MOBILE AREA NETWORKS INC - FORM 10-Q

Attached files

file	filename
EX-31 - EXHIBIT 31.1 - MOBILE AREA NETWORKS INC	ex31-1.htm
EX-31 - EXHIBIT 31.2 - MOBILE AREA NETWORKS INC	ex31-2.htm
EX-32 - EXHIBIT 32 - MOBILE AREA NETWORKS INC	ex32.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

———————

FORM 10Q

———————

X	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: September 30, 2012
Or

	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.
		X	Yes		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).
		X

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	Accelerated filer
Non-accelerated filer	Smaller reporting company			X

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

As of September 30, 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.	1

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	4

Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	6

Item 4.	Controls and Procedures.	6

PART II – OTHER INFORMATION

Item 1.	Legal Proceedings.	7

Item 1A.	Risk Factors.	7

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	7

Item 3.	Defaults Upon Senior Securities.	7

Item 4.	Submission of Matters to a Vote of Security Holders.	7

Item 5.	Other Information.	7

Item 6.	Exhibits.	7

SIGNATURES		8

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

MOBILE AREA NETWORKS, INC.

(A Florida Corporation)

Sanford, Florida

Balance Sheets

	December 31, 2011			September 30, 2012
				(Unaudited)


Assets
Current assets:
Accounts Receivable-Net of Allowance for Doubtful Accounts	$	46,420			—
Inventory		63,480			—
Total current assets		109,900			—

Property and equipment, net of Accumulated Depreciation		9,282			—

Other Assets:
Security Deposits and Other Assets		7,092			—
Total Assets	$	126,274		$	—

Liabilities and Stockholders' Deficit
Current liabilities:
Bank Overdraft	$	31,574			28,233
Notes and Capital Leases Payable-Due Within One Year		108,342			99,933
Accounts Payable		87,606			87,606
Accrued Expenses		419,797			16,580
Total current liabilities		647,319			232,352

Other Liabilities:
Notes and Capital Leases Payable-Due After One Year		—			—
Accrued Salaries-Related Party		1,428,048			1,518,048
Advances from Stockholders		455,001			351,845
Total Liabilities		2,530,368			2,102,245

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		(7,117,570	)		(6,815,721	)
Total Stockholders’ Deficit		(2,404,094	)		(2,102,245	)
Total Liabilities and Stockholders’ Deficit	$	126,274		$	—

See accompanying notes to financial statements.

MOBILE AREA NETWORKS, INC.

(A Florida Corporation)

Sanford, Florida

Statements of Operations

Three and Nine months ended September 30, 2012 and 2011

(Unaudited)

	Three months Ended September 30, 2012			Three months Ended September 30, 2011			Nine months Ended September 30, 2012			Nine months Ended September 30, 2011


Sales-Net of Returns and Allowances	$	—		$	39,583		$	40,258		$	135,160
Cost of Goods Sold		—			16,676			128,271			104,218
Gross Profit (Loss)		—			22,907			(88,013	)		30,942

Operating expenses
Depreciation		—			1,547			3,094			4,641
Bad Debt Expense		—			(16,000	)		22,649			(14,000	)
Interest and Finance Charges		598			2,872			6,965			11,784
Outside Services		—			5,107			8,170			9,677
Administrative Payroll and Taxes		30,000			70,153			90,599			168,094
Professional Services		—			—			—			7,550
Other Operating Expenses		4,713			28,893			67,858			100,107

Total Operating Expenses		35,311			92,572			199,335			287,853
Net Loss Before Other Income and Provision for Taxes		(35,311	)		(69,665	)		(287,348	)		(256,911	)
Other Income
Debt Forgiven in Exchange for Royalties		7,269			—			585,898			—
Gain on Disposal of Fixed Assets		—			—			3,299			—
Net Income (Loss) Before Provision for Taxes		(28,042	)		(69,665	)		301,849			(256,911	)
Provision for Taxes		—			—			—			—
Net Income (Loss) for the Period	$	(28,042	)	$	(69,665	)	$	301,849		$	(256,911	)

Weighted Average Number of Common Shares
Outstanding-Basic and Diluted		49,060,788			49,060,788			49,060,788			49,060,788

Net loss per share-Basic and Diluted	$	(0.00	)	$	(0.00	)	$	.01		$	(0.01	)

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

MOBILE AREA NETWORKS, INC.

