FORM 10 K/A NO. 2
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (D) OF
THE SECURITIES EXCHANGE ACT OF 1934
(Exact name of registrant as specified in its charter)
Delaware 22-1840647 --------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 217 First Street, P.O. Box 287, Ho-Ho-Kus, NJ 07423-0287 --------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) |
Securities registered pursuant to Section 12(b) of the Act:
Name of exchange on which
Title of each class registered
------------------- ----------
Common Stock, Par Value $0.10 per share Over the
Counter
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Securities registered pursuant to Section 12(g) of the Act:
Indicate by check mark whether the Registrant (1)
has filed all reports required to be filed by Section 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
State the aggregate market value of the voting stock
held by non-affiliates of the Registrant. The aggregated
market value shall be computed by references to the price at
which the stock sold, or the average bid and asked prices of
such stock, as of a specified date within 60 days prior to
date of filing. $10,521,576. at December 8, 2005 computed on
the average of the bid and asked prices for Holobeam, Inc.
Common shares at December 8, 2005.
Indicate the number of shares outstanding of each of the Registrant's classes of common stock, as of the latest practicable date. 269,784 Shares at December 20, 2005.
DOCUMENTS INCORPORATED BY REFERENCE.
1. Annual Report Form 10K for the year ended September
30, 1994.
2. Financial Statements for the year ended September
30, 1995.
3. Financial Statements for the years ended September 30,
1990 and 1989.
4. Annual Report Form 10K for the years ended September
30, 1996 and 1997.
5. Holobeam, Inc. Defined Benefit Plan.
6. Financial Statements for the years ended September
30, 1998 and 1999.
7. Financial Statements for the years ended September
30, 2000 and 1999.
8. Financial Statements for the years ended September
30, 2001 and 2002.
9. Financial Statements for the years ended September
30, 2002 and 2003.
10. Annual Reports on Form 10K for the years ended
September 30, 1998, 1999, 2000, 2001 and 2002.
11. Quarterly Reports on Form 10Q for the Quarter Ended
June 30, 2003.
12. Financial Statements for the Years Ended September
30, 2004 and 2003.
13. Financial Statements for the Years Ended September
30, 2005 and 2004.
Holobeam, Inc.
Form 10-K/A NO. 2
Year Ended September 30, 2005
Table of Contents
Part I Page
------ ----
Item 1. Business 4
Item 2. Properties 8
Item 3. Legal Proceedings 11
Item 4. Submission of Matters to a Vote of Security
Holders 11
Part II
-------
Item 5. Market for the Registrant's Common Equity,Related
Stockholder Matters and Issuer Purchases of
Equity Securities 12
Item 6. Selected Financial Data 13
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations 14
Item 7A. Quantitative and Qualitative Disclosures About
Market Risk 22
Item 8. Financial Statements and Supplementary Data 22
Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure 47
Item 9A. Controls and Procedures 47
Item 9B. Other Information 48
Part III
--------
Item 10. Directors and Officers of the Registrant 49
Item 11. Management Compensation 51
Item 12. Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters 53
Item 13. Certain Relationships and Related Transactions 53
Item 14. Principal Accountant Fees and Services 53
Part IV
-------
Item 15. Exhibits, Financial Statements, Schedules and
Reports on Form 8-K 55
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EXPLANATORY NOTE
This amendment No. 2 on Form 10-K/A to the
Registrant's Annual Report on Form 10-K for the year ended
September 30, 2005, initially filed with the Securities and
Exchange Commission on December 29, 2005, is being filed to
reflect restatements of our balance sheet at September 30,
2005 and statement of operations for the year ended
September 30, 2005, and the notes related thereto. See
detail discussion of the restatement in Item 8, note 4 to
our financial statements.
On July 6, 2006, the Registrant's management and Audit
Committee of the Board of Directors concluded to restate
previously issued financial statements for the fiscal year
ended September 30, 2005. The Registrant arrived at this
conclusion during the course of responding to inquiries
arising from comments from the Securities and Exchange
Commission.
The restatement pertains to incorrectly reporting the
provision for income taxes in the amount of $66,913.
This Amendment No. 2 amends and restates Items 6, 7, 8
of Part II of the Original Filing. Other than these items,
no other information of the Original Filing is amended
hereby. The foregoing items have been amended to reflect
the effects of the restatement and, unless otherwise
indicated, have not been updated to reflect other events
occurring after the filing of the Original Filing or to
modify or update those disclosures affected by subsequent
events.
3.1
The Registrant has filed several patent applications and has
several patents issued in connection with medical staples for
use in internal surgery.
These applications and patents are as follows:
No. Serial No. Title of Invention Issue Date --- ---------- ------------------ ---------- 1. PCT/US94/02227 Staples 03/01/94 2. 08/512,766 Staples 08/09/95 3. 08/228,058 Staples 08/29/95 |
4. Canadian Pat. No. 2,155,750 Improved Staples (PCT NAT) 08/18/98
5. European Pat. 94910801.3 Staples 03/01/94 6. Australian Pat. 63568/94 Improved Staples 09/15/94 7. Japanese Pat. 6-520120 Staples 03/01/94 8. Brazilian Pat. PCT/US94/02227 Staples 03/01/94 9. 08/502,988 Staple Overlap 08/18/95 10. 07/753,116 Surgical Stapling Method 01/19/93 11. 07/934,858 Surgical Stapling Method 11/23/93 12. 08/024,501 Staples 08/30/94 13. US Pat. #5,445,648 Staples 08/29/95 14. US Pat. #5,342,396 Staples 08/30/94 15. US Pat. #5,263,973 Surgical Stapling Method 11/23/93 16. US Pat. #5,667,527 Staples 09/16/97 17. US Pat. #5,749,896 Staple Overlap 05/12/98 18. Japanese Pat. #2672713 Improved Staples 07/11/97 19. Brazilian Pat. #9405840-7 Improved Staples 09/01/95 20. US Pat. #6,083,242 Improved Staples 07/04/00 21. Australian Pat. #704533 Improved Staples 08/05/99 |
During 2003 the Registrant's research activities in
connection with the surgical staples was terminated. As a
result, the unamortized portion of the Patents and Patent
Applications costs associated with the surgical staple project
were written off and charged to operations. Such write-off
amounted to $60,052.
(v) Non-seasonal Business.
The Registrant does not believe that its products are
subject to material seasonal changes.
(vi) Working Capital.
Not relevant.
(vii) Customers.
Not relevant.
(viii) Backlog.
Not relevant.
(ix) Governmental Contracts. Not relevant.
(x) Competition.
During 2003 the Registrant discontinued its activities with
respect to medical staples and their application. Results of
the final phase of tests did not indicate sufficient commercial
feasibility for the technology developed by the Registrant and
funding of engineering and research was terminated.
Competition in the real estate office rental segment of the
Registrant's business activities was significant in the Bergen
County, New Jersey market in which the Registrant competes
during the period when the Registrant was seeking suitable
tenants for its rental properties.
The obsolete style of the building owned by the Registrant
prior to and during 1991 made the attraction of suitable tenants
difficult.
In an effort to increase the marketability of the
Registrant's properties, the Registrant applied to the Borough
of Paramus for a zoning change to allow retail use for the
office building and for the adjacent site.
In December 1991, the necessary change in zoning was
approved. The then existing building was rented to The Sports
Authority, Inc., a retailer of sporting goods. This building
was substantially renovated by The Sports Authority, Inc. and
Holobeam reimbursed them for their costs in connection with
this renovation.
During 1994, a 31,000 sq. ft. building was constructed on
the Registrant's site located adjacent to the building leased to
The Sports Authority, Inc. for
use as a Computer City retail store. Tandy Corp.,
parent corporation of Computer City, commenced paying
rent in October 1994. Holobeam reimbursed
Tandy Corporation $1,189,675 as an allowance for costs of
constructing the building and paving of the site, after a
permanent Certificate of Occupancy was obtained. During 1998,
Computer City Retail Stores were acquired by Comp USA. On
January 23, 2000, Comp USA entered into a merger agreement with
Grupo Sanborns, S.A. de C.V. and TPC Acquisition Corp., a
subsidiary of Grupo Sanborns, S.A. de C.V. Tandy Corp. remains
on the lease as guarantor.
(xi) Research and Development.
The Registrant has engaged in the development of various
technical products. The Registrant has investigated methods for
applying surgical staples and the technology presently used to
fabricate and apply such staples. During 2005, 2004 and 2003,
the Registrant expended $-0-, $-0- and $172,746, respectively,
in connection with the furtherance of this activity. Such costs
were expensed to operations and consist principally of
materials, supplies and costs associated with design and devel-
opment. During 2003 the Registrant terminated funding for the
surgical staples project. (Reference is made to Form 10Q,
Management's Discussion and Analysis of Financial Conditions and
Results of Operations for the Quarter Ended June 30, 2003.)
(xii) Environmental Compliances.
The Registrant does not believe that compliance with
Federal, State or Local provisions of a governmental nature
which have been enacted or adopted regulating the discharge of
material into the environment will have a materially adverse
effect upon the capital expenditure requirements, earnings or
competitive position of the Registrant.
The Registrant's activities with regard to medical staple
technology were limited to engineering, development and animal
testing of medical staple design with fabrication and
manufacturing of prototypes and models sub-contracted to
other firms.
