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, 2004
COMMISSION FILE NUMBER: 0-3385
HOLOBEAM, INC.
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(Exact name of Registrant as specified in its charter)
Delaware 22-1840647
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) I.D. Number
217 First Street, Ho-Ho-Kus, New Jersey 07423
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(Address of principal executive offices) (Zip Code)
201-445-2420
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(Registrant's telephone no., including area code)
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(Former name, former address and former fiscal year, if changed
since last report)
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Sections 13 or 15 (d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the Registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days.
yes x no
----- -----
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
271,479 Common Shares at May 1, 2004
HOLOBEAM, INC.
INDEX
PART I PAGE NO.
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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
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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 31,2004 Sept. 30, 2003
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Current Assets
Cash and Cash Equivalents $ 944,145 $ 913,436
Short Term Investments -0- -0-
Other Current Assets 63,295 14,097
----------- -----------
Total Current Assets 1,007,440 927,533
---------- -----------
Investments in Real Estate, Net 4,787,597 4,887,616
Machinery & Equipment, Net 55,470 60,421
Unbilled Accounts Receivable 1,087,199 1,118,581
Other Non-Current Assets 284,043 304,513
----------- -----------
Total Assets $ 7,221,749 $ 7,298,664
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts Payable $ 176,373 $ 66,751
Accrued Expenses 291,550 260,972
Income Taxes Payable 72,610 109,259
Current Portion of Mortgage Payable 472,127 451,982
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Total Current Liabilities 1,012,660 888,964
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Mortgage Payable, Net of Current
Portion 3,818,142 4,059,346
Deferred Income Taxes 447,432 447,432
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Total Liabilities 5,278,234 5,395,742
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Shareholders' Equity
Common Stock 27,502 27,502
Paid-In-Capital 9,226,979 9,226,979
Accumulated Deficit ( 7,228,054) ( 7,337,414)
Treasury Stock, At Cost ( 82,912) ( 14,145)
---------- ----------
Shareholders' Equity 1,943,515 1,902,922
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Total Liabilities and
Shareholders Equity $7,221,749 $7,298,664
========== ==========
1
HOLOBEAM, INC.
Condensed Statement of Income
Three Months Ended Six Months Ended
March 31, March 31,
------------------ ----------------
2004 2003 2004 2003
---- ---- ---- ----
Revenue
Rental Income $504,477 $504,477 $1,008,952 $1,008,952
Interest Income 894 13,360 2,374 14,728
Other -0- 13,630 -0- 13,630
------- -------- ---------- ----------
Total Revenue 505,371 531,467 1,011,326 1,037,310
Costs and Expenses
Rental Expenses 51,054 57,793 106,657 115,583
General and Admin. Expenses 301,870 216,123 527,483 424,877
Research and Development 444 42,982 444 87,505
Interest 96,034 103,975 194,495 213,099
Other 51 ( 2,222) 277 144
-------- -------- ---------- ---------
Total Costs and Expenses 449,453 418,651 829,356 841,208
-------- -------- ---------- ---------
Income Before Income Taxes 55,918 112,816 181,970 196,102
Income Tax Expense 22,265 45,058 72,610 78,323
------- -------- ----------- ---------
Net Income $ 33,653 $ 67,758 $ 109,360 $ 117,779
======== ======== ========= =========
Weighted Average Number of
Shares Outstanding 271,505 274,985 272,468 276,649
Net Income Per Share $0.12 $0.25 $0.40 $0.43
2
HOLOBEAM, INC.
