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, 1999
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.)
55 West 200 North, Provo, UT 84601
(Address of principal executive offices)
Registrant's telephone no., including area code: 801-377-1758
N/A
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 November 12, 1999 - 24,500,000 shares of $.001 par
value Common Stock.
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1 Financial Statements
The Financial Statements of the Registrant required to be filed with this
10-QSB Quarterly Report were prepared by management together with Related Notes.
In the opinion of management, the Financial Statements fairly present the fi-
nancial condition of the Registrant.
Capital Growth, Inc.
[Development Stage Company]
CONDENSED BALANCE SHEETS
[Unaudited]
<TABLE>
ASSETS
September 30, 1999 Dec. 31, 1998
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<S> <C> <C>
CURRENT ASSETS:
Cash in Bank $ 4,857 $ 819
Total Current Assets 4,857 819
TOTAL ASSETS: $ 4,857 $ 819
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
September 30, 1999 Dec. 31,1998
------------------ --------------
CURRENT LIABILITIES:
Accounts payable $ 792 $ 15
Note payable 2,000 2,000
Payable to related party 0 33,134
------- --------
Total Current Liabilities 2,792 35,149
STOCKHOLDERS' EQUITY (DEFICIT):
Common stock; authorized
50,000,000 shares at $0.001
par value; $0.001 par value; 24,500 2,500
2,500,000 shares issued and
outstanding
Additional paid-in Capital 87,602 65,602
Deficit accumulated during the
development stage (110,037) (102,432)
Total Stockholders' Equity 2,065 (34,330)
------------ ------------
TOTAL LIABILITIES & EQUITY $ 4,857 $ 819
The accompanying notes are an integral part of these financial statements.
NOTE: The balance sheet at December 31, 1998 was taken from the audited
financial statements at that date and condensed.
<PAGE>
Capital Growth, Inc.
[Development Stage Companies]
CONDENSED STATEMENTS OF OPERATIONS
[Unaudited]
</TABLE>
<TABLE>
For the Three From Inception
Months Ended On March 28, 1988
September 30, Through September 30,
1999 1998 1999
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<S> <C> <C> <C>
REVENUE $ 0 $ 0 $ 2,471
------ ------ ----------
Total Revenue $ 0 $ 0 $ 2,471
EXPENSES
General and Administrative $1,492 $ 560 $ 109,772
Amortization of Organ. Costs - - 2,136
------ ------ ----------
Total Expenses $1,492 $ 560 $ 111,908
INCOME FROM OPERATION ($1,492) ($ 560) ($ 111,908)
INCOME TAXES CURRENT 0 0 $ (600)
NET INCOME/LOSS ($1,492) ($ 560) $ (110,037)
NET LOSS PER SHARE (.00) (.00) (.00)
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
Capital Growth, Inc.
[Development Stage Companies]
CONDENSED STATEMENTS OF OPERATIONS
[Unaudited]
<TABLE>
For the Nine From Inception
Months Ended On March 28, 1988
September 30, Through September 30,
1999 1998 1999
-------- ------- ------------------
<S> <C> <C> <C>
REVENUE $ 0 $ 0 $ 2,471
-------- ------ ------------
Total Revenue $ 0 $ 0 $ 2,471
EXPENSES
General and Administrative $7,605 $2,465 $ 109,772
Amortization of Organ. Costs - - 2,136
-------- ------ -----------
Total Expenses $7,605 $2,465 $ 111,908
INCOME FROM OPERATION ($7,605) ($2,465) ($ 111,908)
INCOME TAXES CURRENT 0 0 $ (600)
NET INCOME/LOSS ($7,605) ($2,465) $ (110,037)
NET LOSS PER SHARES (.00) (.00) (.00)
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
Capital Growth, Inc.
[Development Stage Company]
STATEMENTS OF CASH FLOWS
[Unaudited]
<TABLE>
For the Nine From Inception
Months Ended On March 28, 1988
September 30, Through September 30,
1999 1998 1999
------ ------ -----------------
<S> <C> <C> <C>
Cash Flows to Operating Activities:
Net income (loss) $ (7,605) $(2,465) $(110,,037)
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 $(33,004) $ (836) 22,598
Net Cash Flows to
Operating Activities $(40,609) $(3,301) (132,635)
---------- --------- ---------
Cash Flows to Investing Activities:
Related Party Payable 647 5,677 25,390
Cash Flows from (to) Financing
Activities:
Proceeds from common stock
issuance 44,000 - 139,000
Costs of issuing stock - - (26,898)
Net cash Flows from(to)
Financing Activities - - 112,102
--------- --------- ---------
Net Increase (Decrease) in Cash 4,038 2,376 4,857
------- ------- --------
Cash at Beginning of Period $ 819 996 -
Cash at End of Period $ 4,857 $ 3,372 $ 4,857
</TABLE>
<PAGE>
Capital Growth, Inc.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED & CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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) neces-
sary to present fairly the financial position, results of operations and cash
flows at September 30, 1999 and 1998, 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 there-
to included in the Company's December 31, 1998, audited financial statements.
The results of operations for the period ended September 30, 1999 and 1998, are
not necessarily indicative of the operation results for the full year.
NOTE 2 - Going Concern
The accompanying financial statements of Capital Growth, Inc., have been
prepared on a going-concern basis, which contemplates profitable operations
and the satisfaction of liabilities in the normal course of business. There are
uncertainties that raise substantial doubt about the ability of the Company to
continue as a going concern. As shown in the statement of operations, the Com-
pany has had no revenues from operations and has a stockholders' equity of
$2,065 as of September 30, 1999.
