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FORM 10 K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For this fiscal year ended September 30, 2000, Commission file number 03385
HOLOBEAM, INC.
(Exact name of registrant as specified in its charter)
Delaware 22-1840647
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
217 First Street, P.O. Box 287, Ho-Ho-Kus, NJ 07423-0287
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 201-445-2420
Securities registered pursuant to Section 12(b) of the Act:
Name of exchange on which
Title of each class registered
Common Stock, Par Value $0.10 per share Over the Counter
Securities registered pursuant to Section 12(g) of the Act:
(Title of Class)
(Title of Class)
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
filing requirements for the past 90 days. Yes x No
State the aggregate market value of the voting stock held by
non-affiliates of the Registrant. The aggregated market value shall be computed
by references to the price at which the stock sold, or the average bid and asked
prices of such stock, as of a specified date within 60 days prior to date of
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filing. $4,197,552.00 at December 7, 2000.
Indicate the number of shares outstanding of each of the Registrant's
classes of common stock, as of the latest practicable date. 292,347 Common
Shares at December 7,2000.
DOCUMENTS INCORPORATED BY REFERENCE.
1. Annual Report Form 10K for the year ended September 30, 1994.
2. Financial Statements for the year ended September 30, 1995.
3. Financial Statements for the years ended September 30, 1990 and 1989.
4. Annual Report Form 10K for the years ended September 30, 1996 and
1997.
5. Holobeam, Inc. Defined Benefit Plan.
6. Financial statements for the years ended September 30, 1998 and
1999.
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PART I
Item 1. Business
(a) In General. The Registrant was organized in October, 1967, and
commenced doing business on January 1, 1968. The Registrant is engaged in the
rental and development of real estate and in developing surgical staples and the
technology used to apply the staples.
b) Industry Segments. For financial information in regard to Industry
Segments, reference is made to Note 13 to the Financial Statements for the years
ended September 30, 2000, 1999 and 1998.
(c) Description of Business.
(I) Principal Activities and
(ii) Status of products and Real Estate Properties.
Medical Staples
The Registrant is continuing its efforts in the area of medical staples for
use in internal surgery. Several United States Patents and foreign patents have
been received covering a novel staple. The has been produced and animal testing
took place during 1999 and 2000. The Registrant presently intends to continue
the project.
A significant investment would be required if the Registrant were to pursue
this area of business independently. The Registrant may seek a relationship of
some sort with a firm active in the medical equipment area. However, no decision
as to such a relationship has been made at this time.
Real Estate Development and Rental Activities
The Registrant has rented two buildings it owns located at A&S Drive,
Paramus, New Jersey: one to The Sports Authority, Inc. and the other to CompUSA,
both for retail purposes.
(iii) Raw Materials
The Registrant believes that the components and materials necessary or
useful to its operations will be available from diverse sources of supply. The
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materials used for the Registrant's research activities have been acquired
through commercial businesses engaged in the distribution of such supplies. The
materials that the Registrant would require for development of commercial
production of medical staples are widely available.
(iv) Patents.
The Registrant has filed several patent applications and has several
patents issued in connection with medical staples for use in internal surgery.
These applications and patents are as follows:
No. Serial No. Title of Invention Issue Date
1. PCT/US94/02227 Staples 03/01/94
2. 08/512,766 Staples 08/09/95
3. 08/228,058 Staples 08/29/95
4. Canadian Pat. No. 2,155,750 Improved Staples (PCT NAT) 08/18/98
5. United Kingdom Pat. 94910801.3 Improved Staples 03/01/94
6. Australian Pat. 63568/94 Improved Staples 09/15/94
7. Japanese Pat. 6-520120 Staples 03/01/94
8. Brazilian Pat. PCT/US94/02227 Improved Staples 09/15/94
9. 08/502,988 Staple Overlap 08/18/95
10. 07/753,116 Surgical Stapling Method 01/19/93
11. 07/934,858 Surgical Stapling Method 11/23/93
12. 08/024,501 Staples 08/30/94
13. US Pat. #5,445,648 Staples 08/29/95
14. US Pat. #5,342,396 Staples 08/30/94
15. US Pat. #5,263,973 Surgical Stapling Method 11/23/93
16. US Pat. #5,667,527 Staples 09/16/97
17. US Pat. #5,749,896 Staple Overlap 05/12/98
18. Japanese Pat. #2672713 Improved Staples 07/11/97
19. Brazilian Pat. #9405840-7 Improved Staples 09/01/95
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20. US Patent #6,083,242 Improved Staples 07/04/00
21. Australian Patent #704533 Improved Staples 08/05/99
(v) Non-seasonal Business.
The Registrant does not believe that its products are subject to material
seasonal changes.
(vi) Working Capital.
Not relevant.
(vii) Customers.
Not relevant.
(viii) Backlog.
Not relevant.
(ix) Governmental Contracts. Not relevant.
(x) Competition.
It is presently contemplated that Registrant's activities with respect to
medical staples, if actual commercial activities are commenced, may be limited
to forming some type of business relationship with other firms. The technology
is in competition with alternative staples technology. Some suppliers of
surgical staplers are well-established and have significant capital resources.
Competition in the real estate office rental segment of the Registrant's
business activities was significant in the Bergen County, New Jersey market in
which the Registrant competes during the period when the Registrant was seeking
suitable tenants for its rental properties.
The obsolete style of the building owned by the Registrant prior to and
during 1991 made the attraction of suitable tenants difficult.
In an effort to increase the marketability of the Registrant's properties,
the Registrant applied to the Borough of Paramus for a zoning change to allow
retail use for the office building and for the adjacent site.
In December 1991, the necessary change in zoning was approved. The then
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existing building was rented to The Sports Authority, Inc., a retailer of
sporting goods. This building was substantially renovated by The Sports
Authority, Inc. and Holobeam reimbursed them for their costs in connection with
this renovation.
During 1994, a 30,000 sq. ft. building was constructed on the Registrant's
site located adjacent to the building leased to The Sports Authority, Inc. for
use as a Computer City retail store. Tandy Corp., parent corporation of
Computer City, commenced paying rent in October 1994. Holobeam reimbursed
Tandy Corporation $1,189,675 as an allowance for costs of constructing the
building and paving
of the site, after a permanent Certificate of Occupancy was obtained. During
1998, Computer City Retail Stores were acquired by Comp USA. Tandy Corp. remains
on the lease as guarantor.
(xi) Research and Development.
The Registrant has investigated methods for applying surgical staples and
the technology presently used to fabricate and apply such staples. During 2000,
1999 and 1998, the Registrant expended $192,085.00, $194,364.00 and $225,041.00,
respectively, in connection with the furtherance of this activity. Such costs
have been currently expensed and consist principally of materials, supplies and
costs associated with design and development.
(xii) Environmental Compliances.
The Registrant does not believe that compliance with Federal, State or
Local provisions of a governmental nature which have been enacted or adopted
regulating the discharge of material into the environment will have a materially
adverse effect upon the capital expenditure requirements, earnings or
competitive position of the Registrant.
The Registrant's activities with regard to medical staple technology, at
present, are limited to engineering, development and animal testing of medical
staple design with fabrication and manufacturing of prototypes and models
sub-contracted to other firms.
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The Registrant is not aware of any potential liabilities or costs
associated with the disposal or handling of waste materials and is not aware of
any potential violations of local, state or federal laws which regulate the
technology.
(xiii) Employees.
At September 30, 2000 the Registrant employed three persons as compared to
three persons at September 30, 1999 and three persons at September 30, 1998.
(d) Financial Information About Foreign and Domestic Operations
and Export Sales.
The Registrant is not engaged in foreign operations and does not export to
foreign countries.
Item 2. Properties
The Registrant's headquarters and principal facilities are located at 217
First Street, Ho-Ho-Kus, New Jersey 07423-0287. The Registrant leases
approximately 1,000 square feet of office and laboratory space. The Registrant
owns two office buildings, one of 62,000 square feet and another of 30,000
square feet located at 50 A&S Drive, Paramus, New Jersey. One building was
placed in service in October 1994, the other in 1982. (Reference is made to
Notes 4, 8, 9 and 10 to the Financial Statements for the fiscal year ended
September 30, 1995, 1991, 1990 and 1989.)
Pertinent information concerning the Registrant's properties is as follows.
(Reference is made to Schedule XI of the Registrant's Financial statements for
the years ended September 30, 1997 and 1996.)
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Building Building
Paramus, NJ Paramus, NJ
Year Acquired 1971 1994
Gross Square Footage 62,000 30,000
Percent Leased at 9/30/99 100% 100%
Acquisition Cost $ 718,881 $2,592,513 (2)
Capital Improvements Since
Acquisition $3,649,850 (1) -0-
Total Investment $4,587,133 (3) $2,826,843 (4)
Mortgage Balance $5,653,046 $ -0-
(1) Includes $3,567,267.00 of improvements to the building repaid to The
Sports Authority, Inc. (the Tenant) upon closing of the Mortgage,
but does not include additional amounts expended by The Sports
Authority, Inc. since said closing.
(2) Includes construction allowance of $1,189,675.00 for Tandy
Corporation pursuant to the Operating Lease Agreement. (Now Comp
USA.)
(3) Includes land cost of $218,402 for the 62,000 sq. ft. building.
(4) Includes land cost of $234,370 for the 30,000 sq. ft. building.
In 1983, the Registrant purchased 2.799 acres of land located in Paramus,
New Jersey and adjacent to the building owned by the Registrant at 50 A&S
Drive.
