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<FONT SIZE=2><P ALIGN="CENTER">U.S. SECURITIES AND EXCHANGE COMMISSION</P>
<P ALIGN="CENTER">Washington, DC 20549</P>
<P ALIGN="CENTER">FORM 10-KSB</P>
<P>(Mark One)</P>
<P>		[X]	ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE</P>
<P>			SECURITIES EXCHANGE ACT OF 1934 [Fee Required]</P>
<P>					For the fiscal year ended July 31, 1999</P>

<P>	[  ]	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE</P>
<P>		SECURITIES EXCHANGE ACT OF 1934 [No Fee Required]</P>
<P>					For the transition period from    to</P>
<P ALIGN="CENTER"></P>
<P ALIGN="CENTER">Commission file number:  0-8289</P>
<P ALIGN="CENTER"></P>
<P ALIGN="CENTER">The Rovac Corporation</P>
<P ALIGN="CENTER">(Name of small business issuer in its charter)</P>
<P ALIGN="CENTER">Delaware                                                 59-1461320</P>
<P ALIGN="CENTER">(State or other jurisdiction of                      (I.R.S. Employer</P>
<P ALIGN="CENTER">incorporation or organization)                     Identification No.)</P>
<P ALIGN="CENTER">1030 Stafford Street, Rochdale MA 01542</P>
<P ALIGN="CENTER">(Address of principal executive offices)</P>
<P ALIGN="CENTER">Issuer's telephone number:  (508) 892-1121</P>
<P ALIGN="CENTER"></P>
<P ALIGN="CENTER">Securities registered pursuant to Section 12(b) of the Act:  None</P>
<P ALIGN="CENTER">Securities registered pursuant to Section 12 (g) of the Act:</P>
<P ALIGN="CENTER">Common Stock, par value $0.01 per share</P>
<P ALIGN="CENTER">(Title of class)</P>

<P ALIGN="JUSTIFY"> </P>
<P>Check whether the issuer (1) filed all reports required to be for such shorter period that the Registrant was required to file reports, and (2) been subject to such filing requirement for the past 90 days.</P>
<P>Yes_____No__<U>X</U>__</P>

<P>Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B is not
contained in this form, and no disclosure will be contained, to the best of the registrant's knowledge, in
definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB.  [ X ]</P>

<P>State issuer's revenues for its most recent fiscal year:  $96,634</P>

<P>The aggregate market value of the voting stock held by non-affiliates computed by reference to the price at which the stock was sold within the past 60 days was $3,601,620 as of February 29, 2000.</P>
<P ALIGN="CENTER">(APPLICABLE ONLY TO CORPORATE REGISTRANTS)</P>
<P>The number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date, February 29, 2000, was 39,943,073 shares of Common Stock, $0.01 par value.</P>
<P ALIGN="CENTER">DOCUMENTS INCORPORATED BY REFERENCE</P>
<P>If the following documents are incorporated by reference, briefly describe them and identify the part of the
Form 10-KSB into which the document is incorporated:  (1) any annual report to security holders; (2) any
proxy of information statement; and (3) any prospectus filed pursuant to Rule 424 (b) or (c) of the
Securities Act of 1933 ("Securities Act").  NONE.</P>
<P ALIGN="CENTER"></P>
<P ALIGN="CENTER">PART I</P>
<P>Item 1.	Description of Business.</P>

<P>	(a)	General Development of Business</P>

<P>	The ROVAC Corporation ("the Company") is a Delaware corporation, which was organized in
1972 and has been involved in the research and development of a variety of mechanical devices.  During
the last fiscal year, the Company began manufacturing and selling key components of its pipe connecting
technology.  The Company's patented CinchLock<FONT FACE="Symbol">â</FONT>
pipe connectors consist of mechanical devices, which
join pipes and joints of assorted size and shapes without glue or solder to permit the flow of fluid under
different conditions and amounts of pressures.  The Company has only one business segment.</P>

<P>	(b)	Business of Issuer</P>

<P>	During the fiscal year ending July 31, 1999, the Company continued to manufacture and sell
product pursuant to its NIBCO Agreement.  During the fiscal year ending July 31, 1999, the Company
announced an Exclusive Sales agreement with a German firm for products sold in Europe in its entirety.
This multi-year agreement represents an important entrance into numerous European markets for ROVAC
technology.  A non-refundable fee for geographical exclusivity and minimum product purchases for key
components of the CinchLock<FONT FACE="Symbol">â</FONT> connecting device were elements of the agreement.  Upon completion of testing/acceptance,
the German firm will market and distribute products containing CinchLock<FONT FACE="Symbol">â</FONT>
components to their customers in piping systems for water supply and disposal, hot water radiant systems, natural and
manufactured gas, acid and bases, food and beverage, chemical mixtures, pharmaceuticals and cosmetics
and oils.  The Licensee's comprehensive testing program will analyze 6 or 7 types of plastic materials for
end market applications.  The company also received contract income pursuant to its European agreement.</P>

<P>	At the end of the fiscal year, The ROVAC Corporation had 2 employees who worked full time for
the Company.  The Company also utilizes part-time employees on an as needed basis for manufacturing.
The Company has numerous domestic and foreign patents issued as well as a number of other patent
applications pending for its CinchLock<FONT FACE="Symbol">â</FONT>
pipe connectors.  The Company has a number of patents both pending and granted which cover the Company's technology.</P>

<P>	Research and Development expenses for the years ended July 31, 1999 and July 31, 1998 were $21,726 and $12,012, respectively.  The increase of $9,714 was attributable to additional testing and development pursuant to its contracts.</P>

<P> </P>
<P>Item 2.	Description of Property.</P>

<P>	The Company's product development facilities and administrative offices are located in Rochdale,
Massachusetts and occupy approximately 6,520 square feet.  ROVAC rents the space, which it occupies from its controlling shareholder, Stafford Industries, Inc., ("Stafford").</P>

<P> </P>
<P>Item 3.	Legal Proceedings.</P>

<P>	There are no pending or threatened legal proceedings against the Registrant.</P>

<P> </P>
<P>Item 4.	Submission of Matters to a Vote of Security Holders</P>

<P>	None.</P>

<P> </P>
<P> </P>
<P> </P>
<P ALIGN="CENTER">PART II</P>

<P>Item 5.	Market for Common Equity and Related Stockholder Matters</P>

<P>Common Stock</P>

<P>	The Company has authorized 40,000,000 shares of Common Stock ($0.01 par value per share), of
which 39,943,073 shares of Common Stock were reported issued and outstanding as of July 31, 1999.  In
addition, there are 40,000 shares of Common Stock issuable as of July 31, 1999.  All of the issuable shares
will have restrictions against transfer pursuant to Regulation D and/or will be exempt from registration under the Securities Act of 1933, as amended.</P>

<P>Market for Common Stock</P>
<P>	</P>
<P>	The Company's Common Stock has been traded in the over-the-counter market since 1974, and is
presently listed in the "pink sheets" by approximately four (4) broker-dealers.  The following is the range
of low and high bid prices for a share of the Company's stock for quarters ended:</P>
<P>	</P></FONT>
<TABLE BORDER CELLSPACING=1 CELLPADDING=7 WIDTH=590>
<TR><TD WIDTH="25%" VALIGN="TOP">
<FONT SIZE=2><P>July 30, 1999</FONT></TD>
<TD WIDTH="25%" VALIGN="TOP">
<FONT SIZE=2><P>$0.15 - 0.18</FONT></TD>
<TD WIDTH="25%" VALIGN="TOP">
<FONT SIZE=2><P>July 31, 1998</FONT></TD>
<TD WIDTH="25%" VALIGN="TOP">
<FONT SIZE=2><P>$0.155 - 0.17</FONT></TD>
</TR>
<TR><TD WIDTH="25%" VALIGN="TOP">
<FONT SIZE=2><P>April 30, 1999</FONT></TD>
<TD WIDTH="25%" VALIGN="TOP">
<FONT SIZE=2><P>$0.18 - 0.19</FONT></TD>
<TD WIDTH="25%" VALIGN="TOP">
<FONT SIZE=2><P>April 30, 1998</FONT></TD>
<TD WIDTH="25%" VALIGN="TOP">
<FONT SIZE=2><P>$0.20 - 0.22</FONT></TD>
</TR>
<TR><TD WIDTH="25%" VALIGN="TOP">
<FONT SIZE=2><P>January 29, 1999</FONT></TD>
<TD WIDTH="25%" VALIGN="TOP">
<FONT SIZE=2><P>$0.15 - 0.1875</FONT></TD>
<TD WIDTH="25%" VALIGN="TOP">
<FONT SIZE=2><P>January 30, 1998</FONT></TD>
<TD WIDTH="25%" VALIGN="TOP">
<FONT SIZE=2><P>$0.155 - 0.18</FONT></TD>
</TR>
<TR><TD WIDTH="25%" VALIGN="TOP">
<FONT SIZE=2><P>October 30,  1998</FONT></TD>
<TD WIDTH="25%" VALIGN="TOP">
<FONT SIZE=2><P>$0.10 - 0.115</FONT></TD>
<TD WIDTH="25%" VALIGN="TOP">
<FONT SIZE=2><P>October 31, 1997</FONT></TD>
<TD WIDTH="25%" VALIGN="TOP">
<FONT SIZE=2><P>$0.19 - 0.20</FONT></TD>
</TR>
</TABLE>

