May 11, 1998
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, 1998, 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, 1998
COMMISSION FILE NUMBER: 0-3385
HOLOBEAM, INC.
(Exact name of Registrant as specified in its charter)
Delaware 22-1840647
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) I.D. Number
217 First Street, Ho-Ho-Kus, New Jersey 07423
(Address of principal executive offices) (Zip Code)
201-445-2420
(Registrant's telephone no., including area code)
(Former name, former address and former fiscal year, if changed
since last report)
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Sections 13 or 15 (d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the Registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days.
yes x no
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
302,483 Common Shares at May 6, 1998
<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
Computation of Earnings Per Common Share Exhibit A
<PAGE>
PART I
HOLOBEAM, INC.
Condensed Balance Sheets
ASSETS
<TABLE>
<CAPTION>
March 31,1998 Sept. 30,1997
<S> <C> <C>
Current Assets
Cash and Cash Equivalents $ 441,932 $ 365,308
Short Term Investments 400,000 400,000
Other Current Assets 22,051 13,699
--------- ----------
Total Current Assets 863,983 779,007
Investments in Real Estate, Net 5,987,350 6,087,370
Machinery & Equipment, Net 45,945 51,262
Deferred Tax Asset -0- -0-
Other Non-Current Assets 610,178 635,028
----------- -----------
Total Assets $ 7,507,456 $ 7,552,667
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts Payable $ 52,500 $ 116,172
Accrued Expenses 101,643 110,632
Income Taxes Payable 7,199 -0-
Current Portion of Long Term Debt 279,723 267,783
---------- -----------
Total Current Liabilities 441,065 494,587
Mortgage Payable, Net of Current
Portion 6,121,152 6,264,065
Real Estate Commissions Payable 45,995 45,995
---------- -----------
Total Liabilities 6,608,212 6,804,647
Shareholders' Equity
Common Stock 105,260 105,260
Paid-In-Capital 12,399,699 12,399,699
Accumulated Deficit ( 8,947,680) ( 9,114,557)
Treasury Stock, At Cost ( 2,658,037) ( 2,642,382)
----------- -----------
Shareholders' Equity 899,242 748,020
----------- -----------
Total Liabilities and
Shareholders Equity $ 7,507,456 $7,552,667
=========== ==========
</TABLE>
1
<PAGE>
HOLOBEAM, INC.
Condensed Statement of Income
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
March 31, March 31,
1998 1997 1998 1997
<S> <C> <C> <C> <C>
Revenue
Rental Income $472,479 $450,604 $944,958 $901,208
Interest Income 11,904 4,940 19,805 11,484
Other 50 -0- 50 -0-
-------- -------- -------- --------
Total Revenue 484,433 455,544 964,813 912,692
Costs and Expenses
Rental Expenses 54,936 54,709 109,989 119,396
General and Admin. Expenses 83,112 79,382 161,638 150,200
Research and Development 62,512 33,972 114,224 66,891
Interest 142,384 147,039 286,196 296,263
Other -0- -0- -0- -0-
------- ------- ------- -------
Total Costs and Expenses 342,944 315,102 672,047 632,750
------- ------- ------- -------
Income Before Income Taxes 141,489 140,442 292,766 279,942
Income Tax Expense 65,469 64,644 125,889 120,375
------- ------- ------- -------
Net Income $ 76,020 $ 75,798 $166,877 $159,567
======== ======== ======== ========
Weighted Average Number of
Shares Outstanding 305,467 312,177 305,742 312,460
Net Income Per Share $0.25 $0.24 $0.55 $0.51
</TABLE>
2
<PAGE>
HOLOBEAM, INC.
Condensed Statements of Cash Flows
Increase (Decrease) in Cash and Cash Equivalents
<TABLE>
<CAPTION>
6 Months 6 Months 12 Months
Ended Ended Ended
3/31/98 3/31/97 9/30/97
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C> <C>
Net Income, (Loss) $166,877 $159,567 $303,882
Adjustments to Reconcile Net
Income to Net Cash Provided
by Operating Activities:
Depreciation 108,874 103,386 212,487
Amortization 27,700 28,160 54,895
Decrease, (Increase) In:
Deferred Tax Asset -0- 91,800 91,800
Patent and Patent
Application Costs ( 2,849) ( 5,105) ( 9,447)
Accounts Receivable -0- -0- -0-
Real Estate Brokers
Commissions -0- ( 58,415) ( 89,455)
Increase, (Decrease) In
Accounts Payable and
Accrued Expenses ( 65,462) (179,067) ( 45,637)
Other ( 8,351) ( 20,915) 51,835
-------- ------- -------
Total Adjustments ( 59,912) ( 40,156) 266,478
-------- ------- -------
Net Cash Provided (Used) by
Operating Activities 226,789 119,411 570,360
------- ------- -------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Capital Expenditures ( 3,537) ( 38,930) ( 51,587)
Proceeds from Sale of Assets -0- -0- 7,500
Purchase of Short Term
Investments -0- -0- (400,000)
-------- -------- --------
Net Cash Flows from Investing
Activities ( 3,537) ( 38,930) (444,087)
-------- -------- --------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Principal Payments on First
Mortgage (130,973) (120,031) (245,412)
Principal Payments on Loan
Payable - Tandy -0- -0- -0-
Purchase of Treasury Stock ( 15,655) ( 25,595) (114,325)
Other -0- -0- -0-
-------- -------- --------
Net Cash Flows Provided (Used)
by Financing Activities (146,628) (145,626) (359,737)
-------- -------- --------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 76,624 (65,145) (233,464)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 365,308 598,772 598,772
-------- ------- -------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $441,932 $533,627 $365,308
======== ======== ========
</TABLE>
3
<PAGE>
HOLOBEAM, INC.
