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PDH - Premier Diversified Holdings Inc.


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The dilution continues - looks like there are 163 million shares outstanding now compared to around 53 million when the current management took charge. Corporate expenses continue to be high.

 

Corporate expenses are related to the raising of funds, acquisition activities, retention of staff and general

administrative overhead in order for the Company to continue in business and further its plans to develop diagnostic

facilities in Canada.

During the three months ended June 30, 2018, the Company incurred corporate expenses of $226,298 compared to

$200,263 for the three months ended June 30, 2017. The increase in corporate expenses is primarily due to the

increase in transfer agent and filing fees which related to the TSXV listing.

 

New quarter report is out.

 

Looks like it's going to be a slow slog, and dilution will continue.

 

I'd like to understand the thought process on investment to unknown startups, given that capital precious for the company; I'm also curious about the cost paid to directors' consulting firm (especially to the legal firm)

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Stock price is 2.5 cents CAD per google.

https://www.google.com/search?source=hp&ei=EseKW6SlKYqz0PEP46WA2Aw&q=pdh+stock+price

 

Lot of dealings where the directors are the beneficiary

 

Key management personnel include persons having the authority and responsibility for planning, directing, and

controlling the activities of the Company as a whole. The Company has determined its key management personnel

to be executive and non-executive officers and directors of the Company.

The remuneration, including share-based payments, of key management personnel during the nine months ended

June 30, 2018 and 2017 were as follows:

1) Consulting fees of $100,800 (June 30, 2017 – $95,013) were paid to an accounting firm whose principal is the CFO and a director of

the Company.

2) Consulting fees of $nil (June 30, 2017 – $94,238) were paid to a director of the Company to manage the Chinese operations. The

amount is included in loss from discontinued operations.

3) Management fees of $39,675 and professional fees of $35,362 was paid to private company, whose principle is the Director and NonExecutive

Chair of the Company, during the nine months ended June 30, 2018 and 2017, respectively.

4) Professional fees of $138,091 (June 30, 2017 – $nil) were incurred to a law firm whose principal is a director of the Company.

5) Professional fees of $nil (June 30, 2017 – $34,073) were incurred to a law firm whose principal is a former director of the Company.

Accounts payable and accrued liabilities includes $36,631 (September 30, 2017 – $6,865) due to companies

controlled by officer and directors of the Company

 

Cash flows from operating activities is still a signifiant bleeding. Still need investing and financing to cover that. No more long term debt.

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Stock price is 2.5 cents CAD per google.

https://www.google.com/search?source=hp&ei=EseKW6SlKYqz0PEP46WA2Aw&q=pdh+stock+price

 

Lot of dealings where the directors are the beneficiary

 

Key management personnel include persons having the authority and responsibility for planning, directing, and

controlling the activities of the Company as a whole. The Company has determined its key management personnel

to be executive and non-executive officers and directors of the Company.

The remuneration, including share-based payments, of key management personnel during the nine months ended

June 30, 2018 and 2017 were as follows:

1) Consulting fees of $100,800 (June 30, 2017 – $95,013) were paid to an accounting firm whose principal is the CFO and a director of

the Company.

2) Consulting fees of $nil (June 30, 2017 – $94,238) were paid to a director of the Company to manage the Chinese operations. The

amount is included in loss from discontinued operations.

3) Management fees of $39,675 and professional fees of $35,362 was paid to private company, whose principle is the Director and NonExecutive

Chair of the Company, during the nine months ended June 30, 2018 and 2017, respectively.

4) Professional fees of $138,091 (June 30, 2017 – $nil) were incurred to a law firm whose principal is a director of the Company.

5) Professional fees of $nil (June 30, 2017 – $34,073) were incurred to a law firm whose principal is a former director of the Company.

Accounts payable and accrued liabilities includes $36,631 (September 30, 2017 – $6,865) due to companies

controlled by officer and directors of the Company

 

Cash flows from operating activities is still a signifiant bleeding. Still need investing and financing to cover that. No more long term debt.

 

Yes, unless they are paid at a discounted price, I'm concerned about these dealings.

