Ha2003 8-K Halo Industries Completes the Sale of Its Troy, Mi and Canadian Operations

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Exhibit 99.2

HALO Industries, Inc.
July 2002

Case #02 B 12059 (HALO Industries DIP)

Exhibit A—Consolidated HALO DIP

MOR#1—Cash Receipts & Disbursements

In reHALO Industries, Inc.	Case No.02 B 12059
Debtor	Reporting Period:July 2002

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 (CONT)]

	BANK ACCOUNTS				CURRENT MONTH		CUMULATIVE FILING TO DATE
	OPER	PAYROLL	TAX	OTHER	ACTUAL	PROJECTED	ACTUAL	PROJECTED
CASH BEGINNING OF MONTH
RECEIPTS
CASH SALES
ACCOUNTS RECEIVABLE
LOANS AND ADVANCES
SALE OF ASSETS
OTHER(ATTACH LIST)
TRANSFERS(FROM DIP ACCTS)
TOTAL RECEIPTS
DISBURSEMENTS
NET PAYROLL
PAYROLL TAXES
SALES, USE & OTHER TAXES
INVENTORY PURCHASES
SECURED/RENTAL/LEASES
INSURANCE
ADMINISTRATIVE
SELLING
OTHER(ATTACH LIST)
OWNER DRAW*
TRANSFERS(TO DIP ACCTS)
PROFESSIONAL FEES
U.S. TRUSTEE QUARTERLY FEES
COURT COSTS
TOTAL DISBURSEMENTS
NET CASH FLOW (RECEIPTS LESS DISBURSEMENT)
CASH—END OF MONTH

* COMPENSATION TO SOLE PROPRIETORS FOR SERVICES RENDERED TO BANKRUPTCY ESTATE

THE FOLLOWING SECTION MUST BE COMPLETED

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		$

FORM MOR-1
(9/99)

See Exhibit "A"

HALO INDUSTRIES—DIP		Actual July	Budget July		Variance Fav/(Unfav)
CASH FLOW PROJECTIONS FOR THE MONTH ENDING
A/R CASH RECEIPTS		6,798	7,388		(590	)
DCP REDEMPTION		—	—		—
PROGRAM LIQUIDATION COLLECTIONS		—	—		—
PROCEEDS FROM SALE & C/R OTHER		4,415	5,061		(646	)
TOTAL CASH RECEIPTS		11,213	12,449		(1,236	)
CASH REQUIREMENTS
PRODUCT		4,437	6,029		1,592
SUPPLIER DEPOSIT		—	—		—
PREPAYMENTS		—	(450	)	(450	)
SELLING EXPENSE
COMMISSIONS		733	788		55
WAGES		33	75		42
SEVERANCE		—	1		1
PAYROLL TAX		28	66		38
SALES ASST.		—	—		—
SAMPLE EXPENSE		26	22		(5	)
MARKETING EXP		—	—		—
CATALOGS		6	10		5
ADVERTISING		—	0		0
AUTOMOBILE		—	—		—
TRAVEL		—	0		0
MEALS & ENT.		—	—		—
PROMOTION & BUS. EXP.		—	1		1
EXHIBITS & SHOWS		0	1		0
NATIONAL MEETING EXP.		—	—		—
REGIONAL EXP MEETING		—	0		0
REBATE, ROYALTIES & REFUNDS		65	25		(40	)
RECRUITING EXPENSE		—	—		—
MONTHLY ALLOWANCE		—	2		2
	TOTAL SELLING	891	991		100
G&A EXPENSES
WAGES		440	368		(72	)
WAGES — SEVERANCE		114	141		27
RETENTION BONUS		3	—		(3	)
TEMP HELP		40	1		(39	)
SALARY — OTHER		—	—		—
PAYROLL TAXES		29	39		10
EMPLOYEE BONUS		—	—		—
EDUCATION/TRAINING		0	—		(0	)
401K EXP		—	3		3
GROUP INSURANCE		1	(13	)	(14	)
SELF INSURANCE CLAIMS		85	460		375
LIFE INSURANCE		—	—		—
OTHER EMPLOYEE BENEFITS		—	—		—
TRAVEL		19	8		(11	)
M&E		7	4		(3	)
AUTO EXP		0	—		(0	)
RENT EXPENSE		308	600		292
RENT ADD ON EXP		10	4		(6	)
UTILITIES		6	2		(4	)
R&M & CAP EX		7	1		(6	)
ALARM SERVICE		0	—		(0	)
MOVING EXP		—	—		—
EQUIP RENTAL		6	5		(2	)
REAL ESTATE TAXES		—	—		—
TELEPHONE		110	51		(59	)
TELEPHONE REPAIRS		8	3		(5	)
FREIGHT HOUSE		35	7		(27	)
POSTAGE		1	4		3

