0001493152-18-017927.txt : 20181226 0001493152-18-017927.hdr.sgml : 20181226 20181226124051 ACCESSION NUMBER: 0001493152-18-017927 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 56 CONFORMED PERIOD OF REPORT: 20181031 FILED AS OF DATE: 20181226 DATE AS OF CHANGE: 20181226 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Progreen US, Inc. CENTRAL INDEX KEY: 0001079297 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 650832025 STATE OF INCORPORATION: DE FISCAL YEAR END: 0430 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-25429 FILM NUMBER: 181252093 BUSINESS ADDRESS: STREET 1: 6443 INKSTER ROAD, STREET 2: SUITE 170-D CITY: BLOOMFIELD TOWNSHIP STATE: MI ZIP: 48301 BUSINESS PHONE: (248) 973-8851 MAIL ADDRESS: STREET 1: 6443 INKSTER ROAD, STREET 2: SUITE 170-D CITY: BLOOMFIELD TOWNSHIP STATE: MI ZIP: 48301 FORMER COMPANY: FORMER CONFORMED NAME: ProGreen Properties, Inc. DATE OF NAME CHANGE: 20091026 FORMER COMPANY: FORMER CONFORMED NAME: DIVERSIFIED PRODUCT INSPECTIONS INC DATE OF NAME CHANGE: 20010309 FORMER COMPANY: FORMER CONFORMED NAME: FAIRFAX GROUP INC DATE OF NAME CHANGE: 19990211 10-Q 1 form10-q.htm

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For Quarter Ended: October 31, 2018

 

Commission File Number 000-25429

 

PROGREEN US, INC.

(Exact name of registrant as specified in its charter)

 

Delaware   59-3087128
(State or other jurisdiction of   (I.R.S. Employer
incorporation or organization)   Identification No.)

 

2667 Camino del Rio South, Suite 312

San Diego, CA 92108-3763

(Address of principal executive offices) (Zip Code)

 

(619) 487-9585

(Registrant’s telephone number, including area code)

 

 

(Former name, former address and former fiscal year, if change since last report)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days: Yes [X] No [  ].

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X] No [  ]

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer [  ]   Accelerated filer [  ]
Non-accelerated filer [  ] (Do not check if a smaller reporting company) Smaller reporting company [X]
    Emerging growth company [X]

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [  ]

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). [  ] Yes [X] No

 

The number of shares of the registrant’s only class of common stock issued and outstanding as of December 13, 2018 was 1,115,873,051 shares.

 

 

 

   
   

 

PROGREEN US, INC.

INDEX

 

    Page
     
Part I. Financial Information 1
     
Item 1. Financial Statements 1
     
  Condensed Consolidated Balance Sheets as of October 31, 2018 (unaudited) and as of April 30, 2018 2
     
  Condensed Consolidated Statements of Operations for the Three and Six Months Ended October 31, 2018 and 2017 (unaudited) 3
     
  Condensed Consolidated Statements of Cash Flows for the Six Months Ended October 31, 2018 and 2017 (unaudited) 4
     
  Notes to Unaudited Condensed Consolidated Financial Statements 5
     
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. 11
     
Item 3. Quantitative and Qualitative Disclosures about Market Risk 17
     
Item 4. Controls and Procedures. 17
     
Part II. Other Information 17
     
Item 6. Exhibits. 17
     
Signatures 18

 

   
   

 

PART I. FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

Certain information and footnote disclosures required under accounting principles generally accepted in the United States of America have been condensed or omitted from the following financial statements pursuant to the rules and regulations of the Securities and Exchange Commission. It is suggested that the following financial statements be read in conjunction with the year-end financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended April 30, 2018.

 

The results of operations for the three and six months ended October 31, 2018 and 2017 are not necessarily indicative of the results for the entire fiscal year or for any other period.

 

 1 
   

 

ProGreen US, Inc.

Condensed Consolidated Balance Sheets

 

   October 31, 2018   April 30, 2018 
   (Unaudited)     
         
Assets          
Agricultural land  $160,000   $- 
Land under development   500,000    500,000 
Property   660,000    500,000 
Cash   23,299    106,256 
Accounts receivable, net of allowance of $36,910 and $37,960   58,791    - 
Notes receivable - land contracts, net of allowance of $218,743 and $221,080   70,659    70,659 
Other assets   96,675    82,909 
Note receivable - related party   1,014,270    1,187,500 
Property and equipment:          
Vehicles, furniture and equipment, net of accumulated depreciation of $46,881 and $46,703   3,804    3,804 
Total assets  $1,927,498   $1,951,128 
           
Liabilities and Stockholders’ Deficit          
Accounts payable and accrued expenses  $876,530   $348,657 
Reservation and tenant deposits   52,471    48,085 
Notes payable   23,512    23,512 
Note payable, related parties, net of discount of $0 and $0, respectively   781,200    882,555 
Note payable - Ann Arbor   39,363    58,952 
Derivative liabilities   1,175,090    772,895 
Convertible debentures, net of discount of $99,309 and $32,682, respectively   698,803    839,247 
Dividend payable   156,375    108,579 
Liability under land contract-related party   520,000    400,000 
Total liabilities   4,323,344    3,482,482 
           
Stockholders’ deficit          
Convertible preferred stock, Series A $.0001 par value, 1,000,000 shares authorized, 967,031 and 967,031 shares issued and outstanding, at October 31, 2018 and April 30, 2018   97    97 
Convertible preferred stock, Series B $.0001 par value, 8,534,625 shares authorized, 8,534,625 and 8,534,625 shares issued and outstanding at October 31, 2018 and April 30, 2018   853    853 
Common stock, $.0001 par value, 1,250,000,000 shares authorized, 739,576,346 and 421,577,283 outstanding          
at October 31, 2018 and April 30, 2018   73,959    42,157 
Additional paid in capital   7,066,356    6,221,833 
Accumulated other comprehensive income   (20,937)   (30,999)
Accumulated deficit   (9,428,803)   (7,723,312)
Total controlling interest   (2,308,475)   (1,489,371)
Noncontrolling interest in consolidated subsidiary   (87,371)   (41,983)
Total stockholders’ deficit   (2,395,846)   (1,531,354)
Total liabilities and stockholders’ deficit  $1,927,498   $1,951,128 

