FORM 10 K
                                 
                SECURITIES AND EXCHANGE COMMISSION
                                 
                      WASHINGTON, D.C. 20549
                                 
        ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (D) OF
                                 
               THE SECURITIES EXCHANGE ACT OF 1934

For this fiscal year ended September 30, 1997, Commission file
number 03385

                                 HOLOBEAM, INC.                   
            
      (Exact name of registrant as specified in its charter)

Delaware                                                   
22-1840647          
(State or other jurisdiction of                           (I.R.S. Employer
     incorporation or organization)                      Identification No.)

217 First Street, P.O. Box 287, Ho Ho Kus, NJ            
07423-0287         
(Address of principal executive offices)                  (Zip Code)

Registrant's telephone number, including area code 201-445-2420

Securities registered pursuant to Section 12(b) of the Act:

                                   Name of exchange on which
          Title of each class             registered
Common Stock, Par Value $0.10 per share       Over the Counter

Securities registered pursuant to Section 12(g) of the Act:

                                                                  
     
                         (Title of Class)

                                                                  

                         (Title of Class)

          Indicated 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  x     No    

          State the aggregate market value of the voting stock
held by non-affiliates of the Registrant.  The aggregated market
value shall be computed by references to the price at which the
stock sold, or the average bid and asked prices of such stock, as
of a specified date within 60 days prior to date of filing.
$4,691,363.00 at December 10, 1997.                               


                                       1

<PAGE>

          Indicate the number of shares outstanding of each of
the Registrant's classes of common stock, as of the latest
practicable date.  306,010 Common Shares at December 10,1997.

               DOCUMENTS INCORPORATED BY REFERENCE.
     1.   Annual Report Form 10K for the year ended September 30,
1994.
     2.   Financial Statements for the year ended September 30,
1995.
     3.   Financial Statements for the years ended September 30,
1990 and 1989.

                                2                           

<PAGE>

   PART I
Item 1.  Business
     (a)  In General.  The Registrant was organized in October,
1967, and commenced doing business on January 1, 1968.  The
Registrant is engaged in the rental and development of real
estate and in developing surgical staples and the technology used
to apply the staples and was formerly engaged in developing
technology for semiconductor devices until 1994 when such
activities were terminated.  
     b)   Industry Segments.  For financial information in regard
to Industry Segments, reference is made to Note 13 to the
Financial Statements for the years ended September 30, 1997,
1996 and 1995.
     (c)  Description of Business.
          (i)  Principal Activities and
          (ii) Status of products and Real Estate Properties.
                         Medical Staples
     The Registrant is continuing its efforts in the area of
Medical Staples for use in internal surgery.  Four United States
Patents have been received and foreign applications have been
filed on a novel staple.  The staple has been produced and it is
anticipated that animal tests will continue during the fiscal
year ending September 30, 1998. 
     A significant investment would be required if the Registrant
were to pursue this area of business.  The Registrant may seek a
relationship of some sort with a firm active in the medical
equipment area.  However, no decision as to such a relationship
has been made at this time.
                     Semiconductor Technology
     The Registrant had obtained a United States patent covering
technology for the deposition of thin films of semiconductor
materials, e.g., III-V materials such as binary or ternary
semiconductor materials, on suitable substrates.  Contracts to
investigate the technology involved were given by the Solar
Energy


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<PAGE>

 Research Institute (S.E.R.I.) of the United States Department of
Energy (USDOE) to Brown University.  This work, in order to
support the length of research required to test the theories, was
to test the quality of the materials and potential applications
and the funds were supplied by the USDOE on the Solaris Solar
Research program, Grant #DE-FG02-84C410203. Subsequently, Brown
University performed additional investigations of the
applications of the technology supported by the USDOE under the
University Participation Program, Contract #XB5-05009-5.  These
investigations showed that the film deposition rates with the
technology were faster than with conventional liquid phase
epitaxy and were of high quality.  However, variations in film
thickness along the direction of flow were observed.  If such
variation cannot be solved, it would limit the possible
commercial use of the technology.  Further investigation of the
technology by Brown University has ceased as governmental support
for their research has terminated.  The Registrant has no direct
knowledge at this time of other research taking place using its
technology.  There is no assurance that the technology in
question will find commercial application. During 1993 the
Registrant expended $37,615.00 toward development of
semiconductor technology and substantially reduced  expenditures
during 1994. 
     During fiscal year 1994, the Registrant discontinued efforts
relating to photovoltaic cells.  Work in the field has moved in
directions away from that of the Registrant's technology. 
There has been a substantial reduction of government support in
this technical area and funding that had been received by
laboratories exploring the Registrant's technology has
terminated.

          Real Estate Development and Rental Activities
     The Registrant has rented two buildings it owns located at
A&S Drive, Paramus, New Jersey: one to The Sports Authority, Inc.
and the other to Tandy Corporation for retail purposes.
          (iii)      Raw Materials


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<PAGE>

     The Registrant believes that the components and materials
necessary or useful to its operations will be available from
diverse sources of supply.  The materials used for the
Registrant's research activities have been acquired through
commercial businesses engaged in the distribution of such
supplies.  The materials that the Registrant would require for
development of commercial production of medical staples are
widely available.
          (iv) Patents.
     The Registrant has filed several patent applications and has
several patents issued in connection with medical staples for use
in internal surgery.  These applications and patents are as
follows:


No. Serial No.               Title of Invention            Issue
Date

 1. PCT/US94/02227        Staples                   03/01/94

 2. 08/512,766            Staples                   08/09/95

 3. 08/228,058            Staples                   08/29/95

 4. Canadian Pat. No.     Improved Staples (PCT NAT)03/01/94
    2,155,750

 5. European Pat. 94910801.3 Staples                03/01/94 

 6. Australian Pat. 63568/94 Improved Staples       03/01/94

 7. Japanese Pat. 6-520120   Staples                03/01/94

 8. Brazilian Pat.        Staples                   03/01/94
    PCT/US94/02227

 9. 08/502,988               Staple Overlap         07/18/95

10. 07/753,116         Surgical Stapling Method     01/19/93

11. 07/934,858        Surgical Stapling Method      11/23/93
                          
12. 08/024,501          Staples                     08/30/94

13. US Pat. #5,445,648       Staples                08/29/95

14. US Pat. #5,342,396       Staples                08/30/94

15. US Pat. #5,263,973   Surgical Stapling Method   11/23/93

                                5
<PAGE>

     The Registrant has obtained patent protection on technology
developed in the areas of epitaxial growth, peeled films and
photovoltaic cells.  However, there is no assurance that any
revenue will be received as a result of obtaining the patents. 
The Patents issued to the Registrant dealing with the
Semiconductor research are as follows:
     1.   U.S. Patent No. 4,396,456 "Method of Peeling
Epilayers", Melvin S. Cook.
     2.   U.S. Patent No. 4,519,871 "Bubble-Mode Liquid Phase
Epitaxy," Melvin S. Cook.
     3.   U.S. Patent No. 4,548,658 "Growth of Lattice-Graded
Epilayers," Melvin S. Cook.
     4.   U.S. Patent No. 4,594,126 "Growth of This Epitaxial
Films on Moving Substrates
          from Flowing Solutions," Melvin S. Cook.
     5.   U.S. Patent No. 4,594,128 "Liquid Phase Epitaxy,"
Melvin S. Cook.
     6.   U.S. Patent No. 4,597,823 "Rapid LPE Crystal Growth,"
Melvin S. Cook.
     7.   U.S. Patent No. 4,633,030 "Photovoltaic Cells on
Larrice-Mismatched Crystal
          Substrates," Melvin S. Cook.
             (v) Non-seasonal Business.
     The Registrant does not believe that its products are
subject to material seasonal changes.
            (vi) Working Capital.
     Not relevant.
           (vii) Customers.
     Not relevant.
          (viii) Backlog.
     Not relevant.
            (ix) Governmental Contracts.  Not relevant.
             (x) Competition.


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<PAGE>

     It is presently contemplated that Registrant's activities
with respect to medical    staples, if actual commercial
activities are commenced, may be limited to licensing the
technology to other firms or to forming some type of business
relationship with other firms.  The technology is in competition
with alternative staples, some of the suppliers of which are
well-established.
     Competition in the real estate office rental segment of the
Registrant's business activities was significant in the Bergen
County, New Jersey market in which the Registrant competes. 
     The obsolete style of the office building owned by the
Registrant prior to and during 1991 made the attraction of
suitable office tenants most difficult. 
     In an effort to increase the marketability of the
Registrant's properties, the Registrant applied to the Borough of
Paramus for a zoning change to allow retail use for the office
building and for development of the adjacent site.
     In December 1991, the change in zoning was approved.  The
then existing building was rented to The Sports Authority, Inc. 
The market for retail space in Paramus, New Jersey area,
although in recession, was not as adversely affected as was the
market for office space.
     During 1994, a 30,000 sq. ft. building was constructed on
the Registrant's site located adjacent to the building leased by
The Sports Authority, for use as a Computer City retail store. 
Tandy Corp. commenced paying rent in October 1994.  Holobeam
reimbursed Tandy Corporation $1,189,675 for the costs of
constructing the building and paving of the site, after
a permanent Certificate of Occupancy was obtained.
            (xi) Research and Development.
     The Registrant discontinued engineering and development in
connection with the development of technology associated with
semiconductor devices during 1994 and no funds were expended in
connection with these activities.  During 1993 the Registrant
recorded research and development costs of $37,615.00 on such
technology.  There have been no such costs expended during 1994,
1995 and 1996 

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<PAGE>


in connection with this technology.  The Registrant anticipates
that no Research and Development expenditures will be made with
respect to semiconductor technology during the year ended
September 30, 1998.
     The Registrant has investigated methods for applying
surgical staples and the technology presently used to fabricate
and apply such staples.  During 1997, 1996 and 1995, the
Registrant expended $147,562.00, $219,001.00 and $120,833.00,
respectively, in connection with furtherance of this activity. 
Such costs have been currently expensed and consist principally
of materials, supplies and costs associated with design and
development.
           (xii) Environmental Compliances.
     The Registrant does not believe that compliance with
Federal, State or Local provisions of a governmental nature which
have been enacted or adopted regulating the discharge of material
into the environment will have a materially adverse effect upon
the capital expenditure requirements, earnings or competitive
position of the Registrant.
     If the semiconductor technology developed had ever reached
production, the Registrant would have engaged an accredited,
outside manufacturing firm to perform the production process. 
One feature of the Registrant's technology was the absence of
significant waste materials. Since the Registrant's semiconductor
technology was developed, other technologies have advanced the
state-of-the-art and new directions in this field have rendered
the Registrant's technology less attractive.
     The Registrant's activities with regard to medical staple
technology, at present, are limited to engineering, development
and testing of medical staple design with fabrication and
manufacturing of prototypes and models sub-contracted to other
firms.
     The Registrant is not aware of any potential liabilities or
costs associated with the disposal or handling of waste materials
and is not aware of any potential violations of local,
state or federal laws which regulate the 


