FLORIDA | 59-0867335 | |
(State or other jurisdiction of incorporation) | (I.R.S. Employer Identification No.) |
(Do not check if a smaller reporting company) |
Form 10 - Q Page No. | |||
PART I | FINANCIAL INFORMATION | ||
Item 1. | Financial Statements | ||
June 30, 2016 (Unaudited) and December 31, 2015 | 3 | ||
Three and Six Months Ended | 4 | ||
Six Months Ended | 5 | ||
6 | |||
Financial Condition and Results of Operations | |||
20 | |||
PART II | OTHER INFORMATION | ||
Item 1. | Legal Proceedings | 21 | |
Item 1A. | Risk Factors | 21 | |
21 | |||
Item 4. | Mine Safety Disclosures | 21 | |
Item 5. | Other Information | 21 | |
Item 6. | Exhibits | 21 | |
SIGNATURE | |||
EXHIBIT INDEX | |||
PGI INCORPORATED AND SUBSIDIARIES | ||
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION | ||
($ in thousands, except share and per share data) | ||
June 30, | December 31, | |
2016 | 2015 | |
(Unaudited) | ||
ASSETS | ||
Cash | $1,071 | $1 |
Restricted cash | - | 5 |
Receivables-related party | - | 178 |
Land and improvement inventories | 14 | 639 |
Other assets | 43 | 44 |
$1,128 | $867 | |
LIABILITIES | ||
Accounts payable and accrued expenses | $209 | $202 |
Accrued real estate taxes | 2 | 8 |
Accrued interest: | ||
Primary lender-related party | - | 450 |
Subordinated convertible debentures payable | 23,110 | 22,484 |
Convertible debentures payable-related party | 52,915 | 54,558 |
Notes payable | 3,114 | 3,081 |
Credit agreements: | ||
Primary lender-related party | - | 500 |
Notes payable | 1,198 | 1,198 |
Subordinated convertible debentures payable | 8,472 | 8,472 |
Convertible debentures payable-related party | - | 1,500 |
89,020 | 92,453 | |
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 $13,555) | 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 | (103,922) | (107,616) |
(87,892) | (91,586) | |
$1,128 | $867 |
March 31, | December 31, | |||||||
2016 | 2015 | |||||||
(Unaudited) | ||||||||
ASSETS | ||||||||
Cash | $ | 1 | $ | 1 | ||||
Restricted cash | 5 | 5 | ||||||
Receivables-related party | 149 | 178 | ||||||
Land and improvement inventories | 639 | 639 | ||||||
Other assets | 46 | 44 | ||||||
$ | 840 | $ | 867 | |||||
LIABILITIES | ||||||||
Accounts payable and accrued expenses | $ | 216 | $ | 202 | ||||
Accrued real estate taxes | 2 | 8 | ||||||
Accrued interest: | ||||||||
Primary lender-related party | 460 | 450 | ||||||
Subordinated convertible debentures payable | 22,796 | 22,484 | ||||||
Convertible debentures payable-related party | 56,520 | 54,558 | ||||||
Notes payable | 3,098 | 3,081 | ||||||
Credit agreements: | ||||||||
Primary lender-related party | 500 | 500 | ||||||
Notes payable | 1,198 | 1,198 | ||||||
Subordinated convertible debentures payable | 8,472 | 8,472 | ||||||
Convertible debentures payable-related party | 1,500 | 1,500 | ||||||
94,762 | 92,453 | |||||||
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 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 | (109,952 | ) | (107,616 | ) | ||||
(93,922 | ) | (91,586 | ) | |||||
$ | 840 | $ | 867 |
PGI INCORPORATED AND SUBSIDIARIES | ||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
($ in thousands, except per share data) | ||||
(Unaudited) | ||||
