~~SECURITIES~~UNITED STATESSECURITIES AND EXCHANGE ~~COMMISSION~~ COMMISSIONWashington, D.C. 20549

~~WASHINGTON D.C. 20549~~_________________

FORM 10-Q

~~QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934~~_________________

~~For~~ þ QUARTERLY ~~the~~REPORT ~~quarter~~PURSUANT ~~ended~~TO ~~March~~SECTION ~~31,~~13 ~~2012~~OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934

~~Commission~~For ~~File~~the ~~Number~~quarterly ~~001-31238~~period ended: September 30, 2012

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

For the transition period from: ______ to ______

_________________

HYDROMER, INC.

(Exact name of registrant as specified in its charter)

~~New Jersey 22-2303576~~ _________________

(State of incorporation) (I.R.S. EmployerIdentification No.)

New Jersey	001-31238	22-2303576
(State or Other Jurisdiction	(Commission	(I.R.S. Employer
of Incorporation or Organization)	File Number)	Identification No.)

35 Industrial Pkwy, Branchburg, New Jersey ~~08876-3424~~ (Address of Principal Executive Offices) (Zip Code)

(~~Address~~908) of722-5000(Registrant’s ~~principal~~telephone ~~executive~~number, ~~offices) (Zip~~including ~~Code~~area code)

~~Registrant's~~N/A(Former ~~telephone~~name ~~number~~or former address and former fiscal year, ~~including~~if ~~area~~changed ~~code: (908)~~since ~~722-5000~~ last report)

~~Securities registered pursuant to Section 12 (b) of the Act: None~~_________________

~~Securities~~Indicate ~~registered~~by ~~pursuant~~check mark whether the registrant (1) has filed all reports required to be filed by Section 1213 or 15(gd) of the Securities Exchange Act: of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

~~Common~~Indicate ~~Stock~~by ~~Without~~check ~~Par~~mark ~~Value~~whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No o

~~(Title~~Indicate ofby ~~class)~~check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.

~~Indicate by~~Large ~~check~~accelerated ~~mark~~filer ~~whether~~o ~~the~~Accelerated ~~registrant~~filer ~~(1)~~o ~~has~~Non-accelerated ~~filed~~filer ~~all~~o ~~reports~~Smaller ~~required~~reporting tocompany be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such report(s), and (2) has been subject to such filing requirements for the past 90 days.þ

~~Yes[x]~~ Indicate Noby [check ] mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No þ

~~Indicate~~APPLICABLE byONLY ~~check~~TO ~~mark~~CORPORATE whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. [ ] Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [x] Smaller reporting companyISSUERS

Indicate bythe ~~check~~number ~~mark~~of ~~whether~~shares ~~the~~outstanding ~~registrant~~of isthe aissuer's ~~shell~~common ~~company~~stock, (as ~~defined in Rule 12b-2~~ of the ~~Exchange~~latest ~~Act). Yes~~practical ~~[ ]No [x]~~ date:

~~Class~~ Outstanding at ~~March~~September 3130, 2012 : 4,772,318

Common 4,772,318

FORWARD-LOOKING STATEMENTS

This quarterly report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements include, among other things, business strategy and expectations concerning industry conditions, market position, future operations, margins, profitability, liquidity and capital resources. Forward-looking statements generally can be identified by the use of terminology such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate” or “believe” or similar expressions or the negatives thereof. These expectations are based on management’s assumptions and current beliefs based on currently available information. Although the Company believes that the expectations reflected in such statements are reasonable, it can give no assurance that such expectations will be correct. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this quarterly report on Form 10-Q and the Company does not have any obligation to update the forward looking statements. The Company’s operations are subject to a number of uncertainties, risks and other influences, many of which are outside its control, and any one of which, or a combination of which, could cause its actual results of operations to differ materially from the forward-looking statements.

HYDROMER, INC.

INDEX TO FORM 10-Q

~~March~~September 3130, 2012

Part I - Financial Information	Page No
Item # 1 Condensed Consolidated Financial Statements
Condensed Consolidated Balance Sheets as of March 31, 2012 & June 30, 2011	3
Condensed Consolidated Statements of Operations for the three and nine months ended March 31, 2012 and 2011	4
Condensed Consolidated Statements of Cash Flows for the nine months ended March 31, 2012 and 2011	5
Notes to Condensed Consolidated Financial Statements	6
Item # 2 Management's Discussion and Analysis of Financial Condition and Results of Operations	7
Item # 3 Quantitative and Qualitative Disclosures about Market Risk	N/A
Item # 4 Controls and Procedures	9
Part II - Other Information	N/A
Item # 1 Legal Proceedings	N/A
Item # 1A Risk Factors	N/A
Item # 2 Unregistered Sales of Equity Securities and use of Proceeds	N/A
Item # 3 Defaults upon Senior Securities	N/A
Item # 4 Mine Safety Disclosures	N/A
Item # 5 Other Information	N/A
Item # 6 Exhibits	9

