<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
Date of Report (Date of earliest event reported) September 15, 1998
2CONNECT EXPRESS, INC.
--------------------------------------
(Exact name of registrant as specified in its charter)
FLORIDA
-------------------------------------
(State or other jurisdiction of
incorporation or organization)
000-22251 65-0674664
- ------------- ---------------
(Commission (I.R.S. Employer
file number) Identification No.)
3500 Gateway Drive, Suite 101, Pompano Beach, FL 33069
- ------------------------------------------------ ---------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (954) 797-7960
- --------------------------------------------------------------------------------
NOT APPLICABLE
-------------------------
(Former name, former address and former fiscal year,
if changed since last report)
<PAGE> 2
Item 5. OTHER EVENTS
On September 15, 1998, 2Connect Express, Inc. filed with the United States
Bankruptcy Court the Debtor's Monthly Financial Report (Business) for the period
from August 2, 1998 to August 29, 1998. A copy of this report is filed as
Exhibit 99 hereto.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) EXHIBITS
Exhibit 99. Debtor's Monthly Financial Report (Business) For The
Period From August 2, 1998 to August 29, 1998, filed
with the United States Bankruptcy Court.
<PAGE> 3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
2CONNECT EXPRESS, INC.
--------------------------------
(Registrant)
Date: September 25, 1998 /s/ James S. Holbrook, Jr.
------------------ --------------------------------
James S. Holbrook, Jr.,
Chairman of the Board and
Chief Executive Officer
<PAGE> 4
EXHIBIT INDEX
Exhibit Number Description Sequentially Numbered Page
- -------------- ----------- --------------------------
99 Debtor's Monthly Financial Report 5
for the period from August 2, 1998
to August 29, 1998
<PAGE> 1
EXHIBIT 99
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF FLORIDA
FT LAUDERDALE DIVISION
IN RE: | CASE NUMBER: 98-20169-BKC-RBR
|
| JUDGE: Raymond B. Ray
DEBTOR. | CHAPTER 11
DEBTOR'S MONTHLY FINANCIAL REPORT (BUSINESS)
FOR THE PERIOD
FROM August 2, 1998 TO August 29, 1998 (8-29-98 is fiscal month end per books)
Comes now the above-named debtor and files its Periodic Financial reports in
accordance with the Guidelines established by the United States Trustee and FRBP
2015.
Paul J. Battista, Esq.
Attorney for Debtor
Debtor's Address and Phone Number: Attorney's Address and Phone Number:
2Connect Express, Inc Kelley, Drye & Warren, LLP
3500 Gateway Drive 201 S. Biscayne Blvd.
Suite 101 2400 Miami Center
Pompano Beach, FL 33069 Miami, FL 33131
(954) 971-3555 (305) 372-2400
1 of 17
<PAGE> 2
MONTHLY FINANCIAL REPORT FOR BUSINESS
For the Period Beginning August 2, 1998 and Ending August 29, 1998
(fiscal month per books)
Name of Debtor: 2Connect Express, Inc. Case Number: 98-20169-BKC-RBR
Date of Petition: January 12, 1998
<TABLE>
<CAPTION>
CUMULATIVE
CURRENT MONTH PETITION TO DATE
-------------- ----------------
<S> <C> <C>
1. Cash at Beginning of Period $ 735,749.45 $ 106,714.48
-------------- ----------------
2. Receipts:
A. Cash and Credit Card Sales 6,894.40 1,025,848.06
Less: Cash and Credit Card Refunds -- (1,333.83)
-------------- ----------------
Net Cash and Credit Card Sales 6,894.40 1,024,514.23
-------------- ----------------
B. Collection in Post-petition A/R 13,054.52 321,351.19
C. Collection on Pre-petition A/R -- 317,653.45
D. Other Receipts (Schedule 2A) 2,572.49 96,146.63
E. Deposits From Account Sweeps 395,614.84 3,726,407.53
F. Less Disbursement Sweeps (395,614.84) (3,725,564.94)
G. Auction sales-held in bankurptcy atty trust account -- 345,532.35
-------------- ----------------
3. Total Receipts 22,521.41 2,106,040.44
-------------- ----------------
-------------- ----------------
4. Total Cash Available for Operations(1+3) 758,270.86 2,212,754.92
-------------- ----------------
5. Disbursements:
A. U.S. Trustee Quarterly Fees -- 8,750.00
B. Net Payroll 13,491.23 424,056.23
C. Payroll Taxes Paid 3,015.61 153,269.86
D. Sales and Use Taxes 105.24 47,849.70
E. Other Taxes -- --
F. Rent -- 158,730.04
G. Other Leases (attachment 3) 768.54 34,071.50
H. Telephone 275.61 33,106.85
I Utilities 2,420.78 19,191.59
J. Travel and Entertainment 1,000.00 30,030.99
K. Vehicle Expenses -- --
L. Office Supplies 458.22 5,778.83
M. Advertising -- 22,796.89
N. Insurance (attachment 7) 2,893.46 46,000.36
O. Purchases of Fixed Assets -- --
P. Purchases of Inventory 16.95 114,829.72
Q. Manufacturing Supplies -- --
R. Repairs and Maintenance -- 1,604.19
S. Payments to Secured Creditors -- 281,499.96
T. Other Operating Expenses(Schedule 2B) 5,034.57 102,397.56
-------------- ----------------
6. Total Cash Disbursements 29,480.21 1,483,964.27
-------------- ----------------
-------------- ----------------
7. Ending Cash Balance (4-6) $ 728,790.65 $ 728,790.65
============== ================
</TABLE>
I declare under penalty of perjury that this statement and the accompanying
documents and reports are true and correct to the best of my knowledge and
belief.
