Monitor's Second Report to Court

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					                                                                      No. S094760
                                                                 Vancouver Registry




           IN THE SUPREME COURT OF BRITISH COLUMBIA


  IN THE MATTER OF THE COMPANIES’ CREDITORS ARRANGEMENT ACT
                   R.S.C. 1985, c. C-36, as amended

                                  AND

    IN THE MATTER OF THE ALBERTA BUSINESS CORPORATIONS ACT,
                    R.S.A. 2000, c. B-9, as amended


                                  AND

IN THE MATTER OF PRECISION ASSESSMENT TECHNOLOGY CORPORATION
                                  (“PATC”)
                                    AND
 PRECISION ASSESSMENT TECHNOLOGY (US) CORPORATION (“PATC (US)”)
                (Collectively referred to as the “Company”)



              MONITOR’S SECOND REPORT TO COURT
            (Prepared for the September 4, 2009 Court Hearing)

                            September 2, 2009
          PRECISION ASSESSMENT TECHNOLOGY CORPORATION, and
          PRECISION ASSESSMENT TECHNOLOGY (US) CORPORATION

                          MONITOR’S SECOND REPORT TO COURT

                                             SEPTEMBER 2, 2009


                                          TABLE OF CONTENTS

1    INTRODUCTION..........................................................................................................1

2    BACKGROUND AND CAUSES OF FINANCIAL DIFFICULTY..........................2

3    SECURED CREDITORS..............................................................................................4

4    UNSECURED CREDITORS........................................................................................6

5    SUMMARY OF ASSETS..............................................................................................8

6    SALE OF CERTAIN ASSETS FROM PATC AND TSI .........................................12

7    SALE OF DIRECT SENSING INC. SHARES .........................................................15

8    POST FILING OPERATIONS ..................................................................................17

9    ACTIVITIES OF THE MONITOR ...........................................................................18

10   RESTRUCTURING PLAN.........................................................................................18

11   EXTENSION OF THE STAY ....................................................................................19


APPENDICES


A.   Corporate Organization Structure
B.   Management Prepared Financial Reports of PATC, PATC (US), TSI and PSI
C.   Cash Flow Forecast and Actual Results
          PRECISION ASSESSMENT TECHNOLOGY CORPORATION, AND
          PRECISION ASSESSMENT TECHNOLOGY (US) CORPORATION

                    MONITOR’S SECOND REPORT TO COURT

                                   SEPTEMBER 2, 2009



1   INTRODUCTION

    1.1     Details relating to Precision Assessment Technology Corporation (“PATC”), and
            Precision Assessment Technology (US) Corporation (“PATC (US)”) (collectively
            referred to as the “Company”) and the filing are set out in the Petition filed on
            June 25, 2009. The initial order under the Companies’ Creditors Arrangement Act
            (“CCAA”) was made on June 25, 2009 (the “Initial Order”). Under the Initial
            Order, PricewaterhouseCoopers Inc. was appointed Monitor (the “Monitor”).

    1.2     Pursuant to the Initial Order, the comeback hearing was set for July 24, 2009 and
            a stay of proceedings was granted to July 24, 2009.

    1.3     At the comeback hearing, the Company asked for and was granted an extension of
            the stay of proceedings until September 4, 2009.

    1.4     The Monitor’s First Report to the Court was dated July 22, 2009 and was
            prepared for the comeback hearing of July 24, 2009.

    1.5     This represents the Monitor’s Second Report to the Court with respect to the
            CCAA filing of the Company. The purpose of this report is to inform the Court
            as well as interested stakeholders of the following:

            1.5.1   Background of the Company and the causes of its financial difficulty;

            1.5.2   The Company’s secured and unsecured creditors;

            1.5.3   The nature and extent of the Company’s assets;

            1.5.4   Term sheets with respect to the sale of certain assets;

            1.5.5   The Company’s post-filing operations;




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          PRECISION ASSESSMENT TECHNOLOGY CORPORATION, AND
          PRECISION ASSESSMENT TECHNOLOGY (US) CORPORATION

                    MONITOR’S SECOND REPORT TO COURT

                                  SEPTEMBER 2, 2009



            1.5.6   The activities of the Monitor; and

            1.5.7   The Monitor’s support for an extension of the stay of proceedings.

2   BACKGROUND AND CAUSES OF FINANCIAL DIFFICULTY

    2.1     Organizational Structure

            2.1.1   PATC is a company incorporated pursuant to the laws of Alberta and its
                    head office is located in Vancouver, British Columbia; however, its
                    registered and records office is located at #500, 855 – 2 Street SW,
                    Calgary, Alberta, T2P 4J8.

            2.1.2   PATC (US) is a wholly owned subsidiary of PATC and is incorporated
                    pursuant to the laws of California but its offices are located in Vancouver,
                    British Columbia. PATC (US) is a holding company, and it is through
                    PATC (US) and its wholly owned operating subsidiaries that it provides
                    drilling services and related technologies to environmental and
                    engineering consulting firms in the United States.

            2.1.3   Appendix A is a diagram of the current corporate organizational structure.

    2.2     Operations

            2.2.1 PATC (US)’s operating subsidiaries are Precision Sampling, Inc. (“PSI”)
                  and Trenchless Specialties, Inc (“TSI”). PSI was acquired by PATC (US)
                  in 1999 and its operations are based in Orlando, Florida and Richmond,
                  California. TSI was acquired by PATC (US) in 2005 and operates in
                  Orlando, Florida. TSI also has a wholly owned subsidiary, Direct Sensing
                  Inc. (“DSI”), which is also based in Orlando Florida.




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      PRECISION ASSESSMENT TECHNOLOGY CORPORATION, AND
      PRECISION ASSESSMENT TECHNOLOGY (US) CORPORATION

                  MONITOR’S SECOND REPORT TO COURT

                              SEPTEMBER 2, 2009



        2.2.2   The Company, through its subsidiaries, provides drilling services for site
                and ground water characterization and remediation and underground
                utility installation. The Company specializes in the use of a wide variety
                of drill rigs, tools, equipment and technologies. The current customer
                focus is on environmental and geotechnical engineers throughout the
                United States and land developers in Florida.

        2.2.3   The Company’s original business goal was to attempt to consolidate the
                extremely fragmented and capital intensive drilling service industry in
                North America.

2.3     Funding

        2.3.1   The purchase of businesses and equipment for the Company and its
                subsidiaries has largely been funded by loans and equity investments by
                Comerica Bank (“Comerica”), Conor Pacific Canada Inc. (“Conor”) and
                PATC No. 1 Limited Partnership (“PATC LP”).

2.4     Causes of Financial Difficulty

        2.4.1   In 2007, the slowdown of the United States housing market began to
                increase substantially. In Florida where the Company had substantial
                operations, the slowdown had a significant negative impact. The
                Company attempted to diversify its operational activities to include
                municipal and infrastructure projects but these efforts were not able to
                compensate for the housing slowdown. Cash flow and profits of
                operations in Florida were significantly lower than forecast by the
                Company for the past two years.




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          PRECISION ASSESSMENT TECHNOLOGY CORPORATION, AND
          PRECISION ASSESSMENT TECHNOLOGY (US) CORPORATION

                    MONITOR’S SECOND REPORT TO COURT

                                  SEPTEMBER 2, 2009



    2.5     Financial Reporting

            2.5.1   The management prepared financial reports for PATC, PATC (US), TSI
                    and PSI as at July 31, 2009, and copies are attached as Appendix B.
                    PATC is show in Canadian dollar currency (“CAD”) while all others are
                    shown in US dollar currency (“USD”). All figures are CAD unless stated
                    otherwise.

                    2.5.1.1 Management has not prepared consolidated financial statements
                            for the period ending July 31, 2009 as of the date of this report.

                    2.5.1.2 The Monitor has reviewed previous periods consolidation reports
                            and notes that all intercompany balances shown due to/from
                            related entities net to zero upon consolidation. For the purposes of
                            our review for this report, we have not explicitly reviewed the
                            intercompany balances owing/due.

            2.5.2   The US to Canadian dollar exchange rate used in this report where noted
                    was $1.1066 which was the stated exchange rate at August 31, 2009.

3   SECURED CREDITORS

    3.1     PATC owes Comerica approximately $1.73 million USD ($1.88 million CAD at
            an exchange rate of $1.1066) as of July 31, 2009.

            3.1.1   All of the indebtedness of PATC to Comerica is secured by a general
                    security interest over PATC’s assets and had been guaranteed by TSI and
                    PSI.

    3.2     PATC (US) owes Comerica approximately $1.49 million USD ($1.65 million
            CAD at an exchange rate of $1.1066) as of July 31, 2009.




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      PRECISION ASSESSMENT TECHNOLOGY CORPORATION, AND
      PRECISION ASSESSMENT TECHNOLOGY (US) CORPORATION

                MONITOR’S SECOND REPORT TO COURT

                              SEPTEMBER 2, 2009



        3.2.1   The indebtedness of PATC (US) to Comerica is secured by a general
                security interest over PATC (US)’s assets and a specific assignment of the
                receivables of PSI, TSI and DSI.

3.3     PATC owes Conor approximately $6.2 million ($5.64 million USD at an
        exchange rate of $1.1066) plus accrued interest at 8% since January 2009 and fees
        of $69,905. The total balance is approximately $6.64 million.

        3.3.1   All of the indebtedness of PATC to Conor is secured by a general security
                interest and guarantees provided by PATC (US), TSI and PSI.

3.4     PATC and PSI jointly owe PATC LP approximately $2.95 million for unpaid
        equipment lease payments (currently 8 months in arrears).

        3.4.1   The Monitor has been informed that the indebtedness of PATC and PSI to
                PATC LP is secured by a general security interest in all present and future
                assets of PSI including accounts receivable generated by the leased
                equipment.

