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SECURITIES AND EXCHANGE COMMISSION PRIVATE
Washington, D.C. 20549
Form 10-K
Annual Report Pursuant to Section 13 or 15 (d)
of the Securities Exchange Act of 1934
For the Fiscal Year May 31, 1999 Commission File No, 0-9966
Haber, Inc.
(Exact name of registrant as specified in its charter)
Delaware 22-2305613
State or other jurisdiction of (I.R.S., Employer
incorporation or organization Identification No.)
470 Main Road Towaco, New Jersey 07082
(Address or principal executive office) (Zip Code)
Securities registered pursuant to Section 12 (b) of the Act:
None
Securities registered pursuant to Section 12 (q) of the Act:
Common Stock, par value $0.01 par share
$2.00 Convertible Voting Preferred Stock,
par value $10 par share
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 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 ruling requirements for the past 90 days:
Yes _____ No ___X___
As of May 31, 1999, the aggregate market value of the voting stock held by
non-affiliates of the Registrant was approximately $5,460,983.
As of May 31, 1999, the number of shares outstanding of the Registrant's
common stock was: 76,667,569 shares.
Documents incorporated by reference: None
ITEM 1
"BUSINESS"
"General"
The Registrant* has developed advanced chemical and electrochemical process
technologies for separations, extractions and purifications. The Company will
now focus on commercializing these technologies through joint ventures or
subsidiaries.
The Registrant's strategy is to develop and market application devices upon
its ElectroMolecular Propulsion ('EMP') technology and to acquire interests,
assets and earnings in exchange for rights to use its technologies. The
Registrant may also seek to directly acquire technology or may seek licenses,
joint venture or other arrangements with larger industrial partners.
PRIVATE Patents and Trade Secrets tc \l 1 "Patents and Trade Secrets"
A U.S. patent covering EMP technology was granted to Norman Haber in 1976 and
an extension of that patent was granted to Mr. Haber in 1979. The patents
would have expired in April of 1993. However, recent changes in U.S. patents
add three more years until 1996. The original patents covering the EMP
technology, which were granted to Mr. Haber in 16 foreign countries and
assigned to the Registrant, expired in 1996.
The Registrant is in a position for prioritizing its advanced EMP technology
and Know-how for further patent application. It is prepared to file
additional patent applications or prioritization relating to specific aspects
of the EMP technology with the U.S. Patent Office.
In addition to patent protection filed or intended, the Registrant expects to
rely on a material extent on selected unpatented proprietary know-how with
respect to its various technologies. However, there can be no assurances that
others will not independently develop such know-how or otherwise obtain access
to the Registrant's know-how despite the Registrant's efforts to maintain its
confidentiality, which includes obtaining secrecy agreements from its
employees.
Employees
In 1999, the Company retained: 1 employee and 2 independent consultants.
Government Regulation
If Haber, Inc. markets its EMP instruments for use in clinical applications,
blood analyzers and other medical devices, it will be subject to regulation
by the Bureau of Medical Devices of the United States Food and Drug
Administration.
A principal feature of such regulation is that, if the devices should be
deemed not to be substantially equivalent to those already on the market, they
could not be used until specifically approved by the Bureau of Medical
Devices. The Registrant did not consider to seek approval or to seek a
determination whether any such devices will require such approval or that
seeking such approvals would not present a major obstacle. The process of
obtaining approval, or a determination that approval is not required, could
cause material delay in the introduction of any of these products. However,
it is not anticipated, that this would necessarily occur.
ITEM 2
PROPERTIES
The Registrant maintains laboratory and general office facilities in one
building leased by the registrant and located in Towaco, New Jersey. The
building has a total of approximately 2,500 square feet of space. Included in
these facilities 3 laboratories, a prototype machine shop, and a small
area for pre-piloting processing. These facilities house the equipment
necessary for the Registrant to conduct its research and development
activities for the foreseeable future.
ITEM 3
LEGAL PROCEEDINGS
The Registrant is in contention with the Department of Environmental
Protection ("DEP") in New Jersey and currently has appeared informally before
the court and with a legal representative of the DEP to try to determine
a settlement penalty with the Registrant for having neglected two filings of
septic sampling and analysis not timely reported in 1990. The DEP is
cognizant that the Registrant operated an analytical laboratory that is duly
authorized by the DEP in New Jersey and qualified before the U.S.
Environmental Protection Agency.
In September 1993, the Company settled this penalty for $22,500 to be paid in
four semi-annual installments of $5,000 and one final semi-annual installment
of $2,500 plus interest at 5.5% beginning October 1993. Since only one
payment has been made on the settlement to date, the entire amount which
totals $21,927 including interest, is currently due and is included in
accounts payable.
There are no other pending legal proceedings to which the Registrant is a
party or of which any of their property is subject.
ITEM 4
SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS
NONE
PART II
MARKET FOR REGISTRANT'S COMMON EQUITY
& RELATED STOCKHOLDER MATTERS
The Registrant's common stock is traded "over the counter" and is listed in
the National Market System. The table below sets forth the ranges of the
last sales prices of the Common Stock during each quarter after June 1,
1997. The quotations reflect dealer prices without markup, markdown or
commissions and do not necessarily represent actual transactions.
Quarter Ended:1998 High Low
08/31/98 .096 .075
11/30/98 .087 .061
2/28/99 .070 .040
5/31/99 .120 .061
1999 High Low
8/31/97 .25 .08
11/30/97 .25 .08
2/28/98 .06 .04
5/31/98 .13 .08
On May 31, 1999, the last sale price of the Registrant's common stock was
$.12 and the number of holders of record of the Registrant's Common Stock
was approximately 2,203.
No cash dividends have been paid on the Common Stock of the Registrant
since its incorporation and the Registrant intends to retain its earnings,
if any, for use in its business.
HABER, INC. A Development Stage Enterprise
PRIVATE Selected Financial Data
ITEM 6
Cumulative
From Inception 1999 1998 1997 1996 1995
Statement of
Operations
Data
- - Revenues $ 1,960,068 $ - $ 14,891 $ 11,748 $ - $ -
- - Directed
Expenses 1,519,575 - 105,103 43,724 - -
- - General
Administrative
Expenses 12,483,158 1,264,882 245,208 278,477 252,374 360,524
- - Research
Development
Expenses (5,048,398) 20,878 - - - 3,455
- - Operating
(loss) (18,095,854) (1,285,760) (335,330) (310,453) (284,628)(363,979)
- - Interest
Income 1,025,917 3,135 747 - - -
- - Net (loss) (21,931,112) (1,282,625) (337,220) (301,344) (359,728)(401,483)
- - Net (loss)
per share (.02) (.01) (.01) (.01) (.02)
Balance Sheet Data
- - Working Capital (177,786) (304,803) (225,463) (286,932) (555,697)
- - Total assets 97,565 61,570 58,842 82,521 58,150
- - Total Liabilities 260,335 322,661 243,744 311,518 566,601
- - Stockholders' (deficit) (162,770) (261,091) (184,900) (246,997) (508,351)
Item 7
MANAGEMENT'S DISCUSSION & ANALYSIS OF FINANCIAL CONDITIONS
& RESULTS OF OPERATIONS
Results of Operations
The Registrant controls the proprietary operational features and key
science insights for the technology called ElectroMolecular Propulsion
("EMP"), which it believes has broad application in the chemical,
biomedical and electronic fields. EMP is a fundamental electrokinetic
technology invented by Norman Haber. Essentially, EMP is a method of
transporting a broad variety of molecules by means of an electrical field.
This ability, enhanced by other characteristics of the technology,
indicates that EMP has a range of applications in chemical analytical
instrumentation, extraction, purifications, control of chemical reactions,
electronic imaging and other electronic uses.
More than 100 application protocols have been completed for use with the
EMP instrument for use with dyes, proteins, etc. Such pre-figured
protocols are an important user-friendly feature for the sale and use of
the 15K-1 instrument in niche markets. It enables the user to program the
EMP instrument for their particular application chemistry, analysis and
quality control.
The Registrant will continue to effect reductions in its operating expenses
while conforming with continuing operations with the limited amount of
working capital available. This policy will continue until revenue from
sales or adequate refinancing enables otherwise. The Company is currently
leasing its facility in Towaco, NJ. It is anticipated that the Registrant
will continue to lease its site at the current address in 1999.
1999 Compared with 1998
The net loss for 1999 increased by $920,008 due mainly to increases in
shares of stock issued for services rendered.
The Registrant has continued its activities regarding the development of
niche market applications for its EMP analytical instrumentation. Having
decided on applications for the dye industry, Registrant joined the
American Association of Textile Chemists and Colorists (AATCC) and attended
the annual AATCC meeting and exhibition in Louisville, KY. Other
application projects and technical publications describing EMP
instrumentation application also are being considered.