The Registrant is not aware of any potential liabilities or
costs associated with the disposal or handling of waste
materials and is not aware of any potential violations of local,
state or federal laws which regulate the
Building Building
Paramus, NJ Paramus, NJ
Year Acquired 1971 1994
Gross Square Footage 62,000 31,000
Percent Leased at 09/30/05 100% 100%
Acquisition Cost $ 718,881 $2,592,513 (2)
Capital Improvements Since
Acquisition $3,649,850 (1) -0-
Total Investment $4,587,133 (3) $2,826,843 (4)
Mortgage Balance $3,566,175 $ -0-
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(1) Includes $3,567,267. of improvements to the building repaid to The Sports Authority, Inc.(the Tenant) upon closing of the Mortgage, but does not include additional amounts expended by The Sports Authority, Inc. since said closing.
(2) Includes construction allowance of $1,189,675. for Tandy Corporation pursuant to the Operating Lease Agreement. (Now Comp USA.)
(3) Includes land cost of $218,402 for the 62,000 sq. ft. building.
(4) Includes land cost of $234,370 for the 31,000 sq. ft. building.
In 1983, the Registrant purchased 2.799 acres of land
located in Paramus, New Jersey and adjacent to the building
owned by the Registrant at 50 A&S Drive. The purchase price was
$173,565 which was paid in cash. Since 1983, the Registrant
incurred costs in the amount of $60,805 for various improvements
and architectural work relating to development of this property.
During 1992, 1991 and 1990, the Registrant spent $293,784, $78,051
and $50,667 respectively in connection with an application
for a use variance for the site and various site improvements
that would enable the construction of a commercial or retail
building on the site. The change in zoning to retail use was
approved by the Borough of Paramus in December 1991. The change
in zoning to allow retail use also required new site plan
approval because the change in use required parking lot
re-design and significant additional changes in
order to comply with governmental requirements.
In addition, the Registrant expended $964,505 through
September 30, 1994 for site plan approval and changes, and
toward construction of a building on the
site. No depreciation or amortization was
recorded until the building and site were put into service.
During October 1994, construction was completed by Tandy
Corporation of a retail building on the Registrant's site. The
building is now being used for a CompUSA retail store.
(Reference is made to Note 13 to the Registrant's 1994 Financial
Statements and to Item 1, Part X of the 1994 Annual Report on
Form 10K.)
The zoning change approval allowed for retail use of the
property and significantly enhanced the
opportunities for attracting suitable tenants for the site.
When purchased, the site adjacent to the building owned
by the Registrant, required site engineering
and costs to acquire site plan approval for a building
from the appropriate governmental regulatory
authorities.
In addition, the Registrant expended funds during
its efforts to change the zoning of the property
from office use to retail use. This change in zoning
allowed the Registrant to seek tenants engaged in retail
operations and resulted in the October 1994 tenancy of
Computer City. (Reference is made to Note 12
of the Financial Statements for the year ended September 30, 1997.)
The Registrant was not able to lease the property since
the original site plan allowing office use was
not approved for retail use until the Computer City
occupancy of October 1994. The market for office
space had seen significant decline during 1990, 1991, 1992,
1993 and 1994.
The occupancy rate for the building owned by the
Registrant and under lease to The Sports
Authority Inc. for the past five (5) years is as follows:
2005 100%
2004 100%
2003 100%
2002 100%
2001 100%
The building owned by the Registrant and under lease to Tandy Corp. (now occupied by CompUSA) has been 100% occupied since October 1994. A summary of the amounts expended for such approvals for the three most recent fiscal years during which such expenditures were made appears below. No such expenditures were made in 1996, 1997, 1998, 1999, 2000, 2001, 2002, 2003, 2004 or 2005.
1994 1993 1992
Zoning Changes and Site Plan Approvals:
Legal Fees $ 2,859 $ 10,093 $ 15,840
Governmental Fees 11,827 55,811 19,990
Engineering 11,049 39,171 57,954
Paramus Park -0- -0- 200,000
------- ------ -------
Total Related Costs $25,735 $105,075 $293,784
======= ======== ========
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The payment of $200,000 during 1992 to Paramus Park was
a one-time fee in connection with removal of an existing deed
restriction which prohibited adjacent retail activity. The
balance of the payments for site plan approvals were paid
to various engineering, legal and surveying firms in connection
with professional services rendered to obtain governmental approvals.
No payments to affiliated parties were made in connection
with the zoning changes nor were any payments made to affiliated
or related parties for the acquisition of site plan approval.
During 1998, Computer City, Inc. retail stores were acquired
by CompUSA, Inc., another retailer of computers, computer
accessories and software. The Registrant accepted assignment of
the Computer City lease by CompUSA and Tandy Corporation remains
on the lease as the guarantor.
PART II
(d) Changes in Securities.
(Reference is made for Form 10Q for the six-month period ended
March 31, 1984, wherein the Registrant completed an exchange of
common stock for 5% Debentures payable March 1, 1989.
Reference is made to Notes 9 and 10 to the Financial Statements
for the years ended September 30, 1989 and 1990.)
The high and low bid information of the Registrant's common
stock for the last two years was estimated to be as follows:
(Source: Over the Counter Bulletin Board [OTCBB]).
2005 2004
high low high low
Quarter Ended Dec. 31 30.00 26.85 25.00 23.00
Quarter Ended Mar. 31 36.25 30.00 30.00 22.50
Quarter Ended June 30 41.00 35.05 40.00 33.00
Quarter Ended Sept. 30 42.00 36.00 27.00 26.50
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Such quotation represents prices offered by purchases
without retail mark-up, mark-down or
commission and may not represent actual sales transactions.
HOLOBEAM, INC.
SUMMARY OF SELECTED FINANCIAL DATA
FOR THE YEARS ENDED SEPTEMBER 30,
RESTATED RESTATED
-------- --------
2005 2004 2003 2002 2001
---- ---- ---- ---- ----
Gross Income $2,079,097 $2,058,348 $2,086,635 $2,071,508 $2,105,020
Net Income (Loss) 480,785 184,936 204,370 166,399 168,830
Weighted Average
Number
of Common Shares
Outstanding 270,006 271,873 275,642 287,518 290,960
Earnings Per
Share (Loss) 1.78 0.68 0.74 0.58 0.58
Total Assets 6,546,783 7,047,026 7,369,492 7,637,822 7,931,825
Long-Term Debt 3,632,129 4,294,560 4,901,755 4,511,321 4,925,540
Shareholders'
Equity 2,231,598 1,917,680 1,796,679 1,952,727 1,905,433
Gross Rental
Income 2,053,703 2,053,703 2,053,703 2,053,703 2,053,703
Net Rental Income 1,810,557 1,793,610 1,798,151 1,795,141 1,794,699
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ended September 30, 2005 and Notes 4 and 12 for the year
ended September 30, 2004.) There were no expenditures
made in connection with the surgical staples
technology during 2004. The research and development
activities associated with the project were
discontinued because the final phase of testing did
not indicate sufficient commercial value for the
Registrant to continue its financial support.
During 2005 the Registrant contributed $340,817.
to its defined benefit pension plan. The contribution
is charged to operations during each quarter of the
Registrant's fiscal year in amounts sufficient to
fully provide for all eligible employees' benefits by
the time they retire. An additional minimum liability
has been recognized as unfunded accrued pension cost
of $126,454., net of tax and is shown in the statement
of changes in stockholders' equity under other
comprehensive loss for a total accumulated other
comprehensive loss of $221,285. The Registrant
expects to continue funding the plan in 2006 and
expects no materially adverse effect upon its
financial condition. (Reference is made to Notes 13
and 14 of the accompanying financial statements for
the years ended September 30, 2005 and Note 14 for the
year ended September 30, 2004.)
At the present time the Registrant's rental
properties, located at 50 A&S Drive, Paramus, New
Jersey do not require renovation or refurbishment and
none are planned for 2006. The tenants are
responsible for real estate taxes, maintenance
expenses and insurance costs. The Registrant's
projected costs and expenses associated with these
properties is limited to depreciation and costs that
are routine, normal and incidental to its real estate
rental activities.
The Registrant has investigated potential sites
in the Bergen County, New Jersey area where it
conducts its present real estate rental activities.
It is the intention of the Registrant to locate and
develop suitable properties in the area of Bergen
County, New Jersey.
During meetings with local real estate brokers
planning for the future leasing situation, the lack of
direct access to New Jersey Route 17 could be a
serious detriment to the Registrant's ability to
attract suitable replacement tenants when the lease
terms expire.
A Shell Oil Co. gasoline station presently blocks
such direct access to the highway and there was some
possibility that the owner might sell the property.
Discussions have terminated.
Any purchase of new properties is not expected to
have a materially adverse effect upon the Registrant's
capital resources or financial condition.
Revenues for the year were $2,058,348., down
$28,287. from 2003. The decrease results principally
from reduced interest income during 2004 ($12,574.)
and reduced gains on sales of short-term investments
($13,630.).
Total costs and expenses for the fiscal year
ended September 30, 2004 were $1,708,489. as compared
to $1,673,465. for the year ended 2003. The increased
costs resulted from increases in expenses that are
normal, routine and incidental to the Registrant's
administrative and real estate rental activities.
During 2001 the Registrant adopted FASB 13
Accounting for leases. The effect of FASB 13 is to
apportion escalation rental income contained in the
operating leases in equal annual adjustments over the
remaining terms of the leases. The Registrant's
Statement of Operations for the year ended September
2000 has been restated to reflect this change.
