EX-99.01 2 a04-10768_1ex99d01.htm EX-99.01

Exhibit 99.01

 

UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA

 

In re:  LIBERATE TECHNOLOGIES

 

Case No.

04-31394

 

 

 

 

 

 

CHAPTER 11

 

 

MONTHLY OPERATING REPORT

 

 

(GENERAL BUSINESS CASE)

 

SUMMARY OF FINANCIAL STATUS

 

 

 

MONTH ENDED:

August 31, 2004

 

 

PETITION DATE:

 

April 30, 2004

 

 

 

 

 

 

 

 

 

 

 

 

1.

 

Debtor in possession (or trustee) 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

$1

 

 

 

 

 

 

 

 

 

2.

 

Asset and Liability Structure

 

End of Current
Month

 

End of Prior
Month

 

As of Petition
Filing

 

 

 

a.  Current Assets

 

$

214,746,926

 

$

216,401,927

 

 

 

 

 

b.  Total Assets

 

$

223,558,942

 

$

224,743,928

 

$

231,576,772

 

 

 

c.  Current Liabilities

 

$

10,377,582

 

$

9,638,996

 

 

 

 

 

d.  Total Liabilities

 

$

29,955,822

 

$

29,316,113

 

$

51,408,340

 

 

3.

 

Statement of Cash Receipts & Disbursements for Month

 

Current Month

 

Prior Month

 

Cumulative
(Case to Date)

 

 

 

a.  Total Receipts

 

$

831,485

 

$

641,036

 

$

2,933,249

 

 

 

b.  Total Disbursements

 

$

3,590,772

 

$

2,143,434

 

$

9,814,472

 

 

 

c.  Excess (Deficiency) of Receipts Over Disbursements (a - b)

 

$

(2,759,287

)

$

(1,502,398

)

$

(6,881,222

)

 

 

d.  Cash Balance Beginning of Month

 

$

202,259,223

 

$

203,761,621

 

$

206,381,159

 

 

 

e.  Cash Balance End of Month (c + d)

 

$

199,499,937

 

$

202,259,223

 

$

199,499,937

 

 

 

 

 

 

Current Month

 

Prior Month

 

Cumulative
(Case to Date)

 

4.

 

Profit/(Loss) from the Statement of Operations

 

$

(3,118,385

)

$

(2,621,630

)

$

(6,122,488

)

5.

 

Account Receivables (Pre and Post Petition)

 

$

3,958,122

 

$

2,364,657

 

 

 

6.

 

Post-Petition Liabilities

 

$

10,377,582

 

$

9,638,996

 

 

 

7.

 

Past Due Post-Petition Account Payables (over 30 days)

 

$

158,365

 

$

15,986

 

 

 

 

At the end of this reporting month:

 

Yes

 

No

 

8.

 

Have any payments been made on pre-petition debt, 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)

 

ý

 

 

 

9.

 

Have any payments been made to professionals?  (if yes, attach listing including date of payment, amount of payment and name of payee)

 

ý

 

 

 

10.

 

If the answer is yes to 8 or 9, were all such payments approved by the court?

 

ý

 

 

 

11.

 

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)

 

ý

 

 

 

12.

 

Is the estate insured for replacement cost of assets and for general liability?

 

ý

 

 

 

13.

 

Are a plan and disclosure statement on file?

 

ý

 

 

 

14.

 

Was there any post-petition borrowing during this reporting period?

 

 

 

ý

 

 

15.

 

Check if paid: Post-petition taxes

ý

;                    U.S. Trustee Quarterly Fees

 

; Check if filing is current for: Post-petition

 

 

 

tax reporting and tax returns:

ý

.

 

 

 

(Attach explanation, if post-petition taxes or U.S. Trustee Quarterly Fees are not paid current or if post-petition tax reporting and tax return filings are not current.)

 

 

1.                           Total assets and total liabilities as of petition filing as indicated in items 2.b. and 2.d. above are based on our unaudited financial statements as of April 30, 2004, the date of our petition, adjusted for the fair value of our property and equipment and investment in subsidiaries.  The adjusted total liabilities as of April 30, 2004 included an accrual of excess facilities charges of approximately $26 million previously recorded as a result of several restructurings.

 

2.                           The attached Balance Sheet and the Statement of Operations are only related to our U.S. entity which filed a voluntary petition under Chapter 11 and do not include our foreign subsidiaries.  Accordingly, these financial statements do not represent the consolidated financial condition and results of operations which we normally report in our SEC filings.

 

3.                           Financial forecasts for the months of August and September 2004 provided in the attached Statement of Operations are based on our estimates of revenues and expenses.  These estimates may not include all adjustments that are necessary for reporting under generally accepted accounting principles.  Actual results may differ materially from our estimates.

 

4.                           The attached financial statements do not account for (i) the contingent liabilities that are listed in the Second Amended List of Creditors Holding 30 Largest Unsecured Claims, inclusive of a disputed claim by our former landlord and various contingent litigation claims and (ii) other contingent liabilities identified in proofs of claims filed in connection with the Chapter 11 proceeding.

 

5.                           Certain historical financial information provided in this monthly operating report is derived from our unaudited financial statements as of and for the month ended August 31, 2004.  Therefore, certain historical financial information contained in this report may be subject to adjustment.

