EX-99 2 avalondigitalexh991704.txt Exhibit 99.1 ------------ AVALON DIGITAL MARKETING SYSTEMS Balance Sheet As of July 31, 2004 ASSETS Current Assets: Cash (from Form 2-B, line 5) $ 61,878 Accounts Receivable (from Form 2-E) 20,244 Receivable from Officers, Employees, Affiliates - Inventory - Other Current Assets: Contract, AR - Retainage 40,078 Prepaid and Other 4,896 ------------ Total Current Assets $ 127,096 ------------ Fixed Assets: Land - Building - Equipment, Furniture and Fixtures 1,218,937 ------------ Total Fixed Assets 1,218,937 ------------ Less: Accumulated Depreciation (954,383) Net Fixed Assets 264,554 ------------ Other Long Term Assets: License 8,000 ------------ TOTAL ASSETS 399,650 ------------ LIABILITIES Post Petition Liabilities: Accounts Payable (from Form 2-E) 302,338 Notes Payable - Rents and Leases Payable 6,700 Taxes Payable (from Form 2-E) 20,013 Accrued interest 3,185 Other: Accrued Expense 325,082 ------------ Total Post Petition Liabilities $ 657,318 ------------ Pre-Petition Liabilities: Priority Claims 160,989 Secured Debt 203,407 Unsecured Debt 9,032,723 ------------ Total Pre-Petition Liabilities 9,397,119 ------------ TOTAL LIABILITIES $ 10,054,437 ------------ OWNERS' EQUITY Capital Stock or Owner's Investment $ 8,714 Paid-In Capital 28,051,203 Retained Earnings: Pre Petition (36,880,111) Post Petition (834,593) ------------ TOTAL OWNERS' EQUITY $ (9,654,787) ------------ TOTAL LIABILITIES AND OWNERS' EQUITY $ 399,650 ------------ 1 AVALON DIGITAL MARKETING SYSTEMS Profit and Loss Statement For Period July 1 to July 31, 2004 Gross Operating Revenue $ 154,028 Less: Discounts, Returns and Allowances - ------------ Net Operating Revenue $ 154,028 Cost of Goods Sold 6,469 ------------ Gross Profit 147,559 ------------ Operating Expenses Salaries and Wages 83,085 Rents and Leases 6,843 Payroll Taxes (Employer) 5,789 Other: Health Insurance 8,658 Fees/Licenses - G & A 24,777 ------------ Total Operating Expenses 129,152 Operating Income (Loss) 18,407 ------------ Legal and Professional Fees - Depreciation, Depletion and Amortization 27,080 Interest Expense 100 ------------ Net Operating Income (Loss) (8,773) ------------ Non-Operating Income and Expenses Other Non-Operating (Expenses) (2,080) Gains (Losses) on Sale of Assets - Interest Income - Other Non-Operating Income - ------------ Net Non-Operating Income or (Expenses) (2,080) ------------ Net Income (Loss) Before Income Taxes (10,853) ------------ Federal and State Income Tax Expense (Benefit) - ------------ NET INCOME (LOSS) $ (10,853) ------------ 2