ROVAC CORP, 10QSB, 2000-03-02

ROVAC CORP
10QSB, 2000-03-02
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, 1998

[ ] 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. January 31, 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, 1998	July 31, 1998
		(Unaudited)	*

	Assets

Current Assets
Accounts receivable		1,915	695
Accounts receivable - other		39,606	37,188

	Total current assets	41,521	37,883

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

		130,516	130,516

Less accumulated depreciation		121,372	120,701

	Net property and equipment	9,144	9,815

Patents and patent applications, net of
accumulated amortization of $12,283
($11,641 July 31, 1998)		65,603	66,144



	Total assets	116,268	113,842


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




		October 31, 1998	July 31, 1998
		(Unaudited)	*

Liabilities and Stockholders' Deficiency

Current liabilities
Cash overdraft		$ 3,749	$ 4,830
Notes payable - officer		663,014	663,141
Notes payable - other		3,250	3,250
Accounts payable:
	Trade	105,574	101,187
	Parent company	742,620	719,914
Accrued expenses		867,187	841,607

	Total current liabilities	2,385,394	2,333,929

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		(12,138,389)	(12,089,350)

	Total stockholders' deficit	(2,269,126)	(2,220,087)

	Total liabilities and stockholders' deficit	116,268	113,842


See accompanying notes to condensed financial statements.
THE ROVAC CORPORATION

Statement of Operations
(Unaudited)

		Three Months	Three Months
		Ended Oct. 31	Ended Oct. 31
		1998	1997
Revenues:
Contract Income		9,000	9,000
Product		2,439	851

	Total revenues	11,439	9,851

Operating expenses:
Cost of sales		3,062	-
General and administrative		32,594	29,738
Research and development		3,881	3,847
Depreciation and amortization		1,312	1,324

	Total operating expenses	40,849	34,909

	Operating loss	(29,410)	(25,058)

Other income (expense)
Interest expense		(19,629)	(20,763)

Net Loss		(49,039)	(45,821)

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


See accompanying notes to condensed financial statements.

		THE ROVAC CORPORATION

		Statement of Cash Flows
			Unaudited

			Three Months	Three Months
			October 31	October 31
			1998	1997
Cash flows from operating activities:
Net loss			(49,039)	(45,821)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization			1,312	1,324
(Increase) decrease in assets:
Accounts and loan receivable			(3,638)	(19,597)
Inventory			-	-
Increase (decrease) in liabilities:
Accounts payable			4,387	(6,403)
Accrued expenses			25,580	23,315

	Total adjustments		27,641	(1,361)

	Net cash provided by (used in)
	operating activities:		(21,398)	(47,182)

Cash flows from investing activities:
Costs of patents and patent applications			(100)	(241)

	Net cash used in investing activities		(100)	(241)

Cash flows from financing activities:
Proceeds from notes payable - officers			(127)	2,299
Proceeds from notes payable - other			-	-
Advances from parent			22,706	44,496

	Net cash provided by financing activities		22,579	46,795

Net change in cash			1,081	(628)

Cash, beginning of period			(4,830)	(2,944)

Cash (cash overdraft), end of period			(3,749)	(3,572)



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, 1998 and 1997 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, 1998 and 1997 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, 1998 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 NIBCO contract. Separately, the company began negotiations with a pipe manufacturing company located in Germany. While there can be no assurance, management expects that negotiations will allow the company to enter into a European agreement.

The Company continued with discussions and negotiations for financing and capital sources in order to meet its working capital requirements and tooling cost 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, 1998

The total operating expenses are approximately $41,000 for the quarter ending October 31, 1998 as compared to $35,000 for the corresponding quarter in 1997. The increase is mainly attributable to manufacturing costs.

THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK

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 2, 1000

Raymond E. Shea, Jr.

Vice President and Treasurer