UNITED STATES BANKRUPTCY COURT

_____________ DISTRICT OF ______________

 

In re	KIT digital, Inc.		Case No.		13-11298 (REG)
	Debtor		Reporting Period:		July 1 2013 to July 31 2013
			Federal Tax I.D. #		11-3447894

 

CORPORATE MONTHLY OPERATING REPORT

 

File with the Court and submit a copy to the United States Trustee within 20 days after the end of the month and submit a copy of the report to any official committee appointed in the case. 

(Reports for Rochester and Buffalo Divisions of Western District of New York are due 15 days after the end of the month, as are the reports for Southern District of New York.)       

 

REQUIRED DOCUMENTS		Form No.		Document Attached		Explanation Attached
Schedule of Cash Receipts and Disbursements		MOR-1
Bank Reconciliation (or copies of debtor's bank reconciliations)		MOR-1 (CON'T)
Copies of bank statements
Cash disbursements journals
Statement of Operations		MOR-2
Balance Sheet		MOR-3
Status of Post-petition Taxes		MOR-4
Copies of IRS Form 6123 or payment receipt
Copies of tax returns filed during reporting period
Summary of Unpaid Post-petition Debts		MOR-4
Listing of Aged Accounts Payable
Accounts Receivable Reconciliation and Aging		MOR-5
Taxes Reconciliation and Aging		MOR-5
Payments to Insiders and Professional		MOR-6
Post Petition Status of Secured Notes, Leases Payable		MOR-6
Debtor Questionnaire		MOR-7

 

I declare under penalty of perjury (28 U.S.C. Section 1746) that this report and the attached documents

are true and correct to the best of my knowledge and belief.

 

Signature of Debtor		Date
Signature of Authorized Individual*		Date	8/12/2013
Printed Name of Authorized Individual: Fabrice Hamaide		Date	8/12/2013

 

*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 re	KIT digital, Inc.		Case No.		13-11298 (REG)
	Debtor		Reporting Period:		July 1 2013 to July 31 2013

 

SCHEDULE OF CASH RECEIPTS AND DISBURSEMENTS 

 

Amounts reported should be from the debtor’s books and not the bank statement.   The beginning cash should be the ending cash from the prior month or, if this is the first report,  the amount should be the balance on the date the petition was filed.  The amounts reported in the "CURRENT MONTH -

ACTUAL” column must equal the sum of the four bank account columns.  Attach copies of the bank statements and the cash disbursements journal. The total disbursements listed in the disbursements journal must equal the total disbursements reported on this page.  A bank reconciliation must be attached for each account.  [See MOR-1 (CON’T)]

 

		BANK  ACCOUNTS
ACCOUNT NUMBER (LAST 4)		OPER				PAYROLL				TAX				OTHER				CURRENT MONTH ACTUAL (TOTAL OF ALL ACCOUNTS)
CASH BEGINNING  OF MONTH			19,065.74																19,065.74
RECEIPTS
CASH  SALES																			-
ACCOUNTS RECEIVABLE - PREPETITION																			-
ACCOUNTS RECEIVABLE - POSTPETITION																			-
LOANS AND ADVANCES			1,395,000.00																1,395,000.00
SALE  OF  ASSETS																			-
OTHER  (ATTACH  LIST)																			-
TRANSFERS (FROM DIP ACCTS)																			-
TOTAL  RECEIPTS			1,395,000.00				-				-				-				1,395,000.00
DISBURSEMENTS
NET PAYROLL			126,100.00																126,100.00
PAYROLL TAXES																			-
SALES, USE, & OTHER TAXES																			-
INVENTORY PURCHASES																			-
SECURED/ RENTAL/ LEASES																			-
INSURANCE			12,402.28																12,402.28
ADMINISTRATIVE			21,779.06																21,779.06
SELLING																			-
OTHER  (ATTACH  LIST)																			-
OWNER DRAW *																			-
TRANSFERS (TO DIP ACCTS)																			-
PROFESSIONAL FEES			974,111.27																974,111.27
U.S. TRUSTEE  QUARTERLY FEES			6,500.00																6,500.00
COURT COSTS																			-
TOTAL DISBURSEMENTS			1,140,892.61				-				-				-				1,140,892.61
NET CASH FLOW			254,107.39				-				-				-				254,107.39
(RECEIPTS LESS DISBURSEMENTS)
CASH – END OF MONTH			273,173.13				-				-				-				273,173.13

