Form 10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                              Washington, DC 20549


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

For the quarterly period ended March 31, 1998

                                       OR

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

For the transition period from ___________________ to __________________________

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

For Quarter Ended March 31, 1998                  Commission File Number 811-407

                          1150 LIQUIDATING CORPORATION
                             (formerly SBM Company)
             (Exact name of registrant as specified in its charter)

               MINNESOTA                               41-0557530
     (State or other jurisdiction of         (IRS Employer Identification No.)
      incorporation or organization)

            4440 IDS Center
         Minneapolis, Minnesota                           55402
 (Address of principal executive offices)               (Zip Code)

Registrant's telephone number, including area code (612) 338-5254



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

2,179,714 Common Shares were outstanding as of March 31, 1998

<PAGE>


                          1150 LIQUIDATING CORPORATION


                                    I N D E X


                                                                            Page

PART I.   FINANCIAL INFORMATION

   Item 1.       Financial Statements (Unaudited)

                        Statements of Net Assets in Liquidation                1

                        Statement of Changes in Net Assets in Liquidation      2

                        Notes to Condensed Financial Statements              3-6


    Item 2.      Management's Discussion and Analysis of Financial
                    Condition and Changes in Net Assets in Liquidation         7


PART II.         OTHER INFORMATION                                           8-9

<PAGE>



                          Part I. FINANCIAL INFORMATION
                          Item I. FINANCIAL STATEMENTS

                          1150 LIQUIDATING CORPORATION
                     (formerly SBM COMPANY AND SUBSIDIARIES)

                     STATEMENT OF NET ASSETS IN LIQUIDATION

<TABLE>
<CAPTION>

                                                                     March 31,       December 31,
        ASSETS                                                         1998              1997
                                                                    -----------      ------------
                                                                    (Unaudited)       (Audited)

<S>                                                                 <C>               <C>       
Cash and cash equivalents                                           $4,873,277        $5,015,698
Other assets                                                            32,091            36,971
                                                                    ----------        ----------
                 Total assets                                        4,905,368         5,052,669

                 LIABILITIES

Reserve for taxes                                                       41,000            70,000
Accounts payable                                                        87,054            83,888
Reserve for estimated costs during the period of liquidation           150,933           245,239
                                                                    ----------        ----------
                 Total liabilities                                     278,987           399,127

Common stock held by employee benefit plans
   or plan participants - 304,693 shares (see Note 2)                  821,434           825,231
                                                                    ----------        ----------

                 Net assets                                         $3,804,947        $3,828,311
                                                                    ==========        ==========

Common shares outstanding - 2,179,714 less 304,693 shares
   held by employee benefit plans or plan participants               1,875,021         1,875,021
                                                                    ==========        ==========

Net assets per common share outstanding                             $     2.03        $     2.04
                                                                    ==========        ==========



See Notes to Financial Statements.

</TABLE>


<PAGE>


                          1150 LIQUIDATING CORPORATION

                STATEMENT OF CHANGES IN NET ASSETS IN LIQUIDATION
             For the Period from December 31, 1994 to March 31, 1998

<TABLE>
<CAPTION>



<S>                                                                                     <C>          
NET ASSETS (DEFICIT) AT DECEMBER 31, 1994                                                 $(31,976,759)

Income from liquidating activities                                                          42,662,596

Preferred stock liquidation amount in excess
     of carrying value                                                                      (1,279,805)

Common stock dividend distribution - $2.75 per share                                        (5,994,214)

Allocation of common stock dividend distribution to
     common stock held by employee benefit plans                                               837,906

Allocation of net loss and carrying value to common
     stock held by employee benefit plans                                                      442,472
                                                                                          ------------

NET ASSETS AT DECEMBER 31, 1995                                                              4,692,196

Income (loss) from liquidating activities                                                     (330,740)

Special allocation of carrying value to common stock held by
     employee benefit plans under settlement agreement (Note 2)                             (1,000,000)

Allocation of net loss and carrying value to
     common stock held by employee benefit plans                                                11,286
                                                                                          ------------

NET ASSETS AT DECEMBER 31, 1996                                                              3,372,742

Income from liquidating activities                                                             529,599

Allocation of net income and carrying value to common stock
     held by employee benefit plans                                                            (74,030)
                                                                                          ------------

NET ASSETS AT DECEMBER 31, 1997                                                              3,828,311

Income (loss) from liquidating activities (January 1, 1998 through March 31, 1998)             (27,161)

Allocation of net income and carrying value to common stock
     held by employee benefit plans for plan participants                                        3,797
                                                                                          ------------

NET ASSETS AT MARCH 31, 1998 (unaudited)                                                  $  3,804,947
                                                                                          ============

</TABLE>


See Notes to Financial Statements.


