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 March 31, 2010
Commission File Number 0-10683
HYDROMER, INC.
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(Exact name of registrant as specified in its charter)
New Jersey 22-2303576
---------------------- -------------------------
(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 March 31, 2010
----- -----------------------------
Common 4,772,318
FORWARD-LOOKING STATEMENTS
This quarterly report on Form 10-Q contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. Forward-looking statements include, among other
things, business strategy and expectations concerning industry conditions,
market position, future operations, margins, profitability, liquidity and
capital resources. Forward-looking statements generally can be identified by the
use of terminology such as "may," "will," "expect," "intend," "estimate,"
"anticipate" or "believe" or similar expressions or the negatives thereof. These
expectations are based on management's assumptions and current beliefs based on
currently available information. Although the Company believes that the
expectations reflected in such statements are reasonable, it can give no
assurance that such expectations will be correct. You are cautioned not to place
undue reliance on these forward-looking statements, which speak only as of the
date of this quarterly report on Form 10-Q and the Company does not have any
obligation to update the forward looking statements. The Company's operations
are subject to a number of uncertainties, risks and other influences, many of
which are outside its control, and any one of which, or a combination of which,
could cause its actual results of operations to differ materially from the
forward-looking statements.
1
HYDROMER, INC.
INDEX TO FORM 10-Q
March 31, 2010
Page No.
Part I - Financial Information
# 1 Consolidated Financial Statements
Balance Sheets - March 31, 2010 & June 30, 2009 3
Statements of Operations for the three months and nine months ended 4
March 31, 2010 and 2009
Statements of Cash Flows for the nine months ended
March 31, 2010 and 2009 5
Notes to Financial Statements 6
# 2 Management's Discussion and Analysis of the Financial Condition
and Results of Operations 8
# 3 Controls and Procedures 10
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 10
EXHIBIT INDEX
Exhibit No. Description of Exhibit
----------- ----------------------
31.1 SEC Section 302 Certification - CEO certification 13
31.2 SEC Section 302 Certification - CFO certification 14
32.1 Certification of Manfred F. Dyck, Chief Executive Officer,
pursuant to 18 U.S.C. Section 1350 15
32.2 Certification of Robert Y. Lee, Chief Financial Officer,
pursuant to 18 U.S.C. Section 1350 15
2
PART I - CONSOLIDATED FINANCIAL STATEMENTS
ITEM # 1
HYDROMER, INC. AND CONSOLIDATED SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
March 31, June 30,
2010 2009
UNAUDITED AUDITED
ASSETS
Current Assets:
Cash and cash equivalents $ 1,186,790 $ 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 March 31, 2010 and June 30, 2009, respectively 871,724 1,058,978
Inventory 244,059 615,849
Prepaid expenses 194,667 204,280
Deferred tax asset 8,976 8,976
Other 27,011 8,968
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Total Current Assets 2,973,227 3,932,816
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Property and equipment, net 2,978,863 3,135,017
Deferred tax asset, non-current 1,001,512 521,986
Intangible assets, net 841,913 740,426
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Total Assets $ 7,795,515 $ 8,330,245
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 439,102 $ 380,838
Accrued expenses 349,942 341,088
Current portion of capital lease 15,603 14,473
Current portion of deferred revenue 71,331 82,132
Current portion of mortgage payable 47,976 45,696
Income tax payable 1,040 75,891
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Total Current Liabilities 924,994 940,118
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Deferred tax liability 343,967 285,858
Long-term portion of capital lease 38,867 50,258
Long-term portion of deferred revenue 188,934 161,019
Long-term portion of mortgage payable 2,781,757 2,820,055
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Total Liabilities 4,278,519 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 March 31, 2010 and June 30, 2009 3,721,815 3,721,815
Contributed capital 633,150 633,150
Accumulated deficit (831,829) (275,888)
Treasury stock, 10,917 common shares at cost (6,140) (6,140)
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Total Stockholders' Equity 3,516,996 4,072,937
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Total Liabilities and Stockholders' Equity $ 7,795,515 $ 8,330,245
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See accompanying notes
3
