SIS Update

7/26/06 Update

Dear Fellow Shareholder,

I am writing this update as a recap of the last ten months. I am sorry for the delay in writing and getting this update to you. At this juncture I feel it is necessary to be as clear and direct as possible regarding the company’s current condition and my position in all this as well.

Since Prime’s inception as a public company in 1997, the company’s primary method for raising capital has been through the 504 Exemption. As of last year, there have been numerous changes that have affected Primeholdings’ ability to raise capital from the market using the 504 Exemption. Due to these changes, investors who have worked with Prime in the past are now refusing to participate in 504 related transactions. Many transfer agents adapted to these changes by not handling any transfers in the manner they had been done in the last decade. This is why over the last ten months PMHJ has been unable to raise more than $2,000.00 (two-thousand) through the 504 Exemption. Needless to say $2,000.00 over a ten-month period is not enough to run a company, grow it, or even keep it alive. Prior to this ten-month period, management personnel received only $250.00 in monthly compensation - the minimum salary required by our payroll and benefits outsourcing company in order to qualify to receive health benefits.

The fact that on top of exposing ourselves personally for the benefit of the company we didn’t even receive reasonable compensation makes it that much harder to tolerate. Approximately 94% of all monies raised over the last few years went to fund our subsidiary companies. That still did not mean that the business plans were properly capitalized to execute our business plans. Target was unique in that it had revenues since day one and could cover to a large degree most of its overhead from cash flow. Keeping up with the millions of dollars in growth (PMHJ’s commitment) was another matter.

So, where do we go from here? After considering the reality of the past and present, what is next for PMHJ? I have come to only one very positive conclusion after many months of investigation; oil and gas leases and alternative energies (biodiesel). Here is where there are many opportunities that provide tremendous returns for PMHJ. These present opportunities provide for “exploration and developmental” oil and gas finds that could potentially provide returns for at least (30) years. I have seen prospects with ranging annual return projections of 30 to 78 percent. No “wildcatting.” Best of all, we don’t need additional infrastructure, employees or development costs. More importantly, the investors of the past and present have become much more interested in oil and gas opportunities. Gas and oil has tremendous appeal to investors because of the recent economic developments in worldwide oil prices. This is why I feel that gas and oil has the best opportunity to be impervious to most investment restrictions and regulations. Investors will more likely overlook all the new changes because of the potential long-term returns. I feel this direction represents the best opportunity for PMHJ. I feel we have much more than a fighting chance. I am prepared to undertake this new challenge and I strongly believe gas and oil represents the best possible vehicle to our success.

Kind regard,

Tom

Link and Text For SEC Short Rules

http://www.sec.gov/rules/final/34-50103.htm#V

V. Rule 203 — Locate and Delivery Requirements for Short Sales

A. "Locate" Requirement

We are adopting proposed Rule 203, with some modifications, after considering the comments received.53 As adopted, Rule 203(b) creates a uniform Commission rule requiring a broker-dealer, prior to effecting a short sale in any equity security, to "locate" securities available for borrowing. For covered securities, Rule 203 supplants current overlapping SRO rules. Specifically, the rule prohibits a broker-dealer from accepting a short sale order in any equity security from another person, or effecting a short sale order for the broker-dealer's own account unless the broker-dealer has (1) borrowed the security, or entered into an arrangement to borrow the security, or (2) has reasonable grounds to believe that the security can be borrowed so that it can be delivered on the date delivery is due.54 The locate must be made and documented prior to effecting a short sale, regardless of whether the seller's short position may be closed out by purchasing securities the same day.55 The rule provides for some limited exceptions, including for short sales effected in connection with bona-fide market making, as discussed in further detail below.

As proposed, Rule 203(b) would have allowed the "person for whose account the short sale is executed" to perform a locate.56 We agree with commenters that the locate requirement should apply to a regulated entity -- the broker-dealer effecting the sale -- and have modified the adopted rule accordingly.57 Therefore, the rule as adopted makes clear that the broker-dealer effecting the short sale has the responsibility to perform the locate.58

We requested comment in the Proposing Release on the manner in which persons could satisfy the "reasonable grounds" determination in the proposed rule. In particular, we asked whether blanket assurances that stock is available for borrowing, i.e., "Easy to Borrow" or "Hard to Borrow" lists, provide an accurate assessment of the current lending market in a manner that would not impede liquidity and the ability of market participants to establish short positions, while at the same time guarding against potential problems inherent with large extended settlement failures. 59 After considering the comments received, we believe that, absent countervailing factors, "Easy to Borrow" lists may provide "reasonable grounds" for a broker-dealer to believe that the security sold short is available for borrowing without directly contacting the source of the borrowed securities.60 In order for it to be reasonable that a broker-dealer rely on such lists, the information used to generate the "Easy to Borrow" list must be less than 24 hours old, and securities on the list must be readily available such that it would be unlikely that a failure to deliver would occur.61 Therefore, absent adequately documented mitigating circumstances, repeated failures to deliver in securities included on an "Easy to Borrow" list would indicate that the broker-dealer's reliance on such a list did not satisfy the "reasonable grounds" standard of Rule 203.62