(Reference is made to Note 16 to the Registrant's
financial statements for the years ended September 30,
2002 and 2001.)
The Registrant's rental properties had occupancy
rates of 100% during 2004 and 2003 and such rates are
expected to continue through 2009 when the CompUSA
lease expires. Rental expenses for which the
Registrant is responsible are expected to increase at
or below the inflation rate for the geographical area
in which the Registrant conducts its real estate
rental activities.
These inflationary increases are not expected to
adversely effect the Registrant's results of
operations or financial condition.
(c) The Registrant recorded after-tax income of
$275,642. for the fiscal year ended September 30, 2003
which represents an increase of $37,971. when compared
to the results of operations for the fiscal year ended
September 30, 2002. Earnings per weighted average
number of common shares outstanding were $0.74 and
$0.58, respectively.
Revenues for the period were $2,026,583., down
$44,925. when compared to the total revenues recorded
in 2002. The net decrease
resulted principally from the write-off of the
unamortized costs of patents as a result of the
Registrant discontinuing activities associated with
the surgical staples project. The abandonment of
patents in connection with the surgical staples
resulted in a charge to revenues in the amount of
$60,052.
Total costs and expenses for the fiscal year
ended September 30, 2003 were $1,673,405., down
$146,506. from the $1,819,911. recorded in 2002. The
reduced costs and expenses result from lower costs
associated with the Registrant's surgical staple
projects as activities were concluding during the
third and fourth quarter of the year; reduced interest
expense in connection with the Registrant's mortgage
as the loan matures; and lower costs associated with
the General and Administrative expenses.
During 2001 the Registrant adopted FASB 13,
accounting for leases. The effect of FASB 13 is to
apportion escalation rental income contained in the
operating leases in equal annual adjustments over the
remaining terms of the leases. The Registrant's
Statement of Operations for the years ended September
30, 2000 and 1999 have been restated to reflect this
change. (Reference is made to Note 16 to the
accompanying financial statements for the years ended
September 30, 2002 and 2001.)
The Registrant's rental properties had occupancy
rates of 100% during 2003 and 2002 and such rates are
expected to continue through 2009 when the CompUSA
lease expires. Rental expenses for which the
Registrant is responsible are expected to increase at
or below the inflation rate for the geographical area
in which the Registrant conducts its real estate
rental activities.
These inflationary increases are not expected to
have a materially adverse effect upon the Registrant's
results of operations or its financial condition.
The Registrant has no off-balance sheet
contractual obligations or arrangements.
(d) After-tax earnings for the year ended September 30, 2002 were $166,399., representing a decrease of $2,431. when compared to the results of operations for the previous year. Earnings per share were $0.58 for 2002 and 2001. Revenues decreased $33,512. to $2,071.508. when compared to 2001. Such decrease resulted from lower interest income received on the Registrant's money market fund investments during 2002. Total costs and expenses increased from $1,805,735. in 2001 to $1,819,911. in 2002, reflecting increases in costs incidental and necessary for the Registrant's administrative business activities. During 2001 the Registrant adopted FASB 13, Accounting for Leases. The effect of FASB 13 is to apportion escalation rental income contained on the operating leases in equal annual adjustments over the remaining terms of the operating leases. The Registrant's Statements of Operations for the years ended September 30, 2000, 1999 and 1998 have been restated to reflect this change. (Reference is made to Note 16 to the accompanying financial statements for the years ended September 30, 2002 and 2001.) Funding for the Registrant's surgical staple project was $214,031. for the year ended September 30, 2002 as compared to $183,089. for the twelve months ended September 30, 2001. The expenses represent costs associated with the engineering, research and development of the surgical staples and their application. During 2002 the project entered into a final phase of tests that ultimately determined the project's commercial feasibility and definitive tests were published during 2003. There was no decision regarding additional funding beyond 2003 until such results were published. The continued funding of the project did not have any materially adverse effect. Revenues associated with the Registrant's real estate rental activities were $2,053,703. for the year ended September 30, 2002 and 2001 and are expected to continue at the same rate until the leases expire in
2009 and 2012.
The properties have had occupancy rates of 100%
during 2002 and 2001 and are expected to continue
until 2009 when the CompUSA lease expires. Rental
expenses were $258,572. for 2002 and are expected to
increase at or below the current inflation rate for
the geographical area in which the Registrant conducts
its activities. Any such increases are not expected
to have any materially adverse effect upon the
Registrant's financial condition.
Holobeam, Inc.
Contractual Obligations
September 30, 2005
Oct. Oct. Oct. Oct. Oct.
2005 2006 2007 2008 2009
to to to to to
Contractual Sept. Sept. Sept. Sept. Sept.
Obligations Total 2006 2007 2008 2009 2010 Thereafter
--------- ------- ------- ------- ------- ------- ---------
Mortgage Loans
on Real
Estate $3,566,176 $538,140 $587,197 $640,727 $699,136 $762,870 $ 338,106
Capital Lease
Obligations -0- -0- -0- -0- -0- -0- -0-
Operating Lease
Obligations -0- -0- -0- -0- -0- -0- -0-
Purchase
Obligations -0- -0- -0- -0- -0- -0- -0-
Other -0- -0- -0- -0- -0- -0- -0-
--------- ------- ------- ------- ------- ------- ---------
$3,566,176 $538,140 $587,197 $640,727 $699,136 $762,870 $ 338,106
========= ======= ======= ======= ======= ======= =========
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HOLOBEAM, INC.
FINANCIAL STATEMENTS
WITH INDEPENDENT ACCOUNTANTS' REPORT
YEARS ENDED
SEPTEMBER 30, 2005, 2004 AND 2003
R.A. FREDERICKS & COMPANY, LLP
CERTIFIED PUBLIC ACCOUNTANTS
MANAGEMENT CONSULTANTS
HOLOBEAM, INC.
YEARS ENDED SEPTEMBER 30, 2005, 2004 AND 2003
CONTENTS
PAGE
INDEPENDENT ACCOUNTANTS' REPORT 25
FINANCIAL STATEMENTS:
BALANCE SHEETS 26-27
STATEMENTS OF OPERATIONS 28
STATEMENTS OF SHAREHOLDERS' EQUITY 29
STATEMENTS OF CASH FLOWS 30
NOTES TO FINANCIAL STATEMENTS 31-44
SCHEDULES FOR THE YEARS ENDED SEPTEMBER 30, 2005,
2004, AND 2003
XI REAL ESTATE AND ACCUMULATED DEPRECIATION 45
XII MORTGAGE LOANS ON REAL ESTATE 46
ALL OTHER SCHEDULES HAVE BEEN OMITTED BECAUSE THEY ARE NOT
APPLICABLE, OR THE INFORMATION IS SHOWN IN THE FINANCIAL
STATEMENTS OR NOTES THERETO.
24
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R.A. FREDERICKS & COMPANY, LLP
Certified Public Accountants
Ralph A. Fredericks, CPA
Ellen T. O'Donnell, CPA
Mary V. Fox, CPA, CFE (retired)
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INDEPENDENT ACCOUNTANTS' REPORT
To the Board of Directors and Shareholders'
Holobeam Inc.
Ho-Ho-Kus , New Jersey
We have audited the accompanying balance sheets of Holobeam, Inc. as of September 30, 2005 and 2004 and the related statements of operations, shareholders' equity, and cash flows for each of the years in the period ended September 30, 2005. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Holobeam, Inc. as of September 30, 2005 and 2004, and the results of its operations and its cash flows for each of the three years in the period ended September 30, 2005, in conformity with U. S. generally accepted accounting principles. Further, it is our opinion that the schedules referred to in the accompanying index present fairly the information set forth therein.
R.A. FREDERICKS & COMPANY, LLP
Montville, New Jersey
December 15, 2005
170 Changebridge Road Unit B-4, Montville, New Jersey 07045
Tel: (973) 575-6200 Fax: (973) 575-5444
Members of the Center for Public Company Audit Firms.
HOLOBEAM, INC.
BALANCE SHEETS
SEPTEMBER 30, 2005 AND 2004
ASSETS
Restated
2005 2004
----------- ---------
CURRENT ASSETS
Cash (including cash equivalents of $497,275
in 2005 and $613,404 in 2004) $ 519,847 $ 917,971
Trading Assets 302,520 -
Prepaid Expenses 6,910 7,697
Prepaid Income Taxes - 7,698
Other Receivables - 18
--------------- ---------
TOTAL CURRENT ASSETS 829,277 933,384
--------------- ---------
|
PROPERTY AND EQUIPMENT-COST
Real Estate:
Land 452,772 452,772
Buildings and Building Improvements 6,961,244 6,961,244
-------------- ----------
TOTAL 7,414,016 7,414,016
Machinery and Equipment 88,815 88,815
Furniture and Fixtures 33,468 33,468
-------------- ----------
TOTAL 7,536,299 7,536,299
Less: Accumulated Depreciation and Amortization 3,025,604 2,805,099
-------------- ----------
PROPERTY AND EQUIPMENT-NET 4,510,695 4,731,200
-------------- ----------
|
OTHER ASSETS
Deferred Charges 222,294 263,404
Deferred Income Taxes 100,139 63,220
Unbilled Rents Receivable 884,378 1,055,818
-------------- ----------
TOTAL OTHER ASSETS 1,206,811 1,382,442
-------------- ----------
TOTAL ASSETS $ 6,546,783 $ 7,047,026
========= =========
|
The accompanying notes are an integral part of the financial
statements.
HOLOBEAM, INC.
