U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                   FORM 10-KSB


         [X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
              SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 1997.

         [ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
              SECURITIES EXCHANGE ACT OF 1934

         For the transition period from               to

Commission File No. 33-24138-D


                              CAPITAL GROWTH, INC.
                 (Name of small business issuer in its charter)


Nevada                                                                87-0463772
State or other jurisdiction of                                  (I.R.S. Employer
incorporation or organization                                Identification No.)


   10 West 100 South, Ste. 450
       Salt Lake City, Utah                      84101
(Address of principal executive offices)        (Zip Code)

Issuer's telephone number, including area code: (801) 355-0252

 Securities registered pursuant to Section 12(b) of the Act: None

 Securities registered pursuant to Section 12(g) of the Act: None

       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

       The aggregate market value of the common voting stock held
by non-affiliates as of March 31, 1998:  Not Determinable.

       Shares outstanding of the Issuer's common stock as of
December 31, 1997:  48,000,000 shares.

           The issuer's revenues for the year ended December 31, 1997,
were nominal.



<PAGE>



                              PART I
Item 1.  Description of Business.

         (a)  General Development of Business.

     Capital Growth,  Inc. (the "Issuer" or "Company"),  was incorporated  under
the laws of the State of Nevada on March 28, 1988.  The Issuer was  organized to
raise capital and to  investigate  and acquire any suitable  asset,  property or
other  business  opportunity  which  management  might believe had good business
potential. No specific business or industry was predetermined.

     The Company was formed as a wholly-owned subsidiary of Data Growth, Inc., a
public  blind pool  (blank  check)  company,  for the  purpose of  allowing  the
shareholders  of Data Growth,  Inc. to participate in another company which will
seek a business acquisition of its own. The formation of the Issuer was intended
to diversify the number and type of acquisitions which could potentially benefit
the shareholders of Data Growth, Inc.

     In  connection  with its  formation,  the Company  issued  5,000,000  Units
comprising 5,000,000 shares of common stock,  5,000,000 A Warrants and 5,000,000
B Warrants to Data Growth, Inc. for $50,000.

     Data Growth, Inc. during 1989,  distributed 4,600,640 of the to its 
shareholders a 1 for 3 basis (one Unit for every shares) and retained 399,360
Units.

     The Units were distributed at no cost to Data Growth, Inc. shareholders who
were  shareholders  of record as of January 23, 1989,  the Record Date. One Unit
was  distributed for each three shares owned as of the Record Date. The stock, A
Warrants and B Warrants are evidenced by transferable  certificates  and are not
separable from the Units.

     The  distribution  of the Units and the  exercise of any  Warrants  was not
conditioned  upon the consent of shareholders  of Data Growth,  Inc. or upon the
subscription of any minimum number of shares or Warrants.

     The Company's  outstanding  Warrants are not detachable  from the Units and
may not be traded separately. Each "A" Warrant is exercisable at a price of $.20
per share  through ? , and the "B" Warrants at $.30 per share through ? , (these
dates are  extensions of the original  dates of September 30, 1989 and March 31,
1990).  The  exercise  price may be reduced at the option of  management  of the
Company without changing the number of outstanding warrants.

     All Unit  Warrants  are subject to a one-time  right of  redemption  by the
Company at $.001 per Warrant,  on 30 days  notice,  at any time after the market
price (based on the closing bid price

                                                                               2

<PAGE>



as  reported  by any  market-maker)  of  the  Company's  common  stock  for  any
consecutive 20 day period  reaches or exceeds the Warrant  exercise  price.  All
outstanding  Warrants  must  be  redeemed  if any are  redeemed.  If  notice  of
redemption  is  given,  a holder of a Warrant  will have a 30 day  period  after
notice of redemption  is given in which to exercise his Warrants  after which he
will be compelled to accept the redemption  price.  The redemption price will be
paid to the registered  owner as of a specified  record date and the certificate
will be considered canceled.

     The Warrants  contain  provisions  that protect the holders thereof against
dilution by adjustment of the exercise  price in certain  events,  such as stock
dividends   and   distributions,    splits,    recapitalization,    mergers   or
consolidations.  The  Company is not  required to issue  fractional  shares with
respect to any such adjustment.  A holder of Warrants, as such, does not possess
any rights as a shareholder of the Company unless such Warrants are exercised.

         (b)  Financial Information about Industry Segments.

     The Issuer does not presently have separate industry segments.

     (c)  Narrative Description of the Business.

General Discussion

     The  Company's  business  plan is to seek  one or more  potential  business
ventures, anywhere in the United States, which, in the opinion of management may
warrant  involvement  by the Company.  The Company will only acquire  businesses
which can generate or provide audited financial  statements.  Management intends
to make  acquisitions  of  entities  for which it can obtain  audited  financial
statements.  This will limit the types of  businesses  which the  Company  could
acquire to those firms which have previously had audited  financial  statements.
The Company  recognizes  that because of its limited  financial,  managerial and
other resources, the number of suitable potential business ventures which may be
available to it will be extremely  limited.  The  Company's  principal  business
objective will be to seek long-term  growth potential in the business venture in
which it participates  rather than to seek immediate,  short-term  earnings.  In
seeking to attain the  Company's  business  objective,  it will not restrict its
search to any particular  business or industry,  but may participate in business
ventures  of  essentially  any kind or nature,  including,  but not  limited to,
finance, high technology,  manufacturing,  natural resources,  service, research
and  development,  communications,   insurance,  brokerage,  transportation  and
others.  Management's  discretion is unrestricted  and it may participate in any
business venture whatsoever,  which may meet the business  objectives  discussed
herein. It is emphasized that the business objectives

                                                                               3

<PAGE>



discussed are extremely general and are not intended to be
restrictive upon the discretion of management.

