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| Share Name | Share Symbol | Market | Type |
|---|---|---|---|
| Holobeam Inc (CE) | USOTC:HOOB | OTCMarkets | Common Stock |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 33.00 | 0.00 | 00:00:00 |
FORM 10 K/A NO. 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Delaware 22-1840647 ----------------------------------------------------------------- State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) |
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
|
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
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 5, 2006.
2. Financial Statements for the years ended September 30, 1999 and 2000.
3. Financial Statements for the years ended September 30, 2000 and 2001.
4. Financial Statements for the years ended September 30, 2001 and 2002.
5. Financial Statements for the years ended September 30, 2002 and 2003.
6. Annual Reports on Form 10K for the years ended September 30, 1998, 1999, 2000, 2001, 2002, 2003, 2004 and 2005.
7. Quarterly Reports on Form 10Q for the Quarter Ended June 30, 2003.
8. Financial Statements for the Years Ended September 30, 2003 and 2004.
9. Financial Statements for the Years Ended September 30, 2004 and 2005.
Holobeam, Inc.
Form 10-K/A NO. 1
Year Ended September 30, 2006
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 13
Item 7A. Quantitative and Qualitative Disclosures About
Market Risk 19
Item 8. Financial Statements and Supplementary Data 19
Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure 19
Item 9A. Controls and Procedures 19
Item 9B. Other Information 20
Part III
--------
Item 10. Directors and Executive Officers of the Registrant 21
Item 11. Executive Compensation 22
Item 12. Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters 25
Item 13. Certain Relationships and Related Transactions 25
Item 14. Principal Accountant Fees and Services 26
Part IV
-------
Item 15. Exhibits, Financial Statements Schedules 27
Signatures
----------
Index to Financial Statements
-----------------------------
Report of Independent Registered Public Accounting Firm
-------------------------------------------------------
3
|
EXPLANATORY NOTE
This amendment No. 1 on Form 10-K/A to the Registrant's
Annual Report on Form 10-K for the year ended September 30, 2006,
initially filed with the Securities and Exchange Commission
on December 28, 2006, is being filed to include an audit
report that expresses an opinion on the restated 2005
and 2004 financial statements.
This Amendment No. 1 amends and restates only the audit report for 2005 and 2004 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 updated audit report, 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.
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 investigated methods for applying surgical
staples and the technology presently used to fabricate and apply
such staples. During 2003, the Registrant expended $172,746. 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 development. During
2003 the Registrant terminated funding for the surgical staples
project and no further funds were expended. (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 09/30/06 100% 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 $3,027,971 $ -0-
|
(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:
2006 100% 2005 100% 2004 100% 2003 100% 2002 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, 2005 or 2006.
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
======= ======== ========
|
2006 2005
----- -----
high low High low
---- ---- ----- ---
Quarter Ended Dec. 31 39.00 39.00 30.00 26.85
Quarter Ended Mar. 31 40.05 39.00 36.25 30.00
Quarter Ended June 30 40.00 39.25 41.00 35.00
Quarter Ended Sept. 30 39.50 39.50 42.00 36.00
12
|
HOLOBEAM, INC.
SUMMARY OF SELECTED FINANCIAL DATA
FOR THE YEARS ENDED SEPTEMBER 30,
HOLOBEAM, INC.
SUMMARY OF SELECTED FINANCIAL DATA
FOR THE YEARS ENDED SEPTEMBER 30,
RESTATED RESTATED
-------- --------
2006 2005 2004 2003 2002
---- ---- ---- ---- ----
Gross Income $2,144,675 $2,079,097 $2,058,348 $2,086,635 $2,071,508
Net Income (Loss) 367,869 480,785 184,936 204,370 166,399
Weighted Average
Number
of Common Shares
Outstanding 269,381 270,006 271,873 275,642 287,518
Earnings Per
Share (Loss) 1.37 1.78 0.68 0.74 0.58
Total Assets 6,294,834 6,546,783 7,047,026 7,369,492 7,637,822
Long-Term Debt 2,725,945 3,632,129 4,294,560 4,901,755 4,511,321
Shareholders'
Equity 2,776,237 2,231,598 1,917,680 1,796,679 1,952,727
Gross Rental
Income 2,053,703 2,053,703 2,053,703 2,053,703 2,053,703
Net Rental Income 1,786,774 1,810,557 1,793,610 1,798,151 1,795,141
|
the statement of changes in stockholders' equity under other
comprehensive loss for a total accumulated other comprehensive loss
of $221,285. During 2006 there was no additional minimum liability
requirement and thus other comprehensive income adjustment of
$221,285. was reversed. The Registrant expects to continue funding
the plan in 2007 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 12 and 13 for the year ended September 30, 2006.)
