SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                   FORM 10-KSB
(Mark One)

[X]       ANNUAL  REPORT  PURSUANT  TO  SECTION  13 OR 15(d)  OF THE  SECURITIES
          EXCHANGE ACT OF 1934

          For the fiscal year ended:  December 31, 1997

          OR

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

          Commission file number:  0 24736

                                  Midland, Inc.
                                  -------------
             (Exact name of registrant as specified in its charter)

         Colorado                                               84 1078201
         --------                                               ----------
(State or other jurisdiction of                             (I.R.S. employer
incorporation or organization)                            identification number)

 1999 Broadway, Ste. 3235, Denver, Colorado                        80202
 ------------------------------------------                        -----
(Address of principal executive offices)                        (Zip Code)

Registrant's telephone number: (303) 292  2992

Securities registered pursuant to Section 12(b) of the Act:  None

Securities registered pursuant to Section 12(g) of the Act:

                                  Common Stock
                                (Title of class)

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

Indicate by check mark if disclosure of delinquent  filers  pursuant to Rule 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 III of this Form 10-K or any amendment to this
Form 10-K. [ ]

State the aggregate  market value of the voting stock held by non  affiliates of
the registrant. The aggregate market value shall be computed by reference to the
price at which the stock was sold,  or the average bid and asked  prices of such
stock,  as of a specified  date  within 60 days prior to the date of filing:  On
November 30, 1998, there were outstanding:  (I) 3,489,957 shares of common stock
and  (ii)  301,821  shares  of  Series  A  Preferred  Stock   convertible   into
approximately 12,782,120 shares of common stock. The Series A Preferred Stock is
considered  to be a common stock  equivalent  for purposes of this  calculation.
There were, therefore, 16,272,077 common share equivalents outstanding, of which
affiliates held 143,990, leaving 16,128,087 common share equivalents held by non
affiliates.  There were no bid or asked  quotations for the common stock on that
date; thus, there was no aggregate market value for the voting stock equivalents
held by non-affiliates on November 30, 1998.

Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest  practicable date: As of November 30, 1998, there
were 3,489,957  shares of common stock  outstanding and 16,270,077  common share
equivalents.

                       DOCUMENTS INCORPORATED BY REFERENCE

List hereunder the documents if  incorporated  by reference and the Part of this
Form 10-KSB into which the document is incorporated:
None.

<PAGE>


Item 1.  Description of Business.

Business until February 18, 1997: The Company, prior to 1997, was engaged in the
sale of gourmet  coffee and related  products and  accessories  through  service
concessions  located in a chain of grocery  stores in Southern  California,  the
most  substantial  number of which were in Ralph's.  In late October,  1996, the
Company began  experiencing  difficulties in its relationship with Ralph's,  the
result of which was that  Ralph's  refused to pay its  invoices.  This  caused a
default by the Company in  payments  due its coffee  suppliers.  The Company was
then  unable to provide  coffee to its sales  outlets.  The sales  outlets  then
terminated their relationship with the Company.  The Company and Ralph's entered
into a mutual release in February,  1997. Ralph's kept the slotting fees paid by
the Company, and the Company was relieved of all liabilities claimed by Ralph's.
There were no  obligations  between the  Company  and its other  sales  outlets.
Subsequently,  the Company settled outstanding  liabilities to many of its other
creditors.

Secondary  Offering:  The  Company,  on August 14,  1996,  completed a secondary
offering to the public of 54,000  units  (Units),  each Unit  consisting  of one
share  of  Series A  Preferred  Stock  (Series  A  Preferred  Stock)  and  fifty
Redeemable Common Stock Purchase Warrants (Series A Warrants).

     Series A Preferred  Stock:  The Series A  Preferred  Stock was to have been
automatically converted into shares of common (Common Stock) on October 1, 1998;
however,  there were an insufficient  number of shares authorized to provide for
conversion.   The  Company  has  allowed  preferred   shareholders  who  request
conversion  in  writing  to  obtain  shares  of  Common  Stock,  but there is no
assurance  it  will  continue  to  be  able  to  do  so  given  the   authorized
capitalization of the Company.  The Company  anticipates  calling and holding an
annual  meeting of  shareholders  during  April,  1999,  and, in addition to the
election  of  directors,  will place on the ballot a proposal  to  increase  its
authorized  capitalization  to an amount  sufficient to provide for  conversion.
Until conversion is effected, each share of Series A Preferred Stock is entitled
to 35 votes on each matter submitted to a vote to the Common Stock as if the two
classes,  common and preferred,  constituted one class.  Each share of Preferred
Stock is currently convertible into approximately 42.35 shares of Common Stock.

The  Company,  on or about May 18,  1998,  during  the  tenure of Mr.  Daniel W.
Fisher,  declared a stock dividend on its Series A Preferred Stock. The dividend
announced  would have resulted in the Company  issuing one  additional  share of
Series  A  Preferred  Stock  for  each  two  shares  outstanding  on the date of
declaration.  This would have  resulted in their being 50% more shares of Series
Preferred   Stock   outstanding   after  the  dividend  than  are  actually  now
outstanding.  The  dividend  has  not  been  distributed,  however,  due  to the
difficulties  which arose  between the  Company and its former  transfer  agent,
Signature Stock Transfer.  The Company has not determined what, if anything,  it
will do so bring this distribution into effect.  All statements  regarding share
figures in this filing are to pre dividend shares.

     Series A Warrants:  Each Series A Warrant originally entitled the holder to
purchase one share of Common Stock (Warrant Share) at an exercise price of $1.00
per Warrant  Share until August 14,  2001.  The strike price was reduced to $.50
per share on or about May 18, 1998.  Series A Warrants are subject to redemption
by the  Company at a price of $0.05 each on thirty  days prior  written  notice;
provided,  however,  that the closing sales price per share for the Common Stock
has equaled or exceeded  $2.50 for ten  consecutive  trading  days.  The Company
presently has no right to call the Series A Warrants.

Mega-Hell  and Mill Agro  Acquisitions:  On February 18, 1997  (MegaHel  Closing
Date),  the Company  closed  under a Plan and  Agreement  of  Purchase  (MegaHel
Purchase  Agreement) with the shareholders  (MegaHel  Shareholders) of MILL-AGRO
(HELLAS)  SA, a Panamanian  company,  and MEGAHEL  NAUTICAL SA, a Greek  company
(both of which  business  entities are  collectively  referred to as the MegaHel
Subsidiaries).  The Company  acquired from the MegaHel  Shareholders  all of the
outstanding  proprietary interest of the MegaHel  Subsidiaries,  which made them
wholly-owned subsidiaries.


<PAGE>


The Company  subsequently  changed its name from America's  Coffee Cup, Inc., to
Midland, Inc., as a result of this acquisition.

The  Company  issued  to the  MegaHel  Shareholders  74,604  shares  of Series A
Preferred  Stock and  149,259  shares of a Series B  Preferred  Stock  (Series B
Preferred Stock). The Board of Directors was then expanded to six in number, and
joining Messrs. Marsik and Pierce were Messrs. Christos Traios, Charles Stidham,
Arthur Malcolm and E. Robert Barbee.  The newly constituted board then appointed
Mr.  Traios  Chairman of the Board of  Directors,  Chief  Executive  Officer and
President,  Mr. Marsik  Executive  Vice-President,  Chief Financial  Officer and
Treasurer,  Mr. Stidham Executive  Vice-President  (Managing  Director) of North
American Shipping and Trading Operations,  (d) Mr. Barbee Vice-President and Mr.
Pierce Secretary.

     Series B Preferred Stock: The Series B Preferred Stock consisted of 149,259
shares, with each share (1) to have been automatically converted into 150 shares
of Common Stock on October 1, 1998, or sooner at the election of the holder, (2)
having been entitled to 150 votes on each matter  submitted to the  shareholders
of the Company,  with certain  super  majority  provisions  being  applicable in
certain instances, (3) having been entitled to a liquidation preference, (4) not
being  redeemable  and (5) not being  entitled  to  dividends.  This  series had
certain  non  dilution  provisions  applicable  to  it in  the  event  of  stock
dividends, stock splits and other extraordinary corporate events. As of the date
of this report, there were no outstanding shares of this series and it ceased to
exist by its terms due to the Common Stock conversion features.

The Company, the MegaHel Shareholders and the MegaHel Subsidiaries  subsequently
rescinded the MegaHel  Purchase  Agreement under applicable  federal  securities
laws  effective  the date of the  original  acquisition;  thus,  for  legal  and
accounting  purposes  it is as if the  acquisition  had never taken  place.  The
recision resulted in (1) the return of all Series A and Series B Preferred Stock
issued in the acquisition of the MegaHel Subsidiaries and (2) the resignation of
Mr. Traios from the Board of Directors and from all officerial  positions  which
he held with the Company.  Mr.  Marsik then assumed the positions of Chairman of
the Board of  Directors,  Chief  Executive,  Financial and  Accounting  Officer,
President and Treasurer.  Mr. Stidham then resigned from all positions held with
the Company,  Mr.  Pierce  having  previously  resigned as a director on May 13,
1998.

New Departures  Acquisition:  On October 10, 1997 (New Departures Closing Date),
the  Company  closed  under a Plan and  Agreement  of Purchase  (New  Departures
Purchase  Agreement) with the shareholders (New Departures  Shareholders) of New
Departure Corporation, a Texas corporation (New Departures),  and New Departures
itself.  The Company  acquired from the New Departures  Shareholders  all of the
outstanding proprietary interest of New Departures,  which made New Departures a
wholly owned subsidiary.

<PAGE>


The Company issued to the New Departures  Shareholders 70,000 shares of Series B
Preferred  Stock.  Mr. R.  Wayne Duke then  joined  Messrs.  Marsik,  Barbee and
Malcolm on the Board of  Directors.  The board then  appointed  (1) Mr.  Duke as
Chairman of the Board of Directors,  Chief Executive Officer and President,  (2)
Mr. Marsik  Executive Vice President,  and (3) Mr. Pierce  Secretary.  The board
elected  to defer  the  decision  of who  would  serve as  Chief  Financial  and
Accounting  Officer  and  Treasurer.  The New  Departures  Shareholders  and New
Departures  undertook to deliver audited financial  statements of New Departures
as of and for the period  beginning  at inception  of New  Departures  up to and
including September 30, 1997, all as required by applicable securities laws. Mr.
Stidham  resigned all  positions  with the Company on October 10, 1997,  and Mr.
Marsik did the same on December 18, 1997.

