PROGREEN US, INC. (OTCMKTS:PGUS) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive Agreement
EMA Financial LLC Convertible Note
Effective on April 27, 2017, the Company issued a convertible
note, in the principal amount of $113,000, bearing interest at
the rate of 10% per annum (the Convertible Note) to EMA
Financial, LLC (the Holder) to a Securities Purchase Agreement
dated as of April 3, 2017. The Convertible Note provides the
Holder the right, at any time after 180 days from the Closing
Date of this Note, to convert the outstanding balance (including
accrued and unpaid interest) of such Convertible Note into shares
of the Companys common stock at a price (Conversion Price) for
each share of common stock equal to the lower of: (i) the closing
sale price of the Common Stock on the Principal Market on the
Trading Day immediately preceding the Closing Date, and (ii) 55%
of either the lowest sale price for the Common Stock on the
Principal Market during the fifteen (15) consecutive Trading Days
immediately preceding the Conversion Date or the closing bid
price, whichever is lower, provided, however, if the
Companys share price at any time loses the bid (ex: 0.0001 on the
ask with zero market makers on the bid on level 2), then the
Conversion Price may, in the Holders sole and absolute
discretion, be reduced to a fixed conversion price of 0.00001 (if
lower than the conversion price otherwise), and
provided, that if on the date of delivery of the Conversion
Shares to the Holder, or any date thereafter while Conversion
Shares are held by the Holder, the closing bid price per share of
Common Stock on the Principal Market on the Trading Day on which
the Common Shares are traded is less than the sale price per
share of Common Stock on the Principal Market on the Trading Day
used to calculate the Conversion Price hereunder, then such
Conversion Price shall be automatically reduced such that the
Conversion Price shall be recalculated using the new low closing
bid price (Adjusted Conversion Price) and shall replace the
Conversion Price above, and Holder shall be issued a number of
additional shares such that the aggregate number of shares Holder
receives is based upon the Adjusted Conversion Price. The
Convertible Note is payable, along with interest thereon, on
April 3, 2018.
In the event any principal or interest is not timely paid or
another Event of Default, the Convertible Note is immediately due
and payable, without presentment, demand, protest or (further)
notice of any kind (other than notice of acceleration), and
interest shall accrue at a default interest rate of 24% per annum
or, if such rate is usurious or not permitted by current law,
then at the highest rate of interest permitted by law. The Holder
is prohibited from converting the Convertible Note into shares of
the Companys common stock to the extent that such conversion
would result in the Holder beneficially owning more than 9.99% of
the Companys common stock.
During the first six months in which the Convertible Note is
outstanding, the Company may redeem the Convertible Note as
follows: (i) if the redemption is within the first 90 days, then
for an amount equal to 120% of the unpaid principal amount of the
Convertible Note along with any interest that has accrued during
that period, and (ii) after the 90th day, but prior to
the 180th, then for an amount equal to 125% of the
unpaid principal amount of the Convertible Note along with any
accrued interest. After six months have elapsed from the closing
date the Convertible Note cannot be prepaid.
The Convertible Note provides for customary events of default
such as failing to timely make payments under the Convertible
Note when due, unsatisfied judgments against the Company, failure
to issue conversion shares in a timely manner and failure of the
Company to file annual and quarterly reports with the Securities
and Exchange Commission. Upon the occurrence of an event of
default, as described in the Convertible Note, the Holder is
entitled to enforce any and all of its rights and remedies
provided in the Convertible Note or any other rights or remedies
afforded by law to collect the default amount, calculated as 150%
(or 200% if the default relates to delivery of conversion shares)
of the Default Amount as defined, or if the Default Amount is not
paid within five business days, to require the Company to
immediately issue, in lieu of the Default Amount, the number of
shares of Common Stock of the Company equal to the Default Amount
divided by the Conversion Price then in effect.
The foregoing descriptions of the SECURITY PURCHASE AGREEMENT AND
Convertible Note do not purport to be complete and are qualified
in their entirety by reference to the FORMS OF SECURITY PURCHASE
AGREEMENTS AND Convertible Note, which are filed as Exhibits 10.4
and 10.47 to this Current Report on Form 8-K and are incorporated
herein by reference. DEFINED TERMS USED IN THE DESCRIPTIONS IN
THIS CURRENT REPORT SHALL HAVE THE MEANINGS PROVIDED IN THE
RESPECTIVE EQUITY PURCHSE AGREEMENT AND CONVERTIBLE NOTE, UNLESS
SPECIFICALLY DEFINED ABOVE IN THIS REPORT.
Item 2.03Creation 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 Companys last report filed under this item.
| Date | Title and Amount(1) | Purchaser | Principal Underwriter | Total Offering Price/ Underwriting Discounts | ||||||
| April 27, 2017 |
Convertible Promissory Note in the principal amount of $113,000, issued to EMA Financial, LLC |
Private Investor | NA | $ | 113,000/NA | |||||
| (1) |
The issuances 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.
| Exhibit Number | Description of Exhibit | |
| 10.46 | Convertible Note issued April 27, 2017 to EMA Financial, LLC. | |
| 10.47 |
Securities Purchase Agreement, dated April 3, 2017, between the Company and EMA Financial, LLC. |
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. PROGREEN US, INC. (OTCMKTS:PGUS) Recent Trading Information
PROGREEN US, INC. (OTCMKTS:PGUS) closed its last trading session up +0.0007 at 0.0207 with 353,302 shares trading hands.