HYDROMER, INC. AND CONSOLIDATED SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended Nine months Ended
March 31, March 31,
2010 2009 2010 2009
UNAUDITED UNAUDITED UNAUDITED UNAUDITED
--------------------------------------------------------- ----------------------------- ------------------------------
REVENUES
Sale of products $ 845,734 $ 1,012,814 $ 2,856,840 $ 3,366,415
Service revenues 402,766 635,947 1,062,049 1,648,023
Royalties and Contract Revenues 226,668 183,946 681,964 1,003,939
-------------- ------------ --------------- --------------
TOTAL REVENUES 1,475,168 1,832,707 4,600,853 6,018,377
-------------------------------------------------------- ----------------------------- -------------------------------
EXPENSES
Cost of Sales 526,601 851,318 1,994,058 2,497,874
Operating Expenses 1,316,952 1,295,123 3,804,805 3,639,671
Other Expenses 56,973 151,811 138,611 239,378
Gain from Sale of Assets - (1,293,348) (335,629) (1,293,348)
(Benefit from) Provision for Income Taxes (218,942) 308,000 (445,051) 336,000
-------------- ------------ --------------- --------------
TOTAL EXPENSES 1,681,584 1,312,904 5,516,794 5,419,575
-------------------------------------------------------- ----------------------------- -------------------------------
NET (LOSS) INCOME $ (206,416) $ 519,803 $ (555,941) $ 598,802
-------------------------------------------------------- ----------------------------- -------------------------------
(Loss) Earnings Per Common Share $ (0.04) $ 0.11 $ (0.12) $ 0.13
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
See accompanying notes.
There was no impact to earnings per share from dilutive
securities. For the 2010 period, the resultant would have been anti-dilutive.
4
HYDROMER, INC. AND CONSOLIDATED SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine months Ended
March 31,
2010 2009
UNAUDITED UNAUDITED
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net (Loss) Income $ (555,941) $ 598,802
Adjustments to reconcile net (loss) income to net cash
(used for) provided by operating activities
Gain on Sale of Product Lines (335,629) (1,293,348)
Depreciation and amortization 318,126 313,725
Charge-off of Patent Costs - 63,242
Reserve for Inventories - 100,000
Valuation Allowance on Fixed Assets/Loss on Disposal of - 121,134
Fixed Assets
Deferred income taxes (421,417) 337,652
Changes in Assets and Liabilities:
Trade receivables 187,254 144,516
Inventory 75,296 74,905
Prepaid expenses 9,611 (72,616)
Other assets (18,402) (2,868)
Accounts payable and accrued liabilities 67,118 (172,690)
Deferred income 17,114 (35,391)
Income taxes payable (89,212) (4,772)
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Net Cash (Used for) Provided by Operating Activities (746,082) 172,291
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CASH FLOWS FROM INVESTING ACTIVITIES:
Cash purchases of property and equipment (175,486) (139,744)
Cash payments on patents and trademarks (251,389) (241,314)
Redemption of matured short-term investments 700,000 -
Cash purchases of short-term investments (690,000) (450,000)
Proceeds Received from the sale of Product Lines 800,000 1,066,667
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Net Cash Provided by Investing Activities 383,125 235,609
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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 (36,018) (1,901,202)
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Net Cash (Used for) Provided by Financing Activities (36,018) 708,825
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NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS: (398,975) 1,116,725
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 $ 1,186,790 $ 1,225,128
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See accompanying notes.
5
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
received upon closing in November 2009 with the balance received in March 2010.
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 continued manufacturing the products, at an agreed upon transfer
price, until Forefront completed the transition in April 2010. Accordingly, this
transaction does not meet the criteria of Discontinued Operations of Financial
Accounting Standards Board ("FASB") Accounting Standards Codification paragraphs
205-20. These product lines sold were part of the "Medical Products" segment
(see following Segment Reporting section).
Recent Accounting Pronouncements
--------------------------------
In February 2010, the FASB issued Update No. 2010-08 "Technical Corrections to
Various Topics" (ASU 2010-08). ASU 2010-08 represents technical corrections to
Securities and Exchange Commission (the "SEC") paragraphs within various
sections of the Codification. Management is currently evaluating whether these
changes will have any material impact on its financial position, results of
operations or cash flows.