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Just to clarify this discussion and any assumptions about the related party transactions:

 

June 30, 2018 and 2017 were as follows:

1) Consulting fees of $100,800 (June 30, 2017 – $95,013) were paid to an accounting firm whose principal is the CFO and a director of

the Company. 

 

This is Alnesh...cheaper than a full-time CFO.  Also very good at his job, if you've seen the improvement in disclosures and clarity of our financials over the last 2 years.  He's also owns 43% of the company, as I do, and sits on the board.

 

2) Consulting fees of $nil (June 30, 2017 – $94,238) were paid to a director of the Company to manage the Chinese operations. The

amount is included in loss from discontinued operations.

 

Former manager for China...nothing paid in 2018 and nothing being paid going forward.

 

3) Management fees of $39,675 and professional fees of $35,362 was paid to private company, whose principle is the Director and NonExecutive

Chair of the Company, during the nine months ended June 30, 2018 and 2017, respectively.

 

This is for Simon's consulting services.  He's the former head of the BC Cancer Agency and Princess Margaret Hospital in Toronto.  He's working on growing the clinic business in a very significant way.  He's already worked for free for 3 years...we could not ask him to continue doing so without some form of compensation.  He's working for about a fifth of what he would get in the public sector and a tenth of what he would get in the private sector.

 

4) Professional fees of $138,091 (June 30, 2017 – $nil) were incurred to a law firm whose principal is a director of the Company.

 

This is for our Marta Davidson, our legal counsel.  Marta has her hands in every aspect of PDH...including all legal work, businesses, contracts, office administration and sits on the board as director and corporate secretary.  She also works for less than market rates for us like Simon.

 

5) Professional fees of $nil (June 30, 2017 – $34,073) were incurred to a law firm whose principal is a former director of the Company.

 

These were legal fees paid to Marta's former partner and law firm.  Like our China manager, nothing has been paid in 2018 and nothing will be paid going forward.

 

Cheers!

 

 

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Sanjeev, I applaud your transparency and effort to go above and beyond. While I believe PDH to be terminally ill, I think you have done a ton to be truthful and transparent, and if you were ever to start with a completely clean slate, I'd be willing to throw you some money. I just think this one is too far gone. I'm not being facetious when I say this, but I feel like I have better odds going to AC and putting it all on red than investing in PDH.

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Sanjeev, I applaud your transparency and effort to go above and beyond. While I believe PDH to be terminally ill, I think you have done a ton to be truthful and transparent, and if you were ever to start with a completely clean slate, I'd be willing to throw you some money. I just think this one is too far gone. I'm not being facetious when I say this, but I feel like I have better odds going to AC and putting it all on red than investing in PDH.

 

Hi Greg,

 

Thanks very much for your comments!  You may very well be right, but I'm going to do everything I can to prove you wrong. 

 

We would welcome you as a shareholder, regardless of whatever opinion you may have of us.    :D

 

Cheers!

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+1 on Sanjeev's honesty. This is one of the reasons why they have been able to raise funds and survive thus far. I wish PDH success especially given Sanjeev's goodness but I find the path forward very difficult.

 

Irrespective of the outcome, this is a great case study for investors. It is inexplicable that they went into venture capital investments especially in insurance. Venture capital business is hard in the best of times in the best of places let alone from Canada. Then there is the need to pay different people in the board for tagging along and very soon the economics of a nano cap become unviable. The collateral damage in this case may have been the fund (http://www.cornermarketcapital.com/annual-reports.html) - which had 40% of its assets in PDH (accounting for 25% of PDH) at the end of 2016. Apparently the fund added another 14.6 million shares at 1.52 million CAD at roughly 10.25 cents CAD in 2017 to this.

 

I hope it doesn't turn out to be another example of Buffett quote "When a management with a reputation for brilliance tackles a business with a reputation for bad economics, it is the reputation of the business that remains intact."

 

Sanjeev, I applaud your transparency and effort to go above and beyond. While I believe PDH to be terminally ill, I think you have done a ton to be truthful and transparent, and if you were ever to start with a completely clean slate, I'd be willing to throw you some money. I just think this one is too far gone. I'm not being facetious when I say this, but I feel like I have better odds going to AC and putting it all on red than investing in PDH.

