UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549





FORM 10-Q





QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934





For the quarterly period ended May 31, 2010





TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT





For the transition period from _____ to _______





Commission File Number:  0-11050





Mammatech Corporation


(Exact Name of Registrant as Specified in its Charter)





Florida

59-2181303(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)





930 NW 8thAve Gainesville, Florida 32601


(Address of Principal Executive Offices)  (Zip Code)





Registrant's telephone number including area code:  (352) 375-0607





N/AFormer name, former address, and former fiscal year, if changed since last report





Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 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 90 days.    Yes    x       No     o





Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See definition of "large accelerated filer", "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.





Larger accelerated filer     o
Accelerated filer        oNon-accelerated filer        o
Smaller reporting company        x





Indicate by check mark whether registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).


Yes     o              No     x





Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: 5,123,700 shares of common stock, par value $0.0001, outstanding as of June 30, 2010.




















MAMMATECH   CORPORATION





Index





PagePart I - FINANCIAL INFORMATIONItem 1.
Financial StatementsBalance Sheets at May 31, 2010 (unaudited) and August 31, 2009
1Statements of Operations for the three months and nine months ended May 31, 2010 and 2009 (unaudited)
3Statements of Cash Flows for the nine months ended May 31, 2010 and 2009 (unaudited)
4Notes to Financial Statements (unaudited)
5Item 2.
Management's Discussion and Analysis of Financial Condition and Results ofOperation
7Item 3.
Quantitative and Qualitative Disclosures About Market Risk
11Item 4.
Controls and Procedures
11Part II - OTHER INFORMATIONItem 1.
Legal Proceedings
12Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
12Item 3.
Defaults upon Senior Securities
12Item 4.
Submission of Matters to a Vote of Security Holders
12Item 5.
Other Information
12Item 6.
Exhibits
12SIGNATURES
13




i




PART I - FINANCIAL INFORMATION








Mammatech CorporationBalance SheetsMay 31,


August 31,2010


2009(Unaudited)ASSETSCurrent assets:Cash

$
66,394


$
50,313Accounts receivable - trade


10,455



20,162Inventory


45,379



36,684Total current assets


122,228



107,159Property and equipment, at cost, net of accumulated depreciation of $216,259 and $203,854


224,194



235,200Available for sale securities


407,796



422,204Other assets


762



5,153408,558



427,357TOTAL ASSETS

$
754,980


$
769,716LIABILITIES AND STOCKHOLDERS' (DEFICIT)Current liabilities:Accounts payable and accrued expenses

$
34,995


$
19,693Accounts payable and accrued salaries - officers


1,384,538



1,288,446Total current liabilities


1,419,533



1,308,139Stockholders' (deficit):Common stock, $.0001 par value,200,000,000 shares authorized, 5,427,625 issuedand 5,123,700 outstanding


543



543Additional paid-in capital


2,896,186



2,896,186Accumulated (deficit)


(3,404,572
)


(3,230,231
)(507,843
)


(333,502
)Treasury stock, at cost, 303,925 shares


(148,051
)


(148,051
)(655,894
)


(481,553
)Other comprehensive income:Unrealized (loss) on marketable securities


(8,659
)


(56,870
)(664,553
)


(538,423
)TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT)

$
754,980


$
769,716







See accompanying notes to the financial statements.
 1




Mammatech CorporationStatements of Comprehensive OperationsThree and Nine Months Ended May 31, 2010 and 2009(Unaudited)Three months


Nine Months2010


2009


2010


2009Sales, net

$
47,195


$
82,916


$
226,682


$
224,651Cost of sales


31,463



17,030



80,180



116,557Gross profit


15,732



65,886



146,502



108,094Selling, general and administrative expenses


99,352



104,009



312,703



344,260(Loss) from operations


(83,620
)


(38,123
)


(166,201
)


(236,166
)Other income and (expense):(Loss) on sale of investment securities


(37,579
)


-



(27,796
)


-Interest and dividend income


4,775



4,279



19,656



16,162(32, 804
)


4,279



(8,140
)


16,162(Loss) before income taxes


(116,424
)


(33,844
)


(174,341
)


(220,004
)Provision for income taxes


-



-



-



-Net (loss)

$
(116,424
)

$
(33,844
)

$
(174,341
)

$
(220,004
)Basic and fully diluted earnings per share:Net  (loss)

$
(0.02
)

$
(0.01
)

