U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
(Mark One)
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended June 30, 1997
[ ] Transition report under Section 13 or 15(d) of the Exchange Act.
For the transition period from ______________ to ______________
Commission file no. 33-21443
CAPITAL GROWTH HOLDINGS, LTD.
(Exact name of registrant as specified in its charter)
Delaware 06-1489574
- ------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
660 Steamboat Road, Greenwich, CT 06830
- -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(203) 861-7750
- --------------------------------------------------------------------------------
Issuer's telephone number, including area code
- --------------------------------------------------------------------------------
(Former name, former address and formal fiscal year,
if changed since last report)
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 outstanding of each of the issuer's classes of
common equity as of August 14, 1997 was as follows: 3,398,496 shares of common
stock and 11,349,666 shares of class B common stock.
Transitional Small Business Disclosure Format (check one):
YES NO X
----- -----
<PAGE>
PART I
FINANCIAL INFORMATION
Item 1. Financial Statements.
The interim financial statements required by this Item are included in
this quarterly report on Form 10-QSB immediately following the signature page
hereto.
Management's Discussion and Analysis.
Overview
International Capital Growth, Ltd. ("ICG"), a Delaware corporation and
the only operating subsidiary of Capital Growth Holdings, Ltd. (the "Company"),
was formed in February 1996 to develop a diversified financial services company
to pursue business opportunities in investment banking in the United States and
the United Kingdom and merchant banking, money management and securities
brokerage in the United States. ICG commenced formal operations in October 1996
when it became registered as a broker-dealer with the Securities and Exchange
Commission (the "SEC") and obtained membership with the National Association of
Securities Dealers, Inc. (the "NASD"). On March 14, 1997, ICG consummated a
share exchange transaction with the Company and became the Company's
wholly-owned subsidiary. In June 1997, the Company reincorporated to the State
of Delaware and had its common stock listed on The Nasdaq Stock Market, Inc.'s
OTC Bulletin Board under the symbol "CGHL". Through December 31, 1996, ICG was a
development stage company.
During the first six months of fiscal year 1997, the Company has
generated revenues and earnings from ICG's investment banking activities.
However, the Company anticipates that its operating expenses will increase in
connection with the commencement of its securities brokerage activities which
are anticipated to commence in the fourth quarter of 1997. To remain profitable,
the Company must generate revenues in excess of operating expenses anticipated
to be incurred in connection with ICG's business, the commencement of its
securities brokerage activities and the expansion of its business.
From time to time the Company may publish forward-looking statements,
including statements regarding, among other things, (i) the Company's growth
strategy or potential, (ii) anticipated trends in the Company's businesses,
(iii) the Company's ability to compete with its competitors and (iv) the
Company's profitability and projected financial condition. These statements are
based upon management's beliefs at the time they are made as well as assumptions
made by management based upon information available to it. The current
assumptions regarding the Company's operations, performance, development and
results of its business include (i) the accuracy of estimates of anticipated
increases in the Company's expenses due to implementation of the Company's
business plan, (ii) successful completion of securities offerings anticipated to
be consummated through ICG, (iii) maintenance of market conditions affecting the
Company's services and (iv) appropriate regulatory approvals. Forward-looking
statements are inherently subject to various risks and uncertainties, including
those described above, as well as potential changes in economic or regulatory
conditions that are largely beyond the Company's control. Should one or more of
these risks materialize or changes occur, or should management's assumptions
prove to be incorrect, the Company's actual results may materially vary from
those anticipated or projected.
1
<PAGE>
As ICG, the Company's only operating subsidiary, did not commence
business activities until October 1996, the Company believes that a period to
period comparison of results of operations would not be meaningful.
Results of Operations for the Quarter ended June 30, 1997
Revenues
The Company generated $1,940,634 in revenues during the quarter ended
June 30, 1997, of which $1,650,268 resulted from fees in connection with an
$11.1 million private placement consummated by ICG as placement agent for a
publicly held company. In addition, the Company generated $150,000 in other
private placement income, $24,080 in consulting fees, unrealized gains on its
securities portfolio of $91,676 as well as interest income of $24,610.