Page

	EXHIBIT INDEX
Part I	Financial Information
Exhibit No	Description of Exhibit
Item 1	Condensed Consolidated Financial Statements
31.1	SEC Section 302 Certification – CEO certification	10
	Condensed Consolidated Balance Sheets as of September 30, 2012 & June 30, 2012		1
31.2	SEC Section 302 Certification – CFO certification	11
	Condensed Consolidated Statements of Operations for the three months ended September 30, 2012 and 2011		2
32.1	Certification of Manfred F. Dyck, Chief Executive Officer, pursuant to 18 U.S.C. Section 1350	12
	Condensed Consolidated Statements of Cash Flows for the three months ended September 30, 2012 and 2011		3
32.2	Certification of Robert Y. Lee, Chief Financial Officer, pursuant to 18 U.S.C. Section 1350	12
	Notes to Condensed Consolidated Financial Statements		4
Item 2	Management's Discussion and Analysis of the Financial Condition and Results of Operation		5
Item 3	Quantitative and Qualitative Disclosures about Market Risk		N/A
Item 4	Controls and Procedure		6
Part II	Other Information
Item 1	Legal Proceedings		N/A
Item 1A.	Risk Factors		N/A
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds		N/A
Item 3	Defaults Upon Senior Securities		N/A
Item 4	Mine Safety Disclosure		N/A
Item 5	Other Information		N/A
Item 6	Exhibits		6
	Signatures		7

EXHIBIT INDEX

	Exhibit No.		Description
	31.1		SEC Section 302 Certification – CEO certification
	31.2		SEC Section 302 Certification – CFO certification
	32.1		Certification of Manfred F. Dyck, Chief Executive Officer, pursuant to 18 U.S.C. Section 1350
	32.2		Certification of Robert Y. Lee, Chief Financial Officer, pursuant to 18 U.S.C. Section 1350

Part I – Financial Information

Item # 1

HYDROMER, INC. and CONSOLIDATED SUBSIDIARY

HYDROMER, INC. AND CONSOLIDATED SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS

	September 30,			June 30,
	2012			2012
	unaudited
ASSETS
Current Assets:
Cash and cash equivalents	$	408,109		$	280,878
Trade Receivable less allowance for doubtful accounts of $9,809 and $5,622 as of September 30, 2012 and June 30, 2012, respectively		751,358			993,378
Inventory		366,715			309,369
Prepaid Assets		180,920			207,207
Other		9,763			3,485
Total Current Assets		1,716,865			1,794,317

Property and Equipment, net		2,641,856			2,682,221
Deferred tax asset, non-current		1,295,937			1,267,311
Intangible assets, net		752,912			761,519
Other		20,090			20,358
Total Assets	$	6,427,660		$	6,525,726

LIABILITIES & EQUITY
Current Liabilities
Accounts Payable	$	357,584		$	385,113
Accrued Expenses		376,781			342,361
Current portion of capital lease		11,752			16,499
Current portion of deferred revenue		134,172			135,323
Current portion of mortgage payable		55,899			55,899
Total Current Liabilities		936,188			935,195

Deferred Tax Liability		251,758			251,758
Long term portion of deferred revenue		138,297			145,593
Long term portion of mortgage payable		2,642,298			2,656,239
Total Liabilities		3,968,541			3,988,785

Equity
Preferred Stock - no par value, authorized 1,000,00 shares; no shares issued and outstanding
Common Stock - no par value, authorized 15,000,00 shares; 4,783,235 shares issued and 4,772,318 shares outstanding as of September 30, 2012 and June 30, 2012		3,721,815			3,721,815
Contributed capital		633,150			633,150
Accumulated deficit		(1,889,706	)		(1,811,884	)
Treasury stock, 10,917 common shares at cost		(6,140	)		(6,140	)
Total Stockholders' Equity		2,459,119			2,536,941
Total Liabilities and Stockholders' Equity	$	6,427,660		$	6,525,726