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 2007. 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 primary intention of the Registrant
to locate and develop suitable properties in the area of Bergen
County, New Jersey, although suitable properties in other locations
would be considered.
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 because the
terms offered were unacceptable to Registrant.
Any purchase of new properties is not expected to have a
materially adverse effect upon the Registrant's capital resources
or financial
Holobeam Inc.
Contractual Obligations
September 30, 2006
Oct. Oct. Oct. Oct. Oct.
2006 2007 2008 2009 2010
to to to to to
Contractual Sept. Sept. Sept. Sept. Sept.
Obligations Total 2007 2008 2009 2010 2011
--------- ------- ------- ------- ------- ---------
Mortgage Loans
on Real
Estate $3,027,971 $587,202 $640,727 $699,136 $762,870 $ 338,036
Capital Lease
Obligations -0- -0- -0- -0- -0- -0-
Operating Lease
Obligations -0- -0- -0- -0- -0- -0-
Purchase
Obligations -0- -0- -0- -0- -0- -0-
Other -0- -0- -0- -0- -0- -0-
--------- ------- ------- ------- ------- ---------
$3,027,971 $587,202 $640,727 $699,136 $762,870 $ 338,036
========= ======= ======= ======= ======= =========
|
Based on preliminary results to date, management has not
identified any material weaknesses in internal control over
financial reporting as of October 1, 2006. No change in our
internal control over financial reporting (as defined in Rule
13a-15(f) under the Exchange Act) occurred during the fourth
quarter of our fiscal year ended September 30, 2006 that has
materially affected, or is reasonably likely to materially
affect, our internal control over financial reporting.
Because of its inherent limitations, internal control over
financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future
periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree
of compliance with the policies or procedures may deteriorate.
PART III
Melvin S. Cook Chairman of the Board 2008 Annual 1968 Age 75 President of Registrant Meeting
Ralph A. Fredericks Treasurer of Registrant 2009 Annual 2006
Age 57 Meeting Beverly Cook Office Manager and 2007 Annual 1995 Age 70 Secretary of Registrant Meeting Cynthia R. Cook Board Member 2009 Annual 2006 Age 41 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 75 Ralph A. Fredericks Treasurer of Registrant Annual 2006 Age 57 Beverly Cook Secretary of Registrant Annual 1997 Age 70 |
(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.
Ralph A. Fredericks Treasurer of the Registrant from None
February 2006. Mr. Fredericks is
a CPA and the managing partner of
a firm that bears his name.
Beverly Cook Office Manager and Secretary of None
Registrant from June 1,1981 until
present. Married to Melvin S.
Cook, President and Chairman of the
Board of Directors.
Cynthia R. Cook Board Member. Ms. Cook is the Associate None
Director of Project Air Force of the
Rand Corporation.
(f) Not applicable.
|
HOLOBEAM, INC.
Form 10K/A NO. 1
Summary Compensation Table
September 30, 2006
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 2006 $381,250 -0- -0- -0- -0- -0- -0-
President and CEO 2005 325,000 -0- -0- -0- -0- -0- -0-
and Director 2004 325,000 -0- -0- -0- -0- -0- -0-
William M. Hackett 2006 $108,750 -0- -0- -0- -0- -0- -0-
Treasurer and 2005 33,333 -0- -0- -0- -0- -0- -0-
Director 2004 33,333 -0- -0- -0- -0- -0- -0-
Ralph A. Fredericks 2006 $ 26,250 -0- -0- -0- -0- -0- -0-
Treasurer and
Director
Beverly Cook 2006 $237,500 -0- -0- -0- -0- -0- -0-
Secretary and 2005 150,000 -0- -0- -0- -0- -0- -0-
Director 2004 150,000 -0- -0- -0- -0- -0- -0-
All Officers and 2006 $753,750 -0- -0- -0- -0- -0- -0-
Directors as a 2005 508,333 -0- -0- -0- -0- -0- -0-
Group 2004 508,333 -0- -0- -0- -0- -0- -0-
|
All Directors and Officers as a Group
-------------------------------------
Options Granted 0
Options Exercised 0
Unexercised Options Held at 9/30/06 0
(d) The following Table sets forth information about the
Company's defined benefit pension plan benefits:
Pension Plan Table
Years of Service
----------------
Remuneration 39
------------- --------
$160,000. $160,000.
205,000. 170,000.
220,000. 220,000.
|
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 $220,000. and $179,000., respectively, as of September 30, 2006. Melvin Cook and Beverly Cook will be credited at normal retirement date with 39 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 12 of the accompanying Financial Statements for the year ended September 30, 2006.)
