Digital Systems, Inc. - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - September 29, 2011

Attached files

file filename
8-K - DIGITAL SYSTEMS, INC. 8-K - Digital Systems, Inc.digitalsystems8k.htm
 
Exhibit 99.1
 
 
 
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF KANSAS
KANSAS CITY DIVISION


IN RE:                                                                )
                                                                           )           Case No.  11-20140-11-rdb
DIGITAL SYSTEMS, INC.                             )           Chapter 11
                                Debtor.                              )
________________________________)


DEBTOR'S STANDARD MONTHLY OPERATING REPORT (BUSINESS)
FOR THE PERIOD
FROM August 1, 2011  TO August 31, 2011

Comes now the above-named debtor and files its Monthly Operating Reports in accordance with the Guidelines established by the United States Trustee and FRBP 2015.



 /s/ Joanne B. Stutz                         
Attorney for Debtor’s Signature


Debtor's Address
Attorney's Address
and Phone Number:
and Phone Number:

15621 W. 87th Street, Box 355
Lenexa, KS  66219
7225 Renner Road, Suite 200
Shawnee, KS  66217
(913) 962-8700; (913) 962-8701 (FAX)

Note: The original Monthly Operating Report is to be filed with the court and a copy simultaneously provided to the United States Trustee Office.  Monthly Operating Reports must be filed by the 21st day of the following month.

For assistance in preparing the Monthly Operating Report, refer to the following resources on the United States Trustee Program Website, http://www.justice.gov/ust/r20/index.htm.
1)  
Instructions for Preparations of Debtor’s Chapter 11 Monthly Operating Report
2)  
Initial Filing Requirements
3)  
Frequently Asked Questions (FAQs)http://www.usdoj.gov/ust/
 
 
 
 
 
 
 
MOR-1
 
 
 
SCHEDULE OF RECEIPTS AND DISBURSEMENTS
FOR THE PERIOD BEGINNING August 1, 2011 and ending August 31, 2011
Name of Debtor: Digital Systems, Inc.                                                                     Case Number:  11-20140-11-rdb
Date of Petition: January 21, 2011
       
Current
      
Cumulative
    
       
Month
      
to Petition Date
    
                     
1. FUNDS AT BEGINNING OF PERIOD
   $ 205,107.49  
(a)
   $ 24,201.83  
(b)
2. RECEIPTS:
                    
   
A. Cash Sales
               -    
   
     Minus:  Cash Refunds
               -    
   
     Net Cash Sales
               -    
   
B.  Accounts Receivable
               202,714.26    
   
C.  Other Receipts (See MOR-3)
               762,859.56    
   
(If you receive rental income,
               -    
   
    you must attach a rent roll.)
                    
3. TOTAL RECEIPTS (Lines 2A+2B+2C)
               965,573.82    
  4.  
TOTAL FUNDS AVAILABLE FOR OPERATIONS (Line 1 + Line 3)
   $ 205,107.49       $ 989,775.65    
5. DISBURSEMENTS
                    
     
A. Advertising
               -    
     
B.  Bank Charges
     140.00         1,570.00    
     
C.  Contract Labor
     5,000.00         51,034.85    
     
D.  Fixed Asset Payments (not incl. in “N”)
               -    
     
E.  Insurance
               41,943.00    
     
F.   Inventory Payments  (See Attach. 2)
               -    
     
G.  Leases
               -    
     
H.  Manufacturing Supplies
               -    
     
I.   Office Supplies
               1,370.84    
     
J.   Payroll - Net (See Attachment 4B)
               167,780.49    
     
K.  Professional Fees (Accounting & Legal)
     6,825.00         159,471.09    
     
L.   Rent
     750.00         49,625.66    
     
M.  Repairs & Maintenance
               -    
     
N.   Secured Creditor Payments (See Attach. 2)
               186,977.59    
     
O. Taxes Paid - Payroll (See Attachment 4C)
         83,905.08    
     
P. Taxes Paid - Sales & Use (See Attachment 4C)
         -    
     
Q.  Taxes Paid - Other (See Attachment 4C)
               5,714.52    
     
R.  Telephone
     1,506.96         8,671.78    
     
S.   Travel & Entertainment
               4,185.62    
     
Y.  U.S. Trustee Quarterly Fees
               4,875.00    
     
U.  Utilities
     305.31         6,222.96    
     
V.  Vehicle Expenses
               -    
     
W.  Other Operating Expenses (See MOR-3)
               25,896.85    
6. TOTAL DISBURSEMENTS (Sum of 5A thru W)
     14,527.27         799,195.43    
7. ENDING BALANCE (Line 4 Minus Line 6)
   $ 190,580.22  
(c)
   $ 190,580.22  
(c)

 
 
 
MOR-2
 

I declare under penalty of perjury that this statement and the accompanying documents and reports are true and correct to the best of my knowledge and belief.

