U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB/A
[X} Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended DECEMBER 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
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(Exact Name of Small Business Issuer as Specified in its Charter)
Nevada 13-3465289
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(State of Other Jurisdiction of (I.R.S. Employer
Incorporation of Organization) Identification No.)
14988 North 78th Way, Suite 203, Scottsdale, Arizona 85260
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(Address of Principal Executive Offices)
(602)483-1466
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(Issuer's Telephone Number Including Area Code
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(Former Name, Former Address and Former Fiscal Year,
if Changed Since Last Report)
This amendment is being filed to correct errors in the Statements of
Operations for the three months and six months ended December 31, 1997 included
in Part 1, Item 1.
Page 1 of 8 Total Pages
Exhibit Index - None
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PART 1. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
FBR CAPITAL CORPORATION
BALANCE SHEETS
DECEMBER 31 JUNE 30
ASSETS 1998 1998
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(UNAUDITED)
CURRENT ASSETS:
Cash and cash equivalents $ 1,374 $ 15,223
Investment in U.S. Government Treasury Bills 270,240 275,670
Investment in common stock of Parlux Fragrances, Inc. 14,237 53,541
Other current assets 1,656 4,536
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TOTAL ASSETS $ 287,507 $ 348,970
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LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 6,506 $ 4,691
Accrued expenses 11,274 9,449
Convertible notes payable 19,500 19,500
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Total current liabilities 37,280 33,640
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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
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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 (9,013,461) (8,834,150)
Accumulated other comprehensive loss (107,945) (222,153)
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Total stockholders' equity 239,027 304,130
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 287,507 $ 348,970
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The accompanying notes are an integral part of these balance sheets.
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FBR CAPITAL CORPORATION
STATEMENTS OF OPERATIONS
SIX MONTHS ENDED DECEMBER 31, 1998 AND 1997
(UNAUDITED)
1998 1997
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Operating expenses $ (52,207) $ (72,927)
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Loss from operations (52,207) (72,927)
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Other income (expense):
Interest expense (1,475) (1,474)
Interest income 6,227 9,528
Other income -- 1,304
Realized loss on disposal of Parlux common stock (131,856) --
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Other income (expense), net (127,104) 9,358
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Net loss (179,311) (63,569)
Other comprehensive loss:
Unrealized loss on investment:
Unrealized holding loss arising during period (18,435) (23,704)
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Comprehensive loss $ (197,746) $ (87,273)
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Loss per common share and common share equivalents $ (.04) $ (.01)
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Weighted average common share and common share
equivalents outstanding 4,648,205 4,648,205
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The accompanying notes are an integral part of these statements.
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FBR CAPITAL CORPORATION
STATEMENTS OF OPERATIONS
THREE MONTHS ENDED DECEMBER 31, 1998 AND 1997
(UNAUDITED)
1998 1997
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Operating expenses $ (20,418) $ (32,384)
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Loss from operations (20,418) (32,384)
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Other income (expense):
Interest expense (737) (737)
Interest income 2,969 4,640
Realized loss on disposal of Parlux common stock (131,856) --
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Other income (expense), net (129,624) 3,903
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Net loss (150,042) (28,481)
Other comprehensive loss:
Unrealized loss on investment:
Unrealized holding loss arising during period (16,062) (2,288)
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Comprehensive loss $ (166,104) $ (30,769)
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Loss per common share and common share equivalents $ (.03) $ (.01)
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Weighted average common share and common share
equivalents outstanding 4,648,205 4,648,205
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The accompanying notes are an integral part of these statements.
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FBR CAPITAL CORPORATION
STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED DECEMBER 31, 1998 AND 1997
(UNAUDITED)
1998 1997
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(179,311) $(60,069)
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Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Realized loss on disposal of Parlux common stock 153,512 --
(Increase) decrease in:
Other current assets 2,880 1,694
Increase (decrease) in:
Accounts payable and accrued expenses 3,640 3,329
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Total adjustments 160,032 5,023
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Net cash used in operations activities (19,279) (55,046)
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CASH FLOWS FROM INVESTING ACTIVITIES:
Receipts of amount due from acquiror of
discontinued operations -- --
Investment in U.S. Government Treasury Bills -- --
Proceeds from sale of U.S. Government Treasury Bills 5,430 57,278
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Net cash provided by investing activities 5,430 57,278
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NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (13,849) 2,232
CASH AND CASH EQUIVALENTS, beginning of period 15,223 10,238
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CASH AND CASH EQUIVALENTS, end of period $ 1,374 $ 12,470
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The accompanying notes are an integral part of these statements.
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FBR CAPITAL CORPORATION
NOTES TO FINANCIAL STATEMENTS
SIX MONTHS ENDED DECEMBER 31, 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 six month and three month periods ended December 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, 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
stockholders' equity section of the Company's balance sheet under the caption
"Accumulated Other Comprehensive Loss", in accordance with Statement of
Financial Accounting Standards No. 130, REPORTING COMPREHENSIVE INCOME.
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 $6,800,000 at
December 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
2013. Due to a greater than 50% change in the ownership of the Company, as
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FBR CAPITAL CORPORATION
NOTES TO FINANCIAL STATEMENTS
SIX MONTHS ENDED DECEMBER 31, 1998
(UNAUDITED)
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.
RECENTLY ISSUED ACCOUNTING STANDARD
During 1998, the Company adopted Financial Accounting Standards Board Statement
NO. 130, REPORTING COMPREHENSIVE INCOME (SFAS No. 130). SFAS No. 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 December 31, 1998, the Company held an investment classified as
available-for-sale, which has an unrealized loss of $18,435 for the six months
ended December 31, 1998.
SUBSEQUENT EVENT
On February 16, 1999, the Company agreed in principle to acquire all of the
outstanding shares of Vitrix Incorporated ("Vitrix"), a private corporation,
that is a developer and provider of software and hardware for time and labor
management solutions for businesses of all sizes. Vitrix products are designed
to improve productivity by automating collection of time and attendance data,
staff scheduling and management of labor resources.
FBR will acquire the Vitrix shares for a combination of newly-issued FBR common
stock and Series B FBR preferred shares that are convertible into FBR common
shares. Under the proposed transaction, after issuance and conversion of the FBR
shares, the Vitrix shareholders will own 80% of the outstanding shares of FBR
and the current shareholders of FBR will own 20%. FBR currently has 4,648,205
shares issued and outstanding. The proposed transaction is subject to certain
conditions including negotiation of a definite agreement and is subject to the
approval of the Board of Directors of FBR and the written approval of at least
90% of the Vitrix shareholders.
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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: March 16, 1999
By: /s/ Charles D. Snead, Jr.
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Charles D. Snead, Jr., President
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