SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 For the period ended December 31, 1997 Commission File Number 0-2734 AMERICAN MIDLAND CORPORATION Exact name of registrant as specified in its charter NEW YORK 13-1919009 (State or other jurisdiction of incorporation) IRS employer ident. 302 Fifth Avenue, New York, New York I 0001 (Address of principal executive offices) (212) 279-5612 (Registrant's telephone number, including area code) Securities registered pursuant to Section 12(g) of the Act: Name of each exchange Title of each class on which registered common stock, par value $.0l per share Over the counter Securities registered pursuant to Section 12(g) of the Act: None (Title of Class) Indicate by (X) 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, and (2) has been subject to such filing requirements for the past 90 days. Yes X No Disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part 111 of this Form 10K or any amendment to this Form 10K. Aggregate market value of voting stock held by non-affiliates of the Registrant computed by reference to the price at which the Registrant's Common Stock was sold as of February 28, 1998: $50.000. Number of shares outstanding of the Registrant's Common Stock, as of February 28, 1998: 5,696,000. Part 1. Item 1. Business American Midland Corporation ("American"), a New York Corporation organized in February 1959, is engaged primarily in the seafood business in Costa Rica through a forty-five percent (45%) owned subsidiary known as Talmana S.A. ("Talmana"). Seafood American's 45% owned Costa Rican subsidiary, Talmana is engaged in the shrimp fishing and processing business. The shrimp produced by Talmana are obtained in the Pacific Ocean, off the west coast of Costa Rica, by fishing vessels owned and operated by Talmana as well as independent fishing vessels who catch is then processed by Talmana in its plant, located in Puntarenas, Costa Rica, and is then sold to wholesale or retail distributors primarily in Costa Rica, the United States and Europe for ultimate resale to the consuming public. Talmana presently owns 17 vessels licensed by the Costa Rican government to fish in that country's waters, such licenses are renewed or extended annually. Although there is an abundant supply of shrimp off the coast of Costa Rica, the availability of the shrimp is dependent upon prevailing natural conditions which vary from time to time. The selling price of the product tends to fluctuate in accordance with its availability worldwide. For the twelve months ended December 31, 1997, four customers accounted for substantially all of the sales of Talmana. American believes that the loss of any or all of these customers would not have a material adverse effect on the operations of Talmana since it believes that the demand for Talmana's products is such that new customers could readily be found. See Notes to the Consolidated Financial Statements for additional information relating to the acquisition of Talmana. Discontinued operations Prior to 1990 American terminated its involvement in its real estate operation in the State of Florida. Judgments were entered against American for approximately $2,300,000 on defaulted mortgage obligations. In 1996 American settled these obligations from its working capital and loans from its officers. Regulations andEnvironmental Matters Talmana, seafood operation is subject to numerous governmental regulations and licensing requirements in Costa Rica, including requirement that each vessel be licensed in order to fish the that country's waters; such fishing licenses are essential to the conduct of Talmana's operation and must be renewed or extended annually. American believes that Talmana is, and it will continue to be, in compliance with all of these regulations and licensing requirements; however, in the event of any non-compliance, it may be anticipated that additional capital investments and/or increased operating costs may be required or incurred in order to comply therewith. Competition Talmana's seafood operation is faced with intense competition, and many of its competitors have much greater resources than Talmana. This competition comes from producers of shrimp and other types of seafood in Costa Rica and elsewhere throughout the world. The principal methods of competition include the ability to locate and harvest the product, quality control, pricing and marketing. Employees American did not have any employees in 1997. Item 2. Properties American maintains a mailing address at 302 Fifth Avenue, New York, New York. Item 3. Legal proceedings There are no legal proceedings pending against American. Item 4. Submission of Matters to a Vote of Security Holders. No matters were submitted to a vote of security holders during the calendar year covered by this report. PART II Item 5. Market for the Registrant's common stock and Related Security holder Matters. American's common stock is traded in the over-the counter market, and, until September 30, 1990, was quoted on the Automated Quotation System of the National Association of Securities Dealers, Inc. ("NASDQ"). Although American's common stock continues to be listed in the National Daily Quotation Service "pink sheets", there is now only a limited or sporadic public trading market in its stock which since January 1, 1991, has been trading for approximately $. 