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 September 30, 2009
Commission File Number 0-10683
HYDROMER, INC.
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(Exact name of registrant as specified in its charter)
New Jersey 22-2303576
---------------------- -------------------------
(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
-------------------------
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 September 30, 2009
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Common 4,772,318
HYDROMER, INC.
INDEX TO FORM 10-Q
September 30, 2009
Page No.
Part I - Financial Information
# 1 Consolidated Financial Statements
Balance Sheets - September 30, 2009 & June 30, 2009 2
Statements of Income for the three months ended
September 30, 2009 and 2008 3
Statements of Cash Flows for the three months ended
September 30, 2009 and 2008 4
Notes to Financial Statements 5
# 2 Management's Discussion and Analysis of the Financial Condition
and Results of Operations 7
# 3 Controls and Procedures 7
Part II - Other Information
# 1 Legal Proceedings N/A
# 2 Change in Securities N/A
# 3 Default of Senior Securities N/A
# 4 Submission of Motion to Vote of Security Holders N/A
# 5 Other Information N/A
# 6 Exhibits 9
EXHIBIT INDEX
Exhibit No. Description of Exhibit
----------- ----------------------
31.1 SEC Section 302 Certification - CEO certification 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
1
PART I - CONSOLIDATED FINANCIAL STATEMENTS
ITEM # 1
HYDROMER, INC. AND CONSOLIDATED SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
September 30, June 30,
2009 2009
UNAUDITED AUDITED
ASSETS
Current Assets:
Cash and cash equivalents $ 1,102,636 $ 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 September 30, 2009
and June 30, 2009, respectively 1,081,948 1,058,978
Inventory 621,219 615,849
Prepaid expenses 161,348 204,280
Deferred tax asset 8,976 8,976
Other 8,554 8,968
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Total Current Assets 3,424,681 3,932,816
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Property and equipment, net 3,140,451 3,135,017
Deferred tax asset, non-current 698,195 521,986
Intangible assets, net 778,170 740,426
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Total Assets $ 8,041,497 $ 8,330,245
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 474,723 $ 380,838
Accrued expenses 297,117 341,088
Current portion of capital lease 14,473 14,473
Current portion of deferred revenue 85,965 82,132
Current portion of mortgage payable 46,371 45,696
Income tax payable 15,891 75,891
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Total Current Liabilities 934,540 940,118
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Deferred tax liability 284,503 285,858
Long-term portion of capital lease 46,646 50,258
Long-term portion of deferred revenue 167,154 161,019
Long-term portion of mortgage payable 2,808,104 2,820,055
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Total Liabilities 4,240,947 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 September 30, 2009 and June 30,2009 3,721,815 3,721,815
Contributed capital 633,150 633,150
Accumulated deficit (548,275) (275,888)
Treasury stock, 10,917 common shares at cost (6,140) (6,140)
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Total Stockholders' Equity 3,800,550 4,072,937
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Total Liabilities and Stockholders' Equity $ 8,041,497 $ 8,330,245
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2
HYDROMER, INC. AND CONSOLIDATED SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended
September 30,
2009 2008
UNAUDITED UNAUDITED
------------- --------------------------------------
REVENUES
Sale of products $ 1,181,704 $ 1,118,068
Service revenues 299,792 514,326
Royalties and contract revenues 228,075 403,575
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TOTAL REVENUES 1,709,571 2,035,969
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EXPENSES
Cost of Sales 840,194 792,318
Operating Expenses 1,266,360 1,153,014
Other Expenses 51,614 40,651
(Benefit from) Provision for Income Taxes (176,209) 7,680
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TOTAL EXPENSES 1,981,959 1,993,663
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NET (LOSS) INCOME $ (272,388) $ 42,306
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(Loss) Earnings Per Common Share $ (0.06) $ 0.01
Diluted (Loss) Earnings Per Common Share (0.06) 0.01
Weighted Average Number of
Common Shares Outstanding 4,772,318 4,772,318
Common Shares Outstanding assuming dilution 4,772,318 4,886,318
There was no impact to earnings per share from dilutive securities.
For the 2009 period, the resultant would have been anti-dilutive.
