CONVERGENCE SYSTEMS, INC. (“the Company”) is a privately-held, California corporation incorporated on January 13, 2005.  The Company's current position is the result of merging the telephone equipment business with state-of-the-art voice and data VOIP and cloud-based hosting technologies.  As a result of these developments, the Company is cash flow positive today.The Company participates in the network infrastructure industry which generates global annual revenues of more than $100 billion  The network infrastructure industry is composed of a number of segments, including IP telephony, storage, security, data networking, and unified communications.  The industry is rapidly evolving as communications and data networks are increasingly hosted on a common infrastructure solution. This “convergence” provides significant cost savings and efficiency gains to end user organizations which enables them to provide better service options to their customers.

The Company is engaged in the telephone equipment and voice and data VOIP services businesses and has the benefit of owning and utilizing technology that was developed over a thirty-year period within the telephone industry.  To pursue its business plans, the Company develops, markets, deploys, and operates proprietary telephony technologies. All of its technology is “cloud-based,” which allows the Company to manage thousands of locations from a central hub with a minimal number of employees.  This operational structure allows for advantageous scalability in the markets it pursues. See Video: Cloud PBX

• $2MM Annual Revenue
• 49% Contribution Margin
• 43% CAGR
• $8MM Data Center Infrasructure 
• Partners - AT&T, Level 3, COX, Time Warner 
• 9 Years in Business
• 3000 Users
• 235 Customers
• 15 Employees
• Completed First acquisition

Grow the Mitel Practice. Given the significant costs to migrate from one communications technology platform to another, most existing customers typically choose to remain on the Mitel platform.  Targeting legacy Mitel customers to upgrade to new systems is a large growth opportunity for the Company.  The Company has formed a new group of professionals including senior leaders, account representatives and technical experts who will focus exclusively on cross-selling Mitel customers and products.  This group has already had great success with this strategy. Our success in pursuing this strategy underscores the tremendous opportunity to dramatically expand our Mitel practice.

Pursue Growth Through Acquisitions.  The Company has successfully acquired and integrated similar interconnect businesses in the past (most recently Intellicom Communications, Inc. and Vocal Networks, Inc.) and plans to acquire additional businesses in the telecommunications infrastructure space. Our plan is to focus our acquisition activities on existing Mitel dealers, in order to leverage the Company’s scale and promote greater bottom-line impact.  This approach will expand its customer base and provide additional cross- selling opportunities.  The Company is also exploring acquisitions that can broaden our service offerings and competencies including data center virtualization, network security, data storage, and data networking.

The Company plans to expand its existing San Diego and Los Angeles footprints and commence CLEC and IP Telephony services in the Los Angeles market with the requested funding.  It plans to acquire as many as 15 Interconect dealers, or Value added Resellers (“VARs”) over the next 24 months in high-density California submarkets.

   The objectives of these acquisitions are threefold:  first, the Company plans to acquire these firms at a significant discount to their potential value as IP telephony service providers by purchasing them at handset dealer EBITDA multiples; second, their handset customer lists and contacts will be converted systematically to IP telephony customers; and third, a centralized and efficient sales, marketing, technical support and service organization will be developed by combining the most talented legacy staff with CC management.