COLLECTION EXP		1	2		1
BANK/CREDIT CARD FEES		53	147		93
OFFICE EXP		1	5		4
PRINTING/STATIONARY		1	7		6
DUES & SUBS		8	0		(8	)
DATA LINES		36	11		(25	)
COMPUTER SUPPLIES		2	1		(1	)
COMPUTER SUPPORT		10	22		12
OFFICE SUPPLIES		16	6		(10	)
ART SUPPLIES		—	0		0
SHOP SUPPLIES		0	—		(0	)
SHIPPING SUPPLIES		12	7		(4	)
PROFESSIONAL FEES		1,090	870		(219	)
GEN LIAB & PROPERTY		—	—		—
PUBLIC COMPANY EXPENSES		1	—		(1	)
BUS LICENSES & FEES		14	16		2
USE TAX/SALES TAX		195	330		135
TAX PENALTIES		—	—		—
CONTRIBUTIONS		—	1		1
INTEREST		0	46		46
MISCELLANEOUS		—	9		9
MANAGEMENT FEE/(RECEIPT)		—	(475	)	(475	)
	TOTAL G&A	2,668	2,690		21
TOTAL CASH DISBURSEMENTS		7,996	9,259		1,263
NET CASH FLOW		3,217	3,190		27

HALO Industries, Inc.
July 2002

Case #02 B 12059 (HALO Industries DIP)

Exhibit E—Consolidated Statement of Operations (MOR#2)

HALO DIP
STATEMENT OF OPERATIONS
(Income Statement)
July 31, 2002

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.

REVENUES	Month			Cumulative Filing to Date
Gross Revenues	$	2,776,677		$	130,865,198
Less: Returns and Allowances		—			(83	)
Net Revenue	$	2,776,677		$	130,865,114
COST OF GOODS SOLD
Beginning Inventory
Add: Purchases
Add Cost of Labor
Add Other Costs
Less Ending inventory
Cost of Goods Sold		1,820,399			94,638,430
Gross Profit		956,279			36,226,684
OPERATING EXPENSES
Advertising		—			124,625
Auto and Truck Expenses		852			45,463
Bad Debts		13,411			464,955
Contributions
Employee Benefits Programs		213,183			3,228,458
Insider Compensation*		356,500			23,042,337
Insurance		26,690			631,262
Management Fee/Bonuses		3,290			1,890,142
Office Expense		7,556			269,347
Pension & Profit Sharing Plans
Repairs and Maintenance		1,729			533,786
Rent and Lease Expense		541,891			6,411,502
Salaries/Commission/Fees		559,414			14,104,333
Supplies		3,848			530,055
Taxes — Payroll		31,814			1,054,682
Taxes — Real Estate
Taxes — Other		196,825			538,799
Travel and Entertainment		16,289			825,709
Utilities		4,794			369,828
Other(attach schedule)		349,239			12,284,477
Total Operating Expenses Before Depreciation		2,327,325			66,349,761
Depreciation/Depletion/Amortization		369,363			5,105,723
Net Profit (Loss) Before Other Income & Expenses		(1,740,409	)		(35,228,800	)
OTHER INCOME & EXPENSES
Other Income(attach schedule)		18,913			(57,227	)
Interest Expense		443,199			5,475,288
Other Expense(attach schedule)		—			—
Net Profit (Loss) Before Reorganization Items		(1,278,298	)		(29,810,739	)
REORGANIZATION ITEMS
Professional Fees		1,507,486			9,909,716
US Trustee Quarterly Fees
Interest Earned on Accumulated Cash from Chapter 11
Gain(Loss) from sale of Equipment		—			(231,889	)
Other Reorganization Expenses(attach schedule)		300			3,977,511
Total Reorganization Expenses		1,507,786			13,655,338
Income Taxes		—			—
Net Profit (Loss)	$	(2,786,084	)	$	(43,466,077	)

* "Insider" is defined in 11 U.S.C. Section 101(31).

