Item 1. Security and Issuer
1,204,021 shares of Common Stock, $0.001 par value (the “Shares”), of Ableauctions.com, Inc. (the “Issuer”). The Issuer’s address is 1963 Lougheed Highway, Coquitlam, British Columbia, Canada.
Item 2. Identity and Background
(a) This statement is filed by Hanifa Ladha (the “Reporting Person”).
(b) The Reporting Person’s address is 1963 Lougheed Highway, Coquitlam, British Columbia, Canada.
(c) The Reporting Person is not employed.
(d) During the last five years, the Reporting Person has not been convicted in a criminal proceeding.
(e) During the last five years, the Reporting Person has not been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.
(f) The Reporting Person is a citizen of Canada.
Item 3. Source and Amount of Funds or Other Consideration
The Shares were issued in payment of a convertible promissory note (the “Note”) owed by the Issuer to Bullion Reef Holdings Ltd., an entity owned by the Ladha Family Trust. The Reporting Person is a beneficiary of the Ladha Family
Trust. On April 30, 2009 the Ladha Family Trust assigned its interest in the Note, one-half to the Reporting Person and one-half to her spouse, Abdul Ladha.
Item 4. Purpose of Transaction
On October 6, 2008, in conjunction with the execution of a Development Agreement among Ableauctions.com, Inc., Abdul Ladha, Overture Development Corporation, Surrey Central City Holdings Ltd. and Bullion Reef Holdings Ltd., the Issuer issued the Note for the purchase of one-half of the issued capital stock of
Surrey Central City Holdings Ltd., a corporation wholly-owned by Bullion Reef Holdings Ltd. The Development Agreement and the Note permitted Bullion Reef Holdings Ltd. to convert up to $1 million in principal amount and all of the interest accrued thereon into shares of the Issuer’s Common Stock at the price of $0.432 per share.
On April 30, 2009 Bullion Reef Holdings Ltd. assigned the Note, one-half to the Reporting Person and one-half to her spouse, Abdul Ladha. On July 27, 2009 the Reporting Person and her spouse each converted his or her interest in the Note into 1,204,021 shares of the Issuer’s Common Stock, which
represented a conversion by each of them of $500,000 in principal amount and $20,136.99 in accrued interest.
The conversion of the amounts due under the Note was undertaken in conjunction with the execution on July 17, 2009 of a Share Exchange Agreement by and among Top Favour Ltd., the Top Favour Ltd. shareholders, the Issuer, the Reporting Person and the Reporting Person’s spouse and a Voting Agreement executed
by the Reporting Person, the Reporting Person’s spouse and Top Favour Ltd. Pursuant to the Share Exchange Agreement, the Issuer will acquire all of the outstanding capital stock of Top Favour Ltd. in exchange for a number of shares of the Issuer’s Common Stock that will result in the Top Favour Ltd. shareholders owning approximately 97% of the Issuer’s outstanding Common Stock. As a result of the share exchange, Top Favour Ltd. will become a wholly-owned subsidiary of the
Issuer. Prior to the consummation of the share exchange, the Issuer intends to create a liquidating trust (or other entity) into which it will transfer its assets and which will assume its liabilities. Following the payment of the liabilities, the liquidating entity will distribute the assets to the shareholders of the Issuer as of a record date that will be determined prior to the consummation of the share exchange. As a result of the share exchange, (i) the members of the Issuer’s
board of directors and the Issuer’s officers will resign and the nominees of Top Favour Ltd. will be appointed and (ii) the Issuer’s business will be discontinued and the business of Top Favour Ltd. will become the Issuer’s business. Top Favour Ltd. intends to submit an application to the NYSE Amex to continue the listing of the Issuer’s securities.
Item 5. Interest in Securities of the Issuer
As computed using rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended, the Reporting Person beneficially owns a total of 4,842,129 shares, or approximately 54%, of the Issuer’s Common Stock. In addition to the
1,204,021 shares of Common Stock issued in payment of the Note, this amount includes 250,573 shares of Common Stock that are owned by the Ladha (1999) Family Trust, of which the Reporting Person is a beneficiary, 121,186 shares of Common Stock that the Reporting Person’s spouse may acquire through the exercise of an option, 739,460 shares of Common Stock that the Reporting Person’s spouse may acquire through the exercise of a warrant and 2,526,889 shares of Common Stock issued to the Reporting Person’s
spouse. The Reporting Person did not effect any transactions in the Issuer’s common stock during the 60 days prior to the date of the transaction, other than the transaction reported herein and the transaction reported at Item 4 and Item 6 below with Top Favour Ltd., which information is incorporated herein by reference. No other person has the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the Reporting Person’s Common
Stock.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer
On July 17, 2009 the Issuer, the Reporting Person and the Reporting Person’s spouse entered into a Share Exchange Agreement with Top Favour Limited, a British Virgin Islands corporation (“Top Favour”), and the shareholders of Top Favour, consisting of 12 individuals and 5 entities, who collectively
hold 100% of Top Favour’s issued and outstanding share capital. Under the Share Exchange Agreement, the Top Favour shareholders would exchange their shares of Top Favour capital stock for newly-issued shares of the Issuer. Pursuant to the Share Exchange Agreement, the Top Favour owners would become the Issuer’s controlling shareholders following the transaction, holding approximately 97% of the Issuer’s outstanding common stock, and the Issuer’s existing shareholders
would hold the remaining 3% of the Issuer’s outstanding common stock. Top Favour would become the Issuer’s wholly owned subsidiary. In connection with Top Favour becoming the Issuer’s wholly owned subsidiary, the Issuer would acquire the business and operations of Top Favour, and its wholly owned subsidiaries.
Also on July 17, 2009, the Reporting Person, the Reporting Person’s spouse, and Top Favour entered into a Voting Agreement. Under the Voting Agreement, the Reporting Person and her spouse agreed to convert their interests in the Note into shares of the Issuer’s Common Stock such that they
will hold at least 49% of the outstanding shares of the Issuer’s Common Stock immediately after such conversion. The Reporting Person and her spouse also agreed to acquire additional shares of the Issuer’s Common Stock (so long as the total of all such acquisitions does not exceed $400,000) in order to maintain such percentage equity ownership. In addition, the Reporting Person and her spouse agreed to vote all their Common Stock in favor of the share exchange and certain other
actions in furtherance of the share exchange at any annual or special meeting of the Issuer’s shareholders.