Title of Class Name & Address Amount Owned % of Class
-----------------------------------------------------------------
Common Stock, Par Melvin S. Cook 95,000 35.4%
Value $0.10 Per Share 217 First Street
Ho-Ho-Kus, NJ 07423
Common Stock, Par Beverly Cook 64,500 24.0%
Value $0.10 Per Share 217 First Street
Ho-Ho-Kus, NJ 07423
Common Stock, Par The Cook 2003 Insurance 60,000 22.3%
Cynthia Cook, Trustee Trust
Value $0.10 Per Share 8 Saddle Ridge Road
Ho-Ho-Kus, NJ 07423
|
(b) The stockholding of Officers and Directors as a group as of December 15, 2006 are as follows:
Title of Class Amount Beneficially Owned % of Class --------------------------------------------------------------- Common Stock, Par Value 219,500 81.7% $0.10 Per Share |
(c) There are no contractual arrangements that might result in a change of control of Registrant.
Simontacchi & Company, LLP R.A. Fredericks & Company, LLP
2006 2006 2005
Audit Fees $25,331 $ 3,000 $26,500
Tax Fees -- 9,500 2,500
All Other Fees -- -- --
------- -------- --------
$25,331 $12,500 $29,000
======= ======= =======
|
PART IV
1. The Financial Statements for the fiscal years ended September 20, 2006 and 2005 filed as a part of this report are listed on page 28.
2. Financial Statement Schedules:
XI. Real Estate and Accumulated Depreciation
XII. Mortgage Loans on Real Estate
3. Index to Exhibits
A. Officers' Certifications pursuant to
Section 302 of the Sarbanes-Oxley Act of
2002
B. Certification of Chief Executive Officer pursuant to U.S.C., Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
B. Certification of Chief Financial Officer pursuant to 18 U.S.C., Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
C. Amended and restated Certificate of Incorporation of Holobeam, Inc.
D. Code of Ethics
HOLOBEAM, INC.
Form 10K/A NO. 1
September 30, 2006
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.
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: October 9, 2007
-----------------------------
By: Ralph A. Fredericks
-------------------------
Ralph A. Fredericks
Director and Treasurer
Date: October 9, 2007
-------------------------
|
HOLOBEAM, INC.
FINANCIAL STATEMENTS
WITH INDEPENDENT ACCOUNTANTS' REPORT
YEARS ENDED
SEPTEMBER 30, 2006, 2005 AND 2004
R.A. FREDERICKS & COMPANY, LLP
CERTIFIED PUBLIC ACCOUNTANTS
MANAGEMENT CONSULTANTS
HOLOBEAM, INC.
YEARS ENDED SEPTEMBER 30, 2006, 2005 AND 2004
CONTENTS
PAGE
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 29
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 29.A
FINANCIAL STATEMENTS:
BALANCE SHEETS 30-31
STATEMENTS OF OPERATIONS 32
STATEMENTS OF SHAREHOLDERS' EQUITY 33
STATEMENTS OF CASH FLOWS 34
NOTES TO FINANCIAL STATEMENTS 35-47
SCHEDULES:
MORTGAGE LOANS ON REAL ESTATE 48
REAL ESTATE AND ACCUMULATED DEPRECIATION 49
|
SIMONTACCHI & COMPANY, LLP 170 E. Main Street
CERTIFIED PUBLIC ACCOUNTANTS Rockaway, New Jersey 07866
Tel: (973) 664-1140
Fax: (973) 664-1145
|
To the Board of Directors and Shareholders'
Holobeam, Inc.
Ho Ho Kus, NJ
We have audited the accompanying balance sheet of Holobeam, Inc. as of September 30, 2006 and the related statement of operations, shareholders' equity, and cash flows for the year ended September 30, 2006. 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 audit 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, 2006 and the results of its operations and its cash flows for the year ended September 30, 2006, in conformity with accounting principles generally accepted in the United States of America. Further, it is our opinion that the schedules referred to in the accompanying index present fairly the information set forth therein.
SIMONTACCHI & COMPANY
Rockaway, New Jersey
December 20, 2006
SIMONTACCHI & COMPANY, LLP 170 E. Main Street
CERTIFIED PUBLIC ACCOUNTANTS Rockaway, New Jersey 07866
Tel: (973) 664-1140
Fax: (973) 664-1145
|
To the Board of Directors and Shareholders'
Holobeam, Inc.
Ho Ho Kus, NJ
We have audited the accompanying balance sheet of Holobeam, Inc. as of September 30, 2005 and 2004 and the related statement of operations, shareholders' equity, and cash flows for the years then ended. 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 audit 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 the years then ended, in conformity with accounting principles generally accepted in the United States of America.
