U.S SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10 - QSB
(Mark One)
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES
|X| EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2006
----------------------
TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES
| | EXCHANGE ACT OF 1934
For the transition period from to
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Commission File Number 1-6471
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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)
N/A
---------------------------------------------------------------
(Former Name, Former Address and Former Fiscal year, if changed
since last report)
Check whether the issuer (1) filed all reports required to be filed
by Section 13 or 15 (d) of the Exchange Act during the past 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 X No
---------- ----------
Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act).
Yes No X
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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
14, 2006, there were 5,317,758 shares of the issuer's common stock, $.10 par
value per share, outstanding.
Transitional Small Business Disclosure Format (Check one):
Yes No X
---------- ----------
1
PGI INCORPORATED AND SUBSIDIARIES
Form 10 - QSB
For the Quarter Ended September 30, 2006
Table of Contents
-----------------
Form 10 - QSB
Page No.
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PART I Financial Information
Item 1. Financial Statements
Condensed Consolidated Statements of Financial Position
September 30, 2006 (Unaudited) and December 31, 2005 3
Condensed Consolidated Statements of Operations (Unaudited)
Three and Nine Months Ended September 30, 2006 and 2005 4
Condensed Consolidated Statements of Cash Flows (Unaudited)
Nine Months Ended September 30, 2006 and 2005 5
Notes to Consolidated Financial Statements (Unaudited) 6
Item 2. Management's Discussion and Analysis or
Plan of Operation 12
Item 3. Controls and Procedures 16
PART II Other Information
Item 1. Legal Proceedings 17
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 17
Item 3. Defaults Upon Senior Securities 17
Item 4. Submission of Matters to a Vote of Security Holders 17
Item 5. Other Information 17
Item 6. Exhibits 17
SIGNATURE 18
EXHIBIT INDEX 19
2
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
PGI INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
($ in thousands)
September 30, December 31,
2006 2005
---- ----
(Unaudited)
ASSETS
Cash and cash equivalents $ 4 $ 147
Restricted cash 5 255
Receivables 934 633
Land and improvement inventories 642 637
Other assets 199 178
-------- --------
$ 1,784 $ 1,850
======== ========
LIABILITIES
Accounts payable & accrued expenses $ 55 $ 49
Accrued real estate taxes 11 312
Accrued interest:
Primary Lender 22 5
Debentures 27,048 24,752
Other 2,417 2,331
Credit Agreements -
Primary lender 500 500
Notes payable 1,198 1,198
Subordinated debentures payable 9,059 9,059
Convertible debentures payable 1,500 1,500
-------- --------
$ 41,810 $ 39,706
-------- --------
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
$8,000,000 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 (56,056) (53,886)
-------- --------
(40,026) (37,856)
-------- --------
$ 1,784 $ 1,850
======== ========
See accompanying notes to condensed consolidated financial statements.
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 Nine Months Ended
------------------ -----------------
September 30, September 30, September 30, September 30,
2006 2005 2006 2005
---- ---- ---- ----
REVENUES
Real Estate Sales $ - $ - $ 10 $ 195
Interest Income 22 12 60 30
Other Income 313 - 318 192
-------- -------- -------- --------
335 12 388 417
-------- -------- -------- --------
COSTS AND EXPENSES
Cost of Real Estate Sales $ - $ - $ - $ 14
Interest 832 749 2,431 2,188
Taxes & Assessments 4 2 13 (3)
Consulting & Accounting 11 11 31 31
Legal & Professional 14 2 37 17
General & Administrative 13 19 46 38
-------- -------- -------- --------
874 783 2,558 2,285
-------- -------- -------- --------
NET (LOSS) $ (539) $ (771) $ (2,170) $ (1,868)
======== ======== ======== ========
NET (LOSS) PER SHARE (*) $ (.13) $ (.18) $ (.50) $ (.44)
======== ======== ======== ========
* Considers the effect of cumulative preferred dividends in arrears for
the three and nine months ended September 30, 2006 and 2005.