 

See accompanying notes to these unaudited condensed consolidated financial statements

 

 2 
   

 

ProGreen US, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

 

   Three Months Ended   Six Months Ended 
   October 31,   October 31, 
   2018   2017   2018   2017 
Revenues:                    
                     
Rental revenue  $-   $15,525   $-   $31,050 
Net gain on sale of properties   -    -    -    39,905 
Management fees   51,284    -    51,284    - 
Total Revenue  $51,284   $15,525   $51,284   $70,955 
Expenses:                    
Selling, general & administrative   72,780    82,918    228,795    195,393 
Professional fees   90,444    91,090    225,677    150,290 
Total operating expenses  $163,224   $174,008   $454,472   $345,683 
                     
Operating loss   (111,940)   (158,483)   (403,188)   (274,728)
Other expenses and income:                    
Interest expense, net   (912,456)   (682,187)   (1,449,210)   (778,979)
Loss on settlement of liabilities, common stock   -    -    (33,240)   (44,659)
Gain on change in fair value of derivative liabilities   466,640    514,297    182,555    628,925 
Loss before income tax expense  $(557,756)  $(326,373)  $(1,703,083)  $(469,441)
Net Loss   (557,756)  $(326,373)  $(1,703,083)  $(469,441)
Less: Net loss attributable to noncontrolling interest  $(13,357)  $3,693   $(45,388)  $(7,243)
Net Loss attributable to parent  $(544,399)  $(330,066)  $(1,657,695)  $(462,198)
Deemed dividend on redeemable, convertible preferred stock, Series B  $23,898   $23,898   $47,796   $47,796 
Net Loss attributable to parent common shareholders  $(568,297)  $(353,964)  $(1,705,491)  $(509,994)
Other comprehensive income (loss)                    
Change in foreign currency translation adjustments  $1,594   $(21,923)  $10,062   $(22,562)
Total other comprehensive income (loss)  $1,594   $(21,923)  $10,062   $(22,562)
Comprehensive net loss attributable to parent  $(566,703)  $(375,887)  $(1,695,429)  $(532,556)
                     
Net loss per share - basic and fully diluted   (0.00)  $(0.00)  $(0.00)  $(0.00)
Weighted average shares outstanding - basic and fully diluted   546,381,314    361,764,956    485,234,708    355,858,490 

 

See accompanying notes to these unaudited condensed consolidated financial statements

 

 3 
   

 

ProGreen US, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

 

   October 31, 
   2018   2017 
Cash used in operating activities          
Net loss  $(1,703,083)  $(469,441)
Adjustments to reconcile net loss to net cash used in operating activities:          
Compensation - restricted stock units   -    1,000 
Depreciation   -    12,268 
Gain on sale of rental properties   -    (39,905)
Recovery of bad debt, net   (10,425)   - 
Gain on change in fair value of derivative liabilities   (182,555)   (628,925)
Loss on settlement of liabilities   33,240    44,659 
Warrant expense   20,100    - 
Amortization of debt discount   744,251    607,189 
Changes in operating assets and liabilities:          
Accounts receivable   (57,741)   (33,364)
Accounts payable and accrued expenses   584,706    10,292 
Reservation and tenant deposits   4,386    15,499 
Other current assets   (13,766)   (13,351)
Cash used in operating activities   (580,887)   (494,079)
Cash provided by investing activities          
Purchase of office equipment   -    (2,584)
Proceeds from sale of properties   -    231,000 
Cash received from notes receivable - land contracts   9,375    1,786 
Purchase of land   (40,000)   - 
Loan for note receivable - related party   649,473    (272,000)
Loan repayment by related party   (476,243)   50,000 
Cash provided by investing activities   142,605    8,202 
           
Cash provided by financing activities          
Proceeds from the sale of common stock   50,000    75,000 
Proceeds from notes payable-related party   -    410,070 
Proceeds from notes payable   -    49,000 
Repayment of notes payable   (19,589)   (342,115)
Repayment of notes payable related party   (101,355)   - 
Proceeds from convertible debentures   467,707    615,438 
Repayment of convertible debentures   (51,500)   (559,664)
Decrease in obligations under capital leases   -    (3,373)
Cash provided by financing activities   345,263    244,356 
Effect of foreign exchange on cash   10,062    (22,562)
Net change in cash   (82,957)   (264,083)
           
Cash at beginning of period   106,256    289,095 
Cash at end of period  $23,299   $25,012 
Supplemental information:          
Cash paid for interest  $147,452   $159,574 
           
Noncash investing and financing transactions:          
Reclassification of equity to derivative liability due to tainting  $320,890   $151,166 
Reclassification of derivative liability to equity due to conversion  $516,140   $374,354 
Dividend declared not paid, redeemable, convertible preferred stock, Series B  $47,796   $47,796 
Discount on derivatives  $780,000   $490,371 
Purchase of land on account  $120,000   $- 
Conversion of debt and accrued interest into common stock  $603,731   $101,098 

 

See accompanying notes to these unaudited condensed consolidated financial statements

 

 4 
   

 

ProGreen US, Inc.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINACIAL STATEMENTS

 

Note 1. Financial Statement Presentation

 

The unaudited condensed consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X as promulgated by the Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all the information and footnotes required by U.S. GAAP for complete financial statements and they should be read in conjunction with the audited consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended April 30, 2018 (the “Annual Report”). The accompanying interim financial statements are unaudited; however, in the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The results of operations for the six month period ended October 31, 2018, are not necessarily indicative of the results that may be expected for the year ending April 30, 2019.

 

Basis of Presentation

 

The Company’s significant accounting policies are summarized in Note 1 of the Annual Report. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the interim unaudited condensed consolidated financial statements. There were no significant changes to these accounting policies during the six months ended October 31, 2018, and the Company does not expect the adoption, as applicable, of other recent accounting pronouncements will have a material impact on its financial statements.

