<DOCUMENT>
<TYPE>10QSB
<SEQUENCE>1
<FILENAME>tenq.txt
<DESCRIPTION>PGI INCORPORATED FORM 10-QSB
<TEXT>
<PAGE>
PGI INCORPORATED AND SUBSIDIARIES
U.S SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10 - QSB
(Mark One)
/x/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
AND EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2001
-----------------------
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
----------------------------
Commission File Number 1-6471
-----------
PGI INCORPORATED
----------------
(Exact name of small business issuer as specified in its charter)
FLORIDA 59-0867335
---------------------------- -------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation Identification No.)
212 SOUTH CENTRAL, SUITE 100, ST. LOUIS, MISSOURI 63105
-------------------------------------------------------
(Address of principal executive offices)
(314) 512-8650
--------------
(Issuer's telephone number)
(Former Name, Former Address and Former Fiscal year, if changed
since last report)
Check whether the issuer (1) has filed all reports required to be
filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during
the past 12 months (or for 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. Yes X No
----- -----
State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date: As of November
9, 2001 there were 5,317,758 shares of the Registrant's common stock
outstanding.
Transitional Small Business Disclosure Format (Check one):
Yes No X
--------- ---------
1
<PAGE>
<PAGE>
<TABLE>
PGI INCORPORATED AND SUBSIDIARIES
Form 10 - QSB
For the Quarter Ended September 30, 2001
Table of Contents
-----------------
<CAPTION>
Form 10 - QSB
Page No.
--------
<S> <C>
PART I Financial Information
Item 1 Financial Statements
Consolidated Statements of Financial Position
September 30, 2001 and December 31, 2000 3
Consolidated Statements of Operations
Three and Nine Months Ended September 30, 2001 and 2000 4
Condensed Consolidated Statements of Cash Flows
Nine Months Ended September 30, 2001 and 2000 5
Notes to Consolidated Financial Statements for
Form 10 - QSB 6 - 11
Item 2 Management's Discussion and Analysis of
Financial Condition and Results of Operations 12 - 15
PART II Other Information
Item 1 Legal Proceedings 16
Item 2 Changes in Securities 16
Item 3 Defaults Upon Senior Securities 16
Item 4 Submission of Matters to a Vote of Security Holders 16
Item 5 Other Information 16
Item 6 Exhibits and Reports on Form 8 - K 16
SIGNATURES 17
</TABLE>
2
<PAGE>
<PAGE>
PGI INCORPORATED AND SUBSIDIARIES
Part I Financial Information
Item 1 Financial Statements
<TABLE>
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
($ in thousands)
<CAPTION>
September 30, December 31,
2001 2000
---- ----
<S> <C> <C>
ASSETS
Cash and cash equivalents $ 325 $ 454
Restricted cash 277 333
Receivables 14 49
Land and improvement inventories 752 760
Other assets 173 164
-------- --------
$ 1,541 $ 1,760
======== ========
LIABILITIES
Accounts payable & accrued expenses $ 48 $ 112
Accrued real estate taxes 436 442
Accrued interest:
Debentures 14,499 13,077
Other 1,988 1,904
Credit Agreements -
Primary lender 700 700
Notes payable 1,198 1,198
Subordinated
debentures payable 9,059 9,059
Convertible debentures payable 1,500 1,500
-------- --------
$ 29,428 $ 27,992
-------- --------
STOCKHOLDERS' EQUITY
Preferred stock, par value $1.00 per share;
authorized 5,000,000 shares; 2,000,000
Class A cumulative convertible shares
issued and outstanding; (liquidation
preference of $8,000,000 and cumulative
dividends) 2,000 2,000
Common stock, par value $.10 per share;
authorized 25,000,000 shares; 5,317,758
shares issued and outstanding 532 532
Paid in capital 13,498 13,498
Accumulated deficit (43,917) (42,262)
-------- --------
(27,887) (26,232)
-------- --------
$ 1,541 $ 1,760
======== ========
See accompanying notes to consolidated financial statements for Form 10 - QSB.
