EXHIBIT 99
UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF PENNSYLVANIA
In re: Quad Systems Corporation Case No. 00-35667
------------------------ Reporting Period: 9/01/01-9/30/01
Debtor
MONTHLY OPERATING REPORT
File with Court and submit copy to United States Trustee within
20 days after end of month
Submit copy of report to any official committee appointed in this case
Document Explanation
REQUIRED DOCUMENTS Form No. Attached Attached
-------------------------------------------------------------------------------------------------------------------------------
Schedule of Cash Receipts and Disbursements MOR-1 X
Bank Reconciliation (or copies of debtor's bank reconciliations) MOR-1 (CONT) X
Copies of bank statements X
Cash disbursement journals X
Statement of Operations MOR-2 X
Balance Sheet MOR-3 X
Status of Postpetition Taxes MOR-4 X
Copies of IRS Form 6123 or payment receipt X
Copies of tax returns filed during reporting period X
Summary of Unpaid Postpetition Debts MOR-4 X
Listing of aged accounts payable X
Accounts Receivable Reconciliation and Aging MOR-5 X
Debtor Questionnaire MOR-5 X
I declare under penalty of perjury (28 U.S.C. Section 1746) that this report and
the documents attached are true and correct to the best of my knowledge and
belief.
------------------------------------- -------------------------------
Signature of Debtor Date
------------------------------------- -------------------------------
Signature of Joint Debtor Date
/s/ Thomas E. Keogh October 16, 2001
------------------------------------- -------------------------------
Signature of Authorized Individual* Date
------------------------------------- -------------------------------
Printed Name of Authorized Individual Title of Authorized Individual
*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.
FORM MOR
(9/99)
EXHIBIT 99
UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF PENNSYLVANIA
In re: Quad Systems Corporation Case No. 00-35667
------------------------ Reporting Period: 9/01/01-9/30/01
Debtor
SCHEDULE OF CASH RECEIPTS AND DISBURSEMENTS
Amounts reported should be per the debtor's books, 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. The amounts reportedin the "PROJECTED"
columns should be taken from the SMALL BUSINESS INITIAL REPORT (FORM IR-1).
Attach copies of the bank statements and the cash disbursement journal. The
total disbursements listed in the disbursement journal must equal the total
disbursements reported on this page. A bank reconciliation must be attached for
each account. [See MOR-1 (CON'T)]
CUMULATIVE FILING
BANK ACCOUNTS CURRENT MONTH TO DATE
OPER PAYROLL Canada P/R Lockbox ACTUAL PROJECTED ACTUAL PROJECTED
-----------------------------------------------------------------------------------------------------------------------------------
Cash Beginning of Month 36,254 27,159 -- -- 63,413 277,400 977,761 977,761
RECEIPTS
Cash Sales -- --
Accounts Receivable 466,191 -- -- 466,191 -- 18,270,707 13,473,000
Loans and Advances -- -- -- -- -- 11,870,000 15,544,000
Sale of Assets -- -- -- -- -- 3,994,300 --
Other (Attach List) 13,081 -- -- 13,081 -- 1,735,702 --
Transfers (From DIP Accts) -- 15,000 -- -- 15,000 -- 5,978,815 --
-----------------------------------------------------------------------------------------------------------------------------------
TOTAL RECEIPTS 479,272 15,000 -- -- 494,272 -- 41,849,524 29,017,000
-----------------------------------------------------------------------------------------------------------------------------------
DISBURSEMENTS
Net Payroll 19,454 25,222 -- -- 44,676 -- 4,852,906 5,014,000
Payroll Taxes 1,602 11,574 -- -- 13,176 -- 1,171,508 1,089,000
Sales, Use & Other Taxes 339 -- -- 339 -- 141,803 204,000
Inventory Purchases 227,891 -- -- 980 -- 3,673,496 4,835,000
Secured Rental/Leases 3,638 -- -- 1,506 -- 476,473 651,000
Insurance -- -- -- -- 342,000 667,000
Administrative 13,831 (141) -- -- 13,690 -- 518,627 1,254,000
Selling 2,109 -- -- 2,109 -- 638,279 831,000
Other (Attach List) 432,996 -- -- 432,996 -- 24,996,192 17,118,000
Owner Draw* -- --
Transfers (To DIP Accts) -- -- -- -- -- 5,460,792 1,467,000
Professional Fees -- -- -- 50,000 50,000
U.S. Trustee Quarterly Fees -- -- -- -- -- 24,000 24,000
Court Costs -- --
-----------------------------------------------------------------------------------------------------------------------------------
TOTAL DISBURSEMENTS 472,817 36,655 -- -- 509,472 -- 43,091,946 33,204,000
-----------------------------------------------------------------------------------------------------------------------------------
NET CASH FLOW 6,455 (21,655) -- -- (15,200) -- (1,736,694) (4,187,000)
-----------------------------------------------------------------------------------------------------------------------------------
CASH - END OF MONTH 42,709 5,504 -- -- 48,213 277,400 (758,933) (3,209,239)
-----------------------------------------------------------------------------------------------------------------------------------
*Compensation to sole proprietors for services rendered to bankruptcy estate
Note: In order to be consistent with our Budgets the line above labeled "Net
Payroll" includes the gross salaries. In addition the line above
labeled "Payroll Taxes" also includes all fringe benefit disbursements.
