Anoteros, Inc. - FORM 10-Q - August 15, 2011

Attached files

file	filename
EX-31.01 - EXHIBIT 31.01 - Anoteros, Inc.	ex311.htm
EX-31.02 - EXHIBIT 31.02 - Anoteros, Inc.	ex312.htm
EX-32.02 - EXHIBIT 32.02 - Anoteros, Inc.	ex322.htm
EX-32.01 - EXHIBIT 32.01 - Anoteros, Inc.	ex321.htm

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 Quarter Ended: June 30, 2011

Commission File Number: 000-52561

Anoteros, Inc.

(Exact name of registrant as specified in its charter)

Nevada

(State of Incorporation)

88-0368849

(IRS Employer Identification No.)

24328 Vermont Avenue, #300,

Harbor City, CA 90710

(Address of principal executive offices)

310-997-2482

(Registrant’s Telephone Number, Including Area Code)

Indicated 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 90 days.

Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). o Yes o No (Not required)

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 definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer o	Accelerated Filer o
Non-Accelerated Filer o	Smaller Reporting Company x

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. As of August 9, 2011, there were 53,810,624 shares of the issuer's Common Stock, $0.001 par value, issued and outstanding.

ANOTEROS INC. AND SUBSIDIARY

Report on Form 10-Q

PART I – FINANCIAL INFORMATION
Item 1.	Financial Statement	3
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	10
Item 3.	Quantitative and Qualitative Disclosure About Market Risk	13
Item 4.	Controls and Procedures	13
PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	13
Item 1A.	Risk Factors	13
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	13
Item 3.	Default Upon Senior Securities	14
Item 4.	[Reserved]	14
Item 5.	Other Information	14
Item 6.	Exhibits	15

Page 2

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

ANOTEROS, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

ASSETS

	June 30,				December 31,
	2011				2010*
	(Unaudited)
CURRENT ASSETS
Cash		$	33,766			$	18
Inventory			1,291				-

Total Current Assets			35,057				18

OTHER ASSETS
Artwork			31,915				-
Total Other Assets			31,915				-

TOTAL ASSETS		$	66,972			$	18

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES
Accounts payable and accrued expenses		$	539,843			$	414,515
Accounts payable and accrued expenses - related party			95,489				-
Accrued interest			96,211				551,823
Accrued interest - related party			38,689				-
Notes payable - related party			80,925				9,769
Notes payable			164,470				893,887
Total Current Liabilities			1,015,627				1,869,994

TOTAL LIABILITIES			1,015,627				1,869,994

STOCKHOLDERS' EQUITY (DEFICIT)
Preferred stock; 25,000,000 shares authorized,
at $0.001 par value, no shares issued and outstanding			-				-
Common stock; 100,000,000 shares authorized,
at $0.001 par value, 53,810,624 and 37,113,092
shares issued and outstanding, respectively			53,810				37,113
Additional paid-in capital			21,744,084				11,446,524
Accumulated deficit			(22,746,549	)			(13,353,613	)

Total Stockholders' Equity (Deficit)			(948,655	)			(1,869,976	)

TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY (DEFICIT)		$	66,972			$	18

*Derived from audited financial statements

The accompanying notes are an integral part of these consolidated financial statements.

Page 3

ANOTEROS, INC. AND SUBSIDIARIES

Consolidated Statements of Operations

(Unaudited)

	For the Three Months Ended						For the Six Months Ended
	June 30,						June 30,
	2011			2010			2011			2010
REVENUES	$	555		$	298,221		$	1,667		$	413,641
COST OF SALES		132,571			224,236			227,894			310,052
GROSS PROFIT (LOSS)		(132,016	)		73,985			(226,227	)		103,589

OPERATING EXPENSES
Professional fees		115,805			18,639			7,368,966			1,479,397
General and administrative expenses		148,728			190,927			165,871			406,995

Total Operating Expenses		264,533		-	209,566			7,534,837		-	1,886,392

OPERATING LOSS		(396,549	)		(135,581	)		(7,761,064	)		(1,782,803	)

