UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
IN RE: TAL WIRELESS NETWORKS, INC. CASE NO: 97-58435 MM
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CHAPTER 11
MONTHLY OPERATING REPORT
(GENERAL BUSINESS CASE)
- ---------------------------------------
SUMMARY OF FINANCIAL STATUS
MONTH ENDED September, 1998
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1. Debtor in possession hereby submits this Monthly Operating Report on the Accrual Basis of
accounting (or if checked here ___ the Office of the U.S. Trustee or the Court has approved
the Cash Basis of Accounting for the Debtor). Dollars reported in ($ _____).
End of End of As of
Current Prior Petition
2. ASSET/LIABILITY SUMMARY Month Month Filing
----- ----- ------
Current Assets (Market Value) $30,640 $85,746 $245,867
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Total Assets (Market Value) $3,443,258 $5,498,364 $5,665,985
------------- ------------ ------------
Current Liabilities $141,548 $133,199 $0
------------- ------------ ------------
Total Liabilities $5,608,583 $5,600,234 $5,467,035
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Petition
Current Prior Date to
3. STATEMENT OF CASH RECEIPTS & DISBURSEMENTS FOR MONTH Month Month Month End
----- ----- ---------
a. Total Receipts $996 $0 $27,213
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b. Total Disbursements $946 $3,718 $33,054
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c. Excess (Deficiency) of Receipts Over Disbursements (a - b) $50 ($3,718) ($5,841)
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d. Cash Balance Beginning of Month $10,590 $14,308
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e. Cash Balance End of Month (c + d) $10,640 $10,590
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4. POST-PETITION LIABILITIES & RECEIVABLES Receivables Liabilities
----------- -----------
Balance at End of Previous Month $75,156 $133,199
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Balance at End of Current Month $20,000 $141,548
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5. PAST DUE POST-PETITION LIABILITIES
Balance at End of Previous Month (over 30 days) $349
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Balance at End of Current Month (over 30 days) $433
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YES NO
--- --
6. Are all federal, state, and local taxes current? (if no, attach schedule of
unpaid items) X
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7. Have any payments been made to pre-petition creditors, other than payments in
the normal course to secured creditors or lessors? (if yes, attach listing
including date of payment, amount of payment and name of payee) X
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8. Have any payments been made to officers, insiders, shareholders, relatives?
(if yes, attach listing including date of payment, amount and reason for
payment, and name of payee) X
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9. Have any payments been made to professionals? (if yes, attach listing
including date of payment, amount of payment and name of payee) X
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10. If you answered yes to line 7,8, or 9, were all such payments approved by the
court? #
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11. Is the estate insured for replacement cost of assets and for general liability? N/A
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12. Are U.S. Trustee quarterly fees current? X
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I declare under penalty of perjury that I have reviewed the above summary and attached financial
statements, and after making reasonable inquiry believe that these documents are correct.
Date: October 23, 1998 Richard J Redett
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Responsible Individual
Effective 1/1/95
BALANCE SHEET
(GENERAL BUSINESS CASE)
FOR THE MONTH ENDED September, 1998
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($ )
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ASSETS
FROM SCHEDULES MARKET VALUE
-------------- ------------
CURRENT ASSETS
1 Cash and cash equivalents - unrestricted $10,640
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2 Cash and cash equivalents - restricted $0
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3 Accounts receivable (net) A $20,000
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4 Inventory B $0
--------------------
5 Prepaid expenses $0
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6 Other:
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7
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8 TOTAL CURRENT ASSETS $30,640
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PROPERTY AND EQUIPMENT (MARKET VALUE)
9 Real property C $0
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10 Machinery and equipment D $0
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11 Furniture and fixtures D $0
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12 Office equipment D $0
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13 Leasehold improvements D $0
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14 Vehicles D $0
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15 Other: D $0
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16 D
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17 D
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18 D
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19 D