        3.4.2   PATC LP was formed by Conor following the unexpected collapse of an
                investment by a private equity fund in late 2007. PATC LP is owned 40%
                each by Robert Nowack and Jim Bond who hold controlling interests in
                entities that have ownership interests in PATC.

3.5     The combined total of amounts owed by the Company to all the secured creditors
        is approximately $13.1 million.




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          PRECISION ASSESSMENT TECHNOLOGY CORPORATION, AND
          PRECISION ASSESSMENT TECHNOLOGY (US) CORPORATION

                    MONITOR’S SECOND REPORT TO COURT

                                  SEPTEMBER 2, 2009



4   UNSECURED CREDITORS

    4.1     PATC had $2.66 million owing to unsecured creditors as at July 31, 2006. This
            amount does not take into account any intercompany balances owing. The
            unsecured debt includes the following:

            4.1.1   Approximately $991,000 related to trade creditors;

            4.1.2   $885,000 in accrued liabilities;

            4.1.3   $209,000 acquisition costs due; and

            4.1.4   $576,000 of income taxes payable.

    4.2     PATC US had approximately $36,000 USD ($40,000 CAD at an exchange rate of
            $1.1066) of accounts payable.

    4.3     TSI had approximately $816,000 USD ($903,000 CAD at an exchange rate of
            $1.1066) of unsecured creditors as at July 31, 2006. This amount does not take
            into account any intercompany balances owing.

            4.3.1   Approximately $616,000 USD ($682,000 CAD at an exchange rate of
                    $1.1066) related to trade creditors while the remainder was for accrued
                    taxes, expenses and employment liabilities.

    4.4     PSI had approximately $903,000 USD ($1.0 million CAD at an exchange rate of
            $1.1066) of unsecured creditors as at July 31, 2006. This amount does not take
            into account any intercompany balances owing.

            4.4.1   Approximately $703,000 USD ($778,000 CAD at an exchange rate of
                    $1.1066) related to trade creditors while the remainder was for accrued
                    taxes, expenses and employment liabilities.




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      PRECISION ASSESSMENT TECHNOLOGY CORPORATION, AND
      PRECISION ASSESSMENT TECHNOLOGY (US) CORPORATION

                MONITOR’S SECOND REPORT TO COURT

                              SEPTEMBER 2, 2009



4.5     The total value of all the unsecured creditor claims of the Company and its
        subsidiaries as at July 31, 2009 was approximately $4.56 million.

4.6     In addition to the unsecured creditor claims that are currently recorded on the
        books and records of the Company and its subsidiaries, there are a number of
        contingent liabilities, each of which the Company disputes either in part or in
        whole. The contingent claims that the Company is aware of consist of the
        following:

        4.6.1   Two claims by Brian Shutts, a former owner and employee of TSI, for
                alleged breach of a share purchase agreement that total approximately
                $750,000 USD plus legal fees.

        4.6.2   A claim by Brian Shutts for approximately $350,000 USD plus legal fees
                associated with a wrongful dismissal action.

        4.6.3   A claim by Lockerbie and Hole Inc. for $250,000 USD for an alleged
                breach of a profit sharing agreement.

        4.6.4   A claim by Liberty Mutual Insurance for $55,000 USD relating to a
                Worker’s Compensation Audit.

        4.6.5   A breach of contract claim by Mr. Kirschener that totals approximately
                $85,000.

4.7     None of the above parties have submitted formal claims in these proceedings and
        accordingly, none are confirmed or denied claims.

4.8     The Monitor has reviewed at a high level the claims of Mr. Shutts. No other
        potential claims have been reviewed by the Monitor at this point. The Monitor
        anticipates examining each of the claims as part of the claims administration
        process.




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          PRECISION ASSESSMENT TECHNOLOGY CORPORATION, AND
          PRECISION ASSESSMENT TECHNOLOGY (US) CORPORATION

                    MONITOR’S SECOND REPORT TO COURT

                                  SEPTEMBER 2, 2009



    4.9     The Company is intending to file a plan of arrangement with its creditors in order
            to restructure its operations. The Monitor has not seen a copy of the proposed
            plan as of the date of this report but is working with the Company in the
            formulation of the plan. The Monitor is working with the Company in the
            formulation of a plan; however, the Monitor has not seen a copy of the proposed
            plan.

5   SUMMARY OF ASSETS

    5.1     As at July 31, 2009, PATC had total assets, not including investments in
            subsidiaries and intangible assets, with a book value of approximately $4.2
            million.

            5.1.1   The fixed assets primarily consist of equipment, vehicles and drilling rigs.
                    The book value of these assets is approximately $3.7 million.

                    5.1.1.1 The Monitor has not attempted to value each of the specific assets
                            but has determined that the liquidation value of these assets would
                            likely be significantly less than the book value given the current
                            state of the economy and the low demand for these type of assets

            5.1.2   PATC had approximately $395,000 of prepaid expenses for items such as
                    insurance.

                    5.1.2.1 The Monitor has not attempted to determine what the liquidation
                            value of these prepaid expenses would be, however, limited if any
                            value would materialize in an outright liquidation.

            5.1.3   PATC had approximately $14,000 in cash.

    5.2     As at July 31, 2009 PATC (US)’s only asset was cash of $1,200 USD ($1,300
            CAD at an exchange rate of $1.1066).




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      PRECISION ASSESSMENT TECHNOLOGY CORPORATION, AND
      PRECISION ASSESSMENT TECHNOLOGY (US) CORPORATION

                MONITOR’S SECOND REPORT TO COURT

                              SEPTEMBER 2, 2009



5.3     As at July 31, 2009, PSI had total assets, not including investments in subsidiaries
        and intangibles, with a book value of approximately $1.8 million USD ($2.0
        million CAD at an exchange rate of $1.1066).

        5.3.1   The fixed assets primarily consist of equipment, vehicles and drilling rigs.
                The book value of these assets is approximately $452,000 USD ($500,000
                CAD at an exchange rate of $1.1066).

                5.3.1.1 The Monitor has not attempted to value each of the specific assets
                        but has determined that the liquidation value of these assets would
                        likely be significantly less than the book value given the current
                        state of the economy and the low demand for these types of assets.

        5.3.2   PSI has approximately $110,000 USD ($121,000 CAD at an exchange rate
                of $1.1066) of prepaid expenses for items such as insurance and rent.

                5.3.2.1 The Monitor has not attempted to determine what the liquidation
                        value of these prepaid expenses would be, however, in an outright
                        liquidation there would be little, if any, realizable value.

        5.3.3   PSI has approximately $947,000 USD ($1.05 million CAD at an exchange
                rate of $1.1066) of trade receivables.

                5.3.3.1 The Monitor has been advised by local management that most of
                        the receivables are current and high quality accounts that it
                        anticipates would be collected in the normal course.

        5.3.4   PSI had approximately $102,000 USD ($113,000 CAD at an exchange
                rate of $1.1066) in cash.




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      PRECISION ASSESSMENT TECHNOLOGY CORPORATION, AND
      PRECISION ASSESSMENT TECHNOLOGY (US) CORPORATION

                MONITOR’S SECOND REPORT TO COURT

                              SEPTEMBER 2, 2009



5.4     As at July 31, 2009, TSI (including the DSI 100% owned subsidiary) had total
        assets, not including investments in subsidiaries or intangibles, with a book value
        of approximately $3.2 million USD ($3.5 million CAD at an exchange rate of
        $1.1066).

        5.4.1   The fixed assets primarily consist of equipment, downhole bits and
                tooling, vehicles and drilling rigs. The book value of these assets is
                approximately $1.6 million USD ($1.8 million CAD at an exchange rate
                of $1.1066).

                5.4.1.1 The Monitor has not attempted to value each of the specific assets
                        but has determined that the liquidation value of these assets would
                        likely be significantly less than the book value given the current
                        state of the economy and the low demand for these types of assets.

                5.4.1.2 The proposed sale of the TSI fixed assets, not including the DSI
                        assets but also including certain sonic rigs on the PSI balance sheet
                        located in Florida, contemplates a value of $2.0 million USD ($2.2
                        million CAD at an exchange rate of $1.1066).

        5.4.2   TSI has approximately $1.38 million USD ($1.52 million CAD at an
                exchange rate of $1.1066) of trade receivables.

                5.4.2.1 The Monitor has been advised by local management that most of
                        the receivables are current and high quality accounts that it
                        anticipates would be collected in the normal course.

        5.4.3   TSI has approximately $14,000 USD ($17,000 CAD at an exchange rate
                of $1.1066) of prepaid expenses for items such as insurance and
                refundable deposits.

        5.4.4   TSI had approximately $59,000 USD ($65,000 at an exchange rate of
                $1.1066) in cash.



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      PRECISION ASSESSMENT TECHNOLOGY CORPORATION, AND
      PRECISION ASSESSMENT TECHNOLOGY (US) CORPORATION

                MONITOR’S SECOND REPORT TO COURT

                              SEPTEMBER 2, 2009



5.5     As at July 31, 2009, the total value of the assets of PATC and all of its
        subsidiaries, ignoring intercompany balances and intangibles, is $9.7 million.

        5.5.1   Given the current state of the economy and the low demand for drilling
                and related equipment, it is the opinion of the Monitor that the liquidation
                value of the fixed assets would be much lower than the book values.

5.6     The Monitor has reviewed the investment accounts in subsidiaries assets and the
        intangible asset items on the books of each of the legal entities and determined
        that there would be very little or no value in these assets in a going concern sale
        or liquidation.

5.7     The Monitor notes that the total value of the tangible fixed assets, approximately
        $9.7 million is lower than the amount owed to the secured creditors which is
        approximately $13.1 million.

        5.7.1   The gap of approximately $3.4 million due to the secured creditors is
                increased significantly once the book value of assets is reduced to reflect
                the realizable value of these assets in an orderly of forced liquidation.
                Accordingly, absent any plan of arrangement, it is unlikely that the
                unsecured creditors would obtain any realization on amounts owing to
                them.




