annual2016s1edited.htm - Generated by SEC Publisher for SEC Filing

Dear Shareholders:

I am pleased to deliver to you the American Growth Fund Series One Annual Report

for the year ending July 31, 2016.

Investment Strategy

We use a fundamental top down approach to manage your portfolio. First we look at

the general economic outlook, then we look at the industries that we feel have the biggest

growth potential in the current economy. From that, our objective is to choose the best

companies in those industries. Many of the stocks in your portfolio are household names that

you will easily recognize.

Performance Overview

Your American Growth Fund Series One Class A Shares delivered you a (2.22)%

return since July 31, 2015 through close of business on July 31, 2016. The Dow Jones

Industrial Average posted a gain of 7.01% since July 31, 2015 through close of business on

July 31, 2016 while the S&P 500 posted a gain of 5.62% since July 31, 2015 through close of

business on July 31, 2016. Additional data, including long-term performance data, can be found

on page 32 of this report. Past performance is no guarantee of future results.

Manager’s Discussion

The American economy continues to improve, evidenced by the gross domestic

product (GDP) increase of 1.1% in the second quarter of 2016. This is according to the second

estimate released by the Bureau of Economic Analysis¹. “The increase in real GDP in the

second quarter primarily reflected positive contributions from personal consumption

expenditures (PCE) and exports that were partly offset by negative contributions from private

inventory investment, residential fixed investment, state and local government spending and

nonresidential fixed investment. Imports, which are a subtraction in the calculation of GDP,

increased.” Additionally, unemployment has remained stable 4.9%²in July of 2016². The

Federal Reserve Bank continues to keep policy in place that will stimulate the growth of the

economy. As the economy continues to improves, the FED in the past has helped to control

inflationary rates so that the US economy will continue its path of recovery. There are still

challenges ahead which may dampen our growth rate:

• dollar value against the world currency

• price of oil and how it effects the world economy

• the upcoming elections

• the European economy

• the Chinese economy

• Brittan leaving the European Union

1. Assumes a hypothetical initial investment on the business day before the first day of the fiscal period with all
dividends and distributions reinvested in additional shares on the reinvestment date and redemption at the net asset
value calculated on the last business day of the fiscal period. Sales charges are not reflected in total returns.
2. The lesser of purchases and sales of portfolio securities for a period, divided by the monthly average of the market
value of securities owned during the period. Securities with a maturity or expiration date at the time of acquisition of one
year or less are excluded from the calculation. Purchases and sales of investment securities (other than short-term
securities) for the year ended July 31, 2016, aggregated $400,574 and $1,867,472, respectively.
3. Amount less than 0.5%.
4. Per share amounts have been calculated using the Average Shares Method.

See accompanying notes to financial statements.

shareholders. These payments resulted in these affiliated companies earning profits totaling World Capital Brokerage, Inc.
$5,519, Investment Research Corporation $(67,892), and AGF Properties, Inc. $11,029.

To the Board of Directors and
Shareholders of
American Growth Fund, Inc. Series One

We have audited the accompanying statement of assets and liabilities of American Growth Fund, Inc., Series One (the “Fund”), a
series of American Growth Fund, Inc., including the statement of investments, as of July 31, 2016, and the related statement of
operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and
the financial highlights for each of the five years in the period then. These financial statements and financial highlights are the
responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial
highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).
Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements
and financial highlights are free of material misstatement. The Fund is not required to have, nor were we engaged to perform, an
audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as
a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on
the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion. An audit
includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures
included confirmation of securities owned as of July 31, 2016, by correspondence with the custodian. 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 and financial highlights referred to above present fairly, in all material respects, the
financial position of American Growth Fund, Inc. Series One as of July 31, 2016, the results of its operations for the year then
ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the
five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.

BOARD APPROVAL OF INVESTMENT ADVISORY AGREEMENT (Unaudited)

Meeting of the Board of Directors Held on September 22, 2016

At a regular meeting of the Board of Directors (the “Board”) held on September 22, 2016 (the “meeting”),
the Board, including a majority of the Directors who are not interested persons of the Board (the
“Independent Directors”), considered the approval for another year of the investment advisory agreement
(the “Agreement”) between Investment Research Corporation (the “Adviser”) and American Growth Fund,
Inc. (the “Fund”).

In connection with its review and approval of the Agreement for another year at the Meeting, the
Independent Directors present considered materials furnished by the Adviser, including information about,
but not limited to, the Adviser’s personnel, operations and financial condition. The Independent Directors
also submitted questions to the Adviser prior to the Meeting. At the Meeting, representatives from the
Adviser presented information to the Board regarding the Adviser and the Series One Fund and
responded to questions from the Board.

