Rovac (ROVCE) 10QSB 2001 Q1 Quarterly report (small business)

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, 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.Yes XNO

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, October 31, 2000, was 39,958,073 shares of Common Stock, $0.01 par value.

THE ROVAC CORPORATION
Item 1 - Financial Information
Condensed Balance Sheets
		October 31, 2000	July 31, 2000
		(Unaudited)	*
	Assets
Current Assets
Accounts receivable		62,575	700
Loan receivable - officer		14,569	23,692
Inventory		8,427	8,427
	Total current assets	85,571	32,819
Property and equipment
Machinery and equipment		72,112	72,112
Furniture and fixtures		32,335	32,335
Leasehold improvements		28,121	28,121
		132,568	132,568
Less accumulated depreciation		126,959	126,214
	Net property and equipment	5,609	6,354
Patents and patent applications, net of
Accumulated amortization of $19,862
($18,956 July 31, 2000)		71,382	67,303
	Total assets	162,562	106,476
See accompanying notes to condensed financial statements.

THE ROVAC CORPORATION
Item 1 - Financial Information
Condensed Balance Sheets
		October 31, 2000	July 31, 2000
		(Unaudited)	*
Liabilities and Stockholders' Deficiency
Current liabilities
Cash overdraft		$ 1,981	$ 1,766
Notes payable - officer		666,615	666,615
Notes payable - other		1,950	3,250
Accounts payable:
	Trade	106,342	105,850
	Parent company	835,224	813,500
Accrued expenses		1,067,833	1,036,842
Advanced revenues		70,688	35,344
	Total current liabilities	2,750,633	2,663,167
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.		399,581	399,581
Authorized 40,000,000 shares, issued and
outstanding 39,958,073 shares
Common stock issuable, $.01 par value,		250	250
25,000 shares
Additional paid-in capital		8,269,432	8,269,432
Accumulated deficit		(12,457,334)	(12,425,954)
	Total stockholders' deficit	(2,588,071)	(2,556,691)
	Total liabilities and stockholders' deficit	162,562	106,476
See accompanying notes to condensed financial statements.

THE ROVAC CORPORATION
Statement of Operations
(Unaudited)
		Three Months	Three Months
		Ended Oct. 31	Ended Oct. 31
		2000	1999
Revenues:
Contract Income		26,531	9,000
Product		182	7,428
	Total revenues	26,713	16,428
Operating expenses:
Cost of sales		3,811	5,541
General and administrative		28,077	25,233
Research and development		4,436	2,907
Depreciation and amortization		1,651	1,725
	Total operating expenses	37,975	35,406
	Operating loss	(11,262)	(18,978)
Other income (expense)
Interest expense		(20,118)	(19,500)
		(20,118)	(19,500)
Net Loss		(31,380)	(38,478)
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
			2000	1999
Cash flows from operating activities:
Net loss			(31,380)	(38,478)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization			1,651	1,725
(Increase) decrease in assets:
Accounts and loan receivable			(52,752)	9,924
Inventory			-	(473)
Increase (decrease) in liabilities:
Accounts payable			492	(934)
Accrued expenses			30,991	25,533
Advanced revenues			35,344	-
	Total adjustments		15,726	35,775
	Net cash provided by (used in)
	operating activities:		(15,654)	(2,703)
Cash flows from investing activities:
Costs of patents and patent applications			(4,985)	(465)
Acquisition of equipment			-	(2,053)
	Net cash used in investing activities		(4,985)	(2,518)
Cash flows from financing activities:
Payment on notes payable - other			(1,300)	1,099
Advances from parent			21,724	4,041
	Net cash provided by financing activities		20,424	5,140
Net change in cash			(215)	(81)
Cash (cash overdraft), beginning of period			(1,766)	(1,587)
Cash (cash overdraft), end of period			(1,981)	(1,668)
See accompanying notes to condensed financial statements.

Notes to Condensed Financial Statements

(Unaudited)

(1)Basis of Presentation

The unaudited financial statements for the three months ended October 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 three months ended October 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, 2000 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 current NIBCO Agreement requires minimal payments, which increase during the contract period, which expires on April 30, 2004. The Company's production plans are intended to meet NIBCO's requirements, which are expected to increase during the first six months of calendar year 2001.

Additionally, the Company is currently evaluating how to proceed with its CinchLockâ product introduction into the metals markets. One option under consideration would be to secure additional licenses for metal market applications. The second option under consideration would be for the Company to internally develop, produce, market and distribute a product line of CinchLockâ metal market repair couplings.

The Company intends to receive additional income pursuant to its NIBCO Agreement and also intends to receive funding from its parent company in order to meet its cash requirements for the upcoming fiscal year. However, there can be no assurance that such sources of funding will continue.

(b) Results of Operations for the quarter ended October 31, 2000

The revenues for the quarter ended October 31, 2000 were $26,713 as compared to $16,428 for the quarter ended October 31, 1999. This increase is mainly attributable to the NIBCO Agreement which commenced May 1, 2000.

The total operating expenses are $37,975 for the quarter ending October 31, 2000 as compared to $35,406 for the corresponding quarter in 1999. The expenses for both quarters are comparable.

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: _________________________________________

Raymond E. Shea, Jr.

Vice President and Treasurer