The Company, the New Departures Shareholders and New Departures,  on January 22,
1998,  rescinded the New Departures  Purchase Agreement under applicable federal
securities laws effective the date of the original acquisition;  thus, for legal
and accounting  purposes it is as if the acquisition had never taken place.  The
recision  resulted in (1) the return of all Series B Preferred  Stock  issued in
the  acquisition of New Departures and (2) the  resignation of all then officers
and  directors of the Company,  with the  exception of Mr. Duke,  who remained a
director of the Company.

ArconEnergy  Acquisition:  On January 22, 1998 (Arcon Closing Date), the Company
closed under a Plan and Agreement of Purchase  (Arcon  Purchase  Agreement) with
the shareholders (Arcon Shareholders) of Arconenergy,  Inc., a Texas corporation
(ArconEnergy), and ArconEnergy. The Company acquired from the Arcon Shareholders
all  of  the  outstanding  proprietary  interest  of  ArconEnergy,   which  made
ArconEnergy a wholly owned subsidiary.  The Arcon Shareholders  received 140,943
shares of Series B Preferred Stock. The Board of Directors was reconstituted and
joining Mr. Duke were Messrs.  Daniel W. Fisher,  Edward Fisher, John H. Spriggs
and James R. Clark. The newly constituted board then appointed (1) Mr. Daniel W.
Fisher Chairman of the Board of Directors and Chief Executive  Officer,  (2) Mr.
Spriggs President and Chief Operating and Financial Officer,  (3) Mr. Willard G.
McAndrew, III, Senior Vice President/Investments and (4) Mr. Pierce Secretary.

The Arcon  Shareholders  and  ArconEnergy on the Arcon Closing Date undertook to
deliver  audited  financial  statements of  ArconEnergy as of and for the period
beginning at the inception of ArconEnergy up to and including November 30, 1997,
all as required by applicable  securities laws. Further,  the Arcon Shareholders
and ArconEnergy represented and warranted,  among other things, that the patents
pertaining  to a product  referred  to as DF 144 would have an audited  value of
$16,000,000  (U.S.) and that  certain  oil and gas assets  would have an audited
value of  $25,000,000  (U.S.),  leaving a minimum  shareholders'  equity for the
ArconEnergy of approximately $41,000,000 (U.S.).

<PAGE>


On June 15, 1998, the Company  rescinded its  acquisition of ArconEnergy  due to
the fraud  perpetrated  by Mr.  Daniel W. Fisher in obtaining  the execution and
delivery of the Arcon Purchase Agreement.  In accordance with the recision,  all
shares  of  ArconEnergy  held  by  the  Company  were  returned  to  the  former
shareholders of ArconEnergy and the Company became entitled to obtain the return
of all shares issued to the Arcon Shareholders.  Mr. Spriggs returned all 46,831
shares  of  Series B  Preferred  Stock  held by him to the  Company  immediately
following June 15, 1998. Mr. Daniel W. Fisher  returned the remaining  shares of
Series B Preferred  Stock issued in the acquisition of ArconEnergy on August 21,
1998.

The recision was based on the: (1) failure of  ArconEnergy to deliver the agreed
on financial statements required pursuant to applicable securities  regulations,
(2)  misrepresentations  of  ArconEnergy  and Mr.  Daniel  W.  Fisher  as to the
ownership  of the patents and certain oil and gas rights  which they  claimed to
own through ArconEnergy; (3) misrepresentations of ArconEnergy and Mr. Daniel W.
Fisher as to the value of these  patents and oil and gas rights under  Generally
Accepted Accounting  Principles;  (4)  misrepresentations of ArconEnergy and Mr.
Daniel  W.  Fisher  as  to  the  outstanding  liabilities  of  ArconEnergy;  (5)
misrepresentations  of  ArconEnergy  and Mr.  Daniel W.  Fisher  concerning  the
capital structure of ArconEnergy;  (6) misrepresentations of ArconEnergy and Mr.
Daniel W.  Fisher as to the  outstanding  liabilities  of  ArconEnergy;  and (7)
various other  misrepresentations  of ArconEnergy and Mr. Daniel W. Fisher.  The
Company learned of these  misrepresentations on Friday, June 12, 1998, and acted
on them on Monday,  June 15, 1998.  Mr. Daniel W. Fisher was given notice of and
an opportunity  to defend these matters at a properly  called board meeting held
in Dallas,  Texas,  and was allowed to attend by telephone and be represented by
legal  counsel.  A majority of the  directors of the Company were present at the
meeting  and a quorum was  established.  Mr.  Fisher  notified  the board of his
intention of being present at this meeting; however, he failed to appear, as did
his attorney.

Immediately following the recision, on June 15, 1998, two of the remaining three
members of the Board of  Directors  resigned,  those being  Messrs.  Spriggs and
Clark.  The Board of Directors  then consisted of Messrs.  Duke and Pierce,  the
latter  of whom  was  appointed  a  director  at a  second  meeting  immediately
following  the first on this date,  and who was then  appointed to serve as CEO,
President and Treasurer of the Company. Mr. Duke resigned all positions with the
Company on July 16, 1998.

<PAGE>


On July  9,  1998,  the  Company  filed  a  complaint  (No.  98 D 1495)  against
ArconEnergy,  St. Andrews, Inc. (an affiliate of Mr. Fisher's), Daniel W. Fisher
and Morgan Guaranty,  Ltd. (another  affiliate of Mr. Fisher's),  in the federal
United States District Court for the District of Colorado. The complaint alleges
that the  defendants  defrauded  the  Company  and  violated  federal  and state
securities  acts and state  common law  principles  (1) in  obtaining  the Arcon
Purchase  Agreement and the issuance of the Series B Preferred Stock thereunder,
(2) in issuing 180,000 shares of Series A Preferred Stock and 9,000,000 Series A
Warrants to affiliates of Mr. Fisher; (3) in the sale of 42,004 shares of Series
A Preferred Stock in exchange for approximate  cash proceeds of $570,060 and the
(4) the  misappropriation  of those funds. As of the date of this report, all of
the  defendants  had been  served and  defaults  obtained.  The Company has made
application for a final judgment against all defendants.

The Company on August 21, 1998,  entered into an  agreement  with Mr.  Daniel W.
Fisher and his two affiliates,  St. Andrews,  Inc., and Morgan  Guaranty,  Ltd.,
whereby  Mr.  Daniel W.  Fisher  returned  134,800  shares of Series A Preferred
Stock,  9,000,000  Series A Warrants and all of the remaining shares of Series B
Preferred  Stock  then  outstanding  to the  Company,  all of  which  have  been
surrendered to treasury.  In addition,  Mr. Daniel W. Fisher paid to the Company
the sum of approximately $615,964.98, half of which was agreed to be released to
the mediator for resolving the disagreements  between the parties.  In addition,
Mr. Fisher agreed to surrender to the Company all securities and money held in a
brokerage  account in the United States and to surrender the accounting  records
of the Company.  Subsequently, the Company learned that there were no securities
or cash in the United States brokerage account, and Mr. Fisher refused to return
the accounting records;  thus, the Company declared the agreement to be null and
void and is again pursuing judgments against Mr. Fisher and his affiliates.

Other  Acquisitions:  It has  come  to the  attention  of the  Company  that  an
agreement  was executed and  delivered,  but never  closed  under,  with one Mr.
Stephen King and pertaining to Jet View  Holdings.  Contrary to the assertion of
Mr. King, as he announced to the media without the authority of the Company, Jet
View was never  acquired  since  the  agreement  lapsed  by its  terms  prior to
closing.  Furthermore,  Mr. King was never officially  appointed to serve on the
Board of Directors. The Company also negotiated for and obtained a commitment to
acquire two separate  corporations,  DRC,  Inc.,  and Disk Man. Both  agreements
failed to close.

<PAGE>



Series A and B Preferred  Stock  Reconciliations:  There were  54,000  shares of
Series A Preferred Stock and no shares of Series B Preferred  Stock  outstanding
at December 31, 1996. At November 30, 1998,  there were 301,821 shares of Series
A Preferred Stock and no shares of Series B Preferred Stock outstanding.

On February 17, 1997,  the Company  issued  74,604  shares of Series A Preferred
Stock  and  149,259   shares  of  Series  B  Preferred   Stock  to  the  MegaHel
Shareholders.  On February 17, 1997,  the Company also issued  41,617  shares of
Series A Preferred  Stock to officers  and  directors  in  recognition  of their
services.  The MegaHel  acquisition was subsequently  rescinded,  and the 74,604
shares of Series A  Preferred  Stock and  149,259  shares of Series B  Preferred
Stock issued were returned to treasury.  Also on August 29, 1997, an officer and
director was issued 29,000 shares of Series A Preferred  Stock in recognition of
services  prior to that date.  On October 10, 1997,  the Company  issued  70,000
shares  of  Series  B  Preferred  Stock  to  the  New  Departure   Shareholders.
Subsequently, on January 22, 1998, this acquisition was rescinded and the 70,000
shares of Series B Preferred  Stock were  returned to  treasury.  On January 22,
1998, the Company issued 140,493 shares of Series B Preferred Stock to the Arcon
Shareholders.  On February 6, 1998,  a former  officer and  director  was issued
90,000 shares of Series A Preferred  Stock in  recognition  of his services from
August 29, 1997,  through January 21, 1998. From February through April, 1998, a
former  officer and director of the Company,  Mr. Daniel W. Fisher,  conducted a
private  offering  of  Series A  Preferred  Stock,  the  result of which was the
issuance of 42,004 shares for cash of approximately  $570,060. In May, 1998, Mr.
Daniel W. Fisher, misappropriated 180,000 shares of Series A Preferred Stock, of
which 134,800 were retrieved and returned to treasury in August and September of
1998; thus, 45,200 shares were irretrievably sold into market. Subsequently,  on
June 15,  1998,  the  ArconEnergy  acquisition  was  rescinded,  and the 140,493
outstanding shares of Series B Preferred Stock returned to treasury.

