AMERICAN CONSOLIDATED GROWTH CORP, 10KSB, 1997-10-22

AMERICAN CONSOLIDATED GROWTH CORP
10KSB, 1997-10-22
HELP SUPPLY SERVICES

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-KSB
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ending June 30, 1997
Commission File Number 0-16447

AMERICAN CONSOLIDATED GROWTH CORPORATION
(Exact name of Issuer as specified in its charter)

Delaware 52-1508578
(State of incorporation ) (I.R.S. Employer Identification No.)

5031 S. Ulster Street, Suite 205, Denver, CO 80237
(Address of principal executive offices and zip code)

(303) 220-8686
(Issuer's telephone number including area code)

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

Securities registered pursuant to Section 12(g) of the Act:

Title of Class: Common Stock $.10 par value

Check mark whether the Issuer (1) filed all reports required to be filed by
section 13 or 15(d) of Securities Exchange Act of 1934 during the preceding 12
months (or for such a shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for the past
90 days.

Yes [ X ] No [ ]

Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B is contained in this form and no disclosure will be
contained, to the best of the Issuer's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-KSB. [X ]

Issuer's revenues for its most recent fiscal year: $10,207,667.

The aggregate market value of the voting stock of the Issuer held by
non-affiliates as computed by reference to the prices at which the stock was
sold and the average of the bid and ask prices of such stock within the prior
sixty days as of June 30, 1997, was $503,000. A total of 7,185,711 common shares
were owned by non-affiliates as of June 30, 1997.

The number of shares of Common Stock, $.10 par value, outstanding on June
30, 1997 was 9,754,190 shares.

Transitional Small Business Disclosure (check one): Yes ( ) No ( X )

Documents Incorporated by Reference
-----------------------------------
None.

<PAGE>

Table of Contents

Part I

Item 1. Description of Business
Item 2. Description of Property
Item 3. Legal Proceedings
Item 4. Submission of Matters to a Vote of Security
Holders

Part II

Item 5. Market for Common Equity and
Related Stockholder Matter
Item 6. Management's Discussion and Analysis
or Plan of Operation
Item 7. Financial Statements
Item 8. Changes in and Disagreements with
Accountants and Financial Disclosure

Part III Item 9. Directors and Executive Officers, Promoters
and Control Persons; Compliance with Section 16(a)
of the Exchange Act
Item 10. Executive Compensation
Item 11. Security Ownership of Certain Beneficial Owners
and Management
Item 12. Certain Relationships and Related Transactions
Item 13. Exhibits and reports on Form 8-K

SIGNATURES

FINANCIAL STATEMENTS AND SCHEDULES

<PAGE>

PART I

Item 1. Description of Business.
- --------------------------------

American Consolidated Growth Corporation (the "Company" or "AMGC") is a
U.S. public company engaged in the financial development of its wholly owned
subsidiary, Eleventh Hour, Inc. The common stock of the Company is traded under
the symbol "AMGC" on the Electronic Bulletin Board, NASDAQ (OTC-BB). The
principal executive offices of the Company are located at 5031 S. Ulster Street,
Suite 205, Denver, CO 80237. Telephone number: (303) 220-8686. Facsimile number:
(303) 220-7781.

Eleventh Hour, Inc. (EHI) is a staffing services business engaged in
temporary and permanent employee placement and outsourcing. At June 30, 1997,
EHI represents the sole revenue producing investment of the Company. The wholly
owned subsidiary was acquired for stock and debt assumption on July 1, 1994.
(See "Business of Issuer" and "Investments - Eleventh Hour, Inc."). Prior to
1994, the primary purpose and business of the Company was "technology banking,"
or capitalizing and developing U.S. emerging growth technologies. Investments in
research and development technologies included equity holdings in Advance
Display Technologies, Inc., ("ADTI") a fiber optics display company, and
Ultratech Knowledge Systems, Inc., dba AGTsports, Inc., ("AGT") a computer
software and services business targeting golf and sports recreation markets. Due
to the non-performance of both investments in prior years, these assets were
written off in fiscal 1995. (See the Company's Form 10-KSB/A, June 30, 1995).

During the fiscal year ended June 30, 1995, the Company acquired new
management and changed the Company's primary focus to develop the business of
Eleventh Hour, Inc. For the fiscal year ending June 30, 1997, EHI produced
unaudited gross revenues of $10,207,667, with net earnings of $173,522. As of
the date of filing of this report, the Company is negotiating with its principal
independent auditors to obtain a certified audit for the fiscal year ended June
30, 1997. For the most recent audited financial statements, please refer to the
Company's Form 10-KS/A for the fiscal year ending June 30, 1996.

As of June 30, 1997, AMGC had a working capital deficiency of approximately
$1,362,581 and a stock holders' deficit of $2,497,260. Due to the recurring loss
history of the Company and considering the limited number of sources of new
funding for working capital, the auditors of the Company have raised significant
doubts as to the abilities of the Company to continue as a going concern.
Following the completion of a comprehensive restructuring program in fiscal
1997, management has implemented plans to reduce overhead at every level while
increasing sales performance at EHI. (See "Management Discussion and Analysis"
below). Provided new sources of financing are secured, the Company believes it
will be able to successfully meet all of its current obligations, however, no
assurances can be provided this will occur.

Investments

As of June 30, 1997, the Company had active investments in one company:
Eleventh Hour, Inc., a wholly owned subsidiary engaged in the staffing services
industry. (See "Business of Issuer" below). As of June 30, 1997, the Company
owned a 15% overriding royalty on sales of software technology products of
Global Links Trading, Limited, (GLT) a computer software licensing company. The
investment is the outgrowth of the 1995 joint venture agreement with GLT and a
former affiliate, AGTsports, Inc. For the fiscal year ending June 30, 1997, GLT
produced no sales and no royalty payments were received by the Company. Pending
further development of GLT products, management can provide no assurance GLT
will be successful in its business plan or that any royalty payments will be
received in the future. The royalty agreement carries no expense to the Company.

<PAGE>

Business of Issuer

The primary business of the Issuer is development of its wholly owned
subsidiary, Eleventh Hour, Inc., a regional staffing services business. Eleventh
Hour, Inc. ("EHI") was acquired on July, 1 1994 for 1,000,000 shares of the
issued and outstanding common stock of the Company. The acquisition successfully
retired $720,996 of EHI long term debt and converted $1,658,000 of outstanding
EHI notes into redeemable common stock, ("puts") of AMGC. The acquisition was
accounted for as a purchase as reported in the Company's Form 10-KSB/A for the
fiscal year ended June 30, 1995. In fiscal 1996, AMGC converted these common
stock puts into equity and promissory notes expiring in 2003. (See "Notes to
Consolidated Financial Statements - Note 6").

Services and Products of EHI

EHI is a regional provider of temporary personnel and outsourcing services
to businesses, professional and service organizations and government agencies.
The Company provides a broad range of staffing services through its network of
seven (7) Company-owned branch locations in California, Colorado, Kansas and
Missouri. During its most recent fiscal year, the subsidiary served more than
4,000 customers across the U.S.

The primary product of the business is represented by temporary placement
of individuals who possess a wide variety of office, light industrial and other
skills, including secretarial, word processing, data entry, telemarketing,
assembly, picking, packing and sorting and shipping and receiving. In addition,
the Company provides temporary personnel with various technical and professional
skills such as programming, designing, engineering and accounting. Permanent
placement of qualified personnel represents another important product for the
Company. Taken together, the services provided by EHI can be viewed as a
spectrum ranging from traditional temporary services to value-added outsourcing
solutions.

Onsite Staffing Coordinator Program

EHI has established an Onsite Staffing Coordinator Program; a cost
effective solution for clients who spend administrative and personnel department
time and resources managing employees whose jobs are generally routine and are
characterized by high turnover rates. This program most often includes the
placement of an EHI Staffing Specialist onsite who coordinates and supervises
all staffing service functions for the client. The specialist typically
interfaces with the Human Resources department of the client, helping to
increase management time where it is more effectively spent and reducing
unnecessary functions where needed. The onsite program utilizes temporary staff
to help control overhead costs and to improve profitability in positions
previously filled by permanent employees. This service is often provided to
clients who have highly fluctuating personnel needs such as light manufacturing
companies and assembly and packaging businesses.

