AMERICAN GROWTH FUND INC, 485BPOS, 1999-12-01

AMERICAN GROWTH FUND INC
485BPOS, 1999-12-01

Previous: SENTO CORP, 8-K, 1999-12-01

Next: ASARCO INC, 8-K, 1999-12-01

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
ON DECEMBER 1,1999
SECURITIES ACT FILE NO. 2-14543 INVESTMENT COMPANY ACT
FILE NO. 811-825

- -------------------------------------------------------------------------------
- -----------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF
1933
PRE-EFFECTIVE AMENDMENT NO.
POST-EFFECTIVE AMENDMENT NO. 54
AND/OR
[x]

REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940
AMENDMENT NO. 24
[x]
(CHECK APPROPRIATE BOX OR BOXES)

- -------------------------------------------------------------------------------
- --
- ---------
AMERICAN GROWTH FUND, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
110 16th Street, Suite 1400
Denver, Colorado 80202
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE
(303) 626-0600

Robert Brody
110 16th Street, Suite 1400
Denver, CO 80202
(Name and Address of Agent for Service)
-------------------
Approximate Date of Proposed Public Offering: as soon as practicable
after the effective date of the Registration Statement
- -------------------
It is proposed that this filing will become effective (check appropriate
box)

[X] immediately upon filing pursuant to paragraph (b)
[_] on November 10, 1998 pursuant to paragraph (b)
[_] 60 days after filing pursuant to paragraph (a) (1)
[_] on (date) Pursuant to paragraph (a) (1)
[_] 75 days after filing pursuant to paragraph (a) (2)
[_] on (date) pursuant to paragraph (a) (2) of Rule 485

If appropriate, check the following box:
[_] this post-effective amendment designates a new effective
Date for a previously filed post-effective amendment.

Pursuant to Rule 24f-2(a) (1) under the Investment Company Act of 1940,
the Fund has registered an indefinite number or amount of its securities
under the Securities Act of 1933. The Fund filed its Rule 24f-2 notice for
the fiscal year ended July 31, 1999 on September 25, 1999.

<PAGE>

Prospectus
American Growth Fund
110 Sixteenth Street, Suite 1400
Denver, CO 80202
(303) 626-0600

Prospectus American Growth Fund, Inc.
Class A ~ Class B ~ Class C ~ Class D

December 1, 1999

<TABLE>
<S> <C> <C> <C>
Table of Contents
Fund Overview
3
Investment Goal
3
Investment Approach
3
Investment Strategy
3
Risks
4
Investor Profiles
5
Fund Performance History 6
Fee Table
8
About the Fund
10
Fund Investment Objective
10
Fund Strategies
10
Managing Risks
11
Year 2000
12
Management
13
Board of Directors
13
Investment Advisor
13
Portfolio Managers
13
Pricing of Fund Shares
15
Your Account
16
Class A
16
Class B
16
Class C
17
Class D
17
Class A & D Sales Charges
18
Reducing Sales Charges
19
Buying Shares
20
Automatic Investment
Plan
21
Direct Deposit
21
Dividend
Reinvestment Plan
21
Systematic
Withdrawal Plan
21
Retirement Plans
21
Redeeming Shares
22
Account Minimum
24
Dividends
24
Distributions
24
Taxes
24
Financial Highlights
25
Understanding Terms
29
Contact Us
30

</TABLE>

CALLOUT
Meet Wiggins
From time to time you will see Wiggins appear throughout the Prospectus.
Wiggins will provide you with special information and helpful hints.

The Securities and Exchange Commission has not approved or
disapproved these securities or passed upon the adequacy of this
prospectus, and any representation to the contrary is a criminal offense.

<PAGE>

A Fund Overview

What is the Fund's investment goal?
The Fund's primary objective is growth of capital. Income as a factor in
portfolio selection is a secondary objective.

Principal investment strategy.
Investment Research Corporation manages American Growth Fund, Inc.
(the Fund) using a "growth style" of investing. We use a consistent
approach to build equity portfolios, searching one-by-one for companies
whose fundamental strengths suggest the potential to provide superior
earnings growth over time. When a company's fundamentals are strong,
we believe earnings growth will follow. Using this disciplined approach,
we look for companies having some or all of the following characteristics:

growth that is faster than a company's peers
growth that is faster than the market as a whole and sustainable
over the long term
strong management team
leading market positions and growing brand identities
financial, marketing, and operating strength

American Growth Fund normally invests in a portfolio of common stocks,
U.S. government securities, and a variety of corporate fixed-income
obligations. If the Fund invests in foreign securities they generally are
Canadian Securities or American Depository receipts.

For the equity portion of its portfolio, the Fund emphasizes
investments in

CALLOUT
An investment in the Fund is not a bank deposit, and is not insured or
guaranteed by the FDIC or any other government agency.

<PAGE>

A Fund Overview cont.
common stocks with the potential for capital appreciation. These
stocks generally pay
regular dividends, although the Fund also may invest in
non-dividend-paying companies
if, in our opinion, they offer better prospects for capital
appreciation. Normally, the Fund
will invest a significant percentage (up to 75%) of its total assets
in

equity securities.

If the Fund invests in fixed-income, investment grade securities,
for temporary defensive purposes, they generally are U.S. government
obligations. If corporate fixed income securities are used, the securities
normally are rated A or higher by Moody's Investor Service, Inc.
("Moody's") or A or higher by Standard & Poor's ("S&P"). There is no
maximum limit on the amount of straight debt securities in which the
Fund may invest, and the Fund may invest up to 100% of its assets in
such securities (of any maturities) for temporary defensive purposes.

Main risks of investing.
The primary risks of investing in this Fund are:

Stock Market Risk. The value of the stocks and other securities
owned by American Growth Fund fluctuate depending on the
performance of the companies that issued them, general market economic
conditions, and investor confidence. In addition, if our assessment of a
company's to increase earnings faster than the rest of the market is not
correct, the securities in the portfolio may not increase in value, and could
even decrease in value.

Interest Rate Risk. When interest rates change, the value of the
fixed-income portion of the Fund will be affected. An increase in interest
rates tends to reduce the market value of debt securities.

Credit Risk. The value of the debt securities held by the Fund
fluctuates with the credit quality of the issuers of those securities. Credit
risk relates to the ability of the issuer to make payments of and interest
when due, including default risk.

Foreign Investment Risk. Investments in foreign securities involve
different

<PAGE>

A Fund Overview cont.
risks than U.S. investments, including fluctuations in currency
exchange rates, potential
unstable political and economic structures, reduced availability of
public information, and
lack of uniform financial reporting and regulatory practices similar
to those that apply to
U.S. issuers. The Fund will not invest more than 25% of its assets
in foreign securities. Securities of Canadian Issue and American
Depository Receipts are not subject to the 25% limitation.

Loss of money is a risk of investment in the Fund.

An investment in the Fund is not a bank deposit, and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
government agency.

Who may want to invest in the Fund?
The Fund may be a good investment if you are...
seeking long-term capital growth from your investment
comfortable with the Fund's price volatility
comfortable with the risks associated with the Fund's investment
strategy

Who may not want to invest in the Fund?
The Fund may not be a good investment if you are...
investing for a short period of time
uncomfortable with volatility in the value of your investment

<PAGE>

Fund Performance History

Set forth below is a graph comparing the Fund's performance (Class D) as
of the end of the ten most recently completed calendar years, to the
performance of the S&P 500 and the Consumer Price Index for the same
periods.

You should remember that unlike the Fund, the index is unmanaged and
doesn't reflect the actual costs of operating a mutual fund, such as the
costs of buying, selling, and holding securities. The Fund's past
performance does not necessarily indicate how it will perform in the
future.

Best calendar quarter 12/98 17.6%
Worst calendar quarter 09/98 -13.06%
Performance for the Fund's most recent calendar quarter ended 9/30/99
was -3.5%.
Sales loads or account fees are not reflected in the bar charts, and if they
were, returns would be less than those shown.

<PAGE>

Fund Performance History cont.

The following table sets forth the Fund's average annualized total returns
at maximum offering price for the one, five and ten year periods ended
12/ 31/98 and life of the class from commencement on 8/1/58 to 12/31/98
for the Fund's Class D shares. Returns for the Fund's Class A, Class B and
Class C shares are for the one year ended December 31, 1998, and period
from inception on March 1, 1996 to December 31, 1998.

<TABLE>
<CAPTION>
<S> <C> <C>
DOW JONES
RELEVANT AVERAGE ANNUALIZED INDUSTRIAL
PERIOD TOTAL RETURN AVERAGE
(DJIA)
Class D
1 year 0.00% 16.09%
5 year 8.55% 19.65%
10 year 11.75% 15.55%
Life of the Fund 10.28%
<S> <C> <C> <C> <C> <C>
<C>
Class A DJAI Class B DJAI Class
C DJAI
One year 0.23%* 16.09% 5.0% 16.09%
6.3%
16.09%
Since inception 19.4%* 20.18% 23.81%* 20.1%
23.9%* 20.1%
</TABLE>

Past performance is not predictive of future performance. See
'Performance Information' in the Statement of Additional Information for
a discussion of the method of calculating total return.

The Dow Jones Industrial Average is the most widely used market
indicator, composed of 30 large, actively traded issues.

<PAGE>

Fee Table

This table describes the fees and expenses that you may pay if you buy
and hold shares of the Fund.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
<C>
CLASS A CLASS B CLASS C
CLASS D
SHAREHOLDER FEES: (fees paid directly from your investment)
Maximum sales charge (load) imposed on
purchases (as a percentage of offering price)............ 5.75% None None
5.75%
Maximum deferred sales charge
(load) as a percentage of original
purchase price or redemption proceeds,
whichever is lower .............................................. None(b) 5% d 1% e

None(b)
Maximum sales charge (load) imposed on
reinvested dividends.............................................. None None None
None
Redemption Fees.................................................... None None None
None
Exchange Fee......................................................... None None None
None

ANNUAL FUND OPERATING EXPENSES (expenses that are deducted from Fund assets)(a):
Management fees................................................... 0.83% 0.83%

0.83%
0.83%
Distribution and Service (12b-1) fees...................... 0.30% 1.00%
1.00%
None
Other Expenses...................................................... 0.85% 0.90%

0.92%

0.89%
Total Annual Fund Operating Expenses........... 1.98% 2.73%
2.75%
1.72%

(a) Class B shares convert to Class A shares automatically
approximately seven years after initial purchase. See "Purchase of
Shares--Deferred Sales Charge Alternatives--Class B and Class C Shares".
(b) Purchases of Class A and Class D shares in amounts of $1,000,000
or more which are not subject to an initial sales charge generally will be
subject to a contingent deferred sales charge of 1.0% of amounts
redeemed within the first year of purchase.
(c) Each participant in a retirement plan account is charged a $20
annual service fee which is paid 50% to the Custodian of the retirement
plan and 50% to the Distributor to offset expenses incurred in servicing
such accounts.
(d) Contingent Deferred Sales Charge for the 1st 2 years are 5%, 3rd
and 4th years - 4%, 5th yr. - 3%, 6th yr, - 2%, 7th yr. - 1%.
(e) For one year.
</TABLE>

<PAGE>

Fee Table cont.
This example is intended to help you compare the cost of investing in the
Fund with the cost of investing in other mutual funds.

The example assumes that you invest $10,000 in the Fund for the time
periods indicated and then redeem all your shares at the end of those
periods. The example also assumes that your investment has a 5% return
each year and that the Fund's operating expenses remain the same.
Although your actual cost maybe higher or lower, based on these
assumptions your costs would be:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1 Year 3 Years 5 Years 10
Years
EXAMPLE:
Class A $764 $1,161 $1,581 $2,749
Class B $776 $1,247 $1,745 $2,788
*
Class C $378 $853 $1,454 $3,080
Class D $175 $542 $933 $2,030

You would pay the following expenses if you did not redeem you shares:

Class A $764 $1,161 $1,581 $2,749
Class B $276 $847 $1,445
$2,788*
Class C $278 $853 $1,454 $3,080
Class D $175 $542 $933 $2,030
</TABLE>

The Example does not reflect sales charges (loads) on reinvested
dividends [and other distributions]. If these sales charges (loads) were
included, your costs would be higher.

*Class B expenses for years 8-10 are based on Class A expenses,
since Class B shares automatically convert to Class A shares after 7 years.

<PAGE>

Information about the Fund

What is the Fund's investment objective?
The Fund's primary objective is growth of capital. Income as a factor in
portfolio selection is a secondary objective.

What are the Fund's Strategies?
In attempting to achieve its investment objective, the Fund will typically
invest at least 65% of its assets in common stocks and securities
convertible into common stocks traded on national securities exchanges or
over-the-counter. Investment Research Corporation, the Fund's investment
adviser (the Adviser) will choose common stocks (or convertible
securities) that it believes have a potential for capital appreciation because
of existing or anticipated economic conditions or because the securities
are considered undervalued or out of favor with investors or are expected
to increase in price over the short-term. Convertible debt securities will be
rated at least A by Moody's Investor Service or Standard and Poor's
Ratings Services, or, if unrated, will be comparable quality in the opinion
of the Adviser.

In pursuing the Fund's objective, the Adviser intends to take a
conservative approach to investing, balancing the preservation of capital
against potential gains. When the Adviser believes the securities the Fund
holds may decline in value, the Fund may sell them and, until such time
as the Adviser believes market conditions warrant otherwise, invest all or
part of the assets in corporate bonds, debentures (both short and long
term) or preferred stocks rated A or above (or, if unrated, of comparable
quality in the opinion of the Adviser), United States Government
securities, repurchase agreements whereby the underlying security is
issued by the United States Government or any agency thereof, or retain
funds in cash or cash equivalents. If the Fund takes these temporary
defensive positions that are inconsistent with the Fund's principal
investment strategies in attempting to respond to adverse market,
economic, political or other conditions, it may not achieve its investment
objective. The Fund's performance could be lower during periods when it
retains or invests its assets in these more defensive holdings. There are
market risks in all investments in securities, and the value of the Fund's
securities, and consequently the Fund's share price, will fluctuate.

We go beyond Wall Street analysis and perform our own intensive
in-house research to determine whether companies meet our growth
criteria. From time to time we meet company management teams and
other key staff face-to-face and tour corporate facilities and
manufacturing plants to get a complete picture of the company before we
invest.

Investing in any mutual fund involves risk, including the risk that you
may receive little or no return on your investment, and the risk that you
may lose part or all of the money you invest. Before you invest in a Fund
you should carefully evaluate the risks. Because of the nature of the
Fund, you should consider the investment to be a long-term investment
that typically provides the best results when held for a number of years.
The following are the principal risks you assume when investing in
American Growth Fund. Please see the Statement of Additional
Information for further discussion of these risks and other risks not
discussed here.

<PAGE>

Information about the Fund cont.
<TABLE>
<CAPTION>
<S> <C>
Risks
- ----------------------------------------
- --------------
Market risk is the risk that all or
a majority of the securities in a
certain market - like the stock or
bond market - will decline in
value because of factors such as
economic conditions, future
expectations or investor
confidence.
- ----------------------------------------
- --------------
Industry and security risk is the
risk that the value of securities in
a particular industry or the value
of an individual stock or bond
will decline because of changing
expectations for the performance
of that industry or for the
individual company issuing the
stock or bond.

- ----------------------------------------
- --------------
Interest rate risk is the risk that
securities will decrease in value
if interest rates rise. The risk is
greater for bonds with longer
maturities than for those with
shorter maturities.

Credit risk is the possibility that
a bond's issuer (or an entity that
insures a bond) will be unable to
make timely payments of interest
and principal.
- ----------------------------------------
- --------------
Foreign risk is the risk that
foreign securities may be
adversely affected by political
instability, changes in currency
exchange rates, foreign economic
conditions or inadequate
regulatory and accounting
standards.

- ----------------------------------------
- --------------
Liquidity risk is the possibility
that securities cannot be readily
sold, or can only be sold at a
price lower than the price that
the Fund has valued them.

How we strive to manage them
- ----------------------------------------
- --------------
We maintain a long-term
investment approach and focus
on stocks we believe can
appreciate over an extended time
frame regardless of interim
market fluctuations.

- ----------------------------------------
- --------------
We limit the amount of the
Fund's assets invested in any one
industry and in any individual
security. We do not invest more
than 5% of the Fund's total assets
in any one issuer nor do we
invest more than 25% in any one
industry. However, the Fund
may invest up to 100% of its
total assets in U.S. Government
Securities, such as Treasury Bills
or Treasury Notes. We also
follow a rigorous selection
process designed to identify
undervalued securities before
choosing securities for the
portfolio.
- ----------------------------------------
- --------------
When investing in debt
American Growth Fund generally
invests in U.S. government
securities only. If corporate debt
is used it is rated A or better.

- ----------------------------------------
- --------------
We typically invest only a small
portion of the Fund's portfolio in
foreign corporations through
American Depository Receipts.
We do not invest directly in
foreign securities. When we do
purchase ADRs, they are
generally denominated in U.S.
dollars and traded on a U.S.
exchange.
- ----------------------------------------
- --------------
We limit exposure to illiquid
securities.
<PAGE>

<PAGE>

Information about the Fund cont.
A repurchase agreement is a contract under which the seller of a security
agrees to buy it back at an agreed upon price and time in the future.

The Fund will enter into repurchase transactions only with parties who
meet creditworthiness standards approved by the Fund's board of
directors. The Fund will not invest more than 10% of its net assets in
repurchase agreements that mature in less than seven days, or securities
that are illiquid by virtue of the absence of a readily available market or
legal or contractual restrictions on resale.

High portfolio turnover (over 100%) may involve corresponding greater
brokerage commissions and other transaction costs which will be borne
directly by the Fund. In addition, high portfolio turnover may result in
increased short-term capital gains which, when distributed to share
holders, are treated as ordinary income.

