Ramoil Management Ltd 10KSB For12/31/98

Filed On 5/18/99 SEC File 33-12507-NY AccessionNumber950117-99-1105

Annual Report -- Small Business Form 10-KSB
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10KSB       American Corporate Investors, Inc. 10-Ksb             31    137K 

Document Table of Contents

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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 AND EXCHANGE ACT OF 1934         

 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998

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

FOR THE TRANSITION PERIOD FROM _______ TO __________

COMMISSION FILE NUMBER: 33-1507-NY

 AMERICAN CORPORATE INVESTORS,INC.
(Name Of Small Business Issuer In Its Charter)

                                                                 Download Table
                                                                               
        Delaware                                           13-3437739          
(State Or Other Jurisdiction Of Incorporation         (IRS Employer Ident. No.)
     or Organization)                                                          

2424 North Federal Highway, Suite 350, Boca Raton, FL            33431         
(Address Of Principal Executive Offices)                         (Zip Code)    

Issuer's Telephone Number: (561) 338-5611                                       

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

                                                                 Download Table
                                                                                
 Title of each class  Name of Exchange on which registered                      

 Common               5,643,017 Shares Outstanding as of the date of this Report
(Title Of Class)                                                                

Check whether the issuer (1) 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 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       No X                                                            
---      ---                                                  

Check if there is no disclosure of delinquent filers in response to Item 405 of 
Regulation SB is not contained in this form, and no disclosure will 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-KSB
or any amendment to this Form 10-KSB [ ]                                        
---   

State the issuer's revenues for its most recent fiscal year.  $1,121,619        

State the aggregate market value of the voting stock held by non-affiliates     
computed by reference to the price at which the stock was sold, or the average  
bid and asked price of such stock, as of a specified date within the past 60    
days. As of May 10, 1999, the value of such stock was: $24,990,980.             

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 FORM 10-KSB

AMERICAN CORPORATE INVESTORS, INC.
 DECEMBER 31, 1998

PART I                                                                          

ITEM 1.  BUSINESS                                                               

Shortly after the acquisition of Ramoil, Registrant acquired Ramoil Engineering,
S.p.A. ("Engineering"), a company that had been principally owned by the same   
shareholders as Ramoil. Due to certain aspects of applicable Italian law        
relating to the corporate structure of Engineering and to the transfer of       
ownership thereof, the acquisition of Engineering was completed in a manner     
which constituted Engineering as a wholly owned subsidiary of Ramoil, which is a
wholly owned subsidiary of Registrant.                                          

Engineering's principal business involves the manufacture and sale of commercial
furniture and aluminium frames for windows, doors and other uses. Following the 
termination of the international trade operations of Ramoil in late 1996,       
Engineering became, and currently remains, the only source of revenues for      
Registrant. At the same time, Engineering terminated sales of its products in   
Russia, an event that reduced Engineering's operations by 90%. The balance of   
Engineering's business was with various European and Middle Eastern entities and
continues today.                                                                

During fiscal 1997, management completely changed the nature of Ramoil's        
business operations. Following the termination of its business operations in    
Russia, management decided to concentrate on establishing a new business plan   
centered around operations in the Middle East and in the United Arab Emirates   
(UAE) in particular. Pursuant to local regulations any foreign corporation that 
desires to engage in business in the UAE is required to have a local sponsor.   
Through the business contacts of senior management, in early 1997 Registrant    
entered into a sponsorship agreement with Sheikh Hazza Bin Zayed Al-Nahyan,     
Chairman of National Security for the UAE and Chairman of Saadiyat Free Zone.   
Pursuant to the Sponsorship Agreement, Registrant has been introduced to various
projects throughout the UAE. Under this Agreement, the Sponsor will assist      
Registrant with all aspects of doing business in the UAE including assistance in
compliance with local registration requirements under UAE law. Although not     
obligated to do so, the Company's sponsor has provided Registrant with virtually
all of the business opportunities presently being developed. In consideration of
making these projects available to Registrant, Registrant is obligated to pay a 
base annual fee to the Sponsor and a percentage commission on all business      
generated by projects introduced.                                               

Having secured the required sponsorship, in March 1997 Registrant registered    
Ramoil under the laws of the UAE and opened an office in Abu Dhabi. To date,    
Registrant has secured several contracts for diverse projects in the UAE.       
Following is a brief discussion of each of the projects undertaken by Ramoil:   

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A.  HOTEL AND OFFICE COMPLEX. Ramoil has entered into a contract to serve as    
   Developer for the construction of a hotel and office complex in the UAE. To
   date, initial architectural plans have been completed and negotiations with
several international hotel management companies are currently ongoing. 
Management expects to conclude an agreement with one of the interested  
parties within the first half of 1999. Any such agreement would provide 
    experienced hotel management and a hotel operator with a proven track record
for the hotel portion of this project upon completion.                  

 In 1998, Ramoil entered into an agreement with the owner of the land site
   whereby Ramoil received a concession to the land site to be developed for a
   twenty-year period. The concession right includes the right to mortgage the
   land but not the right to sell the land. The fair market value of this land
    site at December 31, 1998 is $36,800,000. The agreement provides that Ramoil
will retain title to the assets developed on this land site during the  
  concession period. At the end of the twenty-year concession period, Ramoil
has agreed to pass the title of all assets and improvements on the land 
developed to the original owner.                                        

 All net profits from the project will be divided 80% to Ramoil and 20% to
the original landowner. Further, in February 1998, Ramoil successfully  
negotiated an extension of the original 20-year concession term through 
 April 30, 2019. Current estimates indicate that this project will require
approximately $80 Million to complete. To date, Ramoil has invested     
 approximately $2 Million in this project. Current estimates indicate that
    this project will require approximately $80.5 million to complete. As of the
date of this report, construction has not begun on this project.        

B.  AL AIN APARTMENT PROJECT. This project is for the construction of a         
 residential housing complex including 83 apartments and villa units in Al
Ain City in the UAE. Under the original contract signed by Ramoil, the  
  Company will be required to provide financing for a total of approximately
$11.5 Million, that was to be returned to it with interest from the     
   operating revenues of the project. Recently, at the request of the Company,
 the contract for this project was terminated and the Company was released
from its obligations thereunder. To date, Ramoil, through loans from Mr.
Radulovic, its CEO and principal shareholder, had provided funding of   
approximately $2.2 Million. As part of the termination of the Company's 
  participation in this project, the amount previously funded by the Company
 will be repaid upon completion of the project or, alternatively, prior to
December 31, 2001. However, no specific repayment schedule has been     
committed to.                                                           

C.  CITY MIX CONCRETE PLANT PROJECT. City Mix Concrete, Inc. ("CMIX") is a UAE  
  corporation registered for the purpose of constructing a concrete plant in
    the UAE. Ramoil has entered into an agreement that will permit it to use the
 CMIX license to construct the concrete plant and sell concrete in the UAE
  for a 20year period. All equipment including the modular plant itself will
  remain the property of Registrant at the conclusion of the license period.
    Further, the City Mix License is transferable by Registrant to a third party
in its discretion.                                                      

Under this agreement Ramoil will be obligated to pay a royalty for this 
 license equal to 12% of the net profits generated from this operation. At
the end of the license period all interest in any existing contract to  
supply concrete will revert to CMIX and Ramoil will have no further     

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    interest. Management has begun negotiations for an extension of this 20-year
  term. However, as of the date hereof, no agreement has been reached and no
assurances can be given that any extension will be granted.             

Following the grant of this license in 1997, Ramoil purchased a modular 
  concrete plant that was shipped to the UAE for assembly. As of the date of
this report, Registrant, through Engineering, has purchased the required
   mixers and trucks that currently await shipment to the UAE. Assembly of the
   plant has been ongoing and management projects that the plant will be fully
operational by summer, 1999. As of the date of this report, through the 
   efforts of the Company's sponsor, CMIX has received preliminary approval as
the exclusive concrete supplier for a new port and free trade zone      
development project in the UAE. Of course, finalizing this contract must
await completion of the plant to be certain that CMIX will be able to   
fulfill its obligations thereunder.                                     

