<PAGE>

                      PGI INCORPORATED AND SUBSIDIARIES

                   U.S. SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C. 20549

                                FORM 10 - QSB

(Mark One)
/ X /    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
         AND EXCHANGE ACT OF 1934

              For the quarterly period ended      March 31, 2002
                                             -------------------

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

         For the transition period from                   to
                                        -----------------    ----------------
         Commission File Number          1-6471
                                ---------------

         PGI INCORPORATED
         ----------------
         (Exact name of small business issuer as specified in its charter)

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

         212 SOUTH CENTRAL, SUITE 100, ST. LOUIS, MISSOURI  63105
         --------------------------------------------------------
         (Address of principal executive offices)

         (314) 512-8650
         --------------
         (Issuer's telephone number)



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

         Check whether the issuer (1) has filed all reports required to be
filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during
the past 12 months (or for shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements
for the past 90 days.
Yes  X           No
   -----           -----

         State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date: As of May 12,
2002 there were 5,317,758 shares of the Registrant's common stock
outstanding.

         Transitional Small Business Disclosure Format (Check one):

                  Yes         No  X
                     -----      -----






                                     1

<PAGE>
<PAGE>

<TABLE>

                           PGI INCORPORATED AND SUBSIDIARIES
                                      Form 10 - QSB
                          For the Quarter Ended March 31, 2002
                                    Table of Contents
                                    -----------------

<CAPTION>
                                                                              Form 10 - QSB
                                                                                 Page No.
                                                                                 --------
<S>                                                                           <C>
PART I               Financial Information

          Item 1     Financial Statements
                     Consolidated Statements of Financial Position
                          March 31, 2002 and December 31, 2001                      3

                     Consolidated Statements of Operations
                          Three Months Ended March 31, 2002 and 2001                4

                     Condensed Consolidated Statements of Cash Flows
                          Three Months Ended March 31, 2002 and 2001                5

                     Notes to Consolidated Financial Statements for
                          Form 10 - QSB                                           6 - 11

          Item 2     Management's Discussion and Analysis of
                          Financial Condition and Results of Operations          12 - 15



PART II              Other Information

          Item 1     Legal Proceedings                                             16

          Item 2     Changes in Securities                                         16

          Item 3     Defaults Upon Senior Securities                               16

          Item 4     Submission of Matters to a Vote of Security Holders           16

          Item 5     Other Information                                             16

          Item 6     Exhibits and Reports on Form 8 - K                            16

    SIGNATURES                                                                     17
</TABLE>




                                           2

<PAGE>
<PAGE>

                                   PGI INCORPORATED AND SUBSIDIARIES

Part I             Financial Information
         Item 1    Financial Statements

<TABLE>
                             CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
                                           ($ in thousands)
<CAPTION>
                                                                   March 31,              December 31,
                                                                      2002                    2001
                                                                      ----                    ----
                                                                  (Unaudited)
<S>                                                                 <C>                     <C>
ASSETS
     Cash and cash equivalents                                      $     16                $    234
     Restricted cash                                                     243                     260
     Receivables                                                         298                     130
     Land and improvement inventories                                    737                     737
     Other assets                                                        169                     173
                                                                    --------                --------
                                                                    $  1,463                $  1,534
                                                                    ========                ========

LIABILITIES
     Accounts payable & accrued expenses                            $     46                $     73
     Accrued real estate taxes                                           390                     382
     Accrued interest:
         Debentures                                                   15,502                  14,995
         Other                                                         2,029                   2,009
Credit Agreements -
         Primary lender                                                  700                     700
         Notes payable                                                 1,198                   1,198
     Subordinated debentures payable                                   9,059                   9,059
     Convertible debentures payable                                    1,500                   1,500
                                                                    --------                --------
                                                                    $ 30,424                $ 29,916
                                                                    --------                --------

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                                             (44,991)                (44,412)
                                                                    --------                --------
                                                                     (28,961)                (28,382)
                                                                    --------                --------
                                                                    $  1,463                $  1,534
                                                                    ========                ========

See accompanying notes to consolidated financial statements for Form 10 - QSB.
</TABLE>


                                     3

<PAGE>
<PAGE>

                          PGI INCORPORATED AND SUBSIDIARIES

Part I             Financial Information (Continued)

<TABLE>
                        CONSOLIDATED STATEMENTS OF OPERATIONS
                       ($ in thousands, except per share data)
                                     (Unaudited)

