UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

X	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
	ACT OF 1934
For the quarterly period ended: June 30, 2012
Or

	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
	ACT OF 1934
For the transition period from: _____________ to _____________

Mobile Area Networks, Inc.

(Exact name of registrant as specified in its charter)

Florida	333-18439	59-3482752]
(State or Other Jurisdiction	(Commission	(I.R.S. Employer
of Incorporation)	File Number)	Identification No.)

2772 Depot Street, Sanford, Florida 32773

(Address of Principal Executive Office) (Zip Code)

407-333-2350

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
					X	Yes		No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
					X	Yes		No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer., or a smaller reporting company.

Large accelerated filer				Accelerated filer
Non-accelerated filer				Smaller reporting company			X

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

Yes

As of June 30, 2012, 49,060,788 shares of voting common stock were outstanding

Mobile Area Networks, Inc.

Index

Page


	PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements.	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	7
Item 3.	Quantitative and Qualitative Disclosures about Market Risk .	9
Item 4.	Controls and Procedures	9
	PART II-OTHER INFORMATION
Item 1.	Legal Proceedings.	10
Item 1A	Risk Factors.	10
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	10
Item 3.	Defaults Upon Senior Securities.	10
Item 4.	Submission of Matters to a Vote of Securities Holders.	10
Item 5.	Other Information.	10
Item 6.	Exhibits	10
SIGNATURE		11

Item 1. Financial Statements

MOBILE AREA NETWORKS, INC.

(A Florida Corporation)

Sanford, Florida

Balance Sheets

	December 31,			June 30,
	2011			2012
	(Audited)			(Unaudited)
Assets
Current assets:
Cash and Cash Equivalents	$	—		$	—
Accounts Receivable-Net of Allowance for Doubtful Accounts		46,420			—
Inventory		63,480			—
Total current assets		109,900			—

Property and Equipment-Net of Accumulated Depreciation		9,282			—

Other Assets:
Security Deposits and Other Assets		7,092			—
Total Assets		126,274		$	—

Liabilities and Stockholders' Deficit
Current liabilities:
Bank Overdraft		31,574		$	30,192
Notes and Capital Leases Payable-Due Within One Year		108,342			99,933
Acounts Payable		87,606			87,605
Accrued Expenses		419,797			16,580
Total current liabilities		647,319			234,310
Other Liabilities:
Notes and Capital Leases Payable-Due After One Year		—			—
Accrued Salaries-Related Party		1,428,048			1,488,048
Advances from Stockholders		455,001			352
Total Liabilities		2,530,368			2,074

Stockholders’ Deficit
Common stock, no par value, authorized 50,000,000 shares, issued and outstanding 49,060,788 shares		4,656,636			4,656,636
Paid-In Capital		56,840			56,840
Accumulated Deficit		(7,117,570	)		(6,787,679	)
Total Stockholders’ Deficit		(2,404,094	)		(2,074,203	)
Total Liabilities and Stockholders’ Deficit		126,274		$	—

See accompanying notes to financial statements.

MOBILE AREA NETWORKS, INC.

(A Florida Corporation)

Sanford, Florida

Statements of Operations

Three and Six months ended June 30, 2012 and 2011

(Unaudited)

	Three			Three			Six			Six
	Months			Months			Months			Months
	Ended			Ended			Ended			Ended
	June 30,			June 30,			June 30,			June 30,
	2012			2011			2012			2011

Sales-Net of Returns and Allowances	$	13,780		$	35,003		$	40,058		$	95,577
Cost of Goods Sold		75,394			44,217			128,271			87,542
Gross Profit (Loss)		(61,614	)		(9,214	)		(88,213	)		8,035

Operating expenses
Depreciation		1,547			1,547			3,094			3,094
Bad Debt Expense		22,649			—			22,649			2,000
Interest and Finance Charges		3,300			4,700			6,367			8,912
Outside Services		2,040			3,270			8,170			4,570
Administrative Payroll and taxes		30,290			49,867			60,599			97,941
Professional Services		—			6,550			—			7,550
Other Operating Expenses		31,799			33,496			63,145			71,214

