PROGREEN US : Management's Discussion and Analysis of Financial Condition and Results of Operations. (form 10-K)

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. 11 GENERAL Throughout this report, the terms "we," "us," "our," "ProGreen" and the "Company" refer to ProGreen US, Inc., a Delaware corporation and, unless the context indicates otherwise, includes our subsidiaries. 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 operations to the purchase of income producing properties and changed our name effective July 22, 2016 to Progreen US, Inc., to reflect initiation of development operations in Baja Mexico. OUR BUSINESS We have recently moved our offices from Oakland County, Michigan, to San Diego, California, proximate to our agricultural and development projects in Baja California, on which our current business operations are focused. The purchase of a condominium unit on July 28, 2009 initiated our real estate development operations directed at purchasing income-producing residential real estate apartment homes, condominiums and houses in the State of Michigan. Our business model in Michigan since our initial property purchases in 2009 was been to acquire, refurbish and upgrade existing properties into more environmentally sustainable, 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 was acquired, refurbished and rented, the property was put back on the market as a residential property, with a favorable environmental profile. On July 19, 2013, the Company entered into an Investment Agreement with AMREFA, which provided for 100% property acquisition and refurbishment financing by in the form of property loans, and that the properties would show a minimum initial return of 9.5% per annum and then be sold income producing investment properties, managed by ProGreen. Effective December 22, 2014 the Company entered into an interim operating agreement (the "Interim PAJV Operating Agreement") with American Residential GAP, LLC ("ARG" or "ARG LLC") to form PAJV LLC ("PAJV"), a Michigan limited liability company. American Residential Fastigheter AB ("AMREFA") is ARG's sole member. The Company and ARG each owned 50% of PAJV. There were no capital contributions. During the year ended April 30, 2015 the Company sold its remaining property under development in the amount of $73,688 to PAJV. The selling price was $75,000. Our agreement with AMREFA was restructured through a March 15, 2015, amendment to the Investment Agreement with AMREFA, superseding the December 2014 Interim PAJV Operating Agreement. The amendment provided for ARG LLC (the U.S. real estate subsidiary of AMREFA) to fund 100% of all financing requirements for real estate projects, which would be owned by specific joint ventures or ARG LLC, with Progreen handling everything from acquisition to sale and receiving a profit participation payment for a return on the property above 9.5%. Purchase of Investment Properties from AMREFA On March 8, 2016, the Company restructured its working arrangements with AMREFA through entry into a purchase agreement, amended March 16, 2016, with AMREFA for the purchase of a 100% interest in AMREFA's U.S. subsidiary, ARG, which holds real estate properties in Birmingham, Michigan, that were purchased by AMREFA and which the Company managed for AMREFA. The Company paid the purchase price of $1,285,000 by the issuance to AMREFA of 8,093,541 shares of a new Series B Preferred Stock. 12 Michigan As lease terms have expired, we are proceeding to liquidate our current real estate portfolio in Michigan by offering the properties with land contracts to buyers unable to obtain conventional financing. The goal of selling these properties is to focus on the agricultural and Cielo Mar project. During the year ended April 30, 2017 we sold four of our properties. We do not offer, and do not intend in the future to offer, managed properties as investment properties. Baja California Joint Venture Agreement We have expanded our real estate development operations to include Baja California, Mexico. On February 11, 2016, we signed a definitive agreement with Contel for Progreen to finance the first tract of land of approximately 300 acres which is being developed by Contel for agriculture use. Four wells have been drilled on the first tract, and the growing operation have commenced with a first produce purchase agreement for chile peppers - from Agricola Consuela, an exporter/importer to the U.S. market. In addition, we have formed the Procon joint venture subsidiary, which is the holding company for further non-agricultural land and real estate developments. On January 23, 2017, Procon entered into a definitive purchase agreement for, and has taken possession of, a large tract of land situated near the town of El Rosario in Baja California. The land, planned for residential real estate development, is bordering the Pacific Ocean and covers a total area of 2,016 ha (5,000 acres) with 7.5 km (4.5 miles) of ocean front. The transfer of deed for the 5,000-acre oceanfront property to Procon was completed on March 15, 2017, and a Master Plan for all of this land is being created for a very large resort-type retirement and vacation community with the name "Cielo Mar". The first phase of the development of the master plan is underway. FINANCIAL CONDITION At April 30, 2017, we had total assets of approximately $2,395,000 compared to