The purchase price was $173,565 which was paid in cash. Since 1983, the
Registrant has incurred costs in the amount of $60,805 for various improvements
and architectural work relating to development of this property. During 1992,
1991 and 1990, the Registrant spent $293,784, $78,051 and $50,667 respectively
in connection with an application for a use variance for the site and various
site improvements that would enable the construction of a commercial or retail
building on the site. The change in zoning to retail use was approved by the
Borough of Paramus in December 1991. The change in zoning to allow retail use
also required new site plan approval because the change in use required new
traffic pattern studies, parking lot re-design and significant additional
changes in order to comply with governmental requirements.
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In addition, the Registrant expended $964,505 through September 30, 1994
for site plan approval and changes, and toward construction of a building on the
site. No depreciation or amortization was recorded until the building and site
were put into service. During October 1994, construction was completed by Tandy
Corporation of a retail building on the Registrant's site. The building is now
being used for a CompUSA retail store. (Reference is made to Note 13 to the
Registrant's 1994 Financial Statements and to Item 1, Part X of the 1994 Form
10K.)
The zoning change approval allowed for retail use of the property and
significantly enhanced the opportunities for attracting a suitable tenants for
the site.
When purchased, the site adjacent to the building owned by the Registrant,
required site engineering and costs to acquire site plan approval for a building
from the appropriate governmental regulatory authorities.
In addition, the Registrant expended funds during its efforts to change the
zoning of the property from office use to retail use. This change in zoning
allowed the Registrant to seek tenants engaged in retail operations and resulted
in the October 1994 tenancy of Computer City. (Reference is made to Note 12 of
the Financial Statements for the year ended September 30, 1997.)
The Registrant was not able to lease the property since the original site
plan allowing office use was not approved for retail use until the Computer City
occupancy of October 1994. The market for office space had seen significant
decline during 1990, 1991, 1992, 1993 and 1994.
The occupancy rate for the building owned by the Registrant and under lease
to The Sports Authority Inc. for the past five (5) years is as follows:
2000 100%
1999 100%
1998 100%
1997 100%
1996 100%
The building owned by the Registrant and under lease to Tandy Corp. (now
occupied by CompUSA) has been 100% occupied since October 1994. A summary of the
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amounts expended for such approvals for the three most recent fiscal years
during which such expenditures were made appears below. No such expenditures
were made in 1996, 1997, 1998, 1999 or 2000.
1994 1993 1992
Zoning Changes and Site Plan Approvals:
Legal Fees $ 2,859 $ 10,093 $ 15,840
Governmental Fees 11,827 55,811 19,990
Engineering 11,049 39,171 57,954
Paramus Park -0- -0- 200,000
------- -------- --------
Total Related Costs $25,735 $105,075 $293,784
======= ======== ========
The payment of $200,000 during 1992 to Paramus Park was a one-time fee in
connection with removal of an existing deed restriction which prohibited
adjacent retail activity. The balance of the payments for site plan approvals
were paid to various engineering, legal and surveying firms in connection
with professional services rendered to obtain governmental approvals.
No payments to affiliated parties were made in connection with the zoning
changes nor were any payments made to affiliated or related parties for the
acquisition of site plan approval. Any payments to affiliated parties are
unrelated to the cost of such activities and are detailed and disclosed in Item
11 (d) of this report.
During 1998, Computer City, Inc. retail stores were acquired by CompUSA,
Inc., another retailer of computers, computer accessories and software. The
Registrant accepted assignment of the Computer City lease by CompUSA and Tandy
Corporation remains on the lease as the guarantor.
Item 3. Legal Proceedings.
There are no legal proceedings of a material nature to which the Registrant
is a party other than ordinary, routine litigation incidental to the business of
the Registrant.
Item 4. Submission to Matters to a Vote of Security Holders.
None.
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PART II
Item 5. Market for the Registrant's Common Stock and Related Stockholder
Matters.
(a) The Registrant's common stock is traded on the over-the-counter
market. The bid price listed (Source: S&P Comstock) on December 7, 2000 was
$16.00 per share. On July 18, 1983, the Registrant's shares were deleted from
the NASDAQ system when no market maker for the Registrant's common stock any
longer maintained registration as such with the NASDAQ System.
(b) The approximate number of holders of Common Stock securities of the
Registrant as of December 7, 2000 was 578.
(c) No dividends have been paid or declared on the Common Stock of the
Registrant during the 2000, 1999 or 1998 fiscal years. In making decisions
regarding the possible payment of dividends, the Board of Directors considers
the Requirements of the Registrant in such ongoing activities as real estate
development and the research, development and engineering efforts of the
Registrant as well as such obligations as mortgages and debentures.
(d) Changes in Securities.
(Reference is made for Form 10Q for the six-month period ended March 31,
1984, wherein the Registrant completed an exchange of common stock for 5%
Debentures payable March 1, 1989. Reference is made to Notes 9 and 10 to the
Financial Statements for the years ended September 30, 1989 and 1990.)
The high and low bid information of the Registrant's common stock for the
last two years was estimated to be as follows: (Source: S&P Comstock).
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1999 2000
high low high low
Quarter Ended Dec. 31 15.50 14.25 16.00 16.00
Quarter Ended Mar. 31 14.50 14.50 16.00 16.00
Quarter Ended June 30 16.50 15.50 16.00 16.00
Quarter Ended Sept. 30 16.50 15.50 16.00 16.00
Such quotation represents prices offered by purchases without retail
mark-up, mark-down or commission and may not represent actual sales
transactions.
Item 6. Selected Financial Data.
Financial information for the five-year period commencing October 1, 1995
and ending September 30, 2000 is presented below.
HOLOBEAM, INC.
SUMMARY OF SELECTED FINANCIAL DATA
FOR THE YEARS ENDED SEPTEMBER 30,
2000 1999 1998 1997 1996
Gross Income $2,076,374 $1,960,262 $1,964,562 $1,873,382 $1,856,218
Net Income (Loss) 200,056 197,161 166,891 303,882 306,434
Weighted Average Number
of Common Shares
Outstanding 294,013 298,101 304,237 310,426 316,992
Earnings Per Share
(Loss) 0.66 0.66 0.55 0.98 0.97
Total Assets 7,021,229 7,163,243 7,255,082 7,552,667 7,743,614
Long-Term Debt 5,305,149 5,653,044 5,984,002 6,310,060 6,667,298
Shareholders'
Equity 1,093,635 971,695 856,536 748,020 558,463
Gross Rental
Income 2,020,217 1,925,717 1,925,534 1,845,509 1,838,216
Net Rental
Income 1,757,337 1,667,922 1,667,028 1,578,010 1,577,254
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
(1) Liquidity.
Cash flows from the Registrant's real estate rental activities
approximated $495,000.00 during the fiscal year ended
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September 30, 2000 as compared to approximately $540,000.00
for the previous fiscal year. The Registrant anticipates that
cash flows sufficient to fund its operating estimates will
continue during the terms of its operating leases for its
rental properties. (Reference is made to Note 3 Rental Income
under operating leases, to the accompanying financial
statements for the years ended September 30, 2000 and 1999.)
Working capital at September 30, 2000 was 395,195.00,
representing an increase of $19,970.00 when compared to the
working capital at September 30, 1999. The Registrant expects
revenues related to the operating leases to be sufficient to
provide the funding for its operations until the leases expire
in 2009 and 2012. The leases also contain renewal options
that will extend revenues beyond 2009 and 2012.
Minimum future rental income expected from the operating
leases approximated $24,164,816.00 and is available during the
lease term to provide cash flows capable of sustaining the
Registrant's profitable operations.
(2) Capital Resources
The Registrant's properties, located at 50 A&S Drive, Paramus,
New Jersey, do not presently require renovation or additional
construction in order to maintain real estate rental
operations. The Registrant does not anticipate future capital
requirements associated with its properties other than those
that are routine and incidental to its real estate rental
activities. Expenditures for maintenance taxes and insurance
are expected but these are not planned capital expenditures
that would have a materially adverse effect upon the
Registrant's financial condition.
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The Registrant intends to fund the development of the medical
staples project during 2001. Additional testing during 2001
will be performed and the Registrant will decide if such
activities are to continue after the fiscal year ending
September 30, 2001. Funding during 2001 is anticipated to
approximate $300,000.00 and will be provided by cash flows
generated from the Registrant's real estate rental operations.
No revenues are expected from the medical staple technology
during 2001.
The Registrant funded contributions to its defined benefit
pension plan in the amount of $330,122.00 and was charged to
current general expense on the statements of operations for
the fiscal year ended September 30, 2000. The Registrant's
funding policy is to make annual contributions in amounts
sufficient to fully provide for all eligible employees
benefits by the time they retire. Continued funding is not
expected to have an adverse effect upon the Registrant's
financial condition. (Reference is made to Note 15 to the
Registrants Financial Statements for the years ended September
30, 2000, 1999 and 1998.)
(3) Results of Operations.
(a) During 2000, the Registrant recognized after-tax earnings of
$200,056.00 as compared to $197,161.00 for the fiscal year ended September
30, 1999. The results of operations reflect performance consistent with
prior years and results form increased revenues associated with the
Registrant's real estate rental activities and proportionate reduction in
related expenses. When compared to 1999, revenues increased $116,112.00
while interest expense associated with the Registrant's mortgage decreased
$26,837.00 to $513,106.00. The favorable effect of interest reduction and
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increased revenues was partially offset by increased income tax and
general expenses.
Funding of the Registrant's surgical staple project continued during 2000
with expenditures amounting to $192,085.00 as compared to $194,364.00 in
1999. Efforts are proceeding to continue initial testing during 2001 and
the Registrant intends to fund the project with resources generated from
its operating activities. Such funding is anticipated to approximate
$300,000.00 during 2001.
The Registrant's occupancy rates for the real estate rental properties
was 100% during 2000 and it is anticipated to remain at 100% during 2001
which should result in comparable favorable performance fo 2001. Rental
expenses, which approximated $262,900.00 in 2000 are expected to increase
approximately 5% and are not expected to have any materially adverse
effect upon the Registrant's financial condition.
