SOURCE: Hydromer, Inc.

Hydromer, Inc. - 10-Q

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

_________________

FORM 10-Q

_________________

 ?    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: December 31, 2012

or

?     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from: ______ to ______

_________________

HYDROMER INC.

(Exact name of registrant as specified in its charter) 

_________________

New Jersey

001-31238

22-2303576

(State or Other Jurisdiction

(Commission

(I.R.S. Employer

of Incorporation or Organization)

File Number)

Identification No.)

35 Industrial Pkwy, Branchburg, New Jersey 08876-3424             
(Address of Principal Executive Offices) (Zip Code)

(908) 722-5000
(Registrant’s telephone number, including area code)

N/A
(Former name or former address and former fiscal year, if changed since last report)

_________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ???????????????????????????????No ???????

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes  ???????????????????????????????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  ?

 Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes  ??????????????    No ?

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of the issuer's common stock, as of the latest practical date: As of December 31, 2012 There were 4,772,318 shares outstanding

 

 

 

 

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

 

 

December 31, 2012

 

 

 

 

 

 

 

 

 

Page No.

Part I - Financial Information

 

 

 

 

 

Item 1 Condensed Consolidated Financial Statements

 

 

 

 

 

Condensed Consolidated Balance Sheets

 

 

as of December 31, 2012 & June 30, 2012

 

 

 

 

 

Condensed Consolidated Statements of Operations

 

 

for the three and six months ended December 31, 2012 and 2011

 

 

 

 

 

Condensed Consolidated Statements of Cash Flows

 

 

for the six months ended December 31, 2012 and 2011

 

 

 

 

 

Notes to Condensed Consolidated Financial Statements

 

 

 

 

 

Item 2 Management's Discussion and Analysis of Financial Condition

 

 

and Results of Operations

1

 

 

 

 

Item 3 Quantitative and Qualitative Disclosures about Market Risk

N/A

 

 

 

 

Item 4 Controls and Procedures

4

 

 

 

Part II - Other Information

 

 

 

 

 

Item 1 Legal Proceedings

N/A

 

Item 1A. Risk Factors

N/A

 

Item 2 Unregistered Sales of Equity Securities and Use of Proceeds

N/A

 

Item 3 Defaults Upon Senior Securities

N/A

 

Item 4 Mine Safety Disclosures

N/A

 

Item 5 Other Information

N/A

 

Item 6 Exhibits

4

 

Signatures

5

 

 

 

 

 

 

 

EXHIBIT INDEX

 

 

 

 

Exhibit No.

Description of Exhibit

 

31.1

SEC Section 302 Certification – CEO certification

 

31.2

SEC Section 302 Certification – CFO certification

 

32.1

Certification of Manfred F. Dyck, Chief Executive Officer,

 

 

pursuant to 18 U.S.C. Section 1350

 

32.2

Certification of Robert Y. Lee, Chief Financial Officer,

 

 

pursuant to 18 U.S.C. Section 1350

 

 

 

Part I – Financial Information

Item 1 Condensed Consolidated Financial Statements

 

HYDROMER, INC. and CONSOLIDATED SUBSIDIARY

CONDENSED CONSOLIDATED BALANCE SHEETS

 

 

 

 

 

 

 

 

 

 

 

December 31,2012

 

 

June 30,2012

 

 

 

 

 

(unaudited)

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

$

294,842

 

$

280,878

 

 

 

Trade Receivables less allowance for doubtful accounts of $7,255 and $5,622 as of December 31, 2012 and June 30, 2012, respectively

 

814,224

 

 

993,378

 

 

 

Inventory

 

346,331

 

 

309,369

 

 

 

Prepaid Assets

 

170,472

 

 

207,207

 

 

 

Other

 

117,603

 

 

3,485

 

 

 

Total Current Assets

 

1,743,472

 

 

1,794,317

 

 

 

 

 

 

 

 

 

 

 

 

Property and Equipment, net

 