This 26th day of August, 2011.
/s/ David C. Owen
  
 
By:  David C. Owen, Chairman/CEO
(a)This number is carried forward from last month’s report.  For the first report only, this number will be the balance as of the petition date.
(b)This figure will not change from month to month.  It is always the amount of funds on hand as of the date of  the petition.
(c)These two amounts will always be the same if form is completed correctly.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
MOR-3
 
 

 
MONTHLY SCHEDULE OF RECEIPTS AND DISBURSEMENTS (cont’d)
 
 
Detail of Other Receipts and Other Disbursements

OTHER RECEIPTS:
Describe Each Item of Other Receipt and List Amount of Receipt.  Write totals on Page MOR-2, Line 2C.

                            Cumulative
Description                                                          Current Month                                               Petition to Date

TOTAL OTHER RECEIPTS
Refunds
 
 

“Other Receipts” includes Loans from Insiders and other sources (i.e. Officer/Owner, related parties directors, related corporations, etc.).  Please describe below:

      
 
  Loan Amount
      Source
     of Funds
 
             Purpose
 
Repayment Schedule

 
           
           
 

 
OTHER DISBURSEMENTS:

Describe Each Item of Other Disbursement and List Amount of Disbursement.  Write totals on Page MOR-2, Line 5W.
 
         Cumulative
 Description    Current Month    Petition to Date
         
         
         
         
         
         
         
         
         
TOTAL OTHER DISBURSEMENTS        
 

NOTE: Attach a current Balance Sheet and Income (Profit & Loss) Statement.
ATTACHMENT 1

MONTHLY ACCOUNTS RECEIVABLE RECONCILIATION AND AGING

Name of Debtor: Digital Systems, Inc.                     Case Number:  11-20140-11-rdb

Reporting Period beginning August 1, 2011          Period ending  August 31, 2011
 

 
 
MOR-4
 

ACCOUNTS RECEIVABLE AT PETITION DATE:  


ACCOUNTS RECEIVABLE RECONCILIATION
(Include all accounts receivable, pre-petition and post-petition, including charge card sales which have not been received):

Beginning of Month Balance                                                                           $                       176,140 (a)
    PLUS: Current Month New Billings
    MINUS: Collection During the Month                                                       $                                    (b)
                    PLUS/MINUS: Adjustments or Writeoffs
                              $                                       *
End of Month Balance                                                                                      $                       176,140 (c)

*For any adjustments or Write-offs provide explanation and supporting documentation, if applicable:
    Customer receipts paid to FCG offset against interest and penalty fees

Adjustment made to refund overpayment on account.
 
 

POST PETITION ACCOUNTS RECEIVABLE AGING
(Show the total for each aging category for all accounts receivable)

 
 0-30 Days
  31-60 Days
   61-90 Days
    Over 90Days
   Total

TOTAL
0.00
  
0.00
  
(66.96)
  
(199,292.32)
  
375,499.08
  
176,139.80
                         


For any receivables in the “Over 90 Days” category, please provide the following:

                   
      Customer
Receivable   
Date
     Status (Collection efforts taken, estimate of  collectibility,
     write-off, disputed account, etc.)
                                        
 
       
       
       
       
 

(a)This number is carried forward from last month’s report.  For the first report only, this number will be     the balance as of the petition date.
(b)This must equal the number reported in the “Current Month” column of Schedule of Receipts and
     Disbursements (Page MOR-2, Line 2B).
(c)These two amounts must equal.
 
 
 
 
 
MOR-5
 
 
 
 
ATTACHMENT 2

MONTHLY ACCOUNTS PAYABLE AND SECURED PAYMENTS REPORT

Name of Debtor: Digital Systems, Inc.                                                                     Case Number:  11-20140-11-rdb

Reporting Period beginning August 1, 2011                                                         Period ending   August 31, 2011

In the space below list all invoices or bills incurred and not paid since the filing of the petition.  Do not include amounts owed prior to filing the petition.  In the alternative, a computer generated list of payables may be attached provided all information requested below is included.

POST-PETITION ACCOUNTS PAYABLE
 
Date   
Incurred
Days
Outstanding
     Vendor
Description
   Amount
 See Attached                
                 
                 
                 
                 
                 
                 
                 
                 
TOTAL AMOUNT                   (b)
                                                                                                                        
                                                                                                                                               
X  Check here if pre-petition debts have been paid.  Attach an explanation and copies of supporting documentation.
 
 
ACCOUNTS PAYABLE RECONCILIATION (Post Petition Unsecured Debt Only)
 
Opening Balance
 $ 4,941.02  (a)  
  PLUS: New Indebtedness Incurred This Month $      
  MINUS: Amount Paid on Post Petition, $      
    Accounts Payable This Month $      
  PLUS/MINUS: Adjustments $     *  
Ending Month Balance $ 4,941.02  (c)  
 
*For any adjustments provide explanation and supporting documentation, if applicable.

SECURED PAYMENTS REPORT
List the status of Payments to Secured Creditors and Lessors (Post Petition Only).   If you have entered into a modification agreement with a secured creditor/lessor, consult with your attorney and the United States Trustee Program prior to completing this section).
 
