Digital Systems, Inc. - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - November 21, 2011

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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 October 1, 2011  TO October 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 October 1, 2011 and ending October 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
   $ 163,404.99  
(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)
     243.14         763,102.70    
   
(If you receive rental income,
               -    
   
    you must attach a rent roll.)
                    
3. TOTAL RECEIPTS (Lines 2A+2B+2C)
               965,816.96    
  4.  
TOTAL FUNDS AVAILABLE FOR OPERATIONS (Line 1 + Line 3)
   $ 163,648.13       $ 990,018.79    
5. DISBURSEMENTS
                    
     
A. Advertising
               -    
     
B.  Bank Charges
     55.00         1,685.00    
     
C.  Contract Labor
     2,000.00         55,034.85    
     
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
               1,401.09    
     
J.   Payroll - Net (See Attachment 4B)
               167,780.49    
     
K.  Professional Fees (Accounting & Legal)
               182,442.30    
     
L.   Rent
     750.00         51,125.66    
     
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)
               6,630.52    
     
R.  Telephone
     91.42         8,946.37    
     
S.   Travel & Entertainment
               4,185.62    
     
Y.  U.S. Trustee Quarterly Fees
               4,875.00    
     
U.  Utilities
     143.35         6,581.01    
     
V.  Vehicle Expenses
               -    
     
W.  Other Operating Expenses (See MOR-3)
               25,896.85    
6. TOTAL DISBURSEMENTS (Sum of 5A thru W)
     3,039.77         829,410.43    
7. ENDING BALANCE (Line 4 Minus Line 6)
   $ 160,608.36  
(c)
   $ 160,608.36  
(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 16th day of November 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.
 

 
Description   Current Month   
    Cumulative
Petition to Date
TOTAL OTHER RECEIPTS Refunds       $ 243.14     $763,102.70
                                                       
“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.
   
Description   Current Month
Cumulative
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 October 1, 2011                                                           Period ending  October 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 90 Days   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 October 1, 2011                                                          Period ending   October 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
  
 
   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 $                                                 *
 End of 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).
 
Secured Creditor/
 
  
Date Payment Due This Month
  
Amount Paid This Month
  
Number of Post Petition Payments Delinquent
   Total Amount of Post Petition Payments 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 October 1, 2011                                                        Period ending  October 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 months old
   6 months to 2 years old   Greater than 2 years old   Considered Obsolete   Total Inventory
                 
  %  100.00 %   %   %    =  100% *

* 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 October 1, 2011                                                          Period ending  October 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  $                          161,853.12
   Plus Total Amount of Outstanding Deposits  $                                         
   Minus Total Amount of Outstanding Checks and other debits  $                             219.09 *
   Minus Service Charges  $
   Ending Balance per Check Register  $                          161,643.03**(a)
 
*Debit cards are used by

**If Closing Balance is negative, provide explanation:

   4C:   TAXES PAID-OTHER
Amount                                                      Payee                                                                      Purpose                                     
 

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.
 
DATE
  
CHECK
NUMBER
   PAYEE   PURPOSE   AMOUNT
         SEE ATTACHED        
               
               
               
               
               
               
               
               
               
               
               
               
               
               
               
               
               
               
               
               
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 October 1, 2011                                                         Period ending October 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  $                            0.00*
     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  
$                            0.00**(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.
 
DATE
  
CHECK
NUMBER
   PAYEE   PURPOSE   AMOUNT
         SEE ATTACHED          
               
               
               
               
               
               
               
               
               
               
               
               
               
               
               
               
               
               
               
               
               
               
               
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 October 1, 2011                Period ending October 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.
 
DATE
  
CHECK
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
 
Instrument
   Face Value   Purchase Price    Date of Purchase   Current Market Value
                 
                 
                 
                 
                 
                 
                 
 TOTAL                (a)
 
PETTY CASH REPORT

The following Petty Cash Drawers/Accounts are maintained:
 
 
 
Location of
Box/Account
  
(Column 2)
Maximum
Amount of Cash
in Drawer/Acct.
  
