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: March 31, 2012

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 or Organization)	File Number)	Identification No.)

2772 Depot Street, Sanford, Florida 32773
(Address of Principal Executive Offices) (Zip Code)

(407) 333-2350
(Registrant’s telephone number, including area code)

N/A
(Former name or 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. Yes  þ    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).  Yes  þ    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.

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).     Yes  o     No  þ

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of the issuer's common stock, as of the latest practical date:

As of March 31, 2012, 49,060,788 shares of voting common stock were outstanding

Mobile Area Networks, Inc.

 

Index

		Page
	PART I – FINANCIAL INFORMATION
Item 1	Financial Statements
	Balance Sheets	1
	Statement of Operations	2
	Statement of Cash Flows	3
	Notes to Financial Statements	4
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	5
Item 3	Quantitative and Qualitative Disclosures about Market Risk	6
Item 4	Controls and Procedures	6
	PART II- OTHER INFORMATION
Item 1	Legal Proceedings	6
Item 1A	Risk Factors	6
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	6
Item 3	Defaults Upon Senior Securities	6
Item 4	Submission of Matters to a Vote of Securities Holders	6
Item 5	Other Information	6
Item 6	Exhibits	7
	Signatures	8

 

 

 

 

 

 

 

 

 

MOBILE AREA NETWORKS, INC.

(A Florida Corporation)

Sanford, Florida

Balance Sheets

Item 1. Financial Statements

 

Assets		12/31/2011	3/31/2012
Current assets:
Cash		-	-
Accounts Receivable		46,420	30,647
Inventory		63,479	47,894
Other current assets		-	-
Total current assets		109,899	78,542
Property and equipment, net		9,282	7,735
Other Assets		7,092	7,092
		126,273	93,369
Liabilities and Stockholder's Equity
Current liabiliies:
Bank overdraft		31,574.31	29,410
Notes & leases-current		108,342.05	108,878
Accounts payable		87,605.50	87,605
Accrued expenses		419,797.40	460,673
Total current liabilites		647,319.26	686,568
Other liabilities
Notes & leases-long-term		-	-
Accrued salaries-related  party		1,428,048	1,458,048
Advances from stockholders		455,000	451,844
Total Liabilities		2,530,367	2,596,461
Equity
Common stock		4,656,635	4,656,635
Paid-In Capital		56,840	56,840
Treasury stock		-	-
Accumulated deficit		(7,117,569)	(7,216,567)
Total deficit		(2,404,093)	(2,503,091)
Total Liabilities and deficit		126,273	93,369

 

 

MOBILE AREA NETWORKS, INC.

(A Florida Corporation)

Sanford, Florida

Statements of Operations

 

Three months ended March 31, 2012 and 2011

(unaudited)

 

 

		Three Months				Three Months
		Ended				Ended
		March 31,				March 31,
		2012				2011
Sales-Net of Returns and Allowances		$	26,278				60,574
Cost of Goods Sold			52,877				43,325
Gross Profit (Loss)			(26,599	)			17,249
Operating Expenses
Depreciation			1,547				1,547
Bad Debt Expense			—				2,000
Interest and Finance Charges			3,067				4,212
Outside Services			6,130				1,300
Administrative Payroll and Payroll Taxes			30,309				48,074
Professional Services			—				1,000
Other Operating Expenses			31,346				37,718
Total Operating Expenses			72,399				95,851
Net Income (Loss) before taxes			(96,998	)			(78,602	)
Provision for Taxes			—				—
Net Income (Loss) for the Period		$	(96,998	)		$	(78,602	)
Weighted Average Number of Common Shares
Outstanding-Basic and Diluted			49,060,788				49,060,788
Net loss per share-Basic and Diluted		$	(0.00	)			(0.00	)

 

 

See accompanying notes to financial statements.

 

 

 

 

 

 

 

MOBILE AREA NETWORKS, INC.