This 14th day of September, 1998. Signed: /s/ Thomas H. Hicks
-------------------------------------
Thomas H. Hicks
Page 2 of 17
<PAGE> 3
Schedule 2A
Monthly Financial Report for Business
For the Period Beginning August 2, 1998 and Ending August 29, 1998 (fiscal month
per books)
Other Receipts Detail
<TABLE>
<CAPTION>
Account Date Check # Received From Purpose Deposit
- ------- ---- ------- ------------- ------- -------
<S> <C> <C> <C> <C> <C>
op 8/3/98 Deposit First Union Interest Interest $ 154.11
op 8/4/98 Deposit First Union Interest Interest 50.82
op 8/5/98 Deposit First Union Interest Interest 48.93
op 8/6/98 Deposit First Union Interest Interest 48.38
op 8/7/98 Deposit First Union Interest Interest 48.89
op 8/10/98 Deposit First Union Interest Interest 142.45
op 8/11/98 Deposit First Union Interest Interest 48.77
op 8/12/98 Deposit First Union Interest Interest 47.73
op 8/13/98 Deposit First Union Interest Interest 48.49
op 8/14/98 Deposit First Union Interest Interest 48.49
op 8/14/98 Deposit Larry Pacey Cobra Cobra 210.29
op 8/17/98 Deposit First Union Interest Interest 143.57
op 8/18/98 Deposit First Union Interest Interest 51.97
op 8/19/98 Deposit First Union Interest Interest 49.49
op 8/20/98 Deposit First Union Interest Interest 49.27
op 8/21/98 Deposit First Union Interest Interest 48.88
op 8/24/98 Deposit First Union Interest Interest 144.02
op 8/25/98 Deposit First Union Interest Interest 48.11
op 8/26/98 Deposit First Union Interest Interest 47.63
op 8/27/98 Deposit First Union Interest Interest 48.66
op 8/28/98 Deposit First Union Interest Interest 48.01
op 8/28/98 Deposit Cell Star Refund Refund 785.47
op 8/28/98 Deposit Zara Hernandez Cobra Cobra 210.06
----------
$ 2,572.49
==========
</TABLE>
Page 3 of 17
<PAGE> 4
Schedule 2B
Monthly Financial Report for Business
For the Period Beginning August 2, 1998 and Ending August 29, 1998 (fiscal month
per books)
Other Operating Expenses Detail
<TABLE>
<CAPTION>
Account Date Check # Payee Purpose Withdrawal
- ------- ---- ------- ----- ------- ----------
<S> <C> <C> <C> <C> <C>
op 8/2/98 Credit American Express Chargeback Adj. Credit Card Chargeback $ (21.48)
op 8/3/98 012980 CGI-Ft. Lauderdale Freight 106.50
op 8/4/98 Debit Merchant Fee Credit Card Fee 60.00
op 8/4/98 Debit Merchant Interchange Credit Card Fee 5.63
op 8/5/98 Debit Merchant Fee Credit Card Fee 39.95
op 8/5/98 Debit Merchant Fee Credit Card Fee 15.00
op 8/6/98 Debit Merchant Chargeback Credit Card Chargeback 264.88
pay 8/7/98 Debit ADP Fees Payroll Fees 54.00
op 8/10/98 Debit Merchant Chargeback Credit Card Chargeback 1,369.89
op 8/12/98 Debit Commercial Bank Fees Bank Fees 444.06
op 8/12/98 Debit Returned Item Chargeback Credit Card Chargeback 339.20
op 8/13/98 012986 American Stock Transfer Co. Transfer Agent 500.00
op 8/13/98 012987 Bowne of Atlanta Printing SEC forms 881.92
op 8/13/98 012989 PR Newswire, Inc. Press Release 70.00
op 8/13/98 012990 Telecheck Check Processing Fees 112.71
op 8/13/98 012991 CGI-Ft. Lauderdale Freight 30.25
op 8/13/98 012993 ICanect Internet Service 116.38
op 8/13/98 012994 Web Store Internet Service 75.00
op 8/20/98 012999 Bowne of Atlanta Printing SEC forms 478.53
op 8/21/98 Debit Merchant Chargeback Credit Card Chargeback 38.15
pay 8/21/98 Debit ADP Fees Payroll Fees 54.00
----------
$ 5,034.57
==========
</TABLE>
Page 4 of 17
<PAGE> 5
ATTACHMENT #1
MONTHLY ACCOUNTS RECEIVABLE AGING AND RECONCILIATION
Name of Debtor: 2CONNECT EXPRESS, INC. Case Number: 98-20169-BKC-RBR
For the Period Beginning August 2, 1998 and Ending August 29, 1998 (fiscal month
per books)
Accounts Receivable at Petition Date: $ 375,266.67
Accounts Receivable Reconciliation (Include all accounts receivable,
pre-petition and post-petition, including charge card sales which have not been
received):
Beginning of Month Balance: $ 249,828.88
Plus: Current Month New Billings: 3,386.28
Less: Collections During Month (13,054.52)
Amount received in escrow from Sterne, Agee & Leach, Inc. *
Accounts Written off -----------
End of Month Balance: $240,160.64*
===========
Aging: (show the total amount for each age group of accounts incurred since
filing the petition)
--------- --------- --------- -------- -----
0-30 days 31-60days 61-90days >90 days Total
--------- --------- --------- -------- -----
* Sterne, Agee & Leach, Inc. has deposited $175,000 into an escrow account
which shall be released to The Debtor upon the effective date of the
bankruptcy assuming satisfaction of the conditions to that certain Agreement
between Sterne, Agee & Leach, Inc. and The Debtor dated August 27, 1998.
