NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Financial Statement Presentation

The unaudited condensed consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X as promulgated by the Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all the information and footnotes required by U.S. GAAP for complete financial statements and they should be read in conjunction with the audited consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended April 30, 2017 (the “Annual Report”). The accompanying interim financial statements are unaudited; however, in the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The results of operations for the nine month period ended January 31, 2018, are not necessarily indicative of the results that may be expected for the year ending April 30, 2018.

Basis of Presentation

The Company’s significant accounting policies are summarized in Note 1 of the Annual Report. These accounting policies conform to U.S.GAAP and have been consistently applied in the preparation of the interim unaudited condensed consolidated financial statements. There were no significant changes to these accounting policies during the nine months ended January 31, 2018, and the Company does not expect the adoption, as applicable, of other recent accounting pronouncements will have a material impact on its financial statements.

Going Concern

The Company’s unaudited condensed consolidated financial statements for the period ended January 31, 2018, have been prepared on a going concern basis which contemplates the realization of assets and settlement of liabilities and commitments in the normal course of business. The Company will require additional funding to execute its future strategic business plan. Successful business operations and its transition to attaining profitability are dependent upon obtaining additional financing and achieving a level of revenue adequate to support its cost structure. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

The Company will continue to incur costs that are necessary for it to remain an active public company. In the current fiscal year, the Company used approximately $769,000 of cash to support its operations and such cash needs are expected to continue in the upcoming year. As of January 31, 2018, the Company has approximately $140,000 in cash.

Earnings (loss) per Share

Earnings per share is calculated in accordance with ASC Topic 260, Earnings Per Share. Basic earnings per share (“EPS”) is based on the weighted average number of common shares outstanding. Diluted EPS is based on the assumption that all dilutive convertible shares and stock warrants were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period.

In periods of losses from operations, basic and diluted income per share from operations are also the same, as ASC 260-10 requires the use of the denominator used in the calculation of loss per share from operations in all other calculations of earnings per share presented, despite the dilutive effect of potential common shares.

The potentially dilutive effects of 14,000,000 common shares and 7,940,000 warrants were not considered in the calculation of EPS as the effect would be anti-dilutive on January 31, 2018 and 2017.

PROGREEN US, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Based on the conversion prices in effect, the potentially dilutive effects of 0 and 28,760,557 due to convertible debt were not considered in the calculation of EPS as the effect would be anti-dilutive on January 31, 2018 and 2017, respectively.

Based on the conversion prices in effect, the potentially dilutive effects of 293,039,697 due to convertible preferred stock series A were not considered in the calculation of EPS as the effect would be anti-dilutive on January 31, 2018 and 2017.

Based on the conversion prices in effect, the potentially dilutive effects of 59,756,142 due to convertible preferred stock series B were not considered in the calculation of EPS as the effect would be anti-dilutive on January 31, 2018 and 2017.

Reclassifications

Certain amounts in previous periods have been reclassified to conform to fiscal year ending 2018 classifications.

Recent Accounting Pronouncements

In February 2016, the FASB issued ASU 2016-02, Leases, which will amend current lease accounting to require lessees to recognize (i) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis, and (ii) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. ASU 2016-02 does not significantly change lease accounting requirements applicable to lessors; however, certain changes were made to align, where necessary, lessor accounting with the lessee accounting model. This standard will be effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently reviewing the provisions of this ASU to determine if there will be any impact on our results of operations, cash flows or financial condition.

In April 2016, the FASB issued ASU 2016–10 Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing. The amendments in this Update do not change the core principle of the guidance in Topic 606. Rather, the amendments in this Update clarify the following two aspects of Topic 606: identifying performance obligations and the licensing implementation guidance, while retaining the related principles for those areas. Topic 606 includes implementation guidance on (a) contracts with customers to transfer goods and services in exchange for consideration and (b) determining whether an entity’s promise to grant a license provides a customer with either a right to use the entity’s intellectual property (which is satisfied at a point in time) or a right to access the entity’s intellectual property (which is satisfied over time). The amendments in this Update are intended render more detailed implementation guidance with the expectation to reduce the degree of judgment necessary to comply with Topic 606. The Company is currently reviewing the provisions of this ASU to determine if there will be any impact on our results of operations, cash flows or financial condition.

Management has considered all recent accounting pronouncements issued since and their potential effect on our financial statements. The Company’s management believes that these recent pronouncements will not have a material effect on the Company’s consolidated financial statements.

Note 2. Rental Properties and Property under Development

Rental properties totaled $239,403 and $732,023 as of January 31, 2018 and April 30, 2017, respectively. The Company owned three and ten rental properties as of January 31, 2018 and April 30, 2017, respectively. The Company held no properties under development as of January 31, 2018 and April 30, 2017

Depreciation expense for the Company’s rental properties for the nine month periods ended January 31, 2018 and 2017 totaled $13,407 and $22,841, respectively.

PROGREEN US, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 3. Land under Development and Liability under Land Contract-Related Party

The Company held land under development in the amount of $500,000 as of January 31, 2018 and April 30, 2017.

During the year ended April 30, 2017, the Company through its subsidiary Procon, purchased the first tract of land for residential real estate development. The purchased land was formerly owned by a relative of Contel’s majority shareholder.

Under the terms of the definitive purchase agreement, the Company has recorded land at cost in the amount of $500,000, paid $50,000 of the purchase price and recorded a secured liability under land contract for the balance due in the amount of $450,000 as of January 31, 2018 and April 30, 2017. No interest is due under the terms of the definitive purchase agreement. As of January 31, 2018 payments are due as follows:

Note 4. Accounts Receivable

Accounts receivable totaled $60,893 and $23,352 at January 31, 2018 and April 30, 2017, respectively and is comprised of amounts rent due from tenants in the amount of $45,845 and $12,245 at January 31, 2018 and April 30, 2017, respectively, other receivables in the amount of $1,800 and $0 at January 31, 2018 and April 30, 2017 respectively and Procon’s accounts receivable in the amount of $13,248 and $11,107 at January 31, 2018 and April 30, 2017, respectively.

During the year ended April 30, 2017, management determined the rent due from one tenant may not be collectible and an allowance for uncollectible accounts receivable was established in the amount of $7,395, resulting in net accounts receivable of $53,498 and $15,957 at January 31, 2018 and April 30, 2017, respectively. There was no bad debt expense recognized in the nine month periods ended January 31, 2018 and 2017.

Note 5. Notes Receivable - Land Contracts and Gain on Sale of Properties and Property under Development

On January 8, 2018 the Company sold one of its rental properties located at 7648 Woodview with a selling price of $83,000. The entire $83,000 was received in cash (net of costs totaled $75,995) in the nine months ended January 31, 2018 and the Company recognized a loss on the sale of this property in the amount of $15,868.

On December 12, 2017 the Company sold one of its rental properties located at 27971 Rollcrest Road with a selling price of $75,000. The entire $75,000 was received in cash (net of costs totaled $69,824) in the nine months ended January 31, 2018 and the Company recognized a gain on the sale of this property in the amount of $6,785

On December 8, 2017 the Company sold one of its rental properties located at 25825 Lahser Road with a selling price of $34,000. The entire $34,000 was received in cash (net of costs totaled $30,084) in the nine months ended January 31, 2018 and the Company recognized a loss on the sale of this property in the amount of $15,636.