BALANCE SHEETS
SEPTEMBER 30, 2005 AND 2004
LIABILITIES AND SHAREHOLDERS' EQUITY
Restated
2005 2004
CURRENT LIABILITIES
Mortgage Payable-Current Portion $ 538,144 $ 493,177
Accounts Payable 2,045 6,934
Deferred Rent - 185,430
Other Accrued Expenses 45,093 50,165
Income Taxes Payable 71,753 69,460
Accrued Interest Payable 26,021 29,620
-------------- ----------
TOTAL CURRENT LIABILITIES 683,056 834,786
-------------- ----------
LONG-TERM LIABILITIES
Mortgage Payable (Net of Current Portion) 3,028,031 3,566,176
Accrued Pension 250,347 306,057
Deferred Income Taxes 353,751 422,327
-------------- ----------
TOTAL LONG-TERM LIABILITIES 3,632,129 4,294,560
-------------- ----------
TOTAL LIABILITIES 4,315,185 5,129,346
-------------- ----------
SHAREHOLDERS' EQUITY
Common Stock, Par Value $.10 Per Share
Authorized Shares 272,000 in 2005 and
2,000,000 in 2004, issued
270,209 in 2005 and 271,209 in 2004 27,021 27,121
Additional Paid in Capital 9,110,968 9,137,868
Accumulated Deficit (6,671,693) (7,152,478)
Other Comprehensive Income (221,285) (94,831)
-------------- ----------
2,245,011 1,917,680
Less: Cost of Shares in Treasury (425
in 2005 and 0 in 2004) (13,413) -
-------------- ----------
TOTAL SHAREHOLDERS' EQUITY 2,231,598 1,917,680
-------------- ----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 6,546,783 $7,047,026
========= =========
|
The accompanying notes are an integral part of the financial
statements.
HOLOBEAM, INC.
STATEMENTS OF OPERATIONS
YEARS ENDED SEPTEMBER 30, 2005, 2004 AND 2003
2005 2004 2003
REVENUES
Rental Income $ 2,053,703 $2,053,703 $2,053,703
Interest Income 9,694 4,645 17,219
Net Holding Gains 15,700 - -
Gain on Sale of Investments - - 13,630
Other Income - - 2,083
---------------- ------------- --------------
TOTAL 2,079,097 2,058,348 2,086,635
---------------- ------------- --------------
COSTS AND EXPENSES
Rental Expense 243,146 260,093 255,552
General Expense 785,206 1,069,407 828,081
Interest Expense 338,683 378,989 417,026
---------------- ------------- --------------
TOTAL 1,367,035 1,708,489 1,500,659
---------------- ------------- --------------
EARNINGS FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES 712,062 349,859 585,976
INCOME TAX EXPENSE 231,277 164,923 241,927
---------------- ------------- --------------
EARNINGS FROM CONTINUING OPERATIONS 480,785 184,936 344,049
---------------- ------------- --------------
DISCONTINUED OPERATIONS:
Operating Loss - - (172,746)
Loss on Disposition - - (60,052)
Tax Benefit - - 93,119
---------------- ------------- --------------
NET LOSS FROM DISCONTINUED OPERATIONS - - (139,679)
---------------- ------------- --------------
NET INCOME $ 480,785 $ 184,936 $ 204,370
---------------- ------------- --------------
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING 270,006 271,873 275,642
---------------- ------------- --------------
EARNINGS PER SHARE - CONTINUING $ 1.78 $ .68 $ 1.25
---------------- ------------- --------------
LOSS PER SHARE - DISCONTINUED $ - $ - $ (.51)
---------------- ------------- --------------
EARNINGS PER SHARE - NET INCOME $ 1.78 $ .68 $ .74
================ ============= ==============
|
The accompanying notes are an integral part of the financial
statements.
HOLOBEAM, INC.
STATEMENTS OF SHAREHOLDERS' EQUITY
YEARS ENDED SEPTEMBER 30, 2005, 2004 AND 2003
Accumulated
Additional Compre- Other
Common Stock Paid-In hensive Accumulated Comprehensive Treasury Stock
Shares Amount Capital Income Deficit Loss Shares Amount
----------- --------- -------- ------------ ------------- ------- ------
BALANCE, SEPTEMBER 30, 2002 287,697 $28,769 $9,540,472 $(7,541,784) $ - 3,300 $ 74,730
Net Income $204,370 204,370
Other Comprehensive Income:
Minimum pension liability
adjustment (106,243) (106,243)
-------
Other Comprehensive Income $98,127
=======
Purchase of Treasury Stock 9,982 254,175
Retirement of Treasury Stock (12,682) (1,267) (313,493) (12,682) (314,760)
--------- --------- ---------- ------------ -------- ------- ---------
BALANCE, SEPTEMBER 30, 2003 275,015 27,502 9,226,979 (7,337,414) (106,243) 600 14,145
Net Income $184,936 184,936
Other Comprehensive Income:
Minimum pension liability
adjustment 11,412 11,412
-------
Other Comprehensive Income $196,348
=======
Purchase of Treasury Stock 3,206 75,347
Retirement of Treasury Stock (3,806) (381) (89,111) (3,806) (89,492)
------- ------ --------- ---------- -------- ------- ------
BALANCE, SEPTEMBER 30, 2004 271,209 27,121 9,137,868 (7,152,478) (94,831) - -
Net Income $480,785 480,785
Other Comprehensive Income:
Minimum pension liability
adjustment (126,454) (126,454)
-------
Other Comprehensive Income $354,331
=======
Purchase of Treasury Stock 1,425 40,413
Retirement of Treasury Stock (1,000) (100) (26,900) (1,000) (27,000)
------ ----- -------- --------- --------- ------ -------
BALANCE, SEPTEMBER 30, 2005 270,209 $27,021 $9,100,968 $(6,671,693) $(221,285) 425 $13,413
======= ======= ========= ========= ========== ====== =======
|
The accompanying notes are an integral part of the financial statements.
HOLOBEAM, INC.
STATEMENTS OF CASH FLOWS
YEARS ENDED SEPTEMBER 30, 2005, 2004 AND 2003
2005 2004 2003
----------- ---------- -------
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $480,785 $184,936 $204,370
---------- -------- --------
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
Depreciation 220,505 220,366 219,866
Amortization 41,110 41,109 41,108
Pension Adjustment (126,454) 11,412 (106,243)
Patent and Patent Application Costs - - (3,524)
Purchases of Trading Assets (286,820) - -
Holding Gain on Trading Assets (15,700) - -
Gain on Sale of Investment - - (13,630)
Loss on Disposition of Discontinued Operations - - 60,052
Increase (Decrease) in:
Accounts Payable and Accrued Expenses (69,270) (84,561) 190,322
Deferred Income Taxes (105,495) (17,497) (95,934)
Deferred Rent (185,430) 125,055 60,375
Income Taxes Payable 2,293 (6,881) 76,341
Decrease (Increase) in:
Unbilled Rents Receivable 171,440 62,763 62,764
Accounts and Other Receivables 18 - 84
Prepaid Expenses 787 (1,306) (678)
Prepaid Income Taxes 7,698 (10) 41,094
------------ -------- ------
Total Adjustments (345,318) 350,450 531,997
------------ ------- --------
Net Cash Provided by Operating Activities 135,467 535,386 736,367
------------ -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Short-term Investments - - (290,779)
Capital Expenditures - (3,529) (4,214)
Sale of Short-Term Investments - - 304,409
------------ -------- --------
Net Cash Provided by (Used in)
Investing Activities - (3,529) 9,416
------------ -------- -------
CASH FLOWS FROM FINANCING ACTIVITIES
Principal Payments on First Mortgage (493,178) (451,975) (414,214)
Purchase of Treasury Stock (40,413) ( 75,347) (254,175)
------------ -------- --------
Net Cash Used in Financing Activities (533,591) (527,322) (668,389)
------------ -------- ---------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS (398,124) 4,535 77,394
CASH AND CASH EQUIVALENTS AT BEGINNING
OF YEAR 917,971 913,436 836,042
------------ -------- --------
CASH AND CASH EQUIVALENTS AT END OF YEAR $ 519,847 $ 917,971 $ 913,436
------------ -------- --------
|
SUPPLEMENTAL CASH FLOWS DISCLOSURES
Interest Paid $ 342,282 $ 382,287 $420,048
Income Taxes Paid $ 250,175 $196,909 $ 55,131
The accompanying notes are an integral part of the financial statements.
HOLOBEAM, INC.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2005, 2004 AND 2003
NOTE 1. SUMMARY OF MAJOR ACCOUNTING POLICIES
a. Description of Business
The Company is engaged primarily in the rental and development of real property located in New Jersey for retail use. During 2003, the Company terminated its activities in the development of surgical staples and the technology used to apply the staples for use in internal surgery. The Company has also engaged from time to time in the development of technical products.
b. Basis of Presentation
The financial statements are prepared in accordance with accounting principles generally accepted in the United States of America and include amounts based on management's prudent judgements and estimates. While actual results may differ from these estimates, management does not expect the differences, if any, to have a material effect on the financial statements.
c. Cash and Cash Equivalents
For purposes of reporting cash flows, all liquid investments with original maturities of three months or less are considered cash equivalents.
d. Property and Equipment
Depreciation is provided on a straight-line and accelerated basis in amounts sufficient to write- off the cost of the assets over their estimated useful lives, which are as follows:
Building and Building Improvements 31. 5 to 40 years Machinery and Equipment 5 to 7 years Furniture and Fixtures 7 to 10 years
Maintenance and repairs are charged to operations in the year in which incurred, while replacements and betterments are capitalized by charges to the appropriate asset accounts. The cost and accumulated depreciation and amortization with respect to assets retired or otherwise disposed, are eliminated from the assets and related accumulated depreciation and amortization accounts and any profit or loss resulting therefrom is reflected in operations.