See accompanying notes to condensed consolidated financial statements
4
Part I Financial Information (Continued)
PGI INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
($ in thousands)
(Unaudited)
Nine Months Ended
-----------------
September 30, September 30,
2006 2005
---- ----
Net cash provided by (used in) operating activities $ (107) $ 238
-------- --------
Cash flows from investing activities:
Proceeds from restricted cash 252 -
Investment in notes receivable (273) (110)
Purchases of inventory and deferred expenditures (15) (4)
-------- --------
Net cash (used in) investing activities (36) (114)
-------- --------
Net increase (decrease) in cash (143) 124
Cash at beginning of period 147 201
-------- --------
Cash at end of period $ 4 $ 325
======== ========
See accompanying notes to condensed consolidated financial statements
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 and its subsidiaries (the "Company") have been
prepared in accordane 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 condensed consolidated financial statements
for the year ended December 31, 2005.
The consolidated balance sheet as of December 31, 2005 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 and collateralized convertible
debentures and in default of its primary debt obligations. (See
Management's Discussion and Analysis or Plan of Operation and Notes 9,
10, 11, and 16 to the Company's condensed consolidated financial
statements for the year ended December 31, 2005, 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 nine
months ended September 30, 2006 are not necessarily indicative of
operations to be expected for the fiscal year ending December 31, 2006
or any other interim period.
(2) Per Share Data
Basic 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. The average
number of common shares outstanding for the nine months ended September
30, 2006 and 2005 was 5,317,758.
Diluted per share amounts are computed by dividing net income (loss) by
the average number of common shares outstanding, after adjusting for
the estimated effect of 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,
2006 and 2005, the assumed conversion of all cumulative convertible
preferred stock and collateralized convertible debentures would have
been anti-dilutive.
6
PGI INCORPORATED AND SUBSIDIARIES
Notes to Condensed 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, 2006 and 2005.
Three Months Ended Nine Months Ended
------------------ -----------------
September 30, September 30, September 30, September 30,
2006 2005 2006 2005
---- ---- ---- ----
Net (Loss) $ (539,000) $ (771,000) $ (2,170,000) $ (1,868,000)
Preferred Dividends $ (160,000) $ (160,000) $ (480,000) $ (480,000)
------------ ------------ ------------ ------------
(Loss) Available to
Common Shareholders $ (699,000) $ (931,000) $ (2,650,000) $ (2,348,000)
============ ============ ============ ============
Weighted Average Number
Of Shares Outstanding 5,317,758 5,317,758 5,317,758 5,317,758
Basic and Diluted (Loss)
Per Share $ (.13) $ (.18) $ (.50) $ (.44)
(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, 2006
and 2005 was $32,000 and $41,000, respectively.
(4) Restricted Cash
Restricted cash includes restricted proceeds held by the primary lender
as collateral for debt repayment.
7
PGI INCORPORATED AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (continued)
(5) Receivables
Net receivables consisted of:
September 30, December 31,
2006 2005
---- ----
($ in thousands)
Receivables on real estate sales $ - $ 1
Other notes receivable - related party 873 600
Other interest receivable 61 32
-------- --------
$ 934 $ 633
======== ========
(6) Land and Improvements
Land and improvement inventories consisted of:
September 30, December 31,
2006 2005
---- ----
($ in thousands)
Unimproved land $ 626 $ 621
Fully improved land 16 16
-------- --------
$ 642 $ 637
======== ========
(7) Other Assets
Other assets consisted of:
September 30, December 31,
2006 2005
---- ----
($ in thousands)
Deposit with Trustee of 6-1/2% debentures $ 170 $ 165
Other 29 13
-------- --------
$ 199 $ 178
======== ========
8
PGI INCORPORATED AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (continued)
(8) Accounts Payable and Accrued Expenses Accounts payable and accrued
expenses consisted of:
September 30, December 31,
2006 2005
---- ----
($ in thousands)
Accounts payable $ 17 $ 12
Accrued audit & professional 23 31
Accrued legal 1 -
Accrued consulting fees 4 6
Accrued accounting services 6 -
Accrued miscellaneous 4 -
