U. S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
________________________
FORM 10-QSB
(Mark One)
_X_ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Quarterly period ended: June 30, 1999
___ TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT
For the transition period from _______ to _______.
Commission file number: 0-19154.
AMERICAN ASSET MANAGEMENT CORPORATION
(Exact name of small business issuer as specified in its charter)
NEW JERSEY 22-2902677
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
150 Morristown Road, Suite 108, Bernardsville, New Jersey 07924
(Address of principal executive offices)
Issuer's telephone number, including area code: (908) 766-1701
(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___.
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date: As
of August 6, 1999 there were 1,315,293 shares outstanding of the
issuer's no par value common stock.
Transitional Small Business Disclosure Format (check one):
YES___ NO_X_
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
AMERICAN ASSET MANAGEMENT CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
_________________________________________________________________
June 30, December 31,
___1999___ ____1998____
_____________ASSETS________________
Cash & cash equivalents $ 506,672 $ 608,085
Mortgage loans receivable 796,735 1,755,009
Notes receivable 18,823 62,822
Prepaid expenses
and other current assets 151,155 86,948
Total current assets 1,473,385 2,512,864
Land development costs 708,887 573,515
Property & equipment, net of
accumulated depreciation
and amortization 24,589 8,251
Total assets 2,206,861 3,094,630
__LIABILITIES AND STOCKHOLDERS' EQUITY__
Current liabilities:
Warehouse finance facility $ 560,279 $1,363,236
Deferred income 9,432 55,860
Loans payable 12,045 31,364
Accounts payable, accrued expenses
and other current liabilities 180,546 142,539
Total current liabilities 762,302 1,592,999
Stockholders' equity:
Common stock, no par value;
10,000,000 shares authorized;
1,315,293 shares issued and
outstanding 3,852,825 3,845,825
Additional paid-in capital 231,207 231,207
Accumulated deficit (2,639,473) (2,575,401)
Total stockholders' equity 1,444,559 1,501,631
Total liabilities and
stockholders' equity $2,206,861 $3,094,630
See accompanying Notes to Consolidated Financial Statements.
-2-
AMERICAN ASSET MANAGEMENT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
_________________________________________________________________
For the Three Months|For the Six Months
__Ended June 30,___|__Ended June 30,___
__1999__ __1998___|__1999__ __1998__
Revenues:
Mtg. origination fees $190,222 $531,321 $ 490,555 $ 838,283
Application and
commitment fees 14,153 32,195 32,953 81,700
Mortgage interest income 64,119 52,155 94,960 85,306
Total revenues 268,494 615,671 618,468 1,005,289
Expenses:
Employee compensation
and benefits 107,841 131,562 232,245 246,419
Commissions 62,868 215,701 168,674 359,689
Other expenses 162,218 231,492 296,753 357,311
Total expenses 332,927 578,755 697,672 963,428
Income/(loss)
from operations (64,433) 36,916 (79,204) 41,861
Other income 6,360 1,623 15,132 1,623
Income/(loss) before
provisions for
income taxes (58,073) 38,539 (64,072) 43,484
Provision for income taxes -0- -0- -0- -0-
Net Income/(loss) (58,073) 38,539 (64,072) 43,484
Dividends on
Preferred Stock -0- 8,938 -0- 17,875
INCOME/(LOSS) AVAILABLE FOR
COMMON SHAREHOLDERS $ (58,073) $ 29,601 $(64,072) $ 25,609
INCOME/(LOSS) PER
COMMON SHARE, Basic $ (0.044) $ 0.025 $ (0.049) $ 0.022
WEIGHTED AVG. NO. OF
SHARES OF COMMON STOCK
OUTSTANDING, Basic 1,315,293 1,169,040 1,315,293 1,169,040
*The diluted earnings per share are not presented and exclude the
exercise of 331,756 warrants and 60,000 employee stock options
because the effect would be antidilutive.
See accompanying Notes to Consolidated Financial Statements.
