(Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarter ended September 30, 2020 or Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☐ TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 COMMISSION FILE NUMBER 000-10685 Midwest Holding Inc. (Exact name of registrant as specified in its charter) Delaware 20-0362426 (State or other jurisdiction of (I.R.S. Employe ...

Table of Contents Nebraska 20-0362426 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 2900 S. 70th, Suite 400, Lincoln, NE 68506 (Address of principal executive offices) (Zip Code) UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarter ended June 30, 2020 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF TH ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarter ended March 31, 2020 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 COMMISSION FILE NUMBER 000‑10685 Midwest Holding Inc. (Exact name of registrant as specified in its charter) Nebraska 20‑0362426 (State or other jurisdiction of (I.R.S. Employer in ...

FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2019 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 COMMISSION FILE NUMBER 000‑10685 Midwest Holding Inc. Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Exact name of registrant as specified in its charter) (State or other jurisdiction of (I.R.S. Employer incorporation or o ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2019 COMMISSION FILE NUMBER 000-10685 Midwest Holding Inc. (Exact name of registrant as specified in its charter) Nebraska 20-0362426 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 2900 S. 70th, Suite 400, Lincoln, Nebraska ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2019 COMMISSION FILE NUMBER 000-10685 Midwest Holding Inc. (Exact name of registrant as specified in its charter) Nebraska 20-0362426 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 2900 S. 70th, Suite 400, Lincoln, Nebraska 68506 (Address of princ ...

[Filing Information](index=1&type=section&id=Filing%20Information) Key administrative details of the Form 10-Q filing for Midwest Holding Inc. as of March 31, 2019 | Detail | Value | | :--- | :--- | | Filing Type | Form 10-Q | | Period Ended | March 31, 2019 | | Registrant | Midwest Holding Inc. | | Filer Status | Smaller reporting company | | Voting Common Stock Outstanding (as of May 1, 2019) | 22,873,764 shares | [PART I – FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) This part presents the unaudited consolidated financial statements and management's discussion and analysis [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Unaudited consolidated financial statements and detailed notes for Midwest Holding Inc. for the periods ended March 31, 2019, and December 31, 2018 [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) Total assets and liabilities increased by approximately 12% as of March 31, 2019, driven by investments and deposit-type contracts, resulting in an increased stockholders' deficit | Metric | As of March 31, 2019 ($) | As of December 31, 2018 ($) | Change (Absolute) ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total Assets | $74,661,997 | $66,491,249 | $8,170,748 | 12.3% | | Total Liabilities | $77,591,885 | $69,128,199 | $8,463,686 | 12.2% | | Deposit-type contracts | $15,778,853 | $7,234,927 | $8,543,926 | 118.1% | | Total Stockholders' Deficit | $(4,520,555) | $(4,136,950) | $(383,605) | 9.3% | [Consolidated Statements of Comprehensive Loss](index=5&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Loss) Net loss increased significantly for the three months ended March 31, 2019, driven by higher expenses despite a substantial rise in total revenues from reinsurance amortization | Metric | Three months ended March 31, 2019 ($) | Three months ended March 31, 2018 ($) | Change (Absolute) ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $1,005,706 | $198,360 | $807,346 | 407.0% | | Amortization of deferred gain on reinsurance | $806,047 | $12,094 | $793,953 | 6565.0% | | Total Expenses | $2,500,724 | $936,768 | $1,563,956 | 166.9% | | Net Loss | $(1,495,018) | $(759,885) | $(735,133) | 96.7% | | Basic Net Loss per Common Share | $(0.07) | $(0.03) | $(0.04) | 133.3% | | Comprehensive Loss | $(642,650) | $(1,333,117) | $690,467 | -51.8% | [Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Consolidated%20Statements%20of%20Stockholders'%20Equity) Total stockholders' deficit increased due to net loss, partially offset by unrealized investment gains and Xenith note interest | Metric | December 31, 2018 ($) | March 31, 2019 ($) | Change (Absolute) ($) | | :--- | :--- | :--- | :--- | | Total Stockholders' Equity (Deficit) | $(4,136,950) | $(4,520,555) | $(383,605) | | Net Loss | - | $(1,495,018) | $(1,495,018) | | Unrealized gains on investments | - | $852,368 | $852,368 | | Xenith note interest | - | $259,045 | $259,045 | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Cash and cash equivalents increased due to substantial financing activities from deposit-type contracts, offsetting increased cash used in investing and reduced operating cash outflow | Cash Flow Activity | Three Months ended March 31, 2019 ($) | Three Months ended March 31, 2018 ($) | Change (Absolute) ($) | | :--- | :--- | :--- | :--- | | Net cash used for operating activities | $(249,444) | $(444,690) | $195,246 | | Net cash used for investing activities | $(7,089,222) | $(4,830) | $(7,084,392) | | Net cash provided by financing activities | $8,320,638 | $3,213 | $8,317,425 | | Net increase (decrease) in cash and cash equivalents | $981,972 | $(446,307) | $1,428,279 | | Cash and cash equivalents, Ending | $3,814,539 | $505,220 | $3,309,319 | [Notes to Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Detailed disclosures explain operations, accounting policies, financial position, and significant transactions supporting the consolidated financial statements [Note 1. Nature of Operations and Basis of Presentation](index=8&type=section&id=Note%201.%20Nature%20of%20Operations%20and%20Basis%20of%20Presentation) Midwest Holding Inc. operates in life and annuity insurance, with financial statements prepared under GAAP and key accounting policies for investments, loans, and reinsurance - Midwest Holding Inc. operates in the life and annuity insurance business through its subsidiary, American Life & Security Corp[19](index=19&type=chunk) - Financial statements are prepared in accordance with GAAP for interim financial information[20](index=20&type=chunk) - Key accounting policies cover investments (available-for-sale, fair value), policy loans (unpaid principal), deferred acquisition costs (capitalized and amortized), property and equipment (cost net of depreciation), and reinsurance (recoverables reported gross of liabilities)[23](index=23&type=chunk)[27](index=27&type=chunk)[29](index=29&type=chunk)[31](index=31&type=chunk)[34](index=34&type=chunk) [Note 2. New Accounting Standards](index=13&type=section&id=Note%202.%20New%20Accounting%20Standards) The company adopted ASU 2016-02 (Leases) and is evaluating future accounting standards, including those for insurance and credit losses, with pervasive impacts anticipated - Adopted ASU 2016-02 (Leases) on January 1, 2019, resulting in recognition of operating lease right-of-use assets of **$561,582** and liabilities of **$616,268** as of March 31, 2019[48](index=48&type=chunk) - Anticipates pervasive impact from ASU 2018-12 (Financial Services-Insurance) effective after December 15, 2020, and is evaluating the impact of ASU 2018-10 (Credit Losses) effective after December 15, 2019[53](index=53&type=chunk)[54](index=54&type=chunk) [Note 3. Change in Control](index=15&type=section&id=Note%203.%20Change%20in%20Control) Xenith Holdings LLC acquired control of Midwest Holding Inc. through convertible preferred stock and loans, potentially owning 98% of voting common stock upon full conversion - Xenith Holdings LLC acquired control of Midwest Holding Inc. on June 28, 2018[55](index=55&type=chunk) | Item | Amount ($) | Conversion Rate (approx.) | Potential Common Shares | | :--- | :--- | :--- | :--- | | Class C Preferred Stock Issued | $1,500,000 | $0.02 per share | 72,900,000 | | Initial Convertible Loans | $600,000 | $0.02 per share | 29,141,790 | | Subsequent Loans (Q4 2018) | $18,500,000 | $0.02 per share | 898,538,525 | | Total Outstanding (Fully Diluted) | | | 1,052,819,150 | - Upon full conversion of all loans and preferred stock, Xenith would own approximately **98%** of the company's issued and outstanding voting common stock[61](index=61&type=chunk) [Note 4. Assets and Liabilities Held for Sale](index=16&type=section&id=Note%204.%20Assets%20and%20Liabilities%20Held%20for%20Sale) American Life ceded legacy policies to Unified Life, reclassifying assets and liabilities as held for sale, with 25% of indemnity policies converted to assumptive - American Life ceded 100% of its legacy policies to Unified Life Insurance Company via an Assumption and Indemnity Reinsurance Agreement, effective July 1, 2018[62](index=62&type=chunk) | Category | As of March 31, 2019 ($) | As of December 31, 2018 ($) | | :--- | :--- | :--- | | Total Assets held for sale | $19,384,959 | $20,937,071 | | Total Liabilities held for sale | $19,354,640 | $21,052,733 | | Loss on discontinued operations (3 months ended March 31, 2019) | $0 | $(21,477) | - As of March 31, 2019, **25%** of the indemnity policies have been converted to assumptive policies, releasing American Life from legal obligations for those policies[66](index=66&type=chunk) [Note 5. Investments](index=19&type=section&id=Note%205.