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, 2005
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.
269,784 Common Shares at April 29, 2005
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
March 31,2005 Sept. 30, 2004
------------- --------------
Current Assets
Cash and Cash Equivalents $ 861,159 $ 917,971
Short Term Investments -0- -0-
Other Current Assets 42,724 15,413
----------- ----------
Total Current Assets 903,883 933,384
Investments in Real Estate, Net 4,587,638 4,687,657
Machinery & Equipment, Net 33,333 43,543
Unbilled Accounts Receivable 970,098 1,055,818
Other Non-Current Assets 242,904 263,404
----------- ----------
Total Assets $ 6,737,856 $6,983,806
=========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts Payable $ 185,429 $ 192,364
Accrued Expenses 230,521 227,791
Income Taxes Payable -0- 69,460
Current Portion of Mortgage Payable 515,166 493,177
---------- ----------
Total Current Liabilities 931,116 982,792
Mortgage Payable, Net of Current
Portion 3,302,976 3,566,176
Deferred Income Taxes 422,327 422,327
---------- ----------
Total Liabilities 4,656,419 4,971,295
---------- ----------
Shareholders' Equity
Common Stock 27,121 27,121
Paid-In-Capital 9,137,868 9,137,868
Accumulated Deficit ( 7,042,740) ( 7,152,478)
Treasury Stock, At Cost ( 40,812) -0-
Shareholders' Equity 2,081,437 2,012,511
---------- ----------
Total Liabilities and
Shareholders Equity $6,737,856 $6,983,806
========== ==========
1
HOLOBEAM, INC.
Condensed Statement of Income
Three Months Ended Six Months Ended
March 31, March 31,
------------------ ----------------
2005 2004 2005 2004
---- ---- ---- ----
Revenue
Rental Income $504,477 $504,477 $1,008,952$1,008,952
Interest Income 2,205 894 3,650 2,374
Other -0- -0- -0- -0-
-------- -------- --------- ---------
Total Revenue 506,682 505,371 1,012,602 1,011,326
-------- -------- --------- ---------
Costs and Expenses
Rental Expenses 49,200 51,054 105,764 106,657
General and Admin. Expenses 252,202 301,870 548,632 527,483
Research and Development -0- 444 -0- 444
Interest 86,922 96,034 175,344 194,495
Other 93 51 144 277
-------- -------- -------------------
Total Costs and Expenses 388,417 449,453 829,884 829,356
-------- -------- -------------------
Income Before Income Taxes 118,265 55,918 182,718 181,970
Income Tax Expense 47,230 22,265 72,980 72,610
------- ------- -------------------
Net Income $ 71,035 $ 33,653 $ 109,738 $ 109,360
======== ======== ========= =========
Weighted Average Number of
Shares Outstanding 269,940 271,505 270,230 272,468
Net Income Per Share $0.26 $0.12 $0.41 $0.40
2
HOLOBEAM, INC.
Condensed Statements of Cash Flows
Increase (Decrease) in Cash and Cash Equivalents
6 Months 6 Months 12 Months
Ended Ended Ended
3/31/05 3/31/04 9/30/04
------- ------- -------
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income, (Loss) $ 109,738 $ 109,360 $ 184,936
--------- --------- ----------
Adjustments to Reconcile Net
Income to Net Cash Provided
by Operating Activities:
Depreciation 110,230 108,500 220,366
Amortization 20,500 20,500 41,109
Loss on Abandoment of Patents -0- -0- -0-
Decrease, (Increase) In:
Patent and Patent
Application Costs -0- -0- -0-
Accounts Receivable -0- -0- -0-
Unbilled Rents Receivable 85,720 15,691 62,763
Prepaid Income Taxes (31,829) (60,386) (10)
Increase, (Decrease) In:
Accounts Payable and
Accrued Expenses (73,666) 140,200 59,514
Other 4,518 4,345 (33,292)
----------- ---------- ---------
Total Adjustments 115,473 228,850 350,450
----------- ---------- ----------
Net Cash Provided (Used) by
Operating Activities 225,211 338,210 535,386
----------- ---------- ----------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Capital Expenditures -0- (3,530) (3,529)
Purchasing of Short Term
Investments -0- -0- -0-
Sale of Short Term Investments -0- -0- -0-
---------- ---------- --------
Net Cash Flows from Investing
Activities -0- (3,530) (3,529)
---------- ------ ------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Principal Payments on First
Mortgage (241,211) (221,059) (451,975)
Purchase of Treasury Stock (40,812) (82,912) (75,347)
Other -0- -0- -0-
---------- ---------- ----------
Net Cash Flows Provided (Used)
by Financing Activities (282,023) (303,971) (527,322)
-------- --------- ---------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (56,812) 30,709 4,535
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 917,971 913,436 913,436
----------- ---------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 861,159 $ 944,145 $ 917,971
=========== ========= ===========
3
HOLOBEAM, INC.
