DEBTOR: In Store Media Systems, Inc. MONTHLY FINANCIAL REPORT
CHAPTER 11
CASE NUMBER: 02-28289 MER
For Period: October 1, 2004 to October 31, 2004
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: November 15, 2004 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 MER
---------------------------
CASH RECEIPTS AND DISBURSEMENTS STATEMENT
As of October 31, 2004
CASH RECONCILIATION
1. Beginning Cash Balance (Ending Cash Balance from last month's report) $10,301.88
2. Cash Receipts (From Cash Receipts Journal on next page) $ 0.00
3. Cash Disbursements (From Cash Disbursements Journal on next page) $ 2,518.59
4. Net Cash Flow (Line 2 minus Line 3) $(2,518.59)
5. Ending Cash Balance (To Form 2-D) $ 7,783.29
==========
CASH SUMMARY - ENDING BALANCE
Amount Financial Institution
Petty Cash $0.00
Regular Checking - New DIP $0.00
Regular Checking - Old DIP $0.00 Wells Fargo
New DIP Checking $ 7,783.29 Wells Fargo
Regular Checking - Payroll $0.00 Wells Fargo
Short-Term Investments $0.00 Wells Fargo
TOTAL (Must agree with line 5 above) $ 7,783.29
==============
Form 2-B
Rev 10/01/01
In Store Media Systems, Inc.
CASE NO. 02-28289 MER
CASH RECEIPTS AND DISBURSEMENTS STATEMENT
For Period October 1 to October 31, 2004
CASH RECEIPTS JOURNAL
Date Description (Source) Amount
- ---- -------------------- ------
Operating Account Activity $0.00
$0.00
Total Operating Account Activity (Receipts) $0.00
Payroll Account Activity
Total Payroll Account Activity (Receipts) $0.00
Total Cash Receipts (to line 2 of Cash Reconciliation) $0.00
CASH DISBURSEMENTS JOURNAL
Date Ck Nos. Payee Description (Purpose) Amount
- ---- ------- ----- -------------------- ------
Operating Account Activity
10/15/04 2085 Mini U Storage Void Check Lost in Mail $(85.00)
10/15/04 2091 US Trustee Trustee Fees $250.00
10/15/04 2092 Sheridan Ross Patent Maintenance Fee $660.00
10/15/04 2093 Mini U Storage Storage Fee $85.00
10/15/04 2094 Don Uhi Expense Reimbursement $153.00
10/15/04 2095 Corporate Stock Transfer Transfer Agent Fees $75.00
10/15/04 2096 William P. Stelt Contract Labor/Exp Reimb $1,128.89
10/15/04 2097 Vintage Filings LLC SEC Filing Fees $243.00
10/15/04 BK Debit Wells Fargo Bank Service Charge $8.70
Total Operating Account Acivity (Disbursements) $2,518.59
Other Account Activity
Total Other Account Activity $0.00
Total Cash Disbursements (to
line 3 of Cash Reconciliation) $2,518.59
===========
Less: Intra Company Disbursements
Net Disbursements (to Schedule 2 F) $2,518.59
===========
Form 2-B
Rev 10/01/01
DEBTOR: In Store Media Systems, Inc. CASE NO. 02-28289 MER
SUPPORTING SCHEDULES
For Period October 1 to October 31, 2004
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 Prem Paid Date
- ------------------ -------- ----------------------------------- --------------
None Required
Form 2-C
Rev 10/01/01
DEBTOR: In Store Media Systems, Inc. CASE NO. 02-28289 MER
SUPPORTING SCHEDULES
For Period October 1 to October 31, 2004
ACCOUNTS RECEIVABLE AND POST PETITION PAYABLE AGING
Due Post Petition
Accounts Rec Accounts Payable
Under 30 Days $0.00 $ 1,392.33
30 to 60 Days $0.00 $ 1,569.76
61 to 90 Days $0.00 $ 1,157.59
91 to 120 Days $0.00 $ 39,141.78
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 $ 43,261.46
(To Form 2-D)
SCHEDULE OF PAYMENTS TO ATTORNEYS AND OTHER PROFESSIONALS
Date of Estimated
Amt Paid Court Approval Balance Due*
-------- -------------- ------------
Debtor's Counsel $35,000.00 Pre-Petition Retainer $24,163.73 (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 $19,097.73 (Included in A/P)
Brownstein, Hyatt and Farber $207,248.67 (Accrued not 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
---------- -------- ----------------- ------
Don Uhl Expense Reimbursement $153.00
**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 October 31, 2004
ASSETS
Current Assets:
Cash (From Form 2-B, line 5) $ 7,783.29
Accounts Receivable $0.00
Inventory $0.00
Other Current Assets: $ 52,094.46
-----------
Total Current Assets $ 59,877.15
-----------
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) $81,191.33
$ 81,191.33
TOTAL ASSETS $141,069.08
==================
LIABILITIES