SIMONTACCHI & COMPANY, LLP
Rockaway, New Jersey
August 15, 2007
-29.A-
HOLOBEAM, INC.
BALANCE SHEETS
SEPTEMBER 30, 2006 AND 2005
ASSETS
2006 2005
---- -----
CURRENT ASSETS
Cash (including cash equivalents of $15,539
in 2006 and $497,275 in 2005) $ 262,138 $ 519,847
Trading Assets 428,969 302,520
Prepaid Pension 351,529 -
Prepaid Expenses 12,321 6,910
Prepaid Income Taxes 23,600 -
--------- ---------
TOTAL CURRENT ASSETS 1,078,557 829,277
--------- ---------
|
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 82,393 88,815
Furniture and Fixtures 33,468 33,468
--------- ---------
TOTAL 7,529,877 7,536,299
Less: Accumulated Depreciation and Amortization 3,207,651 3,025,604
--------- ---------
PROPERTY AND EQUIPMENT-NET 4,322,226 4,510,695
--------- ---------
|
OTHER ASSETS
Deferred Charges 181,111 222,294
Deferred Income Taxes - 100,139
Unbilled Rents Receivable 712,940 884,378
--------- ---------
TOTAL OTHER ASSETS 894,051 1,206,811
--------- ---------
TOTAL ASSETS $ 6,294,834 $ 6,456,783
========== ==========
|
The accompanying notes are an integral part of the financial
statements.
HOLOBEAM, INC.
BALANCE SHEETS
SEPTEMBER 30, 2006 AND 2005
LIABILITIES AND SHAREHOLDERS' EQUITY
2006 2005
---- ----
CURRENT LIABILITIES
Mortgage Payable-Current Portion $ 587,202 $ 538,144
Accounts Payable 1,907 2,045
Other Accrued Expenses 40,837 45,093
Income Taxes Payable - 71,753
Accrued Interest Payable 22,094 26,021
Deferred Income Taxes 140,612 -
--------- ---------
TOTAL CURRENT LIABILITIES 792,652 683,056
--------- ---------
LONG-TERM LIABILITIES
Mortgage Payable (Net of Current Portion) 2,440,769 3,028,031
Accrued Pension - 250,347
Deferred Income Taxes 285,176 353,751
--------- ---------
TOTAL LONG-TERM LIABILITIES 2,725,945 3,632,129
--------- ---------
TOTAL LIABILITIES 3,518,597 4,315,185
--------- ---------
|
SHAREHOLDERS' EQUITY
Common Stock, Par Value $.10 Per Share
Authorized Shares 272,000 in 2006 and
2005, issued 268,659 in 2006 and 269,784
in 2005 26,866 27,021
Additional Paid in Capital 9,053,195 9,110,968
Accumulated Deficit (6,303,824) (6,671,693)
Other Comprehensive income (Loss) - (221,285)
--------- ---------
2,776,237 2,245,011
Less: Cost of Shares in Treasury (none
in 2006 and 425 in 2005) - (13,413)
--------- ---------
TOTAL SHAREHOLDERS' EQUITY 2,776,237 2,231,598
--------- ---------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 6,294,834 $6,546,783
========= =========
|
The accompanying notes are an integral part of the financial
statements.
HOLOBEAM, INC.
STATEMENTS OF OPERATIONS
YEARS ENDED SEPTEMBER 30, 2006, 2005 AND 2004
2006 2005 2004
------ ------ -------
REVENUES
Rental Income $ 2,053,703 $2,053,703 $2,053,703
Interest Income 30,950 9,694 4,645
Net Holding Gains 60,022 15,700 -
----------- ----------- ------------
TOTAL 2,144,675 2,079,097 2,058,348
----------- ----------- ------------
COSTS AND EXPENSES
Rental Expense 266,929 243,146 260,093
General Expense 953,312 785,206 1,069,407
Interest Expense 292,205 338,683 378,989
----------- ----------- ------------
TOTAL 1,512,446 1,367,035 1,708,489
----------- ----------- ------------
EARNINGS BEFORE INCOME TAXES 632,229 712,062 349,859
INCOME TAX EXPENSE 264,360 231,277 164,923
----------- ----------- ------------
NET INCOME $ 367,869 $ 480,785 $ 184,936
=========== ========== ===========
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING 269,381 270,006 271,873
----------- ----------- ------------
EARNINGS PER SHARE $ 1.37 $ 1.78 $ .68
=========== ========== ===========
EARNINGS PER SHARE - NET INCOME $ 1.37 $ 1.78 $ .68
=========== ========== ===========
|
The accompanying notes are an integral part of the financial
statements.