The Registrant has undertaken steps toward the re-engineering of its EMP
15K model with the view of producing an upgraded digitized and computer
compatible instrument. These units can be subcontracted through instrument
manufacturers.
Dr. Henry Rosenberg Ph.D. (chemistry) has joined the Company and has become
conversant with both the EMP technology and the proprietary "Haber Gold
Process". Dr. Rosenberg has had extensive sales and marketing experience
with scientific instrumentation and shall also serve for marketing EMP
instrumentation.
1998 Compared with 1997
The net loss for 1998 increased by $35,876 to $337,220 due mainly to issuances
of shares of common stock for services rendered.
Liquidity and Capital Resources
The Registrant's working capital deficiency, which fluctuates, must be
supplemented in order to meet the demands upon working capital occasioned
by the Registrant's continued operating losses. There continues to be an
ongoing need for additional funds to finance development and
commercialization of projects built around the Registrant's technologies.
During the year ended May 31 1999, the Registrant issued 4,926,334 shares
of common stock for $190,900 in cash.
There can be no assurance that the Registrant will have continuing success
in any of these efforts. The effects of inflation during the recent years
has had little impact on the Registrant and will continue to be
insignificant.
ITEM 8
FINANCIAL STATEMENTS & SUPPLEMENTING DATA
See Index to Financial Statements, Financial Statement Schedules and
Exhibits in Item 14.
ITEM 9
DISAGREEMENTS ON ACCOUNTING & FINANCIAL DISCLOSURE
None
PART III
ITEM 10
DIRECTORS & EXECUTIVE OFFICERS OF THE REGISTRANT
The Executive Officer and Directors of the Registrant are as follows:
PRIVATE
Director name Age Position with the Registrant Since
(date)
- - Norman Haber 70 Chairman, President, CEO & Director 1967
- - Warren Donohue* 59 Director 1989
- - Paul Buiar 74 Acting Director 1996
* Resigned June 10, 1999
Mr. Haber is the founder of the Registrant, and has been its Chairman,
President and Chief Executive Officer since inception. Mr. Haber holds a
BS degree in chemistry and an M.A in physiology and biological sciences
from the New York City University System. He is the Registrant's principal
scientist. Mr. Haber is the inventor of the EMP technology and co-
developer of the Haber Gold, Alpha and Haber-Lee Process. His work on EMP
has appeared in the Proceedings of the National Academy of Sciences.
Mr. Donohue has been the Executive Manager, Sales Administration, of Volvo
Cars North America for 33 years. He studied business at Fairleigh Dickinson
University. He is presently serving his third term as Councilman and
Commissioner of police in Alpine, New Jersey where he resides.
Mr. Paul Buiar is a specialist in political relations, communications and
news media, especially as related to national and international politics
including national presidential campaigns, governor and mayoralty campaigns
(NYC). He has also been involved with international campaigns. Mr. Buiar
has served as President of the International Association of Political
Consultants. For more than 20 years, he has also been the Executive
Director of the Inner Circle, a prestigious NYC based organization of
current and former journalists.
*The term of each officer of the Registrant expires at the next annual
meeting of its Board of Directors.
Item 11
EXECUTIVE COMPENSATION
Cash Compensation
The following table sets forth the total cash compensation paid by the
Registrant during the fiscal year May 31, 1999 and 1998 to the executive
officers and to all executive officers as a
group:
Name Capacities in Cash
Which Served Compensation
1999 1998
All executive officers as a group -0- -0-
(two persons)
Under the terms of understanding as approved and as indicated in the May
31, 1985 notes to financial statement Mr. Haber was awarded compensation
$86,000 per annum. Since 1989 Mr. Haber has received no cash compensation.
It is anticipated the Mr. Haber will receive compensation in future years
which will also include a portion of arrearages. If the accumulated
arrearages was recorded in the financial statements for the year ended
May 31, 1999, there would be an additional loss of $1,376,000 and this
would also, increase liabilities, reduce stockholders equity and increase
loss per share, by similar amounts.
Stock Options
The Registrant maintains a 1985 Officer's Stock Option Plan (the "Officers'
Plan").
The Officer's Plan provides that options to purchase the Registrant's
Common Stock may be awarded to officers of the Registrant by a committee
comprised of at least three directors who are not eligible under the
Officers Plan.
Options granted under the Officers Plan are non-incentive options and stock
appreciation rights may be provided at any time until the options are
exercised, terminated or cancelled. The exercise price of the options can
be fixed by the committee administering the Officers Plan at any amount,
which is not less than the par value of the shares subject to option. An
optionee may pay the exercise price of the options in cash or with the
Registrant's stock or with other property.
All options under the Officer's Plan will become exercisable as determined
by the committee administering the plan, and the committee may at any time
accelerate the time at which an option may be exercised. All options will
be nontransferable except by the laws of descent and distribution and,
generally, will be exercisable by the optionee only during the time he is
employed by the Registrant or within three months thereafter.
Compensation of Directors
Directors of the Registrant receive no cash compensation or expense
reimbursement in connection with their services as Directors.
ITEM 12
SECURITIES OWNERSHIP
OF CERTAIN BENEFICIAL OWNERS & MANAGEMENT
The table below sets forth certain information relating to the ownership of
the Registrant's Common Stock, as of December 1, 1992, by (1) the only
person who was known to the Registrant to be the beneficial owner of more
than five percent of such stock, (2) each of the Registrant's Directors and
(3) all Directors and Officers of the Registrant as a group. Each of the
persons listed has sole voting and investment power with respect to his
shares unless otherwise indicated in the notes of the table.
Name of No. of shares of Common %
Beneficial Owner Stock and Nature of Beneficial of class
Norman Haber 3,373,159 (1) 4.4%
Warren Donohue 310,000 *
Paul Buiar 171,308 *
All directors a group 3,854,467 4.4%
* Less than 1%
Nature of Beneficial Ownership
(1) Mr. Haber has the sole voting and investment power with respect to all
such shares except for 565,508 shares which are owned by his wife,
individually or as custodian for their two children.
ITEM 13
CERTAIN RELATIONSHIPS & RELATED TRANSACTIONS
It is also anticipated that, as incentives to retain management, the
Registrant's officers may be offered the opportunity to participate in the
equity of future ventures in which the Registrant may become involved.
PART IV
ITEM 14
EXHIBITS, FINANCIAL STATEMENTS,
SCHEDULES & REPORTS ON FORM 8-K
The following documents are filed as a part of this report.
1. Financial statements Page
Report of Independent Certified Public Accountants F-1 F-2
Balance Sheets as of May 31, 1999 and 1998 F-3 F-4
Statements of Income (Loss) and Retained Earnings
(deficit) for the years ended May 31, 1999, 1998,
1997 and from the inception to May 31, 1999 F-5
Statements of Changes in Stockholder's Equity from
Inception to May 31, 1999. F-6 F-11
Statements of Cash Flows for the years ended May 31,
1999, 1998 and 1997 and from the inception to
May 31, 1999. F-12 F-13
Notes to Financial Statement F-14 F-20
2. Schedule II - Valuation and Qualifying Accounts F-21
3. Exhibit 11 - Statement re: computation of earnings par
share F-22
3(a) (I) Restated Certificate of Incorporation of the
Registrant filed November 9 1984.
Incorporated by reference to exhibit 2 (a)
to the Registrant's. Registration Statement
on Form 8-A. Files with Commission on April
30, 1985 (commission File No. 0-9966).
(a) (ii) Certified of Designations of Series.
A Preferred Stock of the Registrant, filed
A November 20, 1984, Incorporated by
reference to exhibit 2 (b) to the
Exhibits Number Description of Exhibit
Registrant's Registration Statement
on Form 8-A filed with the
Commission on April 30, 1985
(Commission File No. 0-9966).
(b) By-Laws of the Registrant. (5)
4(a) Specimen of certificate for Common
Stock (1)
(b) Form of representative's Warrant (7)
(c) (i) Specimen form of certificate for
Convertible Preferred Stock (8)
(ii) Form of Class A Warrant (7)
(iii) Form of Class B Warrant (7)
(iv) Form of Warrant Agreement among the
Registrant and Continental Stock
Transfer & Trust Company (8)
(The Registrant will furnish the
Securities and Exchange Commission
upon request a copy of each
Instrument defining the rights of
the holders of the Registrant's long
term debt.
10(a) (i) Limited Partnership Agreement of
Lodestone Partners, Ltd. (3)
(a) (ii) Research and Development Agreement
between the Registrant and Lodestone
Partners, Ltd., dated October 10,
1980. (1)
(a) (iii) Agreement for sale of EMP Precious
Metals Application and Technology
(a) (iv) Amendment No. 1 to Agreement of
Limited Partnership of Lodestone
Partners, Ltd.(3)
(a) (v) Amendment No. 1 to Agreement for
Research and Development between the
Registrant and Lodestone Partners,
Ltd. dated October 10, 1980. (3)
Exhibit Number Description of Exhibits
(a) (vi) Amendment No.1 to Agreement for sale
of EMP Precious Metals Applications
and Technology between the
Registrant and Lodestone Partners,
Ltd. dated October 10, 1980.
