|
o
Filed
by the Registrant
|
|
|
x Filed
by a Party other than
the Registrant
|
|
|
Check
the appropriate box:
|
|
|
o
|
Preliminary
Proxy Statement
|
|
o
|
Confidential,
for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
|
|
o
|
Definitive
Proxy Statement
|
|
o
|
Definitive
Additional Materials
|
|
x
|
Soliciting
Material Pursuant to §240.14a-12
|
|
CONVERGENCE
ETHANOL, INC.
|
||
|
(Name
of Registrant as Specified In Its Charter)
|
||
|
Daniel
K. Moscaritolo
|
||
|
(Name
of Person(s) Filing Proxy Statement, if other than the
Registrant)
|
||
|
|
||
|
Payment
of Filing Fee (Check the appropriate box):
|
||
|
x
|
No
fee required.
|
|
|
o
|
Fee
computed on table below per Exchange Act
Rules 14a-6(i)(1) and 0-11.
|
|
|
|
(1)
|
Title
of each class of securities to which transaction
applies:
|
|
|
|
|
|
|
(2)
|
Aggregate
number of securities to which transaction applies:
|
|
|
|
|
|
|
(3)
|
Per
unit price or other underlying value of transaction computed pursuant
to
Exchange Act Rule 0-11 (set forth the amount on which the filing fee
is calculated and state how it was determined):
|
|
|
|
|
|
|
(4)
|
Proposed
maximum aggregate value of transaction:
|
|
|
|
|
|
|
(5)
|
Total
fee paid:
|
|
|
|
|
|
o
|
Fee
paid previously with preliminary materials.
|
|
|
o
|
Check
box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its
filing.
|
|
|
|
(1)
|
Amount
Previously Paid:
|
|
|
|
|
|
|
(2)
|
Form,
Schedule or Registration Statement No.:
|
|
|
|
|
|
|
(3)
|
Filing
Party:
|
|
|
|
|
|
|
(4)
|
Date
Filed:
|
|
-
|
In
March of 2003, Convergence entered into a money-losing contract
with the
Accelon Company, under which Convergence lost hundreds of thousands
of
dollars. The contract was to build one prototype of a fuel blending
skid
or mechanical mixing machine. C.A. Lombardi, Executive Vice President
of
Accelon stated in the bid solicitation that Accelon planned to
purchase up
to 20 of these mixing systems in the same calendar year. A project
report
shows Dr. Latty projecting revenue of $8 million with an 18-month
demand
for 100 to 120 units in follow on purchases. The project report
also shows
that Dr. Latty was Convergence’s “lead” for the project.
|
|
-
|
There
was no public disclosure of a relationship between Dr. Latty, his
wife
Cathy A. Latty (C.A. Lombardi-maiden name) and the two companies;
the
Accelon Company and Accelon Nevada. To the best of my knowledge,
there was
never any disclosure of these facts inside
Convergence.
|
|
-
|
Second,
why is James Latty’s wife’s maiden name (C. A. Lombardi) the same as the
officer of Accelon who signed the contract with Convergence, on
behalf of
the Accelon Company. How is it that this same C. A. Lombardi had
the
authority to sign and issue checks to Convergence, on behalf of
two
separate companies; the Accelon Company and Accelon
Nevada?
|
|
-
|
Why
did Dr. Latty file for a trademark in May of 2003 for the generic
name
"Accelon" for a mechanical mixing machine, the same as the product
that
Convergence was prototyping for the Accelon Company? Why did that
trademark application reflect that Dr. Latty and C.A. Lombardi
shared the
same mailing address?
|
|
-
|
Lawrence
Weisdorn, Charles L. Christensen and myself at different times
raised
these questions. Each of us was terminated or resigned. I resigned
on
account of the Company’s reticence to provide the answers. The Company
still does not provide answers to these questions, and we feel
the
shareholders are entitled to these
answers.
|
|
-
|
The
2007 Annual Meeting will be held because Convergence was ordered
by a
Nevada court to hold this meeting.
|
|
-
|
Ironically,
Convergence has spent large amounts of money trying to frustrate
the
shareholders' rights to vote for its
directors.
|
|
-
|
Convergence
has held no prior shareholders' meetings since March 18, 2002 (five
years).
|
|
-
|
Not
a single current Convergence director was ever elected by you,
the
shareholders.
|
|
-
|
When
asked to distribute my proxy materials, Convergence demanded $60,000
from
me. Convergence would be entitled only to its "reasonable expenses"
to
distribute (not to print or review) proxy
statements.
|
|
-
|
The
Bylaws provide for a three-year term for directors? The shareholders
never
had an opportunity to vote on it.
|
|
-
|
Convergence
intends to elect only one director, instead of all three, at the
2007
Annual Meeting.
|
|
-
|
Dr.