(A Florida Corporation)

Sanford, Florida

Statements of Cash Flows

 

Three months ended March 31, 2012 and 2011

(Unaudited)

 

		Three Months		Three Months
		Ended		Ended
		March 31,		March 31,
		2012		2011
Cash flows from operating activities
Net income (loss) for the Period	$	(98,998)	$	(78,602)
Adjustments to Reconcile Net Loss to Net Cash Flows from Operating  Activities:
Depreciation		1,547		1,547
Bad Debt Expense		—		2,000
Changes in Assets and Liabilities:
Accounts Receivable		15,772		(26,500)
Inventory		15,585	621
Accounts Payable		—		689
Accrued Expenses		40,876		39,554
Accrued Salaries-Related Party		30,000		30,000
Net Cash Flows from Operating Activities		4,782		(30,691)
Cash Flows from Investing  Activities
Acquisition of Property and Equipment		—		—
Cash Flows from Financing Activities
Advances (Repayments) from Stockholders		(3,156)		26,800
Increases (Repayment) of Notes and Capital Leases Payable		537		516
Net Cash Flows from Financing Activities		(2,619)		27,316
Net Change in Cash and Cash Equivalents		2,163		(3,375)
Cash and Cash Equivalents (Bank Overdraft)-Beginning of  Period		(31,574)		(13,587)
Cash and Cash Equivalents (Bank Overdraft)-End of  Period	$	(29,411)	$	$(16,962)
Supplemental disclosure of cash flow information
Cash paid for:
Taxes		—		—
Interest	$	3,067	$	4,212

 

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 $96,998 and $78,602 for the three months ended March 31, 2012 and 2011, respectively. As a result, there is an accumulated deficit of $7,216,568 at March 31, 2012. The primary causes of the loss for 2012 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.

 

 

 Item 2. Management’s discussion and analysis of financial condition and results of operations

 

 

Liquidity and Capital Resources 

Working Capital amounted to $(608,026) at March 31, 2012 compared to $(539,419) at December 31, 2011. Bank Overdraft amounted to $29,411 at March 31, 2012 as compared to $31,574 at December 31, 2011. 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 three months ended March 31, 2012 and 2011 was $4,782 and $(30,691). For the three months ended March 31, 2012 and 2011, cash was provided primarily by operations and partly by advances from shareholders. During the three months ended March 31, 2012 and 2011, 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 first quarter as compared with the year earlier period. For the three months ended March 31, 2012 sales were $26,278 and for the three months ended March 31, 2011, sales were $60,574. The decrease relates to a reduction in shipments to customers related to soft economic conditions.

Cost of Goods Sold increased during the current period first quarter as compared with the year earlier first quarter. For the three months ended March 31, 2012, Cost of Goods Sold were $52,877 and for the three months ended March 31, 2011, Cost of Goods Sold were $43,325 The increase relates to factory rent expense which is a fixed cost. Cost of Goods Sold mostly varies with the level of Sales, however, rent expense does not.

Total Operating Expenses decreased to $72,399 for the three months ended March 31, 2012 from $95,851 for the three months ended March 31, 2011.

Depreciation expense was unchanged at $1,547 for the current year first quarter and the prior year first quarter.

Bad Debt Expense was $-0- and $2,000 for the three months ended March 31, 2012 and 2011, respectively. The allowance for uncollectible accounts is considered adequate for the current period.

Interest and Finance Charges expense decreased to $3,067 for the three months ended March 31, 2012 from $4,212 for the three months ended March 31, 2011. The decrease is related to credit card payables that are less in the current period.

Outside Services expense is $6,130 for the three months ended March 31, 2012 compared to $1,300 for the three months ended March 31, 2011. The current year increase was due to an increased use of contract labor for plant operations. 

Administrative Payroll and Payroll Taxes expense decreased to $30,309 for the three months ended March 31, 2012 from $48,074 for the three months ended March 31, 2011. The decrease reflects staff reductions necessitated by the contraction in business activity.

Professional Services expense was $-0- for the three months ended March 31, 2012 and $1,000 for the three months ended March 31, 2011. The amounts reflect fees paid to the independent public accountant for auditing services and also fees for legal services.

Other Operating Expenses were $31,346 for the three months ended March 31, 2012 and $37,718 for the three months ended March 31, 2011. Other Operatng Expenses includes spending for local taxes, licenses, insurance expenses, travel and telephone. The decreases occurred mostly in marketing, health insurance and travel.

The Net Loss for the Period was $96,998 for the three months ended March 31, 2012, an increase from the $78,602 Net Loss reported for the three months ended March 31, 2011. The Net Income (Loss) Per Share remained unchanged at $.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 design 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: November 2, 2012	Mobile Area Networks, Inc.
	By:	/s/ George Wimbish
		George Wimbish
		Director, Chairman and President