(a) (vii) Agreement dated as of October 10,
1980 among the Registrant and
Lodestone Partners, LTD.(7)
(a) (viii) Agreement dated May 30, 1984 among
the Registrant, Norman Haber and
Lodestone Partners, Ltd.(7)
11 Statement re: computation of
earnings par share
22 List of subsidiaries of the
Registrant
(1) Incorporated by reference to the
corresponding exhibit to the
Registrant's Registration Statement
on Form 10 (file 0-9966)
(2) Incorporated by reference to the
corresponding exhibit to the
Registrant's Annual Report on Form
10-K for the fiscal year ended May
31, 1982 (File No. 0-9966)
(3) Incorporated by reference to the
corresponding exhibit to the
Registrant's Annual Report on Form
10-K for the fiscal year ended May
31, 1983 (File No. 0-9966)
(4) Incorporated by reference to the
corresponding exhibit to the
Registrant's Amendment No. 1 on Form
8 to its Annual Report on Form 10-K
for the fiscal year ended May 31,
1983 (File No. 0-9966)
(5) Incorporated by reference to the
corresponding exhibit to the
Registrant's Annual Report on Form
10-K for the fiscal year ended May
31, 1985 (File No. 00-9966)
Exhibit Number Description of Exhibits
(6) Incorporated by reference to the
corresponding exhibit to the
Registrant's Registration Statement
on Form S-l filed with the
Commission on May 31, 1985 (File No.
2-91444).
(7) Incorporated by reference to the
corresponding exhibit to Amendment
No. 3 to the Registrant's
Registration Statement on Form S-1
files with the commission on
November 6, 1984 (File No. 2-91444)
(8) Incorporated by reference to the
corresponding exhibit to Amendment
No.4 to the Registrant's Registration
Statement on Form S-1 filed with the
commission on November 16, 1984
(File No. 2-91444)
(9) Incorporated by reference to Exhibit
10.1 to the Registrant's Current
Report on Form 8-K filed with the
Commission in connection with events
of August 1, 1985 (File No. 0-9966).
(10) Incorporated by reference to the
corresponding exhibit to Registrant's
Annual Report on Form 10K for the
fiscal year ended May 31, 1986 (File
No. 0-9966).
(11) Incorporated by reference to the
corresponding exhibit to Registrant's
Annual Report on Form 10-K for the
fiscal year ended May 31, 1987 (File
No. 0-9966).
(12) Incorporated by reference to the
corresponding exhibit to Registrant's
Annual Report in Form 10-K for the
fiscal year ended May 31, 1988 (File
No. 0-9966).
(b) reports on Form 8-K
The Registrant did not file any
reports on Form 8-K during the last
quarter of the period covered by
this report.
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities
Exchange Act of 1934, the Registrant has duly undersigned, thereunto duly
authorized.
Dated: December 13, 1999
HABER, INC.
(Registrant)
Norman Haber
______________________
Norman Haber, Chairman
Pursuant to the requirements of 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.
Dated: December 13, 1999
Norman Haber
_________________________
Norman Haber
Haber Inc., Chief Executive Officer and Director
(Principal Executive Officer)
Dated: December 13, 1999
Warren Donohue
_________________________
Warren Donohue, Director
GERALD BRIGNOLA, CPA., P.A.
CERTIFIED PUBLIC ACCOUNTANT
A Professional Corporation
One University Plaza, Suite 505, Hackensack, NJ 07601
201-343-8130 - Fax 201-343-9224
Gerald Brignola Michael Chase
Anthony Capricuso Michael J. Nardino
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Stockholders and Board of Directors
Haber, Inc.
470 Main Road
Towaco, New Jersey 07082
We have audited the accompanying balance sheets of Haber, Inc. as of
May 31,1999 and May 31, 1998 and the related statements of income,
retained earnings, and cash flows for the year then ended. These
financial statements are the responsibility of the Company's management.
We have been asked to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provide a
reasonable basis for the conclusion stated herein.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 3 to the
Financial statements, the Company has suffered recurring losses from
operations and has a net capital deficiency that raise substantial doubt
about its ability to continue as a going concern. Management's plans in
regard to these matters are also described in Note 3. The financial
statements do not include any adjustments that might result from the outcome
of this uncertainty.
In addition, as discussed in Note 11 B(2), our audit revealed a disclaimed
legal opinion letter in connection with the issuance of common stock for
Certain services.
Because of the significance of the uncertainty of the Company's ability to
continue as a going concern, as discussed in paragraph 3, and the possible
material effects that the matter described in paragraph 4 may have on
the company's financial position, results of operations and cash flows, the
outcome of which is uncertain, we do not express an opinion on the financial
statements for the period ended May 31, 1999.
In our opinion the financial statements at May 31, 1999, present fairly,
in all material respects, the financial position of Haber, Inc. The
results of their cash flows from inception through May 31, 1999 and for each
of the two years in the two-year period ended May 31, 1999, in conformity with
generally accepted accounting principles.
Our audits were made to form an opinion on the basis of the financial
Statements taken as a whole. The supplemental schedules listed in the index to
the financial statements and schedules are presented to comply with rules and
regulations under the Securities and Exchange Act of 1934 and are not
otherwise a required part of the basic financial statements. The
supplemental schedules for the periods ended May 31, 1999 and May 31, 1998
have been subjected to the auditing procedures applied in the audits of the
basis financial statements.
In our opinion, the supplemental schedules for the period ended May 31, 1999
fairly states in all material respects the financial data required to be set
forth therein in relation to the basic financial statements taken as a whole.
However, because of the situations described in paragraphs 3 and 4, we do
not express an opinion on the supplemental schedule for the period ended
May 31, 1999.
GERALD BRIGNOLA, CPA., PA
Hackensack, NJ
December 14, 1999
Haber, Inc. A Development Stage Enterprise
Balance Sheets
May 31 PRIVATE
1999 1998
Assets
- - Currents Assets
Cash $70,799 $ 6,108
Inventory 11,750 11,750
------- --------
82,549 17,858
------- --------
- - Furniture and Equipment
Equipment 339,167 332,958
Furniture and Fixtures 99,514 99,514
------- --------
438,681 432,472
Less:Accumulated depreciation and amortization 428,814 425,763
------- --------
9,867 6,709
------- --------
Other Assets
- - Patent costs and licenses - net of accumulated
amortization of $30,659 and $30,659, respectively. 0 0
- - Security deposit 2,149 37,003
- - Other assets 3,000 0
------- --------
5,149 37,003
------ --------
$ 97,565 $ 61,570
------ --------
------ --------
See notes to financial Statement
Haber, Inc. A Development Stage Enterprise
Balance Sheets
May 31
1999 1998
Liabilities and Stockholders (Deficit)
- - Currents Liabilities
Accounts payable $ 62,746 $ 51,682
Accrued expenses -0- 19,383
Due to related parties 189,270 218,895
Payroll other taxes payable 1,860 15,201
Deposit payable 3,570 17,500
--------- -----------
Total Liabilities 257,446 322,661
---------- -----------
- - Commitments and Contingencies
- - Stockholder (Deficit)
Common stock-$.01 par value-150,000,000
shares authorized; 76,667,567 and
56,754,373 shares issued, respectively. 766,676 532,044
- - Preferred stock - $10 par value - 600,000
shares authorized; 145,408 shares and
146,108 shares issued respectively. 1,462,080 1,463,080
- - Capital in excess of par value 20,953,192 19,878,488
- - Stock subscription receivable (36,033) ( 107,733)
- - (Deficit) accumulated during the
development stage. (21,931,112) (20,651,286)
--------- -------------
(1,215,803) 1,114,593
Less: Treasury stock - 115,137 shares
- at cost 1,375,684 1,375,684
----------- -------------
(159,881 (261,091)
----------- -------------
$ 97,565 $ 61,570
----------- -------------
----------- -------------
See notes to financial statements
Haber, Inc. A Development Stage Enterprise
Statements of Operations
Cumulative For the Years Ended
from Inception May 31
1999 1998 1997
- - Revenues 1,960,068 - $ 14,891 $ 11,748
- - Direct Expenses 1,519,485 - 105,013 43,724
---------- --------- -------
- - Gross Profit (loss) 440,583 - (90,122) (31,976)
