SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549





FORM 10-K





x ANNUAL REPORT PURSUANT TO SECTION 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934


For the fiscal year ended: April 30, 2011


OR





 ̈ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934





For the transition period from __________ to __________





Commission File No. 000-25429





PROGREEN PROPERTIES, INC.


(Exact name of Registrant as Specified in Its Charter)





Delaware

59-3087128(State or other jurisdiction of

(I.R.S. EmployerIncorporation or organization)

Identification No.)





380 North Old Woodward Avenue, Suite 226, Birmingham MI
48009(Address of principal executive offices)

(Zip Code)





Issuer's Telephone Number, Including Area Code: (248) 530-0770





Securities registered pursuant to Section 12(b) of the Act: None





Securities registered pursuant to Section 12(g) of the Act: Common Stock, $.0001 par value per share





Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes  ̈ No x





Indicate by checkmark if the registrant is not required to file reports to Section 13 or 15(d) Of the Act.  ̈ Yes x No





Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x Yes  ̈ No





Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  ̈





Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes  ̈ No  ̈





Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a smaller reporting company. (Check One):





Large accelerated filer  ̈
Accelerated filer  ̈Non-accelerated filer  ̈
Smaller reporting company x(Do not check if a smaller reporting company)





Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  ̈ Yes x No





The aggregate market value of the voting and non-voting common equity held by non-affiliates as of the last business day of the registrant’s most recently completed second fiscal quarter was $553,881.





Number of shares of Common Stock outstanding as of July 22 2011: 104,329,703 shares.











TABLE OF CONTENTS





PART I
3Item 1. Business
3Item 1A. Risk Factors
5Item 1B. Unresolved Staff Comments
8Item 2. Properties
8Item 3. Legal Proceedings
8Item 4. Reserved
8PART II
9Item 5. Market for Registrant's Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities
9Item 6. Selected Financial Data
9Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
10Item 7A. Quantitative and Qualitative Disclosures About Market Risk
13Item 8. Financial Statements and Supplementary Data
14Item 9. Changes In and Disagreements With Accountants on Accounting and Financial Disclosure
30Item 9A (T). Controls and Procedures
30Item 9B. Other Information
30PART III
31Item 10. Directors, Executive Officers, and Corporate Governance
31Item 11. Executive Compensation
32Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
33Item 13. Certain Relationships and Related Transactions, and Director Independence
34Item 14. Principal Accountant Fees and Services
34Item 15. Exhibits and Financial Statement Schedules
36SIGNATURES
37





2







FORWARD LOOKING STATEMENTS





This Report contains forward-looking statements within the meaning of the Private Securities Reform Act of 1995 including the adequacy of our working capital and our acquisition plans. In addition to these statements, trend analyses and other information including words such as “seek,” “anticipate,” “believe,” “plan,” “estimate,” “expect,” “intend” and other similar expressions are forward looking statements. These statements are based on our beliefs as well as assumptions we made using information currently available to us. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Because these statements reflect our current views concerning future events, these statements involve risks, uncertainties, and assumptions. Actual future results may differ significantly from the results discussed in the forward-looking statements. We anticipate that some or all of the results may not occur because of factors which we discuss in the “Risk Factors” section.





PART I


Item 1. Business.





General





Throughout this Form 10-K, the terms "we," "us," "our," “ProGreen” and the "Company" refer to ProGreen Properties, Inc., a Delaware corporation, and, unless the context indicates otherwise, includes our subsidiaries.





ProGreen Properties, Inc., formerly Diversified Product Inspections, Inc. (“we”, “us”, or the “Company”) was incorporated in Florida on April 23, 1998 and reincorporated in Delaware on December 12, 2008. Effective September 11, 2009, we changed our name from Diversified Product Inspections, Inc. to ProGreen Properties, Inc. to reflect the change in our business operations from the conduct of investigations and laboratory analyses to the purchase of income producing real estate assets.





The Company had maintained its conduct of investigations and laboratory analyses operations until the April 30, 2009 closing of a Settlement and Asset Purchase Agreement (the “Agreement”). On April 30, 2009, we ceased our investigations and laboratory analyses operations and closed the Agreement pursuant to which $230,000 was paid to a plaintiff to settle material litigation, and our remaining assets and liabilities were transferred to a separate entity owned by the previous executive officers of the Company.








Our Business





Our offices are located in Birmingham, Oakland County, Michigan. Our plan is to acquire, refurbish and upgrade potential income-producing residential real estate. We are initially concentrating on the Michigan market, and on July 28, 2009, purchased our initial property, a condominium located in Oakland County, Michigan. The Company remodels and upgrades properties with an emphasis on using environmentally friendly materials.As of June 30, 2011, we have purchased eleven properties, leased seven, sold two and are renovating or have completed renovation of two.





We believe that Michigan offers some of the best investment opportunities in the presently distressed U.S. property market.





As the U.S. credit market is currently extremely restricted, ProGreen is financing property acquisitions with funding from European investors. Being able to place cash bids, gives us a strong position in our targeted market.





Our business model since our initial property purchases has been to acquire, refurbish and upgrade existing properties into more energy efficient, comfortable and healthier living spaces so that they meet standards that exceed, what is often the norm for most single family homes, condominiums and apartments. Once a property has been acquired, refurbished and rented, we put the property back on the market, but now as a fully managed investment property, with a favorable yield. These investment properties are marketed exclusively by ProGreen Realty LLC, a wholly owned subsidiary of ProGreen and managed by ProGreen Property Management, a division of ProGreen Realty LLC.





Our long term goal is to create a ProGreen Quality and Energy Efficiency Certification (PQEEC) for our homes, from a basic level providing improved insulation, better heating efficiency, Energy Star appliances etc., to more advanced levels, with high-tech ventilation and air filtration systems, built-in recycling areas, ultra-high efficiency heating/cooling systems, on-site solar or other Renewable Energy sources etc. These improvements are adapted according to a financial feasibility for each property. We believe this will create a “stand-out” profile of ProGreen as a company and make our properties unique in the market place, resulting in a sustained appreciation of property value over time.





In order to be able to achieve this, from a practical as well as an economically viable method, ProGreen has joined forces with an award winning Michigan architectural firm. To make homes more energy efficient, we will strive, whenever possible and practical, to improve insulation, use quality Energy Star compliable windows/doors, replace outdated furnaces, water heaters with high efficiency units, and if viable, implement alternative green energy solutions. To be able to offset some of the cost, for these types of improvements, we aim to obtain tax credits, subsidies and/or grants. We also aim to use Energy Star approved appliances, whenever appliances are replaced.


3





To make homes more comfortable, we try to, whenever practical, to optimize space by creating openness, introducing more natural light, creating better storage areas, as well as improving sound and thermal insulation, all with a view to make even small condominiums and apartments eco-friendly and practical. This ideology, we believe, will increase property value as well as create tenant loyalty.





To create a healthier living environment, we use eco-friendly, paints, primers and adhesives; improve air quality through better ventilation and air filtration in heating and air conditioning systems.




Planned Apartment Property Acquisitions




Having established and implemented the ProGreen concept in our wholly-owned properties, which have produced a solid rental record over the past year, reaching over 15% return, we are prepared to move to the next level of property investments. We are now aiming to acquire large scale multi-family properties and are presently looking at several bank-owned complexes, ranging from 67 to 300 units. We believe there is immediate opportunity to acquire highly distressed multi-family properties in Michigan as well as in some other areas, where the implementation of the ProGreen concept will create a new aspect and attraction to apartment living.   ProGreen is also looking into the viability of taking the ProGreen concept even further in connection with these larger projects, with possible implementation of solar technology as well as other advanced sustainable eco solutions.




ProGreen's goal is to be able to present its first "green" apartment complex, attracting a new generation of renters, that appreciate and believe in the need for green technology in the residential market place. If ProGreen's multi-family properties can be in the forefront of this "new wave" of green apartment living, it will generate better tenant loyalty, higher occupancy, with corresponding higher rental returns and in the process increase real estate values.




As conventional financing is presently very restricted in the U.S., we are in discussions with several European investor groups, to partner up with us for the financing of these larger projects. We are also reviewing other potential real estate lenders in the US, to secure the necessary financing.  There is no assurance, however, that we will be able to secure the necessary financing to move our operations up to larger scale property investments.




Recent Developments





Our Company will be featured in 2011 on the nationally televised show, “Today in America”. The program is hosted by Terry Bradshaw, to many best known as one of the greatest quarterbacks in NFL history. ProGreen’s segment will be featured in the program under “Environmental Impact” and was filmed on location in Michigan on March 28 and will present ProGreen’s business model of refurbishing and upgrading existing properties into energy efficient, comfortable and healthier living spaces, to standards that exceed what is often the norm for most single family homes, condominiums and apartments.  The program is scheduled to air on August 13, 2011 nationally.





Planned Operations





We believe that our initial focus on acquiring condominiums in well sought after areas within Oakland County (fourth richest county in the U.S.) is building a solid foundation, creating the opportunity of early capital gains, as well as good cash flow, while minimizing risk exposure. Although real estate investing is marked by its cycles, there can be no assurances that the housing market in general and the market in the greater Detroit, Michigan area will improve in the future.









4






We own each property separately through a wholly-owned limited liability company for that particular property and will continue in the same way with future properties. This will permit us to limit our risk by isolating risks relating to a particular property solely to that property. Our property management strategy will be to deliver quality services, thereby promoting tenant satisfaction, maintaining high tenant retention, and enhancing the value of each of our operating real estate assets through eco-friendly improvements.





In analyzing the potential development of a particular project, we evaluate the geographic, demographic, economic, and financial data, including:





·
Households, population and employment growth;·
Prevailing rental and occupancy rates in the market area, and possible growth in those rates; and


·
Location of the property in respect to schools and public transportation.