Total Operating Expenses		91,625			99,430			164,024			195,281
Loss Before Other Income and Provision for Taxes		(153,239	)		(108,644	)		(252,237	)		(187,246	)
Other Income
Debt Forgiven in Exchange for Royalties		578,829			—			578,829			—
Gain on Disposal of Fixed Assets		3,299			—			3,299
Net Income (Loss) before taxes		428,889			(108,644	)		329,891		(187,246		)
Provision for Taxes		—			—			—			—

Net Income (Loss) for the Period	$	428,889		$	(108,644	)	$	329,891		$	(187,246	)

Weighted Average Number of Common Shares
Outstanding-Basic and Diluted		49,060,788			49,060,788			49,060,788			49,060,788

Net loss per share-Basic and Diluted	$	0.01		$	(0.00	)	$	.01		$	(0.00	)

See accompanying notes to financial statements.

MOBILE AREA NETWORKS, INC.

(A Florida Corporation)

Sanford, Florida

Statements of Cash Flows

Six months ended June 30, 2012 and 2011

(Unaudited)

	Six Months			Six Months
	Ended			Ended
	June 30,			June 30,
	2012			2011
Cash flows from operating activities
Net income (loss) for the Period	$	329,891		$	(187,246	)
Adjustments to Reconcile Net Loss to Net Cash Flows from Operating Activities:
Depreciation		3,094			3,094
Bad Debt Expense		—			2,000
Changes in Assets and Liabilities:
Accounts Receivable		46,420			8,684
Inventory		63,480			4,474
Other Assets		13,280			—
Accounts Payable		—			(629	)
Accrued Expenses		(403,217	)		72,446
Accrued Salaries-Related Party		60,000			60,000
Net Cash Flows from Operating Activities		112,948			(37,177	)

Cash Flows from Investing Activities
Acquisition of Property and Equipment		—			—
Cash Flows from Financing Activities
Advances (Repayments) from Stockholders		(103,156	)		34,000
Proceeds from Issuance of Common Stock					—
Increases (Repayment) of Notes and Capital Leases Payable		(8,409	)		7,688

Net Cash Flows from Financing Activities		(111,565	)		41,688

Net Change in Cash and Cash Equivalents		1,383			4,511

Cash and Cash Equivalents (Bank Overdraft)-Beginning of Period		(31,574	)		(13,587	)

Cash and Cash Equivalents (Bank Overdraft)-End of Period	$	(30,191	)	$	(9,076	)

Supplemental disclosure of cash flow information

Cash paid for:
Taxes	$	—			—

Interest	$	6,367			8,912

See accompanying notes to financial statements.

MOBILE AREA NETWORKS, INC.

(A Florida Corporation)

Sanford, Florida

Notes to Financial Statements

Note A - Basis of Presentation

The condensed financial statements of Mobile Area Networks, Inc. (the ”Company”) included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in financial statements prepared in conjunction with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. These condensed financial statements should be read in conjunction with the annual audited financial statements and the notes thereto included in the Company’s annual report on Form 10-K.

The accompanying unaudited interim financial statements reflect all adjustments of a normal and recurring nature which are, in the opinion of management, necessary to present fairly the financial position, results of operations and cash flows of the Company for the interim periods presented. The results of operations for these periods are not necessarily comparable to, or indicative of, results of any other interim period or for the fiscal year taken as a whole.

Reclassifications

Certain amounts in the prior year financial statements have been reclassified to conform with the current year presentation.

Note B - Going Concern

The Company’s financial statements have been presented on the basis that it is a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has reported net income of $329,891 and a net loss of $187,246 for the six months ended June 30, 2012 and 2011, respectively. As a result, there is an accumulated deficit of $6,787,679 at June 30, 2012. The primary causes of the operating losses for 2012 and 2011 and operating losses in earlier years are attributable to decreases in orders from several key customers, competition and soft economic conditions.

