Xethanol Corp. founder creates new public company

Some of the key people behind Xethanol Corp. have resurfaced with a new public company – Waste2Energy Holdings Inc. – which gained a listing on the Over-the-Counter market through a reverse merger.

Christopher d’Arnaud-Taylor, who was Xethanol’s chairman and chief executive, also headed Waste2Energy (OTCBB: WTEZE.OB). He stepped down last week, in keeping with the terms of the merger agreement.

Although d’Arnaud-Taylor resigned as chairman and chief executive, he remains Waste2Energy’s biggest shareholder. He will continue to serve on its board of directors, and according to Securities and Exchange Commission Filings, he also got a $300,000-a-year consulting agreement with the company.


Xethanol was the subject of a Sharesleuth investigation in 2006. The company replaced d’Arnaud-Taylor as chief executive a few weeks later. Taylor told Sharesleuth that, despite the presence of other Xethanol alumni at Waste2Energy, he created the company without their involvement in early 2007.

According to a recent SEC filing, d’Arnaud-Taylor, his wife and a limited liability company he controls hold 6 million Waste2Energy shares, plus warrants to buy an additional 4 million shares exercisable at 50 cents a share.

Waste2Energy’s stock closed Thursday at $1.11 a share. That gave the company a market value of more than $55 million. According to the SEC filing covering the reverse merger, officers and directors control 44 percent of the company’s shares.


Waste2Energy Holdings was formed through the merger of Waste2Energy Inc. and Maven Media Holdings Inc., a public shell company in Chula Vista, Calif. The deal was consummated on May 29, with shareholders of Waste2Energy getting 46 million shares of the combined company.

In the past three months, Waste2Energy has raised $2.5 million through a series of private placements, according to SEC filings. In return for the money, it issued $2.5 million in notes paying 10 percent a year in interest, plus 2.5 million shares of its stock. The company has not identified any of the investors.

Waste2Energy’s SEC filing on the reverse merger noted Taylor’s ties to Xethanol, including his role as a defendant in a securities class-action suit that the company settled for $2.8 million.

“Appropriate disclosure concerning any XNL issues was included in the 8-K filed with the SEC and will be included in other filings as appropriate,” Taylor told Sharesleuth in an email response to our questions. “However, there is no other connection with XNL that should be made.”


Waste2Energy says it has a system for converting garbage and other solid waste into burnable gases. Its main subsidiary is pursuing deals to build cogeneration plants at industrial facilities and other locations to turn those wastes into “renewable green power.”

Xethanol claimed it had a process for turning wood chips, grass clippings and other plant material into ethanol. But the company never produced any commercial quantities of ethanol using the technology and eventually abandoned that business. It is now known as Global Energy Holdings Group Inc. (AMEX: GNH). The company’s shares, which topped $16 in early 2006, now trade for less than 20 cents.


Waste2Energy is involved in the construction of a waste-to-energy plant in Dumfries, Scotland, for a British company, Ascot Environmental Ltd. According to an SEC filing at the time of the merger, the waste-to-energy side of the business had revenue of $2.68 million for the nine months that ended Dec. 31, primarily from work on the Scottish plant. It reported a net loss of $4.01 million for that period.

The Scottish plant, known as the Dargavel Energy from Waste Facility (pdf), is in the final commissioning stages, and should be processing waste soon, Taylor said. Waste2Energy’s strategy, he said, is to capitalize on that project by selling other units to customers around the world.

“To support this roll-out, W2e has organized a design and fulfillment team in Scotland located in close proximity to the Dargavel site and forged a strategic alliance with a Scottish manufacturing company with a leadership position in thermal engineering processes.”


Two other key players at Xethanol – Franz A. Skryanz and Jeffrey Langberg — also have been involved in Waste2Energy.

Skryanz was secretary and treasury of Waste2Energy before it merged with Maven Media Holdings. SEC filings show that he got 500,000 shares in the combined company. Skryanz was an officer and director of Xethanol.

Taylor said Skryanz is no longer an officer or director of Waste2Energy and is retiring.

Waste2Energy said in its SEC filing on the reverse merger that an entity called SilverFox LLC has provided services to the company under two consulting contracts. Other SEC documents have listed Langberg as SilverFox’s managing member. Langberg was a Xethanol director and was one of its investment bankers.

SilverFox got 300,000 shares of Waste2Energy stock under the first consulting contract, which was awarded in May 2008 and called for the firm to find potential investors in the company. According to the SEC filing on the reverse merger, the deal also included warrants to buy 300,000 more shares at 75 cents each.

