HOLOBEAM, INC.
217 First Street
P.O. Box 287
Ho-Ho-Kus, New Jersey 07423-0287
May 12, 2003
U.S. Securities and Exchange Commission
6432 General Green Way
Alexandria, VA 22312
Attn: File Support
Re: Holobeam, Inc. File No. 0-3385
Gentlemen:
Enclosed you will find one (1) paper format copy of
Form 10Q for the Quarter ended March 31, 2003, which has been
previously filed via the Edgar system.
Kindly acknowledge receipt by signing the enclosed
copy of this letter and returning it to us in the accompanying
stamped, self-addressed envelope.
Very truly yours,
William M. Hackett
Treasurer
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Encs.
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR QUARTER ENDED: March 31, 2003
COMMISSION FILE NUMBER: 0-3385
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) I.D.
Number
217 First Street, Ho-Ho-Kus, New Jersey 07423
(Address of principal executive offices) (Zip Code)
201-445-2420
(Registrant's telephone no., including area code)
(Former name, former address and former fiscal year, if changed
since last report)
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Sections 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
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable
date.
274,615 Common Shares at May 5, 2003
HOLOBEAM, INC.
INDEX
PART I PAGE NO.
Financial Statements
Condensed Balance Sheets 1
Condensed Statements of Income 2
Condensed Statements of Cash Flows 3
Notes to Condensed Financial Statements 4
Management's Discussion and Analysis of
the Financial Condition and Results of
Operations 5 - 7
PART II
Signatures 8
Certifications 9 - 11
Computation of Earnings Per Common Share Exhibit A
PART I
HOLOBEAM, INC.
Condensed Balance Sheets
ASSETS
March 31,2003 Sept. 30, 2002
------------- --------------
Current Assets
Cash and Cash Equivalents $ 806,288 $ 836,042
Short Term Investments -0- -0-
Other Current Assets 65,872 54,597
----------- -----------
Total Current Assets 872,160 890,639
----------- -----------
Investments in Real
Estate, Net 4,987,556 5,087,576
Machinery & Equipment, Net 71,755 76,113
Unbilled Accounts Receivable 1,149,963 1,181,345
Other Non-Current Assets 376,912 402,149
----------- ----------
Total Assets $ 7,458,346 $ 7,637,822
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts Payable $ 63,371 $ 7,669
Accrued Expenses 290,689 279,346
Income Taxes Payable 78,323 -0-
Current Portion of
Mortgage Payable 432,682 414,221
---------- ----------
Total Current Liabilities 865,065 701,236
---------- ----------
Mortgage Payable, Net of Current
Portion 4,290,269 4,511,321
Deferred Income Taxes 472,538 472,538
---------- ----------
Total Liabilities 5,627,872 5,685,095
---------- ----------
Shareholders' Equity
Common Stock 28,769 28,769
Paid-In-Capital 9,540,472 9,540,472
Accumulated Deficit ( 7,424,005) ( 7,541,784)
Treasury Stock, At Cost ( 314,762) ( 74,730)
---------- ----------
Shareholders' Equity 1,830,474 1,952,727
---------- ----------
Total Liabilities and
Shareholders Equity $7,458,346 $7,637,822
========== ==========
1
HOLOBEAM, INC.
Condensed Statement of Income
Three Months Ended Six Months Ended
March 31, March 31,
------------------ ----------------
2003 2002 2003 2002
---- ---- ---- ----
Revenue
Rental Income $504,477 $496,104$1,008,952$ 992,208
Interest Income 13,360 2,177 14,728 7,791
Other 13,630 -0- 13,630 -0-
-------- ---------------------------
Total Revenue 531,467 498,281 1,037,310 999,999
-------- ---------------------------
Costs and Expenses
Rental Expenses 57,793 55,200 115,583 110,550
General and Admin.
Expenses 216,123 227,430 424,877 410,161
Research and Development 42,982 73,255 87,505 115,219
Interest 103,975 114,739 213,099 231,503
Other (2,222) 103 144 103
------ ---------------------------
Total Costs and Expenses 418,651 470,727 841,208 867,536
-------- ---------------------------
Income Before Income Taxes112,816 27,554 196,102 132,463
Income Tax Expense 45,058 11,015 78,323 52,915
------- ---------------------------
Net Income $ 67,758 $ 16,539 $ 117,779$ 79,548
======== ======== ==================
Weighted Average Number of
Shares Outstanding 274,985 288,075 276,649 289,208
Net Income Per Share $0.25 $0.06 $0.43 $0.28
2
HOLOBEAM, INC.