~~CONDENSED~~ See ~~CONSOLIDATED~~accompanying ~~BALANCE SHEETS~~notes

	March 31, 2012 UNAUDITED			June 30, 2011
Assets
Current Assets:
Cash and cash equivalents	$	517,359.	$		502,597.
Short-term investments		-.			50,000.
Trade receivables less allowance for doubtful accounts of $49,073 and $5,622 as of March 31, 2012 and June 30, 2011, respectively		805,457.			774,753.
Inventory		246,638.			444,604.
Prepaid expenses		206,595.			209,241.
Deferred tax asset		122,100.			122,100.
Other		12,317.			13,547.
Total Current Assets		1,910,466.			2,116,842.
Property and equipment, net		2,725,665.			2,863,912.
Deferred tax asset, non-current		1,290,531.			1,196,704.
Intangible assets, net		777,736.			820,231.
Total Assets	$	6,704,398.	$		6,997,689.
Liabilities and Stockholders’ Equity
Current Liabilities:
Accounts payable	$	398,596.	$		387,094.
Accrued expenses		341,970.			313,626.
Current portion of capital lease		12,197.			18,687.
Current portion of deferred revenue		71,625.			149,108.
Current portion of mortgage payable		54,956..			51,720.
Total Current Liabilities		879,344.			920,235.
Deferred tax liability		294,012.			294,012.
Long-term portion of capital lease		9,813.			15,398.
Long-term portion of deferred revenue		86,632.			120,940.
Long-term portion of mortgage payable		2,670,882.			2,714,817.
Total Liabilities		3,940,683.			4,065,402.
Stockholders’ Equity
Preferred stock – no par value, authorized 1,000,000 shares, no shares . issued and outstanding		-			-
Common stock – no par value, authorized 15,000,000 shares; 4,783,235 shares issued and 4,772,318 shares outstanding as of March 31, 2012 and June 30, 2011		3,721,815.			3,721,815.
Contributed capital		633,150.			633,150.
Accumulated deficit		(1,585,110)			(1,416,538)
Treasury stock, 10,917 common shares at cost		(6,140)			(6,140)
Total Stockholders’ Equity		2,763,715.			2,932,287.
Total Liabilities and Stockholders’ Equity	$	6,704,398.	$		6,997,689.

HYDROMER, INC. AND CONSOLIDATED SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)

			Three Months Ended
			September 30,
			2012	2011

Revenues
	Sales of Products		$ 596,082	$ 757,050
	Service Revenues		321,771	350,399
	Royalties and contract revenues		348,637	341,148
		Total Revenues	1,266,490	1,448,597

Expenses
	Cost of Sales		360,149	416,012
	Operating Expenses		961,468	1,105,325
	Other Expenses		50,321	51,259
	Benefit from Income Taxes		(27,626)	(37,810)
		Total Expenses	1,344,312	1,534,786

		Net Loss	$ (77,822)	$ (86,189)

	Loss Per Common Share		$ (0.02)	$ (0.02)
	Weighted Average Number of Common Shares Outstanding		4,772,318	4,772,318

See accompanying notes.

HYDROMER, INC. and CONSOLIDATED SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

		Three months Ended March 31,				Nine months Ended March 31,
		2012		2011			2012		2011
Revenues
Sale of products	$	978,612.	$	1,070,400.	$		2,479,851.	$	2,281,134.
Service revenues		317,325.		274,326.			1,038,972.		1,044,715.
Royalties and contract revenues		285,704.		206,316.			904,123.		687,210.
Total Revenues		1,581,641.		1,551,042.			4,422,946.		4,013,059.
Expenses
Cost of sales		472,783.		483,068.			1,310,914.		1,231,650.
Operating expenses		1,075,362.		1,101,305.			3,218,243.		3,378,516.
Other expenses		46,948.		58,961.			153,188.		157,523.
Benefit from income taxes		(6,155)		(34,424)			(90,827)		(243,856)
Total Expenses		1,588,938.		1,608,910.			4,591,518.		4,523,833.
Net Loss	$	(7,297)	$	(57,868)	$		(168,572)	$	(510,774)
Loss Per Common Share	$	(0.00)	$	(0.01)	$		(0.04)	$	(0.11)
Weighted Average Number of Common Shares Outstanding Common Shares Outstanding assuming dilution		4,772,318		4,772,318			4,772,318 4,772,986		4,772,318 4,772,986

See accompanying notes.

There was no impact to earnings per share from dilutive securities

as the resultant would have been anti-dilutive.