See Attached Detail
Page 5 of 17
<PAGE> 6
Attachment #1
2Connect Express, Inc.
Trade Receivables
As of 08-29-98
<TABLE>
<CAPTION>
Total 1 to 30 31 to 60 61 to 90 over 90
------------- ----------- ------------ ------------ -------------
<S> <C> <C> <C> <C> <C>
A/R - Commission
Bell South Local-Commission $ 1,217.50 $ -- $ -- $ -- $ 1,217.50
Bobby Allison Cellular ATT Commissions 3,896.25 3,896.25
------------- ----------- ------------ ------------ -------------
Subtotal 5,113.75 0.00 0.00 3,896.25 1,217.50
------------- ----------- ------------ ------------ -------------
A/R - In-House
Beepers to Go 8,662.00 2,960.00 5,702.00
School Board of Dade County 3,093.43 3,093.43
Ingram Retail Services 1,145.27 1,145.27
------------- ----------- ------------ ------------ -------------
Subtotal 12,900.70 -- 2,960.00 -- 9,940.70
------------- ----------- ------------ ------------ -------------
A/R - Activation
Sprint - Activation 17,419.17 17,419.17
------------- ----------- ------------ ------------ -------------
Subtotal 17,419.17 0.00 0.00 0.00 17,419.17
------------- ----------- ------------ ------------ -------------
A/R - Coop Advertising
Cell Star-Coop 13,127.00 13,127.00
Ericcson-Coop 600.08 600.08
Lucent Tech-Coop 176.00 176.00
Panasonic-Coop 292.00 292.00
Recoton-Coop 281.00 281.00
Smart Talk-Coop 640.00 640.00
Uniden-Coop 417.00 417.00
Vtech Coop Adv 7,255.00 7,255.00
------------- ----------- ------------ ------------ -------------
Subtotal 22,788.08 0.00 0.00 0.00 22,788.08
------------- ----------- ------------ ------------ -------------
A/R- Market Development
Psion NSA 2,500.00 2,500.00
------------- ----------- ------------ ------------ -------------
Subtotal 2,500.00 0.00 0.00 0.00 2,500.00
------------- ----------- ------------ ------------ -------------
A/R - Rebate
Recoton Rebate 144.00 144.00
CellStar Rebate 2,971.00 2,971.00
------------- ----------- ------------ ------------ -------------
Subtotal 3,115.00 -- -- -- 3,115.00
------------- ----------- ------------ ------------ -------------
A/R - Bobby Allison Cellular Systems of Florida, Inc.
B Allison Cellular Systems of Florida, Inc. 1,323.94 141.99 1,181.95
------------- ----------- ------------ ------------ -------------
Subtotal 1,323.94 141.99 1,181.95 0.00 0.00
------------- ----------- ------------ ------------ -------------
A/R - Sterne, Agee & Leach
* Sterne, Agee & Leach *175,000.00 175,000.00
------------- ----------- ------------ ------------ -------------
Subtotal *175,000.00 175,000.00 -- -- --
------------- ----------- ------------ ------------ -------------
Grand Total Accounts Receivable $ 240,160.64 $175,141.99 $ 4,141.95 $ 3,896.25 $ 36,980.45
============= =========== ============ ============ =============
</TABLE>
Note: Statements and Collection letters sent to all parties. Kelley Drye &
Warren advised to send final collection letters to all except Bobby
Allison Cellular Systems of Florida, Inc..
* Sterne, Agee & Leach, Inc. has deposited $175,000 into an escrow account
which shall be released to The Debtor upon the effective date of the
bankruptcy assuming satisfaction of the conditions to that certain Agreement
between Sterne, Agee & Leach, Inc. and The Debtor dated August 27, 1998.
Page 6 of 17
<PAGE> 7
ATTACHMENT #2
MONTHLY ACCOUNTS PAYABLE AND SECURED PAYMENTS REPORT
Name of Debtor: 2Connect Express, Inc. Case Number: 98-20169-BKC-RBR
For the Period Beginning August 2, 1998 and Ending August 29, 1998 (fiscal month
per books)
In the space below list all invoices or bills incurred and not paid since the
filing of the petition. Do not include amounts owed prior to filing the
petition.
