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As filed with the Securities and Exchange Commission on May 1, 1998
REGISTRATION No. 333-18439
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form SB-2/A3
Registration Statement Under the Securities Act of 1933
MOBILE AREA NETWORKS, INC.
(Name of small business issuer in its charter)
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<S> <C> <C>
Florida 4813 59-3482752
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization Classification Code Number) Identification No.)
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George E. Wimbish, Chairman
1275 Lake Heathrow Lane, Suite 115
Heathrow, Florida 32746
407-333-2350 FAX 407-333-9903
(Address and telephone of principal
executive offices and principal place of business)
James R. Leone, P.A.
1275 Lake Heathrow Lane, Suite 115
Heathrow, Florida 32746
407-805-9200 FAX 407-805-9030
(Name, address and telephone of agent for service)
Approximate Date of Proposed Sales to the Public: As soon as practicable
after the Registration Statement becomes effective.
CALCULATION OF REGISTRATION FEE
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Amount Proposed Proposed
Title of Each Class of To be Maximum Maximum Amount of
Securities to be Registered Registered Offering Price Aggregate Registration Fee
Per Unit Offering Price
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Common Stock, no par value. 5,000,000 $6.00 $30,000,000 $7,500.00
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Total
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The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the
Registrant shall file a further amendment which specifically states that
the registration Statement shall thereafter become effective in accordance
with Section 8(a) of the Securities Act of 1933 or until the Registration
Statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
Subject To Completion, Dated ( )
MOBILE AREA NETWORKS, INC.
5,000,000 Common Shares (maximum) at $6.00 for $30,000,000
Mobile Area Networks, Inc., a Florida corporation, (the "Company") offers the
users of laptop computers and handheld digital communication devices its very
low cost, very fast, encrypted (private) wireless communication service called
MOBILAN(R). This system uses a unique combination of second-generation megabit
transceiver PC card, encryption software, local relays, and fiber optics
transmission for clean, fast, LAN access to main computer groups, including the
Internet and the Intranet. Digital, audio, and video live interaction will be
available on a real-time basis, at a small fraction of the cost of telephone
modem usage. The Company is a development stage company with no operating
history and no revenues.
To buy the stock, read the Prospectus and mail or wire your funds as described
in the enclosed Subscription Agreement and on the Internet at
HTTP://WWW.MOBILEAREA.NET.
CONTACT: GEORGE E. WIMBISH, CHAIRMAN
1275 LAKE HEATHROW LANE, SUITE 115
HEATHROW, FLORIDA 32746
Tel: 407-333-2350, Fax: 407-333-9903
E-MAIL: [email protected]
(HTTP: //WWW.MOBILEAREA.NET)
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PRICING TABLE PRICE SALES PROCEEDS TO
TO PUBLIC(1) COMMISSION (2) COMPANY(3)
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PER SHARE $6.00 $.60 $5.40
MINIMUM PURCHASE 100 SHARES $600.00 $60.00 $540.00
TOTAL MAXIMUM $30,000,000 $3,000,000 $27,000,000
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1. The offering price was determined in the Company's discretion.
2. The Company's officers and directors are selling the shares without
compensation. However, this column reflects the fact that the Company may
engage one or more licensed broker dealers as selling agents for agreed
upon commissions not to exceed ten percent (10%), who may allot a portion
thereof to other licensed broker dealers assisting in the sales. The
Company and broker dealers will mutually indemnify and defend each other
for claims attributable to the indemnifying party. Persons selling or
assisting in sales may be deemed to be underwriters under securities laws.
No broker dealers or other terms of selling have been determined.
3. Before deducting offering expenses payable by the Company estimated to
total $300,000 in the case of the Maximum Offering (1% of gross proceeds).
(See "Use of Proceeds", herein.) The proceeds from the sale of shares
will be transmitted by noon of the business day following receipt, to the
Company's bank account.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE U.S. SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION OR REGULATORY
AUTHORITY, NOR HAVE THEY PASSED UPON THE ACCURACY OR ADEQUACY OF THIS DOCUMENT.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
These securities are being sold on a best efforts, no minimum amount basis. The
offering will expire nine months after the effective date of the registration
statement for the securities, if not updated by amendment or terminated sooner.
A current prospectus will be available so long as the offering is continued.
The shares are offered subject to prior sale, and the Company reserves the
right to reject subscriptions in whole or in part, or to accept them in any
order. The Company will send by U.S. mail to subscribers within thirty (30)
days, signed copies of their Subscription Agreement and Common Stock
certificates. The Company intends to qualify the securities in every state of
the U.S. in which sales are solicited or made.
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IMPORTANT INFORMATION
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INVESTMENT IN SMALL BUSINESSES INVOLVES A HIGH DEGREE OF RISK, AND
INVESTORS SHOULD NOT INVEST ANY FUNDS IN THIS OFFERING UNLESS THEY CAN AFFORD
TO LOSE THEIR ENTIRE INVESTMENT. SEE "RISK FACTORS" HEREIN FOR CERTAIN
SUBSTANTIAL RISKS TO INVESTORS.
IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN
EXAMINATION OF THE ISSUER AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS
AND RISKS INVOLVED.
THE COMPANY IS A DEVELOPMENT STAGE COMPANY.
THIS OFFERING IS INTENDED TO BE QUALIFIED (AS PROVIDED IN PUBLIC LAW
104-290) FOR OFFERING IN ALL STATES OF THE UNITED STATES IN WHICH SALES ARE
SOLICITED OR MADE.
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SUMMARY
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The following summary information is qualified in its entirety by the
detailed information and financial statements appearing elsewhere herein. See
"Risk Factors" for a discussion of certain factors that should be considered in
connection with an investment in the stock. THE COMPANY IS A DEVELOPMENT STAGE
COMPANY WITH NO OPERATING HISTORY AND NO REVENUES.
FAST, LOW COST WIRELESS SERVICE
Mobile Area Networks, Inc., (the "COMPANY"), will be providing its
MOBILAN(R) wireless communication service for laptop Personal Computers and
handheld communication devices through a secure, low cost, very fast wireless
connection to remote home-office network services and to the Internet, from
select hotels and convention centers. Unlike a telephone modem connection, no
cord or telephone line connection is necessary for this service. The Company
will charge a user fee for this communication service. The user's hardware (PC
Card) and software for the MOBILAN(R) service will be paid for by such user or
by the user's employer as a setup fee, or as negotiated with the user's
employer.
The telephone modem was created so that a telephone line could carry
computerized data. The millions of miles of telephone wiring and millions of
telephone jacks support the modem strategy. The laptop Personal Computer modem
market (PC Card modems that fit into laptop computers) totaled three billion
dollars ($3,000,000,000) in modem equipment sales in 1995(1), and the usage fees
paid to telephone companies for line access and long distance charges probably
were much greater than that amount.
A study published on the Internet in December of 1997 by Killen &
Associates of Palo Alto, California predicts that the market for equipment and
software for connecting wireless users to the Internet will grow to 19.2 billion
dollars ($19,200,000,000) in the year 2002. This amount would be in addition to
and much larger, than the fees to Mobile Area Networks, Inc. for "access" to the
Internet through the MOBILAN(R) communications system. Then, there is a
potentially large market for the Company's services.
FIBER OPTIC TO LEC TO WIRELESS RELAY CONNECTION
There are now millions of miles of fiber optic cable for computer style
data transport installed in the U.S. These fiber network installations are
within miles of nearly every major corporation office, hotel, and airline club
in the U.S. Local Exchange Carriers (LECs) can provide a high-speed local data
connection from these fiber optic networks to almost any building site in the
U.S. The Company will use a high-speed, short-range wireless relay to reach the
LEC to make this high-speed fiber optic data connection from inside each relay
equipped building; and a faster-than-modem-speed, long-range wireless technology
from outside locations. The WLAN (Wireless Local Area Networks) relays are
low-cost, small, easily installed, and use a very small amount of electric
power. With these two technologies, laptop users can communicate from nearly any
location, and be securely connected to their home-office Local Area Network
(LAN), or to the Internet.
MASSIVE COST ADVANTAGES
The Company's exclusive MOBILAN(R) wireless communication service will
have a dramatic economic advantage over a telephone modem connection because it
is uniquely based on the unregulated computer style data network and not on the
highly regulated long distance telephone system. The underlying cost per bit of
data on the fiber optic data network is about 1/100th the cost of carrying a
bit of data on the telephone network. The Company has a unique method of
connecting the users of laptop PCs and handheld digital communication devices
to the data network.
There were seventeen million (17,000,000) business users of laptop
computers at the end of 1995(2). Nearly three million (3,000,000) of these
laptop users travel an average of three (3) times per month to interstate
destinations. BIS Strategic Decisions estimated that these mobile
professionals are spending over fifty million dollars
__________________________________
(1) AP Research Corporation, International Data Corporation.
(2) Ablonci, Wm. F., and Elliot, Thomas R.: Mobile Professional Market
Segmentation Study, March 1995, BIS Strategic Decisions, 1-617-982-9500
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($50,000,000) per month, or six hundred million dollars ($600,000,000) per
year in long distance charges and surcharges to check e-mail and send faxes
from hotels.
HOW MOBILAN(R) WORKS
THE COMPANY HAS INTEGRATED A NUMBER OF KEY EXISTING TECHNOLOGIES TO
CREATE THIS MOBILE DATA COMMUNICATION SERVICE, AND HAS ADDED KEY PROPRIETARY
CONTENT NECESSARY TO MAKE THE NETWORK FULLY FUNCTIONAL AND MORE COST
EFFECTIVE.
The Company is developing the MOBILAN(R) communications network by
joining wireless/wired public networks, which this offering will allow the
company to build, on a nationwide basis. Laptops are the lifeblood of the
business traveler "roadwarrior". With the PC Card expansion slots in laptops
and the Company's service called MOBILAN(R)(1), travelers will be able to
connect back to corporate networks from almost anywhere, without plugging into
a telephone line.
One PC Card is a high-speed, short-range wireless card. The cards are
known as WLAN (Wireless Local Area Networks) cards. The MOBILAN(R) WLAN cards
can communicate at more than 1 Mbps (Megabits per second) and are used inside
buildings. Initial target areas are hotels, convention centers, major office
buildings, airports, resorts, and restaurants.
The Company obtained an exclusive contract for its major markets with
the Raytheon Company to provide the WLAN PC Card and transceiver hardware to
Mobile Area Networks, Inc. However; the Company has acquired access to other
hardware from manufacturers who may better serve the Company's requirements.
Therefore, the Company is not dependent upon any single manufacturer for its
supply of hardware.
The second PC Card is a wireless wide-area data-networking card using
the CDPD (Cellular Data Packet Delivery) network. CDPD is a computer style
data extension to the existing cellular telephone network. CDPD can
communicate wirelessly at about 10 Kbps, or about the actual speed of a wired
modem, from nearly anywhere. CDPD service is deployed in over 100 metropolitan
areas throughout the U.S. Therefore, anywhere in these communities, outdoors or
indoors, a laptop computer user has full access to the home office network LAN
or to the Internet using the Company's MOBILAN(R) encrypted connection. These
metropolitan areas were selected by AT&T, GTE MobilNet, Bell Atlantic NYNEX and
others because they have the largest concentrations of cellular telephones. The
Company currently has CDPD cards available from more than one manufacturer.
If a hotel is equipped with the MOBILAN(R) service, a user simply opens
a properly equipped laptop computer anywhere in the hotel room, the hotel
convention room, the club or the bar, and is logged onto the home office network
at megabit speeds. All network resources are available as if the user were
sitting at a desk in the home office with a direct Ethernet connection. When in
the home office, the WLAN card likewise will provide performance comparable to a
direct connection, but gives a user the freedom to roam throughout the
facilities without a telephone cord connection to the laptop.
So, by means of a laptop equipped with PC Cards from the Company and
the MOBILAN(R) network, a user can connect to the home LAN or the Internet, in
home-office facilities, in hotels, in airline clubs, in a car, at home, in a
park, in the airport, and in the users' client location.
COMMUNICATION NETWORK VIA INTRANET (NOT INTERNET)
MOBILAN(R) will provide both high-speed and modem-speed data
communication connections between the wireless PC user and the home office LAN,
or other computer network through a high-speed private Intranet backbone of
fiber optic cables. It is a separate IP (Internet Protocol) network dedicated
primarily to corporate and business communication, not the public Internet.
SECURITY
__________________________________
(1) Service Mark was registered with the U.S. Patent and Trademark Office on
10/21/96
5
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MOBILAN(R) can achieve the industry's highest level of security,
thanks to some of the most comprehensive security software available. This
encryption software sets up impenetrable "tunnels" through which data can
travel safely. Authenticated, encrypted tunnels keep data from being accessed
or modified as it passes from a remote wireless client to the home LAN.
MOBILAN(R)'s encryption software products are commercially available from
software vendors.
MOBILAN(R) ECONOMICS
MOBILAN(R) WLAN service provides reliable, high-speed encrypted
communications at specific locations such as hotels and airline clubs.
MOBILAN(R) service is priced very competitively with local dial-up Internet
connectivity on a monthly basis for an unlimited amount of data, but also may
be purchased by the hour or the day at selected hotels and convention centers.
There is no comparable service available at any price.