$
(0.03
)

$
(0.04
)Weighted average shares


5,427,625



5,427,625



5,427,625



5,427,625Net (loss)

$
(116,424
)

$
(33,844
)

$
(174,341
)

$
(220,004
)Unrealized gain (loss) from investments, net of income taxes


30,159



41,104



48,210



(45,793
)Comprehensive income (loss)

$
(86,265
)

$
7,260


$
(126,131
)

$
(265,797
)


See accompanying notes to the financial statements.
 2


Mammatech Corporation

Statements of Cash Flows

Nine Months Ended May 31, 2010 and 2009(Unaudited)2010



2009Net (loss)
$
(174,341
)

$
(220,004
)Adjustments to reconcile net (loss) to netcash (used in) operating activities:Depreciation and amortization

16,296



15,000Realized loss on the sale of marketable securities

27,796



-Changes in assets and liabilities:

Decrease in accounts receivable, trade

9,707



61,088(Increase) in inventory

(8,695
)


12,274Decrease in other assets

500



(501
)Increase in accounts payable and accrued salaries - officers

96,092



111,139Increase (decrease) in accounts payable and accrued expenses

15,302



(7,815
)Net cash  (used in) operating activities

(17,343
)


(28,819
)Cash flows from investing activities:Purchase of available for sale securities

(353,433
)


(151,545
)Proceeds from the sale of available for sale securities

388,256



--Purchase of fixed assets

(1,399
)


(738
)Net cash provided by/(used in) investing activities

33,424



(152,283
)Cash flows from financing activities:Net cash (used in) financing activities

-



-Increase (decrease) in cash

16,081



(181,102
)Cash and cash equivalents,beginning of period

50,313



335,427Cash and cash equivalents,end of period
$
66,394


$
154,325






See accompanying notes to the financial statements.
 3




MAMMATECH CORPORATION


NOTES TO FINANCIAL STATEMENTS


MAY 31, 2010


(UNAUDITED)





(1)           Summary of Significant Accounting Policies





Basis of Presentation





The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles (GAAP) for interim financial information and Article 8 of Regulation S-X. They do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included.





The results of operations for the periods presented are not necessarily indicative of the results to be expected for the full year.  For further information, refer to the financial statements of the Company as of August 31, 2009, and for the two years then ended, including notes thereto included in the Company’s Form 10-K.





Recently Adopted Accounting Standards





The Company evaluates the pronouncements of various authoritative accounting organizations, primarily the Financial Accounting Standards Board (“FASB”), the SEC, and the Emerging Issues Task Force (“EITF”), to determine the impact of new pronouncements on US GAAP and the impact on the Company.





In June 2009, FASB established the Accounting Standards Codification (“ASC”) as the single source of authoritative US GAAP to be applied by nongovernmental entities.  Rules and interpretive releases of the SEC under authority of federal securities laws are also sources of authoritative US GAAP for SEC registrants.  The ASC is a new structure which took existing accounting pronouncements and organized them by accounting topic.  The ASC did not change current US GAAP, but was intended to simplify user access to all authoritative US GAAP by providing all the relevant literature related to a particular topic in one place.  All previously existing accounting standards were superseded and all other accounting literature not included in the ASC is considered non-authoritative.  New accounting standards issued subsequent to June 30, 2009 will be communicated by the FASB through Accounting Standards Updates (ASUs).  The ASC was effective during the period ended November 30, 2009.  Adoption of the ASC did not have an impact on the Company’s financial position, results of operations or cash flows.





Subsequent Events - In May 2009, the ASC guidance for subsequent events was updated to establish accounting and reporting standards for events that occur after the balance sheet date but before financial statements are issued.  The guidance was amended in February 2010 via ASU No. 2010-09.  The standard sets forth: (i) the period after the balance sheet date during which management of a reporting entity should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements, (ii) the circumstances under which an entity should recognize events or transactions occurring after the balance sheet in its financial statements, and (iii) the disclosures that an entity should make about events or transactions occurring after the balance sheet date in its financial statements.  The amended ASU was effective immediately and its adoption had no impact on the Company’s financial position, results of operations or cash flows.





Fair Value Measurements – In January 2010, ASU No. 2010-06 amended existing disclosure requirements about fair value measurements by adding required disclosures about items transferring into and out of levels 1 and 2 in the fair value hierarchy; adding separate disclosures about purchase, sales, issuances, and settlements relative to level 3 measurements; and clarifying, among other things, the existing fair value disclosures about the level of disaggregation.  The ASU was adopted during the period ended February 28, 2010, and its adoption had no impact on the Company’s financial position, results of operations or cash flows.