Operating Expenses
Operating expenses for the quarter ended June 30, 1997 were $1,296,522,
consisting of selling expenses of $466,100 and general and administrative
expenses of $830,422, approximately 45% of which was management and employee
salaries.
Net Income
As a result of the foregoing, and after provision for taxes of
$200,000, the Company had net income of $444,112 for the quarter ended
June 30, 1997.
Results of Operations for the Six Months ended June 30, 1997
Revenues
The Company generated $3,365,806 in revenues during the six months
ended June 30, 1997, of which $1,650,268 resulted from fees in connection with
an $11.1 million private placement consummated by ICG as placement agent for a
publicly held company in the second quarter. In addition, the Company generated
$150,000 in other private placement fees, $343,934 in consulting fees,
unrealized gains on its securities portfolio of $1,168,514 as well as interest
income of $53,090.
Operating Expenses
Operating expenses for the six months ended June 30, 1997 were
$2,042,897, consisting of selling expenses of $466,100, general and
administrative expenses of $1,490,682, approximately 45% of which consisted of
management and employee salaries, and the recognition of the equity in the net
loss of the Company's unconsolidated affiliate Capital Growth Europe of $86,115.
2
<PAGE>
Net Income
As a result of the foregoing, and after provision for taxes of
$400,000, the Company had net income of $922,909 for the six months ended
June 30, 1997.
Liquidity and Capital Resources
Capital for the Company has been provided by the investments made by
the initial shareholder group and through private placements of ICG's and the
Company's securities. In March 1997, the Company raised net proceeds of
approximately $1.0 million in a private placement of 549,496 shares of its
common stock.
To date, the Company has used its capital for merchant banking
(securities investments), working capital and for general corporate purposes. In
addition, in March 1997, the Company loaned $200,000 to an entity controlled by
Messrs. Ronald Koenig and Stanley Hollander, two of the Company's directors,
officers and principal shareholders. The loan, which was approved by a majority
of disinterested directors, bears interest at the rate of 6% per annum and is
due on March 26, 1998.
In March 1997, the Company acquired marketable securities with a
value of $1.65 million at June 30, 1997 for a total cost of $450,000.
The Company anticipates committing a significant amount of capital
during the third and fourth quarters of 1997 to establish and develop its
securities brokerage business. The Company anticipates raising additional equity
capital of approximately $1.0 million in gross proceeds in the third quarter of
1997 for this purpose. There can be no assurance, however, that the Company's
efforts to raise additional capital will be successful. The Company has no
material capital commitments other than annual salaries to its executive
officers and employees of approximately $1,237,000 and a letter of credit in the
amount of $100,000 to secure future rent payments and leasehold improvements at
the Company's London office. The Company believes that its current cash
resources and anticipated cash flow from operations will be adequate to satisfy
its capital commitments during 1997.
On July 1, 1997, the Company paid a $.1125 per share dividend to
holders of its common stock which dividend totaled $382,332 in the aggregate.
The dividend represented payment for the six month period from January 1, 1997
through June 30, 1997 of a two year $.225 annual per share dividend. The balance
of the dividend will be paid on a quarterly basis at a rate of $.05625 per share
from September 30, 1997 through December 31, 1998.
Variability of Results
The Company anticipates that a substantial portion of its future
revenues will originate from ICG's activities as placement agent in private
financings. When acting as placement agent, ICG is typically compensated upon
the successful closing of a financing. Agency financings typically take from 90
to 120 days to consummate after ICG is retained as placement agent. Activities
will be undertaken and expenses incurred in one fiscal period although a fee may
not be earned until a subsequent period. As a result, the financial results of
the Company may vary dramatically from quarter to quarter. Further, the
Company's operating results will also vary as a result of the marking to market
of its portfolio of securities.
3
<PAGE>
PART II
OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders.
