UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

_________________

FORM 10-Q

_________________

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

For the quarterly period ended: ~~September~~December 3031, 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	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~~ Jersey 08876-3424 (Address of Principal Executive Offices) (Zip Code)

(908) 722-5000
(Registrant’s telephone number, including area code)

N/A
(Former name or former address and former fiscal year, if changed since last report)

_________________

Indicate by check mark whether the registrant (1) has filed all reports required to 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 reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark 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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.

Large accelerated filer o

Accelerated filer o

Non-accelerated filer o

Smaller reporting company þ

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

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of the issuer's common stock, as of the latest practical date: As of December 31, 2012 There were 4,772,318 shares outstanding

Outstanding at September 30, 2012 : 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.

	HYDROMER, INC.

	INDEX TO FORM 10-Q
	December 31, 2012


		Page No.
Part I - Financial Information

	Item 1 Condensed Consolidated Financial Statements

	Condensed Consolidated Balance Sheets
	as of December 31, 2012 & June 30, 2012

	Condensed Consolidated Statements of Operations
	for the three and six months ended December 31, 2012 and 2011

	Condensed Consolidated Statements of Cash Flows
	for the six months ended December 31, 2012 and 2011

	Notes to Condensed Consolidated Financial Statements

	Item 2 Management's Discussion and Analysis of Financial Condition
	and Results of Operations	1

	Item 3 Quantitative and Qualitative Disclosures about Market Risk	N/A

	Item 4 Controls and Procedures	4

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 Disclosures	N/A
	Item 5 Other Information	N/A
	Item 6 Exhibits	4
	Signatures	5

INDEX TO FORM 10-Q


	EXHIBIT INDEX

Exhibit No.	Description of Exhibit
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

September 30, 2012

Page

Part I	Financial Information
Item 1	Condensed Consolidated Financial Statements
	Condensed Consolidated Balance Sheets as of September 30, 2012 & June 30, 2012	1
	Condensed Consolidated Statements of Operations for the three months ended September 30, 2012 and 2011	2
	Condensed Consolidated Statements of Cash Flows for the three months ended September 30, 2012 and 2011	3
	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 Condensed Consolidated Financial StatementsFONT

HYDROMER, INC. AND CONSOLIDATED SUBSIDIARY
HYDROMER, INC. and CONSOLIDATED SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
		September 30,				June 30,
		December 31,2012			June 30,2012
		2012				2012
		(unaudited)
		unaudited
ASSETS
ASSETS
Current Assets:
Current Assets:
Cash and cash equivalents	$	294,842		$	280,878
Cash and cash equivalents		$	408,109			$	280,878
Trade Receivables less allowance for doubtful accounts of $7,255 and $5,622 as of December 31, 2012 and June 30, 2012, respectively		814,224			993,378
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		346,331			309,369
Inventory			366,715				309,369
Prepaid Assets		170,472			207,207
Prepaid Assets			180,920				207,207
Other		117,603			3,485
Other			9,763				3,485
Total Current Assets		1,743,472			1,794,317
Total Current Assets			1,716,865				1,794,317
Property and Equipment, net		2,601,900			2,682,221
Property and Equipment, net			2,641,856				2,682,221
Deferred tax asset, non-current		1,274,859			1,267,311
Deferred tax asset, non-current			1,295,937				1,267,311
Intangible assets, net		746,917			761,519
Intangible assets, net			752,912				761,519
Other		49,107			20,358
Other			20,090				20,358
Total Assets	$	6,416,255		$	6,525,726
Total Assets		$	6,427,660			$	6,525,726
LIABILITIES & STOCKHOLDERS' EQUITY
LIABILITIES & EQUITY
Accounts Payable	$	497,224		$	385,113
Current Liabilities
Accrued Expenses		237,626			342,361
Accounts Payable		$	357,584			$	385,113
Current portion of capital lease		5,887			16,499
Accrued Expenses			376,781				342,361
Current portion of deferred revenue		126,399			135,323
Current portion of capital lease			11,752				16,499
Current portion of mortgage payable		57,855			55,899
Current portion of deferred revenue			134,172				135,323
Total Current Liabilities		924,991			935,195
Current portion of mortgage payable			55,899				55,899
Deferred Tax Liability		251,758			251,758
Total Current Liabilities			936,188				935,195
Long term portion of deferred revenue		121,359			145,593
Deferred Tax Liability			251,758				251,758
Long term portion of mortgage payable		2,625,655			2,656,239
Long term portion of deferred revenue			138,297				145,593
Total Liabilities		3,923,763			3,988,785
Long term portion of mortgage payable			2,642,298				2,656,239
Stockholders' Equity
Total Liabilities			3,968,541				3,988,785
Preferred Stock - no par value, authorized 1,000,00 shares; no shares issued and outstanding		—			—
Equity
Common Stock - no par value, authorized 15,000,00 shares; 4,783,235 shares issued and 4,772,318 shares outstanding as of December 31, 2012 and June 30, 2012		3,721,815			3,721,815
Preferred Stock - no par value, authorized 1,000,00 shares; no shares issued and outstanding
Contributed capital		633,150			633,150
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
Accumulated deficit		(1,856,333	)		(1,811,884	)
Contributed capital			633,150				633,150
Treasury stock, 10,917 common shares at cost		(6,140	)		(6,140	)
Accumulated deficit			(1,889,706	)			(1,811,884	)
Total Stockholders' Equity		2,492,492			2,536,941
Treasury stock, 10,917 common shares at cost			(6,140	)			(6,140	)
Total Liabilities and Stockholders' Equity	$	6,416,255		$	6,525,726
Total Stockholders' Equity			2,459,119				2,536,941
Total Liabilities and Stockholders' Equity		$	6,427,660			$	6,525,726

