-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PahPSqBAES4Q931r2DEwiPb8/O/tFVg8O16dxO+z4qkWuTHKjI5Whyn3I46pNqiT 0FM96R+WyA8qRXMl0nELTA== 0000950147-96-000567.txt : 19961121 0000950147-96-000567.hdr.sgml : 19961121 ACCESSION NUMBER: 0000950147-96-000567 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19961119 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: FBR CAPITAL CORP /NV/ CENTRAL INDEX KEY: 0000836937 STANDARD INDUSTRIAL CLASSIFICATION: PERFUMES, COSMETICS & OTHER TOILET PREPARATIONS [2844] IRS NUMBER: 133465289 STATE OF INCORPORATION: NV FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 033-58694 FILM NUMBER: 96669301 BUSINESS ADDRESS: STREET 1: 15 EXECUTIVE BLVD CITY: ORANGE STATE: CT ZIP: 06477 BUSINESS PHONE: 2037994609 MAIL ADDRESS: STREET 1: 15 EXECUTIVE BLVD CITY: ORANGE STATE: CT ZIP: 06477 FORMER COMPANY: FORMER CONFORMED NAME: BARRIE RICHARD FRAGRANCES INC DATE OF NAME CHANGE: 19920703 10QSB 1 QUARTERLY REPORT U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB X Quarterly report pursuant to Section 13 or 15(d) of the Securities - ----- Exchange Act of 1934 For the quarterly period ended September 30, 1996 Transition report pursuant to Section 13 or 15(d) of the Securities - ----- Exchange Act of 1934 For the transition period from _______________ to _______________ Commission File number 1-10320 --------- FBR Capital Corporation ----------------------- (Exact Name of Small Business Issuer as Specified in its Charter) Nevada 13-3465289 ------ ---------- (State of Other Jurisdiction of (I.R.S. Employer Incorporation of Organization) Identification No.) 14988 North 78th Way, Suite 203, Scottsdale, Arizona 85260 ---------------------------------------------------------- (Address of Principal Executive Offices) (602)483-1466 ---------------------------------------------------------- (Issuer's Telephone Number Including Area Code - -------------------------------------------------------------------------------- (Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report Check whether the issuer: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ----- ----- State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: At November 13, 1996, Issuer had outstanding 4,648,205 shares of Common Stock, par value $.005 per share. Transitional Small Business Disclosure Format: Yes No X ----- ----- Page 1 of 11 Total Pages Exhibit Index - None PART 1. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS FBR CAPITAL CORPORATION (Formerly Richard Barrie Fragrances, Inc.) BALANCE SHEETS
September 30 June 30 ASSETS 1996 1996 ---- ---- (Unaudited) CURRENT ASSETS: Cash and cash equivalents $ 181,646 $ 61,871 Investment in U.S. Government Treasury Bills 399,559 - Investment in common stock of Parlux Fragrances, Inc. 1,757,500 3,746,250 Receivable from acquiror of discontinued operations - 750,000 Other current assets 13,969 6,991 ------------ ------------- TOTAL ASSETS $ 2,352,674 $ 4,565,112 ============ ============= LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT) CURRENT LIABILITIES: Accounts payable $ 31,137 $ 121,789 Accrued expenses 90,770 180,417 Convertible notes payable 117,000 117,000 ------------ ------------- Total current liabilities 238,907 419,206 ------------ ------------- SERIES A REDEEMABLE PREFERRED STOCK: $.01 par value; 529 shares authorized; 517 shares issued and outstanding; at liquidation value of $5,600 per share 2,895,200 2,895,200 ------------ ------------- STOCKHOLDERS' EQUITY (DEFICIT): Preferred stock, $.01 par value; 10,000,000 shares authorized; no shares outstanding except 517 shares issued as Series A Redeemable Preferred Stock Common stock, $.005 par value; 16,777,667 shares authorized; 4,636,698 shares issued and outstanding 23,183 23,183 Additional paid-in capital 7,241,768 7,241,768 Accumulated deficit (6,057,634) (6,014,245) Unrealized loss on investment (1,988,750) - ------------ ------------- Total stockholders' equity (deficit) (781,433) 1,250,706 ------------ ------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) $ 2,352,674 $ 4,565,112 ============ =============
The accompanying notes are an integral part of these balance sheets. -2- FBR CAPITAL CORPORATION (Formerly Richard Barrie Fragrances, Inc.) STATEMENTS OF OPERATIONS THREE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995 (Unaudited)
1996 1995 ---- ---- Operating expenses $ (43,248) $ - ------------ ------------- Loss from operations (43,248) - ------------ ------------- Other income (expense): Interest expense (4,424) - Interest income 4,283 - ------------ ------------- Other income (expense), net (141) - Income from discontinued operations - 43,154 ------------ ------------- Net income (loss) $ (43,389) $ 43,154 ============ ============= Earnings per common share and common share equivalents: Loss per share from continued operations $ (.01) $ - Income per share from discontinued operations - .01 ------------ ------------- Net earnings (loss) per share $ (.01) $ .01 ============ ============= Weighted average common share and common share equivalents outstanding 4,636,698 4,419,548 ============ =============