The Registrant's defined benefit pension plan was funded in the amount
of $330,122.00 during the fiscal year ended September 30, 2000 as compared
to $311,388.00 for 1999. The Registrant anticipates continued funding of
plan requirements with the cash flows presently generated by its
operations. Funding of the plan is not expected to have any material
adverse effect upon its financial condition.
(b) During 1999, the Registrant recorded after-tax income of
$197,161.00 as compared to $166,891.00 for the year ended September 30,
1998. The results of operations reflect improved performance as a result
of decreased interest expense associated with the Registrant's mortgage on
the rental properties and in reduced expenditures in connection with the
Registrant's medical staples project. When compared to 1998 costs,
interest expense decreased $24,582.00 and Research and Development
decreased $30,677.00. Gains associated with decreased expenses were
partially offset by increased income tax expense.
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The Registrant has 100% tenant occupancy in its rental properties
resulting in consistent earnings performance for the fiscal years ended
September 30, 1998 and 1999. The Registrant anticipates that such
performance will continue during the next twelve (12) months. As the
Registrant's properties age, it is anticipated that the buildings will
require more upkeep and maintenance costs. Such costs are not expected to
materially effect the long-term performance of the Registrant's real
estate rental activities.
During 1999, the Registrant funded the research and development
activities associated with the medical staple project in the amount of
$194,364.00 which represents a reduction of $30,677.00 when compared to
expenditures for 1998. The Registrant expects to continue funding this
project with the cash flows associated with its real estate rental
activities during 2000. When definitive testing results can be obtained,
the Registrant will determine if funding should continue into fiscal year
2001. The Registrant expects to fund the project during 2000 for testing,
development and patent activities in the amount of approximately
$300,000.00.
Funding of the Registrant's defined benefit plan during the year
ended September 30, 1999 was $311,388.00 as compared to $307,773.00 for
1998. The Registrant expects to continue funding the plan on an annual
basis. The expenses associated with annual funding of the plan are not
expected to have a materially adverse effect upon the Registrant's
financial condition. (Reference is made to Exhibit entitled "Defined
Benefit Plan" filed with Quarterly Report Form 10Q for the Quarter ended
June 30, 1998 and filed on August 8, 1998.)
(c) The Registrant recorded net income for the year ended
September 30, 1998 in the amount of $166,891.00 as compared to $303,882.00
for the year ended September 30, 1997. The results of operations reflect
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improved revenues and income associated with the Registrant's real estate
rental activities as net rental income was $1,667,028.00 as compared to
$1,578,010.00 in 1997.
The Registrant continues to experience consistent earnings
performance due to 100% occupancy of the Registrant's rental properties
and the favorable long-term operating leases. Costs associated with the
Registrant's real estate rental activities are expected to remain at
present levels during the short-term as are the revenues associated with
such operating leases.
Long-term, costs are expected to rise with inflation and some
capital maintenance and repairs are expected as the buildings mature and
require more intensive upkeep. Since there are rental income escalation
provisions contained in the operating leases, revenues are expected to be
sufficient to provide for such costs, which are not expected to have any
materially adverse effects upon the results of operations during the term
of the leases.
The Registrant continued to fund the engineering and development
activities related to the surgical staple technology it has developed.
Expenditures in connection with this project for 1998 were $225,041.00,
which represented an increase of $77,479.00 when compared to the 1997
expenditures for the staples project. The Registrant expects to continue
funding this project during 1999 and will utilize the cash flows and
revenues from its real estate rental activities to fund the ongoing
testing and development for the staples project. Testing has commenced at
a medical center. If definitive favorable results are obtained, the
Registrant will analyze its position and determine if funding should
continue beyond fiscal year 1999. The Registrant anticipates funding
testing, development and patent activities in conjunction with the staples
project during 1999 to approximate $300,000.00.
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During 1998, the Registrant contributed $307,773.00 to its defined
benefit plan (pension plan) which covers all eligible employees who have
completed one year of service. (Reference is made to Exhibit
entitled"Defined Benefit Plan" filed with Quarterly Report 10Q for the
Quarter ended June 30, 1998 and filed on August 8, 1998.) The Registrant
expects to continue to fund the pension plan on an annual basis and does
not expect the expense of such plan to have a materially adverse effect
upon its financial condition.
(4) Other Matters
The Registrant was able to positively resolve the potential impact
of the Year 2000 on the processing of date-sensitive information by the
Registrant's computerized information system. The Year 2000 problem is
the result of computer programs being written using two digits (rather
than four) to define the applicable year. Any of the Registrant's
programs that have time-sensitive software could recognize a date using
"00" as the year 1900 rather than the year 2000, which may have caused
miscalculations or systems failures. The costs of addressing this issue
did not have a material adverse impact on the Registrant's financial
position, results of operations or cash flows. The Registrant devoted the
necessary resources and resolved all significant Year 2000 issues.
Item 8. Financial Statements and Supplemental Data.
Financial statements, supplementary financial information and Accountant's
Report are filed with this report. (See Financial Statements and reports
thereon of R.A. Fredericks and Company for 1999 and 2000.)
Item 9. Disagreements on Accounting and Financial Disclosure.
None.
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PART III
Item 10. Directors and Executive Officers of the Registrant.
(a) The following Table identifies each Director of the Registrant and
indicates his position with the Registrant, the duration of his term as Director
and the date when he was first elected.
Date First
Name and Age Title Term Elected
Melvin S. Cook Chairman of the Board 2002 Annual 1968
Age 69 President of Registrant Meeting
William M. Hackett Treasurer of Registrant 2003 Annual 1984
Age 57 Meeting
Beverly Cook Office Manager and 2001 Annual 1995
Age 64 Secretary of Registrant Meeting
(1) Martin R. Infante, Secretary of the Registrant and member of the Board of
Directors served the Registrant in such capacities until his death while
in office during the year ended September 30, 1997.
(b) The following Table represents the name and age of each officer of
the Registrant, the positions and offices held by each, the term of each office
and the period which each has served in the indicated office.
Date First
Name and Age(1) Title Term Elected
Melvin S. Cook Chairman of the Board Annual 1968
Age 69
William M. Hackett Treasurer of the Registrant Annual 1975
Age 57
Beverly Cook Secretary of the Registrant Annual 1997
Age 64
(1) Martin R. Infante, Secretary of the Registrant and member of the Board of
Directors of the Registrant served in such capacities until his death
during the year ended September 30, 1997.
(1) Each officer has been selected to serve until the next Annual Meeting
of the Board of Directors or until his respective successor shall be elected and
shall quality.
(c) There are no significant employees other than those identified
in (a) and (b) above.
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(d) The following Table summarizes the business experience and
principal occupation during the last five years of each person who serves as a
director of executive officer of the Registrant, as well as any other director-
ship held by persons serving as directors of the Registrant.
Other
Name(1) Business Experience/Occupation Directorship
Melvin S. Cook Chairman of the Board of Directors and None
President of the Registrant since its
formation.
William M. Hackett Vice President of Registrant from None
August 23, 1975 until June 1, 1981 and
Controller of Registrant and member of
accounting staff from October 1973 to
August 1975. Treasurer of Registrant
from June 1981 to present. Vice President
of CMA Co., Inc. from November 1986 to
present. Elected President of CMA Co., Inc.
in 1998.
Beverly Cook Office Manager of Registrant from June 1, None
1981 until present. Married to Melvin S.
Cook, President and Chairman of the
Board of Directors.
(1) Martin R. Infante, Secretary of the Registrant and member of the Board of
Directors of the Registrant served in such capacities until his death
during the year ended September 30, 1997.
(f) Not applicable.
Item 11. Management Compensation.
(a) The following Table shows all direct remunerations paid by the
Registrant during the fiscal year ended September 30, 2000 to each Director or
Officer of the Registrant whose aggregate direct remuneration exceeds
$100,000.00, and the direct remuneration paid all Directors and Officers of the
Registrant as a group for such fiscal year.
20
HOLOBEAM, INC.
Form 10K
Summary Compensation Table
September 30, 2000
Long Term Compensation
Name and Annual Compensation Awards Payouts All Other
Principal Position Year Salary Bonus Other Restricted Stock SUO/SARS LTIP Payouts Compensation
Melvin S. Cook 2000 $306,250 -0- -0- -0- -0- -0- -0-
President and CEO 1999 250,000 -0- -0- -0- -0- -0- -0-
and Director 1998 250,000 -0- -0- -0- -0- -0- -0-
William M. Hackett 2000 23,138 -0- -0- -0- -0- -0- -0-
Treasurer and 1999 17,550 -0- -0- -0- -0- -0- -0-
Director 1998 17,550 -0- -0- -0- -0- -0- -0-
Martin R.Infante 2000 -0- -0- -0- -0- -0- -0- -0-
Secretary and 1999 -0- -0- -0- -0- -0- -0- -0-
Director 1998 -0- -0- -0- -0- -0- -0- 9,999
Beverly Cook 2000 93,750 -0- -0- -0- -0- -0- -0-
1999 75,000 -0- -0- -0- -0- -0- -0-
1998 75,000 -0- -0- -0- -0- -0- -0-
All Officers and 2000 $423,138 -0- -0- -0- -0- -0- -0-
Directors as a 1999 342,550 -0- -0- -0- -0- -0- -0-
Group 1998 342,550 -0- -0- -0- -0- -0- 9,999
(1) Martin Infante performed services for the registrant as landlord and
insurance broker. See Item 11(D) of this
report. Mr. Infante died during the year ended September 30, 1997
21
Item 11 (cont'd.)
The Summary Compensation Table represents all aggregate forms of remuneration
to the executive officers of the Registrant. There were no other payments or
compensation awarded to the officers of the Registrant.
