EX-99.2 6 ex99-2.txt BUSINESS AND INDUSTRY MONTHLY OPERATING REPORT Exhibit 99.2 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF ARIZONA In re: ) CASE NO. B-00-10938-ECF-RTB ) THE TESSERACT GROUP, INC. ) BUSINESS AND INDUSTRY ) MONTHLY OPERATING REPORT ) ) MONTH OF JUNE ) Debtor(s) ) DATE PETITION FILED: October 6, 2000 ) ) TAX PAYER ID NO. 4101581297 Nature of Debtor's Business: For Profit Educational Services DATE DISCLOSURE STATEMENT: FILED Not Yet Filed TO BE FILED To Be Determined ------------- ---------------- DATE PLAN OF REORGANIZATION: FILED Not Yet Filed TO BE FILED To Be Determined ------------- ---------------- I CERTIFY UNDER PENALTY OF PERJURY THAT THE FOLLOWING MONTHLY OPERATING REPORT AND THE ACCOMPANYING ATTACHMENTS ARE TRUE AND CORRECT TO THE BEST OF MY KNOWLEDGE. RESPONSIBLE PARTY: CEO ---------------------------------------- ---------- ORIGINAL SIGNATURE OF RESPONSIBLE PARTY TITLE Michael Lynch ---------------------------------------- ---------- PRINTED NAME OF RESPONSIBLE PARTY DATE PREPARER: Controller ---------------------------------------- ---------- ORIGINAL SIGNATURE OF PREPARER TITLE Douglass E. Snell ---------------------------------------- ---------- PRINTED NAME OF PREPARER DATE PERSON TO CONTACT REGARDING THIS REPORT: Douglass E. Snell --------------------------------------- PHONE NUMBER: 480-783-4317 --------------------------------------- ADDRESS: 4515 E. Muirwood Dr. Phoenix, AZ 85048 --------------------------------------- ORIGINAL OF REPORT IS FILED WITH THE COURT, COPY IS FILED WITH U.S. TRUSTEE'S OFFICE THE TESSERACT GROUP, INC. B-00-10938-ECF-RTB MONTH: JUNE 2001 RECEIPTS AND DISBURSEMENTS

2 The Tesseract Group (excl. Sunrise) Statement of Operations For the Month Ending June 30, 2001 REVENUE Tuition and Fees Revenue $ 107,684.75 Charter Revenue -- Transportation Revenue -- Food Revenue -- Refunds/Returns (20.73) Discounts -- -------------- Total Revenue 107,664.02 -------------- OPERATIONAL COSTS Salaries and Wages 176,597.82 Taxes and Benefits 14,552.33 Classroom Expenses 80.39 Food Programs Expense -- Transportation Expenses -- Maintenance Expense -- Insurance Expense 46,316.98 Internet Expense -- Rent Expense 3,090.00 Security Services Expense 46.84 Personal Property Tax Expense -- Real Property Tax Expense -- Utilities Expense (5,441.04) -------------- Total Operational Costs 235,243.32 -------------- GENERAL & ADMINISTRATIVE COSTS Advertising, Mktg, Promo Exp -- Audit & Tax Expense -- Bad Debt Expense 19,586.47 Bank Charges/Processing Fees-A 631.30 Computer/Technology Expense -- Consultant Fees Expense -- Investor Relations Expense -- Licenses & Fees Expense -- Office/School Supplies Expense -- Penalties & Late Fees Expense -- Postage and Printing Expense -- Pre-Employment Expense -- Telephone Expense (1,470.67) Travel Expense 183.99 Closed School Expense -- Corporate Overhead 373,569.06 Corporate Overhead Allocated to Sunrise (186,785.00) Other Expenses 244,092.10 -------------- Total General and Administrative Expenses 449,807.25 -------------- Gain/Loss on Sales of Fixed Assets (1,143,892.68) Other Income 618.72 Interest Expense (80,537.09) -------------- Net Interest and Other Income (Expense) (1,223,811.05) -------------- Depreciation Expense -- -------------- Total Depreciation and Amortization -- -------------- REORGANIZATION EXPENSES Professional Fees 7,925.00 Professional Fees Allocated to Sunrise (3,963.00) -------------- Total Reorganization Expenses 