UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF VIRGINIA
In re: Pathnet Operating, Inc CASE NO. BK-01-12266
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 no
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 yes
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 OPERATING INC CASE NO. BK-01-12266
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)]
- ---------------------------------------------------------------------------------------------------------------------------
BANK ACCOUNTS CURRENT MONTH CUMULATIVE FILING TO DATE
OPER. PAYROLL TAX OTHER ACTUAL PROJECTED ACTUAL PROJECTED
CASH BEGINNING OF MONTH 6,472,893 -205,193 6,914,600 13,182,300 0 13,182,300 0
--------- --------- ------- ---------- ----------- ----------- ------------- ------------
RECEIPTS
CASH SALES 0 0 0
ACCOUNTS RECEIVABLE 871,990 871,990 756,613 871,990 756,613
LOANS AND ADVANCES 0 0 0
SALE OF ASSETS 0 0 0
OTHER (ATTACH LIST) 15,320 15,320 15,320 0
TRANSFERS from checking 6,000,000 6,000,000 6,000,000 0
ADJUSTMENTS 117,961 117,961 117,961 0
VOID CHECKS 48,509 48,509 48,509 0
INTEREST INCOME 65,208 65,208 0 65,208 0
--------- --------- ------- ---------- ----------- ----------- ------------- ------------
TOTAL RECEIPTS 1,038,460 0 0 6,080,528 7,118,988 756,613 7,118,988 756,613
--------- --------- ------- ---------- ----------- ----------- ------------- ------------
DISBURSEMENTS
NET PAYROLL 0 0 0
PAYROLL TAXES 0 0 0
SALES, USE, & OTHER TAXES 0 0 0
INVENTORY PURCHASES 0 0 0
SECURED/ RENTAL/ LEASES 0 -1,333,432 0 -1,333,432
INSURANCE 0 0 0
ADMINISTRATIVE *** -5,563 -5,563 -122,500 -5,563 -122,500
SELLING 0 0 0
OTHER (ATTACH LIST) 0 0 0
INTERCOMPANY SERVICES 0 -633,114 0 -633,114
CAPITAL EXPENDITURES -76,000 -76,000
OWNER DRAW * 0 0 0
TRANSFERS-to investments -6,000,000 -6,000,000 -6,000,000 0
0 0 0
PROFESSIONAL FEES 0 0 0
U.S. TRUSTEE QUARTERLY FEES 0 0 0
COURT COSTS 0 0 0
--------- --------- ------- ---------- ----------- ----------- ------------- ------------
TOTAL DISBURSEMENTS -6,000,000 -5,563 -6,005,563 -2,165,046 -6,005,563 -2,165,046
--------- --------- ------- ---------- ----------- ----------- ------------- ------------
NET CASH FLOW -4,961,540 -5,563 6,080,528 1,113,425 -1,408,433 1,113,425 -1,408,433
(RECEIPTS LESS DISBURSEMENTS)
--------- --------- ------- ---------- ----------- ----------- ------------- ------------
CASH - END OF MONTH 1,511,353 -210,756 12,995,128 14,295,725 -1,408,433 14,295,725 -1,408,433
--------- --------- ------- ---------- ----------- ----------- ------------- ------------
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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 $
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 $
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FORM MOR-1
(9/99)
*** represents no cash disbursement, all funds disbursed from Pathnet Inc payroll activity
In re: Pathnet Operating Inc Case No. BK-01-12266
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 Tax Other
# # # #
BALANCE PER BOOKS See Attachment
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 Operating Inc
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 449,687 449,687
Less: Returns and Allowances -
---------- -----------
Net Revenue 449,687 449,687
---------- -----------
COST OF GOODS SOLD
Beginning Inventory
Add: Purchases
Add: Cost of Labor
Add: Other Costs (attach schedule) 1,617,938 1,617,938
Less: Ending Inventory
Cost of Goods Sold
Gross Profit (1,168,251) (1,168,251)
OPERATING EXPENSES
Advertising
Auto and Truck Expense
Bad Debts
Contributions
Employee Benefits Programs
Insider Compensation*
Insurance
Management Fees/Bonuses
Office Expense
Pension & Profit-Sharing Plans
Repairs and Maintenance
Rent and Lease Expense
Salaries/Commissions/Fees
Supplies
Taxes - Payroll
Taxes - Real Estate
Taxes - Other
Travel and Entertainment
Utilities
Other (attach schedule) 962,102 962102
---------- -----------
Total Operating Expenses Before Depreciation 962,102 962,102
Depreciation/Depletion/Amortization 1,487,623 1,487,623
---------- -----------
Net Profit (Loss) Before Other Income & Expenses (3,617,976) (3,617,976)
OTHER INCOME AND EXPENSES
Other Income (attach schedule) 43,432 43,432
Interest Expense (715,347) (715,347)
Other Expense (attach schedule) (44,680) (44,680)
---------- -----------
Net Profit (Loss) Before Reorganization Items (4,334,571) (4,334,571)
REORGANIZATION ITEMS
Professional Fees 500,000 500,000
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 500,000 500,000
Income Taxes
---------- -----------
Net Profit (Loss) (4,834,571) (4,834,571)
---------- -----------
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*"Insider" is defined in 11 U.S.C. Section 101(31).
