BUSINESS UPDATE
by ProGreen US | Sep 6, 2018
Business Update
The Company has received several questions from its shareholders about corporate operations and projects. Below, we offer these questions with Company responses.
This Company Blog post might contain information, which may constitute ‘forward-looking statements’ within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995. ‘Forward-looking statements’ are based upon expectations, estimates and projections at the time the statements are made that involve a number of risks, uncertainties and other factors that could cause actual results or events to differ materially from those anticipated.
Any forward-looking information provided in this post should be considered with these factors in mind. We assume no obligation to update any forward-looking statements contained below.
The following questions from shareholders are paraphrased.
INVESTOR QUESTION:
What is the status of the bridge financing?
Reply from ProGreen:
As communicated in Form-8K disclosures filed this week, we terminated our commitment with GCP Fund (GCP), and we engaged CMN Funding (CMN) for a similar bridge loan, only slightly larger.
Of the potential lenders with which we discussed the bridge financing transaction in May, we selected GCP partly due to the firm’s purported abilities as an experienced, international hard money lender and its representation that it would to be able to close the deal in reasonably short time – as per the original commitment to close prior to July 15. With the passing of the original closing deadline, we (grudgingly) elected to allow more time for GCP to follow through toward closing the loan deal. Separately, we began looking more carefully at our alternatives.
We became increasingly concerned about further delays with each passing week and, at the end, we did not believe in the viability of this lender funding. We decided that it was in the Company’s best interest to terminate the agreement so that we could pursue an alternative funding arrangement. We requested a current LOI and term sheet from CMN with revisions that we had negotiated over the past month, and then issued the termination letter to GCP.
INVESTOR QUESTION:
What can you tell us about the status of the notes and conversions?
Reply from ProGreen:
As of the date of this filing, there have been partial conversions of the Auctus and Tangiers notes, with the first Power Up note converted in its entirety, and two-thirds of the second Power Up note converted. We have a verbal extension of the BlueHawk note, and there have been no conversions to date.
We are continuously weighing any options we may have for taking out convertible notes against our near-term needs for operating cash, as we have begun to see significant cash flow from deliveries to Huy Fong.
As previously stated, we are working with the companies that have provided us financing in order to avoid or minimize note conversions until we have secured the bridge loan, at which time, as the first priority, we plan to pay off the balance of any notes with partial conversions, if possible, as well as all other notes that are due. While we can provide no assurances, we are in regular communication with these companies as we continue in this effort.
We’ve updated the share structure on the Investors page of the website. Approximately 50M shares have been issued per the note conversions discussed here, accounting for all shares issued since the May 29, 2018 update of the web page. There were 464.37M and 413.94M shares of common stock issued and outstanding as of September 5, 2018 and May 29,2018 respectively.
INVESTOR QUESTION:
Why did we buy the new 2,500 acres land recently, rather than at a later time?
Reply from ProGreen:
We have been on the sideline ready to buy this land for the past year, as it is ideal for expansion of the farming operation. There has been a recent development where a vote of the ejido owners finally succeeded, paving the way to obtain title to the land. The owner of this parcel needed some quick money, and we saw this as a very good opportunity to purchase the land at a very good price. The alternative was to lose the land to others that are now offering 5 times what we paid, for nearby land parcels that are, in fact, not very good at all for farming.
Just a short walk from the existing Arenoso farm, this land provides an incredible opportunity to expand for large-scale production, with over 1,000 acres expected to be farmable. But we also see this land supporting sustainable living within Cielo Mar and the local region, through farm and ranch operations for cattle, dairy, poultry, pork, and a variety of fresh produce for local consumption.
INVESTOR QUESTION:
How is the farm doing this year? Are we on target for meeting expectations?
Reply from ProGreen:
There are approximately 100 acres being farmed this year, some of which have been planted more dense than before. The plants are healthy and producing very good peppers. All is going as expected, if not better, and we have now delivered 22 truckloads to Huy Fong, which is approximately 420 tons of red jalapeno peppers.
INVESTOR QUESTION:
A July press release stated that the Phase I Execution Plan for Cielo Mar was going to be presented to authorities. Did that ever happen? What is the current status?
Reply from ProGreen:
Yes, the Cielo Mar Phase I Execution Plan was presented to the authorities, and we are still on track for being able to break ground this year.