Three Months Ended | Six Months Ended | |||
June 30, | June 30, | June 30, | June 30, | |
2016 | 2015 | 2016 | 2015 | |
REVENUES | ||||
Real estate sales | $9,000 | $- | $9,000 | $- |
Interest income-related party | 1 | 2 | 2 | 5 |
9,001 | 2 | 9,002 | 5 | |
COSTS, EXPENSES AND OTHER | ||||
Cost of real estate sales | �� | |||
and expenses of sale | 745 | - | 745 | - |
Interest | 330 | 323 | 658 | 643 |
Forgiveness of debt and | ||||
interest | - | (24) | - | (209) |
Interest-related party | 1,859 | 1,780 | 3,832 | 3,500 |
Taxes and assessments | 2 | 2 | 4 | 5 |
Consulting and accounting- | ||||
related party | 9 | 10 | 18 | 19 |
Legal and professional | 6 | 2 | 11 | 6 |
General and administrative | 20 | 22 | 40 | 41 |
2,971 | 2,115 | 5,308 | 4,005 | |
NET INCOME (LOSS) | $6,030 | $(2,113) | $3,694 | $(4,000) |
NET INCOME (LOSS) PER SHARE(*) | ||||
AVAILABLE TO COMMON | ||||
STOCKHOLDERS-BASIC | $1.10 | $(0.43) | $0.63 | $(0.81) |
DILUTED INCOME (LOSS) PER SHARE (*) | ||||
AVAILABLE TO COMMON | ||||
STOCKHOLDERS | $0.60 | $(0.43) | $0.39 | $(0.81) |
Three Months Ended | ||||||||
March 31, | March 31, | |||||||
2016 | 2015 | |||||||
REVENUES | ||||||||
Interest income-related party | $ | 1 | $ | 3 | ||||
1 | 3 | |||||||
COSTS, EXPENSES AND OTHER | ||||||||
Interest | 328 | 320 | ||||||
Forgiveness of debt and interest | - | (185 | ) | |||||
Interest-related party | 1,973 | 1,720 | ||||||
Taxes and assessments | 2 | 3 | ||||||
Consulting and accounting- related party | 9 | 9 | ||||||
Legal and professional | 5 | 4 | ||||||
General and administrative | 20 | 19 | ||||||
2,337 | 1,890 | |||||||
NET LOSS | $ | (2,336 | ) | $ | (1,887 | ) | ||
NET LOSS PER SHARE(*) AVAILABLE TO COMMON STOCKHOLDERS-Basic and diluted | $ | (0.47 | ) | $ | (0.38 | ) |
PGI INCORPORATED AND SUBSIDIARIES | ||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||
($ in thousands) | ||
(Unaudited) | ||
Six Months Ended | ||
June 30, | June 30, | |
2016 | 2015 | |
Net cash provided by (used in) operating activities | $2,887 | $(77) |
Cash Flows from investing activities: | ||
Payments received on notes receivable-related party | 178 | 77 |
Release of restricted cash | 5 | - |
Net cash provided by investing activities | 183 | 77 |
Cash Flows from financing activities: | ||
Principal payments on debt-related party | (2,000) | - |
Net cash used in financing activities | (2,000) | - |
Net change in cash | 1,070 | - |
Cash at beginning of period | 1 | 1 |
Cash at end of period | $1,071 | $1 |
Three Months Ended | ||||||||
March 31, | March 31, | |||||||
2016 | 2015 | |||||||
Net cash used in operating activities | $ | (29 | ) | $ | (27 | ) | ||
Cash Flows from investing activities: | ||||||||
Proceeds from notes receivable-related party | 29 | 27 | ||||||
Net cash provided by investing activities | 29 | 27 | ||||||
Net change in cash | - | - | ||||||
Cash at beginning of period | 1 | 1 | ||||||
Cash at end of period | $ | 1 | $ | 1 |
(1) Basis of Presentation |
Three Months Ended | Three Months Ended | Six Months Ended | ||||||||||
March 31, | March 31, | June 30, | ||||||||||
2016 | 2015 | 2016 | 2015 | 2016 | 2015 | |||||||
Net Loss | $ | (2,336,000 | ) | $ | (1,887,000 | ) | ||||||
