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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
Annual Report Pursuant to Section 13 or 15 (d)
of the Securities Exchange Act of 1934
For the Fiscal Year May 31, 2001 Commission File No, 0-9966
Haber, Inc.
(Exact name of Company as specified in its charter)
Delaware 22-2305613
State or other jurisdiction of (I.R.S., Employer
incorporation or organization Identification No.)
1009 Avenue C, Ste 06 Bayonne, NJ 07002
(Address or principal executive office) (Zip Code)
Securities registered pursuant to Section 12 (b) of the Act:
None
Securities registered pursuant to Section 12 (g) of the Act:
Common Stock, par value $0.01 par share
$2.00 Convertible Voting Preferred Stock,
par value $10 par share
Indicate by check mark whether the Company (1) has filed all reports required to
be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during
the preceding 12 months or for such shorter period that the Company was required
to file such reports, and (2) has been subject to such ruling requirements for
the past 90 days:
Yes _____ No ___X___
As of May 31, 2001, the aggregate market value of the voting stock held by non-
affiliates of the Company was approximately $5,148,448.
As of May 31, 2001, the number of shares outstanding of the Company's common
stock was: 90,806,292 shares.
Documents incorporated by reference: None
ITEM 1
BUSINESS
General
The company has developed advances chemical and electrochemical process
technologies for separations, extractions, and purifications. The Company will
now focus on commercializing these technologies through joint ventures or
license agreements.
The only product that the Company provides is the EMP-15K. The primary business
of the company is to develop and market future sales of its technologies, and
the Haber Gold Process. The Company may also seek to directly acquire
technology or may seek licenses, joint ventures, or other arrangements with
large industrial partners. These arrangements would include the sales or grants
of uses of its technology in exchange for cash payments, as well as a percentage
of the business, such as net smelter return.
EMP, an acronym for ElectroMolecular Propulsion, is an electrochemical process,
which enables the movement or positioning of a variety of different molecules
It operates in a manner analogous to other known technologies, such as
electrophoresis and Chromatography. EMP is distinguished from other known
techniques by the mechanisms involved, the scope of applicability, and the great
speed and control of the results.
The Haber Gold Process (HGP) is a chemical system discovered by Norman Haber,
the Chairman of the Company, for the hydrometallurgical extraction of gold from
its ores, concentrates, and industrial coatings and materials. There are
several important distinguished features from the conventional method, which is
primarily cyanide extraction. These distinguishing features include specific
action upon gold, independent of other metal elements present, such as silver,
zinc, or copper, it is environmentally safe and a non-toxic way of extracting
liquid, its superior extraction efficiency and greater speed, and it is useful
with ores that are refractory with other methods.
T he main competition to EMP are the technologies of chromatography and
electrophoresis, sold by established instrumentation companies, which include
Hewlett Packard, Perkin Elmer, Bechman Instruments, and a host of other large
and smaller companies. These supply hardware, reagents, substrates, and
associated components.
The chemical market for hydrometallurgical lixiviants for gold and silver mining
is a component of the heavy chemical industry. Cyanide production, which is the
near universal chemical system used, was for example, expanded in the mid-1980's
by DuPont reportedly by some $600 million for North America and Mexico. And
additional $200 million expansion was cited for Australia's gold mining. Other
companies including Imperial Chemical Industries, and Metalgeselshalt, represent
the chemical market against which the Haber Gold process would contend. The
environmental advantage of the HGP over cyanide use remains strategically
significant.
The current estimated market for the aforementioned technologies in
instrumentation is $5.5 billion. The market segment growth is 8%-14% per year
The biotech, pharmaceutical, and industrial chemical markets are key areas of
need.
Patents and Trade Secrets
A U.S. patent covering EMP technology was granted to Norman Haber in 1976 and an
extension of that patent was granted to Mr. Haber in 1979. The patents would
have expired in April of 1993. However, recent changes in U.S. patents add
three more years until 1996. The original patents covering the EMP technology,
which were granted to Mr. Haber in 16 foreign countries and assigned to the
Company, expired in 1996.
The Company is in a position for prioritizing its advanced EMP technology and
know-how for further patent application. It is prepared to file additional
patent applications or prioritization relating to specific aspects of the EMP
technology with the U.S. Patent Office.
In addition to patent protection filed or intended to be filed, the Company
expects to rely on a material extent on selected un-patented proprietary know-
how with respect to its various technologies. However, there can be no
assurances that others will not independently develop such know-how or otherwise
obtain access to the Company's know-how despite the Company's efforts to
maintain its confidentiality, which includes obtaining secrecy agreements from
its employees.
Employees
In 2001, the Company retained: 2 employees and 1 independent consultant. The
two full time employees are Mr. Norman Haber, and Ms. Vania Glazer. Mr. Haber
is Chairman and President of Haber, Inc. He is responsible for the day-to-day
management of the Company as well as the Company's strategy and long-term
planning. Ms. Glazer is Mr. Haber's executive assistant. The full time
consultant to the Company is Henry E. Rosenberg, PhD who assists Mr. Haber in
developing the Company's technologies.
Government Regulation
If Haber, Inc. markets its EMP instruments for use in clinical applications,
blood analyzers and other medical devices and other medical devices, it will be
subject to regulation by the Bureau of Medical Devices of the United States
Food and Drug Administration.
A principal feature of such regulation is that, if the devices should be deemed
not to be substantially equivalent to those already on the market, they could
not be used until specifically approved by the Bureau of Medical Devices. The
Company did not consider to seek approval or to seek a determination whether
any such devices will require such approval or that seeking such approvals would
not present a major obstacle. The process of obtaining approval, or a
determination that approval is not required, could cause material delay in the
introduction of any of these products. However, it is not anticipated, that
this would necessarily occur.
The Company is not required to have any of its products approved by the FDA.
The Company has not sought approval from de FDA for any of its products. The
company is not subject to any FDA regulations.
ITEM 2
PROPERTIES
The Company terminated its lease in Towaco, New Jersey, on October 31, 2000.
The Company now maintains general office facilities at 1009 Avenue C, Ste. 6,
Bayonne, NJ. The Company also leases facilities at 2262 North Federal
Highway, Fort Pierce, Florida, and this site has a total of approximately 3,000
square feet of space. These facilities include 1 laboratory, a prototype
machine shop,and a small area for pre-piloting processing. These facilities
house the equipment necessary for the Company to conduct its research and
development activities for the foreseeable feature.
The prototype machine shop is used to expedite the design and production of EMP
components and all models, for the practical use of EMP. Pre-piloting refers to
the first scale up stage from lab bench quantities to evaluate a process in
larger quantities.
ITEM 3
LEGAL PROCEEDINGS
The Company was in contention with the Department of Environmental Protection
("DEP") in New Jersey and currently has appeared informally before the court
and with a legal representative of the DEP to try to determine a settlement
penalty with the Company for having neglected two filings of septic sampling
and analysis not timely reported in 1990. In order to maintain its approval to
operate a laboratory, it was necessary for the Company to file septic sampling
and analysis reports.
In September 1993, the Company settled this penalty for $22,500 to be paid in
four semi-annual installments of $5,000 and one final semi-annual installment
of $2,500 plus interest at 5.5% beginning October 1993. The settlement
with the New Jersey DEP was paid in full in January of 2000.
In September of 2000, the Company received a subpoena for documents and for the
testimony of its Chairman, Norman Haber, from the Securities & Exchange
Commission, regarding the investigation of Orex Gold Mines, a public company
located in Florida. The Company had entered into a written agreement with Orex
Gold Mine for the sale of a non-exclusive license of the Haber Gold Process.
With the assistance of corporate counsel, the subpoenas were fully complied
with. The Company does not believe that the investigation will have a material
adverse effect upon the Company.
There are no other pending legal proceedings to which the Company is a party or
of which any of their property is subject.
ITEM 4
SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS
There were no matters of substantial consequence that required shareholder
approval.
ITEM 5
MARKET FOR COMPANY'S COMMON EQUITY
& RELATED STOCKHOLDER MATTERS
The Company's common stock is traded "over the counter" and is listed in the
National Market System. The table below sets forth the ranges of the last
sales prices of the Common Stock during each quarter after June 1, 2000.
The quotations reflect dealer prices without markup, markdown or commissions
and do not necessarily represent actual transactions.
