Will ProGreen Properties, Inc. (OTCMKTS:PGUS) Trade Higher Or Run Out Of Steam?

Development works at the 5,000-acre Cielo Mar property is the latest catalysts, pushing ProGreen Properties, Inc. (OTCMKTS:PGUS) up the charts. The stock has caught our attention, after rallying by more than 200% over the past one month, as the momentum shows no signs of slowing down. PGUS Daily ChartSo what next for ProGreen US, Inc. after the recent spike?There is no doubt that the stock has what it takes to rise higher if recent developments are anything to go by. However, after a steep rise in share price, it is highly expected the stock will pull back before the long-term uptrend resumes.Taking into consideration the strong uptrend, a pullback to the $0.03 handle should present a unique buy opportunity, for a stock that is increasingly showing signs of breaking out. A sell-off followed by a close below the $0.03 handle, on the other hand, could open the door for the stock to tank to the $0.015 handle.First, a little look at the company’s background before carrying out a detailed analysis of the catalysts behind the recent momentum and why the stock is destined to trade higher.ProGreen Properties is a publicly traded company based in San Diego California, focused on investments in agricultural and real estate projects in Baja California Mexico. Through its subsidiary Inmobiliaria Contel S.R.L.C.V., the company has exposure to the high margin produce industry and the business of growing crops for export markets.Why is ProGreen US, Surging Higher?Renewed investor interest on ProGreen US, Inc. follows the announcement that the company’s subsidiary Procon Baja has completed the acquisition of 5,000 acres of land with 4.5 miles of oceanfront in CaliforniaThe company is currently devising a master plan for the development of a large, totally green, international vacation and retirement Community called ‘Cielo Mar’ at the property.ProGreen Properties through its subsidiary Procon has already entered into an agreement with ESTRADA an architectural design and Construction Company. Pursuant to the agreement, the firm is to formulate a master plan of the 5,000-acre land to include plan drawings, virtual reality drawings and videos of the proposed green, resort-style vacation and retirement project.

“I can truly say that this agreement is a big deal. I have never been more excited about Cielo Mar than I am right now, and I do believe we here have a development that will not only have a high profile but also has the potential to quickly become more successful, when compared to other developments in Baja California,” says Jan Telander, Managing Director for Procon and CEO for ProGreen.

Project Capital FinancingA recently completed appraisal has shown the Cielo Mar Property could be worth $42 million. ProGreen Properties plans to use the Cielo Mar asset as collateral for a long-term financing. In addition, the property constitutes the basis for a mortgage guarantee for 5-7 year loan worth $10 Million.

"We are pleased to have the valuation concluded by CBRE," says Jan Telander, CEO of ProGreen. "With the appraisal in hand, we will be able to proceed with the next steps in our plan for a larger loan financing for the company's operations, and furthering our Baja California projects."

Proceeds from any round of funding are to be used to complete the master plan and for the launch of a pre-sales marketing. The company also plans to eliminate accumulated debt as well as finance other agricultural and real estate projects in Baja California.ProGreen Farms DevelopmentCielo Mar project is not the only development, driving ProGreen U.S up the charts. The company has been busy in advancing its agricultural operations. It is currently in the process of obtaining certification for agricultural operations in Baja, as it looks to venture into the export business.ProGreen Properties also intends to start selling produce from the ProGreen farms, directly to prospective U.S buyers, as it looks to further strengthen its revenue streams.In addition, ProGreen Properties has entered into an agreement for the supply of Chili Peppers to Huy Fong Foods, maker of the Sriracha Hot Sauce. Chili Peppers grown and harvested at the company’s operations in Rancho Arenoso are to be delivered to Huy Fong's plant in Irwindale.Under the terms of the agreement, ProGreen U.s is to supply chili Peppers worth at least $1.2 million with no maximum limit. The company has since reiterated plans to supply Chili Peppers worth $5 million given the virtually unlimited demand.ProGreen Properties expects revenues of about $5 million this year expected to increase by a further 50% in 2019.What Does the Future Hold for ProGreen U.S?ProGreen Properties expansion drive has caught the attention of investors, seen by the stock’s improved outlook on Wall Street. Transition into a revenue-generating entity is another aspect of the business that continues to strengthen investors’ confidence, about the company’s ability to generate shareholder value going forward.The Cielo Mar project is another development that affirms the company’s growth prospects as it continues to diversify its operations. That said the stock should continue powering high as investors take note of the company’s growth metrics.Disclosure: We have no position in PGUS and have not been compensated for this article.