Attached files
| file | filename |
|---|---|
| EX-32 - CERTIFICATION - MOBILE AREA NETWORKS INC | mobile_ex32.htm |
| EX-31.1 - CERTIFICATION - MOBILE AREA NETWORKS INC | mobile_ex31z1.htm |
| EX-31.2 - CERTIFICATION - MOBILE AREA NETWORKS INC | mobile_ex31z2.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
———————
FORM 10-Q
———————
ý | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE |
| ACT OF 1934 |
For the quarterly period ended: March 31, 2011 | |
Or | |
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¨ | 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 | ||||||||
required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. | ý | Yes | ¨ | No | ||||
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Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, | ||||||||
chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and | ||||||||
post such files). | ¨ |
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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer., or a smaller reporting company. | ||||||||
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Large accelerated filer | ¨ |
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| Accelerated filer | ¨ |
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Non-accelerated filer | ¨ |
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| Smaller reporting company | ý |
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). | ¨ | Yes | ý | No | ||||
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As of March 31, 2011, 49,060,788 shares of voting common stock were outstanding. | ||||||||
MOBILE AREA NETWORKS, INC.
INDEX
Page |
PART I – FINANCIAL INFORMATION |
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Management’s Discussion and Analysis of Financial Condition and Results of Operations. Quantitative and Qualitative Disclosures About Market Risk. PART II – OTHER INFORMATION Unregistered Sales of Equity Securities and Use of Proceeds. |
PART I – FINANCIAL INFORMATION
Item 1.
Financial Statements.
MOBILE AREA NETWORKS, INC.
(A Florida Corporation)
Sanford, Florida
Balance Sheets
|
| December 31, 2010 |
| March 31, 2011 (Unaudited) |
| ||
Assets |
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Current assets: |
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Cash and Cash Equivalents |
| $ | — |
| $ | — |
|
Accounts Receivable-Net of Allowance for Doubtful Accounts |
|
| 16,257 |
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| 40,757 |
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Inventory |
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| 67,953 |
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| 67,332 |
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Total current assets |
|
| 84,210 |
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| 108,089 |
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Property and Equipment-Net of Accumulated Depreciation |
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| 15,470 |
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| 13,923 |
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Other Assets: |
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Security Deposits and Other Assets |
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| 7,092 |
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| 7,092 |
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Total Assets |
| $ | 106,772 |
| $ | 129,104 |
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Liabilities and Stockholders' Deficit |
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Current liabilities: |
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Bank Overdraft |
| $ | 13,587 |
| $ | 16,962 |
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Notes and Capital Leases Payable-Due Within One Year |
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| 99,596 |
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| 100,112 |
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Accounts Payable |
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| 96,729 |
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| 97,418 |
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Accrued Expenses |
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| 268,272 |
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| 307,817 |
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Total current liabilities |
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| 478,184 |
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| 522,309 |
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Other Liabilities: |
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Notes and Capital Leases Payable-Due After One Year |
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| — |
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| — |
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Accrued Salaries-Related Party |
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| 1,308,048 |
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| 1,338,048 |
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Advances from Stockholders |
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| 398,419 |
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| 425,218 |
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Total Liabilities |
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| 2,184,651 |
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| 2,285,575 |
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Stockholders’ Deficit |
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Common stock, no par value, authorized 50,000,000 shares, issued and outstanding 49,060,788 shares |
|
| 4,656,636 |
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| 4,656,636 |
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Paid-In Capital |
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| 56,840 |
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| 56,840 |
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Accumulated Deficit |
|
| (6,791,355 | ) |
| (6,869,947 | ) |
Total Stockholders’ Deficit |
|
| (2,077,879 | ) |
| (2,156,471 | ) |
Total Liabilities and Stockholders’ Deficit |
| $ | 106,772 |
| $ | 129,104 |
|
See accompanying notes to financial statements.
1
MOBILE AREA NETWORKS, INC.
(A Florida Corporation)
Sanford, Florida
Statements of Operations
Three months ended March 31, 2011 and 2010
(Unaudited)
|
| Three Months Ended March 31, 2011 |
| Three Months Ended March 31, 2010 |
| ||
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Sales-Net of Returns and Allowances |
| $ | 60,574 |
| $ | 80,409 |
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Cost of Goods Sold |
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| 43,325 |
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| 67,307 |
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Gross Profit |
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| 17,249 |
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| 13,102 |
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Operating Expenses |
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Depreciation |
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| 1,547 |
|
| 1,547 |
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Bad Debt Expense |
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| 2,000 |
|
| — |
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Interest and Finance Charges |
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| 4,212 |
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| 3,651 |
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Outside Services |
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| 1,300 |
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| 800 |
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Administrative Payroll and Payroll Taxes |
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| 48,074 |
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| 53,332 |
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Professional Services |
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| 1,000 |
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| 7,000 |
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Other Operating Expenses |
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| 37,718 |
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| 38,288 |
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Total Operating Expenses |
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| 95,851 |
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| 104,618 |
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Net Income (Loss) before taxes |
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| (78,602 | ) |
| (91,516 | ) |
Provision for Taxes |
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| — |
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| — |
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Net Income (Loss) for the Period |
| $ | (78,602 | ) | $ | (91,516 | ) |
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Weighted Average Number of Common Shares |
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| 49,060,788 |
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| 48,860,788 |
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Net loss per share-Basic and Diluted |
| $ | (0.00 | ) | $ | (0.00 | ) |
The accompanying notes are an integral part of these financial statements.