On July 12, 2017 the Company sold one of its rental properties located at 20351 Lacrosse with a selling price of $126,000. The entire $126,000 was received in cash (net of costs totaled $113,617) in the nine months ended January 31, 2018 and the Company recognized a gain on the sale of this property in the amount of $30,339.

On June 16, 2017 the Company sold one of its rental properties located at 26005 Franklin Pointe-with a selling price of $92,000. The entire $92,000 was received in cash (net of costs totaled $82,597) in the nine months ended January 31, 2018 and the Company recognized a gain on the sale of this property in the amount of $9,566.

On May 23, 2017 the Company sold one of its rental properties located at 20210 Westover with a selling price of $45,000.

PROGREEN US, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The Company received a deposit of $5,000 and issued a secured Land Contract to the buyer, for the balance owed in the amount of $40,000, to be paid in monthly installments, including principal and interest, beginning August 1, 2017 through May 20, 2020. The Land Contract bears interest at 8% per annum. In the nine months ended January 31, 2018 the Company recognized a deferred gain on the sale of this property in the amount of $18,822 which is offset against the receivable balance on the face of balance sheet. The balance due under this Land Contract totaled $38,971 and $0 plus accrued interest in the amount of $18 and $0 as of January 31, 2018 and April 30, 2017, respectively. At January 31, 2018 and April 30 2017 the deferred profit on the sale of this property totaled $18,822 and $0 respectively.

On May 23, 2017 the Company sold one of its rental properties located at 2100 Westover with a selling price of $92,000. The Company received a deposit of $8,000 and issued a secured Land Contract to the buyer, for the balance owed in the amount of $84,000, to be paid in monthly installments, including principal and interest, beginning June 1, 2017 through May 10, 2020. The Land Contract bears interest at 9% per annum. In the nine months ended January 31, 2018 the Company recognized a deferred gain on the sale of this property in the amount of $33,779 which is offset against the receivable balance on the face of balance sheet. The balance due under this Land Contract totaled $84,000 and $0 plus accrued interest in the amount of $4,189 and $0 as of January 31, 2018 and April 30, 2017, respectively. At January 31, 2018 and April 30 2017 the deferred profit on the sale of this property totaled $33,779 and $0 respectively.

On June 25, 2016 the Company sold a second one of its rental properties located at 21421 Greenview Avenue with a selling price of $109,000. The Company received a deposit of $12,000 and issued a secured Land Contract to the buyer, for the balance owed in the amount of $97,000, to be paid in monthly installments, including principal and interest, beginning August 1, 2016 through June 30, 2019. The Land Contract bears interest at 9% per annum. In the nine months ended January 31, 2018 and 2017 the Company recognized a gain on the sale of this property in the amount of $0 and $96 which is offset against the receivable balance on the face of the balance sheet. The balance due under this Land Contract totaled $93,285 and $ 96,276 plus accrued interest in the amount of $2 and $1,567 as of January 31, 2018 and April 30, 2017, respectively. At January 31, 2018 and April 30 2017 the deferred profit on the sale of this property totaled $96 and $96, respectively.

On May 20, 2016 the Company sold one of its rental properties located at 23270 Helen Street, with a selling price of $119,000. The Company received a deposit of $10,000 and issued a secured Land Contract to the buyer, for the balance owed in the amount of $109,000 to be paid in monthly installments, including principal and interest, beginning June 1, 2016 through June 1, 2019. The Land Contract bears interest at 9% per annum. In the nine months ended January 31, 2018 and 2017 the Company recognized a deferred gain on the sale of this property in the amount of $0 and $41,507 which is offset against the receivable balance on the face of balance sheet. The balance due under this Land Contract totaled $107,842 and $108,280 plus accrued interest in the amount of $6,167 and $1,655 as of January 31, 2018 and April 30, 2017, respectively. At January 31, 2018 and April 30, 2017 the deferred profit on the sale of this property totaled $41,507 and $41,507, respectively.

During the year ended April 30, 2017, management determined the amounts due under the secured land contracts may not be collectible in full and an allowance for uncollectible accounts was established in the amount of $4,800 for the portion management determined may not be collectible based on payment history. Notes receivable - land contracts, net of allowance total $225,094 and $158,153 at January 31, 2018 and April 30, 2017, respectively. There was no bad debt expense recognized in the nine months ended January 31, 2018 and 2017.

Note 6. Note Receivable - Related Party

On February 11 2016, the Company signed a definitive agreement with Inmobiliaria Contel S.R.L.C.V. (“Contel”) to finance the first tract of land of approximately 300 acres which is being developed by Contel for agriculture use in Baja California, Mexico. The Company’s Chief Executive Officer has made personal investments in this project, and has a 49.5% minority partnership interest in Contel The Company and its Chief Executive Office have no management or governance authority. Contel’s manager is not required to consult with him on any management decisions in the conduct of Contel’s business.

During the nine months ended January 31, 2018 the Company contributed an additional $302,000 to and received repayments in the amount of $50,000, from Baja Joint Venture, which is accounted for as an investment. Note Receivable - Related Party totaled $942,500 and $690,500 as of January 31, 2018 and April 30, 2017, respectively.

Depreciation expense for the nine months ended January 31, 2018 and 2017 totaled $2,313 and $6,403, respectively.

Note 8. Reservation Deposits

In connection with Procon’s planned development of a residential community to be known as Cielo Mar (see Notes 1 and 3), located in Bahia de El Rosario, El Rosario, Baja California, Mexico (the “Development Project”); Procon has collected deposits (“Reservation Deposit”) from Depositors to reserve development lots until the first execution phase of the development and a Definitive Purchase Agreement is executed at which time the Depositor may proceed with the purchase which will result in the Reservation Deposit’s conversion to a purchase deposit. The Depositor may decide not to proceed with the purchase and the Reservation Deposit will be returned, unless waived in the Reservation Request, less 10% for administrative charges.

During the nine month period ended January 31, 2018, the Company’s subsidiary Procon has collected deposits (“Reservation Deposit”) in the amount of $24,209. Reservation deposits totaled $36,709 and $12,500 at January 31, 2018 and April 30, 2017, respectively.

Note 9. Notes Payable

On August 22, 2017 the Company entered into an unsecured promissory note payable with an unrelated party, borrowing $10,000. The note is an unsecured and is due July 19, 2018. The promissory note has a onetime interest charge of 15% (in the amount of $1,500) plus accrued interest of 5% per annum. The Company recorded interest expense in connection with the promissory note in the amount of $1,721 and $0 for the nine month periods ended January 31, 2018 and 2017, respectively. Accrued interest due under the promissory notes totaled $1,721 and $0 as of January 31, 2018 and April 30, 2017, respectively. The amount outstanding under the note payable totaled $10,000 and $0 at January 31, 2018 and April 30, 2017, respectively.

On August 22, 2017 the Company entered into an unsecured promissory note payable with an unrelated party, borrowing $9,000. The note is an unsecured and is due July 19, 2018. The promissory note has a onetime interest charge of 15% (in the amount of $1,350) plus accrued interest of 5% per annum. The Company recorded interest expense in connection with the promissory note in the amount of $1,548 and $0 for the nine month periods ended January 31, 2018 and 2017, respectively. Accrued interest due under the promissory notes totaled $1,548 and $0 as of January 31, 2018 and April 30, 2017, respectively. The amount outstanding under the note payable totaled $9,000 and $0 at January 31, 2018 and April 30, 2017, respectively.