</TABLE>
3
<PAGE>
<PAGE>
PGI INCORPORATED AND SUBSIDIARIES
Part I Financial Information (Continued)
<TABLE>
CONSOLIDATED STATEMENTS OF OPERATIONS
($ in thousands)
(Unaudited)
<CAPTION>
Three Months Ended Nine Months Ended
------------------ -----------------
September 30, September 30, September 30, September 30,
2001 2000 2001 2000
---- ---- ---- ----
<S> <C> <C> <C> <C>
REVENUES
Real Estate Sales $ 14 $ 35 $ 52 $ 35
Interest Income 9 12 34 30
Other Income 9 9 16 13
----- ----- ------- -------
32 56 102 78
----- ----- ------- -------
COSTS AND EXPENSES
Cost of Real Estate Sales $ 8 $ 21 $ 19 $ 21
Interest 531 503 1,572 1,475
Taxes & Assessments 16 16 49 53
Consulting & Accounting 7 11 30 32
Legal & Professional 9 5 45 22
General & Administrative 9 9 42 41
----- ----- ------- -------
580 565 1,757 1,644
----- ----- ------- -------
NET (LOSS) $(548) $(509) $(1,655) $(1,566)
===== ===== ======= =======
NET (LOSS) PER SHARE (*) $(.13) $(.13) $ (.40) $ (.38)
===== ===== ======= =======
<FN>
* Considers the effect of cumulative preferred dividends in arrears for
the three and nine months ended September 30, 2001 and 2000.
See accompanying notes to consolidated financial statements for Form 10 - QSB
</TABLE>
4
<PAGE>
<PAGE>
PGI INCORPORATED AND SUBSIDIARIES
Part I Financial Information (Continued)
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
($ in thousands)
(Unaudited)
<CAPTION>
Nine Months Ended
-----------------
September 30, September 30,
2001 2000
---- ----
<S> <C> <C>
Net cash (used in) operating activities $(126) $(362)
----- -----
Cash flows from investing activities:
Purchases of inventory and deferred expenditures (7) -
Proceeds from release of restricted cash - 372
Proceeds from notes receivables 4 3
----- -----
Net cash provided by (used in) investing activities (3) 375
----- -----
Cash flows from financing activities:
Principal payments on debt - (15)
----- -----
Net cash (used in)
financing activities - (15)
----- -----
Net increase (decrease) in cash (129) (2)
Cash at beginning of period 454 28
----- -----
Cash at end of period $ 325 $ 26
===== =====
See accompanying notes to consolidated financial statements for Form 10 - QSB
</TABLE>
5
<PAGE>
<PAGE>
PGI INCORPORATED AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(1) Basis of Presentation
The accompanying unaudited consolidated financial statements have
been prepared in accordance with the instructions to Form 10 - QSB
and therefore do not include all disclosures necessary for fair
presentation of financial position, results of operations and cash
flows in conformity with generally accepted accounting principles.
The Company's independent accountants included an explanatory
paragraph regarding the Company's ability to continue as a going
concern in their opinion on the Company's consolidated financial
statements for the year ended December 31, 2000.
The Company remains in default under the indentures governing its
unsecured subordinated and convertible debentures and in default of
its primary debt obligations. (See Management's Discussion and
Analysis of Financial Condition and Results of Operations and Notes
9, 10, 11, and 16 to the Company's consolidated financial
statements for the year ended December 31, 2000, as contained in
the Company's Annual Report on Form 10 - KSB).
All adjustments (consisting of only normal recurring accruals)
necessary for fair presentation of financial position, results of
operations and cash flows have been made. The results for the three
and nine months ended September 30, 2001 are not necessarily
indicative of operations to be expected for the fiscal year ending
December 31, 2001 or any other interim period.
(2) Per Share Data
Primary per share amounts are computed by dividing net income
(loss), after considering cumulative dividends in arrears on the
Company's preferred stock, by the average number of common shares
and common stock equivalents outstanding. For this purpose, the
Company's cumulative convertible preferred stock and collateralized
convertible debentures are not deemed to be common stock
equivalents, but outstanding vested stock options are considered as
such. However, under the treasury stock method, no vested stock
options were assumed to be exercised, and therefore no common stock
equivalents existed, for the calculation of primary per share
amounts for the nine months ended September 30, 2001 and 2000. The
average number of common shares outstanding for the nine months
ended September 30, 2001 and 2000 was 5,317,758.
Fully diluted per share amounts are computed by dividing net income
(loss) by the average number of common shares outstanding, after
adjusting both for the estimated effects of the assumed exercise of
stock options and the assumed conversion of all cumulative
convertible preferred stock and collateralized convertible
debentures into shares of common stock. For the nine months ended
September 30, 2001 and 2000, no stock options were assumed to be
exercised and the effect of the assumed exercise of stock options
and the assumed conversion of all cumulative convertible preferred
stock and collateralized convertible debentures would have been
anti-dilutive.