01 per share. No dividends or other distributions have been paid with respect to the common stock of America. Item 6. Selected Financial Data. Amount in thousands except for per share data Year ended December 31, 1997 1996 1995 1994 1993 ---- ---- ---- ---- ---- Sales Interest & Misc Income 0 7 5 4 137 - - - - --- Total 0 7 5 4 137 - - - - ---- Income/(loss) continuing operations 137 91 43 162 (2347) ---- -- -- --- ----- Net Income/(loss) 137 91 43 162 (2347) --- -- -- --- ----- Per share Income(loss) continuing operations 0.02 0.02 0.01 0.03 (.41) ---- ---- ---- ---- ---- Weighted Average common shares 5696 5696 5696 5696 5696 Amount in thousands except for per share data Year ended December 31, 1997 1996 1995 1994 1993 Total Assets 3771 3634 3642 3232 3466 Long Term Debt Subordinated Debt Stockholders' Equity/ Deficit 2460 2323 (188) (343) (705) Note: American has not paid any cash dividends during the five years ended December 31, 1997. Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations. General This discussion should be read in conjunction with the financial statements for details of revenues, operating results and other information relating to the various segments Americans operations. American realized a gain of $137,000 in 1997 due primarily to profits from its profit of 45% owned Costa Rican subsidiaries. In December, 1992, American entered into a shareholder's agreement with its Costa Rican partner (Nebot, S.A. ) defining the rights and obligations of each of the shareholders in the shrimp fishing and processing business in Puntarenas, Costa Rica (Talmana S.A.) As a part of that agreement, American received $3,000,000 in preferred stock and recognized Nebot's fifty-five (55%) ownership of Talmana. As a result, American changed its method of financial reporting for Talmana from a consolidated subsidiary to that of an unconsolidated subsidiary. Current Operations. Other than its investment in Talmana, American has no operation of its own. Talmana owns 17 fishing vessels and also purchases shrimp from local fishermen. All of its product is processed in its plant and then sold primarily in Europe, the United States and Costa Rica. Liquidity and Capital Resources. American is inactive, does not have any employees and has minimal operating expenses. It is exploring various alternatives, including the sale of its interest in Talmana in order to raise sufficient funds to pay its obligations and become actively involved in an operating company. Effects of Inflation and Competition Inflation and competition do not have any significant effect on American nor its subsidiary, Talmana. However, the price of Talmana's shrimp is seasonal and dependent upon the availability of competitive farm and ocean shrimp. Increases in the cost of product can generally be passed on to the consumer and accordingly, inflation has had a negligible effect on Talmana's operation. Item 8. Financial Statements and Supplementary Data INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Consolidated financial statements Balance Sheets- December 31, 1997 and 1996; For the years ended December 31, 1997, 1996, 1995: Statements of Operations Statements of Stockholders' Equity/Deficit Statements of Cash Flow Notes to consolidated financial statements Item 9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. BDO Seidman ("BDO") resigned as American's principal accountant in February, 1993. During American's fiscal years ended December 31, 1991 and December 31, 1992, and the subsequent interim period preceding BDO's resignation ( as well as with respect to the fiscal year ended December 31, 1990) there were no disagreements with BDO on any matter of accounting principles or practices, financial statement disclosures, or auditing scope or procedure, which disagreement, if not resolved to the satisfaction of the former accountant, would have caused it to make reference to the subject matter thereof in connection with its report. As a result of BDO's untimely resignation and American's present financial condition, the following Consolidated Financial Statements have not been audited. AMERICAN MIDLAND CORP CONSOLIDATED BALANCE SHEET (Unaudited) December 31, December 31, 1997 1996 Current Assets Cash 7,000 8,000 Accounts Receivable Total Current Assets 7,000 8,000 Investments in and Advances to Unconsolidated Subsidiary, at Equity ( Note 1 ) 3,764,000 3,626,000 Mortgage Receivable ( Long term portion) Other Assets Total Assets 3,771,000 3,634,000 --------- --------- The accompanying notes are an integral part of these financial statements AMERICAN MIDLAND CORPORATION CONSOLIDATED BALANCE SHEET Unaudited ) December 31, December 31, 1997 1996 LIABILITIES: Current Liabilities Accounts Payable and Accrued Expenses 160,000 $ 160,000 Notes Payable 304,000 304,000 ------- ------- Total Current Liabilities 464,000 464,000 Excess of losses and distributions over investment and Advances to Real Estate Joint Ventures, at Equity 847,000 847,000 STOCKHOLDERS' EQUITY: Preferred stock, $10 par value, 2,000,000 shares authorized, none issued Common Stock, $.0l par value, 20,000,000 shares authorized 5,696,000 shares outstanding 57,000 57,000 Capital in excess of par value 24,785,000 24,785,000 Deficit (22,382,000) (22,519,000) ----------- ----------- Total Stockholders' Equity 2,460,000 $2,323,000 --------- ---------- $3,771,000 $3,634,000 ---------- ---------- The accompanying notes are an integral part of these financial statements. AMERICAN MIDLAND CORPORATION CONSOLIDATED RESULTS OF OPERATIONS (UNAUDITED) December 31, 1996 1997 1995 ---------- ---- --------- Sales Gross Profit ( Loss) Expenses: Selling & Admin. 