Morning Rescue Team

The Morning Rescue Team is a unique business advantage provided to
customers of EHI. Each day, the company provides a special team of experienced
workers who are dressed and prepared for work assignments by 7:30 am. This
enables customers to receive qualified temporary help employees upon request
within a very short period of time, as opposed to competitor operations, who
often require several hours or even days to fill work orders.

<PAGE>

Eleventh Hour, Inc. was founded by Norman L. and Valerie A. Fisher, (See
"Biographical Data"), who established the staffing business as a Colorado
corporation on December 21, 1988. EHI utilizes a central headquarters located in
Englewood, Colorado for management of its affiliate branch offices, including
all accounting, support and supervisory services. The address and telephone
number of the principal executive offices of EHI are: Eleventh Hour, Inc., 7500
East Arapahoe Road, Suite 101, Englewood, CO, 80112. Telephone number: (303)
220-5300.

Markets of EHI

According to the August 1996 issue of the Staffing Industry Report,
published by Staffing Industry Analysts, Inc., revenues from combined U.S.
staffing industry segments generated an estimated $62.9 billion in 1995, with
combined temporary help services generating an estimated $40.6 billion.
Temporary help has been one of the fastest growing segments in recent years,
especially in the areas of light industrial, medical and technical support
personnel. Eleventh Hour, Inc. employs over 4,000 temporaries annually, chiefly
in the areas of clerical and light industrial services. Clerical employees
represent over 85% of the temporary workers provided by EHI in fiscal 1997.

Another independent industry study published in May of 1996 by the National
Association of Temporary and Staffing Services reports payroll receipts for the
temporary help segment in excess of $7 billion for the first quarter of 1996.
The study forecasts continuing growth in the staffing services industry due to
several factors: the need for business organizations to remain flexible in order
to compete in an interconnected global economy; the ever-evolving social
contract between the workforce and business organizations wherein larger numbers
of people view temporary employment as a way to gain greater job security and
higher career paths; the difficulties all types of business organizations
experience in attracting, evaluating and recruiting employees; a broadening of
the types of staffing arrangements offered by staffing companies, as reflected
in the expanding services industries; and the overall health of the U.S.
economy, which celebrated its sixth anniversary of growth in March, 1997.

Distribution Methods of Company's Services

EHI plans to continue providing a wide range of high quality services to a
diverse group of clients through its seven existing branch office locations. EHI
promotes a philosophy of developing and maintaining long term relationships with
its clients, striving to achieve high levels of performance and customer
satisfaction to attract and retain local, regional and national accounts. The
Company continues to explore growth opportunities to expand its existing service
offerings, develop additional skill classes and enter new markets by selectively
expanding its offices through targeted acquisitions.

Prominent industry analysts such as the N.A.T.S.S. and Staffing Analysts,
Inc. have reported extensively on the ongoing trend toward consolidation within
the Staffing Services industry. In conjunction with this trend, management of
EHI has adopted plans to target and acquire smaller companies for the purpose of
expanding EHI's market presence in fiscal 1998. The profile for such targets
includes businesses with core temporary accounts generating revenues of
$3,000,000 or more annually. Management believes such acquisitions can be
developed utilizing existing EHI resources, management and personnel, thereby
achieving economies of scale and lower administrative overhead costs.

<PAGE>

Competitive Business Conditions

Demographically, the U.S. staffing services industry is highly fragmented,
with an estimated 3,000 to 5,000 private firms operating over 10,000 offices.
The size of these companies varies greatly, ranging from smaller "mom and pop"
temporary service businesses with annual revenues of less than $500,000 to
larger international companies such as Manpower, Inc., a company with revenues
in excess of $6 billion. Despite the considerable competition, smaller,
well-managed companies, especially those with a specialized focus, can succeed
on a local or regional basis.

For employers, the use of temporary personnel is a proven technique to
mitigate the rising costs of recruiting, fringe benefits, employee turnover and
other employee-related expenses. These advantages have led many companies to
adopt business strategies focusing on their core business competencies, with
non-core business support functions being "outsourced" to service companies such
as EHI. Outsourcing services remains an emerging industry and is, as such, still
relatively undefined. It parallels the temporary help services industry in that
it is also highly fragmented, with few large companies operating on a national
level. EHI believes all segments within the industry are experiencing a trend
toward consolidation and has implemented new strategies to help adapt to the
changing marketplace.

Compliance with Government Regulations

The operations of Eleventh Hour, Inc. do not involve mandatory compliance
with non-environmental federal regulations other than employer-related issues
such as the 1995 Federal Family Medical Leave Act ("FMLA"). As of June 30, 1997,
EHI fully complies with the terms of this legislation as a U.S. employer.

Research and Development Costs

As of June 30, 1997, EHI has not engaged in any material research and
development activities or related costs in the prior two years.

Trademarks and Trade Names

The Company, through its wholly owned subsidiary, Eleventh Hour, Inc. owns
one Trade Name: "XIth Hour."

Compliance with Environmental Laws and Regulations

The Company liquidated all of its mining properties and operations in the
fiscal year ended June 30, 1992. The Company does not believe that it is subject
to any local, state, or federal statutory and regulatory requirements with
respect to environmental safety and land reclamation that would affect it
adversely in the future. However, there can be no assurance of this. Compliance
to date has had no material effect on the Company's method of conducting its
business and the cost of such compliance has not been significant.

Employees

During the period ending June 30, 1997, the Company had one full time
employee together with 27 full time employees of the wholly owned subsidiary,
Eleventh Hour, Inc. None of these employees are represented by any Union or
collective bargaining group and there is no prior history of any strikes,
slow-downs or other labor disputes. The Company is highly dependent on its full
time employee and certain members of EHI management. (See Part III, Item 9 and
Item 10, "Directors and Executive Officers of the Registrant - Biographical
Information").

<PAGE>

International Operations

The Company conducts operations only in the United States.

Item 2. Properties
- ------------------

During the fiscal year ending June 30, 1997, the Company's business offices
were located at 8100 East Arapahoe Road, Suite 309, Englewood, CO, 80112. The
Company's new offices are located at the address provided on page one of this
report. The office space, located in a modern one story building completed in
1983, is leased at $1,100 monthly under a one year cancelable lease expiring in
October, 1997, with a renewal option for an additional two years at the
then-current market rate. EHI leases office space for its branch offices in
Overland Park, Kansas, and Tustin, California, and Englewood, Colorado. (See
Operating Leases in Notes to Consolidated Financial Statements). The following
is a schedule of minimum rental payments required under the above referenced
operating leases as of June 30, 1997:

Years-Ending
June 30 Amount Estimated Surcharge
------- ------ -------------------

1998 208,972 38,580
1999 111,364 38,580
2000 84,305 40,000
--------- ---------
$ 634,859 $ 117,160

Total rent expense charged to operations for the years ended June 30, 1996
and 1997 was $264,924 and $263,780, respectively. The Company's operating leases
require current monthly payments of $20,250 with expirations at various dates
through May, 2000.

