10-Q

 FORM 10- Q

 U.S SECURITIES AND EXCHANGE COMMISSION

 Washington, D.C. 20549

(Mark One)

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

For the quarterly period ended March 31, 2017

☐    TRANSITION REPORT UNDER 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 registrant as specified in its charter)

FLORIDA	59-0867335
(State or other jurisdiction of incorporation)	(I.R.S. Employer Identification No.)

212 SOUTH CENTRAL, SUITE 304, ST. LOUIS, MISSOURI 63105

(Address of principal executive offices)

(314) 512-8650

(Registrant’s telephone number, including area code)

N/A

(Former Name, Former Address and Former Fiscal year, if changed since last report)

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. Yes ☑ No ☐

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 (Sec. 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, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.

(Check one):

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☑
Do not check if a smaller reporting company)		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   

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

Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date: As of May 15, 2017, there were 5,317,758 shares of the registrant’s common stock, $.10 par value per share, outstanding.

PGI INCORPORATED AND SUBSIDIARIES

Form 10 – Q

For the Quarter Ended March 31, 2017

Table of Contents

			Page
PART I    FINANCIAL INFORMATION
	Item 1. Financial Statements		3
		Condensed Consolidated Statements of Financial Position March 31, 2017 (Unaudited) and December 31, 2016	3
		Condensed Consolidated Statements of Operations (Unaudited) Three Months Ended March 31, 2017 and 2016	4
		Condensed Consolidated Statements of Cash Flows (Unaudited) Three Months Ended March 31, 2017 and 2016	5
		Notes to Condensed Consolidated Financial Statements (Unaudited)	6
	Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations		11
	Item 3. Quantitative and Qualitative Disclosures About Market Risk		16
	Item 4. Controls and Procedures		16
PART II    OTHER INFORMATION
	Item 1. Legal Proceedings		17
	Item 1A. Risk Factors		17
	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		17
	Item 3. Defaults Upon Senior Securities		17
	Item 4. Mine Safety Disclosures		17
	Item 5. Other Information		17
	Item 6. Exhibits		17
	SIGNATURE		18
	EXHIBIT INDEX		19

2

PART I  FINANCIAL INFORMATION

Item 1. Financial Statements

PGI INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

($ in thousands, except share and per share data)

	March 31,	December 31,
	2017	2016
	(Unaudited)
ASSETS
Cash	$894	$958
Land inventories	14	14
Other assets	42	42
	$950	$1,014
LIABILITIES
Accounts payable and accrued expenses	$225	$230
Accrued real estate taxes	1	4
Accrued income taxes	57	-
Accrued interest:
Subordinated convertible debentures payable	24,062	23,743
Convertible debentures payable-related party	52,915	52,915
Notes payable	3,163	3,146
Credit agreements:
Notes payable	1,198	1,198
Subordinated convertible debentures payable	8,472	8,472
	90,093	89,708
STOCKHOLDERS' DEFICIENCY
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 plus unpaid cumulative dividends of $14,035)	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	(105,173)	(104,724)
	(89,143)	(88,694)
	$950	$1,014

See accompanying notes to Condensed Consolidated Financial Statements (unaudited).

3

Part I  Financial Information (Continued)

PGI INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

($ in thousands, except per share data)

(Unaudited)

	Three Months Ended
	March 31,	March 31,
	2017	2016
REVENUES
Interest income	$1	$-
Interest income-related party	-	1
	1	1
COSTS, EXPENSES AND OTHER
Interest	336	328
Interest-related party	-	1,973
Taxes and assessments	1	2
Consulting and accounting-related party	10	9
Legal and professional	21	5
General and administrative	25	20
	393	2,337
Net Loss before income taxes	(392)	(2,336)
Income tax expense	(57)	-
NET LOSS	$(449)	$(2,336)
NET LOSS PER SHARE(*)
AVAILABLE TO COMMON
STOCKHOLDERS-Basic and diluted	$(0.11)	$(0.47)

*Considers the effect of dividends on preferred stock for the three months ended March 31, 2017 and 2016. 

See accompanying notes to Condensed Consolidated Financial Statements (unaudited).

4

Part I  Financial Information (Continued)

PGI INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

($ in thousands)

(Unaudited)

	Three Months Ended
	March 31,	March 31,
	2017	2016
Net cash used in operating activities	$(64)	$(29)
Cash Flows from investing activities:
Payments received on notes receivable-related party	-	29
Net cash provided by investing activities	-	29
Net change in cash	(64)	-
Cash at beginning of period	958	1
Cash at end of period	$894	$1

See accompanying notes to Condensed Consolidated Financial Statements (unaudited).

5

PGI INCORPORATED AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

(1) Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of PGI Incorporated (“PGI”) and its subsidiaries (the “Company”) have been prepared in accordance with the instructions to Form 10 - Q 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 registered public accounting firm 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, 2016.

The Company was founded in 1958, and up until the mid 1990’s was in the business of building and selling homes, developing and selling home sites and selling undeveloped or partially developed tracts of land. Over approximately the last 25 years, the Company’s business focus and emphasis changed substantially as it has concentrated its sales and marketing efforts almost exclusively on the disposition of its remaining real estate.

The Company’s major efforts and activities have been, and continue to be, to sell assets of the Company, to repay its indebtedness, and to pay the ordinary on-going costs of operation of the Company. While the Company will seek to realize full market value for each remaining asset, the amounts realized may be at substantial variance from its present financial statement carrying value. In management’s judgement, the remaining assets will be insufficient to satisfy much, if any, of the outstanding indebtedness and there will be no recoveries by shareholders. Consequently, there is substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued.

