May 14, 1999
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, 1999, 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, 1999
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.
297,618 Common Shares at May 5, 1999
<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
March 31,1999 Sept 30,1998
Current Assets
Cash and Cash Equivalents $ 895,428 $ 301,623
Short Term Investments -0- 421,282
Other Current Assets 4,609 13,915
---------- ----------
Total Current Assets 900,037 736,820
Investments in Real Estate, Net 5,787,391 5,887,410
Machinery & Equipment, Net 41,970 44,771
Deferred Tax Asset -0- -0-
Other Non-Current Assets 564,064 586,081
----------- ----------
Total Assets $ 7,293,462 $ 7,255,082
=========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts Payable $ 169,116 $ 6,832
Accrued Expenses 81,302 109,937
Income Taxes Payable 17,003 5,580
Current Portion of Long Term Debt 305,221 292,195
--------- ---------
Total Current Liabilities 572,642 414,544
Mortgage Payable, Net of Current
Portion 5,815,938 5,971,869
Real Estate Commissions Payable 12,133 12,133
--------- ---------
Total Liabilities 6,400,713 6,398,546
Shareholders' Equity
Common Stock 30,559 30,559
Paid-In-Capital 9,825,498 9,825,498
Accumulated Deficit ( 8,841,031) ( 8,947,666)
Treasury Stock, At Cost ( 122,277) ( 51,855)
----------- ----------
Shareholders' Equity 892,749 856,536
----------- ----------
Total Liabilities and
Shareholders Equity $ 7,293,462 $7,355,082
========== =========
<PAGE>
HOLOBEAM, INC.
Condensed Statement of Income
Three Months Ended Six Months Ended
March 31, March 31,
1999 1998 1999 1998
Revenue
Rental Income $472,479 $472,479 $960,708 $944,958
Interest Income 7,188 11,904 15,808 19,805
Other -0- 50 -0- 50
------- ------- ------- -------
Total Revenue 479,667 484,433 976,516 964,813
------- ------- ------- -------
Costs and Expenses
Rental Expenses 55,010 54,936 110,126 109,989
General and Admin. Expenses 158,508 83,112 312,437 161,638
Research and Development 55,893 62,512 101,780 114,224
Interest 136,350 142,384 274,263 286,196
Other 360 -0- 360 -0-
------- ------- ------- -------
Total Costs and Expenses 406,121 342,944 798,966 672,047
------- ------- ------- -------
Income Before Income Taxes 73,546 141,489 177,550 292,766
Income Tax Expense 29,375 65,469 70,915 125,889
------- ------- ------- -------
Net Income $ 44,171 $ 76,020 $106,635 $166,877
====== ======= ======= =======
Weighted Average Number of
Shares Outstanding 297,618 305,467 298,742 305,742
Net Income Per Share $0.15 $0.25 $0.36 $0.55
<PAGE>
HOLOBEAM, INC.
Condensed Statements of Cash Flows
Increase (Decrease) in Cash and Cash Equivalents
6 Months 6 Months 12 Months
Ended Ended Ended
3/31/99 3/31/98 9/30/98
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income, (Loss) $ 106,635 $ 166,877 $ 166,891
Adjustments to Reconcile Net
Income to Net Cash Provided
by Operating Activities:
Depreciation 102,820 108,874 214,427
Amortization 27,380 27,700 54,442
Decrease, (Increase) In:
Deferred Tax Asset -0- -0- -0-
Patent and Patent
Application Costs ( 5,383) ( 2,849)( 5,495)
Accounts Receivable -0- -0- -0-
Real Estate Brokers
Commissions -0- -0- ( 33,863)
Increase, (Decrease) In
Accounts Payable and
Accrued Expenses 145,072 ( 65,462)( 104,454)
Other 9,326 ( 8,351)( 216)
------- -------- ---------
Total Adjustments 279,215 ( 59,912) 124,841
------- -------- --------
Net Cash Provided (Used) by
Operating Activities 385,850 226,789 291,732
------- ------- -------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Capital Expenditures -0- ( 3,537)( 7,976)
Proceeds from Sale of Assets -0- -0- -0-
Purchase of Short Term
Investments 421,282 -0- ( 21,282)
------- --------- ---------
Net Cash Flows from Investing
Activities 421,282 ( 3,537)( 29,258)
------- --------- ---------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Principal Payments on First
Mortgage ( 142,905) ( 130,973) ( 267,784)
Principal Payments on Loan
Payable - Tandy -0- -0- -0-
Purchase of Treasury Stock ( 70,422) ( 15,655) ( 58,375)
Other -0- -0- -0-
-------- --------- ---------
Net Cash Flows Provided (Used)
by Financing Activities ( 213,327) ( 146,628) ( 326,159)
---------- ---------- --------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 593,805 76,624 ( 63,685)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 301,623 365,308 365,308
-------- ------- -------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 895,428 $ 441,932 $ 301,623
======== ========= =======
<PAGE>
HOLOBEAM, INC.
