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, 1998  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                              (I.R.S. employer 
of incorporation or organization)                         identification number)

1073 4th Street, No. 3, Stone Mountain, Georgia                  30083
-----------------------------------------------                  -----
   (Address of principal executive offices)                    (Zip Code)

P.O. Box 2469, Stone Mountain, Georgia                         30086 2469
          (Mailing address)                                    (Zip Code)
          -----------------                                    ----------

Registrant's telephone number: (770) 413 8734
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. [ ]

<PAGE>



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
March 31, 1999, there were outstanding: (i) 3,696,807 shares of common stock and
(ii) 295,911 shares of Series A Preferred Stock  convertible into  approximately
12,531,831 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,  16,228,638 common share equivalents outstanding, of which affiliates
held none,  leaving no 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 March 31, 1999.

Indicate the number of shares outstanding of each of the registrant's classes of
common stock,  as of the latest  practicable  date: As of March 31, 1999,  there
were 3,696,807  shares of common stock  outstanding and 16,228,638  common share
equivalents.

                       DOCUMENTS INCORPORATED BY REFERENCE

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

Item 1.  Description of Business.

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).

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 the Company will continue to
be able to do so. 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.



<PAGE>


The  Company,  on or about May 18,  1998,  during  the  tenure of Mr.  Daniel W.
Fisher,  discussed in more detail below, 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  determined  not to pay the
dividend.  All statements  regarding  Series A Preferred  Stock share figures in
this filing are to pre dividend shares.

The Series A Warrants  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 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.

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.

The Company issued to the New Departures  Shareholders 70,000 shares of Series B
Preferred Stock in exchange for the outstanding shares of New Departures. Mr. R.
Wayne Duke then joined  Messrs.  Robert W. Marsik,  E. Robert  Barbee and Arthur
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. Mark S. 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 the  entity  up to and
including September 30, 1997, all as required by applicable securities laws. Mr.
Marsik  subsequently  resigned  all  positions  with the Company on December 18,
1997.



<PAGE>



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 to the  Company's  treasury 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.

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 in exchange for all  outstanding  ArconEnergy
shares. The Board of Directors was then 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.  John H.  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
ArconEnergy of approximately $41,000,000 (U.S.).

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.

<PAGE>


The recision was based, in significant  part, 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;  and (6)  misrepresentations of
ArconEnergy  and Mr.  Daniel W.  Fisher  as to the  outstanding  liabilities  of
ArconEnergy. 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  subsequently  resigned all
positions with the Company on July 16, 1998.

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 alleged
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. All of the defendants were served with


<PAGE>


the complaint, and defaults were obtained. The Company then made application for
a final judgment against all defendants;  however, the hearing on the matter was
twice  postponed  unilaterally  by  the  court  from  September,   1998,  until,
ultimately,  January,  1999,  by which time Mr.  Fisher and his  affiliates  had
removed themselves and all recognizable assets to the Bahamas.  The Company then
unilaterally  withdrew without prejudice its motion for judgment, as well as the
complaint  itself,  against Mr. Fisher and his affiliates since no judgment by a
U.S. court is enforceable in the Bahamas.

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 again began pursuing  judgments  against Mr. Fisher and his affiliates.
These efforts were subsequently abandoned.

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  acquisition  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.

Series A and B Preferred  Stock  Reconciliations:  There were 124,617  shares of
Series A  Preferred  Stock  outstanding  at  December  31, 1997 and no shares of
Series B Preferred Stock  outstanding.  At December 31, 1998, and as of the date
of this  report,  there were 295,911  shares of Series A Preferred  Stock and no
shares of Series B Preferred Stock outstanding.

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



<PAGE>


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.  The Company had  allowed,  as of February 2, 1999,  the
conversion  of 5,910 shares of Series A Preferred  Stock into 206,850  shares of
Common Stock pursuant to the mandatory conversion provisions of the series.