Item 3. Legal Proceedings
- -------------------------

During fiscal 1997, the Company was a defendant in Display Group, LLC vs.
American Consolidated Growth Corporation, a civil suit in Colorado brought by
Display Group, LLC, the management arm of Advanced Display Technologies, Inc.,
(ADTI) a former affiliate of the Company. The suit concerns ownership of
1,400,000 shares of ADTI common stock. The stock was originally received by the
Company in exchange for transfer of control of certain fiber optics-related
technologies to ADTI. In fiscal 1995, the Company wrote down its investment in
ADTI to a value of zero. In fiscal 1997, the Company was ordered to turn over
the shares to the Court pending the outcome of a jury trial on the matter. As of
the date of the filing of this report, the Company is unable to predict the
outcome of this matter. In the event the Company is unsuccessful in its efforts
to retain the subject shares, in the opinion of counsel, no adverse consequences
are anticipated to occur, other than the loss of the title to the stock.
Subsequent to fiscal year ended 1997, the Company assigned its legal rights and
expenses in this case to a third party desiring to pursue related claims against
ADTI as result of former agreements related to the licensing of the ADTI
technology in prior years. Prior to the assignment, the Company incurred legal
fees of $6,655 which are included in the professional fees due for services
section of the Company's financial statements. (See "Notes to Consolidated
Financial Statements - "Footnote 9").

<PAGE>

Subsequent to fiscal year end, on July 8, 1997, the Company reached a
settlement agreement with the office of the North Dakota Securities Commissioner
concerning an investment made in Eleventh Hour, Inc. by a North Dakota resident
in prior years. The settlement agreement provides repayment of $80,000 to the
investor from AMGC over a one year term, and verifies no violations of the
State's securities laws occurred.

Subsequent to fiscal year ended June 30, 1997, on August 18, 1997, the
Company resolved outstanding tax matters with the Internal Revenue Service
concerning the tax years 1990, 1991, 1992, 1993 and 1994. Due to a change in the
primary business of the Company in prior years, the IRS determined that certain
net operating losses carried by the Company were non-allowable items. In
addition, corporate taxes for the year 1994 were due of $62,000, together with
penalties and interest of $20,000. As of the date of filing of this report,
based upon information provided by the auditors of the Company, management
believes the principal tax liability will be minimized by net operating losses
occurring in fiscal 1996.

Item 4. Submission of Matters to a Vote of Security Holders
- -----------------------------------------------------------

None.

Part II

Item 5. Market for Registrant's Common Equity and Related Stockholder Matters
- -----------------------------------------------------------------------------

Market Information

The Company's common stock, par value $.10 per share ("Common Stock") is
traded in the over-the-counter market, NASDAQ, (OTC-BB) under the stock trading
symbol "AMGC."

(1) Bid
---

Quarter Ending (2) High (3) Low
-------------- ---- ---
June 30, 1997 $ 0.07 .05
March 31, 1997 0.10 .07
December 31, 1996 0.25 .18
September 30, 1996 0.21 .18
June 30, 1996 $ 0.37 .25
March 31, 1996 0.37 .25
December 31, 1995 1.37 .75
September 30, 1995 0.78 .32

(1) Such over-the-counter market quotations reflect inter-dealer prices,
without any retail markup, markdown, or commission and may not necessarily
represent actual transactions.

(2)(3) At the time of this report, the only activities in the Company's
trading Common stock, of which the Company is aware, is by Broker/Dealers known
as wholesalers. Consequently, there has been little or no retail trading
activity in the Company's securities during the fiscal year ended June 30, 1997.
The quotes shown above were arrived at by averaging the bid and the ask price in
the marketplace during these periods and are provided for informational purposes
only. The Company believes these quotes to be estimates and therefore should not
be relied upon for investment purposes.

<PAGE>

Holders of Record

As of June 30, 1997, there were approximately 2,054 shareholders of record
of Common Stock.

Dividends

For the fiscal years 1995, 1996 and 1997, no dividends were declared or
issued by the Company. Due to insufficient capital resources and earnings
generated from operations during these years, the Company has been limited in
its ability to declare or issue dividends. For these same reasons, in 1995, the
Company rescinded a dividend declared by former management in 1991 of $687,435,
(See the Company's Form 10-KSB for the fiscal year ended June 30, 1996) There
are no contractual or written limitations concerning the Company's declaration
of dividends in the by-laws or records of the Company.

Item 6. Management's Discussion and Analysis of Financial Condition and Results
of Operations
- --------------------------------------------------------------------------------

In the fiscal year ending June 30, 1997, revenues were $10,207,667 as
compared to the year ending June 30, 1996 of $8,897,455. Following the change in
the primary purpose and business of the Company, net loss decreased from
$9,973,547 in fiscal 1995 to a net loss of $701,774 in fiscal 1996, and a
further decrease to $437,160 in fiscal 1997. However, gross margins remained
relatively stable over the same period: $2,682,410 in fiscal 1995 compared to
$2,259,221 in fiscal 1996, and $2,421,211 in fiscal 1997. For the year ended
June 30, 1997, direct expenses were $7,786,456 and interest expenses totaled
$439,332. In fiscal 1995, the Company experienced a non-recurring loss of
$7,976,740 resulting from costs associated with the write down and liquidation
of certain assets and the internal restructuring of the Company. In fiscal 1997
the Company experienced significant legal, accounting and other related costs of
the failed merger of EHI with International Nursing Services, Inc. Additional
legal expenses were incurred in North Dakota as the Company resolved the matter
involving the North Dakota Securities Commissioner. Increase in revenues was
attributed to higher demand for temporary workers provided by EHI.

As of June 30, 1997, in the opinion of management, the Company has
progressed significantly as compared to the period ending June 30, 1996. A new
financing agreement was completed in fiscal 1997 with Concord Growth
Corporation, of San Mateo, California. The agreement significantly reduced EHI's
interest expense on accounts receivables financing by over fifty percent. In
addition, the effect of the agreement is anticipated to assist EHI in
accomodating future sales growth. Although no assurance can be provided EHI
future sales will increase, in the opinion of management, the savings to the
Company in annual interest payments resulting from the accord will be
significant and will have a favorable material impact on the future
profitability of the Company.

During fiscal 1997, the Company has been able to successfully continue
operations, to reposition itself in the marketplace, to acquire new management
and consulting expertise and to improve its marketing strategies. All of these
efforts have been made for the purpose of increasing shareholders' equity and
profitability on a going forward basis.

The foregoing discussion contains certain forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934, which are intended to be covered by the safe
harbors created thereby. These statements include the plans and objectives of
management for future operations, including plans and objectives relating to
development of new business and predictions concerning the results of various
legal proceedings as discussed in Item 3. The forward-looking statements
included herein are based on current expectations that involve numerous risks
and uncertainties. Assumptions related to the foregoing involve judgements with
respect to, among other things, future economic, competitive and market

<PAGE>

conditions and future business decisions, all of which are difficult or
impossible to predict accurately and many of which are beyond the control of the
Company. Although the Company believes that the assumptions underlying the
forward-looking statements are reasonable, any of the assumptions could be
innaccurate and, therefore, there can be no assurance that the forward-looking
statements included in this Form 10-KSB will prove to be accurate. In light of
the significant uncertainties inherent in the forward-looking statements
included herein, the inclusion of such information should not be regarded as a
representation by the Company or any other person that the objectives and plans
of the Company will be achieved.

Liquidity and Capital Resources

Cash and cash equivalent's balance on June 30, 1997 was $2,140 and current
assets were $926,424. Current ratios for the year ending June 30, 1997 were .40
to 1, as compared to .54 to 1 the previous year. As of June 30, 1997, the
Company had a working capital deficiency of $1,362,581 and a stockholders'
deficit of $2,497,260, which includes non-recurring losses of $7,976,740 in
fiscal 1995 sustained due to the write down and liquidation of certain
technology assets, resolution of outstanding issues related to the former
business of the Company and internal restructuring of AMGC.

Provided the subsidiary business continues to experience positive cash flow
and to be profitable on a going forward basis, management believes the Company
will be able to successfully meet all of its current obligations. However, no
assurances can be given the Company will be successful in these endeavors.