HOLOBEAM, INC.
STATEMENTS OF SHAREHOLDERS' EQUITY
YEARS ENDED SEPTEMBER 30, 2006, 2005 AND 2004
Accumulated
Additional Compre- Other
Common Stock Paid-In hensive Accumulated Comprehensive Treasury Stock
Shares Amount Capital Income Deficit Loss Shares Amount
----------- --------- -------- ------ ------------ ------------- ------- ------
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 9,110,968 (6,671,693) (221,285) 425 13,413
Net Income $367,869 367,869
Other Comprehensive Income:
Minimum pension liability
adjustment 221,285 221,285
-------
Other Comprehensive Income $589,154
=======
Purchase of Treasury Stock 1,125 44,515
Retirement of Treasury Stock (1,550) (155) (57,773) (1,550) (57,928)
------ ------- --------- --------- ---------- ------- -------
BALANCE, SEPTEMBER 30, 2006 268,659 $26,866 $9,053,195 $(6,303,824) $ - - $ -
======= ======= ========= ========= ========== ====== =======
|
The accompanying notes are an integral part of the financial statements.
HOLOBEAM, INC.
STATEMENTS OF CASH FLOWS
YEARS ENDED SEPTEMBER 30, 2006, 2005 AND 2006
2005 2004 2003
----------- ---------- -------
Restated
2006 2005 2004
|
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
Depreciation 217,089 220,505 220,366
Amortization 41,183 41,110 41,109
Pension Adjustment 221,285 (126,454) 11,412
Purchases of Trading Assets (66,427) (286,820) -
Holding (Gain) Loss on Trading Assets 13,620 (15,700) -
(Gain) on Sale of Investment (73,642) - -
Increase (Decrease) in:
Accounts Payable and Accrued Expenses (8,321) (69,270) (84,561)
Accrued Pension (250,347) - -
Deferred Income Taxes Payable 72,037 (105,495) (17,497)
Deferred Rent - (185,430) 125,055
Income Taxes Payable Receivable (71,753) 2,293 (6,881)
Decrease (Increase) in:
Unbilled Rents Receivable 171,438 171,440 62,763
Accounts and Other Receivables - 18 -
Prepaid Expenses (356,940) 787 (1,306)
Prepaid Income Taxes (23,600) 7,698 (10)
Deferred Income Taxes Receivable 100,139 - -
-------- -------- --------
Total Adjustments (14,239) (345,318) 350,450
-------- -------- --------
Net Cash Provided by Operating Activities 353,630 135,467 535,386
-------- -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Short-term Investments - - -
Capital Expenditures (28,620) - (3,529)
Sale of Short-Term Investments - - -
-------- -------- --------
Net Cash Provided by (Used in)
Investing Activities (28,620) - (3,529)
-------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Principal Payments on First Mortgage (538,204) (493,178) (451,975)
Purchase of Treasury Stock (44,515) ( 40,413) (75,347)
-------- -------- --------
Net Cash Used in Financing Activities (582,719) (533,591) (527,322)
-------- -------- --------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS (257,709) (398,124) 4,535
CASH AND CASH EQUIVALENTS AT BEGINNING
OF YEAR 519,847 917,971 913,436
-------- -------- --------
CASH AND CASH EQUIVALENTS AT END OF YEAR $ 262,138 $ 519,847 $ 917,971
======== ======== =========
SUPPLEMENTAL CASH FLOWS DISCLOSURES
Interest Paid $ 296,132 $342,282 $382,287
|
Income Taxes Paid $ 370,200 $ 250,175 $ 196,909
The accompanying notes are an integral part of the financial statements.
HOLOBEAM, INC.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2006, 2005 AND 2004
NOTE 1. SUMMARY OF MAJOR ACCOUNTING POLICIES
a. Description of Business
The Company is engaged primarily in the rental of real property located in New Jersey for retail use.
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, 2006, 2005 AND 2004
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, 2006, 2005, or 2004. 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. The Company purchased 1,125 shares during the year ended September 30, 2006 and retired 1,550 shares during the same period. For the year ended September 30, 2005, the Company retired 1,000 shares of Treasury Stock purchased on October 1, 2004. For the year ended September 30, 2004, the Company retired 3,806 shares of Treasury Stock purchased at a cost of $89,492.
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.
HOLOBEAM, INC.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2006, 2005 AND 2004
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
j. 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 gains (losses) on equity security trading assets were $60,022 in 2006 and $15,700 in 2005 and $0 in 2004.
