EASTERN DISTRICT OF VIRGINIA
In re Pathnet Inc. CASE NO. BK-01-12265
REPORTING PERIOD: APRIL 30, 2001
MONTHLY OPERATING REPORT
File with Court and submit copy to United States Trustee within 20 days after end of month
Submit copy of report to any official committee appointed in the case.
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DOCUMENT EXPLANATION
REQUIRED DOCUMENTS FORM NO. ATTACHED ATTACHED
Schedule of Cash Receipts and Disbursements MOR-1 yes
Bank Reconciliation (or copies of debtor's bank reconciliation MOR-1 (CON'T) yes
Copies of bank statements yes
Cash disbursements journals yes
Statement of Operations MOR-2 yes
Balance Sheet MOR-3 yes
Status of Postpetition Taxes MOR-4 yes
Copies of IRS Form 6123 or payment receipt
Copies of tax returns filed during reporting period
Summary of Unpaid Postpetition Debts MOR-4 yes
Listing of aged accounts payable
Accounts Receivable Reconciliation and Aging MOR-5 yes
Debtor Questionnaire MOR-5 yes
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I declare under penalty of perjury (28 U.S.C. Section 1746) that this report and the attached documents
are true and correct to the best of my knowledge and belief.
- ---------------------------------------
Signature of Debtor Date
- ---------------------------------------
Signature of Joint Debtor Date
/s/ James M. Craig
- ---------------------------------------
Signature of Authorized Individual* Date 05-31-01
James M. Craig
- --------------------------------------- Chief Financial Officer
Printed Name of Authorized Individual Title of Authorized Individual
*Authorized individual must be an officer, director or shareholder if debtor is a corporation; a partner if debtor
is a partnership; a manager or member if debtor is a limited liability company.
FORM MOR
(9/99)
IN RE PATHNET INC. CASE NO. BK-01-12265
Debtor REPORTING PERIOD: APRIL 30, 2001
SCHEDULE OF CASH RECEIPTS AND DISBURSEMENTS
Amounts reported should be per the debtor's books, not the bank statement. The beginning cash should be the ending cash from the prior month or, if this is the
first report, the amount should be the balance on the date the petition was filed. The amounts reported in the "CURRENT MONTH - ACTUAL" column must
equal the sum of the four bank account columns. The amounts reported in the "PROJECTED" columns should be taken from the SMALL BUSINESS INITIAL
REPORT (FORM IR-1) . Attach copies of the bank statements and the cash disbursements journal. The total disbursements listed in the disbursements journal
must equal the total disbursements reported on this page. A bank reconciliation must be attached for each account. [See MOR-1 (CON'T)]
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BANK ACCOUNTS CURRENT MONTH CUMULATIVE FILING TO DATE
OPER. PAYROLL MEDICAL OTHER ACTUAL PROJECTED ACTUAL PROJECTED
CASH BEGINNING OF MONTH 458,670 966,558 -36,881 6,567,695 7,956,042 7,956,042
---------- --------- -------- ----------- ----------- --------- ----------- ----------
RECEIPTS
CASH SALES
ACCOUNTS RECEIVABLE 710,783 710,783 279,000 710,783 279,000
LOANS AND ADVANCES
SALE OF ASSETS
OTHER (ATTACH LIST) 159,744 1,083 3,427 5660 169,915 169,915
TRANSFERS (Wires) 837,278 50,000 887,278 887,278
OTHER ADJUSTMENTS 39,738 39,738 39,738
VOIDS 249,968 249,968 249,968
INTERCOMPANY SERVICES 633,114 633,114