---------- --------- -------- -------
- - General and Administrative
Expenses 12,483,158 1,261,993 245,208 278,477
- - Research and Development
Expenses 5,048,398 20,878 - -
- - Provision for Uncollectible
Advances to Affiliates 1,004,881 - - -
----------- ---------- -------- --------
18,536,437 1,282,871 245,208 278,477
----------- ---------- -------- --------
- - (Loss) Before Other Income
(Expenses) (18,095,854) (1,282,871) (335,330) (310,453)
------------ --------- --------- --------
- - Other Income (Expenses)
Interest Income 1,025,917 381 747 9,109
Other Income 334,864 2,754 - -
Interest (expense) (96,329) - (2,637) -
(Loss) on investments in
affiliates (5,142,591) - - -
Gain on disposition of
fixed assets 42,881 - - -
------------ ----------- --------- ------
(3,835,258) 3,135 (1,890) 9,109
----------- ----------- --------- -------
- - Net (Loss) (21,931,112) $(1,279,736) $337,220 $(301,344)
------------ ------------ --------- ---------
- - (Loss) per Share - (.018) $ (.01) $ (.01)
- - Weighted Average Common Shares
Outstanding During the Period - 69,955,962 49,799,193 45,773,094
See notes to Financial statements
Haber, Inc. A Development Stage Enterprise
Statement of Changes in Stockholder's Equity
Inception through May 31, 1998
Special Voting
Common Stock Common Stock
Shares Amounts Shares Amounts
Inception (1967) through
May 31, 1988 10,609,622 106,096 - -
Stock issued for services 6,375 64 - -
Conversion of preferred stock 1,838 18 - -
Stock issued as collateral 165,000 1,650 - -
Cash in private offering 837,239 8,372 - -
Correction of prior issuance (23,174) (231) - -
Warrants expired - - - -
Stock issued in payment
of interest 30,000 300 - -
Equity resulting from outside - - - -
Investment in subsidiary - - - -
Net (loss) for the year - - - -
---------- ------- ------- -------
Balance Forward - May 31,1989 11,626,900 116,269 - -
Haber, Inc. A Development Stage Enterprise
Statements of Changes in Stockholders' Equity
Inception Through May, 31 1998
Convertible Special Voting
Preferred Stock Preferred Stock
Shares Amounts Shares Amounts
Inception (1967) through
May 31, 1988 152,926 1,529,260 - -
Stock issued for services - - - -
Conversion of preferred stock (1,100) (11,000) - -
Stock issued as collateral - - - -
Cash in private offering - - - -
Correction of prior issuance - - - -
Warrants expired - - - -
Stock issued in payment
of interest - - - -
Equity resulting from outside - - - -
Investment in subsidiary - - - -
Net (loss) for the year - - - -
________ _________ ________ ________
Balance Forward - May 31,1989 151,826 1,518,260 - -
See notes to financial statements
Haber, Inc. A Development Stage Enterprise
Statements of Changes in Stockholders' Equity
Inception Through May, 31 1998
Capital in Subscription Retained
Excess of Receivable Earnings
Par Value Warrants (Deficit)
Inception (1967)
through May 31, 1988 12,110,316 1,258,133 - (13,700,108)
Stock issued for services - - - -
Conversion of preferred stock 10,982 - - -
Stock issued as collateral (1,650) - - -
Cash in private offering 535,228 - - -
Correction of prior issuance (20,622) - - -
Warrants expired 1,258,133 (1,258,133) - -
Stock issued in payment
of interest - - - -
Equity resulting from outside - - - -
Investment in subsidiary 1,770,187 - - -
Net (loss) for the year - - - (2,613,093)
_________ __________ __________ ___________
Balance Forward-May 31,1989 15,662,574 - - (16,313,201)
See notes to financial statements
Haber, Inc. A Development Stage Enterprise
Statements of Changes in Stockholders' Equity
Inception Through May, 31 1998
Deferred
Unearned Total
Treasury Stock Compensation Shareholder
Stock Option Equity
Shares Amount Plan (Deficit)
Inception (1967) through
May 31, 1988 223,038 (1,397,444) - (93,747)
Stock issued for services - - - 64
Conversion of preferred stock - - - -
Stock issued as collateral - - - -
Cash in private offering - - - 543,600
Correction of prior issuance (6,413) 20,760 - (93)
Warrants expired - - - -
Stock issued in payment
of interest - - - 300
Equity resulting
from outside - - - -
Investment in subsidiary - - - 1,770,187
Net (loss) for the year - - - (2,613,093)
------- ---------- -------- ----------
Balance Forward-May 31,1989 216,625 (1,376,684) - (392,782)
------- ---------- -------- ----------
See notes to financial statements
Haber, Inc. A Development Stage Enterprise
Statements of Changes in Stockholders' Equity
Inception Through May, 31 1998
Special Voting
Common Stock Common Stock
Shares Amount Shares Amount
Balance Forward-May 31, 1989 11,626,900 116,269 - -
Treasury shares previously
arising in consolidation - - - -
Stock issued for services 400,000 4,000 - -
Conversion of preferred
stock 1,503 15 - -
Stock issued in payment of
debit and interest 3,634,809 36,348 - -
Cash in private offering 40,000 400 - -
Correction of private issuance (2,000) (20) - -
Stock issued for compensation 251,114 2,511 - -
Warrants issued for
compensation - - - -
Net (loss) for the year - - - -
---------- ------- -------- --------
Balance - May 31, 1990 15,952,326 159,523 - -
Stock issued for services 1,850,993 18,510 - -
Conversion of warrants 200,000 2,000 - -
Cash in private offering 1,517,641 15,177 - -
Correction of prior issuance 20,400 204 - -
Net (loss) for the year - - - -
---------- ------- -------- -------
Balance - May 31, 1991 19,541,360 195,414 - -
Stock issued for services 461,875 4,619 - -
Stock issued in payment
of liabilities 755,040 7,550 - -
Cash in private offering 1,404,995 14,050 - -
Correction of prior issuance (90,767) (908) - -
Conversion of preferred stock 2,304 23 - -
Conversion of warrants 915,000 9,150 - -
Net (loss) for the year - - - -
---------- ------- -------- --------
Balance forward-May 31, 1991 22,989,807 229,898 - -
See notes to financial statements
Haber, Inc. A Development Stage Enterprise
Statements of Changes in Stockholders' Equity
Inception Through May, 31 1998
Convertible Special Voting
Preferred Stock Preferred Stock
Shares Amount Shares Amount
Balance Forward-May 31, 1989 151,826 1,518,260 - -
Treasury shares previously
arisingin consolidation - - - -
Stock issued for services - - - -
Conversion of preferred stock (900) (9,000) - -
Stock issued in payment
of debit and interest - - -
Correction of private issuance - - - -
Stock issued for compensation - - - -
Warrants issued for compensation - - - -
Net (loss) for the year - - - -
_______ _________ __________ _________
Balance - May 31, 1990 150,926 1,509,260 - -
Stock issued for services - - - -
Conversion of warrants - - - -
Cash in private offering - - - -
Correction of prior issuance - - - -
Net (loss) for the year - - - -
_______ ________ _________ ________
Balance - May 31, 1991 150,926 1,509,260 - -
Stock issued for services - - - -
Stock issued in payment
of liabilities - - - -
Cash in private offering - - - -
Correction of prior issuance - - - -
Conversion of preferred stock (1,379) (13,790) - -
Conversion of warrants - - - -
Net (loss) for the year - - - -
-------- --------- ---------- -------
Balance forward - May 31, 1991 149,547 1,495,470 - -
See notes to financial statements
Haber, Inc. A Development Stage Enterprise
Statements of Changes in Stockholders' Equity
Inception Through May, 31 1998
Capital in Warrants Subscription Retained
Excess of Amount Receivable Earnings
Par Value (Deficit)
Balance Forward-May 31,1989 $15,662,574 $ - $ - $(16,313,201)
Treasury shares previously
arising in consolidation - - - -
Stock issued for services 55,400 - - -
Conversion of preferred
stock 8,985 - - -
Stock issued in payment
of debit and interest 910,910 - - -
Cash in private offering 9,600 - - -
Correction of private
issuance - - - -
Stock issued for
compensation 66,353 - - -
Warrants issued for
compensation 107,520 - - -
Net (loss) for the year - - - (982,263)
--------- -------- -------- -----------
Balance - May 31, 1990 16,821,342 - - (17,295,464)
Stock issued for services 99,236 - - -
Conversion of warrants 8,000 - - -
Cash in private offering 211,649 - - -
Correction of prior issuance 396 - - -
Net (loss) for the year - - - (776,330)
---------- -------- --------- -----------
Balance - May 31, 1991 17,140,623 - - (18,071,794)
Stock issued for services 91,282 - - -
Stock issued in payment
of liabilities 218,260 - - -
Cash in private offering 471,450 - - -
Correction of prior issuance - - -
Conversion of preferred stock 13,767 - - -
Conversion of warrants 19,000 - - -
Net (loss) for the year - - - (530,965)
