SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT #1
FORM 10-QSB
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended April 30, 1996
or
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File No.: 0-20277
U.S.A. GROWTH INC.
(Exact name of small business issuer in its charter)
DELAWARE 11-2872782
(State or jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
900 West 190th Street, New York, New York 10040
(Address of Principal executive offices)
Issuer's telephone number: (212) 568-7307
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such
filing requirements for the past 90 days. Yes [x] No [ ]
The number of shares of Common Stock, par value $.001 per share, outstanding as
of January 31, 1996, is 10,970,000 shares.
<PAGE>
U.S.A. GROWTH INC.
INDEX
Page No.
PART 1 - FINANCIAL INFORMATION:
Item 1 - Financial Information
Balance Sheet - April 30, 1996
(unaudited) 3
Statements of Operations -
Nine Months Ended April 30, 1996
and 1995 and Cumulative 4
From Inception to April 30, 1996
(unaudited)
Three Months Ended April 30, 1996 5
and 1995 and Cumulative
From Inception to April 30, 1996
(unaudited)
Statements of Cash Flows -
Nine Months Ended April 30, 1996 6
and 1995 and Cumulative
From Inception to April 30, 1996
(unaudited)
Three Months Ended April 30, 1996 7
and 1995 and Cumulative
From Inception to April 30, 1996
(unaudited)
Notes to Financial Statements 8
Item 2. Management's Discussion and Analysis
of Financial Condition and Results
of operations 10
PART II. OTHER INFORMATION 12
<PAGE>
U.S.A GROWTH INC.
(A Development Stage Company)
BALANCE SHEET
April 30, 1996
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 26,787
Money Market Mutual Funds 362,862
Income taxes receivable 666
--------
Total current assets $390,315
LIABILITY AND STOCKHOLDERS' EQUITY
CURRENT LIABILITY, accounts payable $ 2,000
STOCKHOLDERS' EQUITY:
Common stock, par value $.001 per share,
authorized 100,000 shares, issued
10,970,000 shares $ 10,970
capital in excess of par value 712,973
Deficit accumulated during development
stage (335,628)
---------
Total stockholders' equity 388,315
$390,315
<PAGE>
U.S.A. GROWTH INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
(Unaudited)
Cumulative
August 14, 1987
(Date of Inception)
to
April 30, 1996
INTEREST AND DIVIDEND INCOME $ 187,241
-----------
EXPENSES: Selling, general and
administrative $ 237,986
Expenses incurred as a result
of rescinded investment 270,734
-----------
508,720
INCOME (LOSS) BEFORE INCOME TAXES (321,179)
------------
INCOME TAXES:
Federal 3,739
State 10,410
14,149
NET LOSS ($335,628)
=============
NET LOSS PER SHARE OF COMMON STOCK
WEIGHTED AVERAGE NUMBER OF SHARES
OF COMMON STOCK OUTSTANDING DURING
THE PERIOD
<PAGE>
U.S.A. GROWTH INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
(Unaudited)
Nine Months Ended
April 30
1996 1995
INTEREST AND DIVIDEND INCOME $ 14,364 $ 7,695
----------- -----------
EXPENSES: Selling, general and
administrative 13,712 17,472
Expenses incurred as a result
of rescinded investment
13,712 17,472
----------- -----------
INCOME (LOSS) BEFORE INCOME TAXES 652 (9,507)
----------- ------------
INCOME TAXES:
Federal 613 1,834
State 613 1,834
----------- -----------
NET LOSS $ 39 ($11,341)
NET LOSS PER SHARE OF COMMON STOCK $ NIL $ NIL
=========== ========
WEIGHTED AVERAGE NUMBER OF SHARES
OF COMMON STOCK OUTSTANDING DURING
THE PERIOD $10,970,000 $10,970,000
=========== ===========
<PAGE>
U.S.A. GROWTH INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
(Unaudited)
Cumulative
August 14, 1987
(Date of Inception)
to
April 30, 1996
INTEREST AND DIVIDEND INCOME $ 187,241
-----------
EXPENSES: Selling, general and
administrative $ 237,989
Expenses incurred as a result
of rescinded investment 270,734
-----------
508,720
INCOME (LOSS) BEFORE INCOME TAXES (321,479)
------------
INCOME TAXES:
Federal 3,739
State 10,410
14,149
NET LOSS ($335,628)
============
NET LOSS PER SHARE OF COMMON STOCK
WEIGHTED AVERAGE NUMBER OF SHARES
OF COMMON STOCK OUTSTANDING DURING
THE PERIOD
<PAGE>
U.S.A. GROWTH INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
April 30
1996 1995
INTEREST AND DIVIDEND INCOME $ 4,662 $ 2,778
----------- -----------
EXPENSES: Selling, general and
administrative 1,347 4,521
Expenses incurred as a result
