EX-99.1 2 exh99_1.htm EXHIBIT 99.1 exh99_1.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 January 1, 2012  TO January 31, 2012

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 REPORTING PERIOD BEGINNING January 1, 2012 and ending January 31, 2012
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
 $ 149,701.97
(a)
$24,201.83
(b)
2.  RECEIPTS:
        
 
A. Cash Sales
    
                             -
  
 
     Minus:  Cash Refunds
    
                             -
  
 
     Net Cash Sales
    
                             -
  
 
B.  Accounts Receivable
    
              207,739.09
  
 
C.  Other Receipts (See MOR-3)
    
              763,102.70
  
 
(If you receive rental income,
    
                             -
  
 
    you must attach a rent roll.)
        
3.  TOTAL RECEIPTS (Lines 2A+2B+2C)
    
            970,841.79
  
4.
TOTAL FUNDS AVAILABLE FOR OPERATIONS (Line 1 + Line 3)
 $ 149,701.97
  
 $        995,043.62
  
5.  DISBURSEMENTS
        
 
A. Advertising
    
                             -
  
 
B.  Bank Charges
    
                  1,775.00
  
 
C.  Contract Labor
           2,000.00
  
                62,034.85
  
 
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
224.84
  
                  1,647.33
  
 
J.   Payroll - Net (See Attachment 4B)
    
              167,780.49
  
 
K.  Professional Fees (Accounting & Legal)
4,597.68
  
              195,272.74
  
 
L.   Rent
              750.00
  
                53,375.66
  
 
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
91.54
  
                  9,220.91
  
 
S.   Travel & Entertainment
    
                  4,185.62
  
 
Y.  U.S. Trustee Quarterly Fees
    
                  5,525.00
  
 
U.  Utilities
              263.12
  
                  7,098.19
  
 
V.  Vehicle Expenses
    
                             -
  
 
W.  Other Operating Expenses (See MOR-3)
    
                25,896.85
  
6.  TOTAL DISBURSEMENTS (Sum of 5A thru W)
         7,927.18
  
              853,268.83
  
7.  ENDING BALANCE (Line 4 Minus Line 6)
 $    141,774.79
(c)
 $           141,774.79
(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 31st day of January, 2012.
/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
    $ 0.00               
     $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.
                     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

FOR THE REPORTING PERIOD BEGINNING January 1, 2012 and ending January  31, 2012
 
 
  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                                                                   $                               171,144.17 (a)
    PLUS: Current Month New Billings
    MINUS: Collection During the Month                                              $                                                    (b)
                   PLUS/MINUS: Adjustments or Writeoffs
                     $                                                    *
End of Month Balance                                                                             $                                171,144.17 (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)
  
370,503.85
  
171,144.17
                         


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

 
Receivable
      Customer
       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

FOR THE REPORTING PERIOD BEGINNING January 1, 2012 and ending January 31, 2012

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                          Days
 Incurred
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).
                                                                                                        
 
 Secured
Creditor/
Lessor
  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

FOR THE REPORTING PERIOD BEGINNING January 1, 2012 and ending January 31, 2012

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%*

* 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

FOR THE REPORTING PERIOD BEGINNING January 1, 2012 and ending January 31, 2012

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                                                             $                          141,739.55
Plus Total Amount of Outstanding Deposits                                              $                                                                               
 
Minus Total Amount of Outstanding Checks and other debits                $                             869.09 *
 
Minus Service Charges                                                                                    $
Ending Balance per Check Register                                                               $                          140,870.46**(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

FOR THE REPORTING PERIOD BEGINNING January 1, 2012 and ending January 31, 2012

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        ACCOUNT CLOSED

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.

                                  CHECK
DATE                                       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

FOR THE REPORTING PERIOD BEGINNING January 1, 2012 and ending January 31, 2012

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.

 
                                                                                                                        
 
 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

FOR THE REPORTING PERIOD BEGINNING January 1, 2012 and ending January 31, 2012

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

FOR THE REPORTING PERIOD BEGINNING January 1, 2012 and ending January 31, 2012

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 Owen continues to provide services as the Debtor winds down at the hourly rate of $100.00.  These services will not exceed $2,000 per month.

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.
 
 

 
 

 
 

 
 

 
 
MOR-17 
 
 

 
 
DIGITAL SYSTEMS BALANCE SHEET 1.31.12
  
31-Jan-12
ASSETS
          
 
Current Assets
        
   
Checking/Savings
        
     
Cash Accounts
      
       
0-10070 · FNB Olathe Checking 013-960-2
140,972.00
     
Total Cash Accounts
    
140,972.00
     
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
   
Total Checking/Savings
    
140,972.00
   
Accounts Receivable
      
     
Accounts Receivable
    
       
0-11000 · Accounts Receivable - Trade
247,880.90
       
0-11010 · Accounts Receivable - Dealers
23,719.75
       
0-11100 · Allowance for Doubtful Accounts
-100,456.68
     
Total Accounts Receivable
  
171,143.97
   
Total Accounts Receivable
    
171,143.97
   
Other Current Assets
      
     
Prepaid Expenses
      
       
0-13000 · Prepaid Expenses
7,650.00
       
0-13010 · Prepaid Insurance
-29
     
Total Prepaid Expenses
  
7,621.00
     
Other Current Assets
    
       
0-14000 · Deposits
  
-1,000.00
     
Total Other Current Assets
  
-1,000.00
   
Total Other Current Assets
    
6,621.00
 
Total Current Assets
      
318,736.97
TOTAL ASSETS
        
318,736.97
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
    
-39,757,970.20
   
Net Income
      
-9,475.64
 
Total Equity
      
-959,034.52
TOTAL LIABILITIES & EQUITY
    
318,736.97


 
 
