EX-99.3 6 ex99-3.txt TESSERACT SEPTEMBER 2001 MONTHLY REPORT Exhibit 99.3 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 SEPTEMBER ) 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: 602-300-6257 --------------------------------------- ADDRESS: 1777 W. Camelback Rd., J109 Phoenix, AZ 85015 --------------------------------------- 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: SEPTEMBER 2001 RECEIPTS AND DISBURSEMENTS
BANK ACCOUNTS ----------------------------------------------------------------------------------------------- Amounts reported should be NATIONAL GROUP GROUP GROUP TESSERACT GROUP TESSERACT per the debtor's books, DEPOSITORY DEPOSITORY MEDICAL PAYROLL OPERATING CHARTER not per the bank statement #944-010-7759 #022-922-6741 #022-922-6576 #022-922-6576 #022-978-8101 #022-922-6808 ------------- ------------- ------------- ------------- ------------- ------------- ACCOUNT BALANCE - BEGINNING OF MONTH -- 1,540,522.02 -- -- -- 108.01 RECEIPTS STUDENT FEES 34,405.77 CHARTER SCHOOL REVENUE -- ACCOUNTS RECEIVABLE -- INTEREST 2,234.25 437.47 SALE OF ASSETS TRANSFERS IN FROM OTHER ACCOUNTS 32,956.00 -- 31,937.43 106,148.67 -- OTHER (ATTACH LIST) TOTAL RECEIPTS 34,405.77 35,190.25 -- 31,937.43 106,148.67 437.47 DISBURSEMENTS BUSINESS - ORDINARY OPERATIONS 1,449.77 -- 31,937.43 53,074.34 65.07 CAPITAL IMPROVEMENTS PRE-PETITION DEBT TRANSFERS TO OTHER DIP ACCOUNTS 32,956.00 138,086.10 PAYMENTS MADE FOR SUNRISE EDU. 117,485.08 53,074.33 OTHER (VOIDS) REORGANIZATION EXPENSES: ATTORNEY FEES ACCOUNTANT FEES OTHER PROFESSIONAL FEES U.S. TRUSTEE QUARTERLY FEE COURT COSTS TOTAL DISBURSEMENTS 34,405.77 255,571.18 -- 31,937.43 106,148.67 65.07 ------------ ------------- ----------- ------------ ------------ ------------- ACCOUNT BALANCE - END OF MONTH -- 1,320,141.09 -- -- -- 488.41 ============ ============= =========== ============ ============ ============= BANK ACCOUNTS ------------------------------------------------------------------------------------- Amounts reported should be CHARTER FIRST FEDERAL CREDITOR per the debtor's books, EXTRACURRICULAR CREDIT UNION RESERVE NE CAPITAL not per the bank statement #022-922-7442 #4002-0270-922 #052-980-2118 RESERVE TOTAL ------------- -------------- ------------- ---------------- ---------------- ACCOUNT BALANCE - BEGINNING OF MONTH -- -- 418,224.45 585,000.00 2,543,854.48 RECEIPTS STUDENT FEES 34,405.77 CHARTER SCHOOL REVENUE -- ACCOUNTS RECEIVABLE -- INTEREST 457.99 3,129.71 SALE OF ASSETS -- -- TRANSFERS IN FROM OTHER ACCOUNTS 171,042.10 OTHER (ATTACH LIST) -- TOTAL RECEIPTS -- -- 457.99 -- 208,577.58 DISBURSEMENTS BUSINESS - ORDINARY OPERATIONS 86,526.61 CAPITAL IMPROVEMENTS -- PRE-PETITION DEBT -- TRANSFERS TO OTHER DIP ACCOUNTS -- 171,042.10 PAYMENTS MADE FOR SUNRISE EDU 170,559.41 OTHER (VOIDS) -- REORGANIZATION EXPENSES: ATTORNEY FEES -- ACCOUNTANT FEES -- OTHER PROFESSIONAL FEES -- U.S. TRUSTEE QUARTERLY FEE -- COURT COSTS -- TOTAL DISBURSEMENTS -- -- -- -- 428,128.12 ------------ ------------- ------------- ------------- ------------- ACCOUNT BALANCE - END OF MONTH -- -- 418,682.44 585,000.00 2,324,303.94 ============ ============= ============= ============= ============= THE FOLLOWING SECTION MUST BE FILLED OUT DISBURSEMENTS FOR CALCULATING QUARTERLY FEES: TOTAL DISBURSEMENTS FROM ABOVE 428,128.12 LESS: TRANSFERS OUT TO OTHER DIP ACCOUNTS (171,042.10) LESS: PAYMENTS MADE FOR SUNRISE EDUCATIONAL SERVICES, INC. (170,559.41) PLUS: ESTATE DISBURSEMENTS MADE BY OUTSIDE SOURCES (i.e. PAYMENTS FROM ESCROW OR 2-PARTY CHECKS) ------------- TOTAL DISBURSEMENTS FOR CALCULATING QUARTERLY FEES: 86,526.61 =============