The Company’s continued existence is dependent upon its ability to raise capital and/or achieving profitable operations. The Company is in the process of re-evaluating its strategic direction and is actively exploring merger opportunities. The Company vacated the plant, auctioned (sold) the equipment and terminated the employees. The financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.

Note C- Financial Review

These financial statements have not been reviewed by the Company’s independent accounting firm.

Item 2.

MANAGEMENT’S DISCUSSION AND

ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

Liquidity and Capital Resources

Working Capital amounted to $(234,310) at June 30, 2012 compared to $(537,419) at December 31, 2011. Cash amounted to a Bank Overdraft of $30,192 at June 30, 2012 as compared to a Bank Overdraft of $31,574 at December 31, 2011. As more fully described under the Company’s statements of cash flows in the accompanying financial statements, net cash from or (used in) operating activities for the six months ended June 30, 2012 and 2011 was $112,948 and ($37,177). For the six months ended June 30, 2012 and 2011, cash was provided primarily by operations and Advances from Stockholders. During the six months ended June 30, 2012 and 2011, cash was used to fund operations.

As indicated herein, the Company’s short term liquidity needs have been historically satisfied primarily from the continuing sale of the Company stock and advances from stockholders.

Results of Operations

Sales decreased during the current period second quarter and six months as compared with the year earlier period. For the three months ended June 30, 2012 sales were $13,780 and for the three months ended June 30, 2011, sales were $35,003. For the six months ended June 30, 2012, sales were $40,058 and for the six months ended June 30, 2011, sales were $95,577. The decreases for both the three month and six month periods relate to a weaker economy and the Company’s unsuccessful ability to receive an increase in orders from its existing customer base.

Cost of Goods Sold increased during the three and six month periods when compared to the year earlier periods. For the three months ended June 30, 2012, Cost of Goods Sold were $75,394 and for the three months ended June 30, 2011, Cost of Goods Sold were $44,217. For the six months ended June 30, 2012, Cost of Goods Sold were $128,271 and for the six months ended June 30, 2011, Cost of Goods Sold were $87,542. The increases for the three and six month periods related principally to the write-off of inventory.

Total Operating Expenses decreased to $91,625 for the three months ended June 30, 2012 from $99,430 for the three months ended June 30, 2011. For the six months ending June 30, 2012, operating expenses decreased to $164,024 from $195,281 for the six months ending June 30, 2011.

Depreciation expense remained unchanged at $1,547 for the three months ended June 30, 2012 and June 30, 2011, respectively. For the six months ended June 30, 2012 and June 30, 2011, respectively, depreciation expense was $3,094.

Bad Debt Expense was $22,649 for the three months ending June 30, 2012 and $-0- for the three months ending June 30, 2011. For the six months ending June 30, 2012, Bad Debt Expense was $22,649 and for the six months ending June 30, 2011, Bad Debt Expense was $2,000.

Interest and Finance Charges decreased to $3,300 for the three months ended June 30, 2012 from $4,700 for the three months ended June 30, 2011. Interest and Finance Charges decreased to $6,367 for the six months ended June 30, 2012 from $8,912 for the six months ended June 30, 2011. The current period interest expense and finance charges are less due to a lower interest rate average on credit cards.

Outside Services expense was $2,040 for the three months ended June 30, 2012 and $3,270 for the three months ending June 30, 2011. For the six months ended June 30, 2012, Outside Services expense was $8,170 compared to $4,570 for the six months ended June 30, 2011. The incidence of contracted labor expenses vary with Company staffing and the levels of production.