6
<PAGE>
<PAGE>
PGI INCORPORATED AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
The following is a summary of the calculations used in computing
basic and diluted (loss) per share for the three and nine months
ended September 30, 2001 and 2000.
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
------------------ -----------------
September 30, September 30, September 30, September 30,
2001 2000 2001 2000
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net (Loss) $(548,000) $(509,000) $(1,655,000) $(1,566,000)
Preferred Dividends (160,000) (160,000) (480,000) (480,000)
--------- --------- ----------- -----------
(Loss) Available to
Common Shareholders $(708,000) $(669,000) $(2,135,000) $(2,046,000)
========= ========= =========== ===========
Weighted Amount of Shares
Outstanding 5,317,758 5,317,758 5,317,758 5,317,758
Basic and Diluted (Loss) Per
Share $ (.13) $ (.13) $ (.40) $ (.38)
</TABLE>
(3) Statement of Cash Flows
The Financial Accounting Standards Board issued Statement No. 95,
"Statement of Cash Flows", which requires a statement of cash flows
as part of a full set of financial statements. For quarterly
reporting purposes, the Company has elected to condense the
reporting of its net cash flows. Interest paid for the nine months
ended September 30, 2001 and 2000 was $66,000 and $77,000
respectively.
For purposes of the statement of cash flows, the Company considers
all highly liquid debt instruments purchased with a maturity of
three months or less to be cash equivalents.
(4) Restricted Cash
Restricted cash includes restricted proceeds held by the primary
lender as collateral for debt repayment and escrowed receipts
related to sold contracts receivable.
7
<PAGE>
<PAGE>
PGI INCORPORATED AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(5) Receivables
Net receivables consisted of:
<TABLE>
<CAPTION>
September 30, December 31,
2001 2000
---- ----
($ in thousands)
<S> <C> <C>
Contracts receivable on homesite sales $ 180 $ 222
Less: Allowance for cancellations (180) (222)
------- -------
Net receivables on real estate sales 0 0
Other notes receivable 11 14
Other interest receivable 3 35
------- -------
$ 14 $ 49
======= =======
</TABLE>
(6) Land and Improvements
Land and improvement inventories consisted of:
<TABLE>
<CAPTION>
September 30, December 31,
2001 2000
---- ----
($ in thousands)
<S> <C> <C>
Unimproved land $ 613 $ 613
Fully improved land 139 147
------- -------
$ 752 $ 760
======= =======
</TABLE>
(7) Property and Equipment
<TABLE>
<CAPTION>
September 30, December 31,
2001 2000
---- ----
($ in thousands)
<S> <C> <C>
Furniture, fixtures and other equipment $ 31 $ 31
Less: Accumulated depreciation (31) (31)
------- -------
$ 0 $ 0
======= =======
</TABLE>
(8) Other Assets
Other assets consisted of:
<TABLE>
<CAPTION>
September 30, December 31,
2001 2000
---- ----
($ in thousands)
<S> <C> <C>
Deposit with Trustee of 6-1/2% debentures $ 157 $ 152
Other 16 12
------- -------
$ 173 $ 164
======= =======
</TABLE>
8
<PAGE>
<PAGE>
PGI INCORPORATED AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(9) Accounts Payable and Accrued Expenses
Accounts payable and accrued expenses consisted of:
<TABLE>
<CAPTION>
September 30, December 31,
2001 2000
---- ----
($ in thousands)
<S> <C> <C>
Accounts payable $ 29 $ 56
Accrued consulting fees - 2
Accrued audit & professional 19 33
Accrued legal - 4
Estimated recourse liability for
receivables sold - 17
------- -------
$ 48 $ 112
======= =======
Accrued Real Estate Taxes consisted of:
Current real estate taxes $ 28 $ 37
Delinquent real estate taxes 408 405
------- -------
$ 436 $ 442
======= =======
</TABLE>
(10) Primary Lender Credit Agreements, Notes Payable, Subordinated and
Convertible Debentures Payable
Credit agreements with the Company's primary lender and notes
payable consisted of the following:
<TABLE>
<CAPTION>
September 30, December 31,
2001 2000
---- ----
($ in thousands)
<S> <C> <C>
Credit agreements - primary lender:
(maturing July 8, 1997, bearing interest
at prime plus 5%) $ 700 $ 700
Notes payable - $1,176,000
bearing interest at prime plus 2% 1,198 1,198
------- -------
Subordinated debentures payable:
At 6-1/2% interest; due June 1991 1,034 1,034
At 6% interest; due May 1, 1992 8,025 8,025
------- -------
$ 9,059 $ 9,059
------- -------
Collateralized convertible debentures payable:
