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: May 31, 1998
Commission File Number: 0-11050
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
May 31, 1998
-------------------------------
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 May 31, 1998 and May 31, 1997....................3
Balance Sheets for May 31, 1998
August 31, 1997......................................4-5
Statement of Cash Flow for the Quarter
Ended May 31, 1998.....................................6
Statements of Cash Flow for the Quarter
Ended May 31, 1997.....................................7
Notes to Financial Statements for the Quarter
Ended May 31, 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)
Nine Months Ended Three Months Ended
May May May May
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Sales, net $ 365,314 253,743 $ 142,835 78,231
Cost of sales 103,020 79,326 38,886 28,530
------------ ------------ ------------ ------------
Gross Profit 262,294 174,417 103,949 49,701
Selling,general
and adminstra-
tive expense $ 226,016 132,063 133,303 39,350
------------ ------------ ------------ ------------
Operating Income 36,278 42,354 29,354 10,351
------------ ------------ ------------ ------------
(Loss)
Other income
(expense)
Interest &
Dividend Income 13,063 7,307 4,564 2,743
SBIR Grant 103,088 37,697
reimb
Utilization of oper
loss carryforward -0- 9,932 -0- 2,618
------------ ------------
Net income before
taxes 152,429 59,593 12,907
Provision for income
tax -0- 9,932 -0- 2,618
NET INCOME (LOSS) 152,429 59,593 12,907 13,094
------------ ------------ ------------ ------------
Net income (loss)
per share .0015 .0005 .0001 .0001
============ ============ ============ ============
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.
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</TABLE>
<PAGE>
Mammatech Corporation
Balance Sheets
May 31, 1998 Aug. 31, 1997
(Unaudited) (Audited)
----------- ---------
ASSETS
- ------
Cash and Cash Equivalents $274,139 169,088
Marketable Securities 82,752 82,752
Accounts receivable:
Trade 69,070 62,745
Other 3,190 3,236
Inventory 197,205 162,019
Other current assets -- --
Total Current Assets 626,364 479,840
Property and equipment 54,609 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 $691,198 $530,184
The accompanying notes are an integral part of the financial statements.
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<PAGE>
Mammatech Corporation
Balance Sheets
As of August 31, 1997
and May 31, 1998
(continued)
May 1998 Aug 1997
-------- --------
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
CURRENT LIABILITIES
- -------------------
Accounts payable-trade $ 48,923 $ 38,722
Accrued payable-officer 6,630 6,630
Short term debt 910 3,578
Accrued expenses 59,567 58,368
----------- -----------
TOTAL CURRENT LIABILITIES 116,030 107,298
COMMITMENTS
Long term dept 5,527 5,527
Stockholders' equity:
Common stock, par value $.0001;
200,000,000 shares authorized;
80,352,500 shares issued
and outstanding $ 10,035 $ 10,035
Additional paid-in capital 2,809,594 2,809,594
Accumulated deficit (2,108,189) (2,260,471)
----------- -----------
----------- -----------
711,440 559,158
Valuation allowance for
marketable securities 6,252 6,252
Treasury stock at cost,
7,408,500 shares (148,051) (148,051)
----------- -----------
569,641 417,359
TOTAL LIABILITIES AND $ 691,198 $ 530,184
STOCKHOLDERS' EQUITY
The accompanying notes are an integral part of these statements.
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<PAGE>
Mammatech Corporation
Statement of Cash Flow
For the Nine Months Ending
May 31, 1998
Net cash flow from operating activities 99,524
========
Investing Activities:
Sale of certificate of deposit -0-
Purchase of furniture and fixtures 5,527
Financing activities:
Net increase (decrease) in cash 105,051
Beginning cash 169,088
--------
Ending cash $274,139
========
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<PAGE>
Mammatech Corporation
Statement of Cash Flow
For the Nine Months Ending
May 31, 1997
Net cash flow from operating activities 11,688
========
Investing Activities:
Sale of certificate of deposit -0-
Purchase of furniture and fixtures 7,086
Financing activities:
Net increase (decrease) in cash (4,602)
Beginning cash 179,651
--------
Ending cash $175,049
========
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<PAGE>
Mammatech Corporation
Notes to Financial Statements
May 31, 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 May 31, 1998, and the results of operations and changes in
financial position for the three months ended May 31, 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.