 

Going Concern

 

The Company’s unaudited condensed consolidated financial statements for the period ended October 31, 2018, have been prepared on a going concern basis which contemplates the realization of assets and settlement of liabilities and commitments in the normal course of business. The Company will require additional funding to execute its future strategic business plan. Successful business operations and its transition to attaining profitability are dependent upon obtaining additional financing and achieving a level of revenue adequate to support its cost structure. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

 

Revenue, Cost of Sales, Management Fees and Concentration

 

The Company’s wholly owned subsidiary Progreen Farms LLC (“Progreen Farms “) entered an agreement with an outside party (the “Purchaser”) to delivery 2,500 tons of chili peppers at .24 cents a pound. It was anticipated that Contel would be the sole supplier and Progreen Farms act as the distributor. However, it was determined that Contel could not deliver the required volume and other producers were contacted The price charged by Contel to Progreen is the same price (i.e. .24 cents) as Progreen Farms charges to the Purchaser thus revenue and cost of sales net to zero. Revenue and expenses are recorded when delivery is made to the Purchaser and truck weight certificates are received.

 

The Company charged 10% of invoice amounts to producers, other than Contel, for billing services which is recorded as a management fee. During the six months ended October 31, 2018 management fees totaled $51,284.

 

During the six months ended October 31, 2018, the Purchaser notified the Company that it has located another source of chili peppers for 2019 and would not need produce from Progreen Farms.

 

Reclassifications

 

Certain amounts in previous periods have been reclassified to conform to fiscal year ending 2019 classifications.

 

 5 
   

 

ProGreen US, Inc.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINACIAL STATEMENTS

 

Note 2. Agricultural Land, Land Under Development and Liability under Land Contract-Related Party

 

During the six months ended October 31, 2018, the Company acquired agricultural land and under the terms of a definitive purchase agreement, the Company recorded agricultural land at cost in the amount of $160,000, paid $40,000 of the purchase price and recorded a liability under land contract for the balance due in the amount of $120,000 and $0 as of October 31, 2018 and April 30, 2018, respectively. No interest is due under the terms of the definitive purchase agreement. The Company held agricultural land in the amount of $160,000 and $0, as of October 31, 2018 and April 30, 2018, respectively.

 

The Company held land under development in the amount of $500,000 as of October 31, 2018 and April 30, 2018. The liability under land contract to purchase the land was $400,000 as of October 31, 2018 and April 30, 2018.

 

As of October 31, 2018 payments under the agreements are due as follows for liability under land contract – related party:

 

2019  $200,000 
2020   120,000 
2021   100,000 
2022   100,000 
Total  $520,000 

 

Note 3. Accounts Receivable

 

Accounts receivable, in the amount of $58,791, is due in connection with the Company’s wholly owned subsidiary, ProGreen Farms LLC’s administrative services rendered to third parties and sale of chili peppers during the six months ended October 31, 2018. Accounts Receivable totaled $58,791 and $0 as of October 31, 2018 and April 30, 2018, respectively.

 

Note 4. Note Receivable - Related Party

 

During the six months ended October 31, 2018, the Company contributed an additional $476,243 to Inmobiliaria Contel S.R.L.C.V. (“Contel”) and received $649,473 from Contel from the proceeds on the sale of chili peppers. Note Receivable - Related Party Note totaled $1,014,270 and $1,187,500 as of October 31, 2018 and April 30, 2018, respectively.

 

Note 5. Notes Payable

 

During the six months ended October 31, 2018 no payments were made under Notes Payable. The amount due under the Southfield debt had a balance outstanding of $14,512 as of October 31, 2018 and April 30, 2018. The amount outstanding under the unsecured promissory note with an unrelated party note payable totaled $9,000 as of October 31, 2018 and April 30, 2018.

 

Note 6. Note Payable, Related Party

 

During the six months ended October 31, 2018, the Company paid $101,355 of amounts due under the Company’s credit line promissory notes with its President and Chief Executive Officer.

 

Notes payable related parties includes the amounts due under the Credit Lines with a total balance outstanding of $781,200 and $882,555 as of October 31, 2018 and April 30, 2018, respectively.

 

Amortization of the related discount totaled $0 and $47,635 for the six months ended October, 31, 2018 and 2017, respectively. The Company recorded total interest expense in connection with the Credit Lines in the amount of $20,336 and $14,557 for the six months ended October, 31, 2018 and 2017, respectively. Total accrued interest due under the Credit Lines was $70,953 and $50,617 as of October, 31, 2018 and April 30, 2018, respectively.

 

 6 
   

 

ProGreen US, Inc.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINACIAL STATEMENTS

 

Note 7. Note Payable to Bank of Ann Arbor

 

During the six months ended October 31, 2018 the Company paid $19,589 under the note payable Ann Arbor and had a balance outstanding of $39,363 and $58,952 as of October 31, 2018 and April 30, 2018, respectively. The Company recorded interest expense in connection with this note payable in the amount of $1,914 and $11,918 for the six months ended October 31, 2018 and 2017, respectively. Accrued interest due under the note payable totaled $0 and $304 as of October 31, 2018 and April 30, 2018, respectively.

 

Principal payment requirements on the notes payable to Bank of Ann Arbor are as follows:

 

2019  $16,859 
2020   22,504 
Thereafter   - 
Total  $39,363 

 

Note 8. Fair Value Measurement

 

Financial Accounting Standards Board (“FASB”) ASC Topic 820, Fair Value Measurements and Disclosures, requires disclosure of the fair value (“FV”) of financial instruments held by the Company. FASB ASC Topic 825, Financial Instruments, defines FV, and establishes a three-level valuation hierarchy for disclosures of FV measurement that enhances disclosure requirements for FV measures. The carrying amounts reported in the balance sheets for receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of their FVs because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The three levels of valuation hierarchy are defined as follows:

 

Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets.

 

Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets in inactive markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

 

Level 3 inputs to the valuation methodology us one or more unobservable inputs which are significant to the FV measurement.

 

The Company analyzes all financial instruments with features of both liabilities and equity under FASB ASC Topic 480, Distinguishing Liabilities from Equity, and FASB ASC Topic 815, Derivatives and Hedging.