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<PAGE>


technology.
          (xiii) Employees.
     At September 30, 1997, the Registrant employed three persons
as compared to the three
persons at September 30, 1996 and three persons at September 30,
1995. 
          (d)  Financial Information About Foreign and Domestic
Operations and Export
               Sales.
     Registrant is not engaged in foreign operations and does not
export to foreign countries.
Item 2.  Properties
     The Registrant's headquarters and principal facilities are
located at 217  First Street,
Ho Ho Kus, New Jersey 07423-0287. The Registrant leases
approximately 1,000 square feet of office and laboratory space on
a 12 month lease that is annually renewable.  The Registrant owns
two office buildings of 62,000 square feet and 30,000 square feet
located at 50 A&S Drive, Paramus, New Jersey.  One building was
placed in service in October 1994, the other in 1982. (Reference
is made to Notes 4, 8, 9 and 10 to the Financial Statements for
the fiscal year ended September 30, 1991, 1990 and 1989.)
     Pertinent information concerning the Registrant's properties
is as follows.  (Reference
is made to Schedule XI of the accompanying Financial statements
for the years ended September
30, 1997 and 1996.)
                             Building               Building
                           Paramus, NJ             Paramus, NJ 

Year Acquired                      1971                1994

Gross Square Footage               62,000            30,000

Percent Leased at 9/30/95            100%                100%

Acquisition Cost               $  718,881          $2,592,513 (2)

Capital Improvements Since
   Acquisition                  $3,649,850  (1)              -0-

Total Investment               $4,587,133  (3)     $2,826,843 (4)

Mortgage Balance               $6,531,848               $   -0-

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<PAGE>


     (1)  Includes $3,567,267.00 of improvements to the building
paid by The Sports Authority, Inc. (the Tenant) upon closing of
the Mortgage, but does not include additional amounts expended by
The Sports Authority, Inc. since closing.

     (2)  Includes construction allowance of $1,189,675.00 for
Tandy Corporation pursuant to the Operating Lease Agreement.

     (3)  Includes land cost of $218,402 for the 62,000 sq. ft.
building.

     (4)  Includes land cost of $234,370 for the 30,000 sq. ft.
building.

     In 1983, the Registrant purchased 2.799 acres of land
located in Paramus, New Jersey and adjacent to the building owned
by the Registrant at 50 A&S Drive.  The purchase price was
$173,565 which was paid in cash.  Since 1983, the Registrant has
incurred costs in the amount of $60,805 for various improvements
and architectural work relating to development of this property. 
During 1992, 1991 and 1990, the Registrant spent $293,784,
$78,051 and $50,667 respectively in connection with an
application for a use variance for the site and various site
improvements that would enable the construction of a commercial
or retail building on the site. The change in zoning to retail
use was approved by the Borough of Paramus in December 1991. The
change in zoning to allow retail use also required new site plan
approval because the change in use requires new traffic pattern
studies, parking lot re-design and significant additional changes
in order to comply with governmental requirements.
     In addition, the Registrant expended $964,505 through
September 30, 1994 for site plan approval and changes, and toward
construction of a building on the site.  No depreciation or
amortization was recorded until the building and site were put
into service. During October 1994, construction was completed by
Tandy Corporation of a retail building on the Registrant's
site.  The building is now being used for a Computer City retail
store.  (Reference is made to Note 13 to the Registrant's 1994
Financial Statements and to Item 1, Part X of the 1994 Form 10K.) 
The source of funds for any additional improvements will be the
cash and cash equivalents reflected on the Balance Sheet, and if
necessary, the Cash Flows associated with the Rental Income
generated by the Operating Leases.  (Reference 


                                10
<PAGE>

is made to Note 3 of the accompanying Financial Statements for
the years ended September 30, 1997 and 1996.)
     The zoning change approval allowed for retail use of the
property and significantly enhanced the opportunities for
attracting a suitable tenant for the site.
     When purchased, the site adjacent to the building owned by
the Registrant, was 12 (twelve) feet below the acceptable
construction level and required significant amounts of fill
together with site engineering costs to acquire site plan
approval for a building from the appropriate governmental
regulatory authorities.
     In addition, the Registrant expended funds to change the
zoning of the property from office use to retail use.  This
change in zoning allowed the Registrant to seek tenants who were
engaged in retail operations for the site and resulted in the
October 1994 tenancy of Computer City.  (Reference is made to
Note 12 of the accompanying Financial Statements.)
     The Registrant was not able to lease the property since the
original site plan allowing office use was approved until the
Computer City occupancy of October 1994 for retail use.  The
market for office space has seen significant decline during the
years ended September 30, 1990, 1991, 1992, 1993 and 1994.  The
vacancy rate for such space had reached 28% during the year ended
September 30, 1994 and 1993, respectively for the area in which
the Registrant competes, Bergen County, New Jersey.
     The occupancy rate for the building owned by the Registrant
and under lease to The Sports
Authority Inc. for the past five (5) years is as follows:
                         1997         100%
                         1996         100%
                         1995         100%
                         1994         100%
                         1993         100%
                         
     The building owned by the Registrant and under lease to
Tandy Corp. has been 100% occupied since October 1994.  A summary
of the amounts expended for 


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such approvals for the three most recent fiscal years during
which such expenditures were made appears below.  No such
expenditures were made in 1995.
                                     1994        1993      1992
                                     ----        ----      ----
Zoning Changes and Site Plan Approvals:
   Legal Fees                      $ 2,859   $ 10,093  $ 15,840
   Governmental Fees                11,827     55,811    19,990
   Engineering                      11,049     39,171    57,954
   Paramus Park                        -0-       -0-    200,000
                                   -------   --------  --------
      Total Related Costs          $25,735   $105,075  $293,784
                                   =======   ========  ========

     The payment of $200,000 during 1992 to Paramus Park, a
retail shopping mall adjacent to the site currently being
developed by the Registrant, was a one-time fee in connection
with removal of an existing deed restriction which prohibited
adjacent retail activity.  The balance of the payments for site
plan approvals were paid to various engineering, legal and
surveying firms in connection for professional services rendered
to obtain governmental approvals.
     No payments to affiliated parties were made in connection
with the zoning changes nor were any payments made to affiliated
or related parties for the acquisition of site plan approval. 
Any payments to affiliated parties are unrelated to the cost of
such activities and are detailed and disclosed in Item 11 (d) of
this report.
Item 3.  Legal Proceedings.
     There are no legal proceedings of a material nature to which
the Registrant is a party other than ordinary, routine litigation
incidental to the business of the Registrant.
Item 4.  Submission to Matters to a Vote of Security Holders.
     None.
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                              PART II

Item 5.  Market for the Registrant's Common Stock and Related
Stockholder
         Matters.
     (a)  The Registrant's common stock is traded on the
over-the-counter market.  The bid price offered by Walsh Manning
Securities Inc., New York, New York on December 10, 1997 was
$11.00 per share.  On July 18, 1983, the Registrant's shares were
deleted from the NASDAQ system when no market maker for the
Registrant's common stock any longer maintained registration as
such with the NASDAQ System.
     (b)  The approximate number of holders of Common Stock
securities of the Registrant as of December 10, 1997 was 685.
     (c)  No dividends have been paid or declared on the Common
Stock of the Registrant during the 1997 or 1996 fiscal year.  In
making decisions regarding the possible payment of dividends, the
Board of Directors considers the Requirements of the Registrant
in such ongoing activities as real estate development and the
research, development and engineering efforts of the Registrant
as well as such obligations as mortgages and debentures.
     (d)  Changes in Securities.
     (Reference is made for Form 10Q for the six-month period
ended March 31, 1984,  wherein the Registrant completed an
exchange of common stock for 5% Debentures payable March 1, 1989.

Reference is made to Notes 9 and 10 to the Financial Statements
for the years ended September 30, 1989 and 1990.)
     The high and low bid information of the Registrant's common
stock for the last two years was estimated to be as follows: 
(Source:  National Quotation Bureau).  (On July 18, 1993, the
Company shares were deleted from NASDAQ.)


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                                     1997                1996
                                     ----                ----
                                   high  low           high  low
                                   ----  ---           ----  ---

Quarter Ended Dec. 31          11.00     11.00        10.50  9.00

Quarter Ended Mar. 31          11.00     11.00        11.00  9.00

Quarter Ended June 30          11.00     11.00        11.00 11.00

Quarter Ended Sept. 30         11.00     11.00        11.00 11.00

     Such quotation represents prices offered by purchases
without retail mark-up, mark-down or commission and may not
represent actual sales transactions.
Item 6.  Selected Financial Data.
     Financial information for the five-year period commencing
October 1, 1992 and ending September 30, 1997 is presented below.



                          HOLOBEAM, INC.
                SUMMARY OF SELECTED FINANCIAL DATA
                FOR THE YEARS ENDED SEPTEMBER 30,
<TABLE>
<CAPTION>
                                                                
                                                                 Restated
                                1997        1996        1995        1994     1993
                                ----        ----        ----        ----     ----
<S>                        <C>         <C>         <C>         <C>         <C>       
Gross Income                $1,873,382  $1,856,218  $1,895,392  $1,239,344  $1,178,572

Net Income (Loss)              303,882     306,434     334,594     556,787     222,642

Weighted Average Number of
  Common Share Outstanding     310,426     316,992     323,596     335,211     342,906

Earnings Per Share (Loss)        $0.98       $0.97       $1.03       $1.66       $0.65

Total Assets                 7,552,667   7,743,614   8,931,962   7,456,189   7,251,966

Long-Term Debt               6,310,060   6,667,298   6,946,564   7,002,162   7,208,283

Shareholders' Equity           748,020     558,463     371,422      68,070    (317,631)

Gross Rental Income          1,845,509   1,838,216   1,834,829   1,208,217   1,156,167

Net Rental Income            1,578,010   1,577,254   1,554,791   1,039,686   1,013,412


</TABLE>

Item 7.  Management's Discussion and Analysis of Financial
Condition and
         Results of Operations.
     (1)  Liquidity.
          The Registrant funded construction site preparation,
engineering and site plan approvals for a 30,000 sq. ft. building
presently occupied by Tandy Corporation as a Computer City retail
store.  Total costs related to 


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<PAGE>

     the building construction amounted to $2,592,513 and the
building was placed in service during the fiscal year ended
September 30, 1995.  (Reference is made to the Registrant's
Annual Report, Form 10K for the year ended September 30, 1994,
Item 1(c), Item 2 and to Note 3 to the Registrant's financial
statements for the year ended September 30, 1995.)
          These construction costs were funded in part by the
proceeds of the First Mortgage on the 62,000 sq. ft. building
owned by the Registrant (and occupied by The Sports Authority),
in part by the Tenant allowance for construction pursuant to the
lease agreement and by cash flows associated with the operating
leases for both buildings.
          Gross Rents and net rental income associated with the
operating leases on the properties of the Registrant are
sufficient to provide the cash flows necessary to fund the
Registrant's operations.  The lease terms expire in 2009 (Tandy
Corporation) and 2012(The Sports Authority) and include options
for renewal.  In the event that the lease options are exercised,
revenue will continue beyond 2009 and 2012.
          Total minimum future rental income associated with
these leases approximates $30,036,000.00 and should be adequate
to fund the Registrant's real estate rental activities and to
provide the cash flows necessary to fund the surgical staple
development and engineering project.

