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. Yesdays.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.

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, 2017,11, 2018, there were 5,317,758 shares of the registrant’s common stock, $.10 par value per share, outstanding.

 

Item 1. Financial Statements

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.

During the three month period ended March 31, 20172018 and the year ended December 31, 2016,2017, 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, 20172018 and December 31, 20162017 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$853,000 and $817,000,$846,000, 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, 2017,2018, 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.

Revenues for the three months ended March 31, 2018 increased by $4,000 when compared to the same period in 2017. Interest income of $1,000 for each of the three month periodperiods ended March 31, 20172018 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 of $4,000 for the three month period ended March 31, 20162018 represents related party interest on the short-term note receivable with LIC.Love Investment Company (“LIC”), the Company’s primary preferred stock shareholder. The Company received payment of the note receivable balance from LIC on June 23, 2016.March 6, 2018.

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, 20172018 decreased by $1,965,000$13,000 when compared to the same period in 2016. There was no interest expense-related party2017 primarily as a result of a $17,000 decrease in legal and professional expenses due to expenses incurred during the three month period ended March 31, 2017 compared to interest expense-related partyon a parcel in Citrus County requiring additional environmental remediation.

Interest expense relating to the Company’s current outstanding debt, held by non-related parties, increased by $8,000$9,000 during the three month period ended March 31, 20172018 compared to the same period in 2016,2017, primarily as a result of interest accruing on past due balances which increase at various intervals throughout the year for accrued but unpaid interest.

General and administrative expenses during the three month period ended March 31, 2017 increased2018 decreased by $5,000$4,000 when compared to the same period in 20162017 primarily as a result of increased audit anddue to tax service fees incurred during the three month period ended March 31, 2017. The Company accrued an income

Income tax expense of $57,000 was recognized during the three month period ended March 31, 2017. As a result,2017 for the estimated 2016 Alternative Minimum Tax on the 2016 gain on sales of real estate.

The Company incurred a net loss of $449,000 was incurred for$375,000 during the three month period ended March 31, 20172018 compared to a net loss of $2,336,000$449,000 for the comparable period in 2016.2017. After deducting preferred dividends, totaling $160,000 for the three month periods ended March 31, 20172018 and 2016 ,2017, with respect to the Class A Preferred Stock, a net loss per share of $(.11)$(.10) and $(.47)$(.11) was incurred for the three month periods ended March 31, 20172018 and 2016.2017. The total cumulative preferred dividends in arrears with respect to the Class A Preferred Stock through March 31, 20172018 is $14,035,000.$14,675,000.

During the three month period ended March 31, 2017,2018, the Company’s net cash used in operating activities was $64,000$36,000 compared to $29,000$64,000 for the comparable period in 2016. There was no cash2017. Cash provided fromby 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 which2018 consisted of note receivable proceeds received from LIC.

Liabilities were approximately $90,093,000$91,374,000 at March 31, 20172018 compared to approximately $89,708,000$91,048,000 at December 31, 2016,2017, reflecting the following changes which resulted in a decrease of $385,000$326,000 of liabilities:

During the three month period ended March 31, 2017,2018, the amount of accounts payable and accrued expenses decreased by $5,000$16,000 primarily as a result of timing differences. Accrued real estate taxes decreased by $3,000 during the three month period ended March 31, 20172018 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, 20172018 increased by $336,000$345,000 due to the amount of interest expense for such period. During the three month period ended March 31, 2017,2018, the Company made no interest or principal payments on its outstanding notes payable and subordinated convertible debentures.

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, 20172018 are as indicated in the following table:

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, 2016.2017.

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.

Not applicable.

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, 2017.2018. There have been no changes in the Company’s internal control over financial reporting during the quarter ended March 31, 20172018 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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

Not applicable.

Not applicable.

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.

Not applicable.

Not applicable.

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.