THE FOLLOWING SECTION MUST BE COMPLETED
Disbursements for calculating U.S. Trustee Quarterly Fees (From Current Month Actual Column)
Total Disbursements 509,472
Less: Transfers to Debtor in Possession Accounts --
Plus: Estate Disbursements made by outside sources (i.e. from escrow account) --
---------
Total Disbursements for Calculating U.S. Trustee Quarterly Fees 509,472
=========
FORM MOR-1
EXHIBIT 99
UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF PENNSYLVANIA
Quad Systems Corporation Case No. 00-35667
Schedule MOR 1 Reporting Period: 9/01/01-9/30/01
Continuation Sheet
Current Month Cummulative
Actual Projected Actual Projected
------ --------- ------ ---------
Explanation of Other Income
---------------------------
Pre Pet. Voids (5,706) 39,472 0
QEL/QSM Payments 7,940 1,342,985 0
Rental of Parking Lot 0 4,000 0
Misc COBRA pmts/refunds -- 39,877 0
Escrow from ADP -- 198,792 0
Insurance Claim/Refund 10,847 110,576 0
------- ----- ---------- ----------
Total 13,081 0 1,735,702 0
======= ===== ========== ==========
Explanation of Other Disbursements
----------------------------------
Congress Repayments -- -- 18,674,897 13,076,000
First Union Loan Repayments 0 0 535,000 620,000
Interest Expense -- 0 21,139 24,000
Commissions 5,814 -- 634,583 1,232,000
Engineering 0 -- 5,000 99,000
Samsung Settlement Payment 2,182 -- 1,530,053 --
Investment 425,000 -- 3,575,000 --
QEL Requirements 0 0 450,000 600,000
------- ----- ---------- ----------
Total 432,996 -- 25,425,672 15,651,000
======= ===== ========== ==========
EXHIBIT 99
UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF PENNSYLVANIA
In re: Quad Systems Corporation Case No. 00-35667
------------------------ Reporting Period: 9/01/01-9/30/01
Debtor
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 $ (5,700) $ 17,458,325
Less: Returns and Allowances -- --
----------- ------------
Net Revenue (5,700) 17,458,325
=========== ============
COST OF GOODS SOLD
Beginning Inventory -- 15,046,970
Add: Purchases -- 4,895,468
Add: Cost of Labor -- 396,512
Add: Other Costs (attach schedule) -- 1,632,620
Less: Ending Inventory -- --
Cost of Goods Sold -- 21,971,570
Gross Profit (5,700) (4,513,245)
Advertising -- 50,467
Auto and Truck Expense -- --
Bad Debts -- 52,000
Contributions -- --
Employee Benefit Programs -- 161,360
Insider Compensation* -- --
Insurance 40,150 357,768
Management Fees/Bonuses -- --
Office Expense 21,450 123,364
Pension & Profit-Sharing Plans -- --
Repairs and Maintenance -- 54,962
Rent and Lease Expense -- 388,216
Salaries/Commissions/Fees 32,060 3,492,832
Supplies -- 2,005
Taxes -- Payroll (3,939) 398,711
Taxes -- Real Estate -- 12,401
Taxes -- Other (49,661) 48,719
Travel and Entertainment 358 392,852
Utilities (12,062) 174,356
Other (attach schedule) 21,961 907,064
Total Operating Expenses Before Depreciation 50,317 6,617,077