total assets of approximately $ 1,796,000 at April 30, 2016. The increase in total assets was primarily due to: an increase in Cash of $99,000, Land under development increased $500,000 due to the Company's purchase of land though its Procon subsidiary, Accounts Receivable increased $15,000 due to Procon's AR and rental property rent due from tenants, Notes Receivable Land Contract increased approximately $158,000 due to the Company's issuance of land contracts to the buyers of two of the properties sold in the year ended April 30, 2017, Note Receivable-Related Party increased $581,000 as a result of the Company's additional investment in Contel. These increases in assets were partially offset by decreases in (i) Rental Properties of approximately $274,000, as a result of the sale of four properties in the year ended April 30, 2017, (ii) Sale of the Property under Development in the amount of $294,000 (iii) property of $9,000 due to depreciation and a decrease in Goodwill of $180,011. Cash increased to approximately $289,000 for the year ended April 30, 2017, compared to cash of $190,000 at April 30, 2016. Cash used in operating activities was approximately $617,000 in the year ended April 30, 2017, as compared with cash used in operating activities of approximately $364,000 in the year ended April 30, 2016. At April 30, 2017, we had stockholders' deficit of approximately $200,000 compared to a deficit of approximately $1,297,000 as of April 30, 2016. The increase in stockholders' deficit was due to; net operating losses of $1,478,000, tainting due to convertible debt and warrants of approximately $83,300, accretion of redeemable, convertible preferred stock, Series B of approximately $98,000 and dividend on redeemable, convertible preferred stock, Series B of approximately $109,000. These increases in the deficit were offset by; stock issued under convertible debenture of approximately $20,000, stock issued in settlement of accrued interest in the amount of approximately $50,700, Convertible preferred stock, Series A issued in settlement of liabilities in the amount of approximately $1,112,000, Convertible preferred stock, Series A issued for subscription receivable in the amount of approximately $200,000, Convertible preferred stock, Series A issued for cash from related party in the amount of approximately $100,000, Convertible preferred stock, Series B issued in settlement of liabilities in the amount of approximately of $1,354,000, compensation expense relating to RSUs of approximately $6,600 and common stock warrants issued under service contracts in the amount of approximately $16,500, capital contribution to the Procon subsidiary in the amount of approximately $2,000 and other comprehensive income in the amount of approximately $ 2,000 in the year ended April 30, 2017. 13 Costs incurred in the renovation of the properties that enhance the value or extend the life of the properties are capitalized. The Company also incurred professional fees in implementing its business plan and preparing to sell properties in the future. During 2016, the Company acquired thirteen rental properties in the amount of $1,007,000 and one property under development in the amount of $294,000. No costs to develop were incurred in fiscal 2017 or 2016. The Company owned ten and thirteen rental properties as of April 30, 2017 and 2016, respectively. The Company held no properties under development as of April 30, 2017 and one as of April 30, 2016. Going Concern The Company's financial statements for the year ended April 30, 2017, have been prepared on a going concern basis which contemplates the realization of assets and settlement of liabilities and commitments in the normal course of business. The Company has incurred losses from operations since its change of ownership, management and line of business on April 30, 2009. Management recognizes successful business operations and the Company's transition to attaining profitability are dependent upon obtaining additional financing and achieving a level of revenue adequate to support its cost structure. These conditions raise substantial doubt about its ability to continue as a going concern. The consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of uncertainties. While the Company is attempting to establish an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern, the Company's cash position may not be adequate to support the Company's daily operations. Management intends to raise additional funds by seeking equity and/or debt financing; however there can be no assurances that it will be successful in those efforts. The ability of the Company to continue as a going concern is dependent upon the Company's ability to obtain financing, further implement its business plan, and generate revenues. As it is the first year for the agriculture operation and with the Cielo Mar project under development, it is impossible to identify any trends in the Company's business prospects. Accordingly, there can be no assurance that we will be able to pay obligations which we may incur in the future. The Company's only sources of additional funds to meet continuing operating expenses, fund additional development and fund additional working capital are through the sale of securities and/or debt instruments. We are actively seeking additional debt or equity financing, but no assurances can be given