---------- -------- --------- ------------
Balance forward-May 31, 1991 17,954,382 - - (18,602,759)
See notes to financial statements
Haber, Inc. A Development Stage Enterprise
Statements of Changes in Stockholders' Equity
Inception Through May, 31 1998
Deferred Total
Treasury Stock Unearned Stockholders
Compensation Equity
Shares Amount Plan (Deficit)
Balance Forward
- -May 31, 1989 216,625 (1,376,684) - (392,782)
Treasury shares previously
arising in consolidation (100,000) 1,000 - 1,000
Stock issued for services - - - 59,400
Conversion of preferred
stock - - - -
Stock issued in payment
of debit and interest - - - 947,258
Cash in private offering - - - 10,000
Correction of private
issuance - - - (20)
Stock issued for
compensation - - - (68,864)
Warrants issued for
compensation - - - 107,520
Net (loss) for the year - - - (982,263)
------- ---------- --------- ------------
Balance - May 31, 1990 116,625 (1,375,684) - (181,023)
Stock issued for services - - - 117,746
Conversion of warrants - - - 10,000
Cash in private offering - - - 226,826
Correction of prior issuance - - - 600
Net (loss) for the year - - - (776,330)
-------- ---------- ---------- -----------
Balance - May 31, 1991 116,625 (1,375,684) - (602,181)
Stock issued for services - - - 95,901
Stock issued in payment
of liabilities - - - 225,810
Cash in private offering - - - 485,500
Correction of prior issuance - - - (908)
Conversion of preferred stock - - - -
Conversion of warrants - - - 28,150
Net (loss) for the year - - - (530,965)
--------- ---------- --------- -----------
Balance forward-May 31, 1991 116,625 (1,375,684) - (298,693)
See notes to financial statements
Haber, Inc. A Development Stage Enterprise
Statements of Changes in Stockholders' Equity
Inception Through May, 31 1998
Common Stock Special Voting
Common Stock
Shares Amount Shares Amount
Balance - May 31, 1992
22,989,807 229,898 - -
Stock issued for services 629,800 6,298 - -
Cash in private offering 1,274,343 12,743 - -
Net (loss) for the year - - - -
---------- ------- ------- -------
Balance - May 31, 1993
24,893,950 248,939 - -
Cash in private offering 993,703 9,937 - -
Shares issued for services 463,000 4,630 - -
Conversion of warrants 87,000 870 - -
Stock returned from directors (1,709,915) (17,099) - -
Net (loss) for the year - - - -
Stock issued by unconsolidated
subsidiary - - - -
----------- -------- -------- -------
Balance Forward May 31, 1993 24,727,738 247,277 - -
See notes to financial statements
Haber, Inc. A Development Stage Enterprise
Statements of Changes in Stockholders' Equity
Inception Through May, 31 1998
Convertible Special Voting
Preferred Stock Preferred Stock
Shares Amount Shares Amount
Balance - May 31, 1992 149,547 1,495,470 - -
Stock issued for services - - - -
Cash in private offering - - - -
Net (loss) for the year - - - -
Balance - May 31, 1993 149,547 1,495,470 - -
Cash in private offering - - - -
Conversion of warrants - - - -
Stock resumed from directors - - - -
Net (loss) for the year - - - -
------- --------- ------- ---------
Balance forward - May 31, 1993 149,547 1,495,470
See notes to financial statements
Haber, Inc. A Development Stage Enterprise
Statements of Changes in Stockholders' Equity
Inception Through May, 31 1998
Capital in
Excess of Warrants Subscription Retained
Par Value Amount Receivable Earnings
(Deficit)
Balance - May 31, 1992 17,954,382 - - (18,602,759)
Stock issued for services 63,817 - - -
Cash in private offering 362,102 - - -
Net (loss) for the year - - - (348,661)
__________ _______ __________ __________
Balance - May 31, 1993 18,380,301 - - (18,951,420)
Cash in private offering 107,703 - - -
Shares issued for services - - - -
Conversion of warrants 1,820 - - -
Stock returned from directors 17,099 - - (300,091)
Net (loss) for the year - - - -
Stock issued by unconsolidated
subsidiary 149,720 - - -
Balance forward-May 31, 1993 $18,656,643 $ - $ - $(19,251,511)
See notes to financial statements
Haber, Inc. A Development Stage Enterprise
Statements of Changes in Stockholders' Equity
Inception Through May, 31 1998
Treasury Stock Deferred Total
Shares Amount Unearned Stockholders
Compensation (Equity)
Plan (Deficit)
Balance - May 31, 1992 116,625 (1,375,684) - (298,693)
Stock issued for services - - - 70,115
Cash in private offering - - - 374,845
Net (loss) for the year - - - (348,661)
_______ __________ ________ __________
Balance - May 31, 1993 116,625 (1,375,684) - (202,394)
Cash in private offering - - - 117,640
Shares issued for services - - - 4,630
Conversion of warrants - - - 2,690
Stock resumed from directors - - - -
Net (loss) for the year - - - (300,091)
Stock issued by
unconsolidated subsidiary - - - 149,720
__________ _________ ________ __________
Balance forward
May 31, 1994 $ 116,625 $(1,375,684) $ - $ (227,805)
See notes to financial statements
Haber, Inc. A Development Stage Enterprise
Statements of Changes in Stockholders' Equity
Inception Through May, 31 1998
Special Voting
Common Stock Common Stock
Shares Amount Shares Amount
Balance Forward - May 31, 1994 24,727,738 247,277 - -
Cash in private offering 411,547 4,116 - -
Shares issued for services 2,012,590 20,126 - -
Conversion of warrants 105,081 1,051 - -
Stock returned from directors (210,000) (2,100) - -
Conversion of preferred stock 5,412 54 - -
Stock issued by unconsolidated
subsidiary - - - -
Net (loss) for year - - - -
--------- ------- -------- --------
Balance - May 31, 1995 27,052,368 270,524
Sale of Stock 2,301,000 23,010 - -
Stock issued for services 2,896,111 28,961 - -
Conversion of warrants 9,200 92 - -
Recision obligation
converted stock 1,304,949 13,049 - -
Repayment of borrowed shares 1,820,379 18,204 - -
Acquisition of equity
interest in Medco Health Corp. 7,300,000 73,000 - -
Net (loss) for the year - - - -
--------- ------- --------- ---------
Balance - May 31, 1996 42,684,007 426,840 - -
Sale of stock 2,744,474 27,445 - -
Stock issued for services 661,319 6,613 - -
Conversions of warrants - - - -
Stock issued in payment
of liabilities 391,000 3,910 - -
Net (loss) for the year - - - -
--------- ------- --------- --------
Balance forward May 31, 1997 46,480,800 464,808 - -
See notes to financial statements
Haber, Inc. A Development Stage Enterprise
Statements of Changes in Stockholders' Equity
Inception Through May, 31 1998
Convertible Special Voting
Preferred Preferred
Stock Stock
Shares Amount Shares Amount
Balance Forward-May 31, 1994 149,547 1,495,470 $ - $ -
Cash in private offering - - - -
Shares issued for services - - - -
Conversion of warrants - - - -
Stock returned from directors - - - -
Conversion of preferred stock (3,239) (32,390) - -
Stock issued by unconsolidated
subsidiary - - - -
Net (loss) for the year - - - -
------- -------- -------- ----------
Balance May 31, 1995 146,308 1,463,080 - -
Sale of Stock - - - -
Stock issued for services - - - -
Conversion of warrants - - - -
Recision obligation converted
stock - - - -
Repayment of borrowed shares - - - -
Acquisition of equity interest
in Medco Health Corp. - - - -
Net (loss) for the year - - - -
-------- -------- -------- ----------
Balance - May 31, 1996 146,308 1,463,080 - -
Sale of Stock - - - -
Stock issued for services - - - -
Conversions of warrants - - - -
Stock issued in payment
of liabilities - - - -
Net (loss) for the year - - - -
-------- -------- -------- ----------
Balance forward May 31, 1997 146,308 1,463,080 - -
Haber, Inc. A Development Stage Enterprise
Statements of Changes in Stockholders Equity
Inception Through May 31, 1998
Capital in Warrants Subscription Retained
Excess of Amount Receivable Earnings
Par value (Deficit)
Balance Foward
- -May 31, 1994 18,656,643 - - (19,251,511)
Cash in private offering 48,579 - - -
Shares issued for services 5,323 - - -
Conversion of warrants 24,549 - - -
Stock returned from
directors 2,100 - - -
Conversion of preferred
stock 32,336 - - -
Stock issued by
unconsolidated subsidiary 17,193 - - -
Net (loss) for the year - - - (401,483)
---------- -------- ----------- ----------
Balance May 31, 1995 18,786,723 - (41,750) (19,652,994)
Sale of Stock 237,188 - - -
Stock issued for
services - - - -
Conversion of Warrants - - - -
Recision obligation
converted stock 285,532 - - -
Repayment of borrowed
shares (18,204) - - -
Acquisition of equity
interest Medco Health Corp. - - - -
Net (loss) for the year - - - (359,728)
---------- -------- ---------- ------------
Balance May 31, 1996 19,291,239 - (41,750) (20,012,722)
Sale of Stock 251,555 - (62,950) -