In summary,  as of December  31, 1998,  and the date of this report,  there were
295,911  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:

124,617    Outstanding               December 31, 1997
 90,000    Officer and Director      February 6, 1998
 42,004    Private Offering          February through April, 1998
 45,200    Daniel W. Fisher          May, 1998
 (5,910)   Converted Shares          November 1998 through December 31, 1999
295,911

Series B:

0          Outstanding               December 31, 1997
140,493    ArconEnergy Acquisition   January 22, 1998
(140,493)  ArconEnergy Recission     June 15, 1998
0

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
December  31,  1997,  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



<PAGE>


shares  were  issued  during  the third  quarter  of 1998;  thus,  the number of
outstanding  shares at that date  remained  301,821 in number.  During the final
quarter of 1998,  5,910 shares of Series A Preferred  Stock were  converted into
206,850  shares of Common  Stock;  thus,  there were 295,911  shares of Series A
Preferred  Stock  outstanding  at  December  31,  1998,  and at the date of this
report.

Common  Stock  Reconciliation:  There  were  2,623,207  shares of  Common  Stock
outstanding  at December 31,  1997.  At February 2, 1999,  there were  3,696,807
shares  outstanding.  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,  although the amount was written
off in 1998 for  financial  accounting  purposes.  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.  During the final  quarter of 1998,  206,850  shares of Common  Stock were
issued on conversion of Series A Preferred Stock.

In summary,  as of December 31, 1998,  and as of the date of this report,  there
were  3,696,807  shares  of  Common  Stock  outstanding.   The  following  table
reconciles the discussion in the foregoing paragraph:

Common Stock:

2,623,207   Outstanding             December 31, 1997
  200,000   Third Party             March 31, 1998
  449,306   Series A Warrants       Second Quarter of 1998
  217,444   Debt Settlement         September 30, 1998
  206,850   Preferred Conversion    October 1 1998
                                     through December 31, 1998
3,696,807

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,  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



<PAGE>


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.  During the final quarter of 1998,  206,850 shares of Common Stock
were issued in this regards;  thus,  there were 3,696,807 shares of Common Stock
outstanding at December 31, 1998. No further shares were issued through the date
of this  report;  thus,  the  foregoing  number  remains  the  number  of shares
outstanding at the date of this report.

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  was  dissolved  as if it had never
been created.

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.  These issues
raised by the Commission in its order were  previously  addressed by the Company
in filings with the Commission  under the  Securities  Exchange Act of 1934, and
the  Company 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.


<PAGE>



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. 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 the acquisition target that the filings by the Company with
the  Commission  under the  Securities  Exchange  Act of 1934 were  current  and
accurate  and  could  again  obtain a  listing  of the  Common  Stock on the OTC
Bulletin  Board.  The Company is now current in its reports and is pursuing  the
Bulletin Board listing.  After these  objectives are  accomplished,  the Company
will again pursue this acquisition;  however, there can be no assurance that the
acquisition  candidate is still  interested  in the  prospects of the Company or
that the Company will be otherwise 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 upgraded all
internal software and conducted testing on its information technology to further
ensure  that  all  aspects  of its  business  are  Year  2000  compliant.  These
procedures  had no material  effect on the Company or its business  contacts and
did not  require  any  material  expenditures  or other  material  diversion  of
resources.

Facilities: The executive offices of the Company, as of the date of this report,
were located at 1073 4th Street, No. 3, Stone Mountain,  Georgia 30083. There is
no separate  telephone  number at this address,  but calls are being accepted at
(770) 413 8734.

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 federal  United  States  District  Court for the  District of
Colorado.  The complaint  alleged 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



<PAGE>


his affiliates,  those being St. Andrews, Inc, and Morgan Guaranty, Ltd., (3) in
the  sale of  42,004  shares  of  Series  A  Preferred  Stock  in  exchange  for
approximate  cash  proceeds of $570,060  and (4) the  misappropriation  of those
funds.

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 again pursued  judgments
against Mr. Fisher and his  affiliates;  however,  a hearing on the matter which
was required by the court was twice  unilaterally  postponed  by the court,  and
during  this time Mr.  Fisher  took what  remaining  assets he had in the United
States  of  which   management  was  aware  to  the  Bahamas  The  Company  then
unilaterally  withdrew without prejudice its motion for judgment, as well as the
complaint  itself,  against Mr. Fisher and his affiliates since no judgment by a
U.S. court is enforceable in the Bahamas.