MOBILAN(R) CDPD service is a wireless and encrypted (totally private)
form of the cellular modem's non-secure (non-private), reliable, slow-speed
communications across most major metropolitan areas. This CDPD service is ideal
for providing short, moderately rapid and timely data exchanges. CDPD service is
priced at approximately $50 per month for a total of 1 Mbyte of data
communication. The CDPD service is merely intended to be a backup to the
MOBILAN(R) system for the user who is not in range of the high speed system, but
must be connected at any speed.
THERE IS A THIRD SERVICE THAT MOBILE AREA NETWORKS, INC. IS
DEVELOPING. THIS WILL PROVIDE A COMBINATION OF LONG RANGE, AS WELL AS
MEDIUM-HIGH-SPEED WIRELESS SERVICE WITH WIDE AREA COVERAGE. THIS SERVICE IS IN
THE DEVELOPMENT STAGE.
MOBILE COMPUTING COMMUNICATIONS
Mobile computing is booming(1):
- In the U.S. alone, more than 4,600,000 (4.6-million) portable PCs
were sold in 1995, an increase of 23% over 1994. Figures for 1996
and 1997 should indicate a dramatic increase in this amount.
- Research indicates that at the end of 1995, there were nearly
17,000,000 (17 million) portable computers in use in the U.S.
- Airline and other research data show that 27,300,000 (27.3
million) professionals travel for business. At the end of 1994
approximately 20 percent or 5,500,000 (5.5 million) were using a
portable computer from a remote location.
However; in spite of the fact that 5,500,000 mobile professionals
travel with a laptop computer, these users are almost always limited to a data
connection of between 2400 and 28,800 baud (500 to 10,000 bits per second)
through a modem and telephone line connection, when and if they can find access
to a telephone jack connection.
Because the modem uses the public telephone network, the lack of
security and the slow transmission rate both, prevent direct home office LAN
connection. Thus, the use of a remote modem connection is limited to low volume
data transactions, such as messaging or e-mail applications that are on servers
outside the normal in-house network (LAN or Mainframe CPU). The remote use and
benefit of a laptop is significantly less than the power of the same laptop
when connected directly to the business network, thus reducing productivity.
MOBILAN(R) allows approximately 30 to 100 times faster data transfer on an
encrypted (totally private) basis at far lower cost.
Mobile professionals are not the only remote-computer users. Other
users include telecommuters (some with portables, but most with deskbound PCs),
workers operating from remote sites, and the millions of workers in the other
70 percent of the work force who are not classified as professionals, but who
use computers or digital communication devices (meter readers, inventory
clerks, rental car return verifiers, parking enforcement personnel, etc.).
__________________________________
(1) Computer Retailer News 12/8/95
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THE COMPANY'S PEOPLE
GEORGE E. WIMBISH: Board Chairman, President and CEO, is a founder of
Mobile Area Networks, Inc. He is a successful private investor with over 20
years of experience in acquisitions/mergers and company startups. He has a
diversified background in wholesaling, manufacturing, and direct marketing. His
most recent prior position was CEO of a financial services company. In 1984
he was a qualified candidate for the U.S. senate, and has personally lobbied
the U.S. Senate. He has experience with regulatory agencies including
Underwriters Laboratory and the Nuclear Regulatory Agency.
DR. ROBERT M. GOOD: Director, is a founder of Mobile Area Networks,
Inc. He has been a successful private investor and entrepreneur for the past
15 years. He is a licensed stockbroker. He had a successful dental practice
in Long Island, New York, which he sold to achieve early retirement. Dr. Good
has served as an officer of numerous companies, and served as an Army Officer.
Dr. Good is responsible for investor relations and alliance building.
JAMES R. LEONE: Director, is a practicing attorney and has had his own
law firm since 1985, concentrating in the fields of securities and corporate
law. Previously, Mr. Leone was with Gray, Harris & Robinson in Orlando, FL.,
and with Quinn, Jacobs, Barry and Miller in Chicago, IL. Until 1981, Mr. Leone
was a financial attorney and financial analyst with the U.S. Securities and
Exchange Commission in Washington, DC.
EDWARD M. BELL: Director of Sales and Marketing. Prior to joining
Mobile Area Networks, Inc. Mr. Bell served 30 years with AT&T. During his
career with AT&T he held numerous leadership positions in Marketing Management,
Network Sales, Operations Planning, Access Management, Strategic Marketing, and
High Frequency Radio Relay Maintenance. His most recent assignment was as
Southern Regional Manager for AT&T's Consultant Liaison Program, where he was
responsible for AT&T's industry consultants in 14 southeastern states.
MICHAEL A. TOMASSINI: Comptroller, has over 20 years experience in
Accounting and Finance, with expertise in financial and strategic planning. He
has developed accounting systems for several businesses and has specialized in
cost efficiency management for the last seven years.
DAVID J. PACKWOOD: Business Development, with over 25 years experience
in the computer industry both in the U.S. and Europe. Mr. Packwood has been
President of two computer software companies, and Vice President, and Sales and
Marketing Director of numerous other companies. Mr. Packwood most recently
served 10 years with Digital Equipment Corporation in the Advanced Technology
Group, where he was responsible for Media and Entertainment marketing.
Throughout his career he has held senior management positions with Xerox
Corporation, Systime Computers and Thorn EMI (UK).
G. TERRY GILBREATH: Communications Network and Information Technology
Director. Mr. Gilbreath served almost 30 years with AT&T in many areas of
network design and management. After serving as a consultant to the industry,
he joined Mobile Area Networks, Inc.
The Company has radio frequency, communications network, and software
engineers on staff. All employees and consultants are under contract for
non-compete, non-circumvent, non-disclose, and trade secrets protection.
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NOTE: THIS PROSPECTUS IS PART 1 OF AND OMITS CERTAIN INFORMATION CONTAINED IN
PART 2 OF THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION. SUCH OMITTED INFORMATION INCLUDES, BUT IS NOT LIMITED TO THE
FOLLOWING: Charter and By-laws and amendments thereto, certain material
contracts, consents of experts, opinion of legal counsel re: legality. Such
information is available on request, for which there may be reasonable charges
for copying.
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RISK FACTORS
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AN INVESTMENT IN THE SHARES OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK AND
SHOULD BE REGARDED AS SPECULATIVE. AS A RESULT, THE PURCHASE OF SHARES SHOULD
BE CONSIDERED ONLY BY PERSONS WHO CAN AFFORD A LOSS OF THEIR ENTIRE INVESTMENT.
IN ADDITION TO THE OTHER INFORMATION CONTAINED IN THIS PROSPECTUS, PROSPECTIVE
PURCHASERS SHOULD CAREFULLY CONSIDER THE FOLLOWING:
A. LIMITED OPERATING HISTORY.
The Company is newly organized, and is dependent upon the proceeds of
this offering to implement its plan to deploy and operate its communications
network. Accordingly, an investment in the Company's shares is highly
speculative and is only a suitable investment for an investor who recognizes
the high risks involved, has no need for liquidity in the investment, and who
can afford a total loss of the investment. There cannot be any guarantee that
the Company will be profitable or that additional capital will not be required.
B. ILLIQUID INVESTMENT; RISK OF LOSS.
This investment is not recommended for investors who do not have
adequate additional liquid assets such that they can afford a long-term
non-liquid investment and the risk of complete loss of the investment.
C. DEPENDENCE ON MANAGEMENT.
The Company is dependent on the services of the Company's principal
Officers and Directors. In the Company's development stage, the loss of this
management could have a materially adverse impact on the Company. The Company
does not currently maintain any key-person life insurance policy, but is
investigating acquiring this type of insurance.
D. REGULATORY RISKS.
At the present time, no regulations are known to the Company which
would materially adversely affect the Company's contemplated operations.
Future government regulation with respect to applications permitted for certain
radio wave frequencies possibly could have an adverse impact on the Company.
E. CONTROL BY MANAGEMENT.
Upon completion of this offering, the officers and directors of the
Company will own, in the aggregate, between 72% and 79% of the outstanding
shares of the Company's common stock, assuming the maximum shares (5,000,000)
are sold. Accordingly, the Company's management will continue to be able to
elect a majority of the directors and thus control the management and affairs
of the Company.
F. COMPETITION.
The communications industry is a highly competitive business, and the
Company will be competing with numerous other companies, both privately and
publicly owned, which have substantially more resources and experience
available to them than the Company. This includes major telephone companies,
regional telephone companies, and existing wireless technology suppliers.
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G. ARBITRARY OFFERING PRICE.
The initial price at which the shares are offered hereby has been
arbitrarily set by the Company's management on a non-arm's length basis, and
has no relationship to the book value per share, current earnings of the
Company, (there having been none because of business development expenses), or
other generally accepted measurement of value. Investors in this Offering will
incur immediate and substantial dilution in net tangible book value of their
shares. See "Dilution".
H. LACK OF PUBLIC MARKET; NASDAQ APPLICATION WHEN ELIGIBLE.
Prior to this Offering, there has been no public market for the shares
offered, and none is anticipated to develop in the near future. In the event a
regular public trading market does not develop, or is not sustained, any
investment in the Company's Common Stock would be highly illiquid. Accordingly,
an investor in the shares may not be able to sell the shares readily, if at
all. Consequently, if as a result of some change in circumstances arising from
an event not now contemplated, an investor wishes to transfer the shares owned,
the investor may find he or she has only a limited or no ability to transfer or
market the shares. The Company intends to apply for inclusion of its shares in
the NASDAQ quotation system, assuming eligibility results from this Offering.
The Company plans to seek the support of NASD member firms which are
recognized market makers with the intention of obtaining their assistance in
the creation of a viable market in the Company's securities for the benefit of
its shareholders. In this regard, the Company may employ one or more finders
to assist with introductions to appropriate market makers, for which such
finders would be paid finders fees commensurate with current market practices.
No such finders have been identified, nor have any proposed terms of their
engagement been determined.
Under Rule 15c2-11 under the Securities Exchange Act of 1934,
broker-dealers acting as market makers are required to have certain current
information about the Company before they can make a market and thereafter as
they continue making a market in its common stock. If needed in addition to
periodic reports filed with the Securities and Exchange Commission, the Company
will furnish periodically to broker-dealers the information specified in Rule
15c2-11 in order to enhance such firms' ability to make a market in the
Company's stock. There can be no assurance that market makers will be located to
deal in the Company's securities.
I. SUBSTANTIAL DILUTION.
Purchasers of the shares offered hereby will suffer an immediate and
substantial dilution of their investment. Specifically, in the case of the
maximum offering, dilution will be up to $5.26 per share, or up to 88%, (or
more if less than all shares are sold). (See "Dilution" herein, where the
dilution is illustrated by a table).
J. POSSIBLE NEED FOR ADDITIONAL FINANCING.
The Company cannot guarantee that sufficient funding will be available
from this offering to fund all its development and operational needs. In the
event the Company requires additional financing, the Company may seek such
financing through bank borrowing, debt, or other equity financing, or
otherwise. There can be no assurance that such financing will be available to
the Company on acceptable terms, if at all. The Company does not presently
have a credit line available with any lending institution. Any additional
equity financing may involve the sale of additional shares of the Company's
Common Stock on terms that have not yet been established. These terms may (or
may not) be more favorable than those contained herein. Any future sales of
securities may (or may not) result in dilution to the investors herein.
K. PENNY STOCK REGULATION.
Broker-dealer practices in connection with transactions in "penny
stocks" (also referred to as "designated securities") are regulated by certain
penny stock rules adopted by the Securities and Exchange Commission. Penny
stocks generally are equity securities with a price of less than $5.00 (other
than securities registered on certain national securities exchanges or quoted
on the NASDAQ system). The penny stock rules require a broker-dealer, prior to
a transaction in a penny stock not otherwise exempt from the rules, to deliver
a standardized risk
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disclosure document that provides information about penny stocks and the nature
and level of risks in the penny stock market. The broker-dealer also must
provide the customer with current bid and offer quotations for the penny stock,
the compensation of the broker-dealer and its salesperson in the transaction,
and monthly account statements showing the market value of each penny stock
held in the customer's account. In addition, the broker-dealer must make a
special written determination that the penny stock is a suitable investment for
the purchaser and receive the purchaser's written agreement to the transaction.
These requirements may have the effect of reducing the level of trading
activity, if any, in the secondary market for a security that becomes subject
to the penny stock rules. If the Company's common stock becomes subject to the
penny stock rules, investors in this offering may find it more difficult to
sell their shares.
L. ADVERSE EFFECT ON MARKET PRICE OF FUTURE SALE OF SHARES.
The approximately 33,090,880 shares of Common Stock issued by the
Company prior to this Offering were sold in private transactions in reliance on
an exemption from registration under the Act. Accordingly, all of such
securities are "restricted securities" within the meaning of Rule 144 and
cannot be resold without registration, or except in reliance on Rule 144 or
another applicable exemption from registration.
In general, under Rule 144 as currently in effect, a person (or
persons whose shares are required to be aggregated), including any affiliate of
the Company, who beneficially owns "restricted shares" for a period of one to
two years is entitled to sell within any three-month period, shares equal in
number to the greater of (i)1% (380,908) of the then outstanding shares of
Common Stock after this offering if the maximum shares are sold under this
offering or (ii) the average weekly trading volume of the same class of shares
during the four calendar weeks preceding the filing of the required notice of
sale with the Securities and Exchange Commission. The seller also must comply
with the Form 144 notice and manner of sale requirements of Rule 144, and there
must be current public information available about the Company. In addition,
any person (or persons whose shares are aggregated) who is not, at the time of
the sale, nor during the preceding three months, an affiliate of the Company,
and who has beneficially owned restricted shares for at least two years, can
sell such shares under Rule 144 without regard to notice, manner of sale,
public information or the volume limitations described above.