%20Investments) Total fixed maturities increased significantly, primarily in corporate bonds, with a decrease in gross unrealized losses, while net investment income slightly declined | Investment Category | Estimated Fair Value (March 31, 2019) ($) | Estimated Fair Value (December 31, 2018) ($) | Change (%) | | :--- | :--- | :--- | :--- | | Total Fixed Maturities | $25,289,696 | $17,384,183 | 45.5% | | Corporate Bonds | $22,004,949 | $14,095,824 | 56.1% | | Gross Unrealized Losses | $1,035,908 | $1,842,919 | -43.8% | | Metric | Three months ended March 31, 2019 ($) | Three months ended March 31, 2018 ($) | Change (Absolute) ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Net Investment Income | $190,995 | $203,461 | $(12,466) | -6.1% | - No other-than-temporary impairments were deemed necessary for securities in an unrealized loss position, as management intends to hold them until recovery or maturity[71](index=71&type=chunk) [Note 6. Fair Values of Financial Instruments](index=21&type=section&id=Note%206.%20Fair%20Values%20of%20Financial%20Instruments) Financial instruments are measured using a three-level fair value hierarchy, with fixed maturities as Level 2 and other instruments as Level 3, with no transfers between levels - Fair value hierarchy categorizes inputs into Level 1 (quoted prices in active markets), Level 2 (significant other observable inputs), and Level 3 (significant unobservable inputs)[82](index=82&type=chunk) - Fixed maturities are primarily Level 2, while policy loans, deposit-type contracts, and notes payable are Level 3[81](index=81&type=chunk)[82](index=82&type=chunk)[83](index=83&type=chunk)[88](index=88&type=chunk) - No transfers of financial instruments between any levels occurred during the three months ended March 31, 2019, or the year ended December 31, 2018[85](index=85&type=chunk) [Note 7. Income Tax Matters](index=24&type=section&id=Note%207.%20Income%20Tax%20Matters) Net deferred tax assets are fully offset by liabilities due to a valuation allowance on NOL carryforwards, with no income tax expense recognized | Metric | March 31, 2019 ($) | December 31, 2018 ($) | | :--- | :--- | :--- | | Total Deferred Tax Assets | $2,394,651 | $2,282,137 | | Less Valuation Allowance | $(1,984,487) | $(1,928,454) | | Total Deferred Tax Assets, Net | $410,164 | $353,683 | | Total Deferred Tax Liabilities | $410,164 | $353,683 | | Net Deferred Tax Assets | $0 | $0 | - A full valuation allowance of **$1,736,139** was recorded on deferred tax assets related to federal NOL carryforwards due to Section 382 limitations and uncertainty of realization[91](index=91&type=chunk) - No income tax expense was recognized for the three months ended March 31, 2019, or 2018[92](index=92&type=chunk) [Note 8. Reinsurance](index=25&type=section&id=Note%208.%20Reinsurance) Ceded benefit and claim reserves totaled $23.3 million, with the company remaining contingently liable on most ceded reinsurance, and a GAAP loss from a business commutation | Metric | March 31, 2019 ($) | December 31, 2018 ($) | | :--- | :--- | :--- | | Benefit and claim reserves ceded | $23,304,755 | $23,100,644 | | Metric (3 months ended March 31) | 2019 ($) | 2018 ($) | | :--- | :--- | :--- | | Premiums ceded | $273,101 | $342,509 | | Benefits ceded | $77,703 | $61,076 | - American Life remains contingently liable on ceded reinsurance, except for the **25%** of the Unified transaction that has converted to assumptive reinsurance, discharging its responsibilities on those policies[97](index=97&type=chunk)[98](index=98&type=chunk) - Commutation of the SNL assumed block of life business effective July 31, 2018, resulted in a GAAP loss of $154,780[96](index=96&type=chunk) [Note 9. Notes Payable](index=26&type=section&id=Note%209.%20Notes%20Payable) Xenith Holdings LLC provided $19.1 million in secured convertible notes, with accrued interest of $513,713, convertible into 927.7 million common shares | Loan Date | Principal Amount ($) | Shares of Common Stock into which Loan May be Converted | | :--- | :--- | :--- | | June 28, 2018 | $500,000 | 24,284,825 | | June 28, 2018 | $100,000 | 4,856,965 | | October 10, 2018 | $1,000,000 | 48,569,650 | | December 7, 2018 | $17,500,000 | 849,968,875 | | Total | **$19,100,000** | **927,680,315** | - Notes are secured by all issued and outstanding shares of American Life[101](index=101&type=chunk) - Total accrued interest on Xenith notes was **$513,713** as of March 31, 2019, with prior interest waived and added as capital contribution[103](index=103&type=chunk) [Note 10. Deposit-Type Contracts](index=27&type=section&id=Note%2010.