Date Days
Incurred Outstanding Vendor Description Amount
See Attached Schedule: "Period Cutoff Aged AP - Historical Detail Aged by Due
Date"
ACCOUNTS PAYABLE RECONCILIATION (Post Petition Only):
Opening Balance (total from prior report) $ 185,941.43
Plus: New Indebtedness Incurred This Month 29,322.51
Less: Amount Paid on Total Accounts Payable 28,563.71
------------
Ending Month Balance $ 186,700.23
============
SECURED: List status of payments to Secured Creditors and Lessors (Post-Petition
Only):
Secured Date Number of Post Total Amount of
Creditor/ Payment Payment Petition Payments Post-petition
Lessor Due Amount Delinquent Payments Delinquent
None
Page of 7 of 17
<PAGE> 8
2Connect Express, Inc.
Period Cutoff Aged AP (03.681. - Historical Detail Aged by Due Date
Period: 07-99 Aging Date: 08/29/98
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
Vendor/ Name/ Vendor Status/ Disc Due Pay
Doc Type Ref Nbr Inv Nbr Inv Date Doc Status Date Date Date
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
5000BOWNE Bowne of Atlanta O
VO 005111 1-9807038290-07 8/18/98 A 8/28/98 9/17/98 8/28/98
Vendor Total
5000HANCOC Hancock Moving & Storage O
VO 005114 058-2752-7 8/18/98 A 8/18/98 8/18/98 8/18/98
Vendor Total
5000WORLDW Worldwide Express O
VO 005112 406190 8/19/98 A 8/19/98 9/3/98 9/3/98
VO 005119 410262 8/26/98 A 8/28/98 9/10/98 9/10/98
Vendor Total
5500BELLSO BellSouth O
VO 005121 954V134335504 4/28/98 A 4/28/98 9/8/98 9/8/98
Vendor Total
5500CORALS Coral Springs Improvement Dist O
VO 005113 2010539804 8/17/98 A 8/17/98 9/1/98 9/1/98
Vendor Total
5500TRESCO Trescom International O
VO 005118 000217068414 8/15/98 A 8/15/98 8/30/98 8/30/98
Vendor Total
6500EMPLOY Employer's Health Insurance O
CK 013001 005102 C
Vendor Total
6500HUMANA Humana Health Insurance O
CK 013002 005106 C
Vendor Total
6500KEMPER Kemper Insurance Companies O
AD 004970 3BG0159400 6/15/98 H 6/15/98 6/15/98
AD 005028 060198 6/1/98 A 6/1/98 6/1/98
AD 005030 061998 6/19/98 A 6/19/98 6/19/98
AD 005031 062998 6/29/98 A 6/29/98 6/29/98
AD 005032 062198 6/21/98 A 6/21/98 6/21/98
AC 005104 082098 8/20/98 H 8/20/98 8/20/98 8/20/98
Vendor Total
7000BOBBYA Bobby Allison Cellular O
VO 004998 270 6/15/98 A 6/15/98 6/15/98 6/15/98
VO 004999 277/17/98 6/17/98 A 6/17/98 6/17/98 6/17/98
VO 005125 27013/98 6/13/98 A 6/13/98 6/13/98 6/13/98
Vendor Total
7000CELLST CellStar O
AD 004968 Wire Transfer 6/15/98 A 8/20/98 6/15/98 6/15/98
VO 0051088110246 8/20/98 A 8/20/98 8/20/98
AD 0051098082098 8/20/98 A 8/20/98 8/20/98
Vendor Total
7000PRIMEC PrimeCo O
AD 004995 29838 6/1/98 A 6/1/98 6/1/98
Vendor Total
7000SPRINT Sprint PCS O
VO 004489 030598 3/5/98 H 3/5/98 3/5/98 3/5/98
VO 004708 WBE-028087 1/29/97 H 1/29/98 2/28/97 2/28/97
Vendor Total
7200ICANEC ICanect O
VO 004183 013198 1/31/98 H 1/31/98 3/2/98 3/2/98
Vendor Total
90003COM 3Com Credit Corporation O
VO 004578 00008985 4/1/98 H 4/1/98 4/1/98 4/1/98
Vendor Total
9000BAKERM Baker & McKenzie O
VO 004973 50104273 6/1/98 H 6/1/98 7/1/98 7/1/98
Vendor Total
9000CITGRO Sensormatic/CIT Group O
CK 013004 005098 C
Vendor Total
9000COLLDA Coll Davidson Carter O
VO 004969 060898 6/8/98 A 6/8/98 6/8/98 6/8/98
AD 005117 Court Adj. 8/28/98 A 8/28/98 8/28/98
Vendor Total
9000KELLEY Kelley Drye & Warren, LLP O
VO 004858 1302933 5/15/98 H 5/15/98 5/15/98 5/15/98
VO 005026/1307186 7/6/98 H 7/6/98 7/6/98 7/6/98