Quarter Ended:
2001 High Low
8/31/00 0.130 0.071
11/30/00 0.080 0.040
2/28/01 0.055 0.025
5/31/01 0.059 0.005
2000 High Low
08/31/99 .068 .059
11/30/99 .095 .075
2/28/00 .078 .078
5/31/00 .078 .078
On May 31, 2001, the last sale price of the Company's Common Stock was $.059
and the number of holders of record of the Company's Common Stock was
approximately 2,000.
No cash dividends have been paid on the Common Stock of the Company's since
Its incorporation and the Company intends to retain its earnings, if any, for
use in its business.
Neither the Company, nor Norman Haber, its Chairman, have had any
transactions in the Company's Common Stock.
HABER, INC. A Development Stage Enterprise
PRIVATE Selected Financial Data
ITEM 6
Cumulative
From Inception 2001 2000 1999 1998 1997
12/2/1979
Statement of
Operations
Data
- - Revenues $ 1,971,588 11,520 $ - $ - $ 14,891 $ 11,748
- - Directed
Expenses 1,521,485 2,000 - - 105,113 43,724
- - General
Administrative
Expenses 13,844,072 323,007 1,037,907 261,993 245,208 278,477
- - Research
Development
Expenses 5,049,940 - 1,542 20,878 - -
- - Operating
(loss) (19,448,790) (313,487) (1,039,449)(1,282,871) (335,330) (310,453)
- - Interest
Income 1,025,917 - - 3,135 747 -
- - Net (loss) (23,102,153) (192,583) (978,458)(1,279,736) (337,220) (301,344)
- - Net (loss)
per share (.002) (.01) (.02) (.01) (.01)
Balance Sheet Data
- - Working Capital $(264,076) (281,025) $(177,786) $(304,803)$(225,463)
- - Total assets 34,659 59,288 97,565 61,570 58,842
- - Total Liabilities 285,656 319,917 260,335 322,661 243,744
- - Stockholders' (deficit) (250,997) (260,629) (159,880) (261,091) (184,900)
Item 7
MANAGEMENT'S DISCUSSION & ANALYSIS OF FINANCIAL CONDITIONS
& RESULTS OF OPERATIONS
Results of Operations
The Company controls the proprietary operational features and key science
insights for the technology called ElectroMolecular Propulsion ("EMP"),
which it believes has broad application in the chemical, biomedical and
electronic fields. EMP is a fundamental electrokinetic technology
invented and developed by Norman Haber. The term electrokinetics as it
refers to molecular science, deals with the movement of molecules in
an electric field. ElectroMolecular Propulsion refers to a unique process
to induce high-speed and movement of molecules in a DC electric field.
Ordinarily molecular movements are based on ionic principles EMP does not
appear to be ionic in principle and theory, and falls outside the conventional
framework. This also helps explain other unusual features of EMP, such as the
ability to function with non-polar molecules such as aromatic hydrocarbons.
Another seeming anomaly is that the electrical current levels in EMP is
extremely low. Nevertheless, the movement rates of molecules is observed to be
extremely fast. There are other features of EMP that appear o distinguish it
from known paradigmatic operations. EMP has a range of applications in chemical
analytical instrumentation extraction, purification, control of chemical
reactions, electronic imaging, and other electronic uses.
To date, the Company remains the sole world source for the electrokinetic
technology.
More than 100 application protocols have been completed for use with the EMP
instrument for use with dyes, proteins, etc. Such pre-figured protocols are an
important user-friendly feature for the use of the EMP and commercializing the
EMP-15K instrument and other such solvent media is proprietary and is essential
to functionalize the applications of EMP. Fourteen specific solvent media have
been developed for use with a wide variety dyes in niche markets. It enables
the user to program the instrument for their particular application chemistry,
analysis, and quality control. The niche markets include quality control, and
purity testing for the dye industry, and its various specialty markets such as
food colors, biostains textiles, carpeting, cosmetics, inks, etc. Other
applications include analytical proteomics, diagnostics, pharmaceuticals,
biogicals, and fine chemicals, forensics, biomedical research, and military
field use.
The only product that the Company currently produces is the EMP-15K instrument.
The services that the Company can now provide is the licensed sale of its
technologies.
A new study of fifty-eight commonly used biostain dyes for use in microscopy
was completed using high resolution EMP analysis. Multiple "certified" samples
of each biostain dye were supplied for this study by the Biostain Commission.
The results are being organized for a research paper to be submitted for
publication in a medical-science journal. Almost all the dyes examined were
found to be substantially contaminated. These results indicate a need to
consider this kind of analysis for biostain dyes prior to their use pathology
for examining biopsy and surgical specimens.
Laboratory personnel are loath to be diverted away from their primary and
customary attentions. Nevertheless, the convenience and very high speed of
the analysis (10 seconds to a few minutes), offers a simple means spot check
commercial biostains before their use in diagnostics or research. This could
enhance reliability and reduce the risk of misdiagnosis.
A customized high voltage EMP drive unit that has been transistorized for
creating a more versatile type of EMP instrument was adopted for use.
The Company will continue to effect reductions in its operating expenses while
conforming with continuing operations with the limited amount of working
capital available. This policy will continue until revenue from sales of
adequate refinancing enables otherwise. The Company maintains an office
in Bayonne, NJ and leases facilities for a laboratory in Fort Pierce, Florida.
The Company has continued its activities regarding the development of niche
market applications for its EMP analytical instrumentation. Having decided on
applications for the dye industry, the Company joined the American Association
of Textile Chemists and Colorists (AATCC, in October of 1997. Joining the AATCC
provided access to the leading market prospects in the dye industry. It also
provided the Company with discounts at exhibitions at annual meetings as well as
receiving notifications of international schedules of meetings events, and
publications.
Other application projects and technical publications describing EMP
instrumentation application also are being considered.
The Company has undertaken steps toward the re-engineering of its EMP 15K
instrument with the view of producing an upgraded digitalized and computer
compatible instrument. The products of these units can be subcontracted
through instrument manufacturers.
A new computer program was specifically developed for digital control of the
custom miniaturized EMP power supply. A programmed electronic control board
also was engineered as an interface. The control board protects the operator
from accidental misuse and enables either analog or digital computer control of
the EMP system.
Dr. Henry Rosenberg (Ph.D. in Chemistry) has remained a full-time consultant
with the Company and has become conversant with both the EMP technology and the
proprietary "Haber Gold Process." Dr. Rosenberg also has had extensive sales
and marketing experience with scientific instrumentation and shall also serve
for marketing EMP instrumentation.
The Company issued 960,00 shares to the Lodestone Partners. The Lodestone
Partners were formed as a separate partnership by the Company in 1980/1981.
The Lodestone Partners funded research efforts by the Company, which lead
to the development of the Haber Gold Process and other extractive technologies.
The Lodestone Partners is now defunct. The shares issued to the Lodestone
Partners was exchanged for the complete extractive metallurgical rights of that
partnership. Negotiations with the partners resulted in the 960,000 restricted
shares being issued.
2001 Compared with 2000
Revenues
The Company revenues totaled $11,520 for the fiscal year ended May 31, 2001.
This was the result of the sale of an EMP unit during the year. There were no
revenues in the fiscal years ended May 31, 2000.
Gross Profit
Gross profit for the fiscal year ended May 31, 2001 amount to $9,520. This was
due to the sale of an EMP unit. There was no gross profit in the fiscal year
ended May 31, 2000.
General and Administrative Expenses
General and administrative expenses totaled $323,007 for the fiscal year ended
May 31, 2001. Expenditures decreased by $714,900 or 69%. The decrease for the
year was due to a reduction in consulting and accounting fees, travel,
director's fees and financial promotional expenses. General and administrative
expenses totaled $1,037,907 for the fiscal year ended May 31, 2000.
Research and Development Expenses
There were no research and development expenses incurred for the fiscal year
ended May 31, 2001. Research and development expenditures for the comparable
period in 2000 totaled $1,542.
Other Income and Expense
Other income and expense totaled a net Income of $120,904. The result is due to
the sale of New Jersey tax carry forwards of $121,404 offset by interest
expense of $500.00. Other income and expense for the fiscal year ended May 31,
2000 amounted to a net income of $60,991.
Liquidity and Capital Resources
The Registrant's liquidity and working capital summarized in the following
table, for the year ended May 31, 2001.
