EXHIBIT 5.3
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OFFICE OF THE UNITED STATES TRUSTEE
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IN RE: ) DEBTOR IN POSSESSION OPERATING REPORT
)
Wahlco, Inc. ) REPORT NUMBER 4 Page 1 of 3
) FOR THE PERIOD FROM 1-Mar-00
DEBTOR ) TO: 31-Mar-00
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CHAPTER 11 CASE NO. SA99-22772-JR )
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1. Profit and Loss Statement
A. Related to Business Operations:
Gross Sales
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Less Sales Returns and Discounts
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Net Sales
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Less: Cost of Goods Sold
Beginning Inventory at Cost
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Add: Purchases
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Less: Ending Inventory at Cost
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Cost of Goods Sold
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Gross Profit
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Other Operating Revenue (Specify)
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Less: Operating Expenses SEE ATTACHED
Officer Compensation
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Salaries & Wages - Other Employees
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Total Salaries & Wages
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Employee Benefits
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Payroll Taxes
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Real Estate Taxes
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Federal and State Income Taxes
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Total Taxes
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Rent and Lease Exp. (Real and Personal Property)
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Interest Expense (Mortgage, Loan, etc.)
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Insurance
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Automobile Expense
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Utilities (Gas, Electric, Water, Telephone, etc.)
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Depreciation and Amortization
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Repairs and Maintenance
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Advertising
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Supplies, Office Expenses, Photocopies, etc.
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Bad Debts
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Miscellaneous Operating Expenses (Specify)
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Total Operating Expenses
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Net Gain/(Loss) from Business Operations
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B. Not Related to Business Operations
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Income:
Interest Income
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Other Non-Operating Revenues (Specify)
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Gross Proceeds on Sale of Assets
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Less: Original Cost of Assets plus Expenses of Sale
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Net Gain/(Loss) on Sale of Assets
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Total Non-Operating Income
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Expenses Not Related to Business Operations:
Legal and Professional Fees
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Other Non-Operating Revenues (Specify)
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Total Non-Operating Expenses
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NET INCOME /(LOSS) FOR PERIOD
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Revised April 1989 OPERATING REPORT UST-4
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Wahlco, Inc.
Income Statement
3/01/00 to
3/31/00 **
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Revenue
Contract Revenue - FGC 900,136
Contract Revenue - DeNox/U2A 19,080
Contract Revenue - HTC 276,401
Test Service Fees 10,000
FGC Service Contracts -
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Total Revenue 1,205,617
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Cost of Revenue
Cost Of Contract Revenue - FGC 581,512
Cost Of Contract Revenue - DeNox/U2A 14,514
Cost Of Contract Revenue - HTC 88,007
Cost Of Test Service Fees 15,001
Cost Of FGC Service Contracts 8,345
Applied Overhead - FGC -
Warranty -
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Total Cost of Revenue 707,379
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Gross Margin 498,238
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Gross Margin Percent 41.33%
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Selling General and Administrative Expenses
Salaries & Wages 133,897
Payroll Taxes 19,884
Employee Benefits 17,774
Interco-Salary Allocation -
Sales Commission Expense 34,801
Rent 18,724
Repairs & Maintenance 34,406
Telephone 1,087
Utilities 6,165
Taxes & Licenses 6,313
General Insurance -
Depreciation 6,089
Bank Charges/Security/Contributions 8,793
Supplies 11,927
Reproduction & Copying 462
Equipment Rental 855
Small Tools 959
Postage 452
Dues & Subscriptions (51)
Freight (656)
Sales Promotion -
Advertising -
Business Meetings & Conferences 65
Trade Shows -
Business Promotion -
Travel/Auto/Lodging 6,870
Meals & Entertainment 842
Legal -
Total Sales Promotion (15)
Audit & Accounting Services 100
Computer Services 5,597
Temporary Services 14,878
Management Fees -
Other Consultant Fees 20,686
Loss on Commission Advance -
Overhead Applied - Engr Dept (56,721)
Overhead Applied - Manuf Dept (109,741)
Overhead Applied - Field Dept (14,272)
Overhead Applied - Q.C. Dept -
Overhead Applied - Contracts -
Other Income & Expense -
Interest And Dividend Income -
Research And Development -
Bad Debt Expense -
Gain Or Loss On Sale Of Assets -
Other 6,297
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Total Selling, General & Administrative Expenses 176,467
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Operating Income (Loss) 321,771
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Other (Income) Expenses
Interest Expense 511
Amortization - Intangibles 9,167
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Total Other (Income)Expenses 9,678
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Income Taxes
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Income Taxes -
Tax Provision - Current -
Tax Provision - Deferred -
Federal Tax Provision - Deferred -
Total Income Taxes -
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Net Income (Loss) - note 1 312,093
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Note 1 - This statement has not been adjusted to reflect the appropriate
allocation of
corporate expenses (including restructuring charges).
