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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-K
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934 -- For the fiscal year ended February 28, 2001
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number 0-9987
GLOBUS GROWTH GROUP, INC.
(Exact name of registrant as specified in its charter)
New York 13-2949462
(State of incorporation) (I.R.S Employer Identification No.)
44 West 24th Street, New York, NY 10010
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code - (212) 243-1000
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.01 Par Value
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 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
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K (X)
The number of shares of the Registrant's Common Stock outstanding as at May 1,
2001 was 2,347,257 (excluding 151,743 shares held in the Registrant's treasury).
Of the outstanding shares, a total of 1,840,792 are deemed to be held by
affiliates and 506,465 are held by non-affiliates. It is not possible to
calculate the aggregate market value of the shares held by non-affiliates as
there is no public trading market for the Common Stock of the Registrant. See
also Item 5 of this Report.
DOCUMENTS INCORPORATED BY REFERENCE - None
This report consists of 24 Pages
PART I
Item 1. BUSINESS
General Background
The Company, a New York corporation, was organized on August 6, 1976 under
the name of Globuscope, Inc. On August 7, 1984, its name was changed to Globus
Growth Group, Inc., which is its present name.
On February 27, 1986, the stockholders of the Company approved the
divestiture and sale of those assets of the Company as pertained to its then
camera manufacturing and photography operations as well as the sale of certain
shares of stock in a photographic related company owned by it and its interest
in the Company's then owned premises. The sale was consummated as of February
28, 1986. After such divestiture, the Company's activities consisted of the
holding of interests in various companies and the seeking out of acquisition and
joint-venture opportunities in various fields of business endeavor. On May 31,
1988, the Company filed with the Securities and Exchange Commission a
notification of election to be treated as a "Business Development Company"
("BDC") as that term is defined in the Investment Company Act of 1940 (the "1940
Act"). For a summary description of certain restrictions imposed upon a BDC by
the 1940 Act, reference should be made to "Governmental Regulation" elsewhere
herein. For a summary description of the risk factors involved in an investment
in the securities of a BDC due to the nature of such a company's investment
portfolio, reference should be made to "Risk Factors Involved In Investing In A
BDC" elsewhere herein.
Investment Portfolio
As at February 28, 2001, the Company held investments in the following
investee companies: (investments listed include only those the value of which
have not been written down to zero).
(i) Tumbleweed Communications, Inc. (formerly Interface Systems, Inc.)
("Tumbleweed") - a publicly held company that provides interfacing solutions for
proprietary computer architectures (such as IBM mainframes) and other peripheral
devices such as printers, PC's, cash registers and open systems computers. Its
products consist of hardware and proprietary software; including a laser printer
product line and software that interfaces a Unix-based workstation with an IBM
mainframe. Various members of the Globus family, two of whom are Directors of
the Company, are also stockholders of Tumbleweed.
(ii) ValiGen, N. V. (formerly Kimeragen, Inc.) ("ValiGen") - a privately held
non-affiliated development stage company founded in 1994 for the purpose of
engaging in research and development in the field of developing gene therapy
products for the treatment of hereditary and acquired diseases. In fiscal 2001,
Kimeragen, Inc. merged with ValiGene S.A. to form a European-American functional
genomics company called ValiGen, N. V.
(iii) Repligen Corporation ("Repligen") - a publicly held research and
development corporation founded in 1981. Its field of activity is primarily
focused on the development of new therapies for chronic and acute inflammation
and immunosuppression and the development of enabling technologies for discovery
of new drugs by rapid screening of combinatorial chemical libraries. In March of
1996, Repligen acquired Glycan Pharmaceuticals (a former investee of the
Company). As a result of that transaction, Repligen acquired a majority interest
in Proscure, Inc. (another former investee of the Company). Subsequently, the
Company exchanged its interests in Proscure, Inc. and Glycan Pharmaceuticals for
an aggregate of 100,468 shares of Common Stock of Repligen. For additional
information concerning Proscure, Inc. reference is made to Item 1 of the
Company's Form 10-K for its fiscal year ended February 29, 1996 and to Note B of
the Notes To Financial Statements contained in such Form 10-K, which Item and
Note are incorporated herein by reference.
(iv) Genitope Corporation ("Genitope") - a privately held research and
development company that holds proprietary technology having applications in the
field of cancer therapy. It focuses upon the development and production of
custom cancer vaccines for the treatment of Non-Hodgkin's Lymphoma.
(v) Carta Proteomics, Inc. (formerly Thermaphore Sciences, Inc.) ("Carta") - a
privately held drug discovery company dedicated to improving and accelerating
the development and optimization of small molecule drugs that target cell
surface receptor proteins. Stephen E. Globus, an officer and director of the
Company, is a director of Carta.
No representation is made by the Company that any or all of its investees:
(a) has, or will have in the immediate future, sufficient funds to continue to
carry on business activities; (b) will be able to achieve any of their
respective business objectives; (c) will be able to achieve or maintain
profitable operations; or (d) will not be obliged to attempt to obtain
additional funding.
For additional information concerning each of the above specified
investments, reference should be made to Note B of the Notes to Financial
Statements contained elsewhere herein and to the following subcaption.
Valuation of Investments
Investments are carried at fair value, which, for readily marketable
securities, represents the last reported sales price or bid price on the
valuation date. Investments in restricted securities and securities which are
not readily marketable are carried at fair value as determined in good faith by
the Board of Directors, in the exercise of its judgment, after taking into
consideration various indications of value available to the Board. See also
Notes A and B of Notes To Financial Statements elsewhere herein.
The following table, and the footnotes thereto, set forth certain specified
information concerning the investments of the Company as at February 28, 2001,
and as to the valuations thereof, specified in dollars, ascribed to them by the
Board of Directors of the Company as at such date. For comparative purposes
only, the valuations (as applicable) ascribed as at February 29, 2000 are also
set forth. Investments listed in the table include only those the value of
which, as at February 28, 2001, had not, then or previously, been written down
to zero or disposed of. The table and notes should be read in conjunction with
Notes A and B of Notes To Financial Statements elsewhere herein. (Amounts are in
dollars and are rounded to the nearest thousand.)
