U.S SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 2059
FORM 10-QSB
(Mark One)
(X) Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of
1934
For the quarterly period ended March 31, 1999
( ) Transition report under Section 13 or 15(d) of the Exchange Act
For the transition period from _______________ to _________________.
Commission file number 333-18439
MOBILE AREA NETWORKS, INC.
---------------------------------------------------------------
(Exact Name of Small Business User as Specified in Its Charter)
FLORIDA 59-3482752
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(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
1275 LAKE HEATHROW LANE, SUITE 115, HEATHROW, FLORIDA 32746
- - - - ----------------------------------------------------- ---------
(Address of Principal Executive Offices) (Zip Code)
407-333-2350
- - - - -----------------------------------------------
(Issuer's telephone Number, Including Area Code)
Check whether the issuer: (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes [X] No [ ]
Shares of Common Stock outstanding at March 31, 1999 - 33,133,820
<PAGE>
MOBILE AREA NETWORKS, INC.
INDEX
PAGE
NUMBER
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PART I. FINANCIAL INFORMATION
Item I. Financial Statements
Balance Sheets
March 31, 1999 (Unaudited)
and December 31, 1998 2
Statements of Operations
Three months ended
March 31, 1999 (Unaudited) and
March 31, 1998 (Unaudited)
Period from May 23, 1996 through
March 31, 1999 (unaudited) 3
Statements of Cash Flows
Three months ended
March 31, 1999 (Unaudited) and
March 31, 1998 (Unaudited)
Period from May 23, 1996 through
March 31, 1999 (unaudited) 4
Notes to Financial Statements (Unaudited) 5-6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 7
PART II. OTHER INFORMATION 8
<PAGE>
<TABLE>
<CAPTION>
MOBILE AREA NETWORKS, INC.
(A Development Stage Company)
BALANCE SHEETS
MARCH 31,
DECEMBER 1999
1998 (UNAUDITED)
------------- -----------
ASSETS
<S> <C> <C>
Current assets:
Cash $ 54,971 64,495
Inventory 20,944 20,437
Other current assets 9,337 13,627
----------- -----------
Total current assets 85,252 98,559
----------- -----------
Property and equipment, net 134,200 134,204
Intangible assets, net of accumulated amortization of $6,100
and $6,862 9,158 8,396
----------- -----------
$ 228,610 241,159
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 71,353 25,350
Accrued expenses 198,000 228,000
Advances from stockholder 20,000 20,000
----------- -----------
Total current liabilities 289,353 273,350
----------- -----------
Stockholders' Equity:
Common stock, no par value, authorized 50,000,000 shares,
issued and outstanding 33,023,130 and 33,133,820 shares 982,422 1,126,449
Deficit accumulated during the development stage (1,043,165) (1,158,640)
----------- -----------
Total stockholders' equity (60,743) (32,191)
----------- -----------
$ 228,610 241,159
=========== ===========
</TABLE>
See accompanying notes to financial statements.