See accompanying notes

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

	Three Months Ended						Six Months Ended
	December 31,						December 31,
	2012			2011			2012			2011

Revenues
Sales of Products	$	681,321		$	744,189		$	1,277,403		$	1,501,239
Service Revenues		335,167			371,248			656,938			721,647
Royalties and contract revenues		315,140			277,271			663,777			618,419
Total Revenues		1,331,628			1,392,708			2,598,118			2,841,305

Expenses
Cost of Sales		405,097			422,119			765,246			838,131
Operating Expenses		938,745			1,037,556			1,900,213			2,142,881
Other (Income) Expenses		(67,665	)		54,981			(17,344	)		106,240
Provision for (Benefit from) Income Taxes		22,078			(46,862	)		(5,548	)		(84,672	)
Total Expenses		1,298,255			1,467,794			2,642,567			3,002,580

Net Income (Loss)	$	33,373		$	(75,086	)	$	(44,449	)	$	(161,275	)

Income (Loss) Per Common Share	$	0.01		$	(0.02	)	$	(0.01	)	$	(0.03	)
Weighted Average Number of
Common Shares Outstanding		4,772,318			4,772,318			4,772,318			4,772,318

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.

There was no impact to earnings per share from dilutive securities

as the ~~resultant~~result would have been anti-dilutive.

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

	Six Months Ended
	December 31,
	2012			2011
Cash Flows from Operating Activities:
Net Loss	$	(44,449	)	$	(161,275	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities
Depreciation and Amortization		197,967			209,654
Deferred income taxes		(7,548	)		(86,672	)
Changes in Assets and Liabilities
Trade receivables		179,154			(42,490	)
Inventory		(36,962	)		135,578
Prepaid expenses		9,884			44,669
Other assets		(142,867	)		7,305
Accounts payable and accrued liabilities		9,215			(73,545	)
Deferred income		(33,158	)		(106,291	)
Income taxes payable		(2,000	)		(2,000	)
Net Cash Provided by (Used in) Operating Activities		153,236			(75,067	)

Cash Flows from Investing Activities:
Cash purchases of property and equipment		(28,667	)		(31,880	)
Cash payments on patents and trademarks		(81,977	)		(57,756	)
Redemption of matured short-term investments		0			50,000
Net Cash Used in Investing Activities		(110,644	)		(39,636	)

Cash Flows from Financing Activities:
Repayment of long-term borrowings		(28,628	)		(26,733	)
Net Cash Used in Financing Activities		(28,628	)		(26,733	)

Net Increase (Decrease) in Cash and Cash equivalents		13,964			(141,436	)

Cash and Cash equivalents, Beginning of Period		280,878			502,597
Cash and Cash equivalents, End of Period	$	294,842		$	361,161

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

See accompanying notes.

3HYDROMER, INC. and CONSOLIDATED SUBSIDIARY

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 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 ofon Form 10-K for the year ended June 30, 2012. The condensed balance sheet at June 30, 2012 was derived from ~~audit~~audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America.

