PROGREEN US, INC. (OTCMKTS:PGUS) Files An 8-K Entry into a Material Definitive AgreementItem 1.01. Entry into a Material Definitive Agreement.
Convertible Note issued to Tangiers Global, LLC
The Company has closed a financing on May 24, 2018, (the “Effective Date”) in which it issued a 12% Fixed Convertible Promissory Note dated May 22, 2018 (the “Note”) in the original principal amount of $105,000 due November 22, 2018 to Tangiers Global, LLC (sometimes referred to as “Tangiers” or the “Holder”). The amount of $5,000 was retained by the Holder through an original issue discount for due diligence and legal bills related to this transaction, and the Company received net proceeds of $100,000. In the Event of Default under this Note, the outstanding principal amount of the Note shall become, at the Holder’s election, immediately due and payable. The principal will increase by 35% of the outstanding principal amount of the Note. In addition to the “guaranteed” interest referenced above, in event of occurrence of an Event of Default, additional interest would accrue from the date of the Event of Default at the rate equal to the lower of 22% per annum or the highest rate permitted by law.
The Note provides for customary events of default such as failing to timely make payments under the Note when due, unsatisfied judgments against the Company, failure to issue conversion shares in a timely manner, “chilled status” imposed by The Depository Trust Corporation or a trading suspension issued by the United States Securities and Exchange Commission, failure of the Company to comply with the periodic reporting requirements of the Exchange Act, including xbrl filings, or otherwise, so that the Company’s common stock ceases to remain eligible for sales made in reliance on Rule !44 under the Securities Act.
The Note is convertible at any time at a conversion price equal to 55% of the lowest trading price of the Company’s common stock during the 15 consecutive Trading Days prior to the date on which Holder elects to convert all or part of the Note.
This Note may be prepaid by the Company in accordance with the following schedule:
| Days Since Effective Date | Prepayment Amount |
| Under 90 | 115% of Principal Amount |
| 91 to 120 | 120% of Principal Amount |
| 121 to 180 | 125% of Principal Amount |
The Company agreed that it will not enter into a convertible debt financing transaction with any party other than the Holder for a period of 20 Trading Days following the Effective Date. The Company agreed that this was a material term of this Note and any breach of this provision will result in a default under the Note.
The Company also agreed to provisions of the Note granting the Holder “piggyback” registration rights for new registration statements filed by the Company, rights of refusal with respect to certain types of financings, as well as a “most favored nation” type of provision with regard to future convertible debt financings by the Company.
The foregoing description of the Convertible Note DOES not purport to be complete and IS qualified in ITS entirety by reference to the FORM OF SUCH PROMISSORY NOTE filed as AN Exhibit to this Current Report on Form 8-K IS are incorporated herein by reference. DEFINED TERMS USED IN THE DESCRIPTION of the Note IN THIS CURRENT REPORT SHALL HAVE THE MEANING PROVIDED IN THE NOTE, UNLESS SPECIFICALLY DEFINED ABOVE IN THIS REPORT.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
The information set forth under Item 1.01of this Current Report on Form 8-K is incorporated by reference herein.
Item 3.02. Unregistered Sale of Equity Securities.
The following table sets forth the sales of unregistered securities since the Company’s last report filed under this item.
| Date | Title and Amount(1) |
Principal Purchaser |
Underwriter |
Total Offering Price/ Underwriting Discounts |
| May 24, 2018 | 2,117,747 shares of Common Stock. | Tangiers Global, LLC | NA | $50,000/NA |
| May 22, 2018 | Convertible Promissory Note in the principal amount of $105,000 issued to Tangiers Global, LLC. | Private Investor | NA | $236,085/NA |
(1) The issuances of securities to lenders and investors are viewed by the Company as exempt from registration under the Securities Act of 1933, as amended (“Securities Act”), alternatively, as transactions either not involving any public offering, or as exempt under the provisions of Regulation D promulgated by the SEC under the Securities Act.
Item 9.01 Financial Statements and Exhibits.
Progreen US, Inc. Exhibit…To view the full exhibit click here
About PROGREEN US, INC. (OTCMKTS:PGUS)
ProGreen US, Inc. (ProGreen), formerly ProGreen Properties, Inc., owns and manages residential real estate rental property in the Oakland County, Michigan area. The Company is engaged in acquiring, refurbishing and upgrading residential real estate. The Company purchases residential real estate apartment homes, condominiums and houses in the State of Michigan. The Company is focusing its investments and interest in agricultural land in Baja California, Mexico. The Company’s investment properties are marketed by ProGreen Realty LLC, a subsidiary of ProGreen and managed by its subsidiary, Progreen Properties Management LLC. In addition, the Company’s subsidiary, ProGreen Construction LLC, performs various construction and development services for properties, which are held and under development. As of April 30, 2016, the Company owned 14 properties.
