Purity Quartz which is feedstock in high demand in the marketplace to be used in the production of High Purity Quartz Sand (HPQS) according to independent professional reports.

 

HPQS is an essential primary material for the manufacture of: Photo-Voltaic (PV) solar panels; Semiconductors; all High-end Electronic products; Fiber Optical cables; Halogen Lamps; HD and LCD television screens; and Epoxy Mounding Compounds (EMC).

 

NOTE 5 – LONG-TERM DEBT

 

2012 Convertible Promissory Notes – During 2012, the Company issued $8,254,500 of Convertible Promissory Notes, due and payable on June 30, 2015 and convertible at the holder’s option, into common stock of the Company at $1.25 per share. The Convertible Promissory Notes bear interest at 15% per year, payable quarterly. Of the total amount raised, $5,179,500 represented new cash investors and $3,075,000 represented investors from the 2010 convertible note offering who chose to roll their investment in that earlier offering into the Company's new offering. Net proceeds from this financing were used to fund an accelerated developmental drilling program in the Company's oil fields located in Southeast Texas and to pay the 2010 Convertible Promissory Notes that remained outstanding on October 31, 2012, the maturity date of those notes.

 

 
F-8
 
 

 

DRAFT

 

VANGUARD ENERGY CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

 

Direct costs of $813,780 were incurred in connection with the issuance of the 2012 Convertible Promissory Notes. The Company recognized a loss on debt extinguishment of $410,639 related to the investors who chose to roll their investment in the 2010 Convertible Promissory Notes into the new offering. The placement agents for this offering received a cash commission of $619,905 as well as 537,360 Series E warrants. Each Series E warrant entitles the holder to purchase one share of the Company’s common stock. The Series E warrants may be exercised at any time on or before June 30, 2017 at a price of $1.55 per share.

 

On June 16, 2014 the Company paid $5,259,706 on the 2012 Convertible Notes, leaving a balance of $2,994,794. The Company’s gross outstanding balance of the 2012 Convertible Promissory Notes was $2,994,794 as of September 30, 2014. This interest totaled $702,902 on September 30, 2014 and is considered payable along with the 2012 Convertible Notes. As of September 30, 2014, the unamortized discount on the 2012 Convertible Promissory Notes totaled $71,754. Interest expense for the amortization of debt issuance costs and discount on the notes was $810,494 for the year ended September 30, 2014. The effective interest rate of the 2012 Convertible Promissory Notes (net of the participation liability discussed below) was 28.3 % as of September 30, 2014. As disclosed in Note 3, $2,847,857 of the 2012 Convertible Notes were exchange for shares leaving a balance of $146,937 with accrued interest of $38,571 as of September 30, 2015. The unamortized discount on the 2012 Convertible Promissory Notes was written off.

 

Net Profits Interest Participation Liability – The note holder’s twenty percent (20%) net profits interest granted with the issuance of the 2010 Convertible Promissory Notes was owned by Vanguard Net Profits, LLC, a Texas limited liability company (the “Fund”). The Company had a 1% interest in the Fund and was the Fund’s manager. Persons that purchased the Company’s 2010 Convertible Promissory Notes owned the remaining interest in the Fund.

 

The Company recognized a participation liability related to the net profits interest granted. This participation liability was reflected in the liability section of the balance sheets at its estimated fair value of $-0- as of September 30, 2015 and $465,551 as of

 

September 30, 2014. The Company purchased the net profits interests held by the Fund for $230,619 on June 17, 2014 at a gain to the Company of $171,772.

 

The Company incurred expense associated with this net profits interest during the year ended September 30, 2014 $21,417. This amount is reported as interest expense in the statement of operations. The Company also made payments under this arrangement of $315,196 during the year ended September 30, 2014.

 

NOTE 6 – INCOME TAXES

 

The provision for income taxes consists of the following:

 

 

 

Fiscal Year

 

 

Fiscal Year

 

 

 

Ended

 

 

Ended

 

 

 

September 30,

2015

 

 

September 30,

2014

 

 

 

 

 

 

 

 

Current

 

$ -

 

 

$ -

 

Deferred

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Total

 

$ -

 

 

$ -

 

 

The provision for income taxes differs from the amount computed by applying the federal statutory income tax rate (34%) on operations as follows:

 

 

 

Fiscal Year

 

 

Fiscal Year

 

 

 

Ended

 

 

Ended

 

 

 

September 30,

2015

 

 

September 30,

2014

 

 

 

 

 

 

 

 

Income tax expense computed at statutory rates

 

$

 

 

$ (1,137194

 

Non-deductible items

 

 

 

 

 

 

(220623 )

Change in valuation allowance

 

 

 

 

 

 

1,357,817

 

 

 

 

 

 

 

 

 

 

Total

 

$ -

 

 

$ -

 

 

 
F-9
 
 

 

DRAFT

 

VANGUARD ENERGY CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

 

The components of the net deferred tax asset were as follows:

 

 

 

September 30,

2015

 

 

September 30,

2014

 

Deferred tax assets

 

 

 

 

 

 

Net operating loss carryforwards

 

$

 

 

$ 3,665,319

 

Stock-based compensation

 

 

 

 

 

 

222,936

 

Deferred tax liability - oil & gas properties

 

 

 

 

 

 

(1,380,769 )

Participation liability

 

 

 

 

 

 

(273,638 )

Subtotal

 

 

 

 

 

 

2,233,848

 

Valuation allowance

 

 

 

 

 

 

(2,233,848 )

Net deferred tax asset

 

$ -

 

 

$ -

 

 

See note above

 

A valuation allowance has been established to offset reported deferred tax assets. The Company's accumulated net operating losses were approximately $__________ at September 30, 2015 and begin to expire if not utilized in the year 2030.