Basis
2/28/01 2/29/00 Employed
------- ------- --------
Tumbleweed Communicatons Inc. $ 1,000(1) $ 25,000(1) Market
ValiGen, N.V. $ 444,000(2) $ 444,000(2) Fair Value
Repligen Corp. $ 124,000(3) $ 601,000(3) Market
Genitope Corp. $ 630,000(4) $ 630,000(4) Fair Value
Carta Proteomics, Inc. $ 188,000(5) $ 163,000(5) Fair Value
---------- ----------
$1,387,000 $1,863,000
---------- ----------
Notes to Table:
(1) Represents equity investment - 775 shares of common stock of Interface
Systems, Inc. owned at 2/29/00 and 204 shares of Tumbleweed Communications
owned at 2/28/01. On October 2, 2000, the Company surrendered 775 shares of
Interface for 204 shares of Tumbleweed Communications Corp.
(2) Represents equity investment - 85,404 common shares owned at 2/28/01 and
60,000 shares of Series A Preferred Stock and 108,827 shares of Class A
Common Stock and 35,000 shares of Class B Common Stock owned at 2/29/00. In
fiscal 2001, Kimeragen, Inc. merged with ValiGen, N.V. and the Company's
shares of Kimeragen, Inc. common and preferred stock was exchanged for
ValiGen, N.V. common stock on the basis of .419 shares of ValiGen, N.V. for
1 share of Kimeragen, Inc.
(3) Represents equity investment - 30,718 shares of common stock owned at
2/28/01 and 46,218 shares of common stock owned at 2/29/00. (15,500 shares
were sold during the past fiscal year. Sales proceeds totaled $84,264.)
(4) Represents equity investment - 420,858 shares of Series A Preferred and
332,992 shares Series B Preferred owned at each date.
(5) Represents equity investment - 33,333 shares of Common Stock, 100,000
shares of Series A Preferred Stock and 10,000 shares of Series B Preferred
Stock owned at 2/28/01 and 33,333 shares of Common Stock and 100,000 shares
of Series A Preferred Stock owned at 2/29/00. (On February 14, 2000
Thermaphore Sciences, Inc. changed its name to Carta Proteomics, Inc. On
August 2, 2000 the Company purchased 10,000 shares of Series B Preferred
Stock for $25,000.)
Because of valuation factors, increases or decreases in the dollar amount of any
particular investment, business judgment, and other investment decision factors,
the amount of the Company's interest in any particular investee may vary from
time to time.
Governmental Regulation
The 1940 Act imposes many and varied restrictions on the activities of a
BDC, including restrictions on the nature of its investments. Some, but not all,
of the restrictions imposed on the activities of a BDC by such Act are described
in the following three paragraphs.
Generally speaking, the 1940 Act prohibits a BDC from investing in certain
types of companies, such as brokerage firms, insurance companies, investment
banking firms and investment companies. Moreover, the 1940 Act limits the type
of assets that a BDC may acquire to "qualifying assets" and certain assets
necessary for its operations (such as office furniture, equipment and
facilities) if, at the time of acquisition, less than 70% of the value of its
assets consist of qualifying assets. Qualifying assets include: (i) securities
of companies that were eligible portfolio companies (as defined in the 1940 Act)
at the time that the BDC acquired their securities; (ii) securities of bankrupt
or insolvent companies that are not otherwise eligible portfolio companies;
(iii) securities acquired as follow-on investments in companies that were
eligible at the time of the BDC's initial acquisition of their securities but
are no longer eligible, provided that the BDC has maintained a substantial
portion of its initial investment in those companies; (iv) securities received
in exchange for or distributed in or with respect to any of the foregoing; and
(v) cash items, Government securities and high-quality short-term debt. The 1940
Act also places restrictions on the nature of the transactions in which, and the
persons from whom, securities can be purchased in order for the securities to be
considered qualifying assets.
A BDC is permitted, under specified conditions, to issue multiple classes
of senior debt and a single class of preferred stock if its asset coverage, as
defined in such Act, is at least 200% after the issuance of the debt or the
preferred stock.
A majority of the members of the Board of Directors of a BDC must not be
"interested persons" of the BDC as that term is defined in the 1940 Act. Most
transactions involving a BDC and its affiliates (as well as affiliates of those
affiliates) require the prior approval of a majority of the BDC's independent
directors and a majority of the directors having no financial interest in such
transactions. Some transactions involving certain closely affiliated persons of
the BDC, including its directors, officers and employees, still require the
prior approval of the Securities and Exchange Commission (the "Commission"). In
general, (a) any person who owns, controls, or holds with power to vote, more
than 5% of a BDC's outstanding Common Stock, (b) any director, executive officer
or general partner of that person, and (c) any person who directly or
indirectly controls, is controlled by, or is under common control with, that
person, must obtain the prior approval of the BDC's independent directors, and,
in some instances, the prior approval of the Commission, before engaging in
certain transactions involving the BDC or any company controlled by the BDC.
Risk Factors Involved In Investing In A BDC
Due to the nature of the usual investment portfolio of a BDC similar to the
limited size and scope of the Company, an investment in the securities of such a
BDC involves a degree of risk that exceeds the risks involved in investing in an
operating company. Since the Company has elected to become a BDC, such risks are
now applicable to the securities of the Company. The following, generally
speaking, includes some, but not all, of such risks:
(a) The usual principal business objective of a BDC is to seek long-term
capital appreciation by making venture capital investments primarily in new and
developing companies which management of the BDC believes offer significant long
term potential for capital appreciation.
(b) An investment in a development stage company or in a new and developing
company subjects the BDC to a number of the same risks to which such investee
entity is subject, namely: (i) the problems, expenses, difficulties,
complications and delays that can be expected to be encountered by such an
entity in connection with the attempted development of a commercially viable
product and bringing such product to market, (ii) possible need by such entity
of additional financing, (iii) competition encountered by such entity, including
competition from companies with greater financial resources, more extensive
development, manufacturing, marketing and service capabilities and a larger
number of qualified managerial and technical personnel.
(c) Many of the securities acquired by a BDC are "restricted securities"
within the meaning of the Securities Act of 1933 ("Securities Act") and cannot
be resold without compliance with the Securities Act. Such restrictions on
resale will most likely adversely affect the liquidity and marketability of such
securities. Registration for sale of restricted securities under the Securities
Act is within the sole province of the issuer concerned. Such registration is
likely to be a time-consuming and expensive process and the BDC in certain cases
may have to bear the expense of such registration. In addition, a BDC always
bears the risk, because of the delays inherent in the registration process, that
it will be unable to resell the securities held by it, or that it will not be
able to obtain an attractive price for them. In the event the BDC is unable to
cause the securities to be registered for resale, it will have to seek to rely
upon an exemption from registration. Among other exemptions, Rule 144
promulgated under the Securities Act imposes a one-year holding period prior to
the sale of restricted securities and establishes volume limitations on the
amount of any restricted securities that can be sold within certain defined time
periods. Furthermore, there cannot be any assurance that there ever will be a
market for the securities held by a BDC; or if a market should develop, that
such market will be an established market and able to absorb the sale of a
sizable amount of securities.