On August 22, 2017 the Company entered into an unsecured promissory note payable with an unrelated party, borrowing $30,000. The note is an unsecured and is due July 19, 2018. The promissory bears interest of 5% per annum. The Company recorded interest expense in connection with the promissory note in the amount of $703 and $0 for the nine month periods ended January 31, 2018 and 2017, respectively. On January 24, 2018, the Company paid off the note payable in full in the amount of $30,000 plus the $703 of accrued interest. Accrued interest due under the promissory notes totaled $0 and $0 as of January 31, 2018 and April 30, 2017, respectively.

PROGREEN US, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The amount outstanding under the note payable was $0 at January 31, 2018 and April 30, 2017.

During the nine month period ended January 31, 2018 the Company paid in full the note payable due to AMREFA in amount of $200,000. The note was non-interest bearing. The note payable due to AMREFA had a balance outstanding of $0 and $ 200,000 as of January 31, 2018 and April 30, 2017.

The amount due under the secured Southfield debt had a balance outstanding of $14,512 and $14,106 as of January 31, 2018 and April 30, 2017, respectively. In connection with the Southfield debt, during the nine month periods ended January 31, 2018 and 2017, the Company capitalized interest expense of $406 and $0 a respectively. Accrued interest totaled $105 and $301 at January 31, 2018 and April 30, 2017, respectively. The accrued interest of $406 was rolled into principal.

Note 10. Notes Payable, Related Parties

Promissory Notes

Credit Line 4

During the nine months ended January 31, 2018, the Company’s President entered into an unsecured 5% Promissory Note (“Credit Line 4”) whereby the Company borrowed a total of $185,155 with interest at a rate of five (5%) percent per annum, which is payable on July 19, 2018. During the nine months ended January 31, 2018 the Company repaid $20,000 of Credit Line 4. Notes payable related parties includes the amount due under these notes, with a balance outstanding of $165,155 and $0 as of January 31, 2018 and April 30, 2017, respectively. The Company recorded interest expense in connection with these notes in the amount of $2,940 and $0 for the nine month periods ended January 31, 2018 and 2017, respectively. Accrued interest due under the Credit Line totaled $2,940 and $0 as of January 31, 2018 and April 30, 2017, respectively.

Credit Line 3

On July 19, 2017 the Company’s President entered into a one year unsecured 5% Promissory Note (“Credit Line 3”) whereby the Company may borrow up to $250,000 with interest at a rate of five (5%) percent per annum due on July 19, 2018. During the nine month period ended January 31, 2018 the Company borrowed $250,000 under Credit Line 3. Notes payable related parties includes the amount due under Credit Line 3 with a balance outstanding of $250,000 and $0 as of January 31, 2018 and April 30, 2017, respectively. The Company recorded interest expense in connection with Credit Line 3 in the amount of $7,107 and $0 for the nine month periods ended January 31, 2018 and 2017, respectively. Accrued interest due under the Credit Line totaled $7,107 and $0 as of January 31, 2018 and April 30, 2017, respectively.

Credit Line 2

During the nine month period ended January 31, 2018, the Company borrowed the remaining $45,000 under the unsecured Credit Line 2. As a result of the derivatives calculation an additional discount of $7,590 was recorded in the nine month period ended January 31, 2018. Notes payable related parties includes the amount due under Credit Line 2, with a balance outstanding of $250,000 and $205,000, less the unamortized discount of $3,921 and $43,058 as of January 31, 2018 and April 30, 2017, respectively.

Amortization of the related discounts totaled $46,727 and $0 for the nine month periods ended January 31, 2018 and 2017, respectively. The Company recorded interest expense in connection with Credit Line 2 in the amount of $8,337 and $0 for the nine month periods ended January 31, 2018 and 2017, respectively. Accrued interest due under the Credit Line totaled $9,918 and $1,581 as of January 31, 2018 and April 30, 2017, respectively.

PROGREEN US, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Credit Line 1

Notes payable related parties includes the amount due under the unsecured Credit Line 1 with a balance outstanding of $250,000 less the unamortized discount of $0 and $14,947 as of January 31, 2018 and April 30, 2017, respectively. Amortization of the related discount totaled $14,947 and $0 for the nine month periods ended January 31, 2018 and 2017, respectively. The Company recorded interest expense in connection with Credit Line 1 in the amount of $9,336 and $0 for the for the nine month periods ended January 31, 2018 and 2017, respectively. Accrued interest due under the Credit Line totaled $ 14,397 and $5,061 as of January 31, 2018 and April 30, 2017, respectively.

Warrants

In connection with Credit Line 1, the Company issued the President common stock purchase warrants. The number of warrant shares totals 2,500,000 as of January 31, 2018 and April 30, 2017. The warrants have a five year term. See Notes 12 and 13.

In connection with Credit Line 2, the Company issued the President common stock purchase warrants. The warrants entitle the President to purchase ten shares of common stock for each one ($1.00) dollar of total disbursements by the President to the Company, of up to 2,500,000 shares of common stock at an exercise price of $0.05. During the nine period ended January 31, 2018 the remaining 450,000 warrants were issued in three 150,000 increments between July 5, 2017 and July13, 2017, resulting in a total number of warrant shares of 2,500,000 and 2,050,000 as of January 31, 2018 and April 30, 2017. The warrants have a five year term. See Notes 12 and 13.

Note 11. Note Payable to Bank of Ann Arbor

The secured note payable had a balance outstanding of $170,266 and $450,258 as of January 31, 2018 and April 30, 2017, respectively and the Company recorded interest expense in connection with this note payable in the amount of $16,744 and $25,056 for the nine months ended January 31, 2018 and 2017, respectively. The change in the outstanding balance is attributable to payments of $280,267 and $275 accrued interest which was rolled into principal. Accrued interest due under the note payable totaled $934 and $1,953 as of January 31, 2018 and April 30, 2017, respectively.

Principal payment requirements on the notes payable to Bank of Bank Arbor are as follows:

Note 12. Fair Value Measurement

The Company utilizes the accounting guidance for fair value measurements and discloses for all financial assets and liabilities that are recognized or disclosed at fair value in the consolidated financial statements on a recurring basis during the reporting period.

PROGREEN US, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures , requires disclosure of the fair value of financial instruments held by the Company. FASB ASC Topic 825, Financial Instruments , defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The carrying amounts reported in the balance sheets for receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest.

The three levels of valuation hierarchy are defined as follows:

The Company held certain financial instruments that are measured at fair value on a recurring basis. These consisted of convertible debt totaling $0 and $105,000 at January 31, 2018 and April 30, 2017 respectively, with a derivative liability totaling $0 (including 13,000,000 stock warrants) and $361,742 (including 10,550,000 stock warrants) at January 31, 2018 and April 30, 2017, respectively, which are categorized as Level 3. The Company also determined that the True-Up feature of the valuation dates of the subscription agreements represents an embedded derivative since the True-Up feature represents a variable number of shares upon each valuation date (See Note 15). The derivative liability on True-Up feature totaled $570,608 and $0 at January 31, 2018 and April 30, 2017, respectively, which are categorized as Level 3.

The related gain (loss) on change in fair value of derivatives totaled $806,854 and ($24,298) for the nine month periods ended January 31, 2018 and 2017, respectively.

See Notes 10, 13, 14 and 15.

Note 13 - Derivative Liabilities

During the nine month period ended January 31, 2018 the Company identified conversion features embedded within its convertible debt. See Note 14. The Company determined that the conversion feature of the convertible notes represents an embedded derivative since the Notes are convertible into a variable number of shares upon conversion.