The Company's continuation as a going concern is dependent upon its ability
to satisfactorily meet its debt obligations, secure adequate new financing and
generate sufficient cash flows from operations to meet it obligations. The
financial statements do not include any adjustments that might result from the
outcome of these uncertainties.
NOTE 3 - Income Taxes
The Company has net operating loss carryforwards of approximately $100,000,
which begin to expire in the year 2003. The amount of net operating loss
carryforward that can be used in any one year will be limited by significant
changes in the ownership of the company and by the applicable tax laws which are
in effect at the time such carryforwards can be utilized.
NOTE 4 - Common Stock
The Company issued 250,000 common shares in Agust 1998 for cash considera-
tion of $26,266. During March of 1994, the Company issued 1,750,000 shares of
common stock for $35,000 at a par value of $.001 per share. One hundred twenty-
five thousand common shares were issued in September 1995 for $2,500. In August
1996, the Company issued 100,000 common shares for $2,000 and 175,000 common
shares for $3,500 cash in February 1997. During December 1998, 100,000 common
shares were issued to private individuals for $2,000. The Company reverse split
its common stock on a 1 for 20 basis in May of 1999. (All share amounts have
been retroactively restated herein to reflect the split.) The Company then
issued 22,000,000 common shares for cash consideration of $44,000.
<PAGE>
NOTE 5 - 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 ex-
penses. For the nine months ended September 30, 1999 and 1998, the Company in-
cured expenses under the agreement of $300 and $900 respectively. 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 termin-
ated 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, 1999, the Company had settled all debts to the individual.
<PAGE>
Starting in July 1994, the Company agreed to pay interest expense 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. During Feb-
ruary 1997, the officer advanced $538 through payment of certain overdue pay-
ables of the Company. The Company has continued to accrue interest and at
September 30, 1999, the Company had settled all debts to the individual.
At December 31, 1998, the Company owed an officer $2,000 related to cash
advances made during the year ended December 31, 1998. The advances are non-
interest bearing and have no specific repayment terms.
During March, 1993 the Company issued 1,750,000 restricted shares of its
common stock ($.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 September 30, 1997, the same
shareholders purchased an additional 400,000 shares of common stock at par value
$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 50,000
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 acquisi-
tion by the Company.
NOTE 6 - Supplemental Cash Flow Information
The Company paid $19,855 for interest during the period ending September
30, 1999. No income taxes were paid during the periods ended September 30, 1999
and 1998, and since inception.
NOTE 8 - "Year 2000"
Because the Company is not presently engaged in any substantial business
operations, management does not believe that computer problems associated with
the change of year to the year 2000 will have any material effect on its opera-
tions. However, the possibility exists that the Company may merge with or ac-
quire a business that will be negatively affected by the "Year 2000" problem.
The effect of such problem or the Company in the future cannot be predicted with
any accuracy until such time as the Company identifies a merger or acquisition
target.
NOTE 7 - Subsequent Event
None.
<PAGE>
ITEM 2.
Management's Discussion and Analysis of Financial Condition
And Results of Operations
Plan of Operation
The Company's plan of operation for the next 12 months is to continue to
seek the acquisition of assets, properties or businesses that may benefit the
Company and its stockholders. Management anticipates that to achieve any such
acquisition, the Company will issue shares of its common stock as the sole
consideration for such acquisition. During the next 12 months, the Company's
only foreseeable cash requirements will relate to maintaining the Company in
good standing or the payment of expenses associated with reviewing or investi-
gating any potential business venture, which the Company expects to pay from
advances from management.
Liquidity and Capital Resources
At September 30, 1999 and 1998 the Company's assets consisted of cash in
the amounts of $4,857 and $896, respectively, from the issuance of 400,000
shares of common stock, at par value, to the controlling shareholder of the
Company; from advances made by the Company's former parent corporation; proceeds
from a private placement of 1,705,000 shares of common stock for $35,000 and
22,000,000 for cash consideration of $44,000. The Company has no other re-
sources. At present, the Company is engaged in the search for potential invest-
ments or acquisitions of private companies. Management believes that any acqui-
sition will be made by issuing shares of the Company's unissued common stock.
The Company's liquidity, capital resources and financial statements will be sig-
nificantly different subsequent to the consummation of any acquisition.
Results of Operations
Nine-month periods ended September 30, 1999 and September 30, 1998.
For the nine-month period ended September 30, 1999, the Company incurred
nominal general and administrative expenses totaling $7,605 for legal and ac-
counting fees compared to $2,465 for the respective period of 1998 which was
primarily rent and interest expenses. The Company's only operation to date has
been the preliminary investigation of potential acquisitions.
PART II - OTHER INFORMATION
ITEM I Legal Proceedings
None.
ITEM 2 Change in Securities
None.
ITEM 3 Defaults on Senior Securities
None.
ITEM 4 Submission on Matters to a Vote of Security Holders
None.
<PAGE>
ITEM 5 Other Information
None.
ITEM 6 Exhibits and Reports on Form 8-K
(A) Exhibits
None.
(B) Reports on Form 8-K;
None.
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, hereunto duly authorized.
Capital Growth, Inc.
Date: 11/12/99 By /s/ David N. Nemelka
-----------------------
David N. Nemelka
President and Chief Executive Officer
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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<S> <C>
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<FISCAL-YEAR-END> 12-31-99
<PERIOD-END> 09-30-99
<CASH> 4,857
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<RECEIVABLES> 0
<ALLOWANCES> 0
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<CURRENT-ASSETS> 4,857
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<CURRENT-LIABILITIES> 2,792
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0
0
<COMMON> 24,500
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<TOTAL-LIABILITY-AND-EQUITY> 4,857
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<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,492
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
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<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,492)
<EPS-BASIC> .00
<EPS-DILUTED> .00
