MONTHLY OPERATING REPORT
Calendar Month February 1, 2002 to February 28, 2002
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.
Location: NxNetworks, Inc. 13595 Dulles Technology Drive, Herndon, VA
20171; Greg Washenko (CFO) 703-793-2059 and Jennifer Bell (Controller)
703-793-2076
3. NUMBER OF EMPLOYEES paid during this period: 27
4. Have there been any CHANGES IN THE NATURE OF YOUR BUSINESS since the
last reporting period?
Yes [ ] No [X]. If yes, explain below:
5. Are all BUSINESS LICENSES current? Yes [ ] No [X] Not Applicable [ ]
6. PRE-PETITION ACCOUNTS RECEIVABLE:
Beginning Balance $ 495,189
-----------
Collected this Period $ 36,748
Write-offs against allowance $ 1,955
-----------
Ending Balance $ 456,486
7. POST-PETITION ACCOUNTS RECEIVABLE:
0-30 Days: $959,036 31-60 Days: $353,422 Over 61-90 Days: $196,297
Days over 90: $61,617
If there are any post-petition Accounts Receivable over 60 days,
provide schedule AR giving a listing of such accounts and explain the
delinquencies.
8. POST-PETITION ACCOUNTS PAYABLE:
0-30 Days: $47,084 31-60 Days: $29,301 Over 60 Days: $128,789
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 [ ] Payroll tax is current but sales, property
and business taxes are overdue. 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. 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.
10. ESCROW ACCOUNTS. Are you utilizing your tax account only for deposits
and payment of payroll and sales taxes? Yes [X] No [ ]. If no,
explain: Payroll taxes were deposit to the payroll account during this
period. Going forward payroll taxes will be deposited into the tax
account.
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 4/01/02 Liability 4/01/02
Fire Workers Comp. 4/01/02
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 [ ] 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 [ ] No [X] Explain:
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
--------------------------------------------------------
Richard Yalen CEO $18,457.17
Brown Rudnick Freed Gemser Attorneys $25,000.00
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: 3/22/02 DEBTOR-IN-POSSESSION
Name/Title: Greg Washenko, CFO By: /s/ Greg Washenko
-------------------------
Address: 13595 Dulles Technology Drive
Herndon, VA 20171 Phone:
UNITED STATES BANKRUPTCY COURT
FOR THE EASTERN DISTRICT OF VIRGINIA
Alexandria Division
IN re: ) Chapter 11
) Case Number: 01-14223
)
)
Debtor(s) )
- ------------------------
Cash Disbursements Summary Report
Calendar Month Ending February 28, 2002
Total Disbursements from Operating Account
(See Note 1) $383,967.35
------------
Total Disbursements from Payroll Account
(See Note 2) $104,880.58
------------
Total Disbursements from Tax Escrow Account
(See Note 3) $ 60,670.32
------------
Total Disbursements from any other Account
(See Note 4) 0
------------
Grand Total Disbursments from all Accounts $549,518.25
------------
Note 1 --Include in this amount all checks written, wire transfers made from,
or any other withdrawal from the general operating account. Exclude only
transfers to the debtor-in-possession payroll account, the debtor in
possession tax escrow account or other debtor in possession account where the
disbursements will be listed on this report.
Note 2 --Include in this amount all checks written, wire transfers made from,
or any other withdrawal from the payroll account. Exclude only transfers to
the debtor-in-possession operating account, the debtor in possession tax
escrow ac-count or other debtor-in-possession account where the disbursements
will be listed on this report.
Note 3 --Include in this amount all checks written, wire transfers made from,
or any other withdrawal from the tax escrow account. Exclude only transfers
to the debtor-in-possession operating account, the debtor in possession
payroll account or other debtor in possession account where the disbursements
will be listed on this report.
Note 4 -- Include in this amount any other disbursements made by the debtor
including (but not limited to) cash paid from a petty cash fund or cash
register, amounts paid from any other debtor in possession account, and
amounts paid from the accounts of others on the debtors behalf (for example,
disbursements made from a law firm's escrow account as a result of a sale of
property.)
ATTACH A COPY OF THE MOST RECENT MONTHLY BANK STATEMENT FOR EACH DEBTOR-IN-
POSSESSION ACCOUNT. (The page of the statement showing bank, account number
and beginning and ending balance is sufficient.)
<
NX NETWORKS, INC.