Environmental and Other Regulatory Matters





Under various federal, state, and local laws and regulations, an owner of real estate is liable for the costs of removal or remediation of hazardous or toxic substances on the property. Those laws often impose liability without regard to whether the owner knew of, or was responsible for, the presence of the hazardous or toxic substances. The costs of remediation or removal of the substances may be substantial, and the presence of the substances, or the failure to remediate the substances promptly, may adversely affect the owner’s ability to sell the real estate or to borrow using the real estate as collateral.




Insurance




We will carry comprehensive property, general liability, fire, extended coverage and environmental on all of our existing properties, with policy specifications, insured limits, and deductibles customarily carried for similar properties.





Competition





We operate in a competitive housing market environment where a variety of individuals and corporations are trying to maximize gains on the acquisition of undervalued property through housing market conditions. We are not familiar with any direct competitors in the Oakland County, Michigan, area that have similar business models involving rehabilitation of properties using environmentally friendly renovation techniques, but there is no assurance that we will continue to be able to purchase residential rental properties at attractive prices or that we will not experience competition from other developers that are marketing energy efficient and environmentally friendly properties.  If we expand our operations to target the acquisition of apartment complex properties, we will be competing with numerous established real estate investors, many of which will have significantly greater financial resources than us.





Employees





We have one employee as at July 22, 2011.  Our management expects to confer with consultants, attorneys and accountants as necessary.








Item 1A. Risk Factors.





Investing in our common stock involves a high degree of risk. You should carefully consider the following risk factors before deciding whether to invest in the Company. Additional risks and uncertainties not presently known to us, or that we currently deem immaterial, may also impair our business operations or our financial condition. If any of the events discussed in the risk factors below occur, our business, consolidated financial condition, results of operations or prospects could be materially and adversely affected. In such case, the value and marketability of the common stock could decline.





Risks Relating to Our Business





Because we have a limited operating history to evaluate our company, the likelihood of our success must be considered in light of the problems, expenses, difficulties, complications and delay frequently encountered by a new company.





We were a shell company from April 30, 2009 until our initial purchases of condominiums discussed herein in pursuit of our new business plan. Since we have a limited operating history, we cannot assure you that our business will be profitable or that we will ever generate sufficient revenues to meet our expenses and support our anticipated activities. Start-up companies often are unsuccessful and encounter unanticipated expenses and difficulties, investors should consider this risk in determining whether to purchase or sell our common stock.


5




If we need additional capital to fund our growing operations, we may not be able to obtain sufficient capital and may be forced to limit the scope of our operations.





The severe recession, freezing of the global credit markets and the decline in the stock market which continues to affect smaller companies like us may adversely affect our ability to raise capital if we need additional working capital. Because we have not reported profitable operations to date, we may need to raise working capital. If adequate additional financing is not available on reasonable terms or at all, we may not be able to undertake expansion, and we will have to modify our business plans accordingly.





Even if we do find a source of additional capital, we may not be able to negotiate terms and conditions for receiving the additional capital that are acceptable to us. Any future capital investments will dilute or otherwise materially and adversely affect the holdings or rights of our existing shareholders. In addition, new equity or convertible debt securities issued by us to obtain financing could have rights, preferences and privileges senior to our common stock. We cannot give you any assurance that any additional financing will be available to us, or if available, will be on terms favorable to us.





Because our business plan is to acquire residential housing and possibly larger apartment complexes, we are subject to all of the risks which affect residential real estate including the current severe decline.




Real property investments are subject to varying degrees of risk and are relatively illiquid. Several factors may adversely affect the economic performance and value of our property and any properties acquired in the future. These factors include changes in the national, regional and local economic climates, local conditions such as, the attractiveness of our properties to residents, competition from other available property owners and changes in market rental rates. Our performance also will depend on our ability to collect rent from residents and to pay for adequate maintenance, insurance and other operating costs, including real estate taxes, which could increase over time. Sources of labor and materials required for maintenance, repair, capital expenditure or development may be more expensive than anticipated. Also, the expenses of owning and operating a property are not necessarily reduced when circumstances such as market factors and competition cause a reduction in income from the property.





Because real estate properties are illiquid and may be difficult to sell, particularly in a poor market environment like the present, we face future difficulties in selling these properties and may not be able to sell them at a profit.





Real estate investments are relatively illiquid, which limits our ability to react quickly to adverse changes in economic or other market conditions. Our ability to dispose of assets in the future will depend on prevailing economic and market conditions. The current credit crunch may make it particularly difficult to sell our properties, because interested buyers may be unable to obtain the financing they need. We may be unable to sell our properties when we would prefer to do so to raise capital we need to fund our planned development and construction program or to fund distributions to investors.





As a company investing in residential real estate, we face leasing risks in our proposed residential real estate investment program.





Our success will depend in part on leasing to residents or tenants with acceptable terms. If our residential apartment homes, condominiums or houses are not leased on schedule and on the expected terms and conditions, the returns on the property could be adversely affected. Whether or not residential tenants are willing to enter into leases on the terms and conditions we project and on the timetable we expect will depend on a large variety of factors, many of which are outside our control.





Because our business model is to acquire residential property in the Detroit, Michigan area, we are subject to risks that affect that local area.





General economic conditions and other factors beyond our control may adversely affect real property income and capital appreciation in the greater Detroit market. The current economic climate, punctuated by a slumping housing market and rapid tightening of available credit, has resulted in a weak real estate market in this area, and these conditions may continue or become more severe in the future. In particular, unemployment is higher than in other areas of the United States.





Because of environmental laws, we may have liability under environmental laws even though we did not violate these laws.





Under federal, state, and local environmental laws, ordinances, and regulations, we may be required to investigate and clean up the effects of releases of hazardous or toxic substances or petroleum products at our properties, regardless of our knowledge or responsibility, simply because of our current or past ownership or operation of the real estate. If environmental problems arise, we may have to take extensive measures to remedy the problems, which could adversely affect our cash flow and operating results. The presence of hazardous or toxic substances or petroleum products and the failure to remediate that contamination properly may materially and adversely affect our ability to borrow against, sell, or lease an affected property. In addition, applicable environmental laws create liens on contaminated sites in favor of the government for damages and costs it incurs in connection with a contamination.


6





As an owner of real property, we will face risks related to ownership including mold and Chinese drywall.





Recently, there have been a large number of lawsuits against owners and managers of properties alleging personal injury and property damage caused by the presence of mold in real estate. Some of these lawsuits have resulted in substantial monetary judgments or settlements. We cannot provide any assurance that we will be able to obtain insurance coverage in the future for mold-related claims at a commercially reasonable price or at all. The presence of significant mold could expose us to liability to residents, tenants, and others if allegations regarding property damage, health concerns, or similar claims arise. Remediation of mold is expensive and involves hiring a specialty contractor and may involve extensive renovations, which costs can not be passed on to tenants. Additionally, although still evolving, drywall from China has posed a major health risk and has rendered homes uninhabitable. This problem is relatively new and still evolving. We do not know if it will affect properties in our target market. If it affects properties we acquire, we will incur substantial remediation costs and the loss of income.





Failure to comply with the Americans with Disabilities Act or other similar laws could result in substantial costs.




A number of federal, state, and local laws and regulations (including the Americans with Disabilities Act) may require modifications to existing buildings or restrict certain renovations by requiring improved access to such buildings by disabled persons and may require other structural features that add to the cost of buildings under construction. Legislation or regulations adopted in the future may impose further burdens or restrictions on us with respect to improved access by disabled persons. The costs of compliance with these laws and regulations may be substantial, which could have a material adverse effect on our results of operation.





Risks Related to Our Common Stock





Since we expect to incur expenses in excess of revenues for the near future, we may not become profitable and your investment may be lost.





We expect to incur losses for the foreseeable future. We had minimal revenues in our fiscal year ended April 30, 2011, and may never be profitable. If we become profitable, we may be unable to sustain profitability. As a result, your investment in our securities may be lost.





We may issue preferred stock without the approval of our stockholders with features, which could make it more difficult for a third party to acquire us and could depress our Common Stock price.





In the future, our board of directors may issue one or more series of preferred stock that has more than one vote per share without a vote of our stockholders. This can prevent a third party from acquiring us even when it is in our stockholders’ best interests and reduce the price of our Common Stock.





Because the market for our common stock is limited, persons who purchase our common stock may not be able to resell their shares at or above the purchase price paid by them.





Our common stock trades on the Over-the-Counter Bulletin Board which is not a liquid market. There is currently only a limited public market for our common stock. We cannot assure you that an active public market for our common stock will develop or be sustained in the future. If an active market for our common stock does not develop or is not sustained, the price may continue to decline.





Because we are subject to the “penny stock” rules, brokers cannot generally solicit the purchase of our common stock which adversely affects its liquidity and market price.





The Securities and Exchange Commission or SEC has adopted regulations which generally define “penny stock” to be an equity security that has a market price of less than $5.00 per share, subject to specific exemptions. The market price of our common stock on the Bulletin Board has been substantially less than $5.00 per share and therefore we are currently considered a “penny stock” according to SEC rules. This designation requires any broker-dealer selling these securities to disclose certain information concerning the transaction, obtain a written agreement from the purchaser and determine that the purchaser is reasonably suitable to purchase the securities.





Due to factors beyond our control, our stock price may be volatile.





The market price for our Common Stock has been highly volatile at times. As long as the future market for our Common Stock is limited, investors who purchase our Common stock may only be able to sell them at a loss.


7




Because we may not be able to attract the attention of major brokerage firms, it could have a material impact upon the price of our common stock.