1,000 17,000 54,000 Interest Depreciation and Amortization 3,000 Write down of investments (Notes 5,9) Total Expenses 1,000 17,000 57,000 -------- -------- -------- Other Income (Expenses) Interest & Other Income 5,000 Gain on sale of assets 0 7,000 7,000 5,000 Income (loss) from continuing operations before equity in gain or ( loss ) of unconsolidated joint ventures & taxes on income (1,000) (10,000) (52,000) Equity in gain or (loss) of unconsolidated joint subsidiaries and joint ventures 138,000 101,000 95,000 ------------- ------- ------ Income (loss) from continuing operations before taxes on income 137,000 91,000 43,000 Taxes on income Income (loss) from continuing operations 137,000 91,000 43,000 ------- ------ ------ Net income (loss) per share .02 .02 .01 - --- --- Weighted average common shares outstanding 5,696,000 5,696,000 5,696,000 See accompaning notes to financial statements. AMERICAN MIDLAND CORPORATION CONSOLIDATED STATEMENT OF CASH FLOW (UNAUDITED) Year Ended December 31, 1997 1996 1995 Cash Flow from Operating Activities: Net Income ( Loss) 137,000 91,000 43,000 Adjustments to reconcile net Income ( loss) to cash provided by ( used In ) operating activities: Depreciation and Amortizaton 3,000 Reversal of prior year over accrual 2,555,000 113,000 Write down of Mortgage Receivable 36,000 Decrease in Notes & Mortgage Receivable 100,000 Decrease in Advances to Real Estate Joint Ventures Decrease (increase ) in liabilites (2,640,000) (146,000) Equity in gain of unconsolidated subsidiary (138,000) (101,000) (95,000) Loss on discontinued operation Wrfte down of investment Cash Provided by ( Used in ) Operations (1,000) 5,000 (46,000) ------- ----------- ------- Net Increase (decrease) In cash (1,000) (5000) ( 46,000) Cash at beginning of period 8,000 13,000 59,000 ----- ------ ---------- Cash at end of period 7,000 8,000 13,000 ----- ----------------------------- The accompanying notes are an integral part of these financial statements AMERICAN MIDLAND CORPORATION NOTES TO CONSOLIDATED STATEMENTS NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation The consolidated financial statements include the accounts of American Midland Corporation ("American") and its wholly-owned corporate subsidiary (AMC Management Corp.) . American reports its investment in Talmana as an investment in an unconsolidated subsidiary. American's investments in unconsolidated subsidiaries and joint ventures are carried on the equity method. All significant intercompany accounts and transactions have been eliminated. The 1997 statements do not include the results of the company's 45% owned subsidiary Cash Equivalents American considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. Income Taxes Provisions or benefits are made for deferred income taxes on all significant timing differences which represent the tax effects of transactions reported for tax purposes in periods different than for financial reporting purposes. In December, 1987, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 96, "Accounting for Income Taxes". The effective date had been delayed, and in February, 1992, changed by Statement 109, "Accounting for Income Taxes". Statement 109 established financial accounting and reporting standards for the effects of income taxes that result from a company's activities during the current and preceding year. It requires an asset and liability approach in calculating current and deferred taxes based on the difference between financial statement balances and the tax basis of assets and liabilities at the currently enacted tax rates. At December 31, 1997, the Company had available net operating loss carry forwards expiring from 1998 through 2004. NOTE 2 - GOING CONCERN American has suffered recurring losses from its operations and its current obligations exceed its current assets. It has recently settled substantial obligations and funded set settlements by loans from officers with an option to convert $30,000 of said loans into 3,000,000 shares of common stock. It is attempting to raise additional funds and /or sell its interest in Talmana to finance future operations. These matters raise substantial concern about American's ability to continue as a going concern. Per Share Calculations The computation of per share amounts is based on the weighted average number of common shares outstanding in each period and includes Common stock equivalents, which include stock options and convertible debentures, are either insignificant or anti-dilutive. 