8-K/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K/A

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 3, 2008

VISUAL MANAGEMENT SYSTEMS, INC.

(Exact name of registrant as specified in its charter)

Nevada	333-133936	68-0634458
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification Number)

1000 Industrial Way North, Suite C

Toms River, New Jersey 08755

(Address of principal executive offices, including zip code)

Registrant’s telephone number, including area code: (732) 281-1355

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2 (b) under the Exchange Act  (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4 (c) under the Exchange Act  (17 CFR 240.13e-4 (c))

EXPLANATORY NOTE

On April 8, 2008, Visual Management Systems, Inc. filed a Report on Form 8-K (the “8-K”) to announce that it had acquired, on April 3, 2008, substantially all of the assets of Intelligent Digital Systems, LLC. This Form 8-K/A amends the Form 8-K to include financial statements of the acquired business and pro forma financial information not available at the time of the filing of the 8-K.

Item 9.01FINANCIAL STATEMENTS AND EXHIBITS

(a) Financial Statements of Business Acquired

The Financial Statements of Intelligent Digital Systems, LLC and the notes thereto are filed as Exhibit 99.1 to this Form 8-K/A.

(b) Pro Forma Financial Information

The pro forma financial statements giving effect to the acquisition of substantially all of the assets of Intelligent Digital Systems, LLC and the notes thereto are filed as Exhibit 99.2 to this Form 8-K/A.

(c) Exhibits

99.1	Financial Statements of Intelligent Digital Systems, LLC
99.2	Pro Forma Financial Statements giving effect to the acquisition of substantially all of the assets of Intelligent Digital Systems, LLC.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Visual Management Systems, Inc.
(Registrant)
By:	/s/ Jason Gonzalez
Name:	Jason Gonzalez
Title:	President and Chief Executive Officer

Dated: June 17, 2008

2

EX-99.1

EXHIBIT 99.1

Financial Statements of Intelligent Digital Systems, LLC

REPORT OF INDEPENDENT AUDITORS

The Members

Intelligent Digital Systems, LLC

We have audited the accompanying balance sheet of Intelligent Digital Systems, LLC as of December 31, 2007 and the related statements of income and members’ capital and cash flows for the year then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statements presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Intelligent Digital Systems, LLC at December 31, 2007 and the results of their preparations and cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States.

January 28, 2008

Perlson, Touhy & Company LLP

North Massapequa, NY

Intelligent Digital Systems, LLC
Balance Sheets	At			At
	December 31, 2007			March 31, 2008
	(audited)			(unaudited)
Current Assets
Cash and cash equivalents	$	5,217		$	2,777
Accounts Receivable		38,874			3,185
Inventory		44,155			20,123
Prepaid Expenses		1,150			-
Total Current Assets		89,396			26,085
Property and Equipment, net		300			225
Total Assets		89,696			26,310
Current Liabilities
Accounts payable		1,093			15,000
Long term liabilities		15,000
Member's capital		73,603			10,502
Total liabilites and member's capital	$	89,696		$	26,310
Intelligent Digital Systems, LLC
Statements of Operations
		For the twelve months ended			For the three months ended
		December 31, 2007 (audited)			March 31, 2008 (unaudited)
Revenues - net	$	131,260		$	9,918
Cost of revenues		130,716			63,849
Gross margin		544			(53,931	)
Operating expenses		337,585			17,303
Loss from operations		(337,041	)		(71,234	)
Other (income) expenses
Debt conversion expense					-
Interest income		(12	)		-
Interest expense					-
Miscellaneous income					-
-		(12	)		-
Net Profit (Loss)	$	(337,029	)	$	(71,234	)

Intelligent Digital Systems, LLC	For the twelve months ended			For the three months ended
Statements of Cash Flows	December 31, 2007			March 31, 2008
	(audited)			(unaudited)
Cash flows from operating activities
Net loss	$	(337,029	)	$	(71,234	)
Adjustment to reconcile net loss to net cash
used by operating activities:
Depreciation		1,865			75
Effects of changes in operating assets and liabilities
Accounts receivable		32,261			35,689
Inventories		37,843			24,032
Prepaid payroll taxes		(1,150	)		1,150
Accounts payable		466			(1,093	)
Payroll taxes payable		(5,137	)		808
Net cash used by operating activities		(270,881	)		(10,573	)
Cash flows from financing activities
Contributed capital by members		267,667			8,133
Net decrease in cash and cash equivalents		(3,214	)		(2,440	)
Net increase in cash and cash equivalents		-			-
Cash and cash equivalents, beginning of year		8,431			5,217
Cash and cash equivalents, end of period	$	5,217		$	2,777