                                                                                                                 
 
             Number   Total
    Date        of Post    Amount of
Secured   Payment   Amount    Petition   Post Petition
Creditor/   Due This   Paid This    Payments   Payments
Lessor      Month     Month    Delinquent   Delinquent
                 
                 
                 
                 
 TOTAL          (d)      
                 
                 
 
                                                                                                                                              
(a)This number is carried forward from last month’s report.  For the first report only, this number will be zero.
(b, c)The total of line (b) must equal line (c).
(d)This number is reported in the “Current Month” column of Schedule of Receipts and Disbursements (Page MOR-2, Line 5N).
 
 
 
 
MOR-6
 
 
 
 
ATTACHMENT 3

INVENTORY AND FIXED ASSETS REPORT

Name of Debtor: Digital Systems, Inc.                     Case Number:  11-20140-11-rdb

Reporting Period beginning August 1, 2011          Period ending  August 31, 2011

INVENTORY REPORT

 
INVENTORY BALANCE AT PETITION DATE: $      
INVENTORY RECONCILIATION:        
    Inventory Balance at Beginning of Month $ 0.00   (a)  
       PLUS: Inventory Purchased During Month $      
       MINUS: Inventory Used or Sold $      
       PLUS/MINUS: Adjustments or Write-downs $     *  
    Inventory on Hand at End of Month $ 0.00    
 
METHOD OF COSTING INVENTORY:    FIFO

*For any adjustments or write-downs provide explanation and supporting documentation, if applicable.
Sale of Assets March 2011.
 
 
INVENTORY AGING
 
 
  Less than 6   6 months to   Greater than   Considered      
  months old   2 years old   2 years old   Obsolete   Total Inventory  
                     
    %  100.00  %        %    =  100.00 %  *
 

* Aging Percentages must equal 100%.
☐    Check here if inventory contains perishable items.

Description of Obsolete Inventory:
FIXED ASSET REPORT

FIXED ASSETS FAIR MARKET VALUE AT PETITION DATE:  $              1.219.241.95(b)
(Includes Property, Plant and Equipment)

BRIEF DESCRIPTION (First Report Only):  

FIXED ASSETS RECONCILIATION:
Fixed Asset Book Value at Beginning of Month                              $                             -0-  (a)(b)
MINUS:  Depreciation Expense                                           $                                                                            
PLUS:  New Purchases                                                          $                                 
PLUS/MINUS: Adjustments or Write-downs                   $                                                                             
Ending Monthly Balance                                                                     $                             -0- 
 
*For any adjustments or write-downs, provide explanation and supporting documentation, if applicable.
Asset Sale March 2011.


BRIEF DESCRIPTION OF FIXED ASSETS PURCHASED OR DISPOSED OF DURING THE REPORTING PERIOD:  

(a)This number is carried forward from last month’s report.  For the first report only, this number will be the
    balance as of the petition date.
(b)Fair Market Value is the amount at which fixed assets could be sold under current economic conditions.
    Book Value is the cost of the fixed assets minus accumulated depreciation and other adjustments.
 
 
 
MOR-7
 
 
 
 
ATTACHMENT 4A

MONTHLY SUMMARY OF BANK ACTIVITY - OPERATING ACCOUNT

Name of Debtor: Digital Systems, Inc.                    Case Number:  11-20140-11-rdb

Reporting Period beginning August 1, 2011          Period ending  August 31, 2011

Attach a copy of current month bank statement and bank reconciliation to this Summary of Bank Activity.  A standard bank reconciliation form can be found at http://www.justice.gov/ust/r20/index.htm.    If bank accounts other than the three required by the United States Trustee Program are necessary, permission must be obtained from the United States Trustee prior to opening the accounts.  Additionally, use of less than the three required bank accounts must be approved by the United States Trustee.

NAME OF BANK:             FNB Olathe                               BRANCH:  
 
ACCOUNT NAME:                  Operating Account         ACCOUNT NUMBER:  0139602

PURPOSE OF ACCOUNT:               OPERATING

   Ending Balance per Bank Statement   $ 192,422.72  
   Plus Total Amount of Outstanding Deposits   $    
   Minus Total Amount of Outstanding Checks and other debits   $ 1,218.09  *
   Minus Service Charges   $    
   Ending Balance per Check Register   $ 191,203.63  **(a)
 
*Debit cards are used by

**If Closing Balance is negative, provide explanation:.
 
 

The following disbursements were paid in Cash (do not includes items reported as Petty Cash on Attachment 4D:   ( ☐ Check here if cash disbursements were authorized by United States Trustee)

  Date
         Amount
          Payee
                Purpose
            Reason for Cash Disbursement

 
 
 
 
 
 
 
 
 
TRANSFERS BETWEEN DEBTOR IN POSSESSION ACCOUNTS
 “Total Amount of Outstanding Checks and other debits”, listed above, includes:

$________________Transferred to Payroll Account
$________________Transferred to Tax Account




(a) The total of this line on Attachment 4A, 4B and 4C plus the total of 4D must equal the amount reported as
     “Ending Balance” on Schedule of Receipts and Disbursements (Page MOR-2, Line 7).
 