Material Commitments for Capital Expenditures

As of June 30, 1997, the Company has material commitments for capital
expenditures including promissory notes of $1,267,999 which come due in
February, 2003 and carry 14% interest. The interest is payable quarterly at
approximately $45,000 per quarter. At June 30, 1997, the Company is arrears on
the interest payment due April 15, 1997. Management has established verbal
working agreements with the holders of these Notes concerning payment of
interest due for the period. In the event litigation should arise resulting from
the default provisions of the Notes, the Company is unable to determine what
consequences may occur. As of the date of filing of this report, the Company has
no knowledge of any existing or pending legal action from these parties.
However, in the event the Company is unable to bring the interest payments
current in fiscal 1998, no assurances can be provided litigation will not ensue.
In such an event, the Company is unable to determine what, if any, adverse
consequences may occur. (See Notes to Consolidated Financial Statements - Note
6, Common Stock Subject to Put Option).

Unfavorable Trends or Uncertainties

The business of Eleventh Hour, Inc. may be subject to various unfavorable
trends or uncertainties such as increased competition in the marketplace, rapid
consolidation of the staffing services industry and/or a significant decline the
health of the U.S. economy. The Company may also be affected by a significant
rise or decline in interest rates and the U.S. trading markets and current
proposed legislation to increase the minimum wage. The Company can make no
determination as to the effect of these factors on operations or the probability
such factors will occur.

<PAGE>

Seasonal Aspects Bearing Upon Operations

Eleventh Hour, Inc. is not subject to seasonal fluctuations in its business
cycle which have a material impact on operations, other than national and
banking holidays.

Item 7. Financial Statements and Supplementary Data
- ---------------------------------------------------

This response is submitted as a separate section of this report (see
Unaudited Consolidated Financial Statements - Pages F-1 to F-10).

Item 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
- --------------------------------------------------------------------------------

There have been no disagreements with the Company's independent accountants
on accounting or financial disclosure.

Part III

Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance
with Section 16(a) of the Exchange Act.
- --------------------------------------------------------------------------------

As of June 30, 1997, the Executive Officers and Directors of the Company,
their ages and positions held in the Company were as follows:

Name Age Positions held
- ---- --- --------------

Louis F. Coppage 60 Chairman, CEO and President

Cory J. Coppage 34 Secretary, Treasurer and Director

Norman L. Fisher 50 Director

Joe Lee 62 Director

B. Mack DeVine 53 Director *

* Subsequent to fiscal year ended June 30, 1997, Mr. DeVine formally accepted
his nomination on August 1, 1997.

The directors serve for a term of three years. All of the above directors,
except for Louis F. Coppage, and B. Mack DeVine were elected at the Company's
annual meeting held on June 27, 1996 and will serve until their successors are
duly elected and qualified or until their earlier resignation or removal. Mr.
Louis Coppage and Mr. DeVine will serve until the next annual meeting of the
shareholders, at a date to be scheduled during the current fiscal period.

<PAGE>

Biographical Information

Louis F. Coppage - Chairman, CEO and President

Mr. Coppage, 60, joined the Company as Chairman and CEO at a special
meeting of the Board of Directors held on March 17, 1997. He has over twenty
years of executive and managerial experience with both private and public
corporations involving business financial development in the domestic and
international marketplace. Since 1979, Mr. Coppage has provided advisory
services for a number of corporate clients with an emphasis on the capital
formation process. From 1993 to present, he provided investment banking
consulting services for AMGC and its former affiliate, AGTsports, Inc., where he
assisted in the turnaround and restructuring of both companies. He is a member
of the Board of Directors of AGTsports, Inc., a Colorado corporation, and
Citadel Environmental, an Arizona corporation. From 1986 to 1993, Mr. Coppage
served as financial consultant for various corporate clients in real estate,
energy, insurance management and investment holdings-related businesses. From
1973 to 1984, Mr. Coppage was founder and a major shareholder of two energy
development companies: Foresee, Ltd and American Energy Investments, Inc. of
Denver, Colorado. From 1969 to 1973 he was President of Coppage & Associates, a
financial planning company. Mr. Coppage began his business career in the life
insurance field with Connecticut General, where he was honored as an outstanding
salesman and featured in Time, Newsweek and U.S. World Report. He was a founding
member of insurance and financial planning groups such as The Top of the Table
and The Forum and he holds memberships in several civic, social and charitable
organizations.

Cory J. Coppage - Secretary, Treasurer and Director

Mr. Coppage, 34, currently serves as Treasurer and Secretary of the Company
and is a member of the AMGC Board of Directors. A business school graduate of
Regis University, Mr. Coppage has studied business administration and has over
eight years of executive and managerial experience. Since 1996, he has served as
Secretary and Treasurer of AGTsports, Inc., a former affiliate of the Company.
From 1989 to 1994, he was engaged in the liability insurance field as a licensed
property & casualty agent and field manager for Liability Insurance Operations
Network, Inc., and W.J. Plemons Insurance Agency of Atlanta, GA. On January 26,
1995, Mr. Coppage joined the AMGC Board of Directors and began assisting the
Company in implementing a comprehensive restructuring program, which was
successfully completed in fiscal 1997. He has studied educational courses in the
areas of SEC reporting and marketing of U.S. public companies. Mr. Coppage is
Director of Shareholder and Investor relations at AMGC.

Norman L. Fisher - Director

Mr. Fisher is the co-founder, President and Chief Executive Officer of
Eleventh Hour, Inc. and a Director of the Company. He has over twenty years of
management experience, including four years with Norrell Services as a Regional
Manager from 1978 to 1982 and six years as an Executive Vice President and
Managing Director of Talent Tree, Inc. from 1982 to 1988. As a member of the
Executive Committee and Board of Directors of Talent Tree, Inc. Mr. Fisher was
responsible for the nationwide expansion of operations from a local Houston,
Texas-based business with three offices to a major national service with 135
branch locations and approximately $250 million in annual sales. In 1988, Mr.
Fisher co-founded EHI in Englewood, Colorado. Mr. Fisher, 50, is a graduate of
Western State College and holds a Bachelor of Science Degree in Business
Administration. He is a well-known figure in the personnel services industry and
has served in various capacities in both national and local industry
associations. Mr. Fisher is married to Valerie A. Fisher, the Executive Vice
President of Eleventh Hour, Inc.

<PAGE>

Joe Lee - Director

Mr. Lee, 58, accepted an appointment as an outside member of the Board of
Directors of AMGC on January 25, 1996. He is Chairman of the Board of Directors
of Denver Business College, Inc., General Manager of Universal Management, Inc.,
President of School Management, Inc. and the General Partner of The Educational
Plaza, a 110,000 square foot private educational facility located in Denver,
Colorado. Mr. Lee has expertise in the administration and management of
independent colleges and schools, with a special emphasis on financial and staff
personnel management. He is a past president and past commissioner of the
Association of Independent Colleges and Schools. From 1973 to 1982, Mr. Lee
owned and operated Parks College, Inc., formerly Parks School of Business, in
Denver, Colorado. From 1984 to 1986 he was Chairman of Trend Systems, Inc.,
where he supervised the operation of nine schools and three branch campuses in
the states of Washington and Oregon. Mr. Lee's present duties as Chairman of
Denver Business College, Inc. include overall responsibility for operation of
the main campus and three branch campuses. Mr. Lee is also a Director of Prides
Business College in Adelaide, South Australia.

B. Mack DeVine
Director

Mr. Devine, 53, accepted his appointment to the AMGC Board of Directors on
August 1, 1997. He has more than twenty years experience in both the public and
private sectors as Chief Executive Officer and/or President of operating
companies listed on NASDAQ, AMEX and NYSE. He is an experienced turnaround
specialist for companies facing financial distress or bankruptcy and has
successfully directed numerous Chapter 11 reorganizations. Since 1989, Mr.
DeVine has been the CEO of DeVine & Associates, Inc., a company providing
management consulting services to clients in the Southeast United States. From
1988 to 1989, he was CEO, President and Director of Devco Petroleum Company,
Inc., where he directed operations of ten convenience store/petroleum outlets
with annual revenues of over $10,000,000 and approximately fifty employees. From
1982 to 1988, Mr. DeVine was Chairman, CEO and President of Key Energy
Enterprises, Inc., an $80,000,000 convenience store company with 800 employees
and operations located in the Southeast United States. He was also President and
Director of American Agronomics Corporation from 1976 to 1982, where he was
responsible for the turnaround and restructuring of a $200,000,000 vertically
integrated citrus company. Prior to 1976, Mr. DeVine held positions as Chief
Financial Officer of companies such as Great Southern Equipment Company,
Automatic Merchandising, Inc., and Bay-Con Industries, Inc. He was first
lieutenant in the U.S. Army and is a private pilot. Mr. DeVine is also the
Chairman and CEO of AGTsports, Inc., a Colorado corporation.