The accompanying notes are an integral part of these statements. -3- FBR CAPITAL CORPORATION (Formerly Richard Barrie Fragrances, Inc.) STATEMENTS OF CASH FLOWS THREE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995 (Unaudited)
1996 1995 ---- ---- CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (43,389) $ - ----------- ----------- Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation - 124,229 Discontinued operations - 43,154 (Increase) decrease in: Accounts receivable - (710,842) Inventories - 555,782 Other assets (6,978) (412,785) Increase (decrease) in: Accounts payable and accrued expenses (180,299) 413,083 ----------- ----------- Total adjustments (187,277) 12,621 ----------- ----------- Net cash used in continuing operations (187,277) (30,533) Net cash provided by discontinued operations - 43,154 ----------- ----------- Net cash provided by (used in) operating activities (187,277) 12,621 ----------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES: Receipts of amount due from acquiror of discontinued operations 750,000 - Investment in U.S. Government Treasury Bills (399,599) - Purchase of property and equipment - (33,118) ----------- ------------ Net cash provided by (used in) investing activities 350,401 (33,118) ----------- ----------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 181,646 (20,497) CASH AND CASH EQUIVALENTS, beginning of period 61,871 339,715 ----------- ----------- CASH AND CASH EQUIVALENTS, end of period $ 581,205 $ 319,218 =========== ===========
The accompanying notes are an integral part of these statements. -4- FBR CAPITAL CORPORATION (Formerly Richard Barrie Fragrances, Inc.) NOTES TO FINANCIAL STATEMENTS THREE MONTHS ENDED SEPTEMBER 30, 1996 (Unaudited) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and the instructions to Form 10-QSB. Accordingly, they do not include all the information and footnotes required by Generally Accepted Accounting Principles ("GAAP") for complete financial statements. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary for a fair presentation of the results for the interim periods presented have been made. The results for the three month period ended September 30, 1996 may not be indicative of the results for the entire year. These financial statements should be read in conjunction with the Company's Annual Report on Form 10-KSB for the fiscal year ended June 30, 1996. Cash and Cash Equivalents and Investments The Company's policy is to invest cash in excess of operating requirements in income-producing investments. Temporary cash investments are all highly liquid investments with maturity of three months or less when purchased and are considered to be cash equivalents for cash flow purposes. Investments in the common stock of Parlux Fragrances, Inc., and U.S. Government Treasury Bills are accounted for in accordance with Statement of Financial Accounting Standards No. 115, "Accounting for Certain Investments in Debt and Equity Securities". Investment in common stock of Parlux Fragrances, Inc., is classified as "available for sale". Changes in the market value are reflected in the stockholders' equity section of the Company's balance sheet under the caption "Unrealized loss on investment". Earnings (Loss) Per Common Share Earnings (loss) per common share is computed by dividing net income (loss) by the weighted average number of common share and common share equivalents outstanding during the period. Primary and fully diluted earnings per share are considered to be the same in all periods. The impact of outstanding warrants and stock options were not included in the calculation of net loss per share in 1996 and net income per share in 1995, as their inclusion would have an anti-dilutive effect on those results. -5- FBR CAPITAL CORPORATION (Formerly Richard Barrie Fragrances, Inc.) NOTES TO FINANCIAL STATEMENTS THREE MONTHS ENDED SEPTEMBER 30, 1996 (Unaudited) Income Taxes The Company has a net operating loss carryforward of approximately $6,400,000 at September 30, 1996. Historically, no federal tax benefit has been recorded due to the uncertainty of the Company's ability to realize benefits by generating taxable income in the future. These carryforwards expire through fiscal year 2011. Due to a greater than 50% change in the ownership of the Company, as defined in the Internal Revenue Code, resulting from various equity offerings, certain restrictions exist as to the use of net operating loss carryforwards to offset future taxable income. Although the Company has significant net operating loss carryforwards available to offset future taxable