Patent and patent application costs are amortized on a straight-line basis over a ten year period.
e. Earnings Per Share
Earnings per share of common stock has been computed by dividing net income by the weighted average number of common shares outstanding during the year. Diluted earnings per share of common stock is the same as earnings per share prior to dilution.
HOLOBEAM, INC.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2005, 2004 AND 2003
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
f. Capital Stock
Each share of common stock is entitled to one vote. No such shares of common stock were reserved at September 30, 2005, 2004, or 2003. On October 20, 2004, the Company amended its Certificate of Incorporation in order to reduce its authorized shares from 2,000,000 to 272,000. On October 5, 2004, the Company retired 1,000 shares of Treasury Stock purchased on October 1, 2004 at a cost of $27,000. Between May 10, 2004 and July 13, 2004, the Company retired 3,806 shares of Treasury Stock purchased during the years ended September 30, 2004 and 2003 at a cost of $89,492. On May 1, 2003, the Company retired 12,682 shares of Treasury Stock purchased between May 2002 and March 2003, at a cost of $314,760.
g. Income Taxes
The Company provides for federal and state income taxes on items included in the Statements of Operations regardless of the period when such taxes are payable. Deferred taxes are recognized for temporary differences between financial and income tax reporting based on enacted tax laws and rates.
h. Deferred Charges
It is the policy of the Company to charge costs associated with the acquisition of long term debt (mortgages) to expense over the term of the mortgage.
In addition, the Company charges costs associated with the procurement of operating leases, specifically real estate brokers commissions, to expense during the term of the operating lease.
i. Revenue Recognition
Base rental revenue is recognized on a straight- line basis over the terms of the respective leases. Unbilled rents receivable represents the amount by which straight-line rental revenue exceeds rents currently billed in accordance with the lease agreements.
j. Reclassifications
Earnings from discontinued operations were previously classified under earnings from continuing operations and have been reclassified within the Statement of Operations for the year ended September 30, 2003.
HOLOBEAM, INC.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2005, 2004 AND 2003
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
k. Investments
The Company accounts for marketable securities in accordance with the provisions of SFAS No. 115 "Accounting for Certain Investments in Debt and Equity Securities".
Trading assets are stated at fair value, with gains or losses resulting from changes in fair value recognized currently in earnings. The Company elects to classify its marketable equity securities as trading assets. Net holding gains on equity security trading assets were $15,700 in 2005 and $0 in 2004 and 2003.
Short-term investments have an original maturity of more than three months and a remaining maturity of less than 1 year. These investments consist of marketable debt securities which are stated at amortized cost as the Company has classified these securities as held-to-maturity.
NOTE 2. INCOME TAXES
2005 2004 2003
------- ------ ------
Current taxes:
Federal $ 197,046 $149,230 $131,321
State 55,422 40,799 42,593
-------- -------- --------
Total 252,468 190,029 173,914
-------- -------- --------
Deferred taxes:
Federal (18,012) (21,339) (21,340)
State (3,179) (3,767) (3,766)
------- ------- -------
Total (21,191) (25,106) (25,106)
------- ------- -------
Provision for
income taxes $231,277 $164,923 $148,808
======== ======== ========
|
The deferred tax assets and liabilities recorded on the balance sheet as of September 30, are as follows:
2005 2004 2003
-------- -------- --------
Deferred tax
assets:
Federal $85,118 $ 53,737 $ 60,204
State 15,021 9,483 10,624
-------- -------- --------
Total Assets $100,139 $ 63,220 $ 70,828
-------- -------- --------
Liabilities:
Federal $300,688 $358,978 $380,317
State 53,063 63,349 67,115
-------- -------- --------
Total Liabilities $353,751 $422,327 $447,432
-------- -------- --------
$253,612 $359,107 $376,604
======= ======= =======
33
|
HOLOBEAM, INC.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2005, 2004 AND 2003
NOTE 2. INCOME TAXES (continued)
The sources of deferred income taxes for the years ended
September 30, are as follows:
2005 2004 2003
------- -------- --------
Accrued Pension Costs $(250,347) $ (306,057) $ (394,977)
Unbilled Rents Receivable 884,379 1,055,817 1,118,581
-------- -------- --------
Total $ 634,032 $ 749,760 $ 723,604
======== ========= =========
|
The difference between the statutory federal income tax rate on income before income taxes and the Company's effective income tax rate is as follows:
2005 2004 2003
-------- -------- --------
Federal statutory income
tax rate 34% 34% 34%
State tax provisions, net
of federal benefits 6 6 6
Deferred tax adjustment
on prior accrued pension ( 8) - -
Other - 7 2
-------- ------- -------
Effective income tax rate 32% 47% 42%
===== ==== ===
|
Management believes it is more likely than not that the long-term deferred tax asset will reduce future income tax payments. Significant factors considered by management in its determination of the probability of the realization of the deferred tax benefits include: (a) historical operating results; (b) expectations of future earnings and (c) the period of time over which the pension liabilities will be paid.
NOTE 3. RENTAL INCOME UNDER OPERATING LEASES
The Company leases two buildings at it's A & S Drive,
Paramus, N.J. site for retail use. The Sports
Authority, Inc. has leased a 62,000 sq. ft. building for
a lease term of twenty (20) years and the Tandy
Corporation has leased a 30,000 sq. ft. building for use
as a Comp USA retail store for a lease term of fifteen
(15) years. The tenants are responsible for real estate
taxes and other assessments as defined in the operating
lease agreements.
Buildings and building improvements:
Cost $ 6,961,244 $6,961,244 $6,961,244
Accumulated depreciation 2,926,317 2,726,359 2,526,400
------------ ------------ -------------
Net buildings and building
improvements $ 4,034,927 $4,234,885 $4,434,844
========= ======== ========
|
HOLOBEAM, INC.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2005, 2004 AND 2003
NOTE 3. RENTAL INCOME UNDER OPERATING LEASES (Continued)
The minimum future rentals on noncancellable operating leases for the years ending September 30, are as follows:
2006 $2,225,142 2010 $1,497,842
2007 2,233,965 2011 1,275,697
2008 2,331,017 2012 1,067,573
-------------
2009 2,331,017
Total $12,962,253
==========
|
Net rental income consists of the following:
2005 2004 2003
Rental income $2,053,703 $2,053,703 $2,053,703
Depreciation expense (199,959) (199,959) (199,959)
Other expenses (43,187) (60,134) (55,593)
------------ ------------ ----------
Rental income, net $ 1,810,557 $1,793,610 $1,798,151
========= ========= =========
|
In 2005, 2004, and 2003, depreciation expense included all depreciation of the rental buildings and building improvements.
a) In September 1992, the Company entered into a
triple net lease agreement with The Sports
Authority, Inc. The term of the lease is twenty
(20) years with four (4) options to extend the term
for an additional period of five (5) years in each
option.
The base annual rents under the amended lease were increased as follows:
2nd through 5th years $1,208,217 6th through 10th years 1,295,716 11th through 15th years 1,391,967 16th through 20th years 1,497,842 |
b) Tandy Corporation has constructed a 31,000 sq. ft.
building on the Company's site located in Paramus,
N.J. for use as a Comp USA retail store. Tandy
Corporation commenced paying rent to the Company
pursuant to the terms of the operating lease on
October 1, 1994. The lease term is for fifteen
(15) years at an annual rental of $630,000 for the
first five years, $724,500 for the second five
years and $833,175 for the last five years. Tandy
Corporation has three (3) options to extend the
term of the lease for an additional period of five
(5) years for each such option.
HOLOBEAM, INC.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2005, 2004 AND 2003
NOTE 3. RENTAL INCOME UNDER OPERATING LEASES (Continued)
Tandy Corporation sold Computer City, Inc. to CompUSA, Inc. on September 1, 1998, the lease was assigned to CompUSA, Inc. and continues to be guaranteed by Tandy Corporation. On May 18, 2000 Tandy Corporation changed its name to Radioshack Corporation.
On January 23, 2000, CompUSA, Inc. entered into a merger agreement with Grupo Sanborns, S.A. de C.V. and TPC Aquisition Corp., a subsidiary of Grupo Sanborns, S.A. de C.V. The financial information for Grupo Sanborns, S.A. de C.V. is unavailable. The lease continues to be guaranteed by Radioshack (Tandy Corporation).
The following is a condensed summary of financial information on the above publicly held companies:
Radioshack The Sports
Corporation Authority
12/31/04 1/29/05
(In Millions) (In Thousands)
Current assets $ 1,775 $ 882,660
---------- ---------------
Total assets 2,517 1,451,181
---------- ---------------
Current liabilities 957 527,142
---------- ---------------
Total liabilities 1,595 966,172
---------- ---------------
Total stockholders'
equity 922 485,009
---------- ---------------
Net sales 4,841 2,435,863
---------- ---------------
Cost of sales 2,407 1,756,879
---------- ---------------
Gross profit 2,434 678,984
---------- ---------------
Income before
income taxes 542 54,739
---------- ---------------
Income tax expense 205 21,272
---------- ---------------
Net income $ 337 $ 33,467
---------- ---------------
|
NOTE 4. RESTATEMENT
The Company restated Other Comprehensive Income for 2004 and 2003 as a result of recording an additional minimum pension liability. The net adjustment for 2004 and 2003 was $11,412 and $(106,423) (see note 14).