NOTE 2. INCOME TAXES
2006 2005 2004
------- ------ ------
Current taxes:
Federal $ 184,286 $197,046 $ 149,230
State 55,422 55,422 40,799
-------- -------- --------
Total 239,708 252,468 190,029
-------- -------- --------
Deferred taxes:
Federal 20,922 (18,012) (21,339)
State 3,730 (3,179) (3,767)
-------- -------- --------
Total 24,652 (21,191) (25,106)
-------- -------- --------
Provision for
income taxes $264,360 $231,277 $164,923
======== ======== ========
The deferred tax assets and liabilities recorded on the
balance sheet as of September 30, are as follows:
2006 2005 2004
------- ------ ------
Deferred tax assets:
Federal $ - $ 85,118 $ 53,737
State - 15,021 9,483
-------- -------- --------
Total Assets $ - $ 100,139 $ 63,220
-------- -------- --------
Deferred tax liabilities:
Federal $361,888 $300,688 $358,978
State 63,900 53,063 63,349
-------- -------- --------
Total Liabilities$425,788 $353,751 $422,327
-------- -------- --------
Net $425,788 $253,612 $359,107
======== ======== ========
|
HOLOBEAM, INC.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2006, 2005 AND 2004
NOTE 2. INCOME TAXES (continued)
The sources of deferred income taxes for the years ended September 30, are as follows:
2006 2005 2004
------ ------ ------
Prepaid (Accrued) Pension
Costs $ 351,529 $(250,347) $ (306,057)
Unbilled Rents Receivable 712,940 884,378 1,055,817
------- -------- ---------
Total $1,064,469 $ 634,031 $ 749,760
========== ========= ==========
|
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:
2006 2005 2004
---- ---- ----
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 2 - 7
---- ---- ----
Effective income tax rate 42% 32% 47%
==== ==== ====
|
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.
Cost $ 6,961,244 $6,961,244 $6,961,244
Accumulated depreciation 3,126,277 2,926,315 2,726,359
---------- --------- ---------
Net buildings and building
improvements $ 3,834,967 $4,034,929 $4,234,885
========== ========= =========
|
HOLOBEAM, INC.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2006, 2005 AND 2004
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:
2007 $ 2,233,965 2011 $ 1,275,697
2008 2,331,017 2012 1,067,573
----------
2009 2,331,017
2010 1,497,842
Total $10,737,111
==========
|
Net rental income consists of the following:
2006 2005 2004
---- ------ ------
Rental income $2,053,703 $2,053,703 $2,053,703
Depreciation expense (199,959) (199,959) (199,959)
Other expenses (66,970) (43,187) (60,134)
--------- --------- ---------
Rental income, net $1,786,744 $1,810,557 $1,793,610
========= ========= =========
|
In 2006, 2005, and 2004, 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 30,000 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, 2006, 2005 AND 2004
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 Tandy Corporation.
The following is a condensed summary of financial information on the above publicly held companies:
Radioshack The Sports
Corporation Authority, Inc.
12/31/05 1/29/06
(In Millions) (In Thousands)
Current assets $ 1,627 $ 824,914
------ ----------
Total assets 2,205 1,403,782
------ ----------
Current liabilities 986 476,204
------ ----------
Total liabilities 1,616 848,985
------ ----------
Total stockholders'
equity 589 554,797
------ ----------
Net sales 5,081 2,509,330
------ ----------
Cost of sales 2,706 1,802,123
------ ----------
Gross profit 2,375 702,207
------ ----------
Income before
income taxes 322 91,528
------ ----------
Income tax expense
(and other charges) 55 36,111
------ ----------
Net income $ 267 $ 55,417
------ ----------
|
NOTE 4. RESTATEMENT
The Company restated Other Comprehensive Income for 2004 as a result of recording an additional minimum pension liability. The net adjustment for 2004 was $11,412 (see note 13).
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 2006, $11,400 in 2005 and $11,400 in 2004.
HOLOBEAM, INC.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2006, 2005 AND 2004
NOTE 6. 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. Both loans are payable to the same lending institution.
Costs incurred in connection with this mortgage amounted to $102,520 and are charged to expense over the life of the mortgage in the amount of $5,126. This amount is included in the balance of deferred charges as detailed in Note 7.
The combined balance outstanding for each debt issued at the end of 2006, 2005, and 2004 is as follows:
2006 2005 2004
------ ------ ------
First Mortgage on
62,000 sq. ft. Building $3,027,971 3,566,175 $4,059,353
Less Current Portion 587,202 538,144 493,177
---------- --------- ----------
Long-Term Portion $2,440,769 $3,028,031 $3,566,176
========= ========= =========
|
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:
2007 $587,202 2010 $762,870 2008 640,727 2011 338,036 2009 699,136 |
HOLOBEAM, INC.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2006, 2005 AND 2004
NOTE 7. 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 531,049 70,130 196,874 264,045
-------- ------- ------- -------
Balance 9/30/06 $181,111 $ 32,390 $ 82,710 $ 66,011
======= ====== ======= =======
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
======= ====== ======= =======
|
NOTE 8. 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 9. 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.