Stock issued for services 98,850 - - -
Conversion of warrants - - - -
Stock issued in payment
of liabilities 40,018 - - -
Net (loss) for the year - - - (301,344)
----------- -------- --------- ------------
Balance forward
May 31, 1997 19,681,662 - (104,700) (20,314,066)
See note to financial statements
Haber, Inc A Development Stage Enterprise
Statements of Changes in Stockholders Equity
Inception Through May 31, 1998
Deferred Total
Unearned Stockholders
Treasury Stock Compensation Equity
Shares Amount Stock Option (Deficit)
Shares Amount
Balance forward
- -May 31, 1994 116,625 (1,375,684) - (227,805)
Cash in private offering - - - 52,695
Shares issued for services - - - 25,449
Conversion of warrants - - - 25,600
Stock returned from directors - - - -
Conversion of preferred Stock - - - -
Stock issued by
unconsolidated subsidiary - - - -
Net (Loss) for the year - - - (401,483)
-------- ---------- --------- ---------
Balance May 31, 1995 116,625 (1,375,684) - (508,351)
Sale of Stock - - - 218,448
Stock issued for services - - - 28,961
Conversion of warrants - - - 92
Recision obligation
converted stock - - - 298,581
Repayment of borrowed shares - - - -
Acquisition of equity
interest Medco Health Corp. - - - 73,000
Net (loss) for the year - - - (359,728)
-------- ---------- --------- ---------
Balance May 31, 1996 116,625 (1,375,684) - (248,997)
Sale of Stock - - - 216,050
Stock issued for services - - - 105,463
Conversions of warrants - - - -
Stock issued in payment
of liabilities - - - 43,928
Net (loss) for the year - - - (301,344)
-------- ---------- --------- ---------
Balance forward
May 31, 1997 116,625 (1,375,684) - (184,900)
See notes to financial statements
Haber, Inc. A Development Stage Enterprise
Statements of Changes in Stockholders' Equity
Inception Through May, 31 1998
Common Stock Special Voting
Shares Amount Common Stock
Shares Amount
Balance Forward May 31, 1997 46,480,800 464,808 _ -
Sale of Stock 6,275,000 27,250 - -
Stock Issued for Services 3,998,573 39,986 - -
Conversion of warrants - - - -
Stock Issued in Payment
of Liabilities - - - -
Net (Loss) for the year - - - -
---------- ------- --------- -------
Balance - May 31, 1998 56,754,373 532,044 - -
See Notes to Financial Statements
Haber, Inc. A Development Stage Enterprise
Statements of Changes in Stockholders' Equity
Inception Through May, 31 1998
Convertible Special Voting
Preferred Stock Preferred Stock
Shares Amount Shares Amount
Balance Forward May 31, 1997 146,308 1,463,080 -------- ---------
Sale of Stock - - - -
Stock Issued for Services - - - -
Conversion of warrants - - - -
Stock Issued in Payment
of Liabilities - - - -
Net (Loss)for the year - - - -
-------- --------- -------- ----------
Balance - May 31, 1998 146,308 1,463,080 - -
See notes to financial statements
Haber, Inc. A Development Stage Enterprise
Statements of Changes in Stockholders' Equity
Inception Through May, 31 1998
Capital in Warrants Subscription
Excess of Amount Receivable
Par Value
Balance Forward May 31, 1997 $19,681,662 - (104,700)
Sale of Stock 141,750 - (3,033)
Stock Issued for Services 55,076 - -
Conversion of warrants - - -
Stock Issued in Payment
of Liabilities - - -
Net (Loss)for the year - - -
------------ ---------- -----------
Balance - May 31, 1998 $19,878,488 - (107,733)
------------ ---------- -----------
See notes to financial statements
Haber, Inc. A Development Stage Enterprise
Statements of Changes in Stockholder's Equity
Inception Through May, 31 1998
Retained Treasury Stock
Earnings Shares Amount
(Deficit)
Balance Forward May 31, 1997 (20,314,066) 116,625 (1,375,684)
Sale of Stock - - -
Stock Issued for Services - - -
Conversion of warrants - - -
Stock Issued in Payment
of Liabilities - - -
Net (loss) for the year (337,220) - -
------------ --------- -----------
Balance May 31, 1998 (20,651,286) 116,625 (1,375,684)
------------ --------- -----------
See notes to financial statements
Haber, Inc. A Development Stage Enterprise
Statements of Changes in Stockholder's Equity
Inception Through May, 31 1998
Deferred Earned Total
Compensation Stockholders
Stock Option Equity
(Deficit)
Balance Forward May 31, 1997 - (184,900)
Sale of Stock - 165,967
Stock Issued for Services - 95,062
Conversion of warrants - -
Stock issued in payment
of Liabilities - -
Net (loss) for the year - (337,220)
------------- -----------
- (261,091)
------------- -----------
See notes to financial statements
Haber, Inc. A Development Stage Enterprise
Statements of Changes in Stockholders' Equity
Inception Through May, 31 1998
Special Voting
Common Stock Common Stock
Shares Amount Shares Amount
Balance Forward May 31, 1998 56,754,373 532,044
Sale of Stock 4,926,334 49,264 - -
Stock Issued for Services 13,320,195 168,701 - -
Conversion of Warrants - - - -
Stock Loaned in Payment
of Liabilities 1,666,667 16,667 - -
Net (loss) of the Year - - - -
---------- -------- -------- -------
Balance May 31, 1999 76,667,569 766,676 - -
Haber, Inc. A Development Stage Enterprise
Statements of Changes in Stockholders' Equity
Inception Through May, 31 1998
Convertible Special Voting
Preferred Stock Preferred Stock
Shares Amount Shares Amount
Balance Forward May 31, 1998 146,308 1,463,080
Sale of Stock - - - -
Stock Issued for Services - - - -
Conversion of Warrants - - - -
Stock Loaned in Payment
of Liabilities - - - -
Net (loss) of the Year - - - -
------- ---------- -------- --------
Balance May 31, 1999 146,308 1,463,080 - -
Haber, Inc. A Development Stage Enterprise
Statements of Changes in Stockholders' Equity
Inception Through May, 31 1998
Capital in
Excess of Warrants Subscription
Par Value Amount Receivable
Balance Forward May 31, 1998 19,878,488 - (107,733)
Sale of Stock 141,636 - 71,700
Stock Issued for Services 899,734 - -
Conversion of Warrants - - -
Stock Loaned in Payment
of Liabilities 33,333 - -
Net (loss) of the Year - - -
--------- --------- --------
Balance May 31, 1999 20,953,191) - (36,033)
Haber, Inc. A Development Stage Enterprise
Statements of Changes in Stockholders' Equity
Inception Through May, 31 1998
Retained
Earnings Treasury Stock
(Deficit) Shares Amount
Balance Forward May 31, 1998 (20,651,286) 116,625 (1,375,684)
Sale of Stock - - -
Stock Issued for Services - - -
Conversion of Warrants - - -
Stock Loaned in Payment
of Liabilities - - -
Net (loss) of the Year (1,279,736) - -
--------- --------- ---------
Balance May 31, 1999 (21,931,022) 116,625 (1,375,684)
Haber, Inc. A Development Stage Enterprise
Statements of Changes in Stockholders' Equity
Inception Through May, 31 1998
Deferred
Unearned Compensation Total Stockholders
Stock Options Plan Equity (Deficit)
Balance Forward May 31, 1998 - (261,091)
Sale of Stock - 262,600
Stock Issued for Services - 1,068,435
Conversion of Warrants - -
Stock Loaned in Payment
of Liabilities - 50,000
Net (loss) of the Year - (1,279,736)
--------- ---------
Balance May 31, 1999 - (159,792)
Haber, Inc. A Development Stage Enterprise
Statements of Cash Flows Page 1 of 2
Cumulative For the Years Ended
from Inception May 31
1999 1998 1997
Cash Flows from Financing
Activities
- - Net (loss) (21,931,022) (1,279,736) (337,220) (301,344)
- - Adjustments to reconcile net
(loss) to net cash used
for operating activities:
- - Depreciation 1,653,202 3,051 1,230 5,572
Amortization 1,116,210 - - 908
(Gain) on disposal of
fixed assets (42,881) - - -
Stock issued for services 2,895,138 106,843 196,826 390,423
Compensation recognized
under employees' stock
opinion plans 808,458 - - -
Loss on investments in
affiliates 5,142,591 - - -
Provision for uncollectible
advances to affiliates 1,004,881 - -
(Increase) decrease
in current assets (11,750) - 250 (274)
Increase (decrease)
in current liabilities 68,708 (35,590) 44,069 (51,966)
---------- ------------ ------- --------
(9,296,465) (243,840) (94,845) 43,319
Cash Flows from Investing
Activities
- -Patent costs and licenses (30,659) - - -
- -Purchase of fixed assets (2,402,544) (6,209) (3,632) -
- -Proceeds from sale of fixed
assets 1,086,007 - - -
- -Investments and advances to
affiliates (3,912,626) - -
- -Goodwill acquired (1,085,551) - - -
- -(Increase) decrease in other
assets (5,239) 31,764 (747) (9109)
----------- ----------- -------- ------
(6,350,612) 25,555 (4,379) (9109)
----------- ----------- -------- -------
See notes to financial statements
Haber, Inc. A Development Stage Enterprise
87
Statements of Cash Flows Page 2 of 2
Cumulative For the Years Ended
from Inception May 31
1999 1998 1997
Cash Flows from Financing
