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: December 31, 2003
COMMISSION FILE NUMBER: 0-3385
HOLOBEAM, INC.
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(Exact name of Registrant as specified in its charter)
Delaware 22-1840647
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) I.D. Number
217 First Street, Ho-Ho-Kus, New Jersey 07423-0287
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(Address of principal executive offices) (Zip Code)
201-445-2420
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(Registrant's telephone no., including area code)
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(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.
271,529 Common Shares at February 6, 2004
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, 6, 7
PART II
Signatures 8
Certifications 9, 10, 11
Computation of Earnings Per Common Share Exhibit A
Section 906 Certifications Exhibit B
PART I
HOLOBEAM, INC.
Condensed Balance Sheets
ASSETS
Dec. 31, 2003 Sept. 30, 2003
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Current Assets
Cash and Cash Equivalents $ 979,358 $ 913,436
Short Term Investments -0- -0-
Other Current Assets 6,006 14,097
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Total Current Assets 985,364 927,533
----------- -----------
Investments in Real Estate, Net 4,837,607 4,887,616
Machinery & Equipment, Net 56,180 60,421
Unbilled Accounts Receivable 1,102,890 1,118,581
Other Non-Current Assets 294,263 304,513
----------- -----------
Total Assets $ 7,276,304 $ 7,298,664
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts Payable $ 176,373 $ 66,751
Accrued Expenses 289,179 260,972
Income Taxes Payable 50,345 109,259
Current Portion of Mortgage Payable 461,941 451,982
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Total Current Liabilities 977,838 888,964
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Mortgage Payable, Net of Current
Portion 3,940,062 4,059,346
Deferred Income Taxes 447,432 447,432
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Total Liabilities 5,365,332 5,395,742
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Shareholders' Equity
Common Stock 27,502 27,502
Paid-In-Capital 9,226,979 9,226,979
Accumulated Deficit ( 7,261,707) ( 7,337,414)
Treasury Stock, At Cost ( 81,802) ( 14,145)
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Shareholders' Equity 1,910,972 1,902,922
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Total Liabilities and
Shareholders Equity $7,276,304 $7,298,664
========== ==========
1
HOLOBEAM, INC.
Condensed Statement of Income
3 Months Ended
December 31
2003 2002
Revenue
Rental Income $504,475 $504,475
Interest Income 1,480 1,368
Other -0- -0-
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Total Revenue 505,955 505,843
Costs and Expenses
Rental Expenses 55,603 57,790
General and Administrative Expenses 225,613 208,754
Research and Development -0- 44,523
Interest 98,461 109,124
Other 226 2,366
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Total Costs and Expenses 379,903 422,557
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Income Before Income Taxes 126,052 83,286
Income Tax Expense 50,345 33,265
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Net Income $ 75,707 $ 50,021
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Weighted Average Number of Common
Shares Outstanding 273,420 278,277
Net Income Per Share $0.28 $0.18
===== =====
2
HOLOBEAM, INC.
Condensed Statements of Cash Flows
Increase (Decrease) in Cash and Cash Equivalents
3 Months 3 Months 12 Months
Ended Ended Ended
12/31/03 12/31/02 9/30/03
CASH FLOWS FROM OPERATING
ACTIVITIES
Net Income, (Loss) $ 75,707 $ 50,021 $ 204,370
---------- ---------- ---------
Adjustments to Reconcile Net
Income to Net Cash Provided
By Operating Activities:
Depreciation 54,250 52,988 219,866
Amortization 10,250 14,909 41,108
Loss on Abandonment of
Patents -0- -0- 60,052
Decrease, (Increase) In:
Patent and Patent
Application Costs -0- (30) (3,524)
Accounts Receivable -0- -0- -0-
Unbilled Rents Receivable 15,691 15,691 62,764
Prepaid Income Taxes 6,341 33,265 41,094
Increase, (Decrease) In
Accounts Payable and
Accrued Expenses 78,915 61,671 124,861
Other 1,750 5,008 (14,224)
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Total Adjustments 167,197 183,502 531,997
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Net Cash Provided (Used) by
Operating Activities 242,904 233,523 736,367
---------- ---------- ----------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Capital Expenditures -0- (1,596) (4,214)
Purchase of Short Term
Investments -0- (290,779) (290,779)
Sale of Short Term
Investments -0- -0- 304,409
--------- ---------- ----------
Net Cash Flow from Investing
Activities -0- (292,375) 9,416
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CASH FLOW FROM FINANCING
ACTIVITIES:
Principal Payments on First
Mortgage (109,325) (100,190) (414,214)
Purchase of Treasury Stock (67,657) (240,031) (254,175)
Other -0- -0- -0-
---------- -------- ----------
Net Cash Flow Provided (Used)
by Financing Activities (176,982) (340,221) (668,389)
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 65,922 (399,073) 77,394
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 913,436 836,042 836,042
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CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 979,358 $ 436,969 $ 913,436
========== ========== ==========
3
HOLOBEAM, INC.
