2 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, 2004
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.
271,229 Common Shares at August 2, 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 - 7
PART II
Signatures 8
Certifications 9 - 11
Computation of Earnings Per Common Share Exhibit A
Section 906 Certifications Exhibit B
PART I
HOLOBEAM, INC.
Condensed Balance Sheets
ASSETS
June 30,2004 Sept. 30, 2003
Current Assets
Cash and Cash Equivalents $ 929,755 $ 913,436
Short Term Investments -0- -0-
Other Current Assets 1,823 14,097
----------- -----------
Total Current Assets 931,578 927,533
----------- -----------
Investments in Real Estate, Net 4,737,588 4,887,616
Machinery & Equipment, Net 51,228 60,421
Unbilled Accounts Receivable 1,071,508 1,118,581
Other Non-Current Assets 273,823 304,513
----------- -----------
Total Assets $ 7,065,725 $ 7,298,664
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts Payable $ 176,373 $ 66,751
Accrued Expenses 286,410 260,972
Income Taxes Payable 4,654 109,259
Current Portion of Mortgage Payable 440,698 451,982
---------- ----------
Total Current Liabilities 908,135 888,964
---------- ----------
Mortgage Payable, Net of Current
Portion 3,735,372 4,059,346
Deferred Income Taxes 447,432 447,432
---------- ----------
Total Liabilities 5,090,939 5,395,742
---------- ----------
Shareholders' Equity
Common Stock 27,502 27,502
Paid-In-Capital 9,226,979 9,226,979
Accumulated Deficit ( 7,190,708) ( 7,337,414)
Treasury Stock, At Cost ( 88,987) ( 14,145)
---------- ----------
Shareholders' Equity 1,974,786 1,902,922
Total Liabilities and
Shareholders Equity $7,065,725 $7,298,664
========== ==========
1
HOLOBEAM, INC.
Condensed Statement of Income
Three Months Ended Nine Months Ended
June 30, June 30,
2004 2003 2004 2003
Revenue
Rental Income $504,475 $504,475 $1,513,427 $1,513,427
Interest Income 1,023 1,283 3,397 16,011
Other -0- 2,083 -0- 15,713
-------- -------- ---------- ----------
Total Revenue 505,498 507,841 1,516,824 1,545,151
Costs and Expenses
Rental Expenses 51,256 55,778 157,913 171,361
General and Admin. Expenses 297,832 188,063 825,315 612,940
Research and Development 470 43,433 914 130,938
Interest 93,552 103,163 288,047 316,262
Other 52 26 329 170
-------- -------- ---------- ----------
Total Costs and Expenses 443,162 390,463 1,272,518 1,231,671
-------- -------- ---------- ----------
Income Before Income Taxes 62,336 117,378 244,306 313,480
Income Tax Expense 24,990 53,152 97,600 131,475
------- ------- ---------- ----------
Net Income $ 37,346 $ 64,226 $ 146,706 $ 182,005
======== ======== ========= =========
Weighted Average Number of
Shares Outstanding 271,346 274,758 272,095 275,001
Net Income Per Share $0.14 $0.23 $0.54 $0.66
===== ===== ===== =====
2
HOLOBEAM, INC.
Condensed Statements of Cash Flows
Increase (Decrease) in Cash and Cash Equivalents
9 Months 9 Months 12 Months
Ended Ended Ended
6/30/04 6/30/03 9/30/03
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income, (Loss) $146,706 $182,005 $204,370
-------- -------- --------
Adjustments to Reconcile Net
Income to Net Cash Provided
by Operating Activities:
Depreciation 162,750 158,963 219,866
Amortization 30,750 42,029 41,108
Loss on Abandonment of Patents -0- -0- 60,052
Decrease, (Increase) In:
Patent and Patent
Application Costs (60) (3,463) (3,524)
Accounts Receivable 18 -0- -0-
Unbilled Rents Receivable 47,073 47,073 62,764
Prepaid Income Taxes 7,688 -0- 41,094
Increase, (Decrease) In:
Accounts Payable and
Accrued Expenses 30,455 108,799 124,861
Other 4,569 (22,667) (14,224)
-------- -------- --------
Total Adjustments 283,243 330,734 531,997
-------- -------- --------
Net Cash Provided (Used) by
Operating Activities 429,949 512,739 736,367
-------- -------- --------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Capital Expenditures (3,530) (1,596) (4,214)
Purchase of Short Term
Investments -0- (290,779) (290,779)
Sale of Short Term Investments -0- 290,779 304,409
-------- -------- --------
Net Cash Flows from Investing
Activities (3,530) (1,596) 9,416
-------- -------- --------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Principal Payments on First
Mortgage (335,258) (307,249) (414,214)
Purchase of Treasury Stock (74,842) (247,326) (254,175)
Other -0- -0- -0-
-------- -------- --------
Net Cash Flows Provided (Used)
by Financing Activities (410,100) (554,575) (668,389)
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 16,319 (43,432) 77,394
-------- -------- --------
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 913,436 836,042 836,042
-------- -------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $929,755 $792,610 $913,436
======== ======== ========
3
HOLOBEAM, INC.
