SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended December 31, 2009
Commission File Number 0-10683
HYDROMER, INC.
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(Exact name of registrant as specified in its charter)
New Jersey 22-2303576
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(State of incorporation) (I.R.S. Employer
Identification No.)
35 Industrial Pkwy, Branchburg, New Jersey 08876-3424
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (908) 722-5000
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Securities registered pursuant to Section 12 (b) of the Act: None
Securities registered pursuant to Section 12 (g) of the Act:
Common Stock Without Par Value
------------------------------
(Title of class)
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 report(s), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark whether the registrant is a large accelerated filer,
an accelerated filer, a non-accelerated filer, or a smaller reporting company.
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
Indicate by check mark whether the registrant is a shell company (as defined
in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]
Class Outstanding at December 31, 2009
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Common 4,772,318
HYDROMER, INC.
INDEX TO FORM 10-Q
December 31, 2009
Page No.
Part I - Financial Information
# 1 Consolidated Financial Statements
Balance Sheets - December 31, 2009 & June 30, 2009 2
Statements of Operations for the three months and six
months ended December 31, 2009 and 2008 3
Statements of Cash Flows for the six months ended
December 31, 2009 and 2008 4
Notes to Financial Statements 5
# 2 Management's Discussion and Analysis of the Financial
Condition and Results of Operations 6
# 3 Controls and Procedures 8
Part II - Other Information
# 1 Legal Proceedings N/A
# 2 Change in Securities N/A
# 3 Default of Senior Securities N/A
# 4 Submission of Motion to Vote of Security Holders N/A
# 5 Other Information N/A
# 6 Exhibits 9
EXHIBIT INDEX
Exhibit No. Description of Exhibit
----------- ----------------------
31.1 SEC Section 302 Certification - CEO certification 11
31.2 SEC Section 302 Certification - CFO certification 12
32.1 Certification of Manfred F. Dyck, Chief Executive Officer,
pursuant to 18 U.S.C. Section 1350 13
32.2 Certification of Robert Y. Lee, Chief Financial Officer,
pursuant to 18 U.S.C. Section 1350 13
1
PART I - CONSOLIDATED FINANCIAL STATEMENTS
ITEM # 1
HYDROMER, INC. AND CONSOLIDATED SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
December 31, June 30,
2009 2009
UNAUDITED AUDITED
ASSETS
Current Assets:
Cash and cash equivalents $ 1,274,903 $ 1,585,765
Short-term investments 440,000 450,000
Trade receivables less allowance for doubtful accounts of
$40,120 and $57,741 as of December 31, 2009 and June 30,
2009, respectively 708,896 1,058,978
Inventory 257,744 615,849
Prepaid expenses 149,736 204,280
Deferred tax asset 8,976 8,976
Other 405,953 8,968
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Total Current Assets 3,246,208 3,932,816
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Property and equipment, net 2,988,912 3,135,017
Deferred tax asset, non-current 748,095 521,986
Intangible assets, net 788,991 740,426
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Total Assets $ 7,772,206 $ 8,330,245
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 384,395 $ 380,838
Accrued expenses 221,331 341,088
Current portion of capital lease 15,402 14,473
Current portion of deferred revenue 80,758 82,132
Current portion of mortgage payable 47,176 45,696
Income tax payable 2,080 75,891
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Total Current Liabilities 751,142 940,118
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Deferred tax liability 284,503 285,858
Long-term portion of capital lease 42,952 50,258
Long-term portion of deferred revenue 174,904 161,019
Long-term portion of mortgage payable 2,795,293 2,820,055
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Total Liabilities 4,048,794 4,257,308
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Stockholders' Equity
Preferred stock - no par value, authorized 1,000,000 shares, no
shares issued and outstanding - -
Common stock - no par value, authorized 15,000,000 shares;
4,783,235 shares issued and 4,772,318 shares outstanding as
of December 31, 2009 and June 30, 2009 3,721,815 3,721,815
Contributed capital 633,150 633,150
Accumulated deficit (625,413) (275,888)
Treasury stock, 10,917 common shares at cost (6,140) (6,140)
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Total Stockholders' Equity 3,723,412 4,072,937