%20Deposit-Type%20Contracts) Deposit-type contracts significantly increased to $15.8 million, primarily driven by $8.3 million in deposits from new MYGA product sales | Metric | March 31, 2019 ($) | December 31, 2018 ($) | Change (Absolute) ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Ending Balance | $15,778,853 | $7,234,927 | $8,543,926 | 118.1% | | Deposits received | **$8,320,749** | $650 | $8,320,099 | 1280015.2% | - The significant increase in deposits is primarily due to the sales of the multi-year guaranteed annuity (MYGA) product, which commenced in late January 2019[106](index=106&type=chunk) [Note 11. Contingencies and Commitments](index=27&type=section&id=Note%2011.%20Contingencies%20and%20Commitments) No material legal claims are anticipated, and American Life received a Certificate of Authority in Iowa, planning further state expansion - No material legal proceedings or claims are expected to affect financial position or results of operations[107](index=107&type=chunk) - Received Certificate of Authority to conduct business in Iowa in Q1 2019, with plans for further state expansion[108](index=108&type=chunk) [Note 12. Leases](index=27&type=section&id=Note%2012.%20Leases) Adoption of ASU 2016-02 led to recognition of operating and finance lease assets and liabilities for various corporate equipment and offices - Adopted ASU 2016-02 (Leases) on January 1, 2019, requiring recognition of lease assets and liabilities[109](index=109&type=chunk) | Lease Type | Assets (March 31, 2019) ($) | Liabilities (March 31, 2019) ($) | | :--- | :--- | :--- | | Operating Lease | **$561,582** | **$616,268** | | Finance Lease | **$11,651** | **$7,439** | | Total Leased Assets/Liabilities | $573,233 | $623,707 | - Leases for corporate offices, postage machines, copiers, and computer hardware have remaining terms of two to six years[110](index=110&type=chunk) [Note 13. Statutory Net Income and Surplus](index=29&type=section&id=Note%2013.%20Statutory%20Net%20Income%20and%20Surplus) Statutory net loss increased and capital and surplus decreased, with MYGA product sales contributing to upfront statutory losses despite volume growth | Metric | Three months ended March 31, 2019 ($) | Three months ended March 31, 2018 ($) | Change (Absolute) ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Statutory Net Loss | $(1,308,563) | $(651,716) | $(656,847) | 100.8% | | Metric | As of March 31, 2019 ($) | As of December 31, 2018 ($) | Change (Absolute) ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Capital and Surplus | $18,857,378 | $20,979,285 | $(2,121,907) | -10.1% | - MYGA product sales, while increasing statutory revenue, are characterized by upfront statutory losses[116](index=116&type=chunk) [Note 14. Surplus Notes](index=29&type=section&id=Note%2014.%20Surplus%20Notes) Matured surplus notes were retired by transferring Hawaii condominiums, resulting in a $382,752 gain on settlement - Retired **$550,000** in matured surplus notes (plus accrued interest) by transferring 10 condominiums in Hawaii[117](index=117&type=chunk) | Metric | Amount ($) | | :--- | :--- | | Book value of surplus notes (incl. interest) | **$876,400** | | Book value of Hawaii condominiums | **$493,648** | | Gain on settlement | **$382,752** | [Note 15. Third Party Administration](index=29&type=section&id=Note%2015.%20Third%20Party%20Administration) TPA fee income decreased to $15,540 due to having only one customer for these services | Metric | Three months ended March 31, 2019 ($) | Three months ended March 31, 2018 ($) | Change (Absolute) ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | TPA Fee Income | $15,540 | $24,240 | $(8,700) | -35.9% | - Decrease in TPA fee income attributed to having only one customer for these services[139](index=139&type=chunk) [Note 16. Subsequent Events](index=29&type=section&id=Note%2016.%20Subsequent%20Events) Midwest Holding Inc. acquired a 51% ownership in 1505 Capital LLC, an investment advisory firm, to be consolidated by June 30, 2019 - Acquired **51%** ownership in 1505 Capital LLC on April 2, 2019, an investment advisory and management services firm[119](index=119&type=chunk) - Will consolidate 1505 Capital as of June 30, 2019[119](index=119&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial condition and results of operations, covering business overview, accounting policies, consolidated results, investment strategy, market risks, liquidity, and inflation impact [Overview](index=30&type=section&id=Overview) Midwest Holding Inc., a financial services company, adopted a new business plan leveraging technology for insurance distribution and acquired 1505 Capital LLC for advisory services - Company formed in 2003 as a financial services company, operating through