In February 2010, the FASB issued Update No. 2010-09 "Subsequent Events (Topic
855)" (ASU 2010-09). ASU 2010-09 clarifies the interaction of Accounting
Standards Codification 855 "Subsequent Events" ("Topic 855") with guidance
issued by the SEC as well as the intended breadth of the reissuance disclosure
provision related to subsequent events found in paragraph 855-10-50-4 in Topic
855. This update is effective for annual or interim periods ending after June
15, 2010. Management is currently evaluating whether these changes will have any
material impact on its financial position, results of operations or cash flows.
In April 2010, the FASB issued ASU 2010-17, "Revenue Recognition - Milestone
Method (Topic 605)" (ASU 2010-17). ASU 2010-17 provides guidance on defining a
milestone and determining when it may be appropriate to apply the milestone
method of revenue recognition for research and development transactions. The
Update provides guidance on the criteria that should be met for determining
whether the milestone method of revenue recognition is appropriate. This update
is effective for annual or interim periods ending after June 15, 2010.
Management is currently evaluating whether these changes will have any material
impact on its financial position, results of operations or cash flows.
FAIR VALUE
----------
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 March
31, 2010:
6
---------------- ------------ ----------- ----------- ------------
Level 1 Level 2 Level 3 Total
------- ------- ------- -----
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 nine months ended March 31, by segment are:
Polymer Medical Corporate
Excludes the sale of product lines Research Products Overhead Total
2010
Revenues $ 2,936,347 $ 1,664,506 $ 4,600,853
Expenses (3,000,632) (1,746,469) $ (1,190,373) (5,937,474)
---------------- --------------- ------------ -------------
Pre-tax Loss $ (64,285) $ (81,963) $ (1,190,373) $ (1,336,621)
================ =============== ============= =============
---------------------------------------- ---------------- ----------------- -------------- ----------------
2009
Revenues $ 3,404,319 $ 2,614,058 $ 6,018,377
Expenses (2,602,007) (2,485,763) $ (1,289,153) (6,376,923)
---------------- --------------- ------------ -------------
Pre-tax Income (Loss) $ 802,312 $ 128,295 $ (1,289,153) $ (358,546)
================ =============== ============= =============
Geographic revenues were as follows for the nine months ended March 31,
2010 2009
---- ----
Domestic 72% 83%
Foreign 28% 17%
7
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 March 31, 2010 were $1,475,168,
19.5% lower than the $1,832,707 for the same period the previous year. For the
nine month period ended March 31, 2010, revenues were $4,600,853 as compared
with $6,018,377 the corresponding period a year ago; $1,417,524 or 23.6% lower.
Revenues are comprised of the sale of Products and Services and Royalty and
Contract payments.
Product sales were $845,734 for the quarter ended March 31, 2010 as
compared to $1,012,814 for the same period the year before, a $167,080
(16.5%) decrease; lower due to the impact from the sales of product lines
to Merit Medical Systems, Inc. ("Merit") in February 2009 and to
Forefront Medical Technologies ("Forefront") in November 2009. For the
nine month period, product sales were $2,856,840 for the current fiscal
year period as compared with $3,366,415 or $509,575 (15.1%) lower than
the same period the year before.
Services revenues for the three months ended March 31, 2010 was $402,766
or $233,181 lower (36.7%) than the $635,947 the corresponding period the
year before. Services revenues for the nine months ended March 31, 2010
were $1,062,049 or $585,974 (35.6%) lower than the $1,648,023 the year
before. Included in the prior year's revenues was $192,000 in R&D
services in which the project was completed during that prior fiscal
year. In addition the conversion of a customer from contract coatings
servicing to product sales accounted for $419,165 of lower services
revenues during the current nine 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 March 31, 2010, Royalty
and Contract revenues were $226,668, compared to $183,946 the same period
a year ago. For the nine month period, Royalty and Contract revenues were
$681,964 compared to $1,003,939 for the 2010 and 2009 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 March 31, 2010, our open sales order book was approximately
$412,000. 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 Forefront and the
conclusion of the production transfer period. In addition, a majority of
the Company's sales orders calls for immediate delivery (subject to the
Company's lead time) and thus distorts the periodically reported sales
orders that the Company turns over.
