U.S. Dry Cleaning Services 8K Office of the United States Trustee | FVCCQ 31 Jan 11

OFFICE OF THE UNITED STATES TRUSTEE

CENTRAL DISTRICT OF CALIFORNIA

In Re:			CHAPTER 11 (BUSINESS)
	ENIVEL, INC.
			Case Number:	8:10-bk-12735-RK
			Operating Report Number:	10
		Debtor(s).	For the Month Ending:	12/31/2010

I. CASH RECEIPTS AND DISBURSEMENTS
A. (GENERAL ACCOUNT)

1. TOTAL RECEIPTS PER ALL PRIOR GENERAL ACCOUNT REPORTS				5,886,486.58

2. LESS: TOTAL DISBURSEMENTS PER ALL PRIOR GENERAL ACCOUNT REPORTS				5,846,238.30

3. BEGINNING BALANCE:				40,248.28

4. RECEIPTS DURING CURRENT PERIOD:
	Accounts Receivable - Post-filing		562,192.10
	Accounts Receivable - Pre-filing		0.00
	General Sales		0.00
	Other (Specify)	Transfers between DIP Accts	165,300.00
	Other (Specify)	DIP Financing	0.00

	TOTAL RECEIPTS THIS PERIOD:			727,492.10

5. BALANCE:				767,740.38

6. LESS: TOTAL DISBURSEMENTS DURING CURRENT PERIOD
	Transfers to Other DIP Accounts (from page 2)		407,050.00
	Disbursements (from page 2)		358,550.98

	TOTAL DISBURSEMENTS THIS PERIOD:			765,600.98

7. ENDING BALANCE:				2,139.40

8.	General Account Number(s):		BOH: 0007-050151, 0028-039131
			FHB: 46-019156

	Depository Name & Location:		Bank of Hawaii, 1617 Dillingham Blvd
			Honolulu, HI 96817
			First Hawaiian Bank, 120 Sand Island Access Rd
			Honolulu, HI 96819

Page 1 of 17

TOTAL DISBURSEMENTS FROM GENERAL ACCOUNT FOR CURRENT PERIOD

Date mm/dd/yyyy	Check Number	Payee	Purpose	Amount Transferred	Amount Disbursed	Total Disbursements
December 2010		See Exhibit I for details	December disbursements		358,550.98	358,550.98
December 2010		See Exhibit I for details	December Intra Debtor transfers	372,400.00		372,400.00
December 2010		See Exhibit I for details	December Inter Debtor transfers	34,650.00		34,650.00
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		TOTAL DISBURSEMENTS THIS PERIOD (FN1):		407,050.00	358,550.98	$765,600.98

(FN1) - Transfers reported on this schedule represent two different types of non-disbursement activity. Intra Debtor transfers are transfers between bank accounts with the same Federal Identification Number. Inter Debtor transfers are transfers to bank accounts held by other Debtors within the same bankruptcy proceeding.

Page 2 of 17

GENERAL ACCOUNT

BANK RECONCILIATION

	Bank Statement Date:	12/31/2010	Balance on Statement:	18,972.94

Plus deposits in transit (a):
		Deposit Date	Deposit Amount
	Deposits from BOH Acc #007-050151 are set
	forth on Exhibit II and total $2,730.09		2,730.09	See Exhibit II
	Deposits from FHB Acc #46-019156 are set
	forth on Exhibit III and total $15,347.04		15,347.04	See Exhibit III



TOTAL DEPOSITS IN TRANSIT				18,077.13

Less Outstanding Checks (a):
	Check Number	Check Date	Check Amount
	Checks from BOH Acc #007-050151 are set
	forth on Exhibit IV and total $17,588.17		17,588.17	See Exhibit IV
	Checks from FHB Acc #46-019156 are set
	forth on Exhibit V and total $17,322.50		17,322.50	See Exhibit V












TOTAL OUTSTANDING CHECKS:				34,910.67

Bank statement Adjustments:
Explanation of Adjustments-



ADJUSTED BANK BALANCE:				2,139.40

Page 3 of 17

I. CASH RECEIPTS AND DISBURSEMENTS

B. (PAYROLL ACCOUNT)

1. TOTAL RECEIPTS PER ALL PRIOR PAYROLL ACCOUNT REPORTS		1,640,494.93

2. LESS: TOTAL DISBURSEMENTS PER ALL PRIOR PAYROLL ACCOUNT REPORTS		1,640,355.80

3. BEGINNING BALANCE:		139.13

4. RECEIPTS DURING CURRENT PERIOD:
(Transferred from General Account)		207,100.00

5. BALANCE:		207,239.13

6. LESS: TOTAL DISBURSEMENTS DURING CURRENT PERIOD
TOTAL DISBURSEMENTS THIS PERIOD:		207,073.61

7. ENDING BALANCE: (FN1)		165.52

8. PAYROLL Account Number(s):	01-198254

Depository Name & Location:	First Hawaiian Bank
	120 Sand Island Access Rd
	Honolulu, HI 96819