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          PRECISION ASSESSMENT TECHNOLOGY CORPORATION, AND
          PRECISION ASSESSMENT TECHNOLOGY (US) CORPORATION

                    MONITOR’S SECOND REPORT TO COURT

                                  SEPTEMBER 2, 2009



6   SALE OF CERTAIN ASSETS FROM PATC AND TSI

    6.1     The Company has had ongoing discussions with Randy Bratcher and Brian Shutts
            (collectively the “TSI Purchasers”) for over six weeks with respect to a potential
            sale of the TSI assets. The culmination of these discussions came on
            August 31, 2009 when the Company and the TSI Purchasers entered into an
            agreement for the Company to sell all the drilling rigs, vehicles, tooling,
            inventory, related equipment, office furniture and equipment located in Orlando
            Florida, trade names, trade deposits, Orlando Magic tickets and all contracts and
            bids of or used in the operations of the Groundwater Protection and Trenchless
            Specialties divisions of TSI (hereinafter collectively referred to as the “TSI
            Purchased Assets”).

            6.1.1   Randy Bratcher and Brian Shutts were both co-owners of the original TSI
                    business and assets when they were acquired by PATC (US) in 2005.

            6.1.2   Randy Bratcher is currently the general manager of TSI in Orlando,
                    Florida.

            6.1.3   Brian Shutts was formerly an employee of TSI but he was relieved of his
                    duties in 2008. Brian has disputed his dismissal and initiated legal
                    proceedings against the Company with respect to his dismissal.

                    6.1.3.1 In addition to his wrongful dismissal lawsuit, Brian has also begun
                            legal proceedings associated with his original sale of the TSI
                            business to PATC (US). These claims surround shares held in
                            escrow and additional shares that could have been earned through
                            an earn-out provision in the original purchase and sale contract.

                    6.1.3.2 Mr. Shutts has estimated the total value of his claims to be
                            approximately $1.1 million USD plus legal fees to be incurred. The
                            Company has denied that there are any amounts owing to
                            Mr. Shutts.



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PRECISION ASSESSMENT TECHNOLOGY CORPORATION, AND
PRECISION ASSESSMENT TECHNOLOGY (US) CORPORATION

          MONITOR’S SECOND REPORT TO COURT

                        SEPTEMBER 2, 2009



          6.1.3.3 The Monitor has reviewed each of the claims from Mr. Shutts but
                  has not attempted to value or validate these alleged claims. These
                  claims may be subject to US labour and corporate laws.

  6.1.4   The total proceeds for the TSI Purchased Assets will be $2.0 million USD
          (“TSI Purchase Price”). The Purchase Price will either be paid in cash or
          the assumption of $2.0 million of Comerica debt, subject to the agreement
          of Comerica.

  6.1.5   The Company will retain all of the working capital (which Comerica has a
          first charge against) but has agreed to loan the TSI Purchasers up to
          $500,000 of working capital secured by the Accounts Receivables of the
          TSI Purchasers and the TSI Purchased Assets if Comerica provides its
          consent to do so.

  6.1.6   In addition to the purchase price proceeds, the TSI Purchasers and the
          Company have agreed to mutual releases and immediate dismissal of all
          legal proceedings that have arisen from past dealings.

  6.1.7   The effective closing date of the sale is planned to be October 31, 2009,
          but could be completed by the end of September if the TSI Purchasers can
          have their financing arranged prior to this time.

  6.1.8   Until the closing of the proposed transaction, the TSI Purchasers will be
          named joint custodians of the operation and will continue to operate the
          business for the full benefit of the Company and its creditors.

  6.1.9   All of the current employees of TSI will be hired by the TSI Purchasers
          through their new entity and TSI will have no future obligations to those
          employees.




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      PRECISION ASSESSMENT TECHNOLOGY CORPORATION, AND
      PRECISION ASSESSMENT TECHNOLOGY (US) CORPORATION

                MONITOR’S SECOND REPORT TO COURT

                               SEPTEMBER 2, 2009



6.2     The Monitor has been kept apprised of the ongoing negotiations between the
        Company and the TSI Purchasers.

        6.2.1   The proceeds from the transaction will be used to pay down $2.0 million
                of the Comerica debt.

        6.2.2   All of the receivables of TSI that are retained by the Company will be
                used to further pay-down the Comerica loans. As previously stated,
                Comerica has a first charge security against all of the accounts receivable
                of TSI.

        6.2.3   Comerica has been regularly undated on the status of the negotiations with
                respect to the sale and it is expected to endorse the deal. At the date of
                this report, its formal acceptance had not been obtained.

        6.2.4   Conor has a second charge against the assets of TSI. Although the
                potential for any recovery to Conor under this transaction is low, it is
                expected that Conor will also support this transaction as it provides the
                greatest potential for realization with respect to other assets held by the
                Company.

        6.2.5   The TSI subsidiary is not currently under the CCAA proceedings, nor
                have any proceedings been commenced in the US to bring this entity
                under the auspices of the US Bankruptcy Code. However, it is the
                intention of the Company that it will assist TSI with an informal proposal
                to all of its unsecured trade creditors in order to provide for an orderly
                resolution of the debts of the TSI entity.

6.3     A copy of the Term Sheet between the Company and the TSI Purchasers is
        included in the Affidavit #4 of Robert Nowack dated September 1, 2009.




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          PRECISION ASSESSMENT TECHNOLOGY CORPORATION, AND
          PRECISION ASSESSMENT TECHNOLOGY (US) CORPORATION

                    MONITOR’S SECOND REPORT TO COURT

                                  SEPTEMBER 2, 2009



7   SALE OF DIRECT SENSING INC. SHARES

    7.1     The Company has had ongoing discussions with JBZ Capital Inc. (“JBZ”) for a
            number of months with respect to the sale of the DSI subsidiary. On August 24,
            2009, the Company was presented with a Term Sheet that it feels is a fair offer for
            the purchase of all the issued and outstanding shares of DSI (“DSI Sale”).

            7.1.1   The DSI Sale is subject to approval by the TSX Venture Exchange.

            7.1.2   The consideration to the Company will be comprised of the following:

                    7.1.2.1 $2.0 million USD for the drilling rigs, technology, name and
                            ancillary equipment/tooling payable by issue of approximately
                            19.1 million shares of JBZ.

                    7.1.2.2 Approximately 2.5 million warrants with an exercise price of $0.13
                            with a five year expiry for the working capital estimated to be
                            approximately $300,000 USD.

                    7.1.2.3 There will be an earn-out bonus available of approximately
                            $250,000 payable by 2.17 million shares if the 2010 audited sales
                            and earnings before interest, taxes, depreciation and amortization
                            exceed the 2009 audited financial results by 10%.

    7.2     It is contemplated in the terms of the DSI Sale that the transaction will close by
            the end of September 2009.




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      PRECISION ASSESSMENT TECHNOLOGY CORPORATION, AND
      PRECISION ASSESSMENT TECHNOLOGY (US) CORPORATION

                MONITOR’S SECOND REPORT TO COURT

                              SEPTEMBER 2, 2009



7.3     The Monitor has been kept apprised of the ongoing negotiations between the
        Company and JBZ.

        7.3.1   Assuming the transaction for the TSI assets detailed above proceeds as
                contemplated and the Comerica debt is paid out, the JBZ shares received
                as compensation for the transaction will be used to pay down
                approximately $2.3 million USD of the Conor secured debt that is
                outstanding. Comerica will need to endorse this transaction since it is
                scheduled to close prior to the sale of the TSI Purchased Assets and any
                payout of the Comerica debt.

        7.3.2   Any future payments received with respect to the earn-out provision
                would be to the benefit of Conor and a further reduction of its debt.

7.4     The Monitor was provided with a copy of a comprehensive valuation report
        completed by Evans and Evans Inc. which placed the value of the DSI shares
        between $4.7 and $5.1 million USD.

        7.4.1   The Monitor reviewed this report and notes that the valuation does not
                take into account the distress circumstances of the parent company and the
                need for a forced liquidation of its assets, including the sale of the DSI
                shares or its assets. Given the lack of liquidity of each of the Company and
                DSI, the Monitor believes that the status quo is not a viable scenario and
                accordingly, some form of distress transaction is required. The Monitor
                believes that any sale of the shares or assets of DSI will realize
                significantly less than $4.7 million USD.




                                         16
          PRECISION ASSESSMENT TECHNOLOGY CORPORATION, AND
          PRECISION ASSESSMENT TECHNOLOGY (US) CORPORATION

                    MONITOR’S SECOND REPORT TO COURT

                                   SEPTEMBER 2, 2009



    7.5     Given the current state of the United States economy and the low demand for the
            types of services provided by DSI, it is unknown whether or not other potential
            purchasers for the business may exist and what they may be willing to pay.

            7.5.1   It would be a timely and costly procedure to explore and canvas the
                    market for potential purchasers that would not necessarily provide any
                    outcome that is more beneficial to the creditors than the agreement
                    contemplated with JBZ.

            7.5.2   The Monitor understands from Conor, who would be the recipient of the
                    proceeds of this transaction as the secured creditor, it is in support of this
                    transaction.

    7.6     A copy of the Term Sheet between the Company and JBZ is included in the
            Affidavit #4 of Robert Nowack dated September 1, 2009.

8   POST FILING OPERATIONS

    8.1     PATC generates its only income from management fees received from the
            operating subsidiaries in the United States. The income that PATC receives from
            the operating subsidiaries is only intended to cover the current operating costs of
            PATC.

    8.2     PATC’s operating costs post filing consist mainly of professional advisor fees,
            consulting and administration costs and equipment lease payments. PATC does
            not have any direct employees but rather consultants that charge the Company on
            a monthly basis.

            8.2.1   Appendix B includes a weekly consolidated cash flow forecast for the
                    Company and actual results from the start of the CCAA period until
                    August 30, 2009.




