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, 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 South, 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 September 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
September 30, December 31,
1998 1997
___________ ___________
CURRENT ASSETS:
Cash in bank $ 3,372 $ 996
___________ ___________
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable 15 850
Payable to related party 36,575 30,898
___________ ___________
Total Liabilities 36,590 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(99,320) (96,854)
___________ ___________
Total Stockholders' Equity (33,218) (30,752)
___________ ___________
Total Liabilities and Stockholders' Equity $ 3,372 $ 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 Nine From Inception
Months Ended Months Ended on March 28,
September 30, September 30, 1988 Through
_____________________________________________September 30,
1998 1997 1998 1997 1998
__________________________________________________
REVENUE:
Interest income $ - $ - $ - $ - $2,471
__________________ __________________________
EXPENSES:
General and adminsitrative 560 564 1,715 2,611 33,386
Amortization - - - - 2,136
Professional fees - - 750 2,403
65,669
_____________________________________________
Total Expenses 560 564 2,465 5,014 101,191
_____________________________________________
LOSS BEFORE INCOME TAXES (560) (564)(2,465) (5,014) (98,720)
INCOME TAXES CURRENT - - (100) (100) (600)
_____________________________________________
NET LOSS $ (560) $(564) $(2,565)$(5,114)$(99,320)
_____________________________________________
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 Nine From Inception
Months Ended on March 28,
September 30, 1988 Through
_____________________________ September 30,
1998 1997 1998
____________________________________
CASH FLOWS TO OPERATING ACTIVITIES:
Net income (loss) $(2,465) $(5,114) $(99,320)
____________________________________
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 (751) - 10,031
Income taxes payable (85) 100 116
____________________________________
(836) 100 10,146
____________________________________
Net Cash Flows to Operating Activities (3,301)(5,014) (89,173)
____________________________________
CASH FLOWS TO INVESTING ACTIVITIES:
Proceeds (to) from related entity 5,677 2,215 26,443
____________________________________
CASH FLOWS FROM (TO) FINANCING ACTIVITIES:
Proceeds from common stock issuance - 3,500 93,000
Costs of issuing stock - - (26,897)
____________________________________
Net Cash Flows from (to) Financing
Activities - 3,500 66,102
____________________________________
NET INCREASE (DECREASE) IN CASH 2,376 701 3,372
CASH AT BEGINNING OF PERIOD 996 310 -
____________________________________
CASH AT END OF PERIOD $3,372 $ 1,011 $3,372
____________________________________
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 September 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
September 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 nine month
periods ended September 30, 1998 and 1997, the Company incurred
expenses under the agreement of $300 and $900. 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 September 30, 1998 the
Company owed to the individual $13,432.
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 September 30, 1998, the Company owed $19,143.
During May and August 1998 the controlling shareholder advanced
$4,000 to the Company to provide the necessary funds for certain
administative expenses. The loan is non-interest bearing and is
due on demand. The officer has agreed to accept unregistered
common stock issued at par value ($.001) as repayment for the
advance. The Company currently has only 50,000,000 shares
authorized and cannot issue another 4,000,000 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 commmon 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 September 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 September 30, 1998 and 1997 the Company's assets consisted of
cash in the amounts of $3,372 and $1,011 respectively, from the
issuance of common stock, from advances from the Company's former
parent corporation and controlling shareholder, and from proceeds
from private placements of 43,000,000 shares of common stock for
$43,000. 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 Date: June 1, 1999
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 June 1, 1999
________________________________ Date:___________________
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> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> SEP-30-1998
<CASH> 3,372
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3,372
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 3,372
<CURRENT-LIABILITIES> 36,590
<BONDS> 0
0
0
<COMMON> 48,000
<OTHER-SE> (81,218)
<TOTAL-LIABILITY-AND-EQUITY> 3,372
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 560
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (560)
<INCOME-TAX> 0
<INCOME-CONTINUING> (560)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (560)
<EPS-BASIC> (.00)
<EPS-DILUTED> 0
</TABLE>
