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.
<PAGE>
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.
<PAGE>
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.
<PAGE>
Item 6. Selected Financial Data.
<TABLE>
<CAPTION>
Amount in thousands except for per share data
Year ended December 31,
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
Sales
<S> <C> <C> <C> <C> <C>
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)
</TABLE>
Note: American has not paid any cash dividends during the five years ended
December 31, 1997.
<PAGE>
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.
<PAGE>
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.
<PAGE>
AMERICAN MIDLAND CORP
CONSOLIDATED BALANCE SHEET (Unaudited)
<TABLE>
<CAPTION>
December 31, December 31,
1997 1996
Current Assets
<S> <C> <C>
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
--------- ---------
</TABLE>
The accompanying notes are an integral part of these financial statements
<PAGE>
AMERICAN MIDLAND CORPORATION
CONSOLIDATED BALANCE SHEET
Unaudited )
<TABLE>
<CAPTION>
December 31, December 31,
1997 1996
LIABILITIES:
Current Liabilities
<S> <C> <C>
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
---------- ----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
AMERICAN MIDLAND CORPORATION
CONSOLIDATED RESULTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
December 31,
1996 1997 1995
---------- ---- ---------
Sales
Gross Profit ( Loss)
Expenses:
<S> <C> <C> <C>
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.
</TABLE>
<PAGE>
AMERICAN MIDLAND CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOW
<TABLE>
<CAPTION>
(UNAUDITED)
Year Ended December 31,
1997 1996 1995
Cash Flow from Operating Activities:
<S> <C> <C> <C> <C>
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
----- -----------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements
<PAGE>
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.
<PAGE>
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.
<PAGE>
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
<PAGE>
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.
<PAGE>
PART III.
Item 10, Directors and Executive officers of American
<TABLE>
<CAPTION>
Name Position Age Elected Director
Emil Ramat Chairman of the Board of
<S> <C> <C>
Directors & President 75 1974
Irwin S. Lampert Vice Pres/Sec'y Treasurer
and Director 66 1984
</TABLE>
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:
<PAGE>
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)
<PAGE>
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
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
AMERICAN MIDLAND CORPORATION
FINANCIAL DATA SCHEDULE
ARTICLE 5 OF REGULATION S-X
This schedule contains summary financial information extracted from the
condensed consolidated finacial statements for the year ended December 31, 1998
and is qualified in its entirety by reference to such statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 12-mos
<FISCAL-YEAR-END> dec-31-1997
<PERIOD-END> dec-31-1997
<CASH> 7,000
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 7,000
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 3,771,000
<CURRENT-LIABILITIES> 464,000
<BONDS> 0
0
0
<COMMON> 57,000
<OTHER-SE> 2,460,000
<TOTAL-LIABILITY-AND-EQUITY> 3,771,000
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 137,000
<INCOME-TAX> 0
<INCOME-CONTINUING> 137,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 137,000
<EPS-PRIMARY> (0)
<EPS-DILUTED> (0)
</TABLE>
