IN RE: Ardent, Inc. (consolidated) Chapter 11
Debtor(s) Ardent Communications, Inc. (ACI) Case No.: 01-2085
Ardent, Inc. (AI) Case No.: 01-2086
Business Anywhere USA, Inc. (BA) Case No.: 01-2208
CAIS Software Solutions,Inc. (CSS) Case No.: 01-2209
MONTHLY OPERATING REPORT
Calendar Month November 1 to November 30, 2001 (ACI, AI, BA, CSS)
FINANCIAL BACKGROUND INFORMATION
1. ACCOUNTING BASIS: Cash [ ] Accrual [X]
2. PREPARER: State the name, address, telephone number and position of
the person(s) who actually compiled the information contained in this
report.
Gregory Boryan, Controller
Ardent, Inc.
6861 Elm Street, 1st Floor
McLean, VA 22101
703-276-4493
3. NUMBER OF EMPLOYEES paid during this period: 124
4. Have there been any CHANGES IN THE NATURE OF YOUR BUSINESS since the
last reporting period?
Yes [x] No [ ]. If yes, explain below. Ardent, Inc. sold its Digital
Subscriber Line (DSL) customer base to Network Access Solutions, Inc. (NAS)
for a total of approximately $6.7 million. See Detail to Question 14 for
additional information.
5. Are all BUSINESS LICENSES current? Yes [x] No [ ] Not Applicable [ ]
6. PRE-PETITION ACCOUNTS RECEIVABLE:
Beginning Balance $ 7,523,399
Collected this Period (1,378,324) NOTE: Ending balance is net of
Non-cash Adjustments (6,145,075) allowance for uncollected
Ending Balance $ 0 accounts.
7. POST-PETITION ACCOUNTS RECEIVABLE:
0-30 Days: $2,694,804 31-60 Days: $-0- Over 60 Days: $-0-
If there are any post-petition Accounts Receivable over 60 days, pro
vide schedule AR giving a listing of such accounts and explain the
delinquencies.
8. POST-PETITION ACCOUNTS PAYABLE:
0-30 Days: $323,985 31-60 Days: $0 Over 60 Days: $0
If there are any post-petition Accounts Payable over 30 days, provide
Schedule AP giving a listing of such accounts and explain the
delinquencies.
9. TAXES. Are all taxes being paid to the proper taxing authorities when
due? Yes [x] No [ ]. On the attached IRS Form 6123 report
all tax deposits made with any financial institution for federal
employment taxes. Be sure the form is complete and signed by an
authorized employee of the receiving institution or taxing authority.
Attach to this report a completed Form 6123 for each deposit made
during the reporting period.
All taxes are reported and remitted to the appropriate taxing
authorities by our outside payroll service, Ceredian Pay America.
Also attach copies of the monthly sales tax report, payroll tax report
and unemployment tax report with evidence of payment of both federal
and state taxes.
Ceredian payroll tax reports attached.
10. ESCROW ACCOUNTS. Are you utilizing your tax account only for deposits
and payment of payroll and sales taxes? Yes [ ] No [ ]. If no,
explain: N/A
11. Are all BOOKS AND RECORDS of the debtor(s) being maintained monthly and
are all current? Yes [X] No [ ] Explain:
12. INSURANCE EXPIRATION STATEMENT. Policy expiration dates are:
Auto & Truck N/A Liability 5/1/02
Fire 5/1/02 Workers Comp. 5/1/02
13. ACTIONS OF DEBTOR. During the last month, did the debtor:
(A) Fail to defend or not oppose any action seeking to dispossess the
debtor from control or custody of any asset of the estate?
Yes [ ]No [X] Explain:
(B) Maintain such stock, inventory, raw materials, insurance, employees
and other resources as are necessary to preserve and maintain the
going-concern value of the assets of the debtor? Yes [X] No [ ]
Explain:
14. TRANSFER OR SALE OF PROPERTY. Did the debtor or any person with con
trol over any of the debtor's assets transfer, convey or abandon any of
the debtor's assets to another party during the period of this report
other than as set forth herein (including sales by creditors)?