VO 0050407070198 7/1/98 H 7/1/98 7/1/98 7/1/98
VO 0051058081098 8/10/98 H 8/10/98 8/10/98 8/10/98
Vendor Total
9000KPMG KPMG Peat Marwick O
VO 004357 01821 2/17/98 H 2/17/98 3/19/98 3/19/98
Vendor Total
Report Total
</TABLE>
Page 8 of 17
<PAGE> 9
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
Vendor/ Name/ Days Past Due
Doc Type Ref Nbr Inv Nbr Current 1 To 30 31 To 60 61 To 90 Over 90 Balance
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
5000BOWNE Bowne of Atlanta
VO 005111 1-9807038290-07 305.28 - - - - 305.28
305.28 - - - - 305.28
5000HANCOC Hancock Moving & Storage
VO 005114 058-2752-7 - 1,995.00 - - - 1,995.00
- 1,995.00 - - - 1,995.00
5000WORLDW Worldwide Express
VO 005112 406190 14.90 - - - - 14.90
VO 005119 410262 58.00 - - - - 58.00
72.90 - - - - 72.90
5500BELLSO BellSouth
VO 005121 954V134335504 648.26 - - - - 648.26
648.26 - - - - 648.26
5500CORALS Coral Springs Improvement Dist
VO 005113 2010539804 21.00 - - - - 21.00
21.00 - - - - 21.00
5500TRESCO Trescom International
VO 005118 000217068414 141.99 - - - - 141.99
141.99 - - - - 141.99
6500EMPLOY Employer's Health Insurance
CK 013001 005102 (35.61) (35.61)
(35.61) - - - - (35.61)
6500HUMANA Humana Health Insurance
CK 013002 005106 (778.02) (778.02)
(778.02) - - - - (778.02)
6500KEMPER Kemper Insurance Companies
AD 004970 3BG0159400 - - - (2,187.00) - (2,187.00)
AD 005028 060198 - - - (2,677.00) - (2,677.00)
AD 005030 061998 - - - (2,641.00) - (2,641.00)
AD 005031 062998 - - - (611.00) - (611.00)
AD 005032 062198 - - - (9,139.00) - (9,139.00)
AC 005104 082098 - 1,837.00 - - - 1,837.00
- 1,837.00 - (17,255.00) - (15,418.00)
7000BOBBYA Bobby Allison Cellular
VO 004998 270 - - - 980.90 - 980.90
VO 004999 277/17/98 - - - 310.00 - 310.00
VO 005125 27013/98 - - - 32.80 - 32.80
- - - 1,323.70 - 1,323.70
7000CELLST CellStar
AD 004968 Wire Transfer - - - (779.08) - (779.08)
VO 0051088110246 - 785.47 - - - 785.47
AD 0051098082098 - (6.39) - - - (6.39)
- 779.08 - (779.08) - -
7000PRIMEC PrimeCo
AD 004995 29838 - - - (74.50) - (74.50)
- - - (74.50) - (74.50)
7000SPRINT Sprint PCS
VO 004489 030598 - - - - 342.00 342.00
VO 004708 WBE-028087 - - - - 684.00 684.00
- - - - 1,026.00 1,026.00
7200ICANEC ICanect
VO 004183 013198 - - - - 269.34 269.34
- - - - 269.34 269.34
90003COM 3Com Credit Corporation
VO 004578 00008985 - - - - 208.00 208.00
- - - - 208.00 208.00
9000BAKERM Baker & McKenzie
VO 004973 50104273 - - 13,403.85 - - 13,403.85
- - 13,403.85 - - 13,403.85
9000CITGRO Sensormatic/CIT Group
CK 013004 005098 (256.18) (256.18)
(256.18) - - - - (256.18)
9000COLLDA Coll Davidson Carter
VO 004969 060898 - - - 17,236.96 - 17,236.96
AD 005117 Court Adj. - (1,653.85) - - - (1,653.85)
- (1,653.85) - 17,236.96 - 15,583.11
9000KELLEY Kelley Drye & Warren, LLP
VO 004858 1302933 - - - - 101,842.14 101,842.14
VO 005026/1307186 - - 28,327.44 - - 28,327.44
VO 0050407070198 - - 21,876.39 - - 21,876.39
VO 0051058081098 - 9,418.14 - - - 9,418.14
- 9,418.14 50,203.83 - 101,842.14 161,464.11
9000KPMG KPMG Peat Marwick
VO 004357 01821 - - - - 6,800.00 6,800.00
- - - - 6,800.00 6,800.00
119.62 12,375.37 63,607.68 452.08 110,145.48 186,700.23
</TABLE>
Note 1 - Negative balances are due to invoices paid in advance of the calendar
month the expense is recorded, except for Kemper Insurance which is an Insurance
refund that is due to 2Connect.
