MOBILE AREA NETWORKS INC - FORM 10-Q

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EXCEL - IDEA: XBRL DOCUMENT - MOBILE AREA NETWORKS INC	Financial_Report.xls
EX-32.1 - CERTIFICATION - MOBILE AREA NETWORKS INC	manw_ex321.htm
EX-31.2 - CERTIFICATION - MOBILE AREA NETWORKS INC	manw_ex312.htm
EX-31.1 - CERTIFICATION - MOBILE AREA NETWORKS INC	manw_ex311.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

———————

FORM 10-Q

———————

þ	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: June 30, 2011
Or

o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from: _____________ to _____________

———————

Mobile Area Networks, Inc.

(Exact name of registrant as specified in its charter)

———————

Florida	333-18439	59-3482752]
(State or Other Jurisdiction	(Commission	(I.R.S. Employer
of Incorporation)	File Number)	Identification No.)

2772 Depot Street, Sanford, Florida 32773

(Address of Principal Executive Office) (Zip Code)

407-333-2350

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

———————

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 90 days.			þ	Yes	o	No



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).			þ		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.

Large accelerated filer	o	Accelerated filer			o
Non-accelerated filer	o	Smaller reporting company			þ

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).			o	Yes	þ	No


As of June 30, 2011, 49,060,788 shares of voting common stock were outstanding

Mobile Area Networks, Inc.

Index

		Page
	PART I – FINANCIAL INFORMATION

Item 1.	Financial Statements.		3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.		7
Item 3.	Quantitative and Qualitative Disclosures about Market Risk.		9
Item 4.	Controls and Procedures		9

	PART II-OTHER INFORMATION

Item 1.	Legal Proceedings.		10
Item 1A.	Risk Factors.		10
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.		10
Item 3.	Defaults Upon Senior Securities.		10
Item 4.	Submission of Matters to a Vote of Securities Holders.		10
Item 5.	Other Information.		10
Item 6.	Exhibits		10

SIGNATURE			11

Item 1. Financial Statements

MOBILE AREA NETWORKS, INC.

(A Florida Corporation)

Sanford, Florida

Balance Sheets

	December 31,			June 30,
	2010			2011
	(Audited)			(Unaudited)
Assets
Current assets:
Cash and Cash Equivalents	$	—		$	—
Accounts Receivable-Net of Allowance for Doubtful Accounts		16,257			5,573
Inventory		67,953			63,480
Total current assets		84,210			69,053

Property and Equipment-Net of Accumulated Depreciation		15,470			12,376

Other Assets:
Security Deposits and Other Assets		7,092			7,092
Total Assets	$	106,772		$	88,521


Current liabilities:
Bank Overdraft	$	13,587		$	9,076
Notes and Capital Leases Payable-Due Within One Year		99,596			107,284
Acounts Payable		96,729			96,099
Accrued Expenses		268,272			340,720
Total current liabilities		478,184			553,179

Other Liabilities:
Notes and Capital Leases Payable-Due After One Year		—			—
Accrued Salaries-Related Party		1,308,048			1,368,048
Advances from Stockholders		398,419			432,419
Total Liabilities		2,184,651			2,353,646

Stockholders’ Deficit

Common stock, no par value, authorized 50,000,000 shares, issued and outstanding 49,060,788 shares		4,656,636			4,656,636
Paid-In Capital		56,840			56,840
Accumulated Deficit		(6,791,355	)		(6,978,601	)
Total Stockholders’ Deficit		(2,077,879	)		(2,265,125	)
Total Liabilities and Stockholders’ Deficit	$	106,772		$	88,521

See accompanying notes to financial statements.

MOBILE AREA NETWORKS, INC.

(A Florida Corporation)

Sanford, Florida

Statements of Operations

Three and Six months ended June 30, 2011 and 2010

(Unaudited)

	Three Months Ended June 30, 2011			Three Months Ended June 30, 2010			Six Months Ended June 30, 2011			Six Months Ended June 30, 2010
Sales-Net of Returns and Allowances	$	35,003		$	99,477		$	95,577		$	179,886
Cost of Goods Sold		44,217			79,744			87,542			147,051
Gross Profit (Loss)		(9,214	)		19,733			8,035			32,835

Operating expenses

Depreciation		1,547			1,547			3,094			3,094
Bad Debt Expense		—			—			2,000			—
Interest and Finance Charges		4,700			4,353			8,912			8,004
Outside Services		3,270			850			4,570			1,650
Administrative Payroll and taxes		49,867			50,409			97,941			103,741
Professional Services		6,550			2,400			7,550			9,400
Other Operating Expenses		33,496			51,863			71,214			90,151

Total Operating Expenses		99,430			111,422			195,281			216,040
Loss Before Other Income and Provision for Taxes		(108,644	)		(91,689	)		(187,246	)		(183,205	)
Other Income
Trade Accounts Payable written-off		—			—			—			—
Net Income (Loss) before taxes		(108,644	)		(91,689	)		(187,246	)		(183,205	)
Provision for Taxes		—			—			—			—

Net Loss for the Period	$	(108,644	)	$	(91,689	)	$	(187,246	)	$	(183,205	)
Weighted Average Number of Common Shares

Outstanding-Basic and Diluted		49,060,788			48,860,788			49,060,788			48,860,788
Net loss per share-Basic and Diluted	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)

See accompanying notes to financial statements.