In summary, as of the date of this report, there were 301,821 shares of Series A
Preferred  Stock  and no shares of Series B  Preferred  Stock  outstanding.  The
following tables reconcile the discussion in the foregoing paragraph:

Series A:

 54,000    Secondary Offering      August 16, 1996
 41,617    Officers and Directors  February 17, 1997
 74,604    MegaHell Acquisition    February 17, 1997
(74,604)   MegaHell Recission      August 29, 1997
 29,000    Officer and Director    August 29, 1997
 90,000    Officer and Director    February 6, 1998
 42,004    Private Offering        February through April, 1998
 45,200    Daniel W. Fisher        May, 1998

301,821

<PAGE>


Series B:

 149,259   MegaHell Acquisition        February 17, 1997
(149,259)  MegaHell Recission          August 29, 1997
  70,000   New Departure Acquisition   October 10, 1997
 (70,000)  New Departure Recission     January 22, 1998
 140,493   ArconEnergy Acquisition     January 22, 1998
(140,493)  ArconEnergy Recission       June 15, 1998

There were 70,617 shares of Series A Preferred  Stock issued during 1997;  thus,
there were 124,617  shares of Series A Preferred  Stock  outstanding at December
31, 1997.  There were no shares of Series B Preferred Stock  outstanding at year
end due to the recission of the MegaHel and New Departures  acquisitions.  There
were 125,504 shares of Series A Preferred  Stock issued during the first quarter
of 1998; thus, there were 250,121 shares of Series A Preferred Stock outstanding
at March 31, 1998. There were no shares of Series B Preferred Stock  outstanding
at the end of the first quarter of 1998 due to the recission of the  ArconEnergy
acquisition.  There were 51,700 shares of Series A Preferred Stock issued during
the  second  quarter  of 1998;  thus,  there  were  301,821  shares  of Series A
Preferred  Stock  outstanding at June 30, 1998. No shares were issued during the
third  quarter  of 1998;  thus,  the number of  outstanding  shares at that date
remained 301,821 in number.

Common  Stock  Reconciliation:   There  were  845,567  shares  of  Common  Stock
outstanding  at December 31, 1996.  At November 30, 1998,  there were  3,489,957
shares outstanding.

On February 17, 1997,  552,640  shares of Common Stock were issued to directors.
There were 725,000 shares of Common Stock issued from January 10, 1997,  through
December 11, 1997,  pursuant to the exercise of  previously  issued  warrants to
bridge loan  holders.  On July 29,  1997,  500,000  shares of Common  Stock were
issued to officers and directors  under an Incentive  Stock  Ownership Plan. The
Company,  on March 31,  1998,  issued  200,000  shares of Common  Stock  under a
contract with a third party,  Mr.  Stephen King, in exchange for an agreement to
pay  $100,000.  The  200,000  shares were  issued,  but the  $100,000  was never
received  and is still owed.  During the second  quarter of 1998,  approximately
449,306  Series A Warrants were  exercised.  On September 30, 1998,  the Company
issued 217,444 shares to an individual in satisfaction of debt.



<PAGE>



In summary, as of the date of this report, there were 3,489,957 shares of Common
Stock  outstanding.  The  following  table  reconciles  the  discussion  in  the
foregoing paragraph:

Common Stock:

  845,567   Previously Issued Shares  December 31, 1996
  552,640   Directors                 February 17, 1997
  725,000   Bridge Loan Holders       February through December, 1997
  500,000   Officers and Directors    July 29, 1997
  200,000   Third-Party               March 31, 1998
  449,306   Series A Warrants         Second Quarter of 1998
  217,444   Debt Settlement           September 30, 1998

3,489,957

There were 1,777,640 shares of Common Stock issued during 1997; thus, there were
2,623,207  shares of Common Stock  outstanding at December 31, 1997.  There were
200,000  shares of Common Stock issued during the first  quarter of 1998;  thus,
there were 2,823,207 shares of Common Stock outstanding at March 31, 1998. There
were 449,306  shares of Common Stock issued  during the second  quarter of 1998;
thus, there were 3,272,513 shares of Common Stock  outstanding at June 30, 1998.
There were 217,444  shares of Common Stock  issued  during the third  quarter of
1998; thus, there were 3,489,957 shares of Common Stock outstanding at September
30,  1998.  In  December,  1998,  two holders of Series A  Preferred  Stock were
allowed to convert  their shares into Common  Stock since there were  sufficient
common shares so as to allow for conversion.  The Company is allowing holders of
Series A Preferred Stock who request  conversion in writing to convert to Common
Stock; however,  there is no assurance that the Company will be able to continue
to allow these  requests  since there is  insufficient  capitalization  so as to
allow  for the  conversion  of all  shares of  Series A  Preferred  Stock at the
present time.

Liquidating  Trust:  The  Company,  on  June  30,  1998,  announced  that it had
established a  liquidating  trust for the purpose of gathering all of the assets
of the  Company  on that date and then,  first,  providing  for the  payment  of
administrative and collection expenses,  secondly,  providing for the payment of
all  creditors  and,  finally,   distributing  the  remainder  to  shareholders.
Subsequent to the date of the  establishment of the liquidating  trust it became
apparent  that the Company  would not have  sufficient  funds to provide for the
administration costs and expenses and the satisfaction of creditors;  therefore,
the Company,  as the grantor of the trust,  elected not to fund its corpus,  the
practical effect of which is that the trust will be dissolved as if it had never
been created.

<PAGE>


Order Suspending Trading: The Securities and Exchange Commission (Commission) on
August 18, 1998,  issued an order  suspending  trading in the  securities of the
Company  claiming a lack of current  and  accurate  information  and  because of
questions regarding the accuracy and adequacy of information disseminated by and
about the Company.  The concerns related to, among other things:  (1) the assets
and  liabilities  of the Company;  (2) the identity and assets of the businesses
the  Company had  announced  plans to acquire;  (3) the current  operations  and
business  prospects of the  Company;  (4) the  composition  and  involvement  in
affairs of the  Company by  management;  (5) the  possible  misappropriation  of
assets by  officers of the  Company;  and (6) the failure of the Company to file
the  reports  required  under the  Securities  Exchange  Act of 1934.  The order
suspended trading from August 18, 1998, through August 31, 1998. The Company has
been informed by the National  Association of Securities  Dealers,  Inc. (NASD),
that,  before trading may resume in its securities,  an NASD member must sponsor
the Company for the purpose of publishing a quote. The Company,  therefore,  has
devoted its efforts  towards fully and accurately  addressing each issued raised
by the  Commission  in the issuance of the order  suspending  trading and is now
current in its reports.  At the date of this  report,  the Company is seeking an
NASD member to sponsor  its  securities  for  trading,  once  again,  on the OTC
Bulletin Board maintained by the NASD.

Pending Acquisition:  The Company,  during August, 1998, announced to the public
that it had reached an agreement in principal to acquire several  entities based
in Greece which are involved in shipping  and trading in the  Mediterranean  and
Black Sea regions. These entities are affiliated with Mr. Traios, the individual
discussed above in this item under Mega Hell and Mill Agro  Acquisitions.  Since
the  previous  recision  of these  acquisitions,  Mr.  Traios has  expanded  his
businesses and has obtained  additional equity funding.  Due to the cessation of
trading occasioned by the Commission, the pursuit of this acquisition was placed
in abeyance  until such time as the  Company  could  assure Mr.  Traios that the
filings by the Company with the Commission under the Securities  Exchange Act of
1934 were current and accurate. The Company is now current in its reports and is
again  pursuing  the  announced  acquisition,   although  definitive  terms  and
conditions have not been reached.  There can be no assurance the Company will be
successful in this endeavor.

Year 2000  Issues:  The Company has  evaluated  all  internal  software  against
anticipated Year 2000 concerns, and believes,  first, that its business will not
be substantially affected, and, secondly, that it has no significant exposure to
contingencies  related to this from past  business.  The Company has initiated a
project  to  upgrade  all  internal  software  and  to  conduct  testing  on its
information  technology to further  ensure that all aspects of its business will
be Year 2000 compliant.  The Company believes that these  procedures,  which are
expected to be completed by December 31, 1998,  will have no material  effect on
the  Company  or its  business  contacts  and  will  not  require  any  material
expenditures or other material diversion of resources.

<PAGE>


Facilities:  The executive offices of the Company, as of November 30, 1998, were
located at 1999 Broadway,  Ste. 3235, Denver, Colorado 80202. The space is being
provided  free of  charge  by  counsel  to the  Company.  There  is no  separate
telephone  number at this  address,  but calls are being  accepted  at (303) 292
2992.

Item 2.  Description of Properties.

The Company owns no real property.

Item 3.  Litigation.

Fisher Federal Court Litigation:  On July 9, 1998, the Company filed a complaint
(No. 98 D 1495) against Mr. Daniel W. Fisher, ArconEnergy, St. Andrews, Inc. (an
affiliate of Mr. Fisher's),  and Morgan Guaranty, Ltd. (another affiliate of Mr.
Fisher's), in the United States District Court for the District of Colorado. The
complaint alleges that the defendants defrauded the Company and violated federal
and state  securities  acts and state common law principles (1) in obtaining the
Arcon Purchase  Agreement and the issuance of the Series B Preferred Stock under
that  agreement,  (2) in issuing  180,000 shares of Series A Preferred Stock and
9,000,000  Series A Warrants to Mr. Fisher  indirectly  through his  affiliates,
those being St. Andrews, Inc, and Morgan Guaranty,  Ltd., and (3) in the sale of
42,004  shares of Series A Preferred  Stock in  exchange  for  approximate  cash
proceeds of $570,060 and the mis appropriation of those funds. As of the date of
this report, all of the defendants had been served, defaults taken and a default
judgment motion made against them.

The Company on August 21, 1998,  entered into an  agreement  with Mr.  Daniel W.
Fisher and two of his affiliates,  St. Andrews, Inc., and Morgan Guaranty, Ltd.,
whereby  Mr.  Fisher  returned  134,800  shares  of  Series A  Preferred  Stock,
9,000,000  Series  A  Warrants  and all of the  remaining  shares  of  Series  B
Preferred  Stock then  outstanding to the treasury of the Company.  In addition,
Mr. Fisher paid to the Company the sum of $614,164.98,  half of which was agreed
to be released to the  mediator  for  resolving  the  disagreements  between the
parties.  In  addition,  Mr.  Fisher  agreed to  surrender  to the  Company  all
securities  and money held in a  brokerage  account in the United  States and to
surrender  the  accounting  records of the  Company.  Subsequently,  the Company
learned that there were no  securities  or cash in the United  States  brokerage
account,  and Mr. Fisher  refused to return the  accounting  records;  thus, the
Company  declared  the  agreement  to be null and  void  and is  again  pursuing
judgments against Mr. Fisher and his affiliates.