 

I declare under penalty of perjury I have reviewed the above summary and attached financial statements, and after making reasonable inquiry believe these documents are correct.

 

Date:

9/20/04

 

/s/ Gregory S. Wood

 

Gregory S. Wood, Executive Vice President and CFO

 

 

 

 


 

STATEMENT OF OPERATIONS

(General Business Case)

For the Month Ended

August 31, 2004

 

 

Current Month

 

 

 

 

 

 

Cumulative

 

Next Month

 

Actual

 

Forecast

 

Variance

 

 

 

 

 

 

(Case to Date)

 

Forecast

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

$

785,754

 

$

650,000

 

$

135,754

 

 

1

 

Gross Sales

 

$

4,279,329

 

$

150,000

 

 

 

 

 

$

—

 

 

2

 

less: Sales Returns & Allowances

 

 

 

 

 

$

785,754

 

$

650,000

 

$

135,754

 

 

3

 

Net Sales

 

$

4,279,329

 

$

150,000

 

$

—

 

 

 

$

—

 

 

4

 

less: Cost of Goods Sold        (Schedule ‘B’)

 

 

 

 

 

$

785,754

 

$

650,000

 

$

135,754

 

 

5

 

Gross Profit

 

$

4,279,329

 

$

150,000

 

$

219,726

 

$

170,000

 

$

49,726

(a)

 

6

 

Interest

 

$

698,333

 

$

200,000

 

 

 

 

 

$

—

 

 

7

 

Other Income:

 

 

 

 

 

 

 

 

 

 

$

—

 

 

8

 

 

 

 

 

 

 

 

 

 

 

 

$

—

 

 

9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

1,005,480

 

$

820,000

 

$

185,480

 

 

10

 

Total Revenues

 

$

4,977,662

 

$

350,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses:

 

 

 

 

 

$

198,229

 

$

200,000

 

$

1,771

 

 

11

 

Compensation to Owner(s)/Officer(s)

 

$

835,427

 

$

200,000

 

$

284,245

 

$

411,263

 

$

127,018

(b)

 

12

 

Salaries

 

$

950,672

 

$

418,815

 

$

—

 

 

 

 

$

—

 

 

13

 

Commissions

 

$

(8,052

)

 

 

$

121,621

 

$

142,778

 

$

21,157

(c)

 

14

 

Contract Labor

 

$

268,773

 

$

96,578

 

 

 

 

 

 

 

 

 

 

Rent/Lease:

 

 

 

 

 

 

 

 

 

$

—

 

 

15

 

Personal Property

 

$

—

 

 

 

$

26,269

 

$

26,269

 

$

—

 

 

16

 

Real Property

 

$

245,378

 

$

26,269

 

$

100,050

 

$

110,833

 

$

10,783

 

 

17

 

Insurance

 

$

240,562

 

$

67,333

 

$

1,183,300

 

$

1,200,000

 

$

16,700

 

 

18

 

Management Fees

 

$

5,474,876

 

$

1,100,000

 

$

27,138

 

$

27,500

 

$

362

 

 

19

 

Depreciation

 

$

72,624

 

$

27,500

 

 

 

 

 

 

 

 

 

 

Taxes:

 

 

 

 

 

$

16,474

 

$

25,000

 

$

8,526

(d)

 

20

 

Employer Payroll Taxes

 

$

109,812

 

$

17,500

 

 

 

 

 

$

—

 

 

21

 

Real Property Taxes

 

$

—

 

 

 

$

13,750

 

$

13,750

 

$

—

 

 

22

 

Other Taxes

 

$

98,062

 

$

13,750

 

 

 

 

 

$

—

 

 

23

 

Other Selling

 

 

 

 

 

 

 

 

 

$

—

 

 

24

 

Other Administrative

 

 

 

 

 

$

28,291

 

$

11,000

 

$

(17,291

) 

 

25

 

Interest

 

$

58,113

 

$

15,000

 

$

969,448

 

$

(41,099

) 

$

(1,010,547

) 

 

26

 

Other Expenses:

 

 

$

787,057

 

$

961,102

 

 

 

 

 

$

—

 

 

27

 

 

 

 

 

 

 

 

 

 

 

$

—

 

 

28

 

 

 

 

 

 

 

 

 

 

 

$

—

 

 

29

 

 

 

 

 

 

 

 

 

 

 

$

—

 

 

30

 

 

 

 

 

 

 

 

 

 

 

$

—

 

 

31

 

 

 

 

 

 

 

 

 

 

 

$

—

 

 

32

 

 

 

 

 

 

 

 

 

 

 

$

—

 

 

33

 

 

 

 

 

 

 

 

 

 

 

$

—

 

 

34

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

2,968,815

 

$

2,127,294

 

$

(841,521

) 

 

35

 

Total Expenses

 

$

9,133,304

 

$

2,943,847

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

(1,963,335

)

$

(1,307,294

)

$

(656,041

) 

 

36

 

Subtotal

 

$

(4,155,642

)

$

(2,593,847

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reorganization Items:

 

 

 

 

 

$

(1,160,810

)

$

(400,000

)

$

760,810

(e)

 

37

 

Professional Fees

 

$

(2,108,500

)

$

(400,000

)

 

 

 