Activities
- - Proceeds from issuance of
stock 16,933,284 282,651 67,236 37,968
- - Cash dividends (505,976) - - -
- - Purchase of treasury stock (1,375,684) - - -
- - Recovery of insider's selling
profit 17,198 - - -
- - Payment of capital
lease obligation (303,652) - - -
- - Advances from related parties 1,117,938 - 53,500 -
- - Repayments to related
parties (129,199) (29,625) (18,651) (15,808)
- - Increase in long-term debt 1,138,477 - - -
- - Payment against long-term debt (1,138,477) - - -
- - Proceeds of notes payable 25,976 - - -
- - Repayment of notes payable (25,976) - - -
- - Stock subscription receivable (36,033) 29,950 (3,033) (62,950)
----------- -------- ------- --------
15,717,876 282,976 99,052 (40,790)
----------- -------- ------- --------
Net increase (Decrease) in Cash 70,799 64,691 (172) (6,580)
Cash-beginning - 6,108 6,280 12,860
----------- -------- ------- --------
Cash-End $ 70,799 70,799 $ 6,108 $ 6,280
----------- -------- ------- --------
Supplemental Disclosures - - -
Cash Paid - - -
Interest $ - $ 2,637 $ -
----------- -------- -------- --------
----------- -------- -------- --------
Haber, Inc. A Development Stage Enterprise
Cumulative For the Years Ended
from Inception May 31
1999 1998 1997
Non-Cash Investing and Financing
Activities
Stock issued in payment
of debt and interest - 390,423 28,961
-------- ------- ------
-------- ------- ------
Common stock returned
by directors - - -
-------- ------- -------
-------- ------- -------
Fixed assets purchased with
common stock - - -
-------- ------- -------
-------- ------- -------
Preferred stock converted
into common - - -
-------- ------- --------
-------- ------- --------
Stock issued for acquisition
of equity interest in
Medco Health Corporation - - 73,000
--------- ------- --------
--------- ------- --------
See notes to financial statements
Haber, Inc. A Development Stage Enterprise
1) The Company
The Company was founded in 1967 as Haber instruments, Inc., a New York
corporation. On April 1, 1980, Haber Instruments, Inc. was acquired through
a migratory merger by Haber, Inc. (the"Company"), which had been incorporated
in Delaware in October, 1979. The only effect of the merger was a change in
the state of incorporation and a change in name. The Company relocated its
corporate office to Towaco, New Jersey and has been there since 1982.
From its formation in 1967, and with the grant of its patents in 1976 and
1979, the Company has operated as a development stage enterprise, directing
its efforts towards understanding its technology and establishing patents in
the fields of chemical and electrochemical process technologies, primarily as
the basis for cardiovascular diagnostic instrumentation and for the
extraction and purification of high-value metals. The Company owns the
fundamental patent to a process called ElectroMolecular Propulsion
2) Summary of Significant Accounting Policies
a. Patents and Licenses: Represents accumulated legalese costs capitalized
and amortized over their estimated useful lives of 17 years, commencing with
the date of issuance of the related patents. As of May 31, 1999 patents and
license costs have been completely amortized.
b. Inventory: Inventory consists of supplies of parts and are valued at the
lower of cost (specifically identified) or market.
c. Furniture and Depreciation: Furniture and equipment are carried at cost.
Depreciation is computed on the straight-line or accelerated methods over
periods of three to seven years, which corresponds to the useful lives of the
assets.
d. Earnings Par Share: Computed by dividing the net loss by the weighted
average number of shares outstanding during the year. Common stock
equivalents have been included in the earnings-per-share computation because
of their anti-dilutive effect.
e. Research and Development Costs: The Company charges research and
development costs, which are not incurred in conjunction with contractual
obligations to expense as incurred. $20,878 has been charged to expense the
year ended May 31, 1999.
f. Estimates: The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumption that effect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the dates
of the financial statements and the reported amounts of revenues and expenses
during the reporting periods. Actual results could differ from those estimates.
g. Unconsolidated Subsidiaries: The Company accounts for its investments
in unconsolidated subsidiaries on the equity method. All inter-company
transactions are eliminated. Losses beyond the initial investment are not
recognized if its not the Company's obligation to fund such losses.
h. Reclassifications: Certain items have been reclassified to conform with
the current years presentation.
3) Status of the Company
The accompanying financial statements have been prepared on a going concern
basis, which contemplates the realization of assets and the satisfaction
of liabilities in the normal course of business.
The Company makes use of equity financing to provide funds for operations.
Its ability to operate is dependent upon its ability to obtain working
capital until regular positive cash flow is attained. It is management's
intention to minimize operating costs until such time as sales can be
increased enough to fund its operations.
The Main on-going activity of the Company's business through 1998 was the
furthering of its technology, EMP. This comprised the completion and
introductory sales of its EMP 15K-1 instrument and selected reagents for
its use. Also, provision for preparation of pertinent new patent
applications have been completed, with appropriate notification of the
U.S. Patent Office to prioritize the same.
4) Due to Related Parties
(a)Payables have been generated by transactions with related parties which
are detailed as follows:
May 31
1999 1998
Shareholders $ 172,427 $ 176,141
Corporate officers and directors 16,572 32,659
Joint Venture 271 271
------------ -----------
$ 189,270 $ 209,071
------------ -----------
The amounts due to shareholder, corporate officers and directors and the
joint venture have no fixed terms of repayment and bear no interest.
(b) During the fiscal year Ended May 31, 1999, the Company's Chairman
authorized the issuance of 1,990,332 shares of Haber, Inc. common stock to
himself and various members of his family, for repayments of loans purportedly
made to Haber, Inc., dating back to 1992. These individuals were not able to
substantiate these loan and therefore agreed to rescind the entire
transaction. All shares were returned to the transfer agent on December 31,
1999, to be cancelled of record.
5) Income Taxes
As of May 31, 1999, the Company has a net operating loss and investment
tax credit carry forward for federal income tax purposes of 13,468,325
and $33,120, respectively. If not offset against taxable income, the
operating loss carry forward will expire as follows:
Net Operating Investment Tax
Loss Carry Credit
forward Carry forward
Year End May 31,
1998 - $ 2,600
1999 $ 1,341,400 4,500
2000 322,178 14,067
2001 2,177,631 11,953
2002 1,268,752 -
2003 2,414,382 -
2004 2,267,089 -
2005 982,263 -
2006 776,330 -
2012 301,344 -
2013 337,220 -
2014 1,279,736
---------- -------------
$ 13,468,325 $ 33,120
---------- -------------
Had the Company filed its federal tax returns for the years ended
May 31, 1992 through May 31, 1996 it would have had an additional
net operating loss carry forward 1,940,929 of expiring as follows:
Net Operating
Loss Carry forward
Year End May 31, 2007 $ 530,966
2008 348,661
2009 300,091
2010 401,483
2011 359,728
-------------
$ 1,940,929
These carry forwards are not expected to be utilized. Based on a 35% federal
tax rate, the Company has deferred tax assets of approximately $5,066,000 and
$5,426,359 at May 31, 1998 and 1999 respectively, which were totally offset
by valuation allowances.
6) Capital Stock
On November 15, 1984, the Board of Directors adopted a resolution reserving
the following shares of .01 par value common stock of the Company:
Shares
Reserved Reason
242,984 Conversion of convertible preferred stock
245,000 Exercise of: Class A Warrants
245,000 Class B Warrants
62,385 Under-writers' Warrants
In June, 1993, the board of directors established an anti-dilution provision
such that their percentage of ownership is maintained until December 31, 1994.
Such ownership adjustments will be made semi-annually in the form of warrants
at .25 per share exercisable for a period of seven years.