OTHER INCOME AND (EXPENSE)
Interest expense		(8,021	)		(40,666	)		(39,797	)		(84,747	)
Gain on settlement of debt		49,125			-			49,125			-
Gain (loss) on conversion of debt		(63,896	)		-			(1,641,200	)		10,883

Total Other Income and Expense		(22,792	)		(40,666	)		(1,631,872	)		(73,864	)

LOSS BEFORE INCOME TAXES		(419,341	)		(176,247	)		(9,392,936	)		(1,856,667	)
PROVISION FOR INCOME TAXES		-			-			-			-
NET LOSS	$	(419,341	)	$	(176,247	)	$	(9,392,936	)	$	(1,856,667	)

BASIC LOSS PER SHARE	$	(0.01	)	$	(0.00	)	$	(0.21	)	$	(0.04	)

WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING:
BASIC AND DILUTED		52,134,043			49,331,031			45,531,212			48,554,147

The accompanying notes are an integral part of these consolidated financial statements.

Page 4

ANOTEROS, INC. AND SUBSIDIARIES

Consolidated Statements of Stockholders' Equity (Deficit)

													Total
							Additional						Stockholders'
	Common Stock						Paid-in			Accumulated			Equity
	Shares			Amount			Capital			Deficit			(Deficit)
Balance, December 31, 2009		47,216,823		$	47,217		$	9,526,720		$	(11,194,621	)	$	(1,620,684	)
Cancellation of common stock
issued as founders' shares		(12,237,519	)		(12,238	)		12,238			-			-
Common stock issued for cash		542,911			543			498,557			-			499,100
Common stock issued for services		1,553,349			1,553			1,426,447			-			1,428,000
Common stock and warrants issued in
settlement of debt		17,948			18			16,482			-			16,500
Common stock issued
as interest on note payable		19,580			20			17,980			-			18,000
Stock offering costs		-			-			(51,900	)		-			(51,900	)
Net loss for the year
ended December 31, 2010		-			-			-			(2,158,992	)		(2,158,992	)
Balance, December 31, 2010		37,113,092			37,113			11,446,524			(13,353,613	)		(1,869,976	)

Common stock issued for services (unaudited)		7,778,230			7,778			7,142,780			-			7,150,558
Common stock issued in settlement of debt (unaudited)		3,470,415			3,470			3,186,898			-			3,190,368
Recapitalization (unaudited)		3,448,887			3,449			(264,064	)		-			(260,615	)
Common stock sold for cash (unaudited)		2,000,000			2,000			198,000			-			200,000
Fair value of employee stock options (unaudited)		-			-			33,946			-			33,946
Net loss for the six months
ended June 30, 2011 (unaudited)		-			-			-			(9,392,936	)		(9,392,936	)
Balance, June 30, 2011 (unaudited)		53,810,624		$	53,810		$	21,744,084		$	(22,746,549	)	$	(948,655	)

The accompanying notes are an integral part of these consolidated financial statements.

Page 5

ANOTEROS, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(Unaudited)

	For the Six Months Ended
	June 30,
	2011			2010
OPERATING ACTIVITIES
Net loss	$	(9,392,936	)	$	(1,856,667	)
Adjustments to reconcile net loss to net cash
used by operating activities:
Common stock issued for services		7,150,558			1,428,000
Warrants and options issued for services		33,946			-
Gain on settlement of debt		(49,125	)
Loss (gain) on conversion of debt		1,641,200			(10,883	)
Changes in operating assets and liabilities
Accounts receivable		-			(238,122	)
Prepaid expenses		-			8,835
Accounts payable and accrued expenses		327,557			119,597
Related party accounts payable and accrued expenses		13,614			-

Net Cash (Used in) Operating Activities		(275,186	)		(549,240	)

INVESTING ACTIVITIES		-			-

FINANCING ACTIVITIES

Cash acquired in acquisition of subsidiary		168			-
Proceeds from notes payable - related party		297,646			-
Repayments of notes payable - related party		(176,380	)		19,258
Repayments of notes payable		(12,500	)		13,050
Common stock issued for cash		200,000			499,101