MONTHLY OPERATING REPORT
INCOME STATEMENT
(BUSINESS DEBTOR, ACCRUAL BASIS)
Calendar Month February 1 to February 28, 2002
FEBRUARY JANUARY Year
2002 2002 to Date
----------------------------------
SALES:
Product Sales 667,347 271,214 938,561
Service Sales 189,849 335,546 525,395
----------------------------------
857,196 606,760 1,463,956
----------------------------------
COST OF SALES:
Product Cost of Sales - materials 282,705 127,713 410,418
Product Cost of Sales -
manufacturing overhead 31,046 69,947 100,994
Service Costs 92,630 95,581 188,211
----------------------------------
406,381 293,241 699,622
----------------------------------
----------------------------------
GROSS MARGIN 450,815 313,519 764,334
OPERATING EXPENSES:
OFFICER SALARIES (GROSS) 33,892 33,892 67,785
OTHER EMPLOYEES SALARIES (GROSS) 74,655 123,589 198,244
TAXES (PAYROLL: EMPLOYER'S SHARE) 8,749 16,403 25,152
EMPLOYEE BENEFITS
(insurance,pension etc) 7,500 7,500 15,000
TRAVEL & ENTERTAINMENT 11,754 3,895 15,650
TELEPHONE 3,861 6,330 10,192
UTILITIES 5,884 3,200 9,084
OFFICE SUPPLIES 3,335 2,066 5,402
POSTAGE & DUPLICATION 3,087 169 3,255
OFFICE RENT 13,531 13,460 26,991
REPAIRS & MAINTENANCE 317 3,831 4,149
LEGAL 10,000 10,250 20,250
ACCOUNTING - 141 141
MARKETING EXPENSE 325 325 650
TRANSFER AGENT FEE 1,272 1,283 2,556
INSURANCE 33,460 33,480 66,940
BAD DEBT EXPENSE - (400,000) (400,000)
SALES CONTRACTORS 4,913 4,913 9,826
CONSULTING 49,453 60,335 109,788
OTHER TAX 12 7,171 7,182
OTHER EXPENSES 4,667 1,059 5,726
----------------------------------
Total operating expense $ 270,667 $ (66,706) $ 203,961
----------------------------------
OPERATING INCOME/(LOSS)/EBITDA 180,148 380,225 560,373
DEPRECIATION 51,526 54,725 106,252
GOODWILL AMORTIZATION 16,125 16,125 32,250
ESTIMATED LOSS ON FOREIGN SUBS
LIQUIDATION (37,443) (37,443)
-----------------------------------
30,208 70,850 101,059
Other Income (Expenses)
Interest Expense - -
Interest Income 3 3 6
Other Income 11,838 3,562 15,400
---------------------------------
Total income and other expense 11,841 3,565 15,406
----------------------------------
Net Income/(Loss) $ 161,780 $ 312,940 $ 474,720
==================================
POST PETITION AR AGING
as of 2/28/02
Customer Name 1-30 31-60 61-90 91-120+ Total
- --------------------------------------------------------------------------------------------
AAE SYSTEMS INC Total 3,750.00 0.00 0.00 0.00 3,750.00
ALCATEL CIT Total 0.00 0.00 221.14 6,891.00 7,112.14
ALCATEL e-BUSINESS Total 15,932.73 0.00 0.00 0.00 15,932.73
ALCATEL TELECOM LIMITED Total 64,999.98 0.00 0.00 0.00 64,999.98
AMETELCO LIMITED Total 2,900.00 0.00 0.00 0.00 2,900.00
ANIXTER (U.K.) LIMITED Total 0.00 0.00 4,744.50 0.00 4,744.50
AT&T Total 0.00 19,330.92 0.00 0.00 19,330.92
AURORA TECHNOLOGIES LTD Total 0.00 0.00 0.00 1,350.90 1,350.90
BANK OF CHINA Total 1,000.00 0.00 0.00 0.00 1,000.00
BANK OF CHINA INTERNATIONAL Total 0.00 1,577.87 0.00 0.00 1,577.87
BELAM INC Total 7,251.25 0.00 0.00 0.00 7,251.25
CHIQUITA BRANDS
INTERNATIONA Total 59,386.55 0.00 0.00 0.00 59,386.55
COHERENT LASER GROUP Total 0.00 2,924.82 0.00 0.00 2,924.82