4





(2)           Use of Estimates





The preparation of the Company's financial statements requires management to use estimates and assumptions. These estimates and assumptions affect the reported amounts in the financial statements and accompanying notes. Actual results could differ from these estimates.





(3)           Reclassifications





Certain reclassifications have been made to the prior year financial statements in order to conform to current year presentation.





(4)           Earnings (Loss) Per Share





Basic earnings(loss) per share is calculated by dividing net income (loss) by the weightedaverage number of common shares outstanding for the period. Diluted earnings(loss) per share is calculated by dividing net income (loss) by the weightedaverage number of common shares and dilutive common stock equivalentsoutstanding. During periods when anti-dilutive, common stock equivalents are not considered in the computation.





(5)           Inventory





Inventory is stated at the lower of cost, determined on a first in, first out basis, or market value. Inventory consists principally of finished goods and packaging materials.





(6)           Available For Sale Securities





At May 31, 2010 and August 31, 2009, marketable securities consisted of mutual funds and equity securities with a fair market value of $407,796 and $422,204, respectively.  The cost basis of these securities was $416,455 and $479,074, respectively.





The unrealized holding losses on available-for-sale securities included in accumulated other comprehensive income as a component of stockholders' equity decreased by $48,210 during the nine months ended May 31, 2010, and increased by $45,793 for the nine months ended May 31, 2009.





(7)            Subsequent Events


The Company has evaluated all transactions subsequent to the balance sheet date of May 31, 2010, through the date of issuance of these financial statements and has determined that there are no subsequent events that require disclosure.






5






ITEM 2.          MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL


CONDITION AND RESULTS OF OPERATIONS







Forward-Looking Statements




The following discussion should be read in conjunction with the accompanyingfinancial statements and notes thereto included within this Quarterly Report onForm 10-Q. In addition to historical information, the information in thisdiscussion contains forward-looking statements within the meaning of Section 27Aof the Securities Act of 1933, as amended, and Section 21E of the SecuritiesExchange Act of 1934, as amended. These forward-looking statements involve risksand uncertainties, including statements regarding the Company’s capital needs,business strategy and expectations. Any statements contained herein that are notstatements of historical facts may be deemed to be forward-looking statements.In some cases, you can identify forward-looking statements by terminology suchas “may”, “will”, “should”, “expect”, “plan”, “intend”, “anticipate”, “believe”,estimate”, “predict”, “potential” or “continue”, the negative of such terms orother comparable terminology. Actual events or results may differ materially. Inevaluating these statements, you should consider various factors described inthis Quarterly Report, including the risk factors accompanying this QuarterlyReport, and, from time to time, in other reports the Company files with theSecurities and Exchange Commission. These factors may cause the Company’s actualresults to differ materially from any forward-looking statement. The Companydisclaims any obligation to publicly update these statements, or disclose anydifference between its actual results and those reflected in these statements.The information constitutes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.




Company Background




We are engaged in the sale of a patented breast tumor detection training system the MammaCare SystemTM (“MammaCare”). Using life-like models of a human female breast, MammaCare is designed to train individuals to perform effective manual breast examination. MammaCare breast models are the medical standard for training clinicians and women to perform effective breast examinations. The models contain simulated tumors of varying sizes, and polymers that simulate normal breast nodularity, or "lumpiness," that characterizes most breast tissue.





Although a woman or clinician can never determine by feel alone whether a lump is benign or malignant, detection of tumors in the size range simulated by the models is a critical step in early diagnosis of malignancies. Thus, we believe that by training women to palpate the breast model (and their own breasts) properly, the MammaCare will lead to early detection of breast cancer and thus reduce morbidity and mortality due to this disease.





MammaCare is available in several forms, all of which contain at least one of our breast models. Originally, a client was given private training, after which she was provided with a take-home breast model and other materials. Now, women can view a video tape developed by us that teaches the proper use of the model(s) and how to perform an extremely thorough breast examination technique. The practice model is designed to permit a woman to reinforce her lump detection skills periodically and serves as a comparative standard as she palpates her own breast.