-3-
AMERICAN ASSET MANAGEMENT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
_________________________________________________________________
For the Three Months|For the Six Months
__Ended June 30,___|__Ended June 30,___
__1999__ __1998___|__1999__ __1998__
CASH FLOWS FROM
OPERATING ACTIVITIES
Net income/(loss) $ (58,073)$ 38,539 $ (64,072)$ 43,484
Adjustments to
reconcile net income/(loss)
to net cash used in
operating activities:
Depreciation
& amortization 1,834 1,466 3,616 1,465
CHANGES IN ASSETS
& LIABILITIES:
(Increase)decrease in:
Notes receivable 44,000 1,499 43,999 46,999
Mortgage loans
held for sale 1,643,350 2,844,825 958,274 1,634,375
Prepaid expenses
& other assets (100,514) (7,655) (64,207) (53,946)
Land and
development costs (46,141) (13,289) (135,372) (60,793)
Increase(Decrease) in:
Accounts payable and
accrued expenses 54,140 (10,378) 45,007 99,711
Deferred income 22 (1,764) (46,428) 7,919
Warehouse finance
facility (1,620,185)(2,831,561)(802,957)(1,642,200)
Incr.(Decr.) in
Lot Deposits -0- 70,000 -0- 81,000
NET CASH (USED IN)/PROVIDED
BY OPERATING ACTIVITIES (81,567) 91,682 (62,140) 158,014
CASH FLOWS FROM
INVESTING ACTIVITIES
Purchase of Fixed Assets (19,954) -0- (19,954) (2,439)
Net Cash (Used In)/Provided
By Investing Activities (19,954) -0- (19,954) (2,439)
CASH FLOWS FROM
FINANCING ACTIVITIES
Incr./(Decr.)Loans Payable (20,240) 11,022 (19,319) (28,178)
Payments of Mtg. Payable -0- 4,327 -0- (11,545)
Dividends Paid -0- (17,000) -0- (17,000)
Proceeds from issuance
of Common Stock -0- 690,000 -0- 690,000
NET CASH (USED IN)/PROVIDED
BY FINANCING ACTIVITIES (20,240) 688,349 (19,319) 633,277
NET INCR/(DECR) IN CASH
AND CASH EQUIVALENT (121,761) 780,031 (101,413) 788,852
CASH & CASH EQUIVALENTS
AT BEGINNING OF PERIOD 628,433 244,924 608,085 236,103
CASH & CASH EQUIVALENTS
AT END OF PERIOD $ 506,672 $1,024,955 $ 506,672 $1,024,955
Supplemental noncash
investing and financing
activities:
Issuance of common stock
in lieu of cash for
directors' fees: $ 7,000
See accompanying Notes to Consolidated Financial Statements.
-4-
AMERICAN ASSET MANAGEMENT CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
________________________________________________________________
1. BACKGROUND AND BASIS OF FINANCIAL STATEMENT PRESENTATION
The accompanying consolidated financial statements of
American Asset Management Corporation and subsidiaries (the
"Company") are unaudited. In the opinion of management, all
adjustments and intercompany eliminations necessary for a fair
presentation of the results of operations have been made and were
of a normal recurring nature. The consolidated financial
statements of the Company include the operations of both
wholly-owned subsidiaries, Capital Financial Corp. and American
Asset Development Corporation. The Company's operations consist
of specialized and mortgage banking services and real estate
development. These interim consolidated financial statements
should be read in conjunction with the consolidated financial
statements and related notes thereto contained in the Company's
1998 Annual Report on Form 10-KSB. The results of the three
months ended June 30, 1999 are not necessarily indicative of the
results of the full year.
2. SEGMENT REPORTING
The Company has two primary operating segments including
originating and selling loans secured primarily by first
mortgages on one-to-four family residential properties (CFC) and
real estate development (AADC). Segment selection was based upon
the nature of operations as determined by management and all of
the operations of these segments are conducted in New Jersey.
Certain selected financial information of these segments is
described below:
June 30, 1999 CFC AADC Parent Total
Revenues 618,468 618,468
Segment Profit(Loss) 48,225 (1,057) (111,040) (63,872)
Net identifiable assets 1,376,978 781,411 48,472 2,206,861
June 30, 1998 CFC AADC Parent Total
Revenues 1,005,289 1,005,289
Segment Profit(Loss) 137,839 (116) (99,798) 37,925
Net identifiable assets 1,323,708 1,172,199 76,642 2,575,549
-5-
Item 2.