May 31, 2001 May 31, 2000
Cash and Temporary Investments $ 10,080 $ 25,392
Working Capital (264,076) (281,035)
Working Capital Ratio (92-1) (0.87-1)
The Registrant's minimal working capital and liquidity position at May 31, 2001
must be supplemented in order to meet the demands upon its working capital, and
the necessity for additional funds to finance development and commercialization
of projects built around the Registrant's technologies. The Registrant will
continue to seek additional funds and there is no assurance that the Company
will be able to sustain its financial needs.
During the year ended May 31, 2001, the Company issued 1,918,800 shares of
Common Stock for $69,200 in cash.
There can be no assurance that the Company will have continuing success in any
of these efforts.
ITEM 8
FINANCIAL STATEMENTS & SUPPLEMENTING DATA
See Index to Financial Statements, Financial Statement Schedules and Exhibits in
Item 14.
ITEM 9
DISAGREEMENTS ON ACCOUNTING & FINANCIAL DISCLOSURE
None
PART III
ITEM 10
DIRECTORS & EXECUTIVE OFFICERS OF THE COMPANY
The Executive Officer and Directors of the Company are as follows:
Director name Age Position with the Company Since
(date)
- - Norman Haber 73 Chairman, President, CEO & Director 1967
- - Paul Buiar 77 Director 1996
Mr. Haber is the founder of the Company, and has been its Chairman, President
and Chief Executive Officer since inception. Mr. Haber holds a BS degree in
chemistry and an M.A in physiology and biological sciences from the New York
City University System. He is the Company's principal
scientist. Mr. Haber is the inventor of the EMP technology and co-developer of
the Haber Gold. His work on EMP has appeared in the Proceedings of the National
Academy of Sciences.
Mr. Paul Buiar is a specialist in political relations, communications and news
media, especially as related to national and international politics including
national presidential campaigns, races for governor, and Mayor (NYC). He has
also been involved with and served as President of the International Association
of Political Consultants. For more than 20 years, he has also been the
Executive Director of the Inner Circle, a prestigious NYC based organization of
current and former journalists. Mr. Buiar's position with the Inner Circle is
not a paid position. His only other business activity is a Director of Haber,
Inc.
Item 11
EXECUTIVE COMPENSATION
Cash Compensation
The following table sets forth the total cash compensation paid by the Company
during the fiscal year May 31, 2001 and 2000 to the executive officers and to
all executive officers as a group:
Name Capacities in Cash
Which Served Compensation
2001 2000 1999
Norman Haber Chairman, President, CEO $0.00 $0.00 $0.00
& Director
All executive officers as a group -0- -0- -0-
(two persons)
Under the terms of understanding as approved and as indicated in the May 31,
1985 notes to financial statement Mr. Haber was awarded compensation $86,000 per
year. Since 1989, Mr. Haber has received no cash compensation from the Company
It is anticipated the Mr. Haber will receive compensation in future years, which
will also include a portion of arrearages. If the accumulated arrearages was
recorded in the financial statements for the year ended May 31, 2001, there
would be an additional loss of $1,032,000 and this would also increase
liabilities, reduce stockholder's equity and increase loss per share, by similar
amounts.
Stock Options
The Company maintains a 1985 Officer's Stock Option Plan (the "Officers'Plan").
The Officer's Plan provides that options to purchase the Company's Common Stock
may be awarded to officers of the Company by a Committee comprised of at least
three directors who are not eligible under the Officers Plan.
Options granted under the Officer's Plan are non-incentive options and stock
appreciation rights may be provided at any time until the options are exercised,
terminated or cancelled. The exercise price of the options can be fixed by the
Committee administering the Officer's Plan at any amount, which is not less than
the par value of the shares subject to option. An optionee may pay the exercise
price of the options in cash or with the Company's stock or with other property
All options under the Officer's Plan will become exercisable as determined by
the committee administering the Plan, and the committee may at any time
accelerate the time at which an option may be exercised. All options will be
non-transferable except by the laws of descent and distribution and, generally,
will be exercisable by the optionee only during the time he is employed by the
Company or within three months thereafter.
Compensation of Directors
Directors of the Company receive no cash compensation or expense reimbursement
in connection with their services as Directors.
ITEM 12
SECURITIES OWNERSHIP
OF CERTAIN BENEFICIAL OWNERS & MANAGEMENT
The table below sets forth certain information relating to the ownership of the
Company's Common Stock, as of December 1, 1999, by (1) shareholders who are
known to the Company to be the beneficial owner of more than 5% of such stock,
(2) each of the Company's Directors and (3) all Directors and Officers of the
Company as a group. Each of the persons listed has sole voting and investment
power with respect to his Shares unless otherwise indicated in the notes of the
table.
Name of No. of shares of Common %
Beneficial Owner Stock and Nature of Beneficial of class
Norman Haber 3,373,159 (1) 4.4%
Paul Buiar 171,308 *
All directors a group 3,544,467 4.4%
* Less than 1%
Nature of Beneficial Ownership
(1) Mr. Haber has the sole voting and investment power with respect to all such
shares except for 565,508 shares which are owned by his wife, individually or as
custodian for their two children.
ITEM 13
CERTAIN RELATIONSHIPS & RELATED TRANSACTIONS
It is also anticipated that, as incentives to retain management, the Company's
officers may be offered the opportunity to participate in the equity of future
ventures in which the Company may become involved.
The Company had no transactions that exceed $60,000.00 in the last fiscal year
The property that the Company leased in Towaco, New Jersey until October of
2000, was owned by Dell Contractors, located at 1 Hill Street, Paterson, New
Jersey.
In the early 1990's, money was loaned to the Company by Norman Haber and members
of his family. Part of these loan transactions were reimbursed by the issuance
of common stock to Mr. Haber and his family members. The issuance of common
stock was subsequently rescinded because documentation as to specific of
ownership could not be provided.
Startec Media, a Florida Company, made representations to Haber, Inc. as early
as 1997, regarding a deal with Orex Gold Mines, another Florida Company.
Startec Media was arranging for the sale of a gold license from Haber to Orex.
Startec was also to perform public/financial relations with a view towards
increasing Orex's stock price. Haber already had an equity share of Orex. As
part of the transaction, Startec media required large up-front fees, which the
Company could not pay. Instead, the Company decided to pay fees to Startec by
issuing common stock. This was viewed by the Chairman of Haber, Inc. as an
excellent business opportunity.
Startec Media never performed any of the public/financial relations services as
the Orex deal eventually collapsed.
Haber did sell a non-exclusive license for the Haber Gold Process to Orex. In
return, Orex was to issue its common stock to the Company. Haber did in fact
receive a Certificate for 600,000 shares of Orex, which contained a restrictive
legend. The Company (Haber, Inc.) returned the certificate and requested that
Orex-re-issue the certificate without the restrictive legend. Pursuant to Rule
144, the Company believed that all of the criteria had been met, including the
holding period, for the Company to receive free-trading stock. Orex never
issued another certificate for the common stock to the Company.
PART IV
ITEM 14
EXHIBITS, FINANCIAL STATEMENTS,
SCHEDULES & REPORTS ON FORM 8-K
The following documents are filed as a part of this report.
1. Financial statements Page
Report of Independent Certified Public Accountants F-1 F-2
Balance Sheets as of May 31, 2000 and 1999 F-3 F-4
Statements of Income (Loss) and Retained Earnings
(deficit) for the years ended May 31, 2000, 1999, 1998,
and from the inception to May 31, 2000. F-5
Statements of Changes in Stockholder's Equity from
Inception to May 31, 2000. F-6 F-11
Statements of Cash Flows for the years ended May 31,
2000, 1999, 1998 and 1997 and from the inception to
May 31, 2000. F-12 F-13
Notes to Financial Statement F-14 F-20
2. Schedule II - Valuation and Qualifying Accounts F-21
3. Exhibit 11 - Statement re: computation of earnings per
share F-22
3(a) (I) Restated Certificate of Incorporation of the
Company filed November 9 1984.
Incorporated by reference to exhibit 2 (a)
to the Company's. Registration Statement
on Form 8-A. Files with Commission on April
30, 1985 (commission File No. 0-9966).
(a) (ii) Certified of Designations of Series.
A Preferred Stock of the Company, filed
A November 20, 1984, Incorporated by
reference to exhibit 2 (b) to the
Exhibits Number Description of Exhibit
Company's Registration Statement
on Form 8-A filed with the
Commission on April 30, 1985
(Commission File No. 0-9966).