Broker-dealers create "Hard to Borrow" lists to identify securities that are in limited supply. Thus, locates for securities on "Hard to Borrow" lists are likely to be difficult. However, the fact that a particular lender placed certain securities on a "Hard to Borrow" list cannot be taken to mean that the lender represents that securities that are not on the "Hard to Borrow" list are easy to borrow. Commenters viewed "Hard to Borrow" lists with circumspection,63 and we understand that such lists are not widely used by broker-dealers. Therefore, the fact that a security is not on a hard to borrow list cannot satisfy the "reasonable grounds" test of Rule 203(b)(1)(ii).

1. Exceptions from the Locate Requirement

a. Broker-Dealer Accepting Short Sale Order from Another Broker-Dealer — Rule 203(b)(2)(i)
Rule 203(b)(2)(i) provides a new exception from the uniform locate requirement of Rule 203(b)(1) for a registered broker or dealer that receives a short sale order from another registered broker or dealer that is required to comply with 203(b)(1). For example, where an introducing broker-dealer submits a short sale order for execution, either on a principal or agency basis, to another broker-dealer,64 the introducing broker-dealer has the responsibility of complying with the locate requirement. The broker-dealer that received the order from the introducing broker-dealer would not be required to perform the locate. However, a broker or dealer would be required to perform a locate where it contractually undertook to do so or the short sale order came from a person that is not a registered broker-dealer.65

b. Bona-fide Market Making

We are adopting the proposed exception from the uniform "locate" requirement, as Rule 203(b)(2)(iii), for short sales executed by market makers, as defined in Section 3(a)(38) of the Exchange Act,66 including specialists and options market makers, but only in connection with bona-fide market making activities.67 Bona-fide market making does not include activity that is related to speculative selling strategies or investment purposes of the broker-dealer and is disproportionate to the usual market making patterns or practices of the broker-dealer in that security. In addition, where a market maker posts continually at or near the best offer, but does not also post at or near the best bid, the market maker's activities would not generally qualify as bona-fide market making for purposes of the exception.68 Further, bona-fide market making does not include transactions whereby a market maker enters into an arrangement with another broker-dealer or customer in an attempt to use the market maker's exception for the purpose of avoiding compliance with Rule 203(b)(1) by the other broker-dealer or customer.69

c. Additional Exception from the Locate Requirement — Rule 203(b)(2)(ii)

Pursuant to the suggestions of other commenters, we are including an additional exception from the uniform locate requirement of Rule 203(b)(1) for situations where a broker-dealer effects a sale on behalf of a customer that is deemed to own the security pursuant to Rule 200, although, through no fault of the customer or the broker-dealer, it is not reasonably expected that the security will be in the physical possession or control of the broker-dealer by settlement date, and is thus a "short" sale under the marking requirements of Rule 200(g) as adopted.70 Such circumstances could include the situation where a convertible security, option, or warrant has been tendered for conversion or exchange, but the underlying security is not reasonably expected to be received by settlement date.71 Rule 203(b)(2)(ii) as adopted provides that in all situations, delivery should be made on the sale as soon as all restrictions on delivery have been removed, and in any event no later than 35 days after trade date, at which time the broker-dealer that sold on behalf of the person must either borrow securities or close out the open position by purchasing securities of like kind and quantity.72

Two commenters advocated maintaining the current exception from the "affirmative determination" requirements of NASD Rule 3370 for short sales that result in fully hedged or arbitraged positions.73 One comment letter requested an exception from the proposed locate and delivery requirements of Rule 203 in a situation where a market participant has a long position in warrants or rights which are exercisable within 90 days and are subject to a fixed price per share conversion ratio.74 The other comment letter requested an exception from the proposed locate and delivery requirements in the situation where a market participant is long in-the-money call options.75 The commenter argued that excepting short sales in such situations promotes the ability of smaller issuers to acquire financing.

We have decided not to incorporate an exception from the locate and delivery requirements of Rule 203 for short sales that result in bona-fide fully hedged or arbitraged positions. Because "bona-fide" hedging and arbitrage can be difficult to ascertain, we are concerned about including a blanket exception for some activity that may have the potential to harm issuers and shareholders.76 During the period of the pilot, we prefer instead to address the situations noted by the commenters, and other similarly situated entities, through the exemptive process, to the extent warranted.77 This will allow us to consider the particular facts and circumstances relevant to each request, as well as any potentially negative ramifications, and, should we gain comfort with the described transaction(s), fashion appropriate relief.

