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. 29, 2000
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. 29, 2000
-------------
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.
<PAGE>
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, 2000 and Feb. 28, 1999...............................3
Balance Sheets for Feb. 28, 2000 and
August 31, 1999.....................................................4-5
Statement of Cash Flow for the Six Months
Ended Feb. 28, 1999.................................................6
Statement of Cash Flow for the Six Months
Ended Feb. 28, 2000.................................................7
Notes to Financial Statements for the Quarter
Ended Feb. 28, 2000.................................................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 2000 February 1999 February 2000 February 1999
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sales, net $ 225,575 $ 203,200 $ 92,140 $ 67,568
- ----------------------------------------------------------------------------------------------
Cost of sales 51,645 72,843 18,095 22,279
- ----------------------------------------------------------------------------------------------
Gross Profit 173,930 130,357 74,045 45,289
- ----------------------------------------------------------------------------------------------
Selling, General and
Administrative Expenses 205,556 196,754 98,266 86,829
- ----------------------------------------------------------------------------------------------
Operating gain (loss) (31,626) (66,397) (24,221) (41,540)
- ----------------------------------------------------------------------------------------------
Other Income (SBIR) 74,335 89,545 37,130 32,543
Interest and dividends 15,466 12,817 8,004 6,006
------------- ------------- ------------- -------------
89,801 102,362 45,134 38,549
- ----------------------------------------------------------------------------------------------
Net income before taxes 58,175 35,965 20,913 (2,991)
- ----------------------------------------------------------------------------------------------
Provision for income tax -0- -0- -0- -0-
- ----------------------------------------------------------------------------------------------
Net Income (loss) 58,175 35,965 20,913 (2,991)
- ----------------------------------------------------------------------------------------------
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. 29, 2000 Aug. 31, 1999
(Unaudited) (Audited)
----------- ---------
ASSETS
- ------
Cash and Cash Equivalents $ 618,145 $ 498,212
Marketable securities 76,506 76,506
Accounts receivable:
Trade 28,883 93,983
Other 3,548 3,548
Inventory 148,220 184,371
Other current assets
Deferred tax asset-
current portion 11,132 17,000
Total Current Assets 886,434 873,620
Property and equipment 29,704 34,052
Other assets:
Deferred tax asset-
Non current portion 158,868 153,000
Patents, trademarks, and
other intangibles, net of
accumulated amortization
of $53,080 and $46,942
respectively 11,565 4,455
Total other assets 200,137 191,507
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TOTAL ASSETS $1,086,571 $1,065,127
========== ==========
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
Mammatech Corporation
Balance Sheets
As of August 31, 1999
and Feb. 29, 2000
(continued)
Feb. 2000 Aug. 1999
--------- ---------
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
CURRENT LIABILITIES
- -------------------
Current portion of long term debt 6,736 6,736
Accounts payable-trade $ 3,990 $ 36,421
Accrued payable-officer 6,630 6,630
Accrued salaries 229,006 209,479
Accrued royalties 48,102 48,102
-----------
TOTAL CURRENT LIABILITIES 294,464 307,368
----------- -----------
COMMITMENTS
Stockholders' equity:
Common stock, par value $.0001;
200,000,000 shares authorized;
100,352,500 shares issued
and outstanding $ 10,045 $ 10,045
Additional paid-in capital 2,810,884 2,810,884
Accumulated deficit (1,873,643) (1,907,992
----------- -----------
947,286 912,937
Valuation allowance for
marketable securities (7,127) (7,127)
Treasury stock at cost,
6,208,500 shares (148,051) (148,051)
----------- -----------
792,108 757,759
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TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 1,086,572 $ 1,065,127
=========== ===========
The accompanying notes are an integral part of these statements.
5
<PAGE>
Mammatech Corporation
Statement of Cash Flow
For the Six Months Ending
Feb. 29, 2000
Net cash flow from operating activities $115,585
========
Investing Activities:
Purchase of furniture and fixtures 4,348
Financing activities:
Issuance of treasury shares -0-
Sale of marketable securities -0-
Net increase (decrease) in cash 119,933
Beginning cash 498,212
--------
Ending cash 618,145
========
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, 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.
7
<PAGE>
Mammatech Corporation
Notes to Financial Statements
Feb. 29, 2000
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, 2000, and the results of operations and changes in
financial position for the three months ended Feb. 28, 2000.