(b) By-Laws of the Company. (5)
4(a) Specimen of certificate for Common
Stock (1)
(b) Form of representative's Warrant (7)
(c) (i) Specimen form of certificate for
Convertible Preferred Stock (8)
(ii) Form of Class A Warrant (7)
(iii) Form of Class B Warrant (7)
(iv) Form of Warrant Agreement among the
Company and Continental Stock
Transfer & Trust Company (8)
(The Company will furnish the
Securities and Exchange Commission
upon request a copy of each
Instrument defining the rights of
the holders of the Company's long
term debt.
10(a) (i) Limited Partnership Agreement of
Lodestone Partners, Ltd. (3)
(a) (ii) Research and Development Agreement
between the Company and Lodestone
Partners, Ltd., dated October 10,
1980. (1)
(a) (iii) Agreement for sale of EMP Precious
Metals Application and Technology
(a) (iv) Amendment No. 1 to Agreement of
Limited Partnership of Lodestone
Partners, Ltd.(3)
(a) (v) Amendment No. 1 to Agreement for
Research and Development between the
Company and Lodestone Partners,
Ltd. dated October 10, 1980. (3)
Exhibit Number Description of Exhibits
(a) (vi) Amendment No.1 to Agreement for sale
of EMP Precious Metals Applications
and Technology between the
Company and Lodestone Partners,
Ltd. dated October 10, 1980.
(a) (vii) Agreement dated as of October 10,
1980 among the Company and
Lodestone Partners, LTD.(7)
(a) (viii) Agreement dated May 30, 1984 among
the Company, Norman Haber and
Lodestone Partners, Ltd.(7)
11 Statement re: computation of
earnings par share
22 List of subsidiaries of the
Company
(1) Incorporated by reference to the
corresponding exhibit to the
Company's Registration Statement
on Form 10 (file 0-9966)
(2) Incorporated by reference to the
corresponding exhibit to the
Company's Annual Report on Form
10-K for the fiscal year ended May
31, 1982 (File No. 0-9966)
(3) Incorporated by reference to the
corresponding exhibit to the
Company's Annual Report on Form
10-K for the fiscal year ended May
31, 1983 (File No. 0-9966)
(4) Incorporated by reference to the
corresponding exhibit to the
Company's Amendment No. 1 on Form
8 to its Annual Report on Form 10-K
for the fiscal year ended May 31,
1983 (File No. 0-9966)
(5) Incorporated by reference to the
corresponding exhibit to the
Company's Annual Report on Form
10-K for the fiscal year ended May
31, 1985 (File No. 00-9966)
Exhibit Number Description of Exhibits
(6) Incorporated by reference to the
corresponding exhibit to the
Company's Registration Statement
on Form S-l filed with the
Commission on May 31, 1985 (File No.
2-91444).
(7) Incorporated by reference to the
corresponding exhibit to Amendment
No. 3 to the Company's
Registration Statement on Form S-1
files with the commission on
November 6, 1984 (File No. 2-91444)
(8) Incorporated by reference to the
corresponding exhibit to Amendment
No.4 to the Company's Registration
Statement on Form S-1 filed with the
commission on November 16, 1984
(File No. 2-91444)
(9) Incorporated by reference to Exhibit
10.1 to the Company's Current
Report on Form 8-K filed with the
Commission in connection with events
of August 1, 1985 (File No. 0-9966).
(10) Incorporated by reference to the
corresponding exhibit to Company's
Annual Report on Form 10K for the
fiscal year ended May 31, 1986 (File
No. 0-9966).
(11) Incorporated by reference to the
corresponding exhibit to Company's
Annual Report on Form 10-K for the
fiscal year ended May 31, 1987 (File
No. 0-9966).
(12) Incorporated by reference to the
corresponding exhibit to Company's
Annual Report in Form 10-K for the
fiscal year ended May 31, 1988 (File
No. 0-9966).
(b) reports on Form 8-K
The Company did not file any
reports on Form 8-K during the last
quarter of the period covered by
this report.
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange
Act of 1934, the Company has duly undersigned, thereunto duly authorized.
Dated: June 20, 2002
HABER, INC.
(Company)
Norman Haber
______________________
Norman Haber, Chairman
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
Company and in the capacities and on the dates indicated.
Dated: Dated: June 20, 2002
Norman Haber
_________________________
Norman Haber
Haber Inc., Chief Executive Officer, and Director
(Principal Executive Officer)
Dated: Dated: June 20, 2002
Paul Buiar
_________________________
Paul Buiar
GERALD BRIGNOLA, CPA., P.A.
CERTIFIED PUBLIC ACCOUNTANT
A Professional Corporation
One University Plaza, Suite 505, Hackensack, NJ 07601
Tel.:201-343-8130 - Fax 201-343-9224
Gerald Brignola Michael Chase
Anthony Capricuso Michael J. Nardino
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Stockholders and Board of Directors
Haber, Inc.
470 Main Road
Towaco, New Jersey 07082
We have audited the accompanying balance sheets of Haber, Inc. as of May 31,2001
and May 31, 2000 and the related statements of operations,Stockholder's deficit,
and cash flows for each year in the three year periods ended May 31, 2001, and
for the period from inception to May 31, 2001. These financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for opinion.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 3 to the
Financial statements, the Company has suffered recurring losses from operations
and has a net capital deficiency that raise substantial doubt about its ability
to continue as a going concern. Management's plans in regard to these matters
are also described in Note 3. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
In our opinion, the financial statements at May 31 2001 and May 31, 2000 present
fairly, in all material respects, the financial position of Haber, Inc. The
results of operations from inception through May 31, 2001 and for each of the
three years in the three-year period ended May 31, 2001, in conformity with
generally accepted accounting principles.
GERALD BRIGNOLA, CPA. PA
Hackensack, NJ
June 20, 2002
Haber, Inc. A Development Stage Enterprise
Balance Sheets
May 31
2001 2000
Assets
- - Currents Assets
Cash $10,080 $ 25,392
Inventory 7,000 9,000
Loans Receivable 4,500 4,500
------- --------
21,580 38,892
------- --------
- - Furniture and Equipment
Equipment 343,702 343,702
Furniture and Fixtures 104,679 104,679
------- --------
448,381 448,381
Less: Accumulated
depreciation and amortization 436,958 432,180
------- --------
11,423 16,201
------- --------
Other Assets
- - Security deposit 1,556 3,703
- - Other assets 100 492
------- --------
1,656 4,195
------- --------
$ 34,659 59,288
------- --------
------- --------
See notes to financial Statement
Haber, Inc . A Development Stage Enterprise
Balance Sheets
May 31
2001 2000
Liabilities and Stockholders (Deficit)
- - Currents Liabilities
Accounts payable $ 39,062 $ 86,835
Accrued expenses 37,440 32,900
Due to related parties 191,395 188,062
Payroll other taxes payable 17,759 2,120
Deposit payable - 10,000
---------- ----------
Total Liabilities 285,656 319,917
---------- ----------
- - Commitments and Contingencies
- - Stockholder (Deficit)
Common stock-$.01 par value-150,000,000
shares authorized; 85,787,492 and
76,667,567 shares issued, respectively. 908,063 857,875
- - Preferred stock - $10 par value - 600,000
shares authorized; 145,408 shares and
146,308 shares issued respectively. 1,454,080 1,454.080
- - Capital in excess of par value 21,900,730 21,748,703
- - Stock subscription receivable (36,033) ( 36,033)
- - (Deficit) accumulated during the
development stage. (23,102,153) (22,909,570)
------------- -------------
1,124,687 1,115,055
Less: Treasury stock - 116,625 shares
- at cost 1,375,684 1,375,684
------------- ------------
(250,997) (260,629)
------------- ------------
34,659 $ 59,288
-------------- -----------
-------------- -----------
See notes to financial statements
Haber, Inc. A Development Stage Enterprise
Statements of Operations
Cumulative For the Years Ended
from Inception May 31
2001 2000 1999
- - Revenues $ 1,971,588 11,520 - -
- - Direct Expenses 1,521,485 2,000 - -
----------- --------- --------- --------
- - Gross Profit (loss) 450,103 9,520 - -
----------- --------- --------- --------
- - General and Administrative