 
 
 

DIGITAL SYSTEMS, INC PROFIT & LOSS 1.31.12
12-Jan
 
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
  
       
Legal Fees
    
         
2-60430 · Legal Expense
4,587.68
  
       
Total Legal Fees
4,587.68
  
       
0-60470 · Outside Services
    
         
2-60470 · Outside Services - Admin
1,000.00
  
       
Total 0-60470 · Outside Services
1,000.00
  
       
0-60400 · Professional & Contract Service - Other
650
  
     
Total 0-60400 · Professional & Contract Service
8,237.68
  
     
0-60500 · Facilities & Maintenance Costs
    
       
2-60550 · Rent Building
750
  
       
2-60590 · Utility Expense
263.12
  
     
Total 0-60500 · Facilities & Maintenance Costs
1,013.12
  
     
0-61600 · Office Supplies and Expenses
    
       
0-61620 · Office Supplies
    
         
2-61620 · Office Supplies - Admin
32.84
  
       
Total 0-61620 · Office Supplies
32.84
  
       
0-61600 · Office Supplies and Expenses - Other
192
  
     
Total 0-61600 · Office Supplies and Expenses
224.84
  
   
Total Expense
  
9,475.64
  
 
Net Ordinary Income
  -9,475.64
 
Net Income
    -9,475.64
 

 
 
 

 3:22 PM
 
02/14/12

 
 ICOP DIGITAL, INC.      
 Reconciliation Summary      
 0-10070 - FNB Olathe Checking 013-960-2, Period Ending 01/31/2012      
       
    Jan 31,12  
 Beginning Balance     150,666.73  
     Cleared Transactions        
         Checks and Payments - 9 items     -8,927.18  
     Total Cleared Transactions     -8,927.18  
         
 Cleared Balance     141,739.55  
     Uncleared Transactions        
         Checks and Payments - 4 items     -869.09  
     Total Uncleared Transactions     -869.09  
         
 Register Balance as of 01/31/2012     140,870.46  
     New Transactions        
         Checks and Payments - 2 items     -2,750.00  
     Total New Transactions     -2,750.00  
 Ending Balance     138,120.46  
 
 
 
 
 
 

 
 

 
 
 
MEMBER FDIC
 

 
 
STATEMENT DATE
01/31/12
ACCOUNT NUMBER
5900139602
014890 0.6500 AT 0.374    TR00052
£ DIGITAL SYSTEMS INC S DEBTOR IN POSSESSION OPERATING ACCOUNT 15621 W 87TH ST PKWY STE 355 LENEXA KS 66219-1435
7         CYCLE-030 *** CHECKING 1 COMMERCIAL DDA KC
PREVIOUS STATEMENT BALANCE AS OF 12/31/11                                                                                                                      150,666.73
PLUS 0 DEPOSITS AND OTHER CREDITS                                                                                                             .00
LESS 9 CHECKS AND OTHER DEBITS                                                                                                             8,927.18
CURRENT STATEMENT BALANCE AS OF 01/31/12                                                                                                                      141,739.55
NUMBER OF DAYS IN THIS STATEMENT PERIOD 31
 *** CHECK TRANSACTIONS ***
SERIAL DATE AMOUNT SERIAL DATE                                                                                                                           AMOUNT
1020 01/09 750.00 1024 01/19                                                                                                            76.58
1021 01/06 2,000.00 1025 01/18                                                                                                           192.00
1022 01/12 4,597.68 1026 01/19                                                                                                           186.54
01/18           32.84
IF YOU HAVE QUESTIONS CONCERNING THIS STATEMENT, PLEASE CALL OUR CUSTOMER SERVICE CENTER AT (800)438-0378. THANK YOU FOR ALLOWING ENTERPRISE TO SERVE YOUR BANKING NEEDS.
MEMBER FDIC
1025                   01/18/12                        $192.00
1 BALANCE BY DATE *** 12/31 150,666.73 01/05 150,575.19 01/06 148,575.19 01/09 147,825.19 01/12 143,227.51 01/18 143,002.67 01/19 142,739.55 01/24 141,739.55
IF YOU HAVE QUESTIONS CONCERNING THIS STATEMENT, PLEASE CALL OUR CUSTOMER SERVICE CENTER AT (800)438-0378. THANK YOU FOR ALLOWING ENTERPRISE TO SERVE YOUR BANKING NEEDS.
 

 
 
 
 
 

 
 

Account:5900139602
Enterprise Bank & Trust
Period 1/1/2012 To 1/31/2012  1020 01/09/12 $750.00 1026 01/19/12 $186.54 1021 01/06/12 $2000.00 1022 01/12/12 $4597.68 1023 01/18/12 $32.84 1024 01/19/12 $76.58 1025 01/18/12 $192.00