U.S. Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-QSB
Quarterly report under section 13 or 15(d) of the Securities
Exchange Act of 1934 for the quarterly period ended October 31,
1995.
Commission file number: 0-8289
THE ROVAC CORPORATION
(Exact name of small business issuer as specified in its charter)
Delaware 59-1461320
(State or other jurisdiction (I.R.S. Employer
of incorp. or organization) Identification No.)
1030 Stafford Street, Rochdale MA 01542
(Address of principal executive offices)
(508) 892-1121
(Issuer's telephone number)
Check whether the issuer (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Exchange Act during the
past 12 months (or for such shorter period that the Registrant
was required to file such reports), and (2) has been subject to
such filing requirement for the past 90 days. Yes [ ] No [X]
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the
issuer's classes of common equity, as of the latest practicable
date, July 31, 1995, was 39,546,681 shares of Common Stock, $0.01
par value.
[CAPTION]
PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statements.
See attached.
Item 2. Management's Discussion and Analysis or Plan of
Operation.
(a) Liquidity and Capital Resources
Rovac produced key CinchLock pipe connector components for
field testing. The Company continued to contact potential
customers to enter into discussions for test marketing programs.
Rovac identified a number of markets for its CinchLock pipe
connectors and has supplied metal and plastic samples of the
connectors to potential manufacturers, wholesalers and
distributors for evaluation. The company continues to receive
favorable field test results for the company's CinchLock pipe
connectors.
During the quarter, the company continued to install
production machinery and equipment in order to improve the
company's capability of manufacturing a larger volume of key pipe
connector components in its existing facilities in Rochdale,
Massachusetts. The Company also continued discussions and
negotiations for financing and capital sources in order to meet
its working capital requirements and tooling costs to implement
proposed projects. Management continues to fund the capital
requirements of the company as they become necessary.
(b) Results of Operations for the first quarter ended
October 31, 1995
General and Administrative Costs were $41,022 for the
quarter ending October 31, 1995, as compared to $42,269 for the
corresponding quarter in 1994, a decrease of $1,247. The decease
of 3% was primarily due to reduction in legal expenses. Research
and Development Costs were $11,589 for the quarter ending October
31, 1995, as compared to $2,702 for the corresponding quarter in
1994, an increase of $8,887. The increase was due to purchases
of machinery and materials for CinchLock production.
<TABLE>
THE ROVAC CORPORATION
Item 1 - Financial Information
<CAPTION>
CONDENSED BALANCE SHEETS
October 31, 1995 July 31, 1995
(Unaudited) *
Assets
<S> <C> <C>
CURRENT ASSETS
CASH - 1,939
ACCOUNTS RECEIVABLE 8,672 1,665
ACCOUNTS RECEIVABLE-OTHER 183 -
LOAN RECEIVABLE-OFFICER 698 233
INVENTORY 2,191 475
PREPAID EXPENSES 5,200 7,150
TOTAL CURRENT ASSETS 16,944 11,462
PROPERTY AND EQUIPMENT
MACHINERY AND EQUIPMENT 69,094 69,094
FURNITURE AND FIXTURES 30,283 30,283
LEASEHOLD IMPROVEMENTS 28,121 28,121
TOTAL PROPERTY AND EQUIPMENT
127,498 127,498
LESS ACCUMULATED DEPRECIATION -113,321 -112,721
14,177 14,777
PATENT AND PATENT APPLICATIONS,
NET OF ACCUMULATED AMORTIZATION
OF $52,055 ($50,105 AT JULY 31,
1995) 86,102 82,661
86,102 82,661
117,223 108,900
SEE ACCOMPANYING NOTES TO CONDENSED FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
THE ROVAC CORPORATION
Item 1 - Financial Information
<CAPTION>
CONDENSED BALANCE SHEETS
OCTOBER 31, 1995 JULY 31, 1995
(UNAUDITED) *
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
CURRENT LIABILITIES
BANK OVERDRAFT 6,693 -
NOTES PAYABLE-OFFICERS 647,908 647,021
NOTES PAYABLE-OTHER 3,250 3,250
ACCOUNTS PAYABLE:
TRADE 112,068 110,846
PARENT COMPANY 440,771 401,908
ACCRUED EXPENSES 568,416 544,298
TOTAL CURRENT LIABILITIES
1,799,106 1,707,323
STOCKHOLDER'S DEFICIENCY
8% NONVOTING PREFERRED STOCK,
$100 PAR VALUE. AUTHORIZED
25,000 SHARES, 12,000 SHARES
ISSUED. 1,200,000 1,200,000
COMMON STOCK, $.01 PAR VALUE.