Page 9 of 17
<PAGE> 10
ATTACHMENT #3
INVENTORY AND FIXED ASSETS REPORT
Name of Debtor: 2Connect Express, Inc. Case Number: 98-20169-BKC-RBR
For the Period Beginning August 2, 1998 and Ending August 29, 1998 (fiscal month
per books)
<TABLE>
<CAPTION>
INVENTORY REPORT
<S> <C>
Inventory Balance at Petition Date: $ 2,191,354
===========
Inventory Reconciliation:
Inventory Balance at Beginning of Month (Period) $ 7,049
Inventory Purchased During Month (Period) 17
Inventory Used or Sold: (1,750)
Less Inventory liquidations via court approved auctions --
Less Inventory writedowns to liquidation values (5,316)
-----------
Inventory On-Hand at End of Month (Period) $ --
===========
Method of Costing: Last Cost
FIXED ASSET REPORT
Fixed Assets Fair Market Value at Petition Date:
(includes Property, Plant and Equipment) $ 2,038,164 NBV
===========
Fixed Assets Reconciliation:
Fixed Asset Book Value at Beginning of Month (Period): $ 7,500
Less: Adjustment to books recording anticipated sale to BAC --
Depreciation Expense for Period: --
Court Approved Sales (5,049)
Adjustment to estimated remaining asset values (1,201)
Plus: New Purchases/Additions: --
-----------
Ending Month (Period) Balance per books: $ 1,250
===========
</TABLE>
Page 10 of 17
<PAGE> 11
ATTACHMENT #4
MONTHLY BANK ACCOUNT RECONCILIATION
Name of Debtor: 2Connect Express, Inc. Case Number: 98-20169-BKC-RBR
For the Period Beginning August 2, 1998 and Ending August 29, 1998 (fiscal month
per books)
Separate sheet is required for each bank account, including all savings and
investment accounts (i.e., certificates of deposits, money market accounts,
stocks and bonds, etc.)
NAME OF BANK: First Union National Bank BRANCH: Commercial Banking Broward
ACCOUNT NAME: 2Connect Express, Inc. DIP Operating Account
ACCOUNT NUMBER: 2090002563870
PURPOSE OF ACCOUNT: Post Petition Operating Account
<TABLE>
<S> <C> <C>
Beginning Balance $ 390,217.43
Total of Deposits Made 22,521.41
Amount of Deposits from Account Sweeps (See Note Below) 395,614.84
Amount of Receipts from Account Sweeps (See Note Below) (395,614.84)
Amount of Cash funding Payroll Account (16,614.84)
Total Amount of Checks Written (12,865.37)
------------
Closing Balance $ 383,258.63
============
Number of 1st Check Written This Period: 012978
Number of Last Check Written This Period: 013005
------
Total Number of Checks Written or voided This Period: 27
======
</TABLE>
Note - Daily "Sweep" transfers are made from store depository sub-accounts
(zero balance accounts) to concentration account.
INVESTMENT ACCOUNTS
<TABLE>
<CAPTION>
Type of Negotiable Face Purchase Date of
Instrument Value Price Purchase
<S> <C> <C> <C>
None
</TABLE>
Page 11 of 17
<PAGE> 12
ATTACHMENT #4
MONTHLY BANK ACCOUNT RECONCILIATION
Name of Debtor: 2Connect Express, Inc. Case Number: 98-20169-BKC-RBR
For the Period Beginning August 2, 1998 and Ending August 29, 1998 (fiscal month
per books)
Separate sheet is required for each bank account, including all savings and
investment accounts (I.e., certificates of deposits, money market accounts,
stocks and bonds, etc.)
NAME OF BANK: First Union National Bank BRANCH: Commercial Banking Broward
ACCOUNT NAME: 2Connect Express, Inc. DIP Payroll Account
ACCOUNT NUMBER: 2090002563883
PURPOSE OF ACCOUNT: Post Petition Payroll Account
<TABLE>
<S> <C> <C>
Beginning Balance (0.33)
Total of Deposits Made 16,614.84
Total Amount of Checks Written (16,614.84)
Service Charges
----------
Closing Balance (0.33)
========== Since this is a Zero Balance account,
negative balances represent
outstanding checks.