 

$

—

 

 

38

 

Provisions for Rejected Executory Contracts

 

 

 

 

 

$

23,910

 

$

20,000

 

$

3,910

 

 

39

 

Interest Earned on Accumulated Cash from

 

$

87,807

 

$

20,000

 

 

 

 

 

 

 

 

 

 

Resulting Chp 11 Case

 

 

 

 

 

 

 

 

 

$

—

 

 

40

 

Gain or (Loss) from Sale of Equipment

 

 

 

 

 

$

(14,666

)

 

 

$

14,666

 

 

41

 

U.S. Trustee Quarterly Fees

 

$

(14,666

)

$

(3,333

)

 

 

 

 

$

—

 

 

42

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

(1,151,566

)

$

(380,000

)

$

(771,566

)

 

43

 

Total Reorganization Items

 

$

(2,035,359

)

$

(383,333

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

(3,114,901

)

$

(1,687,294

)

$

(1,427,607

)

 

44

 

Net Profit (Loss) Before Federal & State Taxes

 

$

(6,191,001

)

$

(2,977,180

)

$

3,484

 

 

 

$

(3,484

)

 

45

 

Federal & State Income Taxes

 

$

(68,513

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

(3,118,385

)

$

(1,687,294

)

$

(1,431,091

)

 

46

 

Net Profit (Loss)

 

$

(6,122,488

)

$

(2,977,180

)

 

Attach an Explanation of Variance to Statement of Operations (For variances greater than +/- 10% only):

 


 

LIBERATE TECHNOLOGIES

SUPPLEMENTAL SCHEDULE FOR STATEMENT OF OPERATIONS

(General Business Case)

For the Month Ended 

August 31, 2004

 

 

Details of Other Expenses (line 26):

 

Current Month

 

 

 

 

 

 

Cumulative
(Case to Date)

 

Next Month
Forecast

 

Actual

 

Forecast

 

Variance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

26

 

Other Expenses:

 

 

 

 

 

$

(597,132

)

$

(597,132

) 

$

—

 

 

 

 

Amortization of warrants

 

$

(597,132

) 

$

298,566

 

$

(45,012

) 

 

 

$

(45,012

)(f)

 

 

 

Bad debt expense

 

$

(509,460

)

 

 

$

(18,090

) 

$

52,029

 

$

70,119

(g)

 

 

 

Computers, voice and data

 

$

264,072

 

$

52,029

 

$

607,548

 

 

 

$

(607,548

)(h)

 

 

 

Excess facilities charges

 

$

2,580,129

 

 

 

 

$

22,205

 

$

15,405

 

$

(6,800

)

 

 

 

Facility charges

 

$

210,928

 

$

13,905

 

$

(1,900

)

 

 

 

$

1,900

(i)

 

 

 

Foreign currency transaction gain, net

 

$

(589,231

)

 

 

$

391,861

 

$

200,000

 

$

(191,861

)(j)

 

 

 

Professional fees

 

$

(280,832

)

$

300,000

 

$

(2,471

)

 

 

$

2,471

 

 

 

 

Write-down of fixed assets

 

$

76,624

 

 

 

$

123,456

 

$

125,000

 

$

1,544

 

 

 

 

Intercompany Projects billings

 

$

542,966

 

$

125,000

 

$

398,959

 

$

163,599

 

$

(235,360

)(k)

 

 

 

Miscellaneous

 

$

(911,007

)

$

171,602

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

969,448

 

$

(41,099

)

$

(1,010,547

) 

 

 

 

 

 

$

787,057

 

$

961,102

 

 

Explanation of Variances:

 

(a)               Rising interest rates have increased the amount of interest that our accounts earn.

 

(b)               Several employees have left the company since May 2004 and we have not replaced them all.  Forfeitures under our Restricted Stock Unit program also decreased salary expense in August 2004.

 

(c)               In August 2004, we continued to utilize contract labor to fill certain open positions that had previously been filled by employees.

 

(d)               Payroll taxes are a function of payroll, and lower than budgeted payroll in August 2004 resulted in lower payroll tax expense for the month.

 

(e)               The actuals include fees for the counsel to the creditors committee and other professional fees that were uncertain therefore unable to forecast. These amounts related to the bankruptcy that were not part of the Augsust 2004 forecast.

 

(f)                 In August 2004, we recorded bad debt expense of approximately $45,000.  Due to the uncertainty related to bad debt expense, we do not include this item in our monthly forecast.

 

(g)              In August 2004 we received a credit of $62,300 from a vendor related to charges that had been in dispute.

 

(h)              In August 2004 we updated the assumptions used to derive the excess facilities charge on the San Carlos facility.  This is not an item that we include in our monthly forecast.

 

(i)                 In June 2004, we recorded a net foreign currency transaction gain of approximately $327,000.  Traditionally, we have incurred a net foreign currency transaction gain or loss in the range of $200,000 to $600,000 a month.  Due to the uncertainty related to currency fluctuations, we do not include this item in our monthly forecast.

 

(j)                 Legal fees related to the shareholder litigation actions were greater than expected.

 

(k)             In August 2004 our travel expenses were $40,000 below forecast, we received some unexpected cash related to a discontinued business and we recorded some costs associated with revenue contracts that had previously been deferred.