Matters considered by the Board, including the Independent Directors, at the Meeting in connection with
its re-approval of the Agreement included the following:

Performance. The Board reviewed American Growth Fund’s investment performance reports, which
compared the performance of Series One with several other mutual funds with generally similar
investment strategies, at least in part, over various time periods, as well as with the Series One Fund’s
benchmark index, the S&P 500 (the “S&P 500”), and discussed these reports with representatives of the
Adviser. The Board and the Independent Directors considered Series One’s comparative performance for
three months, six months, one year, three year and five year periods. The Board noted and discussed
Series One’s long term superior performance to some of the other comparable funds and the S&P 500 as
well as its comparable performance in the shorter and medium term reports. Based upon the foregoing
and other information provided by the Adviser, the Board, including a majority of the Independent
Directors, concluded that the Series One Fund’s prior investment performance under the Adviser’s
direction, as well as the outlook for future performance, were satisfactory.

Nature, Extent and Quality of Services. The Directors noted that the Fund is an actively managed fund
requiring the attention of, and direction by, the Adviser and that the Adviser currently manages
approximately $16.7 million in assets for the Fund (both Series One and Two combined). The Directors
discussed the nature of the Adviser’s operations and considered the long-term tenure and industry
experience of the Adviser’s professional investment management staff. The Board also reviewed the
Adviser’s investment strategy, research capabilities and analytical methodology that it utilizes in selecting
investments for the Series One Fund. The Directors also discussed the Adviser’s recent enhancements to
its compliance procedures. The Board then concluded that the Adviser had sufficient depth of personnel,
experience, resources, and investment and compliance processes to provide sufficient quality services to
the Fund.

Cost of Services and Profitability. The Board noted that the Agreement requires the Series One Fund
to pay the Adviser an annual fee of approximately 1% of the Fund’s average net assets up to a “break
point” at $30,000,000 at which point the fee is reduced to 3/4ths of 1% for any assets under management
in excess of $30,000,000. The Board also noted that, in addition to the 1% advisory fee, which amounted
to $142,413 for the year from Series One, both the Series One and Series Two Funds shared certain

operating costs with the Adviser and that affiliates of the Adviser received additional revenue from the
Fund for distributing the Fund’s shares and for office rent. The Board, including the Independent Directors,
specifically considered the profits realized by the Adviser and its affiliates in relation to the operation of the
Fund and determined that such profits were not excessive. In making this determination, they relied upon
an analysis of the profitability of the Fund’s business to the Adviser and its affiliates provided by the
Adviser. Based on all of this information, the Independent Directors concluded that the advisory fees
charged under the Agreement and the other amounts paid to the Adviser and its affiliates are fair and
reasonable under the circumstances.

Economies of Scale. After discussion, it was the consensus of the Board and the Independent Directors
that the Fund had not reached an asset level where any material economies of scale were being realized
by the Adviser that could be shared with the Fund. The Board specifically noted the existence of the
“break point” on advisory fees in the Agreement.

Conclusion. During the Board’s deliberations, neither the Board nor the Independent Directors identified
any single piece of information that was all important or controlling with respect to their evaluation of the
fairness of the Agreement to the Series One Fund. The Board did, however, determine that it had
received such information from the Adviser as was reasonably necessary to evaluate the terms of the
Agreement, including answers to the questions raised by the Independent Directors before and during the
Meeting as well as the assistance of legal counsel present at the Meeting. Accordingly, the Board,
including all of the Independent Directors, unanimously concluded that the terms of the Agreement were
fair and reasonable to the Series One Fund and, in the exercise of the Directors’ reasonable business
judgment, determined that the Agreement with the Adviser should be continued for another year.

HYPOTHETICAL PERFORMANCE CHARTS (unaudited)
The following charts compare the change in value of a $10,000 investment in the American Growth Fund versus the
Value Line Composite Index. Returns reflect a sales load for Class A and D while Class B and C are without a sales
load.
Performance data quoted represents past performance and is no guarantee of future results. The investment return
and principal value of an investment will fluctuate, so that an investor’s shares, when redeemed, may be worth more or
less than their original cost. The graph and table do not reflect the deduction of taxes that a shareholder would pay on
fund distributions or the redemption of fund shares. Current performance data to the most recent month end can be
obtained by calling 1-800-525-2406.