-----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, GQQgy2zryabf/+uT1MXW+RZLKL3bKteoSLoC2iSDpmmAddbMTtXqJymne8G3t4Bw vHZGMo/DZnDEviGRZQ8cCQ== 0000950147-98-000340.txt : 19980507 0000950147-98-000340.hdr.sgml : 19980507 ACCESSION NUMBER: 0000950147-98-000340 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980331 FILED AS OF DATE: 19980506 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: SEC FILE NUMBER: 033-58694 FILM NUMBER: 98611332 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 1ST QUARTER 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 March 31, 1998 -------------- 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 33-58694 -------- 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 May 6, 1998, outstanding 4,648,205 shares of Common Stock, par value $.005 per share. Transitional Small Business Disclosure Format: Yes No X --- --- Page 1 of 9 Total Pages Exhibit Index - None PART 1. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS FBR CAPITAL CORPORATION BALANCE SHEETS
March 31 June 30 ASSETS 1998 1997 ---- ---- (Unaudited) CURRENT ASSETS: Cash and cash equivalents $ 12,492 $ 10,238 Investment in U.S. Government Treasury Bills 301,338 388,089 Investment in common stock of Parlux Fragrances, Inc. 48,187 62,967 Other current assets 5,583 5,818 ----------- ----------- TOTAL ASSETS $ 367,600 $ 467,112 =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT) CURRENT LIABILITIES: Accounts payable $ 10,609 $ 9,694 Accrued expenses 8,720 6,524 Convertible notes payable 19,500 19,500 ----------- ----------- Total current liabilities 38,829 35,718 ----------- ----------- SERIES A REDEEMABLE PREFERRED STOCK: $.01 par value; 529 shares authorized; 2 shares issued and outstanding; at liquidation value of $5,600 per share 11,200 11,200 ----------- ----------- STOCKHOLDERS' EQUITY (DEFICIT): Preferred stock, $.01 par value; 10,000,000 shares authorized; no shares outstanding except 2 shares issued as Series A Redeemable Preferred Stock Common stock, $.005 par value; 16,777,667 shares authorized; 4,648,205 shares issued and outstanding 23,241 23,241 Additional paid-in capital 9,337,192 9,337,192 Accumulated deficit (8,815,354) (8,727,512) Unrealized loss on investment (227,508) (212,727) ----------- ----------- Total stockholders' equity 317,571 420,194 ----------- ----------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 367,600 $ 467,112 =========== ===========
The accompanying notes are an integral part of these balance sheets. -2- FBR CAPITAL CORPORATION STATEMENTS OF OPERATIONS NINE MONTHS ENDED MARCH 31, 1998 AND 1997 (Unaudited) 1998 1997 ---- ---- Operating expenses $ (100,532) $ (129,135) ----------- ----------- Loss from operations (100,532) (129,135) ----------- ----------- Other income (expense): Other income 1,304 15,018 Interest expense (2,196) (6,723) Gain on extinguishment of debt -- 53,385 Interest income 13,581 16,241 ----------- ----------- Other income (expense), net 12,689 77,921 ----------- ----------- Net loss $ (87,843) $ (51,214) =========== =========== Loss per common share and common share equivalents $ (.02) $ (.01) =========== =========== Weighted average common share and common share equivalents outstanding 4,648,205 4,648,205 =========== =========== The accompanying notes are an integral part of these balance sheets. -3- FBR CAPITAL CORPORATION STATEMENTS OF OPERATIONS THREE MONTHS ENDED MARCH 31, 1998 AND 1997 (Unaudited) 1998 1997 ---- ---- Operating expenses $ (27,605) $ (46,668) ----------- ----------- Loss from operations (27,605) (46,668) ----------- ----------- Other income (expense): Interest expense (721) (721) Other income -- 15,018 Interest income 4,053 5,533 ----------- ----------- Other income (expense), net 3,332 19,830 ----------- ----------- Net loss $ (24,273) $ (26,838) =========== =========== Loss per common share and common share equivalents $ (.01) $ (.01) =========== =========== Weighted average common share and common share equivalents outstanding 4,648,205 4,648,205 =========== =========== The accompanying notes are an integral part of these balance sheets. -4- FBR CAPITAL CORPORATION STATEMENTS OF CASH FLOWS NINE MONTHS ENDED MARCH 31, 1998 AND 1997 (Unaudited)
1998 1997 ---- ---- CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (87,843) $ (51,214) --------- --------- Adjustments to reconcile net loss to net cash used in operating activities: Gain on extinguishment of debt -- (53,385) (Increase) decrease in: Other assets 235 (20,856) Increase (decrease) in: Accounts payable and accrued expenses 3,111 (208,255) --------- --------- Total adjustments 3,346 (282,496) --------- --------- Net cash used in operating activities (84,497) (333,710) --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES: Receipt of amount due from acquiror of discontinued operations -- 750,000 Investment in U.S. Government Treasury Bills, net -- (380,339) Proceeds from sale of U.S. Government Treasury Bills 86,751 -- --------- --------- Net cash provided by investing activities 86,751 369,661 --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES: Repayment of convertible notes payable -- (62,500) --------- --------- Net cash used in financing activities -- (62,500) --------- --------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 2,254 (26,549) CASH AND CASH EQUIVALENTS, beginning of period 10,238 61,871 --------- --------- CASH AND CASH EQUIVALENTS, end of period $ 12,492 $ 35,322 ========= =========