Yes [x] No [ ] Explain: See attached schedule
15. PAYMENTS TO SECURED CREDITORS during reporting period:
(Attach additional sheets, if necessary.)
Creditor Freq. of Payments Amount of Next Post Petition Payments
Per Contract each Payment Not Made
(mo, qtr) Payment Due Mo. Amt.
- ------------------------------------------------------------------------------
None
16. PAYMENTS TO PROFESSIONALS (Attorneys, Accountants, Real Estate Agents,
Auctioneers, Appraisers, etc., during reporting period:
(Attach additional sheets, if necessary.)
Professional Service Amount
----------------------------------------------------------------
None
17. QUARTERLY U.S. TRUSTEE FEES paid during reporting period: $ 0
18. VERIFICATION: I declare under penalty of perjury that the information
contained in this monthly operating report (including attached
schedules) is true and correct to the best of my knowledge, information
and belief.
Dated: January 29, 2002 DEBTOR-IN-POSSESSION
Ardent Communications,
Inc. and subsidiaries
Name/Title: Evans Anderson, President By: /s/ Evans K. Anderson
-------------------------
Address: 6849 Old Dominion Drive, Suite 200
McLean, VA 22101
Phone: 703-276-4200
<PAGE<
Detail to Question 14
- ---------------------
- - Ardent, Inc. sold its Digital Subscriber Line (DSL) Customer base to
Network Access Solutions, Inc. (NAS) for a total of approximately $6.7
million. Approximately 16,000 retail and 5,000 wholesale customers
received service through Covad Communications and were transferred to NAS
at the time of the sale. NAS paid approximately $2.0 million in cash to
Ardent and paid Ardent's pre-petition obligation to Covad Communications in
the amount of approximately $4.7 million.
- - Ardent, Inc. sold various computer hardward (PC's, monitors, printers,
etc.) at market prices, as follows:
Cash Sales 2,700
Cash Sales 1,625
Cash Sales 475
Cash Sales 250
Cash Sales 325
Cash Sales 250
Autore 750
Cash Sales 1,500
Cash Sales 1,100
Cash Sales 250
Cash Sales 75
Cash Sales 75
Bajor 165
Progressive Church 2,435
Bishop Perrin 350
Virginia Management 4,000
Progressive Church 2,900
McIlwaine 100
Mincey 250
Cash Sales 500
Comm Support 2,000
Sandy Spring 1,300
Lamphier 775
Int. Science 4,000
EJF Real Estate 850
ML Marketing 650
Art Ins. DC 2,000
Cash Sales 2,000
Autore 150
Nateghian 100
Gunatilleke 325
Hughes 75
William Smith Co. 400
Cash Sales 700
Kaikhosrawkiani 100
Cash Sales 600
Haney 300
Mad Tech 350
Moore 120
Abooali 150
Tier Tech 1,100
TOTAL FOR
NOVEMBER 2001 38,120
All sales were made in the ordinary course of business on an arms-length basis
and were at prices approximating market value.
