U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO.1
TO
FORM 10-QSB
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1998
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES ACT
OF 1934
For the transition period from_________ to_____________
Commission file number 0-3718
Equity Growth Systems, Inc.
--------------------------
(Exact name of registrant as specified in its charter)
Delaware 11-2050317
-------- ----------
(State or other jurisdiction of (IRS Employer Identification
incorporation or organization) Number)
3821-B Tamiani Trail, Suite 201; Port Charlotte, Florida 33952
----------------------------------------
(Address of principal executive offices)
(561-416-7239)
------------
(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 report(s), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
--- ---
As at March 31, 1998, the registrant had outstanding 4,116,148 shares
of Common Stock, par value $0.01.
Transitional Small Business Disclosure Format:
Yes No X
--- ---
<PAGE>
EQUITY GROWTH SYSTEMS, INC.
Index
Page
----
Part I - Financial Information
Item 1. Financial Statements
Accountant's Compilation Report ............................. 1
Balance Sheets .............................................. 2
Statements Income and Accumulated Deficit.................... 3
Statements of Shareholders' Equity........................... 4
Statements of Cash Flows..................................... 5
Notes to Financial Statements................................ 6 - 14
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations........................ 15
Signatures................................................... 16
i
<PAGE>
To the Shareholders
Equity Growth Systems, inc.,
Port Charlotte, Florida 33952
I have compiled the accompanying balance sheet of Equity Growth Systems, inc. as
of March 31, 1998 and 1997 and the related statements of income and retained
earnings and cash flows for the three months then ended, in accordance with
Statements on Standards for Accounting and Review Services issued by the
American Institute of Certified Public Accountants.
A compilation is limited to presenting in the form of financial statements
information that is the representation of management. I have not audited or
reviewed the accompanying financial statements and, accordingly, do not express
an opinion or any other form of assurance on them.
Leo J. Paul
June 8, 1998
1
<PAGE>
EQUITY GROWTH SYSTEMS, inc.
BALANCE SHEET
MARCH 31, 1998 AND 1997
1998 1997
A S S E T S
CURRENT ASSETS
Cash and cash equivalents $ 7 $ 1,113
Other receivables 98,000 -
Mortgage receivable, current portion
(Note 6 & 7) 120,473 161,693
Promissory notes, current portion
(Note 8) 5,480 6,844
---------- ----------
TOTAL CURRENT ASSETS 223,960 169,650
OTHER ASSETS
Mortgages receivable (Note 6 & 7) 1,113,573 1,536,197
Promissory notes (Note 8) 251,831 271,093
Interest receivable 49,031 46,609
---------- ----------
TOTAL OTHER ASSETS 1,414,435 1,853,899
---------- ----------
TOTAL ASSETS $1,638,395 $2,023,549
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and other current
liabilities (Note 3) $ 17,012 $ 5,086
Mortgage payable, current portion
(Note 7) 173,095 277,606
Note payable (Note 9) 138,874 121,314
---------- ----------
TOTAL CURRENT LIABILITIES 328,981 404,006
LONG-TERM LIABILITIES
Mortgage payable (Note 7) 950,530 1,167,017
---------- ----------
TOTAL LIABILITIES 1,279,511 1,571,023
---------- ----------
SHAREHOLDERS' EQUITY (Note 13)
Preferred stock-no par value authoriz-
ed-5,000,000 shares; zero issued and
outstanding - -
Common stock-$.01 par value author-
ized-20,000,000 shares; issued and
outstanding-4,116,148 shares in 1998
and 3,771,148 in 1997 41,161 37,711
Capital in excess of par value 2,891,645 2,892,195
Accumulated deficit (2,573,922) (2,477,380)
---------- ----------
TOTAL SHAREHOLDERS' EQUITY 358,884 452,526
---------- ----------
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $1,638,395 $2,023,549
========== ==========
Read Accountant's Compilation Report
The accompanying notes are an integral part of these financial statements.
2
<PAGE>
EQUITY GROWTH SYSTEMS, inc.
