INNOVUS CORP
10-Q, 1997-08-19
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FORM 10-Q

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED:  June 30, 1997

OR

[  ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM      N/A      to      N/A 

COMMISSION FILE NUMBER:  0-26790

INNOVUS CORPORATION
(Exact name of registrant as specified in its charter)

DELAWARE                                     87-0461856
(State or other jurisdiction              (I.R.S. Employer         
of incorporation or organization)         Identification No.)

2060 East 2100 South
SALT LAKE CITY, UTAH 84109
(Address of principal executive offices)

(801) 463-8200
(Issuer's telephone number)

Check whether the registrant (1) has filed all reports required to be filed 
by Sections 13 or 15(d) of the Exchange Act 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        

The number of common shares outstanding at June 30 1997:  6,031,291 



                      Innovus Corporation and Subsidiary
                    CONDENSED CONSOLIDATED BALANCE SHEETS
                                (Unaudited)

                                  ASSETS

                                                    June 30,     December 31,
                                                        1997             1996
                                                    --------          -------
CURRENT ASSETS	
Cash and cash equivalents                     $       24,299  $       886,122
Accounts receivable, net                              26,499          116,761
Inventories                                          116,791           39,003
Prepaid expenses                                      36,115          119,849
                                                   ---------        ---------
Total current assets                                 203,704        1,161,735
                                                   ---------        ---------


PROPERTY AND EQUIPMENT, net                        1,262,789        1,341,175
                                                   ---------        ---------

OTHER ASSETS
Software development costs, net                    1,145,562          809,824
Other                                                 42,278           30,442
                                                   ---------        ---------
                                                   1,187,840          840,266
                                                   ---------        ---------

TOTAL ASSETS                               $       2,654,333        3,343,176
                                                   =========        =========

See the accompanying notes to condensed consolidated financial statements.




                     Innovus Corporation and Subsidiary
                   CONDENSED CONSOLIDATED BALANCE SHEETS
                                (Unaudited)

                    LIABILITIES AND STOCKHOLDERS' EQUITY

                                                    June 30,     December 31,
                                                        1997             1996
                                                   ---------        ---------
CURRENT LIABILITIES
Accounts payable                             $       650,811  $       716,068
Accrued compensation                                 107,604          216,805
Accrued liabilities                                    5,688          126,022
Current maturities of long-term debt                 188,763           28,477
Current maturities of capital lease obligations       39,200           37,220
                                                   ---------        ---------
Total current liabilities                            992,066        1,124,592
                                                   ---------        ---------
LONG-TERM DEBT,
less current maturities                              478,363          671,564

CAPITAL LEASE OBLIGATIONS,
less current maturities                               36,976           56,991
                                                   ---------        ---------
Total liabilities                                  1,507,405        1,853,147
                                                   ---------        ---------

COMMITMENTS - NOTE D


STOCKHOLDERS' EQUITY
Preferred stock - $0.001 par value; 1,000,000
shares authorized; 80,700 and 87,100 
shares issued and outstanding, respectively               81               87
Common stock - $0.001 par value; 15,000,000
shares authorized; 6,031,291 and 5,052,811 
shares issued and outstanding, respectively            6,031            5,053
Additional paid-in capital                        17,118,536       14,996,682
Deferred compensation                                 (8,301)         (14,486)
Accumulated deficit                              (15,969,419)     (13,497,307)
                                                  ----------       ----------
Total stockholders' equity                         1,146,928        1,490,029
                                                  ----------       ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY    $    2,654,333    $   3,343,176
                                                  ==========        =========

See the accompanying notes to condensed consolidated financial statements.




