-----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, DQvv3pLWAcI4WRTrRhxO9ewLS1Prax7bV8CScy6CYPoCCJXKcfmruu0NpLV7M53l CtE4YjjZwi5SvlU/99aSUA== 0000914317-96-000276.txt : 19960816 0000914317-96-000276.hdr.sgml : 19960816 ACCESSION NUMBER: 0000914317-96-000276 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960814 SROS: BSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: DHB CAPITAL GROUP INC /DE/ CENTRAL INDEX KEY: 0000899166 STANDARD INDUSTRIAL CLASSIFICATION: ORTHOPEDIC, PROSTHETIC & SURGICAL APPLIANCES & SUPPLIES [3842] IRS NUMBER: 113129361 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 001-13112 FILM NUMBER: 96614468 BUSINESS ADDRESS: STREET 1: 11 OLD WESTBURY RD CITY: OLD WESTBURY STATE: NY ZIP: 11568 BUSINESS PHONE: 5166212552 MAIL ADDRESS: STREET 1: 11 OLD WESTBURY RD CITY: OLD WESTBURY STATE: NY ZIP: 11568 10QSB 1 =========================================================================== U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ------------------------- Form 10-QSB QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTER ENDED JUNE 30, 1996 Commission File No. 0-22429 DHB CAPITAL GROUP INC (Exact name of Registrant as specified in its charter) Delaware 11-3129361 State or other jurisdiction (I.R.S. Employer of incorporation) Identification No.) 11 Old Westbury Road, Old Westbury, New York 11568 (Address of principal executive offices) Registrant's telephone number: (516) 997-1155 Not applicable Former name, former address and former fiscal year, if changed since last report Indicate by check whether the registrant (1) 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 [ ] As of August 12, 1996, there were 22,954,529 shares of Common Stock, $.001 par value outstanding. =============================================================================== CONTENTS PART I Financial Information Item 1. Financial Statements Consolidated Balance Sheet as of June 30, 1996 and December 31, 1995 Consolidated Statements of Income (Loss) and Retained Earnings (Deficit) for the three months ended June 30, 1996 and 1995 Consolidated Statements of Income (Loss) and Retained Earnings (Deficit) for the six months ended June 30, 1996 and 1995 Consolidated Statements of Cash Flows for the six months ended June 30, 1996 and 1995 Notes to Consolidated Financial Statements Item 2. Management's Discussion and Analysis of Results of Operations Operations and Financial Condition PART II Other Information Signatures DHB CAPITAL GROUP, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
UNAUDITED JUNE 30, DECEMBER 31, 1996 1995 ------------- --------------- ASSETS Current Assets Cash and cash equivalents $ 667,215 $ 475,108 Marketable securities 4,957,327 1,829,856 Accounts receivable, less allowance for doubtful accounts of $80,695 & $70,000 5,560,919 3,819,571 Inventories 7,416,015 7,856,199 Prepaid expenses and other current assets 771,124 208,510 ------------ ------------ Total Current Assets 19,372,600 14,189,244 ------------ ------------ Property, and Equipment, at cost, less accumulated depreciation of $ 433,196 and $325,454 1,615,668 1,077,066 ------------ ------------ Other Assets Intangible assets, net 752,067 721,327 Investment in non-marketable securities 3,816,750 3,316,750 Deposits and other assets 439,004 160,821 ------------ ------------ Total Other Assets 5,007,821 4,198,208 ------------ ------------ Total Assets $ 25,996,089 $ 19,465,208 ============ ============ LIABILITIES AND EQUITY Current Liabilities Note payable $ 2,550,000 $ 2,550,000 Current Maturities 60,000 -- Accounts payable 3,167,347 2,847,690 Accrued expenses and other liabilities 469,777 301,067 Deferred taxes payable 11,100 23,700 Income taxes payable 319,916 50,783 ------------ ------------ Total Current Liabilities 6,578,140 5,773,240 ------------ ------------ Long Term Debt Long Term Debt 168,603 -- Due to shareholder 1,890,000 1,890,000 ------------ ------------ Total Long Term Debt 2,058,603 1,890,000 Total Liabilities 8,636,743 7,663,240 ------------ ------------ DHB CAPITAL GROUP, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS UNAUDITED (continued) JUNE 30, DECEMBER 31, 1996 1995 ------------- --------------- Stockholders' Equity Preferred stock -- 219 Common stock 15,210 13,841 Additional paid-in capital 16,708,820 12,123,470 Common stock subscription receivable (575,000) (437,500) Retained earnings 1,210,316 101,938 ------------ ------------ Total Stockholders' Equity 17,359,346 11,801,968 ------------ ------------ Total Liabilities and Shareholders' Equity $ 25,996,089 $ 19,465,208 ============ ============