-------- --------
$ 55 $ 49
======== ========
Accrued Real Estate Taxes consisted of:
Current real estate taxes $ 11 $ -
Delinquent real estate taxes - 312
-------- --------
$ 11 $ 312
======== ========
(9) 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:
September 30, December 31,
2006 2005
---- ----
($ in thousands)
Credit agreements - primary lender:
(maturing June 1, 1997, bearing interest
at prime plus 5%) $ 500 $ 500
Notes payable - $1,176,000
bearing interest at prime plus 2% 1,198 1,198
-------- --------
$ 1,698 $ 1,698
-------- --------
Subordinated debentures payable:
At 6-1/2% interest; due June 1, 1991 1,034 1,034
At 6% interest; due May 1, 1992 8,025 8,025
-------- --------
$ 9,059 $ 9,059
-------- --------
9
PGI INCORPORATED AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (continued)
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
------- -------
$12,257 $12,257
======= =======
(10) Real Estate Sales and Other Income
Real Estate Sales and Cost of Sales for the three and nine months
ended September 30, 2006 and 2005 were as follows:
Three Months Ended Nine Months Ended
------------------ -----------------
($ in thousands) ($ in thousands)
September 30, September 30, September 30, September 30,
2006 2005 2006 2005
---- ---- ---- ----
Real Estate Sales $ - $ - $ 10 $195
Cost of Sales - - - 14
In the second quarter of 2006, the Company completed the sale of a
small piece of land at the price of $10,000. This odd remnant of a lot
was not carried for any value on the Company's books.
In the first quarter of 2005, the Company completed the sale of an
unusual real estate parcel, at the price of $175,000. This parcel was
not carried for any value on the Company's books, inasmuch as it was an
undevelopable strip of mangrove fringe. However, because of the height
of the mangroves, the adjoining property owner purchased this fringe
strip in order to be able to enhance the view amenity on his proposed
development.
Other income for the nine months ended September 30, 2006 and 2005 was
$318,000 and $192,000, respectively. Other income for the three and
nine months ended September 30, 2006 includes $312,000 as a result of
the reversal of accrued real estate taxes from 1997 which had been in
litigation with Citrus County, and has been finally concluded. During
the nine months ended September 30, 2005, the Company foreclosed on ten
lots in Citrus County and received proceeds of $134,000 for delinquent
receivables.
(11) Income Taxes
At December 31, 2005, the Company had an operating loss carryforward of
approximately $38,000,000 to reduce future taxable income. These
operating losses expire at various dates through 2025.
10
PGI INCORPORATED AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (continued)
The following summarizes the temporary differences of the Company at
September 30, 2006 and December 31, 2005 at the current statutory rate:
September 30, December 31,
2006 2005
---- ----
($ in thousands)
Deferred tax asset:
Net operating loss carryforward $ 15,250 $ 14,729
Adjustments to reduce land to net realizable value 12 12
Expenses capitalized under IRC 263(a) 56 56
Valuation allowance (15,146) (14,625)
-------- --------
172 172
Deferred tax liability:
Basis difference of land and improvement inventories 172 172
-------- --------
Net deferred tax asset $ - $ -
======== ========
11
PGI INCORPORATED AND SUBSIDIARIES
Item 2. Management's Discussion and Analysis or Plan of Operation
Preliminary Note
The Company's most valuable remaining asset is a parcel of 366 acres
located in Hernando County, Florida. The Company also owns some minor
parcels of real estate which are sites scattered throughout Charlotte
County, Florida, but most of these are subject to easements which markedly
reduce their value and/or consist of wetlands of indeterminable value. As of
September 30, 2006, the Company also owns 8 single family lots, located in
Citrus County, Florida.
The 366 acre parcel in Hernando County is difficult to value because of
uncertainty related to the possible extension of the Suncoast Expressway,
which terminates on the south side of Route 98 opposite the subject
property. Planning continues for the proposed northward continuation of the
Suncoast Expressway, with the route presently believed to be the most
probable being along the western boundary of this parcel of property.
However, until and unless the uncertainty regarding the future expansion of
the Suncoast Expressway is resolved, planning with respect to this property
is difficult.
