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 January 31, 2000

[ ] 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




		January 31, 2000	July 31, 1999
		(Unaudited)	*

	Assets

Current Assets
Accounts receivable		4,969	700
Accounts receivable - other		48,046	61,174
Inventory		3,720	2,003

	Total current assets	56,735	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		124,984	123,384

	Net property and equipment	7,585	7,132

Patents and patent applications, net of
accumulated amortization of $17,184
($11,334 at July 31, 1999)		67,705	68,935




	Total assets	132,025	139,944


See accompanying notes to financial statements.

THE ROVAC CORPORATION
Item 1 - Financial Information
Condensed Balance Sheets




		January 31, 2000	July 31, 1999
		(Unaudited)	*

Liabilities and Stockholders' Deficiency

Current liabilities
Cash overdraft		7,735	1,587
Notes payable - officer		666,614	665,515
Notes payable - other		3,250	3,250
Accounts payable:
	Trade	111,014	113,345
	Parent company	798,873	780,620
Accrued expenses		1,004,540	953,871

	Total current liabilities	2,592,026	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		(12,329,264)	(12,247,507)

	Total stockholders' deficit	(2,460,001)	(2,378,244)

	Total liabilities and stockholders' deficit	132,025	139,944


See accompanying notes to condensed financial statements.

THE ROVAC CORPORATION

Statement of Operations
(Unaudited)

		Three	Months	Six	Months
		ended January 31		ended January 31
		2000	1999	2000	1999

Revenues:
Contract Income		9,000	59,000	18,000	68,000
Product		2,469	2,234	9,897	4,673

	Total revenues	11,469	61,234	27,897	72,673

Operating expenses:
Cost of sales		5,136	2,804	10,677	5,866
General and administrative		27,349	36,598	52,582	69,192
Research and development		1,289	3,416	4,196	7,297
Depreciation and amortization		1,725	1,313	3,450	2,625

	Total operating expenses	35,499	44,131	70,905	84,980

	Operating income (loss)	(24,030)	17,103	(43,008)	(12,307)

Other income (expense)
Interest expense-net		(19,249)	(19,206)	(38,749)	(38,835)


Net Loss		(43,279)	(2,103)	(81,757)	(51,142)

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

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




See accompanying notes to condensed financial statements.

THE ROVAC CORPORATION

Statement of Cash Flows
(Unaudited)

		Six Months	Six Months
		Ended Jan 31	Ended Jan 31
		2000	1999
Cash flows from operating activities:
Net loss		(81,757)	(51,142)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization		3,450	2,625
(Increase) decrease in assets:
Accounts and loan receivable		8,859	(33,286)
Inventory		(1,717)	-
Increase (decrease) in liabilities:
Accounts payable		(2,331)	(18,446)
Accrued expenses		50,669	51,374

	Total adjustments	58,930	2,267

	Net cash provided by (used in)
	operating activities:	(22,827)	(48,875)

Cash flows from investing activities:
Costs of patents and patent applications		(620)	(304)
Acquisition of equipment		(2,053)	-

	Net cash used in investing activities	(2,673)	(304)

Cash flows from financing activities:
Proceeds (payments) from notes payable - officers		1,099	(127)
Advance from parent		18,253	31,952

	Net cash provided by financing activities	19,352	31,825

Net change in cash		(6,148)	(17,354)

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

Cash (cash overdraft), end of period		(7,735)	(22,184)


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 six months ended January 31, 2000 and 1999 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 six months ended January 31, 2000 and 1999 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 earned revenues in accordance with the Company's current NIBCO Agreement signed in the quarter ended October 31, 1997. The Company continued its dialog for additional thermoplastic markets with its current licensee, NIBCO. Management expects that these current negotiations will result in new markets to be licensed. There can be no assurance that current negotiations will be successful. The Company has received several inquiries for licenses in Europe. Management is currently evaluating the Company's best approach to address these inquiries.

The Company continued with discussions and negotiations for financing and capital sources in order to meet its working capital requirements and manufacturing costs. 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 January 31, 2000

The total operating expenses are $35,499 for the quarter ending January 31, 2000 as compared to approximately $44,131 for the corresponding quarter in 1999. The decrease is mainly attributable to the Company's effort to contain costs during the period.

The total operating expenses were $70,905 for the six-month period ending January 31, 2000 as compared to approximately $84,980 for the corresponding six-month period in 1999. The decrease is mainly attributable to the Company's effort to contain costs during the period.

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 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