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, 1999
Commission File Number: 0-11050
Mammatech Corporation
---------------------
(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
- ----------------------------------------- -----
(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, 1999
-------------
100,352,500 shares of which
7,408,500 are treasury shares
TITLE OF EACH CLASS
- -------------------
Common stock $.0001 par value
The total number of pages of this report is 11.
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Mammatech Corporation
INDEX
PART I.
FINANCIAL INFORMATION PAGE NO.
Item 1. Financial Statements
Statements of Operations for Three Months
Ended Feb. 28, 1999 and Feb. 28, 1998....................3
Balance Sheets for Feb. 28, 1999 and
August 31, 1998........................................4-5
Statement of Cash Flow for the Six Months
Ended Feb. 28, 1998......................................6
Statement of Cash Flow for the Six Months
Ended Feb. 28, 1999......................................7
Notes to Financial Statements for the Quarter
Ended Feb. 28, 1999......................................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
2
<PAGE>
<TABLE>
<CAPTION>
Mammatech Corporation
Statements of Operations
(Unaudited)
==============================================================================================================
Six Months Ended Three Months Ended
------------------------------ ------------------------------
February 1999 February 1998 February 1999 February 1998
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Sales, net $ 203,200 $ 222,479 $ 67,568 $ 47,467
Cost of sales 72,843 64,134 22,279 16,208
Gross Profit 130,357 158,345 45,289 31,258
Selling, General and Administrative Expenses 196,754 154,440 86,829 74,534
Operating gain (loss) (66,397) 3,905 (41,540) (43,276)
Other Income (SBIR) 89,545 65,391 32,543 39,084
Interest and dividends 12,817 8,487 6,006 4,645
------------- ------------- ------------- -------------
102,362 74,178 38,549 43,759
Net income before taxes 35,965 77,783 (2,991) 453
Provision for income tax -0- -0- -0- -0-
Net Income (loss) 35,965 77,783 (2,991) 453
Net Income (loss) per share .00 .00 .00 .00
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>
<PAGE>
Mammatech Corporation
Balance Sheets
Feb. 28, Aug. 31,
1999 1998
(Unaudited) (Audited)
-------- --------
ASSETS
- ------
Cash and Cash Equivalents $403,829 $342,740
Marketable securities 106,445 94,377
Accounts receivable:
Trade 33,926 74,983
Other 3,190 3,190
Inventory 209,122 201,574
Other current assets -- --
Total Current Assets 756,512 716,864
Property and equipment 40,102 43,622
Other assets:
Patents, trademarks, and
other intangibles, net of
accumulated amortization
of $53,080 and $46,942
respectively 7,392 8,657
Total other assets 7,392 8,657
-------- --------
TOTAL ASSETS $804,006 $769,143
======== ========
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
Mammatech Corporation Balance Sheets
As of August 31, 1998
and Feb. 28, 1999
(continued)
Feb. 1999 Aug. 1998
--------- ---------
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
CURRENT LIABILITIES
- -------------------
Accounts payable-trade $ 32,345 $ 48,595
Accrued payable-officer 6,630 6,630
Short Term debt 4,796 4,796
Accrued expenses 168,653 163,966
----------- -----------
TOTAL CURRENT LIABILITIES 212,425 223,987
----------- -----------
COMMITMENTS
Long Term Debt 1,940 1,940
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 (2,094,006) (2,109,926
----------- -----------
725,623 709,703
Valuation allowance for
marketable securities 12,068 (18,436)
Treasury stock at cost,
6,208,500 shares (148,051) (148,051)
----------- -----------
589,640 543,216
----------- -----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 804,005 $ 769,143
=========== ===========
The accompanying notes are an integral part of these statements.
5
<PAGE>
Mammatech Corporation
Statement of Cash Flow
For the Six Months Ending
Feb. 28, 1999
Net cash flow from operating activities $ 57,569
========
Investing Activities:
Purchase of furniture and fixtures 3,520
Financing activities:
Issuance of treasury shares -0-
Sale of marketable securities -0-
Net increase (decrease) in cash 61,089
Beginning cash 342,740
--------
Ending cash 403,829
========
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
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.