     The Company  will seek one or more  potential  business  ventures  from its
known  sources,  but will rely heavily on personal  contacts of its officers and
directors as well as indirect  associations  between them and other business and
professional  people.  It is  not  anticipated  that  the  Company  will  engage
professional firms specializing in business acquisitions or reorganizations.  In
some  instances,  the Company may publish  notices or  advertisements  seeking a
potential business venture in financial or trade publications.

     The Company will not  restrict  its search for any specific  kind of firms,
but  may  acquire  a  venture  in its  preliminary  or  development  stage,  may
participate  in a business  which is already in  operation  or in a business  in
various stages of its corporate  existence.  It is impossible to predict at this
stage the status of any venture in which the Company  may  participate,  in that
the venture may need  additional  capital,  may merely desire to have its shares
publicly  traded,  or may seek other perceived  advantages which the Company may
offer. In some instances,  the business endeavors may involve the acquisition of
or merger with a corporation which does not need substantial additional cash but
which desires to establish a public trading market for its common stock.

     Firms which seek the Company's  participation in their operations through a
reorganization,  asset  acquisition,  or some other means may desire to do so to
avoid what such firms may deem to be adverse  factors  related to  undertaking a
public offering.  Such factors include  substantial time  requirements and legal
costs,  along with other  conditions  or  requirements  imposed by various state
laws.

     To a large  extent,  a  decision  to  participate  in a  specific  business
endeavor  may be made upon  management's  analysis  of the  quality of the other
firm's management and personnel,  the anticipated  acceptability of new products
or marketing concepts,  the merit of technological  changes,  and numerous other
factors  which  are  difficult,  if  not  impossible,  to  analyze  through  the
application of any objective criteria. In many instances, it is anticipated that
the results of a specific firm to date may not  necessarily be indicative of the
potential  for the future  because of the  requirement  to  substantially  shift
marketing approaches,  expand significantly,  change product emphasis, change or
substantially  augment  management,  and other factors.  Because the Company may
participate in business endeavors with newly organized firms or with firms which
are  entering  a new phase of their  growth,  it should be  emphasized  that the
Company will incur further risks since  management  in many  instances  will not
have proved its abilities or effectiveness, the eventual market of such firm's

                                                                               4

<PAGE>



product or services will likely not be established, and the profitability of the
firm will be unproved and cannot be predicted.

     The analysis of new business  endeavors  will be undertaken by or under the
supervision  of the  officers  and  directors,  none of  whom is a  professional
business  analyst.  No  member  of  management  has  any  significant   business
experience  or  expertise  in  any  type  of  business  which  is  likely  to be
investigated  by the Company.  Thus,  management  will have to rely on their own
common sense and business  judgment as well as upon the advice of consultants to
examine  the factors  described  herein.  The  mention of various  factors to be
looked at by management with regard to potential  business  endeavors should not
be read as implying any experience or expertise on behalf of  management.  These
are merely guidelines which stockholders  should know that management will go by
as they attempt to examine potential business ventures. In analyzing prospective
business  endeavors,  management  will  consider  such matters as the  available
technical,  financial and managerial  resources,  the working  capital and other
financial  requirements,  the history of operations,  if any;  prospects for the
future;  the  nature of  present  and  expected  competition;  the  quality  and
experience of management  services  which may be available and the depth of that
management; the potential for further research, development or exploration; risk
factors;  the potential for growth and expansion;  the potential for profit, the
perceived  public  recognition  or  acceptance of products,  services,  trade or
service marks; name identification; and other relevant factors.

     Generally,   the  Company  will  analyze  all  available   factors  in  the
circumstances  and make a  determination  based upon a  composite  of  available
facts, without reliance upon any single factor as controlling.

     It is anticipated that business  endeavors will be available to the Company
from  various  sources,  including  its  officers  and  directors,  professional
advisors,  securities  broker-dealers,   venture  capitalists,  members  of  the
financial community, and other who may present unsolicited proposals. In certain
circumstances,  the  Company  may agree to pay a  finder's  fee or to  otherwise
compensate  investment  banking or other  services  provided  by persons who are
unaffiliated  with the Company but who submit a potential  business  endeavor in
which the Company  participates.  No such finder's or other fees will be paid to
any person who is an officer,  director, owner of record or, to the knowledge of
the Company the owner  beneficially  of 10% or more of the Company's  issued and
outstanding stock, unless approval is received by majority vote of disinterested
shareholders.

     The Company may acquire a business  venture by conducting a  reorganization
involving the issuance of securities in the Company.  Due to the requirements of
certain provisions of the Internal Revenue Code of 1986 (as amended) in order to
obtain certain

                                                                               5

<PAGE>



beneficial tax consequences in such  reorganizations,  the number of shares held
by all of the present  shareholders of the Company prior to such  transaction or
reorganization,  including persons  purchasing  shares in this offering,  may be
substantially  less than the total outstanding  shares held by such shareholders
in any reorganized  entity. As noted above, such a transaction may be based upon
the  sole  determination  of  management  without  any vote or  approval  by the
shareholders  of the  Company.  The result of any such  reorganization  could be
additional   dilution  to  the   shareholders  of  the  Company  prior  to  such
reorganization.  If the Company were to issue substantial  additional securities
in any such  reorganization,  or  otherwise,  such  issuance may have an adverse
effect on any trading  market which may develop in the  Company's  securities in
the future.