IN RE: Ardent, Inc. (consolidated) Chapter 11
Debtor(s) Ardent Communications, Inc. (ACI) Case No.: 01-2085
Ardent, Inc. (AI) Case No.: 01-2086
Business Anywhere USA, Inc. (BA) Case No.: 01-2208
CAIS Software Solutions,Inc. (CSS) Case No.: 01-2209
Monthly Operating Report
Income Statement
(Business Debtor, Accrual Basis)
Calendar Month November 1 to November 30, 2001 (ACI, AI, BA, CSS)
Year to Date October 10, 2001 to November 30, 2001 (ACI, AI)
Year to Date October 25, 2001 to November 20, 2001 (BA, CSS)
(all figures refer to post-petition transactions)
Current Month Year to Date
------------- ------------
(A) Total Sales/Income (A) 2,046,612 4,611,038
(B) Total Cost of Sales (B) 3,339,599 5,430,407
------------- -------------
(C) Gross Profit (C=A-B) (1,292,987) (819,369)
------------- -------------
Operating Expenses
Officer Salaries (Gross) 139,259 208,796
Other Employee Salaries (Gross) 696,314 961,035
Taxes (Payroll: Employer's Share) 56,927 70,985
Employee Benefits (Insurance, Pension 35,118 173,982
Plan, etc. Employer's Share)
Advertising (9,414) 2,404
Bad Debts 6,280,000 6,280,000
Depreciation and Amortization 269,491 1,004,572
Insurance (Other) 82,752 178,512
Leases (other than Rent) - -
Outside Services & Contractors 22,655 24,590
Professional Fees (Attorney, Accountant) (82,155) 64,194
Rent and leases (1,251,550) (1,211,115)
Repairs & Maintenace 78,265 187,785
Supplies (122,632) (109,941)
Taxes and Other 12,873 21,341
Telephone (40,045) (11,572)
Travel 19,467 35,850
Utilities 3,662 3,662
U.S. Trustee Quarterly Fee 1,167 6,667
Bank charges 8,089 14,560
---------- ----------
(D) Total Operating Expenses (D) 6,200,243 7,906,307
---------- ----------
(E) Profit/(Loss)from operations (E=C-D) (7,493,230) (8,725,676)
---------- ----------
Other Income (Expenses)
Interest Income 10,370 10,695
Interest Expense (220,050) (220,050)
Other Income (Expense) (101,593) (101,593)
Impairment of Fixed Assets (53,118,913) (53,118,913)
Impairment of Investments (7,025,221) (7,025,221)
Gain on Sale of IPORT Assets 4,200,000 4,200,000
Gain on Sale of DSL Business 4,511,505 4,511,505
Extraordinary Items
----------- ----------
(F) Total Other Income/Expense &
Extraordinary Items (F) (51,743,902) (51,743,577)
------------ ----------
(G) Income (Loss) Before Taxes (G=E+F) (59,237,132) (60,469,253)
(H) Income Tax Expense (H) - -
------------ -----------
(I) Net Income (Loss) (I=G-H) (59,237,132) (60,469,253)
============ ===========
IN RE: Ardent, Inc. (consolidated) Chapter 11
Debtor(s) Ardent Communications, Inc. (ACI) Case No.: 01-2085
Ardent, Inc. (AI) Case No.: 01-2086
Business Anywhere USA, Inc. (BA) Case No.: 01-2208
CAIS Software Solutions,Inc. (CSS) Case No.: 01-2209
Monthly Operating Report
Income Statement (Adjusted for Non-Recurring)
(Business Debtor, Accrual Basis)
Calendar Month November 1 to November 30, 2001 (ACI, AI, BA, CSS)
(all figures refer to post-petition transactions)
Nov-01 (1)Non-recurring Nov-01
Actuals Adjustments Operations
------------- --------------- ------------
(A) Total Sales/Income (A) 2,046,612 651,886 2,698,498
(B) Total Cost of Sales (B) 3,339,599 (1,691,597) 1,648,002
---------------------------------------------
(C) Gross Profit (C=A-B) (1,292,987) 2,343,483 1,050,496
---------------------------------------------
Operating Expenses
Officer Salaries (Gross) 139,259 50,000 189,259
Other Employee Salaries (Gross) 696,314 (346,353) 349,961