AMERICAN ASSET MANAGEMENT CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OR PLAN OF OPERATION
_________________________________________________________________
RESULTS OF OPERATIONS
Three Months Ended June 30, 1999 Compared to the Three Months
Ended June 30, 1998.
Total revenues for the three months ended June 30, 1999
were $268,494 compared to $615,671 for the three months ended
June 30, 1998, a decrease of $347,177 or approximately 56.5%. The
decrease was primarily attributable to a reduction of $18,042,
or 56.1% in application and commitment fees to $14,153 from
$32,195 in the comparable 1998 period and a decrease in
origination fees of $341,099, or approximately 64.1%, from
$531,321 in the comparable 1998 period to $190,222 for the three
months ended June 30, 1999, which was partially offset by an
increase of $11,964 in mortgage interest income of Capital
Financial Corp. ("Capital"), the Company's mortgage banking
subsidiary. The reduction in applications was a result
of increased mortgage interest rates during the period which
continued to sharply reduce the number of refinance applications
the Company received, as well as a reduction in real estate sales
in the Company's service area primarily due to a reduction in the
available supply of homes for sale. During the three months
ended June 30, 1999 Capital closed 56 residential mortgage loans
in the principal amount of $11,298,979 compared to 135 loans
closed in the principal amount of $29,797,745 in the three months
ended June 30, 1998. At June 30, 1999, the Company had
approximately 65 residential mortgage applications in process in
the principal amount of $13,947,472 compared to 133 residential
mortgage applications in process in the principal amount of
$30,801,680, at June 30, 1998.
Total expenses for the three months ended June 30, 1999
were $332,927, a decrease of $245,828 or approximately 42.5% from
$578,755 in the comparable 1998 period due to a decrease of
$152,833 in the Company's sales compensation and a decrease in
employee compensation of $23,721 and a decrease in other expenses
of $69,274 as a result of Capital's modification in the
compensation structure for loan originators and certain other
employees. As a percentage of revenues, expenses were
approximately 123.9% in the current period compared to 93.9%
before payment of dividends on Preferred Stock and other income
in the comparable 1998 period.
As a result of the foregoing, the Company's net loss for the
three months ended June 30, 1999 was $58,073 or $0.044 per common
share, compared to net income of $38,539 before preferred stock
dividends and a net gain of $29,601 after preferred stock
dividends of $8,938 or $0.025 per common share for the comparable
1998 period. The Company did not have any preferred stock
outstanding during the period ended June 30, 1999 compared to the
same period in 1998, as all outstanding preferred shares were
converted to common stock on July 1, 1998.
Six Months Ended June 30, 1999 Compared to the Six Months Ended
June 30, 1998
Total revenues for the six months ended June 30, 1999 were
$618,468 compared to $1,005,289 for the six months ended June 30,
1998, a decrease of $386,821 or approximately 38.5%. The
decrease was primarily attributable to a reduction of $48,747 in
application and commitment fees to $32,953 from $81,700 in the
comparable 1998 period, and a decrease in origination fees of
$347,728 or 41.5% which was partially offset by an increase of
$9,654 in mortgage interest income. The reduction in
applications was a result of increased mortgage interest rates
during the period which sharply reduced the number of refinance
applications the Company received, as well as a reduction in real
estate sales in the Company's service area primarily due to a
reduction in the available supply of homes for sale. Continuation
of interest rates at the current or higher levels will most
likely have an adverse effect on the Company's business. During
the six months ended June 30, 1999 Capital closed 128 residential
mortgage loans in the principal amount of $28,360,607 compared
to 236 loans closed in the principal amount of $49,778,391 in the
six months ended June 30, 1998. At June 30, 1999, the Company
had approximately 65 residential mortgage applications in
process in the principal amount of $13,947,442 compared to 85
residential mortgage applications in process in the principal
amount of $20,319,052, at June 30, 1998.