HALO DIP
STATEMENT OF OPERATIONS — continuation sheet
July 31, 2002

BREAKDOWN OF "OTHER" CATEGORY	Month	Cumulative Filing to Date
Other Costs
Sample expense	—	27,216
Sample amortization	4,526	662,043
Marketing	—	10,472
Catalogs	27,240	5,357,981
Promotion and business development	—	23,786
Exhibit & show expenses	13,831	199,288
National meeting expense	—	—
Regional meeting expense	—	3,500
Royalty fees	35,375	323,261
Recruiting expense	—	503
Telemarketing — phone	—	4,308
Other selling expenses	—	(1	)
Intercompany Selling Expense	—	—
Telephone / facsimile	87,592	2,357,949
Postage and freight	43,976	1,711,041
Bank fees / credit card charges	72,942	938,630
Computer expenses	11,008	548,583
Public company expenses	48,929	574,192
Other	3,821	4,580,296
Allocation Exp	—	(5,038,571	)
Total Other	349,239	12,284,477

Events by HA-LO
STATEMENT OF OPERATIONS
(Income Statement)
July 31, 2002

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.

REVENUES	Month			Cumulative Filing to Date
Gross Revenues	$	8,958		$	2,249,462
Less: Returns and Allowances		—			—
Net Revenue	$	8,958		$	2,249,462
COST OF GOODS SOLD
Beginning Inventory
Add: Purchases
Add Cost of Labor
Add Other Costs
Less Ending inventory
Cost of Goods Sold		11,464			1,348,521
Gross Profit		(2,506	)		900,941
OPERATING EXPENSES
Advertising		—			—
Auto and Truck Expenses		500			6,000
Bad Debts		—			—
Contributions
Employee Benefits Programs		3,503			59,545
Insider Compensation*		(468	)		262,742
Insurance		—			—
Management Fee/Bonuses		—			—
Office Expense		499			2,817
Pension & Profit Sharing Plans
Repairs and Maintenance		—			—
Rent and Lease Expense		—			6,811
Salaries/Commission/Fees		17,846			457,531
Supplies		84			750
Taxes — Payroll		2,410			52,402
Taxes — Real Estate
Taxes — Other		—			—
Travel and Entertainment		3,632			8,901
Utilities		—			—
Other(attach schedule)		11,691			132,571
Total Operating Expenses Before Depreciation		39,697			990,070
Depreciation/Depletion/Amortization		—			—
Net Profit (Loss) Before Other Income & Expenses		(42,203	)		(89,130	)
OTHER INCOME & EXPENSES
Other Income(attach schedule)		—			—
Interest Expense		14,401			196,782
Other Expense(attach schedule)		—			—
Net Profit (Loss) Before Reorganization Items		(27,802	)		107,652
REORGANIZATION ITEMS
Professional Fees		—			—
US Trustee Quarterly Fees
Interest Earned on Accumulated Cash from Chapter 11
Gain(Loss) from sale of Equipment		—			—
Other Reorganization Expenses(attach schedule)		—			—
Total Reorganization Expenses		—			—
Income Taxes		—			—
Net Profit (Loss)	$	(27,802	)	$	107,652

* "Insider" is defined in 11 U.S.C. Section 101(31).

Events by HA-LO
STATEMENT OF OPERATIONS — continuation sheet
July 31, 2002

BREAKDOWN OF "OTHER" CATEGORY	Month	Cumulative Filing to Date
Other Costs
Sample expense	—	—
Sample amortization	—	—
Marketing	—	—
Catalogs	—	—
Promotion and business development	—	—
Exhibit & show expenses	—	—
National meeting expense	—	—
Regional meeting expense	—	—
Royalty fees	—	—
Recruiting expense	—	—
Telemarketing - phone	—	—
Other selling expenses	—	—
Intercompany Selling Expense	—	—
Telephone / facsimile	777	5,922
Postage and freight	456	1,084
Bank fees / credit card charges	42	(1,447	)
Computer expenses	—	2,012
Public company expenses	—	—
Other	—	0
Allocation Exp	10,417	125,000
Total Other	11,691	132,571

HALO Industries, Inc.
July 2002

Case #02 B 12059 (HALO Industries DIP)

Exhibit F—Consolidated Balance Sheet (MOR#3)

HALO DIP
BALANCE SHEET
July 31, 2002

The Balance Sheet is to be completed on an accrual basis only. Pre-petition liabilities must be classified separately from postpetition obligations.