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 ~~three~~six months ended ~~September~~December 3031, by segment are:

	~~Polymer~~	~~Medical~~	~~Corporate~~	Polymer			Medical			Corporate
2012	~~Research~~	~~Products~~	~~Overhead~~	~~Total~~Research			Products			Overhead			Total
Revenues	~~$ 944,483~~	~~$ 322,007~~	$	$ 1,~~266~~944,~~490~~602		$	653,516					$	2,598,118
Expenses	~~(777,871)~~	~~(221,024)~~	~~$ (373,043)~~	(1,~~371~~348,~~938)~~090	)		(572,066	)	$	(727,959	)		(2,648,115	)
Pre-tax Income (Loss)	~~$ 166,612~~	~~$ 100,983~~	$ ~~(373,043)~~	~~$ (105~~596,~~448)~~512		$	81,450		$	(727,959	)	$	(49,997	)
2011
Revenues	~~$ 1,092,324~~	~~$ 356,273~~	$	~~$ 1~~2,~~448~~177,~~597~~765		$	663,540					$	2,841,305
Expenses	~~(885,546)~~	~~(286,360)~~	~~$ (400,690)~~	(1,~~572~~764,~~596)~~113	)		(526,722	)	$	(796,417	)		(3,087,252	)
Pre-tax Income (Loss)	~~$ 206,778~~	~~$ 69,913~~	$ ~~(400,690)~~	~~$ (123~~413,~~999)~~652		$	136,818		$	(796,417	)	$	(245,947	)

Geographic revenues were as follows for the ~~three~~six months ended ~~September~~December 3031,

	~~2012~~	~~2011~~	2012			2011
~~Domestic~~	~~68%~~Domestic	~~66%~~		72	%		63	%
~~Foreign~~	~~32%~~Foreign	~~34%~~		28	%		37	%

Inventory:

Inventory consists of:		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

Inventory consists of:

Subsequent Events:

	December 31, 2012	June 30, 2012
Finished goods	$ 179,046	$ 132,673
Work in process	2,232	6,156
Raw materials	165,053	170,540
	$ 346,331	$ 309,369

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.1

4ITEM 2 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

~~Item~~Results 2of Operations

~~MANAGEMENT~~The Company’Ss revenues for the quarter ended December 31, 2012 were $1,331,628, $61,080 or 4.4% lower than the $1,392,708 for ~~DISCUSSION~~the ~~AND~~same ~~ANALYSIS~~period OFthe ~~THE~~previous year. For the six month period ended December 31, revenues were $2,598,118 during the current fiscal year, as compared with $2,841,305 the year before or $243,187 lower (8.6%). Revenues are comprised of the sale of Products and Services and Royalty and Contract payments.

~~FINANCIAL~~Product ~~CONDITION~~sales ~~AND~~were ~~RESULTS~~$681,321 OFfor ~~OPERATIONS~~the quarter ended December 31, 2012 as compared to $744,189 for the same period the year before, a $62,868 (8.5%) decrease primarily due to the timing of periodic (non-monthly) sales and the drop off in T-HEXX Dragonhyde Hoof Bath Concentrate sales in Europe due to the high landed cost the end user is facing. Our recently launched Dragonhyde DUST dissolvable hoof bath powder being released to Europe in 2013 should alleviate that issue. (The recommended usage of Dragonhyde DUST, which can be shipped by regular mail, is a 1 kg pouch as compared with one gallon of Dragonhyde Hoof Bath Concentrate (which weighs approximately 4 kg) which needs special handling.) The majority of the customers that ordered on a periodic basis during the 2011 period also ordered in our fiscal quarter ended June 30, 2012 which meant that their new orders are expected in early 2013. Such sales decrease was offset by an increased demand for our anti-fog condensation control coatings, Cosmetics / Personal Care intermediaries and medical device coatings. For the six month period, product sales were $1,277,403 for the 2012 period as compared with $1,501,239 for the 2011 period, lower by $223,836 (14.9%), all attributable to the T-HEXX Animal Health line.