     (2)  Capital Resources
          Since building construction has been completed, the
Registrant does not anticipate future additional capital
requirements for the rental properties other than those that are
routine and incidental to its rental operations.  Expenses are
expected in connection with maintenance, insurance and taxes, but
no major capital projects are planned at this time.
          The Registrant expects to continue to fund the
development and         

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<PAGE>

     engineering associated with its activities with the medical
staples technology.  Animal testing is expected to continue
during 1998 and results will be evaluated before additional
testing occurs.  The Registrant expects that the maximum funding
requirement during 1998 in connection with the development,
engineering and testing will approximate $250,000.00 and will be
funded from cash flows provided by the real estate rental
activities.  No revenues are projected in connection with the
medical staples technology during 1998.

     (3)  Results of Operations.
          (a)  The results of operations for the year ended
September 30, 1997 indicate after tax income of $303,882.00 as
compared to $306,434.00 for the fiscal year ended September 30,
1996.  The Registrant has experienced consistent results of
operations since the real estate rental properties have been 100%
occupied and under favorable operating lease agreements.  Because
the buildings are under lease to The Sports Authority and to
Tandy Corporation, such revenues are expected to continue to be
uniform through 2009 when the Tandy lease expires.  Costs are
also expected to remain at present levels during the short term.
          Long Term, the Registrant expects costs to increase,
particularly with liability insurance, during the life of the
leases.  It is also expected that maintenance costs may increase
as the buildings mature and may require more substantial and
costly repairs. Funding of these costs is not expected to have a
materially adverse effect upon the results of operations during
the term of the leases.
          As previously discussed, the Registrant also expects to
fund engineering and development activities associated with its
medical staple technology in the maximum amount of $250,000.00
during 1998 which will be supported by the cash flows associated
with the real estate rental 

                                16

<PAGE>

     activities.  The Registrant funded the medical staples
technology development in the amount of $147,562.00 during the
year ended September 30, 1997
          (b)  The results of operations for the year ended
September 30, 1996 indicate after-tax income of $334,594.00 for
1995.  Performance for the two years remained relatively stable
resulting from revenues received under the operating leases of
The Sports Authority, Inc. and Tandy Corp.  Since the buildings
are 100% occupied and will remain so until 2009, revenues are
expected to continue to be uniform through 2009. Costs associated
with the operating leases are expected to remain at present
levels throughout the terms of the leases with the exception of
costs associated with business liability insurance in connection
with the leasing activities, which are expected to rise with
inflation and risk factors.
          The Registrant expects to continue to fund research and
development costs associated with the surgical staple project and
such costs increased from $120,833.00 in 1995 to $219,001.00 in
1996.  This increase resulted from additional expenditures for
purchases of materials, supplies and design and drafting services
during 1996.  The Registrant expects to continue to fund the
development during 1997 and anticipates that such expenditures
will approximate $250,000.00 during 1997.
          At present, the fabrication and experiments being
performed by the Registrant in connection with the surgical
staples project are limited to engineering, design and
development of staple design and to design of equipment to apply
the staples.  Such work may progress to animal testing during
1997 and if started, may take substantial time before conclusive
results can be evaluated.
          The Registrant expects to fund the 1997 portion of the
project's requirements from cash flows associated with the real
estate rental 


                              17

<PAGE>

     activities of the Registrant's business.
          (c)  The results of operations for the year ended
September 30, 1995 indicate a profit of $334,594.00 as compared
to income of $32,201.00 (before cumulative effect of change in
Accounting Principle) for 1994.  (Reference is made to Note 2 of
the accompanying Financial Statements for the year ended
September 30, 1995.)  Income before provision for income taxes
increased $531,339.00 when compared to $32,251.00 for 1994. The
improved performance resulted from rental income associated with
the operating lease on the 30,000 sq. ft. building occupied by
Tandy Corporation.  The operating lease generated an increase in
gross rentals of approximately $626,600.00 during 1995 as
compared to 1994 and is expected to continue and increase for the
term of the lease.
          Expenses associated with Registrant's rental activities
increased from $168,531.00 in 1994 to $280,038.00 in 1995.  These
increased costs resulted primarily from increased depreciation
expense associated with the building that was put into service
during 1995 in the amount of $60,935.00 and increased legal fees
associated with the administration of the real estate rental
activities and lease preparation activities. Such increase
approximates $31,695.00.  The remainder of the annual increase
results from increases in expenses incident and necessary to the
Registrant's business and activities associated with real estate
development.
          Research and development costs in connection with the
Registrant's medical staple development project approximated
$120,800.00 for 1995 which represents an increase of $56,900.00
when compared to the 1994 expenditures.  The increase is
associated with an increase in supplies and materials, including
sample raw materials and supplies, used to perform the
development activity.  Such increase approximated $49,900.00
during 1995. No revenues were earned in connection with the
medical staples activities during 1995 or 1994.


                                18

<PAGE>

          The Registrant anticipates that revenues associated
with the real estate rental phase of its operations will be
sufficient to fund the planned research and development efforts
in connection with the medical staples.

Item 8.  Financial Statements and Supplemental Data.
     Financial statements, supplementary financial information
and Accountant's Report are filed with this report.  (See
Financial Statements and reports thereon of Fredericks and
Company for 1996 and 1997.)
Item 9.  Disagreements on Accounting and Financial Disclosure.
     None.
                             PART III
Item 10.  Directors and Executive Officers of the Registrant.
     (a)  The following Table identifies each Director of the
Registrant and indicates his position with the Registrant, the
duration of his term as Director and the date when he was first
elected.
                                                       Date First
Name and Age       Title                      Term       Elected  
-----------------------------------------------------------------
Melvin S. Cook     Chairman of the Board   1999 Annual     1968
Age 66             President of Registrant   Meeting

Martin R. Infante  Secretary of Registrant 1997 Annual     1976
Age 65 (1)                                   Meeting

William M. Hackett Treasurer of Registrant 2000 Annual     1984
Age 54                                       Meeting

Beverly Cook  Office Manager of Registrant 1998 Annual     1995
Age 61                                       Meeting
                   
(1)  Martin R. Infante, Secretary of the Registrant and member of
the Board of Directors served the Registrant in such capacities
until his death while in office during the year ended September
30, 1997.

     (b)  The following Table represents the name and age of each
officer of the Registrant, the positions and offices held by
each, the term of each office and the period which each has
served in the indicated office.    

                                19

<PAGE>

                                                       Date First
Name and Age      Title                   Term           Elected 
-----------------------------------------------------------------
Melvin S. Cook     Chairman of the Board      Annual       1968
Age 66

William M. Hackett Secretary and Treasurer of Annual       1975
Age 54              the Registrant

Martin R. Infante (1)Secretary of the Registrant   Annual  1980
Age 65

(1)  Martin R. Infante, Secretary of the Registrant and member of
the Board of Directors of the Registrant served in such
capacities until his death during the year ended September 30,
1997.  

     (1)  Each officer has been selected to serve until the next
Annual Meeting of the Board of Directors or until his respective
successor shall be elected and shall quality.
          (c)  There are no significant employees other than
those identified in (a) and (b) above.
          (d)  The following Table summarizes the business
experience and principal occupation during the last five years of
each person who serves as a director of executive officer of the
Registrant, as well as any other directorship held by persons
serving as directors of the Registrant.
                                                     Other
Name             Business Experience/Occupation      Directorship

Melvin S. Cook   Chairman of the Board of Directors and      None
                 President of the Registrant since its
                 formation.

Martin R. Infante(1)Principal, Martin Infante Associates, a  None
                    construction contractor for more than 30
                    (thirty) years, Principal, Martin Infante
                    Agency, an insurance agency whose cli-
                    entele has a large representation in the
                    construction industry, for more than 30
                    (thirty) years.  Secretary of Registrant 
                    since 1980.  Director of Registrant
                    since 1976.

(1)  Martin R. Infante, Secretary of the Registrant and member of
the Board of Directors of the Registrant served in such
capacities until his death during the year ended September 30,
1997.  


                                20

<PAGE>

                                                     Other
Name                Business Experience/Occupation   Directorship
-----------------------------------------------------------------
William M. Hackett  Vice President of Registrant from       None
                    August 23, 1975 until June 1, 1981 and
                    Controller of Registrant and member of
                    accounting staff from October 1973 to
                    August 1975.  Treasurer of Registrant
                    from June 1981 to present.  Vice 
                    President of CMA Co., Inc. from
                    November 1986 to Present.

Beverly Cook      Office Manager of Registrant from June 1,  None
                  1981 until present.  Married to Melvin S.
                  Cook, President and Chairman of the 
                  Board of Directors.
     
          (f)  Not applicable.
Item 11.  Management Compensation.
     (a)  The following Table shows all direct remunerations paid
by the Registrant during the fiscal year ended September 30, 1997
to each Director or Officer of the Registrant whose aggregate
direct remuneration exceeds $100,000.00, and the direct
remuneration paid all Directors and Officers of the Registrant as
a group for such fiscal year.