(d) It may become necessary to make additional investments in investee
companies so as to protect a prior investment. Such follow-on investments may
limit the number of companies in which a small size BDC has the financial
ability to invest. Furthermore, a BDC with limited funds available may not have
sufficient funds to make as many follow-on investments as it deems necessary and
any follow-on investments which it makes may not be sufficient to protect its
prior investments in such entity, with the result that it may experience
significant losses in such investments. A decision not to make a particular
follow-on investment, or the financial inability to make it, may have a material
adverse impact on the investee.
(e) A BDC similar in size and scope to the Company is a "closed-end
non-diversified company" as that term is defined in the 1940 Act. Such small
size prevents it from being able to commit its funds to the acquisition of
securities of a large number of companies and prevents it from being able to
achieve the same type of diversification as larger entities engaged in venture
capital activities. Furthermore, such small
size places it at a competitive disadvantage with other venture capital
investing entities that have far greater financial resources available.
(f) The investment objective of a BDC similar in size and scope to the
Company is long-term capital appreciation. To the extent that any income is
derived from operations, it is likely that it will be used entirely to fund
additional investments and continuing working capital needs rather than be
distributed to stockholders.
(g) In order to increase its ability to invest in eligible portfolio
companies, a BDC similar in size and scope to the Company may borrow monies and
pay interest on such borrowings. Any investment gains made with the additional
monies in excess of interest paid will cause the net asset value of the BDC's
stock to rise faster than would otherwise be the case. On the other hand, if the
investment performance of the additional securities purchased fails to cover
their cost (including any interest paid on the money borrowed), the net asset
value of the BDC will decrease faster than would otherwise be the case. This is
known as "leveraging."
For further details concerning the financial condition of the Company and
its ability to make investments, reference should be made to "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
elsewhere herein.
Personnel
The Company presently employs three persons (including Messrs. Stephen and
Richard Globus) on a full-time basis.
Item 2. PROPERTIES
The Company continues to occupy office space at the premises formerly owned
by it (44 West 24th Street, New York, New York). While no formal lease was ever
entered into with Idex (now Globus Studios, Inc.) the Company is paying a charge
of $1,785 per month, which charge includes office space and electricity.
Item 3. LEGAL PROCEEDINGS
Not Applicable.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not Applicable.
PART II
Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCK HOLDER MATTERS.
(a) Market information. Prior to February 11, 1991, the Company's Common
Stock was traded in the over-the-counter market, but it is no longer traded in
that or any other "established public trading market" as that term is defined in
Securities & Exchange Commission regulations. On May 7, 2001 the National
Quotation Bureau advised the Company that the last bid price for the Common
Stock of the Company shown on its records was for $.25 on September 22, 1999.
Such bid price, however, does not represent an actual transaction. A data and
statistics search made by the Company on the Website of the National Quotation
Bureau on the Internet on May 5, 2001 showed "no results" for the Company and
"'gpix' security is not recognized" for a "symbol lookup" quote search.
Reference is also made to Item 5 of Registrant's Form 10-K for its fiscal year
ended February 29, 2000 which Item is incorporated herein by reference.
(b) Holders. The number of holders of record of the Common Stock of the
Company as of February 28, 2001, was approximately 216.
(c) Dividends. No dividends on the Common Stock have been paid since the
organization of the Company.
Item 6. SELECTED FINANCIAL DATA
The following selected financial information was abstracted from the
financial statements of the Company appearing elsewhere herein and reference
should be made to such statements for more details: (All figures are in dollars
and are rounded)
Year Ended
2/28/01 2/29/00 2/28/99 2/28/98 2/29/97
------- ------- ------- ------- -------
Statement of Operations:
Gain (loss)
on investments (416,000) 403,000 (578,000) (270,000) 819,000
Interest and Dividend
Income 1,000 11,000 12,000 14,000 42,000
Consulting and other
income 32,000 54,000 67,000 77,000 50,000
Earnings (loss) (703,000) 46,000 (814,000) (518,000) 647,000
Per share:
Earnings (loss) (0.30) 0.02 (0.35) (0.22) 0.27
Cash dividends -0- -0- -0- -0- -0-
Balance sheet:
Total assets 1,419,000 1,932,000 1,795,000 2,730,000 3,318,000
Shareholders' equity
(capital deficiency) (518,000) 185,000 139,000 953,000 1,475,000
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Results of Operations -- Prior to fiscal 1987, the Company was engaged in the
camera and photography business. On February 28, 1986, the Company sold its
operating business to an affiliated company and since that date the Company's
principal activity has been the making of investments in other companies.
At February 28, 2001, the Company had total assets of $1,419,000, compared
to $1,932,000 as at February 29, 2000 and $1,795,000 as at February 28, 1999.
Included in total assets at such dates were investments of $1,387,000 (2001),
$1,863,000 (2000) and $1,414,000 (1999). Shareholders' equity (deficiency) at
such dates was ($518,000) (2001), $185,000 (2000) and $139,000 (1999). Gain
(loss) on investments for such periods amounted to ($416,000) (2001), $403,000
(2000) and ($578,000) (1999). Included in such gains (losses) were $56,000 of
realized gain on investments and ($472,000) of change in unrealized gain (loss)
on investments for 2001; $52,000 of realized gain on investments and $351,000 of
change in unrealized gain (loss) on investments for 2000; and no realized gain
or loss on investments and ($578,000) of change in unrealized gain (loss) on
investments for 1999. Operating expenses, including interest charges, amounted
to $320,000 for 2001; $422,000 for 2000 and $328,000 for 1999. Included in
operating expenses were interest charges of $15,000 for 2001, $20,000 for 2000
and $19,000 for 1999. Included in expenses at February 29, 2000 is $114,000 of
promissory note and accrued interest written off as uncollectible (Catamount
Brewing Company). See also Note C of Notes to Financial Statements. Income
(loss) from operations, after provision for taxes, was ($703,000) for 2001;
$46,000 for 2000 and ($814,000) for 1999. Net earnings (loss) per share were
($0.30) for 2001; $0.02 for 2000 and ($0.35) for 1999. The weighted average
number of shares of Common Stock outstanding at such dates was 2,347,257 for
2001, 2000 and 1999.
