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 March 31, 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
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(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 March 31, 1996 - 42,500,000 shares of $.001
par value Common Stock.
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
March 31, December 31,
1996 1995
----------- -----------
CURRENT ASSETS:
Cash in bank $ 88 $ 801
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ - $ 10,132
Payable to officer 10,432 -
Payable to related corporation 15,960 15,724
----------- -----------
Total Liabilities 26,392 25,856
----------- -----------
STOCKHOLDERS' EQUITY:
Preferred stock - -
Common stock 42,500 42,500
Capital in excess of par value 18,102 18,102
Deficit accumulated during the
development stage (86,906) (85,657)
----------- -----------
Total Stockholders' Equity (26,304) (25,055)
----------- -----------
Total Liabilities and
Stockholders' Equity $ 88 $ 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 From Inception
Months Ended on March 28,
March 31, 1988 Through
_____________________ March 31,
1996 1995 1996
---------- ----------- ----------
REVENUE:
Interest income $ - $ 26 $ 2,471
---------- ----------- ----------
EXPENSES:
Amortization of organization costs - - 2,136
Administrative Expenses and Interest 1,249 1,204 25,265
Professional fees - 377 61,376
---------- ----------- ----------
Total Expenses 1,249 1,581 88,777
---------- ----------- ----------
LOSS BEFORE INCOME TAXES (1,249) (1,555) (86,306)
INCOME TAXES CURRENT - - (600)
---------- ----------- ----------
NET LOSS (1,249) (1,555) (86,906)
---------- ----------- ----------
LOSS PER SHARE $ (.00) $ (.00) $ (.01)
========== =========== ==========
The accompanying notes are an integral part of
these financial statements.
- 3 -
<PAGE>
CAPITAL GROWTH, INC.
[A Development Stage Company]
STATEMENTS OF CASH FLOWS
[Unaudited]
For the Three From Inception
Months Ended on March 28,
March 31, 1988 Through
_____________________ March 31,
1996 1995 1996
---------- ---------- ----------
Cash Flows to Operating Activities:
Net income (loss) $ (1,249) $ (1,555) $ (86,906)
---------- ---------- ----------
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) 677 -
Income taxes payable - - -
---------- ---------- ----------
(10,132) 677 -
---------- ---------- ----------
Net Cash Flows to Operating
Activities (11,381) (878) (86,906)
---------- ---------- ----------
Cash Flows to Investing Activities - - -
---------- ---------- ----------
Cash Flows from (to) Financing
Activities:
Proceeds (to) from related entities 10,668 (936) 26,392
Proceeds from common stock issuance - - 87,500
Costs of issuing stock - - (26,898)
---------- ---------- ----------
Net Cash Flows from (to)
Financing Activities 10,668 (936) 86,994
---------- ---------- ----------
Net Increase (Decrease) in Cash (713) (1,814) 88
Cash at Beginning of Period 801 5,641 -
---------- ---------- ----------
Cash at End of Period $ 88 $ 3,827 $ 88
========== ========== ==========
Supplemental Disclosure of Cash Flow Information:
The Company accrued $236 in interest expense to a related corporation
during the period ended March 31, 1996.
The accompanying notes are an integral part of
these financial statements.
- 4 -
<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 March 31, 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 March 31, 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 months ended March 31, 1996 the Company incurred
expenses under the agreement of $300. 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 March 31,
1996, the Company owed $10,432 to the individual. For the three months
ended March 31, 1995, the company incurred professional fees of $377 to the
accounting firm mentioned above and as of March 31, 1995, owed the firm
$8,949.
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 March 31, 1995 $15,868 was owing to the former
parent. At March 31, 1996, $15,960 was owing to former parent.
During March, 1993, the Company issued 35,000,000 units, consisting of one
restricted share of its common stock ($.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 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.
Liquidity and Capital Resources
At March 31, 1996 and 1995 the Company's assets consisted of cash in the
amounts of $88 and $3,827, respectively, from the issuance of common stock,
from advances from the Company's former parent corporation and proceeds
from a private placement of 35,000,000 units, consisting of one share of
common stock and an A warrant and a B warrant, for $35,000. 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
- 10 -
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CAPITAL
GROWTH, INC. MARCH 31, 1996 FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL INFORMATION
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 88
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 88
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 88
<CURRENT-LIABILITIES> 26,392
<BONDS> 0
0
0
<COMMON> 42,500
<OTHER-SE> (68,804)
<TOTAL-LIABILITY-AND-EQUITY> 88
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 1,249
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (1,249)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,249)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,249)
<EPS-PRIMARY> (.00)
<EPS-DILUTED> (.00)
</TABLE>