Future sales of shares of Common Stock (or securities convertible into
Common Stock) by the Company or as stated above could adversely affect the
prevailing market price, if any, of the Company's Common Stock.
M. DIVIDENDS NOT LIKELY.
No dividends on this Company's Common Stock have been declared or paid
by the Company to date. The Company does not presently intend to pay dividends
for the foreseeable future, but intends to retain all earnings, if any, for use
in the Company's business. There can be no assurance that dividends will ever
be paid on the Common Stock. Investors who anticipate the need for dividends
from their investment in the Company should not purchase the shares offered
hereby.
N. EFFECT OF PREFERRED STOCK AS ANTI-TAKEOVER PROVISIONS.
The Company currently has no authorized preferred stock, and the only
anti-takeover provision available is the ownership position of its management
group.
O. DEPENDENCE ON PROPRIETARY TECHNOLOGY.
The Company relies on a combination of trade secrets, copyright laws,
non-disclosure, non-circumvention and other contractual and technical measures
to protect its proprietary technology. There can be no assurance that these
provisions will be adequate to protect its proprietary rights. No single or
closely related group of items of proprietary technology is material to the
Company's business. Although the Company believes that its products and
services do not infringe upon the proprietary rights of third parties; there
can be no assurance that third parties will not assert infringement claims
against the Company, or the Company's clients. See "Description of
Business-Intellectual Property."
10
<PAGE> 11
- ------------------------------------------------------------------------------
DILUTION
- ------------------------------------------------------------------------------
Private investors have provided the Company with Approximately $700,000
in cash in order to finance the Company's working capital needs to develop the
working relationships and contractual agreements that contribute to the
MOBILAN(R) communication system. As of December 30, 1997, the aggregate net
tangible book value of the Company's Common Stock was $363,384 (See "Financial
Statements"). The net tangible book value per share as of December 30, 1997 was
$01.2 Net tangible book value per share is calculated by dividing the tangible
net worth of the Company (total tangible assets less total liabilities) by the
number of shares of Common Stock outstanding.
Giving effect to the sale by the Company of 5,000,000 shares of Common
stock offered hereby (at the offering price of $6.00 per share and after
deducting offering expenses), the pro forma net tangible book value of the
Company as of December 30, 1997, would have been $27,363,384 or $.75 per share.
This represents an immediate increase in the net tangible book value of $.74 to
existing stockholders and an immediate dilution of $5.26 per share to the
persons purchasing the shares offered hereby at the initial public offering
price ("New Investors").
THE FOLLOWING TABLE ILLUSTRATES THE PER SHARE DILUTION TO THE NEW INVESTORS:
<TABLE>
<CAPTION>
@ MAXIMUM SUBSCRIPTIONS
<S> <C>
Initial offering price per share. $ 6.00
Net tangible book value before offering. $363,384
Net tangible book value per share before the offering. $ 01.2
Increase in net tangible book value per share attributable to
the cash payment by new investors. $ 0.74
Pro forma net tangible book value per share after offering. $ 0.75
Dilution per share to New Investors. $ 5.26
</TABLE>
The following tables summarize on a pro forma basis as of December 31,
1997, the number of shares of Common Stock purchased from the Company and the
total consideration paid by existing stockholders and by new investors in the
offering being made hereby (based on, in the case of new investors, an offering
price of $6.00 per share).
OUTSTANDING SHARES OF TOTAL AUTHORIZED 50,000,000
<TABLE>
<CAPTION>
At Maximum Subscriptions Shares Purchased Total Net Consideration
Number Percent Amount Percent
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Officers, & Directors: 28,005,000. 74.5% $ 49,000. .19%
Other Private Investors: 5,665,880. 13.4% $ 646,906. 2.4%
New Investors: 5,000,000. 13.1% $27,000,000. 97.4%
- -----------------------------------------------------------------------------------------------------------------
TOTAL: 38,670,880. 100% $27,695,906. 100%
</TABLE>
11
<PAGE> 12
- ------------------------------------------------------------------------------
PLAN OF DISTRIBUTION
- ------------------------------------------------------------------------------
The shares are being offered at the offering price set forth on the
Cover Page of this Prospectus. An investor must purchase a minimum of 100
shares. The shares are being sold on a best efforts basis, subject to no minimum
offering proceeds, up to a maximum of 5,000,000 shares. The offering expires
nine months after the Registration Statement becomes effective, unless
terminated sooner or extended by the Company. A current prospectus will be
available so long as the offering is continued, which shall be at the Company's
discretion.
The shares are being offered by the Company through its officers and
directors (i.e. George Wimbish, Robert Good and James Leone) who will not
receive compensation therefor.
The Company plans to seek the support of NASD member firms which are
recognized market makers with the intention of obtaining their assistance in the
creation of a viable market in the Company's securities for the benefit of its
shareholders. In this regard, the Company may employ one or more finders to
assist with introductions to appropriate market makers, for which such finders
would be paid finders fees commensurate with current market practices. No such
finders have been identified, nor have any proposed terms of their engagement
been determined.
Under Rule 15c2-11 under the Securities Exchange Act of 1934,
broker-dealers acting as market makers are required to have certain current
information about the Company before they can make a market and thereafter as
they continue making a market in its common stock. The Company will furnish
periodically to broker-dealers the information specified in Rule 15c2-11 if not
contained in reports filed with the Securities and Exchange Commission in order
to enhance such firms' ability to make a market in the Company's stock.
The price at which the shares are offered hereby has been arbitrarily
set by the Company's management, and has no relationship to the book value per
share, current earnings of the Company, or other generally accepted measurement
of value. No securities are to be offered for the account of any existing
shareholder.
The purchase price paid by investors must be wired or mailed directly
to the Company by check, or money order, payable only to: "MOBILE AREA NETWORKS,
INC." as stated in the enclosed Subscription Agreement.
The proceeds from the sale of the shares will be transmitted to the
Company bank account by noon of the business day following receipt. The shares
are offered subject to prior sale and the Company reserves the right to reject
any offer in whole or in part, or to accept subscriptions in any order, for any
or no reason. The Company will send by U.S. mail to subscribers within thirty
(30) days, signed copies of the Subscription Agreement and Common Stock
certificates.
12
<PAGE> 13
- ------------------------------------------------------------------------------
USE OF PROCEEDS
- ------------------------------------------------------------------------------
The Company will use the maximum proceeds primarily for
commercialization of its MOBILAN(R) service. This includes installing
demonstration systems for high profile accounts. The following table illustrates
the use of maximum proceeds. This summary table is a compilation of the
financial projections illustrated near the end of this Prospectus.
<TABLE>
<CAPTION>
------------------------------------------------------------------------------
Maximum Footnote
CATEGORY Subscriptions Percentage
------------------------------------------------------------------------------
<S> <C> <C> <C>
Gross Offering Proceeds $30,000,000 100.0% (1)
------------------------------------------------------------------------------
Sales commission (Offering) 3,000,000 10.0% (2)
------------------------------------------------------------------------------
Offering Expenses 300,000 1.0% (3)
------------------------------------------------------------------------------
Network Operating Costs 1,450,000 5.0% (4)
------------------------------------------------------------------------------
Data Line Recurring Charges 7,000,000 24.0% (5)
------------------------------------------------------------------------------
Network Installation Costs 8,050,000 27.0% (6)
------------------------------------------------------------------------------
Physical Build-Out In House 1,000,000 4.0% (7)
------------------------------------------------------------------------------
System Sales Commission 3,000,000 10.0% (8)
------------------------------------------------------------------------------
Management Salaries 1,560,000 6.0% (9)
------------------------------------------------------------------------------
Sales and Promotion 1,350,000 5.0% (10)
------------------------------------------------------------------------------
Engineering 750,000 3.0% (11)
------------------------------------------------------------------------------
Administration 1,540,000 5.0% (12)
------------------------------------------------------------------------------
Total $30,000,000 100.0% (13)
------------------------------------------------------------------------------
</TABLE>
Percentages rounded to nearest decimal.
FOOTNOTES
(1) Same as Prospectus Cover Page Pricing table footnote (1).
(2) Same as Prospectus Cover Page Pricing table footnote (2).
(3) Other offering expenses; totaling approximately $300,000. For filing,
accounting and legal fees, printing, travel, postage, delivery,
miscellaneous, lodging, phone, promotion, blue sky, Internet
promotional development, and edgarizing documents for SEC. See item #25
in part-II for details.
(4) Network help desk activities to support the mobile users of the
MOBILAN(R) services and network operator personnel.
(5) Monthly charges for data system infrastructure to remote sites from
network center. Assuming 300 hotels on line. These services are
available in the market as needed.
(6) One time cost of MOBILAN(R) hardware and data line installations at
hotels, primarily data relay labor costs, plus approximately $500,000.
For management of sales efforts. Installers are available on short
notice for subcontracting work.
(7) Equipment capitalization to support communications from the home
network.
(8) Commissions paid to independent sales agents for system marketing.
(9) Executive and senior management salary (three years).
(10) Advertising, sales promotions, trade shows, and related activities.
(11) System design, site surveys, and installation support, including help
desk support and new feature development. (12) Middle management and
clerical support, including finance, accounting and employee benefits..
(13) To the extent revenues may cover certain of the expenses shown,
then such amounts will be utilized to increase marketing and order
fulfillment to more locations.
If less than the maximum proceeds were to be received, the Company
would expend the proceeds in approximately the same ratio as for the maximum
proceeds. In such event, the Company could seek more funding. However, the
Company's growth, market share, and profitability could be less than projected
herein, by an amount that cannot be determined but might be substantial.
Pending the actual use of proceeds for the stated purposes, the Company
intends to invest the funds in U.S. Government issued securities, such as U.S.
Treasury Bills.
13
<PAGE> 14
------------------------------------------------------------------------------
DESCRIPTION OF BUSINESS
------------------------------------------------------------------------------
COMPANY HISTORY
The Company was incorporated in Florida on November 28, 1997 and became
the successor in interest to a Texas corporation of the same name, effective as
of January 1, 1998. The Texas corporation, formed May 22, 1996, transferred all
right, title and interests in and to its assets, over to the Company. Such
transfer was made in exchange for the Company's issuance of stock to the Texas
Company's shareholders on a five (5) for one (1) share basis. That is, each
share of the previously outstanding stock was in effect split up into five (5)
shares of the Company's stock.
GENERAL MARKET INFORMATION
FAST, LOW COST WIRELESS COMMUNICATIONS
Current marketing efforts have revolved around securing demonstration
sites at hotels affiliated with major hotel chains. Potential customers are
described in the following sections. These demonstration sites have provided
the basis for specifying both our customer profile and our cost projections.
Mobile Area Networks, Inc. will provide traveling business people
(roadwarriors) who have laptop computers, with a very fast, very low cost,
totally private, wireless data communications service to remote home-office
network services, and to the Internet. Unlike a modem attachment, no telephone
line connection is necessary for this service.
A telephone modem does allow limited communication. However, slow speed
and vulnerability to interception and interference inhibit the mobile user from
having most of the productivity benefits enjoyed by in-house computer users.
Millions of miles of fiber optic cable for digital information
transport are installed in the U.S. The fiber network transceiver switch or
junction installations called Points of Presence (POPs), are within miles of
nearly every major corporate location, hotel, and airline club. Local Exchange
Carriers (LECs) can provide a high-speed local data connection from these POPs
to almost any building in the U.S. The Company will use a high-speed, wireless
technology PC Card to reach this high-speed data connection inside buildings.
The Company's MOBILAN(R) system will have a significant economic
advantage over a modem telephone cord connection because it utilizes the
unregulated data network, not the highly regulated and tariffed long distance
public telephone system. The underlying cost per-bit on the fiber data network
is about 1/100th the cost of carrying a bit on the public voice network.
LAPTOPS EXPLODING
There were 17,000,000 (17 million) business users of laptop computers
at the end of 1995(1). Nearly 3,000,000 (3 million) of these laptop users travel
an average of three times per month to interstate destinations. BIS Strategic
Decisions estimated that these mobile professionals are spending over
$50,000,000 ($50 million) per month or $600,000,000 ($600 million) per year in
long distance charges and surcharges to check e-mail and send faxes from hotels.
The Company's MOBILAN(R) high-speed communications service will reduce this cost
substantially. Lower cost will encourage usage and new applications, giving
greater productivity from existing resources of people and equipment, which will
attract new users and expand the market rapidly because of the huge cost
reduction.
THE COMPANY HAS INTEGRATED A NUMBER OF KEY EXISTING TECHNOLOGIES TO
CREATE THIS MOBILE DATA COMMUNICATION SERVICE, AND HAS ADDED PROPRIETARY CONTENT
TO MAKE THE NETWORK FUNCTIONAL AND MORE COST EFFECTIVE.
_____________________
(1) Ablonci, Wm. F., and Elliot, Thomas R.: Mobile Professional Market
Segmentation Study, March 1995, BIS Strategic Decisions, 1-617-982-9500
14
<PAGE> 15
Today's laptops are the lifeblood of the business traveling
roadwarrior. With the PC Card expansion slots in laptop computers and the
Company's communications service called MOBILAN(R)(1) travelers can connect to
the corporate computer network from nearly anywhere, for real-time interaction,
without plugging into a telephone line.