On June 25, 1997, the Company held a special meeting of its
shareholders (the "Special Meeting") to vote on the reincorporation of the
Company from the State of Colorado to the state of Delaware and corresponding
approval of the Certificate of Incorporation and By-laws of the Delaware
corporation into which the Company was merged (the "Reincorproation"). The
Reincorporation was approved at the Special Meeting by 11,390,546 votes (57.44%
of voting stock) cast in favor of such actions and no votes cast against,
abstained or withheld from voting on such action.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
2 Agreement and Plan of Merger by and between Capital
Growth Holdings, Ltd., a Colorado corporation, and
Capital Growth Holdings, Ltd., a Delaware
corporation, dated as of June 10, 1997*
3(i) Certificate of Incorporation of Capital Growth
Holdings, Ltd., a Delaware corporation, as amended
to date*
3(ii) By-laws of Capital Growth Holdings, Ltd., a Delaware
corporation*
11 Computation of Per Share Earnings
20.1 Notice to Shareholders of Capital Growth Holdings,
Ltd., a Colorado corporation, dated June 11, 1997*
20.2 Press Release dated June 30, 1997*
27 Financial Data Schedule
(b) Reports on Form 8-K
On July 17, 1997, the Company filed a report on Form 8-K dated June 25,
1997 covering Item 5 (Other Events) in connection with the Company's
reincorporation from the State of Colorado to the State of Delaware.
- ----------------
* Incorporated by reference from the same respective numbers as included in the
Company's Form 8-K dated June 25, 1997 as filed with the Securities and Exchange
Commission on July 17, 1997.
4
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
CAPITAL GROWTH HOLDINGS, LTD.
Date: August 14, 1997 By: /s/ Ronald B. Koenig
-------------------- -----------------------
Ronald B. Koenig
President and Chief Executive Officer
(Principal Executive Officer)
Date: August 14, 1997 By: /s/ Michael S. Jacobs
-------------------- ------------------------
Michael S. Jacobs
Senior Vice President
(Chief Accounting Officer)
<PAGE>
CAPITAL GROWTH HOLDINGS, LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
A S S E T S
<TABLE>
<CAPTION>
June 30, 1997 December 31, 1996
------------- -----------------
(unaudited) (audited)
<S> <C> <C>
Current Assets:
Cash............................................. $2,717,527 $3,060,255
Investment in Marketable Securities.............. 1,702,201 0
Loan to Affiliate................................ 200,000 0
---------- ----------
Total Current Assets....................... 4,619,728 3,060,255
Investments in Illiquid Securities............................ 703,166 120,000
Fixed Assets, Net............................................. 209,284 464
Customer List................................................. 100,000 120,000
Other assets.................................................. 130,944 186,115
---------- ----------
TOTAL ASSETS............................................. $5,763,122 $3,486,834
========== ==========
</TABLE>
(continued)
F-1
<PAGE>
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
June 30, 1997 December 31, 1996
------------- -----------------
(unaudited) (audited)
<S> <C> <C>
Liabilities:
Accrued expenses and other liabilities................... $ 41,000 $ 51,000
Deferred tax liability................................... 400,000 0
Dividends payable........................................ 410,038 0
------------ -----------
Total Liabilities........................................ 851,038 51,000
Stockholders' equity:
Series A Preferred Stock - $.001 par value,
4,001,334 shares authorized; 4,001,334
and 4,365,000 shares issued and outstanding
at June 30,1997 and December 31, 1996,
respectively at liquidation value of $.14............ 560,187 611,100
Series B Preferred Stock - $.001 par value,
1,080,000 shares authorized; 1,080,000 and
1,200,000 shares issued and outstanding at
June 30, 1997 and December 31, 1996,
respectively, at liquidation value of $.21........... 226,800 252,000
Common Stock - $.001 par value, 25,000,000
shares authorized; 3,398,496 and 13,415,000
shares issued and outstanding at June 30,
1997 and December 31, 1996, respectively............. 3,398 13,415
Class B Common Stock - $.001 par value,
25,000,000 shares authorized; 11,349,666
and 0 shares issued and outstanding at June 30,
1997 and December 31, 1996, respectively............. 11,350 0
Additional Paid in Capital.................................... 4,399,694 3,333,535
Accumulated Deficit........................................... (205,745) (718,616)
Subscriptions Receivable ..................................... (53,600) (55,600)
Treasury Stock (15,000 Shares)................................ (30,000) 0
------------ -----------
Total stockholders' equity............................... 4,912,084 3,435,834
------------ -----------
T O T A L................................................ $ 5,763,122 $ 3,486,834
============ ============
</TABLE>
F-2
<PAGE>
Capital Growth Holdings, Ltd.
