Concord
11 년 전
Alberta Securities Commission - Notice of Hearing
12 March 2013
http://www.albertasecurities.com/Notices%20Decisions%20Orders%20%20Rulings/Enforcement/Hypower%20Fuel%20Inc%20NOH%202013%2003%2012%204440718%20v1.pdf
Citation: Hypower Fuel Inc., Re, 2013 ABASC 105 Date: 20130312
Docket: ENF-008470
Securities Act, R.S.A. 2000, c. S-4, as amended (Act)
To: Hypower Fuel Inc., Thomas Hochhausen, Douglas Bender
Notice: The Alberta Securities Commission (Commission) will convene at 2:30 pm on Tuesday, the 9th day of April 2013, at Calgary, or elsewhere, in Alberta, to deal with any preliminary matters, and to set a date for a hearing regarding the allegations in this Notice. At the hearing, the Commission will consider whether it is in the public interest to order:
(i) Under subsection 198(1)(a) of the Act, that trading in or purchasing cease in respect of specified securities;
(ii) Under subsection 198(1)(b) of the Act, that you cease trading in or purchasing securities;
(iii) Under subsection 198(1)(b.2) of the Act, that you be reprimanded;
(iv) Under subsection 198(1)(c) of the Act, that any or all of the exemptions contained in Alberta securities laws do not apply to you;
(v) Under subsection 198(1)(d) and (e) of the Act, that you resign any positions that you hold as a director or officer of an issuer, registrant or investment fund manager and that you be prohibited from becoming or acting as a director or officer or as both a director and officer of any issuer, registrant, or investment fund manager;
(vi) Under subsection 198(1)(e.3) of the Act, that you be prohibited from acting in a management or consultative capacity in connection with activities in the securities market;
(vii) Under subsection 198(1)(i) of the Act, that you pay to the Commission any amounts obtained or payments or losses avoided as a result of non-compliance with Alberta securities laws;
(viii) Under subsection 199 of the Act, that you each pay an administrative penalty;
(ix) Under subsections 202(1) of the Act, that you pay the costs of the
investigation and hearing; and
(x) Such further and other order under Section 198 as the Commission deems appropriate.
Location:
Alberta Securities Commission, 5th Floor, 250 – 5th Street SW, Calgary, Alberta.
Procedure:
1. You may obtain disclosure and particulars of the allegations in this Notice from Don Young, c/o Alberta Securities Commission, 600, 250 – 5 Street SW, Calgary, Alberta, T2P 0R4, telephone 403.297.2642.
2. You may be represented by legal counsel and you or your counsel may make representations and introduce relevant evidence.
3. If you or your counsel fail to attend on April 9, 2013, at 2:30 pm, or as directed, the hearing may proceed in your absence and an order may be made against you without further notice.
See also section 29 of the Act and Commission Rule 15-501 – Rules of Practice and Procedure for Commission Proceedings.
Allegations
Summary of Breaches
1 Staff of the Commission (Staff) allege that Hypower Fuel Inc. (Hypower), Thomas Hochhausen (Hochhausen), and Douglas Bender (Bender) (collectively, the Respondents), made misleading or untrue statements in news releases.
2 Staff allege that the Respondents acted contrary to the public interest.
Parties
3 Hypower is an Alberta corporation, whose securities were quoted for trading on the OTC Markets, pink sheets, beginning in 2006.
4 Hochhausen is an Alberta resident accountant. He acted as chief financial officer for Hypower.
5 Bender is a resident of British Columbia and the President of Hypower.
Circumstances
6 From February to September 2011 (Period), Hypower issued news releases regarding ‘significant developments’ to the company. All news releases were drafted or reviewed, or both, by Hochhausen and Bender. Among the statements made in the Hypower news releases during the Period (Statements) were the following:
6.1 It had signed a major development agreement for $5 Million (February 10, 2011);
6.2 It had an extensive patent portfolio, with patents presently in place (February 16, 2011);
6.3 It had approved a share repurchase/buyback plan, to be funded by the company’s available cash (February 22, 2011);
6.4 It had entered into negotiations with two potential acquisition companies that were on the cusp of explosive growth with the potential for double digit near term profitability (March 1, 2011);
6.5 It had entered into preliminary agreements with a number of shareholders to repurchase approximately 1.5 million outstanding shares (March 17, 2011);
6.6 It was in the process of upgrading to the OTC Pink Current Information tier, and it was working diligently on closing the two acquisitions and expected to be able to announce one by the end of the month. The two companies are leading edge, with exceptional technologies and offerings (March 22, 2011);
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6.7 It was very close to a Definitive Agreement with one of the two companies, and the name and particulars would be released very soon. The technology of the second target company (TC2) is a true game changer in a variety of fields (March 31, 2011);
6.8 It had reached an Agreement in Principle on the Purchase Formula for the purchase of some or all of the first acquisition target company (TC1). TC1’s principals with the help of Hypower’s consultants have been updating their business plans and projections. The second acquisition is also proceeding well and it truly is a Game Changer (April 14, 2011);
6.9 The two acquisition companies had expressed a strong interest in making use of Hypower’s strength to grow quickly, show financial results, and then be Spun Out as separate public entities trading on recognized exchanges, higher than the Pinksheets OTC. Hypower shareholders could receive a special dividend giving them a direct shareholding in the target companies in some manner (April 20, 2011);