ASSETS	Book Value at End Of Current Reporting Month			Book Value on Petition Date
CURRENT ASSETS
Unrestricted Cash and Equivalents		408,760			1,207,623
Restricted Cash and Cash Equivalents (see continuation sheet)
Accounts Receivable		5,651,678			47,810,047
Notes Receivable		—			—
Inventories		1,728,688			12,658,204
Prepaid Expenses		2,365,823			7,755,134
Professional Retainers
Other Current Assets(attach schedule)		193,365,431			192,206,777
TOTAL CURRENT ASSETS	$	203,520,380		$	261,637,784
PROPERTY AND EQUIPMENT
Real Property and Improvements		272,716			3,942,889
Machinery and Equipment		15,206,853			16,998,197
Furniture, Fixtures and Office Equipment		4,368,990			9,717,576
Leasehold Improvements		2,249,674			4,153,447
Vehicles		16,467			77,208
Less Accumulated Depreciation		(14,284,311	)		(16,663,533	)
TOTAL PROPERTY & EQUIPMENT	$	7,830,389		$	18,225,785
OTHER ASSETS
Loans to Insiders
Other Assets(attach schedule)		230,290,901			233,583,342
TOTAL OTHER ASSETS	$	230,290,901		$	233,583,342
TOTAL ASSETS	$	441,641,671		$	513,446,911

LIABILITIES AND OWNER EQUITY	Book Value at End Of Current Reporting Month			Book Value on Petition Date
LIABILITIES NOT SUBJECT TO COMPROMISE (Postpetition)
Accounts Payable		6,502,496			27,060,128
Taxes Payable (refer to FORM MOR-4)		(11,432,429	)		(11,489,445	)
Wages Payable		2,255,616			8,197,012
Notes Payable
Rent / Leases — Building/Equipment
Professional Fees
Amounts Due Insiders
Other Postpetition Liabilities (attach schedule)		19,389,573			47,213,511
TOTAL POSTPETITION LIABILITIES	$	16,715,255		$	70,981,206
LIABILITIES SUBJECT TO COMPROMISE (Pre-petition)
Secured Debt
Priority Debt
Unsecured Debt		27,707,518			—
TOTAL PRE-PETITION LIABILITIES	$	27,707,518		$	—
TOTAL LIABILITIES	$	44,422,773		$	70,981,206
OWNER EQUITY
Capital Stock		470,592,994			470,592,994
Additional Paid in Capital		—			—
Partners' Capital Account
Owners Equity Account
Retained Earnings — Pre-Petition		(52,961,304	)		(18,714,695	)
Retained Earnings — Postpetition		(17,306,353	)		(27,067,242	)
Adjustments to Owners Equity (attach schedule)		(3,106,439	)		17,654,646
Postpetition Contributions (Distributions) (Draws) (attach schedule)		—
NET OWNER EQUITY	$	397,218,898		$	442,465,703
TOTAL LIABILITIES AND OWNER'S EQUITY	$	441,641,671		$	513,446,909

* "Insider" is defined in 11 U.S.C. Section 101(31).

HALO DIP
BALANCE SHEET — continuation sheet
July 31, 2002

ASSETS	Book Value at End Of Current Reporting Month		Book Value on Petition Date
Other Current Assets
S/T Investments	—		—
Intercompany Receivable (Payable)	193,365,431		192,206,777
Other Current Assets	193,365,431		192,206,777
Other Assets
Intangible Assets	9,778,473		14,051,075
Officer advances	(3,036	)	30,938
Sample Inventory	6,680		6,680
Marketable securities	24,747		25,000
Note receivable	2,207,008		(23	)
CSV — Life insurance	12,000		1,202,742
Security deposits	369,883		287,341
Other assets — miscellaneous	(5,755	)	5,748
Deferred taxes — non current	2,717,076		2,717,076
Investments	215,183,826		215,256,766
Other Assets	230,290,901		233,583,342