                                              17
           PRECISION ASSESSMENT TECHNOLOGY CORPORATION, AND
           PRECISION ASSESSMENT TECHNOLOGY (US) CORPORATION

                     MONITOR’S SECOND REPORT TO COURT

                                   SEPTEMBER 2, 2009



     8.3     Each of the operating subsidiaries of the Company has continued operations with
             business as usual since the CCAA filing.

             8.3.1   The $250,000 debtor in possession financing (“DIP”) that was approved in
                     the July 24, 2009 comeback hearing relating to the DSI division had not
                     been drawn down upon as of the date of this report.

9    ACTIVITIES OF THE MONITOR

     9.1     The Company has cooperated with the Monitor and has made available
             information for the Monitor to review.

     9.2     The Monitor has reviewed up to the July 31, 2009 management financial
             statements for each of the legal entities and also the security documents for each
             of the secured creditors.

     9.3     The Monitor has set-up a web-site at http://www.pwc.com/car-
             precisionassessment at which it is intended that all materials filed by the
             Company or the Monitor in the British Columbia Supreme Court related to the
             filing will be made available to creditors and other interested parties in an
             electronic format.

10   RESTRUCTURING PLAN

     10.1    The Monitor has been working with Company with respect to preparing a
             restructuring plan and plan of arrangement to its creditors in light of the recent
             execution of the two terms sheets. .

     10.2    The Monitor is going to continue to review these developments and report back to
             the court and the creditors as new developments emerge.




                                              18
       PRECISION ASSESSMENT TECHNOLOGY CORPORATION, AND
       PRECISION ASSESSMENT TECHNOLOGY (US) CORPORATION

                    MONITOR’S SECOND REPORT TO COURT

                                   SEPTEMBER 2, 2009



     10.3   The Monitor believes that the continuation of these discussions to be a worthwhile
            activity that could potentially benefit the overall restructuring of the Company
            and its creditors.

11   EXTENSION OF THE STAY

     11.1   The Monitor understands that the Company has requested an extension of the
            CCAA stay of proceedings until October 2, 2009. The Company is planning on
            initiating the claims administration process with each of its creditors prior to
            September 11, 2009.

            11.1.1 The Company is in the final stages of finalizing its reorganization strategy
                   and the plan of arrangement for its creditors. It is anticipated that the final
                   plan will be completed and available for the Court to consider before the
                   next court hearing.

     11.2   The Monitor agrees with the extension request in order to allow the Company to
            finalize the details of each of the proposed asset sale transactions and finalize the
            reorganization plan and plan of arrangement for its creditors.

     11.3   The Monitor is of the view that the Company is acting in good faith and with due
            diligence with respect to proposing a plan of arrangement with its creditors and
            investigating potential transactions that could result in higher realizations for the
            creditors as a whole.




                                              19
                  PRECISION ASSESSMENT TECHNOLOGY CORPORATION, AND
                  PRECISION ASSESSMENT TECHNOLOGY (US) CORPORATION

                                        MONITOR’S SECOND REPORT TO COURT

                                                               SEPTEMBER 2, 2009



This report is respectfully submitted this 2nd day of September 2009.

PricewaterhouseCoopers Inc.
Court Appointed Monitor of
Precision Assessment Technology Corporation and
Precision Assessment Technology (US) Corporation




Michael J. Vermette                                                          Jim M. Crooks
Senior Vice President                                                        Vice President




G:\BRS Power\Precision Assessment - CCAA\Reports\2nd Report\Monitor's Second Report to Court.doc




                                                                                 20
         APPENDIX A


Corporate Organization Structure
             APPENDIX B


Management Prepared Financial Reports of
    PATC, PATC (US), PSI and TSI
                                                                                      Appendix B



                Precision Assessment Technology Corp
                            Balance Sheet
                                       As of July 31, 2009
                                              CAD
                                                                 Jul 2009
ASSETS
 Current Assets
  Bank Accounts
    Comerica Bank CND                                                    3,446.50
    Comerica Bank US                                                     6,708.82
    Exchange on US Cash                                                  3,890.78
    HSBC Bank - Cananda                                                      -9.85
  Total Bank Accounts                                        $         14,036.25
  Other Current Assets
    ACQUISITION COSTS                                                         0.00
      Acquisistion Costs - CHD                                              647.54
      Acquisition Costs - DHD                                            1,343.13
      Acquisition Costs - Spectrum                                       5,681.78
    Total ACQUISITION COSTS                                  $           7,672.45
    DEFERRED CHARGES
      Deferred Charges - Bridge Loan                                  247,944.66
      Deferred Charges - Bridge Loan - Accum Amort                    -247,944.66
      Deferred Charges - Comerica                                     393,609.15
      Deferred Charges - Comerica - Accum Amort                       -265,073.69
    Total DEFERRED CHARGES                                   $        128,535.46
    GST Receivable                                                     55,438.05
    INVESTMENTS
      Investment in 3500764 Canada                                            1.00
      Investment in Conor Lockerbie                                         100.00
      Investment in Conor Offshore                                            1.00
      Investment in Conor Pacific Co                                          1.00
      Investment in CPE US                                                   15.30
      Investment in CPEC                                                      1.00
      Investment in PSI                                              1,250,000.00
      Investment in PSI - FX                                           -14,875.00
      Investment in TAEM/IES                                                  1.00
      Investment in TSI/GPI                                          7,255,795.98
      Investment in TSI/GPI - FX                                       -86,343.97
      Investment in WTI                                                       1.00
    Total INVESTMENTS                                        $       8,404,698.31
    Prepaids / Deposits                                               395,000.00
    Prepaids / Deposits - FX                                            -4,700.50
  Total Other Current Assets                                 $       8,986,643.77
 Total Current Assets                                        $       9,000,680.02
 Fixed Assets
  Computer Hardware
    Depreciation                                                       -13,680.00
    Original Cost                                                      19,987.59
  Total Computer Hardware                                    $           6,307.59
  Computer Software
    Depreciation                                                        -2,840.14
    Original Cost                                                        2,840.14
  Total Computer Software                                    $                0.00




                                                                                     Page 1 of 17
                                                                                    Appendix B



                Precision Assessment Technology Corp
                            Balance Sheet
                                      As of July 31, 2009
                                             CAD
                                                                Jul 2009
   Furniture & Equipment
    Depreciation                                                      -85,942.63
    Original Cost                                                     98,040.12
   Total Furniture & Equipment                              $         12,097.49
   Intangible Patents & Technology
    Original Cost                                                    158,209.00
   Total Intangible Patents & Technology                    $        158,209.00
   Leasehold Improvements
    Depreciation                                                      -75,944.84
    Original Cost                                                    194,743.43
   Total Leasehold Improvements                             $        118,798.59
   Other Rigs
    Depreciation                                                   -1,390,052.86
    Original Cost                                                   4,229,354.09
   Total Other Rigs                                         $       2,839,301.23
   Plant & Machinery
    Depreciation                                                      -89,738.67
    Original Cost                                                     89,738.67
   Total Plant & Machinery                                  $               0.00
   Techology
    Depreciation                                                     -189,887.00
    Original Cost                                                    401,199.12
   Total Techology                                          $        211,312.12
   Vehicles
    Depreciation                                                     -479,407.37
    Original Cost                                                    834,237.29
   Total Vehicles                                           $        354,829.92
 Total Fixed Assets                                         $       3,700,855.94
TOTAL ASSETS                                                $      12,701,535.96
LIABILITIES AND EQUITY
 Liabilities
   Current Liabilities
    Accounts Payable
      Accounts Payable                                               991,347.07
    Total Accounts Payable                                  $        991,347.07
    Other Current Liabilities
      Accrued Liabilities                                            829,016.00
      Accrued Payroll                                                 55,848.00
      Acquisition Liability                                          209,430.00
      COMERICA LOANS
        Comerica Loans Current - FX                                         0.00
      Total COMERICA LOANS                                  $               0.00




                                                                                   Page 2 of 17
                                                                                                       Appendix B



                 Precision Assessment Technology Corp
                             Balance Sheet
                                          As of July 31, 2009
                                                 CAD
                                                                                   Jul 2009
      Income Taxes Payable                                                              576,164.00
      Intercompany Liabilities
          BC2 Sale Settlement                                                          1,968,238.48
          Due to/(from) Conor Lockerbie                                                 -364,500.51
          Due to/(from) Conor Pacific Construction                                      -161,642.20
          Due to/(from) CPC                                                            2,252,397.19
          Due to/(from) CPDI                                                             28,679.66
          Due to/(from) CPE US                                                        -4,431,330.29
          Due to/(from) CPE US - Interest                                             -1,538,955.00
          Due to/(from) CPET (China Project)                                             57,404.37
          Due to/(from) EFW                                                             200,549.71
          Due to/(from) EFW - FX                                                         -20,401.19
          Due to/(from) PATC-US - FX                                                       8,748.42
          Due to/(from) PATC-US/BC2                                                     -735,161.09
          Due to/(from) PSI                                                           -2,173,402.00
          Due to/(from) PSI - FX                                                         30,943.69
          Due to/(from) TSI/GP                                                          569,090.37
          Due to/(from) TSI/GP - FX                                                      19,697.97
      Total Intercompany Liabilities                                       -$          4,289,642.42
    Total Other Current Liabilities                                        -$          2,619,184.42
  Total Current Liabilities                                                -$          1,627,837.35
  Long Term Liabilities
    Bridge Loan                                                                        3,384,213.78
    COMERICA LOANS - LT
      BC2 Term Loan Comerica                                                            648,291.48
      CAPEX Facility - Comerica US                                                     1,082,512.30
      Exchange on Comerica Loans                                                         -35,290.30
    Total COMERICA LOANS - LT                                              $           1,695,513.48
  Total Long Term Liabilities                                              $           5,079,727.26
 Total Liabilities                                                         $           3,451,889.91
 Equity
  Common Shares                                                                         215,361.23
  Contributed Surplus                                                                   709,435.73
  Currency Translation Adj                                                              344,690.88
  Equity Finance Costs                                                                  -617,367.52
  Retained Earnings                                                                    1,018,289.04
  Share Capital                                                                        8,263,011.13
  Warrants Exercised                                                                     50,570.39
  Net Income                                                                            -734,344.83
 Total Equity                                                              $           9,249,646.05
TOTAL LIABILITIES AND EQUITY                                               $          12,701,535.96