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20 TOTAL PROPERTY AND EQUIPMENT $0
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OTHER ASSETS
21 Notes receivable-net of allowances $3,000.00
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22 Investment-NST $300,000
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23 Investment-subs $112,618
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24 Accounts receivable-intercompany net of allowances $0
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25 TOTAL OTHER ASSETS $3,412,618
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26 TOTAL ASSETS $3,443,258
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NOTE:
Indicate the method used to estimate the market value of assets (e.g., appraisals; familiarity with comparable market
prices, etc.) and the date the value was determined. Estimated based on experience
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Effective 1/1/95
LIABILITIES AND EQUITY
(GENERAL BUSINESS CASE)
($ )
------
LIABILITIES FROM SCHEDULES
POST-PETITION --------------
CURRENT LIABILITIES
27 Salaries and wages
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28 Payroll taxes
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29 Real and personal property taxes
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30 Income taxes
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31 Notes payable (short term)
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32 Accounts payable (trade) A $433
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33 Real property lease arrearage
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34 Personal property lease arrearage
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35 Accrued professional fees $141,115
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36 Current portion of long-term debt (due within 12 months)
37 Other:
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38
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39
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40 TOTAL CURRENT LIABILITIES $141,548
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41 LONG-TERM DEBT, NET OF CURRENT PORTION
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42 TOTAL POST-PETITION LIABILITIES $141,548
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PRE-PETITION LIABILITIES (ALLOWED AMOUNT)
43 Secured claims $100,000
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44 Priority unsecured claims $101,776
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46 TOTAL PRE-PETITION LIABILITIES $5,467,035
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47 TOTAL LIABILITIES $5,608,583
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EQUITY (DEFICIT)
48 Preferred Stock $80,000
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49 Common Stock $28,846
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50 Additional Paid-In Capital $18,461,441
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51 Accumulated Deficit ($20,700,869)
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52 Market value adjustment ($34,743)
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53 TOTAL EQUITY (DEFICIT) ($2,165,325)
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54 TOTAL LIABILITIES AND EQUITY (DEFICIT) $3,443,258
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Effective 1/1/95
SCHEDULES
(GENERAL BUSINESS CASE)
($ )
------
SCHEDULE A
ACCOUNTS RECEIVABLE(NET)/PAYABLE
Accounts Accounts Payable Past Due
Receivable [Post Petition] Post Petition Debt
---------- --------------- ------------------
Receivables and Payables
0 -30 Days $84
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31-60 Days $349 |
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61-90 Days | $349
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91+ Days $20,000 |
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Total accounts receivable/payable $20,000 $433
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-------------- ---------------
Allowance for doubtful accounts
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Accounts receivable (net) $20,000
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SCHEDULE B
INVENTORY/COST OF GOODS SOLD
TYPES AND AMOUNT OF INVENTORY(IES) COST OF GOODS SOLD
- ---------------------------------- ------------------
Inventory(ies) Inventory Beginning of Month
Balance at -------------------
End of Month Add -
------------
Retail/Restaurants Net purchases
-------------------
Product for resale Direct labor
------------------ -------------------
Manufacturing overhead
-------------------
Distribution Freight in
-------------------
Product for resale Other:
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Manufacturer - -----------------------
Raw materials
------------------ -----------------------
Work-in-progress Less -
------------------
Finished goods Inventory End of Month
------------------ -------------------
Shrinkage
-------------------
Other - Personal Use
Explain ------------------ -------------------
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Cost of Goods Sold $0
------------------------ -------------------
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TOTAL $0
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METHOD OF INVENTORY CONTROL INVENTORY VALUATION METHODS
- --------------------------- ---------------------------
Do you have a functioning perpetual inventory system? Indicate by a checkmark method of inventory valuation used.
