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EX-31 - EXHIBIT 31.1 - MOBILE AREA NETWORKS INCex31-1.htm
EX-32 - EXHIBIT 32 - MOBILE AREA NETWORKS INCex32.htm
EX-31 - EXHIBIT 31.2 - MOBILE AREA NETWORKS INCex31-2.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, 2014

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, 2014, 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.

 7
     
Item 3. Quantitative and Qualitative Disclosures about Market Risk .  8
     
Item 4. Controls and Procedures  8
     
PART II-OTHER INFORMATION
     
Item 1. Legal Proceedings.  8
     
Item 1A Risk Factors.  8
     
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.  8
     
Item 3. Defaults Upon Senior Securities.  8
     
Item 4. Submission of Matters to a Vote of Securities Holders.  9
     
Item 5. Other Information.  9
     
Item 6. Exhibits  9
     
SIGNATURE  9
   

 

 
2

 

 

 

Item 1. Financial Statements

 

 MOBILE AREA NETWORKS, INC.

(A Florida Corporation)

Sanford, Florida

Balance Sheets

 

   

December 31,

   

June 30

 
   

2013

   

2014

 
   

(Unaudited)

   

(Unaudited)

 
Assets  

Current assets:

               

Cash and Cash Equivalents

  $     $  

Accounts Receivable-Net of Allowance for Doubtful Accounts

    1,000       2,500  

Inventory

           

Total current assets

    1,000        
                 

Property and Equipment-Net of Accumulated Depreciation

           
                 

Other Assets:

               

Security Deposits and Other Assets

           

Total Assets

  $ 1,000     $ 2,500  

Liabilities and Stockholders' Deficit

 

Current liabilities:

               

Bank Overdraft

  $ 28,880     $ 28,880  

Notes and Capital Leases Payable-Due Within One Year

    105,244        

Acounts Payable

    98,539       98,539  

Accrued Expenses

    16,580       16,580  

Total current liabilities

    249,243       143,999  
                 

Other Liabilities:

               

Notes and Capital Leases Payable-Due After One Year

           

Accrued Salaries-Related Party

    1,668,048       1,728,048  

Advances from Stockholders

    367,011       367,011  

Total Liabilities

    2,284,302       2,239,058  
                 

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

    (6,996,778 )     (6,950,034 )

Total Stockholders’ Deficit

    (2,283,302 )     (2,236,558 )

Total Liabilities and Stockholders’ Deficit

  $ 1,000     $ 2,500  

 

 

See accompanying notes to financial statements.

 

 
3

 

 

MOBILE AREA NETWORKS, INC.

(A Florida Corporation)

Sanford, Florida

Statements of Operations

Three and Six months ended June 30, 2014 and 2013

(Unaudited)

 

 

   

Three months

Ended

June 30,

2014

   

Three months

Ended

June 30,

2013

   

Six months

Ended

June 30,

2014

   

Six months

Ended

June 30,

2013

 
                                 

Sales-Net of Returns and Allowances

  $ 1,000     $     $ 1,500     $  

Cost of Goods Sold

                       

Gross Profit (Loss)

    1,000             1,500        
                                 

Operating expenses

                               

Depreciation

                       

Bad Debt Expense

                       

Interest and Finance Charges

          1,188       1,231       1,723  

Outside Services

                       

Administrative Payroll and Taxes

    30,000       30,000       60,000       60,000  

Professional Services

                      850  

Other Operating Expenses

          45             90  
                                 

Total Operating Expenses

    30,000       31,233       61,231       62,663  

Net Loss Before Other Income and Provision for Taxes

    (29,000 )     (31,233 )     (59,731 )     (62,663 )

Other Income

                               

Stale-dated debt written-off

    106,475             106,475        

Net Income (Loss) Before Provision for Taxes

    77,475       (31,233 )     46,744       (62,663 )

Provision for Taxes

                       

Net Income (Loss) for the Period

  $ 77,475)     $ (31,233

)

  $ 46,744     $ (62,663

)

                                 

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

)

  $ 0.00     $ (0.00

)

 

 

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

  

 
4

 

 

MOBILE AREA NETWORKS, INC.

(A Florida Corporation)

Sanford, Florida

Statements of Cash Flows

 

Six months ended June 30, 2014 and 2013

(Unaudited)

 

   

Six Months

   

Six Months

 
   

Ended

   

Ended

 
   

June 30,

   

June 30,

 
   

2014

   

2013

 

Cash flows from operating activities

               

Net income (loss) for the Period

  $ 46,744     $ (62,663 )
Adjustments to Reconcile Net Loss to Net Cash Flows from Operating Activities:                

Depreciation

           

Bad Debt Expense

           

Changes in Assets and Liabilities:

               

Accounts Receivable

    (1,500 )      

Inventory

           

Other Assets

           

Accounts Payable

          850  

Accrued Expenses

           

Accrued Salaries-Related Party

    60,000       60,000  

Net Cash Flows from Operating Activities

    105,244       (1,813 )
                 

Cash Flows from Investing Activities

               