See Accompanying notes to financial statements DHB CAPITAL GROUP INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (LOSS) FOR THE THREE MONTHS ENDED JUNE 30,
UNAUDITED UNAUDITED 1996 1995 ------------ ------------ Net Sales $ 6,604,450 $ 2,617,430 Cost of sales 4,445,807 1,971,651 ------------ ------------ Gross Profit 2,158,643 645,779 Selling, general and administrative expenses 2,051,217 1,562,454 ------------ ------------ Income before other income (expense) 107,246 (510,675) Other Income (Expense) Interest expense, net of interest (94,072) (69,666) Dividend income 14,245 -- Realized gain (loss) on marketable securities 108,401 22,234 Unrealized gain (loss) on marketable securities 578,221 708,952 ------------ ------------ Total Other Income (Expense) 606,795 661,520 ------------ ------------ Income (loss) before income taxes 714,221 150,845 Income taxes 182,000 1,160 ------------ ------------ Net Income (loss) 532,221 149,685 Retained Earnings (Deficit) - Beginning 678,095 (112,765) ------------ ------------ Retained Earnings (Deficit) - End 1,210,316 36,920 ============ ============ Earnings (loss) per common share: Primary $ 0.025 $ 0.008 Fully Diluted $ 0.024 $ 0.008 Weighted average number of common shares outstanding after giving effect to the 50% stock dividend: Primary 21,670,790 17,945,700 Fully Diluted 22,192,790 17,945,700
See accompanying notes to financial statements. DHB CAPITAL GROUP INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (LOSS) FOR THE SIX MONTHS ENDED JUNE 30,
UNAUDITED UNAUDITED 1996 1995 ------------ ------------ Net Sales $ 13,649,078 $ 5,269,520 Cost of sales 9,540,335 3,488,886 ------------ ------------ Gross Profit 4,108,733 1,780,634 Selling, general and administrative expenses 3,762,751 2,148,611 ------------ ------------ Income before other income (expense) 345,987 (367,977) Other Income (Expense) Interest expense, net of interest (162,608) (88,385) Dividend income 16,135 -- Realized gain (loss) on marketable securities 94,416 39,087 Unrealized gain (loss) on marketable securities 1,126,663 610,392 ------------ ------------ Total Other Income (Expense) 1,074,606 561,094 ------------ ------------ Income (loss) before income taxes 1,420,593 193,117 Income taxes 312,215 13,660 ------------ ------------ Net Income (loss) 1,108,378 179,457 Retained Earnings (Deficit) - Beginning 101,938 (142,537) ------------ ------------ Retained Earnings (Deficit) - End 1,210,316 36,920 ============ ============ Earnings (loss) per common share: Primary $ 0.051 $ 0.010 Fully Diluted $ 0.050 $ 0.010 Weighted average number of common shares outstanding after giving effect to 50% stock dividend Primary 21,670,790 17,945,700 Fully Diluted 22,192,790 17,945,700
See accompanying notes to financial statements. DHB CAPITAL GROUP INC. AND SUBSIDIARIES STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30,
1996 1995 ----------- ----------- CASH FLOWS FROM OPERATING ACTIVITIES Net income (loss) $ 1,108,378 $ 179,457 ----------- ----------- Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 127,967 57,197 Deferred income taxes -- (5,999) Changes in assets and liabilities (Increase) Decrease in: Accounts receivable (1,741,348) 280,701 Marketable securities (3,127,471) (1,003,028) Inventories 440,184 (826,515) Prepaid expenses and other current assets (562,614) 47,417 Other assets (308,923) (918,644) Increase (Decrease) in: Accounts payable 319,657 551,761 Accrued expenses and other current liabilities 168,710 248,782 Deferred taxes payable 12,600 -- State income taxes payable 269,133 (19,500) ----------- ----------- Net cash provided (used) by operating activities (3,318,927) (1,408,371) CASH FLOWS FROM INVESTING ACTIVITIES Cash payments for the purchase of property (666,569) (93,954) Payments to acquire non-marketable securities (500,000) (875,000) ----------- ----------- Net cash provided (used) by investing activities (1,166,569) (968,954) ----------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES Principal payments on long term debt (14,970) -- Proceeds from the issuance of debt 243,573 -- Net proceeds from sale of common stock 4,449,000 2,010,000 Cost incurred from issuance of common stock -- (15,000) ----------- ----------- Net cash provided (used) by financing activities 4,677,603 1,995,000 ----------- ----------- NET INCREASE (DECREASE) IN CASH AND EQUIVALENT 192,107 (382,325) CASH AND CASH EQUIVALENTS - BEGINNING 475,108 407,425 ----------- ----------- CASH AND CASH EQUIVALENTS - END $ 667,215 $ 25,100 =========== =========== Supplemental Cash Flow Information Cash paid for interest and taxes Interest 285,238 28,923 Taxes 33,301 31,101