PC CARD APPLICATION
FAST WLAN PC CARD
One PC Card is a high-speed, short-range wireless card. These cards are
known as WLAN cards. The MOBILAN(R) cards can communicate at more than 1 Mbps,
and are used inside buildings. Initial target areas are hotels, convention
centers, airports, major office buildings, resorts, and restaurants.
Wireless LANs (local area networks) consist of a transceiver that plugs
into the laptop PCMCIA card slot and transmits to an access point relay. Most
laptops can support two PC Cards at the same time. The access point transceiver
is about the size of a small hardcover book, looks much like a smoke alarm or
thermostat, and could mount on the ceiling or the wall. However; in most
installations the public does not see the transceiver as it is hidden above the
ceiling or is mounted in a utility area.
Under ideal conditions, good wireless communications from the laptops
to the access point can be established within a range of approximately 500 feet.
Two access points will cover about 785,000 square feet of space, depending upon
building construction and layout. For a hotel, two access points could cover two
or three floors, but the actual number of access points required depends upon
construction density. In an airline club, one Access Point could cover the
space, but more Access Points may be needed for problem free operation in this
multiple user environment. The Company's current installations have revealed
that the number of access points required will be substantially higher than was
previously represented to the Company by transceiver manufacturers. Retail price
of the WLAN PC Cards is about $700 (about 1/2 the cost of CDPD modems and about
2 times the cost of a high-speed telephone line modem), and the retail price of
the access point is about $1,500 which can serve up to 256 simultaneous PC Cards
users, so the per unit cost is much less than CDPD PC Cards, and the data
capacity is virtually infinite.
Some of the wide area network (WAN) communications suppliers are AT&T,
Sprint, MCI, WorldCom, and MFS Datanet. This WAN data communications market was
about $2,000,000,000 ($2-billion) in 1995.
The Company has obtained suitable PC card transceiver products from
more than one source, and is therefore, not dependent upon any single
manufacturer for its supply of hardware.
SLOW CDPD CARD
The second PC card is a wireless wide-area data networking card using
the CDPD network. CDPD is a digital extension to the existing cellular telephone
network. CDPD can communicate wirelessly at about 10 Kbps, or about the actual
speed of a wired modem, from nearly anywhere. CDPD service is deployed in over
100 metropolitan areas throughout the U.S. Therefore, anywhere in these
communities, outdoors or indoors, a laptop user can connect via MOBILAN(R) with
total security and full access to a home office network. CDPD's slow speed
(10,000 bits per second) is equivalent to telephone line modem speed, but allows
MOBILAN(R) to offer both line-free mobility plus fully encrypted privacy from
almost anywhere. This slower CDPD service is offered only as a backup for the
user who needs connectivity at any time. Over 100 cities have CDPD service
across their metropolitan areas that MOBILAN(R) can utilize. This was expected
to grow to over 200 cities by year end 1997. The current price for CDPD PC Cards
is approximately $1,000. They are intended to be used as a backup to the WLAN
card if the MOBILAN(R) user is out of range of the fast system that the Company
is developing. The CDPD PC Cards are available from computer hardware suppliers.
_________________
(1) Service Mark was registered with the Patent and Trademark office on 10/21/96
15
<PAGE> 16
INTRANET INFRASTRUCTURE
Mobile Area Networks, Inc. will use an Intranet TCP/IP WAN fiber optic
data line service for fast problem free transmission for both WLAN and WAN data.
Intranet uses the same Internet Protocol concepts as Internet but is a private
network so it does not have the slow response times and the lack of security of
the Internet. The key technical features of a "connectionless" network needed to
make Mobile Area Networks, Inc. successful require an excellent fit to an
Intranet service, which the Company is developing. The Company is currently
utilizing data lines supplied by more than one carrier, and has developed the
capability to operate with multiple carriers. Therefore, the Company is not
dependent upon a single carrier for its service.
Local high-speed lines will be utilized, and the data capacity is
virtually infinite, with the bit cost at approximately 1/100th the cost of a
telephone line and modem connection.
The short-range 802.11 wireless technology, the high-speed local loop
connections and the WAN data carriage comprise the data infrastructure of
MOBILAN(R). These costs and the encryption software costs will be amortized into
monthly user fees or possibly fairly modest up-front payment by a user's
employer for a specific home office.
The Company's connections with Local Exchange Carriers are provided for
the Company by its data line service providers. The fiber optic Intranet service
providers selected by the Company can provide service to virtually any location.
COMPANY ENCRYPTION SOFTWARE
Security will be implemented using commercially available "tunnel"
software. Tunnel software encapsulates the initial information within a coded
mathematical formula for totally secured communications. The Company is using
commercially available encryption software, and is not dependent upon a single
supplier for this product.
COMPETITION
NO DIRECT COMPETITION
Mobile Area Networks, Inc.'s. proposed (dual-speed, low cost, wireless
data communication service will be uniquely implemented. There currently exists
no announced direct competitors within the knowledge of the Company. Implied
competition exists in both the wired and wireless market. Eventually, perhaps
within a year or two, the vast cost savings of the MOBILAN(R) services will
create more customer demand and force competition to emerge, but the Company
expects to have a substantial, highly profitable market share and will
vigorously protect that market share against likely competition.
WIRED
The largest current competition is the telephone line modem connection.
The laptop PC card modem market (PC cards that fit into laptop computer PCMCIA
slots) totaled $3,000,000,000 ($3 billion) in sales in 1995(1). However, the
modem has now reached the maximum speed the public telephone network can support
(33.6 Kbps)(2). That modem speed has proved acceptable for short message
information, such as e-mail and is marginally acceptable for small record
database applications, such as Lotus Notes. The low security and lack of privacy
in phone connections has required most companies to use "firewall" systems that
block access to protect their LAN (Local Area Networks) computer systems. Thus,
remote users may get to e-mail or to Notes, but cannot break through to the
network. Modem companies are primarily manufacturing firms and consequently are
not expected to enter the high speed wireless telecommunications service
business until sometime after feasibility and market share has been established
by Mobile Area Networks, Inc.
__________________
(1) AP Research Corporation, International Data Corporation.
(2) Blankenhorn, Dana: ISDN to the Net - U.S. Robotics sets its modem strategy,
Interactive Age, August 19, 1995
16
<PAGE> 17
Communication by traveling laptop PC users with regular modems can be
made through the public telephone network, the Internet, or leased lines. The
public phone long distance network is the most widely available service, but
often has high surcharges from public places, even for credit card calls.
Internet service (at local call rates plus a monthly and/or per minute charge)
is widely available but is the least secure and has serious performance
problems. Dedicated leased lines have the highest performance standards but are
prohibitively expensive. Leased lines are most often used for remote branch
offices with multiple users sharing the cost of these lines.
ISDN (Integrated Services Data Network) communication service is
available to the public. By the end of 1995, Datapro(1) reports a total of
431,105 lines were installed. ISDN connections, like analog POTS (Plain Old
Telephone Service) links, can be either dial-up or dedicated. Pricing is highly
variable, availability is spotty, and installation and service have been poor.
Application of ISDN has been to replace leased lines for small satellite offices
and as dedicated connections for highly computer literate telecommuters
(engineers, network technicians, travel agents). ISDN is a dedicated line, or a
point-to-point connection, and it will be unlikely that ISDN to every room in a
hotel will be available before an even higher speed alternative, like Mobile
Area Networks, Inc.'s MOBILAN(R) will offer higher speeds at much lower cost.
WIRELESS
In the existing wireless network market, it is important to point out
that every potential competitive solution has a slower data rate, costs much
more, requires massive capital for infrastructure deployment, and requires the
use of an expensive, non-standard connection device. Many potential competitors
are seeking to optimize their infrastructure investment, but in doing so, they
are forcing the end user to embrace unacceptably high levels of change in user
habits and unacceptably poor network performance.
Wireless to satellite may be reaching the masses in 1998 or 1999 with
bi-directional satellite service coming of age. At $3 per minute and low
bandwidth (limited information) capacity, these services will be targeted at
emerging countries and very remote location users. They may, however, offer an
alternative to private radio networks in the U.S. when these services become
available. Satellite service will always be slow communication to a broad
audience so they will not be viable competition to Mobile Area Networks, Inc.
Ardis and RAM rely on radio frequencies to transmit packet data over
their proprietary nationwide networks. Ardis offers service in 410 Metropolitan
Service Areas; RAM offers it in 266. Like CDPD, a packet radio is best suited
for short bursts of data. RAM's network operates at 8Kbps (Kilobits per second),
with actual throughput (effective transmission rates) of 2.4 to 4.8Kbps. These
services require proprietary modems for connection. These companies have built a
proprietary infrastructure and will not be abandoning their investments to
develop competition to MOBILAN(R). CDPD and PCS are expected to effectively
compete with these companies, but are not expected to rival Mobile Area
Networks, Inc.
PCS is short for Personal Communication Services, and in its simplest
terms, is a combination of current devices: a cellular telephone, a pager, and a
small message screen with two-way communications in a small single device. The
frequency spectrum for narrow-band PCS was bid in 1995, with Sprint, AT&T and
AirTouch being the major winners. PCS is all digital, and requires about three
times the number of towers as cellular. The PCS data rate is 7.2Kbps so it is
targeted at a short messaging and voice marketplace. Broadband frequencies for
PCS (intended to compete against cable) were auctioned by the FCC (U.S. Federal
Communications Commission) in 1996(2). The system requires a
transmitter/receiver ground station, a rooftop antenna, interface electronics,
and a set-top terminal. This very slow service will not be competition to
MOBILAN(R).
Wireless communication within a building is developed under the
International Electronic Equipment Compatibility standard IEEE 802.11. Basic
rates are 1 and 2 Mbps with actual throughputs from 350 Kbps to 1.2 Mbps.
____________________
(1) DataPro is a Boston based research firm specializing on data communication
products and services.
(2) Schneideman, Ron: Wireless Broad Market Awaits FCC Action, Wireless System
Design July, 1996
17
<PAGE> 18
The following table compares the overall and per data-bit costs of
current and planned telecommunication services. The massive cost savings offered
by the Company's MOBILAN(R) system are dramatic. This offers a great opportunity
for the Company to gain market share before competition can get into the market
with comparable systems and services.
The "New Infrastructure cost" column is the infrastructure cost to
reach 5,000,000 (5 million) users as indicated in the footnoted source. For
MOBILAN(R) the cost estimate was developed by the Company.
<TABLE>
<CAPTION>
Wireless Connection New Infrastructure Data Speed(2) Application(3) Consumer cost for (1)
cost(1) megabyte file(4)
<S> <C> <C> <C> <C>
Wireless to Space (ARTWORK)
- Motorola Iridium $3.4B 6.4 Kbps Voice N/A
- Teledisic $ 40B 16 Kbps 5-10 Kbytes $ 120
Wireless to a Tower
- Ardis (ARTWORK) $700M 4.8 Kbps 2-5 Kbytes $ 125
- RAM $400M 4.8 Kbps 2-5 Kbytes $ 180
- CDPD $440M 10 Kbps 2-5 Kbytes $ 60
- PCS $ 20B 4.8 Kbps <140 bytes $ 250
Wireless to a WAN
MOBILAN(R) (ARTWORK) $ 10M 1.5Mbps LAN extension $0.25
</TABLE>
(1) Fowler, Joe: The Race to Global Information Super-Skyway, Pacific
Electric, Wire and Cable Industry Report, January 6, 1996
(2) Gilder, George: ETHERSHERE, Forbes Magazine, October 10, 1994
(3) Garciss, Robin: Special Report/Wireless Data Services, Data Communication
Magazine, March 21, 1995
(4) Mobile Area Networks, Inc.: Calculated as to competitors from published
pricing and published data rates, as described in the March 21, 1995 Data
Communication magazine article by Robin Garciss, Special Report on Wireless Data
Services. Calculated for Mobile Area Networks, Inc. based on the monthly $2,000
charge for a T-1 fiber optic line with 1.5 Mbps capacity.
18
<PAGE> 19
DATA CARRIAGE
Mobile Area Networks, Inc. has a major economic advantage because the
MOBILAN(R) system is being built on the unregulated structure of the fiber optic
data network (the private Intranet), not the regulated and tariffed public voice
long distance telephone network. The voice network has a multi-tiered regulated
market and pricing structure. The local voice call is generally a fixed cost but
varies by region, based mainly on competition. Legislation sets the rates at
each hand-off between the Local Exchange Carriers (LECs) and the Inter-Exchange
Carriers (IXE or long distance). The hand-off cost from LEC to IXE and from IXE
to LEC is about $0.05 on each call. The long distance (IXE) varies by distance,
time of day, and competition. Currently voice connection costs for long distance
calls range from $0.12 to $0.42 per minute. Surcharges are also added in public
places to share revenue on public calls.
Much of the news media coverage in 1996 was about the growing market
for Competitive Access Providers (CAPs) that connect fiber optics directly to
large buildings or institutions, and directly connect that fiber into the
wide-area network. With this connection, CAPS are able to eliminate the $0.05
charge on one end of the call and can thereby price under the LECs in their
market. MFS Datanet is the largest CAP with local connection rights in Texas and
many mid-western states. MFS Datanet now has over 5,000 buildings on their
network.
Data communications networks that are the infrastructure backbone of
the Company's MOBILAN(R) service have a structure similar to the voice network.
