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 April 30, 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)
Delaware59-1461320
(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. YesNO 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, April 30, 2000, was 39,943,073 shares of Common Stock, $0.01 par value.
THE ROVAC CORPORATION | |||||||
Item 1 - Financial Information | |||||||
Condensed Balance Sheets | |||||||
April 30, 2000 | July 31, 1999 | ||||||
(Unaudited) | |||||||
Assets | |||||||
Current Assets | |||||||
Accounts receivable | $ 700 | $ 700 | |||||
Accounts receivable - other | 44,454 | 61,174 | |||||
Inventory | 3,720 | 2,003 | |||||
Total current assets | 48,874 | 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 | 125,784 | 123,384 | |||||
Net property and equipment | 6,785 | 7,132 | |||||
Patents and patent applications, net of | |||||||
accumulated amortization of $18,109 | |||||||
($15,334 at July 31, 1999) | 68,150 | 68,935 | |||||
Total assets | $ 123,809 | $ 139,944 | |||||
See accompanying notes to condensed financial statements. | |||||||
THE ROVAC CORPORATION | |||||||
Item 1 - Financial Information | |||||||
Condensed Balance Sheets | |||||||
April 30, 2000 | July 31, 1999 | ||||||
(Unaudited) | |||||||
Liabilities and Stockholders' Deficiency | |||||||
Current liabilities | |||||||
Bank overdraft | $ 1,547 | $ 1,587 | |||||
Notes payable - officer | 666,615 | 665,515 | |||||
Notes payable - other | 3,250 | 3,250 | |||||
Accounts payable: | |||||||
Trade | 130,931 | 113,345 | |||||
Parent company | 837,993 | 780,620 | |||||
Accrued expenses | 1,012,963 | 953,871 | |||||
Total current liabilities | 2,653,299 | 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 | (12,398,753) | (12,247,507) | |||||
Total stockholders' deficit | (2,529,490) | (2,378,244) | |||||
Total liabilities and stockholders' deficit | $ 123,809 | $ 139,944 | |||||
See accompanying notes to condensed financial statements. | |||||||
THE ROVAC CORPORATION | |||||||
Statement of Operations | |||||||
(Unaudited) | |||||||
Three | months | Nine | months | ||||
ended April 30 | ended April 30 | ||||||
2000 | 1999 | 2000 | 1999 | ||||
Revenues: | |||||||
Contract Income | $ 6,000 | $ 9,000 | $ 24,000 | $ 77,000 | |||
Product | 2,044 | 5,691 | 11,941 | 10,364 | |||
Total revenues | 8,044 | 14,691 | 35,941 | 87,364 | |||
Operating expenses: | |||||||
Cost of sales | 7,381 | - | 18,058 | - | |||
General and administrative | 47,184 | 36,456 | 99,766 | 111,514 | |||
Research and development | 1,926 | 5,690 | 6,122 | 12,987 | |||
Depreciation and amortization | 1,725 | 1,313 | 5,175 | 3,938 | |||
Total operating expenses | 58,216 | 43,458 | 129,121 | 128,439 | |||
Operating loss | (50,172) | (28,767) | (93,180) | (41,074) | |||
Other income (expense) | |||||||
Interest expense | (19,317) | (18,318) | (58,066) | (57,153) | |||
(19,317) | (18,318) | (58,066) | (57,153) | ||||
Net Loss | (69,489) | (47,085) | (151,246) | (98,227) | |||
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) | ||||||||
Nine Months | Nine Months | |||||||
Ended April 30 | Ended April 30 | |||||||
2000 | 1999 | |||||||
Cash flows from operating activities: | ||||||||
Net loss | (151,246) | (98,227) | ||||||
Adjustments to reconcile net loss to net | ||||||||
cash used in operating activities: | ||||||||
Depreciation and amortization | 5,175 | 3,938 | ||||||
(Increase) decrease in assets: | ||||||||
Accounts and loan receivable | 16,720 | - | ||||||
Inventory/other assets | (1,717) | (4,826) | ||||||
Increase (decrease) in liabilities: | ||||||||
Accounts payable | 17,586 | 7,717 | ||||||
Accrued expenses | 59,092 | 131,296 | ||||||
Total adjustments | 96,856 | 138,125 | ||||||
Net cash provided by (used in) | ||||||||
operating activities: | (54,390) | 39,898 | ||||||
Cash flows from investing activities: | ||||||||
Costs of patents and patent applications | (1,990) | (2,353) | ||||||
Costs of furniture and fixtures | (2,053) | - | ||||||
Net cash used in investing activities | (4,043) | (2,353) | ||||||
Cash flows from financing activities: | ||||||||
Proceeds from notes payable - officers | 1,100 | (25,491) | ||||||
Advance from parent | 57,373 | 40,219 | ||||||
Net cash provided by financing activities | 58,473 | 14,728 | ||||||
Net change in cash | 40 | 52,273 | ||||||
Cash (bank overdraft), beginning of period | (1,587) | (4,830) | ||||||
Cash, end of period | (1,547) | 47,442 | ||||||
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 nine months and three months ended April 30, 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 the nine months and three months ended April 30, 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 ended April 30, 2000, the Company completed its negotiations with NIBCO resulting in a sales agreement effective May 1, 2000. This will provide the Company with numerous additional thermoplastic markets for the CinchLockâ technology that the Company has developed.
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 three months ended April 30, 2000 and 1999
The total operating expenses are $58,216 for the quarter ending April 30, 2000 as compared to $43,458 for the corresponding quarter in 1999. The increase is mainly attributable to increased legal and public relations costs.
(c) Results of Operations for the nine months ended April 30, 2000 and 1999
The total operating expenses were $129,121 for the nine-month period ending April 30, 2000 as compared to $128,439 for the corresponding nine-month period in 1999. This is mainly attributable to the Company's effort to contain costs during the period.
Revenues for the nine months ended April 30, 2000 were 35,941 as compared to 87,364 for the nine months ended April 30, 1999. The decrease was mainly attributable to contract revenue with a customer that was not renewed.
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: June 15, 2000
Raymond E. Shea, Jr.
Vice President and Treasurer