                      Monday, Aug 31, 2009 02:07:33 PM PDT GMT-7 - Accrual Basis




                                                                                                      Page 3 of 17
                                                                                             Appendix B



         Precision Assessment Technology Corp
                      Profit & Loss
                                 January - July, 2009
                                 CAD
                                                                         Total
Income
 Management Fees I/C                                                         158,912.00
Total Income                                                    $            158,912.00
Expenses
 Accounting & Tax Expense                                                        5,000.00
 Bank Charges                                                                 15,926.69
 Consulting                                                                   37,500.00
 Legal Fees                                                                   54,179.60
 Office Supplies                                                                  -758.33
Total Expenses                                                  $            111,847.96
Net Operating Income                                            $             47,064.04
Other Expenses
 Acquisition Expense                                                             9,207.00
 Amortization                                                                 45,921.05
 Depreciation                                                                323,196.54
 Gain/Loss on Foreign Currency                                               -16,221.19
 Interest Expense - Bridge Loan - CPC & CVM                                  152,324.06
 Interest Expense - Comerica                                                  60,662.70
 Management Fees - CPC                                                       159,250.00
 Prior Year Withholding Taxes                                                 47,068.71
Total Other Expenses                                            $            781,408.87
Net Other Income                                                -$           781,408.87
Net Income                                                      -$           734,344.83




                Monday, Aug 31, 2009 02:09:39 PM PDT GMT-7 - Accrual Basis




                                                                                            Page 4 of 17
                                                                                               Appendix B



                                      PATC US
                                    Balance Sheet
                                     As of July 31, 2009
                                    USD
                                                                              Total
ASSETS
 Current Assets
   Bank Accounts
    Comerica - PATC US - 0589                                                    1,175.88
   Total Bank Accounts                                                 $         1,175.88
   Other Current Assets
    Deferred Financing - Comerica                                              120,000.00
    Deferred Financing - Comerica Accum Amort                                  -22,499.91
    Deferred Financing Cost                                                     40,000.00
    OTHER INVESTMENTS
      EFW                                                                    1,025,360.40
      Investment in Subsidiaries                                             2,672,809.40
      PSI                                                                    1,194,547.00
    Total OTHER INVESTMENTS                                            $     4,892,716.80
   Total Other Current Assets                                          $     5,030,216.89
 Total Current Assets                                                  $     5,031,392.77
TOTAL ASSETS                                                           $     5,031,392.77
LIABILITIES AND EQUITY
 Liabilities
   Current Liabilities
    Other Current Liabilities
      Accounts Payable & Accrued Liabilities                                    36,415.00
      Bank Indebtedness
          Comerica LOC                                                       1,490,000.00
      Total Bank Indebtedness                                          $     1,490,000.00
      INTERCOMPANY LIABILITIES
          BC2 Sale Settlement                                                -2,200,660.59
          Due To / (From) EFW                                                  371,447.88
          Due To / (From) PATC                                               6,036,794.78
          Due To / (From) PATC BC2/Bison                                       735,161.18
          Due To / (From) PATC Interest                                        974,269.00
          Due To / (From) PATC Loan                                             50,000.00
          Due To / (From) PSI-CA                                             -3,479,866.59
          Due To / (From) TSI/GPI                                            -1,716,461.77
      Total INTERCOMPANY LIABILITIES                                   $       770,683.89
    Total Other Current Liabilities                                    $     2,297,098.89
   Total Current Liabilities                                           $     2,297,098.89
 Total Liabilities                                                     $     2,297,098.89
 Equity
   Common Stock                                                                       10.00
   Contributed Surplus - BC2                                                    61,842.60
   Equity - Bison                                                            8,000,000.00
   Equity Financing Cost - Bison                                             -1,540,792.12
   Opening Balance Equity                                                    -3,763,865.70
   Retained Earnings                                                           -12,067.61
   Net Income                                                                  -10,833.29
 Total Equity                                                          $     2,734,293.88
TOTAL LIABILITIES AND EQUITY                                           $     5,031,392.77




                Monday, Aug 31, 2009 10:52:46 AM PDT GMT-7 - Accrual Basis




                                                                                              Page 5 of 17
                                                                         Appendix B



                         PATC US
                       Profit & Loss
                       January - July, 2009
                         USD
                                                       Total
Income
Total Income
Expenses
Total Expenses
Net Operating Income                             $               0.00
Other Expenses
 Amortization                                            10,833.29
Total Other Expenses                             $       10,833.29
Net Other Income                                 -$      10,833.29
Net Income                                       -$      10,833.29




    Monday, Aug 31, 2009 02:11:22 PM PDT GMT-7 - Accrual Basis




                                                                        Page 6 of 17
                                                                               Appendix B



                         Precision Sampling, Inc.
                              Balance Sheet
                                 As of July 31, 2009
                                USD
                                                           Total
ASSETS
 Current Assets
   Bank Accounts
    Bank of the West - Stockton                                    1,101.73
    Comerica Bank                                              95,352.12
    Paypartners Account                                            5,681.20
    Wells Fargo - Colorado                                          103.13
   Total Bank Accounts                                 $      102,238.18
   Accounts Receivable
    Accounts Receivable                                       946,843.51
    Other Receivable                                           15,657.08
   Total Accounts Receivable                           $      962,500.59
   Other Current Assets
    Deposits / Prepaids
      EP Office Deposit/Rent                                   14,389.50
      Prepaid Insurance                                        71,359.89
      Prepaids                                                 23,817.32
    Total Deposits / Prepaids                          $      109,566.71
    Employee Receivables                                       14,953.06
    Inventory - Materials & Supplies CSCO                      34,678.62
    Inventory-Materials & Supplies STCA                        29,337.65
   Total Other Current Assets                          $      188,536.04
 Total Current Assets                                  $    1,253,274.81
 Fixed Assets
   Machinery & Equipment - Tooling
    Acc Depr - M&E - Tooling                                  -19,591.09
    Original Cost - M&E - Tooling                             112,092.88
   Total Machinery & Equipment - Tooling               $       92,501.79
   Rigs                                                               0.00
    Acc Depr - Rigs                                          -171,611.90
    Original Cost - Rigs                                      477,660.85
   Total Rigs                                          $      306,048.95
   Trucks & Trailers
    Acc Depr - Trucks & Trailers                             -169,779.35
    Original Cost - Trucks & Trailers                         223,316.59
   Total Trucks & Trailers                             $       53,537.24
 Total Fixed Assets                                    $      452,087.98
 Other Assets
   Aquisition Cost - Spectrum                                 312,340.93
 Total Other Assets                                    $      312,340.93
TOTAL ASSETS                                           $    2,017,703.72
LIABILITIES AND EQUITY
 Liabilities
   Current Liabilities
    Accounts Payable
      Accounts Payable                                        703,287.38




                                                                              Page 7 of 17
                                                                                                Appendix B



                           Precision Sampling, Inc.
                                Balance Sheet
                                   As of July 31, 2009
                                  USD
                                                                             Total
    Total Accounts Payable                                        $             703,287.38
    Other Current Liabilities
      Accrued Expenses                                                           22,979.93
      Accrued Liabilities 3003-100                                               45,173.01
      Accrued Vacation/Bonus                                                    103,337.73
      Accrued Wages                                                              27,986.18
      Inter-Company Liabilities
          BC2 Sale Settlement                                                    53,572.73
          Due to Conor Pacific                                                  212,500.00
          Due To DSI                                                           -162,240.04
          Due To PATC - PSI CA                                                1,053,339.20
          Due to PATC - US                                                    3,479,866.59
          Due To PATC Interest                                                  605,578.44
          Due To PATC Management Fees                                           514,484.36
          Due To TSI/GPI                                                       -911,881.83
      Total Inter-Company Liabilities                             $           4,845,219.45
      Sales Tax Payable New Mexico                                               53,865.16
    Total Other Current Liabilities                               $           5,098,561.46
  Total Current Liabilities                                       $           5,801,848.84
 Total Liabilities                                                $           5,801,848.84
 Equity
  Capital Stock                                                                 130,000.00
  Contributed Surplus                                                         1,250,000.00
  Equity Financing                                                              -26,045.00
  Paid-In-Capital                                                                31,000.00
  Retained Earnings                                                           -5,168,687.49
  Net Income                                                                         -412.63
 Total Equity                                                     -$          3,784,145.12
TOTAL LIABILITIES AND EQUITY                                      $           2,017,703.72




                Monday, Aug 31, 2009 10:49:51 AM PDT GMT-7 - Accrual Basis




                                                                                               Page 8 of 17
                                                                                   Appendix B