Net Cash Provided by Financing Activities		308,934			531,409

NET INCREASE (DECREASE) IN CASH		33,748			(17,831	)
CASH AT BEGINNING OF PERIOD		18			17,831

CASH AT END OF PERIOD	$	33,766		$	-

SUPPLEMENTAL DISCLOSURES OF
CASH FLOW INFORMATION

CASH PAID FOR:
Interest	$	-		$	-
Income Taxes		-			-

NON CASH FINANCING ACTIVITIES:
Common stock issued to settle accounts and notes payable	$	3,190,368		$	16,500
Net liabilities assumed in acquisition		260,615			-

The accompanying notes are an integral part of these consolidated financial statements.

Page 6

ANOTEROS, INC. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

June 30, 2011 and December 31, 2010

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying unaudited balance sheets of Anoteros, Inc. at June 30, 2011 and related unaudited statements of operations, stockholders' equity and cash flows for the three and six months ended June 30, 2011 and 2010, have been prepared by management in conformity with United States generally accepted accounting principles. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature. It is suggested that these financial statements be read in conjunction with the financial statements and notes thereto included in the December 31, 2010 audited financial statements. Operating results for the period ended June 30, 2011, are not necessarily indicative of the results that can be expected for the fiscal year ending December 31, 2011 or any other subsequent period.

NOTE 2 – GOING CONCERN

The Company's financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. During the six months ended June 30, 2011 the Company realized a net loss of $9,392,936 and has incurred an accumulated deficit of $22,746,549. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.

In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management's plan is to obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses and seeking equity and/or debt financing. However management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, COA Holdings, Inc and Doolittle Edutainment, Corp. All significant intercompany balances and transactions have been eliminated.

Recent Accounting Pronouncements

The Company has evaluated recent accounting pronouncements and their adoption has not had or is not expected to have a material impact on the Company’s financial position, or statements.

Page 7

ANOTEROS, INC. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

June 30, 2011 and December 31, 2010

NOTE 4 – RELATED PARTY NOTES PAYABLE

Prior to the acquisition of Anoteros, Inc., a shareholder has made several advances, and the Company has made some partial payments on the advances. As of June 30, 2011, the principal balance of these advances totaled $925. The loans accrue interest at 8.0% per annum. Accrued interest at June 30, 2011 was $38,689. The loans are due on demand. During the six months ended June 30, 2011 the Company had borrowed $1,808 and made repayments of $176,380. Interest of $2,291 was accrued and the Company paid $23,785 toward the accrued interest balance.

During the six months ended June 30, 2011, the Company borrowed $293,000 from other related parties. The payables do not accrue interest, are due on demand and are unsecured. The Company repaid $15,000 of these payables during the six months ended June 30, 2011.

During the six months ended June 30, 2011, the Company converted $225,289 of its outstanding payables to related parties into 342,403 shares of common stock valued at $205,442 based on the fair value of the stock at time of issuance. The Company accordingly recognized a gain on the conversion of the notes of $19,847.

NOTE 5 – NOTES PAYABLE

During the year ended December 31, 2010, the Company borrowed $19,190 from unrelated parties. The notes bears interest at 15% per annum, are unsecured and due on demand. As of December 31, 2010, the Company had a total of $893,887 in promissory notes outstanding. The Company made principal payments totaling $6,140 during the year and interest of $551,823 was accrued. During the year ended 2010, the Company converted principle and accrued interest totaling $27,383 into 27,500 share of common stock valued at $16,500 based on the fair value of the stock at time of issuance. The Company accordingly recognized a gain on the conversion of the notes of $10,833.

During the six months ended June 30, 2011, the Company made principal payments totaling $12,500 and accrued interest of $37,882 on these notes. During the six months ended June 30, 2011, the Company converted principle of $830,385 and accrued interest of $493,494 into 4,974,874 shares of common stock valued at $2,984,926 based on the fair value of the stock at time of issuance. The Company accordingly recognized a loss on the conversion of the notes of $1,661,047.

