DELAWARE
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59-3087128
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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380 North Old Woodward Ave., Suite 300, Birmingham, MI
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48009
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(Address of Principal Executive Offices)
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(Zip Code)
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Large accelerated filer
o
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Accelerated filer
o
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Non-accelerated filer
o
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Smaller reporting company
x
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Page
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Part I. Financial Information
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1
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Item 1. Financial Statements
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2
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Condensed Consolidated Balance Sheets as of January 31, 2012 (unaudited) and as of April 30, 2011
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2
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Condensed Consolidated Statements of Operations for the Three and Nine Months Ended January 31, 2012 and 2011 (unaudited)
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3
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Condensed Consolidated Statements of Stockholders’ Equity (unaudited)
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4
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Condensed Consolidated Statements of Cash Flows for the Nine Months Ended January 31, 2012 and 2011 (unaudited)
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5
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Notes to Unaudited Condensed Consolidated Financial Statements
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6
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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.
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12
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Item 3. Quantitative and Qualitative Disclosures about Market Risk
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15
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Item 4T. Controls and Procedures
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15
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Part II. Other Information
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15
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Item 6. Exhibits
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15
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Signatures
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January 31,
2012
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April 30,
2011
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||||
ASSETS
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(Unaudited)
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Rental property, net accumulated depreciation of $15,565 and $5,801
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$
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399,028
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$
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307,653
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Properties under development
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175,688
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Cash
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33,965
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157,707
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Note receivable
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75,745
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76,157
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Prepaid expenses
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8,273
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15,942
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Deposits
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5,000
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6,000
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Property and equipment:
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Equipment and furniture, net of accumulated depreciation of $5,251 and $1,193
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23,589
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27,647
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Total assets
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$
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545,600
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$
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766,794
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LIABILITIES AND STOCKHOLDERS' EQUITY
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||||||
Accounts payable and accrued expenses
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$
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38,484
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$
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41,448
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Accrued interest
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83,589
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32,548
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Deferred revenue
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1,300
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1,300
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Note payable
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15,536
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18,999
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Tenant deposits
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11,924
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9,262
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Convertible debenture payable to related party (net of unamortized
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||||||
discount of $18,963 and $43,706)
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481,037
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456,294
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Total liabilities
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631,870
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559,851
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Stockholders' equity
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||||||
Preferred stock, $.0001 par value, 10,000,000 shares authorized,
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||||||
no shares issued and outstanding
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-
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-
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Common stock, $.0001 par value, 250,000,000 authorized and
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104,329,703 outstanding at January 31, 2012 and April 30, 2011
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10,433
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10,393
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Common stock, $.0001 par value, 9,775,171
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||||||
subscribed not issued
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978
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978
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Additional paid-in capital
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3,004,526
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2,986,358
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Less: amount due from related party subscriber under subscription
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Agreement
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(120,861)
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(110,653)
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Accumulated deficit
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(2,981,346)
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(2,680,133)
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Total stockholders' equity
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(86,270)
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206,943
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Total liabilities and stockholders' equity
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$ 545,600
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$ |
766,794
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Three months ended
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Nine months ended
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January 31
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January 31
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|||||||||||||||
2012
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2011
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2012
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2011