At 14% interest; due July 8, 1997,
convertible into shares of common stock
at $1.72 per share 1,500 1,500
------- -------
$12,457 $12,457
======= =======
</TABLE>
9
<PAGE>
<PAGE>
PGI INCORPORATED AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(11) Real Estate Sales and Other Income
Real Estate Sales and Cost of Sales for the three and nine months
ended September 30, 2001 and 2000 were as follows:
<TABLE>
<CAPTION>
Three Months Nine Months
Ended Ended
----- -----
September 30, September 30, September 30, September 30,
2001 2000 2001 2000
---- ---- ---- ----
($ in thousands) ($ in thousands)
<S> <C> <C> <C> <C>
Homesite Sales $ 14 $ 35 $ 52 $ 35
Cost of Sales 8 21 19 21
</TABLE>
Other income for the nine months ended September 30, 2001 and 2000
was $16,000 and $13,000 respectively. The other income mainly
consists of recoveries of contracts receivable which have been
fully provided for.
(12) Commitments and Contingencies
The aggregate outstanding balances of all receivables sold and
exchanged with recourse totaled $17,000 and $34,000 at September
30, 2001 and December 31, 2000, respectively. Based on its
collection experience with such receivables, the Company maintained
no allowance at September 30, 2001. At December 31, 2000, the
Company maintained an allowance of $17,000 classified in accounts
payable and accrued expenses, for the recourse provision related to
all receivables sold.
(13) Income Taxes
At December 31, 2000, the Company had an operating loss
carryforward of approximately $36,000,000 to reduce future taxable
income. These operating losses expire at various dates through
2012.
10
<PAGE>
<PAGE>
PGI INCORPORATED AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
The following summarizes the temporary differences of the Company
at December 31, 2000 at the current statutory rate:
<TABLE>
<S> <C>
Deferred tax asset:
Net operating loss carryforward $ 14,303,000
Adjustments to reduce land to net realizable value 12,000
Expenses capitalized under IRC 263(a) 56,000
ITC carryforward 215,000
Valuation allowance (14,414,000)
------------
172,000
Deferred tax liability:
Basis difference of land and improvement inventories 172,000
------------
Net deferred tax asset $ 0
============
</TABLE>
11
<PAGE>
<PAGE>
PGI INCORPORATED AND SUBSIDIARIES
Item 2 Management's Discussion and Analysis of Financial Condition and
Results of Operations
Preliminary Note
The Company's business focus and emphasis recently has been to
concentrate its sales and marketing efforts on the disposition in bulk of
its undeveloped, platted, residential real estate, as a result of its
continuing financial difficulties due to the principal and interest owed on
its debt.
Presently, the Company's remaining inventory primarily consists of
370 acres located in Hernando County, Florida. In addition, the Company has
been actively pursuing collection on delinquent contract receivables from
homesite sales. The Company owns approximately 36 lots, mostly located in
Citrus County, Florida which are listed for sale.
The Company believes the 370 acres located in Hernando County,
Florida may become more marketable because of the property's close proximity
to the recently completed interchange of the Suncoast Expressway with
Highway 98. In December 1999, the Hernando County Commission approved a
change in land use of 40 acres of the parcel from residential to commercial
use. The Company anticipates that a further extension of the Suncoast
Expressway beyond Highway 98 will not occur for several years.
Results of Operations
Revenues for the first nine months of 2001 increased by $24,000 to
$102,000 from $78,000 for the comparable 2000 period reflecting improved
real estate sales revenue in the current year and an increase in interest
income due to the release of restricted cash in October 2000 which had been
non-interest bearing. A net loss of $1,655,000 was incurred for the first
nine months of 2001 compared to net loss of $1,566,000 for the first nine
months of 2000. Expenses for the nine months increased by $113,000. After
consideration of cumulative preferred dividends in arrears, totaling
$480,000 for each of the nine months ended September 30, 2001 and 2000 ($.15
per share of common stock), net (loss) per share of $(.40) and $(.38)
respectively was reported for the nine month periods ended September 30,
2001 and 2000.