Depreciation/Depletion/Amortization -- 269,423
Net Profit (Loss) Before Other Income & Expenses (56,017) (11,399,745)
----------- ------------
OTHER INCOME AND EXPENSES
Other Income (attach schedule) (163,570) 12,420,336
Interest Expense -- 535,521
Other Expense (attach schedule) -- 4,001,000
Net Profit (Loss) Before Reorganization Items (219,587) (3,515,930)
----------- ------------
REORGANIZATION ITEMS
Professional Fees -- 800,000
U.S. Trustee Quarterly Fees -- 24,000
Interest Earned on Accumulated Cash
from Chapter 11 (see continuation sheet) -- (3,715)
(Gain)/Loss from Sale of Equipment -- 5,509,232
Other Reorganization Expenses (attach schedule) 6,448,734 8,623,734
Total Reorganization Expenses 6,448,734 14,953,251
Income Taxes -- (175,754)
----------- ------------
Net Profit (Loss) (6,668,321) (18,293,427)
=========== ============
*"Insider" is defined in 11 U.S.C. Section 101(31).
FORM MOR-2
(9/99)
EXHIBIT 99
UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF PENNSYLVANIA
In re: Quad Systems Corporation Case No. 00-35667
------------------------ Reporting Period: 9/01/01-9/30/01
Debtor
STATEMENT OF OPERATIONS - continuation sheet
Cumulative
BREAKDOWN OF OTHER CATEGORY Month Filing to Date
--------------------------------------------------------------------------
Other Costs
Overhead Absorption -- 1,433,044
Service Labor Costs -- 409,337
Warranty Costs -- 513,758
Non-Inventory Reserve Expenses -- (723,519)
--------- ---------
Total -- 1,632,620
========= =========
Other Operational Expenses
Freight 711 75,147
Bank Charges & LOC Fees (50) 396,014
Professional Fees 21,300 180,064
Patent Royalties -- 255,839
--------- ---------
Total 21,961 907,064
========= =========
Other Income
Dividend /Forgiveness of Intercompany
Debt from Subsidiaries (178,865) 12,385,817
Gain Realized by liquidation of
Quad Foreign Sales (Subsidiary) -- 19,224
Interest Income 15,295 15,295
--------- ---------
Total (163,570) 12,420,336
========= =========
Other Expenses
Loss realized by liquidation of
Hitech (subsidiary) -- 4,020,000
Gain/Loss on sale to Tyco -- (19,000)
--------- ---------
Total -- 4,001,000
========= =========
Other Reorganization Expenses
Settlement payment to Samsung 6,500,000 8,000,000
Severance Expense (51,266) 448,734
Retention Expense -- 175,000
--------- ---------
Total 6,448,734 8,623,734
========= =========
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.
FORM MOR-2 (CONT)
(9/99)
EXHIBIT 99
UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF PENNSYLVANIA
In re: Quad Systems Corporation Case No. 00-35667
------------------------ Reporting Period: 9/01/01-9/30/01
Debtor
BALANCE SHEET
The Balance Sheet is to be completed on an accrual basis only. Pre-petition
liabilities must be classified separately from postpetition obligations.
