10-Q 1 holodec0510q.txt DEC. 2005 10Q 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: December 31, 2005 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 07423-0287 ----------------------------------------------------------------- (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. 269,784 Common Shares at February 9, 2006 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, 6 PART II Signatures 7 Certifications 8, 9, 10 Computation of Earnings Per Common Share Exhibit A Section 906 Certifications Exhibit B PART I HOLOBEAM, INC. Condensed Balance Sheets ASSETS Dec. 31, 2005 Sept. 30, 2005 ------------- -------------- Current Assets Cash and Cash Equivalents $ 981,720 $ 519,847 Trading Assets 87,140 302,520 Prepaid Pension Costs 118,461 118,461 Other Current Assets 4,942 6,910 ---------- ---------- Total Current Assets 1,192,263 947,738 Investments in Real Estate, Net 4,437,709 4,487,699 Machinery & Equipment, Net 19,429 22,996 Unbilled Accounts Receivable 841,519 884,378 Other Non-Current Assets 212,044 222,294 ---------- ---------- Total Assets $6,702,964 $6,565,105 ========== ========== LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Accounts Payable $ 115,997 $ 2,045 Accrued Expenses 55,529 71,114 Income Taxes Payable 97,040 4,840 Deferred Income Taxes 47,384 47,384 Current Portion of Mortgage Payable 550,010 538,144 ---------- ---------- Total Current Liabilities 865,960 663,527 Mortgage Payable, Net of Current Portion 2,885,937 3,028,031 Deferred Income Taxes 336,608 353,751 ---------- ---------- Total Liabilities 4,088,505 4,045,309 ---------- ---------- Shareholders' Equity Common Stock 27,021 27,021 Paid-In-Capital 9,110,968 9,110,968 Accumulated Deficit ( 6,510,117) ( 6,604,780) Treasury Stock, At Cost ( 13,413) (13,413) ---------- ---------- Shareholders' Equity 2,614,459 2,519,796 ---------- ---------- Total Liabilities and Shareholders Equity $6,702,964 $6,565,105 ========== ========== 1 HOLOBEAM, INC. Condensed Statement of Income 3 Months Ended December 31 2005 2004 Revenue Rental Income $504,475 $504,475 Interest Income 5,374 1,445 Gains on Securities 43,202 -0- ------- -------- Total Revenue 553,051 505,920 ------- ------- Costs and Expenses Rental Expenses 63,865 56,564 General and Administrative Expenses 242,020 296,430 Research and Development -0- -0- Interest 77,407 88,422 Other 41 51 -------- -------- Total Costs and Expenses 383,333 441,467 -------- -------- Income Before Income Taxes 169,718 64,453 Income Tax Expense 75,056 25,750 ------- ------- Net Income $ 94,662 $ 38,703 ======== ======== Weighted Average Number of Common Shares Outstanding 269,784 270,513 Net Income Per Share $0.35 $0.14 ----- ----- 2 HOLOBEAM, INC. Condensed Statements of Cash Flows Increase (Decrease) in Cash and Cash Equivalents 3 Months 3 Months 12 Months Ended Ended Ended 12/31/05 12/31/04 9/30/05 -------- -------- ------- CASH FLOWS FROM OPERATING ACTIVITIES Net Income, (Loss) $ 94,662 $ 38,703 $ 547,698 ---------- ---------- --------- Adjustments to Reconcile Net Income to Net Cash Provided By Operating Activities: Depreciation 53,557 55,115 220,505 Amortization 10,250 13,500 41,110 Purchases of Trading Assets (462,275) -0- (286,820) Sales of Trading Assets 720,857 -0- -0- Gains on Trading Assets (43,202) -0- (15,700) Decrease, (Increase) In: Patent and Patent Application Costs -0- -0- -0- Accounts Receivable -0- -0- 18 Unbilled Rents Receivable 42,859 42,860 171,440 Prepaid Income Taxes - 3,522 7,698 Increase, (Decrease) In Accounts Payable and Accrued Expenses 98,367 (75,276) (161,566) Other 77,026 (1,000) (388,916) ---------- ------- -------- Total Adjustments 497,439 38,721 (412,231) ---------- ---------- --------- Net Cash Provided (Used) by Operating Activities 592,101 77,424 135,467 ---------- ---------- --------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital Expenditures -0- -0- -0- Purchase of Short Term Investments -0- -0- -0- Sale of Short Term Investments -0- -0- -0- ---------- ---------- --------- Net Cash Flow from Investing Activities -0- -0- -0- ---------- ---------- --------- CASH FLOW FROM FINANCING ACTIVITIES: Principal Payments on First Mortgage (130,228) (119,291) (493,178) Purchase of Treasury Stock -0- (27,000) (40,413) Other -0- -0- -0- ---------- ---------- ---------- Net Cash Flow Provided (Used) by Financing Activities (130,228) (146,291) (533,591) ---------- --------- --------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 461,873 (68,867) (398,124) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 519,847 917,971 917,971 ---------- ---------- ---------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 981,720 $ 849,104 $ 519,847 ========= ========= ========= 3 HOLOBEAM, INC. Notes to Condensed Financial Statements Form 10Q December 31, 2005 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 December 31, 2005 and 2004 and the results of operations for the three months then ended and the statement of cash flows for the three months ended December 31, 2005. 