Real Estate Sales and Cost of Sales consisted of:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30, September 30, September 30,
2001 2000 2001 2000
---- ---- ---- ----
($ in thousands) ($ in thousands)
<S> <C> <C> <C> <C>
Homesite Sales $14 $35 $52 $35
Cost of Sales 8 21 19 21
</TABLE>
Other income for the nine months ended September 30, 2001 and 2000 was
$16,000 and $13,000 respectively. The other income mainly consists of
recoveries of contracts receivable which have been fully provided for.
12
<PAGE>
<PAGE>
PGI INCORPORATED AND SUBSIDIARIES
Item 2 Management's Discussion and Analysis of Financial Condition and
Results of Operations (continued)
As of September 30, 2001, the Company remained in default of its
primary lender indebtedness with PGIP, LLC, ("PGIP"). PGIP holds restricted
funds of the Company pursuant to an escrow agreement whereby funds may be
disbursed (i) as requested by PGI and agreed to by PGIP, or (ii) as deemed
necessary and appropriate by PGIP, in either case, to protect PGIP's
interest in the Retained Acreage (as hereinafter defined), including PGIP's
right to receive principal and interest under the note agreement securing
the remaining indebtedness, or (iii) to PGIP to pay any other obligations
owed to PGIP by the Company. The restricted escrow held by the primary
lender at September 30, 2001 and December 31, 2000 was $271,000 and $327,000
respectively. The real estate owned by the Company which has not been sold,
approximately 370 acres (the "Retained Acreage") remains subject to the
primary lender indebtedness.
Restricted cash of $372,000 was released on February 24, 2000. The
restricted fund had been established with the deposit of $250,000 in escrow
for twenty years pursuant to a Permit Agreement entered into June 19, 1973.
The agreement provided for state certification of water quality standards in
conjunction with construction of navigable waterways in Charlotte County,
Florida. The escrow fund was extended for five years in 1993 and was going
to be extended for another five years in 1998. The Company challenged this
extension. A settlement agreement was reached whereby the Company received
$212,000 of the escrowed funds and $160,000 was disbursed to the Burnt Store
Isles Canal Maintenance Assessment District and the State of Florida
Department of Environmental Protection.
Contracts receivable on homesite sales and related receivables are
fully provided for cancellation at September 30, 2001 and December 31, 2000.
The Company has been actively pursuing collection on the delinquent
receivables. An assessment is made for each contract receivable as to the
economic benefit of reacquisition of the lot considering the cost of
foreclosure, delinquent taxes and association fees due, and estimated
current sale value of the lot. For those with benefit, foreclosure action is
begun in the absence of payment or receipt of a quit claim deed of the
property back to the Company. Three lots were reacquired through foreclosure
in the nine months ended September 30, 2001.
Cash used in operating activities for the nine months ended
September 30, 2001 was $126,000 compared to $362,000 for the comparable 2000
period. With the release of restricted cash in February, 2000, $160,000 was
paid in associated settlement fees and the Company paid $150,000 of accrued
consulting fees to Love Real Estate Company. Cash used in investing
activities in 2001 included $7,000 in expenditures towards lot
reacquisitions. Cash used in financing activities in the amount of $15,000
was for repayment of a note payable to Love Investment Company in 2000.
13
<PAGE>
<PAGE>
PGI INCORPORATED AND SUBSIDIARIES
Item 2 Management's Discussion and Analysis of Financial Condition and
Results of Operations (continued)
Analysis of Financial Condition
Assets decreased at September 30, 2001 compared to assets at
December 31, 2000, reflecting the following changes:
<TABLE>
<CAPTION>
September 30, December 31, Increase
2001 2000 (Decrease)
---- ---- ----------
($ in thousands)
<S> <C> <C> <C>
Cash and cash equivalents $ 325 $ 454 $ (129)
Restricted cash 277 333 (56)
Receivables 14 49 (35)
Land and improvement inventories 752 760 (8)
Other assets 173 164 9
------- ------- -------
$ 1,541 $ 1,760 $ (219)
======= ======= =======
</TABLE>
Liabilities were approximately $29.4 million at September 30, 2001
compared to approximately $28 million at December 31, 2000 reflecting the
following changes:
<TABLE>
<CAPTION>
September 30, December 31, Increase
2001 2000 (Decrease)
---- ---- ----------
($ in thousands)
<S> <C> <C> <C>
Accounts payable & accrued expenses $ 48 $ 112 $ (64)
Accrued real estate taxes 436 442 (6)
Accrued interest 16,487 14,981 1,506
Credit agreements - primary lender 700 700 -
Notes 1,198 1,198 -
Convertible subordinated
debentures payable 9,059 9,059 -
Convertible debentures payable 1,500 1,500 -
------- ------- -------
$29,428 $27,992 $ 1,436
======= ======= =======
</TABLE>
The Company has aggressively taken steps to curtail and simplify
operations as well as concentrate on major bulk sales of its undeveloped
acreage. The Company remains totally dependent upon the sale of property to
fund its operations and debt service requirements.