<FONT SIZE=2>
<P>	During the fiscal year, the range of low and high bid price for the Company's Common Stock was
between $0.10 and $0.19 per share.  Prices represent quotations from the "pink sheets" without adjustment
for retail mark-ups, markdowns, or commissions and do not represent actual transactions.  The number of
stockholders of record as of July 31, 1999 was approximately 3,576.  The Company has paid no dividends
on its Common Stock for the last three fiscal years and does not expect to pay any dividend during the
coming fiscal year.</P>

<P>	As of July 31, 1999, Stafford held of record 22,792,500 shares of the Common Stock ($0.01 par
value per share) of the Company and 12,000 shares of Preferred Stock ($100 par value per share) of the
Company.</P>

<P>	There is no trading market contemplated for the preferred shares and the conversion value of the
preferred shares shall not exceed par value.  The company, by action of its Board of Directors, may call or
redeem the whole or any part of the Preferred Stock, at any time, or from time to time, at $100 per share
plus a sum equal to all accumulated and unpaid dividends thereon to the date fixed for redemption.  In the
event that the Board of Directors calls or redeems the whole or any part of the Preferred Stock, the Board
shall be required to take such action on or within ten (10) years from issue.</P>

<P> </P>
<P>Item 6.	Management's Discussion and Analysis or Plan of Operation</P>

<P>	(a)	Plan of Operation</P>

<P>	The Company's operations in the past several years have been focused on designing and
developing its CinchLock<FONT FACE="Symbol">â</FONT>
pipe connectors.  This activity has not generated significant revenues and the
Company has been dependent on cash advances from licensing income and loans from officers of the
Company to meet working capital and liquidity needs.  There can be no assurance that officers and/or
affiliate of the Company will continue to provide loans and capital to the Company.</P>

<P>	During the fiscal year, the Company received limited revenues through the sales of its
CinchLock<FONT FACE="Symbol">â</FONT>
pipe connecting technology and received increased income from its commercial licensing
agreements.  The Company has been and remains dependent on receiving loans from officers and/or
affiliate to continue in business.  However, there can be no assurance that such sources of funding will
continue.  At the close of and for the fiscal year ending on July 31, 1999, officers made net loans to the
Company in the amount of approximately $2,400. At the close and for the fiscal year ending on July 31,
1998, net advances from the affiliate increased by approximately $61,000.</P>

<P>	(b)	Management's Discussion and Analysis of Financial Condition</P>

<P>		(1)	Results of Operations for the year ended July 31, 1999</P>

<P>	The total operating expenses were $178,013 for the year ending July 31, 1999 as compared to
$146,587 for the fiscal year ending 1998.  The increase of $31,426 is mainly attributable to production,
manufacturing and research and development costs related to an increase in product demand.</P>
<P> </P>
<P>		(2)	Results of Operation for the year ended July 31, 1998</P>

<P>The total operating expenses were $146,587 for the year ending July 31, 1998 as compared to
$177,324 for the fiscal year ending 1997.  The decrease of $30,770 is mainly attributable to the fact that the
majority of pipe connecting testing and development has been completed.</P>
<P>	 </P>

<P> </P>
<P> </P>
<P> </P>
<P> </P>
<P> </P>
<P> </P>
<P> </P>
<P ALIGN="CENTER">THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY OMITTED.</P>

<P> </P>
<P> </P>
<P> </P>
<P> </P>
<P ALIGN="JUSTIFY"> </P>
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</B></FONT><FONT SIZE=2><P ALIGN="CENTER">THE ROVAC CORPORATION</P>

<P> </P>
<P ALIGN="CENTER">Table of Contents</P>

<P>Independent Auditors' Report							F-1        </P>

<P>Balance Sheets									F-2 - F-3   </P>
<P>Statements of Operations								F-4        </P>
<P>Statements of Stockholders' Deficit							F-5        </P>
<P>Statements of Cash Flows								F-6        </P>
<P>Notes to Financial Statements							F-7 - F-9</FONT>   </P>
<B><FONT SIZE=3><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </P>
<P ALIGN="JUSTIFY"> </P>
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</FONT><FONT SIZE=2><P ALIGN="CENTER">REPORT OF INDEPENDENT AUDITORS</P>
</B>
<P> </P>
<P> </P>
<P>The Board of Directors and Stockholders</P>
<P>The ROVAC Corporation</P>

<P> </P>
<P>We have audited the accompanying balance sheets of The ROVAC Corporation as of July 31, 1999 and
1998, and the related statements of operations, stockholders' deficit, and cash flows for the years then
ended.  These financial statements are the responsibility of the Company's management.  Our responsibility
is to express an opinion on these financial statements based on our audits.</P>

<P>We conducted our audits in accordance with generally accepted auditing standards.  Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements.  An audit also includes assessing the
accounting principles used and significant estimates made by management, as well as evaluating the overall
financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.</P>

<P>In our opinion, the financial statements referred to above present fairly, in all material respects, the
financial position of The ROVAC Corporation as of July 31, 1999 and 1998, and the results of its
operations and its cash flows for the years then ended, in conformity with generally accepted accounting
principles.</P>

<P>The accompanying financial statements have been prepared assuming that the Company will continue as a
going concern.  As discussed in Note 1 to the financial statements, the Company has suffered recurring
losses from operations and has a net capital deficiency.  These conditions raise substantial doubts about the
Company's ability to continue as a going concern.  Management's plan in regard to these matters is
described in Note 1.  The financial statements do not include any adjustments that might arise from the
outcome of this uncertainty.</P>

<P> </P>
<P> </P>
<P> </P>
<P> </P>
<P ALIGN="RIGHT">	MOTTLE McGRATH BRANEY & FLYNN, P.C.</P>

<P>Worcester, Massachusetts</P>
<P>February 28, 2000</P>
<B>
</B><P> </P>
<P> </P>
<P> </P>
<P> </P>
<P> </P>
<P>F-1</P></FONT>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=2 WIDTH=629>
<TR><TD WIDTH="33%" VALIGN="TOP" COLSPAN=3 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>THE ROVAC CORPORATION</FONT></TD>
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</TR>
<TR><TD WIDTH="22%" VALIGN="TOP" COLSPAN=2 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P> Balance Sheets</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
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</TR>
<TR><TD WIDTH="33%" VALIGN="TOP" COLSPAN=3 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>July 31, 1999 and 1998</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
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<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">1999 </FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">1998 </FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
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<U><FONT FACE="Arial" SIZE=2><P>Assets</U></FONT></TD>
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</TR>
<TR><TD WIDTH="22%" VALIGN="TOP" COLSPAN=2 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>Current Assets:</FONT></TD>
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</TR>
<TR><TD WIDTH="22%" VALIGN="TOP" COLSPAN=2 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>   Accounts receivable</FONT></TD>
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<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT"> $               700 </FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT"> $               695 </FONT></TD>
</TR>
<TR><TD WIDTH="33%" VALIGN="TOP" COLSPAN=3 HEIGHT=20>
<FONT FACE="Arial" SIZE=2><P>   Accounts receivable - officer</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=20>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">             61,174 </FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=20>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">             37,188 </FONT></TD>
</TR>
<TR><TD WIDTH="22%" VALIGN="TOP" COLSPAN=2 HEIGHT=20>
<FONT FACE="Arial" SIZE=2><P>   Inventory (note 3)</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=20>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">               2,003 </U></FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=20>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">                    -   </U></FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="22%" VALIGN="TOP" COLSPAN=2 HEIGHT=20>
<FONT FACE="Arial" SIZE=2><P>Total current assets</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=20>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">             63,877 </U></FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=20>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">             37,883 </U></FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=20><P></P></TD>
</TR>
<TR><TD WIDTH="33%" VALIGN="TOP" COLSPAN=3 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>Property and equipment:</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="33%" VALIGN="TOP" COLSPAN=3 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>   Machinery and equipment</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">             72,112 </FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">             72,112 </FONT></TD>
</TR>
<TR><TD WIDTH="33%" VALIGN="TOP" COLSPAN=3 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>   Furniture and fixtures</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">             30,283 </FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">             30,283 </FONT></TD>
</TR>
<TR><TD WIDTH="33%" VALIGN="TOP" COLSPAN=3 HEIGHT=20>
<FONT FACE="Arial" SIZE=2><P>   Leasehold improvements</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=20>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">             28,121 </U></FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=20>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">             28,121 </U></FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">            130,516 </FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">            130,516 </FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="33%" VALIGN="TOP" COLSPAN=3 HEIGHT=20>
<FONT FACE="Arial" SIZE=2><P>   Less accumulated depreciation</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=20>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">            123,384 </U></FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=20>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">            120,701 </U></FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="33%" VALIGN="TOP" COLSPAN=3 HEIGHT=20>
<FONT FACE="Arial" SIZE=2><P>Net property and equipment</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=20>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">               7,132 </U></FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=20>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">               9,815 </U></FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP" COLSPAN=4 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>Patents and patent applications, net of</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="54%" VALIGN="TOP" COLSPAN=5 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P> accumulated amortization of $15,334 in 1999</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="22%" VALIGN="TOP" COLSPAN=2 HEIGHT=20>
<FONT FACE="Arial" SIZE=2><P> and $11,641 in 1998</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=20>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">             68,935 </U></FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=20>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">             66,144 </U></FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="22%" VALIGN="TOP" COLSPAN=2 HEIGHT=20>
<FONT FACE="Arial" SIZE=2><P>Total assets</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=20>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">  $          139,944 </U></FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=20>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">  $          113,842 </U></FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="54%" VALIGN="TOP" COLSPAN=5 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>See accompanying notes to financial statements.</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
</TABLE>

