SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 FOR THE QUARTERLY PERIOD ENDED August 31, 2000
OR
Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 from the transition period from _________ to _________
Commission File Number 0-9987
GLOBUS GROWTH GROUP, INC.
(Exact name of registrant as specified in its charter)
New York 13-2949462
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
44 West 24th Street, New York, NY 10010
(Address of principal executive offices) (zip code)
(212) 243-1000
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes _X_ No ___
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act
of 1934 subsequent to the distribution of securities under a plan confirmed by a
court. Yes ___ No ___
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as the latest practicable date: 2,499,000 (including 151,743
held in treasury)
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
GLOBUS GROWTH GROUP, INC.
CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
August 31, February 29,
2000 2000
----------- -----------
<S> <C> <C>
ASSETS (Unaudited) (See Note 1)
Cash $3,000 $58,000
Investments in Securities (Note 3) $1,593,000 $1,863,000
Other Assets $10,000 $11,000
----------- -----------
TOTAL $1,606,000 $1,932,000
----------- -----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Accounts payable and accrued expenses $1,213,000 $1,178,000
Loans payable to officers/shareholders $287,000 $249,000
Demand loan payable to related party $324,000 $320,000
----------- -----------
Total Liabilities $1,824,000 $1,747,000
----------- -----------
Stockholders' equity (Note 2)
Preferred stock - $.10 par value, Authorized - 450,000 shares
None Issued
Series B convertible preferred stock - $.10 par value
Authorized - 50,000 shares, None issued
Common stock - $.01 par value, Authorized - 4,500,000
shares, Issued 2,499,000 shares at 8/31/00 $25,000 $25,000
Additional paid in capital $2,747,000 $2,747,000
Treasury Stock, 151,743 shares at 8/31/00 ($41,000) ($41,000)
Accumulated earnings (deficit) ($2,949,000) ($2,546,000)
----------- -----------
Total stockholders' equity ($218,000) $185,000
----------- -----------
TOTAL $1,606,000 $1,932,000
----------- -----------
</TABLE>
(See Accompanying Notes to Financial Statements)
<PAGE>
GLOBUS GROWTH GROUP, INC.
STATEMENT OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Six Months
Ended August 31, Ended August 31,
2000 1999 2000 1999
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Gain (loss) on investments:
Realized $20,000 $40,000 $20,000 $40,000
Unrealized $124,000 ($48,000) ($286,000) $77,000
----------- ----------- ----------- -----------
Total $144,000 ($8,000) ($266,000) $117,000
Dividend Income $0 $2,000 $1,000 $3,000
Interest Income $0 $0 $0 $3,000
Consulting and other income $3,000 $4,000 $9,000 $7,000
----------- ----------- ----------- -----------
TOTAL $147,000 ($2,000) ($256,000) $130,000
Expenses:
General and administrative $69,000 $65,000 $136,000 $135,000
Interest $4,000 $6,000 $7,000 $10,000
----------- ----------- ----------- -----------
TOTAL $73,000 $71,000 $143,000 $145,000
Income (loss) from operations before taxes $74,000 ($73,000) ($399,000) ($15,000)
(Benefit)/Provision for taxes $0 $0 $0 $0
----------- ----------- ----------- -----------
Net Income (Loss) $74,000 ($73,000) ($399,000) ($15,000)
----------- ----------- ----------- -----------
Net Income (Loss) per share of common
stock - basic and diluted $0.03 ($0.03) ($0.17) ($0.01)
Weighted Average Number of shares of
Stock Outstanding - basic and diluted 2,347,257 2,347,257 2,347,257 2,347,257
----------- ----------- ----------- -----------
</TABLE>
(See Accompanying Notes to Financial Statements)
<PAGE>
GLOBUS GROWTH GROUP, INC.