3,962.00 -------------- Net Income $(1,805,159.60) ============== 3 The Tesseract Group (excl. Sunrise) Balance Sheet June 30, 2001 ASSETS Current Assets Cash and Cash Equivalents $ 718,127.32 Accounts Receivable, net 2,000.00 Note Receivable from Nobel -- Prepaid Rent -- Other Prepaid Expenses -- -------------- Total Current Assets 720,127.32 Investment in Sunrise 18,971,824.26 Property and Equipment, net -- Deposits and Other Assets 1,512,992.80 -------------- Total Assets $21,204,944.38 ============== LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Accounts Payable $ 13,360.22 Accrued Payroll and Benefits 1,021,490.20 Accrued Payroll Taxes 62,111.49 Deferred Revenue and Tuition Deposits 885,140.74 -------------- Total Current Liabilities 1,982,102.65 -------------- Pre-Petition Liabilities Line of Credit 5,848,822.65 Accounts Payable 3,989,515.21 Other Unsecured Notes Payable 865,500.00 Other Current Liabilities 4,348,790.44 Long-Term Debt 1,703,205.97 -------------- Total Pre-Petition Liabilities 16,755,834.27 -------------- Due to Sunrise 969,876.77 Reserve for Closed Schools 504,099.10 Other Long-Term Obligations 13,999.76 -------------- Total Long-Term Liabilities 1,487,975.63 -------------- Total Liabilities 20,225,912.55 -------------- Shareholders' Equity Pre-Petition Shareholders' Equity 5,309,828.65 Post Petition Retained Deficit (4,330,796.82) -------------- Total Shareholders' Equity 979,031.83 -------------- Total Liabilities and Shareholders' Equity $21,204,944.38 ============== 4 CASE NUMBER: B-00-10938-ECF-RTB STATUS OF ASSETS 0-30 31-60 60+ ACCOUNTS RECEIVABLE TOTAL DAYS DAYS DAYS ------------------- ----- ---- ---- ---- TOTAL ACCOUNTS RECEIVABLE 30,921 2,000 -- 28,921 LESS: AMOUNT CONSIDERED UNCOLLECTIBLE 28,921 28,921 ACCOUNTS RECEIVABLE (NET) 2,000 2,000 -- -- SCHEDULED CURRENT FIXED ASSETS AMOUNT ADDITIONS DELETIONS AMOUNT ------------ ------ --------- --------- ------ REAL PROPERTY 1,867,408 00 1,867,408 (0) BUILDING IMPROVEMENTS/PLANT 846,395 16,066 862,461 (0) ACCUMULATED DEPRECIATION (136,823) (33,112) (169,935) 0 NET BUILDINGS/PLANT 709,573 (17,047) 692,526 (0) EQUIPMENT 5,466,149 11,637 5,477,786 (0) ACCUMULATED DEPRECIATION (2,404,930) (533,426) (2,938,357) 0 NET EQUIPMENT 3,061,218 (521,789) 2,539,429 (0) AUTOS & VEHICLES 557,586 00 557,586 -- ACCUMULATED DEPRECIATION (259,791) (65,272) (325,063) 0 NET AUTOS & VEHICLES 297,795 (65,272) 232,523 0 NOTE: Reduction in assets due to sale of Private and Charter School assets. 5 CASE NUMBER: B-00-10938-ECF-RTB STATUS OF LIABILITIES AND SENSITIVE PAYMENTS POSTPETITION UNPAID OBLIGATIONS TOTAL 0-30 31-60 61-90 91+ ------------------ --------- --------- ----- ----- ------ ACCOUNTS PAYABLE 13,360 (575) -- -- 13,935 TAXES PAYABLE 62,111 62,111 ACCRUED SALARIES AND BENEFITS 1,021,490 1,021,490 PREPAID TUITION AND DEPOSITS 885,141 885,141 SECURED DEBT OTHER (ATTACH LIST) --------- ---------- ---- ---- ------ TOTAL POST-PETITION LIABILITIES 1,982,102 1,968,168 -- -- 13,935 ========= ========== ==== ==== ====== PAYMENTS TO INSIDERS AND PROFESSIONALS INSIDERS AMOUNT PD TOTAL PD NAME REASON FOR PAYMENT THIS MONTH TO DATE ---- ------------------ ---------- ------- Lucian Spataro Wages and Exp. Reimbursement -- 129,134.79 Ernie Recsetar Wages -- 22,000.00 Michael Lynch Wages and Exp. Reimbursement 15,839.79 138,313.35 Gary Lilyquist Wages and Exp. Reimbursement -- 80,239.99 ---------- ----------- TOTAL PAYMENTS TO INSIDERS 15,839.79 369,688.13 ========== =========== PROFESSIONALS DATE OF COURT TOTAL ORDER AUTHORIZING AMOUNT AMOUNT TOTAL PAID INCURRED NAME PAYMENT APPROVED PAID TO DATE & UNPAID ---- ------- -------- ---- ------- -------- Bryan Cave 0 0 47,759.54 Engleman & Berger, PC 0 0 49,127.11 6 CASE NUMBER: B-00-10938-ECF-RTB CASE STATUS QUESTIONNAIRE YES NO --- -- HAVE ANY FUNDS BEEN DISBURSED FROM ANY ACCOUNT OTHER THAN A DEBTOR IN POSSESSION ACCOUNT? NO ARE ANY POSTPETITION RECEIVABLES (ACCOUNTS, NOTES, OR LOANS) DUE FROM RELATED PARTIES? NO ARE ANY WAGE PAYMENTS PAST DUE? NO ARE ANY U.S. TRUSTEE QUARTERLY FEES DELINQUENT? NO CURRENT NUMBER OF EMPLOYEES: 78 INSURANCE CARRIER AND PERIOD EXPIRATION PAYMENT AMOUNT TYPE OF POLICY POLICY NUMBER COVERED DATE & FREQUENCY -------------- ------------- ------- ---- ----------- Gen Liability CLI0020446 3/1/2001 7/31/2001 Paid in full Auto Liability 70APN164181 3/1/2001 7/31/2001 Paid in full Excess Liability UMI0000567 3/1/2001 7/31/2001 Paid in full Workers Comp 307512-4 12/1/2000 11/30/2001 Monthly as a % of PR Blanket Contents 59UUMUN3158 3/1/2001 7/31/2001 Paid in full WHAT STEPS HAVE BEEN TAKEN TO REMEDY ANY OF THE PROBLEMS THAT BROUGHT ABOUT THE CHAPTER 11 FILING? Purchasing of new schools has ceased, and administrative expenses have been reduced. Other restructuring measures are being considered. LIST ANY MATTERS THAT ARE DELAYING THE FILING OF A PLAN OF REORGANIZATION? 7 THE TESSERACT GROUP, INC. CONSOLIDATED CASH FLOW ANALYSIS Total For June 2001 ------------- BEGINNING FUNDS AVAILABLE: $ 825,376.87 ------------- Cash In: Telecheck $ 210,153.45 Credit Card Deposit (Preschools) 426,294.78 Credit Card Deposit (Private) 831.02 Credit Card Deposit (Charter) -- Regular Deposits (Preschools) 417,960.63 Regular Deposits (Private) 7,734.89 Regular Deposits (Charter) 120,169.38 Regular Deposits (Corporate) 9,851.39 Other Deposit (Charter) -- Interest 568.07 Interest on LTC Acct -- Voids 815.00 ------------- Daily Cash In: $1,194,378.61 ============= Cash Out: Preschool A/P $ 398,788.18 Charter A/P 5,128.25 Private A/P -- Corporate A/P 119,316.76 TesseracT Payroll 165,526.57 Preschool Payroll 456,029.26 Charter Payroll 123,240.79 College PR -- Preschool NSF 329.00 Medical Claims -- Banking and Payroll Fees 21,055.14 LTC Payment -- LTC Fees -- ------------- Daily Cash Out: $1,289,413.95 ============= Net Cash In/Out: $ (95,035.34) ------------- ENDING FUNDS AVAILABLE: $ 730,341.53 ============= 8 THE TESSERACT GROUP, INC. CASH FLOW ANALYSIS B-00-10938-ECF-RTB Total For June 2001 ------------ BEGINNING FUNDS AVAILABLE: $ 651,600.84 ------------ Cash In: Credit Card Deposit (Private) $ 831.02 Credit Card Deposit (Charter) -- Regular Deposits (Private) 7,734.89 Regular Deposits (Charter) 120,169.38 Regular Deposits (Corporate) 9,851.39 Other Deposit (Charter) -- Interest 568.07 ------------ Daily Cash In: $ 139,154.75 ============ Cash Out: Charter A/P $ 5,128.25 Private A/P -- Corporate A/P 119,316.76 Corporate A/P (allocated to Sunrise) (59,658.38) TesseracT Payroll 165,526.57 Charter Payroll 123,240.79 Medical Claims -- Banking Fees 21,055.14 LTC Payment -- Voids (815.00) ------------ Daily Cash Out: $ 373,794.13 ============ Net Cash In/Out: $(234,639.38) ------------ ENDING FUNDS AVAILABLE: $ 416,961.46 ============ 9 Corporate Company VENDOR CHECK REGISTER REPORT Payables Management * Voided Checks

10 Owned Charters VENDOR CHECK REGISTER REPORT Payables Management * Voided Checks

TESSERACT GROUP INC 8-K