SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the six month period ended January 31, 1997
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, 1997, is 10,970,000 shares.
<PAGE>
U.S.A. GROWTH INC.
INDEX
Page No.
PART 1 - FINANCIAL INFORMATION:
Item 1 - Financial Information
Balance Sheet - January 31, 1997
(unaudited) 3
Statements of Operations -
Three Months Ended January 31, 1997
and 1996 and Cumulative 4
From Inception to January 31, 1997
(unaudited)
Six Months Ended January 31, 1997 5
and 1996 and Cumulative
From Inception to January 31, 1997
(unaudited)
Statements of Cash Flows -
Three Months Ended January 31, 1997
and 1996 and Cumulative
From Inception to January 31, 1997
(unaudited) 6
Six Months Ended January 31, 1997
and 1996 and Cumulative
From Inception to January 31, 1997
(unaudited) 7
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>
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>
U.SA. GROWTH INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
January 31, 1997
(Unaudited)
ASSETS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $395,579
Income taxes receivable 1,000
total current assets 396,579
LIABILITY AND STOCKHOLDERS' EQUITY
CURRENT LIABILITY, accounts payable $2,100
STOCKHOLDERS' EQUITY:
Common stock, par value $.001 per share,
authorized I 00,000,000 shares, issued
10,970,000 shares $10,970
Capital in excess of par value 712,973
Deficit accumulated during development stage (329,464)
Total stockholders' equity 394,479
$396,579
</TABLE>
<PAGE>
U.SA. GROWTH INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Cumulative
August 14, 1987
(Date of Inception)
to
Three Months Ended January 31,
January 31, 1997 1997 1996
INTEREST AND DIVIDEND $ 201,914 $4,918 $5,212
INCOME
EXPENSES:
Selling, general and
administrative expenses 246,201 $4,297 4,668
Expenses incurred as a result
of rescinded investment 270,734
516,935 4,297 4,668
INCOME (LOSS) BEFORE
TAXES (315,021) 621 544
INCOME TAXES:
Federal 3,739
State 10,704
14,443
NET INCOME (LOSS) (329,464) 621 544
NET INCOME (LOSS) PER SHARE
OF COMMON STOCK NIL NIL NIL
WEIGHTED AVERAGE NUMBER OF
SHARES OF COMMON STOCK
OUTSTANDING DURING THE
PERIOD 10,970,000 10,970,000
</TABLE>
<PAGE>
U.SA. GROWTH INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Cumulative
August 14, 1987
(Date of Inception)
to Six months Ended January 31,
January 31, 1997 1997 1996
INTEREST AND DIVIDEND INCOME $ 201,914 $9,833 9,702
EXPENSES:
Selling, general and
administrative expenses 246,201 $5,867 12,365
Expenses incurred as a result
of rescinded investment 270,734
516,935 5,867 12,365
INCOME (LOSS) BEFORE
TAXES (315,021) 3,966 (2,663)
INCOME TAXES:
Federal 3,739
State 10,704 500 613
14,443 500 613
NET INCOME (LOSS) (329,464) 3,466 (3,276)
NET INCOME (LOSS) PER SHARE
OF COMMON STOCK NIL NIL NIL
WEIGHTED AVERAGE NUMBER OF
SHARES OF COMMON STOCK
OUTSTANDING DURING THE 10,970,000 10,970,000
PERIOD
</TABLE>
<PAGE>
U.SA. GROWTH INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOW'S
Increase (Decrease) in Cash and Cash Equivalents
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Cumulative
` August 14, 1987
(Date of Inception)
To Three Months Ended January 31,
January 31, 1997 1997 1996
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net Income (loss) $(329,464) $621 $544
Adjustments to reconcile
net income (loss)
to net cash provided by
(used in) operating
activities:
Changes in assets and
liabilities:
(increase) decrease in
income taxes
receivable (779)
Increase (decrease) in
accounts payable 1,879
Total adjustments 1,100
NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES (328,364) 621 544
NET CASH PROVIDED BY FINANCING
ACTIVITIES, net proceeds from sales of
Common stock 723,943
NET INCREASE (DECREASE)
IN CASH
AND CASH EQUIVALENTS 395,579 621 544
CASH AND CASH EQUIVALENTS,
beginning of period 394,958 385,790
CASH AND CASH EQUIVALENTS,
end of period 395,579 395,579 386,334
SUPPLEMENTAL DISCLOSURE OF CASH
FLOW INFORMATION, cash paid for
income taxes $20,396
</TABLE>
<PAGE>
U.SA. GROWTH INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
Increase (Decrease) in Cash and Cash Equivalents
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Cumulative
August 14, 1987
(Date of Inception)
To
January 31, 1997 Six Months Ended January 31,
1997 1996
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net Income (loss) $(329,464) $3,466 $(3,276)
Adjustments to reconcile
net income (loss)
to net cash provided by
(used in) operating
activities:
Changes in assets and
liabilities:
(increase) decrease in
income taxes
receivable (779) 113
Increase (decrease) in