CONDENSED STATEMENT OF INCOME AND ACCUMULATED DEFICIT
THREE MONTHS ENDED MARCH 31, 1998 AND 1997
1998 1997
Income $ 40,357 $ 57,991
General and Administrative
Expenses 49,009 43,044
---------- ----------
Net Income (Loss) Before
Provisions for Income Taxes (8,652) 14,947
Provisions for Income Taxes
Note (10) - -
---------- ----------
Net Income (Loss) (8,652) 14,947
Accumulated Deficit-Beginning (2,565,270) (2,492,327)
---------- ----------
Accumulated Deficit-Ending $(2,573,922) $(2,477,380)
=========== ===========
Earnings Per Share (.002) .004
Weighted Average of Shares 3,842,259 3,771,148
Outstanding ----------- ----------
Read Accountant's Compilation Report
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
EQUITY GROWTH SYSTEMS, inc.
STATEMENTS OF SHAREHOLDERS' EQUITY
MARCH 31, 1998
Capital in
No. of Common Excess of Accumulated
Shares Stock Par Value Deficit
Balances, December
31, 1995 $2,822,072 28,221 2,881,492 (2,242,768)
Common Stock Issued 949,076 9,490 10,703
Net (loss) for the
year ended December
31, 1996 (249,559)
---------- ------- ---------- -----------
Balances, December
31, 1996 3,771,148 37,711 2,892,195 (2,492,327)
Common Stock Issued 55,000 550 (550)
Net (loss) for the
year ended December
31, 1997 (72,943)
---------- ------- ---------- -----------
Balances, December
31, 1997 3,826,148 38,261 2,891,645 (2,565,270)
Common Stock Issued 290,000 2,900 - -
Net (loss) for the
three months ended
March 31, 1998 (8,652)
---------- ------- ---------- -----------
Balances, March 31,
1998 $4,116,148 $41,161 $2,891,645 $(2,573,922)
========== ======= ========== ===========
Read Accountant's Compilation Report
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
EQUITY GROWTH SYSTEMS, inc.
STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
1998 1997
Cash Flows From Operating Activities:
Net Profit (Loss) $ (8,652) $ 14,947
Adjustments to Reconcile Net Profit (Loss)
to Net Cash Used for Operating
Depreciation
Decrease in other receivable 580 -
Decrease in mortgages and notes
receivable 30,500 32,435
Increase (decrease) in accounts
payable and current liabilities 12,012 (8,535)
Increase (decrease) in mortgage
and notes payable (37,333) (38,696)
-------- --------
Net Cash Provided (Used) by Operations (2,893) 151
-------- --------
Cash Flows From Financial Activities
Capital stock issued 2,900
Additional paid in capital - -
-------- --------
Net Cash Provided by Financial
Activities 2,900 -
-------- --------
Net Increase (Decrease) in Cash 7 151
Cash-Beginning of Year - 962
-------- --------
Cash-End of Period $ 7 $ 1,113
======== ========
Supplemental Cash Flows Information
Cash paid for interest $ 33,138 $ 37,595
======== ========
Read Accountant's Compilation Report
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
EQUITY GROWTH SYSTEMS, inc.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1998
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Business and Organization
The Company (formerly known as InfoTech, Inc.) was organized under
the laws of the State of Delaware on December 8, 1964. The principal business of
the Company is specializing in structuring and marketing mortgaged backed
securities as well as, the acquisition of select commercial real estate for its
own account.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the period.
Actual results could differ from those estimates.
Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, cash in banks, and
any highly liquid investments with a maturity of three months or less at the
time of purchase.
The Company maintains cash and cash equivalent balances at a
financial institution which is insured by the Federal Deposit Insurance
Corporation up to $100,000. At March 31, 1997, there is no concentration of
credit risk from uninsured bank balances.
Fixed Assets
The fixed assets are depreciated over their estimated allowable
useful lives, primarily over five to seven years utilizing the modified
acceleration cost recovery system. Expenditures for major renewals and
betterments that extend the useful lives of fixed assets are capitalized.
