Dragni Dragnev

ProGreen Properties Inc. (OTCMKTS:PGEI) Crashes Horribly

by Dragni Dragnev February 18, 2016

Yesterday, ProGreen Properties Inc. (OTCMKTS:PGEI, PGEI message board) crashed a horrifying 38.92% down the charts, in spite of producing yet another reassuring piece of PR. How could that be?

Well, since there are no failing pumps or horrifying new developments surrounding PGEI, this crash could probably be interpreted as an awakening of sorts.

In short – it may well be that PGEI's attempt to draw attention to itself through PR backfired and drew the investors' attention to its shortcomings instead, which in turn, caused the crash.

In its latest PR, the company announced that it is making steps to in order to “dramatically improve its balance sheet”. That's all well and good, and sounds like an admirable endeavor... until you realize that the company does not intend to actually repay what it owes. Rather, PGEI means to issue preferred stock to its noteholder.

Since there's no filing on the matter, there's no way to be sure that said stock will be non-convertible. This means that investors won't actually know whether this move was actually beneficial to investor value, because it might well not be.

On the other hand, PGEI really needs to do something about its convertible debt – and it's not like it could afford a share buyback program, seeing as how last time it reported, the company had just:

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

Conversions of thousands of dollars worth of debt into shares an average rate of $0.0007 a pop have dug PGEI investor value into a deep hole indeed. That being the case, it is really no wonder that the ticker is stuck to the very bottom of the charts, and it will not be surprising to see it drop even further, even if it continues its desperate efforts to convince investors that everything is fine.

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