Certain information and note disclosures normally included in the Company’s annual financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Form 10-K annual report for 2016 filed with the Securities and Exchange Commission.

The condensed consolidated balance sheet of the Company as of December 31, 2016 has been derived from the audited consolidated balance sheet as of that date.

The Company remains in default under the indentures governing its unsecured subordinated debentures. (See Management's Discussion and Analysis of Financial Condition and Results of Operations and Notes 8, 9, and 10 to the Company's consolidated financial statements for the year ended December 31, 2016, as contained in the Company's Annual Report on Form 10 - K).

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 months ended March 31, 2017 are not necessarily indicative of operations to be expected for the fiscal year ending December 31, 2017 or any other interim period.

6

PGI INCORPORATED AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (continued)

(2) Per Share Data

Basic per share amounts are computed by dividing net income (loss), after deducting current period dividends on the Company's preferred stock, by the weighted average number of common shares outstanding during the period. The weighted average number of common shares outstanding for the three months ended March 31, 2017 and 2016 was 5,317,758.

Diluted per share amounts are computed by dividing net income (loss) attributable to common shareholders by the weighted average number of common shares outstanding, after adjusting for the estimated effect of the assumed conversion of all cumulative convertible preferred stock and outstanding convertible debentures, if dilutive, into shares of common stock. For the three months ended March 31, 2017 and 2016, the assumed conversion of all outstanding convertible preferred stock and collateralized convertible debentures would have been anti-dilutive.

The following is a summary of the calculations used in computing basic and diluted loss per share for the three months ended March 31, 2017 and 2016.

	Three Months Ended
	March 31,	March 31,
	2017	2016
	($ in thousands, except
	share and per share data)
Net Loss	$(449)	$(2,336)
Preferred dividends	(160)	(160)
Loss Available to	$(609)	$(2,496)
Common shareholders
Weighted Average Number
Of Common Shares
Outstanding	5,317,758	5,317,758
Basic and Diluted Loss
Per Common Share	$(0.11)	$(0.47)

(3) Statement of Cash Flows

The Financial Accounting Standards Board Accounting Standards Codification Topic No. 230, “Statement of Cash Flows”, 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. There were no payments of interest for the three month periods ended March 31, 2017 and March 31, 2016.

7

PGI INCORPORATED AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (continued)

(5)

Land Inventory

Land inventory consisted of

	March 31,	December 31,
	2017	2016
	($ in thousands)
Fully improved land	$14	$14

(6)

Other Assets

Other assets consisted of: 

	March 31,	December 31,
	2017	2016
	($ in thousands)
Deposit with Trustee of 6-1/2% debentures	$41	$41
Deferred charges	1	1
	$42	$42

(7)

Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses consisted of:

	March 31,	December 31,
	2017	2016
	($ in thousands)
Accounts payable	$30	$26
Accrued audit & professional	37	46
Accrued consulting fees-related party	1	1
Environmental remediation obligations	17	19
Accrued debenture fees	139	137
Accrued miscellaneous	1	1
	$225	$230
Accrued real estate taxes consisted of:
Current real estate taxes	$1	$4

8

PGI INCORPORATED AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (continued)

(8)

Credit Agreements, Notes Payable, Subordinated and Convertible Debentures Payable

Credit agreements and notes payable consisted of the following:

	March 31,	December 31,
	2017	2016
	($ in thousands)
Notes payable - $1,176,000 bearing
interest at prime plus 2%,
the remainder non-interest bearing,
all past due	1,198	1,198
Subordinated convertible debentures payable:
At 6-1/2% interest; due June 1, 1991	447	447
At 6% interest; due May 1, 1992	8,025	8,025
	8,472	8,472
	$9,670	$9,670

The Trustee of the 6.5% unsecured subordinated convertible debentures, which matured in June, 1991, with an original face amount of $1,034,000, provided notice of final distribution to holders of such debentures on September 2, 2014. In connection with such final distributions, the Trustee has maintained a debenture reserve fund with a balance of $41,000 as of March 31, 2017 and December 31, 2016, available for final distribution to holders of such debentures who surrender their respective debenture certificates.

During the three month period ended March 31, 2017 and during the year ended December 31, 2016, there were no unsecured subordinated convertible debentures that were surrendered by their respective debenture holders and no funds were utilized from the debenture reserve account.

As of March 31, 2017 and December 31, 2016 the outstanding principal balance on such 6.5% unsecured subordinated convertible debentures that were not surrendered by the respective holders equals $447,000 plus accrued and unpaid interest of $824,000 and $817,000, respectively. If and when such remaining debentures are surrendered to the Trustee, the applicable portion of such principal and accrued interest will similarly be recorded as debt and accrued interest forgiveness. As the Company has consistently stated in prior filings, the Company believes that any potential claims by the respective debenture holders on such 6.5% unsecured subordinated convertible debentures would be barred under the applicable statutes of limitations.

9

PGI INCORPORATED AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (continued)

(9) Income Taxes

Income tax of $57,000 was accrued at March 31, 2017 for the estimated 2016 Alternative Minimum Tax on the 2016 gain on sales of real estate. At December 31, 2016, the Company had an operating loss carryforward of approximately $66,420,000 available to reduce future taxable income. These operating losses expire at various dates through 2035.