Total expenses for the six months ended June 30, 1999 were
$697,672, a decrease of $265,756 or approximately 27.6% from
$963,428 in the comparable 1998 period due to a decrease of
$191,015 in the Company's sales compensation and a decrease in
employee compensation and benefits of $14,174 and a decrease in
other expenses of $60,558 as a result of Capital's modification
in the compensation structure for loan originators and certain
other employees. Other expenses include costs related to ongoing
litigation which are expected to continue for the foreseeable
future. As a percentage of revenues, expenses were approximately
112.7% in the current period compared to 95.8% before payment of
dividends on Preferred Stock in the comparable 1998 period.
As a result of the foregoing, the Company's net loss for the
six months ended June 30, 1999 was $64,072 or $0.049 per common
share, compared to net income of $43,484 before preferred stock
dividends and net income after preferred stock dividends of
$25,609 or $0.022 per common share for the comparable 1998
period. The Company did not have any preferred stock outstanding
during the period ended June 30, 1999 compared to the same period
in 1998, as all outstanding preferred shares were converted to
common stock on July 1, 1998.
During the period ending June 30, 1999, the Company
continued marketing its services to the public through its
Internet presence using its website home page on a major website
belonging to a national provider of mortgage loans and other
financial statistics. The Company's website provides the public
with its lending programs and interest rates on a daily basis, in
addition to the rates of other lenders that the Company competes
with. During the 3 month period ending June 30, 1999 the Company
has received numerous inquiries which has resulted in mortgage
loan applications from persons seeking mortgage financing.
The Company continues to be encouraged with the results the
Internet has provided as an additional source of mortgage
applications and is currently in the process of updating its own
website. Once the changes have been made the Company's website
will be linked to its homepage on the national provider's website
utilizing an on line mortgage application and streamlined
internet mortgage approval process. The Company expects to
complete these website changes during the third quarter of 1999.
In addition, the Company has identified and intends to link its
website with other national and regional websites that provide
mortgage rate listings and information to the public as
additional potential sources of mortgage applications.
To date, the number of domestic mortgages originated over
the Internet, relative to the total mortgage origination market
is very small. In 1998, industry wide only 0.7% of total
mortgage originations were generated via the Internet. However,
according to certain mortgage banking industry sources, by the
year 2005 the Internet could comprise 25% to 30% of total
mortgage originations. The Company's marketing strategy is to
supplement its current personal relationship based origination
business with the Internet.
Through its Internet presence, the Company has experienced
that e-commerce allows the Company to compete with entities much
larger and with greater resources than itself. Further, the
Company believes that this technology is becoming increasingly
important as an acceptable form of commerce, while providing the
Company with a cost effective method to potentially increase its
business.
During the first quarter of 1999, the Company has made
application to license itself as a mortgage banker in the State
of Connecticut and has identified and is considering applying for
licensing in other states. The Company's license was approved by
the State of Connecticut in June of 1999. During June of 1999,
the Company made an application to license itself as a mortgage
banker of second mortgages in the State of New Jersey. In July
1999, the license was approved. Accordingly the Company plans on
using the Internet to offer its mortgage products and services
within those states as the Company becomes licensed to do so.
There can be no assurance the Company will be successful in using
the Internet as a source of mortgage loan applications or that
the Company will apply for or be granted licenses in additional
states that it may make applications for licensing in.
LIQUIDITY AND CAPITAL RESOURCES
As of June 30, 1999, the Company had cash and cash
equivalents of $506,672 compared to $608,085 at December 31,
1998, a decrease of $101,413. The decrease is primarily
attributable to the loss from operations and cash used in
investing activities which primarily is the construction of a
single family home on one of the Hunterdon County building lots
owned by the Company. The Company anticipates completion of all
construction and offering the home for sale during the fourth
quarter of 1999.
The Company utilizes a $5,000,000 warehouse line of credit
for its daily mortgage loan funding operations and whenever
possible the Company employs its available cash to
fund mortgage loans which generates mortgage interest income, as
well as save interest costs and other fees associated with
utilizing its warehouse credit line. This warehouse
line is maintained with a mortgage warehouse lender which enables
the Company to borrow funds secured by residential mortgage loans
which will be temporarily accumulated or warehoused and then
sold. At June 30, 1999 the Company had borrowed $560,279 from
its warehouse line of credit which represented approximately 3
closed loans ready for sale.