<PAGE>


Matossian and Fidiparex S.A.: In December,  1995,  counsel for Robert  Matossian
and Fidiparex,  S.A., demanded the rescission of and subsequent  conversion into
Common Stock of promissory notes which the Company had executed and delivered in
favor of certain persons who were then  affiliated  with the Company,  including
Mr.  Pierce.  The complaint as filled  alleged,  among other  things,  breach of
fiduciary  duty to the  Company.  The suit was filed in San  Diego,  California,
Superior Court (Case No.  704105).  Counter-claims  were filed by the defendants
alleging breach of contract and fiduciary duty to the Company,  securities fraud
and other related claims.  The suit was settled during the first quarter of 1998
at no expense to the Company or Mr. Pierce.

Office Park Litigation: In March, 1997, the Company was sued by the owner of the
office park facility in which its Los Angeles operations were located.  The suit
claimed  that the  Company had  breached  the lease of the  premises  and sought
damages  for rent from the date of the  claimed  breach  through  the end of the
lease. The suit was ultimately  settled by the Company  relinquishing  the space
with no additional liability .

DayStar  Litigation:   On  May  14,  1998,  Business  Growth  Fund  of  Southern
California,  LP, and  Daystar  Partners,  Inc.,  sued the Company in Los Angeles
Superior Court (Case No.  BC191159)  alleging that the Company failed to deliver
to them Common  Stock and warrants  which they claim to have been  entitled as a
result of their agreements concerning certain bridge loans to the Company during
1996,  the proceeds of which were used,  in part,  to provide for the  secondary
offering made by the Company in August, 1996, and further claiming moneys due to
them in regards of their exercise of certain  bridge loan warrants  issued them.
The Company has not been served with the suit,  but has  responded  by letter to
the  plaintiffs  informing them that they have no basis for the suit and seeking
to find an  accommodation  so as to avoid the  incurrence of  unnecessary  legal
fees. If served, the Company intends to vigorously defend the suit.

Abraham & Christiansen, Inc. Judgement: On September 26, 1997, a former creditor
received a judgement in the state of Florida, which it domesticated in the state
of California, against the Company amounting to $55,506. In conjunction with the
judgement,  a lien from the state of California was placed on Company  property.
As of the date of the  judgement  and lien,  the Company held no property in the
State  of  California.  Management  believes  for the  judgement  and lien to be
effective,  they must first  litigate  the case in the state where the  services
claimed  were  performed,  which did not  occur.  If such an  action  were to be
commenced, the Company intends to vigorously defend the matter.
<PAGE>


StockstoWatch.Com Threat: The Company has been informed that it is currently the
defendant in a suit by  Stockstowatch.com,  Inc.,  filed in the Twelfth Judicial
Circuit Court in Sarasota County,  Florida (Case No. 98 5426 CA 01), although no
service  of  process  has  yet  been  effected.   Management  has  spoken  to  a
representative  of the  plaintiff,  Mr. Stephen King, and has been informed that
the plaintiff does not currently intend to pursue litigation.  The complaint, as
presented  to the  Company,  claims that  plaintiff  entered  into a  consulting
contract  with the Company  pursuant to which the  Company  inexplicably  issued
200,000 shares of Common Stock without receiving the agreed on cash therefor and
then somehow breached the contract by refusing to deliver an additional  400,000
shares of Common Stock and 10,000 shares of Series A Preferred  Stock.  There is
no record of there ever having  been a demand of the  Company for payment  under
the contract, nor is there any indication the plaintiff performed its end of the
bargain.  The Company had, prior to the initiation of the suit, demanded payment
for  the  200,000  shares  of  Common  Stock  given  to  the  plaintiff  without
consideration,  and had agreed to the surrender of approximately  160,000 of the
200,000  shares  issued  and the  payment of $20,000  cash;  however,  plaintiff
breached  this oral  agreement and elected to file the  complaint  instead.  The
Company  has  informed  counsel  to  plaintiff  that  Florida  has no basis  for
entertaining the matter and that the Company will vigorously  defend against the
claims made.  Subsequent to the initiation of the complaint,  Stockstowatch.com,
Inc.,  and Mr. King were named in a civil  securities  fraud suit brought by the
Securities and Exchange  Commission in Florida alleging that  Stockstowatch.com,
Inc.,  and Mr. King engaged in scalping in their  promotion of the securities of
several corporations, including those of the Company.

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

No  matters  were  submitted  to a vote of  security  holders  during the fourth
quarter of 1997.

                                     Part II

Item 5.   Market for Common Equity and Related Stockholder Matters.

Market:  The Common  Stock,  until August 18,  1998,  was traded on the Bulletin
Board maintained by the National Association of Securities Dealers, Inc. (NASD),
under the symbol MIDL. On that date, the U.S. Securities and Exchange Commission
suspended  trading in all  securities of the Company until August 31, 1998.  The
Company has been  informed by the NASD that trading on the  Bulletin  Board will
not  recommence  until such time as the Company is again  current in its reports
under applicable securities laws and resubmits the filed reports to the NASD for
review and comment.  The Company is now current in its reports under  applicable
securities  laws  and is  attempting  to  find an NASD  member  firm to  sponsor
resubmission and qualification of the securities of the Company with the NASD on
the Bulletin Board.
<PAGE>


The following table sets forth the range of high and low bid prices per share of
Common Stock, as reported by the NASD, for the periods indicated.

Year Ended December 31, 1996:
1st Quarter                    $1.00       $0.875
2nd Quarter                     2.375       1.00
3rd Quarter                     1.50        0.50
4th Quarter                     1.0625      0.125

Year Ended December 31, 1997:
1st Quarter                    $1.25       $0.25
2nd Quarter                     0.5625      0.3125
3rd Quarter                     0.75        0.125
4th Quarter                     0.71875     0.1875

Year Ended December 31, 1998
1st Quarter                     0.875       0.30
2nd Quarter                     2.46875     0.25

The above prices  represent  inter-dealer  quotations  without  retail  mark-up,
mark-down or commission,  and may not necessarily represent actual transactions.
On November 30, 1998, there were no quotations for the securities of the Company
due to the order of the Securities and Exchange  Commission  discussed above. As
of November 30,  1998,  there were  3,489,957  shares of Common Stock issued and
outstanding,  and  301,821  shares  of  Series  A  Preferred  Stock  issued  and
outstanding.  The  preferred  shares were then  convertible  into  approximately
12,782,120  shares of Common  Stock;  thus,  there  were,  for  purposes of this
filing,   approximate   common  share   equivalents  of  16,272,077  issued  and
outstanding on November 30, 1998.

Dividends:  Since  inception the Company has not paid any cash  dividends on the
Common Stock.  Any declaration in the future of any cash or stock dividends will
be at the discretion of the Board of Directors and will depend upon, among other
things,  earnings, the operating and financial condition of the Company, capital
expenditure  requirements,   and  general  business  conditions.  There  are  no
restrictions  currently  in effect  which  preclude  the Company  from  granting
dividends.  It is the current intention of the Company,  however,  to retain any
earnings in the foreseeable future to finance the development of its business.


<PAGE>



Series A Preferred Stock Dividend: The Company, on or about May 18, 1998, during
the tenure of Mr.  Daniel W. Fisher,  declared a stock  dividend on its Series A
Preferred  Stock.  The  dividend  announced  would have  resulted in the Company
issuing one  additional  share of Series A  Preferred  Stock for each two shares
outstanding on the date of declaration.  This would have resulted in their being
50% more shares of Series  Preferred Stock  outstanding  after the dividend than
are actually now outstanding.  The dividend has not been  distributed,  however,
due to the difficulties  which arose between the Company and its former transfer
agent,  Signature  Stock  Transfer.  The Company  has not  determined  what,  if
anything,  it will do to bring this  distribution  into effect.  All  statements
regarding share figures in this filing are to pre dividend shares.

Item 6. Management's  Discussion and Analysis of Financial Condition and Results
        of Operations.

The following discussion of financial condition and results of operations should
be read in conjunction with the Company's audited financial statements and notes
thereto appearing elsewhere in this report.

The Company has had recurring  losses from operations  since inception and had a
net capital  deficiency  at December 31, 1997,  each of which raise  substantial
doubts  about  the  ability  of the  Company  to  continue  as a going  concern.
Accordingly, the auditors' report and opinion included in this report contain an
explanatory paragraph about these uncertainties.

Results of Operations:  The Company,  as a result of the cessation of its coffee
business and the recision of two  separate  acquisitions  and the failure of its
other reported acquisitions,  had no operations during 1997; thus, no meaningful
comparison  can be made to prior years since the Company was then engaged in the
coffee business.

Liquidity and Capital  Resources:  The Company,  from inception and until August
14, 1996, the date on which a secondary offering of stock was concluded, had two
sources of working  capital for its operations  and  expansion,  those being the
cash flow generated from existing  operations and the extension of credit by its
coffee supplier. The Company,  during the final quarter of 1995 and until August
14,  1996,  relied on a series  of  bridge  loans to  provide  for the  expenses
incurred in conducting the secondary  public  offering.  The secondary  offering
closed on August 14, 1996,  and a substantial  portion of the proceeds  received
from the  offering  were used to repay the  bridge  loans  incurred.  During the
fourth  quarter of 1996,  the Company  negotiated a release of its contract with
Ralph's  and  subsequently  received  the  release  of  liabilities  aggregating
$707,234  from  creditors  following  the  cessation  of its coffee  business in
exchange for partial payments against the debt owed. The Company,  subsequent to
August 14, 1996, and through  December,  1997,  relied on the proceeds  received
from the  exercise of  outstanding  bridge loan  warrants  registered  under the
secondary offering to provide liquidity.  Since December,  1997, the Company has
principally relied on the cash proceeds resulting from the Fisher settlement and
the exercise of Series A Warrants to provide operating capital.  On November 19,
1998,  the  Company  made a loan  to an  unaffiliated  entity  of  approximately
$90,000.  The  advance was made on a short term basis at an above  market  rate,
with the Company  receiving  common shares of the entity as a loan fee. The loan
is presently a performing asset.

<PAGE>


Item 7.  Financial Statements.