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Revenues:
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||||||||||||||||
Condominium sale
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$ | - | $ | - | $ | 90,000 | $ | 85,000 | ||||||||
Rental revenue
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24,025 | 8,255 | 66,435 | 20,276 | ||||||||||||
Commissions revenue
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14,200 | - | 23,965 | 6,255 | ||||||||||||
Total Revenue
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$ | 38,225 | $ | 8,255 | $ | 180,400 | $ | 111,531 | ||||||||
Expenses:
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||||||||||||||||
Cost of condominium sale
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- | (6,798 | ) | 90,903 | 72,335 | |||||||||||
Rental property operating costs
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9,855 | 7,384 | 26,154 | 24,490 | ||||||||||||
Professional fees
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32,507 | 34,500 | 162,595 | 154,378 | ||||||||||||
General & administrative
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37,444 | 105,696 | 115,174 | 277,174 | ||||||||||||
Depreciation
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5,820 | 998 | 15,431 | 2,972 | ||||||||||||
Total operating expenses
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$ | 85,626 | $ | 141,780 | $ | 410,257 | $ | 531,349 | ||||||||
Operating loss
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(47,401 | ) | (133,525 | ) | (229,857 | ) | (419,818 | ) | ||||||||
Other expenses and income:
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Interest expense
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(19,323 | ) | (29,048 | ) | (76,490 | ) | (83,049 | ) | ||||||||
Interest income
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1,707 | 1,719 | 5,134 | 2,867 | ||||||||||||
Loss before income tax expense
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$ | (65,017 | ) | $ | (160,854 | ) | $ | (301,213 | ) | $ | (500,000 | ) | ||||
Deferred income tax expense
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- | - | - | - | ||||||||||||
Net Loss
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$ | (65,017 | ) | $ | (160,854 | ) | $ | (301,213 | ) | $ | (500,000 | ) | ||||
Net loss per share - basic
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$ | - | $ | - | $ | - | $ | (0.01 | ) | |||||||
Weighted Average Shares Outstanding - basic
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104,594,920 | 103,611,220 | 104,394,920 | 90,738,866 | ||||||||||||
Net loss per share - diluted
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$ | - | $ | - | $ | - | $ | - | ||||||||
Weighted Average shares outstanding - fully diluted
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114,104,874 | 113,386,391 | 114,081,686 | 112,509,872 |
Number of
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Amount Due
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|||||||||||||||||||||||||||
Shares
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Common
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Additional
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Under
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Net
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||||||||||||||||||||||||
Issued and
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Common
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Stock
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Paid In
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Subscription
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Accumulated
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Stockholders'
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||||||||||||||||||||||
Outstanding
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Stock
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Subscribed
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Capital
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Agreement
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Deficit
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Equity
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||||||||||||||||||||||
Balance at April 30, 2010
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24,898,677 | $ | 2,490 | $ | 8,700 | $ | 2,856,944 | (100,000 | ) | $ | (2,019,104 | ) | $ | 749,030 | ||||||||||||||
Stock issued under subscription agreement
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77,223,851 | 7,722 | (7,722 | ) | 1,442 | - | - | 1,442 | ||||||||||||||||||||
Stock issued under City Vac agreement
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1,000,000 | 100 | - | 49,900 | - | - | 50,000 | |||||||||||||||||||||
Stock issued for debenture interest
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807,175 | 81 | - | 67,419 | - | - | 67,500 | |||||||||||||||||||||
Stock due under subscription agreement
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- | - | - | 10,653 | (10,653 | ) | - | - | ||||||||||||||||||||
Net loss
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- | - | - | - | - | (661,029 | ) | (661,029 | ) | |||||||||||||||||||
Balance at April 30, 2011
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103,929,703 | $ | 10,393 | $ | 978 | $ | 2,986,358 | $ | (110,653 | ) | $ | (2,680,133 | ) | 206,943 | ||||||||||||||
Stock issued under LeadDog agreement
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400,000 | 40 | 7,960 | 8,000 | ||||||||||||||||||||||||
Amount due from
subscriber under
subscription agreement
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10,208 | (10,208 | ) | |||||||||||||||||||||||||
Net loss
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(301,213 | ) | (301,213 | ) | ||||||||||||||||||||||||
Balance at January 31, 2012
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104,329,703 | $ | 10,433 | $ | 978 | 3,004,526 | (120,861 | ) | $ | (2,981,346 | ) | $ | (86,270 | ) |
Nine months ended
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January 31,
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||||||||
2012
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2011
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|||||||
Operating activities
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Net loss
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$ | (301,213 | ) | $ | (500,000 | ) | ||
Adjustments to reconcile net loss to net cash provided by operating activities:
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Depreciation and amortization
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15,431 | 2,972 | ||||||
Loss on sale of condominium
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903 | - | ||||||
Amortization of discounts on debentures to related party
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24,743 | 32,008 | ||||||
Advertising expense
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Investor relations expense
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10,000 | 30,000 | ||||||
Commitment fee
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8,000 | - | ||||||
Changes in operating assets and liabilities:
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Receivable
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- | 1,375 | ||||||
Note receivable
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412 | 212 | ||||||
Prepaid expenses
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(2,332 | ) | 676 | |||||
Deposits
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1,000 | 42,350 | ||||||
Accounts payable and accrued expenses
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50,738 | 10,272 | ||||||
Net cash used in operating activities
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(192,318 | ) | (380,135 | ) | ||||
Investing activities
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Acquisition and development of properties
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(17,961 | ) | (446,680 | ) | ||||
Purchase of furniture and equipment
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- | (254 | ) | |||||
Proceeds from sale of condominium
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90,000 | - | ||||||
Cash provided by (used in) investing activities
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72,039 | (446,934 | ) | |||||
Financing activities
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Proceeds from common stock through subscription agreement with related party
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- | 808,752 | ||||||
Repayments of note payable
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(3,463 | ) | - | |||||
Net cash (used in) provided by financing activities
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(3,463 | ) | 808,752 | |||||
Net change in cash
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(123,742 | ) | (18,317 | ) | ||||
Cash at beginning of period
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157,707 | 216,669 | ||||||
Cash at end of period
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33,965 | $ | 198,352 | |||||
Supplemental information:
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Non-cash transaction: Issuance of stock as commitment fee