<B><FONT SIZE=3><P ALIGN="JUSTIFY"></P></B></FONT>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=2 WIDTH=629>
<TR><TD WIDTH="33%" VALIGN="TOP" COLSPAN=3 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER"> </P>
<P ALIGN="CENTER"> </P>
<P ALIGN="CENTER"> </P>
<P ALIGN="CENTER"> </P>
<P ALIGN="CENTER"> </P>
<P ALIGN="CENTER"> </P>
<P>F-2</P>
<P>THE ROVAC CORPORATION</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=3 HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=3 HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="22%" VALIGN="TOP" COLSPAN=2 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>Balance Sheets</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=3 HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=3 HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="33%" VALIGN="TOP" COLSPAN=3 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>July 31, 1999 and 1998</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=3 HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=3 HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=3 HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP" COLSPAN=4 HEIGHT=17>
<U><FONT FACE="Arial" SIZE=2><P>Liabilities and Stockholders' Deficiency</U></FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=3 HEIGHT=17>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">1999</U></FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=2 HEIGHT=17>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">1998</U></FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=3 HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="22%" VALIGN="TOP" COLSPAN=2 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>Current liabilities</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=3 HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="22%" VALIGN="TOP" COLSPAN=2 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>   Cash overdraft</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=3 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT"> $            1,587 </FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=2 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT"> $            4,830 </FONT></TD>
</TR>
<TR><TD WIDTH="33%" VALIGN="TOP" COLSPAN=3 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>   Notes payable - officer (note 4)</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=3 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">            665,515 </FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=2 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">            663,141 </FONT></TD>
</TR>
<TR><TD WIDTH="33%" VALIGN="TOP" COLSPAN=3 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>   Notes payable - other</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=3 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">               3,250 </FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=2 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">               3,250 </FONT></TD>
</TR>
<TR><TD WIDTH="22%" VALIGN="TOP" COLSPAN=2 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>   Accounts payable:</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=3 HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>Trade</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=3 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">            113,345 </FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=2 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">            101,187 </FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="22%" VALIGN="TOP" COLSPAN=2 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>Parent company</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=3 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">            780,620 </FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=2 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">            719,914 </FONT></TD>
</TR>
<TR><TD WIDTH="33%" VALIGN="TOP" COLSPAN=3 HEIGHT=20>
<FONT FACE="Arial" SIZE=2><P>   Accrued expenses (note 5)</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=3 HEIGHT=20>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">            953,871 </U></FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=2 HEIGHT=20>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">            841,607 </U></FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=3 HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="22%" VALIGN="TOP" COLSPAN=2 HEIGHT=20>
<FONT FACE="Arial" SIZE=2><P>Total current liabilities</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=3 HEIGHT=20>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">         2,518,188 </U></FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=2 HEIGHT=20>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">         2,333,929 </U></FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=3 HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP" COLSPAN=4 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>Commitments and contingencies (note 1)</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=3 HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=3 HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="22%" VALIGN="TOP" COLSPAN=2 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>Stockholders' deficit:</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=3 HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="54%" VALIGN="TOP" COLSPAN=5 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>   8% nonvoting preferred stock, $100 par value.</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=3 HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="54%" VALIGN="TOP" COLSPAN=5 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>   Authorized 25,000 shares, issued and outstanding</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=3 HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="33%" VALIGN="TOP" COLSPAN=3 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>   12,000 shares each year</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=3 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">         1,200,000 </FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=2 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">         1,200,000 </FONT></TD>
</TR>
<TR><TD WIDTH="54%" VALIGN="TOP" COLSPAN=5 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>   Common stock, $.01 par value.  Authorized</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=3 HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="54%" VALIGN="TOP" COLSPAN=5 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>     40,000,000 shares, issued and outstanding</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=3 HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="33%" VALIGN="TOP" COLSPAN=3 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>     39,943,073 shares each year</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=3 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">            399,431 </FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=2 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">            399,431 </FONT></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP" COLSPAN=4 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>   Common stock issuable, $.01 par value,</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=3 HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="33%" VALIGN="TOP" COLSPAN=3 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>     40,000 shares each year </FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=3 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">                  400 </FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=2 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">                  400 </FONT></TD>
</TR>
<TR><TD WIDTH="33%" VALIGN="TOP" COLSPAN=3 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>   Additional paid-in capital</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=3 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">         8,269,432 </FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=2 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">         8,269,432 </FONT></TD>
</TR>
<TR><TD WIDTH="22%" VALIGN="TOP" COLSPAN=2 HEIGHT=20>
<FONT FACE="Arial" SIZE=2><P>   Accumulated deficit</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=3 HEIGHT=20>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">      (12,247,507)</U></FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=2 HEIGHT=20>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">      (12,089,350)</U></FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=3 HEIGHT=20><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=2 HEIGHT=20><P></P></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="33%" VALIGN="TOP" COLSPAN=3 HEIGHT=20>
<FONT FACE="Arial" SIZE=2><P>Total stockholders' deficit</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=3 HEIGHT=20>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">        (2,378,244)</U></FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=2 HEIGHT=20>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">        (2,220,087)</U></FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=3 HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="43%" VALIGN="TOP" COLSPAN=4 HEIGHT=20>
<FONT FACE="Arial" SIZE=2><P>Total liabilities and stockholders' deficit</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=3 HEIGHT=20>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">  $          139,944 </U></FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=2 HEIGHT=20>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">  $          113,842 </U></FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=3 HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=3 HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="72%" VALIGN="TOP" COLSPAN=8 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>See accompanying notes to condensed financial statements.</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="33%" VALIGN="TOP" COLSPAN=3 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER"></P>
<P ALIGN="CENTER"> </P>
<P ALIGN="CENTER"> </P>
<P ALIGN="CENTER"> </P>
<P ALIGN="CENTER"> </P>
<P ALIGN="CENTER"> </P>
<P ALIGN="CENTER"> </P>
<P ALIGN="CENTER"> </P>
<P ALIGN="CENTER"> </P>
<P>F-3</P>
<P>THE ROVAC CORPORATION</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=3 HEIGHT=17><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=3 HEIGHT=17><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="33%" VALIGN="TOP" COLSPAN=3 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>Statement of Operations</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=3 HEIGHT=17><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=3 HEIGHT=17><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="43%" VALIGN="TOP" COLSPAN=4 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>Years ended July 31, 1999 and 1998</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=3 HEIGHT=17><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=3 HEIGHT=17><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=3 HEIGHT=17><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=2 HEIGHT=20><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=3 HEIGHT=20>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">1999</U></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=20>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">1998</U></FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>Revenues:</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=3 HEIGHT=17><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="22%" VALIGN="TOP" COLSPAN=2 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>   Contract Income</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=3 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT"> $     86,000 </FONT></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT"> $     36,000 </FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" HEIGHT=20>
<FONT FACE="Arial" SIZE=2><P>   Product</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=2 HEIGHT=20><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=3 HEIGHT=20>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">        10,634 </U></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=20>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">          3,901 </U></FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=3 HEIGHT=17><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="22%" VALIGN="TOP" COLSPAN=2 HEIGHT=20>
<FONT FACE="Arial" SIZE=2><P>Total revenues</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=2 HEIGHT=20><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=3 HEIGHT=20>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">        96,634 </U></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=20>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">        39,901 </U></FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=3 HEIGHT=17><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="22%" VALIGN="TOP" COLSPAN=2 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>Operating expenses:</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=3 HEIGHT=17><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="22%" VALIGN="TOP" COLSPAN=2 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>   Cost of sales</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=3 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">        13,351 </FONT></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">          8,689 </FONT></TD>
</TR>
<TR><TD WIDTH="33%" VALIGN="TOP" COLSPAN=3 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>   General and administrative</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=3 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">      136,560 </FONT></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">      120,591 </FONT></TD>
</TR>
<TR><TD WIDTH="33%" VALIGN="TOP" COLSPAN=3 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>   Research and development</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=3 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">        21,726 </FONT></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">        12,012 </FONT></TD>
</TR>
<TR><TD WIDTH="22%" VALIGN="TOP" COLSPAN=2 HEIGHT=20>
<FONT FACE="Arial" SIZE=2><P>   Depreciation</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=2 HEIGHT=20><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=3 HEIGHT=20>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">          2,683 </FONT></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=20>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">          2,683 </FONT></TD>
</TR>
<TR><TD WIDTH="22%" VALIGN="TOP" COLSPAN=2 HEIGHT=20>
<FONT FACE="Arial" SIZE=2><P>   Amortization</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=2 HEIGHT=20><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=3 HEIGHT=20>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">          3,693 </U></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=20>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">          2,612 </U></FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=3 HEIGHT=17><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="33%" VALIGN="TOP" COLSPAN=3 HEIGHT=20>
<FONT FACE="Arial" SIZE=2><P>Total operating expenses</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=2 HEIGHT=20><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=3 HEIGHT=20>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">      178,013 </U></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=20>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">      146,587 </U></FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=3 HEIGHT=17><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="22%" VALIGN="TOP" COLSPAN=2 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>Operating loss</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=3 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">       (81,379)</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">     (106,686)</FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=3 HEIGHT=17><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="33%" VALIGN="TOP" COLSPAN=3 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>Other income (expense):</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=3 HEIGHT=17><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="22%" VALIGN="TOP" COLSPAN=2 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>   Interest expense</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=3 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">       (82,403)</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">       (82,782)</FONT></TD>
</TR>
<TR><TD WIDTH="33%" VALIGN="TOP" COLSPAN=3 HEIGHT=20>
<FONT FACE="Arial" SIZE=2><P>   Miscellaneous income</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=2 HEIGHT=20><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=3 HEIGHT=20>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">          5,625 </U></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=20>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">          3,457 </U></FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=2 HEIGHT=20><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=3 HEIGHT=20><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=20><P></P></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=3 HEIGHT=17>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">       (76,778)</U></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=17>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">       (79,325)</U></FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=3 HEIGHT=17><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=20>
<FONT FACE="Arial" SIZE=2><P>Net loss</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=2 HEIGHT=20><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=3 HEIGHT=20>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT"> $   (158,157)</U></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=20>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT"> $   (186,011)</U></FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=3 HEIGHT=17><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="33%" VALIGN="TOP" COLSPAN=3 HEIGHT=20>
<FONT FACE="Arial" SIZE=2><P>Loss per share of common stock</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=2 HEIGHT=20><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=3 HEIGHT=20>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT"> $       (0.004)</U></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=20>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT"> $       (0.005)</U></FONT></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=2 HEIGHT=20><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=3 HEIGHT=20><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=20><P></P></TD>
</TR>
<TR><TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=3 HEIGHT=17><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="71%" VALIGN="TOP" COLSPAN=7 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>See accompanying notes to condensed financial statements.</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" COLSPAN=3 HEIGHT=17><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
</TABLE>