 
 
 
MOR-8
 
 

ATTACHMENT 5A

CHECK REGISTER - OPERATING ACCOUNT


Name of Debtor:                                                     Case Number:

Reporting Period beginning                                      Period ending  

NAME OF BANK:                                                  BRANCH:  

ACCOUNT NAME:  

ACCOUNT NUMBER:  

PURPOSE OF ACCOUNT:                OPERATING

Account for all disbursements, including voids, lost checks, stop payments, etc.  In the alternative, a computer generated check register can be attached to this report, provided all the information requested below is included.

 
 
     CHECK            
 DATE    NUMBER    PAYEE      PURPOSE      AMOUNT
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
TOTAL                $
 
 
 
 
 
 
MOR-9
 
 
 
 
 
 
ATTACHMENT 4B

MONTHLY SUMMARY OF BANK ACTIVITY - PAYROLL ACCOUNT

Name of Debtor: Digital Systems, Inc.                     Case Number:  11-20140-11-rdb

Reporting Period beginning August 1, 2011          Period ending  August 31, 2011

Attach a copy of current month bank statement and bank reconciliation to this Summary of Bank Activity.  A standard bank reconciliation form can be found at http://www.justice.gov/ust/r20/index.htm.

NAME OF BANK:         FNB Olathe                          BRANCH:  

ACCOUNT NAME:                 Payroll Account        ACCOUNT NUMBER: 0149527
PURPOSE OF ACCOUNT:               PAYROLL
 
 

 
  Ending Balance per Bank Statement   $ 352.36  *
     Plus Total Amount of Outstanding Deposits   $    
     Minus Total Amount of Outstanding Checks and other debits   $ 0.00  *
     Minus Service Charges   $    
  Ending Balance per Check Register   $ 352.36  **(a)
 
*Debit cards must not be issued on this account.

**If Closing Balance is negative, provide explanation:
The following disbursements were paid by Cash:   ( ☐ Check here if cash disbursements were authorized                                                                                  
 by  United States Trustee)

Date
      Amount
   Payee
Purpose
 Reason for Cash Disbursement
 
       
       
       
 
 
The following non-payroll disbursements were made from this account:

Date
   Amount
   Payee
Purpose
 Reason for disbursement from this                        
account
 
           
           
           
 

 
(a)The total of this line on Attachment 4A, 4B and 4C plus the total of 4D must equal the amount reported as
     “Ending Balance” on Schedule of Receipts and Disbursements (Page MOR-2, Line 7).



 
MOR-10
 




ATTACHMENT 5B

CHECK REGISTER - PAYROLL ACCOUNT


Name of Debtor:                                                                          Case Number:  

Reporting Period beginning                                                       Period ending

NAME OF BANK:                                                                      BRANCH:  

ACCOUNT NAME:  

ACCOUNT NUMBER:  

PURPOSE OF ACCOUNT:                PAYROLL

Account for all disbursements, including voids, lost payments, stop payment, etc.  In the alternative, a computer generated check register can be attached to this report, provided all the information requested below is included.
 
 
 
 
     CHECK            
 DATE    NUMBER    PAYEE      PURPOSE      AMOUNT
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
TOTAL                $
 
 
 
 
MOR-11
 
 
 
ATTACHMENT 4C

MONTHLY SUMMARY OF BANK ACTIVITY - TAX ACCOUNT

Name of Debtor: Digital Systems, Inc.                     Case Number:  11-20140-11-rdb

Reporting Period beginning August 1, 2011          Period ending August 31, 2011

Attach a copy of current month bank statement and bank reconciliation to this Summary of Bank Activity.   A standard bank reconciliation form can be found on the United States Trustee website, http://www.justice.gov/ust/r20/index.htm.

NAME OF BANK:                                                                                      BRANCH:    ACCOUNT CLOSED

ACCOUNT NAME:                                                                                      ACCOUNT NUMBER:  

PURPOSE OF ACCOUNT:              TAX
 
  Ending Balance per Bank Statement   $    
     Plus Total Amount of Outstanding Deposits   $    
     Minus Total Amount of Outstanding Checks and other debits   $    *
     Minus Service Charges   $    
  Ending Balance per Check Register   $    **(a)

 
*Debit cards must not be issued on this account.

**If Closing Balance is negative, provide explanation:
 
 

The following disbursements were paid by Cash:   ( ☐  Check here if cash disbursements were authorized by
  United States Trustee)

 
 Date    Amount    Payee    Purpose    Reason for Cash Disbursement
                 
                 
                 
                 
 

 
The following non-tax disbursements were made from this account:
 
 Date    Amount    Payee    Purpose  
Reason for disbursement from this account
                 
                 
                 
                 


 

(a)The total of this line on Attachment 4A, 4B and 4C plus the total of 4D must equal the amount reported as
    “Ending Balance” on Schedule of Receipts and Disbursements (Page MOR-2, Line 7).
 