NOTE 6 – MERGER

Effective April 29, 2011, Anoteros, Inc., entered into an Agreement and Plan of Merger with COA Holding, Inc. (“COAH”), a Nevada corporation, whereby Anoteros acquired COAH through the merger of its newly formed subsidiary, Antero Payment Solutions, Inc. Antero Payment Solutions, Inc. was the surviving corporation and a wholly owned subsidiary of Anoteros, Inc. As a result of the merger, COAH will continue its current line of business as a wholly-owned subsidiary of Anoteros and will conduct its future operations under the name Antero Payment Solutions, Inc. Upon completion of the transaction, the former COAH shareholders owned approximately 48,361,737 restricted shares Anoteros, Inc. common stock, representing 93% of the outstanding common stock of Anoteros. As a result, the acquisition has been recorded as a reverse merger with COAH being treated as the accounting acquirer and the Company as the legal acquirer (accounting acquiree).

As a result the Merger Agreement:

each outstanding share of COAH common stock was cancelled, extinguished and converted into and become the right to receive their pro rata portion of the Merger Consideration which shall be equal to the number of shares of COAH Common Stock held by each COAH Shareholder multiplied by the Exchange Ratio of 0.739127395 (the “Exchange Ratio”), rounded, if necessary, up to the nearest whole share of restricted Common Stock of the Company. Based on the Exchange Ratio, as a result of the Merger, the COAH Shareholders own approximately 48,361,737 restricted shares of the Company.

Page 8

ANOTEROS, INC. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

June 30, 2011 and December 31, 2010

NOTE 6 – MERGER (CONTINUED)

each COAH Warrant to purchase shares of COAH Common Stock, whether vested or unvested, ceased to represent a right to acquire shares of COAH Common Stock and were be converted, without any action on the part of such Warrant Holder, into a warrant to purchase shares of restricted the Company’s Common Stock on the same terms and conditions as were applicable under such COAH Warrant prior to the Effective Time. The number of shares of Company Common Stock subject to each such Company Warrant is equal to the number of shares of COAH Common Stock subject to each such COAH Warrant multiplied by the Exchange Ratio, rounded, if necessary, up to the nearest whole share of Company Common Stock, and such Company Warrant shall have an exercise price per share (rounded to the nearest cent) equal to the per share exercise price specified in such COAH Warrant divided by the Exchange Ratio;

the number of shares which each Convertible Note is entitled to convert into COAH Common Stock, was adjusted such that such Convertible Note represents a right to acquire the number of shares of Company Common Stock equal to the number of shares of COAH Common Stock subject to each such Convertible Note multiplied by the Exchange Ratio, rounded, if necessary, up to the nearest whole share of Company Common Stock, and have a conversion price per share (rounded to the nearest cent) equal to the per share conversion price specified in such Convertible Note divided by the Exchange Ratio.

A description of the specific terms and conditions of the Merger is set forth in the Merger Agreement filed as an Exhibit 2.01 to the Form 8-K filed by Anoteros on March 30, 2011.

NOTE 7 – COMMON STOCK

Effective April 29, 2011, the Company issued 3,448,887 shares of stock in a recapitalization with Anoteros, Inc. Immediately following the acquisition, the shareholders of the Company owned approximately 93% of the total shares outstanding of the combined entity. Accordingly, the acquisition has been recorded as a reverse merger with COA Holdings, Inc being treated as the accounting acquirer and the Company as the legal acquirer (accounting acquiree). Thus, the consolidated financial statements reflect the operating history of COA Holdings, Inc.

During the six months ended June 30, 2011, the Company issued 3,470,415 shares of common stock to extinguish liabilities and accrued interest totaling $1,549,168. The shares were valued at $3,190,368 based on the estimated fair value of the shares on the dates of issuance. Accordingly, the Company recognized a net loss on conversion of debt of $1,641,200.