Condensed Statements of Cash Flows
Increase (Decrease) in Cash and Cash Equivalents
6 Months 6 Months 12 Months
Ended Ended Ended
3/31/04 3/31/03 9/30/03
------- ------- -------
CASH FLOWS FROM OPERATING
ACTIVITIES
Net Income, (Loss) $ 109,360 $ 117,779 $ 204,370
--------- --------- ---------
Adjustments to Reconcile Net
Income to Net Cash Provided
by Operating Activities:
Depreciation 108,500 105,975 219,866
Amortization 20,500 28,469 41,108
Loss on Abandoment of Patents -0- -0- 60,052
Decrease, (Increase) In:
Patent and Patent
Application Costs -0- ( 3,232) ( 3,524)
Accounts Receivable -0- -0- -0-
Unbilled Rents Receivable 15,691 31,382 62,764
Prepaid Income Taxes ( 60,386) ( 11,275) 41,094
Increase, (Decrease) In:
Accounts Payable and
Accrued Expenses 140,200 145,367 124,861
Other 4,345 -0- ( 14,224)
--------- --------- ---------
Total Adjustments 228,850 296,686 531,997
--------- --------- ---------
Net Cash Provided (Used) by
Operating Activities 338,210 414,465 736,367
--------- --------- ---------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Capital Expenditures ( 3,530) ( 1,596) ( 4,214)
Purchasing 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 ( 221,059) ( 202,591) ( 414,214)
Purchase of Treasury Stock ( 82,912) ( 240,032) ( 254,175)
Other -0- -0- -0-
--------- --------- ---------
Net Cash Flows Provided (Used)
by Financing Activities ( 303,971) ( 442,623) ( 668,389)
--------- --------- ---------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 30,709 ( 29,754) 77,394
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 913,436 836,042 836,042
--------- --------- ---------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 944,145 $ 806,288 $ 913,436
========= ========= =========
3
HOLOBEAM, INC.
Notes to Condensed Financial Statements
Form 10Q
March 31, 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 March 31, 2004 and 2003 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, 2004.
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, 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
March 31, 2004
(1) Material Changes in Financial Condition
---------------------------------------
Working capital at March 31, 2004 was $<5,220.00>, down
$43,789.00 when compared to September 30, 2003 and down
$12,746.00 from December 31, 2003.
During the six months ended March 31, 2004, cash flows
from operating activities were $338,210.00, down $76,476.00
when compared to the six months ended March 31, 2003.
The Registrant purchased treasury stock at cost in the
amount of $82,912.00 during the six months ended March 31,
2004. Such purchases negatively affected the Registrant's
working capital in the amount of $81,802.00 for the quarter
ended December 31, 2003 and $1,110.00 during the quarter ended
March 31, 2004.
As previously reported (reference is made to the
Registrant's Annual Report, Form 10K, Item 7 for the year
ended September 30, 2003), the Registrant ended funding of the
surgical staples project and does not intend to make future
expenditures in association with the surgical staples project
other than those necessary to assist with the shut-down of the
project.
The Registrant has initiated efforts to seek
5
HOLOBEAM, INC.
Form 10Q
Management's Discussion and Analysis of Financial Condition
and Results of Operations
March 31, 2004
opportunities for new real estate development and real estate
rental in the geographical area surrounding the Registrant's
existing properties in Bergen County, New Jersey. At the present
time, the Registrant has not identified any specific projects for
suitable properties or opportunities. If an appropriate opportunity
were to be identified, the Registrant intends to fund the
project(s) with the equity values contained in its existing real
estate properties. No materially adverse effect upon the
Registrant's financial condition is expected as a result of funding
such projects.
(2) Material Changes in the Results of Operations
----------------------------------------------
After-tax income for the three months and six months
ended March 31, 2004 was $33,653.00 and $109,360.00
respectively, down $34,105.00 and $9,419.00 when compared to
the after-tax income recorded one year ago.
The decrease results principally from reduced interest
income resulting from lower interest rates on the Registrant's
cash and cash equivalents during the six months ended March
31, 2004 and from increased General and Administrative
expenses resulting from increases in costs necessary and
incidental to the Registrant's operations together with an
6
HOLOBEAM, INC.
Form 10Q
Management's Discussion and Analysis of Financial Condition
and Results of Operations
March 31, 2004
increase in the Registrant's defined benefit pension plan
contribution. Such increase was approximately $65,500.00.
During the three months and six months ended March 31,
2004, the Registrant contributed $136,133.00 and $70,610.00
respectively, to the defined benefit pension plan. The
contributions are charged to operations and are included in
General and Administrative expenses on the Condensed Statement
of Operations.
