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David M. Loev | 6300 West Loop South, Suite 280 | Telephone (713) 524-4110 |
John S. Gillies | Bellaire, Texas 77401 | Facsimile (713) 524-4122 |
Timothy J. Henderson* | www.loevlaw.com | |
Christian, Smith & Jewell** |
* Of Counsel, Board Certified Civil Trial Law (Texas)
** Of Counsel
August 16, 2016
Ms. Loan Lauren P. Nguyen | VIA EDGAR |
Legal Branch Chief | |
Office of Natural Resources | |
U.S. Securities and Exchange Commission | |
Washington D.C. 20549 | |
Mail Stop 4628 | |
Phone: (202) 551-3642 |
Re: | Vertex Energy, Inc. |
Post-Effective Amendment No. 2 to Form S-1 |
Filed July 25, 2016 |
File No. 333-205871 |
Dear Ms. Nguyen:
On behalf of Vertex Energy, Inc., a Nevada corporation (the “Company”), we would like to thank you for your prompt review of the Company’s Post-Effective Amendment (Amendment No. 2) to Form S-1 Registration Statement (File No. 333-205871) (the “Registration Statement” and “Amendment No. 2”) filed with the Securities and Exchange Commission (the “Commission”) on July 25, 2016. We are responding to comments on the Registration Statement provided by the staff (the “Staff”) of the Commission by letter dated August 5, 2016. In connection with these responses and certain verbal comments provided by the Staff, the Company is filing an Amendment No. 3 to the Post-Effective Amendment to Registration Statement on Form S-1 (“Amendment No. 3”) via EDGAR.
The Company’s responses to the Staff’s comments are indicated below, directly following a restatement of each comment in bold type.
General
1. | We note that you originally registered 8,064,534 shares of common stock issuable upon exercise of 8,064,534 outstanding shares of your Series B Preferred Stock on the registration statement. We further note your explanatory note indicates that 3,575,070 shares are being removed as explained in paragraph (b) and footnote 1 thereto. However, it appears that fewer than 3,575,070 of these shares are being removed fromthis registration statement. Please revise or advise as to this apparent inconsistency. |
Mrs. Loan Lauren P. Nguyen
August 16, 2016
Page 2 of 4
RESPONSE:
We have revised Amendment No. 3 to address the inconsistency you referenced.
Upon further review we determined that Amendment No. 2 incorrectly disclosed the number of shares of common stock being removed from the registration statement. While 3,575,070 total shares of Series B Preferred Stock were cancelled in connection with the repurchases affected in connection with the Company’s Series B1 Preferred Stock offering (the “Repurchases”), only 3,436,539 of those shares were shares of Series B Preferred Stock which were originally issued by the Company in May 2015, with the remaining shares (138,531) representing shares of Series B Preferred Stock issued in-kind, in lieu of dividends on shares of Series B Preferred Stock, subsequent to the original filing date of the Registration Statement. As such, only 3,436,539 of the 8,064,534 shares of common stock issuable upon conversion of 8,064,534 outstanding shares of Series B Preferred Stock originally registered on the Registration Statement are being removed in connection with the Repurchases, as reflected in Amendment No. 3.
Below, for clarity purposes, is a spreadsheet reconciling the number of shares of common stock originally registered on the Registration Statement upon conversion of Series B Preferred Stock and in-kind dividends and the number of shares of common stock initially registered on Form S-1 Registration Statement (File No. 333-207156) and which are currently registered therein, including a calculation of the portion of such shares which were originally included in the Registration Statement.