Year 2000
As with other mutual funds, financial and business organizations and
individuals around the world, the Fund could be adversely affected if the
computer systems used by their service providers do not properly process
and calculate date-related information from and after January 1, 2000.
This is commonly known as the "Year 2000 Issue". The Fund is taking
steps to obtain satisfactory assurances that its major service providers are
taking extra steps reasonably designed to address the Year 2000 Issue on
the computer systems that the service providers use. However, there can
be no assurance that these steps will be sufficient to avoid any adverse
impact on the business of the Fund. Year 2000 may also have a negative
impact on companies in which the Fund invests. Foreign companies may
be more affected by Year 2000 issues then U.S. companies.

<PAGE>

Management

How is the Fund managed?
The daily operations of the Fund are managed by its officers subject to the
overall supervision and control of the board of directors. The Fund also
has a board of advisors which counsels the directors as to general
economic conditions and specific industries.

The Board of Directors
The Board of Directors meets at least quarterly to establish and oversee
procedures and review the performance of the investment adviser,
distributor and others responsible for services to the Fund.

The Investment Adviser
Since the organization of the Fund in 1958, its registered investment
adviser has been Investment Research Corporation (IRC). Investment
Research Corporation is located at 110 Sixteenth Street, Suite 1400,
Denver, Colorado 80202-4418.

The Adviser provides investment advice and recommendations
concerning the purchases and sales of the Fund's portfolio of securities. It
also furnishes statistical and analytical information and administrative and
clerical services to the Fund.

The Fund has an agreement to pay the Adviser an annual fee for its
services based on a percentage of the Fund's average net assets. Under the
investment advisory contract with IRC, the Adviser receives annual
compensation for investment advice, computed and paid monthly, equal
to 1% of the first $30 million of the Fund's average annual net assets and
0.75% of such assets in excess of $30 million. The Fund pays its own
operating expenses. For the fiscal year ended July 31, 1999, this fee
amounted to 0.83% of the average net assets on each of the Fund's four
classes.

Portfolio Managers
Robert Brody, the sole shareholder, President and Director of the Adviser,
has primary responsibility for making day-to-day investment decisions for
the Fund. Mr. Brody has acted in this capacity for the Fund since 1958.
He earned his undergraduate degree in business administration with an
emphasis in economics and finance from the University of Denver. He
later earned his masters' degree in both business administration and public
administration from the University of Denver. Mr. Brody is also President
and Director of the Fund's distributor, American Growth Fund Sponsors,
Inc.

<PAGE>

Management cont.

Timothy E. Taggart, Treasurer of the Fund and Executive Vice President
of the Adviser, acts as assistant portfolio manager and analyst to the Fund
President. He joined the Fund in 1983. Mr. Taggart has a MBA from the
University of Denver.

CALLOUT
American Growth Fund has a Code of Ethics designed to ensure that the
interests of fund shareholders come before the interests of the people who
manage the fund. Among other provisions, the Code of Ethics prohibits
Portfolio Managers and other investment personnel from buying securities
in an initial public offering or from profiting from the purchase and sale
of the same security within 2 calendar days. In addition, the Code of
Ethics requires portfolio managers and other employees with access to
information about the purchase or sale of securities by the Fund to obtain
approval before executing personal trades.

<PAGE>

Pricing of Fund Shares
The price you pay for shares will depend on when we receive your
purchase order. If we or an authorized agent receive your order before the
close of trading on the New York Stock Exchange on a business day, you
will pay that day's closing share price, which is based on the Fund's net
asset value. If we receive your order after the close of trading, you will pay
the next business day's price. A business day is any day that the New
York Stock Exchange is open for business. Currently the Exchange is
closed when the following holidays are observed: New Years Day, Martin
Luther King, Jr.'s Birthday, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving and Christmas. We reserve
the right to reject any purchase order.

We determine the Fund's net asset value (NAV) per share at the close of
trading of the New York Stock Exchange each business day that the
Exchange is open. We calculate this value by adding the market value of
all the securities and assets in the Fund's portfolio, deducting all
liabilities, and dividing the resulting number of shares outstanding. The
result is the net asset value per share. We price securities and other assets
for which market quotations are available at their market value. We price
debt securities on the basis of valuations provided to us by an independent
pricing service that uses methods approved by the board of directors. Any
debt securities that have a maturity of less than 60 days we price at
amortized cost. We price all other securities at their fair market value
using a method approved by the board of directors.

<PAGE>

Your Account
Investing in the Fund
You can choose from a number of share classes for the Fund. Because
each share class has a different combination of sales charges, fees, and
other features, you should consult your financial adviser to determine
which class best suits your investment goals and time frame. You may
also consult the Fund's Statement of Additional Information for more
details.

Choosing class A, B or C
Class A
Class A shares have an up-front sales charge of up to 5.75% that you pay
when you buy shares. The offering price for Class A shares includes the
front-end sales charge.
If you invest $50,000 or more, your front-end sales charge will be
reduced.
You may qualify for other reduced sales charges, as described in
"How to reduce your sales charge", and under certain circumstances the
sales charge may be waived.
Class A shares are also subject to an annual 12b-1 fee no greater
than 0.30% of average net assets, which is lower than the 12b-1 fee for
Class B and Class C shares.
Class A shares generally are not subject to a contingent deferred
sales charge unless they are sold in amounts of $1,000,000 or more at net
asset value and are redeemed within 1 year of purchase.
Class B
Class B shares have no up-front sales charge, so the full amount of
your purchase is invested in the Fund. However, you will pay a contingent
deferred sales charge if you redeem your shares within seven years after
you buy them.
If you redeem Class B shares during the first two years after you
buy them, the shares will be subject to a contingent deferred sales charge
of 5%. The contingent deferred sales charge is 4% during the third and
fourth years, 3% during the fifth year, 2% during the sixth year, and 1%
during the seventh year.
Under certain circumstances the contingent deferred sales charge
may be waived.
For approximately seven years after you buy your Class B shares,
they are subject to annual 12b-1 fees no greater than 1% of average daily
net assets, of which 0.25% are service fees paid to the Distributor, dealers
or others for providing services and maintaining accounts.
Because of the higher 12b-1 fees, Class B shares have higher
expenses and any dividends paid on these shares are lower than dividends
on Class A shares.
Approximately seven years after you buy them, Class B shares
automatically convert into Class A shares with a 12b-1 fee of no more
than 0.30%. Conversions

<PAGE>

Your Account cont.
may occur as late as three months after the eighth anniversary of purchase,
during which time
Class B's higher 12b-1 fees apply.
Class C
Class C shares have no up-front sales charge, so the full amount of
your purchase is invested in the Fund. However, you will pay a contingent
deferred sales charge if you redeem your shares within 12 months after
you buy them.
Under certain circumstances the contingent deferred sales charge
may be waived.
Class C shares are subject to an annual 12b-1 fee which may not
be greater than 1% of average daily net assets, of which 0.25% is service
fees and 0.75% is distribution fees paid to the distributor, dealers or
others for providing personal services and maintaining shareholder
accounts.
Because of the higher 12b-1 fees, Class C shares have higher
expenses and pay lower dividends than A shares.
Unlike Class B shares, Class C shares do not automatically convert
into another class.
Class D
Class D shares are offered to investors who owned Class D shares
as of March 1, 1996. They are also available to the Fund's Adviser, and
the Distributor's directors, certain institutional investors, corporations and
accounts managed by specific types of fiduciaries.
Class D shares have an up-front sales charge of 5.75% that you
pay when you buy the shares. The offering price for Class D shares
includes the front-end sales charge.
If you invest $50,000 or more, your front-end sales charge will be
reduced.
You may qualify for other reduced sales charges, as described in
"How to reduce your sales charge", and under certain circumstances the
sales charge may be waived.
Class D shares which are sold in amounts of $1,000,000 or more
at net asset value and are redeemed within one year of purchase are be
subject to a 1.0% contingent deferred sales charge.

The Fund's directors have adopted separate 12b-1 plans for Class A, B
and C that allow each class to pay distribution fees for the sales and
distributions of its shares. Because these fees are paid out of each Class's
assets on an ongoing basis, over time these fees will increase the cost of
your investment and may cost you more than paying other types of sales
charges.

<PAGE>

Your Account cont.
<TABLE>
<CAPTION>
Class A and D Sales Charges
<S> <C> <C> <C>
Amount of
purchase

Less than $50,000

$50,000 but less
than $100,000

$100,000 but less
than $250,000

$250,000 but less
than $500,000

$500,000 but less
than $1,000,000

$1,000,000 and
over*
<PAGE>
Sales charge as %
of offering price

5.75%

4.50%

3.50%

2.50%

2.00%

0.00%
<PAGE>
Sales charge as %
of amount
invested

6.10%

4.71%

3.63%

2.56%

2.04%

0.00%
<PAGE>
Dealer's
commission as
% of offering
price

5.00%

3.75%

2.75%

2.00%

1.60%

0.00%

* As shown above, there is no front-end sales charge when you purchase
$1 million or more of Class A shares. However, if your financial adviser is
paid a commission on your purchase, you may have to pay a limited
contingent deferred sales charge of 1% if you redeem these shares within
the first year.
</TABLE>

<PAGE>

Your Account cont.
How to reduce your sales charge
We offer a number of ways to reduce or eliminate the sales charge on
shares. Please refer to the Statement of Additional Information for detailed
information and eligibility requirements. You can also get additional
information from your financial adviser. You or your financial adviser
must notify us at the time you purchase shares if you are eligible for any
of these programs.

Program
<PAGE>
How it works
<PAGE>
Share Class

Letter of
intent

- ----------------
Rights of
Accumula-
tion

- ----------------
Reinvest-
ment of
redeemed
shares
- ----------------
SIMPLE
IRA, SEP
IRA,
SAR/SEP,
Prototype
Profit
Sharing,
Pension,
401(k),
SIMPLE
401(k),
403(b)(7)

Through a Letter of Intent you
agree to invest a certain
amount in American Growth
Fund over a 13 month period to
qualify for reduced front-end
sales charges.
- --------------------------------------
You can combine your
holdings or purchases of all
Classes in American Growth
Fund as well as the holdings
and purchases of your spouse
and children under 21 to
qualify for reduced front-end
sales charges.
- --------------------------------------
Up to 30 days after you redeem
shares, you can reinvest the
proceeds without paying a
front-end sales charge.
- --------------------------------------
These investment plans may
qualify for reduced sales
charges by combining the
purchases of all members of
the group. Members of these
groups may also qualify to
purchase shares without a
front-end sales charge and a
waiver of any contingent
deferred sales charge.

<PAGE>
A
X

- ---------
X

<PAGE>
B C
Although the Letter of
Intent and Rights of
Accumulation do not
apply to the Purchase of
Class B and C shares,
you can combine your
purchase of A shares with
your purchase of B and C
shares to fulfill your
Letter of Intent or qualify
for Rights of
Accumulation

- -------------------------------
Not available for Class B
and Class C

- -------------------------------
Not Available for Class B
and Class C
<PAGE>
D
X

- ---------
X

- ----------
X

</TABLE>

<PAGE>

Your Account cont.

How to buy shares

Through your financial adviser
Your financial adviser can handle all the details of purchasing shares,
including opening an account. Your adviser may charge a separate fee for
this service.

By mail
Complete an investment application and mail it with your check, made
payable to the Fund and class of shares you wish to purchase, to American
Growth Fund, 110 Sixteenth Street, Suite 1400, Denver CO, 80202. If you
are making an initial purchase by mail, you must include a completed
investment application (or an appropriate retirement plan application if
you are opening a retirement account) with your check.

By wire
Ask your bank to wire the amount you want to invest to State Street Bank
and Trust, ABA # 011000028, dda # 99041774. Include your account
number and the name of the Fund Class in which you want to invest. If
you are making an initial purchase by wire, you must call us so we can
assign you an account number.

By exchange
You can exchange all or part of your investment in one of the portfolios in
the cash account trust, a no load diversified open-end money market
account. Please keep in mind, however, that we can exchange only A and
D shares for non-retirement accounts. To open an account by exchange,
call the Shareholder Service Center at 1-800-525-2406. The money
market fund is separately managed from the Fund and is not affiliated
with the Fund.

Please read the Prospectus before investing.

<PAGE>

Your Account cont.

How to buy shares

cont.
Once you have completed an application, you can generally open an
account with no minimum initial investment and make additional
investments at any time in any amount.

Special Services
To help make investing with us as easy as possible, and to help you build
your investments, we offer the following special services.
Automatic Investing Plan - The Automatic Investing Plan allows you to
make regular monthly investments directly from your bank account.
Direct Deposit - With Direct Deposit you can make additional
investments through payroll deductions or recurring government or
private payments, such as Social Security payments or direct transfers
from your bank account.
Dividend Reinvestment Plan - Through our Dividend Reinvestment Plan,
you can have your distributions reinvested in your account. The shares
that you purchase through the Dividend Reinvestment Plan are not subject
to a front-end sales charge or to a contingent deferred sales charge. Under
most circumstances, you may reinvest dividends only into like classes of
shares.
Systematic Withdrawal Plan - Through our Systematic Withdrawal Plan
you can arrange a regular monthly or quarterly payment from your
account made to you or someone you designate. You may also have your
withdrawals deposited directly to your bank account through our
MoneyLine Direct Deposit Services.

Retirement plans
In addition to being an appropriate investment for your Individual
Retirement Account (IRA) and Roth IRA, shares in the Funds may be
suitable for group retirement plans. You may establish your IRA account
even if you are already a participant in an employer-sponsored retirement
plan. For more information on how shares in the Fund can play an
important role in your retirement planning or for details about group
plans, please consult your financial adviser, or call 1-800-525-2406.

<PAGE>

Your Account cont.

How to redeem shares

Through your financial adviser
Your financial adviser can handle all the details of redeeming shares.
Your adviser may charge a separate fee for this service.

By mail
You can redeem your shares (sell them back to the Fund) by mail by
writing to: American Growth Fund, 110 Sixteenth Street, Suite 1400,
Denver, CO, 80202. All owners of the account must sign the request, and
for redemptions of $5,000.00 or more, you must include a signature
guarantee for each owner. Signature guarantees are also required when
redemption proceeds are going to an address other than the address of
record on an account. A signature guarantee is a certification by a bank,
brokerage firm or other financial institution that a customer's signature is
valid; signature guarantees can be provided by members of the STAMP
program (a program made up of members who are authorized to issue
signature guarantees).

By wire
You can redeem $1,000.00 or more of your shares and have the proceeds
deposited directly to your bank account the next business day after we
receive your request. Bank information must be on file before you request
a wire redemption.

<PAGE>

Your Account cont.

How to redeem shares

cont.
If you hold your shares in certificates, you must submit the certificates
with your request to sell the shares. We recommend that you send your
certificates by certified mail.

When you send us a properly completed request to redeem or exchange
shares, you will receive the net asset value as determined on the business
day we receive your request if we receive it before the close of the NYSE,
etc. We will deduct any applicable contingent deferred sales charges. We
will send you a check, normally the next business day, but no later than
seven days after we receive your request to sell your shares. If you recently
purchased your shares by check, we will wait until your check has cleared,
which can take up to 15 days, before we send your redemption proceeds.

If you are required to pay a contingent deferred sales charge when you
redeem shares, the amount subject to the fee will be based on the shares'
net asset value when you purchased them or their net asset value when
you redeem them, whichever is less. This arrangement assures that you
will not pay a contingent deferred sales charge on any increase in the
value of your shares. The redemption price for purposes of this formula
will be the NAV of the shares you are actually redeeming.

Conversion of Class B Shares to Class A Shares. After approximately
seven years (the "Conversion Period"), Class B shares will be converted
automatically into Class A shares of the Fund. Class A shares are subject
to an ongoing service fee of 0.25% of average net assets and are subject to
a distribution fee of 0.05% of average net assets. Automatic conversion of
Class B shares into Class A shares will occur at least once each month (on
the "Conversion Date") on the basis of the relative net asset values of the
shares of the two classes on the Conversion Date, without the imposition
of any sales load, fee or other charge. Conversion of Class B shares to
Class A shares will not be deemed a purchase or sale of the shares for
Federal income tax purposes.

In addition, shares purchased through reinvestment of dividends and
distributions on Class B shares also will convert automatically to Class A
shares. The Conversion Date for dividend reinvestment shares will be
calculated taking into account the length of time the shares underlying
such reinvestment shares were outstanding. If at a Conversion Date the
conversion of Class B shares to Class A shares of the Fund in a single
account will result in less than $50 worth of Class B shares being left in
the account, all of the Class B shares of the Fund held in the account on
Conversion Date will be converted to Class A shares of the Fund.

<PAGE>

Your Account cont.

Share certificates for Class B shares of the Fund to be converted must be
delivered to the Transfer Agent at least one week prior to the Conversion
Date applicable to those shares. In the event such certificates are not
received by the Transfer Agent at least one week prior to the Conversion
Date, the related Class B shares will convert to Class A shares on the next
scheduled Conversion Date after such certificates are delivered.

Account minimum
If you redeem shares and your account balance falls below a minimum of
$250.00, and stays there for a period of 12 months or longer, the Fund
may redeem your account after 30 days' written notice to you.

Dividends, distributions and taxes
The Fund's policy is to declare income dividends and capital gains
distributions to its shareholders in December and to pay them in January
of each calendar year unless the board of directors of the Fund determines
that it is to the shareholders' benefit to make distributions on a different
basis.

Unless the shareholder at his or her option on notice to the Fund
previously requests payments in cash, income dividends and capital gains
distributions will be reinvested in Fund shares of the same class, at their
relative net asset values as of the business day next following the
distribution record date. If no instructions are given on the application
form, all income dividends and capital gains distributions will be
reinvested.

The Fund intends to make distributions that may be taxed as ordinary
income and capital gains (Capital gains may be taxable at different rates
depending on the length of the time the Fund holds its assets)

Tax Laws are subject to change, so we urge you to consult your tax
adviser about your particular tax situation and how it might be affected by
current tax law. The tax status of your dividends from this Fund is the
same whether you reinvest your dividends or receive them in cash.
Distributions from the Fund's long-term capital gains are taxable as
capital gains, while distributions from short- term capital gains and net
investment income are generally taxable as ordinary income. Any capital
gains may be taxable at different rates depending on the length of time the
Fund held the assets. In addition, you may be subject to state and local
taxes on distributions.

We will send you a statement each year by January 31 detailing the
amount and nature of all dividends and capital gains that you were paid
for the prior year.