2,601,900

 

 

2,682,221

 

 

 

Deferred tax asset, non-current

 

1,274,859

 

 

1,267,311

 

 

 

Intangible assets, net

 

746,917

 

 

761,519

 

 

 

Other

 

49,107

 

 

20,358

 

 

 

Total Assets

$

6,416,255

 

$

6,525,726

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES & STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

Accounts Payable

$

497,224

 

$

385,113

 

 

 

Accrued Expenses

 

237,626

 

 

342,361

 

 

 

Current portion of capital lease

 

5,887

 

 

16,499

 

 

 

Current portion of deferred revenue

 

126,399

 

 

135,323

 

 

 

Current portion of mortgage payable

 

57,855

 

 

55,899

 

 

 

Total Current Liabilities

 

924,991

 

 

935,195

 

 

 

 

 

 

 

 

 

 

 

 

Deferred Tax Liability

 

251,758

 

 

251,758

 

 

 

Long term portion of deferred revenue

 

121,359

 

 

145,593

 

 

 

Long term portion of mortgage payable

 

2,625,655

 

 

2,656,239

 

 

 

Total Liabilities

 

3,923,763

 

 

3,988,785

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders' Equity

 

 

 

 

 

 

 

 

Preferred Stock - no par value, authorized 1,000,00 shares; no shares issued and outstanding

 

  

 

 

  

 

 

 

Common Stock - no par value, authorized 15,000,00 shares; 4,783,235 shares issued and 4,772,318 shares outstanding as of December 31, 2012 and June 30, 2012

 

3,721,815

 

 

3,721,815

 

 

 

Contributed capital

 

633,150

 

 

633,150

 

 

 

Accumulated deficit

 

(1,856,333

)

 

(1,811,884

)

 

 

Treasury stock, 10,917 common shares at cost

 

(6,140

)

 

(6,140

)

 

 

Total Stockholders' Equity

 

2,492,492

 

 

2,536,941

 

 

 

Total Liabilities and Stockholders' Equity

$

6,416,255

 

$

6,525,726

 

 

 

 

See accompanying notes

 

 

 

 

HYDROMER, INC. and CONSOLIDATED SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

 

December 31,

 

December 31,

 

 

2012

 

2011

 

2012

 

2011

 

 

 

 

 

 

 

 

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales of Products

 

$

681,321

 

 

$

744,189

 

 

$

1,277,403

 

 

$

1,501,239

 

Service Revenues

 

 

335,167

 

 

 

371,248

 

 

 

656,938

 

 

 

721,647

 

Royalties and contract revenues

 

 

315,140

 

 

 

277,271

 

 

 

663,777

 

 

 

618,419

 

Total Revenues

 

 

1,331,628

 

 

 

1,392,708

 

 

 

2,598,118

 

 

 

2,841,305

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of Sales

 

 

405,097

 

 

 

422,119

 

 

 

765,246

 

 

 

838,131

 

Operating Expenses

 

 

938,745

 

 

 

1,037,556

 

 

 

1,900,213

 

 

 

2,142,881

 

Other (Income) Expenses

 

 

(67,665

)

 

 

54,981

 

 

 

(17,344

)

 

 

106,240

 

Provision for (Benefit from) Income Taxes

 

 

22,078

 

 

 

(46,862

)

 

 

(5,548

)

 

 

(84,672

)

Total Expenses

 

 

1,298,255

 

 

 

1,467,794

 

 

 

2,642,567

 

 

 

3,002,580

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income (Loss)

 

$

33,373

 

 

$

(75,086

)

 

$

(44,449

)

 

$

(161,275

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (Loss) Per Common Share

 

$

0.01

 

 

$

(0.02

)

 

$

(0.01

)

 

$

(0.03

)

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 result would have been anti-dilutive.