COMPAQ COMPUTER
INTERNATIONA Total 2,766.18 0.00 0.00 0.00 2,766.18
COMPUTERBANK NETWORKING
S.A. Total 2,026.20 0.00 0.00 0.00 2,026.20
DATAGENICS PTY LTD Total 132,904.65 24,999.99 0.00 0.00 157,904.64
DXL ENTERPRISES, INC. Total 101,319.00 0.00 0.00 0.00 101,319.00
EDS HONG KONG LTD. Total 0.00 23,873.85 0.00 0.00 23,873.85
ELECTRONIC DATA SYSTEMS
CORP Total (0.06) 0.00 0.00 0.00 (0.06)
EUROPEAN SPACE AGENCY Total 91,999.92 0.00 0.00 890.70 92,890.62
EVAL - CATALYST NETWORK Total 0.00 3,295.00 0.00 0.00 3,295.00
FORTUNE INFORMATION TECHNOLO Total 0.00 0.00 2,760.00 0.00 2,760.00
FRAME SA Total 1,584.10 0.00 3,784.15 0.00 5,368.25
FRITZ COMPANIES INC Total (359.64) 13,832.93 0.00 0.00 13,473.29
GAYLORD BROS. Total 0.00 876.00 0.00 0.00 876.00
GEMINI ASSOCIATES INC. Total 0.00 0.00 0.00 0.00 0.00
GIANT INFORMATION SYSTEMS Total 0.00 83.04 35.80 0.00 118.84
GZS Total 75,456.00 0.00 0.00 0.00 75,456.00
HITRON TECHNOLOGY INC. Total 500.00 5,640.00 0.00 4,199.61 10,339.61
HUNTINGTON MARKET Total 0.00 0.00 200.00 0.00 200.00
INFORMSVIAZ Total 0.00 332.45 11,197.98 0.00 11,530.43
K-SOLUTIONS, INC. Total 0.00 880.38 0.00 6,018.00 6,898.38
L3 COMMUNICATIONS - STS Total 2,500.00 0.00 0.00 0.00 2,500.00
LOGICAL NETWORKS (EX ANITE) Total 0.00 27,486.90 0.00 27,486.90 54,973.80
LUCENT TECHNOLOGIES Total 0.00 99,999.99 0.00 0.00 99,999.99
MACKAY COMMUNICATIONS Total 22,377.78 0.00 0.00 0.00 22,377.78
MBG/ELEKTRONIK AB Total 4,102.00 0.00 0.00 0.00 4,102.00
MISCELLANEOUS CASH Total (260.00) 0.00 0.00 0.00 (260.00)
MOTOROLA ING Total 0.00 0.00 0.00 0.00 0.00
NACKARD BEVERAGE Total 150.00 0.00 0.00 0.00 150.00
NETCALL Total 0.00 0.00 0.00 875.00 875.00
NEWMONT INTERNATIONAL Total 21,199.68 0.00 0.00 0.00 21,199.68
NEWMONT MINING CORPORATION Total 0.00 1,225.00 0.00 0.00 1,225.00
NULINK INC Total 0.00 0.00 0.00 800.00 800.00
OMNES Total 0.00 27,485.16 0.00 0.00 27,485.16
OMNES LTD Total 0.00 9,965.81 11,007.29 0.00 20,973.10
POLY LINK GATEWAY Total 0.00 8,456.84 0.00 0.00 8,456.84
PROBIL A.S. Total (10,725.00) 10,725.00 0.00 0.00 0.00
PSINET CANADA INC., Total 0.00 0.00 5,089.00 0.00 5,089.00
QXTEL LIMITED Total 0.00 0.00 7,800.00 1,920.00 9,720.00
REPUBLIC TELCOM OF NE Total 0.00 0.00 300.00 0.00 300.00
ROCKBRIDGE GLOBAL VILLAGE Total 0.00 0.00 436.00 0.00 436.00
SEALED AIR CORPORATION Total 0.00 4,914.71 0.00 4,914.71 9,829.42
SES AMERICOM, INC. Total 13,554.75 0.00 0.00 0.00 13,554.75
SIEMENS AG Total 0.00 0.00 0.00 3,770.80 3,770.80
SKYMAX COMMUNICATIONS Total (4,775.00) 0.00 0.00 0.00 (4,775.00)
SOLECTEK Total 0.00 11,400.00 0.00 0.00 11,400.00
SOLUNET, INC Total 515.20 0.00 0.00 0.00 515.20
TAKACHIHO KOHEKI CO.,LTD. Total 32,795.95 10,480.00 48,316.90 0.00 91,592.85
TELCO SOLUTIONS INC Total 0.00 3,840.00 0.00 0.00 3,840.00
TELECAM S A Total 0.00 3,199.90 0.00 0.00 3,199.90
TELECOMMUNICATIONS CONCEPTS Total 0.00 36,595.20 0.00 0.00 36,595.20
TELEDINAMICA MEXICANA DE Total 1,081.57 0.00 0.00 0.00 1,081.57
TELINDUS NETWORKS NV Total 38,926.61 0.00 42,720.12 0.00 81,646.73
TELUS COMMUNICATIONS EDTN IN Total 0.00 0.00 57,584.88 0.00 57,584.88
THE SHOW FACTORY, INC. Total 150.00 0.00 0.00 0.00 150.00