Administrative Payroll and Payroll Tax expense decreased to $30,290 for the three months ending June 30, 2012 from $49,867 for the three months ending June 30, 2011. Administrative Payroll and Payroll Tax expense decreased to $60,599 for the six months ending June 30, 2012 from $97,941 for the six months ending June 30, 2011. The reduced expenses for the quarter and six months is attributable to a reduction in staff necessitated by the decrease in sales.

Professional Services expense increased to $-0- for the three months ended June 30, 2012 from $6,550 for the three months ended June 30, 2011. For the six months ended June 30, 2012, Professional Services expense decreased to $-0- from $7,550 for the six months ended June 30, 2011. The expense is for audit and review services from the Company’s independent public accountants and also legal services.

Other Operating Expenses were $31,799 for the three months ended June 30, 2012 and $33,496 for the three months ended June 30, 2011. Other Operating Expenses were $63,145 for the six months ended June 30, 2012 and $71,214 for the six months ended June 30, 2011. The decreases for the three and six month periods reflect decreased spending for marketing, health insurance, travel and telephone expenses.

Other Income for the three months ending June 30, 2012 included $578,829 for forgiveness of a note and accrued rent payable to the building lessor in exchange for waiving future royalty income on a jointly developed new product. Other Income for the three months ending June 30, 2012 also included $3,209 for a gain on the sale of the Company’s equipment. For the three and six months ending June 30, 2011, Other Income was $-0-.

The Net Income for the Period was $428,889 for the three months ended June 30, 2012 an increase from the $(108,644) Net Loss for The Period reported for the three months ended June 30, 2011. The Net Income for the Period was $329,891 for the six months ended June 30, 2012, an increase from the $(187,246) Net Loss reported for the six months ended June 30, 2011. The Net Loss Per Share was $.01 for the three months ending June 30, 2012 and $.00 for the three months ending June 30, 2011. The Net Loss Per Share was $.01 for the six months ending June 30, 2012 and $.00 for the six months ending June 30, 2011.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Not required by smaller reporting companies.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

We have adopted and maintain disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) that are designed to ensure that information required to be disclosed in our reports under the Exchange Act, is recorded, processed, summarized and reported within the time periods required under the SEC’s rules and forms and that the information is gathered and communicated to our management, including our Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer), as appropriate, to allow for timely decisions regarding financial disclosure.

As required by SEC Rule 15d-15(e), we carried out an evaluation under the supervision and with the participation of our management, including the Chief Executive Officer/Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Exchange Act Rule 15d-14 as of the end of the period covered by this report. Based on the foregoing evaluation, our Chief Executive Officer/Chief Financial Officer have concluded that our disclosure controls and procedures are not effective.

There have been no changes in the Company’s internal control over financial reporting during the most recently completed fiscal quarter that have materially affected or are reasonably likely to materially affect the Company’s internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1.

Legal Proceedings.

None

Item 1A.

Risk Factors.

Not required by smaller reporting companies.

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds.

None

Item 3.

Defaults Upon Senior Securities.

None

Item 4.

Submission of Matters to a Vote of Security Holders.

None

Item 5.

Other Information.

Forward-Looking Statements

The Quarterly Report on Form 10-Q contains certain statements of a forward-looking nature relating to future events or the future financial performance of the Company. Such statements are only predictions and the actual events or results may differ materially from the results discussed in the forward-looking statements. Factors that could cause or contribute to such differences include those discussed below as well as those discussed in other filings made by the Company with the Securities and Exchange Commission, including the Company’s Annual Report included in its annual filing on Form 10-K.

Item 6.

Exhibits.

31.1	Certification Pursuant to Item 601(b)(31) of Regulation S-K, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2	Certification Pursuant to Item 601(b)(31) of Regulation S-K, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32	Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished pursuant to Item 601(b)(32) of Regulation S-K).

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: August 10, 2012	Mobile Area Networks, Inc.


	By:	/s/ George Wimbish
		George Wimbish
		Director, Chairman and President

MOBILE AREA NETWORKS INC 10-Q