income, due to the uncertainty as to the Company's future earnings, a full valuation allowance has been provided to offset all deferred tax assets. No income taxes have been provided for either of the interim periods based on the Company's ability to utilize its net operating loss to offset taxable income, if any, during the periods. ITEM 2. MANAGEMENT'S DISCUSSIONS AND ANALYSIS OF FINANCIAL CONDITION AND PLAN OF OPERATIONS Plan of Operations On July 28, 1996, the Company sold to Parlux Fragrances, Inc. (Parlux) virtually all of the assets, properties and rights owned by the Company in connection with its business. The Company has not conducted any operations since the Asset Sale. Accordingly, the results of its previous operations are not material. The reasons for the Asset Sale and the discontinuance of the Company's business were previously reported in the Company's Proxy Statement, dated April 22, 1996 and Form 10 KSB for the fiscal year ended June 30, 1996. Upon the consummation of the Asset Sale and Exchange Offer and payment of certain expenses, the Company had approximately $630,000 in cash. Of that amount, approximately $56,000 was applied to discharge certain accounts payable, including legal, accounting and consulting fees for the fiscal year ended June 1996. On September 30, 1996, the Company had approximately $180,000 in cash and approximately $400,000 in U.S. Government Treasury Bills. The Company expects that it will earn approximately $20,000 from interest during the current fiscal year ending June 30, 1997. -6- FBR CAPITAL CORPORATION (Formerly Richard Barrie Fragrances, Inc.) NOTES TO FINANCIAL STATEMENTS THREE MONTHS ENDED SEPTEMBER 30, 1996 (Unaudited) Corporate and administrative expenses for the current fiscal year are expected to be approximately $165,000 including $82,000 in fees and expense reimbursement to the directors, $55,000 for accounting fees for audit and tax returns, $5,000 for office and telephone expenses, $20,000 for liability insurance and approximately $3,000 for miscellaneous expenses. Funds to pay the expenses are expected to be derived from interest income earned during the year and from the Company's cash on hand. The Company has also begun to identify and conduct discussions with respect to a possible business combination with one or more entities interested in acquiring or being acquired by the Company. The Company is free to investigate businesses of essentially any kind or nature including but not limited to, finance, technology, manufacturing, service, research and development, healthcare, communications, insurance or transportation. While the Company has not chosen any particular area of business in which it may propose to engage and has not conducted any market studies with respect to any business, property or industry, the directors of the Company have considered the strengths and weaknesses of the Company and established certain initial criteria for its search. The Company will first seek a business combination with a company having a business or line of products with good prospects for future profits and growth. In view of the Company's small size and book value, the appropriate candidate is expected to be an emerging or developing company. Other priority candidates may be those desiring to become a public company and those which have an interest in acquiring the company's cash and net operating loss carryforwards. Several companies have been identified which appear to meet the criteria set forth above and discussions are in progress with one of them. There is no assurance of the availability, viability or success of any acquisition or the results of operations of the Company in connection with any acquisition or business venture. Even if a suitable candidate for a business combination is found and negotiations are successfully completed, there is no assurance of successful operations after the combination has been effected or that existing stockholders of the Company will not suffer substantial dilution of their equity position, either upon the business combination itself or upon the completion of any additional financing which may be necessary. The Company does not believe that it is an investment company required to register as such under the Investment Company Act of 1940, as amended. If the Company has not concluded a business combination before June 28, 1997, that is, one year after the Asset Sale, and if, because of its continued ownership of the Parlux Stock or other securities, it would be -7- FBR CAPITAL CORPORATION (Formerly Richard Barrie Fragrances, Inc.) NOTES TO FINANCIAL STATEMENTS THREE MONTHS ENDED SEPTEMBER 30, 1996 (Unaudited) required to register or seek an exemption from such registration, the Company anticipates that it will sell, transfer or otherwise divest itself of its ownership thereof, redeem any outstanding Preferred Stock