Page 4 of 17

TOTAL DISBURSEMENTS FROM PAYROLL ACCOUNT FOR CURRENT PERIOD

Date mm/dd/yyyy	Check Number	Payee	Purpose	Amount
December 2010		See Exhibit VI for details	December Payroll	207,073.61








































			TOTAL DISBURSEMENTS THIS PERIOD:	207,073.61

Page 5 of 17

PAYROLL ACCOUNT

BANK RECONCILIATION

	Bank Statement Date:	12/31/2010	Balance on Statement:	14,740.66

Plus deposits in transit (a):
		Deposit Date	Deposit Amount






TOTAL DEPOSITS IN TRANSIT				0.00

Less Outstanding Checks (a):
	Check Number	Check Date	Check Amount
	Checks from FHB Acc #01-198254 are set
	forth on Exhibit VII and total $14,575.14		14,575.14	See Exhibit VII


















TOTAL OUTSTANDING CHECKS:				14,575.14

Bank statement Adjustments:
Explanation of Adjustments-



ADJUSTED BANK BALANCE:				165.52

Page 6 of 17

I. CASH RECEIPTS AND DISBURSEMENTS

C. (TAX ACCOUNT)

1. TOTAL RECEIPTS PER ALL PRIOR TAX ACCOUNT REPORTS		0.00

2. LESS: TOTAL DISBURSEMENTS PER ALL PRIOR TAX ACCOUNT REPORTS

3. BEGINNING BALANCE:		0.00

4. RECEIPTS DURING CURRENT PERIOD:		0.00
(Transferred from General Account)

5. BALANCE:		0.00

6. LESS: TOTAL DISBURSEMENTS DURING CURRENT PERIOD
TOTAL DISBURSEMENTS THIS PERIOD:		0.00

7. ENDING BALANCE:		0.00

8. TAX Account Number(s):	NONE

Depository Name & Location:

Page 7 of 17

TOTAL DISBURSEMENTS FROM TAX ACCOUNT FOR CURRENT PERIOD

Date mm/dd/yyyy	Check Number	Payee	Purpose	Amount
N/A




































			TOTAL DISBURSEMENTS THIS PERIOD:	0.00

Page 8 of 17

TAX ACCOUNT

BANK RECONCILIATION

	Bank Statement Date:	N/A	Balance on Statement:	0.00

Plus deposits in transit (a):
		Deposit Date	Deposit Amount
		N/A





TOTAL DEPOSITS IN TRANSIT				0.00

Less Outstanding Checks (a):
	Check Number	Check Date	Check Amount
		N/A



















TOTAL OUTSTANDING CHECKS:				0.00

Bank statement Adjustments:
Explanation of Adjustments-



ADJUSTED BANK BALANCE:				0.00

Page 9 of 17

I. D SUMMARY SCHEDULE OF CASH

ENDING BALANCES FOR THE PERIOD:

		General Account:	2,139.40
		Payroll Account:	165.52
		Tax Account:	0.00
Other Accounts:	NONE		0.00	��
			0.00
			0.00
Other Monies:	NONE		0.00
	Petty Cash and Cash on Hand (from below):		5,515.00

TOTAL CASH AVAILABLE:				7,819.92

Petty Cash Transactions (Includes cash maintained in registers at stores, office petty cash and petty cash for gas for delivery vehicles):

Date	Purpose	Amount
3/31/2010	Beginning balance	6,787.67
5/31/2010	Three months of petty cash disbursements at main office	(590.00)
	and 15 stores on supplies, fuel, minor repairs and small cash
	transactions. In the past, petty cash was reconciled every 3
	to 4 months but is now done monthly. The Debtor replenishes
	the balances at the end of each month. Petty cash expense are
	included in the profit and loss statement. Balance $6,197.67
9/30/2010	Prior to 9/30/10, the Debtor reconciled petty cash sporadically.	(12.67)
	When petty cash was reconciled at the end of September, it was
	off by $12.67. The balance on September 30, 2010 was $6,185.
	All disbursements are reflected on the Debtor's profit and loss
	statement when amounts are replenished.
10/31/2010	$4,025-cash registers at 15 stores, $600-petty cash at office &	0.00
	$1,560-petty cash for gas for delivery vehicles. Balance $6,185.00
12/31/2010	$520 from closed store (918) and $120 gas petty cash expense	(670.00)