3
HYDROMER, INC. AND CONSOLIDATED SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three months Ended
September 30,
2009 2008
UNAUDITED UNAUDITED
--------------------------------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (Loss) Income $ (272,388) $ 42,306
Adjustments to reconcile net (loss) income to net cash
used for operating activities
Depreciation and amortization 101,428 107,475
Deferred income taxes (177,564) 1,652
Changes in Assets and Liabilities:
Trade receivables (22,970) (23,657)
Inventory (5,370) (21,572)
Prepaid expenses 42,932 (1,088)
Other assets 414 (1,524)
Accounts payable and accrued liabilities 49,914 (176,809)
Deferred income 9,968 27,129
Income taxes payable (60,000) 6,028
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Net Cash Used for Operating Activities (333,636) (40,060)
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CASH FLOWS FROM INVESTING ACTIVITIES:
Cash purchases of property and equipment (65,010) (46,611)
Cash payments on patents and trademarks (83,207) (108,812)
Redemption of matured short-term investments 260,000 -.
Cash purchases of short-term investments (250,000) -.
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Net Cash Used for Investing Activities (138,217) (155,423)
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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 (11,276) (1,880,302)
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Net Cash (Used for) Provided by Financing Activities (11,276) 729,725
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NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS: (483,129) 534,242
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 $ 1,102,636 $ 642,645
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4
HYDROMER, INC. AND CONSOLIDATED SUBSIDIARY
Notes to Consolidated Financial Statements
In the opinion of management, the accompanying unaudited financial statements
include all adjustments (consisting of only normal adjustments) necessary for a
fair presentation of the results for the interim periods. Certain
reclassifications have been made to the previous year's results to present
comparable financial statements.
New Accounting Pronouncements
-----------------------------
Effective July 1, 2009, the Company adopted the Financial Accounting Standards
Board ("FASB") Accounting Standards Codification ("ASC") 105-10, Generally
Accepted Accounting Principles -- Overall ("ASC 105-10"). ASC 105-10 establishes
the FASB Accounting Standards Codification (the "Codification") as the source of
authoritative accounting principles recognized by the FASB to be applied by
nongovernmental entities in the preparation of financial statements in
conformity with U.S. GAAP. Rules and interpretive releases of the SEC under
authority of federal securities laws are also sources of authoritative U.S. GAAP
for SEC registrants. All guidance contained in the Codification carries an equal
level of authority. The Codification superseded all existing non-SEC accounting
and reporting standards. All other non-grandfathered, non-SEC accounting
literature not included in the Codification is non-authoritative. The FASB will
not issue new standards in the form of Statements, FASB Staff Positions or
Emerging Issues Task Force Abstracts. Instead, it will issue Accounting
Standards Updates ("ASUs"). The FASB will not consider ASUs as authoritative in
their own right. ASUs will serve only to update the Codification, provide
background information about the guidance and provide the bases for conclusions
on the change(s) in the Codification. References made to FASB guidance
throughout this document have been updated for the Codification.
Effective July 1, 2008, the Company adopted FASB ASC 820-10, Fair Value
Measurements and Disclosures -- Overall ("ASC 820-10") with respect to its
financial assets and liabilities. In February 2008, the FASB issued updated
guidance related to fair value measurements, which is included in the
Codification in ASC 820-10-55, Fair Value Measurements and Disclosures --
Overall -- Implementation Guidance and Illustrations. The updated guidance
provided a one year deferral of the effective date of ASC 820-10 for
non-financial assets and non-financial liabilities, except those that are
recognized or disclosed in the financial statements at fair value at least
annually. Therefore, the Company adopted the provisions of ASC 820-10 for
non-financial assets and non-financial liabilities effective July 1, 2009, and
such adoption did not have a material impact on the Company's results of
operations or financial condition.
Effective July 1, 2009, the Company adopted FASB ASC 820-10-65, Fair Value
Measurements and Disclosures -- Overall -- Transition and Open Effective Date
Information ("ASC 820-10-65"). ASC 820-10-65 provides additional guidance for
estimating fair value in accordance with ASC 820-10 when the volume and level of
activity for an asset or liability have significantly decreased. ASC 820-10-65
also includes guidance on identifying circumstances that indicate a transaction
is not orderly. The adoption of ASC 820-10-65 did not have an impact on the
Company's consolidated results of operations or financial condition.
Effective July 1, 2009, the Company adopted FASB ASC 825-10-65, Financial
Instruments -- Overall -- Transition and Open Effective Date Information ("ASC
825-10-65"). ASC 825-10-65 amends ASC 825-10 to require disclosures about fair
value of financial instruments in interim financial statements as well as in
annual financial statements and also amends ASC 270-10 to require those
disclosures in all interim financial statements. The adoption of ASC 825-10-65
did not have a material impact on the Company's results of operations or
financial condition.