During the year ended September 30, 2003, the Company abandoned its activities in the development of surgical staples and the technology used to apply the staples for use in internal surgery. Assets totaling $60,052, associated with this segment, were written off to operations during 2003; therefore, there are no remaining assets included on the balance sheet as of September 30, 2003. There were no sales associated with this segment. The operating loss from this segment for 2003 was $172,746, with a tax benefit of $93,119 for a net loss from discontinued operations of $139,679.
HOLOBEAM, INC.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2005, 2004 AND 2003
NOTE 5. RENT EXPENSE
The Company leases approximately 1,000 square feet of office and laboratory space on an annual basis. Lease payments are $950 per month. Rent expense was $11,400 in 2005, $11,400 in 2004 and $11,400 in 2003.
NOTE 6. PATENTS AND PATENT APPLICATION COSTS
The Company has discontinued efforts relating to solar cells and semi-conductor technology. Work in the field has moved in other directions than that of the Company's technology and there has been a substantial reduction of government support in this technical area. The funding that had been received by laboratories exploring the Company's technology has also terminated.
The Company terminated its efforts in the area of surgical staple development for use in internal surgery. Several United States Patents had been issued and foreign applications had been filed on a novel staple. Research and development costs in the amounts of $172,746 have been expended in connection with the surgical staple during 2003.
NOTE 7. LONG-TERM DEBT
Long-term debt consists of two loans, one in the amount of $6,000,000 payable in monthly installments of $55,328 including interest at 8.77% until 2011. The second loan in the amount of $1,500,000 is payable in monthly installments of $13,767 including interest at 8.7% until 2011.
Costs incurred in connection with this mortgage amounted to $102,520 and are charged to expense over the life of the mortgage. This amount is included in the balance of deferred charges as detailed in Note 8. The expense for the remaining years is presented below:
2006 $5,126 2007 5,126 2008 5,126 2009 5,126 |
HOLOBEAM, INC.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2005, 2004 AND 2003
NOTE 7. LONG-TERM DEBT (Continued)
The combined balance outstanding for each debt issued at the end of 2005, 2004, and 2003 is as follows:
2005 2004 2003
---------- --------- ----------
First Mortgage on
62,000 sq. ft. Building $3,566,175 4,059,353 $4,511,328
Less Current Portion 538,144 493,177 451,982
--------------- --------- -----------
Long-Term Portion $3,028,031 $3,566,176 $4,059,346
========= ========= =========
|
The mortgage is secured by the land, building and operating lease agreement with The Sports Authority, Inc. (See Note 3).
The principle payments of long-term debt for the term of the mortgage is as follows:
2006 $538,144 2009 $699,136
2007 587,197 2010 762,870
2008 640,727 2011 338,101
NOTE 8. DEFERRED CHARGES
|
The composition of deferred charges and related amortization is as follows:
Real Estate
Brokers Commissions
Mortgage Sports Tandy
Total Costs Authority Corp.
------ ----- --------- -------
Original Cost $712,160 $102,520 $279,584 $330,056
Accumulated Amortization 489,866 64,929 182,895 242,042
-------- -------- -------- --------
Balance 9/30/05 $222,294 $ 37,591 $ 96,689 $ 88,014
======= ======= ======= =======
Original Cost $712,160 $102,520 $279,584 $330,056
Accumulated Amortization 448,756 59,804 168,915 220,037
-------- ------- --------- --------
Balance 9/30/04 $263,404 $ 42,716 $110,669 $110,019
======= ======= ======= =======
|
HOLOBEAM, INC.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2005, 2004 AND 2003
NOTE 9. OTHER EMPLOYEE BENEFITS
The Financial Accounting Standards Board issued SFAS No.
106 " Employers Accounting for Post Retirement Benefits",
and SFAS No. 112 "Employers Accounting for Post Employment
Benefits", which changed employers' accounting for these
benefits. Since the Company has no post-retirement
benefit plans, and does not offer post employment
benefits, SFAS No. 106 and SFAS No. 112 are not
applicable. The Financial Accounting Standards Board
issued SFAS No. 132 "Employers' Disclosures about
Pensions and Other Post Retirement Benefits." SFAS No.
132 is not applicable for post employment benefits, but is
applicable to the company's pension plan (See Note 13).
NOTE 10. CONCENTRATION OF CREDIT RISK
Substantially all of the Company's income is rental income received from two tenants. These tenants are subject to long-term lease agreements (See Note 3).
The Company is also subject to concentrations of credit risk with respect to cash and cash equivalents which the Company attempts to minimize by entering into arrangements with major banks and financial institutions and investing in high-quality instruments. The Company does not expect any counterparties to fail to meet their obligations.
NOTE 11. BUSINESS SEGMENTS
The Company adopted Financial Accounting Standards Board Statement (SFAS) No. 131 "Disclosures about Segments of an Enterprise and Related Information". The Company's reportable segments are strategic business units that involve different products and services. They are managed by a single management team.
The Company's business segments are as follows:
Surgical Staples-Engaged in engineering and design of technical products. One such development was the design of surgical staples for use in internal surgery and in the technology used to fabricate the equipment issued to apply the staples. The Company has discontinued its research efforts relating to the surgical staple segment of its business during 2003.
Rental and Development-Engaged in the development and leasing of real estate the two retail buildings owned by the Company at 50 A&S Drive, Paramus, New Jersey. Approximately 98% of the Company revenues are earned by this segment, all of which is received from two tenants (see Note 10).
The accounting policies of the segments are the same as those described in the summary of major accounting policies. The Company evaluates the performance of its operating segments based on income before income taxes. There are no intercompany sales. The Company derives all of its revenue in the United States.
HOLOBEAM, INC.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2005, 2004 AND 2003
NOTE 11. BUSINESS SEGMENTS (Continued)
Summarized financial information concerning the Company's reportable segments is shown in the following table. The "Other" column includes corporate income and expense items not allocated to reportable segments.
Revenues
2005 2004 2003
--------- ---------- --------
Business Segments:
Surgical Staples $ - $ - $ -
Real Estate Rental 2,053,703 2,053,703 2,053,703
Other 25,394 4,645 4,932
---------- --------- ---------
Total $ 2,079,097 $2,058,348 $2,086,635
========= ======== =========
Income (Loss)
2005 2004 2003
--------- ---------- --------
Business Segments:
Surgical Staples $ - $ - $(139,679) *
Real Estate Rental 1,810,557 1,793,610 1,798,151
--------- ---------- --------
Total 1,810,557 1,793,610 $1,658,472
--------- ---------- --------
General and Administrative
Expenses (785,206) (1,069,407) (828,081)
Interest Expense (338,683) (378,989) (417,026)
Other Income 25,394 4,645 32,932
Income Tax Expense (231,277) (164,923) (241,927)
--------- ---------- --------
Total (1,329,772) (1,608,674)(1,454,102)
--------- ---------- --------
Net Income $480,785 $ 184,936 $ 204,370
========= ========= =========
Identifiable Assets
2005 2004 2003
--------- ---------- --------
Business Segments:
Surgical Staples $ - $ - $ -
Real Estate Rental 5,594,371 6,006,879 6,310,711
Other 952,412 1,040,147 1,058,781
--------- ---------- --------
TOTAL ASSETS $6,546,783 $7,047,026 $7,369,492
======== ======== ========
|
* Discontinued operations
HOLOBEAM, INC.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2005, 2004 AND 2003
NOTE 11. BUSINESS SEGMENTS (Continued)
Business Segments: Capital Expenditures
2005 2004 2003
--------- ---------- --------
Surgical Staples $ - $ - $ -
Real Estate Rental - - -
Other - 3,529 4,214
--------- ---------- --------
$ - $ 3,529 $ 4,214
========= ======== =======
Property and Equipment
Business Segments Depreciation
2005 2004 2003
--------- ---------- --------
Surgical Staples $ - $ - $ -
Real Estate Rental 199,959 199,959 199,959
Other 20,546 20,407 19,908
--------- ---------- --------
$220,505 $220,366 $219,867
======= ======= =======
Intangible Assets
Amortization
2005 2004 2003
--------- ---------- --------
Surgical Staples $ - $ - $ -
Real Estate Rental 41,110 41,109 41,108
Other - - -
--------- ---------- --------
$ 41,110 $ 41,109 $ 41,108
========= ========== ========
|
NOTE 12. FAIR VALUES OF FINANCIAL INSTRUMENTS
The Company has a number of financial instruments, none of which are held for trading purposes. The Company estimates that the fair value of all financial instruments at September 30, 2005, does not differ materially from the aggregate carrying values of its financial instruments recorded in the accompanying balance sheet. The estimated fair value amounts have been determined by the Company using available market information and appropriate valuation methodologies. Considerable judgement is necessarily required in interpreting market data to develop the estimates of fair value, and accordingly, the estimates are not necessarily indicative of the amounts that the Company could realize in a current market exchange.
HOLOBEAM, INC.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2005, 2004 AND 2003
NOTE 13. PENSION PLAN
The Company established a defined benefit plan covering all eligible employees, who have completed one year of service. Benefits are based on years of service and the average compensation during the best three years of participation.
