<PAGE> 1
FORM 10-QSB. -- QUARTERLY REPORT UNDER SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
(Last amended by 34-32231, eff 6/3/93.)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
--------------
or
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period _____________ to _________________
Commission File Number 0-24432
-------
THE AMERICAS GROWTH FUND, INC.
- --------------------------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
MARYLAND 65-0604786
- -------------------------------- --------------------------------------
(State or other jurisdiction of (I.R. S.Employer Indentification No.)
incorporation or organization)
701 Brickell Avenue, Suite 2000, Miami, Florida 33131
- --------------------------------------------------------------------------------
(Address of principal executive offices)
( 305 ) 374-3575
- --------------------------------------------------------------------------------
(Issuer's telephone number)
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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
----- -----
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required
to be filed by Section 12, 13 of 15(d) of the Exchange Act after the
distribution of securities under a plan confirmed by a court. Yes No
--- ---
APPLICABLE ONLY TO CORPORATE ISSUERS:
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date: 1,265,100
---------
Transitional Small Business Disclosure Format (Check one): Yes ; No X
----- -----
<PAGE> 2
INDEX
THE AMERICAS GROWTH FUND, INC.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets - March 31, 1996 and 1995
(Unaudited)
Statements of Operations for the three months ended March 31, 1996 and 1995.
(Unaudited)
Statements of Changes in Net Assets for the three months ended March 31, 1996
and 1995.
(Unaudited)
Statements of Cash Flows for the three months ended March 31, 1996 and 1995.
(Unaudited)
Notes to Financial Statements (Unaudited)
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations, Liquidity and Capital Resources.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
Signature
<PAGE> 3
THE AMERICAS GROWTH FUND, INC.
BALANCE SHEETS
MARCH 31, 1996 AND 1995
(UNAUDITED)
<TABLE>
<CAPTION>
1996 1995
----------- -----------
<S> <C> <C>
Assets:
Investments at market or fair value:
Investments in U.S. Treasury Bills $ 4,429,500 $ 4,363,000
Investments in common stock warrants - 5,300
Investments in notes receivable 150,700 50,000
----------- -----------
Total investments (amortized cost of $4,494,600 4,580,200 4,418,300
and $4,411,200 for 1996 and 1995, respectively)
Cash and cash equivalents 527,800 714,300
Note receivable - 20,300
Prepaid expenses 14,300 6,500
Deferred tax asset 17,000 -
Furniture and equipment, net 16,300 10,900
Organizational costs, net 5,300 6,800
Deposits 1,100 1,100
----------- -----------
5,162,000 5,178,200
----------- -----------
Liabilities:
Accounts payable 13,200 8,900
Accrued payroll taxes - 200
Accrued directors fees 4,900 4,300
Accrued profit sharing liability 2,700 -
Deferred tax liability 2,800 2,500
----------- -----------
23,600 15,900
----------- -----------
$ 5,138,400 $ 5,162,300
=========== ===========
Net assets:
Preferred stock, $.01 par value, 2,000,000
shares authorized, no shares issued $ - $ -
Common stock, $.01 par value, 10,000,000 shares
authorized, 1,265,100 shares issued and outstanding 12,700 12,700
Capital in excess of par 5,141,300 5,141,300
Undistributed operating income (loss) and investment
gains (losses):
Accumulated operating (losses) income (37,400) 3,200
Realized gains on investments 43,500 -
Unrealized (depreciation) appreciation
of investments (21,700) 5,100
----------- -----------
Net assets applicable to outstanding common shares
(equivalent to $4.06 and $4.08 per share for 1996
and 1995, respectively, based on outstanding
common shares of 1,265,100) $ 5,138,400 $ 5,162,300
=========== ===========
</TABLE>
Read the accompanying notes.
<PAGE> 4
THE AMERICAS GROWTH FUND, INC.
STATEMENTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1996 AND 1995
(UNAUDITED)
<TABLE>
<CAPTION>
1996 1995
------------ ------------
<S> <C> <C>
Interest income $ 65,100 $ 67,400
----------- -----------
Expenses:
Consulting fees to affiliate 9,000 9,000
Salaries 23,600 22,500
Professional fees 47,600 14,000
Board of Directors fees 3,800 2,500
Other 29,300 20,800
----------- -----------
113,300 68,800
----------- -----------
Investment loss before income tax benefit (48,200) (1,400)
Less income tax benefit 11,100 100
----------- -----------
Net investment loss (37,100) (1,300)
----------- -----------
Realized (loss) gain from sales of investments (1,500) 4,200
Less income tax benefit (expense) applicable to
realized (loss) gain from sales of investments 300 (600)
----------- -----------
(1,200) 3,600
----------- -----------
Unrealized (depreciation) appreciation
of investments (4,400) 7,100
Less income tax benefit (expense) applicable
to unrealized (depreciation) appreciation of
investments 1,100 (2,000)
----------- -----------
(3,300) 5,100
----------- -----------
Net (decrease) increase in net assets
resulting from operations $ (41,600) $ 7,400
=========== ===========
Per-share amounts:
Net investment loss $ (0.03) $ -
Net realized gains (losses) on investments - -
Net unrealized gains (losses) on investments - -
----------- -----------
$ (0.03) $ -
=========== ===========
Weighted average number of shares used
in per-share computations $ 1,265,100 1,265,100
=========== ===========
</TABLE>
Read the accompanying notes.
<PAGE> 5
THE AMERICAS GROWTH FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
THREE MONTHS ENDED MARCH 31, 1996 AND 1995
(UNADITED)
<TABLE>
<CAPTION>
1996 1995
------------ ------------
<S> <C> <C>
Net investment loss $ (37,100) $ (1,300)
Net realized (losses) gains from sales
of investments (1,200) 3,600
Net increase in unrealized (depreciation)
appreciation of investments (3,300) 5,100
----------- -----------
Net (decrease) increase in net assets
resulting from operations (41,600) 7,400
Net assets at beginning of period 5,180,000 5,154,900
----------- -----------
Net assets at end of period $ 5,138,400 $ 5,162,300
=========== ===========
</TABLE>
Read the accompanying notes.
<PAGE> 6
THE AMERICAS GROWTH FUND, INC.
STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 1996 AND 1995
(UNADITED)
<TABLE>
<CAPTION>
1996 1995
----------- -----------
<S> <C> <C>
Cash flows from operating activities:
Sources of cash:
Interest $ 8,300 $ 7,800
----------- -----------
Uses of cash:
Payroll 23,600 31,200
Consulting fees to affiliate 9,000 9,000
Operating expenses 95,900 39,000
Income taxes - 200
----------- -----------
128,500 79,400
----------- -----------
Cash used in operating activities (120,200) (71,600)
----------- -----------
Cash flows from investing activities:
Sources of cash:
Proceeds from sale of U.S. Treasury Bills 2,000,000 2,000,000
Proceeds from sale of common stock - 101,600
----------- -----------
2,000,000 2,101,600
----------- -----------
Uses of cash:
Purchase of furniture and equipment - 3,000
Purchase of U.S. Treasury Bills 1,953,800 2,372,300
Advances to notes receivable:
Related party - 20,300
Other - 50,000
----------- ------------
1,953,800 2,445,600
----------- ------------
Cash provided by (used in) investing
activities 46,200 (344,000)
----------- ------------
Decrease in cash and cash equivalents (74,000) (415,600)
Cash and cash equivalents at beginning of period 601,800 1,129,900
----------- -----------
Cash and cash equivalents at end of period $ 527,800 $ 714,300
=========== ===========
</TABLE>
Read the accompanying notes.
<PAGE> 7
THE AMERICAS GROWTH FUND, INC.