                          INDEPENDENT AUDITOR'S REPORT



To the Board of Directors and Shareholders of
MIDLAND, INC. (Formerly America's Coffee Cup, Inc.):


We have  audited  the  accompanying  balance  sheet of Midland,  Inc.  (formerly
America's Coffee Cup, Inc.) (a Colorado corporation) as of December 31, 1997 and
the related statements of operations,  changes in shareholders' deficit and cash
flows for the years ended December 31, 1997 and 1996. These financial statements
are the  responsibility of the Company's  management.  Our  responsibility is to
express an opinion on these financial statements based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,  the  financial  position  of Midland,  Inc.  (formerly
America's  Coffee  Cup,  Inc.) as of  December  31,  1997 and the results of its
operations  and its cash flows for the years ended December 31, 1997 and 1996 in
conformity with generally accepted accounting principles.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in  Note L to the
financial statements,  the Company has suffered recurring losses from operations
and has a net capital  deficiency that raise substantial doubt about its ability
to continue as a going  concern.  The  financial  statements  do not include any
adjustments that might result from the outcome of this uncertainty.



San Diego, California
October 30, 1998

<PAGE>

                                  MIDLAND, INC.
                      (Formerly America's Coffee Cup, Inc.)
                                  BALANCE SHEET

                                                               DECEMBER 31, 1997
                                                               -----------------
                                     ASSETS
                                     ------
CURRENT ASSETS
    Cash
                                                                  $     7,984
             TOTAL CURRENT ASSETS
                                                                        7,984

             TOTAL ASSETS                                         $     7,984


                      LIABILITIES AND SHAREHOLDERS' DEFICIT
                      -------------------------------------

CURRENT LIABILITIES
    Accounts payable (Note B)                                     $   245,223
    Accounts payable related
          parties (Note C)                                            274,000
    Notes payable (Note D)                                             45,000
    Accrued interest                                                   21,991
    Accrued payroll taxes                                               8,510

       TOTAL CURRENT LIABILITIES                                      594,724

COMMITMENTS AND CONTINGENCIES
      (Note B, F, G, L, M)                                               --

SHAREHOLDERS' DEFICIT
 Series A preferred stock, $0.40 par value,
    360,000 shares authorized,
    124,617 issued and outstanding (Note G)                            49,847
  Series B preferred stock $0.40 par value,
    149,259 authorized, no shares issued
    or outstanding                                                       --
 Common stock, $0.40 par value,
    10,000,000 shares authorized, 2,623,207
     shares issued and outstanding (Note G)                           753,494
Additional paid-in-capital                                          1,125,504
Accumulated deficit                                                (2,515,585)

            TOTAL SHAREHOLDERS' DEFICIT                              (586,740)

TOTAL LIABILITIES AND SHAREHOLDERS' DEFICI                        $     7,984



   The accompanying notes are an integral part of these financial statements.

<PAGE>

                                  MIDLAND, INC.
                      (Formerly America's Coffee Cup, Inc.)
                            STATEMENTS OF OPERATIONS


                                                         For the years ended
                                                   December 31,     December 31,
                                                       1997             1996
                                                       ----             ----

REVENUES                                           $    13,422      $ 2,087,694

COST OF SALES                                            5,937        2,278,618

GROSS PROFIT (LOSS)                                      7,485         (190,924)

OPERATING EXPENSES
   General and administrative
        expenses                                       993,530          857,807
   Depreciation                                          3,550           56,000

TOTAL OPERATING EXPENSES                               997,080          913,807

LOSS FROM OPERATIONS                                  (989,595)      (1,104,731)

OTHER INCOME (EXPENSES)
  Interest expense                                      (4,057)         (78,691)
  Finance expense                                      (17,500)            --
  Loss on disposition of
     equipment (Note N)                                (17,681)        (305,818)
  Other                                                   --             17,533

TOTAL OTHER INCOME (EXPENSES) (39,238)                (366,976)

LOSS BEFORE INCOME TAXES
AND  EXTRAORDINARY ITEM                             (1,028,833)      (1,471,707)

Income Taxes (Note E)                                    1,600              800

NET LOSS BEFORE
  EXTRAORDINARY ITEM                                (1,030,433)      (1,472,507)
Extraordinary item,
   net of tax (Note K)                                 486,453          707,234

NET LOSS                                           $  (543,980)     $  (765,273)

NET LOSS PER COMMON SHARE
    BEFORE EXTRAORDINARY ITEM                      $     (0.50)     $     (1.76)

Extraordinary item                                         .24              .84

NET LOSS PER COMMON SHARE                          $     (0.26)     $      (.92)

WEIGHTED AVERAGE NUMBER OF SHARES
            OUTSTANDING                              2,073,820          838,313



   The accompanying notes are an integral part of these financial statements.


<PAGE>
<TABLE>
<CAPTION>

                                                         MIDLAND, INC.
                                             (Formerly America's Coffee Cup, Inc.)
                                        STATEMENTS OF CHANGES IN SHAREHOLDERS' DEFICIT


                                                                                           Additional                      Total
                                       Preferred Stock                 Common Stock          Paid-in     Accumulated   Shareholders
                                     Shares        Amount          Shares       Amount       Capital       Deficit        Deficit
                                     ------        ------          ------       ------       -------       -------        -------


<S>                                  <C>         <C>               <C>       <C>           <C>           <C>            <C>         
Balance, December 31, 1995                --     $      --         802,043   $   320,816   $   366,373   $(1,206,332)   $  (519,143)


Issuance of common stock
 for convertible debt (Note J)            --            --          43,524        17,410        61,340          --           78,750


Issuance of preferred stock as
 part of initial public offering        54,000        21,600          --            --         512,653          --          534,253


Net loss                                  --            --            --            --            --        (765,273)      (765,273)


Balance, December 31, 1996              54,000   $    21,600       845,567   $   338,226   $   940,366   $(1,971,605)   $  (671,413)



Issuance of stock for services          70,617        28,247     1,052,640       131,580       108,146          --          267,973


Issuance of stock for cash                --            --         725,000       283,688        76,992          --          360,680

Net loss                                  --            --            --            --            --        (543,980)      (543,980)


Balance, December 31, 1997             124,617   $    49,847     2,623,207   $   753,494   $ 1,125,504   $(2,515,585)   $  (586,740)



                            The accompanying notes are an integral part of these financial statements.
</TABLE>

<PAGE>

                                  MIDLAND, INC.
                      (Formerly America's Coffee Cup, Inc.)
                            STATEMENTS OF CASH FLOWS

                                                       For the years ended
                                                   December 31,     December 31,
                                                      1997              1996

CASH FLOWS FROM OPERATING ACTIVITIES

 Net loss                                           $(543,980)       $(765,273)
 Adjustments to reconcile
   net loss to net cash used
   in operating activities:
  Depreciation and amortization                         3,550           56,000
  Loss on disposition of equipment                     17,681          305,818
  Write off of intangibles                            172,698             --
  Issuance of stock
           for services (Note J)                      267,973             --
  Extraordinary item -
      extinguishment of
      debt (Note K)                                  (486,453)        (707,234)

 Changes in assets and liabilities:
  Accounts receivable                                  58,424           72,031
  Inventories                                           5,000          130,776
  Prepaid expense and other                            27,487          (11,491)
  Other assets                                           --            172,698
  Accounts payable                                    403,187          253,043
  Bank overdraft                                      (74,134)          74,134
  Accrued expenses                                   (208,693)          47,376

NET CASH USED IN
OPERATING ACTIVITIES                                 (357,260)        (372,122)

CASH FLOWS FROM INVESTING ACTIVITIES

 Purchase of property and equipment                    (7,781)            --
 Proceeds from disposal of
     property and equipment                            12,345          (76,553)

NET CASH PROVIDED BY (USED IN)
INVESTING ACTIVITIES                                    4,564          (76,553)

CASH FLOWS FROM FINANCING ACTIVITIES

 Proceeds from conversion of debt
      to common stock                                    --             78,750
 Proceeds from issuance of
      preferred stock                                    --            534,253
 Payments on long-term debt                              --           (197,055)
 Proceeds from issuance
      of common stock                                 360,680             --

NET CASH PROVIDED BY
FINANCING ACTIVITIES                                  360,680          415,948

NET INCREASE (DECREASE) IN CASH                         7,984          (32,727)

CASH, BEGINNING OF YEAR                                  --             32,727

CASH, END OF YEAR                                   $   7,984        $    --



   The accompanying notes are an integral part of these financial statements.

<PAGE>

                                  MIDLAND, INC.
                      (Formerly America's Coffee Cup, Inc.)
                          NOTES TO FINANCIAL STATEMENTS

A.  Organization and Summary of Significant Accounting Policies:

Organization:  The Company was incorporated as FOA Industries,  Inc. (FOA) under
the laws of the State of Delaware on February  10, 1988.  On June 19, 1989,  FOA
acquired  all of the assets and  liabilities  of A.C.C.,  a  California  limited
partnership  engaged in the retail gourmet coffee business.  In conjunction with
this transaction,  A.C.C. and its general partner, America's Coffee Cup, Inc. (a
California  corporation),  were  dissolved  and the Company  changed its name to
America's  Coffee Cup, Inc.  During November 1995, the Company changed its state
of  incorporation  from Delaware to Colorado.  On January 30, 1997,  the Company
changed its name to Wayward  Ventures,  Inc. On February 17,  1997,  the Company
changed its name from Wayward  Ventures,  Inc. to Midland,  Inc., in conjunction
with an acquisition which was subsequently  rescinded.  During 1997, the Company
ceased operating in the retail coffee business.

Estimates:  The preparation of financial statements in conformity with generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions  that  affect the  reported  amounts of assets and  liabilities  and
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements  and reported  amounts of revenues and expenses  during the reporting
periods. Actual results could differ from those estimates.

Cash:  For purposes of the statements of cash flows,  the Company  considers all
highly liquid debt instruments purchased with a maturity of three months or less
and money market funds to be cash equivalents.

Revenue  Recognition:  The Company  recognizes  revenue from product  sales upon
shipment to the service concessions located within the stores.

Loss Per Share:  Net loss per share is provided in accordance  with Statement of
Financial  Accounting Standards No. 128 (SFAS No. 128) Earnings Per Share. Basic
loss per share is computed by dividing losses  available to common  shareholders
by the weighted average number of common shares  outstanding  during the period.
Diluted loss per share  reflects per share  amounts that would have  resulted if
dilutive  common  stock  equivalents  had been  converted  to common  stock.  At
December 31, 1997 and 1996,  basic and dilutive loss per share are the same. The
net loss per share calculations  reflect the effect of stock dividends and stock
splits. As required by SFAS No. 128, prior year loss per share amounts have been
restated. Loss per share for the years ended December 31, 1996 did not change as
a result of this restatement.