<PAGE>


                          1150 LIQUIDATING CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)


Note 1.           Sale and Liquidation of the Company:

                  Effective May 31, 1995, SBM Company (the "Company") sold
                  substantially all of the business operations and assets of the
                  Company to ARM Financial Group, Inc. (ARM) (the Transaction)
                  for a purchase price of $34.5 million, net of $4.1 million of
                  liabilities assumed, pursuant to an Amended and Restated Stock
                  and Asset Purchase Agreement dated February 16, 1995 between
                  the Company and ARM. As part of the Transaction, ARM acquired
                  all of the outstanding stock of the Company's wholly owned
                  subsidiaries (State Bond and Mortgage Life Insurance Company
                  ("SBM Life"), SBM Certificate Company ("SBMC") and SBM
                  Financial Services, Inc.) and certain assets of the Company,
                  including the investment adviser function of six mutual funds,
                  and assumed certain liabilities of the Company. The following
                  summarizes the proceeds from and net assets sold of the
                  Transaction:

       Proceeds from the sale                                 $  34,445,877

       Assets sold:
           Investments                                          808,543,939
           Receivable from reinsurer                             85,202,588
           Deferred acquisition costs                            61,683,713
           Other assets                                          14,863,970
                                                              -------------
                                                                970,294,210

       Liabilities assumed:
           Future policy benefits                               861,067,924
           Face amount certificate reserves                      56,439,745
           Accounts payable and other liabilities                12,508,983
                                                              -------------
                                                                930,016,652

       Net assets sold                                           40,277,558
       Less costs of the Transaction, including income
           taxes of $408,000                                        710,927
                                                              -------------

       Net loss on sale of Company operations                 $  (6,542,608)
                                                              =============

                  The Company intends to wind up and liquidate the Company as
                  soon as practicable. The Company has adopted a Plan of
                  Dissolution effective May 31, 1995. At closing, the Series A
                  Preferred Stock was redeemed for $20.5 million (including $1.5
                  million of dividends in arrears) as a result of its senior
                  rights over the common stock.

                  The Company's shareholders approved the Transaction and the
                  Plan of Dissolution (the "Plan") at their regular shareholder
                  meeting on May 18, 1995. The Company also changed its name to
                  "1150 Liquidating Corporation" effective June 14, 1995.

                  As a result, the Company has adopted the liquidation basis of
                  accounting effective January 1, 1995. Assets have been valued
                  at estimated net realizable value and liabilities provide for
                  all expenses to be incurred during the period of liquidation.
                  The reserve for estimated costs during the period of
                  liquidation includes what management anticipates are
                  reasonable estimates of costs required to liquidate the
                  Company's remaining assets and to defend known legal claims,
                  as well as the estimated costs of directors and officers and
                  legal, audit and other professional fees and expenses expected
                  to be incurred during the period of liquidation. The net
                  assets ultimately available for distribution to shareholders
                  will depend almost entirely upon the remaining time involved
                  in winding up the affairs of the Company, and any now unknown
                  liabilities or additional litigation (including any litigation
                  resulting from the Schonlau

<PAGE>


                          1150 LIQUIDATING CORPORATION

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (Unaudited)


Note 1.           Sale and Liquidation of the Company (Continued):

                  investigation described in Note 3) and the expenses and
                  liabilities incurred in connection therewith. The statement of
                  net assets in liquidation at March 31, 1998 includes accruals
                  for general and administrative expenses anticipated by
                  management with respect to resolving such known matters in a
                  reasonably timely fashion, as expected at that date. Net
                  assets ultimately available for distribution will be reduced
                  by the amount of any other unknown liabilities as may arise in
                  the future, and to any extent general and administrative
                  expenses incurred exceed the estimates included in the
                  statement of net assets in liquidation at March 31, 1998. In
                  addition, the financial statements do not reflect any
                  investment income that is anticipated to be earned subsequent
                  to March 31, 1998.

                  The financial statements included in this Form 10-Q have been
                  prepared by the Company without audit. In the opinion of
                  management, all adjustments necessary to present fairly the
                  statement of net assets in liquidation and changes therein for
                  all periods presented have been made.

                  Certain information and footnote disclosures normally included
                  in the financial statements prepared in accordance with
                  generally accepted accounting principles have been condensed
                  or omitted. It is suggested that these financial statements be
                  read in conjunction with the financial statements and notes
                  thereto included in the SBM Company and Subsidiaries' Annual
                  Report on Form 10-K for the year ended December 31, 1997.

                  The preparation of financial statements in accordance 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 the reported amount of revenues and expenses during the
                  reporting period. For example, estimates and assumptions are
                  used in determining the Reserve for Estimated Costs During the
                  Period of Liquidation and Common Stock held by the Employee
                  Benefit Plans or plan participants. While these estimates are
                  based on the best judgment of management, actual results and
                  revised estimates could differ from current estimates and are
                  reflected in the period of change.