<PAGE>

Financial Highlights

<TABLE>
<CAPTION>
<S> <C> <C> <C>
<C>
Class A Year Ended July 31,
1999 1998 1997
19965

Per Share Operating Data:
Net Asset Value,
Beginning of Period $9.49 $11.30$ 8.84
$ 9.21

Income (loss) from investment operations:
Net investment income (loss) (0.05) 0.043 0.143

-3
Net realized and unrealized gain (loss) 0.21 (0.90)
2.83 (0.37)
Total income (loss) from investment operations 0.16 (0.86)
2.97 (0.37)

Dividends and distributions to shareholders:
Dividends from net investment income (0.04) (0.06)4
(0.12)4 -
Book return of capital (0.04) - -

-
Distributions from net realized gain - (0.89)
(0.39) -
Total dividends and distributions
to shareholders (0.08) (0.95)
(0.51) -

Net Asset Value, End of Period $9.57 $ 9.49 $
11.30 $ 8.84

Total Return at Net Asset Value1 2.0% (7.6)%
34.6% (4.0)%
Ratios/Supplemental Data:

Net assets, end of period (in thousands) $8,635 $14,246
$10,536 $3,838

Ratio to average net assets:
Net investment income (loss) 0% 0.42%
1.28% 0.13%
Expenses 1.98% 1.77%
1.76% 2.06%

Portfolio Turnover Rate2 109.3% 103.5%
106.2% 163.1%

1 Assumes a hypothetical initial investment on the business day
before the first day of the fiscal period with all dividends and distributions
reinvested in additional shares on the reinvestment date and redemption at
the net asset value calculated on the last business day of the fiscal period.
Sales charges are not reflected in total returns. Total returns are not
annualized for periods of less than one full year.
2 The lesser of purchases and sales of portfolio securities for a
period, divided by the monthly average of the market value of securities
owned during the period. Securities with a maturity or expiration date at
the time of acquisition of one year or less are excluded from the
calculation. Purchases and sales of investment securities (other than
short-term securities) for the period ended July 31, 1999, aggregated
$115,980,505 and $159,871,400, respectively.
3 Net investment income (loss) per share is based upon relative
daily net asset values.
4 Distributions from net investment income per share are based
upon relative net asset values as of the business day following the
distribution record date.
5 For the period from March 1, 1996 (inception of offering) to
July 31, 1996.

</TABLE>

<PAGE>

Financial Highlights cont.

<TABLE>
<CAPTION>
<S> <C> <C> <C>
<C>
Class B Year Ended July 31,
1999 1998
1997 19965

Per Share Operating Data:
Net Asset Value,
Beginning of Period $9.37 $11.19 $
8.80 $ 9.21

Income (loss) from investment operations:
Net investment income (loss) (0.13) (0.02)3
0.073 (0.01)3
Net realized and unrealized gain (loss) 0.22 (0.90)
2.79 (0.40)
Total income (loss) from investment operations. 0.09 (0.92)
2.86 (0.41)

Dividends and distributions to shareholders:
Dividends from net investment income (0.01) (0.01)4 (0.09)4
- -
Book return of capital -6 - - -
Distributions from net realized gain - (0.89) (0.39)-
Total dividends and distributions
to shareholders (0.01) (0.90)
(0.48) -

Net Asset Value, End of Period $9.45 $ 9.37 $
11.18 $ 8.80

Total Return at Net Asset Value1 0.9% (8.2)%
33.5% (4.5)%

Ratios/Supplemental Data:
Net assets, end of period (in thousands) $11,265 $15,533
$10,962 $3,417

Ratio to average net assets:
Net investment income (loss) (0.01)% (0.32)%0.49%

(0.52)%
Expenses 2.73% 2.52%
2.46% 2.81%

Portfolio Turnover Rate2 109.3% 103.5%
106.2% 163.1%

</TABLE>

<PAGE>

Financial Highlights cont.

<TABLE>
<CAPTION>
<S> <C> <C> <C>
<C>
Class C Year Ended July 31,
1999 1998
1997 19965

Per Share Operating Data:
Net Asset Value,
Beginning of Period $9.37 $11.19 $
8.81 $ 9.21

Income (loss) from investment operations:
Net investment income (loss) (0.14) (0.02)3
0.073 -3
Net realized and unrealized gain (loss) 0.23 (0.90) 2.79

(0.40)
Total income (loss) from investment operations. 0.09 (0.92)
2.86 (0.40)

Dividends and distributions to shareholders:
Dividends from net investment income (0.01) (0.01)4
(0.09)4 -
Book return of capital (0.01) - -

-
Distributions from net realized gain - (0.89)
(0.39) -
Total dividends and distributions
to shareholders (0.02) (0.90)
(0.48) -

Net Asset Value, End of Period $9.44 $ 9.37 $
11.19 $ 8.81

Total Return at Net Asset Value1 0.9% (8.2)%
33.6% (4.3)%

Ratios/Supplemental Data:
Net assets, end of period (in thousands) $3,131 $4,498
$3,023 $367

Ratio to average net assets:
Net investment income (loss) (0.01)% (0.31)%
0.55% (0.63)%
Expenses 2.75% 2.52%
2.50% 2.97%

Portfolio Turnover Rate2 109.3% 103.5%
106.2% 163.1%

1 Assumes a hypothetical initial investment on the business day
before the first day of the fiscal period with all dividends and distributions
reinvested in additional shares on the reinvestment date and redemption at
the net asset value calculated on the last business day of the fiscal period.
Sales charges are not reflected in total returns. Total returns are not
annualized for periods of less than one full year.
2 The lesser of purchases and sales of portfolio securities for a
period, divided by the monthly average of the market value of securities
owned during the period. Securities with a maturity or expiration date at
the time of acquisition of one year or less are excluded from the
calculation. Purchases and sales of investment securities (other than
short-term securities) for the period ended July 31, 1999, aggregated
$115,980,505 and $159,871,400, respectively. 4
3 Net investment income (loss) per share is based upon relative
daily net asset values.
4 Distributions from net investment income per share are based
upon relative net asset values as of the business day following the
distribution record date.
5 For the period from March 1, 1996 (inception of offering) to
July 31, 1996.
</TABLE>

<PAGE>

Financial Highlights cont.

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
<C>
Class D Year Ended July 31,

Per Share Operating Data: 1999 1998 1997 1996
1995
Net Asset Value,
beginning of period...... $ 9.53 $ 11.33 $ 8.85 $
8.75 $ 9.34
Income(loss) from
investment operations:
Net investment income.... 0.01 0.073 0.173
0.033 0.21
Net realized and unrealized
gain (loss)............... 0.17 (0.90) 2.82 0.39

0.88
Total income (loss) from
investment operations..... 0.18 (0.83) 2.99 0.42

1.09
Dividends and distributions
to shareholders:
Dividends from net
investment income ....... (0.05) (0.08)4 (0.12)4
(0.12)4 (0.12)
Book return of capital (0.05) - - -
-
Distributions from net
realized gain............ - (0.89) (0.39)
(0.20) (1.56)
Total dividends and
distributions to
shareholders............. (0.10) (0.97) (0.51) (0.32)

(1.68)
Net Asset Value,
end of period........... $9.61 $9.53 $11.33
$8.85 $8.75
Total Return at Net Asset Value1... 1.9% (7.4)% 35.1%
4.8% 15.2%
Ratios/Supplemental Data:
Net assets, end of period
(in thousands)........... $74,111 $89,364 $115,106
$100,130 $90,538
Ratios to average net
assets:
Net investment income
(loss)................... 0.14% 0.63% 1.71%
0.47% 1.60%
Expenses................. 1.72% 1.54% 1.55%
1.63% 1.76%
Portfolio turnover
rate2.................... 109.3% 103.5% 106.2%
163.1% 173.0%

</TABLE>

<PAGE>

Financial Highlights cont.

Understanding the Financial Highlights
The tables on the preceding pages itemize what contributed to the changes
in share price during the period. They also show the changes in share
price for this period in comparison to changes over the last four fiscal
periods.

On a per share basis, the tables include as appropriate:

share prices at the beginning of the period
investment income and capital gains or losses
distributions of income and capital gains paid to shareholders
share prices at the end of the period

The tables also include some key statistics for the period as appropriate:

Total Return - the overall percentage of return of the Fund, assuming the
reinvestment
of all distributions
Expense Ratio - operating expenses as a percentage of average net assets
Net Investment Income Ratio - net investment income as a percentage of
average net
assets
Portfolio Turnover - the percentage of the Fund's buying and selling
activity

The Financial Highlights have been audited by KPMG LLP, independent
auditors. Their Independent Auditors' Report is included in the Fund's
annual report for the year ended July 31, 1999, which is incorporated by
reference into the Statement of Additional Information. Both are
available upon request and without charge from the Fund's Distributor.

<PAGE>

(American Growth Fund logo)
American Growth Fund, Inc.
110 Sixteenth Street, Suite 1400
Denver, CO 80202
800-525-2406
303-626-0600
303-626-0614 Fax

ADVISER

Investment Research Corporation
Administration Offices and Mailing Address:
110 Sixteenth Street, Suite 1400
Denver, CO 80202

DISTRIBUTOR

American Growth Fund Sponsors, Inc.
Administration Offices and Mailing Address:
110 Sixteenth Street, Suite 1400
Denver, CO 80202
(303) 626-0600
(800) 525-2406
(303) 626-0614 Fax

TRANSFER AGENT

Boston Financial Data Services, Inc.
Administrative Offices
Two Heritage Drive
North Quincy, Massachusetts, 02172

INDEPENDENT AUDITORS

KPMG LLP
707 17th Street, Suite 2300
Denver, Colorado 80202

CUSTODIAN

State Street Bank and Trust Company
One Heritage Drive
North Quincy, Massachusetts, 02171

Additional information about the Fund's investments is available in the
Fund's annual and semi-annual reports to shareholders. In the Fund's
shareholder reports, you will find a discussion of the market conditions
and investment strategies that significantly affected the Fund's
performance during the report period. You can find more detailed
information about the Fund in the current Statement of Additional
Information, which we have filed electronically with the securities and
Exchange Commission (SEC) and which is legally a part of this
prospectus. If you want a free copy of the Statement of Additional
Information, the annual or semi-annual report, or if you have any
questions about investing in this Fund, you can write to us at 110
Sixteenth Street, Suite 1400, Denver, CO 80202, or call toll-free
800-525-2406. You may also obtain additional information about the
Fund from your financial adviser.

You can find reports and other information about the Fund on the SEC
web site (http://www.sec.gov) or you can get copies of this information,
after payment of a duplicating fee, by writing to the Public Reference
Section of the SEC, Washington, D.C. 20549-6009. Information about the
Fund, including its Statement of Additional Information, can be reviewed
and copied at the Securities and Exchange Commission's Public
Reference Room in Washington D.C. You can get information on the
public reference room by calling the SEC at 1-800-SEC-0330.

Shareholder Service Center
Call the Shareholder Service Center Monday through Friday, 6:30 a.m. to
5:00 p.m. Mountain time.
For fund information; literature, price, and performance figures.
For information on existing regular investment accounts and retirement
plan accounts including wire investments; wire redemptions; telephone
redemptions and telephone exchanges.

Investment Company Act File #811-825

<PAGE>

AMERICAN GROWTH FUND, INC.

110 16th Street, Suite 1400, Denver, Colorado 80202
303-626-0600

STATEMENT OF ADDITIONAL INFORMATION

December 1, 1999

This Statement of Additional Information is not a prospectus. Prospective
investors should read this Statement of Additional Information only in
conjunction with the Prospectus of American Growth Fund, Inc. (the
"Fund") dated December 1, 1999. A copy of the Prospectus may be
obtained by writing American Growth Fund Sponsors, Inc. (the
"Distributor"), 110 16th Street, Suite 1400, Denver, Colorado 80202.

AMERICAN GROWTH FUND, INC.
110 16th Street, Suite 1400, Denver, Colorado, 80202
303-626-0600
800-525-2406

ADDITIONAL INVESTMENT INFORMATION. . . . . . . . . . . . . B-2
AUTOMATIC CASH WITHDRAWAL PLAN . . . . . . . . . . . . . . B-7
BROKERAGE. . . . . . . . . . . . . . . . . . . . . . . . . B-9
CALCULATION OF NET ASSET VALUE . . . . . . . . . . . . . . B-9
CUSTODIAN AND INDEPENDENT ACCOUNTANTS. . . . . . B-9
DISTRIBUTION OF SHARES . . . . . . . . . . . . . . . . . . B-5
DISTRIBUTION PLANS . . . . . . . . . . . . . . . . . . . . B-8
DIVIDENDS, DISTRIBUTIONS AND TAXES . . . . . . . . . . . . . B-10
FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . B-20
INDEPENDENT AUDITORS' REPORT . . . . . . . . . . . . . . . . B-28
INVESTMENT ADVISORY AGREEMENT. . . . . . . . . . . . . . . B-4
MANAGEMENT OF THE FUND . . . . . . . . . . . . . . . . . . B-3
PERFORMANCE DATA . . . . . . . . . . . . . . . . . . . . . . B-11
RETIREMENT PLANS . . . . . . . . . . . . . . . . . . . . . B-7

<PAGE>

ADDITIONAL INVESTMENT INFORMATION

The following information supplements the information in American
Growth Fund, Inc.'s (the Fund's) Prospectus under the heading
"Objectives and Investment Policy."
The Fund is subject to certain restrictions on its investment policies,
including the following:

1. No securities may be purchased on margin, the Fund may not sell
securities short, and will not participate in a joint or joint and several
basis with others in any securities trading account.

2. Not more than 5% of the value of the assets of the Fund at the time of
investment may be invested in securities of any one issuer other than
securities issued by the United States government.

3. Not more than 10% of any class of voting securities or other securities
of any one issuer may be held in the portfolio of the Fund.

4. The Fund cannot act as an underwriter of securities of other issuers.

5. The Fund cannot borrow money except from a bank as a temporary
measure for extraordinary or emergency purposes, and then only in an
amount not to exceed 10% of its total assets taken at cost, or mortgage or
pledge any of its assets.

6. The Fund cannot make or purchase loans to any person including real
estate mortgage loans, other than through the purchase of a portion of
publicly distributed debt securities pursuant to the investment policy of
the Fund.

7. The Fund cannot issue senior securities or purchase the securities of
another investment company or investment trust except in the open
market where no profit to a sponsor or dealer, other than the customary
broker's commission, results from such purchase (but the total of such
investment shall not exceed 10% of the net assets of the Fund), or except
when such purchase is part of a plan of merger or consolidation. The Fund
may purchase securities of other investment companies in the open market
if the purchase involves only customary brokers' commissions and only if
immediately thereafter (i) no more than 3% of the voting securities of any
one investment company are owned by the Fund, (ii) no more than 5% of
the value of the total assets of the Fund would be invested in any one
investment company, and (iii) no more than 10% of the value of the total
assets of the Fund would be invested in the securities of such investment
companies. Should the Fund purchase Securities of other investment
companies, the Fund's shareholders may incur additional management and
distribution fees.

8. The Fund cannot invest in the securities of issuers which have been in
operation for less than three years if such purchase at the time thereof
would cause more than 5% of the net assets of the Fund to be so invested,
and in any event, any such investments must be limited to utility or
pipeline companies.

9. The Fund cannot invest in companies for the purpose of exercising
management or control.

10. The Fund cannot deal in real estate, commodities or commodity
contracts.

11. In applying its restrictions on concentration of investments in any one
industry, the Fund uses industry classifications based, where applicable,
on Bridge Information Systems, Reuters, the S&P Stock Guide published
by Standard & Poor's, the O'Neil Database published by William O'Neil &
Co., Inc., information obtained from Value Line, Bloomberg L.P. and
Moody's International, and/or the prospectus of the issuing company,
and/or other recognized classification resources. Selection of an
appropriate industry classification resource will be made by management
in the exercise of its reasonable discretion. The Fund will not concentrate
its investments in any particular industry nor will it purchase a security if,
as a result of such purchase, more than 25% of its assets will be invested
in a particular industry.

12. The Fund cannot invest in puts, calls, straddles, spreads or any
combination thereof.

The foregoing policies can be changed only by approval of a
majority of the outstanding shares of the Fund, which means the lesser of
(i) 67% of the shares represented at a meeting at which more than 50% of
the outstanding shares are present in person or by proxy, or (ii) more than
50% of the outstanding shares.

When the Fund makes temporary investments in U.S. Government
securities, it ordinarily will purchase Treasury Bills, Notes, or Bonds. The
Fund may make temporary investments in repurchase agreements where
the underlying security is issued or guaranteed by the U.S. Government or
an agency thereof. The Fund will not invest more than 10% of its assets in
repurchase agreements maturing in more than seven days, or securities
that are illiquid by virtue of the absence of a readily available market or
legal or contractual restrictions on resale. The Fund will not invest in real
estate limited partnership interests, other than interests in readily
marketable real estate investment trusts. The Fund will not invest in oil,
gas or mineral leases, or invest more than 5% of its net assets in warrants
or rights, valued at the lower of cost or market, nor more than 2% of its
net assets in warrants or rights (valued on the same basis) which are not
listed on the New York or American Stock Exchanges.

Year 2000 Issue. Many computer systems in use today cannot
recognize the year 2000, and could, unless corrected, revert to 1900 or
cease to function beginning January 1, 2000, due to the manner in which
dates were encoded and are calculated. The markets for securities in
which the Fund invests may be detrimentally affected by computer
failures affecting portfolio investments pricing or trading of securities
beginning January 1, 2000. Improperly functioning trading systems may
result in settlement problems and liquidity issues. In addition, corporate
and governmental data processing errors may result in production issues
for individual companies and overall economic uncertainties. Earnings of
individual issuers may be affected by remediation

<PAGE>

costs, which could be substantial. The Fund and its service providers have
been actively working on making necessary changes to their computer
systems to address the year 2000 issue and expect that their systems will
be compliant before January 1, 2000, but there can be no assurance that
they will be successful. Year 2000 may also have a negative impact on
companies in which the Fund invests. Foreign companies may be more
affected by Year 2000 issues.