6.10 Both TC’s had agreed to provide verifiable information that Hypower can release concerning their operations and business plan in the very near future (April 25, 2011);
6.11 Due diligence was progressing, with each day new markets and opportunities for the Game Changer technology becoming more apparent and real. Hypower was to be granted unrestricted access to TC2’s entire engineering team. TC2’s technology is truly one of a kind, leading edge, game changer technology that has applications in the medical, oil and gas, automotive and household markets. The due diligence on TC1 is proceeding well and Hypower continues to assist both TC’s in developing their websites, and with revenue projections (April 27, 2011);
6.12 Both target companies are in high growth industries with products and services very much in demand. TC2’s leading edge technology will revolutionize the industry. Industry and engineering experts are impressed by the product and believe it will be a phenomenal success (May 10, 2011);
6.13 It has signed a Memorandum of Understanding to purchase a control block position in TC2. A ‘spokesperson’ for Hypower stated TC2 has received a preliminary Business Valuation in excess of $100 Million. Hypower negotiated the MOU at a significant discount to current valuation. The product will generate large sales orders immediately (May 17, 2011);
6.14 Verifiable information from TC2’s professional advisors will be forthcoming over the next few weeks (July 13, 2011); and
6.15 It had met with the principals of both companies and are encouraged by their forward progress. TC1 is a category leading company with over 30 years experience in the green deconstruction-recycling industry and has been involved in such projects across North America and internationally. Hypower is pleased to be a partner in TC2’s exciting technology and is currently assisting it in locating and negotiating with overseas licensees and for major investment funding (September 28, 2011).
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7 Staff allege the Statements were unduly promotional, misleading, or untrue, or failed to state facts necessary to be stated – particulars of which include:
7.1 Hypower never raised the $5M for the reported development agreement;
7.2 Hypower had no patents in place;
7.3 the share buyback program, reported to be funded by cash, was actually to be funded by a government credit for research conducted by Hypower or from private sources. No credit was received, no funds were obtained from private sources, and no shares were ever repurchased;
7.4 the 1.5 million shares were to be repurchased from revenue or privately sourced funds. No revenue was earned, no money was raised privately, and no shares were repurchased;
7.5 apart from preliminary discussions with legal counsel in the US, Hypower did not have the money and took no steps to upgrade Hypower to the Pinksheets – Current Information;
7.6 Hochhausen was at the time, and for many years prior a paid consultant to TC1 (or its predecessor), tasked with preparing its tax returns;
7.7 TC1 has never applied for patents, developed technologies, or built a prototype;
7.8 TC1 did not discuss selling the company to Hypower;
7.9 TC1 had minimal inventory, no cash reserves, and only earned enough to pay salaries and bills. From 2008 to 2011 it had no revenue growth. TC1 never had any agreement in principle or had agreed upon a purchase price formula for Hypower to acquire TC1;
7.10 TC1 never agreed to provide to Hypower for dissemination verifiable details of its operations and business plan - it did not even have a business plan;
7.11 TC1 never discussed with Hypower TC1 being spun out as a separate public entity;
7.12 TC1 has no leading edge green technologies;
7.13 TC1 completed one project in Toronto, Ontario, one in British Columbia, and was paid $3,000 for a United Nations report in Sarajevo;
7.14 Both Hypower and Hochhausen, through a corporate vehicle, were shareholders of TC2;
7.15 TC2 never had any discussions with Hypower with respect to Hypower purchasing all of TC2;
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7.16 TC2 never had a website;
7.17 as at March 31, 2011, TC2’s technology had not passed engineering tests and was ‘quite a ways away’ from the last of its tests and clinical trials;
7.18 TC2 never discussed with Hypower TC2 being spun out as a separate public company, and TC2 had no intention of doing so; and
7.19 Hypower did not conduct due diligence of TC2 in 2011.
8 During Staff’s investigation, Hochhausen and Bender were interviewed under oath. In their interviews, both stated that the principals of TC1 and TC2 received Hypower news releases during the Period described above before they were issued. Staff allege this is untrue.
9 Hypower’s securities, which traded at less than $0.01 in February 2011, rose to a high of $0.05 during the Period.
Breaches
10 As a result of the above, Staff allege that the Respondents breached subsection 92(4.1) of the Act by making statements that they knew or ought to have known were misleading or untrue, or which failed to state facts necessary to be stated, and which would reasonably be expected to have a significant effect on the market price or value of Hypower’s securities.
11 Staff further allege that Hochhausen and Bender each breached section 221.1 of the Act by making a statement to an investigator, that is TC1 and TC2 received Hypower news releases before they were issued, which was untrue.
12 Staff further allege that the Respondents’ unduly promotional, misleading and untrue statements in news releases, and untrue statements under oath to Staff investigators, constituted conduct that is contrary to the public interest.
Calgary, Alberta, 12th March 2013.
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ALBERTA SECURITIES COMMISSION
”Original Signed By”
W.E. Brett Code, Q.C.
Director, Enforcement
4440718v1
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