 

 

 

 

HYDROMER, INC. and CONSOLIDATED SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

 

 

 

 

 

 

 

Six Months Ended

 

 

December 31,

 

 

2012

2011

 

Cash Flows from Operating Activities:

 

 

 

 

 

 

 

 

Net Loss

 

$

(44,449

)

$

(161,275

)

 

Adjustments to reconcile net loss to net cash provided by (used in) operating activities

Depreciation and Amortization

 

 

197,967

 

 

209,654

 

 

Deferred income taxes

 

 

(7,548

)

 

(86,672

)

 

Changes in Assets and Liabilities

 

 

 

 

 

 

 

 

Trade receivables

 

 

179,154

 

 

(42,490

)

 

Inventory

 

 

(36,962

)

 

135,578

 

 

Prepaid expenses

 

 

9,884

 

 

44,669

 

 

Other assets

 

 

(142,867

)

 

7,305

 

 

Accounts payable and accrued liabilities

 

 

9,215

 

 

(73,545

)

 

Deferred income

 

 

(33,158

)

 

(106,291

)

 

Income taxes payable

 

 

(2,000

)

 

(2,000

)

 

Net Cash Provided by (Used in) Operating Activities

 

 

153,236

 

 

(75,067

)

 

 

 

 

 

 

 

 

 

 

Cash Flows from Investing Activities:

 

 

 

 

 

 

 

 

Cash purchases of property and equipment

 

 

(28,667

)

 

(31,880

)

 

Cash payments on patents and trademarks

 

 

(81,977

)

 

(57,756

)

 

Redemption of matured short-term investments

 

 

0

 

 

50,000

 

 

Net Cash Used in Investing Activities

 

 

(110,644

)

 

(39,636

)

 

 

 

 

 

 

 

 

 

 

Cash Flows from Financing Activities:

 

 

 

 

 

 

 

 

Repayment of long-term borrowings

 

 

(28,628

)

 

(26,733

)

 

Net Cash Used in Financing Activities

 

 

(28,628

)

 

(26,733

)

 

 

 

 

 

 

 

 

 

 

Net Increase (Decrease) in Cash and Cash equivalents

 

 

13,964

 

 

(141,436

)

 

 

 

 

 

 

 

 

 

 

Cash and Cash equivalents, Beginning of Period

 

 

280,878

 

 

502,597

 

 

Cash and Cash equivalents, End of Period

 

$

294,842

 

$

361,161

 

 

 See accompanying notes.

 

 

 


HYDROMER, INC. and CONSOLIDATED SUBSIDIARY

Notes to Condensed Consolidated Financial Statements

 

Basis of Presentation:

In the opinion of management, the accompanying unaudited condensed financial statements include all adjustments (consisting of only normal adjustments) necessary for a fair presentation of the results for the interim periods. These condensed financial statements, including notes, have been prepared in accordance with the applicable rules of the Securities and Exchange Commission and do not include all of the information and disclosures required by accounting principles generally accepted in the United States of America. The condensed financial statements should be read in conjunction with the consolidated financial statements and other information contained in our Annual Report on Form 10-K for the year ended June 30, 2012. The condensed balance sheet at June 30, 2012 was derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America.

 

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 six months ended December 31, by segment are:

 

 

 

 

Polymer

 

 

 

Medical

 

 

 

Corporate

 

 

 

 

 

 2012

 

 

 

Research

 

 

 

Products

 

 

 

Overhead

 

 

 

Total

 

Revenues

 

 

$

1,944,602

 

 

$

653,516

 

 

 

 

 

 

$

2,598,118

 

Expenses

 

 

 

(1,348,090

)

 

 

(572,066

)

 

$

(727,959

)

 

 

(2,648,115

)

Pre-tax Income (Loss)

 

 

$

596,512

 

 

$

81,450

 

 

$

(727,959

)

 

$

(49,997

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2011

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

 

$

2,177,765

 

 

$

663,540

 

 

 

 

 

 

$

2,841,305

 

Expenses

 

 

 

(1,764,113

)

 

 