BOOK VALUE
AT END OF BOOK VALUE
CURRENT ON
REPORTING PETITION
ASSETS MONTH DATE
--------------------------------------------------------------------------------
Unrestricted Cash and Equivalents 3,137,720 161,799
Restricted Cash and Cash Equivalents
(see continuation sheet) 5,504 815,962
Accounts Receivable (Net) 796,611 3,130,385
Notes Receivable -- --
Inventories -- 15,046,970
Prepaid Expenses 51,452 433,952
Professional Retainers -- --
Other Current Assets (attach schedule) 354,198 (325,421)
---------- ----------
TOTAL CURRENT ASSETS 4,345,485 19,263,647
========== ==========
PROPERTY AND EQUIPMENT
Real Property and Improvements -- 276,575
Machinery and Equipment -- 2,124,028
Furniture, Fixtures and Office Equipment -- 3,210,503
Leasehold Improvements -- 330,078
Vehicles -- 30,594
Less Accumulated Depreciation -- 4,324,223
---------- ----------
TOTAL PROPERTY & EQUIPMENT -- 1,647,555
========== ==========
OTHER ASSETS
Loans to Insiders*
Other Assets (attach schedule) 6,599,779 1,054,423
TOTAL OTHER ASSETS 6,599,779 1,054,423
---------- ----------
TOTAL ASSETS 10,945,264 21,965,625
========== ==========
BOOK VALUE
AT END OF BOOK VALUE
CURRENT ON
REPORTING PETITION
LIABILITIES AND OWNER EQUITY MONTH DATE
------------------------------------------------------------------------------------------
LIABILITIES NOT SUBJECT TO COMPROMISE (Postpetition)
Accounts Payable 16,739 8,246,757
Taxes Payable (refer to FORM MOR-4) 452,702 370,167
Wages Payable 197,284 671,333
Notes Payable -- --
Rent/Leases --- Building/Equipment -- 220,133
Secured Debt / Adequate Protection Payments -- 6,317,257
Professional Fees 722,129 --
Amounts Due to Insiders* -- --
Other Postpetition Liabilities (attach schedule) 466,248 3,861,109
---------- ----------
TOTAL POSTPETITION LIABILITIES 1,855,102 19,686,756
========== ==========
LIABILITIES SUBJECT TO COMPROMISE (Pre-Petition)
Accounts Payable Accrual 6,229,641
Priority Debt 165,840 --
Unsecured Debt 9,142,705 --
---------- ----------
TOTAL PRE-PETITION LIABILITIES 15,538,186 --
---------- ----------
TOTAL LIABILITIES 17,393,288 19,686,756
========== ==========
OWNER EQUITY
Capital Stock 135,531 135,531
Additional Paid-In Capital 24,733,708 24,733,708
Partners' Capital Account -- --
Owner's Equity Account --
Retained Earnings --- Pre-Petition (22,590,370) (22,590,370)
Retained Earnings --- Postpetition (8,726,893) --
Adjustments to Owner Equity (attach schedule) --
Postpetition Contributions (Distributions)
(Draws) (attach schedule) -- --
---------- ----------
NET OWNER EQUITY (6,448,024) 2,278,869
---------- ----------
TOTAL LIABILITIES AND OWNERS EQUITY 10,945,264 21,965,625
========== ==========
*"Insider" is defined in 11 U.S.C. Section 101(31).
FORM MOR-3
(9/99)
EXHIBIT 99
UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF PENNSYLVANIA
In re: Quad Systems Case No. 00-35667
------------ Reporting Period: 9/01/01-9/30/01
Debtor
BALANCE SHEET - continuation sheet
BOOK VALUE
AT END OF BOOK VALUE
CURRENT ON
REPORTING PETITION
ASSETS MONTH DATE
--------------------------------------------------------------------------
Other Current Assets
Accts Rec -- Misc 237,377 537
Temp. Empl Advances -- 43,891
Permanent Advances -- 921
Deposits 37,470 40,437
Interco -- Current 79,351 (411,207)
Other Assets
Acquisition Costs -- QEL -- 8,598
Patent Costs -- 1,977
Invest -- Hitech/QSM -- 4,026,831
Invest -- QEL 1,937,500 2,500,000
Interco -- Long Term -- (10,145,262)
Invest -- QSL 4,662,279 4,662,279
BOOK VALUE
AT END OF BOOK VALUE
CURRENT ON
REPORTING PETITION
LIABILITIES AND OWNER EQUITY MONTH DATE
------------------------------------------------------------------------
Other Postpetition Liabilities
Deferred Revenue -- 1,151,531
Customer Deposits 106,195 416,644
Accrued Expenses 58,616 1,872,647
Commission Payable 301,437 420,287
Postpetition Contributions
(Distributions) (Draws)
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.