MANAGEMENT OF THE FUND

The day-to-day operations of the Fund are managed by its officers subject
to the overall supervision and control of the board of directors. The Fund
also has a board of advisors which counsels the directors as to general
economic conditions and specific industries. The following information
about the directors, officers and advisors of the Fund includes their
principal occupations for the past five years:
<TABLE>
<CAPTION>
<S> <C> <C>

POSITION(S) HELD PRINCIPAL
OCCUPATIONS
NAME, ADDRESS AND AGE WITH FUND DURING PAST
5 YEARS

Robert Brody* (74) President, Director See below for
affiliations
110 Sixteenth Street, Suite 1400 with Investment
Research
Corporation
Denver, Colorado (the Adviser or
IRC) and
Distributor

Michael J. Baum, Jr. (82) Director Investor in
securities and
1321 Bannock St. real estate;
engaged in
Denver, Colorado mortgage
financing,
president
of Baum
Securities, M &
N
Investment
Company and
First
Ave. Corp. all of
which are real
estate investment
companies.

Eddie R. Bush (60) Director Certified Public
Accountant
1400 W. 122nd Ave.
Suite 220
Westminster, Colorado

Harold Rosen (72) Director Owner of Bi-Rite
Furniture
#1 Middle Road Stores.
Englewood, CO

Timothy E. Taggart (46) Treasurer Principal
financial and
110 Sixteenth Street, Suite 1400 accounting
officer,
Denver, Colorado employee of
Adviser since
1983.
See below for
affiliation with
Distributor.

D. Leann Baird (52) Secretary Employee of
Adviser since
110 Sixteenth Street, Suite 1400 1977. See below
for
Denver, CO affiliations with
Adviser and
Distributor

William D. Farr (89) Advisory Board Member President and
Director
P.O. Box 878 of Farr Farms
Company,
Greeley, Colorado Chairman of the
Board of
Northern
Colorado
Water
Conservancy,
Past President
of the
National
Cattlemen's
Association,
Board
Member of
Greeley Water
Board.
</TABLE>

*Robert Brody is an "interested person" of the Fund as defined by the
Investment Company Act of 1940.

Robert Brody is the sole shareholder, president and a director of
the Adviser. He is also president and a director of the Distributor.
Timothy E. Taggart is a director and secretary of the Distributor and
director of the Adviser. D. Leann Baird is secretary and director of the
Adviser.

All officers, directors and members of the Fund's advisory board in
the aggregate (a total of 7) received total compensation of $4,700, from
the Fund in fiscal year 1999. Directors of the Fund except Mr. Brody were
compensated at the rate of $400 per meeting attended; Advisory Board
members were compensated at the rate of $200 per meeting attended.

Out-of-town directors are also reimbursed for their travel expenses
to meetings.

During the year ended July 31,1999, Messrs. Baum, Bush, Strauss,
and Rosen, the only directors other than Mr. Brody serving during that
year, were each paid the following compensation by the Fund:

Aggregate Compensation Paid by the Fund

<PAGE>

Name of Director During the Fiscal Year Ended July 31,
1999.

Michael J. Baum, Jr. $2,000

Eddie R. Bush $1,500

Harold Rosen $1,200
</TABLE>

In addition, for the fiscal year ended July 31, 1999, Messrs. Farr
and Johns served as advisory board members and received fees of $800
and $400 from the Fund.

None of the above named persons received any retirement benefits
or other form of deferred compensation from the Fund. There are no other
funds that together with the Fund constitute a Fund Complex.

As of November 24, 1999, no person owned more than 5% of the
Fund and all officers and directors as a group (a total of 6) owned directly
280,772 of its shares or 3.0% of shares outstanding. Together, directly
and indirectly, all the officers and directors as a group owned 300,532
shares or 3.2% of all shares outstanding.

As of November 24, 1999, officers, directors and members of the
advisory board and their relatives owned of record and beneficially Fund
shares with net asset value of approximately $3,110,506 representing
approximately 3.3% of the total net assets of the Fund.

INVESTMENT ADVISORY AGREEMENT

Since the organization of the Fund in 1958, its investment adviser
has been Investment Research Corporation (the "Adviser"), 110 16th
Street, Suite 1400, Denver, Colorado 80202. Robert Brody, the sole
shareholder, president and a director of the Adviser, is a control person of
the Adviser.

Under the terms of its advisory agreement with the Fund, the
Adviser is paid an annual fee of one percent of the Fund's average net
assets up to $30,000,000 of such assets and three-fourths of one percent
of such assets above $30,000,000. This fee and all other expenses of the
Fund (subject to the limitations described below) are paid by the Fund.
The fee is computed daily based on the assets and paid on the fifth day of
the ensuing month. For this fee the Adviser manages the portfolio of the
Fund and furnishes such statistical and analytical information as the Fund
may reasonably require.

The advisory agreement requires the Fund to pay its own expenses
subject to the limitations set by the securities laws in effect from time to
time in the states in which the Fund's securities are then registered for sale
or are exempt from registration and offered for sale. The categories of
expenses paid by the Fund are set forth in detail in the Fund's financial
statements. Currently the Fund's securities are either registered for sale or
are exempt from registration and offered for sale in all fifty states, the
District of Columbia and the Commonwealth of Puerto Rico. State laws
governing the limitation on expenses may change from time to time, and
management of the Fund will comply with the most restrictive state law.

Total advisory fees paid by the Fund to the Adviser in fiscal years
1997, 1998 and 1999 were $978,027, $1,102,795, and $918,554,
resulting in management fees of 0.80%, 0.81% and 0.83% of average
net assets, respectively.

The advisory agreement will continue from year to year so long as
such continuance is specifically approved annually either by the vote of
the entire board of directors of the Fund or by the vote of a majority of the
outstanding shares of the Fund, and in either case by the vote of a
majority of the directors who are not interested persons of the Fund or the
Adviser cast in person at a meeting called for the purpose of voting on
such approval. The advisory agreement may be canceled without penalty
by either party upon 60 days' notice and automatically terminates in the
event of assignment.

DISTRIBUTION OF SHARES

The Fund's distributor is American Growth Fund Sponsors, Inc.,
(Sponsors or the Distributor) 110 16th Street, Suite 1400, Denver,
Colorado 80202, which continuously sells the Fund's shares to dealers and
directly to investors. The offering of the Fund's shares is subject to
withdrawal or cancellation at any time. The Fund and the Distributor
reserve the right to reject any order for any reason.

The Fund offers four classes of shares with a par value $.01 per
share. The shares are fully paid and non-assessable when issued. Each
Class A, Class B, Class C and Class D share of the Fund represents an
identical interest in the investment portfolio of the Fund and has the same
rights, except that Class A, Class B and Class C shares bear the expenses
of ongoing service fees and distribution fees, Class B and Class C may
bear the additional incremental transfer agency costs resulting from the
deferred sales charge arrangements, and Class B shares have a conversion
feature. The fees that are imposed on Class A, Class B and Class C shares
are imposed directly against those classes and not against all assets of the
Fund and, accordingly, such charges do not affect the net asset value of
any other class or have any impact on investors choosing another sales
charge option. Dividends paid by the Fund for each class of shares are
calculated in the same manner at the same time and will differ only to the
extent that distribution and service plan fees and any incremental transfer
agency or other costs relating to a particular class are borne exclusively by
that class. Class A, Class B, and Class C shares each have exclusive
voting rights with respect to the distribution and service plan adopted with
respect to such class pursuant to which distribution and service plan fees
are paid, except that because Class B shares convert automatically to
Class A shares approximately seven years after issuance. The distribution
and service plan for Class A shares is also subject to the right of Class B
shareholders to vote with respect to it.

<PAGE>

The Fund has entered into separate distribution agreements with
the Distributor in connection with the offering of each class of shares of
the Fund (the "Distribution Agreements"). The Distributor has made no
firm commitment to take any Fund shares from the Fund and is permitted
to buy only sufficient shares to fill unconditional orders placed with it by
investors and selected investment dealers. The Distribution Agreements
obligate the Distributor to pay certain expenses in connection with the
offering of each class of shares of the Fund. After the prospectuses,
statements of additional information and periodic reports have been
prepared, set in type and mailed to shareholders, the Distributor pays for
the printing and distribution of copies thereof used in connection with the
offering to dealers and investors. The Distributor also pays for other
supplementary sales literature and advertising costs.

Fund shares may be purchased at the public offering price through
the Distributor or through broker-dealers who are members of the
National Association of Securities Dealers, Inc. who have sales
agreements with the Distributer. The Prospectus contains information
concerning how the public offering price of the Fund's shares is
determined. The Distributor allows dealers discounts or concessions from
the applicable public offering price on Class A and Class D shares.
Concessions are alike for all dealers in the United States and its territories,
but the Distributor may pay additional compensation for special services.
On direct sales to customers through its own sales representatives, the
Distributor pays to them such portion of the sales commission as it deems
appropriate.

Initial Sales Alternatives - Class A and Class D Shares. The gross
sales charges for the sale of Class D shares for the fiscal years ended July
31, 1997, 1998 and 1999 were $156,121, $176,815, and $46,598
respectively. The gross sales charges for the sale of Class A shares for the
fiscal years ended July 31, 1997, 1998 and 1999 was $313,777, $458,078
and $135,051, respectively. For the fiscal years ended July 31, 1997,
1998 and 1999, for the sale of Class D shares the Distributor retained
$92,772, $89,162 and $27,755 respectively, as its portion of
commissions paid by purchasers of the Fund's shares after allowing as
concessions to other dealers $63,349, $87,652 and $17,790 respectively.
For the period ended July 31, 1999, for the sale of Class A shares the
Distributor retained $29,250 as its portion of commissions paid by
purchases of the Fund's shares after allowing as concession to other
dealers $26,680. During the same periods no commissions were paid to
the Distributor on sales and purchases of portfolio securities.

The following sample calculation of the public offering price of
one Class A and Class D share of the Fund is based on the net asset value
of one Class A and Class D share as of July 31, 1999 and a transaction
with an applicable sales charge at the maximum rate of 5.75%.

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Net asset value per share Class D Class A Class
B Class C
(Total net assets/
Total shares outstanding) $ 9.61 $ 9.57 $ 9.45

$ 9.44
(5.75% of offering price) 0.59 0.58 0.00

0.00
Maximum offering price per share $ 10.20 $10.15 $ 9.45

$ 9.44
</TABLE>

Investment Plans. Investors have flexibility in the purchase of
shares under the Fund's investment plans. They may make single,
lump-sum investments and they may add to their accounts on a regular
basis, including through reinvestment of dividends and capital gains
distributions.

An investor may elect on his application to have all dividends and
capital gains distributions reinvested or take income dividends in cash
and have any capital gains distributions reinvested. An investor may also
retain the option of electing to take any year's capital gains distribution in
cash by notifying the Fund of his choice to do so in writing.

The Internal Revenue Code contains limitations and restrictions
upon participation in all forms of qualified plans and for contributions
made to retirement plans for tax years beginning after December 31, 1986.
Consultation with an attorney or a competent tax advisor regarding
retirement plans is recommended. A discussion of the various qualified
plans offered by the Fund is contained elsewhere in this Statement of
Additional Information.

Investor's Right of Accumulation. For Class A and Class D
shareholders the value of all assets held the day an order is received which
qualifies for rights of accumulation may be combined to determine the
aggregate investment of "any person" in ascertaining the sales charge
applicable to each subsequent purchase. For example, for any person who
has previously purchased and still holds Class A or Class D shares,
respectively, with a value (at current offering price) of $20,000 on which
he paid a charge of 5.75% and subsequently purchases $80,000 of
additional Class A or Class D shares, respectively, the charge applicable
to the trade of $80,000 would be 3.50%.

The Distributor must be notified by the shareholder when a
purchase takes place if the shareholder wishes to qualify for the reduced
charge on the basis of previous purchases. The reduced sales charge is
inapplicable to income dividends and capital gain distributions which are
reinvested at net asset value. The reduced charge is subject to
confirmation of the investor's holdings through a check of the Fund's
records.

Letter of Intent. For Class A and Class D shareholders any person
(as defined under "Calculation of Net Asset Value") may sign a letter of
intent covering purchases to be made within a period of thirteen months
(which may include the preceding 90 days) and thereby become eligible
for the reduced sales charge applicable to the total amount purchased,
provided such amount is not less than $50,000. After a letter of intent is
established, each future purchase will be made at the reduced sales charge
applicable to the intended dollar amount noted on the application.
Reinvestment of income dividends and capital gains distributions is not
considered a purchase hereunder. If, within the 13-month period,
ownership of the designated class of Fund shares does not reach the
intended dollar amount, the difference between what you paid for such
shares and the amount which would have been paid for them must be
promptly paid as if the normal sales commission applicable to such
purchases had been

<PAGE>

charged. The difference between the sales charge as applied to a regular
purchase and the sales charge as applied on the letter of intent will be held
in escrow in the form of shares (computed to the nearest full share) and
can be retained by the Fund. If during the 13-month period the intended
dollar amount is increased, a new or revised letter of intent must be signed
and complied with to receive a further sales charge reduction. This
reduction will apply retroactively to all shares theretofore purchased under
this letter.

Automatic Investment Plan. After making an initial investment, a
shareholder may make additional purchases at any time either through the
shareholder's securities dealer, or by mail directly to the transfer agent.
Voluntary accumulation also can be made through a service known as the
Fund's Automatic Investment Plan whereby the Fund is authorized
through pre-authorized checks or automated clearing house debits to
charge the regular bank account of the shareholder on a regular basis to
provide systematic additions to the account of such shareholder.

Deferred Sales Charges. As discussed in the Prospectus, Class B
shares redeemed within seven years of purchase, Class C shares redeemed
within one year or purchase, and certain purchases of Class A and Class D
shares at net asset value and redeemed within one year of purchase, are
each subject to a CDSC. However, under most circumstances, the charge
is waived on redemptions in connection with certain post-retirement
withdrawals from an IRA or other retirement plan or following the death
or disability of a shareholder. Redemptions for which the waiver applies
are: (a) any partial or complete redemption in connection with a
distribution following retirement under a tax-deferred retirement plan or
attaining age 59 1/2 in the case of an IRA or other retirement plan, or part
of a series of equal periodic payments (not less frequently than annually)
made for life (or life expectancy) or any redemption resulting from the
tax-free return of an excess contribution to an IRA; or (b) any partial or
complete redemption following the death or disability (as defined in the
Internal Revenue Code) of a shareholder (including one who owns the
shares as joint tenant with his or her spouse), provided the redemption is
requested within one year of the death or initial determination of
disability. The contingent deferred sales charge (CDSC) is waived on
redemption of shares in connection with a Systematic Withdrawal Plan
where the total withdrawal is less then 12% of the previous year value or
of the original purchase, whichever is greater.

For the fiscal year ended July 31, 1999, the Distributor received
CDSCs of $37,273, with respect to redemptions of Class B shares, all of
which was paid to the Distributor. For the fiscal year ended July 31, 1999
the Distributor received no CDSCs with respect to redemptions of Class C
shares.

From time to time the Distributor may pay a finders fee to Selling
Group Members not to exceed 1% of the purchase for net asset value
trades over one million dollars.

AUTOMATIC CASH WITHDRAWAL PLAN

The Automatic Withdrawal Plan is designed as a convenience for
those shareholders wishing to receive a stated amount of money at regular
intervals from their investment in shares of the Fund. A Plan is opened by
completing an application for such Plan and surrendering to the Fund all
certificates issued to the investor for Fund shares. No minimum number of
shares or minimum withdrawal amount is required. Withdrawals are made
from investment income dividends paid on shares held under the Plan
and, if these are not sufficient, from the proceeds from redemption of such
number of shares as may be necessary to make periodic payments. As
such redemptions involve the use of capital, over a period of time they
will very likely exhaust the share balance of an account held under a Plan
and may result in capital gains taxable to the investor. Use of a Plan
cannot assure realization of investment objectives, including capital
growth or protection against loss. Price determinations with respect to
share redemptions are generally made on the 23rd of each month or the
next business day thereafter. Proceeds from such transactions are
generally mailed three business days following such transaction date.

Withdrawals concurrent with purchases of additional shares may
be inadvisable because of duplication of sales charges. Single payment
purchases of shares in amounts less than $5,000 in combination with a
withdrawal plan will not ordinarily be permitted. No withdrawal plan will
be permitted if the investor is also a purchaser under a continuous
investment plan. Either the owner or the Fund may terminate the Plan at
any time, for any reason, by written notice to the other.

Investment income dividends paid on shares held in a withdrawal
plan account will be credited to such account and reinvested in additional
Fund shares. Any optional capital gains distributions will be taken in
shares, which will be added to the share balance held in the Plan account.
Dividends and distributions paid into the Plan account are taxable for
federal income tax purposes.

RETIREMENT PLANS

The Fund makes available retirement plan services to all classes of
its shares. Investors in the Fund can establish accounts in any one of the
retirement plans offered by the Fund. Each participant in a retirement plan
account is charged a $20 annual service fee to offset expenses incurred in
servicing such accounts. Dividends and capital gains distributions are
automatically reinvested. Under each of the plans, the Fund's retirement
plan custodian or successor custodian provides custodial services required
by the Internal Revenue Code (the "Code") including the filing of reports
with the Internal Revenue Service. Consultation with an attorney or
competent tax advisor is recommended before establishing any retirement
plan. Brochures which describe the following retirement plans and contain
IRS model or prototype plan documents may be obtained from the
Distributor. The Distributor, in its sole discretion, may reimburse a Fund
shareholder for any penalties which the shareholder may incur in
transferring assets from a retirement plan established with a third party to
one or more of the retirement plans offered by the Fund. No such
reimbursement shall exceed the amount of the dealer concession which
the Distributor would otherwise pay to a dealer in conjunction with the
investment by the shareholders in the Fund's retirement plan(s).