                                21

<PAGE>

                                           HOLOBEAM, INC.
                                              Form 10K
                                     Summary Compensation Table
                                         September 30, 1997


<TABLE>
<CAPTION>
                                                                  
                                                         Long Term Compensation
Name and                   Annual Compensation                  Awards              Payouts      All Other  
Principal Position   Year   Salary   Bonus     Other  Restricted Stock  SUO/SARS   LTIP Payouts  Compensation
------------------   ----   ------   -----     -----  ----------------  --------   ------------  ------------
<S>                 <C>   <C>       <C>     <C>      <C>                <C>        <C>           <C> 
Melvin S. Cook       1997  $250,000    -0-      -0-           -0-            -0-       -0-            -0-
President and CEO    1996   200,000    -0-      -0-           -0-            -0-       -0-            -0-
and Director         1995   200,000    -0-  $70,857           -0-            -0-       -0-            -0-

William M. Hackett   1997    17,550    -0-      -0-           -0-            -0-       -0-            -0-
 Treasurer and       1996    17,550    -0-      -0-           -0-            -0-       -0-            -0-
 Director            1995    17,550    -0-      -0-           -0-            -0-       -0-            -0-

Martin R.Infante<F2> 1997      -0-     -0-      -0-           -0-            -0-       -0-          9,999
 Secretary and       1996      -0-     -0-      -0-           -0-            -0-       -0-         29,984
 Director            1995      -0-     -0-      -0-           -0-            -0-       -0-         28,135

Beverly Cook<F1>     1997    75,000    -0-      -0-           -0-            -0-       -0-            -0-
                     1996    54,167    -0-      -0-           -0-            -0-       -0-            -0-
                     1995    28,000    -0-      -0-           -0-            -0-       -0-            -0-

All Officers and     1997   342,550    -0-      -0-           -0-            -0-       -0-          9,999
Directors as a       1996   271,717    -0-      -0-           -0-            -0-       -0-         29,984
Group                1995   245,550    -0-   70,857           -0-            -0-       -0-         28,135

<FN>

<F1>    Beverly Cook was elected to the Board of Directors on
August 19, 1995.
<F2>   Martin Infante performed services for the registrant as
landlord and insurance broker.  See Item 11(D) of this report. 
Mr. Infante died  during the year ended September 30, 1997
</FN>
</TABLE>

                                                 22

<PAGE>

Item 11 (cont'd.)
     The Summary Compensation Table represents all aggregate
forms of remuneration to the executive officers of the
Registrant.  There were no other payments or compensation awarded
to the officers of the Registrant.  The "other" compensation paid
to Mr. Cook in 1995 represents interest on unpaid salary accrued
from 1989 through 1993.
     Mr. Infante received no compensation as an employee of the
Registrant.  The amounts paid to Mr. Infante were in connection
with his services performed as insurance agent and landlord.
During 1997, Mr. Infante's payments were limited to rental
payments amounting to $9,999.00. (Reference is made to Notes 4
and 6 to the accompanying Financial Statements and to Item 11 (d)
of this report.)
     (a)  The Directors who are not employees of the Registrant
receive standard attendance fees of $200 plus applicable expenses
for travel.  No Directors' fees were paid during 1997, 1996 and
1995.
     (b)  The following Table sets forth all the options to
purchase securities from the Registrant which were granted to or
exercised by any of its directors and each officer whose direct
remuneration exceeds $100,000.00 as well as all officers and
directors as a group since October 1, 1996.
                            All Directors and Officers as a Group
Options Granted                                      0
Options Exercised                                    0
Unexercised Options Held at 9/30/97                  0
     (d)  During the fiscal year of the Registrant ended on
September 30, 1997, the Registrant utilized the services of Mr.
Infante as a landlord.  In the opinion of the Registrant, the
amounts paid to Mr. Infante in respect to the foregoing were in
all cases fair to the Registrant and were consistent with the
amount which would have been paid had the transaction occurred
with unaffiliated parties.  (Reference is made to Notes 4 and 5
to the Financial Statements of the Registrant for the years ended
September 30, 1997, 1996 and 1995.)


                                23

<PAGE>

     The amounts paid to Mr. Infante during the three most recent
fiscal years ended September 30 are presented below:
                                    1997         1996        1995
Rent Expense                     $ 9,999     $10,908      $10,908
Insurance                          -0-        19,076       17,227
                                  ------      ------       ------
Total Payments                   $ 9,999     $29,984      $28,135
                                  ======      ======       ======

                             PART IV
Item 12.  Security Ownership of Certain Beneficial Owners and
Management.
     (a)  The stockholding of each person who is known by the
Registrant to own beneficially more than 5% of any classes of
securities as of December 10, 1997 is as follows:
Title of Class        Name & Address   Amount Owned   % of Class
-----------------------------------------------------------------
Common Stock, Par     Melvin S. Cook        123,497         40.4%
Value $0.10 Per Share 540 Ravine Court
                      Wyckoff, NJ  07481

Common Stock, Par     Beverly Cook           95,000         31.0%
Value $0.10 Per Share 540 Ravine Court
                      Wyckoff, NJ  07481

     (b)  The stockholding of Officers and Directors as a group
as of December 10, 1997 are as follows:
Title of Class           Amount Beneficially Owned     % of Class
-----------------------------------------------------------------
Common Stock, Par Value                218,497             71.4%
$0.10 Per Share

     (c)  There are no contractual arrangements that might result
in a change of control of Registrant.

Item 13.  Certain Relationships and Related Transactions.
     Martin R. Infante, Secretary and Director provides services
to the Registrant in his capacity as a principal in the Martin
Infante Insurance Agency and as a landlord.
     During the three most recent fiscal years, the amounts paid
to Mr. Infante 


                                24

<PAGE>

     in connection with such services were as follows:

                                    1997         1996        1995
Rent Expense                     $ 9,999      $10,908     $10,908
Insurance                            -0-       19,076      17,227
                                  ------       ------     -------
Total Payments                   $ 9,999      $29,984     $28,135
                                  ======       ======      ======

     Reference is made to Item 11 (d) of this report and to Notes
4 and 6 to the accompanying Financial Statements for the year
ended September 30, 1997.

Item 14.  Exhibits, Financial Statement Schedules and Reports on
Form 8K
     (a)  Index to Financial Statement filed as part of the
Annual Report and attached.
     (b)  Reports on Form 8K.
     (c)  Lease with The Sports Authority, Inc. filed as part of
the 1993 Annual Report Form 10K-A.
     (d)  Financial Statement Schedules.
     (e)  Lease with Tandy Corp. filed as part of the 1995 Annual
Report Form 10K.
     The following is a list of Financial Statement Schedules
filed as part of this Annual Report on Form 10K.  All other
schedules omitted herein are so omitted because either (1) they
are not applicable, or (2) they required information is shown in
the Financial Statements.
          Schedules
          ---------
              V          Property and Equipment

             VI         Accumulated Depreciation and Amortization of
                         Property and Equipment

            VIII         Allowances and Reserves
     
            X          Supplementary Income Statement Information

             XI          Real Estate and Accumulated Depreciation

            XII          Mortgage Loans on Real Estate

     (e)  Exhibits, including those incorporated by references.

     The following is a list of Exhibits filed as part of this
Annual Report on 


                                25

<PAGE>

     Form 10K.  Where so indicated by footnotes, Exhibits that
were previously filed are incorporated by references.
                                             Legend for Documents
                                                Incorporated
                                                by Reference
                                             --------------------
Articles of Incorporation and By Laws

   Articles of Incorporation                        (1)

   By-Laws                                          (1)

   By Laws as Amended                               (2)

Instruments Defining Rights of Share-
   holders Including Indentures

   Specimen Certificate for Shares of
      Common Stock                                  (1)

   Security Combination Agreement                   (1)

Additional Exhibits - Exchange Offer                (3)

                    - Lease with Sports 
                      Authority, Inc.               (4)

                    - Lease with Tandy
                      Corporation                   (5)

Form 8K - Change in Certifying Accountants          (6)

Form 8K-A - Change in Certifying Accountants        (7)
     
Legend
------
     (1)  Filed September 21, 1968 as an Exhibit to Form 10K and
incorporated herein by reference.
     (2)  Filed December 15, 1986 as part of proxy statement and
incorporated herein by reference.
     (3)  Filed December 23, 1983 - Exchange Offer.
     (4)  Filed October 12, 1994 as an exhibit to Form 10K-A and
incorporated herein by reference.
     (5)  Filed December 21, 1995 as an exhibit to Form 10K.
     (6)  Filed November 15, 1996 and incorporated herein by
reference.
     (7)  Filed November 20, 1996 and incorporated herein by
reference.


                                26

<PAGE>

Supplemental Information
     No annual report or proxy material has been sent to security
holders.  Such annual report and proxy material are to be
furnished to security holders subsequent to the filing of the
annual report on this form.  Copies of such material will be
furnished to the Commission when it is sent to security holders.

                                27

<PAGE>

                          HOLOBEAM, INC.
                             Form 10K
                        September 30, 1997

                            Signatures



Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.


Registrant     Holobeam, Inc.    

By   William M. Hackett       

Date December 19, 1997        


Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons
on behalf of the Registrant and in the capacities and on the
dates indicated.


HOLOBEAM, INC.


By:  Melvin S. Cook                     
     Melvin S. Cook
     President and Chairman of the Board

Date:     December 12, 1997                  



By:  William M. Hackett                 
     William M. Hackett
     Director and Treasurer

Date:     December 19, 1997                  



By:  Beverly Cook                  
     Beverly Cook
     Director

Date:     December 12, 1997                  


<PAGE>









                                HOLOBEAM, INC.

                             FINANCIAL STATEMENTS
                     WITH INDEPENDENT ACCOUNTANTS' REPORT

                                 YEARS ENDED 
                     SEPTEMBER 30, 1997, AND 1996 AND 1995




<PAGE>

HOLOBEAM, INC.

INDEX TO FINANCIAL STATEMENTS





                                                                    PAGE
INDEPENDENT ACCOUNTANTS' REPORT                                      F-1

FINANCIAL STATEMENTS:

  BALANCE SHEETS                                                   F-2,3
    SEPTEMBER 30, 1997 AND 1996

  STATEMENTS OF OPERATIONS                                           F-4
    SEPTEMBER 30, 1997, 1996 AND 1995

  STATEMENTS OF SHAREHOLDERS' EQUITY                                 F-5
    SEPTEMBER 30, 1997, 1996 AND 1995

  STATEMENTS OF CASH FLOWS                                           F-6
    SEPTEMBER 30, 1997, 1996 AND 1995

  NOTES TO FINANCIAL STATEMENTS                                   F-7-17

SCHEDULES FOR THE YEARS ENDED SEPTEMBER 30, 1997,
    1996 AND 1995

   V   PROPERTY AND EQUIPMENT                                        F-18

   VI  ACCUMULATED DEPRECIATION AND AMORTIZATION
        PROPERTY AND EQUIPMENT                                      F-19

   X   SUPPLEMENTERY INCOME STATEMENT INFORMATION                    F-20

   XI  REAL ESTATE AND ACCUMULATED DEPRECIATION                      F-21

   XII MORTGAGE LOANS REAL ESTATE                                   F-22

ALL OTHER SCHEDULES HAVE BEEN OMITTED BECAUSE THEY ARE NOT APPLICABLE,
OR THE INFORMATION IS SHOWN IN THE FINANCIAL STATEMENTS OR NOTES
THERETO.  











<PAGE>



                        INDEPENDENT ACCOUNTANTS' REPORT

To the Board of Directors and Stockholders
Holobeam Inc.
Wyckoff, New Jersey

We have audited the accompanying balance sheets of Holobeam, Inc.
as of September 30, 1997 and 1996 and the related statements of
operations, shareholders' equity and statements of cash flows for
the years then ended .  These financial statements are the
responsibility of the Company's management.  Our responsibility
is to express an opinion on these financial statements based on
our audits. The financial statements of Holobeam, Inc. as of
September 30, 1995, were audited by other auditors whose report
dated December 25, 1995, expressed an unqualified opinion on
those statements.