LIABILITIES AND OWNERS EQUITY	Book Value at End Of Current Reporting Month		Book Value on Petition Date
Other Postpetition Liabilities
Current maturities of long-term debt	—		—
Book overdraft	—		—
Accounts payable-unvouchered receipts	1,270,329		574,217
Accounts payable — rebates receivable	(1,218,236	)	(1,314,249	)
Accounts payable — manual	3,883,501		9,916,853
Customer deposit	386,950		4,882,994
Accrued interest	4,742		4,742
Accrued WIP costs	(34,995	)	—
Accrued expenses other	7,585,049		6,375,859
Due to Related Parties	15,000		—
Deferred Taxes — current	972,278		972,278
S/T Restructuring Reserve	6,299,576		9,213,061
Term loans	—		—
Line of credit	167,110		15,272,006
Capital lease obligations	—		—
Deferred rent	284		—
Deferred compensation	37,530		1,295,295
Deferred liabilities — other	20,455		20,455
Deferred payments — acquisitions	—		—
Deferred taxes — non current	—		—
Reserve for Restructuring	—		—
Other Postpetition Liabilities	19,389,573		47,213,511
Adjustments to Owner Equity
Unamortized compensation — SE	(935,620	)	(1,035,620	)
Cumulative translation adjustment	(1,276,711	)	(290,092	)
CTA — forecast category only	—		—
Retained Earnings — Other	(894,108	)	18,980,358
Adjustments to Owner Equity	(3,106,439	)	17,654,646

Events by HA-LO
BALANCE SHEET
July 31, 2002

The Balance Sheet is to be completed on an accrual basis only. Pre-petition liabilities must be classified separately from postpetition obligations.

ASSETS	Book Value at End Of Current Reporting Month			Book Value on Petition Date
CURRENT ASSETS
Unrestricted Cash and Equivalents		(34,525	)		3,318
Restricted Cash and Cash Equivalents (see continuation sheet)
Accounts Receivable		29,517			773,836
Notes Receivable		—			—
Inventories		—			—
Prepaid Expenses		187,321			46,415
Professional Retainers
Other Current Assets(attach schedule)		2,080,510			2,336,788
TOTAL CURRENT ASSETS	$	2,262,823		$	3,160,358
PROPERTY AND EQUIPMENT
Real Property and Improvements		—			—
Machinery and Equipment		—			—
Furniture, Fixtures and Office Equipment		—			—
Leasehold Improvements		—			—
Vehicles		—			—
Less Accumulated Depreciation		—			—
TOTAL PROPERTY & EQUIPMENT	$	—		$	—
OTHER ASSETS
Loans to Insiders
Other Assets(attach schedule)		(10,504	)		—
TOTAL OTHER ASSETS	$	(10,504	)	$	—
TOTAL ASSETS	$	2,252,319		$	3,160,358

LIABILITIES AND OWNER EQUITY	Book Value at End Of Current Reporting Month			Book Value on Petition Date
LIABILITIES NOT SUBJECT TO COMPROMISE (Postpetition)
Accounts Payable		(46,393	)		—
Taxes Payable (refer to FORM MOR-4)		—			—
Wages Payable		10,841			508,022
Notes Payable
Rent / Leases — Building/Equipment
Professional Fees
Amounts Due Insiders
Other Postpetition Liabilities (attach schedule)		196,824			715,335
TOTAL POSTPETITION LIABILITIES	$	161,272		$	1,223,356
LIABILITIES SUBJECT TO COMPROMISE (Pre-petition)
Secured Debt
Priority Debt
Unsecured Debt		46,393			—
TOTAL PRE-PETITION LIABILITIES	$	46,393		$	—
TOTAL LIABILITIES	$	207,664		$	1,223,356
OWNER EQUITY
Capital Stock		—			—
Additional Paid in Capital		—			—
Partners' Capital Account
Owners Equity Account
Retained Earnings — Pre-Petition		2,128,661			1,581,035
Retained Earnings — Postpetition		(84,007	)		355,967
Adjustments to Owners Equity (attach schedule)		—			—
Postpetition Contributions (Distributions) (Draws) (attach schedule)		—
NET OWNER EQUITY	$	2,044,654		$	1,937,002
TOTAL LIABILITIES AND OWNER'S EQUITY		2,252,318		$	3,160,358

* "Insider" is defined in 11 U.S.C. Section 101(31).