Notes to Condensed Financial Statements
Form 10Q
June 30, 2004
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, 2004 and 2003 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, 2004 and
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 nine months
ended June 30, 2004 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, 2004
(1) Material Changes in Financial Condition
The Registrant's Working Capital for the nine months
ended June 30, 2004 was $23,443.00, up $28,663.00 when
compared to March 31, 2004 but down $9,906.00 from the 12
months ended September 30, 2003. The Registrant's Working
Capital is expected to demonstrate steady improvement for the
balance of the fiscal year begun October 1, 2003.
During the nine months ended June 30, 2004, cash flows
from operating activities were $429,949.00, down $82,790.00
when compared to June 30, 2003 and down $306,418.00 when
compared to the twelve month period ended September 30, 2003.
Treasury Stock purchases for the nine months and three
months ended June 30, 2004 were $74,842.00 and $6,075.00
respectively. Such purchases negatively affected the
Registrant's Working Capital for the respective periods.
The Registrant has continued to seek opportunities for
real estate development and/or real estate rental in the
Bergen County, New Jersey area in which the Registrant's
existing properties are located.
At the present time, no specific projects have been
identified by the Registrant as suitable for development or
5
HOLOBEAM, INC.
Form 10Q
Management's Discussion and Analysis of Financial Condition
and Results of Operations
June 30, 2004
construction. When the appropriate opportunities are identified
and selected, the Registrant intends to finance the projects with
the equity valuations contained in the currently owned properties.
The Registrant does not expect development of such projects to have
a materially adverse effect upon the Registrant's financial
condition.
(2) Material Changes in the Results of Operations
During the nine months and three months ended June 30,
2004, the Registrant recorded after-tax income of $146,706.00
and $37,346.00 respectively, down $35,299.00 and $26,880.00
when compared to the corresponding periods one year ago.
The decreases result primarily from increases in General
and Administrative expenses associated with the discontinuance
of research activities on the surgical staples project,
increased pension costs, and increases in costs incidental and
necessary to the Registrant's operations.
During the nine months and three months ended June 30,
2004, the Registrant contributed $342,876.00 and $136,133.00,
respectively to the defined benefit pension plan. The
contributions are charged to current operations and are
included in General and Administrative expenses on the
Condensed Statement of Income.
The Registrant intends to continue funding of the defined
6
HOLOBEAM, INC.
Form 10Q
Management's Discussion and Analysis of Financial Condition
and Results of Operations
June 30, 2004
benefit pension plan and does not expect such funding to have a
material adverse effect upon the operations or financial condition
of the Registrant.
7
PART II
HOLOBEAM, INC.
Signatures
Form 10Q
June 30, 2004
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, Treasurer
Date August 9, 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
Melvin S. Cook
President and Chairman of the Board
Date: August 9, 2004
By: William M. Hackett
William M. Hackett
Director and Treasurer
Date: August 9, 2004
By: Beverly Cook
Beverly Cook
Director and Secretary
Date: August 9, 2004
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 30, 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 June 30,
2004, 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
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: August 9, 2004
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
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: August 9, 2004
Melvin S. Cook, President
Melvin S. Cook
President
Exhibit A
HOLOBEAM, INC.
Statement of Computation of Per Common Share Earnings
Form 10Q
June 30, 2004
Nine Months Ended
June 30
2004 2003
PRIMARY
Net Income (Loss) $146,706 $182,005
SHARES
Weighted Average Number of Common
Shares of Outstanding 272,095 275,001
Primary Earnings Per Share $0.54 $0.66