Borislav Tonev

ProGreen Properties Inc (OTCMKTS:PGEI) Skyrockets out of Triple-Zero Land

by Borislav Tonev December 30, 2015

There's been a steady stream of optimistic press releases coming out of ProGreen Properties Inc (OTCMKTS:PGEI, PGEI message board)'s headquarters (which appears to be a residential house in the township of Bloomfield, Michigan). Most of them aren't very effective when it comes to lifting the share price. The one from yesterday, however, managed to cause quite a bit of stir.

The company announced that it has signed a letter of intent for the acquisition of a total of fourteen properties in Oakland County, Michigan. Thirteen of them are rental properties which is supposed to bring a more steady stream of revenues, and one will be sold on the open market. The news propelled PGEI sky-high.

The ticker smashed its way through the $0.001 barrier and after reaching a peak of more than $0.003 for the first time in over four months, it settled down and arrived at a close of $0.0012. Not the most brilliant of intraday performances, it must be said, but 140% in the green is 140% in the green. The volume was quite substantial as well and the people who jumped in seem pretty pleased with the prospects. Those who have been with the company for a while, however, probably aren't quite so happy.

PGEI is by no means an OTC newcomer. It's been traded under its current identity since September 2009, but over the years, it has failed rather miserably at attracting any sort of serious interest from investors which in turn means that it has spent most of its days in sub-penny land. Let's take a look at some of the potential reasons for this.

Truth be told, despite the countless press releases, joint ventures, and agreements, PGEI has never been able to come up with a solid financial statement. Proof of this can be found in the latest 10-Q. It covers the three months ended October 31 and it looks like this:

  • cash: $32 thousand
  • current assets: $114 thousand
  • current liabilities: $1.2 million
  • quarterly revenues: $114 thousand
  • quarterly net loss: $121 thousand

The financials above aren't really substantial enough to support the ticker and investors who have their money on the line can only hope that the newly acquired properties can change that.

In the meantime, they also need to worry about something else – the toxic debt. During the three months ended October 31, PGEI satisfied a little less than $19 thousand worth of convertible notes with the issuance of more than 25.5 million shares at an average rate of $0.0007 apiece.

It wouldn't have been so bad if that was the end of that, but the management team did admit that there was a further $65 thousand worth of convertible debt still outstanding at the end of October and we can see from the 10-Q that the discounts to the market price hover around 40%. Recently, PGEI also raised the number of authorized shares from 250 million to 5 billion which goes to show that the dilution might be far from over.

Comments 0

Type the characters that you see in the box (5 characters).