and make a determination as to whether to liquidate and distribute its assets or to continue to seek out viable business combinations. The Company continues to hold the Parlux Stock and on September 30, 1996, it had approximately $180,000 in cash in banks and $400,000 in U.S. Government Treasury Bills maturing in February 1997. The Parlux Stock may be sold to the public pursuant to a currently effective Registration Statement under the Securities Act of 1933, covering those shares. Under the terms of the Company's outstanding Preferred Shares, however, no sale of the Company's assets having a fair market value of $250,000 or more, either alone or in the aggregate with all other sales of the Company assets, may be sold without the prior consent of the holders of a majority of the Preferred Stock unless the net proceeds of the sale are applied to the payment of the Redemption Price ($5,600 per share) of the Preferred Stock. The aggregate Redemption Price of the 517 shares of Preferred Stock outstanding is $2,895,200 and the holders of the Preferred Stock have a liquidation preference in that amount. The Company is obligated to redeem all of the Preferred Stock by June 27, 1997. If such redemption is not effected, the holders of the majority of the Preferred Stock have the right to demand the liquidation of the Company and the application of its assets to satisfy their liquidation preference. On June 28, 1996, the market value of the Parlux Stock was $10.125 per share, and the aggregate value would have been sufficient to pay the aggregate Redemption Price. At that time, however, the Parlux Stock had not been registered for resale under the Securities Act if 1933 and, accordingly, transfer thereof was restricted. The Parlux Stock was registered on August 12, 1996, on which date the last sale price had declined to $7.625 per share. On September 30, 1996, the last sale price was $4.75 per share. On November 13, 1996, the last sale price was $4.50 per share. If, by June 27, 1997, the mandatory redemption date for the Preferred Shares, the market price of the Parlux Stock has not substantially recovered, or if some accommodation cannot be reached between the Company and the holders of the Preferred Stock, the Company will probably be required to pay substantially all of its cash, in addition to the proceeds of any sale of the Parlux Stock, to fulfill its obligation to pay the Redemption Price. Any significant reduction in the amount of its available cash will probably reduce the Company's value as an acquisition candidate for other businesses and the Company's opportunities to effect a favorable acquisition transaction will be substantially reduced. -8- FBR CAPITAL CORPORATION (Formerly Richard Barrie Fragrances, Inc.) NOTES TO FINANCIAL STATEMENTS THREE MONTHS ENDED SEPTEMBER 30, 1996 (Unaudited) The Company has cash available to fund current operations but will be required to raise additional capital for future acquisitions or other business opportunities. Subsequent Events On January 13, 1994, the Company entered into a series of 10% convertible subordinated promissory notes due January 15, 1996 (the Convertible Notes), totalling $5,157,750. On June 30, 1996, simultaneously with the closing of the sale of virtually all of the assets, properties and rights owned by the Company in connection with its business to Parlux Fragrances, Inc. (the Asset Sale), the Company completed an exchange offer with certain holders of the Convertible Notes in the aggregate principal amount of $5,040,750. The remaining $117,000 of Convertible Notes, held by three note holders, is recorded as a current liability on the September 30, 1996, balance sheet. On October 21, 1996, the Company completed extinguishment of $97,500 of Convertible Notes in exchange for an aggregate of $62,500 in cash, 11,500 shares of the Company's Common Stock, and five three-year Warrants (the Warrants) each to purchase up to 2,500 shares of the Company's Common Stock at $2 per share. The total amount of debt (including principal and accrued but unpaid interest) extinguished pursuant to the exchange aggregated $101,187. This amount, less the cash paid, value of the common stock and the Warrants issued in the exchange offer, will result in an extraordinary gain on the extinguishment of debt in the amount of $34,547. The Company believes that the remaining holder of the last Convertible Note, in the principal amount of $19,500, will also accept a settlement of the Company's obligations on terms not requiring the full cash payment of the amount due on the Convertible Note. Funds for this settlement are expected to come from the Company's cash on hand. Forward-Looking Statements Certain information contained in third Quarterly Report on Form 10-QSB, including, without limitation, information appearing under Part 1, Item 2, "Management's Discussion and