STATEMENTS OF CASH FLOWS (CONTINUED)
THREE MONTHS ENDED MARCH 31, 1996 AND 1995
(UNADITED)
<TABLE>
<CAPTION>
1996 1995
---------- ---------
<S> <C> <C>
Reconciliation of net (decrease) increase in
net assets resulting from operations to cash
used in operating activities:
Net (decrease) increase in net assets
resulting from operations $ (41,600) $ 7,400
---------- ---------
Adjustments to reconcile net (decrease) increase
in net assets resulting from operations to
cash used in operating activities:
Accretion of discount on U.S. Treasury Bills (56,800) (59,600)
Realized loss (gain) from sale of investments 1,500 (4,200)
Amortization and depreciation 800 600
Unrealized depreciation (appreciation) of investments 4,400 (7,100)
Provision for deferred income taxes (benefit) (13,000) 2,300
Changes in assets and liabilities:
Prepaid expenses 7,600 (5,700)
Accounts payable (1,800) 1,600
Accrued payroll taxes - (8,700)
Accrued directors fees 300 1,800
Income taxes payable (21,600) -
---------- ---------
Total adjustments (78,600) (79,000)
---------- ---------
$ (120,200) $ (71,600)
Cash used in operating activities ========== =========
</TABLE>
Read the accompanying notes.
<PAGE> 8
THE AMERICAS GROWTH FUND, INC.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1996 AND 1995
(UNAUDITED)
1. ORGANIZATION AND NATURE OF OPERATIONS:
The Americas Growth Fund, Inc. (the "Company") was incorporated
under the laws of the State of Maryland on June 3, 1994. The
Company is a non-diversified, closed-end management investment
company and has filed with the Securities and Exchange Commission
("SEC") a notification of election to be treated as a "business
development company" as that term is defined in the Investment
Company Act of 1940, as amended.
The Company's primary investment objective is to achieve long-term
capital appreciation of its assets, rather than current income, by
investing in equity and debt securities of and providing managerial
assistance to, emerging and established companies that management
believes offer significant potential opportunities for growth
(individually, "portfolio company", collectively, "portfolio
companies"). The Company has and plans to continue to invest
primarily in United States based portfolio companies
"strategically-linked" to the Caribbean and Latin America. The
Company considers companies to be strategically-linked to the
Caribbean and Latin America if they derive substantial revenue (at
least 50%) from operations or transactions in the Caribbean and
Latin America or, if in the Company's view, they are positioned to
do so. The Company considers "Caribbean and Latin American"
countries to be Argentina, Aruba, the Bahamas, Barbados, Belize,
Bolivia, Brazil, Chile, Colombia, Costa Rica, Cuba, Dominican
Republic, Ecuador, El Salvador, Guatemala, Haiti, Honduras,
Jamaica, Mexico, Netherlands Antilles, Nicaragua, Panama, Paraguay,
Peru, the Commonwealth of Puerto Rico, Trinidad and Tobago, Uruguay
and Venezuela.
The Company considers "emerging companies" to be those companies in
the early stages of development with little or no operating
history, and minimal revenue or profits, which the Company
anticipates will increase revenues and become profitable. The
Company considers "established companies" to be those with an
existing revenue and profit base. To a lesser extent, certain of
the emerging and established companies in which the Company invests
may be in "turnaround" or other restructuring situations.
2. SIGNIFICANT ACCOUNTING POLICIES:
SECURITIES VALUATION:
Investments in unrestricted securities that are traded in the
over-the-counter market are generally valued at the closing bid
price on the last day of the period. U.S. Treasury bills are
valued at market value. Restricted securities are valued at fair
value as determined by the Board of Directors. Because of the
inherent uncertainty of such valuations, the estimated values may
differ significantly from the values that would have been used had
a ready market for the securities existed, and the differences
could be material.
USE OF ESTIMATES.
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the amounts reported in
the financial statements and accompanying notes. Actual results
could differ from those estimates.
<PAGE> 9
THE AMERICAS GROWTH FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 1996 AND 1995
(UNAUDITED)
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
CASH AND CASH EQUIVALENTS:
The Company considers all highly liquid investments purchased with
original maturities of three months or less to be cash equivalents.
FURNITURE AND EQUIPMENT:
Furniture and equipment are stated at cost less accumulated
depreciation. Depreciation is computed using the straight-line
method over the estimated useful lives of the related assets.
ORGANIZATIONAL COSTS:
Organizational costs are stated net of accumulated amortization of
$2,200 and $700 at March 31, 1996 and 1995, respectively, and are
being amortized using the straight-line method over five years.
INCOME TAXES:
The Company is not entitled to the special treatment available to
regulated investment companies and is taxed as a regular
corporation for federal and state income tax purposes. The
aggregate cost of securities at March 31, 1996 and 1995 for federal
income tax purposes and financial reporting purposes was the same.