2 THE TESSERACT GROUP (EXCL. SUNRISE) STATEMENT OF OPERATIONS FOR THE MONTH ENDING SEPTEMBER 30, 2001 REVENUE Tuition and Fees Revenue $ -- Refunds/Returns -- Discounts -- ----------- Total Revenue -- ----------- OPERATIONAL COSTS Salaries and Wages -- Taxes and Benefits -- Food Programs Expense -- Maintenance Expense -- Insurance Expense -- Rent Expense -- Utilities Expense -- ----------- Total Operational Costs -- ----------- GENERAL & ADMINISTRATIVE COSTS Bank Charges/Processing Fees-A -- Corporate Overhead 55,001.19 Corporate Overhead Allocated to Sunrise (27,501.00) Other Expenses -- ----------- Total General and Administrative Expenses 27,500.19 ----------- Other Income -- Interest Expense -- ----------- Net Interest and Other Income (Expense) -- ----------- REORGANIZATION EXPENSES Professional Fees 84,689.53 Professional Fees Allocated to Sunrise (42,345.00) ----------- Total Reorganization Expenses 42,344.53 ----------- Net Income $(69,844.72) =========== 3 THE TESSERACT GROUP (EXCL. SUNRISE) BALANCE SHEET SEPTEMBER 30, 2001 ASSETS Current Assets Cash and Cash Equivalents $ 2,139,832.24 Accounts Receivable, net 1,841.67 Note Receivable from Nobel -- Prepaid Rent 6,400.00 Other Prepaid Expenses -- -------------- Total Current Assets 2,148,073.91 Investment in Sunrise 18,971,824.26 Property and Equipment, net -- Deposits and Other Assets 1,512,992.80 -------------- Total Assets $22,632,890.97 ============== LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Accounts Payable $ 47,411.22 Accrued Payroll and Benefits 997,967.94 Accrued Payroll Taxes -- Deferred Revenue and Tuition Deposits 885,140.74 -------------- Total Current Liabilities 1,930,519.90 -------------- Pre-Petition Liabilities Line of Credit 5,848,822.65 Accounts Payable 3,989,797.38 Other Unsecured Notes Payable 865,500.00 Other Current Liabilities 4,539,075.42 Long-Term Debt 1,696,967.85 -------------- Total Pre-Petition Liabilities 16,940,163.30 -------------- Due to Sunrise 3,006,663.41 Reserve for Closed Schools 504,099.10 Other Long-Term Obligations 13,999.76 -------------- Total Long-Term Liabilities 3,524,762.27 -------------- Total Liabilities 22,395,445.47 -------------- Shareholders' Equity Pre-Petition Shareholders' Equity 5,334,668.03 Post Petition Retained Deficit (5,097,222.53) -------------- Total Shareholders' Equity 237,445.50 -------------- Total Liabilities and Shareholders' Equity $22,632,890.97 ============== 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 1,842 1,842 -- -- LESS: AMOUNT CONSIDERED UNCOLLECTIBLE -- -- ACCOUNTS RECEIVABLE (NET) 1,842 1,842 -- -- SCHEDULED CURRENT FIXED ASSETS AMOUNT ADDITIONS DELETIONS AMOUNT ------------ --------- --------- --------- ------ REAL PROPERTY 1,867,408 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 557,586 557,586 -- 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 47,934 33,999 -- -- 13,935 TAXES PAYABLE -- -- ACCRUED SALARIES AND BENEFITS 997,968 997,968 PREPAID TUITION AND DEPOSITS 885,141 885,141 SECURED DEBT OTHER (ATTACH LIST) --------- --------- ----- ----- ------ TOTAL POST-PETITION LIABILITIES 1,931,043 1,917,108 -- -- 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 14,813.60 184,247.68 Gary Lilyquist Wages and Exp. Reimbursement -- 80,239.99 --------- ---------- TOTAL PAYMENTS TO INSIDERS 14,813.60 415,622.46 ========= ========== PROFESSIONALS