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$ | 8,000 | $ | - | ||||
Non-cash transaction: Issuance of stock in payment of debenture interest
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$ | - | $ | 67,500 | ||||
Non-cash transaction: Issuance of stock in payment of investor relation services
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$ | - | $ | 50,000 | ||||
Cash paid for interest
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$ | 706 | $ | - | ||||
Cash paid for income taxes
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$ | - | $ | - |
Lives
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Method
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Condominium
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27.5 years
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Straight line
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Furniture
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10 years
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Straight line
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Equipment
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5 years
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Straight line
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Vehicles
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5 years
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Straight line
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January 31,
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April 30,
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|||||||
2012
|
2011
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Condominiums – rental properties
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$ | 414,593 | $ | 313,454 | ||||
Less: accumulated depreciation
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(15,565 | ) | ( 5,801 | ) | ||||
Rental properties, net of accumulated depreciation
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$ | 399,028 | $ | 307,653 | ||||
Properties under development
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$ | 0 | $ | 175,688 |
January 31,
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April 30,
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|||||||
2012
|
2011
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|||||||
Vehicles
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$ | 22,350 | $ | 22,350 | ||||
Furniture
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3,563 | 3,563 | ||||||
Office equipment
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2,927 | 2,927 | ||||||
Total vehicles and equipment
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28,840 | 28,840 | ||||||
Less: accumulated depreciation
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(5,251 | ) | (1,193 | ) | ||||
Net carrying amount
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$ | 23,589 | $ | 27,647 |
Year ending
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Rental
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April 30,
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Amount
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2012
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$ |
93,400
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2013
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36,525
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2014
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-
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$ |
129,925
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Year ending
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Rental
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April 30,
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Amount
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2012
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$ |
7,127
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2013
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28,691
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2014
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28,714
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2015
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28,965
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2016
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12,069
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$ |
105,566
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Year ending
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Rental
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April 30,
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Amount
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2012
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$ |
4,050
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2013
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8,100
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2014
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-
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2015
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-
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2016
|
|
-
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$ |
12,150
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Nine months
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Nine months
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||||
ended
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ended
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January 31, 2012
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January 31, 2011
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Net loss
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$ (301,213)
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$ |
(500,000)
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Average number of common shares outstanding used to calculate basic loss per share
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104,394,920
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90,738,866
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Effect of dilutive subscribed shares
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9,686,766
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21,771,006
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Average number of common shares outstanding used to calculate diluted earnings per share
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114,081,686
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112,509,872
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10.9
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Amendment, dated February 8, 2012, to the Company’s 13.5% Secured Convertible Debenture, filed herewith.
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31
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Certification of Chief Executive Officer and Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.
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32
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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.
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PROGREEN PROPERTIES, INC.
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BY:
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/s/ Jan Telander
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Jan Telander
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President and Chief Executive Officer
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PROGREEN PROPERTIES, INC. | ||
By: /s/ Jan Telander | ||
Name: Jan Telander | ||
Title: President | ||
LENDER: RUPES FUTURA AB | ||
By: /s/ Henrik Sellmann | ||
Name: Henrik Sellmann | ||
Title: Managing Director |
a.
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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;
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b.
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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;
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c.
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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
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d.
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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
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a.
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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
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b.
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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;
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DATE: March 16, 2012
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/s/ Jan Telander
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Jan Telander, President, Chief Executive Officer
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and Principal Financial Officer
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/s/ Jan Telander
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Jan Telander, President, Chief Executive Officer
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||
and Principal Financial Officer
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