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.

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



<PAGE>


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.

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 1998.

                                     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 under the symbol MIDL. On that date the  Commission  suspended  trading in
all  securities of the Company until August 31, 1998. The Company was previously
informed by the NASD that  trading on the  Bulletin  Board could not  recommence
until such time as the Company  became  current in its reports under  applicable
securities  laws and  resubmitted  filed  reports  to the NASD  for  review  and
comment.  The Company became current in its reports under applicable  securities
laws earlier this year and resubmitted  these reports to the NASD for review and
comment.  The NASD has completed the review and comment process, and the Company
now  anticipates  that the Common Stock will be cleared for trading  through the
Bulletin  Board on or about March 22, 1999.  No other  securities of the Company
were submitted to the NASD for trading.

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

<PAGE>


The above prices  represent  inter-dealer  quotations  without  retail  mark-up,
mark-down or commission,  and may not necessarily represent actual transactions.
On March 31, 1999,  there were no quotations  for the  securities of the Company
due to the order of the Securities and Exchange  Commission  discussed above. As
of March 31,  1999,  there  were  3,696,807  shares of Common  Stock  issued and
outstanding,  and  295,911  shares  of  Series  A  Preferred  Stock  issued  and
outstanding.  The  preferred  shares were then  convertible  into  approximately
12,531,831  shares of Common  Stock;  thus,  there  were,  for  purposes of this
filing,   approximate   common  share   equivalents  of  16,228,638  issued  and
outstanding on March 31, 1999.

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.

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 was not distributed,  however, due to
the difficulties  which arose between the Company and its former transfer agent,
Signature  Stock  Transfer.  The  Company  has  determined  not  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, 1998,  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.


<PAGE>


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 1998; thus, no meaningful
comparison can be made to prior years.

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.

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, 1998 and
the related statements of operations,  changes in shareholders' deficit and cash
flows for the years ended December 31, 1998 and 1997. 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,  1998 and the results of its
operations,  changes in  shareholders'  deficit and its cash flows for the years
ended  December  31,  1998  and  1997  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 M 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
March 20, 1999

<PAGE>


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

                                  BALANCE SHEET
                                DECEMBER 31, 1998

ASSETS

CURRENT ASSETS
  Cash                                                              $        43
  Restricted cash-escrow (Note B)                                        37,381
  Note receivable (Note D)                                               90,000

TOTAL CURRENT ASSETS                                                    127,424

INVESTMENT (Note C)                                                      23,125

 TOTAL ASSETS                                                       $   150,549

 LIABILITIES AND
    SHAREHOLDERS' DEFICIT

CURRENT LIABILITIES
  Accounts payable (Notes E and J)                                  $   209,116
  Notes payable (Note F)                                                 45,000
  Accrued interest                                                       26,041
  Accrued payroll taxes                                                   8,510
  Accrued income tax                                                        800

TOTAL CURRENT LIABILITIES                                               289,467

COMMITMENTS AND CONTINGENCIES
    (Notes E, H, J, M, N)

SHAREHOLDERS' DEFICIT
  Series A preferred stock,
    $0.40 par value,
     360,000 shares authorized,
     295,911 issued and outstanding
     (Note H)                                                           118,365
  Series B preferred stock,
     $0.40 par value,
     149,259 shares authorized,
    no shares issued or outstanding                                        --
                                                                    
  Common stock, $0.40 par value,
    10,000,000 shares authorized,
     3,696,807 shares issued
         and outstanding                                              1,106,928
  Additional paid in capital                                          1,789,134
       Accumulated deficit                                           (3,153,345)

TOTAL SHAREHOLDERS' DEFICIT                                            (138,918)

TOTAL LIABILITIES AND
   SHAREHOLDERS' DEFICIT                                            $   150,549


   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,
                                                      1998              1997
                                                      ----              ----

REVENUES                                           $      --        $    13,422

COST OF SALES                                             --              5,937

GROSS PROFIT                                              --              7,485

OPERATING EXPENSES
  General and
   administrative
   expenses                                            374,669          993,530
  Depreciation                                            --              3,550
TOTAL OPERATING EXPENSES                               374,669          997,080