The following summarizes the temporary differences of the Company at March 31, 2017 and December 31, 2016 at the statutory rate:        

	March 31,	December 31,
	2017	2016
	($ in thousands)
Deferred tax asset
Net operating loss carryforward	$25,411	$25,240
Expenses capitalized under IRC 263(a)	56	56
Environmental liability	7	7
Valuation allowance	(25,474)	(25,303)
Total deferred tax asset	-	-

(10) Fair Value of Financial Instruments

The carrying amount of the Company’s financial instruments, other than debt, approximates fair value at March 31, 2017 and December 31, 2016 because of the short maturity of those instruments. It was not practicable to estimate the fair value of the Company’s notes payable and its convertible debentures because these debts are in default causing no basis for estimating value by reference to quoted market prices or current rates offered to the Company for debt of the same remaining maturities.

10

PGI INCORPORATED AND SUBSIDIARIES

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Preliminary Note

The Company’s remaining land inventory consists of 6 single family lots, an approximate 7 acre parcel and some other minor parcels of real estate consisting of easements in Citrus County Florida, which are owned through its wholly-owned subsidiary, Sugarmill Woods, Inc. (“Sugarmill Woods”). In addition, Punta Gorda Isles Sales, Inc. (“PGIS”), a wholly-owned subsidiary of the Company, owns 12 parcels of real estate in Charlotte County, Florida, which total approximates 60 acres, but these parcels have limited value because of associated developmental constraints such as wetlands, easements, and/or other obstacles to development and sale.

On June 17, 2016 two contracts were executed for the sale of two undeveloped parcels of real property consisting of 369 acres located in Hernando County, Florida (the “Property”) between Sugarmill Woods and the State of Florida Department of Transportation (the “Florida DOT”). The Property was encumbered by secured creditor claims, and the sale of the Property closed on June 21, 2016 for $9,000,000. The Florida DOT desired to acquire the Property in connection with the northward extension of the Suncoast Parkway as part of the Suncoast Parkway, Project 2.

The proceeds from the sale of the Property of $9,000,000 were received on June 23, 2016 and payment of the primary lender debt obligation totaling $500,000 in principal, and all accrued interest payable related to the debt totaling $470,000, was made to PGIP LLC “(PGIP”), the holder of the first mortgage note and an affiliate of the Company. In addition, on June 23, 2016, the remaining principal of the collateralized convertible debentures totaling $1,500,000 and a portion of the accrued interest related to such debentures totaling $5,455,000 was paid to the current holders of such debentures. Love Investment Company (“LIC”), and Love-1989 Florida Partners, LP (“Love-1989”), each affiliates of Love-PGI Partners, L.P. (“L-PGI”), held such collateralized convertible debentures. Prior to December 31, 2016, L-PGI was the Company’s primary preferred stock shareholder. Effective December 31, 2016, L-PGI liquidated and assigned the 2,260,760 shares of common stock of the Company and 1,875,000 shares of preferred stock of the Company that were held by L-PGI to LIC in conjunction with settling its remaining indebtedness.

11

PGI INCORPORATED AND SUBSIDIARIES

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (continued)

The Trustee of the 6.5% subordinated debentures, which matured in June, 1991, with an original face amount of $1,034,000, provided notice of final distribution to holders of such debentures on September 2, 2014. In connection with such final distribution, the Trustee maintained a debenture reserve fund with a balance of $41,000 as of March 31, 2017 and December 31, 2016, respectively, which is available for final distribution to holders of such debentures who surrender their respective debenture certificates.

During the three month period ended March 31, 2017 and the year ended December 31, 2016, there were no 6.5% subordinated convertible debentures that were surrendered by their respective debenture holders and no funds were utilized from the debenture reserve account.

As of March 31, 2017 and December 31, 2016 the remaining outstanding principal balance on such 6.5% subordinated convertible debentures that have not been surrendered by the respective holders equals $447,000 plus accrued and unpaid interest of $824,000 and $817,000, respectively. If and when such remaining debentures are surrendered to the Trustee, the applicable portion of such principal and accrued interest will be recorded as debt and interest forgiveness. As the Company has consistently stated in prior filings, the Company believes that any potential claims by the respective debenture holders on such 6.5% subordinated convertible debentures would be barred under the applicable statutes of limitations.

As of March 31, 2017, the Company remained in default under its subordinated convertible debentures and notes payable, as well as the accrued interest with respect to its collateralized convertible debentures.

Results of Operations

Revenues for each of the three month period ended March 31, 2017 and 2016 was $1,000. Interest income for the three month period ended March 31, 2017 represents interest earned on the Company’s money market account. Interest income for the three month period ended March 31, 2016 represents related party interest on the short-term note receivable with LIC. The Company received payment of the note receivable balance from LIC on June 23, 2016.

Expenses for the three months ended March 31, 2017 decreased by $1,944,000 when compared to the same period in 2016 primarily as a result of a decrease in interest expense during the three months ended March 31, 2017. Interest expense for the three month period ended March 31, 2017 decreased by $1,965,000 compared to the same period in 2016. There was no interest expense-related party during the three month period ended March 31, 2017 compared to interest expense-related party of $1,973,000 during the same period in 2016. During June 2016, proceeds from the Property sale were used by the Company to repay the entire principal of the primary lender debt of $500,000, which was held by PGIP, and the entire principal of the collateralized convertible debenture of $1,500,000, which was held by LIC and Love-1989. With the full repayment of such principal, no additional interest expense was accrued with respect to such debentures subsequent to June 23, 2016.