Taxes (Payroll: Employer's Share) 56,927 4,295 61,222
Employee Benefits (Insurance,
Pension Plan, etc. Employer's 35,118 81,705 116,823
Share)
Advertising (9,414) 10,170 756
Bad Debts 6,280,000 (6,145,075) 134,925
Depreciation and Amortization 269,491 - 269,491
Insurance (Other) 82,752 58,608 141,360
Leases (other than Rent) -
Outside Services & Contractors 22,655 (18,851) 3,804
Professional Fees (Attorney,
Accountant) (82,155) 255,000 172,845
Rent and leases (1,251,550) 1,303,036 51,486
Repairs & Maintenace 78,265 84,013 162,278
Supplies (122,632) 125,565 2,933
Taxes and Other 12,873 12,873
Telephone (40,045) 45,000 4,955
Travel 19,467 826 20,293
Utilities 3,662 3,662
U.S. Trustee Quarterly Fee 1,167 1,167
Bank charges 8,089 8,089
-------------------------------------------
(D) Total Operating Expenses (D) 6,200,243 (4,492,062) 1,708,181
-------------------------------------------
(E) Profit/(Loss)from
operations (E=C-D) (7,493,230) 6,835,545 (657,685)
-------------------------------------------
Other Income (Expenses)
Interest Income 10,370 10,370
Interest Expense (220,050) 220,050 -
Other Income (Expense) (101,593) 101,593 -
Impairment of Fixed Assets (53,118,913) 53,118,913 -
Impairment of Investments (7,025,221) 7,025,221 -
Gain on Sale of IPORT Assets 4,200,000 (4,200,000) -
Gain on Sale of DSL Business 4,511,505 (4,511,505) -
Extraordinary Items
--------------------------------------------
(F) Total Other Income/Expense
& Extraordinary Items (F) (51,743,902) 51,754,272 10,370
--------------------------------------------
(G) Income (Loss) Before
Taxes (G=E+F) (59,237,132) 58,589,817 (647,315)
(H) Income Tax Expense (H) - - -
--------------------------------------------
(I) Net Income (Loss) (I=G-H) (59,237,132) 58,589,817 (647,315)
============================================
Footnotes:
(1) Non-recurring adjustment descriptions are listed on next page
NON-RECURRING ADJUSTMENTS
FOR THE MONTH OF NOVEMBER 2001
Better
Adjustment Type Description (Worse)
--------------- ----------- ----------
Total Sales/Income Overaccrual of DSL Revenue (634,000)
Overaccrual of WEB Revenue (17,886)
---------
(651,886)
Total Cost of Sales Overaccrual of carrier dispute credits 2,258,119
Recording of surcharge reimbursement billings (566,522)
---------
1,691,597
Officer Salaries (Gross) Reversal of officer bonus previously accrued 50,000
Other Employee Salaries (Gross) Adjustment Payroll accrual 17,929
Underaccrual of payroll for terminated employees (364,282)
---------
(346,353)
Taxes (Payroll: Employer's Share) Payroll tax adjustment 4,295
Employee Benefits (Insurance, Adjustment for proper recording of cost
Pension Plan, etc. Employer's of benefits (49,206)
Share) Reversal of accrued vacation for terminated
employees 130,911
---------
81,705
Advertising Adjustment to prior months expenses 1,500
Adjustment to prior months expenses 8,670
---------
10,170
Bad Debt Expense Addition to reserve (6,280,000)
Less: 5% of revenue normal estimate
Non-recurring addition 134,925
---------
(6,145,075)
Insurance (Other) Overaccrual of amortization of D&O insurance 58,608
Outside Services & Contractors Overaccrual of pre-petition agent referral
fees 31,147
Overaccrual of pre-petition consulting fees (49,998)
----------
(18,851)
Professional Fees (Attorney, Overaccrual of pre-petition audit and tax
Accountant) fees 255,000
Rent and Leases Write-off of deferred rent adjustment 1,303,036
Repairs and Maintenance Overaccrual of Cisco equipment maintenance 84,013
