PROGREEN US, INC. (OTCMKTS:PGUS) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive Agreement
Silo Equity Partners Venture Fund LLC Convertible
Note
Effective on March 30, 2017, the Company closed the issuance of a
convertible note, in the principal amount of $100,000, bearing
interest at the rate of 8% per annum (the Convertible Note) to
Silo Equity Partners Venture Fund LLC (the Holder), to a
Securities Purchase Agreement dated March 22, 2017. The
Convertible Note provides the Holder the right, at any time after
180 days from the Issue Date of this Note, to convert the
outstanding balance (including accrued and unpaid interest) of
the 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) 50% of the lowest sale price for the
Common Stock on the Principal Market during the fifteen (15)
consecutive Trading Days immediately preceding the Conversion
Date; provided, however, if the Companys share price at
any time loses the bid, 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 September 22, 2017.
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 60 days, then
for an amount equal to 130% of the unpaid principal amount of the
Convertible Note along with any interest that has accrued during
that period, and (ii) after the 60th day, but prior to
the 120th, then for an amount equal to 120% of the
unpaid principal amount of the Convertible Note along with any
accrued interest. After 120 days have elapsed from the issuance
date the Company an amount equal to 125% of the unpaid principal
amount of the Convertible Note along with any interest.
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
AGREEMENT AND Convertible Note, which are filed as Exhibits 10.44
and 10.45 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 RESPECTIVE MEANINGS PROVIDED
IN THE SECURITIES PURCHSE AGREEMENT AND CONVERTIBLE 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 Companys last report filed under this item.
| Date | Title and Amount(1) | Purchaser | Principal Underwriter | Total Offering Price/Underwriting Discounts | |||||||
| March 30, 2017 |
Convertible Promissory Note, in the principal amount of $100,000, issued to Silo Equity Partners Venture Fund LLC |
Private Investor | NA | $ | 100,000/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 | |
| 10.44 |
Convertible Note issued to Silo Equity Partners Venture Fund, LLC. |
|
| 10.45 |
Securities Purchase Agreement, dated March 22, 2017, between the Company and Silo Equity Partners Venture Fund, 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 +0.0001 at 0.0248 with 706,296 shares trading hands.