American Life & Security Corp[123](index=123&type=chunk) - Expects to continue incurring operating losses until American Life achieves sufficient premium volume from in-force life insurance policies[124](index=124&type=chunk) - New business plan involves leveraging technology to distribute insurance products through Independent Marketing Organizations (IMOs)[127](index=127&type=chunk) - Acquired **51%** ownership in 1505 Capital LLC on April 2, 2019, to provide financial and investment advisory services[125](index=125&type=chunk) [Critical Accounting Policies and Estimates](index=30&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Detailed critical accounting policies and estimates are referenced in the company's 2018 Form 10-K - Readers are referred to the 2018 Form 10-K for a detailed discussion of critical accounting policies and estimates[126](index=126&type=chunk) [Consolidated Results of Operations](index=30&type=section&id=Consolidated%20Results%20of%20Operations) Net loss from continuing operations increased due to higher operating expenses and lower premiums, partially offset by reinsurance gain amortization, with MYGA product income deferred - Net loss from continuing operations increased due to decreased premiums and investment income, and increased operating expenses for new technology and product development[131](index=131&type=chunk) | Revenue Component | 3 months ended March 31, 2019 ($) | 3 months ended March 31, 2018 ($) | Change (Absolute) ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Insurance premiums | $(2,479) | $6,236 | $(8,715) | -139.7% | | Investment income, net of expenses | $190,995 | $203,461 | $(12,466) | -6.1% | | Amortization of deferred gain on reinsurance | $806,047 | $12,094 | $793,953 | 6565.0% | | Fee income and other revenues | $15,540 | $26,240 | $(10,700) | -40.8% | | Expense Component | 3 months ended March 31, 2019 ($) | 3 months ended March 31, 2018 ($) | Change (Absolute) ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Salaries and benefits | $539,449 | $482,716 | $56,733 | 11.8% | | Other operating expenses | $1,934,990 | $408,130 | $1,526,860 | 374.1% | - MYGA product sales generated meaningful premium volume, but income was deferred to deposit-type liabilities[134](index=134&type=chunk) [Investments (MD&A)](index=33&type=section&id=Investments%20(MD%26A)) Investment philosophy focuses on investment-grade debt securities and policy loans, with fixed maturities comprising 86.8% of total invested assets, mostly rated 'A' or 'BBB' - Investment philosophy emphasizes investment-grade debt securities and policy loans, with a modified strategy to purchase larger position securities with increased yields and future investment in mortgage loans[146](index=146&type=chunk) | Investment Category | Carrying Value (March 31, 2019) ($) | Percent of Total | | :--- | :--- | :--- | | Total Fixed Maturity Securities | $25,289,696 | **86.8%** | | Cash and cash equivalents | $3,814,539 | 13.1% | | Policy loans | $43,110 | 0.1% | | Total Invested Assets | $29,147,345 | 100.0% | | Credit Rating | Carrying Value (March 31, 2019) ($) | Percent | | :--- | :--- | :--- | | Total Investment Grade | $25,135,616 | **99.4%** | | BBB | $12,668,085 | 50.1% | | A | $7,787,458 | 30.8% | - No other-than-temporary impairments were deemed necessary for securities in an unrealized loss position, as management intends to hold them until recovery or maturity[71](index=71&type=chunk) [Market Risks of Financial Instruments](index=34&type=section&id=Market%20Risks%20of%20Financial%20Instruments) Interest rate and credit risks are primary market risks, mitigated by staggering maturities and diversifying investments across industries and issuers - Primary market risks affecting the investment portfolio are interest rate risk and credit risk[150](index=150&type=chunk) - Interest rate risk is mitigated by staggering maturities of fixed maturity investments and maintaining sufficient liquidity[151](index=151&type=chunk) - Credit risk is managed through diversification of investments across many corporations and industries, and limits on holdings in any particular issuer[152](index=152&type=chunk) [Liquidity and Capital Resources](index=34&type=section&id=Liquidity%20and%20Capital%20Resources) Sufficient cash and cash equivalents are available, supported by a strong RBC ratio, with financing activities from MYGA products driving cash inflows - Cash and cash equivalents of **$3,814,539** as of March 31, 2019, are expected to be sufficient to fund operations through December 31, 2019[153](index=153&type=chunk) | Metric | Value (%) | | :--- | :--- | | Risk-Based Capital (RBC) at Dec 31, 2018 | **5,480%** | | Cash Flow Activity (3 months ended March 31, 