Our primary marketing strategy is designed to encourage sales through physicians, hospitals diagnostic centers, and more recently, directly to women. Under this marketing approach, health care providers purchase the MammaCare Professional Learning System directly from us. Our sole revenues come from the sales of MammaCare Systems and any accompanying trainings.





The MammaCare Professional Learning System consists of a teaching model, a24-minute video cassette, and practice kit. The teaching model is a patentedbreast model, designed to teach the difference between the feel of normal,nodular breast tissue and the feel of small lesions. The video cassette guidesthe learner through a series of step-by-step exercises, first on the models, thenon her own breast tissue. This is intended to lead to mastery level proficiencyin palpation, search technique and lump detection. The practice kit contains a“take-home” breast model, a written review manual, a reminder calendar and a record booklet.








6





Over 1,000 physicians, hospitals and diagnostic centers throughout the United States use MammaCare breast models and training programs to teach physicians, medical students, nurses, nursing students, radiological technologists, and women to perform proficient breast examination. No assurances can be given that the Company’s marketing approach will be successful. For the Company to achieve profitability, MammaCare must be provided to an ever increasing number of women.








Recent Developments





During the three months ended May 31, 2010, the Company trained and certified clinical personnel from United States and European Union medical centers including 12 MammaCare Specialists, 5 MammaCare Clinical Breast Examiners (CBE) and 15 MammaCare Breast Self Exam (BSE) Instructors. Twelve of the 15 new BSE certifications were produced by the Company’s German affiliate. During the quarter, we certified one MammaCare Associate and re-certified two MammaCare Associates.





We are continuing to pursue our interest in establishing additional training sites both in the United States and abroad.





We continue to expend resources to complete development of our patented tactile computer technology tentatively termed the Palpation Assessment Device (PAD). The PAD is the first computer-based system that teaches and evaluates manual breast examination skills. Currently, the PAD continues to undergo testing as part of the MammaCare training programs. MammaCare PAD technology has been sited in a number of academic institutions. Its first operational deployment is at the Florida State University Medical School in Tallahassee where it is being used to train first and second-year medical students. However, there can be no assurances that significant income will result from these programs or that additional training institutions will acquire the service.





After the close of the second quarter in 2009, we made our MammaCare Personal Learning System available to the public on Amazon.com. As of the end of the third quarter in 2010, the placement of our Personal Learning System on the Amazon website resulted in a modest sales. Forecasts of revenue resulting from this marketing effort remain uncertain.





During the last quarter, we completed a redesign of our website in an effort to increase accessibility by a greater variety of potential customers. We continue to update its website. We also continue our marketing strategy of direct mail advertising materials to medical centers, breast centers, health departments, medical and nursing schools, physicians, and other health care professionals on a monthly schedule.





We continue to seek a larger partner in the healthcare industry to increase the distribution of its products.








Results of Operations





Comparison of Three Months Ended May 31, 2010 and May 31, 2009





The Company’s net sales were $47,195 for the three months ended May 31, 2010 compared to $82,916 for the three months ended May 31, 2009, a decrease of approximately 43% from the prior period.  Sales of the Company's products decreased 42%, from $50,665 to $29,295, while sales from trainings decreased 45%, from $32,251 to $17,900.





The Company’s cost of sales were $31,463 for the three months ended May 31, 2010 compared to $17,030 for the three months ended May 31, 2009, an increase of approximately 85%.  Cost of product sales were $11,563 for the three months ended May 31, 2010 compared to $7,747 for the three months ended May 31, 2009, an increase of 49%. This increase is primarily due to increased numbers of breast models and educational materials provided free of charge to trainees. Cost of trainings and certifications were $19,900 for the three months ended May 31, 2010 compared to $9,283 for the three months ended May 31, 2009, an increase of 114%.






7





Gross profit for the three months ended May 31, 2010 and 2009 was $15,732 and $65,886 respectively, a decrease of approximately 76%, due largely to increased costs and decreased sales. Increased cost of sales resulted in a gross profit margin of 33% for the three months ended May 31, 2010 compared to 79% for the three months ended May 31, 2009.





Selling, general and administrative expenses decreased to $99,352 for the three months ended May 31, 2010 from $104,009 for the three months ended May 31, 2009.





Loss from operations for the three months ended May 31, 2010 and 2009 was $83,620 and $38,123, respectively, an increase of approximately 119%. The Company had a net loss of $116,424 for the three months ended May 31, 2010 and net loss of $33,844 for the three months ended May 31, 2009, an increase of approximately 244%.