Expenditures for maintenance and repairs are charged to expenses as incurred.
Income Taxes
In February 1992, the Financial Accounting Standards Board issued a
Statement on Financial Accounting Standards 109 of "Accounting for Income
Taxes". Under Statement 109, deferred tax assets and liabilities are recognized
for the estimated future tax consequences attributable to differences between
the financial statement carrying amounts of existing assets and liabilities and
their respective bases.
6
<PAGE>
EQUITY GROWTH SYSTEMS, inc.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1998
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Deferred tax assets and liabilities are measured using enacted tax
rates in effect for the year in which those temporary differences are expected
to be recovered or settled. Under Statement 109, the effect on deferred tax
assets and liabilities of a change in tax rates is recognized in income in the
period that includes the enactment date.
Earnings/Loss Per Shares
Primary earnings per common share are computed by dividing the
net income (loss) by the weighted average number of shares of common stock and
common stock equivalents outstanding during the year. The number of shares used
for the three months ended March 31, 1998 and 1997 were $3,842,259 and
$3,771,148, respectively.
NOTE 2 - PROPERTY, PLANT AND EQUIPMENT
1998 & 1997
Equipment $ 2,022
-------
Less: Accumulated depreciation (2,022)
-------
$ -
=======
Depreciation expense charged during 1998 and 1997 was $-0- and $-0-,
respectively.
NOTE 3 - SETTLEMENT WITH CREDITORS
On October 31, 1997, the Company issued 200,000 shares of it common
stock in consideration for the cancellation of $107,393 owed by the Corporation
to Diversified Corporate Consulting Group, LLC for professional services
rendered since 1994. Additionally, in June and October of 1997 , the Company
issued an aggregate of 460,000 shares of the Company's $.01 par value common
stock for advisory services performed on its behalf with a value of $4,600.
On August 15, 1995, the Company issued 200,000 shares of the Company's
$.01 par value of common stock for significant services to the Corporation at
the request of its President with a value of $2,000.
7
<PAGE>
EQUITY GROWTH SYSTEMS, inc.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1998
NOTE 3 - SETTLEMENTS WITH CREDITORS (Continued)
In March of 1995, the Company issued 20,000 shares of the Company's
$.01 par value of common stock after the reverse split in payment of legal bills
of $45,734 and 6,072 shares of $.01 par value stock in payment of accounting
bill of $15,360. The remaining balance of $67,832 was written off as the Company
was not able to locate creditors.
NOTE 4 - EMPLOYMENT AGREEMENT
The Company entered into an employment agreement with Edward
Granville-Smith, a chief executive officer for an initial term of five years
commencing June 1, 1995. The Company registered with the Securities and Exchange
Commission to issue 110,000 shares of common stock to Edward Granville-Smith for
compensation for services prior to June 1, 1996. In addition, annual salary is a
sum equal to the lesser of 5% of the Company's annual gross income on a calendar
basis or 15% of its net pre-tax profit as determined for federal income tax
purposes, without taking depreciation or tax credits into account to be paid on
or before March 30, following the calendar for which salary is due; subject to
availability of cash flow. Edward Granville-Smith would also be entitled to an
annual bonus payable in shares of the Company's common stock, determined by
dividing 5% of the Company's pre-tax profits for the subject calendar year by
the average bid price for the Company's common stock during the last five
trading days prior to the end of the last day of each year and the first days of
the new year.
During May of 1997, the Company recruited two executive officers,
Messers. Gener R. Moffitt and Donald E. Homan, both with offices in Kansas City,
Missouri. Such recruitment was effected in two parts, first, the Company
exchanged 100,000 shares with each (200,000 shares in the aggregate), for all of
the capital stock in their recently formed corporations (Moffitt Properties,
Ltd., and Homan Equities, Inc., both Missouri corporations), and then the
Company and the subject corporation entered into employment agreements. Each
employment agreement was identical and provides for the following compensation.
