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): November 6,
2007
CONVERGENCE
ETHANOL, INC.
(Exact
name of registrant as specified in its charter)
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(State
or other jurisdiction
of
incorporation)
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(Commission
File Number)
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(I.R.S.
Employer Identification No.)
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5701
Lindero Canyon Rd., #2-100
Westlake
Village, California
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(Address
of principal executive offices)
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(Zip
Code)
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Issuer’s
telephone number, including area code: (818) 735-4750
Check
the
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:
|_| Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
|_| Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|_| Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
|_| Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item
1.03. Bankruptcy or Receivership.
On
November 6, 2007, Bott Equipment Company, Inc., a Texas corporation and wholly
owned subsidiary of Convergence Ethanol, Inc. (the “Company”), filed a voluntary
petition for relief under Chapter 7 of the United States Bankruptcy Code
(the
“Bott Equipment Bankruptcy Petition”). The Bott Equipment Bankruptcy Petition
was filed in the United States Bankruptcy Court in the Southern District
of
Texas, Case No. 07-37767. The date jurisdiction was assumed is
November 6, 2007. The bankruptcy trustee is Lowell T. Cage and the date of
his
appointment is November 6, 2007.
In
connection with the filing, Bott Equipment Company, Inc. has ceased all business
activity and operations. The Company determined that it does not have sufficient
resources to continue its operations and has been unable to secure additional
financing required to fund its operating activities. The court bankruptcy
trustee will be responsible for the wind-up of the business.
Item
2.04 Triggering Events That Accelerate or Increase a Direct Financial
Obligation or an Obligation under an Off-Balance Sheet
Arrangement.
On
October 27, 2006, Convergence Ethanol, Inc. (the “Company”) entered into a
Securities Purchase Agreement (the “Purchase Agreement”) with GCA Strategic
Investment Fund Limited (“GCA”) and executed a Convertible Note dated October
27, 2006, in favor of GCA in the amount of $3,530,000.00 (the “Note”), as
reported in the Company’s Current Report on Form 8-K filed on November 17,
2006. Pursuant to the Purchase Agreement, the Company was required to
file a registration statement covering the resale of the securities (the
“Registrable Securities”) issuable in connection with the Purchase Agreement no
later than December 26, 2006, and to obtain effectiveness of the registration
statement no later than January 25, 2007.
As
of
March 13, 2007, in spite of the Company’s best efforts the Company was unable to
file or obtain a registration statement covering the Registrable
Securities. As a result, on March 13, 2007, GCA delivered a notice
(the “Notice”) to the Company stating that the Company (i) had breached the
registration covenants contained in the Purchase Agreement, (ii) had accrued
liquidated damages of no less than $145,906.61, and (iii) was accruing
additional liquidated damages of $2,353.33 per day after March 13, 2007,
as
reported in the Company’s Current Report on Form 8-K filed on March 19,
2007. The Notice demanded payment of liquidated damages of
$145,906.61 and stated that if the Company failed to pay the liquidated damages
in accordance with the terms of the Purchase Agreement and the Notice, GCA
would
issue to the Company a notice of default.
On
June
1, the Company received a default and demand notice (the “June Notice”) from
GCA. The June Notice demands payment of (i) the outstanding principal
amount owed under the Note of $3,530,000.00, (ii) accrued and unpaid liquidated
damages of $334,173.01, (iii) additional liquidated damages of $2,353.33
per day
after June 1, 2007, (iv) accrued and unpaid default interest of $225,920.00
pursuant to the Note, and (v) additional default interest of $1,765.00 per
day
after June 1, 2007. The June Notice also states that legal
proceedings will be instituted against the Company without further notice
seeking a judgment against the Company for all outstanding indebtedness and
all
court costs and that GCA intends to hold the Company liable for reasonable
attorneys’ fees, as provided in the Purchase Agreement, unless the Company pays
the total amount demanded within ten (10) days of the Company’s receipt of the
June Notice.
On
October 15, the Company received a default and demand notice (the “October
Notice”) from GCA. The October Notice informed the Company that CGA
had posted the Gulfgate Property for foreclosure sale on November 6, 2007,
between the hours of 10:00 a.m. and 1:00 p.m. In spite of the
Company’s best efforts the Company was unable to pay all amounts due under the
Note prior to the scheduled sale. As a result, CGA foreclosed on the
Gulfgate Property on November 6, 2007.
[SIGNATURE
PAGE FOLLOWS]
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.
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Date:
November 12, 2007
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Convergence
Ethanol, Inc.
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By:
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/s/
James A. Latty
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James
A. Latty
Chief
Executive Officer
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