The Company's funding policy is to make annual contributions to the plan in amounts such that all employees' benefits will be fully provided for by the time they retire. Contributions are intended to provide not only for benefits attributed to service to date but also for those expected to be earned in the future.
Although it has not expressed any intention to do so, the Company has the right under the plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions set forth in ERISA.
The Company has adopted SFAS No. 132 "Employers' Disclosures about Pensions and Other Post Retirement Benefits". The provisions of SFAS No. 132 revise employers' disclosures about pension and other post retirement benefit plans. It does not change the measurement or recognition of this plan. It standardizes the disclosure requirements for pensions and other post retirement benefits to the extent practicable.
The Company provides defined benefit pension plan to the employees. The following provides a reconciliation of benefit obligations, plan assets, and funded status of the plan.
2005 2004 2003
--------- ---------- --------
Changes in benefit obligation:
Benefit obligation at October 1 $3,244,889 $ 2,371,343 $ 1,920,510
Service cost - 440,931 306,184
Interest cost 244,239 211,676 167,601
--------- ---------- --------
Benefit obligation at September 30 $3,489,128 $3,023,950 $2,394,295
========== ========== ==========
2005 2004 2003
--------- ---------- --------
Change in plan assets:
Fair value of plan assets at
October 1 $2,717,893 $2,096,090 $1,810,644
Company contributions 340,817 479,009 334,764
Benefit payments (100,000) (100,000) -
Actual return on plan assets 280,071 242,794 (49,318)
--------- ---------- --------
Fair value of plan assets at
September 30, $3,238,781 $2,717,893 $2,096,090
========== ========== ==========
Funded status of Plan $ (250,347) $(306,057) $(298,205)
Unrecognized Net Gain 368,808 158,051 177,071
--------- ---------- --------
Prepaid (Accrued) Pension $ 118,461 $ (148,006) $ (121,134)
========= ========= ========
|
HOLOBEAM, INC.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2005, 2004 AND 2003
NOTE 13. PENSION PLAN (Continued)
The net periodic pension cost for the year ended September 30, includes the following components:
2005 2004 2003
--------- ---------- --------
1. Service cost - benefits earned
during the period $ - $ 440,931 $306,184
--------- ---------- --------
2. Interest cost on projected benefit
obligation 244,239 211,676 167,601
--------- ---------- --------
3. Actual return on plan assets (180,071) (142,794) 49,318
--------- ---------- --------
4. Net amortization and deferral:
a. Amortization of unrecognized net
obligation (asset) at transition - - -
b. Amortization of unrecognized
prior service cost - - -
c. Amortization of unrecognized net
(gain) or loss 10,182 (3,932) (176,063)
d. Asset gain or (loss) deferred - - -
--------- --------- --------
e. Total 10,182 (3,932) (176,063)
--------- --------- --------
5. Net periodic pension cost (credit) =
(Item 1 + item 2 + item 3 + item 4 (e) $74,350 $505,881 $347,040
======= ======= =======
|
The net periodic pension cost for 2005, 2004 and 2003 was determined based on a 7% discount rate and a long - term rate of return of 7% on plan assets.
NOTE 14 ACCUMULATED OTHER COMPREHENSIVE INCOME BALANCES
Before-Tax Tax Expense Net-of-Tax
Amount (Benefit) Amount
---------- ----------- ----------
Minimum Pension Liability Adjustment:
2003 $177,071 $(70,828) $106,243
======== ======== =======
2004 $(19,020) $ 7,608 $(11,412)
======== ======== =======
2005 $210,757 $(84,303) $126,454
======== ======== =======
|
HOLOBEAM, INC.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2005, 2004 AND 2003
NOTE 15. SUPPLEMENTAL QUARTERLY FINANCIAL DATA (UNAUDITED)
For the Fiscal Year Ended September 30, 2005
First Second Third Fourth
Quarter Quarter Quarter Quarter
Total Revenues $505,920 $506,682 $507,226 $559,269
Gross Profit N/A N/A N/A N/A
Income Before Extraordinary
Items 38,703 71,035 75,718 295,329
Weighted Average
Number of Shares 270,513 269,940 269,940 269,784
Earnings Per Share .14 .26 .28 1.10
Net Income $38,703 $71,035 $75,718 $295,329
|
For the Fiscal Year Ended September 30, 2004
First Second Third Fourth
Quarter Quarter Quarter Quarter
Total Revenues $505,955 $505,371 $505,498 $541,524
Gross Profit N/A N/A N/A N/A
Income Before Extraordinary
Items 75,707 33,653 37,346 38,230
Weighted Average
Number of Shares 273,420 271,505 271,346 271,211
Earnings Per Share .28 .12 .14 .14
Net Income $75,707 $33,653 $37,346 $38,230
|
HOLOBEAM, INC. SCHEDULE XI
REAL ESTATE AND ACCUMULATED DEPRECIATION
SEPTEMBER 30, 2005
Life in
Which
Deprec-
Cost Capitalized Gross Amount at (2) iaton
Initial Subsequent Which Carried at Accum- in Latest
Cost to Company To Acquisition Close of Period (1) ulated Date Date Income
Incum - Bldg & Carrying Bldg & Deprec- of Acqu- Stmt is
brances Land Improv Improv Costs Land Improv Total iation Constr. ired Computed
Improved Land
Paramus, NJ $ 0 $218,402 $ 0 $ 0 $ 0 $218,402 $ 0 $ 218,402 $ 0 1971 -
Improved Land
Paramus, NJ 0 173,565 0 60,805 0 234,370 0 234,370 0 1983 -
Building I
Paramus, NJ
Improvements 4,511,328 0 718,881 3,649,850 0 0 4,368,731 4,368,731 2,200,636 1958 1971 3 to 40
years
Building II
Paramus, NJ 0 0 2,592,513 0 0 0 2,592,513 2,592,513 725,682 1995 1995 30 Years
--------- ------- --------- --------- -- ------- --------- --------- ---------
$4,511,328 $391,967 $3,311,394 $3,710,655 $ 0 $452,772 $6,961,244 $7,414,016 $2,926,318
========= ======= ========= ========= == ======= ========= ========= =========
|
<CAPTION
(1)Activity for the three years (2)Activity for the three years
ended September 30, 2005 is ended September 30, 2005 is
as follows: 2005 2004 2003 as follows: 2005 2004 2003
Balance at Balance at
Beginning Beginning
of Year $7,414,016 $7,414,016 $7,414,016 of Year $2,726,359 $2,526,400 $2,326,441
Additions: Additions:
Improvements 0 0 0 Depreciation 199,959 199,959 199,959
Acquisitions 0 0 0 Less Retirements 0 0 0
--------- --------- --------- --------- --------- ---------
7,414,016 7,414,016 7,414,016
Deductions Balance at
During Year: End of Year: $2,926,318 $2,726,359 $2,526,400
Retirements 0 0 0 ========= ========= =========
Cost of Real
Estate Sales 0 0 0
--------- --------- ---------
Balance at
End of Year $7,414,016 $7,414,016 $7,414,016
========= ========= =========
|
The aggregate cost for Federal income tax purposes at September 30, 2005 is $7,414,016.
The accompanying notes are an integral part of these financial statements.
HOLOBEAM, INC. SCHEDULE XII
MORTGAGE LOANS ON REAL ESTATE
SEPTEMBER 30, 2005
Principal Amount
of Loans
Face Carrying Subject to
Periodic Amount Amount Delinquent
Interest Final Maturity Payment Prior of of Principal
Rate Date Terms Items Mortgage Mortgage(1) or Interest
Mortgage Payable
Building and Improvements 8.7% February 5, 2011 $13,367 None $1,500,000 $ 711,531 None
Mortgage Payable
Building and Improvements 8.77% February 5, 2011 $56,328 None $6,000,000 $2,854,644 None
---------
$3,566,175
=========
|
Activity for the three
years ended September 30,
2005 is as follows:
2005 2004 2003
Balance at Beginning of Year $4,059,353 $4,511,328 $4,925,542
Additions During Year:
Commercial Loans 0 0 0
New Mortgages 0 0 0
--------- --------- ---------
4,059,353 4,511,328 4,925,542
Deductions During Year:
Principal Payments 493,178 451,975 414,214
Mortgage Payments 0 0 0
--------- --------- ---------
Balance at End of Year $3,566,175 $4,059,353 $4,511,328
========= ========= =========
|
(1) The cost for Federal income tax
Purposes at 9/30/05 $3,566,175
The accompanying notes are an integral part of these financial statements.
Name and Age Title Term Date First Elected ------------------------------------------------------------------------- Melvin S. Cook Chairman of the Board 2008 Annual 1968 Age 74 President of Registrant Meeting William M. Hackett Treasurer of Registrant 2006 Annual 1984 Age 62 (deceased) Meeting Beverly Cook Office Manager and 2007 Annual 1995 Age 69 Secretary of Registrant Meeting |
(b) The following Table represents the name and age of each officer of the Registrant, the positions and offices held by each, the term of each office and the period which each has served in the indicated office.
Name and Age Title Term Date First Elected ------------------------------------------------------------------------ Melvin S. Cook Chairman of the Board Annual 1968 Age 74 William M. Hackett Treasurer of Registrant Annual 1975 Age 62 (deceased) Beverly Cook Secretary of Registrant Annual 1997 Age 69 |
(1) Each officer has been selected to serve until the next Annual Meeting of the Board of Directors or until his respective successor shall be elected and shall quality.