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
September 30, 2009:
5
---------------- ------------ ----------- ----------- ------------
Level 1 Level 2 Level 3 Total
------- ------- ------- -----
ASSETS
Investments $ 440,000 $ 440,000
------- -------
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 three months ended September 30, by segment are:
Polymer Medical Corporate
Research Products Overhead Total
2009
Revenues 962,136 747,435 1,709,571
Expenses (966,814) (788,962) (402,392) (2,158,168)
--------- --------- --------- -----------
Pre-tax Loss (4,678) (41,527) (402,392) (448,597)
======= ======== ========= =========
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2008
Revenues 1,211,423 824,546 2,035,969
Expenses (796,297) (783,640) (406,046) (1,985,983)
--------- --------- --------- -----------
Pre-tax Income (Loss) 415,126 40,906 (406,046) 49,986
======= ====== ========= =======
Geographic revenues were as follows for the three months ended September 30,
2009 2008
---- ----
Domestic 76% 82%
Foreign 24% 18%
6
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 September 30, 2009 were $1,709,571,
16.0% lower than the $2,035,969 for the same period the previous year. Revenues
are comprised of the sale of Products and Services and Royalty and Contract
payments.
Product sales were $1,181,704 for the quarter ended September 30, 2009 as
compared to $1,118,068 for the same period the year before, a $63,636
increase or 5.7%. Sales during the quarter ended September 30, 2008 was
negatively impacted by third party parts availability and sterilization
issues. Although the Company was able to rebound from those issues during
the months following, sales during the quarter ended September 30, 2009
was impacted by $217,065 from the transfer price agreement with Merit
Medical Systems, Inc ("Merit"). (The Company sold two of its medical
device product lines to Merit in February 2009, and until October 2009
manufactured these products solely for Merit at a predetermined transfer
rate which was lower than that the Company was previously able to sell
such products for).
Services revenues for the three months ended September 30, 2009 was
$299,792 or $214,534 lower (41.7%) than the $514,326 the corresponding
period the year before. The conversion of a customer from contract
coatings servicing to product sales accounted for $121,915 of lower
services revenues this quarter. Also included in the prior year's period
was $52,500 in R&D services. That project was completed in the prior
fiscal year.
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 September 30, 2009, Royalty and Contract
revenues were $228,075, compared to $403,575 the same period a year ago.
The cancellation of a supply and support agreement of $100,000 per month
in January 2009, replaced by a similar agreement at $35,000 per month, was
the primary factor behind the difference.
As of September 30, 2009, our open sales order book was approximately
$793,000. Although some of the sales orders can be cancelled prior to
production, the Company is of the opinion that no substantial
cancellations will occur. This value is lower than previous reported
periods due to the sale of product lines to Merit and the conclusion of
the production transfer period.
Total Expenses for the quarter ended September 30, 2009 were $1,981,959 as
compared with $1,993,663 the year before, a 0.6% decrease.
The Company's Cost of Goods Sold was $840,194 for the quarter ended
September 30, 2009 as compared with $792,318 the year prior, higher by
6.0%. Higher product sales volume and higher sterilization volume were the
primary reasons for the increase.
Operating expenses were $1,266,360 for the quarter ended September 30,
2009 as compared with $1,153,014 the year before, up $113,346 or 9.8%. The
increased international focus in our T-HEXX Animal Health business,
including a dedicated product manager, added tradeshow promotions and
marketing expenses added $62,076 in higher costs in the current period.
One time legal fees of $30,668 relating to the freedom to market clearance
review was incurred during the period. Such legal fees allows for a new
Hydrogel product launch with legal clearance. In addition, during the
quarter $22,804 was spent on animal clinical studies on our soon to be
launched Dragonhyde Hoof Bath concentrate. All of the incremental spends
this quarter are directly in relation towards future revenue sources.
Interest expense, interest income and other income are included in Other
Expenses. Interest expense for the three months ended September 30, 2009
and September 30, 2008 were $53,035 and $46,074, respectively, up due to
the mortgage refinance in September 2008 which provided the Company an
7
additional $1 million in cash, used in part to payoff and close the
line-of-credit facility. Interest expense in 2008 included interest on the
line-of-credit facility.