2
MOBILE AREA NETWORKS, INC.
(A Florida Corporation)
Sanford, Florida
Statements of Cash Flows
Three months ended March 31, 2011 and 2010
(Unaudited)
|
| Three Months Ended March 31, 2011 |
| Three Months Ended March 31, 2010 |
| ||
Cash flows from operating activities |
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Net income (loss) for the Period |
| $ | (78,602 | ) | $ | (91,516 | ) |
Adjustments to Reconcile Net Loss to Net Cash Flows |
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Depreciation |
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| 1,547 |
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| 1,547 |
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Bad Debt Expense |
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| 2,000 |
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| — |
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Changes in Assets and Liabilities: |
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Accounts Receivable |
|
| (26,500 | ) |
| (15,589 | ) |
Inventory |
|
| 621 |
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| 1,891 |
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Accounts Payable |
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| 689 |
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| 5,276 |
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Accrued Expenses |
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| 39,554 |
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| 37,702 |
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Accrued Salaries-Related Party |
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| 30,000 |
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| 30,000 |
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Net Cash Flows from Operating Activities |
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| (30,691 | ) |
| (30,689 | ) |
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Cash Flows from Investing Activities |
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Acquisition of Property and Equipment |
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| — |
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| — |
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Cash Flows from Financing Activities |
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Advances (Repayments) from Stockholders |
|
| 26,800 |
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| (4,000 | ) |
Increases (Repayment) of Notes and Capital Leases Payable |
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| 516 |
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| 496 |
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Net Cash Flows from Financing Activities |
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| 27,316 |
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| (3,904 | ) |
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Net Change in Cash and Cash Equivalents |
|
| (3,375 | ) |
| (34,593 | ) |
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Cash and Cash Equivalents (Bank Overdraft)-Beginning of Period |
|
| (13,587) |
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| 42,837 |
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Cash and Cash Equivalents (Bank Overdraft)-End of Period |
| $ | (16,962 | ) | $ | 8,244 |
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Supplemental disclosure of cash flow information |
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Cash paid for: |
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Taxes |
| $ | — |
| $ | — |
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Interest |
| $ | 4,212 |
| $ | 3,651 |
|
The accompanying notes are an integral part of these financial statements.
3
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 $78,602 and $91,516 for the three months ended March 31, 2011 and 2010, respectively. As a result, there is an accumulated deficit of $6,869,947 at March 31, 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.
4
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Liquidity and Capital Resources
Working Capital amounted to $(414,220) at March 31, 2011 compared to $(393,974) at December 31, 2010. Bank Overdraft amounted to $16,962 at March 31, 2011 as compared to $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 three months ended March 31, 2011 and 2010 was $(30,691) and $(30,689). For the three months ended March 31, 2011 and 2010, cash was provided primarily by operations and partly by advances from shareholders. During the three months ended March 31, 2010 and 2009, 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, 2011 sales were $60,574 and for the three months ended March 31, 2010, sales were $80,409. The decrease relates to a reduction in shipments to customers related to soft economic conditions.
Cost of Goods Sold decreased during the current period first quarter as compared with the year earlier first quarter. For the three months ended March 31, 2011, Cost of Goods Sold were $43,325 and for the three months ended March 31, 2010, Cost of Goods Sold were $67,307 The decrease is commensurate with the decrease in sales.
Total Operating Expenses decreased to $95,851 for the three months ended March 31, 2011 from $104,618 for the three months ended March 31, 2010.
Depreciation expense was unchanged at $1,547 for the current year first quarter and the prior year first quarter.
Bad Debt Expense was $2,000 and $-0- for the three months ended March 31, 2011 and 2010, respectively. The allowance for uncollectible accounts is considered adequate for the current period.
Interest and Finance Charges expense increased to $4,212 for the three months ended March 31, 2011 from $3,651 for the three months ended March 31, 2010. The increase is related to the overall level of outstanding long-term debt and credit card payables that is greater than the year earlier period.
Outside Services expense is $1,300 for the three months ended March 31, 2011 compared to $800 for the three months ended March 31, 2010. The current year increase was due to an increased use of contract labor for plant operations.
Administrative Payroll and Payroll Taxes expense decreased to $48,074 for the three months ended March 31, 2011 from $53,332 for the three months ended March 31, 2011. The decrease reflects staff reductions necessitated by the contraction in business activity.
Professional Services expense was $1,000 for the three months ended March 31, 2011 and $7,000 for the three months ended March 31, 2010. The amounts reflect fees paid to the independent public accountant for auditing services and also fees for legal services.
Other Operating Expenses were $37,718 for the three months ended March 31, 2011 and $38,288 for the three months ended March 31, 2010. The decrease is not material. Other Operatng Expenses includes spending for local taxes, licenses, insurance expenses, travel and telephone.
The Net Loss for the Period was $78,602 for the three months ended March 31, 2011, a decrease from the $91,516 Net Loss reported for the three months ended March 31, 2010. The Net Income (Loss) Per Share remained unchanged at $.00.
5
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.
6
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.
(Removed and Reserved).
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.
Certification Pursuant to Item 601(b)(31) of Regulation S-K, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Certification Pursuant to Item 601(b)(31) of Regulation S-K, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
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).
7
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: May 13, 2011
| MOBILE AREA NETWORKS INC. | |
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| By: | /s/ George Wimbish |
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| George Wimbish |
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| Director, Chairman and President |
8