Yes ___ No ___
How often do you take a complete physical inventory? Valuation methods -
FIFO cost
----------------
Weekly LIFO cost
--- ----------------
Monthly
--- Lower of cost or
Quarterly market
--- ----------------
Semi-annually Retail method
--- ----------------
Annually
---
Other -
Date of last physical inventory was Unknown Explain ----------------
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----------------------------------------
Date of next physical inventory is N/A
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Effective 1/1/95
SCHEDULE C
REAL PROPERTY
DESCRIPTION COST MARKET VALUE
- ----------- ---- ------------
None
- --------------------------------------------------------- ----------------- -----------------
- --------------------------------------------------------- ----------------- -----------------
- --------------------------------------------------------- ----------------- -----------------
- --------------------------------------------------------- ----------------- -----------------
Total $0 $0
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SCHEDULE D
OTHER DEPRECIABLE ASSETS
DESCRIPTION COST MARKET VALUE
- ----------- ---- ------------
MACHINERY & EQUIPMENT -
- --------------------------------------------------------- ----------------- -----------------
- --------------------------------------------------------- ----------------- -----------------
- --------------------------------------------------------- ----------------- -----------------
- --------------------------------------------------------- ----------------- -----------------
TOTAL $0 $0
----------------- -----------------
----------------- -----------------
FURNITURE & FIXTURES -
- --------------------------------------------------------- ----------------- -----------------
- --------------------------------------------------------- ----------------- -----------------
- --------------------------------------------------------- ----------------- -----------------
- --------------------------------------------------------- ----------------- -----------------
TOTAL $0 $0
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OFFICE EQUIPMENT -
- --------------------------------------------------------- ----------------- -----------------
- --------------------------------------------------------- ----------------- -----------------
- --------------------------------------------------------- ----------------- -----------------
- --------------------------------------------------------- ----------------- -----------------
TOTAL $0 $0
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LEASEHOLD IMPROVEMENTS -
- --------------------------------------------------------- ----------------- -----------------
- --------------------------------------------------------- ----------------- -----------------
- --------------------------------------------------------- ----------------- -----------------
- --------------------------------------------------------- ----------------- -----------------
TOTAL $0 $0
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VEHICLES -
- --------------------------------------------------------- ----------------- -----------------
- --------------------------------------------------------- ----------------- -----------------
- --------------------------------------------------------- ----------------- -----------------
- --------------------------------------------------------- ----------------- -----------------
TOTAL $0 $0
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SCHEDULE E
PRE-PETITION LIABILITIES
Claimed Allowed
List Total Claims For Each Classification - Amount Amount (b)
- ------------------------------------------- ------ -----------
Secured claims (a) $100,000
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Priority claims other than taxes
---------------- ----------------
Priority tax claims $101,776
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General unsecured claims $5,265,259
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(a) List total amount of claims even if under
(b) Estimated amount of claim to be allowed after compromise or litigation. As an example, you are
of $10,000,000 and a proof of claim is filed in that amount. You believe that you can settle
Schedule E reporting purposes you should list $10,000,000 as the Claimed Amount and $3,000,000
SCHEDULE F
RENTAL INCOME INFORMATION
Effective 1/1/95 Not Applicable to General Business Cases.
STATEMENT OF OPERATIONS
(GENERAL BUSINESS CASE)
FOR THE MONTH ENDED SEPTEMBER, 1998
$
--------
CURRENT MONTH
- ------------------------------------- CUMULATIVE NEXT MONTH
ACTUAL FORECAST VARIANCE (CASE TO DATE) FORECAST
- ----------- ----------- ----------- ----------- -----------
REVENUES
$0 1 Gross Sales $7,000
- ----------- ----------- ----------- ----------- -----------
$0 2 less: Sales Returns & Allowances
- ----------- ----------- ----------- ----------- -----------
$0 3 Net Sales $7,000 $0
- ----------- ----------- ----------- ----------- -----------
$0 4 Less: Cost of Goods Sold (Schedule 'B') $68,271
- ----------- ----------- ----------- ----------- -----------
$0 5 Gross Profit ($61,271) $0
- ----------- ----------- ----------- ----------- -----------
$0 6 Interest $92
- ----------- ----------- ----------- ----------- -----------
7 Other Income:
$996 $996 8 Miscellaneous $996
