DEBTOR: In Store Media Systems, Inc. MONTHLY FINANCIAL REPORT
CHAPTER 11
CASE NUMBER: 02-28289 EEB
For Period: August 1, 2003 to August 31, 2003
COVER SHEET
Accounting Method Used: [ x ] Accrual Basis [ ] Cash Basis
- --------------------------------------------------------------------------------
THIS REPORT IS DUE 15 DAYS AFTER THE END OF THE MONTH
Mark One Box for Each Debtor must attach each of the following
Required Document reports/documents unless the U.S. Trustee has waived
the requirement in writing. File the original with
the Clerk of Court. Submit a duplicate, with original
signature, to the U.S. Trustee.
- ----------------------- -------------- ------------------------------------------------------------------------------
Report/Document Previously
Attached Waived REQUIRED REPORTS/DOCUMENTS
- ----------------------- -------------- ------------------------------------------------------------------------------
[ x ] [ ] Cash Receipts and Disbursements Statement (Form 2-B)
[ x ] [ ] Supporting Schedules (Form 2-C)
[ x ] [ ] Balance Sheet (Form 2-D)
[ x ] [ ] Profit and Loss (Form 2-E)
[ x ] [ ] Quarterly Fee Summary (Form 2-F)
[ x ] [ ] Narrative (Form 2-G)
[ x ] [ ] Bank Statements for All Bank Accounts
[ x ] [ ] Bank Statement Reconciliations for All Bank Accounts
- ----------------------- -------------- ------------------------------------------------------------------------------
I declare under penalty of perjury that the following Monthly Financial Report,
and any attachments thereto, are true and correct to the best of my knowledge
and belief.
Executed on: September 15, 2003 Debtor(s): In Store Media Systems, Inc.
By: /s/ William P. Stelt
Position: Chief Financial Officer (Acting)
Form 2-A
Rev 10/01/01
DEBTOR: In Store Media Systems, Inc. CASE NO. 02-28289 EEB
---------------------------
CASH RECEIPTS AND DISBURSEMENTS STATEMENT
As of August 31, 2003
CASH RECONCILIATION
1. Beginning Cash Balance (Ending Cash Balance $340.76 from last month's
report)
2. Cash Receipts (From Cash Receipts Journal $33,678.61 on next page)
3. Cash Disbursements (From Cash Disbursements $9,327.97 Journal on next page)
4. Net Cash Flow (Line 2 minus Line 3) $24,350.64
5. Ending Cash Balance (To Form 2-D) $24,691.40
============================
CASH SUMMARY - ENDING BALANCE
Amount Financial Institution
Petty Cash $0.00
Regular Checking - New DIP $21,313.62
Regular Checking - Old DIP $9.99 Wells Fargo
New DIP Checking $3,367.79 Wells Fargo
Regular Checking - Payroll $0.00 Wells Fargo
Short-Term Investments $0.00 Wells Fargo
TOTAL (Must agree with line 5 above) $24,691.40
============================
Form 2-A
Rev 10/01/01
In Store Media Systems, Inc.
CASE NO. 02-28289 EEB
CASH RECEIPTS AND DISBURSEMENTS STATEMENT
For Period August 1 to August 31, 2003
CASH RECEIPTS JOURNAL
Date Description (Source) Amount
- ---- -------------------- ------
Operating Account Activity
08/06/03 Acclaim Financial Group Post Petition Loan $30,000.00
08/06/03 Acclaim Financial Group Post Petition Loan $3,367.79
08/07/03 ISMSI Payroll Acct Transfer Close Payroll Account $229.20
08/07/03 ISMSI Operating Acct Transfer Close Operating Account $81.62
Total Operating Account Activity (Receipts) $33,678.61
Payroll Account Activity
Total Payroll Account Activity (Receipts) $0.00
Total Cash Receipts (to line 2 of
Cash Reconciliation) $33,678.61
CASH DISBURSEMENTS JOURNAL
Date Ck Nos. Payee Description (Purpose) Amount
- ---- ------- ----- --------------------- ------
Operating Account Activity
08/05/03 1 ADX Fire Protection Office Maintenance $28.00
08/05/03 2 CDS Associates Computer Support $157.50
08/05/03 3 Corporate Stock Transfer Stock Transfer Agent $174.42
08/05/03 4 Freund Investments July Office Rent $500.00
08/05/03 5 Id Communications Internet Service $92.85
08/05/03 6 Inter-Tel Telephone System Lease $389.41
08/05/03 7 PublicEase July 8k Filing with SEC $285.00
08/05/03 8 Univance Long Distance Telephone $85.92
08/05/03 9 William P. Stelt Contract Labor $1,000.00
08/05/03 10 Xcel Energy Corporation Utilities $607.08