TOTAL PETTY CASH TRANSACTIONS:			5,515.00

Page 10 of 17

II. STATUS OF PAYMENTS TO SECURED CREDITORS, LESSORS

AND OTHER PARTIES TO EXECUTORY CONTRACTS

Creditor, Lessor, Etc.	Frequency of Payments (Mo/Qtr)	Amount of Payment	Post-Petition payments not made (Number)	Total Due
Setal and related entities (secured creditors)(FN1)	N/A. Debt matured pre-petition	N/A	N/A
De Lage Landen-Equip Lease	Monthly	277.00	0	0.00
De Lage Landen-Equip Lease	Monthly	277.00	0	0.00
Axis-Equipment Lease	Monthly	642.00	0	0.00
Direct Capital- Equip Lease	Monthly	1,275.00	0	0.00
First Hawaiian Bank-Secured Note (FN2)	Monthly	6,655.05	0	0.00
Rhoton Family Trust dated 5/8/00	N/A. Debt matured pre-petition	N/A	N/A
Kaimana Ventures Ltd. - Landlord	Monthly	1,751.83	0	0.00
Bishop Square Associates - Landlord	Monthly	1,238.00	0	0.00
Duesenberg Investment Co. - Landlord	Monthly	1,157.00	0	0.00
Pacific Guardian Center - Landlord	Monthly	390.19	0	0.00
Tanaka Properties, LLC - Landlord - HI Plant	Monthly	30,286.17	0	0.00
			TOTAL DUE:	11,811.10

**See attached schedule for remaining leases

(FN1) - All of the Debtors are jointly and severally liable for Setal debt, which for convenience is listed in detail on the Monthly report for U.S. Dry Cleaning Services

(FN2) - This is a secured loan and the treatment of this loan will be provided for in the plan of reorganization.

III. TAX LIABILITIES

FOR THE REPORTING PERIOD:

		Gross Sales Subject to Sales Tax:		643,051.56
		Total Wages Paid:		269,239.07

		Total Post-Petition Amounts Owing	Amount Delinquent	Date Delinquent Amount Due
(FN3)	Federal Withholding	0.00	0.00
(FN3)	State Withholding	0.00	0.00
(FN3)	FICA- Employer's Share	0.00	0.00
(FN3)	FICA- Employee's Share	0.00	0.00
(FN3)	Federal Unemployment	0.00	0.00
	Sales and Use	8,625.96	0.00
	Real Property	0.00	0.00
Other:	State Unemployment (FN3)	0.00	0.00
	TOTAL:	8,625.96	0.00

(FN3) - The Debtor uses a payroll service that makes pre-funded payroll tax payments directly to the taxing authorities

Page 11 of 17

II. STATUS OF PAYMENTS TO SECURED CREDITORS, LESSORS

AND OTHER PARTIES TO EXECUTORY CONTRACTS

(CONTINUED)

Creditor, Lessor, Etc.	Frequency of Payments (Mo/Qtr)	Amount of Payment	Post-Petition payments not made (Number)	Total Due
Trustees of the Estate of Bernice Pauahi Bishop	Monthly	2,381.60	0	0.00
Manoa Marketplace, LLC	Monthly	2,554.00	0	0.00
Kahala Center Company	Monthly	3,622.00	0	0.00
WCSC, LLC	Monthly	1,806.00	0	0.00
TIAA Realty, Inc.	Monthly	2,282.00	0	0.00
Fort Street Investment Corp.	Monthly	4,080.00	0	0.00
Kahala Center Company	Monthly	8,133.34	0	0.00
Twenty First Technologies Corp.	Monthly	3,178.00	0	0.00
Victoria Ward, Limited	Monthly	6,264.00	0	0.00
Manana CDIT, LLC	Monthly	6,319.00	0	0.00
Vision Windward 1, LLC-Rejected Lease (FN1)	Monthly	4,537.00	3	9,534.41
Waimalu Plaza Co.-Rejected Lease (FN1)	Monthly	2,159.00	3	2,276.69

(FN1) - These leases were rejected by the Debtor at the end of May 2010. The Debtor owes lease administrative payments for March, April and May 2010. The remaining unpaid balances are shown on the schedule.