 

The Company uses Level 2 inputs for its valuation methodology for its derivative liability as its FV was determined by using the binomial pricing model based on various assumptions for convertible debt and Black-Scholes model based on various assumptions for the warrants and equity investments. The Company’s derivative liability is adjusted to reflect FV at each period end, with any increase or decrease in the FV being recorded in results of operations as adjustments to FV of derivatives.

 

The Company held certain financial instruments that are measured at fair value on a recurring basis as follows:

 

 

Convertible debt totaling $798,112 and $0 at October 31, 2018 and April 30, 2018 respectively, with a derivative liability totaling $42,000 and $0 at October 31, 2018 and April 30, 2018, respectively, which are categorized as Level 3.

     
  Equity investments totaling $754,602 and $704,602 at October 31, 2018 and April 30, 2018, respectively, with a derivative liability totaling $1,117,586 and $772,895 at October 31, 2018 and April 30, 2018, respectively, which are categorized as Level 3.
     
  12,000,000 and 0 Common stock warrants at October 31 ,2018 and April 30,2018, respectively, with a derivative liability totaling $15,504 and $0 at October 31, 2018 and April 30, 2018, respectively, which are categorized as Level 3.

 

 7 
   

 

ProGreen US, Inc.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINACIAL STATEMENTS

 

The related gain on change in fair value of derivatives totaled $182,555 and $628,925 for the six months ended October 31, 2018 and October 31, 2017, respectively.

 

Note 9. Derivative Liabilities

 

During the six months ended October 31, 2018 the Company identified conversion features embedded within its convertible debt. The Company determined that the conversion feature of the convertible notes represents an embedded derivative since the Notes are convertible into a variable number of shares upon conversion. The fair value of the embedded derivative liabilities on the convertible notes were determined using a multinomial lattice models on the issuance dates with the assumptions in the table below.

 

The fair values at the commitment dates and re-measurement dates for the convertible debt and warrants treated as derivative liabilities are based upon the following estimates and assumptions made by management for the 6 months ended October 31, 2018:

 

Stock Price  $.0019 - $.0155 
Exercise Price  $.001 - $.0574 
Risk Free Rate   2.20% - 12.00%
Volatility   0% - 370%
Term (Years)   (.08) - .55 

 

The fair value of the embedded derivative liabilities on the subscription agreements at commitment date and re-measurement date are based upon the following estimates and assumptions made by management for the 6 months ended October 31, 2018:

 

Stock Price  $0.00 
Exercise Price  $.02 - $.05 
Risk Free Rate   2.90% - 3.00%
Volatility   155.60% - 211.90%
Term (Years)   2.64 - 4.50 

 

The fair value of the Company’s derivative liabilities at October 31, 2018 is as follows:

 

April 30, 2018- Balance  $772,895 
Discount on debt   780,000 
Reclass to equity due to tainting   320,890 
Reclass to equity due to conversions   (516,140)
Fair Value mark to market adjustment   (182,555)
   $1,175,090 

 

Note 10. Financing Agreement and Convertible Debentures

 

During the six months ended October 31, 2018 the Company issued three unsecured convertible notes payable in a total amount of $467,707 in cash, with original issue discounts and debt issuance costs totaling $30,878, interest rates of 12% per annum and due dates ranging from November 22, 2018 to June 14, 2019. The Holders shall have the right, in their sole and absolute discretion, at various dates to convert all or any part of the outstanding amount due under the Notes into fully paid and non-assessable shares of Common Stock. The conversion prices range from 55% to 65% multiplied by the average of the two lowest trading prices of the common stock during the 20 trading day period on two convertible notes and 15 trading day period on one convertible note, ending on the latest complete Trading Day prior to the conversion. The Company may prepay the amounts outstanding to the holders at any time up to the 180th day from issuance date.

 

 8 
   

 

ProGreen US, Inc.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINACIAL STATEMENTS

 

During the six months ended October 31, 2018 the Company made cash payments totaling $51,500 and noncash payments totaling $546,906 (along with $56,829 accrued interest) in the form of conversions to 315,481,316 shares of the Company’s common stock under the terms of its convertible notes.

 

During the six months ended October 31, 2018 the Company entered into an agreement to amend and restate the terms of an existing convertible note. In consideration, the Company (i) issued 400,000 shares of the Company’s common stock and (ii) increased the note principal amount by $26,000 and the lender agreed to forbear its conversion rights until August 10, 2018. The Company recognized $33,240 for loss on the settlement of liabilities.

 

During the six months ended October 31, 2018 the Company paid $5,000 to the Auctus fund to amend certain terms of their convertible note issued on November 29, 2017. This amount was included in interest expense.

 

The balance of the convertible notes, net of discounts was $698,803 and $839,247 at October 31, 2018 and April 30, 2018, respectively. Amortization of debt discount was $744,251 and $559,554 for the six months ended October, 31, 2018  and 2017, respectively.

 

The Company recorded total interest expense in connection with the convertible debentures in the amount of $101,442 and $43,926 for the six months ended October, 31, 2018 and 2017, respectively. Total accrued interest due under the convertible debentures was $72,146 and $144,388 as of October, 31, 2018 and April 30, 2018, respectively

 

Effective August 31, 2018 the Company terminated its May 30, 2018 financing commitment agreement with Global Capital Partners Fund Limited.

 

Note 11. Subscription Agreements

 

During the six months ended October 31, 2018 the Company entered into a Subscription Agreement with Tangiers Global, LLC for the sale by the Company to Tangiers Global LLC an aggregate of 2,117,747 shares of the Company’s Common Stock, with a cash investment in the amount of $50,000, at a price of $0.02361 per share.

 

Note 12. Equity

 

During the six months ended October 31, 2018 the Company issued 315,881,316 shares of Common Stock, to settle conversions of $603,731 of principal and interest of convertible notes and to amend and restate an existing note.

 

During the six months ended October 31, 2018 the Company issued in total 2,117,747 shares of Common Stock for in cash in the amount of $50,000.

 

As of October 31, 2018, the total accrued dividend for the Series B Preferred stock was $156,375.