Non-cash financing activities: 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 of $22,525) extinguished pursuant to the exchange aggregated $120,025. This amount, less the cash paid, value of the common stock and the Warrants issued in the exchange offer, resulted in an extraordinary gain on the extinguishment of debt in the amount of $53,385. The accompanying notes are an integral part of these balance sheets. -5- FBR CAPITAL CORPORATION NOTES TO FINANCIAL STATEMENTS NINE MONTHS ENDED MARCH 31, 1998 AND 1997 (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 nine month and three month periods ended March 31, 1998 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, 1997. Cash and Cash Equivalents and Investments The Company's policy is to invest cash in excess of expenditure 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". The Company's 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 1998 and 1997, as their inclusion would have an anti-dilutive effect on those results. Income Taxes The Company has a net operating loss carryforward of approximately $6,600,000 at March 31, 1998. 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 2012. 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. -6- FBR CAPITAL CORPORATION NOTES TO FINANCIAL STATEMENTS NINE MONTHS ENDED MARCH 31, 1998 AND 1997 (Unaudited) 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 June 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 for cash, shares of the common stock of Parlux (Parlux stock) and other consideration. The Company has not conducted any operations since the Asset Sale. Accordingly, the results of its operations prior to the Asset Sale are not material. The reasons for and terms of 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. On March 31, 1998, the Company had approximately $12,000 in cash and approximately $301,000 in U.S. Government Treasury Bills. The Company expects that it will earn approximately $18,000 from interest during the current fiscal year ending June 30, 1998. Corporate and administrative expenses for the current fiscal year are expected to be approximately $115,000 including $70,000 in fees and expense reimbursement to the directors, $15,000 for accounting fees for audit and tax returns, $6,000 for legal fees, $12,000 for liability insurance and approximately $4,000 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. Since the Asset Sale of June 1996, the Company's operations have been limited to the conduct of administrative activities such as paying indebtedness remaining after the Asset Sale, acquiring outstanding notes, settling a claim for prior services, preparing and filing federal and state tax returns and quarterly SEC filings, undertaking and completing an exchange offer for preferred shares and other general corporate activities. Also, the Company has been identifying and conducting 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 conducted only limited market studies with respect to any business, property or industry, the directors of the Company -7- FBR CAPITAL CORPORATION NOTES TO FINANCIAL STATEMENTS NINE MONTHS ENDED MARCH 31, 1998 AND 1997 (Unaudited) 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. A number of companies have been identified which in the judgment of the Board of Directors meet the criteria set forth above and discussions have been held with several 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 continues to hold 27,229 shares of Parlux Stock and on March 31, 1998, it had approximately $12,000 in cash in banks and $301,000 in U.S. Government Treasury Bills maturing in May 1998. 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. Management believes that the Company's reserves in cash and treasury bills are adequate to support its current activities for the year ended June 30, 1998. However, if management decides to merge with or acquire a business, this may require additional capital. There can be no assurance that the Company will be able to raise such capital when and if it is needed. In connection with the Asset Sale on June 28, 1996, all employees of the Company were terminated and the Company has no employees. The Company's two executive officers provide certain services to the Company on a part-time contingency basis. There are no present plans to hire any employees. Forward-Looking Statements Certain information contained in this 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, 1997, under Item 1, "Business" and Item 6 "Management's Discussion and Analysis of Financial Condition and Results of Operations" together with other 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. -8- 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: May 6, 1998 By: /S/ Charles D. Snead, Jr. ------------------------- Charles D. Snead, Jr., President -9- EX-27 2 FINANCIAL DATA SCHEDULE
5 1 U.S. Dollars 9-MOS JUN-30-1998 JUL-01-1997 MAR-31-1998 1 12,492 349,525 0 0 0 367,600 0 0 367,600 38,829 0 11,200 0 23,241 333,159 367,600 0 0 0 0 100,532 0 2,196 (87,483) 0 0 0 0 0 (87,483) (.02) (.02)
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