~~Results~~Services revenues, comprised of ~~Operations:~~contract coating services, for the three months ended December 31, 2011 were $335,167 or $36,081 lower (9.7%) than the $371,248 the corresponding period the year before. For the six month periods ended December 31, 2012 and December 31, 2011, services revenues were $656,938 and $721,647, respectively, or $64,709 lower (9.0%). Customers exiting their respective business on products utilizing our contract coating services plus those converting to their own coating application while becoming a medical chemical polymer purchaser lowered the services revenues as compared with the prior period. These “converted” customers allow for additional revenues from medical device coating [product] sales (as reported above) and Supply and Support Agreements (see Royalty and Contract revenues following).

~~The~~Classified ~~Company’s~~as Royalty and Contract revenues ~~for~~are royalties received and the ~~quarter~~periodic ~~ended~~recurring ~~September~~payments 30from license, ~~2012~~stand ~~were~~still ~~$1,266,490,~~and ~~lower~~other agreements byother ~~$182~~than for product and services,~~107~~ including revenues from support and supply agreements (which avails our customers to continued technical support and/or ~~12.6%~~guaranteed ~~than~~access to our proprietary coatings) and may include the ~~$1,448,597for~~transfer of technical ~~the~~know-how ~~same~~(coatings ~~period~~procedures). Some of the ~~previous~~royalties ~~year.~~and ~~Revenues~~support fees are ~~comprised~~based ofon the ~~sale~~net sales of ~~Products~~the ~~and~~final ~~Services~~item (to which the Hydromer technology is applied) and are subject to the reporting of our customers. For the six months ended December 31, 2012, Royalty and Contract ~~payments~~revenues were $663,777, compared to $618,419 the same period a year ago, an increase of $45,358 (7.3%), a result of a new customer converting to Hydromer coatings under a royalty agreement.

Product sales were $596,082 for the quarter ended September 30, 2012 as compared to $757,050 for the same period the year before, lower by $160,968 (21.3%) primarily due to the timing of periodic (not monthly) sales. Our recently introduced Dragonhyde® DUST dissolvable hoof bath powder has been met with extreme interest at the World Dairy Expo and EuroTier (agricultural tradeshows) in Madison, WI in October 2012 and in Germany in November 2012, respectively. We expect revenue increases over the next few months from the staggered regional global roll out.2

~~Services~~Total ~~revenues,~~Expenses ~~comprising of contract coating services,~~ for the ~~three~~quarter ~~months~~ ended ~~September~~December 3031, 2012 ~~was~~were $~~321~~1,~~771 or $28~~298,~~628~~255 ~~(8.2%) lower~~as ~~than~~compared ~~the~~with $~~350~~1,~~399~~467,794 the ~~corresponding period the~~ year before., ~~While we expect~~ a ~~gradual~~11.6% decrease ~~in Contract Services revenues~~. asFor ~~customers~~the ~~convert~~six ~~over~~months toended ~~become~~December ~~medical~~31, ~~chemical~~2012, ~~polymer~~Total ~~purchasers~~Expenses ~~(for~~were ~~coating~~$2,642,567 ~~applications~~as ~~themselves~~compared orwith ~~via a third party)~~$3, we002,580 ~~have gained new customers to partially replace/offset~~ the ~~conversion~~previous ofyear, ~~coating~~a ~~services revenues to product sales~~12. ~~These “converted”~~0% ~~customers can also allow for additional revenues from Supply and Support Agreements (see Royalty and Contract revenues following) and/or purchase of our coating equipment (included as Product sales)~~decrease.

~~Royalty~~Reducing ~~and~~Total ~~Contract~~Expenses ~~revenues~~and ~~include~~included ~~royalties~~in ~~received~~Other ~~and~~Income for the ~~periodic~~quarter ~~recurring~~ended ~~payments~~December ~~from license~~31, ~~stand~~2012 ~~still~~was ~~and~~$115,344 ~~other agreements other than for product and services. Included~~ in ~~Royalty~~income ~~and~~recognized Contract revenues are revenues from support and supply 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~~proceeds ~~the~~from ~~final item (to which~~ the ~~Hydromer~~Company’s ~~technology~~insurance iscarrier, ~~applied~~a ~~to)~~mutual ~~and~~company ~~are~~having ~~subject~~no toshareholders, ~~the~~making ~~reporting~~distributions offrom ~~our~~it ~~customers.~~being ~~For the quarter~~acquired. ~~ended~~There ~~September~~will ~~30,~~be ~~2012,~~additional ~~Royalty~~periodic ~~and~~payments ~~Contract~~which ~~revenues were $348,637, compared to $341,148~~ the ~~same~~Company ~~period~~will ainclude ~~year~~in ~~ago~~Other Income.

