Current Report Filing (8-k)
May 29 2018 - 5:17PM
Edgar (US Regulatory)
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
DC 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date
of Report (Date of earliest event reported): May 22, 2018
PROGREEN
US, INC.
(Exact
Name of Registrant as Specified in Its Charter)
Delaware
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000-25429
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59-3087128
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(State
or Other Jurisdiction
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(Commission
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(
I.R.S. Employer
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of
Incorporation)
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File
Number)
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Identification
No.)
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2667
Camino del Rio South, Suite 312, San Diego, CA
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92108-3763
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(Address
of Principal Executive Offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code: (619) 487-9585
Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging
growth company [X]
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions (see General Instruction A.2. below):
[ ]
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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[ ]
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a -12)
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[ ]
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d -2(b))
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[ ]
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e -4(c))
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BACKGROUND
ProGreen
US, Inc. (ProGreen) is providing the following background comments regarding disclosures in the Items included in this Current
Report.
Tangiers
Note Issued
Tangiers
Global, LLC (Tangiers) has been a funding partner for ProGreen over the past several years and, with this new note, continues
to support the company’s short-term cash requirements.
T
angiers has also made an equity investment in Progreen, under
the same terms and Share Purchase Agreement that we have extended to private investors starting October 5, 2017.
The
Company has issued this convertible note for working capital funding purposes, and intends to secure conventional debt financing
arrangements to pay off current short term debt and for development of our Cielo Mar project, although there is no assurance that
we will be able to arrange this financing.
Announcements
related to the planned conventional debt financing are as follows:
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●
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From
the Company’s Twitter account @ProGreenUS on May 22, 2018: “We have now executed the Letter of Intent for a bridge
financing of $5M (referred to in yesterday’s announcement
https://www.progreenus.com/pr-20180521/
). Now proceeding
with the underwriting due diligence.”
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●
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Press
release on May 21, 2018: “ProGreen Receives LOI’s for First Stage of Larger Funding Plan”
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Press
release on April 6, 2018: “ProGreen Receives Cielo Mar Valuation Pursuant to Funding Plan”
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Press
release on March 21, 2018: “CBRE Appraisal Values Cielo Mar Land at $42M”
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Press
release on January 29, 2018: “ProGreen Retains CBRE for Cielo Mar Property Appraisal”
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Press
release on December 20, 2017: “ProGreen announces $10M secured financing plan”
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THE
FOREGOING GENERAL DISCUSSION IS QUALIFIED BY THE MORE DETAILED ITEM DESCRIPTIONS AND THE REFERENCED EXHIBIT DOCUMENTS BELOW.
Item 1.01.
Entry into a Material Definitive Agreement.
Convertible
Note issued to Tangiers Global, LLC
The
Company has closed a financing on May 24, 2018, (the “Effective Date”) in which it issued a 12% Fixed Convertible
Promissory Note dated May 22, 2018 (the “Note”) in the original principal amount of $105,000 due November 22, 2018
to Tangiers Global, LLC (sometimes referred to as “Tangiers” or the “Holder”). The amount of $5,000 was
retained by the Holder through an original issue discount for due diligence and legal bills related to this transaction, and the
Company received net proceeds of $100,000. In the Event of Default under this Note, the outstanding principal amount of the Note
shall become, at the Holder’s election, immediately due and payable. The principal will increase by 35% of the outstanding
principal amount of the Note. In addition to the “guaranteed” interest referenced above, in event of occurrence of
an Event of Default, additional interest would accrue from the date of the Event of Default at the rate equal to the lower of
22% per annum or the highest rate permitted by law.
The
Note provides for customary events of default such as failing to timely make payments under the Note when due, unsatisfied judgments
against the Company, failure to issue conversion shares in a timely manner, “chilled status” imposed by The Depository
Trust Corporation or a trading suspension issued by the United States Securities and Exchange Commission, failure of the Company
to comply with the periodic reporting requirements of the Exchange Act, including xbrl filings, or otherwise, so that the Company’s
common stock ceases to remain eligible for sales made in reliance on Rule !44 under the Securities Act.
The
Note is convertible at any time at a conversion price equal to 55% of the lowest trading price of the Company’s common stock
during the 15 consecutive Trading Days prior to the date on which Holder elects to convert all or part of the Note.
This
Note may be prepaid by the Company in accordance with the following schedule:
Days
Since Effective Date
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Prepayment
Amount
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Under
90
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115%
of Principal Amount
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91
to 120
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120%
of Principal Amount
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121
to 180
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125%
of Principal Amount
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The
Company agreed that it will not enter into a convertible debt financing transaction with any party other than the Holder for a
period of 20 Trading Days following the Effective Date. The Company agreed that this was a material term of this Note and any
breach of this provision will result in a default under the Note.
The
Company also agreed to provisions of the Note granting the Holder “piggyback” registration rights for new registration
statements filed by the Company, rights of refusal with respect to certain types of financings, as well as a “most favored
nation” type of provision with regard to future convertible debt financings by the Company.
The
foregoing description of the Convertible Note DOES not purport to be complete and IS qualified in ITS entirety by reference to
the FORM OF SUCH PROMISSORY NOTE filed as AN Exhibit to this Current Report on Form 8-K IS are incorporated herein by reference.
DEFINED TERMS USED IN THE DESCRIPTION of the Note IN THIS CURRENT REPORT SHALL HAVE THE MEANING PROVIDED IN THE NOTE, UNLESS SPECIFICALLY
DEFINED ABOVE IN THIS REPORT.
Item
2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
The
information set forth under Item 1.01of this Current Report on Form 8-K is incorporated by reference herein.
Item 3.02.
Unregistered Sale of Equity Securities.
The
following table sets forth the sales of unregistered securities since the Company’s last report filed under this item.
Date
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Title and Amount(1)
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Principal
Purchaser
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Underwriter
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Total
Offering Price/
Underwriting
Discounts
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May 24, 2018
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2,117,747 shares of Common Stock.
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Tangiers Global, LLC
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NA
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$50,000/NA
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May 22, 2018
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Convertible Promissory Note in the principal amount of $105,000 issued to Tangiers Global, LLC.
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Private Investor
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NA
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$236,085/NA
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(1)
The issuances of securities to lenders and investors are viewed by the Company as exempt from registration under the Securities
Act of 1933, as amended (“Securities Act”), alternatively, as transactions either not involving any public offering,
or as exempt under the provisions of Regulation D promulgated by the SEC under the Securities Act.
Item
9.01 Financial Statements and Exhibits.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
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PROGREEN
US, INC.
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Dated:
May 29, 2018
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By:
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/s/
Jan Telander
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Jan
Telander, Chief Executive Officer
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