INTEREST INCOME 528 528
---------- --------- -------- ----------- ----------- --------- ----------- ----------
TOTAL RECEIPTS 1,120,495 878,099 53,427 5,660 2,057,682 912,642 2,057,682 912,642
---------- --------- -------- ----------- ----------- --------- ----------- ----------
DISBURSEMENTS
NET PAYROLL -955,789 -955,789 -1,020,500 -955,789 -1,020,500
PAYROLL TAXES -528,969 -528,969 -549,500 -528,969 -549,500
SALES, USE, & OTHER TAXES
INVENTORY PURCHASES
SECURED/ RENTAL/ LEASES -233,500 -233,500
MEDICAL CLAIM PAYMENTS -82,140 -82,140 -82,140
ADMINISTRATIVE -212,920 -43,233 -256,153 -381,660 -256,153 -381,660
SELLING
OTHER (ATTACH LIST) -102 -102 -102
INTERCOMPANY SERVICES
CAPITAL EXPENDITURES -1,000 -1,000
OWNER DRAW *
TRANSFERS (WIRE) -942,293 -942,293 -942,293
CONTINGENCY -150,000 -150,000
PROFESSIONAL FEES
U.S. TRUSTEE QUARTERLY FEES
COURT COSTS
---------- --------- -------- ----------- ----------- --------- ----------- ----------
TOTAL DISBURSEMENTS -1,155,213 -1,527,991 -82,140 -102 -2,765,446 -2,336,160 -2,765,446 -2,336,160
---------- --------- -------- ----------- ----------- --------- ----------- ----------
NET CASH FLOW -34,718 -649,892 -28,713 5,559 -707,764 -1,423,518 -707,764 -1,423,518
(RECEIPTS LESS DISBURSEMENTS)
---------- --------- -------- ----------- ----------- --------- ----------- ----------
CASH - END OF MONTH 423,952 316,666 -65,594 6,573,253 7,248,277 -1,423,518 7,248,278 -1,423,518
---------- --------- -------- ----------- ----------- --------- ----------- ----------
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* COMPENSATION TO SOLE PROPRIETORS FOR SERVICES RENDERED TO BANKRUPTCY ESTATE
THE FOLLOWING SECTION MUST BE COMPLETED
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DISBURSEMENTS FOR CALCULATING U.S. TRUSTEE QUARTERLY FEES: (FROM CURRENT MONTH ACTUAL COLUMN)
TOTAL DISBURSEMENTS 2,765,446
LESS: TRANSFERS TO DEBTOR IN POSSESSION ACCOUNTS $
PLUS: ESTATE DISBURSEMENTS MADE BY OUTSIDE SOURCES (i.e. from escrow accounts) $
----------
TOTAL DISBURSEMENTS FOR CALCULATING U.S. TRUSTEE QUARTERLY FEES 2,765,446
----------
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FORM MOR-1
(9/99)
In re Pathnet Inc. Case No. BK-01-12665
Debtor Reporting Period: April 30, 2001
BANK RECONCILIATIONS
CONTINUATION SHEET FOR MOR-1
A bank reconciliation must be included for each bank account. The debtor's bank reconciliation may be substituted for this page.
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Operating Payroll Medical Other
See Attachment
BALANCE PER BOOKS
BANK BALANCE
(+) DEPOSITS IN TRANSIT (ATTACH LIST)
(-) OUTSTANDING CHECKS (ATTACH LIST)
OTHER (ATTACH EXPLANATION)
ADJUSTED BANK BALANCE *
* Adjusted bank balance must equal
balance per books
DEPOSITS IN TRANSIT Date Amount Date Amount Date Amount Date Amount
CHECKS OUTSTANDING Ck. # Amount Ch. # Amount Ck. # Amount Ck. # Amount
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OTHER
FORM MOR-1 (CON'T)
(9/99)
In re Pathnet Inc. Case No. BK-01-12265
Debtor Reporting Period.: April 30, 2001
STATEMENT OF OPERATIONS
(Income Statement)
The Statement of Operations is to be prepared on an accrual basis. The accrual basis of accounting recognizes revenue when it is
realized and expenses when they are incurred, regardless of when cash is actually received or paid.