Liquidity, Capital Resources and Other Matters Affecting Financial Condition
The Company's cash position as at February 28, 2001 (i.e., $21,000) is
offsetable by approximately $1,882,000 owing to members of the Globus family as
follows: (i) the amount of loans payable at such date (including accrued
interest) to Mr. Stephen E. Globus (i.e., approximately $214,000); (ii) the
amount of loans payable at such date (including accrued interest) to Mr. Richard
D. Globus (i.e., approximately $1,000) (iii) the amount of loans payable at such
date (including accrued interest) to SRG Capital Partnership, which Messrs.
Stephen E. and Richard D. Globus are the two sole partners, (i.e., approximately
$111,000); (iv) the amount of loans payable at such date (including accrued
interest) to Ms. Jane Globus, the mother of Stephen and Richard Globus (i.e.,
approximately $329,000); and (v) the amount of accrued salary owing at such date
to Stephen and Richard Globus, aggregating approximately $1,227,000. During the
past fiscal year Mr. Stephen Globus' loan account was reduced by payments to him
of $5,000 and Mr. Richard Globus' loan account was increased by $1,000. SRG
Capital Partnership has periodically loaned the Company various amounts during
the year: $5,000 on June 21, 2000; $25,000 on August 1, 2000; $10,000 on August
21, 2000; $12,500 on October 20, 2000; $15,000 on December 18, 2000; and $7,500
on February 23, 2001. The principal loan balance at February 28, 2001 is
$100,000, and accrues interest at 7.75%.
The near term liquidity of the Company, as well as its near term capital
resources position, are presently principally dependent upon the continued
willingness, as to which there can be no assurance whatsoever, of the members of
the Globus family who have made loans to the Company not to demand full or
substantially full repayment of such loans and the continued willingness, as to
which there can be no assurance whatsoever, of the members of the Globus family
who have made loans to the Company to
continue to make loans to the Company if necessary. See also Note A (1) of Notes
to Financial Statements elsewhere herein.
In connection with loans payable by the Company, including accrued
interest, to Messrs. Stephen E. and Richard D. Globus, such indebtedness
aggregated: approximately $221,000 at February 28, 1999; approximately $249,000
at February 29, 2000 and approximately $326,000 at February 28, 2001. As at
April 30, 2001, such indebtedness aggregated approximately $327,000. As at April
30, 2001 the indebtedness owing by the Company to Ms. Jane Globus aggregated
approximately $330,000. As at April 30, 2001, unpaid salaries owing to Messrs.
Stephen E. and Richard D. Globus aggregated approximately $1,243,000; so that as
at such date the total of monies owed to Messrs. Stephen E. Globus, Richard D.
Globus and Ms. Jane Globus aggregated approximately $1,900,000.
There are in fact presently no known events that can be considered certain
to occur which would materially change favorably or unfavorably either the short
term or long term liquidity (i.e., ability of the Company to generate adequate
amounts of cash to meet its needs for cash) or capital resources position (i.e.,
source of funds) of the Company from that in which it presently finds itself,
and absent continuation of the presently existing loans without call for full or
substantially full repayment, or additional loans from the Globus family, the
present liquidity and capital resources position of the Company necessarily
adversely affects the financial condition of the Company and its ability to make
new investments. (In such connection it must be noted that: the profitability of
a BDC, like the Company, is largely dependent upon its ability to make
investments and upon increases in the value of its investments; and a BDC is
also subject to a number of risks which are not generally present in an
operating company, and which are discussed generally in Item 1 of this Report to
which Item reference should be made.)
The nature and extent of the Company's investments as at February 28, 2001
are more fully discussed in Item 1 of this Report and in Notes A and B of Notes
to Financial Statements elsewhere herein and reference should be made to such
Item and such Note.
Messrs. Stephen E. and Richard D. Globus have advised the Board of
Directors that they believe that the expenditure of time and money necessary to
comply with all of the rules and regulations applicable to public companies in
general, and Business Development Corporations in particular, are not
justifiable by any benefits received by the Company or its stockholders, and
that they believe that the liquidity position of the Company, discussed above,
and its near term and readily foreseeable long term prospects, and the continued
need for the members of the Globus family to lend operating funds to the Company
have not been, and are not, conducive to the continuation of the Company as a
publicly held company. The absence of any meaningful trading market in the
Company's Common Stock was also a factor taken into consideration. They have
proposed to the Board that the Company withdraw its election to be a Business
Development Corporation and "go private." No particular plan to accomplish such
proposal has as yet been decided upon, or presented to the Board, by the Messrs.
Globus. It can be presumed that the Board of Directors will not take any
definitive action on the proposal until it receives an opinion from an
independent financial advisor as to whether, in its opinion, any particular plan
that may be proposed is fair from a financial point of view to the public
stockholders of the Company. It can also be presumed that final action on any
proposed plan will be taken by the Board only after and upon receipt by it of a
"fairness opinion" from such financial advisor that is satisfactory in all
respects to the Board and upon a definitive and final determination by the Board
itself as to fairness. Necessarily, no representation can be made that any plan
will in fact be formulated and presented to the Board or that if so formulated
and presented, it will be approved by the Board of Directors, or that any such
type of plan will, in fact, be consummated.
Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
Not Applicable.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by Item 8 appears at pages F-1 through F-9
(inclusive) of this Report, which pages follow Item 14 of this Report. The
following is an Index to the referred to Financial Statements and Supplementary
Data:
Report of Independent Auditors F-1
Balance Sheets as at February 28, 2001 and February 29, 2000 F-2
Statements of Operations
For the Three Years Ended February 28, 2001 F-3
Statement of Changes in Shareholders' Equity
For the Three Years Ended February 28, 2001 F-4
Statement of Cash Flows
For the Three Years Ended February 28, 2001 F-5
Notes to Financial Statements F-6
All schedules supporting financial statements are omitted because they are
not applicable or the required information is included in the financial
statements or notes thereto.
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not Applicable.
INDEPENDENT AUDITORS' REPORT
Board of Directors and Shareholders
Globus Growth Group, Inc.
