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, 1998
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, Utah 84601
(Address of principal executive offices)
Registrant's telephone no., including area code: (801) 533-2727
10 West 100 South, Suite 450, Salt Lake City, Utah 84101
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, 1998 - 48,000,000 shares of $.001 par
value Common Stock.
NOTE: Page 1 of 9 sequentially numbered pages.
PART I FINANCIAL INFORMATION
ITEM 1 Financial Statements
CAPITAL GROWTH, INC.
[A Development Stage Company]
CONDENSED BALANCE SHEETS
[Unaudited]
ASSETS
March 31, December 31,
1998 1997
___________ ___________
CURRENT ASSETS:
Cash in bank $ 896 $ 996
__________________
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable 765 850
Payable to related party 31,457 30,898
__________________
Total Liabilities 32,222 31,748
__________________
STOCKHOLDERS' EQUITY:
Preferred stock - -
Common stock 48,000 48,000
Capital in excess of par value 18,102 18,102
Deficit accumulated during the development stage(97,428) (96,854)
__________________
Total Stockholders' Equity (31,326) (30,752)
__________________
Total Liabilities and Stockholders' Equity $ 896 $ 996
_________ _________
The accompanying notes are an integral part of
these financial statements.
NOTE: The balance sheet at December 31, 1997 has been taken from the
audited financial statements at that date.
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,
1998 1997 1998
__________ ___________ ___________
REVENUE:
Interest income $ - $ - $ 2,471
__________ ___________ ___________
EXPENSES:
Amortization of organization costs - - 2,136
Administrative Expenses and Interest 574 1,489 32,245
Professional fees - 2,006 64,918
__________ ___________ ___________
Total Expenses 574 3,495 99,299
__________ ___________ ___________
LOSS BEFORE INCOME TAXES (574) (3,495) (96,827)
INCOME TAXES CURRENT - - (600)
__________ ___________ ___________
NET LOSS (574) (3,495) (97,428)
__________ ___________ ___________
LOSS PER SHARE $ (.00) $ (.00) $ (.01)
__________ ___________ ___________
The accompanying notes are an integral part of
these financial statements.
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,
1998 1997 1998
_________________________________
CASH FLOWS TO OPERATING ACTIVITIES:
Net income (loss) $ (574) $(3,495) $(97,428)
_________________________________
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 (85) 2,307 10,697
Income taxes payable - - 200
_________________________________
(85) 2,307 10,897
_________________________________
Net Cash Flows to Operating Activities (659) (1,188) (86,531)
_________________________________
CASH FLOWS TO INVESTING ACTIVITIES
Related Party Payable 559 1,157 21,325
_________________________________
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 (100) 3,469 896
CASH AT BEGINNING OF PERIOD 996 310 -
_________________________________
CASH AT END OF PERIOD $ 896 $ 3,779 $896
_________________________________
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
The Company has not paid any amounts for interest or income taxes during the
periods ended March 31, 1998 and 1997.
The accompanying notes are an integral part of
these financial statements.
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, 1998 and 1997, 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, 1997 audited financial
statements. The results of operations for the period ended March
31, 1998 and 1997, 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, 1998 and 1997, 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, 1998, the Company owed
$12,832 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 $598
to pay certain administrative fees of the Company. At March 31,
1998, the Company owed 18,625 to the individual.
During March, 1993 the Company issued 35,000,000 restricted
shares of its common stock ($.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, 1996
and 1997, and the period ended March 31, 1998, 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.
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, 1998.
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.
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. During the years ended December 31,
1995,1996 and 1997 additional shares of stock were purchased by
the same persons at par value for $2,000, $2,500 and $3,500,
respectively.
Liquidity and Capital Resources
At March 31, 1998 and 1997 the Company's assets consisted of cash
in the amounts of $896 and $3,779, respectively, from the
issuance of 8,000,000shares of common stock, at par value, to the
controlling shareholder of the Company; from advances made by 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.
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
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/ David N. Nemelka June 1, 1999
________________________________ Date:___________________
David N. Nemelka
President
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/ David N. Nemelka Date: June 1, 1999
David N. Nemelka
President
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF CAPITAL GROWTH, INC. AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
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<PERIOD-END> MAR-31-1998
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