See notes to financial statements

INTELLIGENT DIGITAL SYSTEMS, LLC

NOTES TO FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2007

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNT POLICIES

Description of Business

Intelligent Digital Systems, LLC (the “Company”), is a developer and distributor of digital video recording equipment. The company has an office in West Islip, New York.

Inventories

Inventories are stated at the lower of cost or market on a first-in, first-out basis.

Property and Equipment

Property and equipment are stated at cost and are depreciated using the straight-line method over the estimated useful lives of the respective assets, which range from 3 to 7 years. Leasehold improvements are stated at cost and are depreciated using the straight-line method over the shorter of the lease term or estimated useful life of the asset. Expenditures for major renewals and improvements are capitalized, while repairs and maintenance that do not extend the useful life of such assets are charged to expense as incurred. The cost of assets sold or retired and the related accumulated depreciation are removed from the accounts with any resulting gain or loss included in net income (loss). Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

Income Taxes

Under the provisions of the Internal Revenue Code, the Company, is a limited liability company and is not directly subject to federal or state income taxes. The results of its operations are includable in the individual tax returns of its members, therefore no provision for income tax expense has been included in the accompanying financial statements. There are no significant differences between the tax basis and the reported amounts of assets and liabilities.

Revenue Recognition

The company recognizes revenue from product sales upon shipment to the customer.

Use of Estimates

The preparation of the audited financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities from the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.

NOTE 2 - ACCOUNTS RECEIVABLE

Accounts receivable are presented without a reserve for bad debt since the entire balance has been collected subsequent to the balance sheet date.

NOTE 3 - DUE TO RELATED ENTITY

The Company owes a related entity $15,000. The advance is non-interest bearing.

EX-99.2

EXHIBIT 99.2

Pro Forma Financial Information

The following pro forma condensed consolidated balance sheets and statements of operations are presented to give effect to the acquisition by Visual Management Systems, Inc. of substantially all of the assets of Intelligent Digital Systems, LLC (“IDS”) on April 3, 2008. The pro forma condensed consolidated balance sheet assumes that the acquisition occurred as of March 31, 2008. The pro forma condensed consolidated statements of operations assume that the acquisition occurred on January 1, 2007. Such information does not purport to be indicative of the results which would have actually been obtained if the acquisitions had been effected on the dates indicated nor is it indicative of actual or future operating results or financial position.

Visual Management Systems, Inc. and Subsidiaries
Pro Forma Combined Balance Sheet
At March 31, 2008	Visual Management Systems, Inc. and Subsidiaries			Intelligent Digital Systems, LLC			Pro Forma Adjustments			Pro Forma Combined
Assets
Current assets
Cash	$	111,567		$	2,777	a	$	(7,777	)	$	106,567
Accounts receivable		195,912			3,185	b		-			199,097
Inventory		587,606			20,123	c		-			607,729
Prepaid expenses		5,190			-			-			5,190
Total current assets		900,275			26,085			(7,777	)		918,583
Property and equipment - net		726,786			225	d		(225	)		726,786
Deposits and other assets		90,808									90,808
Investment in joint venture						e		5,000			5,000
Intangible assets - net		1,659,727				f		1,562,692			3,222,419
Total Assets	$	3,377,596		$	26,310		$	1,559,690		$	4,963,596
Liabilities and Stockholders' Deficit
Current liabilities
Accounts payable	$	705,074		$	808	i	$	(808	)	$	705,074
Accrued expenses and other current liabilities		973,096									973,096
Customer Deposits		236,041									236,041
Sales tax payable		78,236									78,236
Bank line of credit		49,981									49,981
Short term debt		-			-	g		42,000			42,000
Current maturity of convertible notes payable		833,333									833,333
Current portion of long-term debt		346,278									346,278
Current portion of obligations under capital leases		53,811									53,811
Total current liabilities		3,275,850			808			41,192			3,317,850
Convertible notes payable		2,268,334				h		1,544,000			3,812,334
(net of current maturities and unamortized discount of $648,333)
Long-term debt - net of current portion		306,696			15,000	i		(15,000	)		306,696
Obligations under capital leases - net of current portion		100,554									100,554
Stockholders' equity (deficit)
Members Capital					10,502	j		(10,502	)		-
Preferred stock		1									1
Common stock, $.001 par value; 50,000,000 shares authorized		8,002									8,002
Additional paid-in-capital		12,744,785									12,744,785
Accumulated deficit		(15,176,626	)								(15,176,626	)
Treasury stock		(150,000	)								(150,000	)
Total stockholders' equity (deficit)		(2,573,838	)		10,502			(10,502	)		(2,573,838	)
Total liabilities and stockholder's equity (deficit)	$	3,377,596		$	26,310		$	1,559,690		$	4,963,596
a  To record the $5,000 invested in the joint venture by VMS and to record the fair value of the cash received.
b  Adjustment to record the fair value of assets received
c  Adjustment to record the fair value of assets received
d  Adjustment to record the fair value of assets received
e  Adjustment to record the VMS investment in the joint venture
f   Adjustment to record the fair value of the intangible asset
g  Adjustment to record the portion of the purchase price to be paid in seven equal monthly installments
h  Adjustment to record the convertible note
i   Adjustment to record the fair value of the liabilities assumed
j   Adjustment to eliminate share capital of IDS