                            Precision Sampling, Inc.
                                 Profit & Loss
                                   January - July, 2009
                                          USD
                                                              Total
Income
 Sales
   201-CSCO                                                           58,714.25
   202-CSCO                                                           84,419.50
   203-CSCO                                                           90,310.46
   204-CSCO                                                           91,696.25
   206-CSCO                                                       107,698.18
   207-CSCO                                                       510,834.33
   208-CP5-CSCO                                                        8,915.00
   402-CSCO                                                            1,748.50
   405-CSCO                                                       241,815.00
   CME 45-STCA                                                        48,096.50
   CME 75-1-STCA                                                  311,417.66
   CME 85-STCA                                                    203,389.72
   CME75-2-STCA                                                   268,749.50
   CME750X-STCA                                                   188,116.68
   CP3                                                                     0.00
   CP4                                                                     0.00
   DB 540-1-STCA                                                  293,257.00
   EP1                                                                 7,500.00
   LAR II                                                                  0.00
   Services                                                            8,963.75
   Subcontracted Services                                             45,734.41
 Total Sales                                              $     2,571,376.69
Total Income                                              $     2,571,376.69
Cost of Goods Sold
 Direct Expenses
   Bonds - Direct                                                       200.00
   Equipment Rental - Direct                                          54,752.78
   Fuel - Direct                                                      69,261.98
   Insurance - Med/Dent/Life/Vis - Direct                             48,485.39
   Insurance Claims - Direct                                           1,756.47
   Labor - Direct                                                 529,130.04
   Lodging / Per Diem - Direct                                        93,425.21
   Material Wastage - Direct                                           2,310.45
   Materials - Direct                                             158,256.34
   Payroll Admin Fee - Direct                                           632.39
   Payroll Taxes - Direct                                             44,666.51
   Permits - Direct                                                    2,317.53
   Subcontractors - Direct                                            43,028.30
   Subcontractors - I/C - Direct                                       2,300.00
   Supplies & Tools - Direct                                          90,561.40
   Telephone - Direct                                                  2,278.63
   Tolls - Direct                                                        33.79
   Travel - Direct                                                     3,001.80
   Vacation Expense - Direct                                           2,292.59
   Workers Comp - Direct                                              72,818.99
 Total Direct Expenses                                    $     1,221,510.59




                                                                                  Page 9 of 17
                                                                                      Appendix B



                           Precision Sampling, Inc.
                                Profit & Loss
                                     January - July, 2009
                                            USD
                                                                Total
 Indirect Expenses
   Freight - Indirect                                                    6,864.26
   Fuel - Indirect                                                         64.91
   Insurance - Auto - Indirect                                          45,157.58
   Insurance - Med/Dent/Life/Vis - Indirect                              1,618.22
   Labor - Indirect                                                     56,971.67
   Lodging / Per Diem - Indirect                                           91.89
   OSHA/Medical Monitoring - Indirect                                   22,939.72
   Payroll Taxes - Indirect                                              5,335.37
   R&M Equipment - Indirect                                             19,428.81
   R&M Rigs - Indirect                                                  64,917.58
   R&M Tires - Indirect                                                  4,062.89
   R&M Trucks - Indirect                                                13,309.78
   Safety Supplies / Training - Indirect                                 3,997.94
   Telephone - Indirect                                                   120.62
   Travel - Indirect                                                     3,070.17
   Vacation Expense - Indirect                                          -1,900.20
   Vehicle Expense - Indirect                                            1,920.00
   Vehicle Registration - Indirect                                      12,250.04
   Warehouse Supplies - Indirect                                         9,836.18
   Workers Comp - Indirect                                               5,324.32
 Total Indirect Expenses                                    $       275,381.75
Total Cost of Goods Sold                                    $     1,496,892.34
Gross Profit                                                $     1,074,484.35
Expenses
 General & Administrative Exp
   Accounting & Legal Fees - G&A                                         9,929.51
   Bad Debt - G&A                                                          -25.58
   Bank Service Charge - G&A                                             4,740.67
   Bonus - G&A                                                          73,148.00
   Commissions - G&A                                                    14,233.00
   Consulting Fees - G&A                                                16,800.00
   Dues & Subscriptions - G&A                                             768.00
   Employee Benefits - G&A                                               3,158.48
   Employee Meetings - G&A                                                480.68
   Entertainment Meals                                                    552.92
   Fuel - G&A                                                             345.18
   Insurance - Broker Fee - G&A                                          2,854.30
   Insurance - Director & Officers - G&A                                12,321.04
   Insurance - Liability & Property - G&A                               42,362.61
   Insurance - Med/Dent/Life/Vis - G&A                                  38,108.95
   Insurance - Umbrella - G&A                                           33,487.29
   IT Expense - G&A                                                     11,942.01
   Janitorial / Cleaning Service - G&A                                   2,134.69
   Licenses - G&A                                                        4,630.05
   Lodging / Per Diem - G&A                                                  0.00
   Marketing - G&A                                                       6,939.19
   Office Salaries - G&A                                            233,608.05
   Office Supplies & Equipment - G&A                                     8,419.97
   Payroll Admin Fee - G&A                                               3,388.34
   Payroll Taxes - G&A                                                  21,349.29
   Postage & Shipping - G&A                                              3,241.61
   Printing - G&A                                                         100.00
   R&M Building - G&A                                                    2,037.22




                                                                                    Page 10 of 17
                                                                                                     Appendix B



                          Precision Sampling, Inc.
                               Profit & Loss
                                   January - July, 2009
                                          USD
                                                                               Total
   Rent - Office - G&A                                                                 91,017.25
   Security / Alarm System - G&A                                                        1,326.00
   Taxes - Personal Property - G&A                                                      5,116.16
   Taxes - Real Estate - G&A                                                             507.26
   Taxes - Sales & Use - G&A                                                             621.21
   Telephone - G&A                                                                     16,050.05
   Tolls - G&A                                                                           292.50
   Travel - G&A                                                                        18,657.10
   Utilities - G&A                                                                      8,191.94
   Vacation Expense - G&A                                                              -2,811.89
   Vehicle Expense - G&A                                                                1,419.61
   Workers Comp G&A                                                                     2,350.54
 Total General & Administrative Exp                                $               693,793.20
 Z Corporate Expenses                                                              -99,948.64
Total Expenses                                                     $               593,844.56
Net Operating Income                                               $               480,639.79
Other Expenses
 Depreciation - M&E                                                                    30,760.00
 Depreciation - Trucks                                                                 11,459.00
 Interest Expense                                                                      13,820.78
 PATC LP No 1 Lease Expense                                                        200,200.00
 PATC Management Fees                                                              124,864.00
 ZZ Corporate Expenses                                                                 99,948.64
Total Other Expenses                                               $               481,052.42
Net Other Income                                                   -$              481,052.42
Net Income                                                         -$                    412.63




                  Monday, Aug 31, 2009 02:12:20 PM PDT GMT-7 - Accrual Basis




                                                                                                   Page 11 of 17
                                                                                      Appendix B



   Trenchless Specialties, Inc. d/b/a Groundwater Protection
                        Balance Sheet
                                             As of July 31, 2009
                                                    USD
                                                                       Total
ASSETS
 Current Assets
  Bank Accounts
    Bank of America - TSI GPI Operating                                         47,561.62
    Colonial Bank                                                                2,417.72
    PayPartners - Per Diem                                                       7,957.38
    Petty Cash - Per Diem                                                         574.87
  Total Bank Accounts                                              $            58,511.59
  Accounts Receivable
    Accounts Receivable                                                   1,283,395.68
    Accrued Sales                                                               92,889.20
  Total Accounts Receivable                                        $      1,376,284.88
  Other Current Assets
    Deposits / Prepaids
      Deposits - Refundable                                                      8,594.00
      Prepaid Expense                                                           56,510.95
      Prepaid Insurance                                                        -53,011.18
      Prepaid Medical Insurance                                                  2,000.00
    Total Deposits / Prepaids                                      $            14,093.77
    Inventory - Materials & Supplies                                                 0.00
      Inventory - DSD                                                            1,614.94
      Inventory - GPI                                                           56,032.55
      Inventory - TSI                                                           52,454.79
    Total Inventory - Materials & Supplies                         $           110,102.28
  Total Other Current Assets                                       $           124,196.05
 Total Current Assets                                              $      1,558,992.52
 Fixed Assets
  Downhole Bits & Tooling
    Accum Depr - DBT                                                     -1,771,172.07
    Original Cost - DBT                                                   1,837,275.98
  Total Downhole Bits & Tooling                                    $            66,103.91
  Furniture & Fixtures
    Accum Depr - FF&E                                                           -5,162.74
    Original Cost - FF&E                                                         8,002.24
  Total Furniture & Fixtures                                       $             2,839.50
  Leasehold Improvements
    Accum Depr - Leasehold Improvements                                         -4,555.87
    Original Cost - Leasehold Improvements                                      13,963.13
  Total Leasehold Improvements                                     $             9,407.26
  Machinery & Equipment
    Accum Depr - M&E                                                       -170,125.31
    Original Cost - M&E                                                   1,169,908.63
  Total Machinery & Equipment                                      $           999,783.32




                                                                                    Page 12 of 17
                                                                                  Appendix B



   Trenchless Specialties, Inc. d/b/a Groundwater Protection
                        Balance Sheet
                                         As of July 31, 2009
                                                USD
                                                                   Total
   Support Equipment
    Accum Depr - Support Equipment                                     -118,368.50
    Original Cost - Support Equipment                                      169,386.95
   Total Support Equipment                                     $            51,018.45
   Trucks & Trailers
    Accum Depr - Trucks & Trailers                                     -132,998.22
    Original Cost - Trucks & Trailers                                      630,514.02
   Total Trucks & Trailers                                     $           497,515.80
 Total Fixed Assets                                            $      1,626,668.24
 Other Assets
   Deferred Tax Asset - FITA                                           -216,961.00
    Deferred Tax Asset Allowance                                           216,961.00
   Total Deferred Tax Asset - FITA                             $                 0.00
   Goodwill                                                           2,008,526.04
   INTANGIBLES
    Below Market Lease                                                     380,000.00
      Accum Amortization - Below Market Lease                          -145,666.82
    Total Below Market Lease                                   $           234,333.18
    Customer List                                                          500,000.00
      Accum Amortization - Customer List                               -273,809.48
    Total Customer List                                        $           226,190.52
    Non-Compete                                                            310,000.00
      Accum Amortization - Non Compete                                 -310,000.00
    Total Non-Compete                                          $                 0.00
   Total INTANGIBLES                                           $           460,523.70
 Total Other Assets                                            $      2,469,049.74
TOTAL ASSETS                                                   $      5,654,710.50
LIABILITIES AND EQUITY
 Liabilities
   Current Liabilities
    Accounts Payable
      Accounts Payable                                                     615,638.39
    Total Accounts Payable                                     $           615,638.39




