PDH - Premier Diversified Holdings Inc.

[Otsog]

Q1 up on Sedar

[benchmark]

Since no one else has posted this yet.  There are two items that came up in my newsfeed:

 

Premier Diagnostic Health Services Inc. Proposes Change of Business to an Investment Company

 

"The Company proposes to change its name to "Premier Diversified Holdings Inc." following the Proposed COB, and will seek to retain its trading symbol of "PDH,"

 

Premier Diagnostic Health Services Inc. Share Issuance

 

"announces the issuance of 100,000 common shares of the Company ("Shares") at a deemed price of $0.25 per Share to Sanjeev Parsad, President, CEO and director of the Company as a performance bonus awarded by the Company."

 

In light of Charlie's assertion that Buffet won't be able to recreate BH with insurance float, Sanjeev, are you seeing outsized opportunities in re-insurance?

[Libs]

A profitless venture, with massive share issuance, and now being sued by the local authorities.

 

All for over 3 X book.

 

Sanjeev, it's a testimony to you that I've put 3% into your venture out of sheer, blind faith. Looking forward to massive BV compounding from here, my friend  ;D

 

( Before buying, I read every single one of your posts since you started this site. The clincher was at one point you told someone to "kiss my brown A**")

[ourkid8]

Hi Sanjeev,

 

I received the documents in the mail and I have a few questions.  The document is well written and you have done a superb job to date.  Keep up the good work!

 

1.  Would you please elaborate on what your intentions are for PIHK?  Its very vague as it current says, "The business of this subsidiary has not yet been determined."

 

2.  You will now be allocating 33% of the portfolio into North American public securities - great!  Any intention of rolling up CMC into PDH? (That way you can dedicate 100% of your time to PDH instead of 80% as mentioned)

 

3.  Would you be able to shed additional colour on the progress of getting PDHK/PDC cash flow positive from operating activities?

 

4.  Stock options... care to shed additional colour if stock options will continue in the future or are you planning on shifting compensation more on a cash basis to prevent future dilution.  (I know its minimal but over time it adds up)

 

5.  Would you shed additional colour on why the shares are held in escrow until August 1, 2015.  I just do not understand the purpose. 

 

Tks,

S

[Parsad]

Hi Sanjeev,

 

I received the documents in the mail and I have a few questions.  The document is well written and you have done a superb job to date.  Keep up the good work!

 

1.  Would you please elaborate on what your intentions are for PIHK?  Its very vague as it current says, "The business of this subsidiary has not yet been determined."

 

PIHK is short for "Premier Investment (Hong Kong) Ltd".  Other than that, because Premier is a public company, I cannot discuss it any more than that.  What I can say is that China, India, and Asia in general, are not going to get smaller over the next 20-30 years. 

2.  You will now be allocating 33% of the portfolio into North American public securities - great!  Any intention of rolling up CMC into PDH? (That way you can dedicate 100% of your time to PDH instead of 80% as mentioned)

 

That number on the portfolio is solely due to the nature of corporate boards.  What we are trying to do is difficult for some board members to grasp, unless they've undergone an indoctrination into Berkshire and Buffett.  But we choose to work with boards and shareholders, rather than around them, and eventually they begin to understand. 

 

Depending on how complex things get and if it becomes an issue from a regulatory standpoint, rolling CMC into PDH would not be out of the question...just no plans for it now.  Again, the 80% number is something that lawyers come up with to satisfy exchanges...I spend all of my time at PDH or MPIC, and how PDH does directly affects MPIC...it's a symbiotic relationship.  In fact, MPIC has essentially moved into PDH's offices, and I will be changing the mailing address for MPIC shortly.  

 

3.  Would you be able to shed additional colour on the progress of getting PDHK/PDC cash flow positive from operating activities?

 

PDHK has been profitable for a long-time.  But since we hired our general manager in China, we will be rerouting that capital back into China growth.

 

I cannot comment on PDC and profitability.  I can say that I feel very good about PDC, and the cash flow engine I thought I saw there when we made the initial investment 10 months ago...it does really exist!    