 


 

BALANCE SHEET

(General Business Case)

For the Month Ended 

August 31, 2004

 

 

 

 

 

 

From Schedules

 

Market Value

 

 

  Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1

 

Cash and cash equivalents - unrestricted

 

 

 

 

$

199,499,937

 

2

 

Cash and cash equivalents - restricted

 

 

 

 

$

10,351,869

 

3

 

Accounts receivable (net)

 

 

A

 

$

3,958,122

 

4

 

Inventory

 

 

B

 

$

—

 

5

 

Prepaid expenses

 

 

 

 

$

405,971

 

6

 

Professional retainers

 

 

 

 

$

531,027

 

7

 

Other:

 

 

 

 

 

 

 

8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

9

 

Total Current Assets

 

 

 

 

$

214,746,926

 

 

 

 

 

 

 

 

 

 

 

 

Property and Equipment (Market Value)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10

 

Real property

 

 

C

 

$

—

 

11

 

Machinery and equipment

 

 

D

 

$

89,126

 

12

 

Furniture and fixtures

 

 

D

 

$

3,081

 

13

 

Office equipment

 

 

D

 

$

46,603

 

14

 

Leasehold improvements

 

 

D

 

$

344,449

 

15

 

Vehicles

 

 

D

 

$

5,550

 

16

 

Other:

 

 

 

D

 

 

 

17

 

 

 

 

 

D

 

 

 

18

 

 

 

 

 

D

 

 

 

19

 

 

 

 

 

D

 

 

 

20

 

 

 

 

 

D

 

 

 

 

 

 

 

 

 

 

 

 

21

 

Total Property and Equipment

 

 

 

 

$

488,809

 

 

 

 

 

 

 

 

 

 

 

 

Other Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

22

 

Loans to shareholders

 

 

 

 

 

 

23

 

Loans to affiliates

 

 

 

 

 

 

24

 

 

Investment in Subsidiaries

 

 

 

 

$

8,273,869

 

25

 

 

Other

 

 

 

 

$

49,338

 

26

 

 

 

 

 

 

 

 

 

27

 

 

 

 

 

 

 

 

 

28

 

Total Other Assets

 

 

 

 

$

8,323,207

 

 

 

 

 

 

 

 

 

 

29

 

Total Assets

 

 

 

 

$

223,558,942

 

 

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.

 

1.               The market value of current assets approximates their book value as of August 31, 2004 due to the short-term nature of these assets.

2.               The market value of the investment in subsidiaries consists of the aggregate balance of the subsidiaries’ cash and cash equivalents, net of their total liabilities, and the estimated market value of their property and equipment, which approximates 5% of the total cost of the property and equipment.

3.               See Schedule D for discussion of the market value of property and equipment.

 


 

Liabilities and Equity

(General Business Case)

 

 

Liabilities From Schedules

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Post-Petition

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

30

 

Salaries and wages

 

 

 

 

 

 

31

 

Payroll taxes

 

 

 

 

 

 

32

 

Real and personal property taxes

 

 

 

 

 

 

33

 

Income taxes

 

 

 

 

 

 

34

 

Sales taxes

 

 

 

 

 

 

35

 

Notes payable (short term)

 

 

 

$

—

 

 

36

 

Accounts payable (trade)

 

A

 

$

298,282

 

 

37

 

Real property lease arrearage

 

 

 

 

 

 

38

 

Personal property lease arrearage

 

 

 

 

 

 

39

 

Accrued professional fees

 

 

 

$

2,891,437

 

 

40

 

Current portion of long-term post-petition debt (due within 12 months)

 

 

 

 

 

 

41

 

Other:

Deferred Revenue

 

 

 

 

$

6,488,986

 

 

42

 

 

 

Miscellaneous

 

 

 

 

$

698,877

 

 

43

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

44

 

Total Current Liabilities

 

 

 

$

10,377,582

 

 

 

 

 

 

 

 

 

 

 

45

 

Long-Term Post-Petition Debt, Net of Current Portion

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

46

 

Total Post-Petition Liabilities

 

 

 

$

10,377,582

 

 

 

 

 

 

 

 

 

 

 

Pre-Petition Liabilities (allowed amount)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

47

 

Secured claims

 

F

 

$

8,204,174

 

 

48

 

Priority unsecured claims

 

F

 

$

138,572

 

 

49

 

General unsecured claims

 

F

 

$

11,235,494

 

 

 

 

 

 

 

 

 

 

 

50

 

Total Pre-Petition Liabilities

 

 

 

$

19,578,240

 

 

 

 

 

 

 

 

 

 

 

51

 

Total Liabilities

 

 

 

$

29,955,822

 

 

 

 

 

 

 

 

 

 

 

 

Equity (Deficit)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

52

 

Retained Earnings/(Deficit) at time of filing

 

 

 

$

(1,295,239,896

)

 

53

 

Capital Stock

 

 

 

$

1,057,353

 

 

54

 

Additional paid-in capital

 

 

 

$

1,502,552,731

 

 

55

 

Cumulative profit/(loss) since filing of case

 

 

 

$

(6,122,488

)

 

56

 

Post-petition contributions/(distributions) or (draws)

 

 

 

 

 

 

57

 

 

 

Deferred stock compensation

 

 

 

