MOBILE AREA NETWORKS INC - FORM 10-Q

Attached files

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

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

———————

FORM 10-Q

———————

X	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
	ACT OF 1934
For the quarterly period ended: June 30, 2013
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 June 30, 2013, 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
	2012			2013
	(Unaudited)			(Unaudited)
Assets
Current assets:
Cash and Cash Equivalents	$	—		$	—
Accounts Receivable-Net of Allowance for Doubtful Accounts		—			—
Inventory		—			—
Total current assets		—			—

Property and Equipment-Net of Accumulated Depreciation		—			—

Other Assets:
Security Deposits and Other Assets		—			—
Total Assets	$	—		$	—

Liabilities and Stockholders' Deficit
Current liabilities:
Bank Overdraft	$	28,791		$	28,881
Notes and Capital Leases Payable-Due Within One Year		101,101			102,825
Acounts Payable		97,689			98,538
Accrued Expenses		16,580			16,580
Total current liabilities		244,161			246,824
Other Liabilities:
Notes and Capital Leases Payable-Due After One Year		—			—
Accrued Salaries-Related Party		1,548,048			1,608,048
Advances from Stockholders		360,898			360,898
Total Liabilities		2,153,107			2,215,770

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		(6,866,583	)		(6,929,246	)
Total Stockholders’ Deficit		(2,153,107	)		(2,215,770	)
Total Liabilities and Stockholders’ Deficit	$	—		$	—

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, 2013 and 2012

(Unaudited)

	Three Months Ended			Three Months Ended			Six Months Ended			Six Months Ended
	June 30,			June 30,			June 30,			June 30,
	2013			2012			2013			2012

Sales-Net of Returns and Allowances	$	—		$	13,780		$	—		$	40,058
Cost of Goods Sold		—			75,394			—			128,271
Gross Profit (Loss)		—			(61,614	)		—			(88,213	)

Operating expenses
Depreciation		—			1,547			—			3,094
Bad Debt Expense		—			22,649			—			22,649
Interest and Finance Charges		1,188			3,300			1,723			6,367
Outside Services		—			2,040			—			8,170
Administrative Payroll and taxes		30,000			30,290			60,000			60,599
Professional Services		—			—			850			—
Other Operating Expenses		45			31,799			90			63,145

Total Operating Expenses		31,233			91,625			62,663			164,024
Loss Before Other Income and Provision for Taxes		(31,233	)		(153,239	)		(62,663	)		(252,237	)
Other Income
Debt Forgiven in Exchange for Royalties		—			578,829			—			578,829
Gain on Disposal of Fixed Assets		—			3,299			—			3,299
Net Income (Loss) before taxes		(31,233	)		428,889			(62,663	)		329,891
Provision for Taxes		—			—			—			—

Net Income (Loss) for the Period	$	(31,233	)	$	(62,663	)	$	329,891		$	329,891


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	$	(0.001	)	$	.01		$	(.001	)	$	.01

See accompanying notes to financial statements.

MOBILE AREA NETWORKS, INC.

(A Florida Corporation)

Sanford, Florida

Statements of Cash Flows

Six months ended June 30, 2013 and 2012

(Unaudited)

	Six Months Ended			Six Months Ended
	June 30,			June 30,
	2013			2012
Cash flows from operating activities
Net income (loss) for the Period	$	329,891		$	(187,246	)
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		46,420			8,684
Inventory		63,480			4,474
Other Assets		13,280			—
Accounts Payable		—			(629	)
Accrued Expenses		(403,217	)		72,446
Accrued Salaries-Related Party		60,000			60,000
Net Cash Flows from Operating Activities		112,948			(37,177	)

Cash Flows from Investing Activities
Acquisition of Property and Equipment		—			—
Cash Flows from Financing Activities
Advances (Repayments) from Stockholders		(103,156	)		34,000
Proceeds from Issuance of Common Stock		—			—
Increases (Repayment) of Notes and Capital Leases Payable		(8,409	)		7,688

Net Cash Flows from Financing Activities		(111,565	)		41,688

Net Change in Cash and Cash Equivalents		1,383			4,511

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

Cash and Cash Equivalents (Bank Overdraft)-End of Period	$	(30,191	)	$	(9,076	)

