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U.S SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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 March 31, 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.
--------------------------------------------------
(Exact Name of Small Business User as Specified in Its Charter)
Florida 59-3482752
- ------------------------------------------- ---------------
(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, 2000 - 33,509,453
<PAGE>
MOBILE AREA NETWORKS, INC.
INDEX
Page
Number
------
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets
March 31, 2000 (Unaudited)
and December 31, 1999 2
Statements of Operations
Three months ended
March 31, 2000 (Unaudited) and
March 31, 1999 (Unaudited) 3
Statements of Cash Flows
Three months ended
March 31, 2000 (Unaudited) and
March 31, 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
<PAGE>
MOBILE AREA NETWORKS, INC.
Balance Sheets
Assets
------
<TABLE>
<CAPTION>
March 31,
December 31, 2000
1999 (Unaudited)
--------------------- -----------------
<S> <C> <C>
Current assets:
Cash $ 216,185 167,276
Inventory 23,947 24,547
Other current assets 5,671 14,082
--------------------- -----------------
Total current assets 245,803 205,905
--------------------- -----------------
Property and equipment, net 132,347 145,173
Intangible assets, net of accumulated amortization of $9,150
and $6,862 6,108 5,346
--------------------- -----------------
$ 384,258 356,424
===================== =================
<CAPTION>
Liabilities and Stockholders' Equity
------------------------------------
<S> <C> <C>
Current liabilities:
Accounts payable $ 15,771 23,681
Accrued expenses 240,000 243,763
--------------------- -----------------
Total current liabilities 255,771 267,444
--------------------- -----------------
Stockholders' equity:
Common stock, no par value, authorized 50,000,000 shares,
issued and outstanding 33,486,035 and 33,509,453 shares. 1,742,541 1,870,347
Accumulated deficit (1,614,054) (1,781,367)
--------------------- -----------------
Total stockholders' equity 128,487 88,980
--------------------- -----------------
$ 384,258 $ 356,424
===================== =================
</TABLE>
See accompanying notes to financial statements.
2
<PAGE>
MOBILE AREA NETWORKS, INC.
Statements of Operations
Three months ended March 31, 2000 and 1999
<TABLE>
<CAPTION>
Three Months Three Months
Ended Ended
March 31, 2000 March 31, 1999
(Unaudited) (Unaudited)
-------------- --------------
<S> <C> <C>
Revenue $ 32,150 12,408
---------- ----------
Costs and expenses:
Product development and marketing 100,953 70,326
General and administrative 67,303 57,558
---------- ----------
Total costs and expenses 168,256 127,884
---------- ----------
Interest income - -
---------- ----------
Net loss $ (136,106) (115,476)
========== ==========
Weighted average shares outstanding 33,497,744 33,078,475
========== ==========
Net loss per share $ 0.004 0.003
========== ==========
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
MOBILE AREA NETWORKS, INC.
Statements of Cash Flows
Three months ended March 31, 2000 and 1999
(Unaudited)
<TABLE>
<CAPTION>
Three Months Three Months
Ended Ended
March 31, 2000 March 31, 1999
(Unaudited) (Unaudited)
--------------------- ---------------------
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (136,106) (115,476)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 10,262 8,762
Change in operating assets and liabilities:
Accounts payable 7,910 (46,003)
Accrued expenses 3,762 30,000
Inventory (600) 508
Other current assets (8,411) (4,290)
---------------- ----------------
Net cash used in operating activities (123,183) (126,499)
---------------- ----------------
Cash flows from investing activities:
Purchase of property and equipment (22,326) (8,004)
Patent acquisition costs - -
---------------- ----------------
Net cash used in investing activities (22,326) (8,004)
---------------- ----------------
Cash flows from financing activities:
Proceeds from issuance of common stock 101,504 145,140
Stock issuance cost (4,904) (1,113)
Proceeds from issuance of note payable - -
---------------- ----------------
Net cash provided by financing activities 96,600 144,027
---------------- ----------------
Net increase (decrease) in cash (48,909) 9,524
Cash at beginning of period 216,185 54,971
---------------- ----------------
Cash at end of period $ 167,276 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.
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, 2000 and results
of operations and cash flows for three month periods ended March 31,
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
-------------------
The Company recognizes revenue upon shipment of product and upon
provision of related consulting and installation services.
(3) INVENTORIES
-----------
Inventories at March 31, 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.
(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.
NOTES TO FINANCIAL STATEMENTS
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
-------------------------------
Working capital amounted to $ (61,539) at March 31, 2000 as compared to
$ (9,958) at December 31, 1999. Cash amounted to $ 167,276 at March 31,
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 three months ended March 31, 2000 and 1999 was $
(123,183) and $ (126,499), respectively, primarily as a result of the
Company's net losses and changes in the balance of accounts payable.
For the three months ended March 31, 2000 and 1999, cash was provided
primarily by additional stock issuances. During the three months ended
March 31, 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
---------------------
The Company's operations to date have been devoted primarily to product
development and marketing, raising capital and administrative
activities. Revenues through March 31, 2000 have been minimal but are
expected to increase at a steady pace throughout the remainder of
fiscal 2000. For the three months ended March 31, 2000, product
development and marketing expenses increased approximately 43% over the
corresponding period of the prior year. 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 three months ended March 31, 2000 resulted in a net
loss of $136,106 as compared to a net loss of $115,476 for the
corresponding period of the prior year. Since inception, the Company
has incurred research and development costs equal to approximately 60%
of total product development and marketing costs.
6
<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: None
(b) During the quarter ended March 31, 2000 no report on
Form 8-K was filed or required to be filed.
7
<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 11, 2000 /s/ George Wimbish
- ------------------- --------------------------------
Date George Wimbish
Director, Chairman and President
<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-31-2000
<CASH> 167,276
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 24,547
<CURRENT-ASSETS> 205,905
<PP&E> 223,256
<DEPRECIATION> 78,083
<TOTAL-ASSETS> 356,424
<CURRENT-LIABILITIES> 267,444
<BONDS> 0
0
0
<COMMON> 1,870,347
<OTHER-SE> (1,781,367)
<TOTAL-LIABILITY-AND-EQUITY> 356,424
<SALES> 32,150
<TOTAL-REVENUES> 32,150
<CGS> 0
<TOTAL-COSTS> 168,256
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (136,106)
<INCOME-TAX> 0
<INCOME-CONTINUING> (136,106)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (136,106)
<EPS-BASIC> (0.004)
<EPS-DILUTED> (0.004)
</TABLE>
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