     It is anticipated that the investigation of specific business endeavors and
the  negotiation,  drafting  and  execution of relevant  agreements,  disclosure
documents and other  instruments  will require  substantial  management time and
attention and  substantial  costs for  accountants,  attorneys and others.  If a
decision is made not to participate in a specific business  endeavor,  the costs
theretofore  incurred in the  related  investigation  would not be  recoverable.
Furthermore, even if an agreement is reached for the participation in a specific
business  venture,  the failure to consummate that transaction may result in the
loss to the Company of the related costs incurred.

     The Issuer has not yet engaged in any business activities.  The Company has
no formal  business plan or any particular  area of business in which it intends
to engage.  Management  of the Company  will attempt to acquire on behalf of the
Company  assets,  properties  and/or ongoing  businesses  which it believes have
potential  for  successful  development.  This may include  businesses or assets
related to manufacturing,  retail and wholesale sales,  industrial  development,
and  natural  resource  development  or any other  field of business or endeavor
which  Management of the Company may  encounter.  Management of the Company have
not  adopted any formal  business  plan or  conducted  any market  studies  with
respect to any business or industry.  No  representation is made that Management
of the Company have any  particular  expertise in  connection  with the proposed
activities  of the  Company  or  any  particular  industry  or  business  field.
Management of the Company may rely on independent  experts or consultants in any
business  field in  connection  with  their  examination  and  investigation  of
potential acquisitions.

     Management  intends  to send a letter to its  stockholders  every  time the
Company is  involved in a  transaction  or which  relates to an event  deemed by
management  to be  material  to the  Company.  This  would  include  a change in
management,  acquisition of substantial assets, or other similar matters such as
would also be disclosed by the Company on Form 8-K and/or  10-QSB filed with the
Securities and Exchange Commission.

                                                                               6

<PAGE>




     Management of the Company presently have no specific assets,  properties or
business  operation  which it has in mind for potential  acquisition nor does it
have any  particular  areas of  business or industry in which it intends to look
for such business acquisitions.

     In the acquisition of any given business the Company may incur  substantial
indebtedness  which will  substantially  change  the  capital  structure  of the
Company and would most likely  expose the  Company's  stockholders  to a greater
risk of loss in the event of financial difficulty.

Item 2.  Properties.
     The Issuer has no material assets except cash in the approximate  amount of
$996 at December 31, 1997.

Office Facilities and Employees

     The Company has no office  facilities of its own or employees.  The Company
uses the offices and various  office and  accounting  services of the  Company's
president. Such services and facilities are being provided for a fee of $100 per
month.

Item 3.  Legal Proceedings.

     There are not currently any material  pending legal  proceedings,  to which
the registrant is a party or of which any of its property is subject and no such
proceedings  are known to the registrant to be threatened or  contemplated by or
against it.

Item 4.  Submission of Matters to a Vote of Security Holders.

     No  matter  was  submitted  to a vote  of  the  security  holders,  through
solicitation  of proxies or otherwise  during the 4th quarter of the fiscal year
covered by this report.

                              PART II

Item 5.  Market for Common Equity and Related Stockholder Matters.

         (a)  Market Information.

         The registrant's  common stock has never been actively traded,  however
the common stock is eligible for quotation on the electronic bulletin board.

         (b)  Holders.

     The approximate  number of holders of the  registrant's  common stock as of
May 13, 1998 was 314.

         (c)  Dividends.

                                                                               7

<PAGE>



     The  registrant  has not  paid  any  cash  dividends  to date  and does not
anticipate or contemplate paying dividends in the foreseeable  future. It is the
present  intention  of  management  to  utilize  all  available  funds  for  the
development of the Company's business.

     The Company is authorized by its certificate of  incorporation  to issue up
to 50,000,000 shares of common stock, $.001 par value.

     One-third of the outstanding  shares of the Company's  common stock must be
present  at a duly  called  shareholders'  meeting  in order  to have a  quorum.
However, under Nevada law, amendments to the Company's articles of incorporation
and certain other matters require an affirmative  vote of at least a majority of
all outstanding shares.

     All shares of stock, when issued, will be fully-paid and nonassessable. All
shares are equal to each other with respect to voting,  liquidation and dividend
rights.  Holders  of shares of common  stock are  entitled  to one vote for each
share they own at any stockholders'  meeting.  Holders of shares of common stock
are  entitled  to receive  such  dividends  as may be  declared  by the Board of
Directors out of funds legally  available  therefor,  and upon  liquidation  are
entitled to participate  pro-rata in a distribution of assets available for such
a distribution to  stockholders.  There are no conversion,  pre-emptive or other
subscription rights or privileges with respect to any shares.  Reference is made
to the Company's Articles of Incorporation  together with the Amendments thereto
and its By-Laws as well as to the applicable statutes of the State of Nevada for
a more complete  description of the rights and  liabilities of holders of common
stock.  The common stock of the Company does not have  cumulative  voting rights
which  means  that the  holders  of more than 50% of the  shares  voting for the
election of directors may elect all of the directors if they choose to do so. In
such event, the holders of the remaining  shares  aggregating less than 50% will
not be able to elect any directors.

Item 6.  Management's Discussion and Analysis or Plan of Operation.

     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 $26,989 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.


                                                                               8

<PAGE>



           The  Company's  plan of  operation  is to actively  pursue a business
combination with an existing  business  operation.  The Company presently has no
business   combination   contemplated   but  intend  to  actively  seek  such  a
combination.

Item 7.  Financial Statements. See attached financial statements.

Item 8.  Changes In and Disagreements with Accountants on and Financial 
Disclosure.

           During  the two most  recent  fiscal  years,  there  has not been any
change in the principal independent accountant for the registrant, and there has
been no  disagreement  on any  matter of  accounting  principles  or  practices,
financial statement disclosure, or auditing scope or procedure.

                             PART III

Item 9.  Directors, Executive Officers, Promoters and Control
Persons; Compliance with Section 16(a) of the Exchange Act.