We conducted our audits in accordance with generally accepted
auditing standards.  Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatements.  An
audit includes, examining on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation.  We believe that
our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above
present fairly, in all material respects the financial position
of Holobeam, Inc. as of September 30, 1997 and 1996, and the
results of its operations, shareholders' equity and its cash
flows for  the years then ended  in conformity with generally
accepted accounting principles.  Further, it is our opinion that
the schedules referred to in the accompanying index present
fairly the information set forth therein.  

                                                                    
  R.A. FREDERICKS & COMPANY, LLP                                        


Montville, New Jersey
December 12, 1997







                                                                F-1

<PAGE>

HOLOBEAM, INC.

BALANCE SHEETS
SEPTEMBER 30, 1997 AND 1996



<TABLE>
<CAPTION>
                                    ASSETS 

                                                         1997           1996 
                                                         ----           ----
<S>                                               <C>           <C>                                                               
CURRENT ASSETS
      Cash (including equivalents of $227,732                  
       in 1997 and $467,705 in 1996)                  $ 365,308   $   598,772
      Short-term Investments                            400,000             -
      Accrued Interest                                    4,051             -
      Deferred Tax Asset                                      -        91,800
      Prepaid Income Taxes                                3,196             -
      Prepaid Expenses                                    6,452         6,312
                                                     ----------     ---------
TOTAL CURRENT ASSETS                                    779,007       696,884
                                                     ----------     ---------
PROPERTY AND EQUIPMENT-COST
      Real Estate:
        Land                                            452,772       452,772
        Buildings and Building Improvements           6,961,244     6,961,244
                                                     ----------     ---------
      TOTAL                                           7,414,016     7,414,016
                                       
      Machinery and Equipment                            66,939        67,227
      Furniture and Fixtures                             12,657         2,258
                                                     ----------     ---------
      TOTAL                                           7,493,612     7,483,501

Less: Accumulated Depreciation and Amortization       1,354,980     1,166,447
                                                     ----------     ---------
PROPERTY AND EQUIPMENT-NET                            6,138,632     6,317,054
                                                     ----------     ---------
OTHER ASSETS                                                   
    Patents and Patent application cost, net of
    accumulated amortization of $190,668 in 1997
       and $176,881 in 1996                              83,862        88,171
      Deferred Charges                                  551,166       592,275
      Other Receivables                                       -        49,230
                                                      ---------     ---------
TOTAL OTHER ASSETS                                      635,028       729,676
                                                      ---------     ---------
TOTAL ASSETS                                        $ 7,552,667   $ 7,743,614
                                                      =========    ==========

</TABLE>



   The accompanying notes are an integral part of the financial statements. 
                                      F-2

<PAGE>

HOLOBEAM, INC.

BALANCE SHEETS
SEPTEMBER 30, 1997 AND 1996

<TABLE>
<CAPTION>



                     LIABILITIES AND SHAREHOLDERS' EQUITY

                                                        1997           1996  
                                                        ----           ----
<S>                                              <C>            <C>
CURRENT LIABILITIES
      Mortgage Payable-Current Portion               $  267,783   $   245,412
      Accounts Payable                                  116,172       159,767
      Franchise Taxes Payable                             8,593         4,345
      Income Taxes Payable                                    -         2,000
      Other Accrued Expenses                            102,039       106,329
                                                       --------    ----------
TOTAL CURRENT LIABILITIES                               494,587       517,853
                                                      ---------    ----------
LONG-TERM DEBT
     Mortgage Payable (Net of Current Portion)        6,264,065     6,531,848
     Real Estate Commissions Payable                     45,995       135,450
                                                      ---------     ---------
TOTAL LONG-TERM LIABILITIES                           6,310,060     6,667,298
                                                      ---------     ---------
TOTAL LIABILITIES                                     6,804,647     7,185,151
                                                      ---------     ---------
SHAREHOLDERS' EQUITY
      Common Stock, Par Value $.10 Per Share
       Authorized 2,000,000 Shares                                           
      Issued 1,052,598 in 1997 and 1996                 105,260       105,260
      Additional Paid in Capital                     12,399,699    12,399,699
      Accumulated Deficit                            (9,114,557)   (9,418,439)
                                                     ----------    ----------
TOTAL                                                 3,390,402     3,086,520

    Less: Cost of Shares in Treasury (746,573 
       in 1997 and 739,079 in 1996)                  (2,642,382)   (2,528,057)
                                                     ----------    ----------
TOTAL SHAREHOLDERS' EQUITY                              748,020       558,463
                                                     ----------    ----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY           $7,552,667    $7,743,614
                                                     ==========    ==========

</TABLE>









    The accompanying notes are an integral part of the financial statements
                                    F-3

<PAGE>

HOLOBEAM, INC.

STATEMENTS OF OPERATIONS
YEARS ENDED SEPTEMBER 30, 1997, 1996 AND 1995

<TABLE>
<CAPTION>
                                                     
                                              1997         1996        1995    
                                              ----         ----        ----
<S>                                       <C>         <C>         <C>       
REVENUES
      Rental Income                        $1,845,509  $1,838,216  $1,834,829
      Interest Income                          27,873      18,002      60,519
      Other                                         -           -          44
                                            ---------   ---------  ----------
TOTAL                                       1,873,382   1,856,218   1,895,392
                                            ---------   ---------  ----------

COSTS AND EXPENSES
      Rental Expense                          267,499     260,962     280,038
      General Expense                         347,556     253,146     304,192
      Interest Expense                        587,061     607,719     626,638
      Research and Development                147,562     219,001     120,833
      Other                                    10,022           -         101
                                            ---------   ---------   ---------
TOTAL                                       1,359,700   1,340,828   1,331,802
                                            ---------   ---------   ---------
INCOME BEFORE INCOME TAXES                    513,682     515,390     563,590

INCOME TAX EXPENSE                            209,800     208,956     228,996
                                            ---------  ----------  ----------
NET INCOME                                  $ 303,882  $  306,434  $  334,594
                                            =========  ==========  ==========
WEIGHTED AVERAGE NUMBER OF SHARES 
 OUTSTANDING                                  310,426     316,992     323,596
                                            ---------  ----------  ----------
EARNINGS PER SHARE                          $     .98  $      .97   $    1.03
                                            =========  ==========  ==========


</TABLE>








   The accompanying notes are an integral part of the financial statements. 
                                      F-4


<PAGE>

HOLOBEAM, INC.

STATEMENTS OF SHAREHOLDERS' EQUITY
YEARS ENDED SEPTEMBER 30, 1997, 1996 AND 1995  


<TABLE>

                                                        Additional                                
                                      Common Stock       Paid-In      Accumulated      Treasury Stock
                                   Shares     Amount     Capital        Deficit      Shares    Amount
                                   ------     ------    ----------    -----------    ------    ------
<S>                               <C>        <C>       <C>          <C>            <C>      <C>       
BALANCE, SEPTEMBER 30, 1994        1,052,598  $105,260  $12,399,699  $(10,059,467)  727,421  $2,377,422

      Net Income                                                          334,594

      Purchase of Treasury Stock                                                      3,034      31,242
                                   ---------  --------  -----------  ------------   -------  ----------
BALANCE, SEPTEMBER 30, 1995        1,052,598  $105,260  $12,399,699  $ (9,724,873)  730,455  $2,408,664

      Net Income                                                          306,434

      Purchase of Treasury Stock                                                      8,624     119,393
                                   ---------  --------  -----------  ------------   -------   ---------
BALANCE, SEPTEMBER 30, 1996        1,052,598  $105,260  $12,399,699  $ (9,418,439)  739,079   2,528,057

      Net Income                                                          303,882

      Purchase of Treasury Stock                                                      7,494     114,325
                                   ---------  --------  -----------  ------------   -------  ----------
BALANCE, SEPTEMBER 30, 1997        1,052,598  $105,260  $12,399,699  $ (9,114,557)  746,573  $2,642,382
                                   =========  ========  ===========  =============  =======  ==========


</TABLE>





  The accompanying notes are an integral part of the financial statements.
                                                     F-5

<PAGE>
HOLOBEAM, INC.

STATEMENTS OF CASH FLOWS
YEARS ENDED SEPTEMBER 30, 1997, 1996 AND 1995 
<TABLE>
<CAPTION>

            
                                                       1997         1996        1995  
                                                       ----         ----        ----
<S>                                                   <C>       <C>          <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income                                             $303,882     $306,434  $  334,594
                                                       --------     --------  ----------
Adjustments to Reconcile Net Income to Net Cash
 Provided by Operating Activities:
    Loss on disposition of assets                        10,022            -           -
    Depreciation                                        212,487      206,651     202,714
    Amortization                                         54,895       56,037      56,545
    Patent and Patent Application Costs                  (9,477)     (30,048)    (22,168)

Increase (Decrease) in:                                      
    Accounts Payable and Accrued Expenses               (45,637)      20,551      72,054
    Real Estate Brokers Commissions                     (89,455)     (33,863)    169,313

Decrease (Increase) in:                                                   
    Other Receivables                                    49,230            -      (5,422)
    Deferred Tax Asset                                   91,800      203,790     228,996
    Deferred Charges                                          -            -    (330,056)
    Interest Receivable                                  (4,051)       3,758      (2,115)
    Prepaid Expenses                                     (3,336)        (608)     (2,236)
                                                         -------     -------     -------
Total Adjustments                                       266,478      426,268     367,625
                                                        -------      -------     -------
Net Cash Provided by Operating Activities               570,360      732,702     702,219
                                                        -------      -------     -------
CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of short-term investments                     (400,000)           -           -
Capital Expenditures                                    (51,587)           -   (1,193,187)
Proceeds from sale of assets                              7,500            -           -
                                                        -------       ------    ---------
Net Cash Used in Investing Activities                  (444,087)           -   (1,193,187)
                                                        -------       ------    ---------
CASH FLOWS FROM FINANCING ACTIVITIES

Principal Payments on First Mortgage                   (245,412)    (224,902)    (206,121)
Purchase of Treasury Stock                             (114,325)    (119,393)     (31,242)
Proceeds of Mortgages and Loans on Real Estate-Tandy          -            -    1,189,675
Principal Payments on Loan Payable-Tandy                      -   (1,137,175)     (52,500)
                                                        -------    ---------    ---------
Net Cash Provided (Used) by Financing Activities       (359,737)  (1,481,470)     899,812
                                                        -------    ---------    ---------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS   (233,464)    (748,768)     408,844

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR          598,772    1,347,540      938,696
                                                      ---------   ----------   ----------
CASH AND CASH EQUIVALENTS AT END OF YEAR              $ 365,308   $  598,772   $1,347,540 
                                                      =========   ==========   ==========
SUPPLEMENTAL CASH FLOWS DISCLOSURES
Interest Paid                                         $ 588,852   $  609,359   $  628,142
Income Taxes Paid                                     $ 124,925   $    3,041   $      150


</TABLE>


  The accompanying notes are an integral part of the financial statements. 
                                            F-6

<PAGE>

HOLOBEAM, INC.