HOLOBEAM, INC.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2006, 2005 AND 2004
NOTE 10. 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:
Rental-Engaged in the 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 9).
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.
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
2006 2005 2004
--------- ---------- --------
|
Business Segments:
Real Estate Rental $2,053,703 $2,053,703 $2,053,703
Other 90,972 25,394 4,645
--------- ---------- --------
Total $2,144,675 $2,079,097 $2,058,348
======== ========= =========
Income (Loss)
2006 2005 2004
--------- ---------- --------
Business Segments:
Real Estate Rental $1,786,774 $1,810,557 $1,793,610
--------- ---------- --------
Total 1,786,774 1,810,557 $1,793,610
--------- ---------- --------
General and Administrative
Expenses (953,312) (785,206) (1,069,407)
Interest Expense (292,205) (338,683) (378,989)
Other Income 90,972 25,394 4,645
Income Tax Expense (264,360) (231,277) (164,923)
--------- ---------- --------
Total (1,418,905)(1,329,772) (1,608,674)
--------- ---------- --------
Net Income $ 367,869 $ 480,785 $ 184,936
======== ========= =========
|
HOLOBEAM, INC.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2006, 2005 AND 2004
NOTE 10. BUSINESS SEGMENTS (Continued)
Identifiable Assets
Real Estate Rental $5,181,791 $5,594,371 $6,006,879
Other 1,113,043 952,412 1,040,147
--------- ---------- --------
TOTAL ASSETS $6,294,834 $6,546,783 $7,047,026
========= ========= =========
Capital Expenditures
Business Segments:
2006 2005 2004
--------- ---------- --------
Real Estate Rental $ - $ - $ -
Other 28,621 - 3,529
--------- ---------- --------
$ 28,621 $ - $ 3,529
======== ========= =======
Property and Equipment
Depreciation
Business Segments:
2006 2005 2004
--------- ---------- --------
Real Estate Rental $ 199,959 $199,959 $199,959
Other 17,130 20,546 20,407
--------- ---------- --------
$217,089 $220,505 $220,366
========= ========== ========
Intangible Assets
Amortization
Business Segments:
2006 2005 2004
--------- ---------- --------
Real Estate Rental $ 41,183 $ 41,110 $ 41,109
Other - - -
--------- ---------- --------
$ 41,183 $ 41,110 $ 41,109
======== ======== ========
|
HOLOBEAM, INC.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2006, 2005 AND 2004
NOTE 11. 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, 2006, 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.
NOTE 12. 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.
2006 2005 2004
--------- ---------- --------
Changes in benefit obligation:
Benefit obligation at October 1 $3,489,128 $3,244,889 $2,371,343
Service cost - - 440,931
Interest cost 241,508 244,239 211,676
Actuarial (Gain) Losses (185,167) - -
Distributions (100,000) - -
--------- ---------- --------
Benefit obligation at September 30 $3,445,469 $3,489,128 $3,023,950
========== ========= =========
|
HOLOBEAM, INC.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2006, 2005 AND 2004
NOTE 12. PENSION PLAN (continued)
2006 2005 2004
--------- ---------- --------
Change in plan assets:
Fair value of plan assets at
October 1 $3,238,781 $2,717,893 $2,096,090
Company contributions 275,114 340,817 479,009
Benefit payments (100,000) (100,000) (100,000)
Actual return on plan assets 75,617 280,071 242,794
--------- ---------- --------
Fair value of plan assets at
September 30, $3,489,512 $3,238,781 $2,717,893
========= ========= =========
Funded status of Plan $ 44,043 $(250,347) $(306,057)
Unrecognized Net (Gain) Loss 307,486 368,808 158,051
--------- ---------- --------
Prepaid (Accrued) Pension $ 351,529 $ 118,461 $(148,006)
======== ======== ========
|
The net periodic pension cost for the year ended September 30, includes the following components:
2006 2005 2004
--------- ---------- --------
1. Service cost - benefits earned
during the period $ - $ - $440,931
--------- ---------- --------
2. Interest cost on projected benefit
obligation 241,508 244,239 211,676
--------- ---------- --------
3. Actual return on plan assets (75,617) (180,071) (142,794)
--------- ---------- --------
4. Net amortization and deferral:
a. Amortization of unrecognized net
obligation (asset) at transition - - -
b. Amortization of unrecognized
prior service cost - - -
c. Net amortization and defferal (123,845) 10,182 (3,932)
d. Asset gain or (loss) deferred - - -
--------- ---------- --------
e. Total (123,845) 10,182 $ (3,932)
--------- ---------- --------
5. Net periodic pension cost (credit) =
(Item 1 + item 2 + item 3 + item 4(e)$42,046 $ 74,350 $505,881
======== ======= =======
|
The net periodic pension cost was determined based on a 5.5% discount rate for 2006 and 7% discount rate for 2005 and 2004 and a long - term rate of return of 7% on plan assets for 2006, 2005 and 2004.
