Premier Diversified Holdings Inc. announces debt
VANCOUVER, British Columbia, March 19, 2021 (GLOBE NEWSWIRE) – Premier Diversified Holdings Inc. (“First“or the”Company“) (TSXV: PDH) announces that it has entered into a debt settlement agreement (“Debt Rules“) with MPIC Fund I, LP (“MPIC“) to settle US $ 1,400,000 (approximately CA $ 1,775,900) of debt owed by the Company, together with accrued and unpaid interest thereon. MPIC has agreed to convert US $ 1,400,000 of principal and interest in common shares of the Company at a deemed price of Cdn $ 0.03 per common share, subject to the approval of the TSX Venture Exchange (“TSXV“). It is expected that upon completion of debt settlement and subject to receipt of all required approvals, the Company will issue a total of 64,199,016 common shares (“Settlement actions“) to MPIC or its agents. The Company expects that the settlement of the debt will improve its financial position.
All Settlement Shares issued in connection with the Debt Settlement will be issued in accordance with prospectus and registration exemptions under applicable securities laws and will be subject to a four month and one day hold period imposed by securities laws and by the TSXV.
Settlement of the debt is subject to review and acceptance by the TSX Venture Exchange.
Disclosure of Related Party Transactions
MPIC is a related party of Premier by virtue of its general partner and the parent company of that company. Corner Market Capital Corporation (“SMCC“) is a privately held British Columbia corporation of which Sanjeev Parsad (President, CEO and director of Premier) and Alnesh Mohan (CFO and director of Premier) are directors, officers and majority shareholders. CMCC owns 65% of Corner Market Capital US Inc. (“CMC United States“), a privately held Delaware corporation. The directors and officers of CMC US include Sanjeev Parsad, Alnesh Mohan and G. Andrew Cooke. Mr. Cooke is also a director of Premier.
CMC US is the corporate general partner of MPIC. To the knowledge of the Company, MPIC is the registered holder of 45,278,351 common shares of Premier, or approximately 26.43% (on an undiluted basis) of the issued and outstanding common shares of the Company.
Sanjeev Parsad and Alnesh Mohan, both directors and officers of Premier, control or direct the CMCC. Mr. Cooke is not involved in the management of the CMCC or in investment decisions.
Because MPIC is a related party and a controlling person of Premier and the transaction involves the issuance of securities, the debt settlement constitutes a “related party transaction” within the meaning of Multilateral Instrument 61-101. Protection of holders of minority securities in special transactions (“MI 61-101“). Debt settlement was determined to be exempt from the requirements for obtaining a formal assessment or minority shareholder approval based on Articles 5.5 (b) and 5.7 (1) (e) of Regulation 61-101.
Premier does not have any securities listed or listed on any of the specified markets listed in section 5.5 (b) of MI 61-101. Premier relies on the exemption from minority shareholder approval in subsection 5.7 (1) (e) of NI 61-101 because the debt settlement addresses the financial hardship of the issuer. The debt settlement is designed to improve Premier’s financial condition and meets the criteria set out in section 5.5 (g) of MI 61-101: (i) the Company is in serious financial difficulty as it is indebted to a secured creditor , MPIC, for a total amount of US $ 2.485 million and the Company may not be able to repay all outstanding loans and interest; (ii) the transaction is designed to improve the financial condition of the Company and management believes this to be achieved as it removes $ 1.4 million of debt from the Company’s balance sheet, leaving the Company with a principal loan amount of $ 1.085 million due to MPIC which management expects the Company to repay; (iii) the transaction is not subject to court approval or a court order directing the transaction to be effected under bankruptcy or insolvency law; (iv) the Company has an independent director with respect to the transaction, Dr. Simon Sutcliffe; and (v) the Board of Directors of the Company, acting in good faith, has determined that the Company is in serious financial difficulty, that the transaction will improve the financial condition of the Company and that the terms of the transaction are reasonable within the circumstances of the Company.
Premier’s board of directors has reviewed and approved the debt settlement taking into account the following factors: Premier’s financial condition as reflected in its most recent financial statements; the actual and projected revenues of its two operating subsidiaries, Purposely Platform Inc. and MyCare MedTech Inc .; the expected returns from its investment in the Arcola townhouse development; and Premier’s ongoing general and administrative expenses and its monthly usage rate. The Board concluded that the Company does not expect to have sufficient funds to repay all loans made by MPIC before or on their respective due dates, and MPIC has already granted extensions of due dates for several loans. . The board is of the opinion that PDH expects to be able to repay its remaining debt after debt settlement, but the prolonged monetization of some assets due to the COVID-19 pandemic, is forcing the company to be proactive now and complete the Debt Settlement to restore the Company’s financial stability.
There were no significantly contrary views. The directors concerned abstained from voting as they had a conflict of interest.
Immediately after the debt settlement, MPIC will directly own (and CMCC and CMC US will indirectly own and exercise control or direction over) a total of 109,477,367 shares of the company, representing approximately 46.48% of the issued and in circulation of the company after issuance. Settlement Shares (on an undiluted basis).
About Premier Diversified Holdings Inc.
Premier Diversified Holdings Inc. participates in diversified industries through its acquisitions of securities and / or assets of public and private entities which it believes have significant return potential. It can act as a holding company (either directly or through a subsidiary) and can participate to varying degrees in the management of subsidiary entities.
On behalf of the board of directors
President, CEO and Director
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
This press release does not constitute an offer to sell or the solicitation of an offer to buy, and there will be no sale of the securities in jurisdictions where such an offer, solicitation or sale would be illegal. Any offering made will be made in accordance with available prospectus exemptions and limited to persons to whom the securities may be sold in accordance with the laws of those jurisdictions, and to persons authorized to sell the securities in accordance with the laws of those jurisdictions.
Further information relating to the Company is available on SEDAR at www.sedar.com.
Do not broadcast in the United States of America.
Legal Notice Regarding Forward-Looking Statements: This press release contains “forward-looking statements” within the meaning of applicable Canadian securities laws. Forward-looking statements are stated expectations or intentions. Forward-looking statements contained in this press release include statements regarding the issuance of securities by PDH, the improvement of the Company’s financial position related to the debt settlement, the ability of PDH to repay a portion of the loans of MPIC , statements regarding the current and projected revenues of Premier’s operating subsidiaries and expected returns from its investment in the Arcola townhouse project, and management’s expectations regarding Premier’s monthly general and administrative expenses. Factors that could cause actual results to differ materially include, but are not limited to, the following: Premier’s financial condition will not improve under the debt settlement Any income PDH draws from its operating subsidiaries or from the Arcola project will be insufficient to repay all or part of the loans to MPIC that are not included in the debt settlement, as the financial situation of the issuer will not improve, will remain the even or decrease further, that the time of receipt of anticipated income or returns may be delayed, that its current expenses, including general and administrative expenses, will increase, and unforeseen complications or obstacles due to COVID-19 or other factors could negatively impact Premier and / or MPIC. Investors are cautioned not to place undue reliance on forward-looking statements. Our policy is not to update forward-looking statements.