Noncash transactions: The Company had noncash transactions in March 1996 when the Company issued 180,000 shares of their common stock in lieu of a cash payment of $579,000 to acquire OPI and in June 1996 when the Company's preferred stock was converted into two shares of Common Stock for each share of preferred stock outstanding. DHB CAPITAL GROUP, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND 1995 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: ORGANIZATION/REPORTING ENTITIES The consolidated financial statements of DHB Capital Group, Inc. and Subsidiaries (the "Company") are unaudited and reflect all adjustments which are, in the opinion of management, necessary for a fair presentation of the financial position and operating results for the interim period. The consolidated Company includes the following entities: DHB Capital Group, Inc. DHB Capital Group Inc. ("DHB") was incorporated on October 22, 1992 under the laws of the State of New York. DHB was organized to seek, acquire and finance, as appropriate, one or more operating companies. On February 15, 1995, the holders of the common stock approved a re-incorporation of DHB as a Delaware corporation, through a merger with a newly formed Delaware corporation. Protective Apparel Corporation of America Protective Apparel Corporation of America ("PACA") was organized in 1975 and is engaged in the development, manufacture and distribution of bullet and projectile resistant garments, including bullet resistant vests, fragmentation vests, bomb projectile blankets and tactical load bearing vests. In addition, PACA distributes other ballistic protection devices including helmets and shields. PACA is dependent upon a few suppliers for the raw materials utilized to manufacture its products. On November 6, 1992, PACA became a wholly-owned subsidiary of DHB, when DHB purchased all of the issued and outstanding stock of PACA from PACA's former parent, E.S.C. Industries, Inc, for $800,000. The transaction was accounted for as a purchase and resulted in an excess purchase price over the fair market value of the identifiable assets acquired and liabilities assumed of $465,278, of which $312,086 was allocated to on-going government contracts and $153,192 was allocated to goodwill. Intelligent Data Corp. On April 1, 1994, the Company acquired 4,530,000 common shares (60.4% interest) and 1,100,000 preferred shares of stock in Intelligent Data Corp. ("ID"), in exchange for 425,000 shares of the Company's common stock. ID is engaged in the development of sophisticated telecommunication systems. On July 1, 1994, a put option was exercised by certain shareholders of ID resulting in an increase in the Company's ownership to 89.58%. In December 1994, the Company converted all of its preferred shares to common shares, increasing the Company's ownership to 98.35%. This transaction was accounted for as a purchase, and resulted in an excess purchase price over the fair value of identifiable assets acquired and liabilities assumed of $472,666 which was allocated to patents owned by ID. DHB Media Group, Inc. On April 15, 1994, DHB Media Group, Inc. ("Media"), a wholly-owned subsidiary of the Company acquired all of the outstanding common stock of Royal Acquisition Corp. in exchange for 100,000 shares of the Company's common stock, for a purchase price of $300,000. Subsequent negotiations resulted in the reduction of the acquisition cost by $36,550. Royal Acquisition Corp.'s primary assets were a film library and a loan receivable of $150,000. The transaction was accounted for as a purchase and resulted in the excess purchase price over the fair market value of $113,450, of which $54,000 was allocated to the film library and $59,450 was allocated to goodwill. Media intends to syndicate and market these films. The loan receivable was collected in full during the year ended December 31, 1994. NDL Products, Inc. On December 20, 1994, the Company through a newly organized, wholly-owned subsidiary, DHB Acquisition, Inc., ("Acquisition") purchased certain assets from a debtor-in-possession, N.D.L. Products, Inc. for $3,080,000. Acquisition did not assume any continuing obligations of the debtor-in-possession, nor did the management of the debtor-in-possession continue. On February 21, 1995, Acquisition changed its corporate name to NDL Products, Inc. NDL manufactures and distributes specialized protective athletic apparel and equipment. DHB Armor Group, Inc. On August 8, 1995, the Company started a new Delaware Corporation which is a wholly-owned subsidiary