As of December 31, 1998, the Company has invested $3,968,465 towards the
construction and assembly of this plant detailed as follows:            

                                                                 Download Table
                                                      
  Plant parts and assembly                  $1,300,875
  Trucks and equipment                       2,029,873
  Engineering costs                            637,717
                                             ---------

  Total project investment                  $3,968,465

    Of the amount invested in this project by Registrant, $2,948,315 represented
loans to Registrant by Trinal, Inc., a privately held corporation       
   principally owned and controlled by Mr. Taflevich, the Company's President,
and by Cristal Ball Inc., an affiliated company of Mr. Taflevich.       

    When completed the concrete plant will have a capacity of 3,000 cubic meters
of concrete per day                                                     

D.  D. SAADIYAT FREE TRADE ZONE. The UAE is currently completing plans for the  
   construction of a new port facility and free trade zone. This project, know
as the Saadiyat Free Trade Zone Authority ("SFTZA") is scheduled to be  
constructed on Saadiyat Island in Abu Dhabi and is estimated to require 
  approximately $3.3 Billion to complete. Final approval for the project was
  given by the UAE Executive Council earlier this year. This constitutes the
final consent in the approval process for this project and the Saadiyat 
    Project Development Company will now proceed with plans to raise the capital
required for construction, which is planned to be completed through a   
  combination of a public and institutional offering in the UAE and a global
offering of shares to institutional and corporate investors. Through the
efforts of its Sponsor, Registrant has been offered an opportunity to   
purchase shares of SFTZA as a "founder" along with six other major      
corporations. However, in order to purchase the shares offered in the   
project, Registrant will be required to invest $165 Million. Although   
Registrant must either pay for the shares or forfeit its right within 60
  days following the formal grant of this option (which is expected to occur
within the next 30 days). At present, Registrant has no viable means of 
paying for the shares in this project. Although negotiations            

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    with various financial sources, both institutional and private, are ongoing,
there can be no assurance that Registrant will be able to participate in
this investment. In fact, at the present time it is highly unlikely that
Registrant will be able to meet the purchase deadline and there is no   
 indication that any extensions will be granted. The share purchase option
   was originally schedule to expire on May 15, 1999. However, the Company has
received oral notification that that this deadline will be extended,    
   although no written confirmation of this has been received. At present, the
   status of this option is uncertain and there can be no assurance that, even
   if the Company were able to raise the necessary funding, which at this time
    appears unlikely without the participation of a major financing source, that
the Company would still be eligible to purchase the shares.             

The foregoing summarizes the business opportunities that Ramoil has been able to
secure though the efforts of its sponsor in the UAE. However, it must be        
remembered that the foregoing projects each require a significant capital       
commitment by the Company. Further, in some cases, Ramoil will need to provide  
specific funds within restrictive time periods or suffer a loss of both the     
opportunity and of any previous investment made in such project. At present, it 
seems highly unlikely that Ramoil will be able to meet all of its obligations,  
particularly for providing funding, in connection with all of the foregoing     
projects. In such event the Company will lose the related opportunity. Further, 
it is possible that Ramoil's failure to meet its commitments under the foregoing
projects will cause its Sponsor to either terminate the sponsorship agreement or
to cease providing available business opportunities to Registrant in the future.
In such event, it is highly likely that Registrant will lose all or a           
significant portion of its investment in the foregoing projects due to the      
unavailability of needed financing.                                             

In evaluating the Company's ability to establish viable commercial operations,  
it must be remembered that, at present, the only revenue generating operations  
are those of Engineering. However, in terms of the future growth of this segment
of the Company's operations, great emphasis has been placed upon Engineering's  
participation in the various projects in the UAE. As with the operations of     
Ramoil, should the foregoing project not proceed, or if Ramoil is unable to meet
its obligations with respect to such projects, or if Ramoil loses the support of
its sponsor, it is highly likely that Engineering will also lose any expected   
participation in those projects.                                                

In September, 1998, Registrant and Mr. Radulovic reach an agreement whereby Mr. 
Radulovic agreed to convert certain of his loans to Registrant, in the principal
amount of $520,902, into shares of common stock at the rate of $3.00 per Share  
and received 173,634 Shares. In December 1998, Mr. Radulovic agreed to convert  
an additional $815,000 in loans made to support the Company's operations in Abu 
Dhabi also at the rate of $3.00 per Share and received an additional 271,666    
Shares. The price per share was negotiated based upon 80% of the average closing
price for Registrant's shares during September 1998, when the original agreement
to convert his loans to equity was reached. All of the Shares received by Mr.   
Radulovic were "restricted securities" as defined under the Securities Act of   
1933, as amended (the "Act").                                                   

Also in September 1998, both Trinal and Cristal Ball agreed to convert their    
outstanding loans in the principal amount of $2,948,315 to shares of common     
stock at the rate of $3.00 per Share. Consequently, these companies received, in
the aggregate, 982,771 Shares of Registrant's                                   

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common stock all of which Shares were also "restricted securities" as that term 
is defined under the Act. See, "SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS 
AND MANAGEMENT."                                                                

ITEM 2.  PROPERTIES.                                                            

The Company's principal corporate offices are located at 2424 North Federal     
Highway, Suite 350, Boca Raton Florida, where it occupies approximately 5,000   
square feet of office space. This lease expires July 31, 2000, and provides for 
a current monthly rental of approximately $3,000 with annual increases through  
the end of the lease term.                                                      

In connection with its operations in the UAE, the Company opened an office in   
Abu Dhabi, UAE, pursuant to a lease with an unaffiliated third party, where it  
occupies approximately 4,000 square feet of office space.                       

The Company believes it's present facilities will be adequate for its purposes  
for the foreseeable future and does not anticipate the need for additional      
office or operating facilities.                                                 

ITEM 3.  LEGAL PROCEEDINGS.                                                     

There are several currently pending actions against Registrant. These include   
the following matters:                                                          

 A.     In May 1996 a legal action was filed against the Company and its
           principal shareholder. In this suit, a Russian oil company, Lukoil,
        alleges that it is owed $12.5 Million from a formerly affiliated
         entity of the Company resulting from a failure to comply with the
           terms of an oil-trading contract. Although the original state court
          action was voluntarily dismissed, the suit was later instituted in
        Federal District court. The Company intends to vigorously defend
         against the claims being made. Currently, the Company has filed a
   motion to dismiss this action. This motion has not yet been
scheduled for a hearing.                                

     B.     Also in May 1998, Lukoil also filed a suit in Federal District Court
            for the purpose of enforcement of a prior arbitration award obtained
       against an affiliated company of Registrant. This award, in the
 amount of approximately $12,162,000 was obtained from the
    International Commercial Arbitration Court of the Chamber of
         Commerce and Industry of the Russian Federation in Moscow. The US
          suit seeks to confirm the award against the affiliated company and
  to recover the amount awarded from that company as well as
          Registrant and Mr. Radulovic personally. The two Lukoil cases have
            now been consolidated in the Federal Court action. As of the date of
   this Report, Registrant has not entered into any settlement
        discussions and counsel for the Registrant defending these suits
        cannot provide an evaluation of the likelihood of success by the
      Company in this matter. The Company has also filed a motion to
dismiss this action. No decision has yet been received. 

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   C.      In August 1996, suit was filed against Registrant and Mr. Radulovic
     claiming damages of approximately $3.3 Million arising out of
         contract it had with another affiliated company of Mr. Radulovic.
           Although the Company is vigorously defending this suit, at present,
      Registrant has not entered into any settlement discussions and
          counsel for the Registrant defending these suits cannot provide an
      evaluation of the likelihood of success by the Company in this
matter.                                                 

D.      There are two other matters, both involving claims against      
      affiliated companies of Mr. Radulovic which, in the aggregate,
         involve less than $200,000. Settlement discussions for both these
            claims are currently in progress and, in management's opinion, there
      will not be any material adverse impact upon Registrant or its
operations.                                             

The Company knows of no other litigation pending, threatened or contemplated, or
unsatisfied judgements against it. The Company knows of no legal action pending 
or threatened or judgements entered against any officers or directors of the    
Company in their capacity as such.                                              

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                     

None during the year ended December 31, 1998.                   