Liabilities Not Subject to Compromise
Current Liabilities
Accounts Payable (from Form 2E) $655,763.27
Less: Pre-Petition $612,501.81 $ 43,261.46
Accrued Fees & Expenses $207,332.00
Accrued Interest Payable $ 62,608.79
AFG II Secured DIP Credit Facility $ 70,000.00
Secured AFG Note $100,000.00
Total Post Petition Liabilities $483,202.25
Liabilities Subject to Compromise
Pre-Petition Liabilities:
Unsecured Debt $2,233,309.29
Total Pre-Petition Liabilities $2,233,309.29
TOTAL LIABILITIES $2,716,511.54
==============
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 ($21,029,172.64)
Pre- Petition Net Income (1/1-11/11/02) ($1,991,678.60)
Post Petition Net Income (11/12/02-10/31/04) (1,130,332.10)
TOTAL OWNERS' EQUITY ($2,575,442.46)
TOTAL LIABILITIES AND OWNERS' EQUITY $141,069.08
==================
Form 2-D
Rev 10/01/01
DEBTOR: In Store Media Systems, Inc. CASE NO. 02-28289 MER
PROFIT AND LOSS STATEMENT
For Period October 1 to October 31, 2004
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 $215.00
Payroll Taxes $0.00
Advertising & Promotion $0.00
Auto Expense $0.00
Bank Charges $8.70
Contract Labor $1,000.00
Computer Repairs & Maintenance $0.00
Employee Incentives/Med Benefits $0.00
Equipment Rentals $0.00
Insurance Expense $0.00
Lender Expenses $0.00
Licenses & Fees $97.22
Miscellaneous and Other $0.00
Office Funishings & Supplies/Printing $151.89
Payroll Service $0.00
Press Releases $0.00
Regulatory Compliance Exp (SEC, etc.) $243.00
Sales and Property Taxes $0.00
Telephone/Fax/Internet $0.00
Transfer Agent Fees $75.00
Trash Removal & Utilities $0.00
Travel and Entertainment $0.00
Total Operating Expenses $1,790.81
Operating Income (Loss) ($1,790.81)
Legal and Professional Fees $0.00
Depreciation, Depletion and Amortization $700.00
Interest Expense $3,959.29
Net Operating Income (Loss) ($6,450.10)
Reorganization Items:
Legal and Professional Fees ($48,524.34)
Net Loss before Other Items & Taxes $42,074.24
Non-Operating Income and Expenses
Other Non-Operating (Expenses) $0.00
Gains (Losses) on Sale of Assets $0.00
Interest Income $0.00
Other Non-Operating Income $0.00
Net Non-Operating Income or (Expenses) $0.00
Net Income (Loss) Before Income Taxes $42,074.24
Federal and State Income Tax Expense (Benefit) $0.00
NET INCOME (LOSS) $42,074.24
==================
Form 2-E
Rev 10/01/01
DEBTOR: In Store Media Systems, Inc. CASE NO. 02-28289 MER
Quarterly Fee Summary (1)
Month Ended October 31, 2004
Month Cash Disbursements (2) Quarterly Fee Due Check No. Date
- ----- ---------------------- ----------------- --------- ----
January $1,692.35
February $1,447.47
March $1,493.50
Total 1st Qtr $4,633.32 $250.00 2065 4/16/2004
April $1,776.66
May $3,227.93
June $1,426.92
Total 2nd Qtr $6,431.51 $250.00 2076 7/15/2004
July $1,812.56
August $1,528.09
September $1,402.14
Total 3rd Qtr $4,742.79 $250.00 2091 10/15/2004
October $2,518.59
November $0.00
December $0.00
Total 4th Qtr $2,518.59 $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 MER
NARRATIVE
For Period October 1 to October 31, 2004
1. The Debtor is awaiting the determination of the Bankruptcy Court as to the
adequacy of the Debtor's plan of reorganization.
2. The Debtor made several adjusting entries to record audit adjustments
arising from the external audit of the Debtor records for the 4th quarter
of 2002 and the full year 2003. Such entries impacted certain pre-petition
liabilities and the Debtor's equity accounts. The audit is not yet
complete and additional entries may arise.
3. During the period the Debtor recorded the receipt of the LGS settlement of
$50,000.00 as a reduction of legal expenses, the funds were received by
Debtor's bankruptcy attorney in September but not reported to the Debtor
until October. Such funds are being held in trust by the Debtor's
bankruptcy counsel.
Form 2-G
Rev 10/01/01
In Store Media Systems, Inc.
Bank Reconciliation Worksheet
Month of: October 2004
New Operating DIP Acct # 823-6331735
Acct # 1 Balance per Bank $ 8,514.29
Add:
Deposits in Transit $0.00
Less:
Checks Outstanding
US Trustee 2091 $250.00
Mini U Storage 2093 $85.00
Don UHL 2094 $153.00
Vintage Filings 2097 $243.00
Balance per Books $7,783.29