None of the above directors have held any equity stake in any business that
has declared bankruptcy; nor have been convicted of any criminal offense other
than minor traffic violations, nor have had any judgements entered against them
which would restrict or preclude the director from being involved in securities
transactions; nor have any record of violations of securities or commodities
laws.

Compliance with Section 16(a) of the Securities Exchange Act of 1934

Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and directors to file initial reports of ownership and
reports of changes in ownership with the Securities Exchange Commission.
Executive officers and directors are required by SEC regulations to furnish the
Company with copies of all Section 16(a) forms they file. Based solely on a
review of the copies of such forms furnished to the Company and written
representations from the Company's executive officers and directors, as of the
date of this report, the Company is unable to make a determination as to whether
or not any officers or directors failed to file on a timely basis any reports
relating to transactions involving common stock of the Company owned by them.
The Company has implemented internal procedures for the purpose of determining
whether officers or directors have failed to file timely reports relating to
transactions involving common stock of the Company, and, if necessary, to file
any such reports in the appropriate time and manner.

<PAGE>

Item 10. Executive Compensation
- -------------------------------

The following table sets forth the salary, bonus and other compensation
approved by Board of Directors of the Company for the President and the
Company's four other most highly compensated executive officers (the "named
executive officers").

Name and Position Annual Compensation Long Term Compensation
Salary Securities Underlying Options (2)
------ ---------------------------------

Louis F. Coppage $ -0- (1) $ -0-
Chairman, CEO and President
(3/17/97 to 6/30/97)

Norman L. Fisher $91,411 (3) $400,000
President and Treasurer
(6/30/96 to 6/30/97)

Cory J. Coppage $64,212 (4) $100,000
Chief Operating Officer
and Secretary

(1) Mr. Louis F. Coppage accepted a nomination to serve as acting Chairman of
AMGC at the request of the Board on March 17, 1997 and has declined to draw
salary or other compensation pending the outcome of the Company's re-financing
efforts and further recommendation of the AMGC compensation committee.

(2) All stock options indicated above were established by the AMGC compensation
committee and were ratified by the shareholders at the Company's annual meeting
held on June 27, 1996. The options were issued for AMGC common shares at a fair
market value of $0.76 per share, with an exercise price of $1.00 per share. As
of June 30, 1997, none of the stock options have been exercised. (See the
Company's 1996 Form 10-K/A, "Part I. Item 4 Submission of Matters for a Vote of
Security Holders").

(3) Indicates salary and expenses paid by the Company's wholly owned subsidiary,
Eleventh Hour, Inc. Mr. Fisher is the President and full time employee of EHI.

(4) Indicates salary and expenses paid by the Company's wholly owned subsidiary,
Eleventh Hour, Inc. Mr. Cory J. Coppage is a full time employee of the Company
and EHI charges this expense back to AMGC.

Other Compensation

Other fiscal 1997 compensation for Norman L. Fisher, President of EHI,
included life insurance premiums of $2,793 for an Executive Key Man Life
Insurance Policy paid to First Colony Life Insurance Company. The named
beneficiaries of the policy are the senior debt holders of the Company who hold
promissory notes due in 2003 of $1,267,999 as described herein. (See "Material
Commitments for Capital Expenditures above").

<PAGE>

During fiscal 1997, the Company provided group medical insurance to AMGC
officers and employees under EHI's health plan. The plan was offered through
InterCare of Colorado, Inc., providing life, medical, and dental coverage at an
average cost of approximately $245 monthly per individual. All premiums were
paid by EHI and charged as an expense back to the Company. Louis Coppage, Norman
and Valerie Fisher, and Cory Coppage were covered under the same plan. In May of
1997, EHI changed carriers to Great West, Inc. which provides nearly identical
coverage at a price competitive with the Company's former health plan.

The Company made no contributions to any Defined Contribution Benefit Plans
on behalf of its employees in fiscal 1997, other than provision of insurance
coverage as described above.

Meetings of the Board of Directors

During fiscal 1997, the AMGC Board convened on two occasions at the
principle offices of the Company: on December 4, 1996, and on March 17, 1997. In
total, there were two meetings held by the AMGC Board during fiscal 1997. There
were no incumbent directors who attended less than 75% of the meetings of the
Board and Committees thereof on which such director served during that period.

Director Agreements and Compensation

On June 30, 1997, the AMGC Board of Directors accepted the resignations of
former directors, Valerie Fisher and Geoff Dawson. Subsequent to fiscal year
ended June 30, 1997, Mr. B. Mack DeVine, of Tampa, Florida, accepted an
appointment to the Board. Mr. DeVine will serve until the next annual meeting of
the shareholders, at which time, if elected, he will serve for a three year term
or until his earlier resignation or removal. Mr. DeVine and Mr. Lee have signed
director compensation agreements with the Company providing outside directors
with a non-qualified stock option of 25,000 shares having an exercise price of
$0.25 per share. The Company also provides $1,600 for meeting attendance at each
of the four quarterly scheduled meetings of the Board, plus expenses.
Compensation is payable at the Company's option in cash or in equivalent AMGC
restricted common shares set at the market price on the day of issue. Directors
who are U.S. residents are entitled to participate in the Company's health and
welfare benefit programs. Employee directors are not entitled to receive
compensation for Board service. During fiscal 1997, the Company paid meeting
attendance fees and expenses of $7,200 to Mr. Dawson and Mr. Lee received 24,000
restricted common shares valued at $4,800, or $0.20 per share, the fair market
value of the shares as determined by the Board on the date of issue.

Item 11. Security Ownership of Certain Beneficial Owners and Management
- -----------------------------------------------------------------------

Stock Ownership

The following table sets forth certain information regarding the beneficial
and economic ownership of AMGC common stock as of June 30, 1997 by: (1) each
stockholder known by the Company to be the beneficial owner of more than 5% of
the outstanding Common Stock; (2) each director and nominee for director; (3)
all directors and executive officers as a group. The beneficial ownership
reflected in the following table is calculated in accordance with Section 13(d)
of the Securities Exchange Act of 1934 (the "Exchange Act"). Shares issuable on
exercise of options exercisable within 60 days of June 30, 1997 are deemed to be
outstanding for the purpose of computing the percentage of ownership of persons
beneficially owning such options, but have not been deemed to be outstanding for
the purpose of computing the percentage ownership of any other person. As of
June 30, 1997, the total outstanding shares of the Company's common stock were
9,754,190.

<PAGE>

Name and Address Number of Shares Held Percent of Class
- ---------------- --------------------- ----------------

Louis F. Coppage, Chairman and CEO 5,950 .061 %
283 Kimbrough
Memphis, TN 38103
(3/17/97 to Present)

Norman L. Fisher, Director, AMGC 953,479 (a) (b) 9.78 %
President and CEO of Eleventh
Hour, Inc.
5002 Mineral Circle
Littleton, CO 80122
(President and Treasurer of AMGC
from 6/30/96 to 6/30/97)

Cory J. Coppage, Secretary and
Treasurer 150,000 (c) 1.53 %
7255 E. Quincy Ave, #550
Denver, CO 80237

Joe Lee, Director 25,000 (d) .256 %
4250 S. Olive Street, #216
Denver, CO 80237

B. Mack DeVine, Director 25,000 (d) .256 %
P.O. Box 620
Tampa, FL 33601

Mick Dragoo, Shareholder 1,110,050 11.38 %
8634 S. Willow
Tempe, AZ 85284

George & Philips Holdings, Ltd.,
Shareholder 1,275,000 13.07 %
P.O. Box 438
Roadtown, Tortola BWI

Officers and Directors as a Group
(five persons) 1,183,429 12.13 %

(a) Includes options to purchase 400,000 shares.