LECs provide a local data circuit to a wide-area network Point-of-Presence (POP)
of the fiber based data network. The local hard-wired connection is offered in
discrete sizes: 64Kbps; 128Kbps; 256Kbps; 512Kbps; 896Kbps; 1024Kbps; 1.544Mbps;
45Mbps. The 1.544Mbps service is termed T-1 or DS1 and the 45Mbps service is
termed DS3. DS is a data service classification.
Comparing the Sprint DS1 data service versus $0.20 per minute voice
service shows that the cost on a per-bit basis is about 1/250th that of data on
the voice service.
For example; if a user was spending $250 per month on data
communications over conventional voice grade telephone circuits, the DS1 data
communication cost to the Company to provide that service would be about $1.00.
The Company may price that service to the user at $2.50 for a 99% savings to the
user, and the Company would realize a gross profit of $1.50 (60% gross margin).
In addition, the Company may realize a profit on the hardware (PC card) and
software sale or lease to the user/employer, or add to the data transmission fee
to amortize such costs, plus profits, and the Company would retain ownership of
the equipment and software.
MARKETING
There are two basics concepts developed for the early marketing plan
for Mobile Area Networks, Inc. First is a concept termed "Customer Specified
Relay Locations". Second is the "Early Customers Focus" concept. Current
efforts have revolved around securing demonstrations sites at hotels affiliated
with major hotel chains. Potential customers are described in the following
sections. These demonstration sites have provided the basis for specifying both
out customer profile and our cost projections.
CUSTOMER SPECIFIED RELAY LOCATIONS
The Company will develop early customers with large mobile workforces.
These customers will define the locations of MOBILAN(R) relays for data service
they require to support their workforce and to justify deployment. For example,
the first large customer may require coverage in six major cities at one or more
of its offices and at either of two hotels and Airline clubs in those cities.
The second customer may require three additional cities and a different hotel
chain. The third customer may require two additional cities and stay at the same
hotel as customer one or two.
The cost and risk of infrastructure deployment is in small incremental
steps, about $30,000 per hotel and $20,000 per airline club. Therefore, unlike
the potential competition, who spends millions of dollars to get the first
customer, the Company can grow incrementally in small steps. This is expected to
result in a shorter period of early operating losses and a lower amount of
losses, with a lower break even point. It is important to note that the business
traveler residence is well defined.
19
<PAGE> 20
By penetrating five major hotel chains, and two airline clubs, the Company can
supply 75% of business travelers' laptop computer communications requirements.
The estimated cost to accomplish this goal is thirty million dollars
($30,000,000)
which the Company anticipates spending in one to three years after substantial
funding is realized. The projections herein are based on the more conservative
three year schedule.
EARLY CUSTOMERS FOCUS
Early customers will be computer savvy technologists looking to jump
ahead of the competition, but also will include those who appreciate new
technology for its own sake. They are "self-referencing" and believe they know
enough about technology, and do not depend on other reference points or outside
influence. If these technologists reference, they do so horizontally in their
industry segment rather than vertically in their own company. These technology
visionaries will begin with a pilot or beta test, which makes sense to them as
they venture into new ideas and products.
These visionary technologists generally are a "small pond" of
customers. The targeted early market customer profile for Mobile Area Networks,
Inc. (having these two criteria, a large mobile workforce and visionary
technologists), has focused attention on the Big Six accounting firms. Almost
100% of their workforce are mobile and they have pioneered new software
technology. For example, Price Waterhouse pioneered Lotus Notes, Deloitte &
Touche pioneered audit software, Coopers & Lybrand developed TeleSim for the
telecommunications industry, and KPMG has teamed with Integral and Hyperion for
client server software.
The Company has a unique benefit for the Big Six type accounting firms.
Besides communicating from the laptop computer through an access point to a
distant home office LAN system, MOBILAN(R) wireless technology allows
peer-to-peer interaction from laptop to laptop. Four tax auditors in a client
conference room or in different remote file rooms could network among
themselves wirelessly between laptops. This is very important to these firms
because they have travelers who want wireless communications at the multiple
offices of the client, at the hotel, and at home. MOBILAN(R) allows them to be
everywhere they want to be.
For roadwarriors who spend time at client sites for consulting work or
vendor service, or installation of equipment or services, MOBILAN(R) allows
users with the wireless cards the opportunity to establish peer-to-peer local
area networks among small groups of people on site. This is a tremendous time
and money saver in passing information and in printing. A printer can be
attached to anyone's laptop and everyone can print at different locations
instead of copying and delivering documents, especially multiple short periodic
communications.
The Big Six firms combined have over 400,000 mobile workers.
Penetrating these six firms could produce substantial annual revenue for Mobile
Area Networks, Inc. while allowing those firms to realize substantial savings.
Through the audit, tax accounting, and consulting services of these Big
Six firms, their clients will also become knowledgeable of the MOBILAN(R)
service. It is believed that through the Big Six firms many additional
customers for MOBILAN(R) will be recruited.
To provide locations for users to have traveling telecommunications
access, the Company has focused its efforts on the hotel industry. The Company
is developing models that will generate revenue for the hotel instead of costing
the hotel to provide the availability of high speed Internet. Each hotel
property with the Company's system installed can immediately begin charging per
use access for this service. The Company has a demonstration system in place as
referred to under "Business Relationships".
BUSINESS RELATIONSHIPS
The Company has agreements to provide service into one or more hotel properties
of more than one major hotel chain.
20
<PAGE> 21
The predecessor Company signed an exclusive contract for its major
markets with the Raytheon Company to provide the PC Card and transceiver
hardware to Mobile Area Networks, Inc. However, the Company has acquired access
to other hardware from manufacturers who may better serve the Company's
requirements. Therefore, the Company is not dependent upon any single
manufacturer for its supply of hardware.
The Company has data lines installed by more than one carrier on a
non-exclusive basis. The success of the Company is not dependent upon any single
provider of data lines, hardware, or software, but the Company does intend to
develop long term relationships with suppliers when in the best interest of the
Company.
INTELLECTUAL PROPERTY
Mobile Area Networks, Inc. has integrated existing technologies of
wireless communication, wide-area data networks, and security and other software
products to develop a communications infrastructure. The Company owns all
intellectual property created for hire, and all business and technical solutions
developed are being treated as proprietary trade secrets.
REGULATORY AFFAIRS
After careful review and research into the regulatory issues involved,
the Company believes that its service offering will not be subjected to
regulatory review and FCC oversight.
There are two regulatory areas that relate to the MOBILAN(R) operation:
- Use of the radio wave spectrum (broadcast frequencies)
- Provision of telecommunications service
The FCC has proactively continued to affirm that the 2.4GHz spectrum
will not be regulated nor will the spectrum be auctioned. There are already over
330,000 wireless LANs installed using the frequency (as well as millions of
microwaves ovens), so the industry (and the public) would very much oppose any
change in the regulation of this frequency.
Calls that start and end locally are regulated by the state public
utility commissions; calls that cross state lines are regulated by the Federal
Communications Commission by virtue of the Interstate Commerce Clause of the
Constitution. CompuServe is in a similar position as Mobile Area Networks, Inc.
in providing telecommunications services, and has not been subjected to
regulation. However, it does not provide communication services on a large scale
as a primary business, as the Company intends to do. The exploding Internet
growth is in a similar area of communications activities and is being promoted
by the Federal Government without regulation. The Company can therefore cite
strong precedence against regulation.
PRICING
Pricing of the Mobile Area Networks, Inc. service is expected to be a
dynamic issue. The initial rate will be approximately $50 to $60 per month per
user for the monthly subscriber, which compares very favorably with the much
slower speed service (telephone line modems) presently widely used in the
market.
Fixed rate billing was selected for two reasons. First, Internet
Service Providers (ISPs) did not experience explosive growth under variable rate
billing (i.e. $ per hour of use). Only after fixed rate pricing was introduced,
did the Internet service explode. Secondly, Intranet cannot provide detailed
billing information. Intranet pricing is simply based on the speed of the
connection port selected so no time or data volume billing information is
available per user. Because the Intranet is so dramatically less costly than
regular telephone service, there presently is no significant incentive to
"meter" or bill by the minute for the service, and especially because the PC
WLAN Card allows the very fast transmission rate of over 1Mbps.
21
<PAGE> 22
If customer demand warrants, the Company can develop a billing system
so a customer can re-bill to its own clients, or account for internal users for
cost control. For a casual user in a hotel who is not a subscriber, daily or
hourly charges can be added to the users room charge or can be charged to the
user's credit card by the Company.
EMPLOYEES
The Company has eight full time and two part time staff members, and
has available an additional six commission only sales persons. Those now working
include a full time CEO, two part time officers, and seven full time staff
members holding the positions of comptroller, marketing director, sales manager,
sales person, and three computer and software technical support personnel. The
Company also has available certain private share holders who provide technical
and business expertise on a volunteer basis. All Employees and consultants to
the Company are under non-compete, non-circumvent, and non-disclose of trade
secrets Agreements.
DESCRIPTION OF PROPERTY
The Company is conducting its operations through leased offices and
technical facilities located at 1275 Lake Heathrow Lane (Suite 115) Heathrow,
Florida 32746. The Company's requirements for physical facilities are minimal
until substantial network connections are in place. The Company negotiated a
facilities lease with favorable terms which allowed the Company ability to
build-out as the facilities as the Company desired.
The Company is currently installing a major fiber optic
telecommunications system into the building which should meet the needs of the
Company for massive amounts of data lines into the forseeable future. The system
being installed is a "Self Healing Sonet Ring" which means the system will have
back-ups built in which would reroute data traffic if a portion of the system
should fail or become damaged.
MANAGEMENT
BACKGROUND OF MANAGEMENT
(A) DIRECTORS:
At the present time, the Company's Board of Directors consists of three
members:
GEORGE E. WIMBISH, age 54, is a founder and has been a Director of the
predecessor (Texas) Company since November 3, 1996, and Chairman, President and
CEO since March 28, 1997. He was a successful private investor with over 20
years of experience in acquisitions/mergers and company startups. He has a
diversified background in wholesaling, manufacturing, and direct marketing. His
most recent prior position was CEO of a financial services company. In 1984 he
was a qualified candidate for the U.S. Senate, and has personally lobbied the
U.S. Senate. He has experience with regulatory agencies including Underwriters
Laboratory and the Nuclear Regulatory Agency. He resides in Heathrow, Florida.
DR. ROBERT M. GOOD, age 60, is a founder and has been a Director of the
predecessor (Texas) Company since November 3, 1996. He has been a successful
private investor and entrepreneur for the past 15 years. He is a licensed
stockbroker. He operated a successful dental practice in Long Island, New York
and sold the practice to achieve early retirement. Dr. Good has served as an
officer of numerous companies. He was an Army Officer. Dr. Good resides in
Heathrow, Florida.
JAMES R. LEONE, age 54, is a practicing attorney and has had his own
law firm since 1985, concentrating in the fields of securities and corporate
law. Previously, Mr. Leone was briefly with Gray, Harris & Robinson in Orlando,
FL (1984-1985) and with Quinn, Jacobs, Barry and Miller in Chicago, IL. Until
1981 Mr. Leone was a financial attorney and financial analyst with the U.S.
Securities and Exchange Commission in Washington, D.C. Mr. Leone resides in
Oviedo, Florida.
22
<PAGE> 23
(B) PERSONS NOMINATED OR CHOSEN TO BECOME DIRECTORS:
At the present time, no other person, other than those listed above,
has been chosen or nominated to become a Director of the Company.
(C) EXECUTIVE OFFICERS AND PERSONS CHOSEN TO BECOME EXECUTIVE OFFICERS:
At present, the Company's Executive Officers consist of its Directors,
mentioned above, Mr. George E. Wimbish as Chairman, President, and CEO, Dr.
Robert M. Good as Vice President and Treasurer, and James R. Leone as Secretary.
It is anticipated that additional officers will be added.
(D) CERTAIN LEGAL PROCEEDINGS:
The Company is not aware of any legal proceedings within the last five
years against any Director, Officer, Significant Employee, or candidate for any
such position involving a petition under the Bankruptcy Act or any State
insolvency law or of any receiver, fiscal agent or similar officer appointed by
a court for the business or property of such person or any partnership in which
he was general partner or within two (2) years before the time of such filing,
or any corporation or business association of which he was an executive officer
at or within two (2) years before the time of such filing; nor is the Company
aware of any of the above-mentioned persons being convicted in a criminal
proceeding; except as follows:
On August 14, 1995 James R. Leone & Assoc., P.A., a Florida
professional corporation, filed a reorganization petition in the Bankruptcy
Court in Orlando, Florida. Its Plan of Reorganization was scheduled for a
confirmation hearing on January 14, 1997 but a notice of conversion to
liquidation was filed on that date and it is currently awaiting confirmation. A
Director and the corporate Secretary of the Company, James R. Leone, was the
sole shareholder, officer and director of that corporation. On March 10, Mr.
Leone filed a personal reorganization petition on the advice of counsel because
of liabilities caused by the corporate liquidation.
REMUNERATION OF MANAGEMENT
The Company's current policy is that Directors serve without
compensation. However; in the future, it may be in the Company's best interests
to compensate Directors in a manner that will attract the most qualified people
to serve on the Company's Board. Through December 31, 1997 the officers of the
Company have served without compensation other than the allowance to acquire
founders stock at a discounted price. The Company's management will determine
when it is in the best interest of the Company to compensate officers.