08/05/03 11 US Trustee's Office Trustee Fees $250.00
08/07/03 Transfer ISMSI Trfr from Old Payroll Acct Close out old account $229.20
08/07/03 Transfer ISMSI Trfr from Old Op Acct Close out old account $81.62
08/08/03 Bk Debit Wells Fargo Check order $78.28
08/12/03 Bk Debit Wells Fargo Check order $24.00
08/13/03 2001 Allegiance Telecom Telephone $598.83
08/13/03 2002 CDS Associates Computer Support $525.00
08/13/03 2003 Corporate Stock Transfer Stock Transfer Agent $75.00
08/13/03 2004 Void $0.00
08/13/03 2005 Id Communications Internet Service $185.70
08/13/03 2006 Inter-Tel Telephone System Lease $389.41
08/13/03 2007 Kelly McGrew Contract Labor $1,500.00
08/13/03 2008 PublicEase Filing Support to SEC $320.00
08/13/03 2009 Univance Telephone $46.56
08/13/03 2010 William P. Stelt Contract Labor $1,000.00
08/13/03 2011 Xcel Energy Corporation Utilities $384.24
08/22/03 2012 Richard Springs Contract Labor $300.00
Total Operating Account Activity (Disbursements) $9,308.02
Payroll Account Activity
08/01/03 Bk Debit Wells Fargo Payroll Express Payroll Svc Charge $19.95
Total Payroll Account Activity $19.95
Total Cash Disbursements (to
line 3 of Cash Reconciliation) $9,327.97
=========================
Less: Intra Company Disbursements $310.82
Net Disbursements (to Schedule 2 F) $9,017.15
=========================
Form 2-B
Rev 10/01/01
DEBTOR: In Store Media Systems, Inc. CASE NO. 02-28289
SUPPORTING SCHEDULES
For Period August 1 to August 31, 2003
POST-PETITION TAXES PAYABLE SCHEDULE
The Debtor pays all taxes at the time of payroll processing to its Payroll
Service (Wells Fargo Express Pay). Payments are made by ACH transfer the day
before the payroll is due. Debtor pays payroll on the 15th and End of Month
therefore at the end of each month, the debtor has paid all payroll taxes due to
the Payroll Service.
Beg Balance* Additions Pmts/Deposits Date Paid Check No. End Balance
------------ --------- ------------- --------- --------- -----------
Income Tax Withheld
Federal $0.00 $0.00
State $0.00 $0.00
FICA Tax Withheld (SS & Medicare) $0.00 $0.00
Employer's FICA Tax (SS & Medicare) $0.00 $0.00
Unemployment Tax:
Federal $0.00 $0.00
State $0.00 $0.00
Sales,Use & Excise Taxes $0.00 $0.00
Property Taxes $0.00 $0.00
Accrued Income Tax:
Federal $0.00 $0.00
State $0.00 $0.00
Other: $0.00 $0.00
TOTALS (Post Petition End Bal to Form 2-D) $0.00 $0.00 $0.00 $0.00
* For first report, Beginning Balance will be $0; thereafter, Beginning Balance
will be Ending Balance from prior report.
INSURANCE SCHEDULE
Carrier/Agent Amt of Coverag ePolicy Exp Date
Workers' Compensation Hartford Cancelled as of 1/1/03 No Employees Prem Paid Date
- --------------------- -------- ----------------------------------- --------------
General Liability Accordia Wells Fargo $1,000,000.00 12/31/03
Property Accordia Wells Fargo $20,000.00 12/31/03
Vehicle N/A N/A N/A N/A
Other
Form 2-C
Rev 10/01/01
DEBTOR: In Store Media Systems, Inc. CASE NO. 02-28289 EEB
SUPPORTING SCHEDULES
For Period August 1 to August 31, 2003
ACCOUNTS RECEIVABLE AND POST PETITION PAYABLE AGING
Due Post Petition
Accounts Rec Accounts Payable
Under 30 Days $0.00 $16,471.21
30 to 60 Days $0.00 $12,329.23
61 to 90 Days $0.00 $8,547.68
91 to 120 Days $0.00 $7,533.25
Over 120 Days
Total Post Petition $0.00 xxxxxxxxxxxxxxxxx
Pre Petition Amts $0.00 xxxxxxxxxxxxxxxxx
Total Accounts Receivable $0.00 xxxxxxxxxxxxxxxxx
Less: Bad Debt Reserve $0.00 xxxxxxxxxxxxxxxxx
Net Accounts Receivable (To Form 2-D) $0.00 xxxxxxxxxxxxxxxxx
Total Post Petition Accounts Payable $44,881.37
(To Form 2-D)
SCHEDULE OF PAYMENTS TO ATTORNEYS AND OTHER PROFESSIONALS
Date of Estimated
Amt Paid Court Approval Balance Due*
-------- -------------- ------------
Debtor's Counsel $25,000.00 Pre-Petition Retainer $21,925.86 (Included in A/P)
Counsel for Unsecured Creditors' Com $0.00
Trustee's Counsel $0.00
Accountant $0.00
Other: Debtor's Corporate Counsel $25,000.00 Pre-Petition Retainer $18,256.87 (Included in A/P)
*Balance due to include fees and expenses incurred but not yet paid.
