Note the CDs showing on their balance sheet from 02 and the 1B authorized.
More..now this is interesting for sure.
NOTE 8. CONVERTIBLE DEBENTURES, RELATED PARTY In December 1997, the Company sold Online Credit a ten year $4,000,000 10% Convertible Debenture (Convertible Debenture) that is convertible into shares of common stock of the Company at a price of $0.53125 per share until December 15, 2007, unless sooner paid, and an option to purchase a $11,000,000 10% Convertible Debenture (Option) that is convertible into shares of common stock of the Company at a price of $0.61 per share until ten years from the date of issue unless sooner paid. Online Credit partially exercised the option and purchased additional 10% Convertible Debentures totaling $2,500,000. On September 23, 1998, Online Credit and the Company agreed to amend the terms of the remaining $8,500,000 of the $11,000,000 10% Convertible Debenture by increasing the interest rate to 12%, changing the conversion price from $0.61 per share to the lower of $0.35 or the fair market value per share, and establishing the default conversion price at $0.10 per share. On September 25, 1998, Online Credit partially exercised its option to purchase $8,500,000 of 12% Convertible Debentures by purchasing a $500,000 12% Convertible Debenture from the Company. During the year ended September 30, 1999, Online Credit purchased an additional $1,000,000 convertible debenture. As of September 30, 2000 and 1999, Online Credit held a total of $8,000,000 in convertible debentures.
At September 30, 2000 and 1999, the current portion of the convertible debentures of $500,000 was due March 2001 and March 2000, respectively. In consideration of the extension of the due date to March 2000, eVision paid Online Credit a financing fee equal to 5% or $25,000 in the form of 44,092 shares of common stock of the Company. In consideration of the extension of the due date to March 2001, eVision paid Online Credit a financing fee equal to 3% or $15,000. On January 17, 2001, Online Credit agreed to extend the $500,000 due March 2001 until March 2002 in consideration of a fee of one percent, or $5,000. In May 2001, the Company agreed to repay $660,000 of the convertible debentures for $600,000, including the $500,000 due in March 2002. The difference of $60,000 was credited to additional paid-in-capital.
Certain of the quarterly interest payments on the convertible debentures purchased pursuant to the convertible debenture agreement were made in shares of the Company’s common stock. During the year ended September 30, 2000 and 1999, 1,705,014 and 1,569,417 shares of the common stock of the Company, respectively, were issued to pay the accrued interest. During fiscal 2001, 428,583 common shares of the Company were issued to pay interest through September 30, 2000. Online Credit agreed to allow eVision to pay interest on these convertible debentures in cash or in shares of eVision common stock, at eVision’s option, until April 1, 2002.
eVISION INTERNATIONAL, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (continued) On June 8, 2001, the Company and Online Credit entered into an agreement whereby eVision agreed to pay $7,314,316 of principal and interest, in the form of transferring ownership of assets, to Online Credit in satisfaction of certain convertible debentures outstanding subject to the approval of the eVision shareholders. The shareholders approved the agreement on November 28, 2001. The convertible debentures were issued under the Convertible Debenture and Option. Of the Convertible Debenture and Option, Online Credit had exercised and held $8,000,000 prior to the satisfaction in May 2001 of $660,000 of convertible debentures. Of the remaining $7,340,000, $6,749,924 of principal was satisfied, as was $564,392 of accrued interest thereon. The remaining outstanding balance of convertible debentures of $590,076 was documented in the form of a convertible debenture in accordance with terms under the Option and accrues interest at 8% with a maturity of 2007. Online Credit gave up its Option to purchase an additional $7,000,000 of convertible debentures. As part of the asset transfer agreement, the Company was granted an option to purchase approximately 20% of the total outstanding common stock of eBanker at an exercise price of $4.07 per share on or before December 31, 2001, at $4.31 per share on or before December 31, 2002 and at $4.57 per share on or before December 31, 2003, with the expiration of the option December 31, 2003.
On August 19, 2001 in conjunction with the asset transfer, eBanker and Online Credit entered into an option hedge agreement whereby Online Credit agreed to the cancellation and return of common shares of eBanker equal to the number of common shares that are purchased by the Company in the exercise of the option agreement dated August 19, 2001. As part of the option hedge agreement, eBanker agreed to pay Online Credit the proceeds received by eBanker from the exercise of the option agreement by the Company less a fee of $0.25 per share.
The assets of eVision used as satisfaction of the convertible debentures identified above consisted of all debt, equity and derivative instruments of eBanker owned by eVision, except that owned by American Fronteer, as of June 8, 2001; all shares of Global Growth; and 1,050,000 common shares of Global Med. On June 27, 2001, these assets were pledged to secure eVision’s performance under all convertible debentures currently outstanding to Online Credit. As consideration for the pledge, Online Credit agreed to reduce the interest rate from 12% to 2% on a $589,889 convertible debenture due June 4, 2006 that was issued to Heng Fung in consideration for Heng Fung paying the April 30, 2001 Convertible Series B-1 Preferred Stock dividend of eVision in accordance with the guaranty of Heng Fung. The $589,889 convertible debenture was assigned by Heng Fung to Online Credit.
Prior to the transaction, eVision owned approximately 40% of eBanker’s outstanding common shares and approximately 5% of Global Med. Separately, eBanker owns approximately 43% of Global Med. As part of the agreement, amounts owing to eVision from Global Growth of approximately $1,045,775 were cancelled.
The debt, equity and derivative instruments of eBanker consisted of 1 Series A preferred share, 1,083,533 common shares, 330,000 warrants to purchase common shares exercisable at $3.00 expiring August 11, 2003, 307,692 warrants to purchase common shares exercisable at $8.00 expiring March 31, 2005, 307,692 warrants to purchase common shares exercisable at $9.00 expiring March 31, 2005 and $660,000 in face value 10% convertible debentures. The Series A preferred share entitles the holder to 50% of the vote for members of the Board of Directors of eBanker. The primary assets of Global Growth consisted of ownership in commercial property in Vancouver, British Columbia, Canada, including a mortgage thereon of approximately $778,000.
Values given to the assets being transferred were determined and agreed to by the Board of Directors of eVision and Online Credit and were based on market values at the time of the agreement in case of the shares of Global Med and recent transactions in the case of the shares of eBanker and Global Growth.
eVISION INTERNATIONAL, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (continued) Heng Fung has guaranteed through October 31, 2002, the payment of each annual 8% cash dividend on the Convertible Series B-1 Preferred Stock that was offered by eVision if such dividend is not paid by eVision. Pursuant to this guarantee, the payments for April 30, 2002, October 31, 2001 and April 30, 2002 cash dividends were made by Heng Fung. In return, eVision gave Heng Fung a convertible debenture for $589,889 due June 2006, $614,963 due December 2006 and $626,941 due June 2007, respectively, representing the April 30, 2001, October 31, 2001, and April 30, 2002 cash payments. These debentures are convertible at the market price. Interest is payable quarterly, and at the option of Heng Fung, is payable in cash or common shares of eVision.
Heng Fung purchased a convertible debenture in the amount of $60,000 from eVision on October 2, 2001. The debenture was convertible at the market price and was due October 2, 2002. It accrued interest at 12% per annum. This debenture was paid off in conjunction with the sale of investment securities described in Note 12.
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