Due to the 1999 financial results not being finalized by our independent
auditors the above data is subject to change.
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DEBTOR IN POSSESSION OPERATING REPORT NO. 4
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Wahlco, Inc., Xxxxxx Xxxx Xx. XX00-00000-XX
Page 2 of 3
2. Aging of Accounts Payable and Receivable (exclude pre-petition debt from
accounts payable):
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Accounts Payable Accounts Receivable
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Current Under 30 days $347,775.78 $ 553,041.24
Overdue 31 - 60 days 366,239.34 1,285,224.70
Overdue 61 - 90 days 298.60 790,885.23
Overdue 91 - 120 days - 657,275.51
Overdue 121 + days - 335,001.55
Total $714,313.72 $3,621,428.23
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3. Statement of Status of Payments to Secured Creditors and Lessors:
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Post-Petition
Frequency of Payments Not Made
Payments per Amount of ---------------------
Creditor/Lessor Lease/Contract Each Payment Next Payment Due Number Amount
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Wexford Management Payments have been suspended due to Chapter 11 filing
Hewlett Packard Monthly $ 2,680.00 4/1/00 2 $5,360.00
South County Prop Monthly 48,724.00 4/1/00 0
Xerox Corp Monthly 442.00 4/1/00 2 884.00
Xerox Corp Monthly 352.00 4/1/00 1 352.00
Xerox Corp Monthly 991.00 4/1/00 3 2,973.00
Xerox Corp Monthly 92.50 4/1/00 2 185.00
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4. Tax Liability:
Gross Payroll Expense For Period 292,349
Gross Sales for Period Subject to Sales Tax 1,600 estimated
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Post Petition Taxes
Date Paid Amount Paid * Still Owing
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Federal Payroll and Withholding Taxes various (see below **) $86,492.80 $ -
State Payroll and Withholding Taxes various (see below **) 14,110.10 -
State Sales and Use Tax 500 estimated
Real Property Taxes -
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* Attach photocopies of depository receipts from taxing authority or
financial institution to verify that such deposits or payments have
been made.
** State and federal payroll/withholding taxes are paid by a payroll
service provider. At the end of the month we accrue for payroll which
has not yet been paid. This accrual is included as part of the above
gross payroll expense total. We do not show any post petition taxes
still owing on these accruals as the taxes will not be due until the
payroll is actually paid. This accrued payroll was dated and paid on
4/12/00
5. Insurance Coverage
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Carrier/ Amount of Policy Premium Paid
Agent Coverage Exp. Date Thru Date
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Worker's Compensation
Liability See attached for Insurance Coverage
Fire and Extended Coverage
Property
Theft
Life (Beneficiary:________________)
Vehicle
Other
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DEBTOR IN POSSESSION OPERATING REPORT NO. 4
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Wahlco, Inc., Xxxxxx Xxxx Xx. XX00-00000-XX
Page 3 of 3
6. Questions:
A. Has the Trustee provided to any officers, directors, shareholders, or
other principals compensation without the approval of the Office of the
United States Trustee?
_____ : Yes Explain:
_____________________________________________
__X__ : No
B. Has the Trustee, subsequent to the filing of the petition made any
payments on its pre-petition unsecured debt, except as have been
authorized by the Court?
_____ : Yes Explain:
_____________________________________________
__X__ : No
7. Statement of Unpaid Professional Fees (Post-Petition Only):
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Type Post-Petition
Name of Professional Professional Unpaid Total
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See the Thermatrix Inc. report for detail
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8. Narrative Report of Significant Events And Events Out Of The Ordinary Course
Of Business:
9. Quarterly Fees: (This Fee must be paid to the United States Trustee every
calendar quarter)
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Quarterly
Quarterly Disbursements Quarterly Quarterly
Period Ending for Quarter Fee Date Paid Amount Paid Check No. Fee Still Owing
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3/31/00 $2,309,553.00 $7,500.00 $7,500.00
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I, Xxxxxx Xxxxxx, President, declare under penalty of perjury that the
information contained in the above Debtor in Possession Operating Report, which
is subject to further review and verification, is true and complete to the best
of my knowledge.
Dated: 4/17/00 Signed: /s/ Xxxxxx X. Xxxxxx
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