LOSS FROM OPERATIONS                                  (374,669)        (989,595)

OTHER INCOME (EXPENSES)
  Interest expense                                      (4,050)          (4,057)
  Finance expense                                         --            (17,500)
  Loss on disposition
     of equipment                                         --            (17,681)
  Loss on investment (Note N)                         (258,241)            --

TOTAL OTHER INCOME (EXPENSES)                         (262,291)         (39,238)

LOSS BEFORE INCOME TAXES AND
   EXTRAORDINARY ITEM                                 (636,960)      (1,028,833)

Income Taxes (Note G)                                      800            1,600

NET LOSS BEFORE
  EXTRAORDINARY ITEM                                  (637,760)      (1,030,433)

Extraordinary item,
    net of tax (Note                                      --            486,453

NET LOSS                                              (637,760)     $  (543,980)

NET LOSS PER COMMON
   SHARE BEFORE
   EXTRAORDINARY ITEM                              $      (.20)     $     (0.50)

 Extraordinary item                                       --                .24

NET LOSS PER COMMON SHARE                          $      (.20)     $     (0.26)

WEIGHTED AVERAGE NUMBER
   OF SHARES  OUTSTANDING                            3,231,154        2,073,820


   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, 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      2,623,200   $   753,494   $ 1,125,504    $(2,515,585)   $ (586,740)

Issuance of stock for cash            87,204         34,882        449,306       179,822       580,006           --         794,710

Conversion of Series A                (5,910)        (2,364)       206,850        82,740       (80,376)          --            --

Issuance of stock for services        90,000         36,000        417,444        90,872       164,000           --         290,872

Net loss                                --             --             --            --            --         (637,760)     (637,760)

Balance, December 31, 1998           295,911    $   118,365      3,696,807   $ 1,106,928   $ 1,789,134    $(3,153,345)   $ (138,918)



   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,
                                                       1998             1997
                                                       ----             ----

CASH FLOWS FROM OPERATING ACTIVITIES

Net loss                                             (637,760)       $(543,980)
Adjustments to reconcile
    net loss to net
    cash used in
    operating activities:

Depreciation and amortization                            --              3,550
Loss on investment                                    258,241             --
Loss on disposition of equipment                         --             17,681
Write off of intangibles                                 --            172,698
Issuance of stock for
      services (Note K)                               290,872          267,973
Extraordinary item -
 extinguishment of debt (Note L)                         --           (486,453)

Changes in assets and liabilities:
  (Increase) Decrease in:
     Accounts receivable                                 --             58,424
     Restricted cash-escrow                           (37,381)            --
     Inventories                                         --              5,000
     Prepaid expense and other                           --             27,487

Increase (Decrease) in:
     Accounts payable                                (310,107)         403,187
     Bank overdraft                                      --            (74,134)
     Accrued expenses                                   4,850         (208,693)

NET CASH USED IN
 OPERATING ACTIVITIES                                (431,285)        (357,260)

CASH FLOWS FROM
   INVESTING ACTIVITIES
   Purchase of investment                             (23,125)            --
   Issuance of note receivable                        (90,000)            --
   Purchase of property
      and equipment                                      --             (7,781)
   Proceeds from disposal
       of property and equipment                         --             12,345

NET CASH PROVIDED BY (USED IN)
INVESTING ACTIVITIES                                 (113,125)           4,564

CASH FLOWS FROM FINANCING ACTIVITIES
   Proceeds from issuance of
             preferred stock                           34,882             --
   Proceeds from issuance
          of common stock                             501,587          360,680

NET CASH PROVIDED BY
    FINANCING ACTIVITIES                              536,469          360,680

NET INCREASE (DECREASE) IN CASH                        (7,941)           7,984

CASH, BEGINNING OF YEAR                                 7,984             --

CASH, END OF YEAR                                   $      43        $   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.  The Company  currently has no
operations and is seeking a merger candidate.

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.

Investments:  In accordance with Statement of Financial Accounting Standards No.
115 (SFAS  No.  115)  Accounting  for  Certain  Investments  in Debt and  Equity
Securities,  trading  secrities are reported at fair value with unrealized gains
and losses  recognized  in the Statement of  Operations,  and available for sale
securities  are also  reported  at fair value with  unrealized  gains and losses
reported in shareholders' equity.