                        Innovus Corporation and Subsidiary
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                 (Unaudited)



                               For the Three Months        For the Six Months
                                     Ended June 30,            Ended June 30,
                               --------------------      --------------------
                                  1997         1996         1997         1996
                               -------      -------      -------      -------
Net sales                $       3,385   $  156,638   $  276,859   $  213,100

Costs and operating expenses		
Costs of products and
     services sold               8,487       68,460      102,065       87,483
Amortization of software 
    development costs          242,859      198,850      499,979      275,548
Product development                  -      277,690            -      642,529
Selling and marketing          410,939      898,415      980,268    1,802,927
General and administrative     370,021      261,403      596,801      468,181
                             ---------    ---------    ---------    ---------
                             1,032,306    1,704,818    2,179,113    3,276,668
                             ---------    ---------    ---------    ---------
        Operating loss      (1,028,921)  (1,548,180)  (1,902,254)  (3,063,568)
                             ---------    ---------    ---------    ---------

Other income (expense)
  Interest income                4,726        3,632       13,046       20,915
  Other income                   9,963            -       16,605            -
  Iterest expense for warrants
    issued with debt          (149,945)           -     (499,552)           -
  Interest expense, other      (24,335)     (20,911)     (59,191)     (43,658)
                             ---------    ---------    ---------    ---------
                              (159,591)     (17,279)    (529,092)     (22,743)
                             ---------    ---------    ---------    ---------

Net Loss                    (1,188,512)  (1,565,459)  (2,431,346)  (3,086,311)

Dividends on preferred
  stock                        (84,832)           -     (200,074)           -
                             ---------    ---------    ---------    ---------

Loss Applicable to 
  Common Shareholders      $(1,273,344)  $        -  $(2,631,420) $         -
                             =========     ========    =========    =========
Loss per common share      $     (0.21)  $    (0.33) $     (0.46) $     (0.65)
                             =========     ========    =========    =========

Weighted number of shares of 
  common stock used in per 
  share calculation          6,007,021    4,790,349    5,744,255    4,740,693
                             =========     ========    =========    =========

See the accompanying notes to condensed consolidated financial statements.




                       Innovus Corporation and Subsidiary
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (Unaudited)


                                                      For the Six Months
                                                         Ended June 30,      
                                                   --------------------------
                                                        1997             1996
                                                   ---------        ---------
Increase (decrease) in cash and cash equivalents

Cash flows from operating activities
  Net loss                                     $  (2,431,346)   $  (3,086,311)
  Adjustments to reconcile net loss to
     net cash used in operating activities:
  Depreciation and amortization                      595,871          358,850
  Expenses for issued warrants                       278,552                -
  Changes in assets and liabilities:
    Accounts receivable                               90,262          (23,874)
    Inventories                                      (77,788)         (28,919)
    Prepaid expenses                                  83,734                -
    Accounts payable and accrued expenses           (328,533)         358,924
    Other                                             24,505          (19,169)
                                                   ---------        ---------

  Net cash used in operating activities           (1,764,743)      (2,440,499)
                                                   ---------        ---------

Cash flows from investing activities
  Acquisition of property and equipment              (13,921)         (54,695)
  Increase in software development costs            (835,717)        (380,233)
                                                   ---------        ---------

  Net cash used in investing activities             (849,638)        (434,928)
                                                   ---------        ---------

Cash flows from financing activities
  Proceeds from borrowings                           168,000          575,300
  Payments to reduce long-term debt
    and capital lease obligations                   (497,502)         (40,705)
  Net proceeds from issuance of preferred
    and common stock                               2,082,060            4,089
                                                   ---------        ---------

  Net cash provided by financing activities        1,752,558          538,684
                                                   ---------        ---------

Net decrease in cash and cash equivalents           (861,823)      (2,336,743)

Cash and cash equivalents at beginning of year       886,122        2,362,556
                                                   ---------        ---------

Cash and cash equivalents at end of period      $     24,299    $      25,813
                                                   =========        =========


Supplemental Cash Flow Information:
  Interest paid                                 $     63,338    $      36,386
                                                   =========        =========


See the accompanying notes to condensed consolidated financial statements. 