Accordingly, the Notes are not considered to be conventional debt and the embedded conversion feature must be bifurcated from the debt host and accounted for as a derivative liability. Since the convertible notes are not convertible until 180 days subsequent to the execution date (“conversion date”), only notes which were outstanding as of the conversion date were considered for valuation. In prior periods, it was determined that due to the conversion terms of the convertible debt along with the convertible debt reserve requirement, no common shares were available under the authorized common share limit. As such, convertible debt beyond the conversion date along with warrants were valued as a derivative.

As of January 31, 2018, there were no convertible debt which could convert into common stock. Also, as there are sufficient shares for conversion, the warrants were no longer considered derivative. Therefore, the derivative liability was released.

Under the terms of the Subscription Agreement (See Note 15) each Investor agrees to invest an amount for the purchase of shares in the Company, at a price per share equal to the average closing price of the Company’s common stock for the ten trading days prior to the date of closing (“Closing”) of the purchase by the Investor of the Shares (the “Purchase Price”), on the terms provided for herein. As of the date 180 days after the Closing (the “Initial Valuation Date”), if the Shares issued at the Closing, valued at a price per share equal to the average closing

PROGREEN US, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

price of the Company’s common stock for the ten trading days prior to the First Valuation Date (“First Valuation Date Price”) do not represent a minimum of 150% of the amount invested by the Investor at the Closing, the Company shall issue to the Investor within 10 business days additional shares of common stock equal to the shortfall in valuation (calculated using the First Valuation Day Price) at the Initial Valuation Date or, at the option of the Company, pay to the Investor within 10 business days the amount of such shortfall in cash.

As of the date 360 days after the Closing (the “Second Valuation Date”), if the Shares issued at the Closing, plus any additional shares of common stock issued to the Investor at the First Valuation Date, valued at a price per share equal to the average closing price of the Company’s common stock for the ten trading days prior to the Second Valuation Date (“Second Valuation Date Price”) do not represent a minimum of 200% of the amount invested by the Investor at the Closing, the Company shall issue to the Investor within 10 business days additional shares of common stock equal to the shortfall in valuation (calculated using the Second Valuation Date Price”) at the Second Valuation Date.

The Company determined that the True-Up feature of the valuation dates of the subscription agreements represents an embedded derivative since the True-Up feature represents a variable number of shares upon each valuation date.

The fair value of the embedded derivative liabilities on the subscription agreements were determined using the Black Scholes model with the assumptions in the table below.

The fair value of the Company’s derivative liabilities at January 31, 2018 is as follows:

The fair values at the commitment dates and remeasurement dates for the subscription agreements were treated as derivative liabilities are based upon the following estimates and assumptions made by management for the quarter ended January 31, 2018:

See Notes 10, 12, 14 and 15.

PROGREEN US, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 14. Financing Agreement and Convertible Debentures

BlueHawk Capital LLC Convertible Note

On November 24, 2017, the Company issued a 12% Convertible Promissory Note in the principal amount of $65,000 to BlueHawk Capital, LLC (“BlueHawk Convertible Note”). The Note is due August 20, 2018. The Holder has the right at any time during the period beginning on the date which is 180 days following the Issue Date of the Note, to convert all or any part of the outstanding and unpaid principal amount of this Note into fully paid and nonassessable shares of Common Stock. The conversion price is 55% of the lowest trading price for the common stock during the twenty trading day period ending on the latest complete trading day prior to the conversion date. The Company may prepay the amounts outstanding to the holder at any time up to the 180th day (the “Prepayment Date”) following the issue date of this note by making a payment to the note holder of an amount in cash equal i) if the redemption is prior to the 90th day this Note is in effect (including the 90th day), then for an amount equal to 115% of the unpaid principal and accrued interest of this Note; (ii) if the redemption is on the 91st day this Note is in effect, up to and including the 120th day this Note is in effect, then for an amount equal to 120% of the unpaid principal amount of this Note along with any accrued interest; (iii) if the redemption is on the 121st day this Note is in effect, up to and including the 180th day this Note is in effect, then for an amount equal to 125% of the unpaid principal amount of this Note along with any accrued interest. After the expiration of one hundred eighty (180) days following the date of the Note, the Company may not prepay the BlueHawk Convertible Note.

In connection with the BlueHawk Convertible Note the Company paid $5,000 in debt issuance costs which are being amortized to interest expense using the effective interest method. During the nine month periods ended January 31, 2018 and 2017, the Company recognized interest expense in the amount of $1,264 and $0, respectively, relating to the amortization of the debt issuance costs. The unamortized balance of debt issuance costs totaled $3,736 and $0 at January 31, 2018 and April 30, 2017, respectively.

The Company recorded interest expense in connection with the BlueHawk Convertible Note in the amount of $1,454 and $0 for the nine month periods ended January 31, 2018 and 2017, respectively. Accrued interest due under the Blue Hawk Convertible Note totaled $1,454 and $0 as of January 31, 2018 and April 30, 2017, respectively.

The principal balance of the BlueHawk Capital LLC Convertible Note was $65,000 and $0 at January 31, 2018 and April 30, 2017, respectively.

Auctus Fund LLC

On November 29, 2017, the Company issued a 12% Convertible Promissory Note, in the principal amount of $110,875 to Auctus Fund, LLC (“Auctus Convertible Note”). The Note is due August 29, 2018. The Holder has the right from time to time, at any time during the period beginning on the date which is six months following the Issue Date of the Note, to convert all or any part of the outstanding and unpaid principal amount of this Note into fully paid and nonassessable shares of Common Stock. The conversion price shall equal the lesser of (i) the lowest trading price during the previous twenty-five trading day period ending on the latest complete trading day prior to the date of the note and (ii) 55% of the lowest trading price for the common stock during the twenty-five trading day period ending on the latest complete trading day prior to the conversion date.

The Company may prepay the amounts outstanding to the holder at any time up to the 180th day (the “Prepayment Date”) following the issue date of this note by making a payment to the note holder of an amount in cash equal i) if the redemption is prior to the 90th day this Note is in effect (including the 90th day), then for an amount equal to 115% of the unpaid principal amount of this Note along with any interest that has accrued and unpaid during that period; (ii) if the redemption is on the 91st day this Note is in effect, up to and including the 180th day this Note is in effect, then for an amount equal to 125% of the unpaid principal amount of this Note along with any accrued and unpaid interest. After the expiration of one hundred eighty (180) days following the date of the Note, the Company may not prepay the Auctus Convertible Note.

PROGREEN US, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

In connection with the Auctus Convertible Note the Company paid $10,875 in debt issuance costs which are being amortized to interest expense using the effective interest method. During the nine month periods ended January 31, 2018 and 2017, the Company recognized interest expense in the amount of $2,510 and $0, respectively, relating to the amortization of the debt issuance costs. The unamortized balance of debt issuance costs totaled $8,365 and $0 at January 31, 2018 and April 30, 2017, respectively. The Company recorded interest expense in connection with the Auctus Convertible Note in the amount of $2,296 and $0 for the nine month periods ended January 31, 2018 and 2017, respectively. Accrued interest due under the Auctus Convertible Note totaled $2,296 and $0 as of January 31, 2018 and April 30, 2017, respectively.

The principal balance of the Auctus Convertible Note was $110,875 and $0 at January 31, 2018 and April 30, 2017, respectively.