         (a) Identification of Directors.

      The current sole director of the registrant, who will serve until the next
annual meeting,  or until his successors are elected or appointed and qualified,
is set forth below:

                                         YEAR FIRST ELECTED
         NAME             AGE                AS DIRECTOR             POSITION

Gary B. Peterson          50               Since Inception           President,
                                                                     Secretary/
                                                                   Treasurer and
                                                                      Director


         (b) Identification of Executive Officers.

      Same as above.

         (c) Significant Employees.

      The registrant has no significant employees.

         (d) Family Relationships.

      None.

         (e) Business Experience.

         (1)  Background

                                                                               9

<PAGE>




     Gary B.  Peterson,  is  currently  associated  with the CPA firm of  Smith,
Peterson & Associates, LLC and was previously functioning as the chief financial
officer of Digitran  Systems,  Inc., a public company.  During 1995 and 1996, he
was the chief executive officer of Data Security Corporation,  a public company.
From 1982 through 1995,  Mr.  Peterson was the  shareholder/officer  in the Utah
C.P.A.  firm of  Peterson,  Siler &  Stevenson.  Mr.  Peterson is  qualified  to
practice as a CPA in California  and Utah and is a member of the Utah Society of
Certified  Public  Accountants  and the American  Institute  of CPA's.  Prior to
starting  his own  practice in 1982 he worked as a tax senior and  manager  with
Price Waterhouse & Company from 1972 to 1976, Touche Ross & Company from 1976 to
1977 and Charles Huber & Associates  from 1977 to 1978. Mr. Peterson worked as a
controller for Newbery  Engineering and Construction  Company from 1978 to 1982,
where  he was  responsible  for  all of the  company's  financial  matters.  Mr.
Peterson  graduated with honors from Brigham Young University in Provo,  Utah in
1972.  Mr.  Peterson has served as President  of Data Growth,  Inc.,  the parent
company of the Issuer since its  inception in January,  1986.  Mr.  Peterson has
served as a Director  and  Secretary-Treasurer  of Maxi  Group,  Inc,,  a public
blank-check company since its inception in June, 1986.

     (2) Directorships

     Except as  described  herein none of the  registrant's  directors,  nor any
person nominated or chosen to become a director holds any other directorships in
any other company with class of securities  registered pursuant to Section 12 of
the Exchange Act or subject to the  requirements of Section 15(d) of such Act or
any company registered as an investment company under the Investment Company Act
of 1940.

     (f)  Involvement in Certain Legal Proceedings.

     None of the officers or directors  have been involved in any material legal
proceedings  which occurred  within the last five years of any type as described
in Section 401(f) of Regulation S-K.

Item 10.  Executive Compensation.

         (a)  Cash Compensation.

     Other than the $100 per month being accrued to the Company's  president for
use of office  facilities and accounting  services,  during the last fiscal year
none of the registrant's officers or directors individually received any salary,
wage or other  compensation.  During  1996 a total of $1,200 was  accrued to the
Company's president pursuant to this arrangement. During the current fiscal year
the registrant  will continue this  arrangement  but has no present plans to pay
any other  compensation to officers or directors.  The Company also accrued fees
payable to the accounting firm of Peterson, Siler & Stevensen, of which the

                                                                              10
                    
<PAGE>



registrant's president was a managing partner during part of 1995, in the amount
of $3,310.00  for 1995,  for  accounting  services  rendered by such firm to the
registrant.

     (b)  Compensation Pursuant to Plans.

     There are  presently  no  ongoing  pension or other  plans or  arrangements
pursuant  to which  remuneration  is proposed to be paid in the future to any of
the officers and directors of the registrant.

     (c)  Other Compensation.

     None.

     (d)  Compensation to Directors.

         None.

Item 11.  Security Ownership of Certain Beneficial Owners &
          Management.

     The  following  table  sets forth the  beneficial  stock  ownership  of all
persons known by the  registrant to own more than 5% of the  outstanding  common
stock, and the officers and directors, both individually and as a group.

<TABLE>
<S>                              <C>                         <C>                             <C>    
Name and Address                                             Amount and Nature               Percent
 of Beneficial                  Position with                  of Beneficial                   of
    Owner                          Company                       Ownership                    Class
----------------                --------------               -------------------
Gary B. Peterson                 President,                  1,166,667 shares                2.9%
                                 Secretary/                  record & beneficial
                                 Treasurer &                 (1)(2)
                                 Director

Robert W. Mann,                                              37,500,000 shares               88.2%
Trustee, Robert W.
Mann Retirement
Trust



All officers and directors as
a group (1 person)                                           1,166,667 shares                 2.9%

</TABLE>

         (1) Mr. Peterson could also be deemed to beneficially own 76,667 shares
owned by two partnerships of which he is an affiliate.

         (2) Mr.  Peterson  has granted an option with  respect to  1,000,000 of
these shares. See "Certain Relationships and Related Transactions" below.


         Changes in Control.


                                                                              11
        
<PAGE>



      There are no arrangements including pledges by any person of securities of
the Company,  the operation of which may at a subsequent date result in a change
in control of the Company.

Item 12. Certain Relationships & Related Transactions.

         On or about March 31, 1993, the Robert W. Mann Retirement Trust, Robert
W. Mann, Trustee (of Los Angeles, California) acquired 35,000,000 Units from the
Company for $35,000.  The Units comprise 35,000,000  restricted shares of common
stock,  35,000,000 A Warrants  exercisable  at $.20 per share until December 31,
1993 and 35,000,000 B Warrants  exercisable at $.30 per share until December 31,
1993.  This  transaction  resulted in a shift in voting control to the Robert W.
Mann Retirement Trust. The funds will be used to pay current  liabilities and to
maintain the corporation.