 

4.  Stock options... care to shed additional colour if stock options will continue in the future or are you planning on shifting compensation more on a cash basis to prevent future dilution.  (I know its minimal but over time it adds up)

 

Again, this is a board thing...unless you really understand the cost of options and the fallacy in how accurately they compensate people, you don't really know why you use them.  The options granted were when I first joined the board...it was the way they did things.  You may have noticed part of my bonus as CEO was in actual shares at market price.  It is easy to persuade a board to act in a manner if it only includes you...convincing them that's how everyone should be compensated is another matter.  Once again, we work with boards, make changes to boards where we can (notice the addition of Andrew this year), and then they usually come around thereafter!  :)   

 

5.  Would you shed additional colour on why the shares are held in escrow until August 1, 2015.  I just do not understand the purpose.

 

Again, it was the way the board was compensating directors and executives.  1/3rd vests immediately, another 1/3rd vests a year later and the last 1/3rd two years later.  There is no rhyme or reason...it's just the way they do it and the way most boards do it.  This will change over time.

 

Getting the changes I wanted over the last 10 months has been very challenging with our board.  It is a slow, at times perplexing and frustrating endeavour!  This is actually true with most corporate boards, because the directors really have little or no understanding of how the business actually operates.  They also have very little understanding of how businesses are valued, forensic accounting skills, or the pervasiveness of corporate culture...which starts at the top.  As Buffett said before, boards are very collegial and long-term members are often set in their ways and incapable of other views. 

 

I understand why some CEO's like to ram resolutions and votes through...I feel for them.  But from an ethical standpoint, they work and report to the board, and they don't own the company, so they need to learn to work with boards and shareholders.  The fact that they cannot do that, makes them more dangerous than anything else...certainly not determined or driven.  But boards change with the emergence of CEO's, and eventually a synergy does develop between the CEO and a well-functioning board.  The board's duty is not to cow-tow to the CEO, but protect shareholder interests as their fiduciary...so there is a necessary balance there at times.  While this may stifle progress a bit, it also helps minimize corporate governance issues.  Cheers!

 

Tks,

S

[karthikpm]

What documents are these?

[Parsad]

What documents are these?

 

Karthik,

 

As a shareholder of Premier Diagnostics Health Services Inc, you will be receiving documents from Computershare for our SAGM on April 2nd.  You can vote online, by telephone, in person, or by returning the proxy material. 

 

If you received the shares directly, the material will be sent to you directly.  If your shares are held by a broker, please contact your broker for the material if has not been forwarded.  Some of the packages may be stuck in the mail, so please give it another week.

 

If you still have not received your proxy documents in a week, and those two avenues above fail, please contact Marta Davidson at Robertson Neil LLP at 604-685-1620.  Let her know you have not been able to receive your proxy documents.

 

Thanks very much!

 

Sanjeev

[Scudbucket]

For U.S. investors, what is the difference between PRDGF and PRDGF.PK?  Why is PRDGF at 0.20 and PRDGF.PK at 0.15?

 

What is that the best way to get access for U.S. investors?

 

Thanks.

[simplefocus]

For U.S. investors, what is the difference between PRDGF and PRDGF.PK?  Why is PRDGF at 0.20 and PRDGF.PK at 0.15?

 

What is that the best way to get access for U.S. investors?

 

Thanks.

 

Hi Scudbucket,

 

I may be wrong.  If you check the last traded date of PRDGF.PK, it was in Oct.  So PRDGF is the only actively traded symbol for Premier in US. 

 

 

[rkbabang]

"100%"  That is quite a supportive group of shareholders!

 

http://www.marketwired.com/press-release/premier-diagnostic-health-services-inc-shareholder-approval-change-business-obtained-cnsx-pdh-2006548.htm

[CONeal]

Does anyone have notes from the meeting? 

[OracleofCarolina]

I haven't seen voting results like that since Kim Jong-un's election!