<CAPTION>
                                                             Three Months Ended
                                                             ------------------
                                                       March 31,            March 31,
                                                          2002                 2001
                                                          ----                 ----
<S>                                                    <C>                  <C>
REVENUES
     Real Estate Sales                                   $   -                $  12
     Interest Income                                         9                   15
     Other Income                                           10                    3
                                                         -----                -----
                                                            19                   30
                                                         -----                -----

COSTS AND EXPENSES
     Cost of Real Estate Sales                           $   -                $   6
     Interest                                              544                  518
     Taxes & Assessments                                    24                   16
     Consulting & Accounting                                10                   10
     Legal & Professional                                   11                   15
     General & Administrative                                9                   25
                                                         -----                -----
                                                           598                  590
                                                         -----                -----
NET (LOSS)                                               $(579)               $(560)
                                                         =====                =====

NET (LOSS) PER SHARE (*)                                 $(.14)               $(.14)
                                                         =====                =====


<FN>
*  Considers the effect of cumulative preferred dividends in arrears for
   the three months ended March 31, 2002 and 2001.





See accompanying notes to consolidated financial statements for Form 10 - QSB

</TABLE>


                                     4

<PAGE>
<PAGE>

                              PGI INCORPORATED AND SUBSIDIARIES

Part I             Financial Information (Continued)

<TABLE>
                            CONSOLIDATED STATEMENTS OF CASH FLOWS
                                       ($ in thousands)
                                         (Unaudited)

<CAPTION>
                                                                     Three Months Ended
                                                                     ------------------
                                                               March 31,            March 31,
                                                                  2002                 2001
                                                                  ----                 ----
<S>                                                            <C>                  <C>
Net cash (used in) operating activities                          $ (39)               $ (79)
                                                                 -----                -----

Cash flows from investing activities:
     Investment in notes receivable                               (180)                (250)
     Proceeds from notes receivables                                 1                    1
                                                                 -----                -----
     Net cash (used in) investing activities                      (179)                (249)
                                                                 -----                -----


Net (decrease) in cash                                            (218)                (328)

Cash at beginning of period                                        234                  454
                                                                 -----                -----

Cash at end of period                                            $  16                $ 126
                                                                 =====                =====


See accompanying notes to consolidated financial statements for Form 10 - QSB
</TABLE>




                                     5

<PAGE>
<PAGE>

                      PGI INCORPORATED AND SUBSIDIARIES
           Notes to Consolidated Financial Statements (Unaudited)

(1)      Basis of Presentation

         The accompanying unaudited consolidated financial statements have
         been prepared in accordance with the instructions to Form 10 - QSB
         and therefore do not include all disclosures necessary for fair
         presentation of financial position, results of operations and cash
         flows in conformity with generally accepted accounting principles.
         The Company's independent accountants included an explanatory
         paragraph regarding the Company's ability to continue as a going
         concern in their opinion on the Company's consolidated financial
         statements for the year ended December 31, 2001.

         The consolidated balance sheet as of December 31, 2001 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 and convertible debentures and in default of
         its primary debt obligations. (See Management's Discussion and
         Analysis of Financial Condition and Results of Operations and Notes
         9, 10, 11, and 16 to the Company's consolidated financial
         statements for the year ended December 31, 2001, as contained in
         the Company's Annual Report on Form 10 - KSB).

         All adjustments (consisting of only normal recurring accruals)
         necessary for fair presentation of financial position, results of
         operations and cash flows have been made. The results for the three
         months ended March 31, 2002 are not necessarily indicative of
         operations to be expected for the fiscal year ending December 31,
         2002 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 three months ended March 31, 2002 and 2001 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 effects of the assumed conversion of
         all cumulative convertible preferred stock and collateralized
         convertible debentures into shares of common stock. For the three
         months ended March 31, 2002 and 2001, the assumed conversion of all
         cumulative convertible preferred stock and collateralized
         convertible debentures would have been anti-dilutive.


                                     6

<PAGE>
<PAGE>

                      PGI INCORPORATED AND SUBSIDIARIES
           Notes to Consolidated Financial Statements (continued)

         The following is a summary of the calculations used in computing
         basic and diluted (loss) per share for the three months ended March
         31, 2002 and 2001.