During the six months ended June 30, 2011, the Company issued 7,778,230 shares of common stock to officers and consultants in exchange for services. The shares were valued based on the estimated fair value of the shares on the dates of issuance. Accordingly, the Company recorded $7,150,558 as professional fees.

During the six months ended June 30, 2011, the Company issued 2,000,000 shares of common stock for cash proceeds of $200,000.

NOTE 8 – SUBSEQUENT EVENTS

Management performed an evaluation of Company activity through the date the financial statements were issued, and has concluded that there are no other significant subsequent events requiring disclosure.

Page 9

ANOTEROS, INC. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

June 30, 2011 and December 31, 2010

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

CAUTIONARY FORWARD - LOOKING STATEMENT

Statements included in this Management's Discussion and Analysis of Financial Condition and Results of Operations, and in future filings by the Company with the Securities and Exchange Commission, in the Company's press releases and in oral statements made with the approval of an authorized executive officer which are not historical or current facts are "forward-looking statements" made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and are subject to certain risks and uncertainties that could cause actual results to differ materially from historical earnings and those presently anticipated or projected. The Company wishes to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. The following important factors, among others, in some cases have affected and in the future could affect the Company's actual results and could cause the Company's actual financial performance to differ materially from that expressed in any forward-looking statement: (i) the extremely competitive conditions that currently exist in the three dimensional software development marketplace are expected to continue, placing further pressure on pricing which could adversely impact sales and erode profit margins; (ii) many of the Company's major competitors in its channels of distribution have significantly greater financial resources than the Company; and (iii) the inability to carry out marketing and sales plans would have a materially adverse impact on the Company's projections. The foregoing list should not be construed as exhaustive and the Company disclaims any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

Company Overview

Anoteros Inc. (referred to as “Anoteros”, the “Company”, “we”, “us”, or “our”) was incorporated on September 25, 1996 under the laws of the State of Nevada, as Out of Bounds Sports Co. and initially entered the sportswear market, manufacturing and marketing tee shirts, golf shorts and hats with the “OB Golf” and “OB Sports” logo.

Thereafter, the Company turned its focus to the children’s education and entertainment arena utilizing the gorilla charter “Doolittle” depicted in various sporting activities and worked on various story lines and character treatments. We completed the final story line and draft of Book 1 – The Story of Doolittle, an Exceptional Young Gorilla in May 2000. The story line and preliminary draft of Book 2 – The Adventures of Dynamic Doolittle – Episode 1 “The Problem with Paulie Python” was completed in October 2000 and, the story line and preliminary draft of Book 3 - Doolittle’s Very, Very Bad Day was completed in May 2001.

On February 19, 2002, the Company formed Doolittle Edutainment Corp., a Nevada corporation (“Doolittle Edutainment”) as a wholly-owned subsidiary, for the purpose of holding the intellectual property and other assets relating to the Company’s Doolittle books and product line.

On September 22, 2004, the Company changed our name from Out of Bounds Sports Co. to Anoteros, Inc.

Quarterly Developments

On April 29, 2011, the Company closed an Agreement and Plan of Merger (the “Merger Agreement”) with COA Holdings, Inc., a Nevada corporation (“COAH”), Antero Payment Solutions, Inc., a Nevada corporation and wholly-owned subsidiary of Anoteros (“Merger Sub”), and certain Major Shareholders of COAH (the “Major Shareholders”) whereby Anoteros acquired COAH through the Merger of COAH with and into Merger Sub (the “Merger”) with Merger Sub being the surviving corporation, and the business of COAH continuing through Merger Sub, under the name Antero Payment Solutions, Inc., as a wholly-owned subsidiary of the Company. A description of the specific terms and conditions of the Merger is set forth in the Merger Agreement filed as an Exhibit 2.01 to the Form 8-K filed by the Company on March 30, 2011, and is incorporated herein by reference.

Page 10

ANOTEROS, INC. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

June 30, 2011 and December 31, 2010

Current Operations

We currently operate through our two wholly-owned subsidiaries, Antero Payment Solutions, Inc. and Doolittle Edutainment Corp.

Antero Payment Solutions, Inc.

