2. PREPARER: State the names address, telephone number and position of the person(s) who actually compiled the information contained in this report.
Nancy Hogan, Xybernaut Corp. 5175 Parkstone Drive, Suite 130, Chantilly, VA 20151 Diane Seroskie, Controller, Xybernaut Corp. 5175 Parkstone Drive, Suite 130, Chantilly, VA 20151
3. NUMBER OF EMPLOYEES paid during this period: 18
4. Have there been any CHANGES IN THE NATURE OF YOUR BUSINESS since the last reporting period? YesNo X . If yes, explain below:
5. Are all BUSINESS LICENSES current? Yes X NoNot Applicable
6. PRE-PETITION ACCOUNTS RECEIVABLE:
Beginning Balance
$
94,678.31
Collected this Period
$
0.00
Ending Balance
$
94,678.31
7. POST -PETITION ACCOUNTS RECEIVABLE:
0-30 Days:$ 135,788.40 31-60 Days:$ 73,866.64 Over 60 Days:$ 31,708.49
If there are anypost-petition Accounts Receivable over 60 days provide Schedule AR giving a listing of such accounts and explain the delinquencies.
Customer
Amount
Comment
Beijing Novog
5,779.90
Prompt payment has been requested
BBA Fiberweb
440.00
Prompt payment has been requested
Caterpillar
875.31
unpaid shipping
CSX
160.00
unpaid shipping
Edison Material
120.00
unpaid shipping o
$14046.60 pd in April, remaining balance expecting payment in
Federal Express
15,836.60
April
Federal Express
5,909.80
$515 pd in April, remaining balance expecting payment in April
MSGI Security
94.90
Bank fee w/o in April
Norwegian
45.75
bank fee – applied to wire payment
Oil-Stop
-6.77
balance after return
Oil-Stop
1,963.00
Prompt payment has been requested
Super Sonic
20.00
Unpaid shipping
Zygo
470.00
Set off against AR’s
8. POST –PETITION ACCOUNTS PAYABLE:
0-30 Days:$ 174,237.63 31-60 Days:$ 28,640.83 Over 60 Days:$ 34,480.09
If there are anypost-petition Accounts Payable over 30 days, provide Schedule AP giving a listing of such accounts and explain the delinquencies.
Payee
Amount
Comment
Allied Office Supplies
43.05
Paid 4/7/06
AT&T
598.5
Paid 4/7/06
AT&T
1,779.31
Paid 4/7/06
AT&T
559.19
Paid 4/7/06
Continental Stock
1,427.92
Paid 4/7/06
Dilenschneider Group
7,813.00
Paid 4/7/06
Donlin,Recano & Co
22,672.13
Paid $17,672.13 on 4/7/06, $5,000 in negotiation
DT Research
11,170.00
Not due per payment terms with vendor
Dun & Bradstreet
39.95
Paid 4/7/06
En Pointe Technologies
3,000.00
Reconciled account with vendor – pd 4/13/06
Eiwa Patent
985.88
Paid 4/7/06
Federal Express
919.03
Paid 4/13/06
First Federal Corp
426.03
Paid 4/7/06
Marc Ginsberg
16.48
Paid 4/7/06
James Ralabate
7,097.00
Disputed
Olivares & CIA, SC
178.00
Paid 4/7/06
Puschmann & Borchert
1,544.45
Paid 4/7/06
Server Vault
2,791.00
Paid 4/7/06
SPS
60.00
Paid 4/7/07
9.
TAXES. Are all taxes being paid to the proper taxing authorities when due? Yes X No. On the attached IRS Form 6123 report all tax deposits made with any financial institution for federal employment taxes. Be sure the form is complete and signed by an authorized employee of the receiving institution or taxing authority. Attach to this report a completed Form 6123 for each deposit made during the reporting period. Also attach copies of the monthly sales tax report, payroll tax report and unemployment tax report with evidence of payment ofboth federal and state taxes.
NOTE: Due to limited funding, the debtor has not been able to retain a tax accountant for preparation of both the 2004 and 2005 federal and state tax returns. The debtor expects to file an extension for 2005. The debtor expects little or no lax liability due to the large net operating loss carryforward and the net losses for both 2004 and 2005.
