May 12, 1997
U.S. Securities and Exchange Commission
6432 General Green Way
Alexandria, VA 22312
Attn: File Support
Re: Holobeam, Inc. File No. 0-3385
Gentlemen:
Enclosed you will find one (1) paper format copy of Form 10Q for the
Quarter ended March 31, 1997, which has been previously filed via the Edgar
system.
Kindly acknowledge receipt by signing the enclosed copy of this letter
and returning it to us in the accompanying stamped, self-addressed envelope.
Very truly yours,
William M. Hackett
Treasurer
mjb
Encs.
<PAGE>
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, 1997
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
540 Ravine Court, Wyckoff, New Jersey 07841
(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.
311,850 Common Shares at May 1, 1997
<PAGE>
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
Index of Exhibits 9
<PAGE>
PART I
HOLOBEAM, INC.
Condensed Balance Sheets
<TABLE>
<CAPTION>
ASSETS
March 31, 1997 Sept. 30, 1996
<S> <C> <C>
Current Assets
Cash and Cash Equivalents $ 533,627 $ 598,772
Deferred Tax Asset -0- 91,800
Prepaid Expenses 3,255 6,312
Total Current Assets 536,882 696,884
Investments in Real Estate, Net 6,187,293 6,289,017
Machinery & Equipment, Net 60,055 28,037
Deferred Tax Asset -0- -0-
Other Non-Current Assets 735,843 729,676
Total Assets $ 7,520,073 $ 7,743,614
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts Payable $ -0- $ 159,767
Accrued Expenses 93,374 112,674
Accrued Payroll -0- -0-
Current Portion of Long Term Debt 256,354 245,412
Total Current Liabilities 349,728 517,853
Mortgage Payable, Net of Current
Portion 6,400,875 6,531,848
Real Estate Commissions Payable 77,035 135,450
Total Liabilities 6,827,638 7,185,151
Shareholders' Equity
Common Stock 105,260 105,260
Paid-In-Capital 12,399,699 12,399,699
Accumulated Deficit ( 9,258,872) ( 9,418,439)
Treasury Stock, At Cost ( 2,553,652) ( 2,528,057)
Shareholders' Equity 692,435 558,463
Total Liabilities and
Shareholders' Equity $ 7,520,073 $ 7,743,614
1
</TABLE>
<PAGE>
HOLOBEAM, INC.
Condensed Statement of Income
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
March 31, March 31,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Revenue
Rental Income $450,604 $450,604 $901,208 $901,208
Interest Income 4,940 2,178 11,484 10,423
Other -0- -0- -0- -0-
Total Revenue 455,544 452,782 912,692 911,631
Costs and Expenses
Rental Expenses 54,709 52,893 119,396 105,786
General and Admin. Expenses 79,382 79,241 150,200 150,489
Research and Development 33,972 45,446 66,891 92,865
Interest 147,039 152,989 296,263 306,775
Other -0- -0- -0- -0-
Total Costs and Expenses 315,102 330,569 632,750 655,915
Income Before Income Taxes 140,442 122,213 279,942 255,716
Income Tax Expense 64,644 59,488 120,375 102,133
Net Income $ 75,798 $ 62,725 $159,567 $153,583
Weighted Average Number of
Shares Outstanding 312,177 317,776 312,460 319,378
Net Income Per Share $0.24 $0.19 $0.51 $0.48
</TABLE>
2
<PAGE>
HOLOBEAM, INC.
Condensed Statements of Cash Flows
Increase (Decrease) in Cash and Cash Equivalents
<TABLE>
<CAPTION>
3 Months 6 Months 12 Months
Ended Ended Ended
12/31/97 3/31/97 9/30/96
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income, (Loss) $ 75,798 $ 159,567 $ 306,434
Adjustments to Reconcile Net
Income to Net Cash Provided
by Operating Activities:
Depreciation 51,693 103,386 206,651
Amortization 5,615 28,160 56,037
Decrease, (Increase) In:
Deferred Tax Asset 36,069 91,800 203,790
Patent and Patent
Application Costs ( 2,165) ( 5,105) ( 30,048)
Accounts Receivable -0- -0- 3,758
Real Estate Brokers
Commissions -0- ( 58,415) ( 33,863)
Increase, (Decrease) In
Accounts Payable and
Accrued Expenses ( 170,349) ( 179,067) 20,551
Other 5,577 ( 20,915) ( 608)
Total Adjustments ( 73,560) ( 40,156) 426,268
Net Cash Provided (Used) by
Operating Activities 2,238 119,411 732,702
CASH FLOWS FROM INVESTING
ACTIVITIES:
Capital Expenditures ( 7,500) ( 38,930) -0-
Proceeds from Sale of Assets -0- -0- -0-
Other -0- -0- -0-
Net Cash Flows from Investing
Activities ( 7,500) ( 38,930) -0-
CASH FLOWS FROM FINANCING
ACTIVITIES:
Principal Payments on First
Mortgage ( 60,671) ( 120,031) ( 224,902)
Principal Payments on Loan
Payable - Tandy -0- -0- (1,137,175)
Purchase of Treasury Stock ( 10,980) ( 25,595) ( 119,393)
Other -0- -0- -0-
Net Cash Flows Provided (Used)
by Financing Activities ( 71,651) ( 145,626) (1,481,470)
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS ( 76,913) ( 65,145) ( 748,768)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 610,540 598,772 1,347,540
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 533,627 $ 533,627 $ 598,772
</TABLE>
3
<PAGE>
HOLOBEAM, INC.