 

* COMPENSATION TO SOLE PROPRIETORS FOR SERVICES RENDERED TO BANKRUPTCY ESTATE

 

THE FOLLOWING SECTION MUST BE COMPLETED

DISBURSEMENTS FOR CALCULATING U.S. TRUSTEE QUARTERLY FEES: (FROM CURRENT MONTH  ACTUAL COLUMN)

 

TOTAL DISBURSEMENTS			1,140,892.61
LESS:  TRANSFERS TO OTHER DEBTOR IN POSSESSION ACCOUNTS			-
PLUS:   ESTATE DISBURSEMENTS MADE BY OUTSIDE SOURCES  (i.e. from escrow accounts)			-
TOTAL DISBURSEMENTS FOR CALCULATING U.S. TRUSTEE QUARTERLY FEES			1,140,892.61

  

 

In re	KIT digital, Inc.		Case No.		13-11298 (REG)
	Debtor		Reporting Period:		July 1 2013 to July 31 2013

 

BANK RECONCILIATIONS

 

Continuation Sheet for MOR-1

A bank reconciliation must be included for each bank account.  The debtor's bank reconciliation may be substituted for this page.

(Bank account numbers may be redacted to last four numbers.)

 

Operating

Payroll

Tax

Other

#

#

#

#

BALANCE PER BOOKS

273,173.13

BANK BALANCE

279,673.13

(+) DEPOSITS IN TRANSIT (ATTACH LIST)

0

(-)  OUTSTANDING CHECKS (ATTACH LIST):

(6,500.00

)

OTHER  (ATTACH EXPLANATION)

0

ADJUSTED BANK BALANCE *

273,173.13

*"Adjusted Bank Balance" must equal "Balance per Books"

DEPOSITS IN TRANSIT

Date

Amount

Date

Amount

CHECKS OUTSTANDING

Ck. #

Amount

Ck. #

Amount

US Department of Justice US Trustee Program

3704

6,500.00

OTHER

 

 

In re	KIT digital, Inc.		Case No.		13-11298 (REG)
	Debtor		Reporting Period:		July 1 2013 to July 31 2013

 

STATEMENT OF OPERATIONS  (Income Statement)

 

The Statement of Operations is to be prepared on an accrual basis.  The accrual basis of accounting recognizes revenue

when it is realized and expenses when they are incurred, regardless of when cash is actually received or paid.

 