 

$

(7,946,649

)

 

 

 

 

 

Unrealized gain(loss) on investments held for sale

 

 

 

 

$

(16,388

)

 

58

 

Market value adjustment

 

 

 

$

(681,543

)

 

 

 

 

 

 

 

 

 

 

59

 

Total Equity (Deficit)

 

 

 

$

193,603,120

 

 

 

 

 

 

 

 

 

 

 

60

Total Liabilities and Equity (Deficit)

 

 

 

$

223,558,942

 

 

 


 

SCHEDULES TO THE BALANCE SHEET

(General Business Case)

 

Schedule A

Accounts Receivable and (Net) Payable

 

Receivables and Payables Agings

 

Accounts Receivable
[Pre and Post Petition]

 

Accounts Payable
[Post Petition]

 

Past Due
Post Petition Debt

 

0 -30 Days

 

$

3,806,579

 

$

139,917

 

 

 

31-60 Days

 

$

6,121

 

$

158,365

 

 

 

61-90 Days

 

$

126,427

 

 

 

$

158,365

 

91+ Days

 

$

93,190

 

 

 

 

 

Total accounts receivable/payable

 

$

4,032,317

 

$

298,282

 

 

 

Allowance for doubtful accounts

 

$

74,195

 

 

 

 

 

Accounts receivable (net)

 

$

3,958,122

 

 

 

 

 

 

Schedule B

Inventory/Cost of Goods Sold

 

Types and Amount of Inventory(ies)

 

Inventory(ies)
Balance at
End of Month

 

Cost of Goods Sold

 

 

 

 

 

 

 

Inventory Beginning of Month

 

 

 

 

 

 

 

Add -

 

 

 

Retail/Restaurants -

 

 

 

Net purchase

 

 

 

Product for resale

 

 

 

Direct labor

 

 

 

 

 

 

 

Manufacturing overhead

 

 

 

Distribution -

 

 

 

Freight in

 

 

 

Products for resale

 

 

 

Other:

 

 

 

 

 

 

 

 

 

 

 

Manufacturer -

 

 

 

 

 

 

 

Raw Materials

 

 

 

 

 

 

 

Work-in-progress

 

 

 

Less -

 

 

 

Finished goods

 

 

 

Inventory End of Month

 

 

 

 

 

 

 

Shrinkage

 

 

 

Other - Explain

 

 

 

Personal Use

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of Goods Sold

 

$

0

 

TOTAL

 

$

0

 

 

 

 

 

 

 

 

 

 

 

 

 

Method of Inventory Control

 

 

 

Inventory Valuation Methods

 

 

 

Do you have a functioning perpetual inventory system?

 

 

 

Indicate by a checkmark method of inventory used.

 

 

 

Yes o    No o

 

 

 

 

 

 

How often do you take a complete physical inventory?

 

 

 

Valuation methods -

 

 

 

 

 

 

 

FIFO cost

 

 

 

Weekly

 

 

 

 

 

LIFO cost

 

 

 

Monthly

 

 

 

 

 

Lower of cost or market

 

 

 

Quarterly

 

 

 

 

 

Retail method

 

 

 

Semi-annually

 

 

 

 

 

Other

 

 

 

Annually

 

 

 

 

 

Explain

 

 

 

Date of last physical inventory was

 

 

 

 

 

 

 

 

 

 

 

Date of next physical inventory is

 

 

 

 

 

 


 

Schedule C

Real Property

 

 

 

Cost

 

Market Value

 

Description

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

$

0

 

$

0

 

 

 

 

 

Schedule D
Other Depreciable Assets

 

 

 

 

 

 

 

 

Cost

 

Market Value

 

Description

 

 

 

 

 

 

Machinery & Equipment -

 

 

 

 

 

 

 

Computer and Network Equipment

 

 

$

2,351,469

 

$

89,126

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

$

2,351,469

 

$

89,126

 

 

 

 

 

 

 

 

 

Furniture & Fixtures -

 

 

 

 

 

 

 

Office Furniture and Cubicles

 

 

 

 

 

 

 

 

 

 

$

14,937

 

$

3,081

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

$

14,937

 

$

3,081

 

 

 

 

 

 

 

 

 

 

 

Office Equipment -

 

 

 

 

 

 

 

Office Equipment

 

 

$

119,327

 

$

46,603

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

$

119,327

 

$

46,603

 

 

 

 

 

 

 

 

 

Leasehold Improvements -

 

 

 

 

 

 

 

Leasehold Improvements for Corporate Office

 

 

$

400,767

 

$

344,449

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

$

400,767

 

$

344,449

 

 

 

 

 

 

 

 

 

Other -

 

 

 

 

 

 

 

Purchased Software

 

 

$

3,815,355

 

$

5,550

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

$

3,815,355

 

$

5,550

 

 

 

 

 

 

 

 

 

 

 

Grand Total     

 

$

6,701,855

 

$

488,809

 

 

Note:

 

The market value of each asset category indicated above is based on the net book value (cost minus accumulated depreciation) of the corresponding asset as of August 31, 2004.  We believe that the asset’s net book value represents a reasonable estimate of its market value, considering the age of the asset and the current resale market.  In addition, we recently completed a physical count of all fixed assets on hand and recorded necessary adjustments to true up our current records to actual.  Leasehold improvements are related to our current headquarters in San Mateo, California, and are amortized over the lease term of five years.  We currently do not have any plan to relocate in the foreseeable future.