10. ESCROW ACCOUNTS. Are you utilizing your tax account only for deposit and payment of payroll and sales taxes? Yes X NoIf no, explain:
11. Are all BOOKS AND RECORDS of the debtor(s) being maintained monthly and are all current? Yes X NoExplain:
NOTE: Due to inadequate resources in accounting and lack of review by independent auditors, the Company’s Balance Sheet and Income Statement may require adjustments in the future to conform with generally accepted accounting principles. The Monthly Operating Reports are in a format prescribed by applicable bankruptcy law that is generally consistent, but not in full conformity, with generally accepted accounting principles.
* Binder Numbers have been supplied by AH&T our insurance agent for these policies pending receipt of the new policy numbers from Chubb, the insurance carrier. Subsequent to March 31, 2006 the D&O coverage has been renewed for the coming year and binder number issued.
13. ACTIONS OF DEBTOR. During the last month, did the debtor:
(A) Fail to defend or not oppose any action seeking to dispossess the debtor from contro1 or custody of any asset of the estate? YesNoxExplain:
(B) Maintain such stock inventory, raw materials, insurance, employees and other resources as are necessary to preserve and maintain the going concern value of the assets of the debtor? Yes X NoExplain:
14. TRANSFER OR SALE OF PROPERTY. Did the debtor or any person with control over any of the debtor’s assets transfer, convey or abandon any of the debtor’s assets to another party during the period of this report other than as set forth herein (including sales by creditors)?
Yes.No X Explain:
15. PAYMENT TO SECURED CREDITORS during reporting period: (Attach additional sheets if necessary) N/A
Creditor
Frequency of Payments per
Amount of Each
Next Payment
Post-Petition Pmts. No Made
16.
PAYMENTS TO PROFESSIONALS (Attorneys, Accountants, Real Estate Agents, Auctioneers, Appraisers, etc., during reporting period: (Attach additional sheets, if necessary): NONE
Professional
Service
Amount
17. QUARTERLY U.S. TRUSTEE FEES paid during reporting period:
$ -0-
18. VERIFICATION: I declare under penalty of perjury that the information contained in this monthly operating report (including attached schedules) is true and correct to the best of my knowledge, information and belief.
Dated: April 18, 2006
DEBTOR-IN-POSSESSION
Signature:
/s/ Perry L. Nolen
Xybernaut Corporation
Name/Title:
Perry L. Nolen, CEO/President
5175 Parkstone Drive
Address:
5175 Parkstone Drive
Chantilly, VA 20151
Chantilly, VA 20151
703-480-0480
1
IN THE UNITED STATES BANKRUPTCY COURT FOR THE EASTERN DISTRICT OF VIRGINIA ALEXANDRIA DIVISION
)
)
)
In re:
)
XYBERNAUT CORPORATION,
)
Case No. 05-12801 RGM
Debtor.
)
Chapter 11
Cash Disbursements Summary Report
Calendar Month EndingMarch 31, 2006
Total Disbursements from Operating Account
(See Note 1) __$448,497.28*
Total Disbursements from Payroll Account
(See Note 2) _ $316,525.44*
Total Disbursements from Tax Escrow Account (See Note 3) _____$_0__
Total Disbursements from any other Account
(See Note 4) _____$_0__
Grand Total Disbursements from all Accounts
$
765,022.72
*On March 23, 2006, the Court entered its Interim Order Authorizing Post-Petition Secured Financing Pursuant to Section 364 of the Bankruptcy Code, authorizing,inter alia, the Debtors to obtain post-petition secured financing from East River Capital LLC (“East River”) on an interim basis. The Debtors have obtained funding from East River and made deferred February 2006 payroll and operating payments in March 2006.
(1) Xybernaut has only 1 bank account for Operations and Payroll – amounts listed separately for information purposes only.
Note 1 — Include in this amount all checks written, wire transfers made from, or any other withdrawal from the general operating account. Exclude only transfers to the debtor-in-possession payroll account, the debtor-in-possession account tax escrow account or other debtor in possession account where the disbursements will be listed on this report.