Events by HA-LO
BALANCE SHEET — continuation sheet
July 31, 2002

ASSETS	Book Value at End Of Current Reporting Month		Book Value on Petition Date
Other Current Assets
S/T Investments	—		—
Intercompany Receivable (Payable)	2,080,510		2,336,788
Other Current Assets	2,080,510		2,336,788
Other Assets
Intangible Assets	—		—
Officer advances	—		—
Sample Inventory	—		—
Marketable securities	—		—
Note receivable	—		—
CSV — Life insurance	—		—
Security deposits	—		—
Other assets — miscellaneous	(10,504	)	—
Deferred taxes — non current	—		—
Investments	—		—
Other Assets	(10,504	)	—

LIABILITIES AND OWNERS EQUITY	Book Value at End Of Current Reporting Month	Book Value on Petition Date
Other Postpetition Liabilities
Current maturities of long-term debt	—	—
Book overdraft	—	—
Accounts payable-unvouchered receipts	—	—
Accounts payable — rebates receivable	—	—
Accounts payable — manual	18,424	15,146
Customer deposit	178,400	700,189
Accrued interest	—	—
Accrued WIP costs	—	—
Accrued expenses other	—	—
Due to Related Parties	—	—
Deferred Taxes — current	—	—
S/T Restructuring Reserve	—	—
Term loans	—	—
Line of credit	—	—
Capital lease obligations	—	—
Deferred rent	—	—
Deferred compensation	—	—
Deferred liabilities — other	—	—
Deferred payments — acquisitions	—	—
Deferred taxes — non current	—	—
Reserve for Restructuring	—	—
Other Postpetition Liabilities	196,824	715,335
Adjustments to Owner Equity
Unamortized compensation — SE	—	—
Cumulative translation adjustment	—	—
CTA — forecast category only	—	—
Retained Earnings — Other	—	—
Adjustments to Owner Equity	—	—

HALO Industries, Inc.
July 2002

Case #02 B 12059 (HALO Industries DIP)

Exhibit G—Schedule of Consolidated Post-Petition Tax Filings & Tax Payments (MOR#4)

In reHALO Industries, Inc.	Case No.02 B 12059
Debtor	Reporting Period:July 2002

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.

		Beginning Tax Liability	Amount Withheld or Accrued	Amount Paid	Date Paid	Check No. or EFT	Tax Ending Liability
Federal
Withholding
FICA—Employee
FICA—Employer
Unemployment
Income
Other:
	Total Federal Taxes
State and Local
Withholding
Sales
Excise
Unemployment
Real Property
Personal Property
Other:
	Total State and Local
Total Taxes

See Exhibit G

SUMMARY OF UNPAID POSTPETITION DEBTS

Attach aged listing of accounts payable.

See Exhibit H1-H4

		Number of Days Past Due
	Current	0-30	31-60	61-90	Over 90	Total
Accounts Payable
Wages Payable
Taxes Payable
Rent/Leases-Building
Rent/Leases-Equipment
Secured Debt/Adequate Protection Payments
Professional Fees
Amounts Due to Insiders*
Other:
Other:
Total Postpetition Debts

Explain how and when the Debtor intends to pay any past-due postpetition debts.

        Current vendor payments terms are Net 7 from receipt date of invoice.

FORM MOR-4
(9/99)

*"Insider" is defined in 11 U.S.C. Section 101(31).

HA-LO INDUSTRIES, INC
IN PAYMENT OF SALES AND USE TAX FOR THE PERIOD:
July 1, 2002 to July 31, 2002

DATE SUBMITTED:	9/8/2002
DATE REQUIRED:	8/12/2002

Vendor #		Payable To/ Address	Total Amount of Check
	13824	Alabama Department of Revenue	$	84.46
PAYTO		Sales and Use Tax Division P.O. Box 831199 Birmingham, AL 35283-1199
	13828	Tax Trust Acct	$	4.58
PAYTO		Sales Tax Division PO Box 830725 Birmingham, AL. 35283-0725
		City of Arab Sales Tax Division P.O. Box 1324 Hartselle, AL 35640-1324	$	—
	23922	Baldwin County	$	7.10
PAYTO		Sales & Use Tax Department P.O. Box 369 Foley, AL 36536
	13826	City of Birmingham	$	18.48
PAYTO		P.O. Box 10566 Birmingham, AL 35296-0001
	13840	Cullman County	$	—
PAYTX		402 Arnold Street NE PO Box 1206 Cullman, AL 35056-1206
	12790	City of Decatur	$	—
PAYTX		Drawer 1059 PO Box 830822 Birmingham, AL 35283-0822
	13829	City of Huntsville	$	—
PAYTO		City Clerk P.O. Box 040003 Huntsville, AL. 35804
	25578	Jefferson County	$	—
PAYTO		Department of Revenue P.O. Box 830710 Birmingham, AL 35283-0710
		Morgan County Sales Tax Office PO Box 1848 Decatur, AL. 35602	$	—
	15880	Colorado Department of Revenue	$	176.00
PAYTX		Taxpayer Service Division 1375 Sherman Street Denver, CO 80261
	23382	City & County of Denver	$	17.78
PAYTO1		Department of Revenue, Treasury Division P. O. Box 17430 Denver, CO 80217-0430