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 ended December 31, 2005 are not necessarily indicative of the results to be expected for a full year. 4 HOLOBEAM, INC. Form 10Q Management's Discussion and Analysis of Financial Condition and Results of Operations December 31, 2005 (1) Material Changes in Financial Condition Cash flows from operating activities for the three months ended December 31, 2005 were $592,101.00, up $514,677.00 when compared to the three months ended December 31, 2004. The increase resulted principally from increases in trading asset activity and an increase in accounts payable and accrued expenses amounting to $98,367.00. Working capital at December 31, 2005 was $326,303.00, up $42,092.00 from that reported at September 30, 2005 and up $385,950.00 when compared to the working capital at December 31, 2004. As previously reported, the Registrant intends to identify opportunities for real estate development and rental in the geographical vicinity of the Registrant's existing rental properties in Bergen County, New Jersey. In addition, the Registrant intends to investigate processes for improving the sites presently owned by the Registrant for purposes of attracting suitable tenants when the existing operating leases expire in 2009 and 2012. At the present time, no specific opportunities have been identified and the Registrant intends to continue to search for appropriate properties and improvement processes. If the Registrant identifies suitable opportunities, it is the intention of the Registrant to fund the projects with the 5 HOLOBEAM, INC. Form 10Q Management's Discussion and Analysis of Financial Condition and Results of Operations December 31, 2005 equity valuations contained in the existing rental properties. Funding of any such project is not expected to have a materially adverse effect upon the Registrant's financial condition. (2) Material Changes in the Results of Operations During the quarter ended December 31, 2005, the Registrant recorded after-tax income of $94,662.00, up $55,959.00 when compared to the results of operations for the three months ended December 31, 2004. The increase in income results principally from gains on trading asset activity and decreases in general and administrative expenses which are normal, recurring and incidental to the Registrant's operations. During the three months ended December 31, 2005, the Registrant contributed $68,228.00 to the Registrant's defined benefit pension plan. The contributions are charged to operations and included in the administrative expenses on the Condensed Statement of Income. The Registrant expects to continue funding the plan in subsequent periods and anticipates no materially adverse effect upon the Registrant's financial condition. 6 PART II HOLOBEAM, INC. Signatures Form 10Q December 31, 2005 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 Melvin S. Cook ------------------- Date February 13, 2006 -------------------- 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: February 13, 2006 --------------------------------------- By: Beverly Cook ----------------------------------------- Beverly Cook Director and Treasurer Date: February 13, 2006 --------------------------------------- By: Beverly Cook ----------------------------------------- Beverly Cook Director and Secretary Date: February 13, 2006 --------------------------------------- 7 CERTIFICATIONS (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, 2005 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, 2005, including corrective actions with regard to significant deficiencies and material weaknesses. As of December 31, 2005, the examination of controls and procedures did not disclose any significant deficiencies or material weaknesses. I, Beverly Cook, 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 8 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: February 13, 2006 -------------------- Beverly Cook, Treasurer ----------------------- Beverly Cook 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 9 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 10 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: February 13, 2006 -------------------- Melvin S. Cook, President ------------------------- Melvin S. Cook President 11 Exhibit A HOLOBEAM, INC. Statement of Computation of Per Common Share Earnings Form 10Q DECEMBER 31, 2005 Three Months Ended December 31, ------------------ 2005 2004 ------ ------ PRIMARY Net Income $ 94,662 $ 38,703 SHARES Weighted Average Number of Common Shares of Outstanding 269,784 270,513 Earnings Per Share $0.35 $0.14