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER       
MATTERS                                                         

The principal market on which the Company's securities are traded is the        
over-the-counter market. Since July, 1996 the Company's securities have been    
trading on the "Bulletin Board" electronic quotation system under the symbol    
"ACIZ." Prior to that time there had been only sporadic trading in the Company's
securities. The following table sets forth for the periods indicated the range  
of high and low bid quotations for the Company's Common Stock.                  

                                                                 Download Table


                   PERIOD                                HIGH          LOW     

-------------------------------------------------------------------------------
                                                                               
       Quarter ended September 30, 1996                  $5.25         $5.25   
       Quarter ended December 31, 1996                   $5.625        $4.825  
       Quarter ended March 31, 1997                      $5.25         $5.00   
       Quarter ended June 30, 1997                       $6.125        $5.00   
       Quarter ended September 30, 1997                  $5.625        $3.625  
       Quarter ended December 31, 1997                   $4.875        $3.875  
       Quarter ended March 31, 1998                      $5.00         $4.875  
       Quarter ended June 30, 1998                       $6.25         $5.00   
       Quarter ended September 30, 1998                  $5.625        $3.875  
       Quarter ended December 31, 1998                   $10.00        $9.875  
       Quarter ended March 31, 1998                      $10.25        $10.00  

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On May 10,1999 the reported bid price (and most recent sale price) for the      
Company's Common Stock was $10.00 per share; there were 473 record holders of   
the Company's Shares; and there were six (6) market makers for the Company's    
securities.                                                                     

The Company has not paid any dividends and there are presently no plans to pay  
any such dividends in the foreseeable future. The declaration and payment of    
dividends in the future will be determined by the Board of Directors in light of
conditions then existing, including earning, financial condition, capital       
requirements and other factors. There are no contractual restrictions on the    
Company's present or future ability to pay dividends. Further, there are no     
restrictions on any of the Company's subsidiaries which would, in the future,   
adversely affect the Company's ability to pay dividends to its shareholders.    

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ITEM 6. SELECTED FINANCIAL DATA:                                                

                                                                 Download Table

SUMMARY BALANCE SHEET DATA:        YEAR ENDED DECEMBER 31    
                                   ----------------------    
                                     1998          1997      
                                     ----          -----     
                                                             
Total Assets                      $9,700,684      $6,098,991 

Total Current Assets                 902,251       2,471,731 

Total Current Liabilities          1,722,313       4,407,391 

Stockholders Equity                6,417,396       1,208,169 

Accumulated Deficit               (6,022,515)     (5,031,472)


SUMMARY EARNINGS DATA:             YEAR ENDED DECEMBER 31    
                                   ----------------------    
                                     1998           1997     
                                     ----           ----     
                                                             
Total Revenues                    $1,240,645      $1,121,619 

Cost of Sales                        428,993         635,559 

Selling, General & Administrative                            
Expenses                           1,065,563       2,684,108 

Depreciation                         163,990         170,599 

Sponsorship Fee                      149,774          52,078 

Interest Expense                    (130,006)       (139,804)

Interest Income                       93,869         166,654 

Gain (Loss) on Disposal of Assets      5,162           8,885 

Other Income                          63,621             -0- 

Bad Debt expense                    (445,660)       (239,582)

Income (Loss) Before Taxes          (980,689)     (2,624,571)

Income Tax (Benefit)                 (10,354)             -0-

Net Income (Loss)                   (991,044)     (2,624,571)

Earnings per Share                    ($0.18)         ($0.58)
-------------------------------------------------------------
THE COMPANY'S FISCAL YEAR ENDS DECEMBER 31 OF EACH YEAR.     

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL                       
CONDITION AND RESULTS OF OPERATIONS                             

I.  RESULTS OF OPERATIONS                                                       

During fiscal 1998, ended December 31, 1998, the Company's gross sales were only
slightly higher than in 1997 ($1,240,645 as compared to $1,121,619) but         
continued dramatically lower than in 1996 when the Company's revenues totaled   
$6,202,012. This reflects the termination of a prior operations in Russia and   
Eastern Europe by Ramoil and Engineering and the termination of a consulting    
agreement with an affiliated company at the end of 1996. As such, the total     
sales revenues in fiscal 1997 represented sales solely by Engineering. Total    
cost of revenues during fiscal 1997 were $635,559, as compared to $3,224,158 for
fiscal 1996. As a result, the Company realized a net operating loss of          
$2,420,725 during fiscal 1997, as compared to a net operating gain of $159,280  
in fiscal 1996. As discussed earlier, it must be remembered that in September   
1996 Ramoil discontinued all international trade operations, a factor that had a
materially adverse impact upon revenues in fiscal 1997. In addition, in         
September 1996, Engineering also discontinued all sales of products in Russia, a
factor that resulted in a drop in sales of more than $4.5 Million between fiscal
1996 and 1997.                                                                  

The final balances of receivables from entities of the former Soviet Union and  
eastern European countries, amounting to $445,660, have been written off in 1998
to uncollectible bad debt expense. Although the Company still continues to seek 
restitution in the appropriate governing bodies of the regions mentioned,       
however, the outcome of these efforts cannot be estimated.                      

After selling, general and administrative expenses, depreciation, a loss on the 
sale of fixed assets, interest income and expenses, and provision for taxes, the
Company realized a net operating loss of ($2,624,571, or ($0.58) per share in   
fiscal 1997, as compared to a profit of $42,228, or $0.01 per share, for fiscal 
1996.                                                                           

During fiscal 1997, selling, general and administrative expenses remained       
virtually unchanged at $2,684,108, as compared to $2,665,296 for fiscal 1996.   
When expressed as a percentage of overall revenues, selling, general and        
administrative expenses represented almost 240% of total revenues for fiscal    
1997 (compared to just under 43% in fiscal 1996). Again, this resulted from the 
termination of trading activities in the third quarter of fiscal 1996, which    
dramatically reduced revenues, with the increased costs associated with Ramoil's
commitments to various projects in the UAE. Management projects that the costs  
directly related to Ramoil's start-up operations in the UAE will continue to    
escalate for the foreseeable future, particularly as it meets its funding       
commitments under various project contracts during the period prior to realizing
any revenues from those efforts.                                                

The gross profit percentage for 1998 was 81% compared with 47% for the similar  
period in 1997. This increase is due to the fact that revenues in 1998 were     
mostly engineering services as opposed to sales of construction goods.          
Engineering services accounted for 83% of total revenues in 1998 as opposed to  
40% for 1997. The result of this is to reduce the cost of goods sold and        
therefore increase the gross profit percentage.                                 

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Total operating expenses and general administration costs are 50% lower for 1998
than for the comparable period in 1997. This is primarily due to the significant
cuts made by Registrant as part of its restructuring plan implemented in 1997.  
Ramoil has cut its workforce from 42 employees to 12 employees during fiscal    
years 1997 and 1998, respectively. The resultant savings associated with this   
work force cut has served to significantly reduce the Company's overall overhead
costs.                                                                          

Interest revenues are comprised of interest imputed on the receivable balance   
owed to the Company by an affiliate owned by the majority shareholder. Interest 
is imputed at the prime-lending rate. Interest revenues decreased in 1998 due to
a decrease in the prime-lending rate during fiscal 1998 and to the overall      
decrease in the balance due from affiliates.                                    

The Company opened a branch office in Abu Dhabi, United Arab Emirates in        
September 1996 in order to conduct business and explore new markets in the      
region. The Company entered into a sponsorship agreement as discussed above.    
Under its terms, the sponsor provides consulting and mediation services in the  
emerging markets of Abu Dhabi. The salaries and overhead of the branch office   
are funded by the Company on a monthly basis. The total cost of the Abu Dhabi   
branch office was $324,000 as compared to $198,000 for fiscal 1997.             

Sponsorship fees for fiscal 1998 increased 288% over fiscal 1997 as a result of 
the addition of a sponsorship agreement entered into by CMIX.                   

In management's opinion, the first project from which it anticipates revenues is
the Citimix concrete plant now being completed. This plant is scheduled to be   
completed in the second half of 1999, with revenues expected to be realized     
shortly thereafter. However, no assurance can be given that revenues, if any,   
realized from this concrete plant will be adequate to offset the continued high 
cost of the other projects being undertaken by Ramoil in the UAE.               

