ProGreen US Inc. (fka PGUS)

[Potse]

Zen lunatic420.....DPRI dilution......

"I would think they would want to raise capital at higher rates to control dillution, but since EIG is the financer....I can't help but think that this dillution is just to water down the current shareholders equity.....and provide a little bit of capital to get things rolling....with whatever ProGreen Properties, Inc. intends to do with their properties."

My hunch is that the purpose of the three tranches has less to do with infusing some capital into the business and more to do with increasing/maintaining EIG's ownership percentage of the business (watering down the current shareholders equity).

Shell owners usually keep around 3-10% of the new business in a typical reverse merger transaction. Based on the language in the recent filings, DPRI is no longer a shell and now has an operating business via the merger with the ProGreen Properties subsidiary. It is kind of interesting to run the numbers on DPRI on a fully-diluted basis (treat the three EIG investment tranches as if they all had been completed as of today), and then calculate the percentage the non-EIG shareholders keep......

a) 112 million shares fully-diluted
b) 5.4 shares owned by non-EIG shareholders
c) 4.8% of the new business owned by non-EIG shareholders, which is a number that falls quite nicely within the typical reverse merger parameters.

Obviously without knowing any details regarding the company's business plans/direction, there is considerable risk in maintaining an investment in DPRI, but that is basically the nature of shell investing. I decided to pick up some shares at 5 cents for trading purposes when I noticed that statement in Thursday's NT 10-K.....

The Company was a shell corporation from April 30, 2009 until July 28, 2009 when it closed on its first acquisition of real estate.

That verbiage/wording is rather interesting, IMO. Unless DPRI has issued shares in some type of real estate transaction that hasn't been disclosed as of yet via a filing, then it would appear to me that this acquisition of real estate occurred when DPRI and its subsidiary ProGreen Properties merged. Further, this opens up the intriguing possibility that EIG Capital and Jan Telander may be basically transfering some assets into DPRI, since other than the tranches it doesn't appear that DPRI bore any noticeable expense in acquiring ProGreen and the real estate. But that is all just a hunch on my part, and would require some confirmation/clarification.

Last week CEO Jan Telander registered the new website (still under construction as of this writing)......

http://www.progreenproperties.com/