NOTES TO FINANCIAL STATEMENTS 
YEARS ENDED SEPTEMBER 30, 1997, 1996 AND 1995


NOTE 1.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

            a.   Nature of Operations

                 The Company is engaged in the rental of real
                 property for retail use and in development of
                 surgical staples and the technology used to apply
                 the staples.

            b.   Depreciation and Amortization

                 It is the policy of the Company to provide for
                 depreciation and amortization of the building and
                 equipment on a straight line and accelerated basis
                 in amounts sufficient to write-off the cost of the
                 assets over their estimated useful lives, which are
                 as follows:

                   Building and Building Improvements      31. 5 to 40 years
                   Machinery and Equipment                      5 to 7 years
                   Furniture and Fixtures                      7 to 10 years

                 Maintenance and repairs are charged to operations in
                 the year in which incurred, while replacements and
                 betterments are capitalized by charges to the
                 appropriate asset accounts.  The cost and
                 accumulated depreciation and amortization with
                 respect to assets retired or otherwise disposed, are
                 eliminated from the assets and related accumulated
                 depreciation and amortization accounts and any
                 profit or loss resulting therefrom is reflected in
                 operations.

                 Patent and Patent application costs are amortized on
                 a straight-line basis over a ten year period.

            c.   Earnings Per Share

                 Earnings per share of common stock has been computed
                 by dividing net income by the weighted average
                 number of common shares outstanding during the year.

            d.   Capitalized Real Estate Taxes

                 The Company capitalized real estate taxes related to
                 the property upon which the Company intended to
                 construct a commercial building.  Such taxes were
                 capitalized until the property was put into service
                 on October 1, 1994.

            e.   Statement of Cash Flows

                 For purposes of reporting cash flows, all liquid
                 investments with original maturities of three months
                 or less are considered cash equivalents.




            
                                      F-7

<PAGE>

HOLOBEAM, INC.

NOTES TO FINANCIAL STATEMENTS 
YEARS ENDED SEPTEMBER 30, 1997, 1996 AND 1995


NOTE 1.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

            f.   Income Taxes

                 Deferred income taxes are provided on temporary
                 differences between financial statement and income
                 tax bases of assets and liability's.  Generally, 
                 deferred tax assets are recognized in the current
                 period for the future benefit of net operating loss
                 carryforwards and items for which expenses have been
                 recognized for financial statement purposes, but
                 will be deductible in future periods.  Valuation
                 allowances are established when necessary to reduce
                 deferred tax assets to the amount expected to be
                 realized. 

            g.   Deferred Charges

                 It is the policy of the Company to charge costs
                 associated with the acquisition of long term debt
                 (mortgages) to expense over the term of the
                 mortgage.

                 In addition, the Company charges costs associated
                 with the procurement of operating leases,
                 specifically real estate brokers commissions, to
                 expense during the term of the operating lease.  

            h.   Use of Estimates

                 The preparation of financial statements requires
                 management to make estimates and assumptions that
                 affect certain reported amounts and disclosures. 
                 Accordingly, actual results could differ from these
                 estimates.
            
            I.   Short-Term Investments

                 Short-term investments have an original maturity of
                 more than three months and a remaining maturity of
                 less than 1 year.  These investments are stated at
                 cost as it is the intent of the company to hold
                 these securities until maturity.    
NOTE 2.     INCOME TAXES

            The deferred tax assets recorded on the balance sheet as
            of September 30, are as follows:

                                              1997      1996       1995   
            Deferred tax asset          $        -    $ 91,800   $ 295,590
            Valuation allowance                  -           -           -
                                         ---------     -------    --------
            Net deferred tax asset      $        -    $ 91,800   $ 295,590
                                         =========     =======    ========

            Net operating loss carryovers of the Company, aggregated
            approximately $0 at September 30, 1997, and $270,000 at
            September 30, 1996 and $326,716 at September 30, 1995.          

F-8

<PAGE>



HOLOBEAM, INC.

NOTES TO FINANCIAL STATEMENTS 
YEARS ENDED SEPTEMBER 30, 1997, 1996 AND 1995


NOTE 2.     INCOME TAXES (Continued)
            
            The sources of deferred income taxes for the years ended
            September 30, are as follows:

                                                1997        1996        1995 

            Depreciation                 $          -$          -   $ 413,371
            Net operating loss carryover            -     270,000     326,716
                                           ----------   ---------    --------
                                         $          -   $ 270,000   $ 740,087
                                           ==========   =========    ========

            The difference between the statutory federal income tax
            rate on income before income taxes and the company's
            effective income tax rate is as follows:
                                               1997        1996        1995  

            Federal statutory income tax rate      34%          34%        34%
            State tax provisions, net of 
             federal benefits                        6           6          6
            Other                                    1           1          1
                                                   ---         ---        ---
            Effective income tax expense rate       41%         41%        41%
                                                   ===         ===        ===
            Income tax expense (benefit) consisted of the following:

                                             1997       1996       1995  
            Current
              Federal                    $  69,000  $    2,916  $       -
              State                         49,000       2,125          -

            Deferred
              Federal                       91,800     184,508    194,938
              State                              -      19,407     34,058
                                          --------  ----------  ---------
                                          $209,800  $  208,956  $ 228,996
                                          ========  ==========  =========

            Capital losses of the Company which approximates $0 in
            1997, $0 in 1996, and $17,575 in 1995 were available to
            offset future capital gains.  Capital losses of $17,575
            expired in 1995.

            In 1997, 1996 and 1995, the net operating loss carryovers
            do not agree with the accumulated deficit on the balance
            sheets for the same periods because some net operating
            losses have expired and because capital losses are not
            included in the net operating loss carryovers.

            

                                      F-9
<PAGE>

HOLOBEAM, INC.

NOTES TO FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 1997, 1996 AND 1995
            

NOTE 3.     RENTAL INCOME UNDER OPERATING LEASES

            The Company has leased two buildings at its A & S Drive,
            Paramus, N.J. site for retail use.  The Sports Authority,
            Inc. has leased the 62,000 sq. ft. building for a lease
            term of twenty (20) years and the Tandy Corporation has
            leased the 30,000 sq. ft. building for use as a Computer
            City retail store for a lease term of fifteen (15) years. 
            The tenants are also responsible for real estate taxes
            and other assessments as defined in the operating lease
            agreements.

                                               1997         1996       1995  
               Buildings and building improvements:               
                Cost                        $6,961,244  $6,961,244 $8,424,724
                Accumulated depreciation     1,326,646   1,126,687  1,937,408
                                             ---------   --------- ----------
                Net buildings and building 
                 improvements               $5,634,598  $5,834,557 $6,487,316
                                             =========   =========  =========

            The minimum future rentals on noncancellable operating
            leases for the years ending September 30, are as follows:

                 1998 $1,925,717      2003   $2,116,467       2008 $2,331,017
                 1999  1,925,717      2004    2,116,467       2009  2,331,017
                 2000  2,020,217      2005    2,225,142       2010  1,497,842
                 2001  2,020,217      2006    2,225,142       2011  1,497,842
                 2002  2,108,447      2007    2,322,194       2012  1,373,022
                                                                  -----------
                                                           Total  $30,036,467
                                                                  ===========
            Net rental income consists of the following:
                                               1997       1996        1995  
            Rental income                  $1,845,509  $1,838,216  $1,834,829
            Depreciation expense             (199,959)   (199,987)   (194,419)
            Other expenses                    (67,540)    (60,975)    (85,619)
                                           ----------   ---------   ---------
            Rental income, net             $1,578,010  $1,577,254  $1,554,791
                                           ==========   =========   =========
            In 1997, 1996, and 1995, depreciation expense included
            all depreciation of the rental buildings and building
            improvements.

            The Company entered into a triple net lease agreement
            with The Sports Authority, Inc., Fort Lauderdale,
            Florida.  The term of the lease is twenty (20) years with
            four (4) options to extend the term for an additional
            period of five (5) years in each option.  
            The Company was responsible for funding certain
            improvements to the building pursuant to the lease
            agreement and incurred costs amounting to $3,567,276 at
            September 30, 1993.  The Company reimbursed The Sports
            Authority, Inc. for such improvements and on February 5,
            1993 the original lease was amended and the base rent was
            increased to reflect the improved condition of the
            building.

                                     F-10

<PAGE>

HOLOBEAM, INC.

NOTES TO FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 1997, 1996 AND 1995


NOTE 3.     RENTAL INCOME UNDER OPERATING LEASES (Continued)

            The Company obtained additional mortgage financing
            totaling $7,500,000 in order to fund reimbursement to The
            Sports Authority, Inc.,  whose former parent company, K-
            Mart Corporation (K-mart Corporation is a public company
            and financial information regarding K-mart is publicly
            available) has guaranteed the incremental monthly rental
            payments over the remaining life of the lease.  (See Note
            8).

            The base rents under the amended lease were increased as
            follows:

                 2nd through 5th years                            $1,208,217
                 6th through 10th years                            1,295,716
                 11th through 15th years                           1,391,967
                 16th through 20th years                           1,497,842

            In addition to the rent, the tenant is responsible for
            real estate taxes and other assessments as defined in the
            operating lease.

            Tandy Corporation has constructed a 30,000 sq.ft.
            building on the Company's site located in Paramus, N.J.
            for use as a Computer City retail store.  Tandy
            Corporation commenced paying rent to the Company pursuant
            to the terms of the operating lease on October 1, 1994. 
            The lease term is for fifteen (15) years at an annual
            rental of $630,000 for the first five years, $724,500 for
            the second five years and $833,175 for the last five
            years.  Tandy Corporation has three (3) options to extend
            the term of the lease for an additional period of five
            (5) years for each such option.

            Pursuant to the terms and conditions of the lease, the
            Company agreed to reimburse Tandy Corporation up to
            $1,200,000 plus the costs of paving the driveway and
            parking area and one-half (1/2) the cost of exterior
            lighting not attached to the building.  This construction
            allowance was amended to $1,189,675 and paid in cash to
            Tandy Corporation on November 9, 1995.

            Costs associated with the 30,000 sq. ft. building are as
            follows:*

            Construction allowance paid to Tandy Corporation                
            $1,189,675
            Costs incurred by the Company for use variance 
             and site improvement (deferred until put in
             service at October 1, 1994)                             434,821
            Construction costs incurred through September 30,
            1994 (deferred until put in service at October
            1, 1994)                                                 964,505
            Construction costs incurred during 1995                    3,512
                                                                   ---------
             Total Costs of 30,000 sq. ft. building occupied
             by Tandy Corporation.                                $2,592,513
                                                                   =========

            (*)  Does not include costs of improvements incurred by
the tenant.