Management believes that until such time as it can realize significant revenues 
from its newly initiated operations in the UAE, if ever, the Company will       
continue to reflect net operating losses. In fact, it is likely that, even if   
revenues are derived from the concrete plant during fiscal 1999, the Company as 
a whole will continue to operate at a loss. Furthermore, should its efforts to  
establish commercially viable operations in the UAE not be successful it is     
likely that the Company will be unable to continue as a going concern.          

III.  DISCUSSION OF FINANCIAL CONDITION                                         

On a consolidated basis, as of December 31, 1998 the Company had total assets of
$9,700,684 with total liabilities of $3,283,288 (compared with $6,098,981 and   
$4,890,822 respectively for December 31, 1997). Of the Company's assets at      
December 31, 1998, cash and cash equivalent accounted for $5,681 and $556,972   
represents trade accounts receivable (compared to $252,379 and $1,431,575       
respectively at December 31, 1997). The decrease in the Company's current assets
at December 31, 1998 was principally due to the decreases in cash, inventory,   
accounts receivable, including trade and other accounts. However, the overall   
increase in total assets resulted, for the most part, from significant increases
in long term notes receivable (representing the Company's funding in the Al     

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Ain Project which is to be repaid upon completion), property, plant and         
equipment (representing the Company's investment in the City Mix Project). In   
addition, at December 31, 1998, the Company no longer reflected any liability   
for deferred sales revenue and showed a significant decrease in accounts payable
and accrued expenses resulting from the significant decrease in overall business
operations.                                                                     

At December 31, 1998, the Company's total stockholders' equity increased        
substantially to $6,417,396, as compared to $1,208,169 at December 31, 1997.    
The principal reasons for this significant increase was the increase in         
contributed capital in excess of stated value which resulted from the exercise  
of certain previously granted stock purchase warrants by a consultant of the    
Company. This was sufficient to offset the negative impact of the continuing    
losses from operations, which resulted in the Company's accumulated deficit     
increasing to $6,022,515 as compared to $5,031,472 at the end of 1997. The      
principal source of funds for the Company's operations have been, and continue  
to be, revenues earned by Engineering and the continued financial support of the
Company's major shareholder, both of which factors are essential to the Company 
ability to continue operations.                                                 

During the fiscal year ending December 31, 1999, the Company will face          
substantial expenditures in connection with the projects now committed to in the
UAE. In addition, the Company will require approximately $165 Million in order  
to pay for the shares of the Saadyiat Free Trade Zone Authority. This payment   
must be made within 60 days following the official grant of option to purchase  
these shares, or the Company will lose its right to acquire such shares. At     
present, management has not identified any funding source able or willing to    
assist the Company in meeting either of these commitments.                      

Based upon available cash on hand and expected revenues from the operations of  
Engineering, management is of the opinion that it will not have adequate        
available funds to meet its anticipated capital expenditures and cash needs for 
fiscal 1999. Therefore, unless a funding source is identified and appropriate   
funding agreements reached, of which there can be no assurance, it is unlikely  
that the Company will be able to meet any of its funding commitments for the    
projects now under way in the UAE, except, in management's opinion, the funding 
needs for the City Mix Project. However, it is uncertain as to what effect a    
default in any of its funding commitments in the UAE will have. It is possible  
that the Company's sponsor will terminate his sponsorship and support of the    
Company, in which event the Company will no longer be able to conduct any       
operations in the UAE and may suffer a loss of all funds invested in those      
project to date. In such an event, it is highly unlikely that the Company will  
able to re-establish any commercial operations within the forseeable future.    

IV. TRENDS AFFECTING LIQUIDITY, CAPITAL RESOURCES AND OPERATIONS                

Over the past decade, economic conditions worldwide have favored the development
of business oriented projects designed to meet the needs of developing business 
and financial interests in many developing areas. Among the fastest growing     
areas in the world is the Middle East. Combining the great wealth that come from
extensive oil-related interests with diminished threats of war and terrorist    
activities, the UAE has emerged as a leader in this region. Management believes 
this trend, coupled with the support of the Company's sponsor, who himself is a 
recognized leader in the                                                        

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region, has situated the Company in a position to participate in the growth of  
the UAE. Provided the Company can meet its financial obligations under the      
various projects discussed above, management believes it can be an integral part
of the growth being experienced in the UAE and that the benefits to the Company 
will be a major factor in its growth over the foreseeable future.               

With the collapse of traditional political and ideological barriers, the demand 
for products from all parts of the world has increased perceptibly with many    
developing and third world nations now looking for products from many different 
countries. This has been particularly true of countries with "soft" currencies  
(i.e. currencies not readily exchangeable into established currencies such as   
British pounds, US dollars, etc.), which at present are unable to pay for their 
purchases in US dollars. Management believes that the greatest demand for all   
kinds of foreign products will come from these new developing third world       
countries over the foreseeable future. This is but one factor that favors the   
development of a free trade zone in the Middle East, such as the Saadiyat Free  
Trade Zone proposed by the UAE.                                                 

Management knows of no other trends reasonably expected to have a material      
impact upon the Company's operations or liquidity in the foreseeable future.    

VI. INFLATION.                                                                  

During the past few years inflation worldwide has been relatively stable which, 
coupled with the relative strength of the economic conditions in the Middle     
East, including the UAE, discussed above, is expected to have a beneficial      
effect upon the Company's planned operations in the UAE. In management's        
opinion, these favorable conditions are expected to continue for the foreseeable
future and management does not anticipate that inflation will have an adverse   
impact upon its operations in the foreseeable future.                           

VII. FORWARD LOOKING STATEMENTS.                                                

Certain statements made in this report on Form 10-KSB as "forward looking"      
statements within the meaning of the Private Securities Litigation Reform Act of
1995. Such statements involve known and unknown risks, uncertainties, and other 
factors that may cause actual results, performance, or achievements of the      
Company to be materially different from any future results implied by such      
forward looking statements. Although the Company believes that the expectations 
reflected in such forward looking statements are based upon reasonable          
assumptions, the Company's actual results could differ materially from those set
in the forward looking statements. Certain factors that might cause such a      
difference might include: the securing of additional or the renewal of existing 
construction contracts, the growth of the market for the Company's services and 
products, the effect of European economic unification upon the Company's ability
to secure additional business, the ability of the Company to secure significant 
additional financing to meet the Company's actual and projected financing       
obligations of various projects it has entered into in the UAE.                 

VIII. YEAR 2000 COMPLIANCE.                                                     

The Year 2000 issue is the result of computer programs being written using two  
digits, rather than four to define the applicable year. Any of the Company's    
computer programs that have                                                     

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data-sensitive software may recognize a date using "00" as the year 1900 rather 
than the year 2000. This could result in a system failure or miscalculations    
causing disruptions of operations, including, among other things, a temporary   
inability to process transactions, send invoices, or engage in similar normal   
business activities.                                                            

Based upon an assessment made during fiscal 1998, the Company has begun to      
updated all versions of operations and financial software so that all of its    
systems will utilize dates beyond December 31, 1999 properly. In addition, the  
Company is evaluating its auxiliary computer application systems for Year 2000  
compliance, a process which is expected to be completed during the first half of
1999. The Company believes that the planned modifications and conversions will  
allow it to mitigate the Year 2000 issue.                                       

The Company also plans to initiate formal communications with all of its        
significant suppliers, financial institutions and major customers to determine  
the extent to which the Company may be vulnerable to any third parties' failure 
to remediate their own Year 2000 issues. The financial impact to the Company of 
bringing its equipment and systems into Year 2000 compliance is not anticipated 
to be material to its financial position or results of operations.              