 

All joking aside, when you do things the right way and treat shareholders as partners, this is expected.

[Jurgis]

I haven't seen voting results like that since Kim Jong-un's election!

 

Hey, I voted for Groveland, why is the tally at 100% for Parsad?

 

 

 

Just kidding.  8) Carry on, nothing to see here.  ;)

[muscleman]

Parsad, I wonder if PDH will become a PFIC under US tax laws at one point? This could make it tough for US investors to hold.

 

http://en.wikipedia.org/wiki/Passive_foreign_investment_company

Definition[edit]

Any foreign (i.e., non-U.S.) corporation meeting either the income test or the asset test is a PFIC with respect to each shareholder when the test is met.[4] PFIC status applies separately for each U.S. person owning shares, and also separately with respect to shares acquired at different times. PFIC status does not, itself, have any impact on the foreign corporation or foreign shareholders.

 

The income test is met if 75% or more of the foreign corporation's gross income is passive income, defined as foreign personal holding company income with modifications.

 

The asset test is met if 50% or more of the foreign corporation's average assets (as defined in the IR Code) produce, or could produce passive income, or are assets (such as cash and bare land) that produce no income. The test is applied based on the foreign corporation's adjusted basis, for U.S. tax purposes, of the assets, or at the election of the particular shareholder, fair market values of the assets.

 

Look-thru of 25% subsidiaries: Interests in 25% or more owned foreign corporations are treated similarly to partnership interests (i.e., looked through) for the income test and the asset test.

 

 

It is a bit vague to me for the asset test. Does asset mean pure book value on the balance sheet without adjustments?

 

[Parsad]

Parsad, I wonder if PDH will become a PFIC under US tax laws at one point? This could make it tough for US investors to hold.

 

http://en.wikipedia.org/wiki/Passive_foreign_investment_company

Definition[edit]

Any foreign (i.e., non-U.S.) corporation meeting either the income test or the asset test is a PFIC with respect to each shareholder when the test is met.[4] PFIC status applies separately for each U.S. person owning shares, and also separately with respect to shares acquired at different times. PFIC status does not, itself, have any impact on the foreign corporation or foreign shareholders.

 

The income test is met if 75% or more of the foreign corporation's gross income is passive income, defined as foreign personal holding company income with modifications.

 

The asset test is met if 50% or more of the foreign corporation's average assets (as defined in the IR Code) produce, or could produce passive income, or are assets (such as cash and bare land) that produce no income. The test is applied based on the foreign corporation's adjusted basis, for U.S. tax purposes, of the assets, or at the election of the particular shareholder, fair market values of the assets.

 

Look-thru of 25% subsidiaries: Interests in 25% or more owned foreign corporations are treated similarly to partnership interests (i.e., looked through) for the income test and the asset test.

 

 

It is a bit vague to me for the asset test. Does asset mean pure book value on the balance sheet without adjustments?

 

Very unlikely, as most of our revenue is currently generated through our PET/CT and MRI Clinics and future revenues will be generated by other operating businesses we acquire.  Cheers!

[muscleman]

 

Very unlikely, as most of our revenue is currently generated through our PET/CT and MRI Clinics and future revenues will be generated by other operating businesses we acquire.  Cheers!

 

I do understand that your revenue is mostly coming from your clinics and other operating businesses. My major concern is the asset test, not the income test. Are you planning to have almost no investment securities in PDH, and just focus on acquiring whole businesses and 25%+ partial ownership?

[Parsad]

 

Very unlikely, as most of our revenue is currently generated through our PET/CT and MRI Clinics and future revenues will be generated by other operating businesses we acquire.  Cheers!

 

I do understand that your revenue is mostly coming from your clinics and other operating businesses. My major concern is the asset test, not the income test. Are you planning to have almost no investment securities in PDH, and just focus on acquiring whole businesses and 25%+ partial ownership?

 

After a couple of acquisitions, most of the assets will be tied up in operating businesses...not cash or securities.  Cheers!

