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, 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
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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, 2003
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
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, 2003 and May 31, 2002....................................3
Balance Sheets for May 31, 2003
August 31, 2002......................................................4-5
Statement of Cash Flow for the Quarter
Ended May 31, 2003 ....................................................6
Statements of Cash Flow for the Quarter
Ended May 31, 2002.....................................................7
Notes to Financial Statements for the Quarter
Ended May 31, 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 Operations
(Unaudited)
Nine Months Ended Three Months Ended
May May May May
2003 2002 2003 2002
Sales, net $ 330,779 266,555 $ 74,804 113,226
Cost of sales 74,523 73,529 18,153 32,093
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Gross Profit 256,256 193,026 56,651 81,132
Selling,general
and adminstra-
tive expense $ 288,355 263,053 97,678 79,281
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Operating Income ( 32,099) (70,027) (41,027) 1,851
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(Loss)
Other income 2,400
(expense)
Interest &
Dividend Income 20,965 19,998 6,878 5,774
SBIR Grant. 66,937 38,555 24,752
reimb ------------- ------------- ------------- -------------
87,902 60,953 31,630 5,774
Utilization of oper.
loss carryforward -0- -0- -0- -0-
Net income before
taxes 55,803 (47,629)
Provision for income
tax (11,355) -0- -0- -0-
NET INCOME (LOSS) 44,448 (47,629) (9,397) 7,625
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Net income (loss)
per share .00 .00 .00 .00
============= ============= ============= =============
Weighted
average shares 100,462,500 100,458,500 100,462,500 100,458,500
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The accompanying notes are an integral part of the financial statements.
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Mammatech Corporation
Balance Sheets
May 31, Aug. 31,
2003 2002
(Unaudited) (Audited)
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ASSETS
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Cash and Cash Equivalents $ 594,931 503,556
Marketable Securities 269,129 269,129
Accounts receivable:
Trade 29,864 54,434
Other -- -0-
Inventory 63,614 78,446
Other current assets
Deferred tax asset-
current portion 6,150 5,100
Total Current Assets 963,688 910,665
Property and equipment 26,236 24,651
Other assets:
Deferred tax asset-
Non current portion 160,840 159,680
Patents, trademarks, and
other intangibles, net of
accumulated amortization
of $53,080 and $46,942
respectively 11,914 17,724
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Total other assets 172,754 207,094
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TOTAL ASSETS $1,162,678 $1,112,720
The accompanying notes are an integral part of the financial statements.
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Mammatech Corporation
Balance Sheets
As of August 31, 2002
and May 31, 2003
(continued)
May 2003 Aug 2002
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LIABILITIES AND STOCKHOLDERS' EQUITY
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CURRENT LIABILITIES
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Accounts payable-trade $ 6,214 $ 16,598
Accrued payable-officer 6,630 6,630
Current portion of long term debt 6,260 6,260
Accrued salaries 539,501 541,495
Accrued royalties 79,705 79,705
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TOTAL CURRENT LIABILITIES 638,310 650,688
COMMITMENTS
Long term debt -- --
Stockholders' equity:
Common stock, par value $.0001;
200,000,000 shares authorized;
80,352,500 shares issued
and outstanding $ 10,046 $ 10,046
Additional paid-in capital 2,811,183 2,811,183
Accumulated deficit (2,023,109) (2,085,243)
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798,120 735,986
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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524,166 462,032
TOTAL LIABILITIES AND $ 1,162,476 $ 1,112,720
STOCKHOLDERS' EQUITY
The accompanying notes are an integral part of these statements.
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Mammatech Corporation
Statement of Cash Flow
For the Nine Months Ending
May 31,2002
Net income (loss)
Adjustments to reconcile net income (loss) to net $ (47,629)
cash provided by operating activities:
Depreciation and amortization 16,500
Changes in assets and liabilties:
(Increase) decrease in accounts receivable 63,994
(Increase) decrease in inventory 11,781
(Increase) decrease in other assets (2,075)
(Increase) decrease in deferred tax asset (2,210)
Increase (decrease) in accounts payable (16,386)
Increase (decrease) in accrued expenses (8,207)
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Total adjustments
Net cash provided by operating activities 15,768
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Cash flows from investing activities:
Acquisition of property and equipment (3,008)
Net cash used in investing activities -0-
Cash flows from financing activities:
Repayment of note payable
Net cash used in financing activities -0-
Increase (decrease) in cash 12,760
Cash and cash equivalents, beginning of period 578,054
Cash and cash equivalents, beginning of period 590,814
-6-
Mammatech Corporation
Statement of Cash Flow
For the Six Months Ending
May 31,2003
Net income (loss)
Adjustments to reconcile net income (loss) to net $ 55,801
cash provided by operating activities:
Depreciation and amortization 12,000
Changes in assets and liabilties:
(Increase) decrease in accounts receivable 24,570
(Increase) decrease in inventory 14,832
(Increase) decrease in deferred tax asset
Increase (decrease) in accounts payable (10,384)
Increase (decrease) in accrued expenses (1,792)
(Increase) decrease in other assets (1,008)
Total adjustments 38,218
Net cash provided by operating activities 94,019
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Cash flows from investing activities:
Acquisition of property and equipment (4,335)
Net cash used in investing activities
Cash flows from financing activities:
Repayment of note payable
Net cash used in financing activities
Increase (decrease) in cash 89,684
Cash and cash equivalents, beginning of period 503,556
Cash and cash equivalents, beginning of period 593,240
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Mammatech Corporation
Notes to Financial Statements
May 31, 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 May 31, 2003, and the results of operations and changes in
financial position for the three months ended May 31, 2003.
