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, 1997
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.
-----------------------------
(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.)
10 West 100 South, Suite 450, Salt Lake City, Utah 84101
--------------------------------------------------------
(Address of principal executive offices)
Registrant's telephone no., including area code: (801) 533-2727
No Change
---------------------------------------------------------------
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, 1997 - 48,000,000 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,
1997 1996
------------ ------------
CURRENT ASSETS:
Cash in bank $ 3,779 $ 310
------------ ------------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 2,307 $ -
Payable to related party 29,281 28,124
------------ ------------
Total Liabilities 31,588 28,124
STOCKHOLDERS' EQUITY:
Preferred stock - -
Common stock 48,000 44,500
Capital in excess of par value 18,102 18,102
Deficit accumulated during the
development stage (93,911) (90,416)
------------ ------------
Total Stockholders' Equity (27,809) (27,814)
------------ ------------
Total Liabilities and Stockholders' Equity $ 3,779 $ 310
------------ ------------
The accompanying notes are an integral part of
these financial statements.
NOTE: The balance sheet at December 31, 1996 has been taken from the
audited financial statements at that date.
-2-
<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,
1997 1996 1997
__________ __________ ___________
REVENUE:
Interest income $ - $ - $ 2,472
__________ __________ ___________
EXPENSES:
Amortization of organization costs - - 2,136
Administrative Expenses and Interest 1,489 1,260 29,875
Professional fees 2,006 - 63,772
__________ __________ ___________
Total Expenses 3,495 1,260 95,782
__________ __________ ___________
LOSS BEFORE INCOME TAXES (3,495) (1,260) (93,311)
INCOME TAXES CURRENT - - (600)
__________ __________ ___________
NET LOSS (3,495) (1,260) (91,911)
__________ __________ ___________
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,
1997 1996 1997
_________________________________
Cash Flows to Operating Activities:
Net income (loss) $ (3,495) $ (1,249) $ (93,911)
_________________________________
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 2,307 (10,132) 12,339
Income taxes payable - 100 -
________________________________
2,307 - 12,439
________________________________
Net Cash Flows to Operating
Activities (1,188) (1,249) (81,472)
________________________________
Cash Flows to Investing Activities
Related Party Payable 1,157 10,668 19,149
________________________________
Cash Flows from (to) Financing Activities:
Proceeds from common stock issuance 3,500 - 93,000
Costs of issuing stock - - (26,898)
________________________________
Net Cash Flows from (to) Financing
Activities 3,500 - 66,102
________________________________
Net Increase (Decrease) in Cash 3,469 (713) 3,779
Cash at Beginning of Period 310 801 -
________________________________
Cash at End of Period $ 3,779 $ 88 $ 3,779
________________________________
Supplemental Disclosure of Cash Flow Information:
The Company paid $236 in interest expense during the period ended March
31, 1997.
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, 1997
and 1996, 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, 1996
audited financial statements. The results of operations for the period
ended March 31, 1997 and 1996, 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, 1997 and 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, 1997, the Company owed $11,632 to the individual.
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. On September 17, 1996, the amount owing to the
former parent was transferred to an officer, director and shareholder of
the Company. Also, on February 27, 1997, the officer advanced $598 to pay
certain administrative fees of the Company. At March 31, 1997, the Company
owed 17,649 to the individual.
During March, 1993 the Company issued 35,000,000 restricted shares of its
common stock ($.001 par value) upon payment of $35,000 by certain persons
who would then have absolute voting control of the Company. During the
years ended December 31, 1995 and 1996, and the period ended March 31,
1997, the same shareholders purchased an additional 8,000,000 shares of
common stock at par value for $8,000.
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, 1997.
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.
-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 shares of common stock for $35,000
($.001 per share). 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 shares of common stock 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
None
(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 March 16, 1998
________________________________ Date:___________________
Gary B. Peterson
President
-9-
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CAPITAL
GROWTH, INC. MARCH 31, 1997 FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 3,779
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3,779
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 3,779
<CURRENT-LIABILITIES> 31,588
<BONDS> 0
0
0
<COMMON> 48,000
<OTHER-SE> (75,809)
<TOTAL-LIABILITY-AND-EQUITY> 3,779
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 3,495
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (3,495)
<INCOME-TAX> 0
<INCOME-CONTINUING> (3,495)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,495)
<EPS-PRIMARY> (.00)
<EPS-DILUTED> (.00)
</TABLE>