Note 2.           Common Stock Held by Employee Benefit Plans or Plan 
                  Participants:

                  The Company's two employee benefit plans ("Plans") owned
                  304,693 shares of Company common stock. The value of such
                  shares has been classified as a separate line outside of net
                  assets in liquidation on the Company's statement of net assets
                  in liquidation as of March 31, 1998 and as of December 31,
                  1997 because of the Company's obligation to repurchase such
                  shares, under certain circumstances, under a stock agreement
                  ("Stock Agreement"), between the Company and the Plans'
                  trustee dated September 30, 1993.

                  On the December 31, 1997 and March 31, 1998 statement of net
                  assets in liquidation, the liability to the Plans'
                  participants has been shown as the estimated liquidation value
                  of their shares of common stock under the settlement agreement
                  discussed below.

                  In January 1995, the trustee of the Plans notified the Company
                  that it was tendering all shares held by the Plans to the
                  Company for purchase by the Company under the Stock Agreement.
                  Under the Stock Agreement, in certain circumstances, the
                  Company has agreed to purchase common shares tendered to it by
                  the Plans at a price equal to the higher of adjusted book
                  value (as defined in the Stock Agreement) or fair market
                  value. The Plans' trustee asserted in its tender that the
                  correct basis under the Stock Agreement to determine the price
                  of the shares for purposes of the Company's repurchase
                  obligation is to

<PAGE>


                          1150 LIQUIDATING CORPORATION

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (Unaudited)


Note 2.           Common Stock Held by Employee Benefit Plans or Plan
                  Participants (Continued):

                  determine their adjusted book value at December 31, 1994 based
                  on the books of the Company but using the amortized cost of
                  the Company's investment portfolios, rather than their fair
                  market value. The Company maintains that such price under the
                  Stock Agreement must be based on the books of the Company
                  which, after the effectiveness of the SFAS 115 on January 1,
                  1994, must use the market value, rather than the amortized
                  cost, of the substantial portion of the Company's investment
                  portfolios which must be classified as "available-for-sale"
                  under applicable accounting principles. In the alternative,
                  the Company maintains that the tender was invalid in the
                  circumstances under which it was made and, even if valid, that
                  the correct price under such circumstances is the pro-rata
                  estimated liquidation value of all of the Company's common
                  shares pursuant to the Plan of Dissolution, rather than any
                  value based upon the books of the Company as prepared on the
                  going concern historical cost basis.

                  The Company declined to repurchase such shares at the price
                  demanded by the Trustee for various reasons, including those
                  stated above, and commenced a declaratory judgment action in
                  Minnesota District Court in March 1995 to determine its
                  repurchase obligation and the applicable price under the Stock
                  Agreement ("Plan Litigation").

                  On November 13, 1995, the Company, the Trustee, and the
                  Schonlau Trust agreed upon a settlement of the litigation and
                  executed a settlement agreement in principle. A draft of a
                  final and more formal settlement agreement (the Settlement
                  Agreement) was subsequently prepared and circulated. In
                  general, the Settlement Agreement contemplates payment by the
                  Company of $1.15 million to the Plans in addition to the pro
                  rata amounts otherwise distributable in liquidation with
                  respect to the 304,693 shares of Common Stock held by the
                  Plans. This amount includes $150,000 in partial payment of
                  attorneys' fees incurred by the Trustee. The Settlement
                  Agreement also provides for the payment by the Company of up
                  to $100,000 of the litigation costs incurred by the Schonlau
                  Trust. The amounts payable as part of the settlement would be
                  in addition to the pro rata amounts payable to Plan
                  shareholders (determined without regard to the settlement
                  amounts) and would be payable out of the amount otherwise
                  available for pro rata distribution in liquidation to non-Plan
                  shareholders.

                  By April 1996, both the Trustee and the Schonlau Trust had
                  indicated that they had no significant issues with respect to
                  the economic terms of the Settlement Agreement. The Schonlau
                  Trust did, however, indicate that it was unwilling to proceed
                  to settlement unless a class consisting of all non-Plan
                  shareholders was certified and unless it was named as
                  representative of the class. The Company and the Trustee have
                  agreed to these terms as part of the Settlement Agreement.