New York, New York
We have audited the accompanying balance sheets of Globus Growth Group, Inc. as
of February 28, 2001 and February 29, 2000, and the related statements of
operations, changes in shareholders' equity and cash flows for each of the years
in the three-year period ended February 28, 2001. These financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements enumerated above present fairly, in all
material respects, the financial position of Globus Growth Group, Inc. as of
February 28, 2001 and February 29, 2000, and the results of its operations and
its cash flows for each of the years in the three-year period ended February 28,
2001 in conformity with accounting principles generally accepted in the United
States of America.
As explained in Note B, the financial statements include securities valued at
$1,262,000 at February 28, 2001 (89% of assets) and at $1,237,000 at
February 29, 2000 (64% of assets), whose values have been estimated by the Board
of Directors. Those estimated values may differ significantly from the values
that ultimately would be realized.
Richard A. Eisner & Company, LLP
New York, New York
May 8, 2001
F-1
GLOBUS GROWTH GROUP, INC.
Balance Sheets (Note A)
February 28, February 29,
2001 2000
--------------- ---------------
ASSETS
Cash $ 21,000 $ 58,000
Investments in securities, at fair value (cost of $1,653,000 in 2001 and
$1,657,000 in 2000) (Notes A[2] and B) 1,387,000 1,863,000
Other assets 11,000 11,000
--------------- ---------------
$ 1,419,000 $ 1,932,000
=============== ===============
LIABILITIES
Accounts payable and accrued expenses, including salaries due to officer/
shareholders of $1,227,000 in 2001 and $1,129,000 in 2000 $ 1,282,000 $ 1,178,000
Loans payable to officer/shareholders, including accrued interest of
$197,000 in 2001 and $191,000 in 2000 (Note D) 326,000 249,000
Loan payable to related party, including accrued interest of $142,000 in
2001 and $132,000 in 2000 (Note D) 329,000 320,000
--------------- ---------------
1,937,000 1,747,000
--------------- ---------------
SHAREHOLDERS' EQUITY (Note F)
Preferred stock - $.10 par value; authorized 450,000 shares; none issued Series
B convertible preferred stock - $.10 par value; authorized 50,000
shares; none issued
Common stock - $.01 par value; authorized 4,500,000 shares; issued
2,499,000 shares 25,000 25,000
Additional paid-in capital 2,747,000 2,747,000
Accumulated deficit (3,249,000) (2,546,000)
Treasury stock, at cost - 151,743 shares (41,000) (41,000)
--------------- ---------------
(518,000) 185,000
--------------- ---------------
$ 1,419,000 $ 1,932,000
=============== ===============
F-2
See notes to financial statements
GLOBUS GROWTH GROUP, INC.
Statements of Operations (Note A)
Year Ended
---------------------------------------------
February 28, February 29, February 28,
2001 2000 1999
----------- ----------- -----------
Revenue:
Realized gain on investments $ 56,000 $ 52,000
Change in unrealized gain (loss) on investments (472,000) 351,000 $ (578,000)
----------- ----------- -----------
(416,000) 403,000 (578,000)
Interest and dividend income 1,000 11,000 12,000
Consulting and other income (including approximately $30,000
in 2001, $42,000 in 2000 and $42,000 in 1999 from related
parties) 32,000 54,000 67,000
----------- ----------- -----------
(383,000) 468,000 (499,000)
----------- ----------- -----------
Expenses:
General and administrative (Note H) 305,000 288,000 309,000
Interest 15,000 20,000 19,000
Write off of uncollectible note receivable and accrued
interest (Note C) 114,000
----------- ----------- -----------
320,000 422,000 328,000
----------- ----------- -----------
(Loss) income before income taxes (703,000) 46,000 (827,000)
Income tax benefit 13,000
----------- ----------- -----------
Net (loss) income $ (703,000) $ 46,000 $ (814,000)
=========== =========== ===========
Net income (loss) per share - basic (Note G) $ (.30) $ .02 $ (0.35)
=========== =========== ===========
Weighted average number of common shares- basic 2,347,257 2,347,257 2,347,257
=========== =========== ===========
F-3
See notes to financial statements
GLOBUS GROWTH GROUP, INC.
Statements of Changes in Shareholders' Equity
Common Stock Treasury Stock
------------------------- Additional -------------------------
Number of Paid-in Accumulated Number of
Shares Amount Capital Deficit Shares Cost
------------ ---------- ------------ --------------- ---------- ----------
Balance - February 28, 1998 2,499,000 $ 25,000 $ 2,747,000 $ (1,778,000) 151,743 $ 41,000
Net loss (814,000)
------------ ---------- ------------ --------------- ---------- ----------
Balance - February 28, 1999 2,499,000 25,000 2,747,000 (2,592,000) 151,743 41,000
Net income 46,000
------------ ---------- ------------ --------------- ---------- ----------
Balance - February 29, 2000 2,499,000 25,000 2,747,000 (2,546,000) 151,743 41,000
Net loss (703,000)
------------ ---------- ------------ --------------- ---------- ----------
Balance - February 28, 2001 2,499,000 $ 25,000 $ 2,747,000 $ (3,249,000) 151,743 $ 41,000
============ ========== ============ =============== ========== ==========
F-4
See notes to financial statements
GLOBUS GROWTH GROUP, INC.
Statements of Cash Flows
Year Ended
-------------------------------------------------
February 29, February 29, February 28,
2001 2000 1999
------------- ------------- -------------
Cash flows from operating activities:
Net (loss) income $(703,000) $ 46,000 $(814,000)
Adjustments to reconcile net (loss) income to net cash
used in operating activities:
Realized gain on investments (56,000) (52,000)
Unrealized (gain) loss on investments 472,000 (351,000) 578,000
Write off of uncollectible promissory note receivable
and accrued interest 110,000
Changes in:
Other assets 29,000 (33,000)
Accounts payable, accrued expenses and
accrued interest on loans 119,000 114,000 33,000
------------- ------------- -------------
Net cash used in operating activities (168,000) (104,000) (236,000)
------------- ------------- -------------
Cash flows from investing activities:
Purchase of investments (25,000) (200,000) (112,000)
Proceeds from sale of investments 85,000 154,000
Loans receivable (105,000)
------------- ------------- -------------
Net cash provided by (used in) investing activities 60,000 (46,000) (217,000)
------------- ------------- -------------
Cash flows from financing activities:
Repayments of loans to related party (45,000) (45,000)
Increase in loans payable to officer/shareholders 75,000 25,000
Repayment of loans payable to officer/shareholders (4,000) (5,000) (109,000)
------------- ------------- -------------
Net cash provided by (used in) financing activities 71,000 (25,000) (154,000)
------------- ------------- -------------
Net decrease in cash (37,000) (175,000) (607,000)
Cash - beginning of year 58,000 233,000 840,000
------------- ------------- -------------
Cash - end of year $ 21,000 $ 58,000 $ 233,000
============= ============= =============
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Income taxes $ 34,000
Interest $ 40,000
F-5
See notes to financial statements
GLOBUS GROWTH GROUP, INC.