A net loss of $272,388 ($0.06 per share) is reported for the quarter ended
September 30, 2009 as compared to net income of $42,306 ($0.01 per share) the
year before.
The cancellation and subsequent entering of a lower valued supply and
support agreement impacted operating income by $195,000 as compared with
the prior year. The transfer price agreement impacted operating income by
another $217,065. An income tax benefit of $176,209 was recorded for the
quarter.
Re-investment expenditures of Research and Development and patents
expenditures accounted for approximately $234,218 or 18.5% of the
operating expenses.
Financial Condition
-------------------
Working capital decreased $502,557 during the three months ended September 30,
2009.
Net operating activities used $333,636 during the three month period ended
September 30, 2009.
The net loss as adjusted for non-cash expenses, used $348,524 in cash.
Income taxes paid during the quarter was $60,000.
Investing activities used $138,217 and financing activities used $11,276 during
the three months ended September 30, 2009.
Investing activities for the three months ended September 30, 2009
included $65,010 for capital expenditures and $83,207 towards the
Company's patent estate. $260,000 in short-term investments matured and
$250,000 was reinvested. Under financing activities, the principal portion
of debt servicing of the mortgage utilized $11,276 in cash.
As previously reported, until replacement income is achieved, the cancellation
of the $100,000 per month Supply and Support Agreement and the sale of product
lines to Merit, with the sales proceeds representing the future cash flows,
pushes the Company into an operating loss position for the near future. The
timing of new revenues, including that from its anti-microbial,
anti-thrombogenic and cell mitosis technologies and new T-HEXX product lines and
broaden T-HEXX market penetration, are in varying stages, though it is
management's expectations that anything of significance, in the aggregate, are
at least a year away. The Company has a strong balance sheet to meet its
required debt servicing.
ITEM # 3
Disclosure Controls and Procedures
----------------------------------
As of the period covered by this report, the Company carried out an
evaluation, under the supervision and with the participation of our management,
including the Chief Executive Officer and President and the Chief Financial
Officer, of the effectiveness of the design and operation of the disclosure
controls and procedures.
Based upon this evaluation, our Chief Executive Officer and Chief Financial
Officer concluded that, our disclosure controls and procedures were effective
and that there were no changes to our Company's internal control over financial
reporting that have materially affected, or is reasonably likely to materially
affect the Company's internal control over financial reporting during the period
covered by the Company's quarterly report.
PART II - OTHER INFORMATION
The Company operates entirely from its sole location at 35 Industrial Parkway
in Branchburg, New Jersey, an owned facility secured by a mortgage through a
bank.
The existing facility will be adequate for the Company's operations for the
foreseeable future.
8
ITEM # 6. Exhibits
Exhibit No. Description
----------- -----------
31.1 Rule 13a-14(a) Certification of Chief Executive
Officer and President
31.2 Rule 13a-14(a) Certification of Vice President of
Finance and Chief Financial Officer
32.1 Section 1350 Certification of Chief Executive
Officer and Chairman, President
32.2 Section 1350 Certification of Chief Financial Officer
and Vice President of Finance
9
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on his behalf by the
undersigned thereunto duly authorized.
HYDROMER, INC.
/s/ Robert Y. Lee, VP
---------------------
Robert Y. Lee
Chief Financial Officer
DATE: November 13, 2009
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: November 13, 2009
/s/ Manfred F. Dyck
------------------------------------
Manfred F. Dyck, President and CEO
10
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: November 13, 2009
/s/ Robert Y. Lee, VP
------------------------------------------
Robert Y. Lee, Vice President of Finance and CFO
11
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 three months ended September 30,
2009 fully complies with the requirements of Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 and that information contained in such report
fairly presents in all material respects the financial condition and results of
operations of Hydromer, Inc.
Date: November 13, 2009 By: /s/ Manfred F. Dyck
---------------------------------------------------
Manfred F. Dyck
Chairman, President and Chief Executive Officer
EXHIBIT 32.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Robert Y. Lee, certify, pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly
Report of Hydromer, Inc. on Form 10-Q for the three months ended September 30,
2009 fully complies with the requirements of Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 and that information contained in such report
fairly presents in all material respects the financial condition and results of
operations of Hydromer, Inc.
Date: November 13, 2009 By: /s/ Robert Y. Lee, VP
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Robert Y. Lee
Chief Financial Officer and Vice President of Finance
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