(b) The Directors who are not employees of the Registrant receive
standard attendance fees of $200 plus applicable expenses for travel.
No Directors' fees were paid during 2000, 1999 and 1998.
(c) The following Table sets forth all the options to purchase
securities from the Registrant which were granted to or exercised by any of
its directors and each officer whose direct remuneration exceeds $100,000.00 as
well as all officers and directors as a group since October 1, 1999.
All Directors and Officers as a Group
Options Granted 0
Options Exercised 0
Unexercised Options Held at 9/30/00 0
(d) The following Table sets forth information about the Registrant's
defined benefit pension plan benefits:
Pension Plan Table
Years of Service
Remuneration 36
60,000 60,000
160,000 107,112
200,000 107,112
Pensions are based upon average annual earnings (salary and bonus) for the
highest three consecutive years of employment with the Registrant.
For Melvin Cook and Beverly Cook, the amounts equaled $107,112 and $60,000,
respectively, as of September 30, 2000. Melvin Cook and
Beverly Cook will be credited at normal retirement date with 36 years service
each under the Pension Plan as of September 30, 2000. Pensions may be
adjusted for a surviving spouse's
22
pension or other options under the Pension Plan. Pensions are not subject to
any other deduction for Social Security or any other amounts.
23
PART IV
Item 12. Security Ownership of Certain Beneficial Owners and Management.
(a) The stockholding of each person who is known by the Registrant to own
beneficially more than 5% of any classes of securities as of December 7, 2000
is as follows:
Title of Class Name & Address Amount Owned % of Class
Common Stock, Par Melvin S. Cook 123,497 42.3%
Value $0.10 Per Share 217 First Street
Ho-Ho-Kus, NJ 07423
Common Stock, Par Beverly Cook 95,000 32.4%
Value $0.10 Per Share 217 First Street
Ho-Ho-Kus, NJ 07423
(b) The stockholding of Officers and Directors as a group as of December 7,
2000 are as follows:
Title of Class Amount Beneficially Owned % of Class
Common Stock, Par Value 218,497 74.7%
$0.10 Per Share
(c) There are no contractual arrangements that might result in a change of
control of Registrant.
Item 13. Certain Relationships and Related Transactions - Not Applicable
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8K
(a) Index to Financial Statement filed as part of the Annual Report and
attached.
(b) Reports on Form 8K.
(c) Lease with The Sports Authority, Inc. filed as part of the 1993
Annual Report Form 10K-A.
(d) Financial Statement Schedules.
(e) Lease with Tandy Corp. filed as part of the 1995 Annual Report Form 10K.
The following is a list of Financial Statement Schedules filed as part of
this Annual Report on Form 10K. All other schedules omitted herein are so
omitted because either (1) they are not applicable, or (2) they required
information
24
is shown in the Financial Statements.
Schedules
V Property and Equipment
VI Accumulated Depreciation and Amortization of
Property and Equipment
X Supplementary Income Statement Information
XI Real Estate and Accumulated Depreciation
XII Mortgage Loans on Real Estate
(e) Exhibits, including those incorporated by references.
The following is a list of Exhibits filed as part of this Annual Report on
Form 10K.
Where so indicated by footnotes, Exhibits that were previously filed are
incorporated by references.
Legend for Documents
Incorporated
by Reference
Articles of Incorporation and By Laws
Articles of Incorporation (1)
By-Laws (1)
By Laws as Amended (2)
Instruments Defining Rights of Share-
holders Including Indentures
Specimen Certificate for Shares of
Common Stock (1)
Security Combination Agreement (1)
Additional Exhibits - Exchange Offer (3)
- Lease with Sports
Authority, Inc. (4)
- Lease with Tandy
Corporation (5)
Form 8K - Change in Certifying Accountants (6)
Form 8K-A - Change in Certifying Accountants (7)
Defined Benefit Plan (8)
25
Legend
(1) Filed September 21, 1968 as an Exhibit to Form 10K and incorporated
herein by reference.
(2) Filed December 15, 1986 as part of proxy statement and incorporated
herein by reference.
(3) Filed December 23, 1983 - Exchange Offer.
(4) Filed October 12, 1994 as an exhibit to Form 10K-A and incorporated
herein by reference.
(5) Filed December 21, 1995 as an exhibit to Form 10K.
(6) Filed November 15, 1996 and incorporated herein by reference.
(7) Filed November 20, 1996 and incorporated herein by reference.
(8) Filed August 8, 1998 with Quarterly Report 10Q and incorporated
herein by reference.
Supplemental Information
No annual report or proxy material has been sent to security holders.
Such annual report and proxy material are to be furnished to security holders
subsequent to the filing of the annual report on this form. Copies of such
material will be furnished to the Commission when it is sent to security
holders.
26
HOLOBEAM, INC.
Form 10K
September 30, 2000
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 on its behalf by the
undersigned,
thereunto duly authorized.
Registrant Holobeam, Inc.
By William M. Hackett
Date December 24, 2000
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.
HOLOBEAM, INC.
By: Melvin S. Cook
Melvin S. Cook
President and Chairman of the Board
Date: December 24, 2000
By: William M. Hackett
William M. Hackett
Director and Treasurer
Date: December 24, 2000
By: Beverly Cook
Beverly Cook
Director
Date: December 24, 2000
December 24,2000
US Securities and Exchange Commission
6432 General Green Way
Alexandria, VA 22312
Attn: File Support
Re: Holobeam, Inc., File No. 03385
Dear Sir or Madam:
Enclosed you will find one (1) paper format copy of Holobeam, Inc. Annual
Report, Form 10K for the year ended September 30, 2000 which has been
previously filed/transmitted via the EDGAR system.
Kindly acknowledge receipt by signing the enclosed photocopy of this
letter and return it to us in the accompanying stamped, self-addressed
envelope.
Very truly yours,
William M. Hackett
Treasurer
mjb
Encs.
HOLOBEAM, INC.
217 First Street
P.O. Box 287
Ho-Ho-Kus, New Jersey 07423-0287
December 31, 2000
U.S. Securities and Exchange Commission
Mellon Bank - Account 910-8739
Box 360055M
Pittsburgh, PA 15251
Dear Sir or Madam:
Enclosed you will find our Check No. which has been issued for
payment of the Annual Report Form 10K filing fee. Our file number is 0-3385.
Kindly acknowledge receipt by signing a copy of the enclosed letter and
return it to us in the accompanying stamped, self-addressed envelope.
Very truly yours,
W.M. Hackett
Treasurer
mjb
Enc.
HOLOBEAM, INC.
FINANCIAL STATEMENTS
WITH INDEPENDENT ACCOUNTANTS' REPORT
YEARS ENDED
SEPTEMBER 30, 2000, 1999 AND 1998
R.A. FREDERICKS & COMPANY, LLP
CERTIFIED PUBLIC ACCOUNTANTS
HOLOBEAM, INC.
INDEX TO FINANCIAL STATEMENTS
PAGE
INDEPENDENT ACCOUNTANTS' REPORT F-1
FINANCIAL STATEMENTS:
BALANCE SHEETS F-2-3
STATEMENTS OF OPERATIONS F-4
STATEMENTS OF SHAREHOLDERS' EQUITY F-5
STATEMENTS OF CASH FLOWS F-6
NOTES TO FINANCIAL STATEMENTS F-7-20
SCHEDULES FOR THE YEARS ENDED SEPTEMBER 30, 2000
1999 AND 1998
V PROPERTY AND EQUIPMENT F-21
VI ACCUMULATED DEPRECIATION AND AMORTIZATION
PROPERTY AND EQUIPMENT F-22
X SUPPLEMENTARY INCOME STATEMENT INFORMATION F-23
XI REAL ESTATE AND ACCUMULATED DEPRECIATION F-24
XII MORTGAGE LOANS ON REAL ESTATE F-25
ALL OTHER SCHEDULES HAVE BEEN OMITTED BECAUSE THEY ARE NOT APPLICABLE,
OR THE INFORMATION IS SHOWN IN THE FINANCIAL STATEMENTS OR NOTES THERETO.
R.A. FREDERICKS & COMPANY, LLP
Certified Public Accountants
Ralph A. Fredericks, CPA
Ellen T. O'Donnell, CPA
Robert J. Rosenberg, CPA
Eric Frank Zach, CPA
INDEPENDENT ACCOUNTANTS' REPORT
To the Board of Directors and Stockholders
Holobeam Inc.
Ho-Ho-Kus , New Jersey
We have audited the accompanying balance sheets of Holobeam, Inc. as of
September 30, 2000 and 1999 and the related statements of operations,
shareholders' equity and statements of cash flows for the years ended
September 30, 2000, 1999, 1998. These financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits 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 misstatements. 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 audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects the financial position of Holobeam, Inc. as of
September 30, 2000 and 1999, and the results of its operations and its cash
flows for the years ended September 30, 2000, 1999, 1998, in conformity with
accounting principles generally accepted in the United States. Further,
it is our opinion that the schedules referred to in the accompanying index
present fairly the information set forth therein.
R.A. FREDERICKS & COMPANY, LLP
Montville, New Jersey
December 15, 2000
F-1
170 Changebridge Road Unit B-4, Montville, New Jersey 07045
Tel: (973) 575-6200 Tel: (212) 544-2204 Fax: (973) 575-5444
HOLOBEAM, INC.