Interest expense relating to the Company’s current outstanding debt, held by non-related parties, increased by $8,000 during the three month period ended March 31, 2017 compared to the same period in 2016, primarily as a result of interest accruing on past due balances which increase at various intervals throughout the year for accrued but unpaid interest.

12

PGI INCORPORATED AND SUBSIDIARIES

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (continued)

Taxes and assessments expense decreased by $1,000 during the three month period ended March 31, 2017 when compared to the same period in 2016 as a result of lower real estate tax expense during the three month period ended March 31, 2017 due to the sale of Property sold to the Florida DOT on June 21, 2016. Consulting and accounting-related party expenses increased by $1,000 during the three month period ended March 31, 2017 when compared to the same period in 2016. A quarterly consulting fee is paid to Love Real Estate Company (“LREC”), an affiliate of L-PGI, of one-tenth of one percent of the carrying value of the Company’s assets which increased effective June 21, 2016 with the sale of Property to the Florida DOT, which resulted in the increase in such consulting and accounting expenses during the three month period ended March 31, 2017.

Legal and professional expenses during the three month period ended March 31, 2017 increased by approximately $16,000 when compared to the same period in 2016, primarily as a result of expenses incurred on a parcel in Citrus County requiring additional environmental remediation during the three month period ended March 31, 2017. General and administrative expenses during the three month period ended March 31, 2017 increased by $5,000 when compared to the same period in 2016 primarily as a result of increased audit and tax service fees during the three month period ended March 31, 2017. The Company accrued an income tax expense of $57,000 during the three month period ended March 31, 2017. As a result, a net loss of $449,000 was incurred for the three month period ended March 31, 2017 compared to a net loss of $2,336,000 for the comparable period in 2016. After deducting preferred dividends, totaling $160,000 for the three month periods ended March 31, 2017 and 2016 , with respect to the Class A Preferred Stock, a net loss per share of $(.11) and $(.47) was incurred for the three month periods ended March 31, 2017 and 2016. The total cumulative preferred dividends in arrears with respect to the Class A Preferred Stock through March 31, 2017 is $14,035,000.

Cash Flow Analysis

During the three month period ended March 31, 2017, the Company’s net cash used in operating activities was $64,000 compared to $29,000 for the comparable period in 2016. There was no cash provided from investing activities during the three month period ended March 31, 2017 compared to $29,000 of net cash provided from investing activities in the comparable period in 2016 which consisted of note receivable proceeds received from LIC.

Analysis of Financial Condition

Total assets decreased by $64,000 at March 31, 2017 compared to total assets at December 31, 2016, reflecting the following changes:

	March 31,	December 31,	Increase
	2017	2016	(Decrease)
		($ in thousands)
Cash	$894	$958	$(64)
Land and improvement inventories	14	14	-
Other assets	42	42	-
	$950	$1,014	$(64)

During the three month period ended March 31, 2017, cash decreased by $64,000 compared to December 31, 2016 as a result of the Company funding its operating activities.

13

PGI INCORPORATED AND SUBSIDIARIES

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (continued)

Liabilities were approximately $90,093,000 at March 31, 2017 compared to approximately $89,708,000 at December 31, 2016, reflecting the following changes which resulted in a decrease of $385,000 of liabilities:

	March 31,	December 31,	Increase
	2017	2016	(Decrease)
		($ in thousands)
Accounts payable and accrued expenses	$225	$230	$(5)
Accrued real estate taxes	1	4	(3)
Accrued income taxes	57	-	57
Accrued interest	80,140	79,804	336
Credit agreements:			-
Notes payable	1,198	1,198	-
Subordinated convertible
debentures payable	8,472	8,472	-
	$90,093	$89,708	$385

During the three month period ended March 31, 2017, the amount of accounts payable and accrued expenses decreased by $5,000 primarily as a result of timing differences. Accrued real estate taxes decreased by $3,000 during the three month period ended March 31, 2017 due to the payment of previously accrued taxes. Accrued income taxes during the three month period ended March 31, 2017 increased by $57,000. Income tax of $57,000 was accrued at March 31, 2017 for the estimated Alternative Minimum Tax on the gain on sale of the Property during 2016. Accrued interest during the three month period ended March 31, 2017 increased by $336,000 due to the amount of interest expense for such period. During the three month period ended March 31, 2017, the Company made no interest or principal payments on its outstanding notes payable and subordinated convertible debentures.

14

PGI INCORPORATED AND SUBSIDIARIES

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (continued)

The Company remains in default on the entire principal amount plus interest (including certain sinking fund and interest payments with respect to the subordinated convertible debentures) of its subordinated convertible debentures and notes payable as well as the remaining accrued interest owed with respect to the collateralized convertible debentures.

The principal and accrued interest amounts due as of March 31, 2017 are as indicated in the following table:

	March 31, 2017
	Principal	Accrued
	Amount Due	Interest
	($ in thousands)
Subordinated convertible debentures:
At 6 1/2 %, due June 1, 1991	$447	$824
At 6%, due May 1, 1992	8,025	23,238
	$8,472	$24,062
Collateralized convertible debentures-related party:
At 14%, due July 8, 1997	$-	$52,915
Notes payable:
At prime plus 2%, all past due	$1,176	$3,163
Non-interest bearing	22	-
	$1,198	$3,163

The Company does not have sufficient funds available (after payment of, or the reserving for the payment of, anticipated future operating expenses) to satisfy the principal or interest obligations on the above debentures and notes payable or any arrearage in preferred dividends.

The Company remains totally dependent upon the sale of parcels of its various remaining properties with respect to its ability to make any future debt service payments.