Notes to Condensed Financial Statements
Form 10Q
December 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
December 31, 2003 and 2002 and the results of operations for
the three months then ended and the statement of cash flows
for the three months then ended.
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 ended
December 31, 2003 are not necessarily indicative of the
results to be expected for a full year.
4
HOLOBEAM, INC.
Form 10Q
Management's Discussion and Analysis of Financial Condition
and Results of Operations
December 31, 2003
(1) Material Changes in Financial Condition
During the quarter ended December 31, 2003, cash
flows from operating activities were $242,904.00, up
$9,381.00 when compared to the three months ended
December 31, 2002.
Working capital at December 31, 2003 was $7,526.00,
down $31,043.00 from that reported at September 30, 2003
and up $36,757.00 when compared to working capital at
December 31, 2002.
During the three months ended December 31, 2003, the
Registrant purchased treasury stock in the amount of
$67,657.00 which negatively affected the Registrant's
working capital.
The Registrant ceased research and development in
connection with the surgical staples technology during
2003 and there were no funds expended in association with
the project during the quarter ended December 31, 2003
and the Registrant does not anticipate any future
expenditures in connection with this project. (Reference
is made to the Registrant's Annual Report, Form 10K, Item
7 for the year ended September 30, 2003.)
It is the intention of the Registrant to seek
opportunities for real estate development and rental in
5
HOLOBEAM, INC.
Form 10Q
Management's Discussion and Analysis of Financial Condition
and Results of Operations
December 31, 2003
the geographical area neighboring the Registrant's existing
properties in Bergen County, New Jersey. At this time no
specific opportunities have been identified but the Registrant
intends to continue to search for suitable properties. If the
Registrant determines that an applicable opportunity exists,
the Registrant intends to fund the project with the equity
values of the Registrant's existing properties. Funding of
any such project is not expected to have a materially adverse
effect upon the Registrant's financial condition.
(2) Material Changes in the Results of Operations
The Registrant's after-tax income for the three
months ended December 31, 2003 was $75,707.00 which
represents an increase of $25,686.00 when compared to the
after-tax profit reported for the three months ended
December 31, 2002. The increase in income resulted
principally from the effects of abandonment of the
research and development efforts connected to the
surgical staple project. As previously reported, the
Registrant discontinued funding of the project during
2003 and as a result, no expenditures were made during
the most recent quarter.
During the quarter ended December 31, 2003, the
6
HOLOBEAM, INC.
Form 10Q
Management's Discussion and Analysis of Financial Condition
and Results of Operations
December 31, 2003
Registrant contributed $70,610.00 to the defined benefit
pension plan. The contributions are charged to operations and
included in administrative expenses in the condensed statement
of income.
The Registrant does not expect that continued
funding of the defined benefit pension plan will have any
materially adverse effect upon the financial condition of
the Registrant.
7
PART II
HOLOBEAM, INC.
Signatures
Form 10Q
December 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.
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By William M. Hackett
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Date February 12, 2004
--------------------------
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
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Melvin S. Cook
President and Chairman of the Board
Date: February 12, 2004
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By: William M. Hackett
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William M. Hackett
Director and Treasurer
Date: February 12, 2004
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By: Beverly Cook
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Beverly Cook
Director and Secretary
Date: February 12, 2004
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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, 2003 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, 2003, including corrective actions
with regard to significant deficiencies and material
weaknesses. As of December 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,
9
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 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: February 12, 2004
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William M. Hackett, Treasurer
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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.;
10
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 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: February 12, 2004
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Melvin S. Cook, President
-------------------------
Melvin S. Cook
President
11
Exhibit A
HOLOBEAM, INC.
Statement of Computation of Per Common Share Earnings
Form 10Q
DECEMBER 31, 2003
Three Months Ended
December 31,
2003 2002
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PRIMARY
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Net Income $ 75,707 $ 50,021
SHARES
- ------
Weighted Average Number of Common
Shares of Outstanding 273,420 278,277
Earnings Per Share $0.28 $0.18