                                     F-11
<PAGE>

HOLOBEAM, INC.

NOTES TO FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 1997, 1996 AND 1995


NOTE 3.     RENTAL INCOME UNDER OPERATING LEASES (Continued)

            The construction allowance was payable to Tandy
            Corporation two (2) months after a permanent certificate
            of occupancy was issued by local governmental
            authorities.  According to the terms and conditions of
            the lease agreement, Tandy Corporation could accrue
            interest at the annual rate of 7% on the unpaid balance
            and could also cease paying rent until such amounts
            payable by the Company were paid.  Accordingly, the
            Company elected to pay the amounts in full on November 9,
            1995.

            The following is a condensed summary of financial
            information on the above publicly  held companies:

                        Tandy Corporation  The Sports Authority      K-Mart
                             12/31/96           1/28/97              1/31/97
                          (In Millions)     (In Thousands)       (In Millions)
 Current assets                   $ 1,940       $  445,111             $7,733
                                  -------       ----------             ------
 Total assets                       2,583          754,270             14,286
                                  -------       ----------             ------
 Current liabilities                1,194          269,114              3,602
                                  -------       ----------             ------
 Total liabilities                  1,318          443,850              8,214
                                  -------       ----------             ------
 Total stockholders' equity         1,265          310,317              6,072
                                  -------       ----------             ------
 Net sales                          6,285        1,274,461             31,437
                                  -------       ----------             ------
 Cost of sales                      4,263          905,923             24,390
                                  -------       ----------             ------
 Gross profit                       2,022          368,538              7,047
                                  -------       ----------             ------
 Income (loss) before income taxes   (146)          48,032                330
                                  -------       ----------             ------
 Income taxes (benefit)               (54)          19,597                 68
                                  -------       ----------             ------
 Minority Interest                      -           (1,570)                 -
                                  -------       ----------             ------
 Net income (loss) continuing         (92)          30,005                231
                                  -------       ----------             ------
 Discontinued Operations                -                -               (451)
                                  -------       ----------             ------
 Net income (loss)               $    (92)       $  30,005            $  (220)
                                  -------       ----------             ------

NOTE 4.     RELATED PARTY TRANSACTIONS

            An officer and member of the Board of Directors, acted in
            the capacity as insurance broker and was the Company's
            landlord until his death during the year ended September
            30, 1997.  
                                            1997             1996      1995  
                 Landlord-Office rental                            
                  and related services      $9,999          $10,908   $10,908
                 Insurance                       -           19,076    17,227
                                             -----          -------    ------
                                            $9,999          $29,984   $28,135
                                             =====          =======   =======
            
NOTE 5.     RESEARCH AND DEVELOPMENT

            Research and development expenses in the amount of
            $147,562 in 1997, $219,001 in 1996, and $120,833 in 1995
            were charged to operations and included in costs and
            expenses.

                                     F-12

<PAGE>

HOLOBEAM, INC.

NOTES TO FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 1997, 1996 AND 1995


NOTE 6.     RENT EXPENSE
            
            The Company had leased approximately 1,000 square feet of
            office space on a month to month basis at a monthly
            rental of $909  from a member of the Board of Directors
            (See Note 4) until August 31, 1997. The Company moved its
            headquarters to Hohokus, New Jersey and occupies
            approximately 1,000 square feet of office and laboratory
            space on an annual lease.  Lease payments are $950 per
            month and are paid to an unaffiliated landlord.   Rent
            expense was $11,449 in 1997, $10, 908 in 1996 and 1995.

NOTE 7.     PATENTS

            The Company has discontinued efforts relating to solar
            cells and semi-conductor technology.  Work in the field
            has moved in other directions than that of the Company's
            technology and there has been a substantial reduction of
            government support in this technical area.  The funding
            that had been received by laboratories exploring the
            Company's technology has also terminated.

            The Company is continuing its efforts in the area of
            medical staple design for use in internal surgery. 
            Several United States Patents have been issued and
            foreign applications have been filed on a novel staple. 
            The staple has been produced and it is anticipated that
            animal tests will continue during 1998.  Research and
            development costs in the amounts of $147,562, $219,000
            and $120,833 have been expended in connection with the
            surgical staple during 1997, 1996 and 1995, respectively.

NOTE 8.     LONG-TERM DEBT

            The mortgage consists of two loans, one in the amount of
            $6,000,000 payable in monthly installments of $55,328
            including interest at 8.77% until 2011.  The second is in
            the amount of $1,500,000 payable in monthly installments
            of $13,767 including interest at 8.7% until 2011.       

            Costs incurred in connection with this mortgage amounted
            to $102,520 and are charged to expense over the life of
            the mortgage.  This amount is included in the balance of
            deferred charges as detailed in Note 9.  The expense for
            the next five (5) years is presented below:

                 1998                       $5,126
                 1999                        5,126
                 2000                        5,126
                 2001                        5,126
                 2002                        5,126

            



            

                                     F-13

<PAGE>

HOLOBEAM, INC.

NOTES TO FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 1997, 1996 AND 1995


NOTE 8.     LONG-TERM DEBT (Continued)

            The balance outstanding for each debt issued at the end
            of 1997, 1996, and 1995 is as follows:
                                                1997         1996      1995  
            First Mortgage on
            62,000 sq. ft. Building         $6,531,848  $6,777,260 $7,002,162
            Loan Payable-Tandy Corp.                 -           -  1,137,175
                                            ----------  ----------  ---------
                                             6,531,848   6,777,260  8,139,337
                                           
            Real Estate Brokers Commissions 
               Payable                          45,995     135,450    169,313
                                            ----------  ----------  ---------
            Total                            6,577,843   6,912,710  8,308,650

            Less Current Portion               267,783     245,412  1,362,086
                                            ----------  ----------  ---------
            Long-Term Portion               $6,310,060  $6,667,298 $6,946,564
                                            ==========  ========== ==========
            There was no outstanding long-term debt at September 30,
            1996 other than the first mortgage and real estate
            brokers commissions payable after September 30, 1996. 
            The mortgage is secured by the land and building and
            operating lease agreement with The Sports Authority, Inc. 
            (See Note 3).

            The principle payments of long-term debt for the term of
            the mortgage is as follows:

                 1998     $267,783      2003  $414,217     2008     $640,727
                 1999      292,195      2004   451,978     2009      699,136
                 2000      318,832      2005   493,181     2010      762,870
                 2001      347,897      2006   538,140     2011      338,084
                 2002      379,611      2007   587,197                      

NOTE 9.     DEFERRED CHARGES

            The composition of deferred charges and related
            amortization is as follows:
                                                    
                                                    Real Estate              
                                   Mortgage      Brokers Commissions
                           Total    Costs   Sports Authority    Tandy Corp.
Original Cost            $712,160  $102,520      $279,584        $330,056
Accumulated Amortization  160,994    23,921        71,061          66,012
                         --------  --------      --------        --------
Balance 9/30/97          $551,166  $ 78,599      $208,523        $264,044
                         ========  ========      ========        ========

Original Cost            $712,160  $102,520      $279,584        $330,056
Accumulated Amoritzation  119,885    18,795        57,082          44,008
                         --------  --------      --------        --------
Balance 9/30/96          $592,275   $83,725      $222,502        $286,048
                         ========  ========      ========        ========
                                    F-14  

<PAGE>


HOLOBEAM, INC.

NOTES TO FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 1997, 1996 AND 1995


NOTE 10.    DEFERRED SITE COST

            The Company incurred costs in connection with an
            application for a use variance and site improvements for
            the property owned by the Company at 50 A&S Drive,
            Paramus, New Jersey, adjacent to the building owned by
            the Company and leased to the Sports Authority, Inc. 
            Such costs amounting to $806,656 have been considered to
            be part of the site cost and are included in fixed
            assets.  No depreciation or amortization was recorded
            until the year ended September 30, 1995.  Depreciation
            expense recorded during 1995 on the deferred site costs
            transferred to the 30,000 sq. ft. building  amounted to
            $60,935.

NOTE 11.    OTHER EMPLOYEE BENEFITS

            The Financial Accounting Standards Board issued SFAS No.
            106 " Employers Accounting for Post retirement Benefits"
            and SFAS No. 112 "Employers Accounting for Post
            employment Benefits", which changed employers' accounting
            for these benefits.  Since the Company has no post-
            retirement benefits plan, and does not offer post
            employment benefits, SFAS No. 106 and SFAS No. 112 are
            not applicable.

NOTE 12.    CONCENTRATION OF CREDIT RISK

            The Company maintains its cash balances in several
            financial institutions in excess of the $100,000
            guarantee by the Federal Deposit Insurance Corporation
            (FDIC).  At September 30, 1997, this excess amounted to
            $169,827.  The Company also maintains its short-term
            investments in a certificate of deposit in which the
            entire balance of $400,000 is in excess of the FDIC
            insured balance.
  
            Substantially all of the Company's income is rental
            income received from two tenants.  These tenants are
            subject to long-term lease agreements. (See Note 3)

NOTE 13.    FINANCIAL REPORTING BY BUSINESS SEGMENTS

            A summary description of the Company's business segments
            is as follows:

            Medical Staples-Engaged in engineering and design of
            staples for use in internal surgery,  and in the
            technology used to fabricate the equipment issued to
            apply the staples.

            Electro-Optical-Engaged in engineering and development of
            equipment for the semi-conductor industry.  The company
            has discontinued efforts relating to the electro-optical
            segment of its business.

            Rental-Engaged in leasing to tenants, the two retail
            buildings owned by the Company at 50 A&S Drive, Paramus,
            New Jersey.




F-15

<PAGE>


HOLOBEAM, INC.

NOTES TO FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 1997, 1996 AND 1995


NOTE 13.    FINANCIAL REPORTING BY BUSINESS SEGMENTS (Continued)


                                        Revenues                        
                                          1997         1996      1995   
         Business Segments:

         Surgical Staples            $         -   $        - $        -
         Electro-Optical                       -            -          -
         Real Estate Rental            1,845,509    1,838,216  1,834,829
         Corporate                        27,873       18,002     60,563
                                      ----------   ---------- ----------
              Total                   $1,873,382   $1,856,218 $1,895,392
                                      ==========   ========== ==========
        Business Segments:                      Income (Loss)   

                                          1997         1996       1995  
         Surgical Staples            $  (147,562)$   (219,001) $(120,833)
         Electro-Optical                       -            -          -
         Real Estate Rental            1,578,010    1,577,254  1,554,791
                                      ----------   ----------  ---------
              Total                    1,430,448    1,358,253  1,433,958
                                      ----------   ----------  ---------
          General and Administrative
         Expenses                       (347,556)    (253,146)  (304,192)
         Interest Expense               (587,061)    (607,719)  (626,638)
         Other Income                     17,851       18,002     60,462
         Income Tax Expense             (209,800)    (208,956)  (228,996)
                                       ---------    ---------   --------
              Total                   (1,126,566)  (1,051,819)(1,099,364)
                                       ---------    ---------  ---------
         Net Income                   $  303,882  $   306,434 $  334,594
                                       =========    =========  =========
         Business Segments:                   Identifiable Assets            
                                          1997         1996      1995   
         Surgical Staples           $     63,599  $    61,729 $   37,312
         Electro-Optical                  20,263       26,442     35,739
         Real Estate Rental            6,638,536    6,885,752  7,126,240
         Corporate and Other
         Non-segment Items               830,269      769,691  1,732,671
                                       ---------    ---------  ---------
              TOTAL ASSETS            $7,552,667   $7,743,614 $8,931,962
                                       =========    =========  =========








                                     F-16


<PAGE>

HOLOBEAM, INC.