REVENUES		MONTH				CUMULATIVE  -FILING TO DATE
Gross Revenues
Less:  Returns and Allowances
Net Revenue
COST OF GOODS SOLD
Beginning Inventory
Add: Purchases
Add: Cost of Labor
Add: Other Costs (attach schedule)
Less:  Ending Inventory
Cost of Goods Sold
Gross Profit
OPERATING EXPENSES
Advertising
Auto and Truck Expense
Bad Debts
Contributions
Employee Benefits Programs			7,608.17				8,228.97
Officer/Insider Compensation*			80,000.00				287,975.00
Insurance			27,640.00				82,920.00
Management Fees/Bonuses
Office Expense			-				81.29
Pension & Profit-Sharing Plans
Repairs and Maintenance			1,143.19				3,429.57
Rent and Lease Expense
Salaries/Commissions/Fees			61,142.47				241,656.35
Supplies			75.12				936.02
Taxes - Payroll			2,697.84				12,402.11
Taxes - Real Estate
Taxes - Other			41,563.34				41,563.34
Travel and Entertainment			-				1,010.02
Utilities			6,766.98				17,565.52
Other (attach schedule)			31,990.93				54,115.65
Total Operating Expenses Before Depreciation
Depreciation/Depletion/Amortization			75,833.65				416,621.97
Net Profit (Loss) Before Other Income & Expenses			(336,461.69	)			(1,168,505.81	)
OTHER INCOME AND EXPENSES
Other Income (attach schedule)
Interest Expense			19,723.34				284,838.13
Other Expense (attach schedule)			-				125,000.00
Net Profit (Loss) Before Reorganization Items			(356,185.03	)			(1,578,343.94	)
REORGANIZATION ITEMS
Professional Fees			3,755,619.57				5,787,117.66
U. S. Trustee Quarterly Fees			6,500.00				6,500.00
Interest Earned on Accumulated Cash from Chapter 11 (see continuation sheet)
Gain (Loss) from Sale of Equipment
Other Reorganization Expenses (attach schedule)
Total Reorganization Expenses
Income Taxes
Net Profit (Loss)			(4,118,304.60	)			(7,371,961.60	)
*"Insider" is defined in 11 U.S.C. Section 101(31).
BREAKDOWN OF “OTHER” CATEGORY
OTHER COSTS
Monthly Bank fee			1,868.81				7,884.84
Corporate and Shareholder Services			5,284.49				19,603.18
Data Room costs			22,819.20				24,419.20
Other Misc exp			710.00				900.00
F/X loss			1,308.43				1,308.43
OTHER OPERATIONAL EXPENSES
OTHER INCOME
OTHER EXPENSES
DIP Loan Fee			-				125,000.00
OTHER REORGANIZATION EXPENSES
Legal Fees			3,755,619.57				5,787,117.66

 

Reorganization Items - Interest Earned on Accumulated Cash from Chapter 11:

Interest earned on cash accumulated during the chapter 11 case, which would not have been earned but for the bankruptcy proceeding, should be reported as a reorganization item.

  

 

In re	KIT digital, Inc.		Case No.		13-11298 (REG)
	Debtor		Reporting Period:		July 1 2013 to July 31 2013

 

BALANCE SHEET

The Balance Sheet is to be completed on an accrual basis only.  Pre-petition liabilities must be classified separately from post-petition obligations.

 