Antero Payment Solutions, Inc. is a global provider of information management and electronic commerce systems for the financial services industry. The company has developed a wide range of e-commerce platforms to ensure secure electronic payments for checking, debit card, prepaid card and mobile payment applications; providing merchants with opportunities for lower cost structures and the potential to increase their client bases.

Doolittle Edutainment Corp.

Doolittle Edutainment Corp. is engaged in the children’s education and entertainment market, continues its plan for publication and distribution of its children books, and further development of additional books and exploitation of its intellectual property rights focused around its main character, “Doolittle.” Following the completion of its third title book in July 2007, the Company entered into an agreement with BookMasters Inc., to print an initial run of 250 of each of the first three book titles for marketing and presentation purposes to various children's literary agents to seek publication. With this printing of the first three titles the copyright process was completed and these titles entered into the Library of Congress. In September 2009, the Company proceeded with its 2nd printing of 100 each of the Doolittle book series of Books 1, 2 and 3, which books are made available for sale on the Company’s website and through various distribution channels it is working to secure.

Doolittle Option Agreement

Pursuant to the terms of the Merger Agreement, the Company entered into an Option Agreement with George G. Chachas, under which George G. Chachas will have the Option to call and acquire all of the capital stock of Doolittle Edutainment Corp. Mr. Chachas granted the Company with the Option to put all of the capital stock of Doolittle Edutainment Corp. (including all assets and intellectual property owned by Doolittle Edutainment) and liabilities associated with Doolittle Edutainment Corp., and of the Company, as of June 30, 2011, to Mr. Chachas, which would result in the elimination of Doolittle Edutainment as a business unit and all liabilities of the Company will transfer to Doolittle Edutainment. The foregoing is a summary of the Option Agreement. The Option Agreement is filed as an Exhibit 10.07 to the Form 8-K filed by the Company on May 3, 2011, which is incorporated herein by reference.

Results of Operations

Upon completion of the transaction, the former COAH shareholders owned approximately 48,361,737 restricted shares Anoteros, Inc. common stock, representing 93% of the outstanding common stock of Anoteros. As a result, the acquisition has been recorded as a reverse merger with COAH being treated as the accounting acquirer and the Company as the legal acquirer (accounting acquiree). As such, the activities and results of operations for both COAH and Anoteros have been combined as of the acquisition date. The comparative figures to be mentioned below include only the operations of COAH

Three months ended June 30, 2011 compared to the three months ended June 30, 2010

For the three months ended June 30, 2011, the Company had revenue of $555 compared with revenue of $298,221 for the comparable period in 2010. The decrease in revenue is due to a cease in operations while the Company was restructured. As the Company enters into new distribution agreements, revenue is expected to increase.

Page 11

ANOTEROS, INC. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

June 30, 2011 and December 31, 2010

Cost of sales for the three months ended June 30, 2011 was $132,571 compared to $224,236 for the comparable period in 2010. The Company has incurred expenses in 2011 associated with resuming its operations. As revenues resume, the Company expected margins to be comparable to historical trends.

Operating expenses for the three months ended June 30, 2011 totaled $264,533 compared to $209,566 for the comparable period in 2010. This increase resulted primarily from the Company’s concerted efforts to resume operations, which resulted in increases in both professional and general and administrative expenses incurred during the current period.

The Company incurred a net loss of $396,549 during the three month period ended June 30, 2011 compared to $135,581 for the comparable period in 2010. As noted above, this increase resulted primarily from the Company’s concerted efforts to resume operations, which resulted in increases in both professional and general and administrative expenses incurred during the current period. Basic net loss per share was $(0.01) for the three month period ended June 30, 2011, compared to a basic net loss per share of $(0.00) from the comparable period of 2010.

Six months ended June 30, 2011 compared to the six months ended June 30, 2010

For the six months ended June 30, 2011, the Company had revenue of $1,667 compared with revenue of $413,641 for the comparable period in 2010. The decrease in revenue is due to a cease in operations while the Company was restructured. As the Company enters into new distribution agreements, revenue is expected to increase.