Notes to Condensed Financial Statements
Form 10Q
March 31, 1997
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,
1997 and 1996 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, 1997.
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, 1997 are not necessarily indicative of the results of operations to be
expected for a full year.
4
<PAGE>
HOLOBEAM, INC.
Form 10Q
Management's Discussion and Analysis of Financial Condition
and Results of Operations
March 31, 1997
(1) Material Changes in Financial Condition
During the three months and six months ended March 31, 1997, the
Registrant had after income tax earnings of $75,798 and $159,567,
respectively. The deferred tax asset was reduced by $36,069 and $91,800
for the corresponding periods as a result of recording income tax expense
in the amount of $64,644 and $120,375, respectively. The favorable
results of operations for the six months ended March 31, 1997 has fully
consumed the net operating loss carry-forward for income tax purposes and
has resulted in estimated income taxes paid in the amount of $35,598 at
March 31, 1997.
Accounts Payable and Accrued Expenses were also reduced during the
six months ended March 31, 1997 from $272,441 at September 30, 1996 to
$93,374 while Working Capital increased to $187,154 from $179,031 for the
same period.
The Registrant funded research and development in the amount of
$66,891 and $33,972, respectively for the three months and six months
ended March 31, 1997 in connection with the surgical staple project.
(Reference is made to Form 10K for the year ended September 30, 1996,
Items 1(c)(ii), 1(c)(iv), 1(c)(xi) and Item 7(2).)
5
<PAGE>
HOLOBEAM, INC.
Form 10Q
Management's Discussion and Analysis of Financial Condition
and Results of Operations
March 31, 1997
Elementary animal testing of the instrument and the staple have
commenced during the period covered by this report and some degree of
moderate success has been reported. Two instruments were used with one
working well while the other was less successful.
Since the testing and results are extremely preliminary, it would be
premature to conclude that the devices will be ultimately successful and
marketable. If these tests yield more favorable results, it will take
significant additional time and investment before the necessary approvals
are obtained from the regulatory agencies.
It is the intention of the Registrant to await the results of
additional testing before evaluating the business opportunities associated
with the device and staples.
In addition, the Registrant intents to continue funding the testing
and experiments that have commenced during the six months ended March 31,
1997. Such funding is expected to total $250,000 for the year ending
September 30, 1997.
(2) Material Changes in the Results of Operations
The results of operation for the three months and six months ended
March 31, 1997 indicate after income tax profits of $75,798 and $159,567,
respectively. This income represents
6
<PAGE>
HOLOBEAM, INC.
Form 10Q
Management's Discussion and Analysis of Financial Condition
and Results of Operations
March 31, 1997
increases of $13,073 and $5,984 when compared to the corresponding periods
one year ago.
The increase in earnings for the period results from decreases in
interest expenses in the amount of $10,512 and a decrease in research and
development expenses of $11,474.
The Registrant expects to continue to record pre-tax income at the
same rate throughout the balance of the fiscal year, principally from
revenues associated with the operating leases from the Registrant's rental
property. The revenues generated by the leases are expected to continue
providing the cash flows required to fund the surgical staple project,
which may increase as a result of the commencement of animal testing.
During the next six months, expenditures in connection with this
project may approximate $120,000 and will include expenditures for
laboratory supplies, evaluation and testing, and design and engineering
services, and will be charged to operations when incurred.
It is the intention of the Registrant to continue such funding as
long as testing continues to indicate positive results. The continued
funding of this project is not expected to have a materially adverse
effect upon the Registrant's operations during the next six months.
7
<PAGE>
HOLOBEAM, INC.
Signatures
Form 10Q
March 31, 1997
Pursuant to the requirements 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.
Date: May 9, 1997
Holobeam, Inc.
Registrant
William M. Hackett
Treasurer and Director
8
<PAGE>
HOLOBEAM, INC.
INDEX OF EXHIBITS
EXHIBIT NO. DESCRIPTION PAGE #
- ----------- ----------- ------
(11) Statement re Computation of Per Common
Share Earnings 9
(27) Financial Data Schedule
<PAGE>
Exhibit 11
HOLOBEAM, INC.
Statement re Computation of Per Common Share Earnings
Form 10Q
MARCH 31, 1997
Six Months Ended
March 31,
1997 1996
PRIMARY
Net Income $159,567 $153,583
SHARES
Weighted Average Number of Common
Shares of Outstanding 312,460 319,378
Earnings Per Share $0.51 $0.48
9
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-END> MAR-31-1997
<CASH> 533,627
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 536,882
<PP&E> 6,247,348
<DEPRECIATION> 103,386
<TOTAL-ASSETS> 7,520,073
<CURRENT-LIABILITIES> 349,728
<BONDS> 0
0
0
<COMMON> 105,260
<OTHER-SE> 587,175
<TOTAL-LIABILITY-AND-EQUITY> 7,520,073
<SALES> 0
<TOTAL-REVENUES> 912,692
<CGS> 0
<TOTAL-COSTS> 186,287
<OTHER-EXPENSES> 150,200
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 296,263
<INCOME-PRETAX> 279,942
<INCOME-TAX> 120,375
<INCOME-CONTINUING> 159,567
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 159,567
<EPS-PRIMARY> .51
<EPS-DILUTED> .51
</TABLE>