Income Taxes: Income taxes provide for the tax effects of transactions  reported
in the  financial  statements  and consist of taxes  currently due plus deferred
taxes related  primarily to net operating  loss  carryforwards  and  differences
between the basis of various assets for financial and income tax reporting.  The
deferred tax assets and liabilities represent the future tax return consequences
of those differences, which will either be taxable or deductible when the assets
and liabilities are recovered or settled.

<PAGE>


Concentration of Credit Risk: The Company's sales are substantially all from one
large grocery retailer located in Southern California.

Fair Value of Financial  Instruments:  The carrying amount for cash approximates
the fair value due to the short period to maturity of the instruments.  The fair
value of notes  payable is  estimated  based on  interest  rates for the same or
similar  debt  offered  to the  Company  having  the same or  similar  remaining
maturities  and  collateral  requirements.  Carrying  amounts  of notes  payable
approximates fair value.

B.  Accounts  Payable:  At December 31, 1997,  the majority of accounts  payable
consist of balances due on settlement of previous accounts payable  balances.  A
majority  of the  agreements  were  entered  into in March  1997 and  called for
payment of 10% of the  previous  outstanding  balance in  consideration  for the
entire  balance.  Vendors may consider the  agreements  null and void due to the
Company's  failure  to pay  the  obligations,  and  therefore,  the  Company  is
contingently liable for $697,616 of previously forgiven accounts payable.

C. Accounts  Payable Related  Parties:  At December 31, 1997, the Company has an
accounts payable balance of $121,000 to Mark Pierce, President, Director and CEO
of the Company,  for legal services provided to the Company.  Additionally,  the
Company  has  accounts  payable at  December  31,  1997  totaling  $153,000  for
consulting services, to Charles Stidham, a former director,  which was paid with
common stock in 1998 (Note J).

D. Notes Payable:  The Company has notes payable to a group of foreign investors
totaling  $45,000 which are unsecured.  Interest is payable at 9% and all unpaid
principal and interest was due December 31, 1997. Notes are convertible in whole
or in part at any time on or before maturity for "restricted" common shares at a
conversion  rate of $9 per share.  In 1996, the Company  modified the conversion
price to $2 per share. The notes are past due.

E. Income Taxes: The provision for income taxes for the years ended December 31,
1997, and 1996 consisted solely of the $800 minimum California franchise tax.

<PAGE>


The Company's total deferred tax assets as of December 31 were as follows:

                                                     1997               1996
                                                     ----               ----

Net operating loss carryforward                  $ 1,319,000        $   850,000
Valuation allowance                               (1,319,000)          (850,000)

Net deferred tax assets                          $      --          $      --

A valuation allowance has been established for the entire amount of the deferred
tax  asset.  The  likelihood  of  full  utilization  by the  Company  of the net
operating losses incurred to date over the available  carryover period is highly
unlikely  based  upon the  change of  ownership  tax  rules  and on the  current
operations of the Company. The increase in the valuation allowance from December
31, 1996 to December 31, 1997 was $469,000.

The Companies net operating loss carryforwards expire as follows:

Year Ending
December 31,      Federal        California
------------      -------        ----------

1998               $    -          $ 102,400
1999                    -             34,100
2000                    -            361,500
2001                    -            573,700
2002                    -            544,000
2003               38,400                  -
2004              183,700                  -
2005              327,600                  -
2006              252,200                  -
2007              205,600                  -
2008               34,900                  -
2009              721,200                  -
2010            1,149,200                  -
2011              544,000                  -

Total          $3,456,800         $1,615,700

The  realization  of any future income tax benefits from the  utilization of net
operating  losses has been determined to be limited.  Federal and state tax laws
provide that when a more than 50% change in ownership of a company occurs within
a three year  period,  the net  operating  loss is  limited.  As a result of the
conversion of the one year convertible  notes into common stock, the Company has
determined that the net operating losses are limited.


<PAGE>



The net operating loss carryfowards  have been limited to approximately  $60,000
per year until  expiration.  Losses generated after the conversion date will not
be limited by any  change  that  resulted  from the  conversion  of the one year
convertible notes.

F. License Fees and Other Commitments:  Effective December 31, 1995, the Company
entered  into  a  four  year  license  agreement  with  Ralphs  Grocery  Company
("Ralphs"),  in which the Company was charged a $100,000 license renewal fee for
the right to use and occupy approximately 40 square feet at each of the licensed
locations for its retail service concessions and any future locations.

The Company  recorded its portion of the license fee at cost and  amortized  the
fee over four years.  Amortization  expense for the year ended December 31, 1996
was $87,500, which was included in cost of sales. Due to the cancellation of the
agreement, the balance of the fees were written off in 1997.

In addition to the renewal  fee, the Company paid rent to Ralphs an amount equal
to $1,000 for each four week period per location or 10% of total  retail  sales,
whichever is greater. The Company incurred rent expense of $0 and $757,412,  for
the years ended December 31, 1997 and 1996,  respectively.  The rental agreement
with Ralphs was canceled during 1997.

G.  Shareholders' Deficit:

Series A Preferred  Stock:  Of the  1,000,000  shares of  preferred  stock,  the
Company  designated  360,000 shares as Series A preferred  stock.  Each share of
Series A preferred stock will automatically  convert into 42.35 shares of common
stock on October 1, 1998.  Each share of Series A preferred stock is entitled to
thirty  five votes with the Series A  preferred  stock and common  stock  voting
together as though they constitute one class.

Series A Warrants : In connection with the secondary  offering  concluded August
16,  1996,  the Company  authorized  the  issuance of up to  5,205,650  Series A
Warrants  (including  405,000 Series A Warrants that may be issued upon exercise
of the Underwriters' over allotment option,  270,000 Warrants which are issuable
pursuant to the  Underwriters  Warrants and 652,050  Warrants  together  with an
equivalent  number of shares of common stock for issuance upon the conversion of
the Series A preferred stock) and has reserved an equivalent number of shares of
common  stock for  issuance  upon  exercise  of the Series A  warrants  actually
issued.  Each  warrant  will  entitle the holder to purchase one share of common
stock at a price of $.50 per share.  The warrants are currently  exercisable and
are separately traded until August 14, 2001, unless earlier redeemed. The Series
A warrants  are  redeemable  by the Company at $.05 per  warrant,  upon 30 days'
notice,  at any time after February 14, 1997, if the closing bid price per share
of the  common  stock for ten  consecutive  trading  days'  prior to the date of
notice of redemption  is given equals or exceeds  $2.50 per share.  In the event
the Company  gives notice of its  intention to redeem,  a holder would be forced
either  to  exercise  their  Series A warrant  within 30 days  after the date of
notice or accept the redemption price.

<PAGE>


The exercise  price of the Series A warrants may be reduced at any time and from
time to time at the discretion of the Board of Directions  when it appears to be
in the best interests of the Company to do so. Any such  reduction  would impair
the value to holders  exercising  their  warrants prior to the effective date of
the reduction.

The following is a summary of activity involving Series A Warrants:

Warrants outstanding at December 31, 1995                  --

Warrants issued                                       2,700,000
Warrants exercised                                         --

Warrants outstanding and December 31, 1996            2,700,000

Warrants issued to officers for services              2,080,850
Warrants exercised                                         --

Warrants outstanding at December 31, 1997             4,780,850


Series B Preferred Stock:

In connection with acquisitions, the Company issued 149,259, 70,000, and 140,493
shares  of Series B  preferred  stock.  The  shares  of  preferred  stock may be
immediately converted into 150 shares of common stock for each share of Series B
preferred stock at any time at the option of the Holder.  The  stockholders  are
entitled  to 150  votes  and are not  entitled  to  liquidation  preferences  or
dividends.  The  acquisitions  were rescinded and the stock was returned in 1997
and 1998, and  therefore,  no shares are reported as outstanding at December 31,
1997.

Incentive  Stock  Option  Plan:  During  1995,  the Company  adopted an employee
incentive  stock  option  (ISO) plan  authorizing  the  issuance of common stock
options for up to 500,000 shares of common stock over a 10 year period beginning
September 1, 1995. On July 31, 1997,  the Board of Directors  issued all options
available  under the plan.  During 1997, the options where  exercised and common
stock  was  issued at $.125 per share in  exchange  for  services.  Accordingly,
$62,500 is included in operating expenses for the year ended December 31, 1997.


<PAGE>



Bridge Loan Warrants:  In conjunction with certain bridge loans obtained for the
purpose of completing the public  offering in 1996, the Company issued  warrants
to purchase  1,809,955 units,  each unit consisting of one share of common stock
and two  warrants  at a price of $.39  per  unit.  During  1997,  warrants  were
exercised and 707,000 shares of common stock were issued at $.50 per share which
generated  capital of $353,500.  In accordance  with the issuances,  the Company
agreed to pay $.11 per share to the bridgeholders.  However, management contends
the  bridgeholders  did not meet their  obligations  under the  transaction  and
therefore, is not obligated to pay $.11 per share to the bridgeholders (Note M).

H. Supplemental  Cash Flow Information:  Cash paid for interest and income taxes
for the years ended December 31, 1997 and 1996:

                                 December 31,        December 31,
                                     1997               1996
                                     ----               ----

Interest                           $  --               $78,691
Income taxes                       $   800             $   800

I.  Termination  Agreement:  On August 23,  1995,  the Company  entered  into an
agreement (the Supply  Termination  Agreement)  with BGC. Under the terms of the
Supply Termination  Agreement,  the Company and BGC terminated the obligation of
the Company to purchase  its supply of coffee  exclusively  from BGC and further
agreed to the restructuring and repayment of certain debt with BGC. During 1997,
the  Company  and BGC  renegotiated  the debt to  $160,000  which is included in
accounts payable.

