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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q/A

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

For the quarterly period ended: September 30, 2011

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] Yes  [ ] No

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 1 2b-2 of the Act).

[ ] Yes  [X] No

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

 
 

Mobile Area Networks, Inc.

Index

PART I – FINANCIAL INFORMATION

Page
Item 1. Financial Statements 3
Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operation 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, 2010 (Audited)   September 30, 2011 (Unaudited) 
 Assets      
Current assets:      
Cash and Cash Equivalent $                  - $  
Accounts Receivable-Net of Allowance for Doubtful Accounts 16,257   9,158
Inventory 67,953   63,480
Total current assets 84,210   72,638
Property and Equipment-Net of Accumulated Depreciation 15,470   10,829
Other Assets:      
Security Deposits and Other Assets 7,092   7,092
Total Assets $               106,772 $ 90,559
Liabilities and Stockholders' Deficit      
Current liabilities:      
Bank Overdraft $ 13,587 $ 9,510
Notes and Capital Leases Payable-Due Within One Year 99,596   107,284
Accounts Payable 96,729   90,935
Accrued Expenses 268,272   365,870
Total current liabilities 478,184   573,599
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   2,374,066
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)   (6,996,983)
Total Stockholders’ Deficit (2,077,879)   (2,283,507)
Total Liabilities and Stockholders’ Deficit $               106,772 $ 90,559

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, 2011 and 2010
(Unaudited)

 

 

   Three  Three Nine  Nine
   Months  Months  Months  Months
   Ended  Ended  Ended  Ended
   September 30,  September 30,  September 30,  September 30,
   2011  2010  2011  2010
             
Sales-Net of Returns and Allowances  $39,789   $69,564   $135,366   $249,450 
Cost of Goods Sold   27,964    64,756    115,506    211,807 
Gross Profit (Loss)   11,825    4,808    19,860    37,643 
Operating expenses                    
Depreciation   1,547    1,547    4,641    4,641 
Bad Debt Expense   —      —      2,000    —   
Interest and Finance Charges   2,279    3,604    11,191    11,608 
Outside Services   6,124    5,446    10,694    7,096 
Administrative Payroll and taxes        51,113    97,941    154,854 
Professional Services        1,525    7,550    10,925 
Other Operating Expenses   20,257    47,879    91,471    138,030 
Total Operating Expenses   30,207    111,114    225,488    327,154 
Loss Before Other Income and Provision for Taxes   (18,382)   (106,306)   (205,628)   (289,511)
Other Income
Trade Accounts Payable written-off
   —      —      —      —   
Net Income (Loss) before taxes   (18,382)   (106,306)   (205,628)   (289,511)
Provision for Taxes   —      —      —      —   
Net Loss for the Period  $(18,382)  $(106,306)  $(205,628)  $(289,511)
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)  $(0.01)

See accompanying notes to financial statements.

 
 

MOBILE AREA NETWORKS, INC.
(A Florida Corporation)
Sanford, Florida
Statements of Cash Flows

Nine months ended September 30, 2011 and 2010
(Unaudited)

   Nine Months
Ended
September 30,
2011
  Nine Months
Ended
September 30,
2010
Cash flows from operating activities          
Net income (loss) for the Period  $(205,628)  $(289,511)
Adjustments to Reconcile Net Loss to Net Cash Flows from Operating Activities:          
Depreciation   4,641    4,641 
Bad Debt Expense   2,000      
Changes in Assets and Liabilities:          
Accounts Receivable   5,099    10,484 
Inventory   4,473    2,681 
Accounts Payable   (5,794)   6,779 
Accrued Expenses   97,598    114,636 
Accrued Salaries-Related Party   60,000    64,375 
Net Cash Flows from Operating Activities   (37,611)   (85,915)
Cash Flows from Investing          
  Activities Acquisition of Property and Equipment          
Cash Flows from Financing Activities          
Advances (Repayments) from Stockholders   34,000    54,225 
Proceeds from Issuance of Common Stock          
Increases (Repayment) of Notes and Capital Leases Payable   7,688    1,502 
Net Cash Flows from Financing Activities   41,688    55,727 
Net Change in Cash and Cash Equivalents   4,077    (30,188)
Cash and Cash Equivalents (Bank Overdraft)-Beginning of Period   (13,587)   42,837 
Cash and Cash Equivalents (Bank Overdraft)-End of Period  $(9,510)  $12,649 
Supplemental disclosure of cash flow information          
Cash paid for:          
Taxes         
Interest  $11,191    $11,608 
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 $205,628 and $289,511 for the Nine months ended September 30, 2011 and 2010, respectively. As a result, there is an accumulated deficit of $6,996,983 at September 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-Amended Financial Statements

These financial statements are being filed as “amended” because the originals were not reviewed by the Company’s independent accounting firm within the forty-five day post balance sheet date filing deadline. This amended Form 1 0-Q/A has been reviewed by the Company’s independent accountant.