4. Investments. In July, 1989, a partnership , consisting of American and The First Republic Corporation of America ("FRCA") acquired, as equal partners, a 40% interest in a shrimp fishing and tuna processing operation in Costa Rica, doing business as Talmana, S.A. Effective August 1,1990, American acquired FRCA's interest in Talman in exchange for American's then remaining interst in a Florida seafood business. At the same time, American and its Costa Rican partners dissolved their partnership. American obtained a 45% interest in the shrimp operations and the Costa Rican partners obtained a 100% interest in the tuna operations. American and the former Costa Rican partners operate their respective businesses independependently. In 1992, American entered into a shareholders' agreement with Nebot S.A. ("Nebot") the owner of fifty -five percent of the stock in the Costa Rican corporation. The shareholders' agreement defined the rights and obligations of the partners and provided for the issuance of $3,000,000 of perferred stock to American in consideration for its investment in Talmana (in addtiion to the 45% of the common stock of Talmana which American continues to own). American's ownership of a $3,000 10 year 6% redeemable preferred stock due December 31, 2002 and it's ownership of forty five percent of the outstanding common shares of Talmana S.A. is carried on the books as an investment in an unconsolidated subsidiary. Dividends on the preferred stock may be paid in any year in which Talmana has after tax earnings in excess of $1,500,000 if declared by the board of directors of Talmana. Dividends have not been paid and have not been accrued on the books of American. Unpaid dividends are payable on the Redemption date of the preferred stock. American's investment is carried on its books on the equity method of accounting 5. Results of Operations of Talmana. American reported as equity in gain of an unconsolidated subsidiary 45% of Talmana's unaudited profit of $307, 000 for year ended December 31, 1997. 6. Settlement of Obligation. In 1996 American settled its obligations with the FDIC, Nations Bank and Stephen Bernstein for amounts substantially reduced amounts. The difference between the amount paid and the amount of the obligations were credited to paid in surplus. AMERICAN MIDLAND CORPORATION Subsidiaries of American (at December 31, 1997) The following is a list of American's significant subsidiaries and the state in which each such subsidiary or partnership was incorporated or organized: State of incorporation AMC Management Corp. Delaware Talmana, S.A. (45%) Costa Rica PART IV Item 4. Exhibits, Financial Statement schedules and Reports on Form 8-k. (a) Exhibits Subsidiaries of American. (b) Reports on form 8k There were no reports on form 8K filed by the Registrant during the year ended December 31, 1997. PART III. Item 10, Directors and Executive officers of American Name Position Age Elected Director Emil Ramat Chairman of the Board of Directors & President 75 1974 Irwin S. Lampert Vice Pres/Sec'y Treasurer and Director 66 1984 Mr Ramat has been Chairman of the Board, President and Chief Executive Officer of American for more than the past five years. Mr. Lampert has been a director and Senior Vice President, Treasurer and Chief Financial Officer of American for more than the past five years. . Item 11, Executive compensation During the twelve months ended December 31, 1997, none of American's executive officers received any remuneration from American. Mr. Ramat is employed pursuant to an employment agreement with Talnana which expires in December, 1997. Mr. Lampert is employed pursuant to an employment agreement with Talmana which expires in December, 1997. Item 12, Security ownership of Certain Beneficial owners and Management (a) As of February 28, 19987, American knows of no person or group owning beneficially more than 5% of its outstanding common stock, except for Jonathan P. Rosen, who owned beneficially 464,500 shares, (including 98,700 of American's shares owned by The First Republic Corporation of America, a public company of which Mr. Rosen is a principal stockholder) , representing 8.15% of the class, and directors and officers, as a group, who owned beneficially 185,183 shares representing 3.25% of the class. (b) The following table sets forth certain information regarding the ownership of American's common stock as of February 28, 1998 by each of the directors of American and the directors and officers of American as a group: Number of Shares Percent Name of owner Beneficially owned of class Irwin S.Lampert 120,500 (1) (2) 2.12% Emil Ramat 64,683 (2) 1.13% All Directors and Officers as a group (2 persons) (1)These shares are owned by Judith Lampert.(Mr Lampert's wife) (2)Does not include an option to convert loans of $30,000 into 3,000,000 shares of common stock. (2,000,000 shares by Emil Ramat and 1,000,000 shares by Irwin Lampert) SIGNATURES Pursuant to the requirements of Section 13 or 15 (d) of the Securities and Exchange Acto of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereuntp duly authorized. American Midland Corporation By______________________________ Emil Ramat, President and Chairman of of the Board of Directors Pursuant to the requirements of the Securities and Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the date indicated. Signature Title President and Chairman of the Board Emil Ramat of Directors March 29, 1998 Vice President Irwin S.Lampert March 29, 1998