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Just to clarify this discussion and any assumptions about the related party transactions:

...

 

This is Alnesh...cheaper than a full-time CFO.  Also very good at his job, if you've seen the improvement in disclosures and clarity of our financials over the last 2 years.  He's also owns 43% of the company, as I do, and sits on the board.

...

 

Cheers!

 

Looks like the MPIC fund's stake in the company increased by another 10 million shares after 2017.  ( 163 * .43 = 70 million shares, the total number of shares held by the fund at the end of 2017 was ~60 million) At a price of 3 cents CAD per share, it would be around 300K CAD.

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It is inexplicable that they went into venture capital investments especially in insurance. Venture capital business is hard in the best of times in the best of places let alone from Canada. Then there is the need to pay different people in the board for tagging along and very soon the economics of a nano cap become unviable. The collateral damage in this case may have been the fund (http://www.cornermarketcapital.com/annual-reports.html) - which had 40% of its assets in PDH (accounting for 25% of PDH) at the end of 2016. Apparently the fund added another 14.6 million shares at 1.52 million CAD at roughly 10.25 cents CAD in 2017 to this.

 

This is right on, I really like to understand the rationale on the VC style of investing, given that the company still needs outside funding. It's not just startup in insurance, but also telemedicine, and others. Maybe too eager to hit a home run?

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  • 2 weeks later...

https://globenewswire.com/news-release/2018/09/20/1574081/0/en/Premier-Diversified-Holdings-to-Acquire-Shares-of-ZED-Therapeutics-Inc.html

 

Premier Diversified Holdings Inc. ("Premier" or the "Company") (TSXV: PDH) announces that, subject to approval of the TSX Venture Exchange (the "TSXV"), it will acquire 5,144,000 Common shares of ZED Therapeutics Inc. ("ZED") for total consideration of $25,720.

 

ZED is a privately held company incorporated under the laws of Alberta. ZED is a start-up company which intends to participate in the medicinal hemp industry. Medicinal hemp is distinct from medicinal cannabis. Medicinal hemp is CBD oil and plant products with less than 0.3% THC.  The Company is acquiring common shares of ZED at a price of $0.005 per common share. All other subscribers in ZED's financing are acquiring common shares at the same price as the Company. Following closing of ZED's financing, Premier anticipates that it will hold approximately 36.7% of the issued and outstanding shares of ZED. ZED may complete future equity financings which would result in dilution of Premier's interest in ZED.

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https://globenewswire.com/news-release/2018/09/20/1574081/0/en/Premier-Diversified-Holdings-to-Acquire-Shares-of-ZED-Therapeutics-Inc.html

 

Premier Diversified Holdings Inc. ("Premier" or the "Company") (TSXV: PDH) announces that, subject to approval of the TSX Venture Exchange (the "TSXV"), it will acquire 5,144,000 Common shares of ZED Therapeutics Inc. ("ZED") for total consideration of $25,720.

 

ZED is a privately held company incorporated under the laws of Alberta. ZED is a start-up company which intends to participate in the medicinal hemp industry. Medicinal hemp is distinct from medicinal cannabis. Medicinal hemp is CBD oil and plant products with less than 0.3% THC.  The Company is acquiring common shares of ZED at a price of $0.005 per common share. All other subscribers in ZED's financing are acquiring common shares at the same price as the Company. Following closing of ZED's financing, Premier anticipates that it will hold approximately 36.7% of the issued and outstanding shares of ZED. ZED may complete future equity financings which would result in dilution of Premier's interest in ZED.

 

Possibly a stupid question, but why would a private company issue shares at 0.005 CAD? It seems that for a private company would to divide their equity into less shares that are actually worth something? It’s a bit like being a billionaire in Venezuela nowadays. They probably should cut a few zeros from the sharecount  like Venezuela did for their currency?

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https://globenewswire.com/news-release/2018/09/20/1574081/0/en/Premier-Diversified-Holdings-to-Acquire-Shares-of-ZED-Therapeutics-Inc.html

 

Premier Diversified Holdings Inc. ("Premier" or the "Company") (TSXV: PDH) announces that, subject to approval of the TSX Venture Exchange (the "TSXV"), it will acquire 5,144,000 Common shares of ZED Therapeutics Inc. ("ZED") for total consideration of $25,720.