                                                                                Page 13 of 17
                                                                                                      Appendix B



   Trenchless Specialties, Inc. d/b/a Groundwater Protection
                        Balance Sheet
                                             As of July 31, 2009
                                                    USD
                                                                                       Total
    Other Current Liabilities
      Accrued Expenses                                                                          18,583.55
      Accrued Taxes                                                                             30,824.36
      Accrued Vacation                                                                          53,111.39
      Accrued Wages                                                                             98,011.77
      Inter-Company Liabilities
          Due To / (From) Conor                                                                -11,000.00
          Due To / (From) Direct Sensing                                                        38,736.59
          Due To / (From) PATC                                                                  -2,470.46
          Due To / (From) PSI CSCO DSI Expense                                                  -1,298.71
          Due To / (From) PSI Expenses                                                          -6,865.17
          Due To / (From) PSI Fixed Assets                                                     114,833.00
          Due To / (From) PSI STCA DSI Expenses                                                142,674.60
      Total Inter-Company Liabilities                                            $             274,609.85
      Long Term Debt - Current
          QI Exchange #133                                                                       3,866.46
          QI Exchange #145                                                                       3,866.46
      Total Long Term Debt - Current                                             $               7,732.92
    Total Other Current Liabilities                                              $             482,873.84
  Total Current Liabilities                                                      $        1,098,512.23
  Long Term Liabilities
    Long Term Debt - LT
      Due to PSI                                                                               730,593.00
      LT QI #133                                                                                 5,090.55
      LT QI #145                                                                                 5,090.55
    Total Long Term Debt - LT                                                    $             740,774.10
  Total Long Term Liabilities                                                    $             740,774.10
 Total Liabilities                                                               $        1,839,286.33
 Equity
  Capital Stock                                                                                      3.00
  Contributed Surplus                                                                     6,736,398.96
  Retained Earnings                                                                      -2,364,005.44
  Net Income                                                                               -556,972.35
 Total Equity                                                                    $        3,815,424.17
TOTAL LIABILITIES AND EQUITY                                                     $        5,654,710.50




                          Monday, Aug 31, 2009 11:33:13 AM PDT GMT-7 - Accrual Basis




                                                                                                    Page 14 of 17
                                                                                                                                Appendix B




                     Trenchless Specialties, Inc. d/b/a Groundwater Protection
                                           Profit & Loss
                                               January - July, 2009
                                                      USD
                                                              DSD              GPI              TSI            TOTAL
Income
 Sales                                                                                                                0.00
   American Augers DD6                                                                         383,225.00       383,225.00
   CME50                                                                                       320,564.48       320,564.48
   CP2 FL                                                      64,517.00         3,175.00                        67,692.00
   CP3 CA                                                     161,872.72                                        161,872.72
   CP4 6625 CA                                                132,390.88                                        132,390.88
   CP5 6625 FL                                                 15,342.00                                         15,342.00
   DA3                                                                           5,060.00                         5,060.00
   Diedrich D120A                                                             183,379.01                        183,379.01
   Diedrich D120B                                                             310,927.46                        310,927.46
   Diedrich D50A                                                               37,482.75                         37,482.75
   Diedrich D50B                                                               82,874.62                         82,874.62
   Geoprobe 6610                                               86,287.62                                         86,287.62
   Geoprobe 6620A                                                             204,849.15                        204,849.15
   Geoprobe 6620B                                                             161,755.00                        161,755.00
   Geoprobe 7720                                                 805.00       208,073.56                        208,878.56
   Geoprobe DT66                                               15,000.00       43,615.34                         58,615.34
   GP1                                                         22,330.00                                         22,330.00
   P-1 MIP CA                                                  21,480.00                                         21,480.00
   P-2 MIP FL                                                  63,982.00                                         63,982.00
   P-4 MIP FL                                                  16,110.00              0.00                       16,110.00
   SR1                                                                        193,739.62                        193,739.62
   SR2                                                                        255,930.74                        255,930.74
   Subcontractors                                              67,338.00       21,616.00                         88,954.00
   Tech Work                                                                   12,825.64                         12,825.64
   UV1                                                          9,805.70                                          9,805.70
   Vermeer 7x11 Series 2                                                                       161,046.39       161,046.39
   Vermeer D24x40                                                                              241,305.25       241,305.25
   VL1                                                          1,650.00                                          1,650.00
 Total Sales                                              $   678,910.92 $   1,725,303.89 $   1,106,141.12 $   3,510,355.93
Total Income                                              $   678,910.92 $   1,725,303.89 $   1,106,141.12 $   3,510,355.93
Cost of Goods Sold
 Direct Expenses                                                                                                      0.00
   Bonds - Direct                                                200.00                          1,010.00         1,210.00
   Employee Benefits - Direct                                    992.65          1,732.81        3,285.56         6,011.02
   Equipment Rental - Direct                                    4,477.04         9,787.51        9,631.64        23,896.19
   Equipment Rental - Inter-Company - Direct                   -1,700.00                                          -1,700.00
   Field Supplies & Tools - Direct                             88,585.62       42,377.63        25,056.35       156,019.60
   Freight - Direct                                             5,837.96          159.92                          5,997.88
   Fuel - Direct                                               20,957.40       47,083.61        36,054.94       104,095.95
   Insurance - Med/Dent/Life/Vis - Direct                      12,333.70       41,396.97        25,305.91        79,036.58
   Insurance - Medical Claims                                      87.94         5,330.44          805.14         6,223.52
   Insurance - W/C - Direct                                    10,715.96       37,550.75        16,062.43        64,329.14
   Insurance Claims - Direct                                                                       745.50           745.50
   Labor - Direct                                             172,546.30      403,075.84       230,103.58       805,725.72
   Lodging / Per Diem - Direct                                 63,127.33       69,971.59        15,018.31       148,117.23
   Materials - Direct                                          19,021.68      322,380.88       250,200.50       591,603.06
   Payroll Admin Fee - Direct                                   1,186.28         4,174.67        2,412.23         7,773.18
   Payroll Taxes - Direct                                      15,502.00       35,351.70        19,603.67        70,457.37
   Permits - Direct                                             4,391.90       27,786.08                         32,177.98
   Subcontractors - Direct                                     53,171.66       10,200.00        32,003.75        95,375.41
   Subs - InterCompany - Direct                                 4,126.29        -3,725.00                           401.29
   Telephone - Direct                                           3,017.78         4,100.73        3,520.09        10,638.60
   Tolls - Direct                                                678.24          3,276.86        2,508.28         6,463.38
   Travel - Direct                                              5,282.40             17.00                        5,299.40
   Vacation Expense - Direct                                       58.92        -7,503.87        -7,640.59       -15,085.54
 Total Direct Expenses                                    $   484,599.05 $   1,054,526.12 $    665,687.29 $    2,204,812.46




                                                                                                                              Page 15 of 17
                                                                                                                             Appendix B




                     Trenchless Specialties, Inc. d/b/a Groundwater Protection
                                           Profit & Loss
                                              January - July, 2009
                                                     USD
                                                             DSD              GPI            TSI            TOTAL
 Indirect Expenses                                                                                                 0.00
   Employee Benefits - Indirect                                                 1,166.67        960.00         2,126.67
   Employee Meetings - Indirect                                 209.62               9.69          31.18         250.49
   Fines & Penalties - Indirect                                 322.00           170.00                          492.00
   Freight - Indirect                                                           3,244.95                       3,244.95
   Fuel - Indirect                                             2,098.37         6,171.10       4,043.18       12,312.65
   Insurance - Auto - Indirect                                 3,009.00       35,932.46       21,244.78       60,186.24
   Insurance - Equipment - Indirec                              938.58          2,906.53       1,945.43        5,790.54
   Insurance - Med/Dent/Life/Vis - Indirect                    3,824.59       10,990.23        6,726.04       21,540.86
   Insurance - Medical Claims                                     17.25             34.50          17.24          68.99
   Insurance - W/C - Indirect                                  1,450.65         3,615.24       1,587.56        6,653.45
   Labor - Indirect                                           43,767.80       98,005.44       52,202.94      193,976.18
   Lodging / Per Diem - Indirect                                                                   49.05          49.05
   Medical Expense / Monitoring - Indirect                     1,814.00          768.20         676.00         3,258.20
   Payroll Admin Fee - Indirect                                 203.24           641.38         375.73         1,220.35
   Payroll Taxes - Indirect                                    3,521.93         8,425.94       4,379.35       16,327.22
   R&M Equipment - Indirect                                   20,531.62         4,782.34      16,134.27       41,448.23
   R&M Rigs - Indirect                                         8,558.02       48,649.19       43,100.21      100,307.42
   R&M Tires - Indirect                                        2,703.34         8,696.82       6,602.87       18,003.03
   R&M Trucks - Indirect                                      14,166.93       27,618.39       15,749.60       57,534.92
   Safety Supplies / Training - Indirect                       1,996.23         3,650.09        226.52         5,872.84
   Telephone - Indirect                                        1,590.53         1,192.50        833.19         3,616.22
   Tolls - Indirect                                                  2.00        256.75         496.67           755.42
   Training & Education - Indirect                            23,259.28                                       23,259.28
   Travel - Indirect                                           1,120.80                                        1,120.80
   Uniforms - Indirect                                         1,850.37         3,217.84       1,755.19        6,823.40
   Vacation Expense - Indirect                                 2,350.26          -746.78        -679.93          923.55
   Vehicle GPS Unit Rental - Indirect                           293.95        10,386.00        2,816.52       13,496.47
   Vehicle Registration - Indirect                             3,522.95         4,835.70       3,352.35       11,711.00
   Warehouse Supplies - Indirect                                307.57          2,763.84       1,297.17        4,368.58
 Total Indirect Expenses                                 $   143,430.88 $    287,385.01 $    185,923.11 $    616,739.00
Total Cost of Goods Sold                                 $   628,029.93 $   1,341,911.13 $   851,610.40 $   2,821,551.46
Gross Profit                                             $    50,880.99 $    383,392.76 $    254,530.72 $    688,804.47
Expenses
 General & Administrative Exp                                                                                      0.00
   Accounting & Legal Fees                                      112.50           674.90        1,427.50        2,214.90
   Advertising                                                                  4,196.01       2,817.51        7,013.52
   Bank Service Charge                                         1,357.15         1,767.20        676.61         3,800.96
   Dues / Subscriptions / Referenc                              523.95           375.00         175.00         1,073.95
   Employee Benefits G&A                                        191.29          2,364.05       3,007.86        5,563.20
   Employee Meetings G&A                                        676.88           672.40         537.59         1,886.87
   FUEL G&A                                                    1,358.27         5,467.85       4,896.85       11,722.97
   Hiring / Moving Expense                                        65.00                                           65.00
   Insurance - Broker Fee - G&A                                 109.62          1,217.91        760.33         2,087.86
   Insurance - Liability & Property                            1,956.87       15,156.62        9,614.39       26,727.88
   Insurance - Med/Dent/Life/Vis - G&A                        11,944.42       14,649.19        8,763.69       35,357.30
   Insurance - Medical Claims                                                    114.76                          114.76
   Insurance - Umbrella - G&A                                  2,290.75       24,377.22       15,240.36       41,908.33
   Insurance - W/C - G&A                                        387.70           954.14         983.86         2,325.70
   IT / Computer Expense - G&A                                 3,891.66         2,015.17        912.99         6,819.82
   Janitorial / Cleaning Service                                483.17          1,450.46        876.45         2,810.08
   Lease - Office Equipment                                     269.07           979.71         552.61         1,801.39
   Licenses                                                    1,108.85          500.35         529.25         2,138.45
   Lodging G&A                                                 8,612.57         3,827.87       3,129.13       15,569.57
   Marketing                                                    911.22          6,231.83       1,293.27        8,436.32
   Office Salaries                                           117,024.90      124,947.92      100,731.81      342,704.63
   Office Supplies & Equipment                                 2,544.44         5,092.68       2,412.08       10,049.20
   Payroll Admin Fee G&A                                        527.38           881.25         589.13         1,997.76