Supplemental disclosure of cash flow information

Cash paid for:
Taxes	$	—		$	—

Interest	$	—		$	—

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 $(62,663) and net income of $329,891 for the six months ended June 30, 2013 and 2012, respectively. There is an accumulated deficit of $6,929,246 at June 30, 2013. The primary causes of the operating losses for 2013 and 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 is in the process of re-evaluating its strategic direction and is actively exploring merger opportunities. The Company made the decision in May 2012 to wind down internal manufacturing and liquidated the plant equipment. 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 $(246,824) at June 30, 2013 compared to $(244,161) at December 31, 2012. Cash amounted to a Bank Overdraft of $28,881 at June 30, 2013 as compared to a Bank Overdraft of $28,791 at December 31, 2012. 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, 2013 and 2012 was $112,948 and $(37,177), respectfully. For the six months ended June 30, 2013 and 2012, cash was provided primarily by operations and Advances from Stockholders. During the six months ended June 30, 2013 and 2012, 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, 2013 sales were $-0- and for the three months ended June 30, 2012, sales were $13,780. For the six months ended June 30, 2013, sales were $-0- and for the six months ended June 30, 2012, sales were $40,058. The decreases for both the three month and six month periods relate to the decision of the Company in May 2012 to wind down internal manufacturing capability.

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, 2013, Cost of Goods Sold were $-0- and for the three months ended June 30, 2012, Cost of Goods Sold were $75,394. For the six months ended June 30, 2013, Cost of Goods Sold were $-0- and for the six months ended June 30, 2012, Cost of Goods Sold were $128,271. The decreases for the three and six month periods relate to the scaling down of internal manufacturing.

Total Operating Expenses decreased to $31,233 for the three months ended June 30, 2013 from $91,625 for the three months ended June 30, 2012. For the six months ending June 30, 2013, operating expenses decreased to $62,663 from $164,024 for the six months ending June 30, 2012.

Depreciation expense was $-0- for the three months ended June 30, 2013 and for the three months ended June 30, 2012 Depreciation expense was $1,547. For the six months ended June 30, 2013 Depreciation expense was $-0- and for the six months ended June 30, 2012. Depreciation expense was $3,094.

Bad Debt Expense was $-0- for the three months ending June 30, 2013 and $22,649 for the three months ending June 30, 2012. For the six months ending June 30, 2013, Bad Debt Expense was $-0- and for the six months ending June 30, 2012, Bad Debt Expense was $22,649.

Interest and Finance Charges decreased to $1,188 for the three months ended June 30, 2013 from $3,300 for the three months ended June 30, 2012. Interest and Finance Charges decreased to $1,723 for the six months ended June 30, 2013 from $6,367 for the six months ended June 30, 2012. The current period interest expense and finance charges are less due to reduced credit card usage.

Outside Services expense was $-0- for the three months ended June 30, 2013 and $2,040 for the three months ending June 30, 2012. For the six months ended June 30, 2013, Outside Services expense was $-0- compared to $8,170 for the six months ended June 30, 2012. The incidence of contracted labor expenses vary with Company staffing and the levels of production.

Administrative Payroll and Payroll Tax expense decreased slightly to $30,000 for the three months ending June 30, 2013 from $30,290 for the three months ending June 30, 2012. Administrative Payroll and Payroll Tax expense decreased to $60,000 for the six months ending June 30, 2013 from $60,599 for the six months ending June 30, 2012. The reduced expense for the quarter and six months is negligible.

Professional Services expense was -0- for the three months ended June 30, 2013 and 2012, respectively. For the six months ended June 30, 2013, Professional Services expense was $850, an increase from $-0- for the six months ended June 30, 2012. The expense was for legal services.

Other Operating Expenses were $45 for the three months ended June 30, 2013 and $31,799 for the three months ended June 30, 2012. Other Operating Expenses were $90 for the six months ended June 30, 2013 and $63,145 for the six months ended June 30, 2012. The decreases for the three and six month periods reflect decreased spending following the scaling down of internal manufacturing operations.

Other Income for the three months ending June 30, 2013 was $-0-. Other Income for the three months ending June 30, 2012 includes $578,829 for 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 three months ending June 30, 2013 also included $3,209 for a gain on the sale of the Company’s equipment. For the six months ending June 30, 2013, Other Income was $-0-. For the six months ending June 30, 2012, Other Income included the aforementioned $578,829 and $3,209 items.

The Net Income (Loss) for the Period was $(31,233) for the three months ended June 30, 2013 a decrease from the $428,889 Net Income for The Period reported for the three months ended June 30, 2012. The Net Income (Loss) for the Period was $(62,663) for the six months ended June 30, 2013, a decrease from the $329,891 Net Income reported for the six months ended June 30, 2012. The Net Income (Loss) Per Share was $(.001) for the three months ending June 30, 2013 and $.01 for the three months ending June 30, 2012. The Net Income (Loss) Per Share was $(.001) for the six months ending June 30, 2013 and $.01 for the six months ending June 30, 2012.

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: August 10, 2013	Mobile Area Networks, Inc.


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

MOBILE AREA NETWORKS INC - FORM 10-Q - October 3, 2014

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