(a) An annual bonus payable in shares of the Company's common
stock, determined by dividing 10% of the Company's pre-tax
profits for the subject calendar year by the average bid
price for the Company's common stock at during the last five
trading days prior to the end of the last day of each year
and
8
<PAGE>
EQUITY GROWTH SYSTEMS, inc.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1998
NOTE 4 - EMPLOYMENT AGREEMENT (Continued)
the initial five days of the new year, provided, however,
that the employment agreement shall have been in effect for
at least one half of the subject year; and, provided further
that in the event of a reorganization pursuant to which
another entity becomes the Company's parent, the common
stock of such entity shall be issuable hereunder, rather
than that of the Company.
(b) An annual cash bonus equal to 40% of the Company's pre-tax
profits for the subject calendar year, provided, however,
that the employment agreement shall have been in effect for
at least one half of the subject year.
(c) A guaranteed minimum monthly draw against the annual bonus
described above, in a sum equal to not be less than $6,250;
subject to availability of cash flow.
(d) On November 28, 1997, the Board of Directors accepted the
resignation of Mr. Moffitt.
NOTE 5 - CONSULTING AGREEMENTS
The Company had entered into two consulting agreements. One with
Bolina Trading Company, S.A., a Panamanian Corporation and the second one with
Warren A. McFadden. Each consultant serves as a special advisor to Mr.
Granville-Smith, in conjunction with Mr. Granville-Smith's role as an officer
and director of the Company, with special responsibilities in the areas of
strategic planning and raising debt on equity capital required to implement the
Company's strategic plans. The agreements' terms called for Bolina Trading
Company, S.A. to receive as compensation 84,000 shares of the Company's common
stock plus $100 per hour after 520 hours of service per year and Warren A.
McFadden to receive as compensation 110,000 shares of the Company's common stock
plus $100 per hour after 520 hours of service per year. Subsequent to December
31, 1995, all of the above shares of the Company's common stock were issued.
In 1997, the consulting agreement with Warren A. McFadden
was terminated and the 110,000 shares of common stock he received, which were
subsequently acquired by Diversified Consulting, were used by Diversified as
consideration to cancel a $30,000 promissory note liability owed to the Company.
9
<PAGE>
EQUITY GROWTH SYSTEMS, inc.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1998
NOTE 6 - INDENTURE OF TRUST AND WRAP AROUND MORTGAGES RECEIVABLE
On June 30, 1995, the Company issued 1,616,000 shares of common stock
in payment of an indenture of trust and wrap around mortgages subject to the
underlying mortgages, from the following partnerships: Pay-West Associates,
Montco Associates, San-Safe Associates and San-Ten Associates.
The indenture of trust consists of (4) four demand notes bearing
interest at prime plus 4%. These notes are payable from the rental of the
various properties less payment on the wrap around mortgages. The payment does
not cover the accrued interest which is added back to the notes.
The wrap around notes bear interest of 9.08% to 13.50%. The
underlying mortgages bear interest at 9.625 to 9.75%. The difference between
payments on the wrap around mortgages and underlying mortgages are applied to
debt service of the demand notes.
NOTE 7 - MORTGAGES
3/31/98 3/31/97
--------- --------
Mortgages consist of the following:
Subordinate "wrap" mortgage receivables:
(a) Nevada/California Property 12.9041 $ 657,333 $ 749,094
(b) Kansas Property-Note 14 12.320% - 320,768
(c) Oregon Property 9.080% 576,713 628,028
---------- ----------
1,234,046 1,697,890
Less: Current Portion (120,473) (161,693)
---------- ----------
$1,113,573 $1,536,197
========== ==========
Original Mortgages Payable:
(a) Nevada/California Property 9.750% $ 598,325 $ 729,158
(b) Kansas Property-Note 14 9.750% - 124,393
(d) Oregon Property 9.750% 525,300 591,072
---------- ----------
1,123,625 1,444,623
Less: Current Portion (173,095) (277,606)
---------- ----------
$ 950,530 $1,167,017
========== ==========
10
<PAGE>
EQUITY GROWTH SYSTEMS, inc.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1998
NOTE 7 - MORTGAGES (Continued)
(a) The mortgage secures a promissory note and is payable in
equal quarterly installments of $42,701.69 with a final
payment of $291,096.92, maturing January 1, 2001. There is
also an underlying "wrap" mortgage that is payable in
equal quarterly installments of $42,826.50, maturing July
1, 2005, with quarterly payments decreasing to $9,314.75
for the last five years.