Net income (loss) | $6,030,000 | $(2,113,000) | $3,694,000 | $(4,000,000) | ||||||||
Preferred dividends | (160,000 | ) | (160,000 | ) | (160,000) | (320,000) | ||||||
Loss Available to | $ | (2,496,000 | ) | $ | (2,047,000 | ) | ||||||
Income (Loss) Available to | $5,870,000 | $(2,273,000) | $3,374,000 | $(4,320,000) | ||||||||
Common shareholders | ||||||||||||
Weighted Average Number | ||||||||||||
Of Common Shares | ||||||||||||
Outstanding | 5,317,758 | 5,317,758 | ||||||||||
Outstanding (Basic) | 5,317,758 | |||||||||||
Weighted Average Number | ||||||||||||
of Common Shares | ||||||||||||
Outstanding (Diluted) | 10,386,223 | |||||||||||
Basic and Diluted Loss | ||||||||||||
Basic Income (Loss) | ||||||||||||
Per Share | $ | (0.47 | ) | $ | (0.38 | ) | $1.10 | $(0.43) | $0.63 | $(0.81) | ||
Diluted Income (Loss) | ||||||||||||
Per Share | $0.60 | $(0.43) | $0.39 | $(0.81) |
June 30, | December 31, | |
2016 | 2015 | |
($ in thousands) | ||
Notes receivable - related party | $- | $178 |
March 31, | December 31, | |||||||
2016 | 2015 | |||||||
($ in thousands) | ||||||||
Notes receivable - related party | $ | 149 | $ | 178 |
June 30, | December 31, | |
2016 | 2015 | |
($ in thousands) | ||
Unimproved land | $- | $625 |
Fully improved land | 14 | 14 |
$14 | $639 |
March 31, | December 31, | |||||||
2016 | 2015 | |||||||
($ in thousands) | ||||||||
Unimproved land | $ | 625 | $ | 625 | ||||
Fully improved land | 14 | 14 | ||||||
$ | 639 | $ | 639 |
June 30, | December 31, | |
2016 | 2015 | |
($ in thousands) | ||
Deposit with Trustee of 6-1/2% debentures | $41 | $41 |
Prepaid expenses | 1 | 2 |
Other | 1 | 1 |
$43 | $44 |
March 31, | December 31, | |||||||
2016 | 2015 | |||||||
($ in thousands) | ||||||||
Deposit with Trustee of 6-1/2% debentures | $ | 41 | $ | 41 | ||||
Prepaid expenses | 1 | 2 | ||||||
Other | 4 | 1 | ||||||
$ | 46 | $ | 44 |
June 30, | December 31, | |
2016 | 2015 | |
($ in thousands) | ||
Accounts payable | $4 | $7 |
Accrued audit & professional | 31 | 40 |
Accrued legal | 19 | - |
Accrued consulting fees-related party | 1 | 1 |
Environmental remediation obligations | 21 | 25 |
Accrued debenture fees | 132 | 128 |
Accrued miscellaneous | 1 | 1 |
$209 | $202 | |
Accrued real estate taxes consisted of: | ||
Current real estate taxes | $2 | $8 |
March 31, | December 31, | |||||||
2016 | 2015 | |||||||
($ in thousands) | ||||||||
Accounts payable | $ | 18 | $ | 7 | ||||
Accrued audit & professional | 36 | 40 | ||||||
Accrued legal | 5 | - | ||||||
Accrued consulting fees-related party | 1 | 1 | ||||||
Environmental remediation obligations | 25 | 25 | ||||||
Accrued debenture fees | 130 | 128 | ||||||
Accrued miscellaneous | 1 | 1 | ||||||
$ | 216 | $ | 202 | |||||
Accrued real estate taxes consisted of: | ||||||||
Current real estate taxes | $ | 2 | $ | 8 |
June 30, | December 31, | ||
2016 | 2015 | ||
($ in thousands) | |||
Credit agreements - first mortgage-related party | |||
bearing interest at prime plus 5%; | |||
due June 1, 1997 | $- | $500 | |
Notes payable - $1,176,000 | |||
bearing interest at prime plus 2%, | |||
the remainder non-interest bearing, | |||
all past due | 1,198 | 1,198 | |
1,198 | 1,698 | ||