Condensed Consolidated
Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
For the Three Months Ended For the Six Months Ended
----------------------------- -------------------------------
June 30, 1997 June 30, 1996 June 30, 1997 June 30, 1996
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues:
Consulting fees $24,080 0 $343,934 0
Private placement fees 1,800,268 0 1,800,268 0
Unrealized gains on securities 91,676 0 1,168,514 0
Interest Income 24,610 136 53,090 136
---------- --------- ---------- ---------
Total revenue 1,940,634 136 3,365,806 136
========== ========= ========== =========
Operating expenses
Equity in net loss of
unconsolidated affiliate 0 0 86,115 0
Selling Expenses 466,100 10,256 466,100 10,256
General and administrative 830,422 0 1,490,682 0
---------- --------- ---------- ---------
Total operating expenses 1,296,522 10,256 2,042,897 10,256
---------- --------- ---------- ---------
Pre-tax income (loss) 644,112 (10,120) 1,322,909 (10,120)
Provision for taxes 200,000 0 400,000 0
Net income (loss) $444,112 (10,120) $922,909 (10,120)
========== ========= ========== =========
Primary:
Net income per common share $0.03 $0.00 $0.06 $0.00
========== ========= ========== =========
Weighted average number of
shares outstanding 14,884,709 3,243,333 14,464,601 3,243,333
========== ========= ========== =========
Fully diluted:
Net income per common share $0.02 $0.00 $0.05 $0.00
========== ========= ========== =========
Weighted average number of
shares outstanding 20,077,376 3,243,333 19,718,526 3,243,333
========== ========= ========== =========
</TABLE>
F-3
<PAGE>
CAPITAL GROWTH HOLDINGS, LTD
Consolidated Statement of Cash Flows
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended June 30,
1997 1996
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) 922,909 (10,120)
Adjustments to reconcile net income
(loss) to net cash provided by (used in)
operating activities:
Amortization and Depreciation Expense 31,394
Equity in loss of unconsolidated affiliate 86,115
Valuation of Warrant for consulting 35,417
Deferred Tax Expense 400,000
Changes in operating assets and liabilities:
Other Assets (30,943)
Accrued expenses & other liabilities (10,000)
Net cash provided by (used in)
operating activities 1,434,892 (10,120)
---------- -------
Cash flows from investing activities:
Investment in Marketable Securities (1,702,202)
Investment in Illiquid Securities (583,166)
Investment in Fixed Assets (220,200)
Loan to Affiliate (200,000)
----------
Net cash (used in)
investing activities (2,705,568) 0
---------- -------
Cash flows from financing activities:
Net proceeds from sales
of common stock 957,948 175,950
Purchase of Treasury Stock (30,000)
----------
Net cash provided by
financing activities 927,948 175,950
---------- -------
Net Increase or (Decrease) in Cash (342,728) 165,830
Cash at Beginning of Period 3,060,255 0
Cash at end of period 2,717,527 165,830
========== =======
</TABLE>
F-4
<PAGE>
CAPITAL GROWTH HOLDINGS, LTD.
NOTES TO FINANCIAL STATEMENTS
June 30, 1997
(Unaudited)
(1) Financial Statement Presentation
The unaudited financial statements of Capital Growth Holdings, Ltd.