Condensed Statements of Cash Flows
Increase (Decrease) in Cash and Cash Equivalents
6 Months 6 Months 12 Months
Ended Ended Ended
3/31/03 3/31/02 9/30/02
------- ------- -------
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income, (Loss) $117,779 $ 79,548 $166,399
-------- -------- --------
Adjustments to Reconcile Net
Income to Net Cash Provided
by Operating Activities:
Depreciation 105,975 105,975 216,888
Amortization 28,469 27,120 55,535
Decrease, (Increase) In:
Patent and Patent
Application Costs (3,232) (3,439) (10,002)
Accounts Receivable -0- -0- (56)
Unbilled Rents Receivable 31,382 -0- (25,465)
Prepaid Income Taxes (11,275) -0- (3,782)
Increase, (Decrease) In:
Accounts Payable and
Accrued Expenses 145,367 56,522 28,126
Other -0- 30,096 27,732
----------- ------- -------
Total Adjustments 296,686 216,274 288,976
----------- ------- -------
Net Cash Provided (Used) by
Operating Activities 414,465 295,822 455,375
----------- ------- -------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Capital Expenditures (1,596) (55,083) (49,082)
Purchasing of Short Term
Investments (290,779) -0- -0-
Sale of Short Term Investments 290,779 -0- -0-
Sale of Capital Assets -0- -0- 4,000
----------- ------- ---------
Net Cash Flows from Investing
Activities (1,596) (55,083) (45,082)
------ ------- -------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Principal Payments on First
Mortgage (202,591)(185,665) (379,609)
Purchase of Treasury Stock (240,032) (44,374) (119,105)
Other -0- -0- -0-
----------- ------- -------
Net Cash Flows Provided (Used)
by Financing Activities (442,623)(230,039) (498,714)
-------- -------- --------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (29,754) 10,700 (88,421)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 836,042 924,463 924,463
----------- ------- -------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 806,288$ 935,163 $ 836,042
================== =========
3
HOLOBEAM, INC.
Notes to Condensed Financial Statements
Form 10Q
March 31, 2003
In the opinion of the Registrant, the accompanying
unaudited, condensed financial statements contain all
adjustments, consisting of routine, recurring accruals,
necessary to present fairly its financial position as of March
31, 2003 and 2002 and the results of operations for the three
months and six months then ended and the statement of cash flows
for the three months and six months ended March 31, 2003.
For purposes of reporting cash flows, all liquid
investments with maturities of three months or less are
considered temporary cash investments.
The results of operations for the three months and six
months ended March 31, 2003 are not necessarily indicative of
the results of operations to be expected for a full year.
4
HOLOBEAM, INC.
Form 10Q
Management's Discussion and Analysis of Financial Condition
and Results of Operations
March 31, 2003
(1) Material Changes in Financial Condition
During the three months ended March 31, 2003,
the Registrant's working capital increased
$36,326.00 while recording a decrease of
$189,403.00 for the six months then ended.
In addition, cash flows from the Registrant's
operating activities, primarily real estate rental
activities, for the six months ended March 31, 2003
were $414,465.00, representing an increase of
$118,643.00 when compared to the cash flows
provided by operating activities for the same
period in 2002.
As previously reported, the Registrant's
working capital was negatively affected by
purchases of Treasury Stock during the quarter
ended December 31, 2002. Total Treasury shares
purchased through March 31, 2003 were 9,412 shares
at a cost of $240,032.00. No substantial future
purchases of Treasury Stock are anticipated at this
time. (Reference is made to the Registrant's Form
10Q-A, Management's Discussion and Analysis of
Financial Condition and Results of Operations for
December 31, 2002.)
During the month of March 2003, the Registrant
received final conclusive results of the surgical
staples project. The
5
HOLOBEAM, INC.
Form 10Q
Management's Discussion and Analysis of Financial Condition
and Results of Operations
March 31, 2003
definitive testing revealed that the
advantages of the novel staples were not enough to
justify continuation of engineering and testing.
As a result of the final studies,
experiments, testing and engineering together with
the Registrant's funding were terminated.
The Registrant does not anticipate additional
funding requirements other than those necessary to
finalize activities connected with the project.
(2) Material Changes in the Results of Operations
The Registrant's after-tax income for the
three months and six months ended March 31, 2003
was $67,758.00 and $117,779.00, respectively. The
results of operations for the three months and six
months then ended represents increases of
$51,219.00 and $38,231.00 when compared to the
after-tax income for the same periods one year
ago.
The improvements are attributed to increases
in rental income associated with the Registrant's
operating leases, increased interest income
resulting from interest earned on short-term
investments, and a gain approximating $13,000.00
on sales of short-term investments.
During the quarter ended March 31, 2003, the
Registrant
6
HOLOBEAM, INC.
Form 10Q
Management's Discussion and Analysis of Financial Condition
and Results of Operations
March 31, 2003
funded the surgical staples project in the amount
of $42,982.00, which represents the anticipated
final costs associated with the project. Results
of final tests indicated that the benefits of the
staple and its application method did not justify
additional funding of experiments. As a result,
the Registrant terminated the project in March
2003. Future expenditures associated with the
project will be limited to those in connection
with windup of the project.
In addition, the Registrant contributed
approximately $96,700.00 to the defined benefit
pension plan during the quarter ended March 31,
2003. The contributions are charged to
administrative expenses on the Condensed Statement
of Income.
Continued funding of the contributions to the
defined benefits plan are not expected to have a
materially adverse effect upon the Registrant's
financial condition.
7
PART II
HOLOBEAM, INC.