that such financing will be obtained or what the terms thereof will be. The Company may need to discontinue a portion or all of our operations if the Company is unsuccessful in generating positive cash flow or financing for the Company's operations through the issuance of securities. Cash Cash increased approximately $99,000 for the year ended April 30, 2017. Cash used in operating activities was approximately $617,000 for the year ended April 30, 2017, as compared with cash used in operating activities of approximately $364,000 in fiscal 2016. During fiscal 2017, the Company loaned approximately $581,000 to Contel and made payments on the purchase of land in the amount of $50,000 in connection with Procon which were offset by proceeds from the sale of properties of approximately $369,000 and proceeds from notes receivable in the amount of approximately $1,000. The Company received: $100,000 in proceeds from Convertible preferred stock, Series A issued for cash from related party, $455,000 in proceeds from advances from a related party and $726,000 in proceeds from convertible debentures and repaid: $40,000 of notes payable to a related party, $127,000 of convertible debentures, approximately $40,000 on the line of credit, approximately $8,000 on obligations under capital leases and paid approximately $95,000 in dividends. 14 Rental properties and properties under development The Company owned ten and thirteen rental properties as of April 30, 2017 and 2016, respectively. Rental properties totaled $732,000 and $1,007,000 at April 30, 2017 and 2016, respectively. The Company held no and one properties under development as of April 30, 2017 and 2016, respectively. Properties under development totaled $0 and $294,000 at April 30, 2017 and 2016, respectively. Land under Development The Company owned land under development in the amount of $500,000 and $0 at April 30, 2017 and 2016, respectively. Business Combination On March 8, 2016, the Company restructured its working arrangements with AMREFA through entry into a purchase agreement, amended March 16, 2016, with AMREFA for the purchase of a 100% interest in AMREFA's U.S. subsidiary, ARG LLC (ARG), which holds real estate properties in Birmingham, Michigan, that were purchased by AMREFA and which the Company managed for AMREFA. The Company recorded Goodwill in the amount of $180,000 in connection with the purchase of ARG. Investment On February 11, 2016, the Company signed a definitive agreement with Inmobiliaria Contel S.R.L.C.V. ("Contel") to finance the first tract of land of approximately 300 acres which is being developed by Contel for agriculture use in Baja California, Mexico. The Company's Chief Executive Officer has made personal investments in this project, and has a 49.5% minority partnership interest in Contel. The Company and its Chief Executive Office have no management or governance authority in Contel. Contel's general manager is not required to consult with our Chief Executive Officer on any management decisions in the conduct of Contel's business. The property acquired by Contel will be developed for agricultural purposes and multi-use purposes. The Company initially committed to loan(s) up to the amount of $350,000 and on February 1, 2017, the Company increased its loan commitment to $1,000,000. The Company is entitled to a share of Contel's profits and losses subsequent to repayment of all outstanding loans. In the years ended April 2017 and 2016, the Company contributed $580,500 and $110,000 to Contel, respectively, which is accounted for as an investment loan. Note Receivable - Related Party totaled $690,500 and $110,000 as of April 30, 2017 and 2016, respectively. RESULTS OF OPERATIONS Year Ended April 30, 2017 Compared to Year Ended April 30, 2016 During the year ended April 30, 2017, we incurred a net loss of $1,478,000 compared to a net loss of $852,000 for the year ended April 30, 2016. The increase in our loss for the year ended April 30, 2017 over the comparable prior year is due to a decrease in our revenue of approximately $140,000, an increase of approximately $163,000 in operating expenses and an increase in net other expenses of approximately $323,000. There were increases in revenue in the fiscal year ended April 30, 2017 compared to fiscal 2016 is due to: Rental revenue increased to approximately $91,000 during the year ended April 30, 2017 as compared to $24,000 during the prior fiscal year. The Company received rental income on between five and seven properties during the entire year ended April 30, 2017, as compared to rental income earned on properties acquired from ARG only in the last quarter of the prior fiscal year. 15 Commission revenue was approximately $4,000 for the year ended April 30, 2017 as compared to $0 during the fiscal year ended April 30, 2016. The Company received commissions on the sale of two of the properties in the fiscal year ended April 30, 2017. There were no such commissions earned during the prior fiscal year. These increases in revenue in the fiscal year ended April 30, 2017 compared to fiscal 2016 were partially offset by the following decreases: Proceeds from the sale of properties increased to $575,000 during the year ended April 30, 2017 as compared to $0 in the comparable prior year end and corresponding cost of properties sold increased to approximately $554,000 as compared to $0 during the