         In  September  1995,  the  Robert W. Mann  Retirement  Trust  purchased
2,500,000  shares of common  stock from the Company  for $2500.  This was not an
arms-length transaction.

         In connection  with the foregoing,  Gary B. Peterson,  the sole officer
and  director  of the  Company  has  granted  an  option  to the  Robert W. Mann
Retirement Trust,  wherein said Trust has the right to purchase 1,000,000 shares
of the Company's  common stock from Mr.  Peterson for $50,000 within seven years
of March 31, 1993, or within two years of any acquisition by the Company.

      The founding stockholder of the Company, Data Growth, Inc., purchased from
the Company,  5,000,000  Units  comprising  an  aggregate  of 5,000,000  shares,
5,000,000 A Warrants, and 5,000,000 B Warrants for $50,000 in August, 1988.

      No officer,  director,  promoter or affiliate of the Issuer has any direct
or indirect material interest by security holdings,  contracts,  or otherwise in
the Issuer or any asset  proposed  to be  acquired  by the Is suer other than as
described herein.

      The Company has no office facilities of its own or employees.  The Company
uses the offices and various office  services of the Company's  president.  Such
services and facilities are being provided for a fee of $100 per month.

         The  Company  received  advances  from Data  Growth,  Inc.,  its former
parent,   which  are  being  treated  as  loans.  Such  advances  or  loans  are
interest-bearing  at the rate of 6% per annum and are  unsecured.  During  1996,
Data  Growth  transferred  the  right  to  receive  repayment  to the  Company's
president.  The  Company  was  also  indebted  for  accounting  services  to the
accounting firm which the Company's  president was formerly an officer of, which
receivable was also  transferred  to the Company's  president when he terminated
association  with such firm.  At  December  31,  1997,  $28,124  was owed to the
Company's president with respect to these debts.

                                                                              12

<PAGE>





Item 13.  Exhibits and Reports on Form 8-K.

     (a) The following documents are filed as a part of this report:
     1. Audited  Financial  Statements for the year ended December 31, 1997 and
1996 are included as part of this report.
     2. Financial Statement Schedules. None.
     3. Exhibits. None.

     Reports on Form 8-K.

     The  Company  filed no reports  on Form 8-K during the last  quarter of the
year ended December 31, 1997.



                                                                              13

<PAGE>


                                   SIGNATURES

         Pursuant to the  requirements of Section 12 of the Securities  Exchange
Act of 1934, the registrant  has duly caused this  registration  statement to be
signed on its behalf by the undersigned, thereunto duly authorized.

                                                            CAPITAL GROWTH, INC.



Date:      May 22 , 1998                                    /s/ Gary B. Peterson
      ------------------                                  ----------------------
                                                    Gary B. Peterson, President,
                                                    Chief Executive Officer, and
                                                         Chief Financial Officer



         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
this  report has been  signed  below by the  following  persons on behalf of the
registrant and in the capacities and on the dates indicated.



Date:      May 22, 1998                                     /s/ Gary B. Peterson
      --------------------                                ----------------------
                                                      Gary B. Peterson, Director










<PAGE>





                                                            CAPITAL GROWTH, INC.
                                                   (A Development Stage Company)
                                                                           Index

--------------------------------------------------------------------------------



                                                                           Page


Independent auditors' report                                                F-1


Balance sheet, December 31, 1997 and 1996                                   F-2


Statement of operations for the years
ended December 31, 1997 and 1996 and
cumulative amounts since inception                                          F-3


Statement of stockholders' deficit
from inception through December 31,
1997                                                                        F-4


Statement of cash flows for the years
ended December 31, 1997 and 1996 and
cumulative amounts since inception                                          F-6


Notes to financial statements                                               F-7

--------------------------------------------------------------------------------



<PAGE>



                                                    INDEPENDENT AUDITORS' REPORT





To the Board of Directors of
Capital Growth, Inc.


We have audited the  accompanying  balance  sheet of Capital  Growth,  Inc.,  (a
development  stage  company) as of December  31, 1997 and 1996,  and the related
statements  of  operations,  stockholders'  deficit and cash flows for the years
then ended and the  cumulative  amounts from March 28, 1988 (date of inception).
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  generally   accepted  auditing
standards.  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  referred to above present fairly, in
all material  respects,  the  financial  position of Capital  Growth,  Inc.,  (a
development  stage company) at December 31, 1997 and 1996 and the results of its
operations  and its cash flows for the years then ended and  cumulative  amounts
from March 28, 1988 (date of inception) in conformity  with  generally  accepted
accounting principles.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in  Note 2 to the
financial  statements,  the  Company  has  suffered  recurring  losses and has a
stockholders'  deficit.  These  conditions  raise  substantial  doubt  about its
ability to continue  as a going  concern.  Management's  plans  regarding  those
matters also are  described in Note 2. The  financial  statements do not include
any adjustments that might result from the outcome of this uncertainty.


                                             TANNER+Co.


