-----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, Tib9R/eKRL48s7Ln9xmuRtiDrPWpF4GZPFi2Dh8h6VjJ8eS6bgUJzgm79XTHLemj 8U5000asjL87gNFAMyilKw== 0000950147-98-000907.txt : 19981116 0000950147-98-000907.hdr.sgml : 19981116 ACCESSION NUMBER: 0000950147-98-000907 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980930 FILED AS OF DATE: 19981112 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: 98745803 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 FOR THE QTR ENDED 9/30/98 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, 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 November 11, 1998, 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 9 Total Pages Exhibit Index - None PART 1. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS FBR CAPITAL CORPORATION BALANCE SHEETS (UNAUDITED) SEPTEMBER 30 JUNE 30 ASSETS 1998 1998 ---- ---- CURRENT ASSETS: Cash and cash equivalents $ 1,814 $ 15,223 Investment in U.S. Government Treasury Bills 279,000 275,670 Investment in common stock of Parlux Fragrances, Inc. 37,478 53,541 Other current assets 2,929 4,536 ----------- ----------- TOTAL ASSETS $ 321,221 $ 348,970 =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT) CURRENT LIABILITIES: Accounts payable $ 15,342 $ 4,691 Accrued expenses 16,287 9,449 Convertible notes payable 19,500 19,500 ----------- ----------- Total current liabilities 51,129 33,640 ----------- ----------- 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 (8,863,325) (8,834,150) Other comprehensive loss (238,216) (222,153) ----------- ----------- Total stockholders' equity 258,892 304,130 ----------- ----------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 321,221 $ 348,970 =========== =========== The accompanying notes are an integral part of these balance sheets. -2- FBR CAPITAL CORPORATION STATEMENTS OF OPERATIONS THREE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997 (UNAUDITED) 1998 1997 ---- ---- Operating expenses $ (31,695) $ (40,543) ---------- ---------- Loss from operations (31,695) (40,543) ---------- ---------- Other income (expense): Interest expense (737) (737) Interest income 3,258 4,887 Other income -- 1,304 ---------- ---------- Other income (expense), net 2,521 5,454 ---------- ---------- Net loss $ (29,174) $ (35,089) ========== ========== Loss per common share and common share equivalents $ (.01) $ (.01) ========== ========== Weighted average common share and common share equivalents outstanding 4,648,205 4,636,698 ========== ========== Net Loss $ (29,174) $ (35,089) Other comprehensive loss: Unrealized loss on investment: Unrealized holding loss arising during period (16,063) (2,288) ---------- ---------- Comprehensive loss $ (45,237) $ (37,377) ---------- ---------- The accompanying notes are an integral part of these statements. -3- FBR CAPITAL CORPORATION STATEMENTS OF CASH FLOWS THREE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997 (UNAUDITED) 1998 1997 ---- ---- CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $(29,174) $(35,089) -------- -------- Adjustments to reconcile net loss to net cash used in operating activities: (Increase) decrease in: Accrued interest receivable -- (2,731) Other assets (571) 2,318 Increase in: Accounts payable and accrued expenses 16,336 19,174 -------- -------- Total adjustments 15,765 18,761 -------- -------- Net cash used in operating activities (13,409) (16,328) -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from sale of U.S. Government Treasury Bills -- 32,657 -------- -------- Net cash provided by investing activities -- 32,657 -------- -------- NET INCREASE (DECREASE) CASH AND CASH EQUIVALENTS (13,409) 16,329 CASH AND CASH EQUIVALENTS, beginning of period 15,223 10,238 -------- -------- CASH AND CASH EQUIVALENTS, end of period $ 1,814 $ 26,567 ======== ======== The accompanying notes are an integral part of these statements. -4- FBR CAPITAL CORPORATION NOTES TO FINANCIAL STATEMENTS THREE MONTHS ENDED SEPTEMBER 30, 1998 (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, 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, 1998. 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 comprehensive loss section of the Company's statement of operations and comprehensive loss 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 $6,700,000 at September 30, 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 2013. 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. -5- FBR CAPITAL CORPORATION NOTES TO FINANCIAL STATEMENTS THREE MONTHS ENDED SEPTEMBER 30, 1998 (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. RECENTLY ISSUED ACCOUNTING STANDARD During the year, the Company adopted Financial Accounting Standards Board Statement No. 130, REPORTING COMPREHENSIVE INCOME (SFAS No. 130). SFAS 130 requires the reporting of comprehensive income in addition to net income from operations. Comprehensive income is a more inclusive financial reporting methodology that includes disclosures of certain financial information that historically has not been recognized in the calculation of net income. At September 30, 1998, the Company held an investment classified as available-for-sale, which has an unrealized loss of $16,063 for the three months ended September 30, 1998. 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 September 30, 1998, the Company had approximately $2,000 in cash and approximately $279,000 in U.S. Government Treasury Bills. The Company expects that it will earn approximately $12,000 from interest during the current fiscal year ending June 30, 1999. Corporate and administrative expenses for the current fiscal year are expected to be approximately $105,000 including $66,000 in fees and expense reimbursement to the directors, $10,000 for accounting fees for audit and tax returns, $3,000 for legal fees, $10,000 for liability insurance, $7,800 for stock transfer fees and printing expense, 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 -6- FBR CAPITAL CORPORATION NOTES TO FINANCIAL STATEMENTS THREE MONTHS ENDED SEPTEMBER 30, 1998 (UNAUDITED) 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 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 28,555 shares of Parlux Stock of which management intends to use 1,326 shares to redeem two preferred shares during the three months ending December 31, 1998. On September 30, 1998, it had approximately $2,000 in cash in banks and $279,000 in U.S. Government Treasury Bills maturing in November 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, 1999. 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 first 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 -7- FBR CAPITAL CORPORATION NOTES TO FINANCIAL STATEMENTS THREE MONTHS ENDED SEPTEMBER 30, 1998 (UNAUDITED) 1934). Factors set forth in the Company's Annual Report on Form 10K for the fiscal year ended June 30, 1998, 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. CONTINGENCIES During November 1996, the Company received a request for payment of claimed amounts totaling approximately $137,000 purported to be owed to Muelhens GMBH with whom the Company had a distribution agreement from December 1993 to June 30, 1995. As set forth in the Company's Annual Report on Form 10-KSB for the fiscal year ended June 30, 1996, distribution agreements with Muelhens GMBH and affiliated parties were terminated effective June 30, 1995 on a basis that relieved the Company of obligations to Muelhen's affiliated companies. The Company believes that the claimed amounts were included in the numerous transactions resolved in the termination arrangements in June 1995 and so advised the attorneys for the claimant by letter of March 11, 1997. The Company is not presently able to determine whether this request for payment will be pursued and what amount, if, any ultimately may be due and owing thereon. -8- FBR CAPITAL CORPORATION 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 11, 1998 By: /s/ Charles D. Snead, Jr. ------------------------------------- Charles D. Snead, Jr., President -9- EX-27 2 FINANCIAL DATA SCHEDULE
5 1 U.S. DOLLARS 3-MOS JUN-30-1999 JUL-01-1998 SEP-30-1998 1 1,814 316,478 0 0 0 321,221 0 0 321,221 51,129 0 11,200 0 23,241 235,651 321,221 0 0 0 0 31,695 0 737 (29,174) 0 0 0 0 0 (29,174) (.01) (.01)
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