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, 2011
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 March 31, 2011
-----------------------------
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.
HYDROMER, INC.
INDEX TO FORM 10-Q
March 31, 2011
Page No.
Part I - Financial Information
# 1 Consolidated Financial Statements
Balance Sheets - March 31, 2011 & June 30, 2010 3
Statements of Operations for the three months and nine months ended 4
March 31, 2011 and 2010
Statements of Cash Flows for the nine months ended 5
March 31, 2011 and 2010
Notes to Financial Statements 6
# 2 Management's Discussion and Analysis of the Financial Condition
and Results of Operations 7
# 3 Controls and Procedures 9
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
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31.1 SEC Section 302 Certification - CEO certification 10
31.2 SEC Section 302 Certification - CFO certification 11
32.1 Certification of Manfred F. Dyck, Chief Executive Officer,
pursuant to 18 U.S.C. Section 1350 12
32.2 Certification of Robert Y. Lee, Chief Financial Officer,
pursuant to 18 U.S.C. Section 1350 12
PART I - CONSOLIDATED FINANCIAL STATEMENTS
ITEM # 1
HYDROMER, INC. AND CONSOLIDATED SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
March 31, June 30,
2011 2010
UNAUDITED
ASSETS
Current Assets:
Cash and cash equivalents $ 872,061 $ 843,610
Short-term investments - 440,000
Trade receivables less allowance for doubtful accounts of $28,565 and $33,276 as of
March 31, 2011 and June 30, 2010, respectively 709,462 920,252
Inventory 301,985 248,569
Prepaid expenses 222,921 227,338
Other 16,219 15,487
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Total Current Assets 2,122,648 2,695,256
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Property and equipment, net 2,928,940 2,988,536
Deferred tax asset, non-current 1,213,669 1,011,945
Intangible assets, net 837,766 839,722
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Total Assets $ 7,103,023 $ 7,535,459
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 387,610 $ 342,030
Accrued expenses 275,087 251,276
Current portion of capital lease 17,253 16,000
Current portion of deferred revenue 189,413 75,828
Current portion of mortgage payable 50,847 48,800
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Total Current Liabilities 920,210 733,934
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Deferred tax liability 283,375 318,375
Long-term portion of capital lease 21,072 34,716
Long-term portion of deferred revenue 147,092 165,813
Long-term portion of mortgage payable 2,728,463 2,769,036
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Total Liabilities 4,100,212 4,021,874
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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, 2011 and June 30, 2010 3,721,815 3,721,815
Contributed capital 633,150 633,150
Accumulated deficit (1,346,014) (835,240)
Treasury stock, 10,917 common shares at cost (6,140) (6,140)
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Total Stockholders' Equity 3,002,811 3,513,585
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Total Liabilities and Stockholders' Equity $ 7,103,023 $ 7,535,459
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See accompanying notes
HYDROMER, INC. AND CONSOLIDATED SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended Nine months Ended
March 31, March 31,
2011 2010 2011 2010
UNAUDITED UNAUDITED UNAUDITED UNAUDITED
--------------------------------------------------------- ----------------------------- ------------------------------
REVENUES
Sale of Products $ 1,070,400 $ 845,734 $ 2,281,134 $ 2,856,840
Service Revenues 274,326 402,766 1,044,715 1,062,049
Royalties and Contract Revenues 206,316 226,668 687,210 681,964
------------- ------------ -------------- -------------
TOTAL REVENUEs 1,551,042 1,475,168 4,013,059 4,600,853
--------------------------------------------------------- ----------------------------- ------------------------------
EXPENSES
Cost of Sales 483,068 526,601 1,231,650 1,994,058
Operating Expenses 1,101,305 1,316,952 3,378,516 3,804,805
Other Expenses 58,961 56,973 157,523 138,611
Gain from Sale of Assets - - - (335,629)
(Benefit) from Income Taxes (34,424) (218,942) (243,856) (445,051)
------------- ------------ -------------- -------------
Total Expenses 1,608,910 1,681,584 4,523,833 5,156,794
--------------------------------------------------------- ----------------------------- ------------------------------
NET LOSS $ (57,868) $ (206,416) $ (510,774) $ (555,941)
--------------------------------------------------------- ----------------------------- ------------------------------
Loss Per Common Share $ (0.01) $ (0.04) $ (0.11) $ (0.12)
Weighted Average Number of
Common Shares Outstanding 4,772,318 4,772,318 4,772,318 4,772,318
See accompanying notes.