The Registrant does not anticipate that continued funding
of the defined benefit pension plan will have any materially
adverse effect upon the financial condition of the Registrant.
As previously reported, the Registrant intends to
identify opportunities for real estate development and rental
during the next two (2) calendar quarters. If any such
projects are identified, the Registrant intends to fund such
projects with the equity values contained in the Registrant's
existing properties.
7
PART II
HOLOBEAM, INC.
Signatures
Form 10Q
March 31, 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 May 6, 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: May 6, 2004
------------------------------
By: William M. Hackett
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William M. Hackett
Director and Treasurer
Date: May 6, 2004
-----------------------------
By: Beverly Cook
-----------------------------
Beverly Cook
Director and Secretary
Date: May 6, 2004
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8
CERTIFICATIONS
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(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 March 31,
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
9
which this quarterly report is being prepared;
(b) evaluated the effectiveness of the Registrant's
disclosure controls and procedures as of a date within 90 days
prior to the filing date of this quarterly report (the "Evaluation
Date"); and
(c) presented in this quarterly report our conclusions about
the effectiveness of the disclosure controls and procedures based
on our evaluation as of the Evaluation Date;
5. The Registrant's other certifying officers and I have
disclosed, based on our most recent evaluation, to the
Registrant's auditors and the audit committee of Registrant's
board of directors (or persons performing the equivalent
function):
a) all significant deficiencies in the design or operation
of internal controls which could adversely affect the Registrant's
ability to record, process, summarize and report financial data
and have identified for the Registrant's auditors any material
weaknesses in internal controls; and
b) any fraud, whether or not material, that involves
management or other employees who have a significant role in the
Registrant's internal controls; and
6. The Registrant's other certifying officers and I have
indicated in this quarterly report whether there were significant
changes in internal controls or in other factors that could
significantly affect internal controls subsequent to the date of
our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
Date: May 6, 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
10
of the circumstances under which such statements were made, not
misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and
other financial information included in this quarterly report,
fairly present in all material respects the financial condition,
results of operations and cash flows of the registrant as of, and
for, the periods presented in this quarterly report;
4. The Registrant's other certifying officers and I are
responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-14 and 15d-
14) for the Registrant and have:
(a) designed such disclosure controls and procedures to
ensure that material information relating to the Registrant,
including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in
which this quarterly report is being prepared;
(b) evaluated the effectiveness of the Registrant's
disclosure controls and procedures as of a date within 90 days
prior to the filing date of this quarterly report (the "Evaluation
Date"); and
(c) presented in this quarterly report our conclusions about
the effectiveness of the disclosure controls and procedures based
on our evaluation as of the Evaluation Date;
5. The Registrant's other certifying officers and I have
disclosed, based on our most recent evaluation, to the
Registrant's auditors and the audit committee of Registrant's
board of directors (or persons performing the equivalent
function):
a) all significant deficiencies in the design or operation
of internal controls which could adversely affect the Registrant's
ability to record, process, summarize and report financial data
and have identified for the Registrant's auditors any material
weaknesses in internal controls; and
b) any fraud, whether or not material, that involves
management or other employees who have a significant role in the
Registrant's internal controls; and
6. The Registrant's other certifying officers and I have
indicated in this quarterly report whether there were significant
changes in internal controls or in other factors that could
11
significantly affect internal controls subsequent to the date of
our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
Date: May 6, 2004
-------------
Melvin S. Cook, President
-------------------------
Melvin S. Cook
President
12
Exhibit A
HOLOBEAM, INC.
Statement of Computation of Per Common Share Earnings
Form 10Q
March 31, 2004
Three Months Six Months
Ended March 31, Ended March 31,
2004 2003 2004 2003
PRIMARY
Net Income $ 33,653 $ 67,758 $109,360 $117,779
SHARES
Weighted Average
Number of Common
Shares Outstanding 271,505 274,985 272,468 276,649
Earnings Per Share $0.12 $0.25 $0.40 $0.43