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 November 30, 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
<TABLE>
<CAPTION>
GLOBUS GROWTH GROUP, INC.
CONDENSED BALANCE SHEETS
November 30, February 29,
2000 2000
----------- -----------
ASSETS (Unaudited) (See Note 1)
<S> <C> <C>
Cash $2,000 $58,000
Investments in Securities (Note 3) $1,420,000 $1,863,000
Other Assets $9,000 $11,000
----------- -----------
TOTAL $1,431,000 $1,932,000
----------- -----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Accounts payable and accrued expenses $1,237,000 $1,178,000
Loans payable to officers/shareholders $300,000 $249,000
Demand loan payable to related party $327,000 $320,000
----------- -----------
Total Liabilities $1,864,000 $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 11/30/00 $25,000 $25,000
Additional paid in capital $2,747,000 $2,747,000
Treasury Stock, 151,743 shares at 11/30/00 ($41,000) ($41,000)
Accumulated earnings (deficit) ($3,164,000) ($2,546,000)
----------- -----------
Total stockholders' equity ($433,000) $185,000
----------- -----------
TOTAL $1,431,000 $1,932,000
----------- -----------
</TABLE>
(See Accompanying Notes to Financial Statements)
<PAGE>
GLOBUS GROWTH GROUP, INC.
STATEMENT OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Nine Months
Ended November 30, Ended November 30,
2000 1999 2000 1999
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Gain (loss) on investments:
Realized $17,000 $12,000 $37,000 $52,000
Unrealized ($165,000) $77,000 ($451,000) $154,000
----------- ----------- ----------- -----------
Total ($148,000) $89,000 ($414,000) $206,000
Dividend Income $0 $2,000 $1,000 $5,000
Interest Income $1,000 $4,000
Consulting and other income $10,000 $1,000 $19,000 $8,000
----------- ----------- ----------- -----------
TOTAL ($138,000) $93,000 ($394,000) $223,000
Expenses:
General and administrative $73,000 $72,000 $209,000 $207,000
Interest $4,000 $6,000 $11,000 $16,000
----------- ----------- ----------- -----------
TOTAL $77,000 $78,000 $220,000 $223,000
Income (loss) from operations before taxes ($215,000) $15,000 ($614,000) $0
(Benefit)/Provision for taxes $0 $0 $0 $0
----------- ----------- ----------- -----------
Net Income (Loss) ($215,000) $15,000 ($614,000) $0
----------- ----------- ----------- -----------
Net Income (Loss) per share of common
stock - basic and diluted ($0.09) $0.01 ($0.26) $0.00
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>
Nine Months
Ended November 30,
2000 1999
------------ ------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (loss) ($614,000) $0
Adjustments to reconcile net income (loss) to net cash provided by (used in)
operating activities:
Depreciation and amortization $0 $0
Realized (gain) loss on investments ($37,000) ($52,000)
Unrealized (gain) loss on investments $451,000 ($154,000)
Increase/(decrease) in accounts payable, accrued expenses and
accrued interest on loans $70,000 $71,000
(Increase) decrease in prepaid assets ($2,000) $0
--------- ---------
Net cash (used in ) operating activities ($132,000) ($135,000)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of investments ($25,000) ($200,000)
Proceeds from sale of investments $53,000 $154,000
--------- ---------
Net cash provided by (used in ) investing activities $28,000 ($46,000)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of loans payable to officers/shareholders ($5,000) ($4,000)
Increase (decrease) in loans payable to officers/shareholders $53,000 $100,000
--------- ---------
Net cash provided by (used in) financing activities $48,000 $96,000
--------- ---------
Net increase (decrease) in cash ($56,000) ($85,000)
Cash - beginning of period $58,000 $233,000
Cash - end of period $2,000 $148,000
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 November 30, 2000
Financial Statements
(Unaudited)
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 November 30, 2000, the results of operations for the
three and nine months ended November 30, 2000 and 1999, and statements
of cash flows for the nine months ended November 30, 2000 and 1999.
The results of operations for the nine months ended November 30, 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 November 30, 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>
November 30, 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
Tumbleweed Communications Corp. (2) 204 $3,000 $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 37,718 $155,000 $71,000 46,218 $601,000 $87,000
---------- ---------- ---------- ----------
Total Common Stock $465,000 $561,000 $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 $1,420,000 $1,666,000 $1,863,000 $1,657,000
---------- ---------- ---------- ----------
</TABLE>
(1) On February 14, 2000 Thermaphore Sciences, Inc. changed its name to Carta
Proteomics, Inc.
(2) On October 2, 2000 775 shares of Interface Systems was surrendered in
exchange for 204 shares Tumbleweed Communications Corp.
<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 November 30, 2000, the Company had total assets of $1,431,000
compared to total assets of $1,932,000 at February 29, 2000. Included in
total assets were investments of $1,420,000 at November 30, 2000 and
$1,863,000 at February 29, 2000. Shareholders equity was ($433,000) at
November 30, 2000 and $185,000 at February 29, 2000. Loss on investments
amounted to ($414,000) for the nine month period ended November 30, 2000,
compared to a gain of $206,000 for the nine month period ended November 30,
1999. Included in such losses were realized gain of $37,000 and unrealized
loss of ($451,000) for the nine month period ended November 30, 2000
compared to realized gain of $52,000 and $154,000 of unrealized gain for
the nine month period ended November 30, 1999. Operating expenses,
including interest charges, amounted to $220,000 for the 2000 nine month
period and $223,000 for the 1999 nine month period. Income (loss) from
operations, both before and after provision for taxes, was ($614,000) for
the nine month period ended November 30, 2000 compared to $0 for the nine
month period ended November 30, 1999. Net earnings (loss) per share was
($0.26) for the 2000 nine month period compared to $0.00 for the comparable
1999 period. The weighted average number of shares of Common Stock
outstanding at November 30, 2000 and at November 30, 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 November 30, 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 $87,000 at November 30, 2000, an
increase of $55,000 from $32,000 at February 29, 2000. This increase was
due to an increase in principal of $53,000, and an increase in accrued
interest of approximately $2,000. As at November 30, 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 $326,000,
including accrued interest. As at November 30, 2000, unpaid salary owing to
Mr. Stephen E. Globus was $616,000, and unpaid salary owing to Mr. Richard
D. Globus was $585,000; so that at such date the total of monies owed to
Messrs. Stephen E. Globus, Richard D. Globus and Ms. Jane Globus aggregated
approximately $1,828,000.
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: January 16, 2001
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