 

ZED is a privately held company incorporated under the laws of Alberta. ZED is a start-up company which intends to participate in the medicinal hemp industry. Medicinal hemp is distinct from medicinal cannabis. Medicinal hemp is CBD oil and plant products with less than 0.3% THC.  The Company is acquiring common shares of ZED at a price of $0.005 per common share. All other subscribers in ZED's financing are acquiring common shares at the same price as the Company. Following closing of ZED's financing, Premier anticipates that it will hold approximately 36.7% of the issued and outstanding shares of ZED. ZED may complete future equity financings which would result in dilution of Premier's interest in ZED.

 

Is the stock puffing up 1000% in a day?

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https://globenewswire.com/news-release/2018/09/20/1574081/0/en/Premier-Diversified-Holdings-to-Acquire-Shares-of-ZED-Therapeutics-Inc.html

 

Premier Diversified Holdings Inc. ("Premier" or the "Company") (TSXV: PDH) announces that, subject to approval of the TSX Venture Exchange (the "TSXV"), it will acquire 5,144,000 Common shares of ZED Therapeutics Inc. ("ZED") for total consideration of $25,720.

 

ZED is a privately held company incorporated under the laws of Alberta. ZED is a start-up company which intends to participate in the medicinal hemp industry. Medicinal hemp is distinct from medicinal cannabis. Medicinal hemp is CBD oil and plant products with less than 0.3% THC.  The Company is acquiring common shares of ZED at a price of $0.005 per common share. All other subscribers in ZED's financing are acquiring common shares at the same price as the Company. Following closing of ZED's financing, Premier anticipates that it will hold approximately 36.7% of the issued and outstanding shares of ZED. ZED may complete future equity financings which would result in dilution of Premier's interest in ZED.

 

So, total market cap at $70,000?

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Companies issue low priced shares for 3 primary reasons to my knowledge:

1) Culturally - Chinese shares for example tend to like lower priced shares (US investors seem to prefer $10-100 culturally, but some of Asia is not of this norm... though not at $0.005)

2) it's easier to pump and dump because many rubes euphemistically believe $0.005 to $1 is "easier" than $1 -> $200 (and maybe in a pump it *is* easier)

3) <$1 shares are not really possible to short easily given the mechanics of brokerages/exchanges, and the way borrow collateral costs are measured (% rate measured on $1 at a minimum for example, some brokerage banning certain kinds of shorts).

 

So .... yeah.

 

Ben

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https://globenewswire.com/news-release/2018/09/20/1574081/0/en/Premier-Diversified-Holdings-to-Acquire-Shares-of-ZED-Therapeutics-Inc.html

 

Premier Diversified Holdings Inc. ("Premier" or the "Company") (TSXV: PDH) announces that, subject to approval of the TSX Venture Exchange (the "TSXV"), it will acquire 5,144,000 Common shares of ZED Therapeutics Inc. ("ZED") for total consideration of $25,720.

 

ZED is a privately held company incorporated under the laws of Alberta. ZED is a start-up company which intends to participate in the medicinal hemp industry. Medicinal hemp is distinct from medicinal cannabis. Medicinal hemp is CBD oil and plant products with less than 0.3% THC.  The Company is acquiring common shares of ZED at a price of $0.005 per common share. All other subscribers in ZED's financing are acquiring common shares at the same price as the Company. Following closing of ZED's financing, Premier anticipates that it will hold approximately 36.7% of the issued and outstanding shares of ZED. ZED may complete future equity financings which would result in dilution of Premier's interest in ZED.

 

Is the stock puffing up 1000% in a day?

 

I suggest renaming PDH to PCH ("Premier Cannabis Holdings") pronto.

And selling ZED product over the telemedicine line.

 

This could be yuge.

 

 

Sorry Sanjeev and all that

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I could use some cannabis to deal with my 95% loss on this stock. And it was a 5% position....pretty painful.