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                            

                                                                 Download Table

FINANCIAL STATEMENTS:                                           REFERENCE:
---------------------                                           ----------
                                                                          
Independent Auditor's Report                                    F-1       

Consolidated Statement of Financial Condition                   F-2       

Consolidated Statement of Operations                            F-3       

Consolidated Statements of Cash Flows                           F-4       

Statement of Changes in Stockholders' Equity                    F-5       

Notes to Financial Statements                                   F-6 - F-9 

ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE                    

None.                                                                           

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DONAHUE ASSOCIATES, INC.                                                        
CERTIFIED PUBLIC ACCOUNTANTS                                                    
354 Main Street, Chatham, N.J.   07928                                  
Phone (973)635-2111 Fax: (973)635-0992                                  

 INDEPENDENT AUDITORS REPORT

The Shareholders,                                                               
American Corporate Investors, Inc.                                              

We have audited the accompanying balance sheet of American Corporate Investors, 
Inc. as of December 31, 1998 and as of December 31, 1997 and the related        
statements of income and change in owners' equity, and cash flows for the fiscal
years then ended. These financial statements are the responsibility of          
management. Our responsibility is to express an opinion on these financial      
statements based on our audit.                                                  

We conducted our audit 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 presented are free from        
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 the management, as well as evaluating the overall financial statement   
presentation. We believe that our audit provides 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 American Corporate Investors,  
Inc. as of December 31, 1998 and as of December 31, 1997 and the results of     
operations and cash flows for the fiscal year then ended in conformity with     
generally accepted accounting principles consistently applied.                  

Chatham, New Jersey                                                             
April 21, 1999                                                                  

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 AMERCIAN CORPORATE INVESTORS INC.
 CONSOLIDATED STATEMENT OF FINANCIAL CONDITION

                                                                 Download Table


                                                  December 31,  December 31,
                                                     1998           1997    

                                                                            
ASSETS                                                                      
Current assets:                                                             
     Cash in banks                               $    5,681     $  252,379  
     Trade accounts receivable                      556,972      1,431,575  
     Inventories (Note 2)                           250,175        364,556  
     Other accounts receivable                       89,423        423,221  
Total current assets                                902,251      2,471,731  

Other assets:                                                               
     Due from affiliates (Note 3)                   671,140      1,006,003  
     Taxes refunds receivable                       280,466        187,146  
     Other assets (Note 2)                          164,874        183,005  
     Note receivable (Note 4)                     2,000,000        409,000  
     Property, plant, and equipment                                         
       (net of accumulated depreciation)          5,439,647      1,583,911  
     Goodwill (net of accumulated amortization)     242,306        258,195  
Total assets                                     $9,700,684     $6,098,991  

LIABILITIES & OWNERS' EQUITY                                                
CURRENT LIABILITIES                                                         
      Accounts payable                            1,385,609      2,938,773  
      Deferred sales                                      0        723,527  
      Other liabilities                             336,704        745,091  
Total current liabilities                         1,722,313      4,407,391  

Long term liabilities:                                                      
      Equipment loans payable                     1,175,130        347,931  
      Pensions and benefits payable                 385,845        135,500  
Total liabilities                                 3,283,288      4,890,822  

Common stock, par value                                                     
$.0001 per share, 300,000,000                                               
 authorized, 5,643,017 issued                                               
and outstanding                                         564            372  
Contributed capital in excess                                               
of par value                                     12,396,495      6,126,970  
Cumulative translation                                                      
adjustment (Note 2)                                  42,852        112,299  
Accumulated deficit                              (6,022,515)    (5,031,472) 
Total liabilities & owners' equity               $9,700,684     $6,098,991  

PLEASE SEE THE ACCOMPANYING NOTES TO THESE FINANCIAL STATEMENTS.                

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 AMERICAN CORPORATE INVESTORS INC.
CONSOLIDATED STATEMENT OF OPERATIONS

                                                                 Download Table

                                                     December 31,   December 31,
                                                        1998            1997    
                                                                                
    Revenues:                                                                   
        Gross sales                                  $1,240,645     $1,121,619  
        Less cost of goods sold                        (428,993)      (635,559) 

                Net profit on sales                     811,652        486,060  

    Operating expenses:                                                         
            Salaries and overhead                       446,705      2,033,249  
            General administration                      618,858        650,859  
            Sponsorship fees                            149,774         52,078  
            Depreciation & amortization                 163,990        170,599  
  Total operating expenses                            1,379,327      2,906,785  

Net income (loss) before other                                                  
revenues & expenses                                    (567,675)    (2,420,725) 

Other revenues & expenses:                                                      
            Interest income                              93,869        166,654  
            Gain on fixed assets sold                     5,162          8,885  
            Other income                                 63,621              0  
            Bad debt expense (Note 6)                  (445,660)      (239,582) 
            Interest expense                           (130,006)      (139,804) 
Net income (loss) before provision for income taxes    (980,689)    (2,624,572) 

    Provision for income taxes                          (10,354)             0  
    Net income (loss)                                 ($991,044)   ($2,624,572) 

    Earnings per share:                                                         
         Basic                                            ($.18)         ($.58) 
         Diluted                                          ($.18)         ($.58) 

    Weighted average of common shares:                                          
         Basic                                        5,564,209      4,562,699  
         Diluted                                      5,564,209      4,562,699  

PLEASE SEE ACCOMPANYING NOTES TO THESE FINANCIAL STATEMENTS.                    

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 AMERICAN CORPORATE INVESTORS INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
 FOR THE YEAR ENDING DECEMBER 31, 1998

                                                                 Download Table
                                                                            
Cash flows from operating activities:                                       

        Net income (loss)                                         ($991,044)
        Adjustments to reconcile net loss to cash                           
          provided by operating activities;  add back                       
          depreciation & amortization                               163,990 
               Net cash provided (used) by operating activities    (827,054)

Cash flows from other operating activities:                                 
        Decrease in trade accounts receivable                       874,603 
        Decrease in other accounts receivable                       333,798 
        Decrease in ending inventories                              114,381 
        Decrease in receivables from affiliates                     334,863 
        Increase in taxes refunds receivable                        (93,320)
        Decrease in other assets                                     18,131 
        Decrease in accounts payable                             (1,553,164)
        Increase in notes receivable                             (1,591,000)
        Decrease in deferred sales revenue                         (723,527)
        Decrease in other liabilities                              (408,387)
        Increase in equipment loans payable                         827,199 
        Increase in pensions and benefits payable                   250,345 

        Net cash provided (used) by other operating activities   (2,443,132)

Cash flows from financing activities:                                       
        Issuance of common stock (Note 1)                            92,500 
        Sale of common stock warrants                               510,000 
        Shareholders' loans converted to common stock (Note 1)    5,667,217 
        Sale of vehicle                                              18,616 
        Purchase of plant & equipment (Note 6)                   (3,968,465)
        Capitalized costs on equipment purchase                     (51,764)
        Purchase of office equipment                                 (2,223)
        Change in cumulative translation adjustment (Note 2)        (69,447)

        Net cash provided (used) by financing activities          2,196,434 
Increase (decrease) in cash during 1998                            (246,698)

Cash balance at December 31, 1997                                   252,379 
Cash balance at December 31, 1998                                    $5,681 

PLEASE SEE ACCOMPANYING NOTES TO THESE FINANCIAL STATEMENTS.                    

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 AMERICAN CORPORATE INVESTORS INC.
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
 FOR THE YEAR ENDING DECEMBER 31, 1998

                                                         Enlarge/Download Table

                          COMMON      PAID IN   CUMULATIVE    RETAINED      TOTAL     
                           STOCK      CAPITAL    ADJUSTMENT   DEFICIT       CAPITAL   
                                                                                      
Balances at                                                                           
December 31, 1997          $372    $6,126,970    $  112,299  ($5,031,472)  $1,208,169 

Common stock                                                                          
warrants sold                         510,000                                 510,000 

Shareholders loans                                                                    
conversion                  188     5,667,029                               5,667,217 

Issuance of common stock      4        92,496                                  92,500 

Change in translation                                                                 
adjustment                            (69,447)                                (69,447)

Net income (loss)                    (991,044)                               (991,044)

Balance at                                                                            
December 31, 1998          $564   $12,396,495       $42,852  ($6,022,516)  $6,417,395 

              PLEASE SEE THE ACCOMPANYING NOTES TO THESE FINANCIAL STATEMENTS.