<PAGE>

INDIVIDUAL RETIREMENT ACCOUNTS. The Fund makes
available a model Individual Retirement Account ("IRA") under Section
408(a) of the Code on IRS Form 5305-A. A qualified individual may
invest annually in an IRA. Persons who are not eligible to make fully
deductible contributions will be able to make non-deductible
contributions to their IRAs, subject to limits specified in the Code, to the
extent that deductible contributions are not allowed. IRA earnings on
non-deductible, as well as deductible, contributions will accumulate tax
deferred. An IRA account may also be established in a tax-free "roll-over"
transfer within 60 days of receipt of a lump sum distribution from a
qualified pension plan resulting from severance of employment or
termination by the employer of such a plan.

The Code provides for penalties for violation of certain of its
provisions including, but not limited to, contributions in excess of the
stipulated limitations, improper distributions and certain prohibited
transactions. To afford plan holders the right of revocation described in
the IRA disclosure statements, investments made in a newly established
IRA may be canceled within seven days of the date the plan holder signed
the Custodial Agreement by writing the Fund's retirement plan custodian.

SIMPLIFIED EMPLOYEE PENSION PLANS. The Fund makes
available model Simplified Employee Pension Plans ("SEPs") on IRS
Form 5305-SEP and Salary Reduction Simplified Employee Pension
Plans ("SARSEPs") on IRS Form 5305A-SEP. By adopting a SEP,
employers may contribute to each eligible employee's own IRA.
Commencing with tax years beginning after December 31, 1986, salary
reduction contributions may be made to SEPs maintained by employers
meeting certain qualifications specified in the Code.

TEACHER AND NON-PROFIT EMPLOYEE RETIREMENT
PLAN. Employees of tax exempt, charitable, religious and educational
organizations described in Section 501(c)(3) of the Code, and employees
of public school systems and state and local educational institutions, may
establish a retirement plan under Section 403(b) of the Code.

PROTOTYPE MONEY PURCHASE AND PROFIT-SHARING
PENSION PLANS. Available generally to employers, including
self-employed individuals, partnerships, subchapter S corporations and
corporations.

DISTRIBUTION PLANS

Reference is made to "Purchase of Shares--Distribution Plans" in
the Prospectus for certain information with respect to separate distribution
plans for Class A, Class B, and Class C shares pursuant to Rule 12b-1
under the Investment Company Act of the Fund (each a "Distribution
Plan") and with respect to the shareholder service and distribution fees
paid by the Fund to the Distributor with respect to such classes.

Payments of the shareholder service fees and/or distribution fees
are subject to the provisions of Rule 12b-1 under the Investment
Company Act of 1940. Among other things, each Distribution Plan
provides that the Distributor shall provide and the Directors shall review
quarterly reports of the disbursement of the service fees and/or
distribution fees paid to the Distributor. In their consideration of each
Distribution Plan, the Directors must consider all factors they deem
relevant, including information as to the benefits of the Distribution Plan
to the Fund and its related class of shareholders. Each Distribution Plan
further provides that, so long as the Distribution Plan remains in effect,
the selection and nomination of Directors who are not "interested persons"
of the Fund, as defined in the Investment Company Act (the "Independent
Directors"), shall be committed to the discretion of the Independent
Directors then in office. In approving each Distribution Plan in
accordance with Rule 12b-1, the Independent Directors considered the
potential benefits that the Distribution Plans could provide to the Fund
and the respective classes and their shareholders, and concluded that there
is reasonable likelihood that such Distribution Plan will benefit the Fund
and its shareholders. Each Distribution Plan can be terminated at any
time, without penalty, by the vote of a majority of the Independent
Directors or by the vote of the holders of a majority of the outstanding
voting securities of the applicable class. A Distribution Plan cannot be
amended to increase materially the amount to be spent thereunder without
the approval of the applicable class of shareholders, and all material
amendments are required to be approved by the vote of Directors,
including a majority of the Independent Directors who have no direct or
indirect financial interest in such Distribution Plan, cast in person at a
meeting called for that purpose. Rule 12b-1 further requires that the Fund
preserve copies of each Distribution Plan and any report made pursuant to
such plan for a period of not less than six years from the date of such
Distribution Plan or such report, the first two years in an easily accessible
place.

For the fiscal year ended July 31, 1999, the Fund paid the
Distributor $28,917 (based on average net assets relating to the Class A
shares of approximately $11,307,203) pursuant to the Class A
Distribution Plan, $26,680 of which was paid to other Broker-Dealers for
providing account maintenance and distribution-related services in
connection with the Class A shares and $2,569 was retained by the
Distributor. For the fiscal year ended July 31, 1999, the Fund paid the
Distributor $142,192 (based on average net assets relating to the Class B
shares of approximately $13,986,516) pursuant to the Class B
Distribution Plan, all of which was paid to other Broker-Dealers for
providing account maintenance and distribution-related services in
connection with the Class B shares. For the fiscal year ended July 31,
1999, the Fund paid the Distributor $44,323 (based on average net assets
relating to the Class C shares of approximately $4,319,203) pursuant to
the class C Distribution Plan, all of which was paid to other
Broker-Dealers for providing account maintenance and
distribution-related services in connection with the Class C shares. At
July 31, 1999, the net assets of the Fund subject to the Class B
Distribution Plan aggregated approximately $11,265,053. At this net asset
level, the annual fee payable pursuant to the Class B Distribution Plan
would aggregate approximately $35,649. At July 31, 1999, the net assets
of the Fund subject to Class C Distribution Plan approximated $3,131,060.
At this asset level, the annual fee payable pursuant to the Class C
Distribution Plan would approximate $44,525.

<PAGE>

CUSTODIAN AND INDEPENDENT ACCOUNTANTS

All securities and cash of the Fund are held by its custodian, State
Street Bank and Trust Company, 225 Franklin Street, Boston,
Massachusetts 02210. KPMG LLP, certified public accountants, 707 17th
Street, Suite 2300 Denver, Colorado 80202, provides auditing and tax
services to the Fund.

BROKERAGE

Decisions to buy and sell securities for the Fund, assignment of its
portfolio business, and negotiation of its commission rates, where
applicable, are made by the Fund's securities order department. The Fund
does not have any agreement or arrangement to use any particular broker
for its portfolio transactions. The Fund's primary consideration in
effecting a security transaction will be execution at the most favorable
price. When selecting a broker-dealer to execute a particular transaction,
the Fund will take the following into consideration: the best net price
available; the reliability, integrity and financial condition of the
broker-dealer; the size of and difficulty in executing the order; the value
of the expected contribution of the broker-dealer to the investment
performance of the Fund on a continuing basis; sales of Fund shares; and
the value of brokerage, research and other services provided by the
broker-dealer. The commission charged by a broker may be greater than
the amount another firm might charge if the management of the Fund
determines in good faith that the amount of such commissions is
reasonable in relation to the value of the brokerage and research services
provided by such broker.

Portfolio transactions placed through dealers serving as primary
market makers are effected at net prices, without commission as such, but
which include compensation to the dealer in the form of mark up or mark
down. In certain instances the Fund may make purchases of underwritten
issues at prices which include underwriting fees. When making purchases
of underwritten issues with fixed underwriting fees, the Fund may
designate broker-dealers who have agreed to provide the Fund with
certain statistical, research, and other information, or services which are
deemed by the Fund to be beneficial to the Fund's investment program.
With respect to money market instruments, the Fund anticipates the
portfolio securities transactions will be effected with the issuer or with a
primary market maker acting as principal for the securities on a net basis
(without commissions).

Any statistical or research information furnished to the Adviser
may be used in advising its other clients. Generally, no specific value can
be determined for research and statistical services furnished without cost
to the Fund by a broker-dealer. The Fund is of the opinion that the
material is beneficial in supplementing research and analysis provided by
the Fund's Adviser.

The Fund may use "affiliated" brokers, as that term is defined in
the Investment Company Act, if in the Adviser's best judgment based on
all relevant factors, the affiliated broker is able to implement the policy of
the Fund to obtain, at reasonable expense, the "best execution" (prompt
and reliable execution at the most favorable price obtainable) of such
transactions. The Advisor need not seek competitive commission bidding
but is expected to minimize the commissions paid to the extent consistent
with the interest and policies of the Fund as established by its Board of
Directors. Purchases of securities from underwriters include a commission
or concession paid by the issuer to the underwriter, and purchases from
dealers include a spread between the bid and asked price.

The Fund paid total brokerage commissions of $306,385,
$364,892 and $260,228 in fiscal years 1997, 1998 and 1999, respectively.
The Fund did not purchase securities issued by any broker-dealer that
executed portfolio transactions during such fiscal year. The Fund paid
brokerage commissions of $260,228 for the 1999 fiscal year to American
Growth Fund Sponsors, the underwriter and an affiliate of the Fund which
represents 100% of the total brokerage commissions paid. Commissions
and sales charge paid by investor on the purchase of Fund shares totaled
$472,212, 634,893 and 181,649 in fiscal year 1997, 1998 and 1999
respectively, of which 140,586, 176,388 and 45,545 were retained by
Sponsors. The aggregate dollar amount of transactions effected through
American Growth Fund Sponsors involving the payment of commissions
represented 74% of the aggregate dollar amount of all transactions
involving the payment of commissions during 1999.

While some stocks considered in the opinion of management to be
least sensitive to business declines will be maintained as long term
holdings, others considered most sensitive to such declines will be sold
whenever in management's judgment economic conditions may be in for a
major decline. Resulting funds may be temporarily invested in United
States Government securities, high-grade bonds and high-grade preferred
stocks, until management believes business and market conditions
indicate that reinvestment in common stocks is desirable. The portfolio
turnover rate of the Fund for the fiscal years ended July 31, 1997, 1998
and 1999 was 106.2%, 103.5% and 109.3%, respectively.

CALCULATION OF NET ASSET VALUE

The Fund offers its shares continuously to the public at their net
asset value next computed after receipt of the order to purchase plus any
applicable sales charge. Net asset value is determined as of the close of
business on the New York Stock Exchange each day the Exchange is open
for trading, and all purchase orders are executed at the next price that is
determined after the order is received. Orders received and properly
time-stamped by dealers and received by the Distributor prior to 2:00 p.m.
Denver time on any business day will be confirmed at the public offering
price effective at the close on that day. Orders received after such time
will be confirmed at the public offering price determined as of the close of
the Exchange on the next business day. It is the responsibility of the
dealers to remit orders promptly to the Distributor. The New York Stock
Exchange is closed on the following holidays: New Year's Day, Martin
Luther King Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day.

In determining net asset value, securities traded on the New York
Stock Exchange or other stock exchange approved for this purpose by the
board of directors will be valued on the basis of the closing sale thereof on
such stock exchange, or, if such sale is lacking, at the mean between
closing bid and asked prices on such day. If no bid and asked prices are
quoted for such day

<PAGE>

or information as to New York or other approved exchange transactions is
not readily available, the security will be valued by reference to
recognized composite quotations or such other method as the board of
directors in good faith deems will reflect its fair market value. Securities
not traded on any stock exchange but for which market quotations are
readily available are valued on the basis of the mean of the last bid and
asked prices. Short-term securities are valued at the mean between the
closing bid and asked prices or by such other method as the board of
directors determines to reflect their fair market value. The board of
directors in good faith determines the manner of ascertaining the fair
market value of other securities and assets.

The net asset price of Fund shares will be computed by deducting
total liabilities from total assets. The net asset value per share will be
ascertained by dividing the Fund's net assets by the total number of shares
outstanding, exclusive of treasury shares and shares tendered for
redemption the redemption price of which has been determined.
Adjustment for fractions will be made to the nearest cent.

The per share net asset value of Class A, Class B and Class C
shares generally will be lower than the per share net asset value of the
Class D shares reflecting the daily expense accruals of the service,
distribution and higher transfer agency fees applicable with respect to the
Class A, Class B and Class C shares. The per share net asset value of the
Class B and Class C shares generally will be lower than the per share net
asset value of Class A shares reflecting the daily expense accruals of the
service and distribution fees and higher transfer agency fees applicable
with respect to Class B and Class C shares of the Fund. It is expected,
however, that the per share net asset value of the classes will tend to
converge (although not necessarily meet) immediately after the payment
of dividends or distributions, which will differ by approximately the
amount of the expense accrual differential between the classes.

DIVIDENDS, DISTRIBUTIONS AND TAXES

As a regulated investment company, the Fund will not be subject
to U.S. federal income tax on its income and gains which it distributes as
dividends or capital gains distributions provided that it distributes to
shareholders at least 90% of its investment company taxable income for
the taxable year. The Fund intends to distribute sufficient income to meet
this qualification requirement.

The per share dividends and distributions on Class A, Class B and
Class C shares will be lower than the per share dividends and distributions
on Class D shares as a result of the account maintenance, distribution and
higher transfer agency fees applicable with respect to the Class A, Class B
and Class C shares; similarly, the per share dividends and distributions on
Class A shares will be higher than the per share dividends and
distributions on Class B and Class C shares as a result of the lower
account maintenance fees applicable with respect to the Class A shares
and a lower distribution fee. See "Calculation of Net Asset Value".

Net capital gains (which consist of the excess of net long-term
capital gains over net short-term capital losses) are not included in the
definition of investment company taxable income. The Board of Directors
will determine at least once a year whether to distribute any net capital
gains. A determination by the Board of Directors to retain net capital
gains will not affect the ability of the Fund to qualify as a regulated
investment company. If the Fund retains for investment its net capital
gains, it will be subject to a tax of 35% of the amount retained. In that
event, the Fund expects to designate the retained amount of undistributed
capital gains in a notice to its shareholders who (i) if subject to U.S.
federal income tax on long-term capital gains, will be required to include
in income for tax purposes as long term-capital gain, their shares of such
undistributed amount, and (ii) will be entitled to credit their proportionate
shares of the 35% tax paid by the Fund against their U.S. federal income
tax liabilities and to claim refunds to the extent the credit exceeds such
liabilities. For U.S. federal income tax purposes, the tax basis of shares
owned by a shareholder of the Fund will be increased by an amount equal
to 65% of the amount of undistributed capital gains included in the
shareholder's gross income.

Under the Code, amounts not distributed on a timely basis in
accordance with a calendar year distribution requirement are subject to a
nondeductible 4% excise tax. To avoid the tax, the Fund must distribute
during each calendar year (1) at least 98% of its ordinary income (not
taking into account any capital gains or losses) for the calendar year, (2)
at least 98% of its capital gains in excess of its capital losses for the
twelve-month period ending on October 31 of the calendar year, and (3)
all ordinary income and net capital gains for previous years that were not
distributed during such years. To avoid application of the excise tax, the
Fund intends to make distributions in accordance with the calendar year
distribution requirement. A distribution will be treated as paid on
December 31 of the calendar year if it is paid during the calendar year or
if declared by the Fund in October, November or December of such year,
payable to shareholders of record on a date in such month and paid by the
Fund during January of the following year. Any such distributions paid
during January of the following year will be taxable to shareholders as of
December 31, rather than the date on which the distributions are received.

Dividends of investment company taxable income (which includes
interest and the excess of net short-term capital gains over net long-term
capital losses) are taxable to a shareholder as ordinary income, whether
paid in cash or shares. A portion of the dividends paid by the Fund may
qualify for the 70% deduction for dividends received by corporations
because the Fund's income will consist, in part, of dividends paid by U.S.
corporations. Distributions of net capital gains (which consists of the
excess of long-term capital gains over net short-term capital losses), if
any, are taxable as long-term capital gains, whether paid in cash or in
shares, regardless of how long the shareholder has held the Fund shares,
and are not eligible for the dividends received deduction.

Upon a sale or exchange of its shares, a shareholder will realize a
taxable gain or loss depending upon its basis in the shares. Such gain or
loss will be treated as capital gain or loss if the shares are capital assets in

the shareholder's hands and such capital gain or loss will be long-term
capital gain or loss if the shares have been held for more than one year.
Any loss realized on a sale or exchange will be disallowed to the extent
the shares disposed of are replaced within a period of 61 days beginning

<PAGE>

30 days before and ending 30 days after the shares are disposed of. Any
loss realized by a shareholder on the sale of shares of the Fund held by the
shareholder for six months or less will be treated for tax purposes as a
long-term capital loss to the extent of any distributions of net capital gains
received by the shareholder with respect to such shares.

Shareholders receiving distributions in the form of newly issued
shares will have a cost basis in each share received equal to the fair
market value of a share of the Fund on the distribution date. Shareholders
will be notified annually as to the U.S. federal income tax status of
distributions and shareholders receiving distributions in the form of newly
issued shares will receive a report as to the fair market value of the shares
received. If the net asset value of shares is reduced below a shareholder's
cost as a result of a distribution by the Fund, such distribution will be
taxable even though it represents a return of invested capital Investors
should be careful to consider the tax implications of buying shares just
prior to a distribution. The price of shares purchased at this time may
reflect the amount of the forthcoming distribution. Those purchasing just
prior to a distribution will receive a distribution which will nevertheless
be taxable to them.

Income received by the Fund from sources within foreign
countries may be subject to withholding and other taxes imposed by such
countries. Income tax treaties between certain countries and the United
States may reduce or eliminate such taxes. It is impossible to determine in
advance the effective rate of foreign tax to which the Fund will be subject,
since the amount of the Fund assets to be invested in various countries is
not known. It is not anticipated that shareholders will be entitled to claim
foreign tax credits with respect to their share of foreign taxes paid by the
Fund.

Distributions may also be subject to additional state, local and
foreign taxes depending on each shareholder's particular situation.
Shareholders are advised to consult their own tax advisers with respect to
the particular tax consequences to them of an investment in the shares of
the Fund.

If a shareholder has elected to receive dividends and/or capital
gain distributions in cash and the postal or other delivery service is unable
to deliver checks to the shareholder's address of record, such shareholder's
distribution option will automatically be converted to having all dividends
and other distributions reinvested in additional shares. No interest will
accrue on amounts represented by uncashed distribution or redemption
checks.

The foregoing is a general and abbreviated summary of the
applicable provisions of the Code and Treasury Regulations presently in
effect. For the complete provisions, reference should be made to the
pertinent Code sections and the Treasury Regulations promulgated
thereunder. The Code and the Treasury Regulations are subject to change
by legislative or administrative action either prospectively or retroactively.

