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
<PAGE>
PART 1. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
FBR CAPITAL CORPORATION
(Formerly Richard Barrie Fragrances, Inc.)
BALANCE SHEETS
<TABLE>
<CAPTION>
September 30 June 30
ASSETS 1996 1996
---- ----
(Unaudited)
<S> <C> <C>
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
============ =============
</TABLE>
The accompanying notes are an integral part of these balance sheets.
-2-
<PAGE>
FBR CAPITAL CORPORATION
(Formerly Richard Barrie Fragrances, Inc.)
STATEMENTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
(Unaudited)
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
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
============ =============
</TABLE>
The accompanying notes are an integral part of these statements.
-3-
<PAGE>
FBR CAPITAL CORPORATION
(Formerly Richard Barrie Fragrances, Inc.)
STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
(Unaudited)
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
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
=========== ===========
</TABLE>
The accompanying notes are an integral part of these statements.
-4-
<PAGE>
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-
<PAGE>
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-
<PAGE>
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-
<PAGE>
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-
<PAGE>
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-
<PAGE>
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-
<PAGE>
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-
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
<PAGE>
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.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> SEP-30-1996
<EXCHANGE-RATE> 1
<CASH> 181,646
<SECURITIES> 2,157,059
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,352,674
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,352,674
<CURRENT-LIABILITIES> 238,907
<BONDS> 0
2,859,200
0
<COMMON> 23,183
<OTHER-SE> (804,617)
<TOTAL-LIABILITY-AND-EQUITY> 2,352,674
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 43,248
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,424
<INCOME-PRETAX> (43,389)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (43,389)
<EPS-PRIMARY> (.01)
<EPS-DILUTED> (.01)
</TABLE>