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CUMULATIVE
REVENUES MONTH FILING TO DATE
Gross Revenues 1,000,904 1,000,904
Less: Returns and Allowances
---------- -----------
Net Revenue $1,000,904 $1,000,904
---------- -----------
COST OF GOODS SOLD
Beginning Inventory
Add: Purchases
Add: Cost of Labor 277,444 277,444
Add: Other Costs (attach schedule) 317,205 317,205
Less: Ending Inventory
---------- -----------
Cost of Goods Sold 594,649 594,649
---------- -----------
Gross Profit $406,255 $406,255
OPERATING EXPENSES
Advertising
Auto and Truck Expense
Bad Debts
Contributions
Employee Benefits Programs 116,606 116,606
Insider Compensation* 108,335 108,335
Insurance 34,282 34,282
Management Fees/Bonuses
Office Expense 13,117 13,117
Pension & Profit-Sharing Plans
Repairs and Maintenance 2,188 2,188
Rent and Lease Expense 153,106 153,106
Salaries/Commissions/Fees 1,026,301 1,026,301
Supplies 961 961
Taxes - Payroll 83,180 83,180
Taxes - Real Estate 200,000 200,000
Taxes - Other 1,385 1,385
Travel and Entertainment 24,175 24,175
Utilities 37,909 37,909
Other (attach schedule) -722,446 -722,446
---------- -----------
Total Operating Expenses Before Depreciation 1,079,098 1,079,098
Depreciation/Depletion/Amortization -282,475 -282,475
---------- -----------
Net Profit (Loss) Before Other Income & Expenses ($955,317) ($955,317)
OTHER INCOME AND EXPENSES
Other Income (attach schedule) 317,596 317,596
Interest Expense -197,133 -197,133
Other Expense (attach schedule)
---------- -----------
Net Profit (Loss) Before Reorganization Items ($834,854) ($834,854)
REORGANIZATION ITEMS
Professional Fees 1,000,000 1,000,000
U. S. Trustee Quarterly Fees
Interest Earned on Accumulated Cash from Chapter 11 (see continuation sheet)
Gain (Loss) from Sale of Equipment
Other Reorganization Expenses (attach schedule)
---------- -----------
Total Reorganization Expenses 1,000,000 1,000,000
Income Taxes
---------- -----------
Net Profit (Loss) ($1,834,854) ($1,834,854)
---------- -----------
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*"Insider" is defined in 11 U.S.C. Section 101(31).
FORM MOR-2
(9/99)
In re Pathnet Inc._ Case No. BK-01-12265
Debtor Reporting Period: April 30, 2001
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STATEMENT OF OPERATIONS - CONTINUATION SHEET
CUMULATIVE
BREAKDOWN OF "OTHER" CATEGORY MONTH FILING TO DATE
OTHER COSTS
Lease expense (space, tower) & LEC Access charges 186,502 186,502
Maintenance 88,578 88,578
Utility 619 619
Warehousing costs 3,108 3,108
Intercompany allocations -126,651 -126,651
Other Costs 165,049 165,049
--------- ----------
TOTAL 317,205 317,205
--------- ----------
OTHER OPERATIONAL EXPENSES
Cheap Stock Amortization 170,402 170,402
Intercompany Allocation for Services preformed for Pathnet Operating -963,435 -963,435
Legal Expense/Accounting -4,687 -4,687
Misc Expense 449 449
Temporary Services 19,699 19,699
Bank Charges 15,126 15,126
PPE Reserve 40,000 40,000
--------- ----------
TOTAL -722,446 -722,446
--------- ----------
OTHER INCOME
Interest Income Texaco Escrow 1,310 1,310
Interest Income BN Escrow 13,077 13,077
Interest Income Bank of NY 709 709
Interest Income SunTrust investment account 54,275 54,275
Void Checks - other income 248,226 248,226
--------- ----------
TOTAL 317,596 317,596
--------- ----------
OTHER EXPENSES
OTHER REORGANIZATION EXPENSES
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REORGANIZATION ITEMS - INTEREST EARNED ON ACCUMULATED CASH FROM CHAPTER 11:
Interest earned on cash accumulated during the chapter 11 case, which would not have been earned but for the
bankruptcy proceeding, should be reported as a reorganization item.
FORM MOR-2 (CON'T)
(9/99)
In re Pathnet Inc. Case No. BK-01-12265
Debtor Reporting Period: April 30, 2001
BALANCE SHEET
The Balance Sheet is to be completed on an accrual basis only. Pre-petition liabilities must be classified separately from postpetition obligations.