(b) Includes 535,229 shares held jointly by Mr. and Mrs. Norman L. Fisher, who
are officers of EHI.

(d) Includes options to purchase 25,000 shares.

All ownership is beneficial and of record except as specifically indicated
otherwise. Beneficial owners listed above have sole voting and investment power
with respect to the shares shown unless otherwise indicated. Economic interest
is calculated by including shares directly owned and, in the case of individuals
and all directors and executive officers as a group, shares such individuals or
group are entitled to receive upon exercise of outstanding options exercisable
within 60 days of June 30, 1997. The economic interest and security ownership
indicated above includes qualified and non-qualified stock options awarded by
the Company to certain key executives on or before April 3, 1996. Beneficial
ownership is calculated in accordance with Section 13(d) of the Exchange Act and
the rules promulgated thereunder.

<PAGE>

Item 12. Certain Relationships and Related Transactions
- -------------------------------------------------------

At June 30, 1997, the Company and its subsidiary, Eleventh Hour, Inc. had
outstanding notes payable of $285,000 due certain officers and directors of AMGC
and EHI. The notes are unsecured and provide for a one year term at 14%
interest. The Company and EHI are in default on the Notes. The AMGC notes are
convertible into restricted common stock of the Company at a price equal to 65%
of the average bid price of the stock during the thirty days prior to
conversion.

During fiscal 1997, 1,839,724 shares of common stock were issued to former
debt holders of the Company pursuant to debt conversion and common stock
subscription agreements executed on March 1, 1996. The shares were issued at a
value of $0.14 per share, the fair market value of the stock as determined by
the Board on January 27, 1997. During fiscal 1997, 24,000 shares of common stock
were issued to outside members of the board of directors for board meeting
attendance. The shares were issued at a value of $0.20 per share, the fair
market value of the stock as determined by the Board on the date of issuance,
December 13, 1996. Conversion and cash proceeds from related party stock
issuance were $4,800. (See "Notes to Consolidated Financial Statements".)

PART IV

Item 13. Exhibits, Financial Statement Schedules and Reports on Form 8-K
- ------------------------------------------------------------------------

(a)(1) and (a)(2) List of Financial Statements and Schedules
(a)(3) List of mExhibits (in accordance with Item 601 of Regulation S-B).

Exhibit Number Description of Exhibit

3.1 Articles of Incorporation of the Company*
3.2 Bylaws of the Company*
3.3 Material Contracts
3.4 1996 Annual Proxy Statement
3.5 Financial Data Schedule

* (Incorporated by reference to the Company's Form S-4 Registration Statement,
effective with the Commission on August 7, 1987, file number 33-13335).

<PAGE>

AMERICAN CONSOLIDATED
GROWTH CORPORATION
(and Wholly Owned Subsidiaries)

UNAUDITED

CONSOLIDATED FINANCIAL STATEMENTS

NOTICE: THE FOREGOING CONSOLIDATED FINANCIAL STATEMENTS ACCOMPANYING THIS
FORM-10KSB FOR THE FISCAL YEAR ENDED JUNE 30, 1997 ARE UNAUDITED. THESE
CONSOLIDATED FINANCIAL STATEMENTS HAVE BEEN PREPARED WITHOUT THE ASSISTANCE OR
APPROVAL OF THE COMPANY'S PRINCIPAL INDEPENDENT AUDITORS. AN AUDIT INCLUDES
EXAMINING, ON A TEST BASIS, EVIDENCE SUPPORTING THE AMOUNTS AND DISCLOSURES IN
THE CONSOLIDATED FINANCIAL STATEMENTS. AS OF THE DATE OF THE FILING OF THIS
REPORT, NO INDEPENDENT AUDIT EXAMINATION OF THE COMPANY HAS BEEN CONDUCTED FOR
THE FISCAL YEAR 1997. PLEASE SEE PAGE F-1 BELOW.

<PAGE>

AMERICAN CONSOLIDATED
GROWTH CORPORATION
(and Wholly Owned Subsidiaries)

Table of Contents
-----------------

Notice of Unaudited Reporting F-1

Unaudited Consolidated Financial Statements

Unaudited Consolidated Balance Sheet F-2

Unaudited Consolidated Statement of Operations F-3

Unaudited Statement of Changes in Stockholders' Equity (Deficit) F-4

Unaudited Statements of Cash Flows F-5

Notes to Unaudited Consolidated Financial Statements F-6

<PAGE>

AMERICAN CONSOLIDATED
GROWTH CORPORATION
(and Wholly Owned Subsidiaries)

NOTICE OF UNAUDITED REPORTING

The Company has prepared the foregoing information based on current records
and information available in order to help the Company's shareholders and the
investing public understand the financial operations and performance of the
Company for the fiscal year ended 1997. The Company has assembled the foregoing
information in accordance with generally accepted accounting principles, with
the objective of providing data which is free of material misstatements.
Although the Company believes that the financial data and assumptions underlying
the enclosed financial statements are reasonable, any of the data or assumptions
could be inaccurate and, therefore, there can be no assurance that the
consolidated financial statements included in this Form 10-KSB will prove to be
accurate. In light of the significant uncertainties inherent in the unaudited
consolidated financial statements included herein, the inclusion of such
information should not be regarded as a representation by the Company or any
other person that the information provided is accurate or reliable for analysis
or investment purposes. The Company's most recent audited consolidated financial
statements can be found on the Company's Form 10-KSB for the fiscal years ending
June 30, 1995, and June 30, 1996, respectively.

In addition, the notes to consolidated financial statements contain certain
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934, which are
intended to be covered by the safe harbors created thereby. These statements
include the plans and objectives of management for future operations and are
based on current expectations that involve numerous risks and uncertainties.
Assumptions related to the foregoing involve judgements with respect to, among
other things, future economic, competitive and market conditions and future
business decisions, all of which are difficult or impossible to predict
accurately and many of which are beyond the control of the Company. Although the
Company believes that the assumptions underlying the notes to consolidated
financial statements are reasonable, any of the assumptions could be innaccurate
and, therefore, there can be no assurance that the notes or forward-looking
statements included in this Form 10-KSB will prove to be accurate. In light of
these uncertainties, the inclusion of such information should not be regarded as
a representation by the Company or any other person that the objectives and
plans of the Company will be achieved.

F-1

<PAGE>

PART I. AMERICAN CONSOLIDATED GROWTH CORPORATION
(and Wholly Owned Subsidiaries)
ITEM 1.
CONSOLIDATED BALANCE SHEET

ASSETS

June 30, 1997
-------------
(unaudited)
Current assets
Cash and cash equivalents $ 2,140
Accounts receivable - trade,
Less allowance for doubtful accounts of $25,000 902,614
Prepaid expenses 21,670
------------
Total current assets 926,424

Furniture and equipment, net $ 120,432
Other assets 12,887

Total assets $ 1,059,743
------------

LIABILITIES and SHAREHOLDERS' DEFICIT

Current liabilities
Current maturities of long term debt (Note 6) $ 295,751
Common stock subject to put option (Note 8) 51,213
Note payable (Note 5) 595,278
Notes payable - related party (Note 10) 230,700
Checks written in excess of bank balance 156,207
Accounts payable 500,127
Accrued payroll & taxes 234,592
Accrued expenses - related party (Note 10) 45,028
Other current liabilities 180,109
------------
Total current liabilities 2,289,005

Long term debt $ 1,267,999
Stockholders' deficit
Series A, preferred stock, $.10 par value;
40,000,000 shares authorized.
No shares issued and outstanding
At June 30, 1997.
Common Stock, $.10 par value;
40,000,000 shares authorized.
9,754,190 shares issued and outstanding
At June 30, 1997 $ 975,419
Additional paid-in capital $ 29,366,946
Accumulated deficit (32,839,625)
-------------
( 2,497,260)