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 2000 was a period of consolidation for the Company.
Sales revenues increased by 36.4% from the same period a year ago, but declined
by 30.9% in comparison to the previous quarter. Similarly, gross profit
increased by 63% compared to the second quarter of 1999, but decreased by 25% in
comparison to last quarter. Operating expense during the current quarter
relative to the first quarter decreased by 8.5% but was 13% greater that in the
second quarter of 1999. The resulting net income was 43.6% less than for the
first quarter, but far exceeded the small loss reported for that quarter last
year.
A similar picture emerged with respect to the six-month figures. Sales revenues
increased by 11% while operating expense increased by 4.5% compared to the first
six months of 1999. The net result for the first half of the year therefore
shows a revenue increase of 61.8% compared to the comparable period a year ago.
The modest increase in sales revenues results from several factors. Intensified
marketing of the Company's professional training program has enhanced visibility
of the Company's overall product line. Late in the quarter, a report appeared in
the journal Cancer which again confirmed the effectiveness of the Company's
training methods. Coupled with the report that appeared in October in the
Journal of the American Medical Association (see previous 10Q for details), this
afforded the Company considerable attention from the medical community. Finally,
the Company conducted on a trial basis a joint training program with EduCare,
Inc., an organization widely respected as the leader in training of breast
health specialists. This was judged a success and will likely be repeated.
The Company continues to make progress on its research program supported by an
SBIR grant from the National Cancer Institute. Data collection from the visually
impaired study population is nearing completion and is now under way with the
deaf and hearing impaired cohort. During the quarter, a member of the Company's
research team made an invited presentation to the State Program Directors for
the Breast and Cervical Cancer Early Detection Program of the Centers for
Disease Control. The impact of this event on future revenues for the Company is,
at this moment, unknown since the the purpose of the presentation was
scientific.
The Company trained 11 MammaCare Specialists during the quarter, down slightly
from 14 the previous quarter, but equal to the number trained during the second
quarter of 1999. Weather forced postponement of two Specialist trainings. One of
the Specialists trained this quarter is from Germany and will be assisting in
presenting MammaCare to the professional market in Europe. Sales to our German
distributor are steady.
The Company is continuing its collaborative effort with a research and
development corporation in Rockville, MD. This organization has secured an SBIR
Phase II grant to automate portions of the Company's clinical breast examination
training technology.
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>
Note Regarding Forward Looking Information
Certain statements contained in this Quarterly Report constitute
"forward-looking statements" within the meaning of Section 27A of the Securities
Act and Sections 21E of the Exchange Act. Such forward-looking statements
involve known and unknown risks, uncertainties and other factors which may cause
the actual results, levels of activity, performance or achievements of the
Company, or industry results, to be materially different from any future
results, levels of activity, performance or achievements expressed or implied by
such forward-looking statements. Such factors include, among others, the
following: general economic and business conditions, the ability of the Company
to implement its business strategy; the ability of the Company to obtain
financing for general corporate purposes; competition; availability of key
personnel, and changes in, or the failure to comply with governments
regulations. As a result of the foregoing and other factors, no assurance can be
given as to the future results, levels of activity and achievements and neither
the Company nor any person assumes responsibility for the accuracy and
completeness of these statements.
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. 29, 2000.
10
<PAGE>
For the three months ended Feb. 29, 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 10, 2000 BY: /s/ Henry S. Pennypacker
- -------------------- ----------------------------
Henry S. Pennypacker,
President and Director
BY: /s/ Mary Sellers
--------------------
Mary Sellers, Treasurer and
Chief Financial Officer
11
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> AUG-31-2000
<PERIOD-END> FEB-29-2000
<CASH> 618,145
<SECURITIES> 76,506
<RECEIVABLES> 28,883
<ALLOWANCES> 0
<INVENTORY> 148,220
<CURRENT-ASSETS> 886,434
<PP&E> 29,704
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,086,571
<CURRENT-LIABILITIES> 294,464
<BONDS> 0
0
0
<COMMON> 10,045
<OTHER-SE> 2,810,884
<TOTAL-LIABILITY-AND-EQUITY> 1,086,572
<SALES> 225,575
<TOTAL-REVENUES> 225,575
<CGS> 51,645
<TOTAL-COSTS> 205,556
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 58,175
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 58,175
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