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, 1998 and 1997,  basic and dilutive loss per share are the same. The
net loss per share calculations  reflect the effect of stock dividends and stock
splits.

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.  Valuation  allowances are established
when  necessary  to reduce  deferred  tax  assets to the amount  expected  to be
realized.

Fair Value of Financial  Instruments:  The carrying amount for cash approximates
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.  The fair value of note  receivable  is  estimated  on
discounted  cash flows using a current risk  weighted  interest  rate and on the
current  rates  offered  based by the  Company  for notes of the same  remaining
maturities.


<PAGE>


B.  Restricted  Cash Escrow:  During  1998,  the Company  established  an escrow
account  with a former  officer of the  Company.  Funds  totaling  $37,381  were
available to the Company at December 31, 1998.

C. Investment:  During 1998, the Company  purchased common shares in Cyberquest,
Ltd., a privately held Colorado  corporation  (Cyberquest),  for $23,125.  These
shares of Cyberquest  were later  exchanged for 1,315,800  common shares of CBQ,
Inc.  (formerly known as Freedom  Funding,  Inc. ), a publicly held  corporation
(CBQI). This exchange was characterized as a tax free  reorganization  under the
Internal  Revenue  Code and  resulted  in  Cyberquest  becoming  a wholly  owned
subsidiary of CBQI and the Company holding  restricted  shares in CBQI. A former
executive  officer and director of the Company at the time of the  investment in
Cyberquest  and the  exchange  with CBQI was also then a  majority  shareholder,
executive  officer  and  director  of CBQI,  although  this  person  was never a
shareholder,  executive  officer or  director  of  Cyberquest.  Cyberquest  is a
developmental  stage company operating in the internet  business.  The Company's
investment  is stated at cost at December  31,  1998.  Management  believes  the
stated cost of the  investment  approximates  fair market  value at December 31,
1998. It is reasonably possible that management's estimate of the fair value may
change.

D. Note  Receivable:  In conjunction  with the investment in Note C, the Company
entered into an agreement to loan Cyberquest $90,000. The agreement provides for
interest on the outstanding  balance to accrue at 1% per month, is unsecured and
is due on demand.

E.  Accounts  Payable:  At December 31, 1998,  the majority of accounts  payable
consists 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; therefore, the Company is contingently
liable for $697,616 of previously forgiven accounts payable.

F. 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.  Included  in the  accompanying
balance sheet is accrued interest of $26,041 at December 31, 1998.

G. Income Taxes:  The provision for income taxes for the year ended December 31,
1998 and 1997 consisted solely of minimum state taxes.

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

                                              1998                   1997
                                              ----                   ----

Net operating loss carryforward           $ 1,414,000            $ 1,319,000
Valuation allowance                        (1,414,000)

Net deferred tax assets                   $      --                     --


<PAGE>


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 decrease in the valuation allowance from December
31, 1997 to December 31, 1998 was $1,319,000.

The Companies net operating loss carryforwards expire as follows:

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

   1999                           -               34,100
   2000                           -              361,500
   2001                           -              573,700
   2002                           -              272,000
   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                    -
   2012                     637,800                    -

   Total                 $4,094,600           $1,241,300

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.

H. 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 is  entitled  to thirty  five votes with the Series A
preferred  stock and common stock voting  together as though they constitute one
class.

<PAGE>


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.

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 Directors  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, 1996     2,700,000

Warrants issued to officers for services      2,080,850

Warrants exercised                                    -

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

Warrants issued for services                  5,633,656

Warrants exercised                             (449,306)

Warrants outstanding at December 31, 1998     9,965,200

As of December 31, 1998,  the Company had issued  Series A Warrants in excess of
the  amount  authorized.  Effective  February  5, 1999,  the Board of  Directors
increased the number of Series A Warrants authorized to 10,000,000.

<PAGE>


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,
1998.

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,  the  Company  is  not  obligated  to  pay  $.11  per  share  to  the
bridgeholders (Note M).