Total liabilities and shareholders' equity $ 1,059,743
-------------

See notes to unaudited consolidated financial statements

F-2

<PAGE>

AMERICAN CONSOLIDATED GROWTH CORPORATION
(and Wholly Owned Subsidiaries)

CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

Fiscal Year Ended
June 30,

1997 1996
---- ----

Revenues $ 10,207,667 $ 2,405,010

Direct expenses 7,786,456 1,794,063
------------ ------------

Gross margin 2,421,211 2,259,221

Other expenses
General and administrative expenses 2,346,576 2,506,546
Depreciation and amortization 72,463 71,205
Interest 439,332 467,481
------------ ------------
2,858,371 3,045,232

(Loss) income from continuing
operations (Note 9) $ (437,160) $ (786,011)

Income (loss) per common share
Continuing Operations $ (.04) $ (.10)

Weighted average shares
of common stock outstanding 7,914,466 7,404,140

F-3

American Consolidated Growth Corporation
Consolidated Statement of Changes in Stockholders' Equity (Deficit)
June 30, 1997
Total
Common Stock Additional Accumulated Stockholders'
Shares Amount Paid-In Capital Deficit Equity (Deficit)
------ ------ --------------- ------- ----------------

<S> <C> <C> <C> <C> <C>
Balance June 30, 1995 7,162,520 716,252 28,600,435 (31,700,691) (2,384,004)
Common stock issued for cash 5,000 500 4,500 -- 5,000
Common stock issued for services 495,750 49,575 62,800 -- 112,375
Common stock issued for conversion
of notes payable 109,167 10,917 98,898 -- 109,815
Retirement of common stock (565,173) (56,517) 75,718 -- 19,201
Accrued officers' salaries contributed
to capital -- -- 401,845 -- 401,845
Net Loss -- -- -- (701,774) (701,774)

- ------------------------------------------------------------------------------------------------------------------------------------
Balance June 30, 1996 7,575,966 757,597 29,576,028 (32,402,465) (2,068,840)
Common stock issued for cash -- -- -- --
Common stock issued for services 254,000 25,400 9,300 -- 34,700
Common stock issued for conversion of
notes payable 1,931,936 93,196 (215,107) -- (21,911)
Retirement of common stock (18,225) (1,826) (3,275) -- (5,101)
Common stock 10,516 1,052 -- -- 1,052
Net Loss -- -- -- (437,160) (437,160)

F-4
</TABLE>

<PAGE>

AMERICAN CONSOLIDATED GROWTH CORPORATION
(and Wholly Owned Subsidiaries)

CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Fiscal Year Ended
June 30,

1997 1996
---- ----
<S> <C> <C>
Cash flows from operating activities
Net loss $(437,160) $ (35,966)
Adjustments to reconcile net loss to net
cash used in operations to net cash provided
by (used in) operating activities:
Depreciation and amortization 72,463 21,014
Provision for losses on accounts receivable
Loss on disposal of equipment
Settlement payments on unrecorded debt
Gain on sale of investments
Interest on put option conversion
Common stock issued for services
Impairment of investment in affiliates
and other investments
Changes in operating assets and liabilities
Accounts receivable 157,775 106,120
Prepaid expenses 12,479 12,000
Other assets 7,836 12,890
Accounts payable and accrued liabilities (214,859) (147,936)
Accrued wages 222,609 --
--------- ---------
Net cash used in operating activities (178,857) $ (31,878)

Cash flows from investing activities
Acquisition of equipment 286 (23,179)
Proceeds from sale of investment 263,992
Net change in due from related parties (5,699)
---------
Net cash provided by investing activities $ 286 $ 235,114

Cash flows from financing activities
Net change in note payable 24,644 (76,125)
Payments on due to related parties
Proceeds from issuance of common stock -0- 16,500
---------
Net cash provided by (used in) financing
activities 24,644 $(207,394)

Net increase (decrease) in cash (153,927) (4,158)

Cash at June 30, 1996 156,067 0
---------

Cash at year end $ 2,140 0

F-5
</TABLE>

<PAGE>

AMERICAN CONSOLIDATED GROWTH CORPORATION, INC. AND SUBSIDIARY
-------------------------------------------------------------

Notes to Unaudited Consolidated Financial Statements

Note 1 - Organization and summary of Significant Accounting Policies

Use of Estimates
- ----------------

The preparation of these unaudited consolidated financial statements has been
undertaken in conformity with generally accepted accounting principles, which
require 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 financial statements and the reported amounts of
revenues and expenses during the reporting period. Specifically, estimates with
respect to future costs of contingent liabilities outlined in Notes 5, and 9.
Actual results could differ from those estimates.

Income Taxes
- ------------

The Company recognizes deferred tax liabilities and assets for the expected
future tax consequences of events that have been included in the financial
statements or tax returns. Deferred tax liabilities and assets are determined
based on the difference between the financial statement and tax basis of assets
and liabilities using enacted tax rates in effect. The measurement of deferred
tax assets is reduced, if necessary, by the amount of any tax benefits that,
based on available evidence, are not expected to be realized.

Net Income (Loss) Per Common Share
- ----------------------------------

Net income (loss) per common share has been computed based on the weighted
average number of common shares outstanding during each year. Common stock
equivalents have been excluded from the weighted average number of common shares
outstanding as their effect would be anti-dilutive.

Accounting standards Not Yet Adopted
- ------------------------------------

In March 1995, the Financial Accounting Standards Board issued Statement No.
121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be disposed of," which requires impairment losses to be recorded on
long-lived assets used in operations when indicators of impairment are present
and the undiscounted cash flows estimated to be generated by those assets are
less than the assets' carrying amount. Statement 121 also addreses the
accounting for long-lived assets that are expected to be disposed of. The
Company adopted Statement 121 in 1996 the adoption of which had no effect on the
Company's financial statements.

In October 1995, the FASB issued Statement 123, "Accounting for Stock-Based
Compensation" (FAS 123"). FAS 123 establishes financial accounting and reporting
standards for stock-based employee compensation plans. FAS 123 is effective for
transactions entered into in fiscal years beginning after December 15, 1995. The
Company currently acounts for stock-based compensation awards under the
provisions of Accounting Principles Board Opinion No. 25, as permitted by FAS
123, and intends to continue to do so.

F-6

<PAGE>

AMERICAN CONSOLIDATED GROWTH CORPORATION, INC. AND SUBSIDIARY
-------------------------------------------------------------

Notes to Unaudited Consolidated Financial Statements

Note 2 - Mangement's Plan

The accompanying consolidated financial statements have been prepared on a going
concern basis which contemplates the realization of assets and liquidation of
liabilities in the ordinary course of business. The Company has suffered
recurring losses from discontinued operations and as of June 30, 1997, the
Company had a working capital dificiency of $1,362,581 and a stockholders'
deficit of $2,497,260. The Company's ability to meet its current obligations is
dependent upon obtaining adequate sources of financing or maintenance of
sufficient porfitablility from solvent operations. The Company is currently
negotiating outside financing, however, there is no assurance the financing
alone will be sufficient. Assuming the subsidiary continues to experience
positive cash flow and current negotiations to secure new sources of outside
financing are finalized during the current fiscal year, management believes the
Company will be able to successfully meet all of its current obligations. There
can be no assurances that the Company will be successful in these endeavors. The
accompanying consolidated financial statements do not include any adjustments
relating to the recoverability and classification of recorded asset amounts or
amounts and classifcation of liabilities that might be necessary should the
Company be unable to continue in existance.

Note 3 - Furniture and Equipment

Furniture and equipment at June 30, 1997 consists of the following:

Office equipment and autos $107,769
Office furniture and fixtures 778,554
-------
886,323
Less accumulated depreciation (765,891)
--------

Furniture and equipment - net $120,432
--------

Note 4 - Note Payable

The Company has a short-term financing agreement which is collateralized by the
Company's accounts receivable. The note carries an interest rate of 14.25%
annually and matures October, 1997, with an automatic one year renewal at the
option of the Company. The outstanding balance at June 30, 1997 was $595,278.

