SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) June 18, 1997
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FBR Capital Corporation
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(Exact name of registrant as specified in its charter)
Nevada
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(State or other jurisdiction of Incorporation)
33-58694 13-3465289
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(Commission File Number) (IRS Employer Identification No.)
14988 N. 78th Way, Suite 203, Scottsdale, AZ 85260
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (602) 483-1466
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Page 1 of 5 Total Pages
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Item 2. Acquisition or Disposition of Assets
On June 18, 1997, the Company disposed of assets in the completion of an
exchange offer dated February 25, 1997 (the "Exchange Offer") with the holders
of the Company's Series A Preferred Shares (the "Preferred Shares"), pursuant to
which the holders tendered 515 Preferred Shares (99.6% of the Preferred Shares
outstanding) in exchange for an aggregate of 341,445 shares of Parlux
Fragrances, Inc. common stock ("Parlux Stock") owned by the Company, at an
exchange ratio of 663 shares of Parlux Stock for each of the Preferred Shares.
Prior to making the Exchange Offer, the Company owned 370,000 shares of Parlux
Stock. It offered to exchange 342,771 of the Parlux shares for all 517 Preferred
Shares outstanding and retained 27,229 Parlux shares. The holders of all but two
(2) of the Preferred Shares outstanding tendered their shares for exchange
pursuant to the offer. The Company has to date delivered 340,119 Parlux Shares
in the exchange and is holding 1326 Parlux Shares pending receipt of two (2)
tendered Preferred Shares from the custodian thereof.
The Company made the Exchange Offer because it was required under the terms of
the Preferred Shares to redeem them by June 27, 1997, for an aggregate
redemption price of $2,895,200 ($5,600 per share). The holders of the majority
of the Preferred Shares had the right to require that the Company be liquidated
after that date and could require that the proceeds of the disposition of its
assets be applied to payment of the redemption price. At the time of issuance of
the Preferred Shares, the value of the Parlux Shares, if they could have then
been registered for re-sale by the Company, was sufficient to cover the
redemption price. Subsequently, the market price of the Parlux Shares declined
substantially and has been insufficient, even when added to the amount of cash
the Company has on hand to provide sufficient funds to pay the redemption price
in full.
In the judgment of the Company's Board of Directors, the possibility of such a
liquidation made the Company a significantly less attractive merger candidate
than it would otherwise be and hindered the Company in negotiating any such
transaction. Accordingly, the Board of Directors determined to undertake the
Exchange Offer which has been completed, thereby eliminating all but two (2) of
the Preferred Shares and the possibility of such a liquidation. With the
completion of this transaction, in the judgment of the Directors, the Company
has become a more attractive acquisition vehicle. However, there is no assurance
that the Company will ever enter into a favorable business combination, that
such a transaction will have a favorable effect on the value of the Company's
common stock or that any such transaction will yield a benefit to preferred
shareholders equal or greater than the amount of value surrendered as a result
of participating in the Exchange Offer.
The effect of the consummation of the Exchange Offer is that the holders of the
tendered Preferred Shares who have received their Parlux Shares no longer have
any claim on the assets of the Company or any right to cause liquidation of the
Company or to acquire any
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of its assets, which consist of its remaining 27,229 Parlux Shares, its cash and
its U.S. Treasury securities. The Company eliminated potential redemption price
claims in an aggregate amount of $2,884,000 by exchanging Parlux Shares with an
aggregate value of $768,251.25 based on the closing price of Parlux Shares at
June 18, 1997.Tender of the Preferred Shares also constituted a grant of a
release to the officers, directors, employees and agents of the Company with
respect to any and all claims which the tendering holder had or thereafter may
have with respect to the Preferred Shares, the rights of the holders thereof and
the Exchange Offer.
Shares Outstanding
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Following completion of the Exchange Offer, the Company had issued and
outstanding an aggregate of 4,661,998 shares of common stock and 2 shares of
Series A preferred stock.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Financial Statements of Business Acquired.
Not Applicable
(b) Pro Forma Financial Information.
Pro Forma Balance Sheet at March 31, 1997
Notes to Pro Forma Balance Sheet
(c) Exhibits
None
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Item 7(b) Pro Forma Financial Information
Pro Forma Balance Sheet at March 31, 1997
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The following table sets forth the Company's unaudited balance sheet at March
31, 1997, and as adjusted on a pro forma basis assuming the consummation of the
Exchange Offer.
<TABLE>
<CAPTION>
March 31, 1997
(Unaudited)
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As
Actual Pro Forma(1) Adjusted
<S> <C> <C> <C>
ASSETS
Current Assets:
Cash and Cash Equivalents $ 35,322 $ - $ 35,322
Investment in U.S. Government Treasury Bills 380,339 - 380,339
Investment in Common Stock of Parlux Fragrances, Inc. 901,875 (826,743)(3) 75,132
Receivable from Acquiror of Discontinued Operations - - -
Other Current Assets 27,847 - 27,847
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Total Assets $1,345,383 $ (826,743) $ 518,640
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LIABILITIES AND SHAREHOLDERS' EQUITY
(DEFICIT)
Current Liabilities:
Accounts Payable $ 22,881 $ - $ 22,881
Accrued Expenses 48,545 - $ 48,545
Convertible Note Payable 19,500 - 19,500
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Total Current Liabilities 90,926 $ - 90,926
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Series A Redeemable Preferred Stock:
$0.01 par value, 529 shares authorized,
517 shares issued and outstanding at
liquidation value of $5,600 per share 2,895,200 (2,884,000)(2) 11,200
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Stockholders' Equity (Deficit):
Preferred stock, $0.01 par value, 10,000,000 shares
authorized, no shares outstanding except 517 shares
issued as Series A Redeemable Preferred Stock - - -
Common stock, $0.005 par value, 16,777,667 Shares
authorized, 4,648,205 shares issued and outstanding 23,241 - 23,241
Additional Paid-In Capital 7,245,850 - 7,245,850
Accumulated Deficit (6,065,459) (550,346) (6,615,805)
Unrealized Loss on Investment (2,844,375) 2,607,603 (3) (236,772)
Total Stockholders' Equity (Deficit) (1,640,743) 2,057,257 416,514
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Total Liabilities and Stockholders' Equity (Deficit) $1,345,383 $ (826,743) $518,640
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</TABLE>
The accompanying notes are an integral part of this balance sheet
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Notes to Pro Forma Balance Sheet at March 31, 1997
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(1) As adjusted to reflect the exchange of 341,445 shares of Parlux
common stock to the preferred shareholders for 515 shares of
Preferred Stock. Assumes exchange of all but 2 outstanding shares of
Preferred Stock.
(2) As adjusted for the exchange of Parlux shares for the Preferred
Stock having a mandatory redemption feature.
(3) Represents Parlux common stock on a pro forma and as adjusted basis.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
July 18, 1997 FBR Capital Corporation
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(Registrant)
/s/ Charles D. Snead, Jr.
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Charles D. Snead, Jr., President
(Chief Executive, Financial
and Accounting Officer)
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