PERFORMANCE DATA

See the discussion of performance information in the Fund's
prospectus under the heading, "Performance Information." The average
annual total returns are calculated pursuant to the following formula: P(1
+ T)n = ERV (where P = a hypothetical initial payment of $1,000, T = the
average annual total return, n = the number of years, and ERV = the
ending redeemable value of a hypothetical $1,000 payment made at the
beginning of the period at the end of the 1, 5 or 10 year periods).

For the periods ended July 31, 1999, the average annual total
returns at maximum offering price for the Class D shares of the Fund were
(3.92)% for 1 year, 7.73% for 5 years, 9.8% for 10 years and 9.9% for 15
years. For the year ended July 31, 1999 and period since inception on
March 1, 1996, the average annual total return for the Fund's Class A
shares were (4.23)% and 14.51%, Class B shares were (0.85)% and
18.26%, and Class C shares were 0.85% and 18.26%, respectively.

In addition to the standardized calculation of annual total return,
the Fund may from time to time use other methods of calculating its
performance in order to illustrate the effect of a hypothetical investment in
a plan or the effect of withdrawing funds from an account over a period of
time. Any presentation of non-standardized calculations will be
accompanied by standardized performance measures as well. Calculations
of performance may be expressed in terms of the total return as well as the
average annual compounded rate of return of a hypothetical investment in
the Fund over varying periods of time in addition to the 1, 5, and 10 year
periods (up to the life of the Fund) and may reflect the deduction of the
appropriate sales charge imposed upon an initial investment of more than
$1,000 in the Fund. These performance calculations will reflect the
deduction of a proportional share of Fund expenses (on an annual basis),
will assume that all dividends and distributions are reinvested when paid,
may include periodic investments or withdrawals from the account in
varying amounts and/or percentages and may include deductions for an
annual custodian fee. The Fund may calculate its total return or other
performance information prior to the deduction of a sales charge.

The performance figures described above may also be used to
compare the performance of the Fund's shares against certain widely
recognized standards or indices for stock and bond market performance.
The following are the indices against which the Portfolios may compare
performance:

The Standard & Poor's Composite Index of 500 Stocks (the S&P
500 Index) is a market value-weighted and unmanaged index showing the
changes in the aggregate market value of 500 stocks relative to the base
period 1941-43. The S&P 500 Index is composed almost entirely of
common stocks of companies listed on the NYSE, although the common
stocks of a few companies listed on the American Stock Exchange or
traded OTC are included. The 500 companies represented include 400
industrial, 60 transportation and 50 financial services concerns. The S&P
500 Index represents about 80% of the market value of all issues traded on
the NYSE.

The Dow Jones Industrial Average is an unmanaged index
composed of 30 blue-chip industrial corporation stocks.

<PAGE>

The Lipper Mutual Fund Performance Analysis and Mutual Fund
Indices measure total return and average current yield for the mutual fund
industry. Ranks individual mutual fund performance over specified time
periods assuming reinvestment of all distributions, exclusive of sales
charges.

The Consumer Price Index (or Cost of Living index), published by
the U.S. Bureau of Labor Statistics, is a statistical measure of periodic
change in the price of goods and services in major expenditure groups.

The following table presents a hypothetical initial investment of
$1,000 on August 1, 1958 with subsequent investments of $1,000 made
annually through July 31, 1999. The illustration assumes that the
investment was made in Class D shares, (the only class existing at that
time), and a sales load of 5.75% has been deducted from the initial and
subsequent investments, a $20 annual fee (representing the annual service
fee charged to retirement plan accounts) has been deducted from the
account annually, and that all dividend and capital gain distributions have
been reinvested when paid. While the illustration uses an investment of
$1,000 and a 5.75% sales load, the Fund may select any multiple of
$1,000 in order to illustrate the effect of an investment plan and the sales
load will reflect the appropriate sales load for the initial and subsequent
investments as determined by the Fund's currently effective prospectus.
Class A, Class B and Class C shares are subject to additional distribution
charges as outlines in the prospectus, which would have, if the Class was
in effect, produced a lower rate of return. The sales load may be reduced
pursuant to rights of accumulation and letter of intent.

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
<C>
Accepted
Dividends Cumulative Acquired as Purchased
Total of from cost with capital
through
initial investment Cumulative including initial gains

reinvestment
Year & annual income reinvested reinvested & annual
distributions

of income Ended
Ended investments reinvested dividends dividends investments (Cumulative)

(Cumulative) Value
08/01/58 $ 1,000 - - $ 1,000 $1,000 -
-

$1,000
07/31/59 2,000 $ 25 $ 25
2,025 2,129 $ 0
$ 27 2,156
07/31/60 3,000 41 66
3,066 2,894 11
65 2,970
07/31/61 4,000 85 151
4,151 4,611 80
181 4,872
07/31/62 5,000 97 248
5,248 4,917 91
241 5,249
07/31/63 6,000 123 371
6,371 6,817 275
426 7,518
07/31/64 7,000 125 496
7,496 9,427 464
672 10,563
07/31/65 8,000 147 643
8,643 9,790 1,152
778 11,720
07/31/66 9,000 202 845
9,845 10,740 2,213
977 13,930
07/31/67 10,000 373 1,218
11,218 11,943 3,866
1,421 17,230
07/31/68 11,000 353 1,571
12,571 14,033 4,243
1,934 20,210
07/31/69 12,000 408 1,979
13,979 12,320 5,717
1,910 19,947
07/31/70 13,000 410 2,389
15,659 10,520 5,207
1,822 17,549
07/31/71 14,000 588 2,977
16,977 14,385 6,664
2,970 24,019
07/31/72 15,000 682 3,659
18,659 16,069 7,018
3,841 26,928
07/31/73 16,000 508 4,167
20,167 16,299 7,259
4,162 27,720
07/31/74 17,000 782 4,949
21,949 14,041 6,307
4,034 24,382
07/31/75 18,000 1,405 6,354
24,354 13,704 9,330
5,110 28,144
07/31/76 19,000 1,171 7,525
26,525 16,777 10,796
7,227 34,800
07/31/77 20,000 1,074 8,599
28,599 19,582 12,008
9,204 40,794
07/31/78 21,000 1,017 9,616
30,616 23,726 13,984
11,894 49,604
07/31/79 22,000 2,055 11,671
33,671 27,109 15,429
15,437 57,975
07/31/80 23,000 2,931 14,602
37,602 37,937 22,535
24,562 85,034
07/31/81 24,000 3,766 18,368
42,368 30,526 41,349
22,502 94,377
07/31/82 25,000 4,235 22,603
47,603 27,829 39,477 23,846
91,152
07/31/83 26,000 6,769 29,372
55,372 40,090 55,535
42,431 138,056
07/31/84 27,000 5,657 35,029
62,029 35,136 58,360
41,506 135,002
07/31/85 28,000 4,637 39,666
66,666 37,927 73,322 48,927

160,176
07/31/86 29,000 7,330 46,996
75,996 41,252 77,925 60,054

179,231
07/31/87 30,000 5,993 52,989
82,989 44,358 107,124 70,083

221,565
07/31/88 31,000 3,685 56,674
87,674 31,884 105,874 52,808

190,566
07/31/89 32,000 9,656 66,330
98,330 36,390 117,707 69,793

223,890
07/31/90 33,000 9,004 75,334
108,334 37,969 119,759 79,838

237,566
07/31/91 34,000 8,138 83,472
117,472 41,072 126,543
93,645 261,260
07/31/92 35,000 1,955 85,427
120,397 44,484 151,776 101,369

297,629
07/31/93 36,000 2,801 88,288
124,228 50,094 193,448

115,156 358,698
07/31/94 37,000 1,910 90,138
127,138 50,782 232,061

116,467 399,310
07/31/95 38,000 5,130 95,268
133,268 48,526 297,125

115,242 460,893
07/31/96 39,000 6,321 101,589
140,589 50,035 311,128
122,923

484,086
07/31/97 40,000 6,564 108,153
148,153 65,012 424,387

165,392 654,791
07/31/98 41,000 4,623 112,776
153,776 55,644 408,025

143,706 607,375
07/31/99 42,000 6,373 119,149
161,149 57,071 411,450

151,421 619,943
The table below illustrates the effect of an automatic withdrawal program on an initial hypothetical investment
of $10,000 on August 1, 1958 in the Fund for the life of the Fund. The illustration assumes that a sales load of
5.75% was deducted from the initial investment, that $800 was withdrawn annually and withdrawals were made
first from income for the year, then from principal. Withdrawals from principal representing the sale of shares were
assumed to have been in the order shares were acquired. Continued withdrawals in excess of current income can
eventually exhaust principal, particularly in a period of declining market prices. That portion of the total amount
withdrawn designated "From Investment Income Dividends" should be regarded as income; the remainder
represents a withdrawal of principal. While this illustration assumes that $800 was withdrawn annually, the Fund
may in other illustrations select any percentage or dollar amount to be withdrawn.

</TABLE>

<PAGE>

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
<C>
Withdrawn

Withdrawn from
Value
Accepted
from principal
of
as
investment and
Annual Cumulative remaining
Capital
Period income capital
total total original
Gains Total
Ended dividends gains
withdrawn withdrawn shares

distributions Value

07/31/59 $ 244 $ 556
$ 800 $ 800 $ 11,453
$ 0 $ 11,453
07/31/60 212 588
800 1,600 10,025
57 10,082
07/31/61 283 517
800 2,400 12,213
294 12,507
07/31/62 243 557
800 3,200 10,085
311 10,396
07/31/63 237 563
800 4,000 11,477
700 12,177
07/31/64 199 601
800 4,800 13,666
1,070 14,737
07/31/65 201 599
800 5,600 12,252
2,004 14,256
07/31/66 241 559
800 6,400 11,739
3,292 15,031
07/31/67 393 407
800 7,200 11,592
5,090 16,682
07/31/68 336 464
800 8,000 12,250
5,588 17,838
07/31/69 355 445
800 8,800 9,546
6,535 16,081
07/31/70 325 475
800 9,600 6,970
5,695 12,665
07/31/71 417 383
800 10,400 8,524
7,289 15,813
07/31/72 441 359
800 11,200 8,625
7,675 16,300
07/31/73 300 500
800 12,000 7,753
7,673 15,426
07/31/74 427 373
800 12,800 5,906
6,432 12,338
07/31/75 696 104
800 13,600 5,210
7,662 12,872
07/31/76 526 274
800 14,400 5,753
8,866 14,619
07/31/77 443 357
800 15,200 6,034
9,861 15,895
07/31/78 391 409
800 16,000 6,585
11,484 18,069
07/31/79 740 60
800 16,800 7,207
12,671 19,878
07/31/80 800 0
800 17,600 10,117
17,800 27,917
07/31/81 800 0
800 18,400 8,175
21,670 29,845
07/31/82 800 0
800 19,200 7,691
20,050 27,741
07/31/83 800 0
800 20,000 12,625
28,206 40,831
07/31/84 800 0
800 20,800 11,585
27,303 38,888
07/31/85 800 0
800 21,600 12,811
32,159 44,970
07/31/86 800 0
800 22,400 15,019
34,178 49,197
07/31/87 800 0
800 23,200 16,776
42,864 59,640
07/31/88 800 0
800 24,000 12,006
38,243 50,249
07/31/89 800 0
800 24,800 15,375
42,517 57,892
07/31/90 800 0
800 25,600 17,109
43,258 60,367
07/31/91 800 0
800 26,400 19,569
45,709 65,278
07/31/92 486 314
800 27,200 20,438
52,839 73,277
07/31/93 687 113
800 28,000 22,514
64,695 87,209
07/31/94 463 337
800 28,800 22,086
73,961 96,046
07/31/95 800 0
800 29,600 21,316
88,412 109,728
07/31/96 800 0
800 30,400 22,293
91,941 114,235
07/31/97 800 0
800 31,200 29,491
123,845 153,366
07/31/98 800 0
800 32,000 25,127
116,106 141,233
07/31/99 800 0
800 32,800 26,017
117,031 143,048

TOTAL $22,886 $ 9,914
$ 32,800

Performance information for the Fund reflects only the performance of a hypothetical investment in the Fund
during the particular time period on which the calculations are based. Performance information should be
considered in light of the Fund's investment objectives and policies, characteristics and quality of the portfolio and
the market conditions during the given time period and should not be considered as a representation of what may be
achieved in the future.

</TABLE>

<PAGE>

To Our Investors

Dear Shareholder:

Mr. Greenspan and his policies seem to be able to keep the
economy on track. As I write this letter to you the inflation rate is 2.1%
and the rate of unemployment is 4.2%. All indicators seem to show that
the economy is robust and stable. We have positioned your portfolio to
take advantage of this economy.

The fund in the last year has experienced a wavering in the market.
In the first six months of the year the fund took a position that led to less
than expected growth. We've made some changes and I am happy to
report that in the period from June 30, 1999 to September 3, 1999, our
fund has substantially out-performed the Dow Jones Industrial Average.
We try to include only the largest and most elite companies in your
portfolio in keeping with our investment philosophy of maintaining
conservative growth. Some of them are Hewlett Packard (leading
manufacturer of computer products), General Electric (one of the world's
largest providers of financing and insurance, as well as a leading maker of
jet engines, electric utility generator and the last original member of the
Dow Jones Industrials) and Texaco (leading international oil and natural
gas company engaged in exploration, refining and marketing operations).

We are excited about the years ahead and are optimistic that we
will continue to give you, our shareholder, rewarding performance. The
stock market has been a good one for American Growth Fund, Inc. over
the past 41 years and you have benefitted as a result.

My staff and I are always available to discuss your account with
you. Our toll-free number is 800.525.2406.

American Growth Fund wishes you A Good Future!

Sincerely

Robert Brody
9/3/99

<PAGE>

How American Growth Fund Has Its Shareowners' Money Invested

STATEMENT OF INVESTMENTS
July 31, 1999
<TABLE>
<CAPTION>
<S> <C>
<C>

Market
Description of Security Shares
Value
- ------------------------------------------------------------------------------------------
COMMON STOCKS 87.08%

Commercial Bank Industry 17.45%

City National Corp.. . . . . . . . . . . . . . . . . . . 197,80
0 $ 6,774,650
(Owns City National Bank, largest independent bank in southern
California.)
SouthTrust Corp. . . . . . . . . . . . . . . . . . . . . 135,00
0 4,961,250
(The 33rd largest bank in the U.S.)
Royal Bank of Canada . . . . . . . . . . . . . . . . . . 70,000
3,045,000
(Canada's largest bank.)
Bank America Corp. . . . . . . . . . . . . . . . . . . . 32,624
2,165,418
(The 3rd largest bank in the United States.)

------------------
16,946
,318

Computer & Peripherals Industry 9.20%

Hewlett Packard Company. . . . . . . . . . . . . . . . . 73,500
7,694,531
(A designer and manufacturer of precision electronic products.)
Cisco Systems Inc.*. . . . . . . . . . . . . . . . . . . 20,000
1,242,500
(The leading supplier of high-performance internet-working
products.)

------------------
8,937,
031

Household Products Industry 8.93%

Procter & Gamble Company . . . . . . . . . . . . . . . . 50,000
4,525,000
(#1 manufacturer of household products in the U.S. and the
world's largest advertiser.)
Colgate Palmolive Company. . . . . . . . . . . . . . . . 84,000
4,147,500
(2nd largest domestic maker of detergents, toiletries and other
household products.)

------------------
8,672,
500

*Non-income producing security
See accompanying notes to financial statements.

<PAGE>

Market
Description of Security Shares
Value
- ------------------------------------------------------------------------------------------

Electronic Equipment Industry 6.73%

General Electric Company . . . . . . . . . . . . . . . . 60,000

$6,540,000
(One of the largest and most diversified industrial companies in
the world.)

Drug Industry 5.38%

Amgen Inc. . . . . . . . . . . . . . . . . . . . . . . . 68,000
5,227,500
(Utilizes biotechnology to develop human pharmaceutical
products.)

Semiconductor Industry 5.22%

Intel Corp. . . . . . . . . . . . . . . . . . . . . . . 60,000
4,140,000
(A leading manufacturer of integrated circuits.)
Micron Technology Inc.*. . . . . . . . . . . . . . . . . 15,000
931,875
(Manufactures semiconductor components used in the computer,
telecommunications, and office automation industries.)

------------------
5,071,
875

Aluminum Industry 4.93%

Alcoa Inc. . . . . . . . . . . . . . . . . . . . . . . . 80,000
4,790,000
(The world's largest aluminum producer.)

Petroleum (Integrated) Industry 4.63%

Texaco Inc. . . . . . . . . . . . . . . . . . . . . . . 72,200
4,498,963
(A major integrated international oil company.)

*Non-income producing security
See accompanying notes to financial statements.

<PAGE>

Market
Description of Security Shares
Value
- ------------------------------------------------------------------------------------------

Telecommunications Services Industry 3.74%

AT&T Corp. . . . . . . . . . . . . . . . . . . . . . . . 70,000

$3,635,625
(Operates in the global telecommunications and information
management industry.)

Machine Industry 3.62%

Caterpillar, Inc.. . . . . . . . . . . . . . . . . . . . 60,000
3,517,500
(The world's largest producer of earthmoving equipment.)

Insurance Industry 3.31%

Equitable Companies, Inc. (The). . . . . . . . . . . . . 50,000
3,212,500
(Parent holding company of the Equitable Life Assurance Society
of the United States.)

Financial Services Industry 2.75%

Citigroup Inc. . . . . . . . . . . . . . . . . . . . . . 60,000

2,673,750
(A diversified financial services company.)

Precision Instrument Industry 2.14%

Eastman Kodak, Co. . . . . . . . . . . . . . . . . . . . 30,000
2,073,750
(The world's largest producer of photographic products.)

Oilfield Services Industry 1.90%

Schlumberger Limited . . . . . . . . . . . . . . . . . . 30,500
1,847,156
(Operates in two segments: oilfield services, measurement &
systems.)

Steel (Integrated) Industry 1.76%

USX - U.S. Steel Group . . . . . . . . . . . . . . . . . 66,000

1,711,875
(The largest U.S. steelmaker.)