FORM MOR-3 (CONT)
(9/99)
EXHIBIT 99
UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF PENNSYLVANIA
In re: Quad Systems Corporation Case No. 00-35667
------------------------ Reporting Period: 9/01/01-9/30/01
Debtor
STATUS OF POSTPETITION 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
Amount
Beginning Withheld or Amount Check No. Ending Tax
Tax Liability Accrued Paid Date Paid or EFT Liability
-----------------------------------------------------------------------------------------------------------------------------------
Federal
Withholding - 7,333 7,333 9/14,9/28 ADP EFT -
FICA-Employee - 1,231 1,231 9/14,9/28 ADP EFT -
FICA-Employer - 1,231 1,231 9/14,9/28 ADP EFT -
Unemployment - 39 39 9/14,9/28 ADP-EFT -
Income - - - - - -
Other: Tax Accounting Accrual
Only from prior years 352,702 - - 352,702
--------- ------- ------- ------ ------- ---------
Total Federal Taxes 352,702 9,834 9,834 - - 352,702
--------- ------- ------- ------ ------- ---------
State and Local
Withholding - 1,408 1,408 9/14,9/28 ADP EFT -
Sales 100,000 - - - - 100,000
Excise -
Unemployment - 332 332 9/14,9/28 ADP EFT -
Real Property -
Other: Canadian P/R Taxes -
--------- ------- ------- ------ ------- ---------
Total State and Local 100,000 1,740 1,740 - 100,000
--------- ------- ------- ------ ------- ---------
Total Taxes 452,702 11,574 11,574 452,702
--------- ------- ------- ------ ------- ---------
SUMMARY OF UNPAID POSTPETITION DEBTS
Attach aged listing of accounts payable.
Number of Days Past Due
-------------------------------------------------------------
Current 0-30 31-60 61-90 Over 90 Total
------- ---- ----- ----- ------- -----
Accounts Payable 16,739 - 16,739
Wages Payable 197,274 197,274
Taxes Payable 452,702 452,702
Rent/Leases-Building - -
Rent/Leases-Equipment - -
Secured Debt/Adequate Protection Payments - -
Professional Fees 722,129 722,129
Amounts due to Insiders* - -
Other: -
Other: -
--------- ----- ------ ------ ------- ---------
Total Postpetition Debts 1,372,105 - 16,739 - - 1,388,844
========= ===== ====== ====== ======= =========
Explain how and when the Debtor intends to pay any past due postpetition debts.
Note: above Taxes Payable in Past Due Column represents an prior year accounting
accrual only. It does not represent an actual payment due.
Note: $100,000. Accrued for a California Sales Tax Audit.
*"Insider" is defined in 11 U.S.C. Section 101(31).
FORM MOR-4
(9/99)
EXHIBIT 99
UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF PENNSYLVANIA
In re: Quad Systems Corporation Case No. 00-35667
------------------------ Reporting Period: 9/01/01-9/30/01
Debtor
ACCOUNTS RECEIVABLE RECONCILIATION AND AGING
Accounts Receivable Reconciliation Amount
---------------------------------- ------
Total Accounts Receivable at the beginning of the reporting period 1,444,913
+ Amounts billed during the period --
- Amounts collected during the period 428,302
Total Accounts Receivable at the end of the reporting period 1,016,611
Accounts Receivable Aging
-------------------------
0 - 30 days old 10,318
31 - 60 days old 191,887
61 - 90 days old 667,816
91+ days old 146,590
Total Accounts Receivable 1,016,611
Amount considered uncollectible (Bad Debt) (220,000)
Accounts Receivable (Net) 796,611
Note: the Accounts Receivable collections include the application of customer
deposits received in prior periods
FORM MOR-5
(9/99)
EXHIBIT 99
UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF PENNSYLVANIA
In re: Quad Systems Corporation Case No. 00-35667
------------------------ Reporting Period: 9/01/01-9/30/01
Debtor
DEBTOR QUESTIONNAIRE
Must be completed each month Yes No
1. Have any assets been sold or transferred outside the normal course of
business this reporting period? If yes, provide an explanation below. X
2. Have any funds been disbursed from any account other than a debtor in
possession account this reporting period? If yes, provide an explanation below. X
3. Have all postpetition tax returns been timely filed? If no, provide an
explanation below. X
4. Are workers compensation, general liability and other necessary insurance
coverages in effect? If no, provide an explanation below. X
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FORM MOR-5
(9/99)