Mrs. Loan Lauren P. Nguyen
August 16, 2016
Page 3 of 4
Name of Selling Stockholders | Original Series B Preferred Stock Issued and Outstanding at Time of Original Registration Statement Filing (File No. 333-205871) and Registered Therein | Total Shares of Series B Preferred Stock Cancelled as Part of the Repurchases Out of the Series B Preferred Stock Original Issued | Total Series B Preferred Stock Cancelled as Part of the Repurchases | Difference in Total Repurchased and Original Shares (Equals in-Kind Dividend Shares Cancelled as Part of Repurchases) | Total Number of Original Shares of Series B Preferred Stock Left After Repurchases to Be Registered in Registration Statement (File No. 333-205871) | Total Dividend Shares Which Would Accrue on Remaining Series B Preferred Stock as Calculated Originally in Form S-1 (File No. 333-205871)1 | Original Dividend Shares Registered Form S-1 (File No. 333-205871)1 | Additional Dividend Shares Originally Registered on Form S-1 (File No. 333-207156) | Current Dividend Shares Registered on Form S-1 (File No. 333-207156) | Difference Between Total Previously Registered and Currently Registered | Currently Outstanding Shares of Series B Preferred Stock | Total Shares of Common Stock Issuable Upon Conversion of Already Issued in-Kind Series B Preferred Stock Shares to Be Registered on Form S-1 (File No. 333-207156) | |||||||||||||||||||||||||
(A) | (B) | (C) | (D) | (E) | (F) | (G) | (H) | (I) | (J) | (K) | (L) | ||||||||||||||||||||||||||
=(B)-(C) | =(A)-(B) | =ROUND(((E)*3.1 *0.06*5) /2.92,0) | =ROUND(((A)*3.1 *0.06*5) /2.92,0) | =(G)+(H)-(I) | =(K)-(E) | ||||||||||||||||||||||||||||||||
Adam Usdan | 260,904 | — | — | — | 260,904 | 83,096 | 83,096 | 12,169 | 90,796 | 4,469 | 277,189 | 16,285 | |||||||||||||||||||||||||
Alexander Douglas 2K3 Trust | 107,528 | 107,528 | 112,552 | 5,024 | — | — | 34,247 | 5,022 | — | 39,269 | — | — | |||||||||||||||||||||||||
Amanda Douglas 2K3 Trust | 107,528 | 107,528 | 112,552 | 5,024 | — | — | 34,247 | 5,022 | — | 39,269 | — | — | |||||||||||||||||||||||||
Ardsley Partners Renewable Energy Fund, L.P. | 645,162 | 333,981 | 333,981 | — | 311,181 | 99,109 | 205,480 | 30,087 | 125,304 | 110,263 | 344,012 | 32,831 | |||||||||||||||||||||||||
Burguete Investment Partnership, L.P. | 80,646 | 80,646 | 84,415 | 3,769 | — | — | 25,685 | 3,766 | — | 29,451 | — | — | |||||||||||||||||||||||||
Capital Ventures International | 161,292 | 161,292 | 168,827 | 7,535 | — | — | 51,370 | 7,520 | — | 58,890 | — | — | |||||||||||||||||||||||||
Carrhae & Co. fbo Wasatch Micro Cap Value Fund | 500,000 | — | — | — | 500,000 | 159,247 | 159,247 | 23,328 | 173,994 | 8,581 | 531,208 | 31,208 | |||||||||||||||||||||||||
Harbour Holdings Ltd. | 117,098 | — | — | — | 117,098 | 37,295 | 37,295 | 5,463 | 40,759 | 1,999 | 124,408 | 7,310 | |||||||||||||||||||||||||
Intracoastal Capital, LLC | 32,260 | — | — | — | — | 10,275 | 10,275 | — | — | 10,020 | — | — | |||||||||||||||||||||||||
IRA Services Trust Company CFBO Richard Jacinto II Roth IRA acct# IRA115447 | 1,290,324 | 1,290,324 | 1,350,596 | 60,272 | — | — | 410,959 | 60,184 | — | 471,143 | — | — | |||||||||||||||||||||||||