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AMERICAN CORPORATE INVESTORS, INC.
 NOTES TO THE FINANCIAL STATEMENTS
 DECEMBER 31, 1998

NOTE 1- GENERAL DESCRIPTION AND NATURE OF BUSINESS                              

OUTSTANDING COMMON STOCK

American Corporate Investors, Inc. (the Company) is a Delaware corporation      
organized on December 30, 1986 for the purpose of engaging in and acquiring     
profitable business opportunities in the United States and overseas. On June 10,
1996, the Company effected a 1-for-10 reverse split of its issued common stock  
reducing its outstanding common shares from 16,670,000 to 166,700.              
Simultaneously, the Company acquired 100% of the outstanding shares of Ramoil   
Management Company, Inc.(RMC) in exchange for 3,135,000 newly issued shares of  
the Company's stock.                                                            

Simultaneous to this transaction, the Company issued common stock warrants where
each warrant entitled the holder to purchase one share of common stock. A total 
of 800,000 warrants were issued with an exercise price of $2.50 and 450,000     
warrants were issued with an exercise price of $5.00. The warrants expired in   
July 1998. During the exercise period of the warrants, 450,000 of the $2.50     
warrants had been exercised.                                                    

In September 1998, the two majority shareholders of the Company elected to      
convert outstanding loans to RMC amounting to $5,667,217 into 1,889,771 shares  
of common stock. In addition, 37,000 shares were issued, as a result of warrants
exercised at $2.50 prior to the warrants expiration date, which increased       
owners' equity by $92,500.                                                      

As a result of the above transactions, the Company's has 5,643,017 issued and   
outstanding shares at December 31, 1998.                                        

COMPANY HOLDINGS                                                                

Ramoil Management Company, (RMC) was incorporated in 1992 in Boca Raton, Florida
and is in the business of providing consulting and managerial services to its   
subsidiary companies, Ramoil Engineering S.P.A.(RME) and City Mix Concrete Inc. 
(CMIX) and, until December 31, 1997, to its affiliate, Ramoil Holdings, Inc.    
(RMH). In late 1996, RMC opened a branch office in Abu Dhabi, United Arab       
Emirates (UAE) in order to manage the various projects that RMC was engaged in. 

Ramoil Engineering S.P.A. (RME) was established in 1993 under Italian law and   
provides construction supplies and services. Its principal line of business     
consists of the manufacture and sale of commercial furniture and aluminum frames
for windows, doors, and other uses. RME is also involved in providing           
engineering services for various construction projects in Italy.                

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AMERICAN CORPORATE INVESTORS, INC.
 NOTES TO THE FINANCIAL STATEMENTS
 DECEMBER 31, 1998
 CONTINUED

City Mix Concrete, (CMIX) was established in 1998 in Abu Dhabi, United Arab     
Emirates and will process and sell concrete to various building projects in the 
UAE. Although not yet active, the plant project is under construction and       
management expects the plant to be on line in mid 1999. CMIX is owned by RMC    
through a consulting agreement with its majority shareholder, Rodoljub          
Radulovic.                                                                      

NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES                              

PRINCIPLES OF CONSOLIDATION                                                     

The consolidated financial statements included the accounts of RMC, RME, and    
CMIX. All intercompany accounts and intercompany sales and purchases have been  
eliminated in these consolidated financial statements.                          

CASH EQUIVALENTS                                                                

The Company considers all highly liquid investments with a maturity of three    
months or less when purchased to be cash equivalents.                           

USE OF ESTIMATES                                                                

The preparation of the financial statements in conformity with generally        
accepted accounting principles requires management to make estimates that affect
the reported amount of assets and liabilities and the reported amount of revenue
and expenses during the period reported. Actual results could differ from those 
estimates.                                                                      

REVENUE RECOGNITION                                                             

RME recognizes revenue upon shipment of the related goods or performance of     
services.                                                                       

INVENTORIES                                                                     

Inventories are stated at lower of cost or market. Cost is determined by using  
the first-in, first-out method ("FIFO") or by the specific identification method
where feasible. As of December 31, 1998, inventory detailed as follows:         

                                                                 Download Table
                                                 
 Work in process                          $72,332
 Finished goods                           177,843
                                          -------
 Ending inventory                        $250,175

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AMERICAN CORPORATE INVESTORS, INC.
 NOTES TO THE FINANCIAL STATEMENTS
 DECEMBER 31, 1998
 CONTINUED

PROPERTY, PLANT, AND EQUIPMENT                                                  

Property, plant and equipment are recorded at cost. Depreciation and            
amortization are calculated on the straight-line method based upon the following
estimated useful lives:                                                         

                                                                 Download Table
                                                       

  Buildings and Plant                        33 years  
  Leasehold improvements                     Lease term
  Machinery and equipment                    7-9 years 
  Furniture and fixtures                     5-8 years 
  Office equipment                           3-5 years 
  Vehicles                                   4-5 years 

At December 31, 1998, the property, plant, and equipment account details as     
follows:                                                                        

                                                                 Download Table
                                                         
  Buildings and Plant                         $2,555,985 
  Leasehold improvements                         438,152 
  Machinery and equipment                      3,105,742 
  Furniture and fixtures                         331,127 
  Office equipment                                58,043 
  Vehicles                                       164,725 
  Accumulated depreciation                      (985,963)
                                                ---------

  Total property, plant, and equipment        $5,439,647 

Goodwill is the excess of funds paid over cost by RME to purchase Artifex Inc in
1995. The goodwill account is being amortized over a forty-year period on a     
straight-line basis.                                                            

OTHER ASSETS                                                                    

OTHER ASSETS INCLUDE PREPAID RENT AND SPONSORSHIP FEES IN THE COMPANY'S ABU     
DHABI BRANCH.                                                                   

INCOME TAXES                                                                    

The Company utilizes Statement of Financial Accounting Standards No. 109,       
"Accounting for Income Taxes", which requires the Company to compute deferred   
income taxes based upon the difference between the financial statement and tax  
bases of the assets and liabilities using the tax rates in effect for the year  
in which the differences are expected to reverse.                               

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AMERICAN CORPORATE INVESTORS, INC.
 NOTES TO THE FINANCIAL STATEMENTS
 DECEMBER 31, 1998
 CONTINUED

FOREIGN CURRENCY TRANSLATION                                                    

The financial statements of RME are prepared in Italian lire and the financial  
statements of CMIX are prepared in Arabian dirhams. Assets and liabilities are  
converted at the exchange rate in effect as of the balance sheet date. Income   
and expense items are translated at the average rate in effect over the time    
period reported. The capital accounts of RME and CMIX are translated at the rate
prevailing at inception. The resulting differences caused by these translation  
adjustments have been accumulated in a separate component of stockholders equity
called the "cumulative translation adjustment". The $69,447 decrease in the     
cumulative translation adjustment for fiscal 1998 is due mainly to the drop in  
the Italian lire rate from 1,758 per dollar at December 31, 1997 to 1,652 per   
dollar at December 31, 1998.                                                    

NOTE 3- RELATED PARTY TRANSACTIONS                                              

The Company had provided management services to Ramoil Holding Co. LTD (RHC); a 
company affiliated through common ownership by the Company's majority           
shareholder. Under the terms of the management agreement, the Company received a
minimum annual fee of $1,000,000 with additional amounts due based on other     
services. The Company has accounted for these fees as "Due from Affiliates".    
Funds that were subsequently remitted by the majority shareholder directly to   
the Company or to third parties on behalf of the Company were then netted       
against this receivable balance.                                                

During fiscal 1998, management has decided to cancel this consulting agreement  
for fiscal 1997 and 1998. The majority shareholder has agreed to a formal       
payment plan where the balance of this account will be received over a          
three-year period with interest compounded monthly at the floating prime rate.  

As of December 31, 1998, RHC had an outstanding receivable balance owed to the  
Company of $671,140. The Company has imputed interest on this balance during    
fiscal 1998 based in the amount of $83,658.                                     

NOTE 4- COMMITMENTS                                                             

The Company leases its office facilities in Boca Raton, Florida under a         
five-year lease agreement, which commenced in August 1997. Future annual        
commitments are as follows:                                                     

                                                                 Download Table
                                    
1998                         $13,201
1999                         $47,111
2000                         $24,223

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AMERICAN CORPORATE INVESTORS, INC.
 NOTES TO THE FINANCIAL STATEMENTS
 DECEMBER 31, 1998
 CONTINUED

The rent on the office facilities in the Abu Dhabi Emirate is prepaid on an     
annual basis and is paid for through September 1999 and is recorded as a prepaid
expense in these consolidated financial statements.                             