                    Innovus Corporation and Subsidiary
           Notes to Condensed Consolidated Financial Statements
                            (Unaudited)


NOTE A - CONDENSED INTERIM FINANCIAL STATEMENTS 

In the opinion of management, the accompanying unaudited financial statements
contain all necessary adjustments, consisting of normal recurring adjustments
except as disclosed herein for a fair presentation of financial position and
the results of operations. The results of operations of the interim periods
presented are not necessarily indicative of the results to be expected for the
remainder of 1997.

The accompanying unaudited financial statements have been condensed pursuant
to the rules and regulations of the Securities and Exchange Commission.
Certain information and disclosures normally included in financial
statements have been condensed or omitted. These financial statements
should be read in connection with the Company's annual financial
statements included in the Company's annual report on Form 10-K, as
of December 31, 1996.


NOTE B - PROPERTY AND EQUIPMENT

Property and equipment and estimated useful lives consist of the following:

                                                    June 30,     December 31,
                                        Years           1997             1996
                                        -----      ---------        ---------
Building                                  40     $   422,231      $   422,231
Computer and office equipment            5-7         907,837          907,499
Furniture and fixtures                   5-7         115,859          115,859
                                                   ---------        ---------
                                                   1,445,927        1,445,589
Less accumulated depreciation and
      amortization                                  (557,569)        (478,845)
                                                   ---------        ---------
                                                     888,358          966,744
Land                                                 374,431          374,431
                                                   ---------        ---------
                                                 $ 1,262,789      $ 1,341,175
                                                   =========        =========


NOTE C - SOFTWARE DEVELOPMENT COSTS

In conjunction with the preparation of these financial statements, the
Company has amended the Form 10-Q for the first quarter ended March 31, 1997
resulting from the capitalization of previously expensed product development
costs to more accurately reflect the activities of the product development
group of the Company.  The changes to the condensed interim financial
statements at March 31, 1997 are summarized as follows:


Software Development Costs:
                                                     Amended         Original
                                                   ---------        ---------

Balance at December 31, 1996                     $   809,824      $   809,824
  Additions during the first quarter                 430,871          189,854
                                                   ---------        ---------
                                                   1,240,695          999,678
  Less amortization                                 (257,120)        (257,120)

Balance at March 31, 1997                            983,575      $   742,558
  Additions during the second quarter                404,846        =========
                                                   ---------        

                                                   1,388,421
  Less amortization                                 (242,859)
                                                   --------- 

Balance at June 30, 1997                         $ 1,145,562 
                                                   =========


Revised amounts for the items that changed on the Form 10-Q for the first 
quarter ended March 31, 1997,  as a result of the correction are as follows:
				
                                                     Amended         Original
                                                   ---------        ---------

Assets
    Software development costs, net             $    983,575     $    742,558
    Total other assets                          $  1,002,446     $    761,429
    Total assets                                $  3,809,152     $  3,568,135

Stockholders' Equity
    Accumulated deficit                         $(14,771,246)    $(15,012,263)
    Total stockholders' equity                  $  2,111,836     $  1,870,819

Total liabilities and stockholders' equity      $  3,809,152     $  3,568,135

Statement of Operations
    Product development expense                 $          -     $    241,017
    Total costs and operating expenses          $  1,146,807     $  1,387,824
    Operating loss                              $   (873,333)    $ (1,114,350)
    Net loss                                    $ (1,242,834)    $ (1,483,851)
    Loss applicable to 
      common shareholders                       $ (1,358,076)    $ (1,599,093)
    Loss per common share                       $      (0.25)    $      (0.29)

Statement of Cash Flows
    Net loss                                    $ (1,242,834)    $ (1,483,851)
    Net cash used in operating activities       $ (1,163,788)    $ (1,404,805)
    Increase in software development costs      $   (430,871)    $   (189,854)
    Net cash used in investing activities       $   (441,849)    $   (200,832)


NOTE D - SHORT-TERM OBLIGATIONS

In June 1997, the Company entered into bridge financing agreements, which
authorized the Company to borrow up to $500,000, from certain unrelated and
related parties and stockholders. The lenders shall receive, for each $1.00
loaned to the Company a warrant to purchase one share of common stock of
the Company; provided that half of the warrants will not vest if the notes
are prepaid within 45 days.  The warrants will be exercisable at $3.00 per
share.  The warrants are exercisable over a three year exercise period.