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 | ||
Convertible debentures payable-related party: | |||
At 14% interest; due July 8, 1997, | |||
convertible into shares of common stock | |||
at $1.72 per share | - | 1,500 | |
$9,670 | $11,670 |
March 31, | December 31, | |||||||
2016 | 2015 | |||||||
($ in thousands) | ||||||||
Credit agreements - primary lender-related party | ||||||||
balance is past due, bearing interest at prime plus 5%; due June 1, 1997 | $ | 500 | $ | 500 | ||||
Notes payable - $1,176,000 | ||||||||
bearing interest at prime plus 2%, the remainder non-interest bearing, all past due | 1,198 | 1,198 | ||||||
1,698 | 1,698 | |||||||
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 | ||||||
8,472 | 8,472 | |||||||
Collateralized convertible debentures | ||||||||
payable-related party: | ||||||||
At 14% interest; due July 8, 1997, convertible into shares of common stock at $1.72 per share | 1,500 | 1,500 | ||||||
$ | 11,670 | $ | 11,670 |
Three Months Ended | Six Months Ended | |||
June 30, | June 30, | June 30, | June 30, | |
2016 | 2015 | 2016 | 2015 | |
Real estate sales | $9,000,000 | $- | $9,000,000 | $- |
Cost of real estate sales | ||||
including expenses of sale | $(745,000) | $- | $(745,000) | $- |
June 30, | December 31, | |
2016 | 2015 | |
($ in thousands) | ||
Deferred tax asset | ||
Net operating loss carryforward | $24,938 | $26,342 |
Alternative minimum tax credit carryforward | 74 | - |
Adjustments to reduce land to net realizable value | 12 | 12 |
Expenses capitalized under IRC 263(a) | 56 | 56 |
Environmental liability | 9 | 9 |
Valuation allowance | (24,917) | (26,247) |
172 | 172 | |
Deferred tax liability: | ||
Basis difference of land and improvement inventories | 172 | 172 |
Net deferred tax asset | $- | $- |
March 31, | December 31, | |||||||
2016 | 2015 | |||||||
($ in thousands) | ||||||||
Deferred tax asset | ||||||||
Net operating loss carryforward | $ | 27,230 | $ | 26,342 | ||||
Adjustments to reduce land to net realizable value | 12 | 12 | ||||||
Expenses capitalized under IRC 263(a) | 56 | 56 | ||||||
Environmental liability | 9 | 9 | ||||||
Valuation allowance | (27,135 | ) | (26,247 | ) | ||||
172 | 172 | |||||||
Deferred tax liability: | ||||||||
Basis difference of land and improvement inventories | 172 | 172 | ||||||
Net deferred tax asset | $ | - | $ | - |
June 23, 2016 | June 23, 2016 | Remaining | |
Principal | Interest | Accrued | |
Payment | Payment | Interest | |
($ in thousands) | |||
Credit agreements - first mortgage note | $500 | $470 | $- |
payable-related party | |||
Collateralized convertible debentures | |||
payable-related party: | 1,500 | 5,455 | 52,915 |
$2,000 | $5,925 | $52,915 |
Principal | Interest | |
Payment | Payment | |
($ in thousands) | ||
Primary lender-1st mortgage note | $500 | $470 |
payable (PGIP-related party) | ||
Collateralized convertible debentures | ||
payable (LIC-related party) | 703 | 2,557 |
Collateralized convertible debentures | ||
payable (Love-1989-related party) | 797 | 2,898 |
$2,000 | $5,925 |
Six Months Ended | ||
June 30, | June 30, | |
2016 | 2015 | |
($ in thousands) | ||
Real estate sales | $9,000 | $- |
Cost of real estate sales | ||