Supplies Overaccrual of miscellaneous SG&A expenses 125,565
Telephone Overaccrual of Verizon and Nextel charges 45,000
Travel Overaccrual of travel and entertainment expenses 826
Interest Expense Write off unamortized loan costs (220,050)
Other Income (Expense) Write off miscellaneous balances (101,593)
Impairment of Fixed Assets Write down of Impaired assets (53,118,913)
Impairment of Investments Write down of impaired investments (7,025,221)
Gain of Sale if IPORT Record additional amount for deferred gain
on sale 4,200,000
Gain of Sale of DSL Business Net of cash received, pre-petition payables
relieved, and write-off of unamortized amounts 4,511,505
IN RE: Ardent, Inc. (consolidated) Chapter 11
Debtor(s) Ardent Communications, Inc. (ACI) Case No.: 01-2085
Ardent, Inc. (AI) Case No.: 01-2086
Business Anywhere USA, Inc. (BA) Case No.: 01-2208
CAIS Software Solutions,Inc. (CSS) Case No.: 01-2209
Balance Sheet
As of November 30,2001
CURRENT ASSETS
Cash 2,852,635
Pre-Petition Accounts Receivable -
Post-Petition Accounts receivable 2,694,804
Notes Receivable
Inventory
Other current assets 1,174,511
------------
Total Current Assets 6,721,950
FIXED ASSETS
Land
Buildings
Equipment, Furniture & Fixtures 23,842,421
------------
Gross Fixed Assets 23,842,421
Less Accumulated Depreciation ( 5,903,998)
------------
Total Fixed Assets 17,938,423
OTHER ASSETS
Net Intangibles and Investments 500,000
Other Long-Term Assets 693,495
-----------
Total Other Assets 1,193,495
-----------
TOTAL ASSETS 25,853,868
===========
POST-PETITION LIABILITIES:
Accounts Payable 323,985
Accrued Salaries and Benefits 594,281
Rents and Leases Payable
Taxes Payable
Other liabilities
-----------
Total Post-Petition Liabilities 918,266
PRE-PETITION LIABILITIES:
Priority Claims
Secured Debts 17,056,411
Unsecured Debts 93,594,473
Accrued Dividends on Preferred Stock 2,928,865
-----------
Total Pre-Petition Liabilities 113,579,749
OTHER LIABILITIES
Deferred Gain on Sale of Assets 800,000
Other Accrued Liabilities 3,137,486
-----------
Total Accrued Liabilities 3,937,486
OWNERS' EQUITY (Deficit):
Preferred Stock 188,076,592
Treasury Stock (17,073,421)
Common Stock 242,698
Stock Warrants 63,375,977
Paid in Capital 223,307,675
Retained Earnings (Deficit)
Pre-Petition (490,041,901)
Post-Petition (60,469,253)
Total Owners' Equity (Deficit) (92,581,633)
------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 25,853,868
============
NOTE: All equity received by Ardent Communications, Inc. (parent) was
transferred to the subsidiaries to fund operating losses and capital
expenditures.
Deferred gain represents contingent liability to Cisco Systems, Inc.
for any patent claims related to the sale of the IPORT software in
December 2000.
IN RE: Ardent, Inc. (consolidated) Chapter 11
Debtor(s) Ardent Communications, Inc. (ACI) Case No.: 01-2085
Ardent, Inc. (AI) Case No.: 01-2086
Business Anywhere USA, Inc. (BA) Case No.: 01-2208
CAIS Software Solutions,Inc. (CSS) Case No.: 01-2209
CASH RECONCILIATION REPORT
(Business Debtor, Accrual Basis)
Current Month November 1 to November 30, 2001 (ACT, AI, BA, CSS)
Year to Date October 10, 2001 to November 30, 2001 (ACI, AI)
Year to Date October 26, 2001 to November 30, 2001 (BA, CSS)
(All figures refer to post-petition transactions)
Current YTD
Month Totals
------- ------
(A) Beginning Cash Balance (A) 2,571,406 3,081,927
(B) Net Income (Loss) (B) (59,237,132) (60,469,253)