<FONT FACE="Arial" SIZE=2>
<P> </P>
<P> </P>
<P> </P>
<P> </P>
<P> </P>
<P> </P>
<P> </P>
<P> </P>
<P>F-4</P></FONT>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=2 WIDTH=906>
<TR><TD WIDTH="21%" VALIGN="TOP" COLSPAN=3 HEIGHT=16>
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER"></P>
<P ALIGN="CENTER"> </P>
<P ALIGN="CENTER"> </P>
<P ALIGN="CENTER"> </P>
<P ALIGN="CENTER">THE ROVAC CORPORATION</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="7%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="28%" VALIGN="TOP" COLSPAN=4 HEIGHT=16>
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">Statement of Stockholders' Deficit</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="7%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="28%" VALIGN="TOP" COLSPAN=4 HEIGHT=16>
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">Years ended July 31, 1999 and 1998</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="7%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="7%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="7%" VALIGN="TOP" HEIGHT=18><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=18><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=18><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" COLSPAN=2 HEIGHT=18>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">Preferred Stock</U></FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" COLSPAN=2 HEIGHT=18>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">Common Stock</U></FONT></TD>
<TD WIDTH="17%" VALIGN="TOP" COLSPAN=2 HEIGHT=18>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">Common Stock Issuable</U></FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=18>
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">Additional</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=18><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=18><P></P></TD>
</TR>
<TR><TD WIDTH="7%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">Number</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=2><P>Number</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">Number </FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">Paid-in</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">Accumulated</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="7%" VALIGN="TOP" HEIGHT=18><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=18><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=18><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=18>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">of Shares</U></FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=18>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">Par Value</U></FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=18>
<U><FONT FACE="Arial" SIZE=2><P>of Shares</U></FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=18>
<U><FONT FACE="Arial" SIZE=2><P>Par Value</U></FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=18>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">of Shares</U></FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=18>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">Par Value</U></FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=18>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">Capital</U></FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=18>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">Deficit</U></FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=18>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">Total</U></FONT></TD>
</TR>
<TR><TD WIDTH="21%" VALIGN="TOP" COLSPAN=3 HEIGHT=16>
<FONT FACE="Arial" SIZE=2><P>Balance, July 31, 1997</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">    12,000 </FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT"> $ 1,200,000 </FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">  39,943,073 </FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT"> $    399,431 </FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">        40,000 </FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT"> $        400 </FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT"> $ 8,269,432 </FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$(11,903,339) </FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$(2,034,076) </FONT></TD>
</TR>
<TR><TD WIDTH="7%" VALIGN="TOP" HEIGHT=18><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=18><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=18><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=18><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=18><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=18><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=18><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=18><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=18><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=18><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=18><P></P></TD>
</TR>
<TR><TD WIDTH="7%" VALIGN="TOP" HEIGHT=18>
<FONT FACE="Arial" SIZE=2><P>Net loss</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=18><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=18><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=18>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">             - </U></FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=18>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">               -   </U></FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=18>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">               -   </U></FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=18>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">               -   </U></FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=18>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">               -   </U></FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=18>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">               - </U></FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=18>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">                 - </U></FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=18>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">       (186,011)</U></FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=18>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(186,011)</U></FONT></TD>
</TR>
<TR><TD WIDTH="7%" VALIGN="TOP" HEIGHT=18><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=18><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=18><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=18><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=18><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=18><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=18><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=18><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=18><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=18><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=18><P></P></TD>
</TR>
<TR><TD WIDTH="21%" VALIGN="TOP" COLSPAN=3 HEIGHT=16>
<FONT FACE="Arial" SIZE=2><P>Balance, July 31, 1998</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">    12,000 </FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">    1,200,000 </FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">  39,943,073 </FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">      399,431 </FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">      40,000 </FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">           400 </FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">    8,269,432 </FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$(12,089,350)</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(2,220,087)   </FONT></TD>
</TR>
<TR><TD WIDTH="7%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="7%" VALIGN="TOP" HEIGHT=18>
<FONT FACE="Arial" SIZE=2><P>Net loss</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=18><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=18><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=18>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">             - </U></FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=18>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">                 - </U></FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=18>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">                 - </U></FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=18>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">                 - </U></FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=18>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">                 - </U></FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=18>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">               - </U></FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=18>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">                 - </U></FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=18>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">       (158,157)</U></FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=18>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">(158,157)      </U></FONT></TD>
</TR>
<TR><TD WIDTH="7%" VALIGN="TOP" HEIGHT=18><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=18><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=18><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=18><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=18><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=18><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=18><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=18><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=18><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=18><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=18><P></P></TD>
</TR>
<TR><TD WIDTH="21%" VALIGN="TOP" COLSPAN=3 HEIGHT=18>
<FONT FACE="Arial" SIZE=2><P>Balance, July 31, 1999</FONT></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=18>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">    12,000 </U></FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=18>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER"> $ 1,200,000 </U></FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=18>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">  39,943,073 </U></FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=18>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER"> $    399,431 </U></FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=18>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">         40,000 </U></FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=18>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$          400 </U></FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=18>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT"> $ 8,269,432 </U></FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=18>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$(12,247,507)</U></FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=18>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">$(2,378,244)</U></FONT></TD>
</TR>
<TR><TD WIDTH="7%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="46%" VALIGN="TOP" COLSPAN=6 HEIGHT=16>
<FONT FACE="Arial" SIZE=2><P>See accompanying notes to condensed financial statements.</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="46%" VALIGN="TOP" COLSPAN=6 HEIGHT=16>
<FONT FACE="Arial" SIZE=2>
<P> </P>
<P> </P>
<P> </P>
<P> </P>
<P> </P>
<P> </P>
<P> </P>
<P> </P>
<P>F-5</FONT></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=16><P></P></TD>
</TR>
</TABLE>