BALANCE SHEETS
SEPTEMBER 30, 2000 AND 1999
ASSETS
2000 1999
CURRENT ASSETS
Cash (including cash equivalents of $203,598
in 2000 and $774,084 in 1999) $ 250,400 $ 891,119
Short-term Investments 738,517 -
Accrued Interest 713 1,872
Accounts Receivable 31 28
Prepaid Expenses 27,979 10,710
-------- -------
TOTAL CURRENT ASSETS 1,017,640 903,729
--------- -------
PROPERTY AND EQUIPMENT-COST
Real Estate:
Land 452,772 452,772
Buildings and Building Improvements 6,961,244 6,961,244
--------- ---------
TOTAL 7,414,016 7,414,016
--------- ---------
Machinery and Equipment 66,939 66,939
Furniture and Fixtures 20,633 20,633
--------- ---------
TOTAL 7,501,588 7,501,588
Less: Accumulated Depreciation and Amortization 1,992,387 1,781,272
--------- ---------
PROPERTY AND EQUIPMENT-NET 5,509,201 5,720,316
--------- ---------
OTHER ASSETS
Patents and Patent Application Cost, net of
accumulated amortization of $231,513 in 2000
and $217,850 in 1999 66,549 70,250
Deferred Charges 427,839 468,948
------- -------
TOTAL OTHER ASSETS 494,388 539,198
---------- ---------
TOTAL ASSETS $ 7,021,229 $ 7,163,243
========== =========
The accompanying notes are an integral part of the financial statements.
F-2
HOLOBEAM, INC.
BALANCE SHEETS
SEPTEMBER 30, 2000 AND 1999
LIABILITIES AND SHAREHOLDERS' EQUITY
2000 1999
CURRENT LIABILITIES
Mortgage Payable-Current Portion $ 347,897 $ 318,832
Accounts Payable 29,303 6,510
Deferred Rent - 107,976
Franchise Taxes Payable - 1,980
Income Taxes Payable 55,600 24,340
Other Accrued Expenses 33,949 23,158
Accrued Pension 114,448 -
Accrued Interest Payable 41,248 43,575
Accrued Commissions Payable - 12,133
------- -------
TOTAL CURRENT LIABILITIES 622,445 538,504
------- -------
LONG-TERM DEBT
Mortgage Payable (Net of Current Portion) 5,305,149 5,653,044
--------- ---------
TOTAL LONG-TERM LIABILITIES 5,305,149 5,653,044
--------- ---------
TOTAL LIABILITIES 5,927,594 6,191,548
--------- ---------
SHAREHOLDERS' EQUITY
Common Stock, Par Value $.10 Per Share
Authorized 2,000,000 Shares, Issued
305,598 30,559 30,559
Additional Paid in Capital 9,825,498 9,825,498
Accumulated Deficit (8,550,449) (8,750,505)
--------- ---------
TOTAL 1,305,608 1,105,552
Less: Cost of Shares in Treasury (13,251
in 2000 and 8,692 in 1999) (211,973) (133,857)
-------- --------
TOTAL SHAREHOLDERS' EQUITY 1,093,635 971,695
--------- ---------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 7,021,229 $7,163,243
========= =========
The accompanying notes are an integral part of the financial statements
F-3
HOLOBEAM, INC.
STATEMENTS OF OPERATIONS
YEARS ENDED SEPTEMBER 30, 2000, 1999 AND 1998
2000 1999 1998
REVENUES
Rental Income $ 2,020,217 $1,925,717 $1,925,534
Interest Income 44,024 34,545 38,977
Other 12,133 - 51
--------- --------- ---------
TOTAL 2,076,374 1,960,262 1,964,562
--------- --------- ---------
COSTS AND EXPENSES
Rental Expense 262,880 257,795 258,506
General Expense 750,577 637,167 633,625
Interest Expense 513,106 539,943 564,525
Research and Development 192,085 194,364 225,041
-------- -------- --------
TOTAL 1,718,648 1,629,269 1,681,697
--------- --------- ---------
INCOME BEFORE INCOME TAXES 357,726 330,993 282,865
INCOME TAX EXPENSE 157,670 133,832 115,974
--------- -------- --------
NET INCOME $ 200,056 $ 197,161 $ 166,891
========= ======== ========
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING 294,013 298,101 304,237
-------- -------- -------
EARNINGS PER SHARE $ .68 $ .66 $ .55
========= ======== ========
The accompanying notes are an integral part of the financial statements.
F-4
HOLOBEAM, INC.
STATEMENTS OF SHAREHOLDERS' EQUITY
YEARS ENDED SEPTEMBER 30, 2000, 1999 AND 1998
Additional
Common Stock Paid-In Accumulated Treasury Stock
Shares Amount Capital Deficit Shares Amount
BALANCE, SEPTEMBER 30, 1996 1,052,598 $105,260 $12,399,699 $(9,114,557) 746,573 $2,642,382
Net Income 166,891
Purchase of Treasury Stock 3,822 58,375
Retirement of Treasury Stock (747,000) (74,701) (2,574,201) - (747,000) (2,648,902)
------- -------- ---------- -------- -------- ---------
BALANCE, SEPTEMBER 30, 1997 305,598 $30,559 $9,825,498 $(8,947,666) 3,395 $51,855
Net Income 197,161
Purchase of Treasury Stock 5,297 82,002
------- ------ -------- ------- ----- --------
BALANCE, SEPTEMBER 30, 1999 305,598 $30,559 $9,825,498 $(8,750,505) 8,692 $133,857
Net Income 200,056
Purchase of Treasury Stock 4,559 78,116
-------- ------ ------- ------- ---- ------
BALANCE, SEPTEMBER 30, 2000 305,598 $ 30,559 $9,825,498 $(8,550,449) 13,251 $211,973
======= ====== ======== ======== === =======
The accompanying notes are an integral part of the financial statements.
F-5
HOLOBEAM, INC.
STATEMENTS OF CASH FLOWS
YEARS ENDED SEPTEMBER 30, 2000, 1999 AND 1998
2000 1999 1998
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $200,056 $197,161 $ 166,891
------- ------- --------
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
Depreciation 211,115 211,865 214,427
Amortization 54,772 54,958 54,442
Patent and Patent Application Costs (9,962) (8,075) (5,495)
Increase (Decrease) in:
Accounts Payable and Accrued Expenses 54,876 119,052 (104,454)
Real Estate Brokers Commissions - (33,862) (33,863)
Decrease (Increase) in:
Accounts and Other Receivables (3) (28) -
Interest Receivable 1,159 3,951 (1,772)
Prepaid Expenses (17,269) (2,618) 1,556
------- ------- -------
Total Adjustments 294,688 345,243 124,841
------- ------- -------
Net Cash Provided by Operating Activities 494,744 542,404 291,732
------- ------- ------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Short-term Investments (738,517) - (21,282)
Capital Expenditures - - (7,976)
Sale of Short-Term Investments - 421,282 -
------- ------- -------
Net Cash Provided (Used) by Investing Activities(738,517) 421,282 (29,258)
------- ------- ------
CASH FLOWS FROM FINANCING ACTIVITIES
Principal Payments on First Mortgage (318,830) (292,188) (267,784)
Purchase of Treasury Stock (78,116) (82,002) (58,375)
------- ------- -----
Net Cash Used by Financing Activities (396,946) (374,190) (326,159)
------- ------- --------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS (640,719) 589,496 (63,685)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 891,119 301,623 365,308
------- ------- --------
CASH AND CASH EQUIVALENTS AT END OF YEAR $ 250,400 $ 891,119 $ 301,623
======= ======= ========
SUPPLEMENTAL CASH FLOWS DISCLOSURES
Interest Paid $ 515,433 $ 542,075 $ 566,479
Income Taxes Paid $ 118,890 $ 115,072 $ 107,198
The accompanying notes are an integral part of the financial statements.
F-6
HOLOBEAM, INC.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2000, 1999 AND 1998
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Nature of Operations
The Company is engaged in the rental of real property for retail use and in
development of surgical staples and the technology used to apply the
staples for use in internal surgery.
b. Depreciation and Amortization
It is the policy of the Company to provide for depreciation and amortization
of the building and equipment on a straight-line and accelerated basis in
amounts sufficient to write-off the cost of the assets over their estimated
useful lives, which are as follows:
Building and Building Improvements 31. 5 to 40 years
Machinery and Equipment 5 to 7 years
Furniture and Fixtures 7 to 10 years
Maintenance and repairs are charged to operations in the year in which
incurred, while replacements and betterments are capitalized by charges to
the appropriate asset accounts. The cost and accumulated depreciation
and amortization with respect to assets retired or otherwise disposed, are
eliminated from the assets and related accumulated depreciation and
amortization accounts and any profit or loss resulting therefrom is reflected
in operations.
Patent and patent application costs are amortized on a straight-line basis
over a ten year period.
c. Earnings Per Share
Earnings per share of common stock has been computed by dividing net
income by the weighted average number of common shares outstanding
during the year. Diluted earnings per share of common stock is the same
as earnings per share prior to dilution.
d. Common Stock
Each share of common stock is entitled to one vote. No such shares of
common stock were reserved at September 30, 2000, 1999, or 1998. On
February 19, 1998, the Company retired 747,000 shares of Treasury Stock
purchased between 1970 and January of 1998 at a cost of $2,648,902.
e. Statement of Cash Flows
For purposes of reporting cash flows, all liquid investments with original
maturities of three months or less are considered cash equivalents.
F-7
HOLOBEAM, INC.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2000, 1999 AND 1998
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
f. Income Taxes
Deferred income taxes are provided on temporary differences between
financial statement and income tax bases of assets and liabilities.
Generally, deferred tax assets are recognized in the current period for the
future benefit of net operating loss carry forwards and items for which
expenses have been recognized for financial statement purposes, but will
be deductible in future periods. Valuation allowances are established when
necessary to reduce deferred tax assets to the amount expected to be
realized.
g. Deferred Charges
It is the policy of the Company to charge costs associated with the
acquisition of long term debt (mortgages) to expense over the term of the
mortgage.
In addition, the Company charges costs associated with the procurement
of operating leases, specifically real estate brokers commissions, to
expense during the term of the operating lease.
h. Use of Estimates
The preparation of financial statements requires management to make
estimates and assumptions that affect certain reported amounts and
disclosures. Accordingly, actual results could differ from these estimates.
