HOLOBEAM, INC.
217 First Street
P.O. Box 287
Ho-Ho-Kus, New Jersey 07423-0287
July 28, 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 June 30,
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: June 30, 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.
274,685 Common Shares at July 27, 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
June 30,2003 Sept.30,2002
Current Assets
Cash and Cash Equivalents $ 792,610 $ 836,042
Short Term Investments -0- -0-
Other Current Assets 77,262 54,597
----------- -----------
Total Current Assets 869,872 890,639
----------- -----------
Investments in Real Estate, Net 4,937,547 5,087,576
Machinery & Equipment, Net 68,777 76,113
Unbilled Accounts Receivable 1,134,272 1,181,345
Other Non-Current Assets 363,584 402,149
----------- ----------
Total Assets $ 7,374,052 $ 7,637,822
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts Payable $ 2,996 $ 7,669
Accrued Expenses 261,343 279,346
Income Taxes Payable 131,475 -0-
Current Portion of Mortgage Payable 442,229 414,221
---------- ----------
Total Current Liabilities 838,043 701,236
---------- ----------
Mortgage Payable, Net of Current
Portion 4,176,064 4,511,321
Deferred Income Taxes 472,538 472,538
---------- ----------
Total Liabilities 5,486,645 5,685,095
---------- ----------
Shareholders' Equity
Common Stock 28,769 28,769
Paid-In-Capital 9,540,472 9,540,472
Accumulated Deficit ( 7,359,778) ( 7,541,784)
Treasury Stock, At Cost ( 322,056) ( 74,730)
---------- ----------
Shareholders' Equity 1,887,407 1,952,727
---------- ----------
Total Liabilities and
Shareholders Equity $7,374,052 $7,637,822
========== ==========
1
HOLOBEAM, INC.
Condensed Statement of Income
Three Months Ended Nine Months Ended
June 30, June 30,
2003 2002 2003 2002
Revenue
Rental Income $504,475 $496,105 $1,513,427 $1,488,313
Interest Income 1,283 2,990 16,011 10,781
Other 2,083 -0- 15,713 -0-
-------- -------- --------- ----------
Total Revenue 507,841 499,095 1,545,151 1,499,094
-------- -------- --------- ---------
Costs and Expenses
Rental Expenses 55,778 55,200 171,361 165,750
General and Admin. Expenses 188,063 209,438 612,940 619,599
Research and Development 43,433 50,292 130,938 165,511
Interest 103,163 112,670 316,262 344,173
Other 26 18 170 121
-------- -------- --------- ----------
Total Costs and Expenses 390,463 427,618 1,231,671 1,295,154
-------- -------- --------- ----------
Income Before Income Taxes 117,378 71,477 313,480 203,940
Income Tax Expense 53,152 28,585 131,475 81,500
------- -------- --------- ----------
Net Income $ 64,226 $ 42,892 $ 182,005 $ 122,440
======== ======== ========= ==========
Weighted Average Number of
Shares Outstanding 271,242 286,738 275,001 288,379
Net Income Per Share $0.24 $0.15 $0.66 $0.43
===== ===== ===== =====
2
HOLOBEAM, INC.
Condensed Statements of Cash Flows
Increase (Decrease) in Cash and Cash Equivalents
9 Months 9 Months 12 Months
Ended Ended Ended
6/30/03 6/30/02 9/30/02
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income, (Loss) $182,005 $122,440 $166,399
-------- -------- --------
Adjustments to Reconcile Net
Income to Net Cash Provided
by Operating Activities:
Depreciation 158,963 158,963 216,888
Amortization 42,029 40,680 55,535
Decrease, (Increase) In:
Patent and Patent
Application Costs (3,463) (6,407) (10,002)
Accounts Receivable -0- -0- (56)
Unbilled Rents Receivable 47,073 -0- (25,465)
Prepaid Income Taxes -0- -0- (3,782)
Increase, (Decrease) In:
Accounts Payable and
Accrued Expenses 108,799 67,318 28,126
Other (22,667) 26,192 27,732
------- --------- ---------
Total Adjustments 330,734 286,746 288,976
--------- --------- ---------
Net Cash Provided (Used) by
Operating Activities 512,739 409,186 455,375
--------- --------- ---------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Capital Expenditures (1,596) (49,083) (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- 4,000 4,000
---------- ----------- ---------
Net Cash Flows from Investing
Activities (1,596) (45,083) (45,082)
------ ------- -------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Principal Payments on First
Mortgage (307,249) (281,580) (379,609)
Purchase of Treasury Stock (247,326) (83,854) (119,105)
Other -0- -0- -0-
--------- --------- --------
Net Cash Flows Provided (Used)
by Financing Activities (554,575) (365,434) (498,714)
------- -------- --------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (43,432) (1,331) (88,421)
------- ------ -------
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 836,042 (924,463) 924,463
--------- --------- ---------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 792,610 $ 923,132 $ 836,042
========= ========= =========
HOLOBEAM, INC.