Signatures
Form 10Q
March 31, 2003
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 May 12, 2003
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: May 12, 2003
By: William M. Hackett
William M. Hackett
Director and Treasurer
Date: May 12, 2003
By: Beverly Cook
Beverly Cook
Director and Secretary
Date: May 12, 2003
8
CERTIFICATIONS
(a) The Registrant maintains disclosure controls
and procedures that provide reasonable assurance that the
Registrant is able to record, process and summarize and report
the information required to comply with the Registrant's
Exchange Act disclosure obligations and for the Registrant's
own internal purposes. The Registrant has evaluated these
controls and procedures at September 31, 2002 and has
determined the controls and procedures to be effective in
recording, processing, summarizing and reporting the
information required by the Registrant's quarterly and annual
Exchange Act reports.
(b) There have been no significant changes in the
Registrant's procedures or internal controls or in other
factors that could significantly affect these controls
subsequent to September 30, 2002, including corrective actions
with regard to significant deficiencies and material
weaknesses. As of March 31, 2003, the examination of controls
and procedures did not disclose any significant deficiencies or
material weaknesses.
I, William M. Hackett, Treasurer, certify that:
1. I have reviewed this quarterly report on Form
10-Q of Holobeam, Inc.;
2. Based on my knowledge, this quarterly report
does not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial
statements, and other financial information included in this
quarterly report, fairly present in all material respects the
financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this
quarterly report;
4. The Registrant's other certifying officers and
I are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-
14 and 15d-14) for the Registrant and have:
(a) designed such disclosure controls and
procedures to ensure that material information relating to the
Registrant, including its consolidated subsidiaries, is made
known to us by others within those entities, particularly
during the period in
9
which this quarterly report is being prepared;
(b) evaluated the effectiveness of the
Registrant's disclosure controls and procedures as of a date
within 90 days prior to the filing date of this quarterly
report (the "Evaluation Date"); and
(c) presented in this quarterly report our
conclusions about the effectiveness of the disclosure controls
and procedures based on our evaluation as of the Evaluation
Date;
5. The Registrant's other certifying officers and
I have disclosed, based on our most recent evaluation, to the
Registrant's auditors and the audit committee of Registrant's
board of directors (or persons performing the equivalent
function):
a) all significant deficiencies in the design or
operation of internal controls which could adversely affect the
Registrant's ability to record, process, summarize and report
financial data and have identified for the Registrant's
auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that
involves management or other employees who have a significant
role in the Registrant's internal controls; and
6. The Registrant's other certifying officers and
I have indicated in this quarterly report whether there were
significant changes in internal controls or in other factors
that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any
corrective actions with regard to significant deficiencies and
material weaknesses.
Date: May 12, 2003
William M. Hackett,
Treasurer
William M. Hackett
Treasurer
I, Melvin S. Cook, President, certify that:
1. I have reviewed this quarterly report on Form
10-Q of Holobeam, Inc.;
2. Based on my knowledge, this quarterly report
does not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements
made, in light
10
of the circumstances under which such statements were made, not
misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial
statements, and other financial information included in this
quarterly report, fairly present in all material respects the
financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this
quarterly report;
4. The Registrant's other certifying officers and
I are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-
14 and 15d-14) for the Registrant and have:
(a) designed such disclosure controls and
procedures to ensure that material information relating to the
Registrant, including its consolidated subsidiaries, is made
known to us by others within those entities, particularly
during the period in which this quarterly report is being
prepared;
(b) evaluated the effectiveness of the
Registrant's disclosure controls and procedures as of a date
within 90 days prior to the filing date of this quarterly
report (the "Evaluation Date"); and
(c) presented in this quarterly report our
conclusions about the effectiveness of the disclosure controls
and procedures based on our evaluation as of the Evaluation
Date;
5. The Registrant's other certifying officers and
I have disclosed, based on our most recent evaluation, to the
Registrant's auditors and the audit committee of Registrant's
board of directors (or persons performing the equivalent
function):
a) all significant deficiencies in the design or
operation of internal controls which could adversely affect the
Registrant's ability to record, process, summarize and report
financial data and have identified for the Registrant's
auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that
involves management or other employees who have a significant
role in the Registrant's internal controls; and
6. The Registrant's other certifying officers and
I have indicated in this quarterly report whether there were
significant changes in internal controls or in other factors
that could
11
significantly affect internal controls subsequent to the date
of our most recent evaluation, including any corrective actions
with regard to significant deficiencies and material
weaknesses.
Date: May 12, 2003
Melvin S. Cook,
President
Melvin S. Cook
President
12
Exhibit A
HOLOBEAM, INC.
Statement of Computation of Per Common Share Earnings
Form 10Q
March 31, 2003
Three Months Six Months
Ended March 31, Ended March 31,
------------------ ------------
2003 2002 2003 2002
------ ------ ------ ------
PRIMARY
Net Income $ 67,758 $ 16,539 $117,779$ 79,548
SHARES
Weighted Average
Number of Common
Shares Outstanding 274,985 288,075 276,649 289,208
Earnings Per Share $0.25 $0.06 $0.43 $0.28