The agreements bear interest at 10% in addition to the amortization of the
warrants' fair value resulting in an effective interest rate of 132% at
June 30, 1997.  The agreements are subordinate to the security interest of
the bank as discussed in the Company's financial statements for the year
ended December 31, 1996, in substantially all of the assets of the Company.
The notes are due September 1, 1997.  The notes require prepayment if the
Company receives at least $880,000 of additional equity investment.

The financing was accomplished by issuing detachable warrants for the
purchase of 170,000 shares of common stock with an exercise price of $3.00
per share.  The estimated fair value of the warrants on the date of grant
approximated $221,000.  This amount is being amortized as interest expense
over the life of the agreements.  The unamortized portion at June 30, 1997
was $187,591 and is included as an offset to the related debt in the
June 30, 1997 balance sheet.  At June 30, 1997 the Company had drawn
$170,000, under these financing agreements of which $25,000 was from an
unrelated lender and $145,000 was from an officer and director of the
Company.

In July 1997, the Company borrowed an additional $235,000 under the bridge
financing agreements from certain unrelated and related parties and
stockholders.  The estimated fair value of the warrants on the dates of
grant approximated $305,500.  This amount is being amortized as interest
expense over the life of the agreements.


NOTE E - CONVERSION OF PREFERRED STOCK

During the three months ended June 30, 1997, preferred stockholders converted
5,700 shares of Series C and 1,500 shares of Series D preferred stock into
149,039 shares of common stock in several transactions at an average price
of $2.42 per share. Also, $31,105 in dividends associated with the Series C
and Series D preferred stock were converted into 3,867 shares of common stock.


NOTE F - STOCK WARRANTS

During June 1997, the Company authorized and granted 170,000 warrants for
the right to acquire 170,000 shares of common stock which were issued in
connection with the issuance of $170,000 of notes to a related party and
another lender.  The warrants are exercisable at $3.00 per share which was
equal to or greater than the market value of the common stock on the date
the warrants were issued.  The warrants are exercisable for three years;
however, warrants for 85,000 shares are exercisable only if the notes are
not repaid within 45 days.

During July 1997, the Company authorized and granted another 235,000
warrants for the right to acquire 235,000 shares of common stock which
were issued in connection with the issuance of $235,000 of notes  as
discussed in Note D. The warrants are exercisable at $3.00 per share which
was equal to or greater than the market value of the common stock on the
date the warrants were issued.  The warrants are exercisable for three
years; however, warrants for 117,500 shares are exercisable only if the
notes are not repaid within 45 days.


NOTE E - EARNINGS PER SHARE

In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standard (SFAS) No. 128, "Earnings per Share".
The statement is effective for financial statements for periods ending
after December 15, 1997, and changes the method in which earnings per
share will be determined.  Adoption of this statement by the Company will
not have a material impact on earnings per share.




ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         CONDITION AND RESULTS OF OPERATIONS


General

The following discussion should be read in conjunction with the financial
statements and notes thereto found elsewhere herein.  The discussion assumes
that the reader is familiar with or has access to the Company's financial
statements for the year ended December 31, 1996 and the notes thereto found
in the Company's Form 10-K.

The Company has been engaged in the sale of multimedia authoring and
presentation software, with related application templates and media
packages.  During the first quarter of the fiscal year, the Company
experienced significant sales of its recently re-priced and re-positioned
products through retail channels.  Sales in the second quarter drastically
declined, which the Company believes is primarily due to the Company's
inability to aggressively promote the products and a market shift from
authoring to internet-based software.  Following the end of the second
quarter, the Company reduced its personnel to bare minimums in order to
conserve the Company's remaining resources.  The Company is exploring
alternative plans, including the potential sale or licensing of its existing
products, development of a Year 2000 application, or additional partnering
arrangements with database software vendors similar to the existing
arrangement discussed in "Results of Operations" below.  The success of any
of such plans will depend on the Company's ability to obtain additional
financing.  There is no assurance that the Company will be able to obtain
sufficient financing to remain in business or pursue an alternative business
plan.