~~Total~~ ~~Expenses~~For ~~for~~ the quarter ended ~~September~~December 3031, 2012, ~~were~~the Company’s Cost of Goods Sold was $1405,~~344,312~~097 as compared with $1422,~~534,786~~119 the year ~~before~~prior, lower by $17,022 or 4.0%, a ~~reduction~~result of the lower product sales. For the six month period ended December 31, 2012, Cost of Goods Sold was $~~190~~765,~~474~~246 oras 12compared with $838,131 the same period a year ago.4 The $72,885 decrease (8.7%) was due to lower product sales.

~~For~~Operating ~~the~~Expenses ~~quarter~~were ~~ended September 30~~$938,745 ~~2012,~~for the ~~Company’s~~quarter ~~Cost~~ended ofDecember ~~Goods Sold was $360~~31,~~149~~ 2012 as compared ~~with~~to $~~416~~1,~~012~~037,556 the year ~~prior~~before, lower by $5598,~~863~~811 or 13 9.45%., ~~Lower~~due ~~product~~to ~~sales~~lower ~~during~~staffing levels this year. For the ~~current~~six ~~quarter,~~months ~~including~~ended ~~that~~December of31, ~~lower~~2012, ~~margin~~Operating ~~products~~Expenses were $1,900,213 ~~accounted~~or ~~for~~$242,668 lower (11.3%) than the ~~decrease~~previous inyear’s ~~Cost~~$2,142,881, ofprimarily ~~Goods~~due ~~Sold~~to operating on a lower staffing level.

~~Operating~~In ~~expenses~~addition ~~were~~to ~~$961,468 for~~ the ~~quarter~~one ~~ended~~time ~~September 30~~$115,344 ~~2012~~distribution recognized as ~~compared with $1~~income,~~105,325~~ ~~the~~Other ~~year~~Income ~~before,~~/ ~~lower~~Expenses byincludes ~~$143,857 or~~interest ~~13.0%~~expense, ~~the~~foreign currency ~~savings~~exchange ~~primarily~~gains/losses ~~coming~~and ~~from~~interest aincome. ~~lower~~Interest ~~staffing~~expense ~~level,~~(primarily ~~including~~mortgage ininterest) ~~part~~for ~~due to~~ the asix ~~re-strategization~~months ofended ~~marketing~~December ~~and sales efforts~~31, 2012 and ~~lower~~December ~~marketing~~31, ~~expenses~~2011 ~~from~~was ~~less~~$97,201 ~~travel~~ and ~~tradeshow~~$98,743, ~~exhibitions this year~~respectively.

~~Interest~~Net ~~expense~~income of $33,373 ~~interest~~($0.01 ~~income~~per ~~and~~share) ~~other~~is ~~income~~reported ~~are~~for ~~included~~the inquarter ~~Other~~ended ~~Expenses.~~December ~~Interest~~31, ~~expense~~2012 ~~(primarily~~as ~~mortgage~~compared ~~interest~~to a net loss of $75,086 ($0.02 per share) ~~for~~the year before. For the ~~three~~ six months ended ~~September~~December 3031, 2012, ~~and~~a ~~September~~net ~~30,~~loss ~~2011~~of ~~were~~ $4944,~~414~~449 ~~and~~($0.01 per share) is reported as compared to a net loss of $50161,~~652,~~275 ~~respectively~~($0.03 per share) the year before.

AMaintaining ~~net~~or ~~loss~~reducing expenses is part of ~~$77,822~~the ~~($0~~Company’s strategy in its return to profitability.02 ~~per~~Along ~~share)~~with isrevenue ~~reported~~increases ~~for~~(due to new products or the ~~quarter~~market ~~ended~~penetration ~~September~~of 30current products), ~~2012~~the asCompany ~~compared~~expects to achieve profitability. While we did not see a net ~~loss~~growth ofin ~~$86,189~~ revenue during the current period (~~$0.02~~as ~~per~~compared ~~share)~~with the prior year), ~~before~~we expect that to occur soon.