~~HYDROMER, INC. and CONSOLIDATED SUBSIDIARY~~2

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

HYDROMER, INC. AND CONSOLIDATED SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)

					Three Months Ended
					September 30,
					2012	2011
Cash Flows from Operating Activities:
	Net Loss				$ (77,822)	$ (86,189)
	Adjustments to reconcile net loss to net cash provided by (used in) operating activities
		Depreciation and Amortization			101,536	111,978
		Deferred income taxes			(28,626)	(37,810)
		Changes in Assets and Liabilities
			Trade Receivable		242,020	(40,917)
			Inventory		(57,346)	59,797
			Prepaid expenses		15,213	14,243
			Other assets		(6,010)	2,344
			Accounts payable and accrued liabilities		4,882	53,625
			Deferred income		(8,447)	(90,633)
				Net Cash Provided by (Used in) Operating Activities	185,400	(13,562)

Cash Flows from Investing Activities:
	Cash purchases of property and equipment				(15,024)	(22,273)
	Cash payments on patents and trademarks				(29,204)	(13,061)
				Net Cash Used in Investing Activities	(44,228)	(35,334)

Cash Flows from Financing Activities:
	Repayment of long-term borrowings				(13,941)	(12,997)
				Net Cash Used in Financing Activities	(13,941)	(12,997)

Net Increase (Decrease) in Cash and Cash equivalents					127,231	(61,893)

Cash and Cash equivalents, Beginning of Period					280,878	502,597
Cash and Cash equivalents, End of Period					$ 408,109	$ 440,704

(unaudited)

		Nine months Ended March 31,
		2012		2011
Cash Flows From Operating Activities:
Net Loss	$	(168,572)	$	(510,774)
Adjustments to reconcile net loss to net cash Provided by (used in) operating activities
Depreciation and amortization		321,381.		303,122.
Deferred income taxes		(93,827)		(243,856)
Changes in Assets and Liabilities:
Trade receivables		(30,704)		210,790.
Inventory		197,966.		(53,416)
Prepaid expenses		11,334.		600.
Other assets		1,230.		6,400.
Accounts payable and accrued liabilities		42,847.		71,591.
Deferred income		(111,791)		94,864.
Income taxes payable		(3,000)		(2,080)
Net Cash (Used in) Operating Activities		166,864.		(122,759)
Cash Flows From Investing Activities:
Cash purchases of property and equipment		(39,037)		(110,254)
Cash payments on patents and trademarks		(122,366)		(140,010)
Redemption of matured short-term investments		50,000.		440,000.
Net Cash (Used in) Provided by Investing Activities		(111,403)		189,736.
Cash Flows From Financing Activities:
Repayment of long-term borrowings		(40,699)		(38,526)
Net Cash (Used in) Financing Activities		(40,699)		(38,526)
Net Increase in Cash and Cash Equivalents:		14,762.		28,451.
Cash and Cash Equivalents at Beginning of Period		502,597.		843,610.
Cash and Cash Equivalents at End of Period	$	517,359.	$	872,061.

See accompanying notes.

~~HYDROMER, INC. and CONSOLIDATED SUBSIDIARY~~3

HYDROMER, INC. AND CONSOLIDATED SUBSIDIARY

Notes to Condensed Consolidated Financial Statements

Basis of Presentation:

In the opinion of management, the accompanying unaudited condensed financial statements include all adjustments (consisting of ~~only~~ only normal adjustments) necessary for a fair presentation of the results for the interim periods. These condensed financial statements, including notes, have been prepared in accordance with the applicable rules of the Securities and Exchange Commission and do not include all of the information and disclosures required by accounting principles generally accepted in the United States of America. The condensed financial statements should be read in conjunction with the consolidated financial statements and other information contained in our Annual Report on of Form 10-K for the year ended June 30, ~~2011~~2012. The condensed balance sheet at June 30, 2012 was ~~Certain~~derived ~~reclassifications~~from ~~have~~audit ~~been~~financial ~~made~~statements tobut ~~the~~does ~~previous~~not ~~year’s~~include ~~results~~all todisclosures ~~present~~required ~~comparable~~by ~~financial~~accounting principles generally accepted ~~statements~~in the United States of America.

Fair Value:

Some of the Company’s financial instruments are not measured at fair value on a recurring basis but are recorded at amounts that approximate fair value due to their liquid or short-term nature, such as cash and cash equivalents, receivables and payables. The carrying amount of the Company’s note obligation approximates its fair value, as the terms of the note are consistent with terms available in the market for instruments with similar risk.

In accordance with FASB ASC 820, “Fair Value Measurements and Disclosures”, the following table represents the Company’s fair value hierarchy for its financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2011. There were no reportable financial assets or liabilities as of March 31, 2012.

as of June 30, 2011	Level 1	Level 2	Level 3	Total
Assets
Short-Term Investments	$ 50,000			$ 50,000
Total Assets	$ 50,000	-	-	$ 50,000
Liabilities - n/a	-	-	-	-

Long-Term Debt:

As reported in the December 31, 2011 SEC Form 10-Q as a Subsequent Event, on February 21, 2012, the Company was granted a waiver on mortgage covenants not met as of December 31, 2011. The next covenant measurement date is June 30, 2012. Although a waiver was granted by the lender, there is no certainty that future waivers would be granted.