It is not likely that securities analysts of major brokerage firms will provide research coverage for our common stock since the firm itself cannot recommend the purchase of our common stock under the penny stock rules referenced in an earlier risk factor. The absence of such coverage limits the likelihood that an active market will develop for our common stock. It may also make it more difficult for us to attract new investors at times when we acquire additional capital.








Item 1B. Unresolved Staff Comments.




Not applicable.





Item 2. Properties.





We lease our offices at 380 North Old Woodward Ave., Suite 226, Birmingham, Michigan, of approximately 1,093 sq. ft., at a current monthly rent of $2,368, under a five and one-half year lease.





The following table shows as of June 30, 2011, the condominium properties owned by the Company.





Leased Condominiums:


Monthly Rent
Rehabilitation Status2 Bed/1.5 Bath Upper Unit, Waterford Michigan
$ 875

Fully Remodeled2 Bed/1.5 Bath Townhouse, Novi, Michigan
1,100

Fully Remodeled2 Bed/1.5 Bath Townhouse, Farmington Hills, Michigan
1,300

Fully Remodeled2 Bed/2 Bath, 1 story, Farmington Hills, Michigan
1,000

Fully Remodeled2 Bed/3 Bath, 1 story, Farmington Hills, Michigan
950

Partially Remodeled2Bed/2 Bath 1 story, West Bloomfield, Michigan *
1,350

Fully Remodeled2 Bed/1.5 Bath Townhouse, Madison Heights, Michigan
1,175

Fully Remodeled2 Bed/2 Bath 1 story, West Bloomfield Michigan
950

Partially Remodeled*occupied by CompanyVacant Condominiums:2 Bed/1.5 Bath Townhouse, Madison Heights, Michigan


Fully Remodeled





At this time, seven of these properties are being offered for sale as a fully leased property portfolio.








Item 3. Legal Proceedings.





We are not party to any material legal proceedings.





Item 4. [Removed and Reserved.]





8





PART II





Item 5. Market for Registrant's Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities.





Market Information


Our common shares are trading in the OTC Bulletin Board market under the symbol “PGEI.OB”.





The following table sets forth, for the periods indicated, the high and low bid prices of our common stock, as reported in published financial sources. Quotations reflect inter-dealer prices, without retail mark-up, mark-down, commission, and may not represent actual transactions.


High


LowFiscal Period Ended April 30, 2009Quarter Ended April 30, 2009

$
0.06


$
0.01Quarter Ended March 31, 2009

$
0.04


$
0.01Fiscal Year Ended April 30, 2010Quarter Ended July 31, 2009

$
0.05


$
0.02Quarter Ended October 31, 2009

$
0.10


$
0.02Quarter Ended January 31, 2010

$
0.10


$
0.04Quarter Ended April 30, 2010

$
0.10


$
0.01Fiscal Year Ended April 30, 2011Quarter Ended July 31, 2010

$
0.11


$
0.02Quarter Ended October 31, 2010

$
0.24


$
0.05Quarter Ended January 31, 2011

$
0.07


$
0.03Quarter Ended April 30, 2011

$
0.09


$
0.05Fiscal Year Ended April 30, 2012Quarter Ended July 31, 2011 (through July 22, 2011)

$
0.04


$
0.02





Holders





As of July 22, 2011, there were approximately 531 holders of record of our common stock.





Dividends





We do not anticipate paying cash dividends in the foreseeable future. Our current policy is to retain any earnings to finance our future development and growth. We may reconsider this policy from time to time in light of conditions then existing, including our earnings performance, financial condition and capital requirements. Any future determination to pay cash dividends will be at the discretion of our board of directors and will depend upon our financial condition, operating results, capital requirements, general business conditions and other factors that our board of directors deems relevant.





Recent Sales of Unregistered Securities





Not applicable.





Purchases of Equity Securities by the Registrant





None.





Item 6. Selected Financial Data.





Not applicable.


9


Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.





The following discussion of our financial condition and results of operations should be read in conjunction with the financial statements and notes thereto and other financial information included elsewhere in this report.





Certain statements contained in this report, including, without limitation, statements containing the words "believes," "anticipates," "expects" and words of similar import, constitute "forward looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, including our ability to create, sustain, manage or forecast our growth; our ability to attract and retain key personnel; changes in our business strategy or development plans; competition; business disruptions; adverse publicity; and international, national and local general economic and market conditions.





GENERAL





ProGreen Properties, Inc., formerly Diversified Product Inspections, Inc. (“we”, “us”, or the “Company”) was incorporated in Florida on April 23, 1998 and reincorporated in Delaware on December 12, 2008. Effective September 11, 2009, we changed our name from Diversified Product Inspections, Inc. to ProGreen Properties, Inc. to reflect the change in our business operations from the conduct of investigations and laboratory analyses to the purchase of income producing real estate assets.





The Company maintained its conduct of investigations and laboratory analyses operations as described below until the April 30, 2009 closing of a Settlement and Asset Purchase Agreement (the “Agreement”). The purchase of a condominium unit initiated our planned new business operations directed at purchasing income-producing residential real estate apartment homes, condominiums and houses in the State of Michigan, where we believe favorable investment opportunities exist based on current market conditions.





On April 30, 2009 we ceased operations and closed the Agreement pursuant to which $230,000 was paid to a plaintiff to settle material litigation, and our remaining assets and liabilities were transferred to a separate entity owned by the previous executive officers of the Company. Prior to the closing of the Agreement, the Company specialized in conducting investigations and laboratory analysis of a wide variety of products to determine the cause and origin of product failures. The Company is now controlled by the former plaintiffs in the now settled litigation.  We were inactive from April 30, 2009 through July 28, 2009 when we acquired a condominium unit in suburban Detroit, Michigan.





OUR BUSINESS























FINANCIAL CONDITION
















10




Rental property


Rental properties increased to approximately $307,700 as of April 30, 2011 up $209,200, from $98,500 as of April 30, 2010.  As of April 30, 2011, the Company has entered into leases on six renovated properties.  Lease terms range from twelve to twenty-four months with lease payments ranging from $875 - $1,300 per month.




Properties under development


Properties under development increased to approximately $175,700 as of April 30, 2011 up from $104,500 as of April 30, 2010.  Two properties were recently completed and are available for sale or lease, and one property is still undergoing renovation.





Cash


Cash decreased approximately $59,000 for the year ended April 30, 2011.   The Company invested approximately $479,000 in properties and expended approximately $510,000 to fund operations.  The Company received proceeds of $126,000 from sales of properties and $809,000 from settlement of the subscription receivable from EIG Venture Capital, a related party.





Note receivable


The Company sold one property on land contract in the year ended April 30, 2011.  The remaining balance of the note receivable was approximately $76,200 as of April 30, 2011.





RESULTS OF OPERATIONS





Year Ended April 30, 2011 Compared to Year Ended April 30, 2010












11




LIQUIDITY













In the coming year, management expects to satisfy liquidity needs of the Company through sale of renovated condominiums and purchase of remaining shares under the subscription agreement described above.  With our planned purchases of larger apartment complex properties, we estimate that we will require investment partners to provide financing in the range of $5 million to $25 million over the next 12 months.




At April 30, 2011, we had total assets of $766,794, compared to $1,289,696 at April 30, 2010. The decrease in total assets was largely due to net operating losses in the current year.  In the current year, the Company utilized the proceeds of the $500,000 Secured Convertible Debenture, to purchase, refurbish and upgrade residential real estate in Michigan, and properties purchased securing the Debenture. In addition in the year ended April 30, 2011, we received proceeds of approximately $809,000 from a stock subscription receivable with a related party. At April 30, 2011, we had stockholders’ equity of $206,943. In the year ended April 30, 2011, cash of $478,873 was used for the purchase of rental property and $509,846 was used to in operating activities.  The Company received proceeds of $125,500 from sales of refurbished properties in the year ended April 30, 2011.





Critical Accounting Policies





The summary of critical accounting policies below should be read in conjunction with the Company’s accounting policies included in Note 1 to the financial statements of the Company. We consider the following accounting policies to be the most critical:





Property sales revenue recognition - Condominium sales revenue and related profit are generally recognized at the time of the closing of the sale, when title to and possession of the property are transferred to the buyer. In situations where the buyer's financing is provided by the Company and the buyer has not made an adequate initial or continuing investment as required by ASC 360-20, "Property, Plant, and Equipment - Real Estate Sales" ("ASC 360-20"), the profit on such sales is deferred or recognized under the installment method, unless there is a loss on the sale in which case the loss on such sale would be recognized at the time of closing.





12






Rental Revenue Recognition - Rental income is recognized on a straight-line basis over the term of each lease.





Rental Property and Real Estate Costs - Our property is recorded at cost and depreciation is computed using the straight-line method over the estimated useful lives of the assets. We charge repairs and maintenance to expense as it is incurred.





Estimates - The preparation of financial statements required us to make estimates and judgments that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported periods. We based our estimates and judgments on historical experience and on various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. There can be no assurances that actual results will not differ from those estimates. On an ongoing basis, we will evaluate our accounting policies and disclosure practices as necessary.





Item 7A. Quantitative and Qualitative Disclosures About Market Risk.





Not applicable.


13


Item 8. Financial Statements and Supplementary Data.





PROGREEN PROPERTIES, INC.


CONSOLIDATED FINANCIAL STATEMENTS


April 30, 2011 and 2010





14




PROGREEN PROPERTIES, INC.