of rescinded investment
1,347 4,521
----------- -----------
INCOME (LOSS) BEFORE INCOME TAXES 3,315 (1,743)
---------- ------------
INCOME TAXES:
Federal
State
NET LOSS $ 3,315 ($1,743)
----------- ------------
NET LOSS PER SHARE OF
COMMON STOCK $ NIL $ NIL
=========== ========
WEIGHTED AVERAGE NUMBER OF SHARES
OF COMMON STOCK OUTSTANDING DURING
THE PERIOD 10,970,000 10,970,000
=========== ===========
<PAGE>
U.S.A. GROWTH INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
Increase (Decrease) in Cash and Cash Equivalents
(Unaudited)
Cumulative
August 14, 1987
(Date of Inception)
to
April 30, 1996
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss ($335,628)
Adjustments to reconcile net loss to
cash used in operating activities:
Changes in assets in liabilities:
(Increase) decrease in income
taxes receivable (666)
Increase (decrease) in accounts
payable 2,000
------------
Total adjustments 1,334
NET CASH USED IN OPERATING
ACTIVITIES: ($334,294)
NET CASH PROVIDED BY FINANCING
ACTIVITIES, Net proceeds from
sales of common stock $ 723,943
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 389,649
CASH AND CASH EQUIVALENTS,
beginning of period
CASH AND CASH EQUIVALENTS, end
of period $ 389,649
===========
SUPPLEMENTAL DISCLOSURE OF CASH
FLOWS INFORMATION, cash period
for income taxes $ 19,869
============
<PAGE>
U.S.A. GROWTH INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
Increase (Decrease) in Cash and Cash Equivalents
(Unaudited)
Nine Months Ended
April 30
-------------
1996 1995
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ 39 ($11,341)
----------- -------------
Adjustments to reconcile net loss to
cash used in operating activities:
Changes in assets in liabilities:
(Increase) decrease in income
taxes receivable 113 198
Increase (decrease) in accounts
payable (27,086)
----------- -------------
Total adjustments 113 (26,888)
----------- -------------
NET CASH USED IN OPERATING
ACTIVITIES: $ 152 ($38,229)
NET CASH PROVIDED BY FINANCING
ACTIVITIES, Net proceeds
from sales of common stock
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 152 (38,229)
CASH AND CASH EQUIVALENTS,
beginning of period 389,497 426,786
----------- ------------
CASH AND CASH EQUIVALENTS, end
of period $ 389,649 $ 388,557
=========== ===========
SUPPLEMENTAL DISCLOSURE OF CASH
FLOWS INFORMATION, cash period
for income taxes $ 500 $ 1,636
=========== ===========
<PAGE>
U.S.A. GROWTH INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
Increase (Decrease) in Cash and Cash Equivalents
(Unaudited)
Cumulative
August 14, 1987
(Date of Inception)
to
April 30, 1996
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss ($335,628)
------------
Adjustments to reconcile net loss to
cash used in operating activities:
Changes in assets in liabilities:
(Increase) decrease in income
taxes receivable (666)
Increase (decrease) in accounts
payable 2,000
-----------
Total adjustments 1,334
NET CASH USED IN OPERATING
ACTIVITIES: ($334,294)
NET CASH PROVIDED BY FINANCING
ACTIVITIES, Net proceeds from
sales of common stock $ 723,943
-----------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 389,649
CASH AND CASH EQUIVALENTS,
beginning of period
CASH AND CASH EQUIVALENTS, end
of period $ 389,649
===========
SUPPLEMENTAL DISCLOSURE OF CASH
FLOWS INFORMATION, cash period
for income taxes $ 19,869
===========
<PAGE>
U.S.A. GROWTH INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
Increase (Decrease) in Cash and Cash Equivalents
(Unaudited)
Three Months Ended
April 30
1996 1995
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ 3,315 ($1,743)
Adjustments to reconcile net loss to
cash used in operating activities:
Changes in assets in liabilities:
(Increase) decrease in income
taxes receivable
Increase (decrease) in accounts
payable
Total adjustments
NET CASH USED IN OPERATING
ACTIVITIES: $ 3,315 ($1,743)
NET CASH PROVIDED BY FINANCING
ACTIVITIES, Net proceeds
from sales of common stock
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 3,315 (1,743)
CASH AND CASH EQUIVALENTS,
beginning of period 386,334 390,300
CASH AND CASH EQUIVALENTS, end
of period $ 389,649 $ 388,557
=========== ===========
SUPPLEMENTAL DISCLOSURE OF CASH
FLOWS INFORMATION, cash period
for income taxes $ $
=========== =
<PAGE>
U.S.A GROWTH INC.