Total Expenses for the quarter ended March 31, 2010 were $1,681,584 as compared
with $1,312,904 the year before, a 28.1% increase. For the nine months ended
March 31, 2010, total expenses were $5,156,794 as compared with $5,419,575 the
same period the year before, lower by 4.8%. Reducing expenses was the gain from
the sale of product lines of $335,629 for fiscal period 2010 and $1,293,348 for
fiscal period 2009
For the quarter ended March 31, 2010, the Company's Cost of Goods Sold
was $526,601 as compared with $851,318 the year prior, lower by 38.1%. On
a year-to-date basis, Cost of Goods Sold for fiscal 2009 (nine months
ended March 31, 2010) was $1,994,058 as compared with $2,497,874 in
fiscal 2009, or $503,816 (20.2% lower). Lower product sales, including
that from the sale of product lines to Merit and Forefront which
concluded the Company's related operations for those product lines in
October 2009 and April 2010 respectively, resulted in a lower Cost of
Goods Sold.
8
Operating expenses were $1,316,952 for the quarter ended March 31, 2010
as compared with $1,295,123 the year before, up $21,829 or 1.7%. For the
nine months ended March 31, 2010, Operating Expenses were $3,804,805, up
$165,134 or 4.5% from the $3,639,671 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,
related travel and marketing expenses resulted in higher costs of
$139,639 in the current nine month period partially offset by patents
write offs of $63,242 during the corresponding period. In addition, one
time legal fees of $47,840 relating to the freedom to market clearance
review was incurred during the nine month period. Such legal fees allows
for a new Hydrogel product launch with legal clearance. In addition, this
year to date includes $34,206 spent on animal clinical studies on our
recently launched DragonhydeTM Hoof Bath Concentrate. 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 nine months ended March 31, 2010 and
March 31, 2009 were $152,817 and $150,383, respectively.
A net loss of $206,416 ($0.04 per share) is reported for the quarter ended March
31, 2010 as compared to net income of $519,803 ($0.11 per share) the year
before. For the nine months ended March 31, 2010, a net loss of $555,941 ($0.12
per share) compared against net income of $598,802 ($0.13 per share) for the
same period year before.
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 sale of product lines to Merit and Forefront had an
approximate $192,000 impact to the revenue change between the years and
the subsequent transfer price agreement further impacted operating income
by another $347,000. An income tax benefit of $445,051 was recorded for
the nine month period.
Re-investment expenditures of Research and Development and patents and
trademarks expenditures accounted for approximately $808,873 or 21.2% of
the operating expenses.
Financial Condition
-------------------
Working capital decreased $944,465 during the nine months ended March 31, 2010.
Net operating activities used $746,082 during the nine month period ended March
31, 2010.
The net loss, as adjusted for non-cash expenses and less the gain from the
sale of product lines, used $994,861 in cash. The net change in other
operating assets and liabilities provided for $248,779 in cash. Income
taxes paid during the year were $134,851.
Investing activities provided $383,125 and financing activities used $36,018
during the nine months ended March 31, 2010.
Investing activities for the nine months ended March 31, 2010 included
$175,486 for capital expenditures and $251,389 towards the Company's
patent estate. $700,000 in short-term investments matured of which
$690,000 was reinvested/renewed. Cash of $800,000 was received from the
sale of product lines. Under financing activities, the principal portion
of debt servicing of the mortgage utilized $36,018 in cash.
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 and
Forefront, 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. The Company has a strong balance sheet
to meet its required debt servicing.
9
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.
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
10
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
Principal Accounting Officer & Chief
Financial Officer
DATE: May 17, 2010
11
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: May 17, 2010
/s/Manfred F. Dyck
------------------------------------------
Manfred F. Dyck, President and CEO
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: May 17, 2010
/s/Robert Y. Lee,VP
------------------------------------------
Robert Y. Lee, Vice President of Finance and CFO
EXHIBIT 32.1
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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 nine months ended March 31, 2010
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: May 17, 2010 By: /s/Manfred F. Dyck
-----------------------
Manfred F. Dyck
Chairman, President and
Chief Executive Officer
--------------------------------------------------------------------------------
EXHIBIT 32.2
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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 nine months ended March 31, 2010
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: May 17, 2010 By: /s/Robert Y. Lee,VP
-----------------------
Robert Y. Lee
Chief Financial Officer and Vice
President of Finance