including expenses of sale | $(745) | $- |
Six Months Ended | ||||
June 30, | June 30, | Increase | ||
2016 | 2015 | (Decrease) | ||
($ in thousands) | ||||
COSTS, EXPENSES AND OTHER | ||||
Cost of real estate sales | ||||
and expenses of sale | $745 | $- | $745 | |
Interest | 658 | 643 | 15 | |
Forgiveness of debt and | ||||
interest | - | (209) | 209 | |
Interest-related party | 3,832 | 3,500 | 332 | |
Taxes and assessments | 4 | 5 | (1) | |
Consulting and accounting- | ||||
related party | 18 | 19 | (1) | |
Legal and professional | 11 | 6 | 5 | |
General and administrative | 40 | 41 | (1) | |
$5,308 | $4,005 | $1,303 |
March 31, | December 31, | Increase | June 30, | December 31, | Increase | ||||||||||
2016 | 2015 | (Decrease) | 2016 | 2015 | (Decrease) | ||||||||||
($ in thousands) | ($ in thousands) | ||||||||||||||
Cash | $ | 1 | $ | 1 | $ | - | $1,071 | $1 | $1,070 | ||||||
Restricted cash | 5 | 5 | - | - | 5 | (5) | |||||||||
Receivables-related party | 149 | 178 | (29 | ) | - | 178 | (178) | ||||||||
Land and improvement inventories | 639 | 639 | - | 14 | 639 | (625) | |||||||||
Other assets | 46 | 44 | 2 | 43 | 44 | (1) | |||||||||
$ | 840 | $ | 867 | $ | (27 | ) | $1,128 | $867 | $261 |
March 31, | December 31, | Increase | June 30, | December 31, | Increase | ||||||||||
2016 | 2015 | (Decrease) | 2016 | 2015 | (Decrease) | ||||||||||
($ in thousands) | ($ in thousands) | ||||||||||||||
Accounts payable and accrued expenses | $ | 216 | $ | 202 | $ | 14 | $209 | $202 | $7 | ||||||
Accrued real estate taxes | 2 | 8 | (6 | ) | 2 | 8 | (6) | ||||||||
Accrued interest | 82,874 | 80,573 | 2,301 | 79,139 | 80,573 | (1,434) | |||||||||
Credit agreements: | - | - | |||||||||||||
Primary lender-related party | 500 | 500 | - | - | 500 | (500) | |||||||||
Notes payable | 1,198 | 1,198 | - | 1,198 | - | ||||||||||
Subordinated convertible debentures payable | 8,472 | 8,472 | - | ||||||||||||
Convertible debentures payable-related party | 1,500 | 1,500 | - | ||||||||||||
Subordinated convertible | |||||||||||||||
debentures payable | 8,472 | - | |||||||||||||
Convertible debentures payable- | |||||||||||||||
related party | - | 1,500 | (1,500) | ||||||||||||
$ | 94,762 | $ | 92,453 | $ | 2,309 | $89,020 | $92,453 | $(3,433) |
March 31, 2016 | June 30, 2016 | |||||||||
Principal | Accrued | Principal | Accrued | |||||||
Amount Due | Interest | Amount Due | Interest | |||||||
($ in thousands) | ($ in thousands) | |||||||||
Subordinated convertible debentures: | ||||||||||
At 6 1/2 %, due June 1, 1991 | $ | 447 | $ | 795 | $447 | $802 | ||||
At 6%, due May 1, 1992 | 8,025 | 22,001 | 8,025 | 22,308 | ||||||
$ | 8,472 | $ | 22,796 | $8,472 | $23,110 | |||||
Collateralized convertible debentures: | ||||||||||
Collateralized convertible debentures-related party: | ||||||||||
At 14%, due July 8, 1997 | $ | 1,500 | $ | 56,520 | $- | $52,915 | ||||
Notes payable: | ||||||||||
At prime plus 2% | $ | 1,176 | $ | 3,098 | ||||||
At prime plus 2%, all past due | $1,176 | $3,114 | ||||||||
Non-interest bearing | 22 | - | 22 | - | ||||||
$ | 1,198 | $ | 3,098 | $1,198 | $3,114 | |||||
Primary lender-related party: | $ | 500 | $ | 460 |
PGI INCORPORATED AND SUBSIDIARIES EXHIBIT INDEX
23 |