 
 
 
 
MOR-12
 
 
 
 
 
ATTACHMENT 5C

CHECK REGISTER - TAX ACCOUNT


Name of Debtor:                                                                     Case Number:

Reporting Period beginning                                                 Period ending  

NAME OF BANK:                                                         BRANCH:  

ACCOUNT NAME:                                                     ACCOUNT #

PURPOSE OF ACCOUNT:                TAX

Account for all disbursements, including voids, lost checks, stop payments, etc.  In the alternative, a computer-generated check register can be attached to this report, provided all the information requested below is included.
http://www.usdoj.gov/ust.
 
 
 
 
 
     CHECK              
 DATE    NUMBER    PAYEE      PURPOSE      AMOUNT  
                   
                   
                   
                   
                   
                   
                   
                   
                   
                   
TOTAL                  (d)
 
 
 
SUMMARY OF TAXES PAID
                   
 Payroll Taxes Paid              (a)
 Sales & Use Taxes Paid              (b)
Other Taxes Paid              (c)
TOTAL                  (d)

 

(a) This number is reported in the “Current Month” column of Schedule of Receipts and Disbursements
      (Page MOR-2, Line 5O).
(b) This number is reported in the “Current Month” column of Schedule or Receipts and Disbursements
      (Page MOR-2, Line 5P).
(c) This number is reported in the “Current Month” column of Schedule of Receipts and Disbursements
      (Page MOR-2, Line 5Q).
(d) These two lines must be equal.
 
 
 
 
MOR-13
 
 

 
ATTACHMENT 4D

INVESTMENT ACCOUNTS AND PETTY CASH REPORT

INVESTMENT ACCOUNTS

Each savings and investment account, i.e. certificates of deposits, money market accounts, stocks and bonds, etc., should be listed separately.  Attach copies of account statements.

Type of Negotiable
 
                 Current  
Instrument    Face Value    Purchase Price      Date of Purchase     Market Value   
                   
                   
                   
                   
                   
                   
                   
TOTAL                  (a)
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
                                                                                                                        
 
PETTY CASH REPORT

The following Petty Cash Drawers/Accounts are maintained:
 
    (Column 2)     (Column 3)   (Column 4)      
    Maximum   Amount of Petty     Difference between         
Location of   Amount of Cash   Cash On Hand   (Column 2) and      
Box/Account   in Drawer/Acct.   At End of Month   (Column 3)      
                   
                   
                   
                   
 TOTAL            $  (b)    
                                                                           
For any Petty Cash Disbursements over $100 per transaction, attach copies of receipts.  If there are no receipts, provide an explanation


 
TOTAL INVESTMENT ACCOUNTS AND PETTY CASH(a + b)     $                                (c)

(c)The total of this line on Attachment 4A, 4B and 4C plus the total of 4D must equal the
    amount reported as “Ending Balance” on Schedule of Receipts and Disbursements (Page
    MOR-2, Line 7).
 
 
 
 
MOR-14
 
 
ATTACHMENT 6

MONTHLY TAX REPORT

Name of Debtor: Digital Systems, Inc.                     Case Number:  11-20140-11-rdb

Reporting Period beginning August 1, 2011          Period ending  August 31, 2011

TAXES OWED AND DUE

Report all unpaid post-petition taxes including Federal and State withholding FICA, State sales tax, property tax, unemployment tax, State workmen's compensation, etc.
              
 
Name of   Date           Date Last    
Taxing   Payment           Tax Return   Tax Return
Authority   Due   Description   Amount    Filed   Period
 
 
                    
 
 
                    
 
 
                    
 
 
                    
 
 
                    
 
 
                    
                     
 TOTAL            $        
 
 

 
 
MOR-15
 
ATTACHMENT 7

SUMMARY OF OFFICER OR OWNER COMPENSATION

SUMMARY OF PERSONNEL AND INSURANCE COVERAGES

Name of Debtor: Digital Systems, Inc.                     Case Number:  11-20140-11-rdb

Reporting Period beginning August 1, 2011          Period ending  August 31, 2011

Report all forms of compensation received by or paid on behalf of the Officer or Owner during the month.  Include car allowances, payments to retirement plans, loan repayments, payments of Officer/Owner’s personal expenses, insurance premium payments, etc.  Do not include reimbursement for business expenses Officer or Owner incurred and for which detailed receipts are maintained in the accounting records.

 
 Name of Officer or Owner      Title      Description    Amount Paid
             
 David Owen       CEO    Services    $2,000.00
 Mickie Koslofsky     CFO    Services    $1,000.00

 
Dave and Laura Owen and Mickie Koslofsky continue to provide services as the Debtor winds down at the hourly rate of $100.00.  These services should not be extensive.
PERSONNEL REPORT
      Full Time    Part Time
 Number of employees at beginning of period     0    0
 Number hired during the period        
 Number terminated or resigned during period                
 Number of employees on payroll at end of period     0    0
         
 
 

CONFIRMATION OF INSURANCE

List all policies of insurance in effect, including but not limited to workers' compensation, liability, fire, theft, comprehensive, vehicle, health and life.  For the first report, attach a copy of the declaration sheet for each type of insurance.  For subsequent reports, attach a certificate of insurance for any policy in which a change occurs during the month (new carrier, increased policy limits, renewal, etc.).
 