Number of 1st Check Written This Period: 1954
Number of Last Check Written This Period: 1963
----
Total Number of Checks Written This Period: 9
====
</TABLE>
INVESTMENT ACCOUNTS
<TABLE>
<CAPTION>
Type of Negotiable Face Purchase Date of
Instrument Value Price Purchase
<S> <C> <C> <C>
None
</TABLE>
Page 12 of 17
<PAGE> 13
ATTACHMENT #5
CHECK REGISTER
Name of Debtor: 2Connect Express, Inc. Case Number: 98-20169-BKC-RBR
For the Period Beginning August 2, 1998 and Ending August 29, 1998 (fiscal month
per books)
Name of Bank: First Union National Bank Branch: Commercial Banking Broward
Account Name: 2Connect Express, Inc. DIP Operating Account
Account Number: 2090002563870
Purpose of Account: Primary Operating Account
Account for all check numbers, including voided, lost, stopped payment, etc.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
Date Ck # Payee Purpose Amount
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
8/2/98 Credit American Exp. Chargeback Adj. Check $ (21.48)
8/3/98 012978 Thomas H. Hicks Living Expenses 1,000.00
8/3/98 012979 Renaissance Partners, LC Utilities 1,033.70
8/3/98 012980 CGI-Ft. Lauderdale Freight 106.50
8/3/98 012981 Direct Wireless Inventory 16.95
8/3/98 012982 Cartridge Crafter, Inc. Toner Cartridges 127.09
8/4/98 Debit Merchant Fee Credit Card Fee 60.00
8/4/98 Debit Merchant Interchange Credit Card Fee 5.63
8/5/98 Debit Merchant Fee Credit Card Fee 39.95
8/5/98 Debit Merchant Fee Credit Card Fee 15.00
8/6/98 Debit Merchant Chargeback Chargeback 264.88
8/10/98 Debit Merchant Chargeback Chargeback 1,369.89
8/12/98 Debit Commercial Bank Fees Bank Fees 444.06
8/12/98 Debit Returned Item Chargeback NSF Check 339.20
8/13/98 012983 Maria E. Bolden Postage 35.54
8/13/98 012984 Thomas H. Hicks Postage/Copies 131.13
8/13/98 012985 Renaissance Partners, LC Utilities 277.70
8/13/98 012986 American Stock Transfer Co. Transfer Agent 500.00
8/13/98 012987 Bowne of Atlanta Printing SEC Reports 881.92
8/13/98 012988 Nextel Telephone 12.86
8/13/98 012989 PR Newswire, Inc. Press Releases 70.00
8/13/98 012990 Telecheck Check Processing Fees 112.71
8/13/98 012991 CGI-Ft. Lauderdale Freight 30.25
8/13/98 012992 Florida Power & Light Utilities 409.98
8/18/98 012993 ICanect Internet Service 116.38
8/20/98 012994 Web Store Internet Service 75.00
8/20/98 012995 Florida Department of Revenue Sales Tax 105.24
8/20/98 012996 Pompano Postal Service Postage 30.81
8/20/98 012997 Thomas H. Hicks Postage/Copies 133.65
8/20/98 012998 Renaissance Partners, LC Utilities 285.99
8/20/98 012999 Bowne of Atlanta Printing SEC Reports 478.53
8/20/98 013000 BellSouth Telephone 262.75
8/20/98 013001 Employer's Health Insurance Insurance 35.61
8/20/98 013002 Humana Health Insurance Insurance 778.02
8/20/98 013003 Kahn Carlin Insurance 2,079.83
8/20/98 013004 Sensormatic/CIT Group Equipment Rental 768.54
8/20/98 013005 Florida Power & Light Utilities 413.41
8/21/98 Debit Merchant Chargeback Chargeback 38.15
-----------
$ 12,865.37
===========
</TABLE>
Page 13 of 17
<PAGE> 14
ATTACHMENT #5
CHECK REGISTER
Name of Debtor: 2Connect Express, Inc. Case Number: 98-20169-BKC-RBR
For the Period Beginning August 2, 1998 and Ending August 29, 1998 (fiscal month
per books)
Name of Bank:First Union National Bank Branch:Commercial Banking Broward
Account Name: 2Connect Express, Inc. DIP Payroll Account
Account Number: 2090002563883
Purpose of Account: Payroll Account
Account for all check numbers, including voided, lost, stopped payment, etc.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
Date Ck # Payee Purpose Amount
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
8/7/98 1954 Hicks, Thomas Net Pay $ 3,717.23
8/7/98 1955 Silverman, Patricia Net Pay 59.10
8/7/98 1956 Bolden, Maria Net Pay 937.42
8/7/98 1957 Kinsey, Jeanine Net Pay 800.47
8/7/98 1958 Kinsey, Matthew Net Pay 36.94
8/7/98 Debit ADP Taxes Payroll Taxes 1,119.27
8/7/98 Debit ADP Fees Payroll Fees 54.00
8/21/98 1959 Hicks, Thomas Net Pay 4,731.07
8/21/98 1960 Silverman, Patricia Net Pay 732.31
8/21/98 1961 Bolden, Maria Net Pay 937.42
8/21/98 1962 Chalfant, Christopher Net Pay 738.80
8/21/98 1963 Kinsey, Jeanine Net Pay 800.47
8/21/98 Debit ADP Taxes Payroll Taxes 1,896.34
8/21/98 Debit ADP Fees Payroll Fees 54.00
-----------
$ 16,614.84
===========
</TABLE>
Page 14 of 17
<PAGE> 15
ATTACHMENT #6
MONTHLY TAX REPORT
Name of Debtor: 2Connect Express, Inc. Case Number: 98-20169-BKC-RBR
For the Period Beginning August 2, 1998 and Ending August 29, 1998 (fiscal month
per books)
TAXES PAID DURING THE MONTH (PERIOD)
Report all post-petition taxes paid directly or deposited into the tax account.