ASSETS		BOOK VALUE AT END OF CURRENT REPORTING MONTH				BOOK VALUE AT END OF PRIOR REPORTING MONTH				BOOK VALUE ON PETITION DATE OR SCHEDULED				Comments
CURRENT ASSETS
Unrestricted Cash and Equivalents			273,173.13				19,065.74				172.67
Restricted Cash and Cash Equivalents (see continuation sheet)			2,000,704.99				2,000,482.24				2,089,119.93
Accounts Receivable (Net)			-				-				-
Notes Receivable			-				-				-
Inventories			-				-				-
Prepaid Expenses			525,453.18				580,518.30				528,002.29
Professional Retainers			-				-				-
Other Current Assets (attach schedule)			17,475,105.36				17,191,721.24				17,604,502.39
TOTAL CURRENT ASSETS			20,274,436.66				19,791,787.52				20,221,797.28
PROPERTY & EQUIPMENT
Real Property and Improvements			-				-				-
Machinery and Equipment			1,559,399.56				1,559,399.56				1,559,399.56
Furniture, Fixtures and Office Equipment			62,824.09				62,824.09				62,824.09
Leasehold Improvements			-				-				-
Vehicles			-				-				-
Less:   Accumulated Depreciation			(935,706.06	)			(898,124.81	)			(822,906.69	)
TOTAL PROPERTY & EQUIPMENT			686,517.59				724,098.84				799,316.96
OTHER ASSETS
Amounts due from Insiders*			-				-				-
Other Assets (attach schedule)			220,886,486.82				220,886,486.82				220,886,486.82
TOTAL OTHER ASSETS			220,886,486.82				220,886,486.82				220,886,486.82
TOTAL ASSETS			241,847,441.07				241,402,373.18				241,907,601.06
LIABILITIES AND OWNER EQUITY			BOOK VALUE AT END OF CURRENT REPORTING MONTH				BOOK VALUE AT END OF PRIOR REPORTING MONTH				BOOK VALUE ON PETITION DATE
LIABILITIES NOT SUBJECT TO COMPROMISE (Postpetition)
Accounts Payable			2,584,464.54				131,558.30				-
Taxes Payable (refer to FORM MOR-4)			-				-				-
Wages Payable			-				-				-
Notes Payable			-				-				-
Rent / Leases - Building/Equipment			-				-				-
Secured Debt / Adequate Protection Payments			-				-				-
Professional Fees			2,182,757.37				1,709,000.00				29,750.00
Amounts Due to Insiders*			-				-				10,000.00
Other Post-petition Liabilities (attach schedule)			4,152,292.22				2,750,808.57				1,500,000.00
TOTAL POST-PETITION LIABILITIES			8,919,514.13				4,591,366.87				1,539,750.00
LIABILITIES SUBJECT TO COMPROMISE (Pre-Petition)
Secured Debt			10,226,355.18				10,226,355.18				10,226,355.18
Priority Debt			78,799.43				78,799.43				78,799.43
Unsecured Debt			46,195,648.65				45,960,423.42				46,314,000.71			Includes $32.2 M of equity related liabilities, such as Acquisition/Earnouts, which the debtor believes will be subordinated  pursuant to section 510(b) of the Bankruptcy Code
TOTAL PRE-PETITION LIABILITIES			56,500,803.26				56,265,578.03				56,619,155.32
TOTAL LIABILITIES			65,420,317.39				60,856,944.90				58,158,905.32
OWNERS' EQUITY
Capital Stock			6,089.37				6,089.37				6,089.37
Additional Paid-In Capital			568,067,878.68				568,067,878.68				568,067,878.68
Partners' Capital Account			-				-				-
Owner's Equity Account			-				-				-
Retained Earnings - Pre-Petition			(384,274,882.77	)			(384,274,882.77	)			(384,274,882.77	)
Retained Earnings - Post-petition			(7,371,961.60	)			-				(50,389.54	)
Adjustments to Owner Equity (attach schedule)			-				-				-
Post-petition Contributions  (attach schedule)			-				-				-
NET OWNERS’ EQUITY			176,427,123.68				183,799,085.28				183,748,695.74
TOTAL LIABILITIES AND OWNERS' EQUITY			241,847,441.07				244,656,030.18				241,907,601.06
*"Insider" is defined in 11 U.S.C. Section 101(31).
			(0.00	)
BALANCE SHEET - continuation section
ASSETS		BOOK VALUE AT END OF CURRENT REPORTING MONTH				BOOK VALUE AT END OF PRIOR REPORTING MONTH				BOOK VALUE ON PETITION DATE
Other Current Assets
Investments			639,506.00				639,506.00				639,506.00
Earnout Receivable- ST			1,690,000.00				1,690,000.00				1,690,000.00
Intercompany, net			15,145,599.36				14,862,215.24				15,274,996.39
Total			17,475,105.36				17,191,721.24				17,604,502.39
Other Assets
Goodwill			15,485,347.30				15,485,347.30				15,485,347.30
Investments in Subsidiaries			197,807,230.87				197,807,230.87				197,807,230.87
Earnout Receivable, LT			6,510,000.00				6,510,000.00				6,510,000.00
Note Receivable, LT			1,083,908.65				1,083,908.65				1,083,908.65
Total			220,886,486.82				220,886,486.82				220,886,486.82
LIABILITIES AND OWNER EQUITY			BOOK VALUE AT END OF CURRENT REPORTING MONTH				BOOK VALUE AT END OF PRIOR REPORTING MONTH				BOOK VALUE ON PETITION DATE
Other Post-petition Liabilities
Liability on Escrow in Respect of Plan Sponsor Group Deposit			1,500,000.00				1,500,000.00				1,500,000.00
DIP Loan plus interest			2,652,292.22				1,250,808.57				-
Total			4,152,292.22				2,750,808.57				1,500,000.00
Adjustments to Owner’s Equity
Post-Petition Contributions

 

Restricted Cash:   Cash that is restricted for a specific use and not available to fund operations.