Expenses 13,844,072 323,007 1,037,907 1,261,993
- - Research and Development
Expenses 5,049,940 - 1,542 20,878
- - Provision for Uncollectible
Advances to Affiliates 1,004,881 - - -
----------- -------- ---------- --------
19,898,893 323,007 1,039,449 1,282,871
----------- -------- ---------- --------
- - (Loss) Before Other Income
(Expenses) (19,448,790) (313,487) (1,039,449) (1,282,871)
------------ --------- ----------- ----------
- - Other Income (Expenses)
Interest Income 1,025,917 - - 381
Other Income 571,523 121,404 115,255 2,754
Interest (expense) (96,829) (500) - -
(Loss) on investments in
affiliates (5,196,855) - (54,264) -
Gain on disposition of
fixed assets 42,881 - - -
----------- ----------- ---------- ----------
(3,653,363) 120,904 60,991 3,135
----------- ----------- ---------- ---------
- - Net (Loss) $(23,102,153) $(192,583) $(978,458) ($1,279,736)
------------ ----------- ---------- ----------
- - (Loss) per Share $ (.002) $ (.012) $ (.018)
- - Weighted Average Common Shares
Outstanding During the Period 90,806,292 83,471,973 69,955,262
See notes to financial statements
Haber, Inc. A Development Stage Enterprise
Statement of Changes in Stockholder's Deficit
Inception through May 31, 2000
Convertible
Common Stock Preferred Stock
Shares Amounts Shares Amounts
Inception (1967) through
May 31, 1988 10,609,622 106,096 152,926 1,529,260
Stock issued for services 6,375 64 - -
Conversion of preferred stock 1,838 18 (1,100) (11,000)
Stock issued as collateral 165,000 1,650 - -
Cash in private offering 837,239 8,372 - -
Correction of prior issuance (23,174) (231) - -
Warrants expired - - - -
Stock issued in payment
of interest 30,000 300 - -
Equity resulting from outside - - - -
Investment in subsidiary - - - -
Net (loss) for the year - - - -
---------- ------- ------- ---------
Balance Forward - May 31,1989 11,626,900 116,269 151,826 1,518,260
Treasury shares previously
arising in consolidation - - - -
Stock issued for services 400,000 4,000 - -
Conversion of preferred
stock 1,503 15 (900) (9,000)
Stock issued in payment of
debit and interest 3,634,809 36,348 - -
Cash in private offering 40,000 400 - -
Correction of private issuance (2,000) (20) - -
Stock issued for compensation 251,114 2,511 - -
Warrants issued for
compensation - - - -
Net (loss) for the year - - - -
--------- -------- ---------- ---------
Balance - May 31, 1990 15,952,326 159,523 150,926 1,509,260
Stock issued for services 1,850,993 18,510 - -
Conversion of warrants 200,000 2,000 - -
Cash in private offering 1,517,641 15,177 - -
Correction of prior issuance 20,400 204 - -
Conversion of preferred stock - - - -
Net (loss) for the year - - - -
---------- -------- ------- ---------
Balance - May 31, 1991 19,541,360 195,414 150,926 1,509,260
See notes to financial statements
Haber, Inc. A Development Stage Enterprise
Statements of Changes in Stockholders' Deficit
Inception Through May 31, 2000
Capital in Warrants Subscription Retained
Excess of Amount Receivable Earnings
Par Value (Deficit)
Inception (1967)
through May 31, 1988 12,110,316 1,258,133 - (13,700,108)
Stock issued for services - - - -
Conversion of preferred stock 10,982 - - -
Stock issued as collateral (1,650) - - -
Cash in private offering 535,228 - - -
Correction of prior issuance (20,622) - - -
Warrants expired 1,258,133 (1,258,133) - -
Stock issued in payment
of interest - - - -
Equity resulting from outside - - - -
Investment in subsidiary 1,770,187 - - -
Net (loss) for the year - - - (2,613,093)
--------- ---------- ---------- -----------
Balance Forward-May 31,1989 15,662,574 - - (16,313,201)
Treasury shares previously
arising in consolidation - - - -
Stock issued for services 55,400 - - -
Conversion of preferred
stock 8,985 - - -
Stock issued in payment
of debit and interest 910,910 - - -
Cash in private offering 9,600 - - -
Correction of private
issuance - - - -
Stock issued for
compensation 66,353 - - -
Warrants issued for
compensation 107,520 - - -
Net (loss) for the year - - - (982,263)
--------- -------- ---------- -----------
Balance - May 31, 1990 16,821,342 - - (17,295,464)
Stock issued for services 99,236 - - -
Conversion of warrants 8,000 - - -
Cash in private offering 211,649 - - -
Correction of prior issuance 396 - - -
Net (loss) for the year - - - (776,330)
---------- --------- ---------- -----------
Balance - May 31, 1991 17,140,623 - - (18,071,794)
See notes to financial statements
Haber, Inc. A Development Stage Enterprise
Statements of Changes in Stockholders' Deficit
Inception Through May 31 2000
Total
Treasury Stock Shareholder
Equity
Shares Amount (Deficit)
Inception (1967) through
May 31, 1988 223,038 (1,397,444) (93,747)
Stock issued for services - - 64
Conversion of preferred stock - - -
Stock issued as collateral - - -
Cash in private offering - - 543,600
Correction of prior issuance (6,413) 20,760 (93)
Warrants expired - - -
Stock issued in payment
of interest - - 300
Equity resulting
from outside - - -
Investment in subsidiary - - 1,770,187
Net (loss) for the year - - (2,613,093)
------- ---------- ----------
Balance May 31,1989 216,625 (1,376,684) (392,782)
------- ---------- -----------
Treasury shares previously
arising in consolidation (100,000) 1,000 1,000
Stock issued for services - - 59,400
Conversion of preferred
stock - - -
Stock issued in payment
of debit and interest - - 947,258
Cash in private offering - - 10,000
Correction of private
issuance - - (20)
Stock issued for
compensation - - (68,864)
Warrants issued for
compensation - - 107,520
Net (loss) for the year - - (982,263)
------- ---------- -----------
Balance - May 31, 1990 116,625 (1,375,684) (181,023)
Stock issued for services - - 117,746
Conversion of warrants - - 10,000
Cash in private offering - - 226,826
Correction of prior issuance - - 600
Net (loss) for the year - - (776,330)
-------- ---------- -----------
Balance - May 31, 1991 116,625 (1,375,684) (602,181)
See notes to financial statements
Haber, Inc. A Development Stage Enterprise
Statements of Changes in Stockholders' Deficit
Inception Through May, 31 2000
Common Stock Convertible
Preferred Stock
Shares Amount Shares Amount
Balance - May 31, 1991 19,541,360 195,414 150,926 1,509,260
Stock issued for services 461,875 4,619 - -
Stock issued in payment
of liabilities 755,040 7,550 - -
Cash in private offering 1,404,995 14,050 - -
Correction of prior issuance (90,767) (908) - -
Conversion of preferred stock 2,304 23 (1,379) (13,790)
Conversion of warrants 915,000 9,150 - -
Net (loss) for the year - - - -
---------- -------- ------- ---------
Balance forward-May 31, 1992 22,989,807 229,898 149,547 1,495,470
Stock issued for services 629,800 6,298 - -
Cash in private offering 1,274,343 12,743 - -
Net (loss) for the year - - - -
---------- ------- ------- ---------
Balance - May 31, 1993 24,893,950 248,939 149,547 1,495,470
Cash in private offering 993,703 9,937 - -
Shares issued for services 463,000 4,630 - -
Conversion of warrants 87,000 870 - -
Stock returned from directors (1,709,915) (17,099) - -
Net (loss) for the year - - - -
Stock issued by unconsolidated
subsidiary - - - -
----------- ------- ------- --------
Balance Forward May 31, 1994 24,727,738 247,277 149,547 1,495,470
See notes to financial statements
Haber, Inc. A Development Stage Enterprise
Statements of Changes in Stockholders' Deficit
Inception Through May 31, 2000
Capital in
Excess of Subscription Retained
Par Value Receivable Earnings
(Deficit)
Balance - May 31, 1991 17,140,623 - (18,071,794)
Stock issued for services 91,282 - -
Stock issued in payment
of liabilities 218,260 - -
Cash in private offering 471,450 - -
Correction of prior issuance - - -
Conversion of preferred stock 13,767 - -
Conversion of warrants 19,000 - -
Net (loss) for the year - - (530,965)
---------- --------- ------------
Balance - May 31, 1992 17,954,382 - (18,602,759)
Stock issued for services 63,817 - -
Cash in private offering 362,102 - -
Net (loss) for the year - - (348,661)
---------- ---------- -----------
Balance - May 31, 1993 18,380,301 - (18,951,420)
Cash in private offering 107,703 - -