SCHEDULE OF PAYMENTS AND TRANSFERS TO PRINCIPALS/EXECUTIVES**
Payee Name Position Nature of Payment Amount
**List payments and transfers of any kind and in any form made to or for the
benefit of any proprietor, owner, partner, shareholder, officer or director.
Form 2-C
Rev 10/01/01
DEBTOR: In Store Media Systems, Inc. CASE NO. 02-28289 EEB
BALANCE SHEET - As of August 31, 2003
ASSETS
Current Assets:
Cash (From Form 2-B, line 5) $24,691.40
Accounts Receivable $0.00
Inventory $0.00
Other Current Assets: $118,032.00
-----------
Total Current Assets $142,723.40
-----------
Fixed Assests:
Land $0.00
Leasehold Improvements $0.00
Equipment, Furn & Fixtures $0.00
Total Fixed Assets $0.00
Less: Accumulated Depreciation $0.00
Net Fixed Assets $0.00
-----
Other Long Term Assets:
Debt Issuance Costs $0.00
Patents (Net of Amortization) $91,147.12
$ 91,147.12
TOTAL ASSETS $233,870.52
==================
LIABILITIES
Post Petition Liabilities
Accounts Payable (from Form 2E) $633,591.27
Less: Pre-Petition $588,709.90 $44,881.37
-----------
Accrued Fees & Expenses $16,457.65
Accrued Interest Payable $15,563.26
Accrued - AFG II $50,000.00
Loans & Notes Payable to Directors $23,100.00
Total Post Petition Liabilities $150,002.28
Pre-Petition Liabilities:
Priority Claims
Secured Debt $403,950.22
Unsecured Debt $1,751,038.57
Total Pre-Petition Liabilities $2,154,988.79
TOTAL LIABILITIES $2,304,991.07
==================
OWNERS' EQUITY
Capital Stock $87,826.14
Paid-In Capital $21,312,720.30
Preferred Stock $500,000.00
Preferred Stock Dividends ($86,055.56)
Stock Subscriptions $325,000.00
Treasury Stock ($563,750.00)
Retained Earnings:
Pre-Petition ($21,029,172.61)
Pre- Petition Net Income (1/1-11/11/02) ($1,986,496.80)
Post Petition Net Income (11/12/02-08/31/03) ($631,192.02)
TOTAL OWNERS' EQUITY ($2,071,120.55)
TOTAL LIABILITIES AND OWNERS' EQUITY $233,870.52
==================
Form 2-D
Rev 10/01/01
DEBTOR: In Store Media Systems, Inc. CASE NO. 02-28289 EEB
PROFIT AND LOSS STATEMENT
For Period August 1 to August 31, 2003
Gross Operating Revenue $0.00
Less: Discounts, Returns and Allowances $0.00
Net Operating Revenues $0.00
Cost of Goods Sold $0.00
Gross Profit $0.00
Operating Expenses:
Salaries and Wages $0.00
Rents and Leases $137.00
Payroll Taxes $0.00
Advertising & Promotion $0.00
Auto Expense $0.00
Bank Charges $0.00
Contract Labor $2,800.00
Computer Repairs & Maintenance $0.00
Employee Incentives/Med Benefits $0.00
Equipment Rentals $0.00
Insurance Expense Write off Debt Costs $142,593.26
Lender Expenses $2,535.70
Licenses & Fees $0.00
Miscellaneous and Other $0.00
Office Funishings & Supplies/Printing $875.34
Payroll Service $19.95
Press Releases
Regulatory Compliance Exp (SEC, etc.)