~~Though~~Financial we saw a temporary revenue drop of $182,107 this quarter when compared with the corresponding quarter a year ago (primarily from higher non-monthly revenues in the prior year’s period), we reduced operating expenses by $143,857 between the quarters, much of that expense reduction being permanent (not based on timing), and thus will be continued in subsequent periods. We expect continued improvements to revenues (from new products and agreements and from acquiring additional market share on existing products) with expenses held stable to result in a return to profitability.Condition

5Working capital decreased $40,641 during the six months ended December 31, 2012.

~~Financial~~For ~~Condition:~~the six months ended December 31, 2012, operating activities provided $153,236 in net cash.

The ~~working~~net ~~capital~~loss, ~~position~~ as adjusted for non-cash expenses of ~~September~~depreciation ~~30,~~and ~~2012~~amortization ~~was~~and ~~$780,677~~deferred asincome ~~compared~~taxes, ~~with~~provided $~~859~~145,~~122~~970 asin ofcash. The ~~June~~net ~~30,~~change ~~2012~~in oroperating aassets ~~decrease~~and of liabilities provided an additional $787,~~445~~266 ~~during~~in cash. Reductions to accounts receivable and prepaid expenses were offset by the ~~three~~increase ~~month~~to ~~period~~other assets (the distribution by the insurance carrier, which was received in mid-January 2013).

Investing ~~For the three months ended September 30, 2012, operating~~ activities ~~provided $185,400~~used ~~in net cash. The net collections of trade receivables (~~$~~242~~110,~~020)~~644 ~~less~~and ~~the~~financing ~~increase~~activities ~~in inventories~~used ($5728,~~346)~~628 ~~were~~during the ~~primary~~six ~~attributors~~months toended ~~the~~December ~~cash~~31, ~~provided by operating activities~~2012. ~~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.~~

Investing activities ~~used~~for the six months ended December 31, 2012 included $4428,~~228~~667 ~~and~~for ~~financing~~capital ~~activities~~expenditures ~~used~~and $1381,~~941~~977 ~~during~~towards the ~~three~~Company’s patent ~~months~~estate. ~~ended~~Under ~~September~~Financing ~~30,~~activities ~~2012~~was the repayment of the principal portion of the mortgage.

~~Investing~~The ~~activities~~Company ~~for~~is ~~the~~nearing ~~three~~a ~~months~~return ~~ended~~to ~~September~~profitability. ~~30,~~Cost ~~2012~~management ~~included~~and ~~$15,024~~revenue ~~for~~growth ~~capital~~are ~~expenditures~~the key factors and ~~$29~~while we did not reach the same revenue levels achieved a year ago,~~204~~ ~~towards~~it is certainly within reach. During the past few years, the Company’s R&D ~~patent~~resources ~~estate.~~were ~~Reported~~dedicated ~~under~~to ~~Financing~~its ~~activities~~T-HEXX ~~was~~Animal Health product line as that could yield the ~~repayment~~quickest ofrevenue return (as compared with the ~~principal~~much ~~portion~~longer term human medical product line). Some of the ~~mortgage~~recent developments in the T-HEXX product line are being rolled out into the market.

Depreciation and amortization of property, plant and equipment and of the intangibles less the income tax benefit (deferred income tax) (both non-cash items) aggregated $73,910 leading to a EBITDA for the quarter ended September 30, 2012 of $45,502. With a reduced operating expense base plus projected revenue increases, we expect to overcome the two significant 2009 events (the significant supply & support agreement cancellation and sales of medical device product lines) to result in a return to profitability.3

Item 4 Controls and 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 isare 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

Exhibits

Exhibit No.	Description
31.1	Rule 13a-14(a) Certification of Chief Executive Officer and President
31.2	Rule 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

	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

Pursuant to the Securities and Exchange November 14, 2012 Order (Release No. 68224), the registrant has been allowed an extended filing due date of this Form 10-Q until November 21, 2012.

Hurricane 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-K (waiver of loan covenants) earlier, as well as its September 30, 2012 Form 10-Q. Accordingly, in good faith, the registrant requires the extended due date under the SEC Order.

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.

Date: November 26, 2012	Hydromer, Inc.
Date: February 15, 2013	Hydromer
	By: /s/ Robert Y. Lee, VP
	By: /s/ Robert Y. Lee
	Robert Y. Lee Principal Accounting Officer & Chief Financial Officer
	Robert Y. LeePrincipal Accounting officer & Chief Financial Officer

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