Premier Diversified Holdings Inc. Announces Debt Settlement

March 19, 2021 2:05 AM EDT

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VANCOUVER, British Columbia, March 19, 2021 (GLOBE NEWSWIRE) -- Premier Diversified Holdings Inc. ("Premier" or the "Company") (TSXV: PDH) announces that it has entered into a debt settlement agreement ("Debt Settlement") with MPIC Fund I, LP ("MPIC") to settle USD$1,400,000 (approximately CAD$1,775,900) in debt owed by the Company, together with accrued and unpaid interest thereon. MPIC has agreed to convert USD$1,400,000 of principal and interest into Common shares of the Company at a deemed price of CAD$0.03 per Common share, subject to receipt of approval from the TSX Venture Exchange ("TSXV"). It is expected that upon completion of the Debt Settlement and subject to receipt of any requisite approvals, the Company will issue a total of 64,199,016 Common shares ("Settlement Shares") to MPIC or its nominee(s). The Company anticipates that the Debt Settlement will improve its financial position.

Any Settlement Shares issued in connection with the Debt Settlement will be issued in reliance on prospectus and registration exemptions under applicable securities laws and will be subject to a hold period of four months and a day imposed by securities laws and by the TSXV.

The Debt Settlement is subject to review and acceptance by the TSX Venture Exchange.

Related party transaction disclosure

MPIC is a related party of Premier by virtue of its corporate general partner, and by that corporation's parent company. Corner Market Capital Corporation ("CMCC") is a private B.C. company 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 holds 65% of Corner Market Capital US Inc. ("CMC US"), a private Delaware company. 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 Company's knowledge, MPIC is the registered holder of 45,278,351 Common Shares of Premier, 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 have control or direction over CMCC. Mr. Cooke is not involved in the management of CMCC or in investment decisions.

As MPIC is a related party to and a control 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 Minority Security holders in Special Transactions ("MI 61-101"). The Debt Settlement has been determined to be exempt from the requirements to obtain a formal valuation or minority shareholder approval based on sections 5.5(b) and 5.7(1)(e) of MI 61-101.

Premier does not have securities listed or quoted on any of the specified markets listed in section 5.5(b) of MI 61-101. Premier is relying on the exemption from minority shareholder approval in 5.7(1)(e) of MI 61-101 as the Debt Settlement addresses financial hardship of the issuer. The Debt Settlement is designed to improve the financial position of Premier 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, in the total amount of USD$2.485M and the Company may not be able to repay all of the outstanding loans and interest; (ii) the transaction is designed to improve the financial position of the Company and management believes this is achieved as it removes USD$1.4M in debt from the balance sheet of the Company, leaving the Company with a principal loan amount of USD$1.085M owed to MPIC which management anticipates the Company may repay; (iii) the transaction is not subject to court approval or a court order that the transaction be effected under bankruptcy or insolvency law; (iv) the Company has one independent director in respect of the transaction, Dr. Simon Sutcliffe; and (v) the Company's board of directors, acting in good faith, has determined that the Company is in serious financial difficulty, that the transaction will improve the Company's financial position and that the terms of the transaction are reasonable in the Company's circumstances.

The Board of Premier reviewed and approved the Debt Settlement considering the following factors: Premier's financial position as shown on its most recent financial statements; actual and projected revenues for its two operating subsidiaries, Purposely Platform Inc. and MyCare MedTech Inc.; anticipated returns from its investment in the Arcola townhouse development; and Premier's ongoing general and administrative expenses and monthly burn rate. The Board concluded that the Company does not expect to have sufficient funds to repay all of the loans made by MPIC prior to or on their respective maturity dates, and MPIC has already granted extensions on maturity dates for several loans. The Board is of the view that PDH expects to be able to repay its remaining debt following the Debt Settlement, but the prolonged monetization of certain assets due to the COVID-19 pandemic, requires the Company to be pro-active now and enter into the Debt Settlement to restore financial stability to the Company.

There were no materially contrary views. The interested directors abstained from voting to the extent they had a conflict of interest.

Immediately following 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 outstanding Shares of the Company following issuance of the 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 potential for significant returns. It may act as a holding company (either directly or through a subsidiary) and may participate in management of subsidiary entities to varying degrees.

On behalf of the Board of Directors

"Sanjeev Parsad"

Sanjeev ParsadPresident, CEO and Director

Neither 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 shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the securities in any jurisdictions in which such offer, solicitation or sale would be unlawful. Any offering made will be pursuant to available prospectus exemptions and restricted to persons to whom the securities may be sold in accordance with the laws of such jurisdictions, and by persons permitted to sell the securities in accordance with the laws of such jurisdictions.

Further information regarding the Company can be found on SEDAR at www.sedar.com.

Not for dissemination in the United States of America.

Legal Notice Regarding Forward Looking Statements: This news release contains "forward-looking statements" within the meaning of applicable Canadian securities legislation. Forward-looking statements are indicated expectations or intentions. Forward-looking statements in this news release include statements regarding the issuance of securities by PDH, the improvement of the Company's financial position relating to the Debt Settlement, PDH's ability to repay a portion of the loans from MPIC, statements regarding current and projected revenues from Premier's operating subsidiaries and anticipated 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 be materially different include but are not limited to the following: that Premier's financial position will not improve by virtue of the Debt Settlement, that any revenue which PDH makes from its operating subsidiaries or from the Arcola project will be insufficient to repay all or a portion of the loans to MPIC that are not included in the Debt Settlement, that the issuer's financial position will not improve, will stay the same or will decline further, that the timing of receipt of anticipated revenues or returns may be delayed, that its ongoing expenses including general and administrative expenses will increase and that complications or unforeseen obstacles from COVID-19 or other factors may negatively impact Premier and/or MPIC. Investors are cautioned against placing undue reliance on forward-looking statements. It is not our policy to update forward looking statements.

For further information, contact:
Sanjeev Parsad, President and CEO

Phone: (604) 678.9115
Fax: (604) 678.9279
E-mail: sparsad@pdh-inc.com
Web: www.pdh-inc.com

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Source: Premier Diversified Holdings Inc.


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