Notes to Condensed Financial Statements
Form 10Q
June 30, 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 June 30, 2003
and 2002 and the results of operations for the three
months and nine months then ended and the statement
of cash flows for the nine months ended June 30,
2003 and 2002.
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 nine months ended June 30, 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
June 30, 2003
(1) Material Changes in Financial Condition
During the three months and nine months
ended June 30, 2003, the Registrant's working
capital increased $7,095.00 and decreased
$157,574.00 respectively. The negative change in
working capital results primarily from purchases
of treasury stock amounting to $247,326.10 for
the period ended June 30, 2003. The Registrant
does not anticipate any additional material
treasury stock purchases for the balance of the
fiscal year begun October 1, 2002.
Cash flows provided by the Registrant's real
estate rental activities for the three months and
nine months ended June 30, 2003 were $98,724.00
and $512,739.00 respectively, which represents an
increase of $103,553.00 when compared to the cash
flows provided by operating activities for the
nine months ended June 30, 2002.
As previously reported, the Registrant's
research efforts with surgical staples and their
application have been discontinued effective
March 31, 2003. Funding for the project by the
Registrant was also terminated effective March
31, 2003 as the final test results indicated
insufficient advantages of the staples.
5
HOLOBEAM, INC.
Form 10Q
Management's Discussion and Analysis of Financial
Condition
and Results of Operations
June 30, 2003
The Registrant does not anticipate
additional funding requirements other than
those required to terminate the project and to
wind down activities associated with the
project. The Registrant projects the future
expenditures in connection with the project
termination to approximate $65,000.00.
(Reference is made to the Registrant's form 10Q
for the Quarter ended March 31, 2003,
Managements Discussion and Analysis of
Financial Condition and Results of Operations.)
In the opinion of the Registrant, the cash
flows provided by its operations, principally
real estate rental activities, is sufficient to
provide the funding for the Registrant's
requirements with no materially adverse effect
upon the Registrant's financial condition.
(2) Material Changes in the Results of
Operations
During the three months and nine months
ended June 30, 2003, the Registrant's after-tax
income was $64,226.00 and $182,005.00
respectively. Such results represent
improvement to the results recorded for the
same periods one year ago in the amounts of
$21,334.00 and $59,565.00 respectively.
The increased income can be ascribed to
increases in the Registrant's rental income
associated with the Registrant's
6
HOLOBEAM, INC.
Form 10Q
Management's Discussion and Analysis of Financial
Condition
and Results of Operations
June 30, 2003
operating leases, decreases in expenses
associated with the Registrant's surgical
staples project, decreases in interest expense
and decreases associated with the general and
administrative expenses.
During the quarter ended June 30, 2003,
the Registrant had costs approximating
$25,000.00 associated with the termination of
the surgical staples project. Future
expenditures in connection with the project are
expected to be less than $65,000.00 as the
project winds down.
In the quarter ending June 30, 2003, the
Registrant contributed $70,610.00 to the
defined benefit pension plan. The
contributions are made quarterly and charged to
administrative expense on the condensed
statement of income.
The Registrant intends to continue funding
of the plan and such funding is not expected to
have a materially adverse effect upon the
Registrant's financial condition and results of
operation.
7
PART II
HOLOBEAM, INC.
Signatures
Form 10Q
June 30, 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 July 27, 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 Regis-
trant 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: July 28, 2003
By: William M. Hackett
William M. Hackett
Director and Treasurer
Date: July 27, 2003
By: Beverly Cook
Beverly Cook
Director and Secretary
Date: July 28, 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 June 30,
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: July 27, 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: July 28, 2004
Melvin S. Cook,
President
Melvin S. Cook
President
12
Exhibit A
HOLOBEAM, INC.
Statement of Computation of Per Common Share
Earnings
Form 10Q
June 30, 2003
Nine Months Ended
June 30
2003 2002
PRIMARY
Net Income (Loss) $182,005 $122,440
SHARES
Weighted Average Number of Common
Shares of Outstanding 275,001 288,379
Primary Earnings Per Share $0.66 $0.43
13