Agent                   Date  
and/or   Phone   Policy    Coverage   Expiration    Premium  
Carrier   Number   Number   Type    Date   Due  
                       
CBIZ Insurance, Kathy Beamis,   913-234-1918                  
                       
CBIZ/Acuity Insurance Co.        X13725    General Liab                          4/1/2012          4/1/2012  
CBIZ/Nat’l Union Fire        01-146-63-00                    D&O    9/30/10                 1/1/18  
 
The following lapse in insurance coverage occurred this month:

 
 Policy   Date   Date    
Type   Lapsed   Reinstated    Reason for Lapse
             
             
             


G  
   Check here if U. S. Trustee has been listed as Certificate Holder for all insurance policies.
 
 
 
MOR-16
 


ATTACHMENT 8


SIGNIFICANT DEVELOPMENTS DURING REPORTING PERIOD

Information to be provided on this page, includes, but is not limited to: (1) financial transactions that are not reported on this report, such as the sale of real estate (attach closing statement); (2) non-financial transactions, such as the substitution of assets or collateral; (3) modifications to loan agreements; (4) change in senior management, etc.   Attach any relevant documents.
 
 

 
 

 
 

 
 

 
 

 
 
We anticipate filing a Plan of Liquidation and Disclosure Statement as soon as possible after liquidation of the assets.

 
MOR-17
 
 
 
 
Ordinary Income/Expense
  
     
Expense
    
       
0-60400 · Professional & Contract Service
  
         
0-60410 · Consulting
  
           
2-60410 · Consulting - Admin
3,000.00
         
Total 0-60410 · Consulting
3,000.00
         
 
Legal Fees
  
           
2-60430 · Legal Expense
6,825.00
         
Total Legal Fees
6,825.00
         
 
0-60470 · Outside Services
  
           
2-60470 · Outside Services - Admin
2,000.00
         
Total 0-60470 · Outside Services
2,000.00
       
 
Total 0-60400 · Professional & Contract Service
11,825.00
       
 
0-60500 · Facilities & Maintenance Costs
  
         
2-60550 · Rent Building
750.00
         
2-60590 · Utility Expense
305.31
       
Total 0-60500 · Facilities & Maintenance Costs
1,055.31
       
 
0-60800 · Telecommunications
  
         
6-60830 · Telephone Expense
199.09
         
6-60840 · Internet and WAN Services
1,307.87
       
Total 0-60800 · Telecommunications
1,506.96
       
 
0-62100 · Bank and Loan Charges
  
         
2-62110 · Bank Charges
140.00
       
Total 0-62100 · Bank and Loan Charges
140.00
     
 
Total Expense
14,527.27
 
 
Net Ordinary Income
-14,527.27
 
Net Income
      
-14,527.27
 

 
 
 
 


 
   
Aug 31, 11
  
ASSETS
      
Current Assets      
Checking/Savings
      
Cash Accounts
      
0-10070 · FNB Olathe Checking 013-960-2
     191,203.63  
0-10080 · FNB Payroll Acct. 014-952-7
     352.36  
Total Cash Accounts
     191,555.99  
 
Foreign Cash Accounts
        
0-10200 · YEN Bank of America 11407006
     -3,465.15  
0-10210 · Yen Currency Fluctuation
     3,465.15  
Total Foreign Cash Accounts
     0.00  
 
Total Checking/Savings
     191,555.99  
 
Accounts Receivable
        
Accounts Receivable
        
0-11000 · Accounts Receivable - Trade
     252,876.73  
0-11010 · Accounts Receivable - Dealers
     23,719.75  
0-11100 · Allowance for Doubtful Accounts
     -100,456.68  
Total Accounts Receivable
     176,139.80  
 
Total Accounts Receivable
     176,139.80  
 
Other Current Assets
        
Prepaid Expenses
        
0-13000 · Prepaid Expenses
     3,825.00  
Total Prepaid Expenses
     3,825.00  
Other Current Assets
        
0-14000 · Deposits
     -1,000.00  
Total Other Current Assets
     -1,000.00  
 
Total Other Current Assets
     2,825.00  
 
Total Current Assets
     370,520.79  
 
TOTAL ASSETS
     370,520.79  
 
LIABILITIES & EQUITY
        
Liabilities        
Current Liabilities
        
Accounts Payable
        
Accounts Payable
        
0-20000 · Accounts Payable
     1,186,695.49  
0-20100 · Accounts Payable - Chpt 11
     4,941.02  
Total Accounts Payable
     1,191,636.51  
 
Total Accounts Payable
     1,191,636.51  
 
Other Current Liabilities
        
Accrued Liabilities
        
Accrued Expenses
        
0-21000 · Accrued Expenses - Other
     52,257.40  
0-21010 · Accrued Property Taxes
     26,686.29  
0-21020 · Accrued Sales Tax
     3,366.29  
Total Accrued Expenses
     82,309.98  
 