Typically, restricted cash is segregated into a separate account, such as an escrow account.

Includes $1.5m Escrow Account in Respect of Plan Sponsor Group Deposit

 

 

In re	KIT digital, Inc.		Case No.		13-11298 (REG)
	Debtor		Reporting Period:		July 1 2013 to July 31 2013

 

STATUS OF POST-PETITION TAXES

 

The beginning tax liability should be the ending liability from the prior month or, if this is the first report, the

amount should be zero.

 

Attach photocopies of IRS Form 6123 or payment receipt to verify payment or deposit of federal payroll taxes.

 

Attach photocopies of any tax returns filed during the reporting period.

 

Federal

Beginning Tax

Amount Withheld and/or Accrued

Amount Paid

Date Paid

Check # or EFT

Ending Tax

Withholding

FICA-Employee

FICA-Employer

Unemployment

Income

Other:_____________

Total Federal Taxes

State and Local

Withholding

Sales

Excise

Unemployment

Real Property

Personal Property

Other:_____________

Total State and Local

Total Taxes

 

SUMMARY OF UNPAID POST-PETITION DEBTS

 

Attach aged listing of accounts payable.

 

						Number of Days Past Due
		Current				0-30				31-60				61-90				Over 91				Total
Accounts Payable			2,584,464.54																				2,584,464.54
Wages Payable																							-
Taxes Payable																							-
Rent/Leases-Building																							-
Rent/Leases-Equipment																							-
Secured Debt/Adequate Protection Payments																							-
Professional Fees			2,182,757.37																				2,182,757.37
Amounts Due to Insiders																							-
Other:______________			-																				-
Other:______________																							-
Total Post-petition Debts			4,767,221.91				-				-				-				-				4,767,221.91

 

Explain how and when the Debtor intends to pay any past due post-petition debts.

 

 

In re	KIT digital, Inc.		Case No.		13-11298 (REG)
	Debtor		Reporting Period:		July 1 2013 to July 31 2013

 

ACCOUNTS RECEIVABLE RECONCILIATION AND AGING

 

Accounts Receivable Reconciliation		Amount
Total Accounts Receivable at the beginning of the reporting period		none
Plus:  Amounts billed during the period
Less:  Amounts collected during the period
Total Accounts Receivable at the end of the reporting period

 

Accounts Receivable Aging		0-30 Days		31-60 Days		61-90 Days		91+ Days		Total
0 - 30 days old
31 - 60 days old
61 - 90 days old
91+ days old
Total Accounts Receivable
Less:  Bad Debts (Amount considered uncollectible)
Net Accounts Receivable

 

TAXES RECONCILIATION AND AGING

 

Taxes Payable		0-30 Days		31-60 Days		61-90 Days		91+ Days		Total
0 - 30 days old
31 - 60 days old
61 - 90 days old
91+ days old
Total Taxes Payable
Total Accounts Payable

 

 

In re	KIT digital, Inc.		Case No.		13-11298 (REG)
	Debtor		Reporting Period:		July 1 2013 to July 31 2013

 

PAYMENTS TO INSIDERS AND PROFESSIONALS

 

Of the total disbursements shown on the Cash Receipts and Disbursements Report (MOR-1) list the amount paid to insiders (as defined in Section 101(31) (A)-(F) of the U.S. Bankruptcy Code) and to professionals.  For payments to insiders, identify the type of compensation paid (e.g. Salary, Bonus, Commissions, Insurance, Housing Allowance, Travel, Car Allowance, Etc.).  Attach additional sheets if necessary.