Analysis of Financial Condition and Results of Operations", are forward-looking statements (within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934). Factors set forth in the Company's Annual Report on Form 10K for the fiscal year ended June 30, 1996, under Item 1, "Business" and Item 6 "Management's Discussion and Analysis of Financial Condition and Results of Operations" together with other -9- FBR CAPITAL CORPORATION (Formerly Richard Barrie Fragrances, Inc.) NOTES TO FINANCIAL STATEMENTS THREE MONTHS ENDED SEPTEMBER 30, 1996 (Unaudited) factors that appear with the forward-looking statements, or in the Company's other Securities and Exchange Commission filings could affect the Company's actual results and could cause the Company's actual results to differ materially from those expressed in any forward-looking statements made by, or on behalf of, the Company in this Quarterly Report on Form 10-QSB. PART 2. OTHER INFORMATION ITEM 2. CHANGES IN SECURITIES (c) See Management's Discussions and Analysis of Financial Condition and Plan of Operations - Subsequent Events with respect to issuance of common stock and warrants in exchange for certain convertible notes. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits filed: Exhibit Number 4.8 - Registrant's form of warrant to purchase shares of Registrant's common stock at an exercise price of $2.00 per common share. -10- SIGNATURES In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized. FBR CAPITAL CORPORATION (Registrant) Dated: November 19, 1996 By: /s/ Charles D. Snead, Jr. ----------------------------- Charles D. Snead, Jr., President In accordance with 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. Signatures Title Date - ---------- ----- ---- /s/ Stephen T. Meadow Director November 19, 1996 - --------------------- Stephen T. Meadow /s/ Charles D. Snead, Jr. President (Principal Executive November 19, 1996 --------------------- Financial and Accounting Charles D. Snead, Jr. Officer) and Director -11- EX-4.8 2 WARRANT FOR PURCHASE OF SHARES OF COMMON STOCK WARRANT FOR PURCHASE OF SHARES OF COMMON STOCK OF FBR CAPITAL CORPORATION THIS WARRANT IS SUBJECT TO THE RESTRICTIONS ON TRANSFER SET FORTH ON PAGE 2 HEREOF FOR VALUE RECEIVED, Intergalactic Growth Fund, Inc. (the "Holder"), is entitled to purchase from FBR Capital Corporation, a Nevada Corporation (the "Company"), at any time on or before October 15, 1999, Two Thousand Five Hundred (2,500) fully paid and nonassessable shares of the Company's common stock, $.005 par value (such class of stock being hereinafter referred to as the "Common Stock" and such Common Stock as may be acquired upon exercise hereof being hereinafter referred to as (the "Warrant Stock") at an exercise price equal to $2.00 per share (the "Warrant Exercise price"). This Warrant has been issued to the Holder by the Company pursuant to that certain letter agreement dated September 22, 1996 between the Company and the Holder. This Warrant is subject to the following provisions, terms and conditions: 1) The rights represented by this Warrant may be exercised by the Holder, only in the full amount of the Warrant, by written notice of exercise delivered to the Company and accompanied by the surrender of this Warrant at the principal office of the Company and upon payment by the Holder to the Company, by cash, certified check or bank draft, of the Warrant Exercise Price for such shares. The Warrant Stock so purchased shall be deemed issued as of the close of business on the date on which this Warranty shall have been surrendered and payment of the Warrant Exercise Price has been made to the Company. Certificates for the shares of Warrant Stock so purchased shall be delivered to the Holder within thirty (30) days after the rights represented by this Warrant shall have been exercised. 2) The Company covenants and agrees that all shares of Warrant Stock that may be issued upon the exercise of this Warrant will, upon issuance, be duly authorized and issued, fully paid and nonassessable and free from all taxes, liens and charges with respect to the issuance thereof. The Company further covenants and agrees that until expiration of this Warrant, the Company will at all times have authorized and reserved for the purpose of issuance upon exercise of this Warrant, a sufficient number of shares of Common Stock to provide for the exercise of this Warrant. 