[muscleman]

 

Very unlikely, as most of our revenue is currently generated through our PET/CT and MRI Clinics and future revenues will be generated by other operating businesses we acquire.  Cheers!

 

I do understand that your revenue is mostly coming from your clinics and other operating businesses. My major concern is the asset test, not the income test. Are you planning to have almost no investment securities in PDH, and just focus on acquiring whole businesses and 25%+ partial ownership?

 

After a couple of acquisitions, most of the assets will be tied up in operating businesses...not cash or securities.  Cheers!

 

Cool. But is PDH a PFIC right now? Note that if it is a PFIC now and US investors don't file the form to purge the PFIC status, it will be considered a PFIC forever.

[Parsad]

 

Very unlikely, as most of our revenue is currently generated through our PET/CT and MRI Clinics and future revenues will be generated by other operating businesses we acquire.  Cheers!

 

I do understand that your revenue is mostly coming from your clinics and other operating businesses. My major concern is the asset test, not the income test. Are you planning to have almost no investment securities in PDH, and just focus on acquiring whole businesses and 25%+ partial ownership?

 

After a couple of acquisitions, most of the assets will be tied up in operating businesses...not cash or securities.  Cheers!

 

Cool. But is PDH a PFIC right now? Note that if it is a PFIC now and US investors don't file the form to purge the PFIC status, it will be considered a PFIC forever.

 

You'll have to decide the status of the investment with your tax advisor.  We are not making any distributions, the bulk of our revenue is from operations and the capital raised occurred in the 2015 fiscal year.  So we do not meet either the revenue or asset benchmark in the 2014 fiscal year. 

 

You and your tax advisor will have to decide whether you choose to elect the PFIC status.  We will not be issuing any sort of statements for U.S. shareholders like a 1099, which would be issued by Canadian mutual fund trusts, etc, when making distributions or allocation of interest/dividend income.

 

Cheers! 

[Zorrofan]

 

Very unlikely, as most of our revenue is currently generated through our PET/CT and MRI Clinics and future revenues will be generated by other operating businesses we acquire.  Cheers!

 

I do understand that your revenue is mostly coming from your clinics and other operating businesses. My major concern is the asset test, not the income test. Are you planning to have almost no investment securities in PDH, and just focus on acquiring whole businesses and 25%+ partial ownership?

 

After a couple of acquisitions, most of the assets will be tied up in operating businesses...not cash or securities.  Cheers!

 

Cool. But is PDH a PFIC right now? Note that if it is a PFIC now and US investors don't file the form to purge the PFIC status, it will be considered a PFIC forever.

 

You'll have to decide the status of the investment with your tax advisor.  We are not making any distributions, the bulk of our revenue is from operations and the capital raised occurred in the 2015 fiscal year.  So we do not meet either the revenue or asset benchmark in the 2014 fiscal year. 

 

You and your tax advisor will have to decide whether you choose to elect the PFIC status.  We will not be issuing any sort of statements for U.S. shareholders like a 1099, which would be issued by Canadian mutual fund trusts, etc, when making distributions or allocation of interest/dividend income.

 

Cheers!

 

Sanj,

 

Congratulations on this exciting move!  I have never bought a penny stock before, so it was a new experience for me. I hope that buying in a this stage is like buying BRK at the same time WEB did. Now this next part is very, very important - from this point on your sole focus must be on making me a billionaire!!  ;D

 

Congrats and good luck to us all!

cheers

Zorro

[PLynchJr]

Showing up as Premier Diversified Holdings in my Fidelity account today.

 

8)

[karthikpm]

Ticker symbol still the same?

[Parsad]

Ticker symbol still the same?

 

Yup, ticker is the same.  Cusip changes slightly.  Cheers!

[Hawks]

Gotta love where PDH is heading here. One small step at a time.

[redhots]

There's a cancer diagnosis every 10 seconds in China

http://www.bloomberg.com/news/articles/2015-06-01/selling-hope-how-the-business-of-cancer-is-taking-off-in-china