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Total Liabilities and Stockholders' Equity $ 7,772,206 $ 8,330,245
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2
HYDROMER, INC. AND CONSOLIDATED SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended Six months Ended
December 31, December 31,
2009 2008 2009 2008
UNAUDITED UNAUDITED UNAUDITED UNAUDITED
--------------------------------------------------------- ----------------------------- ------------------------------
REVENUES
Sale of products $ 829,402 $ 1,235,533 $ 2,011,106 $ 2,353,601
Service revenues 359,491 497,750 659,283 1,012,076
Royalties and Contract Revenues 227,221 416,418 455,296 819,993
------------- ------------ -------------- -------------
TOTAL REVENUES 1,416,114 2,149,701 3,125,685 4,185,670
--------------------------------------------------------- ----------------------------- ------------------------------
EXPENSES
Cost of Sales 627,263 854,238 1,467,457 1,646,556
Operating Expenses 1,221,493 1,191,534 2,487,853 2,344,548
Other Expenses 30,024 46,916 81,638 87,567
Gain from Sale of Assets (335,629) - (335,629) -
(Benefit from) Provision for Income Taxes (49,900) 20,320 (226,109) 28,000
------------- ------------ -------------- -------------
TOTAL EXPENSES 1,493,251 2,113,008 3,475,210 4,106,671
--------------------------------------------------------- ----------------------------- ------------------------------
NET (LOSS) INCOME $ (77,137) $ 36,693 $ (349,525) $ 78,999
--------------------------------------------------------- ----------------------------- ------------------------------
(Loss) Earnings Per Common Share $ (0.02) $ 0.01 $ (0.07) $ 0.02
Weighted Average Number of
Common Shares Outstanding 4,772,318 4,772,318 4,772,318 4,772,318
Common Shares Outstanding assuming dilution 4,773,655 4,772,986
There was no impact to earnings per share from dilutive securities.
For the 2009 period, the resultant would have been anti-dilutive.
3
HYDROMER, INC. AND CONSOLIDATED SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six months Ended
December 31,
2009 2008
UNAUDITED UNAUDITED
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net (Loss) Income $ (349,525) $ 78,999
Adjustments to reconcile net (loss) income to net cash
Provided by (Used for) operating activities
Gain on Sale of Product Lines (335,629) -
Depreciation and amortization 220,542 207,339
Charge-off of Patent Costs - 63,242
Deferred income taxes (227,464) 24,052
Changes in Assets and Liabilities:
Trade receivables 350,082 63,067
Inventory 61,612 162,472
Prepaid expenses 54,544 1,789
Other assets (11,706) (2,144)
Accounts payable and accrued liabilities (116,200) (138,683)
Deferred income 12,511 25,925
Income taxes payable (73,811) 2,908
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Net Cash (Used for) Provided by Operating Activities (415,044) 488,966
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CASH FLOWS FROM INVESTING ACTIVITIES:
Cash purchases of property and equipment (126,436) (92,292)
Cash payments on patents and trademarks (156,100) (185,802)
Redemption of matured short-term investments 260,000 -
Cash purchases of short-term investments (250,000) -
Proceeds Received from the sale of Product Lines 400,000
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Net Cash Provided by (Used for) Investing Activities 127,464 (278,094)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Net repayments toward Line of Credit - (289,973)
Proceeds from long-term borrowings - 2,900,000
Repayment of long-term borrowings (23,282) (1,889,257)
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Net Cash (Used for) Provided by Financing Activities (23,282) 720,770
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NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS: (310,862) 931,642
Cash and Cash Equivalents at Beginning of Period 1,585,765 108,403
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Cash and Cash Equivalents at End of Period $ 1,274,903 $ 1,040,045
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Non-Cash Investing and Financing Activities:
Note Receivable in exchange for Sale of Product Lines $ 400,000
4
HYDROMER, INC. AND CONSOLIDATED SUBSIDIARY
Notes to Consolidated Financial Statements
In the opinion of management, the accompanying unaudited financial statements
include all adjustments (consisting of only normal adjustments) necessary for a
fair presentation of the results for the interim periods. Certain
reclassifications have been made to the previous year's results to present
comparable financial statements.