Page 12 of 17

IV. AGING OF ACCOUNTS PAYABLE AND RECEIVABLE

			Accounts Payable	Accounts Receivable
			Post-Petition	Pre-Petition	Post-Petition
		30 days or less	54,748.85	0.00	353,623.78
		31 - 60 days	(5,966.30)	0.00	51,175.62
		61 - 90 days	6,539.48	0.00	9,199.75
		91 - 120 days	(317.47)	0.00	2,375.88
		Over 120 days	74,111.73	0.00	91,616.75
		TOTAL:	129,116.29	0.00	507,991.78

V. INSURANCE COVERAGE

		Name of Carrier	Amount of Coverage	Policy Expiration Date	Premium Paid Through (Date)
Workers Compensation		Argo	Compulsory	6/1/2011	6/1/2011	*
	Umbrella	Evanston	4,000,000	10/30/2011	12/31/2010
	Property	Lloyd's of London	3,592,500	10/30/2011	12/31/2010
	Liability	Essex	1,000,000	10/30/2011	12/31/2010
Others:	Health (FN1)	HMAA	Varies	Mo. to Mo.	12/31/2010
	Auto	Island Insurance	1,000,000	9/30/2011	9/30/2011
* The premiums have been paid through the policy term. Premium financing payments are due in 4 monthly payments of $7,499.
VI. UNITED STATES TRUSTEE QUARTERLY FEES
(TOTAL PAYMENTS)
	(FN2)
Quarterly Period Ending (Date)	Total Disbursements	Quarterly Fees	Date Paid	Amount Paid	Quarterly Fees Still Owing
3/31/2010	346,459.41	4,875.00	5/11/10	4,875.00	0.00
6/30/2010	1,755,913.30	6,500.00	7/30/10	9,750.00	(3,250.00)
9/30/2010	1,476,449.21	6,500.00	10/28/10	6,500.00	0.00
		Additional payment - 11/23/10		3,250.00	(3,250.00)
12/31/2010	1,674,532.12	6,500.00	Previous overpayments applied		6,500.00







		24,375.00		24,375.00	0.00

(FN1) - The health insurance is paid current at the beginning of each month.

(FN2) - Pursuant to discussion with the Office of the United States Trustee, the Total Disbursements amounts for the previous quarters have been restated to reflect only disbursements from the Debtors' bankruptcy estates (and not inter and intra company transfers). Inter and intra company transfers have been eliminated to show only true disbursements leaving the bankruptcy estates. The relating Quarterly Fees have been restated, accordingly.

Page 13 of 17

VII SCHEDULE OF COMPENSATION PAID TO INSIDERS

Name of Insider	Date of Order Authorizing Compensation	Authorized Gross Compensation	Gross Compensation Paid During the Month
Michael Drace	July 2010	Weekly compensation $3,800.00	19,450.00
Michael Drace	July 2010	Monthly auto allowance	450.00














VIII. SCHEDULE OF OTHER AMOUNTS PAID TO INSIDERS

Name of Insider	Date of Order Authorizing Compensation	Description	Amount Paid During the Month
NONE

Page 14 of 17

IX. PROFIT AND LOSS STATEMENT

(ACCRUAL BASIS ONLY)

	Current Month	Cumulative Post-Petition
Sales/Revenue:
Gross Sales/Revenue	643,051.56	5,934,144.79
Less: Returns/Discounts	115,497.43	996,345.03
Net Sales/Revenue	527,554.13	4,937,799.76

Cost of Goods Sold:
Beginning Inventory at cost	0.00	0.00
Purchases	32,950.15	252,302.33
Less: Ending Inventory at cost	0.00	0.00
Cost of Goods Sold (COGS)	32,950.15	252,302.33

Gross Profit	494,603.98	4,685,497.43

Other Operating Income (Itemize)	0.00	0.00

Operating Expenses:
Payroll - Insiders	19,450.00	109,100.00
Payroll - Other Employees	249,789.07	2,399,870.32
Payroll Taxes	29,097.58	263,132.80
Other Taxes (Itemize)	0.00	1,402.12
Depreciation and Amortization	16,471.98	176,127.08
Rent Expense - Real Property	72,226.19	749,335.08
Lease Expense - Personal Property	0.00	30,297.28
Insurance	5,928.08	66,123.58
Real Property Taxes	0.00	0.00
Telephone and Utilities	48,427.24	365,992.66
Repairs and Maintenance	6,366.67	37,780.98
Travel and Entertainment (Itemize)	203.13	2,960.47
Miscellaneous Operating Expenses (Itemize)	44,948.37	495,307.74
Total Operating Expenses	492,908.31	4,697,430.11