<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=2 WIDTH=906>
<TR><TD WIDTH="7%" VALIGN="TOP" HEIGHT=18><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" COLSPAN=2 HEIGHT=18><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" COLSPAN=2 HEIGHT=18><P></P></TD>
<TD WIDTH="7%" VALIGN="TOP" COLSPAN=2 HEIGHT=18><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" COLSPAN=2 HEIGHT=18><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" COLSPAN=3 HEIGHT=18><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=18><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" COLSPAN=2 HEIGHT=18><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=18><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=18><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=18><P></P></TD>
<TD WIDTH="9%" VALIGN="TOP" HEIGHT=18><P></P></TD>
</TR>
<TR><TD WIDTH="23%" VALIGN="TOP" COLSPAN=6 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>THE ROVAC CORPORATION</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=3 HEIGHT=17><P></P></TD>
<TD WIDTH="43%" VALIGN="TOP" COLSPAN=5 HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=3 HEIGHT=17><P></P></TD>
<TD WIDTH="43%" VALIGN="TOP" COLSPAN=5 HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="23%" VALIGN="TOP" COLSPAN=6 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>Statements of Cash Flows</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=3 HEIGHT=17><P></P></TD>
<TD WIDTH="43%" VALIGN="TOP" COLSPAN=5 HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=3 HEIGHT=17><P></P></TD>
<TD WIDTH="43%" VALIGN="TOP" COLSPAN=5 HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="30%" VALIGN="TOP" COLSPAN=8 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>Years ended July 31, 1999 and 1998</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=3 HEIGHT=17><P></P></TD>
<TD WIDTH="43%" VALIGN="TOP" COLSPAN=5 HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=3 HEIGHT=17><P></P></TD>
<TD WIDTH="43%" VALIGN="TOP" COLSPAN=5 HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=20><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=20><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=20><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=20><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=20><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=3 HEIGHT=20>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">1999</U></FONT></TD>
<TD WIDTH="43%" VALIGN="TOP" COLSPAN=5 HEIGHT=20>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">1998</U></FONT></TD>
</TR>
<TR><TD WIDTH="30%" VALIGN="TOP" COLSPAN=8 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>Cash flows from operating activities:</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=3 HEIGHT=17><P></P></TD>
<TD WIDTH="43%" VALIGN="TOP" COLSPAN=5 HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=20>
<FONT FACE="Arial" SIZE=2><P>   Net loss</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=20><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=20><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=20><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=20><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=3 HEIGHT=20>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT"> $        (158,157)</U></FONT></TD>
<TD WIDTH="43%" VALIGN="TOP" COLSPAN=5 HEIGHT=20>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT"> $        (186,011)</U></FONT></TD>
</TR>
<TR><TD WIDTH="30%" VALIGN="TOP" COLSPAN=8 HEIGHT=20>
<FONT FACE="Arial" SIZE=2><P>   Adjustments to reconcile net loss to</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=20><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=3 HEIGHT=20><P></P></TD>
<TD WIDTH="43%" VALIGN="TOP" COLSPAN=5 HEIGHT=20><P></P></TD>
</TR>
<TR><TD WIDTH="30%" VALIGN="TOP" COLSPAN=8 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>     net cash used in operating activities:</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=3 HEIGHT=17><P></P></TD>
<TD WIDTH="43%" VALIGN="TOP" COLSPAN=5 HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="30%" VALIGN="TOP" COLSPAN=8 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>       Depreciation and amortization</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=3 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">               6,376 </FONT></TD>
<TD WIDTH="43%" VALIGN="TOP" COLSPAN=5 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">               5,295 </FONT></TD>
</TR>
<TR><TD WIDTH="45%" VALIGN="TOP" COLSPAN=11 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>       Services in exchange for common stock or note payable</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=3 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">                    -   </FONT></TD>
<TD WIDTH="43%" VALIGN="TOP" COLSPAN=5 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">              (8,000)</FONT></TD>
</TR>
<TR><TD WIDTH="30%" VALIGN="TOP" COLSPAN=8 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>       (Increase) decrease in assets:</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=3 HEIGHT=17><P></P></TD>
<TD WIDTH="43%" VALIGN="TOP" COLSPAN=5 HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="30%" VALIGN="TOP" COLSPAN=8 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>         Accounts and loan receivable</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=3 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">            (23,991)</FONT></TD>
<TD WIDTH="43%" VALIGN="TOP" COLSPAN=5 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">            (34,345)</FONT></TD>
</TR>
<TR><TD WIDTH="15%" VALIGN="TOP" COLSPAN=4 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>         Inventory</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=3 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">              (2,003)</FONT></TD>
<TD WIDTH="43%" VALIGN="TOP" COLSPAN=5 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">                    -   </FONT></TD>
</TR>
<TR><TD WIDTH="30%" VALIGN="TOP" COLSPAN=8 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>        Increase (decrease) in liabilities:</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=3 HEIGHT=17><P></P></TD>
<TD WIDTH="43%" VALIGN="TOP" COLSPAN=5 HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="23%" VALIGN="TOP" COLSPAN=6 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>         Accounts payable</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=3 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">             72,864 </FONT></TD>
<TD WIDTH="43%" VALIGN="TOP" COLSPAN=5 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">            118,986 </FONT></TD>
</TR>
<TR><TD WIDTH="23%" VALIGN="TOP" COLSPAN=6 HEIGHT=20>
<FONT FACE="Arial" SIZE=2><P>         Accrued expenses</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=20><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=20><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=3 HEIGHT=20>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">            112,264 </U></FONT></TD>
<TD WIDTH="43%" VALIGN="TOP" COLSPAN=5 HEIGHT=20>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">            106,712 </U></FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=3 HEIGHT=17><P></P></TD>
<TD WIDTH="43%" VALIGN="TOP" COLSPAN=5 HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=20>
<FONT FACE="Arial" SIZE=2><P>       </FONT></TD>
<TD WIDTH="15%" VALIGN="TOP" COLSPAN=4 HEIGHT=20>
<FONT FACE="Arial" SIZE=2><P>Total adjustments</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=20><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=20><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=3 HEIGHT=20>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">            165,510 </U></FONT></TD>
<TD WIDTH="43%" VALIGN="TOP" COLSPAN=5 HEIGHT=20>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">            188,648 </U></FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=3 HEIGHT=17><P></P></TD>
<TD WIDTH="43%" VALIGN="TOP" COLSPAN=5 HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=20><P></P></TD>
<TD WIDTH="30%" VALIGN="TOP" COLSPAN=8 HEIGHT=20>
<FONT FACE="Arial" SIZE=2><P>Net cash provided by operating activities:</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=3 HEIGHT=20>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">               7,353 </U></FONT></TD>
<TD WIDTH="43%" VALIGN="TOP" COLSPAN=5 HEIGHT=20>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">               2,637 </U></FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=20><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=20><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=20><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=20><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=20><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=3 HEIGHT=20><P></P></TD>
<TD WIDTH="43%" VALIGN="TOP" COLSPAN=5 HEIGHT=20><P></P></TD>
</TR>
<TR><TD WIDTH="30%" VALIGN="TOP" COLSPAN=8 HEIGHT=20>
<FONT FACE="Arial" SIZE=2><P>Cash flows from investing activities:</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=20><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=3 HEIGHT=20><P></P></TD>
<TD WIDTH="43%" VALIGN="TOP" COLSPAN=5 HEIGHT=20><P></P></TD>
</TR>
<TR><TD WIDTH="30%" VALIGN="TOP" COLSPAN=8 HEIGHT=20>
<FONT FACE="Arial" SIZE=2><P>   Costs of patents and patent applications</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=20><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=3 HEIGHT=20>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">              (6,484)</U></FONT></TD>
<TD WIDTH="43%" VALIGN="TOP" COLSPAN=5 HEIGHT=20>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">              (7,323)</U></FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=3 HEIGHT=17><P></P></TD>
<TD WIDTH="43%" VALIGN="TOP" COLSPAN=5 HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=20><P></P></TD>
<TD WIDTH="30%" VALIGN="TOP" COLSPAN=8 HEIGHT=20>
<FONT FACE="Arial" SIZE=2><P>Net cash used in investing activities</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=3 HEIGHT=20>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">              (6,484)</U></FONT></TD>
<TD WIDTH="43%" VALIGN="TOP" COLSPAN=5 HEIGHT=20>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">              (7,323)</U></FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=20><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=20><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=20><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=20><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=20><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=3 HEIGHT=20><P></P></TD>
<TD WIDTH="43%" VALIGN="TOP" COLSPAN=5 HEIGHT=20><P></P></TD>
</TR>
<TR><TD WIDTH="30%" VALIGN="TOP" COLSPAN=8 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>Cash flows from financing activities:</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=3 HEIGHT=17><P></P></TD>
<TD WIDTH="43%" VALIGN="TOP" COLSPAN=5 HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="30%" VALIGN="TOP" COLSPAN=8 HEIGHT=20>
<FONT FACE="Arial" SIZE=2><P>    Proceeds from notes payable - officer</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=20><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=3 HEIGHT=20>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">               2,374 </U></FONT></TD>
<TD WIDTH="43%" VALIGN="TOP" COLSPAN=5 HEIGHT=20>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">               2,800 </U></FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=20><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=20><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=20><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=20><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=20><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=3 HEIGHT=20><P></P></TD>
<TD WIDTH="43%" VALIGN="TOP" COLSPAN=5 HEIGHT=20><P></P></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=20><P></P></TD>
<TD WIDTH="30%" VALIGN="TOP" COLSPAN=8 HEIGHT=20>
<FONT FACE="Arial" SIZE=2><P>Net cash provided by financing activities</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=3 HEIGHT=20>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">               2,374 </U></FONT></TD>
<TD WIDTH="43%" VALIGN="TOP" COLSPAN=5 HEIGHT=20>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">               2,800 </U></FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=20><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=20><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=20><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=20><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=20><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=3 HEIGHT=20><P></P></TD>
<TD WIDTH="43%" VALIGN="TOP" COLSPAN=5 HEIGHT=20><P></P></TD>
</TR>
<TR><TD WIDTH="15%" VALIGN="TOP" COLSPAN=4 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>Net change in cash</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=3 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">               3,243 </FONT></TD>
<TD WIDTH="43%" VALIGN="TOP" COLSPAN=5 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">              (1,886)</FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=3 HEIGHT=17><P></P></TD>
<TD WIDTH="43%" VALIGN="TOP" COLSPAN=5 HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="30%" VALIGN="TOP" COLSPAN=8 HEIGHT=20>
<FONT FACE="Arial" SIZE=2><P>Cash overdraft, beginning of year</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=20><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=3 HEIGHT=20>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">              (4,830)</U></FONT></TD>
<TD WIDTH="43%" VALIGN="TOP" COLSPAN=5 HEIGHT=20>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT">              (2,944)</U></FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=20><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=20><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=20><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=20><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=20><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=3 HEIGHT=20><P></P></TD>
<TD WIDTH="43%" VALIGN="TOP" COLSPAN=5 HEIGHT=20><P></P></TD>
</TR>
<TR><TD WIDTH="23%" VALIGN="TOP" COLSPAN=6 HEIGHT=20>
<FONT FACE="Arial" SIZE=2><P>Cash overdraft, end of year</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=20><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=20><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=20><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=3 HEIGHT=20>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT"> $           (1,587)</U></FONT></TD>
<TD WIDTH="43%" VALIGN="TOP" COLSPAN=5 HEIGHT=20>
<U><FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT"> $           (4,830)</U></FONT></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=3 HEIGHT=17><P></P></TD>
<TD WIDTH="43%" VALIGN="TOP" COLSPAN=5 HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="38%" VALIGN="TOP" COLSPAN=10 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>Supplemental disclosures of cash flow information:</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=3 HEIGHT=17><P></P></TD>
<TD WIDTH="43%" VALIGN="TOP" COLSPAN=5 HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="30%" VALIGN="TOP" COLSPAN=8 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P> Cash paid during year for interest</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=3 HEIGHT=17><P></P></TD>
<TD WIDTH="43%" VALIGN="TOP" COLSPAN=5 HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=3 HEIGHT=17><P></P></TD>
<TD WIDTH="43%" VALIGN="TOP" COLSPAN=5 HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="45%" VALIGN="TOP" COLSPAN=11 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P>Supplemental disclosures of non-cash financing activities:</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=3 HEIGHT=17><P></P></TD>
<TD WIDTH="43%" VALIGN="TOP" COLSPAN=5 HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="38%" VALIGN="TOP" COLSPAN=10 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P> Note payable issued for services (cancelled)</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" COLSPAN=3 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT"> $                   - </FONT></TD>
<TD WIDTH="43%" VALIGN="TOP" COLSPAN=5 HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="RIGHT"> $           (8,000)</FONT></TD>
</TR>
</TABLE>

