ProGreen US Inc. (fka PGUS)

[MoneyForNuthin]

tigerpac, I believe this is how to read it -

Remember that Progreen invests in the farming operation, and then receives the investment back before profit is split. So it can't show as revenue/sales, it will show on the balance sheet. Once we recoup our investment, I think it should then show as some Other Income (from investing activity?).

But I think the really BIG deal is this new ProGreen Farms US, LLC, and how this wholly-owned (nearly positive, that's my impression) Progreen subsidiary is going to distribute the produce going forward. I think Progreen will see ALL of the revenue next year, as gross sales. That $5M of revenue is sure going to look good on the Income Statement!

In a post a long time ago I described what I saw on the balance sheet that reflected Progreen's investment, being a receivable under the assets. I think this was about a year ago when the farming land was purchased and some work had gone into it initially for drilling (water) and clearing the land.

So if you look here in the snippet below from the Balance Sheet, you will see $912,500 Note Receivable - Related Party. Comparing to the prior period, there's $222,000 added to the receivable amount (the prior period showing '6 months ago', which meshes with the 6-months cash flow period on the Statement of Cash Flows). This says that Progreen invested a net $222K additional over the 6 months from April 30 through October 31.



Now you can look at this snippet below from the Statement of Cash Flows to see two line items: the Loan For Note Receivable - Related Party shows that over the 6 month period, $272,000 was added to the "investment," and the Loan Repayment By Related Party shows that $50,000 was repaid from the investment - which gives a net $222K added to the investment, as was shown above on the Balance Sheet Assets.



So, the bottom line here would be that the revenue received from the harvest just began to exceed (by $50,000) what was still being invested - by October 31 - for covering the operating expenses, whatever was being done for any expansion activities, as well as whatever expenses may have been put into business development (e.g. any activities being put into planning/developing the overall 'business' of the farming ops and getting to the point where we eventually landed the deal with Huy Fong).

I don't know what we will see coming out of the farming ops to repay the investment, but I don't expect to see ANY. In fact, we should be seeing the investment dollars (receivables) growing as Progreen puts more money into expanding - which is what I want to see. It makes absolutely no sense IMO to be taking anything out of the farming operation until we've done everything we can to grab up the lion's share of supply to Huy Fong. It's all about growth at this stage.