There was no impact to earnings per share from dilutive
securities as the resultant would have been
anti-dilutive.
HYDROMER, INC. AND CONSOLIDATED SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine months Ended
March 31,
2011 2010
UNAUDITED UNAUDITED
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss $ (510,774) $ (555,941)
Adjustments to reconcile net loss to net cash used for
operating activities
Gain on sale of product lines - (335,629)
Depreciation and amortization 303,122 318,126
Deferred income taxes (243,856) (421,417)
Changes in Assets and Liabilities:
Trade receivables 210,790 187,254
Inventory (53,416) 75,296
Prepaid expenses 600 9,611
Other assets 6,400 (18,402)
Accounts payable and accrued liabilities 69,511 67,118
Deferred income 94,864 17,114
Income taxes payable - (89,212)
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Net Cash Used in Operating Activities (122,759) (746,082)
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CASH FLOWS FROM INVESTING ACTIVITIES:
Cash purchases of property and equipment (110,254) (175,486)
Cash payments on patents and trademarks (140,010) (251,389)
Redemption of matured short-term investments 440,000 700,000
Cash purchases of short-term investments - (690,000)
Proceeds Received from the sale of Product Lines - 800,000
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Net Cash Provided by Investing Activities 189,736 383,125
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CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of long-term borrowings (38,526) (36,018)
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Net Cash Used in Financing Activities (38,526) (36,018)
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NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS: 28,451 (398,975)
Cash and Cash Equivalents at Beginning of Period 843,610 1,585,765
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Cash and Cash Equivalents at End of Period $ 872,061 $ 1,186,790
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Non-Cash Investing and Financing Activities:
Note Receivable in exchange for Sale of Product Lines $ 400,000
See accompanying notes.
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.
Foreign Currency Translations:
The Company accounts for foreign currency translation pursuant to Financial
Accounting Standards Board ("FASB") Accounting Standards Codification
("ASC") 830-20, "Foreign Currency Transaction". The Company's functional
currency is the United States Dollar. All assets and liabilities are translated
into United States dollars using the rates prevailing at the end of the period.
Revenues and expenses are translated using the average exchange rates prevailing
throughout the period. Unrealized foreign exchange amounts resulting from
transactions at different rates according to their nature are included in
accumulated other comprehensive income or loss. Recognized foreign currency
transaction gains and losses are recognized in the operations.
Comprehensive Income (Loss):
The Company applies the provision of FASB's ASC 220-10, "Reporting
Comprehensive Income." Unrealized gains and losses from foreign exchange
translations are reported in the consolidated statements of shareholders'
deficit as comprehensive income (loss). As of March 31, 2011, there was no
comprehensive income (loss).
Subsequent Events:
Due to the net loss for the nine months ended March 31, 2011, the Company did
not meet two mortgage covenants. A waiver has been granted by the lender for the
period. Although a waiver was granted by the lender, there is no certainty that
future waivers would be granted.
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
called 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 ASC
205-20. These product lines sold were part of the "Medical Products"
segment (see following Segment Reporting section).
Fair Value:
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 (primarily the salaries and benefits of senior management, support
services (Accounting, Legal, Human Resources and Purchasing) and other shared
services (building maintenance and warehousing) are 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
Research Products Overhead Total
2011
Revenues $ 3,027,098 $ 985,961 $ 4,013,059
Expenses (2,614,565) (932,786) $ (1,220,338) (4,767,689)
--------------- ---------------- ------------- ---------------
Pre-tax Income (Loss) $ 412,533 $ 53,175 $ (1,220,338) $ (754,630)
=============== ================ ============= ===============
---------------------------------------- ---------------- ----------------- -------------- ----------------
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 Income (Loss) $ (64,285) $ (81,963) $ (1,190,373) $ (1,336,621)
============== ============ ============= ==============
* includes the results of operations of the sold Product Lines but excludes
the actual Sales transaction.