<FONT SIZE=3><P>F-6</P>
</FONT><B><I><FONT FACE="Arial"><P>	</I></FONT><FONT SIZE=2>THE ROVAC CORPORATION</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">	Notes to Financial Statements</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </P>
<P ALIGN="JUSTIFY"> (1)	<U>Basis of Presentation</P>
</U><P ALIGN="JUSTIFY"></P><DIR>
<DIR>

<P ALIGN="JUSTIFY">	The ROVAC Corporation (Company) is a majority-owned subsidiary of Stafford Industries Inc.
(Parent).  The Parent owned approximately 57% of the Company at July 31, 1999 and 1998.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">	The Company is primarily a research and development firm engaged principally in designing,
building and testing a number of products. The Company is continuing in a transition phase
which has allowed the introduction of it pipe connecting technology to reach commercial
markets.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">	The Company's financial statements have been presented on a going concern basis, which
contemplates the realization of assets and liabilities in the normal course of business.  The
Company has reported net losses of $158,157 and $186,011 for the years ended July 31, 1999 and
1998, respectively.  As a result, a stockholders' deficit of $2,378,244 was reported and the
Company's current liabilities exceed its current assets by $2,454,311 at July 31, 1999.  These
conditions raise substantial doubts about the Company's ability to continue as a going concern.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">	No significant revenues have been generated in the past two years.  During this time the
Company has been primarily dependent upon officer loans and advances from the Parent
company to fund expenses.  Continued operations of the Company are dependent upon the
Company's ability to successfully secure customers for its new products and the ability to secure
additional equity or debt financing. There can be no assurance that the Company's efforts will
be successful.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">	The Company is pursuing a market for its new mechanical pipe connector.  The Company's
ability to recover the recorded amounts of its assets, particularly the unamortized cost of patents
and patent applications of $68,935 is dependent on the success of its ventures.</P>
<P ALIGN="JUSTIFY"></P></DIR>
</DIR>

<P ALIGN="JUSTIFY"> (2)	<U>Summary of Significant Accounting Policies</P>
</U><P ALIGN="JUSTIFY"></P>
<OL TYPE="a">

<U><P ALIGN="JUSTIFY"><LI>Inventory</LI></P>
</U><P ALIGN="JUSTIFY">	</P>
<P ALIGN="JUSTIFY">		Inventory is valued at the lower of cost or market; cost is determined principally on the
basis of first-in, first-out method (FIFO).	</P>
<P ALIGN="JUSTIFY"></P>
<U><P ALIGN="JUSTIFY"><LI>Property and equipment</LI></P></OL>

</U><P ALIGN="JUSTIFY"></P><DIR>
<DIR>
<DIR>

<P ALIGN="JUSTIFY">		Property and equipment are stated at cost.  Depreciation is computed using the straight-
line method over useful lives of two to ten years.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">	(c)	<U>Patent applications</P>
</U><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">		Patent applications are stated at cost until a patent is granted, at which time the costs are
amortized over the life of the patent.  Patent applications subsequently determined to be
not commercially feasible are charged to income at the time of such determination.</P>
<P ALIGN="JUSTIFY"> </P></DIR>
</DIR>
</DIR>

<P>F-7</P>
</B>
<B><P ALIGN="JUSTIFY">	</P>
<P ALIGN="CENTER">THE ROVAC CORPORATION</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="CENTER">Notes to Financial Statements</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </P>
<P ALIGN="JUSTIFY"> (2)	<U>Summary of Significant Accounting Policies</U> (continued)</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">	(d)	<U>Income taxes</P>
</U><P ALIGN="JUSTIFY"></P><DIR>
<DIR>
<DIR>

<P ALIGN="JUSTIFY">		Deferred income tax assets and liabilities are computed annually for differences between
the financial statement and tax bases of assets and liabilities that will result in taxable or
deductible amounts in the future based on enacted tax laws and rates applicable to the
periods in which the differences are expected to affect taxable income.  Valuation
allowances are established when necessary to reduce deferred tax assets to the amount
expected to be realized.  Income tax expense is the tax payable or refundable for the period
plus or minus the change during the period in deferred tax assets and liabilities.</P>
<P ALIGN="JUSTIFY">		</P></DIR>
</DIR>
</DIR>

<P ALIGN="JUSTIFY">	(e)	<U>Loss per share of common stock</P>
</U><P ALIGN="JUSTIFY"></P><DIR>
<DIR>
<DIR>

<P ALIGN="JUSTIFY">		Loss per share of common stock as computed is based on the
weighted average of the number of shares outstanding and issuable during the years (39,983,073) in 1999
and (39,983,073) in 1998. </P>
<P ALIGN="JUSTIFY"></P></DIR>
</DIR>
</DIR>

<OL START=3>

<U><P ALIGN="JUSTIFY"><LI>Inventory</LI></P></OL>

</U><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">	Inventory consists of the following:</P>
<OL START=1999>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>

<OL>

<P ALIGN="JUSTIFY"><LI>	<U>1998</LI></P></OL>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</OL>

</U><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">		Raw materials	$   713	$    -   </P>
<P ALIGN="JUSTIFY">		Finished goods	<U>  1,290</U>	<U>      -   </P>
</U><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">				<U>$2,003</U>	<U>$    -   </P>
</U><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> (4)	<U>Notes Payable - Officer</P>
</U><P ALIGN="JUSTIFY"></P><DIR>
<DIR>

<P ALIGN="JUSTIFY">	Notes payable to officer consist of several demand notes to an officer who is also a director and
shareholder of the Company.  The notes carry interest rates of 12%.</P>
<P ALIGN="JUSTIFY"></P></DIR>
</DIR>

<P ALIGN="JUSTIFY"> (5)	<U>Accrued Expenses</P>
</U><P ALIGN="JUSTIFY"></P><DIR>
<DIR>

<P ALIGN="JUSTIFY">	Accrued expenses consist of:</P></DIR>
</DIR>

<P ALIGN="JUSTIFY">				<U>1999</U> 	<U>1998</P>
</U><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">			Interest to officer	$737,076	$655,255</P>
<P ALIGN="JUSTIFY">			Professional fees	29,000	21,000</P>
<P ALIGN="JUSTIFY">			Payroll taxes	18,830	19,326</P>
<P ALIGN="JUSTIFY">			Directors' fees	24,300	24,300</P><DIR>
<DIR>
<DIR>
<DIR>

<P>  Salaries	137,477	117,457 	  			Other	<U>      7,188</U>	<U>      4,269</P></DIR>
</DIR>
</DIR>
</DIR>

</U><P ALIGN="JUSTIFY">			Other	<U>7,188</U>	<U>4,269</P>
</U><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">				<U>$953,871</U>	<U>$841,607</P>
</B></U>
<P> </P>
<P> </P>
<B><P>F-8</P>
</B>
<B><P ALIGN="JUSTIFY">	THE ROVAC CORPORATION</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">	Notes to Financial Statements</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> </P><DIR>
<DIR>

<P ALIGN="JUSTIFY">(6)	<U>Income Taxes</P>
</U><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">	At July 31, 1999 the Company has net operating loss carryforwards approximating $3,668,000
which are available to offset future taxable income.  The carryforwards expire as follows:</P>
<P ALIGN="JUSTIFY"></P></DIR>
</DIR>