year ended April 30, 2016. However, during 2017 the profit in connection with the sale of two properties, which the Company financed, was deferred in the amount of $41,603, resulting in a net loss from sale of properties of approximately $21,000. The Company sold four properties in the year ended April 30, 2017 as compared to none in the comparable prior year end. Management fee revenue decreased to $0 during the year ended April 30, 2017 as compared to approximately $12,000 for the fiscal year ended April 30, 2016 as the Company managed no properties in the current fiscal year. Construction services revenues were $0 during the year ended April 30, 2017 as compared to approximately $177,000 for the fiscal year ended April 30, 2016. The decrease is a result of the Company's acquisition of ARG, for whom the fiscal 2016 construction services were provided. There have been fluctuations in certain expenses in the fiscal year ended April 30, 2017, as compared to the fiscal year ended April 30, 2016. Selling, general and administrative expense increased approximately $179,000 for the year ended April 30, 2017 as compared to the comparable prior year mainly due to the following: Rental property costs and depreciation expense increased for the year ended April 30, 2017 as compared to the comparable prior period as a result of costs incurred in connection with the rental properties the Company acquired from ARG in the last quarter of fiscal 2016. Commission and closing costs expense increased approximately $16,000 for the year ended April 30, 2017 as compared to the comparable prior period as a result of the sale of four properties with commission paid on the sale of two of the properties. Investor relations expense increased approximately $22,000 for the year ended April 30, 2017 as compared to the comparable prior period as a result of more activity in publicity for the Company. Travel fees increased approximately $17,000 for the year ended April 30, 2017 as compared to the comparable prior period as a result of business travel to Mexico. Salary and payroll tax expense increased for the year ended April 30, 2017 as compared to the comparable prior period mainly due to the addition of an office manager and corrections to payroll tax expense. Bad debt expense increased approximately $10,000 from $0 for the year ended April 30, 2016 to a loss of $10,000 in the current year ended April 30, 2017 as the Company recorded a bad debt reserve of approximately $7,000 in connection with rent due on one of its rental properties and approximately $5,000 in connection with its Notes receivable land contracts, net of $2,000 received in payment in full on a previously written off land contract receivable. 16 Professional fees decreased approximately $29,000 for the year ended April 30, 2017 as compared to the comparable prior year mainly due to: Audit, accounting and legal and fees increased mainly due to our S-1 filing, the increased complexity of accounting issues and regulatory compliance costs. Consultant fees paid increased for the year ended April 30, 2017 as compared to the comparable prior period due to increased responsibility after letting go of an office employee. These increases were partially offset by a decrease in investor and OTC fees for the year ended April 30, 2017 as compared to the comparable prior period, which includes a decrease due to fees paid with the issuance of common stock to two consultants in the amount of approximately $53,000 in the year ended April 30, 2016. This decrease was offset by an increase for investor relations expense for the current year ended. Impairment loss expense increased from $0 for the year ended April 30, 2016 to approximately $180,000 for the year ended April 30, 2017 due to the Company's determination the goodwill relating to its acquisition of ARG was impaired and a loss in the amount of approximately $180,000 was recognized in the last quarter of fiscal 2017. Interest expense was approximately $300,000 for the year ended April 30, 2017 as compared to approximately $239,000 for the comparable prior year mainly due to increased debt and convertible debt during the current year and the related interest and amortization of debt discounts for the year ended April 30, 2017. Gain on sale of asset decreased from $8,100 in the comparable prior year to approximately $0 for the year ended April 30, 2017 due to the sale of a vehicle in the prior year. Loss on settlement of related party liabilities, Series A increased to approximately $428,000 for the year ended April 30, 2017 as compared to $0 for the comparable prior year due to the issuance of Series A preferred stock in settlement of the note payable to EIG resulting in a loss in the amount of approximately $389,000 and in settlement of the advance due EIG resulting in a loss in the amount of approximately $39,000. Gain on settlement of liabilities, Series B increased to approximately $11,000 for the year ended April 30, 2017 as compared to $0 for the comparable prior period due to the issuance of Series B preferred stock in settlement of the note payable due AMREFA. Derivatives loss decreased from approximately $177,000 in the comparable prior year to approximately $8,000 for the year ended April 30, 2017 due to derivative gain on settlement of Hoppel Convertible Note 1 which was paid in full in the last quarter of fiscal 2017. LIQUIDITY