(Column 3)
Amount of Petty
Cash On Hand
At End of Month
  
(Column 4)
Difference between
(Column 2) and 
(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 October 1, 2011                                                   Period ending October 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
Taxing
Authority 
  
Date
Payment
Due                      
  
Description
  
Amount
  
Date Last
Tax Return
Filed
  
Tax Return
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 October 1, 2011                                                        Period ending October 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
 
David 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
and/or
Carrier
 
Phone
Number
  
Policy
Number 
  
Coverage
Type
  
Expiration
Date
 Date
Premium
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
Type
  
Date
Lapsed
  
Date
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
 
 
 
             
Oct 11, 11
ASSETS
          
 
Current Assets
    
   
Checking/Savings
  
     
Cash Accounts
  
       
0-10070 · FNB Olathe Checking 013-960-2
163,689.03
     
Total Cash Accounts
163,689.03
     
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
163,689.03
   
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
7,650.00
     
Total Prepaid Expenses
7,650.00
     
Other Current Assets
  
       
0-14000 · Deposits
-1,000.00
     
Total Other Current Assets
-1,000.00
   
Total Other Current Assets
6,650.00
 
Total Current Assets
346,478.83
TOTAL ASSETS
    
346,478.83
LIABILITIES & EQUITY
    
 
Liabilities
        
   
Current Liabilities
  
     
Accounts Payable
  
       
Accounts Payable
  
         
0-20000 · Accounts Payable
1,190,520.49
         
0-20100 · Accounts Payable - Chpt 11
4,941.02
       
Total Accounts Payable
1,195,461.51
     
Total Accounts Payable
1,195,461.51
     
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
1,277,771.49
 
Total Liabilities
  
1,277,771.49
 
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
  
-3,246,236.08
 
Total Equity
    
-931,292.66
TOTAL LIABILITIES & EQUITY
346,478.83
 
 
 
 
 
 
             
Oct 11
 
Ordinary Income/Expense
  
     
Expense
    
       
0-60400 · Professional & Contract Service
  
         
0-60410 · Consulting
  
           
2-60410 · Consulting - Admin
2,000.00
         
Total 0-60410 · Consulting
2,000.00
       
Total 0-60400 · Professional & Contract Service
2,000.00
       
0-60500 · Facilities & Maintenance Costs
  
         
2-60550 · Rent Building
750.00
         
2-60590 · Utility Expense
143.35
       
Total 0-60500 · Facilities & Maintenance Costs
893.35
       
0-60700 · Business Insurance
  
         
2-60740 · Insurance Other
-243.14
       
Total 0-60700 · Business Insurance
-243.14
       
0-60800 · Telecommunications
  
         
6-60830 · Telephone Expense
91.42
       
Total 0-60800 · Telecommunications
91.42
       
0-62100 · Bank and Loan Charges
55.00
     
Total Expense
2,796.63
 
Net Ordinary Income
-2,796.63
Net Income
      
-2,796.63
 
 
 
 
 
 
       
Oct 31, 11
Beginning Balance
164,649.75
   
Cleared Transactions
  
     
Checks and Payments - 6 items
-3,039.77
     
Deposits and Credits - 1 item
243.14
   
Total Cleared Transactions
-2,796.63
Cleared Balance
161,853.12
   
Uncleared Transactions
  
     
Checks and Payments - 3 items
-219.09
   
Total Uncleared Transactions
-219.09
Register Balance as of 10/31/2011
161,634.03
   
New Transactions
  
     
Checks and Payments - 6 items
-4,729.90
   
Total New Transactions
-4,729.90
Ending Balance
156,904.13
 
 
 
 
 
 
                   
                                  Mailing Address:           P O Box 1500          Olathe, KS 66051
                               Main Office 913-782-3211       www.fnbolathe.com         Customer Service 913-791-9111
                                         