Notes to Condensed Financial Statements
Form 10Q
March 31, 1998
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, 1998 and 1997 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, 1998.
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, 1998 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, 1998
(1) Material Changes in Financial Condition
During the six months ended March 31, 1998, the
Registrant improved working capital ratio from 1.58:1 at
September 30, 1997 to 1.96:1 at March 31, 1998. This
improvement trend has continued through fiscal 1998 and
results from positive cash flows associated with the
Registrant's real estate rental activities. The Registrant
expects this favorable trend to continue for subsequent
periods while the current operating leases are effective.
The Registrant's medical staple technology development
activities are continuing and animal testing has commenced.
This testing has yielded some successful results, but have not
yet provided sufficient data by which the Registrant will be
able to decide on continued funding of the project. If tests
are positive, then the Registrant expects to fund significant
costs for purchase of equipment, fixtures, additional research
activities and other costs associated with the administration
of such activities.
The Registrant has expended $114,224 and $62,512 in
connection with the medical staples technology development
during the six months and three months ended March 31, 1998.
5
<PAGE>
HOLOBEAM, INC.
Form 10Q
Management's Discussion and Analysis of Financial Condition
and Results of Operations
March 31, 1998
Funding of the development project is expected to continue during
the current fiscal year and will approximate $250,000 for the full
fiscal year.
(2) Material Changes in the Results of Operations
The results of operations for the three months and six
months ended March 31, 1998 indicate after income tax earnings
of $76,020 and $166,877, respectively, as compared to $75,798
and $125,889 for the corresponding periods one year ago.
Revenues associated with the real estate rental
activities increased during the three months and six months
ended March 31, 1998 as a result of incremental rent increases
provided by cost of living clauses contained in the operating
leases. Such increases amounted to $21,875 and $43,750,
respectively.
Costs and expenses remained relatively stable during the
period covered by this report, with the exception of research
and development costs expended in connection with the
Registrant's surgical staple technology efforts. Such
expenses increased by $28,540 and $47,333, respectively.
Continued funding of the Registrant's development
activities related to the surgical staple technology is
anticipated to be provided by the earnings associated with the
<PAGE>
HOLOBEAM, INC.
Form 10Q
Management's Discussion and Analysis of Financial Condition
and Results of Operations
March 31, 1998
Registrant's real estate rental activities during the short term.
If such efforts provide positive results, the Registrant
may decide to continue funding the project from revenues or it
may seek a business relationship with a firm experienced in
development and marketing of such products for the long term.
(Reference is made to Annual Report, Form 10K, Item 1(c) and
Items 7(1), 7(2) and 7(3) for the year ended September 30,
1997.)
7
<PAGE>
HOLOBEAM, INC.
Signatures
Form 10Q
March 31, 1998
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 11, 1998
Holobeam, Inc.
Registrant
William M. Hackett
Treasurer and Director
8
<PAGE>
Exhibit A
HOLOBEAM, INC.
Computation of Earnings Per Common Share
Form 10Q
March 31, 1998
Six Months Ended
March 31
1998 1997
PRIMARY
Net Income (Loss) $166,877 $159,567
SHARES
Weighted Average Number of Common
Shares of Outstanding 305,742 312,460
Primary Earnings Per Share $0.55 $0.51
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-END> MAR-31-1998
<CASH> 441,932
<SECURITIES> 400,000
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 863,983
<PP&E> 7,496,969
<DEPRECIATION> 1,463,674
<TOTAL-ASSETS> 7,507,456
<CURRENT-LIABILITIES> 441,065
<BONDS> 0
0
0
<COMMON> 105,260
<OTHER-SE> 793,982
<TOTAL-LIABILITY-AND-EQUITY> 7,507,456
<SALES> 0
<TOTAL-REVENUES> 964,813
<CGS> 0
<TOTAL-COSTS> 224,213
<OTHER-EXPENSES> 161,638
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 286,196
<INCOME-PRETAX> 292,766
<INCOME-TAX> 125,889
<INCOME-CONTINUING> 106,877
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 106,877
<EPS-PRIMARY> .55
<EPS-DILUTED> .55
</TABLE>