Auto Industry 1.51%

General Motors Corp. . . . . . . . . . . . . . . . . . . 20,000
1,218,750
(The world's largest auto manufacturer.)
Delphi Automotive Systems Corp. . . . . . . . . . . . . 13,978
251,604
(A supplier of components, integrated systems and modules to the
automotive Industry.)

------------------

1,470,354

*Non-income producing security
See accompanying notes to financial statements.

<PAGE>

Market
Description of Security Shares
Value
- ------------------------------------------------------------------------------------------

Telecommunications Equipment Industry 1.34%

Lucent Technologies Inc. . . . . . . . . . . . . . . . . 20,000
1,301,250
(One of the world's leading designers, developers and
manufacturers of telecommunications systems, software and products.)

Paper & Forest Products Industry 1.13%

Fort James Corp. . . . . . . . . . . . . . . . . . . . . 30,000
1,095,000
(The second largest paper goods producer in the United States.)

Building Materials Industry 1.12%

Ameron International Inc. . . . . . . . . . . . . . . 25,500
1,085,344
(The largest supplier of high-performance marine and offshore
coatings in the U.S.)

Food Industry 0.29%

Fresh Del Monte Produce Inc.* . . . . . . . . . . . . . 20,000
283,750
(Produces, distributes and markets fresh produce.)

------------------
Total Common Stocks (cost $63,893,510) (87.08%). . . . . . . .
84,592,041

U.S. GOVERNMENT OBLIGATIONS 0.69%

U.S. Treasury Bond, 6.00%, 02/15/26 . . . . . . . . . .
673,204

------------------
Total U.S. Government Obligations (cost $715,812). . . . . . .
673,204

MONEY MARKET INSTRUMENTS 10.33%
LIR Government Money Fund, (cost $10,035,189). . . . . .
10,035,189

Total Money Market Instruments (cost $10,035,189) . . . . . .
10,035,189

------------------
Total Investments, at Value (cost $74,644,511). . . . . . . . 98.10
% 95,300,434

Cash and Receivables, Less Liabilities . . . . . . . . . 1.90%

1,841,659
------------------
Net Assets . . . . . . . . . . . . . . . . . . . . . . . 100.00
% $97,142,093

*Non-income producing security
See accompanying notes to financial statements.
</TABLE>

<PAGE>

Financial Statements

AMERICAN GROWTH FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES, JULY 31, 1999
<TABLE>
<CAPTION>
<S> <C>

ASSETS:
Investments, at value (cost $74,644,511)-see accompanying statement
$ 95,300,434
Cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,835,
585
Receivables:
Shares of beneficial interest sold . . . . . . . . . . . . .
15,783
Dividends. . . . . . . . 100,09
8
Interest . . . . . . 59,473

------------------
Total assets. . . . . . . . . . . . . . . . . . . . . . . . . . 98,311
,373

LIABILITIES:
Shares of beneficial interest redeemed. . . . . . . . . . . . . 222,85
5
Investments Purchased . . . . . . . . . . . . . . . . . . . . . 946,42
5

------------------
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . $
97,142,093

COMPOSITION OF NET ASSETS:
Paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . $
72,886,825
Accumulated net realized gain from investment transactions. . . . . . . .
3,599,345
Net unrealized appreciation of investments. . . . . . . . . . . 20,655
,923

------------------
Net assets. . . . . . . . . . . . . . . . . . . . . . . . . . . $
97,142,093

NET ASSET VALUE PER SHARE:
Class A Shares:
Net asset value and redemption price per share (based on net assets
of $8,635,193 and 902,062 shares of beneficial interest outstanding)
$ 9.57
Maximum offering price per share (net asset value plus sales charge of
5.75% of offering price) . . . . . . . . $10.15
Class B Shares:
Net asset value, redemption price and offering price per share (based on
net assets
of $11,265,053 and 1,191,841 shares of beneficial interest outstanding)
$ 9.45

Class C Shares:
Net asset value, redemption price and offering price per share (based on
net assets
of $3,131,060 and 331,804 shares of beneficial interest outstanding)
$ 9.44

Class D Shares:
Net asset value and redemption price per share (based on net assets of
$74,110,787 and 7,713,320 shares of beneficial interest outstanding)
$ 9.61
Maximum offering price per share (net asset value plus sales charge of
5.75% of offering price) $10.20

See accompanying notes to financial statements.
</TABLE>

<PAGE>

Financial Statements

AMERICAN GROWTH FUND, INC.
STATEMENT OF OPERATIONS FOR THE YEAR ENDED JULY 31,
1999
<TABLE>
<CAPTION>
<S> <C>

INVESTMENT INCOME:
Interest . . . . . $
971,881
Dividends (net of $12,912 foreign withholding tax) . . . . . . .
1,000,312
------------------
Total investment income . . . . . . . . . . . . . . . . . . . . 1,972,
193

EXPENSES:
Investment advisory fees (Note 5). . . . . . . . . 918,55
4
Administration expenses (Note 5) . . . . . . . . . 472,41
1
Transfer agent, shareholder servicing and data processing fees (Note 4). . .
. . . . 216,882
Custodian fees (Note 4). . . . . . . . . 137,35
8
Professional fees. . . . . . . 30,450
Registration and filing fees:
Class A . . . . . . . . . 4,596
Class B . . . . . . . . . 5,461
Class C . . . . . . . . . 1,648
Class D . . . . . . . . . 34,434
Shareholder reports. . . . . . . . . . . 17,189
Distribution and service fees:
Class A . . . . . . . . . 28,917
Class B . . . . . . . . . 142,19
2
Class C . . . . . . . . . 44,323
Directors fees . . . . . . . . 4,700
Other expenses . . . . . . . . 64,825

------------------
Total expenses. . . . . . . . . . . . . . . . . . . . . . . . . 2,123,
940
Less expenses paid indirectly (Note 4) . . . . . .
(94,209)

------------------
Net expenses. . . . . . . . . . . . . . . . . . . . . . . . . . 2,029,
731
------------------
Net Investment Loss. . . . . . . . . . . . . . . . . . . . . . . (57,53
8)

REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investments . . . . . . . . . 7,359,
974
Net change in unrealized appreciation on investments . . . . . .
(4,734,232)

------------------
Net realized and unrealized gain . . . . . . . . . 2,625,
742
------------------
Net Increase in Net Assets Resulting From Operations . . . . . .
$ 2,568,204

See accompanying notes to financial statements.
</TABLE>

<PAGE>

Financial Statements

AMERICAN GROWTH FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED JULY 31, 1999 AND 1998
<TABLE>
<CAPTION>
<S> <C>
<C>

1999

1998
OPERATIONS:
Net investment income (loss). . . . . . . . . . . $ (57,53
8) $ 637,948
Net realized gain (loss). . . . . . . . . . . . . 7,359,
974 (3,209,919)
Net change in unrealized depreciation . . . . . . (4,734,
232) (8,201,493)
------------------------------------
Net increase (decrease) in net assets resulting from
operations . . . . . . . . . 2,568,
204 (10,773,464)

DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income:
Class A . . . . . . . . . . . . . . . . . . . . . (56,53
4) (75,567)
Class B . . . . . . . . . . . . . . . . . . . . . (8,505)
(14,141)
Class C . . . . . . . . . . . . . . . . . . . . . (5,179)
(3,850)
Class D . . . . . . . . . . . . . . . . . . . . . (474,9
46) (790,735)
Book return of capital:
Class A . . . . . . . . . . . . . . . . . . . . (48,72
6) -
Class B . . . . . . . . . . . . . . . . . . . . (7,296)
- -
Class C . . . . . . . . . . . . . . . . . . . . (4,441)
- -
Class D . . . . . . . . . . . . . . . . . . . . (409,6
27) -
Distributions from net realized gain:
Class A . . . . . . . . . . . . . . . . . . . . -
(1,120,917)
Class B . . . . . . . . . . . . . . . . . . . . -
(1,258,568)
Class C . . . . . . . . . . . . . . . . . . . . -
(342,696)
Class D . . . . . . . . . . . . . . . . . . . . . -
(8,796,922)

BENEFICIAL INTEREST TRANSACTIONS:
Net increase (decrease) in net assets resulting from beneficial
interest transactions (Note 2):
Class A . . . . . . . . . . . . . . . . . . . . . (5,837,
113) 5,962,986
Class B . . . . . . . . . . . . . . . . . . . . . (4,497,
280) 7,163,360
Class C . . . . . . . . . . . . . . . . . . . . . (1,423,
013) 2,200,744
Class D . . . . . . . . . . . . . . . . . . . . . (16,29
3,908) (8,137,343)

NET ASSETS:. . . . . . . . . . . . . . . . . . . . ------------------------------------
Total decrease. . . . . . . . . . . . . . . . . . (26,49
8,364) (15,987,113)
Beginning of period . . . . . . . . . . . . . . . 123,64
0,457 139,627,570
------------------------------------
End of period (including undistributed net investment
income of $0 and $331,075 respectively). . . . . . . . . . .$ 97,142
,093 $ 123,640,457

See accompanying notes to financial statements.
</TABLE>

<PAGE>

Financial Highlights
<TABLE>
<CAPTION>
<S> <C> <C> <C>
<C>

Class A
Year Ended July 31,

1999 1998 19971
9966
Per Share Operating Data:

Net Asset Value, Beginning of Period $9.49 $11.30 $ 8.84
$ 9.21
- ------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) (0.05) 0.044 0.144
- -4
Net realized and unrealized gain (loss) 0.21 (0.90)
2.83 (0.37)
------------------------------------
Total income (loss) from investment
operations 0.16 (0.86)
2.97 (0.37)

Dividends and distributions to shareholders:
Dividends from net investment income (0.04) (0.06)5
(0.12)5 -
Book return of capital (0.04) - --
Distributions from net realized gain - (0.89)
(0.39) -
------------------------------------
Total dividends and distributions
to shareholders (0.08) (0.95)
(0.51) -
------------------------------------
Net Asset Value, End of Period $9.57 $9.49 $11.30
$8.84
------------------------------------
Total Return at Net Asset Value1 2.0% (7.6)%
34.6% (4.0)%
Ratios/Supplemental Data:
Net assets, end of period (in thousands) $8,635 $14,246
$10,536 $3,838
---------------------------------------------------------------
Ratios to average net assets:
Net investment income (loss) 0.00% 0.42% 1.28%
0.13%
Expenses2 1.98% 1.77%
1.76% 2.06%
---------------------------------------------------------------
Portfolio turnover rate3 109.3% 103.5%
106.2% 163.1%

1. Assumes a hypothetical initial investment on the business day
before the first day of the fiscal period with all dividends and distributions
reinvested in additional shares on the reinvestment date and redemption at
the net asset value calculated on the last business day of the fiscal period.
Sales charges are not reflected in total returns. Total returns are not
annualized for periods of less than one full year.
2. Beginning in fiscal 1996, the expense ratio reflects the effect of
expenses paid indirectly by the Fund.
3. The lesser of purchases and sales of portfolio securities for a
period, divided by the monthly average of the market value of securities
owned during the period. Securities with a maturity or expiration date at
the time of acquisition of one year or less are excluded from the
calculation. Purchases and sales of investment securities (other than
short-term securities) for the period ended July 31, 1999, aggregated
$115,980,505 and $159,871,400, respectively.
4. Net investment income (loss) per share is based upon relative daily
net asset values.
5. Distributions from net investment income per share are based upon
relative net asset values as of the business day following the distribution
record date.
6. For the period from March 1, 1996 (inception of offering) to July
31, 1996.

See accompanying notes to financial statements.
</TABLE>

<PAGE>

Financial Highlights
<TABLE>
<CAPTION>
<S> <C> <C> <C>
<C>

Class B
Year Ended July 31,
1999 1998
1997 19966
Per Share Operating Data:

Net Asset Value, Beginning of Period $9.37 $11.19$ 8.80
$9.21
- ------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (0.13) (0.02)4
0.074 (0.01)4
Net realized and unrealized gain (loss) 0.22 (0.90) 2.79
(0.40)
------------------------------------
Total income (loss) from investment
operations 0.09 (0.92)
2.86 (0.41)

Dividends and distributions to shareholders:
Dividends from net investment income (0.01) (0.01)5 (0.09)5-
Book return of capital -7 - --
Distributions from net realized gain - (0.89)
(0.39) -
------------------------------------
Total dividends and distributions
to shareholders (0.01) (0.90)
(0.48) -
- ----------------------------------------------------------
Net Asset Value, End of Period $9.45 $9.37 $11.18
$8.80
---------------------------------------------------------------
Total Return at Net Asset Value1 0.9% (8.2)%
33.5% (4.5)%
Ratios/Supplemental Data:
Net assets, end of period (in thousands) $11,265 $15,533
$10,962 $3,417
- ---------------------------------------------------------------
Ratios to average net assets:
Net investment income (loss) (0.01)% (0.32)%
0.49% (0.52)%
Expenses2 2.73% 2.52%
2.46% 2.81%
- ---------------------------------------------------------------
Portfolio turnover rate3 109.3% 103.5%
106.2% 163.1%

See accompanying notes to financial statements.
</TABLE>

<PAGE>

Financial Highlights
<TABLE>
<CAPTION>
<S> <C> <C> <C>
<C>

Class C
Year Ended July 31,

1999 1998
1997 19966
Per Share Operating Data:

Net Asset Value, Beginning of Period $9.37 $11.19 $
8.81 $ 9.21
- -----------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) (0.14) (0.02)4
0.074 -4
Net realized and unrealized gain (loss) 0.23 (0.90)
2.79 (0.40)
- --------------------------------------------------------------
Total income (loss) from investment
operations . . . . . . 0.09 (0.92)
2.86 (0.40)

Dividends and distributions to shareholders:
Dividends from net investment income (0.01) (0.01)5
(0.09)5 -
Book return of capital (0.01) - --
Distributions from net realized gain - (0.89)
(0.39) -
- -------------------------------------------------------------
Total dividends and distributions
to shareholders (0.02) (0.90)
(0.48) -
------------------------------------
Net Asset Value, End of Period $9.44 $9.37
$11.19 $8.81
- --------------------------------------------------------------
Total Return at Net Asset Value1 0.9% (8.2)%
33.6% (4.3)%
Ratios/Supplemental Data:
Net assets, end of period (in thousands) $3,131 $4,498
$3,023 $367
- -------------------------------------------------------------
Ratios to average net assets:
Net investment income (loss) (0.01)% (0.31)%
0.55% (0.63)%
Expenses2 2.75% 2.52%
2.50% 2.97%
- -------------------------------------------------------------
Portfolio turnover rate3 . . . . . . 109.3% 103.5%
106.2% 163.1%

See accompanying notes to financial statements.
</TABLE>

<PAGE>

Financial Highlights
<TABLE>
<CAPTION>
<S> <C> <C><c
> <C> <C>

Class D
Year Ended July 31,
1999 1998
1997 1996 1995
Per Share Operating Data:

Net Asset Value, Beginning of Period $9.53 $11.33$
8.85 $ 8.75 $ 9.34
- -------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income 0.01 0.074
0.174 0.034 0.21
Net realized and unrealized gain (loss) 0.17 (0.90)
2.82 0.39 0.88
- -----------------------------------------------------
Total income (loss) from investment operations 0.18 (0.83)
2.99 0.42 1.09

Dividends and distributions to shareholders:
Dividends from net investment income (0.05) (0.08)5
(0.12)5 (0.12)5 (0.12)
Book return of capital (0.05) - -

- -
Distributions from net realized gain - (0.89)
(0.39) (0.20) (1.56)
- -----------------------------------------------------
Total dividends and distributions to shareholders (0.10) (0.97)
(0.51) (0.32) (1.68)
--------------------------------------------
Net Asset Value, End of Period $9.61 $9.53
$11.33 $8.85 $8.75
-------------------------------------------------------
Total Return at Net Asset Value1 1.9% (7.4)%
35.1% 4.8% 15.2%
Ratios/Supplemental Data:
Net assets, end of period (in thousands) $74,111 $89,364
$115,106$100,130$90,538
- ------------------------------------------------------
Ratios to average net assets:
Net investment income 0.14% 0.63%
1.71% 0.47% 1.91%
Expenses2 1.72% 1.54%1.
55% 1.63% 1.45%
- -------------------------------------------------------
Portfolio turnover rate3 109.3% 103.5%
106.2% 163.1% 173.0%
1. Assumes a hypothetical initial investment on the business day
before the first day of the fiscal period with all dividends and distributions
reinvested in additional shares on the reinvestment date and redemption at
the net asset value calculated on the last business day of the fiscal period.
Sales charges are not reflected in total returns. Total returns are not
annualized for periods of less than one full year.
2. Beginning in fiscal 1996, the expense ratio reflects the effect of
expenses paid indirectly by the Fund.
3. The lesser of purchases and sales of portfolio securities for a
period, divided by the monthly average of the market value of securities
owned during the period. Securities with a maturity or expiration date at
the time of acquisition of one year or less are excluded from the
calculation. Purchases and sales of investment securities (other than
short-term securities) for the period ended July 31, 1999, aggregated
$115,980,505 and $159,871,400, respectively.
4. Net investment income (loss) per share is based upon relative daily
net asset values.
5. Distributions from net investment income per share are based upon
relative net asset values as of the business day following the distribution
record date.

See accompanying notes to financial statements.
</TABLE>

<PAGE>

Notes to Financial Statements

1. Summary of Significant Accounting Policies American Growth Fund,
Inc. (the "Fund") is registered under the Investment Company Act of
1940, as amended, as a diversified, open-end management investment
company. The Fund's primary investment objective is to seek capital
appreciation. The Fund's investment advisor is Investment Research
Corporation (IRC). The Fund offers Class A, Class B, Class C and Class
D shares. Class D shares are available to shareholders in existence prior to
3/1/96. Class A and Class D shares are sold with a front-end sales charge.
Class B and Class C shares may be subject to a contingent deferred sales
charge. All classes of shares have identical rights to earnings, assets and
voting privileges, except that each class has its own distribution and/or
service plan and expenses directly attributable to that class and exclusive
voting rights with respect to matters affecting that class. Class B shares
will automatically convert to Class A shares seven years after date of
purchase. The following is a summary of significant accounting policies
consistently followed by the Fund.