Note 2 — Include in this amount all checks written, wire transfers made from, or any other withdrawal from the payroll account. Exclude only transfers to the debtor-in-possession operating account, the debtor- in-possession tax escrow account or other debtor-in-possession account where the disbursements will be listed on this report.
Note 3 — Include in this amount all checks written, wire transfers made from, or any other withdrawal from the tax escrow account. Exclude only, transfers to the debtor-in-possession operating account, the debtor-in-possession payroll account or other debtor-in-possession account where the disbursements will be listed on this report.
Note 4 — Include in this amount any other disbursements made by the debtor including (but not limited to) cash paid from a petty cash fund or cash register, amounts paid from any other debtor-in-possession account, and amounts paid from the accounts of others on the debtors behalf (for example disbursements made from a law firm’s escrow account as a result of a sale of property.)
2
In re:Xybernaut Corporation Case Number:05-12801
BALANCE SHEET
As of March 31, 2006
ASSETS
Current assets:
Cash In Banks
313,106
Petty Cash
300
Restricted Cash
400,000
Pre Petition Accounts receivable
94,678
Post Petition Accounts receivable
241,363
Less AR — Other, Reserve, Contra
(502,379
)
Inventory
1,933,428
Prepaid and other current assets
732,281
DTDF — Japan
680,099
DTDF — GmbH
12,533,177
DTDF — Gmbh R&D
4,820,238
DTDF — China
286,197
DTDF — XSI
(978,012
)
DTDF — Korea
293,924
DTDF — RESERVE
(18,000,000
)
Total current assets
2,848,400
Fixed assets:
Property and equipment
1,865,461
Less: accumulated depreciation
(1,749,238
)
Total fixed assets
116,223
Other assets:
Investment in subsidiaries
605,584
Patents, net
629,143
Trademarks, net
18,777
Tooling, net
Other
176,170
Total other assets
1,429,674
TOTAL ASSETS
4,394,297
3
Case Number 05-12801 Period EndingMarch 2006 Balance Statement Page 2
LIABILITIES AND EQUITY
Post-Petition Liabilities
Accounts Payable
237,359
Accrued DIP Loan Payable
1,900,000
Accrued restructuring costs
Deferred Product and Warranty Revenue
125,990
Accrued Professional fees
2,199,154
Accrued Purchases
82,858
Salaries/Commissions Payable
174,146
Total Post Petition Liabilities
4,719,507
Pre-Petition Liabilities
Priority Claims
105,810
Secured Debts
Unsecured Debt
1,602,425
Accrued expenses
332,352
Total Pre Petition Liabilities
2,040,587
Total liabilities
6,760,094
Stockholders’ equity:
Common stock
1,946,209
Additional paid-in capital
183,745,591
Cumulative translation adjustment
38,695
Accumulated other comprehensive income (XSI)
37,130
Retained earnings, beginning
(171,411,927
)
Current Retained Earnings — Pre Petition
(10,953,998
)
Current Retained Earnings — Post Petition
(5,767,497
)
Total stockholders’ equity
(2,365,797
)
TOTAL LIABILITIES AND EQUITY
4,394,297
4
IN THE UNITED STATES BANKRUPTCY COURT FOR THE EASTERN DISTRICT OF VIRGINIA ALEXANDRIA DIVISION
)
)
In re:
)
XYBERNAUT CORPORATION,
)
Case No. 05-12801 RGM
Debtor.
)
Chapter 11
MONTHLY OPERATING REPORT INCOME STATEMENT (Business Debtor, Accrual Basis) Calendar MonthMarch 1, 2006 to March 31, 2006 (All figures refer to post-petition transactions)
Current
Year to Date
2006
Revenue:
Sales/Income
215,478
395,832
Cost of Sales
Beginning Inventory
2,476,959
2,551,215
Purchase of Inventory / transfers
122,164
197,623
Less ending Inventory
(2,473,672
)
(2,473,672
)
Direct Labor (Gross Salaries)
Purchased Goods and Services
12,385
54,166
Total Cost of Sales
137,836
329,332
Gross profit
77,642
66,500
Operating Expenses
Officer’s Salaries (Gross)
55,834
159,167
Other Employee Salaries (Gross)
149,088
399,998
Taxes (Payroll: Employer’s Share)
—
Employee Benefits (Insurance, Pension Plan, etc.)