Geographic revenues were as follows for the nine months ended March 31,
2011 2010
---- ----
Domestic 59% 72%
Foreign 41% 28%
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, 2011 were $1,551,042,
$75,874 or 5.1% higher than the $1,475,168 for the same period the previous
year. For the nine month period ended March 31, revenues were $4,013,059 during
the 2011 year, as compared with $4,600,853 the year before or $587,794 lower
(12.8%). Revenues are comprised of the sale of Products and Services and Royalty
and Contract payments.
Product sales were $1,070,400 for the quarter ended March 31, 2011 as
compared to $845,734 for the same period the year before, a $224,666
(26.6%) increase: higher due to an increase in Dragonhyde(R) Hoof Bath
Concentrate sales of $232,636, primarily in Europe. The quarter ended
March 31, 2010 included $99,181 in transitional sales from the medical
device product lines sold in November 2009. For the nine month period
ended March 31, 2011, product sales were $2,281,134 as compared with
$2,856,840 or $575,706 (20.2%) lower than the same period the year before.
Sales from the divested product lines (including of the product lines sold
in April 2009 with its transition period carrying operations into October
2010) accounted for approximately $798,074 of the difference, offset by
$311,856 in higher Dragonhyde Hoof Bath Concentrates sales. The 2011
results would have been better had it not been for toll manufacturing
delays that prevented over $132,000 of additional sales from occurring in
March.
Services revenues, primarily contract coating services, for the three
months ended March 31, 2011 was $274,326 or $128,440 lower (31.9%) than
the $402,766 the corresponding period the year before, primarily timing
differences as overall, Services revenues for the nine months ended March
31, 2011 was $1,044,715 or $17,334 lower (1.6%) than the $1,062,049 the
corresponding period the year before.
Royalty and Contract revenues include royalties received and the periodic
recurring payments from license, stand still and other agreements other
than for 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, 2011, Royalty and Contract
revenues were $206,316, compared to $226,668 the same period a year ago.
For the nine months ended March 31, 2011, Royalty and Contract revenues
were $687,210, compared with the previous year's $681,964. We continue
entering into new Royalty and Contract revenue agreements, some which
begin with our customer's first commercial sale of their product. Once
online, including with the commercialization of one of our hydrogel
technologies, we anticipate a doubling of this revenue line within the
next few years.
When excluding the revenues from the divested product lines, we are
reporting a 5.5% gain in total revenues this year's period; a 9.0% gain
had they not been any toll manufacturing delays in March 2011. We expect
continued revenue growth, particularly in our T-HEXX(R) Animal Health
business where a majority of our research and development during the past
two years has been focused upon.
Total Expenses for the quarter ended March 31, 2011 were $1,608,910 as compared
with $1,681,584 the year before, a 4.3% decrease. For the nine months ended
March 31, 2011, total expenses were $4,523,833 as compared with $5,156,794 the
same period the year before, or an improvement of 12.3%. Reducing expenses for
the nine months ended March 31, 2010 was the gain from the sale of product lines
of $335,629. When excluding the gain from sale of product lines, total expenses
for the nine months ended March 31, 2010 would have been $5,492,423 or with the
current period $968,590 (17.6%) better.
For the quarter ended March 31, 2011, the Company's Cost of Goods Sold was
$483,068 as compared with $526,601 the year prior, lower by $43,533 or
8.3%. The Cost of Goods Sold attributed to the sold product lines
approximated $5,171 in the March 2011 quarter as compared with
approximately $137,511 in the March 2010 quarter with the cost reduction
offset by the higher material Cost of Goods Sold from the increase in
[Dragonhyde] product sales revenues. The Cost of Goods Sold for the nine
month period was $1,231,650 or $762,408 better (38.2%) than the prior
year's $1,994,058, which included approximately $836,744 relating to the
divested product lines.