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BOOK VALUE AT END OF BOOK VALUE ON
ASSETS CURRENT REPORTING MONTH PETITION DATE
CURRENT ASSETS
Unrestricted Cash and Equivalents 7,248,277 7,956,042
Restricted Cash and Cash Equivalents (see continuation sheet) 10,894,541 10,895,450
Accounts Receivable (Net) 2,245,256 1,845,880
Notes Receivable
Inventories
Prepaid Expenses 547,053 649,520
Professional Retainers 600,000 600,000
Other Current Assets (attach schedule) 126,257 105,016
------------- ------------
TOTAL CURRENT ASSETS 21,661,384 22,051,908
------------- ------------
PROPERTY AND EQUIPMENT
Real Property and Improvements 15,707,542 15,739,608
Machinery and Equipment
Furniture, Fixtures and Office Equipment 7,648,544 7,634,119
Leasehold Improvements 993,290 993,290
Vehicles
Less Accumulated Depreciation -4,570,591 -4,288,116
------------- ------------
TOTAL PROPERTY & EQUIPMENT 19,778,785 20,078,901
------------- ------------
OTHER ASSETS
Loans to Insiders* 131,043,310 130,182,166
Other Assets (attach schedule) 14,460,533 14,607,731
------------- ------------
TOTAL OTHER ASSETS 145,503,843 144,789,897
------------- ------------
TOTAL ASSETS 186,944,012 186,920,706
============= ===========
BOOK VALUE AT END OF BOOK VALUE ON
LIABILITIES AND OWNER EQUITY CURRENT REPORTING MONTH PETITION DATE
LIABILITIES NOT SUBJECT TO COMPROMISE (POSTPETITION)
Accounts Payable 397,013
Taxes Payable (refer to FORM MOR-4) 211,985
Wages Payable
Notes Payable
Rent / Leases - Building/Equipment 16,248
Secured Debt / Adequate Protection Payments
Professional Fees 1,000,000
Amounts Due to Insiders*
Other Postpetition Liabilities (attach schedule) 25,000
------------- ------------
TOTAL POSTPETITION LIABILITIES 1,650,246
LIABILITIES SUBJECT TO COMPROMISE (PRE-PETITION)
Secured Debt
Priority Debt
Unsecured Debt 387,854,375 387,652,191
Deferred Expense 638,987 632,984
Loans from insiders 7,983,195 7,983,195
------------- ------------
TOTAL PRE-PETITION LIABILITIES 396,476,557 396,268,370
------------- ------------
TOTAL LIABILITIES 398,126,803 396,268,370
OWNER EQUITY
Capital Stock 188,423 188,423
Additional Paid-In Capital 42,076,261 42,076,261
Partners' Capital Account
Owner's Equity Account
Retained Earnings - Pre-Petition -251,612,621 -251,612,621
Retained Earnings - Postpetition -1,834,854
Adjustments to Owner Equity (attach schedule)
Postpetition Contributions (Distributions) (Draws) (attach schedule)
------------- ------------
NET OWNER EQUITY -211,182,791 -209,347,937
------------- ------------
TOTAL LIABILITIES AND OWNERS' EQUITY 186,944,012 186,920,433
============= ============
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. FORM MOR-3
*"Insider" is defined in 11 U.S.C. Section 101(31). (9/99)
Certain reclassification have been made to 10Q numbers to conform to MO0 reporting
In re Pathnet Inc. Case No. BK-01-12265
Debtor Reporting Period: April 30, 2001
BALANCE SHEET - continuation sheet
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BOOK VALUE AT END OF BOOK VALUE ON
ASSETS CURRENT REPORTING MONTH PETITION DATE
Other Current Assets
Interest Receivable Suntrust Investment account 26,358 5,660
Employee Advances 2,578 3,377
Deposits 95,101 94,550
Other Misc 346 0
Petty Cash 1,874 1,157
----------- ------------
Total 126,257 104,743
----------- ------------
Other Assets
Deferred Financing Costs 13,787,138 13,950,146
Deferred Income- KN 673,395 657,585
----------- ------------
Total 14,460,533 14,607,731
----------- ------------
BOOK VALUE AT END OF BOOK VALUE ON
LIABILITIES AND OWNER EQUITY CURRENT REPORTING MONTH PETITION DATE
Other Postpetition Liabilities
PSI Net Deposit 25,000 0
----------- ------------
Total 25,000 0
----------- ------------
Adjustments to Owner Equity
Postpetition Contributions (Distributions) (Draws)
- ----------------------------------------------------------------------------------------------------------------
Restricted Cash: cash that is restricted for a specific use and not
available to fund operations. Typically, restricted cash is segregated into
a separate account, such as an escrow account. FORM MOR-3 (CON'T) (9/99)
FORM MOR-3(CONT)
((9/99)
In re Pathnet Inc. Case No. BK-01-12265
Debtor Reporting PerApril_30,_2001___________
STATUS OF POSTPETITION TAXES
The beginning tax liability should be the ending liability from the prior month or, if this is the first report, the amount should be zero.
