U.S. 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 quarter ended September 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number 33-24138-D
_____________________
CAPITAL GROWTH, INC.
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(Name of Small Business Issuer as specified in its charter)
Nevada 87-0463772
------------------------------- -----------------
(State of other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
150 Wright Bros. Drive, #570, Salt Lake City, UT 84116
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(Address of principal executive offices)
Registrant's telephone no., including area code: (801) 575-6600
No Change
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Former name, former address, and former fiscal year, if changed
since last report.
Securities registered pursuant to Section 12(b) of the Exchange Act: None
Securities registered pursuant to Section 12(g) of the Exchange Act: None
Check whether the Issuer (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Exchange Act during the preceding 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 ___.
Common Stock outstanding at September 30, 1996 - 44,500,000 shares of
$.001 par value Common Stock.
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NOTE: Page 1 of 9 sequentially numbered pages.
<PAGE>
PART I FINANCIAL INFORMATION
ITEM 1 Financial Statements
CAPITAL GROWTH, INC.
[A Development Stage Company]
CONDENSED BALANCE SHEETS
[Unaudited]
ASSETS
September 30, December 31,
1996 1995
----------- -----------
CURRENT ASSETS:
Cash in bank $ 856 $ 801
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ - $ 10,132
Payable to officer 11,032 -
Payable to related corporation 16,544 15,724
----------- -----------
Total Liabilities 27,576 25,856
----------- -----------
STOCKHOLDERS' EQUITY:
Preferred stock - -
Common stock 44,500 42,500
Capital in excess of par value 18,102 18,102
Deficit accumulated during the
development stage (89,322) (85,657)
----------- -----------
Total Stockholders' Equity (26,720) (25,055)
----------- -----------
Total Liabilities and Stockholders'
Equity $ 856 $ 801
=========== ===========
The accompanying notes are an integral part of
these financial statements.
NOTE: The balance sheet at December 31, 1995 has been taken from the
audited financial statements at that date.
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<PAGE>
CAPITAL GROWTH, INC.
[A Development Stage Company]
STATEMENTS OF OPERATIONS
[Unaudited]
For the Three For the Nine From Inception
Months Ended Months Ended on March 28,
September 30, September 30, 1988 Through
-------------------------------------- September 30,
1996 1995 1996 1995 1996
--------- --------- --------- --------- ---------
INTEREST INCOME $ - $ 8 $ - $ 51 $ 2,471
--------- --------- --------- --------- ---------
EXPENSES:
General and
administrative 568 635 2,499 3,359 27,116
Amortization - - - - 2,136
Professional fees 1,166 2,400 1,166 3,310 62,541
--------- --------- --------- --------- ---------
TOTAL EXPENSES 1,734 3,035 3,665 6,669 91,793
NET LOSS (1,734) (3,027) (3,665) (6,618) (89,322)
========= ========= ========= ========= =========
LOSS PER SHARE $ (.00) $ (.00) $ (.00) $ (.00) $ (.01)
========= ========= ========= ========= =========
The accompanying notes are an integral part of
these financial statements.
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<PAGE>
CAPITAL GROWTH, INC.
[A Development Stage Company]
STATEMENTS OF CASH FLOWS
[Unaudited]
For the Nine From Inception
Months Ended on March 28,
September 30, Through
-------------------- September 30,
1996 1995 1996
--------- --------- ----------
Cash Flows to Operating Activities:
Net income (loss) $(3,665) $(6,618) $(89,322)
--------- --------- ----------
Adjustments to reconcile net income to
net cash used by operating activities:
Amortization expense - - 2,136
Increase in organization costs - - (2,136)
Changes in assets and liabilities:
Accounts payable (10,132) (1,260) -
Income taxes payable - - -
--------- --------- ----------
(10,132) (1,260) -
--------- --------- ----------
Net Cash Flows to Operating
Activities (13,797) (5,358) (89,322)
--------- --------- ----------
Cash Flows to Investing Activities - - -
--------- --------- ----------
Cash Flows from (to) Financing Activities:
Proceeds (to) from related entities 11,852 (1,982) 27,576
Proceeds from common stock issuance 2,000 2500 89,500
Costs of issuing stock - - (26,898)
--------- --------- ----------
Net Cash Flows from (to) Financing
Activities 13,852 518 90,178
--------- --------- ----------
Net Increase (Decrease) in Cash 55 (4,840) 856
Cash at Beginning of Period 801 5,641 -
--------- --------- ----------
Cash at End of Period $ 856 $ 801 $ 856
========= ========= ==========
Supplemental Disclosure of Cash Flow Information:
The Company accrued $720 in interest expense to a related corporation
during the period ended September 30, 1996.