STATEMENT OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six Months
Ended August 31,
2000 1999
--------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (loss) ($399,000) ($15,000)
Adjustments to reconcile net income (loss) to net cash provided
by (used in) operating activities:
Depreciation and amortization $0 $1,000
Realized (gain) loss on investments ($20,000) ($40,000)
Unrealized (gain) loss on investments $286,000 ($77,000)
Increase/(decrease) in accounts payable, accrued expenses and
accrued interest on loans $42,000 $42,000
(Increase) decrease in prepaid assets ($3,000) $0
--------- ---------
Net cash (used in ) operating activities ($94,000) ($89,000)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of investments ($25,000) ($200,000)
Proceeds from sale of investments $29,000 $127,000
--------- ---------
Net cash provided by (used in ) investing activities $4,000 ($73,000)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of loans payable to officers/shareholders ($5,000) ($3,000)
Increase (decrease) in loans payable to officers/shareholders $40,000 $150,000
--------- ---------
Net cash provided by (used in) financing activities $35,000 $147,000
--------- ---------
Net increase (decrease) in cash ($55,000) ($15,000)
Cash - beginning of period $58,000 $233,000
Cash - end of period $3,000 $218,000
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the year for:
Interest $0 $0
Income Taxes $0 $0
</TABLE>
(See Accompanying Notes to Financial Statements)
<PAGE>
GLOBUS GROWTH GROUP, INC. Notes to Condensed Financial Statements
(Unaudited)
August 31, 2000
Note 1 - Basis of Condensed Information
In the opinion of the Company, the accompanying unaudited condensed
financial statements contain all adjustments, consisting of only normal
recurring accruals, necessary to present fairly the financial position as
of August 31, 2000, the results of operations for the three and six months
ended August 31, 2000 and 1999, and statements of cash flows for the six
months ended August 31, 2000 and 1999.
The results of operations for the six months ended August 31, 2000 are not
necessarily indicative of the results to be expected for the full year.
Certain information and note disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. These condensed financial
statements should be read in conjunction with the financial statements and
notes thereto included in the Company's annual report filed on Form 10-K
for the year ended February 29, 2000.
The balance sheet at February 29, 2000 has been derived from the Company's
audited balance sheet included in its Annual Report on Form 10-K.
Note 2 - Earnings Per Share
Per share data are based on the weighted average number of common shares
outstanding during the period.
Note 3 - Investments
As of February 29, 2000 and August 31, 2000, investments are carried at
fair value, which, for readily marketable securities, represents the last
reported sales price or bid price on the valuation date. Investments in
restricted securities and securities which are not readily marketable are
carried at fair value as determined in good faith by Management, in the
case of interim financial statements, and by the Board of Directors, in the
case of year end financial statements; in each instance, in the exercise of
their respective judgments, after taking into consideration various
indications of value available to them.
(Continued on next page)
<PAGE>
Note 3 - (Continued)
<TABLE>
<CAPTION>
August 31, February 29,
2000 2000
No. No.
Shares Value Cost Shares Value Cost
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Common Stock
Carta Proteomics, Inc. (1) 33,333 $13,000 $13,000 33,333 $13,000 $13,000
Catamount Brewing Co. 23,215 $0 $176,000 23,215 $0 $176,000
Interface Systems Inc. 775 $13,000 $7,000 775 $25,000 $7,000
Kimeragen, Inc. Cl A 108,827 $219,000 $219,000 108,827 $219,000 $219,000
Kimeragen, Inc. Cl B 35,000 $75,000 $75,000 35,000 $75,000 $75,000
Repligen Corporation 41,718 $318,000 $79,000 46,218 $601,000 $87,000
---------- ---------- ---------- ----------
Total Common Stock $638,000 $569,000 $933,000 $577,000
---------- ---------- ---------- ----------
Preferred Stock
Carta Proteomics, Inc. Series A Pfd (1) 100,000 $150,000 $150,000 100,000 $150,000 $150,000
Carta Proteomics, Inc. Series B Pfd (1) 10,000 $25,000 $25,000
Catamount Brewing Co. Pfd 4,286 $0 $150,000 4,286 $0 $150,000
Genitope Corp. Series A Pfd 420,858 $210,000 $210,000 420,858 $210,000 $210,000
Genitope Corp. Series B Pfd 332,992 $420,000 $420,000 332,992 $420,000 $420,000
Kimeragen, Inc. Series A Pfd 60,000 $150,000 $150,000 60,000 $150,000 $150,000
---------- ---------- ---------- ----------
Total Preferred Stock $955,000 $1,105,000 $930,000 $1,080,000
---------- ---------- ---------- ----------
Total Investments - Fair value $1,593,000 $1,674,000 $1,863,000 $1,657,000
---------- ---------- ---------- ----------
</TABLE>
(1) On February 14, 2000 Thermaphore Sciences, Inc. changed its name to Carta
Proteomics, Inc.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Results of Operations
Prior to fiscal 1987, the Company was engaged in the camera and photography
business. On February 28, 1986, the Company sold its operating business to an
affiliated company and since that date the Company's principal activity has been
the making of investments in other companies.