TRADITION(NORTH AMERICA) INC Total 300.00 0.00 0.00 0.00 300.00
TRANSACTION NETWORK SERVICES Total 0.00 0.00 0.00 2,500.00 2,500.00
WASHINGTON DATA SYSTEMS, INC Total 0.00 0.00 99.25 0.00 99.25
-------------------------------------------------------------
TOTAL 685,310.40 353,421.76 196,297.01 61,617.62 1,296,646.79
-------------------------------------------------------------
ADJUSTMENTS:
ACCRUED PRODUCT REVENUE -
GEMINI 184,832.29 184,832.29
ACCRUED PRODUCT REVENUE -
SMTC SHIPPED 45,120.00 45,120.00
ACCRUED CONTRACT MAINTENANCE 43,773.00 43,773.00
-------------------------------------------------------------
959,035.69 353,421.76 196,297.01 61,617.62 1,570,372.08
=============================================================
NXNETWORKS, INC.
CONSOLIDATED BALANCE SHEET - UNAUDITED
As of February 28, 2002
ASSETS
------
CURRENT ASSETS
Cash and cash equivalents 652,812
Pre-Petition Accounts Receivable 456,486
Post-Petition Accounts receivable 1,570,372
Less reserve for bad debt & returns (727,283)
Receivables from Officers, Affiliates, Employees -
Inventory 2,663,719
Other current assets
Prepaids 657,418
------------
Total Current Assets 5,273,524
FIXED ASSETS
Property and Equipment 9,999,743
Less: Accumulated Depreciation (9,447,004)
------------
Total Fixed Assets 552,739
OTHER ASSETS
Deposits 660,293
Goodwill, Net 354,751
-----------
Total Other Assets 1,015,044
-----------
TOTAL ASSETS 6,841,307
===========
LIABILITIES & STOCKHOLDER'S EQUITY
----------------------------------
POST-PETITION LIABILITIES:
Accounts Payable 205,175
Accrued Accounts Payable 153,887
Accrued liability for sub liquidation 338,031
Deferred Revenue 413,835
Taxes Payable 2,149
-----------
Total Post-Petition Liabilities 1,113,076
PRE-PETITION LIABILITIES:
Priority Claim 528,076
Secured Claim 558,735
Unsecured 13,088,400
General pre-pretition accruals 4,843,610
Total Pre-Petition Liabilities 19,018,822
-----------
TOTAL LIABILITIES 20,131,898
-----------
STOCKHOLDERS' EQUITY:
Common Stock 2,430,230
Preferred Stock 7,025,008
APIC, net of filing fees 283,967,334
Deferred Compensation (2,347,751)
Accumulated (deficit)/income - Pre-petition (291,148,351)
Accumulated (deficit)/income-Post-petition PY (18,977,497)
Accumulated (deficit)/income-Post-petition CY 474,720
Warrants 6,322,333
Notes Receivable from officer (1,000,000)
Cummulative Translation Adj. (36,616)
Total Stockholders' equity (13,290,591)
------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 6,841,307
============
NXNETWORKS, INC.
CASH FLOW STATEMENT (SOURCES (USES) OF CASH) - UNAUDITED
PAYROLL AND TAX ACCOUNTS
(BUSINESS DEBTOR, ACCRUAL BASIS)
Calendar Month Ending February 28, 2002
All figures refer to post-petition transactions
Net Income/(loss) 161,780
add expenses not requiring Cash:
Depreciation 51,526
Goodwill Amortization 16,125
---------------
67,751
Other Sources (Uses) Cash:
Accounts receivable (344,321)
Inventories 266,502
Other current assets (145,376)
Deposits (709)
accounts payable (4,579)
Accrued liabilities 128,542
total other souces (uses) of cash 129,491
Cash beginning 523,322
Cash ending 652,812