I. Supplemental  Cash Flow Information:  Cash paid for interest and income taxes
for the years ended December 31, 1998 and 1997:


                                            December 31,       December 31,
                                                1998               1997
                                                ----               ----

Interest                                       $ --               $ --
Income taxes                                      800             $1,600

Non cash financing  disclosure:  In December,  1998, the Company converted 5,910
Preferred A shares into 206,850 common shares.

In December,  1998, the Company  converted 5,910 Series A Preferred  shares into
206,850 common shares.

J.  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 the
accounts payable for the year ended December 31, 1998.

K. 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.  During 1997, the Company paid  consulting
fees   amounting  to  $19,500  to  officers   and   directors  of  the  Company.
Additionally,  the Company paid a former  director 14,826 shares of common stock
valued at $24,508 during the year ended December 31, 1997, and, paid during 1998
and 1997, respectively,  cash of $121,395 and $9,040 for legal services incurred
during the years ended December 31, 1997,  and December 31, 1996,  respectively.
Common stock issued in exchange for services  were valued at the market price of
the stock on the date of issuance.  Additionally, see Notes B, C and D for other
related party activities.

<PAGE>


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

M. Going Concern: As shown in the accompanying financial statements, the Company
incurred  net  operating  losses of $637,760  and  $543,980  for the years ended
December  31, 1998 and 1997,  respectively.  As of December  31,  1998,  current
liabilities  exceed  current  assets by $162,043.  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.

During 1998,  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 N), 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.

N.  Contingencies:

Fisher:  On January 22, 1998 the Company  entered  into a purchase  agreement to
merge with  Arcon  Energy.  Based on  improprieties  discovered  by the Board of
Directors of the  Company,  the  agreement  was deemed null and void on June 15,
1998,  and the purchase  agreement was  rescinded.  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  alleged 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.

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

<PAGE>


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 once  again  pursued
judgements  against Mr. Fisher and his affiliates in the Federal  District Court
action  discussed  in the  preceding  paragraph;  however,  the hearings in this
matter were twice unilaterally postponed by the court so that by the time of the
final  hearing date Mr. Fisher and his  affiliates  had removed  themselves  and
their assets to the Bahamas.  Judgments in the United States are not enforceable
in the Bahamas;  therefore,  the Company  withdrew its motion and the  complaint
(without  prejudice).  As a result of these  activities,  the Company incurred a
loss of $258,241  which is included in the statements of operations for the year
ended December 31, 1998.

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 to 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.

O. Loss Per Share:  The following  reconciles  amounts reported in the financial
statements for the years ended December 31, 1998 and 1997, respectively:

                                                         1998
                                       -----------------------------------------
                                       Income (loss)     Shares        Per-share
                                        (Numerator)   (Denominator)      Amount
                                        ----------    -------------      ------

Income (loss)
   from continuous operations            $(637,760)           --         --

Less preferred stock dividends                --              --         --

Income (loss) from available
    to common share                       (637,760)      3,231,154      $  (.20)

Extraordinary item                            --              --         --

Income (loss) available to
   common share holders
   basic earnings per share              $(637,760)      3,231,154      $  (.20)


                                                         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
   basic earnings per share             (1,030,433)       2,073,820     $  (.50)

Extraordinary item                         486,453             --           .24

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

<PAGE>


During 1998 and 1997,  the Company had warrants and stock  options  outstanding,
each 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, 1,073,600 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 1998:

Until 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 McAndrew         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 December 30, 1998:

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

December 30, 1998, through the date of this report:

Roger F. Tompkins        Director, CEO, President, CFO and Treasurer

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
   ----                 ---          --------

Roger F. Tompkins       54           Director, President, CEO, CFO and Treasurer

Profiles of Directors and Executive Officers:  Roger F. Tompkins first served as
a director of the Company from  September 18, 1995,  through  December 30, 1996.
From November,  1985, through January, 1996, Mr. Tompkins was a director and the
sole executive  officer of Power Capital  Corporation,  a consulting firm which,