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN SECURITY HOLDERS
The following table sets forth certain information regarding beneficial
ownership of the Company's Common Stock as of December 31, 1997 with respect to
each director and officer and any person who is known to the Company to be the
beneficial owner of five percent (5%) or more of the Company's outstanding
Common Stock. Also set forth in the table is the beneficial ownership of all
shares held by all directors and officers, individually and as a group.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
(1) (2) (3) (4)
NAME AND ADDRESS SHARES OWNED PERCENT PERCENT AFTER
OF OWNER BEFORE OFFERING MAXIMUM OFFERING.
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
George E. Wimbish 25,500,000(a) 77.% 66.9%
Director, Chairman, President, & CEO
1275 Lake Heathrow Lane (Suite 115)
Heathrow, Fl 32746
Dr. Robert M. Good 2,500,000(a) 7.5% 6.5%
Director, Vice-President, Treasurer
1275 Lake Heathrow Lane (Suite 115)
Heathrow, Fl 32746
</TABLE>
23
<PAGE> 24
<TABLE>
<S> <C> <C> <C>
James R. Leone 5,000 .02% .02%
Director, Secretary
1275 Lake Heathrow Lane (Suite 115)
Heathrow, FL 32746
- -------------------------------------------------------------------------------------------------
Subtotal 28,005,000 84.5% 73.4%
Other Private Shareholders 5,085,880(b) 15.5%(c) 13.4%(c)
New Shareholders 5,000,000 ----- 13.2%
From Offering
- -------------------------------------------------------------------------------------------------
TOTAL 38,090,880 100.0% 100.0%
</TABLE>
(a) Within the knowledge of the issuer, no other person holds or
shares the power to vote or direct the voting of securities
described pursuant to subsection (a) above. No other person
holds shares or the power to vote 5% or more of the issuer's
voting securities.
(b) The Company may utilize private stock shares as incentive or
compensation for the product and service marketing efforts of
the Company's employees, when appropriate.
(c) Some of the restricted shares included in this total have been
conditionally assigned to certain employees or consultants
with performance and or tenure requirements. The possibility
that all of these private shares may or may not be rescinded
would not dramatically affect this percentage.
INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS
All transactions during the previous two years and any presently
proposed transaction to which the issuer is a party in which any person having a
relationship with the issuer has a direct or indirect material interest are the
following transactions, and no others:
On October 2, 1997 the Company signed a Compromise Settlement and
Release Agreement with William J. Reid. Reid was formerly the predecessor
Company's CEO, a Director and 45% shareholder. He agreed that he no longer held
those positions (his stock being surrendered) and he dismissed a lawsuit against
the Company and returned certain assets to it in exchange for payment of $8,345
claimed by him as back salary, and release of him from a noncompetition clause
he had signed. His lawsuit, Reid vs Mobile Area, case No. 97-03622 was filed in
the 162nd Judicial District Court in Dallas County, Texas. He claimed that the
Company owed him monies and that the noncompete covenant was not valid, while
the Company counterclaimed for return of the assets, cancellation of the stock,
and damages for wrongful acts.
SECURITIES DESCRIPTION
The Company is offering only Common Stock in this Offering.
COMMON STOCK
The Company is authorized to issue up to Fifty Million (50,000,000)
shares of Common Stock with no par value. Approximately 33,090,880 shares have
been issued to 62 persons as of the date of this Prospectus. Each holder of
Common Stock is entitled to one vote for each share held of record on each
matter to be voted on by stockholders, except as otherwise may be provided by
law.
Subject to any preferences which may be granted to the holders of
Preferred Stock (if ever authorized by the shareholders) which the Company could
choose to issue in the future, each holder of Common Stock is entitled to
receive ratably such dividends as may be declared by the Board of Directors from
funds legally available. Upon liquidation or dissolution of the Company, the
holders of Common Stock are entitled to share ratability
24
<PAGE> 25
in all the assets after payment of all creditors, subject to the rights of any
Preferred Stock then outstanding. The Common Stock does not have cumulative
voting rights or preemptive purchase rights.
The shares hereby offered, when paid for, will be fully paid and
non-assessable.
PREFERRED STOCK
The Company is not currently authorized to issue Preferred Stock. The
Company currently has no plans to issue shares of Preferred Stock.
TRANSFER AGENT AND REGISTRAR
The Company currently acts as its own Transfer Agent and Registrar
for its Common Stock
LEGAL MATTERS
JAMES R. LEONE has provided a legal opinion as to certain matters
relating to the issuance of the shares pursuant to applicable securities laws.
This Prospectus has been prepared by the Company's management and its advisers
and has been reviewed by JAMES R. LEONE, who also is a Director and the
corporate Secretary of the Company. Neither he nor the Company's management
believes there is a significant conflict of interest in regard to his integrity
and lack of bias in issuing the opinion letter referred to above because he is a
Director and the corporate Secretary.
EXPERTS
The Financial Statements included in this Prospectus and Registration
Statement, to the extent and for the period indicated in the accompanying
auditors report thereon, have been examined by Parks, Tschopp & Whitcomb, P.A.,
certified public accountants, and are included herein in reliance on their
authority as experts in accounting and auditing.
25
<PAGE> 26
INDEX TO FINANCIAL STATEMENTS OF
MOBILE AREA NETWORKS, INC.
(A Development Stage Company)
<TABLE>
<S> <C>
Independent Auditors' Report F-2
Financial Statements:
Balance Sheet F-3
Statement of Operations F-4
Statement of Stockholders' Equity F-5
Statement of Cash Flows F-6
Notes to Financial Statements F-7
</TABLE>
F-1
26
<PAGE> 27
PARKS, TSCHOPP & WHITCOMB, P.A.
CERTIFIED PUBLIC ACCOUNTANTS
2600 MAITLAND CENTER PARKWAY, SUITE 330
MAITLAND, FLORIDA 32751
407-875-2760
INDEPENDENT AUDITORS' REPORT
The Board of Directors
Mobile Area Networks, Inc.:
We have audited the accompanying balance sheet of Mobile Area Networks, Inc. (a
development stage company) as of December 31, 1997, and the related statements
of operations, stockholders' equity, and cash flows for the year then ended and
for the period from May 23, 1996 (date of inception) through December 31, 1996
and the cumulative period from May 23, 1996 (date of inception) through December
31, 1997. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Mobile Area Networks, Inc. (a
development stage company) as of December 31, 1997, and the results of its
operations and its cash flows for the year then ended and for the period from
May 23, 1996 (date of inception) through December 31, 1996 and the cumulative
period from May 23, 1996 (date of inception) through December 31, 1997, in
conformity with generally accepted accounting principles.
/S/J/ Parks, Tschopp & Whitcomb, P.A.
January 30, 1998
F-2
27
<PAGE> 28
MOBILE AREA NETWORKS, INC.
(A Development Stage Company)
BALANCE SHEET
December 31, 1997
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Current assets:
Cash $ 279,482
Inventory 35,792
Other Current Assets 6,504
Total current assets 321,778
Office Furniture and equipment, net 59,756
Intangible assets, net of accumulated amortization of $3,052 12,206
$ 393,740
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 30,356
Accrued Expenses 30,000
Total current liabilities 60,356
Stockholders' Equity:
Common stock, no par value, authorized 50,000,000 shares,
issued and outstanding 31,245,530 710,804
Deficit accumulated during the development stage (377,420)
Total stockholders' equity 333,384
$ 393,740
</TABLE>
F-3
<PAGE> 29
MOBILE AREA NETWORKS, INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS
For the year ended December 31, 1997 and for the
period from May 23, 1996 (date of inception) through December 31, 1996
and the cumulative period from May 23, 1996 through December 31, 1997
<TABLE>
<CAPTION>
For the Period For the Period
For the Year From May 23, from May 23,
Ended 1996 through 1996 through
December 31, December 31, December 31,
1997 1996 1997
---- ---- ----
<S> <C> <C> <C>
Revenues $ -- $ -- $ --
------------- -------------- -------------
Costs and expenses:
Product development and marketing 38,071 1,546 39,617
General and administrative 346,678 5,029 351,707
------------- -------------- -------------
Total costs and expenses 384,749 6,575 391,324
------------- -------------- -------------
Interest income 13,904 -- 13,904
------------- -------------- -------------
Net loss $ (370,845) $ (6,575) $ (377,420)
============= ============== =============
</TABLE>
See accompanying notes to financial statements.
F-4
<PAGE> 30
MOBILE AREA NETWORKS, INC.
(A Development Stage Company)
Statement of Stockholders' Equity
For the year ended December 31, 1997 and for the
period from May 23, 1996 (date of inception) through December 31, 1997
<TABLE>
<CAPTION>
Stock Total
Subscription Accumulated Stockholders'
Common Stock Receivable Deficit Equity
Shares Amount
<S> <C> <C> <C> <C> <C>
Common stock issued in exchange for services 5,000 $ 1,000 -- -- 1,000
Common stock issued for cash 26,138,500 178,000 (2,300) -- 175,700
Net loss -- -- -- (6,575) (6,575)
Stock issuance cost -- (5,091) -- -- (5,091)
Balances at December 31, 1996 26,143,500 $ 173,909 (2,300) (6,575) 165,034
Net loss -- -- -- (370,845) (370,845)
Common stock issue for cash 5,102,030 544,156 2,300 -- 546,456
Stock issuance cost -- (7,261) -- -- (7,261)
Balances at December 31, 1997 31,245,530 $ 710,804 $ -- $(377,420) $ 393,384
</TABLE>
See accompanying notes to financial statements.
F-5
<PAGE> 31
MOBILE AREA NETWORKS, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
For the year ended December 31, 1997 and for the
period from May 23, 1996 (date of inception) through December 31, 1996
and the cumulative period from May 23, 1996 through December 31, 1997
<TABLE>
<CAPTION>
For the Period For the Period
Year May 23, May 23,
Ended 1996 through 1996 through
December 31, December 31, December 31,
1997 1996 1997
------------ -------------- --------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss $ (370,845) $ (6,575) $ (347,420)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 9,691 -- 9,691
Change in operating assets and liabilities:
Accounts payable 12,859 -- 30,356
Accrued expenses 30,000 17,467 30,000
Inventory (35,792) -- (35,792)
Other current assets (6,504) -- (6,504)
------------- -------------- -------------
Net cash used in operating activities (360,591) 10,892 (349,669)
------------- -------------- -------------
Cash flows from investing activities:
Patent acquisition costs -- (15,258) (15,258)
Purchase of furniture and equipment (66,395) -- (66,395)
------------- -------------- -------------
Net cash used in investing activities
(66,395) (15,258) (81,653)
------------- -------------- -------------
Cash flows from financial activities:
Proceeds from issuance of common stock 546,624 176,532 723,156
Stock issuance cost (7,459) (4,893) (12,352)
------------- -------------- -------------
Net cash provided by financing activities 539,165 171,639 710,804
------------- -------------- -------------
Net increase in cash 112,209 167,273 279,482
Cash at beginning of period 167,273 -- --
------------- -------------- -------------
Cash at end of period $ 279,482 $ 167,273 $ 279,482
============= ============== =============
</TABLE>
See accompanying notes to financial statements.
F-6
<PAGE> 32
MOBILE AREA NETWORKS, INC.
(A Development Stage Company)
Notes to Financial Statements
Period from May 23, 1996 (date of inception) to December 31, 1997
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) NATURE OF DEVELOPMENT STAGE OPERATIONS
Mobile Area Networks (the Company) was incorporated on May 23, 1996 in
Texas and later transferred its assets to a Florida Corporation which
was formed for that purpose. The Company will be providing wireless
data communications connectivity service for remote home-office
network services and to the Internet from frequently traveled routes
and places such as hotels, convention centers, and airports. Unlike a
modem connection, no cord or telephone line connection is necessary
for this service.
Operations of the Company through the date of these financial
statements have been devoted primarily to product development and
marketing, raising capital, and administrative activities. The
Company's fiscal year end is December 31.
(b) CASH AND CASH EQUIVALENTS
Cash equivalents consist of liquid debt instruments purchased with
original maturities of three months or less.
(c) INVENTORY
Inventory is valued at the lower of cost or market. Cost is determined
on a first-in, first-out (FIFO) method.
(d) FURNITURE AND EQUIPMENT
Furniture and equipment are stated at cost. Depreciation is computed
at the straight line method of the estimated useful lives of the
assets of five years.
(e) INTANGIBLE ASSETS
Intangible assets consist of patents which will be amortized over
their estimated useful life, of five years, using the straight-line
method.
(f) INCOME TAXES
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to temporary differences between the
financial statement carrying amounts of existing assets and
liabilities and their respective tax bases and operating loss and tax
credit carryforwards. Deferred tax assets and liabilities are measured
using enacted tax rates expected to apply to taxable income in the
years in which those temporary differences are expected to be
recovered or settled. Changes in tax rates are recognized in the
period that includes the enactment date.
Development stage operations for the period ended December 31,1997
resulted in a net operating loss. It is uncertain whether any tax
benefit of net operating loss will be realized in future periods.
Accordingly, no income tax provision has been recognized in the
accompanying financial statements.
(g) USE OF ESTIMATES
Management of the Company has made certain estimates and assumptions
relating to the reporting of assets and liabilities and the disclosure
of contingent assets and liabilities to prepare these financial
statements in conformity with generally accepted accounting
principles. Actual results could differ from those estimates.