Of the total loans in the warehouse at June 30, two loans
were new construction loans aggregating approximately $320,000.
These loans will remain in the warehouse until such time that all
construction work is completed, the balance of approximately
$100,000 in disbursements are made and the loans are sold to an
institutional investor.
In July 1999, the Company made an application with a
national provider of mortgage warehouse credit lines which the
Company believes, if granted, will be beneficial to the Company.
As of August 4, 1999 the Company application is pending approval.
In December 1996, the Company accepted a commitment issued
by a commercial bank for a construction mortgage financing line
of credit in the amount of $550,000 for use in the Company's real
estate development located in Hunterdon County, New Jersey, known
as Murray Hill Estates. The loan provided a letter of credit in
the amount of $111,583 which the Company assigned and deposited
in escrow with certain municipal authorities during January 1997
to guarantee the township adequate funds to complete the balance
of required site improvements on the property if the Company
fails to complete the required improvements. During March 1999,
the Company received a resolution executed by municipal
authorities granting the Company's request to reduce the letter
of credit to $39,000 since 90% of all improvements to the
property have been completed. The Company anticipates completing
the balance of the required improvements, which total
approximately $35,000, during the first quarter of 2000, when the
balance of all residential construction should also be completed.
The loan matured on December 31, 1997, and was extended by the
bank until July 31, 1998, except for the letter of credit which
was extended for an additional one year term through December 31,
1998 and again extended until December 31, 1999. As of October
1998, the Company has fully repaid the mortgage loan on its
subdivision.
In May 1995, the Company contracted to sell a lot for the
sum of $125,000. The Company received nonrefundable deposits of
$75,000 with a balance due the Company of $50,000 at closing of
title. Title was transferred to the buyer during August 1998.
At this time the Company also provided the buyer with a $330,000
credit line secured by a five month first mortgage on the
property and its improvements and the personal guarantee of the
buyer. The first $50,000 of the total credit line provided was a
purchase money mortgage taken back by the Company on the land.
The remaining $280,000 is for the construction costs of a new
single family home which is expected to be completed during the
second quarter of 1999. As of June 30, 1999 the buyer is
indebted to the Company in the approximate amount of $224,000.
The terms of the mortgage require monthly interest only payments
to the Company at an interest rate of 3% over the Wall Street
Journal prime rate. The mortgage matured in January 1999 and was
extended by the Company until April 1999 and extended again until
July 4, 1999. Although the Company is not required to grant any
further extensions it estimates that an additional extension of
three months will be necessary for the buyer to complete all
construction. The Company is presently negotiating an extension
agreement with the borrower and anticipates it will receive full
repayment of its mortgage during the fourth quarter of 1999.
As of August 1, 1999, the Company owns 4 unimproved building
lots in its Hunterdon County, New Jersey real estate development
and does not have any contracts of sale pending. However, in
September 1998, the Board of Directors authorized the Company to
build up to two, at any one time, single family, colonial style
homes, on speculation and offer them for sale to prospective
buyers. The Company believes that construction costs for each
home to be built will be approximately $225,000 and it will
afford it a better opportunity to obtain a profit from the
transaction then if it sold an undeveloped lot. Although there
can be no assurance that the Company will be successful in this
undertaking, the Company commenced construction during December
of 1998 of one such home. As of June 30, 1999 the Company has
invested approximately $124,500 in the residence. The Company
has retained an on-site construction manager who is a non-
affiliate of the Company, to assist the Company in this
construction project.
During April 1999, the Company concluded the major part of
its study concerning its internal operating systems becoming Y2K
compliant. As a result of its internal review, in April 1999,
the Company ordered new computer software and hardware from
suppliers that will make the Company Y2K compliant in addition to
upgrading its systems to be state of the art in the area of
mortgage processing, closing, and portfolio management of its
mortgage banking businesses. The costs associated with the
upgrading of the Company's hardware and software has not exceeded
the budgeted $25,000. The Company has made all of its Y2K
upgrades, installations and testing for its mortgage banking
business and overall corporate accounting during the second
quarter of 1999. The balance of its Y2K changes are software
related to its internet marketing efforts. These changes are
expected to be completed during the third quarter of 1999 and the
associated cost is expected to be non-material to the Company.