Attach photocopies of IRS Form 6123 or payment receipt to verify payment or deposit of federal payroll taxes.
Attach photocopies of any tax returns filed during the reporting period.
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BEGINNING AMOUNT ENDING
TAX WITHHELD OR AMOUNT DATE CHECK NO. TAX
LIABILITY ACCRUED PAID PAID OR EFT LIABILITY
Federal
Withholding - 255,822 (255,822) 4/15&4/30 eft 0
FICA-Employee - 112,330 (112,330) 4/15&4/30 eft 0
FICA-Employer - 112,326 (112,326) 4/15&4/30 eft 0
Unemployment - 135 (135) 4/15&4/30 eft 0
Income
Other:_________________
-------- --------- ---------- ---------
Total Federal Taxes 480,614 (480,613) See Attach
-------- --------- ---------- ---------
STATE AND LOCAL
Withholding - 47,822 (47,822) 4/15&4/30 eft
Sales 24,303 (12,318) See Attach 11,985
Excise
Unemployment - 538 (538) 4/15&4/30 eft
Real Property
Personal Property - 200,100 (100) See Attach 200,000
Other: Income and Franchise taxes (9,080) See Attach
-------- --------- ---------- ---------
Total State and Local 272,763 (69,858)
-------- --------- ---------- ---------
TOTAL TAXES 753,376 (550,471) 211,985
-------- --------- ---------- ---------
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SUMMARY OF UNPAID POSTPETITION DEBTS
Attach aged listing of accounts payable.
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NUMBER OF DAYS PAST DUE
Current 0-30 31-60 61-90 Over 90 Total
Accounts Payable 397,013 397,013
Wages Payable
Taxes Payable
Rent/Leases-Building 16,248 16,248
Rent/Leases-Equipment
Secured Debt/Adequate Protection Payments
Professional Fees
Amounts Due to Insiders*
Other:__________________________
Other:__________________________
---------- ---------- ---------- ----------- ----------- --------
TOTAL POSTPETITION DEBTS 413,261 413,261
---------- ---------- ---------- ----------- ----------- --------
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EXPLAIN HOW AND WHEN THE DEBTOR INTENDS TO PAY ANY PAST-DUE POSTPETITION DEBTS.
*"Insider" is defined in 11 U.S.C. Section 101(31). FORM MOR-4
(9/99)
In re Pathnet Inc. Case No. BK-01-12265
Debtor Reporting PeApril_30,_2001____________
ACCOUNTS RECEIVABLE RECONCILIATION AND AGING
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ACCOUNTS RECEIVABLE RECONCILIATION AMOUNT
Total Accounts Receivable at the beginning of the reporting period $1,979,880
+ Amounts billed during the period $985,092
- - Amounts collected during the period $585,716
----------
Total Accounts Receivable at the end of the reporting period $2,379,256
----------
ACCOUNTS RECEIVABLE AGING AMOUNT
0 - 30 days old $801,841
31 - 60 days old $61,868
61 - 90 days old $320,466
91+ days old $1,195,081
----------
Total Accounts Receivable $2,379,256
Amount considered uncollectible (Bad Debt) $134,000
----------
Accounts Receivable (Net) $2,245,256
----------
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DEBTOR QUESTIONNAIRE
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MUST BE COMPLETED EACH MONTH YES NO
1. Have any assets been sold or transferred outside the normal course of business
this reporting period? If yes, provide an explanation below. no
2. Have any funds been disbursed from any account other than a debtor in possession
account this reporting period? If yes, provide an explanation below. no
3. Have all postpetition tax returns been timely filed? If no, provide an explanation
below. N/A
4. Are workers compensation, general liability and other necessary insurance
coverages in effect? If no, provide an explanation below. yes
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N/A no postpetition tax returns due at Arpil 30, 2001
FORM MOR-5
(9/99)