<TABLE>
<CAPTION>
Date Bank or Payee Description Amount
---- ------------- ----------- ------
<S> <C> <C> <C>
8/13/98 Florida Department of Revenue Consolidated Sales Tax Return for July, 1998 $ 105.24
8/7/98 IRS and Fla Dept of Rev PR taxes deposited by ADP 1,119.27
8/21/98 IRS and Fla Dept of Rev PR taxes deposited by ADP 1,896.34
-----------
$ 3,120.85
===========
</TABLE>
TAXES OWED AND DUE
Report all unpaid post-petition taxes including Federal and State withholding
FICA, State sales tax, property tax, unemployment tax, and State workmen's
compensation. Date last tax return filed: See Above
<TABLE>
<CAPTION>
Name of Taxing Date Pmt. Description
Authority Due Amount
<S> <C> <C> <C>
Florida Department of Revenue 9/20/98 Consolidated Sales Tax Return for August, 1998 $ 5.27
</TABLE>
Page 15 of 17
<PAGE> 16
ATTACHMENT #7
SUMMARY OF OFFICER OR OWNER COMPENSATION
SUMMARY OF PERSONNEL AND INSURANCE COVERAGES
Name of Debtor: 2Connect Express, Inc. Case Number: 98-20169-BKC-RBR
For the Period Beginning August 2, 1998 and Ending August 29, 1998 (fiscal month
per books)
Report all compensation received during the period. Do not include reimbursement
for expenses incurred for which you have receipts.
Officer or Owner Name Title Amount Paid
Thomas H. Hicks (Resigned as officer CEO COO and CFO 9,770.00
effective 8-27-98)
<TABLE>
<CAPTION>
PERSONNEL REPORT Store Corporate Total
Full Time Part Time Full Time Part Time
<S> <C> <C> <C> <C> <C>
Number of Employees at Beginning of Period - - 3 - 3
Number Hired during Period - - - - 0
Number Terminated or Resigned during Period - - - - 0
Number of Employees on payroll at end of Period 0 0 3 0 3
</TABLE>
CONFIRMATION OF INSURANCE
List all policies of insurance in effect, including but not limited to worker's
compensation, liability, fire, theft, comprehensive, vehicle, health and life.
<TABLE>
<CAPTION>
Agent & Policy Type of Expiry Premium
Carrier Phone # Number Coverage Date Due Date
<S> <C> <C> <C> <C>
Agricultural Excess & Surplus Kahn-Carlin & Company, Inc. NSP2108136 Directors & Officers Liab (See Note) Paid
Roy Fabry
Telephone (954) 767-6066
Reliance Insurance Company Kahn-Carlin & Company, Inc. QB8615829 Commercial Application, Monthly
Property, General Liability,
Business Auto, Garage & Dealers,
Crime, Umbrella
Kemper-American Motorists Ins. Kahn-Carlin & Company, Inc. 3BG01594400 Workers Compensation Monthly
CAN Kahn-Carlin & Company, Inc. 0000685C Employment Related Prac Liab Paid
Humana, Inc. Humana, Inc. Group #133739 Employee Health and Life Monthly
Stacey Granger
Phone (800) 442-5555
</TABLE>
Directors & Officers Liability Insurance is being funded by Directors and
Officers directly, and not being paid for by the Company.
Page 16 of 17
<PAGE> 17
ATTACHMENT #8
SIGNIFICANT DEVELOPMENTS DURING REPORTING PERIOD
For the Period Beginning August 2, 1998 and Ending August 29, 1998 (fiscal month
per books)
The Company filed an 8-K report with the Securities and Exchange Commission on
August 19, 1998 announcing that on August 17, 1998, the Company filed with the
U.S. Bankruptcy Court the Debtor's Monthly Financial Report (Business) for the
period July 5, 1998 to August 1, 1998.
The Company issued a press release on August 28, 1998 announcing that it entered
into an agreement with Sterne, Agee and Leach, Inc., whereby Sterne Agee will,
as of the effective date of the Plan of Reorganization of 2Connect filed with
the U.S. Bankruptcy Court, Southern District of Florida, acquire out of
bankruptcy 100% of the equity interests of 2Connect and 2Connect will retain the
Coral Square store lease and certain store fixtures. In consideration for such
acquisition, Sterne Agee will make a new value contribution to the bankruptcy
estate for the benefit of 2Connect's creditors in the amount of $175,000 which
funds are currently in escrow. To effect this transaction and in accordance with
the Plan of Reorganization, as amended on August 7, 1998, upon the Effective
Date, all of the current and existing Common Stock of 2Connect will be forever
extinguished and canceled and 2Connect will issue new shares of Common Stock to
Sterne Agee which shall constitute 100% of the issued and outstanding shares.
The Bankruptcy Court scheduled a hearing to confirm the Plan of Reorganization
for October 14, 1998. The Effective Date is to occur 10 days after confirmation
of the Plan of Reorganization.
Also pursuant to the terms of the Agreement, and effective August 27, 1998, all
of the members of the Board of Directors, except for Marc D. Fishman, resigned
from the Board of Directors and Mr. Fishman, as sole remaining director, and, in
accordance with the Bylaws of 2Connect, appointed James S. Holbrook, Jr., Craig
R. Heyward and F. Eugene Woodham, each of whom are employees of Sterne, Agee, to
fill three of the vacancies. The Board of Directors has further resolved to
appoint James S. Holbrook, Jr. as the Chairman of the Board and, in accordance
with the Bylaws of 2Connect, to designate that the Chairman of the Board is the
Chief Executive Officer of the Corporation.
The Company subsequently on September 1, 1998, filed an 8-K report with the
Securities and Exchange Commission, containing the aforementioned Press Release
information and, as an Exhibit, the Agreement by and between the Company and
Sterne, Agee dated August 27, 1998.
Page 17 of 17