In addition, RMC had entered into an agreement to provide financing for the     
construction of 83 apartment and villa units in Al Ain City, Abu Dhabi, United  
Emirates with the licensed owner of the land being developed. Under the terms of
the agreement, RMC was obligated to finance the total construction costs of the 
project, including licensing fees, while in return receiving a mortgage on the  
property developed. The contracted cost of the project is $11,475,410. The      
Company has provided $2,000,000 in funding for this project through December 31,
1998. The agreement provides for a five-percent penalty payment of the full     
contract value by the Company to the owner of the land in the event of          
non-performance.                                                                

On April 20, 1999, the parties mutually agreed to cancel this financing         
agreement whereby the Company is relieved of its financing obligation and has   
received an unsecured promissory note for $2,000,000 payable at 12/31/2001 from 
the owner of the land being developed.                                          

NOTE 5- CONTINGENCIES                                                           

Substantially all the operations of the Company are conducted in Italy and the  
United Arab Emirates. Such operations are affected by the domestic and political
developments occurring there. The degree of theses occurrences and their overall
affect on the Company cannot be predicted but could be material in nature.      

In addition, all business activity of a foreign corporation in Abu Dhabi        
requires the corporation to be sponsored by an Abu Dhabi national. As of        
December 31, 1998, the Company's sponsorship agreements in effect will expire in
late 1999 and early 2000. Normally, the sponsorship agreement provides for an   
annual fee to be prepaid to the sponsor and for the sponsor to share in the     
proceeds of a completed project on a percentage basis. The agreements are       
cancelable, at will, by the sponsor. Cancellation of the sponsorship agreements 
could have a material adverse affect on the Company's ability to operate as a   
going concern in the United Arab Emirates.                                      

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AMERICAN CORPORATE INVESTORS, INC.
 NOTES TO THE FINANCIAL STATEMENTS
 DECEMBER 31, 1998
 CONTINUED

NOTE 6- MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION             

Certain statements made in this report on form 10Q are "forward looking'        
statements within the meaning of the Private Securities Litigation Reform Act of
1995. Such statements involve known and unknown risks, uncertainties, and other 
factors that may cause actual results, performance, or achievements of the      
Company to be materially different from any future results implied by such      
forward looking statements. Although the Company believes that the expectations 
reflected in such forward looking statements are based upon reasonable          
assumptions, the Company's actual results could differ materially from those set
in the forward-looking statements. Certain factors that might cause such a      
difference might include the following: the securing of additional or the       
renewal of existing construction contracts, the growth of the market for the    
Company's services, the effects of the European economic unification upon the   
Company's ability to secure additional business, the ability of the Company to  
secure significant additional financing to meet the Company's financing         
obligations of various real estate and construction projects the Company has    
entered into in the UAE.                                                        

NOTE 7- LEGAL MATTERS                                                           

In May 1996, legal actions were filed against the Company and its principal     
stockholder. A Russian entity has alleged that it is owed $12 million from a    
former affiliated entity's failure to comply with the terms of an oil-trading   
contract. The Company has vigorously defended itself against this action and it 
is management's position that the eventual disposition of this matter will not  
have a material adverse affect on the Company's financial position.             

Accordingly, no provision for any loss as a result from the resolution of this  
matter has been made.                                                           

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PART III                                                                        

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT                    

(A) AND (B)  IDENTIFICATION OF DIRECTORS AND EXECUTIVE OFFICERS.                

The following identification of officers and directors, including biographies,  
set forth the present officers and directors:                                   

                                                                 Download Table

NAME                 AGE  POSITIONS HELD                                   
----                 ---  --------------                                   
                                                                           
Radulojub Radulovic   50  Chief Executive Officer, Chief Financial Officer,
                          Secretary and Chairman of the Board of Directors 

Aleksandr Taflevich   54  President and a Director                         

Zarko Radulovic       46  Vice President and a Director                    

William Brown         59  Director                                         

Directors hold office until the next annual shareholders meeting or until their 
death, resignation, retirement, removal, disqualification, or until a successor 
has been elected and qualified. Vacancies in the Board are filled by majority   
vote of the remaining Directors. Officers of the Company serve at the will of   
the Board of Directors.                                                         

(C) IDENTIFICATION OF SIGNIFICANT EMPLOYEES.     NONE           

(D) FAMILY RELATIONSHIPS.                                       

There are no family relationships among the Officers except for Rodoljub        
Radulovic and Zarko Radulovic who are brothers. There are no arrangements or    
understandings pursuant to which any person was elected as an officer of the    
Company. All officers hold office for one year or until their successors are    
elected and qualified, unless otherwise specified by the Board of Directors;    
provided, however, that any officer is subject to removal with or without cause,
at any time, by a vote of the Board of Directors.                               

(E)     1.  BUSINESS EXPERIENCE.                                                

Principal occupations of directors and officers are as follows:                 

RODOLJUB RADULOVIC has been Chief Executive Officer and a Director of the       
Company since June 1996, and has served as an officer and director of each of   
its subsidiaries since their inception. Mr. Radulovic founded Ramoil Management 
and Ramoil Engineering in 1992 and directed their business operations which,    
until September 1996, involved various aspects of international trade, financial
services construction and engineering services, with a primary emphasis on      
operations in Eastern Europe and Russia. From 1983 until 1992, Mr. Radulovic    
served as president of Yox Austria, a private company which he founded. Yox     
Austria specialized in trading aluminum, metals, minerals, synthetic yarns      
various types of equipment and crude oil to                                     

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Germany, Italy, Yugoslavia and Russia. From 1976 until 1983 he was employed as  
General Manager for the chemical, leather and textile divisions of Hempro       
Company in Belgrad. Previous to that employment, Mr. Radulovic served as Sales  
Manager of the Department of Trade for the Yugoslavian Ocean Company in Kotor,  
Yugoslavia. Mr. Radulovic graduated from Belgrad University with a degree in    
Economics, specializing in International Business and Trade.                    

ALEKSANDAR TAFLEVICH, has served as director of the Company since his           
appointment in June 1996. In 1998, Mr. Taflevich was appointed President of the 
Company and currently serves in that capacity. Since 1992 Mr. Taflevich has also
served as Chief Executive Officer of Trinal, Inc., a company which he founded   
and which provides railroad forwarding services primarily to major European     
fertilizer and metal manufacturers. Mr. Taflevich oversees virtually all of that
company's operations, both in the US and overseas. In addition to his other     
business ventures, since 1994 Mr. Taflevich has served as General Manager of    
Cristal Ball, Inc., a privately held corporation formed under the laws of the   
Cayman Islands, engaged in international trading. From 1989 until founding      
Trinal, Inc. in 1992, he served as Marketing Director for DWT, a conglomerate of
international companies based in Toronto Canada where he was primarily          
responsible for marketing. From 1986 until 1992, Mr. Taflevich was also the     
founder and Chief Executive Officer of Association A Marks, also an association 
of international companies specializing in the manufacture and transport of a   
wide range of consumer goods, based in Moscow, Russia. Mr. Taflevich holds a    
Masters of Business Administration from the Moscow College of Commerce.         