 

As of October 31, 2018 and April 30, 2018, amounts accrued for the true up feature of equity investments was $564,672 and $0, respectively. This amount was included in accounts payable and accrued liabilities in the condensed consolidated balance sheet and recorded as part of interest expense in the condensed consolidated statement of operations as of October 31, 2018.

 

 9 
   

 

ProGreen US, Inc.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINACIAL STATEMENTS

 

Note 13. Warrants

 

For the six months ended October 31, 2018, 750,000 warrants were issued, and none were exercised or forfeited. The 750,000 warrants were fair valued for $20,100 and recorded as professional fees on the face of income statement. The Company’s outstanding and exercisable warrants as of October 31, 2018 are presented below:

 

   Number outstanding   Weighted Average Exercise Price   Contractual Life in Years   Intrinsic Value 
Warrants Outstanding as of April 30, 2018   15,000,000   $0.03    3.65      
Warrants Exercisable as of April 30, 2018   14,000,000   $0.03    3.64   $58,560 
Warants Granted   750,000                
Warrants Foreited                    
Warants Exercised                    
Warrants Outstanding as of October 30, 2018   15,750,000   $0.03    3.21      
Warrants Exercisable as of October 30, 2019   14,750,000   $0.04    3.21   $- 

 

Note 14. Subsequent Events

 

Subsequent to October 31, 2018, convertible debt in the amount of $127,516 plus accrued interest totaling $71,824 were converted into 376,296,705 shares of the Company’s common stock.

 

On November 12, 2018, the Company entered into a Business Loan in the principal amount of $100,000, with an interest rate of 28% per annum requiring 102 payments of $1,242.72 daily. In addition, there was an origination fee of $2,000.

 

On December 14, 2018, the Company entered into a Merchant Agreement in the principal amount of $150,000, with an interest rate of 39% per annum requiring 120 payments of $1,737.50 daily. In addition, there was an banking fee of $7,500.

 

On December 5, 2018, the Company amended (the “Amendment”) the December 31, 2017 7% promissory note in the principal amount of $1,427,262, payable to American Residential Fastigheter AB (“AMREFA”), issued by the Company in redemption of 8,534,625 shares of Series B Convertible Preferred Stock held by AMREFA. The Series B Stock has not been assigned by AMREFA to the Company for cancellation and AMREFA is the registered owner of the Series B Stock. As AMREFA had not assigned the Preferred Series B Stock for cancellation and the Preferred Series B stock remained outstanding as of October 31, 2018 and April 30, 2018, the note was not considered outstanding. Under the Amendment, the Company and AMREFA have agreed; i) to cancel the Series B Stock in redemption of the Series B Stock; ii) to waive all defaults under the Original Note, iii)the principal amount of the Original Note and related interest are due and payable on June 30, 2019 and iv) the Company shall provide for payment to AMREFA of all amounts due under the Original Note, as amended, from the proceeds of the Company’s Bridge Financing currently in progress.

 

 10 
   

 

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

RESULTS OF OPERATIONS

 

The following discussion of our financial condition and results of operations should be read in conjunction with the financial statements and notes thereto and other financial information included elsewhere in this report.

 

Certain statements contained in this report, including, without limitation, statements containing the words “believes,” “anticipates,” “expects” and words of similar import, constitute “forward looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, including our ability to create, sustain, manage or forecast our growth; our ability to attract and retain key personnel; changes in our business strategy or development plans; competition; business disruptions; adverse publicity; and international, national and local general economic and market conditions.

 

GENERAL

 

Throughout this Form 10-Q, the terms “we,” “us,” “our,” “ProGreen” and the “Company” refer to Progreen US, Inc., a Delaware corporation and, unless the context indicates otherwise, includes our subsidiaries.

 

The Company was incorporated in Florida on April 23, 1998 and reincorporated in Delaware on December 12, 2008. Effective September 11, 2009, we changed our name from Diversified Product Inspections, Inc. to ProGreen Properties, Inc. to reflect the change in our business operations to the purchase of income producing real estate assets, and changed our name effective July 22, 2016 to Progreen US, Inc. to reflect initiation of development operations in Baja Mexico.

 

OUR BUSINESS

 

We have recently moved our offices in 2017, from Oakland County, Michigan, to San Diego, California, proximate to our agricultural and Cielo Mar development projects in Baja California, on which our current business operations are focused. The purchase of a condominium unit on July 28, 2009 initiated our real estate development operations directed at purchasing income-producing residential real estate apartment homes, condominiums and houses in the State of Michigan. Our business model since our initial property purchases in 2009 has been to acquire, refurbish and upgrade existing properties into more environmentally sustainable, energy efficient, comfortable and healthier living spaces so that they meet standards that exceed what is often the norm for most single-family homes, condominiums and apartments. Once a property has been acquired, refurbished and rented, the property would be put back on the market, but now with a favorable environmental profile.

 

We have sold all properties in Michigan, but still have outstanding payments due from five properties, as the properties were sold on land contracts, and now concentrate on the same line of business in the Cielo Mar development. At this time, we do not offer managed properties as investment properties.

 

We have expanded our real estate development operations to include Baja California, Mexico. On February 11, 2016, we signed a definitive agreement with Contel for Progreen to finance the first tract of land of approximately 300 acres which is being developed by Contel for agriculture use. Four wells have been drilled on the first tract, and the growing operation has begun delivering chili peppers to Huy Fong Foods, Inc. an importer to the U.S. market under a produce purchase agreement for chili peppers.

 

In addition, we have formed the Procon joint venture subsidiary, which is the holding company for further non-agricultural land and real estate developments. On January 23, 2017, Procon entered into a definitive purchase agreement for, and has taken possession of, a large tract of land situated near the town of El Rosario in Baja California. The land, planned for residential real estate development, is bordering the Pacific Ocean and covers a total area of 2,016 ha (5,000 acres) with 7.5 km (4.5 miles) of ocean front.

 

 11 
   

 

The transfer of deed for the 5,000-acre oceanfront property to Procon was completed on March 15, 2017, and a Master Plan has been created for a very large resort-type retirement and vacation community with the name “Cielo Mar”. The first phase of the development of the master plan was presented to the authorities for approval, during the summer and is expected to be approved shortly.