Notes to Financial Statements
February 28, 2001 and February 29, 2000
NOTE A - THE COMPANY AND ITS SIGNIFICANT ACCOUNTING POLICIES
[1] The Company:
The Company's principal activity is investing in other companies. Effective
May 27, 1988, the Company elected to be treated as a Business Development
Company.
The Company's principal assets are its investments, which unless sold, do
not generate any cash flow. As a result, the Company has been dependent
upon advances from its officer/shareholders in order to meet its
obligations. The Company's ability to continue to meet its obligations is
dependent upon a ready market for its investments or upon the continued
financial support of the officer/shareholders including their willingness
to refrain from demanding amounts due them, which such officer/shareholders
have agreed to do through March 1, 2002.
[2] Security valuation:
Investments are carried at fair value, which, for readily marketable
securities, represents the last reported sales price or bid price on the
valuation date. Investments in restricted securities and securities which
are not readily marketable are carried at fair value as determined in good
faith by the Board of Directors, in the exercise of its judgment, after
taking into consideration various indications of value available to the
Board. These values may differ significantly from the values that
ultimately would be realized.
[3] 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 reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
F-6
GLOBUS GROWTH GROUP, INC.
Notes to Financial Statements
February 28, 2001 and February 29, 2000
NOTE B - INVESTMENTS
February 28, February 29,
2001 2000
----------------------------------- --------------------------------------
Number of Fair Number of Fair
Security Shares Value Cost Shares Value Cost
- ------------------------------------------------- --------- ---------- ---------- ----------- ----------- ----------
Common stock - 31.15% in 2001 and 50.1% in 2000:
Catamount Brewing Co. (1) 23,215 $ 176,000 23,215 $ 176,000
Tumbleweed Communications Corp. 204 $ 1,000 7,000 775 $ 25,000 7,000
Valigen, N.V. * 85,404 444,000 444,000
Kimeragen, Inc. Class A * 108,827 219,000 219,000
Kimeragen, Inc. Class B * 35,000 75,000 75,000
Repligen Corporation 30,718 124,000 58,000 46,218 601,000 87,000
Carta Proteomics, Inc. 33,333 13,000 13,000 33,333 13,000 13,000
---------- ---------- ----------- ----------
Total common stock 582,000 698,000 933,000 577,000
---------- ---------- ----------- ----------
Preferred stock 68.85% in 2001 and 49.9% in 2000:
Catamount Brewing Co. Series A Pfd. 4,286 150,000 4,286 150,000
Genitope Corp. Series A Pfd. 420,858 210,000 210,000 420,858 210,000 210,000
Genitope Corp. Series B Pfd. 332,992 420,000 420,000 332,992 420,000 420,000
Kimeragen Inc. Series A Pfd. * 60,000 150,000 150,000
Carta Proteomics, Inc. Series A Pfd 100,000 150,000 150,000 100,000 150,000 150,000
Carta Proteomics, Inc. Series B Pfd 10,000 25,000 25,000
---------- ---------- ----------- ----------
Total preferred stock 805,000 955,000 930,000 1,080,000
---------- ---------- ----------- ----------
Total investments $1,387,000 $1,653,000 $ 1,863,000 $1,657,000
========== ========== =========== ==========
Restricted and not readily marketable securities were valued at a total fair
value of $1,262,000 and $1,237,000 at February 28, 2001 and February 29,
2000, respectively, as determined by the Board of Directors. Such
investments consisted of all securities except Tumbleweed Communications
Corp. and Repligen Corporation for which values are based on quoted market
values ($1,000 and $124,000, respectively, at February 28, 2001 and $25,000
and $601,000, respectively, as of February 29, 2000).
The Company invests in biotechnology, and computer technology. At February 28,
2001 - 99.9%, and 0.1%, respectively. At February 29, 2000 - 98.6%, and
1.4%, respectively. All investments are in U.S. companies and are
non-income producing.
(1) Represents in excess of 5% of outstanding voting securities of investee.
* In fiscal 2001, Valigen, N.V. merged with Kimeragen, Inc. and the Company's
shares of Kimeragen, Inc. common and preferred stock has been exchanged for
Valigen, N.V. common stock on the basis of .419 shares of Valigen, N.V. for
1 share of Kimeragen, Inc.
F-7
GLOBUS GROWTH GROUP, INC.
Notes to Financial Statements
February 28, 2001 and February 29, 2000
NOTE B - INVESTMENTS (CONTINUED)
The unrealized appreciation and depreciation at the end of the Company's fiscal
year end is as follows:
February 28, February 29,
2001 2000
---------- -----------
Unrealized appreciation $66,000 $532,000
Unrealized depreciation (332,000) (326,000)
---------- ---------
Net (depreciation) appreciation $(266,000) $206,000
========== ========
NOTE C - PROMISSORY NOTE RECEIVABLE
During the year ended February 1999, the Company loaned $105,000 to Catamount
Brewing Co. The loans were payable on demand and bore interest at 12% on $75,000
of principal and 8.5% on the balance. During fiscal 2000, management determined
that the carrying value of the loans and related interest was impaired and wrote
off the principal of $105,000 and accrued interest of $9,000. In addition, the
Company wrote down its investment in Catamount Brewing Co. common and preferred
stock to zero.
NOTE D - LOANS PAYABLE
Loans from officer/shareholders and a relative of theirs are due on demand and
bear annual interest at 5% - 7.75%.
The estimated fair value of these financial instruments approximates their
carrying amount. However, due to the nature of the relationship of the parties,
the amounts are not necessarily indicative of the amounts that could be realized
in a current market exchange.