<P ALIGN="JUSTIFY">			<U>Year	Amount  </P>
</U><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">				2000	$436,000</P>
<P ALIGN="JUSTIFY">				2001	566,000</P>
<P ALIGN="JUSTIFY">				2002	368,000</P>
<P ALIGN="JUSTIFY">				2003	444,000</P>
<P ALIGN="JUSTIFY">				2004	388,000</P>
<P ALIGN="JUSTIFY">				2005	265,000</P>
<P ALIGN="JUSTIFY">				2006	68,000</P>
<P ALIGN="JUSTIFY">				2007	146,000</P>
<P ALIGN="JUSTIFY">				2008	273,000</P>
<OL START=2009>
<DIR>
<DIR>

<OL>

<P ALIGN="JUSTIFY"><LI> 52,000</LI></P></OL>
</DIR>
</DIR>
</OL>

<P ALIGN="JUSTIFY">				2010	236,000</P>
<P ALIGN="JUSTIFY">				2011	130,000</P>
<P ALIGN="JUSTIFY">				2012	150,000</P>
<OL START=2013>
<DIR>
<DIR>

<OL>

<P ALIGN="JUSTIFY"><LI> 86,000</LI></P></OL>
</DIR>
</DIR>
</OL>

<P ALIGN="JUSTIFY">				2014	60,000</P>
<P ALIGN="JUSTIFY"></P><DIR>
<DIR>

<P ALIGN="JUSTIFY">	The loss carryforward is fully reserved for deferred tax purposes.</P>
<P ALIGN="JUSTIFY"></P></DIR>
</DIR>

<P ALIGN="JUSTIFY"> (7)	<U>Related Party Transactions</P>
</U><P ALIGN="JUSTIFY"></P><DIR>
<DIR>

<P ALIGN="JUSTIFY">	The Company leases its space from its parent company as a tenant-at-will.  The lease expense
was $19,560 for 1999 and 1998. </P>
<P ALIGN="JUSTIFY"></P>
</FONT><FONT SIZE=3><P ALIGN="JUSTIFY"> </P>
<P ALIGN="JUSTIFY"> </P>
<P ALIGN="CENTER"> </P>
</FONT><FONT FACE="Arial" SIZE=4><P> </P>
<P> </P>
<P> </P>
<P> </P></DIR>
</DIR>

</FONT><FONT SIZE=2><P>F-9</P>
</B><P ALIGN="CENTER"></P>
<P ALIGN="CENTER"> </P>
<P ALIGN="CENTER">PART III</P>

<P>Item 9.	Directors, Executive Officers, Promoters and Control Person, Compliance with Section 16(a) of
the Exchange Act.</P>

<P>	The last Annual Meeting of the Shareholders of the Company was held on March 31, 1989, when
Mr. Shea, Sr., Mr. Riesner, Mr. Spillane, and Mr. Shea, Jr., were re-elected as directors and Mr. Loscocco
was elected a new director of the Company.  These directors were elected by the shareholders to serve until
the next annual meeting or until their successors are elected and qualified.  The following information is
furnished with respect to current directors and officers of the Company.</P>

<P>Name					Age		Position			Period of Service</P>

<P>Raymond E. Shea, Sr.			81		Chief Executive 		May, 1984</P>
<P>							Officer, Director		to date</P>

<P>Robert Riesner				70		Secretary,		September 1982</P>
<P>							Director			to date</P>

<P>S. John Loscocco				75		Director			March 1989</P>
<P>										to date</P>

<P>John W. Spillane				68		Director			May, 1984</P>
<P>										to date</P>

<P>Raymond E. Shea, Jr.			40		Vice President		April 1985</P>
<P>							Treasurer, Director	to date</P>

<P> </P>
<P>	Raymond E. Shea, Sr., is the Chairman of the Board of Directors and Chief Executive Officer of
the Company.  Mr. Shea has been an officer and director of the Company since 1984.  Mr. Shea is an
entrepreneur and inventor.  He is a businessman associated with the commercialization of technical
products and business turnarounds. </P>

<P>	Robert Riesner, Secretary and Director of the Company, is a financial consultant and workout
specialist supervising various corporate transactions and reorganizations.  Mr. Riesner has been an officer
and director of the Company since 1982.  Since April 1983, he has been a principal of PBR Financial
Services.</P>

<P>	S. John Loscocco is a Director who is an investor with extensive experience in the field of venture
capital.  Mr. Loscocco has served as President of Acquivest Group, Inc., a venture management
organization for more than the past ten years. </P>

<P>	John W. Spillane is a Director of the Company and serves the Company as its General Counsel.
Mr. Spillane has been a Director of the Company since 1984.  He is a member of the Massachusetts State
and Federal Bar, and has been a practicing attorney in Worcester, Massachusetts for 41 years.</P>

<P>	Raymond E. Shea, Jr. is Vice President, Treasurer and Director of the Company and is the son of
Raymond E. Shea, Sr.  He has been an officer and director of the Company since April 1985 and has served
the Company in a variety of key operating and managerial positions during the past twelve years.  Mr. Shea
is also a Treasurer and Director of Stafford Industries, Inc.</P>

<P>	</P>

<P>Item 10.		Executive Compensation</P>

<P>	All officers and directors of the Company received the following compensation (both cash and
deferred) during fiscal year 1999:</P>

<P>Summary Compensation Table</P>

<P>	The chief executive officer has not drawn a salary in the three year period ending July 31, 1999.</P>

<P>No officer or director earned in excess of $100,000 in the three year period ending July 31, 1999.</P>

<P>The aggregate amount of other compensation paid to each officer and director during the last fiscal
year did not exceed the lesser of $25,000 or 10% of cash compensation.  There are no plans in effect or
proposed under which the issuer paid or will pay cash, non-cash, or other compensation to any person,
including the above named individuals and group specified in this Item.  Notwithstanding the foregoing,
directors accrue $300.00 of compensation for their services in attending each directors' meeting.</P>

<P> </P>
<P>Item 11.  Security Ownership of Certain Beneficial Owners and Management.</P>

<P>Stafford Industries, Inc., of Rochdale, Massachusetts ("Stafford") owns a majority of shares of
common stock of the Company.  As of July 31, 1999, Stafford owned 22,792,500 shares of common stock
of the Company and 12,000 shares of preferred stock of the Company.  The identity of the officers and
directors of Stafford is as follows:</P>

<P>	Raymond E. Shea, Sr., President and Director,</P>
<P>	342 Silver Lane</P>
<P>	Royal Palms, Boca Raton, FL 33432;</P>

<P>	Raymond E. Shea, Jr., Treasurer and Director,</P>
<P>	175 Southbridge Road</P>
<P>	North Oxford, MA 01537;</P>

<P>	John W. Spillane, Clerk and Director</P>
<P>	11 Dennison Road</P>
<P>	Worcester, MA 01609</P>

<P>	Raymond E. Shea, Sr., President and Chairman of the Board of Stafford, is the
controlling stockholder of Stafford.  Mr. Shea, Sr. owns 5,157 shares of common stock of Stafford, which
is 31.25% of the number of shares of Stafford issued and outstanding.  Mr. Shea, Sr. owned the same
number of shares of Stafford common stock at the close of the fiscal year ending July 31, 1999.</P>

<P>	The authorized capital stock of the Company consists of 40,000,000 shares of common
stock, par value $0.01 per share, and 25,000 shares of preferred stock, $100 per share.  As of July 31, 1999,
Stafford owned 57% of the common stock of the Company and all of the preferred stock issued by the
Company.</P>

<P> </P>
<P> </P>
<P> </P>
<P> </P>
<P> </P>
<P> </P>
<P>THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY OMITTED.</P>
<P>	The following table shows the amount of common stock of the Company owned of record and
beneficially as of July 31, 1999 by each Director and all Directors and Officers as a group, consisting of
five persons:</P>