(b) The mortgage secures a promissory note and was payable in
equal quarterly installments of $18,508.87 with a final
payment of $136,999 maturing Decemb-er 31, 1995. There is
also an underlying "wrap" mortgage that is payable in
annual installments of $74,482, maturing October 1, 2005
with annual payments decreasing to $22,962 the last 10
years. The mortgage payable is currently in default and
the remaining balance has been classified as current. (See
Note 14).
(c) The mortgage secures a promissory note and is payable in
equal quarterly installments of $26,409.87 with a final
payment of $232,199.50, maturing January 1, 2002. There is
also an underlying "wrap" mortgage that is payable in
equal annual payments of $106,640 maturing December 31,
2002.
11
<PAGE>
EQUITY GROWTH SYSTEMS, inc.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1998
NOTE 8 - NOTES RECEIVABLE
1998 1997
Nevada/California Property
Quarterly payments of $868.55
4% above prime, currently 12.40%
original amount $63,000 $157,702 $142,126
Kansas
Quarterly payments of $341.73
4% above prime, currently 12.40%
original amount $21,073 (See Note 14) - 46,065
Oregon
Quarterly payments of $501.13
4% above prime, currently 12.40%
original amount $38,742 99,609 89,746
-------- --------
257,311 277,937
Less Current Portion 5,480 (6,844)
-------- --------
$251,831 $271,093
======== ========
NOTE 9 - NOTE PAYABLE
A secured note payable including accrued
interest, due on demand on interest payable
quarterly at a rate of 10% per annum. This loan
was assumed by the Company as part of the asset
acquisition. The note has a cumulative interest
clause on any short fall in payment being added
to the original principal amount of $104,000.
To date, no payments have been made.
A secured note payable, due on demand accruing
interest at a rate of 10% per annum.
$138,874 $121,314
======== ========
12
<PAGE>
EQUITY GROWTH SYSTEMS, inc.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1998
NOTE 10 - INCOME TAXES
As discussed in Note 1, the Company has applied the provisions
of Statement 109.
The significant components of deferred income tax expense
benefit for the years ended March 31, 1998 and 1997 arising from net operating
losses as follows:
1998 1997
------- -------
Deferred tax benefit $36,664 $11,800
Valuation allowance 36,664 11,800
------- -------
$ - $ -
======= =======
The Company has operating loss carry forwards in excess of two
million dollars that can be used to offset future taxable income.
NOTE 11 - RELATED PARTY TRANSACTION
The chief executive officer of the Company is also an officer
of the general partner in all the partnerships involved in the wrap around
mortgages subject to the underlying mortgages and promissory notes.
NOTE 12 - COMPENSATION
No officer or director has received any compensation to date,
except as discussed in Note 4.
NOTE 13 - STOCKHOLDERS' EQUITY
On May 18, 1995, the Company adopted a resolution to change the
authorized capitalization as follows:
(a) The 2,000,000 shares of common stock, $0.01 par value then
authorized, all of which were currently outstanding, were
reverse split into 200,000 shares, $0.01 par value; and
immediately thereafter;
(b) The Company's authorized common stock was increased from
200,000 shares, $0.01 par value, to 20,000,000 shares of
common stock, $0.01 par value, and
(c) The Company was authorized to issue 5,000,000 shares of
preferred stock, the attributes of which are to be
determined by the Company's Board of Directors from time
to time, prior to issuance, in conformity with the
requirements of Sections 151 of the Delaware General
Corporation Law.
13
<PAGE>
EQUITY GROWTH SYSTEMS, inc.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1998
NOTE 14 - LEGAL MATTERS
The Company is currently not a party to any legal proceedings.
Although the Company is not a party to the following proceedings directly, they
involve real estate located in Kansas and Tennessee in which the Company has an
interest.