Salt Lake City, Utah
March 13, 1998

                                                                             F-1

<PAGE>


                                                            CAPITAL GROWTH, INC.
                                                   (A Development Stage Company)

                                                                   Balance Sheet
                                                                    December 31,
--------------------------------------------------------------------------------


<TABLE>
<S>                                                                    <C>               <C>              




              Assets                                                         1997              1996
              ------                                                                               
                                                                       -----------------------------------

Current assets -
     cash                                                              $             996 $             310
                                                                       -----------------------------------

----------------------------------------------------------------------------------------------------------

                                                                       -----------------------------------
              Liabilities and Stockholders' Deficit

Current liabilities:
     Related party payable                                             $          30,898 $          28,124
     Accounts payable                                                                850                 -
                                                                       -----------------------------------

                  Total current liabilities                                       31,748            28,124
                                                                       -----------------------------------

Stockholders' deficit:
     Common stock; $.001 par value; 50,000,000 shares authorized, 48,000,000 and
       44,500,000  shares  issued and  outstanding  as of December  31, 1997 and
       1996,
       respectively                                                               48,000            44,500
     Additional paid-in capital                                                   18,102            18,102
     Accumulated deficit                                                         (96,854)          (90,416)
                                                                       -----------------------------------

                  Total stockholders' deficit                                    (30,752)          (27,814)
                                                                       -----------------------------------

                  Total liabilities and stockholders' deficit          $             996 $             310
                                                                       -----------------------------------





----------------------------------------------------------------------------------------------------------


See accompanying notes to financial statements.
                                                                                                       F-2
</TABLE>

<PAGE>


<TABLE>
<S>                                                  <C>               <C>              <C>               
                                                                                      CAPITAL GROWTH, INC.
                                                                             (A Development Stage Company)

                                                                                   Statement of Operations

                                                           Years Ended December 31, and Cumulative Amounts
----------------------------------------------------------------------------------------------------------






                                                                                            Cumulative
                                                                                             Amounts
                                                                                              Since
                                                            1997             1996           Inception
                                                     -----------------------------------------------------

Revenue - interest income                            $              -  $             -  $            2,471
                                                     -----------------------------------------------------

Expenses:
     Professional fees                                            3,153              389            64,168
     Administrative expenses                                      3,285            4,370            31,671
     Amortization of organization costs                               -                -             2,136
                                                     -----------------------------------------------------

              Total expenses                                      6,438            4,759            97,975
                                                     -----------------------------------------------------

Loss before income taxes                                         (6,438)          (4,759)          (95,504)

Income taxes - current                                                -                -              (600)
                                                     -----------------------------------------------------

Net loss                                             $           (6,438) $        (4,759) $        (96,104)
                                                     -----------------------------------------------------

Loss per share                                       $             (.00) $          (.00) $           (.00)
                                                     -----------------------------------------------------






----------------------------------------------------------------------------------------------------------


See accompanying notes to financial statements.
                                                                                                       F-3
</TABLE>

<PAGE>

<TABLE>
<S>                                 <C>               <C>               <C>              <C>              
                                                                                      CAPITAL GROWTH, INC.
                                                                             (A Development Stage Company)
                                                                        Statement of Stockholders' Deficit

                                                                          From Inception on March 28, 1988
                                                                                 Through December 31, 1997
----------------------------------------------------------------------------------------------------------




                                                                          Additional
                                               Common Stock                 Paid-In        Accumulated
                                    -----------------------------------
                                         Shares            Amount           Capital          Deficit
                                    ----------------------------------------------------------------------

Balance, March 28, 1988                             - $               - $              - $               -

Shares issued to initial
stockholder for cash, August
1988 at $.001 per share                     5,000,000             5,000           21,266                 -

Net loss for the period ended
December 31, 1988                                   -                 -                -              (649)
                                    ----------------------------------------------------------------------

Balance, December 31, 1988                  5,000,000             5,000           21,266              (649)

Offering costs incurred during
1989                                                -                 -           (3,164)                -

Net loss for the year ended
December 31, 1989                                   -                 -                -           (16,406)
                                    ----------------------------------------------------------------------

Balance, December 31, 1989                  5,000,000             5,000           18,102           (17,055)

Net loss for the year ended
December 31, 1990                                   -                 -                -           (11,228)
                                    ----------------------------------------------------------------------

Balance, December 31, 1990                  5,000,000             5,000           18,102           (28,283)

Net loss for the year ended
December 31, 1991                                   -                 -                -           (13,188)
                                    ----------------------------------------------------------------------

Balance, December 31, 1991                  5,000,000             5,000           18,102           (41,471)

Net loss for the year ended
December 31, 1992                                   -                 -                -            (8,448)
                                    ----------------------------------------------------------------------

Balance, December 31, 1992                  5,000,000             5,000           18,102            49,919

Stock issued in private
placement for cash March
1993 at $.001 per share                    35,000,000            35,000                -                 -



See accompanying notes to financial statements.
                                                                                                       F-4
</TABLE>

<PAGE>
<TABLE>
<S>                                 <C>               <C>               <C>              <C>              
                                                                                      CAPITAL GROWTH, INC.
                                                                             (A Development Stage Company)
                                                                        Statement of Stockholders' Deficit
                                                                                                 Continued

-------------------------------------------------------------------------------------------------------------------



                                                                          Additional
                                               Common Stock                 Paid-In        Accumulated
                                    -----------------------------------
                                         Shares            Amount           Capital          Deficit
                                    ----------------------------------------------------------------------

Net loss for the year ended
December 31, 1993                                   -                 -                -           (14,069)
                                    ----------------------------------------------------------------------

Balance, December 31, 1993                 40,000,000            40,000           18,102           (63,988)

Net loss for the year ended
December 31, 1994                                   -                 -                -           (13,550)
                                    ----------------------------------------------------------------------

Balance, December 31, 1994                 40,000,000            40,000           18,102           (77,538)

Stock issued in private
placement for cash September
1995 at $.001 per share                     2,500,000             2,500                -                 -

Net loss for the year ended
December 31, 1995                                   -                 -                -            (8,119)
                                    ----------------------------------------------------------------------

Balance, December 31, 1995                 42,500,000            42,500           18,102           (85,657)

Stock issued in private
placement for cash August
1996 at $.001 per share                     2,000,000             2,000                -                 -