Investment Valuation - Investment securities are valued at the closing
asked price as reported by the principal securities exchange on which the
security is traded. If no sale is reported, or if the security is not traded on

an exchange, value is based on the average of the latest bid and asked
prices. Short-term debt securities having a remaining maturity of 60 days
or less are valued at amortized cost, which approximates market value.

Allocation of Income, Expenses, Gains and Losses - Income, expenses
(other than those attributable to a specific class), gains and losses are
allocated daily to each class of shares based upon the relative proportion
of net assets represented by such class. Operating expenses directly
attributable to a specific class are charged against the operations of that
class.

Federal Income Taxes - No provision for federal income or excise taxes
has been made because the Fund intends to comply with provisions of the
Internal Revenue Code applicable to regulated investment companies and
to distribute all of its taxable income to shareholders.

Classification of Distributions to Shareholders - The character of
distributions made during the year from net investment income or net
realized gains may differ from its ultimate characterization for federal
income tax purposes. Also, due to timing of dividend distributions, the
fiscal year in which amounts are distributed may differ from the fiscal
year in which the income or realized gain was recorded by the Fund.

The Fund adjusts the classification of distributions to shareholders to
reflect the differences between financial statement amounts and
distributions determined in accordance with income tax regulations.
Accordingly, during the year ended July 31, 1999, amounts have been
reclassified to reflect a decrease in accumulated net investment loss of
$271,627 a decrease in accumulated net realized gain from investment
transactions of $246,660 and a decrease in paid-in capital of $24,967.

Other - Investment transactions are accounted for on the date the
investments are purchased or sold (trade date). Dividend income and
distributions to shareholders are recorded on the ex-dividend date.
Interest income is recorded on the accrual basis. Realized gains and losses
from investment transactions and unrealized appreciation and
depreciation of investments are reported on an identified cost basis which
is the same basis used for federal income tax purposes.

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 disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of increases and
decreases in net assets from operations during the reporting period. Actual
results could differ from those estimates.

<PAGE>

Notes to Financial Statements

2. Shares of Beneficial Interest - The Fund has authorized an unlimited
number of no par value shares of beneficial interest of each class.
Transactions in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
<C>
Year Ended July 31, 1999
Year Ended July 31, 1998
Shares Amount
Shares Amount
- ---------------------------------------------------------------------------------------------------------------
Class A:
Sold 253,536 $ 2,388,808
837,941 $ 8,739,433
Dividends and distributions reinvested 10,544 98,900
124,601 1,193,679
Redeemed (863,218) (8,324,821)
(393,818) (3,970,124)
-----------------------------------------------------------------------------
Net increase (decrease) (599,138) $ (5,837,113)
568,724 $ 5,962,988
- ---------------------------------------------------------------------------------------------------------------
Class B:
Sold 171,341 $ 1,617,151
843,318 $ 8,810,905
Dividends and distributions reinvested 1,577 14,680 129,536

1,231,569
Redeemed (639,257) (6,129,111)
(294,805) (2,879,114)
- ----------------------------------------------------------------------------
Net increase (decrease) (466,339) $ (4,497,280)
678,049 $ 7,163,360
- ---------------------------------------------------------------------------------------------------------------

Class C:
Sold 72,340 $
690,740218,226 $ 2,295,012
Dividends and distributions reinvested 780 7,253 35,910

341,141
Redeemed (221,264) (2,121,006)
(44,447) (435,409)
-----------------------------------------------------------------------------
Net increase (decrease) (148,144) $ (1,423,013)
209,689 $ 2,200,744
- ---------------------------------------------------------------------------------------------------------------
Class D:
Sold 159,048 $ 1,506,344
394,322 $ 4,226,052
Dividends and distributions reinvested 85,582 805,335 969,644

9,308,601
Redeemed (1,913,434) (18,605,587)
(2,144,192) (21,671,996)
-----------------------------------------------------------------------------
Net decrease (1,668,804) $(16,293,908)
(780,226) $ (8,137,343)
</TABLE>

3. Unrealized Gains and Losses on Investments

The identified tax cost basis of investments at July 31, 1999 was
$74,644,511. Net unrealized appreciation on investments of $20,655,923,
based on identified tax cost as of July 31, 1999, was comprised of gross
appreciation of $22,985,947 and gross depreciation of $2,330,024.

4. Fund Expenses Paid Indirectly

For the year ended July 31, 1999, fees for transfer agent/data processing
services and custodian services totaling $28,377 and $65,832,
respectively, were offset by earnings on cash balances maintained by the
Fund at the custodian financial institution. The Fund could have invested
the assets maintained at the institution in income-producing assets if it
had not agreed to a reduction in fees.

5. Underwriting, Investment Advisory Contracts and Service Fees

Under the investment advisory contract with IRC, the advisor receives
annual compensation for investment advice, computed and paid monthly,
equal to 1% of the first $30 million of the Fund's average annual
net assets and 0.75% of such assets in

<PAGE>

Notes to Financial Statements

excess of $30 million. The Fund pays its own operating expenses.

Class B and Class C shares are subject to annual service and distribution
fees of 0.25% and 0.75% of average daily net assets, respectively. Class
A shares are subject to annual service and distribution fees of 0.25% and
0.05% of average daily net assets, respectively.

For the year ended July 31, 1999 commissions and sales charges paid by
investors on the purchase of Fund shares totaled $181,649 of which
$45,545 was retained by American Growth Fund Sponsors, Inc.
("Sponsors"), an affiliated broker/dealer which serves as the underwriter
and distributor of the Fund. Sales charges advanced to broker/dealers by
Sponsors on sales of the Fund's Class B and C shares totaled $72,264. For
the year ended July 31, 1999, Sponsors received contingent deferred sales
charges of $37,273 upon redemption of Class B and C shares, as
reimbursement for sales commissions advanced by Sponsors upon the sale
of such shares.

The Fund paid $260,228 to Sponsors for brokerage commission on
securities transactions.

Certain officers of the Fund are also officers of Sponsors and IRC. For the
year ended July 31, 1999 the Fund paid directors' fees and expenses of
$4,700.

For the year ended July 31, 1999, under an agreement with IRC, the Fund
was charged $310,686 for the costs and expenses related to employees of
IRC who provide administrative, clerical and accounting services to the
Fund. In addition, the Fund was charged $76,932 by an affiliated
company of IRC for the rental of office space.

6. Federal Income Tax Matters (unaudited)

On December 2, 1998, per share dividends from net investment income
and in excess of net investment income were declared as follows: Class A:
$0.08, Class B: $0.01, Class C: $0.02 and Class D: $0.10 respectively.
The dividends were paid December 18, 1998. For the Fund's year ended
July 31, 1999, all ordinary income dividends have been determined to
qualify for the dividends received deduction for corporate shareholders.

<PAGE>

Independent Auditors' Report

To The Board of Directors and Shareholders
of American Growth Fund, Inc.:

We have audited the accompanying statement of assets and liabilities of
American Growth Fund, Inc., including the statement of investments, as
of July 31, 1999, and the related statement of operations for the year then
ended, the statement of changes in net assets for each of the years in the
two-year period then ended, and the financial highlights for each of the
years in the four-year period then ended. These financial statements and
financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits. The financial highlights for the
year ended July 31,1995 were audited by other auditors, whose report
dated August 18, 1995 expressed an unqualified opinion on those
financial highlights.

We conducted our audits 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 and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included
confirmation of securities owned as of July 31, 1999, by correspondence
with the custodian and brokers; and where confirmations were not
received from brokers, we performed other auditing procedures. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable
basis for our opinion.

In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
American Growth Fund, Inc. as of July 31, 1999, the results of its
operations for the year then ended, the changes in its net assets for each of
the years in the two-year period then ended, and the financial highlights
for each of the years in the four-year period then ended, in conformity
with generally accepted accounting principles.

KPMG LLP
Denver, Colorado
August 27, 1999

<PAGE>

TRANSFER AGENT: Boston Financial Data Services, Inc., Two Heritage Drive, North
Quincy, MA 02171
CUSTODIAN: State Street Bank & Trust Company, Two Heritage Drive, North Quincy,
MA 02171
RETIREMENT PLAN CUSTODIAN: State Street Bank & Trust Company, Two Heritage
Drive, North Quincy, MA 02171
INDEPENDENT AUDITORS: KPMG LLP, 707 Seventeenth Street, Suite 2300, Denver,
CO 80202
UNDERWRITER/DISTRIBUTOR: American Growth Fund Sponsors, Inc., 110 Sixteenth
Street, Suite 1400, Denver, CO 80202

AMERICAN GROWTH FUND, INC. BOARD OF ADVISORS:

William D. Farr
President and Director of Farr Farms Co.
Chairman of the Board of Northern Colorado Water Conservancy
Past President of the National Cattleman's Association
Board Member of the Greeley Water Board

OFFICERS AND DIRECTORS INVESTMENT
ADVISOR
Robert Brody President and Director Investment Research
Corporation
Timothy E. Taggart Exectutive Vice President 110 Sixteenth Street, Suite
1400
D. Leann Baird Secretary Denver, CO 80202
Michael J. Baum Director OFFICERS AND
DIRECTORS
Eddie R. Bush Director Robert Brody
President,
Treasure
r, and Director
Harold Rosen Director Timothy E. Taggart
Executive Vice
President and Director
D. Leann Baird
Secretary and Director
</TABLE>

<PAGE>

AMERICAN GROWTH FUND, INC.

PART C - OTHER INFORMATION

Item 24. Financial Statements and Exhibits:

(a) Financial Statements

Included in Prospectus:
Financial Highlights
Included in Statement of Additional Information:
Report of Independent Accountants
Statement of assets and liabilities - July 31, 1999
Statement of operations - year ended July 31, 1999
Statement of changes in net assets - years ended July 31, 1998 and
1999
Notes to financial statements
Portfolio of investments
(Schedule I - Investments in securities of unaffiliated issuers) -
July 31, 1999

(b) Exhibits

1. (a) Articles of Amendment and Restatement (6)
(b) Articles Supplementary (6)

2. Registrant's By-laws, as amended. (2)
3. Not applicable
4. Instruments defining rights of shareholders:
See Article 4, 6 & 8 of Incorporation and Article 1, 4 & 7
of the Bylaws. (6)
5. Investment advisory contract between Investment Research
Corporation and registrant.
a. Distribution Agreement for Class A Shares (6)
b. Distribution Agreement for Class B Shares (6)
c. Distribution Agreement for Class C Shares (6)
d. Distribution Agreement for Class D Shares (6)
e. Selling group agreement between American Growth
Fund Sponsors,
Inc. And dealers as amended. (6)
6. Not applicable
7. Custodian agreement between state Street Bank and Trust
Company and
registrant. (1)
8. Transfer agent agreement between State Street Bank &
Trust Company
and Registrant. (1)
9. Not applicable.
10. Not applicable
11. Consent of KPMG Peat Marwick LLP.
12. Not applicable
13. Not applicable

14. a. Registrant's Self-Employed Retirement Plan. (2)
b. Registrant's Simplified Employee Pension Plan
Application and
Agreement.(1)
c. Registrant's Salary Reduction Simplified Employee

<PAGE>

Pension Plan Application and Agreement. (4)
d. Registrant's Individual Retirement Account Plan
and Agreement. (6)
e. Registrant's 403(b) Retirement Plan and Custody
Agreement. (3)
f. Registrant's Prototype Paired Defined Contribution
Plans. (4)
g. Registrant's Prototype Profit Sharing/401(k)
Plan.(4)
15. a. Distribution Plan for Class A Shares (6)
b. Distribution Plan for Class B Shares (6)
c. Distribution Plan for Class C Shares (6)
16. Schedule for computation of each performance quotation.
17. Financial Data Schedules filed as Exhibit 27 for electronic
purposes.
18. Rule 18f-3 Plan.

(1) Incorporation by reference to identically numbered exhibit
in Post Effective Amendment No. 42 to the Registration Statement under
the securities Act of 1933 on Form NA (File No. 2-14543) of Registrant
filed on December 1, 1988.

(2) Incorporated by reference to identically numbered exhibit
in Post-Effective Amendment No. 41 to the Registration Statement under
the Securities Act of 1933 on Form N-1A (File No. 2-14543) of Registrant
filed on December 1, 1987.

(3) Incorporated by reference to identically numbered exhibit
in Post-Effective Amendment No. 39 to the Registration Statement under
the Securities Act of 1933 on Form N-1A (File No. 2-14543) of Registrant
filed on October 1, 1985.

(4) Incorporated by reference to identically numbered exhibit
in Post-Effective Amendment No. 44 to the Registration Statement under
the Securities Act of 1933 on Form N-1A (File No. 2-14543) of Registrant
filed on December 1, 1990.

(5) Incorporated by reference to identically numbered exhibit
in Post-Effective Amendment No. 46 to the Registration Statement under
the Securities Act of 1933 on Form N-1A (File No. 2-14543) of Registrant
filed on December 1, 1992.

(6) Incorporated by reference to identically numbered
exhibi
t
in Post Effective Amendment No. 51 to the Registration Statement under
the Securities Act of 1933 on Form N-1A (File No. 2-14543) of Registrant
filed on September 30, 1996.

Item 25. Person Controlled by or Under Common Control

None

Item 26. Number of Holders of Securities. The following table set forth
the approximate number of record holders of the one cent par value
common stock of the Registrant as of November 26, 1999.

<PAGE>

<TABLE>
<CAPTION>
<S> <C>
(1) (2)
Title of Class Number of Record Holders
One Cent Par Value Common Stock 5,464
</TABLE>

Item 27. Indemnification. Reference is made to Article IX of the
registrant's By-Laws (Exhibit 2 to this registration Statement) and Article
7(c) of the registrant's Articles of Incorporation (Exhibit 1 to this
Registration Statement).

Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing provisions
or otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other
than the payment by the Registrant of expenses incurred or paid by a
director, officer, or controlling person of the Registrant in connection with
the successful defense of any action, suite or proceeding) is asserted
against the Registrant by such director, officer or controlling person in
connection with the shares being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such issue. The
Registrant hereby undertakes that it will apply the indemnification
provisions of its By-Laws in a manner consistent with Release No. 11330
of the Securities and Exchange Commission under the Investment
Company Act of 1940 as long as the interpretation of Section 17(h) and
17(i) of such Act expressed in that Release remain in effect.

Item 28. Business and Other Connections of Investment Adviser. The
following table set forth the principal business of each director and officer
of the Investment Adviser of the Registrant for the two fiscal years ended
July 31, 1999.

Name & Position With
Principal Business
Investment Adviser

Robert Brody
President, Treasurer and
Director

Timothy E. Taggart
Vice President, Director

D. Leann Baird,
Secretary, Director

<PAGE>

Mr. Brody is also President and a director of American Growth Fund, Inc.,
the Registrant; Treasurer and a director of American Growth Fund
Sponsors, Inc., the Registrant's underwriter; and President, Treasurer and
a director of American Growth Financial Services, Inc., 110 16th Street,
Denver, Colorado Mr. Taggart is also Vice President, secretary and a
director of American Growth Fund Sponsors, Inc., the Registrant's
underwriter, 110 16th Street, Denver, Colorado; and Vice President and
Director of American Growth Financial Services, Inc., 110 16th Street,
Denver, Colorado.

Mrs. Baird is also secretary of American Growth Fund, Inc., the
Registrant; and secretary of American Growth Financial Services, Inc.,
110 16th Street, Denver, Colorado.

Item 29. Principal Underwriters

(a) None

(b)

(1)Name and Principal (2)Position & Offices (3)
Position & Offices
Business Address with Underwriter with
Registrant

Robert Brody
110 16th Street
Suite 1400 President, Treasurer
Denver, CO 80202 Director Preside
nt, Director

Timothy E. Taggart
110 16th Street
Suite 1400 Exec. Vice president Treasu
rer
Denver, CO 80202 Secretary, Director
</TABLE>

None

Item 30. Location of Accounts and Records. All accounts and
records required to be maintained by Section 31(a) of the Investment
Company Act, and the rules and regulations promulgated thereunder, are
located at the offices of the Registrant, 110 16th Street, Suite 1400,
Denver, Colorado 80202, and at the offices of its custodian and transfer
agent, State Street Bank & Trust Company, 2 Heritage Drive, N. Quincy,
MA 02171, and are under the general custody and control of its
Secretary, D. Leann Baird.

Item 31. Management Services

None

Item 32. Undertakings.

None

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets

<PAGE>

all of the requirements for effectivness of this Registration Statement
pursuant to Rule 485(b) under the Securities Act of 1933 and has duly
caused this post-effective amendment to the registration statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the
City and County of Denver, State of Colorado, on the XXth day of
September, 1999.

American Growth Fund, Inc.
By: /s/ Robert Brody
- ------------------------------
Robert Brody, President

Pursuant to the requirements of the Securities Act of 1933, as amended,
this amendment to the registration statement has been signed by the
following persons in the capacities indicated and as of the date stated.

(a) Principal Executive Officer: Title
Date

/s/ Robert Brody President
- ---------------------------------- and Director

11/30/99
Robert Brody

(b) Principal Financial and Accounting Officer:

/s/ Timothy E. Taggart Treasurer

11/30/99
- ----------------------------------
Timothy E. Taggart

/s/ Michael J. Baum, Jr. 11/30/
99
- ----------------------------------
Michael J. Baum, Jr.

/s/ Eddie R. Bush 11/30/
99
- ----------------------------------
Eddie R. Bush

/s/ Harold Rosen 11/30/
99
- ----------------------------------
Harold Rosen

<PAGE>

Exhibit 11

INDEPENDENT AUDITORS' CONSENT

To The Board of Directors
American Growth Fund, Inc.:

We consent to the use in this Registration Statement of American Growth
Fund, Inc. of our report
dated August 27, 1999, appearing in the Statement of Additional
Information, which is part of such
Registration Statement, and to the references to our firm under the
headings "Financial Highlights"
included in the Prospectus, which is also part of such Registration
Statement and " Custodian and
Independent Auditors" included in the Statement of Additional Information.

KPMG LLP
Denver, Colorado
November 30, 1999

<PAGE>

</TABLE>