Results of Operations

During the six months ended June 30, 1997, the Company had net sales of
$276,859, compared to $213,100 for the comparable period of the prior year.
For the three months ended June 30, 1997, net sales were $3,385 compared to
$156,638 for the comparable period of the prior year.  The Company believes
the decrease in second quarter sales is primarily the result of the
Company's inability to finance aggressive promotion of the products,
together with a market shift from authoring software generally to web-based
software.  The decline in sales was exacerbated by the elimination of the
Company's services business in the first quarter and an unexpectedly high
rate of product returns from retailers to the Company's distributors.

Sales of software for the second quarter were disappointing.  The factors
contributing to this include a high turnover of critical sales personnel at
the time the Company was attempting to expand retail distribution to a large
number of retail accounts, and the difficulty in attracting qualified
replacement sales personnel.  Due to constraints on the Company's financial
resources, the Company was unable to demonstrate to retailers that it had
the ability to conduct full scale retail merchandising and promotion.
Despite significant retail sell-through, this resulted in retailers
returning products to distributors to make room for more aggressively
marketed products due to the high premium on shelf space in retail software
outlets.

As described below, the Company is in the process of re-directing its
marketing efforts to de-emphasize retail store distribution in favor of
internet distribution, catalog sales and partnering arrangements.  Any such
redirection will be conditioned on the Company's ability to obtain
sufficient additional capital.  See "Liquidity and Capital Resources"
below.

The costs of products and services sold in the three and six months ended
June 30, 1997 were $8,487 and $102,065 respectively.  During the comparable
three and six months of the prior year, such costs were $68,460 and
$87,483, respectively.  Due to the low amount of net sales for the current
quarter, comparison of the costs of sales between periods may not be
meaningful.

Selling and marketing expenses were $410,939 for the three months ended
June 30, 1997, a decrease from $569,329 in the three months ended
March 31, 1997 and $898,415 in the three months ended June 30, 1996.  The
reduction in these expenses was made in conjunction with the Company's
overall restructuring and downsizing.  Even at the reduced level of these
expenses, the Company believes that it does not have sufficient resources
to continue marketing the software through traditional retail outlets.  The
alternatives which the Company is planning to implement include the following:

	(i)  Completion and follow through of a partnering arrangement with
        IBM which is scheduled to result in IBM's distribution of
        approximately 30,000,000 copies of an evaluation version of INNOVUS
        software to users of IBM's DB2 database software.  The Company will
        attempt to upgrade these evaluation copies to full licenses or sales
        of DB2 specific templates through direct mail follow-ons and
        customer support telephone up-selling.  The Company believes that
        similar partnering arrangements may be available with other major
        database software vendors.

	(ii)  Granting of limited source code licenses to software
        developers who can incorporate the interactive multimedia
        capabilities of INNOVUS into their existing products within
        specified vertical markets (e.g. existing computer based training
        applications which do not have the fully interactive capabilities
        of INNOVUS).

	(iii)  Distribution through internet based vendors and catalogs
        serving software developers.  By distributing current product
        versions at low cost to these serious users, the Company believes
        it can create demand for the next scheduled upgrade (INNOVUS
        Authoring 3.0).

Product development efforts during the six months ended June 30, 1997
included development towards planned version 3.0 of INNOVUS Authoring,
development of a Kanji (Japanese) version and the commencement of
localization efforts for German and other foreign language versions, as
well as work towards new products.  With the exception of version 3.0,
this development is being curtailed until substantial additional resources
are available.  For the three and six months ended June 30, 1997 the Company
did not incur any product development expense, although it did capitalize
$404,846 and $835,717 of software development costs, respectively.  The six
month figure includes a restatement of the quarter ended March 31, 1997 to
reclassify certain development costs upon re-examination of the work
performed.  In the three and six months ended June 30, 1997 $242,859 and
$499,979 of capitalized software development costs were amortized,
respectively, compared to $198,850 and $275,548 for the three and six months
of the prior year.  