At April 30, 2017, we had total assets of approximately $2,395,000 compared to total assets of approximately $1,796,000 at April 30, 2016. The increase in total assets was primarily due to: an increase in Cash of approximately $99,000, Land under development increased $500,000 due to the Company's purchase of land though its Procon subsidiary, Accounts Receivable increased approximately $15,000 due to Procon's AR and rental property rent due from tenants, Notes Receivable Land Contract increased approximately $158,000 due to the Company's issuance of land contracts to the buyers of two of the properties sold in the year ended April 30, 2017, Note Receivable-Related Party increased approximately $581,000 as a result of the Company's additional loan to Contel. These increases in assets were partially offset by decreases: in Rental Properties of approximately $274,000, as a result of the sale of four properties in the year ended April 30, 2017, in the Sale of the Property under Development in the amount of approximately $294,000 and in property of approximately $9,000 due to depreciation. 17 Cash increased approximately $99,000 for the year ended April 30, 2017. Cash used in operating activities was approximately $617,000 for the year ended April 30, 2017, as compared with cash used in operating activities of approximately $364,000 in fiscal 2016. During fiscal 2017, the Company loaned approximately $581,000 to Contel and made payments on the purchase of land in the amount of $50,000 in connection with Procon which were offset by proceeds from the sale of properties of approximately $369,000 and proceeds from notes receivable in the amount of approximately $1,000. The Company received: $100,000 in proceeds from Convertible preferred stock, Series A issued for cash from related party, $455,000 in proceeds from advances from a related party and $726,000 in proceeds from convertible debentures and repaid: $40,000 of notes payable to a related party, $127,000 of convertible debentures, approximately $40,000 on the line of credit, approximately $8,000 on obligations under capital leases and paid approximately $95,000 in dividends. At April 30, 2017, we had stockholders' deficit of approximately $200,000. In the current fiscal year, to expand the agricultural operation and to commence the Cielo Mar development activities in Baja California, we estimate that we will be required to find investment partners to provide financing in the range of $5 million to $25 million over the next 12-24 months. Credit Lines On August 2, 2016, the Company signed a 5% Promissory Note with the company's CEO, Jan Telander, for a credit line of up to $250,000. The Note is non-convertible and is to be repaid within one year. Mr. Telander completed the full amount of the advances under the Note as of February 21, 2017 and we have issued to Mr. Telander, in accordance with the terms of this credit line financing, a five-year common stock purchase warrant to purchase 2,500,000 shares of common stock at an exercise price of $0.05 per share, will be issued as are made. Mr. Telander on February 21, 2017 entered into an additional one year 5% Promissory Note credit line agreement of up to $250,000 with the Company, on the same terms as those of the August 2, 2016 agreement, and has commenced advances to the Company under the new Promissory Note. Equity Line Financing On June 23, 2016, the Company entered into $5,000,000 equity line financing agreement ("Investment Agreement") with Tangiers Global, LLC , Dorado, Puerto Rico. The financing is over a maximum of 36 months. A maximum of 75 million (75,000,000) shares of our common stock has been registered for this financing. The registration statement filed with the SEC for the equity line financing was declared effective by the SEC on January 31, 2017. The Company has not yet utilized this financing. We issued to the Tangiers in connection with the execution of the Investment Agreement a commitment fee of a five-year warrant to purchase 4,000,000 shares of common stock, at an exercise price of $.02 per share, and Tangiers provided financing to us for our legal costs in connection with the filing of the Registration Statement through a one-year $22,000 convertible debenture, which the Company paid off in January 2017. Convertible Note Financings On September 13, 2016, the Company sold a private investor a 7% convertible promissory note in the principal amount of $105,000, due March 13, 2017. On January 20, 2017, the Company sold a private investor a 7% convertible promissory note in the principal amount of $105,000, due July 20, 2017, convertible in the event of an event of default. 