14
<PAGE>
<PAGE>
PGI INCORPORATED AND SUBSIDIARIES
Item 2 Management's Discussion and Analysis of Financial Condition and
Results of Operations (continued)
The Company remains in default of the entire principal plus
interest on its subordinated debentures. The amounts due are as indicated in
the following table:
<TABLE>
<CAPTION>
September 30, 2001
------------------
Principal Unpaid
Amount Due Interest
---------- --------
($ in thousands)
<S> <C> <C>
Subordinated debentures due
June 1, 1991 $ 1,034 $ 808
Subordinated debentures due
May 1, 1992 8,025 7,302
------- -------
$ 9,059 $ 8,110
======= =======
</TABLE>
The Company does not have funds available to make any payments of
either principal or interest on the above debentures.
15
<PAGE>
<PAGE>
PGI INCORPORATED AND SUBSIDIARIES
PART II Other Information
Item 1 Legal Proceedings
In 1994, the Citrus County Tax Assessor denied agricultural
exemption status for the undeveloped Sugarmill Woods property and the
Company was forced to sue the County to reclaim the tax benefit. In 1995,
the Citrus County Tax Assessor again denied agricultural exemption status
for the undeveloped Sugarmill Woods property, but was overruled by the Value
Adjustment Board. As a result, the Tax Assessor sued Sugarmill Woods, and
was again successful in denying the agricultural exemption for the property.
The Company won on appeal, but the Tax Assessor appealed to the Supreme
Court of Florida to reinstate the exemption. On April 1, 1999, the Supreme
Court of Florida issued their opinion in favor of Sugarmill Woods, Inc. On
November 9, 1999 the Circuit Court of Citrus County adjudged the
agricultural classification applicable to tax years 1994, 1995 and 1996 for
exemption. The non interest bearing restricted escrow of $557,000 was
released in October 2000 with the confirmation that no further liability
exists for tax years 1994, 1995, and 1996. Tax year 1997 remains in dispute
on a matter of timely filing of petition for exemption.
Item 2 Changes in Securities
Not applicable.
Item 3 Defaults Upon Senior Securities
See discussion in Item 2 with respect to defaults on the Company's
subordinated debentures and collateralized convertible debentures, which
discussion is incorporated herein by this reference.
Item 4 Submission of Matters to a Vote of Security Holders
Not applicable.
Item 5 Other Information
Not applicable.
Item 6 Exhibits and Reports on Form 8 - K
(a) Exhibits - reference is made to the Exhibit Index
contained on page 18 herein for a list of exhibits filed
under this Item.
(b) No report on Form 8 - K was filed during the quarter
ended September 30, 2001.
16
<PAGE>
<PAGE>
PGI INCORPORATED AND SUBSIDIARIES
In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
PGI INCORPORATED
(Registrant)
Date: November 14, 2001 /s/ Laurence A. Schiffer
----------------------- -------------------------
Laurence A. Schiffer
President
17
<PAGE>
<PAGE>
PGI INCORPORATED AND SUBSIDIARIES
EXHIBIT INDEX
-------------
2. Inapplicable.
3. Inapplicable.
4. Inapplicable.
10. Inapplicable.
11. Statements re: Computations of Per Share Earnings.
(Incorporated by reference to Note 2 to the consolidated financial
statements herein.)
15. Inapplicable.
18. Inapplicable.
19. Inapplicable.
22. Inapplicable.
23. Inapplicable.
24. Inapplicable.
99. Inapplicable.
18
</TEXT>
</DOCUMENT>