Sales and Property Taxes $0.00
Telephone/Fax/Internet $661.49
Transfer Agent Fees $175.00
Trash Removal & Utilities $893.03
Travel and Entertainment $0.00
Total Operating Expenses $150,690.77
Operating Income (Loss) ($150,690.77)
Legal and Professional Fees $207.73
Depreciation, Depletion and Amortization $3,700.00
Interest Expense
Net Operating Income (Loss) ($154,598.50)
Non-Operating Income and Expenses
Other Non-Operating (Expenses) $0.00
Gains (Losses) on Sale of Assets Write off of FF&E ($119,830.10)
Interest Income $0.00
Other Non-Operating Income $0.00
Net Non-Operating Income or (Expenses) ($119,830.10)
Net Income (Loss) Before Income Taxes ($274,428.60)
Federal and State Income Tax Expense (Benefit) $0.00
NET INCOME (LOSS) ($274,428.60)
==================
Form 2-E
Rev 10/01/01
DEBTOR: In Store Media Systems, Inc. CASE NO. 02-28289 EEB
Quarterly Fee Summary (1)
Month Ended August 31, 2003
Month Cash Disbursements (2) Quarterly Fee Due Check No. Date
- ----- ---------------------- ----------------- --------- ----
January $5,287.50
February $2,346.87
March $11,074.27
Total 1st Qtr $18,708.64 $500.00 18076 4/24/2003
April $8,157.65
May $2,289.03
June $2,957.88
Total 2nd Qtr $13,404.56 $250.00 11 8/5/2003
July $27.36
August $9,017.15
September $0.00
Total 3rd Qtr $9,044.51 $0.00
October $0.00
November $0.00
December $0.00
Total 4th Qtr $0.00 $0.00
(1) This summary is to reflect the current calendar year's information
cumulative to the end of the reporting period.
(2) Should agree with line 3, Form 2-B. Disbursements are net of transfers to
other debtor in possession bank accounts.
Form 2-F
Rev 10/01/01
DEBTOR: In Store Media Systems, Inc. CASE NO: 02-28289 EEB
NARRATIVE
For Period August 1 to August 31, 2003
1. The Debtor received initial funding as part of its Court approved
financing arrangement with Acclaim Financial Group Venture II, LLC
("AFGII").
2. The Debtor continued to pursue its litigation against Let's Go Shopping
("LGS") et al and is continuing to evaluate the potential of filing
other additional claims against LGS and other entities and individuals.
3. As part of the Debtor's strategy to devote its financial resources
primarily to pursuing its litigation strategy in an effort to maximize
recovery, the Debtor closed its Aurora, Colorado location at the end of
August. The Debtor continues to be supported by local staff and by
management personnel located out of state.
4. As part of management's decision to close the office, certain
accounting adjustments were recorded in August to write off the "Debt
Issuance Costs" which the Debtor had been carrying on its books and
amortizing and certain leasehold improvements, obsolete demonstration
equipment and miscellaneous furniture and fixtures all which had no
future value or would have cost the Debtor to auction off or otherwise
dispose of.
5. As required under the Credit Facility, and to facilitate reporting, the
Debtor closed its existing accounts and opened 2 new bank accounts with
the same financial institution, Wells Fargo Bank. Any existing funds
were transferred in August to the new Operating DIP account.
Form 2-G
Rev 10/01/01
In Store Media Systems, Inc.
Bank Reconciliation Worksheet
Month of: August 2003
New Operating DIP Acct # 823-6331735
Acct # 1 Balance per Bank $22,594.59
Add:
Deposits in Transit $0.00
Less:
Checks Outstanding
` 2002 ($525.00)
2006 ($389.41)
2008 ($320.00)
2009 ($46.56)
Balance per Books $21,313.62
In Store Media Systems, Inc.
Bank Reconciliation Worksheet
Month of: August 2003
New Operating DIP Acct # 823-6364702
Acct # 2 Balance per Bank $3,367.79
Add:
Deposits in Transit $0.00
Less:
Checks Outstanding $0.00
Balance per Books $3,367.79
In Store Media Systems, Inc.
Bank Reconciliation Worksheet
Month of: August 2003
Old Operating DIP Acct # 920-4116355
Acct # 3 Balance per Bank $9.99
Add:
Deposits in Transit $0.00
Less:
Checks Outstanding $0.00
Balance per Books $9.99
In Store Media Systems, Inc.
Bank Reconciliation Worksheet
Month of: August 2003
Old Payroll DIP Acct # 920-4110861
Acct # 4 Balance per Bank ($48.95)
Add:
Deposits in Transit $0.00
Bank Reversal $48.95
Less:
Checks Outstanding $0.00
Balance per Books $0.00