AUTHORIZED 40,000,000 SHARES,
ISSUED AND OUTSTANDING
39,546,681 AND 39,546,681
SHARES. 395,467 395,467
COMMON STOCK ISSUABLE,
$.01 PAR VALUE, 25,000
SHARES. 2,775 2,775
ADDITIONAL PAID-IN
CAPITAL 8,243,276 8,243,276
ACCUMULATED DEFICIT -11,503,401 -11,439,941
TOTAL STOCKHOLDER'S DEFICIENCY
-1,661,883 -1,598,423
117,223 108,900
SEE ACCOMPANYING NOTES TO CONDENSED FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
THE ROVAC CORPORATION
<CAPTION>
STATEMENT OF OPERATIONS
(UNAUDITED)
THREE MONTHS
ENDED OCTOBER 31
1995 1994
<S> <C> <C>
REVENUES:
TECHNOLOGY SALE 11,922 -
CONTRACT INCOME - -
TOTAL REVENUES 11,922 0
OPERATING EXPENSES
GENERAL AND ADMINISTRATIVE 41,022 42,269
RESEARCH AND DEVELOPMENT 11,589 2,702
DEPRECIATION AND AMORTIZATION 2,550 2,481
TOTAL OPERATING EXPENSES 55,161 47,452
OPERATING LOSS -43,239 -47,452
OTHER INCOME (EXPENSES)
INTEREST EXPENSE -20,221 -20,675
MISCELLANEOUS INCOME - 400
-20,221 -20,275
NET LOSS -63,460 -67,727
NET LOSS PER SHARE OF
COMMON STOCK (0.00) (0.00)
WEIGHTED AVG. NUMBER OF COMMON
SHARES OUTSTANDING AND
ISSUABLE 39,368,135 39,368,135
SEE ACCOMPANYING NOTES TO CONDENSED FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
THE ROVAC CORPORATION
<CAPTION>
STATEMENT OF CASH FLOWS
(UNAUDITED)
THREE MONTHS
ENDED OCTOBER 31
1995 1994
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
NET LOSS -63,460 -67,727
ADJUSTMENTS TO RECONCILE NET LOSS
TO NET CASH USED IN OPERATING ACTIVITIES:
DEPRECIATION AND AMORTIZATION 2,550 2,481
(INCREASE) DECREASE IN ASSETS:
PREPAID EXPENSES 1,950 2,000
RECEIVABLES -7,655 -298
INVENTORIES -1,716 -723
INCREASE (DECREASE) IN ASSETS:
ACCOUNTS PAYABLE 1,222 8,673
ACCRUED EXPENSES 24,118 23,318
NET CASH USED IN OPERATING
ACTIVITIES -42,991 -32,276
CASH FLOWS FROM INVESTING ACTIVITIES:
ACQUISITION OF PROPERTY AND
EQUIPMENT - -7,000
ACQUISITION OF PATENTS AND
PATENT APPLICATIONS -5,391 -
NET CASH USED IN
INVESTING ACTIVITIES -5,391 -7,000
CASH FLOWS FROM FINANCING ACTIVITIES:
PROCEEDS FROM ISSUANCE OF NOTES
PAYABLE - OFFICERS, NET 886 1,999
ADVANCES FROM PARENT 38,864 37,391
NET CASH PROVIDED BY
FINANCING ACTIVITIES 39,750 39,390
NET CHANGES IN CASH -8,632 114
CASH (BANK OVERDRAFT) AT BEGINNING
OF PERIOD 1,939 -814
CASH (BANK OVERDRAFT) AT END OF
PERIOD -6,693 -700
SEE ACCOMPANYING NOTES TO CONDENSED FINANCIAL STATEMENTS.
</TABLE>
[CAPTION]
PART II - OTHER INFORMATION
Item 1. Legal proceedings.
None.
Item 2. Changes in Securities.
None.
Item 3. Defaults upon Senior Securities.
None.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
Item 5. Other Information.
None.
Item 6. Exhibits and Reports on Form 8-K.
None.
SIGNATURES
In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
THE ROVAC CORPORATION
(Registrant)
_______ _________________________
Date Signature