 


 

Schedule E

Aging of Post-Petition Taxes

(As of End of the Current Reporting Period)

 

Taxes Payable

 

0-30 Days

 

31-60 Days

 

61-90 Days

 

91+ Days

 

Total

 

Federal

 

 

 

 

 

 

 

 

 

 

 

Income Tax Withholding

 

 

 

 

 

 

 

 

 

$

—

 

FICA - Employee

 

 

 

 

 

 

 

 

 

$

—

 

FICA - Employer

 

 

 

 

 

 

 

 

 

$

—

 

Unemployment (FUTA)

 

 

 

 

 

 

 

 

 

$

—

 

Income

 

 

 

 

 

 

 

 

 

$

—

 

Other (Attach List)

 

 

 

 

 

 

 

 

 

$

—

 

Total Federal Taxes

 

$

—

 

$

—

 

$

—

 

$

—

 

$

—

 

State and Local

 

 

 

 

 

 

 

 

 

 

 

Income Tax Withholding

 

 

 

 

 

 

 

 

 

$

—

 

Unemployment (UT)

 

 

 

 

 

 

 

 

 

$

—

 

Disability Insurance (DI)

 

 

 

 

 

 

 

 

 

$

—

 

Empl. Training Tax (ETT)

 

 

 

 

 

 

 

 

 

$

—

 

Sales

 

$

—

 

 

 

 

 

 

 

$

—

 

Excise

 

 

 

 

 

 

 

 

 

$

—

 

Real property

 

 

 

 

 

 

 

 

 

$

—

 

Personal property

 

 

 

 

 

 

 

 

 

$

—

 

Income

 

 

 

 

 

 

 

 

 

$

—

 

Other (Attach List)

 

 

 

 

 

 

 

 

 

$

—

 

Total State & Local Taxes

 

$

—

 

$

—

 

$

—

 

$

—

 

$

—

 

Total Taxes

 

$

—

 

$

—

 

$

—

 

$

—

 

$

—

 

 

Schedule F

Pre-Petition Liabilities

 

List Total Claims For Each Classification -

 

Claimed
Amount

 

Allowed
Amount (b)

 

 

 

Secured claims (a)

 

$

53,992,159

 

$

8,204,174

 

 

 

Priority claims other than taxes

 

$

262,645

 

$

152,187

 

 

 

Priority tax claims

 

 

 

 

 

 

 

General unsecured claims

 

$

833,677,576

 

$

11,320,756

 

 

 

 

 

 

 

 

 

 

 

(a)          List total amount of claims even if it is under secured.

 

 

(b)         Estimated amount of claim to be allowed after compromise or litigation. As an example, you are a defendant in a lawsuit alleging damage of $10,000,000 and a proof of claim is filed in that amount. You believe that you can settle the case for a claim of $3,000,000. For Schedule F reporting purposes you should list $10,000,000 as the Claimed Amount and $3,000,000 as the Allowed Amount.

 

 

 

 

Notes:

 

1.

The aggregate balance of claimed amounts indicated above includes all claims reported on the Summary of Schedules filed with the U.S. Bankruptcy Court on May 17, 2004, plus unrecorded claims asserted against Liberate during the bankruptcy proceedings of at least $841 million, including the $3.3 million contingent unliquidated disputed claim by Mitchell Kertzman and the $830.3 million contingent unliquidated disputed claim related to the IPO litigation.

 

2.

Secured claims are related to the rejected lease for our former headquarters in San Carlos, California.  The allowed portion represents our estimate of allowable claim as permitted under the Bankruptcy Code and is secured by a letter of credit.

 

3.

The allowed portion of general unsecured claims includes our estimate of the allowable amount for all unsecured claims and a reserve of $6.7 million that was established to cover potential costs related to pending securities and derivative litigation.  It does not include other contingent litigation claims such as the disputed OpenTV patent claim, IPO litigation claim, or the disputed claim by Mitchell Kertzman mentioned above.

 

 

Schedule G

Rental Income Information

Not applicable to General Business Cases

 

Schedule H

Recapitulation of Funds Held at End of Month

 

 

 

Account 1

 

Account 2

 

Account 3

 

Account 4

 

Bank

 

 

 

 

 

 

 

 

 

Account Type

 

 

 

 

 

 

 

 

 

Account No.

 

 

 

 

 

 

 

 

 

Account Purpose

 

 

 

 

 

 

 

 

 

Balance, End of Month

 

 

 

 

 

 

 

 

 

Total Funds on Hand for all Accounts

 

$

0

 

 

 

 

 

 

 

 

Attach copies of the month end bank statement(s), reconciliation(s), and the check register(s) to the Monthly Operating Report.

 


 

LIBERATE TECHNOLOGIES

Supplemental Schedule for Schedule H

Recapitulation of Funds Held at End of Month

 

 

 

Account 1

 

Account 2

 

Account 3

 

Account 4

 

Account 5

 

Account 6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bank

 

Wells Fargo

 

Wells Fargo

 

Wells Fargo

 

Wells Fargo

 

CitiGroup

 

Petty Cash

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Account Type

 

Checking

 

Checking

 

Checking

 

Checking

 

Investments

 

Petty Cash

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Account No.