- ----------- ----------- ----------- ----------------------------------------- ----------- -----------
$0 9
- ----------- ----------- ----------- ----------------------------------------- ----------- -----------
$996 $0 $996 10 TOTAL REVENUES ($60,183) $0
- ----------- ----------- ----------- ----------- -----------
EXPENSES
$0 11 Compensation to Owner(s)/Officer(s)
- ----------- ----------- ----------- ----------- -----------
$0 12 Salaries/Commissions
- ----------- ----------- ----------- ----------- -----------
$0 13 Management Fees
- ----------- ----------- ----------- ----------- -----------
$0 14 Depreciation
- ----------- ----------- ----------- ----------- -----------
$0 15 Taxes:
- ----------- ----------- ----------- ----------- -----------
$0 16 Employer Payroll Taxes
- ----------- ----------- ----------- ----------- -----------
$0 17 Real Property Taxes
- ----------- ----------- ----------- ----------- -----------
$0 18 Other Taxes
- ----------- ----------- ----------- ----------- -----------
$0 19 Other Selling
- ----------- ----------- ----------- ----------- -----------
$14 ($14) 20 Other Administrative $1,735
- ----------- ----------- ----------- ----------- -----------
$0 21 Interest
- ----------- ----------- ----------- ----------- -----------
22 Other Expenses:
$0 23 Storage Rental $1,601
- ----------- ----------- ----------- ----------------------------------------- ----------- -----------
$0 24 Accounting $1,510
- ----------- ----------- ----------- ----------------------------------------- ----------- -----------
$0 25 Press Release $625
- ----------- ----------- ----------- ----------------------------------------- ----------- -----------
$70 ($70) 26 Telecommunications $5,015
- ----------- ----------- ----------- ----------------------------------------- ----------- -----------
$946 ($946) 27 SEC Reporting $3,945
- ----------- ----------- ----------- ----------------------------------------- ----------- -----------
$0 28 Litigation Costs $1,193
- ----------- ----------- ----------- ----------------------------------------- ----------- -----------
$55,156 ($55,156) 29 Write-off of Accounts Receivable $55,156
- ----------- ----------- ----------- ----------------------------------------- ----------- -----------
$2,000,000 ($2,000,000) 30 Writedown of Notes Receivable $2,000,000
- ----------- ----------- ----------- ----------------------------------------- ----------- -----------
$2,056,186 $0 ($2,056,186) 31 TOTAL EXPENSES $2,070,780 $0
- ----------- ----------- ----------- ----------- -----------
($2,055,190) $0 ($2,055,190) 32 SUBTOTAL ($2,130,963) $0
- ----------- ----------- ----------- ----------- -----------
REORGANIZATION ITEMS
$8,265 ($8,265) 33 Professional Fees $233,383
- ----------- ----------- ----------- ----------- -----------
$0 34 Provisions for Rejected Executory Contracts
- ----------- ----------- ----------- Interest Earned on Accumulated Cash
$0 35 Resulting from Chp 11 Case
- ----------- ----------- ----------- ----------- -----------
$0 36 Gain or (Loss) from Sale of Equipment $4,592
- ----------- ----------- ----------- ----------- -----------
$0 37 US Trustee Fees $1,000
- ----------- ----------- ----------- --------------------------------------- ----------- -----------
$0 38 Gain or (Loss) from Sale of Investments
- ----------- ----------- ----------- --------------------------------------- ----------- -----------
$8,265 $0 ($8,265) 39 TOTAL REORGANIZATION ITEMS $229,791 $0
- ----------- ----------- ----------- ----------- -----------
($2,063,455) $0 ($2,063,455) 40 NET PROFIT (LOSS) BEFORE FEDERAL & STATE TAXES ($2,360,754) $0
- ----------- ----------- ----------- ----------- -----------
$0 41 Federal & State Income Taxes
- ----------- ----------- ----------- ----------- -----------
($2,063,455) $0 ($2,063,455) 42 NET PROFIT (LOSS) ($2,360,754) $0
- ----------- ----------- ----------- ----------- -----------
- ----------- ----------- ----------- ----------- -----------
Explanation of Variance to Statement of Operations
(For variances greater than +/- 10% only)
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Effective 1/1/95
SUMMARY OF CASH RECEIPTS AND DISBURSEMENTS
(GENERAL BUSINESS CASE)
FOR THE MONTH ENDED SEPTEMBER, 1998
CASH BALANCE BEGINNING OF MONTH $10,590
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Cash Receipts (1) $996
-----------------
Cash Disbursements (1) $946
-----------------
Excess (Deficiency) of Receipts Over Disbursements $50
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Cash Balance End of Month $10,640
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RECAPITULATION OF FUNDS HELD AT END OF MONTH
Account 1 Account 2 Account 3
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BANK Wells Fargo Bank of America
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ACCOUNT TYPE General Murray&Murray Trust
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ACCOUNT NO. 0114-458243 00357-63272
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ACCOUNT PURPOSE Operations None
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BALANCE, END OF MONTH $10,640 $0
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TOTAL FUNDS ON HAND FOr ALL ACCOUNTS $10,640
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(1) Excluding bank transfers between your accounts.
Effective 1/1/95