Shares issued for services - - -
Conversion of warrants 1,820 - -
Stock returned from directors 17,099 - (300,091)
Net (loss) for the year - - -
Stock issued by unconsolidated
subsidiary 149,720 - -
---------- ---------- -----------
Balance forward-May 31, 1994 $18,656,643 $ - $(19,251,511)
See notes to financial statements
Haber, Inc. A Development Stage Enterprise
Statements of Changes in Stockholders' Deficit
Inception Through May 31, 2000
Treasury Stock Total
Shares Amount Stockholders
(Equity)
(Deficit)
Balance - May 31, 1991 116,625 (1,375,684) (602,181)
Stock issued for services - - 95,901
Stock issued in payment
of liabilities - - 225,810
Cash in private offering - - 485,500
Correction of prior issuance - - (908)
Conversion of preferred stock - - -
Conversion of warrants - - 28,150
Net (loss) for the year - - (530,965)
--------- ---------- -----------
Balance - May 31, 1992 116,625 (1,375,684) (298,693)
Stock issued for services - - 70,115
Cash in private offering - - 374,845
Net (loss) for the year - - (348,661)
------- ----------- ---------
Balance - May 31, 1993 116,625 (1,375,684) (202,394)
Cash in private offering - - 117,640
Shares issued for services - - 4,630
Conversion of warrants - - 2,690
Stock resumed from directors - - -
Net (loss) for the year - - (300,091)
Stock issued by
unconsolidated subsidiary - - 149,720
---------- --------- ---------
Balance forward
May 31, 1994 $ 116,625 $ $(1,375,684) $ (227,805)
See notes to financial statements
Haber, Inc. A Development Stage Enterprise
Statements of Changes in Stockholders' Deficit
Inception Through May 31, 2000
Convertible
Common Stock Preferred
Shares Amount Stock
Shares Amount
Balance Forward - May 31, 1994 24,727,738 247,277 149,547 1,495,470
Cash in private offering 411,547 4,116 - -
Shares issued for services 2,012,590 20,126 - -
Conversion of warrants 105,081 1,051 - -
Stock returned from directors (210,000) (2,100) - -
Conversion of preferred stock 5,412 54 (3,239) (32,390)
Stock issued by unconsolidated
subsidiary - - - -
Net (loss) for year - - - -
--------- ------- ------- --------
146,308 1,463,080
Balance - May 31, 1995 27,052,368 270,524
Sale of Stock 2,301,000 23,010 - -
Stock issued for services 2,896,111 28,961 - -
Conversion of warrants 9,200 92 - -
Rescission obligation
converted stock 1,304,949 13,049 - -
Repayment of borrowed shares 1,820,379 18,204 - -
Acquisition of equity
interest in Medco Health Corp. 7,300,000 73,000 - -
Net (loss) for the year - - - -
--------- ------- -------- --------
Balance - May 31, 1996 42,684,007 426,840 146,308 1,463,080
Sale of stock 2,744,474 27,445 - -
Stock issued for services 661,319 6,613 - -
Conversions of warrants - - - -
Stock issued in payment
of liabilities 391,000 3,910 - -
Net (loss) for the year - - - -
--------- ------- -------- --------
Balance forward May 31, 1997 46,480,800 464,808 146,308 1,463,080
See notes to financial statements
Haber, Inc. A Development Stage Enterprise
Statements of Changes in Stockholders Deficit
Inception Through May 31, 2000
Capital in Subscription Retained
Excess of Receivable Earnings
Par value (Deficit)
Balance Forward
- -May 31, 1994 18,656,643 - (19,251,511)
Cash in private offering 48,579 - -
Shares issued for services 5,323 - -
Conversion of warrants 24,549 - -
Stock returned from
directors 2,100 - -
Conversion of preferred
stock 32,336 - -
Stock issued by
unconsolidated subsidiary 17,193 - -
Net (loss) for the year - - (401,483)
---------- ----------- ----------
Balance May 31, 1995 18,786,723 (41,750) (19,652,994)
Sale of Stock 237,188 - -
Stock issued for
services - - -
Conversion of Warrants - - -
Recision obligation
converted stock 285,532 - -
Repayment of borrowed
shares (18,204) - -
Acquisition of equity
interest Medco Health Corp. - - -
Net (loss) for the year - - (359,728)
---------- ---------- ------------
Balance May 31, 1996 19,291,239 (41,750) (20,012,722)
Sale of Stock 251,555 (62,950) -
Stock issued for services 98,850 - -
Conversion of warrants - - -
Stock issued in payment
of liabilities 40,018 - -
Net (loss) for the year - - (301,344)
- ---------- --------- ------------
Balance forward
May 31, 1997 19,681,662 (104,700) (20,314,066)
See note to financial statements
Haber, Inc A Development Stage Enterprise
Statements of Changes in Stockholders Deficit
Inception Through May 31, 2000
Total
Stockholders
Treasury Stock Equity
Shares Amount (Deficit)
Amount
Balance forward
- -May 31, 1994 116,625 (1,375,684) (227,805)
Cash in private offering - - 52,695
Shares issued for services - - 25,449
Conversion of warrants - - 25,600
Stock returned from directors - - -
Conversion of preferred Stock - - -
Stock issued by
unconsolidated subsidiary - - -
Net (Loss) for the year - - (401,483)
-------- ---------- ---------
Balance May 31, 1995 116,625 (1,375,684) (508,351)
Sale of Stock - - 218,448
Stock issued for services - - 28,961
Conversion of warrants - - 92
Recision obligation
Converted stock - - 298,581
Repayment of borrowed shares - - -
Acquisition of equity
interest Medco Health Corp. - - 73,000
Net (loss) for the year - - (359,728)
-------- ---------- ---------
Balance May 31, 1996 116,625 (1,375,684) (248,997)
Sale of Stock - - 216,050
Stock issued for services - - 105,463
Conversions of warrants - - -
Stock issued in payment
of liabilities - - 43,928
Net (loss) for the year - - (301,344)
-------- ---------- ---------
Balance forward
May 31, 1997 116,625 (1,375,684) (184,900)
See notes to financial statements
Haber, Inc. A Development Stage Enterprise
Statements of Changes in Stockholders' Deficit
Inception Through May 31, 2000
Convertible
Preferred
Common Stock Stock
Shares Amount Shares Amount
Balance May 31, 1997 46,480,800 464,808 146,308 1,463,080
Sale of stock 6,275,000 27,250 - -
Stock issued for services 3,998,573 39,986 - -
Conversions of warrants - - - -
Stock issued in payment
of liabilities - - - -
Net (loss) for the year - - - -
--------- ------- --------- ---------
Balance May 31, 1998 56,754,373 532,044 146,308 1,463,080
Sale of stock 4,926,334 49,264 - -
Stock issued for services 13,320,195 168,701 - -
Conversions of warrants - - - -
Stock issued in payment
of liabilities 1,666,667 16,667 - -
Net (loss) for the year - - - -
--------- ------- --------- ---------
Balance May 31, 1999 76,667,569 766,676 146,308 1,463,080
Conversions of stock 1,169 11 (900) (9,000)
Sale of stock 1,838,754 18,388 - -
Stock issued for services 6,180,000 61,800 - -
Stock issued in payment
of liabilities 140,000 1,400 - -
Buyout of: investment 960,000 9,600 - -
Net (loss) for the year - - - -
--------- ------- --------- ---------
Balance May 31, 2000 85,787,492 857,875 145,408 1,454,080
Sale of Stock 1,918,800 19,188 - -
Stock issued for services 3,100,000 31,000 - -
--------- ------- --------- ---------
Balance May 31, 2001 90,806,292 908,063 145,408 1,454,080
See notes to financial statements
Haber, Inc. A Development Stage Enterprise
Statements of Changes in Stockholders Deficit
Inception Through May 31, 2000
Capital in Subscription Retained
Excess of Receivable Earnings
Par value (Deficit)
Balance May 31, 1997 19,681,662 (104,700) (20,314,066)
Sale of stock 141,750 ( 3,033) -
Stock issued for services 55,076 - -
Conversions of warrants - - -
Stock issued in payment
of liabilities - - -
Net (loss) for the year (337,200)
-------- --------- -----------
Balance May 31, 1998 19,878,488 (107,733) (20,651,286)
Sale of stock 141,636 71,700 -
Stock issued for services 899,735 - -
Conversions of warrants - - -
Stock issued in payment
of liabilities 33,333 - (1,279,736)
Net (loss) for the year - - -
----------- --------- -----------
Balance May 31, 1999 20,953,192 (36,033) (21,931,112)
Conversions of stock 8,989 - -
Sale of stock 106,517 - -
Stock issued for services 628,827 - -
Stock issued in payment
of liabilities 6,514 - -
Buyout of Investment 44,664 - -
Net (loss) for the year - - (978,458)
-------- --------- -----------
Balance May 31, 2000 21,748,703 (36,033) (22,909,570)
Sale of Stock 50,012 - -
Stock issued for services 102,015 - -