Significant Events:
-------------------
On November 25, 2009, the Company's wholly owned subsidiary, Biosearch Medical
Products, Inc. ("BMPI") sold its Private Label Jejunostomy Catheter and
Nasogastric Feeding Catheter business to Forefront Medical Technologies
("Forefront"), a wholly owned subsidiary of Vicplas International Limited - a
company registered in the Republic of Singapore, for $800,000 in cash. Half of
the sales proceeds was received upon closing with the balance due in early 2010
when the transition is complete. This sale included inventory and equipment
related to that business and also calls for the assignment of certain customer
supply agreements to Forefront and a three year non-compete provision. A
separate supply agreement for Hydromer(R) hydrophilic coating solution used on
those products was also entered between the parties. BMPI will continue
manufacturing the products, at an agreed upon transfer price, until Forefront
completes the transition which is expected to occur on or about February 28,
2010 in accordance with the sales agreement. Accordingly, this transaction does
not meet the criteria of Discontinued Operations of Financial Accounting
Standards Board ("FASB") Accounting Standards Codification ("ASC") paragraphs
205-20. These product lines sold were part of the "Medical Products" segment
(see following Segment Reporting section).
New Accounting Pronouncements
-----------------------------
In October 2009, the FASB issued ASU 2009-13, Multiple-Deliverable Revenue
Arrangements, (amendments to FASB ASC Topic 605, Revenue Recognition)
("ASU 2009-13"). ASU 2009-13 requires entities to allocate revenue in an
arrangement using estimated selling prices of the delivered goods and services
based on a selling price hierarchy. The amendments eliminate the residual method
of revenue allocation and require revenue to be allocated using the relative
selling price method. ASU 2009-13 is effective on a prospective basis for
revenue arrangements entered into or materially modified in fiscal years
beginning on or after June 15, 2010, with early adoption permitted. ASU 2009-13
will become effective for the Company with its fiscal year beginning July 1,
2010 and the Company believes that there will not be a material impact on its
results of operations or financial condition as a result of adoption of this
Update.
In January 2010, the FASB issued ASU 2010-06, Fair Value Measurements and
Disclosures,(amendments to FASB ASC Topic 820, Fair Value Measurements and
Disclosures) ("ASU 2010-06"). ASU 2010-06 requires entities to disclose
separately the amounts of significant transfers in and out of Level 1 and Level
2 fair value measurements along with the reasons for such transfers. Entities
should also present separate information about purchases, sales, issuances and
settlement activity in Level 3 fair value measurements. The Update requires
entities to provide fair value measurement disclosures for each class of assets
and liabilities and disclosures about inputs and valuation techniques. The
new disclosures and clarifications of existing disclosures are effective for
interim and annual reporting periods beginning after December 15, 2009 except
for the disclosures pertaining to Level 3 fair value measurements. Those
disclosures are effective for interim and fiscal years beginning after
December 15, 2010. This Update will become effective for the Company with
its interim period beginning January 1, 2010 and the Company believes that there
will not be a material impact on its results of operations or financial
condition as a result of adoption of this Update.
FAIR VALUE
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In accordance with FASB ASC 820, "Fair Value Measurements and Disclosures", the
following table represents the Company's fair value hierarchy for its financial
assets and liabilities measured at fair value on a recurring basis as of
December 31, 2009:
5
---------------- ------------ ----------- ----------- ------------
Level 1 Level 2 Level 3 Total
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ASSETS
Investments $ 440,000 $ 440,000
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Total Assets $ 440,000 - - $ 440,000
======= =======
LIABILITIES - n/a - - - -
---------------- ------------ ----------- ----------- ------------
Some of the Company's financial instruments are not measured at fair value on a
recurring basis but are recorded at amounts that approximate fair value due to
their liquid or short-term nature, such as cash and cash equivalents,
receivables and payables. The carrying amount of the Company's note obligation
approximates its fair value, as the terms of the note is consistent with terms
available in the market for instruments with similar risk.
Segment Reporting:
------------------
The Company operates two primary business segments. The Company evaluates the
segments by revenues, total expenses and earnings before taxes. Corporate
Overhead is excluded from the business segments as to not distort the
contribution of each segment. These segments are the lowest levels for which
identifiable cash flows are largely independent of the cash flows of other
assets and liabilities.