Total Accrued Liabilities
     82,309.98  
 
Total Other Current Liabilities
     82,309.98  
 
Total Current Liabilities
     1,273,946.49  
 
Total Liabilities
     1,273,946.49  
 
Equity
        
Shareholders' Equity - CS
        
0-30000 · Bridge Warrant 2005 Proceeds
     164,991.75  
0-30010 · Stock Option Proceeds
     52,650.00  
0-30020 · Public Warrant Proceeds
     769,171.09  
0-30040 · Common Stock
     36,343,227.14  
0-30050 · Common Stock Restricted
     1,560,000.00  
0-30060 · Options Outstanding
     2,076,270.47  
0-30065 · Warrants
     88,660.94  
0-30070 · Offering Costs
     -2,250,025.22  
Total Shareholders' Equity - CS
     38,804,946.17  
 
Other Comprehensive Income
        
0-31000 · Deferred currency exchange
     3,465.15  
Total Other Comprehensive Income
     3,465.15  
 
0-32000 · Retained Deficit
     -36,493,467.90  
Net Income
     -3,218,369.12  
Total Equity
     -903,425.70  
 
TOTAL LIABILITIES & EQUITY
     370,520.79  
 
 
 
 
 
 
 
 
ICOP DIGITAL, INC. Reconciliation Detail
5:13 PM 09/21/11 0-10070 FNB Olathe Checking 013-960-2, Period Ending 08/31/2011
 
Type Date                      Num           Name           Clr           Amount                      Balance
Beginning Balance                                                                           212,328.99
Cleared Transactions
Checks and Payments -16 items
Check           4/9/2011                      9677           Last IT                      X           -2,500.00                      -2,500.00
Check           7/20/2011                      9724           AMERICAN EXPRE...                                           X           -364.00                      -2,864.00
Check           7/21/2011                      9728           US Trustee Payment...                                           X           -975.00                      -3,839.00
Check           7/30/2011                      9729           Equivest, LLC                                X           -2,000.00                      -5,839.00
Check           7/30/2011                      9730           Laura Owen, LLC                                X           -1,600.00                      -7,439.00
Check           8/3/2011                      9733           SPRINT                      X           -1,307.87                      -8,746.87
Check           8/3/2011                      9731           Kincaid & Rees Park-                                           X           -750.00                      -9,496.87
Check           8/3/2011                      9732           Kansas Gas Service                                X           -29.11           -9,525.98
Check           8/5/2011                      OL           AT&T                      X           -100.44                      -9,626.42
Check           8/8/2011                      9735           EVANS & MULLINI...                                           X           -2,925.00                      -12,551.42
Check           8/8/2011                      9734           Kansas City Power...                                           X           -276.20                      -12,827.62
Check           8/17/2011                      OL           SPRINT                      X           -98.65           -12,926.27
Check           8/23/2011                      OL           Marketwire Inc.                                X           -2,000.00                      -14,926.27
Check           8/25/2011                      9736           United States Trustee                                           X           -3,900.00                      -18,826.27
Check           8/29/2011                      9738           Equivest, LLC                                X           -2,000.00                      -20,826.27
Check           9/30/2011                                           X           -80.00           -20,906.27
Total Checks and Payments                                                                                     -20,906.27                      -20,906.27
Deposits and Credits -1 item
Deposit                      8/8/2011                                           X           1,000.00                      1,000.00
Total Deposits and Credits                                                                           1,000.00                      1,000.00
Total Cleared Transactions                                                                                     -19,906.27                      -19,906.27
Cleared Balance                                                                -19,906.27                      192,422.72
Uncleared Transactions
Checks and Payments - 4 items
Bill Pmt                      -Check 10/21/2010                                9581           Corsino, Edwin - Exp...                                                      -14.09           -14.09
General Journal 6/23/2011                                           21283                                -75.00           -89.09
General Journal 6/30/2011                                           21284                                -130.00                      -219.09
Check           8/29/2011                      9737           Mickey Koslofsky                                           -1,000.00                      -1,219.09
Total Checks and Payments                                                                                     -1,219.09                      -1,219.09
Total Uncleared Transactions                                                                                     -1,219.09                      -1,219.09
Register Balance as of 08/31/2011                                                                                                -21,125.36                      191,203.63
New Transactions
Checks and Payments -10 items
Check           9/1/2011                      9739           Kincaid & Rees Park-                                                      -750.00                      -750.00
Check           9/1/2011                      9740           Kansas Gas Service                                           -29.11           -779.11
Check           9/5/2011                      9741           Kansas City Power...                                                      -185.59                      -964.70
Check           9/15/2011                      9744           Kansas Franchise Tax                                                      -531.00                      -1,495.70
Check           9/15/2011                      9747           North Carolina Reve...                                                      -199.00                      -1,694.70
Check           9/15/2011                      9746           Utah State Tax Com...                                                      -100.00                      -1,794.70
Check           9/15/2011                      9742           Arizona DOR                                           -50.00           -1,844.70
Check           9/15/2011                      9743           Franchise Tax Board                                                      -25.00           -1,869.70
Check           9/15/2011                      9745           State of New Jersey-...                                                      -11.00           -1,880.70
Check           9/20/2011                      9748           EVANS & MULLINI...                                                      -12,971.71                      -14,852.41
Total Checks and Payments                                                                                     -14,852.41                      -14,852.41
Total New Transactions                                                                           -14,852.41                      -14,852.41
Ending Balance
-35,977.77
176,351.22
 