2019) | Amount ($) | | :--- | :--- | | Net cash used by operating activities | $(249,444) | | Net cash used for investing activities | $(7,089,222) | | Net cash provided by financing activities | $8,320,638 | [Impact of Inflation](index=35&type=section&id=Impact%20of%20Inflation) Inflation impacts premiums, losses, and investment returns, with the company attempting to anticipate effects in premium setting, absorbing unrecoverable costs - Inflation affects insurance premiums, losses, and investment returns[158](index=158&type=chunk) - Company attempts to anticipate inflation in premium setting; unrecoverable costs due to competitive reasons would be absorbed[158](index=158&type=chunk) [Off-Balance Sheet Arrangements](index=35&type=section&id=Off-Balance%20Sheet%20Arrangements) The company has no material off-balance sheet arrangements impacting its financial condition or operations - The company has no material off-balance sheet arrangements[159](index=159&type=chunk) [Contractual Obligations](index=35&type=section&id=Contractual%20Obligations) As a smaller reporting company, the company is not required to provide a table of contractual obligations - As a "smaller reporting company," the company is not required to provide a table of contractual obligations[160](index=160&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=35&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, the company is not required to provide market risk disclosures - As a "smaller reporting company," the company is not required to provide disclosures about market risk[161](index=161&type=chunk) [Item 4. Controls and Procedures](index=35&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and internal controls were ineffective due to material weaknesses, with remediation efforts underway including auditor meetings and consultant engagement - Disclosure controls and procedures, and related internal controls over financial reporting, were not effective as of December 31, 2018[163](index=163&type=chunk) - Material weaknesses identified related to timeliness of obtaining and assimilating information and complex/non-routine transactions[164](index=164&type=chunk) - Remediation steps include timely auditor meetings, enterprise risk management, auditing advisors for complex transactions, and consultants for control strengthening[164](index=164&type=chunk) [PART II – OTHER INFORMATION](index=36&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) This part contains other required information, including legal proceedings, risk factors, sales of equity, defaults, and exhibits [Item 1. Legal Proceedings](index=36&type=section&id=Item%201.%20Legal%20Proceedings) No material legal proceedings or claims are expected to affect the company's financial position or results of operations - No material legal proceedings or claims are expected to affect financial position or results of operations[166](index=166&type=chunk) [Item 1A. Risk Factors](index=36&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors from the 2018 Annual Report on Form 10-K - No material changes to risk factors from the 2018 Form 10-K[167](index=167&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=36&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This item is not applicable for the reporting period - This item is not applicable[168](index=168&type=chunk) [Item 3. Defaults Upon Senior Securities](index=36&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities are reported for the period - No defaults upon senior securities[169](index=169&type=chunk) [Item 4. Mine Safety Disclosures](index=36&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable for the reporting period - This item is not applicable[170](index=170&type=chunk) [Item 5. Other Information](index=36&type=section&id=Item%205.%20Other%20Information) No other information is reported for the period - No other information to report[171](index=171&type=chunk) [Item 6. Exhibits](index=37&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including certifications and XBRL documents - Exhibits include certifications (Sarbanes-Oxley Act Sections 302 and 906) and XBRL documents[173](index=173&type=chunk) [Signatures](index=38&type=section&id=Signatures) The report is signed by A. Michael Salem, Chief Executive Officer, on May 23, 2019 - Report signed by A. Michael Salem, Chief Executive Officer, on May 23, 2019[176](index=176&type=chunk)

(Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K For the fiscal year ended December 31, 2018 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 COMMISSION FILE NUMBER 000-10685 Midwest Holding Inc. (Exact name of registrant as specified in its charter) (State or other jurisdiction of (I.R.S. Employer incorporation or o ...