(526,722

)

 

$

(796,417

)

 

 

(3,087,252

)

Pre-tax Income (Loss)

 

 

$

413,652

 

 

$

136,818

 

 

$

(796,417

)

 

$

(245,947

)

 

 

Geographic revenues were as follows for the six months ended December 31,

 

 

2012

 

2011

 

Domestic

 

 

 

72

%

 

 

63

%

 

Foreign

 

 

 

28

%

 

 

37

%

 

 

Inventory

Inventory consists of:

 

December 31, 2012

June 30, 2012

Finished goods

$ 179,046

$ 132,673

Work in process

2,232

6,156

Raw materials

165,053

170,540

 

$ 346,331

$ 309,369

 

1

 

 

 

ITEM 2 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

Results of Operations

 

The Company’s revenues for the quarter ended December 31, 2012 were $1,331,628, $61,080 or 4.4% lower than the $1,392,708 for the same period the previous year. For the six month period ended December 31, revenues were $2,598,118 during the current fiscal year, as compared with $2,841,305 the year before or $243,187 lower (8.6%). Revenues are comprised of the sale of Products and Services and Royalty and Contract payments.

 

Product sales were $681,321 for the quarter ended December 31, 2012 as compared to $744,189 for the same period the year before, a $62,868 (8.5%) decrease primarily due to the timing of periodic (non-monthly) sales and the drop off in T-HEXX Dragonhyde Hoof Bath Concentrate sales in Europe due to the high landed cost the end user is facing. Our recently launched Dragonhyde DUST dissolvable hoof bath powder being released to Europe in 2013 should alleviate that issue. (The recommended usage of Dragonhyde DUST, which can be shipped by regular mail, is a 1 kg pouch as compared with one gallon of Dragonhyde Hoof Bath Concentrate (which weighs approximately 4 kg) which needs special handling.) The majority of the customers that ordered on a periodic basis during the 2011 period also ordered in our fiscal quarter ended June 30, 2012 which meant that their new orders are expected in early 2013. Such sales decrease was offset by an increased demand for our anti-fog condensation control coatings, Cosmetics / Personal Care intermediaries and medical device coatings. For the six month period, product sales were $1,277,403 for the 2012 period as compared with $1,501,239 for the 2011 period, lower by $223,836 (14.9%), all attributable to the T-HEXX Animal Health line.

Services revenues, comprised of contract coating services, for the three months ended December 31, 2011 were $335,167 or $36,081 lower (9.7%) than the $371,248 the corresponding period the year before. For the six month periods ended December 31, 2012 and December 31, 2011, services revenues were $656,938 and $721,647, respectively, or $64,709 lower (9.0%). Customers exiting their respective business on products utilizing our contract coating services plus those converting to their own coating application while becoming a medical chemical polymer purchaser lowered the services revenues as compared with the prior period. These “converted” customers allow for additional revenues from medical device coating [product] sales (as reported above) and Supply and Support Agreements (see Royalty and Contract revenues following).

Classified as Royalty and Contract revenues are royalties received and the periodic recurring payments from license, stand still and other agreements other than for product and services, including revenues from support and supply agreements (which avails our customers to continued technical support and/or guaranteed access to our proprietary coatings) and may include the transfer of technical know-how (coatings procedures). Some of the royalties and support fees are based on the net sales of the final item (to which the Hydromer technology is applied) and are subject to the reporting of our customers. For the six months ended December 31, 2012, Royalty and Contract revenues were $663,777, compared to $618,419 the same period a year ago, an increase of $45,358 (7.3%), a result of a new customer converting to Hydromer coatings under a royalty agreement.

2

 

Total Expenses for the quarter ended December 31, 2012 were $1,298,255 as compared with $1,467,794 the year before, a 11.6% decrease. For the six months ended December 31, 2012, Total Expenses were $2,642,567 as compared with $3,002,580 the previous year, a 12.0% decrease.