J. Related Party  Transactions:  On February 17, 1997, the Company issued 41,617
shares  of  Series A  preferred  stock,  totaling  $68,791,  1,830,500  Series A
warrants  and 552,640  shares of common stock  totaling  $69,080 to officers and
directors of the Company.  On July 31, 1997,  another  500,000  shares of common
stock were issued to officers and directors under the ISO totaling  $62,500.  On
August 29, 1997,  the Company  issued 29,000 shares of Series A preferred  stock
amounting  to $58,000 to a former  director in exchange  for his  services as an
officer and  director of the Company from  February 17, 1997 through  August 29,
1997. On February 6, 1998,  the Company issued another 90,000 shares of Series A
preferred  stock  amounting to $180,000 and 4,500,000  Series A warrants to this
former  officer and director in exchange for his services  rendered  from August
29,  1997,  through  January 22, 1998 (Note C).  During  1997,  the Company paid
consulting  fees  amounting to $19,500 to officers and directors of the Company.
Additionally,  the Company paid Mark Pierce 14,826 shares of common stock valued
at $24,508 and cash of $9,040 for legal services performed.  Common stock issued
in exchange  for  services  were valued at the market  price of the stock on the
date of issuance.


<PAGE>



K. Extraordinary Item: Under terms of certain settlement agreements entered into
with creditors, the Company,  through a negotiator,  has reduced its liabilities
and debt related to its coffee operations by $486,453 and $707,234 for the years
ended December 31, 1997 and 1996, respectively.

L. Going Concern: As shown in the accompanying financial statements, the Company
incurred  net  operating  losses of $543,980  and  $765,273  for the years ended
December  31, 1997 and 1996,  respectively.  As of December  31,  1997,  current
liabilities  exceed  current  assets by $586,740.  These  factors as well as the
uncertainty regarding the Company's ability to continue to raise capital through
the sale of equity  securities  creates  substantial  doubt about the  Company's
ability to continue as a going concern.

Subsequent to year end, the Company  received  working capital from two sources:
(1) the receipt of proceeds  from the sale of  securities  by Mr. Fisher and his
affiliates  (Note M), which was to have been in settlement of those claims which
the Company had against Mr. Fisher and his affiliates, each of whom subsequently
breached the  settlement  agreement;  and (2) the exercise of Series A Warrants.
The funds  received are not  sufficient to provide for the  satisfaction  of all
liabilities,  including contingent liabilities,  which are currently outstanding
or which are being asserted against the Company;  however,  management  believes
that the Company will be able to obtain full and complete  settlements  with its
creditors,  whether  contingent  or  otherwise,  and that,  subsequent  to these
settlements, it will have sufficient working capital reserves in which to pursue
its business  plan.  Further,  the Company  anticipates  that it will be able to
effectuate its business plan and make an acquisition which will allow it to move
forward as a going concern.  However,  there can be no assurance that any of the
foregoing will occur.

The ability of the Company to continue as a going concern is dependent  upon its
ability to obtain additional  working capital and obtain profitable  operations.
The financial  statements do not include any adjustments that might be necessary
should the Company be unable to continue as a going concern.

M.  Contingencies:

Fisher:  On July 9, 1998,  the Company filed a compliant (No. 98 D 1495) against
Mr.  Daniel W. Fisher,  Arcon  Energy,  St.  Andrews,  Inc. (an affiliate of Mr.
Fisher's), and Morgan Guaranty, Ltd. (another affiliate of Mr. Fisher's), in the
United States District Court for the District of Colorado. The compliant alleges
that the  defendants  defrauded  the  Company  and  violated  federal  and state
securities  acts and state  common law  principles  (I) in  obtaining  the Arcon
Purchase  Agreement and the issuance of the Series B preferred stock thereunder,
(ii) in issuing 180,000 shares of Series A preferred stock and 9,000,000  Series
A warrants to Mr.  Fisher  indirectly  through his  affiliates,  those being St.
Andrews, Inc. and Morgan Guaranty,  Ltd., and (iii) in the sale of 42,044 shares
of Series A  preferred  stock in  exchange  for  approximate  cash  proceeds  of
$570,060 and the misappropriation of those funds.

<PAGE>


On August 21, 1998,  the Company  entered into an agreement  with Mr.  Daniel W.
Fisher and two of his  affiliates,  St.  Andrews Inc. and Morgan  Guaranty  Ltd.
whereby  Mr.  Fisher  returned  134,800  shares  of  Series A  preferred  stock,
9,000,000  Series  A  warrants  and all of the  remaining  shares  of  Series  B
preferred stock then outstanding to the treasury of the Company. In addition, in
September,  1998 Mr. Fisher paid the Company the sum of $614,165,  half of which
was agreed to be  released  to the  mediator  for  resolving  the  disagreements
between the parties. In addition,  Mr. Fisher agreed to surrender to the Company
all securities  and money held in a brokage  account in the United States and to
surrender  the  accounting  records of the  Company.  Subsequently,  the Company
learned  that there were no  securities  or cash in the  United  States  brokage
account,  and Mr. Fisher  refused to return the  accounting  records;  thus, the
Company  declared  the  agreement  to be null and  void  and is  again  pursuing
judgements  against Mr. Fisher and his affiliates in the Federal  District Court
action discussed in the preceding paragraph.

Matossian and Fidiparex S.A.: In December 1995, counsel for Robert Matossian and
Fidiparex S.A. demanded recession of and subsequent conversion into common stock
of notes which the Company had entered  into with certain  affiliates,  alleging
among the claims, breach of fiduciary duty to the Company. The suit was filed in
San Diego,  California,  Superior Court (Case No.  704105).  Counter claims were
filed alleging breach of contract and fiduciary duty to the Company,  securities
fraud and other related claims. The suit was settled during the first quarter of
1998 at no expense to the Company.

Office Park Litigation:  In March 1997, the Company was sued by the owner of the
office park facility in which its Los Angeles operations were located.  The suit
claimed that the Company had breached the lease and sought damages for rent from
the date of the claimed breach,  December 1996,  through the end of the lease in
September 1998. The suit was ultimately settled by the Company relinquishing the
space with no additional liability.

DayStar  Litigation:   On  May  14,  1998,  Business  Growth  Fund  of  Southern
California,  L.P.  and DayStar  Partners,  Inc.  sued the Company in Los Angeles
Superior Court (Case No.  BC191159)  alleging that the Company failed to deliver
to them warrants  which they claim to have been entitled to as a result of their
agreements  concerning  certain  bridge loans to the Company  during  1996,  the
proceeds of which were used, in part, to provide for the secondary offering made
by the  Company in August  1996,  and  further  claiming  $77,770 due to them in
regards of their  exercise of certain  bridge loan  warrants  issued  them.  The
Company is seeking to find an accommodation. The Company believes it is unlikely
it will pay the amount  claimed.  If served,  the Company  intends to vigorously
defend the suit.

<PAGE>


Abraham & Christiansen, Inc. Judgement: On September 26, 1997, a former creditor
received a judgement in the state of California against the Company amounting to
$55,506. In conjunction with the judgement,  a lien from the State of California
was placed on Company  property.  As of the date of the judgement and lien,  the
Company held no property in the State of California. Management believes for the
judgement  and lien to be  effective,  they  must  take  place in the  state the
company operates.  Further, if such actions occur in the state it operates,  the
Company intends to vigorously  defend its position.  At December 31, 1997, there
were no liabilities recorded as a result of the judgement.

N. Disposal of  Equipment:  During the fourth  quarter of 1996,  the Company had
removed  its  store  equipment  and  fixtures  from all  locations  and began to
liquidate  its coffee  operations.  Accordingly,  the Company had  scrapped  the
majority of its fixed assets and applied them to satisfy approximately  $170,000
of accounts  payable to product  suppliers.  During  1997,  the Company  sold or
disposed  all of the  remaining  fixed  assets.  As a result,  the  Company  has
recorded  losses from disposal of property and equipment of $17,681 and $305,818
at December 31, 1997 and 1996, respectively.

O. Loss Per Share:  The following  reconciles  amounts reported in the financial
statements for the years ended December 31, 1997 and 1996, respectively:

                                                           1997
                                          --------------------------------------
                                          Income (loss)      Shares    Per share
                                           (Numerator)    (Denominator)  Amount
                                           -----------    -------------  ------

Income (loss) from
   continuous operations                   $(1,030,433)          --     $   --
Less preferred stock dividends                    --             --         --

Income (loss) from
  available to common share-
  holders                                   (1,030,433)     2,073,820   $  (.50)

Extraordinary item                             486,453           --         .24

Income (loss) available to common share-
holders - basic earnings per share         $  (543,980)     2,073,820   $  (.26)


<PAGE>

                                         Income (loss)      Shares    Per share
                                          (Numerator)    (Denominator)  Amount
                                          -----------    -------------  ------

Income (loss) from
  continuous operations                   $(1,472,507)          --     $   --
Less preferred stock dividends                   --             --         --

Income (loss) from available
  to common share holders
  basic earnings per share                 (1,472,507)       838,313   $  (1.76)

Extraordinary item                            707,234           --          .84

Income (loss) available to common share-
holders - diluted earnings per share      $  (765,273)       838,313   $   (.92)

During 1997 and 1996,  the Company had warrants and stock  options  outstanding,
each  convertible  into common  stock.  In addition,  during 1997 and 1996,  the
Company  had  convertible  preferred  stock  outstanding  (Note G),  each  share
convertible  into  common  stock.  These  instruments  were not  included in the
computation of diluted earnings per share for any of the years presented, due to
their anti dilutive  effects  based on the net loss  reported each year.  During
1998, 865,750 shares of common stock has been issued.

Item  8.  Changes  in and  Disagreements  with  Accountants  on  Accounting  and
          Financial Disclosure.

None.


                                    PART III

Item 9.  Directors and Executive Officers of the Registrant.