NOTE E - INCOME TAXES
The Company accounts for income taxes under the provision of Financial
Accounting Standards Board ("FASB") Statement No. 109, "Accounting for Income
Taxes," which requires the Company to recognize deferred tax assets and
liabilities for the future tax consequences attributable to differences between
the financial statement carrying amounts of existing assets and liabilities and
their respective tax bases. In addition, FASB Statement No. 109 requires the
recognition of future tax benefits, such as net operating loss ("NOL")
carryforwards, to the extent that realization of such benefits is more likely
than not.
At February 28, 2001, the Company had available NOL carryforwards for regular
federal income tax purposes of approximately $413,000, which expire at various
dates through 2021.
F-8
GLOBUS GROWTH GROUP, INC.
Notes to Financial Statements
February 28, 2001 and February 29, 2000
NOTE E - INCOME TAXES (CONTINUED)
The components of the deferred income tax assets and liabilities were as follows
as at:
February 28, February 29, February 28,
2001 2000 1999
-------------- ------------- -------------
Deferred tax assets (liabilities):
NOLs and accrued expenses not deductible
for income tax purposes $ 964,000 $803,000 $ 681,000
Unrealized (gain) loss on investments 122,000 (95,000)
-------------- ------------- -------------
1,086,000 708,000 681,000
Less valuation allowance 1,086,000 708,000 681,000
-------------- ------------- -------------
$ 0 $ 0 $ 0
-------------- ------------- -------------
The amounts of income taxes provided varied from the amounts which would be
"expected" to be provided at the statutory federal income tax rates in effect
for the following reasons:
February 28, February 29, February 28,
2001 2000 1999
-------------- ------------- -------------
Tax (benefit) computed based on statutory
federal tax rate $ (239,000) $ 16,000 $(281,000)
NOLs 54,000 32,000 65,000
Accrued expenses not deductible 52,000 56,000 18,000
Unrealized (gains) loss on investments 217,000 (109,000) 196,000
State and local income tax, net of federal income
tax effect (84,000) (8,000)
Other 5,000 (3,000)
------------- ------------- -------------
$ 0 $ 0 $ (13,000)
============= ============= =============
NOTE F - SHAREHOLDERS' EQUITY
The Board of Directors has authorized the future sale of up to 300,000 shares of
the Company's authorized, but unissued, common stock at a price of $.50 per
share to individuals to be determined at the discretion of the Board. No such
shares have been issued.
NOTE G - PER SHARE DATA
Per share data is based on the weighted average number of shares of common stock
outstanding.
NOTE H - RELATED PARTY TRANSACTIONS
The Company paid approximately $21,000, $21,000 and $21,000 for rent to an
affiliated company for each of the years ended February 28, 2001, February 29,
2000 and February 28, 1999, respectively.
F-9
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Stephen E. Globus Chairman of the Board
Richard D. Globus President and Director
Stanley Wunderlich Director
Ronald J. Frank Director
Joseph Mancuso Director
Lisa Vislocky Vice President
Note: The office of Secretary of the Company does not have any policy-making
function, and accordingly, Mr. Harry Balterman, who is the Secretary, is not an
Executive Officer of the Company.
STEPHEN E. GLOBUS, age 54, has been an officer and director of the Company
since its organization in 1973, and is currently its Chairman of the Board and
Chief Executive Officer. He is a director of Carta Proteomics, Inc. He is also a
director of Nematron Corporation, a publicly held company, and Plasmaco, Inc., a
wholly-owned subsidiary of Matsushita (Panasonic).
RICHARD D. GLOBUS, age 54, as well as his brother referred to above, has
also been an officer and director of the Company since its organization in 1973,
and is currently its President and Chief Operating Officer. He is also a
director of Globus Studios, Inc. (formerly Idex, Inc.).
STANLEY WUNDERLICH, age 55, holds a BS degree from Brooklyn College and an
LL.B. degree from LaSalle Law School. He is presently, and has been since the
beginning of 1995, engaged in investment banking and financial consulting
activities for various organizations. From 1991 until 1994 he was the Managing
Director of the Institutional Services Department of Robert Todd Financial Corp.
(an investment banking firm). From 1977 until 1987, he was Managing Director of
Krieger, Wunderlich, Fialkov, Scheinman & Co. (a broker-dealer); and from 1972
until 1977 he was a Vice President of Blyth, Eastman, Dillon Union Securities (a
broker-dealer). He is a former member of the Arbitration Committee of the
American Stock Exchange and a former Vice President of the Long Island Forum of
Technology. Mr. Wunderlich is a director of C.P.I. Aerostructures Corp. and has
been a director of the Company since his election as such on December 3, 1992.
RONALD J. FRANK, age 50, is presently, and has been since June 1990, a
private investor. From January 1989 to June 1990, he was associated with Profit
Concepts, Ltd., which was a general partner of an investment partnership and
from March 1987 to January 1989 he was a private financial consultant. Mr. Frank
has been a director of the Company since his election as such on December 3,
1992.
JOSEPH MANCUSO, age 60, holds an Electrical Engineering degree from
Worcester Polytechnic Institute in Massachusetts, an MBA from the Harvard
Business School and a Ph.D. in Educational Administration from Boston
University. He has been Chairman of the Management Department at Worcester
Polytechnic Institute and is presently the head of the Center for
Entrepreneurial Management, Inc. and of the Chief Executive Officers Club in New
York City. Mr. Mancuso is the author of a number of books which have been
published by Simon & Schuster. Mr. Mancuso is a director of TEAM Mucho, Inc. and
has been a director of the Company since his election as such on December 3,
1992.
LISA VISLOCKY, age 43, is a Certified Public Accountant and holds an MBA in
Federal Taxation from Fairleigh Dickinson University. She has been employed by
the Company, on a full-time basis, since March 1986. From September 1983 until
February 1986, she was employed by Weiner and Company,
Certified Public Accountants and from 1979 to May 1983 she was an internal
auditor for International Telephone & Telegraph Co., Inc.
Messrs. Wunderlich, Frank and Mancuso are considered to be the members of
the Board of Directors of the Company who are the "independent directors" as
required by the Investment Company Act of 1940. (See the caption "Governmental
Regulation" in Item 1 above.)
Directors are elected at the annual meeting of stockholders and hold office
until the following annual meeting. The most recent annual meeting of
stockholders was held on December 3, 1992. The terms of all officers expire at
the annual meeting of directors following the annual stockholders meeting.