7
<PAGE>
Mammatech Corporation
Notes to Financial Statements
Feb. 28, 1999
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, 1999, and the results of operations and changes in
financial position for the three months ended Feb. 28, 1999.
Note 2. Loss per share is based on the weighted average number of shares
outstanding during each period.
8
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITIONS AND RESULTS OF OPERATION FOR MAMMATECH CORPORATION
The second quarter of fiscal 1999 was a period of transition for the Company.
Sales revenues increased by 42.3% from the same period a year ago, but declined
50.2% in comparison to the previous quarter. Similarly, gross profit increased
37.6% from the second quarter of 1998, but decreased by 75% in comparison to
last quarter. Operating expense during the current quarter relative to the first
quarter decreased by 21%, but increased by 16.5% over the second quarter of
1998. The was a small net loss for the quarter due primarily to increased
expense associated with expansion of the professional training program (see
below).
A similar picture emerges with respect to the six-month figures. Sales revenues
declined by 8.79% while operating expense increased by 27.4% compared to the
first six months of 1997. The net result for the first half of the year
therefore shows a decline of 53.8% compared to the comparable period a year ago.
The decline in sales revenues reported here is attributed to two factors: First,
there have been no major purchases by military installations as there were last
year. Second, foreign sales are somewhat depressed with absolutely no activity
on the part of our Brazilian distributor. Sales in Germany continue at a stable
rate, however. Fortunately, the State of Montana made a major purchase in
connection with its BCCP Program funded by the Center for Disease Control.
The Company is focusing substantial effort and resources on strengthening its
Professional Training Program. A manuscript describing the major elements of the
expanded program was submitted and accepted for Fall publication in a respected
medical journal. Also during the quarter, eleven MammaCare Specialists were
trained by the new Training Directors who were hired during the first quarter.
During the same period last year, five Specialists were trained. Moreover, a
number of the individuals trained this year are members of the faculty of
academic medical centers, so MammaCare training and product sales might be
expected to continue in those settings. There can, of course, be no assurance
that such activity will materialize or that substantial revenues to the Company
will result.
In spite of a substantial increase in the training fees, bookings for future
courses are expanding rapidly. Further expansion of this program is expected as
a result of a marketing presence at selected conferences although it remains to
be demonstrated that sufficient revenue will result to offset the expense
associated with attending such events.
The Company remains essentially debt free and has no immediate liquidity
problems. It continues to seek other opportunities to expand its marketing and
manufacturing activities to meet the growing world-wide interest in its
products.
9
<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
Feb. 28, 1999.
10
<PAGE>
10-Q
For the three months ended Feb. 28, 1999
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: April 12, 1999 BY: /s/ Henry S. Pennypacker
--------------------- -----------------------------
Henry S. Pennypacker,
President and Director
BY: /s/ Mary Sellers
-----------------------------
Mary Sellers, Treasurer and
Chief Financial Officer
11
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<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> AUG-31-1999
<PERIOD-END> FEB-28-1999
<CASH> 403,829
<SECURITIES> 106,445
<RECEIVABLES> 33,926
<ALLOWANCES> 0
<INVENTORY> 209,122
<CURRENT-ASSETS> 756,512
<PP&E> 40,102
<DEPRECIATION> 0
<TOTAL-ASSETS> 804,005
<CURRENT-LIABILITIES> 212,425
<BONDS> 0
0
0
<COMMON> 100,355
<OTHER-SE> 2,809,594
<TOTAL-LIABILITY-AND-EQUITY> 804,005
<SALES> 203,200
<TOTAL-REVENUES> 203,200
<CGS> 22,843
<TOTAL-COSTS> 196,754
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 35,965
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 35,965
<EPS-PRIMARY> .00
<EPS-DILUTED> .00
</TABLE>