A. On October 20, 1997, the various parties to a wrap around
mortgage transaction with the Company and the current
tenant agreed to settle, but certain parties reserved
claims against each other. The settlement calls for a
payment from the current tenant of $150,000 in exchange
for the transfer of a clear and free title of the
underlying real estate. The mortgage holder Fleet National
Bank received $52,000 and the balance to be held in escrow
between the other parties. The Company holds the position
that the ultimate disbursement of a substantial portion of
these escrowed funds should be earmarked for the reduction
of the wrap around mortgage and promissory note
receivable.
B. The Company was also in default of the mortgage on the
property located in Memphis, Tennessee because it could
not satisfy the balloon payment, in the original amount of
$193,580, that was due on December 31, 1996. ($174,801 a
12/31/96). The mortgage holder (Lutheran Brotherhood) had
refused to renegotiate or extend the term of the mortgage
and would not accept any further amortization payments
from the lessor of the underlying lease, other than the
one made in December, 1996, which was based upon the old
repayment schedule's terms.
Through August 1997, the Company had received funds from
Sun West N.O.P., the lessor on the underlying lease, which
represented the monthly rent payments made on such lease
($4,609.38) by the tenant of the Memphis Property. Because
the mortgage holder would not accept any amortization
payments on their matured loan from Sun West N.O.P., the
Company was using such proceeds to reduce the related wrap
mortgage receivable. In August of 1997, the mortgage
holder foreclosed on the mortgage payable, which resulted
in a foreclosure sale of the Memphis, Tennessee property.
As a result of these events of foreclosure, the Company
wrote off the balance on the mortgage payable and the
related wrap mortgage receivable ($251,722) and promissory
note receivable ($93,686) at December 31, 1996. (See notes
7 and 8).
14
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
During the three months ended March 31, 1998, the registrant reported
income of approximately $40,000 as compared to income from all sources of
$58,000 during the prior three months ended.
During the three monthe ended March 31, l998, the registrant's cost
of revenue was approximately $46,000 as compared $43,000 during the prior three
months ended. The decrease was attributable to the decrease in interest expense.
During the three monthe ended March 31, 1998, the registrant reported
a net income of approximately $(6,000) or $(.002) per share, compared to $15,000
or .004 per share prior to three months ended. The $(22,000) in net loss
reflects the increase in cost of operations.
LIQUIDITY AND CAPITA1 RESOURCES
As of March 31, l998, the registrant has a working capital position
of approximately ($105,000) as compared to a working capital position of
($243,000) for the three months ended March 3l, 1997. This reflects the write
off of the Tennessee and Kansas wrap around mortgages, notes receivable and
underlying mortgages. To date, the cash flow generated from operations have been
adequate to meet the registrant's mortgage obligations. A shareholder has been
contributing funds to meet various qeneral and administrative expenses required
to fulfill all of the registrant's obligations. No officer of the registrant has
been receiving or accruing compensation at this time.
15
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, the Registrant had
duly caused the report to be signed on its behalf by the undersigned thereunto
duly authorized.
EQUITY GROWTH SYSTEMS, INC.
Dated: 7/1/98
/s/ Charles J. Scimeca
--------------------------
Charles J. Scimeca
Secretary
16
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<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 7
<SECURITIES> 0
<RECEIVABLES> 223,960
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 223,960
<PP&E> 2,022
<DEPRECIATION> 2,022
<TOTAL-ASSETS> 1,638,395
<CURRENT-LIABILITIES> 328,981
<BONDS> 0
0
0
<COMMON> 41,161
<OTHER-SE> 2,891,645
<TOTAL-LIABILITY-AND-EQUITY> 1,638,395
<SALES> 40,357
<TOTAL-REVENUES> 40,357
<CGS> 0
<TOTAL-COSTS> 49,009
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (8,652)
<INCOME-TAX> 0
<INCOME-CONTINUING> (8,652)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (8,652)
<EPS-PRIMARY> (.002)
<EPS-DILUTED> (.002)
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