Latty, serving as a director of Convergence since February 18,
2004, has
already served over three years, already longer than as provided
in the
Convergence bylaws themselves. The Convergence position is that
Dr. Latty
is "protected" from being voted in or out this year. It also so
happens
that, according to the Company's proxy, "Ratification of [Latty's]
new
three-year [employment] agreement by the Board of Directors is
anticipated."
|
|
-
|
When
Dr. Latty was elected as a director, the bylaws provided for a
one-year
term for directors; and Nevada Revised Statutes 780.330.2 provides
that
the directors in office at the time of changing bylaws to provide
for a
"three-year" term do not thereby receive three-year term; they
would
continue to have a one-year term.
|
|
-
|
According
to the Convergence bylaws themselves, all “replacement” directors elected
by the board are supposed to only serve out the remaining term
of the
director that they are replacing. Since two of the current directors
are
replacement directors, and the prior directors were elected on
February
18, 2004, their terms have already been extended beyond the three
years
limitations set forth in Convergence's own
bylaws.
|
|
-
|
Under
Dr. Latty's leadership, Convergence has not raised one dollar of
external
equity or debt funding to advance the Hearst Ethanol One, Inc.
project? As
a matter of fact, according to Convergence's most recent Form 10-KSB,
"[Convergence] plan[s] to obtain the additional working capital
through
private placement sales of our equity securities. [Convergence
has] not
received any funds, nor can there be any assurance that such funds
will be
forthcoming."
|
|
-
|
Development
of the HEO project is Convergence's best hope to become self-sustaining.
As a matter of fact, according to Convergence's most recent Form
10-KSB,
"[Convergence] expect[s] to continue incurring operating losses
until we
are able to derive meaningful revenues from our proposed business
relating
to ethanol production, energy generation and
supply."
|
|
-
|
Convergence
received private financing in 2005 and, as alleged in a demand
made by
investors but not made public by Convergence, to date has failed
to issue
and deliver the securities sold to the investors. In addition,
based on
public filings, Convergence has also not attempted to register
those
securities as allegedly promised.
|
|
-
|
Convergence
raised private financing in 2006, allegedly based on a promise
that the
funds would be held in an escrow account and not released to Convergence
until the funds in escrow exceeded $350,000. The investors allege
that
Convergence raised only $130,000 and notwithstanding its promise
expended
those funds for its own account.
|
|
-
|
On
March 13, 2007, Convergence received a demand for payment of liquidated
damages in the amount of $145,906.61 (the “Notice”) from GCA Strategic
Investment Fund Limited (“GCA”) pursuant to a Securities Purchase
Agreement dated October 31, 2006 between Convergence and GCA (the
“Purchase Agreement”). Pursuant to the Purchase Agreement, Convergence was
required to file and obtain an effective Registration Statement
covering
the resale of the Registrable Securities no later than January
25, 2007.
The Company has not even filed a Registration Statement covering
the
Registrable Securities. On March 13, 2007, GCA delivered a Notice
to
Convergence claiming liquidated damages in an amount not less than
$145,906.61 plus $2,353.33 per day after March 13, 2007. The foregoing
liquidated damages are payable in cash upon demand. If payment
is not
received by GCA in accordance with the terms of the Purchase Agreement
and
the Notice, GCA has threatened to issue to the Company a notice
of default
and accelerate Convergence’s outstanding obligation to GCA of
$3,530,000.
|
|
-
|
Promptly
seeking capital for moving forward with the Hearst Ethanol
Project.
|
|
-
|
Promptly
hiring a new, highly-qualified and experienced
CEO.
|
|
-
|
Removing
the current "defensive" and "anti-change of control" provisions
of the
board-approved Bylaws in accordance with the highest standards
of
corporate governance.
|