 

NOTE 7 – STOCKHOLDERS' EQUITY

 

On August 19, 2014, upon receiving approval from the Financial Industry Regulatory Authority, the Company approved a 1-for-100 share reverse split of the Company’s outstanding common stock. Common share amounts and per share amounts in these financial statements have been retroactively adjusted to reflect this reverse split.

 

Preferred Stock—5,000,000 shares authorized. None issued or outstanding.

 

Following the above issuances of common stock, the Company had 12,741,512 shares issued and outstanding as of September 30, 2013. In August 2014 a 100 for 1 reversed split became effective which resulted in 115,210 outstanding shares at September 30, 2014 after taking into account shares returned to Treasury.

 

NOTE 8 – STOCK-BASED COMPENSATION

 

On January 10, 2011, the Board of Directors approved a Non-Qualified Stock Option Plan (the "Plan") which authorizes the issuance of up to 1,500,000 shares of Company common stock to persons that exercise options granted pursuant to the Plan. The Company's employees, directors, officers, consultants and advisors are eligible to be granted options pursuant to the Plan, provided

however that bona fide services must be rendered by such consultants or advisors, and such services must not be in connection with the offer or sale of securities in a capital-raising transaction. As of September 30, 2015 no options were outstanding.

 

NOTE 9 – COMMITMENTS AND CONTINGENCIES

 

Environmental Matters – The Company on June 17, 2014 sold all its oil and gas properties to Vast Exploration Inc. The Company as a former owner or lessee and operator of oil and gas properties, may be subject to various federal, state and local laws and regulations relating to discharge of materials into, and protection of, the environment. However, the Company did not experience any spills or other incidents which could cause environmental problems. Nevertheless, The Company maintained insurance coverage, which was believed customary in the industry, although the Company was not fully insured against all environmental risks.

 

Office Lease – As of September 30, 2015 the Company was no longer leasing office space. The Company has retained its month-to-month virtual office lease in Houston. The lease for the satellite office in Los Angeles was allowed to expire.

 

 
F-10
 
 

 

DRAFT

 

VANGUARD ENERGY CORPORATION

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

 

Contractual Obligations – The Company’s material future contractual obligations by fiscal year as of September 30, 2015 were as follows:

 

 

 

Total

 

 

2016

 

 

2017

 

 

Thereafter

 

Convertible notes

 

$ 146,937

 

 

$ 70,747

 

 

$ 70,747

 

 

 

-

 

 

The Company has contractual capital commitments outstanding in the principal balance of $146,937 at September 30, 2015. Accrued interest of $38,571 is included in the principal balance of the Convertible notes.

 

NOTE 10 – FAIR VALUE OF FINANCIAL INSTRUMENTS

 

The following table summarizes the financial liabilities measured at fair value on a recurring basis as of September 30, 2015 and 2014: -

 

 

 

 

 

 

September 30,

 

 

September 30,

 

 

 

Level

 

 

2015

 

 

2014

 

 

 

 

 

 

 

 

 

 

 

Convertible Notes

 

 

1

 

 

$ 146,937

 

 

$ 146,937

 

 

 
F-11
 
 

 

DRAFT

 

EXHIBIT 31.1

 

CERTIFICATIONS

 

I, Warren Dillard, certify that:

 

1. I have reviewed this annual report on Form 10-K of Vanguard Energy Corporation;

 

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

 

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15 and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

 

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

 

 

 

b) designed such internal control over financial reporting, or cause such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

 

 

 

c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

 

 

 

d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

 

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of the internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

 

 

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

 

 

 

 

b) any fraud, whether or not material, that involves management or other employees who have significant role in the registrant's internal control over financial reporting.

 

 

July __, 2017

/s/ Warren Dillard,

Warren Dillard,

Principal Executive Officer

 

 
14
 
 

 

DRAFT

 

EXHIBIT 31.2

 

CERTIFICATIONS

 

I, Warren Dillard, certify that:

 

1. I have reviewed this annual report on Form 10-K of Vanguard Energy Corporation;

 

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

 

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15 and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

 

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

 

 

 

b) designed such internal control over financial reporting, or cause such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

 

 

 

c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

 

 

 

d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

 

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of the internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

 

 

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

 

 

 

 

b) any fraud, whether or not material, that involves management or other employees who have significant role in the registrant's internal control over financial reporting.

 

July __, 2017

/s/ Warren Dillard

Warren Dillard,

Principal Financial Officer

 

 
15
 
 

 

DRAFT

 

EXHIBIT 32.1

 

CERTIFICATIONS

 

In connection with the Annual Report of Vanguard Energy Corporation (the "Company") on Form 10-K for the period ending September 30, 2015 as filed with the Securities and Exchange Commission (the "Report"), Warren Dillard, the Company’s Principal Executive and Financial Officer, certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of his knowledge:

 

 

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

 

 

 

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of the Company.

 

July __, 2017

By:

/s/ Warren Dillard

Warren Dillard, Principal Executive and Financial Officer

 

 

Vanguard Sept 2015 10-K 2-22-16

 

 

16

 

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