Cut bread into cubes. Place half of bread cubes into greased 9x13 baking dish. Microwave the cream cheese until melted, stirring midway. Stir 1/4 c. of the sugar and the extract into the melted cream cheese. Pour this mixture over the bread cubes (will not completely cover the bread)Sprinkle nuts over the cream cheese layer. Top with remaining bread cubes.
In a bowl, beat the remaining sugar, eggs, milk, cinnamon and melted butter together. Pour over bread cubes.
Freeze at this point or let sit in refrigerator overnight.
Bake at 350 deg. F for 35 minutes. Serve with warm syrup or fruit toppings.