 
 
 
 
 
 
first National Bank of Olathe pg. 1
 
***************AUTO**3-DIGIT 662 2060 0.7820 AT 0.365                                                                                                           9 1 210
DIGITAL SYSTEMS INC
15621 W 87TH ST PKWY STE 355
LENEXA KS 66219-1435
PERIODIC STATEMENT Date: Aug 31, 2011
Period: Aug 01, 2011 to Aug 31, 2011 (31 Days )
 
ACCOUNT #: DDA - 0139602                                                      Operating Account
Digital Systems Inc Debtor in Possession
 
Enclosures: 13
 
Beginning Balance as of 08/01/11
Deposits & Other Credits Charges & Fees Checks & Other Debits Average Balance Ending Balance as of 08/31/11
Charges And Fees
1 Outgoing Wire Fee Commercial Service Charge 1 Maintenance Fee 12 Per Check Fee 1 Per Deposit Fee 3 ACH Debits 1 Deposit Item - On-Us Less Earnings Credit 10.00 1.80 0.15 0.15 0.10 12.20
212,328.99
1,000.00 20.00 20,886.27 204,176.59
192,422.72
20.00 0.00
Transaction Information
 
Date Check#
08/08 08/05 08/17
08/23 08/23
Description Deposit
ACH Debit Payment ATT
ACH Debit ONLINE PMT SPRINT
Internet Initiated
Transaction-
O/W Marketwire, Inc
Credit Amount 1,000.00
Debit Amount
100.44
98.65 2,000.00 20.00
Outgoing Wire Fee
 
 
 
 
 
Page: 2
Account #: DDA-0139602
PERIODIC STATEMENT DIGITAL SYSTEMS INC
Aug 31, 2011
 
Transaction Information (continued)
Date Check#                      Description
Credit Amount Debit Amount
 
08/31           ACH Debit Cash Mgr FNB Olathe
60.00
 
Check           Information
Date           Check#                                Amount
08/23           9677                      2,500.00
08/18           9724 *                                364.00
08/09           9728 *                                975.00
08/01           9729                      2,000.00
08/01           9730                      1,600.00
08/04           9731                      750.00
 
Date           Check#                                Amount
08/10           9732                      29.11
08/09           9733                      1,307.87
08/11           9734                      276.20
08/22           9735                      2,925.00
08/31           9736                      3,900.00
08/31           9738 *                                2,000.00
* Indicates a break in the Check number order.
 
 
 
 
 
 
 
 
 
 
 
Account #139602 - DDA
 
Page 3 of 4
8/8/2011 0 $1,000.00
8/23/2011 9677 $2,500.00
8/18/2011 9724 $364.00
8/9/2011 9728 $975.00
8/1/2011 9729 $2,000.00
8/1/2011 9730 $1,600.00
8/4/2011 9731 $750.00
8/10/2011 9732 $29.11
8/9/2011 9733 $1,307.87
8/11/2011 9734 $276.20
8/22/2011 9735 $2,925.00
8/31/2011 9736 $3,900.00
 
 
 
 
 
 
 
 
 
Account #139602 - DDA                                           Page 4 of 4
8/31/2011 9738 $2,000.00
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ICOP DIGITAL, INC. Reconciliation Detail
5:25 PM 09/21/11
0-10080  FNB Payroll Acct. 014-952-7, Period Ending 08/31/2011
Type Date Num                                Name           Clr           Amount                      Balance
Beginning Balance
Cleared Transactions
Checks and Payments -1 item
Check 7/31/2011                                           X           -24.23           376.59 -24.23
Total Checks and Payments                                                                           -24.23           -24.23
Total Cleared Transactions                                                                           -24.23           -24.23
Cleared Balance                                                      -24.23           352.36
Register Balance as of 08/31/2011                                                                                     -24.23           352.36
Ending Balance                                                      -24.23           352.36
 
 
 
 
 
 
 
First National
Bank of Olathe
Page: 1
 
***************AUTO**3-DIGIT 662 2061 0.4610 AT 0.365                                                                                                           9 1 211
DIGITAL SYSTEMS INC
15621 W 87TH ST PKWY STE 355
LENEXA KS 66219-1435
PERIODIC STATEMENT Date: Aug 31, 2011
Period: Aug 01, 2011 to Aug 31, 2011 (31 Days )
 
ACCOUNT #: DDA - 0149527                                                      Payroll Account
Digital Systems Inc
 
Enclosures: 0
 
376.59
0.00 0.00 24.23 360.18
352.36
Beginning Balance as of 08/01/11
Deposits & Other Credits Charges & Fees Checks & Other Debits Average Balance Ending Balance as of 08/31/11
Transaction Information
 
Date Check# 08/11
Description
Credit Amount
Debit Amount
24.23
ACH Debit TRANSFER 11534 ICOP DIGIT
 
 

Digital Systems, Inc. Reports