                  During the year the Department of Labor (DOL) advised the
                  Company of certain alleged violations of ERISA (of breach of
                  fiduciary duty under Sections 404(a)(1)(A), (B), and (D) of
                  ERISA and prohibited transactions based upon Section 406(b)(2)
                  of ERISA) in connection with the Company's hanlding of the
                  repurchase of shares owned by the Plans under the Put
                  Agreement and the Internal Revenue Service (IRS) opened an
                  audit alleging that the Company could be liable for certain
                  excise taxes in connection with such matters. The Company
                  objected to such allegations and, on February 27, 1997,
                  received a letter fromt he DOL which advised it would take no
                  further action in connection with the allegations if the
                  litigation with the Plans is resolved pursuant to the
                  Settlement Agreement and the Company subsequently was advised
                  that the IRS would close its audit and not assess excise tax
                  liabilities on the Company. These matters delayed
                  implementation of the Settlement Agreement.


<PAGE>


                          1150 LIQUIDATING CORPORATION

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (Unaudited)


Note 2.           Common Stock Previously Held by Employee Benefit Plans
                  (Continued):

                  In October 1996, the Company, the Schonlau Trust and the
                  Trustee agreed to sign the Settlement Agreement and proceed
                  with its implementation at such time as the allegations of the
                  DOL and IRS were resolved in a manner satisfactory to all
                  parties to the Plan litigation. In June 1997, these
                  allegations of the DOL and IRS having been resolved, the
                  Settlement Agreement was signed by all parties and was
                  submitted to the court for approval. A hearing was held on
                  August 21, 1997 and Judge William R. Howard approved the
                  settlement and entered the Order Approving Settlement. The
                  Settlement became effective on November 21, 1997.

                  Pursuant to the terms of the Settlement Agreement, on or about
                  December 1, 1997, the Company made settlement payments
                  totaling $1.15 million to the Plan's Trustee and a settlement
                  payment of $100,000 to the Schonlau Trust. Also, on or about
                  December 1, 1997, the Company's initial liquidating
                  distribution to the Trustee, which had been held in escrow
                  pending resolution of the Plan litigation, was released to the
                  Trustee.

                  On February 16, 1998, the 304,693 shares of common stock held
                  by the Employee Benefit Plans were distributed to plan
                  participants.


Note 3.           Other Matters:

                  The Company was notified several months ago that The Trust
                  Under the Will of T.H. Schonlau ("Schonlau Trust"), its
                  largest shareholder, has retained legal counsel for the
                  purpose of investigating whether the Schonlau Trust has claims
                  or rights against current or former officers, directors,
                  employees, shareholders, representatives, agents, auditors,
                  accountants, attorneys or anyone acting on its behalf (i)
                  arising out of or relating to its ownership of SBM common
                  shares and (ii) arising out of or relating to the management
                  of SBM, or otherwise. The Trust has requested the Company to
                  produce certain corporate records and documents in connection
                  with its investigation.

                  At this time, it is impossible to anticipate whether the
                  Schonlau Trust, or other shareholders, will commence suit with
                  respect to the above, or other matters, and, if so, who would
                  be named as defendants. Presumably, the Schonlau Trust would
                  not commence any such action unless it believed that a
                  substantial likelihood existed that the liquidation value of
                  the Company, net to shareholders, would be materially enhanced
                  by its efforts. Such a determination would have to factor in
                  the following, and other considerations: (i) likely expenses
                  to be incurred by the Company in supporting any such
                  litigation; (ii) the expenses to be incurred by the Company in
                  connection with its obligations to defend and indemnify
                  present and past officers and directors in the event they were
                  to become involved in any such litigation; (iii) expenses to
                  be incurred by the Company in defending against probable third
                  part claims, including claims for indemnity and contribution.

                  Any such shareholder action, even if successful in the
                  long-term, would have the effect of delaying the liquidation
                  and dissolution of the Company and of increasing its
                  administrative and professional expenses in the short-term. No
                  provision has been made to support any actual litigation by
                  the Schonlau Trust, claims for indemnity by present or former
                  officers or directors, or related litigation which may result,
                  because the Schonlau Trust has not decided at this time to
                  bring any such action.

                  The Company is also undergoing audits by the Internal Revenue
                  Service of the years 1986-1990 and 1991-1993. An adjustment
                  agreement, which is not material to the Company's financial
                  condition, has been executed by the Company and the Internal
                  Revenue Service with respect to both audits and subsequently
                  approved by the Joint Committee of Congress.


<PAGE>


                          1150 LIQUIDATING CORPORATION

           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS



RESULTS OF OPERATIONS




<PAGE>


                           PART II. OTHER INFORMATION



Item 4.           Submission of Matters to a Vote of Securities Holders
                  -----------------------------------------------------

                  None




Item 6.           Exhibits and Reports on Form 8-K
                  --------------------------------
                  None


<PAGE>


                                    SIGNATURE


Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                                     1150 LIQUIDATING CORPORATION



Date May 15, 1998                By: /s/ Charles A. Geer
                                         Charles A. Geer

                                     Its:  President and Chief Financial Officer