Acquisition of Property and Equipment

           

Cash Flows from Financing Activities

               

Advances (Repayments) from Stockholders

           

Proceeds from Issuance of Common Stock

           

Increases (Repayment) of Notes and Capital Leases Payable

    (105,244 )     1,723  
                 

Net Cash Flows from Financing Activities

    (105,244 )     1,723  
                 

Net Change in Cash and Cash Equivalents

          (90 )
                 

Cash and Cash Equivalents (Bank Overdraft)-Beginning of Period

    (28,880 )     (28,791 )
                 

Cash and Cash Equivalents (Bank Overdraft)-End of Period

  $ (28,880 )   $ (28,881 )
                 

Supplemental disclosure of cash flow information

               
                 

Cash paid for:

               

Taxes

  $     $  
                 

Interest

  $     $  

 

See accompanying notes to financial statements.

  

 
5

 

  

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 $46,744 and a net loss of $(62,663) for the six months ended June 30, 2014 and 2013, respectively. There is an accumulated deficit of $(6,950,034) at June 30, 2014. The primary causes of the operating losses for 2014 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, in the winding down of internal manufacturing vacated the plant, disposed of the plant equipment and terminated manufacturing 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.      

 

 
6

 

 

Item 2.

MANAGEMENT’S DISCUSSION AND

ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

 

 

Liquidity and Capital Resources

 

Working Capital amounted to $(141,499) at June 30, 2014 compared to $(248,243) at December 31, 2013. Cash amounted to a Bank Overdraft of $28,880 as of June 30, 2014 and December 31, 2013, respectively. 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, 2014 and 2013 was $105,244 and $(1,813), respectfully. For the six months ended June 30, 2014 and 2013, cash was not provided from any sources.

 

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 increased during the current period second quarter and six months as compared with the year earlier period. For the three months ended June 30, 2014 sales were $1,000 and for the three months ended June 30, 2013, sales were $-0-. For the six months ended June 30, 2013, sales were $1,500 and for the six months ended June 30, 2013, sales were $-0-. The increases for both the three month and six month periods relate to the sale of certain gun shoulder recoil pads available from inventory which had previously been written-off as valueless.

 

Cost of Goods Sold was unchanged at $-0- for the three and six months ending June 30, 2014 and June 30, 2013, respectively.

 

Total Operating Expenses decreased to $30,000 for the three months ended June 30, 2014 from $31,233 for the three months ended June 30, 2013. For the six months ending June 30, 2014, operating expenses decreased to $61,231 from $62,663 for the six months ending June 30, 2013.

 

Interest and Finance Charges decreased to $-0- for the three months ended June 30, 2014 from $1,188 for the three months ended June 30, 2013. Interest and Finance Charges decreased to $1,231 for the six months ended June 30, 2014 from $1,723 for the six months ended June 30, 2013. The current period interest expense and finance charges are less due to management’s decision to no longer recognize two long-term disputed debt obligations. After considerable passage of time without any communication with the creditors, the disputed items were written off to Other Income as of June 30, 2014.

 

Administrative Payroll and Payroll Tax expense remained unchanged at $30,000 for the three months ending June 30, 2014 and June 30, 2013, respectively. Administrative Payroll and Payroll Tax expense remained unchanged at $60,000 for the six months ending June 30, 2014 and June 30, 2013, respectively.

 

Professional Services expense was $-0- for the three months ending June 30, 2014 and June 30, 2013, respectively. Professional Services expense decreased to $-0- for the six months ended June 30, 2014 from $850 for the six months ended June 30, 2013. The expense was for legal fees.

 

Other Operating Expenses were $-0- for the three months ended June 30, 2014 and $45 for the three months ended June 30, 2013. Other Operating Expenses were $-0- for the six months ended June 30, 2014 and $90 for the six months ended June 30, 2013. The decreases for the three and six month periods reflect decreased spending following the winding down of internal manufacturing.

 

Other Income for the three months ending June 30, 2014 was $106,475. Other Income for the three months ending June 30, 2013 was $-0-. For the six months ending June 30, 2014, Other Income was $106,475. For the six months ending June 30, 2013, Other Income was $-0-. The amount recognized in the current period was for the write-off of stale-dated disputed debt obligations.

  

 
7

 

 

The Net Income (Loss) for the Period was $77,475 for the three months ended June 30, 2014 an increase from the $(31,233) Net Income (Loss) for The Period reported for the three months ended June 30, 2013. The Net Income (Loss) for the Period was $46,744 for the six months ended June 30, 2014, an increase from the $(62,663) Net Income (Loss) for the Period for the six months ended June 30, 2013. The Net Income (Loss) Per Share was $.00 for the three months ending June 30, 2014 and June 30, 2013, respectively. The Net Income (Loss) Per Share was $.00 for the six months ending June 30, 2014 and June 30, 2013, respectively.

 

 

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

  

 
8

 

 

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: October 17, 2014         

Mobile Area Networks, Inc.

   

  

     
 

By:  

/s/ George Wimbish

   

George Wimbish

   

Director, Chairman and President

 

 

9