The accompanying notes are an integral part of these financial statements.
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<PAGE>
CAPITAL GROWTH, INC.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 1 - CONDENSED FINANCIAL STATEMENTS
The accompanying financial statements have been prepared by the
Company without audit. In the opinion of management, all adjustments
(which include only normal recurring adjustments) necessary to present
fairly the financial position, results of operations and cash flows at
September 30, 1996 and 1995, and for all periods presented have been
made.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. It is suggested
that these condensed financial statements be read in conjunction with
the financial statements and notes thereto included in the Company's
December 31, 1995 audited financial statements. The results of
operations for the period ended September 30, 1996 and 1995, are not
necessarily indicative of the operating results for the full year.
NOTE 2 - RELATED PARTY TRANSACTIONS
Commencing January 1, 1996, the Company agreed to pay $100 per month
to a shareholder, officer and director of the Company for accounting
and office expenses. For the three and nine months ended September
30, 1996 the Company incurred expenses under the agreement of $300 and
$900. At January 1, 1996, the Company owed $10,132 to an accounting
firm whose managing partner was an officer and director of the
company. On January 1, 1996, the officer terminated his employment
with the accounting firm and at the time of termination the firm
agreed to transfer the outstanding obligation to the officer. At
September 30, 1996, the Company owed $11,032 to the individual. For
the three and nine months ended September 30, 1995, the company
incurred no professional fees and $910 to the accounting firm
mentioned above and as of September 30, 1995, owed the firm $9,832.
Starting in July 1994, the Company agreed to pay interest expense at
6% to its former parent company, Data Growth, Inc. The loans, on
which interest was charged, were advanced to the Company by its former
parent during the years 1990 through 1993. At September 30, 1995
$14,823 was owing to the former parent. At September 30, 1996,
$16,544 was owing to the former parent.
During March, 1993, the Company issued 35,000,000 units, consisting of
one restricted share of its common stock ($.001 par value) and an A
warrant and a B warrant, upon payment of $35,000 by certain persons
who would then have absolute voting control of the Company. During
August 1996, an additional 2,000,000 shares were issued to the
individual at par value ($2,000).
During March, 1993, an officer, director and principal shareholder of
the Company granted an option wherein the optionee has the right to
purchase 1,000,000 shares of the Company's common stock currently
owned by the officer within seven years of the grant of option or
within two years of the closing of an acquisition by the Company.
- 5 -
<PAGE>
CAPITAL GROWTH, INC.
[A Development Stage Company]
NOTE 3 - PUBLIC OFFERING OF COMMON STOCK
The initial issuance of the Company's common stock occurred in August,
1988. Such shares are a component of 5,000,000 units issued. Each
unit consists of one (1) share of the aforementioned common stock and
two (2) warrants to purchase shares of common stock. Initially, each
class "A" warrant entitled the holder thereof to purchase one share of
common stock at a price of $.20 per share during the period up to and
including March 31, 1990. Each class "B" warrant entitles the holder
thereof to purchase one share of common stock at a price of $.30 per
share during the period up to and including March 31, 1990. This
period has been extended by the Board of Directors for both "A" and
"B" warrants to December 31, 1996.