 

Status of Current Bridge Financing

 

On May 30, 2018 the Company entered into a financing commitment agreement with Global Capital Partners Fund Limited (the “Lender”) for a $5,000,000 financing secured by a first mortgage lien on our Cielo Mar property in Baja California, Mexico. On August 28, 2018 we notified the Lender that we were terminating the financing commitment, effective August 31, 2018, due to the Lender’s acknowledged inability to fulfill its obligations to provide the loan consistent with the terms of the commitment.

 

We are in negotiations with other firms for a bridge loan in the amount of $5,000,000, or in that size range, and expect to receive positive responses from one or more of the firms.

 

Outstanding Convertible Notes

 

We have approximately $699,000 (unamortized discounts total approximately $99,000) in the aggregate of convertible debt outstanding, in the form of convertible notes ranging in size from $2,400 to $236,085. $139,738 of these notes are past due and, although we are in technical default, the lender has not sent us notice of default. Certain of the lenders are exercising their rights to convert their loans in to common stock and selling the shares in the public market for our stock.

 

Default terms in these notes generally provide for an increase in shares issuable pursuant to the lenders’ conversion rights, as well as cross-default provisions and provisions reducing the conversion prices if our common stock sells below specified prices in the over-the-counter market.

 

RESULTS OF OPERATIONS

 

Three months Ended October 31, 2018 Compared to Three Months Ended October 31, 2017

 

During the three months ended October 31, 2018, we incurred a net loss of approximately $558,000 compared to a net loss of approximately $326,000 for the three months ended October 31, 2017. Revenue increased approximately $36,000 in the three months ended October 31, 2018 compared to the three months ended October 31, 2017.

 

Rental revenue decreased to $0 as compared to approximately $15,000 during the three months ended October 31, 2017. The Company received rental income from no properties during the three months ended October 31, 2018 as compared to five in the comparable prior period. All remaining rental properties were sold in fiscal 2018. Management fee revenue increased to approximately $51,000 as compared to $0 during the three months ended October 31, 2017. The Company received management fees, for billing services, from outside producers on sales of the producers’ chili peppers.

 

Selling, general & administrative decreased to approximately $73,000 as compared to approximately $83,000 during the three months ended October 31, 2017, mainly due to the following: Expenses relating to the rental properties decreased approximately $31,000 as compared to the three months ended October 31, 2017 because all properties were sold in fiscal 2018. Salary expense decreased approximately $14,000 as compared to the three months ended October 31, 2017 because the Company’s President no longer receives a salary. During the three months ended October 31, 2018, the Company recorded a bad debt recovery of approximately $3,000 due to payments received on certain land contracts. These decreases were offset by increases in expenses as follows: Expenses relating to the Cielo Mar office in Ensenada and the move to San Diego increased approximately $10,000 as compared to the three months ended October 31, 2017. Taxes increased approximately $13,000 as compared to the three months ended October 31, 2017 due to Michigan taxes and California Franchise taxes. Expenses relating to Procon increased approximately $15,000 as compared to the three months ended October 31, 2017.

 

Professional fees decreased approximately $645 for the three months ended October 31, 2018 as compared to the comparable prior period mainly due to an increase in financial consulting, valuation services fees and Procon architecture fees, partially offset by a decrease in audit, accounting and legal fees.

 

 12 
   

 

Six months Ended October 31, 2018 Compared to Six Months Ended October 31, 2017

 

During the six months ended October 31, 2018, we incurred a net loss of approximately $1,703,000 compared to a net loss of approximately $469,000 for the six months ended October 31, 2017. Revenue decreased approximately $20,000 in the six months ended October 31, 2018 compared to the six months ended October 31, 2017.

 

Rental revenue decreased to $0 as compared to approximately $31,000 during the six months ended October 31, 2017. The Company received rental income from no properties during the six months ended October 31, 2018 as compared to five in the comparable prior period. All remaining rental properties were sold in fiscal 2018. Net gain on sale of properties decreased to $0 as compared to approximately $40,000 during the six months ended October 31, 2017. The Company sold no properties in the six months ended October 31, 2018 as compared to four in the comparable prior period. Management fee revenue increased to approximately $51,000 as compared to $0 during the six months ended October 31, 2017 due to management fees, for billing services, from outside producers on sales of the outside producers’ chili peppers received by the Company.

 

There have been fluctuations in certain expenses in the six months ended October 31, 2018, as compared to the six months ended October 31, 2017. In the six months ended October 31, 2018, selling, general and administrative expenses increased approximately $33,000 as compared to the comparable prior period mainly due to the following changes:

 

There were increases in certain expenses:

 

Funding fees expense increased by approximately $75,000 during the six months ended October 31, 2018 as compared to the comparable prior period due to the Company’s payment of a nonrefundable fee in connection with a terminated financing commitment agreement.

 

Housing allowance expense increased approximately $3,000 during the six months ended October 31, 2018 as compared to the comparable prior period due to increased rent in San Diego

 

Miscellaneous expense increased by approximately $15,000 during the six months ended October 31, 2018 as compared to the comparable prior period due to Procon’s activity.

 

Fees related to the firm which disseminates the Company's press release increased by approximately $5,000 during the six months ended October 31, 2018 as compared to the comparable prior period due to an increase in newswire fees.

 

Other taxes expense increased by approximately $25,000 during the six months ended October 31, 2018 as compared to the comparable prior period due to value added taxes relating to Procon’s operations.

 

Office rent expense increased by approximately $11,000 during the six months ended October 31, 2018 as compared to the comparable prior period due to the Company’s leases in San Diego and in Ensenada.

 

Fees and licensing expense increased by approximately $3,000 during the six months ended October 31, 2018 as compared to the comparable prior period due costs incurred for the Cielo Mar development projects in Baja California.