INDEX TO CONSOLIDATED FINANCIAL STATEMENTS





PageConsolidated Financial StatementsReport of Independent Registered Public Accounting Firm
16Consolidated Balance Sheets as of April 30, 2011 and 2010
18Consolidated Statements of Operations for the Years Ended April 30, 2011 and  2010
19Consolidated Statements of Stockholders’ Equity for the period May 1, 2009 through April 30, 2011
20Consolidated Statements of Cash Flows for the Year Ended April 30, 2011 and 2010
21Notes to Consolidated Financial Statements
22





15




REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM








To the Shareholders and Board of Directors


ProGreen Properties, Inc.


Birmingham, MI





We have audited the accompanying consolidated balance sheet of ProGreen Properties, Inc. (the "Company") as of April 30, 2011, and the related consolidated statements of operations, owners' equity and cash flows for the year then ended.  These consolidated financial statements are the responsibility of the company's management.  Our responsibility is to express an opinion on these consolidated financial statements based on our audit.  The consolidated financial statements of ProGreen Properties, Inc. as of April 30, 2010, were audited by other auditors whose report dated July 28, 2010, expressed an unqualified opinion on those financial statements.





We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement.  The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.  Our audit included a consideration of the Company's internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting.  Accordingly, we express no such opinion.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management as well as evaluating the overall consolidated financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.





In our opinion, the April 30, 2011 consolidated financial statements referred to above present fairly, in all material respects, the financial position of ProGreen Properties, Inc. as of April 30, 2011, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.





The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 10 to the financial statements, the Company has suffered recurring losses from operations and has insufficient liquidity that raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 10. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.










/s/ Baker Tilly Virchow Krause, LLP





Southfield, MI


July 29, 2011


16





REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM





Board of Directors and Stockholders ProGreen Properties, Inc.





We have audited the accompanying consolidated balance sheets of ProGreen Properties, Inc. (the "Company") as of April 30, 2010 and 2009, and the related consolidated statements of operations, stockholders' equity, and cash flows for the year ended April 30, 2010, the four month period ended April 30, 2009, and the year ended December 31, 2008. The Company's management is responsible for these consolidated financial statements. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.





We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.





In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of ProGreen Properties, Inc. as of April 30, 2010 and 2009, and the results of its operations and its cash flows for the year ended April 30, 2010, the four month period ended April 30, 2009, and the year ended December 31, 2008 in conformity with accounting principles generally accepted in the United States of America.





/s/ Coulter & Justus, PC


Knoxville, TN


July 28, 2010


17


ProGreen Properties, Inc.,Consolidated Balance SheetsApril 30,


April 30,2011


2010AssetsRental property, net of accumulated depreciation of $5,801 and $1,617

$
307,653


$
98,512Properties under development


175,688



104,508Cash


157,707



216,669Commissions receivable


-



1,375Note receivable


76,157



-Prepaid expenses


15,942



7,673Deposits


6,000



48,350Amount due from related party subscriber under subscription receivable


-



807,310Property and equipment:Vehicles, equipment, furniture and fixtures, net of accumulateddepreciation of $1,193 and $48


27,647



5,299Total assets

$
766,794


$
1,289,696Liabilities and Stockholders' EquityAccounts payable and accrued expenses

$
41,448


$
88,974Accrued interest


32,548



32,548Note payable


18,999



-Deferred revenue


1,300



3,000Tenant deposits


9,262



2,850Convertible debenture payable to related party (net of unamortizeddiscount of $43,706 and $86,706)


456,294



413,294Total liabilities


559,851



540,666Stockholders' equityPreferred stock, $.0001 par value, 10,000,000 shares authorized,no shares issued and outstanding


-



-Common stock, $.0001 par value, 250,000,000 authorized and103,929,703 outstanding at April 30, 2011; 250,000,000 sharesauthorized and 24,898,677 outstanding at April 30, 2010


10,393



2,490Common stock, $.0001 par value, 9,775,171 and 86,999,022subscribed not issued


978



8,700Additional paid in capital


2,986,358



2,856,944Less:  amount due from related party subscriber undersubscription agreement


(110,653
)


(100,000
)Accumulated deficit


(2,680,133
)


(2,019,104
)Total stockholders' equity


206,943



749,030Total liabilities and stockholders' equity

$
766,794


$
1,289,696










18





ProGreen Properties, Inc.





Consolidated Statements of Operations





Year


YearEnded


EndedApril 30,


April 30,2011


2010Revenues:Condominium sales

$
202,000


$
---Rental revenue


31,363



6,343Commissions revenue


19,700



1,375Total revenue


253,063



7,718Expenses:Cost of condominium sale


194,369



---Rental property operating costs


38,701



7,749Professional and consulting fees


230,740



179,377Advertising


85,513



2,188General and administrative


233,311



26,855Depreciation


5,329



1,665Total operating expenses


787,963



217,834Other income (expense):Interest expense - related party


(110,500
)


(50,842
)Interest expense – note payable


(113
)


---Interest income


4,583



---Other expenses


(20,099
)


(12,322
)Loss from before income tax


(661,029
)


(273,280
)Deferred income taxes


---



---Net loss

$
(661,029
)

$
(273,280
)Net loss per share - basic

$
(0.01
)

$
(0.01
)Weighted shares outstanding - basic


93,955,262



21,673,210Net loss per share - diluted

$
(0.01
)

$
(0.01
)Weighted shares outstanding - diluted


112,801,256



90,438,458







See accompanying Notes to Consolidated Financial Statements.


19


ProGreen Properties, Inc.





Consolidated Statements of Stockholders' Equity





Number of











AmountShares





Common


Additional


Due Under





NetIssued and


Common


Stock


Paid In


Subscription


Accumulated


Stockholders'Outstanding


Stock


Subscribed


Capital


Agreement


Deficit


EquityBalance at May 1, 2009


13,645,990


$
1,365


$
-


$
1,744,459


$
-


$
(1,745,824
)

$
-Stock issued under subscription agreement


10,752,687



1,075



-



108,925



-



-



110,000Stock issued in connection with debenture agreement


500,000



50



-



29,950



-



-



30,000Stock available under debenture conversion option


-



-



-



75,000



-



-



75,000Stock due under subscription agreement


-



-



8,700



898,610



-



-



907,310Amount due from subscriber under subscription agmt


-



-



-



-



(100,000
)


-



(100,000
)Net loss


-



-



-



-



-



(273,280
)


(273,280
)Balance at April 30, 2010


24,898,677



2,490



8,700



2,856,944



(100,000
)


(2,019,104
)


749,030Stock issued under subscription agreement


77,223,851



7,722



(7.722)



1,442



-



-



1,442Stock issued under City Vac agreement


1,000,000



100



-



49,900



-



-



50,000Amount due from subscriber


-



-



-



10,653



(10.653)



-



-Stock issued  for debenture interest


807,175



81



-



67,419



-



-



67,500Net loss


-



-



-



-



-



(661,029
)


(661,029
)Balance at April 30, 2011


103,929,703


$
10,393


$
978


$
2,986,358


$
(110,653
)

$
(2,680,133
)

$
206,943




















See accompanying Notes to Consolidated Financial Statements.





20




ProGreen Properties, Inc.


Consolidated Statements of Cash Flows





YEAR


YEARENDED


ENDEDApril 30,


April 30,2011


2010Cash used in operating activitiesNet loss

$
(661,029
)

$
(273,280
)Adjustments to reconcile loss to net cash used in operating activities:Depreciation and amortization


5,329



1,665G Gain on sale of properties


(7,631)



-Amortization of discounts on debentures to related party


43,000



18,294Interest expense on debenture paid to related party


67,500



-Investor relations expense


40,000



-Deferred income tax expense


-



-Changes in operating assets and liabilities:Commissions receivable


1,375



(1,375
)Note receivable


343



-Prepaid expenses


1,731



(7,673
)Deposits


42,350



(48,350
)Accounts payable & accrued expenses


(42,814)



127,372Accrual for settlement of lawsuit


-



-Deferred revenue


-



-Cash used in operating activities


(509,846
)


(183,347
)Cash used in investing activitiesPurchase of rental property


(478,873
)


(204,637
)Proceeds from sales of properties


125,500



-Purchase of property and equipment


(23,494
)


(5,347
)Cash used in investing activities


(376,867
)


(209,984
)Cash provided by financing activitiesProceeds from common stock through subscription receivable with related parties


808,752



110,000Proceeds from note payable


18,999



-Proceeds from debenture issued to related party


-



500,000Cash provided by financing activities


827,751



610,000Net change in cash


(58,962
)


216,669Cash at beginning of period


216,669



-Cash at end of period

$
157,707


$
216,669Supplemental information:Cash paid during the year for:Interest paid

$
113


$
-Income taxes paid

$
-


$
-Non-cash transactions:Issuance of stock as commitment fee to related party

$
-


$
30,000Issuance of stock in payment of debenture interest to related party

$
67,500


$
-Issuance of stock in payment of investor relations services

$
50,000


$
-





See accompanying Notes to Consolidated Financial Statements.


21


PROGREEN PROPERTIES, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


APRIL 30, 2011





Note 1. Financial statement presentation





The summary of significant accounting policies is presented to assist in the understanding of the financial statements. The financial statements and notes are the representations of management. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the financial statements.





History and nature of business


ProGreen Properties, Inc., a Delaware corporation, and its wholly owned subsidiaries (collectively, the “Company”) own and manage residential real estate rental property in the Oakland County, Michigan area.




On April 30, 2009, the Company (formerly known as Diversified Product Inspections, Inc.) ceased previous operations and settled an outstanding lawsuit which resulted in a change of ownership and management.  Following the settlement on April 30, 2009, the Company had no assets, no liabilities, and had 13,645,990 shares of common stock outstanding.