3) The provisions in this Warrant relating to the Warrant Exercise Price and the number of shares of Warrant Stock to be issued upon exercise of this Warrant shall be subject to adjustment from time to time as hereinafter provided: (a) In case the Company shall at any time subdivide its outstanding Common Stock into a greater number of shares or declare a dividend on its Common Stock payable in Common Stock, the Warrant Exercise Price in effect immediately prior to such subdivision shall be proportionally reduced and the number of shares of Common Stock purchasable pursuant to this Warrant shall be proportionally increased and, conversely, in case the Company's outstanding Common Stock shall be combined into a smaller number of shares, the Warrant Exercise Price in effect immediately prior to such combination shall be proportionately increased and the number of shares of Common Stock purchasable upon the exercise of the Warrant shall be proportionately reduced. (b) If any capital reorganization or reclassification of the capital stock of the Company, or consolidation or merger of the Company with another corporation, or the sale of all or substantially all of its assets to another corporation shall be effected in such a way that holders of Common Stock shall be entitled to receive stock, securities or assets ("Substituted Property") with respect to or in exchange for such Common Stock, then, the Holder shall have the right to purchase and receive upon the basis and upon the terms and conditions specified in this Warrant, and in lieu of the Common Stock of the Company immediately therefore purchasable and receivable upon the exercise of the rights represented hereby, such Substituted Property as would have been issued or delivered to the Holder if it had exercised this Warrant and had received upon exercise of this Warrant the Common Stock prior to such reorganization, reclassification, consolidation, merger, or sale, unless prior to the consummation thereof the successor corporation (if other than the Company) resulting from such consolidation or merger or the corporation purchasing such assets shall assume, by written instrument executed and mailed to the Holder at the last address of the Holder appearing on the books of the Company, the obligation to deliver to the Holder such Substituted Property as, in accordance with the foregoing provisions, the Holder may be entitled to purchase. 4) This Warrant shall not entitle the Holder to any voting rights or other rights as a shareholder of the Company. 5) The Holder, by acceptance hereof, represents and warrants that (a) it is acquiring this Warrant for its own account for investment purposes only and not with a view to its resale or distribution, and (b) it has no present intention to resell or otherwise dispose of all or any part of this Warrant. Other than pursuant to registration under Federal and applicable state securities laws or an exemption from such registration, neither this Warrant nor any share of Warrant Stock may be sold, pledged, assigned or otherwise disposed of (whether voluntarily or involuntarily) by the holder unless the Company receives from the transferee such representations and agreements as the Company shall determine, in its sole discretion, are necessary and appropriate to permit such transfer to be made pursuant to exemptions from registration under Federal and applicable state securities laws. Each certificate representing this Warrant and any shares of Warrant Stock shall bear appropriate legends setting forth those restrictions on transferability. The Holder, by acceptance hereof, agrees to give written notice to the Company at least thirty-five (35) days before any proposed transfer of this warrant or any shares of Warrant Stock describing briefly the manner of any proposed transfer. Within thirty (30) days after receiving such written notice, the Company shall notify the Holder whether such transfer may be effected and of the conditions to any such transfer. 6) This Warrant shall be transferable only on the books of the Company by the Holder in person, or by duly authorized attorney, on surrender of this Warrant, properly assigned. 7) Neither this Warrant nor any terms hereof may be changed, waived, discharged or terminated orally but only by an instrument in writing signed by the party against which enforcement of the change, waiver, discharge or termination is sought. IN WITNESS WHEREOF, the Company has caused this Warrant to be executed on its behalf by its duly authorized officer on the ___day of October, 1996. FBR CAPITAL CORPORATION By__________________________ Its President THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT'), OR UNDER APPLICABLE STATE SECURITIES LAWS. THESE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED FOR SALE, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF, AND NO TRANSFER OF THE SECURITIES WILL BE MADE BY THE COMPANY OR ITS TRANSFER AGENT IN THE ABSENCE OF SUCH REGISTRATION OR AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED. EX-27 3 FINANCIAL DATA SCHEDULE
5 1 U.S. DOLLARS 3-MOS JUN-30-1997 JUL-01-1996 SEP-30-1996 1 181,646 2,157,059 0 0 0 2,352,674 0 0 2,352,674 238,907 0 2,859,200 0 23,183 (804,617) 2,352,674 0 0 0 0 43,248 0 4,424 (43,389) 0 0 0 0 0 (43,389) (.01) (.01)
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