Add Expenses (Income) Not Affecting Cash:
Depreciation 269,491 1,004,572
Bad Debt Expense 6,280,000 6,280,000
Write off of Deferred Rent (1,303,036) (1,303,036)
Impairment of Fixed Assets 53,118,913 53,118,913
Impairment of Investments 7,025,221 7,025,221
Non-cash Gain on Sale of IPORT Assets (4,200,000) (4,200,000)
Non-cash Gain on Sale of DSL Business (2,558,957) (2,558,957)
---------- ---------
(C) Sub-Total (C) 58,631,632 59,366,713
---------- ---------
(D) Cash from Operations (D=B+C) (605,500) (1,102,540)
---------- ---------
Other Sources (Uses) of Cash:
Sources (Uses)
- --------------
Decrease (Incr)- Accounts Receivable 1,110,391 (491,755)
Decrease (Incr)- Other Current Assets 866,317 1,115,019
Decrease (Incr)- Other Long-Term Assets 240,896 314,066
Decrease (Incr)- Equipment, Furniture &
Fixtures 1,203,032 1,129,852
Increase (Decr)- Post-Petition Accounts
Payable 383,945 383,945
Increase (Decr)- Other Accrued Liabilities (2,917,955) (2,112,310)
(Less) Unrecorded bank service charges - -
--------- --------
(E) Total Other Sources (Uses)
of Cash (E) 866,629 873,148
--------- ---------
(F) Ending Cash Balance (F=A+D+E) 2,852,535 2,852,535
========= =========
(G) Balance per Bank Statement (G) 3,241,436
(H) Less Outstanding Checks (H) 388,901
(I) Add Deposits in Transit (I) -
---------
(J) Reconciled Bank Balance (J=(G-H)+I) 2,852,535
=========
Ending Cash Balance (F) and Reconciled Bank Balance (J) should equal.
Beginning Cash Checkbook Balance 2,571,406 3,081,927
Inflows 2,166,874 3,676,537
Inflow from sale of DSL Business 1,999,672 1,999,672
Outflows (3,885,417) (5,905,601)
--------- ---------
Ending Cash Checkbook Balance 2,852,535 2,852,535
========= =========
IN RE: Ardent, Inc. (consolidated) Chapter 11
Debtor(s) Ardent Communications, Inc. (ACI) Case No.: 01-2085
Ardent, Inc. (AI) Case No.: 01-2086
Business Anywhere USA, Inc. (BA) Case No.: 01-2208
CAIS Software Solutions,Inc. (CSS) Case No.: 01-2209
CASH DISBURSEMENTS SUMMARY REPORT
Calendar Month November 1 to November 30, 2001 (ACT, AI, BA, CSS)
(All figures refer to post-petition transactions)
Total Disbursements from Operating Account 3,066,401
Total Disbursements from Payroll Account 819,016
Total Disbursements from Tax Escrow Account -
Total Disbursements from any Other Account -
Total Disbursements from all Accounts ---------
3,885,417
=========
NOTE: Excludes intercompany transfers to/from subsidiaries.
IN RE: Ardent, Inc. (consolidated) Chapter 11
Debtor(s) Ardent Communications, Inc. (ACI) Case No.: 01-2085
Ardent, Inc. (AI) Case No.: 01-2086
Business Anywhere USA, Inc. (BA) Case No.: 01-2208
CAIS Software Solutions,Inc. (CSS) Case No.: 01-2209
ACCOUNTS RECEIVABLE
As of November 30, 2001
(All figures refer to post-petition transactions)
Creditor Total Date Past Due Past Due
Due Incurred (31-60 days) (Over 60 days)
TOTAL $2,694,804 Various
NOTE: Details of Accounts Receivable available upon request.
IN RE: Ardent, Inc. (consolidated) Chapter 11
Debtor(s) Ardent Communications, Inc. (ACI) Case No.: 01-2085
Ardent, Inc. (AI) Case No.: 01-2086
Business Anywhere USA, Inc. (BA) Case No.: 01-2208
CAIS Software Solutions,Inc. (CSS) Case No.: 01-2209
ACCOUNTS PAYABLE
As of October 31, 2001
(All figures refer to post-petition transactions)
Creditor Total Date Past Due Past Due
Due Incurred (31-60 days) (Over 60 days)
TOTAL $323,985 Various
NOTE: Details of Accounts Payable available upon request.