(A Development Stage Company)
BALANCE SHEET
April 30, 1996
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and Cash equivalents $ 26,787
Money Market Mutual Funds 362,862
Income taxes receivable 666
--------
Total current assets $390,315
LIABILITY AND STOCKHOLDERS' EQUITY
CURRENT LIABILITY, accounts payable $ 2,000
STOCKHOLDERS' EQUITY:
Common stock, par value $.001 per share,
authorized 100,000 shares, issued
10,970,000 shares $ 10,970
capital in excess of par value 712,973
Deficit accumulated during development
stage (335,628)
---------
Total stockholders' equity 388,315
$390,315
<PAGE>
U.S.A. GROWTH INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - FINANCIAL STATEMENTS:
The accompanying unaudited financial statements of U.S.A. Growth, Inc.
(the "Company"), have been prepared in accordance with the instructions
to Form 1O-QSB. In the opinion of the Company, the accompanying
unaudited financial statements contain all adjustments (consisting of
only normal recurring adjustments) necessary to present fairly the
financial position as of April 30, 1996, and the results of operations
and cash flows for the three and nine months ended April 30, 1996 and
1995 and from the date of inception to April 30, 1996. While the
Company believes that the disclosures presented are adequate to make
the information contained therein not misleading, it is suggested that
these financial statements be read in conjunction with the financial
statements and notes thereto included in the Company's Form 10-KSB for
the year ended July 31, 1995.
The results of operations for the three and nine months ended April 30,
1996 are not necessarily indicative of the results to be expected for
the full year.
NOTE 2 - CASH AND CASH EQUIVALENTS:
Cash and cash equivalents consist of Bank money market funds with a
yield of 3-5%.
NOTE 3 - INCOME TAXES:
At April 30, 1996, the Company has available an unused capital loss
carry forward of $250,000 which may be applied against future capital
gains expiring in 2004 and a net operating loss carry forward of
$89,000 which expires in 2007, resulting in a deferred tax asset of
approximately $115,000, which was fully reserved at April 30, 1996.
NOTE 4 - RESCINDED INVESTMENT
On August 19, 1988, the Company issued 3,500,000 restricted shares of
its common stock, for all of the outstanding common stock of Factory
Outlets of America, Inc. (FOA) (a development stage company), a
franchiser of general merchandise stores. An additional 21,000,000
restricted shares of the Company's common stock was placed in escrow
and was to be issued if FOA attained specified profit levels. In
accordance with the agreement, the Company contributed $250,000 to
FOA's additional paid -in-capital. Management of the Company has
indicated that FOA continued in the development stage through February
1990, at which time this agreement was rescinded and 3,080,000 shares
of restricted stock and all of the restricted escrow shares of stock
were returned to the Company. As a result of this transaction, the
Company incurred total expenses of $20,734 and the write-off of its
investment in FOA of $250,000.
<PAGE>
NOTE 5 - CHANGES IN STOCKHOLDERS' EQUITY:
Accumulated deficit decreased by $39 which represents the net gain for
the nine months ended April 30, 1996.
NOTE 6 - STOCKHOLDERS' EQUITY:
On February 16, 1988, the Company successfully completed its public
offering. The Company sold for $.10 per unit 8,000,000 units (each unit
consisting of one share of common stock and one Class A redeemable
common stock purchase warrant). One Class A warrant entitles the holder
to purchase one share of common stock and one Class B common stock
purchase warrant for $.17 per unit through August 16, 1997. the Company
has reserved the right to redeem the unexercised warrants on thirty
days written notice for $.001 per warrant. The Class B warrant entitles
the holder to purchase one share of common stock at $.25 per share,
exercisable through August 16, 1997.
NOTE 7 - CONCENTRATION OF CREDIT RISK:
The Company maintains its cash balance in a financial institution. The
balance is insured by the Federal Deposit Insurance Corporation up to
$100,000. At April 30, 1996, the entire balance of $26,787 was insured.
The Company also has $362,862 in an uninsured money market mutual fund
which invests in short term U.S. government securities.
<PAGE>
Item 2. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Plan of Operation
The Company engages in research, either by itself and/or through the
use of independent consultants) (who may have to agree to receive stock of the
Company in payment for their services in lieu of cash), to determine what type
of business can be established by a new venture which would have potentially
high profits. The Company's management has no present intention to retain any
independent consultants and management of the Company has established numerous
contacts which, on an ongoing basis, can lead to inquiries from potential
acquisition contacts. In the event consultants are retained in the future, it is
intended that their compensation, whether in restricted securities of the
Company or otherwise, will be based on the fair market value of the Company's
stock and the fair market value of such services calculated on an arms-length
basis.