Net (loss) for the year - - (192,583)
--------- --------- -----------
Balance May 31, 2001 21,900,730 (36,033) (23,102,153)
Haber, Inc A Development Stage Enterprise
Statements of Changes in Stockholders Deficit
Inception Through May 31, 2000
Total
Stockholders
Treasury Stock Equity
Shares Amount (Deficit)
Balance May 31, 1997 116,625 1,375,684 (184,900)
Sale of stock - - 165,967
Stock issued for services - - 95,062
Conversions of warrants - - -
Stock issued in payment
of liabilities - - -
Net (loss) for the year (337,200)
-------- --------- -----------
Balance May 31, 1998 116,625 (1,375,684) (261,091)
Sale of stock - - 262,600
Stock issued for services - - 1,068,435
Conversions of warrants - - -
Stock issued in payment
of liabilities - - 50,000
Net (loss) for the year - - (1,279,736)
----------- --------- -----------
Balance May 31, 1999 116,625 (1,375,684) (159,881)
Conversions of stock - - -
Sale of stock - - 124,905
Stock issued for services - - 690,627
Stock issued in payment
of liabilities - - 7,914
Buyout of Investment - - 54,264
Net (loss) for the year - - (978,458)
----------- --------- ------------
Balance May 31, 2000 116,625 (1,375,684) (260,629)
Sale of Stock - 69,200
Stock issued for services - 133,015
Net (loss) for the year - (192,583)
--------- --------- ---------
Balance May 31, 2001 116,625 (1,375,684) (250,997)
Haber, Inc. A Development Stage Enterprise
Statements of Cash Flows Page 1 of 2
Cumulative For the Years Ended
from Inception May 31
2001 2000 1999
Cash Flows from Operating
Activities
- - Net (loss) (23,102,153) (192,583) (978,458) (1,279,736)
- - Adjustments to reconcile net
(loss) to net cash used
for operating activities:
- - Depreciation 1,661,346 4,778 3,366 3,051
Amortization 1,116,210 - - -
(Gain) on disposal of
fixed assets (42,881) - - -
Stock issued for services 3,781,631 133,690 752,803 1,068,435
Compensation recognized
under employees' stock
option plans 808,458 - - -
Loss on investments in
affiliates 5,142,591 - - -
Provision for uncollectible
advances to affiliates 1,004,881 - - -
(Increase) decrease
in current assets (11,500) 2,000 (1,750) -
Increase (decrease)
in current liabilities 94,883 (37,594) 63,679 (35,590)
---------- ---------- -----------
(9,546,534) (89,709) (160,360) (243,840)
Cash Flows from Investing
Activities
- -Patent costs and licenses (30,659) - - -
- -Purchase of fixed assets (2,412,244) - (9,700) (6,209)
- -Proceeds from sale of fixed
assets 1,086,007 - - -
- -Investments and advances to
affiliates (3,912,626) - - -
- -Goodwill acquired (1,085,551) - - -
- -(Increase) decrease in other
assets (1,746) 2,539 954 31,764
---------- ---------- ---------- --------
(6,356,819) (2,539) (8,746) 25,555
----------- ---------- ---------- --------
See notes to financial statements
Haber, Inc. A Development Stage Enterprise
Statements of Cash Flows Page 2 of 2
Cumulative For the Years Ended
from Inception May 31
2001 2000 1999
Cash Flows from Financing
Activities
- - Proceeds from issuance of
stock 17,126,715 68,525 124,906 282,651
- - Cash dividends (505,976) - - -
- - Purchase of treasury stock (1,375,684) - - -
- - Recovery of insider's selling
profit 17,198 - - -
- - Payment of capital
lease obligation (303,652) - - -
- - Advances from related parties 1,181,967 9,229 54,800 -
- - Repayments to related
parties (191,102) (5,896) (56,007) (29,625)
- - Increase in long-term debt 1,138,477 - - -
- - Payment against long-term debt (1,138,477) - - -
- - Proceeds of notes payable 25,976 - - -
- - Repayment of notes payable (25,976) - - -
- - Stock subscription receivable (36,033) - 29,950 -
----------- ------- --------
15,913,433 71,858 123,699 282,976
----------- ------- -------
Net increase (Decrease) in Cash 10,080 (15,312) (45,407) 64,691
Cash-beginning - 25,392 70,799 6,108
----------- ------- --------
Cash-End $ 10,080 10,080 25,392 70,799
----------- ------- --------
Supplemental Disclosures - - - -
Cash Paid - - - -
Interest $ - $ 500 - -
----------- -------- ------- ---------
----------- -------- ------- ---------
Haber, Inc. A Development Stage Enterprise
For the Years Ended
May 31,
2001 2000 1999
Non-Cash Investing and Financing
Activities
Stock issued in payment
of debt and interest $ - $ 7,913 $ 50,000
--------- ------- --------
Stock issued for Services 133,690 690,627 1,068,435
--------- ------- ---------
Common stock returned
by directors - - -
--------- -------- --------
--------- -------- --------
Fixed assets purchased with
common stock - - -
--------- ---------- --------
--------- ---------- --------
Preferred stock converted
into common - $ 900
--------- ---------- --------
--------- ---------- --------
Stock issued for buyout
of all limited partners in
Lodestone Partnership - - -
$54,264 --------
--------- ---------- --------
See notes to financial statements
Haber, Inc. A Development Stage Enterprise
1) The Company
The Company was founded in 1967 as Haber instruments, Inc., a New York
corporation. On April 1, 1980, Haber Instruments, Inc. was acquired through
a migratory merger by Haber, Inc. (the"Company"), which had been incorporated
in Delaware in October, 1979. The only effect of the merger was a change in
the state of incorporation and a change in name. The Company has relocated its
corporate office from Towaco, New Jersey to Fort Pierce, FL. As of May 3, 2000.
From its formation in 1967, and with the grant of its patents in 1976 and 1979,
the Company has operated as a development stage enterprise, directing its
efforts towards understanding its technology and establishing patents in the
fields of chemical and electrochemical process technologies, primarily as the
basis for cardiovascular diagnostic instrumentation and for the extraction and
purification of high-value metals. The Company owns the fundamental patent to a
process called ElectroMolecular Propulsion
2) Summary of Significant Accounting Policies
a. Patents and Licenses: Represents accumulated legalese costs capitalized and
amortized over their estimated useful lives of 17 years, commencing with the
date of issuance of the related patents. As of May 31, 1999 patents and
license, costs have been completely amortized.
b. Inventory: Inventory consists of supplies of parts and completed units and
are valued at the lower of cost (specifically identified) or market.
c. Furniture and Depreciation: Furniture and equipment are carried at cost.
Depreciation is computed on the straight-line or accelerated methods over
periods of three to seven years, which corresponds to the useful lives of the
assets.
d. Earnings Par Share: Computed by dividing the net loss by the weighted
average number of shares outstanding during the year. Common stock
equivalents have been included in the earnings-per-share computation because of
their anti-dilutive effect.
e. Research and Development Costs: The Company charges research and development
costs, which are not incurred in conjunction with contractual obligations to
expense as incurred. The Company did not incur any research and development
costs for the fiscal year ended May 31, 2001.
f. Estimates: The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumption that effect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the dates of the financial
statements and the reported amounts of revenues and expenses during the
reporting periods. Actual results could differ from those estimates.
g. Unconsolidated Subsidiaries: The Company accounts for its investments in
unconsolidated subsidiaries on the equity method. All inter-company
transactions are eliminated. Losses beyond the initial investment are not
recognized if it is not the Company's obligation to fund such losses. As of May
31, 2001, the Company did not have investments in unconsolidated subsidiaries.
h. Reclassifications: Certain items have been reclassified to conform with the
current years presentation.
3) Status of the Company
The accompanying financial statements have been prepared on a going concern
basis, which contemplates the realization of assets and the satisfaction of
liabilities in the normal course of business.