General and administrative expenses were $370,021 and $596,801 for the
three and six months ended June 30, 1997, respectively, compared to $261,403
and $468,181 in 1996.  The primary increase in these expenses for the
current quarter was an increased bad debt reserve of approximately $95,000
for accounts receivable from prior periods.

The Company is deemed to have incurred $149,945 and $499,552 in interest
expense during the three and six months ended June 30, 1997 in connection
with warrants issued as part of bridge financing from affiliates and others.

The Company sustained a net loss of $1,188,512 and $2,431,346 for the three
and six months ended June 30, 1997 compared to net losses of $1,565,459 and
$3,086,311 for the three and six months ended June 30, 1996.

As explained in "Liquidity and Capital Resources" below, the Company does
not currently have the ability to sustain additional losses of this
magnitude.  The Company has substantially reduced its personnel and other
expenses and, as described above, is pursuing less cost-intensive means of
distributing its products.  There can be no assurance that these reductions
will be sufficient to sustain operations.

Forward looking information 

Statements regarding the Company's expectations as to future sales of
software, future capital resources and certain other statements presented
in this Form 10-Q constitute forward looking information within the meaning
of the Private Securities Litigation Reform Act of 1995.  Although the
Company believes that its expectations are based on reasonable assumptions
within the bounds of its knowledge of its business and operations, there
can be no assurance that actual results will not differ materially from
expectations.  In addition to matters affecting the Company's industry
generally, factors which could cause actual results to differ from
expectations include, but are not limited to (i) sales of the Company's
software may never rise to the level of profitability; (ii) due to the
rapidly changing and competitive nature of the industry, competitors may
introduce new products with significant competitive advantages over the
Company's products; and (iii) the Company may not have sufficient resources,
including any future financing it is able to obtain, to sustain marketing
and other operations.

Liquidity and Capital Resources

At June 30, 1997 the Company had $24,299 of cash and cash equivalents and a
deficit in working capital (current liabilities in excess of current assets)
of $788,362.  Since June 1997 the Company has been relying upon short term
borrowings from affiliates and others, as well as increases in accounts
payable owed to vendors and a second mortgage on the Company's building, to
provide the means to maintain minimal operations.  Management of the Company
has been actively seeking additional equity financing.  As of the date of
this report, the Company has not obtained needed equity financing nor has it
obtained firm commitments therefor.  Management believes that the market
overhang caused by variable conversion features of certain series of the
Company's preferred stock, coupled with the risks inherent in restructuring
the Company's business, have discouraged new investment.  Although
management believes that the Company is likely to obtain new financing, the
terms of the financing may be unfavorable to prior investors.

As a result of downsizing after the end of the quarter, the Company
estimates that it is currently using approximately $75,000 more cash each
month than is generated by operations.  If the Company is successful in
obtaining additional capital it will pursue the plan outlined above to
market through database partners, internet vendors and catalogs.  If these
plans can be implemented, the Company may position itself to again attempt
retail distribution in the future.

The Company has made plans to aggressively position its products as
multimedia utilities, including the development of utilities for Windows NT
and 95 that are based on JAVA for cross-platform functionality.  The Company
has also made plans to develop Year 2000 or other specific multi-media
applications.  All such plans are contingent on the Company obtaining at
least $2,000,000 in additional capital and implementing its downsized
marketing plan for the existing products.

If the Company cannot obtain additional capital, management will continue to
pursue other means to continue in business.  In such event, however, it is
possible that the Company may have little alternative but to sell or
liquidate its business operations or product line to satisfy its creditors.