Vista Capital Investments LLC Convertible Note

On May 3, 2017, the Company issued an unsecured 8% Fixed Rate Convertible Debenture in the principal amount of $110,000, with an Original Issue Discount of $10,000, to Vista Capital Investments LLC (“Vista Capital Convertible Note”). This convertible note is due and payable on November 29, 2017, plus interest on the unpaid principal balance at a rate of 8% per annum. The Holder shall have the right, in its sole and absolute discretion, as of the date which is one hundred and eighty days following the Closing Date (May 3, 2017), to convert all or any part of the outstanding amount due under this Note into fully paid and nonassessable shares of Common Stock. The conversion price shall equal $.035.

The Company may prepay the amounts outstanding to the holder at any time up to the 180th day (the “Prepayment Date”) following the issue date of this note by making a payment to the note holder of an amount in cash equal i) if the redemption is prior to the 90th day this Note is in effect (including the 90th day), then for an amount equal to 105% of the unpaid principal amount of this Note along with any interest that has accrued during that period; (ii) if the redemption is on the 91st day this Note is in effect, up to and including the 120th day this Note is in effect, then for an amount equal to 110% of the unpaid principal amount of this Note along with any accrued interest; (iii) if the redemption is on the 121st day this Note is in effect, up to and including the 150th day this Note is in effect, then for an amount equal to 115% of the unpaid principal amount of this Note along with any accrued interest, (iv) if the redemption is on the 151st day this Note is in effect, up to and including the 151th day this Note is in effect, then for an amount equal to 120% of the unpaid principal amount of this Note along with any accrued interest.

During the nine month periods ended January 31, 2018 and 2017, respectively the Company recognized interest expense in the amount of $10,000 and $0 relating to the amortization of the original issue discount. The unamortized

balance of original issue discount totaled $0 at January 31, 2018 and April 30, 2017. As a result of the derivatives calculation an additional discount of $33,722 relating to warrants granted, was recorded in the nine month period ended January 31, 2018. During the nine month periods ended January 31, 2018 and 2017 the Company recognized interest expense in the amount of $33,722 and $0 relating to the derivatives discount. The unamortized balance of the derivatives discount totaled $0 at January 31, 2018 and April 30, 2017.

The Company recorded interest expense in connection with the Vista Capital Convertible Note in the amount of $8,800 and $0, in the nine month periods ended January 31, 2018 and 2017, respectively. Accrued interest due under the Vista Capital Convertible Note totaled $0 as of January 31, 2018 and April 30, 2017, respectively.

On November 29, 2017, the Company paid $75,000 of the Vista Capital Convertible Note and the remaining balance due in the amount of $67,560 was paid on December 4, 2017. The Note was paid in full in the amount of $110,000 plus accrued interest in the amount of $8,800 and a prepayment premium of $23,760 which the Company recorded

as interest expense.

The principal balance of the Vista Capital Convertible Note was $0 at January 31, 2018 and April 30, 2017.

PROGREEN US, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

In connection with Vista Capital Convertible Note, the Company granted Vista Capital Investments LLC 2,000,000 Warrant Shares of the Company’s common stock, par value $0.0001 per share. The warrant entitles the holder to purchase up to 2,000,000 shares of common stock at an exercise price of $0.05. The warrant expires on May 3, 2022. See Notes 12 and 13.

JSJ Investments Inc.

On May 10, 2017, the Company issued an unsecured convertible promissory note in the principal amount of $113,000 to JSJ Investments Inc. (“JSJ Convertible Note”). This convertible note is due and payable on February 10, 2018 plus interest on the unpaid principal balance at a rate of 12% per annum. The Holder shall have the right, in its sole and absolute discretion, as of the date which is one hundred and eighty days following the Closing Date (On May 10, 2017), to convert all or any part of the outstanding amount due under this Note into fully paid and nonassessable shares of Common Stock.

The conversion price shall equal 52% discount to the lowest trading price during the previous fifteen trading days to the date of Conversion Notice.

The Company may pay JSJ Convertible Note in full, together with any and all accrued and unpaid interest, plus any applicable prepayment premium at any time on or prior to the date which occurs 180 days after the May 10, 2017 (the “Prepayment Date”). In the event the Note is not prepaid in full on or before the Prepayment Date, it shall be deemed a “Pre-Payment Default” hereunder. Until the Ninetieth (90th) day after the Issuance Date (May 10, 2017) the Company may pay the principal at a cash redemption premium of 120%, in addition to outstanding interest, without the Holder’s consent; from the 91st day to the Prepayment Date, the Company may pay the principal at a cash redemption premium of 125%, in addition to outstanding interest, without the Holder’s consent. After the Prepayment Date up to the Maturity Date this Note shall have a cash redemption premium of 135% of the then outstanding principal amount of the Note, plus accrued interest and Default Interest, if any, which may only be paid by the Company upon Holder’s prior written consent. At any time on or after the Maturity Date, the Company may repay the then outstanding principal plus accrued interest and Default Interest (as defined in the JSJ Convertible Note).

In connection with the JSJ Convertible Note the Company paid $7,000 in debt issuance costs which are being amortized to interest expense using the effective interest method. During the nine month periods ended January 31, 2018 and 2017, the Company recognized interest expense in the amount of $7,000 and $0, respectively, relating to the amortization of the debt issuance costs. The unamortized balance of debt issuance costs totaled $0 at January 31, 2018 and April 30, 2017, respectively. The Company recorded interest expense in connection with the JSJ Convertible Note in the amount of $6,992 and $0 for the nine month periods ended January 31, 2018 and 2017, respectively. Accrued interest due under the JSJ Convertible Note totaled $0 as of January 31, 2018 and April 30, 2017.

On November 10, 2017, the Company paid the JSJ Convertible Note in full in the amount of $113,000 plus accrued interest in the amount of $6,992 and a prepayment premium of $28,094 which the Company recorded as interest expense.

The principal balance of the JSJ Convertible Note was $0 at January 31, 2018 and April 30, 2017.

Power Up Lending Group Ltd - Convertible Note #1 & #2

On May 15, 2017, the Company issued a second unsecured convertible promissory note in the amount of principal amount of $46,500 to Power Up Lending Group Ltd (“Power Up Convertible Note # 2”). This convertible note is due and payable on February 15, 2018 plus interest on the unpaid principal balance at a rate of 12% per annum.

The Holder shall have the right from time to time, at any time during the period beginning on the date which is one hundred eighty (180) days following the date of the Note, to convert all or any part of the outstanding and unpaid principal amount of this Note into fully paid and nonassessable shares of Common Stock. The conversion price shall

equal 58% multiplied by the average of the lowest two (2) Trading Prices for the Common Stock during the fifteen (15) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date.

PROGREEN US, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The Company may prepay the amounts outstanding to the holder at any time up to the 180th day (the “Prepayment Date”) following the issue date of this note by making a payment to the note holder of an amount in cash equal to 120% (for the first 150 days) and to 125% (between 151 -180 days). After 180 days from the Effective Date this Note may not be prepaid.

In connection with the Power Up Unsecured Convertible Note 2 paid $1,500 in debt issuance costs which are being amortized to interest expense using the effective interest method. During the nine month periods ended January 31, 2018 and 2017, the Company recognized interest expense in the amount of $1,500 and $0, respectively, relating to the amortization of the debt issuance costs. The unamortized balance of debt issuance costs totaled $0 at January 31, 2018 and April 30, 2017. The Company recorded interest expense in connection with the Power Up Convertible

Note # 2 in the amount of $2,816 and $0 for nine month periods ended January 31, 2018 and 2017, respectively. Accrued interest due under Power Up Convertible Note #2 totaled $0 as of January 31, 2018 and April 30, 2017.