Comparison of Nine months Ended May 31, 2010 and May 31, 2009





The Company’s net sales were $226,682 for the nine months ended May 31, 2010 compared to $224,651 for the nine months ended May 31, 2009, an increase of approximately 1%.  Sales of the Company's products increased 6.75%, from $134,551 to $143,632, while sales from trainings decreased 7.82%, from $90,100 to $83,050.





The Company’s cost of sales were $80,180 for the nine months ended May 31, 2010 compared to $116,557 for the nine months ended May 31, 2009.  Cost of product sales were $42,774 for the nine months ended May 31, 2010 compared to $65,019 for the nine months ended May 31, 2009, a decrease of 34%.  This decrease is due to control of expenses. Cost of trainings were $37,406 for the nine months ended May 31, 2010 compared to $51,538 for the nine months ended May 31, 2009, a decrease of 27%.  This decrease in cost of trainings is due to the price difference between individual trainings and the different reimbursements made to trainers for their services.




Gross profit for the nine months ended May 31, 2010 and 2009 was $146,502 and $108,094 respectively, an increase of approximately 36% due to a combination of a slight increase in sales and consistent expenses. The decreased cost of sales resulted in a gross profit margin of 65% for the nine months ended May 31, 2010 compared to 48% for the nine months ended May 31, 2009.





Selling, general and administrative expenses decreased to $312,703 for the nine months ended May 31, 2010 from $344,260 for the nine months ended May 31, 2009.





Loss from operations for the nine months ended May 31, 2010 and May 31, 2009 was $166,201 and $236,166 respectively, a decrease of 30%.  The Company had a net loss of $174,341 for the nine months ended May 31, 2010 and net loss of $220,004 for the nine months ended May 31, 2009.






8






Liquidity and Capital Resources





Net cash used in operating activities was $17,343 and $28,819 in the nine months ended May 31, 2010 and 2009, respectively.





Net cash provided by/(used in) investing activities was $33,424 and ($152,283) in the nine months ended May 31, 2010 and 2009, respectively. The increase of $185,707 was primarily due to increase in proceeds from the sale of securities.





To the extent the Company needs to repay accrued salaries to its officers, we will have immediate liquidity problems.  At May 31, 2010, the Company has accounts payable and accrued salaries owing to its officers of $1,384,538.  During the three months ended May 31, 2010, the Company had a net loss of $116,424 and unrealized gain from investments of $30,159.





The Company suffered recurring losses from operations and has an accumulated deficit of $3,404,572 at May 31, 2010.  At May 31, 2010, the Company had cash on hand of $66,394 and available for sale securities with a market value of $407,796. The Company intends to use its capital resources to fund its product development and to expand distribution.  The Company believes these capital resources are sufficient to allow the Company to attract potential interest from a strategic partner and to make it an attractive candidate for grant funding from public and private sources.  However, there can be no assurance these capital resources will be sufficient to allow the Company to implement its marketing strategies or to become profitable.








Off-Balance Sheet Arrangements





The Company has no off-balance sheet arrangements.








ITEM 3.  Quantitative and Qualitative Disclosures About Market Risk





N/A





ITEM 4.  Controls and Procedures





(a)           During the fiscal period covered by this report, our management, with the participation of the Chief Executive Officer and Chief Financial Officer of the Company, carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the required time periods and are designed to ensure that information required to be disclosed in our reports is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.




(b)           There was no change in our internal control over financial reporting (as defined in Rule 13(a)-15(e)) that occurred during the quarter ended May 31, 2010 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.






9








PART II – OTHER INFORMATION








Item 1.  LEGAL PROCEEDINGS





No legal proceedings are pending or threatened to the best of our knowledge.





Item 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS





None





Item 3.  DEFAULTS UPON SENIOR SECURITIES





None





Item 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS





None





Item 5.  OTHER INFORMATION





None





Item 6.  EXHIBITS





The following is a complete list of exhibits filed as part of this Form 10-Q. Exhibit numbers correspond to the numbers in the Exhibit Table of Item 601 of Regulation S-K.





31
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.





32
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.






10







SIGNATURES





In accordance with the requirements of Section 12 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 CORPORATIONBy: /s/Henry PennypackerDated: June 30, 2010Henry Pennypacker,Chief Executive OfficerBy: /s/Mary B. SellersDated: June 30, 2010Mary B. SellersChief Financial Officer






11