 

That said, it was an unforced error, 100% my fault. The challenges PDH faced were pretty clear when I bought in.

 

I'm rationalizing it quite simply: I've gotten a lot more out of COBF, monetarily and otherwise, than  I've lost on PDH. And for that I'm still grateful to Parsad.

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https://globenewswire.com/news-release/2018/09/20/1574081/0/en/Premier-Diversified-Holdings-to-Acquire-Shares-of-ZED-Therapeutics-Inc.html

 

Premier Diversified Holdings Inc. ("Premier" or the "Company") (TSXV: PDH) announces that, subject to approval of the TSX Venture Exchange (the "TSXV"), it will acquire 5,144,000 Common shares of ZED Therapeutics Inc. ("ZED") for total consideration of $25,720.

 

ZED is a privately held company incorporated under the laws of Alberta. ZED is a start-up company which intends to participate in the medicinal hemp industry. Medicinal hemp is distinct from medicinal cannabis. Medicinal hemp is CBD oil and plant products with less than 0.3% THC.  The Company is acquiring common shares of ZED at a price of $0.005 per common share. All other subscribers in ZED's financing are acquiring common shares at the same price as the Company. Following closing of ZED's financing, Premier anticipates that it will hold approximately 36.7% of the issued and outstanding shares of ZED. ZED may complete future equity financings which would result in dilution of Premier's interest in ZED.

 

Possibly a stupid question, but why would a private company issue shares at 0.005 CAD? It seems that for a private company would to divide their equity into less shares that are actually worth something? It’s a bit like being a billionaire in Venezuela nowadays. They probably should cut a few zeros from the sharecount  like Venezuela did for their currency?

 

You are correct.  But it's the minimum amount required.  Cheers!

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Companies issue low priced shares for 3 primary reasons to my knowledge:

1) Culturally - Chinese shares for example tend to like lower priced shares (US investors seem to prefer $10-100 culturally, but some of Asia is not of this norm... though not at $0.005)

2) it's easier to pump and dump because many rubes euphemistically believe $0.005 to $1 is "easier" than $1 -> $200 (and maybe in a pump it *is* easier)

3) <$1 shares are not really possible to short easily given the mechanics of brokerages/exchanges, and the way borrow collateral costs are measured (% rate measured on $1 at a minimum for example, some brokerage banning certain kinds of shorts).

 

So .... yeah.

 

Ben

 

Incorrect.  The shares were issued to us and 3 other insiders of MyCare who supported the company in the early days.  We (PDH) personally are not going into the medicinal hemp business...MyCare is.  The $0.005 per share is the minimum that has to be charged for the issued shares.  That is not the price of what any other shares will be issued at for ZED Therapeutics.  Cheers!

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I could use some cannabis to deal with my 95% loss on this stock. And it was a 5% position....pretty painful.

 

That said, it was an unforced error, 100% my fault. The challenges PDH faced were pretty clear when I bought in.

 

I'm rationalizing it quite simply: I've gotten a lot more out of COBF, monetarily and otherwise, than  I've lost on PDH. And for that I'm still grateful to Parsad.

 

If this is the end game for you, then I apologize for your loss.  It isn't for us, and I have not sold a share, but continue to acquire more and more.  Put your shares away in a dark drawer and just don't look at them except every 5 years. 

 

And my recommendation, just as I have been doing, is average down as you can.  Those that bought Fairfax in 1999 at the peak, and continued to average in through the rough years, are far better off than someone who just bought and held. 

 

While I sympathize with those that have bought and held, like any investment, I could not and cannot predict the outcome in the short-term...all I can control is the long-term outcome, and it's still game on for me!  Cheers!

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I wish the shareholders success but PDH is playing the venture capital game - i.e., betting on unproven business models. This is not value investing by any measure.

 

I would put my hard earned money elsewhere - there are many solid, shareholder friendly companies with strong balance sheets with proven business models. Just my 2 cents.

 

cheers!

shalab

 

Me and my wallet are rooting for PDH!

 

I'm not a shareholder and I am grateful to Parsad for everything he has done and contributes to our community. So I'm rooting for you as a non-shareholder!

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