SilverFox got a new contract in November that calls for it to identify and screen potential buyers for Waste2Energy’s plants. According to the merger filing, that agreement provides for a finder’s fee of 10 percent of the purchase price for each sale it brings in.

Taylor told Sharesleuth that SilverFox LLC is “a tad more” than just Langberg, and that Langberg is no long managing member.

Waste2Energy’s latest SEC filings list the company’s headquarters at the same New York City address used by Xethanol. The telephone number also is the same as Xethanol’s old number. Xethanol had originally leased that office space from Langberg.

The company is set to move to a new headquarters in Greenville, S.C.


Last July, Waste2Energy was sued by the former owner of EnerWaste International Corp., which it had acquired the previous year for $5 million. Thomas L. Dutcher alleged that Waste2Energy had defaulted on the payments for the business, whose “Batch Oxidization System” technology is at the core of its current activities.

Waste2Energy countersued, saying that Dutcher misled the company about the state of EnerWaste’s finances and business. EnerWaste’s European affiliate, based in Iceland, went bankrupt late last year because of the collapse of that country’s economic system.

The two parties settled their differences in April, just before Waste2Energy arranged its reverse merger with Maven Media Holdings.

Stock promoter Irving Kott, a frequent target of regulators, has died in Canada

Irving Kott, a Canadian financier and stock promoter with long history of civil and criminal violations, has died at age 78.

Kott’s obituary appeared Aug 24 in a Montreal newspaper, but his passing drew no further media attention. In a sense, he was as invisible in death as he was in life – a life in which he played pivotal behind-the-scenes roles at numerous public companies and brokerage firms.

Kott pleaded guilty in 2004 to two felony charges related to his undisclosed ownership interest in J. B. Oxford Holdings Inc., a brokerage based in Beverly Hills, Calif. J.B. Oxford, whose employees pushed several stocks linked to Kott and his associates, had contended that he was merely a consultant.

The original grand jury indictment alleged, among other things, that Kott used his influence at J.B. Oxford to reap millions in profits on the sale of shares in which he or his associates had an interest. While working at J.B. Oxford, Kott lived in a mansion once occupied by actor Cary Grant.

In his plea, Kott acknowledged that he provided much of the $6.5 million that a Swiss firm loaned to the brokerage in 1994 and 1995 to keep it alive. The Swiss firm and its owner got notes that were convertible to a majority stake in the brokerage (formerly known as Reynolds Kendrick Stratton Inc.). In addition, Kott acknowledged that he provided funds for another investor who bought more than 5 percent of the brokerage’s shares in 1994. Neither Kott, the investors or the brokerage disclosed his role in those transactions, which could have been considered material information because of Kott’s past.

Kott was sentenced to five years’ probation rather than prison time, in part because of claims that both he and his wife were in ill health. He was ordered to pay $1 million in fines and charitable contributions.

J.B. Oxford had earlier agreed to pay $2 million to settle the Justice Department’s probe into possible fraud by Kott and others involved with the brokerage.

Kott also figured into the Securities and Exchange Commission’s investigation into the sharp rise in the stock of Mamma.com in the spring of 2004. Over a two-day period, the small Montreal-based Internet company’ stock shot from $4.10 a share to a high of $15.68. It peaked the following month at $17.49.

Mamma.com later disclosed in regulatory filings that the SEC was not only looking into the unusual activity surrounding the company’s shares, but also was probing whether a certain individual – known to be Kott – and “people acting jointly or in concert with him may have had a significant influence on the company in the past as a result of undisclosed shareholdings.”

Mamma.com changed its name in June 2007 to Copernic Inc. (Nasdaq: CNIC). Three months later, Copernic announced that the SEC had ended the investigation and that the agency’s staff was not recommending enforcement action.

Kott’s history of run-ins with securities regulators spanned at least four decades. In 1976, he pleaded guilty in Ontario to conspiring to defraud the public through the distribution of shares in a mining company. He was fined $500,000, which at the time ranked as the biggest personal penalty in Canadian history.

In 1979, he was convicted in Ontario in connection with another manipulation scheme and was sentenced to four years in prison. That conviction, however, was overturned on appeal.

In the 1980s, Dutch authorities identified Kott as the person behind a boiler-room style brokerage in Amsterdam called First Commerce Securities. That operation sold shares in obscure Canadian- and American-listed companies to foreign investors.

Authorities said in 1987 that First Commerce might have taken more than $400 million from investors, an amount equal to nearly $800 million in today’s dollars. Kott was never charged in connection with the case; he agreed to pay a fine of roughly $4 million in 1990 to settle the probe into his activities.