The aggregate gross and net unrealized (depreciation) appreciation
for the three months ended March 31, 1996 and 1995 is ($4,400) and
$7,100, respectively.
PER SHARE AMOUNTS:
Per share amounts are computed by dividing the net investment
income (loss) and net realized and unrealized gains (losses) on
investments by the weighted average number of shares outstanding
throughout the year.
RECLASSIFICATION:
Certain amounts in the prior year's financial statements have been
reclassified to conform to the current year's presentation.
3. CONCENTRATION OF CREDIT RISK:
Financial instruments that potentially subject the Company to
concentration of credit risk consist principally of cash and cash
equivalents. During the year the Company had deposits with
financial institutions which exceeded the $100,000 limit covered by
the Federal Deposit Insurance Corporation. Management regularly
monitors their balances and attempts to keep this potential risk to
a minimum by maintaining their accounts with financial institutions
they believe are of good quality.
<PAGE> 10
THE AMERICAS GROWTH FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 1996 AND 1995
(UNAUDITED)
4. INVESTMENTS:
INVESTMENTS INCLUDE THE FOLLOWING AT MARCH 31, 1996 AND 1995:
<TABLE>
<CAPTION>
VALUE VALUE
PRINCIPAL TYPE OF ISSUE AND MARCH 31, MARCH 31,
AMOUNT NAME OF ISSUER 1996 1995
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C>
U.S. Treasury bills (86.2%
and 84.5% of net assets at
March 31, 1996 and 1995,
respectively)
$ 1,940,449 U.S. Treasury bill,
$2,000,000 face value,
matures June 8, 1995 $ - $ 1,978,100
$ 485,580 U.S. Treasury bill,
$500,000 face value,
matures August 31, 1995 - 487,600
$ 471,030 U.S. Treasury bill,
$500,000 face value,
matures January 11, 1996 - 476,100
$ 1,415,780 U.S. Treasury bill,
$1,500,000 face value,
matures February 8, 1996 - 1,421,200
$ 1,949,545 U.S. Treasury bill,
$2,000,000 face value,
matures June 6, 1996 1,980,700 -
$ 487,890 U.S. Treasury bill,
$500,000 face value,
matures July 11, 1996 492,700 -
$ 1,465,940 U.S. Treasury bill,
$1,500,000 face value,
matures August 8, 1996 1,472,300 -
$ 476,030 U.S. Treasury bill,
$500,000 face value,
matures November 14, 1996 483,800 -
----------- -----------
Total U.S. Treasury bills $ 4,429,500 $ 4,363,000
=========== ===========
</TABLE>
<PAGE> 11
THE AMERICAS GROWTH FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 1996 AND 1995
(UNAUDITED)
4. INVESTMENTS (CONTINUED):
<TABLE>
<CAPTION>
NUMBER OF NUMBER OF
SHARES SHARES VALUE VALUE
MARCH 31, MARCH 31, TYPE OF ISSUE AND MARCH 31, MARCH 31,
1996 1995 NAME OF ISSUER 1996 1995
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common stocks (0.0% and
0.0% of net assets at
March 31, 1996 and
1995, respectively:
Majority owned (restricted):
80 - Americas Growth
Partners, Inc. $ - $ -
============ ============
<CAPTION>
NUMBER OF NUMBER OF
WARRANTS WARRANTS VALUE VALUE
MARCH 31, MARCH 31, TYPE OF ISSUE AND MARCH 31, MARCH 31,
1996 1995 NAME OF ISSUER 1996 1995
- -------------------------------------------------------------------------------------------------
Common stocks warrants:
(0.0% and 0.1% of net
assets at March 31, 1996
and 1995, respectively)
Restricted:
1 1 Greg Manning
Auctions, Inc. $ - $ 5,300
============ ============
Golf Reservations
of America, Inc.