(the "Company") herein have been prepared pursuant to the rules and
regulations of the Securities and Exchange Commission (SEC) and, in the
opinion of management, reflect all adjustments (consisting only of
normal recurring accruals) necessary to present fairly the results of
operations for the interim periods presented. Certain information and
footnote disclosures normally included in financial statements,
prepared in accordance with generally accepted accounting principles,
have been condensed or omitted pursuant to such rules and regulations.
However, management believes that the disclosures are adequate to make
the information presented not misleading. These financial statements
and the notes thereto should be read in conjunction with the financial
statements and the notes thereto included in the Company's Annual
Report on Form 10-KSB for the fiscal year ended January 31, 1997. On
March 25, 1997, the Company changed its fiscal year end to December 31,
commencing December 31, 1997. The results for the interim periods are
not necessarily indicative of the results for the full fiscal year.
(2) Valuation of Securities
Securities owned and securities sold not yet purchased, which are
listed on a national securities exchange, are valued at their last
reported sales price. Securities which trade over-the-counter are
valued at the "bid" price if held long by the Company and at the
"asked" price if sold short by the Company. Securities which do not
have a ready market are valued by the Company at cost.
In circumstances where the Company owns securities, and the Company
believes the disposition of such securities would adversely affect the
market price of the securities due to the volume traded, the Company
will discount the market value accordingly. Unrealized gains and losses
on all securities are reflected in the statement of operations.
In addition, the company earns fees in the form of securities. These
securities are valued at market on the date they are earned.
Thereafter, any increase or decrease in said value is reflected in
unrealized gains/losses on securities.
(3) Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements. Actual results could differ from
those estimates.
F-5
<PAGE>
(4) Acquisition of International Capital Growth, Ltd.
On March 14, 1997, the Company acquired 100% of the outstanding capital
stock of International Capital Growth, Ltd. ("ICG"), a Delaware
corporation and member of the National Association of Securities
Dealers, Inc (the "NASD"), in a reverse acquisition consummated through
a share exchange transaction (the "Share Exchange"). The Share Exchange
was not subject to the registration requirements of the Securities Act
of 1933, as amended (the "Securities Act").
The Share Exchange resulted in a change in control of the Company. The
former shareholders of the Company currently own approximately 2%, and
the former stockholders of ICG currently own approximately 98% of the
outstanding capital stock of the Company.
The 18,900,000 shares of capital stock of the Company that were issued
in the Share Exchange consisted of (a) 2,549,000 shares of common stock
("Common Stock"), (b) 11,349,666 shares of newly authorized class B
common stock ("Class B Common Stock"), (c) 4,001,334 shares of
newly-designated 5% Cumulative Convertible Series A Preferred Stock
("Series A Preferred Stock") and (d) 1,080,000 shares of
newly-designated 5% Cumulative Convertible Series B Preferred Stock
("Series B Preferred Stock"), all of which classes of capital stock
vote together as one class. The Class B Common Stock is junior in
priority with respect to dividends to the Common Stock and the
Designated Preferred Stock and automatically converts into Common Stock
on a one-for-one basis on December 31, 1998. The holders of the Series
A Preferred Stock and Series B Preferred Stock (collectively, the
"Designated Preferred Stock") are entitled to preferential cumulative
dividends until conversion thereof into Class B Common Stock, share
equally with the Class B Common Stock in any dividend declared thereon,
can be converted into Class B Common Stock by the holder on a
one-for-one basis at any time, and automatically convert into Class B
Common Stock on a one-for-one basis on October 12, 1997.
(5) Subscriptions Receivable
Subscriptions receivable represent amounts to be collected by the
Company from a Series A Preferred stockholder.
(6) Preferred Stock
The preferred stock is convertible into common stock at a one to one
ratio and carries the same voting rights. The Series A Preferred Stock
and Series B Preferred Stock carry a .14 and .21 per share liquidation
value, respectively. The outstanding Preferred Stock carries a
cumulative dividend of 5% of the liquidation preference per annum.
Unless earlier converted, each outstanding share of outstanding
Preferred Stock shall be automatically converted into one share of
common stock without any action by the holders thereof on October 12,
1997.