Segment Reporting:

The Company operates two primary business segments. The Company evaluates the segments by revenues, total expenses and earnings before taxes. Corporate Overhead (primarily the salaries and benefits of senior management, support services (Accounting, Legal, Human Resources and Purchasing) and other shared services (building maintenance and warehousing)) are excluded from the business segments as to not distort the contribution of each segment. These segments are the lowest levels for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities.

The ~~results~~ results for the ~~nine~~three months ended ~~March~~September 3130, by segment are:

2012
	Polymer	Medical	Corporate
Revenues	$ 3,385,796.	$ 1,037,150.		$ 4,422,946.
2012	Research	Products	Overhead	Total
Expenses	(2,648,039)	(851,299)	$ (1,183,007)	(4,682,345)
Revenues	$ 944,483	$ 322,007		$ 1,266,490
Pre-tax Income (Loss)	$ 737,757.	$ 185,851.	$ (1,183,007)	$ (259,399)
Expenses	(777,871)	(221,024)	$ (373,043)	(1,371,938)
Pre-tax Income (Loss)	$ 166,612	$ 100,983	$ (373,043)	$ (105,448)
2011
Revenues	$ 1,092,324	$ 356,273		$ 1,448,597
Expenses	(885,546)	(286,360)	$ (400,690)	(1,572,596)
Pre-tax Income (Loss)	$ 206,778	$ 69,913	$ (400,690)	$ (123,999)

2011
Revenues	$ 3,027,098.	$ 985,961.		$ 4,013,059.
Expenses	(2,668,485)	(878,866)	$ (1,220,338)	(4,767,689)
Pre-tax Income (Loss)	$ 358,613.	$ 107,095.	$ (1,220,338)	$ (754,630)

Geographic revenues were as follows for the three months ended September 30

Geographic revenues were as follows for the nine months ended March 31,

	2012	2011
Domestic	68%	66%
Foreign	32%	34%

	2012	2011
Domestic	64%	59%
Foreign	36%	41%

Inventory:

Item #2

Inventory consists of:		September 30, 2012	June 30, 2012
		September 30, 2012	June 30, 2012
	Finished goods	127,137	$ 132,673
	Work in process	709	6,156
	Raw materials	238,869	170,540

		$ 366,715	$ 309,369

Subsequent Events:

As reported in the June 30, 2012 10-K, the Company was granted a waiver on mortgage covenants not met as of June 30, 2012. The next covenant measurement date is June 30, 2013. Although a waiver was granted by the lender, there is no certainty that future waivers would be granted.

Item 2

MANAGEMENT’S DISCUSSION AND ANALYSIS OF THE

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Results of Operations:

The Company’s revenues for the quarter ended ~~March~~September 3130, 2012 were $1,~~581~~266,~~641~~490, lower by $30182,~~599~~107 or 212.06% ~~higher~~ than the $1,~~551~~448,~~042 for~~597for the same period the previous year. ~~For the nine month period ended March 31, revenues were $4,422,946 during the current fiscal year, as compared with $4,013,059 the year before or $409,887 better (10.2%).~~ Revenues are comprised of the sale of Products and Services and Royalty and Contract payments.

Product sales were $~~978~~596,~~612~~082 for the quarter ended ~~March~~September 3130, 2012 as compared to $1757,~~070,400~~050 for the same period the year before, alower by $91160,~~788~~ 968 (821.63%) ~~decrease.~~primarily ~~Revenues~~due ~~for~~to the ~~quarter~~timing ~~ended~~of ~~March~~periodic ~~31,~~(not ~~2011~~monthly) ~~included stronger~~ sales. inOur ~~Europe~~recently ~~from~~introduced ~~our~~Dragonhyde® DUST ~~T-HEXX~~dissolvable ~~Animal~~hoof ~~Health~~ bath ~~launch~~powder ofhas ~~our~~been ~~Dragonhyde®~~met ~~Hoof~~with ~~Bath~~extreme ~~Concentrate.~~interest ~~For~~at the ~~nine~~World ~~month~~Dairy ~~period,~~Expo ~~product~~and ~~sales~~EuroTier ~~were $2,479,851~~(agricultural ~~for~~tradeshows) ~~the~~in ~~2012~~Madison, ~~year~~WI asin ~~compared~~October ~~with~~2012 ~~$2,281,134~~and ~~for~~in ~~the~~Germany ~~2011~~in ~~year~~November 2012, ~~higher~~respectively. byWe ~~$198,717~~expect ~~(8.7%),~~revenue ~~due~~increases toover ~~increased~~the next ~~demand~~few inmonths from the ~~T-HEXX Animal~~staggered ~~Health~~regional ~~line~~global roll out.