                                                                                                                           Page 16 of 17
                                                                                                                                         Appendix B




                   Trenchless Specialties, Inc. d/b/a Groundwater Protection
                                         Profit & Loss
                                                      January - July, 2009
                                                             USD
                                                                         DSD              GPI             TSI             TOTAL
   Payroll Taxes G&A                                                       9,168.56        11,495.11        8,203.40       28,867.07
   Penalties                                                                 142.50          523.00          284.50          950.00
   Postage / Shipping / Freight                                           10,397.94         1,698.55        1,834.03       13,930.52
   R&M Building                                                            1,002.43         3,535.47        2,084.31        6,622.21
   Rent - Office                                                          30,147.42        56,390.00       33,128.75      119,666.17
   Security / Alarm System                                                    97.25          320.75          197.00          615.00
   Taxes - Personal Property                                               2,186.93         7,939.99        4,003.63       14,130.55
   Taxes - Real Estate                                                     2,583.63         8,903.35        5,206.83       16,693.81
   Telephone G&A                                                           6,548.33         5,120.74        3,672.13       15,341.20
   Tolls/Parking G&A                                                       1,231.20          793.03          810.61         2,834.84
   Travel - G&A                                                           14,907.33         1,184.63                       16,091.96
   Utilities                                                               2,535.40         6,530.04        3,782.74       12,848.18
   Vacation Expense - G&A                                                  5,009.11          -920.75       -3,459.12         629.24
   Vehicle Expense                                                         2,800.00         4,550.00        7,000.00       14,350.00
 Total General & Administrative Exp                                 $    245,105.69 $     325,978.40 $    226,677.08 $    797,761.17
Total Expenses                                                      $    245,105.69 $     325,978.40 $    226,677.08 $    797,761.17
Net Operating Income                                                -$   194,224.70 $      57,414.36 $     27,853.64 -$   108,956.70
Other Expenses
 Amortization - Below Market Lease                                                                         22,166.69       22,166.69
 Amortization - Customer List                                                                              41,666.66       41,666.66
 Depreciation - Downhole Bits & Tooling                                    2,838.48        20,891.91       21,632.68       45,363.07
 Depreciation - FF&E                                                         581.35          264.19          264.20         1,109.74
 Depreciation - Leasehold Improvement                                        261.97          261.95          261.95          785.87
 Depreciation - Machinery & Equipment                                     23,769.00        38,008.61        7,401.70       69,179.31
 Depreciation - Support Equipment                                          6,210.19        11,921.84        7,761.47       25,893.50
 Depreciation - Trucks & Trailers                                          9,836.20        26,981.63       17,517.39       54,335.22
 Interest - Comerica LOC Operating                                         3,319.87        10,307.42        6,007.69       19,634.98
 Interest Expense                                                         28,500.00         1,125.11        1,125.11       30,750.22
 PATC Management Fee                                                      24,498.94        72,172.53       42,376.53      139,048.00
 Profit Sharing                                                                            -1,917.61                       -1,917.61
Total Other Expenses                                                $     99,816.00 $     180,017.58 $    168,182.07 $    448,015.65
Net Other Income                                                    -$    99,816.00 -$    180,017.58 -$   168,182.07 -$   448,015.65
Net Income                                                          -$   294,040.70 -$    122,603.22 -$   140,328.43 -$   556,972.35




                                      Monday, Aug 31, 2009 02:14:07 PM PDT GMT-7 - Accrual Basis




                                                                                                                                       Page 17 of 17
           APPENDIX C


Cash Flow Forecast and Actual Results
                                                                                                                                                                                                       Appendix C

CASH FLOW SUMMARY
PATC Canada & PATC USA

FORECAST                                  27-Jun-09     4-Jul-09    11-Jul-09   18-Jul-09   25-Jul-09    1-Aug-09    8-Aug-09    15-Aug-09   22-Aug-09   29-Aug-09    6-Sep-09   13-Sep-09 20-Sep-09 27-Sep-09    4-Oct-09

Beg Cash Balance                                 -          1,750       1,750       1,750       1,750       3,500       3,500        3,500       3,500       3,500       5,250      5,250      5,250    5,250        4,000

Add:
Customer Receipts                                -            -           -           -           -            -           -           -           -           -           -          -          -         -            -

Receipts from Subsidiaries                   68,000                                            68,000                                                       68,000                                     50,000

Comerica Interest                            (15,000)                                         (15,000)                                                     (15,000)                                        -

Payment to PATC no.1 LP                      (11,250)                                         (11,250)                                                     (11,250)                                    (11,250)

Payment for CFO/COO and Controller           (40,000)         -           -           -       (40,000)         -           -           -           -       (40,000)        -          -          -     (40,000)         -


Per Diem                                         -            -           -           -           -            -           -           -           -           -           -          -          -         -            -

Operating Cash Flow before Capex - Wkly        1,750          -           -           -         1,750         -           -            -           -         1,750         -          -          -      (1,250)        -
Cumulative Operating Cash Flow                 1,750        1,750       1,750       1,750       3,500       3,500       3,500        3,500       3,500       5,250       5,250      5,250      5,250     4,000       4,000

Less:
Capex

Operating Cash Flow after Capex                1,750          -           -           -         1,750          -           -           -           -         1,750         -          -          -      (1,250)        -
Cumulative Operating Cash Flow                 1,750        1,750       1,750       1,750       3,500        3,500       3,500       3,500       3,500       5,250       5,250      5,250      5,250     4,000       4,000

Ending Cash Balance                            1,750        1,750       1,750       1,750       3,500        3,500       3,500       3,500       3,500       5,250       5,250      5,250      5,250    4,000        4,000




ACTUALS                                   27-Jun-09     4-Jul-09    11-Jul-09   18-Jul-09   25-Jul-09    1-Aug-09    8-Aug-09    15-Aug-09   22-Aug-09   29-Aug-09    6-Sep-09   13-Sep-09 20-Sep-09 27-Sep-09    4-Oct-09

Beg Cash Balance                                 -            250         250         250         250         225         225          225         225         225          13         13        13        13           13

Add:
Customer Receipts                                -            -           -           -           -            -           -           -           -           -           -          -          -         -            -

Receipts from Subsidiaries                   44,000                                            74,000                                                       92,000                                         -

Comerica Interest                            (15,000)                                          (2,825)                                                     (21,012)                                        -

Payment to PATC no.1 LP                      (11,250)                                         (31,200)                                                     (31,200)                                        -

Payment for CFO/COO and Controller           (17,500)         -           -           -       (40,000)         -           -           -           -       (40,000)        -          -          -         -            -


Per Diem                                         -            -           -           -           -            -           -           -           -           -           -          -          -         -            -

Operating Cash Flow before Capex - Wkly         250           -           -           -           (25)        -           -            -           -          (212)        -          -          -         -            -
Cumulative Operating Cash Flow                  250           250         250         250         225         225         225          225         225          13          13         13         13        13           13

Less:
Capex

Operating Cash Flow after Capex                 250           -           -           -           (25)        -           -            -           -          (212)        -          -          -         -            -
Cumulative Operating Cash Flow                  250           250         250         250         225         225         225          225         225          13          13         13         13        13           13

Ending Cash Balance                             250           250         250         250         225         225         225          225         225          13          13         13        13        13           13

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