7) Redeemable Preferred Stock
As a result of the public offering of its securities in November, 1984:
a. Shares of convertible preferred stock are redeemable in whole or in
part at the option of the Company at a price of $20 par share plus any
accrued, unpaid cumulative dividends, at any time after November 25, 1988.
In addition, the shares may be redeemed at the same price if at any time
prior to November 26, 1988 the closing price of the common stock on the
National Market System of the National Association of Securities Dealers
Automated Quotations System (or, if the common stock is not reported on
closing prices of the common stock on any stock exchange in which the
common stock is traded on the daily high bid price for the common stock in
the over-the-counter market, as the case may be shall have equaled or
exceeded 26.80 par share for any 20 consecutive trading days.
b. Shares of convertible preferred stock are convertible at the option
of the registered holder thereof, into shares of common stock, par value
.01 par share, of the Company (common stock) at the rate of 1.6716 shares
of common stock for each share of convertible preferred stock.
c.On March 9, 1999, the Board of Directors adopted a resolution to
increase the number of authorized shares of common stock to 150,000,000,
which represents an increase of 75,000,000 shares from the year ended
May 31, 1999. On April 1, 1999 the Board of Directors approved a
resolution to offer a significant premium to induce conversion of
convertible voting preferred stock into common stock.
8) Options and Warrants
The Company maintains an Employees' Incentive Stock Option Plan and a 1985
Officers' Stock Option Plan and issues unregistered warrants.
All options have expired as of May 31, 1993.
Warrant activity for the period was as follows:
Shares Price Total
Per Share Value
Balance at May 31, 1999 493,167 - - 125,500
--------- ---------
Balance as of May 31, 1997 1,681,000 .25 .25 420,250
Issued for Service 33,000 .01 .30 9,900
Issued for Service 50,000 .01 .25 12,500
Issued in Lieu of Interest 160,000 .01 .25 40,000
Expired (1,531,000) .01 .25 (382,750)
----------- ---------
Balance as of May 31, 1998 393,000 99,900
----------- ---------
Balance at May 31, 1998 393,000 - - $99,900
Issued for Services 3,111,167 .08 .25 268,350
Issued in Lieu of Interest 60,000 .25 .25 15,000
Issued in connection with stock
purchase plan 9,000 .25 .30 2,250
Exercised 0 - - 0
Expired (3,080,000) .08 .25 (260,000)
---------- ---------
9) Leases
The Company is obligated under a lease for office space. As of June 1,
1990, the Company entered into a verbal "month-to-month" lease agreement
on its primary office space. The rent is 3,000 per month. For the years
ended May 31, 1999 and 1998 rental expense was $36,000 and, $36,000
respectively.
10) Recision Obligation
During fiscal year May 31, 1995, the Company attempted to make a private
placement of its securities and issue unrestricted stock in reliance upon
the exemption from the registration requirements of Section 5 of the
Securities Act of 1933 ("the Act") provide by Rule 504 of Regulation D.
Subsequent to the receipt of approximately 300,000 in funds, legal counsel
advised the Company it was not eligible to use the Rule 504 exemption.
On October 11, 1995, the Company received an opinion from legal counsel
advised de Company it was not eligible to use the Rule 504 exemption.
On October 11, 1995, the Company received an opinion from legal counsel that
the, issuance and sale of the stock constituted an exempt transaction under
Section 4(2) of the Act. Therefore, these funds were converted into common
stock and are shown in equity at May 31, 1996.
11) Commitments and Contingencies
(A)The Company is in contention with the Department of Environmental
Protection ("DEP") in New Jersey and currently has appeared before the
court with a legal representative of the DEP to try to determine a
settlement penalty for neglecting to report timely two filings of septic
sampling and analysis in 1990.
In September, 1993, the Company settled this penalty for $21,927 to be paid
in four semi-annual installments of 5,000 and one final semi-annual
installment of 2,500 plus interest at 5.5% beginning October, 1993. Since
only one payment has been made on this settlement to date, the entire amount,
which totals $23,169 including interest, is currently due and is included in
accounts payable.
(B)During the fiscal year ended May 31, 1999, the Company entered into the
following agreements whereby the Company issued common stock for services
rendered in lieu of cash payments as follows:
(1)Financial Consulting Services - Issued or to be issued; 3,950,000
shares in a combination of restricted and unrestricted common stock.
(2) Public Relation Services - On September 1, 1998, 7,500,000 shares of
unrestricted common stock was issued to Startec Media Corporation.
During the course of our audit, it was discovered by that Corporate Counsel
disavowed a letter ostensibly written by him on his letterhead, to authorize
the company's Transfer Agent to issue the 7,500,000 shares to Startec Media
Corporation. We were also unable to verify whether any public relation services
were provided to the Company. This transaction represents $491,250 of the total
loss reported for the fiscal year ended May 31, 1999.
12) Acquisition
During the fiscal year ended May 31, 1996, the Company issued 7,300,000
shares of its stock for 1,500,000 shares of Medco Health Corporation.
The Company valued this investment at the par value of its stock, $73,000.
Due to the fact that there is no market for Medco Health Corporation stock,
the Company has established a valuation allowance of $73,000 for this
investment.
13) Other Matters
(A)Management has informed us that they anticipate no problems with their
computer system and the year 2000. They informed us that their current
computer software will recognize a date using (00) as the year 2000 and not
1900. Management have not been informed by any of their financial
institutions, or vendors that they anticipate any problems with the year 2000.
(B)Based on an agreement dated March 13, 1997 between Orex Gold Mines, Inc.
and Haber, Inc., Haber was to issue a license to Orex granting them the
right to the commercial use of the Haber Gold Process. The right to use this
license will expire in August, 2000. For this right, Haber, Inc. was to
receive 600,000 shares of Orex Gold Mines, Inc. common stock.
Orex issued 600,000 shares of restricted common shares to Haber, Inc.,
Haber, Inc. contends that the shares should have been unrestricted and returned
all shares to Orex Gold Mines, Inc., requesting that the shares be reissued
without a restrictive legend. To date, Orex Gold Mines, Inc. has not reissued
the shares to Haber, Inc.
14) Subsequent Events:
(A) The Company is in the process of selling their unused State of New Jersey
Corporation tax losses to New Jersey Economic Development Authority. On
November 23, 1999, Haber, Inc. received a letter from the State of New Jersey
confirming the amount of the unused carryfoward losses of $2,037,184 for the
period of 1993 through 1998. Haber, Inc. can sell these losses for
approximately $140,000.
(B) On September 13, 1999, the Board of Directors authorized the issuance of
960,000 shares of restricted common stock to buy out all of the limited
partnership units held by the limited partners of the Lodestone Partners.
15) Selected Quarterly Financial Information (Unaudited)
First Second Third Fourth
Quarter Quarter Quarter Quarter
1999
Net sales - - - -
Gross (loss) - - - -
Operating Income - - - -
Net (loss) (368,887) (325,493) (246,372) (339,004)
Net (loss) per common share (.006) (.005) (.003) (.004)
1998
Net sales - - 14,894 -
Gross profit - - 14,894 -
Operating income - - - -
Net (loss) (60,146) (71,585) (43,172) (162,317)
Net (loss) per common share (.001) (.001) (.001) (.003)
Haber, Inc. A Development Stage Enterprise
Valuation and Qualifying Amounts Schedule II
Year Ended Name of Balance at Additions Amounts Balance at
May 31, Debtor Beginning Written End of Period
of Period off
1994 Amerigold, Inc. 3,750 15,700 - 19,450
Life Signs, Inc. - 5,960 - 5,960
3,750 21,660 - 25,410
1995 Amerigold, Inc. 19,450 60 - 19,510
Life Signs, Inc. 5,960 - 5,960 -
25,410 60 5,960 19,510
1996
Amerigold, Inc. 19,510 32,254 51,764 -
Medco Health Corp. - 73,000 73,000 -
------ ------- ------- --------
19,510 105,254 124,764 -
------ -------- ------- --------
------ -------- ------- --------
Haber, Inc. A Development Stage Enterprise
Computation of Fully Diluted Earnings Par Common Share - Exhibit 11
May 31,
1999 1998 1997
Earnings (Losses) - (337,220) (301,344)
Shares
Weighted average number of common
shares outstanding 69,955,962 49,799,193 45,528,941
Additional shares assuming conversion
of Convertible preferred stock 418,493 297,913 244,153
Warrants reduced by the number of shares
which could have been purchased with
proceeds from the exercise of such
warrants - - -
Weighted Average Number of Common Shares
Outstanding as Adjusted 70,374,455 50,097,106 45,773,094
(Loss) Par Common Share Assuming Full
Dilution (.018) (.001) (.001)
This calculation is submitted in accordance with Regulation S-K, Item 601
(b)(11) although it is contrary to paragraph 40 of ABP Opinion No. 15
because it produces an anti-dilutive result.