Rovac (ROVCE) 10QSB 2001 Q3 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 April 30, 2001

[ ] 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___X__NO_____

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, 2001, was 39,958,073 shares of Common Stock, $0.01 par value.

THE ROVAC CORPORATION
Item 1 - Financial Information
Condensed Balance Sheets
		April 30, 2001	July 31, 2000
		(Unaudited)
	Assets
Current Assets
Accounts receivable		$ 7,022	$ 700
Loan receivable - officer		-	23,692
Inventory		8,343	8,427
	Total current assets	15,365	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		128,449	126,214
	Net property and equipment	4,119	6,354
Patents and patent applications, net of
Accumulated amortization of $21,674.
($18,956 at July 31, 2000)		71,093	67,303
	Total assets	$ 90,577	$ 106,476
See accompanying notes to condensed financial statements.

THE ROVAC CORPORATION
Item 1 - Financial Information
Condensed Balance Sheets
		April 30, 2001	July 31, 2000
		(Unaudited)
Liabilities and Stockholders' Deficiency
Current liabilities
Cash overdraft		$ 3,144	$ 1,766
Notes payable - officers		668,915	666,615
Notes payable - other		-	3,250
Accounts payable:
	Trade	114,742	105,850
	Parent company	825,522	813,500
Accrued expenses		1,107,500	1,036,842
Advanced revenues		-	35,344
	Total current liabilities	2,719,823	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		(12,498,509)	(12,425,954)
	Total stockholders' deficit	(2,629,246)	(2,556,691)
	Total liabilities and stockholders' deficit	$ 90,577	$ 106,476
See accompanying notes to condensed financial statements.

THE ROVAC CORPORATION
Statement of Operations
(Unaudited)
		Three	months	Nine	months
		ended April 30		ended April 30
		2001	2000	2001	2000
Revenues:
Contract Income		47,025	$ 6,000	103,088	$ 24,000
Product		519	2,044	852	11,941
	Total revenues	47,544	8,044	103,940	35,941
Operating expenses:
Cost of sales		5,116	7,381	12,247	18,058
General and administrative		26,552	47,184	85,391	99,766
Research and development		4,766	1,926	14,110	6,122
Depreciation and amortization		1,651	1,725	4,953	5,175
	Total operating expenses	38,085	58,216	116,701	129,121
	Operating profit (loss)	9,459	(50,172)	(12,761)	(93,180)
Other income (expense)
Interest expense		(19,509)	(19,317)	(59,794)	(58,066)
Net Loss		(10,050)	(69,489)	(72,555)	(151,246)
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
		2001	2000
Cash flows from operating activities:
Net loss		(72,555)	(151,246)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization		4,953	5,175
(Increase) decrease in assets:
Accounts and loan receivable		17,370	16,720
Inventory/other assets		84	(1,717)
Increase (decrease) in liabilities:
Accounts payable		10,235	17,586
Accrued expenses		70,658	59,092
Advance revenues		(35,344)	-
	Total adjustments	67,956	96,856
	Net cash provided by (used in)
	operating activities:	(4,599)	(54,390)
Cash flows from investing activities:
Costs of patents and patent applications		(6,508)	(1,990)
Costs of furniture and fixtures		-	(2,053)
	Net cash used in investing activities	(6,508)	(4,043)
Cash flows from financing activities:
Proceeds from notes payable - officers		2,300	1,100
Proceeds (payments) from notes payable - other		(4,593)	-
Advance from parent		12,022	57,373
	Net cash provided by financing activities	9,729	58,473
Net change in cash		(1,378)	40
Cash (bank overdraft), beginning of period		(1,766)	(1,587)
Cash (bank overdraft), end of period		(3,144)	(1,547)
See accompanying notes to condensed financial statements.

Notes to Condensed Financial Statements

(Unaudited)

(1)Basis of Presentation

The unaudited financial statements for the nine months and three months ended April 30, 2001 and 2000 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, 2001 and 2000 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 earned revenues in accordance with the Company's current NIBCO Agreement. 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 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.

During the quarter, the Company finalized prototype drawings so that metal connectors can be manufactured for testing.

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 April 30, 2001

The operating profit was $9,459 for the quarter ending April 30, 2001 as compared to an operating loss of $50,172 for the corresponding quarter in 2000. The operating profit is mainly attributable to the NIBCO Contract Income, which began in May 2000.

(c) Results of Operations for the nine-month period ended April 30, 2001

The operating loss was $12,761 for the nine-month period ending April 30, 2001 as compared to $93,180 for the corresponding nine-month period in 2000. The decrease in the operating loss is mainly attributable to the NIBCO Contract Income, which began in May 2000.

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 13, 2001/Raymond E. Shea, Jr./

Raymond E. Shea, Jr.

Vice President and Treasurer