 

These increases were offset by decreases in certain expenses:

 

Commissions and Closing costs decreased by approximately $32,000 during the six months ended October 31, 2018 as compared to the comparable prior period due to the selling of no properties in the current period as compared to four properties in the prior comparable period

 

Rental property costs and depreciation decreased approximately $43,000 for the six months ended October 31, 2018 as compared to the comparable prior period as a result of a reduction in costs incurred in connection with the rental properties the Company acquired from ARG due to the sale of all remaining rental properties in fiscal 2018.

 

 13 
   

 

Wage related expenses decreased by approximately $7,000 during the six months ended October 31, 2018 as compared to the comparable prior period due to adjustments to salaries and payroll taxes in the prior comparable quarter. No wages were paid in the current quarter.

 

Travel expense decreased approximately $4,000 during the six months ended October 31, 2018 as compared to the comparable prior period due to moving the Company’s primary operations to Baja California, Mexico and the President’s move to Mexico resulting in reduced travel needs.

 

Miscellaneous office costs decreased by approximately $8,000 during the six months ended October 31, 2018 as compared to the comparable prior period due budgetary constraints, reduced Ensenada expenses and closing of Michigan office.

 

Bad debt recovery increased from $0 for the six month period ended October 31, 2017 to approximately $10,000 in the current six month period ended October 31, 2018 as the Company received payments from past due tenants and collected amounts on six previously written off land contract receivables.

 

Professional fees increased approximately $75,000 for the six months ended October 31, 2018 as compared to the comparable prior period mainly due to an increase in financial consulting, valuation services fees and Procon architecture fees, partially offset by a decrease in audit, accounting and legal fees.

 

Interest expense, net increased approximately $670,000 for the six months ended October 31, 2018 as compared to the comparable prior period mainly due to the increase in amortization of debt discounts, prepayment penalties and interest recognized in connection with convertible notes in the current six month period as compared to the comparable prior six month period.

 

Loss on settlement of liabilities, common stock increased to approximately $33,000 for the six months ended October 31, 2018 as compared to $45,000 for the comparable prior period due to a forbearance payment and issuance of common stock relating to a convertible note payable in the current quarter and the partial payoff of a convertible note payable and issuance of common stock under make whole provision in the prior comparable quarter.

 

Derivatives gain decreased approximately $446,000 to approximately $183,000 for the six months ended October 31, 2018 as compared to a derivatives gain of $629,000 for the comparable prior period due to the fair value adjustments in connection with the convertible notes and common stock warrants in the current six month period.

 

LIQUIDITY AND CAPITAL RESOURCES

 

At April 30, 2018, we had total assets of approximately $1,951,000 compared to total assets of approximately $1,927,000 at October 31, 2018. The decrease in total assets was primarily due to:

 

Property increased $160,000 due to Company’s acquisition of agricultural land under the terms of a definitive purchase agreement, the Company recorded agricultural land at cost in the amount of $160,000.

 

Accounts receivable increased approximately $59,000 as a result of amounts due to the Company for chili pepper sales.

 

Other assets increased approximately $13,000 mainly due to an in decrease in Procon’s other asset of approximately $35,000 offset by an increase in Procon’s prepaid expenses of approximately $15,000 and funding fees of $33,000.

 

These increases in assets were partially offset by decreases in: cash of approximately $83,000 and Note Receivable- Related Party decreased approximately $173,000 as a result of the Company’s additional loan to Contel in the amount of approximately $476,000 partially offset by repayments made in connection with the cost of chili peppers the amount of approximately $649,000.

 

 14 
   

 

Cash decreased to approximately $23,000 for the period ended October 31, 2018, compared to cash of $106,000 at April 30, 2018. Cash used in operating activities was approximately $581,000 for the period ended October 31, 2018, as compared with cash used in operating activities of approximately $494,000 in the comparable period in fiscal 2017.

 

At October 31, 2018, we had stockholders’ deficit of approximately $2,396,000 compared to a deficit of approximately $1,531,000 at April 30, 2018.

 

Trends in Increasing or Decreasing Company’s liquidity

 

The Company’s liquidity risk is principally associated with the financing of the Company’s operations with short-term convertible debt.

 

Should the Company be unable to repay the convertible notes and/or the convertible note holder are unable to convert the note into common shares, a default may be declared, causing an adverse change in our liquidity position.

 

The Company’s wholly owned subsidiary Progreen Farms LLC (“Progreen Farms”) entered an agreement with an outside party (the “Purchaser”) to delivery 2,500 tons of chili peppers at .24 cents a pound. The Company was notified the Purchaser has located another source of product and would not need product from Progreen Farms for 2019. Purchaser was the only vendor of Progreen Farms and the loss of revenues and cash flow will have an adverse affect on the Company’s liquidity.

 

If the Company is unable to acquire additional funding, our ability to finance current operations, fund loans to Contel and/or continue development of the Cielomar project would be adversely affected.

 

Known Trends Or Uncertainties That Would Be Projected To Affect The Company’s Operations Materially In An Unfavorable Or Favorable Manner

 

The Company’s wholly owned subsidiary Progreen Farms LLC (“Progreen Farms “) entered an agreement with an outside party (the “Purchaser”) to delivery 2,500 tons of chili peppers at .24 cents a pound. It was anticipated that Contel would be the sole supplier and Progreen Farms act as the distributor. However, it was determined that Contel could not deliver the required volume and other producers were contacted.

 

The Company charges 10% of invoice amounts to producers, other than Contel, for billing services which is recorded as a management fee. During the six months ended October 31, 2018 management fees totaled $51,284.

 

During the six months ended October 31, 2018, the Purchaser notified the Company that it has located another source of chili peppers for 2019 and would not need produce from Progreen Farms.

 

Outstanding Debt Obligations and Credit Lines

 

The Company has credit line promissory notes with its President and Chief Executive Officer Lines with a total balance outstanding of $781,200 as of October 31, 2018.

 

Convertible Note Financings

 

We have approximately $699,000 (unamortized discounts total approximately $99,000) in the aggregate of convertible debt outstanding, in the form of convertible notes.

 

 15 
   

 

Capital Lease and other Contractual Obligations

 

Effective April 1, 2016, the Company entered into a lease agreement for office space for a period of thirty-six (36) months for its Michigan office. The monthly lease payments for the period April 1, 2016 through March 1, 2017 total $872, for the period April 1, 2017 through March 1, 2018 total $903 and the period April 1, 2018 through March 1, 2019 total $934.