 

4518111885

 

451-8111885

 

409-1214668

 

409-1214650

 

449-90403

 

N/A

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Account Purpose

 

Sweep

 

Concentration

 

Accounts Payable

 

Payroll

 

Investments

 

Petty Cash

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, End of Month (Per Books)

 

$

1,825,322

 

$

54,226

 

$

(220,426

)

$

(16,641

)

$

197,857,101

 

$

355

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Funds on Hand for Unrestricted Cash (Per Books)

 

$

199,499,937

 

 

 

 

 

 

 

 

 

 

 

 

Note:

The petty cash balance represents petty cash on hand and does not relate to any bank account.

 


 

STATEMENT OF CASH RECEIPTS AND DISBURSEMENTS

Increase/(Decrease) in Cash and Cash Equivalents

For the Month Ended

 

August 31, 2004

 

 

 

 

 

 

Actual
Current Month

 

Cumulative
(Case to Date)

 

 

Cash Receipts

 

 

 

 

 

1

 

 

Rent/Leases Collected

 

 

 

$

—

 

2

 

 

Cash Received from Sales

 

$

578,592

 

$

1,927,159

 

3

 

 

Interest Received

 

$

238,568

 

$

765,291

 

4

 

 

Borrowings

 

 

 

$

—

 

5

 

 

Funds from Shareholders, Partners, or Other Insiders

 

 

 

$

—

 

6

 

 

Capital Contributions

 

 

 

$

—

 

7

 

 

Proceeds from Issuance of Common Stock

 

 

 

 

$

36,696

 

8

 

 

COBRA Payments from Former Employees

 

 

$

9,305

 

$

40,148

 

9

 

 

Miscellaneous Deposits

 

 

$

2,550

 

$

45,089

 

10

 

 

Refund from PriceWaterhouse Coopers

 

 

 

 

$

92,511

 

11

 

 

Proceeds from the Sale of Fixed Assets

 

 

$

2,471

 

$

26,356

 

 

 

 

 

 

 

 

 

 

12

 

 

Total Cash Receipts

 

$

831,485

 

$

2,933,249

 

 

 

 

 

 

 

 

 

 

 

Cash Disbursements

 

 

 

 

 

13

 

 

Payments for Inventory

 

 

 

$

—

 

14

 

 

Selling

 

 

 

$

—

 

15

 

 

Administrative

 

 

 

$

—

 

16

 

 

Capital Expenditures

 

 

 

$

—

 

17

 

 

Principal Payments on Debt

 

$

1,217,846

 

$

1,217,846

 

18

 

 

Interest Paid

 

$

19,996

 

$

19,996

 

 

 

 

Rent/Lease:

 

 

 

 

 

19

 

 

Personal Property

 

 

 

$

—

 

20

 

 

Real Property

 

$

26,269

 

$

105,732

 

 

 

 

Amount Paid to Owner(s)/Officer(s)

 

 

 

 

 

21

 

 

Salaries

 

$

107,309

 

$

447,527

 

22

 

 

Draws

 

 

 

$

—

 

23

 

 

Commissions/Royalties

 

 

 

$

—

 

24

 

 

Expense Reimbursements

 

$

5,040

 

$

13,745

 

25

 

 

Other

 

 

 

$

—

 

26

 

 

Salaries/Commissions (less employee withholding)

 

$

199,739

 

$

888,436

 

27

 

 

Management Fees

 

 

 

$

—

 

 

 

 

Taxes:

 

 

 

 

 

28

 

 

Employee Withholding

 

$

126,752

 

$

696,367

 

29

 

 

Employer Payroll Taxes

 

$

17,705

 

$

113,673

 

30

 

 

Real Property Taxes

 

$

—

 

$

—

 

31

 

 

Other Taxes

 

$

36,000

 

$

196,940

 

32

 

 

Other Cash Outflows:

 

 

 

$

—

 

33

 

 

 

Computer/Communication

 

 

$

78,434

 

$

351,884

 

34

 

 

 

Consulting

 

 

$

96,359

 

$

360,015

 

35

 

 

 

Employee Benefits

 

 

$

53,197

 

$

312,169

 

36

 

 

 

Funding for Canadian Subsidiary

 

 

$

1,435,125

 

$

4,567,785

 

 

 

 

 

Travel and Entertainment

 

 

$

58,022

 

$

190,255

 

 

 

 

 

Void Outstanding Prepetition Checks

 

 

$

—

 

$

(70,400

)

37

 

 

 

Miscellaneous

 

 

$

112,979

 

$

402,501

 

 

 

 

 

 

 

 

 

 

38

 

 

Total Cash Disbursements:

 

$

3,590,772

 

$

9,814,472

 

 

 

 

 

 

 

 

 

 

39

Net Increase (Decrease) in Cash

 

(2,759,287

)

$

(6,881,222

)

 

 

 

 

 

 

 

 

 

40

Cash Balance, Beginning of Period

 

$

202,259,223

 

$

206,381,159

 

 

 

 

 

 

 

 

 

 

41

Cash Balance, End of Period

 

$

199,499,937

 

199,499,937

 

 


 

LIBERATE TECHNOLOGIES

SCHEDULE OF PAYMENTS OF PRE-PETITION DEBT

For the Month Ended August 2004

 

Check No.