NOTES TO FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 1997, 1996 AND 1995



NOTE 14.      FAIR VALUES OF FINANCIAL INSTRUMENTS

            The Company has a number of financial instruments, none
            of which are held for trading purposes.  The Company
            estimates that the fair value of all financial
            instruments at September 30, 1997, does not differ
            materially from the aggregate carrying values of its
            financial instruments recorded in the accompanying
            balance sheet.  The estimated fair value amounts have
            been determined by the Company using available market
            information and appropriate valuation methodologies. 
            Considerable judgement is necessarily required in
            interpreting market data to develop the estmates of fair
            value, and accordingly, the estimates are not
            neccessarily indicative of the amounts that the Company
            could realize in a current market exchange.            




































                                     F-17


<PAGE>
                                                                Schedule VI
HOLOBEAM, INC.

ACCUMULATED DEPRECIATION AND AMORTIZATION 
PROPERTY AND EQUIPMENT
YEARS ENDED SEPTEMBER 30, 1997, 1996 AND 1995

<TABLE>
<CAPTION>

                                 Balance at                       Balance at
                                  Beginning                           End of
      CLASSIFICATIONS             of Year   Additions  Retirements    Year  


<S>                             <C>         <C>       <C>          <C>
YEAR ENDED SEPTEMBER 30, 1995:

Machinery and Equipment            $ 22,784   $ 8,108    $       0  $ 30,892
Furniture and Fixtures                2,107       187            0     2,204
                                    -------    ------     --------   -------
TOTAL                              $ 24,801   $ 8,295    $       0  $ 33,096
                                    -------    ------     --------   -------
YEAR ENDED SEPTEMBER 30, 1996:

Machinery and Equipment             $30,892    $8,300      $     0   $39,192
Furniture and Fixtures                2,204        52            0     2,256
                                    -------    ------      -------   -------
TOTAL                               $33,096    $8,352     $      0   $41,448
                                    -------    ------      -------   -------
YEAR ENDED SEPTEMBER 30, 1997:

Machinery and Equipment             $39,192   $10,581      $21,696   $28,077
Furniture and Fixtures                2,256       256        2,256       256
                                    -------    ------       ------    ------
                                    $41,448   $10,837      $23,952   $28,333
                                    =======    ======       ======    ======




</TABLE>















   The accompanying notes are an integral part of the financial statements.
                                     F-19

<PAGE>


                                                                  Schedule X
HOLOBEAM, INC.

SUPPLEMENTARY INCOME STATEMENT INFORMATION
YEARS ENDED SEPTEMBER 30, 1997, 1996 AND 1995

<TABLE>
<CAPTION>
                                             1997         1996        1995   

<S>                                      <C>        <C>          <C>
Maintenance and Repairs                    $10,610     $     945   $     964
                                            ======       =======     =======
Depreciation and Amortization of
 Intangible Assets                         $54,895       $56,037    $ 56,545
                                            ======        ======     =======
Taxes, Other than Payroll and Income Tax
 Franchise                                 $ 3,060       $ 4,740     $ 3,000
 Real Estate                                     0             0           0
 Other                                       6,004           300          24
                                            ------        ------      ------
                                           $ 9,064     $   5,040     $ 3,024
                                            ======      ========      ======
Royalties                                  $     0     $       0    $      0

Advertising                                $     0     $       0    $      0































   The accompanying notes are an integral part of the financial statements.
                                     F-20

<PAGE>

                                                                  Schedule V
HOLOBEAM, INC.

PROPERTY AND EQUIPMENT
SEPTEMBER 30, 1997, 1996 AND 1995


</TABLE>
<TABLE>
<CAPTION>

                                 Balance at                         Balance at
                                  Beginning                           End of
      CLASSIFICATIONS              of Year   Additions Retirements    Year  


<S>                              <C>         <C>       <C>         <C>
YEAR ENDED SEPTEMBER 30, 1995:

Machinery and Equipment            $ 67,227   $     0     $      0  $ 67,227
Furniture and Fixtures                2,258         0            0     2,258
                                    -------    ------      -------   -------
TOTAL                              $ 69,485   $     0     $      0  $ 69,485
                                    -------    ------      -------   -------
YEAR ENDED SEPTEMBER 30, 1996:

Machinery and Equipment             $67,227   $     0      $     0   $67,227
Furniture and Fixtures                2,258         0            0     2,258
                                    -------    ------      -------   -------
TOTAL                               $69,485   $     0     $      0   $69,485
                                    -------    ------      -------   -------
YEAR ENDED SEPTEMBER 30, 1997:

Machinery and Equipment             $67,227   $38,930      $39,218   $66,939
Furniture and Fixtures                2,258    12,657        2,258    12,657
                                    -------   -------       ------    ------
                                    $69,485   $51,587      $41,476   $79,596
                                    =======   =======       ======    ======





</TABLE>















   The accompanying notes are an integral part of the financial statements.
                                     F-18


<PAGE>

                                                                Schedule XII
HOLOBEAM, INC.

MORTGAGE LOANS ON REAL ESTATE
SEPTEMBER 30, 1997

<TABLE>
<CAPTION>

  
                                                                                                       Principal Amount
                                                    Periodic           Face Amount Carrying Amount     of Loans Subject to
                          Interest  Final Maturity  Payment    Prior       of              of         Delinquent Principal
                            Rate          Date       Terms     Items    Mortgage     Mortgage<F1>      or Interest   

<S>                        <C>     <C>               <C>        <C>    <C>         <C>             <C>     
Mortgage Payable
Building and Improvements    8.7%  February 5, 2011  $13,367    None   $1,500,000      $1,305,424               None

Mortgage Payable
Building and Improvements   8.77%  February 5, 2011  $56,328    None   $6,000,000      $5,226,424               None
                                                                                        ---------
                                                                                       $6,531,848
                                                                                        =========
</TABLE>


<TABLE>
<CAPTION>

Activity for the three 
  years ended September 30, 
  1997 is as follows:
                                    1997           1996             1995  

<S>                             <C>         <C>               <C>
Balance at Beginning of Year:    $6,777,260     $8,139,337       $7,208,283
Addition During Year                        
  Commercial Loans                        0              0        1,189,675<F2>
  New Mortgages                           0              0                0
                                  ---------      ---------        ---------
                                  6,777,260      8,139,337        8,397,958
Deductions During Year:
  Principal Payments                245,412        224,902          258,621
  Mortgage Payments                       0      1,137,175<F2>            0
                                  ---------      ---------        ---------
Balance at End of Year           $6,531,848     $6,777,260       $8,139,337
                                  =========      =========        =========

<FN>
<F1> The cost for Federal income taxes
  Purpose at 9/30/97 $6,531,848

<F2> The Loan was paid in full
  on November 9, 1995

</FN>
</TABLE>

 The accompanying notes are an integral part of these financial statements.
                                                          F-22



<PAGE>

                                                                Schedule XI
HOLOBEAM, INC.

REAL ESTATE AND ACCUMULATED DEPRECIATION
SEPTEMBER 30, 1997

<TABLE>
<CAPTION>
                                                                                                                          Life in
                                                                                                                            Which
                                              Cost Capitalized         Gross Amount at                                     Deprec.
                            Initial               Subsequent            Which Carried at                                  in Latest
                           Cost to Company      To Acquisition          Close of Period (1)         (2)       Date          Income
                Incumb               Bldg &             Carrying               Bldg &            Accumulated   of     Date   Stmt
               Brances    Land       Improv    Improv     Costs    Land       Improv      Total Depreciation Constr. Acqd   Comp.

<S>           <C>       <C>      <C>        <C>        <C>  <C>      <C>        <C>        <C>        <C>  <C>   <C> 
Improved Land
 Paramus, NJ  $       0 $218,402 $        0 $        0 $  0 $218,402 $        0 $  218,402 $        0      1971     -
Improved Land
 Paramus, NJ          0  173,565          0     60,805    0  234,370          0    234,370          0      1983     -

Building I
 Paramus, NJ
 Improvments  6,777,260        0    718,881  3,649,850    0        0  4,368,731  4,368,731  1,132,761 1958 1971   3 to
                                                                                                                  40
                                                                                                                  Years

Building II 
 Paramus, NJ          0        0  2,592,513          0    0        0  2,592,513  2,592,513    193,885 1995 1995   30 
                                                                                                                  Years
              ---------  -------  ---------  ---------  ---  -------  ---------  ---------  ---------  
             $6,777,260 $391,967 $3,311,394 $3,710,655 $  0 $452,772 $6,961,244 $7,414,016 $1,326,646
              =========  =======  =========  =========  ===  =======  =========  =========  =========



</TABLE>

<TABLE>
<CAPTION>

(1)Activity for the three years               (2)Activity for the three years    
   ended September 30, 1997 is                       ended September 30, 1997 is 
   as follows:                    1997       1996        1995                      as follows:      1997        1996         1995  
<S>                           <C>        <C>         <C>         <C>                           <C>         <C>         <C>   
Balance at Beginning of Year  $7,414,016  $8,424,724  $7,231,537  Balance at Beginning of Year  $1,126,687  $1,937,408  $1,742,989
Additions:                                                                          Additions:
  Improvements                         0           0           0                  Depreciation     199,959     199,987     194,419
  Acquisitions                         0           0   1,193,187              Less Retirements           0   1,010,708           0
                               ---------   ---------   ---------                                ----------   ---------   ---------
                               7,414,016   8,424,724   8,424,724
Deductions During Year:                                                 Balance at End of Year  $1,326,646  $1,126,687  $1,937,408
  Retirements                          0   1,010,708           0                                 =========   =========   =========
  Cost of Real
   Estate Sales                        0           0           0
                               ---------   ---------   ---------
Balance at End of Year        $7,414,016  $7,414,016  $8,424,724
                               =========   =========   =========

</TABLE>

The aggregate cost for Federal income tax purposes
 at September 30, 1997 is $7,414,016.
  The accompanying notes are an integral part of these financial statements.
                                                             F-21


<PAGE>