The Company has prepared a registration statement through which it
registered, for distribution to the shareholders of the parent
corporation, Data Growth, Inc., 4,600,640 of the aforementioned units
of common stock and warrants. The Company registered the units on
Form S-18 in accordance with the Securities Act of 1933. Such
registration became effective on December 15, 1988. Costs of the
public offering, amounting to $26,898 have been charged against
capital in excess of par value.
NOTE 4 - GOING CONCERN
The accompanying financial statements have been prepared in conformity
with generally accepted accounting principles which contemplate
continuation of the Company as a going concern. However, the Company
has incurred losses since inception and has expended all of its
working capital and has not yet been successful in establishing
profitable operations. These factors raise substantial doubt about
the ability of the Company to continue as a going concern. In this
regard, management is proposing to raise additional funds through
loans and/or through additional sales of its common stock or through a
proposed acquisition of another company by issuing common stock.
There is no assurance that the Company will be successful in raising
this additional capital. The financial statements do not include any
adjustments that might result from the outcome of these uncertainties.
- 6 -
<PAGE>
CAPITAL GROWTH, INC.
[A Development Stage Company]
PART I FINANCIAL INFORMATION
ITEM 2 Management's Discussion and Analysis of Financial Condition and
Results of Operations.
The Company was incorporated March 28, 1988 for the purpose of
investing in any and all types of assets, properties, and businesses.
The Company has completed a public stock distribution on behalf of its
sole shareholder, Data Growth, Inc. with 4,600,460 shares being
distributed to the shareholders of Data Growth, Inc. Distribution
expenses of $26,898 were offset against the amount paid by Data
Growth, Inc. for the stock. The distribution was registered on Form S-
18 with the Securities and Exchange Commission. The Company's only
business activity, to date, has been its formation, the registration
of its securities and the preliminary investigation of potential
investments and acquisitions. During March 1994, the Company issued
35,000,000 warrants, consisting of one share of common stock and an A
warrant and a B warrant, for $35,000 ($.001 per unit). The persons
who purchased the stock also acquired absolute voting control of the
Company. During August, 1996 an additional 2,000,000 shares of stock
were issued to the same individual for $2,000 ($.001 per share).
Liquidity and Capital Resources
At September 30, 1996 and 1995 the Company's assets consisted of cash
in the amounts of $856 and $801, respectively, from the issuance of
common stock, from advances from the Company's former parent
corporation and proceeds from private placements of consisting of one
share of common stock and an A warrant and a B warrant, for $35,000,
and 2,000,000 shares of common stock for $37,000. The Company has no
other resources. At present, the Company is engaged in the search for
potential investments or acquisitions of private companies.
Management believes that any acquisition will be made by issuing
shares of the Company's unissued common stock. The Company's
liquidity, capital resources and financial statements will be
significantly different subsequent to the consummation of any
acquisition.
Results of Operations
The Company's only operation to date has been the preliminary
investigation of potential acquisitions.
- 7 -
<PAGE>
CAPITAL GROWTH, INC.
[A Development Stage Company]
PART II OTHER INFORMATION
ITEM 1 Legal Proceedings
None
ITEM 2 Changes in Securities
None
ITEM 3 Defaults on Senior Securities
None
ITEM 4 Submission of Matters to a Vote of Security Holders
None
ITEM 5 Other Matters
None
ITEM 6 Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 27 - Financial Data Schedule
(b) Reports on Form 8-K
None
- 8 -
<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.
CAPITAL GROWTH, INC.
/s/ Gary B. Peterson Date: January 15, 1997
- ------------------------- -------------------------
Gary B. Peterson
President
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<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CAPITAL
GROWTH, INC. SEPTEMBER 30, 1996 FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL INFORMATION
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 856
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 856
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 856
<CURRENT-LIABILITIES> 27,576
<BONDS> 0
0
0
<COMMON> 44,500
<OTHER-SE> (71,220)
<TOTAL-LIABILITY-AND-EQUITY> 856
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 3,665
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (3,665)
<INCOME-TAX> 0
<INCOME-CONTINUING> (3,665)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,665)
<EPS-PRIMARY> (.00)
<EPS-DILUTED> (.00)
</TABLE>