I. Short-Term Investments
The Company accounts for marketable securities in accordance with the
provisions of SFAS No. 115 "Accounting for Certain Investments in Debt
and Equity Securities".
Short-term investments have an original maturity of more than three months
and a remaining maturity of less than 1 year. These investments consist of
marketable debt securities which are stated at amortized cost as the
Company has classified these securities as held-to-maturity.
F-8
HOLOBEAM, INC.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2000, 1999 AND 1998
NOTE 2. INCOME TAXES
The difference between the statutory federal income tax rate on income before
income taxes and the Company's effective income tax rate is as follows:
2000 1999 1998
Federal statutory income tax rate 34% 34% 34%
State tax provisions, net of
federal benefits 6 6 6
Other 4 1 1
--- ---- ----
Effective income tax expense rate 44% 41% 41%
=== ==== ===
Income tax expense consists of the following:
2000 1999 1998
Current
Federal $ 122,221 $ 104,229 $ 89,716
State 35,449 29,603 26,258
------- ------- --------
$ 157,670 $ 133,832 $ 115,974
======= ======= =======
NOTE 3. RENTAL INCOME UNDER OPERATING LEASES
The Company has leased two buildings at its A & S Drive, Paramus, N.J. site for
retail use. The Sports Authority, Inc. has leased the 62,000 sq. ft.
building for a lease term of twenty (20) years and the Tandy Corporation has
leased the 30,000 sq. ft. building for use as a Comp USA retail store for a
lease term of fifteen (15)
years. The tenants are also responsible for real estate taxes and other
assessments as defined in the operating lease agreements.
2000 1999 1998
Buildings and building improvements:
Cost $ 6,961,244 $6,961,244 $6,961,244
Accumulated depreciation 1,926,523 1,726,564 1,526,605
--------- --------- ----------
Net buildings and building
improvements $ 5,034,721 $5,234,680 $5,434,639
========= ========= =========
F-9
HOLOBEAM, INC.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2000, 1999 AND 1998
NOTE 3. RENTAL INCOME UNDER OPERATING LEASES (Continued)
The minimum future rentals on noncancellable operating leases for the years
ending September 30, are as follows:
2001 $2,020,217 2006 $2,225,142 2011 $1,497,842
2002 2,108,447 2007 2,322,194 2012 1,373,022
2003 2,116,467 2008 2,331,017 ---------
2004 2,116,467 2009 2,331,017
2005 2,225,142 2010 1,497,842
Total $24,164,816
==========
Net rental income consists of the following:
2000 1999 1998
Rental income $2,020,217 $1,925,717 $1,925,534
Depreciation expense (199,959) (199,959) (199,959)
Other expenses (62,921) (57,836) (58,547)
--------- --------- ---------
Rental income, net $ 1,757,337 $1,667,922 $1,667,028
========= ========= =========
In 2000, 1999, and 1998, depreciation expense included all depreciation of
the rental buildings and building improvements.
a) The Company entered into a triple net lease agreement with The Sports
Authority, Inc., Fort Lauderdale, Florida. The term of the lease is twenty (20)
years with four (4) options to extend the term for an additional period of five
(5) years in each option.
The Company was responsible for funding certain improvements to the
building pursuant to the lease agreement and incurred costs amounting to
$3,567,276 at September 30, 1993. The Company reimbursed The Sports
Authority, Inc. for such improvements and on February 5, 1993 the original
lease was amended and the base rent was increased to reflect the improved
condition of the building.
The Company obtained additional mortgage financing totaling $7,500,000 in
order to fund reimbursement to The Sports Authority, Inc., whose former
parent company, K-Mart Corporation (K-mart Corporation is a public company
and financial information regarding K-mart is publicly available) has
guaranteed the incremental monthly rental payments over the remaining life
of the lease. (See Note 7).
The base rents under the amended lease were increased as follows:
2nd through 5th years $1,208,217
6th through 10th years 1,295,716
11th through 15th years 1,391,967
16th through 20th years 1,497,842
F-10
HOLOBEAM, INC.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2000, 1999 AND 1998
NOTE 3. RENTAL INCOME UNDER OPERATING LEASES (Continued)
In addition to the rent, the tenant is responsible for real estate taxes and
other assessments as defined in the operating lease.
b) Tandy Corporation has constructed a 30,000 sq.ft. building on the Company's
site located in Paramus, N.J. for use as a Computer City retail store. Tandy
Corporation commenced paying rent to the Company pursuant to the terms
of the operating lease on October 1, 1994. The lease term is for fifteen (15)
years at an annual rental of $630,000 for the first five years, $724,500 for the
second five years and $833,175 for the last five years. Tandy Corporation
has three (3) options to extend the term of the lease for an additional period
of five (5) years for each such option.
Pursuant to the terms and conditions of the lease, the Company agreed to
reimburse Tandy Corporation up to $1,200,000 plus the costs of paving the
driveway and parking area and one-half (1/2) the cost of exterior lighting not
attached to the building. This construction allowance was amended to
$1,189,675 and paid in cash to Tandy Corporation on November 9, 1995.
Costs associated with the 30,000 sq. ft. building are as follows:*
Construction allowance paid to Tandy Corporation $1,189,675
Costs incurred by the Company for use variance
and site improvement (deferred until put in
service at October 1, 1994) 434,821
Construction costs incurred through September 30,
1994 (deferred until put in service at October 1, 1994) 964,505
Construction costs incurred during 1995 3,512
---------
Total Costs of 30,000 sq. ft. building occupied
by Tandy Corporation. $2,592,513
=========
(*) Does not include costs of improvements incurred by the tenant.
The construction allowance was payable to Tandy Corporation two (2) months
after a permanent certificate of occupancy was issued by local governmental
authorities. According to the terms and conditions of the lease agreement,
Tandy Corporation could accrue interest at the annual rate of 7% on the
unpaid balance and could also cease paying rent until such amounts payable
by the Company were paid. Accordingly, the Company elected to pay the
amounts in full on November 9, 1995.
On September 1, 1998, Tandy Corporation sold Computer City, Inc. to
CompUSA, Inc. The lease was assigned to CompUSA, Inc. and is still
guaranteed by Tandy Corporation.
F-11
HOLOBEAM, INC.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2000, 1999 AND 1998
NOTE 3. RENTAL INCOME UNDER OPERATING LEASES (Continued)
On January 23, 2000, CompUSA, Inc. entered into a merger agreement with Grupo
Sanborns, S.A. de C.V. and TPC Aquisition Corp., a subsidiary of Grupo Sanborns,
S.A. de C.V. The financial information for Grupo Sanborns, S.A. de C.V. is
unavailable. The lease is still guaranteed by Tandy Corporation.
The following is a condensed summary of financial information on the above
publicly held companies:
Tandy The Sports
Corporation Authority K-Mart
12/31/99 1/29/00 1/26/00
(In Millions) (In Thousands) (In Millions)
Current assets $ 1,403 $ 414,351 $ 8,160
------ ------- --------
Total assets 2,142 643,003 15,104
------ ------- --------
Current liabilities 925 352,249 4,076
------ ------- --------
Total liabilities 1,290 526,893 7,814
------ ------- --------
Common stock
put option 21 - -
------ ------- --------
Total stockholders'
equity 831 116,110 7,290
------ ------- --------
Net sales 4,126 1,494,689 35,925
------ ------- --------
Cost of sales 2,043 1,132,296 28,102
------ ------- --------
Gross profit 2,083 362,393 7,823
------ ------- --------
Income (loss) before
income taxes
(continuing) 481 (143,340) 1,300
------ ------- --------
Income taxes 183 (22,721) 337
------ ------- --------
Net income (loss) $ 298 $ (160,544) $ 518
------ ------- --------
NOTE 4. RESEARCH AND DEVELOPMENT
Research and development expenses in the amount of $192,085 in 2000, $194,364
in 1999, and $225,041 in 1998, were charged to operations and included in costs
and expenses.
F-12
HOLOBEAM, INC.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2000, 1999 AND 1998
NOTE 5. RENT EXPENSE
The Company occupies approximately 1,000 square feet of office and laboratory
space on an annual lease. Lease payments are $950 per month. Rent expense was
$11,400 in 2000, $11,400 in 1999 and $11,400 in 1998.
NOTE 6. PATENTS
The Company has discontinued efforts relating to solar cells and semi-conductor
technology. Work in the field has moved in other directions than that of the
Company's technology and there has been a substantial reduction of government
support in this technical area. The funding that had been received by
laboratories exploring the Company's technology has also terminated.
The Company is continuing its efforts in the area of surgical staple design
for use in
internal surgery. Several United States Patents have been issued and foreign
applications have been filed on a novel staple. The staple has been produced
and
it is anticipated that tests will continue during 2001 at a medical center.
Research
and development costs in the amounts of $192,085, $194,364 and $225,041 have
been expended in connection with the surgical staple during 2000, 1999 and 1998,
respectively.
NOTE 7. LONG-TERM DEBT
Long-term debt consists of two loans, one in the amount of $6,000,000 payable in
monthly installments of $55,328 including interest at 8.77% until 2011. The
second
is in the amount of $1,500,000 payable in monthly installments of $13,767
including
interest at 8.7% until 2011.