Notes to Condensed Financial Statements
Form 10Q
March 31, 1999
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,
1999 and 1998 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, 1999.
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, 1999 are not necessarily indicative of the results of operations to
be expected for a full year.
<PAGE>
HOLOBEAM, INC.
Form 10Q
Management's Discussion and Analysis of Financial Condition
and Results of Operations
March 31, 1999
(1) Material Changes in Financial Condition
The Registrant continued to support the surgical staple research
project during the three months and six months periods ended March 31, 1999.
Expenditures for the periods amounted to $55,893.00 and $101,780.00,
respectively.
In addition, the Registrant partially funded the defined benefit
pension plan in the amounts of $76,943.00 and $153,886.00 for the respective
three and six months periods ended March 31, 1999. (Reference is made to the
Registrant's Annual Report, Form 10K, Item 7(2) for the year ended September 30,
1998.)
Funding for the research project is expected to continue during
1999 and animal testing could indicate the possibility of commercial value of
the technology during this period. The Registrant anticipates that
considerable time will be required to obtain necessary approvals for human
testing, if commercial value is demonstrated. Also, there is no assurance that
competing firms, active in the medical device area, will not develop similar or
superior technology during the period in which the Registrant is performing
its testing.
During the three months and six months ended March 31,
<PAGE>
HOLOBEAM, INC.
Form 10Q
Management's Discussion and Analysis of Financial Condition
and Results of Operations
March 31, 1999
1999, the Registrant's Working Capital remained above the
$320,000.00 level, although current accounts payable increased
from $6,832.00 at September 30, 1998 to
$169,116.00 at March 31, 1999. Such increase is attributable to
Real Estate rental fees received in advance of the April 1, 1999
due date and reclassified to Accounts Payable.
Continued funding of the surgical staples project and
defined benefit plan is not expected to have any materially
adverse effect upon the Registrant's financial condition.
(2) Material Changes in the Results of Operations
Results of operations for the three months and six
months ended March 31, 1999 indicate after tax income of
$44,171.00 and $106,635.00, respectively, as compared to
$76,020.00 and $166,877.00 for the same periods in the
previous accounting year.
Revenues in connection with the Registrant's real
estate rental activities increased from $944,958.00 in 1998
to $960,708.00 for 1999 as a result of incremental rents
associated with cost of living clauses contained in the
operating leases.
General and administrative expenses increased
$75,396.00 and $150,799.00, respectively when compared to
the same
<PAGE>
HOLOBEAM, INC.
Form 10Q
Management's Discussion and Analysis of Financial Condition
and Results of Operations
March 31, 1999
periods in 1998. These increases are directly attributable to
the cost of funding of the Registrant's defined benefit pension
plan and are expected to continue through 1999.
The Registrant also expects to continue to support the
research efforts associated with the surgical staple project
through the balance of fiscal year 1999. Total expenditures
for 1999 are expected to approximate $300,000.00.
<PAGE>
HOLOBEAM, INC.
Signatures
Form 10Q
March 31, 1999
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 14, 1999
Holobeam, Inc.
Registrant
William M. Hackett
Treasurer and Director
<PAGE>
Exhibit A
HOLOBEAM, INC.
Computation of Earnings Per Common Share
Form 10Q
March 31, 1999
Six Months Ended
March 31
1999 1998
PRIMARY
Net Income (Loss) $ 44,171 $166,877
SHARES
Weighted Average Number of Common
Shares of Outstanding 298,742 305,742
Primary Earnings Per Share $0.36 $0.55
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1999
<PERIOD-END> MAR-31-1999
<CASH> 895,428
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 900,037
<PP&E> 7,501,587
<DEPRECIATION> 1,672,226
<TOTAL-ASSETS> 7,293,462
<CURRENT-LIABILITIES> 572,642
<BONDS> 0
0
0
<COMMON> 30,559
<OTHER-SE> 862,190
<TOTAL-LIABILITY-AND-EQUITY> 7,293,462
<SALES> 0
<TOTAL-REVENUES> 976,516
<CGS> 0
<TOTAL-COSTS> 211,906
<OTHER-EXPENSES> 312,797
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 274,263
<INCOME-PRETAX> 177,550
<INCOME-TAX> 70,915
<INCOME-CONTINUING> 106,635
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 106,635
<EPS-PRIMARY> .36
<EPS-DILUTED> .36
</TABLE>