 

INSIDERS
NAME		TYPE OF PAYMENT		AMOUNT PAID				TOTAL PAID TO DATE
Fabrice Hamaide		Salary for CFO			17,500.00				87,500.00
Greg Peterson		BOD Fees			30,000.00				60,000.00
Seth Hamot		BOD Fees			30,000.00				60,000.00
William Russell		BOD Fees			30,000.00				60,000.00
TOTAL PAYMENTS TO INSIDERS					107,500.00				267,500.00

 

PROFESSIONALS
NAME		DATE OF COURT ORDER AUTHORIZING PAYMENT		AMOUNT APPROVED				AMOUNT PAID				TOTAL PAID TO DATE				TOTAL INCURRED & UNPAID*
American Legal Claims									-				96,534.00				67,595.34
Husch Blackwell LLP									-				10,000.00				-
Special Counsel									-				32,718.09				9,292.50
Kaufhold Gaskin LLP									-				10,000.00				7,661.70
Simon, Ray & Winikka LLP									31,880.99				125,658.13				34,706.54
Rubin, Hay & Gould, P.C.									-				5,000.00				-
Hamilton Brook Smith Reynold									-				5,600.00				5,560.00
Broadridge ICS									-				13,735.69				841.95
Williams Mullen Clark & Dobbins, P.C.									-				-				6,632.52
Rottenberg Lipman Rich, PC									-				-				6,718.21
Richards, Layton & Finger									-				-				33,196.59
Brown Rudnick LLP									-				-				289,868.53
Beck Redden LLP									-				-				8,580.96
Deutsche Bank									-				-				750,000.00
Cooley LLP		7/5/2013			145,736.52				145,736.52				145,736.52				156,717.99
Bracewell & Giuliani LLP		7/5/2013			663,877.95				663,877.95				663,877.95				1,070,539.01
Norton Rose					-				40,333.51				40,333.51				13,345.23
TOTAL PAYMENTS TO PROFESSIONALS					809,614.47				881,828.97				1,149,193.89				2,461,257.07

 

* INCLUDE ALL FEES INCURRED, BOTH APPROVED AND UNAPPROVED

 

POST-PETITION STATUS OF SECURED NOTES, LEASES PAYABLE

AND ADEQUATE PROTECTION PAYMENTS

 

NAME OF CREDITOR		SCHEDULED   MONTHLY PAYMENT DUE		AMOUNT PAID DURING MONTH				TOTAL UNPAID POST-PETITION
WTI Interest / Fee					-				-
DIP Loan Interest		7/15/2013			13,281.67				-
DIP Loan Interest		8/15/2013							27,749.58
TOTAL PAYMENTS					13,281.67				27,749.58

 

 

 

In re	KIT digital, Inc.		Case No.		13-11298 (REG)
	Debtor		Reporting Period:		July 1 2013 to July 31 2013

 

DEBTOR QUESTIONNAIRE

 

		Must be completed each month.  If the answer to any of the questions is “Yes”, provide a detailed explanation of each item.  Attach additional sheets if necessary.	Yes	No	Comments
1		Have any assets been sold or transferred outside the normal course of business this reporting period?		X
2		Have any funds been disbursed from any account other than a debtor in possession account this reporting period?		X
3		Is the Debtor delinquent in the timely filing of any post-petition tax returns?		X
4		Are workers compensation, general liability or other necessary insurance coverages expired or cancelled, or has the debtor received notice of expiration or cancellation of such policies?	X		DO insurance was renewed on 5-6-13 with payments to be made in June (std.terms)
5		Is the Debtor delinquent in paying any insurance premium payment?		X
6		Have any payments been made on pre-petition liabilities this reporting period?		X
7		Are any post petition receivables (accounts, notes or loans) due from related parties?		X
8		Are any post petition payroll taxes past due?		X
9		Are any post petition State or Federal income taxes past due?		X
10		Are any post petition real estate taxes past due?		X
11		Are any other post petition taxes past due?		X
12		Have any pre-petition taxes been paid during this reporting period?		X
13		Are any amounts owed to post petition creditors delinquent?		X
14		Are any wage payments past due?		X
15		Have any post petition loans been been received by the Debtor from any party?		X
16		Is the Debtor delinquent in paying any U.S. Trustee fees?		X
17		Is the Debtor delinquent with any court ordered payments to attorneys or other professionals?		X
18		Have the owners or shareholders received any compensation outside of the normal course of business?		X