26,873
83,090
Advertising
Bad Debts
Depreciation & Amortization
42,049
129,817
Corporate Meetings / entertainment
2,841
Insurance (Real Estate)
Insurance (Other)
18,772
77,034
Interest (Mortgage, Loans, etc.)
(2,373
)
4,554
Leases (other that Rent)
Outside Services & Contractors
10,108
400,431
Professional Fees (Attorney, Accountant )
487,268
886,670
Rent and leases
8,840
37,805
Repairs and maintenance
—
276
Supplies, dues & subscriptions
80
3,700
Case Number 05-12801 Period EndingMarch 2006 Income Statement Page 2
Taxes (Real Property)
Taxes (Other)
199
199
Telephone
7,099
17,142
Travel
16,608
50,438
Utilities
U.S. Trustee quarterly fee
3,750
Other Operating Expenses
Internet / Website
1,658
7,958
Office expense
2,165
6,194
Postage
Printing
706
Public company expense
8,733
34,681
Equipment
6,537
13,465
Courier/overnight
1,350
2,772
Customer support
1,000
Penalties (1)
Office Move
1,135
18,721
Total Operating Expenses
842,023
2,342,409
Profit/Loss from operations
(764,381
)
(2,275,910
)
Interest income
Net Income (Loss)
(764,381
)
(2,275,910
)
NOTE: Accrual basis reporters must attach Cash Reconciliation Reports or a standard Statement of Sources and Uses of Cash to this Report.
5
In re:Xybernaut Corporation Case Number:05-12801
Cash Reconciliation Report
Xybernaut Corporation
Accrual Basis
Calendar Month Ending
March 31, 2006
Operating/
Payroll Acct
Totals
Beginning Cash Balance (A)
33,543
Net Income
(764,381
)
Non Cash Expenses
Amortization
Depreciation
15,677
Total
15,677
Cash from Operations
(748,704
)
Other Sources (Uses of Cash)
Decrease (Incr) — Accounts Receivable
(114,480
)
Decrease (Incr) — Accounts Receivable pre petition
Amounts shown represent payroll activity for the month of March that occurred in
Payroll
Tax
the combined Operating/Payroll acct.
Account*
Account
(A) Beginning Cash Balance (A)
—
Cash Receipts:
$
328,641.89
—
Transfers from Operating Account
—
—
Transfers from Payroll Account
—
—
Other — ___________________________________
—
—
(B) Total Cash Receipts (B)
—
—
$
328,641.89
$
14,389.65
(C) Cash Available (C= A+B)
—
Cash Disbursements:
$
203,424.76
Gross Payroll for this period $321,278.89
—
—
$
23,867.36
Employee Benefits paid
—
Net Payroll Paid
$
23,867.36
Transfers to Tax Account
—
Taxes deposited or paid during period
$
47,053.31
—
Employee’s share of FICA Tax
—
—
Employer’s share of FICA Tax
$
13,958.93
—
Employee’s Federal Income Tax
—
—
Employee’s State Income Tax
$
2,080.52
—
Unemployment Tax
—
—
Unrecorded Bank Service Charges
—
—
Other: ____________________________
—
—
(D) Total Disbursements (D)
$
328,641.89
—
(E) Ending Cash Balance (E= C-D)
__$0__________
—
(F) Balance per Bank Statement (F)
__$0__________
—
(G) Less Outstanding Checks (G)
—
—
(H) Add Deposits in Transit
—
—
(I) Reconciled Bank Balance {I = (F-G) +H]
_ $0__________
—
*On March 23, 2006, the Court entered its Interim Order Authorizing Post-Petition Secured Financing Pursuant to Section 364 of the Bankruptcy Code, authorizing,inter alia, the Debtors to obtain post-petition secured financing from East River Capital LLC (“East River”) on an interim basis. The Debtors have obtained funding from East River and made deferred February 2006 payroll payments in March 2006.
Ending Cash Balance (E) and Reconciled Bank Balance (I) should equal.
7
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