Operating expenses were $1,101,305 for the quarter ended March 31, 2011 as
compared with $1,316,952 the year before, lower by $215,647 or 16.4%. For
the nine month period, Operating expenses were $3,378,516 this year
compared with $3,804,805 the year before, an improvement of $426,289
(11.2%). Most of the reduction to Operating expenses related to a lower
staffing level, including in part due to the divestiture of the medical
device product lines, as offset by increases in marketing and sales
expenses in our T-HEXX Animal Health business (added tradeshow promotions
and related travel and marketing expenditures).
Interest expense, interest income and other income are included in Other
Expenses. Interest expense (on the mortgage) for the nine months ended
March 31, 2011 and March 31, 2010 were $149,037 and $152,823,
respectively. Included in Other Income for the 2010 period was the gain
from the sale of product lines of $335,629.
A net loss of $57,868 ($0.01 per share) is reported for the quarter ended March
31, 2011 as compared to a net loss of $206,416 ($0.04 per share) the year
before. For the nine months ended March 31, 2011, a net loss of $510,774 ($0.11
per share) is reported compared against a net loss of $555,941 ($0.12 per share)
for the same period year before.
Despite sales being $587,794 lower this year-to-date, of which
approximately $798,074 was attributable to the sale of the medical device
product lines, expense reductions, including that beyond relating to the
sold product lines, totaled $632,961. When excluding the $335,629 gain on
the sale of product lines and its related tax expense, total expenses were
approximately $837,695 lower this year. The Company expects to continue
improvements to its results coming from increasing revenues with modest
increases to its expense base, primarily in expanded sales and marketing
costs, including that of new sales representatives.
Financial Condition
Working capital decreased $61,338 during the three months ended March 31, 2011
and $753,449 during the nine months then ended.
For the three months ended March 31, 2011, operating activities provided
$366,853 in net cash. For the nine month period ended March 31, 2011 net cash of
$122,759 was used.
The net loss, as adjusted for non-cash expenses of depreciation and
amortization and deferred income taxes, used $451,508 in cash. The net
change in other operating assets and liabilities provided $328,749 in
cash, with the primarily activities being the collection of trade
receivables and customer prepayments and increased accounts payable and
accrued expenses as offset by higher inventories, in part due to the toll
manufacturer delays.
Investing activities provided $189,736 and financing activities used $38,526
during the nine months ended March 31, 2011.
Investing activities for the nine months ended March 31, 2011 included
$110,254 for capital expenditures and $140,010 towards the Company's
patent estate. $440,000 in short-term investments matured and was
converted into cash. Reported under Financing activities was the repayment
of the principal portion of the mortgage.
For the quarter ended March 31, 2011, we were near break-even. This is a
tremendous turnaround following a $780,000 annual loss in support fees/cash
effective January 1, 2009 and an annualized $2 million+ loss in revenues (an
approximate loss of $400,000+ in pre-tax profits) related to the medical device
product lines sold in 2009. With a continued market penetration from our
recently introduced products and the medical coatings introduced years prior,
completing their [clinical] evaluations by our customers, we expect a return to
profitability soon.
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
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 Lee, VP
Robert Y. Lee
Principal Accounting Officer & Chief Financial Officer
DATE: May 23, 2011
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 23, 2011
/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 23, 2011
/s/ Robert Lee, VP
--------------------------------------
Robert Y. Lee, Vice President of Finance and CFO
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 nine months ended March 31, 2011
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 23, 2011 By: /s/ Manfred F. Dyck
Manfred F. Dyck
Chairman, President and Chief Executive Officer
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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 nine months ended March 31, 2011
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 23, 2011 By: /s/ Robert Lee, VP
Robert Y. Lee
Chief Financial Officer and Vice President of Finance