During 1997, the Company borrowed $405,000 from affiliates and other
individuals pursuant to bridge financing.  The balance owing at June 30,
1997 was $170,000. These amounts are secured by a second priority interest
in substantially all assets of the Company.  The loans bear interest at 10%
per annum.  By their terms the loans are due September 1, 1997, but the
Company believes it is likely that the affiliates will extend the loans for
a short term if the Company is implementing a suitable business plan.

At June 30, 1997, the Company had long term liabilities of $478,363
consisting primarily of the mortgage on the Company's building.  After the
end of the quarter, the Company obtained a second mortgage on the building
in the amount of $150,000.  The Company is actively attempting to sell the
building, however the Company does not expect to receive any significant
sales proceeds after payment of the first and second mortgages.

The auditor's report on the Company's December 31, 1996 financial statements
notes that the Company's substantial operating losses raise substantial
doubt about the Company's ability to continue as a going concern.  There can
be no assurance that additional financing will be available to the Company
or that operating results will improve as management currently anticipates.



PART II
Item 2 - Changes in Securities

	(c) The following securities were issued by the Company during the
        quarter ended June 30, 1997 without registration under the Securities
        Act of 1933 (other than issuances pursuant to Regulation S):

	(i) During the quarter, the Company issued 149,039 shares of common
        stock upon conversion of 5,700 shares of Series C Preferred and
        1,500 shares of Series D Preferred pursuant to the terms of such
        series of preferred stock.  The offering was made to existing
        securities holders of the Company without the payment of commissions
        and is therefore exempt from registration pursuant to Section 3(a)(9)
        of the Act.

	(ii) During the quarter, the Company issued warrants to purchase up
        to 221,000 shares of common stock to an affiliate and an
        unaffiliated investor in connection with a bridge loan from such
        persons.  The warrants are exercisable at $3.00 per share.  Although
        the Company did not receive payment for the warrants other than the
        loan proceeds, the Company was deemed to have incurred additional
        interest expense of $149,945 as a result of the warrant issuance.
        The offering was made to a limited number of accredited persons
        without the payment of commissions and is therefore exempt from
        registration pursuant to Section 4(2) of the Act.


Item 6 - Exhibits and Reports on Form 8-K

Exhibit 27		Financial Data Schedule	


SIGNATURES

   In accordance with the requirements 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.

INNOVUS CORPORATION



 Date: August 19, 1997  By ________________________________
                            Terry Haas
                            Chief Executive Officer


                        By ________________________________
                            David Mock
                            Chief Financial Officer


<TABLE> <S> <C>

<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
unaudited financial statements as of June 30, 1997 and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
       
<S>                             <C>
<PERIOD-TYPE>                   3-MOS
<FISCAL-YEAR-END>                          DEC-31-1997
<PERIOD-END>                               JUN-30-1997
<CASH>                                          24,299
<SECURITIES>                                         0
<RECEIVABLES>                                  121,499
<ALLOWANCES>                                  (95,000)
<INVENTORY>                                    116,791
<CURRENT-ASSETS>                               203,704
<PP&E>                                       1,820,358
<DEPRECIATION>                               (557,569)
<TOTAL-ASSETS>                               2,654,333
<CURRENT-LIABILITIES>                          992,066
<BONDS>                                        515,339
                                0
                                  3,689,167
<COMMON>                                    13,435,481
<OTHER-SE>                                     (8,301)
<TOTAL-LIABILITY-AND-EQUITY>                 2,654,333
<SALES>                                          3,385
<TOTAL-REVENUES>                                 3,385
<CGS>                                            8,487
<TOTAL-COSTS>                                    8,487
<OTHER-EXPENSES>                             1,023,819
<LOSS-PROVISION>                                     0
<INTEREST-EXPENSE>                             159,591
<INCOME-PRETAX>                            (1,188,512)
<INCOME-TAX>                                         0
<INCOME-CONTINUING>                        (1,188,512)
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                               (1,188,512)
<EPS-PRIMARY>                                   (0.21)
<EPS-DILUTED>                                        0
        

</TABLE>


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