After an industry is identified, the Company intends to formulate a
business plan, including the amount of capital required, the type of business,
etc. and then to either authorize, establish or purchase a subsidiary in that
field of business. At this time, the Company is unable to determine the
industries which may be deemed suitable in which to establish or acquire a
business. The Company has no arrangements with any person or entity regarding
any establishment or acquisition of any business.
Results of Operations
The Company is a development stage company and as of April 30, 1996 had
not generated any operating revenue.
The Company's only source of revenue since inception has been
certificate of deposit interest income, dividends from money market funds and
interest from money market mutual funds with an approximate yield of 5% per
annum. the Company maintains its cash balance in a financial institution. the
balance is insured by the Federal Deposit Insurance Corporation ('FDIC") up to
$100,000. At April 30, 1996 the Company's cash balance was $26,787 of which
$26,787 is insured by the FDIC. The remaining funds of $362,862 is invested in
uninsured money market mutual funds which invests in government securities. The
Company had a net gain of $3,315 for the three months ended April 30, 1996 as
compared to a net loss of $1,743 for the three months ended April 30, 1995.
Selling, general and administrative expenses during the three months
ended April 30, 1996 were $1,347, as compared to $4,521 for the three months
ended April 30, 1995, a decrease of $3,174. Selling, general and administrative
expenses, primarily consisted of professional (legal and accounting), transfer
agent and filing fees and expenses related to investigating business
opportunities.
Management believes that inflation and changing prices will have
minimal effect of operations.
<PAGE>
Liquidity and Capital Resources
The Company has had no material operations and, as of April 30, 1996,
the Company had working capital of $389,649. The Company had a current ratio of
193 to 1 at January 31, 1996. Stockholders equity increased from $388,276 for
the fiscal year ended July 31, 1995 to $388,315 for the nine months ended April
30, 1996, which represents a net gain of $39 for the nine months.
The Company has no present outside sources of liquidity. In the event
the Company determines that its present capital is not adequate for a future
acquisition, the Company may arrange for outside financing and/or may do a
public offering or private placement of its securities.
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings
NONE
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits. None.
(b)Reports on Form 8-K. None.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Dated: July 31, 1996
U.S.A. GROWTH INC.
By:/s/ Robert Scher
Treasurer and
Principal Financial
Officer*
* Mr. Scher is signing this Report in the dual capacity of
duly authorized officer and principal financial officer.
<PAGE>
EXHIBIT 27
USA GROWTH, INC.
FINANCIAL DATA SCHEDULE
FOR THE NINE MONTHS ENDED
APRIL 30, 1996
ITEM NO ITEM DESCRIPTION AMOUNT
_________________________________________________________________
5-02(1) Cash and cash items 26,787
5-02(2) Marketable securities 362,862
5-02(3)(a)(1) Notes and accounts receivable-trade 0
5-02(4) Allowances for doubtful accounts 0
5-02(6) Inventory 0
5-02(9) Total current assets 390,315
5-02(13) Property, plant and equipment 0
5-02(14) Accumulated depreciation 0
5-02(18) Total assets 390,315
5-02(21) Total current liabilities 2,000
5-02(22) Bonds, mortgages and similar debt 0
5-02(28) Preferred stock-no mandatory redemption 0
5-02(29) Preferred stock-no mandatory redemption 0
5-02(30) Common stock 723,943
5-02(31) Other stockholders equity (335,628)
5-02(32) Total liabilities and stockholders equity 390,315
5-03(b)1(a) Net sales of tangible products 0
5-03(b)1 Total revenues 14,364
5-03(b)2(a) Cost of tangible goods sold 0
5-03(b)2 Total costs and expenses applicable to
sales and revenues 0
5-03(b)3 Other costs and expenses 13,712
5-03(b)5 Provision for doubtful accounts and notes 0
5-03(b)(8) Interest and amortization of debt discount 0
5-03(b)(10) Income before taxes and other items 652
5-03(b)(11) Income tax expense 613
5-03(b)(14) Income/loss continuing operations 0
5-03(b)(15) Discontinued operations 0
5-03(b)(17) Extraordinary items 0
5-03(b)(18) Cumulative effect-changes in
accounting principles 0
5-03(b)(19) Net income or loss 39
5-03(b)(20) Earnings per share-primary 0
5-03(b)(20) Earnings per share-fully diluted 0
<PAGE>
July 31, 1996
Securities and Exchange Commission
Washington, DC
Re: USA Growth Inc.
Form 10-QSB
Amendment No. 1
Gentlemen:
On behalf of the above captioned corporation, we file herewith Form 10-QSB,
Amendment No.1, which reflects the inclusion of Exhibit 27, Financial Data
Schedule.
Very truly yours,
David W. Sass