Notes to Condensed Financial Statements
Form 10Q
March 31, 2005
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, 2005 and 2004 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, 2005.
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, 2005 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, 2005
(1) Material Changes in Financial Condition
Cash flows from operating activities for the six months
ended March 31, 2005 were $225,211.00, down $112,999.00
when compared to the six months ended March 31, 2004. The
change resulted primarily from decreases in accounts
payable and accrued expenses.
During the six months ended March 31, 2005, working
capital improved to $<27,233.00> when compared to working
capital at September 30, 2004 which was $<49,408.00>.
The Registrant recorded purchases of Treasury stock
during the six months ended March 31, 2005 in the amount of
$40,812.00 which had a negative effect upon the
Registrant's working capital.
It is the intention of the Registrant to seek
opportunities for improving its real estate development and
rental activities in the geographical area in which it
presently performs such activities, Bergen County, New
Jersey.
Also, the Registrant intends to investigate methods for
improving the properties presently owned by the Registrant
5
HOLOBEAM, INC.
Form 10Q
Management's Discussion and Analysis of Financial Condition
and Results of Operations
March 31, 2005
at 50 A&S Drive, Paramus, New Jersey. In order to attract
suitable tenants for the properties when the leases expire, the
Registrant will be required to improve access to the properties
because there is presently no direct access from New Jersey
State Highway No. 17.
At the present time, no specific opportunities have
been identified for development or for access improvement
but the Registrant will continue to search for appropriate
projects. If such opportunities are identified, the
Registrant intends to fund the projects with the equity
values contained in the existing rental properties.
In addition, the Registrant may seek a new mortgage on
the existing properties for purposes of providing cash
reserves in the event that the properties are vacant for an
extended period during the time in which the improvements
are scheduled, and to reduce the interest expense
associated with the present mortgage.
Funding of the improvement projects and the acquisition
of a new mortgage is not expected to have a materially
adverse effect upon the Registrant's financial condition.
6
HOLOBEAM, INC.
Form 10Q
Management's Discussion and Analysis of Financial Condition
and Results of Operations
March 31, 2005
(2) Material Changes in the Results of Operations
During the three months and six months ended March 31,
2005, the Registrant recorded after-tax income of
$71,035.00 and $109,738.00 respectively, up $37,382.00 and
$378.00 when compared to the results of operations for the
three and six months ended March 31, 2004. The increase in
income results principally from decreases in interest
expense associated with the mortgage on the Registrant's
properties and reduced general and administrative expenses.
During the six months ended March 31, 2005, the
Registrant contributed $204,360.00 to the Registrant's
deferred benefit pension plan. The Registrant expects to
continue funding of the plan in subsequent periods and
anticipates no materially adverse effect upon the
Registrant's financial condition as a result of such
contributions.
The Registrant expects short-term revenues and expenses
to be consistent as the Registrant's rental properties are
100% leased through 2009.
7
PART II
HOLOBEAM, INC.
Signatures
Form 10Q
March 31, 2005
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 May 11, 2005
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, 2005
By: William M. Hackett
William M. Hackett
Director and Treasurer
Date: May 11, 2005
By: Beverly Cook
Beverly Cook
Director and Secretary
Date: May 12, 2005
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 30, 2004 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 March
31, 2005, 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;
9
(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 11, 2005
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;
10
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: May 12, 2005
Melvin S. Cook, President
Melvin S. Cook
President
11
Exhibit A
HOLOBEAM, INC.
Statement of Computation of Per Common Share Earnings
Form 10Q
March 31, 2005
Three Months Six Months
Ended March 31, Ended March 31,
------------------ ------------------
2005 2004 2005 2004
------ ------ ------ ------
PRIMARY
Net Income $ 71,035 $ 33,653 $109,738 $109,360
SHARES
Weighted Average
Number of Common
Shares Outstanding 269,940 271,505 270,230 272,468
Earnings Per Share $0.26 $0.12 $0.41 $0.40