Note 5- Long Term Debt

Long-term debt consists of the following at June 30, 1997:

Notes payable to former noteholders of EHI (Note 7) with interest
at 14%, payable quarterly through February 2003, when all
principal and unpaid interest is due. The noteholders were
granted a security interest in a life insurance policy on an
officer of the Company. $1,267,999

F-7

<PAGE>

Notes payable to private investors with interest at 10%. The
notes currently are in default. Certain note holders have the
option of converting note obligations into restricted shares at a
conversion price of $2 per share of common stock. Notes are
without collateral. 63,136

Note payable to an unrelated company with interest at 20% through
May, 1997 when all principal and unpaid interest is due. Note is
in default with collateral of assets of the Company not assigned
to Concord Growth Corp., EHI's accounts receivable financing
lender. 43,714

Note payable to private investor with interest at 14%, note
balance due in full in October, 1997. The note is guaranteed by
the subsidiary of the Company and is convertible into common
stock of AMGC at 65% of the fair market value immediately prior
to conversion. 45,000

Note payable to private investors with interest at 10%, note
balance due in full in August 1995. The note is currently in
default. Note is guaranteed by the subsidiary of the Company. 35,000

Note payable to private investor with interest at 12%, note
balance due in full in August 1998. Note is guaranteed by the
subsidiary of the Company. 80,000

$1,559,849

Note 6 - Commitments

Operating Leases
- ----------------

The Company leases office space in Overland Kansas. The lease expires in August
1998. The Company is responsible for taxes, insurance, utilities and operating
expenses. The lease contains an excalation clause that allows the rental
payments to be increased by $2,025 annually. The lease agreement allows the
lessee the option to renew the lease for an additional 5 years at the then
current market rate.

The Company leases office space in Tustin, California expiring February 1999.
The Company is responsible for taxes, insurance, utilities and operating
expenses. The lease contains a renewal option for up to two additional three
year periods.

The Company leases its corporate facility and has a renewal option for an
additional five years at the then current market rate.

The following is a schedule of minimum rental payments required under the above
referenced operating leases as of June 30, 1997:

F-8

<PAGE>

Years-Ending
June 30 Amount Estimated Surcharge
------- ------ -------------------

1998 208,972 38,580
1999 111,364 38,580
2000 84,305 40,000
-------- --------
$634,859 $117,160

Common Stock Subject to Put Option
- ----------------------------------

On January 18, 1997, the Company issued 1,839,724 restricted common shares to
certain former EHI debt holders at a value of $0.14 per share, the fair market
value of the stock as determined by the Company on that date. The stock was
issued pursuant to debt conversion agreements providing that additional shares
were to be issued in the event the fair market value of the stock remained below
$1.00 per share at December 31, 1996. In the year ended fiscal 1996, Outstanding
common stock subject to put option of $1,230,594 was converted to seven year
notes expiring in 2003 and $368,702 was converted to restricted common stock.

Note 7 - Related Party Transactions
- -----------------------------------

On March 17, 1997, the Company terminated employment agreements for EHI officers
Norman and Valerie Fisher pending completion of a proposed management buyout
plan. As of the date of filing of this report, the plan has not been finalized.
The Company is currently providing on an interim basis a monthly salary of
$5,708 to each of the officers, which includes monthly automobile allowances of
$500.

During fiscal 1997, the Company entered into a note payable with an employee of
EHI in the amount of $35,000. The note provides for monthly interest payments at
14% through April 1997 when all principal and interest is due. The note is
currently in default and provides no collateral.

At June 30, 1997, the Company and its subsidiary, Eleventh Hour, Inc. had
outstanding notes payable totaling $285,000 due officers and directors of AMGC
and EHI. The Notes are in default and unsecured, and provide for a one year term
at 14% interest. The AMGC notes are convertible into restricted common stock of
the Company at a price equal to 65% of the average bid price of the stock during
the thirty days prior to conversion.

F-9

<PAGE>

During fiscal 1997, 24,000 shares of common stock were issued to outside members
of the board of directors for board meeting attendance. The shares were issued
at a value $4,800, or $0.20 per share, the fair market value of the stock as
determined by the Board on the date of issuance.

Note 8 - Income Taxes

Subsequent to fiscal year ended June 30, 1997, the Company resolved an
outstanding tax dispute with the IRS for the years 1990, 1991, 1992, 1993, and
1994. The IRS determined that due to a prior change in the control and business
of the Company, former net operating loss carry-forwards were disallowed of
approximately $14,000,000. In addition, the Company was assessed $60,000 in
corporate taxes with $20,000 in penalties and interest due, which have yet to be
paid to date.

Note 9 - Contingent Liabilities

Subsequent to fiscal year ending June 30, 1997, the Company reached a settlement
agreement with the North Dakota Securities Commission alleging breach of the
State's "Blue Sky" securities laws. The agreement confirms no violations
occurred and the Company agreed to repay $80,000 to a former EHI investor who is
currently a resident of North Dakota.

At June 30, 1997, the Company had outstanding debts of $36,581, and $14,632,
respectively, due two former investors of EHI. At June 30, 1997, the Company's
efforts to renegotiate payment terms or conversion of the debt have been
unsuccessful and the Company is unable to determine the outcome of this matter
or what material consequences may occur.

During fiscal 1997, the Company was a party to Display Group LLC vs. AMGC, a
civil action in Colorado concerning the ownership of 1,400,000 common shares of
Advanced Display Technologies, Inc., a former affiliate of the Company. Due to
the non-performance of this investment, the shares were written to a value of
zero in the Company's certified audit of fiscal 1995. As of the date of the
filing of this report, pending the outcome of a jury trial on the matter, the
Company is unable to predict the outcome of the case. In the event the Company
is unsuccessful in its efforts to retain the subject shares, in the opinion of
counsel, no adverse consequences are anticipated to occur, other than the loss
of the title to the stock. During fiscal 1997, the Company assigned its legal
rights and expenses in this case to a third party desiring to pursue related
claims against ADTI as result of former agreements concerning the licensing of
ADTI technologies in prior years. The Company incurred $6,655 in legal expenses
prior to the assignment agreement but carries no ongoing legal expense in the
case.

Note 10 - Stock Option Plans

As of June 30, 1997, the Company's existing stock option plans as ratified by
the shareholders in fiscal 1996 are: the 800,000 common share Equity Incentive
Plan for all full time employees, the 400,000 common share Non-Qualified
Employee Stock Option Plan for key management employees, and the 100,000 common
share Non-Employee Director Stock Option Plan for outside members of the board
of directors. (See the Company's Form 10-KS/A for the fiscal year ended June 30,
1996). On December 4, 1996, pursuant to the recommendation of the Company's
Stock Option Plan Committee, the Board of Directors rescinded 3 stock options
awarded in 1996 under the Equity Incentive Plan to employees of EHI.

The following is a summary of options
awarded and outstanding as of June 30, 1997:

Number of Options Exercise Price
----------------- --------------

Incentive Plan Options 100,000 $1.00 per share
Non-Qualified Plan Options 400,000 $1.00 per share
Director Options 50,000 $0.25 per share
-------- ---------------
Outstanding at June 30, 1997 550,000 $0.25 to $1.00
per share

F-10

<ARTICLE> 5

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-END> JUN-30-1997
<CASH> 2,140
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 926,424
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,059,743
<CURRENT-LIABILITIES> 2,289,005
<BONDS> 1,267,999
0
0
<COMMON> 9,754,190
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 1,059,743
<SALES> 10,207,667
<TOTAL-REVENUES> 10,207,667
<CGS> 2,421,211
<TOTAL-COSTS> 2,858,371
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 437,160
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
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<FN>
<F1>Unaudited figures pending completion of audit.
</FN>

</TABLE>