Services revenues, comprising of contract coating services, for the three months ended ~~March~~September 3130, 2012 ~~were~~was $~~317~~321,~~325~~771 or $4228,~~999~~628 ~~better~~ (158.72%) lower than the $~~274~~350,~~326~~399 the corresponding period the year before. ~~Timing~~While ~~delays~~we ~~reduced~~expect ~~the~~a ~~service~~gradual ~~revenues~~decrease ~~for~~in ~~the~~Contract ~~prior~~Services ~~year period.~~revenues ~~For~~as ~~the~~customers ~~nine~~convert ~~month~~over ~~periods~~to ~~ended~~become ~~March~~medical ~~31,~~chemical ~~2012~~polymer ~~and~~purchasers ~~2011,~~(for ~~services~~coating ~~revenues~~applications ~~were~~themselves ~~$1,038,972~~or ~~and~~via ~~$1,044,715,~~a ~~respectively,~~third ~~or $5~~party),~~743~~ ~~lower~~we ~~(0.5%).~~have ~~Revenues~~gained ~~from~~ new ~~agreements/~~customers ~~this~~to ~~fiscal~~partially ~~year~~ replace/offset the ~~customers~~conversion ~~transitioning~~of coating services revenues to ~~customers~~product ofsales. ~~our~~These ~~medical~~“converted” ~~chemical~~customers ~~polymer~~can also allow for additional revenues from Supply and Support Agreements (~~product~~see ~~sales)~~Royalty and Contract revenues following) and/or ~~customers~~purchase noof ~~longer~~our incoating ~~the~~equipment ~~market~~(included as Product sales).

~~Classified as~~ Royalty and Contract revenues ~~are~~include royalties received and the periodic recurring payments from license, stand still and other ~~agreements~~ agreements other than for product and services. ~~Also~~Included ~~included~~ in Royalty and Contract revenues are revenues from support and supply ~~agreements~~ agreements which avails our customers to continued technical support and/or guaranteed access to our proprietary coatings and may include the transfer of technical know-how (coatings procedures). Some of the royalties and support fees are based on the net sales of the final item (to which the Hydromer technology is applied to) and are subject to the reporting of our customers. For the ~~nine months~~ quarter ended ~~March~~September 3130, 2012, Royalty and Contract revenues were $~~904~~348,~~123~~637, compared to $~~687~~341,~~210~~148 the same period a year ago~~, an increase of $216,913 (31~~.~~6%). In this year’s results was $120,000 in new technology know-how transfers plus new payments coming online arising from agreements the year(s) prior.~~

Total Expenses for the quarter ended ~~March~~September 3130, 2012 were $1,~~588~~344,~~938~~312 as compared with $1,~~608~~534,~~910~~786 the year before, a ~~1.2%~~reduction ~~decrease. For~~of ~~the nine months ended March 31, 2012, Total Expenses were~~ $4190,~~591,518~~474 asor ~~compared with $4,523,833 the previous year, higher by 1~~12.54%.

For the quarter ended ~~March~~September 3130, 2012, the Company’s Cost of Goods Sold was $~~472~~360,~~783~~149 as compared with $~~483~~416,~~068~~012 the year prior, lower by $1055,~~285~~863 or 213.14%. ~~Despite~~Lower ~~8.6% in lower~~ product sales ~~this~~during the current quarter, aincluding ~~change~~that inof ~~product mix plus~~ lower ~~pricing~~margin ~~resulted~~products, accounted infor ~~only a 2.1% lower Cost of Sales. For~~ the ~~nine~~decrease ~~month~~in ~~period ended March 31, 2012,~~ Cost of Goods Sold ~~was $1,310,914 as compared with $1,231,650 the same period a year ago~~. ~~The $79,264 increase (6.4%) was due to higher product sales offset by lower manufacturing labor costs.~~

Operating expenses were $1961,~~075,362~~468 for the quarter ended ~~March~~September 3130, 2012 as compared with $1,~~101~~105,~~305~~325 the year before, lower by $25143,~~943 or~~857 2or 13.40%, ~~due to lower Sales & Marketing expenditures this year (tradeshows, travel, advertising). For~~ the ~~nine~~savings ~~months~~primarily ~~ended~~coming ~~March 31,~~from ~~2012,~~a ~~Operating~~lower ~~expenses~~staffing ~~were $3~~level,~~218,243~~ orincluding ~~$160,273~~in ~~lower~~part ~~(4.7%)~~due ~~than~~to the ~~previous~~a ~~year’s~~re-strategization ~~$3,378,516.~~of ~~In addition to~~marketing ~~lower~~and ~~Sales~~sales ~~& Marketing expenditures~~efforts, and lower ~~staffing~~marketing ~~levels~~expenses ~~and~~from ~~utilities~~less ~~usage~~travel ~~attributed~~and totradeshow ~~the~~exhibitions ~~improvement~~this year.