 
                                                     Page: 1
 
 
***************AUTO**3-DIGIT 662
2046 0.7820 AT 0.365                   9 1 198          PERIODIC STATEMENT
DIGITAL SYSTEMS INC              Date: Oct 31, 2011
15621 W 87TH ST PKWY STE 355             Period: Oct 01, 2011 to Oct 31, 2011 (31 Days )         
LENEXA KS 66219-1435
 
 
 
 
 
ACCOUNT #: DDA – 0139602           Operating Account
 
Digital Systems Inc
Debtor in Possession
                                     Enclosures:  5

 
Beginning Balance
as of 10/01/11                   164,649.75
Deposits & Other Credit                243.14
Charges & Fees                  0.00
Checks & Other Debits                      3,039.77
Average Balance                 163,168.21
Ending Balance
as of 10/31/11                     61,853.12
 

Charges And Fees
Commercial Service Charge                         0.00
1 Maintenance Fee                      10.00
4 Per Check Fee                     0.60
1 Per Deposit Fee                          0.15
2 ACH Debits                        0.10
1 Deposit Item - Transit                   0.10
Less Earnings Credit                  10.95
 

 
Transaction Information
 
 Date    Check#  Description   Credit Amount   Debit Amount
         
 10/11    Deposit   243.14  
 10/05    ACH Debit Payment ATT    91.42
 10/31    ACH Debit Cash Mgr FNB    
     Olathe    55.00
 
Check Information
 
 Date  Check#  Amount  |  Date  Check#  Amount
 10/06  1001  750.00  |  10/11  1002  29.11
 

 
PLEASE EXAMINE AND REPORT ANY DISCREPANCY. SEE REVERSE SIDE FOR ADDITIONAL INFORMATION.                        STATFN (8-08)
 
 
 
 
 
 
                                   Mailing Address:           P O Box 1500          Olathe, KS 66051
                               Main Office 913-782-3211       www.fnbolathe.com         Customer Service 913-791-9111
                                         
 
 
                                                       Page: 2
 
                                                 PERIODIC STATEMENT
Account #: DDA-0139602                                        DIGITAL SYSTEMS INC
 
 
 
                                                      Oct 31, 2011
Check Information (continued)

Date  Check#  Amount  |  Date  Check#  Amount
 10/11 1003  114.24  |  10/19  1004  2,000.00


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PLEASE EXAMINE AND REPORT ANY DISCREPANCY. SEE REVERSE SIDE FOR ADDITIONAL INFORMATION.                        STATFN (8-08)
 
 
 
 
 
 
 
Account #: DDA-0139602                                           Page 3 of 3
 
             10/11/2011    0   $243.14                            10/6/2011      1001       $750
 
 
 
                                        10/11/2011          1002              $29.11                             10/11/2011    1003   $114.24
 
 
 
 
   
          10/19/2011   1004            $2,000.00
 
 
 
 
 
 
 
 
 
 
ICOP DIGITAL, INC.                                                                          11/13/2011 3:50 pm
 
Register: Cash Accounts:0-10070 • FNB Olathe Checking 013-960-2
From 10/01/2011 through 10/31/2011
Sorted by: Date, Type, Number/Ref
 
 Date  Number
   Payee
Account
  
Memo
Payment
C
Deposit
Balance
10/05/2011
OL
AT&T
0-60800 •
Telecommun...
  
91.42
X
  
164,339.24
10/05/2011
1001
Kincaid & Rees Park...
0-60500 •
Facilities & ...
October Rent
750.00
X
  
163,589.24
10/05/2011
1002
Kansas Gas Service
0-60500 •
Facilities & ...
  
29.11
X
  
163,560.13
10/05/2011
1003
Kansas City Power &...
0-60500 •
Facilities & ...
  
114.24
X
  
163,445.89
10/11/2011
    
0-60700 •
Business Ins...
Deposit-Misso...
  
X
243.14
163,689.03
10/19/2011
1004
Equivest, LLC
0-60400 •
Professional ...
  
2,000.00
X
  
161,689.03
10/31/2011
OL
First National Bank o...
0-62100 •
Bank and Lo...
  
55.00
X
  
161,634.03

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Page 1
 

Digital Systems, Inc. Reports