On November 7, 2017, the Company paid the Power Up Convertible Note # 2 in full in the amount of $46,500 plus accrued interest in the amount of $2,816 and a prepayment premium of $12,172 which the Company recorded as interest expense. The principal balance of the Power Up Convertible Note # 2 was $0 at January 31, 2018 and April 30, 2017.

In connection with the Power Up Unsecured Convertible Note #1 (dated February 21, 2017) the Company paid $3,500 in debt issuance costs which are being amortized to interest expense using the effective interest method. During the nine month periods ended January 31, 2018 and 2017, the Company recognized interest expense in the amount of amount of $2,655 and $0 relating to the amortization of the debt issuance costs, respectively. The unamortized balance of debt issuance costs totaled $0 and $2,655 at January 31, 2018 and April 30, 2017.

As a result of the derivatives calculation an additional discount of $102,956 was recorded in the nine month period ended January 31, 2018. The unamortized balance of the discount totaled $0 at January 31, 2018 and April 30, 2017.

The total balance due was $122,135 comprised of principal of $103,500, interest of $6,370 and prepayment premium of $12,265. During the nine month period ended January 31, 2018 the Company repaid $61,989 of the amount due under Power Up Convertible Note 1 in cash and the remaining balance of $60,146 was converted to 8,534,554 shares of the Company’s Common Stock at fair value as follows:

See Note 16.

PROGREEN US, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

In connection with the prepayment of the debt, during the nine month period ended January 31, 2018 the Company recognized $12,265 in prepayment penalties which recorded as interest expense.

The balance of the convertible note was $0 and $103,500 at January 31, 2018 and April 30, 2017, respectively.

The Company recorded interest expense in connection with the Power Up Convertible Note 1 in the amount of $3,990 and $0 for the nine month periods ended January 31, 2018 and 2017, respectively. Accrued interest due under the Power Up Convertible Note totaled $0 and $2,380 as of January 31, 2018 and April 30, 2017, respectively.

Hoppel Convertible Note #2

On July 17, 2017 the Company entered into a Settlement Agreement with Mr. Luca Hoppel to settle all claims between them with respect to the unsecured Hoppel Convertible Note 2. The terms of the Settlement Agreement are as follows: In exchange for Mr. Hoppel’s settlement and release of the Settled Claims, the Company was required to make three equal cash payments of $44,940. The first cash payment was due on or before August 1st, 2017. The second cash payment was due on or before August 10th 2017 and the third and final cash payment was due on or before August 20th, 2017.

Upon the issuance of 926,000 shares and payment of $134,820, the Note would be considered fully repaid.

On July 17, 2017 the Company issued 926,000 shares of Common Stock at an issuance price of $0.0192 per Common Share, to Lucas Hopple under the terms of the Settlement Agreement for a total fair value of $17,779. See Note 16. The total balance of the note was $130,832 comprised of the principal of $105,000, interest of $7,350, penalty of $5,000 and prepayment premium of $13,482. During the nine month period ended January 31, 2018 the Company made the first two cash payments of $89,880 due under the Settlement Agreement. The Company recorded a total loss of $44,659 as a loss on the settlement of liabilities relating to this transaction, including $17,779 for the fair value of the 926,000 shares of common stock and $26,880 for increase of the principal balance.

The remaining balance of the note was satisfied through conversion of debt into common stock as follows

The outstanding Note balance totaled $0 and $57,739, net of the unamortized discount of $0 and $47,261 at January 31, 2018 and April 30, 2017, respectively. Amortization of the related discounts totaled $47,261 and $0 for nine month periods ended January 31, 2018 and 2017, respectively.

Accrued interest due totaled $0 and $7,350 at January 31, 2018 and April 30, 2017 respectively.

A total of $105,000 debt discount was recorded on Hoppel Convertible Note 2 including original issuance discount of $5,000, stock issuance discount of $12,408 and derivative discount of $87,592. See Notes 12 and 13.

The Company recorded interest expense in connection with the Hoppel convertible note of $2,940 and 0 for the nine month periods ended January 31, 2018 and 2017, respectively.

PROGREEN US, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

EMA Financial, LLC Convertible Note

On April 3, 2017, the Company issued an unsecured convertible promissory note in the principal amount of $113,000 to EMA Financial, LLC (“EMA Convertible Note”), including debt issuance costs of $6,800. This convertible note is due and payable on April 3, 2018 plus interest on the unpaid principal balance at a rate of 10% per annum.

During the nine month periods ended January 31, 2018 and 2017 the Company recognized interest expense in the amount of amount of $6,278 and $0 relating to the amortization of the original issuance discount in connection with the EMA Convertible Note. The unamortized balance of original issuance totaled $0 and $6,278 at January 31, 2018 and April 30, 2017, respectively. The Company recorded interest expense in connection with the EMA Convertible Note in the amount of $5,332 and $0 for the nine month periods ended January 31, 2018 and 2017, respectively. Accrued interest due under the EMA Convertible Note totaled $0 and $868 as of January 31, 2018 and April 30, 2017, respectively.

On October 19, 2017, the Company paid the EMA Convertible Note in full in the amount of $113,000 plus accrued interest in the amount of $6,200, resulting in prepayment penalties of $29,792 which the Company recorded as interest expense.

As a result of the derivative calculation an additional discount of $113,000 was recorded in the nine month period ended January 31, 2018. The unamortized balance of the discount totaled $0 at January 31, 2018 and April 30, 2017.

The principal balance of the EMA Convertible Note was $0 and $113,000 at January 31, 2018 and April 30, 2017, respectively.

Bellridge Capital, LP

On March 15, 2017, the Company issued an unsecured convertible promissory note in the amount of principal amount of $105,000 to Bellridge Capital, LP (“Bellridge Convertible Note”) including an OID of $5,000 This convertible note is due and payable on March 15, 2018 plus interest on the unpaid principal balance at a rate of 10% per annum.

During the nine month periods ended January 31, 2018 and 2017 the Company recognized interest expense in the amount of amount of $4,356 and $0 relating to the amortization of the original issuance discount in connection with the Bellridge Convertible Note. The unamortized balance of original issuance totaled $ 0 and $4,356 at January 31, 2018 and April 30, 2017, respectively. The Company recorded interest expense in connection with the Bellridge Convertible Note in the amount of $4,176 and $0 for the nine month periods ended January 31, 2018 and 2017, respectively. Accrued interest due under the Bellridge Convertible Note totaled $0 and $1,334 as of January 31, 2018 and April 30, 2017, respectively.

On September 12, 2017, the Company paid $105,000 of the Bellridge Convertible Note and the remaining balance due in the amount of $32,811 was paid on September 21, 2017. The Note was paid in full in the amount of $105,000 plus accrued interest in the amount of $5,510 and a prepayment premium of $27,301 which the Company recorded as interest expense. During the nine month periods ended January 31, 2018 and 2017, the Company recognized interest expense in the amount of amount of $5,894 and $0, respectively in connection with a derivatives loss.

The principal balance of the Bellridge Convertible Note was $0 and $105,000 at January 31, 2018 and April 30, 2017, respectively. As a result of the derivative calculation an additional discount of $102,854 was recorded in the nine month period ended January 31, 2018. The unamortized balance of the discount totaled $0 at January 31, 2018 and April 30, 2017.