Net Gain/(Loss) from Operations	1,695.67	(11,932.68)

Non-Operating Income:
Interest Income	20.63	949.69
Net Gain on Sale of Assets (Itemize)	0.00	0.00
Other (Itemize)	2,968.08	22,181.20
Total Non-Operating income	2,988.71	23,130.89

Non-Operating Expenses:
Interest Expense	2,975.60	35,317.33
Legal and Professional (Itemize)	0.00	27,035.74
Other (Itemize)	52,980.00	256,577.46
Total Non-Operating Expenses	55,955.60	318,930.53

NET INCOME/(LOSS)	(51,271.22)	(307,732.32)

Page 15 of 17

X. BALANCE SHEET

(ACCRUAL BASIS ONLY)

	Current Month End
ASSETS
Current Assets:
Unrestricted Cash	7,819.92
Restricted Cash	0.00
Accounts Receivable	507,991.78
Inventory	0.00
Notes Receivable	0.00
Prepaid Expenses	94,061.49
Other (Itemize)	107,011.50
Total Current Assets		716,884.69

Property, Plant, and Equipment	5,465,283.05
Accumulated Depreciation/Depletion	(4,029,479.06)
Net Property, Plant, and Equipment		1,435,803.99

Other Assets (Net of Amortization):
Due from Insiders	0.00
Other (Itemize)	4,597,649.48
Total Other Assets		4,597,649.48

TOTAL ASSETS		6,750,338.16

LIABILITIES
Post-petition Liabilities:
Accounts Payable	129,116.29
Taxes Payable	8,625.96
Notes Payable	0.00
Professional fees	0.00
Secured Debt	0.00
Other (Itemize)	365,404.26
Total Post-petition Liabilities		503,146.51

Pre-petition Liabilities:
Secured Liabilities	472,841.31
Priority Liabilities	275,341.65
Unsecured Liabilities	623,957.76
Other (Itemize)	583,817.82
Total Pre-petition Liabilities		1,955,958.54

TOTAL LIABILITIES		2,459,105.05

EQUITY:
Pre-petition Owners’ Equity	4,598,965.43
Post-petition Profit/(Loss)	(307,732.32)
Direct Charges to Equity	0.00
TOTAL EQUITY		4,291,233.11

TOTAL LIABILITIES & EQUITY		6,750,338.16

Page 16 of 17

XI. QUESTIONNAIRE

		No	Yes
1.	Has the debtor-in-possession made any payments on its pre-petition unsecured debt, except as have been authorized by the court? If "Yes", explain below:	X
	N/A

		No	Yes
2.	Has the debtor-in-possession during this reporting period provided compensation or remuneration to any officers, directors, principals, or other insiders without appropriate authorization? If "Yes", explain below:	X
	N/A

3.	State what progress was made during the reporting period toward filing a plan of reorganization
	The Debtors and their management finalized the Debtors' Chapter 11 plan of reorganization and disclosure statement in December. The Debtors filed their plan and disclosure statement on January 3, 2011. A hearing on approval of the disclosure statement is set for February 9, 2011.

4.	Describe potential future developments which may have a significant impact on the case:
	There is a pending motion to appoint a chapter 11 trustee. If that motion is granted, it would significantly impact this case. The current hearing has been continued to April 2011. The Debtor (and its related entities) are in the process of attempting to raise exit financing with their investment banker, Provident Group.

5.	Attach copies of all Orders granting relief from the automatic stay that were entered during the reporting period.
	N/A

		No	Yes
6.	Did you receive any exempt income this month, which is not set forth in the operating report? If "Yes", please set forth the amounts and sources of the income below.	X
	N/A


I,	Robert Lee, Chief Executive Officer
	declare under penalty of perjury that I have fully read and understood the foregoing debtor-in-possession operating report and that the information contained herein is true and complete to the best of my knowledge.

1-20-11
Date				Principal for debtor-in-possession

Page 17 of 17

U.S. Dry Cleaning Services (FVCCQ) Inactive 8-KOffice of the United States Trustee