 
 

Item 2.

MANAGEMENT’S DISCUSSION AND

ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

Liquidity and Capital Resources

Working Capital amounted to $(500,961) at September 30, 2011 compared to $(393,974) at December 31, 2010. Cash amounted to a Bank Overdraft of $9,510 at September 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 Nine months ended September 30, 2011 and 2010 was $(37,61 1) and ($85,915). For the Nine months ended September 30, 2011 and 2010, cash was provided primarily by operations and Advances from Stockholders. During the Nine months ended September 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 Nine months as compared with the year earlier period. For the three months ended September 30, 2011 sales were $39,789 and for the three months ended September 30, 2010, sales were $69,564. For the Nine months ended September 30, 2011, sales were $135,366 and for the Nine months ended September 30, 2010, sales were $249,450. The decreases for both the three month and Nine 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 Nine month periods when compared to the year earlier periods. For the three months ended September 30, 2011, Cost of Goods Sold were $27,964 and for the three months ended September 30, 2010, Cost of Goods Sold were $64,756. For the Nine months ended September 30, 2011, Cost of Goods Sold were $115,506 and for the Nine months ended September 30, 2010, Cost of Goods Sold were $211,807. The decreases for the three and Nine month periods related to the decreases in sales.

Total Operating Expenses decreased to $30,207 for the three months ended September 30, 2011 from $111,114 for the three months ended September 30, 2010. For the Nine months ending September 30, 2011, operating expenses decreased to $225,488 from $327,154 for the Nine months ending September 30, 2010.

Depreciation expense remained unchanged at $1,547 for the three months ended September 30, 2011 and September 30, 2010, respectively. For the Nine months ended September 30, 2011 and September 30, 2010, respectively, depreciation expense was $4,641.

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

 
 

Interest and Finance Charges decreased to $2,279 for the three months ended September 30, 2011 from $3,604 for the three months ended September 30, 2010. Interest and Finance Charges decreased to $11,191 for the Nine months ended September 30, 2011 from $11,608 for the Nine months ended September 30, 2010. The current period interest expense and finance charges are less due to a lower interest rate environment on credit cards.

Outside Services expense was $6,124 for the three months ended September 30, 2011 and $5,446 for the three months ending September 30, 2010. For the Nine months ended September 30, 2011, Outside Services expense was $10,694 compared to $7,096 for the Nine months ended September 30, 2010. The incidence of contracted labor expenses vary with Company staffing and the levels of production.

Administrative Payroll and Payroll Tax expense decreased to $0 for the three months ending September 30, 2011 from $51,113 for the three months ending September 30, 2010. Administrative Payroll and Payroll Tax expense decreased to $97,941 for the Nine months ending September 30, 2011 from $154,854 for the Nine months ending September 30, 2010. The reduced expenses for the quarter and Nine months is attributable to a reduction in staff necessitated by the decrease in sales.

Professional Services expense decreased to $0 for the three months ended September 30, 2011 from $1,525 for the three months ended September 30, 2010. For the Nine months ended September 30, 2011, Professional Services expense decreased to $7,550 from $10,925 for the Nine months ended September 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 $20,257 for the three months ended September 30, 2011 and $47,879 for the three months ended September 30, 2010. Other Operating Expenses were $91,471 for the Nine months ended September 30, 2011 and $138,030 for the Nine months ended September 30, 2010. The decreases for the three and Nine month periods reflect decreased spending for electric utilities, travel, local taxes and telephone expenses.

The Net Loss for the Period was $(18,382) for the three months ended September 30, 2011 an increase from the $(106,306) Net Loss for The Period reported for the three months ended September 30, 2010. The Net Loss for the Period was $(205,628) for the Nine months ended September 30, 2011, an increase from the $(289,511) Net Loss reported for the Nine months ended September 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 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.

The amended filing of our quarterly financial report has additionally caused management to conclude that the Company’s internal controls and procedures over financial reporting are not effective.

 
 

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/A 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.

31.1Certification Pursuant to Item 601 (b)(31) of Regulation S-K, as adopted pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.
31.2Certification Pursuant to Item 601 (b)(31) of Regulation S-K, as adopted pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.
32Certification 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: June 4, 2012 Mobile Area Networks, Inc.

By: /s/ George Wimbish

George Wimbish

Director, Chairman and President