Form 10Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Quarterly Report Under Section 13 or 15 (d)
of the Securities Exchange Act of 1934
For Quarter Ended: Feb. 28, 1998
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Commission File Number: 0-11050
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Mammatech Corporation
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(Exact name of registrant as specified in its charter)
Florida 59-2181303
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
930 N.W. 8th Avenue, Gainesville, Florida 32601
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(Address of principal executive offices) (Zip Code)
(352) 375-0607
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(Registrant's telephone number, including area code)
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 ninety days. Yes X No
----- -----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:
Number of shares outstanding on
Feb. 28, 1998
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100,352,500 shares of which
7,408,500 are treasury shares
TITLE OF EACH CLASS
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Common stock $.0001 par value
The total number of pages of this report is 11.
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Mammatech Corporation
INDEX
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PART I.
FINANCIAL INFORMATION PAGE NO.
Item 1. Financial Statements
Statements of Operations for Three Months
Ended Feb. 28, 1998 and Feb. 28, 1997....................3
Balance Sheets for Feb. 28, 1998 and
August 31, 1997........................................4-5
Statement of Cash Flow for the Six Months
Ended Feb. 28, 1998......................................6
Statement of Cash Flow for the Quarter
Ended Feb. 28, 1997......................................7
Notes to Financial Statements for the Quarter
Ended Feb. 28, 1998......................................8
Item 2. Management's Discussion and Analysis of
Financial Conditions and Results of Operations...........9
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K...............10
SIGNATURES............................................. 11
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<TABLE>
<CAPTION>
Mammatech Corporation
Statements of Operations
(Unaudited)
Six Months Ended Three Months Ended
February February February February
1998 1997 1998 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Sales, net $ 222,479 $ 175,512 $ 47,467 $ 77,629
Cost of sales 64,134 50,796 16,208 21,937
Gross Profit 158,345 124,716 31,258 55,692
Selling, General and
Administrative Expenses 154,440 92,713 74,534 39,944
Operating gain (loss) 3,905 32,003 (43,276) 15,748
Other Income (SBIR) 65,391 39,084
Interest and dividends 8,487 4,564 4,645 2,601
------------- -------------
74,178 43,759
Net income before taxes 77,783 43,880 453 22,019
Provision for income tax -0- 7,313 -0- 3,670
Net Income (loss) 77,783 36,567 453 18,349
Net Income (loss) per
share .0007 .0004 .4514*10-5 .0002
Weighted average shares 100,352,500 100,352,500 100,352,500 100,352,500
============= ============= ============= =============
The accompanying notes are an integral part of the financial statements.
3
</TABLE>
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Mammatech Corporation
Balance Sheets
Feb. 28, 1998 Aug. 31, 1997
(Unaudited) (Audited)
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ASSETS
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Cash and Cash Equivalents $258,370 $169,088
Marketable securities 82,752 82,752
Accounts receivable:
Trade 23,264 62,745
Other 3,244 3,236
Inventory 185,033 162,019
Other current assets -- --
Total Current Assets 552,663 479,840
Property and equipment 52,362 49,082
Other assets:
Patents, trademarks, and
other intangibles, net of
accumulated amortization
of $53,080 and $46,942
respectively 10,233 1,262
Total other assets 10,233 1,262
-------- --------
TOTAL ASSETS $615,258 $530,184
======== ========
The accompanying notes are an integral part of the financial statements.
4
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Mammatech Corporation
Balance Sheets
As of August 31, 1997
and Feb. 28, 1998
(continued)
Feb. 1998 Aug. 1997
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LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
CURRENT LIABILITIES
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Accounts payable-trade $ 46,000 $ 38,722
Accrued payable-officer 6,630 6,630
Short Term debt 1,813 3,578
Accrued expenses 60,145 58,368
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TOTAL CURRENT LIABILITIES 114,588 107,298
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COMMITMENTS
Long Term Debt 5,527 5,527
Stockholders' equity:
Common stock, par value $.0001;
200,000,000 shares authorized;
100,352,500 shares issued
and outstanding $ 10,035 $ 10,035
Additional paid-in capital 2,809,594 2,809,594
Accumulated deficit (2,182,687) (2,260,471)
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636,942 559,158
Valuation allowance for
marketable securities 6,252 6,252
Treasury stock at cost,
6,208,500 shares (148,051) (148,051)
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495,143 417,359
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TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 615,258 $ 530,184
=========== ===========
The accompanying notes are an integral part of these statements.