F-6
<PAGE>
(7) Warrants
In October 1996 the Company raised $3,250,000 through the sale of units
in a private placement. Each unit was sold for $25,000 and consisted of
12,500 shares of common stock and 12,500 redeemable warrants. As a
result, the Company has 1,625,000 redeemable warrants issued and
outstanding.
Each redeemable warrant entitles the registered holder to purchase one
share of common stock at an initial exercise price of $4.00 per share
(subject to adjustment for stock splits, combinations and
reclassifications) at any time prior to redemption from October 3, 1996
and October 15, 1996 until October 3, 1999 and October 15, 1999,
respectively.
In addition, the Company issued 24,985 redeemable warrants to
sub-placement agents in connection with the Company's March private
placement. Each warrant initially is exercisable at a price of $4.00
per share at any time prior to redemption from March 20, 1997 and March
27, 1997 until March 20, 2000 and March 27, 2000, respectively.
Additionally, the Company has 250,000 redeemable warrants outstanding,
each exercisable to purchase one share of Class B Common Stock at $2.00
per share (subject to adjustment) at any time, subject to an exercise
schedule, until November 1999. The issuance of warrants are subject to
vesting requirements and are exercisable at $2.00 per share and will
result in a charge to operations based on their fair value over the
number of months that such consulting services are provided.
(8) Stock Option Plan
The Company's 1997 Stock Option Plan has authorized the grant of
options to management personnel for up to 1,500,000 shares of the
Company's common stock. All options granted have 10 year terms and
carry certain vesting requirements.
A summary of the Company's stock option activity and related
information for the period December 31, 1996 through June 30, 1997 is
as follows:
<TABLE>
<CAPTION>
Weighted-Average
Options Exercise Price
------- ----------------
<S> <C> <C>
Outstanding - beginning of
period.................................... 660,000 $2.00
Granted..................................... 150,000 2.25
Exercised................................... 0 0
Forfeited................................... 25,000 2.00
Outstanding - end of period................. 785,000 2.05
Exercisable - end of period................. 785,000 2.05
Weighted-average fair value
of options granted during
the year.................................. 2.25
</TABLE>
F-7
<PAGE>
(9) Related Party Transactions
The Company is affiliated with Capital Growth International LLC ("CGI")
and CGI is utilizing space at the Company's offices without the
allocation of rent.
In March 1997, the Company loaned $200,000 to an entity controlled by
Messrs. Ronald B. Koenig and Stanley Hollander, two of the Company's
Directors. The transaction was approved by the independent members of
the Board of Directors.
(10) Net Capital Requirements for ICG
ICG is subject to the Securities and Exchange Commission Uniform Net
Capital Rule (Rule 15c3-1), which requires the maintenance of minimum
net capital and requires that the ratio of aggregate indebtedness to
net capital, both as defined, shall not exceed 15 to 1. (8 to 1 for
the first 12 months of operations). At June 30, 1997 the Company had
net capital of $2,041,848 which was $1,986,723 in excess of its
required net capital.
(11) Commitments
The Company has issued a letter of credit in the amount of $100,000 to
secure future rent payments and leasehold improvements at the Company's
London office.
(12) Principles of Consolidation
The consolidated financial statements include the accounts of the
Company and its wholly owned subsidiary, International Capital Growth,
Ltd. In consolidation, all significant intercompany transactions and
balances have been eliminated.
F-8
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
2 Agreement and Plan of Merger by and between Capital
Growth Holdings, Ltd., a Colorado corporation, and
Capital Growth Holdings, Ltd., a Delaware
corporation, dated as of June 10, 1997*
3(i) Certificate of Incorporation of Capital Growth
Holdings, Ltd., a Delaware corporation, as amended
to date*
3(ii) By-laws of Capital Growth Holdings, Ltd., a Delaware
corporation.*
11 Computation of Per Share Earnings
20.1 Notice to Shareholders of Capital Growth Holdings,
Ltd., a Colorado corporation, dated June 11, 1997*
20.2 Press Release dated June 30, 1997*
27 Financial Data Schedule
*Incorporated by reference from the same respective numbers as included in the
Company's Form 8-K dated June 25, 1997 as filed with the Securities and Exchange
Commission on July 17, 1997.