Jake Douglas 2K3 Trust | 107,528 | 107,528 | 112,552 | 5,024 | — | — | 34,247 | 5,022 | — | 39,269 | — | — | |||||||||||||||||||||||||
KC Gamma Opportunity Fund LP | 112,904 | 112,904 | 118,179 | 5,275 | — | — | 35,959 | 5,266 | — | 41,225 | — | — | |||||||||||||||||||||||||
MAZ Partners LP | 40,000 | — | — | — | 40,000 | 12,740 | 12,740 | 1,876 | 13,931 | 685 | 42,499 | 2,499 | |||||||||||||||||||||||||
Osher Capital Partners LLC | 30,000 | 30,000 | 31,404 | 1,404 | — | — | 9,555 | 1,411 | — | 10,966 | — | — | |||||||||||||||||||||||||
Pennington Capital LLC | 580,646 | — | — | — | 580,646 | 184,932 | 184,932 | 27,083 | 202,053 | 9,962 | 616,886 | 36,240 | |||||||||||||||||||||||||
Prescott Group Aggressive Small Cap Master Fund, G.P. | 967,742 | 967,742 | 1,012,946 | 45,204 | — | — | 308,218 | 45,124 | — | 353,342 | — | — | |||||||||||||||||||||||||
Skylands Quest LLC | 48,388 | — | — | — | 48,388 | 15,411 | 15,411 | 2,262 | 16,849 | 824 | 51,410 | 3,022 | |||||||||||||||||||||||||
Skylands Special Investment II LLC | 26,452 | — | — | — | 26,452 | 8,425 | 8,425 | 1,239 | 9,218 | 446 | 28,106 | 1,654 | |||||||||||||||||||||||||
Skylands Special Investment LLC | 130,646 | — | — | — | 130,646 | 41,610 | 41,610 | 6,097 | 45,471 | 2,236 | 138,802 | 8,156 | |||||||||||||||||||||||||
Trellus Partners, LP | 782,000 | 66,850 | 66,850 | — | 715,150 | 227,770 | 249,062 | 36,480 | 246,098 | 39,444 | 757,610 | 42,460 | |||||||||||||||||||||||||
Trellus Small Cap Opportunity Fund, LP | 322,582 | 70,216 | 70,216 | — | 252,366 | 80,377 | 102,740 | 15,048 | 89,638 | 28,150 | 269,546 | 17,180 | |||||||||||||||||||||||||
Vertex One Asset Management Inc. on behalf of the Vertex Fund registered as Investor Company 5J5505D | 1,612,904 | — | — | — | 1,612,904 | 513,699 | 513,699 | 75,218 | 561,243 | 27,674 | 1,713,568 | 100,664 | |||||||||||||||||||||||||
8,064,534 | 3,436,539 | 3,575,070 | 138,531 | 4,595,735 | 1,473,986 | 2,568,499 | 374,687 | 1,615,354 | 1,327,577 | 4,895,244 | 299,509 |
1 | The original calculation used for the dividend calculation equaled total shares of Series B Preferred Stock multiplied by five (the Series B Preferred Stock is redeemable five years from the original issuance date), multiplied by a face value per share of $3.21, multiplied by 6% per year (the interest rate), divided by $2.92 (the lowest allowable conversion price of such dividends due). The Current Dividend Shares Registered on Form S-1 (File No. 333-207156)(Column I above) is based on a quarter-by-quarter calculation of the maximum accrued dividends payable over time, with compounding interest thereon. |
Mrs. Loan Lauren P. Nguyen
August 16, 2016
Page 4 of 4
2. | We note your explanatory note states that “approximately” 1,602,739 shares of common stock are instead being registered on your registration statement on Form S-1 (File No. 333-207156). Please revise to clarify the exact number of shares. |
RESPONSE:
We have revised Amendment No. 3 to address the inconsistency you referenced. See also Column F of the table above.
Yours very truly, | ||
/s/John S. Gillies | ||
John S. Gillies | ||
(john@loevlaw.com) | ||
Senior Associate |