On July 21, 2009, the Company formed ProGreen Properties, Inc. as a wholly-owned subsidiary and merged ProGreen Properties, Inc. into the Company, which was the surviving corporation in the merger.  In connection with the merger, the Company changed its name from Diversified Product Inspections, Inc. to ProGreen Properties, Inc.  The change of the Company’s name to ProGreen Properties, Inc. became effective on September 11, 2009 with approval by the Financial Industry Regulatory Authority as effective for trading purposes in the OTC Bulletin Board market under the new symbol PGEI.




In December 2009, ProGreen Realty LLC (“ProGreen Realty”) was formed as a wholly owned subsidiary of the Company. ProGreen Realty is the real estate broker for the Company and will facilitate the acquisition of real properties. All assets, liabilities, revenues and expenses are included in the financial statements of the Company.




In addition to ProGreen Realty, the Company has established separate LLC’s for each of the nine properties owned. The Company is the sole member of each LLC.





SIGNIFICANT ACCOUNTING POLICIES





Basis of consolidation


The consolidated financial statements include the accounts and records of the Company and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated.  FASB Accounting Standards Codification (“ASC”) Topic 810, “Consolidation,” requires a company’s consolidated financial statements to include subsidiaries in which the company has a controlling financial interest.  This requirement usually has been applied to subsidiaries in which a company has a majority voting interest.  Currently, all of the Company’s subsidiaries are wholly-owned.




Estimates


The preparation of financial statements in conformity with the accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Actual results could differ from those estimates.





Property and real estate costs


Property and real estate costs are recorded at cost from expenditures relating to the acquisition, development, construction, and other costs that enhance the value or extend the life of rental properties are capitalized using the specific identification method is used to accumulate costs.   All other expenditures necessary to maintain the properties are expensed as incurred.





Depreciation is computed using the straight-line method over the estimated useful life of the property, as follows:





Lives

MethodCondominium

27.5 years

Straight lineFurniture

10 years

Straight lineEquipment

5 years

Straight lineVehicles

5 years

Straight line





Note receivable


The note receivable is carried at amortized cost.  Interest income on the note receivable is recognized on the accrual basis based on the principal balance outstanding.


22






PROGREEN PROPERTIES, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


APRIL 30, 2011





Note 1.Significant Accounting Policies (Cont.)





Property sales revenue recognition


Condominium sales revenue and related profit are generally recognized at the time of the closing of the sale, when title to and possession of the property are transferred to the buyer. In situations where the buyer's financing is provided by the Company and the buyer has not made an adequate initial or continuing investment as required by ASC 360-20, "Property, Plant, and Equipment - Real Estate Sales" ("ASC 360-20"), the profit on such sales is deferred or recognized under the installment method, unless there is a loss on the sale in which case the loss on such sale would be recognized at the time of closing. There were no such deferred amounts at either April 30, 2011 or 2010.





Rental revenue recognition


Real estate properties are leased under operating leases with terms of twelve to twenty –four months. Rental income from these leases is recognized on a straight-line basis over the term of each lease.





Advertising costs


Advertising costs are expensed as incurred. Total advertising expenditures for the years ended April 30, 2011 and 2010 and four months ended April 30, 2009 was approximately $85,500, $2,200 and $2,400, respectively.





Tenant deposits


The Company requires tenants to pay a deposit at the beginning of each lease. This deposit may be used for unpaid lease obligations or repair of damages based on the Company’s determination. If the tenant has not defaulted on the lease, the Company will return the deposit to the tenant at the end of the lease.





Deferred revenue


The Company may require tenants to prepay rent. The prepaid rent is amortized over the term of the lease using the straight-line method.





Income taxes


The Company accounts for income taxes using an asset and liability approach under which deferred income taxes are recognized by applying enacted tax rates applicable to future years to the differences between the financial statement carrying amounts and the tax bases of reported assets and liabilities.





Reclassifications


Certain amounts in previous periods have been reclassified to conform to 2011 classifications.





Recent Accounting Pronouncements


In April 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2011-02 “Receivables (Topic 310) – A Creditor’s Determination of Whether a Restructuring is a Troubled Debt Restructuring.”  The troubled debt restructuring (TDR) guidance clarifies whether loan modifications constitute TDRs, include factors and examples for creditors to consider in evaluating whether a restructuring results in a delay in payment that is insignificant, prohibit creditors from using the borrower's effective rate test to evaluate whether a concession has been granted to the borrower, and add factors for creditors to use in determining whether a borrower is experiencing financial difficulties.  A provision in the guidance also ends the FASB's deferral of the additional disclosures about TDRs.  The provisions of this guidance are effective for the first interim and annual period beginning on or after June 15, 2011, and should be applied retrospectively to the beginning of the annual period of adoption. The adoption of the guidance is not expected to have a material impact on the Company's Consolidated Financial Statements or the Notes thereto.





In June 2011, the FASB issued ASU No. 2011-05, “Presentation of Comprehensive Income.” The guidance improves the comparability of financial reporting and facilitates the convergence of U.S. GAAP and IFRS be amending the guidance in ASC 220, Comprehensive Income.  Under the amended guidance, an entity has the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In both choices, the entity is required to present on the face of the financial statements reclassification adjustments for items that are reclassified from other comprehensive income to net income in the statement(s) where the components of net income and the components of other comprehensive income are presented. This guidance is effective retrospectively for annual and interim periods beginning after December 15, 2011.  The adoption of the guidance is not expected to have a material impact on the Company's Consolidated Financial Statements or the Notes thereto.





23




PROGREEN PROPERTIES, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


APRIL 30, 2011





Note 2. Property and Equipment


Major classifications of property and equipment at April 30, 2011 and 2010 are summarized as follows:





The Company owned nine and four condominiums as of April 30, 2011 and 2010, respectively.





2011


2010Condominiums – rental properties

$
313,454


$
100,129Less: accumulated depreciation


( 5,801
)


(1,617
)Rental properties, net of accumulated depreciation

$
307,653


$
98,512Properties under development

$
175,688


$
104,508





2011


2010Vehicles

$
22,350


$
-Furniture


3,563



3,310Office equipment


2,927



2,037Total vehicles and equipment


28,840



5,347Less: accumulated depreciation


(1,193
)


( 48
)Net carrying amount

$
27,647


$
5,299








Note 3. Residential Leases


As of April 30, 2011, the Company has entered into leases on six renovated properties.  Lease terms range from twelve to twenty-four months with lease payments ranging from $875 - $1,300 per month.  Below are the future minimum rental payments related to these leases are as follows:


Year ended

RentalApril 30,

Amount2012

$
59,8502013


14,425$
74,275


24


PROGREEN PROPERTIES, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


APRIL 30, 2011





Note 4. Related Party Secured Convertible Debenture Agreement


On November 5, 2009, the Company issued a Secured Convertible Debenture to Rupes Futura AB (“RF”), an investment company controlled by Henrik Sellmann, a director of the Company, providing for a loan to the Company of $500,000. The Company issued to RF a 13.5% Secured Convertible Debenture, due November 2014 (the “Debenture”), together with 500,000 shares of Common Stock of the Company as a Commitment Fee. The value of the Common Stock at the time of issuance was $30,000 and is recorded as debt discount. The Commitment Fee will be amortized over five years, the term of the Debenture, using the effective interest method. The proceeds of the sale of this Debenture and other Debentures in this series, the terms of which are described below, will primarily be used for the purchase, refurbishment and upgrade of residential real estate in Michigan.





The Debenture is secured by a first lien on the property to be purchased by ProGreen Realty. Interest is payable at an annual rate of 13.5%, payable annually in arrears in shares of Common Stock of the Company, valued at the Conversion Price (defined below) as of the due date of the interest payment. The Debenture may be prepaid at any time after two years from the Closing Date, without penalty, by the Company. Any accrued unpaid interest due at such time will be paid in shares of Common Stock valued at the Conversion Price as of the date of the prepayment. RF has the right to choose to convert the Debenture in lieu of cash prepayment.





The Debenture is convertible in whole or in part into Common Stock at the option of RF at the Conversion Price at any time following the date that is two years from the Closing Date. If RF elects to convert any unpaid principal amount of the Debenture it shall be entitled to receive shares of Common Stock on conversion equal in value, at the Conversion Price, to 115% of the unpaid principal amount of the Debenture. The conversion price ("Conversion Price") of the Debenture is the price equal to the average closing price (the mean average between bid and ask price) of the Common Stock during the period of twenty (20) consecutive Trading Days, ending on the Trading Day immediately prior to the due date of the interest payment, the prepayment date, or the date of RF’s giving the conversion notice, as the case may be, subject to equitable adjustment for any stock splits, stock dividends, reclassifications or similar events during such period. The conversion feature has intrinsic value of $75,000 that is recorded as debt discount and amortized over two years, the required holding period for RF, using the effective interest method. The effective interest rate on the Debenture as a result of the debt discounts noted above was 25.41% and 26.09%, which resulted in interest expense of $110,500 and $50,842 for 2011 and 2010, respectively.








Note 5. Related Party Subscription Agreement


On July 21, 2009, the Company entered into a Subscription Agreement with EIG Venture Capital, Ltd. (“EIG”), an investment company controlled by Jan Telander, the Company’s Chief Executive Officer and controlling stockholder for the sale by the Company to EIG of an aggregate of 97,751,710 shares of the Company’s Common Stock, par value $0.0001 per share (the “Common Stock”), at a fixed price of $0.01023 per share, in three tranches.  The Phase I tranche consisted of 5,767,350 shares of Common Stock for a total purchase price of $59,000, to be purchased by EIG on or before July 16, 2009.  The Phase II tranche consists of 43,108,504 shares of Common Stock for a total purchase price of $441,000, to be purchased by EIG on or before December 31, 2009; and the Phase III tranche consists of 48,875,855 shares of Common Stock for a total purchase price of $500,000, to be purchased by EIG on or before July 16, 2010. The shares comprising each of the tranches in Phases I through III may be purchased in one or more installments by the EIG; provided, that the number of shares required to be purchased in each tranche is purchased in its entirety by the final purchase date specified for the entire tranche.




