ROVAC CORP, 10QSB, 2000-03-13

ROVAC CORP
10QSB, 2000-03-13
COMMERCIAL PHYSICAL & BIOLOGICAL RESEARCH

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U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-QSB

(Mark One)

[X] QUARTERLY REPORT UNDER SECTION 13 or 15 (d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended October 31, 1999

[ ] TRANSITION REPORT UNDER SECTION 13 or 15 (d) OF THE

EXCHANGE ACT

For the transition period from _____ to _____

Commission File No. 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 incorporation 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 requirements 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, February 29, 2000, was 39,943,073 shares of Common Stock, $0.01 par value.

THE ROVAC CORPORATION
Item 1 - Financial Information
Condensed Balance Sheets




			October 31, 1999	July 31, 1999
			(Unaudited)	*

	Assets

Current Assets
Accounts receivable			2,070	700
Accounts receivable - other			49,880	61,174
Inventory			2,476	2,003

	Total current assets		54,426	63,877

Property and equipment
Machinery and equipment			72,112	72,112
Furniture and fixtures			32,336	30,283
Leasehold improvements			28,121	28,121

			132,569	130,516

Less accumulated depreciation			124,184	123,384

	Net property and equipment		8,385	7,132

Patents and patent applications, net of
Accumulated amortization of $16,259
($15,334 July 31, 1999)			68,475	68,935


	Total assets		131,286	139,944


See accompanying notes to condensed financial statements.
THE ROVAC CORPORATION
Item 1 - Financial Information
Condensed Balance Sheets




			October 31, 1999	July 31, 1999
			(Unaudited)	*

Liabilities and Stockholders' Deficiency

Current liabilities
Cash overdraft			$ 1,668	$ 1,587
Notes payable - officer			666,614	665,515
Notes payable - other			3,250	3,250
Accounts payable:
	Trade		112,411	113,345
	Parent company		784,661	780,620
Accrued expenses			979,404	953,871

	Total current liabilities		2,548,008	2,518,188

Stockholders' deficiency
8% nonvoting preferred stock, $100 par			1,200,000	1,200,000
value. Authorized 25,000 shares,
12,000 shares issued.
Common stock, $.01 par value.			399,431	399,431
Authorized 40,000,000 shares, issued and
outstanding 39,943,073 shares
Common stock issuable, $.01 par value,			400	400
40,000 shares
Additional paid-in capital			8,269,432	8,269,432
Accumulated deficit			(12,285,985)	(12,247,507)

	Total stockholders' deficit		(2,416,722)	(2,378,244)

	Total liabilities and stockholders' deficit		131,286	139,944


See accompanying notes to condensed financial statements.
THE ROVAC CORPORATION

Statement of Operations
(Unaudited)

			Three Months	Three Months
			Ended Oct 31	Ended Oct 31
			1999	1998
Revenues:
Contract Income			9,000	9,000
Product			7,428	2,439

	Total revenues		16,428	11,439

Operating expenses:
Cost of sales			5,541	3,062
General and administrative			25,233	32,594
Research and development			2,907	3,881
Depreciation and amortization			1,725	1,312

	Total operating expenses		35,406	40,849

	Operating loss		(18,978)	(29,410)

Other income (expense)
Interest expense-net			(19,500)	(19,629)

			(19,500)	(19,629)

Net Loss			(38,478)	(49,039)

Net loss per share of
common stock			(0.00)	(0.00)

Weighted average number of
common shares outstanding
and issuable			39,983,073	39,983,073


		THE ROVAC CORPORATION

		Statement of Cash Flows
		Unaudited

			Three Months	Three Months
			October 31	October 31
			1999	1998
Cash flows from operating activities:
Net loss			(38,478)	(49,039)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization			1,725	1,013
(Increase) decrease in assets:
Accounts and loan receivable			9,924	(3,623)
Inventory			(473)	-
Increase (decrease) in liabilities:
Accounts payable			(934)	4,387
Accrued expenses			25,533	25,580

	Total adjustments		35,775	27,356

	Net cash provided by (used in)
	operating activities:		(2,703)	(21,683)

Cash flows from investing activities:
Costs of patents and patent applications			(465)	(100)
Acquisition of equipment			(2,053)	-
	Net cash used in investing activities		(2,518)	(100)

Cash flows from financing activities:
Proceeds from notes payable - officers			1,099	(127)
Advances from parent			4,041	22,706

	Net cash provided by financing activities		5,140	22,579

Net change in cash			(81)	796

Cash (cash overdraft), beginning of period			(1,587)	(4,830)

Cash (cash overdraft), end of period			(1,668)	(4,034)



See accompanying notes to condensed financial statements.

THE ROVAC CORPORATION

Notes to Condensed Financial Statements

(Unaudited)

(1) Basis of Presentation

The unaudited financial statements for the three months ended October 31, 1999 and 1998 are unaudited but reflect all adjustments (consisting solely of normal recurring adjustments) which the Company considers necessary for a fair statement of results for the interim periods.

The results of operations for three months ended October 31, 1999 and 1998 are not necessarily indicative of the results for the entire year.

These financial statements supplement and should be read in conjunction with the Company's audited financial statements for the year ended July 31, 1999 as contained in the Company's Form 10KSB, as filed with the United States Securities and Exchange Commission.

(2) Income (Loss) Per Share of Common Stock

Income (loss) per share of common stock as computed is based on the Weighted average of the number of shares outstanding and issuable during the periods.

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

During the quarter, the Company continued to earn revenues in accordance with its current NIBCO contract. The Company also entered into a dialog with NIBCO to discuss the possibility of additional thermoplastic licensed markets. There can be no assurance that these discussions will produce favorable results for the Company.

During the quarter, the Company and its European licensee agreed to suspend its current European agreement. The Company had been involved in testing with its European licensee's Sanitary Division. A sale of the European company, changing management and revolving testing requirements led to a mutual decision to suspend. The Company is evaluating a new offer to restart testing. There can be no assurance that the company will commence a new testing agreement with this European company.

The Company continued with discussions and negotiations for financing and capital sources in order to meet its working capital requirements and manufacturing costs to implement proposed projects. Management and/or affiliate continues to fund the capital requirements of the Company, as they become necessary.

(b) Results of Operations for the quarter ended October 31, 1999

The total operating expenses are $35,406 for the quarter ending October 31, 1999 as compared to $40,849 for the corresponding quarter in 1998. The decrease is mainly attributable to the Company's effort to contain costs during the period.

PART II - OTHER INFORAMTION

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 of Form 8-K.

None.

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

THE ROVAC CORPORATION

(Registrant)

Date: March 13, 2000

Raymond E. Shea, Jr.

Vice President and Treasurer