FORM MOR-2
(9/99)
In re: Pathnet Operating Inc Case No: BK-01-012266
Debtor Reporting Period: April 30, 2001
STATEMENT OF OPERATIONS - CONTINUATION SHEET
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CUMULATIVE
BREAKDOWN OF "OTHER" CATEGORY MONTH FILING TO DATE
OTHER COSTS
Lease expense, Cost alliance program, LEC Access charges 1,373,624 1,373,624
Network maintenance 78,522 78,522
Warehousing costs 18,898 18,898
Head End Connection 15,585 15,585
Utility charges 5,358 5,358
Intercompany allocations - network management - cost of sales 126,651 126,651
---------- -----------
1,618,638 1,618,638
---------- -----------
OTHER OPERATIONAL EXPENSES
Bank charges 111 111
Office supplies -32 -32
General and administrative expenses (intercompany allocations) 963,435 963,435
Licenses and fees -1,411 -1,411
---------- -----------
962,103 962,103
---------- -----------
OTHER INCOME
Interest income 43,432 43,432
OTHER EXPENSES
Bad debt reserve 20,000 20,000
PPE reserve 40,000 40,000
PGE write off adjustment -15,320 -15,320
---------- -----------
44,680 44,680
---------- -----------
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 Operating Inc Case No. BK-01-12266
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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ASSETS BOOK VALUE AT BOOK VALUE
END OF CURRENT ON PETITION
REPORTING MONTH DATE
CURRENT ASSETS
Unrestricted Cash and Equivalents 14,295,725 13,182,300
Restricted Cash and Cash Equivalents (see continuation sheet) 735,523 764,619
Accounts Receivable (Net) 2,821,071 3,518,969
Notes Receivable
Inventories
Prepaid Expenses 109,072 110,978
Professional Retainers 806,190 806,190
Other Current Assets (attach schedule) 28,506 52,505
------------- -------------
TOTAL CURRENT ASSETS 18,796,087 18,435,561
------------- -------------
PROPERTY AND EQUIPMENT
Real Property and Network Assets 217,798,017 217,534,241
Machinery and Equipment
Furniture, Fixtures and Office Equipment
Leasehold Improvements
Vehicles
Less Accumulated Depreciation (7,597,342) (6,109,720)
------------- -------------
TOTAL PROPERTY & EQUIPMENT 210,200,675 $ 211,424,521
------------- -------------
OTHER ASSETS
Loans to Insiders*
Other Assets (attach schedule) 8,027,837 8,106,883
TOTAL OTHER ASSETS 8,027,837 8,106,883
------------- -------------
TOTAL ASSETS 237,024,598 237,966,965
============= ============
LIABILITIES AND OWNER EQUITY BOOK VALUE AT BOOK VALUE
END OF CURRENT ON PETITION
REPORTING MONTH DATE
LIABILITIES NOT SUBJECT TO COMPROMISE (Postpetition)
Accounts Payable 1,020,039
Taxes Payable (refer to FORM MOR-4) 6,204
Wages Payable
Notes Payable
Rent / Leases - Building/Equipment 67,658
Secured Debt / Adequate Protection Payments 636,302
Professional Fees 500,000
Amounts Due to Insiders* 862,290 0
Other Postpetition Liabilities (attach schedule) 75,000 0
------------ ------------
TOTAL POSTPETITION LIABILITIES 3,167,493 0
------------ ------------
LIABILITIES SUBJECT TO COMPROMISE (Pre-Petition)
Secured Debt 72,307,506 72,307,506
Priority Debt
Unsecured Debt 41,685,520 40,038,028
Deferred Revenue 4,785,800 4,828,981
Amounts Due to Insiders* 1,887,199 2,766,799
TOTAL PRE-PETITION LIABILITIES 120,666,025 119,941,314
------------ ------------
TOTAL LIABILITIES 123,833,518 119,941,314
------------ ------------
OWNER EQUITY
Capital Stock 1 1
Additional Paid-In Capital
Partners' Capital Account
Owner's Equity Account
Retained Earnings - Pre-Petition 118,025,650 118,025,650