On December 1, 2009, the Company entered into an Amendment to the Subscription Agreement with EIG. The amendment provides that, in the event EIG does not complete payment of the full Phase II or Phase III purchase price for the shares of Common Stock required to be purchased within the time period provided in the Agreement for the particular Phase, as an additional purchase price for the shares to be purchased in that particular Phase, EIG shall pay a penalty interest rate of 13.5% per annum on the unpaid balance as of the final purchase date from that date to the date the shares are purchased.




As of April 30, 2011 all of the Phase I and Phase II shares have been purchased and 39,100,684 shares of the Phase III tranche.




On June 1, 2010, the Company received $400,000 of the Phase III tranche and issued 39,100,684 shares to EIG. As of July 22, 2011, the remainder of Phase III and interest has not been paid.  These amounts are reflected as amount due from related party subscriber under subscription receivable in the accompanying balance sheet. The remaining balance of $100,000 had not been received prior to the issuance of the financial statements and has been included in stockholders’ equity as amount due from subscriber under subscription agreement.




25




PROGREEN PROPERTIES, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


APRIL 30, 2011





Note 6. Corporate Lease Agreement


On March 24, 2010, the Company entered into a lease agreement for office space for a period of sixty-six (66) months. The Company does not have a lease payment for the first 9 months of the lease agreement, and subsequent payments are as follows:





Year ended

RentalApril 30,

Amount2012

$
28,4402013


28,6912014


28,7142015


28,9652016


12,069$
126,880





In addition to the base monthly rent the Company is responsible for a pro-rata share of operating expenses and real estate taxes as determined by the lessor. At the beginning of the lease the Company paid a security deposit of $5,000, which is reflected as deposits on the April 30, 2011 balance sheet.





During 2011 and 2010, the Company recorded $24,145 and $2,012, respectively, in rental expense as a result of the lease.





Note 7. Income Taxes


For tax purposes the Company has federal net operating loss (“NOL”) carryovers of $838,000 that are available to offset future taxable income. These NOL carryovers expire in the years 2030 and 2031. As a result of the Company’s reorganization, as further described in Note 1, the NOL carryovers generated prior to the reorganization are limited by Section 382 of the Internal Revenue Code resulting in no NOL carryover for the years prior to reorganization. Deferred income taxes reflect the net tax effects of the temporary differences between the carrying amounts of the assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.





Significant components of the Company’s deferred tax assets and liabilities are as follows:





April 30,


April 30,2011


2010Deferred tax assets:NOL carryovers

$
125,678


$
35,627Deferred revenue


195



450Accrued interest


4,882



4,882Discount on debenture


6,556



-Total deferred tax assets


137,311



40,959Valuation allowance


(137,311
)


(40,959
)Net deferred tax assets

$
-


$
-





The Company periodically assesses whether it is more likely than not that it will generate sufficient taxable income to reduce the deferred tax assets. The ultimate realization of these assets is dependent upon generation of future taxable income sufficient to offset the related deductions and NOL carryovers within the applicable carryover periods as previously discussed. Management is unsure of the Company’s ability to generate sufficient taxable income to realize the deferred tax assets. As such, the Company has recorded a valuation allowance for the entire net deferred tax asset.


26




PROGREEN PROPERTIES, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


APRIL 30, 2011





Note 7. Income Taxes (Cont.)





The reconciliation of income tax expense attributable to continuing operations computed at the U.S. federal statutory tax rates is the income tax expense recorded is as follows:





Year


Yearended


endedApril 30,


April 30,2011


2010Income tax at U.S. statutory rates

$
(99,154
)

$
(40,992
)Effect of permanent differences


228



33Settlement agreement permanent differences


-



-(Decrease) increase in valuation allowance


96,352



(206,668
)Effect of limitation on federal NOL carryovers


-



109,247Effect of change in statutory rate estimate


-



138,380Other


2,574



-Income tax expense

$
-


$
-





The effective rate used for estimation of deferred taxes changed from 34% for the four month period ended April 30, 2009 to 15% for the years ended April 30, 2011 and 2010. The change in the effective rate is based on management’s anticipated scope of future operations and plans for future generation of taxable income as described more fully in Note 10.





The tax years that remain subject to U.S. IRS examination at April 30, 2011 are 2006 through 2011.  The Company’s policy is to classify penalties and interest associated with uncertain tax positions, if required, as a component of its income tax provisions.





Note 8. Earnings (loss) per Share


Basic earnings (loss) per share assumes no dilution and is computed by dividing net income available to common stockholders by the weighted average number of common stock outstanding during each period. Diluted earnings per share reflects, in periods in which they have a dilutive effect, the effect of common shares issuable upon the exercise of stock options or warrants, using the treasury stock method of computing such effects and contingent shares, or conversion of convertible debt.





Earnings (loss) per share have been computed based on the following:





Twelve months



Twelve monthsended



endedApril 30, 2011



April 30, 2010Net loss

$
(661,029
)

$
(273,280
)Average number of common shares outstanding used to calculate basic loss per share


93,955,262



21,673,210Effect of dilutive subscribed shares


18,845,994



68,765,248Average number of common shares outstanding used to calculate diluted earnings per share


112,801,256



90,438,458







Note 9. Note Payable


The Company has a note payable of $18,999 outstanding as of April 30, 2011, which bears a fixed rate of interest of 6.99% and provides for monthly payments of $463.26 through March 2015.


27






PROGREEN PROPERTIES, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


APRIL 30, 2011





Note 10. Going Concern


The Company’s financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As described in Note 1, on April 30, 2009, the Company disposed of its then existing operating business.  The Company made acquisitions of residential property and has entered into four leases with tenants to occupy four of those properties.  Also, as more fully discussed in Note 5, the Company issued a $500,000 Secured Debenture the proceeds of which will primarily be used for the purchase, refurbishment and upgrade of revenue producing residential real estate.




The Company’s primary plan and objective going forward is to acquire additional revenue producing property to generate rental cash flow and, over time, sell the properties to realize capital appreciation in order to increase profits and provide shareholdervalue.  There is no assurance that the Company will acquire favorable business opportunities through such transactions.  In addition, there is no assurance that these business opportunities will generate revenues or profits, or that the market price of the Company’s common stock will be increased thereby.




The Company will continue to incur costs that are necessary for it to remain an active public company.  In the current fiscal year, the Company used approximately $509,000 of cash to support its operations and such cash needs are expected to continue in the upcoming year.  As of April 30, 2011, the Company has approximately $157,000 in cash and approximately $110,700 due from a related party under the stock subscription agreement, which provide liquidity.  Further, seven of the nine properties are listed for sale, and management expects the proceeds to provide liquidity for operations and reinvestment in the business.  However, there is no assurance that the Company will be able to sell to properties to provide liquidity or to secure additional financing.




The financial statements do not include any adjustments relating to the recoverability of assets and the classification of liabilities that might be necessary should the Company be unable to continue as a going concern.





Note 11. Commitments


The Company has no pending offers to purchase additional properties as of April 30, 2011.







Note 12. Amendments to Certificate of Incorporation





Increase in Authorized Common Stock





On July 8, 2009, the Company filed a Certificate of Amendment to its Certificate of Incorporation increasing the number of authorized shares of common stock from 50,000,000, par value $.01 per share to 250,000,000, par value $.0001 per share.  Such amendments were approved by our majority stockholder and detailed in an Information Statement mailed to stockholders.





Authorization of New Class of 10,000,000 shares of Preferred Stock





The amendments to the Company’s Certificate of Incorporation that were so approved also authorize a new class of 10,000,000 shares of preferred stock, par value $0.0001 per share, and authorizes the Board of Directors to issue one or more series of the preferred stock with such designations, rights, preferences, limitations and/or restrictions as it should determine by vote of a majority of such directors.





Note 13. Standby Equity Agreement


Effective August 25, 2010, the Company entered into a Standby Equity Purchase Agreement (the “SEP Agreement”), with LeadDog Capital LP (“LDC”), under which LDC agreed to provide an equity line of credit of up to $2,500,000 to purchase the Company’s common stock.  The funding will not take place until an agreed upon date in the future. Under the SEP Agreement, the Company will issue to LDC a commitment fee of 300,000 shares of its common stock, and has agreed to issue to an affiliate of LDC a structuring and due diligence fee of 100,000 shares of common stock. We amended the SEP Agreement as of March 1, 2011 so that it provides for the filing by the Company of a registration statement under the Securities Act of 1933, as amended, on or before September 1, 2011, subject to further extension by agreement of the parties, to register the common stock to be issued under the SEP Agreement.  We plan to include in such registration statement 24,000,000 shares of our common stock for this equity line financing.  Upon the terms and conditions set forth in the SEP Agreement, during its two year term, the Company may issue and sell (or “put”) to LDC, and LDC shall purchase from the Company, up to that number of shares of common stock having an aggregate purchase price of $6,000,000, the maximum amount that LDC is required to purchase pursuant to any one put notice under the SEP Agreement being $500,000. The purchase price for the shares purchased by LDC shall be equal to 92% of the market price, which is defined in the SEP Agreement to be equal to the lowest daily volume weighted average price of the Company’s common stock during the ten consecutive trading days after the date of the related put notice.