The results for the six months ended December 31, by segment are:
Polymer Medical Corporate
Research Products Overhead Total
2009 (excludes the Sale of Product Lines)
Revenues $ 1,884,565 $ 1,241,120 $ 3,125,685
Expenses (1,925,793) (1,315,354) $ (795,801) (4,036,948)
-------------- ---------------- ----------- ---------------
Pre-tax Loss $ (41,228) $ (74,234) $ (795,801) $ (911,263)
============== ================ =========== ===============
---------------------------------------- ---------------- ----------------- -------------- ----------------
2008
Revenues $ 2,419,215 $ 1,766,455 $ 4,185,670
Expenses (1,748,483) (1,542,106) $ (788,082) (4,078,671)
--------------- --------------- -------------- ---------------
Pre-tax Income (Loss) $ 670,732 $ 224,349 $ (788,082) $ 106,999
=============== =============== ============== ===============
Geographic revenues were as follows for the six months ended December 31,
2009 2008
---- ----
Domestic 73% 83%
Foreign 27% 17%
ITEM #2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
---------------------------------------------
Results of Operations
---------------------
The Company's revenues for the quarter ended December 31, 2009 were $1,416,114,
34.1% lower than the $2,149,701 for the same period the previous year. For the
six month period ended December 31, 2009, revenues were $3,125,685 as compared
with $4,185,670 the corresponding period a year ago; $1,059,985 or 25.3% lower.
Revenues are comprised of the sale of Products and Services and Royalty and
Contract payments.
6
Product sales were $829,402 for the quarter ended December 31, 2009 as
compared to $1,235,533 for the same period the year before, a $406,131
(32.9%) decrease; lower due to impact to sales from product lines being
sold to Merit Medical Systems, Inc. ("Merit") in February 2009. (We
continued to manufacture for Merit under a transfer agreement at a lower
price until October 2009 at which point Merit was able to manufacture the
products themselves). For the six month period, product sales were
$2,011,106 for the current fiscal year as compared with $2,353,601 or
$342,945 (14.6%) lower than the same period the year before.
Services revenues for the three months ended December 31, 2009 was
$359,491 or $138,259 lower (27.8%) than the $497,750 the corresponding
period the year before. Services revenues for the six months ended
December 31, 2009 was $659,283 or $352,793 (34.9%) lower than the
$1,012,076 the year before. Included in the prior year's revenues was
$145,000 in R&D services in which the project was completed in the prior
fiscal year. The conversion of a customer from contract coatings servicing
to product sales accounted for $303,385 of lower services revenues during
the six month period.
Royalty and Contract revenues include royalties received and the periodic
recurring payments from license, stand still and other agreements for
other than product and services. Included in Royalty and Contract revenues
are revenues from support and supply agreements. Some of the royalties and
support fees are based on the net sales of the final item (to which the
Hydromer technology is applied to) and are subject to the reporting of our
customers. For the quarter ended December 31, 2009, Royalty and Contract
revenues were $227,221, compared to $416,418 the same period a year ago.
For the six month period, Royalty and Contract revenues were $455,296,
compared to $819,993 for the 2009 and 2008 periods, respectively. The
cancellation of a supply and support agreement of $100,000 per month
effective January 1, 2009, replaced by a similar agreement at $35,000 per
month, was the primary factor behind the difference.
As of December 31, 2009, our open sales order book was approximately
$817,000. Although some of the sales orders can be cancelled prior to
production, the Company is of the opinion that no substantial
cancellations will occur. This value is lower than previous reported
periods due to the sale of product lines to Merit and the conclusion of
the production transfer period.
Total Expenses for the quarter ended December 31, 2009 were $1,493,251 as
compared with $2,113,008 the year before, a 29.3% decrease. For the six months
ended December 31, 2008, Total Expenses were $3,475,210 as compared with
$4,106,671 the same period the year before, lower by 15.4%. Reducing this year's
expenses was the gain from the sale of product lines of $335,629.
For the quarter ended December 31, 2009, the Company's Cost of Goods Sold
was $627,263 as compared with $854,238 the year prior, lower by 26.6%. On
a year-to-date basis, Cost of Goods Sold for fiscal 2009 (six months ended
December 31, 2009) was $1,467,457 as compared with $1,646,556 in fiscal
2008, or $179,099 (10.9% lower). Lower product sales, including that from
the sale of product lines to Merit in February 2009, resulted in a lower
Cost of Goods Sold.