Net loss for the year ended
December 31, 1996                                   -                 -                -            (4,759)
                                    ----------------------------------------------------------------------

Balance, December 31, 1996                 44,500,000            44,500           18,102           (90,416)

Stock issued in private
placement for cash February
1997 at $.001 per share                     3,500,000             3,500                -                 -

Net loss for the year ended
December 31, 1997                                   -                 -                -            (6,438)
                                    ----------------------------------------------------------------------

Balance, December 31, 1997                 48,000,000 $          48,000 $         18,102 $         (96,854)
                                    ----------------------------------------------------------------------

See accompanying notes to financial statements.
                                                                                                       F-5
</TABLE>



<PAGE>
<TABLE>
<S>                                                  <C>                 <C>                <C>

                                                                                      CAPITAL GROWTH, INC.
                                                                             (A Development Stage Company)
                                                                                   Statement of Cash Flows

                                                           Years Ended December 31, and Cumulative Amounts
----------------------------------------------------------------------------------------------------------




                                                                                            Cumulative
                                                                                             Amounts
                                                                                              Since
                                                            1997             1996           Inception
                                                     -----------------------------------------------------
Cash flows from operating activities:
     Net loss                                        $           (6,438) $          (4,759) $      (96,854)
     Adjustments to reconcile net loss to
       net cash used in operating activities:
         Amortization expense                                         -                -             2,136
         Increase in organization costs                               -                -            (2,136)
         Increase in:
              Accounts payable                                      750                -            10,782
              Income taxes payable                                  100                -               200
                                                     -----------------------------------------------------

                  Net cash used in
                  operating activities                           (5,588)          (4,759)          (85,872)
                                                     -----------------------------------------------------

Cash flows from investing activities -
     related party payable                                        2,774            2,268            20,766
                                                     -----------------------------------------------------

Cash flows from financing activities:
     Proceeds from issuance of common stock                       3,500            2,000            93,000
     Public offering costs                                            -                -           (26,898)
                                                     -----------------------------------------------------

                  Net cash provided by
                  financing activities                            3,500            2,000            66,102
                                                     -----------------------------------------------------

Net increase (decrease) in cash                                     686             (491)              996

Cash, beginning of period                                           310              801                 -
                                                     -----------------------------------------------------

Cash, end of period                                  $              996 $            310 $             996
                                                     -----------------------------------------------------






----------------------------------------------------------------------------------------------------------


See accompanying notes to financial statements.
                                                                                                       F-6
</TABLE>

<PAGE>


                                                            CAPITAL GROWTH, INC.
                                                   (A Development Stage Company)

                                                   Notes to Financial Statements
                                                      December 31, 1997 and 1996
--------------------------------------------------------------------------------


1.   Summary of Significant Accounting Policies
The  Company  was  organized  under the laws of the state of Nevada on March 28,
1988 and has designated  December 31 as its fiscal year end. The Company has not
commenced  planned  principal  operations and purposes to seek business ventures
which will allow for  long-term  growth.  Further,  the Company is  considered a
development  stage  company  as  defined  in SFAS No. 7 and has not,  thus  far,
engaged in business  activities  of any kind.  Its  principal  activities  since
inception  have  consisted  of the  offer  and  sale  of  common  stock  and the
engagement  of legal  counsel  and  other  professionals  in  connection  with a
proposed  public offering of additional  common shares.  The Company has, at the
present time,  not paid any dividends and any dividends  that may be paid in the
future  will  depend upon the  financial  requirements  of the Company and other
relevant factors.


Cash and Cash Equivalents
Cash  equivalents are generally  comprised of certain highly liquid  investments
with maturities of less than three months.


Loss Per Share
The  computation  of loss per  share of  common  stock is based on the  weighted
average  number  of  shares  outstanding  as of  December  31,  1997  and  1996,
respectively.  Common shares  issuable upon exercise of stock purchase  warrants
and stock  options  are not  included  in the per share  computation  when their
effect would be antidilutive.


Use of Estimates in the  Preparation of Financial  Statements 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-7

<PAGE>
                                                            CAPITAL GROWTH, INC.
                                                   (A Development Stage Company)
                                                   Notes to Financial Statements
                                                                       Continued

--------------------------------------------------------------------------------

2.   Going Concern
The  accompanying  financial  statements  of  Capital  Growth,  Inc.,  have been
prepared on a going-concern basis, which contemplates  profitable operations and
the  satisfaction  of  liabilities  in the normal course of business.  There are
uncertainties  that raise  substantial doubt about the ability of the Company to
continue  as a going  concern.  As shown in the  statement  of  operations,  the
Company has had no revenues from  operations,  reported a net loss of $6,438 for
the  year  ended  December  31,  1997  and  as  of  December  31,  1997,  has  a
stockholders' deficit of $30,752.


The Company's  continuation  as a going concern is dependent upon its ability to
satisfactorily  meet its debt  obligations,  secure  adequate new  financing and
generate  sufficient  cash flows from  operations to meet its  obligations.  The
financial  statements do not include any adjustments  that might result from the
outcome of these uncertainties.


Management  has entered  into a plan where it is pursuing  other  financing  and
searching for additional business opportunities.  It is not known if the Company
will be successful.