Note 2. Loss per share is based on the weighted average number of shares
outstanding during each period.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITIONS AND RESULTS OF OPERATION FOR MAMMATECH CORPORATION
Results for the third quarter of Fiscal 2003 were disappointing but not
surprising in view of the international situation. Sales decreased 36% relative
to the previous quarter and by 34% relative to the third quarter of 2002. The
operating loss of $41,027 compares unfavorably to the loss of $6,747 in the
previous quarter and to the gain of $1,851 during the third quarter one year
earlier. The negative operating income is partly the result of an abrupt decline
in orders from the Company's regular military and other federal customers as the
war in Iraq began. The net loss of $9,397 reflects the value of the Company's
ongoing SBIR grant and the contribution of the Company's investments to net
income.
The nine month figures are more encouraging. Net sales increased by 24% compared
to last year. This is coupled with a slight increase in cost of goods and a
slight increase in operating costs. As a result, the positive performance for
the nine month period reflects a turnaround compared to the results a year
earlier. There can be no assurance that this trend will continue although sales
remain stable.
The MammaCare operation in Germany is expanding with a new training Center being
developed in Munich. Sales volume is steadily increasing and has occasioned
expansion of the Company's manufacturing facilities. There can be no assurance
that sales volumes will be sufficient to offset the increased costs incurred by
this expansion.
A number of medical education institutions are seeking to adopt the Company's
MammaCare(R) Professional Training Programs and preliminary discussions have
begun with several. In the first quarter of fiscal 2003, the Company announced
an agreement with the University of Florida College of Nursing In order to
maintain the recognized standards of MammaCare training in distant settings, a
broader license agreement has been prepared. As the current quarter came to a
close, the Company initiated negotiations with a major institution of medical
education on the west coast and training of the prospective director has begun.
There can be no assurance, however, that the Company will successfully complete
this negotiation or, if successful, that substantial revenue will result.
The SBIR funded research designed to extend the MammaCare method of manual
breast examination to benefit women with major physical disabilities is
progressing well. Finally, Company officers received notification during the
quarter of receipt of two patents covering an instructional system for teaching
fine needle aspiration. The officers have granted the Company certain rights, at
no cost, to use these patents.
The Company remains debt free and has no immediate liquidity problems.
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PART II - OTHER INFORMATION
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Item 6. Exhibits and Reports on Form 8-K
(a.) Exhibits - 99.1 Certification Pursuant to Section 906 of the
Sarbanes-Oxley Act 0f 2002
(b.) There were no reports filed on Form 8-K during the three
months ending May 31, 2003.
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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: BY: /s/
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Henry S. Pennypacker
President and director
BY: /s/
--------------------------------
Mary Sellers, Treasurer
and Chief Financial
Officer
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CERTIFICATION
Certification Pursuant to Rule 13a-14 or 15d-14 of the Securities Exchange Act
of 1934, As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Henry S. Pennypacker, Chief Executive Officer of Mammatech Corporation
certify that:
1. I have reviewed this quarterly report Form 10-Q of Mammatech Corporation;
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a. designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly
report is being prepared;
b. evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
c. presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent functions):
a. all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b. any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officer and I have indicated in this
quarterly report whether there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.
Date: June 25, 2003
/s/ Henry S. Pennypacker
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Henry S. Pennypacker
Chief Executive Officer and President
CERTIFICATION
Certification Pursuant to Rule 13a-14 or 15d-14 of the Securities Exchange Act
of 1934, As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Mary Bailey Sellers, Chief Financial Officer of Mammatech Corporation.,
certify that:
1. I have reviewed this annual report on Form 10-K Mammatech Corporation;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a. designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly
report is being prepared;
b. evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
c. presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent functions):
a. all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b. any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officer and I have indicated in this
quarterly report whether there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.
Date: June 25, 2003
/s/ Mary Bailey Sellers
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Mary Bailey Sellers
Chief Financial Officer and
Executive Vice President