 

On May 30, 2017, the Company lease our offices at 2667 Camino del Rio South, Suite 312, San Diego, CA 92108, of approximately 740 sq. ft., at a current monthly rent of $1,250, under a month-to-month lease.

 

On May 16, 2017, ProCon leased an office in Ensenada, Mexico of approximately 3,300 Sq. Ft, at a current monthly rent of $30,000 pesos per month, the rent will increase to $40,000 peso per month on May 16, 2018. The lease commenced on May 16, 2017 and will expire on May 15, 2020.

 

Commitments For Estimated Capital Expenditure Requirements

 

The Company does not have any commitments for estimated capital expenditure requirements.

 

Critical Accounting Policies

 

The summary of critical accounting policies below should be read in conjunction with the discussion of the Company’s accounting policies included in the Company’s Annual Report on Form 10-K for the year ended April 30, 2018. We consider the following accounting policy to be the most critical going forward:

 

Basis of Presentation - The Company’s financial statements for the year ended April 30, 2018, have been prepared on a going concern basis which contemplates the realization of assets and settlement of liabilities and commitments in the normal course of business. The consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of uncertainties.

 

Estimates - The preparation of financial statements required us to make estimates and judgments that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported periods. We based our estimates and judgments on historical experience and on various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. There can be no assurances that actual results will not differ from those estimates. On an ongoing basis, we will evaluate our accounting policies and disclosure practices as necessary.

 

 16 
   

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

 

Not applicable.

 

ITEM 4. CONTROLS AND PROCEDURES

 

a. Disclosure controls and procedures.

 

As of the end of period covered by this report, the Company carried out an evaluation, with the participation of the Company’s Chief Executive Officer and Principal Financial Officer, of the effectiveness of the Company’s disclosure controls and procedures pursuant to Securities Exchange Act Rule 13a-15. Based upon that evaluation, the Company’s Chief Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures (as defined in the Securities Exchange Act of 1934, as amended (“Exchange Act”) Rule 13a15(e)) as of October 31, 2018, are not effective, due to lack of segregation of duties, based on the evaluation of these controls and procedures required by paragraph (b) of Rule 13a15.

 

b. Changes in internal controls over financial reporting.

 

No changes were made to the Company’s internal controls in the quarterly period covered by this report that have materially affected, or are reasonably likely materially to affect, the Company’s internal control over financial reporting.

 

PART II—OTHER INFORMATION

 

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds.

 

None

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

 

None

 

ITEM 4. MINE SAFETY DISCLOSURES

 

Not applicable

 

ITEM 5. OTHER INFORMATION.

 

 

ITEM 6.   EXHIBITS.
     
31*   Certification of Chief Executive Officer and Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.
     
32**   Certification of Chief Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith.

 

* Filed herewith
** Furnished herewith

 

Copies of the following documents are included as exhibits to this report pursuant to Item 601 of Regulation S-K.

 

SEC Ref.
No.
  Title of Document
101.INS   XBRL Instance Document
101.SCH   XBRL Taxonomy Extension Schema Document
101.CAL   XBRL Taxonomy Calculation Linkbase Document
101.DEF   XBRL Taxonomy Extension Definition Linkbase Document
101.LAB   XBRL Taxonomy Label Linkbase Document
101.PRE   XBRL Taxonomy Presentation Linkbase Document

 

The XBRL related information in Exhibits 101 to this Quarterly Report on Form 10-Q shall not be deemed “filed” or a part of a registration statement or prospectus for purposes of Section 11 or 12 of the Securities Act of 1933, as amended, and is not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of those sections.

 

 17 
   

 

SIGNATURES

 

In accordance with the requirements of the Exchange Act, the Company has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

  PROGREEN US, INC.
     
Dated: December 26, 2018 BY: /s/ Jan Telander
    Jan Telander
    President and Chief Executive Officer


 

18
   

 

EXHIBIT INDEX

 

31*   Certification of Chief Executive Officer and Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.
     
32**   Certification of Chief Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith.

 

* Filed herewith
** Furnished herewith

 

Copies of the following documents are included as exhibits to this report pursuant to Item 601 of Regulation S-K.

 

SEC Ref.
No.
  Title of Document
101.INS   XBRL Instance Document
101.SCH   XBRL Taxonomy Extension Schema Document
101.CAL   XBRL Taxonomy Calculation Linkbase Document
101.DEF   XBRL Taxonomy Extension Definition Linkbase Document
101.LAB   XBRL Taxonomy Label Linkbase Document
101.PRE   XBRL Taxonomy Presentation Linkbase Document

 

The XBRL related information in Exhibits 101 to this Quarterly Report on Form 10-Q shall not be deemed “filed” or a part of a registration statement or prospectus for purposes of Section 11 or 12 of the Securities Act of 1933, as amended, and is not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of those sections.

 

 19 
   

EX-31 2 ex31.htm

EXHIBIT 31

 

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES OXLEY ACT OF 2002

 

CERTIFICATION

 

I, Jan Telander, certify that:

 

1. I have reviewed this Quarterly Report on Form 10-Q of Progreen US, Inc.;

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

  a. designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
     
  b. designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
     
  c. evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
     
  d. disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5. I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

  a. all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
     
  b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting;

 

DATE: December 26, 2018 /s/ Jan Telander
  Jan Telander, President, Chief Executive Officer
  and Principal Financial Officer

 

 
 

 

EX-32 3 ex32.htm

 

EXHIBIT 32

 

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report of Progreen US, Inc. (the “Company”) on Form 10-Q for the quarter ended October 31, 2018 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jan Telander, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge: (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

 

  /s/ Jan Telander
  Jan Telander, President, Chief Executive Officer
  and Principal Financial Officer

 

December 26, 2018

 

The foregoing certification is not filed with the Securities and Exchange Commission as part of the Form 10-Q or as a separate disclosure document and is not incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Form 10-Q), irrespectively of any general incorporation language contained in such filing.

 

 
 

 

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