3.   Income Taxes
The difference  between income taxes at statutory rates and the amount presented
in the financial statements is a result of the following:


                                           Years Ended
                                          December 31,         Cumulative
                                    -------------------------
                                        1997         1996       Amounts
                                    ---------------------------------------

Income tax benefit at statutory
  rate                              $       1,000 $     1,000 $     32,000
Change in valuation allowance              (1,000)     (1,000)      (32,000)
                                    ---------------------------------------

                                    $             $           $           -
                                    ---------------------------------------



--------------------------------------------------------------------------------


                                                                             F-8

<PAGE>
                                                            CAPITAL GROWTH, INC.
                                                   (A Development Stage Company)
                                                   Notes to Financial Statements
                                                                       Continued

--------------------------------------------------------------------------------



3.   Income Taxes Continued
Deferred tax assets are as follows:


                                                               December 31,
                                                           1997            1996
                                            -----------------------------------

Operating loss carryforwards                $           32,000 $         31,000
Valuation allowance                                    (32,000)         (31,000)
                                             -----------------------------------

                                            $                - $              -
                                             -----------------------------------



The Company has net operating loss carryforwards of approximately $95,000, which
begin to expire in the year 2003. The amount of net operating loss  carryforward
that can be used in any one year will be limited by  significant  changes in the
ownership of the Company and by the  applicable  tax laws which are in effect at
the time such carryforwards can be utilized.


4.   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 year ended December 31, 1997 and 1996,  the Company  incurred
expenses under the agreement of $1,200 and $1,200, respectively. In addition, on
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 December  31, 1997 and 1996,  the Company owed $12,532 and $11,332,
respectively to the individual.


The  Company  has agreed to pay  interest  expense  at 6% to its  former  parent
company,  Data Growth,  Inc.  The loans,  on which  interest  was charged,  were
advances to the Company by its former parent.  On September 17, 1996, the amount
owing  to the  former  parent  was  transferred  to an  officer,  director,  and
shareholder  of the Company.  In addition,  during  1997,  the officer  advanced
approximately  $538 to the Company.  At December 31, 1997 and 1996,  the Company
owed $18,366 and $16,792, respectively, to the officer.


--------------------------------------------------------------------------------


                                                                             F-9

<PAGE>


                                                            CAPITAL GROWTH, INC.
                                                   (A Development Stage Company)
                                                   Notes to Financial Statements
                                                                       Continued

--------------------------------------------------------------------------------



4.   Related Party Transactions Continued
During  the year ended  December  31,  1997 and 1996,  a  principal  shareholder
purchased additional stock at par value for $3,500 and $2,000, respectively.


5.   Supplemental Cash Flow Information
The Company has not paid any amounts  for  interest or income  taxes  during the
years ended December 31, 1997 and 1996, and since inception.


6.   Earnings Per Share
In February 1997, the Financial  Accounting  Standards Board issued Statement of
Financial  Accounting  Standards No. 128 (SFAS 128)  "Earnings Per Share," which
requires  companies  to  present  basic  earnings  per share  (EPS) and  diluted
earnings per share,  instead of the primary and fully  diluted EPS as previously
required. The new standard also requires additional  informational  disclosures,
and makes certain  modifications  to the previously  applicable EPS calculations
defined in Accounting  Principles  Board No. 15. The new standard is required to
be adopted by all public  companies for reporting  periods ending after December
15, 1997, and requires restatement of EPS for all prior periods reported. During
the year ended December 31, 1997, the Company adopted this standard.


--------------------------------------------------------------------------------


                                                                            F-10

<PAGE>


                                                            CAPITAL GROWTH, INC.
                                                   (A Development Stage Company)
                                                   Notes to Financial Statements
                                                                       Continued

--------------------------------------------------------------------------------




6.   Earnings Per Share Continued
Earnings per share information in accordance with SFAS 128 is as follows:


                                                    Year Ended December 31, 1997
                                 -----------------------------------------------
                                       Loss           Shares        Per-Share
                                   (Numerator)     (Denominator)      Amount
                                 -----------------------------------------------

Net loss                         $         (6,438)
Less preferred stock
  dividends                                     -
                                 ----------------
Basic EPS
Loss available to
  common stockholders                      (6,438)    47,708,000  $        (.00)
                                                                  --------------
Effect of Dilutive Securities
Stock options                                   -              -
                                 -------------------------------
Diluted EPS
Loss available to common
  stockholders plus assumed
  conversions                    $         (6,438)    47,708,000  $        (.00)
                                 -----------------------------------------------




                                                    Year Ended December 31, 1996
                                 -----------------------------------------------
                                       Loss           Shares        Per-Share
                                   (Numerator)     (Denominator)      Amount
                                 -----------------------------------------------

Net loss                         $         (4,759)
Less preferred stock
  dividends                                     -
                                 ----------------
Basic EPS
Loss available to
  common stockholders                      (4,759)    43,166,000  $        (.00)
                                                                  --------------
Effect of Dilutive Securities
Stock options                                   -              -
                                 -------------------------------
Diluted EPS
Loss available to common
  stockholders plus assumed
  conversions                    $         (4,759)    43,166,000  $        (.00)
                                 -----------------------------------------------



--------------------------------------------------------------------------------


                                                                            F-11

<PAGE>


                                                            CAPITAL GROWTH, INC.
                                                   (A Development Stage Company)
                                                   Notes to Financial Statements
                                                                       Continued

--------------------------------------------------------------------------------


6.   Earnings Per Share Continued

                                               Cumulative Amounts
                                 -----------------------------------------------
                                       Loss           Shares        Per-Share
                                   (Numerator)     (Denominator)      Amount
                                 -----------------------------------------------

Net loss                         $        (96,854)
Less preferred stock
  dividends                                     -
                                 ----------------
Basic EPS
Loss available to
  common stockholders                     (96,854)    24,045,000  $        (.00)
                                                                  --------------
Effect of Dilutive Securities
Stock options                                   -              -
                                 -------------------------------
Diluted EPS
Loss available to common
  stockholders plus assumed
  conversions                    $        (96,854)    24,045,000  $        (.00)
                                 -----------------------------------------------



--------------------------------------------------------------------------------


                                                                            F-12
<PAGE>