The presentation of the plan to the authorities was a major milestone for the Cielo Mar development. When approved, the land will be changed from “rustic” to “development” land, and work on the infrastructure can begin within weeks.
by ProGreen US | Sep 6, 2018
Business Update
The Company has received several questions from its shareholders about corporate operations and projects. Below, we offer these questions with Company responses.
This Company Blog post might contain information, which may constitute ‘forward-looking statements’ within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995. ‘Forward-looking statements’ are based upon expectations, estimates and projections at the time the statements are made that involve a number of risks, uncertainties and other factors that could cause actual results or events to differ materially from those anticipated.
Any forward-looking information provided in this post should be considered with these factors in mind. We assume no obligation to update any forward-looking statements contained below.
The following questions from shareholders are paraphrased.
INVESTOR QUESTION:
What is the status of the bridge financing?
Reply from ProGreen:
As communicated in Form-8K disclosures filed this week, we terminated our commitment with GCP Fund (GCP), and we engaged CMN Funding (CMN) for a similar bridge loan, only slightly larger.
Of the potential lenders with which we discussed the bridge financing transaction in May, we selected GCP partly due to the firm’s purported abilities as an experienced, international hard money lender and its representation that it would to be able to close the deal in reasonably short time – as per the original commitment to close prior to July 15. With the passing of the original closing deadline, we (grudgingly) elected to allow more time for GCP to follow through toward closing the loan deal. Separately, we began looking more carefully at our alternatives.
We became increasingly concerned about further delays with each passing week and, at the end, we did not believe in the viability of this lender funding. We decided that it was in the Company’s best interest to terminate the agreement so that we could pursue an alternative funding arrangement. We requested a current LOI and term sheet from CMN with revisions that we had negotiated over the past month, and then issued the termination letter to GCP.
INVESTOR QUESTION:
What can you tell us about the status of the notes and conversions?
Reply from ProGreen:
As of the date of this filing, there have been partial conversions of the Auctus and Tangiers notes, with the first Power Up note converted in its entirety, and two-thirds of the second Power Up note converted. We have a verbal extension of the BlueHawk note, and there have been no conversions to date.
We are continuously weighing any options we may have for taking out convertible notes against our near-term needs for operating cash, as we have begun to see significant cash flow from deliveries to Huy Fong.
As previously stated, we are working with the companies that have provided us financing in order to avoid or minimize note conversions until we have secured the bridge loan, at which time, as the first priority, we plan to pay off the balance of any notes with partial conversions, if possible, as well as all other notes that are due. While we can provide no assurances, we are in regular communication with these companies as we continue in this effort.
We’ve updated the share structure on the Investors page of the website. Approximately 50M shares have been issued per the note conversions discussed here, accounting for all shares issued since the May 29, 2018 update of the web page. There were 464.37M and 413.94M shares of common stock issued and outstanding as of September 5, 2018 and May 29,2018 respectively.
INVESTOR QUESTION:
Why did we buy the new 2,500 acres land recently, rather than at a later time?
Reply from ProGreen:
We have been on the sideline ready to buy this land for the past year, as it is ideal for expansion of the farming operation. There has been a recent development where a vote of the ejido owners finally succeeded, paving the way to obtain title to the land. The owner of this parcel needed some quick money, and we saw this as a very good opportunity to purchase the land at a very good price. The alternative was to lose the land to others that are now offering 5 times what we paid, for nearby land parcels that are, in fact, not very good at all for farming.
Just a short walk from the existing Arenoso farm, this land provides an incredible opportunity to expand for large-scale production, with over 1,000 acres expected to be farmable. But we also see this land supporting sustainable living within Cielo Mar and the local region, through farm and ranch operations for cattle, dairy, poultry, pork, and a variety of fresh produce for local consumption.
INVESTOR QUESTION:
How is the farm doing this year? Are we on target for meeting expectations?
Reply from ProGreen:
There are approximately 100 acres being farmed this year, some of which have been planted more dense than before. The plants are healthy and producing very good peppers. All is going as expected, if not better, and we have now delivered 22 truckloads to Huy Fong, which is approximately 420 tons of red jalapeno peppers.
INVESTOR QUESTION:
A July press release stated that the Phase I Execution Plan for Cielo Mar was going to be presented to authorities. Did that ever happen? What is the current status?
Reply from ProGreen:
Yes, the Cielo Mar Phase I Execution Plan was presented to the authorities, and we are still on track for being able to break ground this year.
The presentation of the plan to the authorities was a major milestone for the Cielo Mar development. When approved, the land will be changed from “rustic” to “development” land, and work on the infrastructure can begin within weeks.
