EX-99.2 3 fnestate_8kex99-2.txt FEBRUARY 2005 EXHIBIT 99.2 IN RE: FN ESTATE, INC. DEBTORS. CASE NO. 03-23143 REPORTING PERIOD: FEBRUARY, 2005 PRIVILEGED AND CONFIDENTIAL INFORMATION MAY BE INCLUDED UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF PENNSYLVANIA In re: FN Estate, Inc. Case No. 03-23143 Debtors. Reporting Period: February, 2005 FN ESTATE, INC. MONTHY OPERATING REPORT ($ IN REAL NUMBERS) ------------------------------------------------------------------------------------------------------------------------------------ FILE WITH COURT AND SUBMIT COPY TO UNITED STATES TRUSTEE WITHIN 20 DAYS AFTER END OF MONTH Submit copy of report to any official committee appointed in the case. ------------------------------------------------------------------------------------------------------------------------------------ DOCUMENT EXPLANATION REQUIRED DOCUMENTS FORM NO. ATTACHED ATTACHED ------------------------------------------------------------------------------------------------------------------------------------ SCHEDULE OF CASH RECEIPTS AND DISBURSEMENTS MOR - 1 X ------------------------------------------------------------------------------------------------------------------------------------ Bank Reconciliation (or copies of debtor's bank reconciliations) MOR - 1 (CON'T) X ------------------------------------------------------------------------------------------------------------------------------------ Copies of Bank Statements X ------------------------------------------------------------------------------------------------------------------------------------ Cash disbursements journals X ------------------------------------------------------------------------------------------------------------------------------------ STATEMENT OF OPERATIONS MOR - 2 X ------------------------------------------------------------------------------------------------------------------------------------ BALANCE SHEET MOR - 3 X ------------------------------------------------------------------------------------------------------------------------------------ STATUS OF POSTPETITION TAXES MOR - 4 X ------------------------------------------------------------------------------------------------------------------------------------ Copies of IRS Form 6123 or payment receipt ------------------------------------------------------------------------------------------------------------------------------------ Copies of tax returns filed during reporting period X ------------------------------------------------------------------------------------------------------------------------------------ SUMMARY OF UNPAID POST PETITION DEBTS MOR - 4 X ------------------------------------------------------------------------------------------------------------------------------------ Listing of aged accounts payable X ------------------------------------------------------------------------------------------------------------------------------------ ACCOUNTS RECEIVABLE RECONCILIATION AND AGING MOR - 5 X ------------------------------------------------------------------------------------------------------------------------------------ DEBTOR QUESTIONNAIRE MOR - 5 X ------------------------------------------------------------------------------------------------------------------------------------ I declare under penalty of perjury (28 U.S.C. Section 1746) that this report and the attached documents are true and correct to the best of my knowledge and belief. ----------------------------------------------------------------------------- --------------------------------- Signature of Debtor Date ----------------------------------------------------------------------------- --------------------------------- Signature of Joint Debtor Date /s/ Tamie Barsky 5/19/05 ----------------------------------------------------------------------------- --------------------------------- Signature of Authorized Individual* Date Tamie Barsky Administrative Agent ----------------------------------------------------------------------------- --------------------------------- Printed Name of Authorized Individual Title of Authorized Individual Page 2

UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF PENNSYLVANIA In re: FN Estate, Inc. Case No. 03-23143 Debtors. Reporting Period : February, 2005 FN ESTATE, INC. SCHEDULE OF CASH RECEIPTS AND DISBURSEMENTS ($ IN REAL NUMBERS) -------------------------------------------------------------------------------- CURRENT CUMULATIVE MONTH FILING TO DATE -------------------------------------------------------------------------------- ACTUAL ACTUAL -------------------------------------------------------------------------------- CASH - BEGINNING OF MONTH * $ 3,411,312 $ 938,508 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- RECEIPTS: Collection of Accounts Receivable 9,880 12,918,048 Asset Sale Proceeds (Net) -- 6,512,269 Other 139,292 7,010,691 -------------------------------------------------------------------------------- TOTAL RECEIPTS 149,172 26,441,008 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- DISBURSEMENTS: -------------------------------------------------------------------------------- Payroll and Related Benefits 37,490 5,714,748 Travel and Entertainment 2 87,527 Insurance -- 220,780 Utilities -- 9,633,543 Occupancy 2,901 760,638 Other -- 537 G&A 145,144 7,586,797 -------------------------------------------------------------------------------- TOTAL DISBURSEMENTS 185,537 24,004,569 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- NET CASH FLOW (36,365) 2,436,439 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- CASH - END OF MONTH $ 3,374,947 $ 3,374,947 -------------------------------------------------------------------------------- * ENDING CASH INCLUDES RESTRICTED CASH RELATED TO APPLIED THEORY ESTATE, (HSBC ACCOUNT). THE FOLLOWING SECTION MUST BE COMPLETED -------------------------------------------------------------------------------- DISBURSEMENTS FOR CALCULATING U.S. TRUSTEE QUARTERLY FEES (FROM CURRENT MONTH) -------------------------------------------------------------------------------- TOTAL DISBURSEMENTS 185,537 -------------------------------------------------------------------------------- Less: Transfers to Debtor In Possession Accounts -------------------------------------------------------------------------------- Plus: Estate Disbursements Made by Outside Sources (i.e. from escrow accounts) -------------------------------------------------------------------------------- TOTAL DISBURSEMENTS FOR CALCULATING U.S. TRUSTEE QUARTERLY FEES 185,537 -------------------------------------------------------------------------------- Page 3 UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF PENNSYLVANIA In re: FN Estate, Inc. Case No. 03-23143 Debtors. Reporting Period : February, 2005 FN ESTATE, INC. BANK RECONCILIATION ($ IN REAL NUMBERS) -------------------------------------------------------------------------------------------------------------------------- BANK ACCOUNTS ---------------------------------------------------------------------------------------------------- WACHOVIA OPERATING CORP JANNEY PETTY DIP HSBC * DEBIT MONTGOMERY CASH TOTAL ------------------------------------------------------------------------------- BALANCE PER BOOKS $2,450,923.02 $314,247.85 $ 98.97 $609,222.81 $454.43 $3,374,947.08 BANK BALANCE $2,467,702.26 $314,247.85 $ 98.97 $609,222.81 $454.43 $3,391,726.32 Plus: Deposits In Transit -- Less: Outstanding Checks (16,779.24) (16,779.24) Other: Adjustment -- ------------------------------------------------------------------------------- BALANCE PER BOOKS $2,450,923.02 $314,247.85 $ 98.97 $609,222.81 $454.43 $3,374,947.08 =============================================================================== * BANK ACCOUNT HSBC REPRESENTS RESTRICTED CASH RELATED TO APPLIED THEORY ESTATE. EXPLANATIONS: ------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------------ Page 4

UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF PENNSYLVANIA In re: FN Estate, Inc. Case No. 03-23143 Debtors. Reporting Period : February, 2005 FN ESTATE, INC. DISBURSEMENTS FOR PERIOD 2/01/05 TO 02/28/05 ($ IN REAL NUMBERS) ------------------------------------------------------------------------------------------------------------------------------------ TRX DATE JRNL NO. AUDIT TRAIL TRANSACTION REFERENCE NAME AMOUNT ------------------------------------------------------------------------------------------------------------------------------------ 2/3/2005 476,672 PMTRX00002435 ACH Nov, Dec,Jan fax invoice VERIZON 667.86 2/4/2005 476,673 PMTRX00002436 ACH Dec04 USLEC rent inv US LEC 2,460.00 2/4/2005 476,680 PMCHK00001461 ACH Payroll fees ADP 195.00 2/4/2005 476,681 PMCHK00001461 ACH Investor communication ADP 440.83 2/4/2005 476,682 PMCHK00001461 Check US LEC Stock Trans 450.00 2/4/2005 476,684 CMTRX00003114 Check Capital Recovery Corporation ADP 154.67 2/7/2005 476,686 CMTRX00003116 Check Central Self Storage ADP 3,514.04 2/8/2005 476,688 CMTRX00003117 ACH Payroll ck date 2/10/05 ADP 11,543.76 2/9/2005 476,689 PMTRX00002438 ACH Reed Smith fees Aug-Nov04 Reed Smith Shaw & McClay 149,339.42 2/10/2005 476,694 CMTRX00003118 ACH Payroll Taxes ck date 2/10/05 ADP 7,572.00 2/18/2005 476,734 CMTRX00003120 ACH Payroll fees 2/6/05 ADP 112.32 2/22/2005 476,744 CMTRX00003122 ACH Payroll ck date 2/24/05 ADP 5,382.32 2/23/2005 476,746 PMTRX00002440 ACH Rossini commis Dun & Bradstreet 64.18 2/23/2005 476,747 PMTRX00002441 ACH 1/15 to 2/22 IT support Rufus Harvey 337.50 2/24/2005 476,753 CMTRX00003123 ACH Payroll taxes ck date 2/24/05 ADP 2,814.45 2/24/2005 476,754 CMTRX00003123 ACH 2004 Tax reports ADP 297.63 2/25/2005 476,755 CMTRX00003124 ACH Payroll fees 1/31/05 ADP 55.00 Other various Bank Service Charges 135.82 ------------- Total Disbursements $ 185,536.80 Page 5

UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF PENNSYLVANIA In re: FN Estate, Inc. Case No. 03-23143 Debtors. Reporting Period : February, 2005 FN ESTATE, INC. STATEMENT OF OPERATIONS ($ IN REAL NUMBERS) -------------------------------------------------------------------------------- CUMULATIVE FEBRUARY FILING TO DATE -------------------------------------------------------------------------------- Net Revenues $ -- $ 15,520,301 Cost of Sales -- 10,981,525 ----------------------------- GROSS MARGIN $ -- $ 4,538,776 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES: Marketing & Selling Expenses $ -- $ 932,435 G&A Payroll Expenses 20,489 4,092,716 Occupancy Expenses 2,445 417,881 Bankruptcy Expenses 66,819 3,553,478 General and Administrative Expenses 18,726 3,807,735 Depreciation and Amortization -- 2,594,695 ----------------------------- TOTAL SG&A EXPENSES $ 108,480 $ 15,398,939 ----------------------------- Operating Income (Loss) $ (108,480) $(10,860,163) OTHER INCOME (EXPENSE): Interest Expense $ -- $ 3,720,371 Interest Income 2,610 (21,759) Other -- (6,265,690) Impairment / Restructuring Charges -- 17,053,482 Discharge of Indebtedness 0 0 ----------------------------- TOTAL OTHER INCOME (EXPENSE) $ 2,610 $ 14,486,405 ----------------------------- Net Income Including Reorganization Items $ (105,869) $ 3,626,242 ================================================================================ REORGANIZATION ITEMS: Professional Fees $ 66,819 $ 66,819 U.S. Trustee Quarterly Fee -- 3,475,409 Interest Earned on Accumulated Cash from Ch.11 -- 14,500 Gain (Loss) From Sale of Equipment -- -- Gain on pre-petition real estate valuation -- -- ----------------------------- TOTAL REORGANIZATION ITEMS $ 66,819 $ 3,556,728 Page 6 UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF PENNSYLVANIA In re: FN Estate, Inc. Case No. 03-23143 Debtors. Reporting Period : February, 2005 FN ESTATE, INC. BALANCE SHEET ($ IN REAL NUMBERS) -------------------------------------------------------------------------------- BOOK VALUE AT END OF CURRENT ASSETS REPORTING MONTH -------------------------------------------------------------------------------- CURRENT ASSETS Cash & Cash Equivalents $ 3,060,699 Restricted Cash 314,248 Accounts Receivable 2,552,957 Less: Allowance for doubtful accounts 2,512,596 -------------- NET ACCOUNTS RECEIVABLE 40,361 Prepaid and Other Current Assets 126,305 Notes and Other Receivables - US Lec -- Property and Equipment, net 850 Other Assets 649,944 -------------- TOTAL ASSETS $ 4,192,408 ================================================================================ -------------------------------------------------------------------------------- BOOK