DATE OF COURT TOTAL ORDER AUTHORIZING AMOUNT AMOUNT TOTAL PAID INCURRED NAME PAYMENT APPROVED PAID TO DATE & UNPAID ---- ------- -------- ---- ------- -------- Bryan Cave 39,266.39 39,266.39 266,050.86 Engleman & Berger, PC 87,882.08 Field, Sarvas, King & Coleman 6,891.35 6,891.35 6,891.35
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: 1 INSURANCE CARRIER AND PERIOD EXPIRATION PAYMENT AMOUNT TYPE OF POLICY POLICY NUMBER COVERED DATE & FREQUENCY -------------- ------------- ------- ---- ----------- WHAT STEPS HAVE BEEN TAKEN TO REMEDY ANY OF THE PROBLEMS THAT BROUGHT ABOUT THE CHAPTER 11 FILING? LIST ANY MATTERS THAT ARE DELAYING THE FILING OF A PLAN OF REORGANIZATION? 7 THE TESSERACT GROUP, INC. CONSOLIDATED CASH FLOW ANALYSIS TOTAL FOR SEPTEMBER 2001 -------------- BEGINNING FUNDS AVAILABLE: $2,543,854.48 ------------- Cash In: Telecheck $ -- Credit Card Deposit (Preschools) -- Credit Card Deposit (Private) -- Credit Card Deposit (Charter) -- Regular Deposits (Preschools) 16,664.30 Regular Deposits (Private) 2,491.08 Regular Deposits (Charter) 720.34 Regular Deposits (Corporate) 14,882.15 Other Deposit (Preschool) -- Interest 3,129.71 Interest on LTC Acct -- Voids -- ------------- Daily Cash In: $ 37,887.58 ============= Cash Out: Preschool A/P $ 117,485.08 Charter A/P 65.07 Private A/P -- Corporate A/P 106,148.67 TesseracT Payroll 31,937.43 Preschool Payroll -- Charter Payroll -- College PR -- Preschool NSF 352.10 Medical Claims -- Banking Fees 1,449.77 LTC Payment -- LTC Fees -- ------------- Daily Cash Out: $ 257,438.12 ============= Net Cash In/Out: $ (219,550.54) ------------- ENDING FUNDS AVAILABLE: $2,324,303.94 ============= 8 THE TESSERACT GROUP, INC. CASH FLOW ANALYSIS B-00-10938-ECF-RTB BEGINNING FUNDS AVAILABLE: $ (175,526.10) Cash In: Credit Card Deposit (Private) -- Credit Card Deposit (Charter) -- Regular Deposits (Private) 2,491.08 Regular Deposits (Charter) 720.34 Regular Deposits (Corporate) 14,882.15 Interest 3,129.71 -------------- Daily Cash In: $ 21,223.28 ============== Cash Out: Charter A/P 65.07 Private A/P -- Corporate A/P 106,148.67 Corporate A/P (allocated to Sunrise) (53,074.34) TesseracT Payroll 31,937.43 Charter Payroll -- Medical Claims -- Banking Fees 1,449.77 LTC Payment -- Voids -- -------------- Daily Cash Out: $ 86,526.60 ============== Net Cash In/Out: $ (65,303.32) -------------- ENDING FUNDS AVAILABLE: $ (240,829.42) ============== 9 CORPORATE COMPANY VENDOR CHECK REGISTER REPORT PAYABLES MANAGEMENT * Voided Checks
AUDIT CHECK NUMBER VENDOR ID VENDOR CHECK NAME CHECK DATE CHECKBOOK ID TRAIL CODE AMOUNT ------------ --------- ----------------- ---------- ------------ ---------- ------ 200013038 MAN FIN000-B MANULIFE FINANCIAL 9/6/2001 OPERATING2 PMCHK00000319 $1,137.18 200013039 MUTOMA001-B MUTUAL OMAHA-NE 9/6/2001 OPERATING2 PMCHK00000319 $2,597.24 200013040 MUTOMA001-B MUTUAL OMAHA-NE 9/6/2001 OPERATING2 PMCHK00000319 $2,558.75 200013041 MUTOMA001-B MUTUAL OMAHA-NE 9/6/2001 OPERATING2 PMCHK00000319 $2,235.39 200013042 MUTOMA001-B MUTUAL OMAHA-NE 9/6/2001 OPERATING2 PMCHK00000319 $2,278.78 200013043 BEM000000-B BEMISH,KAREN 9/10/2001 OPERATING2 PMCHK00000320 $12.45 200013044 SPEINC000-B SPECTERA, INC. 9/10/2001 OPERATING2 PMCHK00000320 $838.60 200013045 FEDEXP000-B