<TABLE>
<CAPTION>
                                                      Three Months Ended
                                                      ------------------
                                                 March 31,         March 31,
                                                    2002              2001
                                                    ----              ----
<S>                                              <C>               <C>
         Net (Loss)                              $(579,000)        $(560,000)
         Preferred Dividends                      (160,000)         (160,000)
                                                 ---------         ---------
         (Loss) Available to
            Common Shareholders                  $(739,000)        $(720,000)
                                                 =========         =========

         Weighted Average Number of
            Shares Outstanding                   5,317,758         5,317,758
         Basic and Diluted (Loss) Per
            Share                                $    (.14)        $    (.14)
</TABLE>

(3)      Statement of Cash Flows

         The Financial Accounting Standards Board issued Statement No. 95,
         "Statement of Cash Flows", which requires a statement of cash flows
         as part of a full set of financial statements. For quarterly
         reporting purposes, the Company has elected to condense the
         reporting of its net cash flows. Interest paid for the three months
         ended March 31, 2002 and 2001 was $17,000 and $24,000 respectively.

(4)      Restricted Cash

         Restricted cash includes restricted proceeds held by the primary
         lender as collateral for debt repayment and escrowed receipts
         related to sold contracts receivable.



                                     7

<PAGE>
<PAGE>

                      PGI INCORPORATED AND SUBSIDIARIES
           Notes to Consolidated Financial Statements (continued)

(5)      Receivables

         Net receivables consisted of:
<TABLE>
<CAPTION>
                                                          March 31,     December 31,
                                                             2002           2001
                                                             ----           ----
                                                               ($ in thousands)
<S>                                                         <C>            <C>
         Contracts receivable on homesite sales             $ 169          $ 177

         Less:  Allowance for cancellations                  (169)          (177)
                                                            -----          -----
         Net receivables on real estate sales                   -              -
         Other notes receivable-trade                          11             26
         Other notes receivable-related party                 280            100
         Other interest receivable                              7              4
                                                            -----          -----
                                                            $ 298          $ 130
                                                            =====          =====
</TABLE>

(6)      Land and Improvements

         Land and improvement inventories consisted of:
<TABLE>
<CAPTION>
                                                          March 31,     December 31,
                                                             2002           2001
                                                             ----           ----
                                                               ($ in thousands)
<S>                                                         <C>            <C>

         Unimproved land                                    $ 613          $ 613
         Fully improved land                                  124            124
                                                            -----          -----
                                                            $ 737          $ 737
                                                            =====          =====
</TABLE>

(7)      Property and Equipment

         Property and equipment consisted of:
<TABLE>
<CAPTION>
                                                          March 31,     December 31,
                                                             2002           2001
                                                             ----           ----
                                                               ($ in thousands)
<S>                                                         <C>            <C>
         Furniture, fixtures and other equipment            $  31          $  31
         Less:  Accumulated depreciation                      (31)           (31)
                                                            -----          -----
                                                            $   -          $   -
                                                            =====          =====
</TABLE>

(8)      Other Assets

         Other assets consisted of:
<TABLE>
<CAPTION>
                                                          March 31,     December 31,
                                                             2002           2001
                                                             ----           ----
                                                               ($ in thousands)
<S>                                                         <C>            <C>
         Deposit with Trustee of 6-1/2% debentures          $ 158          $ 158
         Other                                                 11             15
                                                            -----          -----
                                                            $ 169          $ 173
                                                            =====          =====
</TABLE>


                                     8

<PAGE>
<PAGE>

                      PGI INCORPORATED AND SUBSIDIARIES
           Notes to Consolidated Financial Statements (continued)

(9)      Accounts Payable and Accrued Expenses

         Accounts payable and accrued expenses consisted of:
<TABLE>
<CAPTION>
                                                          March 31,     December 31,
                                                             2002           2001
                                                             ----           ----
                                                               ($ in thousands)
<S>                                                         <C>            <C>

         Accounts payable                                   $  27          $  48
         Accrued audit & professional                          19             24
         Accrued legal                                          -              1
                                                            -----          -----
                                                            $  46          $  73
                                                            =====          =====

         Accrued Real Estate Taxes consisted of:

         Current real estate taxes                          $  23          $  18
         Delinquent real estate taxes                         367            364
                                                            -----          -----
                                                            $ 390          $ 382
                                                            =====          =====
</TABLE>