28




PROGREEN PROPERTIES, INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


APRIL 30, 2011





Note 14. Subsequent Events


The Company has reviewed its activity from the balance sheet date through July 29, 2011, and there have been no significant transactions, except for the following. The Company has entered into lease agreements on two additional condominium units, which begin on July 1, and September 1, 2011, respectively.  On May 17, 2011, the Company issued 400,000 shares to LDC and an affiliate of LDC as payment of the commitment fee and due diligence fee as discussed in Note 13.


29


Item 9. Changes In and Disagreements With Accountants on Accounting and Financial Disclosure.





(a) On August 27, 2010, the Board of Directors of the Company approved the appointment of Baker Tilly Virchow Krause, LLP as the Registrant's independent registered public accounting firm for the fiscal year ending April 30, 2011, and accepted the resignation of Coulter & Justus, P.C. From the date that Coulter & Justus, P.C. were engaged (July 10, 2001) to the present time, or any other period of time, the reports of Coulter & Justus, P.C. (1) as to the Company's financial statements for the year ended April 30, 2009, were modified for uncertainty due to the substantial doubt about the Company’s ability to continue as a going concern, and (2) did not contain an adverse opinion or disclaimer of opinion, or were qualified or modified as to audit scope or accounting principles.





During the Company's two most recent fiscal years endedApril 30, 2010 and 2009, and any subsequent interim period from April 30, 2010 through August 27, 2010, there were no disagreements as defined in Item 304(a)(1)(iv) with Coulter & Justus, P.C. on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Coulter & Justus, P.C., would have caused it to make reference to the subject matter of the disagreement in connection with its reports. There were no reportable events as defined in Item 304(a)(1)(v) of Regulation S-K during the Company’s two most recent fiscal years ended April 30, 2010 and 2009, and any subsequent interim period though August 27, 2010.




(b) On August 27, 2010, the Company engaged Baker Tilly Virchow Krause, LLP as its independent registered public accounting firm. During the two most recent fiscal years and the interim periods preceding the engagement, the Company has not consulted Baker Tilly Virchow Krause, LLP regarding any of the matters set forth in Item 304(a)(2)(i) or (ii) of Regulation S-K.





Item 9A . Controls and Procedures.

























Item 9B. Other Information.





Not applicable.


30





PART III


Item 10. Directors, Executive Officers, and Corporate Governance.


The following table sets forth the names, positions and ages of our executive officers and directors, both as of as of July 22, 2011.


Name

Age

TitleJan Telander

61

Chief Executive Officer, Chief Financial Officer and DirectorHenrik Sellmann

56

Director





Set forth below is a brief description of the background of each of our executive officers and directors, based on the information provided to us by them.





Jan Telanderis the Company’s sole officer and a director. He has been the president of EIG Venture Capital Ltd (“EVC”) since 2001. EVC was founded by Mr. Telander and two other family members as a private investment company with an aim to purchase early stage companies and build these into larger entities with a view to seek exit through public listing on a suitable stock exchange. From 2001 until May 31, 2008, Mr. Telander was a member of the Board of Directors of Gas Turbine Efficiency, Inc., an EIG portfolio company.





Henrik Sellmann was appointed to our Board of Directors on July 26, 2010.  He founded Nordic Flanges AB (Stockholm, Sweden) in 1981 and sold the company in 2007, but stayed on as CEO until 2008. Mr. Sellmann is still a member of the Nordik Flanges board. Nordic Flanges is involved in trading and production of forged flanges with a global distribution. The Company believes that Mr. Sellman is a valuable addition to our Board of Directors due to his business background as the founder and chief executive of Nordic Flanges.





Corporate Governance





Directors are elected at the annual stockholder meeting or appointed by our Board of Directors and serve for one year or until their successors are elected and qualified. When a new director is appointed to fill a vacancy created by an increase in the number of directors, that director holds office until the next election of one or more directors by stockholders. Officers are appointed by our Board of Directors and their terms of office are at the discretion of our Board of Directors.





Committees of our Board of Directors





Audit Committee. Our Board of Directors plans to establish an Audit Committee, the members of which shall be considered as independent under the standards for independence for audit committee members established by the NYSE. The Audit Committee will operate under a written charter.





Other Committees. The Board does not have standing compensation or nominating committees. The Board does not believe a compensation or nominating committee is necessary based on the size of the Company, the current levels of compensation to corporate officers and the beneficial ownership by Jan Telander of in excess of 82% of the Company’s outstanding common stock. The Board will consider establishing compensation and nominating committees at the appropriate time.





Stockholder Communications


The Board has not established a formal process for stockholders to send communications, including director nominations, to the Board; however, the names of all directors are available to stockholders in this report. Any stockholder may send a communication to any member of the Board of Directors, in care of the Company, at 380 North Old Woodward Ave., Suite 226, Birmingham, MI 48009 (Attention: Secretary). Director nominations submitted by a stockholder will be considered by the full Board. Due to the infrequency of stockholder communications to the Board, the Board does not believe that a more formal process is necessary. However, the Board will consider, from time to time, whether adoption of a more formal process for such stockholder communications has become necessary or appropriate.





Other Information about our Board of Directors


During our fiscal year ended April 30, 2011, our Board of Directors met two times and acted by written consent three times.





We do not have a formal policy on attendance at meetings of our shareholders; however, we encourage all Board members to attend shareholder meetings that are held in conjunction with a meeting of our Board of Directors.


31


Section 16(a) Beneficial Ownership Reporting Compliance





Section 16(a) of the Exchange Act requires our director, executive officer and persons who beneficially own more than ten percent of our outstanding common stock to file reports with the SEC regarding initial statement of ownership, statement of changes of ownership and, where applicable, annual statement of ownership of our common stock. Such persons are required by SEC regulations to furnish us with copies of all such statements they file. For the fiscal year ended April 30, 2011, we believe that all required filings under Section 16(a) have been made by our officers and directors, except that Jan Telander was required to file a Form 4 on November 8, 2010, which was filed late on July 27, 2011.





Code of Ethics





We have adopted a Code of Ethics within the meaning of Item 406(b) of Regulation S-B of the Exchange Act. A copy of this Code may be obtained by requesting a copy in writing to the Company at 480 North Old Woodward Ave., Suite 226, Birmingham, MI 48009. This Code applies to our directors and executive officers, such as our principal executive officer, principal financial officer, controller, and persons performing similar functions for us.





Item 11. Executive Compensation.





Summary Compensation Table


The following table sets forth all compensation awarded to, earned by, or paid for all services rendered to the Company during fiscal years 2011, 2010, and 2009 by our Chief Executive Officer and any executive officer who received annual compensation in salary and bonus combined in excess of $100,000 during those years. Each person below is referred to as a named executive officer.





SUMMARY COMPENSATION TABLE





Name and

Principal

Position

(a)

Year

(b)

Salary

($)

(c)

Bonus

($)

(d)

Stock

Awards

($)

(e)

Option

Awards

($)

(f)

Non-Equity

Incentive

Plan

Compensa-tion

($)

(g)

Change in

Pension

Value and

Nonquali-

fied Deferred

Compensation

Earnings

($)

(h)

All

Other

Compen-

sation

(i)

Total

($)

(j)Jan Telander, CEO (1)

2011

$
31,424













$
31,4242010


-0-














-0-2009


-0-














-0-Jon VanZyll, CEO

2009

$
20,977













$
20,977





(1) Mr. Telander became Chief Executive Officer on April 30, 2009.





Stock Options Granted and Exercised in the Year Ended April 30, 2011





No stock option grants were made in the fiscal year ended April 30, 2011.





Director Compensation





Currently, our directors do not receive compensation for serving on our Board of Directors.





Employment Agreements





Neither the Company, nor any of our subsidiaries, have entered into an employment contract with a named executive officer. Furthermore, we do not, nor do any of our subsidiaries, anticipate entering into an employment contract with any named executive officer in the near future.





Employee Benefit Plans





We do not currently have any type of employee compensation plan for our employees, officers or directors. Furthermore, we do not anticipate offering any such plans in the near future.


32


Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.





The table below sets forth information regarding the beneficial ownership of our common stock as of July 22, 2011 by the following individuals or groups:





•
each person or entity who we know beneficially owns more than 5.0% in the aggregate;





•
each of our named executive officers;





•
each of our directors; and





•
all directors and named executive officers as a group.





The percentage of beneficial ownership in the following table is based upon 104,329,703 shares of common stock outstanding as of July 22, 2011. Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. We do not have any outstanding options, warrants or other conversion rights.





Name of Beneficial Owner

Number of Shares

Beneficially Owned


Approximate

Percentage

of Class

OutstandingJan Telander (1)

380 North Old Woodward Ave., S. 226

Birmingham, MI 48009


85,830,318



82.27
%Henrik Sellmann (2)

380 North Old Woodward Ave., S. 226

Birmingham, MI 48009


2,660,852



2.55
%All officers and directors as a group


88,491,170



84.82
%





(1)
Mr. Jan Telander owns an aggregate of 85,830,318 shares beneficially, of which 151,200 are owned directly and 85,679,118 shares are owned indirectly through EIG Capital, Ltd., a controlled corporation. EIG Capital is the sole stockholder of EIG Venture Capital, Ltd., EIG Capital Investments, Ltd. and Sofcon, Ltd., which own directly 84,804,436, 497,197 and 377,485 shares of the Company's common stock, respectively.





(2)
Mr. Sellman owns 2,660,852 shares of common stock through a controlled company, Rupes Futura AB, including 500,000 shares issued as a commitment fee in connection with the purchase by that company of the Company’s $500,000 convertible debenture issued on November 5, 2009 and 807,175 shares issued as payment of interest on the convertible debenture. The convertible debenture, commencing two years after the date of issuance, is convertible into shares of our common stock based on the market prices of our common stock at the time of conversion.