of the Company. The subsidiary, DHB Armor Group, Inc., ("Armor"), now wholly owns PACA and Point Blank Body Armor, Inc., ("Point Blank"). Point Blank Body Armor, Inc. In August 1995, the Company, through a wholly-owned subsidiary known as USA Fitness & Protection Corp, a Delaware Corporation, acquired from a trustee in bankruptcy certain assets of Point Blank Body Armor, L.P. and an affiliated company ("Old Point Blank"), for a cash payment of $2,000,000, free of all liabilities. Prior to the filing of the petition in bankruptcy, Old Point Blank had been a leading U.S. manufacturer of bullet-resistant garments and related accessories. After acquiring the Old Point Blank, USA Fitness & Protection Corp., amended its articles of incorporation to change their name to Point Blank Body Armor, Inc. ("Point Blank"). Orthopedic Products, Inc. On March 22 and March 26, 1996, the Company exchanged a total of 180,000 shares of its registered common stock to acquire 100% of the common stock of OPI, a Florida Corporation engaged in the manufacturing and distribution of orthopedic products to the medical industry. This transaction was accounted for as a purchase, and resulted in an excess purchase price over the fair value of identifiable assets acquired and liabilities assumed which was allocated to goodwill. Fifty thousand of these shares are restricted as follows: 25,000 shares cannot be sold until March 22, 1997 and 25,000 shares cannot be sold until March 22, 1998. PRINCIPLES OF CONSOLIDATION All material intercompany transactions have been eliminated in the consolidated financial statements. MARKETABLE/NON-MARKETABLE SECURITIES Effective for calendar year 1994, the Company adopted Financial Accounting Standards Board Statement No. 115 "Accounting for Certain Investments in Debt and Equity Securities." In accordance with this standard, Securities which are classified as "trading securities" are recorded in the Company's balance sheet at fair market value, with the resulting unrealized gain or loss recognized as income in the current period. Securities which are classified as "available for sale" are also reported at fair market value, however, the unrealized gain or loss on these securities is listed as a separate component of shareholder's equity. Non-marketable securities, such as investments in privately-held companies are carried at historical cost, if necessary, reduced by a valuation allowance to net realizable value. The Company actively seeks to acquire and finance, as appropriate, additional operating companies or interest therein. EARNINGS PER SHARE The computation of earnings per common share is based on the weighted average number of outstanding common shares outstanding during the period. Primary earnings per share and fully diluted earnings per share amounts assume the conversion of the Cumulative Convertible Preferred Stock, and the exercise of the stock warrants. 2. SUBSEQUENT EVENTS Private Placement-Common Stock During July 1996 the Company sold 50,000 shares of common stock in private placements for proceeds of $350,000. These shares have not been registered with the Securities and Exchange Commission. Declaration of a 50% Stock Dividend On July 1, 1996, the Board of Directors of the Company declared a 50% Stock Dividend payable on July 16, 1996, to shareholders of record as of July 15, 1996. As a result thereof, the number of outstanding shares of the Common Stock has been increased from 15,303,019 to 22,954,529. The weighted average number of shares and earnings per share have been restated to give effect to the 50% stock dividend. Merger with The Lehigh Group On July 8, 1996, the Company and The Lehigh Group, Inc entered into a definitive merger agreement whereby the Company would merge into a wholly-owned subsidiary of Lehigh. Lehigh, whose common stock is listed on the New York Stock Exchange, is engaged in the distribution of electrical supplies for export and import through its wholly-owned subsidiary HallMark Electrical Supplies Corp. If the merger is approved by the shareholders of the Company and Lehigh, then upon completion of the proposed transaction, the shareholders of the Company would receive shares of Lehigh which would represent approximately 97% of the issued and outstanding shares of Lehigh, with the balance of Lehigh's shares to be owned by the current shareholders of Lehigh including current officers and directors. There is no assurance this transaction will be consummated. Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. The following analysis of the Company's financial condition and results of operations should be read in conjunction with the financial statements, including the notes thereto, contained elsewhere in this report. Results of Operations Three Months ended June 30, 1996, compared to the three months ended June 30, 1995. Consolidated net sales of the Company for the quarter ended June 30, 1996 was $6,604,450 versus $2,617,430 for the quarter ended June 30, 1995. This 152% increase was primarily due to the inclusion of Point Blank, NDL and OPI. The Company had a consolidated net income for the three months ended June 30, 1996 and 1995 of approximately $532,000 and $151,000, respectively, principally because of the increased sales volume. Gross profit ratio for the three months ended June 30, 1996 increased to 33% compared to a gross profit percentage of 25% for the three months ended June 30, 1995. The Company's gross profit increased approximately $1,513,000 to $2,158,643 for the three months ended June 30, 1996 as compared to the three months ended June 30, 1995. The change in the gross profit ratio is primarily due to the diversity of the product mix being sold in the different companies. The Company's selling, general, and administrative expenses for the three months ended June 30, 1996 increased to $2,051,217 from $1,562,454 for the three months ended June 30, 1995. However, as a percentage of net sales, expenses decreased to 31% of net sales for the quarter ended June 30, 1996, compared to 60% for the quarter ended June 30, 1995. This decrease principally resulted from the efficiencies of operating NDL, Point Blank, and OPI at the same location and stricter fiscal controls. Interest expense, net of interest income, for the three months ended June 30, 1996 increased to $94,072 from $69,666 for 1995, principally due to increases in the borrowings of the Company. The Company had a net realized gain of $108,401 and an unrealized gain on its investments in marketable securities of $578,221 for the three months ended June 30, 1996, as compared to a net realized gain of $22,234 and an unrealized gain of $708,952 for the three months ended June 30, 1995. Six Months ended June 30, 1996, compared to the six months ended June 30, 1995. Consolidated net sales of the Company for the six months ended June 30, 1996, increased from $5,269,250 to $13,649,078. The increase was primarily due to the inclusion of Point Blank, NDL and OPI. The Company had a consolidated net income for 1996 and 1995 of approximately $1,108,000 and $179,000, respectively, principally because of the appreciation of marketable securities and increased sales volume. Gross profit in 1996 increased to 131% over 1995 to $4,108,733. The Company's gross profit ratio decreased from 34% in 1995 to 30% in 1996 due to the diversity of the product mix, certain products are being sold at lower margins. The Company's selling, general, and administrative expenses for 1996 increased to $3,762,751 from $2,148,611 in 1995. However, as a percentage of net sales, expenses decreased to 28% of net sales in 1996, compared to 41% in 1995. This decrease principally resulted from the efficiencies of operating NDL, Point Blank, and OPI at the same location and management's efforts to enforce tighter fiscal conrols. Interest expense, net of interest income, for the six months ended June 30, 1996 increased to $162,603 from $88,385 for 1995, principally due to increases in the borrowings of the Company. The Company had a net realized gain of $94,416 and an unrealized gain on its investments in marketable securities of $1,126,663 for the six months ended June 30, 1996, as compared to a net realized gain of $39,087 and an unrealized gain of $610,392 for the six months ended June 30, 1995. Liquidity and Capital Resources The Company's primary requirements over the next twelve months are to assist PACA, Point Blank, NDL, ID, Media, and OPI in financing their working capital requirements, and to make possible acquisitions. PACA, Point Blank, NDL, and OPI sell most of their products on 60-90 day terms, and working capital is needed to finance the receivables and inventory. The Company's principal sources of cash to date have been proceeds from private offerings of the Company's securities, and, as more fully set forth below, term bank loans of up to a year's duration, guaranteed by Mr. David H. Brooks, Chairman of the Board, and certain affiliated persons. A term note to Chase came due on December 4, 1995, and was paid with proceeds of a new loan (the "BNY Loan") from the Bank of New York ("BNY"), bearing interest at 6.43%. The Chase Loan is secured by a security interest in