HOLOBEAM, INC.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2006, 2005 AND 2004
NOTE 13. ACCUMULATED OTHER COMPREHENSIVE INCOME BALANCES
Before-Tax Tax Expense Net-of-Tax
Amount (Benefit) Amount
Minimum Pension Liability Adjustment:
2004 $(19,020) $ 7,608 $ (11,412)
======== ======== =======
2005 $210,757 $(84,303) $126,454
======== ======== =======
2006 $(368,808) $147,523 $(221,285)
======== ======== =======
|
NOTE 14. SUPPLEMENTAL QUARTERLY FINANCIAL DATA (UNAUDITED)
First Second Third Fourth
Quarter Quarter Quarter Quarter
------- ------- ------- -------
Total Revenues $553,051 $509,536 $525,570 $556,518
Gross Profit N/A N/A N/A N/A
Net (loss) Income Before
Extraordinary Items $ 94,662 $ (2,270)$ 67,185 $208,292
Weighted Average
Number of Shares 269,784 269,784 269,304 269,381
Earnings Per Share .35 (.01) .25 .77
Net Income (Loss) $94,662 $(2,270) $67,185 $208,293
|
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
|
HOLOBEAM, INC. SCHEDULE XII
MORTGAGE LOANS ON REAL ESTATE
SEPTEMBER 30, 2006
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 $ 604,010 None
Mortgage Payable
Building and Improvements 8.77% February 5, 2011 $56,328 None $6,000,000 $2,423,961 None
---------
$3,027,971
=========
|
Activity for the three
years ended September 30,
2006 is as follows:
2006 2005 2004
Balance at Beginning of Year $3,566,175 $4,059,353 $4,511,328
Additions During Year:
Commercial Loans 0 0 0
New Mortgages 0 0 0
--------- --------- ---------
3,566,175 4,059,353 4,511,328
Deductions During Year:
Principal Payments 538,204 493,178 451,975
Mortgage Payments 0 0 0
--------- --------- ---------
Balance at End of Year $3,027,971 $3,566,175 $4,059,353
========= ========= =========
|
(1) The cost for Federal income tax
Purposes at 9/30/06 $3,027,971
The accompanying notes are an integral part of these financial statements.
HOLOBEAM, INC. SCHEDULE XI
REAL ESTATE AND ACCUMULATED DEPRECIATION
SEPTEMBER 30, 2006
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 3,027,971 0 718,881 3,649,850 0 0 4,368,731 4,368,731 2,334,120 1958 1971 3 to 40
years
Building II
Paramus, NJ 0 0 2,592,513 0 0 0 2,592,513 2,592,513 792,157 1995 1995 30 Years
--------- ------- --------- --------- -- ------- --------- --------- ---------
$3,027,971 $391,967 $3,311,394 $3,710,655 $ 0 $452,772 $6,961,244 $7,414,016 $3,126,277
========= ======= ========= ========= == ======= ========= ========= =========
|
<CAPTION
(1)Activity for the three years (2)Activity for the three years
ended September 30, 2006 is ended September 30, 2006 is
as follows: 2006 2005 2004 as follows: 2006 2005 2004
Balance at Balance at
Beginning Beginning
of Year $7,414,016 $7,414,016 $7,414,016 of Year $2,926,318 $2,726,359 $2,526,400
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: $3,126,277 $2,926,318 $2,726,359
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, 2006 is $7,414,016.
The accompanying notes are an integral part of these financial statements.
(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, 2006 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, 2006, including corrective actions with regard to significant deficiencies and material weaknesses. As of September 30, 2006, the examination of controls and procedures did not disclose any significant deficiencies or material weaknesses.
I, Ralph A. Fredericks, certify that:
1. I have reviewed this annual report on Form 10-K/A NO. 1 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) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) 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
(d) 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.
I, Melvin S. Cook, certify that:
1. I have reviewed this annual report on Form 10-K/A NO. 1 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) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) 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
(d) 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.
Date: October 9, 2007
--------------------
Melvin S. Cook, President
-------------------------
Melvin S. Cook
President
|
EXHIBIT C
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.
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