FEDERAL EXPRESS 9/10/2001 OPERATING2 PMCHK00000320 $100.10 200013046 ARC000000-B ARC 9/10/2001 OPERATING2 PMCHK00000321 $103.43 200013047 CAVBRY000-B BRYAN CAVE LLP 9/10/2001 OPERATING2 PMCHK00000322 $39,266.39 200013048 FIERC0000-B FIELD,SARVAS,KING,COLEMAN,PC 9/10/2001 OPERATING2 PMCHK00000322 $6,891.35 200013049 LYN000000-B LYNCH,MICHAEL 9/11/2001 OPERATING2 PMCHK00000323 $202.72 200013050 SNELDO000-B DOUG SNELL 9/12/2001 OPERATING2 PMCHK00000324 $4,326.92 200013051 ARC000000-B ARC 9/13/2001 OPERATING2 PMCHK00000325 $139.84 200013052 ARC000000-B ARC 9/13/2001 OPERATING2 PMCHK00000325 $136.80 200013053 ARC000000-B ARC 9/13/2001 OPERATING2 PMCHK00000325 $100.00 200013054 BONJAM000-B JAMES BONFIGLIO 9/13/2001 OPERATING2 PMCHK00000325 $2,756.25 200013055 FEDEXP000-B FEDERAL EXPRESS 9/13/2001 OPERATING2 PMCHK00000325 $69.80 200013056 SNELDO000-B DOUG SNELL 9/14/2001 OPERATING2 PMCHK00000326 $4,749.36 200013057 RIVJUD000-B JUDI RIVERA 9/14/2001 OPERATING2 PMCHK00000327 $250.00 200013058 ARC000000-B ARC 9/18/2001 OPERATING2 PMCHK00000328 $100.00 200013059 ARC000000-B ARC 9/18/2001 OPERATING2 PMCHK00000328 $100.00 200013060 ARC000000-B ARC 9/18/2001 OPERATING2 PMCHK00000328 $100.00 200013061 ARC000000-B ARC 9/18/2001 OPERATING2 PMCHK00000328 $100.00 200013062 ARC000000-B ARC 9/18/2001 OPERATING2 PMCHK00000328 $100.00 200013063 TELECHK000-B TELECHECK 9/18/2001 OPERATING2 PMCHK00000328 $1.50 200013064 BELSHEOOO-B SHERRY BELL 9/20/2001 OPERATING2 PMCHK00000329 $2,211.21 200013065 FEDEXP000-B FEDERAL EXPRESS 9/20/2001 OPERATING2 PMCHK00000329 $70.88 200013066 LEWLIN000-B LINDA LEWERS 9/20/2001 OPERATING2 PMCHK00000329 $3,172.75 200013067 LYN000000-B LYNCH,MICHAEL 9/20/2001 OPERATING2 PMCHK00000329 $6,826.60 200013068 MOOBRI000-B MOORE, BRIAN 9/20/2001 OPERATING2 PMCHK00000329 $2,041.99 200013069 RIVJUD000-B JUDI RIVERA 9/24/2001 OPERATING2 PMCHK00000330 $350.00 200013070 LYN000000-B LYNCH,MICHAEL 9/25/2001 OPERATING2 PMCHK00000331 $791.39 200013071 MOOBRI000-B MOORE, BRIAN 9/25/2001 OPERATING2 PMCHK00000331 $129.57 200013072 QWECOM000-B QWEST COMMUNICATIONS SERVICES 9/25/2001 OPERATING2 PMCHK00000331 $1,147.54 200013073 RSMMCG000-B RSM MCGLADREY 9/26/2001 OPERATING2 PMCHK00000332 $1,150.00 200013074 BELSHEOOO-B SHERRY BELL 9/26/2001 OPERATING2 PMCHK00000333 $2,211.21 200013075 LEWLIN000-B LINDA LEWERS 9/26/2001 OPERATING2 PMCHK00000333 $3,172.75 200013076 LYN000000-B LYNCH,MICHAEL 9/26/2001 OPERATING2 PMCHK00000333 $6,826.60 200013077 MOOBRI000-B MOORE, BRIAN 9/26/2001 OPERATING2 PMCHK00000333 $2,041.99 200013078 MOOBRI000-B MOORE, BRIAN 9/26/2001 OPERATING2 PMCHK00000334 $472.33 200013079 NOPOOO000-B MIKE NOPPENBERG 9/27/2001 OPERATING2 PMCHK00000335 $500.00 200013080 FIERC0000-B FIELD,SARVAS,KING,COLEMAN,PC 9/27/2001 OPERATING2 PMCHK00000336 $50.00 200013081 LYN000000-B LYNCH,MICHAEL 9/27/2001 OPERATING2 PMCHK00000336 $166.29 200013082 RIVJUD000-B JUDI RIVERA 9/27/2001 OPERATING2 PMCHK00000336 $520.00 200013083 WELFAR003-B WELLS FARGO (MN) 9/27/2001 OPERATING2 PMCHK00000336 $710.67 200013084 AT&TWIR06-B AT&T WIRELESS SERVICES-PHOENIX 9/28/2001 OPERATING2 PMCHK00000337 $332.05 REMIT000000000000112 ARC000000-B ARC 9/10/2001 PMCHK00000320 $0.00 REMIT000000000000113 AIR000000 AIRE-MASTER 9/20/2001 PMCHK00000329 $0.00 REMIT000000000000114 ARIAIR000 ARIZONA AIR-SCENT 9/20/2001 PMCHK00000329 $0.00 ----------- Total Checks: 50 Total Amount of Checks: $106,148.67 ===========
10