(10)     Primary Lender Credit Agreements, Notes Payable, Subordinated and
         Convertible Debentures Payable

         Credit agreements with the Company's primary lender and notes
         payable consisted of the following:

<TABLE>
<CAPTION>
                                                          March 31,     December 31,
                                                             2002           2001
                                                             ----           ----
                                                               ($ in thousands)
<S>                                                         <C>           <C>
         Credit agreements - primary lender:
            (maturing July 8, 1997, bearing interest
            at prime plus 5%)                               $  700         $  700
         Notes payable - $1,176,000
            bearing interest at prime plus 2%                1,198          1,198
                                                            ------         ------
                                                            $1,898         $1,898
                                                            ------         ------

         Subordinated debentures payable:

            At 6-1/2% interest; due June 1991                1,034          1,034
            At 6% interest; due May 1, 1992                  8,025          8,025
                                                            ------         ------
                                                            $9,059         $9,059
                                                            ------         ------


                                     9

<PAGE>
<PAGE>

                      PGI INCORPORATED AND SUBSIDIARIES
           Notes to Consolidated Financial Statements (continued)

         Collateralized convertible debentures payable:

         At 14% interest; due July 8, 1997,
         convertible into shares of common stock              1,500          1,500
                                                            -------        -------
         at $1.72 per share                                 $12,457        $12,457
                                                            =======        =======
</TABLE>

(11)     Real Estate Sales and Other Income

         Real Estate Sales and Cost of Sales for the three months ended
         March 31, 2002 and 2001 were as follows:
<TABLE>
<CAPTION>
                                                             Three Months Ended
                                                             ------------------
                                                         March 31,         March 31,
                                                            2002              2001
                                                            ----              ----
                                                               ($ in thousands)
<S>                                                         <C>               <C>
         Homesite Sales                                     $  -              $ 12
         Cost of Sales                                         -                 6
</TABLE>

         Other income for the three months ended March 31, 2002 and 2001 was
         $10,000 and $3,000 respectively. The other income mainly consists
         of recoveries of contracts receivable which have been fully
         provided for.

(12)     Commitments and Contingencies

         The aggregate outstanding balances of all receivables sold and
         exchanged with recourse was paid off in March 2002. The outstanding
         balance totaled $17,000 at December 31, 2001. Based on its
         collection experience with such receivables, the Company maintained
         no allowance at December 31, 2001 for the recourse provision
         related to all receivables sold.

(13)     Income Taxes

         At December 31, 2001, 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
         2021.


                                     10

<PAGE>
<PAGE>

                      PGI INCORPORATED AND SUBSIDIARIES
           Notes to Consolidated Financial Statements (continued)

         The following summarizes the temporary differences of the Company
         at December 31, 2001 at the current statutory rate:

<TABLE>
<CAPTION>
                                                                        ($ in thousands)
<S>                                                                         <C>
         Deferred tax asset:
             Net operating loss carryforward                                $ 15,120
             Adjustments to reduce land to net realizable value                   12
             Expenses capitalized under IRC 263(a)                                56
                                                                             (15,016)
                                                                            --------
             Valuation allowance                                                 172

         Deferred tax liability:
             Basis difference of land and improvement inventories                172
                                                                            --------
         Net deferred tax asset                                             $      -
                                                                            ========
</TABLE>


                                     11

<PAGE>
<PAGE>

                      PGI INCORPORATED AND SUBSIDIARIES

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

Preliminary Note

         The Company's business focus and emphasis recently has been to
concentrate its sales and marketing efforts on the disposition in bulk of
its undeveloped, platted, residential real estate, as a result of its
continuing financial difficulties due to the principal and interest owed on
its debt.

         Presently, the Company's remaining inventory primarily consists of
370 acres located in Hernando County, Florida. In addition, the Company has
been actively pursuing collection on delinquent contract receivables from
homesite sales. The Company owns approximately 35 lots, mostly located in
Citrus County, Florida which are listed for sale.

         The Company believes the 370 acres located in Hernando County,
Florida may become more marketable because of the property's close proximity
to the recently completed interchange of the Suncoast Expressway with
Highway 98. In December 1999, the Hernando County Commission approved a
change in land use of 40 acres of the parcel from residential to commercial
use. The Company anticipates that a further extension of the Suncoast
Expressway beyond Highway 98 will not occur for several years.