Results of Operations
Revenues for the first nine months of 2006 decreased by $29,000 to
$388,000 from $417,000 for the comparable 2005 period primarily as a result
of less real estate sales revenue of $185,000, offset by an increase in
other income of $126,000 as further described below. Expenses for the nine
month period ended September 30, 2006 increased by $273,000 when compared to
the same period in 2005 primarily resulting from an increase in interest
expense of $243,000. In addition, taxes and assessments increased during the
first nine months of 2006 by $16,000 compared to the same period in 2005 as
a result of a negative expense in 2005 due to the reversal of accrued taxes
on lots for which foreclosure was completed in 2005 by sales for delinquent
receivables. As a result, a net loss of $2,170,000 was incurred for the
first nine months of 2006 compared to a net loss of $1,868,000 for the first
nine months of 2005. After consideration of cumulative preferred dividends
in arrears, totaling $480,000 for each of the nine months ended September
30, 2006 and 2005, a net loss per share of $(.50) and $(.44) was reported
for the nine month periods ended September 30, 2006 and 2005, respectively.
The total cumulative preferred dividends in arrears through September 30,
2006 is $7,315,000.
Real Estate Sales and Cost of Sales consisted of:
Three Months Ended Nine Months Ended
------------------ -----------------
($ in thousands) $ in thousands)
September 30, September 30, September 30, September 30,
2006 2005 2006 2005
---- ---- ---- ----
Real Estate Sales $ - $ - $ 10 $195
Cost of Sales - - - 14
12
PGI INCORPORATED AND SUBSIDIARIES
Item 2. Management's Discussion and Analysis or Plan of Operation (continued)
In the second quarter of 2006, the Company completed the sale of a
small piece of land at the price of $10,000. This odd remnant of a lot was
not carried for any value on the Company's books. There were no sales of
real estate in the second or third quarters of 2005.
In the first quarter of 2005, the Company completed the sale of an
unusual real estate parcel, at the price of $175,000. This parcel was not
carried for any value on the Company's books, inasmuch as it was an
undevelopable strip of mangrove fringe. However, because of the height of
the mangrove, the adjoining property owner purchased this fringe strip in
order to be able to enhance the view amenity on his proposed developments.
Other income for the nine months ended September 30, 2006 and 2005 was
$318,000 and $192,000, respectively. Other income for the three and nine
months ended September 30, 2006 includes $312,000 which resulted from the
reversal of accrued real estate taxes due to the ultimate conclusion of the
lawsuit in Citrus County regarding the 1997 agricultural exemption status of
the Company's undeveloped Sugarmill Woods property. The initial resolution
of this lawsuit was reported in the Form 10-QSB filed by the Company on May
13, 2005. During the nine months ended September 30, 2005, the Company
foreclosed on ten lots and received proceeds of $134,000 for delinquent
contract receivables.
As of September 30, 2006, the Company remained in default of its
primary lender indebtedness with PGIP, LLC ("PGIP") of $500,000. PGIP holds
restricted funds of the Company pursuant to an escrow agreement whereby
funds may be disbursed (i) as requested by the Company and agreed to by
PGIP, (ii) as deemed necessary and appropriate by PGIP, 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 funds held by PGIP at
September 30, 2006 and December 31, 2005 were $5,000 and $255,000,
respectively. With the approval of PGIP, the Company utilized $252,000 of
the restricted escrow funds during the nine months ended September 30, 2006
to pay $32,000 in accrued interest to PGIP, $200,000 to invest in a short
term note with an affiliate of L-PGI, the Company's preferred shareholder,
Love Investment Company, and $20,000 for operating expenditures. The primary
parcel of real estate owned by the Company, totaling 366 acres (the
"Retained Acreage"), remains subject to the primary lender indebtedness.
Cash used in operating activities for the nine months ended September
30, 2006 was $107,000 compared to cash provided by operating activities of
$238,000 for the comparable 2005 period, primarily as a result of the sales
of the unusual real estate parcels and the recovery of contracts receivable
during the 2005 period, both as described above, which did not occur during
the comparable period in 2006. Net cash provided by investing activities
during the nine months ended September 30, 2006 was from proceeds of
restricted cash in the amount of $252,000. Net cash used in investing
activities during the nine months ended September 30, 2006 consisted of a
$273,000 investment in a short-term note with Love Investment Company, an
affiliate of L-PGI, the Company's preferred shareholder, and $15,000 in real
estate development expenditures.