Costs incurred in connection with this mortgage amounted to $102,520 and are
charged to expense over the life of the mortgage. This amount is included in
the balance of deferred charges as detailed in Note 8. The expense for the
next five (5) years is presented below:
2001 $5,126
2002 5,126
2003 5,126
2004 5,126
2005 5,126
F-13
HOLOBEAM, INC.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2000, 1999 AND 1998
NOTE 7. LONG-TERM DEBT (Continued)
The balance outstanding for each debt issued at the end of 2000, 1999, and
1998 is as follows:
2000 1999 1998
First Mortgage on
62,000 sq. ft. Building $5,653,046 $5,971,876 $6,264,064
Real Estate Brokers Commissions
Payable - - 12,133
---------- --------- ---------
Total 5,653,046 5,971,876 6,276,197
Less Current Portion 347,897 318,832 292,195
---------- --------- ---------
Long-Term Portion $5,305,149 $5,653,044 $5,984,002
========= ========= =========
The mortgage is secured by the land and building and operating lease agreement
with The Sports Authority, Inc. (See Note 3).
The principle payments of long-term debt for the term of the mortgage is as
follows:
2001 $347,897 2006 $538,140 2011 $338,092
2002 379,611 2007 587,197
2003 414,217 2008 640,727
2004 451,978 2009 699,136
2005 493,181 2010 762,870
NOTE 8. DEFERRED CHARGES
The composition of deferred charges and related amortization is as follows:
Real Estate
Mortgage Brokers Commissions
Total Costs Sports Authority Tandy Corp.
Original Cost $712,160 $102,520 $279,584 $330,056
Accumulated Amortization 284,321 39,299 112,999 132,023
-------- ------- ------- -------
Balance 9/30/00 $427,839 $ 63,221 $166,585 $198,033
======== ======= ======= =======
Original Cost $712,160 $102,520 $279,584 $330,056
Accumulated Amortization 243,212 34,174 99,019 110,019
-------- ------- ------- -------
Balance 9/30/99 $468,948 $68,346 $180,565 $220,037
======== ======= ======= =======
F-14
HOLOBEAM, INC.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2000, 1999 AND 1998
NOTE 9. DEFERRED SITE COST
The Company incurred costs in connection with an application for a use
variance and
site improvements for the property owned by the Company at 50 A&S Drive,
Paramus,
New Jersey, adjacent to the building owned by the Company and leased to the
Sports
Authority, Inc. Such costs amounting to $806,656 have been considered to be
part of
the site cost and are included in fixed assets.
NOTE 10. OTHER EMPLOYEE BENEFITS
The Financial Accounting Standards Board issued and SFAS No. 106 " Employers
Accounting for Post Retirement Benefits", and SFAS No. 112 "Employers Accounting
for Post Employment Benefits", which changed employers' accounting for these
benefits. Since the Company has no post-retirement benefit plans, and does
not offer
post employment benefits, SFAS No. 106 and SFAS No. 112 are not applicable.
During
1999 the Financial Accounting Standards Board issued SFAS No. 132 "Employers'
Disclosures about Pensions and Other Post Retirement Benefits." SFAS No. 132
is not
applicable for post employment benefits, but is applicable to the company's
pension
plan (See Note 14).
NOTE 11. CONCENTRATION OF CREDIT RISK
Substantially all of the Company's income is rental income received from two
tenants.
These tenants are subject to long-term lease agreements. (See Note 3)
NOTE 12. FINANCIAL REPORTING BY BUSINESS SEGMENTS
In 1999, the Company adopted Financial Accounting Standards Board Statement
(SFAS) No. 131 "Disclosures About Segments of an Enterprise and Related
Information". The information for 1998 has been restated to conform to the
2000 and
1999 presentation. The Company's reportable segments are strategic business
units
that involve different products and services. They are managed by a single
management team.
The Company has three business segments as follows:
Surgical Staples-Engaged in engineering and design of surgical staples for
use in
internal surgery, and in the technology used to fabricate the equipment issued
to apply
the staples. This segment of the Company's business is still in the research
and
development stage.
Electro-Optical-Engaged in engineering and development of equipment for the
semi-
conductor industry. The company has discontinued efforts relating to the
electro-optical
segment of its business.
F-15
HOLOBEAM, INC.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2000, 1999 AND 1998
NOTE 12. FINANCIAL REPORTING BY BUSINESS SEGMENTS (Continued)
Rental-Engaged in leasing to tenants, the two retail buildings owned by the
Company
at 50 A&S Drive, Paramus, New Jersey. Approximately 98% of the Company revenues
are earned by this segment, all of which is received from two tenants (see
Note 11).
The accounting policies of the segments are the same as those described in the
summary of significant accounting policies. The Company evaluates the
performance
of its operating segments based on income before income taxes. There are no
intercompany sales. The Company derives all revenue in the United States.
Summarized financial information concerning the Company's reportable segments is
shown in the following table. The "Other" column includes corporate income and
expense items not allocated to reportable segments.
Revenues
2000 1999 1998
Business Segments:
Surgical Staples $ - $ - $ -
Electro-Optical - - -
Real Estate Rental 2,020,217 1,925,717 1,925,534
Other 56,157 34,545 39,028
--------- --------- ---------
Total $ 2,076,374 $1,960,262 $1,964,562
========= ========= =========
Business Segments: Income (Loss)
2000 1999 1998
Surgical Staples $ (192,085) $ (194,364) $ (225,041)
Electro-Optical - - -
Real Estate Rental 1,757,337 1,667,922 1,667,028
--------- --------- ---------
Total $ 1,565,252 $1,473,558 $1,441,987
--------- --------- ---------
General and Administrative
Expenses (750,577) (637,167) (633,625)
Interest Expense (513,106) (539,943) (564,525)
Other Income 56,157 34,545 39,028
Income Tax Expense (157,670) (133,832) (115,974)
--------- --------- ---------
Total (1,365,196) (1,276,397) (1,275,096)
--------- --------- ---------
Net Income $ 200,056 $ 197,161 $ 166,891
========= ========= =========
Business Segments: Identifiable Assets
2000 1999 1998
Surgical Staples $ 59,804 $ 59,778 $ 60,738
Electro-Optical 6,745 10,472 15,286
Real Estate Rental 5,915,333 6,156,401 6,397,468
Other 1,039,347 936,592 781,590
--------- --------- ---------
TOTAL ASSETS $ 7,021,229 $7,163,243 $7,255,082
========= ========= =========
F-16
HOLOBEAM, INC.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2000, 1999 AND 1998
NOTE 12. FINANCIAL REPORTING BY BUSINESS SEGMENTS (Continued)
Business Segments: Capital Expenditures
2000 1999 1998
Surgical Staples $ - $ - $ -
Electro-Opitical - - -
Real Estate Rental - - -
Other - - 7,976
--------- -------- ---------
$ - $ - $ 7,976
========= ========= =========
Property and Equipment
Business Segments Depreciation
2000 1999 1998
Surgical Staples $ - $ - $ -
Electro-Optical - - -
Real Estate Rental 199,959 199,959 199,959
Other 11,156 11,906 14,468
--------- --------- ---------
$211,115 $211,865 $214,427
========= ========= =========
Intangible Assets
Amortization
2000 1999 1998
Surgical Staples $ 9,937 $ 9,034 $ 8,356
Electro-Optical 3,726 4,815 4,977
Real Estate Rental 41,109 41,109 41,109
Other - - -
--------- --------- ---------
$ 54,772 $ 54,958 $ 54,442
========= ========= =========
NOTE 13. FAIR VALUES OF FINANCIAL INSTRUMENTS
The Company has a number of financial instruments, none of which are held for
trading
purposes. The Company estimates that the fair value of all financial
instruments at
September 30, 2000, does not differ materially from the aggregate carrying
values of
its financial instruments recorded in the accompanying balance sheet. The
estimated
fair value amounts have been determined by the Company using available market
information and appropriate valuation methodologies. Considerable judgement is
necessarily required in interpreting market data to develop the estimates of
fair value,
and accordingly, the estimates are not necessarily indicative of the amounts
that the
Company could realize in a current market exchange.
F-17
HOLOBEAM, INC.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2000, 1999 AND 1998
NOTE 14. PENSION PLAN
The Company established a defined benefit plan in 1998 covering all eligible
employees, who have completed one year of service. Benefits are based on
years of
service and the average compensation during the best three years of
participation.
The Company's funding policy is to make annual contributions to the plan in
amounts
such that all employees' benefits will be fully provided for by the time they
retire.
Contributions are intended to provide not only for benefits attributed to
service to date
but also for those expected to be earned in the future.
Although it has not expressed any intention to do so, the Company has the
right under
the plan to discontinue its contributions at any time and to terminate the
Plan subject
to the provisions set forth in ERISA.
In 1999, the Company adopted SFAS No. 132 "Employers' Disclosures about Pensions
and Other Post Retirement Benefits". The provisions of SFAS No. 132 revise
employers' disclosures about pension and other post retirement benefit plans.
It does
not change the measurement or recognition of this plan. It standardizes the
disclosure
requirements for pensions and other post retirement benefits to the extent
practicable.
The Company provides defined benefit pension plan to the employees. The
following
provides a reconciliation of benefit obligations, plan assets, and funded
status of the
plan.
2000 1999
Changes in benefit obligation:
Benefit obligation at October 1 $ 719,594 $ 307,773
Service cost 328,003 309,163
Interest cost 78,851 21,544
--------- -------
Benefit obligation at September 30 $1,126,448 $638,480
========= =======
2000 1999
Change in plan assets:
Fair value of plan assets at October 1 $ 640,223 $ 313,645
Company contributions 330,122 307,754
Actual return on plan assets 43,840 18,824
--------- -------
Fair value of plan assets at September 30, $1,014,185 $640,223
Funded status of Plan $ (112,263) $ 1,743
Unrecognized Net Gain (Loss) 80,346 (5,377)
--------- -------
(Accrued) or Prepaid Pension $ (31,917) $ (3,634)
========= =======
F-18
HOLOBEAM, INC.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2000, 1999 AND 1998
NOTE 14. PENSION PLAN (Continued)
The net periodic pension cost for the year ended September 30, includes the
following components:
2000 1999
1. Service cost - benefits earned
during the period $ 328,003 $ 309,163
--------- -------
2. Interest cost on projected benefit
obligation 78,851 32,708
--------- -------
3. Actual return on plan assets (43,840) (18,824)
--------- -------
4. Net amortization and deferral:
a. Amortization of unrecognized net
obligation (asset) at transition - -
b. Amortization of unrecognized
prior service cost - -
c. Amortization of unrecognized net
(gain) or loss (975) (11,659)
d. Asset gain or (loss) deferred - -
--------- -------
e. Total (975) (11,659)
--------- -------
5. Net periodic pension cost (credit) =
(Item 1 + item 2 + item 3 + item 4 (e) $ 362,039 $ 311,388
========= =======
The net periodic pension cost for 2000 and 1999 was determined based on a 7%
discount rate and a long - term rate of return of 7% on plan assets.