<PAGE> 33
(2) OFFICE FURNITURE AND EQUIPMENT
Office furniture and equipment consist of the following at December 31,
1997:
<TABLE>
<S> <C>
Office furniture $15,468
Computer equipment 17,670
Leasehold improvements 33,257
66,395
Less accumulated depreciation 6,639
</TABLE>
$59,756
F-7
<PAGE> 34
PROJECTIONS
The following financial projections are forward-looking statements and
are subject to Section 13(a) and Section 15(d) of the Securities Exchange Act of
1934. These projections have been prepared by the Company's management without
regard to published guidelines of the AICPA and are not included in the audited
financial statements of the Company.
Mobile Area Networks, Inc. is a communications service provider for
traveling professionals and as such has some of the characteristics of
traditional communication service providers like AT&T, MCI and Sprint in that
certain investments in infrastructure development have to be made before the
service has enough coverage to be of value to users of the service. Mobile Area
Networks, Inc. utilizes the existing infrastructure of fiber optic networks and
copper wire networks, but has to establish the last approximate 500 feet of
connectivity. Mobile Area Networks, Inc. believes that this 500 feet of
infrastructure development can be matched to the specific requirements of large
customers as described in "Description of Business". See "MARKETING".
Some factors in this infrastructure development are the most significant
factors in the financial needs and results of the Company; as follows:
1. The initial installation of hardware and software will constitute
the 500 feet of infrastructure to sell the large customers. The financial
forecast shown has the assumption that four hotel chains would be
installing systems. This assumption has not been tested.
2. The Company believes that the 500 feet of infrastructure deployment
can be matched to the requirements of the increasing customer base. For
example; the assumption is made that Mobile Area Networks, Inc. can justify
its value to 1,500 users with 28 sites installed and can justify its value
to 10,000 users with 265 sites installed. This assumption has not been
tested.
If these assumptions are accurate, modest infrastructure development (less
than $30 million) is required over a three (3) year period. If a much larger
infrastructure development is required, additional capital may be needed. Some
infrastructure development could be handled by debt financing or by customers
pre-payments against expected massive cost savings (i.e., repayment in months,
not years) but this is not assumed in these forwarding-looking projections.
The Company also believes that hotel owners will be more willing to
participate in financing installations after travelers request the MOBILAN(R)
service.
The projected financial results are in line with customer development. It
may be desirable to develop infrastructure earlier to attract more customers.
Earlier infrastructure development will require substantially more capital than
illustrated in these projections.
F-8
<PAGE> 35
SUMMARY OF FINANCIAL PROJECTIONS
The following table summarizes a set of forward-looking market and
financial projections based on the assumptions discussed in this section.
1. Business Class hotel with 300 rooms, 20% of guests use service 20 days
per month @ $5 per user revenue to the Company.
60 USERS X 20 DAYS X $5. = $6,000
2. Each hotel has 4 meeting rooms with 3 group meetings per week with 20 of
the attendees per meeting requesting high-speed Internet access. Meeting room
charge for service at $30 per day is higher than for a sleeping room
60 USERS X 4 ROOMS X $30= $7,200.
3. Some hotel owners may choose to pay a negotiated monthly amount to
Mobile Area Networks Inc. for unlimited service that they can offer as they
choose.
4. These projections do not assume service that will be offered for larger
convention users.
5. No significant user churn in the three year period.
6. Network monthly costs: $3,000.00 for a high speed data line and
maintenance The Company expects this cost to decline over a three year term
based on discussions with data carriers.
7. Network Installation labor and material is estimated to be $5,000.00 per
site. This covers the data line and routing hardware, but does not cover the
wireless equipment.
8. Wireless transceiver hardware installation per site is a minimum of
$10,000.00 per site, and runs much higher in a large hotel. To date
9. the Company anticipates spending approximately $30,000.00 per business
class hotel installation.
F-9
<PAGE> 36
<TABLE>
<CAPTION>
F Y 98 1st. Q 98 2nd. Q 98 3rd. Q 98 4th. Q 98.
<S> <C> <C> <C> <C>
Total hotels on line 8 16 48 100
*Assuming proceeds from this
Offering
- ----------------------------------------------------------------------------------------------
Revenue per hotel 13,200 13,200 13,200 13,200
- ----------------------------------------------------------------------------------------------
Monthly gross Revenue 105,600 211,200 633,600 1,320,000
- ----------------------------------------------------------------------------------------------
Installation cost, amortized
Over 36 months 8,000 16,000 48,000 100,000
- ----------------------------------------------------------------------------------------------
Data network cost per
Month per site x 3,000 24,000 48,000 144,000 300,000
- ----------------------------------------------------------------------------------------------
Monthly service cost and
Overhead per site. x 3,000 24,000 48,000 144,000 300,000
- ----------------------------------------------------------------------------------------------
Gross profit per site 6,200 6,200 6,200 6,200
- ----------------------------------------------------------------------------------------------
Gross profit (Per Month),
Less general & administrative 49,600 99,200 297,600 620,000
- ----------------------------------------------------------------------------------------------
</TABLE>
F-10
<PAGE> 37
SUBSCRIPTION AGREEMENT
INVESTOR SUBSCRIPTION AGREEMENT FOR MOBILE AREA NETWORKS, INC.
Persons interested in purchasing shares of the Common Stock of Mobile Area
Networks, Inc. must return this completed Subscription Agreement along with
their wire transfer, check or money order for their total payment, payable only
to: MOBILE AREA NETWORKS, INC., 1275 LAKE HEATHROW LANE, (SUITE 115) HEATHROW,
FLORIDA 32746.(HTTP://WWW.MOBILEAREA.NET).
If and when accepted by Mobile Area Networks, Inc., (the "Company"), this
Subscription Agreement shall constitute a subscription for shares of Common
Stock, no par value per share, of the Company. The minimum investment is $600.
(100 shares). An accepted copy of this Agreement will be returned to you as your
receipt, and a stock certificate will be issued to you shortly thereafter.
Method of Payment: (CIRCLE ONE) Check, Money Order or Wire (fax or e-mail for
instructions) payable only to: "MOBILE AREA NETWORKS, INC.".
- -------------------------------------------------------------------------------
I hereby irrevocably tender this Subscription Agreement for the purchase of
_________ shares at six dollars ($6.00) per share. With this subscription
Agreement, I tender payment in the amount of $__________ ($6.00 per share) for
the shares subscribed.
In connection with this investment in the Company, I represent and warrant as
follows:
(a) Prior to tendering payment for the shares, I received the Company's
final Prospectus dated ( ).
(b) I am a bona fide resident of the state of ________________________.
Please issue the shares which I am purchasing as follows:
1. INDIVIDUAL(S) -- if more than one owner, please issue as follows:
- -- Tenants-in-Common (all parties must sign -- each investor has an undivided
interest)
- -- Joint Tenants with Right of Survivorship (all parties must sign joint
ownership)
- -- Minor with adult custodian under the Uniform Gift to Minors Act in
your state (the minor will have sole beneficial ownership)
- -------------------------------------------------------------------------------
- ---------------------------------------- ----------------------------------
INVESTOR NO. 1 (PRINT NAME ABOVE) INVESTOR NO. 2 (PRINT NAME ABOVE)
Street (residence address) Street (residence address)
- ---------------------------------------- ----------------------------------
- ---------------------------------------- ----------------------------------
City State Zip City State Zip
- ---------------------------------------- ----------------------------------
Home Tele. Business Tele. Home Tele. Business Tele.
- ---------------------------------------- ----------------------------------
FAX e-mail FAX e-mail
- ---------------------------------------- ----------------------------------
Social Security Number Social Security Number
- ---------------------------------------- ----------------------------------
Signature Date Signature Date
ACCEPTED BY: MOBILE AREA NETWORKS, INC.
- ----------------------------------------
Name, Title Date.
A-1
<PAGE> 38
SUBSCRIPTION FORM FOR OTHER THAN INDIVIDUAL
Purchasers of shares of the Common Stock of Mobile Area Networks, Inc. for other
than individuals must complete this form for the proper entity that will hold
title to the shares. Send this completed Subscription Agreement along with the
proper wire transfer, check or money order for the total payment, payable only
to: MOBILE AREA NETWORKS, INC., 1275 LAKE HEATHROW LANE, (SUITE 115) HEATHROW,
FLORIDA 32746 (http://www.mobilearea.net).
If and when accepted by Mobile Area Networks, Inc., (the "Company"), this
Subscription Agreement shall constitute a subscription for shares of Common
Stock, no par value per share, of the Company. The minimum investment is six
hundred dollars (S600.) (100 shares). An accepted copy of this Agreement will be
returned to you as your receipt, and a stock certificate will be issued to you
shortly thereafter.
Method of payment: (CIRCLE ONE) Check, Money Order or Wire (fax or e-mail for
instructions) payable only to: "Mobile Area Networks, Inc".
Entity:
[ ] Corporation (authorized agent of corporation must sign)
[ ] Existing Partnership (at least one partner must sign)
[ ] Trust (all trustees must sign)
- ----------------------------------------------------------
Name of Entity
- ----------------------------------------------------------
Authorized Agent (print name above)
- ----------------------------------------------------------
Title of Authorized Agent
- ----------------------------------------------------------
Social Security or Federal Identification Number of Entity
- ----------------------------------------------------------
Street (business address) or address of Registered Agent
- ----------------------------------------------------------
City State Zip
- ----------------------------------------------------------
Business Tele. or Home Tele. of Registered Agent of Entity
- ----------------------------------------------------------
FAX e-mail
The undersigned acknowledges under the penalties of perjury
that the foregoing information is true, accurate, and complete.
- ----------------------------------------------------------
Signature Date
- ----------------------------------------------------------
For a Trust, all Trustees must sign. Add a line for each to
the Right of form.
ACCEPTED BY: MOBILE AREA NETWORKS, INC.
- ------------------------------------------------
Name, Title Date.
A-2
<PAGE> 39
No dealer, salesperson or other person has been authorized to give any
information or to make any representation not contained in this Prospectus, and,
if given or made, such information or representation must not be relied upon as
having been authorized by the Company. This Prospectus does not constitute an
offer to sell or a solicitation of an offer to buy any of the securities offered
hereby in any jurisdiction or to any person to whom it is unlawful to make such
offer or solicitation in such jurisdiction. Neither the delivery of this
Prospectus nor any sale made hereunder shall, under any circumstances, create
any implication that the information herein is correct as of any time subsequent
to the date hereof or that there has been no change in the affairs of the
Company since such date.
SUMMARY OF CONTENTS
<TABLE>
<S> <C>
SUMMARY ............................ 2
RISK FACTORS ....................... 6
DILUTION ........................... 9
LAN OF DISTRIBUTION ................ 10
USE OF PROCEED ..................... 11
DESCRIPTION OF BUSINESS ............ 14
DESCRIPTION OF PROPERTY ............ 22
MANAGEMENT ......................... 22
REMUNERATION OF MANAGEMENT ......... 23
SECURITY OWNERSHIP OF MANAGEMENT AND
CERTAIN SECURITY HOLDERS ........... 23
INTEREST OF MANAGEMENT AND OTHERS IN
CERTAIN TRANSACTIONS ............... 24
SECURITY DESCRIPTION ............... 24
LEGAL MATTERS ...................... 25
FINANCIAL STATEMENTS ............... 26 (F-1)
PROJECTIONS ........................ 34 (F-8)
SUBSCRIPTION AGREEMENT ............. 36 (A-1)
</TABLE>
Date of Issuance:
__________, 1998
Mobile Area Networks, Inc.
"Boundary Free Wireless LAN Connectivity"
5,000,000 (MAXIMUM)
SHARES OF COMMON STOCK
PROSPECTUS
MOBILE AREA NETWORKS, INC.
1275 LAKE HEATHROW LANE (SUITE 115)
HEATHROW, FL 32746
1-407-333-2350
FAX 1-407-333-9903
[email protected]
--------------------------------------
39
<PAGE> 40
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 24. Indemnification of Directors and Officers
The Company's Articles of Incorporation and Bylaws contain provisions
indemnifying its directors and officers to the extent permitted by the Act.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 (the "1933 Act"), as amended, may be permitted to directors, officers and
controlling persons of the Company pursuant to the foregoing provisions or
otherwise, the Company has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the 1933 Act and, therefore, is unenforceable. In the event that a
claim for indemnification against such liability (other than the payment by the
Company of the expenses incurred or paid by a director, officer or controlling
person of the Company in the successful defense of any such action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Company, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
will submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the 1993 Act and
will be governed by the final adjudication of such issue.
Item 25. Other Expenses of Issuance and Distribution
<TABLE>
<S> <C>
Filing Fee - SEC $ 9,000.00
Listing Fee -- Stock Exchange, If Qualified $ 5,000.00
Transfer Agent & Registrar's Fees $ 5,000.00
Accounting Fees $ 20,000.00
Legal Fees $ 25,000.00
Printing Expense $ 30,000.00
Indemnification Insurance Premium $ 10,000.00
Miscellaneous $ 15,000.00
Travel $ 20,000.00
Postage & Delivery $ 10,000.00
Lodging $ 10,000.00
Telephone $ 10,000.00
Internet Development $ 28,000.00
Edgarizing (Converting Documents) $ 15,000.00
State Blue Sky Preparation and Filing Fees $ 30,000.00
Promotion and Advertising $ 58,000.00
Total $300,000.00
</TABLE>
II-1
<PAGE> 41
Item 26. Recent Sales of Unregistered Securities
The Company's predecessor in interest (a Texas corporation of the same name)
sold unregistered Common Stock. The following share figures have been adjusted
to reflect the ratio at which shares have been issued by the Company to the
shareholders of its predecessor. These private shares of restricted stock have
been sold primarily to friends and family with no advertising and no general
solicitation, with a limit of 35 non-accredited investors in a 12 month period.