Cost of sales for the six months ended June 30, 2011 was $227,894 compared to $310,052 for the comparable period in 2010. The Company has incurred expenses in 2011 associated with resuming its operations. As revenues resume, the Company expected margins to be comparable to historical trends.

Operating expenses for the six months ended June 30, 2011 totaled $7,534,837 compared to $1,886,392 for the comparable period in 2010. This increase resulted primarily from the Company’s concerted efforts to resume operations, which resulted in increases in both professional and general and administrative expenses incurred during the current period. During the six month period in 2011, the Company issued stock and warrants valued at $7,184,504 for services rendered and realized a loss on the conversion of debt of $1,592,075. During 2010, the Company issued stock valued at $1,480,000 for services rendered and had a gain on the conversion of debts of $10,833. Absent these large non-cash expenses, operating expenses would have been $350,333 during the three months ended June 30, 2011 and $458,392 for the comparable period in 2010.

Other income and expenses for the six month period ended June 30, 2011 and 2010, were $1,631,872 and $ 73,864, respectively. The Company recorded interest expense of $39,797 and $84,747 during 2011 and 2010, respectively. The Company also realized a loss on the conversion of debt of $1,641,200 and a gain on the conversion of debts of $10,833 in 2010.

The Company incurred a net loss of $9,392,936 during the three month period ended June 30, 2011 compared to $1,856,667 for the comparable period in 2010. As noted above, this increase resulted primarily from the Company’s concerted efforts to resume operations, which resulted in increases in both professional and general and administrative expenses incurred during the current period as well as the large expenses associated with the non-cash expenses related to the settling of debt and issuing stock for services. Basic net loss per share was $(0.01) for the three month period ended June 30, 2011, compared to a basic net loss per share of $(0.00) from the comparable period of 2010.

Absent the large non-cash expenses mentioned above, net loss would have been $616,357 during the three months ended June 30, 2011 and $439,550 for the comparable period in 2010.

Liquidity and Capital Resources

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ANOTEROS, INC. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

June 30, 2011 and December 31, 2010

As of June 30, 2011, the Company had a negative working capital of $980,570 compared to a negative working capital of $1,869,976 at December 31, 2010. The change in working capital resulted primarily from the conversion of debt totaling $3,190,368 during the six months ended June 30, 2011.

During the six months ended June 30, 2011 the Company experienced negative cash flow of $275,186 from operating activities. The Company met its cash requirements during this period through its debt and equity financing activities, realizing a cash inflow from financing activities in the amount of $308,934.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit to the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified by the Securities and Exchange Commission’s rules and forms, and that information is accumulated and communicated to our management, including our principal executive and principal financial officer (whom we refer to in this periodic report as our Certifying Officer), as appropriate to allow timely decisions regarding required disclosure.

Our management evaluated, with the participation of our Certifying Officer, the effectiveness of our disclosure controls and procedures as of June 30, 2011, pursuant to Rule 13a-15(b) under the Securities Exchange Act. Based upon that evaluation, our Certifying Officer concluded that, as of June 30, 2011, our disclosure controls and procedures were not effective due to the fact that the Company is unable to maintain adequate segregation of duties and lacks an audit committee. The Company plans to address these material deficiencies as capital to do so becomes available.

Changes in Internal Controls

There have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended June 30, 2011 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II - OTHER INFORMATION.

ITEM 1. LEGAL PROCEEDINGS.

We are not a party to any pending legal proceeding. No federal, state or local governmental agency is presently contemplating any proceeding against the Company. No director, executive officer or affiliate of the Company or owner of record or beneficially of more than five percent of the Company's common stock is a party adverse to the Company or has a material interest adverse to the Company in any proceeding.

Item 1A. RISK FACTORS.

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 2. UNREGISTERED SALE OF EQUITY SECURITIES AND USE OF PROCEEDS.

None, except as previously reported.

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ANOTEROS, INC. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

June 30, 2011 and December 31, 2010

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None, except as previously reported.