(c) There are no significant employees other than those identified in (a) and (b) above.
(d) The following Table summarizes the business experience and principal occupation during the last five years of each person who serves as a director of executive officer of the Registrant, as well as any other directorship held by persons serving as directors of the Registrant.
Other
Name Business Experience/Occupation Directorship
------------------------------------------------------------------------
Melvin S. Cook Chairman of the Board of Directors and None
President of the Registrant since its
formation.
William M. Hackett Vice President of Registrant from None
August 23, 1975 until June 1, 1981 and
Controller of Registrant and member of
accounting staff from October 1973 to
August 1975. Treasurer of Registrant
from June 1981 to present. Vice President
of CMA Co., Inc. from November 1986 to
1998. Elected President of CMA Co., Inc.
in 1998 to date of death.
Beverly Cook Office Manager of Registrant from June 1, None
1981 until present. Married to Melvin S.
Cook, President and Chairman of the
Board of Directors.
(f) Not applicable.
|
HOLOBEAM, INC.
Form 10K
Summary Compensation Table
September 30, 2005
Long Term Compensation
-----------------------------------------------
Name and Annual Compensation Awards Payouts All Other
---------------------------- ---------------------------- ------------
Principal Position Year Salary Bonus Other Restricted Stock SUO/SARS LTIP Payouts Compensation
------------------ ---- ------ ----- ----- ---------------- -------- ------------ ------------
Melvin S. Cook 2005 $325,000 -0- -0- -0- -0- -0- -0-
President and CEO 2004 325,000 -0- -0- -0- -0- -0- -0-
and Director 2003 325,000 -0- -0- -0- -0- -0- -0-
William M. Hackett 2005 33,333 -0- -0- -0- -0- -0- -0-
Treasurer and 2004 33,333 -0- -0- -0- -0- -0- -0-
Director 2003 25,000 -0- -0- -0- -0- -0- -0-
Beverly Cook 2005 150,000 -0- -0- -0- -0- -0- -0-
Secretary and 2004 150,000 -0- -0- -0- -0- -0- -0-
Director 2003 150,000 -0- -0- -0- -0- -0- -0-
All Officers and 2005 $508,333 -0- -0- -0- -0- -0- -0-
Directors as a 2004 508,333 -0- -0- -0- -0- -0- -0-
Group 2003 500,000 -0- -0- -0- -0- -0- -0-
|
(d) The following Table sets forth information about the Company's defined benefit pension plan benefits:
Pension Plan Table
Years of Service
----------------
Remuneration 38
------------ -------
$ 60,000. $ 60,000.
160,000. 160,000.
205,000. 170,000.
|
Pensions are based upon average annual earnings (salary and bonus) for the highest three consecutive years of employment with the Registrant. For Melvin Cook and Beverly Cook, the amounts equaled $205,000. and $137,500., respectively, as of September 30, 2005. Melvin Cook and Beverly Cook will be credited at normal retirement date with 38 years service each under the Pension Plan as of September 30, 2006. Pensions may be adjusted for a surviving spouse's pension or other options under the Pension Plan. Pensions are not subject to any other
deduction for Social Security or any other amounts. (Reference is made to Note 13 of the accompanying Financial Statements for the year ended September 30, 2005.)
Title of Class Name & Address Amount Owned % of Class
-----------------------------------------------------------------
Common Stock, Par Melvin S. Cook 125,000 46.3%
Value $0.10 Per Share 217 First Street
Ho-Ho-Kus, NJ 07423
Common Stock, Par Beverly Cook 94,500 35.0%
Value $0.10 Per Share 217 First Street
Ho-Ho-Kus, NJ 07423
|
(b) The stockholding of Officers and Directors as a group as of December 08, 2005 are as follows:
Title of Class Amount Beneficially Owned % of Class --------------------------------------------------------------- Common Stock, Par Value 219,500 81.3% $0.10 Per Share |
Title of Class Amount Beneficially Owned % of Class
(c) There are no contractual arrangements that might result in a change of control of Registrant.
The Board of Directors approves all services rendered
by R.A. Fredericks and Co., LLP and approves all fees paid
to the audit firm.
The Board of Directors requires that the Treasurer
and the President approve all audit and other permissible
non-audit services provided by R.A. Fredericks and Co., LLP.
The Board of Directors will not approve non-audit engagements
that would violate rules of the U.S. Securities and Exchange
Commission or impair the independence of R.A. Fredericks and Co., LLP.
For the fiscal years ended September 30, 2005 and 2004,
R.A. Fredericks and Co., LLP was paid the following fees for
services provided to the Registrant:
2005 2004
Audit Fees $26,500 $20,000
Tax Fees 2,500 2,500
All Other Fees -0- -0-
------ ------
Total $29,000 $22,500
====== ======
|
PART IV
HOLOBEAM, INC.
Form 10K
September 30, 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 Beverly Cook
Date August 11, 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: August 11, 2006
By: Beverly Cook
Beverly Cook
Director and Treasurer
Date: August 11, 2006
|
By: Beverly Cook
Beverly Cook
Director and Secretary
Date: August 11, 2006
EXHIBIT A
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 September 30, 2005, the examination of controls and procedures did not disclose any significant deficiencies or material weaknesses.
I, Beverly Cook certify that:
1. I have reviewed this amended annual report on Form 10-K of Holobeam, Inc.;
2. Based on my knowledge, this annual 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 annual report;
3. Based on my knowledge, the financial statements, and other financial information included in this annual 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 annual 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 annual 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 annual report (the "Evaluation Date"); and
(c) presented in this annual 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 annual 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: August 11, 2006
Beverly Cook, Treasurer
Beverly Cook
Treasurer
|
I, Melvin S. Cook certify that:
1. I have reviewed this amended annual report on Form 10-K of Holobeam, Inc.;
2. Based on my knowledge, this annual 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 annual report;
3. Based on my knowledge, the financial statements, and other financial information included in this annual 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 annual 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 annual 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 annual report (the "Evaluation Date"); and
(c) presented in this annual 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 annual 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: August 11, 2006
Melvin S. Cook, President
Melvin S. Cook
President
|
EXHIBIT D
CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION
OF
HOLOBEAM, INC.
*****
Holobeam, Inc., a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware,
DOES HEREBY CERTIFY:
FIRST: That the Board of Directors of said corporation in a meeting duly held, unanimously adopted a resolution proposing and declaring advisable the following amendment to the Restated Certificate of Incorporation of said corporation:
RESOLVED, That the Restated Certificate of
Incorporation of the corporation be amended
by changing the FOURTH Article thereof so
that, as amended said Article shall be and
read as follows:
FOURTH: The total number of shares of
stock which the Corporation shall have authority to issue is Two Hundred Seventy Two Thousand (272,000) shares of Common Stock having a par value of Ten Cents ($0.10) per share amounting in the aggregate to Twenty-Seven Thousand Two Hundred Dollars ($27,200).
SECOND: That the aforesaid amendment was duly adopted in accordance with the applicable provisions of Sections 242 and 228 of the General Corporation Law of the State of Delaware.
THIRD: That this Certificate of Amendment of the Restated Certificate of Incorporation shall be effective on October 20, 2004.
IN WITNESS WHEREOF, said Board of Directors of said Holobeam, Inc. has caused this certificate to be signed by the Chairman this 4th day of October 2004.
Melvin S. Cook
by Melvin S. Cook
Chairman
Holobeam, Inc.
Form 10K/A
September 30, 2005
Exhibit B
Certification
Certification pursuant to 18 U.S.C., Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
In connection with the Annual Report of Holobeam, Inc. (The Registrant) on Form 10K/A for the fiscal year ended September 30, 2005 as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Melvin S. Cook, certify pursuant to 18 U.S.C., Sec. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of
Section 13(a) or 15(d) of the Securities Exchange Act of 1934;
and
(2) The information contained in the Report fairly presents, in all respects, the financial condition and results of operations of the Registrant.
/s/ Melvin S. Cook MELVIN S. COOK CHAIRMAN AND PRESIDENT August 11, 2006 |
Holobeam, Inc.
Form 10K/A
September 30, 2005
Exhibit B
Certification
Certification pursuant to 18 U.S.C., Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
In connection with the Annual Report of Holobeam, Inc. (The Registrant) on Form 10K/A for the fiscal year ended September 30, 2005 as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Beverly Cook, certify pursuant to 18 U.S.C., Sec. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of
Section 13(a) or 15(d) of the Securities Exchange Act of 1934;
and
(2) The information contained in the Report fairly presents, in all respects, the financial condition and results of operations of the Registrant.
/s/ Beverly Cook BEVERLY COOK TREASURER August 11, 2006 |
Holobeam, Inc.
Form 10K
September 30, 2005
Exhibit E
Code of Ethics
Item 15, 3E. Code of Ethics
The Registrant has not yet adopted a Code of Ethics as it
currently utilizes the Registrant's Policies and Procedures
contained in its Management Manual. At present the Registrant
has two (2) full-time employees, the President and CEO, and the
Secretary, and one (1) part-time employee, the Treasurer.
The Registrant intends to convert the appropriate sections
of the Management Manual to its Code of Ethics, which will be
completed by September 30, 2006.
The Registrant believes that the policies and procedures
contained in its management manual are consistent with the
requirements and intent of the Code of Ethics requirements.
It is the intention of the Registrant to file the Code of
Ethics when completed, on or about September 30, 2006.