(A Florida Corporation)

Sanford, Florida

Statements of Cash Flows

Nine months ended September 30, 2012 and 2011

(Unaudited)

	Nine Months Ended September 30, 2012			Nine Months Ended September 30, 2011
Cash flows from operating activities
Net Income (Loss) for the period	$	301,849		$	(256,911	))
Adjustments to Reconcile Net Loss to Net Cash Flows from Operating Activities:
Depreciation		3,094			4,641
Changes in Assets and Liabilities:
Accounts Receivable		46,420			4,187	)
Inventory		63,480			4,474	)
Other Assets		13,280
Accounts Payable		—			(6,419	)
Accrued Expenses		(403,217	)		112,300
Accrued Salaries-Related Party		90,000			90,000
Net Cash Flows from Operating Activities		114,906			(47,728	))

Cash flows from Investing Activities
Acquisitions of Property and Equipment					—	)
Cash Flows from Financing Activities
Advances from (Repayments to) stockholders		(103,156	)		35,300
Proceeds from Issuance of Common Stock		—			—
Increase (Decrease) in Long-Term Debt		(8,409	)		8,214
Net Cash Flows from Financing Activities		(111,565	)		43,514

Net Change in Cash and Cash Equivalents		3,341			(4,214	)

Cash and Cash Equivalents(Bank Overdraft)-Beginning of Period		(31,574	)		(13,587	)


Cash and Cash Equivalents(Bank Overdraft)-End of Period	$	(28,233	)	$	(17,801

Cash paid for:
Taxes	$	—		$	—

Interest	$	6,965		$	11,784

The accompanying notes are an integral part of these 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 or review, 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 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 Form10-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 net income and (net loss) of $301,849 and $(256,911) for the nine months ended September 30, 2012 and 2011, respectively. As a result, there is an accumulated deficit of $6,815,721at September 30, 2012. The primary causes of the losses are attributable to the inability of the Company to obtain sufficient sales.

The Company has terminated its lease on the factory plant, effective May 26, 2012. Also, on May 25, 2012, an auction was held at which all of the Company’s equipment was sold. Net proceeds were used to reduce the Company’s long-term obligation to Business Lenders, Inc. The Company is presently engaged in finding a merger partner whose operations can be merged into Mobile Area Networks, Inc. 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 $(232,352) at September 30, 2012 compared to $(537,419) at December 31, 2011. Cash amounted to a bank overdraft of $(28,233) at September 30, 2012 as compared to a bank overdraft of $(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 used in operating activities for the nine months ended September 30, 2012 and 2011 was $114,906 and $(47,728), respectfully. For the nine months ended September 30, 2012 and 2011, cash was provided primarily by advances from stockholders. During the nine months ended September 30, 2012 and 2011, cash was used to fund operations.

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

Results of Operations

Sales decreased during the current period third quarter as compared with the year earlier period. For the three months ended September 30, 2012 sales were $-0- and for the three months ended September 30, 2011, sales were $39,583. For the nine months ended September 30, 2012, sales were $40,258 and for the nine months ended September 30, 2011, sales were $135,160. The decreases for the three and nine month periods relate to the Company’s continuing challenge to obtain additional sales orders and increased production.

Cost of Goods Sold for the three months ended September 30, 2012 $-0- and for the three months ended September 30, 2011, Cost of Goods Sold were $16,676. For the nine months ended September 30, 2012, Cost of Goods Sold were $128,271 and for the nine months ended September 30, 2011, Cost of Goods Sold were $104,218.