accounts payable 1,879
Total adjustments 1,100
NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES (328,364) 621 (3,163)
NET CASH PROVIDED BY
FINANCING ACTIVITIES, net
proceeds from sales of
common stock 723,943
NET INCREASE (DECREASE)
IN CASH
AND CASH EQUIVALENTS 395,579 3,466 (3,163)
CASH AND CASH EQUIVALENTS,
beginning of period 392,113 389,497
CASH AND CASH EQUIVALENTS,
end of period 395,5779 395,579 386,334
SUPPLEMENTAL DISCLOSURE OF CASH
FLOW INFORMATION, cash paid for,
income taxes $20,396 500
</TABLE>
<PAGE>
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
10-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 January
31, 1997, and the results of operations and cash flows for the- three and six
months ended January 31, 1497 and 1996 and from the date of inception to January
31, 1997. 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 Form 10-KSB for the year ended July
31, 1996.
The results of operations for the three and six months ended January 31, 1997
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 January 31, 1997, the Company has available an unused capital loss
carryforward of $250,000 which may be applied against future capital
gains expiring in 2004 and a net operating loss carryforward of $100,000
which expires in 2007, resulting in a deferred tax asset of
approximately $140,000, which was fully reserved at October 31, 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
franchisor 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 $621 which represents the net gain for
the three months ended January 31, 1997.
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 October 31, 1996, the entire balance of $18,760 was
insured. The Company also has $376,819 in an uninsured money market
mutual fund which invests in short term U.S. government securities.
NOTE 8 - SUBSEQUENT EVENTS
In February 1997, the Company executed a Letter of Intent with World
Wide Web Casinos, Inc., pursuant to which the Company would acquire
World Wide Web Casinos, Inc. in a reverse merger in exchange for shares
of common stock of the Company. World Wide Web Casinos, Inc. is a newly
formed entertainment company acquiring and developing rights to gaming
software for the world wide web segment of the Internet.
Item 2. MANAGE 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
<PAGE>
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 January 31, 1997 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 January
31, 1997 the Company's cash balance was $18,760 of which $18,760 is insured by
the FDIC. The remaining funds of $376,819 is invested in uninsured money market
mutual funds which invests in government securities. The Company had a net gain
of $621 for the three months ended January 31, 1997 as compared to a net gain of
$544 for the three months ended January 31, 1996.
Selling, general and administrative, expenses during the three months
ended January, 31, 1997 were 94,297, as compared to $4,668 for the three months
ended January 31, 1996, a decrease of $371. 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.
Liquidity and Capital Resources
The Company has had no material operations and, as of January 31, 1997,
the Company had working capital of $394,479. The Company had a current
ratio of 193 to 1 at January 31, 1997. Stockholders equity increased from
$391,013 for the fiscal year ended July 31, 1996 to $394,479 for the six
months ended January 31, 1997, which represents a net gain of $3466 for
the six 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
<PAGE>
financing and/or may do a public offering or private placement of its
securities.
<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: March 18, 1997
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>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This Schedule contains summary financial information extracted from
the financial statements contained in the Company's Form 10-Q and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 4-MOS
<FISCAL-YEAR-END> JUL-31-1996
<PERIOD-START> NOV-01-1996
<PERIOD-END> JAN-31-1997
<CASH> 395,579
<SECURITIES> 0
<RECEIVABLES> 1,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 396,579
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 396,579
<CURRENT-LIABILITIES> 2,100
<BONDS> 0
0
0
<COMMON> 10,970,000
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 396,579
<SALES> 0
<TOTAL-REVENUES> 4,918
<CGS> 0
<TOTAL-COSTS> 4,297
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 621
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 621
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<PAGE>
</TABLE>
