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 ...