Total Operating Expenses decreased to $35,311 for the three months ended September 30, 2012 from $92,572 for the three months ended September 30, 2011. For the nine months ending September 30, 2012, operating expenses decreased to $199,335 from $287,853 for the nine months ending September 30, 2011.

Depreciation expense was $-0- for the three months ended September 30, 2012 and $1,547 for the three months ended September 30, 2011. Depreciation expense was $3,094 for the nine months ended September 30, 2012 and $4,641 for the nine months ended September 30, 2011.

Bad Debt Expense was $-0- for the three months ended September 30, 2012 and $(16,000) for the three months ended September 30, 2011. For the nine months ending September 30, 2012, Bad Debt Expense was $22,649. For the nine months ending September 30, 2011, Bad Debt Expense was $(14,000). The Allowance for Bad Debts has been reduced to zero.

Interest and Finance Charges decreased to $598 for the three months ended September 30, 2012 from $2,872 for the three months ended September 30, 2011. Interest and Finance Charges decreased to $6,965 for the nine months ended September 30, 2012 from $11,784 for the nine months ended September 30, 2011. The decrease for the three and nine month periods relate to the reductions in balances and interest rates on outstanding credit card debt.

Outside Services expense decreased to $-0- for the three months ended September 30, 2012 from $5,107 for the three months ending September 30, 2011. For the nine months ended September 30, 2012, Outside Services expense decreased to $8,170 from $9,677 for the nine months ended September 30, 2011. The decrease for the three month period and the nine month period reflect the cessation of plant operations.

Administrative Payroll and Taxes expense decreased to $30,000 for the three months ended September 30, 2012 from $70,153 for the three months ended September 30, 2011. For the nine months ended September 30, 2012, Administrative Payroll and Taxes expense decreased to $90,599 from $168,094 for the nine months ended September 30, 2011. The decreases principally reflect the decrease in plant staff.

Professional Services expense remained at $-0- for the three months ended September 30, 2012 and 2011.. For the nine months ended September 30, 2012, Professional Services expense decreased to $-0- from $7,550 for the nine months ended September 30, 2011. The expense relates to fees paid to its independent accountant for review and auditing services and also for legal services relating to pending litigation.

Other Operating Expenses decreased to $4,713 for the three months ended September 30, 2012 from $28,893 for the three months ended September 30, 2011. Other Operating Expenses decreased to $67,858 for the nine months ended September 30, 2012 from $100,107 for the nine months ended September 30, 2011. The decreases for the three and nine month periods relate principally to decreased spending for electric utilities, travel, local taxes, and telephone

Other Income for the three months ending September 30, 2012 was $7,269 which related to writing off certain stale-dated outstanding checks written. Other Income for the three months ending September 30, 2011 was $-0-. Other Income for the nine months ended September 30, 2012 was $585,898. The principal amount ($578,829) related to the forgiveness of a note and accrued rent payable to the building lessor in exchange for waiving future royalty income on a jointly developed new product. Other Income for the nine months ended September 30, 2012 also included $3,209 for a gain on the sale of the Company’s equipment. Other Income for the nine months ending September 30, 2011 was $-0-.

The Net Loss for the Period was $(28,042) for the three months ended September 30, 2012, a decrease from the $(69,665) Net Loss for the Period reported for the three months ended September 30, 2011. The Net Income for the Period was $301,849 for the nine months ended September 30, 2012, an increase from the $(256,911) Net Loss for the Period reported for the nine months ended September 30, 2011.

The Net Loss Per Share remained unchanged at $0.00 for the three month periods. For the nine months ended September 30, 2012 Net Income per Share was $.01an increase from the Net Loss per Share of $(0.01) for the nine months ended September 30, 2011.

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).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereto duly authorized.

Date: November 28, 2012

	MOBILE AREA NETWORKS INC.


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

MOBILE AREA NETWORKS INC - FORM 10-Q - September 29, 2014

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