The Company’s independent registered public accounting firm 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, 2016.

15

PGI INCORPORATED AND SUBSIDIARIES

Forward Looking Statements

The discussion set forth in this Item 2, as well as other portions of this Form 10-Q, may contain forward-looking statements. Such statements are based upon the information currently available to management of the Company and management’s perception thereof as of the date of the Form 10-Q. When used in this Form 10-Q, words such as “anticipates,” “estimates,” “believes,” “expects,” and similar expressions are intended to identify forward-looking statements. Such statements are subject to risks and uncertainties. Actual results of the Company’s operations could materially differ from those forward-looking statements. The differences could be caused by a number of factors or combination of factors including, but not limited to: changes in the real estate market in Florida and the counties in which the Company owns any property; institution of legal action by the bondholders for collection of any amounts due under the subordinated convertible debentures (notwithstanding the Company’s belief that at least a portion of such actions might be barred under applicable statute of limitations); changes in management strategy; and other factors set forth in reports and other documents filed by the Company with the Securities and Exchange Commission from time to time.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not applicable.

Item 4. Controls and Procedures

The Company has evaluated the effectiveness of the design and operation of its disclosure controls and procedures under the supervision and with the participation of its Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”). Based on this evaluation, the Company’s management, including the CEO and CFO, concluded that the Company’s disclosure controls and procedures were effective as of March 31, 2017. There have been no changes in the Company’s internal control over financial reporting during the quarter ended March 31, 2017 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

16

PGI INCORPORATED AND SUBSIDIARIES

PART II OTHER INFORMATION

Item 1. Legal Proceedings

The Company, to its knowledge, currently is not a party to any material legal proceedings.

Item 1A. Risk Factors

Not applicable.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Not applicable.

Item 3. Defaults Upon Senior Securities

See discussion in Item 2 of Part I with respect to defaults under the Company's subordinated convertible debentures, collateralized convertible debentures and other indebtedness and with respect to cumulative preferred dividends in arrears, which discussions are incorporated herein by this reference.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Not applicable.

Item 6. Exhibits

Reference is made to the Exhibit Index hereof for a list of exhibits filed or furnished under this Item.

17

 PGI INCORPORATED AND SUBSIDIARIES

Pursuant to the requirements 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.

	PGI INCORPORATED
	(Registrant)
Date: May 15, 2017	By:	/s/  Laurence A. Schiffer
		Laurence A. Schiffer
		President
		(Duly Authorized Officer, Principal Executive Officer and Principal Financial Officer)

18

PGI INCORPORATED AND SUBSIDIARIES

EXHIBIT INDEX

Exhibit No.	Description
2	Inapplicable.
3.(i)	Inapplicable.
3.(ii)	Inapplicable.
4	Inapplicable.
10	Inapplicable.
11	Statement re: Computation of Per Share Earnings (Set forth in Note 2 of the Notes to Condensed Consolidated Financial Statements (Unaudited) herein).
15	Inapplicable.
18	Inapplicable.
19	Inapplicable.
22	Inapplicable.
23	Inapplicable.
24.	Inapplicable.
31(i).1	Principal Executive Officer certification pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended.
31(i).2	Principal Financial Officer certification pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended.
32.1	Chief Executive Officer certification pursuant to 18 U.S.C. Section 1350.
32.2	Chief Financial Officer certification pursuant to 18 U.S.C. Section 1350.
95	Inapplicable.
99	Inapplicable.
100	Inapplicable.
101	Instance Document, Schema Document, Calculation Linkbase Document, Labels Linkbase Document, Presentation Linkbase Document and Definition Linkbase Document.*

* Furnished with this report.

19

EX-31.1

Exhibit 31(i).1

RULE 13a – 14(a)

CERTIFICATION

I, Laurence A. Schiffer, certify that;

1.

I have reviewed this quarterly report on Form 10-Q of PGI Incorporated;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)

designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)

designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)

evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)

disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.

The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)

all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ Laurence A. Schiffer                             May 15, 2017

Laurence A. Schiffer

Principal Executive Officer

EX-31.2

Exhibit 31(i).2

RULE 13a – 14(a)

CERTIFICATION

I, Laurence A. Schiffer, certify that;

1.

I have reviewed this quarterly report on Form 10-Q of PGI Incorporated;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)

designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)

designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)

evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)

disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.

The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)

all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ Laurence A. Schiffer                                                    May 15, 2017

Laurence A. Schiffer

Principal Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350 *

In connection with the Quarterly Report of PGI Incorporated (the “Company”) on Form 10-Q for the period ended March 31, 2017 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Laurence A. Schiffer, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1)

The Report fully complies with the requirements of section 13(a) or 15(d) , as applicable, of the Securities Exchange Act of 1934; and

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Laurence A. Schiffer   

Laurence A. Schiffer

    Chief Executive Officer (Principal Executive Officer)  May 15, 2017

The foregoing certification is being furnished solely pursuant to 18 U.S.C Section 1350 and is not being filed as part of the Report.

*A signed original of this written statement has been provided to the Company and will be retained by the Company and will be furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350*

In connection with the Quarterly Report of PGI Incorporated (the “Company”) on Form 10-Q for the period ended March 31, 2017 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Laurence A. Schiffer, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1)

The Report fully complies with the requirements of section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Laurence A. Schiffer   

Laurence A. Schiffer

    Chief Financial Officer (Principal Financial Officer)  May 15, 2017

The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Report.