The Company makes use of equity financing to provide funds for operations. Its
ability to operate is dependent upon its ability to obtain working capital
until regular positive cash flow is attained. It is management's intention to
minimize operating costs until such time as sales can be increased enough to
fund its operations.
The main on-going activity of the Company's business through 2001 was the
furthering of its technology, EMP. This comprised the completion and
introductory sales of its EMP 15K-1 instrument and selected reagents for its
use. Also, provision for preparation of pertinent new patent applications
have been completed, with appropriate notification of the U.S. Patent Office to
prioritize the same.
4) Due to Related Parties
(a)Payables have been generated by transactions with related parties, which are
detailed as follows:
May 31
2001 2000
Shareholders $ 101,168 $ 192,354
Corporate officers and directors 89,956 (4,563)
Joint Venture 271 271
------------ -----------
$ 191,395 $ 188,062
------------ -----------
The amounts due to shareholder, corporate officers and directors and the joint
venture have no fixed terms of repayment and bear no interest.
(b) During the fiscal year ended May 31, 1999, the Company's Chairman
authorized the issuance of 1,990,332 shares of Haber, Inc. common stock to
himself and various members of his family, for repayments of loans
purportedly made to Haber, Inc., dating back to 1992. These individuals
were not able to substantiate these loan and therefore agreed to rescind
the entire transaction. All shares were returned to the transfer agent on
December 31, 1999, to be cancelled of record.
5) Income Taxes
As of May 31, 2000, the Company has a net operating loss and investment tax
credit carry forward for federal income tax purposes of $12,739,086 and $33,120,
respectively. If not offset against taxable income, the operating loss carry
forward will expire as follows:
Net Operating Investment Tax
Loss Carry Credit
Forward Carry forward
Year End May 31,
PRIOR $ 33,120
2002 $ 1,268,752 -
2003 2,414,382 -
2004 2,267,089 -
2005 982,263 -
2006 776,330 -
2007 530,966 -
2008 348,661 -
2009 300,091 -
2010 401,483 -
2011 359,728 -
2012 301,344 -
2013 337,220 -
2014 1,279,736 -
2015 978,458 -
2016 192,583 -
---------- -------------
$ 12,739,086 $ 33,120
---------- -------------
These carry forwards are not expected to be utilized. Based on a 35% federal
tax rate, the Company has deferred tax assets of approximately $4,491,800 and
$4,460,004 at May 31, 2001 and 2000 respectively, which were totally offset by
valuation allowances.
6) Capital Stock
On November 15, 1984, the Board of Directors adopted a resolution reserving
the following shares of .01 par value common stock of the Company:
Shares
Reserved Reason
242,984 Conversion of convertible preferred stock
7) Redeemable Preferred Stock
As a result of the public offering of its securities in November, 1984:
a. Shares of convertible preferred stock are redeemable in whole or in part at
the option of the Company at a price of $20 per share plus any accrued, unpaid
cumulative dividends, at any time after November 25, 1988.
b. Shares of convertible preferred stock are convertible at the option of the
registered holder thereof, into shares of common stock, par value .01 par share,
of the Company (common stock) at the rate of 1.6716 shares of common stock for
each share of convertible preferred stock.
c.On March 19, 1999, the Board of Directors adopted a resolution to increase the
number of authorized shares of common stock to 150,000,000, which represents an
increase of 75,000,000 shares from the year ended May 31, 1999. On April 1,
1999, the Board of Directors approved a resolution to offer a significant
premium to induce conversion of convertible voting preferred stock into common
stock.
8) Options and Warrants
The Company maintains an Employees' Incentive Stock Option Plan and a 1985
Officers' Stock Option Plan and issues unregistered warrants.
All options have expired as of May 31, 1993.
9)Options issued in exchange for services.
FAS 123 encourages the use of a fair value method of accounting for stock based
awards under which the fair value of the stock options is determined on the date
of grant, and expensed over the vesting period. The company policy is to apply
FAS 123. The value of these options have not been recorded due to the immaterial
amounts.
Warrant activity for the period was as follows:
Weighted Option Maximum
Average Value Terms of
Exercise Warrants Per Total Options
Price Share Value Granted
Balance at May 31, 1998 .025 393,000 .0186 7,318 04/01/01
Issued for Service 3,111,167 .138 429,353 03/04/01
Issued in Lieu of
Interest 60,000 .036 2,160 09/29/01
Issued in Connection
with Stock Purchases 9,000 .027 243 10/05/00
Expired (3,080,000) .138 425,040)
----------- . - --------
Balance as of May 31, 1999 .025 493,167 - 14,034
Issued in Connection
with Stock Purchase 100,000 .023 2,300 06/02/00
Expired (25,000) .0186 (465)
--------- ----- --------
Balance at May 31, 2000 .025 568,167 15,869
---------- --------
Balance at May 31, 2001 .025 568,167 15,869
---------- --------
---------- --------
Stock issued in payment of services and liabilities.
The company at times will issue common stock as payment of services and
liabilities. Below is a summary of such activity.
Number of Total
Common shares Value
Fiscal year-end May 31, 1998
Shares issued for services 3,998,573 $ 95,062
Fiscal year-end May 31, 1999
Shares issued for services 13,320,195 $1,068,435
Shares issued for liabilities 1,666,667 50,000
Fiscal year-end May 31, 2000
Shares issued for services 6,180,000 $ 690,627
Shares issued for liabilities 140,000 7,914
Fiscal year-end May 31, 2001
Shares issued for services 102,015 $ 69,200
Valuation method of the above activity was based on the average market value
per share for unrestricted stock issued, and a reduction factor of 75% of
market value of a fiscal 1998 and 15% of a fiscal 2000 and 2001, for restricted
stock issued.
There was no stock issued for compensation during these periods.
Reductions factors of a restricted stock were and are due to the lack of
marketability for the company's stock.
10) Leases
On May 3, 2000 Haber, Inc. entered into a new lease agreement for an office
space approximately 3,000 square feet located at 2262, N US1 Hwy. Fort Pierce,
Florida. The lease commenced July 1, 2000, and terminates June 30, 2001. The
rent shall be $1,750.00 + sales tax of $113.75 per month.
The following is the company's liabilities regarding, the lease as of May 31,
2001.
For the year ended Amount
5/31/02 1,863.75
----------
Subsequent to June 30, 2001 the Company is obligated under a verbal month-to-
month lease at the same monthly rent.
11) Commitments and Contingencies
(A)During the fiscal year ended May 31, 1999, the Company entered into the
following agreements whereby the Company issued common stock for services
rendered in lieu of cash payments as follows:
(1)Financial Consulting Services - Issued or to be issued; 3,950,000
shares in a combination of restricted and unrestricted common stock.
(2) Public Relation Services - On September 1, 1998, 7,500,000 shares of
unrestricted common stock was issued to Startec Media Corporation.
(B)During the course of our audit, it was discovered by that Corporate
Counsel disavowed a letter ostensibly written by him on his letterhead, to
authorize the company's Transfer Agent to issue the 7,500,000 shares to Startec
Media Corporation. We were also unable to verify whether any public relation
services were provided to the Company. This transaction represents $491,250 of
the total loss reported for the fiscal year ended May 31, 1999.
(C)Orex issued 600,000 shares of restricted common shares to Haber, Inc.,
Haber, Inc. contends that the shares should have been unrestricted and returned
all shares to Orex Gold Mines, Inc., requesting that the shares be reissued
without a restrictive legend. To date, Orex Gold Mines, Inc. has not reissued
the shares to Haber, Inc.
12) Other Matters:
The Company is in the process of selling their unused State of New
Jersey Corporation tax losses to New Jersey Economic Development Authority for
the period of May 31, 1999 through May 31, 2001. The Company has previously
sold unused state of New Jersey Corporation Tax losses for the period of May 31,
1993-1998 for $115,255.
13) Selected Quarterly Financial Information (Unaudited)
First Second Third Fourth
Quarter Quarter Quarter Quarter
2000
Net sales - - - -
Gross profit - - - -
Operating income - - - -
Net (loss) (195,357) (672,809) (29,761) (80,531)
Net (loss) per common share (.002) (.008) (.000) (.001)
1999
Net sales - - - -
Gross (loss) - - - 11,520
Operating Income - - - 9,520
Net (loss) (46,055) ( 1,733) (105,435) (42,826)
Net (loss) per common share (.001) (.000) (.001) (.000)
1
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