Visual Management Systems, Inc. and Subsidiaries

Pro Forma Combined Statement of Operations

Three months ended March 31, 2008	Visual Management  Systems, Inc.  and Subsidiaries			Intelligent Digital  Systems, LLC				Pro Forma Adjustments			Pro Forma Combined
Revenues - net	$	1,577,309		$	9,918		aa	$	(9,918	)	$	1,577,309
Cost of revenues		843,113			63,849		aa		(63,849	)		843,113
Gross margin		734,196			(53,931	)			53,931			734,196
Operating expenses		2,729,362			17,303		bb		60,832			2,807,497
Loss from operations		(1,995,166	)		(71,234	)			(6,901	)		(2,073,301	)
Other (income) expenses
Debt conversion expense		-
Interest income		-			-
Interest expense		140,003										140,003
Miscellaneous income		305										305
		140,308			-				-			140,308
Net Income (Loss)	$	(2,135,474	)	$	(71,234	)		$	(6,901	)	$	(2,213,609	)
Weighted average shares outstanding		7,442,367										7,442,367
Per share data (basic and diluted)	$	(0.29	)								$	(0.30	)

aa To eliminate IDS results

bb Adjustment to eliminate IDS results and the adjustment for the amortization of the intangible asset over the estimated useful life of 5 years

Visual Management Systems, Inc. and Subsidiaries
Pro Forma Combined Statement of Operations
Year ended December 31, 2007	Visual Management Systems, Inc. and Subsidiaries			Intelligent Digital Systems, LLC				Pro Forma Adjustments			Pro Forma Combined
Revenues - net	$	6,315,622		$	131,260		aa	$	(131,260	)	$	6,315,622
Cost of revenues		3,392,995			130,716		aa		(130,716	)		3,392,995
Gross margin		2,922,627			544				(544	)		2,922,627
Operating expenses		8,490,554			337,585		bb		(25,047	)		8,803,092
Loss from operations		(5,567,927	)		(337,041	)			24,503			(5,880,465	)
Other (income) expenses
Debt conversion expense		796,084										796,084
Interest income		-			(12	)	aa		12			-
Interest expense		3,420,634										3,420,634
Miscellaneous income		-										-
		4,216,718			(12	)			12			4,216,718
Net loss		(9,784,645	)		(337,029	)			24,491			(10,097,183	)
Deemed dividend on convertible preferred stock		635,582			-				-			635,582
Net income available to common	$	(10,420,227	)	$	(337,029	)			24,491		$	(10,732,765	)
Weighted average shares outstanding		6,646,751										6,646,751
Per share data (basic and diluted)	$	(1.57	)								$	(1.61	)
aa    To eliminate IDS results
bb   Adjustment to eliminate IDS results and the adjustment for the amortization of the intangible asset over the estimated useful life of 5 years