MOBILE AREA NETWORKS, INC.

(A Florida Corporation)

Sanford, Florida

Statements of Cash Flows

Six months ended June 30, 2011 and 2010

(Unaudited)

	Six Months			Six Months
	Ended			Ended
	June 30,			June 30,
	2011			2010
Cash flows from operating activities
Net income (loss) for the Period	$	(187,246	)	$	(183,205	)
Adjustments to Reconcile Net Loss to Net Cash Flows from Operating Activities:
Depreciation		3,094			3,094
Bad Debt Expense		2,000			—
Changes in Assets and Liabilities:
Accounts Receivable		8,684			2,023
Inventory		4,474			(713	)
Accounts Payable		(629	)		9,709
Accrued Expenses		72,446			76,424
Accrued Salaries-Related Party		60,000			60,000
Net Cash Flows from Operating Activities		(37,177	)		(32,668	)

Cash Flows from Investing Activities
Acquisition of Property and Equipment		—			—
Cash Flows from Financing Activities
Advances (Repayments) from Stockholders		34,000			(9,300	)
Proceeds from Issuance of Common Stock					—
Increases (Repayment) of Notes and Capital Leases Payable		7,688			997

Net Cash Flows from Financing Activities		41,688			(8,303	)

Net Change in Cash and Cash Equivalents		4,511			(40,971	)

Cash and Cash Equivalents (Bank Overdraft)-Beginning of Period		(13,587	)		42,837

Cash and Cash Equivalents (Bank Overdraft)-End of Period	$	(9,076	)	$	1,866

Supplemental disclosure of cash flow information

Cash paid for:
Taxes	$	—			—

Interest	$	8,912			8,004

See accompanying notes to financial statements.

MOBILE AREA NETWORKS, INC.

(A Florida Corporation)

Sanford, Florida

Notes to Financial Statements

Note A - Basis of Presentation

The condensed financial statements of Mobile Area Networks, Inc. (the ”Company”) included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in financial statements prepared in conjunction with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. These condensed financial statements should be read in conjunction with the annual audited financial statements and the notes thereto included in the Company’s annual report on Form 10-K.

The accompanying unaudited interim financial statements reflect all adjustments of a normal and recurring nature which are, in the opinion of management, necessary to present fairly the financial position, results of operations and cash flows of the Company for the interim periods presented. The results of operations for these periods are not necessarily comparable to, or indicative of, results of any other interim period or for the fiscal year taken as a whole.

Reclassifications

Certain amounts in the prior year financial statements have been reclassified to conform with the current year presentation.

Note B - Going Concern

The Company’s financial statements have been presented on the basis that it is a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has reported a net loss of $187,246 and $183,205 for the six months ended June 30, 2011 and 2010, respectively. As a result, there is an accumulated deficit of $6,978,601 at June 30, 2011. The primary causes of the loss for 2011 and operating losses in earlier years are attributable to decreases in orders from several key customers, competition and soft economic conditions.

The Company’s continued existence is dependent upon its ability to raise capital and/or achieving profitable operations. The Company plans to raise sufficient working capital through equity offerings and restructure debt to lower its monthly payments and interest costs. The Company continues to fund operational deficits through the acquisition of debt and equity financing through private individuals. The financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.

Note C-

Financial Review

These financial statements have not been reviewed by the Company’s independent accounting firm.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Liquidity and Capital Resources

Working Capital amounted to $(484,126) at June 30, 2011 compared to $(393,974) at December 31, 2010. Cash amounted to a Bank Overdraft of $9,076 at June 30, 2011 as compared to a Bank Overdraft of $13,587 at December 31, 2010. As more fully described under the Company’s statements of cash flows in the accompanying financial statements, net cash from or (used in) operating activities for the six months ended June 30, 2011 and 2010 was $(37,177) and ($32,668). For the six months ended June 30, 2011 and 2010, cash was provided primarily by operations and Advances from Stockholders. During the six months ended June 30, 2011 and 2010, cash was used to fund operations.

As indicated herein, the Company’s short term liquidity needs have been historically satisfied primarily from the continuing sale of the Company stock and advances from stockholders.

Results of Operations

Sales decreased during the current period second quarter and six months as compared with the year earlier period. For the three months ended June 30, 2011 sales were $35,003 and for the three months ended June 30, 2010, sales were $99,477. For the six months ended June 30, 2011, sales were $95,577 and for the six months ended June 30, 2010, sales were $179,886. The decreases for both the three month and six month periods relate to a weaker economy and the Company’s unsuccessful ability to receive an increase in orders from its existing customer base.

Cost of Goods Sold decreased during the three and six month periods when compared to the year earlier periods. For the three months ended June 30, 2011, Cost of Goods Sold were $44,217 and for the three months ended June 30, 2010, Cost of Goods Sold were $79,744. For the six months ended June 30, 2011, Cost of Goods Sold were $87,542 and for the six months ended June 30, 2010, Cost of Goods Sold were $147,051. The decreases for the three and six month periods related to the decreases in sales.

