ProGreen did not assist Contel with preparations or planting of this year’s crop. As a result, Contel chose to grow onions this year. The decision was due, in part, to the demand from a large distributor that proposed to provide seeds valued at approximately $50,000 (USD) as a form of deposit. The deal was typical of the local market, such that the purchase would be made at the market price at the time of delivery (delivery being on-site pick-up, in this case). The farm crop is white onions, which are highest in domestic demand, as opposed to the sweet yellow onions or red onions that may be in higher demand in U.S. markets.
Unfortunately, the current market price is 25% of the price at this time last year, and so Contel has delayed the harvest and is doing everything they can to hold out for better pricing. The current price may not provide even enough revenue for Contel to repay their short-term loans for the operating cost and complete payroll payments for the harvest. The situation is not good for ProGreen with regard to any loan repayment installments from Contel this year, and we have no such expectation at this time.
We are still engaged with the lender for the $2.5 million funding, though (…the saga continues…) and we cannot give any assurance that we will receive this funding. We are working on alternatives for the funding, as we have been over the past year, and we hope to have a resolution within the first calendar quarter of 2020 if not sooner. When we do have funds available, we intend to bring the company current in its reporting with the necessary filings, and we will then also be able to communicate our plans going forward.
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