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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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 September 30, 2000
( ) 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.
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(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
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(Address of Principal Executive Offices) (Zip Code)
407-333-2350
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(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
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Shares of Common Stock outstanding at September 30, 2000 - 33,590,353
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MOBILE AREA NETWORKS, INC.
Index
Page
Number
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PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets
September 30, 2000 (Unaudited)
and December 31, 1999 2
Statements of Operations
Three and nine months ended
September 30, 2000 (Unaudited) and
September 30, 1999 (Unaudited) 3
Statements of Cash Flows
Nine months ended
September 30, 2000 (Unaudited) and
September 30, 1999 (Unaudited) 4
Notes to Financial Statements (Unaudited) 5
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 6
PART II. OTHER INFORMATION 7
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MOBILE AREA NETWORKS, INC.
Balance Sheets
Assets
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<TABLE>
<CAPTION>
September 30,
December 31, 2000
1999 (unaudited)
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<S> <C> <C>
Current assets:
Cash $ 216,185 20,117
Inventory 23,947 25,792
Other current assets 5,671 21,697
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Total current assets 245,803 67,606
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Property and equipment, net 132,347 126,172
Intangible assets, net of accumulated amortization of $9,150 6,108 3,822
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$ 384,258 197,600
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Liabilities and Stockholders' Equity
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Current liabilities:
Accounts payable $ 15,771 10,115
Accrued expenses 240,000 243,275
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Total current liabilities 255,771 253,390
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Stockholders' equity:
Common stock, no par value, authorized 50,000,000 shares,
issued and outstanding 33,486,035 and 33,590,353 shares 1,742,541 1,970,329
Deficit accumulated during the development stage (1,614,054) (2,026,119)
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Total stockholders' equity 128,487 (55,790)
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$ 384,258 197,600
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</TABLE>
See accompanying notes to financial statements.
2
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MOBILE AREA NETWORKS, INC.
Statements of Operations
Three and nine months ended September 30, 2000 and 1999
(unaudited)
<TABLE>
<CAPTION>
Three months Three months Nine months Nine months
ended ended ended ended
September 30, September 30, September 30, September 30,
2000 1999 2000 1999
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Revenues $ 27,610 6,069 108,252 26,730
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Cost and expenses:
Product development and marketing 118,416 96,347 338,206 254,620
General and administrative 63,763 77,482 182,111 204,763
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Total costs and expenses 182,179 173,829 520,317 459,383
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Interest income - - - -
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Net loss $ (154,569) (167,760) (412,065) (432,653)
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Weighted average shares outstanding 33,552,353 33,416,112 33,538,194 33,240,639
============== ============== ============== ==============
Net loss per share $ (0.005) (0.005) (0.012) (0.013)
============== ============== ============== ==============
</TABLE>
See accompanying notes to financial statements.
3
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MOBILE AREA NETWORKS, INC.
Statements of Cash Flows
For the nine months ended September 30, 2000 and 1999
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Nine Months
Ended Ended
September 30, September 30,
2000 1999
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Cash flows from operating activities:
<S> <C> <C>
Net loss $(412,065) (432,653)
Adjustments to reconcile net loss to net cash used
Depreciation and amortization 30,786 18,475
Change in operating assets and liabilities:
Accounts payable (5,656) (50,794)
Accrued expenses 3,275 51,861
Inventory (1,845) (2,604)
Other current assets (16,026) 6,216
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Net cash used in operating activities (401,531) (409,499)
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Cash flows from investing activities:
Purchase of property and equipment (22,325) (39,644)
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Net cash used in investing activities (22,325) (39,644)
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Cash flows from financing activities:
Proceeds from issuance of common stock 232,654 568,598
Stock issuance cost (4,866) (9,535)
Repayment of note payable - (20,000)
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Net cash provided by financing activities 227,788 539,063
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Net increase (decrease) in cash (196,068) 89,920
Cash at beginning of period 216,185 54,971
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Cash at end of period $ 20,117 144,891
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Supplemental disclosure of cash flow information
Cash paid for:
Taxes $ - -
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Interest $ - -
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</TABLE>
See accompanying notes to financial statements.
4
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MOBILE AREA NETWORKS, INC.
Notes to Financial Statements
(1) Presentation of Unaudited Financial Statements
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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
September 30, 2000 and results of operations and cash flows for three and
nine month periods ended September 30, 2000 and 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
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The Company recognizes revenue upon shipment of product and upon provision
of related consulting and installation services.
(3) Inventories
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Inventories at September 30, 2000 and December 31, 1999 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 its communications network infrastructure,
software development or possible acquisition thereof, and marketing.
5
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Liquidity and Capital Resources
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Working capital amounted to $(185,784) at September 30, 2000 compared to
$(9,968) at December 31, 1999. Cash amounted to $20,117 at September 30, 2000,
as compared to $216,185 at December 31, 1999. 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 nine months ended September 30, 2000
and 1999 was $(401,531) and $(409,499), respectively, primarily as a result of
the Company's net losses. For the nine months ended September 30, 2000 and 1999,
cash was provided primarily by additional stock issuances. During the nine
months ended September 30, 2000 and 1999, 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
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The Company's operations to date have been devoted primarily to product
development and marketing, raising capital and administrative activities.
However, revenues through September 30, 2000 increased substantially over the
same period in 1999. For the nine months ended September 30, 2000, product
development and marketing expenses have increased approximately 33% over the
corresponding period of the prior year as the Company's products are now more
aggressively marketed and sold to an increasing customer base. As expected,
general and administrative expenses have decreased over this period as a
percentage of total costs and expenses. Management's primary goal for the
remainder of 2000 is to focus on providing increased consulting services and
consummating product sales and service agreements with the Company's customer
base.
Operations for the nine months ended September 30, 2000 resulted in a net loss
of $412,065 as compared to a net loss of $432,653 for the corresponding period
of the prior year. Since inception, the Company has incurred research and
development costs equal to approximately 50% of total product development and
marketing costs.
6
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PART II - OTHER INFORMATION
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Item 1. Legal Proceedings: None
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Item 2. Changes in Securities: None
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Item 3. Defaults Upon Senior Securities: None
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Item 4. Submission of Matters to a Vote of Security Holders: None
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Item 5. Other Information: None
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Item 6. Exhibits and Reports on Form 8-K:
(a) Exhibits: None
(b) During the quarter ended September 30, 2000 no report
on Form 8-K was filed or required to be filed.
7
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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.
11/14/2000 /s/ George Wimbish
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Date George Wimbish
Director, Chairman and President