PROGREEN US, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Silo Equity Partners Venture Fund LLC Convertible Note

On March 22, 2017, the Company issued an unsecured convertible promissory note in the amount of principal amount of $100,000 to Silo Equity Partners Venture Fund LLC (“Silo Convertible Note”). This convertible note was due and payable on September 22, 2017 plus interest on the unpaid principal balance at a rate of 8% per annum.

The Company recorded interest expense in connection with the Silo Convertible Note in the amount of $ 3,483 and $0 for the nine month periods ended January 31, 2018 and 2017, respectively. Accrued interest due under the Silo Convertible Note totaled $0 and $858 as of January 31, 2018 and April 30, 2017, respectively.

On September 22, 2017, the Company paid $30,000 of the Silo Convertible Note and the remaining balance due in the amount of $100,397 was paid on October 5 and 6, 2017. The Note was paid in full in the amount of $100,000 plus accrued interest in the amount of $4,341and a prepayment premium of $26,056 which the Company recorded as interest expense. As a result of the derivative calculation an additional discount of $100,000 was recorded in the nine month period ended January 31, 2018. The unamortized balance of the discount totaled $0 at January 31, 2018 and April 30, 2017.

The principal balance of the Silo Convertible Note was $0 and $100,000 at January 31, 2018 and April 30, 2017, respectively.

Tangiers Global, LLC Convertible Note

On March 21, 2017, the Company issued an unsecured convertible promissory note in the amount of principal amount of $105,000 to Tangiers Global, LLC (“Tangiers Convertible Note”) including an Original Issue Discount (“OID”) of $5,000. This convertible note is due and payable on September 21, 2018 plus interest on the unpaid principal balance at a rate of 7% per annum.

During the nine month periods ended January 31, 2018 and 2017 the Company recognized interest expense in the amount of amount of $4,634 and $0 relating to the amortization of the original issuance discount in connection with the Tangiers Convertible Note. The unamortized balance of original issuance totaled $0 and $4,634 at January 31, 2018 and April 30, 2017, respectively. The Company recorded interest expense in connection with the Tangiers Convertible Note in the amount of $6,523 and $0 for the nine month periods ended January 31, 2018 and 2017, respectively. Accrued interest due under the Tangiers Convertible Note totaled $0 and $827 as of January 31, 2018 and April 30, 2017, respectively. As a result of the derivative calculation an additional discount of $30,249 was recorded in the nine month period ended January 31, 2018. The unamortized balance of the discount totaled $0 at January 31, 2018 and April 30, 2017.

On October 19, 2017, the Company paid the Tangiers Convertible Note in full in the amount of $105,000 plus accrued interest in the amount of $7,350, prepayment premium of $28,088 which the Company recorded as interest expense.

The principal balance of the Tangiers Convertible Note was $0 and $105,000 at January 31, 2018 and April 30, 2017, respectively.

Tangiers Global, LLC Convertible Note 2

On October 17, 2017, the Company issued an unsecured convertible promissory note in the amount of principal amount of $306,804 to Tangiers Global, LLC (“Tangiers Convertible Note 2”) including an Original Issue Discount (“OID”) of $17,366. This convertible note is due and payable on July 13, 2018, plus interest on the unpaid principal balance at a rate of 12% per annum. Guaranteed interest totals $36,820.

The Company may pay Tangiers Convertible Note 2 in full, together with any and all accrued and unpaid interest, at any time on or prior to the date which occurs 180 days after the October 17, 2017 (the “Funding Date”). Under the Ninetieth (90th) day after the Funding Date the Company may pay the principal at a cash redemption premium of

PROGREEN US, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

115%, in addition to outstanding interest, without the Holder’s consent; from the 90th day to the 150th day, the Company may pay the principal at a cash redemption premium of 120%, in addition to outstanding interest, without the Holder’s consent and from the 151st day to the 180th day, the Company may pay the principal at a cash redemption premium of 125%, in addition to outstanding interest, without the Holder’s consent.

The Holder shall have the right from time to time, at any time during the period beginning on the date which is one hundred eighty (180) days following the date of the Tangiers Convertible Note 2 to convert all or any part of the outstanding and unpaid principal amount of this Note into fully paid and non-assessable shares of Common Stock. The conversion price shall equal 55% multiplied by the lowest Trading Price for the Common Stock during the fifteen (15) Trading Days prior to the date on which the holder elects to convert all or part of the Tangiers Convertible Note 2.

During the nine month periods ended January 31, 2018 and 20176 the Company recognized interest expense in the amount of amount of $6,845 and $0 relating to the amortization of the original issuance discount in connection with the Tangiers Convertible Note. The unamortized balance of original issuance totaled $10,521 and $0 at January 31, 2018 and April 30, 2017, respectively. The Company recorded interest expense in connection with the Tangiers Convertible Note in the amount of $14,509 and $0 for the nine month periods ended January 31, 2018 and 2017, respectively. Accrued interest due under the Tangiers Convertible Note totaled $14,509 and $0 as of January 31, 2018 and April 30, 2017, respectively.

The principal balance of the convertible promissory note was $306,804 and $0 at January 31, 2018 and April 30, 2017, respectively.

Power Up Lending Group Ltd - Convertible Notes #3, #4 and #5

Note # 3

On August 25, 2017, the Company issued a third unsecured convertible promissory note in the principal amount of $78,000 to Power Up Lending Group Ltd (“Power Up Convertible Note #3”), including debt issuance costs of $3,000. This convertible note is due and payable on May 30, 2018 plus interest on the unpaid principal balance at a rate of 12% per annum.

The Company may pay Power Up Convertible Note #3 in full, together with any and all accrued and unpaid interest, at any time on or prior to the date which occurs 180 days after the August 25, 2017 (the “Issue Date”). From Issue Date through One hundred and fifty days (150th) day after the Issue Date the Company may pay the principal at a cash redemption premium of 125%, in addition to outstanding interest, without the Holder’s consent and from the 151st day to the 180th day, the Company may pay the principal at a cash redemption premium of 130%, in addition to outstanding interest, without the Holder’s consent.

The Holder shall have the right from time to time, at any time during the period beginning on the date which is one hundred eighty (180) days following the date of the Note, to convert all or any part of the outstanding and unpaid principal amount of this Note into fully paid and non-assessable shares of Common Stock. The conversion price shall equal 58% multiplied by the average of the lowest two (2) Trading Prices for the Common Stock during the fifteen (15) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date.

In connection with the Power Up Convertible Note #3 paid $3,000 in debt issuance costs which are being amortized to interest expense using the effective interest method. During the nine month periods ended January 31, 2018 and 2017, the Company recognized interest expense in the amount of $1,716 and $0, respectively, relating to the amortization of the debt issuance costs. The unamortized balance of debt issuance costs totaled $1,284 and $0 at January 31, 2018 and April 30, 2017, respectively. The Company recorded interest expense in connection with the Power Up Convertible Note #3 in the amount of $4,134 and $0 for nine month periods ended January 31, 2018 and 2017, respectively. Accrued interest due under Power Up Convertible Note #3 totaled $4,134 and $0 as of January 31, 2018 and April 30, 2017, respectively.

PROGREEN US, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The principal balance of the Power Up Convertible Note #3 was $78,000 and $0 at January 31, 2018 and April 30, 2017, respectively.

Note # 4

On November 8, 2017, the Company issued a fourth unsecured convertible promissory note in the principal amount of $51,500 to Power Up Lending Group Ltd (“Power Up Convertible Note #4”), including debt issuance costs of $1,500. This convertible note is due and payable on August 15, 2018 plus interest on the unpaid principal balance at a rate of 12% per annum. In the event that any principal or interest is not timely paid, such amount accrues interest at 22% per annum until paid in full.