Also, the sales total less than $1,000,000 per year and therefore meet the
requirements of Rule 504.
In the past three (3) years the Company's sales of securities not registered
under the Securities Act of 1933 were as follows:
(a) Amount Sold, Title and Date. The amount of common stock sold is the
amount set forth below, since the May 22, 1996 date of incorporation.
(b) Underwriter Non-Public Transferees. No underwriters. Three officers and
directors, 62 private investors.
(c) Cash Offering Price, Commission.
$1.00 per share to private investors, no commission paid.
$0.01 per share to officers and directors, no commission paid, cash
sales (28,005,000 shares).
d) Directors/Officers Purchases (3 persons, cash and/or services)
<TABLE>
<CAPTION>
DATE SHARES $/SH TOTAL
<S> <C> <C> <C>
11/2/96 25,500,000 $ .01 $23,000 +prior services
11/2/96 2,500,000 $ .05 $25,000 +prior services
12/2/96 5,000 $1.00 $ 1,000 of services
SUBTOTAL 28,005,000 $51,300
</TABLE>
Private Investor Purchases (62 Persons, all cash) between .05 to $2./share),
pre-split. Some individuals have made more than one single purchase.
<TABLE>
<CAPTION>
DATE SHARES $TOTAL
<S> <C> <C>
11-6-96 150,000 30,000
11-11-96 50,000 10,000
11-14-96 50,000 10,000
11-15-96 25,000 5,000
11-26-96 25,000 5,000
12-4-96 50,000 10,000
12-9-96 25,000 5,000
12-11-96 68,500 13,700
12-16-96 50,000 10,000
12-23-96 30,000 6,000
12-30-96 15,000 3,000
1996 total 535,000 107,700
1-10-97 50,000 10,000
1-16-97 227,500 45,500
1-22-97 105,000 21,000
1-24-97 25,000 5,000
1-27-97 50,000 10,000
2-7-97 185,000 37,000
2-11-97 100,000 20,000
2-13-97 75,000 15,000
2-14-97 60,000 12,000
2-24-97 331,500 66,300
2-27-97 125,000 25,000
3-3-97 25,000 5,000
3-4-97 140,500 28,100
3-6-97 115,000 23,000
</TABLE>
<PAGE> 42
3-7-97 50,000 10,000
3-17-97 152,530 30,506
3-20-97 75,000 15,000
4-2-97 75,000 15,000
4-7-97 105,000 21,000
4-8-97 50,000 10,000
4-10-97 25,000 5,000
4-15-97 24,500 4,900
5-12-97 100,000 20,000
6-10-97 85,000 17,000
6-12-97 10,000 2,000
6-18-97 5,000 1,000
7-8-97 3,000 150
8-4-97 15,000 3,000
9-8-97 25,000 5,000
9-24-97 137,500 27,500
9-30-97 50,000 10,000
10-6-97 20,000 4,000
10-10-97 15,000 150
10-20-97 15,000 6,000
10-24-97 12,500 5,000
11-4-97 16,250 6,500
11-7-97 11,250 4,500
12-6-97 25,000 10,000
12-19-97 37,500 5,250
12-23-97 65,500 13,100
12-31-97 25,000 5,000
1997 total 2,845,030 579,456
<PAGE> 43
Item 27. Exhibits
3i. Articles of Incorporation C/
3ii. Bylaws, as amended C/
4. Common Stock voting rights per Articles of Incorporation Page 1,
incorporated by reference from Exhibit 3i. C/
5. Opinion of JAMES R. LEONE as to the legality and non-accessibility of
the securities being distributed C/
6. Hotel Agreements
23a. Consent of PARKS, TSCHOPP & WHITCOMB, P.A. C/
23b. Consent of James R. Leone (filed as part of Exhibit 5) C/
27. Financial Data (SEC use only) C/
Footnotes:
C/ Filed herein with Pre-Effective Amendment No. 2 (File No. 333-18439)
D/ Previously filed on December 20, 1996 with original Registration Statement
No. 333-18439
E/ Previously filed on January 8, 1997 with Pre-Effective Amendment No. 1 (File
NO. 333-18439)
Item 28. Undertakings
(A) To the extent the registrant is registering securities under Rule 415
under the Securities Act of 1933, the registrant will:
(1) File, during any period in which it offers or sells securities,
a post-effective amendment to this registration statement to:
(i) Include any prospectus required by section 10(a)(3) of the
Securities Act;
(ii) Reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in the
information in the registration statement; and Notwithstanding the
forgoing, any increase or decrease in volume of securities offered (if
the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of a
prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in the volume and price represent no more than a
20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement.
(iii) Include any additional or changed material information on the
plan of distribution.
(2) For determining liability under the Securities Act, treat each
post-effective amendment as a new registration statement of the
securities offered, and the offering of the securities at that time to
be the initial bona fide offering.
(3) File a post-effective amendment to remove from registration any
of the securities that remain unsold at the end of the offering.
(B) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the "1933 Act"), as amended, may be permitted to Directors,
Officers and controlling persons of the Company pursuant to the foregoing
provisions or otherwise, the Company has been advised that in the opinion of the
Securities and Exchange
<PAGE> 44
Commission such indemnification is against public policy as expressed in the
1933 Act and, therefore, is unenforceable. In the event that claims for
indemnification against such liability (other than the payment by the Company of
the expenses incurred or paid by a Director, Officer or controlling person of
the Company in the successful defense of any such action, suit or proceeding) is
asserted by such Director, Officer or controlling person in connection with the
securities being registered, the Company, unless in the opinion of its counsel
the matter has been settled by controlling precedent, will submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the 1993 Act and will be governed by the
final adjudication of such issue.
II-3
<PAGE> 45
Signatures
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
the requirements of filing on Form SB-2/A and authorized this Amended
Registration Statement to be signed on its behalf by the undersigned in the Town
of Heathrow, State of Florida on February 6, 1998.
MOBILE AREA NETWORKS, INC.
/s/ George Wimbish
-------------------------------------
BY: George Wimbish
President & CEO
Pursuant to the Securities Act of 1933, this Amended Registration Statement was
signed by the following persons in the capacities and on the dates stated.
- -------------------------------------------------------------------------------
Signature Title Date
- -------------------------------------------------------------------------------
/s/ George Wimbish Director, Chairman, President, February 6, 1998.
- ----------------------------- Chief Executive.
George Wimbish
/s/ Robert M. Good Director, Treasurer. February 6, 1998.
- -----------------------------
Robert M. Good
/s/ James R. Leone Director, Secretary. January 6, 1998.
- -----------------------------
James R. Leone
II-4
<PAGE> 46
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit Title of Exhibit Footnotes &
Number Page #
<S> <C> <C>
3i. Articles of Incorporation.......................................... C/
3ii. ByLaws, as amended................................................. C/
5. Opinion of James R. Leone as to the legality and non-assessability C/
of the securities being distributed
6. Hotel Agreements
23a. Consent of Parks, Tschopp & Whitcomb, P.A.......................... C/
23b. Consent of James R. Leone.......................................... C/
27. Financial Data..................................................... C/
</TABLE>
Footnotes:
B/ To be filed by Amendment
C/ Filed herein with Pre-Effective Amendment No. 2 (File No. 333-18439)
D/ Previously filed with original Registration Statement No. 333-18439.
<PAGE> 1
EXHIBIT 6
PHONE (407) 333-2350 MOBILE AREA NETWORKS, INC. 1275 LAKE HEATHROW
- --------------------------------------------------------------------------------
LANE
- ----
FAX (407) 333-9903 HEATHROW, FLORIDA 32746
PROPOSAL TO PROVIDE SERVICE DATE OCT 14, 1997
MOBILE AREA NETWORKS INC. (MAN) will provide the Marriott Courtyard located at
135 International Parkway in Heathrow, Florida (client) with high speed data
access and high speed access to the Internet to the client's property as
designated by the client via wireless data access points throughout the
property. Such equipment will enable the client to offer both high-speed data
access and high speed Internet access to users as designated by the client
and/or MAN.
WHEREAS, MAN provides high speed wireless access to the Internet and other
telecommunications and data services. Property has a need for such services.
MAN proposes the following:
PROVISIONING:
MAN agrees to provide the following services to property:
1. Provide necessary equipment to provide high-speed data access to all areas
designated by the client.
2. Provide technical support during deployment period as necessary to insure
successful use of the new system.
3. Conduct training for technical staff and sales staff for proper maintenance
and billing of new system.
4. Install all necessary computers, wireless access points, servers, routers,
and modems to provide service to client as agreed to by both parties.
5. Coordinate installation with staff engineers or installers and local
hardwire installation company.
Property agrees to provide the following items to facilitate the service:
1. Wire for all designated areas with proper cabling to facilitate high speed
data system installation.
2. Electric power as necessary to power equipment.
3. Space and access for antenna and wireless access points.
4. Technical staff and sales staff for training on maintenance, operation, and
billing of new system.
TERM:
There will be a 30 day deployment period from date of installation to test the
marketability of the system and to bring efficiency level to maximum. After
this period, both parties will sign service contract agreed upon within this
period.
<PAGE> 2
PHONE (407) 333-2350 MOBILE AREA NETWORKS, INC. 1275 LAKE HEATHROW
- --------------------------------------------------------------------------------
LANE
- ----
FAX (407) 333-9903 HEATHROW, FLORIDA 32746
BILLING, PAYMENT, AND COLLECTION OPTIONS:
[ X ] OPTION 1
MAN pays all infrastructure expense. MAN will receive 90% of revenues
generated until the monthly infrastructure expense is recovered and then
will split the remainder of the revenue with the client at the rate of
50% hotel and 50% MAN.
[ ] OPTION 2
Client will split monthly infrastructure expense and MAN will split all
revenues with the property at the rate of 50% hotel and 50% MAN.
[ ] OPTION 3
Client pays all monthly infrastructure expense and revenues are split
70% for property and 30% for MAN.
/s/ Penny Leffer /s/ Michael A. Tomassini / Controller
- ------------------------------------- --------------------------------------
Client Representative (Signature) MAN Representative (Signature)
Penny Leffer Michael A. Tomassini
- ------------------------------------- --------------------------------------
Client Representative (Print) MAN Representative (Print)
<PAGE> 3
PHONE (407) 333-2350 MOBILE AREA NETWORKS, INC. 1275 LAKE HEATHROW
- --------------------------------------------------------------------------------
LANE
- ----
FAX (407) 333-9903 HEATHROW, FLORIDA 32746
TERM:
There will be a 30 day deployment period from date of installation to test the
marketability of the system and to bring efficiency level to maximum. After
this period, both parties will sign service contract agreed upon within this
period.
BILLING, PAYMENT, AND COLLECTION OPTIONS:
[ X ] OPTION 1
MAN pays all infrastructure expense. MAN will receive 90% of revenues
generated until the monthly infrastructure expense is recovered and then
will split the remainder of the revenue with the client at the rate of
50% hotel and 50% MAN.
[ ] OPTION 2
Client will split monthly infrastructure expense and MAN will split all
revenues with the property at the rate of 50% hotel and 50% MAN.
[ ] OPTION 3
Client pays all monthly infrastructure expense and revenues are split
70% for property and 30% for MAN.
/s/ Kathy A. Jent /s/ Michael A. Tomassini / Controller
- ------------------------------------- --------------------------------------
Client Representative (Signature) MAN Representative (Signature)
Kathy A. Jent Michael A. Tomassini
- ------------------------------------- --------------------------------------
Client Representative (Print) MAN Representative (Print)
<PAGE> 4
PHONE (407) 333-2350 MOBILE AREA NETWORKS, INC. 1275 LAKE HEATHROW
- --------------------------------------------------------------------------------
LANE
- ----
FAX (407) 333-9903 HEATHROW, FLORIDA 32746
PROPOSAL TO PROVIDE SERVICE DATE 10/15/97
MOBILE AREA NETWORKS INC. (MAN) will provide the Sheraton Orlando North Hotel
located at 600 North Lake Destiny Drive in Maitland, Florida (client) with high
speed data access and high speed access to the Internet to the client's property
as designated by the client via wireless data access points throughout the
property. Such equipment will enable the client to offer both high-speed data
access and high speed Internet access to users as designated by the client
and/or MAN.
WHEREAS, MAN provides high speed wireless access to the Internet and other
telecommunications and data services. Property has a need for such services.
MAN proposes the following:
PROVISIONING:
MAN agrees to provide the following services to property:
1. Provide necessary equipment to provide high-speed data access to all areas
designated by the client.
2. Provide technical support during deployment period as necessary to insure
successful use of the new system.
3. Conduct training for technical staff and sales staff for proper maintenance
and billing of new system.
4. Install all necessary computers, wireless access points, servers, routers,
and modems to provide service to client as agreed to by both parties, and
maintain adequate supply on hand.
5. Coordinate installation with staff engineers or installers and local
hardwire installation company.
6. Wire for all designated areas with proper cabling to facilitate high speed
data system installation.
Property agrees to provide the following items to facilitate the service:
1. Electric power as necessary to power equipment.
2. Space and access for antenna and wireless access points.
3. Technical staff and sales staff for training on maintenance, operation, and
billing of new system.
4. Property will not be responsible for loss or theft of any equipment
associated with wireless system.
5. Property will not be held liable for any damages to user's computer
associated with the wireless system.