Interest expense, ~~foreign currency exchange gains/losses,~~ interest income and other income are included in Other Expenses. Interest expense (primarily mortgage interest) for the three ~~nine~~ months ended ~~March~~September 3130, 2012 and ~~March~~September 3130, 2011 were $~~146~~49,~~326~~414 and $~~149~~50,~~037~~652, respectively.

A net loss of $777,~~297~~822 ($0.0002 per share) is reported for the quarter ended ~~March~~September 3130, 2012 as compared to a net loss of $5786,~~868 ($0.01~~189 ~~per share) the year before. A net loss of $168,572~~ ($0.0402 per share) ~~is reported for~~ the ~~nine months ended March 31, 2012 as compared to a net loss of $510,774 ($0.11 per share) the~~ year before.

~~Revenue~~Though ~~growth~~we saw a temporary revenue drop of $~~409~~182,~~887~~107 ~~(primarily~~this ~~from~~quarter ~~our~~when ~~T-HEXX~~compared ~~Animal~~with ~~Health~~the ~~division~~corresponding ~~and~~quarter ~~from~~a ~~the~~year ~~Royalties~~ago ~~and~~(primarily ~~contract~~from higher non-monthly revenues ~~line~~in the prior year’s period), ~~and~~we reduced ~~Operating~~ ~~Expenses~~operating ~~(lower~~expenses ~~staffing~~by $143,857 ~~reduced~~between ~~sales~~the ~~and~~quarters, much ~~marketing~~of ~~expenses~~that asexpense ~~well~~reduction asbeing ~~lower~~permanent ~~utilities~~(not ~~costs) offset~~based byon ~~$79~~timing),~~264 in~~ ~~higher~~and ~~Cost~~thus ofwill ~~Sales~~be ~~and~~continued ain ~~reduced~~subsequent ~~Income~~periods. ~~Tax~~We ~~Benefit~~expect continued ofimprovements ~~$153,029~~to ~~resulted~~revenues in(from ~~the~~new ~~$342,202~~products ~~improvement~~and toagreements ~~the~~and ~~bottom~~from ~~line. Management~~acquiring ~~expects~~additional ~~this~~market ~~continued~~share ~~course~~on ofexisting ~~revenue~~products) with ~~growth~~expenses ~~with~~held ~~only~~stable ~~minimal~~to ~~expense~~result ~~changes~~in toa bereturn ~~the~~to ~~trend~~profitability.

For the nine months ended March 31, 2012, EBITDA of $58,982 is reported, compared with -$451,508 for the nine months ended March 31, 2011; the difference attributed to the revenue growth and lower Operating Expenses.5

Financial Condition:

~~Working~~The working capital ~~decreased~~position as of September 30, 2012 was $~~165~~780,~~485~~677 ~~during~~as ~~the~~compared ~~nine~~with ~~months~~$859,122 ~~ended~~as ~~March~~of 31June 30, 2012 or a decrease of $78,445 during the three month period.

~~For~~ For the ~~nine~~three months ended ~~March~~September 3130, 2012, operating activities provided $185,400 in net cash. The net collections of trade receivables ($~~166~~242,~~864~~020) less the increase in inventories ($57,346) were the primary attributors to the cash provided by operating activities. The decrease to working capital for the quarter was primarily due to the net of the collections of trade receivables and cash used during the quarter.

~~For~~Investing ~~the~~activities ~~nine~~used ~~months ended March 31, 2012, cash provided by Operations (net loss as adjusted for non-cash expenses) was~~ $5844,~~982~~228 ~~with the net change in operating assets~~ and ~~liabilities~~financing ~~providing~~activities anused ~~additional~~ $~~107~~13,~~882,~~941 ~~primarily~~during ~~from~~ the ~~reduction~~three ofmonths ~~inventory levels~~ended ~~previously~~September ~~built~~30, ~~up from volume purchases~~2012.

Investing activities ~~used~~for the three months ended September 30, 2012 included $~~111~~15,~~403~~024 infor ~~cash~~capital expenditures and ~~financing~~$29,204 ~~activities~~towards ~~used~~the anCompany’s patent ~~additional~~estate. ~~$40,699~~Reported ~~during~~under Financing activities was the ~~nine~~repayment ~~months~~of ~~ended~~the ~~March~~principal ~~31,~~portion ~~2012~~of the mortgage.