EXHIBIT 11
Capital Growth Holdings, Ltd.
Computation of Net Income Per Common Share
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Three Months Ended
June 30, 1997 June 30, 1996
------------- -------------
<S> <C> <C>
Primary:
Net Income $ 444,112 $ (10,120)
Less cumulative preferred dividend (9,131) 0
---------- ---------
NET INCOME USED FOR E.P.S.
COMPUTATION 434,981 (10,120)
========== =========
Weighted average number of
common shares outstanding 14,736,459 3,243,333
Shares issuable upon exercise of stock
options and warrants, net of shares
assumed to be repurchased (1) 148,250 0
---------- ---------
Shares used for computation 14,884,709 3,243,333
========== =========
Net income per common share $ .03 $ .00
========== =========
Fully Diluted:
NET INCOME USED FOR E.P.S.
COMPUTATION 444,112 (10,120)
---------- ---------
Weighted Average number of
common shares outstanding 14,736,459 3,243,333
Shares issuable upon exercise of stock
options and warrants, net shares
assumed to be repurchased (1) 259,583 0
Convertible Series A & B Preferred Shares 5,081,334 0
---------- ---------
Shares used for computation 20,077,376 3,243,333
========== =========
Net Income per Common Share $ .02 $ .00
========== =========
(continued)
</TABLE>
Notes and Assumptions:
(1) The company has outstanding warrants and options with exercise prices below
the current value of its common stock which is deemed to be $3.00. The
Company has utilized the treasury stock method for computing the weighted
average shares outstanding.
<PAGE>
Capital Growth Holdings, Ltd.
Computation of Net Income Per Common Share
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended Six Months Ended
June 30, 1997 June 30, 1996
------------- -------------
<S> <C> <C>
Primary:
Net Income $ 922,909 $ (10,120)
Less cumulative preferred dividend (18,261) 0
---------- ---------
NET INCOME USED FOR E.P.S.
COMPUTATION 904,648 (10,120)
========== =========
Weighted average number of
common shares outstanding 14,377,609 3,243,333
Shares issuable upon exercise of stock
options and warrants, net of shares
assumed to be repurchased (1) 86,992 0
---------- ---------
Shares used for computation 14,464,601 3,243,333
========== =========
Net income per common share $ .06 $ .00
========== =========
Fully Diluted:
NET INCOME USED FOR E.P.S.
COMPUTATION 922,909 (10,120)
---------- ---------
Weighted Average number of
common shares outstanding 14,377,609 3,243,333
Shares issuable upon exercise of stock
options and warrants, net shares
assumed to be repurchased (1) 259,583 0
Convertible Series A & B Preferred Shares 5,081,334 0
---------- ---------
Shares used for computation 19,718,526 3,243,333
========== =========
Net Income per Common Share $ .05 $ .00
========== =========
</TABLE>
Notes and Assumptions:
(1) The company has outstanding warrants and options with exercise prices below
the current value of its common stock which is deemed to be $3.00. The
Company has utilized the treasury stock method for computing the weighted
average shares outstanding.
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000832324
<NAME> CAPITAL GROWTH HOLDINGS, LTD.
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> APR-01-1997
<PERIOD-END> JUN-30-1997
<EXCHANGE-RATE> 1
<CASH> 2,717,527
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,405,367
<PP&E> 209,284
<DEPRECIATION> 0
<TOTAL-ASSETS> 5,763,122
<CURRENT-LIABILITIES> 851,038
<BONDS> 0
0
786,987
<COMMON> 14,748
<OTHER-SE> 4,110,349
<TOTAL-LIABILITY-AND-EQUITY> 5,763,122
<SALES> 0
<TOTAL-REVENUES> 3,365,806
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,042,897
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,322,909
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 922,909
<EPS-PRIMARY> .06
<EPS-DILUTED> .05
</TABLE>
