UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

Mobile Area Networks, Inc.

(Exact name of registrant as specified in its charter)

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 is a large accelerated filer, an accelerated filer, a non-accelerated filer., or a smaller reporting company.

As of June 30, 2012, 49,060,788 shares of voting common stock were outstanding

Mobile Area Networks, Inc.

Index

Page

Item 1. Financial Statements

 MOBILE AREA NETWORKS, INC.

(A Florida Corporation)

Sanford, Florida

Balance Sheets

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, 2012 and 2011

(Unaudited)

See accompanying notes to financial statements.

MOBILE AREA NETWORKS, INC.

(A Florida Corporation)

Sanford, Florida

Statements of Cash Flows

Six months ended June 30, 2012 and 2011

(Unaudited)

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 net income of $329,891 and a net loss of $187,246 for the six months ended June 30, 2012 and 2011, respectively. As a result, there is an accumulated deficit of $6,787,679 at June 30, 2012. The primary causes of the operating losses for 2012 and 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 is in the process of re-evaluating its strategic direction and is actively exploring merger opportunities. The Company vacated the plant, auctioned (sold) the equipment and terminated the employees. 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 $(234,310) at June 30, 2012 compared to $(537,419) at December 31, 2011. Cash amounted to a Bank Overdraft of $30,192 at June 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 from or (used in) operating activities for the six months ended June 30, 2012 and 2011 was $112,948 and ($37,177). For the six months ended June 30, 2012 and 2011, cash was provided primarily by operations and Advances from Stockholders. During the six months ended June 30, 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 second quarter and six months as compared with the year earlier period. For the three months ended June 30, 2012 sales were $13,780 and for the three months ended June 30, 2011, sales were $35,003. For the six months ended June 30, 2012, sales were $40,058 and for the six months ended June 30, 2011, sales were $95,577. The decreases for both the three month and six 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 increased during the three and six month periods when compared to the year earlier periods. For the three months ended June 30, 2012, Cost of Goods Sold were $75,394 and for the three months ended June 30, 2011, Cost of Goods Sold were $44,217. For the six months ended June 30, 2012, Cost of Goods Sold were $128,271 and for the six months ended June 30, 2011, Cost of Goods Sold were $87,542. The increases for the three and six month periods related principally to the write-off of inventory.

Total Operating Expenses decreased to $91,625 for the three months ended June 30, 2012 from $99,430 for the three months ended June 30, 2011. For the six months ending June 30, 2012, operating expenses decreased to $164,024 from $195,281 for the six months ending June 30, 2011.

Depreciation expense remained unchanged at $1,547 for the three months ended June 30, 2012 and June 30, 2011, respectively. For the six months ended June 30, 2012 and June 30, 2011, respectively, depreciation expense was $3,094.

Bad Debt Expense was $22,649 for the three months ending June 30, 2012 and $-0- for the three months ending June 30, 2011. For the six months ending June 30, 2012, Bad Debt Expense was $22,649 and for the six months ending June 30, 2011, Bad Debt Expense was $2,000.

Interest and Finance Charges decreased to $3,300 for the three months ended June 30, 2012 from $4,700 for the three months ended June 30, 2011. Interest and Finance Charges decreased to $6,367 for the six months ended June 30, 2012 from $8,912 for the six months ended June 30, 2011. The current period interest expense and finance charges are less due to a lower interest rate average on credit cards.

Outside Services expense was $2,040 for the three months ended June 30, 2012 and $3,270 for the three months ending June 30, 2011. For the six months ended June 30, 2012, Outside Services expense was $8,170 compared to $4,570 for the six months ended June 30, 2011. The incidence of contracted labor expenses vary with Company staffing and the levels of production.

Administrative Payroll and Payroll Tax expense decreased to $30,290 for the three months ending June 30, 2012 from $49,867 for the three months ending June 30, 2011. Administrative Payroll and Payroll Tax expense decreased to $60,599 for the six months ending June 30, 2012 from $97,941 for the six months ending June 30, 2011. The reduced expenses for the quarter and six months is attributable to a reduction in staff necessitated by the decrease in sales.

Professional Services expense increased to $-0- for the three months ended June 30, 2012 from $6,550 for the three months ended June 30, 2011. For the six months ended June 30, 2012, Professional Services expense decreased to $-0- from $7,550 for the six months ended June 30, 2011. The expense is for audit and review services from the Company’s independent public accountants and also legal services.

Other Operating Expenses were $31,799 for the three months ended June 30, 2012 and $33,496 for the three months ended June 30, 2011. Other Operating Expenses were $63,145 for the six months ended June 30, 2012 and $71,214 for the six months ended June 30, 2011. The decreases for the three and six month periods reflect decreased spending for marketing, health insurance, travel and telephone expenses.

Other Income for the three months ending June 30, 2012 included $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, 2012 also included $3,209 for a gain on the sale of the Company’s equipment. For the three and six months ending June 30, 2011, Other Income was $-0-.

The Net Income for the Period was $428,889 for the three months ended June 30, 2012 an increase from the $(108,644) Net Loss for The Period reported for the three months ended June 30, 2011. The Net Income for the Period was $329,891 for the six months ended June 30, 2012, an increase from the $(187,246) Net Loss reported for the six months ended June 30, 2011. The Net Loss Per Share was $.01 for the three months ending June 30, 2012 and $.00 for the three months ending June 30, 2011. The Net Loss Per Share was $.01 for the six months ending June 30, 2012 and $.00 for the six months ending June 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                              

None

Not required by smaller reporting companies.

None

None

None

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.

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.

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