The major processing software systems utilized by the
Company are run internally and independently of outside vendors.
In addition, the Company has manual systems and equipment in
place as a back up to manage the flow of business until such time
as a system failure could be corrected, should one occur. The
Company continues to monitor the progress of its vendors Y2K
compliance in an effort to avoid a potential system failure.
Although the Company believes the costs associated with its
internal operating systems becoming Y2K compliant is known at
this time, the financial impact to the Company of the potential
failure by outside vendors and institutions, which are beyond the
control of the Company, to become Y2K compliant could result in
an interruption in, or a failure of, certain normal business
operations or activities. Such failures could materially and
adversely affect the Company's results of operations, liquidity
and financial condition.
The Company estimates that it will require additional
capital in order to successfully implement its future operational
plans. As a result, the Company is seeking additional capital
through, among other means, an infusion of noncollateralized
loans and the sale of additional equity in the Company. However,
there can be no assurance that the Company will be able to obtain
additional capital on terms acceptable to the Company.
PART II OTHER INFORMATION
Item 1. Legal Proceedings
On March 25, 1999, a derivative action on behalf of two New
Jersey limited liability companies (the "LLC's") was commenced
against certain defendants, including the Company, its President,
the Company's wholly-owned subsidiaries (collectively, the
"Company Defendants"); and one of the Company's directors,
Theodore P. Rica, Jr. ("Rica") in the chancery Division of the
Superior Court of New Jersey, Union County. The plaintiffs
allege that Rica and certain defendants other than the Company
Defendants ("non-Company defendants"), misappropriated assets and
opportunities of the LLC's for their own use, engaged in
self-dealing with respect to the LLC's, breached the operating
agreements of the LLC's, and converted and embezzled assets and
funds of the LLC's.
The Company Defendants are alleged to have aided and abetted
Rica in converting the assets of the LLC's by accepting loans and
payments from the LLC's and Rica and repaying the loans to Rica
in the form of cash and Company stock.
The plaintiffs seek declaratory and injunctive relief
against the Company Defendants; an accounting of (i) all shares
of Company stock purchased by Rica and certain non-Company
defendants and (ii) all payments to or from the Company and Rica
and certain non-Company defendants; imposition of a lien or
equitable trust in favor of the LLC's on shares of Company stock
issued in the names of Rica and certain non-Company defendants;
and certain unspecified compensatory and punitive damages,
attorneys' fees and costs.
In April 1999, the Court granted a preliminary injunction,
which, among other things, enjoins the Company Defendants from
allowing the transfer of any Company stock held in the name of
Rica and certain other non-Company defendants and directs the
Company Defendants to provide an accounting of all such stock.
The Company, while adamantly denying any wrongdoing, did not
oppose plaintiffs' application, as it did not adversely impact
the Company.
In April 1999, the plaintiffs filed lis pendens with respect
to four parcels of real property owned by the Company. The
Company believed that the lis pendens were unlawful and took
steps in an effort to have them voluntarily withdrawn or vacated
by court order. Accordingly, during July 1999, the Company's
motion to vacate the lis pendens was heard by the court and the
decision was decided in favor of the Company and an order was
granted by the court to remove the lis pendens.
Counter defendants, including the AAMC defendants, have
filed cross claims against other defendants and each other for
contribution and indemnification. The Company denies any
wrongdoing and believes that the claims against the Company
Defendants are without merit, and intends to defend the action
vigorously.
On May 18, 1999, Rica submitted to the Company his
resignation from the Company's Board of Directors.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit 27 Financial Data Schedule (For SEC use only)
SIGNATURES
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.
AMERICAN ASSET MANAGEMENT CORPORATION
(Registrant)
Date: August 13, 1999 By:_s/Richard G. Gagliardi____________
Richard G. Gagliardi
Chairman, President and Chief
Executive Officer (Principal
Executive and Financial Officer)