*A signed original of this written statement has been provided to the Company and will be retained by the Company and will be furnished to the Securities and Exchange Commission or its staff upon request.

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Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2017	May 15, 2017
Document And Entity Information
Entity Registrant Name	PGI INC
Entity Central Index Key	0000081157
Document Type	10-Q
Document Period End Date	Mar. 31, 2017
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		5,317,758
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2017

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CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Unaudited) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
ASSETS
Cash	$ 894	$ 958
Land inventories	14	14
Other assets	42	42
Total Assets	950	1,014
LIABILITIES
Accounts payable and accrued expenses	225	230
Accrued real estate taxes	1	4
Accrued income taxes	57	0
Accrued interest:
Subordinated convertible debentures payable	24,062	23,743
Convertible debentures payable-related party	52,915	52,915
Notes payable	3,163	3,146
Credit agreements:
Notes payable	1,198	1,198
Subordinated convertible debentures payable	8,472	8,472
Total Liabilities	90,093	89,708
STOCKHOLDERS' DEFICIENCY
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 plus unpaid cumulative dividends of $14,035)	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	(105,173)	(104,724)
Total stockholders' deficit	(89,143)	(88,694)
Total liabilities and stockholders' deficit	$ 950	$ 1,014

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CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
STOCKHOLDERS' DEFICIENCY
Preferred stock, par value	$ 1.00	$ 1.00
Preferred stock, authorized	5,000,000	5,000,000
Preferred stock - Class A cumulative convertible shares, issued	2,000,000	2,000,000
Preferred stock, liquidation preference (excluding cumulative dividends)	$ 8,000	$ 8,000
Preferred stock, unpaid dividends	$ 14,035
Common stock, par value	$ .10	$ .10
Common stock, authorized	25,000,000	25,000,000
Common stock, issued	5,317,758	5,317,758
Common stock, outstanding	5,317,758	5,317,758

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) $ in Thousands		3 Months Ended
		Mar. 31, 2017	Mar. 31, 2016
REVENUES
Interest income		$ 1	$ 0
Interest income-related party		0	1
Total Revenues		1	1
COSTS, EXPENSES AND OTHER
Interest		336	328
Interest-related party		0	1,973
Taxes and assessments		1	2
Consulting and accounting-related party		10	9
Legal and professional		21	5
General and administrative		25	20
Total costs and expenses		393	2,337
Net Loss before income taxes		(392)	(2,336)
Income tax expense		(57)	0
NET LOSS		$ (449)	$ (2,336)
NET LOSS PER SHARE(*) AVAILABLE TO COMMON STOCKHOLDERS-Basic and diluted	[1]	$ (.11)	$ (.47)

[1] Considers the effect of dividends on preferred stock for the three months ended March 31, 2017 and 2016.

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Statement of Cash Flows [Abstract]
Net cash used in operating activities	$ (64)	$ (29)
Cash flows from investing activities:
Payments received on notes receivable-related party	0	29
Net cash provided by investing activities	0	29
Net change in cash	(64)	0
Cash at beginning of period	958	1
Cash at end of period	$ 894	$ 1

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1. Basis of Presentation

3 Months Ended

Mar. 31, 2017

Accounting Policies [Abstract]

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of PGI Incorporated (“PGI”) and its subsidiaries (the “Company”) have been prepared in accordance with the instructions to Form 10 - Q 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 registered public accounting firm 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, 2016.

The Company was founded in 1958, and up until the mid 1990’s was in the business of building and selling homes, developing and selling home sites and selling undeveloped or partially developed tracts of land. Over approximately the last 25 years, the Company’s business focus and emphasis changed substantially as it has concentrated its sales and marketing efforts almost exclusively on the disposition of its remaining real estate.

The Company’s major efforts and activities have been, and continue to be, to sell assets of the Company, to repay its indebtedness, and to pay the ordinary on-going costs of operation of the Company. While the Company will seek to realize full market value for each remaining asset, the amounts realized may be at substantial variance from its present financial statement carrying value. In management’s judgement, the remaining assets will be insufficient to satisfy much, if any, of the outstanding indebtedness and there will be no recoveries by shareholders. Consequently, there is substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued.

Certain information and note disclosures normally included in the Company’s annual financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Form 10-K annual report for 2016 filed with the Securities and Exchange Commission.

The condensed consolidated balance sheet of the Company as of December 31, 2016 has been derived from the audited consolidated balance sheet as of that date.

The Company remains in default under the indentures governing its unsecured subordinated debentures. (See Management's Discussion and Analysis of Financial Condition and Results of Operations and Notes 8, 9, and 10 to the Company's consolidated financial statements for the year ended December 31, 2016, as contained in the Company's Annual Report on Form 10 - K).

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 months ended March 31, 2017 are not necessarily indicative of operations to be expected for the fiscal year ending December 31, 2017 or any other interim period.

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2. Per Share Data

3 Months Ended

Mar. 31, 2017

Earnings Per Share [Abstract]

Per Share Data

Basic per share amounts are computed by dividing net income (loss), after deducting current period dividends on the Company's preferred stock, by the weighted average number of common shares outstanding during the period. The weighted average number of common shares outstanding for the three months ended March 31, 2017 and 2016 was 5,317,758.

Diluted per share amounts are computed by dividing net income (loss) attributable to common shareholders by the weighted average number of common shares outstanding, after adjusting for the estimated effect of the assumed conversion of all cumulative convertible preferred stock and outstanding convertible debentures, if dilutive, into shares of common stock. For the three months ended March 31, 2017 and 2016, the assumed conversion of all outstanding convertible preferred stock and collateralized convertible debentures would have been anti-dilutive.