Operating expenses were $1,221,493 for the quarter ended December 31, 2009
as compared with $1,191,534 the year before, up $29,959 or 2.5%. For the
six months ended December 31, 2009, Operating Expenses were $2,487,853 as
up $143,305 or 6.1% from the $2,344,548 for the same period the year
before. The increased international focus in our T-HEXX Animal Health
business, including a dedicated product manager, added tradeshow
promotions and marketing expenses resulted in $84,432 in higher costs in
the current period. One time legal fees of $43,367 relating to the freedom
to market clearance review was incurred during the six month period. Such
legal fees allows for a new Hydrogel product launch with legal clearance.
In addition, this year to date includes $22,804 was spent on animal
clinical studies on our soon to be launched DragonhydeTM Hoof Bath
concentrate. There has been highly favorable interest of our non-heavy
metal/non-formalin hoof bath product which we expect market launch in
early 2010. All of the incremental spends this period are directly in
relation towards future revenue sources.
Interest expense, interest income and other income are included in Other
Expenses. Interest expense for the six months ended December 31, 2009 and
December 31, 2008 were $103,595 and $100,005, respectively.
7
A net loss of $77,137 ($0.02 per share) is reported for the quarter ended
December 31, 2009 as compared to net income of $36,693 ($0.01 per share) the
year before. For the six months ended December 31, 2009, a net loss of $349,525
($0.07 per share) compares against net income of $78,999 ($0.02 per share) for
the same period year before, a swing of $428,524.
The cancellation and subsequent entering of a lower valued supply and
support agreement impacted operating income by $390,000 as compared with
the prior year. The transfer price agreement with Merit impacted operating
income by another $262,316. An income tax benefit of $176,209 was recorded
for the six month period.
Re-investment expenditures of Research and Development and patents
expenditures accounted for approximately $436,870 or 20.8% of the
operating expenses.
Financial Condition
Working capital decreased $497,631 during the six months ended December 31,
2009.
Net operating activities used $415,044 during the six month period ended
December 31, 2009.
The net loss, as adjusted for non-cash expenses and less the gain from the
sale of product lines, used $692,076 in cash. Trade receivables
collections provided for $350,082 in cash. Income taxes paid during the
quarter was $73,811.
Investing activities provided $127,464 and financing activities used $23,282
during the six months ended December 31, 2009.
Investing activities for the six months ended December 31, 2009 included
$126,436 for capital expenditures and $156,100 towards the Company's
patent estate. $260,000 in short-term investments matured with $250,000
being reinvested. $400,000 in cash was received, with another $400,000 due
in early 2010 from the sale of product lines. Under financing activities,
the principal portion of debt servicing of the mortgage utilized $23,282
in cash.
As previously reported, until replacement income is achieved, the cancellation
of the $100,000 per month Supply and Support Agreement and the sale of product
lines to Merit, with the sales proceeds representing the future cash flows,
pushes the Company into an operating loss position for the near future. The
timing of new revenues, including that from its anti-microbial,
anti-thrombogenic and cell mitosis technologies and new T-HEXX product lines and
broaden T-HEXX market penetration, are in varying stages, though it is
management's expectations that anything of significance, in the aggregate, are
at least a year away. The T-HEXX Dragonhyde Hoof Care product has been very well
received and we expect sales to begin in early 2010. The Company has a strong
balance sheet to meet its required debt servicing.
ITEM # 3
Disclosure Controls and Procedures
----------------------------------
As of the period covered by this report, the Company carried out an
evaluation, under the supervision and with the participation of our management,
including the Chief Executive Officer and President and the Chief Financial
Officer, of the effectiveness of the design and operation of the disclosure
controls and procedures.
Based upon this evaluation, our Chief Executive Officer and Chief Financial
Officer concluded that, our disclosure controls and procedures were effective
and that there were no changes to our Company's internal control over financial
reporting that have materially affected, or is reasonably likely to materially
affect the Company's internal control over financial reporting during the period
covered by the Company's quarterly report.