Results of Operations

         Revenues for the first three months of 2002 decreased by $11,000 to
$19,000 from $30,000 for the comparable 2001 period reflecting no real
estate sales revenue in the current year and a decrease in interest income
due to declining restricted cash balances. A net loss of $579,000 was
incurred for the first three months of 2002 compared to a net loss of
$560,000 for the first three months of 2001. Expenses for the three months
increased by $8,000. After consideration of cumulative preferred dividends
in arrears, totaling $160,000 for each of the three months ended March 31,
2002 and 2001 ($.05 per share of common stock), net (loss) per share of
$(.14) was reported for both of the three month periods ended March 31, 2002
and 2001.

         Real Estate Sales and Cost of Sales consisted of:
<TABLE>
<CAPTION>
                                                  Three Months Ended
                                             March 31,           March 31,
                                                2002                2001
                                                ----                ----
                                                    ($ in thousands)
<S>                                            <C>                  <C>
         Homesite Sales                        $  -                 $ 12
         Cost of Sales                            -                    6
</TABLE>

Other income for the three months ended March 31, 2002 and 2001 was $10,000
and $3,000 respectively. The other income mainly consists of recoveries of
contracts receivable which have been fully provided for.



                                     12

<PAGE>
<PAGE>

                      PGI INCORPORATED AND SUBSIDIARIES

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

         As of March 31, 2002, the Company remained in default of its
primary lender indebtedness with PGIP, LLC, ("PGIP"). PGIP holds restricted
funds of the Company pursuant to an escrow agreement whereby funds may be
disbursed (i) as requested by PGI and agreed to by PGIP, or (ii) as deemed
necessary and appropriate by PGIP, in either case, to protect PGIP's
interest in the Retained Acreage (as hereinafter defined), including PGIP's
right to receive principal and interest under the note agreement securing
the remaining indebtedness, or (iii) to PGIP to pay any other obligations
owed to PGIP by the Company. The restricted escrow held by the primary
lender at March 31, 2002 and December 31, 2001 was $240,000 and $255,000
respectively. The real estate owned by the Company which has not been sold,
approximately 370 acres (the "Retained Acreage") remains subject to the
primary lender indebtedness.

         Contracts receivable on homesite sales and related receivables are
fully provided for cancellation at March 31, 2002 and December 31, 2001. The
Company has been actively pursuing collection on the delinquent receivables.
An assessment is made for each contract receivable as to the economic
benefit of reacquisition of the lot considering the cost of foreclosure,
delinquent taxes and association fees due, and estimated current sale value
of the lot. For those with benefit, foreclosure action is begun in the
absence of payment or receipt of a quit claim deed of the property back to
the Company.

         Cash used in operating activities for the three months ended March
31, 2002 was $39,000 compared to $79,000 for the comparable 2001 period.
Cash used in investing activities in 2002 included a $180,000 investment in
a short-term note with an affiliate of L-PGI, the Company's preferred
shareholder, Love Investment Company. Cash used in investing activities in
2001 included a $250,000 investment in a short-term note with an affiliated
holding company.



                                     13

<PAGE>
<PAGE>

                      PGI INCORPORATED AND SUBSIDIARIES

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

Analysis of Financial Condition

         Assets decreased at March 31, 2002 compared to assets at December
31, 2001, reflecting the following changes:

<TABLE>
<CAPTION>
                                                    March 31,    December 31,    Increase
                                                      2002           2001       (Decrease)
                                                      ----           ----       ----------
                                                              ($ in thousands)
<S>                                                 <C>            <C>            <C>

         Cash and cash equivalents                  $    16        $   234        $(218)
         Restricted cash                                243            260          (17)
         Receivables                                    298            130          168
         Land and improvement inventories               737            737            -
         Other assets                                   169            173           (4)
                                                    -------        -------        -----
                                                    $ 1,463        $ 1,534        $ (71)
                                                    =======        =======        =====
</TABLE>

         Liabilities were approximately $30.4 million at March 31, 2002
compared to approximately $29.9 million at December 31, 2001 reflecting the
following changes:

<TABLE>
<CAPTION>
                                                    March 31,    December 31,    Increase
                                                      2002           2001       (Decrease)
                                                      ----           ----       ----------
                                                              ($ in thousands)
<S>                                                 <C>            <C>            <C>
         Accounts payable & accrued expenses        $    46        $    73        $ (27)
         Accrued real estate taxes                      390            382            8
         Accrued interest                            17,531         17,004          527
         Credit agreements - primary lender             700            700            -
         Notes                                        1,198          1,198            -
         Convertible subordinated
            debentures payable                        9,059          9,059            -
         Convertible debentures payable               1,500          1,500            -
                                                    -------        -------        -----
                                                    $30,424        $29,916        $ 508
                                                    =======        =======        =====
</TABLE>

         The Company has aggressively taken steps to curtail and simplify
operations as well as concentrate on major bulk sales of its undeveloped
acreage. The Company remains totally dependent upon the sale of property to
fund its operations and debt service requirements.



