In re: FRED’S, INC., et al.

REQUIRED DOCUMENTS

Schedule of Cash Receipts and Disbursements

Bank Reconciliation (or copies of debtor’s bank reconciliations)

Schedule of Professional Fees Paid

Copies of bank statements

Cash disbursements journals

Statement of Operations

Balance Sheet

Status of Postpetition Taxes

Copies of IRS Form 6123 or payment receipt

Copies of tax returns filed during reporting period

Summary of Unpaid Postpetition Debts

Listing of aged accounts payable

Accounts Receivable Reconciliation and Aging

Debtor Questionnaire

Signature of Debtor

Date

Signature of Joint Debtor

Date

/s/ Mark Renzi

2/4/2020

Mark Renzi

Chief Restructuring Officer

Authorized individual must be an officer, director or shareholder if debtor is a corporation; a partner if debtor is a partnership; a manager or member if debtor is a limited liability company.

($ in 000’s)
Cash Flow Summary

Receipts

FS Collections

Rx Collections ⁽¹⁾

Asset Sales

Other Collections

Total Cash Receipts

Disbursements

FS Merchandise

RX Merchandise

Payroll and Other Employee Obligations

Rent

Sales Tax

Utilities

Other Operating Disbursements

Third Party Rx Reimbursement

Other Non-Operating Disbursements

Total Cash Disbursements

Net Cash Flow ⁽²⁾

The Company collected pharmacy proceeds on behalf 3rd party buyers for sold pharmacies during this period; generally a one week delay from collecting to disbursing those proceeds.

The Company was operating under cash collateral over the cumulative period and cash was used to pay down the DIP loan.

For period from December 1, 2019 to January 4, 2020

Legal Entity

Fred’s, Inc.

Fred’s Stores of Tennessee, Inc.

505 N. Main Opp, LLC

National Equipment Management and Leasing, Inc.

National Pharmaceutical Network, Inc.

Summit Properties – Bridgeport, LLC

Summit Properties – Jacksboro, LLC

Reeves-Sain Drug Store, Inc.

Fred’s, Inc.

Regions Bank

Pharmacy Lockbox

Fred’s, Inc.

Regions Bank

Payroll

Fred’s, Inc.

Regions Bank

Master

Fred’s, Inc.

Regions Bank

Master Funding

Fred’s, Inc.

Regions Bank

Controlled Disbursement

Fred’s, Inc.

Regions Bank

Alcohol

Fred’s, Inc.

Regions Bank

Sales Tax

Fred’s, Inc.

Regions Bank

Import Customs

Fred’s, Inc.

Regions Bank

TN Lottery

Fred’s, Inc.

Regions Bank

AR Lottery

Fred’s, Inc.

Regions Bank

GA Lottery

Fred’s, Inc.

Regions Bank

TX Lottery

Fred’s, Inc.

Regions Bank

FL Lottery

Fred’s, Inc.

Regions Bank

KY Lottery

Fred’s, Inc.

Regions Bank

MO Lottery

Fred’s, Inc.

Regions Bank

NC Education Lottery

Fred’s, Inc.

Bank of America

Import Letters of Credit

Fred’s, Inc.

Bank of America

EDI

Fred’s, Inc.

MetaBank

Payroll Pay Cards

Fred’s, Inc.

Regions Bank

Pharmacy Escrow Acct

Fred’s, Inc.

Regions Bank

Stub Rent Escrow Acct

Fred’s, Inc.

Regions Bank

Utility Escrow Acct

Fred’s, Inc.

Regions Bank

Asset Disposition

Fred’s Stores of Tennessee, Inc.

Colony Bank

Store Operating

Fred’s Stores of Tennessee, Inc.

BB&T

Store Operating

Fred’s Stores of Tennessee, Inc.

Concordia Bank

Store Operating

Fred’s Stores of Tennessee, Inc.

Extraco Bank

Store Operating

Fred’s Stores of Tennessee, Inc.

First Guaranty Bank

Store Operating

Fred’s Stores of Tennessee, Inc.

First Guaranty Bank

Store Operating

Fred’s Stores of Tennessee, Inc.

First Guaranty Bank

Store Operating

Fred’s Stores of Tennessee, Inc.

First Security Bank

Store Operating

Fred’s Stores of Tennessee, Inc.

Mount Vernon Bank

Store Operating

Fred’s Stores of Tennessee, Inc.

Tippins Bank & Trust Co

Store Operating

Fred’s Stores of Tennessee, Inc.

Valley National Bank

Store Operating

For period from December 1, 2019 to January 4, 2020

Retained Professionals

Role

Morris, Nichols, Arsht & Tunnell LLP

Akin Gump Strauss

Kasowitz Benson Torres LLP

Berkeley Research Group

Epiq Corporate Restructuring LLC

Alarez & Marsal LLC

Lowenstein Sandler LLP

Womble Bond Dickinson

Total

Net sales ⁽¹⁾

Cost of goods sold ⁽²⁾

Gross profit

Depreciation and amortization

Selling, general and administrative expenses

Operating income (loss)

Gain (loss) from disposal of assets/liabilities

Interest expense (income)

Income (loss) before income taxes

Provision (benefit) for income taxes

Net income (loss) from continuing operations

Net income (loss) from discontinued operations

Net income (loss)

Includes adjustments for prior period pharmacy sales based on prescription price corrections

Includes DIR fees charged for pharmacy transactions; fees generally charged 90 days post-transaction

ASSETS

Current assets:

Cash and cash equivalents ⁽¹⁾

Inventories

Receivables, less allowance for doubtful accounts of $1,974

Other non-trade receivables

Prepaid expenses and other current assets

Total current assets

Property and equipment, less accumulated depreciation and amortization

Goodwill

Intangible assets, net

Other noncurrent assets, net

Total assets

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities:

Accounts payable

Current portion of indebtedness

Accrued expenses and other

Total current liabilities

Long-term portion of indebtedness

Other noncurrent liabilities

Total liabilities

Shareholders’ equity:

Preferred stock, nonvoting, no par value

Preferred stock, Series A junior participating nonvoting, no par value

Preferred stock, Series C junior participating voting, no par value

Common stock, Class A voting, no par value

Common stock, Class B nonvoting, no par value

Treasury Stock, at cost

Retained earnings

Accumulated other comprehensive income

Total shareholders’ equity

Total liabilities and shareholders’ equity

Cash includes pharmacy proceeds the Company collected on behalf of 3rd party buyers for sold pharmacies that had not been disbursed as of 1/4/20; the Company generally holds 1-2 weeks of 3rd party pharmacy proceeds before disbursing funds.

Current

0 - 30 Days Old

31 - 60 Days Old

61 - 90 Days Old

91+ Days Old

Total Post-Petition Debts

Current

0 - 30 Days Old

31 - 60 Days Old

61 - 90 Days Old

91+ Days Old

Total Trade Receivable

1. Have any assets been sold or transferred outside the normal course of business this reporting period? If yes, provide an explanation below.

During this period, the debtors liquidated FF&E for amounts below normal course pricing. The Dublin DC and owned stores were also sold to third-party buyers.

Account Name