The Company may pay Power Up Convertible Note #4 in full, together with any and all accrued and unpaid interest at any time on or prior to the date which occurs 180 days after the November 8, 2017 (the “Issue Date”). following the issue date of this note by making a payment to the note holder of an amount in cash equal to 125%. After 180 days from the Issue Date this Note may not be prepaid.

The Holder shall have the right from time to time, at any time during the period beginning on the date which is one hundred eighty (180) days following the date of the Note, to convert all or any part of the outstanding and unpaid principal amount of this Note into fully paid and non-assessable shares of Common Stock. The conversion price shall equal 58% multiplied by the average of the lowest two (2) Trading Prices for the Common Stock during the fifteen (15) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date

In connection with the Power Up Convertible Note #4 paid $1,500 in debt issuance costs which are being amortized to interest expense using the effective interest method. During the nine month periods ended January 31, 2018 and 2017, the Company recognized interest expense in the amount of $450 and $0, respectively, relating to the amortization of the debt issuance costs. The unamortized balance of debt issuance costs totaled $1,050 and $0 at January 31, 2018 and April 30, 2017, respectively.

The Company recorded interest expense in connection with the Power Up Convertible Note #4 in the amount of $1,428 and $0 for nine month periods ended January 31, 2018 and 2017, respectively. Accrued interest due under Power Up Convertible Note #4 totaled $1,428 and $0 as of January 31, 2018 and April 30, 2017, respectively.

The principal balance of the Power Up Convertible Note #4 was $51,500 and $0 at January 31, 2018 and April 30, 2017, respectively.

Note #5

On January 17, 2018 the Company issued a fifth unsecured convertible promissory note in the principal amount of $63,000 to Power Up Lending Group Ltd (“Power Up Convertible Note #5”), including debt issuance costs of $1,500. This convertible note is due and payable on October 30, 2018 plus interest on the unpaid principal balance at a rate of 12% per annum.

The Company may repay the Power Up Convertible Note #5 (prior to conversion), at 120% of such note (and accrued and unpaid interest thereon) if the note is repaid during the period beginning on January 17, 2018 the (“Issue Date”) and ending 150 days following the Issue Date; and 125% of such note (and accrued and unpaid interest thereon) if such note is repaid during the period beginning on the date that is 151 days from the Issue Date and ending 180 days following the Issue Date. After 180 days have elapsed from the Issue Date the Company has no right to prepay the Power Up Convertible Note #5.

The Holder shall have the right from time to time, at any time during the period beginning on the date which is one hundred eighty (180) days following the date of the Note, to convert all or any part of the outstanding and unpaid principal amount of this Note into fully paid and non-assessable shares of Common Stock. The conversion price shall equal 58% multiplied by the average of the lowest two (2) Trading Prices for the Common Stock during the fifteen (15) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date.

PROGREEN US, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

In connection with the Power Up Convertible Note #5 the Company paid $1,500 in debt issuance costs which are being amortized to interest expense using the effective interest method. During the nine month periods ended January 31, 2018 and 2017, the Company recognized interest expense in the amount of $70 and $0, respectively, relating to the amortization of the debt issuance costs. The unamortized balance of debt issuance costs totaled $1,430 and $0 at January 31, 2018 and April 30, 2017, respectively. The Company recorded interest expense in connection with the Power Up Convertible Note #5 in the amount of $290 and $0 for nine month periods ended January 31, 2018 and 2017, respectively. Accrued interest due under Power Up Convertible Note #5 totaled $290 and $0 as of January 31, 2018 and April 30, 2017, respectively.

The principal balance of the Power Up Convertible Note #5 was $63,000 and $0 at January 31, 2018 and April 30, 2017, respectively.

Note 15. Subscription Agreements

In October, 2017 the Company began offering the sale of up to $1,000,000 aggregate purchase price of shares of its common stock under a Subscription Agreement (the “Subscription Agreement”). Under the terms of the Subscription Agreement each Investor agrees to invest an amount for the purchase of shares in the Company, at a price per share equal to the average closing price of the Company’s common stock for the ten trading days prior to the date of closing (“Closing”) of the purchase by the Investor of the Shares (the “Purchase Price”), on the terms provided for herein.

As of the date180 days after the Closing (the “Initial Valuation Date”), if the Shares issued at the Closing, valued at a price per share equal to the average closing price of the Company’s common stock for the ten trading days prior to the First Valuation Date (“First Valuation Date Price”) do not represent a minimum of 150% of the amount invested by the Investor at the Closing, the Company shall issue to the Investor within 10 business days additional shares of common stock equal to the shortfall in valuation (calculated using the First Valuation Day Price) at the Initial Valuation Date or, at the option of the Company, pay to the Investor within 10 business days the amount of such shortfall in cash. As of the date 360 days after the Closing (the “Second Valuation Date”), if the Shares issued at the Closing, plus any additional shares of common stock issued to the Investor at the First Valuation Date, valued at a price per share equal to the average closing price of the Company’s common stock for the ten trading days prior to the Second Valuation Date (“Second Valuation Date Price”) do not represent a minimum of 200% of the amount invested by the Investor at the Closing, the Company shall issue to the Investor within 10 business days additional shares of common stock equal to the shortfall in valuation (calculated using the Second Valuation Date Price”) at the Second Valuation Date.

During the nine month period ended January 31, 2018, the Company issued 30,156,197 shares of Common Stock to six outside investors for cash in the amount of $370,703 at a purchase price from $.0099 - $0.0150.

During the nine month period ended January 31, 2018, the Company issued 2,706,887 shares of Common Stock to Michael Hylander, member of the Board of Directors for cash in the amount of $28,899 at a purchase price of $0.0107 .

The Company determined that the True-Up feature of the valuation dates of the subscription agreements represents an embedded derivative since the True-Up feature represents a variable number of shares upon each valuation date (See Note 13).

Note 16. Common Stock

On July 17, 2017 the Company issued 926,000 shares of Common Stock in connection with the Hoppel Convertible Note 2 Settlement Agreement. See Note 14.

During the nine month period ended January 31, 2018 the Company issued an additional 15,234,935 shares of Common Stock to settle conversions of $101,098 of the principal amounts of convertible debentures. See Note 14.

PROGREEN US, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

During the nine month period ended January 31, 2018, the Company issued in total 32,863,084 shares of Common Stock for cash in the amount of $399,602 (See Note 15).

Note 17. Series A Convertible Preferred Stock

As of January 31, 2018 and April 30, 2017, 967,031 shares of Series A Preferred Stock were issued and outstanding. There was no activity relating to the Company’s Shares of Series A Preferred Stock during the nine month period ended January 31, 2018.

Note 18. Series B Convertible Redeemable Preferred Stock

As of January 31, 2018 and April 30, 2017, 8,534,625 shares of Series B Preferred Stock were issued and outstanding.

During the nine month period ended January 31, 2018, the Company paid no cash dividends Series B and accrued an additional dividend payable of $71,694. Dividend payable totaled $85,461 and $13,767 as of January 31, 2018 and April 30, 2017, respectively.

As of January 31, 2018, there have been no conversion of the Preferred Stock into Common Stock.

PROGREEN US, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 20. Warrants

For the nine month period ended January 31, 2018, 2,450,000 warrants were issued, and none were exercised or forfeited. See Note 10 and Note 14. The Company’s outstanding and exercisable warrants as of January 31, 2018 are presented below: