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 JUNE 30, 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) 377-1758
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 June 30, 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
June 30, December 31,
1998 1997
______________________
CURRENT ASSETS:
Cash in bank $ 2,373 $ 996
__________________
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable 15 850
Payable to related party 35,015 30,898
__________________
Total Liabilities 35,781 31,748
__________________
STOCKHOLDERS' EQUITY:
Preferred stock - -
Common stock48,000 48,000
Capital in excess of par value 18,102 18,102
Deficit accumulated during the development stage(98,759) (96,854)
__________________
Total Stockholders' Equity (32,657) (30,752)
__________________
Total Liabilities and Stockholders' Equity $ 2,373 $ 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 For the Six From Inception
Months Ended Months Ended on March 28,
June 30, June 30, 1988 Through
_____________________________________________June 30,
1998 1997 1998 1997 1998
__________________________________________________
REVENUE:
Interest income $ - $ - $ - $ - $2,471
__________________ __________________________
EXPENSES:
General and adminsitrative 571 582 1,133 1,831 32,816
Amortization - - - - 2,136
Professional fees 760 - 760 - 65,678
_____________________________________________
Total Expenses 1,331 582 1,905 1,831 100,630
_____________________________________________
LOSS BEFORE INCOME TAXES (1,331) (582)(1,905) (1,831) (98,159)
INCOME TAXES CURRENT - (100) - (100) (600)
_____________________________________________
NET LOSS $ (1,331) $(682) $(1,905)$(1,931)$(98,759)
_____________________________________________
LOSS PER SHARE $ (.00)$ (.00)$ (.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 Six From Inception
Months Ended on March 28,
June 30, 1988 Through
_____________________________ June 30,
1998 1997 1998
____________________________________
CASH FLOWS TO OPERATING ACTIVITIES:
Net income (loss) $(1,905) (4,550) $ (98,759)
____________________________________
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 (835) 2,763 15
Income taxes payable - 100 -
____________________________________
(835) 2,863 15
____________________________________
Net Cash Flows to Operating Activities (2,740)(1,687) (98,744)
____________________________________
CASH FLOWS TO INVESTING ACTIVITIES:
Related Party payable 4,117 1,656 35,015
____________________________________
CASH FLOWS FROM (TO) FINANCING ACTIVITIES:
Proceeds from common stock issuance - 3,500 93,000
Costs of issuing stock - - (26,899)
____________________________________
Net Cash Flows from (to) Financing
Activities - 3,500 66,102
____________________________________
NET INCREASE (DECREASE) IN CASH 1,377 3,469 2,373
CASH AT BEGINNING OF PERIOD 996 310 -
____________________________________
CASH AT END OF PERIOD $2,373 $ 3,779 $2,373
____________________________________
THE COMPANY HAS NOT PAID ANY AMOUNTS FOR INTEREST OR INCOME TAXES DURING THE
PERIODS ENDED JUNE
30, 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 June 30, 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 June
30, 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 and six month
periods ended June 30, 1998 and 1997, the Company incurred
expenses under the agreement of $300 and $600. 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 June 30,
1998 the Company owed to the individual $13,132.
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
February, 1997, the officer advanced $538 through payment of
certain overdue payables of the Company. The Company has
continued to accrue interest and at June 30, 1998, the Company
owed $18,884.
During May, 1998 a controlling shareholder of the Company
advanced $3,000 to provide the necessary funds for certain
administrative expenses. The loan is non-interest bearing and is
due on demand. The officer has agreed to accept unregistered
common stock issued at par value ($.001) as repayment for the
advance. The Company currently has only 50,000,000 shares
authorized and cannot issue another 3,000,000 shares until the
capital structure of the Company has been changed to allow for
the issuance. The Company is considering accomplishing the
change either through amending the articles of incorporation to
allow for over 50,000,000 shares or through a reverse split of
the outstanding common stock.
CAPITAL GROWTH, INC.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
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 June 30, 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.
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 filed 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 1993 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 June 30, 1998 and 1997 the Company's assets consisted of cash
in the amount of $2,373 and $3,779 respectively, from the
issuance of common stock, from advances from the Company's former
parent corporation and proceeds from private placements of
43,000,000 shares of common stock for $43,000 and advances in the
amount of $3,000 from the controlling shareholder. 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>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<CASH> 2,373
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,373
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,373
<CURRENT-LIABILITIES> 35,781
<BONDS> 0
0
0
<COMMON> 48,000
<OTHER-SE> (80,657)
<TOTAL-LIABILITY-AND-EQUITY> 2,373
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,331
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (1,331)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,331)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,331)
<EPS-BASIC> (.00)
<EPS-DILUTED> 0
</TABLE>