At August 31, 2000, the Company had total assets of $1,606,000 compared to
total assets of $1,932,000 at February 29, 2000. Included in total assets were
investments of $1,593,000 at August 31, 2000 and $1,863,000 at February 29,
2000. Shareholders equity was ($218,000) at August 31, 2000 and $185,000 at
February 29, 2000. Loss on investments amounted to ($266,000) for the six month
period ended August 31, 2000, compared to a gain of $117,000 for the six month
period ended August 31, 1999. Included in such losses were realized gain of
$20,000 and unrealized loss of ($286,000) for the six month period ended August
31, 2000 compared to realized gain of $40,000 and $77,000 of unrealized gain for
the six month period ended August 31, 1999. Operating expenses, including
interest charges, amounted to $143,000 for the 2000 six month period and
$145,000 for the 1999 six month period. Income (loss) from operations, both
before and after provision for taxes, was ($399,000) for the six month period
ended August 31, 2000 compared to ($15,000) for the six month period ended
August 31, 1999. Net earnings (loss) per share was ($0.17) for the 2000 six
month period compared to ($0.01) for the comparable 1999 period. The weighted
average number of shares of Common Stock outstanding at August 31, 2000 and at
August 31, 1999 is 2,347,257.
Liquidity, Capital Resources and Other Matters Affecting Financial Condition
The near term liquidity of the Company, as well as its near term capital
resources position, are presently dependent upon the continued willingness, as
to which there can be no assurance whatsoever, of the members of the Globus
family who have made loans to the Company not to demand full or substantially
full repayment of such loans and to continue to make loans to the Company, if
necessary. Thus, loans payable by the Company, including accrued interest, to
Mr. Stephen E. Globus (his individual account) amounted to $214,000 at August
31, 2000, a decrease of $4,000 from $218,000 at February 29, 2000. This decrease
was due to a loan repayment to Stephen E. Globus of approximately $5,000, and an
increase in accrued interest of approximately $1,000. Loans payable to Messrs.
Stephen E. and Richard D. Globus (a separate joint account), including accrued
interest, amounted to $73,000 at August 31, 2000, an increase of $41,000 from
$32,000 at February 29, 2000. This increase was due to an increase in principal
of $40,000, and an increase in accrued interest of approximately $1,000. As at
August 31, 2000, loans payable to another member of the Globus family, to wit:
Ms. Jane Globus (the mother of Stephen E. and Richard D. Globus), amounted to
approximately $324,000, including accrued interest. As at August 31, 2000,
unpaid salary owing to Mr. Stephen E. Globus was $604,000, and unpaid salary
owing to Mr. Richard D. Globus was $573,000; so that at such date the total of
monies owed to Messrs. Stephen E. Globus, Richard D. Globus and Ms. Jane Globus
aggregated approximately $1,788,000.
There are in fact presently no known events that can be considered
reasonably certain to occur which would materially change favorably either the
short term or long term liquidity (i.e., ability of the Company to generate
adequate amounts of cash to meet its needs for cash) or capital resources
position (i.e., source of funds) of the Company from that in which it presently
finds itself, and, absent continuation of the presently existing loans without
call for payment, or additional loans, from the Globus family, the present
liquidity and capital resources position of the Company necessarily adversely
affects the financial condition of the Company and its ability to make new
investments. In
<PAGE>
such connection it must be noted that: the profitability of a BDC, like the
Company, is largely dependent upon its ability to make investments and upon
increases in the value of its investments; and a BDC is also subject to a number
of risks which are not generally present in an operating company, and which are
discussed generally in Item 1 of the Company's 10K Report for its fiscal year
ended February 29, 2000 to which Item reference is hereby made. Reference is
also hereby made to Item 1 and Item 7 of such Report and to the Financial
Statements and notes thereto contained in such Report for information concerning
the Company's investments and its financial condition.
The Year 2000 Problem
The fact that most existing and unmodified computer systems may not be able
to distinguish the year 2000 from the year 1900 has created what is generally
known as the "Year 2000 Problem" (hereinafter "Y2K"). The full extent of the Y2K
problem has not been known, and it is generally agreed that if not timely
corrected, it could adversely affect many businesses.
The Company's own internal systems have not been materially affected by the
Y2K problem. While there can be no assurance that: (a) the computer systems and
applications of the Company's various investees were in fact converted timely,
or, (b) that a failure to so correct by one or more material investees would not
have a material adverse effect on the Company's financial condition, the Company
is not aware of any adverse effects suffered by any of its investees.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not Applicable.
PART II - Other Information
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit 27 - Financial Data Schedule
(b) Reports on Form 8-K
No reports on Form 8-K have been filed during the quarter for which
this Report is filed.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: October 13, 2000
GLOBUS GROWTH GROUP, INC.
(Registrant)
/s/ Stephen E. Globus
-----------------------------
STEPHEN E. GLOBUS
Chairman of the Board,
(Principal Executive Officer)
/s/ Richard D. Globus
-----------------------------
RICHARD D. GLOBUS
President, Director