5
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Mammatech Corporation
Statement of Cash Flow
For the Six Months Ending
Feb. 28, 1998
Net cash flow from operating activities $ 86,216
========
Investing Activities:
Purchase of furniture and fixtures 3,280
Financing activities:
Issuance of treasury shares -0-
Sale of marketable securities -0-
Net increase (decrease) in cash 89,496
Beginning cash 169,088
--------
Ending cash 258,370
========
The accompanying notes are an integral part of the financial statements.
6
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Mammatech Corporation
Statement of Cash Flow
Form the Six Months Ending
Feb. 28, 1997
Net cash flow from operating activities $ 3,341
=========
Investing Activities:
Purchase of furniture and fixtures (2,450)
Financing activities:
Issuance of treasury shares -0-
Sale of marketable securities -0-
Net increase (decrease) in cash (891)
Beginning cash 179,651
---------
Ending cash 178,760
=========
The accompanying notes are an integral part of the financial statements.
7
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Mammatech Corporation
Notes to Financial Statements
Feb. 28, 1998
Note 1. In the opinion of the Company, the accompanying unaudited financial
statements contain all adjustments (consisting of only normal
recurring accruals) necessary to present fairly the financial position
as of Feb. 28, 1998, and the results of operations and changes in
financial position for the three months ended Feb. 28, 1998.
Note 2. Loss per share is based on the weighted average number of shares
outstanding during each period.
Note 3. Gives effect to the Company's repurchasing 7,558,500 shares of stock
from shareholders for treasury stock.
8
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITIONS AND RESULTS OF OPERATION FOR MAMMATECH CORPORATION
During the second quarter of fiscal 1998 the Company's sales revenues decreased
by 73% over the previous quarter and by 39% compared to the same period one year
ago. Gross profit decreased 44% from the second quarter of 1997, and decreased
by 75% in comparison to last quarter. Operating expense during the current
quarter relative to the first quarter decreased by 7%, but increased by 89% over
the second quarter of 1997. This increase was due primarily to the existence of
the Phase II SBIR grant(see below) which was not present during 1997. Net income
for the quarter was negligible due to the unusually low sales figures for the
quarter. The Company believes that this decline in sales was in part the result
of severe weather in portions of the country (New England and the West Coast)
normally associated with substantial sales on a regular basis.
A different picture emerges with respect to the six-month figures. Sales
revenues increased 26.8% and are reflected in the operating gain increase of
26.9% compared to the first six months of 1997. These figures are due primarily
to the excellent results of the first quarter. The net result for the first half
of the year therefore shows an increase of 113% compared to the first six months
of fiscal 1997.
During the second quarter, the Company completed development of the special
breast models and videotapes required for use by blind or visually impaired
women. This work was supported by the SBIR grant and will result in modest sales
during the current quarter as well as in subsequent quarters. There can be no
assurance, however, that thereafter sales of the MammaCare System adapted for
this population will result in significant revenues to the Company.
The Company also continued its efforts to broaden the availability of MammaCare
throughout the medical community. Toward this end, seven additional MammaCare
Specialists were trained and certified. These individuals represent such diverse
groups as The Fox Chase Cancer Center, the Breast and Cervical Cancer Program of
various states supported by the Center for Disease Control (CDC), and the Zeneca
Corporation.
Finally, the Company was pleased with the 2-page article on MammaCare that
appeared in the premier issue of Be Well, a special magazine devoted to women's
health issues and published by Family Circle. Readers are invited to take
advantage of a discount offer in purchasing the Company's Personal Learning
System. To date, there has been a small but steady flow of such orders.
The Company continues to seek other opportunities to expand its marketing and
manufacturing activities to meet the growing world-wide interest in its
products.
9
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PART II - OTHER INFORMATION
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Item 6. Exhibits and Reports on Form 8-K
(a.) Exhibits - None
(b.) There were no reports filed on Form 8-K during the three months ending
Feb. 28, 1998.
10
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10-Q
For the three months ended Feb. 28, 1998
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MAMMATECH CORPORATION
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DATE: ______________________ BY: _______________________________
Henry S. Pennypacker,
President and Director
BY: _______________________________
Mary Sellers, Treasurer and
Chief Financial Officer
11
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<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> AUG-31-1998
<PERIOD-END> FEB-28-1998
<CASH> 258,370
<SECURITIES> 82,752
<RECEIVABLES> 26,508
<ALLOWANCES> 0
<INVENTORY> 185,033
<CURRENT-ASSETS> 552,663
<PP&E> 52,362
<DEPRECIATION> 0
<TOTAL-ASSETS> 615,258
<CURRENT-LIABILITIES> 114,588
<BONDS> 0
0
0
<COMMON> 10,035
<OTHER-SE> 2,809,594
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 222,479
<TOTAL-REVENUES> 0
<CGS> 64,134
<TOTAL-COSTS> 154,440
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 77,783
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