18 On February 21, 2017, the Company sold to an institutional lender a convertible note in the amount of $103,500, bearing interest at the rate of 12% per annum, and due November 30, 2017. On March 15, 2017, the Company issued to an institutional lender a $5,000 Original Issue Discount 10% Convertible Debenture in the principal amount of $105,000, due March 15, 2018. On March 21, 2017, the Company issued a 7% Fixed Convertible Promissory Note in the principal amount of $105,000 due September 21, 2018 to an institutional lender. On March 30, 2017, the Company issued a 7% Fixed Convertible Promissory Note in the principal amount of $100,000 due September 22, 2017 to an institutional lender. On April 27, 2017, the Company issued a 10% Fixed Convertible Promissory Note in the principal amount of $113,000 due April 3, 2018 to an institutional lender. On May 3, 2017, the Company issued a 8% Fixed Convertible Promissory Note in the principal amount of $110,000 due November 29, 2017 to an institutional lender. On May 15, 2017, the Company issued a 12% Fixed Convertible Promissory Note in the principal amount of $46,500 due February 15, 2018 to an institutional lender. On May 10, 2017, the Company issued a 12% Fixed Convertible Promissory Note in the principal amount of $113,000 due February 10, 2018 to an institutional lender. Additionally, we issued 2,000,000 warrants pursuant to the terms of the securities purchase agreement with an exercise price of $0.05 per share. Critical Accounting Policies The summary of critical accounting policies below should be read in conjunction with the discussion of the Company's accounting policies included in the financial statements in this report. We consider the following accounting policies to be the most critical going forward: Basis of Presentation - The Company's financial statements for the year ended April 30, 2017, have been prepared on a going concern basis which contemplates the realization of assets and settlement of liabilities and commitments in the normal course of business. The consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of uncertainties. 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. Basis of consolidation - The consolidated financial statements include the accounts and records of the Company and its wholly-owned subsidiaries: ProGreen Realty, Progreen Properties Management, ProGreen Construction, ARG, LLC, 21000 Westover LLC, 20210 Westover LLC, 21112 Evergreen LLC, 21421 Greenview LLC, 21198 Berg LLC, 23270 Helen LLC, Progreen Properties VII LLC, Progreen Properties XI LLC, Progreen Properties II, LLC, Franklin Pointe Drive LLC, 20351 Lacrosse LLC, Progreen Properties III LLC, 25825 Lahser Unit Two LLC and 24442 Kinsel LLC and its 51% controlling interest in Procon Baja JV, S.R.L. DE C..V . 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. Notes Receivable - Land Contracts - The notes receivable land contracts are carried at amortized cost. Interest income on the notes receivable is recognized on the accrual basis based on the principal balances outstanding. An allowance for doubtful accounts in the amount of $4,800 and $0 has been recorded at April 30, 2017 and 2016. Notes receivable are considered impaired when, based on current information and events, it is probable that the Company will not be able to collect all principal and interest amounts due according to the contractual terms. The Company assesses the credit quality of the notes receivable and adequacy of notes receivable loss reserves on a quarterly basis or more frequently as necessary. Significant judgment of the Company is required in this analysis. The Company considers the estimated net recoverable value of the notes receivable as well as other factors, including but not limited to the fair value of any collateral, the amount and the status of any senior debt, the quality and financial condition of the borrower and the competitive situation of the area where the underlying collateral is located. Because this determination is based on projections of future economic events, which are inherently subjective, the amount ultimately realized may differ materially from the carrying value as of the balance sheet date. If upon completion of the assessment, the estimated fair value of the underlying collateral is less than the net carrying value of the notes receivable, notes receivable loss reserve is recorded with a corresponding charge to provision for notes receivable losses. The notes receivable loss reserve for each note is maintained at a level that is determined to be adequate by management to absorb probable losses. Income recognition is suspended for a note receivable when full recovery, according to the contractual terms, of income and principal becomes doubtful. When the ultimate collectability of the principal of an impaired note receivable is in doubt, all payments are applied to principal under the cost recovery method. When the ultimate collectability of the principal of an impaired note receivable is not in doubt, contractual interest is recorded as interest income when received, under the cash basis method until an accrual is resumed when the note receivable becomes contractually current and performance is demonstrated to be resumed. Interest accrued and not collected will be reversed against interest income. A note receivable is written off when it is no longer realizable and/or legally discharged. As of April 30, 2017, the Company had two impaired notes receivable. Property sales revenue recognition - Property 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. In in connection with the sale of two properties, which the Company financed, at April 30, 2017 deferred profit on such sales totaled $41,603, off against the notes receivable balance on the face of balance sheet. See Note 5. There were no such deferred amounts at April 30, 2016. Emerging growth company status - As an emerging growth company under the JOBS Act, we have elected to opt out of the extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the Act. This election is irrevocable.© Edgar Online, source Glimpses