The Company has had several  changes in its  directors  and  executive  officers
during  the  period  at issue  and to the date of this  report.  Following  is a
synopsis of the directors and executive  officers of the Company during the time
periods indicated:

<PAGE>


October 1, 1996, through December 10, 1996:

Robert W. Marsik,     Chairman of the Board, 
                      CEO, President, CFO, Treasurer
Roger F. Tompkins     Director
Mark S. Pierce        Director

December 11, 1996, through February 17, 1997:

Robert W. Marsik      Chairman of the Board, 
                      CEO, President, CFO, Treasurer
Mark S. Pierce        Director

February 18, 1997, through May 13, 1997:

Chris Traios          Chairman of the Board of Directors, CEO, President
Robert W. Marsik      Director, CFO, Treasurer and Vice-President
E. Robert Barbee      Director, Vice-President
Charles Stidham       Director, Managing Director of North American
                      Shipping and Trading
Arthur Malcolm        Director
Mark Pierce           Director

May 14, 1997, through August 29, 1997:

Chris Traios          Chairman of the Board of Directors, CEO, President
Robert W. Marsik      Director, CFO, Treasurer and Vice-President
E. Robert Barbee      Director, Vice-President
Charles Stidham       Director, Managing Director of North American
                      Shipping and Trading
Arthur Malcolm        Director

August 30, 1997, through October 10, 1997:

Robert W. Marsik      Chairman of the Board, CEO, President, CFO, CAO
                      and Treasurer
E. Robert Barbee      Director, Vice-President
Arthur Malcolm        Director
Charles Stidham       Director, Managing Director of North American
                      Shipping and Trading Operations

October 11, 1997, through December 18, 1997

R. Wayne Duke         Chairman of the Board, CEO, President, beginning
                      October 10, 1997
Robert W. Marsik      Director, Executive Vice-President
E. Robert Barbee      Director, Vice-President
Arthur Malcolm        Director

<PAGE>


December 19, 1997, through January 21, 1998

R. Wayne Duke         Chairman of the Board, CEO, President
E. Robert Barbee      Director, Vice-President
Arthur Malcolm        Director
Anne DeuPree          Secretary

January 22, 1998, through June 5, 1998

Daniel W. Fisher           Chairman of the Board, CEO
Edward Fisher              Director
John H. Spriggs            Director, President, COO and CFO
Willard G. McAndrew, III   Sr. Vice-President/Investments
James R. Clark             Director
R. Wayne Duke              Director

June 6, 1998, through June 15, 1998:

John H. Spriggs            Chairman, CEO, President, Treasurer
James R. Clark             Director
R. Wayne Duke              Director

June 16, 1998, through July 16, 1998:

Mark S. Pierce             Director, CEO, President, CFO and Treasurer
R. Wayne Duke              Director

July 17, 1998, through November 30, 1998:

Mark S. Pierce             Director, CEO, President, CFO and Treasurer

The  Company  has been  informed  that Mr.  Stephen  King  unilaterally  made an
announcement  to the public that he had become a director  during 1997. This was
not true, as the acquisition  proposed by Mr. King did not close and, therefore,
he was never appointed bo the Board of Directors.

Table of Directors and Executive Officers:

The following table sets forth all current  directors and executive  officers of
the Company, as well as their ages, as of the date of the filing of this report:

     Name            Age        Position
     ----            ---        --------

Mark S. Pierce        41        Director, President, CEO, CFO and Treasurer

Profiles of Directors and Executive Officers:

Mr. Pierce was a director of the Company from October,  1994,  until May,  1997,
and again from June 15, 1998, to the date of this report.  He was Secretary from
October, 1994, until December, 1997, and again from January 22, 1998, until June
15, 1998.  Mr. Pierce became the sole  executive  officer of the Company on June
15, 1998, and  maintained  that capacity  through the date of this report.  From
September  1, 1993,  until April 7, 1995,  Mr.  Pierce was the  President  and a
director of a small,  privately-held  merchant  banking firm with six employees,
including  himself.  Prior to September 1, 1993,  Mr.  Pierce was engaged in the
private  practice of law in Denver,  Colorado.  Mr.  Pierce  graduated  from the
University  of Wyoming in Laramie,  Wyoming,  in May,  1979,  with a Bachelor of
Science  degree in  Accounting  with  Honors.  He passed  his  examination  as a
Certified  Public  Accountant  in May,  1979, in his first  sitting.  Mr. Pierce
received  his Juris  Doctorate  from the  University  of  Colorado  in  Boulder,
Colorado,  during  May of 1983.  He is a member of the  American,  Colorado  and
Denver County Bar Associations.

<PAGE>


Mr.  Pierce,  in  December,  1997,  was named in a civil suit  initiated  by the
Securities  and  Exchange  Commission  in the  Federal  District  Court  for the
Southern  District of New York. (The original case number in New York,  prior to
severance and removal to Colorado,  was 97 Civ.  9303.) The suit claims that Mr.
Pierce, along with Mr. Marsik and several others,  engaged in fraudulent conduct
regarding the market for the Common Stock during the period beginning September,
1995, and ending in August, 1996. Messrs.  Pierce and Marsik vehemently deny the
claims , having been advised by several  parties  that the claims are  frivolous
and groundless;  further, they have obtained the severance of the claims against
them from the  remainder of the claims  contained in the original  complaint and
the  removal of their case to the  Federal  District  Court for the  District of
Colorado.  (The case number in Colorado is 98 S 1295.) The parties are currently
in the process of negotiating a case  management  order and have yet to initiate
discovery. The Company was not named in this suit.

No current  director has any  arrangement or  understanding  whereby they are or
will be selected as a director or as an executive  officer.  All directors  will
hold  office  until the next  annual  meeting of  shareholders  and until  their
successors  have been duly elected and qualified,  unless and until they earlier
resign or are removed from  office.  The  executive  officers of the Company are
elected by the Board of Directors at its annual  meeting  immediately  following
the shareholders'  annual meeting. The Company does not have any standing audit,
nominating  or  compensation  committee,  or any  committee  performing  similar
functions.

Item 10.  Executive Compensation.

The following table sets forth  information  concerning the compensation paid to
all executive officers during 1997 and 1996.

<PAGE>

                           Summary Compensation Table
                               Annual Compensation

Name                Principal Position (1)  Year      Salary        Bonus
----                ----------------------  ----      ------        -----

Robert W. Marsik    President CEO,CFO       1997     $      0     $44,284(2)
                                            1996      100,000           0


(1)  Mr. Pierce was not an executive  officer  during the period covered by this
     report; consequently,  he received no compensation from the Company in this
     regards.  (2)  On  termination  of his  employment  agreement,  Mr.  Marsik
     received 26,791 shares of Series A Preferred  Stock and 1,217,800  Series A
     Warrants.  The figure in this table is the market value of these securities
     as determined by the independent  members of the Board of Directors on that
     date.


Employment Agreements:  Mr. Robert W. Marsik entered into an employment contract
with the  Company  on  September  1,  1995,  which had a five  year term  ending
September 1, 2000. Pursuant to this agreement, Mr. Marsik received a base salary
of  $100,000  per year,  $500 per  month as a car  allowance,  health  insurance
benefits and vacation benefits. The contract was mutually terminated without any
further obligation of the Company on February 17, 1997.

Item 11.  Security Ownership of Management and Certain Others.

The following  table sets forth  certain  information  regarding the  beneficial
ownership as of November 30, 1998,  of the Common Stock by (1) each person known
by the  Company  to be the  beneficial  owner of more than five  percent  of the
Common Stock,  (2) each director and executive  officer of the Company,  and (3)
all directors and executive officers as a group. Except as otherwise  indicated,
each  stockholder  identified in the table  possesses sole voting and investment
power with respect to its or his shares.

     Name of                 Number of Shares                 Percentage of
Beneficial Owner            Beneficially Owned                Ownership (1)
----------------            ------------------                -------------

Mark S. Pierce        3,400 - Series A Preferred (2)(3)
Route 107T
Story, WY 82842

All executive officers and directors as a group (one person)(3)

1.   These shares and percentages  are based upon the assumed  conversion of all
     outstanding shares of Series A Preferred Stock, on November 30, 1998, which
     would have resulted in there having been 16,270,077  shares of Common Stock
     outstanding on that date.

2.   These shares are convertible into 143,990 shares of Common Stock.

3.   Less than one percent.

<PAGE>


Item 12.  Certain Transactions.

The Company,  on February 17, 1997,  issued  26,791 shares of Series A Preferred
Stock and  1,217,800  Series A Warrants  (valued at  $44,284,  the market  price
therefor) to Mr. Marsik in  recognition  of (1) his serving the Company  without
payment in full for these  services  and (2) his  services  in  wrapping  up the
former operations of the Company, which involved more time and effort than could
have been reasonably asked of him. The foregoing was approved by the independent
members of the board.  Further on February 17, 1997,  the Company  issued 14,826
shares of Series A Preferred Stock and 612,700 Series A Warrants  (valued in the
aggregate at $24,508,  the market price  therefor) and 397,360  shares of Common
Stock (valued at $47,205,  the market price  therefor) to Mr. Pierce in exchange
for the forgiveness of overdue  attorneys fees and costs.  These share issuances
were approved by the independent  members of the board.  Finally on February 17,
1997, the Company issued 175,000 shares of Common Stock (valued at $21,875,  the
market price  therefor) to Mr. Roger F. Tompkins in exchange for his services as
a director prior to his resignation in December, 1996.

On July 31, 1997, after his resignation from the Board of Directors and from all
positions as an executive  officer,  the board granted Mr. Pierce 100,000 shares
of Common Stock under the ISOP, and granted to themselves the remaining  400,000
shares of Common Stock available under the plan.

The Company,  on August 29,  1997,  issued  29,000  shares of Series A Preferred
Stock (valued at $58,000,  the market price  therefor) to Mr. Charles Stidham in
exchange for his services as an officer and director of the Company. On February
6, 1998, the Company  issued  another 90,000 shares of Series A Preferred  Stock
and 4,500,000 Series A Warrants (valued in the aggregate at $180,000, the market
price  therefor) to Mr. Stidham in exchange for his services to the Company from
August 29, 1997, to January 22, 1998.

The Company  believes  that the  foregoing  transactions  with its  officers and
directors  were on terms no less  favorable  than could have been  obtained from
independent third parties. All future transactions, including all loans, between
the Company and its officers, directors and principal shareholders or affiliates
or any of them,  will also be on terms no less  favorable than could be obtained
from  independent  third  parties  and will be  approved  by a  majority  of the
independent, disinterested directors.

<PAGE>


Item 13.  Exhibits and Reports on Form 8-K.

None.

                                   SIGNATURES

In accordance with the requirements of the Section 13 or 15(d) of the Securities
Exchange Act of 1934, registrant has duly caused this report to be signed on its
behalf by the  undersigned,  thereunto duly  authorized,  in the City of Denver,
State of Colorado on the 14th day of December, 1998.

           MIDLAND, INC.
-----------------------------------
           (Registrant)


By:/s/ Mark S. Pierce
   --------------------------------
   Mark S. Pierce, Chief Executive,
   Financial and Accounting Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following person on behalf of the registrant in the
capacity on this 14th day of December, 1998.


By: /s/ Mark S. Pierce
   --------------------------------
   Mark S. Pierce, Director