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, 2003
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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, 2003
100,458,333 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.
1
Mammatech Corporation
INDEX
PART I.
FINANCIAL INFORMATION PAGE NO.
Item 1. Financial Statements
Statements of Operations for Three Months
Ended Feb. 28, 2003 and Feb. 29, 2002..........................3
Balance Sheets for Feb. 29, 2003 and August 31, 2002..............................................4-5
Statement of Cash Flow for the Six Months Ended Feb. 28, 2003............................................6
Statement of Cash Flow for the Six Months Ended Feb. 29, 2002............................................7
Notes to Financial Statements for the Quarter Ended Feb. 28, 2003............................................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
Mammatech Corporation
Statements of Comprehensive Operation
(Unaudited)
Six Months Ended Three Months Ended
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February February February February
2003 2002 2003 2002
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Sales, net $ 256,325 $ 153,499 $ 118,167 $ 84,999
Cost of sales 55,684 41,484 29,483 20,324
Gross Profit 200,641 112,015 88,684 64,675
Selling, General and 191,763 180,767 95,431 86,554
Administrative Expenses
Operating gain (loss) 8,878 (68,752) (6,747) (21,879)
Other Income (SBIR) 46,254 -0- 21,115 -0-
Other Income 2,400 2,400
Interest and dividends 14,145 14,224 6,565 6,152
Pre-tax income 69,277 (52,128) 20,933 (13,327)
Provision for income tax (11,355) -0- (3,140) -0-
Comprehensive Income 57,922 (52,128) 17,793 (13,327)
(loss)
Comprehensive Income .00 .00 .00 .00
(loss) per share
Weighted average shares 100,462,500 100,462,500 100,462,500 100,462,500
============= ============= ============= =============
The accompanying notes are an integral
part of the financial statements.
3
Mammatech Corporation Balance Sheets
Feb. 28, 2003 Aug. 31, 2002
(Unaudited) (Audited)
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ASSETS
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Cash and Cash Equivalents $ 581,270 $ 503,556
Marketable securities 269,129 269,129
Accounts receivable:
Trade 61,565 54,434
Other -0- -0-
Inventory 56,625 78,446
Other current assets
Deferred tax asset-
current portion 11,355 5,100
Total Current Assets 979,944 910,665
Property and equipment 28,840 24,651
Other assets:
Deferred tax asset-
Non current portion 155,635 159,680
Patents, trademarks, and
other intangibles, net of
accumulated amortization
of $53,080 and $46,942
respectively 11,914 17,724
Total other assets 196,389 202,055
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TOTAL ASSETS $1,176.333 $1,112,720
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The accompanying notes are an integral part of the financial statements.
4
Mammatech Corporation
Balance Sheets
As of August 31, 2002
and Feb. 28, 2003
(continued)
Feb. 2003 Aug. 2002
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current portion of long term debt $ 6,260 $ 6,260
Accounts payable-trade 10,191 16,598
Accrued payable-officer 6,630 6,630
Accrued salaries 540,033 541,495
Accrued royalties 79,705 79,705
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TOTAL CURRENT LIABILITIES 642,819 650,688
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COMMITMENTS
Stockholders' equity:
Common stock, par value $.0001;
200,000,000 shares authorized;
100,352,500 shares issued
and outstanding $ 10,046 $ 10,046
Additional paid-in capital 2,811,183 2,811,183
Accumulated deficit (2,013,761) (2,085.243)
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807,468 735,986
Valuation allowance for
marketable securities (125,903) (125,903)
Treasury stock at cost,
6,208,500 shares (148,051) (148,051)
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533,514 462,032
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TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 1,176,333 $ 1,112,720
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The accompanying notes are an integral part of these statements.
5
Mammatech Corporation Statement of Cash Flow For the Six Months Ending Feb. 28, 2003
Net income (loss) $ 69,277
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Depreciation and amortization 6,000
Common stock issued for services --
Changes in assets and liabilities:
(Increase) decrease in accounts receivable (7,131)
(Increase) decrease in available for sale securities --
(Increase) decrease in inventory 21,821
(Increase) decrease in other assets (1,008)
(Increase) decrease in deferred tax asset
Increase (decrease) in accounts payable (6,407)
Increase (decrease) in accrued expenses (1,462)
Total adjustments 11,813
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Net cash provided by
operating activities 81,090
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Cash flows from investing activities:
Acquisition of property and equipment (939)
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Net cash (used in) investing activities (939)
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Cash flows from financing activities:
Repayment of note payable
Net cash (used in)
financing activities
Increase (decrease) in cash 80,151
Cash and cash equivalents,
beginning of period 503,556
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Cash and cash equivalents, end of period $ 583,707
See accompanying notes to financial statements.