<PAGE>


through a wholly owned subsidiary,  Concepts  Associates,  Inc.,  specialized in
mergers, acquisitions,  corporate finance and public relations. Power Capital is
publicly  held,  and  acquired  in January of 1996 a business  in China which is
developing  a Sheraton  Hotel and  adjoining  commercial  complex in the Beijing
metropolitan area. Mr. Tompkins resigned as an officer and as a director of this
entity  after the  acquisition.  Since  August,  1980,  Mr.  Tompkins has been a
director and an executive officer of Concepts  Associates,  which, until January
of 1996, was a wholly owned subsidiary of Power Capital.  Mr. Tompkins purchased
Concepts  Associates from Power Capital in January,  1996, and is now conducting
the previous business of Power Capital through Concepts Associates.  During 1961
and 1962,  Mr.  Tompkins  attended  Farleigh  Dickenson  University  but did not
receive a degree.

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 of the Company during 1997. No compensation  was paid to
executive  officers during 1998;  thus, no presentation is made in the following
table in this regards.


                           Summary Compensation Table

                                             Annual Compensation
                                             -------------------
Name, Principal Position (1)           Year        Salary       Bonus
----------------------------           ----        ------       -----

Robert W. Marsik,
president, CEO and CFO                 1997        $0         $44,284 (2)

(1) Mr. Tompkins was not appointed an executive officer until December 30, 1998;
consequently, he received no compensation from the Company for services rendered
during 1998. 

(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.  The contract  was  mutually  terminated  without any further
obligation of the Company on February 17, 1997.

<PAGE>


Item 11.  Security Ownership of Management and Certain Others.

The following  table sets forth  certain  information  regarding the  beneficial
ownership as of March 31, 1999,  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 *
----------------                      ------------------        -----------

Roger F. Tompkins                             0                     0%

All executive officers 
 and directors as a group (one person)                              0%

* These  shares and  percentages  are based upon the assumed  conversion  of all
outstanding  shares of Series A Preferred  Stock, on March 31, 1999, which would
have resulted in there having been 16,228,638 shares of Common Stock outstanding
on that date.

Item 12.  Certain Transactions.

On February  6, 1998,  the Company  issued  90,000  shares of Series A preferred
stock valued at $180,000 and 4,500,000 Series A warrants to a former officer and
director in exchange for his  services  rendered  from August 29, 1997,  through
January 22, 1998. In February,  1998, the Company paid a former  director 14,826
shares of common stock valued at $24,508 for services  rendered  during the year
ended December 31, 1997.  During 1998 and 1997,  respectively,  the Company paid
this former director and executive officer cash of $121,395 and $9,040 for legal
services  rendered  during the years ended  December  31, 1997 and  December 31,
1996, respectively.  Common stock issued in exchange for services were valued at
the market price of the stock on the date of issuance.

During 1998, the Company  established an escrow account with a former officer of
the Company.  Funds  totaling  $37,381 were available to the Company at December
31, 1998.

During  1998,  the  Company  purchased  common  shares in  Cyberquest,  Ltd.,  a
privately held Colorado corporation  (Cyberquest),  for $23,125. These shares of
Cyberquest  were  later  exchanged  for  1,315,800  common  shares of CBQ,  Inc.
(formerly known as Freedom Funding,  Inc. ), a publicly held corporation (CBQI).
This exchange was characterized as a tax free reorganization  under the Internal
Revenue Code and resulted in  Cyberquest  becoming a wholly owned  subsidiary of
CBQI and in the Company holding  restricted  shares in CBQI. A former  executive
officer and director of the Company at the time of the  investment in Cyberquest
and the  exchange  with CBQI was also  then a  majority  shareholder,  executive
officer and  director  of CBQI,  although  this person was never a  shareholder,
executive   officer  or  director  of  Cyberquest.   In  conjunction  with  this
investment,  the Company entered into an agreement to loan  Cyberquest  $90,000.
The agreement  provides for interest on the outstanding  balance to accrue at 1%
per month, is unsecured and due on demand.

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

None.

<PAGE>


                                   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 Stone
Mountain, State of Georgia on the 8th day of April, 1999.

MIDLAND, INC.
(Registrant)


By: /s/ Roger F. Tompkins
   ----------------------------------
   Roger F. Tompkins, 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 indicated on the 8th day of April, 1999.

By: /s/ Roger F. Tompkins
   ----------------------------------
   Roger F. Tompkins, Director