ITEM 4. [REMOVED AND RESERVED]

ITEM 5. OTHER INFORMATION.

None, except as previously reported.

ITEM 6. EXHIBITS

1. Financial Statements. The unaudited Balance Sheet of Anoteros, Inc., and subsidiaries as of June 30, 2011 and the audited balance sheet as of December 31, 2010, the unaudited Consolidated Statements of Operations for the six month periods ended June 30, 2011 and 2010, the Consolidated Statements of Stockholders’ Equity (Deficit) from December 31, 2009 to June 30, 2011, and the unaudited Consolidated Statements of Cash Flows for the six-month periods ended June 30, 2011 and 2010, and together with the notes thereto, are included in this Quarterly Report on Form 10-Q.

3. Exhibits. The following exhibits are either filed as a part hereof or are incorporated by reference. Exhibit numbers correspond to the numbering system in Item 601 of Regulation S-K.

Exhibit
Number	Description of Exhibit
2.01	Agreement and Plan of Merger	Incorporated by reference to our Form 8-K filed with the SEC on March 30, 2011
3.01	Articles of Incorporation	Incorporated by reference to our Registration Statement on Form 10SB filed on April 12, 2007
3.02	Restated Articles of Incorporation	Incorporated by reference to our Registration Statement on Form 10SB filed on April 12, 2007
3.03	Bylaws	Incorporated by reference to our Registration Statement on Form 10SB filed on April 12, 2007
3.04	Certificate of Change Pursuant to NRS 78.209	Incorporated by reference to our Form 8-K filed with the SEC on September 18, 2009
10.06	2007 Long Term Incentive Plan	Incorporated by reference to our Form 10-KSB filed with the SEC on March 27, 2008
10.07	Literary Agent Agreement dated September 25, 2009	Incorporated by reference to our Form 8-K filed with the SEC on September 29, 2009
10.06	Option Agreement dated April 29, 2011	Incorporated by reference to our Form 8-K filed with the SEC on May 3, 2011
10.07	Michael J. Sinnwell Jr. – Employment Agreement dated April 29, 2011	Incorporated by reference to our Form 8-K filed with the SEC on May 3, 2011
10.08	Kevin Vining – Employment Agreement dated April 29, 2011	Incorporated by reference to our Form 8-K filed with the SEC on May 3, 2011
10.9	Michael J. Sinnwell Jr., – Confidential Information and Invention Assignment Agreement	Incorporated by reference to our Form 8-K filed with the SEC on May 3, 2011
10.10	Kevin Vining – Confidential Information and Invention Assignment Agreement	Incorporated by reference to our Form 8-K filed with the SEC on May 3, 2011
10.11	Glenn Geller – Lock-Up Agreement	Incorporated by reference to our Form 8-K filed with the SEC on May 3, 2011
10.12	Greg Geller – Lock-Up Agreement	Incorporated by reference to our Form 8-K filed with the SEC on May 3, 2011
10.13	Gaden Griffin – Lock-Up Agreement	Incorporated by reference to our Form 8-K filed with the SEC on May 3, 2011
10.14	Tom Kelley - Lock-Up Agreement	Incorporated by reference to our Form 8-K filed with the SEC on May 3, 2011
10.15	Marla Beans - Lock-Up Agreement	Incorporated by reference to our Form 8-K filed with the SEC on May 3, 2011
10.16	Tom Smith - Lock-Up Agreement	Incorporated by reference to our Form 8-K filed with the SEC on May 3, 2011
21.01	List of Subsidiaries	Filed herewith.
31.01	Certification of Principal Executive Officer Pursuant to Rule 13a-14	Filed herewith
31.02	Certification of Principal Financial Officer Pursuant to Rule 13a-14	Filed herewith
32.01	CEO and CFO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act	Filed herewith

Page 14

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the Undersigned, thereunto duly authorized.

	ANOTEROS INC.



Dated: August 10, 2011	By:	/s/ Michael J. Sinnwell Jr.
		By: Michael J. Sinnwell Jr.
		Its: President and CEO

Page 15

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