Additionally, we have declined at this time to include an express exception from the locate requirements of Rule 203(b)(1) for transactions in exchange traded funds ("ETFs").78 We have observed high levels of fails in some ETFs. Rather than providing a blanket exception from the requirements of Rule 203, we would prefer instead to address the treatment of ETFs through the exemptive process, which would be consistent with the prior treatment of ETFs.79 In considering any exemptive request, the Commission would evaluate the causes of large fails in certain ETFs, as well as potential remedies to resolve such fails, if necessary.

Will It Be ENFORCED!?!

Mandatory Close-Out Requirement for Threshold Securities – Reg SHO will require each market center (e.g., NYSE, NASDAQ) to publish each settlement day a list of securities that have been failing to the CNS system operated by NSCC for a minimum amount over a defined period. (See the SEC’s release for the details of these requirements.) These securities are called “threshold securities.” Reg SHO requires that a broker-dealer who is failing for 13 consecutive settlement days in a threshold security close out its fail to deliver position by buying the securities in the market. If the broker-dealer cannot buy-in the securities (e.g., there are no offers in the name), the broker-dealer, and any broker for which it clears, is prohibited from accepting any additional short sale orders in that security unless it first borrows the security (or enters into a contract to borrow the securities) until the fail is cleaned up. If the broker is reasonably able to determine which of its account(s) contributed to the fail, it may impose this pre-borrow requirement only on the responsible account(s).

To reiterate, the 13 consecutive settlement day requirement for threshold securities also applies to long sale fails. Accordingly we also we will be monitoring long sale fails where our clients have failed to deliver on or prior to settlement date of a trade.

Note:

Specialists and other market makers will not be exempt from locate requirements with respect to threshold securities once their clearing firm has been failing to deliver threshold securities for 13 consecutive settlement days and has been unable to buy-in the amount of shares in which it has been failing for 13 settlement days.

"Short" List

Here it is:

http://www.otcbb.com/dynamic/shortinterest/shrt200607.txt

Much fanfare- seems short (LOL) on substance.

PMHJ info (edited due to retarded fromat):

Name: PRIMEHOLDINGS.CM NEW
Ticker: PMHJ
OTC MArket: NBB
Current Short: 2
Previous Short: 0
Change: 2
% Change: 100
Avg. Daily Volume: 3,387,762
Days to Cover: 1

>> Would it have killed them to make it easy to read? <<

More on NSS

From the RB JMCP board:

By: starbase7770
14 Jul 2006, 10:53 AM EDT
Msg. 11023 of 11023
Jump to msg. #

Good read

SEC Chairman confirms Naked Short Selling is a Serious Problem

Dave Patch

This past Wednesday the Securities and Exchange Commission approved the first step in the proposal to amend 18-month old Regulation SHO and finally address the issues of naked short selling abuses. The Commission approved the Division of Market Regulation proposal for public comment.

In the opening remarks to this segment of the public hearing Chairman Cox set the tone very early on where he stood on this issue and never wavered throughout the remainder of his remarks.

In his opening remarks on the Regulation SHO amendments the Chairman started by informing the Commission Staff, attorneys, and listening public that “the next item on our agenda is the serious problem of abusive naked short sales.”

We went from naked shorting being a figment of investor imaginations prior to 2004, to a small problem in 2004, and finally a “serious problem” in 2006. How life transforms itself.

Cox did not stop in just calling this a serious problem however; he spoke about how and why it was a serious problem.

“We are particularly concerned about the potential negative effect that substantial and persistent fails to deliver may be having on the market in some securities. Specifically, these fails to deliver can deprive shareholders of the benefits of ownership - voting, lending, and dividends from issuers. Moreover, they can be indicative of abusive naked short selling, which could be used as a tool to drive down a company's stock price. They may also undermine the confidence of investors who may believe that the fails to deliver are evidence of manipulative naked short selling in the stock. In turn, issuers may be harmed, as investors may be reluctant to commit capital to a stock that they believe is subject to abusive naked short selling.”

Finally we have a Chairman in place that is willing to speak the truth in public. Something Cox’s’ most recent predecessors did not have the courage to do. Former Chairman William Donaldson smugly smirked when confronted by Senator Bennett in the 2005 Senate Hearings on Capital Markets when naked shorting and SHO was brought to the table and former Chairman Harvey Pitt, who now speaks against this practice, never broached the subject matter while in position to correct it.

Now with a legacy of the Commission to downplay any type of egregious market abuses, for the Chairman to publicly cite a “serious problem” exists here must mean it is really a serious problem.