2 2 Class A $ - $ -
2 2 Class B $ - $ -
============ ============
</TABLE>
<PAGE> 12
THE AMERICAS GROWTH FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 1996 AND 1995
(UNAUDITED)
4. INVESTMENTS (CONTINUED):
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT VALUE VALUE
OF NOTES TYPE OF ISSUE AND MARCH 31, MARCH 31,
MARCH 31, 1996 NAME OF ISSUER 1996 1995
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Notes (2.9% and 1.0% of
net assets at March 31,
1996 and 1995, respectively)
$ 50,000 Golf Reservations of
America, Inc. $ 50,000 $ 50,000
$ 100,000 Approved Financial
Corporation (including
accrued interest of $700) 100,700 -
--------- ---------
$ 150,700 $ 50,000
========= =========
</TABLE>
In November 1994, in a private placement, the Company purchased 50,000 shares
of restricted common stock and a warrant in Greg Manning Auctions, Inc.
("Manning"). The warrant entitled the holder to purchase 50,000 shares of
Manning restricted common stock at $2.25 per share through November 3, 1995.
Subsequently, the number of common shares obtainable upon exercise was
increased to 56,500 and the exercise price was decreased to $1.55. The Company
received certain registration rights with respect to the common stock and the
common stock underlying the warrant. The Company exercised the warrant and
purchased the common stock on November 1, 1995. On November 16, 1995 the
Company sold the stock for $141,200 which resulted in a realized gain of
approximately $53,500.
The Company agreed to loan up to $200,000 to Golf Reservations of America, Inc.
("Golf") pursuant to two 10% promissory notes in January and March, 1995. At
March 31, 1996 and 1995, the outstanding balance was $50,000 which is due the
earlier of April 1, 1996 or upon the closing of Golf's firm underwritten public
offering. In connection with the notes, the Company received warrants to
purchase an aggregate 110,907 shares of Golf's common stock at an exercise
price of $1.88 per share. As of March 31, 1996 and 1995, the Board of
Directors has valued the note at $50,000 and the warrants at $0.
<PAGE> 13
THE AMERICAS GROWTH FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 1996 AND 1995
(UNAUDITED)
4. INVESTMENTS (CONTINUED):
On July 6, 1995, the Company entered into a joint venture agreement
with Approved Financial Corporation (Approved) to market commercial
loans to businesses that derive, or are in a position to derive, a
substantial portion of their revenue from the Caribbean and Latin
America. The loans are to be secured by qualified first or second
mortgages. On August 1, 1995, the Company provided Approved with a
$200,000 credit facility bearing interest at prime. As of March 31,
1996, $100,000 has been advanced to Approved under the credit
facility. In consideration for providing the credit facility and for
its management consulting services, the Company will receive a
twenty-five percent (25%) interest in the joint venture's revenue
received from points on applicable loans and an option to purchase
twenty five percent (25%) of the joint venture for $200,000. As of
March 31, 1996, the Company had not exercised this option. As of
March 31, 1996, the Board of Directors has valued the outstanding
credit facility at $100,000 and the option at $0.
5. CASH AND CASH EQUIVALENTS:
<TABLE>
<CAPTION>
NUMBER OF NUMBER OF COST AND COST AND
SHARES SHARES VALUE VALUE
MARCH 31, MARCH 31, TYPE OF ISSUE AND MARCH 31, MARCH 31,
1996 1995 NAME OF ISSUER 1996 1995
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
516,600 703,400 Money market fund,
Cortland Trust, Inc. $ 516,600 $ 703,400
- - Checking account
with bank 11,200 10,900
--------- ---------
Total cash and cash
equivalents (10.3 %
and 13.8% of net
assets at March 31,
1996 and 1995,
respectively) $ 527,800 $ 714,300
========= =========
</TABLE>
<PAGE> 14
THE AMERICAS GROWTH FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 1996 AND 1995
(UNAUDITED)
6. FURNITURE AND EQUIPMENT:
Furniture and equipment are comprised of the following at March 31,
1996 and 1995:
<TABLE>
<CAPTION>
1996 1995
-------- --------
<S> <C> <C>
Furniture and fixtures $ 1,500 $ 1,500
Computer equipment 16,400 9,800
-------- --------
17,900 11,300
Less accumulated depreciation (1,600) (400)
-------- --------
$ 16,300 $ 10,900
======== ========
</TABLE>
7. INCOME TAXES:
Deferred income taxes reflect the net tax effects of temporary
differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for income tax
purposes. The deferred tax liability is the result of unrealized
appreciation (depreciation) on investments and the use of accelerated
depreciation methods for income tax purposes.
The significant components of deferred tax assets and liabilities on
the balance sheet at March 31, 1996 and 1995 are:
<TABLE>
<CAPTION>
1996 1995
-------- --------
<S> <C> <C>
Deferred tax assets:
Net operating loss $ 15,400 $ -
Unrealized depreciation of investments 1,600 -
-------- --------
17,000 -
-------- --------
Deferred tax liability:
Depreciation 2,800 1,400
Unrealized appreciation of investments - 1,100
-------- --------
2,800 2,500
-------- --------
Net deferred tax asset (liability) $ 14,200 $ (2,500)
======== ========
</TABLE>
<PAGE> 15
THE AMERICAS GROWTH FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 1996 AND 1995
(UNAUDITED)
7. INCOME TAXES (CONTINUED):
Significant components of the provision for income taxes (benefits)
attributable to continuing operations in 1996 and 1995 are as follows:
<TABLE>
<CAPTION>
1996 1995
--------- --------
<S> <C> <C>
Current:
Federal $ - $ 200
State - -
--------- --------
- 200
--------- --------
Deferred:
Federal (benefit) (11,700) 2,300
State (benefit) (800) -
--------- --------
(12,500) 2,300
--------- --------
Provision for income
taxes (benefit) $ (12,500) $ 2,500
========= ========
</TABLE>
8. RELATED PARTY TRANSACTIONS:
The Company has entered into one year renewable consulting agreements
with an entity of which a director of the Company was Chairman and
President. The agreement terminates in July, 1996. The Company paid
$9,000 during each of the periods ended March 31, 1996 and 1995. The
Company is committed to pay $7,000 under this agreement during 1996.
The Company leased its office space pursuant to a noncancelable
operating lease which expired in September, 1995. Commencing in
October 1995, the Company is provided with free office space by a law
firm with which the Chairman is "of counsel". Rent expense for the
period ended March 31, 1995 was approximately $5,700 The Company paid
the law firm legal fees of approximately $17,900 in the three months
ended March 31, 1996.
<PAGE> 16
THE AMERICAS GROWTH FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 1996 AND 1995
(UNAUDITED)
8. RELATED PARTY TRANSACTIONS (CONTINUED):
The Company entered into an employment agreement with the president of
the Company. The agreement is for three years expiring in July, 1997.
Compensation is $90,000 per year with cost of living increases each
year. The Company paid the president $23,600 and $22,500 pursuant to
this agreement for the three months ended March 31, 1996 and 1995,
respectively.
9. PROFIT SHARING PLAN:
The Company provides an employee profit sharing plan (the Plan) which
provides for a performance fee equal to twenty percent (20%) of net
income. As of March 31, 1996 and 1995, there was no accrual in
connection with the Plan.
10. PENDING MERGER:
On November 21, 1995, the Company entered into a non-binding letter of
intent with Tallard Technologies B.V. (Tallard), a privately-held
company engaged in the sale and distribution of computers,
peripherals, software and services related to the information
processing industry. Under the terms of the letter of intent, the
Company will acquire all of the outstanding securities of Tallard in
exchange for the issuance of approximately 8,088,406 shares of stock
of the Company to the sole stockholder of Tallard. The contemplated
merger with Tallard is subject to the negotiation of a definitive
agreement and approval of definitive terms and conditions of the
transactions by the stockholders of the Company and Tallard, neither
of which has occurred as of March 31, 1996. The Company has advised
its shareholders that there is no assurance that this merger will be
completed or completed pursuant to the terms and conditions described
above.
<PAGE> 17
PART I - FINANCIAL INFORMATION (CONTINUED)
Item 2. Management's Discussion and Analysis of Results of Operations,
Liquidity
RESULTS OF OPERATIONS
Three Months Ended March 31, 1996
As a result of operations, net assets decreased approximately $41,600
(or approximately .01% of net assets) during the quarter ended March 31, 1996.
For the comparable period in 1995, net assets increased $7,400 during the
quarter. The net decrease in net assets resulting from operations for the
quarter ended March 31, 1996 primarily resulted from a net investment loss of
$37,100 and an increase in unrealized depreciation of investments of $3,300.
The Company recognized investment income (which consisted entirely of
interest income) of approximately $65,100 for the quarter ended March 31, 1996
as compared to $67,400 for the quarter ended March 31, 1995.
Expenses aggregated approximately $113,300 during the quarter ended
March 31, 1996 which included salaries, accounting fees, consulting fees, legal
fees, rent and administrative expenses. Expenses for the quarter ended March
31, 1995 were $68,800. The increased expenses for the quarter ended March 31,
1996 resulted primarily from higher legal fees associated with the negotiation
of the potential merger transaction with Tallard Technologies B.V.
LIQUIDITY AND CAPITAL RESOURCES
As of March 31, 1996, the Company had cash and cash equivalents of
approximately $527,800 and U.S. Treasury Bills of approximately $4,429,500.
The increase in capital resources of approximately $4,957,300 was primarily due
to the closing of the Company's initial public offering on August 30, 1994 and
the exercise of the underwriter's overallotment option on September 21, 1994
providing net proceeds to the Company of approximately $4,785,000 and $717,800,
respectively, before deducting other offering costs of $349,300. The decrease
in capital resources for the three months ended March 31, 1996 was primarily
due to a net investment loss of $37,100. As of March 31, 1996, the Company had
liabilities of approximately $23,600.
<PAGE> 18
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
The Company is not a party to any material pending legal proceedings.
Item 2. Changes in Securities.
Not applicable.
Item 3. Defaults upon Senior Securities.
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders.
On April 4, 1996, the Company held its Annual Meeting of Stockholders, at which
Sanford B. Cohen and Martin C. Engelman were elected as Class I directors to
serve for a three year term expiring on the date of the Company's 1999 annual
meeting and until their successors have been elected and qualified. Messrs.
Cohen and Engelman each received 1,182,134 votes in favor and 9,050 against
their nomination. Their were no broker non-votes or abstentions with respect
to this matter.
Item 5. Other Information.
None.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
27 - Financial Data Schedule (for SEC use only)
(b) Reports on Form 8-K
None
<PAGE> 19
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.
THE AMERICAS GROWTH FUND, INC.
By: /s/ LEONARD J. SOKOLOW
----------------------
Leonard J. Sokolow
Chairman of the Board, President and
Chief Financial Officer
(Principal Executive, Financial and
Accounting Officer)
Date: May 14, 1996
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF AMERICAS GROWTH FOR THE THREE MONTHS ENDED MARCH 31,
1996, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<INVESTMENTS-AT-COST> 4,529,405
<INVESTMENTS-AT-VALUE> 4,580,200
<RECEIVABLES> 0
<ASSETS-OTHER> 581,800
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 5,162,000
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 23,600
<TOTAL-LIABILITIES> 23,600
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 5,141,300
<SHARES-COMMON-STOCK> 1,265,100
<SHARES-COMMON-PRIOR> 1,265,100
<ACCUMULATED-NII-CURRENT> (37,400)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 43,500
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (21,700)
<NET-ASSETS> 5,138,400
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 65,100
<OTHER-INCOME> 0
<EXPENSES-NET> 113,300
<NET-INVESTMENT-INCOME> (37,100)
<REALIZED-GAINS-CURRENT> (1,200)
<APPREC-INCREASE-CURRENT> (3,300)
<NET-CHANGE-FROM-OPS> (41,600)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
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<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (41,600)
<ACCUMULATED-NII-PRIOR> (300)
<ACCUMULATED-GAINS-PRIOR> 0
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<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 113,300
<AVERAGE-NET-ASSETS> 5,159,200
<PER-SHARE-NAV-BEGIN> 4.09
<PER-SHARE-NII> (.03)
<PER-SHARE-GAIN-APPREC> 0
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<PER-SHARE-NAV-END> 4.06
<EXPENSE-RATIO> 2.2
<AVG-DEBT-OUTSTANDING> 28,400
<AVG-DEBT-PER-SHARE> .02
</TABLE>