PART II - OTHER INFORMATION
The Company operates entirely from its sole location at 35 Industrial Parkway
in Branchburg, New Jersey, an owned facility secured by a mortgage through a
bank.
8
The existing facility will be adequate for the Company's operations for the
foreseeable future.
ITEM # 6. Exhibits
Exhibit No. Description
----------- -----------
31.1 Rule 13a-14(a) Certification of Chief Executive Officer
and President
31.2 Rule 13a-14(a) Certification of Vice President of Finance
and Chief Financial Officer
32.1 Section 1350 Certification of Chief Executive Officer and
Chairman, President
32.2 Section 1350 Certification of Chief Financial Officer and
Vice President of Finance
9
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on his behalf by the
undersigned thereunto duly authorized.
HYDROMER, INC.
/s/ Robert Y. Lee,VP
Robert Y. Lee
Chief Financial Officer
DATE: February 11, 2010
10
EXHIBIT 31.1
I, Manfred F. Dyck, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Hydromer, Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period
covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this quarterly report;
4. The registrant's other certifying officer, Mr. Robert Y. Lee and I am
responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e))
and internal control over financial reporting (as defined in Exchange
Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:
a) designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to
us by others within those entities, particularly during the period in
which this quarterly report is being prepared;
b) designed such internal controls over financial reporting, or caused
such internal controls over financial reporting to be designed under
our supervision, to provide reasonable assurances 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 and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end
of the period covered by this report based on such evaluation; and
d) disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the registrant's
most recent fiscal quarter (the registrant's fourth fiscal quarter in
case of an annual report) that has materially affected, or is
reasonably likely to materially affect, the registrant's internal
control over financial reporting;
5. The registrant's other certifying officer, Mr. Robert Y. Lee 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 functions):
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 officer, Mr. Robert Y. Lee and I have
indicated in this quarterly report whether there were significant
changes in internal controls or in other factors that could
significantly affect internal controls subsequent to the date of our
most recent evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
Date: February 11, 2010
/s/ Manfred F. Dyck
------------------------------------------
Manfred F. Dyck, President and CEO
11
EXHIBIT 31.2
I, Robert Y. Lee, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Hydromer, Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period
covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this quarterly report;
4. The registrant's other certifying officer, Mr. Manfred F. Dyck and I am
responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e))
and internal control over financial reporting (as defined in Exchange
Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:
a) designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to
us by others within those entities, particularly during the period in
which this quarterly report is being prepared;
b) designed such internal controls over financial reporting, or caused
such internal controls over financial reporting to be designed under
our supervision, to provide reasonable assurances 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 and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end
of the period covered by this report based on such evaluation; and
d) disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the registrant's
most recent fiscal quarter (the registrant's fourth fiscal quarter in
case of an annual report) that has materially affected, or is
reasonably likely to materially affect, the registrant's internal
control over financial reporting;
5. The registrant's other certifying officer, Mr. Manfred F. Dyck 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 functions):
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 officer, Mr. Manfred F. Dyck and I
have indicated in this quarterly report whether there were significant
changes in internal controls or in other factors that could
significantly affect internal controls subsequent to the date of our
most recent evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
Date: February 11, 2010
Robert Y. Lee,VP
------------------------------------------
Robert Y. Lee, Vice President of Finance and CFO
12
EXHIBIT 32.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Manfred F. Dyck, certify, pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly
Report of Hydromer, Inc. on Form 10-Q for the six months ended December 31, 2009
fully complies with the requirements of Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 and that information contained in such report fairly
presents in all material respects the financial condition and results of
operations of Hydromer, Inc.
Date: February 11, 2010 By: /s/ Manfred F. Dyck
-------------------------------------
Manfred F. Dyck
Chairman, President and
Chief Executive Officer
--------------------------------------------------------------------------------
EXHIBIT 32.2
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
I, Robert Y. Lee, certify, pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly
Report of Hydromer, Inc. on Form 10-Q for the six months ended December 31, 2009
fully complies with the requirements of Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 and that information contained in such report fairly
presents in all material respects the financial condition and results of
operations of Hydromer, Inc.
Date: February 11, 2010 By: /s/ Robert Y. Lee,VP
-------------------------------------
Robert Y. Lee
Chief Financial Officer
and Vice President of Finance
13