Securities Authorized for Issuance Under Equity Compensation Plans





We do not currently have any type of equity compensation plan for our employees, officers or directors. Furthermore, we do not anticipate offering any such plans in the near future.





33




Item 13. Certain Relationships and Related Transactions, and Director Independence.




On July 21, 2009, the Company entered into a Subscription Agreement with EIG Venture Capital, Ltd. (“EIG”), an investment company controlled by Jan Telander, the Company’s Chief Executive Officer and controlling stockholder for the sale by the Company to EIG of an aggregate of 97,751,710 shares of the Company’s Common Stock, par value $0.0001 per share (the “Common Stock”), at a fixed price of $0.01023 per share, in three tranches.  The Phase I tranche consisted of 5,767,350 shares of Common Stock for a total purchase price of $59,000, to be purchased by EIG on or before July 16, 2009.  The Phase II tranche consists of 43,108,504 shares of Common Stock for a total purchase price of $441,000, to be purchased by EIG on or before December 31, 2009; and the Phase III tranche consists of 48,875,855 shares of Common Stock for a total purchase price of $500,000, to be purchased by EIG on or before July 16, 2010. The shares comprising each of the tranches in Phases I through III may be purchased in one or more installments by the EIG; provided, that the number of shares required to be purchased in each tranche is purchased in its entirety by the final purchase date specified for the entire tranche.




On December 1, 2009, the Company entered into an Amendment to the Subscription Agreement with EIG. The amendment provides that, in the event EIG does not complete payment of the full Phase II or Phase III purchase price for the shares of Common Stock required to be purchased within the time period provided in the Agreement for the particular Phase, as an additional purchase price for the shares to be purchased in that particular Phase, EIG shall pay a penalty interest rate of 13.5% per annum on the unpaid balance as of the final purchase date from that date to the date the shares are purchased.




As of April 30, 2011 all of the Phase I and Phase II shares have been purchased and 39,100,684 shares of the Phase III tranche.




On June 1, 2010, the Company received $400,000 of the Phase III tranche and issued 39,100,684 shares to EIG. As of July 22, 2011, the remainder of Phase III and interest has not been paid.  These amounts are reflected as amount due from related party subscriber under subscription receivable in the accompanying balance sheet. The remaining balance of $100,000 had not been received prior to the issuance of the financial statements and has been included in stockholders’ equity as amount due from subscriber under subscription agreement.




On November 5, 2009, the Company issued a Secured Convertible Debenture to Rupes Futura AB (“RF”), an investment company controlled by Henrik Sellmann, a director of the Company, providing for a loan to the Company of $500,000. The Company issued to RF a 13.5% Secured Convertible Debenture, due November 2014 (the “Debenture”), together with 500,000 shares of Common Stock of the Company as a Commitment Fee. The value of the Common Stock at the time of issuance was $30,000.





The Debenture is convertible in whole or in part into Common Stock at the option of RF at the applicable conversion price at any time following the date that is two years from the Closing Date. If RF elects to convert any unpaid principal amount of a Debenture it shall be entitled to receive shares of Common Stock on conversion equal in value, at the applicable conversion price, to 115% of the unpaid principal amount of the Debenture. The conversion price of the Debenture is the price equal to the average closing price (the mean average between bid and ask price) of the Common Stock during the period of twenty (20) consecutive Trading Days, ending on the Trading Day immediately prior to the due date of the interest payment, the prepayment date, or the date of RF’s giving the conversion notice, as the case may be, subject to equitable adjustment for any stock splits, stock dividends, reclassifications or similar events during such period.








Item 14. Principal Accountant Fees and Services





The following table presents fees accrued for audit services and other services provided by Baker TillyVirchow Krause, LLC for our fiscal year ended April 30, 2011, and for audit services and other services provided by Coulter & Justus, P.C. during the fiscal year ended April 30, 2011 and 2010.


2011


2010Audit Fees

$
48,743


$
74,569Audit-related Fees


-



-Tax Fees

$
13,750



8,600All Other Fees


-



-Total Fees

$
62,493


$
83,169





34





Audit Fees





Audit fees were for professional services rendered for the audit of our annual financial statements, the review of the financial statements, services in connection with our statutory and regulatory filings for fiscal 2011 and 2010.





Audit-Related Fees





Audit related fees were for assurance and related services rendered that are reasonably related to the audit and reviews of our financial statements for fiscal 2011 and 2010, exclusive of the fees disclosed as Audit Fees above. These fees include assistance with registration statements and consents not performed directly in connection with audits.





All Other Fees





We did not incur fees for any services, other than the fees disclosed above relating to audit, audit-related and tax services, rendered during fiscal 2011 and 2010.





Audit Services. Audit services include the annual financial statement audit and other procedures required to be performed by the independent auditor to be able to form an opinion on our financial statements.





Audit-Related Services. Audit-related services are assurance and related services that are reasonably related to the performance of the audit or review of our financial statements which historically have been provided to us by the independent auditor and are consistent with the SEC’s rules on auditor independence.





All Other Services. Other services are services provided by the independent auditor that do not fall within the established audit, audit-related and tax services categories.





35




Item 15. Exhibits and Financial Statement Schedules.


(a)(3) Exhibits





Exhibit No.

Description2.1

Share Exchange Agreement, dated March 6, 2001, by and between the Fairfax Group, Inc., a Florida corporation, and Diversified Product Inspections, Inc., a Florida corporation. (Incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K, filed with the Commission on March 6, 2001.)3.1

Certificate of Incorporation. (Incorporated by reference to Exhibit 3.1 to the Company’s Annual Report on Form 10-K, filed with the Commission on March 31, 2009.)3.1a

Amendment to Certificate of Incorporation, filed July 8, 2009. (Incorporated by reference to Exhibit 3.6 to the Company’s Current Report on Form 8-K/A, filed with the Commission on September 16, 2009.)3.1b

Certificate of Ownership merging the Company’s wholly-owned subsidiary, Progreen Properties, Inc., into the Company, effective September 11, 2009. (Incorporated by reference to Exhibit 3.7 to the Company’s Current Report on Form 8-K, filed with the Commission on July 28, 2009.)3.1c

Restated Certificate of Incorporation of the Company. (Incorporated by reference to Exhibit 3.8 to the Company’s Current Report on Form 8-K/A, filed with the Commission on September 16, 2009.)3.2

By-Laws of the Company. (Incorporated by reference to Exhibit 3.1 to the Company’s Annual Report on Form 10-K, filed with the Commission on March 31, 2009.)3.3

Agreement and Plan of Merger, dated December 11, 2008, between the Company and Diversified Product Inspections, Inc., a Florida corporation. (Incorporated by reference to Exhibit 3.3 to the Company’s Annual Report on Form 10-K, filed with the Commission on March 31, 2009.)3.4

Articles of Merger of Diversified Product Inspections, Inc., a Florida corporation, with the Company, dated December 11, 2008, filed with the Florida Secretary of State. (Incorporated by reference to Exhibit 3.4 to the Company’s Annual Report on Form 10-K, filed with the Commission on March 31, 2009.)3.5

Certificate of Merger of Diversified Product Inspections, Inc., a Florida corporation, with the Company, dated December 11, 2008, filed with the Delaware Secretary of State. (Incorporated by reference to Exhibit 3.5 to the Company’s Annual Report on Form 10-K, filed with the Commission on March 31, 2009.)10.5

Settlement Agreement and Asset Purchase Agreement dated as of September 30, 2008 among Diversified Product Inspections, LLC, a Tennessee limited liability company, the Company, John Van Zyll, Ann Furlong, and Marvin Stacy, Sofcon, Limited, EIG Venture Capital, Limited, and EIG Capital Investments Limited, and the First and Second Amendments thereto. (Incorporated by reference to Annex A to the Company’s definitive proxy statement for its special meeting of shareholders held on March 26, 2009, filed on February 13, 2009.)10.6

Subscription Agreement, dated July 22, 2009, between the Company and EIG Venture Capital, Ltd. (Incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K, filed with the Commission on July 28, 2009.)10.6a

(Amendment No. 1, dated December 1, 2009, to Subscription Agreement, dated July 22, 2009, between the Company and EIG Venture Capital, Ltd. (Incorporated by reference to Exhibit 10.6a to the Company’s Current Report on Form 8-K, filed with the Commission on December 12, 2009.)


10.7

Form of Subscription Agreement for the Company's 13.5% Secured Convertible Debentures. (Incorporated by reference to Exhibit 10.7 to the Company’s Current Report on Form 8-K, filed with the Commission on November 10, 2009.)10.8

Form of the Company’s 13.5% Secured Convertible Debenture. (Incorporated by reference to Exhibit 10.8 to the Company’s Current Report on Form 8-K, filed with the Commission on November 10, 2009.)14.1

Code of Ethics. (Incorporated by reference to Exhibit 14.1 to the Company’s Annual Report on Form 10-KSB, filed with the Commission on March 31, 2006.)31

Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Section 302 of the Sarbanes Oxley Act of 2002, filed herewith.32

Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Oxley Act of 2002, filed herewith.


36


SIGNATURES





Pursuant to the requirements of Section 12(g) of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized, on April 30, 2011.





PROGREEN PROPERTIES, INCDate: July 29, 2011

By:
/s/ Jan TelanderJan Telander, Chief Executive Officer, Chief Financial

Officer, Chief Accounting Officer and Director





Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following person on behalf of the Registrant in the capacities indicated, on July 29, 2011.





/s/ Jan TelanderJan Telander, Chief Executive Officer, ChiefFinancial Officer and Director











By:
/s/ Henrik SellmanHenrik Sellman, Director