NOTE 15. MARKETABLE SECURITIES
At September 30, 2000, 1999 and 1998, all short-term marketable debt securities
were
classified as held-to-maturity and carried at amortized cost. Investments
consisted of the following:
2000 1999 1998
Certificate of deposit $ - $ - $ 421,282
U.S. Government Securities 738,517 - -
------- ----------- -------
$738,517 $ - $ 421,282
======= =========== =======
At September 30, 2000,1999 and 1998, the fair value of investments approximated
its
amortized cost and therefore there were no significant unrealized gains or
losses.
All investments at September 30, 2000, 1999 and 1998 mature in one year or less.
F-19
HOLOBEAM, INC.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2000, 1999 AND 1998
NOTE 16. SUPPLEMENTAL QUARTERLY FINANCIAL DATA (UNAUDITED)
For the Fiscal Year Ended September 30, 2000
First Second Third Fourth
Quarter Quarter Quarter Quarter
Total Revenues $506,719 $505,211 $508,584 $555,860
Gross Profit N/A N/A N/A N/A
Income Before Extraordinary
Items 71,902 46,684 108,179 (26,709)
Weighted Average
Number of Shares 296,105 294,487 293,081 292,374
Earnings Per Share .24 .16 .37 (.09)
Net Income 71,902 46,684 108,179 (26,709)
For the Fiscal Year Ended September 30, 1999
First Second Third Fourth
Quarter Quarter Quarter Quarter
Total Revenues $496,849 $479,667 $480,438 $503,308
Gross Profit N/A N/A N/A N/A
Income Before Extraordinary
Items 62,464 44,171 49,087 41,439
Weighted Average
Number of Shares 298,518 297,618 297,512 297,406
Earnings Per Share .21 .15 .16 .14
Net Income 62,464 44,171 49,087 41,439
F-20
HOLOBEAM, INC. SCHEDULE VI
ACCUMULATED DEPRECIATION AND AMORTIZATION
PROPERTY AND EQUIPMENT
YEARS ENDED SEPTEMBER 30, 2000, 1999 AND 1998
Balance at Balance at
Beginning End of
CLASSIFICATIONS of Year Additions Retirements Year
YEAR ENDED SEPTEMBER 30, 1998:
Machinery and Equipment $ 28,077 $ 12,604 $ - $ 40,681
Furniture and Fixtures 256 1,864 - 2,120
------- ------ ------ -------
TOTAL $ 28,333 14,468 $ - $ 42,801
======= ====== ====== =======
YEAR ENDED SEPTEMBER 30, 1999:
Machinery and Equipment $ 40,681 $ 9,287 $ - $ 49,968
Furniture and Fixtures 2,120 2,620 - 4,740
------- ------ ------ -------
TOTAL $ 42,801 $11,907$ - $ 54,708
======= ====== ====== =======
YEAR ENDED SEPTEMBER 30, 2000:
Machinery and Equipment $ 49,968 $ 8,536 $ - $ 58,504
Furniture and Fixtures 4,740 2,620 - 7,360
------- ------ ------ -------
TOTAL $ 54,708 $ 11,156 $ - $ 65,864
======= ====== ====== =======
The accompanying notes are an integral part of the financial statements.
F-22
HOLOBEAM, INC. SCHEDULE X
SUPPLEMENTARY INCOME STATEMENT INFORMATION
YEARS ENDED SEPTEMBER 30, 2000, 1999 AND 1998
2000 1999 1998
Maintenance and Repairs $ - $ - $ -
======= ======== =======
Depreciation and Amortization of
Intangible Assets $54,772 $ 54,958 $ 54,442
======= ======== =======
Taxes, Other than Payroll and Income Tax
Franchise $ 10,572 $ 9,500 $ 3,600
Real Estate - - -
Other 35 518 -
------- -------- -------
$10,607 $ 10,018 $ 3,600
======= ======== =======
Royalties $ - $ - $ -
======= ======== =======
Advertising $ - $ - $ -
======= ======== =======
The accompanying notes are an integral part of the financial statements.
F-23
HOLOBEAM, INC. SCHEDULE V
PROPERTY AND EQUIPMENT
SEPTEMBER 30, 2000, 1999 AND 1998
Balance at Balance at
Beginning End of
CLASSIFICATIONS of Year Additions Retirements Year
YEAR ENDED SEPTEMBER 30, 1998:
Machinery and Equipment $ 66,939 $ - $ - $ 66,939
Furniture and Fixtures 12,657 7,976 - 20,633
------- ------ ------ -------
TOTAL $ 79,596 $ 7,976 $ - $ 87,572
======= ====== ====== =======
YEAR ENDED SEPTEMBER 30, 1999:
Machinery and Equipment $ 66,939 $ - $ - $ 66,939
Furniture and Fixtures 20,633 - - 20,633
------- ------ ------ -------
TOTAL $87,572 $ - $ - $ 87,572
======= ====== ====== =======
YEAR ENDED SEPTEMBER 30, 2000:
Machinery and Equipment $ 66,939 $ - $ - $ 66,939
Furniture and Fixtures 20,633 - - 20,633
------- ------ ------ -------
TOTAL $ 87,572 $ - $ - $ 87,572
======= ====== ====== =======
The accompanying notes are an integral part of the financial statements.
F-21
HOLOBEAM, INC. SCHEDULE XII
MORTGAGE LOANS ON REAL ESTATE
SEPTEMBER 30, 2000
Principal Amount
Periodic Face Amount Carrying Amount of Loans Subject to
Interest Final Maturity Payment Prior of of Delinquent Principal
Rate Date Terms Items Mortgage Mortgage(1) or Interest
Mortgage Payable
Building and Improvements 8.7% February 5, 2011 $13,367 None $1,500,000 $1,129,147 None
Mortgage Payable
Building and Improvements 8.77% February 5, 2011 $56,328 None $6,000,000 $4,523,899 None
$5,653,046
Activity for the three
years ended September 30,
2000 is as follows:
2000 1999 1998
Balance at Beginning of Year $5,971,876 $6,264,064 $6,531,848
Addition During Year
Commercial Loans 0 0 0
New Mortgages 0 0 0
--------- --------- ---------
5,971,876 6,264,064 6,531,848
Deductions During Year:
Principal Payments 318,830 292,188 267,784
Mortgage Payments 0 0 0
--------- --------- ---------
Balance at End of Year $5,653,046 $5,971,876 $6,264,064
========= ========= =========
(1) The cost for Federal income tax
Purposes at 9/30/00 $5,653,046
The accompanying notes are an integral part of these financial statements.
F-25
HOLOBEAM, INC. SCHEDULE XI
REAL ESTATE AND ACCUMULATED DEPRECIATION
SEPTEMBER 30, 2000
Cost Capitalized Gross Amount at Life in Which
Initial Subsequent Which Carried at Depreciation
Cost to Company To Acquisition Close of Period (1) (2) Date In Latest Income
Incum - Bldg & Carrying Bldg & Accumulated of Date Stmt is
brances Land Improv Improv Costs Land Improv Total Depreciation Constr. Acquired Computed
Improved Land
Paramus, NJ $ 0 $218,402 $ 0 $ 0 $ 0 $218,402 $ 0 $218,402 $ 0 1971 -
Improved Land
Paramus, NJ 0 173,565 0 60,805 0 234,370 0 234,370 0 1983 -
Building I
Paramus, NJ
Improvements 6,777,260 0 718,881 3,649,850 0 0 4,368,731 4,368,731 1,533,214 1958 1971 3 to 40 years
Building II
Paramus, NJ 0 0 2,592,513 0 0 0 2,592,513 2,592,513 393,309 1995 1995 30 Years
--------- ------- --------- --------- ---- ------- --------- --------- ---------
$6,777,260 $391,967 $3,311,394 $3,710,655 $ 0 $452,772 $6,961,244 $7,414,016 $1,926,523
========= ======= ========= ========= ==== ======= ========= ========= =========
(1)Activity for the three years (2)Activity for the three years
ended September 30, 2000 is ended September 30, 2000 is
as follows: 2000 1999 1998 as follows: 2000 1999 1998
Balance at Beginning
of Year $7,414,016 $7,414,016 $7,414,016 Balance at Beginning of Year $1,726,564 $1,526,605 $1,326,646
Additions: Additions:
Improvements 0 0 0 Depreciation 199,959 199,959 199,959
Acquisitions 0 0 0 Less Retirements 0 0 0
---------- --------- --------- --------- --------- ---------
7,414,016 7,414,016 7,414,016
Deductions During
Year: Balance at End of Year $1,926,523 $1,726,564 $1,526,605
Retirements 0 0 0 ========= ========= =========
Cost of Real
Estate Sales 0 0 0
-------- --------- ---------
Balance at End
of Year $7,414,016 $7,414,016 $7,414,016
========== ========= =========
The aggregate cost for Federal income tax purposes
at September 30, 2000 is $7,414,016.
The accompanying notes are an integral part of these financial statements.
F-24