The following is a summary of the calculations used in computing basic and diluted loss per share for the three months ended March 31, 2017 and 2016.

	Three Months Ended
	March 31,			March 31,
	2017			2016
	($ in thousands, except
	share and per share data)
Net Loss	$	(449	)	$	(2,336	)
Preferred dividends		(160	)		(160	)
Loss available to common shareholders	$	(609	)	$	(2,496	)
Weighted average number of common shares outstanding		5,317,758			5,317,758
Basic and diluted loss per common share	$	(0.11	)	$	(0.47	)

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3. Statement of Cash Flows

3 Months Ended

Mar. 31, 2017

Statement of Cash Flows [Abstract]

Statement of Cash Flows

The Financial Accounting Standards Board Accounting Standards Codification Topic No. 230, “Statement of Cash Flows”, 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. There were no payments of interest for the three month periods ended March 31, 2017 and March 31, 2016.

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4. Land Inventory

3 Months Ended

Mar. 31, 2017

Real Estate [Abstract]

Land and Improvements

Land inventory consisted of

	March 31,		December 31,
	2017		2016
	($ in thousands)
Fully improved land	$	14	$	14

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5. Other Assets

3 Months Ended

Mar. 31, 2017

Other Assets [Abstract]

Other Assets

Other assets consisted of: 

	March 31,		December 31,
	2017		2016
	($ in thousands)
Deposit with Trustee of 6-1/2% debentures	$	41	$	41
Deferred charges		1		1
	$	42	$	42

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6. Accounts Payable and Accrued Expenses

3 Months Ended

Mar. 31, 2017

Payables and Accruals [Abstract]

Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses consisted of:

	March 31,		December 31,
	2017		2016
	($ in thousands)
Accounts payable	$	30	$	26
Accrued audit & professional		37		46
Accrued consulting fees-related party		1		1
Environmental remediation obligations		17		19
Accrued debenture fees		139		137
Accrued miscellaneous		1		1
	$	225	$	230
Accrued real estate taxes consisted of:
Current real estate taxes	$	1	$	4

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7. Credit Agreements, Notes Payable, Subordinated and Convertible Debentures Payable

3 Months Ended

Mar. 31, 2017

Credit Agreements Notes Payable Subordinated And Convertible Debentures Payable

Credit Agreements, Notes Payable, Subordinated and Convertible Debentures Payable

Credit agreements and notes payable consisted of the following:

	March 31,		December 31,
	2017		2016
	($ in thousands)
Notes payable - $1,176,000 bearing interest at prime plus 2%, the remainder non-interest bearing, all past due		1,198		1,198
Subordinated convertible debentures payable:
At 6-1/2% interest; due June 1, 1991		447		447
At 6% interest; due May 1, 1992		8,025		8,025
		8,472		8,472
	$	9,670	$	9,670

The Trustee of the 6.5% unsecured subordinated convertible debentures, which matured in June, 1991, with an original face amount of $1,034,000, provided notice of final distribution to holders of such debentures on September 2, 2014. In connection with such final distributions, the Trustee has maintained a debenture reserve fund with a balance of $41,000 as of March 31, 2017 and December 31, 2016, available for final distribution to holders of such debentures who surrender their respective debenture certificates.

During the three month period ended March 31, 2017 and during the year ended December 31, 2016, there were no unsecured subordinated convertible debentures that were surrendered by their respective debenture holders and no funds were utilized from the debenture reserve account.

As of March 31, 2017 and December 31, 2016 the outstanding principal balance on such 6.5% unsecured subordinated convertible debentures that were not surrendered by the respective holders equals $447,000 plus accrued and unpaid interest of $824,000 and $817,000, respectively. If and when such remaining debentures are surrendered to the Trustee, the applicable portion of such principal and accrued interest will similarly be recorded as debt and accrued interest forgiveness. As the Company has consistently stated in prior filings, the Company believes that any potential claims by the respective debenture holders on such 6.5% unsecured subordinated convertible debentures would be barred under the applicable statutes of limitations.

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8. Income Taxes

3 Months Ended

Mar. 31, 2017

Income Tax Disclosure [Abstract]

Income Taxes

Income tax of $57,000 was accrued at March 31, 2017 for the estimated 2016 Alternative Minimum Tax on the 2016 gain on sales of real estate. At December 31, 2016, the Company had an operating loss carryforward of approximately $66,420,000 available to reduce future taxable income. These operating losses expire at various dates through 2035.

The following summarizes the temporary differences of the Company at March 31, 2017 and December 31, 2016 at the statutory rate:        

	March 31,			December 31,
	2017			2016
	($ in thousands)
Deferred tax asset
Net operating loss carryforward	$	25,411		$	25,240
Expenses capitalized under IRC 263(a)		56			56
Environmental liability		7			7
Valuation allowance		(25,474	)		(25,303	)
Total deferred tax asset		—			—

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9. Fair Value of Financial Instruments

3 Months Ended

Mar. 31, 2017

Notes to Financial Statements

Fair Value of Financial Instruments

The carrying amount of the Company’s financial instruments, other than debt, approximates fair value at March 31, 2017 and December 31, 2016 because of the short maturity of those instruments. It was not practicable to estimate the fair value of the Company’s notes payable and its convertible debentures because these debts are in default causing no basis for estimating value by reference to quoted market prices or current rates offered to the Company for debt of the same remaining maturities.