<P> </P></FONT>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=590>
<TR><TD WIDTH="25%" VALIGN="TOP" HEIGHT=37>
<U><FONT SIZE=2><P> </P>
<P>Title of Class</U></FONT></TD>
<TD WIDTH="25%" VALIGN="TOP" COLSPAN=2 HEIGHT=37>
<U><FONT SIZE=2><P>Name and Address of</P>
<P>Beneficial Owner</U></FONT></TD>
<TD WIDTH="25%" VALIGN="TOP" COLSPAN=2 HEIGHT=37>
<U><FONT SIZE=2><P>Amount and Nature</P>
<P>Of Beneficial Owner</U></FONT></TD>
<TD WIDTH="25%" VALIGN="TOP" COLSPAN=2 HEIGHT=37>
<U><FONT SIZE=2>
<P>Percent of Class</U></FONT></TD>
</TR>
<TR><TD WIDTH="25%" VALIGN="TOP">
<FONT SIZE=2><P>Common Stock</FONT></TD>
<TD WIDTH="25%" VALIGN="TOP" COLSPAN=2>
<FONT SIZE=2><P>Raymond E. Shea, Sr.</P>
<P>442 Silver Lane</P>
<P>Boca Raton, FL 33432</P>
</FONT></TD>
<TD WIDTH="25%" VALIGN="TOP" COLSPAN=2>
<FONT SIZE=2><P>7,251,579</P>
<P>Shares (1)</FONT></TD>
<TD WIDTH="25%" VALIGN="TOP" COLSPAN=2>
<FONT SIZE=2><P>18.15%</FONT></TD>
</TR>
<TR><TD WIDTH="25%" VALIGN="TOP">
<FONT SIZE=2><P>Common Stock</FONT></TD>
<TD WIDTH="25%" VALIGN="TOP" COLSPAN=2>
<FONT SIZE=2><P>Robert Riesner</P>
<P>51 S. Keswick Ave</P>
<P>Glenside, PA 19038</FONT></TD>
<TD WIDTH="25%" VALIGN="TOP" COLSPAN=2>
<FONT SIZE=2><P>414,409</P>
<P>Shares (2)</FONT></TD>
<TD WIDTH="25%" VALIGN="TOP" COLSPAN=2>
<FONT SIZE=2><P>1.04%</FONT></TD>
</TR>
<TR><TD WIDTH="25%" VALIGN="TOP">
<FONT SIZE=2><P>Common Stock</FONT></TD>
<TD WIDTH="25%" VALIGN="TOP" COLSPAN=2>
<FONT SIZE=2><P>John W. Spillane</P>
<P>11 Dennison Road</P>
<P>Worcester, MA 01609</FONT></TD>
<TD WIDTH="25%" VALIGN="TOP" COLSPAN=2>
<FONT SIZE=2><P>317,204</P>
<P>Shares (3)</FONT></TD>
<TD WIDTH="25%" VALIGN="TOP" COLSPAN=2>
<FONT SIZE=2><P>0.79%</FONT></TD>
</TR>
<TR><TD WIDTH="25%" VALIGN="TOP" COLSPAN=2>
<FONT SIZE=2><P>Common Stock</FONT></TD>
<TD WIDTH="25%" VALIGN="TOP" COLSPAN=2>
<FONT SIZE=2><P>Raymond E. Shea, Jr.</P>
<P>175 Southbridge Road</P>
<P>No. Oxford, MA 01537</FONT></TD>
<TD WIDTH="25%" VALIGN="TOP" COLSPAN=2>
<FONT SIZE=2><P>2,520,988</P>
<P>Shares (4)</FONT></TD>
<TD WIDTH="25%" VALIGN="TOP">
<FONT SIZE=2><P>6.31%</FONT></TD>
</TR>
<TR><TD WIDTH="25%" VALIGN="TOP" COLSPAN=2>
<FONT SIZE=2><P>Common Stock</FONT></TD>
<TD WIDTH="25%" VALIGN="TOP" COLSPAN=2>
<FONT SIZE=2><P>S. John Loscocco</P>
<P>Bayview Ave.</P>
<P>Portsmouth, RI 02871</FONT></TD>
<TD WIDTH="25%" VALIGN="TOP" COLSPAN=2>
<FONT SIZE=2><P>165,763</P>
<P>Shares (5)</FONT></TD>
<TD WIDTH="25%" VALIGN="TOP">
<FONT SIZE=2><P>0.41%</FONT></TD>
</TR>
<TR><TD WIDTH="25%" VALIGN="TOP" COLSPAN=2> </TD>
<TD WIDTH="25%" VALIGN="TOP" COLSPAN=2> </TD>
<TD WIDTH="25%" VALIGN="TOP" COLSPAN=2> </TD>
<TD WIDTH="25%" VALIGN="TOP"> </TD>
</TR>
<TR><TD WIDTH="25%" VALIGN="TOP" COLSPAN=2> </TD>
<TD WIDTH="25%" VALIGN="TOP" COLSPAN=2> </TD>
<TD WIDTH="25%" VALIGN="TOP" COLSPAN=2> </TD>
<TD WIDTH="25%" VALIGN="TOP"> </TD>
</TR>
</TABLE>

<FONT SIZE=2>
<P>(<I>1)  Mr. Shea, Sr. owns 31.25% of all of the shares of common stock of Stafford, which holds 22,792,500
shares of common stock of ROVAC.</P>
<P>(2)  Mr. Riesner owns 1.81% of all of the shares of common stock of Stafford and thus has a beneficial
interest in 22,792,500 shares of common stock of the Company held by Stafford.</P>
<P>(3)  Mr. Spillane owns 0.91% of the issued and outstanding shares of common stock of Stafford which holds
22,792,500 shares of common stock of ROVAC.</P>
<P>(4)  Mr. Shea, Jr. owns 11.06% of all of the shares of common stock of Stafford, which holds 22,792,500
shares of common stock of the Company.</P>
<P>(5)  Mr. Loscocco has previously disclaimed ownership in 120 shares of common stock of Stafford which
were issued to Mr. Loscocco and subsequently transferred to Acquivest Holding II, Ltd., with which
Mr. Loscocco is affiliated.  The 120 shares of common stock of Stafford represents 0.72% of the issued and
outstanding shares of Common Stock of Stafford and represents 165,763 shares of Common Stock of the
Company held by Stafford</I>.</P>

<P> </P>
<P> </P>
<P> </P>
<P> </P>
<P> </P>
<P> </P>
<P> </P>
<P> </P>
<P> </P>
<P> </P>
<P> </P>
<P> </P>
<P> </P>
<P> </P>
<P> </P>
<B><P>Item 12.  Certain Relationships and Related Transactions</P>
</B>
<P>	There were no transactions in excess of $75,000 with related parties.</P>

<B><P>Item 13.  Exhibits and Reports on Form 8-K</P>

<P>	(a)  Exhibits</P>

</B><P>		None.</P>
<B>
<P>	(b)  Reports on Form 8-KSB</P>

</B><P>		None.</P>
<B>
<P>	(c)  Exhibits</P>
<DIR>
<DIR>

</B><P>1.  Contracts, Leases and Agreements.</P></DIR>
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<P>		2.  Subsidiaries</P>
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<P ALIGN="CENTER">THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY OMITTED.</P>

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</FONT><B><FONT FACE="Arial" SIZE=4><P ALIGN="CENTER">SIGNATURES</P>
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<P>	In accordance with Section 13 or 15 (d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned.</P>

<P>(Registrant)					THE ROVAC CORPORATION</P>

<P> </P>
<P>By (Signature and Title)				______________________________________</P>
<P>						Raymond E. Shea, Sr., President</P>

<P> </P>
<P>Date ___________________________</P>

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<P>	In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicates.</P>

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<TABLE BORDER CELLSPACING=1 CELLPADDING=7 WIDTH=590>
<TR><TD WIDTH="33%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="CENTER">Signature</U></FONT></TD>
<TD WIDTH="33%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="CENTER">Title</U></FONT></TD>
<TD WIDTH="33%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="CENTER">Date</P>
<P ALIGN="CENTER"></U></FONT></TD>
</TR>
<TR><TD WIDTH="33%" VALIGN="TOP">
<FONT SIZE=2><P> </P>
<P>__________________________</P>
<P>(Raymond E. Shea, Sr.)</FONT></TD>
<TD WIDTH="33%" VALIGN="TOP">
<FONT SIZE=2><P>Chief Executive Officer</P>
<P>and Director</P>
</FONT></TD>
<TD WIDTH="33%" VALIGN="TOP">
<FONT SIZE=2><P> </P>
<P>____________________</P>
</FONT></TD>
</TR>
<TR><TD WIDTH="33%" VALIGN="TOP">
<FONT SIZE=2><P> </P>
<U><P>S. John Loscocco</P>
</U><P>(S. John Loscocco)</FONT></TD>
<TD WIDTH="33%" VALIGN="TOP">
<FONT SIZE=2>
<P> </P>
<P>Director</P>
</FONT></TD>
<TD WIDTH="33%" VALIGN="TOP">
<FONT SIZE=2><P> </P>
<P>____________________</FONT></TD>
</TR>
<TR><TD WIDTH="33%" VALIGN="TOP">
<FONT SIZE=2>
<U><P>Robert Riesner</P>
</U><P>(Robert Riesner)</FONT></TD>
<TD WIDTH="33%" VALIGN="TOP">
<FONT SIZE=2>
<P> </P>
<P>Secretary and Director</P>
</FONT></TD>
<TD WIDTH="33%" VALIGN="TOP">
<FONT SIZE=2><P> </P>
<P>____________________</FONT></TD>
</TR>
<TR><TD WIDTH="33%" VALIGN="TOP">
<FONT SIZE=2>
<U><P>John W. Spillane</P>
</U><P>(John W. Spillane)</FONT></TD>
<TD WIDTH="33%" VALIGN="TOP">
<FONT SIZE=2>
<P> </P>
<P>Director</P>
</FONT></TD>
<TD WIDTH="33%" VALIGN="TOP">
<FONT SIZE=2><P> </P>
<P>____________________</FONT></TD>
</TR>
<TR><TD WIDTH="33%" VALIGN="TOP">
<FONT SIZE=2>
<U><P>Raymond E. Shea, Jr.</P>
</U><P>(Raymond E. Shea, Jr.)</FONT></TD>
<TD WIDTH="33%" VALIGN="TOP">
<FONT SIZE=2>
<P> </P>
<P>Treasurer and Director</FONT></TD>
<TD WIDTH="33%" VALIGN="TOP">
<FONT SIZE=2>
<P>____________________</FONT></TD>
</TR>
</TABLE>

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