2
<PAGE>
<TABLE>
<CAPTION>
MOBILE AREA NETWORKS, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
Three months ended March 31, 1999 and 1998 and the
cumulative period from May 23, 1996 (date of inception) through March 31, 1999
(unaudited)
THE PERIOD
THREE MONTHS THREE MONTHS FROM MAY 23,
ENDED ENDED 1996 THROUGH
MARCH 31, 1998 MARCH 31, 1999 MARCH 31, 1999
------------ -------------- --------------
<S> <C> <C> <C>
Revenues $ 8,488 12,408 93,693
------------ ------------ ------------
Costs and expenses:
Product development and marketing 100,404 70,326 699,019
General and administrative 66,937 57,558 571,924
------------ ------------ ------------
Total costs and expenses 167,341 127,884 1,270,943
------------ ------------ ------------
Interest income 2,702 -- 18,610
------------ ------------ ------------
Net loss $ (156,151) (115,475) (1,158,640)
============ ============ ============
Weighted average shares outstanding 31,480,942 33,078,475 28,990,648
============ ============ ============
Net loss per share $ 0.005 0.003 0.04
============ ============ ============
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
<TABLE>
<CAPTION>
MOBILE AREA NETWORKS, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
For the three months ended March 31, 1999 and 1998
and for the cumulative period from May 23, 1996
(date of inception) through March 31, 1999
(Unaudited)
CUMULATIVE PERIOD
THREE MONTHS THREE MONTHS FROM MAY 23, 1996
ENDED ENDED THROUGH
MARCH 31, 1999 MARCH 31, 1998 MARCH 31, 1999
----------- -------------- -----------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss $ (115,475) (156,151) (1,158,640)
Adjustments to reconcile net loss to net cash used
in operating activities:
Depreciation and amortization 8,762 7,262 44,522
Change in operating assets and liabilities:
Accounts payable (46,003) (23,416) 25,350
Accrued expenses 30,000 30,000 228,000
Inventory 507 (5,905) (20,437)
Other current assets (4,290) (5,304) (13,627)
----------- ----------- -----------
Net cash used in operating activities (126,499) (153,514) (894,832)
----------- ----------- -----------
Cash flows from investing activities:
Purchase of property and equipment (8,004) (12,971) (171,864)
Patent acquisition costs -- -- (15,258)
----------- ----------- -----------
Net cash used in investing activities (8,004) (12,971) (187,122)
----------- ----------- -----------
Cash flows from financial activities:
Proceeds from issuance of common stock 145,140 63,650 1,143,246
Stock issuance cost (1,113) -- (16,797)
Proceeds from issuance of note payable -- -- 20,000
----------- ----------- -----------
Net cash provided by financing activities 144,027 63,650 1,146,449
----------- ----------- -----------
Net increase (decrease) in cash 9,524 (102,835) 64,495
Cash at beginning of period 54,971 279,482 --
----------- ----------- -----------
Cash at end of period $ 64,495 176,647 64,495
=========== =========== ===========
Supplemental disclosure of cash flow information
Cash paid for:
Taxes $ -- $ -- $ --
=========== =========== ===========
Interest $ -- $ -- $ --
=========== =========== ===========
</TABLE>
See accompanying notes to financial statements.
4
<PAGE>
MOBILE AREA NETWORKS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(1) PRESENTATION OF UNAUDITED FINANCIAL STATEMENTS
The unaudited financial statements have been prepared in accordance with
rules of the Securities and Exchange Commission and, therefore, do not
include all information and footnotes necessary for a fair presentation of
financial position, results of operations and cash flows, in conformity
with generally accepted accounting principles. The information furnished,
in the opinion of management, reflects all adjustments (consisting only of
normal recurring accruals) necessary to present fairly the financial
position as of March 31, 1999 and results of operations and cash flows for
three month periods ended March 31, 1999 and 1998 and for the cumulative
period from May 23, 1996 (date of inception) through March 31, 1999. The
results of operations are not necessarily indicative of results, which may
be expected for any other interim period, or for the year as a whole.
(2) REVENUE RECOGNITION
The Company recognizes revenue upon shipment of product and upon provision
of related consulting and installation services.
(3) INVENTORIES
Inventories at March 31, 1999 and 1998 consist of finished products and
equipment.
(4) REGISTRATION OF SECURITIES
On February 16, 1999 the Company's registration statement covering the
registration of 5,000,000 shares of common stock was declared effective by
the United States Securities and Exchange Commission. Provisions of the
registration statement include a maximum offering price of $6.00 per unit
resulting in maximum gross proceeds of $30,000,000.
The Securities are being sold on a best efforts, no minimum amount basis.
The offering will expire nine months after the effective date unless
updated or terminated sooner. The proceeds from the offering will be used
primarily to fund the deployment of the Company's communications network
infrastructure.
(5) YEAR 2000 ISSUE
The Company has addressed its state of readiness to deal with the problem
commonly known as the Year 2000 Issue. With respect to its own information
systems, the Company is year 2000 complaint. The costs to achieve year 2000
compliance have not been material to the Company's operations.