ZARKO RADULOVIC has served as an officer and director of the Company since 1996.
He has also served as General Manager of Ramoil Engineering Spa since 1995.     
Prior to 1995, however, Mr. Radulovic served as a special consultant to Ramoil  
Engineering on various project in Russia and the Ukraine. From 1989 until 1993, 
Mr. Radulovic was employed as General Manager of Trecom, Kotor, a company which 
dealt with investments in tourist projects principally in Montengro. Beginning  
in 1976 he was employed as an engineer at Yugopetrol, the Yugoslavian state     
petroleum company, where he was promoted to chief engineer in 1989. He received 
his engineering degree from Belgrad University, Department of Machinery         
Production in 1976.                                                             

WILLIAM BROWN has served as a director of the Company since 1997. In addition,  
since 1987 he has also served as Vice President and a director of Russo         
Securities, Inc., a registered broker/dealer in New York. Mr. Brown's experience
in the investment banking community spans over thirty years among a wide range  
of firms. From 1985 until joining Russo Securities, Mr. Brown was President of  
the Bull & Bear Fund, a publicly held asset management firm, also located in New
York. Prior thereto, from 1983 until 1985, he was Vice President, Investment    
Banking for Thomson McKinnon Securities, Inc. in Houston, Texas, having served  
as Vice President of Investment Banking for Donaldson Lufkin & Jenerette for 7  
years (1976 to 1983) where he headed institutional sales and investment banking 
for the Southwestern United States. From 1973 to 1976 he was Vice President of  
Paine Webber Capital Committee, a division of Paine Webber Inc. Before that, Mr.
Brown was Executive Vice President, Trading Division, for Domminick & Domminick 
(1971-1973), a registered broker/dealer in Houston, Texas. From 1966 to 1971 Mr.
Brown served as President of Summit Securities, Inc., the trading division of   
the Hedge Fund of America, the first publicly traded hedge fund in the United   
States.                                                                         

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2.  Directorships.                                              

None, other than listed above.                                  

(f) Other Involvement in Certain Legal Proceedings.                             

There have been no events under any bankruptcy act, no criminal proceedings and 
no judgements or injunctions material to the evaluation of the ability and      
integrity of any director or executive officer during the past five years.      

ITEM 11.  EXECUTIVE COMPENSATION                                                

The following table sets forth information relating to remuneration received by 
officers and directors as of June 30, 1997, the end of the Company's most recent
fiscal year:                                                                    

                                                         Enlarge/Download Table


NAME AND PRINCIPAL   ANNUAL COMP.(1)     LONG TERM COMPENSATION                          
POSITION             YEAR SALARY         BONUS RESTRICTED STOCK      ALL OTHER           
                                                AWARDS               COMPENSATION     .  
---------------------------------------------------------------------------------------- 
                                                                                         
Rodoljub Radulovic    1998   $     -0-                                  $15,000(2)       
Secretary, CEO,                                                                          
CFO & Director        1997   $     -0-                                  $15,000(2)       

Aleksandr Taflevich   1998   $     -0-                                                   
President & Director  1997   $     -0-                                                   
-----------------------------------------------------------------------------------------

1.  The Company currently has no written compensation arrangements with any of           
    its executive officers. It should be noted that both Mr. Radulovic and Mr.           
    Taflevich currently serve as CEO and President, respectively, without                
    salary. It is expected that once commercial operations begin in the UAE, the         
    Company and Messrs. Radulovic and Taflevich will enter into formal written           
    employment agreements.                                                               

2.  This payment represents payments made for automobile expenses with respect           
    to Mr. Radulovic's car.                                                              

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT                 

(A) SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS.                                     

None other than stated in (b) below.                                                     

                                                                              28         

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(B) SECURITY OWNERSHIP OF MANAGEMENT.                                                    

                                                         Enlarge/Download Table

NAME                                RELATIONSHIP                 NUMBER OF SHARES         PERCENTAGE 
-----------------------------------------------------------------------------------------------------
                                                                                                     
Radoljub Radulovic                  CEO, CFO, Secretary                                              
                                    And Director                 2,824,115(1)(2)             49.1%   

Aleksandr Taflevich(2)              President and Director       2,402,284(3)(4)             41.8%   

OFFICERS & DIRECTORS AS                                                                              
A GROUP (4 PERSONS)                                              5,226,399                   90.9%   
-----------------------------------------------------------------------------------------------------

(1)     Based upon a total of 5,749,098 shares of Common Stock issued and       
        outstanding as of the date of this Report. However, at December 31, 1998
the Registrant only had a total of 3,715,299 shares issued and  
  outstanding. The Shares issued in cancellation of loans due to Mr.
    Radulovic, Trinal Corp. and Crystal Ball, Inc. were issued following
December 31, 1998.                                              

(2)     Includes all shares of Registrant's Common Stock held by Mr. Radulovic, 
   including 732,667 Shares acquired through the conversion of certain
 loans in the principal amount of $2,198,000 in September 1998 and
  271,666 Shares acquired through the further conversion of loans in
  the principal amount of $815,000 in December 1998. However, of the
  Shares listed herein, 1,179,630 represent shares being transferred
by him to various other parties who are not affiliated with the 
Registrant as follows:                                          

A. 446,964 Shares to RCI, s.r.l.;                   
B. 651,466 Shares to GPR Corp.;                     
C. 43,000 Shares to Mimax Limited;                  
D. 22,200 Shares to Montehrima Limited; and         
E. 16,000 Shares to BTTS, Inc.                      

        Mr. Radulovic disclaims any affiliation with the above listed companies.

(3)     Includes 1,372,818 Shares acquired pursuant to an Option granted to him 
by Mr. Radulovic in June 1996.                                  

(4)     Also includes 1,029,466 Shares acquired in the conversion of $3,088,397 
        of loans to the Registrant in September 1998 by Trinal, Inc. and Crystal
 Ball, Inc., over which shares Mr. Taflevich may be deemed to have
beneficial ownership.                                           

(C)  CHANGES IN CONTROL.                                                        

None.                                                           

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ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                        

1.  In June 1996, Mr. Radulovic granted an Option to Mr. Taflevich to acquire   
  1,372,818 shares of the Company's Common Stock. The shares subject to this
Option were originally acquired by Mr. Radulovic in the original share  
exchange between Ramoil Management Co. and American Corporate Investors,
Inc. on June 10, 1996. The Option was granted in expectation of Mr.     
   Taflevich's agreement to serve as President of the Company. This Option was
exercised by Mr. Taflevich following his assumption of the duties of    
President of the Company.                                               

2.  In the original; share exchange between the Ramoil Management Company and   
American Corporate Investors, Inc., Mr. Radulovich was issued a total of
 3,192,600 Shares, of which 446,964 Shares were beneficially owned by RCI,
s.r.l, an Italian company that owned an interest in Ramoil Management   
   Company prior to its acquisition by the Registrant in June 1996. This error
 was subsequently discovered and these Shares have now been issued to RCI,
s.r.l. Mr. Radulovic continues to own a 1% interest in RCI, s.r.l.      

PART IV                                                                         

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K        

NONE.                                                                           

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      SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange  
Act of 1934, the Registrant has duly caused this report to be signed on its     
behalf by the undersigned, there unto duly authorized.                          

                          AMERICAN CORPORATE INVESTORS, INC.

DATE: MAY  17, 1999                 BY:  /S/ALEKSANDR TAFLEVICH                 
                                        --------------------------------------
                                        ALEKSANDR TAFLEVICH, PRESIDENT

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and  
in the capacities and on the dates indicated.                                   

Dated: May 17, 1999                                                             
Rodoljub Radulovich, Secretary        /s/Rodoljub Radulovic                     
Chief Executive Officer            -------------------------------------------- 
Chief Financial Officer & Director                                              

Dated: May 17, 1999                                                             
Aleksandr Taflevich,                  /s/ Aleksandr Taflevich                   
President and Director             -------------------------------------------- 

Dated: May 17, 1999                                                             
Zarko Radulovich                      /s/Zarko Radulovic                        
Vice President, Director           -------------------------------------------- 

Dated: May 17, 1999                                                             
William Brown, Director               /s/William Brown                          
                                  --------------------------------------------

Dates Referenced Herein and Documents Incorporated By Reference

				Referenced-OnPage
This10KSBFiling		Date		First		Last			OtherFilings
		6/10/96		20		30
		9/30/96		7
		12/31/96		7
		3/31/97		7
		6/30/97		7		28
		9/30/97		7
		12/31/97		7		23			10KSB
		3/31/98		7
		6/30/98		7
		9/30/98		7
For The Period Ended		12/31/98		1		29
		4/20/99		24
		4/21/99		15
		5/10/99		1
		5/15/99		5
		5/17/99		31
Filed On / Filed As Of		5/18/99							10KSB
		12/31/99		12		14			10KSB40, NT 10-K
		7/31/0		6
		12/31/1		3
		4/30/19		3
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