Subject to their contract rights to compensation, if any, officers may be
removed at any time by the Board of Directors.
Item 11. EXECUTIVE COMPENSATION
(a) (b) Summary Compensation Table:
Long Term Compensation
Annual Compensation Awards Payouts
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Other Restricted Securities All
Annual Stock underlying other
Name and Compen- Award(s) Options/ LTIP Compen-
Principal Year Salary Bonus sation SAR's Payouts sation
Position Ended ($) ($) ($) ($) ($) ($) ($)
- --------------------------------------------------------------------------------------------------------------------
Stephen E.
Globus,
CEO 2/28/01 50,000 -- -- -- -- -- --
2/29/00 50,000 -- -- -- -- -- --
2/28/99 50,000 -- -- -- -- -- --
(c) Option/SAR Grants Table -- Not Applicable.
(d) Aggregated Option/SAR Exercises and Fiscal Year-End Option/SAR Value Table
-- Not Applicable.
(e) Long-Term Incentive Plan ("LTIP") Awards Table -- Not Applicable.
(f) Defined Benefit or Actuarial Plan Disclosure -- Not Applicable.
(g) Compensation of Directors -- There are presently no arrangements pursuant
to which Directors of the Company are compensated for any services provided
as a director, including any amounts payable for committee participation or
special assignments.
(h) Employment Contracts and Termination of Employment and Change-In-Control
Arrangements -- Not Applicable.
(i) Report on Repricing of Options/SAR's -- Not Applicable.
(j) Compensation Committee Interlocks and Insider Participation -- The Board of
Directors of the Company did not have any compensation committee or board
committee performing equivalent functions during the last completed fiscal
year. Messrs. Stephen E. and Richard D. Globus participated in all
deliberations and decisions of the Board of Directors of the Company during
its last completed fiscal year.
(k) Board Compensation Committee Report on Executive Compensation -- Not
Applicable.
(l) Performance Graph -- Not Applicable.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of March 29, 2001,
regarding each person known by the Company to own beneficially more than 5% of
the Company's Common Stock, each director of the Company who owns shares of
Common Stock, and all directors and officers as a group.
Approximate
Amount and Nature of Percent
Name Beneficial Ownership (1) of Class (2)
---- ------------------------ ------------
Stephen E. Globus * 514,750 (3) 22
Richard D. Globus * 513,750 22
Ronald P. Globus * 500,000 22
Ronald J. Frank 1,000 (4)
Stanley Wunderlich none --
Joseph Mancuso none --
All Directors and Officers
as a Group (7 persons) 1,048,200 44 (2)
Jane Globus
201 Crandon Blvd.
Key Biscayne, FL 33149 312,292 (5) 13
* 44 West 24th Street, New York, NY 10010
(1) Unless otherwise indicated, all shares are directly owned, and the sole
investment and voting power is held, by the persons named. Information in
table has been supplied by the persons concerned or has been obtained from
Company records.
(2) Approximate percent of class has been computed on the basis of the number
of shares of Common Stock outstanding as of March 29, 2001, (2,347,257).
(3) Includes 1,000 shares held for benefit of minor son.
(4) Less than 1%.
(5) 16,500 shares are held of record and beneficially and the remainder are
beneficially owned. Mrs. Globus is the mother of the three Globus brothers
who disclaim any beneficial ownership of the shares owned by her.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
From time to time Messrs. Stephen E. and Richard D. Globus have made loans
to the Company. For details as to amounts owed to them by the Company, reference
should be made to the caption "Management's Discussion and Analysis of Financial
Condition and Results of Operations" elsewhere herein. Commencing March 1, 1988,
loans owing to Mr. Stephen E. Globus (the principal amount of which was
approximately $215,000 at such date) accrued interest at the rate of 5% per
annum, and commencing May 14, 1999, loans owing to SRG Capital Partnership (the
principal amount of which was approximately $150,000 at such date) accrued
interest at the rate of 7.75% per annum. The Company is also indebted to Messrs.
Stephen E. and Richard D. Globus for unpaid salaries owed to them and is
indebted to Ms. Jane Globus for monies loaned to it by her. For details as to
amounts owed reference should be made to the caption "Management's Discussion
and Analysis of Financial Condition and Results of Operations" elsewhere herein.
PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) (1) (2) Financial Statements and Financial Statement Schedules
A list of the Financial Statements and Financial Statement Schedules filed
as a part of this Report is set forth in Item 8 of this Report, which list is
incorporated herein by reference.
(a) (3) Exhibits
3(a) Articles of Incorporation and Amendments Thereto (Incorporated by
reference to Exhibits 2(a), 2(b) and 2(c) filed with Registrant's Form
S-18 Registration Statement, File # 2-72220 NY and to Exhibit 3-1
filed with Registrant's Form 8-K for event of August 7, 1984, File
#0-9987).
3(b) By-Laws (Incorporated by reference to Exhibit 2(d) filed with
Registrant's Form S- 18 Registration Statement, File # 2-72220 NY).
10 Sale of Assets Agreement between Registrant and Idex, Inc. dated
December 11, 1985 (Incorporated by reference to Exhibit 1 to
Registrant's Form 8-K for event of February 27, 1986).
11 Statement re computation of per share earnings. (Included in Note F of
Notes To Financial Statements filed as part of this Report).
27 Financial Data Schedule
(b) Reports on Form 8-K
During the last quarter of the period covered by this Report, no reports on
Form 8-K were filed.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
GLOBUS GROWTH GROUP, INC.
By /s/ Stephen E. Globus
---------------------------
Stephen E. Globus
Chairman of the Board
Dated: New York, NY
June 12, 2001
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons in the capacities and on
the dated indicated:
Signature Title Date
/s/ Stephen E. Globus
- ---------------------------- Chairman of the Board,
Stephen E. Globus (Principal Executive Officer) June 12, 2001
/s/ Richard D. Globus
- ---------------------------- President, Director
Richard D. Globus June 12, 2001
/s/ Lisa Vislocky
- --------------------------- Vice President
Lisa Vislocky June 12, 2001
/s/ Stanley Wunderlich
- --------------------------- Director
Stanley Wunderlich June 12, 2001
/s/ Ronald J. Frank
- --------------------------- Director
Ronald J. Frank June 12, 2001
/s/ Joseph Mancuso
- --------------------------- Director
Joseph Mancuso June 12, 2001