Recap of the 2016 evolution of the ProGreenUS Baja California land development business. This is only part of the business, but is currently the most active and largest contributor to future value.
Very early in 2016, Jan made a personal investment in a business arrangement with a large number of small land owners in Baja California, Mexico to "consolidate" the ownership & representation of the land ownership. While ProGreen is forbidden ownership of the land in Mexico - as with any foreign entity - this provided for a single entity to represent the land owners while giving Jan sign-off authority for contracts and commitments with respect to this land. This entity is "CONTEL."
ProGreen (PGUS) executed the first joint venture agreement (JV1) with CONTEL (the land owner 'collective' entity) involving the development and sale of a first 300-acre tract of land. Upon the sale of the property, ProGreen will first recover its investment of approximately $300K before splitting the remaining profit 50-50 with the land owners (CONTEL).
The JV1 deal was a first step toward the goal of gaining control of a significantly larger chunk of land, where Jan was eyeing 10,000+ acres.
A few months later, following further investigation and due diligence, ProGreen executed a second joint venture agreement (JV2) with CONTEL for the development of an additional 1,900 acres and including a 3-year option for about 12,000 acres more. This exceeded the anticipated 10,000+ acres by 40-50%! This much larger chunk of land is being developed for long-term leasing for agricultual use - farming of vegetables primarily for the U.S. market. Same deal for ProGreen, fully recover investment expense before splitting the remaining profit 50-50 with CONTEL.
Shortly after the JV2 deal, Jan was able to create a very strategic new entity, PROCON, of which ProGreen owns 51% (and CONTEL 49%), and the JV1 & JV2 deals were revised to be incorporated under the PROCON "umbrella" - effectively giving ProGreen control of the land and the ability to carry the assets on our balance sheet. This is a very big win for ProGreen. Not only do we have control and assets in addition to the very lucrative, high margin future revenue stream from the sale and lease income. Now PROCON - and ProGreen - can very easily grow substantially as new land owners bring more assets to the table in order to monetize high-value-POTENTIAL land that otherwise sits unused. Without a strategic business vehicle like PROCON, mexican land owners and the farming supply chain to the U.S. market are faced with monumental challenges for monetizing the land.
The first 300-acre tract of the JV1 deal is currently being negotiated for sale.
The second phase (JV2) of land development for leasing is underway.
ProGreen secured a $5M equity line to finance the agricultural land development, among other activities that may include additional real estate investments in Baja for commercial/residential use (portions of the existing land under control and more recent indications of possible developments in the area of Ensenada); projects in the Detroit, MI area for high energy efficient development or rehab of single-family / multi-family community projects to meet the increasingly high demand from young professionals coming into the area; other projects that have been considered in Oklahoma; possibly other business related to arrangements with SolTech Energy (Sweden) for the use, representation and or distribution of the patented solar technology products.
ProGreen recently upgraded to the OTCQB listing status and also filed for reduction of the A/S from 1.5B to 950M shares common.
Over the course of this year, Jan Telander (CEO, ProGreenUS), brother Ulf (CEO, EIG Capital) and nephew Frederic (CEO, SolTech Energy), and Ulf's investment company EIG Capital have invested over $1.1M in ProGreenUS.