 

Date

 

Payee Name

 

Amount

 

 

 

 

 

 

 

 

 

2000449

 

13-Aug-04

 

Wood, Greg

 

297.48

 

2000483

 

26-Aug-04

 

Nguyen, Patrick

 

328.01

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

625.49

 

 

The above payments were made pursuant to the Order Authorizing Payment of Prepetition (A) Employee and Independent Contractor Wages, Salaries and Related Items, (B) Employee Business Expenses, (C) Obligations Under Employee Benefit Plans, (D) Employee Payroll Deductions and Withholdings and (E) Related Expenses entered into as of May 4, 2004.

 

2000378

 

3-Aug-04

 

NEW JERSEY, STATE OF

 

50.00

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

50.00

 

 

The above payment to the state government agency was made pursuant to the Order for Payment of State Taxes.

 


 

LIBERATE TECHNOLOGIES

SCHEDULE OF PAYMENTS TO OFFICERS

For the Month Ended August 2004

 

Salaries, net of withholdings, for the payroll period ended:

 

Names

 

8/15/2004

 

8/31/2004

 

Total

 

 

 

 

 

 

 

 

 

Dawes, Paul

 

7,710.49

 

7,710.51

 

15,421.00

 

Lockwood, David

 

7,028.06

 

7,028.06

 

14,056.12

 

Nguyen, Patrick

 

7,205.50

 

7,205.50

 

14,411.00

 

Scadina, Mark

 

6,914.37

 

6,914.37

 

13,828.74

 

Vachon, Phil

 

10,344.32

 

10,344.25

 

20,688.57

 

Vickers, Mark

 

6,280.44

 

6,280.44

 

12,560.88

 

Wood, Gregory

 

8,171.22

 

8,171.22

 

16,342.44

 

 

 

 

 

 

 

 

 

 

 

$

53,654.40

 

$

53,654.35

 

$

107,308.75

 

 

Expense reimbursements:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Names

 

Date

 

Check No.

 

Amount

 

 

 

 

 

 

 

 

 

Dawes, Paul

 

26-Aug-04

 

2000464

 

930.10

 

Lockwood, David

 

13-Aug-04

 

2000435

 

122.73

 

Nguyen, Patrick

 

3-Aug-04

 

2000379

 

93.50

 

Nguyen, Patrick

 

26-Aug-04

 

2000483

 

328.01

 

Scadina, Mark

 

24-Jun-04

 

2000218

 

(616.16

)voided check

Scadina, Mark

 

3-Aug-04

 

2000381

 

112.00

 

Vickers, Mark

 

10-Aug-04

 

2000408

 

722.08

 

Vickers, Mark

 

13-Aug-04

 

2000446

 

2,276.11

 

Vickers, Mark

 

26-Aug-04

 

2000496

 

412.41

 

Wood, Greg

 

13-Aug-04

 

2000449

 

659.70

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

5,040.48

 

 


 

Liberate Technologies US

Payments to Professionals

August FY05

 

Check #

 

Date

 

Vendor

 

Payment
Amount

 

 

 

 

 

 

 

 

 

Professional Fees paid related to the Bankruptcy

 

 

 

10773

 

17-Aug-04

 

Office of the US Treasurer

 

8,000.00

 

2000424

 

13-Aug-04

 

DELAWARE CLAIMS AGE

 

3,988.84

 

2000432

 

13-Aug-04

 

Innisfree M & A, In

 

9,637.73

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

21,626.57

 

 

All Other Professional Fees Paid (Authorized by Bankruptcy Courts Ordinary Course Professionals Order)

 

2000453

 

26-Aug-04

 

ALLAN JACOBSON/INTE

 

9,569.34

 

2000418

 

13-Aug-04

 

BURNS DOANE SWECKER

 

1,305.00

 

2000458

 

26-Aug-04

 

BURNS DOANE SWECKER

 

7,610.00

 

2000421

 

13-Aug-04

 

COMPUTER PATENT ANN

 

1,736.05

 

2000431

 

13-Aug-04

 

GUNDERSON DETTMER S

 

951.50

 

2000470

 

26-Aug-04

 

HARVEY SISKIND JACO

 

42.60

 

2000399

 

10-Aug-04

 

HOLME ROBERTS & OWE

 

199.00

 

2000413

 

11-Aug-04

 

Public Company Accounting Oversight

 

3,316.50

 

2000472

 

26-Aug-04

 

HOWREY SIMON ARNOLD

 

8,148.57

 

2000477

 

26-Aug-04

 

LATHAM & WATKINS

 

5,328.02

*

2000478

 

26-Aug-04

 

LATHAM & WATKINS

 

7,532.47

*

2000485

 

26-Aug-04

 

PILLSBURY WINTHROP

 

257.50

 

2000498

 

26-Aug-04

 

WEIL GOTSHAL AND MA

 

5,737.50

 

2000448

 

13-Aug-04

 

WILSON SONSINI GOOD

 

2,705.06

 

Total Professional Fees Paid

 

54,439.11

 

 

* Liberate Technologies inadvertently made payments to this retained professional of pre-petition debt.