Reducing Total Expenses and included in Other Income for the quarter ended December 31, 2012 was $115,344 in income recognized of the proceeds from the Company’s insurance carrier, a mutual company having no shareholders, making distributions from it being acquired. There will be additional periodic payments which the Company will include in Other Income.


For the quarter ended December 31, 2012, the Company’s Cost of Goods Sold was $405,097 as compared with $422,119 the year prior, lower by $17,022 or 4.0%, a result of the lower product sales. For the six month period ended December 31, 2012, Cost of Goods Sold was $765,246 as compared with $838,131 the same period a year ago. The $72,885 decrease (8.7%) was due to lower product sales.

Operating Expenses were $938,745 for the quarter ended December 31, 2012 as compared to $1,037,556 the year before, lower by $98,811 or 9.5%, due to lower staffing levels this year. For the six months ended December 31, 2012, Operating Expenses were $1,900,213 or $242,668 lower (11.3%) than the previous year’s $2,142,881, primarily due to operating on a lower staffing level.

In addition to the one time $115,344 distribution recognized as income, Other Income / Expenses includes interest expense, foreign currency exchange gains/losses and interest income. Interest expense (primarily mortgage interest) for the six months ended December 31, 2012 and December 31, 2011 was $97,201 and $98,743, respectively.

Net income of $33,373 ($0.01 per share) is reported for the quarter ended December 31, 2012 as compared to a net loss of $75,086 ($0.02 per share) the year before. For the six months ended December 31, 2012, a net loss of $44,449 ($0.01 per share) is reported as compared to a net loss of $161,275 ($0.03 per share) the year before.

Maintaining or reducing expenses is part of the Company’s strategy in its return to profitability. Along with revenue increases (due to new products or the market penetration of current products), the Company expects to achieve profitability. While we did not see a net growth in revenue during the current period (as compared with the prior year), we expect that to occur soon.

Financial Condition

Working capital decreased $40,641 during the six months ended December 31, 2012.

For the six months ended December 31, 2012, operating activities provided $153,236 in net cash.

The net loss, as adjusted for non-cash expenses of depreciation and amortization and deferred income taxes, provided $145,970 in cash. The net change in operating assets and liabilities provided an additional $7,266 in cash. Reductions to accounts receivable and prepaid expenses were offset by the increase to other assets (the distribution by the insurance carrier, which was received in mid-January 2013).

Investing activities used $110,644 and financing activities used $28,628 during the six months ended December 31, 2012.

Investing activities for the six months ended December 31, 2012 included $28,667 for capital expenditures and $81,977 towards the Company’s patent estate. Under Financing activities was the repayment of the principal portion of the mortgage.

The Company is nearing a return to profitability. Cost management and revenue growth are the key factors and while we did not reach the same revenue levels achieved a year ago, it is certainly within reach. During the past few years, the Company’s R&D resources were dedicated to its T-HEXX Animal Health product line as that could yield the quickest revenue return (as compared with the much longer term human medical product line). Some of the recent developments in the T-HEXX product line are being rolled out into the market.

 

3

 

 

Item 4 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 are 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

 

4

 

 

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.

 

 

Date: February 15, 2013

Hydromer

 

By: /s/ Robert Y. Lee

 

Robert Y. Lee
Principal Accounting officer & Chief Financial Officer

 

 

 

5

 

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

 

 

 

 

 

Date: February 15, 2013

Hydromer

 

By: /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

 

Date: February 15, 2013

Hydromer

 

By: /s/ Robert Y. Lee

 

Robert Y. Lee
Principal Accounting officer & Chief Financial Officer

 

 

 

 

 

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, 2012 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 15, 2013

Hydromer

 

By: /s/ Manfred F. Dyck

 

Manfred F. Dyck
President and CEO

 

 

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, 2012 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 15, 2013

Hydromer

 

By: /s/ Robert Y. Lee

 

Robert Y. Lee
Principal Accounting officer & Chief Financial Officer