5
<PAGE>
MOBILE AREA NETWORKS, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(5) YEAR 2000 ISSUE - (CONTINUED)
The Company has informally discussed year 2000 preparedness with its most
significant suppliers and has obtained assurances that such suppliers do
not expect any disruption in their ability to fulfill customer needs as of
a result of year 2000 issues. The Company is preparing to request written
confirmation of year 2000 preparedness from each of such suppliers. To
date, the Company has not undertaken to assess the year 2000 preparedness
of its customers. Management expects to initiate discussions with its most
significant customers concerning their year 2000 preparedness during the
fourth quarter of 1999, but does not believe that customer's lack of
preparedness would have a material adverse effect on the Company's sales or
results of operations.
6
<PAGE>
MANAGEMENT'S DISCUSSION ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
Working capital amounted to ($174,791) at March 31, 1999 as compared to
($204,101) at December 31, 1998. Cash amounted to $64,495 at March 31, 1999, as
compared to ($174,791) at December 31, 1998. As more fully described under the
Company's statements of cash flows in the accompanying financial statements, net
cash used in operating activities for the three months ended March 31, 1999 and
1998 was ($126,499) and ($153,514), respectively, primarily as a result of the
Company's net loss and decreases in accounts payable. For the three months ended
March 31, 1999 and 1998, cash was provided primarily by additional stock
issuance. During the three months ended March 31, 1999 and 1998, cash was used
in investing activities to acquire additional property and equipment.
As indicated herein, the Company's short-term liquidity needs have been
satisfied primarily from the continuing sale of Company stock.
RESULTS OF OPERATIONS
The Company's operations to date have been devoted primarily to product
development and marketing, raising capital and administrative activities.
Revenues through March 31, 1999 have been minimal but are expected to increase
at a steady pace throughout the remainder of fiscal 1999. For the three months
ended March 31, 1999, product development and marketing expenses decreased
approximately 30% over the corresponding period of the prior year as the initial
product development phase has been substantially completed. Management's primary
goal for the remainder of 1999 is to focus on increasing marketing efforts aimed
at companies with large numbers of business travelers.
Operations for the three months ended March 31, 1999 resulted in a net loss of
$115,475 as compared to a net loss of $156,151 for the corresponding period of
the prior year. The net loss since inception amounted to $1,158,640 through
March 31, 1999. Since inception, the Company has incurred research and
development costs equal to approximately 70% of total product development and
marketing costs.
7
<PAGE>
PART II - OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS: None
Item 2. CHANGES IN SECURITIES: None
Item 3. DEFAULTS UPON SENIOR SECURITIES: None
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS: None
Item 5. OTHER INFORMATION: None
Item 6. Exhibits and Reports on Form 8-K:
(a) Exhibits:
27 Financial Data Schedule
(b) During the quarter ended March 31, 1999 no report on
Form 8-K was filed or required to be filed.
8
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereto duly authorized.
MOBILE AREA NETWORKS, INC.
May 21, 1999 /s/ GEORGE WIMBISH
- - - - ------------ --------------------------
Date George Wimbish
Director, Chairman and President
9
<PAGE>
EXHIBIT INDEX
EXHIBIT
- - - - -------
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 64,495
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 20,437
<CURRENT-ASSETS> 98,559
<PP&E> 172,064
<DEPRECIATION> (37,860)
<TOTAL-ASSETS> 241,159
<CURRENT-LIABILITIES> 273,350
<BONDS> 0
1,126,449
0
<COMMON> 0
<OTHER-SE> (1,158,640)
<TOTAL-LIABILITY-AND-EQUITY> 241,159
<SALES> 12,408
<TOTAL-REVENUES> 12,408
<CGS> 0
<TOTAL-COSTS> 127,884
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (115,475)
<INCOME-TAX> 0
<INCOME-CONTINUING> (115,475)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (115,475)
<EPS-BASIC> (.003)
<EPS-DILUTED> (.003)
</TABLE>