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2. Per Share Data (Tables)

3 Months Ended

Mar. 31, 2017

Earnings Per Share [Abstract]

Summary of the calculations used in computing basic and diluted loss per share

	Three Months Ended
	March 31,			March 31,
	2017			2016
	($ in thousands, except
	share and per share data)
Net Loss	$	(449	)	$	(2,336	)
Preferred dividends		(160	)		(160	)
Loss available to common shareholders	$	(609	)	$	(2,496	)
Weighted average number of common shares outstanding		5,317,758			5,317,758
Basic and diluted loss per common share	$	(0.11	)	$	(0.47	)

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4. Land Inventory (Tables)

3 Months Ended

Mar. 31, 2017

Real Estate [Abstract]

Land and improvement inventories

	March 31,		December 31,
	2017		2016
	($ in thousands)
Fully improved land	$	14	$	14

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5. Other Assets (Tables)

3 Months Ended

Mar. 31, 2017

Other Assets [Abstract]

Other assets

	March 31,		December 31,
	2017		2016
	($ in thousands)
Deposit with Trustee of 6-1/2% debentures	$	41	$	41
Deferred charges		1		1
	$	42	$	42

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6. Accounts Payable and Accrued Expenses (Tables)

3 Months Ended

Mar. 31, 2017

Payables and Accruals [Abstract]

Accounts payable and accrued expenses

	March 31,		December 31,
	2017		2016
	($ in thousands)
Accounts payable	$	30	$	26
Accrued audit & professional		37		46
Accrued consulting fees-related party		1		1
Environmental remediation obligations		17		19
Accrued debenture fees		139		137
Accrued miscellaneous		1		1
	$	225	$	230
Accrued real estate taxes consisted of:
Current real estate taxes	$	1	$	4

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7. Credit Agreements, Notes Payable, Subordinated and Convertible Debentures Payable (Tables)

3 Months Ended

Mar. 31, 2017

Credit Agreements Notes Payable Subordinated And Convertible Debentures Payable

Credit agreements with the Company

	March 31,		December 31,
	2017		2016
	($ in thousands)
Notes payable - $1,176,000 bearing interest at prime plus 2%, the remainder non-interest bearing, all past due		1,198		1,198
Subordinated convertible debentures payable:
At 6-1/2% interest; due June 1, 1991		447		447
At 6% interest; due May 1, 1992		8,025		8,025
		8,472		8,472
	$	9,670	$	9,670

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8. Income Taxes (Tables)

3 Months Ended

Mar. 31, 2017

Income Tax Disclosure [Abstract]

Summary of the temporary differences

	March 31,			December 31,
	2017			2016
	($ in thousands)
Deferred tax asset
Net operating loss carryforward	$	25,411		$	25,240
Expenses capitalized under IRC 263(a)		56			56
Environmental liability		7			7
Valuation allowance		(25,474	)		(25,303	)
Total deferred tax asset		—			—

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2. Per Share Data (Details) - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended
		Mar. 31, 2017	Mar. 31, 2016
Basic and Diluted loss per share
Net Loss		$ (449)	$ (2,336)
Preferred Dividends		(160)	(160)
Loss Available to Common Shareholders		$ (609)	$ (2,496)
Weighted Average Number Of Common Shares Outstanding		5,317,758	5,317,758
Basic and Diluted Loss Per Common Share	[1]	$ (.11)	$ (.47)

[1] Considers the effect of dividends on preferred stock for the three months ended March 31, 2017 and 2016.

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2. Per Share Data (Details Narrative) - shares	Mar. 31, 2017	Dec. 31, 2016
Per Share Data Details Narrative
Common shares outstanding	5,317,758	5,317,758

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4. Land Inventory (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Land and improvement inventories
Fully improved land	$ 14	$ 14

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5. Other Assets (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Other assets consisted of:
Deposit with Trustee of 6-1/2% debentures	$ 41	$ 41
Deferred charges	1	1
Total Other Assets	$ 42	$ 42

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6. Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Accounts payable and accrued expenses
Accounts payable	$ 30	$ 26
Accrued audit & professional	37	46
Accrued consulting fees-related party	1	1
Environmental remediation obligations	17	19
Accrued debenture fees	139	137
Accrued miscellaneous	1	1
Total	225	230
Accrued real estate taxes consisted of:
Current real estate taxes	$ 1	$ 4

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7. Credit Agreements, Notes Payable, Subordinated and Convertible Debentures Payable (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Credit Agreements Notes Payable Subordinated And Convertible Debentures Payable
Notes payable - $1,176,000 bearing interest at prime plus 2%,the remainder non-interest bearing, all past due	$ 1,198	$ 1,198
Subordinated debentures payable:
At 6-1/2% interest; due June 1, 1991	447	447
At 6% interest; due May 1, 1992	8,025	8,025
Subordinated convertible debentures payable	8,472	8,472
Total	$ 9,670	$ 9,670

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8. Income Taxes (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Deferred tax asset:
Net operating loss carryforward	$ 25,411	$ 25,240
Expenses capitalized under IRC 263(a)	56	56
Environmental liability	7	7
Valuation allowance	(25,474)	(25,303)
Total deferred tax asset	$ 0	$ 0

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8. Income Taxes (Details Narrative) $ in Thousands	12 Months Ended
	Dec. 31, 2016 USD ($)
Income Taxes Details Narrative
Operating loss carryforward	$ 66,420
Operating losses expire date	These operating losses expire at various dates through 2035.