~~Investing~~Depreciation ~~activities~~and ~~for~~amortization of property, plant and equipment and of the ~~nine~~intangibles ~~months~~less ~~ended~~the ~~March~~income ~~31,~~tax ~~2012~~benefit ~~included~~(deferred ~~$39,037~~income ~~for~~tax) ~~capital~~(both non-cash ~~expenditures,~~items) aggregated $~~122~~73,~~366~~910 ~~towards~~leading ~~the~~to ~~Company’s patent~~a ~~estate~~EBITDA ~~and~~for the ~~redemption~~quarter ofended ~~matured~~September ~~short-term~~30, ~~investments~~2012 of $5045,~~000~~502. ~~Capital~~With ~~expenditures~~a ~~were~~reduced ~~lower this fiscal year-to-date~~operating ~~than~~expense asbase ~~compared~~plus ~~with~~projected ~~the~~revenue ~~corresponding~~increases, ~~period~~we aexpect ~~year~~to ~~ago~~overcome as the ~~previous~~two ~~year~~significant ~~included~~2009 ~~new~~events ~~production~~(the ~~equipment~~significant ~~for~~supply ~~the growing~~& ~~T-HEXX~~support ~~division,~~agreement ~~including~~cancellation ~~for~~and ~~new~~sales ~~products.~~of ~~Reported~~medical ~~under~~device ~~Financing~~product ~~activities~~lines) ~~was~~to ~~the~~result ~~repayment~~in ofa ~~the~~return ~~principal~~to ~~portion of the mortgage~~profitability.

~~The~~Item Company has made significant inroads towards a return to profitability since the cancellation and subsequent replacement of a significant supply & support agreement which impacted both revenues and cash by $780,000 annually and the sale of various medical device product lines in 2009. The Company has previously overcome the lost profit contributions from the sales of product lines. With continued revenue growth and expenditure control, we expect profitability to be near-term as we previously reported.4

~~Item~~Disclosure #Controls 4and Procedures:

Disclosure Controls and Procedures

As of the period covered by this report, the Company carried out an evaluation, under the supervision and with the participation of our management, including the Chief Executive Officer and President and the Chief Financial Officer, of the effectiveness of the design and operation of the disclosure controls and procedures.

Based upon this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, our disclosure controls and procedures were effective and that there were no changes to our Company’s internal control over financial reporting that have materially affected, or is reasonably likely to materially affect the Company’s internal control over financial reporting during the period covered by the Company’s quarterly report.

PART II – Other Information

The Company operates entirely from its sole location at 35 Industrial Parkway in Branchburg, New Jersey, an owned facility secured by a mortgage through a bank.

The existing facility will be adequate for the Company’s operations for the foreseeable future.

Item # 6

Exhibits

Exhibit No. Description

	Exhibit No.		Description
	31.1		13a-14(a) Certification of Chief Executive Officer and President
	31.2		13a-14(a) Certification of Vice President of Finance and Chief Financial Officer
	32.1		Section 1350 Certification of Chief Executive Officer and Chairman, President
	32.2		Section 1350 Certification of Chief Financial Officer and Vice President of Finance

~~31.1 Rule~~Pursuant ~~13a-~~to the Securities and Exchange November 14, 2012 Order (aRelease No. 68224), ~~Certification~~the registrant has been allowed an extended filing due date of ~~Chief~~this ~~Executive~~Form ~~Officer~~10-Q ~~and~~until ~~President~~November 21, 2012.

~~31.2 Rule~~Hurricane ~~13a~~Sandy and its aftermath impacted the registrant, its bank and independent accountants from timely completion of its required tasks to allow for the registrant to complete its June 30, 2012 Form 10-14K (awaiver of loan covenants) ~~Certification~~earlier, ofas ~~Vice~~well ~~President~~as ofits ~~Finance~~September 30, ~~and~~2012 ~~Chief~~Form ~~Financial~~10-Q. ~~Officer~~Accordingly, in good faith, the registrant requires the extended due date under the SEC Order.

~~32.1 Section 1350 Certification of Chief Executive Officer and Chairman, President~~6

32.2 Section 1350 Certification of Chief Financial Officer and Vice President of Finance

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on his behalf by the undersigned thereunto duly authorized.

HYDROMER, INC.

Date: November 26, 2012	Hydromer, Inc.
	By: /s/ Robert Y. Lee, VP
	Robert Y. Lee Principal Accounting Officer & Chief Financial Officer

By: /s/ Robert Y. Lee,VP

Robert Y. Lee

Principal Accounting Officer & Chief Financial Officer

DATE: May 15, 2012

Filing Compare · HYDROMER INC