What made this an even greater monumental moment was how the members of the Division of Market Regulation and the remaining Commissioners presented this amendment. They did so as if new revelations had been made.

Under a forum of accolades and back slapping the Commissioners applauded the efforts of the Division of Market Regulations in honoring their commitment to monitor the 18-month old regulation and make necessary changes as was promised back in June of 2004. This 18-month review and reversal of the grandfather clause was in fact a delay tactic by the Commission to aid the most blatant violators to clean up their act free of charge. That free pass is now coming to an end.

A little history here folks…

In October 2003 the SEC submitted Regulation SHO for public comment and by June 2004 the Commission staff approved the rule. The staff allotted a six-month window for the industry to come in full compliance bringing us to January 2005 before industry compliance began.

In the period between October 2003 and June 2004 the public was afforded the opportunity to write comment letters to the SEC while the SEC was meeting privately with the congressional oversight committees and members of Wall Street to openly discuss option. What resulted from these private meeting would blow away the hopes of the investing public.

Despite the concerns raised by aides for the House Financial Services Committee, and despite a proposal submitted by the NASD in March 2004, the SEC Division of Market Regulation created an alteration to the proposal submitted for public comment. The alteration was a “grandfather clause” that was inserted into the rule making which allowed all prior settlement failures to be immune from the new closeout provision of SHO. The alterations came at the benefit of, and most likely the bequest of, Wall Street.
The final draft served notice to the investing public that their rights would take a back seat to the rights of broker-dealers and certain clients.

Fast-forward to today and the same Division of Market Regulations, with much of the same individuals involved; have identified this grandfather clause as a loophole that now needs to be closed. Repeal of the grandfather clause part of the modifications presented to the Commission staff.

In the 18-months that this provision existed however the members of Wall Street were able to slowly and methodically work through a large portion of the pre-existing fails as the SEC claims that the fails have been reduced some 50% on daily average from when SHO was first enacted in January 2005. Members of the staff of market regulation claiming SHO to be a success as few market disruptions associated with volatile short squeezes occurred while the fails were being eliminated.

In July 2005 and again Wednesday the SEC making serious claims that the grandfather clause had one sole purpose – insure short squeezes due to trade settlements did not occur.

Ironically, a glance at how these fails were removed from the market highlights an opposite impact to a short squeeze. While short squeezes were not prevalent, Bear Raids were. Data provided by the SEC under the Freedom of Information Act indicate that companies with excessive fails in the trading were methodically being driven down by Wall Street to cover these fails at lower prices and higher profits. Only when the fails were eradicated could these stocks begin to see positive price responses.

Was that just coincidence? Hardly.

While the SEC takes a myopic view of SHO success looking only at the reduction in the number of fails to deliver registered for any given security, success is really to be measured by how these fails were eliminated from the system and how many enforcement cases came against those the Commission admits entered into abusive trading practices.

I believe no enforcement cases have been brought to term as of yet.

Wednesday was the start of the new administration at the SEC. Chairman Cox has already exposed himself for gaffes made (Derailing Journalist Subpoenas) but Wednesday he began the process of making amends by addressing what no other has been willing to tackle. Time will tell how the remainder of the Commission staff responds.

As for the financial press and allegations of bias, consider this. The Chairman of the SEC states publicly that a “serious problem” exists in the markets and in the same sentence uses the word “abusive” and barely a word is mentioned the next day.

This is the same financial press that berates the SEC on a regular basis for failing to take action until the State regulators beat them to the punch. Now, on a subject matter the financial media claims does not exist, the SEC claims it is serious problem based on their thorough analysis and the financial press refuses to cover it. Go figure.

Senate Judiciary Hearings, State changes to laws, State task forces, SEC admissions of abuse and the financial press has suddenly swallowed their keyboards. What better reason to re-issue those subpoenas and find out where their alliances are.

There will be more to come on this issue and an opportunity for yet another round of public comment.

For now, lets just give our special thanks to Senator Hatch, Senator Bennett, Senator Specter, and Connecticut Director of Securities Ralph Lambiase for following through on their promise to put the interests of the people first.

SIS Update

7/12/06

Dear Thomas Aliprandi:

A user at Stock Information Systems has the following question:

Mr. Aliprandi,

I hope that you are doing well.

The natives are restless to say the least.

Are we getting any closer to an update? We really need a shot in the arm.

Thank you,
Fugeguy

<===========>

Dear Fugeguy,

Thank you for the well wishes.

I am sorry it has taken so long for me to answer your question.

I am sure the natives must be getting restless and yes an update is coming.

Things have truly changed over the last nine months.

Kindest regard,

Tom