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) February 18, 1998
FRONTEER FINANCIAL HOLDINGS, LTD.
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(Exact name of registrant as specified in its charter)
Colorado 0-17637 45-0411501
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(State or other jurisdiction (Commission File No.) (I.R.S. Employer
of incorporation) Identification No.)
1700 Lincoln Street, 32nd Floor, Denver, Colorado 80203
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code: (303) 860-1700
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Item 1. CHANGES IN CONTROL OF REGISTRANT.
In December 1997, Heng Fung Capital [S] Private Limited ("Heng Fung
Private"), a wholly owned subsidiary of Heng Fung Holdings Company Limited
("Heng Fung Holdings"), a public company traded on the Hong Kong Stock Exchange,
purchased 1,136,364 shares of the outstanding Common Stock of Fronteer Financial
Holdings, Ltd. ("Company") from Robert A. Fitzner, Jr. and Robert L. Long,
officers and directors of the Company, and from two other employees at R A F
Financial Corporation ("RAF"), a wholly owned subsidiary of the Company. In
December 1997, Robert A. Fitzner, Jr. and Heng Fung Private agreed that, upon
the approval of the National Association of Securities Dealers, Inc. ("NASD") of
a change in the beneficial ownership of 25% or more of RAF, Heng Fung Private
would purchase an additional 3,556,777 shares of the Company's outstanding
Common Stock from Mr. Fitzner. In conjunction with the transaction, the Company
entered into an agreement ("Convertible Debenture Agreement") with Heng Fung
Finance Company Limited ("Heng Fung Finance"), a wholly owned subsidiary of Heng
Fung Private, pursuant to which the Company agreed to sell to Heng Fung Finance
a 10 year, $4,000,000 10% convertible debenture that is convertible at $.53125
per share into 7,529,411 shares of the Company's Common Stock. The purchase of
the $4,000,000 convertible debenture was completed on December 30, 1997. On
December 26, 1997, the board of directors of the Company, at the request of Heng
Fung Finance, pursuant to the terms of the Convertible Debenture Agreement,
appointed two persons selected by Heng Fung Finance to the board of directors of
the Company.
On January 29, 1998, the NASD approved (subject to certain restrictions
that have been agreed to by RAF) the change in the beneficial ownership of 25%
or more of RAF, and on February 18, 1998, Heng Fung Private purchased the
additional 3,556,777 shares of the Company's outstanding Common Stock from Mr.
Fitzner. Contemporaneously with the purchase, Mr. Fitzner, Mr. Long and Dennis
W. Olson resigned as directors of the Company and its subsidiaries. Also, Mr.
Fitzner resigned as the Chairman of the Company and as the President and Chief
Executive Officer of RAF, Mr. Long resigned as the Secretary of the Company and
Mr. Olson resigned as the President of the Company. At the same time, Mr. Fai H.
Chan and Mr. Robert H. Trapp, the two remaining directors appointed at the
request of Heng Fung Finance, reduced the number of directors on the Company's
Board of Directors to three and appointed Mr. Kwok Jen Fong as a director of the
Company to fill the remaining vacancy. The directors also appointed Fai H. Chan
as the Chairman of the Board and the President of the Company, Robert A. Trapp
as Managing Director of the Company and Gary L. Cook as the Secretary and
Treasurer of the Company. Messrs. Chan and Trapp and Brian F. Zucker also became
directors of RAF, Mr. Trapp was appointed the President of RAF, Brian F. Zucker
was appointed the Managing Director of RAF and Gary L. Cook was appointed the
Treasurer of RAF. Mr. Cook also remains as the Secretary of RAF. After giving
effect to the transactions described above, Heng Fung Holdings, through Heng
Fung Private and Heng Fung Finance, beneficially will own approximately 27.8% of
the Company's outstanding Common Stock, will own the $4,000,000 convertible
debenture that is convertible at $.53125 per share into 7,529,411 of the
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Company's Common Stock and will have the option to purchase an additional 10
year, $11,000,000 10% convertible debenture that will be convertible at $.61 per
share into 18,032,786 shares of the Company's Common Stock. If the $4,000,000
convertible debenture and the $11,000,000 convertible debenture, if purchased,
were converted, Heng Fung Holdings, through Heng Fung Private and Heng Fung
Finance, would beneficially own approximately 71.3% of the Company's outstanding
Common Stock.
The funds used by Heng Fung Private or by Heng Fung Finance to acquire the
stock and $4,000,000 debenture were advanced to them by Heng Fung Holdings which
had the cash available without having to borrow.
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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.
Date: February 20, 1998
FRONTEER FINANCIAL HOLDINGS, LTD.
By: /s/ Fai H. Chan
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Fai H. Chan, Chairman of the
Board and President
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