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<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITIONS AND RESULTS OF OPERATION FOR MAMMATECH CORPORATION
The third quarter of Fiscal 1998 was a substantial improvement over the previous
quarter and over the third quarter from a one year ago. Sales were up 201% over
the previous quarter and were 82.4% greater than sales during the third quarter
of 1997. Operating income of $29,354 reflects an increase of 183% from the
previous year and compares favorably with the $42,276 loss experienced during
the previous quarter.The net income for the current quarter was 2750% above the
$453 reported for the previous quarter.
The nine month figures show a 44% increase in sales for the current year but a
14% decline in operating income. Comparisons among other nine-month figures from
a year ago are affected by the fact that the Company is now administering a
Phase II SBIR grant that added to both its operating expense and net income for
the period. Thus, for example, the nine-month figure for net income for this
year is 156% greater than the corresponding figure for last
year.Similarly,operating expense increased by 68% compared with a year ago
whereas cost of sales increased by only 29.9% .
During the quarter,the Company extended its relationship with its German
distributor by training 3 health care professionals (two physicians and one
nurse) as MammaCare Specialists. This will provide the basis for extensive
outreach to the medical community in Germany which will, the Company hopes, help
solidify acceptance of the MammaCare technology among the women of that
country.The Company also trained six additional specialists, including a
physician from a major medical school who will be introducing the MammaCare
method of clinical breast examination to resident training in that institution.
The Company also made a substantial sale of breast models and other training
materials to the American Medical Women's Association for their use in training
U.S. military personnel and their dependents. Many of these are follow-up orders
from similar sales made last year. The Company made a major sale of specially
constructed breast models to the California Department of Health. That
organization is actively disseminating a program of clinical breast examination
training using the Company's products and procedures.There can be no assurance,
however, that any of these customers will continue to procure materials at the
present rate or that substantial revenues will accrue to the Company as a result
of their involvement.
Finally, the Company introduced two new products during the quarter. It has
added dark-skinned models to the Home Practice Series in response to numerous
requests, particularly from American Cancer Society units. It also added a new
evaluation lamp which projects the MammaCare grid on the torso of the patient
being trained or examined. This grid provides a basis for precise measurement of
the examination performance, a hallmark of the MammaCare procedure since its
days in the laboratory.
The Company remains essentially debt-free and has no immediate liquidity
problems. It continues to pursue a corporate affiliation designed to help it
realize the full commercial potential of its products.
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<PAGE>
PART II - OTHER INFORMATION
---------------------------
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
May 31, 1998.
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<PAGE>
10-Q
For the three months ended May 31, 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
DATE: July 6, 1998 BY: /s/ Henry S. Pennypacker
------------------------------ --------------------------------------
Henry S. Pennypacker, President
and Director
BY: /s/ Mary Sellers
--------------------------------
Mary Sellers, Treasurer and
Chief Financial Officer
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<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> AUG-31-1997
<PERIOD-END> MAY-31-1998
<CASH> 274,139
<SECURITIES> 82,752
<RECEIVABLES> 69,070
<ALLOWANCES> 0
<INVENTORY> 197,205
<CURRENT-ASSETS> 626,364
<PP&E> 54,609
<DEPRECIATION> 0
<TOTAL-ASSETS> 691,198
<CURRENT-LIABILITIES> 116,030
<BONDS> 0
0
0
<COMMON> 10,035
<OTHER-SE> 2,809,594
<TOTAL-LIABILITY-AND-EQUITY> 691,198
<SALES> 365,314
<TOTAL-REVENUES> 0
<CGS> 103,020
<TOTAL-COSTS> 226,016
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 152,429
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 152,429
<EPS-PRIMARY> .00
<EPS-DILUTED> .00
</TABLE>