	13834	State Tax Commission	$	158.89
PAYTO		PO Box 76 Boise, ID 83707
	16885	Massachusetts Department of Revenue	$	965.82
PAYTO		P.O. Box 7039 Boston, MA 02204
	14260	State of Michigan		230.26
PAYTX		Dept 77802 Detroit, MI 48277-0003
	1994	Minnesota Department of Revenue	$	8,048.00
PAYTX		Minnesota Sales and Use Tax P.O. Box 64622 St. Paul, MN 55146-4622
	13837	New Jersey Sales Tax	$	1,276.44
PAYTO		CN-999 Trenton, NJ 08646-0999
	13833	NYS Sales Tax Processing	$	—
PAYTX		General Post Office PO Box 1208 New York, NY 10116-1208
	14259	North Carolina Department of Revenue	$	1,338.79
PAYTO1		PO Box 25000 Raleigh, NC 27640
	14259	North Carolina Department of Revenue	$	—
PAYTO4		Mecklenburg Public Transportation PO Box 25000 Raleigh, NC 27640
	3568	Treasurer of State of Ohio	$	4,483.79
PAYTAX		P.O. Box 16560 Columbus, OH 43266-00600
	13835	South Carolina Tax Commission	$	144.94
PAYTO		SC Department of Revenue and Taxation Sales Tax Return Columbia, SC 29214-0102
	28769	Virginia Department of Taxation	$	430.14
PAYTX		Processing Services Division PO Box 26626 Richmond, VA 23261-6626
	22156	State of Washington	$	716.16
PAYTO		Department of Revenue PO Box 34051 Seattle, WA 98124-1051
	16090	City of Bellevue	$	—
Qtrly		P.O. Box 34372
PAYTX1		Seattle, WA 98124-1372
Subtotal of checks required				18,101.63

2

EFT's			NO CHECKS ARE REQUIRED	��		EFT's
		24/30	California Board of Equalization		$	12,905.00
		10614	Commissioner of Revenue Services		$	252.73
PAYTX
			Florida Dept of Revenue		$	—
			Georgia Dept of Revenue		$	781.86
			Indiana Dept of Revenue		$	146.33
Prepays			Illinois Dept of Revenue		$	—
	5/7/2002
Prepays			Illinois Dept of Revenue		$	—
	5/15/2002
Prepays			Illinois Dept of Revenue		$	—
	5/22/2002
Prepays			Illinois Dept of Revenue		$	—
	5/31/2002
			Illinois Dept of Revenue		$	—
			PA Dept of Revenue		$	306.37
			Tennessee Department of Revenue		$	2,684.00
			Texas Dept of Revenue		$	—
			Wisconsin Department of Revenue		$	258.69
Subtotal of EFTS					$	17,334.98
Total Sales Tax Payments					$	35,436.61
			Check Disbursements By Date:
			Check Disbursements Post Marked the 15th		$	6,052.84
			Check Disbursements Post Marked the 20th		$	11,332.63
			Check Disbursements Post Marked the 25th		$	716.16
			Check Disbursements Post Marked the 30th		$	—
			Total Checks		$	18,101.63
			EFT Disbursements By Date:
			EFT Disbursements Posted By Bank On 7th:		$	—
			EFT Disbursements Posted By Bank On 8th:		$	—
			EFT Disbursements Posted By Bank On 15th:		$	—
			EFT Disbursements Posted By Bank On 20th:		$	4,177.25
			EFT Disbursements Posted By Bank On 22th:		$	—
			EFT Disbursements Posted By Bank On 24th:		$	12,905.00
			EFT Disbursements Posted By Bank On 30th:		$	—
			EFT Disbursements Posted By Bank On 31th:		$	252.73
			Total EFT Disbursements		$	17,334.98
			Total Disbursements		$	35,436.61

3

QuickLinks

July 2002 Consolidated HALO DIP
July 2002 Consolidated Statement of Operations
July 2002 Consolidated Balance Sheet
July 2002 Schedule of Consolidated Post–Petition Tax Filings & Tax Payments