                                     14

<PAGE>
<PAGE>

                      PGI INCORPORATED AND SUBSIDIARIES

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

         The Company remains in default of the entire principal plus
interest on its subordinated debentures. The amounts due are as indicated in
the following table:

<TABLE>
<CAPTION>
                                                                March 31, 2002
                                                                --------------
                                                           Principal        Unpaid
                                                          Amount Due       Interest
                                                          ----------       --------
                                                               ($ in thousands)
<S>                                                         <C>             <C>
         Subordinated debentures due
                   June 1, 1991                             $1,034          $  844
         Subordinated debentures due
                   May 1, 1992                               8,025           7,708
                                                            ------          ------
                                                            $9,059          $8,552
                                                            ======          ======
</TABLE>

         The Company does not have funds available to make any payments of
either principal or interest on the above debentures.


                                     15

<PAGE>
<PAGE>

                      PGI INCORPORATED AND SUBSIDIARIES

PART II  Other Information

Item 1   Legal Proceedings

         In 1994, the Citrus County Tax Assessor denied agricultural
exemption status for the undeveloped Sugarmill Woods property and the
Company was forced to sue the County to reclaim the tax benefit. In 1995,
the Citrus County Tax Assessor again denied agricultural exemption status
for the undeveloped Sugarmill Woods property, but was overruled by the Value
Adjustment Board. As a result, the Tax Assessor sued Sugarmill Woods, and
was again successful in denying the agricultural exemption for the property.
The Company won on appeal, but the Tax Assessor appealed to the Supreme
Court of Florida to reinstate the exemption. On April 1, 1999, the Supreme
Court of Florida issued their opinion in favor of Sugarmill Woods, Inc. On
November 9, 1999 the Circuit Court of Citrus County adjudged the
agricultural classification applicable to tax years 1994, 1995 and 1996 for
exemption. The non interest bearing restricted escrow of $557,000 was
released in October 2000 with the confirmation that no further liability
exists for tax years 1994, 1995, and 1996. Tax year 1997 remains in dispute
on a matter of timely filing of petition for exemption.

Item 2   Changes in Securities

         Not applicable.

Item 3   Defaults Upon Senior Securities

         See discussion in Item 2 with respect to defaults on the Company's
subordinated debentures and collateralized convertible debentures, which
discussion is incorporated herein by this reference.

Item 4   Submission of Matters to a Vote of Security Holders

         Not applicable.

Item 5   Other Information

         Not applicable.

Item 6   Exhibits and Reports on Form 8 - K

         (a)       Exhibits - reference is made to the Exhibit Index
                   contained on page 18 herein for a list of exhibits filed
                   under this Item.

         (b)       No report on Form 8 - K was filed during the quarter
                   ended March 31, 2002.

                                     16

<PAGE>
<PAGE>

                      PGI INCORPORATED AND SUBSIDIARIES

         In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

                                          PGI INCORPORATED
                                     --------------------------
                                            (Registrant)

Date:   May 15, 2002                                  /s/ Laurence A. Schiffer
     ------------------                               ------------------------
                                                      Laurence A. Schiffer
                                                      President




                                     17

<PAGE>
<PAGE>

                      PGI INCORPORATED AND SUBSIDIARIES


EXHIBIT INDEX
-------------

2.       Inapplicable.

3.       Inapplicable.

4.       Inapplicable.

10.      Inapplicable.

11.      Statements re:  Computations of Per Share Earnings.
         (Incorporated by reference to Note 2 to the consolidated financial
         statements herein.)

15.      Inapplicable.

18.      Inapplicable.

19.      Inapplicable.

22.      Inapplicable.

23.      Inapplicable.

24.      Inapplicable.

99.      Inapplicable.


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