VALUE AT END OF CURRENT LIABILITIES & STOCKHOLDERS' EQUITY REPORTING MONTH -------------------------------------------------------------------------------- LIABILITIES NOT SUBJECT TO COMPROMISE: Accounts Payable $ 94,458 Other Accrued Liabilities 2,373,875 Deferred Revenue -- -------------- 2,468,332 Other Liabilities 13,662 -------------- TOTAL POSTPETITION LIABILITIES 2,481,994 DUE TO RELATED COMPANIES 12,086,238 LIABILITIES SUBJECT TO COMPROMISE: Secured Debt 7,061 Priority Debt 32,844 Unsecured Debt 16,267,005 -------------- TOTAL PRE-PETITION LIABILITIES 16,306,910 STOCKHOLDERS' EQUITY: Common and Preferred Stock 78,434,584 Note Receivable (75,880) Accumulated deficit (103,614,186) Treasury Cost (1,427,252) -------------- TOTAL SHAREHOLDERS EQUITY (26,682,734) -------------- TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 4,192,408 ================================================================================ Page 7 UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF PENNSYLVANIA In re: FN Estate, Inc. Case No. 03-23143 Debtors. Reporting Period : February, 2005 FN ESTATE, INC. STATUS OF POSTPETITION TAXES ($ IN REAL NUMBERS) ------------------------------------------------------------------------------------------------------------------ BEGINNING AMOUNT TAX WITHHELD AMOUNT CHECK NO. ENDING TAX LIABILITY OR ACCRUED PAID DATE PAID OR EFT LIABILITY ------------------------------------------------------------------------------------------------------------------ FEDERAL ================================================================================================================== Withholding $ -- $ 5,376.59 $ 5,376.59 2/10, 2/24/05 EFT $ -- FICA - Employee -- 1,941.94 1,941.94 2/10, 2/24/05 EFT -- FICA - Employer 1,249.39 1,363.61 1,941.92 2/10, 2/24/05 EFT 671.08 Unemployment 33.60 (33.60) -- -- Income -- -- Other -- -- ------------------------------------------------------------------------------------------------------------------ TOTAL FEDERAL TAXES $ 1,282.99 $ 8,648.54 $ 9,260.45 $ 671.08 ================================================================================================================== STATE AND LOCAL ------------------------------------------------------------------------------------------------------------------ Withholding $ -- $ 1,033.16 $ 1,033.16 2/10, 2/24/05 EFT $ -- Sales (304.76) -- -- (304.76) Excise -- -- Unemployment and Disability 140.03 (117.18) 22.85 2/10, 2/24/05 EFT (0.00) Real Property -- -- Personal Property -- -- Other: OPT 30.00 84.00 114.00 State Corp -- -- Local -- -- ------------------------------------------------------------------------------------------------------------------ TOTAL STATE AND LOCAL $ (134.73) $ 999.98 $ 1,056.01 $ (190.76) ------------------------------------------------------------------------------------------------------------------ Total Taxes $ 1,148.26 $ 9,648.52 $ 10,316.46 $ 480.32 ================================================================================================================== SUMMARY OF UNPAID POST PETITION DEBTS ($ IN REAL NUMBERS) ------------------------------------------------------------------------------------------------------------------- NUMBER OF DAYS PAST DUE --------------------------------------------------------------------- 0 - 30 31 - 60 61 - 90 OVER 90 TOTAL ------------------------------------------------------------------------------------------------------------------- Accounts Payable $ 19,995.63 $ 0.00 $ 0.00 $ 25,838.62 $ 45,834.25 Wages Payable 8,781.10 8,781.10 Taxes Payable 480.32 480.32 Rent / Leases - Building -- -- -- 3,137.96 3,137.96 Rent / Leases - Equipment -- -- -- 5,571.17 5,571.17 Secured Debt / Adequate Protection Payments -- Professional Fees -- -- 39,188.69 39,188.69 Amounts Due to Insiders * -- Other: -- Other: -- -------------------------------------------------------------------------------------------------------------------- TOTAL POSTPETITION DEBTS $ 29,257.05 $ -- $ -- $ 73,736.44 $ 102,993.49 ==================================================================================================================== * "INSIDER" IS DEFINED IN 11 U.S.C. SECTION 101(31) EXPLAIN HOW AND WHEN THE DEBTOR INTENDS TO PAY ANY PAST-DUE POSTPETITION DEBTS. ------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------------ Page 8

UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF PENNSYLVANIA In re: FN Estate, Inc. Case No. 03-23143 Debtors. Reporting Period: February, 2005 FN Estate, Inc POST-PETITION ACCOUNTS PAYABLE AGING AS OF FEBRUARY 28, 2005

Page 9 UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF PENNSYLVANIA In re: FN Estate, Inc. Case No. 03-23143 Debtors. Reporting Period : February, 2005 FN ESTATE, INC. ACCOUNTS RECEIVABLE RECONCILIATION AND AGING ($ IN REAL NUMBERS) -------------------------------------------------------------------------------- ACCOUNTS RECEIVABLE RECONCILIATION AMOUNT ------------------------------------------------------------------ ------------ Total Accounts Receivable at the beginning of the reporting period $ 2,562,642 + Amounts billed during the period -- - Amounts collected during the period (9,880) + Adjustments (Credit Memos, Debit Memos, journal entries) 195 + Other Adjustments ------------------------------------------------------------------ ------------ TOTAL ACCOUNTS RECEIVABLE AT THE END OF THE REPORTING PERIOD $ 2,552,957 ================================================================================ ------------------------------------------------------------------ ------------ ACCOUNTS RECEIVABLE AGING AMOUNT ------------------------------------------------------------------ ------------ 0 - 30 days old $ -- 31 - 60 days old (214) 61 - 90 days old (9,235) 91+ days old 2,562,406 ------------------------------------------------------------------ ------------ TOTAL ACCOUNTS RECEIVABLE 2,552,957 Amount considered uncollectable (Bad Debt) (2,512,596) ------------------------------------------------------------------ ------------ ACCOUNTS RECEIVABLE (NET) (EXCLUDING ACCRUALS) $ 40,361 ================================================================================ DEBTOR QUESTIONNAIRE Please provide an explanation below for any yes answers. -------------------------------------------------------------------------------- MUST BE COMPLETED EACH MONTH YES NO ------------------------------------------------------- ----- ----- 1. Have any assets been sold or transferred outside the normal course of business this reporting period? X ------------------------------------------------------- ----- ----- 2. Have any funds been disbursed from any account other than a debtor in possession accounts this reporting period? X ------------------------------------------------------- ----- ----- 3. Have any prepetition taxes been paid during the reporting period? X ------------------------------------------------------- ----- ----- 4. Have all postpetition tax returns been timely filed? X ------------------------------------------------------- ----- ----- 5. Are any postpetition real estate taxes past due? X ------------------------------------------------------- ----- ----- 6. Are any postpetition state or federal income taxes past due? X ------------------------------------------------------- ----- ----- 7. Are any postpetition payroll taxes past due? X ------------------------------------------------------- ----- ----- 8. Are any other postpetition taxes past due? X ------------------------------------------------------- ----- ----- 9. Are any amounts owed to postpetition creditors past due? X ------------------------------------------------------- ----- ----- 10. Have any postpetition loans been received by the debtor from any party? X ------------------------------------------------------- ----- ----- 11. Have any payments been made on prepetition liabilities this reporting period? X ------------------------------------------------------- ----- ----- 12. Are any wage payments past due? X ------------------------------------------------------- ----- ----- 13. Are any postpetition receivable (accounts, notes, or loans) due from related parties? X ------------------------------------------------------- ----- ----- EXPLANATIONS: -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Page 10

FN ESTATE INC 8-K