13
PGI INCORPORATED AND SUBSIDIARIES
Item 2. Management's Discussion and Analysis or Plan of Operation (continued)
Analysis of Financial Condition
Total assets decreased by $66,000 at September 30, 2006 compared to
total assets at December 31, 2005, reflecting the following changes:
September 30, December 31, Increase
2006 2005 (Decrease)
---- ---- ----------
($ in thousands)
Cash and cash equivalents $ 4 $ 147 $ (143)
Restricted cash 5 255 (250)
Receivables 934 633 301
Land and improvement inventories 642 637 5
Other assets 199 178 21
-------- -------- --------
$ 1,784 $ 1,850 $ (66)
======== ======== ========
Liabilities were approximately $41.8 million at September 30, 2006
compared to approximately $39.7 million at December 31, 2005, reflecting the
following changes:
September 30, December 31, Increase
2006 2005 (Decrease)
---- ---- ----------
($ in thousands)
Accounts payable & accrued expenses $ 55 $ 49 $ 6
Accrued real estate taxes 11 312 (301)
Accrued interest 29,487 27,088 2,399
Credit agreements - primary lender 500 500 -
Notes 1,198 1,198 -
Convertible subordinated
debentures payable 9,059 9,059 -
Convertible debentures payable 1,500 1,500 -
-------- -------- --------
$ 41,810 $ 39,706 $ 2,104
======== ======== ========
The Company remains totally dependent upon the sale of its parcels
of property to fund its operations and debt service requirements.
14
PGI INCORPORATED AND SUBSIDIARIES
Item 2. Management's Discussion and Analysis or Plan of Operation (continued)
The Company remains in default of the entire principal amount plus
interest,(including certain sinking fund and interest payments with respect
to its subordinated debentures) on its subordinated and convertible
debentures and notes payable, as well as its primary lender indebtedness
with PGIP. The amounts due are as indicated in the following table:
September 30, 2006
------------------
Principal Accrued
Amount Due Interest
---------- --------
($ in thousands)
Subordinated debentures:
------------------------
At 6 1/2%, due June 1, 1991 $ 1,034 $ 1,166
At 6%, due May 1, 1992 8,025 11,684
-------- --------
$ 9,059 $ 12,850
======== ========
Collateralized convertible debentures:
--------------------------------------
At 14%, due July 8, 1997 $ 1,500 $ 14,198
======== ========
Notes Payable:
--------------
At prime plus 2% $ 1,176 $ 2,417
on-interest bearing 22 -
-------- --------
$ 1,198 $ 2,417
======== ========
Primary Lender: $ 500 $ 22
--------------- ======== ========
The Company does not have sufficient funds available to satisfy either
principal or interest obligations on the above debentures and notes payable.
Forward Looking Statements
--------------------------
The discussion set forth in this Item 2, as well as other portions of this
Form 10-QSB, 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-QSB. When
used in this Form 10-QSB, 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 or
convertible debentures; continued failure by governmental authorities to
make a decision with respect to the Suncoast Expressway as described under
Item 2; 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.
15
PGI INCORPORATED AND SUBSIDIARIES
Item 3. 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 September 30, 2006. There have been no
changes in the Company's internal control over financial reporting during
the quarter ended September 30, 2006 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 is a party to routine legal proceedings incidental to
the normal operation of its business. The Company does not believe that the
resolution of any such proceedings individually, or collectively, will have
a material effect on its financial position.
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 1 with respect to defaults on the
Company's subordinated debentures and collateralized convertible debentures
and with respect to cumulative preferred dividends in arrears, which
discussions are 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
Reference is made to the Exhibit Index hereof for a list of exhibits
filed under this Item.
17
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, 2006 /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
-------------
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.
20. Inapplicable.
22. Inapplicable.
23. Inapplicable.
24. Inapplicable.
31.1 Principal Executive Officer certification pursuant to Rule 13a-14(a)
or 15d-14(a) under the Securities Exchange Act of 1934, as amended.
31.2 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.
19