the marketable investment securities of the Company and certain marketable investment securities of the majority shareholder. The Company expects to renew these loans, at prevailing interest rates, when they become due. Of the proceeds drawn down to date, $1,400,000 were used by the Company to refinance PACA's obligations to another financial institution, and $1,150,000 were used to purchase the NDL Assets and provide NDL with working capital. The Chase note for $1,150,000 bears interest at 6.255% per year. Mr. David H. Brooks, Chairman of the Board, and/or his wife, Mrs. Terry Brooks, made term loans due in April, 1997 of $1,890,000, bearing interest at 9% per year. Mr. and Mrs. Brooks also entered into a collateral agreement [third party] (the "Collateral Agreement") with Chase to pledge certain marketable securities owned by Mr. Brooks and Mrs. Brooks to partially secure the term loans and other obligations of the Company to Chase. In exchange for this, the Company granted to Mrs. Terry Brooks, on December 20, 1994, 5-year warrants to purchase 3,750,000 shares of the Company's Common Stock, at a price of $1.33 per share. The warrants contain provisions for a one-time demand registration, and piggy-back registration rights. All of the aforesaid loans were made directly to the Company, and the Company has loaned the proceeds to NDL. Mr. David Brooks also loaned $2,000,000 to the Company to provide the funds needed to purchase the Point Blank Assets. $1,250,000 have been repaid thus far. Mr. and Mrs. Brooks have also pledged certain of their personal assets to secure the BNY Loan. The Company relocated substantially all the NDL, Point Blank, and OPI's assets to a 67,000 square foot office and warehouse facility located at 4031 N.E. 12th Terrace, Oakland Park, Florida 33334, which is now owned by affiliates of Mr. Brooks. In January 1996, the Company purchased a new corporate headquarters located in Old Westbury, New York. The Company's consolidated working capital at June 30, 1996 and 1995 were $12,794,460 and $5,388,292, respectively. The Company believes that it has sufficient resources to meet its working capital requirements for the next twelve months. ID's working capital requirements are to finance the manufacturing and marketing costs associated with its initial product, and research and development costs associated with product enhancements and new products. ID's principal sources of working capital will be generated from borrowings. Media's working capital requirements will be determined as different avenues for the exploitation of its film library are researched and developed. The film library is not expected to bring in significant revenues to the Company. The Company believes that it has sufficient funds to meet Media's anticipated needs for the next twelve months. The Company invested approximately $3,816,750 (as of June 30, 1996, on a historical cost basis) in the securities of certain privately held companies, which are included in "Investments in Non-marketable Securities" on the Company balance sheet. Effect of Inflation and Changing Prices. The Company did not experience increases in raw material prices during the six month period ended June 30, 1996 an 1995. The Company believes it will be able to increase prices on their products to meet future price increases in raw materials, should they occur. PART II. OTHER INFORMATION Item 1. Legal Proceedings On May 23, 1996, the Company initiated a lawsuit against the former president of NDL, Barry Finn, for one milion dollars alleging breach of contract and failure to perform the duties required by him. The lawsuit is in the preliminary stage and it is too early to determine what the outcome will be. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed by the undersigned, thereunto duly authorized. Dated: August 12, 1996 DHB CAPITAL GROUP INC. /S/ David Brooks ---------------- Chairman of the Board Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed on behalf of the Registrant and in capacities and at the dates indicated: Signature Capacity Date /S/ David Brooks Chairman of the Board August 12, 1996 - ---------------- /S/ Mary Kreidell Chief Financial Officer August 12, 1996 - ----------------- /S/ Mel Paikoff Director August 12, 1996 - --------------- EX-27 2
5 6-MOS DEC-31-1996 JUN-30-1996 667,215 4,957,327 5,560,919 80,695 7,416,015 19,372,600 1,615,668 433,196 25,996,089 6,678,140 0 15,210 0 0 17,344,136 25,996,089 13,649,078 13,649,078 9,540,335 3,762,751 0 0 (162,603) 1,420,593 312,218 1,108,375 0 0 0 1,108,375 .051 .050
-----END PRIVACY-ENHANCED MESSAGE-----