Retained Earnings - Postpetition (4,834,571)
Adjustments to Owner Equity (attach schedule)
Postpetition Contributions (Distributions) (Draws) (attach schedule)
NET OWNER EQUITY 113,191,080 118,025,651
------------ ------------
TOTAL LIABILITIES AND OWNERS' EQUITY 237,024,598 237,966,965
============ ============
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FORM MOR-3
*"Insider" is defined in 11 U.S.C. Section 101(31). (9/99)
Certain reclassification of 10Q amounts have been made to conform to MOR reporting
In re: Pathnet Operating Inc Case No. BK-01-12266
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 28,506 52,505
Other Assets
Financing costs - net 3,045,362 3,124,408
ROW Intangibles 4,982,475 4,982,475
----------- -----------
8,027,837 8,106,883
----------- -----------
BOOK VALUE AT END OF BOOK VALUE ON
LIABILITIES AND OWNER EQUITY CURRENT REPORTING MONTH PETITION DATE
Other Postpetition Liabilities
Accrued Maintenance 75,000
-----------
75,000
-----------
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)
In re: Pathnet Operating Inc Case No. BK-01-12264
Debtor Reporting Period: April 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
FICA-Employee
FICA-Employer
Unemployment
Income
Other:_________________
Total Federal Taxes
STATE AND LOCAL
Withholding
--------- ----------- -------- -------
Sales - 4,760 - 4,760
Excise
Unemployment
Real Property
Personal Property
Other:_________________ 1,444 1,444
Total State and Local 6,204 6,204
--------- ----------- -------- -------
TOTAL TAXES 6,204 6,204
--------- ----------- -------- -------
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SUMMARY OF UNPAID POSTPETITION DEBTS
Attach aged listing of accounts payable.
- ------------------------------------------------------------------------------------------------------------------------
NUMBER OF DAYS PAST DUE
Current 0-30 31-60 61-90 Over 90 Total
Accounts Payable 1,020,039 - 1,020,039
Wages Payable
Taxes Payable 6,204 - 6,204
Rent/Leases-Building 67,658 - 67,658
Rent/Leases-Equipment
Secured Debt/Adequate Protection Payments
Professional Fees
Amounts Due to Insiders*
Other:__________________________
Other:__________________________
--------- ---------
TOTAL POSTPETITION DEBTS 1,093,901 1,093,901
--------- ---------
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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 Operating Inc Case No: BK 01-12264
Debtor Reporting Period: April 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 $3,518,969
+ Amounts billed during the period $435,187
- - Amounts collected during the period $1,053,087
----------
Total Accounts Receivable at the end of the reporting period $2,901,069
----------
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
ACCOUNTS RECEIVABLE AGING AMOUNT
0 - 30 days old $26,690
31 - 60 days old $1,372,694
61 - 90 days old $8,524
91+ days old $1,493,161
Total Accounts Receivable $2,901,069
Amount considered uncollectible (Bad Debt) 80,000
Accounts Receivable (Net) $2,821,071
- ------------------------------------------------------------------------------------------------------------------------
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. X
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. X
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. X
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NO POSTPETITION TAX RETURNS DUE AT APRIL 30, 2001
FORM MOR-5
(9/99)