The accompanying notes are an integral part of the financial statements.
6
Mammatech Corporation Statement of Cash Flow For the Six Months Ending Feb. 28, 2002
Net income (loss) ($ 52,128)
Adjustments to reconcile net income
(loss) to net cash provided by operating
activities:
Depreciation and amortization 7,500
Common stock issued for services --
Changes in assets and liabilities:
(Increase) decrease in accounts receivable 88,280
(Increase) decrease in available for sale securities --
(Increase) decrease in inventory 16,983
(Increase) decrease in other assets (2,075)
(Increase) decrease in deferred tax asset
(2,210)
Increase (decrease) in accounts payable (23,160)
Increase (decrease) in accrued expenses (10,921)
Total adjustments 74,397
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Net cash provided by operating activities 22,269
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Cash flows from investing activities:
Acquisition of property and equipment (3,008)
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Net cash (used in) investing activities -0-
Cash flows from financing activities:
Repayment of note payable -0-
Net cash (used in) -0-
financing activities
Increase (decrease) in cash 19,261
Cash and cash equivalents,
beginning of period 578,054
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Cash and cash equivalents, end of period $ 597,315
See accompanying notes to financial statements.
7
Mammatech Corporation Notes to Financial Statements Feb. 28, 2003
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, 2003, and the results of operations and changes in financial on for the three months ended Feb. 28, 2003.
Note 2. Earnings (loss) per share is based on the weighted average number of
shares outstanding during each period.
Note 3. Expenditures associated with activities supported by federal research
grants are reimbursed and appear as other income.
8
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITIONS AND RESULTS OF OPERATION FOR MAMMATECH CORPORATION
The results of the second quarter of Fiscal 2003 are mixed in comparison to the previous quarter and the second quarter of
2002. The six-month data show uniform improvement, however. Quarterly sales revenues increased by 39% from the same
period a year ago but declined by 14.5% in comparison to the previous quarter. Similarly, gross profit increased by 37%
compared to the second quarter of 2002 but was 20.7% less than the figure for last quarter. Operating expense during the
current quarter relative to the first quarter decreased by 1.1% but was 10% higher than in the second quarter of 2002. The
resulting net income of $17,792 compares favorably to a loss of $13,327 during the same quarter last year but is down by 57%
in comparison to the prior quarter of the fiscal year.
A more encouraging picture emerged with respect to the six-month figures. Sales revenues increased by 67% coupled with an
operating expense increased of only 6% compared to the first six months of 2002. The net income for the first half of the year
increased $110,050 from a net loss in the same period a year ago.
The decline in sales relative to the previous quarter reflects the general economic malaise in the national economy in
combination with insufficient inventory to service some large orders from customers in Germany and France. A portion of
these revenues will be recognized in the third quarter and the company has increased production to meet future demands of this
kind.
The Company trained 12 MammaCare Specialists during the quarter, down from 17 trained during the second quarter of 2002
but up from 3 the previous quarter. An increasing number of these specialists are being trained in the University of Florida
College of Nursing facility under the agreement executed in the first quarter. In addition, the Company introduced a new
one-day training program in clinical breast examination. The second individual to complete this program and receive
certification is a widely recognized health professional at the National Institutes of Health. His evaluation of the program was
laudatory. The Company has launched a targeted marketing program on behalf of the new clinical breast examination training
procedure but there can be no assurance that any substantial revenues will result.
The Company is continuing its efforts to develop MammaCare Training Centers in medical and nursing schools. Negotiations
have begun with a major medical institution on the west coast for an agreement to be consummated by early summer but there is
no assurance an agreement will be finalized.
The Company remains essentially debt free and has no immediate liquidity problems. In the light of the present earnings
picture, management sees no need to adjust the value of the deferred tax asset. 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
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, 2003.
10
10-Q
For the three months ended Feb. 28, 2003 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 hereunto duly authorized.
MAMMATECH CORPORATION
DATE: April 11, 2003 BY: /s/ Henry S. Pennypacker
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Henry S. Pennypacker,
President and Director
BY: /s/ Mary Sellers
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Mary Sellers, Treasurer
and Chief Financial
Officer |