Total Operating Expenses decreased to $99,430 for the three months ended June 30, 2011 from $111,422 for the three months ended June 30, 2010. For the six months ending June 30, 2011, operating expenses decreased to $195,281 from $216,040 for the six months ending June 30, 2010.

Depreciation expense remained unchanged at $1,547 for the three months ended June 30, 2011 and June 30, 2010, respectively. For the six months ended June 30, 2011 and June 30, 2010, respectively, depreciation expense was $3,094.

Bad Debt Expense was $-0- for the three months ending June 30, 2011 and June 30, 2010, respectively. For the six months ending June 30, 2011, Bad Debt Expense increased to $2,000 from $-0- for the six months ending June 30, 2010. The reserve for uncollected accounts is considered reasonable based on the aging of accounts receivable.

Interest and Finance Charges increased to $4,700 for the three months ended June 30, 2011 from $4,353 for the three months ended June 30, 2010. Interest and Finance Charges increased to $8,912 for the six months ended June 30, 2011 from $8,004 for the six months ended June 30, 2010. The current period interest expense and finance charges are greater due to a higher interest rate environment on credit cards.

Outside Services expense was $3,270 for the three months ended June 30, 2011 and $850 for the three months ending June 30, 2010. For the six months ended June 30, 2011, Outside Services expense was $4,570 compared to $1,650 for the six months ended June 30, 2010. The incidence of contracted labor expenses vary with Company staffing and the levels of production.

Administrative Payroll and Payroll Tax expense decreased slightly to $49,867 for the three months ending June 30, 2011 from $50,409 for the three months ending June 30, 2010. Administrative Payroll and Payroll Tax expense decreased to $97,941 for the six months ending June 30, 2011 from $103,741 for the six months ending June 30, 2010. The reduced expenses for the quarter and six months is attributable to a reduction in staff necessitated by the decrease in sales.

Professional Services expense increased to $6,550 for the three months ended June 30, 2011 from $2,400 for the three months ended June 30, 2010. For the six months ended June 30, 2011, Professional Services expense decreased to $7,550 from $9,400 for the six months ended June 30, 2010. The expense is for audit and review services from the Company’s independent public accountants and also legal services.

Other Operating Expenses were $33,496 for the three months ended June 30, 2011 and $51,863 for the three months ended June 30, 2010. Other Operating Expenses were $71,214 for the six months ended June 30, 2011 and $90,151 for the six months ended June 30, 2010. The decreases for the three and six month periods reflect decreased spending for electric utilities, travel, local taxes and telephone expenses.

The Net Loss for the Period was $(108,644) for the three months ended June 30, 2011 an increase from the $(91,689) Net Loss for The Period reported for the three months ended June 30, 2010. The Net Loss for the Period was $(187,246) for the six months ended June 30, 2011, an increase from the $(183,205) Net Loss reported for the six months ended June 30, 2010. The Net Loss Per Share remained unchanged at $0.00.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not required by smaller reporting companies.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

We have adopted and maintain disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) that are designed to ensure that information required to be disclosed in our reports under the Exchange Act, is recorded, processed, summarized and reported within the time periods required under the SEC’s rules and forms and that the information is gathered and communicated to our management, including our Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer), as appropriate, to allow for timely decisions regarding financial disclosure.

As required by SEC Rule 15d-15(e), we carried out an evaluation under the supervision and with the participation of our management, including the Chief Executive Officer/Chief Financial Officer, of the effectiveness of the dsesign and operation of our disclosure controls and procedures pursuant to Exchange Act Rule 15d-14 as of the end of the period covered by this report. Based on the foregoing evaluation, our Chief Executive Officer/Chief Financial Officer have concluded that our disclosure controls and procedures are not effective.

There have been no changes in the Company’s internal control over financial reporting during the most recently completed fiscal quarter 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.

None

ITEM 1A. RISK FACTORS.

Not required by smaller reporting companies.

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.

Forward-Looking Statements

The Quarterly Report on Form 10-Q contains certain statements of a forward-looking nature relating to future events or the future financial performance of the Company. Such statements are only predictions and the actual events or results may differ materially from the results discussed in the forward-looking statements. Factors that could cause or contribute to such differences include those discussed below as well as those discussed in other filings made by the Company with the Securities and Exchange Commission, including the Company’s Annual Report included in its annual filing on Form 10-K.

ITEM 6. EXHIBITS.

31.1	Certification Pursuant to Item 601(b)(31) of Regulation S-K, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2	Certification Pursuant to Item 601(b)(31) of Regulation S-K, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32	Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished pursuant to Item 601(b)(32) of Regulation S-K).

SIGNATURE

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.

Date: August 10, 2011	Mobile Area Networks, Inc.


	By:	/s/ George Wimbish
		George Wimbish
		Director, Chairman and President

MOBILE AREA NETWORKS INC - FORM 10-Q - August 15, 2011

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